Financial Analysis

"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. For matters where the range of possible loss is probable and reasonably estimable, the Company has accrued the appropriate amount for the matters disclosed. Unless otherwise disclosed, any potential loss above accrued amounts is not reasonably estimable. 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 bo …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"DEBT The carrying value of the Company's short-term and long-term debt consists of the following: June 30, 2026 December 31, 2025 U.S. dollar short-term debt 2.06% Senior Notes due December 2026 $ 600 $ 599 Other debt 174 90 Total short-term debt 774 689 U.S. dollar long-term debt 3.337% Senior Notes due December 2027 1,325 1,324 6.875% Notes due January 2029 252 255 4.050% Senior Notes due March 2029 497 3.138% Senior Notes due November 2029 524 524 4.486% Senior Notes due May 2030 498 498 4.350% Senior Notes due June 2031 1,240 4.650% Senior Notes due June 2033 744 5.000% Senior Notes due June 2036 1,979 5.125% Senior Notes due September 2040 1,266 1,269 4.080% Senior Notes due December 2047 1,339 1,338 5.850% Senior Notes due June 2056 1,974 Other long-term debt 378 190 Euro long-term debt 3.226% Senior Notes due March 2030 694 3.812% Senior Notes due March 2034 1,041 4.193% Senior Notes due March 2038 865 4.737% Senior Notes due March 2046 863 Total long-term debt 15,479 5,398 Total debt $ 16,253 $ 6,087 The estimated fair value of total debt at June 30, 2026 and December 31, 2025 was $15,754 million and $5,628 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. Baker Hughes Holdings LLC (""BHH LLC""), a wholly owned …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

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 2026 2025 2026 2025 Well Construction $ 899 $ 921 $ 1,742 $ 1,812 Completions, Intervention, and Measurements 944 935 1,827 1,861 Production Solutions 930 968 1,828 1,867 Subsea & Surface Pressure Systems 678 793 1,291 1,576 Oilfield Services & Equipment 3,451 3,617 6,688 7,116 Gas Technology Equipment 1,524 1,624 3,189 3,080 Gas Technology Services 831 752 1,622 1,344 Total Gas Technology 2,355 2,377 4,811 4,424 Industrial Products 549 488 1,040 933 Industrial Solutions 182 273 367 531 Total Industrial Technology 731 761 1,407 1,464 Climate Technology Solutions 205 156 423 334 Industrial & Energy Technology 3,291 3,293 6,641 6,221 Total $ 6,742 $ 6,910 $ 13,329 $ 13,337

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"GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL The changes in the carrying value of goodwill are detailed below by segment: Oilfield Services & Equipment Industrial & Energy Technology Total Balance at December 31, 2024 $ 1,547 $ 4,531 $ 6,078 Acquisitions 254 254 Currency exchange and other 9 149 158 Classified as held for sale (422) (422) Balance at December 31, 2025 1,556 4,512 6,068 Currency exchange and other 6 (16) (10) Classified as held for sale (492) (492) Balance at June 30, 2026 $ 1,562 $ 4,004 $ 5,566 During 2025, the Company recorded goodwill of $254 million, of which $229 million related to the acquisition of Continental Disc Corporation (""CDC"") in the Industrial & Energy Technology (""IET"") segment. During the six months ended June 30, 2026, the Company reclassified $492 million of goodwill as held for sale as a result of the pending Waygate Technologies (""Waygate"") disposition. During the six months ended June 30, 2025, the Company reclassified $422 million of goodwill as held for sale as a result of the Precision Sensors & Instrumentation (""PSI"") disposition. See ""Note 19. Business Acquisitions, Dispositions, and Businesses Held for Sale"" for additional information. The Company recorded no impairments to goodwill as of June 30, 2026 or December 31, 2025. OTHER INTANGIBLE ASSETS Intangible assets consist of the following: June 30, 2026 December 31, 2025 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulate …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXESFor the three and six months ended June 30, 2026, the provision for income taxes was $210 million and $545 million, respectively. For the three and six months ended June 30, 2025, the provision for income taxes was $256 million and $408 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.

