Baker Hughes (BKR) 10-K risk factor changes: FY2020 vs FY2019

[removed: *We] [added: We] operate in a highly competitive environment, which may adversely affect our ability to [removed: succeed.*][added: succeed.]

We operate in a highly competitive environment for marketing oilfield products and services and securing [removed: equipment and trained personnel.][added: equipment.]

In order to be competitive, we must provide new [added: and differentiating] technologies, reliable products and services that perform as expected and that create value for our [removed: customers, and successfully recruit, train and retain competent personnel.][added: customers.]

In addition, our investments in new [removed: technologies and properties, plants] [added: technologies, equipment,] and [removed: equipment] [added: facilities] may not provide competitive returns.

[removed: *The] [added: The] high cost or unavailability of [removed: infrastructure,] [added: raw] materials, equipment, [removed: supplies] and [removed: personnel] [added: supplies essential to our business] could adversely affect our ability to execute our operations on a timely [removed: basis.*][added: basis.]

People are a key resource to developing, [removed: manufacturing] [added: manufacturing,] and delivering our products and [added: providing technical] services to our customers around the world.

A [added: competent,] well-trained, [removed: motivated] [added: highly skilled, motivated, and diverse] workforce has a positive impact on our ability to attract and retain business.

Periods of rapid growth present a challenge to us and our industry to recruit, [removed: train] [added: train,] and retain our employees, while also managing the impact of wage inflation and the limited available qualified labor in the markets where we operate.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 12][added: 13]

[removed: *Our] [added: Our] business could be impacted by geopolitical and terrorism threats in countries where we or our customers do business and our business operations may be impacted by civil [removed: unrest, government expropriations] [added: unrest] and/or [removed: epidemic outbreaks.*][added: government expropriations.]

Geopolitical and terrorism risks could lead to, among other things, a loss of our investment in the country, impairment of the safety of our [removed: employees] [added: employees,] and impairment of our or our customers’ ability to conduct operations.

[removed: *Compliance] [added: Compliance] with and changes in laws could be costly and could affect operating results.

In addition, government disruptions could negatively impact our ability to conduct our [removed: business.*][added: business.]

We have operations in the United States [added: (U.S.)] and in more than 120 countries that can be impacted by expected and unexpected changes in the legal and business environments in which we operate.

Compliance-related issues could [removed: also] limit our ability to do business in certain countries and impact our [removed: earnings.][added: earnings or result in investigations leading to fines, penalties or other remedial measures.]

Changes that could impact the legal environment include new legislation, new regulations, new policies, [removed: investigations] [added: investigations,] and legal proceedings and new interpretations of existing legal rules and regulations, in particular, changes in export control laws or exchange control laws, additional restrictions on doing business in countries subject to sanctions, and changes in laws in countries where we operate.

[removed: Increased global] [added: Increased] cybersecurity [removed: vulnerabilities, threats] [added: vulnerabilities] and [added: threats, and] more sophisticated and targeted [removed: cyber-related] [added: cyber] attacks [added: and other security incidents,] pose risks to our systems, [removed: networks, products, solutions, services] [added: data] and [removed: data.][added: business, and our relationships with customers and other third parties.]

[removed: Cybersecurity] [added: Increased cybersecurity vulnerabilities and threats, and more sophisticated and targeted cyber] attacks [removed: also] [added: and other security incidents,] pose risks to our [added: and our] customers’, partners’, suppliers’ and third-party service providers’ [removed: products, systems] [added: systems, data,] and [removed: networks] [added: business,] and the confidentiality, availability and integrity of our and our [added: employees’ and] customers’ data.

While we attempt to mitigate these risks, we remain vulnerable to [removed: additional known or unknown threats.][added: cyber attacks and other security incidents.]

Given our global footprint, the large number of [removed: customers] [added: customers, partners, suppliers and service providers] with which we do business, and the increasing sophistication [added: and complexity] of cyber attacks, a cyber attack could occur and persist for an extended period [removed: of time] without detection.

[removed: We expect that any] [added: Any] investigation of a cyber attack [added: or other security incident] would be inherently unpredictable and [removed: that] it would take time before the completion of any investigation and before there is availability of full and reliable information.

During such time we would not necessarily know the extent of the harm or how best to remediate it, and certain errors or actions could be repeated or compounded before they are discovered and remediated, all or any of which would further increase the costs and consequences of a cyber [removed: attack.][added: attack or other security incident.]

We [removed: also] may have access to sensitive, [removed: confidential] [added: confidential, proprietary] or personal data or information in certain of our businesses that is [added: or may become] subject to [added: various data] privacy and security laws, [removed: regulations and] [added: regulations, standards, contractual obligations or] customer-imposed [removed: controls.][added: controls in the jurisdictions in which we operate.]

Despite our [added: and our service providers’] efforts to protect [removed: sensitive, confidential or personal] [added: our] data [removed: or] [added: and] information, we [added: and our service providers have been and] may [added: in the future] be vulnerable to [removed: material] security breaches, theft, misplaced or lost data, programming errors, [added: phishing attacks, denial of service attacks, acts of vandalism, computer viruses, malware, ransomware,] employee errors and/or malfeasance [added: or similar events, including those perpetrated by criminals or nation-state actors,] that could potentially lead to the [removed: compromising of sensitive, confidential or personal data or information, improper use of our systems, software solutions or networks,] [added: compromise,] unauthorized access, use, disclosure, modification or destruction of [added: data or] information, [added: improper use of our systems,] defective products, production downtimes and operational disruptions.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 13][added: 14]

[removed: *Our] [added: Our] failure to comply with the Foreign Corrupt Practices Act (FCPA) and other similar laws could have a negative impact on our ongoing [removed: operations.*][added: operations.]

Our ability to comply with the FCPA, the U.K. Bribery [removed: Act] [added: Act,] and various other anti-bribery and anti-corruption laws depends on the success of our ongoing compliance program, including our ability to successfully manage our agents, distributors and other business partners, and supervise, [removed: train] [added: train,] and retain competent employees.

[removed: *Anti-money] [added: Anti-money] laundering and anti-terrorism financing laws could have [removed: significant] adverse consequences for [removed: us.*][added: us.]

This program includes policies, procedures, [removed: processes] [added: processes,] and other internal controls designed to identify, monitor, [removed: manage] [added: manage,] and mitigate the risk of money laundering or terrorist financing posed by our products, services, [removed: customers] [added: customers,] and geographic locale.

These controls establish procedures and processes to detect and report suspicious transactions, perform customer due diligence, respond to requests from law enforcement, and meet all recordkeeping and reporting requirements related to particular transactions involving currency or monetary [removed: instruments.]

[removed: *Changes] [added: Changes] in tax laws, tax rates, tariffs, adverse positions taken by taxing authorities, and tax audits could impact operating [removed: results.*][added: results.]

[removed: *Our] [added: Our] operations involve a variety of operating hazards and risks that could cause [removed: losses.*][added: losses.]

These hazards include blowouts, explosions, nuclear-related events, fires, collisions, [removed: capsizings] [added: capsizings,] and severe weather conditions.

[removed: *Compliance] [added: Compliance] with, and rulings and litigation in connection with, environmental [removed: and climate change] regulations and the environmental [removed: and climate change] impacts of our or our customers’ operations may adversely affect our business and operating [removed: results.*][added: results.]

These forecasts may be substantially different from actual results, which may be affected by factors such as: changes in law that impose restrictions on air [added: or other] emissions, wastewater management, waste disposal, hydraulic fracturing, or wetland and land use practices; more stringent enforcement of existing environmental laws and regulations; a change in our share of any remediation costs or other unexpected, adverse outcomes with respect to sites where we have been named as a potentially responsible party, including (without limitation) Superfund sites; the discovery of other [removed: sites] [added: sites, or discovery of additional issues at existing sites,] where additional expenditures may be required to comply with environmental legal obligations; and the accidental discharge of hazardous materials.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 14][added: 15]

[removed: International,] [added: International,] national, and state governments and agencies continue to evaluate and promulgate legislation and regulations that are focused on restricting [removed: emissions commonly referred to as] greenhouse gas (GHG) emissions.

Caps or fees on carbon emissions, including in the [removed: United States,] [added: U.S.,] have been and may continue to be established and the cost of such caps or fees could disproportionately affect the fossil-fuel [removed: energy sector.][added: sectors.]

Other developments focused on restricting GHG emissions include the United Nations Framework Convention on Climate Change, which includes [added: implementation of] the Paris Agreement and the Kyoto [removed: Protocol;] [added: Protocol by] the [added: signatories; the] European Union Emission Trading System; Article 8 of the European Union Energy Efficiency Directive and the United Kingdom’s [added: Streamlined] Energy [removed: Savings Opportunity Scheme(ESOS);] [added: and Carbon Reporting (SECR); the European Commission’s proposed carbon border adjustment mechanism (CBAM);] and, in the [removed: United States,] [added: U.S.,] the Regional Greenhouse Gas Initiative, the Western Climate Action Initiative, and various state programs implementing the California Global Warming Solutions Act of 2006 (known as Assembly Bill 32).

[removed: The] [added: The] potential for climate related changes may pose future risks to our operations and those of our [removed: customers.][added: customers.]

OPERATIONAL RISKS

Our business could be adversely affected by the widespread outbreak of a disease or virus.

The current global spread of the COVID-19 virus has and may continue to materially and adversely affect our results of operations, cash flows, and financial condition for an indeterminate amount of time.

The markets have experienced a decline in oil prices in response to a decline in oil demand due to the economic impacts of the COVID-19 pandemic.

As demand for our products and services declines, the utilization of our assets and the prices we are able to charge our customers for our products and services could decline.

The continued spread of COVID-19 or a similar pandemic could result in further instability in the markets and decreases in commodity prices resulting in further adverse impacts on our results of operations, cash flows, and financial condition.

In addition, the continued spread of the COVID-19 virus, or similar pandemics, and the continuation of the measures to try to contain the virus or similar viruses, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns, may further impact our workforce and operations, the operations of our customers, and those of our vendors and suppliers.

Also, if a significant number of our employees were to contract the virus or be quarantined, the Company may not be able to complete key or critical tasks, not limited to, but including key financial, reporting, and operational controls.

There is considerable uncertainty regarding such measures and potential future measures, which would have a material adverse effect on our results of operations, cash flows, and financial condition.

Our restructuring activities may not achieve the results we expect, and those activities could increase, which could materially and adversely affect our results of operations, cash flows, and financial condition.

The restructuring charges we have taken and impairment calculations we have performed are based on current market conditions, including the trading price of our common shares.

There is no assurance that our restructuring plans will be successful and achieve the expected results.

In addition, continued deterioration of market conditions, whether due to the continued spread of COVID-19 or other events could result in further restructuring costs and impairments.

Failure to effectively and timely execute our energy transition strategy could have an adverse effect on the demand for our technologies and services.

Our future success may depend upon our ability to effectively execute on our energy transition strategy.

Our strategy depends on our ability to develop additional technologies and work with our customers and partners to advance new energy solutions such as carbon capture use and storage, hydrogen energy, geothermal, and other integrated solutions.

If the energy transition landscape changes faster than anticipated or faster than we can transition or if we fail to execute our energy transition strategy as planned, demand for our technologies and services could be adversely effected.

If we are unable to attract and retain qualified personnel, we may not be able to execute our business strategy effectively and our operations could be adversely affected.

Our future success depends on our ability to recruit, train, and retain qualified personnel.

CREDIT AND CUSTOMER CONTRACTING RISKS

managers, as well as service providers, and may require us to assume additional risks associated with cost over-runs.

