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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-38143
Baker Hughes Company
(Exact name of registrant as specified in its charter)
Delaware81-4403168
(State or other jurisdiction(I.R.S. Employer Identification No.)
of incorporation or organization)
17021 Aldine Westfield
Houston,Texas77073-5101
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (713439-8600
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Common Stock, par value $0.0001 per shareBKRThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
As of April 14, 2022, the registrant had outstanding 984,576,063 shares of Class A Common Stock, $0.0001 par value per share and 40,590,890 shares of Class B Common Stock, $0.0001 par value per share.



Baker Hughes Company
Table of Contents
Page No.

Baker Hughes Company 2022 First Quarter Form 10-Q | i



PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Baker Hughes Company
Condensed Consolidated Statements of Income (Loss)
(Unaudited)

Three Months Ended March 31,
(In millions, except per share amounts)20222021
Revenue:
Sales of goods$2,809 $2,936 
Sales of services2,026 1,846 
Total revenue 4,835 4,782 
Costs and expenses:
Cost of goods sold2,366 2,534 
Cost of services sold1,499 1,390 
Selling, general and administrative621 587 
Restructuring, impairment and other61 80 
Separation related9 27 
Total costs and expenses4,556 4,618 
Operating income279 164 
Other non-operating loss, net(28)(626)
Interest expense, net(64)(74)
Income (loss) before income taxes187 (536)
Provision for income taxes(107)(69)
Net income (loss)80 (605)
Less: Net income (loss) attributable to noncontrolling interests8 (153)
Net income (loss) attributable to Baker Hughes Company$72 $(452)
Per share amounts:
Basic & diluted income (loss) per Class A common stock$0.08 $(0.61)
Cash dividend per Class A common stock$0.18 $0.18 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2022 First Quarter Form 10-Q | 1



Baker Hughes Company
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
Three Months Ended March 31,
(In millions)20222021
Net income (loss)$80 $(605)
Less: Net income (loss) attributable to noncontrolling interests8 (153)
Net income (loss) attributable to Baker Hughes Company72 (452)
Other comprehensive income (loss):
Foreign currency translation adjustments17 (51)
Cash flow hedges1 6 
Benefit plans8 3 
Other comprehensive income (loss)26 (42)
Less: Other comprehensive income (loss) attributable to noncontrolling interests (11)
Other comprehensive income (loss) attributable to Baker Hughes Company26 (31)
Comprehensive income (loss)106 (647)
Less: Comprehensive income (loss) attributable to noncontrolling interests8 (164)
Comprehensive income (loss) attributable to Baker Hughes Company$98 $(483)
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2022 First Quarter Form 10-Q | 2



Baker Hughes Company
Condensed Consolidated Statements of Financial Position
(Unaudited)
(In millions, except par value)
March 31,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents$3,191 $3,853 
Current receivables, net5,738 5,651 
Inventories, net4,151 3,979 
All other current assets1,627 1,582 
Total current assets14,707 15,065 
Property, plant and equipment (net of accumulated depreciation of $5,116 and $5,003)
4,804 4,877 
Goodwill5,989 5,959 
Other intangible assets, net4,118 4,131 
Contract and other deferred assets1,671 1,598 
All other assets2,944 2,943 
Deferred income taxes761 735 
Total assets$34,994 $35,308 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$3,755 $3,745 
Current portion of long-term debt35 40 
Progress collections and deferred income 3,481 3,232 
All other current liabilities1,871 2,111 
Total current liabilities9,142 9,128 
Long-term debt6,650 6,687 
Deferred income taxes192 127 
Liabilities for pensions and other postretirement benefits1,063 1,110 
All other liabilities1,500 1,510 
Equity:
Class A Common Stock, $0.0001 par value - 2,000 authorized, 985 and 909 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively
  
Class B Common Stock, $0.0001 par value - 1,250 authorized, 41 and 117 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively
  
Capital in excess of par value
28,351 27,375 
Retained loss(10,088)(10,160)
Accumulated other comprehensive loss(2,559)(2,385)
Baker Hughes Company equity15,704 14,830 
Noncontrolling interests743 1,916 
Total equity16,447 16,746 
Total liabilities and equity$34,994 $35,308 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2022 First Quarter Form 10-Q | 3



