Baker Hughes Co

Previous wording

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the condensed consolidated financial statements and the related notes included in Item 1 thereto, as well as our Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Annual Report").

Current wording

Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the condensed consolidated financial statements and the related notes included in Item 1 thereto, as well as our Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Annual Report").

Previous wording

We are an energy technology company with a broad and diversified portfolio of technologies and services that span the energy and industrial value chain. We conduct business in more than 120 countries and employ approximately 57,000 employees. We operate through our two business segments: Oilfield Services & Equipment ("OFSE") and Industrial & Energy Technology ("IET"). We sell products and services primarily in the global oil and gas markets, within the upstream, midstream and downstream segments, as well as broader industrial and new energy markets.

Current wording

Baker Hughes Company ("Baker Hughes," "the Company," "we," "us," or "our") is an energy technology company with a broad and diversified portfolio of technologies and services that spans the energy and industrial value chain. We conduct business in more than 120 countries and employ approximately 57,000 employees. We operate through our two business segments: Oilfield Services & Equipment ("OFSE") and Industrial & Energy Technology ("IET"). We sell products and services primarily in the global oil and gas markets, within the upstream, midstream and downstream segments, as well as broader industrial and new energy markets.

Previous wording

In the first quarter of 2024, we saw strong momentum across the Company with significant improvement in our financial results over the first quarter of 2023, including key commercial successes, growth in revenue, expansion of operating margins and strong cash flow from operating activities.

Current wording

In the second quarter of 2024, we saw strong momentum across the Company with meaningful improvement in our financial results over the second quarter of 2023, including key commercial successes, growth in revenue and expansion of operating margins.

Previous wording

As we look to the rest of 2024, we remain balanced on the oil and gas outlook and continue to see areas of strength across our broad portfolio. We continue to believe in a multiyear upstream spending cycle, which, we believe, will be more durable and less sensitive to commodity price swings relative to prior cycles and led by international and offshore markets.

Current wording

As we look at the second half of 2024, we remain balanced on the oil and gas outlook and continue to see areas of strength across our broad portfolio. We also maintain our expectation for a multiyear upstream spending cycle.

Previous wording

In OFSE, a resilient global economy, a steeper than expected seasonal decline in U.S. oil production to start the year, and the roll forward of Organization of the Petroleum Exporting Countries (OPEC+) production cuts have helped to keep global oil markets more balanced. We maintain our expectations for year-over-year decline in activity in North America that we expect to be more than offset by growth in international market in 2024. Beyond 2024, we expect continued upstream spending growth, although at a more moderate pace than we have experienced in recent years and with increased focus on optimizing production from existing assets, leveraging our production and digital solutions businesses.

Current wording

In OFSE, on the back of slowing global demand growth and ongoing economic uncertainty, the recent Organization of the Petroleum Exporting Countries production cut extension, coupled with rising geopolitical risks and firming oil demand in June 2024 have helped to keep global oil markets more balanced. In the remainder of 2024, we expect growth in international markets to be only partially offset by year-over-year decline in activity in North America. Beyond 2024, we maintain our expectation for growth, although at a decelerating pace, led by international and offshore markets, as well as increased focus on optimizing production from existing assets.

Previous wording

The conflict in the Middle East has added another element of uncertainty across the oil and gas markets. While this conflict has not had a material impact on our operations, a further escalation in geopolitical tensions across the region could impact the Company. We will continue to monitor and assess the impact of the conflict in the Middle East on our business. Furthermore, in IET, the aeroderivative supply chain continues to show signs of tightness, which we will continue to manage operationally.

Current wording

Global geopolitical tensions continue to add to the uncertainty across the oil and gas markets. While there has not been a material impact on our operations, we will continue to monitor and assess these risks. Furthermore, in IET, we will continue to manage the tightness in the aeroderivative supply chain.

Previous wording

In the first quarter of 2024, the Company generated revenue of $6,418 million, compared to $5,716 million in the first quarter of 2023, increasing $702 million or 12%. The increase in revenue was primarily driven by higher volume in IET on Gas Technology Equipment project backlog execution and better activity in OFSE. Income before tax was $641 million in the first quarter of 2024 compared to $760 million in the first quarter of 2023, decreasing $119 million. The decrease in income before tax was driven primarily by the decrease of positive effect from the change in fair value on certain equity securities compared to the first quarter of 2023, partially offset higher volume and price in both segments and structural cost-out initiatives.

