Item 1. FINANCIAL STATEMENTS (UNAUDITED)

Baker Hughes Company

Condensed Consolidated Statements of Income (Loss)

(Unaudited)

			Three Months Ended June 30,						Six Months Ended June 30,
(In millions, except per share amounts)			2023			2022			2023			2022
Revenue:
Sales of goods			$	3,793		$	2,817		$	7,276		$	5,626
Sales of services			2,522			2,230			4,754			4,256
Total revenue			6,315			5,047			12,030			9,882
Costs and expenses:
Cost of goods sold			3,255			2,495			6,237			4,862
Cost of services sold			1,749			1,582			3,332			3,081
Selling, general and administrative			695			624			1,351			1,245
Restructuring, impairment and other			102			371			158			441
Total costs and expenses			5,801			5,072			11,078			9,629
Operating income (loss)			514			(25)			952			253
Other non-operating income (loss), net			158			(570)			544			(597)
Interest expense, net			(58)			(60)			(122)			(124)
Income (loss) before income taxes			614			(655)			1,374			(468)
Provision for income taxes			(200)			(182)			(379)			(289)
Net income (loss)			414			(837)			995			(757)
Less: Net income attributable to noncontrolling interests			4			2			10			10
Net income (loss) attributable to Baker Hughes Company			$	410		$	(839)		$	985		$	(767)
Per share amounts:
Basic income (loss) per Class A common stock			$	0.41		$	(0.84)		$	0.98		$	(0.79)
Diluted income (loss) per Class A common stock			$	0.40		$	(0.84)		$	0.97		$	(0.79)
Cash dividend per Class A common stock			$	0.19		$	0.18		$	0.38		$	0.36

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 1

Baker Hughes Company

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

			Three Months Ended June 30,						Six Months Ended June 30,
(In millions)			2023			2022			2023			2022
Net income (loss)			$	414		$	(837)		$	995		$	(757)
Less: Net income attributable to noncontrolling interests			4			2			10			10
Net income (loss) attributable to Baker Hughes Company			410			(839)			985			(767)
Other comprehensive income (loss):
Investment securities			1			—			1			—
Foreign currency translation adjustments			230			(170)			168			(153)
Cash flow hedges			11			—			11			1
Benefit plans			(10)			24			(4)			32
Other comprehensive income (loss)			232			(146)			176			(120)
Less: Other comprehensive loss attributable to noncontrolling interests			—			(2)			—			(2)
Other comprehensive income (loss) attributable to Baker Hughes Company			232			(144)			176			(118)
Comprehensive income (loss)			646			(983)			1,171			(877)
Less: Comprehensive income attributable to noncontrolling interests			4			—			10			8
Comprehensive income (loss) attributable to Baker Hughes Company			$	641		$	(983)		$	1,162		$	(885)

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 2

Baker Hughes Company

Condensed Consolidated Statements of Financial Position

(Unaudited)

(In millions, except par value)			June 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents			$	2,805		$	2,488
Current receivables, net			6,418			5,958
Inventories, net			4,957			4,587
All other current assets			1,626			1,559
Total current assets			15,806			14,592
Property, plant and equipment (net of accumulated depreciation of $5,491 and $5,121)			4,723			4,538
Goodwill			6,074			5,930
Other intangible assets, net			4,124			4,180
Contract and other deferred assets			1,776			1,503
All other assets			2,920			2,781
Deferred income taxes			670			657
Total assets			$	36,093		$	34,181
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable			$	4,154		$	4,298
Short-term and current portion of long-term debt			797			677
Progress collections and deferred income			5,101			3,822
All other current liabilities			2,259			2,278
Total current liabilities			12,311			11,075
Long-term debt			5,847			5,980
Deferred income taxes			283			229
Liabilities for pensions and other postretirement benefits			968			960
All other liabilities			1,422			1,412
Equity:
Class A Common Stock, $0.0001 par value - 2,000 authorized, 1,009 and 1,006 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively			—			—
Class B Common Stock, $0.0001 par value - 1,250 authorized, nil issued and outstanding as of June 30, 2023 and December 31, 2022, respectively			—			—
Capital in excess of par value			27,696			28,126
Retained loss			(9,776)			(10,761)
Accumulated other comprehensive loss			(2,795)			(2,971)
Baker Hughes Company equity			15,125			14,394
Noncontrolling interests			137			131
Total equity			15,262			14,525
Total liabilities and equity			$	36,093		$	34,181

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 3

Baker Hughes Company

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

(In millions, except per share amounts)			Class A and Class B Common Stock			Capital in Excess of Par Value			Retained Loss			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Equity
Balance at December 31, 2022			$	—		$	28,126		$	(10,761)		$	(2,971)		$	131		$	14,525
Comprehensive income:
Net income									985						10			995
Other comprehensive income												176						176
Dividends on Class A common stock ($0.38 per share)						(384)												(384)
Repurchase and cancellation of Class A common stock						(99)												(99)
Stock-based compensation cost						98												98
Other						(45)									(4)			(49)
Balance at June 30, 2023			$	—		$	27,696		$	(9,776)		$	(2,795)		$	137		$	15,262

(In millions, except per share amounts)			Class A and Class B Common Stock			Capital in Excess of Par Value			Retained Loss			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Equity
Balance at March 31, 2023			$	—		$	27,925		$	(10,185)		$	(3,026)		$	135		$	14,849
Comprehensive income:
Net income									410						4			414
Other comprehensive income												232						232
Dividends on Class A common stock ($0.19 per share)						(192)												(192)
Repurchase and cancellation of Class A common stock						(99)												(99)
Stock-based compensation cost						49												49
Other						13			(1)			(1)			(2)			9
Balance at June 30, 2023			$	—		$	27,696		$	(9,776)		$	(2,795)		$	137		$	15,262

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 4

Baker Hughes Company

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

(In millions, except per share amounts)			Class A and Class B Common Stock			Capital in Excess of Par Value			Retained Loss			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Equity
Balance at December 31, 2021			$	—		$	27,375		$	(10,160)		$	(2,385)		$	1,916		$	16,746
Comprehensive loss:
Net income (loss)									(767)						10			(757)
Other comprehensive loss												(118)			(2)			(120)
Dividends on Class A common stock ($0.36 per share)						(354)												(354)
Effect of exchange of Class B common stock and associated BHH LLC Units for Class A common stock						1,947						(287)			(1,660)			—
Repurchase and cancellation of Class A common stock						(458)						1			(5)			(462)
Stock-based compensation cost						102												102
Other						(14)									(55)			(69)
Balance at June 30, 2022			$	—		$	28,598		$	(10,927)		$	(2,789)		$	204		$	15,086

