filings.toolsItem 1. FINANCIAL STATEMENTS (UNAUDITED)
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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) | 2025 | 2024 | 2025 | 2024 | ||||||||||
| Revenue: | ||||||||||||||
| Sales of goods | $ | 4,516 | $ | 4,552 | $ | 8,660 | $ | 8,550 | ||||||
| Sales of services | 2,394 | 2,587 | 4,677 | 5,007 | ||||||||||
| Total revenue | 6,910 | 7,139 | 13,337 | 13,557 | ||||||||||
| Costs and expenses: | ||||||||||||||
| Cost of goods sold | 3,602 | 3,657 | 6,932 | 6,933 | ||||||||||
| Cost of services sold | 1,693 | 1,836 | 3,315 | 3,536 | ||||||||||
| Selling, general and administrative | 567 | 643 | 1,144 | 1,261 | ||||||||||
| Research and development costs | 161 | 158 | 307 | 322 | ||||||||||
| Other (income) expense, net | (134) | (26) | 6 | (48) | ||||||||||
| Interest expense, net | 54 | 47 | 105 | 88 | ||||||||||
| Income before income taxes | 967 | 824 | 1,528 | 1,465 | ||||||||||
| Provision for income taxes | (256) | (243) | (408) | (421) | ||||||||||
| Net income | 711 | 581 | 1,120 | 1,044 | ||||||||||
| Less: Net income attributable to noncontrolling interests | 10 | 2 | 17 | 10 | ||||||||||
| Net income attributable to Baker Hughes Company | $ | 701 | $ | 579 | $ | 1,103 | $ | 1,034 | ||||||
| Per share amounts: | ||||||||||||||
| Basic income per Class A common stock | $ | 0.71 | $ | 0.58 | $ | 1.11 | $ | 1.04 | ||||||
| Diluted income per Class A common stock | $ | 0.71 | $ | 0.58 | $ | 1.11 | $ | 1.03 | ||||||
| Cash dividend per Class A common stock | $ | 0.23 | $ | 0.21 | $ | 0.46 | $ | 0.42 |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2025 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) | 2025 | 2024 | 2025 | 2024 | ||||||||||
| Net income | $ | 711 | $ | 581 | $ | 1,120 | $ | 1,044 | ||||||
| Less: Net income attributable to noncontrolling interests | 10 | 2 | 17 | 10 | ||||||||||
| Net income attributable to Baker Hughes Company | 701 | 579 | 1,103 | 1,034 | ||||||||||
| Other comprehensive income (loss): | ||||||||||||||
| Foreign currency translation adjustments | 325 | (128) | 513 | (192) | ||||||||||
| Cash flow hedges | 1 | (4) | 3 | (2) | ||||||||||
| Benefit plans | (8) | 6 | (7) | 9 | ||||||||||
| Other comprehensive income (loss) | 318 | (126) | 509 | (185) | ||||||||||
| Less: Other comprehensive income attributable to noncontrolling interests | 1 | — | 1 | — | ||||||||||
| Other comprehensive income (loss) attributable to Baker Hughes Company | 317 | (126) | 508 | (185) | ||||||||||
| Comprehensive income | 1,029 | 455 | 1,629 | 859 | ||||||||||
| Less: Comprehensive income attributable to noncontrolling interests | 11 | 2 | 18 | 10 | ||||||||||
| Comprehensive income attributable to Baker Hughes Company | $ | 1,018 | $ | 453 | $ | 1,611 | $ | 849 |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 2
Baker Hughes Company
Condensed Consolidated Statements of Financial Position
(Unaudited)
| (In millions, except par value) | June 30, 2025 | December 31, 2024 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,087 | $ | 3,364 | ||||
| Current receivables, net | 6,511 | 7,122 | ||||||
| Inventories, net | 5,105 | 4,954 | ||||||
| All other current assets | 2,915 | 1,771 | ||||||
| Total current assets | 17,618 | 17,211 | ||||||
| Property, plant and equipment (net of accumulated depreciation of $6,367 and $6,056) | 5,176 | 5,127 | ||||||
| Goodwill | 5,801 | 6,078 | ||||||
| Other intangible assets, net | 3,919 | 3,951 | ||||||
| Contract and other deferred assets | 1,841 | 1,730 | ||||||
| Deferred income tax assets | 1,371 | 1,284 | ||||||
| All other assets | 3,014 | 2,982 | ||||||
| Total assets | $ | 38,740 | $ | 38,363 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,340 | $ | 4,542 | ||||
| Short-term debt | 66 | 53 | ||||||
| Progress collections and deferred income | 5,680 | 5,672 | ||||||
| All other current liabilities | 2,429 | 2,724 | ||||||
| Total current liabilities | 12,515 | 12,991 | ||||||
| Long-term debt | 5,968 | 5,970 | ||||||
| Liabilities for pensions and other postretirement benefits | 997 | 988 | ||||||
| Deferred income tax liabilities | 106 | 83 | ||||||
| All other liabilities | 1,286 | 1,276 | ||||||
| Equity: | ||||||||
| Class A Common Stock, $0.0001 par value - 2,000 authorized, 985 and 990 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | — | — | ||||||
| Capital in excess of par value | 25,087 | 25,896 | ||||||
| Retained loss | (4,737) | (5,840) | ||||||
| Accumulated other comprehensive loss | (2,653) | (3,161) | ||||||
| Baker Hughes Company equity | 17,697 | 16,895 | ||||||
| Noncontrolling interests | 171 | 160 | ||||||
| Total equity | 17,868 | 17,055 | ||||||
| Total liabilities and equity | $ | 38,740 | $ | 38,363 |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2025 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 Common Stock | Capital in Excess of Par Value | Retained Loss | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | ||||||||||||||
| Balance at December 31, 2024 | $ | — | $ | 25,896 | $ | (5,840) | $ | (3,161) | $ | 160 | $ | 17,055 | ||||||||
| Comprehensive income: | ||||||||||||||||||||
| Net income | 1,103 | 17 | 1,120 | |||||||||||||||||
| Other comprehensive income | 508 | 1 | 509 | |||||||||||||||||
| Dividends on Class A common stock ($0.46 per share) | (456) | (456) | ||||||||||||||||||
| Repurchase and cancellation of Class A common stock | (384) | (384) | ||||||||||||||||||
| Stock-based compensation cost | 102 | 102 | ||||||||||||||||||
| Other | (71) | (7) | (78) | |||||||||||||||||
| Balance at June 30, 2025 | $ | — | $ | 25,087 | $ | (4,737) | $ | (2,653) | $ | 171 | $ | 17,868 |
| (In millions, except per share amounts) | Class A Common Stock | Capital in Excess of Par Value | Retained Loss | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | ||||||||||||||
| Balance at March 31, 2025 | $ | — | $ | 25,450 | $ | (5,438) | $ | (2,970) | $ | 164 | $ | 17,206 | ||||||||