Current wording

In the second quarter of 2024, the Company generated revenue of $7,139 million, compared to $6,315 million in the second quarter of 2023, increasing $825 million or 13%. The increase in revenue was primarily driven by higher volume in IET on Gas Technology Equipment ("GTE") project backlog execution and to a lesser degree by improved activity in OFSE. Income before tax was $824 million in the second quarter of 2024 compared to $614 million in the second quarter of 2023, increasing $210 million. The increase in income before tax was driven primarily by higher volume and price in both segments and structural cost-out initiatives, partially offset by the decrease of the positive effect from the change in fair value on certain equity securities compared to the second quarter of 2023.

Previous wording

Baker Hughes remains committed to a flexible capital allocation policy that balances returning cash to shareholders and investing in growth opportunities. We increased our quarterly dividend in the third quarter of 2023 by one cent to $0.20 per share and again in the first quarter of 2024 by one cent to $0.21 per share. In the first quarter of 2024, we returned a total of $368 million to shareholders in the form of dividends and share repurchases.

Current wording

Baker Hughes remains committed to a flexible capital allocation policy that balances returning cash to shareholders and investing in growth opportunities. In the second quarter of 2024, we returned a total of $375 million to shareholders in the form of dividends and share repurchases.

Previous wording

•OFSE North America activity: North America activity has recently flattened out after trending lower for most of 2023, and we expect this flattening trend to last into the second quarter of 2024 before seeing a modest recovery in activity during the second half of the year.

Current wording

•OFSE North America activity: North America activity declined during the second quarter, and we now expect relatively stable activity during the second half of 2024.

Previous wording

We believe we have an important role to play in society as an industry leader and partner. We view the area of environmental, social, and governance as a key lever to transform the performance of our Company and our industry. In January 2019, we made a commitment to reduce Scope 1 and 2 carbon dioxide equivalent emissions from our operations by 50% by 2030 and achieve net zero emissions by 2050. We continue to make progress on emissions reductions, and reported in our 2022 Corporate Sustainability Report a 28% reduction in our Scope 1 and 2 carbon dioxide equivalent emissions compared to our 2019 base year.

Current wording

We believe we have an important role to play in society as an industry leader and partner. We view the area of environmental, social, and governance as a key lever to transform the performance of our Company and our industry. In January 2019, we made a commitment to reduce Scope 1 and 2 carbon dioxide equivalent emissions from our operations by 50% by 2030 and achieve net zero emissions by 2050. We continue to make progress on emissions reductions, and reported in our 2023 Corporate Sustainability Report a 28.3% reduction in our Scope 1 and 2 carbon dioxide equivalent emissions as compared to our 2019 base year.

Previous wording

The following discussion and analysis summarizes the significant factors affecting our results of operations, financial condition and liquidity position as of and for the three months ended March 31, 2024 and 2023, and should be read in conjunction with the condensed consolidated financial statements and related notes of the Company.

Current wording

The following discussion and analysis summarizes the significant factors affecting our results of operations, financial condition and liquidity position as of and for the three and six months ended June 30, 2024 and 2023, and should be read in conjunction with the condensed consolidated financial statements and related notes of the Company.

Previous wording

Outside North America, customer spending is influenced by Brent oil prices, which increased from the same quarter last year, ranging from a high of $87.36/Bbl in March 2024 to a low of $75.47/Bbl in January 2024. For the three months ended March 31, 2024, Brent oil prices averaged $82.92/Bbl, which represented an increase of $1.85/Bbl from the same period last year.

Current wording

Outside North America, customer spending is influenced by Brent oil prices, which increased from the same quarter last year, ranging from a high of $93.12/Bbl in April 2024 to a low of $75.33/Bbl in June 2024. For the six months ended June 30, 2024, Brent oil prices averaged $83.79/Bbl, which represented an increase of $4.21/Bbl from the same period last year.

Previous wording

In North America, customer spending is influenced by WTI oil prices, which increased from the same quarter last year. Overall, WTI oil prices ranged from a high of $84.39/Bbl in March 2024 to a low of $70.62/Bbl in January 2024. For the three months ended March 31, 2024, WTI oil prices averaged $77.50/Bbl, which represented an increase of $1.57/Bbl from the same period last year.