Our contracts may be terminated early in certain circumstances.

Our contracts with clients generally may be terminated by the client for convenience, default, or extended force majeure (which could include inability to perform due to COVID-19).

Termination for convenience will typically require the payment of an early termination fee by the client, but the early termination fee may not fully compensate us for the loss of the contract.

Termination by the client for default or extended force majeure due to events outside of our control generally will not require the client to pay an early termination fee.

Our financial position, results of operations, or cash flows could be materially adversely affected if our clients terminate some of our contracts and we are unable to secure new contracts on a timely basis and on substantially similar terms, if payments due under our contracts are suspended for an extended period of time, or if a number of our contracts are renegotiated.

The actual amount and timing of revenues earned may be substantially different than the reported RPO.

LEGAL AND REGULATORY RISKS

In particular, the shipment of goods, services and technology across international borders subjects us to extensive trade laws and regulations.

Our import activities are governed by the unique customs laws and regulations in each of the countries where we operate.

Pursuant to their laws and regulations, governments may impose economic sanctions against certain countries, persons and entities that may restrict or prohibit transactions involving such countries, persons and entities, which may limit or prevent our conduct of business in certain jurisdictions.

instruments.

Investor and public perception related to the company’s environment, social, and governance (ESG) performance as well as current and future ESG reporting requirements may affect our business and our operating results.

Increasing focus on ESG factors has led to enhanced interest in, and review of performance results by investors and other stakeholders, and the potential for reputational risk.

globally.

Compliance with climate action regulations applicable to our or our customers' operations may have significant implications that could adversely affect our business and operating results in the fossil-fuel sectors, and boosting demand for technologies contributing to the climate action agenda.

Changes in laws or regulations relating to data privacy and security, or any actual or perceived failure by us to comply with such laws or regulations, or contractual or other obligations relating to data privacy or security, may adversely affect our business and operating results.

The legal and regulatory environment related to data privacy and security is increasingly rigorous, with new and constantly changing requirements applicable to our business, and enforcement practices are likely to remain uncertain for the foreseeable future.

These laws and regulations may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible that they will be interpreted and applied in ways that may adversely affect our business and operating results.

In the U.S., various federal and state regulators, including governmental agencies like the Federal Trade Commission, have adopted, or are considering adopting, laws, regulations and standards concerning personal information and data security.

Risk Factors Related to Our Business

Our ability to manage the recruiting, training, retention and efficient usage of the highly skilled workforce required by our plans and to manage the associated costs could impact our business.

Epidemic outbreaks may also impact our business operations by, among other things, restricting travel to protect the health and welfare of our employees and decisions by our customers to curtail or stop operations in impacted areas.

*Increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted computer crime could pose risks to our systems, networks, products, solutions, services and data.*

In addition, a cyber-related attack could adversely impact our operating results and result in other negative consequences, including damage to our reputation or competitiveness, remediation or increased protection costs, litigation or regulatory action, fines and penalties.

In addition, we may periodically restructure our legal entity organization.

If taxing authorities were to disagree with our tax positions in connection with any such restructurings, our effective tax rate could be materially impacted.

*Our Remaining Performance Obligations (RPO) are subject to modification, termination or reduction of orders, which could negatively impact our sales.*

Our RPO can be significantly affected by the timing of orders for large projects.

Although modifications and terminations of orders may be partially offset by cancellation fees, customers can, and sometimes do, terminate or modify orders.

Our failure to replace canceled orders could negatively impact our sales and results of operations.

We cannot provide assurance that our products will be able to satisfy the specifications or that we will be able to perform the

There remains significant uncertainty on the outcome of the negotiations and the terms of a future trade deal, if any.

In addition, Brexit could result in delayed deliveries, which may impact our internal supply chain and our customer projects.

Risk Factors Related to the Worldwide Oil and Natural Gas Industry

The renewable energy industry is developing enhanced technologies and becoming more competitive with fossil-fuel energy.

*Although we no longer are a “controlled company” after the completion of a secondary offering in September 2019, GE and its affiliates continue to own approximately 36.7% of the voting power of all classes of our outstanding voting stock, and the interests of GE may differ from the interests of other stockholders of the Company.*

GE will continue to be entitled to designate one person for nomination to our board of directors until such time as GE and its affiliates own less than 20% of the voting power of all classes of our outstanding voting stock.

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the consolidated [removed: and combined] financial statements included in Item 8.

For management's discussion and analysis of our financial condition and results of operations for fiscal year [removed: 2018] [added: 2019] as compared to fiscal year [removed: 2017] [added: 2018] please refer to Part II, Item 7 "Management's discussion and analysis of financial condition and results of operations" on Form 10-K for our fiscal year ended December 31, [removed: 2018,] [added: 2019,] filed with the SEC on February [removed: 19, 2019.][added: 13, 2020.]

We are an energy technology company with a [added: broad and] diversified portfolio of technologies and services that span the energy and industrial value chain.

The [removed: increase in revenue] [added: decrease] was [removed: driven] primarily [added: driven] by [removed: increased activity in OFS] [added: OFS, which decreased $430 million, OFE, which decreased $36 million] and [removed: OFE] [added: DS, which decreased $150 million,] partially offset by [removed: declines in TPS and DS.][added: TPS, which increased $86 million.]

[removed: Income] [added: In 2019, income] before income taxes [removed: and equity in loss of affiliate] was [removed: $753 million in 2019, and] [added: $0.8 billion, which also] included restructuring and impairment charges of $342 [removed: million] [added: million,] and separation and merger related costs of $184 million.

Related Party Transactions" of the Notes to Consolidated [removed: and Combined] Financial Statements in Item 8 [removed: herein.][added: herein for further discussion of related party transactions.]

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 27][added: 28]

Our business is exposed to a number of [removed: different] macro factors, which influence our [removed: expectations] [added: outlook] and [removed: outlook.][added: expectations given the current volatile conditions in the industry.]

[removed: | • |] [added: -] North America onshore activity: in [removed: 2019,] [added: 2020,] we experienced a [added: significant] decline in rig count, as compared to [removed: 2018] [added: 2019] driven by lower commodity [removed: prices over the year. We expect North American onshore activity will continue to decline in 2020. Over the long-term, we remain optimistic about the outlook. |][added: prices.]

We have other segments in our portfolio that are more correlated with [removed: different] [added: various] industrial [removed: metrics] [added: metrics, including GDP,] such as our Digital Solutions [removed: business.][added: segment.]

Overall, we believe our portfolio is [removed: uniquely] [added: well] positioned to compete across the [added: energy] value [removed: chain,] [added: chain] and deliver comprehensive solutions for our customers.

We remain optimistic about the long-term economics of the industry, but [added: we] are continuing to operate with flexibility given our expectations for volatility and changing [removed: assumptions] [added: activity levels] in the near term.

[removed: However,] [added: While governments may change or discontinue incentives for renewable energy additions,] we do not anticipate any significant impacts to our business in the foreseeable future.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 28][added: 29]

The following discussion and analysis summarizes the significant factors affecting our results of operations, financial condition and liquidity position as of and for the year ended December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and should be read in conjunction with the consolidated [removed: and combined] financial statements and related notes of the Company.

[removed: | | 2019 | | | | 2018 | | |][added: In 2019,]

| Brent oil prices ($/Bbl) (1) | [added: | |] $ | [removed: 64.28] [added: 41.96] | | | [added: | |] $ | [removed: 71.34] [added: 64.28] | | [added: | | | | | |]

| WTI oil prices ($/Bbl) (2) | [added: | | 39.16 | | | | | |] 56.98 | | | | [removed: 65.23] | | | [added: | |]

| Natural gas prices ($/mmBtu) (3) | [added: | | 2.03 | | | | | |] 2.56 | | | | [removed: 3.15] | | | [added: | |]

[removed: | (1) | Energy] [added: (1)Energy] Information Administration (EIA) Europe Brent Spot Price per Barrel [removed: |]

[removed: | (2) | EIA] [added: (2)EIA] Cushing, OK WTI (West Texas Intermediate) spot price [removed: |]

[removed: | (3) | EIA] [added: (3)EIA] Henry Hub Natural Gas Spot Price per million British Thermal Unit [removed: |]

Brent oil prices [removed: increased] [added: decreased] from a [removed: low] [added: high] of [removed: $53.23/Bbl] [added: $70.25/Bbl] in January [removed: 2019,] [added: 2020,] to a [removed: high] [added: low] of [removed: $74.94/Bbl] [added: $9.12/Bbl] in April [removed: 2019.][added: 2020.]

[removed: However, the] [added: The] average Brent oil prices decreased to [removed: $64.28/Bbl] [added: $41.96/Bbl] in [removed: 2019] [added: 2020] from [removed: $71.34/Bbl] [added: $64.28/Bbl] in [removed: 2018, primarily] [added: 2019,] due to [removed: higher] [added: lower] prices [removed: in the first three quarters] [added: during majority] of [removed: 2018.][added: the year 2020.]

In North America, customer spending is highly driven by WTI oil prices, which [removed: similar] [added: similarly] to Brent oil prices, on average decreased to [removed: $56.98/Bbl] [added: $39.16/Bbl] in [removed: 2019] [added: 2020] from [removed: $65.23/Bbl] [added: $56.98/Bbl] in [removed: 2018,] [added: 2019,] and ranged from a [removed: low] [added: high] of [removed: $46.31/Bbl] [added: $63.27/Bbl] in January [removed: 2019,] [added: 2020,] to a [removed: high] [added: low] of [removed: $66.24/Bbl] [added: $(36.98)/Bbl] in April [removed: 2019.][added: 2020.]

In North America, natural gas prices, as measured by the Henry Hub Natural Gas Spot Price, averaged [removed: $2.56/mmBtu] [added: $2.03/mmBtu] in [removed: 2019,] [added: 2020,] representing a [removed: 19%] [added: 21%] decrease over the prior year.

Throughout the year, Henry Hub Natural Gas Spot Prices ranged from a [removed: high] [added: low] of [removed: $4.25/mmBtu] [added: $1.33/mmBtu] in [removed: March 2019] [added: September 2020,] to a [removed: low] [added: high] of [removed: $1.75/mmBtu] [added: $3.14/mmBtu] in [removed: December 2019.][added: October 2020.]

According to the U.S. Department of Energy (DOE), working natural gas in storage at the end of [removed: 2019] [added: 2020] was [removed: 3,192] [added: 3,460] billion cubic feet (Bcf), which was [removed: 15.3%,] [added: 7.7%,] or [removed: 487] [added: 268] Bcf, above the corresponding week in [removed: 2018.][added: 2019.]

We gather all relevant data through our field service personnel, who obtain the necessary data from routine visits to the various rigs, customers, contractors and [added: other outside sources as necessary.]

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 29][added: 30]

| North America | [added: | | 522 | | | | | |] 1,077 | | | [removed: 1,223] | | [added: | | | |]

| International | [added: | | 827 | | | | | |] 1,097 | | | [removed: 988] | | [added: | | | |]

| Worldwide | [added: | | 1,349 | | | | | |] 2,174 | | | [removed: 2,211] | | [added: | | | |]

[removed: 2019 Compared to 2018][added: 2020 Compared to 2019]

Overall the rig count was [removed: 2,174] [added: 1,349] in [removed: 2019,] [added: 2020,] a decrease of [removed: 2%] [added: 38%] as compared to [removed: 2018] [added: 2019] due primarily to North American activity.

