Baker Hughes Co

Previous 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.

Current wording

Global geopolitical uncertainty continues to influence 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

As we continue our transformation, the business has undertaken significant structural changes and we see the operating benefits coming through in the margin performance. We have made progress in our efforts to improve efficiencies and modernize how the business operates, including in our cost-optimization initiatives announced in OFSE earlier this year.

Current wording

As our journey of transformation continues, we have made progress in our efforts to improve efficiencies and modernize how the business operates. The business has undertaken significant structural changes and we see the operating benefits coming through in the margin performance.

Previous 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.

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 third quarter of 2024, we returned a total of $361 million to shareholders in the form of dividends and share repurchases.

Previous wording

•OFSE International activity: We expect spending outside of North America to experience solid growth in 2024, as compared to 2023.

Current wording

•OFSE International activity: We expect a decelerating pace of growth for spending outside of North America in the fourth quarter of 2024 and into 2025.

Previous wording

We have other businesses in our portfolio that are more correlated with various industrial metrics, including global GDP growth. We also have businesses within our portfolio that are exposed to new energy solutions, specifically focused around reducing carbon emissions of the energy and broader industry, including: hydrogen; geothermal; carbon capture, utilization and storage; energy storage; clean power; and emissions abatement solutions. We expect to see continued growth in these businesses as new energy solutions become a more prevalent part of the broader energy mix.

Current wording

We have other businesses in our portfolio that are more correlated with various industrial metrics, including global GDP growth. We also have businesses within our portfolio that are exposed to new energy solutions, specifically focused around reducing carbon emissions of the energy and broader industry, including: hydrogen; geothermal; carbon capture, utilization and storage; energy storage; clean power; and emissions abatement solutions. We expect to see continued growth in these global businesses as new energy solutions become a more prevalent part of the broader energy mix.

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 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.

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 nine months ended September 30, 2024 and 2023, and should be read in conjunction with our condensed consolidated financial statements and related notes.

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 $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.

Current wording

Outside North America, customer spending is influenced by Brent oil prices. In North America, customer spending is influenced by WTI oil prices and natural gas prices are measured by the Henry Hub Natural Gas Spot Price.

Previous 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.

Current wording

The worldwide rig count was 1,733 for the third quarter of 2024, a decrease of 3% 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 10% when compared to the same period last year, partially offset by an increase in the Canada rig count, which was up 12% when compared to the same period last year. Internationally, the rig count decrease was driven primarily by a decrease in the Latin America, Asia-Pacific, and Europe regions of 10%, 2%, and 2%, respectively, when compared to the same period last year.

Previous wording

The worldwide rig count was 1,749 for the six months ended June 30, 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 driven by the U.S. rig count, which was down 17% when compared to the same period last year. Internationally, the rig count increase was driven by an increase in the Africa, Asia-Pacific, Middle East, and Europe regions of 16%, 5%, 5%, and 3%, respectively.

Current wording

The worldwide rig count was 1,743 for the nine months ended September 30, 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 driven by the U.S. rig count, which was down 15% when compared to the same period last year. Internationally, the rig count increase was driven primarily by an increase in the Africa, Middle East, Asia-Pacific, and Europe regions of 10%, 4%, 3%, and 1%, respectively.

Previous wording

Our condensed consolidated statements of income (loss) displays sales and costs of sales in accordance with the Securities and Exchange Commission ("SEC") regulations under which "goods" is required to include all sales of tangible products and "services" must include all other sales, including other service activities. For the amounts shown below, we distinguish between "equipment" and "product services," where product services refer to sales under product services agreements, including sales of both goods (such as spare parts and equipment upgrades) and related services (such as monitoring, maintenance and repairs), which is an important part of our operations. We refer to "product services" simply as "services" within the Business Environment section of Management's Discussion and Analysis.

Current wording

Our condensed consolidated statements of income (loss) display sales and costs of sales in accordance with the Securities and Exchange Commission ("SEC") regulations under which "goods" is required to include all sales of tangible products and "services" must include all other sales, including other service activities. For the amounts shown below, we distinguish between "equipment" and "product services," where product services refer to sales under product services agreements, including sales of both goods (such as spare parts and equipment upgrades) and related services (such as monitoring, maintenance and repairs), which is an important part of our operations. We refer to "product services" simply as "services" within the Business Environment section of Management's Discussion and Analysis.

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, significant restructuring plans, 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), unallocated corporate expenses, significant restructuring plans, impairment and other charges, inventory impairments, and certain gains and losses not allocated to the operating segments.

Previous wording

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

Current wording

Summarized orders information for our segments are shown in the following table.

Previous 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.

Current wording

(2)For the three and nine months ended September 30, 2024, total new energy orders incorporates CTS in IET of $0.2 billion and $0.8 billion, respectively.

Previous 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.

Current wording

The Remaining Performance Obligations ("RPO") relate to the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations. As of September 30, 2024, RPO totaled $33.4 billion, of which OFSE totaled $3.2 billion, and IET totaled $30.2 billion.

Previous 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.

Current wording

We recorded other non-operating income of $134 million in the third quarter of 2024, which included a net gain of $99 million from the change in fair value for certain equity investments. In the third quarter of 2023, we recorded $94 million of other non-operating income. Included in this amount was a net gain of $99 million from the change in fair value for certain equity investments.

Previous 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.

Current wording

Net interest expense incurred in the third quarter of 2024 was $55 million, which includes interest income of $18 million. Net interest expense increased $6 million compared to the third quarter of 2023, with lower interest income primarily driven by lower average cash on deposit.

Previous 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.

Current wording

We recorded income taxes in the third quarter of 2024 and 2023 of $235 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

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.

Current wording

OFSE revenue of$3,963 million increased $12 million in the third quarter of 2024 compared to the third quarter of 2023, driven by Subsea & Surface Pressure Systems ("SSPS"). From a geographical perspective, international revenue was $2,992 million, an increase of $106 million from the third quarter of 2023, primarily driven by the Europe/CIS/Sub-Saharan Africa regions, partially offset by the Latin America and Middle East/Asia regions. North America revenue was $971 million in the third quarter of 2024, a decrease of $93 million from the third quarter of 2023.

Previous 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").

Current wording

IET revenue of$2,945 million increased $254 million, or 9%, in the third quarter of 2024 compared to the third quarter of 2023. The increase was primarily driven by Climate Technology Solutions and across the Gas Technology business and, to a lesser extent, in Industrial Technology.

Previous wording

In the first six months of 2024, we recognized $21 million of restructuring, impairment, and other charges, compared to $158 million in the first six months of 2023. The charges in the first six months of 2023 primarily relate to employee termination expenses driven by actions taken to facilitate the 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.

Current wording

Restructuring, impairment, and other charges were $21 million in the first nine months of 2024, compared to $161 million in the first nine months of 2023. The charges in the first nine months of 2023 primarily related to employee termination expenses driven by actions taken to facilitate the 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 six months of 2024, we recorded $67 million of other non-operating income. Included in this amountwas a gain of $71 million fromthe change in fair value for certain equity investments. For the first six months of 2023, we recorded $544 million of other non-operating income. Included in this amount was a gain of$540 million from the change in fair value for certain equity investments.

Current wording

Other non-operating income in the first nine months of 2024 was $200 million, which includeda gain of $171 million fromthe change in fair value for certain equity investments. For the first nine months of 2023, we recorded $638 million of other non-operating income. Included in this amount was a gain of$639 million from the change in fair value for certain equity investments.

Previous wording

In the first six months of 2024, we incurred net interest expense of $88 million, which includes interest income of $56 million. Net interest expense decreased $34 million compared to the first six months of 2023, primarily driven by higher interest income.

Current wording

Net interest expense in the first nine months of 2024 was $143 million, which includes interest income of $74 million. Net interest expense decreased $28 million compared to the first nine months of 2023, primarily driven by higher interest income from the net impact of interest income and FX on cash held in Argentina and, to a lesser extent, lower interest expense following debt repayments.

Previous wording

In the first six months of 2024, the provision for income taxes was $421 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 first nine months of 2024 and 2023, the provision for income taxes was $656 million and $614 million, respectively. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily related to income in jurisdictions with tax rates higher than in the U.S. 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

OFSE revenue of$7,794 million increased $340 million, or 5%, in the first six months of 2024 compared to the first six months of 2023, as a result of SSPS project execution and increase in international activity, partially offset by North America activity. International revenue was $5,781 million in the first six months of 2024, an increase of $360 million from the first six months 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 $2,013 million in the first six months of 2024, a decrease of $20 million from the first six months of 2023.

Current wording

OFSE revenue of$11,757 million increased $352 million, or 3%, in the first nine months of 2024 compared to the first nine months of 2023, driven by SSPS and international markets, partially offset by North America. From a geographical perspective, international revenue was $8,773 million, an increase of $466 million from the first nine months of 2023, primarily driven by the Europe/CIS/Sub-Saharan Africa region, partially offset by the Latin America region. North America revenue was $2,984 million in the first nine months of 2024, a decrease of $113 million from the first nine months of 2023.

Previous wording

OFSE segment operating income was $915 million in thefirst six months of 2024 compared to $789 million in thefirst six months 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 $1,462 million in thefirst nine months of 2024 compared to $1,253 million in thefirst nine months of 2023. The improved performance 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$5,763 million increased $1,187 million, or 26%, in the first six months of 2024 compared to the first six months of 2023. The increase was primarily driven by higher volume in GTE and, to a lesser extent, in CTS, Industrial Technology and GTS.

Current wording

IET revenue of$8,708 million increased $1,442 million, or 20%, in the first nine months of 2024 compared to the first nine months of 2023. The increase was primarily driven by Gas Technology (predominately in GTE) and, to a lesser extent, in CTS and Industrial Technology.

Previous wording

IET segment operating income was $772 million in the first six months of 2024 compared to $552 million in the first six months of 2023. The operating income performance in the first six months of 2024 was driven by higher volume, price and cost-out initiatives, partially offset by unfavorable business mix and inflationary pressure.

Current wording

IET segment operating income was $1,246 million in the first nine months of 2024 compared to $898 million in the first nine months of 2023. The improved performance in the first nine months of 2024 was driven by higher volume, price, and cost-out initiatives, partially offset by unfavorable business mix and inflationary pressure.

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 June 30, 2024, we had cash and cash equivalents of $2.3 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 September 30, 2024, we had cash and cash equivalents of $2.7 billion compared to $2.6 billion at December 31, 2023.

Previous wording

In the U.S. we held cash and cash equivalents of approximately $0.6 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.

Current wording

In the U.S. we held cash and cash equivalents of approximately $0.5 billion and $0.6 billion and outside the U.S. of approximately $2.2 billion and $2.0 billion as of September 30, 2024 and December 31, 2023, respectively. A substantial portion of the cash held outside the U.S. at September 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 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.

Current wording

As of September 30, 2024 and December 31, 2023, we had $785 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

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.

Current wording

During the nine months ended September 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.

Previous wording

Cash flows provided by (used in) each type of activity were as follows for the six months ended June 30:

Current wording

Cash flows provided by (used in) each type of activity were as follows for the nine months ended September 30:

Previous wording

For the six months ended June 30, 2024, cash generated from operating activities were primarily driven by net income adjusted for certain noncash items (including depreciation, amortization, gain on equity securities, stock-based compensation cost, and deferred tax provision). Net working capital cash usage was $36 million for the six months ended June 30, 2024, mainly due to an increase in inventory and contract assets as we continue to build for growth, partially offset by accounts payable. Included in the cash flows from operating activities for the six months ended June 30, 2024 are payments of $130 million made primarily for employee severance as a result of our restructuring activities.

Current wording

For the nine months ended September 30, 2024, net working capital cash usage was $57 million, mainly due to an increase in inventory and contract assets as we continue to build for growth, partially offset by accounts receivables. Included in the cash flows from operating activities for the nine months ended September 30, 2024 are payments of $187 million made primarily for employee severance as a result of our restructuring activities.

Previous wording

For the six months ended June 30, 2023, cash generated from operating activities were primarily driven by net income adjusted for certain noncash items (including depreciation, amortization, gain on equity securities, stock-based compensation cost, deferred tax provision, and the impairment of certain assets). Net working capital cash generation was $176 million for the six months ended June 30, 2023, mainly due to strong progress collections on equipment contracts, partially offset by an increase in receivables and inventory as we build for growth.

Current wording

For the nine months ended September 30, 2023, net working capital cash generation was $19 million for the nine months ended September 30, 2023, mainly due to strong progress collections on equipment contracts, mostly offset by an increase in receivables and inventory as we built for growth.

Previous wording

Our principal recurring investing activity is the funding of capital expenditures including property, plant and equipment ("PP&E") and software, to support and generate revenue from operations. Expenditures for capital assets were $625 million and $587 million for the six months ended June 30, 2024 and 2023, respectively, partially offset by cash flows from the disposal of PP&E of $101 million and $87 million for the six months ended June 30, 2024 and 2023, respectively. Proceeds from the disposal of assets are primarily related to equipment that was lost-in-hole, predominantly in OFSE, and PP&E no longer used in operations that was sold throughout the period.

Current wording

Our principal recurring investing activity is the funding of capital expenditures including property, plant, and equipment ("PP&E") and software, to support and generate revenue from operations. Expenditures for capital assets were $925 million and $868 million for the nine months ended September 30, 2024 and 2023, respectively, partially offset by cash flows from the disposal of PP&E of $145 million and $150 million for the nine months ended September 30, 2024 and 2023, respectively. Proceeds from the disposal of assets are primarily related to equipment that was lost-in-hole, predominantly in OFSE, and PP&E no longer used in operations that was sold throughout the period.

Previous wording

During the six months ended June 30, 2023, we completed the acquisition of businesses for total cash consideration of $282 million, net of cash acquired, which consisted primarily of the acquisition of Altus Intervention in the OFSE segment. We also completed the sale of businesses and received total cash consideration of $293 million, which consisted primarily of the sale of our Nexus Controls business in the IET segment.

Current wording

During the nine months ended September 30, 2023, we completed the acquisition of businesses for total cash consideration of $301 million, net of cash acquired, which consisted primarily of the acquisition of Altus Intervention in the OFSE segment in the second quarter of 2023. We also completed the sale of businesses and received total cash consideration of $293 million, which consisted primarily of the sale of our Nexus Controls business in the IET segment in the second quarter of 2023.

Previous wording

During the six months ended June 30, 2024, we repaid long-term debt of $125 million primarily related to debentures that matured in June. We increased our quarterly dividend during the six months ended June 30, 2024 by one cent to $0.21 per share. We paid dividends of $419 million and $384 million to our Class A shareholders during the six months ended June 30, 2024 and 2023, respectively.

Current wording

During the nine months ended September 30, 2024, we repaid long-term debt of $134 million primarily related to debentures that matured in the second quarter of 2024. We increased our quarterly dividend during the nine months ended September 30, 2024 and 2023 by one cent to $0.21 and $0.20 per share, respectively. We paid dividends of $628 million and $586 million to our Class A shareholders during the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

We repurchased and canceled 10.5 million shares of Class A common stock for a total of $324 million during the six months ended June 30, 2024. During the six months ended June 30, 2023, we repurchased and canceled 3.6 million shares of Class A common stock for a total of $99 million.

Current wording

We repurchased and canceled 15.0 million shares of Class A common stock for a total of $476 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2023, we repurchased and canceled 7.0 million shares of Class A common stock for a total of $219 million.

Previous wording

Customer receivables: In line with industry practice, we may bill our customers for services provided in arrears dependent upon contractual terms. In a challenging economic environment, we may experience delays in the payment of our invoices due to customers' lower cash flow from operations or their more limited access to credit markets. While historically there have not been material non-payment events, we attempt to mitigate this risk through working with our customers to restructure their debts. A customer's failure or delay in payment could have a material adverse effect on our short-term liquidity and results of operations. Our gross customer receivables in the U.S. were 17% and in Mexico 10% as of June 30, 2024. No other country accounted for more than 10% of our gross customer receivables at this date.

Current wording

Customer receivables: In line with industry practice, we may bill our customers for services provided in arrears dependent upon contractual terms. In a challenging economic environment, we may experience delays in the payment of our invoices due to customers' lower cash flow from operations or their more limited access to credit markets. While historically there have not been material non-payment events, we attempt to mitigate this risk through working with our customers to restructure their debts. In regards to our primary customer in Mexico, we have not historically had any material write-offs due to uncollectible accounts receivable, nor are these balances currently in dispute. During 2024, we have issued a total of $475 million Credit Default Swaps to financial institutions, which were used to support borrowings for this customer, the proceeds from which were used to repay outstanding receivables.

Previous wording

International operations: Our cash that is held outside the U.S. is 75% of the total cash balance as of June 30, 2024. Depending on the jurisdiction or country where this cash is held, we may not be able to use this cash quickly and efficiently due to exchange or cash controls that could make it challenging. As a result, our cash balance may not represent our ability to quickly and efficiently use this cash.

Current wording

International operations: Our cash that is held outside the U.S. is 83% of the total cash balance as of September 30, 2024. Depending on the jurisdiction or country where this cash is held, we may not be able to use this cash quickly and efficiently due to exchange or cash controls that could make it challenging. As a result, our cash balance may not represent our ability to quickly and efficiently use this cash.