(In millions, except per share amounts)			Class A and Class B Common Stock			Capital in Excess of Par Value			Retained Loss			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total Equity
Balance at March 31, 2022			$	—		$	28,351		$	(10,088)		$	(2,559)		$	743		$	16,447
Comprehensive loss:
Net income (loss)									(839)						2			(837)
Other comprehensive loss												(144)			(2)			(146)
Dividends on Class A common stock ($0.18 per share)						(182)												(182)
Effect of exchange of Class B common stock and associated BHH LLC Units for Class A common stock						590						(86)			(504)			—
Repurchase and cancellation of Class A common stock						(225)									(1)			(226)
Stock-based compensation cost						50												50
Other						14									(34)			(20)
Balance at June 30, 2022			$	—		$	28,598		$	(10,927)		$	(2,789)		$	204		$	15,086

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 5

Baker Hughes Company

Condensed Consolidated Statements of Cash Flows

(Unaudited)

			Six Months Ended June 30,
(In millions)			2023			2022
Cash flows from operating activities:
Net income (loss)			$	995		$	(757)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization			545			551
(Gain) loss on equity securities			(540)			112
Provision (benefit) for deferred income taxes			110			(23)
Stock-based compensation cost			98			102
Loss on assets held for sale			—			426
Inventory impairment			33			31
Changes in operating assets and liabilities:
Current receivables			(323)			(360)
Inventories			(332)			(408)
Accounts payable			(156)			185
Progress collections and deferred income			1,223			624
Contract and other deferred assets			(236)			(122)
Other operating items, net			(97)			32
Net cash flows from operating activities			1,320			393
Cash flows from investing activities:
Expenditures for capital assets			(587)			(494)
Proceeds from disposal of assets			87			143
Proceeds from business dispositions			293			—
Net cash paid for acquisitions			(282)			(86)
Other investing items, net			75			7
Net cash flows used in investing activities			(414)			(430)
Cash flows from financing activities:
Dividends paid			(384)			(354)
Repurchase of Class A common stock			(99)			(462)
Other financing items, net			(67)			(52)
Net cash flows used in financing activities			(550)			(868)
Effect of currency exchange rate changes on cash and cash equivalents			(39)			(20)
Increase (decrease) in cash and cash equivalents			317			(925)
Cash and cash equivalents, beginning of period			2,488			3,853
Cash and cash equivalents, end of period			$	2,805		$	2,928
Supplemental cash flows disclosures:
Income taxes paid, net of refunds			$	323		$	282
Interest paid			$	157		$	140

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 6

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE BUSINESS

Baker Hughes Company ("Baker Hughes", "the Company", "we", "us", or "our") is an energy technology company with a diversified portfolio of technologies and services that span the energy and industrial value chain. We are a holding company and have no material assets other than our wholly owned operating company, Baker Hughes Holdings LLC ("BHH LLC"). BHH LLC is a Securities and Exchange Commission ("SEC") Registrant with separate filing requirements with the SEC and its separate financial information can be obtained from www.sec.gov.

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S." and such principles, "U.S. GAAP") and pursuant to the rules and regulations of the SEC for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Annual Report").

In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary by management to fairly state our results of operations, financial position and cash flows of the Company and its subsidiaries for the periods presented and are not indicative of the results that may be expected for a full year. The Company's financial statements have been prepared on a consolidated basis. 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). All intercompany accounts and transactions have been eliminated.

In the Company's financial statements and notes, certain prior year amounts have been reclassified to conform to the current year presentation. In the notes to the unaudited condensed consolidated financial statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. Certain columns and rows in our financial statements and notes thereto may not add due to the use of rounded numbers.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Please refer to "Note 1. Basis of Presentation and Summary of Significant Accounting Policies," to our consolidated financial statements from our 2022 Annual Report for the discussion of our significant accounting policies.

Supply Chain Finance Programs

On January 1, 2023, we adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which enhances the transparency of supplier finance programs and requires certain disclosures for a buyer in a supplier finance program.

Under the supply chain finance ("SCF") programs, administered by a third party, our suppliers are given the opportunity to sell receivables from us to participating financial institutions at their sole discretion at a rate that leverages our credit rating and thus might be more beneficial to our suppliers. Our responsibility is limited to making payment on the terms originally negotiated with our supplier, regardless of whether the supplier sells its receivable to a financial institution. The range of payment terms we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the program.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 7

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

As of June 30, 2023 and December 31, 2022, $280 million and $275 million of SCF program liabilities are recorded in "Accounts payable" in our condensed consolidated statements of financial position, respectively, and reflected as cash flow from operating activities in our condensed consolidated statements of cash flows when settled.

NEW ACCOUNTING STANDARDS TO BE ADOPTED

New accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.

NOTE 2. CURRENT RECEIVABLES

Current receivables are comprised of the following:

			June 30, 2023			December 31, 2022
Customer receivables			$	5,414		$	5,083
Other			1,352			1,216
Total current receivables			6,766			6,299
Less: Allowance for credit losses			(348)			(341)
Total current receivables, net			$	6,418		$	5,958

Customer receivables are recorded at the invoiced amount. The "Other" category consists primarily of advance payments to suppliers, indirect taxes, and customer retentions.

NOTE 3. INVENTORIES

Inventories, net of reserves of $400 million and $396 million as of June 30, 2023 and December 31, 2022, respectively, are comprised of the following:

			June 30, 2023			December 31, 2022
Finished goods			$	2,604		$	2,419
Work in process and raw materials			2,353			2,168
Total inventories, net			$	4,957		$	4,587

During the three and six months ended June 30, 2023, we recorded inventory impairments of $15 million and $33 million, respectively, primarily in our Oilfield Services & Equipment ("OFSE") segment related to exit activities at specific locations. During the three and six months ended June 30, 2022, we recorded inventory impairments of $31 million primarily in our Industrial & Energy Technology ("IET") segment as part of suspending our Russia operations. Charges for inventory impairments are reported in the "Cost of goods sold" caption in the condensed consolidated statements of income (loss). See "Note 17. Restructuring, Impairment, and Other" for further information.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 8

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 4. OTHER INTANGIBLE ASSETS

Intangible assets are comprised of the following:

			June 30, 2023									December 31, 2022
			Gross Carrying Amount			Accumulated Amortization			Net			Gross Carrying Amount			Accumulated Amortization			Net
Customer relationships			$	1,927		$	(775)		$	1,152		$	1,917		$	(729)		$	1,189
Technology			1,231			(849)			382			1,212			(803)			409
Trade names and trademarks			290			(181)			109			287			(175)			112
Capitalized software			1,365			(1,086)			279			1,308			(1,040)			268
Finite-lived intangible assets			4,813			(2,891)			1,922			4,725			(2,747)			1,978
Indefinite-lived intangible assets			2,202			—			2,202			2,202			—			2,202
Total intangible assets			$	7,015		$	(2,891)		$	4,124		$	6,927		$	(2,747)		$	4,180

Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 1 to 35 years. Amortization expense for the three months ended June 30, 2023 and 2022 was $63 million and $55 million, respectively, and $126 million and $110 million for the six months ended June 30, 2023 and 2022, respectively.

Estimated amortization expense for the remainder of 2023 and each of the subsequent five fiscal years is expected to be as follows:

Year			Estimated Amortization Expense
Remainder of 2023			$	124
2024			232
2025			192
2026			146
2027			123
2028			107

Baker Hughes Company 2023 Second Quarter Form 10-Q | 9

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 5. CONTRACT AND OTHER DEFERRED ASSETS

Contract assets reflect revenue earned in excess of billings on our long-term contracts to construct technically complex equipment, provide long-term product service and maintenance or extended warranty arrangements and other deferred contract related costs. Our long-term product service agreements are provided by our IET segment. Our long-term equipment contracts are provided by both our IET and OFSE segments. Contract assets are comprised of the following:

			June 30, 2023			December 31, 2022
Long-term product service agreements			$	410		$	392
Long-term equipment contracts and certain other service agreements			1,145			955
Contract assets (total revenue in excess of billings)			1,555			1,347
Deferred inventory costs			180			125
Other costs to fulfill or obtain a contract (1)			41			31
Contract and other deferred assets			$	1,776		$	1,503

(1) Other costs to fulfill or obtain a contract consist primarily of non-recurring engineering costs incurred and expected to be recovered.

Revenue recognized during the three months ended June 30, 2023 and 2022 from performance obligations satisfied (or partially satisfied) in previous periods related to our long-term service agreements was $13 million and $17 million, respectively, and $14 million and $13 million during the six months ended June 30, 2023 and 2022, respectively. This includes revenue recognized from revisions to cost or billing estimates that may affect a contract's total estimated profitability resulting in an adjustment of earnings.

NOTE 6. PROGRESS COLLECTIONS AND DEFERRED INCOME

Contract liabilities include progress collections, which reflects billings in excess of revenue, and deferred income on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements. Contract liabilities are comprised of the following:

			June 30, 2023			December 31, 2022
Progress collections			$	4,950		$	3,713
Deferred income			151			109
Progress collections and deferred income (contract liabilities)			$	5,101		$	3,822

Revenue recognized during the three months ended June 30, 2023 and 2022 that was included in the contract liabilities at the beginning of the period was $507 million and $513 million, respectively, and $1,468 million and $1,253 million during the six months ended June 30, 2023 and 2022, respectively.

NOTE 7. LEASES

Our leasing activities primarily consist of operating leases for administrative offices, manufacturing facilities, research centers, service centers, sales offices and certain equipment.

			Three Months Ended June 30,						Six Months Ended June 30,
Operating Lease Expense			2023			2022			2023			2022
Long-term fixed lease			$	68		$	63		$	137		$	126
Long-term variable lease			19			13			34			22
Short-term lease			124			114			251			224
Total operating lease expense			$	210		$	190		$	422		$	372

Baker Hughes Company 2023 Second Quarter Form 10-Q | 10

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

Cash flows used in operating activities for operating leases approximates our expense for the three and six months ended June 30, 2023 and 2022.

The weighted-average remaining lease term as of June 30, 2023 and December 31, 2022 was approximately seven years for our operating leases. The weighted-average discount rate used to determine the operating lease liability as of June 30, 2023 and December 31, 2022 was 3.5% and 3.1%, respectively.

NOTE 8. DEBT

The carrying value of our short-term and long-term debt are comprised of the following:

			June 30, 2023			December 31, 2022
Short-term and current portion of long-term debt
1.231% Senior Notes due December 2023			$	649		$	649
8.55% Debentures due June 2024			111			—
Other debt			37			29
Total short-term and current portion of long-term debt			797			677
Long-term debt
8.55% Debentures due June 2024			—			114
2.061% Senior Notes due December 2026			598			597
3.337% Senior Notes due December 2027			1,280			1,277
6.875% Notes due January 2029			270			273
3.138% Senior Notes due November 2029			523			523
4.486% Senior Notes due May 2030			497			497
5.125% Senior Notes due September 2040			1,284			1,286
4.080% Senior Notes due December 2047			1,338			1,338
Other long-term debt			57			75
Total long-term debt			5,847			5,980
Total debt			$	6,644		$	6,658

The estimated fair value of total debt at June 30, 2023 and December 31, 2022 was $5,964 million and $5,863 million, respectively. For a majority of our debt the fair value was determined using quoted period-end market prices. Where market prices are not available, we estimate fair values based on valuation methodologies using current market interest rate data adjusted for our non-performance risk.

We have a $3 billion committed unsecured revolving credit facility ("the Credit Agreement") with commercial banks maturing in December 2024. In addition, we have a commercial paper program with authorization up to $3 billion under which we may issue from time to time commercial paper with maturities of no more than 397 days. The Credit Agreement contains certain customary representations and warranties, certain customary affirmative covenants and certain customary negative covenants. Upon the occurrence of certain events of default, our obligations under the Credit Agreement may be accelerated. Such events of default include payment defaults to lenders under the Credit Agreement and other customary defaults. No such events of default have occurred. At June 30, 2023 and December 31, 2022, there were no borrowings under either the Credit Agreement or the commercial paper program.

Baker Hughes Co-Obligor, Inc. is a co-obligor, jointly and severally with BHH LLC on our long-term debt securities. This co-obligor is a 100%-owned finance subsidiary of BHH LLC that was incorporated for the sole purpose of serving as a corporate co-obligor of debt securities and has no assets or operations other than those related to its sole purpose. As of June 30, 2023, Baker Hughes Co-Obligor, Inc. is a co-obligor of certain debt securities totaling $6,550 million.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 11

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

Certain Senior Notes contain covenants that restrict our ability to take certain actions, including, but not limited to, the creation of certain liens securing debt, the entry into certain sale-leaseback transactions, and engaging in certain merger, consolidation and asset sale transactions in excess of specified limits. At June 30, 2023, we were in compliance with all debt covenants.

NOTE 9. INCOME TAXES

For the three and six months ended June 30, 2023, the provision for income taxes was $200 million and $379 million, respectively. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily related to income in jurisdictions with tax rates higher than in the U.S., which is partially offset by tax benefits related to uncertain tax positions. Further, for the six months ended June 30, 2023, the tax rate is also partially reduced by income subject to U.S. tax at an effective rate less than 21% due to valuation allowances.

For the three and six months ended June 30, 2022, the provision for income taxes was $182 million and $289 million, respectively. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily related to losses with no tax benefit due to valuation allowances, restructuring charges related to our Russia operations for which a majority has no tax benefit, and income in jurisdictions with tax rates higher than in the U.S.

NOTE 10. EQUITY

COMMON STOCK

We are authorized to issue 2 billion shares of Class A common stock, 1.25 billion shares of Class B common stock and 50 million shares of preferred stock each of which have a par value of $0.0001 per share. The number of shares outstanding of Class A and Class B common stock as of June 30, 2023 is 1,009 million and nil, respectively. We have not issued any preferred stock. Each share of Class A and Class B common stock and the associated membership interest in BHH LLC form a paired interest. While each share of Class B common stock has equal voting rights to a share of Class A common stock, it has no economic rights, meaning holders of Class B common stock have no right to dividends or any assets in the event of liquidation of the Company. As of June 30, 2023, there are no shares of Class B common stock issued and outstanding.