Baker Hughes Company
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
(In millions, except per share amounts)
Class A and Class B
Common Stock
Capital in
Excess of
Par Value
Retained
Loss
Accumulated
Other
Comprehensive
Loss
Non-
controlling
Interests
Total Equity
Balance at December 31, 2021$ $27,375 $(10,160)$(2,385)$1,916 $16,746 
Comprehensive income:
Net income72 8 80 
Other comprehensive income26 26 
Dividends on Class A common stock ($0.18 per share)
(172)(172)
Distributions to GE(13)(13)
Effect of exchange of Class B common stock and associated BHH LLC Units for Class A common stock1,357 (200)(1,157) 
Repurchase and cancellation of Class A common stock(232)(4)(236)
Stock-based compensation cost52 52 
Other(29)(7)(36)
Balance at March 31, 2022$ $28,351 $(10,088)$(2,559)$743 $16,447 
(In millions, except per share amounts)
Class A and Class B
Common Stock
Capital in
Excess of
Par Value
Retained
Loss
Accumulated
Other
Comprehensive
Loss
Non-
controlling
Interests
Total Equity
Balance at December 31, 2020$ $24,613 $(9,942)$(1,778)$5,349 $18,242 
Comprehensive loss:
Net loss(452)(153)(605)
Other comprehensive loss(31)(11)(42)
Dividends on Class A common stock ($0.18 per share)
(131)(131)
Distributions to GE(56)(56)
Effect of exchange of Class B common stock and associated BHH LLC Units for Class A common stock858 (111)(747) 
Stock-based compensation cost50 50 
Other(33)(1)(34)
Balance at March 31, 2021$ $25,357 $(10,394)$(1,920)$4,381 $17,424 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2022 First Quarter Form 10-Q | 4



Baker Hughes Company
Condensed Consolidated Statements of Cash Flows
(Unaudited)

Three Months Ended March 31,
(In millions)20222021
Cash flows from operating activities:
Net income (loss)$80 $(605)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization277 292 
(Gain) loss on equity securities(11)788 
Changes in operating assets and liabilities:
Current receivables(204)341 
Inventories(205)88 
Accounts payable74 (11)
Progress collections and deferred income280 (19)
Contract and other deferred assets(38)6 
Other operating items, net(181)(202)
Net cash flows from operating activities72 678 
Cash flows from investing activities:
Expenditures for capital assets(268)(221)
Proceeds from disposal of assets91 41 
Other investing items, net(89)6 
Net cash flows used in investing activities(266)(174)
Cash flows from financing activities:
Net repayments of debt and other borrowings(11)(36)
Dividends paid(172)(131)
Distributions to GE(13)(56)
Repurchase of Class A common stock(236) 
Other financing items, net(37)(32)
Net cash flows used in financing activities(469)(255)
Effect of currency exchange rate changes on cash and cash equivalents1 1 
Increase (decrease) in cash and cash equivalents(662)250 
Cash and cash equivalents, beginning of period3,853 4,132 
Cash and cash equivalents, end of period$3,191 $4,382 
Supplemental cash flows disclosures:
Income taxes paid, net of refunds$130 $39 
Interest paid$48 $51 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Company 2022 First Quarter Form 10-Q | 5



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF THE BUSINESS
Baker Hughes Company ("Baker Hughes", "the Company", "we", "us", or "our") is an energy technology company with a diversified portfolio of technologies and services that span the energy and industrial value chain. We are a holding company and have no material assets other than our 96% ownership interest in our operating company, Baker Hughes Holdings LLC ("BHH LLC"), and certain intercompany and tax related balances. BHH LLC is a Securities and Exchange Commission ("SEC") Registrant with separate filing requirements with the SEC and its separate financial information can be obtained from www.sec.gov.
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S." and such principles, "U.S. GAAP") and pursuant to the rules and regulations of the SEC for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 ("2021 Annual Report").
We hold a majority economic interest in BHH LLC and conduct and exercise full control over all activities of BHH LLC without the approval of any other member. Accordingly, we consolidate the financial results of BHH LLC and report a noncontrolling interest in our condensed consolidated financial statements for the economic interest held by General Electric ("GE"). As of March 31, 2022, GE's economic interest in BHH LLC was 4%. See "Note 11. Equity" for further information.
In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary by management to fairly state our results of operations, financial position and cash flows of the Company and its subsidiaries for the periods presented and are not indicative of the results that may be expected for a full year. The Company's financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest). All intercompany accounts and transactions have been eliminated.
In the Company's financial statements and notes, certain prior year amounts have been reclassified to conform to the current year presentation. In the notes to the unaudited condensed consolidated financial statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. Certain columns and rows in our financial statements and notes thereto may not add due to the use of rounded numbers.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Please refer to "Note 1. Basis of Presentation and Summary of Significant Accounting Policies," to our consolidated financial statements from our 2021 Annual Report for the discussion of our significant accounting policies.
Cash and Cash Equivalents
As of March 31, 2022 and December 31, 2021, we had $619 million and $601 million, respectively, of cash held in bank accounts that cannot be readily released, transferred or otherwise converted into a currency that is regularly transacted internationally, due to lack of market liquidity, capital controls or similar monetary or exchange limitations limiting the flow of capital out of the jurisdiction. These funds are available to fund operations and growth in these jurisdictions, and we do not currently anticipate a need to transfer these funds to the U.S.
Baker Hughes Company 2022 First Quarter Form 10-Q | 6



