Baker Hughes Company: 10-K Risk Factor Changes

The condition of the capital markets and equity markets in general may affect the price of our common stock and our ability to obtain financing, if necessary. Although the Board of Governors of the Federal Reserve System cut interest rates in each of September, October and December 2025, further cuts are uncertain. Actions by the Board of Governors of the Federal Reserve System to raise interest rates could result in increased borrowing costs or make the cost of borrowing funds commercially unattractive. Furthermore, if our credit rating is downgraded, it could increase borrowing costs under credit facilities and issuances of commercial paper, as well as increase the cost of renewing or obtaining, or make it more difficult to renew, obtain, or issue new debt financing.

The condition of the capital markets and equity markets in general may affect the price of our common stock and our ability to obtain financing, if necessary. Actions by the Federal Reserve to raise interest rates could result in increased borrowing costs or make the cost of borrowing funds commercially unattractive. Furthermore, if our credit rating is downgraded, it could increase borrowing costs under credit facilities and issuances of commercial paper, as well as increase the cost of renewing or obtaining, or make it more difficult to renew, obtain, or issue new debt financing.

Our ability to comply with the FCPA, the U.K. Bribery Act, and various other anti-bribery and anti-corruption laws depends on the success of our ongoing compliance program, including our ability to successfully select, diligence, oversee, and manage our agents, distributors, joint venture partners, suppliers, and other third-party business partners, and supervise, train, and retain competent employees. These laws in many cases impose liability not only for the actions of our employees, but also for the improper conduct of third parties acting on our behalf. As a result, any failure by us, or by any of our employees or business partners, to comply with applicable anti-bribery and anti- corruption requirements could expose us to sanctions and civil and criminal prosecution, fines and penalties, as well as legal expenses and reputational harm that could negatively impact our relationships with customers, regulators, and other stakeholders.

Our ability to comply with the FCPA, the U.K. Bribery Act, and various other anti-bribery and anti-corruption laws depends on the success of our ongoing compliance program, including our ability to successfully manage our agents, distributors and other business partners, and supervise, train, and retain competent employees. We could be subject to sanctions and civil and criminal prosecution, fines and penalties, as well as legal expenses and reputational harm in the event of a finding of a violation of any of these laws by us or any of our employees.

The tools, techniques, methodologies, programs and components we use to provide our products and services may infringe upon, misappropriate or otherwise violate the intellectual property rights of others or be challenged on that basis. Regardless of the merits, any such claims may result in significant legal and other costs and may distract management from running our core business. If such claims were decided against us, then we could be required to pay damages or develop or adopt non-infringing products or services. Resolving such claims with settlement could also increase our costs, including through royalty payments to acquire licenses, if available, from third parties and through the development of replacement technologies. If a license to resolve a claim were not available, we might not be able to continue providing a particular service or product, which could adversely affect our financial condition, results of operations and cash flows. Such claims could harm our image, trademarks and brands, competitive position, or our ability to expand our operations into other jurisdictions. There could be attendant negative publicity, even if ultimately decided in our favor. In addition, third parties may assert that the intellectual property or our rights therein are invalid or unenforceable. If applicable intellectual property rights were invalidated or deemed unenforceable, then the third-party could permit competing uses of such intellectual property rights which, in turn, could lead to a decline in revenues and sales.

The tools, techniques, methodologies, programs and components we use to provide our products and services may infringe upon, misappropriate or otherwise violate the intellectual property rights of others or be challenged on that basis. Regardless of the merits, any such claims may result in significant legal and other costs and may distract management from running our core business. Resolving such claims could increase our costs, including through royalty payments to acquire licenses, if available, from third parties and through the development of replacement technologies. If a license to resolve a claim were not available, we might not be able to continue providing a particular service or product, which could adversely affect our financial condition, results of operations and cash flows.

Variation from normal weather patterns, such as cooler or warmer summers and winters, can have a significant impact on demand for our services and operations. Adverse weather conditions may interrupt or curtail our operations, or our customers' operations, cause supply disruptions and result in a loss of revenue and damage to our equipment and facilities, which may or may not be insured. Such effects have the potential to affect business continuity and operating results, particularly at facilities in coastal areas or areas prone to chronic water scarcity, and could disrupt our operations or those of our customers or suppliers, including through direct damage to physical assets and indirect impacts from supply chain disruption and market volatility. Repercussions of severe or unseasonable weather conditions may include evacuation of personnel and curtailment of services, weather-related damage to offshore drilling rigs resulting in suspension of operations, weather-related damage to our facilities and project work sites, inability to deliver materials to job sites in accordance with contract schedules, decreases in demand for oil and natural gas during unseasonably warm winters, increased insurance premiums and deductibles or a decrease in the availability of coverage in areas subject to severe weather events, and loss of productivity. As a result of the above repercussions or any others, demand for our services and operations may be adversely affected. While we evaluate and incorporate potential ranges of physical risks, it is difficult to predict with certainty the timing, frequency or severity of such events, any of which could have a material adverse effect on our financial condition, results of operations and cash flow.

Variation from normal weather patterns, such as cooler or warmer summers and winters, can have a significant impact on demand for our services and operations. Adverse weather conditions, such as hurricanes in the Gulf of Mexico or extreme winter conditions in Canada or the North Sea, may interrupt or curtail our operations, or our customers' operations, cause supply disruptions and result in a loss of revenue and damage to our equipment and facilities, which may or may not be insured. Further, the physical risks of climate change can include extreme variability in weather patterns such as increased frequency and severity of significant weather events (e.g. flooding, hurricanes and tropical storms), natural hazards (e.g., increased wildfire risk), rising mean temperature and sea levels, and long-term changes in precipitation patterns (e.g. drought, desertification, or poor water quality). Such effects have the potential to affect business continuity and operating results, particularly at facilities in coastal areas or areas prone to chronic water scarcity, and could disrupt our operations or those of our customers or suppliers, including through direct damage to physical assets and indirect impacts from supply chain disruption and market volatility. Repercussions of severe or unseasonable weather conditions, including as a result of climate change, may include evacuation of personnel and curtailment of services, weather-related damage to offshore drilling rigs resulting in suspension of operations, weather-related damage to our facilities and project work sites, inability to deliver materials to job sites in accordance with contract schedules, decreases in demand for oil and natural gas during unseasonably warm winters, and loss of productivity. As a result of the above repercussions or any others, demand for our services and operations may be adversely affected. While we evaluate and incorporate potential ranges of physical risks, it is difficult to predict with certainty the timing, frequency or severity of such events, any of which could have a material adverse effect on our financial condition, results of operations and cash flow.

In the United States, the U.S. Environmental Protection Agency ("EPA") has taken steps to regulate GHG emissions as air pollutants under the U.S. Clean Air Act of 1970, as amended. The EPA's Greenhouse Gas Reporting Rule requires monitoring and reporting of GHG emissions from, among others, certain mobile and stationary GHG emission sources in the oil and natural gas industry. In 2024, the EPA released a final rule expanding the scope of the reporting rule; however, the current administration has taken steps to reconsider these rules. In March 2025, the EPA released a final rule to extend 2025 reporting deadlines and in September 2025, proposed a rulemaking to remove and/or suspend program obligations applicable to various industry sectors. Newly enacted GHG emissions disclosure requirements and subsequent reconsiderations have been and likely will continue to be subject to ongoing legal challenges in the U.S. which may delay the implementation or enforcement of such rules. Although a reduction in GHG reporting obligations in the U.S. may be possible at the federal level in the short-term, with changing administrations and increased regulation by certain states, including California and New York, long-term regulatory trends suggest that regulation of GHG emissions in the United States is likely to increase over time. Further, regulatory requirements for sustainability reporting, including GHG emissions, are expanding internationally, including in the European Union and Australia. International developments focused on restricting or otherwise disincentivizing GHG emissions include the United Nations Framework Convention on Climate Change, which includes implementation of the Paris Agreement and the Kyoto Protocol by the signatories; the Glasgow Climate Pact; the EU and UK Emissions Trading Systems; the EU Methane Regulation; Article 8 of the EU Energy Efficiency Directive and the UK's Streamlined Energy and Carbon Reporting framework; and the EU and the UK's carbon border adjustment mechanisms. Caps or fees on carbon emissions have been and may continue to be established and the cost of such caps or fees could disproportionately affect the fossil-fuel sectors. The implementation of these agreements and other existing or future regulatory mandates, may adversely affect the demand for our products and services, require us or our customers to reduce GHG emissions or impose taxes on us or our customers, all of which could have a material adverse effect on our results of operations. Regulatory disclosure requirements related to sustainability matters and future legislation and regulatory programs to address climate change or reduce emissions of GHGs may continue to increase our cost and burden of compliance or may subject us to potential legal and reputational risk, which could have an adverse effect on our business, financial condition and results of operations. In addition, we continue our efforts to research, establish, accomplish and accurately report on the implementation of our emissions strategy, including our emissions reduction commitments, which may create additional operational risks and expenses and expose us to reputational, legal and other risks. While we create and publish voluntary disclosures regarding emissions matters from time to time, some of the statements in those voluntary disclosures may be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith. Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many emissions matters.

In the United States, the U.S. Environmental Protection Agency ("EPA") has taken steps to regulate GHG emissions as air pollutants under the U.S. Clean Air Act of 1970, as amended. The EPA's Greenhouse Gas Reporting Rule requires monitoring and reporting of GHG emissions from, among others, certain mobile and stationary GHG emission sources in the oil and natural gas industry. The EPA released a final rule expanding the scope of the reporting rule, effective January 1, 2025, which in turn may impact (and include) data from our equipment or operations to the extent it remains in effect under the new administration. In addition, the U.S. government has proposed rules in the past setting GHG emission standards for, or otherwise aimed at reducing GHG emissions from, the oil and natural gas and power industries. International developments focused on restricting GHG emissions include the United Nations Framework Convention on Climate Change, which includes implementation of the Paris Agreement and the Kyoto Protocol by the signatories; the Glasgow Climate Pact; the EU Emission Trading System; Article 8 of the EU Energy Efficiency Directive and the United Kingdom's Streamlined Energy and Carbon Reporting framework; and the EU's carbon border adjustment mechanism. Caps or fees on carbon emissions, including in the U.S. (such as methane fees imposed on emissions from certain oil and gas facilities under the Inflation Reduction Act), have been and may continue to be established and the cost of such caps or fees could disproportionately affect the fossil-fuel sectors. Newly enacted GHG emissions requirements have been subject to ongoing legal challenges in the U.S. which may delay the implementation or enforcement of such rules. Although a reduction in GHG reporting obligations in the U.S. may be possible at the federal level in the short-term with changing administrations, long-term regulatory trends suggest that federal regulation of GHG emissions is likely to increase over time. The implementation of these agreements and other existing or future regulatory mandates, may adversely affect the demand for our products and services, require us or our customers to reduce GHG emissions or impose taxes on us or our customers, all of which could have a material adverse effect on our results of operations. While the Supreme Court's decision in Loper Bright Enterprises v. Raimondo to overrule Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., which ended the concept of general deference to regulatory agency interpretations of laws, introduces new complexity for federal agencies and administration of climate change policy and regulatory programs, many of these initiatives may continue. Consequently, legislation and regulatory programs to address climate change or reduce emissions of GHGs could have an adverse effect on our business, financial condition and results of operations.

There can be no assurance that the steps we take to obtain, maintain, protect, defend and enforce our IP rights will be complete or adequate. Our applications for IP rights may not be granted entirely, as to key features, or at all. Our IP rights may fail to provide us with significant competitive advantages, particularly in jurisdictions where we have not invested in an intellectual property portfolio or that do not have, or do not enforce, strong IP rights. The weakening of protection for our trademarks, patents, trade secrets, copyrights and other IP rights could also adversely affect our business. We are a party to a number of licenses that give us access to IP rights that is necessary or useful to our business. Our success depends in part on the ability of our licensors to obtain, maintain, protect, defend and sufficiently enforce the licensed IP rights we commercialize. Without protection for the IP rights we own or license, other companies might be able to offer substantially identical products for sale, which could adversely affect our competitive business position and harm our business products. There can be no assurances that we will be able to obtain or renew from third parties any licenses to use IP rights we need in the future, and there is no assurance that such licenses can be obtained on reasonable terms. We would be adversely affected in the event that any such license agreement was terminated without the right for us to continue using the licensed IP rights.

There can be no assurance that the steps we take to obtain, maintain, protect, defend and enforce our intellectual property rights will be completely adequate. Our applications for intellectual property rights may not be granted entirely, as to key features, or at all. Our intellectual property rights may fail to provide us with significant competitive advantages, particularly in jurisdictions where we have not invested in an intellectual property portfolio or that do not have, or do not enforce, strong intellectual property rights. The weakening of protection of our trademarks, patents, trade secrets and other intellectual property rights could also adversely affect our business. We are a party to a number of licenses that give us rights to intellectual property that is necessary or useful to our business. Our success depends in part on the ability of our licensors to obtain, maintain, protect, defend and sufficiently enforce the licensed intellectual property rights we have commercialized. Without protection for the intellectual property rights we own or license, other companies might be able to offer substantially identical products for sale, which could adversely affect our competitive business position and harm our business products. Also, there can be no assurances that we will be able to obtain or renew from third parties the licenses to use intellectual property rights we need in the future, and there is no assurance that such licenses can be obtained on reasonable terms. We would be adversely affected in the event that any such license agreement was terminated without the right for us to continue using the licensed intellectual property.

There is ongoing focus by governments and our customers, investors and other stakeholders on climate change, sustainability, and energy transition matters. However, the pace and direction of the transition to a lower- carbon economy has become increasingly uncertain and variable across different regions and markets. Recent developments indicate a potential slowdown in energy transition efforts, with sustained or increased demand for traditional oil and gas in certain markets. These shifts may result from various factors, including changes in government policies and priorities, economic pressures, energy security concerns, and evolving consumer and industrial demand patterns. Such changes could include the delay, modification or reversal of climate change-related regulations and initiatives; slower-than-anticipated adoption of renewable energy technologies; continued or increased reliance on oil and natural gas as primary energy sources; and reduced near-term demand from consumers and industry for lower-emission products and services. Our future success depends on our ability to effectively adapt our business strategy to align with the actual pace and direction of energy transition as it evolves. We have invested in developing innovative technologies and solutions for clean energy applications, including geothermal, CCUS, hydrogen energy, and other integrated solutions. As the energy transition slows and demand shifts back toward traditional oil and gas applications, the market for our clean energy technologies and services may not develop as anticipated, which could adversely affect our revenue from these segments and the return on our investments in clean energy innovation. Additionally, if we have allocated resources away from traditional oil and gas applications in anticipation of a faster energy transition, we may not be positioned to capture opportunities in markets where demand for conventional energy services remains strong or increases. Furthermore, the uncertainty and variability in energy transition timelines across different regions may make it difficult to optimize our portfolio and resource allocation decisions. Our ability to achieve our strategic objectives and financial targets depends on accurately anticipating market demand across both traditional and emerging energy solutions, and a mismatch between our strategic positioning and actual market conditions could materially impact our financial performance and access to capital.

There is increased focus by governments and our customers, investors and other stakeholders on climate change, sustainability, and energy transition matters. Transitioning to a lower-carbon economy will likely require extensive policy, legal, technology, and market changes. These changes may result in the enactment of climate change-related regulations, judicial or administrative opinions, orders, policies and initiatives (at the government, regulator, corporate and/or investor community levels); technological advances with respect to the generation, transmission, storage and consumption of energy; increased availability of, and increased demand from consumers and industry for, energy sources other than oil and natural gas and development of, and increased demand from consumers and industry for, lower-emission products and services as well as more efficient products and services. Our future success may depend on our ability to effectively execute on our energy transition strategy and the pace at which the energy transition unfolds. Our strategy depends on our ability to develop additional innovative technologies and work with our customers and partners to advance new energy solutions such as geothermal, CCUS, hydrogen energy, and other integrated solutions. If the energy transition occurs faster than anticipated or faster than we can transition, or if we are unable to execute our energy transition strategy as planned, demand for our technologies and services or access to capital could be adversely affected. If the energy transition occurs slower than anticipated, we could be developing technologies and services that are not responsive to the commercial needs of our customers. In addition, negative attitudes toward or perceptions of our industry or fossil fuel products and their relationship to the environment have led governments, non-governmental organizations, and companies to implement initiatives to conserve energy and promote the use of alternative energy sources, which may reduce the demand for and production of oil and gas in areas of the world where our customers operate, and thus reduce future demand for our products and services. In addition, initiatives by investors and financial institutions to limit funding to companies in fossil fuel-related industries may adversely affect our liquidity or access to capital.