We have a share repurchase program which we expect to fund from cash generated from operations, and we expect to make share repurchases from time to time subject to the Company's capital plan, market conditions, and other factors, including regulatory restrictions. The repurchase program may be suspended or discontinued at any time and does not have a specified expiration date. During the three and six months ended June 30, 2023, the Company repurchased and canceled 3.6 million shares of Class A common stock for $99 million, representing an average price per share of $27.66. During the three and six months ended June 30, 2022, the Company repurchased and canceled 6.7 million and 14.8 million shares of Class A common stock for $226 million and $462 million, representing an average price per share of $33.77 and $31.13, respectively. As of June 30, 2023, the Company had authorization remaining to repurchase up to approximately $2.7 billion of its Class A common stock.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 12

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

The following table presents the changes in the number of shares outstanding (in thousands):

			Class A Common Stock						Class B Common Stock
			2023			2022			2023			2022
Balance at January 1			1,005,960			909,142			—			116,548
Issue of shares upon vesting of restricted stock units (1)			5,535			6,057			—			—
Issue of shares on exercises of stock options (1)			203			1,427			—			—
Issue of shares for employee stock purchase plan			959			986			—			—
Exchange of Class B common stock for Class A common stock (2)			—			109,548			—			(109,548)
Repurchase and cancellation of Class A common stock			(3,596)			(14,825)			—			—
Balance at June 30			1,009,061			1,012,335			—			7,000

(1)Share amounts reflected above are net of shares withheld to satisfy the employee's tax withholding obligation.

(2)When shares of Class B common stock, together with associated BHH LLC member units ("LLC Units"), are exchanged for shares of Class A common stock, such shares of Class B common stock are canceled.

ACCUMULATED OTHER COMPREHENSIVE LOSS (AOCL)

The following tables present the changes in accumulated other comprehensive loss, net of tax:

			Investment Securities			Foreign Currency Translation Adjustments			Cash Flow Hedges			Benefit Plans			Accumulated Other Comprehensive Loss
Balance at December 31, 2022			$	—		$	(2,666)		$	(9)		$	(296)		$	(2,971)
Other comprehensive income (loss) before reclassifications			1			168			11			(13)			167
Amounts reclassified from accumulated other comprehensive loss			—			—			2			7			9
Deferred taxes			—			—			(2)			2			—
Other comprehensive income (loss)			1			168			11			(4)			176
Balance at June 30, 2023			$	1		$	(2,498)		$	1		$	(299)		$	(2,795)

						Foreign Currency Translation Adjustments			Cash Flow Hedges			Benefit Plans			Accumulated Other Comprehensive Loss
Balance at December 31, 2021						$	(2,125)		$	(10)		$	(250)		$	(2,385)
Other comprehensive income (loss) before reclassifications						(188)			(1)			27			(162)
Amounts reclassified from accumulated other comprehensive loss						35			2			12			49
Deferred taxes						—			—			(7)			(7)
Other comprehensive income (loss)						(153)			1			32			(120)
Less: Other comprehensive income (loss) attributable to noncontrolling interests						(2)			—			—			(2)
Less: Reallocation of AOCL based on change in ownership of LLC Units						255			1			30			286
Balance at June 30, 2022						$	(2,531)		$	(10)		$	(248)		$	(2,789)

Baker Hughes Company 2023 Second Quarter Form 10-Q | 13

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

The amounts reclassified from accumulated other comprehensive loss during the six months ended June 30, 2023 and 2022 represent (i) gains (losses) reclassified on cash flow hedges when the hedged transaction occurs, (ii) the amortization of net actuarial gain (loss), prior service credit, settlements, and curtailments which are included in the computation of net periodic pension cost, and (iii) the release of foreign currency translation adjustments (see "Note 17. Restructuring, Impairment, and Other" for additional details).

NOTE 11. EARNINGS PER SHARE

Basic and diluted net income per share of Class A common stock is presented below:

			Three Months Ended June 30,						Six Months Ended June 30,
(In millions, except per share amounts)			2023			2022			2023			2022
Net income (loss)			$	414		$	(837)		$	995		$	(757)
Less: Net income attributable to noncontrolling interests			4			2			10			10
Net income (loss) attributable to Baker Hughes Company			$	410		$	(839)		$	985		$	(767)
Weighted average shares outstanding:
Class A basic			1,010			1,001			1,010			970
Class A diluted			1,015			1,001			1,016			970
Net income per share attributable to common stockholders:
Class A basic			$	0.41		$	(0.84)		$	0.98		$	(0.79)
Class A diluted			$	0.40		$	(0.84)		$	0.97		$	(0.79)

Shares of our Class B common stock do not share in earnings or losses of the Company and are not considered in the calculation of basic or diluted earnings per share ("EPS") above. As such, separate presentation of basic and diluted EPS of Class B under the two class method has not been presented. The basic weighted average shares outstanding for our Class B common stock for the three months ended June 30, 2023 and 2022 were nil and 21 million, respectively, and nil and 54 million for the six months ended June 30, 2023 and 2022, respectively. The basic weighted average shares outstanding for both our Class A and Class B common stock combined for the three months ended June 30, 2023 and 2022 were 1,010 million and 1,022 million, respectively, and 1,010 million and 1,024 million for the six months ended June 30, 2023 and 2022, respectively.

For the three and six months ended June 30, 2023, Class A diluted shares include the dilutive impact of equity awards except for approximately 2 million options that were excluded because the exercise price exceeded the average market price of our Class A common stock and is therefore antidilutive. For the three and six months ended June 30, 2022, we excluded all outstanding equity awards from the computation of diluted net loss per share because their effect is antidilutive.

Baker Hughes Company 2023 Second Quarter Form 10-Q | 14

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 12. FINANCIAL INSTRUMENTS

RECURRING FAIR VALUE MEASUREMENTS

Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities.

			June 30, 2023												December 31, 2022
			Level 1			Level 2			Level 3			Net Balance			Level 1			Level 2			Level 3			Net Balance
Assets
Derivatives			$	—		$	27		$	—		$	27		$	—		$	18		$	—		$	18
Investment securities			1,078			—			—			1,078			748			—			—			748
Total assets			1,078			27			—			1,105			748			18			—			766
Liabilities
Derivatives			—			(73)			—			(73)			—			(86)			—			(86)
Total liabilities			$	—		$	(73)		$	—		$	(73)		$	—		$	(86)		$	—		$	(86)

			June 30, 2023												December 31, 2022
			Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Estimated Fair Value			Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Estimated Fair Value
Investment securities (1)
Non-U.S. debt securities (2)			$	33		$	1		$	—		$	34		$	—		$	—		$	—		$	—
Equity securities			534			510			—			1,044			557			191			—			748
Total			$	567		$	511		$	—		$	1,078		$	557		$	191		$	—		$	748

(1)Gains (losses) recorded to earnings related to these securities were $(1) million and $(130) million for the three months ended June 30, 2023 and 2022, respectively, and $391 million and $(118) million for the six months ended June 30, 2023 and 2022.

(2)As of June 30, 2023, our non-U.S. debt securities are classified as available for sale securities and mature within one year.