Current wording

In North America, customer spending is influenced by WTI oil prices, which increased from the same quarter last year. Overall, WTI oil prices ranged from a high of $87.69/Bbl in April 2024 to a low of $74.27/Bbl in June 2024. For the six months ended June 30, 2024, WTI oil prices averaged $79.69/Bbl, which represented an increase of $4.96/Bbl from the same period last year.

Previous wording

In North America, natural gas prices, as measured by the Henry Hub Natural Gas Spot Price, averaged $2.15/mmBtu in the first quarter of 2024, representing a 19% decrease from the same quarter in the prior year. Throughout the quarter, Henry Hub Natural Gas Spot Prices ranged from a high of $13.20/mmBtu in January 2024 to a low of $1.25/mmBtu in March 2024.

Current wording

In North America, natural gas prices, as measured by the Henry Hub Natural Gas Spot Price, averaged $2.07/mmBtu in the second quarter of 2024, representing a 4% decrease from the same quarter in the prior year. Throughout the quarter, Henry Hub Natural Gas Spot Prices ranged from a high of $2.80/mmBtu in June 2024 to a low of $1.36/mmBtu in April 2024.

Previous wording

We have been providing rig counts to the public since 1944. We gather all relevant data through our field service personnel, who obtain the necessary data from routine visits to the various rigs, customers, contractors and other outside sources as necessary. We base the classification of a well as either oil or natural gas primarily upon filings made by operators in the relevant jurisdiction. This data is then compiled and distributed to various wire services and trade associations and is published on our website. We believe the counting process and resulting data is reliable; however, it is subject to our ability to obtain accurate and timely information. Rig counts are compiled weekly for the U.S. and Canada and monthly for all international rigs. Published international rig counts do not include rigs drilling in certain locations, such as onshore China because this information is not readily available.

Current wording

We have been providing rig counts to the public since 1944. We gather all relevant data through our field service personnel, who obtain the necessary data from routine visits to the various rigs, customers, contractors and other outside sources as necessary. We base the classification of a well as either oil or natural gas primarily upon filings made by operators in the relevant jurisdiction. This data is then compiled and distributed to various wire services and trade associations and is published on our website. We believe the counting process and resulting data is reliable; however, it is subject to our ability to obtain accurate and timely information. Rig counts are compiled weekly for the United States of America ("U.S.") and Canada and monthly for all international rigs. Published international rig counts do not include rigs drilling in certain locations such as onshore China because this information is not readily available.

Previous wording

The worldwide rig count was 1,796 for the first quarter of 2024, a decrease of 5% as compared to the same period last year primarily due to a decrease in North America. Within North America, the decrease was primarily driven by the U.S. rig count, which was down 18% when compared to the same period last year, and a decrease in the Canada rig count, which was down 6% when compared to the same period last year. Internationally, the rig count increase was driven by an increase in the Africa, Middle East, Asia Pacific, and Europe regions of 19%, 8%, 8%, and 2%, respectively.

Current wording

The worldwide rig count was 1,701 for the second quarter of 2024, a decrease of 5% as compared to the same period last year primarily due to a decrease in North America. Within North America, the decrease was primarily driven by the U.S. rig count, which was down 16% when compared to the same period last year, partially offset by an increase in the Canada rig count, which was up 16% when compared to the same period last year. Internationally, the rig count was flat when compared to the same period last year.

Previous wording

Our results of operations are evaluated by the Chief Executive Officer on a consolidated basis as well as at the segment level. The performance of our operating segments is primarily evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and 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.

Current wording

Our results of operations are evaluated by the Chief Executive Officer on a consolidated basis as well as at the segment level. The performance of our operating segments is primarily evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and before the following: net interest expense, net other non-operating income (loss), corporate expenses, significant restructuring plans, impairment and other charges, inventory impairments, and certain gains and losses not allocated to the operating segments.

Previous wording

Orders: We recognized orders of $6.5 billion and $7.6 billion for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Orders: We recognized orders of $7.5 billion for the three months ended June 30, 2024 and 2023.

Previous wording

We recognized OFSE orders of $3.6 billion and $4.1 billion, and IET orders of $2.9 billion and $3.5 billion for the three months ended March 31, 2024 and 2023, respectively. Within IET, Gas Technology orders were $1.9 billion and $2.4 billion, Industrial Technology orders were $0.8 billion and $0.9 billion, and Climate Technology Solutions ("CTS") orders were $0.2 billion and $0.3 billion, for the three months ended March 31, 2024 and 2023, respectively. References to total new energy orders incorporates CTS in IET of $0.2 billion.

