AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Protected technology, licenses and limited disclosed exclusivity establish capabilities, but their competitive significance cannot be established from these passages.
durability · — · Long contract horizons and continuing licenses do not establish durable superiority; remaining protection periods and substitution barriers are missing.
customer dependency · — · Service demand and long-term relationships demonstrate relevance, but no material customer replacement penalty is established.
erosion resilience · — · Growing IET demand and weaker OFSE results establish uneven operating performance, without separating competitive erosion from market, disposition and geopolitical effects.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Higher prices contributed to 2023 earnings growth in both segments. This demonstrates a positive realized outcome, but recent pricing persistence and pricing independent of industry conditions are unestablished.
retention · 2/4 · Long-term relationships, first-half gas services order growth and second-quarter gas services revenue growth support continuity through indirect operating evidence. They do not distinguish repeat customers from new demand, and customers retain termination rights.
margin resilience · 2/4 · Historical pricing and cost savings provide offsets, but first-half 2026 OFSE EBITDA fell 10%, with inflation, volume and mix pressure partly offset by productivity. The evidence is mixed and does not establish sustained cost pass-through.
contractual freedom · 1/4 · Several contracts impose fixed or firm pricing with limited relief, while customer termination rights limit protection. These disclosed terms establish constrained repricing freedom, although they do not apply identically to every offering.
Predictability92
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 7.93
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.58
Financial strength—
Missing required inputs: netDebtEbitGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 80.01
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 48.54
- Debt / FCF (x)
- 2.40
- Current ratio (x)
- 1.36
- cashInterestPaid
- 294.00
- cashInterestCoverage
- 12.96
Capital allocation—
Missing required inputs: operatingReturn, dilution. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average SBC / revenue (%)
- 0.74
- cashConversionGrade
- 85.61
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half 2026 operating cash flow of $1.845 billion exceeded $636 million of capital expenditures, and PSI was sold for approximately $1.2 billion. These actual outcomes support discipline, balanced against debt-funded Chart expansion with unproven returns and an increase in shares outstanding without repurchases.
incentive alignment · 3/4 · Existing compensation disclosures establish substantial performance-based pay, required stockholdings and relative performance benchmarking. Change-in-control provisions can fix PSU performance at target following qualifying termination, and actual ownership balances are absent. These limits preclude an exceptional grade.
execution · 2/4 · Reported cash generation, sustained IET backlog growth and $259 million of savings demonstrate delivery. Execution remains mixed: EBITDA margin missed its target, safety objectives were only partly met and OFSE earnings declined. This assessment uses operating outcomes rather than attributing every result solely to management.
governance · 2/4 · An independent Finance Committee, defined lead independent director responsibilities and regular Audit Committee reporting establish functioning oversight arrangements. Combined CEO and chair roles concentrate authority, and the passages do not establish exceptional oversight effectiveness.
Evidence
Baker Hughes maintains a globally distributed intellectual property portfolio, with protection in numerous jurisdictions through thousands of patent applications, issued patents, copyrights, and trade secrets.
Business / intellectual property · Filed 05/02/2026
("GE HealthCare") (NASDAQ: GEHC). In particular, Baker Hughes has: i) an intellectual property cross-license agreement with GE Aerospace, GE Vernova, and GE HealthCare that allows all parties to have continued rights to commercially utilize certain intellectual property of the other pursuant to the terms of the agreement, ii) a heavy duty gas turbine distribution and supply agreement that licenses certain intellectual property of GE Vernova to Baker Hughes, and iii) a second amended and restated supply and technology development agreement with GE Vernova, GE Aerospace, and the aeroderivative joint venture ("Aero JV") which governs the supply of certain aeroderivative technology to us and regulates intellectual property licenses amongst the parties where relevant.
Business / technology licensing and supply agreements · Filed 05/02/2026
While the above agreements have been amended from time to time, these agreements remain in place.
Business / continuing agreements · Filed 05/02/2026
GE will continue to provide Baker Hughes with GE's MarkTM controls products currently in the Nexus Controls portfolio, and we will be the exclusive supplier and service provider of such GE products for our oil and gas customers' control needs.
Note 21 / Nexus Controls disposition and exclusive supply rights · Filed 05/02/2024
Our products and services are sold in highly competitive markets and the competitive environment varies by product line.
Business / competitive markets · Filed 05/02/2026
In order to be competitive, we must provide new and differentiating technologies, reliable products and services that perform as expected and that create value for our customers.
Risk Factors / technology differentiation requirements · Filed 05/02/2026
Although we have long-term contractual frameworks in place with both GE Vernova and GE Aerospace, if either GE Vernova or GE Aerospace were to discontinue or reduce their business with the Company, fail to perform their obligations under existing contracts (such as our long-term supply agreement for heavy-duty gas turbines, the Second Amended and Restated Supply and Technology Development Agreement or the related intellectual property agreements with GE Aerospace) or experience disruptions, our business, financial condition, results of operations and cash flows may be adversely affected.
Risk Factors / technology supplier dependence · Filed 05/02/2026
Our agreements span fixed-fee or turnkey contracts, transactional agreements for products and services, frame and master service agreements, integrated project and alliance models, equipment supply with aftermarket service agreements, and subscription or license agreements for digital software, data, and analytics solutions.
Business / customer agreement types · Filed 05/02/2026
We benefit from stable relationships with many customers based on long-term project contracts and master service agreements.
Business / long-term customer relationships · Filed 05/02/2026
As of June 30, 2026, RPO totaled $40.1 billion, of which OFSE totaled $3.0 billion and IET totaled $37.1 billion.
MD&A / remaining performance obligations by segment · Filed 27/07/2026
As of June 30, 2026, the Company expects to recognize revenue of approximately 53%, 76% and 91% of the total remaining performance obligations within 2, 5, and 15 years, respectively, and the remaining thereafter.
Revenue disclosures / expected RPO recognition · Filed 27/07/2026
Three Months Ended June 30, $ Change Six Months Ended June 30, $ Change 2026 2025 2026 2025 Orders: Oilfield Services & Equipment $ 3,413 $ 3,503 $ (90) $ 6,684 $ 6,784 $ (100) Gas Technology Equipment 4,913 781 4,132 6,736 2,116 4,620 Gas Technology Services 1,314 986 328 2,288 1,899 389 Total Gas Technology 6,227 1,767 4,460 9,024 4,015 5,009 Industrial Products 533 513 20 1,137 1,013 124 Industrial Solutions 274 327 (53) 503 608 (105) Total Industrial Technology 807 839 (32) 1,640 1,621 19 Climate Technology Solutions 54 923 (869) 1,312 1,071 241 Industrial & Energy Technology 7,088 3,530 3,558 11,976 6,708 5,268 Total $ 10,501 $ 7,032 $ 3,469 $ 18,660 $ 13,492 $ 5,168 Remaining Performance Obligations ("RPO") relate to the aggregate amount of the transaction prices allocated to the unsatisfied (or partially unsatisfied) performance obligations.
MD&A / segment orders · Filed 27/07/2026
Our contracts with customers generally may be terminated by the customer for convenience, default, or extended force majeure (which could include inability to perform due to a pandemic or as a result of civil unrest or armed conflicts).
Risk Factors / customer termination rights · Filed 05/02/2026
Termination for convenience may require the payment of an early termination fee by the customer, but the early termination fee may not fully compensate us for the loss of the contract.
Risk Factors / termination fee limitations · Filed 05/02/2026
The increase in income before tax was driven by higher volume and price in both segments and structural cost-out initiatives, positive effect from the change in fair value on certain equity securities, and lower restructuring and impairment charges.
MD&A / 2023 income growth drivers including price · Filed 05/02/2024
Several of those contracts require us to commit to fixed or firm pricing against customer technical specifications, often with limited relief for changes in circumstances.
Business / fixed or firm pricing commitments · Filed 05/02/2026
IET revenue remained flat year-over-year, driven by an increase of $79 million or 11% in Gas Technology Services ("GTS"), an increase of $61 million or 13% in Industrial Products ("IP"), and an increase in Climate Technology Solutions ("CTS") of $49 million or 31%, offset by a decrease of $100 million or 6% in Gas Technology Equipment ("GTE"), and a decrease of $91 million or 33% in Industrial Solutions ("IS") reflective of the Precision Sensors & Instrumentation ("PSI") disposition.
MD&A / second-quarter 2026 IET revenue drivers · Filed 27/07/2026
OFSE segment EBITDA of $1,170 million decreased $130 million, or 10%, in the first six months of 2026 compared to the first six months of 2025.
MD&A / first-half 2026 OFSE EBITDA · Filed 27/07/2026
The reduction of EBITDA in the first six months of 2026, after taking into consideration the disposal of SPC was a result of inflation, lower volume, change in business mix, partially offset by cost-out initiatives, overall productivity, and FX.
MD&A / OFSE inflation, volume, mix and productivity · Filed 27/07/2026
Cash Flows Cash flows provided by (used in) each type of activity were as follows for the six months ended June 30: (In millions) 2026 2025 Operating activities $ 1,845 $ 1,219 Investing activities 874 (596) Financing activities 9,287 (945) Operating Activities Cash flows provided by operating activities were $1,845 million and $1,219 million for the six months ended June 30, 2026 and 2025, respectively.
MD&A / operating cash flows · Filed 27/07/2026
The following table presents depreciation and amortization: Three Months Ended June 30, Six Months Ended June 30, Depreciation and amortization 2026 2025 2026 2025 OFSE $ 266 $ 233 $ 544 $ 459 IET 60 56 128 109 Total segment 326 289 672 568 Corporate 7 5 15 11 Total $ 333 $ 293 $ 687 $ 579 Baker Hughes Company 2026 Second Quarter Form 10-Q | 22 Baker Hughes Company Notes to Unaudited Condensed Consolidated Financial Statements The following table presents capital expenditures: Three Months Ended June 30, Six Months Ended June 30, Capital expenditures 2026 2025 2026 2025 OFSE $ 197 $ 213 $ 415 $ 414 IET 87 69 191 154 Total segment 284 282 606 568 Corporate 16 19 30 33 Total $ 300 $ 301 $ 636 $ 601 NOTE 15.
Segment disclosures / capital expenditures · Filed 27/07/2026
Baker Hughes Company 2026 Second Quarter Form 10-Q | 13 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 2026 2025 Balance at January 1 986,815 989,646 Issue of shares upon vesting of restricted stock units (1) 4,195 4,700 Issue of shares on exercise of stock options (1) 643 82 Issue of shares for employee stock purchase plan 674 770 Repurchase and cancellation of Class A common stock — (9,751) Balance at June 30 992,327 985,447 (1)Share amounts reflected above are net of shares withheld to satisfy the employee's tax withholding obligation.
Equity disclosures / share issuance and repurchases · Filed 27/07/2026
The Company used the net proceeds of the Notes Offering and Term Loans to fund a portion of the cash consideration for the acquisition of Chart, which was completed on July 16, 2026.
Debt disclosures / financing and July 16, 2026 Chart acquisition completion · Filed 27/07/2026
During January 2026, the Company completed the sale of its PSI business, a business within the Industrial Solutions product line of its IET segment, to Crane Company, a diversified manufacturer of engineered industrial products, for a total cash consideration of approximately $1.2 billion.
Note 19 / completed PSI disposition · Filed 27/07/2026
Approximately 90% of Mr. Simonelli’s target total compensation is performance-based and at risk, while the other NEOs have an average of 80% performance-based and at-risk compensation.
Executive Compensation / 2025 performance-based target compensation · Filed 30/03/2026
As discussed previously in the CD&A, the Company’s principal compensation policies, which enable the Company to attract and retain strong and experienced executive officers, include: • providing a significant percentage of total compensation that is variable because it is at-risk, and based on predetermined performance criteria; • requiring significant stock holdings to align the interests of executive officers with those of shareholders; • designing competitive total compensation and rewards programs to enhance our ability to attract and retain knowledgeable and experienced executive officers; and • setting compensation and incentive levels that reflect competitive market practices.
Executive Compensation / existing compensation and stockholding policies · Filed 30/03/2026
On a termination within 24 months following a change in control, the services restrictions on all PSUs will immediately lapse and the satisfaction of performance conditions will be fixed at target.
Executive Compensation / change-in-control PSU treatment · Filed 30/03/2026
• No fatalities 2025 Assessment: Partially Met Objectives Growth & Transformation • Generate $200M of savings • 2025 New Energy orders of $1.68B • Progression in key metrics for six priorities • EBITDA margin under target despite $259M savings generated • $2.0B New Energy orders • Some progress on key metrics 2025 Assessment: Partially Met Objectives Sustainability & Leadership • Scope 1 / 2 reduction against baseline by 30K MTCO2e • Advancement of work around succession pipeline • 51k MTCO2e • Internal pipeline for key ELT roles and increased efforts around talent identification and development 2025 Assessment: Met Objectives Shareholder Returns • TSR improvement above peer benchmarks • Protect and grow dividend • Broaden investor base as part of Company strategic pillars • TSR in 2025 of +15.5%, positioned 4th out of 18 competitors.
Executive Compensation / 2025 objectives and actual outcomes · Filed 30/03/2026
45 Table of Contents Executive Compensation The Human Capital and Compensation Committee considered the achievement for the Strategic Blueprint priorities below for 2025 and provided the following assessments on each priority: Performance Component 2025 Performance Expectation Results Safety & Compliance • HSE day, leading & lagging metrics improvement versus 2024 • Zero Workplace caused fatalities • HSE Perfect Days decreased by 5 to 201, permanent impairment increased by 1 to 2, LTIR increased by 0.03 YoY, and TRIR stayed flat.
Executive Compensation / 2025 safety outcomes · Filed 30/03/2026
Rice Lead Independent Director • reviews the agenda, schedule, and information sent to the directors for Board meetings • works with the Chairman/CEO to propose an annual schedule of major discussion items • leads meetings of the independent directors and regularly meets with the Chairman/CEO for a discussion of matters arising from these meetings • develops and leads the Board evaluation process • develops and leads the Chairman evaluation process • calls additional meetings of the independent directors or the entire Board as deemed appropriate • provides leadership to the Board if circumstances arise in which the role of the Chairman/CEO may be, or may be perceived to be, in conflict • serves as a liaison on Board-related issues between the Chairman/CEO and the independent directors The Board has determined that the current structure, with a combined CEO and Chairman of the Board and a Lead Independent Director, is in the best interests of the Company and our shareholders.
Corporate Governance / combined leadership and lead independent director duties · Filed 30/03/2026
The Board has determined that each member of the Finance Committee is independent.
Corporate Governance / Finance Committee independence · Filed 30/03/2026
The Audit Committee receives reports on our cybersecurity program and developments from our CISO at each of our regular meetings, which occur at least four times per year.
Cybersecurity governance / regular Audit Committee reporting · Filed 05/02/2026
The Human Capital and Compensation Committee assesses the Company’s long-term performance in part through PSUs based on the companies in the OSX index (plus TechnipFMC) each year to align with the wider portfolio of Baker Hughes.
Executive Compensation / performance benchmarking peer group · Filed 30/03/2026
• We ended the year with cash flows from operating activities up 14% year-over-year at $3.81 billion and free cash flow* up 21% year-over-year at $2.73 billion, enhanced by working capital efficiency and customer down payments.
Shareholder letter / reported 2025 operating cash flow and non-GAAP free cash flow · Filed 30/03/2026
Notably, this marked the sixth consecutive year of IET RPO growth.
Shareholder letter / six consecutive years of IET RPO growth · Filed 30/03/2026