The rig count in North America decreased [removed: 12%] [added: 52% and the international rig count decreased 25%] in [removed: 2019] [added: 2020] compared to [removed: 2018,] [added: 2019, both] as a result of lower commodity prices and exploration and production capital expenditure reductions.

Within North America, the decrease was primarily driven by the [removed: Canadian] [added: U.S.] rig count, which was down [removed: 30%] [added: 54%] on average when compared to the same period last year, and a decrease in the [removed: U.S.] [added: Canadian] rig count, which was down [removed: 9%] [added: 33%] on average.

The discussions below relating to significant line items from our consolidated [removed: and combined] statements of income (loss) are based on available information and represent our analysis of significant changes or events that impact the comparability of reported amounts.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 30][added: 31]

The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and equity in loss of affiliate and before the following: net interest expense, net other [removed: non operating income,] [added: non-operating income (loss),] corporate expenses, restructuring, impairment and other charges, [removed: inventory impairment, separation] [added: goodwill] and [removed: merger related] [added: inventory impairments, separation-related] costs, and certain gains and losses not allocated to the operating segments.

Throughout 2020, the industry experienced multiple factors which drove expectations for global oil and gas related spending to be lower than 2019.

First, the COVID-19 pandemic lowered global demand for hydrocarbons, as social distancing and travel restrictions were implemented across the world.

Second, the lifting of Organization of the Petroleum Exporting Countries (OPEC+) supply curtailments in the first quarter of 2020, and the associated increase in production, drove the global excess supply of hydrocarbons higher.

In the second quarter of 2020, OPEC+ reached a supply curtailment agreement of up to 10 million barrels per day, which drove expectations for future hydrocarbon supply lower.

After significant turmoil during the first half of the year from the industry downturn, oil markets stabilized and demand for oil improved in the second half of the year.

Lastly, global gross domestic product (GDP) declined in 2020, as a result of the impact from the COVID-19 pandemic.

Since the COVID-19 pandemic began, the health and safety of our employees has continued to be a top priority.

We have taken critical steps as a company to reduce the risk of exposure, as well as mitigate the impacts of this pandemic to our employees, contractors and partners.

We have adopted remote working where possible.

Where on-site operations are required, masks are mandatory and our employees have adopted social distancing.

We have worked with our employees to implement other site-specific precautionary measures to reduce the risk of exposure.

We are collaborating closely with our customers, suppliers, and vendors to minimize operational disruption.

In addition, we have restricted non-essential business travel and have encouraged our employees, customers and partners to collaborate virtually.

Our goal throughout the downturn in 2020 was to remain disciplined in allocating capital, focus on liquidity and cash preservation, and to preserve our investment grade rating while also maintaining our current dividend payout.

During the year, we took necessary actions to right-size the business for expected activity levels.

In the first quarter of 2020, we approved a plan for restructuring and other actions totaling $1.8 billion, which was increased by $0.3 billion as we took further actions during the year to address the continuing industry challenges.

Total restructuring and other costs were $2.1 billion in 2020.

These charges are primarily related to the costs for reductions in work force, product line exits in certain geographies, and the write down of inventory and intangible assets.

These actions took place across the business and our corporate functions.

We expect the cash payback of these actions to be less than one year.

In addition, during the first quarter of 2020, our market capitalization declined significantly driven by the macroeconomic and geopolitical conditions caused by the COVID-19 pandemic and collapse of oil prices.

Based on these events, we concluded that a triggering event occurred, and we performed an interim quantitative impairment test as of March 31, 2020.

Based upon the results of the impairment test, we recognized a goodwill impairment charge of $14.8 billion during the first quarter of 2020.

There were no other goodwill impairments in 2020.

In 2020, we generated revenue of $20.7 billion, compared to $23.8 billion in 2019.

The decrease in revenue was driven by declines in all four of our segments primarily due to the industry downturn.

Loss before income taxes was $15.2 billion in 2020, and included goodwill impairment charges of $14.8 billion, restructuring and impairment charges of $1.9 billion, inventory impairment charges of $246 million, separation and merger related costs of $134 million, and a gain of $1.4 billion related to our investment in C3.ai recorded in other non-operating income.

The gain of $1.4 billion related to our C3.ai investment was recorded in the fourth quarter of 2020.

We invested in C3.ai when we formed our partnership in June 2019.

In December 2020, C3.ai completed its initial public offering, which requires us to mark our investment to fair value.

Both our investment and strong partnership with C3.ai demonstrate our commitment for growth in high potential segments as we develop and market new AI solutions for the oil and gas industry.

After significant volatility during the first half of 2020, oil markets stabilized during the second half of the year.

However, there is still uncertainty in the global economic outlook and impact on oil and gas markets in the wake of the COVID-19 pandemic.

We expect North American onshore activity to improve in 2021, as compared to the second half of 2020.

- International onshore activity: in 2020, we experienced a decline in rig count, as compared to 2019 driven by lower commodity prices.

We expect onshore spending outside of North America to stabilize in early 2021, and see a modest recovery over the second half of the year.

- Offshore projects: in 2020, we experienced significantly fewer offshore projects reaching positive final investment decisions, due to the economic uncertainty and lower oil and gas prices.

In 2021, we expect the offshore markets to stabilize and for the number of tree awards in the market to remain stable or grow modestly compared to 2020 levels.

- Liquefied natural gas (LNG) projects: we remain optimistic on the LNG market long term and view natural gas as a transition and destination fuel.

We continue to view the long-term economics of the LNG industry as positive.

We conduct business in more than 120 countries and employ approximately 68,000 employees.

Throughout 2019, the industry experienced continued volatility, with North America activity declining versus 2018, and growth internationally.

Offshore markets remained relatively stable, with approximately 300 subsea trees being awarded.

2019 was a strong year for liquefied natural gas (LNG) related markets, with 71 million tons per annum of final investment decisions being reached on projects.

Lastly, global GDP growth remained healthy throughout 2019, with some headwinds across the power sector.

In 2019, we generated revenue of $23,838 million, compared to $22,877 million in 2018.

Separation and merger related costs include costs incurred in connection with the separation from GE and the finalization of the Master Agreement Framework.

In 2018, loss before income taxes and equity in loss of affiliate was $680 million, which also included restructuring and impairment charges of $433 million, and separation and merger related costs of $153 million.

In June 2018, GE announced their intention to pursue an orderly separation from us over time.

In the fourth quarter of 2018, we entered into a Master Agreement Framework which includes a series of related ancillary agreements and binding term sheets (which were later negotiated into definitive agreements) designed to further solidify the commercial and technological collaboration between us and GE.

The Master Agreement Framework focuses on areas where we work most closely with GE on developing leading technology and executing for customers.

First, we defined the parameters for long-term collaboration and partnership with GE on critical rotating equipment technology.

Second, for our digital software and technology business we agreed to maintain the status quo as the exclusive supplier of GE Digital oil and-gas applications, although this commercial arrangement was modified pursuant to the Omnibus Agreement, discussed below, including by rendering the relationship with GE Digital to be nonexclusive with respect to digital offerings in the oil and gas space.

Finally, we reached agreements on a number of other areas including our controls business, pension, taxes, and intercompany services.

All agreements within the Master Agreement Framework were finalized by the first quarter of 2019.

On July 31, 2019, we also entered into an Omnibus Agreement, a general framework agreement that addresses certain outstanding matters under existing long-term commercial agreements between us and GE.

The Omnibus Agreement contains provisions regarding, among other things, (i) the repayment of certain outstanding amounts mutually owed by the parties, (ii) certain employee and assets transfers (including the allocation of costs and expenses associated therewith), and (iii) certain matters related to three international joint ventures.

Modifications to the commercial arrangements between us and GE included, among other things, modification of the relationship between BHGE LLC and GE Digital to be nonexclusive with respect to digital offerings in the oil and gas space.

For further details on these agreements see "Note 19.

On September 16, 2019, certain equity transactions were

completed and GE’s ownership of Baker Hughes was reduced from approximately 50.3% to approximately 36.8%.

As of December 31, 2019, GE's interest in us was 36.7%.

In aggregate, we anticipate that the net financial impact of the agreements contemplated by the Master Agreement Framework will have a slightly negative impact on our operating margin rates of approximately 20 to 40 basis points.

In addition, we expect to incur one-time charges related to the separation from GE of approximately $0.2 billion to $0.3 billion over three years.

We expect these charges to be primarily related to the build-out of information technology infrastructure as well as customary transaction fees.

For a discussion of certain risks associated with separation, including risks related to our business, financial condition and results of operations, see “Item 1A.

Risk Factors-Risk Factors Related to the Separation from GE.”

All of our outlook expectations are purely based on the market as we see it today, and are subject to change given volatile conditions in the industry.

| | |

| --- | --- |

| • | International onshore activity: we have seen a moderate increase in rig count activity in 2019 and expect growth to continue into 2020, albeit at a slower rate. We expect most of the growth to come from Middle East, Latin America and Europe. |

| • | Offshore projects: we have seen stable customer activity and final investment decisions on offshore projects through 2019. We expect the offshore market fundamentals to support another solid year of orders with subsea tree awards in 2020 expected to remain relatively consistent with 2019. We expect to see continued growth in the flexible pipe market, following a strong orders performance in 2019. |

| • | Liquefied natural gas projects: we remain optimistic on the LNG market. While currently oversupplied, we believe a significant number of final investment decisions are needed to fill the projected supply-demand imbalance. In 2019, we have seen multiple large-scale LNG projects reach a positive final investment decision. We continue to view the long-term economics of the LNG industry as positive. |

| • | Refinery, petrochemical and industrial projects: in refining, we believe large, complex refineries should gain advantage in a more competitive, oversupplied landscape in 2019 as the industry globalizes and refiners position to meet local demand and secure export potential. The industrial market continues to grow as outdated infrastructure is replaced, policy changes come into effect and power is decentralized. We continue to see growing demand across these markets in 2020. |

While governments may change or may not continue incentives for renewable energy additions, in the long term, renewables' cost decline may accelerate to compete with new-built fossil capacity.

Despite the near-term volatility, the long-term outlook for our industry remains positive.

We believe the world’s demand for energy will continue to rise, and the supply of energy will continue to increase in complexity, requiring greater service intensity and more advanced technology from oilfield service companies.

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After a volatile fourth quarter of 2018 when oil prices dropped nearly 40%, there was more stability and positive sentiment at the start of 2019.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 43][added: 44]

There were no outstanding interest rate swap agreements as of December 31, [removed: 2019.][added: 2020.]

| *(In millions)* | [removed: 2020] | | [added: 2021] | | [removed: 2021] | | | | 2022 | | | | [added: | |] 2023 | | | | [added: | |] 2024 | | | | [added: | | 2025 | | | | | |] Thereafter | | | | [added: | |] Total (2) | | |

| Long-term debt (1) | [removed: $] | [removed: —] | [removed: | |] $ | — | | | [added: | |] $ | 1,250 | | | [added: | |] $ | — | | | [added: | |] $ | 107 | | | [added: | |] $ | [removed: 4,606] [added: —] | | | [added: | |] $ | [removed: 5,963] [added: 5,106] | | [added: | | | $ | 6,463 | |]

| Weighted average interest rates | [removed: —] | | [removed: % | |] — | | % | | [added: | |] 2.88 | | % | | [added: | |] — | | % | | [added: | |] 4.06 | | % | | [removed: 3.82] | | [added: — | |] % | | [removed: 3.64] | | [added: 3.89 | |] % | [added: | | | 3.71 | | % |]

[removed: | (1) | Fair] [added: (1)Fair] market value of our fixed rate long-term debt, excluding finance leases, was [removed: $6.4] [added: $7.5] billion at December 31, [removed: 2019. |][added: 2020.]

[removed: | (2) | Amounts] [added: (2)Amounts] represent the principal value of our long-term debt outstanding and related weighted average interest rates at the end of the respective period. [removed: |]

We had outstanding foreign currency forward contracts with [removed: net] notional amounts aggregating [removed: $1.8] [added: $6.8] billion and [removed: $2.8] [added: $5.3] billion to hedge exposure to currency fluctuations in various foreign currencies at December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

As of December 31, [removed: 2019,] [added: 2020,] the Company estimates that a 1% appreciation or depreciation in the U.S. dollar would result in an impact of less than $5 million to our pre-tax earnings, however, the Company is generally able to mitigate its foreign exchange exposure, where there are liquid financial markets, through use of foreign currency derivative transactions.

Also, see "Note [removed: 17.][added: 16.]

Financial Instruments" of the Notes to Consolidated [removed: and Combined] Financial Statements in Item 8 herein, which has additional details on our strategy.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 44][added: 45]

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The notional amount of these derivative instruments do not generally represent cash amounts exchanged by us and the counterparties, but rather the nominal amount upon which changes in the value of the derivatives are measured.

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We conduct business in more than 120 [removed: countries and employ approximately 68,000 employees.][added: countries.]

The Company was formed [added: in July 2017] as the result of a combination between Baker Hughes Incorporated (BHI) and the oil and gas business (GE O&G) of General Electric Company (GE) (the [removed: Transactions), which resulted in GE owning approximately 62.5% of the Company.][added: Transactions).]

As a result of the Transactions, substantially all of the business of GE O&G and of [removed: Baker Hughes,] [added: BHI] was transferred to a subsidiary of the Company, Baker [removed: Hughes, a GE company,] [added: Hughes Holdings] LLC [removed: (BHGE] [added: (BHH] LLC).

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | 1

The oil and gas macroeconomic environment continues to be [removed: dynamic, and the demand for more energy and the transition to new energy sources is accelerating.][added: dynamic.]

Our strategy is based on three [removed: growth areas:][added: key pillars:]

In January 2019, we made a commitment to reduce CO2 equivalent (eq.) emissions from our operations by [removed: 50 percent] [added: 50%] by 2030, achieving net-zero CO2 eq.

We reported in our [removed: 2018] [added: 2019] Corporate Social Responsibility report a [removed: 34%] [added: 31%] reduction in operating emissions since 2012 through a commitment to new technology and operational efficiencies.

[removed: | • | Scope and scale:] We [removed: have global presence and a broad, diversified portfolio. Our products, services, and expertise serve the upstream, midstream/liquefied natural gas (LNG) and downstream sectors of the oil and gas industry, as well as broader chemical and industrial segments, matching energy leaders in many areas. We] deliver through our four product companies (also referred to as operating segments): Oilfield Services; Oilfield Equipment; Turbomachinery & Process Solutions; and Digital Solutions as discussed below under "Products and Services," and each are among the top four providers in their respective segments. [removed: |]

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | 2

[removed: | • | Energy] [added: - Energy] transition solutions: We are positioned to support our customers' efforts to reduce their carbon footprint with a range of emissions-reduction [removed: products. This includes more efficient power generation and compression technology that reduces carbon emissions. We also have a range of inspection and sensor technology that can monitor and help reduce flaring] [added: products] and [removed: emissions. |][added: services.]

We recognized orders of [removed: $27.0] [added: $20.7] billion, [removed: $23.9] [added: $27.0] billion and [removed: $17.2] [added: $23.9] billion in [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017,] [added: 2018,] respectively.

As of December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017,] [added: 2018,] the remaining performance obligations totaled [removed: $22.9] [added: $23.4] billion, [removed: $21.0] [added: $22.9] billion and $21.0 billion, respectively.

Our [removed: reportable segments, which are the same as our] [added: four product companies, or] operating segments, are organized based on the nature of our markets and [removed: customers.][added: customers and consist of similar products and services.]

The Oilfield Services (OFS) segment [removed: provides] [added: designs and manufactures] products and [added: provides] services for onshore and offshore [added: oil & gas] operations across the lifecycle of a well, [removed: ranging from] [added: including exploration,] drilling, evaluation, completion, production, [added: intervention,] and [removed: intervention.][added: abandonment.]

[removed: Products] [added: OFS products] and services include [removed: diamond and tri-cone] drill [removed: bits,] [added: bits;] drilling services, including directional [removed: drilling technology, measurement while drilling and logging while] drilling, [removed: wireline services, drilling and completions fluids, completions tools] [added: measurement-while-drilling,] and [added: logging-while-drilling; drilling fluids; wireline services; completions, including tools,] systems, [removed: wellbore intervention tools] and [removed: services,] [added: fluids; pressure pumping; well intervention;] artificial lift [removed: systems, and] [added: systems;] oilfield and industrial [removed: chemicals.][added: chemicals; and integrated well services.]

[removed: OFS’ core] [added: OFS] evaluation [added: capabilities] and drilling technologies provide greater understanding of the subsurface to enable smoother, faster drilling and precise wellbore placement, leading to improved recovery and project economics.

[removed: Drawing] [added: With broad completions portfolio, drawing] from a wide range of [removed: chemical and] artificial lift technologies, [removed: coupled with] production [added: chemicals, and production] optimization software, OFS can help [removed: lower the cost per barrel for the life of an asset.][added: maximize production while simultaneously lowering production costs.]

OFS also provides integrated well services to plan and execute projects ranging from well [removed: construction, intervention,] [added: construction] and production [removed: services] through well abandonment.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | 3

[removed: Our] [added: OFS] customers include the large integrated major and super-major oil and natural gas companies, U.S. and international independent oil and natural gas companies, and the national or state-owned oil companies as well as oilfield service companies.

The Oilfield Equipment (OFE) segment provides a broad portfolio of mission critical products and services [removed: that serve as the last line of defense] [added: utilized] during drilling and over the life of a field.

[removed: The] OFE [removed: segment includes] [added: products and services include] subsea and surface drilling equipment, subsea production systems (SPS), flexible pipe systems for subsea flowlines, risers and onshore pipes, surface and subsea wellheads, surface pressure control [removed: equipment,] [added: solutions,] subsea well intervention solutions and related service solutions.

The OFE drilling product line offers blowout preventers, control systems, marine drilling risers, wellhead connectors, diverters, and related services for floaters, [removed: jack-ups] [added: jack-ups,] and land drilling rigs.

OFE’s [removed: SPS] [added: subsea] portfolio includes subsea trees, control systems, manifolds, connection systems, wellheads, specialty connectors & [removed: pipes,] [added: pipes for all environments,] installation and decommissioning solutions, and related services for Life of Field solutions and well intervention.

OFE also provides advanced [added: offshore] flexible pipe products including risers, flowlines, fluid transfer lines and subsea jumpers, for floating production facilities across a range of operating environments.

Additionally, through Subsea Connect, OFE offers integrated solutions to [removed: drive outcomes for] [added: our] customers.

[removed: The] TPS [removed: segment includes] [added: products and services include] drivers, driven equipment, flow control, and turnkey solutions.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | 4

[added: The] Digital Solutions [added: segment] combines sophisticated hardware technologies with enterprise-class software products and analytics to connect industrial assets, providing customers with the data, safety and security needed to reliably and efficiently improve operations.

[removed: The] DS [removed: segment includes] [added: products and services include] condition monitoring, industrial controls, non-destructive technologies, measurement, sensing, and pipeline solutions.

[removed: In addition, the] [added: The] PPS product line [added: also] provides inline inspection solutions to support pipeline integrity and includes nitrogen, bolting, torqueing and leak detection services, as well as the world’s largest fleet of air compressors to dry pipelines after hydrotesting.

The DS [removed: Measurement] [added: Panametrics, Druck,] and [removed: Sensing] [added: Reuter-Stokes] product [removed: line provides] [added: lines provide] instrumentation [added: and sensor-based technologies] to better detect and analyze pressure, flow, gas, [added: moisture, radiation,] and [removed: moisture] [added: related] conditions.

The DS [removed: Control Solutions] [added: Nexus Controls] product line provides comprehensive, scalable industrial controls systems, safety systems (SIL), hardware, software cybersecurity solutions and services.

[removed: The] DS [removed: segment] helps companies monitor and optimize industrial assets while mitigating risk and boosting safety, by providing performance management, and condition and asset health monitoring.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | 5

Our products and services are sold in highly competitive markets and the competitive environment varies by product [removed: line, as discussed below:][added: line.]

[removed: Our OFS segment] [added: OFE] believes that the principal competitive factors in the industries and markets it serves are product and service quality, reliability and [removed: availability,] [added: on time delivery,] health, safety and environmental standards, technical proficiency, [added: availability of spare parts,] and price.

[removed: Our] [added: OFS] products and services are sold in highly competitive [removed: markets] [added: markets,] and revenue and earnings are affected by changes in commodity [removed: prices,] [added: prices;] fluctuations in [removed: the level] [added: levels] of drilling, workover and completion activity in major [removed: markets,] [added: markets;] general economic [removed: conditions,] [added: conditions;] foreign currency exchange [removed: fluctuations] [added: fluctuations;] and governmental regulations.

While [removed: we] [added: OFS] may have contracts [removed: with customers] that include multiple well projects and that may extend over a period of time ranging from two to four years, [removed: our] [added: its] services and products are generally provided on a well-by-well basis.

In 2019, we accelerated our separation efforts from GE and in September 2019, GE sold down its stake in Baker Hughes to below 50%.

In July 2020, GE launched a program to fully divest of its ownership in Baker Hughes over approximately three years.

As of December 31, 2020, GE's economic interest in BHH LLC was 30.1%.

We believe the world’s reliance on hydrocarbons will not disappear, and oil and gas will continue to play necessary roles in meeting global energy demand.

At the same time, the transition to new energy sources is accelerating.

- Transform the core: We are transforming our current business to improve margins and cash flow, which we are achieving through portfolio rationalization, cost improvements, and new business models.

- Invest for growth: We are driving organic and inorganic growth in high potential segments where we have a strong position, including industrial power and processes, industrial asset management, non-metallics, and chemicals.

- Positioning for new energy frontiers: We are making strategic investments to drive the decarbonization of energy and industry, including hydrogen, geothermal, carbon capture, utilization and storage, and energy storage.

We view environmental, social, and governance (ESG) as a key lever to transform the performance of our company and our industry.

- Scope and scale: We have global presence and a broad, diversified portfolio.

Our products, services, and expertise serve the upstream, midstream/liquefied natural gas (LNG) and downstream sectors of the oil and

gas industry, as well as broader chemical and industrial segments.

- Technology: Our culture is built on a heritage of innovation and invention in research and development, with complementary capabilities.

Technology remains a differentiator for us, and a key enabler to drive the efficiency and productivity gains our customers need.

We also have a range of technologies that support our customers' efforts to reduce their carbon footprint.

We remain committed to investing in our products and services to maintain our leadership position across our offerings, including $595 million research & development spend in 2020.

- Digital capabilities: We expect to benefit from the emerging demand for artificial intelligence (AI) based solutions as part of our customers’ digital transformation initiatives.

Launched in 2019, our partnership with C3.ai is enabling us to deliver AI that is faster, easier, and more scalable to drive outcomes for our customers.

We are delivering existing technology to oil and gas customers and collaborating on new AI applications specific for oil and gas outcomes.