| Comprehensive income: | ||||||||||||||||||||
| Net income | 701 | 10 | 711 | |||||||||||||||||
| Other comprehensive income | 317 | 1 | 318 | |||||||||||||||||
| Dividends on Class A common stock ($0.23 per share) | (227) | (227) | ||||||||||||||||||
| Repurchase and cancellation of Class A common stock | (196) | (196) | ||||||||||||||||||
| Stock-based compensation cost | 52 | 52 | ||||||||||||||||||
| Other | 8 | (4) | 4 | |||||||||||||||||
| Balance at June 30, 2025 | $ | — | $ | 25,087 | $ | (4,737) | $ | (2,653) | $ | 171 | $ | 17,868 |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2025 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 Common Stock | Capital in Excess of Par Value | Retained Loss | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | ||||||||||||||
| Balance at December 31, 2023 | $ | — | $ | 26,983 | $ | (8,819) | $ | (2,796) | $ | 151 | $ | 15,519 | ||||||||
| Comprehensive income (loss): | ||||||||||||||||||||
| Net income | 1,034 | 10 | 1,044 | |||||||||||||||||
| Other comprehensive loss | (185) | (185) | ||||||||||||||||||
| Dividends on Class A common stock ($0.42 per share) | (419) | (419) | ||||||||||||||||||
| Repurchase and cancellation of Class A common stock | (324) | (324) | ||||||||||||||||||
| Stock-based compensation cost | 101 | 101 | ||||||||||||||||||
| Other | (1) | (14) | (15) | |||||||||||||||||
| Balance at June 30, 2024 | $ | — | $ | 26,340 | $ | (7,785) | $ | (2,981) | $ | 147 | $ | 15,721 |
| (In millions, except per share amounts) | Class A Common Stock | Capital in Excess of Par Value | Retained Loss | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | ||||||||||||||
| Balance at March 31, 2024 | $ | — | $ | 26,610 | $ | (8,364) | $ | (2,855) | $ | 159 | $ | 15,550 | ||||||||
| Comprehensive income (loss): | ||||||||||||||||||||
| Net income | 579 | 2 | 581 | |||||||||||||||||
| Other comprehensive loss | (126) | (126) | ||||||||||||||||||
| Dividends on Class A common stock ($0.21 per share) | (209) | (209) | ||||||||||||||||||
| Repurchase and cancellation of Class A common stock | (166) | (166) | ||||||||||||||||||
| Stock-based compensation cost | 50 | 50 | ||||||||||||||||||
| Other | 55 | (14) | 41 | |||||||||||||||||
| Balance at June 30, 2024 | $ | — | $ | 26,340 | $ | (7,785) | $ | (2,981) | $ | 147 | $ | 15,721 |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 5
Baker Hughes Company
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 1,120 | $ | 1,044 | ||||
| Adjustments to reconcile net income to net cash flows from operating activities: | ||||||||
| Depreciation and amortization | 579 | 566 | ||||||
| Change in fair value of equity securities | 21 | (71) | ||||||
| Stock-based compensation cost | 102 | 101 | ||||||
| (Benefit) provision for deferred income taxes | (17) | 33 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Current receivables | 532 | (5) | ||||||
| Inventories | (92) | (124) | ||||||
| Accounts payable | (153) | 227 | ||||||
| Progress collections and deferred income | (258) | 17 | ||||||
| Contract and other deferred assets | 69 | (151) | ||||||
| Other operating items, net | (684) | (505) | ||||||
| Net cash flows provided by operating activities | 1,219 | 1,132 | ||||||
| Cash flows from investing activities: | ||||||||
| Expenditures for capital assets | (601) | (625) | ||||||
| Proceeds from disposal of assets | 74 | 101 | ||||||
| Other investing items, net | (69) | (6) | ||||||
| Net cash flows used in investing activities | (596) | (530) | ||||||
| Cash flows from financing activities: | ||||||||
| Repayment of long-term debt | — | (125) | ||||||
| Dividends paid | (456) | (419) | ||||||
| Repurchase of Class A common stock | (384) | (324) | ||||||
| Other financing items, net | (105) | (61) | ||||||
| Net cash flows used in financing activities | (945) | (929) | ||||||
| Effect of currency exchange rate changes on cash and cash equivalents | 45 | (35) | ||||||
| Decrease in cash and cash equivalents | (277) | (362) | ||||||
| Cash and cash equivalents, beginning of period | 3,364 | 2,646 | ||||||
| Cash and cash equivalents, end of period | $ | 3,087 | $ | 2,284 | ||||
| Supplemental cash flows disclosures: | ||||||||
| Income taxes paid, net of refunds | $ | 418 | $ | 336 | ||||
| Interest paid | $ | 148 | $ | 150 |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2025 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.
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 pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, certain information and disclosures normally included in the Company's annual financial statements have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 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 the 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, the Company's financial statements consolidate all of its subsidiaries (entities in which the Company has a controlling financial interest, most often because the Company holds 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 with 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 the financial statements and notes thereto may not add due to the use of rounded numbers.
In the first quarter of 2025, the Company announced a presentation change to the statements of income (loss). Under the new presentation, research and development costs and other (income) expense, net are reported as separate financial statement line items, with certain expense amounts being reclassified thereto, and the operating income and non-operating income (loss) line items have been removed from the condensed consolidated statements of income (loss). This reporting change accompanied a change in the internal financial information regularly provided to the Company's chief operating decision maker ("CODM") to evaluate the performance of and allocate resources to the Company's reportable segments as further discussed in "Note 14. Segment Information."