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NEW ACCOUNTING STANDARDS TO BE ADOPTED
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 our financial position or results of operations.
NOTE 2. REVENUE RELATED TO CONTRACTS WITH CUSTOMERS
DISAGGREGATED REVENUE
We disaggregate our revenue from contracts with customers by primary geographic markets.
Three Months Ended March 31,
Total Revenue20222021
U.S.$1,104 $1,052 
Non-U.S.3,731 3,730 
Total$4,835 $4,782 
REMAINING PERFORMANCE OBLIGATIONS
As of March 31, 2022 and 2021, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $25.8 billion and $23.2 billion, respectively. As of March 31, 2022, we expect to recognize revenue of approximately 53%, 68% and 87% of the total remaining performance obligations within 2, 5, and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations.
NOTE 3. CURRENT RECEIVABLES
Current receivables are comprised of the following:
March 31, 2022December 31, 2021
Customer receivables$4,849 $4,724 
Related parties464 481 
Other769 846 
Total current receivables6,082 6,051 
Less: Allowance for credit losses(344)(400)
Total current receivables, net$5,738 $5,651 
Customer receivables are recorded at the invoiced amount. Related parties consists of amounts owed to us primarily by GE. The "Other" category consists primarily of indirect taxes, advance payments to suppliers, and customer retentions.
NOTE 4. INVENTORIES
Inventories, net of reserves of $384 million and $374 million as of March 31, 2022 and December 31, 2021, respectively, are comprised of the following:
March 31, 2022December 31, 2021
Finished goods$2,174 $2,228 
Work in process and raw materials1,977 1,751 
Total inventories, net$4,151 $3,979 
Baker Hughes Company 2022 First Quarter Form 10-Q | 7



Baker Hughes Company
Notes to Unaudited Condensed 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
Oilfield
Equipment
Turbo-
machinery &
Process
Solutions
Digital
Solutions
Total
Balance at December 31, 2020, gross$15,656 $4,162 $2,234 $2,452 $24,504 
Accumulated impairment at December 31, 2020(14,117)(4,156) (254)(18,527)
Balance at December 31, 20201,539 6 2,234 2,198 5,977 
Currency exchange and others
10 (3)(62)37 (18)
Balance at December 31, 20211,549 3 2,172 2,235 5,959 
Currency exchange and others  (15)45 30 
Balance at March 31, 2022$1,549 $3 $2,157 $2,280 $5,989 
We perform our annual goodwill impairment test for each of our reporting units as of July 1 of each fiscal year, in conjunction with our annual strategic planning process. Our reporting units are the same as our four reportable segments. We also test goodwill for impairment whenever events or circumstances occur which, in our judgment, could more likely than not reduce the fair value of one or more reporting units below its carrying value. Potential impairment indicators include, but are not limited to, (i) the results of our 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 our market capitalization below our book value, and the magnitude and duration of those declines, if any.
During the first quarter of 2022, we completed a review to assess whether indicators of impairment existed. As a result of this assessment, we concluded that no indicators existed that would lead to a determination that it is more likely than not that the fair value of each reporting unit is less than its carrying value. There can be no assurances that future sustained declines in macroeconomic or business conditions affecting our industry will not occur, which could result in goodwill impairment charges in future periods.
OTHER INTANGIBLE ASSETS
Intangible assets are comprised of the following:
March 31, 2022December 31, 2021
Gross
Carrying
Amount
Accumulated
Amortization
NetGross
Carrying
Amount
Accumulated
Amortization
Net
Customer relationships$1,921 $(767)$1,154 $1,922 $(752)$1,170 
Technology1,084 (761)323 1,090 (747)343 
Trade names and trademarks292 (172)120 292 (169)123 
Capitalized software1,321 (1,065)256 1,311 (1,057)254 
Finite-lived intangible assets4,618 (2,765)1,853 4,615 (2,725)1,890 
Indefinite-lived intangible assets2,265 — 2,265 2,241 — 2,241 
Total intangible assets$6,883 $(2,765)$4,118 $6,856 $(2,725)$4,131 
Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 1 to 35 years. Amortization expense for the three months ended March 31, 2022 and 2021 was $55 million and $69 million, respectively.
Baker Hughes Company 2022 First Quarter Form 10-Q | 8