We are also deploying these applications internally to improve operational efficiencies, specifically for inventory optimization.

We are also leveraging advanced manufacturing techniques to transform our supply chain and design new parts and components that ultimately will lower costs and operational carbon emissions.

This includes more efficient power generation and compression technology that reduces carbon emissions.

In 2020, we acquired Compact Carbon Capture, a technology development company specializing in carbon capture solutions, to advance industrial decarbonization.

We also have a range of inspection and sensor technology that can monitor and help reduce flaring and emissions.

See discussion below by segment.

These offerings are enabled and enhanced by reservoir technical services and digital technologies that include modeling, remote capabilities, and automation.

In addition, OFE offers a full range of onshore wellhead products, valves, actuators, related services, and also designs, manufactures and markets spoolable pipe systems including reinforced thermoplastic pipe (RTP) for exploration and production in the onshore upstream and midstream segments.

TPS products are also configurable for hydrogen and blended fuels.

for which responsibility is assessed proportionate to fault.

We have an established process to review any risk deviations from our standard contracting practices.

Through our Enterprise Technology Centers we also invest heavily in fundamental technologies such as materials, additive manufacturing, artificial intelligence/machine learning and other digital technologies such as computer vision, data science and edge computing.

This includes our new Orbit 60 Bently Nevada product for critical asset monitoring used extensively in turbine systems – wind, hydro, gas-turbines, etc.

Agreement.

Other adverse weather conditions could include extreme heat in the Middle East during the summer months which may impact our operations or our customers' operations.

- The severity and duration of both the summer and the winter in North America can have a significant impact on activity levels.

HUMAN CAPITAL

As an energy technology company with operations around the world, we believe that a diverse workforce is critical to our success, and we aim to attract the best and most diverse talent to support the energy transition.

We strive to be an inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by competitive compensation, benefits and health and wellness programs, and by programs that build connections between our employees and their communities.

As of December 31, 2020, we had approximately 55,000 employees.

More than 42,000 of our employees work outside the U.S. in 88 different countries.

As of September 16, 2019, GE ceased to hold more than 50% of the voting power of all classes of our outstanding voting stock.

Subsequently, on October 17, 2019, the Company changed its name from Baker Hughes, a GE company to Baker Hughes Company.

On October 18, 2019, the Company began trading as BKR on the New York Stock Exchange.

SEPARATION FROM GE

In June 2018, GE announced their intention to pursue an orderly separation from Baker Hughes over time.

To that end, in November 2018, we completed a secondary public offering in which GE and its affiliates sold 101.2 million shares of our Class A common stock.

We did not receive any proceeds from the shares sold by GE and its affiliates.

The offering included the exchange by GE and its affiliates of common units of BHGE LLC (LLC Units), together with the corresponding shares of our Class B common stock, for our Class A common stock.

Also, in November 2018, we repurchased 65 million of our Class B common stock, together with an equal number of associated LLC Units, from GE and its affiliates for $1.5 billion.

In connection with this repurchase, the corresponding shares of Class B common stock and LLC Units were canceled.

As a result of this secondary offering and repurchase, GE's interest in Baker Hughes was reduced from approximately 62.5% to approximately 50.4%.

In November 2018, we entered into a Master Agreement and a series of related ancillary agreements and binding term sheets with GE and BHGE LLC (collectively, the Master Agreement Framework, which were later negotiated into definitive agreements) designed to further solidify the commercial and technological collaboration between us and GE.

The Master Agreement Framework focuses on areas where we work most closely with GE on developing leading technology and executing for customers.

First, we defined the parameters for long-term collaboration and partnership with GE on critical rotating equipment technology.

Second, for our digital software and technology business we agreed to maintain the status quo as the exclusive supplier of GE Digital oil and-gas applications, although this commercial arrangement was modified pursuant to the Omnibus Agreement, discussed below, including by rendering the relationship with GE Digital to be nonexclusive with respect to digital offerings in the oil and gas space.

Finally, we reached agreements on a number of other areas including our controls business, pension, taxes, and intercompany services.

All agreements within the Master Agreement Framework were finalized by the first quarter of 2019.

In July 2019, we also entered into an Omnibus Agreement, a general framework agreement that addresses certain outstanding matters under existing long-term commercial agreements between us and GE.

The Omnibus Agreement contains provisions regarding, among other things, (i) the repayment of certain outstanding amounts mutually owed by the parties, (ii) certain employee and assets transfers (including the allocation of costs and expenses associated therewith), and (iii) certain matters related to three international joint ventures.

Modifications to the commercial arrangements between us and GE included, among other things, modification of the relationship between BHGE LLC and GE Digital to be nonexclusive with respect to digital offerings in the oil and gas space.

In September 2019, we completed another secondary public offering in which GE and its affiliates sold 132.3 million shares of our Class A common stock.

We did not receive any proceeds from the shares sold by GE and its affiliates in this offering.

The offering included the exchange by GE and its affiliates of LLC Units, together with the corresponding shares of our Class B common stock, for our Class A common stock.

Also, in September 2019, we repurchased 11.9 million shares of our Class B common stock, together with an equal number of associated LLC Units, from GE and its affiliates for $250 million.

As a result of this secondary offering and repurchase, GE's interest in Baker Hughes was reduced to approximately 36.8%, and therefore, GE ceased to hold more than 50% of

the voting power of all classes of our outstanding voting stock.

As of December 31, 2019, GE's interest in us was 36.7%.

For a discussion of certain risks associated with the separation, including risks related to our business, financial condition and results of operations, see “Item 1A.

Risk Factors-Risks Factors Related to the Separation from GE.” For further details on the Master Agreement Framework and Omnibus Agreement, see "Note 19.

Related Party Disclosures" of the Notes to Consolidated and Combined Financial Statements in Item 8 herein.

We are an energy technology company with a diversified portfolio of technologies and services that span the energy and industrial value chain.

In 2019, we generated revenue of $23,838 million and conducted business in more than 120 countries.

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| --- | --- |

| • | Transforming our core through leading product companies: We are focused on delivering more efficient products and services, integrated offerings, and outcome-based solutions to improve total project economics. |

| • | Lead with technology: We are expanding our digital and technology offerings to help facilitate better, safer, and more reliable operations for our customers, while improving our own operational and execution capabilities. |

| • | Lead the energy transition: We are positioning the Company as the leading energy technology company to enable the energy transition. We plan to grow across the gas value chain, and develop products and services to help the industry lower carbon emissions. |

| • | Technology: Our culture is built on a heritage of innovation and invention in research and development, with complementary capabilities. Technology remains a differentiator for us, and a key enabler to drive the efficiency and productivity gains our customers need. We also have a range of technologies that support our customers' efforts to reduce their carbon footprint. We remain committed to investing in our products and services to maintain our leadership position across our offerings, including $687 million research & development spend in 2019. |

| • | Digital capabilities: We expect to benefit from the emerging demand for artificial intelligence (AI) based solutions as part of our customers’ digital transformation initiatives. Launched in 2019, our partnership with C3.ai will enable us to deliver AI that is faster, easier, and more scalable to drive outcomes for our customers. We will deliver existing technology to oil and gas customers and collaborate on new AI applications specific for oil and gas outcomes. We will also apply these applications internally to improve operational efficiencies. We are also leveraging advanced manufacturing techniques to transform our supply chain and design new parts and components that ultimately will lower costs and operational carbon emissions. |

We report our operating results through our four operating segments that consist of similar products and services within each segment as described below.

Legal Proceedings is contained in "Note [removed: 20.][added: 19.]

[removed: Commitment] [added: Commitments] and Contingencies" of the Notes to Consolidated [removed: and Combined] Financial Statements in Item 8 herein.

[removed: Form 10-K][added: Form 10-K]

| ☑ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

FOR THE FISCAL YEAR ENDED DECEMBER 31, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

| Baker Hughes Company | [added: | |]

| Delaware | | [added: | | | |] 81-4403168 | [added: | |]

| (State or other jurisdiction of incorporation or organization) | | [added: | | | |] (I.R.S. Employer Identification No.) | [added: | |]

| 17021 Aldine Westfield Road | | | [added: | | | | | |]

| Houston, | [added: | |] Texas | [added: | |] 77073-5101 | [added: | |]

| (Address of principal executive offices) | | [added: | | | |] (Zip Code) | [added: | |]

Registrant's telephone number, including area code: [removed: (713) 439-8600][added: (713) 439-8600]

| Title of each class | [added: | |] Trading Symbol | [added: | |] Name of each exchange on which registered | [added: | |]

| Class A Common Stock, $0.0001 Par Value per Share | [added: | |] BKR | [added: | |] New York Stock Exchange | [added: | |]

| Large accelerated filer | [added: | |] ☑ | | [added: | | | |] Accelerated filer | [added: | |] ☐ | | [added: | | | |] Non-accelerated filer | [added: | |] ☐ | | [added: | | | |] Smaller reporting company | [added: | |] ☐ | | [added: | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter (based on the closing price on June 30, [removed: 2019] [added: 2020] reported by the New York Stock Exchange) was approximately [removed: $9,854,020,448.][added: $5,492,452,024.]

As of February [removed: 6, 2020,] [added: 19, 2021,] the registrant had outstanding [removed: 653,509,914] [added: 728,963,146] shares of Class A Common Stock, $0.0001 par value per share and [removed: 377,427,884] [added: 311,432,660] shares of Class B Common Stock, $0.0001 par value per share.

Portions of Registrant's Definitive Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

| | | [added: | | | |] Page No. | [added: | |]

| [Item [removed: 1.](#s1C5EFCEA816E5129B0B427D1A999422C)] [added: 1.](#i0685a1518c984b97b0706cfa7ed9c6f4_13)] | [removed: [Business](#s1C5EFCEA816E5129B0B427D1A999422C)] | [removed: [1](#s1C5EFCEA816E5129B0B427D1A999422C)] | [added: [Business](#i0685a1518c984b97b0706cfa7ed9c6f4_13) | | | [1](#i0685a1518c984b97b0706cfa7ed9c6f4_13) | | |]

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| [Item [removed: 2.](#sF7CD6D652FC85236B5F18DA4758EB649)] [added: 2.](#i0685a1518c984b97b0706cfa7ed9c6f4_22)] | [removed: [Properties](#sF7CD6D652FC85236B5F18DA4758EB649)] | [removed: [21](#sF7CD6D652FC85236B5F18DA4758EB649)] | [added: [Properties](#i0685a1518c984b97b0706cfa7ed9c6f4_22) | | | [24](#i0685a1518c984b97b0706cfa7ed9c6f4_22) | | |]

| [Item [removed: 3.](#sC8E7C3CA083F50AD8CDA407DD9433B91)] [added: 3.](#i0685a1518c984b97b0706cfa7ed9c6f4_25)] | [added: | |] [Legal [removed: Proceedings](#sC8E7C3CA083F50AD8CDA407DD9433B91)] [added: Proceedings](#i0685a1518c984b97b0706cfa7ed9c6f4_25)] | [removed: [21](#sC8E7C3CA083F50AD8CDA407DD9433B91)] | [added: | [24](#i0685a1518c984b97b0706cfa7ed9c6f4_25) | | |]

| [Item [removed: 4.](#s7723668ED04F5645B782B24E05805445)] [added: 4.](#i0685a1518c984b97b0706cfa7ed9c6f4_28)] | [added: | |] [Mine Safety [removed: Disclosures](#s7723668ED04F5645B782B24E05805445)] [added: Disclosures](#i0685a1518c984b97b0706cfa7ed9c6f4_28)] | [removed: [21](#s7723668ED04F5645B782B24E05805445)] | [added: | [24](#i0685a1518c984b97b0706cfa7ed9c6f4_28) | | |]