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Please refer to "Note 1. Basis of Presentation and Summary of Significant Accounting Policies" of the Notes to the consolidated financial statements from the Company's 2024 Annual Report for the discussion of significant accounting policies.
Supply Chain Finance Programs
As of June 30, 2025 and December 31, 2024, $384 million and $411 million of supply chain finance program liabilities are recorded in "Accounts payable" in the condensed consolidated statements of financial position, respectively, and reflected in net cash flows from operating activities in the condensed consolidated statements of cash flows when settled.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 7
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NEW ACCOUNTING STANDARDS TO BE ADOPTED
In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"), which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09, which allows for early adoption, is effective for the Company prospectively for all annual periods beginning after December 15, 2024. This is expected to result in expanded tax disclosures in the annual financial statements for the year ended December 31, 2025.
In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures" ("ASU 2024-03"), which enhances the disclosures required for certain expense captions in the Company's annual and interim consolidated financial statements. ASU 2024-03 is effective prospectively or retrospectively for fiscal years beginning after December 15, 2026 and for interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its disclosures.
All other 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 the Company's financial position or results of operations.
NOTE 2. CURRENT RECEIVABLES
Current receivables consist of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Customer receivables | $ | 5,434 | $ | 5,945 | ||||
| Other | 1,330 | 1,409 | ||||||
| Total current receivables | 6,764 | 7,354 | ||||||
| Less: Allowance for credit losses | (253) | (232) | ||||||
| Total current receivables, net | $ | 6,511 | $ | 7,122 |
Customer receivables are recorded at the invoiced amount. The "Other" category consists primarily of advance payments to suppliers and indirect taxes.
The Company's customer receivables are spread over a broad and diverse group of customers across many countries. As of June 30, 2025, 17% of the Company's gross customer receivables were from customers in the U.S. As of December 31, 2024, 16% of the Company's gross customer receivables were from customers in the U.S. and 10% were from customers in Mexico. No other country accounted for more than 10% of the Company's gross customer receivables at these dates.
NOTE 3. INVENTORIES
Inventories, net of reserves of $384 million and $390 million as of June 30, 2025 and December 31, 2024, respectively, consist of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Finished goods | $ | 2,462 | $ | 2,494 | ||||
| Work in process and raw materials | 2,643 | 2,460 | ||||||
| Total inventories, net | $ | 5,105 | $ | 4,954 |
Baker Hughes Company 2025 Second Quarter Form 10-Q | 8
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 4. OTHER INTANGIBLE ASSETS
Intangible assets consist of the following:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||
| Customer relationships | $ | 1,935 | $ | (940) | $ | 995 | $ | 1,921 | $ | (883) | $ | 1,038 | ||||||||
| Technology | 1,210 | (966) | 244 | 1,248 | (981) | 267 | ||||||||||||||
| Trade names and trademarks | 292 | (203) | 89 | 290 | (196) | 94 | ||||||||||||||
| Capitalized software | 1,584 | (1,200) | 384 | 1,522 | (1,172) | 350 | ||||||||||||||
| Finite-lived intangible assets | 5,021 | (3,309) | 1,712 | 4,981 | (3,232) | 1,749 | ||||||||||||||
| Indefinite-lived intangible assets | 2,207 | — | 2,207 | 2,202 | — | 2,202 | ||||||||||||||
| Total intangible assets | $ | 7,228 | $ | (3,309) | $ | 3,919 | $ | 7,183 | $ | (3,232) | $ | 3,951 |
Amortization expense for the three months ended June 30, 2025 and 2024 was $68 million and $66 million, respectively, and $134 million and $133 million for the six months ended June 30, 2025 and 2024, respectively.
Estimated amortization expense for the remainder of 2025 and each of the subsequent five fiscal years is expected to be as follows:
| Year | Estimated Amortization Expense | ||||
| Remainder of 2025 | $ | 112 | |||
| 2026 | 209 | ||||
| 2027 | 181 | ||||
| 2028 | 161 | ||||
| 2029 | 132 | ||||
| 2030 | 104 |
NOTE 5. CONTRACT AND OTHER DEFERRED ASSETS
Contract assets reflect revenue earned in excess of billings on 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. The Company's long-term product service agreements are provided by the Industrial & Energy Technology ("IET") segment. The Company's long-term equipment contracts are provided by both the IET and Oilfield Services & Equipment ("OFSE") segments. Contract assets consist of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Long-term product service agreements | $ | 350 | $ | 346 | ||||
| Long-term equipment contracts and certain other service agreements | 1,344 | 1,247 | ||||||
| Contract assets (total revenue in excess of billings) | 1,694 | 1,593 | ||||||
| Deferred inventory costs | 133 | 124 | ||||||
| Other costs to fulfill or obtain a contract | 14 | 13 | ||||||
| Contract and other deferred assets | $ | 1,841 | $ | 1,730 |
Baker Hughes Company 2025 Second Quarter Form 10-Q | 9
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
Revenue recognized during the three months ended June 30, 2025 and 2024 from performance obligations satisfied (or partially satisfied) in previous periods related to long-term service agreements was $5 million and $(3) million, respectively, and $9 million and $(4) million during the six months ended June 30, 2025 and 2024, respectively. This includes revenue recognized from revisions to cost or billing estimates that may affect a contract's total estimated profitability.
NOTE 6. PROGRESS COLLECTIONS AND DEFERRED INCOME
Contract liabilities include progress collections, which reflects billings in excess of revenue, and deferred income on long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements. Contract liabilities consist of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Progress collections | $ | 5,549 | $ | 5,550 | ||||
| Deferred income | 131 | 122 | ||||||
| Progress collections and deferred income (contract liabilities) | $ | 5,680 | $ | 5,672 |
Revenue recognized during the three months ended June 30, 2025 and 2024 that was included in the contract liabilities at the beginning of the period was $1,373 million and $1,392 million, respectively, and $2,919 million and $2,868 million during the six months ended June 30, 2025 and 2024, respectively.
NOTE 7. LEASES
The Company's leasing activities primarily consist of operating leases for service centers, manufacturing facilities, sales and administrative offices, and certain equipment.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| Operating Lease Expense | 2025 | 2024 | 2025 | 2024 | ||||||||||
| Short-term lease | $ | 118 | $ | 129 | $ | 237 | $ | 270 | ||||||
| Long-term fixed lease | 69 | 73 | 138 | 146 | ||||||||||
| Long-term variable lease | 14 | 21 | 31 | 45 | ||||||||||
| Total operating lease expense | $ | 201 | $ | 223 | $ | 406 | $ | 461 |
Cash flows used in operating activities for operating leases approximate lease expense for the three and six months ended June 30, 2025 and 2024.
The weighted-average remaining lease term as of June 30, 2025 and December 31, 2024 was approximately eight years and seven years for operating leases, respectively. The weighted-average discount rate used to determine the operating lease liability as of June 30, 2025 and December 31, 2024 was 4.5% and 4.3%, respectively.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 10
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 8. DEBT
The carrying value of the Company's short-term and long-term debt consists of the following:
| June 30, 2025 | December 31, 2024 | |||||||
| Short-term debt | ||||||||
| Other debt | $ | 66 | $ | 53 | ||||
| Total short-term debt | 66 | 53 | ||||||
| Long-term debt | ||||||||
| 2.061% Senior Notes due December 2026 | 599 | 599 | ||||||
| 3.337% Senior Notes due December 2027 | 1,316 | 1,302 | ||||||
| 6.875% Notes due January 2029 | 259 | 262 | ||||||
| 3.138% Senior Notes due November 2029 | 523 | 523 | ||||||
| 4.486% Senior Notes due May 2030 | 498 | 498 | ||||||
| 5.125% Senior Notes due September 2040 | 1,272 | 1,275 | ||||||
| 4.080% Senior Notes due December 2047 | 1,338 | 1,338 | ||||||
| Other long-term debt | 163 | 173 | ||||||
| Total long-term debt | 5,968 | 5,970 | ||||||
| Total debt | $ | 6,034 | $ | 6,023 |
The estimated fair value of total debt at June 30, 2025 and December 31, 2024 was $5,629 million and $5,409 million, respectively. For a majority of the Company's debt, the fair value was determined using quoted period-end market prices. Where market prices are not available, the Company estimates fair values based on valuation methodologies using current market interest rate data adjusted for non-performance risk.
The Company has a $3.0 billion committed unsecured revolving credit facility (the "Credit Agreement") with commercial banks maturing in November 2028. The Credit Agreement contains certain representations and warranties, certain affirmative covenants and negative covenants, in each case considered customary. No related events of default have occurred. The Credit Agreement is fully and unconditionally guaranteed on a senior unsecured basis by Baker Hughes. At June 30, 2025 and December 31, 2024, there were no borrowings under the Credit Agreement.
Baker Hughes Co-Obligor, Inc. is a co-obligor, jointly and severally with Baker Hughes Holdings LLC ("BHH LLC") on the Company's 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 long-term debt securities and has no assets or operations other than those related to its sole purpose. As of June 30, 2025, Baker Hughes Co-Obligor, Inc. is a co-obligor of certain debt securities totaling $5.8 billion.
Certain Senior Notes contain covenants that restrict the Company's 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, 2025, the Company was in compliance with all debt covenants.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 11
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 9. INCOME TAXES
For the three and six months ended June 30, 2025, the provision for income taxes was $256 million and $408 million, respectively. For the three and six months ended June 30, 2024, the provision for income taxes was $243 million and $421 million, respectively. The difference between the U.S. statutory tax rate of 21% and the effective tax rate in both periods is primarily related to income generated in jurisdictions with tax rates higher than in the U.S. and losses with no tax benefit due to valuation allowances. Further, for the period ending June 30, 2024, this impact is partially offset by income subject to U.S. tax at an effective rate less than 21% due to valuation allowances, which were subsequently released later in 2024.
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA preserves the 21% U.S. Federal statutory tax rate and makes a favorable change to the business interest expense limitation. Further, the OBBBA also makes key elements of the Tax Cuts and Jobs Act permanent, including 100% bonus depreciation, domestic research cost expensing, and various expiring international provisions (with some modifications). Pursuant to ASC 740, changes in tax rates and tax law are required to be recognized in the period in which the legislation is enacted. As such, the Company will continue to evaluate the impact of this legislation over the coming months and will include any necessary adjustments in the Company's third quarter financial results.
NOTE 10. EQUITY
COMMON STOCK
The Company is authorized to issue 2 billion shares of Class A common stock and 50 million shares of preferred stock, each of which has a par value of $0.0001 per share.
The Company has a share repurchase program which it expects to fund from cash generated from operations, and it expects 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, 2025, the Company repurchased and canceled 5.3 million and 9.8 million shares of Class A common stock for $196 million and $384 million, representing an average price per share of $36.66 and $39.38, respectively. During the three and six months ended June 30, 2024, the Company repurchased and canceled 5.1 million and 10.5 million shares of Class A common stock for $166 million and $324 million, representing an average price per share of $32.19 and $30.72, respectively. As of June 30, 2025, the Company had authorization remaining to repurchase up to approximately $1.3 billion of its Class A common stock.
The following table presents the changes in the number of shares outstanding (in thousands):
| Class A Common Stock | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Balance at January 1 | 989,646 | 997,709 | ||||||||||||
| Issue of shares upon vesting of restricted stock units (1) | 4,700 | 4,831 | ||||||||||||
| Issue of shares on exercise of stock options (1) | 82 | 21 | ||||||||||||
| Issue of shares for employee stock purchase plan | 770 | 919 | ||||||||||||
| Repurchase and cancellation of Class A common stock | (9,751) | (10,539) | ||||||||||||
| Balance at June 30 | 985,447 | 992,941 |
(1)Share amounts reflected above are net of shares withheld to satisfy the employee's tax withholding obligation.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 12
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
ACCUMULATED OTHER COMPREHENSIVE LOSS
The following tables present the changes in accumulated other comprehensive loss, net of tax:
| Foreign Currency Translation Adjustments | Cash Flow Hedges | Benefit Plans | Accumulated Other Comprehensive Loss | ||||||||||||||
| Balance at December 31, 2024 | $ | (2,863) | $ | (7) | $ | (291) | $ | (3,161) | |||||||||
| Other comprehensive income (loss) before reclassifications | 513 | 3 | (18) | 498 | |||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | — | 1 | 8 | 9 | |||||||||||||
| Deferred taxes | — | (1) | 3 | 2 | |||||||||||||
| Other comprehensive income (loss) | 513 | 3 | (7) | 509 | |||||||||||||
| Less: Other comprehensive loss attributable to noncontrolling interests | 1 | — | — | 1 | |||||||||||||
| Balance at June 30, 2025 | $ | (2,351) | $ | (4) | $ | (298) | $ | (2,653) |
| Foreign Currency Translation Adjustments | Cash Flow Hedges | Benefit Plans | Accumulated Other Comprehensive Loss | ||||||||||||||
| Balance at December 31, 2023 | $ | (2,513) | $ | (6) | $ | (277) | $ | (2,796) | |||||||||
| Other comprehensive loss before reclassifications | (192) | (3) | — | (195) | |||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | — | — | 9 | 9 | |||||||||||||
| Deferred taxes | — | 1 | — | 1 | |||||||||||||
| Other comprehensive income (loss) | (192) | (2) | 9 | (185) | |||||||||||||
| Balance at June 30, 2024 | $ | (2,705) | $ | (8) | $ | (268) | $ | (2,981) |
The amounts reclassified from accumulated other comprehensive loss during the six months ended June 30, 2025 and 2024 represent (i) net gains (losses) reclassified on cash flow hedges when the hedged transaction occurs, and (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.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 13
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
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) | 2025 | 2024 | 2025 | 2024 | ||||||||||
| Net income | $ | 711 | $ | 581 | $ | 1,120 | $ | 1,044 | ||||||
| Less: Net income attributable to noncontrolling interests | 10 | 2 | 17 | 10 | ||||||||||
| Net income attributable to Baker Hughes Company | $ | 701 | $ | 579 | $ | 1,103 | $ | 1,034 | ||||||
| Weighted average shares outstanding: | ||||||||||||||
| Class A basic | 988 | 996 | 990 | 997 | ||||||||||
| Class A diluted | 991 | 1,001 | 995 | 1,002 | ||||||||||
| Net income per share attributable to common stockholders: | ||||||||||||||
| Class A basic | $ | 0.71 | $ | 0.58 | $ | 1.11 | $ | 1.04 | ||||||
| Class A diluted | $ | 0.71 | $ | 0.58 | $ | 1.11 | $ | 1.03 |
For the three and six months ended June 30, 2025 and 2024, Class A diluted shares include the dilutive impact of equity awards except for approximately nil and 1 million options, respectively, that were excluded because the exercise price exceeded the average market price of the Company's Class A common stock and is therefore antidilutive.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 14
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 12. FINANCIAL INSTRUMENTS
RECURRING FAIR VALUE MEASUREMENTS
The Company's assets and liabilities measured at fair value on a recurring basis consist of derivative instruments and investment securities.
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Net Balance | Level 1 | Level 2 | Level 3 | Net Balance | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Derivatives | $ | — | $ | 17 | $ | — | $ | 17 | $ | — | $ | 11 | $ | — | $ | 11 | ||||||||||
| Investment securities | 1,277 | — | 15 | 1,292 | 1,282 | — | 2 | 1,284 | ||||||||||||||||||
| Total assets | 1,277 | 17 | 15 | 1,309 | 1,282 | 11 | 2 | 1,295 | ||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Derivatives | — | (44) | — | (44) | — | (64) | — | (64) | ||||||||||||||||||
| Total liabilities | $ | — | $ | (44) | $ | — | $ | (44) | $ | — | $ | (64) | $ | — | $ | (64) |
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| 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) | $ | 15 | $ | — | $ | — | $ | 15 | $ | 3 | $ | — | $ | — | $ | 3 | ||||||||||
| Equity securities | 557 | 760 | (40) | 1,277 | 544 | 737 | — | 1,281 | ||||||||||||||||||
| Total | $ | 572 | $ | 760 | $ | (40) | $ | 1,292 | $ | 547 | $ | 737 | $ | — | $ | 1,284 |
(1)Net gains (losses) recorded to earnings related to these securities were $119 million and $19 million for the three months ended June 30, 2025 and 2024, respectively, and $(22) million and $45 million for the six months ended June 30, 2025 and 2024, respectively.
(2)As of June 30, 2025, the Company's non-U.S. debt securities are classified as available for sale securities and mature within one year.
As of June 30, 2025 and December 31, 2024, the balance of the Company's equity securities with readily determinable fair values is $1,277 million and $1,281 million, respectively, and is comprised mainly of the Company's investment in Abu Dhabi National Oil Company Drilling, and is recorded primarily in "All other current assets" in the condensed consolidated statements of financial position. The Company measured its investments at fair value based on quoted prices in active markets. Net gains (losses) related to the Company's equity securities with readily determinable fair values are reported in "Other (income) expense, net" in the condensed consolidated statements of income (loss). See "Note 17. Other (Income) Expense, Net" for further information.
FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS
The Company's financial instruments include cash and cash equivalents, 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, 2025 and December 31, 2024 approximates their carrying value as reflected in the condensed consolidated financial statements. For further information on the fair value of the Company's debt, see "Note 8. Debt."
Baker Hughes Company 2025 Second Quarter Form 10-Q | 15
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
DERIVATIVES AND HEDGING
The Company uses derivatives to manage its risks and does not use derivatives for speculation. The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives.
| June 30, 2025 | December 31, 2024 | |||||||||||||
| Assets | Liabilities | Assets | Liabilities | |||||||||||
| Derivatives accounted for as hedges | ||||||||||||||
| Currency exchange contracts | $ | 2 | $ | — | $ | 2 | $ | (2) | ||||||
| Interest rate swap contracts | — | (32) | — | (45) | ||||||||||
| Derivatives not accounted for as hedges | ||||||||||||||
| Currency exchange contracts and other | 15 | (12) | 9 | (17) | ||||||||||
| Total derivatives | $ | 17 | $ | (44) | $ | 11 | $ | (64) |
Derivatives are classified in the condensed consolidated statements of financial position depending on their respective maturity date. As of June 30, 2025 and December 31, 2024, $16 million and $9 million of derivative assets are recorded in "All other current assets" and $1 million and $3 million are recorded in "All other assets" in the condensed consolidated statements of financial position, respectively. As of June 30, 2025 and December 31, 2024, $12 million and $16 million of derivative liabilities are recorded in "All other current liabilities" and $32 million and $50 million are recorded in "All other liabilities" in the condensed consolidated statements of financial position, respectively.
As of June 30, 2025 and December 31, 2024, the Company had issued credit default swaps ("CDS") totaling $775 million and $553 million, respectively, to third-party financial institutions. The CDS relate to borrowings provided by these financial institutions to a customer in Mexico who utilized these borrowings to pay certain of the Company's outstanding receivables. The total notional amount remaining on the issued CDS was $466 million and $412 million as of June 30, 2025 and December 31, 2024, respectively, which will reduce each month through September 2026 as the customer repays the borrowings. As of June 30, 2025, the fair value of these derivative liabilities is not material.
FORMS OF HEDGING
Cash Flow Hedges
The Company uses cash flow hedging primarily to mitigate the effects of foreign exchange rate changes on purchase and sale contracts. Accordingly, the vast majority of derivative activity in this category consists of currency exchange contracts. In addition, the Company is exposed to interest rate risk fluctuations in connection with long-term debt that it issues from time to time to fund its operations. 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, 2025 and December 31, 2024, the maximum term of cash flow hedges that hedge forecasted transactions was approximately one year.
Fair Value Hedges
All of the Company's long-term debt is comprised of fixed rate instruments. The Company is subject to interest rate risk on its debt portfolio and may use interest rate swaps to manage the economic effect of fixed rate obligations associated with certain debt. Under these arrangements, the Company agrees 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, 2025 and December 31, 2024, the Company had interest rate swaps with a notional amount of $500 million that converted a portion of its $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 Secured Overnight Financing Rate
Baker Hughes Company 2025 Second Quarter Form 10-Q | 16
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
index. The Company concluded that the interest rate swap met the criteria necessary to qualify for hedge accounting, and as such, the changes in this fair value hedge are recorded as gains or losses in interest expense and are equally offset by the gains or losses of the underlying debt instrument, which are also recorded in interest expense.
NOTIONAL AMOUNT OF DERIVATIVES
The notional amount of a derivative is used to determine, along with the other terms of the derivative, the amounts to be exchanged between the counterparties. The Company discloses the derivative notional amounts on a gross basis to indicate the total counterparty risk but it does not generally represent amounts exchanged by the Company and the counterparties. A substantial majority of the outstanding notional amount of $4.0 billion at June 30, 2025 and December 31, 2024 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.
COUNTERPARTY CREDIT RISK
Fair values of the Company's derivatives can change significantly from period to period based on, among other factors, market movements and changes in the Company's positions. The Company manages counterparty credit risk (the risk that counterparties will default and not make payments according to the terms of the agreements) on an individual counterparty basis.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 17
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 13. REVENUE RELATED TO CONTRACTS WITH CUSTOMERS
DISAGGREGATED REVENUE
The Company disaggregates its revenue from contracts with customers by product line for both the OFSE and IET segments, as the Company believes this best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. In addition, management views revenue from contracts with customers for OFSE by geography based on the location to where the product is shipped or the services are performed.
The series of tables below present the Company's revenue disaggregated by these categories.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| Total Revenue | 2025 | 2024 | 2025 | 2024 | ||||||||||
| Well Construction | $ | 921 | $ | 1,090 | $ | 1,812 | $ | 2,151 | ||||||
| Completions, Intervention, and Measurements | 935 | 1,118 | 1,861 | 2,123 | ||||||||||
| Production Solutions | 968 | 958 | 1,867 | 1,903 | ||||||||||
| Subsea & Surface Pressure Systems | 793 | 845 | 1,576 | 1,617 | ||||||||||
| Oilfield Services & Equipment | 3,617 | 4,011 | 7,116 | 7,794 | ||||||||||
| Gas Technology Equipment | 1,624 | 1,539 | 3,080 | 2,749 | ||||||||||
| Gas Technology Services | 752 | 691 | 1,344 | 1,305 | ||||||||||
| Total Gas Technology | 2,377 | 2,230 | 4,424 | 4,054 | ||||||||||
| Industrial Products | 488 | 509 | 933 | 971 | ||||||||||
| Industrial Solutions | 273 | 262 | 531 | 526 | ||||||||||
| Total Industrial Technology | 761 | 770 | 1,464 | 1,498 | ||||||||||
| Climate Technology Solutions | 156 | 128 | 334 | 211 | ||||||||||
| Industrial & Energy Technology | 3,293 | 3,128 | 6,221 | 5,763 | ||||||||||
| Total | $ | 6,910 | $ | 7,139 | $ | 13,337 | $ | 13,557 |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| Oilfield Services & Equipment Geographic Revenue | 2025 | 2024 | 2025 | 2024 | ||||||||||
| North America | $ | 928 | $ | 1,023 | $ | 1,849 | $ | 2,013 | ||||||
| Latin America | 639 | 663 | 1,207 | 1,300 | ||||||||||
| Europe/CIS/Sub-Saharan Africa | 653 | 827 | 1,232 | 1,577 | ||||||||||
| Middle East/Asia | 1,398 | 1,498 | 2,827 | 2,903 | ||||||||||
| Oilfield Services & Equipment | $ | 3,617 | $ | 4,011 | $ | 7,116 | $ | 7,794 |
REMAINING PERFORMANCE OBLIGATIONS
As of June 30, 2025, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $34 billion. As of June 30, 2025, the Company expects to recognize revenue of approximately 60%, 73% and 89% 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 the Company fulfills the related remaining performance obligations.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 18
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 CODM, who is the Company's Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company reports its operating results through two operating segments, OFSE and IET. Each segment is organized and managed based upon the nature of the Company's 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 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 and services, 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 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 five product lines - Gas Technology Equipment, Gas Technology Services, Industrial Products, Industrial Solutions, and Climate Technology Solutions.
In the first quarter of 2025, the Company changed the internal financial information regularly provided to the CODM to formalize the transition to evaluation of the performance of the Company's reportable segments utilizing segment Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") as the measure of profit. This accompanied a change to the captions and subtotals included on the Company's income statement. The CODM assesses the performance of each segment based on segment EBITDA, which is defined as income (loss) before income taxes and before the following: net interest expense, costs associated with significant restructuring programs, depreciation and amortization, and unallocated corporate costs and other income (expense). The CODM uses segment EBITDA as the measure to make resource (including financial or capital resources) allocation decisions for each segment, predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis when evaluating performance for each segment and making decisions about capital allocation. Accounting policies have been applied consistently 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.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 19
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
Summarized financial information for the Company's segments is shown in the following tables.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| 2025 | 2025 | |||||||||||||||||||
| OFSE | IET | Total | OFSE | IET | Total | |||||||||||||||
| Revenue | $ | 3,617 | $ | 3,293 | $ | 6,910 | $ | 7,116 | $ | 6,221 | $ | 13,337 | ||||||||
| Cost of goods and services sold | (2,891) | (2,389) | (5,280) | (5,710) | (4,501) | (10,211) | ||||||||||||||
| Research and development costs | (65) | (96) | (161) | (126) | (181) | (307) | ||||||||||||||
| Selling, general and administrative | (219) | (283) | (502) | (440) | (567) | (1,007) | ||||||||||||||
| Other income (expense) | 1 | 4 | 5 | 1 | 5 | 6 | ||||||||||||||
| Add: Depreciation and amortization | 233 | 56 | 289 | 459 | 109 | 568 | ||||||||||||||
| Segment EBITDA | $ | 677 | $ | 585 | $ | 1,262 | $ | 1,300 | $ | 1,086 | $ | 2,386 |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| 2024 | 2024 | |||||||||||||||||||
| OFSE | IET | Total | OFSE | IET | Total | |||||||||||||||
| Revenue | $ | 4,011 | $ | 3,128 | $ | 7,139 | $ | 7,794 | $ | 5,763 | $ | 13,557 | ||||||||
| Cost of goods and services sold | (3,200) | (2,268) | (5,468) | (6,253) | (4,172) | (10,425) | ||||||||||||||
| Research and development costs | (63) | (95) | (158) | (131) | (191) | (322) | ||||||||||||||
| Selling, general and administrative | (255) | (323) | (578) | (495) | (628) | (1,123) | ||||||||||||||
| Add: Depreciation and amortization | 223 | 55 | 278 | 445 | 111 | 556 | ||||||||||||||
| Segment EBITDA | $ | 716 | $ | 497 | $ | 1,213 | $ | 1,360 | $ | 883 | $ | 2,243 |
| Reconciliation of segment EBITDA to Net Income Attributable to Baker Hughes Company: | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| OFSE | $ | 677 | $ | 716 | $ | 1,300 | $ | 1,360 | ||||||
| IET | 585 | 497 | 1,086 | 883 | ||||||||||
| Total segment | 1,262 | 1,213 | 2,386 | 2,243 | ||||||||||
| Corporate costs (1) | (78) | (83) | (163) | (170) | ||||||||||
| Restructuring | — | (2) | — | (2) | ||||||||||
| Other income (expense), net (2) | 130 | 26 | (11) | 48 | ||||||||||
| Depreciation and amortization | (293) | (283) | (579) | (566) | ||||||||||
| Interest expense, net | (54) | (47) | (105) | (88) | ||||||||||
| Income before income taxes | 967 | 824 | 1,528 | 1,465 | ||||||||||
| Provision for income taxes | (256) | (243) | (408) | (421) | ||||||||||
| Net income | 711 | 581 | 1,120 | 1,044 | ||||||||||
| Less: Net income attributable to noncontrolling interests | 10 | 2 | 17 | 10 | ||||||||||
| Net income attributable to Baker Hughes Company | $ | 701 | $ | 579 | $ | 1,103 | $ | 1,034 |
(1)Corporate costs are primarily reported in "Selling, general and administrative" in the condensed consolidated statements of income (loss) and exclude $5 million and $6 million of depreciation and amortization for the three months ended June 30, 2025 and 2024, respectively, and $11 million and $10 million for the six months ended June 30, 2025 and 2024, respectively.
(2)Other income (expense), net excludes immaterial amounts recorded within Segment EBITDA and corporate costs for the three and six months ended June 30, 2025. See "Note 17. Other (Income) Expense, Net" for further information.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 20
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
The following table presents total assets:
| Assets | June 30, 2025 | December 31, 2024 | ||||||
| OFSE | $ | 18,440 | $ | 18,781 | ||||
| IET | 13,891 | 13,838 | ||||||
| Total segment | 32,331 | 32,619 | ||||||
| Corporate and eliminations (1) | 6,409 | 5,744 | ||||||
| Total | $ | 38,740 | $ | 38,363 |
(1)The assets reported in Corporate and eliminations consist primarily of the Baker Hughes trade name, cash, and tax assets. It also includes adjustments to eliminate intercompany investments and receivables reflected within the total assets of each of the reportable segments.
The following table presents depreciation and amortization:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| Depreciation and amortization | 2025 | 2024 | 2025 | 2024 | ||||||||||
| OFSE | $ | 233 | $ | 223 | $ | 459 | $ | 445 | ||||||
| IET | 56 | 55 | 109 | 111 | ||||||||||
| Total segment | 289 | 278 | 568 | 556 | ||||||||||
| Corporate | 5 | 6 | 11 | 10 | ||||||||||
| Total | $ | 293 | $ | 283 | $ | 579 | $ | 566 |
The following table presents capital expenditures:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| Capital expenditures | 2025 | 2024 | 2025 | 2024 | ||||||||||
| OFSE | $ | 213 | $ | 217 | $ | 414 | $ | 476 | ||||||
| IET | 69 | 65 | 154 | 135 | ||||||||||
| Total segment | 282 | 282 | 568 | 611 | ||||||||||
| Corporate | 19 | 10 | 33 | 14 | ||||||||||
| Total | $ | 301 | $ | 292 | $ | 601 | $ | 625 |
NOTE 15. RELATED PARTY TRANSACTIONS
The Company has an aeroderivative joint venture ("Aero JV") that is jointly controlled by GE Vernova (NYSE: GEV) and the Company, each with an ownership interest of 50%. The Company had purchases from the Aero JV of $226 million and $173 million during the three months ended June 30, 2025 and 2024, respectively, and $374 million and $276 million during the six months ended June 30, 2025 and 2024, respectively. The Company had $146 million and $117 million of amounts due at June 30, 2025 and December 31, 2024, respectively, for products and services provided by the Aero JV in the ordinary course of business.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 21
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 16. COMMITMENTS AND CONTINGENCIES
LITIGATION
The Company is subject to legal proceedings arising in the ordinary course of business. Because legal proceedings are inherently uncertain, management is unable to predict the ultimate outcome of such matters. The Company records 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, the Company does not expect the ultimate outcome of currently pending legal proceedings to have a material adverse effect on its results of operations, financial position, or cash flows. However, there can be no assurance as to the ultimate outcome of these matters.
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 (the "Securities Act") 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. On February 22, 2024, the Court dismissed the claims against the Company. However, on April 4, 2024, the plaintiffs filed an amended complaint, reasserting their claims against the Company under the Securities Act and the Exchange Act. On or around February 14, 2025, the plaintiffs filed a further amended complaint, once again reasserting their claims against the Company under the Securities Act and the Exchange Act. At this time, the Company is not able to predict the outcome of these proceedings.
The Company insures against risks arising from its business to the extent deemed prudent by 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 the Company against liabilities arising out of pending or future legal proceedings or other claims. Most of the Company's insurance policies contain deductibles or self-insured retentions in amounts management deems prudent and for which the Company is responsible for payment. In determining the amount of self-insurance, it is the Company's 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, the Company has entered into off-balance sheet arrangements, such as surety bonds for performance, letters of credit, and other bank issued guarantees. The Company also provides a guarantee to GE Vernova on behalf of a customer who entered into a financing arrangement with GE Vernova. Total off-balance sheet arrangements were approximately $5.8 billion at June 30, 2025. It is not practicable to estimate the fair value of these financial instruments. As of June 30, 2025, none of the off-balance sheet arrangements either has, or is likely to have, a material effect on the Company's financial position, results of operations or cash flows.
The Company sometimes enters into joint and several liability consortiums or similar arrangements for certain projects. 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 the Company. These factors could result in unanticipated costs to complete the project, liquidated damages or contract disputes.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 22
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 17. OTHER (INCOME) EXPENSE, NET
Other (income) expense, net consists of the following:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Change in fair value of equity securities | $ | (119) | $ | (19) | $ | 21 | $ | (71) | ||||||
| Other charges and credits (1) | (15) | (8) | (15) | 22 | ||||||||||
| Total | $ | (134) | $ | (26) | $ | 6 | $ | (48) |
(1)Other charges and credits of $(5) million and $(6) million for the three and six months ended June 30, 2025, respectively, consist of other income within OFSE and IET.
The Company recorded other (income) expense, net of $(134) million and $(26) million for the three months ended June 30, 2025 and 2024, respectively, and $6 million and $(48) million for the six months ended June 30, 2025 and 2024, respectively, primarily due to change in fair value of equity securities.
NOTE 18. ACQUISITIONS AND BUSINESSES HELD FOR SALE
ACQUISITIONS
On June 16, 2025, the Company entered into an agreement to acquire Continental Disc Corporation ("CDC") in the IET segment in an all-cash transaction for approximately $540 million. CDC is a leading provider of safety-critical pressure management solutions. The acquisition is expected to close in the third quarter of 2025, subject to customary conditions, including regulatory approvals.
BUSINESSES HELD FOR SALE
The Company classifies assets and liabilities as held for sale ("disposal group") when management commits to a plan to sell the disposal group and concludes that it meets the relevant criteria. Assets held for sale are measured at the lower of their carrying value or fair value less costs to sell. Any loss resulting from the measurement is recognized in the period the held for sale criteria are met. Conversely, gains are not recognized until the date of sale.
On June 2, 2025, the Company entered into an agreement to form a joint venture with a subsidiary of Cactus, Inc. The Company will contribute the Surface Pressure Control ("SPC") business, a business within the Subsea & Surface Pressure Systems product line of its OFSE segment, to the newly formed joint venture in exchange for a 35% non-controlling interest and cash consideration of approximately $345 million. The Company expects to complete the sale at the end of 2025 or early 2026 subject to customary conditions, including regulatory approvals.
On June 9, 2025, the Company entered into an agreement with Crane Company, a diversified manufacturer of engineered industrial products, to sell its Precision Sensors & Instrumentation ("PSI") business, a business within the Industrial Solutions product line of its IET segment, for a total cash consideration of approximately $1.15 billion. The Company expects to complete the sale at the end of 2025 or early 2026 subject to customary conditions, including regulatory approvals.
For both transactions, as of June 30, 2025, the businesses met the criteria to be classified as held for sale. The disposition proceeds are expected to exceed the carrying value of the businesses.
Baker Hughes Company 2025 Second Quarter Form 10-Q | 23
Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
The following table presents financial information related to the assets and liabilities of the businesses classified as held for sale and reported in "All other current assets" and "All other current liabilities" in the condensed consolidated statements of financial position as of June 30, 2025.
| Assets and liabilities of business held for sale | SPC | PSI | Total | ||||||||
| Assets | |||||||||||
| Current receivables | $ | 195 | $ | 62 | $ | 257 | |||||
| Inventories | 113 | 103 | 216 | ||||||||
| All other current assets | 2 | 1 | 3 | ||||||||
| Property, plant and equipment | 37 | 69 | 106 | ||||||||
| Operating lease right-of-use assets | 13 | 9 | 22 | ||||||||
| Goodwill | — | 425 | 425 | ||||||||
| Intangible assets | — | 3 | 3 | ||||||||
| Contract assets | 8 | 3 | 11 | ||||||||
| All other assets | 4 | 1 | 5 | ||||||||
| Total assets of business held for sale | 372 | 676 | 1,048 | ||||||||
| Liabilities | |||||||||||
| Accounts payable | 102 | 38 | 140 | ||||||||
| Progress collections and deferred income | 28 | 19 | 47 | ||||||||
| Operating lease liabilities-current | 1 | 4 | 5 | ||||||||
| All other current liabilities | 25 | 13 | 38 | ||||||||
| Operating lease liabilities | 11 | 4 | 15 | ||||||||
| All other liabilities | 17 | 6 | 23 | ||||||||
| Total liabilities of business held for sale | 184 | 84 | 268 | ||||||||
| Total net assets of business held for sale | $ | 188 | $ | 592 | $ | 780 |
Baker Hughes Company 2025 Second Quarter Form 10-Q | 24
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