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
Estimated amortization expense for the remainder of 2022 and each of the subsequent five fiscal years is expected to be as follows:
YearEstimated Amortization Expense
Remainder of 2022$161 
2023203 
2024188 
2025146 
2026100 
202781 
NOTE 6. CONTRACT AND OTHER DEFERRED ASSETS
Our long-term product service agreements relate to our Turbomachinery & Process Solutions segment. Contract assets reflect revenue earned in excess of billings on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements and other deferred contract related costs. Contract assets are comprised of the following:
March 31, 2022December 31, 2021
Long-term product service agreements $550 $589 
Long-term equipment contracts (1)
922 825 
Contract assets (total revenue in excess of billings)1,472 1,414 
Deferred inventory costs173 156 
Non-recurring engineering costs26 28 
Contract and other deferred assets$1,671 $1,598 
(1)Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment and certain other service agreements.
Revenue recognized during the three months ended March 31, 2022 and 2021 from performance obligations satisfied (or partially satisfied) in previous periods related to our long-term service agreements was $(4) million and nil, respectively. This includes revenue recognized from revisions to cost or billing estimates that may affect a contract’s total estimated profitability resulting in an adjustment of earnings.
NOTE 7. PROGRESS COLLECTIONS AND DEFERRED INCOME
Contract liabilities include progress collections, which reflects billings in excess of revenue, and deferred income on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements. Contract liabilities are comprised of the following:
March 31, 2022December 31, 2021
Progress collections$3,349 $3,108 
Deferred income132 124 
Progress collections and deferred income (contract liabilities)$3,481 $3,232 
Revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the contract liabilities at the beginning of the period was $739 million and $878 million, respectively.
Baker Hughes Company 2022 First Quarter Form 10-Q | 9



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 8. LEASES
Our leasing activities primarily consist of operating leases for administrative offices, manufacturing facilities, research centers, service centers, sales offices and certain equipment.
Three Months Ended March 31,
Operating Lease Expense20222021
Long-term fixed lease$63 $62 
Long-term variable lease9 9 
Short-term lease109 99 
Total operating lease expense$181 $170 
Cash flows used in operating activities for operating leases approximates our expense for the three months ended March 31, 2022 and 2021.
The weighted-average remaining lease term as of March 31, 2022 and December 31, 2021 was approximately nine years for our operating leases. The weighted-average discount rate used to determine the operating lease liability as of March 31, 2022 and December 31, 2021 was 3.3%.
NOTE 9. BORROWINGS
The Company's borrowings are comprised of the following:
March 31, 2022December 31, 2021
Current borrowings
Other borrowings$35 $40 
Long-term borrowings  
1.231% Senior Notes due December 2023
648 647 
8.55% Debentures due June 2024
117 118 
2.061% Senior Notes due December 2026
597 597 
3.337% Senior Notes due December 2027
1,308 1,335 
6.875% Notes due January 2029
277 279 
3.138% Senior Notes due November 2029
522 522 
4.486% Senior Notes due May 2030
497 497 
5.125% Senior Notes due September 2040
1,290 1,292 
4.080% Senior Notes due December 2047
1,337 1,337 
Other long-term borrowings57 63 
Total long-term borrowings6,650 6,687 
Total borrowings$6,685 $6,727 
The estimated fair value of total borrowings at March 31, 2022 and December 31, 2021 was $6,732 million and $7,328 million, respectively. For a majority of our borrowings the fair value was determined using quoted period-end market prices. Where market prices are not available, we estimate fair values based on valuation methodologies using current market interest rate data adjusted for our non-performance risk.
BHH LLC has a $3 billion committed unsecured revolving credit facility ("the Credit Agreement") with commercial banks maturing in December 2024. In addition, we have a commercial paper program with authorization up to $3 billion under which we may issue from time to time commercial paper with maturities of no
Baker Hughes Company 2022 First Quarter Form 10-Q | 10