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| [Item [removed: 7.](#s4942237D39A95B28898F6C7C54079B71)] [added: 7.](#i0685a1518c984b97b0706cfa7ed9c6f4_40)] | [added: | |] [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s4942237D39A95B28898F6C7C54079B71)] [added: Operations](#i0685a1518c984b97b0706cfa7ed9c6f4_40)] | [removed: [27](#s4942237D39A95B28898F6C7C54079B71)] | [added: | [28](#i0685a1518c984b97b0706cfa7ed9c6f4_40) | | |]

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| | [added: | |] [Management's Report on Internal Control Over Financial [removed: Reporting](#s31D7FC32778D591E9D01D344C00BE10A)] [added: Reporting](#i0685a1518c984b97b0706cfa7ed9c6f4_67)] | [removed: [45](#s31D7FC32778D591E9D01D344C00BE10A)] | [added: | [46](#i0685a1518c984b97b0706cfa7ed9c6f4_67) | | |]

| | [added: | |] [Report of Independent Registered Public Accounting [removed: Firm](#sE6C74078078B5BBA9BEE20FA427B9C2F)] [added: Firm](#i0685a1518c984b97b0706cfa7ed9c6f4_70)] | [removed: [46](#sE6C74078078B5BBA9BEE20FA427B9C2F)] | [added: | [47](#i0685a1518c984b97b0706cfa7ed9c6f4_70) | | |]

| | [removed: [Consolidated and Combined Statements] [added: | | [Consolidated](#i0685a1518c984b97b0706cfa7ed9c6f4_73) [Statements] of Income [removed: (Loss)](#sCBB226CC00675F49938CD0C5364E8A52)] [added: (Loss)](#i0685a1518c984b97b0706cfa7ed9c6f4_73)] | [removed: [49](#sCBB226CC00675F49938CD0C5364E8A52)] | [added: | [50](#i0685a1518c984b97b0706cfa7ed9c6f4_73) | | |]

| | [removed: [Consolidated and Combined Statements] [added: | | [Consolidated](#i0685a1518c984b97b0706cfa7ed9c6f4_76) [Statements] of Comprehensive Income [removed: (Loss)](#s1B4AED25A83E5683A72215CBFA3F58E8)] [added: (Loss)](#i0685a1518c984b97b0706cfa7ed9c6f4_76)] | [removed: [50](#s1B4AED25A83E5683A72215CBFA3F58E8)] | [added: | [51](#i0685a1518c984b97b0706cfa7ed9c6f4_76) | | |]

| | [added: | |] [Consolidated Statements of Financial [removed: Position](#s93FE596922CD523D8FF2435957174282)] [added: Position](#i0685a1518c984b97b0706cfa7ed9c6f4_79)] | [removed: [51](#s93FE596922CD523D8FF2435957174282)] | [added: | [52](#i0685a1518c984b97b0706cfa7ed9c6f4_79) | | |]

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| | [removed: [Consolidated and Combined Statements] [added: | | [Consolidated](#i0685a1518c984b97b0706cfa7ed9c6f4_91) [Statements] of Cash [removed: Flows](#sCFC8FD393ABF51F6BFA0F83D578B3985)] [added: Flows](#i0685a1518c984b97b0706cfa7ed9c6f4_91)] | [removed: [53](#sCFC8FD393ABF51F6BFA0F83D578B3985)] | [added: | [54](#i0685a1518c984b97b0706cfa7ed9c6f4_91) | | |]

| | [added: | |] [Notes to [removed: Consolidated and Combined Financial Statements](#sB9E3DB8027365DDEBB0FD48AA423DC4C)] [added: Consolidated](#i0685a1518c984b97b0706cfa7ed9c6f4_94) [Financial Statements](#i0685a1518c984b97b0706cfa7ed9c6f4_94)] | [removed: [54](#sB9E3DB8027365DDEBB0FD48AA423DC4C)] | [added: | [55](#i0685a1518c984b97b0706cfa7ed9c6f4_94) | | |]

| [Item [removed: 9.](#s3A4BAE6F470E52A6ABED48619D2B346B)] [added: 9.](#i0685a1518c984b97b0706cfa7ed9c6f4_190)] | [added: | |] [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#s3A4BAE6F470E52A6ABED48619D2B346B)] [added: Disclosure](#i0685a1518c984b97b0706cfa7ed9c6f4_190)] | [removed: [103](#s3A4BAE6F470E52A6ABED48619D2B346B)] | [added: | [95](#i0685a1518c984b97b0706cfa7ed9c6f4_190) | | |]

| [Item [removed: 9A.](#s3D92653993BD57F9AA1A5B6710779986)] [added: 9A.](#i0685a1518c984b97b0706cfa7ed9c6f4_193)] | [added: | |] [Controls and [removed: Procedures](#s3D92653993BD57F9AA1A5B6710779986)] [added: Procedures](#i0685a1518c984b97b0706cfa7ed9c6f4_193)] | [removed: [103](#s3D92653993BD57F9AA1A5B6710779986)] | [added: | [95](#i0685a1518c984b97b0706cfa7ed9c6f4_193) | | |]

| [Item [removed: 9B.](#s55DFF19A60AB5CA29D602A58F672EF6C)] [added: 9B.](#i0685a1518c984b97b0706cfa7ed9c6f4_196)] | [added: | |] [Other [removed: Information](#s55DFF19A60AB5CA29D602A58F672EF6C)] [added: Information](#i0685a1518c984b97b0706cfa7ed9c6f4_196)] | [removed: [103](#s55DFF19A60AB5CA29D602A58F672EF6C)] | [added: | [95](#i0685a1518c984b97b0706cfa7ed9c6f4_196) | | |]

| | [removed: [Part III](#sF8AA244E67DC52118F65E4FD06481465)] | | [added: [Part III](#i0685a1518c984b97b0706cfa7ed9c6f4_199) | | | | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| | | | [Part I](#i0685a1518c984b97b0706cfa7ed9c6f4_10) | | | | | |

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| | | | [Part II](#i0685a1518c984b97b0706cfa7ed9c6f4_31) | | | | | |

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| [Item 6.](#i0685a1518c984b97b0706cfa7ed9c6f4_37) | | | [(Removed](#i0685a1518c984b97b0706cfa7ed9c6f4_37) [](#i0685a1518c984b97b0706cfa7ed9c6f4_37)[and](#i0685a1518c984b97b0706cfa7ed9c6f4_37) [](#i0685a1518c984b97b0706cfa7ed9c6f4_37)[Reserved)](#i0685a1518c984b97b0706cfa7ed9c6f4_37) | | | [27](#i0685a1518c984b97b0706cfa7ed9c6f4_37) | | |

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| | | | [Part IV](#i0685a1518c984b97b0706cfa7ed9c6f4_217) | | | | | |

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| | | | [Signatures](#i0685a1518c984b97b0706cfa7ed9c6f4_226) | | | [103](#i0685a1518c984b97b0706cfa7ed9c6f4_226) | | |

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| | [Part I](#s061E12E0ED6354B5BE64FE9F3B33763B) | |

| | [Part II](#s1EA215DB51E655269EE39320EDE093B7) | |

| [Item 6.](#s4104C84BD53A50CCBEE09A71062D1A6F) | [Selected Financial Data](#s4104C84BD53A50CCBEE09A71062D1A6F) | [25](#s4104C84BD53A50CCBEE09A71062D1A6F) |

| | [Part IV](#s47AFCB4E589F59B48A2BAD89ACF95C11) | |

| | [Signatures](#s1B8023CFB4475867A26B188E91AA70F2) | [111](#s1B8023CFB4475867A26B188E91AA70F2) |

The following sets forth the location of our principal owned or leased facilities for our business segments as of December 31, [removed: 2019:][added: 2020:]

| *Oilfield Services:* | | [added: | | | |] Houston, Pasadena, and The Woodlands, Texas; Broken Arrow and Claremore, Oklahoma - all located in the United States; Leduc, Canada; Celle, Germany; Tananger, Norway; Aberdeen, Scotland; Liverpool, England; Macae, Brazil; Singapore, Singapore; Kakinada, India; [removed: Nimr, Oman;] Abu Dhabi and Dubai, United Arab Emirates; Dhahran, Saudi Arabia; Luanda, Angola; Port Harcourt, Nigeria | [added: | |]

| *Oilfield Equipment:* | | [added: | | | |] Houston and Humble, Texas - located in the United States; Montrose, Scotland; Nailsea, England; Niteroi, Brazil; Suzhou, China; Dammam, Saudi Arabia | [added: | |]

| *Turbomachinery & Process Solutions:* | | [added: | | | |] Deer Park, Texas and Jacksonville, Florida - located in the United States; Florence and Massa, Italy; Le Creusot, France; Coimbatore, India | [added: | |]

| *Digital Solutions:* | | [added: | | | |] Billerica, Massachusetts and Minden, Nevada - located in the United States; Groby, England; Shannon, Ireland; Hurth, Germany | [added: | |]

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[removed: Information concerning] [added: We have no] mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K [removed: is included in Exhibit 95] to [removed: this annual report.][added: report for the fiscal year ended December 31, 2020.]

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 21][added: 24]

As of February [removed: 6, 2020,] [added: 19, 2021,] there were approximately [removed: 6,658] [added: 6,506] stockholders of record.

The following table contains information about our purchases of Class A common stock equity securities during the fourth quarter of [removed: 2019.][added: 2020.]

| Period | [added: | |] Total Number of Shares Purchased (1) | | | [added: | | |] Average Price Paid Per Share (2) | | | | [added: | |] Total Number of Shares Purchased as Part of a Publicly Announced Plan or Programs (3) | | [added: | | | |] Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs (3) | | |

[removed: | (1) | Represents] [added: (1)Represents] Class A common stock purchased from employees to satisfy the tax withholding obligations in connection with the vesting of restricted stock units and from the automatic exercise of certain stock options at their expiration. [removed: |]

[removed: | (2) | Average] [added: (2)Average] price paid for Class A common stock purchased from employees to satisfy the tax withholding obligations in connection with the vesting of restricted stock [removed: units and from the automatic exercise of certain stock options at their expiration. |][added: units.]

[removed: | (3) | We] [added: (3)We] did not repurchase any shares of Class A common stock in the fourth quarter of [removed: 2019. As of December 31, 2019, the stock repurchase program has been substantially completed. |][added: 2020.]

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 22][added: 25]

The first graph below reflects total shareholder returns for Baker Hughes Incorporated (our predecessor issuer pursuant to Rule 12g-3(a) under the Securities Exchange Act) from December 31, [removed: 2014] [added: 2015] to July 3, 2017, the date of consummation of the Transactions.

The second graph below reflects the total shareholder returns for our common stock from July 5, 2017, the first business day following consummation of the Transactions, to December 31, [removed: 2019.][added: 2020.]