As of June 30, 2023 and December 31, 2022, the balance of our equity securities with readily determinable fair values were $1,044 million and $748 million, respectively, and are comprised primarily of our investment in ADNOC Drilling and C3.ai, Inc., and are recorded in "All other current assets" in the condensed consolidated statements of financial position. We measured our investments to fair value based on quoted prices in active markets.

Gains (losses) recorded to earnings for our equity securities with readily determinable fair values were $29 million and $(123) million for the three months ended June 30, 2023 and 2022, respectively, and $421 million and $(111) million for the six months ended June 30, 2023 and 2022, respectively. Gains (losses) related to our equity securities with readily determinable fair values are reported in "Other non-operating income (loss), net" in our condensed consolidated statements of income (loss).

OTHER EQUITY INVESTMENTS

As of June 30, 2023 and December 31, 2022, the carrying amount of equity securities without readily determinable fair values was $143 million and $60 million, respectively. During the second quarter of 2023, certain of these equity securities were remeasured to fair value as of the date that an observable transaction occurred. The remeasurement resulted in the Company recording a gain of $118 million. Gains (losses) related to our equity

Baker Hughes Company 2023 Second Quarter Form 10-Q | 15

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

securities without readily determinable fair values are reported in "Other non-operating income (loss), net" in our condensed consolidated statements of income (loss).

FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS

Our financial instruments include cash and cash equivalents, current receivables, certain investments, accounts payable, short and long-term debt, and derivative financial instruments. Except for long-term debt, the estimated fair value of these financial instruments as of June 30, 2023 and December 31, 2022 approximates their carrying value as reflected in our condensed consolidated financial statements. For further information on the fair value of our debt, see "Note 8. Debt."

DERIVATIVES AND HEDGING

We use derivatives to manage our risks and do not use derivatives for speculation. The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives.

			June 30, 2023						December 31, 2022
			Assets			Liabilities			Assets			Liabilities
Derivatives accounted for as hedges
Currency exchange contracts			$	5		$	—		$	1		$	—
Interest rate swap contracts			6			(66)			—			(69)
Derivatives not accounted for as hedges
Currency exchange contracts and other			16			(7)			17			(17)
Total derivatives			$	27		$	(73)		$	18		$	(86)

Derivatives are classified in the condensed consolidated statements of financial position depending on their respective maturity date. As of June 30, 2023 and December 31, 2022, $25 million and $17 million of derivative assets are recorded in "All other current assets" and $2 million and $1 million are recorded in "All other assets" in the condensed consolidated statements of financial position, respectively. As of June 30, 2023 and December 31, 2022, $7 million and $17 million of derivative liabilities are recorded in "All other current liabilities" and $66 million and $69 million are recorded in "All other liabilities" in the condensed consolidated statements of financial position, respectively.

FORMS OF HEDGING

Cash Flow Hedges

We use cash flow hedging primarily to reduce or eliminate the effects of foreign exchange rate changes on purchase and sale contracts. Accordingly, the vast majority of our derivative activity in this category consists of currency exchange contracts. In addition, we are exposed to interest rate risk fluctuations in connection with long-term debt that we issue from time to time to fund our operations. During the six months ended June 30, 2023, the Company executed interest rate swap contracts designated as cash flow hedges with a notional amount of $375 million in order to hedge the Company's expected exposure in connection with refinancing activities we may undertake in 2023. Changes in the fair value of cash flow hedges are recorded in a separate component of equity (referred to as "Accumulated Other Comprehensive Income" or "AOCI") and are recorded in earnings in the period in which the hedged transaction occurs. See "Note 10. Equity" for further information on activity in AOCI for cash flow hedges. As of June 30, 2023 and December 31, 2022, the maximum term of derivative instruments that hedge forecasted transactions was approximately two years and one year, respectively.

Fair Value Hedges

All of our long-term debt is comprised of fixed rate instruments. We are subject to interest rate risk on our debt portfolio and may use interest rate swaps to manage the economic effect of fixed rate obligations associated with

Baker Hughes Company 2023 Second Quarter Form 10-Q | 16

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

certain debt. Under these arrangements, we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount.

As of June 30, 2023 and December 31, 2022, we had interest rate swaps with a notional amount of $500 million that converted a portion of our $1,350 million aggregate principal amount of 3.337% fixed rate Senior Notes due 2027 into a floating rate instrument with an interest rate based on a LIBOR index as a hedge of its exposure to changes in fair value that are attributable to interest rate risk. As of July 1, 2023, the interest rate is based on a Secured Overnight Financing Rate ("SOFR") index. We concluded that the interest rate swap met the criteria necessary to qualify for the short-cut method of hedge accounting, and as such, an assumption is made that the change in the fair value of the hedged debt, due to changes in the benchmark rate, exactly offsets the change in the fair value of the interest rate swaps. Therefore, the derivative is considered to be effective at achieving offsetting changes in the fair value of the hedged liability, and no ineffectiveness is recognized. The mark-to-market of this fair value hedge is recorded as gains or losses in interest expense and is equally offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense.

NOTIONAL AMOUNT OF DERIVATIVES

The notional amount of a derivative is the number of units of the underlying. A substantial majority of the outstanding notional amount of $4.1 billion and $3.8 billion at June 30, 2023 and December 31, 2022, respectively, is related to hedges of anticipated sales and purchases in foreign currency, commodity purchases, changes in interest rates, and contractual terms in contracts that are considered embedded derivatives and for intercompany borrowings in foreign currencies. We generally disclose derivative notional amounts on a gross basis to indicate the total counterparty risk. Where we have gross purchase and sale derivative contracts for a particular currency, we look to execute these contracts with the same counterparty to reduce our exposure. 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.

COUNTERPARTY CREDIT RISK

Fair values of our derivatives can change significantly from period to period based on, among other factors, market movements and changes in our positions. We manage counterparty credit risk (the risk that counterparties will default and not make payments to us according to the terms of our agreements) on an individual counterparty basis.

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Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 13. REVENUE RELATED TO CONTRACTS WITH CUSTOMERS

DISAGGREGATED REVENUE

We disaggregate our OFSE and IET segment revenue from contracts with customers by product line. See "Note 14. Segment Information" for further details.

			Three Months Ended June 30,						Six Months Ended June 30,
Total Revenue			2023			2022			2023			2022
Well Construction			$	1,076		$	936		$	2,137		$	1,819
Completions, Intervention & Measurements			1,090			886			1,999			1,667
Production Solutions			959			866			1,897			1,691
Subsea & Surface Pressure Systems			752			541			1,422			1,070
Oilfield Services & Equipment			3,877			3,230			7,454			6,247
Gas Technology - Equipment			999			556			1,826			1,099
Gas Technology - Services			658			542			1,249			1,123
Total Gas Technology			1,658			1,098			3,075			2,222
Condition Monitoring			154			133			294			259
Inspection			318			257			572			469
Pumps, Valves & Gears			217			194			418			415
PSI & Controls			92			135			216			270
Total Industrial Technology			780			718			1,501			1,413
Industrial & Energy Technology			2,438			1,816			4,576			3,635
Total			$	6,315		$	5,047		$	12,030		$	9,882

In addition, management views OFSE segment revenue from contracts with customers by geographic region:

			Three Months Ended June 30,						Six Months Ended June 30,
Oilfield Services & Equipment Geographic Revenue			2023			2022			2023			2022
North America			$	1,042		$	925		$	2,033		$	1,748
Latin America			698			509			1,358			950
Europe/CIS/Sub-Saharan Africa			672			660			1,253			1,320
Middle East/Asia			1,465			1,136			2,810			2,230
Oilfield Services & Equipment			$	3,877		$	3,230		$	7,454		$	6,247

REMAINING PERFORMANCE OBLIGATIONS

As of June 30, 2023, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $31 billion. As of June 30, 2023, we expect to recognize revenue of approximately 60%, 74% and 90% of the total remaining performance obligations within 2, 5, and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations.