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
more than 397 days. At March 31, 2022 and December 31, 2021, there were no borrowings under either the Credit Agreement or the commercial paper program.
Baker Hughes Co-Obligor, Inc. is a co-obligor, jointly and severally with BHH LLC on our 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 March 31, 2022, Baker Hughes Co-Obligor, Inc. is a co-obligor of our long-term debt securities totaling $6,594 million.
Certain Senior Notes contain covenants that restrict BHH LLC'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 March 31, 2022, we were in compliance with all debt covenants.
NOTE 10. INCOME TAXES
For the three months ended March 31, 2022, the provision for income taxes was $107 million. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily related to losses with no tax benefit due to valuation allowances and earnings in jurisdictions with tax rates higher than the U.S., partially offset by tax benefits related to uncertain tax positions.
For the three months ended March 31, 2021, the provision for income taxes was $69 million. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily related to losses with no tax benefit due to valuation allowances.
NOTE 11. EQUITY
COMMON STOCK
We are authorized to issue 2 billion shares of Class A common stock, 1.25 billion shares of Class B common stock and 50 million shares of preferred stock each of which have a par value of $0.0001 per share. The number of shares outstanding of Class A and Class B common stock as of March 31, 2022 is 985 million and 41 million, respectively. We have not issued any preferred stock. GE owns all the issued and outstanding Class B common stock. Each share of Class A and Class B common stock and the associated membership interest in BHH LLC form a paired interest. While each share of Class B common stock has equal voting rights to a share of Class A common stock, it has no economic rights, meaning holders of Class B common stock have no right to dividends or any assets in the event of liquidation of the Company. GE is entitled through their ownership of BHH LLC common units ("LLC Units") to receive distributions on an equal amount of any dividend paid by the Company.
In 2021, our Board of Directors authorized each of the Company and BHH LLC to repurchase up to $2 billion of its Class A common stock and LLC Units, respectively. We expect to fund the repurchase program from cash generated from operations, and we expect to make share repurchases from time to time subject to the Company's capital plan, market conditions, and other factors, including regulatory restrictions. The repurchase program may be suspended or discontinued at any time and does not have a specified expiration date. During the three months ended March 31, 2022, the Company and BHH LLC repurchased and canceled 8.1 million shares of Class A common stock and LLC Units, respectively, each for $236 million, representing an average price per share of $28.96. This includes 0.4 million shares totaling $11 million that were repurchased in December 2021 but not settled and cancelled until January 2022. At March 31, 2022, the Company and BHH LLC had authorization remaining to repurchase up to approximately $1.3 billion of its Class A common stock and LLC Units, respectively.
Baker Hughes Company 2022 First Quarter Form 10-Q | 11



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
The following table presents the changes in the number of shares outstanding (in thousands):
Class A
Common Stock
Class B
Common Stock
2022202120222021
Balance at January 1909,142 723,999 116,548 311,433 
Issue of shares upon vesting of restricted stock units (1)
5,906 4,663   
Issue of shares on exercises of stock options (1)
1,233 181   
Issue of shares for employee stock purchase plan591 677   
Exchange of Class B common stock for Class A common stock (2)
75,957 43,686 (75,957)(43,686)
Repurchase and cancellation of Class A common stock(8,142)   
Balance at March 31984,688 773,207 40,591 267,747 
(1)Share amounts reflected above are net of shares withheld to satisfy the employee's tax withholding obligation.
(2)When shares of Class B common stock, together with associated LLC Units, are exchanged for shares of Class A common stock pursuant to the Exchange Agreement, such shares of Class B common stock are canceled.
ACCUMULATED OTHER COMPREHENSIVE LOSS (AOCL)
The following tables present the changes in accumulated other comprehensive loss, net of tax:
Foreign Currency Translation AdjustmentsCash Flow HedgesBenefit PlansAccumulated Other Comprehensive Loss
Balance at December 31, 2021$(2,125)$(10)$(250)$(2,385)
Other comprehensive income (loss) before reclassifications(17) 5 (12)
Amounts reclassified from accumulated other comprehensive loss34 1 5 40 
Deferred taxes  (2)(2)
Other comprehensive income (loss)17 1 8 26 
Less: Other comprehensive income (loss) attributable to noncontrolling interests
    