Comparison of [removed: Two] [added: Three] Years and Six Months Cumulative Total Return

[removed: ][added: ]

| | | [removed: 2014] | | | | 2015 | | | | [added: | |] 2016 | | | | [added: | |] July [removed: 3, 2017] [added: 3, 2017] | | |

| Baker Hughes Incorporated (BHI) | | [removed: $] | [removed: 100.00] | | | $ | [removed: 83.26] [added: 100.00] | | | [added: | |] $ | [removed: 118.90] [added: 142.81] | | | [added: | |] $ | [removed: 106.16] [added: 127.51] | |

| S&P 500 Stock Index | | [added: | | | |] 100.00 | | | | [removed: 101.38] | | [added: 111.96] | | [removed: 113.51] | | | | [removed: 124.41] [added: 122.71] | | |

| S&P 500 Oil and Gas Equipment and Services Index | | [added: | | | |] 100.00 | | | | [removed: 81.25] | | [added: 131.93] | | [removed: 107.19] | | | | [removed: 125.84] [added: 154.89] | | |

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 23][added: 26]

The following graph compares the change in cumulative total stockholder return on our common stock (assuming reinvestment of dividends into common stock at the date of payment) with the cumulative total return on the published S&P 500 Stock Index and the cumulative total return on the S&P 500 Oil and Gas Equipment and Services Index over the preceding [removed: 30] [added: three year and six] month period.

The graph reflects total shareholder returns for our common stock from July 5, 2017, the first business day following consummation of the Transactions, to December 31, [removed: 2019.][added: 2020.]

[removed: ][added: ]

| | | [added: | | | |] July [removed: 5, 2017] [added: 5, 2017] | | | | [added: | |] December 31, 2017 | | | | [added: | |] 2018 | | | | [added: | |] 2019 | | | [added: | | | 2020 | | |]

| Baker Hughes Company (BKR) | | [added: | | | |] $ | 100.00 | | | [added: | |] $ | 85.84 | | | [added: | |] $ | 59.73 | | | [added: | |] $ | 73.44 | | [added: | | | $ | 62.33 | |]

| S&P 500 Stock Index | | [added: | | | |] 100.00 | | | | [added: | |] 110.97 | | | | [added: | |] 106.11 | | | | [added: | |] 139.52 | | | [added: | | | 165.19 | | |]

| S&P 500 Oil and Gas Equipment and Services Index | | [added: | | | |] 100.00 | | | | [added: | |] 106.02 | | | | [added: | |] 62.06 | | | | [added: | |] 68.59 | | | [added: | | | 43.75 | | |]

The comparison of total return on investment (change in year-end stock price plus reinvested dividends) assumes that $100 was invested on December 31, [removed: 2014] [added: 2015] and July 5, 2017, respectively, in BHI and Baker Hughes common stock, the S&P 500 Index and the S&P 500 Oil and Gas Equipment and Services Index.

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| October 1-31, 2020 | | | 3,238 | | | | | | $ | 15.13 | | | | | — | | | | | | $ | 18,690,655 | |

| November 1-30, 2020 | | | 14,490 | | | | | | 20.01 | | | | | | — | | | | | | $ | 18,690,655 | |

| December 1-31, 2020 | | | 9,893 | | | | | | 20.51 | | | | | | — | | | | | | $ | 18,690,655 | |

| Total | | | 27,621 | | | | | | $ | 19.62 | | | | | — | | | | | | | | |

As of December 31, 2020, the stock repurchase program has been substantially completed.

Comparison of One Year and Six Months Cumulative Total Return

| | | | | | | | | | | | | | | | | | | | | |

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Prior to October 18, 2019, our Class A common stock traded under the ticker symbol ‘BHGE’.

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| October 1-31, 2019 | 10,197 | | | $ | 23.31 | | | — | | $ | 18,690,655 | |

| November 1-30, 2019 | 64,823 | | | 22.61 | | | | — | | $ | 18,690,655 | |

| December 1-31, 2019 | 6,300 | | | 23.52 | | | | — | | $ | 18,690,655 | |

| Total | 81,320 | | | $ | 22.76 | | | — | | | | |

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Baker Hughes Company 2019 FORM 10-K | 24

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 25][added: 27]

The Selected Financial Data should be read in conjunction with Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 8.

Financial Statements and Supplementary Data, both contained herein.

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | Year Ended December 31,(1) | | | | | | | | | | | | | | |

| *(In millions, except per share amounts)* | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | |

| Revenue | $ | 23,838 | | $ | 22,877 | | $ | 17,179 | | $ | 13,082 | | $ | 16,688 | |

| Cost of revenue | 19,406 | | | 18,891 | | | 14,143 | | | 10,150 | | | 12,193 | | |

| Selling, general and administrative | 2,832 | | | 2,699 | | | 2,535 | | | 1,926 | | | 2,115 | | |

| Restructuring, impairment and other (2) | 342 | | | 433 | | | 412 | | | 516 | | | 411 | | |

| Goodwill impairment (3) | — | | | — | | | — | | | — | | | 2,080 | | |

| Separation and merger related (4) | 184 | | | 153 | | | 373 | | | 33 | | | 27 | | |

| Operating income (loss) | 1,074 | | | 701 | | | (284 | | ) | 457 | | | (138 | | ) |

| Other non operating income (loss), net | (84 | | ) | 202 | | | 80 | | | 3 | | | 100 | | |

| Interest expense, net | (237 | | ) | (223 | | ) | (131 | | ) | (102 | | ) | (120 | | ) |

| Income (loss) before income taxes and equity in loss of affiliate | 753 | | | 680 | | | (335 | | ) | 358 | | | (158 | | ) |

| Equity in loss of affiliate | — | | | (139 | | ) | (11 | | ) | — | | | — | | |

| Income tax provision | (482 | | ) | (258 | | ) | (45 | | ) | (173 | | ) | (473 | | ) |

| Net income (loss) | 271 | | | 283 | | | (391 | | ) | 185 | | | (631 | | ) |

| Less: Net income (loss) attributable to GE O&G pre-merger | — | | | — | | | 42 | | | 254 | | | (606 | | ) |

| Less: Net income (loss) attributable to noncontrolling interests | 143 | | | 88 | | | (330 | | ) | (69 | | ) | (25 | | ) |

| Net income (loss) attributable to Baker Hughes Company | $ | 128 | | $ | 195 | | $ | (103 | ) | $ | — | | $ | — | |

| Per share of common stock: | | | | | | | | | | | | | | | |

| Basic income (loss) per Class A common share | $ | 0.23 | | $ | 0.46 | | $ | (0.24 | ) | | | | | | |

| Diluted income (loss) per Class A common share | 0.23 | | | 0.45 | | | (0.24 | | ) | | | | | | |

| Dividend: | | | | | | | | | | | | | | | |

| Cash dividend per Class A common share | $ | 0.72 | | $ | 0.72 | | $ | 0.35 | | | | | | | |

| Special dividend per Class A common share | | | | | | | $ | 17.50 | | | | | | | |

| Balance Sheet Data: | | | | | | | | | | | | | | | |

| Cash and cash equivalents(5) | $ | 3,249 | | $ | 3,723 | | $ | 7,030 | | $ | 981 | | $ | 1,432 | |

| Total assets | 53,369 | | | 52,439 | | | 56,500 | | | 21,466 | | | 23,133 | | |

| Long-term debt | 6,301 | | | 6,285 | | | 6,312 | | | 38 | | | 13 | | |

| Total equity | 34,499 | | | 35,013 | | | 38,410 | | | 14,280 | | | 14,545 | | |

Notes to Selected Financial Data

| | |

| --- | --- |

| (1) | The 2019 and 2018 results are not comparable to prior years as the results of BHI are included only from July 3, 2017. Additionally, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2014-09, *Revenue from Contracts with Customers*, and the related amendments with effect from January 1, 2016. Accordingly, 2015 period is not presented under the new revenue standard. |

| (2) | See "Note 21. Restructuring, Impairment and Other" of the Notes to Consolidated and Combined Financial Statements in Item 8 herein for further discussion. |

| (3) | In performing the annual impairment test for goodwill in the third quarter of 2015 using data as of July 1 of that year, we determined that a step two test was required for a reporting unit within our OFS operating segment. As a consequence of the continued pressure on oil prices, the revised expected cash flows for this reporting unit resulted in a goodwill impairment charge of $2,080 million. |

Based on our assessment, our principal executive officer and principal financial officer concluded that our internal control over financial reporting was effective as of December 31, [removed: 2019.][added: 2020.]

| /s/ LORENZO SIMONELLI Lorenzo Simonelli Chairman, President and Chief Executive Officer | | [added: | | | |] /s/ BRIAN WORRELL Brian Worrell Chief Financial Officer | | [added: | | | |] /s/ KURT CAMILLERI Kurt Camilleri Senior Vice President, Controller and Chief Accounting Officer | [added: | |]

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 45][added: 46]

*Opinion on the Consolidated [removed: and Combined] Financial Statements*

We have audited the accompanying consolidated statements of financial position of Baker Hughes Company and subsidiaries (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated [removed: and combined] statements of income (loss), comprehensive income (loss), changes in equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2019,] [added: 2020,] and the related notes (collectively, the consolidated [removed: and combined] financial statements).

In our opinion, the consolidated [removed: and combined] financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February [removed: 13, 2020,] [added: 25, 2021] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

These consolidated [removed: and combined] financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated [removed: and combined] financial statements based on our audits.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated [removed: and combined] financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated [removed: and combined] financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated [removed: and combined] financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated [removed: and combined] financial statements.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated [removed: and combined] financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated [removed: and combined] financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated [removed: and combined] financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

[removed: *Evaluation of revenue] [added: *Revenue] recognition on [added: certain] agreements for sales of [removed: goods] [added: new products] manufactured to unique customer specifications*

As discussed in Note 1 to the consolidated [removed: and combined] financial statements, the Company enters into agreements for sales of goods manufactured to unique customer [removed: specifications.][added: specifications on an over time basis.]

[removed: We identified revenue recognition for contracts from the sales of goods manufactured to unique customer specifications as a critical audit matter because of the complex] [added: Complex] auditor judgment [added: was] required in evaluating the Company's long-term estimates of the expected [added: direct material] costs to be incurred in order to complete [removed: the contract.][added: these agreements.]

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 46][added: 47]

The [added: following are the] primary procedures we performed to address this critical audit [removed: matter included the following.][added: matter.]

We [added: evaluated the design and] tested [added: the operating effectiveness of] certain internal controls [removed: over] [added: related to] the Company’s revenue recognition process for [removed: contracts from the] sales of [removed: goods manufactured to unique customer specifications.][added: new products.]

[removed: Such controls] [added: This] included controls pertaining to the Company's estimation of [added: direct material] costs expected to be incurred to complete [removed: the contract.][added: agreements for sales of new products.]

[removed: For the selected contracts, we] [added: We] evaluated the estimated [added: direct material] costs expected to be incurred to complete the [removed: contract] [added: new products for the agreements] by:

[removed: | – | questioning] [added: –questioning] the Company's finance and project managers regarding progress to date based on the latest project reports and the costs expected to still be incurred until completion; [removed: |]

[removed: | – | observing] [added: –observing] project review meetings performed by the Company [removed: and] [added: or] inspecting relevant minutes of those meetings to identify changes in the estimated costs expected to be incurred to complete the contract and related contract margins; [removed: |]

[removed: | – | investigating] [added: –investigating] changes to the contract margin when compared to the prior year's estimated contract [removed: margin. |][added: margin; and]

As discussed in [removed: Note 7] [added: Notes 1 and 6] to the consolidated [removed: and combined] financial statements, the Company has four reporting units which are monitored for impairment on the basis of market [removed: condition.][added: conditions.]

The Company performs [removed: a goodwill] [added: an] impairment test on [added: goodwill on] an annual basis [removed: on] [added: for each of its reporting units as of] July [removed: 1] [added: 1,] or [removed: whenever events and changes in] [added: more frequently when] circumstances indicate that [added: an impairment indicator exists at] the [removed: carrying value of a] reporting unit [removed: might exceed its fair value.][added: level.]