Current wording

We recognized OFSE orders of $4.0 billion and $4.2 billion, and IET orders of $3.5 billion and $3.3 billion for the three months ended June 30, 2024 and 2023, respectively. Within IET, Gas Technology orders were $2.3 billion and $2.3 billion, Industrial Technology orders were $0.8 billion and $0.8 billion, and Climate Technology Solutions ("CTS") orders were $0.4 billion and $0.2 billion, for the three months ended June 30, 2024 and 2023, respectively. References to total new energy orders incorporates CTS in IET of $0.4 billion.

Previous wording

Remaining Performance Obligations ("RPO"): As of March 31, 2024, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $32.7 billion. As of March 31, 2024, OFSE remaining performance obligations totaled $3.4 billion, and IET remaining performance obligations totaled $29.3 billion.

Current wording

Remaining Performance Obligations ("RPO"): As of June 30, 2024, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $33.5 billion. As of June 30, 2024, OFSE remaining performance obligations totaled $3.3 billion, and IET remaining performance obligations totaled $30.2 billion.

Previous wording

The following table presents Oilfield Services & Equipment revenue by geographic region:

Current wording

The following table presents OFSE revenue by geographic region:

Previous wording

Revenue increased $702 million, or 12%, driven by increased activity across both segments. OFSE increased $206 million and IET increased $496 million. Total segment operating income increased $139 million, driven by both segments.

Current wording

Revenue increased $825 million, or 13%, driven by increased activity across both segments. OFSE increased $134 million and IET increased $691 million. Total segment operating income increased $207 million, driven by both segments.

Previous wording

OFSE revenue of$3,783 million increased $206 million, or 6%, in the first quarter of 2024 compared to the first quarter of 2023, as a result of increased international activity as evidenced by an increase in the international rig count. International revenue was $2,793 million in the first quarter of 2024, an increase of $208 million from the first quarter of 2023, primarily driven by the Europe/CIS/Sub-Saharan Africa and Middle East/Asia regions, partially offset by Latin America regions. North America revenue was $990 million in the first quarter of 2024, a decrease of $2 million from the first quarter of 2023.

Current wording

OFSE revenue of$4,011 million increased $134 million, or 3%, in the second quarter of 2024 compared to the second quarter of 2023, driven by an increased execution in Subsea & Surface Pressure Systems ("SSPS"). International revenue was $2,988 million in the second quarter of 2024, an increase of $152 million from the second quarter of 2023, primarily driven by the Europe/CIS/Sub-Saharan Africa and Middle East/Asia regions, partially offset by the Latin America region. North America revenue was $1,023 million in the second quarter of 2024, a decrease of $18 million from the second quarter of 2023.

Previous wording

OFSE segment operating income was $422 million in the first quarter of 2024 compared to $371 million in the first quarter of 2023. Theincrease in operating income was primarily driven by higher volume, price, and cost-out initiatives partially offset by unfavorable business mix and inflationary pressure.

Current wording

OFSE segment operating income was $493 million in the second quarter of 2024 compared to $417 million in the second quarter of 2023. Theincrease in operating income was primarily driven by higher volume, price, and cost-out initiatives partially offset by unfavorable business mix and inflationary pressure.

Previous wording

IET revenue of$2,634 million increased $496 million, or 23%, in the first quarter of 2024 compared to the first quarter of 2023. The increase was primarily driven by higher volume in Gas Technology Equipment and, to a lesser extent, in CTS, Industrial Technology and Gas Technology Services.

Current wording

IET revenue of$3,128 million increased $691 million, or 28%, in the second quarter of 2024 compared to the second quarter of 2023. The increase was primarily driven by higher volume in GTE and, to a lesser extent, in CTS, Industrial Technology and Gas Technology Services ("GTS").

Previous wording

IET segment operating income was $330 million in the first quarter of 2024 compared to$241 million in the first quarter of 2023. The operating income performance in the first quarter of 2024 was driven by higher volume, price and cost-out initiatives, partially offset by unfavorable business mix, inflationary pressure, and higher research and development spend.

Current wording

IET segment operating income was $442 million in the second quarter of 2024 compared to$311 million in the second quarter of 2023. The operating income performance in the second quarter of 2024 was driven by higher volume, price and cost-out initiatives, partially offset by unfavorable business mix and inflationary pressure.

Previous wording

In the first quarter of 2024, corporate expenses were$92 million compared to $100 million in the first quarter of 2023. The decrease of $8 million was driven by savings related to our corporate optimization process.

Current wording

In the second quarter of 2024, corporate expenses were$88 million compared to $97 million in the second quarter of 2023. The decrease of $9 million was driven by savings related to our corporate optimization process.

Previous wording

In the first quarter of 2023, we recorded inventory impairments of $18 million predominately in our OFSE segment. Charges for inventory impairments are reported in "Cost of goods sold" in the condensed consolidated statements of income (loss).

Current wording

In the second quarter of 2023, we recorded inventory impairments of $15 million predominately in our OFSE segment. Charges for inventory impairments are reported in "Cost of goods sold" in the condensed consolidated statements of income (loss).

Previous wording

In the first quarter of 2024, we recognized $7 million of restructuring, impairment, and other charges, compared to $56 million in the first quarter of 2023. The charges in the first quarter of 2023 primarily relate to employee termination expenses driven by actions taken by the Company to facilitate the reorganization into two segments.

Current wording

In the second quarter of 2024, we recognized $14 million of restructuring, impairment, and other charges, compared to $102 million in the second quarter of 2023. The charges in the second quarter of 2023 primarily relate to employee termination expenses driven by actions taken to facilitate our reorganization into two segments and to optimize our corporate structure. In addition, costs were incurred related to exit activities at specific locations in our segments to align with our current market outlook and to rationalize our manufacturing supply chain footprint.

Previous wording

In the first quarter of 2024, we incurred $29 million of other non-operating income. Included in this amount was a net gain of $52 million from the change in fair value for certain equity investments. In the first quarter of 2023, we incurred $386 million of other non-operating income. Included in this amount was a gain of $392 million from the change in fair value for certain equity investments.

Current wording

In the second quarter of 2024, we recorded $38 million of other non-operating income. Included in this amount was a net gain of $19 million from the change in fair value for certain equity investments. In the second quarter of 2023, we recorded $158 million of other non-operating income. Included in this amount was a net gain of $148 million from the change in fair value for certain equity investments.

Previous wording

In the first quarter of 2024, we incurred net interest expense of $41 million, which includes interest income of $30 million. Net interest expense decreased $23 million compared to the first quarter of 2023, primarily driven by higher interest income.

Current wording

In the second quarter of 2024, we incurred net interest expense of $47 million, which includes interest income of $26 million. Net interest expense decreased $11 million compared to the second quarter of 2023, primarily driven by higher interest income.

Previous wording

In the first quarter of 2024, the provision for income taxes was $178 million. 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. and losses with no tax benefit due to valuation allowances, partially offset by income subject to U.S. tax at an effective rate less than 21% due to valuation allowances.

Current wording

In the second quarter of 2024, the provision for income taxes was $243 million. 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. and losses with no tax benefit due to valuation allowances, partially offset by income subject to U.S. tax at an effective rate less than 21% due to valuation allowances.

Previous wording

In 2021, as part of the Organization for Economic Co-operation and Development's ("OECD") Inclusive Framework, 140 member countries agreed to the implementation of the Pillar Two Global Minimum Tax ("Pillar Two") of 15%. The OECD continues to release additional guidance, including administrative guidance on how Pillar Two rules should be interpreted and applied by jurisdictions as they adopt Pillar Two. A number of countries have utilized the administrative guidance as a starting point for legislation that went into effect January 1, 2024. Based on current enacted legislation, Baker Hughes anticipates the impact of Pillar Two to be immaterial to the Company for 2024.

Current wording

In 2021, as part of the Organization for Economic Co-operation and Development's ("OECD") Inclusive Framework, 140 member countries agreed to the implementation of the Pillar Two Global Minimum Tax ("Pillar Two") of 15%. The OECD continues to release additional guidance, including administrative guidance on how Pillar Two rules should be interpreted and applied by jurisdictions as they adopt Pillar Two. A number of countries have utilized the administrative guidance as a starting point for legislation that went into effect January 1, 2024. Based on current enacted legislation, Baker Hughes estimates the impact of Pillar Two to be immaterial to the Company for 2024.

Previous wording

In the first quarter of 2023, the provision for income taxes was $179 million. 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 income subject to U.S. tax at an effective rate less than 21% due to valuation allowances.

Current wording

In the first six months of 2023, the provision for income taxes was $379 million. 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, 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.

Previous wording

Our objective in financing our business is to maintain sufficient liquidity, adequate financial resources and financial flexibility in order to fund the requirements of our business. We continue to maintain solid financial strength and liquidity. At March 31, 2024, we had cash and cash equivalents of $2.7 billion compared to $2.6 billion at December 31, 2023.

Current wording

Our objective in financing our business is to maintain sufficient liquidity, adequate financial resources and financial flexibility in order to fund the requirements of our business. We continue to maintain solid financial strength and liquidity. At June 30, 2024, we had cash and cash equivalents of $2.3 billion compared to $2.6 billion at December 31, 2023.

Previous wording

In the U.S. we held cash and cash equivalents of approximately $0.8 billion and $0.6 billion and outside the U.S. of approximately $1.9 billion and $2.0 billion as of March 31, 2024 and December 31, 2023, respectively. A substantial portion of the cash held outside the U.S. at March 31, 2024 has been reinvested in active non-U.S. business operations. If we decide at a later date to repatriate certain cash to the U.S., we may incur other additional taxes that would not be significant to the total tax provision.

Current wording

In the U.S. we held cash and cash equivalents of approximately $0.6 billion and $0.6 billion and outside the U.S. of approximately $1.7 billion and $2.0 billion as of June 30, 2024 and December 31, 2023, respectively. A substantial portion of the cash held outside the U.S. at June 30, 2024 has been reinvested in active non-U.S. business operations. If we decide at a later date to repatriate certain cash to the U.S., we may incur other additional taxes that would not be significant to the total tax provision.

Previous wording

As of March 31, 2024 and December 31, 2023, we had $614 million and $637 million, respectively, of cash held in countries with currency controls that limit the flow of cash out of the jurisdiction or limit our ability to transfer funds without potentially incurring substantial costs. These funds are available to fund operations and growth in their respective jurisdictions, and we do not currently anticipate a need to transfer these funds to the U.S.

Current wording

As of June 30, 2024 and December 31, 2023, we had $683 million and $637 million, respectively, of cash held in countries with currency controls that limit the flow of cash out of the jurisdiction or limit our ability to transfer funds without potentially incurring substantial costs. These funds are available to fund operations and growth in their respective jurisdictions, and we do not currently anticipate a need to transfer these funds to the U.S.

Previous wording

We have a $3 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 we consider customary. 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. The Credit Agreement is fully and unconditionally guaranteed on a senior unsecured basis by Baker Hughes. In addition, we have authorization to issue up to $3 billion of commercial paper. At March 31, 2024 and December 31, 2023, there were no borrowings under the Credit Agreement and no outstanding commercial paper.

Current wording

We have 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 we consider 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, 2024 and December 31, 2023, there were no borrowings under the Credit Agreement.

Previous wording

We continuously review our liquidity and capital resources. If market conditions were to change, for instance due to the uncertainty created by geopolitical events, a global pandemic or a significant decline in oil and gas prices, and our revenue was reduced significantly or operating costs were to increase significantly, our cash flows and liquidity could be negatively impacted. Additionally, it could cause the rating agencies to lower our credit ratings. There are no ratings triggers that would accelerate the maturity of any borrowings under our committed credit facility; however, a downgrade in our credit ratings could increase the cost of borrowings under the credit facility and could also limit or preclude our ability to issue commercial paper. Should this occur, we could seek alternative sources of funding, including borrowing under the credit facility.

Current wording

We continuously review our liquidity and capital resources. If market conditions were to change, for instance due to the uncertainty created by geopolitical events, a global pandemic or a significant decline in oil and gas prices, and our revenue was reduced significantly or operating costs were to increase significantly, our cash flows and liquidity could be negatively impacted. Additionally, it could cause the rating agencies to lower our credit ratings. There are no ratings triggers that would accelerate the maturity of any borrowings under our committed credit facility; however, a downgrade in our credit ratings could increase the cost of borrowings under the credit facility. Should this occur, we could seek alternative sources of funding, including borrowing under the credit facility.

Previous wording

During the three months ended March 31, 2024, we dispersed cash to fund a variety of activities including certain working capital needs, capital expenditures, the payment of dividends, and repurchases of our common stock.

Current wording

During the six months ended June 30, 2024, we dispersed cash to fund a variety of activities including certain working capital needs, capital expenditures, the payment of dividends, and repurchases of our common stock.