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Baker Hughes First Quarter 2022 Results

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   |    Wednesday,April 20,2022

Baker Hughes reported its first quarter 2022 results.

Lorenzo Simonelli, Baker Hughes chairman and chief executive officer, commented: “Our first quarter results reflect operating in a very volatile market environment during the first few months of 2022. On the positive side, we recorded strong orders from TPS as the LNG order cycle continues to unfold. However, we did see some challenges in other parts of the business, which continue to see pressures from broader global supply chain constraints, as well as some impact from the recent geopolitical events. I would like to thank our team for their hard work and commitment to deliver for our customers and continue to execute our strategy.

“As we look ahead to the rest of 2022, we see a favorable oil and gas price backdrop but also a dynamic operating environment. The recent and unfortunate geopolitical events are exacerbating several trends, including broad-based inflation and supply pressures for key materials, commodities and labor. Despite some of the challenges, we are optimistic on the outlook across both of our core business areas and excited about the new energy investments we are making for Baker Hughes. We believe that we are well positioned to benefit from an extended cyclical recovery in upstream oil & gas and longer-term structural growth trends in LNG, new energy and industrial asset management.

“Baker Hughes remains committed to helping deliver energy globally in a safe, clean and reliable manner. We also remain committed to a net-zero future and leadership in the energy transition, while we will continue to perform for shareholders,” concluded Simonelli.

Segment Overview & Financial Results

Orders for the quarter were $6,837 million, up 3% sequentially and up 51% year-over-year. The sequential increase was a result of higher order intake in Oilfield Equipment, and Turbomachinery & Process Solutions, partially offset by a reduction in Digital Solutions and Oilfield Services. Sequentially, equipment orders were up 17% and service orders were down 11%.

Year-over-year, the increase in orders was a result of higher order intake in all segments. Year-over-year equipment orders were up $2,032 million, over 100% and service orders were up $264 million, or 10%.

The Company's total book-to-bill ratio in the quarter was 1.4; the equipment book-to-bill ratio in the quarter was 1.9.

Remaining Performance Obligations (RPO) in the first quarter ended at $25.8 billion, an increase of $2.3 billion from the fourth quarter of 2021. Equipment RPO was $9.9 billion, up 20%. Services RPO was $15.9 billion, up 4% sequentially.

On a GAAP basis, operating income for the first quarter of 2022 was $279 million. Operating income decreased $296 million sequentially and increased $115 million year-over-year. Total segment operating income was $453 million for the first quarter of 2022, down 33% sequentially and up 20% year-over-year.

Adjusted operating income (a non-GAAP measure) for the first quarter of 2022 was $348 million, which excludes adjustments totaling $70 million before tax. A complete list of the adjusting items and associated reconciliation from GAAP has been provided in Table 1a in the section entitled “Reconciliation of GAAP to non-GAAP Financial Measures.” Adjusted operating income for the first quarter of 2022 was down 39% sequentially, driven by lower volume and margin contraction in all segments. Adjusted operating income was up 29% year-over-year driven by volume and margin expansion in Oilfield Services and margin expansion in Turbomachinery & Process Solutions, partially offset by lower volume in Oilfield Equipment and margin contraction in Digital Solutions.

Depreciation and amortization for the first quarter of 2022 was $277 million.

Adjusted EBITDA (a non-GAAP measure) for the first quarter of 2022 was $625 million, which excludes adjustments totaling $70 million before tax. See Table 1b in the section entitled “Reconciliation of GAAP to non-GAAP Financial Measures.” Adjusted EBITDA for the first quarter was down 26% sequentially and up 11% year-over-year.

Corporate costs were $105 million in the first quarter of 2022, down 1% sequentially and down 4% year-over-year.

Other Financial Items

Income tax expense in the first quarter of 2022 was $107 million.

Other non-operating loss in the first quarter of 2022 was $28 million. Included in other non-operating loss are gains from the change in fair value of our investment in ADNOC Drilling, and losses from the change in fair value of our investment in C3 AI.

GAAP diluted earnings per share was $0.08. Adjusted diluted earnings per share was $0.15. Excluded from adjusted diluted earnings per share were all items listed in Table 1a as well as the "other adjustments (non-operating)" found in Table 1c in the section entitled "Reconciliation of GAAP to non-GAAP Financial Measures."

Cash flow from operating activities was $72 million for the first quarter of 2022. Free cash flow (a non-GAAP measure) for the quarter was $(105) million. A reconciliation from GAAP has been provided in Table 1d in the section entitled "Reconciliation of GAAP to non-GAAP Financial Measures."

Capital expenditures, net of proceeds from disposal of assets, were $177 million for the first quarter of 2022.

Quarter Highlights

The OFS segment secured multiple well construction contracts with a leading national oil company in the Middle East. Baker Hughes will provide the full scope of technologies from its Integrated Well Services and Solutions (IWSS) offering, including drill bits, directional drilling and logging, drilling fluids, and completion products.

OFE secured a contract in Asia to provide subsea wellhead and subsea production systems as well as related services, including 12 subsea trees, for a deepwater gas field. The project is critical to support natural gas development in the region.

OFE secured multiple subsea equipment contracts to support the recently-discovered offshore Baleine field in Ivory Coast. The contract awards include subsea production systems and offshore equipment as well as flexible flowline and riser systems and connectors. The contract will be executed as a fast-track project using standardized equipment designs to save cost and time, and it is the first project in the country for OFE’s Subsea Production Systems (SPS) product line.

TPS secured a major contract from Venture Global LNG for the first phase of the Plaquemines LNG project in Louisiana. Baker Hughes will provide an LNG system, including 24 modularized compression trains, as well as field services to assist in commissioning the supplied equipment. The contract was awarded under the companies’ master equipment supply agreement to provide 70 million tons per annum (MTPA) of LNG production capacity, and builds on a 2021 award for Baker Hughes to provide the power generation and electrical distribution equipment for the power island of Plaquemines LNG.

TPS received an order for advanced gas turbine generator equipment for Air Products’ upcoming net-zero hydrogen energy complex in Alberta, Canada. The order is part of the companies’ previously announced hydrogen collaboration framework in 2021, and TPS will supply NovaLT16 turbines which will run on 100% hydrogen.

The DS segment saw continued interest in its condition monitoring systems and services in the renewable energy sector. The Bently Nevada product line secured a multi-year agreement with a major wind turbine manufacturer, providing remote monitoring & diagnostic services for 175 wind turbines to help lower repair costs and minimize downtime. Bently Nevada also secured a contract with a renewable power customer in Australia for ARMS Reliability’s consulting services to optimize industrial assets at a major hydropower generation station.


In April, the Company invested in HIF Global, a world leader in eFuels development, to help fund expansion of HIF’s decarbonization business. Baker Hughes’ equity investment is joined by similar investments from Porsche AG, EIG, AME, and Gemstone Investments, and it will be used to develop carbon-neutral eFuels projects in the U.S., Chile and Australia.

Also in April, Baker Hughes acquired Mosaic Materials, a growth stage technology company. Mosaic is focused on developing a proprietary direct air capture technology using Metal-Organic Framework (MOF) materials that can be used to separate carbon dioxide (CO2) from gas mixtures across a variety of applications. Baker Hughes will draw from its existing advanced capabilities including modular design and material science to develop and scale Mosaic’s innovative technology. This will enhance the Company’s carbon capture, utilization and storage portfolio, enabling direct air capture with higher efficiency and lower total cost of ownership.

TPS announced a strategic partnership with, and invested in, NET Power to advance the technical and commercial deployment of NET Power’s low-cost, electrical power system that generates no atmospheric emissions and inherently capture all CO2. Baker Hughes will apply its advanced TPS technology to develop supercritical COturboexpanders and other critical pumping and compression technology for NET Power’s plants, as well as bring its systems integration and process experience to accelerate commercial deployment.

TPS continued to gain traction with its NovaLT gas turbine technology for a broad range of industrial and energy applications. TPS secured a contract with TERNA in Greece to provide hydrogen-ready turbomachinery technology for a new compression station of the Greek Natural Gas Transmission System. The contract includes three compression trains for a total of three NovaLT12 turbines and three PCL compressors. The technology has been configured to support the compression station’s capabilities to transport up to 10% hydrogen and is expected to enter operation in 2024.

OFS signed an agreement to acquire Altus Intervention, a leading international provider of well intervention services and down-hole oil & gas technology with 40 years of industry experience. The acquisition complements Baker Hughes’ existing portfolio of oilfield technologies and integrated solutions by enhancing the Company's life-of-well capabilities as operators look to improve efficiencies from mature fields. The transaction is expected to close in the second half of 2022.

OFS announced the formation of a new chemicals joint venture (JV) in Saudi Arabia with Dussur, an affiliate of Aramco and SABIC. The JV will utilize Baker Hughes' existing Oilfield & Industrial Chemicals (OIC) product line footprint in the region, enhancing efficiencies between the Company, suppliers and customers while lowering operating expenses and increasing locally sourced materials. Baker Hughes will contribute its existing OIC infrastructure, personnel, and contracts within Saudi Arabia for the JV.

OFS announced an investment in California-based geothermal innovator GreenFire Energy. The companies will collaborate on bringing the first integrated Advanced Geothermal Systems solution to the market, as well as partnering on project feasibility analyses, system installations, and global project developments.

DS saw increased traction in its industrial asset management (IAM) solutions. The Bently Nevada product line secured a multi-year contract with ACELEN in Brazil to implement the ARMS Reliability OnePM solution to improve management, enhance performance, and reduce maintenance costs at a major refinery.


Baker Hughes advanced its Industrial Asset Management strategy by announcing a collaboration with Accenture, C3 AI, and Microsoft to develop IAM solutions for clients. The collaboration will focus on creating and deploying Baker Hughes IAM solutions to improve the safety, efficiency, and emissions profile of industrial machines, field equipment, and other physical assets. The solutions will be intended for industries where we play today, including oil and gas, renewable energy, thermal power generation, metals and mining, chemicals, and pulp and paper.

TPS was awarded a contract to support ethylene production for INEOS’ Project One in Belgium, one of the most energy-efficient and sustainable olefin complexes in Europe. Baker Hughes will supply three large centrifugal compressor trains, driven by steam turbines for cracked gas, ethylene refrigerant and propylene refrigerant compression trains. The contract is one of the largest projects ever for TPS in the petrochemical segment with an annual nameplate capacity of 1.45 million tons of ethylene. The Project One plant aims to have the lowest carbon footprint in the region, also leveraging hydrogen generated during production to be utilized as fuel in addition to renewable energy.

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