Less: Reallocation of AOCL based on change in ownership of LLC Units177 2 21 200 
Balance at March 31, 2022$(2,285)$(11)$(263)$(2,559)
Baker Hughes Company 2022 First Quarter Form 10-Q | 12



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
Foreign Currency Translation AdjustmentsCash Flow HedgesBenefit PlansAccumulated Other Comprehensive Loss
Balance at December 31, 2020$(1,464)$3 $(317)$(1,778)
Other comprehensive income (loss) before reclassifications(50)8 (9)(51)
Amounts reclassified from accumulated other comprehensive loss (2)11 9 
Deferred taxes(1) 1  
Other comprehensive income (loss)(51)6 3 (42)
Less: Other comprehensive income (loss) attributable to noncontrolling interests(13)2  (11)
Less: Reallocation of AOCL based on change in ownership of LLC Units92  19 111 
Balance at March 31, 2021$(1,594)$7 $(333)$(1,920)
The amounts reclassified from accumulated other comprehensive loss during the three months ended March 31, 2022 and 2021 represent (i) gains (losses) reclassified on cash flow hedges when the hedged transaction occurs, (ii) the amortization of net actuarial gain (loss), prior service credit, and curtailments which are included in the computation of net periodic pension cost, and (iii) the release of foreign currency translation adjustments (see "Note 17. Restructuring, Impairment, and Other" for additional details).
NONCONTROLLING INTEREST
Noncontrolling interests represent the portion of net assets in consolidated entities that are not owned by the Company. As of March 31, 2022 and December 31, 2021, GE owned approximately 4% and 11.4%, respectively, of BHH LLC and this represents the majority of the noncontrolling interest balance reported within equity.
March 31, 2022December 31, 2021
GE's interest in BHH LLC$607 $1,777 
Other noncontrolling interests136 139 
Total noncontrolling interests$743 $1,916 
NOTE 12. EARNINGS PER SHARE
Basic and diluted net income (loss) per share of Class A common stock is presented below:
Three Months Ended March 31,
(In millions, except per share amounts)20222021
Net income (loss)$80 $(605)
Less: Net income (loss) attributable to noncontrolling interests8 (153)
Net income (loss) attributable to Baker Hughes Company$72 $(452)
Weighted average shares outstanding:
Class A basic938 740 
Class A diluted948 740 
Net income (loss) per share attributable to common stockholders:
Class A basic & diluted$0.08 $(0.61)
Baker Hughes Company 2022 First Quarter Form 10-Q | 13



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
Shares of our Class B common stock do not share in earnings or losses of the Company and are not considered in the calculation of basic or diluted earnings per share ("EPS") above. As such, separate presentation of basic and diluted EPS of Class B under the two class method has not been presented. The basic weighted average shares outstanding for our Class B common stock for the three months ended March 31, 2022 and 2021 were 88 million and 300 million, respectively. The basic weighted average shares outstanding for both our Class A and Class B common stock combined for the three months ended March 31, 2022 and 2021 were 1,026 million and 1,039 million, respectively.
Under the Exchange Agreement between GE and us, GE is entitled to exchange its holding in our Class B common stock, and associated LLC Units, for Class A common stock on a one-for-one basis (subject to adjustment in accordance with the terms of the Exchange Agreement) or, at the option of Baker Hughes, an amount of cash equal to the aggregate value (determined in accordance with the terms of the Exchange Agreement) of the shares of Class A common stock that would have otherwise been received by GE in the exchange. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) attributable to holders of Class A common stock would be adjusted due to the elimination of the noncontrolling interests associated with the Class B common stock (including any tax impact). For the three months ended March 31, 2022 and 2021, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.
For the three months ended March 31, 2022, Class A diluted shares include the dilutive impact of equity awards except for approximately 2 million options that were excluded because the exercise price exceeded the average market price of the Class A common stock and is therefore antidilutive. For the three months ended March 31, 2021, we excluded all outstanding equity awards from the computation of diluted net loss per share because their effect is antidilutive.
NOTE 13. FINANCIAL INSTRUMENTS
RECURRING FAIR VALUE MEASUREMENTS
Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities.
March 31, 2022December 31, 2021
Level 1Level 2Level 3Net BalanceLevel 1Level 2Level 3Net Balance
Assets   
Derivatives
$ $37 $ $37 $ $29 $ $29 
Investment securities1,023 19 8 1,050 1,033  8 1,041 
Total assets1,023 56 8 1,087 1,033 29 8 1,070 
Liabilities
Derivatives (67) (67) (49) (49)
Total liabilities$ $(67)$ $(67)$ $(49)$ $(49)
There were no transfers to, or from, Level 3 during the three months ended March 31, 2022.
The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities:
20222021
Balance at January 1$8 $30 
Proceeds at maturity (16)
Balance at March 31$8 $14 
Baker Hughes Company 2022 First Quarter Form 10-Q | 14