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Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 14. SEGMENT INFORMATION

The Company's segments are determined as those operations whose results are reviewed regularly by the chief operating decision maker ("CODM"), who is our Chief Executive Officer, in deciding how to allocate resources and assess performance. We report our operating results through two operating segments, Oilfield Services & Equipment and Industrial & Energy Technology. Each segment is organized and managed based upon the nature of our markets and customers and consists of similar products and services. These products and services operate across upstream oil and gas and broader energy and industrial markets.

OILFIELD SERVICES & EQUIPMENT ("OFSE")

Oilfield Services & Equipment provides products and services for onshore and offshore oilfield operations across the lifecycle of a well, ranging from exploration, appraisal, and development, to production, rejuvenation, and decommissioning. OFSE is organized into four product lines: Well Construction, which encompasses drilling services, drill bits, and drilling & completions fluids; Completions, Intervention, and Measurements, which encompasses well completions, pressure pumping, and wireline services; Production Solutions, which spans artificial lift systems and oilfield & industrial chemicals; and Subsea & Surface Pressure Systems, which encompasses subsea projects services and drilling systems, surface pressure control, and flexible pipe systems. Beyond its traditional oilfield concentration, OFSE is expanding its capabilities and technology portfolio to meet the challenges of a net-zero future. These efforts include expanding into new energy areas such as geothermal and carbon capture, utilization and storage, strengthening its digital architecture and addressing key energy market themes.

INDUSTRIAL & ENERGY TECHNOLOGY ("IET")

Industrial & Energy Technology provides technology solutions and services for mechanical-drive, compression and power-generation applications across the energy industry, including oil and gas, liquefied natural gas ("LNG") operations, downstream refining and petrochemical markets, as well as lower carbon solutions to broader energy and industrial sectors. IET also provides equipment, software, and services that serve a wide range of industries including petrochemical and refining, nuclear, aviation, automotive, mining, cement, metals, pulp and paper, and food and beverage. IET is organized into six product lines - Gas Technology Equipment and Gas Technology Services, collectively referred to as Gas Technology, and Condition Monitoring, Inspection, Pumps Valves & Gears, and PSI & Controls, collectively referred to as Industrial Technology.

Revenue and operating income for each segment are determined based on the internal performance measures used by the CODM to assess the performance of each segment in a financial period. The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes before the following: net interest expense, net other non-operating income (loss), corporate expenses, restructuring, impairment and other charges, inventory impairments, and certain gains and losses not allocated to the operating segments. Consistent accounting policies have been applied by all segments within the Company, for all reporting periods. Intercompany revenue and expense amounts have been eliminated within each segment to report on the basis that management uses internally for evaluating segment performance.

Summarized financial information for the Company's segments is shown in the following tables.

			Three Months Ended June 30,						Six Months Ended June 30,
Revenue			2023			2022			2023			2022
Oilfield Services & Equipment			$	3,877		$	3,230		$	7,454		$	6,247
Industrial & Energy Technology			2,438			1,816			4,576			3,635
Total			$	6,315		$	5,047		$	12,030		$	9,882

Baker Hughes Company 2023 Second Quarter Form 10-Q | 19

Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

			Three Months Ended June 30,						Six Months Ended June 30,
Income before income taxes			2023			2022			2023			2022
Oilfield Services & Equipment			$	417		$	249		$	789		$	461
Industrial & Energy Technology			311			236			552			476
Total segment			728			485			1,341			938
Corporate			(97)			(108)			(197)			(213)
Inventory impairment			(15)			(31)			(33)			(31)
Restructuring, impairment and other			(102)			(371)			(158)			(441)
Other non-operating income (loss), net			158			(570)			544			(597)
Interest expense, net			(58)			(60)			(122)			(124)
Income before income taxes			$	614		$	(655)		$	1,374		$	(468)

The following table presents depreciation and amortization by segment:

			Three Months Ended June 30,						Six Months Ended June 30,
Depreciation and amortization			2023			2022			2023			2022
Oilfield Services & Equipment			$	219		$	221		$	426		$	443
Industrial & Energy Technology			52			49			109			100
Total segment			271			270			535			542
Corporate			5			5			10			9
Total			$	276		$	275		$	545		$	551

NOTE 15. RELATED PARTY TRANSACTIONS

We have an aeroderivative joint venture ("Aero JV") we formed with General Electric Company ("GE") in 2019. The Aero JV is jointly controlled by GE and us, each with ownership interest of 50%, and therefore, we do not consolidate the JV. We had purchases from the Aero JV of $131 million and $145 million during the three months ended June 30, 2023 and 2022, respectively, and $245 million and $253 million during the six months ended June 30, 2023 and 2022, respectively. We have $61 million and $110 million of accounts payable at June 30, 2023 and December 31, 2022, respectively, for goods and services provided by the Aero JV in the ordinary course of business. Sales of products and services and related receivables with the Aero JV were immaterial for the three and six months ended June 30, 2023 and 2022.

NOTE 16. COMMITMENTS AND CONTINGENCIES

LITIGATION

We are subject to legal proceedings arising in the ordinary course of our business. Because legal proceedings are inherently uncertain, we are unable to predict the ultimate outcome of such matters. We record a liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. Based on the opinion of management, we do not expect the ultimate outcome of currently pending legal proceedings to have a material adverse effect on our results of operations, financial position or cash flows. However, there can be no assurance as to the ultimate outcome of these matters.