The goodwill balance as of December 31, [removed: 2019] [added: 2020] was [removed: $20,690] [added: $5,977] million, of which [removed: $3,319 million and $13,043] [added: $1,539] million [removed: were] [added: was] related to the Oilfield [removed: Equipment and Oilfield] Services reporting [removed: units, respectively.][added: unit.]

Projected revenue, projected operating profit, and the discount [removed: rates] [added: rate] are elements of the estimated future cash flows used by the Company in determining the fair value of each [added: of the] reporting [removed: unit.][added: units.]

We identified the evaluation of [removed: projected revenue, projected operating profit and] the [removed: discount rates used in the assessment of the carrying value of] goodwill [added: impairment analysis] for the Oilfield [removed: Equipment and Oilfield] Services reporting [removed: units] [added: unit] as a critical audit matter.

Specifically, the evaluation of projected [removed: revenue,] [added: revenue and] projected operating [removed: profit, and the discount rates] [added: profit] required the application of subjective auditor [removed: judgement] [added: judgment] because these projections involve assumptions about future [removed: events and changes to the discount rate assumptions may have a significant effect on the Company's assessment of the carrying value of the goodwill of the reporting units.][added: events.]

[removed: We tested certain internal] [added: This included] controls [removed: over the Company’s] [added: relating to management’s] goodwill impairment [removed: process, including controls over] [added: test,] the development of projected financial information and the discount [removed: rates,] [added: rate,] and management’s review of the [removed: projections and comparison to historical results.][added: projections.]

We evaluated the projected revenue and projected operating profit assumptions by comparing the projected amounts to [removed: (a)] [added: (1)] the past performance of the reporting unit, including historical [removed: results and growth rates,] [added: actual results,] and [removed: (b)] [added: (2)] relevant [removed: and reliable] industry benchmark data related to future events.

We evaluated the Company’s ability to accurately prepare projections by comparing the projected revenues and projected operating profit to [removed: historical] [added: actual] results for the [removed: same] period.

[removed: | – |] [added: In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in] evaluating the discount [removed: rates] [added: rate] used by comparing [removed: them] [added: it] against a discount rate range that was independently developed using publicly available market data for comparable [removed: entities; and |][added: entities.]

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 47][added: 48]

We have audited Baker Hughes Company and subsidiaries’ (the Company) internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated [removed: and combined] statements of income (loss), comprehensive income (loss), changes in equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2019,] [added: 2020,] and the related notes (collectively, the consolidated [removed: and combined] financial statements), and our report dated February [removed: 13, 2020,] [added: 25, 2021] expressed an unqualified opinion on those consolidated [removed: and combined] financial statements.

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February 25, 2021

The Company provides for potential losses on these types of contracts when it is probable that a loss will be incurred.

We identified revenue recognition for certain agreements for sales of new products as a critical audit matter.

We evaluated the Company's ability to accurately estimate direct material costs expected to be incurred to complete the agreements for sales of new products.

–evaluating the estimated direct material costs to be incurred by obtaining supplier cost estimates and considering changes to those estimates during the year

*Goodwill impairment in the Oilfield Services reporting unit*

Potential impairment indicators include the results of the most recent annual impairment testing, downward revisions to internal forecasts, declines in market capitalization below book value, and the magnitude and duration of those declines, if any.

The Company identified impairment indicators and therefore performed an interim quantitative impairment test comparing the fair value of each of its reporting units to its carrying value as of March 31, 2020.

Based on the results of the quantitative impairment test as of March 31, 2020, the Company concluded that the carrying value of the Oilfield Services reporting unit exceeded its estimated fair value and recorded a goodwill impairment charge in the amount of $11,484 million associated with the Oilfield Services reporting unit.

In addition, changes to the discount rate assumptions may have a significant effect on the Company’s assessment of the carrying value of the goodwill of the reporting unit.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the goodwill impairment process.

February 25, 2021

February 25, 2021

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Goodwill impairment | | | 14,773 | | | — | | | — | | |

| | | | | | | | | | | | |

| | | | | | | | | | | | |

| | | | | | | | | | | | |

| | | | | | | | | | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Year Ended December 31, | | | | | | | | |

| | | | | | | | | | | | |

| | | | | | | | | | | | |

| | | | | | | | | | | | |

See accompanying Notes to Consolidated Financial Statements

See accompanying Notes to Consolidated Financial Statements

| Net loss | | | | | | | | | | | | (9,940) | | | | | | (5,821) | | | (15,761) | | |

| Distributions to GE | | | | | | | | | | | | | | | | | | (256) | | | (256) | | |

| Effect of exchange of Class B common stock and associated BHH LLC Units for Class A common stock | | | | | | 1,317 | | | | | | | | | (185) | | | (1,132) | | | — | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2020 | | | — | | | $ | 24,613 | | | | | $ | (9,942) | | $ | (1,778) | | $ | 5,349 | | $ | 18,242 | |

See accompanying Notes to Consolidated Financial Statements

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Year Ended December 31, | | | | | | | | |

| | | | | |

| --- | --- | --- | --- | --- |

February 13, 2020

We selected certain contracts from the sales of goods manufactured to unique customer specifications to evaluate the Company's ability to accurately estimate costs expected to be incurred to complete a contract.

| | |

| --- | --- |

| – | assessing the remaining estimated costs expected to be incurred by expenditure category on contracts in progress by comparing to the actual costs incurred during the current year for the selected project and similar projects; and |

*Assessment of the carrying value of goodwill in the Oilfield Equipment and Oilfield Services reporting units*

The Oilfield Equipment and Oilfield Services reporting units had fair values that were not significantly in excess of their carrying values.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

| – | evaluating the industry benchmark data used by the Company in developing its projected financial information; |

| – | performing sensitivity analysis related to key inputs including revenue growth rates, discount rates and projected operating profit. |

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Less: Net income attributable to GE O&G pre-merger | — | | | — | | | 42 | | |

| Special dividend per Class A common share | | | | | | | $ | 17.50 | |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Balance at December 31, 2016 | — | | $ | — | | $ | 16,001 | | $ | — | | $ | (1,888 | ) | $ | 167 | | $ | 14,280 | |

| Changes in Parent's net investment | | | | | | 775 | | | | | | (13 | | ) | | | | 762 | | |

| Net activity related to noncontrolling interests | | | | | | | | | | | | | | | 4 | | | 4 | | |

| Cash contribution received from GE | | | | | | 7,400 | | | | | | | | | | | | 7,400 | | |

| Conversion of Parent's net investment into noncontrolling interest and issuance of Class B common stock | | | | | | (24,218 | | ) | | | | | | | 24,218 | | | — | | |

| Issuance of Class A common stock on acquisition of BHI | | | 24,798 | | | | | | | | | | | | 76 | | | 24,874 | | |

| Special dividend ($17.5 per share) | | | (7,498 | | ) | | | | | | | | | | | | | (7,498 | | ) |

| Reallocation of equity based on ownership of GE and previous BHI stockholders | | | (1,850 | | ) | | | | | | | 1,234 | | | 616 | | | — | | |

| Activity after business combination of July 3, 2017: | | | | | | | | | | | | | | | | | | | | |

| Net loss | | | | | | | | | (103 | | ) | | | | (334 | | ) | (437 | | ) |

| Distributions to GE | | | | | | | | | | | | | | | (251 | | ) | (251 | | ) |

| Net activity related to noncontrolling interests | | | (62 | | ) | | | | | | | (13 | | ) | (133 | | ) | (208 | | ) |

| Net cash paid for business interests | (176 | | ) | (530 | | ) | (10 | | ) |

| Net transfer from Parent | — | | | — | | | 1,498 | | |

| Contribution received from GE | — | | | — | | | 7,400 | | |

We conduct business in more than 120 countries and employ approximately 68,000 employees.

On July 3, 2017, we closed the business combination (the Transactions) of GE O&G and BHI.

As a result, substantially all of the businesses of GE O&G and of BHI were transferred to a subsidiary of the Company, Baker Hughes, a GE company, LLC (BHGE LLC).

Following the Transactions, we held a minority economic interest in BHGE LLC.

The Company's financial statements have been prepared on a consolidated basis, effective July 3, 2017.

Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest).

For all periods prior to July 3, 2017, the Company's financial statements were prepared on a combined basis.

Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, [removed: 2019,] [added: 2020,] our disclosure controls and procedures (as defined in Rule 15d-15(e) of the Exchange Act) were effective at a reasonable assurance level.

There has been no change in our internal controls over financial reporting during the year ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Effective January 1, 2019, we adopted the new lease guidance under ASC Topic 842, Leases, using the modified retrospective method of adoption.

The adoption of this guidance required the implementation of new accounting policies and processes, including changes to our information systems, which changed the Company’s internal controls over financial reporting for leases and related disclosures for our current period reporting.

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 103][added: 95]

Business of this [removed: Annual Report.][added: annual report on Form 10-K.]

Information concerning our directors is set forth in the sections entitled "Proposal No. 1, Election of Directors - Board Nominees for Directors," and "Corporate Governance - Committees of the Board" in our Definitive Proxy Statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders to be filed with the SEC pursuant to the Exchange Act within 120 days of the end of our fiscal year on December 31, [removed: 2019] [added: 2020] (Proxy Statement), which sections are incorporated herein by reference.

Additional information regarding compliance by directors and executive officers with Section 16(a) of the Exchange Act is set forth under the section entitled [removed: "Section] [added: "Delinquent Section] 16(a) [removed: Beneficial Ownership Reporting Compliance"] [added: Reports"] in our Proxy Statement, which section is incorporated herein by reference.

The information in the following table is presented as of December 31, [removed: 2019] [added: 2020] with respect to shares of our Class A common stock that may be issued under our LTI Plan which has been approved by our stockholders (in millions, except per share prices).

| Equity Compensation [removed: Plan Category] [added: Plan Category] | [added: | |] Number [removed: of Securities] [added: of Securities] to [removed: be Issued Upon Exercise of Outstanding Options, Warrants and] [added: be Issued Upon Exercise of Outstanding Options, Warrants and] Rights | | | | | [added: | | | | | | |] Weighted [removed: Average Exercise] [added: Average Exercise] Price [removed: of Outstanding Options, Warrants and] [added: of Outstanding Options, Warrants and] Rights | | | | | | [added: | | | | | |] Number of [removed: Securities Remaining Available for] [added: Securities Remaining Available for] Future [removed: Issuance Under Equity Compensation Plans (excluding securities reflected] [added: Issuance Under Equity Compensation Plans (excluding securities reflected] in the [removed: first column)] [added: first column)] | | | | [added: | | | | |]

| Nonstockholder-approved plans | | [added: | | | |] — | | | | | [added: | | | | | | |] — | | | | | | [added: | | | | | |] — | | | [added: | | |]

| Subtotal (except for weighted average exercise price) | | [removed: 4.6] | | | | [added: 4.2] | [removed: 29.96] | | | | | | [removed: 35.5] | | | [added: | | 30.17 | | | | | | | | | | | | 26.1 | | | | | |]

| Employee Stock Purchase Plan | | [added: | | | |] 0.7 | | | | | [removed: 21.79] | | | | | | [removed: 12.9] | [added: 17.72] | | [added: | | | | | | | | | | 8.5 | | | | | |]

Baker Hughes Company [removed: 2019] [added: 2020] FORM 10-K | [removed: 104][added: 96]