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
The most significant unobservable input used in the valuation of our Level 3 instruments is the discount rate. Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value of our investment securities. There are no unrealized gains or losses recognized in the condensed consolidated statement of income (loss) on account of any Level 3 instrument still held at the reporting date.
March 31, 2022December 31, 2021
Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair ValueAmortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Investment securities      
Non-U.S. debt securities (1)
$8 $ $ $8 $8 $ $ $8 
Equity securities (2)
575 467  1,042 579 455 (1)1,033 
Total$583 $467 $ $1,050 $587 $455 $(1)$1,041 
(1)All of our investment securities are classified as available for sale instruments. Non-U.S. debt securities mature within one year.
(2)Gains (losses) recorded to earnings related to these securities were $12 million and $(786) million for the three months ended March 31, 2022 and 2021, respectively.
As of March 31, 2022 and December 31, 2021, our equity securities with readily determinable fair values are comprised primarily of our investment in C3.ai, Inc. ("C3 AI") of $196 million and $270 million, respectively, and ADNOC Drilling of $825 million and $741 million, respectively. We measured our investments to fair value based on quoted prices in active markets.
As of March 31, 2022 and December 31, 2021, our investment in C3 AI consists of 8,650,476 shares, of C3 AI Class A common stock ("C3 AI Shares"). There were no C3 AI Shares sold during the three months ended March 31, 2022. For the three months ended March 31, 2022 and 2021, we recorded a loss of $74 million and $788 million, respectively, from the net change in fair value of our investment in C3 AI, which is reported in “Other non-operating loss, net” in our condensed consolidated statements of income (loss).
As of March 31, 2022 and December 31, 2021, our investment in ADNOC Drilling consists of 800,000,000 shares. For the three months ended March 31, 2022, we recorded a gain of $85 million from the net change in fair value of our investment in ADNOC Drilling, which is reported in “Other non-operating loss, net” in our condensed consolidated statements of income (loss).
As of March 31, 2022 and December 31, 2021, $1,050 million and $1,041 million of total investment securities are recorded in "All other current assets," respectively.
FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS
Our financial instruments include cash and cash equivalents, current receivables, certain investments, accounts payable, short and long-term debt, and derivative financial instruments. Except for long-term debt, the estimated fair value of these financial instruments as of March 31, 2022 and December 31, 2021 approximates their carrying value as reflected in our condensed consolidated financial statements. For further information on the fair value of our debt, see "Note 9. Borrowings."
Baker Hughes Company 2022 First Quarter Form 10-Q | 15



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
DERIVATIVES AND HEDGING
We use derivatives to manage our risks and do not use derivatives for speculation. The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives.
 March 31, 2022December 31, 2021
AssetsLiabilitiesAssetsLiabilities
Derivatives accounted for as hedges
Currency exchange contracts$ $(2)$ $(3)
Interest rate swap contracts (37) (10)
Derivatives not accounted for as hedges
Currency exchange contracts and other37 (28)29 (36)
Total derivatives$37 $(67)$29 $(49)
Derivatives are classified in the condensed consolidated statements of financial position depending on their respective maturity date. As of March 31, 2022 and December 31, 2021, $36 million and $28 million of derivative assets are recorded in "All other current assets" and $1 million and $1 million are recorded in "All other assets" of the condensed consolidated statements of financial position, respectively. As of March 31, 2022 and December 31, 2021, $29 million and $39 million of derivative liabilities are recorded in "All other current liabilities" and $38 million and $10 million are recorded in "All other liabilities" of the condensed consolidated statements of financial position, respectively.
FORMS OF HEDGING
Cash Flow Hedges
We use cash flow hedging primarily to reduce or eliminate the effects of foreign exchange rate changes on purchase and sale contracts. Accordingly, the vast majority of our derivative activity in this category consists of currency exchange contracts. Changes in the fair value of cash flow hedges are recorded in a separate component of equity (referred to as "Accumulated Other Comprehensive Income", or "AOCI") and are recorded in earnings in the period in which the hedged transaction occurs. See "Note 11. Equity" for further information on activity in AOCI for cash flow hedges. As of March 31, 2022 and December 31, 2021, the maximum term of derivative instruments that hedge forecasted transactions was one year.
Fair Value Hedges
All of our long-term debt is comprised of fixed rate instruments. We are subject to interest rate risk on our debt portfolio and may use interest rate swaps to manage the economic effect of fixed rate obligations associated with certain debt. Under these arrangements, we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount.
As of March 31, 2022 and December 31, 2021, 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 LIBOR index as a hedge of its exposure to changes in fair value that are attributable to interest rate risk. We concluded that the interest rate swap met the criteria necessary to qualify for the short-cut method of hedge accounting, and as such, an assumption is made that the change in the fair value of the hedged debt, due to changes in the benchmark rate, exactly offsets the change in the fair value of the interest rate swaps. Therefore, the derivative is 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 is recorded as gains or losses in interest expense and is equally offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense.
Baker Hughes Company 2022 First Quarter Form 10-Q | 16



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
Economic Hedges
These derivatives are not designated as hedges from an accounting standpoint (and therefore we do not apply hedge accounting to the relationship) but otherwise serve the same economic purpose as other hedging arrangements. Economic hedges are marked to fair value through earnings each period.
The following table summarizes the gains (losses) from derivatives not designated as hedges in the condensed consolidated statements of income (loss):
Derivatives not designated as hedging instrumentsCondensed consolidated statement of income captionThree Months Ended March 31,
20222021
Currency exchange contracts (1)
Cost of goods sold$(2)$11 
Currency exchange contractsCost of services sold3 3 
Commodity derivativesCost of goods sold9 3 
Total (2)
$10 $17 
(1)Excludes gains of $1 million and $3 million on embedded derivatives for the three months ended March 31, 2022 and 2021, respectively, as embedded derivatives are not considered to be hedging instruments in our economic hedges.
(2)The effect on earnings of derivatives not designated as hedges is substantially offset by the change in fair value of the economically hedged items in the current and future periods.
NOTIONAL AMOUNT OF DERIVATIVES
The notional amount of a derivative is the number of units of the underlying. A substantial majority of the outstanding notional amount of $3.8 billion and $3.9 billion at March 31, 2022 and December 31, 2021, respectively, is related to hedges of anticipated sales and purchases in foreign currency, commodity purchases, changes in interest rates, and contractual terms in contracts that are considered embedded derivatives and for intercompany borrowings in foreign currencies. We generally disclose derivative notional amounts on a gross basis to indicate the total counterparty risk. Where we have gross purchase and sale derivative contracts for a particular currency, we look to execute these contracts with the same counterparty to reduce our exposure. The notional amount 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.
COUNTERPARTY CREDIT RISK
Fair values of our derivatives can change significantly from period to period based on, among other factors, market movements and changes in our positions. We manage counterparty credit risk (the risk that counterparties will default and not make payments to us according to the terms of our agreements) on an individual counterparty basis.
NOTE 14. SEGMENT INFORMATION
Our reportable segments, which are the same as our operating segments, are organized based on the nature of markets and customers. We report our operating results through our four operating segments that consist of similar products and services within each segment. These products and services operate across upstream oil and gas and broader energy and industrial markets.
OILFIELD SERVICES ("OFS")
Oilfield Services provides discrete products and services, as well as integrated well services for onshore and offshore operations across the lifecycle of a well, ranging from drilling, evaluation, completion, production and intervention. Products and services include drilling services, including directional drilling, measurement while drilling & logging while drilling, diamond and tri-cone drill bits, drilling and completions fluids, wireline services, downhole
Baker Hughes Company 2022 First Quarter Form 10-Q | 17



Baker Hughes Company
Notes to Unaudited Condensed Consolidated Financial Statements
completion tools and systems, wellbore intervention tools and services, pressure pumping, oilfield and industrial chemicals and artificial lift technologies, including electrical submersible pumps and surface pumping systems.
OILFIELD EQUIPMENT ("OFE")
Oilfield Equipment provides a broad portfolio of products and services required to facilitate the safe and reliable control and flow of hydrocarbons from the wellhead to the production facilities. The Oilfield Equipment portfolio has solutions for the subsea, offshore surface, and onshore operating environments. Products and services include subsea and surface wellheads, pressure control and production systems and services, flexible pipe systems for offshore and onshore applications, and life-of-field solutions including well intervention and decommissioning solutions, covering the entire life cycle of a field.