On July 31, 2018, International Engineering & Construction S.A. ("IEC") initiated arbitration proceedings in New York administered by the International Center for Dispute Resolution ("ICDR") against the Company and its subsidiaries arising out of a series of sales and service contracts entered between IEC and the Company's subsidiaries for the sale and installation of LNG plants and related power generation equipment in Nigeria ("Contracts"). Prior to the filing of the IEC Arbitration, the Company’s subsidiaries made demands for payment due under the Contracts. On August 15, 2018, the Company's subsidiaries initiated a separate demand for ICDR arbitration against IEC for claims of additional costs and amounts due under the Contracts. On October 10, 2018,

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Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

IEC filed a Petition to Compel Arbitration in the United States District Court for the Southern District of New York against the Company seeking to compel non-signatory Baker Hughes entities to participate in the arbitration filed by IEC. The complaint is captioned International Engineering & Construction S.A. et al. v. Baker Hughes, a GE company, LLC, et al. No. 18-cv-09241 ("S.D.N.Y 2018"); this action was dismissed by the Court on August 13, 2019. In the arbitration, IEC alleges breach of contract and other claims against the Company and its subsidiaries and seeks recovery of alleged compensatory damages, in addition to reasonable attorneys' fees, expenses and arbitration costs. On March 15, 2019, IEC amended its request for arbitration to alleged damages of $591 million of lost profits plus unspecified additional costs based on alleged non-performance of the contracts in dispute. The arbitration hearing was held from December 9, 2019 to December 20, 2019. On March 3, 2020, IEC amended their damages claim to $700 million of alleged loss cash flow or, in the alternative, $244.9 million of lost profits and various costs based on alleged non-performance of the contracts in dispute, and in addition $4.8 million of liquidated damages, $58.6 million in take-or-pay costs of feed gas, and unspecified additional costs of rectification and take-or-pay future obligations, plus unspecified interest and attorneys' fees. On May 3, 2020, the arbitration panel dismissed IEC's request for take-or-pay damages. On May 29, 2020, IEC quantified their claim for legal fees at $14.2 million and reduced their alternative claim from $244.9 million to approximately $235 million. The Company and its subsidiaries have contested IEC's claims and are pursuing claims for compensation under the contracts. On October 31, 2020, the ICDR notified the arbitration panel's final award, which dismissed the majority of IEC's claims and awarded a portion of the Company's claims. On January 27, 2021, IEC filed a petition to vacate the arbitral award in the Supreme Court of New York, County of New York. On March 5, 2021, the Company filed a petition to confirm the arbitral award, and on March 8, 2021, the Company removed the matter to the United States District Court for the Southern District of New York. On November 16, 2021, the court granted the Company's petition to confirm the award and denied IEC's petition to vacate. During the second quarter of 2022, IEC paid the amounts owed under the arbitration award, which had an immaterial impact on the Company's financial statements. On February 3, 2022, IEC initiated another arbitration proceeding in New York administered by the ICDR against certain of the Company's subsidiaries arising out of the same project which formed the basis of the first arbitration. On March 25, 2022, the Company's subsidiaries initiated a separate demand for ICDR arbitration against IEC for claims of additional costs and amounts due; such claims against IEC have now been resolved, with any consideration having an immaterial impact on the Company's financial statements. At this time, we are not able to predict the outcome of the proceeding which is pending against the Company's subsidiaries.

On March 15, 2019 and March 18, 2019, the City of Riviera Beach Pension Fund and Richard Schippnick, respectively, filed in the Delaware Court of Chancery shareholder derivative lawsuits for and on the Company's behalf against GE, the then-current members of the Board of Directors of the Company and the Company as a nominal defendant, related to the decision to (i) terminate the contractual prohibition barring GE from selling any of the Company's shares before July 3, 2019; (ii) repurchase $1.5 billion in the Company's stock from GE; (iii) permit GE to sell approximately $2.5 billion in the Company's stock through a secondary offering; and (iv) enter into a series of other agreements and amendments that will govern the ongoing relationship between the Company and GE (collectively, the "2018 Transactions"). The complaints in both lawsuits allege, among other things, that GE, as the Company's controlling stockholder, and the members of the Company's Board of Directors breached their fiduciary duties by entering into the 2018 Transactions. The relief sought in the complaints includes a request for a declaration that the defendants breached their fiduciary duties, that GE was unjustly enriched, disgorgement of profits, an award of damages sustained by the Company, pre- and post-judgment interest, and attorneys' fees and costs. On March 21, 2019, the Chancery Court entered an order consolidating the Schippnick and City of Riviera Beach complaints under consolidated C.A. No. 2019-0201-AGB, styled in re Baker Hughes, a GE company derivative litigation. On May 10, 2019, Plaintiffs voluntarily dismissed their claims against the members of the Company's Conflicts Committee, and on May 15, 2019, Plaintiffs voluntarily dismissed their claims against former Baker Hughes director Martin Craighead. On June 7, 2019, the defendants and nominal defendant filed a motion to dismiss the lawsuit on the ground that the derivative plaintiffs failed to make a demand on the Company's Board of Directors to pursue the claims itself, and GE and the Company's Board of Directors filed a motion to dismiss the lawsuit on the ground that the complaint failed to state a claim on which relief can be granted. The Chancery Court denied the motions on October 8, 2019, except granted GE's motion to dismiss the unjust enrichment claim against it. On October 31, 2019, the Company's Board of Directors designated a Special Litigation Committee and empowered it with full authority to investigate and evaluate the allegations and issues raised in the derivative litigation. The Special Litigation Committee filed a motion to stay the derivative litigation during its investigation. On December 3, 2019, the Chancery Court granted the motion and stayed the derivative litigation until June 1, 2020. On May 20, 2020, the Chancery Court granted an extension of the stay to October 1, 2020, and on September 29,

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Notes to Unaudited Condensed Consolidated Financial Statements

2020, the Court granted a further extension of the stay to October 15, 2020. On October 13, 2020, the Special Litigation Committee filed its report with the Court. On April 17, 2023, the Court granted the Special Litigation Committee's motion to terminate the litigation. On May 16, 2023, the plaintiffs filed a notice of appeal. At this time, we are not able to predict the outcome of these proceedings.

On August 13, 2019, Tri-State Joint Fund filed in the Delaware Court of Chancery, a shareholder class action lawsuit for and on the behalf of itself and all similarly situated public stockholders of Baker Hughes Incorporated ("BHI") against the General Electric Company ("GE"), the former members of the Board of Directors of BHI, and certain former BHI Officers alleging breaches of fiduciary duty, aiding and abetting, and other claims in connection with the combination of BHI and the oil and gas business ("GE O&G") of GE ("the Transactions"). On October 28, 2019, City of Providence filed in the Delaware Court of Chancery a shareholder class action lawsuit for and on behalf of itself and all similarly situated public shareholders of BHI against GE, the former members of the Board of Directors of BHI, and certain former BHI Officers alleging substantially the same claims in connection with the Transactions. The relief sought in these complaints include a request for a declaration that Defendants breached their fiduciary duties, an award of damages, pre- and post-judgment interest, and attorneys' fees and costs. The lawsuits have been consolidated, and plaintiffs filed a consolidated class action complaint on December 17, 2019 against certain former BHI officers alleging breaches of fiduciary duty and against GE for aiding and abetting those breaches. The December 2019 complaint omitted the former members of the Board of Directors of BHI, except for Mr. Craighead who also served as President and CEO of BHI. Mr. Craighead and Ms. Ross, who served as Senior Vice President and Chief Financial Officer of BHI, remain named in the December 2019 complaint along with GE. The relief sought in the consolidated complaint includes a declaration that the former BHI officers breached their fiduciary duties and that GE aided and abetted those breaches, an award of damages, pre- and post-judgment interest, and attorneys' fees and costs. On or around February 12, 2020, the defendants filed motions to dismiss the lawsuit on the grounds that the complaint failed to state a claim on which relief could be granted. On or around October 27, 2020, the Chancery Court granted GE's motion to dismiss, and granted in part the motion to dismiss filed by Mr. Craighead and Ms. Ross, thereby dismissing all of the claims against GE and Ms. Ross, and all but one of the claims against Mr. Craighead. On May 2, 2023, a stipulation of dismissal, disposing of the plaintiffs' remaining claims, was granted by the Court.

On or around February 15, 2023, the lead plaintiff and three additional named plaintiffs in a putative securities class action styled The Reckstin Family Trust, et al., v. C3.ai, Inc., et al., No. 4:22-cv-01413-HSG, filed an amended class action complaint (the "Amended Complaint") in the United States District Court for the Northern District of California. The Amended Complaint names the following as defendants: (i) C3.ai., Inc. ("C3 AI"), (ii) certain of C3 AI's current and/or former officers and directors, (iii) certain underwriters for the C3 AI initial public offering (the "IPO"), and (iv) the Company, and its President and CEO (who formerly served as a director on the board of C3 AI). The Amended Complaint alleges violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 (the "Exchange Act") in connection with the IPO and the subsequent period between December 9, 2020 and December 2, 2021, during which BHH LLC held equity investments in C3 AI. The action seeks unspecified damages and the award of costs and expenses, including reasonable attorneys' fees. At this time, we are not able to predict the outcome of these proceedings.

We insure against risks arising from our business to the extent deemed prudent by our management and to the extent insurance is available, but no assurance can be given that the nature and amount of that insurance will be sufficient to fully indemnify us against liabilities arising out of pending or future legal proceedings or other claims. Most of our insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability, general liability and workers compensation.

OTHER

In the normal course of business with customers, vendors and others, we have entered into off-balance sheet arrangements, such as surety bonds for performance, letters of credit and other bank issued guarantees. We also provide a guarantee to GE Capital on behalf of a customer who entered into a financing arrangement with GE Capital. Total off-balance sheet arrangements were approximately $5 billion at June 30, 2023. It is not practicable to estimate the fair value of these financial instruments. As of June 30, 2023, none of the off-balance sheet

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Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

arrangements either has, or is likely to have, a material effect on our financial position, results of operations or cash flows.

We sometimes enter into consortium or similar arrangements for certain projects primarily in our OFSE segment. Under such arrangements, each party is responsible for performing a certain scope of work within the total scope of the contracted work, and the obligations expire when all contractual obligations are completed. The failure or inability, financially or otherwise, of any of the parties to perform their obligations could impose additional costs and obligations on us. These factors could result in unanticipated costs to complete the project, liquidated damages or contract disputes.

NOTE 17. RESTRUCTURING, IMPAIRMENT AND OTHER

We recorded restructuring, impairment and other charges of $102 million and $158 million during the three and six months ended June 30, 2023, respectively, and $371 million and $441 million during the three and six months ended June 30, 2022, respectively.

RESTRUCTURING AND IMPAIRMENT CHARGES

We recorded restructuring and impairment charges of $96 million and $152 million for the three and six months ended June 30, 2023, respectively. In the third quarter of 2022, we announced a restructuring plan in conjunction with a change in our operating segments that was effective October 1, 2022 (the "2022 Plan"). As a result, we continued to incur charges in the second quarter of 2023 related to the 2022 Plan primarily for employee termination expenses driven by actions taken by the Company to facilitate the reorganization into two segments and corporate restructuring. In addition, under a new plan (the "2023 Plan") we incurred costs related to exit activities at specific locations in our segments to align with our current market outlook and rationalize our manufacturing supply chain footprint. These actions also included inventory impairments of $15 million and $33 million for the three and six months ended June 30, 2023, respectively, recorded in "Cost of goods sold" in our condensed consolidated statements of income (loss). We expect to incur additional restructuring charges of approximately $45 million in the second half of 2023 related to these plans, and currently expect these plans to be substantially completed by the end of 2023.

The following table presents restructuring and impairment charges by the impacted segment, however, these charges are not included in the reported segment results:

			Three Months Ended June 30,						Six Months Ended June 30,
Segments			2023			2022			2023			2022
Oilfield Services & Equipment			$	26		$	16		$	41		$	18
Industrial & Energy Technology			52			4			66			3
Corporate			17			5			45			8
Total			$	96		$	25		$	152		$	29

The following table presents restructuring and impairment charges by type, and includes gains on the dispositions of certain property, plant and equipment ("PP&E") previously impaired as a consequence of exit activities:

			Three Months Ended June 30,						Six Months Ended June 30,
Charges by Type			2023			2022			2023			2022
Property, plant & equipment, net			$	(1)		$	3		$	14		$	(6)
Employee-related termination costs			80			21			110			29
Other incremental costs			17			1			28			6
Total			$	96		$	25		$	152		$	29

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Baker Hughes Company

Notes to Unaudited Condensed Consolidated Financial Statements

OTHER CHARGES

We recorded other charges of $6 million for the three and six months ended June 30, 2023, respectively, and $346 million and $412 million for the three and six months ended June 30, 2022.

Other charges for the three and six months ended June 30, 2022 were primarily associated with the discontinuation of our Russia operations. As a result of the ongoing conflict between Russia and Ukraine, we took actions to suspend substantially all of our operational activities related to Russia. These actions resulted in other charges of $334 million, primarily associated with the suspension of contracts including all our IET LNG contracts, and the impairment of assets consisting primarily of contract assets, PP&E and reserve for accounts receivable. In addition to these charges, we recorded inventory impairments of $31 million primarily in IET as part of suspending our Russia operations, which were reported in the “Cost of goods sold” caption in the consolidated condensed statement of income (loss). The 2022 charges also include a write-off of an equity method investment, the release of foreign currency translation adjustments for certain restructured product lines, and separation related costs.

NOTE 18. BUSINESS ACQUISITIONS AND DISPOSITIONS

ACQUISITIONS

During the first six months of 2023, we completed the acquisition of businesses for total cash consideration of $282 million, net of cash acquired, which consisted primarily of the acquisition of Altus Intervention in the OFSE segment in April 2023. Altus Intervention is a leading international provider of well intervention services and downhole technology. The assets acquired and liabilities assumed in these acquisitions were recorded based on preliminary estimates of their fair values as of the acquisition date. As a result of these acquisitions, we recorded $113 million of goodwill and $31 million of intangible assets, subject to final fair value adjustments. Pro forma results of operations for these acquisitions have not been presented because the effects of these acquisitions were not material to our consolidated financial statements.

DISPOSITIONS

During the first six months of 2023, we completed the sale of businesses and received total cash consideration of $293 million. The dispositions consisted primarily of the sale of our Nexus Controls business in the IET segment to GE in April 2023, which resulted in an immaterial gain. Nexus Controls specializes in scalable industrial controls systems, safety systems, hardware, and software cybersecurity solutions and services. GE will continue to provide Baker Hughes with GE's MarkTM controls products currently in the Nexus Controls portfolio, and we will be the exclusive supplier and service provider of such GE products for our oil and gas customers' control needs.

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