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LEASES The Company's operating lease portfolio includes service centers, manufacturing facilities, sales and administrative offices, and certain other equipment. Three Months Ended June 30, Six Months Ended June 30, Operating Lease Expense 2026 2025 2026 2025 Short-term lease $ 113 $ 118 $ 227 $ 237 Long-term fixed lease 54 69 115 138 Long-term variable lease 6 14 25 31 Total operating lease expense $ 173 $ 201 $ 367 $ 406 Cash flows used in operating activities for operating leases approximate lease expense for the three and six months ended June 30, 2026 and 2025. The weighted-average remaining lease term as of June 30, 2026 and December 31, 2025 was approximately nine years and seven years for operating leases, respectively. The weighted-average discount rate used to determine the operating lease liability as of June 30, 2026 and December 31, 2025 was 4.8% and 4.6%, respectively.

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"NEW ACCOUNTING STANDARDS TO BE ADOPTED In November 2024, the FASB issued ASU 2024-03, ""Income StatementReporting Comprehensive IncomeExpense 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 for fiscal years beginning after December 15, 2026 and for interim periods within annual reporting periods beginning after December 15, 2027, and may be applied on a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its disclosures. In September 2025, the FASB issued ASU 2025-06, ""IntangiblesGoodwill and OtherInternal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software"" (""ASU 2025-06""). Under the new guidance, internal-use software costs are capitalized when management has authorized and committed to funding the project and it is probable that the software will be completed and used for its intended function. ASU 2025-06 is effective for the Company for annual reporting periods beginning after December 15, 2027, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its accounting for internal-use software. All other new accounting pronouncements that have been issued, but not yet effective are currently bein …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"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 during each of the three months ended June 30, 2026 and 2025, and $435 million and $374 million during the six months ended June 30, 2026 and 2025, respectively. The Company had $150 million and $136 million of amounts due at June 30, 2026 and December 31, 2025, respectively, for products and services provided by the Aero JV in the ordinary course of business."

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RESTRUCTURING The Company recorded restructuring charges of $11 million and nil during the three months ended June 30, 2026 and 2025, and $50 million and nil during the six months ended June 30, 2026 and 2025, respectively. The following table presents restructuring and associated impairment charges by the impacted segment: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Oilfield Services & Equipment $ 11 $ $ 24 $ Industrial & Energy Technology 28 Corporate (2) Total $ 11 $ $ 50 $ The following table presents restructuring charges by type: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Employee-related termination expenses $ $ 24 Contract termination fees 1 Environmental remediation costs 1 1 Other incremental costs 10 24 Total $ 11 $ $ 50 $ …

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PROGRESS COLLECTIONS AND DEFERRED INCOME Contract liabilities include progress collections, which reflect billings in excess of revenue, and deferred income on long-term contracts to construct technically complex equipment, and provide long-term product service agreements and extended maintenance agreements. Contract liabilities consist of the following: June 30, 2026 December 31, 2025 Equipment contracts and other service agreements $ 5,892 $ 5,249 Long-term product service agreements 524 507 Progress collections 6,416 5,756 Deferred income 182 148 Progress collections and deferred income (contract liabilities) $ 6,598 $ 5,904 Revenue recognized during the three months ended June 30, 2026 and 2025 that was included in the contract liabilities at the beginning of the period was $1,096 million and $1,373 million, respectively, and $2,706 million and $2,919 million during the six months ended June 30, 2026 and 2025, respectively.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 Comp …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"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 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. The following is a description of each segment's business operations: 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, and flexible pipe systems. Beyond its traditional oilfield concentration, OFSE is expanding its cap …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

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. There were no shares of Class A common stock repurchased during the three and six months ended June 30, 2026. 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. As of June 30, 2026, 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 2026 2025 Balance at January 1 986,815 989,646 Issue of shares upon vesting of restricted stock units (1) 4,195 4,700 Issue of shares on exercise of stock options (1) 643 82 Issue of shares for employee stock purchase plan 674 770 Repurchase and cancellation of Class A common stock (9,751) Balance …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing