10-K – 2026-02-05 – bkr-20251231.htm

RISKS RELATED TO OUR STOCK
The market price and trading volume of our Class A common stock may be volatile, which could result in rapid and substantial losses for our shareholders.
The market price of our Class A common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our Class A common stock may fluctuate and cause significant price variations to occur. If the market price of our Class A common stock declines significantly, our shareholders may be unable to sell their shares of our Class A common stock at or above their purchase price, if at all. We cannot assure our shareholders that the market price of our Class A common stock will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect the price of our Class A common stock or result in fluctuations in the price or trading volume of our Class A common stock include: variations in our quarterly operating results; failure to meet our earnings estimates; publication of research reports about us or our industry; additions or departures of our executive officers and other key management personnel; adverse market reaction to any indebtedness we may incur or securities we may issue in the future; actions by shareholders; changes in market valuations of similar companies; speculation in the press or investment community; changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters; adverse publicity about our industry generally or individual scandals, specifically; and general market and economic conditions.
Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that might be considered favorable.
Our amended and restated certificate of incorporation and amended and restated bylaws may delay or prevent a merger or acquisition that a shareholder may consider favorable by permitting the Board to issue one or more series of preferred stock, requiring advance notice for shareholder proposals and nominations, and placing limitations on convening shareholder meetings. These provisions may also discourage acquisition proposals, delay, or prevent a change in control, which could harm our stock price.
Our fourth amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders' ability to obtain a favorable judicial forum for disputes with us.
Pursuant to our fourth amended and restated certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or (4) any action asserting a claim governed by the internal affairs doctrine. Our fourth amended and restated certificate of incorporation further provides that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the foregoing provision. The forum selection clause in our fourth amended and restated certificate of incorporation may limit our shareholders' ability to obtain a favorable judicial forum for disputes with us.
This exclusive forum provision applies to certain state law claims and will not apply to claims under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act. In addition, our shareholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. This choice of forum provision may limit a shareholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers and employees.

ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 1C. CYBERSECURITY
RISK MANAGEMENT & STRATEGY
Overall Process
We protect our digital systems and data through a comprehensive cybersecurity management program, which includes a dedicated cybersecurity function, risk assessments, policies and procedures, and technical measures and related services from third party service providers. We have a dedicated Chief Information Security Officer ("CISO") with overall responsibility for the cybersecurity program, including threat detection and response, vulnerability management, governance, risk and compliance, security strategy and architecture, security engineering and operations, product and operational technology security. As part of our cybersecurity management program, we operate a CFC to monitor both internal and external cybersecurity threats, conduct initial assessment of severity, coordinate incident response resources, reduce incident response time, and shift toward a proactive cyber-defense model, which includes a dedicated threat intelligence program that leverages custom intelligence platforms as well as industry specific professional associations and ongoing threat hunting. Through our cybersecurity risk management program, we monitor cybersecurity vulnerabilities and potential attack vectors and evaluate the potential operational and financial effects of any threat and countermeasures made to defend against such threats.
We have established policies and procedures, including our Incident Response Plan ("IRP"), for assessing, identifying, managing, and responding to events that may jeopardize the company digital information or systems, including protocols for assessing potential material impact from cybersecurity threats and incidents, escalating to executive leadership and the Board, engaging external stakeholders, and reporting incidents based on applicable legal requirements. Our IRP provides guidance in the event of a cybersecurity incident, including processes with assigned roles and responsibilities to triage, assess severity, escalate, contain, investigate, and remediate incidents, as well as to comply with applicable legal obligations and mitigate brand and reputational damage. We conduct regular tabletop exercises to test established policies and procedures for responding to cybersecurity threats and incidents. In addition, employees and stakeholders can report cybersecurity threats, cybersecurity and data privacy incidents, or other concerns through external and internal reporting channels.
Enterprise Risk Management Process Integration
Cybersecurity risk management processes are an integral part of our enterprise risk management, which is overseen by the Audit Committee of the Board. Our processes include periodic program maturity assessments, ongoing information technology risk assessments, and third-party security risks assessments.
Our cybersecurity risk management efforts have also been integrated into the overall Enterprise Risk Management ("ERM") process, which includes assessment of cybersecurity risks that could result in significant operational disruption to the Company, such as production disruption, business downtime, loss of containment or other operation interruptions, as well as risks that could have significant reputational and compliance/regulatory impact. Cybersecurity risks identified and tracked through our ERM risk register have assigned risk owners at the executive leadership level and risk delegates who are responsible to identify and manage risk mitigation actions. Key risk indicators are updated quarterly by risk delegates and communicated to our executive leadership and the Audit Committee.
We leverage recognized cybersecurity frameworks to drive strategic direction and maturity improvement and engage third party security experts for risk assessments, risk mitigation actions, and program enhancements. We also include cybersecurity training as part of our required annual employee training program. In addition, cybersecurity and privacy training and awareness is integrated and continues throughout the year, utilizing various delivery methods such as mock phishing campaigns, training sessions, and informational articles.
Third-Party Security Experts
We engage third-party security experts to supplement our internal CFC team as well as for assessments, penetration tests and program enhancements, including vulnerability assessments, security framework maturity assessments and identification of areas for continued focus and improvement. In addition, our third-party experts work with us to conduct tabletop exercises and internal phishing awareness campaigns. We use the findings of
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these exercises to improve our practices, procedures, and technologies. We also engage third-party security experts to support our cybersecurity threat and incident response management and maintain information security risk insurance coverage.
Identification of Threats Associated with Third Parties
Baker Hughes utilizes a third-party risk management ("TPRM") program to identify, assess, monitor, and mitigate risks associated with suppliers and vendors, including cybersecurity risks. We conduct initial risk assessments of third-party suppliers and service providers based on various factors to classify each into a risk category. Our TPRM program is designed to apply our most rigorous processes to those suppliers and service providers that are classified into the highest risk category. These processes include due diligence assessments of third-party suppliers and service providers that have access to Baker Hughes networks, digital confidential information, and information systems in order to assess the risks from cybersecurity threats that could impact our suppliers and third-party service providers. We leverage external partners to assist with the regular assessment of our top-priority suppliers and third-party service providers to identify, review and address risks, including deeper reviews of their cybersecurity controls. We track the identified deficiencies and include with other cybersecurity metrics based on their severity. We also require that our suppliers and third-party service providers have in place appropriate technical and organizational security measures and security-control principles based on recognized cybersecurity standards.
Incidents & Risks
To our knowledge, we have not experienced a material cybersecurity incident and although we are subject to ongoing and evolving cybersecurity threats, we are not aware of any material risks from cybersecurity threats that have affected the Company. For more information on our cybersecurity risks, see "Technology Risks" identified in the "Risk Factors" section of Part 1 of Item 1A herein .
GOVERNANCE
Board of Directors
Oversight responsibilities for our cybersecurity and digital security programs and risks lie with the Audit Committee of the Board. The Board is actively engaged in the oversight of our cybersecurity and digital security programs and oversees all operational, financial, strategic, and reputational risks with oversight of specific risks undertaken with the committee structure including risks related to cybersecurity, data security, and technology.
The Audit Committee receives reports on our cybersecurity program and developments from our CISO at each of our regular meetings, which occu r at least four times per year. These reports typically include analyses of recent cybersecurity threats and incidents at the Company and across the industry, as well as a review of our own security controls, assessments and program maturity, and risk mitigation status, as well as a review of our third-party service providers. Our digital technology, legal, and the corporate audit functions also routinely present to the Audit Committee on key cybersecurity topics and, on at least an annual basis, the Board receives reports on our cybersecurity program and developments from the CISO.
Management
Our programs are focused on building digital trust through sound oversight of cybersecurity and data privacy protections and the responsible use of data and technology. We operate a CFC, and we have a cross-functional approach to addressing cybersecurity-related risks through the functional compliance structures in our digital technology and legal organizations with oversight from the corporate audit and controllership functions. The cybersecurity and legal functions employ full-time resources in cybersecurity and privacy roles with expertise in managing cybersecurity and privacy compliance and risks and responding to incidents.
Our senior executive leadership is actively engaged in the oversight and strategic direction of our cybersecurity and digital data protection programs. The senior executive leadership-level Cybersecurity Steering Committee ("CSC") is responsible for assessing cybersecurity risks, providing direction and oversight for risk mitigation action, and assisting the Audit Committee in overseeing the Company’s cybersecurity risks. The CSC also receives monthly reports on the Company's cybersecurity program and developments from our CISO and legal representatives. The
Baker Hughes Company 2025 Form 10-K | 31

CSC is chaired by our CISO. The senior executive leadership members include the Chief Information & Infrastructure Officer; Chief Legal Officer; Executive Vice President and Chief Financial Officer; Vice President, Chief Compliance Officer and Corporate Secretary; and Chief Infrastructure & Performance Officer.
The CISO has over 25 years of business experience in information technology and cybersecurity and is a long-standing certified information systems security professional ("CISSP") with the International Information System Security Certification Consortium.
We have an Incident Response Team ("IRT") that consists primarily of representatives from the CFC, legal, corporate communications, finance, and other relevant stakeholders. The IRT follows the guidance as outlined in the IRP to respond to cybersecurity incidents and escalate as necessary to the CSC based on a defined severity matrix. Internal legal and finance stakeholders are responsible for assessing materiality of risks in consultation with the IRT, CSC, the CEO, and external advisors.

ITEM 2. PROPERTIES
We own or lease numerous properties throughout the world. We consider our manufacturing plants, equipment assembly, maintenance and overhaul facilities, grinding plants, drilling fluids and chemical processing centers, and primary research and technology centers to be our principal properties. The following sets forth the location of our principal owned or leased facilities for our business segments as of December 31, 2025:

Oilfield Services & Equipment: Houston, Pasadena, and The Woodlands, Texas; Claremore, Oklahoma - all located in the United States; Leduc, Canada; Celle, Germany; Tananger, Norway; Aberdeen and Montrose, Scotland; Nailsea and Newcastle, England; Macae and Niteroi, Brazil; Singapore, Singapore; Jandakot, Australia; Kakinada, India; Mesaieed, Qatar; Abu Dhabi and Dubai, United Arab Emirates; Dammam and Dhahran, Saudi Arabia; Luanda, Angola; Port Harcourt, Nigeria

Industrial & Energy Technology: Pasadena and Houston, Texas; Minden, Nevada - all located in the United States; Florence, Massa, Avenza, Bari, and Talamona, Italy; Calgary, Canada; Le Creusot, France; Fot, Hungary; Hurth and Wunstorf, Germany; Pilsen, Czech Republic; Shanghai and Suzhou, China; Dammam, Saudi Arabia; Coimbatore, India

We lease our corporate headquarters in Houston, Texas. We also own or lease numerous other facilities such as service centers, blend plants, workshops, and sales and administrative offices throughout the geographic regions in which we operate. We also have a significant investment in service vehicles, tools, and manufacturing and other equipment. All of our owned properties are unencumbered. We believe that our facilities are well maintained and suitable for their intended purposes and are operating at a level consistent with the requirements of the industry in which we operate.

ITEM 3. LEGAL PROCEEDINGS
The information with respect to Item 3. Legal Proceedings is contained in "Note 19. Commitments and Contingencies" of the Notes to Consolidated Financial Statements in Item 8 herein.

ITEM 4. MINE SAFETY DISCLOSURES
Our barite mining operations, in support of our OFSE segment, are subject to regulation by the Federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977. Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Annual Report.
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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our Class A common stock, $0.0001 par value per share, is traded on the Nasdaq Global Select Market under the ticker symbol 'BKR'. As of January 22, 2026, there were approximately 5,141 stockholders of record.
The following table contains information about our purchases of Class A common stock equity securities during the fourth quarter of 2025.
Issuer Purchases of Equity Securities

Period Total Number
of Shares
Purchased (1)
Average
Price Paid
Per Share  (2)
Total Number of Shares Purchased as Part of a Publicly Announced
Program  (3) (4)
Approximate Dollar Value
of Shares that May Yet Be
Purchased Under the Program (3) (4)

October 1-31, 2025
2,829  $ 46.76  —  $ 1,348,978,828 
November 1-30, 2025
2,693  48.21  —  $ 1,348,978,828 
December 1-31, 2025
1,581  49.50  —  $ 1,348,978,828 
Total 7,103  $ 47.92  — 

(1) Represents Class A common stock purchased from employees to satisfy the tax withholding obligations primarily in connection with the vesting of restricted stock units.
(2) Average price paid for Class A common stock purchased from employees to satisfy the tax withholding obligations in connection with the vesting of restricted stock units and shares purchased in the open market under our publicly announced purchase program.
(3) On July 30 2021, the Board authorized the Company to repurchase up to $2 billion of its Class A common stock. On October 27, 2022, the Board authorized an increase to our repurchase program of $2 billion of additional Class A common stock, increasing its existing repurchase authorization of $2 billion to $4 billion. The repurchase program may be suspended or discontinued at any time and does not have a specified expiration date.
(4) During the three months ended December 31, 2025, we repurchased no shares of Class A common stock.
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Corporate Performance Graph
The following graph compares the yearly change in our cumulative total shareholder return on our common stock (assuming reinvestment of dividends into common stock at the date of payment) with the cumulative total return on the published Standard & Poor's ("S&P") 500 Stock Index, the cumulative total return on the S&P 500 Oil and Gas Equipment and Services Index, and the Philadelphia Oil Service Index ("OSX") over the preceding five year period. Although the Company is not a component of the OSX, this index represents a large group of companies with similar industry exposure, many of which provide the same or similar equipment and services as the Company.
Comparison of Five-Year Cumulative Total Return
BKR, S&P 500 Stock Index, S&P 500 Oil and Gas Equipment and Services Index, and OSX

2020 2021 2022 2023 2024 2025
Baker Hughes Company ("BKR") $ 100.00  $ 118.97  $ 149.79  $ 177.60  $ 218.60  $ 247.93 
S&P 500 Stock Index 100.00  128.68  105.36  133.03  166.28  195.98 
S&P 500 Oil and Gas Equipment and Services Index
100.00  127.56  210.25  214.06  186.98  200.63 
Philadelphia Oil Service Index ("OSX") 100.00  120.74  194.98  198.71  175.53  181.72 

The comparison of total return on investment (change in year-end stock price plus reinvested dividends) assumes that $100 was invested on December 31, 2020 in Baker Hughes common stock, the S&P 500 Index, the S&P 500 Oil and Gas Equipment and Services Index, and the OSX.
The corporate performance graph and related information shall not be deemed "soliciting material" or to be "filed" with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that Baker Hughes specifically incorporates it by reference into such filing.

ITEM 6. [RESERVED]
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the consolidated financial statements included in Item 8. Financial Statements and Supplementary Data contained herein.
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 operate through our two business segments: OFSE and IET. We sell products and services primarily in the global oil and gas and broader energy and industrial markets.
EXECUTIVE SUMMARY
Market Conditions
During 2025, we saw a decline in global upstream capital spending as a result of ongoing geopolitical tensions, uncertainty around international trade policy, and operator concerns about the accelerated return of idled supply from the Organization of the Petroleum Exporting Countries and its allies ("OPEC+").
As we look to 2026, during which we anticipate modestly stronger year-over-year GDP growth, oil prices are likely to reflect evolving market conditions, as markets assess geopolitical uncertainty and its potential impact on supply against rising OPEC+ and offshore production. Taking these macro factors into consideration, we forecast modest declines in global upstream spending. We believe further reduction in idled OPEC+ production, alongside more constructive oil supply-and-demand balances, is required before a broad inflection in oilfield services activity emerges. Longer term, the outlook remains constructive, particularly internationally and offshore, where significant investment will be required to sustain production growth and meet rising global oil demand. We also see continued growth in OpEx-driven upstream investment, as operators focus on enhancing recovery rates and extending the life of existing assets.
Following approximately 7% growth in LNG demand in 2025, we remain optimistic on the global natural gas outlook, supported by increasing demand for LNG and a continued shift towards natural gas developments. We believe the positive fundamentals are less affected by macro uncertainty but are driven by continued long-term energy demand growth, which is being driven by population growth, higher living standards, and accelerating electrification, with AI and data center expansion adding a new structural layer of power demand. Increasingly, natural gas is the source of this power due to its reliable, scalable, and dispatchable nature, coupled with its ability to lower emissions throughout the energy ecosystem.
Financial Results and Key Company Initiatives
In 2025, the Company generated revenues of $27.7 billion, a decrease of $0.1 billion compared to 2024. IET revenue increased $1.2 billion, or 10%, driven by strong growth in Gas Technology Equipment ("GTE") and Gas Technology Services ("GTS"). OFSE revenue decreased $1.3 billion, or 8%, driven by a decline in revenue in all regions. Net income was $2.6 billion, a decrease of $0.4 billion, or 13%, compared to 2024, with a decline in the mark-to-market adjustment for certain equity securities, change in mix, transaction related costs and lower volume, partially offset by cost out initiatives, net productivity and price.
As a part of our anticipated acquisition of Chart, Chart shareholders approved the acquisition of Chart by the Company (the "Chart acquisition") on October 6, 2025. With regulatory reviews still underway in certain jurisdictions, we presently expect closing in the second quarter of 2026, understanding that the timing may evolve as those processes progress. On portfolio management actions, we closed the acquisition of Continental Disc Corporation ("CDC") on August 7, 2025. The sale of Precision Sensors & Instrumentation to Crane Company and the creation of the Surface Pressure Control joint venture with Cactus closed on January 1, 2026.
In the first quarter of 2025, we increased our quarterly dividend by two cents to $0.23 per share. For the full year of 2025, we returned a total of $1.3 billion to shareholders in the form of dividends and share repurchases.
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Outlook
Our business is exposed to a number of macro factors, which influence our outlook and expectations given the current macroeconomic uncertainty and continued volatile conditions in the industry. All of our outlook expectations are purely based on the market as we see it today and are subject to changing conditions in the industry.
• OFSE outlook: We expect continued soft market conditions through most of 2026, reflecting customer caution amid oil price uncertainty, with the potential for modest improvement later in the year as excess oil supply begins to moderate.
• IET outlook: We see sustained strength in LNG and gas infrastructure, as well as increasing opportunities to leverage our versatile portfolio to enhance IET's position across industrial and distributed power markets, with a growing emphasis on data centers.
We also expect to see continued growth in new energy solutions specifically focused on reducing carbon emissions for the energy and broader industrial sectors. These include hydrogen; geothermal; CCUS; energy storage; clean power; and emissions abatement solutions. Continued signs of tightness in the aeroderivative supply chain, including extended lead times, will remain a factor to monitor and manage operationally.
Overall, we believe our portfolio is uniquely positioned to compete across the energy and industrial value chains and deliver integrated, high-impact solutions for our customers. Over time, we believe global energy demand will continue to rise, supported by durable, secular macroeconomic trends, with hydrocarbons continuing to play a fundamental role in meeting the world's energy needs. As such, we remain focused on delivering innovative, lower-emission, and cost-effective solutions that drive meaningful improvements in operational and financial performance for our customers.

BUSINESS ENVIRONMENT
The following discussion and analysis summarizes the significant factors affecting our results of operations, financial condition, and liquidity position as of and for the years ended December 31, 2025, 2024, and 2023, and should be read in conjunction with our consolidated financial statements and related notes.
Our revenue is predominantly generated from the sale of products and services to major, national, and independent oil and natural gas companies worldwide, and is dependent on spending by our customers for oil and natural gas exploration, field development, and production. This spending is driven by a number of factors, including our customers' forecasts of future energy demand and supply, their access to resources to develop and produce oil and natural gas, their ability to fund their capital programs, the impact of new government regulations, and their expectations for oil and natural gas prices as a key driver of their cash flows.
Oil and Natural Gas Prices
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 as measured by the Henry Hub Natural Gas Spot Price.
Oil and natural gas prices are summarized in the table below as averages of the daily closing prices during each of the periods indicated.

2025 2024 2023
Brent oil prices ($/Bbl) (1)
$ 69.14  $ 80.52  $ 82.49 
WTI oil prices ($/Bbl) (2)
65.39  76.63  77.58 
Natural gas prices ($/mmBtu) (3)
3.52  2.19  2.53 

(1) Energy Information Administration ("EIA") Europe Brent ("Brent") Spot Price per Barrel
(2) EIA Cushing, OK West Texas Intermediate ("WTI") Spot Price per Barrel
(3) EIA Henry Hub Natural Gas Spot Price per million British Thermal Unit
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Rig Count
Rig counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active or operating, they consume products and services produced by the oil service industry. Therefore, rig counts may act as a leading indicator of market activity and reflect the relative strength of energy prices; however, these counts should not be solely relied on as other specific and pervasive conditions may exist that affect overall energy prices and market activity.
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.
The rig counts are summarized in the table below as averages for each of the periods indicated based on our published rig counts on our website at www.bakerhughes.com.

2025 2024 2023
North America 738  787  866 
International 1,080  1,161  1,221 
Worldwide 1,818  1,948  2,087 

RESULTS OF OPERATIONS
The discussions below relating to significant line items from our consolidated statements of income are based on available information and represent our analysis of significant changes or events that impact the comparability of reported amounts. Where appropriate, we have identified specific events and changes that affect comparability or trends and, where reasonably practicable, have quantified the impact of such items. In addition, the discussions below for revenue and cost of revenue are on a total basis as the business drivers for product sales and services are similar. All dollar amounts in tabulations in this section are in millions of dollars, unless otherwise stated. Certain columns and rows may not add due to the use of rounded numbers.
Our consolidated statements of income display sales and costs of sales in accordance with 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 MD&A.
Our results of operations are evaluated by our chief operating decision maker, who is the Company's Chief Executive Officer, on a consolidated basis as well as at the segment level. The performance of each segment is evaluated 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).
In evaluating the performance, we primarily use the following:
Volume : Volume is defined as the increase or decrease in products and/or services sold period-over-period excluding the impact of FX and price. The volume impact on profit is calculated by multiplying the prior period profit rate by the change in revenue volume between the current and prior period.
Price: Price is defined as the change in sales price for a comparable product or service period-over-period and is calculated as the period-over-period change in sales prices of comparable products and services.
Business Mix: Business mix is defined as period-over-period change in sales mix within segments.
Cost out initiatives: Cost out initiatives, including restructuring programs.
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FX: FX measures the translational foreign exchange impact, or the translation impact of the period-over-period change on sales and costs directly attributable to change in the FX rate compared to the U.S. dollar. FX impact is calculated by multiplying the functional currency amounts (revenue or profit) with the period-over-period FX rate variance, using the average exchange rate for the respective period. This also includes the period-over-period variance of transactional foreign exchange, aside from those foreign currency devaluations that are reported separately for business evaluation purposes.
( Inflation)/Deflation : (Inflation)/deflation is defined as the increase or decrease in direct and indirect costs of the same type for an equal amount of volume. It is calculated as the year-over-year change in cost (i.e. price paid) of direct material, compensation and benefits, and overhead costs.
Productivity : Productivity is measured by the remaining variance in profit, after adjusting for the period-over-period impact of volume, price, business mix, FX, and (inflation)/deflation as defined above. Improved or lower period-over-period cost productivity is the result of production, schedule and cost efficiencies or inefficiencies.
Orders and Remaining Performance Obligations
Summarized orders information for our segments are shown in the following table.

Year Ended December 31, $ Change
2025 2024 2023 From 2024 to 2025
From 2023 to 2024

Orders:

Oilfield Services & Equipment $ 14,714   $ 15,240   $ 16,344   $ (526) $ (1,104)
Gas Technology Equipment 6,075  5,675  7,367  399  (1,692)
Gas Technology Services 3,769  3,141  3,004  628  137 
Total Gas Technology 9,844  8,816  10,372  1,027  (1,555)
Industrial Products 2,097  2,079  2,069  19  10 
Industrial Solutions 1,296  1,151  1,085  145  66 
Controls (1)
—  —  66  —  (66)
Total Industrial Technology 3,393  3,230  3,220  163  10 
Climate Technology Solutions (2)
1,634  954  586  681  367 
Industrial & Energy Technology 14,871   13,000   14,178   1,871   (1,178)
Total $ 29,585   $ 28,240   $ 30,522   $ 1,345   $ (2,282)

(1) The sale of our controls business was completed in April 2023.
(2) For the years ended December 31, 2025, 2024, and 2023, total new energy orders incorporates Climate Technology Solutions ("CTS") in IET.
The RPO relate to the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations. As of December 31, 2025, RPO totaled $35.9 billion, of which OFSE totaled $3.5 billion and IET totaled $32.4 billion.
Fiscal Year 2025 to Fiscal Year 2024
Revenue decreased $0.1 billion to $27.7 billion. OFSE decreased $1.3 billion, or 8%, and IET increased $1.2 billion, or 10%.
Selling, general and administrative costs decreased $71 million, or 3%, to $2,387 million.
Research and development costs decreased $43 million, or 7%, to $600 million.
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Restructuring charges were $215 million in 2025, primarily related to employee termination expenses and footprint consolidation. In 2024, restru cturing charges were $260 million, primarily related to streamlining of the OFSE operating model.
We recorded other expense of $243 million in 2025, which included $107 million of transaction costs related to business acquisition and disposal activities and a net loss of $103 million from the change in fair value of equity securities. In 2024, we recorded $341 million of other income. Included in this amount was a net gain of $367 million from the change in fair value of equity securities.
Net interest expense incurred in 2025 was $222 million, which includes interest income of $82 million. Net interest expense increased $25 million compared to 2024.
We recorded income taxes in 2025 and 2024 of $253 million and $257 million, respectively. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily the net impact of $308 million and $664 million reversal of valuation allowances in 2025 and 2024, respectively, with the rate in both years also reflecting income generated in jurisdictions with tax rates higher than in the U.S. and losses with no tax benefit due to valuation allowances. The valuation allowances on the associated deferred tax assets have been released as a result of the U.K. and the U.S. moving into and/or maintaining cumulative three-year profit positions, demonstrating an increasing pattern of profitability, along with recent tax credit utilization, and the forecasted continuation of profitability in both jurisdictions.
Net income decreased $0.4 billion, or 13%, to $2.6 billion compared to 2024.
Segment Revenues and Segment EBITDA
Oilfield Services & Equipment

Year Ended December 31,
2025 2024 $ Change
Revenue

Well Construction $ 3,646  $ 4,145  $ (499)
Completions, Intervention, and Measurements
3,750  4,154  (403)
Production Solutions 3,806  3,860  (54)
Subsea & Surface Pressure Systems 3,122  3,470  (348)
Total
$ 14,324   $ 15,628   $ (1,304)

Cost of goods and services sold
$ 11,532  $ 12,448  $ (915)
Research and development costs
241  260  (19)
Selling, general and administrative
876  932  (57)
Other (income) expense
(11) —  (11)
Less: Depreciation and amortization
(932) (893) (40)

Segment EBITDA
$ 2,618   $ 2,881   $ (263)

OFSE revenue of $14,324 million decreased $1,304 million, or 8%, in 2025 compared to 2024, due to reduced oilfield activity as reflected in the reduced rig count. From a geographical perspective, international revenue was $10,551 million, a decrease of $1,121 million, or 10%, from 2024, down in all regions. North America revenue was $3,773 million in 2025, a decrease of $183 million, or 5%, from 2024.
OFSE segment EBITDA of $2,618 million decreased $263 million, or 9%, in 2025 compared to 2024. The reduction of EBITDA in 2025 was a result of lower volume, change in mix, and inflation, partially offset by cost out initiatives, and overall productivity.
Baker Hughes Company 2025 Form 10-K | 39

Industrial & Energy Technology

Year Ended December 31,
2025 2024 $ Change
Revenue
Gas Technology Equipment $ 6,619  $ 5,693  $ 926 
Gas Technology Services 3,028  2,797  231 
Total Gas Technology 9,647  8,490  1,157 
Industrial Products 1,991  2,040  (49)
Industrial Solutions 1,123  1,065  58 

Total Industrial Technology 3,114  3,105  9 
Climate Technology Solutions 647  605  42 
Total
$ 13,409   $ 12,201   $ 1,208  

Cost of goods and services sold
$ 9,594  $ 8,738  $ 856 
Research and development costs
359  383  (24)
Selling, general and administrative
1,215  1,250  (35)
Other (income) expense
(8) —  (8)
Less: Depreciation and amortization
(233) (220) (13)

Segment EBITDA
$ 2,482   $ 2,050   $ 432  

IET revenue of $13,409 million increased $1,208 million, or 10%, in 2025 compared to 2024, driven by GTE and GTS.
IET segment EBITDA of $2,482 million increased $432 million, or 21%, in 2025 compared to 2024. The improved performance in 2025 was driven by higher volume, price, FX, cost out initiatives, partially offset by inflation, and change in mix.
Fiscal Year 2024 to Fiscal Year 2023
Revenue increased $2.3 billion, or 9%, to $27.8 billion. OFSE increased $0.3 billion, or 2%, and IET increased $2.1 billion, or 20%.
Selling, general and administrative costs decreased $153 million, or 6%, to $2,458 million driven primarily by a continued focus on cost optimization, partially offset by inflationary pressure.
Research and development costs decreased $8 million, or 1%, to $643 million.
Restructuring charges were $260 million in 2024, primarily related to streamlining of the OFSE operating model. In 2023, restructuring charges were $313 million reflecting costs to align the business with the Company's market outlook.
We recorded other income of $341 million and $544 million in 2024 and 2023, respectively, which included a net gain of $367 million and $555 million, respectively, from the change in fair value of equity securities.
Net interest expense incurred in 2024 was $198 million, which includes interest income of $93 million. Net interest expense decreased $18 million compared to 2023, with higher interest income primarily driven by higher average cash on deposit.
We recorded income taxes in 2024 and 2023 of $257 million and $685 million, respectively. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily impacted by the $664 million reversal of a valuation allowance in 2024, with the rate in both years also reflecting income generated in jurisdictions with tax rates higher than in the U.S. and losses with no tax benefit due to valuation allowances. The
Baker Hughes Company 2025 Form 10-K | 40

valuation allowance on the associated deferred tax assets has been released as a result of the U.S. moving into and maintaining a cumulative three-year profit position, which is supported by an increasing pattern of profitability, recent demonstration of tax credit utilization, and the forecasted continuation of profitability in the U.S.
Net income increased $1 billion, or 53%, to $3 billion compared to 2023.
Segment Revenues and Segment EBITDA
Oilfield Services & Equipment

Year Ended December 31,

2024 2023 $ Change

Revenue

Well Construction $ 4,145  $ 4,387  $ (242)
Completions, Intervention, and Measurements
4,154  4,170  (16)
Production Solutions 3,860  3,854  6 
Subsea & Surface Pressure Systems 3,470  2,950  520 
Total
$ 15,628   $ 15,361   $ 268  

Cost of goods and services sold
$ 12,448  $ 12,282  $ 166 
Research and development costs
260  278  (18)
Selling, general and administrative
932  1,055  (123)

Less: Depreciation and amortization
(893) (849) (44)

Segment EBITDA
$ 2,881   $ 2,595   $ 286  

OFSE revenue of $15,628 million increased $268 million, or 2%, in 2024 compared to 2023, driven by Subsea & Surface Pressure Systems ("SSPS"). From a geographical perspective, international revenue was $11,673 million, an increase of $428 million, or 4%, from 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 $3,955 million in 2024, a decrease of $161 million, or 4%, from 2023.
OFSE segment EBITDA of $2,881 million increased $286, or 11%, in 2024 compared to 2023. The improved performance in 2024 was a result of higher price, cost-out initiatives, and, to a lesser extent, volume with higher proportionate growth in SSPS, partially offset by inflationary pressure.
Baker Hughes Company 2025 Form 10-K | 41

Industrial & Energy Technology

Year Ended December 31,

2024 2023 $ Change

Revenue
Gas Technology Equipment $ 5,693  $ 4,232  $ 1,461 
Gas Technology Services 2,797  2,600  197 
Total Gas Technology 8,490  6,832  1,658 
Industrial Products 2,040  1,962  78 
Industrial Solutions 1,065  983  81 
Controls (1)
—  41  (41)
Total Industrial Technology 3,105  2,987  118 
Climate Technology Solutions 605  326  279 
Total
$ 12,201   $ 10,145   $ 2,055  

Cost of goods and services sold
$ 8,738  $ 7,220  $ 1,518 
Research and development costs
383  373  10 
Selling, general and administrative
1,250  1,242  8 

Less: Depreciation and amortization
(220) (217) (3)

Segment EBITDA
$ 2,050   $ 1,527   $ 523  

(1) The sale of our controls business was completed in April 2023.
IET revenue of $12,201 million increased $2,055 million, or 20%, in 2024 compared to 2023 . The increase was primarily in GTE, and, to a lesser extent, in GTS.
IET segment EBITDA of $2,050 million increased $523, or 34%, in 2024 compared to 2023 . The improved performance in 2024 was driven by higher volume primarily from higher proportionate growth in GTE, price, and cost-out initiatives, partially offset by inflationary pressure.

LIQUIDITY AND CAPITAL RESOURCES
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 sufficient liquidity. At December 31, 2025, we had cash and cash equivalents of $3.7 billion, compared to $3.4 billion at December 31, 2024.
In the U.S. we held cash and cash equivalents of approximately $0.7 billion and $0.6 billion as of December 31, 2025 and 2024, respectively, and outside the U.S. of approximately $3.0 billion and $2.8 billion as of December 31, 2025 and 2024, respectively. A substantial portion of the cash held outside the U.S. at December 31, 2025 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.
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 December 31, 2025 and 2024, there were no borrowings under the Credit Agreement.
Certain Senior Notes contain covenants that restrict our ability to take certain actions. See "Note 9. Debt" of the Notes to Consolidated Financial Statements in this Annual Report for further details. At December 31, 2025, we were in compliance with all debt covenants. Our next debt maturity is December 2026.
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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.
On July 28, 2025, we entered into a definitive agreement to acquire all outstanding shares of Chart's common stock for $210 per share in cash, equivalent to a total enterprise value of approximately $13.6 billion. Our expected sources of funds for the acquisition include cash and cash equivalents to be generated from cash flow from operations, expected asset sales proceeds, and new debt financing. As a result, we entered into a senior unsecured 364-day bridge facility (the "Bridge Facility") and a senior unsecured delayed-draw term loan facility (the "DDTL"). The final structure of the new debt financing will be determined prior to transaction close. The incurrence of new indebtedness would increase our leverage and debt service requirements, which could impact our future financial condition and results of operations.
During the year ended December 31, 2025, we dispersed cash to fund a variety of activities, including certain working capital needs, capital expenditures, business acquisitions, the payment of dividends, and repurchases of our common stock.
Cash Flows
Cash flows provided by (used in) each type of activity were as follows for the years ended December 31:

(In millions) 2025 2024 2023
Operating activities $ 3,810  $ 3,332  $ 3,062 
Investing activities (2,044) (1,016) (817)
Financing activities (1,482) (1,527) (2,028)

Operating Activities
Cash flows provided by operating activities were $3,810 million, $3,332 million, and $3,062 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Our largest source of operating cash is payments from customers, of which the largest component is collecting cash related to our sales of products and services, including advance payments or progress collections for work to be performed. The primary use of operating cash is to pay our suppliers, employees, tax authorities, and others for a wide range of goods and services.
Cash from operating activities is primarily generated from net income or loss, adjusted for certain noncash items (including depreciation, amortization, change in fair value of equity securities, stock-based compensation cost, deferred tax benefit or provision, and the impairment of certain assets).
In 2025, net working capital cash generation was $713 million, mainly due to strong collections of receivables and contract assets, partially offset by progress collections.
In 2024, net working capital cash generation was $7 million, mainly due to progress collections, mostly offset by an increase in receivables, inventory, and contract assets as the business continued to expand.
In 2023, net working capital cash generation was $42 million, mainly due to strong progress collections on equipment contracts, mostly offset by an increase in receivables and inventory due to expansion of the business.
Included in the cash flows from operating activities in 2025, 2024, and 2023 are payments of $182 million, $217 million, and $142 million, respectively, made primarily for employee severance as a result of our restructuring activities.
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Investing Activities
Cash flows used in investing activities were $2,044 million, $1,016 million, and $817 million for the years ended December 31, 2025, 2024, and 2023, respectively.
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 $1,273 million, $1,278 million, and $1,224 million for 2025, 2024, and 2023, respectively, partially offset by cash flows from the disposal of PP&E of $195 million, $203 million, and $208 million in 2025, 2024, and 2023, respectively. Proceeds from the disposal of assets were primarily related to OFSE equipment that was lost-in-hole, and PP&E no longer used in operations that was sold throughout the period.
In 2025, we completed the acquisition of CDC in the IET segment in an all-cash transaction for approximately $543 million.
In 2025, we entered into an agreement to acquire Chart. Under the terms of the agreement, we paid $258 million for the termination fee and the reimbursement of certain expenses on behalf of Chart to Flowserve Corporation ("Flowserve"), as a result of the termination of the merger agreement by and among Chart, Flowserve, and certain subsidiaries of Flowserve.
In 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. 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.
We had proceeds from the sale of certain equity securities of $1 million, $92 million, and $372 million in 2025, 2024, and 2023, respectively.
The Central Bank of Argentina maintains currency controls that limit our ability to access U.S. dollars and remit cash from our Argentine operations. There is an indirect foreign exchange mechanism known as a Blue Chip Swap that enables companies to transfer U.S. dollars out of and into Argentina, effectively at a parallel U.S. dollar exchange rate. In 2024 and 2023, we entered into transactions in order to remit cash from our Argentine operations, resulting in a net loss and a net cash outflow of $7 million and $66 million, respectively, which is included in other investing activities.
Financing Activities
Cash flows used in financing activities were $1,482 million, $1,527 million, and $2,028 million for the years ended December 31, 2025, 2024, and 2023, respectively.
We increased our quarterly dividend by two cents to $0.23 and one cent to $0.21 per share in 2025 and 2024, respectively. We paid dividends of $910 million, $836 million, and $786 million to our Class A stockholders in 2025, 2024, and 2023, respectively.
We repurchased and canceled 9.8 million, 15.2 million, and 16.3 million shares of Class A common stock for a total of $384 million, $484 million, and $538 million, for the years ended December 31, 2025, 2024, and 2023, respectively.
In 2024, we repaid long-term debt of $143 million, primarily related to debentures that matured in the second quarter of 2024. In 2023, we repaid long-term debt of $651 million, primarily related to certain senior notes that matured in December of 2023.
Cash Requirements
We believe cash on hand, cash flows from operating activities, the available revolving credit facility, access to our uncommitted lines of credit, the Bridge Facility, the DDTL, and availability under our existing shelf registrations of debt will provide us with sufficient capital resources and liquidity in the short-term and long-term to manage our
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working capital needs; meet contractual obligations; fund strategic growth initiatives, capital expenditures, and dividends; repay debt; repurchase our common stock; and support the development of our short-term and long-term operating strategies.
Our capital expenditures can be adjusted and managed by us to match market demand and activity levels. Based on current market conditions, capital expenditures in 2026 will be made at a rate that we estimate would equal up to 5% of annual revenue. The expenditures are expected to be used primarily for normal, recurring items necessary to support our business.
Based on our current outlook, we anticipate making income tax payments in the range of $1.0 billion in 2026.
Contractual Obligations and Commitments
Our material cash commitments from known contractual and other obligations consist primarily of obligations for long-term debt and related interest, leases for property and equipment, and purchase obligations as part of normal operations. Certain amounts included in our contractual obligations as of December 31, 2025 are based on our estimates and assumptions about these obligations, including their duration, anticipated actions by third parties, and other factors.
See "Note 9. Debt" of the Notes to Consolidated Financial Statements in Item 8 herein for information regarding scheduled maturities of our long-term debt. See "Note 8. Leases" of the Notes to Consolidated Financial Statements in Item 8 herein for information regarding scheduled maturities of our operating leases.
As of December 31, 2025, we had expected cash payments for estimated interest on our long-term debt and finance lease obligations of $247 million payable within the next twelve months and $2,223 million payable thereafter.
As of December 31, 2025, we had purchase obligations of $1,840 million payable within the next twelve months and $540 million payable thereafter. Our purchase obligations include expenditures for capital assets for 2026 as well as agreements to purchase goods or services or licenses that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
Due to the uncertainty with respect to the timing of potential future cash outflows associated with our uncertain tax positions, we are unable to make reasonable estimates of the period of cash settlement, if any, to the respective taxing authorities. Therefore, $656 million in uncertain tax positions, including interest and penalties, have been excluded from the contractual obligations discussed above. See "Note 11. Income Taxes" of the Notes to Consolidated Financial Statements in Item 8 herein for further information.
Other Factors Affecting Liquidity
Registration Statement : In December 2023, Baker Hughes, together with Baker Hughes Holdings LLC ("BHH LLC") and Baker Hughes Co-Obligor, Inc. filed a universal automatic shelf registration statement on Form S-3ASR with the SEC to have the ability to sell various types of securities including debt securities, Class A common stock, preferred stock, guarantees of debt securities, purchase contracts and units. The specific terms of any securities to be sold will be described in supplemental filings with the SEC. There were no sales of such securities during the year ended December 31, 2025. The registration statement will expire in December 2026.
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 by working with our customers to restructure their debts or utilizing available trade receivable facilities that enable us to manage collection risk. With regard to our primary customer in Mexico, there have not historically been any material losses due to uncollectable accounts receivable, nor are any such balances currently in dispute. During 2025 and 2024, the Company had CDS in the total of $775 million and $553 million, respectively, with third-party financial institutions. The CDS relate to borrowings provided by these financial institutions to our primary customer in Mexico
Baker Hughes Company 2025 Form 10-K | 45

who utilized these borrowings to pay certain of the Company's outstanding receivables. The total notional amount remaining on the issued CDS was $287 million and $412 million as of December 31, 2025 and 2024, respectively, which will reduce each month through September 2026 as the customer repays the borrowings. As of December 31, 2025, the fair value of these derivative liabilities is not material.
A customer's failure or delay in payment could have a material adverse effect on our short-term liquidity and results of operations. As of December 31, 2025, 16% of our gross customer receivables were from customers in the U.S. and 10% were from customers in the United Arab Emirates. As of December 31, 2024, 16% of our 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 our gross customer receivables at these dates.
International operations : Our cash that is held outside the U.S. is 82% of the total cash balance as of December 31, 2025. 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.
Guarantor Financial Information
We guarantee various senior unsecured notes and senior unsecured debentures (collectively, the "Debt Securities") outstanding with an aggregate principal amount of $5,808 million as of December 31, 2025, with maturities ranging from 2026 to 2047. The Debt Securities constitute debt obligations of BHH LLC, an indirect, 100% owned subsidiary and the primary operating company of Baker Hughes, and Baker Hughes Co-Obligor, Inc, a 100% owned finance subsidiary of BHH LLC (together with BHH LLC, the "Issuers") that was incorporated for the sole purpose of serving as a corporate co-obligor of debt securities. The Debt Securities are fully and unconditionally guaranteed on a senior unsecured basis by the Company and rank equally in right of payment with all of the Company's other senior and unsecured debt obligations. However, because these obligations are not secured, they would be effectively subordinated to any existing or future secured indebtedness of Baker Hughes and the Issuers.
Management has elected to include summarized financial information for the Issuers, notwithstanding that SEC Rule 13‑01 would otherwise permit its omission because the combined assets, liabilities, and results of operations of the Issuers are not materially different from the corresponding amounts presented in Baker Hughes Company's consolidated financial statements. We believe the information will be useful in connection with future debt financing activities associated with the Chart acquisition.

Year Ended
December 31,

Summarized Income Statement data (In millions)
2025
Revenues
$ 27,733 
Costs and expenses
24,848 
Net income
2,767 
Net income attributable to Baker Hughes Company
2,731 

December 31,
Summarized Balance Sheet data (In millions)
2025
Current assets $ 18,518 
Noncurrent assets 22,054 
Current liabilities 13,301 
Noncurrent liabilities 7,993 

CRITICAL ACCOUNTING ESTIMATES
An accounting policy is deemed to be critical if the nature of the estimate or assumption it incorporates is subject to a material level of judgment related to matters that are highly uncertain and changes in those estimates and assumptions are reasonably likely to materially impact our consolidated financial statements. These estimates
Baker Hughes Company 2025 Form 10-K | 46

reflect our best judgment about current, and for some estimates, future, economic and market conditions and their potential effects based on information available as of the date of these financial statements. If these conditions change from those expected, it is reasonably possible that the judgments and estimates described below could change, which may result in future impairments of goodwill, or the establishment of valuation allowances on deferred tax assets and increased tax liabilities, among other effects. Also, see "Note 1. Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements in Item 8 herein, which discusses our most significant accounting policies.
The Audit Committee of the Board has reviewed our critical accounting estimates and the disclosure presented below. During the past three fiscal years, we have not made any material changes in the methodology used to establish the critical accounting estimates, and we believe that the following are the critical accounting estimates used in the preparation of our consolidated financial statements for the year ended December 31, 2025. There are other items within our consolidated financial statements that require estimation and judgment, but they are not deemed critical as defined above.
Revenue Recognition on Long-Term Product Services Agreements
We have long-term service agreements with our customers, primarily within our IET segment. These agreements typically require us to maintain assets sold to the customer over a defined contract term. These agreements have an average contract term of greater than 10 years. From time to time, these contract terms may be extended through contract modifications or amendments, which may result in revisions to future billing and cost estimates. Revenue recognition on long-term product services agreements requires estimates of both customer payments and the costs to perform required maintenance services over the contract term. We recognize revenue on an over time basis using input methods to measure our progress toward completion at the estimated margin rate of the contract.
To develop our billing estimates, we consider the number of billable events that will occur based on estimated utilization of the asset under contract over the life of the contract term. This estimated utilization will consider both historical and market conditions, asset retirements, and new product introductions, if applicable.
To develop our cost estimates, we consider the timing and extent of maintenance and overhaul events, including the amount and cost of labor, spare parts, and other resources required to perform the services. In developing our cost estimates, we utilize a combination of our historical cost experience and expected cost improvements. Cost improvements are only included in future cost estimates after savings have been observed in actual results or proven effective through an extensive regulatory or engineering approval process.
We routinely review the estimates used in our product services agreements and regularly revise them to adjust for changes. These revisions are based on objectively verifiable information that is available at the time of the review. We gain insight into expected future utilization and cost trends, as well as credit risk, through our knowledge of the equipment installed and the close interaction with our customers through supplying critical services and parts over extended periods.
Revisions to cost or billing estimates may affect a product services agreement's total estimated profitability resulting in an adjustment of earnings; such adjustments generated earnings of $18 million, $(11) million and $15 million for the three years ended December 31, 2025, 2024 and 2023, respectively. We provide for potential losses on any of these agreements when it is probable that we will incur the loss. Cash billings collected on these contracts were approximately $0.7 billion and $0.6 billion during the years ended December 31, 2025 and 2024, respectively. Our contracts (on average) are approximately 13% complete based on costs incurred to date and our estimate of future costs.
Revenue Recognition on Sale of Customized Equipment
We recognize revenue on agreements for sales of equipment manufactured to unique customer specifications, including long-term construction projects, on an over time basis utilizing cost inputs as the measurement criteria in assessing the progress toward completion. Our estimation of the total costs required to fulfill our promise to a customer is generally based on our history of manufacturing similar assets for customers. This estimation of cost is critical to our revenue recognition process and is updated routinely to reflect changes in quantity or cost of the
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inputs. In certain projects, the underlying technology or promise to the customer is unique to what we have historically promised, and reliably estimating the total cost to fulfill the promise to the customer requires a significant level of judgment. We provide for potential losses on any of these agreements when it is probable that we will incur the loss. The total revenue recognized for the sale of equipment on an over time basis during the twelve months ended December 31, 2025, 2024, and 2023 was $8.4 billion, $8.5 billion, and $6.1 billion, respectively.
Goodwill and Other Long-Lived Assets
We perform an annual impairment test of goodwill for each of our reporting units as of July 1, or more frequently when circumstances indicate an impairment may exist at the reporting unit level. When performing the annual impairment test, we have the option of first performing a qualitative assessment to determine the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount. If, after assessing the existence of events and circumstances, we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, there is no need to perform any further testing. However, if we conclude otherwise, we would be required to perform a quantitative impairment assessment of goodwill, which involves the use of significant estimates and assumptions and typically requires analysis of discounted cash flows and other market information, such as trading multiples and comparable transactions.
Other long-lived assets, including property, plant and equipment and identifiable finite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, and at least annually for indefinite-lived intangible assets. When testing for impairment, we group our long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The determination of recoverability is made based upon the estimated undiscounted future net cash flows, which involves significant estimates and judgments on the part of management.
The determination of whether goodwill and other long-lived assets are impaired involves a significant level of judgment and estimation, and changes in our forecasts, business strategy, government regulations, or economic or market conditions, among other things, could significantly impact these judgments, potentially decreasing the fair value of one or more reporting units or long-lived assets. Any resulting impairment charges could have a material impact on our results of operations.
Income Taxes
Our effective tax rate is based on our income, statutory tax rates, and differences between tax laws and U.S. GAAP in various jurisdictions. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Our rate may be further impacted by the repatriation of foreign earnings that are considered indefinitely reinvested to the extent the repatriation would result in additional taxes, such as withholding and income taxes. Indefinite reinvestment is determined by management’s judgment and intentions concerning the future operations of the Company. In cases where repatriation would otherwise incur significant withholding or income taxes, these foreign earnings have been indefinitely reinvested in active non-U.S. business operations. Computation of the potential deferred tax liability associated with these undistributed earnings and any other basis differences is not practicable.
Deferred income tax assets represent amounts available to reduce income taxes payable in future years. We routinely assess the recoverability of such assets, weighing available positive and negative evidence and recording a valuation allowance when it is more likely than not that some portion or all of the assets will not be realized. In undertaking such assessment, we first look to objective and verifiable evidence, the nature and severity of cumulative pretax losses, if any, based on a rolling three-year period, recent earnings history and associated trends or changes, and the nature of temporary differences, including predictability of reversal patterns and duration of carryforward. We then also evaluate other evidence such as projected financial results, sensitivity of such results to external factors or changes in assumptions, and prudent and readily available tax planning strategies that may alter the timing of reversal of the temporary differences. While we consider all available positive and negative evidence, certain objectively verifiable categories of evidence carry more weight in the analysis. For example, concluding that a valuation allowance is not required is difficult when there is significant negative evidence that is objective and verifiable, such as cumulative losses in recent years. While this would not be the sole determinate of the need for a
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valuation allowance, it does carry greater weight within the broader assessment when alongside other, more subjective evidence, including projections for future growth.
Our tax filings routinely are subject to audit by the tax authorities in the jurisdictions where we conduct business. These audits may result in assessments of additional taxes that are resolved with the tax authorities or through the courts. We have provided for the amounts we believe will ultimately result from these proceedings, but settlements of issues raised in these audits may affect our tax rate. We have $525 million of gross unrecognized tax benefits, excluding interest and penalties, at December 31, 2025. We are not able to reasonably estimate in which future periods these amounts ultimately will be settled.
NEW ACCOUNTING STANDARDS TO BE ADOPTED
See "Note 1. Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements in Item 8 herein for further discussion of accounting standards to be adopted.
RELATED PARTY TRANSACTIONS
See "Note 18. Related Party Transactions" of the Notes to Consolidated Financial Statements in Item 8 herein for further discussion of related party transactions.
FORWARD-LOOKING STATEMENTS
This Form 10-K, including MD&A and certain statements in the Notes to Consolidated Financial Statements, contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act (each a "forward-looking statement"). All statements, other than historical facts, including statements regarding the presentation of the Company's operations in future reports and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words "may," "will," "should," "potential," "intend," "expect," "would," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "could," "project," "predict," "continue," "target," "goal" or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, the risk factors identified in the "Risk Factors" section of Part 1 of Item 1A of this Form 10-K and those set forth from time-to-time in other filings by the Company with the SEC. These documents are available through our website or through the SEC's Electronic Data Gathering and Analysis Retrieval (EDGAR) system at http://www.sec.gov.
Any forward-looking statements speak only as of this Annual Report. The Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information or developments, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to certain market risks that are inherent in our financial instruments and arise from changes in interest rates and foreign currency exchange rates. We may enter into derivative financial instrument transactions to manage or reduce market risk, but do not enter into derivative financial instrument transactions for speculative purposes. A discussion of our primary market risk exposure in financial instruments is presented below.
Baker Hughes Company 2025 Form 10-K | 49

INTEREST RATE RISK
All of our long-term debt is comprised of fixed rate instruments. We are subject to interest rate risk on our debt and investment portfolio. As of December 31, 2025, we had interest rate swaps with a notional amount of $500 million that converted a portion of our $1,350 million aggregate principal amount of 3.337% fixed rate Senior Notes due 2027 into a floating rate instrument with an interest rate based on a Secured Overnight Financing Rate index. Each of the interest rate swaps is designated and qualifies as a fair value hedging instrument. The interest rate swaps are considered to be effective at achieving offsetting changes in the fair value of the hedged liability, and no ineffectiveness is recognized. The mark-to-market of this fair value hedge was recorded as a gain or loss in interest expense and was equally offset by the gain or loss of the underlying debt instrument, which also was recorded in interest expense.
The following table sets forth our fixed rate long-term debt, excluding finance leases, and the related weighted average interest rates by expected maturity dates.

(In millions) 2026 2027 2028 2029 2030 Thereafter Total (2)

As of December 31, 2025
Long-term debt (1)
$ 600  $ 1,350  $ —  $ 760  $ 500  $ 2,496  $ 5,706 
Weighted average interest rates
2.35 % 4.89 % — % 3.48 % 4.57 % 4.16 % 4.08 %

(1) Fair market value of our fixed rate long-term debt, excluding finance leases, was $5.4 billion at December 31, 2025.
(2) Amounts represent the principal value of our long-term debt outstanding and related weighted average interest rates at the end of the respective period.
FOREIGN CURRENCY EXCHANGE RISK
We conduct our operations around the world in a number of different currencies, and we are exposed to market risks resulting from fluctuations in foreign currency exchange rates. Many of our significant foreign subsidiaries have designated the local currency as their functional currency. As such, future earnings are subject to change due to fluctuations in foreign currency exchange rates when transactions are denominated in currencies other than our functional currencies.
Additionally, we buy, manufacture, and sell components and products across global markets. These activities expose us to changes in foreign currency exchange rates, commodity prices, and interest rates, which can adversely affect revenue earned and costs of our operating businesses. When the currency in which equipment is sold differs from the primary currency of the legal entity and the exchange rate fluctuates, it will affect the revenue earned on the sale. These sales and purchase transactions also create receivables and payables denominated in foreign currencies and exposure to foreign currency gains and losses based on changes in exchange rates. Changes in the price of raw materials used in manufacturing can affect the cost of manufacturing. We use derivatives to mitigate or eliminate these exposures, where appropriate.
We use cash flow hedging primarily to reduce or eliminate the effects of foreign currency exchange rate changes on purchase and sale contracts. Accordingly, most derivative activity in this category consists of currency exchange contracts. We had outstanding foreign currency forward contracts with notional amounts aggregating $4.0 billion and $3.0 billion to hedge exposure to currency fluctuations in various foreign currencies at December 31, 2025 and 2024, respectively. The notional amounts of these derivative instruments do not generally represent cash amounts exchanged by us and the counterparties, but rather the nominal amount upon which changes in the value of the derivatives are measured.
As of December 31, 2025, the Company estimates that a 1% appreciation or depreciation in the U.S. dollar would result in an impact of less than $15 million to our pre-tax earnings; however, the Company is generally able to mitigate its foreign exchange exposure, where there are liquid financial markets, through use of foreign currency derivative transactions. Also, see "Note 15. Financial Instruments" of the Notes to Consolidated Financial Statements in Item 8 herein, which has additional details on our strategy.
Baker Hughes Company 2025 Form 10-K | 50

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we assessed the effectiveness of our internal control over financial reporting based on the 2013 framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, our principal executive officer and principal financial officer concluded that our internal control over financial reporting was effective as of December 31, 2025. This conclusion is based on the recognition that there are inherent limitations in all systems of internal control. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
KPMG LLP, the Company's independent registered public accounting firm, has issued an attestation report on the effectiveness of the Company's internal control over financial reporting.

/s/ LORENZO SIMONELLI
Lorenzo Simonelli
Chairman, President and
Chief Executive Officer

/s/ AHMED MOGHAL
Ahmed Moghal
Executive Vice President and Chief Financial Officer

/s/ REBECCA CHARLTON
Rebecca Charlton
Senior Vice President, Controller and Chief Accounting Officer

Houston, Texas
February 5, 2026
Baker Hughes Company 2025 Form 10-K | 51

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors
Baker Hughes Company:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Baker Hughes Company and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 5, 2026 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue recognition on certain agreements for sales of equipment manufactured to unique customer specifications
As discussed in Note 1 to the consolidated financial statements, the Company enters into agreements for sales of equipment manufactured to unique customer specifications on an over time basis. Revenue from these types of contracts is recognized to the extent of progress towards completion measured by actual costs incurred relative to total expected costs. The Company provides for potential losses on these types of contracts when it is probable that a loss will be incurred.
We identified revenue recognition for certain contracts from the sales of equipment manufactured to unique customer specifications as a critical audit matter. Complex auditor judgment was required in evaluating the Company's long-term estimates of the expected costs to be incurred in order to complete these contracts.
Baker Hughes Company 2025 Form 10-K | 52

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company's revenue recognition process for sales of equipment manufactured to unique customer specifications. This included controls pertaining to the Company's estimation of costs expected to be incurred to complete contracts for sales of equipment manufactured to unique customer specifications. We evaluated the Company's ability to accurately estimate costs expected to be incurred to complete the contracts for sales of equipment manufactured to unique customer specifications. We evaluated the estimated costs expected to be incurred to complete the equipment manufactured to unique customer specifications for the contracts by:
– questioning the Company's finance and project managers regarding progress to date based on the latest project reports and the costs expected to be incurred until completion, including confirmations with certain subcontractors;
– observing project review meetings performed by the Company or inspecting relevant minutes of those meetings to identify changes in the estimated costs expected to be incurred to complete the contract and related contract margins;
– assessing the remaining estimated costs expected to be incurred by expenditure category by comparing to the actual costs incurred during the current year for the selected project; and
– investigating changes to the contract margin when compared to the prior year's estimated contract margin.
We have served as the Company's auditor since 2017.
/s/ KPMG LLP
Houston, Texas
February 5, 2026
Baker Hughes Company 2025 Form 10-K | 53

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
Baker Hughes Company:
Opinion on Internal Control Over Financial Reporting
We have audited Baker Hughes Company and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 5, 2026 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Houston, Texas
February 5, 2026
Baker Hughes Company 2025 Form 10-K | 54

BAKER HUGHES COMPANY
CONSOLIDATED STATEMENTS OF INCOME

Year Ended December 31,
(In millions, except per share amounts) 2025 2024 2023
Revenue:
Sales of goods $ 18,216   $ 17,810   $ 15,617  
Sales of services 9,517   10,019   9,889  
Total revenue 27,733   27,829   25,506  
Costs and expenses:
Cost of goods sold 14,388   14,291   12,801  
Cost of services sold 6,801   7,055   6,803  
Selling, general and administrative 2,387   2,458   2,611  
Research and development costs
600   643   651  
Restructuring
215   260   313  
Other (income) expense, net
243   ( 341 ) ( 544 )
Interest expense, net 222   198   216  
Income before income taxes 2,877   3,265   2,655  
Provision for income taxes ( 253 ) ( 257 ) ( 685 )
Net income
2,624   3,008   1,970  
Less: Net income attributable to noncontrolling interests
36   29   27  
Net income attributable to Baker Hughes Company
$ 2,588   $ 2,979   $ 1,943  

Per share amounts:
Basic income per Class A common share
$ 2.62   $ 3.00   $ 1.93  
Diluted income per Class A common share
$ 2.60   $ 2.98   $ 1.91  

Cash dividend per Class A common share $ 0.92   $ 0.84   $ 0.78  

See accompanying Notes to Consolidated Financial Statements
Baker Hughes Company 2025 Form 10-K | 55

BAKER HUGHES COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year Ended December 31,
(In millions)
2025 2024 2023
Net income
$ 2,624   $ 3,008   $ 1,970  
Less: Net income attributable to noncontrolling interests
36   29   27  
Net income attributable to Baker Hughes Company
2,588   2,979   1,943  
Other comprehensive income (loss):

Foreign currency translation adjustments
528   ( 350 ) 153  
Cash flow hedges
10   ( 1 ) 3  
Benefit plans
( 28 ) ( 14 ) 19  
Other comprehensive income (loss) 510   ( 365 ) 175  
Less: Other comprehensive income attributable to noncontrolling interests
1   —   —  
Other comprehensive income (loss) attributable to Baker Hughes Company 509   ( 365 ) 175  
Comprehensive income
3,134   2,643   2,145  
Less: Comprehensive income attributable to noncontrolling interests
37   29   27  
Comprehensive income attributable to Baker Hughes Company
$ 3,097   $ 2,614   $ 2,118  

See accompanying Notes to Consolidated Financial Statements
Baker Hughes Company 2025 Form 10-K | 56

BAKER HUGHES COMPANY
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

  December 31,
(In millions, except par value) 2025 2024
ASSETS
Current Assets:
Cash and cash equivalents $ 3,715   $ 3,364  
Current receivables, net 6,641   7,122  
Inventories, net 4,954   4,954  
All other current assets 3,518   1,771  
Total current assets 18,828   17,211  
Property, plant and equipment, less accumulated depreciation 5,326   5,127  
Goodwill 6,068   6,078  
Other intangible assets, net 4,097   3,951  
Contract and other deferred assets 1,620   1,730  
Deferred income tax assets
1,957   1,284  
All other assets 2,985   2,982  
Total assets $ 40,881   $ 38,363  
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable $ 4,579   $ 4,542  
Short-term and current portion of long-term debt 689   53  
Progress collections and deferred income 5,904   5,672  
All other current liabilities 2,705   2,724  
Total current liabilities 13,877   12,991  
Long-term debt 5,398   5,970  
Liabilities for pensions and other postretirement benefits 1,066   988  
Deferred income tax liabilities
84   83  
All other liabilities 1,446   1,276  
Equity:
Class A common stock, $ 0.0001 par value - 2,000 authorized, 987 and 990 issued and outstanding as of December 31, 2025 and 2024, respectively
—   —  

Capital in excess of par value 24,738   25,896  

Retained loss ( 3,252 ) ( 5,840 )
Accumulated other comprehensive loss ( 2,652 ) ( 3,161 )
Baker Hughes Company equity 18,834   16,895  
Noncontrolling interests 176   160  
Total equity 19,010   17,055  
Total liabilities and equity $ 40,881   $ 38,363  

See accompanying Notes to Consolidated Financial Statements
Baker Hughes Company 2025 Form 10-K | 57

BAKER HUGHES COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions, except per share amounts) Class A Common Stock
Capital in Excess of Par Value Retained Earnings (Loss) Accumulated Other Comprehensive Loss Non-controlling Interests Total
Balance at December 31, 2022 —   $ 28,126   $ ( 10,761 ) $ ( 2,971 ) $ 131   $ 14,525  

Comprehensive income:

Net income
1,943   27   1,970  
Other comprehensive income
175     175  
Dividends on Class A Common Stock ($ 0.78 per share)
( 786 ) ( 786 )
Repurchase and cancellation of Class A common stock ( 538 )     ( 538 )
Stock-based compensation cost 197   197  
Other ( 16 ) ( 1 ) ( 7 ) ( 24 )
Balance at December 31, 2023 —   26,983   ( 8,819 ) ( 2,796 ) 151   15,519  
Comprehensive income (loss):
Net income
2,979   29   3,008  
Other comprehensive loss
( 365 ) ( 365 )
Dividends on Class A Common Stock ($ 0.84 per share)
( 836 ) ( 836 )
Repurchase and cancellation of Class A common stock ( 484 ) ( 484 )
Stock-based compensation cost 202   202  
Other 31   ( 20 ) 11  
Balance at December 31, 2024 —   25,896   ( 5,840 ) ( 3,161 ) 160   17,055  
Comprehensive income:

Net income
  2,588     36   2,624  
Other comprehensive income
    509   1   510  
Dividends on Class A Common Stock ($ 0.92 per share)
( 910 )       ( 910 )
Repurchase and cancellation of Class A common stock ( 384 )       ( 384 )
Stock-based compensation cost 203         203  
Other ( 67 )     ( 21 ) ( 88 )
Balance at December 31, 2025 —   $ 24,738   $ ( 3,252 ) $ ( 2,652 ) $ 176   $ 19,010  

See accompanying Notes to Consolidated Financial Statements
Baker Hughes Company 2025 Form 10-K | 58

BAKER HUGHES COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,
(In millions) 2025 2024 2023
Cash flows from operating activities:
Net income
$ 2,624   $ 3,008   $ 1,970  
Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation and amortization 1,188   1,136   1,087  
Benefit for deferred income taxes
( 702 ) ( 671 ) ( 59 )
Change in fair value of equity securities
103   ( 367 ) ( 555 )

Stock-based compensation cost 203   202   197  

(Gain) loss on business dispositions
—   —   ( 40 )

Changes in operating assets and liabilities:
Current receivables 358   ( 159 ) ( 986 )
Inventories 79   ( 102 ) ( 461 )
Accounts payable 11   91   61  
Progress collections and deferred income ( 58 ) 273   1,639  
Contract and other deferred assets 323   ( 96 ) ( 211 )
Other operating items, net ( 319 ) 17   420  
Net cash flows provided by operating activities
3,810   3,332   3,062  

Cash flows from investing activities:
Expenditures for capital assets ( 1,273 ) ( 1,278 ) ( 1,224 )
Proceeds from disposal of assets 195   203   208  
Proceeds from sale of equity securities
1   92   372  
Proceeds from business dispositions —   —   293  
Net cash paid for acquisitions ( 830 ) —   ( 301 )

Other investing items, net ( 137 ) ( 33 ) ( 165 )
Net cash flows used in investing activities ( 2,044 ) ( 1,016 ) ( 817 )

Cash flows from financing activities:

Repayment of long-term debt
—   ( 143 ) ( 651 )

Dividends paid ( 910 ) ( 836 ) ( 786 )
Repurchase of Class A common stock ( 384 ) ( 484 ) ( 538 )

Other financing items, net ( 188 ) ( 64 ) ( 53 )
Net cash flows used in financing activities
( 1,482 ) ( 1,527 ) ( 2,028 )
Effect of currency exchange rate changes on cash and cash equivalents 67   ( 71 ) ( 59 )
Increase in cash and cash equivalents
351   718   158  
Cash and cash equivalents, beginning of period 3,364   2,646   2,488  
Cash and cash equivalents, end of period $ 3,715   $ 3,364   $ 2,646  

Supplemental cash flows disclosures:
Income taxes paid, net of refunds $ 1,156   $ 1,040   $ 595  
Interest paid $ 294   $ 298   $ 309  

See accompanying Notes to Consolidated Financial Statements
Baker Hughes Company 2025 Form 10-K | 59

Baker Hughes Company
Notes to 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 consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S." and such principles, "U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for annual financial information. The consolidated financial statements include the accounts of Baker Hughes and all of its subsidiaries and affiliates it controls or variable interest entities for which the Company has determined it is the primary beneficiary. All intercompany accounts and transactions have been eliminated.
In the Company's consolidated financial statements and notes, certain amounts have been reclassified to conform with the current year presentation. In the notes to the 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.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of any contingent assets or liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates and judgments on historical experience and on various other assumptions and information that it believes to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty, and accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company's operating environment changes. While the Company believes that the estimates and assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates. Estimates are used for, but are not limited to, determining the following: allowance for credit losses and inventory valuation reserves; recoverability of long-lived assets and certain equity investments; revenue recognition on long-term contracts; valuation of goodwill; useful lives used in depreciation and amortization; income taxes and related valuation allowances; accruals for contingencies; actuarial assumptions to determine costs and liabilities related to employee benefit plans; stock-based compensation expense; valuation of derivatives; and the fair value of assets acquired and liabilities assumed in acquisitions.
Foreign Currency
Assets and liabilities of non-U.S. operations with a functional currency other than the U.S. dollar have been translated into U.S. dollars using the Company's period-end exchange rates, and revenue, expenses, and cash flows have been translated at average rates for the respective periods. Any resulting translation gains and losses are included in other comprehensive income. The impact of remeasurement of monetary assets and liabilities denominated in currencies other than the functional currency of the Company or its subsidiaries is included in the consolidated statements of income.
Revenue from Sale of Equipment
Performance Obligations Satisfied Over Time
The Company recognizes revenue on agreements for sales of equipment manufactured to unique customer specifications, including long-term construction projects, on an over time basis, utilizing cost inputs as the
Baker Hughes Company 2025 Form 10-K | 60

Baker Hughes Company
Notes to Consolidated Financial Statements

measurement criteria in assessing the progress toward completion. The Company's estimate of costs to be incurred to fulfill its promise to a customer is based on the Company's history of manufacturing similar assets for customers and is updated routinely to reflect changes in quantity or pricing of the inputs. The Company begins to recognize revenue on these contracts when the contract-specific inventory becomes customized for a customer, which is reflective of its initial transfer of control of the incurred costs. The Company provides for potential losses on any of these agreements when it is probable that it will incur the loss.
The Company's billing terms for these over time contracts vary, but are generally based on achieving specified milestones. The differences between the timing of the Company's revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to its contract asset or contract liability positions.
Performance Obligations Satisfied at a Point In Time
The Company recognizes revenue for non-customized equipment at the point in time that the customer obtains control of the good. Equipment for which the Company recognizes revenue at a point in time includes equipment manufactured on a standardized basis for sale to the market. The Company uses proof of delivery for certain large equipment with more complex logistics associated with the shipment, whereas the delivery of other equipment is generally determined based on historical data of transit times between regions.
On occasion the Company sells equipment with a right of return. The Company uses its accumulated experience to estimate and provide for such returns when it records the sale. In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, the Company recognizes revenue when it has concluded that the customer has control of the equipment and that acceptance has or is likely to occur.
The Company's billing terms for these point in time equipment contracts vary, but are generally based on shipment of the equipment to the customer.
Revenue from Sale of Services
Performance Obligations Satisfied Over Time
The Company sells product services under long-term product maintenance or extended warranty agreements in the Industrial & Energy Technology ("IET") segment. These agreements require the Company to maintain the customers' assets over the service agreement contract terms, which generally range from 10 to 20 years. In general, these are contractual arrangements to provide services, repairs, and maintenance of a covered unit (gas turbines for mechanical drive or power generation, primarily on liquefied natural gas ("LNG") applications). These services are performed at various times during the life of the contract, thus the costs of performing services are incurred on an other than straight-line basis. The Company recognizes related sales based on the extent of its progress toward completion measured by actual costs incurred in relation to total expected costs. The Company provides for any loss that it expects to incur on any of these agreements when that loss becomes probable. The Company utilizes historical customer data, prior product performance data, statistical analysis, third-party data, and internal management estimates to calculate contract-specific margins. In certain contracts, the total transaction price is variable based on customer utilization, which is excluded from the contract margin until the period in which the customer has utilized the services to appropriately reflect the revenue activity in the period earned. In addition, revenue for certain oilfield services is recognized on an over time basis as performed.
The Company's billing terms for these contracts are generally based on asset utilization (i.e. usage per hour) or the occurrence of a major maintenance event within the contract. The differences between the timing of the Company's revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to its contract asset or contract liability positions.
Baker Hughes Company 2025 Form 10-K | 61

Baker Hughes Company
Notes to Consolidated Financial Statements

Performance Obligations Satisfied at a Point In Time
The Company sells certain tangible products, largely spare equipment, through its services business. The Company recognizes revenue for this equipment at the point in time that the customer obtains control of the good, which is at the point in time the Company delivers the spare part to the customer. The Company's billing terms for these point in time service contracts vary, but are generally based on shipment of the equipment to the customer.
Research and Development
Research and development costs are expensed as incurred and relate to the research and development of new products and services. Research and development costs were $ 600 million, $ 643 million, and $ 651 million for the years ended December 31, 2025, 2024, and 2023, respectively, net of related funding received from third parties.
Cash and Cash Equivalents
Short-term investments with original maturities of three months or less are included in cash equivalents unless designated as available-for-sale and classified as investment securities.
Allowance for Credit Losses
The Company monitors its customers' payment history and current creditworthiness to determine that collectability of the related financial assets is reasonably assured. The Company also considers the overall business climate in which its customers operate. The Company does not generally require collateral in support of its current receivables, but it may require payment in advance or security in the form of a letter of credit or a bank guarantee. For accounts receivable, a loss allowance matrix is utilized to measure lifetime expected credit losses. The matrix contemplates historical credit losses by age of receivables, adjusted for any forward-looking information and management expectations.
Inventories
All inventories are stated at the lower of cost or net realizable values and they are measured on a first-in, first-out ("FIFO") basis or average cost basis. As necessary, the Company records provisions and maintains reserves for excess, slow moving, and obsolete inventory. To determine these reserve amounts, the Company regularly reviews inventory quantities on hand and compares them to estimates of future product demand, market conditions, production requirements, and technological developments.
Property, Plant and Equipment
Property, plant and equipment ("PP&E") is initially stated at cost and is depreciated over its estimated economic life. Subsequently, PP&E is measured at cost less accumulated depreciation, which is generally provided by using the straight-line method over the estimated economic lives of the individual assets, and impairment losses. The Company manufactures a substantial portion of its tools and equipment in the Oilfield Services & Equipment ("OFSE") segment and the cost of these items, which includes direct and indirect manufacturing costs, is capitalized in inventory and subsequently moved to PP&E.
Goodwill and Other Long-Lived Assets
The Company performs an annual impairment test of goodwill on a qualitative or quantitative basis for each of its reporting units as of July 1, in conjunction with its annual strategic planning process, or more frequently when circumstances indicate an impairment may exist at the reporting unit level. When performing the annual impairment test, the Company has the option of first performing a qualitative assessment to determine the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If such a conclusion is reached, the Company would then be required to perform a quantitative impairment assessment of goodwill. However, if the assessment leads to a determination that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then no further assessments are required. A quantitative assessment for the determination of impairment is made by comparing the
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Baker Hughes Company
Notes to Consolidated Financial Statements

carrying amount of each reporting unit with its fair value, which is generally calculated using a combination of market, comparable transactions, and discounted cash flow approaches. Potential impairment indicators include, but are not limited to, (i) the results of the Company's most recent annual or interim impairment testing, in particular the magnitude of the excess of fair value over carrying value observed; (ii) downward revisions to internal forecasts, and the magnitude thereof, if any; and (iii) declines in the Company's market capitalization below its book value, and the magnitude and duration of those declines, if any.
The Company amortizes the cost of other intangible assets over their estimated useful lives unless such lives are deemed indefinite. The cost of intangible assets is generally amortized on a straight-line basis over the asset's estimated economic life.
The Company reviews PP&E, intangible assets, and certain other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, and at least annually for indefinite-lived intangible assets. When testing for impairment, the Company groups its long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (or asset group). The determination of recoverability is made based upon the estimated undiscounted future net cash flows. The amount of impairment loss, if any, is determined by comparing the fair value, as determined by a discounted cash flow analysis, with the carrying value of the related assets.
Leases
The Company enters into various contractual arrangements for the right to use facilities and equipment. At contract inception, manag ement evaluates whether each of these arrangements contains a lease and classifies all identified leases as either operating or finance. If the arrangement is subsequently modified, the classification is re-evaluated. Upon commencement of the lease, management recognizes a lease liability and corresponding right-of-use ("ROU") asset. Lease assets are tested for impairment in the same manner as other long-lived assets.
Financial Instruments
The Company's financial instruments include cash and equivalents, current receivables, investments, accounts payables, short and long-term debt, and derivative financial instruments.
The Company monitors its exposure to various business risks including commodity prices, interest rates, and foreign currency exchange rates, and it regularly uses derivative financial instruments to manage these risks. At the inception of a new derivative, the Company designates the derivative as a hedge, or it determines the derivative to be undesignated as a hedging instrument. The Company documents the relationships between the hedging instruments and the hedged items, as well as its risk management objectives and strategy for undertaking various hedge transactions. The Company assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged item at both the inception of the hedge and on an ongoing basis.
The Company records all derivatives as of the end of its reporting period in the consolidated statements of financial position at fair value. For the forward contracts held as undesignated hedging instruments, the Company records the changes in fair value in the consolidated statements of income along with the change in the fair value, related to foreign exchange movements, of the hedged item. Changes in the fair value of forward contracts designated as cash flow hedging instruments are recognized in other comprehensive income until the hedged item is recognized in earnings.
Fair Value Measurements
For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date.
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Baker Hughes Company
Notes to Consolidated Financial Statements

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. Preference is given to observable inputs and the Company maintains policies and procedures to identify, monitor and assess the reasonableness of these inputs to the valuation. These two types of inputs create the following fair value hierarchy:
• Level 1 - Quoted prices for identical instruments in active markets.
• Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
• Level 3 - Significant inputs to the valuation model are unobservable.
Recurring Fair Value Measurements
Derivatives
When the Company has Level 1 derivatives, which are traded either on exchanges or liquid markets, the Company uses closing prices for valuation. The majority of the Company's derivatives are valued using internal models and are included in Level 2. These internal models maximize the use of market observable inputs, including interest rate curves and both forward and spot prices for currencies and commodities. Derivative assets and liabilities included in Level 2 primarily represent foreign currency and commodity forward contracts for the Company.
Investments in Debt and Equity Securities
When available, the Company uses quoted market prices to determine the fair value of investment securities, and they are included in Level 1. Level 1 securities primarily include publicly traded equity securities.
For investment securities for which market prices are observable for identical or similar investment securities but not readily accessible for each of those investments individually (that is, it is difficult to obtain pricing information for each individual investment security at the measurement date), the Company uses pricing models and observable inputs that are consistent with what other market participants would use, and these are included in Level 2. The inputs and assumptions to the models are derived from market observable sources, including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and other market-related data. When the Company uses valuations that are based on significant unobservable inputs, it classifies the investment securities in Level 3.
Non-Recurring Fair Value Measurements
Certain assets are measured at fair value on a non-recurring basis and are subject to fair value adjustments only in certain circumstances. These assets can include long-lived assets that have been reduced to fair value when they are held for sale, equity securities without readily determinable fair value, and equity method investments and long-lived assets that are written down to fair value when they are impaired.
Investments in Equity Securities
Investments in equity securities (in which the Company does not have a controlling financial interest or significant influence, most often because it holds a voting interest of 0% to 20%) with readily determinable fair values, are measured at fair value with changes recognized in earnings and reported in "Other (income) expense, net" in the consolidated statements of income. Equity securities that do not have readily determinable fair values are recorded at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar equity securities of the same issuer. These changes are recorded in "Other (income) expense, net" in the consolidated statements of income.
Equity method investments are equity holdings in entities in which the Company does not have a controlling financial interest, but over which it has significant influence, most often because it holds a voting interest of 20% to 50%. At December 31, 2025 and 2024, the aggregate carrying amount of the Company's equity method investments
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Baker Hughes Company
Notes to Consolidated Financial Statements

was $ 1,117 million and $ 1,080 million, respectively. The results of the Company's equity method investments are presented in the consolidated statements of income as follows: (i) if the investment is integral to the Company's operations, their results are included in Cost of Sales and (ii) if the investment is not integral to the Company's operations, their results are included in "Other (income) expense, net." Investments in, and advances to, equity method investments are presented on a one-line basis in "All other assets" in the consolidated statements of financial position.
Income Taxes
The Company accounts for taxes under the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial statement and the tax base of assets and liabilities based on enacted tax rates expected to be in effect when taxes are actually paid or recovered, as well as for net operating losses and tax credit carryforwards. The effect of a change in tax laws or rates on deferred tax assets and liabilities is recognized in income in the period in which such change is enacted. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not, and a valuation allowance is established for any portion of a deferred tax asset that management believes is not more likely than not to be realized.
Significant judgment is required in determining the Company's tax expense and in evaluating its tax positions, including evaluating uncertainties. The Company's tax filings are subject to audit by the tax authorities in the jurisdictions where it conducts business. These audits may result in assessments of additional taxes that are resolved with the tax authorities or through the courts. The Company has provided for the amounts that it believes will ultimately result from these proceedings. The Company recognizes uncertain tax positions that are "more likely than not" to be sustained if the relevant tax authority were to audit the position with full knowledge of all the relevant facts and other information. For those tax positions that meet this threshold, the Company measures the amount of tax benefit based on the largest amount of tax benefit that has a greater than 50% chance of being realized in a final settlement with the relevant authority. The Company classifies interest and penalties associated with uncertain tax positions as income tax expense. The effects of tax adjustments and settlements from taxing authorities are presented in the financial statements in the period they are finalized.
Prior to 2023, Baker Hughes Holdings LLC ("BHH LLC"), the Company's wholly owned primary operating subsidiary, was treated as a partnership for U.S. tax purposes. As a partnership, BHH LLC was not subject to U.S. federal income tax. Effective December 30, 2023, the Company completed a reorganization that resulted in BHH LLC no longer being treated as a partnership for U.S. tax purposes and is now included and taxed as part of the Company's consolidated U.S. tax return.
Supply Chain Finance Programs
Under the supply chain finance ("SCF") programs, administered by a third party, the Company's suppliers are given the opportunity to sell receivables from the Company to participating financial institutions at their sole discretion at a rate that leverages the Company's credit rating and thus might be more beneficial to the Company's suppliers. The Company's responsibility is limited to making payment on the terms originally negotiated with the Company's supplier, regardless of whether the supplier sells its receivable to a financial institution. The range of payment terms the Company negotiates with its suppliers is consistent, irrespective of whether a supplier participates in the program.
As of December 31, 2025 and 2024, $ 410 million and $ 411 million of SCF program liabilities are recorded in " Accounts payable " in the consolidated statements of financial position, respectively, and reflected in net cash flows from operating activities in the consolidated statements of cash flows when settled. See "Note 23. Supplementary Information" for further information on the changes in the Company's SCF program liabilities.
NEW ACCOUNTING STANDARDS ADOPTED
The Company has adopted ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). See "Note 11. Income Taxes" for the enhanced disclosures associated with the adoption of ASU 2023-09. The adoption of this standard did not have an impact on the Company's operating results.
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Baker Hughes Company
Notes to Consolidated Financial Statements

NEW ACCOUNTING STANDARDS TO BE ADOPTED
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.
In September 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-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 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 at December 31:

2025 2024
Customer receivables $ 5,558   $ 5,945  
Other 1,360   1,409  
Total current receivables 6,918   7,354  
Less: Allowance for credit losses ( 277 ) ( 232 )
Total current receivables, net $ 6,641   $ 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 December 31, 2025, 16 % of the Company's gross customer receivables were from customers in the U.S. and 10 % were from customers in the United Arab Emirates. 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.
See "Note 23. Supplementary Information" for further information on the changes in the allowance for credit losses.
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Baker Hughes Company
Notes to Consolidated Financial Statements

NOTE 3. INVENTORIES
Inventories, net of reserves of $ 381 million and $ 390 million in 2025 and 2024, respectively, consist of the following at December 31:

2025 2024
Finished goods $ 2,381   $ 2,494  
Work in process and raw materials 2,573   2,460  
Total inventories, net $ 4,954   $ 4,954  

For the years ended December 31, 2025 and 2024, the Company recorded inventory impairments of $ 22 million and $ 73 million, respectively, primarily in the OFSE segment. See "Note 20. Restructuring" for further information.

NOTE 4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following at December 31:

Useful Life 2025 2024
Land and improvements
8 - 10 years (1)
$ 297   $ 297  
Buildings, structures and related equipment 5 - 40 years
2,531   2,347  
Machinery, equipment and other 1 - 20 years
9,184   8,539  
Total cost 12,012   11,183  
Less: Accumulated depreciation
  ( 6,686 ) ( 6,056 )
Property, plant and equipment, less accumulated depreciation
  $ 5,326   $ 5,127  

(1) Useful life excludes land.
Depreciation expense relating to property, plant and equipment was $ 938 million, $ 870 million, and $ 830 million for the years ended December 31, 2025, 2024, and 2023, respectively. For the year ended December 31, 2025, $ 4 million of accelerated depreciation expense was recorded in "Restructuring" in the consolidated statements of income. See "Note 20. Restructuring" for additional information on property, plant and equipment impairments.
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Baker Hughes Company
Notes to Consolidated Financial Statements

NOTE 5. 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, 2023, gross
$ 19,817   $ 4,850   $ 24,667  
Accumulated impairment at December 31, 2023
( 18,276 ) ( 254 ) ( 18,530 )
Balance at December 31, 2023
1,541   4,596   6,137  

Currency exchange and other
6   ( 65 ) ( 59 )

Balance at December 31, 2024
1,547   4,531   6,078  

Acquisitions —   254   254  

Currency exchange and other 9   149   158  
Total 1,556   4,934   6,490  
Classified as held for sale
—   ( 422 ) ( 422 )
Balance at December 31, 2025
$ 1,556   $ 4,512   $ 6,068  

As a result of the Company's goodwill impairment assessment performed in the year ended December 31, 2025, there were no goodwill impairments deemed necessary.
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.
OTHER INTANGIBLE ASSETS
Intangible assets consist of the following at December 31:

2025 2024
Gross
Carrying
Amount Accumulated
Amortization Net Gross
Carrying
Amount Accumulated
Amortization Net
Customer relationships $ 2,186   $ ( 986 ) $ 1,200   $ 1,921   $ ( 883 ) $ 1,038  
Technology 1,217   ( 987 ) 230   1,248   ( 981 ) 267  
Trade names and trademarks 306   ( 208 ) 98   290   ( 196 ) 94  
Capitalized software 1,636   ( 1,219 ) 417   1,522   ( 1,172 ) 350  

Finite-lived intangible assets 5,345   ( 3,400 ) 1,945   4,981   ( 3,232 ) 1,749  
Indefinite-lived intangible assets 2,152   —  2,152   2,202   —  2,202  
Total intangible assets $ 7,497   $ ( 3,400 ) $ 4,097   $ 7,183   $ ( 3,232 ) $ 3,951  

Finite-lived intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 1 to 35 years. Amortization expense was $ 250 million, $ 266 million, and $ 257 million for the years ended December 31, 2025, 2024, and 2023, respectively. No impairment for indefinite-lived intangible assets was recorded in 2025. During 2025, the Company recorded intangible assets of $ 269 million, comprised of $ 227 million for customer relationships, $ 27 million for technology, $ 14 million for trademarks, and $ 1 million for capitalized software, related to the acquisition of CDC in the IET segment.
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Baker Hughes Company
Notes to Consolidated Financial Statements

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

Year Estimated Amortization Expense
2026 $ 241  
2027 220  
2028 198  
2029 168  
2030 142  

NOTE 6. CONTRACT AND OTHER DEFERRED ASSETS
Contract assets reflect revenue earned in excess of billings on long-term contracts to construct technically complex equipment, and provide long-term product service agreements and extended maintenance agreements and other deferred contract related costs. The Company's long-term product service agreements are provided by the IET segment. The Company's long-term equipment contracts are provided by both the IET and OFSE segments. Contract assets consist of the following at December 31:

2025 2024
Long-term equipment contracts and other service agreements $ 1,123   $ 1,247  
Long-term product service agreements 330   346  
Contract assets (total revenue in excess of billings) 1,453   1,593  
Deferred inventory costs 141   124  
Other costs to fulfill or obtain a contract
26   13  

Contract and other deferred assets $ 1,620   $ 1,730  

Revenue recognized during the years ended December 31, 2025 and 2024 from performance obligations satisfied (or partially satisfied) in previous years related to long-term service agreements was $ 18 million and $( 11 ) million, respectively. This includes revenue recognized from revisions to cost or billing estimates that may affect a contract's total estimated profitability.

NOTE 7. 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 arrangements. Contract liabilities consist of the following at December 31:

2025 2024
Equipment contracts and other service agreements $ 5,249   $ 5,047  
Long-term product service agreements 507   503  
Progress collections 5,756   5,550  
Deferred income 148   122  
Progress collections and deferred income (contract liabilities) $ 5,904   $ 5,672  

Revenue recognized during the years ended December 31, 2025 and 2024 that was included in the contract liabilities at the beginning of the year was $ 4,315 million and $ 4,398 million, respectively.
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Baker Hughes Company
Notes to Consolidated Financial Statements

NOTE 8. LEASES
The Company's leasing activities primarily consist of operating leases for service centers, manufacturing facilities, sales and administrative offices, and certain equipment.
The following table presents operating lease expense:

Operating Lease Expense 2025 2024 2023
Short-term lease $ 492   $ 511   $ 503  
Long-term fixed lease 272   292   276  
Long-term variable lease 54   76   73  
Total operating lease expense $ 818   $ 879   $ 852  

Cash flows used in operating activities for operating leases approximate lease expense for the years ended December 31, 2025, 2024, and 2023.
As of December 31, 2025, maturities of operating lease liabilities are as follows:

Year Operating Leases
2026 $ 204  
2027 130  
2028 92  
2029 70  
2030
47  
Thereafter 201  
Total lease payments 744  
Less: imputed interest 129  
Total $ 615  

Amounts recognized in the consolidated statements of financial position for operating leases consist of the following:

2025 2024
All other current liabilities $ 173   $ 198  
All other liabilities 442   475  

Total $ 615   $ 673  

Right-of-use assets of $ 622 million and $ 678 million as of December 31, 2025 and 2024, respectively, are included in " All other assets " in the consolidated statements of financial position. The weighted-average remaining lease term for the Company's operating leases was approximately seven years for the years ended December 31, 2025 and 2024. The weighted-average discount rate used to determine the operating lease liability as of December 31, 2025 and 2024 was 4.6 % and 4.3 %, respectively.
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Baker Hughes Company
Notes to Consolidated Financial Statements

NOTE 9. DEBT
The carrying value of the Company's short-term and long-term debt consists of the following at December 31:

2025 2024
Amount Effective Interest
Rate (1)
Amount Effective Interest
Rate (1)

Short-term and current portion of long-term debt
2.061 % Senior Notes due December 2026
$ 599   2.4   % $ —   —   %
Other debt 90   4.5   % 53   4.6   %
Total short-term and current portion of long-term debt 689   53  

Long-term debt    
2.061 % Senior Notes due December 2026
—   —   % 599   2.4   %
3.337 % Senior Notes due December 2027
1,324   4.9   % 1,302   5.4   %
6.875 % Notes due January 2029 (2)
255   4.0   % 262   3.9   %
3.138 % Senior Notes due November 2029
524   3.2   % 523   3.2   %
4.486 % Senior Notes due May 2030
498   4.6   % 498   4.6   %
5.125 % Senior Notes due September 2040 (2)
1,269   4.2   % 1,275   4.2   %
4.080 % Senior Notes due December 2047
1,338   4.1   % 1,338   4.1   %
Other long-term debt 190   4.0   % 173   4.2   %

Total long-term debt 5,398   5,970  
Total debt $ 6,087   $ 6,023  

(1) Effective interest rate is based on the carrying value including issuance costs and interest rate swaps.
(2) Represents long-term fixed rate debt obligations assumed in connection with the acquisition of BHI.
The carrying value of short-term and long-term debt includes issuance costs and changes in fair value of the debt instrument hedged by interest rate swaps. At December 31, 2025 and 2024, these adjustments resulted in a net increase to the carrying value of the Company's debt totaling $ 102 million and $ 91 million, respectively. The estimated fair value of total debt at December 31, 2025 and 2024 was $ 5,628 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.
Maturities of debt for each of the five years in the period ending December 31, 2030, and in the aggregate thereafter, are listed in the table below:

2026 2027 2028 2029 2030 Thereafter
Total debt
$ 689   $ 1,387   $ 55   $ 821   $ 514   $ 2,621  

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 December 31, 2025 and 2024, there were no borrowings under the Credit Agreement.
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Baker Hughes Company
Notes to Consolidated Financial Statements

On July 28, 2025, BHH LLC entered into a commitment letter providing for a $ 14.9 billion senior unsecured 364 -day bridge facility (the "Bridge Facility") to finance all or a portion of the Chart Industries, Inc. ("Chart") acquisition. On August 15, 2025, BHH LLC, as borrower, and the Company, as parent guarantor, entered into a $ 2.6 billion senior unsecured delayed-draw term loan facility (the "DDTL"), which reduced the commitments remaining under the Bridge Facility to $ 12.3 billion. On November 12, 2025, BHH LLC elected to voluntarily reduce the commitments outstanding under the Bridge Facility to $ 11.0 billion. Of the total available facilities of $ 13.6 billion, no amounts were drawn under the Bridge Facility or the DDTL as of December 31, 2025. For the year ended December 31, 2025, the Company incurred $ 61.2 million in debt financing fees, which were capitalized as prepaid expenses in "All other current assets" in the Company's consolidated statements of financial position and will be recognized as interest expense over the term of the facility.
Baker Hughes Co-Obligor, Inc. is a co-obligor, jointly and severally with BHH LLC, of 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 December 31, 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 December 31, 2025, the Company was in compliance with all debt covenants.

NOTE 10. EMPLOYEE BENEFIT PLANS
DEFINED BENEFIT PLANS
The Company maintains Company sponsored pension plans for certain of its employees. The Company also maintains unfunded end-of-service benefit plans that are mandated in certain countries in which it operates. The Company's primary plans disclosed in 2025 included three U.S. plans and eight non-U.S. plans, primarily in the United Kingdom ("U.K.") and Germany, all with plan assets or obligations greater than $ 20 million. These defined benefit plans generally provide benefits to employees based on formulas recognizing length of service and earnings; however, the majority of these plans are either frozen or closed to new entrants. The Company also provides certain postretirement health care benefits, through unfunded plans, to a closed group of U.S. employees who retire and meet certain age and service requirements. The accumulated postretirement benefit obligation related to these plans was $ 25 million and $ 28 million at December 31, 2025 and 2024, respectively.
Funded Status
The funded status position represents the difference between the benefit obligation and the plan assets. The Company's primary plans consist of six funded plans and five unfunded plans. The projected benefit obligation ("PBO") for pension benefits represents the actuarial present value of benefits attributed to employee services and compensation and includes an assumption about future compensation levels. The accumulated benefit obligation ("ABO") is the actuarial present value of pension benefits attributed to employee service to date at present compensation levels. The ABO differs from the PBO in that the ABO does not include any assumptions about future compensation levels.
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Baker Hughes Company
Notes to Consolidated Financial Statements

Below is the reconciliation of the beginning and ending balances of benefit obligations, fair value of plan assets, and the funded status of the Company's defined benefit plans ("Pension Benefits").

  Pension Benefits

2025 2024
Change in benefit obligation:
Benefit obligation at beginning of year $ 2,084   $ 2,443  
Service cost 18   16  
Interest cost 106   107  

Actuarial (gain)/loss (1)
19   ( 148 )
Benefits paid ( 107 ) ( 92 )

Settlements ( 26 ) ( 227 )
Settlement due to plan termination (2)
( 117 ) —  

Foreign currency translation adjustments 99   ( 15 )
Benefit obligation at end of year 2,076   2,084  

Change in plan assets:
Fair value of plan assets at beginning of year 1,708   2,080  
Actual return on plan assets 28   ( 73 )
Employer contributions 54   66  
Benefits paid ( 107 ) ( 92 )
Settlements ( 26 ) ( 227 )
Settlement due to plan termination (2)
( 117 ) —  

Other ( 2 ) ( 39 )
Foreign currency translation adjustments 75   ( 7 )
Fair value of plan assets at end of year 1,613   1,708  

Funded status - underfunded at end of year $ ( 463 ) $ ( 376 )

Accumulated benefit obligation $ 2,030   $ 2,039  

(1) The actuarial gain in 2024 was primarily related to a change in the discount rate used to measure the benefit obligation for the Company's plans.
(2) Plan termination relates to the termination of one of the Company's fully funded frozen U.S. defined benefit plans that was initiated in 2024.
The amounts recognized in the consolidated statements of financial position consist of the following at December 31:

  Pension Benefits

2025 2024
Noncurrent assets $ —   $ 43  
Current liabilities ( 77 ) ( 28 )
Noncurrent liabilities ( 386 ) ( 391 )
Net amount recognized $ ( 463 ) $ ( 376 )

Baker Hughes Company 2025 Form 10-K | 73

Baker Hughes Company
Notes to Consolidated Financial Statements

Information for the plans with ABOs and PBOs in excess of plan assets consists of the following at December 31:

Pension Benefits

2025 2024
Projected benefit obligation $ 2,076   $ 1,180  
Accumulated benefit obligation $ 2,030   $ 1,135  
Fair value of plan assets $ 1,613   $ 761  

The Company has a U.S. non-qualified supplemental pension plan ("BH SPP") for certain employees, which is included in the benefit obligations and funded status in the tables above. In order to meet a portion of the Company's obligations of the BH SPP, the Company established a trust comprised primarily of mutual fund assets. The value of these assets was $ 38 million and $ 36 million as of December 31, 2025 and 2024, respectively. These assets are not included as plan assets or in the funded status amounts in the tables above and below.
Net Periodic Cost
The components of net periodic cost consist of the following:

Pension Benefits
2025 2024 2023
Service cost $ 18   $ 16   $ 15  
Interest cost 106   107   116  
Expected return on plan assets ( 86 ) ( 118 ) ( 102 )
Amortization of prior service credit
1   1   1  
Amortization of net actuarial loss 19   18   19  
Curtailment / settlement loss 28   20   ( 16 )

Net periodic cost $ 85   $ 44   $ 33  

The service cost component of the net periodic cost is included in "Selling, general and administrative" and all other components are included in "Other (income) expense, net" in the consolidated statements of income.
Assumptions Used in Benefit Calculations
Accounting requirements necessitate the use of assumptions to reflect the uncertainties and the length of time over which the pension obligations will be paid. The actual amount of future benefit payments will depend upon when participants retire, the amount of their benefit at retirement, and how long they live. To reflect the obligation in today's dollars, the Company discounts the future payments using a rate that matches the time frame over which the payments are expected to be made. The Company also needs to assume a long-term rate of return that will be earned on investments used to fund these payments.
Another assumption used is the interest crediting rate for the Company's U.S. qualified cash balance plan. Under the provisions of this pension plan, a hypothetical cash balance account has been established for each participant. Such accounts receive quarterly interest credits based on a prescribed formula.
Baker Hughes Company 2025 Form 10-K | 74

Baker Hughes Company
Notes to Consolidated Financial Statements

Weighted average assumptions used to determine benefit obligations for these plans are as follows:

  Pension Benefits

2025 2024
Discount rate 4.74   % 5.22   %
Rate of compensation increase 3.32   % 3.31   %
Interest crediting rate 3.20   % 4.46   %

Weighted average assumptions used to determine net periodic cost for these plans are as follows:

Pension Benefits
2025 2024 2023
Discount rate 5.22   % 4.54   % 4.89   %
Expected long-term return on plan assets
5.18   % 5.97   % 5.05   %
Interest crediting rate 4.46   % 3.98   % 4.31   %

The Company determines the discount rate using a bond matching model, whereby the weighted average yields on high-quality fixed-income securities have maturities consistent with the timing of benefit payments. Lower discount rates increase the size of the benefit obligations while higher discount rates reduce the size of the benefit obligation. The compensation assumption is used in the Company's active plans to estimate the annual rate at which the pay for plan participants will grow. If the rate of growth assumed increases, the size of the pension obligations will increase.
The expected return on plan assets is the estimated long-term rate of return that will be earned on the investments used to fund the pension obligations. To determine this rate, the Company considers the current and target composition of plan investments, historical returns earned, and expectations about the future.
Accumulated Other Comprehensive Loss
The amount recorded before-tax in accumulated other comprehensive loss related to the Company's defined benefit plans consists of the following at December 31:

  Pension Benefits

2025 2024
Net actuarial loss $ 384   $ 338  
Net prior service cost 12   14  
Total $ 396   $ 352  

Plan Assets
The Company has an investment committee that meets regularly to review portfolio returns and to determine asset-mix targets based on asset/liability studies. Third-party investment consultants assist the committee in developing asset allocation strategies to determine the Company's expected rates of return and expected risk for various investment portfolios. The investment committee considered these strategies in the formal establishment of the current asset-mix targets based on the projected risk and return levels for all major asset classes.
Baker Hughes Company 2025 Form 10-K | 75

Baker Hughes Company
Notes to Consolidated Financial Statements

The table below presents the fair value of the plan assets at December 31:

2025 2024
Debt securities
Fixed income and cash investment funds $ 190   $ 1,253  

Equity securities
Global equity securities (1)
—   73  
U.S. equity securities (1)
—   107  
Insurance contracts 1,224   92  
Real estate 2   3  
Private equities 39   45  
Other investments (2)
158   135  
Total plan assets $ 1,613   $ 1,708  

(1) Includes direct investments and investment funds.
(2) Consists primarily of asset allocation fund investments.
Plan assets valued using Net Asset Value ("NAV") as a practical expedient amounted to $ 382 million and $ 1,557 million as of December 31, 2025 and 2024, respectively. The percentages of plan assets valued using NAV by investment fund type for equity securities, fixed income and cash, and alternative investments were 0 %, 50 %, and 50 % as of December 31, 2025, respectively, and 12 %, 80 %, and 8 % as of December 31, 2024, respectively. Those investments that were measured at fair value using NAV as a practical expedient were excluded from the fair value hierarchy. The practical expedient was not applied for investments with a fair value of $ 1,231 million and $ 151 million as of December 31, 2025 and 2024, respectively. There were investments classified within Level 3 of $ 1,224 million and $ 92 million for non U.S. insurance contracts as of December 31, 2025 and 2024, respectively.
Other
In 2025, the trustees of the Company's U.K. defined benefit pension plans executed annuity purchase transactions (collectively, the "buy‑ins") with an independent third‑party insurance company with no affiliation to the Company. The buy‑in premiums were funded from plan assets, with additional Company contributions as necessary. The aggregate premium paid was approximately $ 1,107 million. Under the buy‑in insurance contracts, the plans retain the legal responsibility to pay benefits to participants, and the insurer makes monthly payments to the plans that match the benefits due to the covered participants. As the plans remain primarily responsible for the pension obligation, the buy‑ins do not meet the settlement criteria under ASC 715, and settlement accounting was not applied.
The buy‑in insurance contracts are recognized as plan assets and measured at fair value in accordance with ASC 715 and ASC 820. Fair value reflects the present value of expected cash flows from the insurers under the contracts, using market‑based assumptions; because valuation incorporates significant unobservable inputs, these assets are typically classified within Level 3 of the fair value hierarchy. Gains and losses related to changes in the fair value of plan assets are recognized in other comprehensive income.
Baker Hughes Company 2025 Form 10-K | 76

Baker Hughes Company
Notes to Consolidated Financial Statements

In 2025, the Company initiated the termination of one of its frozen U.S. defined benefit pension plans (the "Plan"), which would result in the full settlement of the Company's Plan obligations, which at December 31, 2025 was $ 406 million. The distribution of Plan assets from the pension trust fund pursuant to the termination will not be made until the Plan termination satisfies all regulatory requirements, which the Company currently expects to occur by the end of 2026. The Company does not expect the termination to have a material impact on its financial condition, results of operations, or cash flows.
Funding Policy
The funding policy for the Company's Pension Benefits is to contribute amounts sufficient to meet minimum funding requirements as set forth in employee benefit and tax laws plus such additional amounts as it may determine to be appropriate. In 2025, the Company contributed approximately $ 54 million, which includes benefit payments made directly to the employee, for its unfunded plans. The Company anticipates it will contribute between approximately $ 115 million to $ 120 million to its pension plans in 2026.
The following table presents the expected benefit payments for Pension Benefits over the next 10 years. For funded Company sponsored plans, the benefit payments are made by the respective pension trust funds.

Year Pension Benefits
2026 $ 486  
2027 83  
2028 88  
2029 94  
2030 97  
2031-2035
551  

DEFINED CONTRIBUTION PLANS
The Company's primary defined contribution plan during 2025 was the Company-sponsored U.S. 401(k) plan ("401(k) Plan"). The 401(k) Plan allows eligible employees to contribute portions of their eligible compensation to an investment trust. The Company matches employee contributions at the rate of $ 1.00 per $1.00 employee contribution for the first 5 % of the employee's eligible compensation, and such contributions vest immediately. In addition, the Company makes cash contributions for all eligible employees of 4 % of their eligible compensation and such contributions are fully vested after three years of employment. The 401(k) Plan provides several investment options, for which the employee has sole investment discretion; however, the 401(k) Plan does not offer the Company's common stock as an investment option. The Company's costs for the 401(k) Plan and several other U.S. and non-U.S. defined contribution plans amounted to $ 254 million and $ 180 million in 2025 and 2024, respectively.
The Company has two non-qualified defined contribution plans that are invested through trusts. The assets and corresponding liabilities were $ 330 million and $ 300 million at December 31, 2025 and 2024, respectively, and are included in "All other assets" and "Liabilities for pensions and other postretirement benefits," respectively, in the consolidated statements of financial position.
Baker Hughes Company 2025 Form 10-K | 77

Baker Hughes Company
Notes to Consolidated Financial Statements

NOTE 11. INCOME TAXES
The Company has adopted ASU 2023-09, effective prospectively for the fiscal year ended December 31, 2025. ASU 2023-09 provides for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.
The provision for income taxes consists of the following:

2025
Current:
U.S. federal
$ 6  
U.S. state
19  
Foreign 930  
Total current 955  
Deferred:
U.S. federal
( 87 )
U.S. state
( 24 )
Foreign ( 591 )
Total deferred ( 702 )
Provision for income taxes $ 253  

2024 2023
Current:
U.S. $ 39   $ 33  
Foreign 889   711  
Total current 928   744  
Deferred:
U.S. ( 556 ) ( 27 )
Foreign ( 115 ) ( 32 )
Total deferred ( 671 ) ( 59 )
Provision for income taxes $ 257   $ 685  

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. The Company has completed its evaluation of the impact of this legislation and has determined that the OBBBA did not have a material impact on its 2025 financial statements.
On August 16, 2022, the U.S. enacted The Inflation Reduction Act, which included a number of additional credits and deductions for businesses and individuals. The Inflation Reduction Act also included the adoption of the Corporate Alternative Minimum Tax in 2023, which is based on financial statement book income of large corporations. To date, the impact of the Corporate Alternative Minimum Tax has been immaterial to the Company.
The geographic sources of income before income taxes consist of the following:

2025 2024 2023
U.S. $ 911   $ 1,099   $ 882  
Foreign 1,966   2,166   1,773  
Income before income taxes
$ 2,877   $ 3,265   $ 2,655  

Baker Hughes Company 2025 Form 10-K | 78

Baker Hughes Company
Notes to Consolidated Financial Statements

The reconciliation of the tax provision at the U.S. federal statutory rate to income tax expense is as follows:

2025 %

Income before income taxes
$ 2,877  

U.S. federal statutory tax rate
604   21.0   %
State and local income taxes (1)
( 2 ) ( 0.1 ) %
Federal
Effect of cross-border tax laws

FDII deduction
( 73 ) ( 2.5 ) %
Other 37   1.3   %
Tax credits

Foreign tax credits
( 46 ) ( 1.6 ) %
Other credits
( 26 ) ( 0.9 ) %
Changes in valuation allowances
55   1.9   %
Nontaxable or nondeductible items

Other ( 4 ) ( 0.1 ) %
Other adjustments

Impact of transactions (2)
( 210 ) ( 7.3 ) %
Other ( 12 ) ( 0.4 ) %
Foreign tax effects

CHINA
34   1.1   %
ITALY

State and local income taxes
39   1.4   %
Other ( 5 ) ( 0.2 ) %
SAUDI ARABIA

Withholding taxes
35   1.2   %
Other
( 1 ) —   %
SWITZERLAND

  Changes in valuation allowances
( 33 ) ( 1.1 ) %
Taxable dividend
37   1.3   %
Other
10   0.3   %
UNITED ARAB EMIRATES
Effect of rates different than statutory
( 50 ) ( 1.7 ) %
Other ( 7 ) ( 0.3 ) %
UNITED KINGDOM

  Changes in valuation allowances (3)
( 432 ) ( 15.0 ) %
Other 7   0.3   %
Other foreign jurisdictions
213   7.3   %
Changes in unrecognized tax benefits
83   2.9   %
Income tax expense
$ 253   8.8   %

(1) For the year ended December 31, 2025, the State and local income taxes are primarily related to the states of Louisiana, Oklahoma, Texas, and Alaska.
(2) For the year ended December 31, 2025, the Impact of transactions are associated with the pre-steps for the transactions discussed in "Note 22. Acquisitions, Dispositions, and Businesses Held for Sale."
(3) For the year ended December 31, 2025, this amount includes $ 308 million related to the release of a valuation allowance for certain deferred tax assets.
Baker Hughes Company 2025 Form 10-K | 79

Baker Hughes Company
Notes to Consolidated Financial Statements

2024 2023
Income before income taxes
$ 3,265   $ 2,655  

Taxes at the U.S. federal statutory income tax rate
686   558  

Effect of foreign operations
269   112  
Tax impact of partnership structure
( 40 ) ( 103 )
Change in valuation allowances (1)
( 625 ) 53  
Tax expense (benefit) due to unrecognized tax benefits 38   ( 5 )

Other — net
( 71 ) 70  
Provision for income taxes
$ 257   $ 685  
Actual income tax rate 7.9   % 25.8   %

(1) For December 31, 2024 and 2023, this amount was reduced by $ 664 million and $ 81 million, respectively, related to the release of a valuation allowance for certain deferred tax assets.
The following table presents income taxes paid (net of refunds received) for the year ended December 31:

2025
U.S. federal
$ 11  
U.S. state & local
32  
Foreign

Italy- federal
286  
Brazil
101  
Germany- federal
80  
Other foreign jurisdictions
646  
Total foreign
1,113  
Total income taxes paid, net
$ 1,156  

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss and tax credit carryforwards.
Baker Hughes Company 2025 Form 10-K | 80

Baker Hughes Company
Notes to Consolidated Financial Statements

The tax effects of differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities as of December 31 consist of the following:

2025 2024
Deferred tax assets:
Operating & capital loss carryforwards $ 3,273   $ 3,442  
Tax credit & other carryforwards 734   772  
Investment in partnerships & subsidiaries
324   276  
Property, plant and equipment
248   250  
Employee benefits 290   278  
Goodwill and other intangible assets
442   198  
Receivables 127   150  
Inventory 114   150  
Other
544   376  
Total deferred income tax asset 6,096   5,892  
Valuation allowances
( 3,498 ) ( 3,908 )
Total deferred income tax asset after valuation allowance 2,598   1,984  
Deferred tax liabilities:
Indefinite-lived intangible assets
( 382 ) ( 377 )
Fair value of derivative financial instruments
( 150 ) ( 166 )
Other
( 193 ) ( 240 )
Total deferred income tax liability
( 725 ) ( 783 )
Net deferred tax asset $ 1,873   $ 1,201  

At December 31, 2025, the Company had approximately $ 456 million of non-U.S. tax credits and other carryforwards that may be carried forward indefinitely under applicable foreign law, $ 113 million of U.S. foreign tax credits, and $ 165 million of other U.S. Federal and state tax credits, the majority of which have expiration dates after tax year 2028 under U.S. Federal and state tax law. Additionally, the Company had $ 3,243 million of net operating loss carryforwards ("NOLs"), of which approximately $ 303 million have expiration dates within five years, $ 1,930 million have expiration dates between six years and 20 years, and the remainder can be carried forward indefinitely. Lastly, the Company had $ 30 million of capital loss carryforwards, the majority of which can be carried forward indefinitely.
The Company routinely assesses the recoverability of its deferred tax assets, giving consideration to a range of factors including, but not limited to, the pattern of historical taxable income generation, current performance, including active contractual arrangements, and the forecasted business outlook across operating jurisdictions. The ultimate realization of the deferred tax assets depends on a number of factors, including the ability to generate sufficient taxable income of the appropriate character in the future and in the appropriate taxing jurisdictions. A valuation allowance is recorded (or maintained) when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company assessed both positive and negative evidence, with significant weight given to objective and verifiable factors, such as recent taxable income levels and credit utilization. Based on this evaluation, including consideration of our projected future taxable earnings, the Company concluded that it is more likely than not that its U.S. and U.K. deferred tax assets are recoverable. Accordingly, the Company released the associated valuation allowances, resulting in net tax benefits of $ 308 million and $ 664 million at December 31, 2025 and 2024, respectively.
Baker Hughes Company 2025 Form 10-K | 81

Baker Hughes Company
Notes to Consolidated Financial Statements

At December 31, 2025, $ 3,498 million of valuation allowances are recorded against various deferred tax assets, primarily related to foreign operating and capital losses of $ 2,820 million and non-U.S. tax credit carryforwards of $ 438 million. The following table presents the change in the valuation allowances during the year:

2025 2024
Balance at the beginning of the year
$ 3,908   $ 4,416  
Releases, net of current year activity
( 376 ) ( 625 )
Other
( 34 ) 117  
Balance at end of year
$ 3,498   $ 3,908  

Indefinite reinvestment is determined by management's intentions concerning the future operations of the Company. In cases where repatriation would otherwise incur significant withholding or income taxes, these earnings have been indefinitely reinvested in the Company's active non-U.S. business operations. As of December 31, 2025, the cumulative amount of undistributed foreign earnings is approximately $ 6,622 million. Computation of the potential deferred tax liability associated with these undistributed earnings and any other basis differences is not practicable.
At December 31, 2025, the Company had $ 525 million of tax liabilities for total gross unrecognized tax benefits related to uncertain tax positions. In addition to these uncertain tax positions, the Company had $ 82 million and $ 49 million related to interest and penalties, respectively, for total liabilities of $ 656 million for uncertain positions. If the Company were to prevail on all uncertain positions, the net effect would result in an income tax benefit of approximately $ 612 million. The remaining $ 44 million is comprised of $ 29 million for deferred tax assets that represent tax benefits that would be received in different taxing jurisdictions or in a different character and $ 15 million for increased valuation allowances.
The following table presents the changes in the Company's gross unrecognized tax benefits included in the consolidated statements of financial position.

Asset / (Liability) 2025 2024
Balance at beginning of year $ ( 455 ) $ ( 467 )
Additions for tax positions of the current year ( 12 ) ( 17 )
Additions for tax positions of prior years ( 193 ) ( 51 )
Reductions for tax positions of prior years 31   28  
Settlements with tax authorities 61   24  
Lapse of statute of limitations 43   28  
Balance at end of year $ ( 525 ) $ ( 455 )

The Company conducts business in more than 120 countries and is subject to income taxes in most taxing jurisdictions in which it operates, each of which may have multiple open years subject to examination. All Internal Revenue Service examinations have been completed and closed through 2020 for the most significant U.S. returns. The Company believes that it has made adequate provision for all income tax uncertainties in all jurisdictions.

NOTE 12. STOCK-BASED COMPENSATION
The Company has the Long-Term Incentive Plan ("LTI Plan") under which it may grant restricted stock units ("RSU"), performance share units ("PSU"), stock options, and other equity-based awards to employees and non-employee directors providing services to the Company and its subsidiaries. The Company also provides an Employee Stock Purchase Plan for eligible employees. A total of up to 29.5 million shares of Class A common stock are reserved and available for issuance pursuant to awards granted under the LTI Plan over its term, which expires on the date of the annual meeting of the Company in 2031. A total of 17.6 million shares of Class A common stock are available for issuance as of December 31, 2025.
Stock-based compensation cost was $ 203 million, $ 202 million, and $ 197 million for the years ended December
Baker Hughes Company 2025 Form 10-K | 82

Baker Hughes Company
Notes to Consolidated Financial Statements

31, 2025, 2024, and 2023, respectively. Stock-based compensation cost is measured at the date of grant based on the calculated fair value of the award and is generally recognized on a straight-line basis over the vesting period of the equity grant. The compensation cost is determined based on awards ultimately expected to vest; therefore, the Company has reduced the cost for estimated forfeitures based on historical forfeiture rates. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods to reflect actual forfeitures. There were no stock-based compensation costs capitalized as the amounts were not material.
Restricted Stock
The Company may grant to its officers, directors, and key employees RSUs, where each unit represents the right to receive, at the end of a stipulated period, one unrestricted share of stock with no exercise price. Certain RSUs are subject to cliff or graded vesting, generally ranging over a period of three years . Non-employee directors are granted RSUs that immediately vest on the grant date. Cash dividend equivalents are accumulated on RSUs and are payable upon vesting of the awards. The Company determines the fair value of RSUs based on the market price of its common stock on the date of grant.
The following table presents the changes in RSUs outstanding and related information (in thousands, except per unit prices):

Number of
Units Weighted Average
Grant Date Fair
Value Per Unit
Unvested balance at December 31, 2024
11,494   $ 29.06  
Granted 4,372   44.48  
Vested ( 5,586 ) 29.05  
Forfeited ( 973 ) 35.35  
Unvested balance at December 31, 2025
9,307   $ 35.65  

In 2025, the total intrinsic value of RSUs vested (defined as the value of shares awarded based on the price of the Company's common stock at vesting date) was $ 254 million and unvested RSUs was $ 424 million. The total grant date fair value of RSUs vested in 2025 was $ 162 million. As of December 31, 2025, there was $ 185 million of total unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted average period of 1.77 years.
Performance Share Units
The Company may grant PSUs to certain officers and key employees. The PSUs are stock-based awards tied to predefined company metrics and contain a payout modifier based on total shareholder return ("TSR"). PSUs generally cliff vest after a service period of three years . Cash dividend equivalents are accumulated on PSUs and are payable upon vesting of the awards. The fair value of the awards determined for the predefined company metrics are based on the market price of the Company's common stock on the date of grant. The fair value of the PSU awards is determined based on a Monte Carlo simulation method.
The following table presents the changes in PSUs outstanding and related information (in thousands, except per unit prices):

Number of
Units Weighted Average
Grant Date Fair
Value Per Unit
Unvested balance at December 31, 2024
2,542   $ 32.45  
Granted 1,224   41.08  
Vested ( 1,328 ) 32.24  

Forfeited ( 344 ) 36.93  
Unvested balance at December 31, 2025
2,094   $ 36.88  

Baker Hughes Company 2025 Form 10-K | 83

Baker Hughes Company
Notes to Consolidated Financial Statements

The total intrinsic value of PSUs vested and unvested, (defined as the value of the shares awarded at the year-end market price) was $ 55 million and $ 95 million, respectively, as of December 31, 2025. The total grant date fair value of PSUs vested in 2025 was $ 43 million. Total unrecognized compensation cost related to unvested PSUs, which is expected to be recognized over a weighted average period of 1.64 years , was $ 34 million as of December 31, 2025.
Stock Options
The Company previously granted stock options to its officers, directors, and key employees. Stock options generally vest in equal amounts over a vesting period of three years provided that the employee has remained continuously employed by the Company through such vesting date. The Company has not granted stock options to officers, directors, or key employees since 2019.
The following table presents the changes in stock options outstanding and related information (in thousands, except per option prices):

Number of
Options Weighted Average
Exercise Price
Per Option
Outstanding at December 31, 2024
1,425   $ 31.99  

Exercised ( 581 ) 27.54  

Outstanding and exercisable at December 31, 2025
844   $ 35.04  

The weighted average remaining contractual term for options outstanding and options exercisable at December 31, 2025 was 1.8 years. The maximum remaining contractual term of options outstanding is 3.1 years.
The total intrinsic value of stock options exercised (defined as the amount by which the market price of the Company's common stock on the date of exercise exceeds the exercise price of the option) in 2025 was $ 10 million. The total intrinsic value of stock options outstanding and options exercisable at December 31, 2025 was $ 9 million. The intrinsic value of stock options outstanding is calculated as the amount by which the quoted price of $ 45.54  of the Company's common stock as of the end of 2025 exceeds the exercise price of the options.
Employee Stock Purchase Plan
The employee stock purchase plan provides for eligible employees to purchase shares of Class A common stock quarterly on an after-tax basis in an amount between  1 % and  20 % of their annual pay at a  15 % discount of the fair market value of the Company's Class A common stock at the end of each quarterly offering period. An employee may not purchase more than $ 3,000  in any of the three-month measurement periods described above or $ 12,000  annually.
A total of 21.5 million shares of Class A common stock are authorized for issuance, and at December 31, 2025, there were 5.3 million shares of Class A common stock reserved for future issuance.

NOTE 13. 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 that 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. In 2025 and 2024, the Company repurchased and canceled 9.8  million and 15.2  million shares of Class A common stock, each for $ 384 million and
Baker Hughes Company 2025 Form 10-K | 84

Baker Hughes Company
Notes to Consolidated Financial Statements

$ 484 million, representing an average price per share of $ 39.38 and $ 31.78 , respectively. As of December 31, 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 beginning of year 989,646   997,709  
Issue of shares upon vesting of restricted stock units (1)
4,777   4,975  
Issue of shares on exercise of stock options (1)
581   389  
Issue of shares for employee stock purchase plan
1,561   1,814  
Repurchase and cancellation of Class A common stock ( 9,751 ) ( 15,241 )
Balance at end of year 986,815   989,646  

(1)     Share amounts reflected above are net of shares withheld to satisfy the employee's tax withholding obligation.
During 2025 and 2024, the Company declared and paid aggregate regular dividends of $ 0.92 and $ 0.84 per share, respectively, to holders of record of the Company's Class A common stock.
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, 2023 $ ( 2,513 ) $ ( 6 ) $ ( 277 ) $ ( 2,796 )
Other comprehensive income (loss) before reclassifications ( 350 ) 9   ( 46 ) ( 387 )
Amounts reclassified from accumulated other comprehensive loss
—   ( 11 ) 32   21  
Deferred taxes
—   1   —   1  
Other comprehensive loss
( 350 ) ( 1 ) ( 14 ) ( 365 )

Balance at December 31, 2024 ( 2,863 ) ( 7 ) ( 291 ) ( 3,161 )
Other comprehensive income (loss) before reclassifications
528   10   ( 90 ) 448  
Amounts reclassified from accumulated other comprehensive loss
—   —   45   45  
Deferred taxes
—   —   17   17  
Other comprehensive income (loss) 528   10   ( 28 ) 510  
Less: Other comprehensive income attributable to noncontrolling interests
1   —   —   1  

Balance at December 31, 2025 $ ( 2,336 ) $ 3   $ ( 319 ) $ ( 2,652 )

The amounts reclassified from accumulated other comprehensive loss during the years ended December 31, 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 (see "Note 10. Employee Benefit Plans" for additional details).
Baker Hughes Company 2025 Form 10-K | 85

Baker Hughes Company
Notes to Consolidated Financial Statements

NOTE 14. EARNINGS PER SHARE
Basic and diluted net income per share of Class A common stock is presented below: