Q1 2022 Baker Hughes Co Earnings Call

April 20, 2022

Operator: Good day, ladies and gentlemen, and welcome to the Baker Hughes Company First Quarter 2022 Earnings Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touch-phone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Judd Bailey, Vice President of Investor Relations. Sir, you may begin.

Operator: -- conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone.

Speaker 1: At this time. All participants are in the listen. onlylimode later we will conduct a question-and-answer session and instructful by that time.

Operator: At this time, all the participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

Speaker 1: If anyone should require assing in the conference, Please press star. Then there are on your touchcoun Al form.

Speaker 2: If anyone should require assistance during the conference, please press star then zero on your telephone touchpad.

Operator: As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Mr. Jud Bailey, Vice President of Investor Relations. Sir, you may begin.

Operator: I would now like to introduce your host for today’s conference, Mr. Jud Bailey, Vice President of Investor Relations. Sir, you may begin.

Speaker 2: As a reminder, this conference call is being recorded. I would now like to introduce your host of today's conference, Mr. Jud Bailey, Vice President of Investor Relations. Sir, you may begin.

Speaker 1: Is a judge Bailey, Vice President of Investor Relations.

Speaker 1: Sorry may begin.

Judson Edwin Bailey: Thank you. Good morning, everyone and welcome to the Baker Hughes first quarter 2022 earnings conference call. Here with me are our Chairman and CEO, Lorenzo Simonelli; and our CFO, Brian Worrell. The earnings release we issued earlier today can be found on our website at bakerhughes.com.

Judd Bailey: Thank you. Good morning, everyone, and welcome to the Baker Hughes Q1 2022 Earnings Conference Call. Here with me are our Chairman and CEO, Lorenzo Simonelli, and our CFO, Brian Worrell. The earnings release we issued earlier today can be found at our website at bakerhughes.com. As a reminder, during the course of this conference call, we will provide forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and website for a discussion of the factors that could cause actual results to differ materially. As you know, reconciliations of operating income and other GAAP to non-GAAP measures can be found in our earnings release. With that, I will turn the call over to Lorenzo.

Jud Bailey: Thank you. Good morning, everyone, and welcome to the Baker Hughes Q1 2022 Earnings Conference Call. Here with me are our Chairman and CEO, Lorenzo Simonelli, and our CFO, Brian Worrell. The earnings release we issued earlier today can be found at our website at bakerhughes.com. As a reminder, during the course of this conference call, we will provide forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and website for a discussion of the factors that could cause actual results to differ materially. As you know, reconciliations of operating income and other GAAP to non-GAAP measures can be found in our earnings release. With that, I will turn the call over to Lorenzo.

Judson Edwin Bailey: Thank you. Good morning everyone and welcome to the Baker Hughes first quarter 2022 earnings conference call. Here with me is our Chairman and CEO, Lorenzo Simonelli, and our CFO, Brian Worrell. The earnings release we issued earlier today can be found at our website at bakerhughes.com.

Judson Edwin Bailey: As a reminder, during the course of this conference call, we will provide forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and website for a discussion of the factors that could cause actual results to differ materially. As you know, reconciliations of operating income and other GAAP to non-GAAP measures can be found in our earnings release. With that, I will turn the call over to Lorenzo.

Speaker 3: As a reminder, during the course of this conference call, we will provide forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and a website for a discussion of the factors that could cause actual results to differ materially. As you know, reconciliations of operating income and other GAAP and non-GAAP measures can be found in our earnings release. With that, I will turn the call over to Lorenzo.

Lorenzo Simonelli: Thank you, Judd. Good morning, everyone, and thanks for joining us. Our Q1 results reflect operating in a very volatile market environment during the first few months of 2022. On the positive side, TPS orders were up over 100% year-over-year, with TPS book-to-bill of 2.2 as the LNG order cycle continues to unfold. We also experienced some challenges in parts of our business due to continued pressures from broader global supply chain constraints, as well as some impact from the recent geopolitical events. As we look ahead to the rest of 2022, we see a favorable oil and gas price backdrop, as well as a dynamic operating environment with perhaps the most challenging supply chain and inflationary environment we have seen in several decades.

Lorenzo Simonelli: Thank you, Jud. Good morning, everyone and thanks for joining us. Our first quarter results reflect operating in a very volatile market environment during the first few months of 2022. On the positive side, TPS orders were up over 100% year-over-year, with TPS book-to-bill of 2.2 as the LNG order cycle continues to unfold. We also experienced some challenges in parts of our business due to continued pressures from broader global supply chain constraints as well as some impact from the recent geopolitical events.

Lorenzo Simonelli: Thank you, Jud. Good morning everyone and thanks for joining us. Our first quarter results reflect operating in a very volatile market environment during the first few months of 2022. On the positive side, TPS orders were up over 100% year-over-year, with TPS book-to-bill up 2.2. as the LNG order cycle continues to unfold. We also experienced some challenges in parts of our business due to continued pressures from broader global supply chain constraints, as well as some impact from the recent geopolitical events.

Lorenzo Simonelli: As we look ahead to the rest of 2022, we see a favorable oil and gas price backdrop as well as a dynamic operating environment with perhaps the most challenging supply chain and inflationary environment we have seen in several decades. The recent and unfortunate geopolitical events are amplifying several trends, including broad-based inflation and supply pressure for key materials, commodities and labor. These events are also driving changes on the economic front, where the world is transitioning from an era of strong economic growth to an environment that is more tenuous and likely to feature diverging economic conditions regionally.

Speaker 4: As we look ahead to the rest of 2022, we see a favorable oil and gas price backdrop, as well as a dynamic operating environment with perhaps the most challenging supply chain and inflationary environment we have seen in several decades. The recent and unfortunate geopolitical events are amplifying several trends including broad-based inflation and supply pressure for key materials, commodities, and labor. Dividends are also driving changes on the economic front where the world is transitioning from an era of strong economic growth to an environment that is more tenuous and likely to feature diverging economic conditions regionally.

Lorenzo Simonelli: The recent and unfortunate geopolitical events are amplifying several trends, including broad-based inflation and supply pressure for key materials, commodities, and labor. These events are also driving changes on the economic front, where the world is transitioning from an era of strong economic growth to an environment that is more tenuous and likely to feature diverging economic conditions regionally. Despite broader political uncertainty around the world, Baker Hughes is committed to helping deliver energy globally in a safe, clean, and reliable manner, while also maintaining our commitment to net-zero carbon emissions and leadership in the energy transition. To meet the world's energy needs in a responsible manner, we believe multiple years of spending growth will be required, as well as a significant increase in LNG infrastructure investment.

The recent and unfortunate geopolitical events are amplifying several trends, including broad-based inflation and supply pressure for key materials, commodities, and labor. These events are also driving changes on the economic front, where the world is transitioning from an era of strong economic growth to an environment that is more tenuous and likely to feature diverging economic conditions regionally. Despite broader political uncertainty around the world, Baker Hughes is committed to helping deliver energy globally in a safe, clean, and reliable manner, while also maintaining our commitment to net-zero carbon emissions and leadership in the energy transition. To meet the world's energy needs in a responsible manner, we believe multiple years of spending growth will be required, as well as a significant increase in LNG infrastructure investment.

Lorenzo Simonelli: Despite broader political uncertainty around the world, Baker Hughes is committed to helping deliver energy globally in a safe, clean and reliable manner, while also maintaining our commitment to net zero carbon emissions and leadership in the energy transition.

Speaker 4: Despite broader political uncertainty around the world, Baker Hughes is committed to helping deliver energy globally in a safe, clean, and reliable manner, while also maintaining our commitment to net-zero carbon emissions and leadership in the energy transition.

Lorenzo Simonelli: To meet the world's energy needs in a responsible manner, we believe multiple years of spending growth will be required, as well as significant increase in LNG infrastructure investment.

Speaker 4: To meet the world's energy needs in a responsible manner, we believe multiple years of spending growth will be required, as well as significant increase in LNG infrastructure investment.

Lorenzo Simonelli: While there is some near-term risk on the demand side, we expect global oil and gas supply to remain constrained in the coming years, which should support higher commodity prices and multiple years of spending growth from our customers. Recent geopolitical events have severely constrained what was already a tight global natural gas market and have refocused the world on the importance of energy security, diversity, and reliability. As the world reacts to the rapid changes in the global commodity market, governments are prioritizing natural gas and LNG as a key transition and destination fuel. We continue to see a focus on prioritizing LNG from stable, lower-cost markets and locations that can provide cleaner LNG. Given the current LNG price environment and the quickly changing dynamics, we believe that global LNG capacity will likely exceed 800 MTPA by the end of this decade to meet growing demand forecasts.

While there is some near-term risk on the demand side, we expect global oil and gas supply to remain constrained in the coming years, which should support higher commodity prices and multiple years of spending growth from our customers. Recent geopolitical events have severely constrained what was already a tight global natural gas market and have refocused the world on the importance of energy security, diversity, and reliability. As the world reacts to the rapid changes in the global commodity market, governments are prioritizing natural gas and LNG as a key transition and destination fuel.

Speaker 4: While there is some near-term risk on the demand side, we expect global oil and gas supply to remain constrained in the coming years, which should support higher commodity prices and multiple years of spending growth from our customers.

Speaker 4: Recent geopolitical events have severely constrained what was already a tight global natural gas market and have refocused the world on the importance of energy security, diversity, and reliability. As the world reacts to the rapid changes in the global commodity market, governments are prioritizing natural gas and LNG as the key transition and destination fuels.

We continue to see a focus on prioritizing LNG from stable, lower-cost markets and locations that can provide cleaner LNG. Given the current LNG price environment and the quickly changing dynamics, we believe that global LNG capacity will likely exceed 800 MTPA by the end of this decade to meet growing demand forecasts.

Lorenzo Simonelli: We continue to see a focus on prioritizing LNG from stable, lower cost markets and locations that can provide cleaner LNG.

Speaker 4: We continue to see a focus on prioritizing LNG from stable, lower cost markets and locations that can provide cleaner LNG.

Lorenzo Simonelli: Given the current LNG price environment and the quickly changing dynamics, we believe that global LNG capacity will likely exceed 800 MTPA by the end of this decade to meet growing demand forecast. This compares to the current global installed base of 460 MTPA and projects under construction totaling almost 150 MTPA. In order to be operational by 2030, this additional capacity will need to reach FID by around 2025.

Speaker 4: Given the current LNG price environment and the quickly changing dynamics, we believe that global LNG capacity will likely exceed 800 MTPA by the end of this decade to meet growing demand forecast. This compares to the current global installed base of 460 MTPA and projects under construction totaling almost 150 MTPA.

Lorenzo Simonelli: This compares to the current global installed base of 460 MTPA and projects under construction totaling almost 150 MTPA. In order to be operational by 2030, this additional capacity will need to reach FID by around 2025. Despite the volatile yet improving medium-term macro environment, Baker Hughes remains focused on executing our strategy, and we continue to drive further optimization across the two core business areas of OFSE and IET. Earlier this year, we created Climate Technology Solutions, or CTS, and Industrial Asset Management, or IAM. The creation of these two groups is critical to accelerating the speed of commercial development across our key growth areas of new energy frontiers and industrials. We continue to make steady progress in developing our Climate Technology Solutions capabilities with recent investments and partnerships in NET Power, HIF Global, and the acquisition of Mosaic Materials, which features a promising direct air capture technology.

This compares to the current global installed base of 460 MTPA and projects under construction totaling almost 150 MTPA. In order to be operational by 2030, this additional capacity will need to reach FID by around 2025. Despite the volatile yet improving medium-term macro environment, Baker Hughes remains focused on executing our strategy, and we continue to drive further optimization across the two core business areas of OFSE and IET. Earlier this year, we created Climate Technology Solutions, or CTS, and Industrial Asset Management, or IAM.

Speaker 6: In order to be operational by 2030, this additional capacity will need to reach FID by around two million and twenty-five.

Speaker 4: In order to be operational by 2030, this additional capacity will need to reach FID by around 2025.

Lorenzo Simonelli: Despite the volatile yet improving medium-term macro environment, Baker Hughes remains focused on executing our strategy and we continue to drive further optimization across the two core business areas of OFSE and IET.

Speaker 4: Despite the volatile yet improving medium-term macro-environment, Baker Hughes remains focused on executing our strategy and we continue to drive further optimization across the two core business areas of OSSE and IET.

Lorenzo Simonelli: Earlier this year, we created Climate Technology Solutions, or CTS, and Industrial Asset Management, or IAM. The creation of these two groups is critical to accelerating the speed of commercial development across our key growth areas of new energy frontiers and industrials.

The creation of these two groups is critical to accelerating the speed of commercial development across our key growth areas of new energy frontiers and industrials. We continue to make steady progress in developing our Climate Technology Solutions capabilities with recent investments and partnerships in NET Power, HIF Global, and the acquisition of Mosaic Materials, which features a promising direct air capture technology.

Speaker 4: Earlier this year we created climate technology solutions, or CTS, and industrial asset management, or IAM. The creation of these two groups is critical to accelerating the speed of commercial development across our key growth areas of new energy frontiers and industrials.

Lorenzo Simonelli: We continue to make steady progress in developing our Climate Technology Solutions capabilities with recent investments and partnerships in NET Power, HIF Global and the acquisition of Mosaic Materials, which features a promising direct air capture technology. Mosaic’s materials science and technical expertise including their unique metal organic framework technology provides Baker Hughes with the potential to efficiently capture low concentrations of CO2 across a number of applications.

Speaker 4: We continue to make steady progress in developing our climate technology solutions capabilities, with recent investments and partnerships in net power, HIF global, and the acquisition of Mosaic materials, which features a promising direct air capture technology. Mosaic's material science and technical expertise, including their unique metal-organic framework technology, provides Baker Hughes with the potential to efficiently capture low concentrations of CO2 across a number of applications.

Lorenzo Simonelli: Materials' material science and technical expertise, including their unique metal-organic framework technology, provides Baker Hughes with the potential to efficiently capture low concentrations of CO2 across a number of applications. NET Power is an emission-free gas-to-power technology where Baker Hughes will develop supercritical CO2 turboexpanders and other critical pumping and compression technology. We will also bring system integration and process knowledge experience to the partnership to help accelerate the market positioning and deployment of NET Power's emission-free and low-cost electric power. HIF Global develops projects in multiple geographies to produce e-fuels by blending green hydrogen and CO2. Baker Hughes is investing alongside EIG, Porsche, AME, and Gemstone and will provide compressors, turbines, pumps, valves, and other technology on future projects. We are also discussing how our recently acquired Mosaic Materials DAC technology could be incorporated into these future projects.

Materials' material science and technical expertise, including their unique metal-organic framework technology, provides Baker Hughes with the potential to efficiently capture low concentrations of CO2 across a number of applications. NET Power is an emission-free gas-to-power technology where Baker Hughes will develop supercritical CO2 turboexpanders and other critical pumping and compression technology. We will also bring system integration and process knowledge experience to the partnership to help accelerate the market positioning and deployment of NET Power's emission-free and low-cost electric power.

Lorenzo Simonelli: NET Power is an emission-free gas-to-power technology, where Baker Hughes will develop supercritical CO2 turboexpanders and other critical pumping and compression technology. We will also bring system integration and process knowledge experience to the partnership to help accelerate the market positioning and deployment of NET Power’s emission-free and low-cost electric power.

Speaker 4: Net power is an emission-free gas-to-power technology where Baker Hughes will develop supercritical CO2 [inaudible] and other critical pumping and compression technology.

Speaker 4: We will also bring system integration and process knowledge experience to a partnership to help accelerate the market positioning and deployment of net powers, emission-free and low-cost electric power.

Speaker 4: We will also bring system integration and process knowledge experience to the partnership to help accelerate the market positioning and deployment of net powers, emission-free, and low-cost electric power.

HIF Global develops projects in multiple geographies to produce e-fuels by blending green hydrogen and CO2. Baker Hughes is investing alongside EIG, Porsche, AME, and Gemstone and will provide compressors, turbines, pumps, valves, and other technology on future projects. We are also discussing how our recently acquired Mosaic Materials DAC technology could be incorporated into these future projects.

Lorenzo Simonelli: HIF Global develops projects in multiple geographies to produce e-fuels by blending green hydrogen and CO2. Baker Hughes is investing alongside EIG, Porsche, AME and Gemstone and will provide compressors, turbines, pumps, valves and other technology on future projects.

Speaker 4: HIF Global develops projects in multiple geographies to produce E fuels by blending green hydrogen and CO2. Baker Hughes is investing alongside EIG, Porsche, AME, and Gemstone and will provide compressors turbines, pumps, valves, and other technology on future projects. We are also discussing how our recently acquired Mosaic materials, VAC technology, could be incorporated into these future projects.

Speaker 4: Valves and other technology on future projects.

Lorenzo Simonelli: We are also discussing how our recently acquired Mosaic Materials’ DAC technology could be incorporated into these future projects.

Speaker 4: Valves and other technology on future projects. We are also discussing how our recently acquired mosaic materials, the AC technology, could be incorporated into these future projects.

Lorenzo Simonelli: Overall, we're excited about adding another carbon capture technology to our portfolio and the potential of these two partnerships to open new market opportunities in clean power and low-carbon fuels for Baker Hughes. In Industrial Asset Management, we signed an important agreement with Accenture, C3 AI, and Microsoft to collaborate on the build-out of the IAM solutions offering. The partnership will focus on creating and deploying Baker Hughes' IAM solutions that use digital technologies to help improve the safety, efficiency, and emissions profile of industrial machines, field equipment, and other physical assets. In addition to advancing our commercial efforts in CTS and IAM, we also remain focused on optimizing our broader organizational structure under the core business areas of OFSE and IET.

Overall, we're excited about adding another carbon capture technology to our portfolio and the potential of these two partnerships to open new market opportunities in clean power and low-carbon fuels for Baker Hughes. In Industrial Asset Management, we signed an important agreement with Accenture, C3 AI, and Microsoft to collaborate on the build-out of the IAM solutions offering. The partnership will focus on creating and deploying Baker Hughes' IAM solutions that use digital technologies to help improve the safety, efficiency, and emissions profile of industrial machines, field equipment, and other physical assets. In addition to advancing our commercial efforts in CTS and IAM, we also remain focused on optimizing our broader organizational structure under the core business areas of OFSE and IET.

Lorenzo Simonelli: Overall, we are excited about adding another carbon capture technology to our portfolio and the potential of these two partnerships to open new market opportunities in clean power and low carbon fuels for Baker Hughes.

Speaker 4: Overall, we're excited about adding another carbon capture technology to our portfolio and the potential of these two partnerships to open new market opportunities in clean power and low carbon fuel for Baker Hughes.

Lorenzo Simonelli: In Industrial Asset Management, we signed an important agreement with Accenture, C3.ai and Microsoft to collaborate on the build-out of the IAM solutions offering. The partnership will focus on creating and deploying Baker Hughes IAM solutions that use digital technologies to help improve the safety, efficiency and emissions profile of industrial machines, field equipment and other physical assets.

Speaker 4: In industrial asset management, we signed an important agreement with Excenture, C3I, and Microsoft to collaborate on the buildout of the IAM solutions offering. The partnership will focus on creating and deploying Baker Hughes' IAM solutions that use digital technologies to help improve the safety, efficiency, and emissions profile of industrial machines, field equipment, and other physical assets.

Lorenzo Simonelli: In addition to advancing our commercial efforts in CTS and IAM, we also remain focused on optimizing our broader organizational structure under the core business areas of OFSE and IET.

Speaker 4: In addition to advancing our commercial efforts in CTS and IAM, we also remain focused on optimizing our broader organizational structure under the core business areas of OSSE and IET.

Lorenzo Simonelli: At the beginning of April, we took some steps to strengthen and better position oilfield services to more closely align our products, services, and solutions to the life cycle of the well and ultimately to what our customers require. OFS will move from a product line-oriented structure to a solutions-focused business centered around well construction, completions, intervention, measurements, and production solutions. In addition to the organizational changes in OFS, we were pleased to announce an agreement to acquire Altus Intervention, a leading international provider of well intervention services and downhole technology. The acquisition complements OFS's existing portfolio by enhancing our life-of-well capabilities as operators look to improve efficiencies from mature fields. Maria Claudia and the OFS team are enhancing their operating model to become more competitive, improve the speed of decision-making, and capitalize on growth opportunities in the market.

At the beginning of April, we took some steps to strengthen and better position oilfield services to more closely align our products, services, and solutions to the life cycle of the well and ultimately to what our customers require. OFS will move from a product line-oriented structure to a solutions-focused business centered around well construction, completions, intervention, measurements, and production solutions. In addition to the organizational changes in OFS, we were pleased to announce an agreement to acquire Altus Intervention, a leading international provider of well intervention services and downhole technology.

Lorenzo Simonelli: At the beginning of April, we took some steps to strengthen and better position Oilfield Services to more closely align our products, services and solutions to the lifecycle of the well and ultimately to what our customers require.

Speaker 4: At the beginning of April, we took some steps to strengthen and better position oilfield services to more closely align our products, services, and solutions to the life cycle of the well and ultimately, to what our customers require.

Lorenzo Simonelli: OFS will move from a product line oriented structure to a solutions-focused business, centered around well construction, completions, intervention and measurements, and production solutions.

Speaker 4: OSS will move from a product line-oriented structure to a solutions-focused business centered around well construction, completions, intervention and measurements, and production solutions.

Speaker 4: In addition to the organizational changes in OSS, we were pleased to announce an agreement to acquire [inaudible] intervention, a leading international provider of well intervention services and downhold technology. The acquisition complements OSS's existing portfolio by enhancing our life of well capabilities as operators look to improve efficiencies from mature fields.

The acquisition complements OFS's existing portfolio by enhancing our life-of-well capabilities as operators look to improve efficiencies from mature fields. Maria Claudia and the OFS team are enhancing their operating model to become more competitive, improve the speed of decision-making, and capitalize on growth opportunities in the market.

Lorenzo Simonelli: Maria Claudia and the OFS team are enhancing their operating model to become more competitive, improve the speed of decision-making and capitalize on growth opportunities in the market.

Speaker 4: Maria Cloudy and the OSS team are enhancing their operating model to become more competitive, improve the speed of decision-making, and capitalize on growth opportunities in the market.

Lorenzo Simonelli: These organizational changes are important steps in the OFS's journey as customers are increasingly asking for integrated offerings and more solutions-oriented outcomes, as well as a continuation of the strong productivity improvements in OFS over the past few years. As we continue to evolve Baker Hughes across the two business areas of OFSE and IET, we expect more meaningful synergy opportunities between TPS and DS. We are also focused on driving better returns in our OFE business, as well as further synergies between OFS and OFE. Now I'll give you an update on each of our segments. In oilfield services, activity levels at the start of the year have continued to trend positively in both the international and North American markets. We also see improving visibility for stronger growth in several key areas over the rest of 2022.

These organizational changes are important steps in the OFS's journey as customers are increasingly asking for integrated offerings and more solutions-oriented outcomes, as well as a continuation of the strong productivity improvements in OFS over the past few years. As we continue to evolve Baker Hughes across the two business areas of OFSE and IET, we expect more meaningful synergy opportunities between TPS and DS. We are also focused on driving better returns in our OFE business, as well as further synergies between OFS and OFE. Now I'll give you an update on each of our segments. In oilfield services, activity levels at the start of the year have continued to trend positively in both the international and North American markets. We also see improving visibility for stronger growth in several key areas over the rest of 2022.

Lorenzo Simonelli: These organizational changes are important steps in the OFS’ journey as customers are increasingly asking for integrated offerings and more solutions-oriented outcomes as well as a continuation of the strong productivity improvements in OFS over the past few years.

Speaker 4: These organizational changes are important steps in the OSS's journey, as customers are increasingly asking for integrated offerings and more solutions-oriented outcomes, as well as a continuation of the strong productivity improvements in OSS over the past few years.

Lorenzo Simonelli: As we continue to evolve Baker Hughes across the two business areas of OFSE and IET, we expect more meaningful synergy opportunities between TPS and DS. We are also focused on driving better returns in our OFE business as well as further synergies between OFS and OFE.

Speaker 4: As we continue to evolve Baker Hughes across the two business areas of OSSE and IET, we expect more meaningful synergy opportunities between TPS and DX. We are also focused on driving better returns in our OSE business as well as further synergies between OSS and OSE.

Lorenzo Simonelli: Now I'll give you an update on each of our segments.

Lorenzo Simonelli: In Oilfield Services, activity levels at the start of the year have continued to trend positively in both the international and North American markets. We also see improving visibility for stronger growth in several key areas over the rest of 2022.

Speaker 4: Now, I'll give you an update on each of our segments. In oil field services, activity levels at the start of the year have continued to trend positively in both the international and North American markets. We also see improving visibility for stronger growth in several key areas over the rest of 2022.

Lorenzo Simonelli: In the international markets, underlying activity is improving broadly, with particular strength in Southeast Asia, Latin America, and the Middle East. The uncertainty in Russia is an offset. We expect growth in most international markets to continue, with the strongest increases likely to come from the Middle East over the second half of the year and into 2023. Producers in the region are in the early stages of investing in capacity expansion and should help drive a multi-year increase in activity across the region. In North America, drilling and completion activity continues to move solidly higher, with further increases expected over the course of the year. Although current oil and gas prices would normally suggest a stronger increase in activity, the combination of E&P capital discipline and industry shortages in labor and equipment is likely to keep short-term incremental increases more moderate in nature.

In the international markets, underlying activity is improving broadly, with particular strength in Southeast Asia, Latin America, and the Middle East. The uncertainty in Russia is an offset. We expect growth in most international markets to continue, with the strongest increases likely to come from the Middle East over the second half of the year and into 2023. Producers in the region are in the early stages of investing in capacity expansion and should help drive a multi-year increase in activity across the region. In North America, drilling and completion activity continues to move solidly higher, with further increases expected over the course of the year. Although current oil and gas prices would normally suggest a stronger increase in activity, the combination of E&P capital discipline and industry shortages in labor and equipment is likely to keep short-term incremental increases more moderate in nature.

Lorenzo Simonelli: In the international markets, underlying activity is improving broadly with particular strength in Southeast Asia, Latin America and the Middle East. The uncertainty in Russia is an offset.

Speaker 4: In the international markets, underlying activity is improving broadly, with particular strength in Southeast Asia, Latin America, and the Middle East.

Speaker 4: The uncertainty in Russia is an offset.

Lorenzo Simonelli: We expect growth in most international markets to continue with the strongest increases likely to come from the Middle East over the second half of the year and into 2023. Producers in the region are in the early stages of investing in capacity expansion and should help drive a multiyear increase in activity across the region.

Speaker 4: The uncertainty in Russia is an offset. We expect growth in most international markets to continue, with the strongest increases likely to come from the Middle East, over the second half of the year and into 2023. Producers in the region are in the early stages of investing in capacity expansion and should help drive a multi-year increase in activity across the region.

Speaker 4: We expect growth in most international markets to continue, with the strongest increases likely to come from the Middle East, over the second half of the year and into 2023. producers in the region are in the early stages of investing in capacity expansion and should help drive a multiyear increase in activity across the region.

Lorenzo Simonelli: In North America, drilling and completion activity continues to move solidly higher with further increases expected over the course of the year. Although current oil and gas prices would normally suggest a stronger increase in activity, the combination of E&P capital discipline and industry shortages in labor and equipment is likely to keep short-term incremental increases more moderate in nature.

Speaker 4: In North America, drilling and completion activity continues to move solidly higher, with further increases expected over the course of the year. Although current oil and gas prices would normally suggest a stronger increase in activity, the combination of EMP capital discipline and industry shortages in labor and equipment is likely to keep short-term incremental increases more moderate in nature.

Lorenzo Simonelli: While we are pleased with the growth in activity and the growing pipeline of work, in many regions, underlying operations continue to be impacted by supply chain and inflationary pressures and, most recently, disruption to our operations in Russia. Our offs team is working extremely hard to offset these headwinds with price increases, sourcing actions and a global team working to solve logistics constraints.

Lorenzo Simonelli: While we are pleased with the growth in activity and the growing pipeline of work in many regions, underlying operations continue to be impacted by supply chain and inflationary pressures, and most recently, disruption to our operations in Russia. Our OFS team is working extremely hard to offset these headwinds with price increases, sourcing actions, and a global team working to solve logistics constraints. The product line that continues to feel the most supply chain-related pressure is our production chemicals business, where we have taken actions to enhance our sourcing and manufacturing functions. In addition to recently enacting a supply surcharge and changing out some of the leadership in our chemicals business, we are also taking steps to source and produce chemicals closer to key demand hubs, with the opening of our production chemicals facility in Singapore later this year and the recently announced JV with Dassault in Saudi Arabia.

While we are pleased with the growth in activity and the growing pipeline of work in many regions, underlying operations continue to be impacted by supply chain and inflationary pressures, and most recently, disruption to our operations in Russia. Our OFS team is working extremely hard to offset these headwinds with price increases, sourcing actions, and a global team working to solve logistics constraints.

Speaker 4: While we are pleased with the growth in activity and the growing pipeline of work in many regions, underlying operations continue to be impacted by supply chain and inflationary pressures, and most recently, disruption to our operations in Russia. Our OSS team is working extremely hard to offset these headwinds with price increases, sourcing actions, and a global team working to solve logistics constraints.

The product line that continues to feel the most supply chain-related pressure is our production chemicals business, where we have taken actions to enhance our sourcing and manufacturing functions. In addition to recently enacting a supply surcharge and changing out some of the leadership in our chemicals business, we are also taking steps to source and produce chemicals closer to key demand hubs, with the opening of our production chemicals facility in Singapore later this year and the recently announced JV with Dassault in Saudi Arabia.

Speaker 4: Where we have taken actions to enhance our sourcing and manufacturing functions.

Speaker 4: The product line that continues to feel the most supply chain-related pressure is our production chemicals business, where we have taken actions to enhance our sourcing and manufacturing functions.

Lorenzo Simonelli: In addition to recently enacting a supply surcharge and changing out some of the leadership in our chemicals business, we are also taking steps to source and produce chemicals closer to key demand hubs with the opening of our production chemicals facility in Singapore later this year and the recently announced JV with Dussur in Saudi Arabia.

Speaker 4: Where we have taken actions to enhance our sourcing and manufacturing functions.

Speaker 4: In addition to recently enacting a supply surcharge and changing out some of the leadership in our chemicals business, we are also taking steps to source and produce chemicals closer to key demand hubs, with the opening of our production chemicals facility in Singapore later this year and the recently announced JV with [inaudible] in Saudi Arabia.

Lorenzo Simonelli: As we look over the balance of the year, we remain committed to achieving a 20% EBITDA margin by Q4. Moving to TPS, Q1 represented a continuation of the successes we achieved in 2021. TPS orders totaled $3 billion for the second consecutive quarter, driven again by strong orders in LNG. We believe that we are at the beginning of another constructive LNG cycle, which is being expedited by the current geopolitical situation, particularly for US LNG projects. Our positive long-term view is also supported by the recent improvements in policy sentiment in certain parts of the world towards natural gas' role within the energy transition. The recent EU taxonomy changes to now include natural gas as a transition fuel is an example of this, and the added need to diversify and provide energy security will likely intensify policy efforts.

As we look over the balance of the year, we remain committed to achieving a 20% EBITDA margin by Q4. Moving to TPS, Q1 represented a continuation of the successes we achieved in 2021. TPS orders totaled $3 billion for the second consecutive quarter, driven again by strong orders in LNG. We believe that we are at the beginning of another constructive LNG cycle, which is being expedited by the current geopolitical situation, particularly for US LNG projects. Our positive long-term view is also supported by the recent improvements in policy sentiment in certain parts of the world towards natural gas' role within the energy transition. The recent EU taxonomy changes to now include natural gas as a transition fuel is an example of this, and the added need to diversify and provide energy security will likely intensify policy efforts.

Lorenzo Simonelli: As we look over the balance of the year, we remain committed to achieving a 20% EBITDA margin by the fourth quarter.

Speaker 4: As we look over the balance of the year, we remain committed to achieving a 20% EBITDA margin by the fourth quarter.

Lorenzo Simonelli: Moving to TPS, the first quarter represented a continuation of the successes we achieved in 2021. TPS orders totaled $3 billion for the second consecutive quarter, driven again by strong orders in LNG.

Speaker 4: Moving to TPS, the first quarter represented a continuation of the successes we achieved in 2021. TPS orders totaled $3 billion for the second consecutive quarter, driven again by strong orders in LNG.

Lorenzo Simonelli: We believe that we are at the beginning of another constructive LNG cycle, which is being expedited by the current geopolitical situation, particularly for US LNG projects.

Speaker 4: We believe that we are at the beginning of another constructive LNG cycle, which is being expedited by the current geopolitical situation, particularly for US LNG projects.

Lorenzo Simonelli: Our positive long-term view is also supported by the recent improvements in policy sentiment in certain parts of the world towards natural gas role within the energy transition.

Speaker 4: Our positive long-term view is also supported by the recent improvements in policy sentiment in certain parts of the world towards natural gas' role within the energy transition.

Lorenzo Simonelli: The recent EU taxonomy changes to now include natural gas as a transition fuel as an example of this, and the added need to diversify and provide energy security will likely intensify policy efforts.

Speaker 4: The recent EU taxonomy changes to now include natural gas as a transition fuel is an example of this, and the added need to diversify and provide energy security will likely intensify policy efforts.

Lorenzo Simonelli: As these market dynamics play out, a number of projects should accelerate, and we now believe that 100 to 150 MTPA of LNG FIDs will be authorized over the next 2 years, with additional FIDs becoming more likely in 2024 and 2025. Given the strong TPS orders performance in Q1, as well as the acceleration in timing for several LNG projects, we now expect TPS orders to increase in 2022 versus 2021. During Q1, we were pleased to be awarded a major order to provide an LNG system for the first phase of Venture Global's Commonwealth LNG project. We will be providing 24 modularized compression trains for the first phase of the project, and this award is part of a 70 MTPA Master Equipment Supply Agreement.

As these market dynamics play out, a number of projects should accelerate, and we now believe that 100 to 150 MTPA of LNG FIDs will be authorized over the next 2 years, with additional FIDs becoming more likely in 2024 and 2025. Given the strong TPS orders performance in Q1, as well as the acceleration in timing for several LNG projects, we now expect TPS orders to increase in 2022 versus 2021. During Q1, we were pleased to be awarded a major order to provide an LNG system for the first phase of Venture Global's Commonwealth LNG project. We will be providing 24 modularized compression trains for the first phase of the project, and this award is part of a 70 MTPA Master Equipment Supply Agreement.

Lorenzo Simonelli: As these market dynamics play out, a number of projects should accelerate and we now believe that 100 to 150 MTBA of LNG FIDs will be authorized over the next 2 years, with additional FIDs becoming more likely in 2024 and 2025.

Speaker 4: As these market dynamics play out, a number of projects should accelerate and we now believe that 100 to 150 MTPA of LNG FIDs will be authorized over the next two years, with additional FIDs becoming more likely in 2024 and 2025.

Lorenzo Simonelli: Given the strong TPS orders performance in the first quarter as well as the acceleration in timing for several LNG projects, we now expect TPS orders to increase in 2022 versus 2021.

Speaker 4: Given the strong TPS orders performance in the first quarter, as well as the acceleration in timing for several LNG projects, we now expect TPS orders to increase in 2022 versus 2021.

Lorenzo Simonelli: During the first quarter, we were pleased to be awarded a major order to provide an LNG system for the first phase of Venture Global’s Plaquemines LNG project.

Speaker 4: During the first quarter, we were pleased to be awarded a major order to provide an LNG system for the first phase of Venture Global's [inaudible] LNG project.

Lorenzo Simonelli: We will be providing 24 modularized compression trains for the first phase of the project and this award is part of a 70 MTPA master equipment supply agreement.

Speaker 4: We will be providing 24 modularized compression trains for the first phase of the project, and this award is part of our 70 MTPA master equipment supply agreement.

Lorenzo Simonelli: The highly efficient liquefaction train system is modularized, helping to lower construction and operational costs with a plug-and-play approach that enables faster installation and first cargo. This important order builds on an award in Q4 of 2021 for power generation and the electrical distribution equipment for the comprehensive power island system for the Commonwealth's project. The Commonwealth's order follows a similar contract for VG's Calcasieu Pass LNG terminal in 2019. In 2021, Baker Hughes successfully completed delivery of the ninth and final block for Calcasieu Pass. All shipments were finalized ahead of schedule, an excellent achievement by our team. Calcasieu Pass holds the global record for the fastest construction of a large-scale greenfield LNG project, moving from FID to first LNG in 29 months.

The highly efficient liquefaction train system is modularized, helping to lower construction and operational costs with a plug-and-play approach that enables faster installation and first cargo. This important order builds on an award in Q4 of 2021 for power generation and the electrical distribution equipment for the comprehensive power island system for the Commonwealth's project. The Commonwealth's order follows a similar contract for VG's Calcasieu Pass LNG terminal in 2019. In 2021, Baker Hughes successfully completed delivery of the ninth and final block for Calcasieu Pass. All shipments were finalized ahead of schedule, an excellent achievement by our team. Calcasieu Pass holds the global record for the fastest construction of a large-scale greenfield LNG project, moving from FID to first LNG in 29 months.

Speaker 4: The highly efficient liquefaction train system is modularized, helping to lower construction and operational costs with a plug-and-play approach that enables faster installation and first cargo.

Lorenzo Simonelli: This important order builds on an award in the fourth quarter of 2021 for power generation and the electrical distribution equipment for the comprehensive power island system for the Plaquemines project.

Speaker 4: This important order builds on an award in the fourth quarter of 2021 for power generation and the electrical distribution equipment for the comprehensive power island system for the plaquinon project.

Lorenzo Simonelli: The Plaquemines order follows a similar contract for VG’s Calcasieu Pass LNG terminal in 2019. In 2021, Baker Hughes successfully completed delivery of the ninth and final block for Calcasieu Pass. All shipments were finalized ahead of schedule and excellent achievement by our team. Calcasieu Pass holds the global record for the fastest construction of a large scale Greenfield LNG project moving from FID to first LNG in 29 months.

Speaker 4: The plaquinon's order follows a similar contract for VG's [inaudible] LNG terminal in 2019. In 2021, Baker Hughes successfully completed delivery of the ninth and final block for [inaudible]. All shipments were finalized ahead of schedule- an excellent achievement by our team. [inaudible] holds the global record for the fastest construction of a large-scale green field LNG project, moving from FID to first LNG in 29 months.

Lorenzo Simonelli: Outside of LNG, we booked an award for NovaLT16 turbines, which will run on 100% hydrogen, for Air Products' new net-zero blue hydrogen energy complex in Edmonton, Alberta. Our collaboration with Air Products will be critical for a net-zero future, and this order follows the award we received for advanced compression technology for the NEOM carbon-free green hydrogen project. We were also pleased to be awarded a contract by TERNA to supply gas turbines and compressors that can run on a blend of natural gas and hydrogen for a new compression station for the Greek natural gas transmission system. Baker Hughes will provide three compression trains, deploying our NovaLT12 hydrogen-ready gas turbines and PCL compressors, with the capability to transport up to 10% hydrogen for this project.

Outside of LNG, we booked an award for NovaLT16 turbines, which will run on 100% hydrogen, for Air Products' new net-zero blue hydrogen energy complex in Edmonton, Alberta. Our collaboration with Air Products will be critical for a net-zero future, and this order follows the award we received for advanced compression technology for the NEOM carbon-free green hydrogen project. We were also pleased to be awarded a contract by TERNA to supply gas turbines and compressors that can run on a blend of natural gas and hydrogen for a new compression station for the Greek natural gas transmission system. Baker Hughes will provide three compression trains, deploying our NovaLT12 hydrogen-ready gas turbines and PCL compressors, with the capability to transport up to 10% hydrogen for this project.

Lorenzo Simonelli: Outside of LNG, we booked an award for NovaLT16 turbines, which will run on 100% hydrogen for Air Products new net zero blue hydrogen energy complex in Edmonton, Alberta.

Speaker 4: Outside of LNG, we booked an award for Nova LT 16 turbines, which will run on 100% hydrogen. For Air products, new net-zero blue hydrogen energy complex in Edmonton, Alberta. Our collaboration with Air products will be critical for a net-zero future and this order follows the award we received for advanced compression technology for the neon-carbon-free green hydrogen project.

Lorenzo Simonelli: Our collaboration with Air Products will be critical for a net zero future and this order follows the award we received for advanced compression technology for the NEOM carbon-free green hydrogen project.

Lorenzo Simonelli: We were also pleased to be awarded a contract by TERNA to supply gas turbines and compressors that can run on a blend of natural gas and hydrogen for a new compression station for the Greek natural gas transmission system.

Speaker 4: We were also pleased to be awarded a contract by [inaudible] to supply gas turbines and compressors that can run on a blend of natural gas and hydrogen for a new compression station for the Greek natural gas transmission system.

Lorenzo Simonelli: Baker Hughes will provide free compression trains deploying our NovaLT12 hydrogen-ready gas turbines and PCL compressors with the capability to transport up to 10% hydrogen for this project.

Speaker 4: Baker Hughes will provide free compression trains, deploying our Nova LT 12 hydrogen-ready gas turbines and PCL compressors with the capability to transport up to 10% hydrogen for this project.

Lorenzo Simonelli: The project directly supports the EU's hydrogen strategy goals to accelerate the development of clean hydrogen and ensure its role as a cornerstone of a climate-neutral energy system by 2050. These latest hydrogen orders build on Baker Hughes' extensive experience in developing and supplying turbomachinery equipment to compress, transport, and utilize hydrogen. Next, in oilfield equipment, we are encouraged to see improving demand trends across the different business areas. Although recent world events impacted Q1 results, we remain disappointed with the overall level of profitability. At a macro level, trends in the subsea and offshore markets continue to improve. In the subsea, tree, and flexible pipe market, we expect a solid increase in industry awards this year as a firm commodity price outlook supports a growing pipeline of deepwater opportunities in core markets.

The project directly supports the EU's hydrogen strategy goals to accelerate the development of clean hydrogen and ensure its role as a cornerstone of a climate-neutral energy system by 2050. These latest hydrogen orders build on Baker Hughes' extensive experience in developing and supplying turbomachinery equipment to compress, transport, and utilize hydrogen. Next, in oilfield equipment, we are encouraged to see improving demand trends across the different business areas. Although recent world events impacted Q1 results, we remain disappointed with the overall level of profitability. At a macro level, trends in the subsea and offshore markets continue to improve. In the subsea, tree, and flexible pipe market, we expect a solid increase in industry awards this year as a firm commodity price outlook supports a growing pipeline of deepwater opportunities in core markets.

Lorenzo Simonelli: The project directly supports the EU’s hydrogen strategy goals to accelerate the development of clean hydrogen and show its role as a cornerstone of a climate-neutral energy system by 2050.

Speaker 4: The project directly supports the EU's hydrogen strategy goals to accelerate the development of clean hydrogen and show its role as a cornerstone of a climate-neutral energy system by 2050.

Lorenzo Simonelli: These latest hydrogen orders build on Baker Hughes’s extensive experience in developing and supplying turbomachinery equipment to compress, transport and utilize hydrogen.

Speaker 4: These latest hydrogen orders build on Baker Hughes's extensive experience in developing and supplying turbomachinery equipment to compress transport and utilize hydrogen.

Lorenzo Simonelli: Next, on Oilfield Equipment, we are encouraged to see improving demand trends across the different business areas. Although recent world events impacted first quarter results, we remain disappointed with the overall level of profitability.

Speaker 4: Next in our oil field equipment, we are encouraged to see improving demand trends across the different business areas. Although recent world events impacted first quarter results, we remain disappointed with the overall level of profitability.

Lorenzo Simonelli: At a macro level, trends in the subsea and offshore markets continue to improve. In the subsea tree and flexible pipe market, we expect a solid increase in industry awards this year as a firm commodity price outlook supports a growing pipeline of deepwater opportunities in core markets.

Speaker 4: At a macro level, trends in the subsea and offshore markets continue to improve. In the subsea tree and flexible pipe market, we expect a solid increase in industry awards this year as a firm commodity price outlook supports a growing pipeline of deep water opportunities in core markets.

Lorenzo Simonelli: In our international wellhead business, we also see a positive order outlook across multiple regions, and particularly in the Middle East. In Q1, we were awarded a contract in Asia to provide subsea wellheads and subsea production systems, plus related services, including 12 subsea trees for a deepwater gas field. We also achieved our first award in Ivory Coast, where we will supply subsea trees, flexible flow lines, and risers to develop the Valiant Deepwater oilfield. In Latin America, we were pleased to build on our flexible pipe business success, securing awards for flexible pipe systems and services that will be deployed across a number of key post-salt revitalization programs, enabling increased oil recovery and extending the life of multiple subsea developments. Finally, in digital solutions, order activity remains solid, with growth across our industrial end markets, as well as improvement in the oil and gas markets.

In our international wellhead business, we also see a positive order outlook across multiple regions, and particularly in the Middle East. In Q1, we were awarded a contract in Asia to provide subsea wellheads and subsea production systems, plus related services, including 12 subsea trees for a deepwater gas field. We also achieved our first award in Ivory Coast, where we will supply subsea trees, flexible flow lines, and risers to develop the Valiant Deepwater oilfield. In Latin America, we were pleased to build on our flexible pipe business success, securing awards for flexible pipe systems and services that will be deployed across a number of key post-salt revitalization programs, enabling increased oil recovery and extending the life of multiple subsea developments. Finally, in digital solutions, order activity remains solid, with growth across our industrial end markets, as well as improvement in the oil and gas markets.

Lorenzo Simonelli: In our international wellhead business, we also see a positive order outlook across multiple regions and particularly in the Middle East.

Speaker 4: In our international wellhead business, we also see a positive order outlook across multiple regions, and particularly in the Middle East.

Lorenzo Simonelli: In the first quarter, we were awarded a contract in Asia to provide subsea wellheads and subsea production systems plus related services, including 12 subsea trees for a deepwater gas field. We also achieved our first award in Ivory Coast, where we will supply subsea trees, flexible flow lines and rises to develop the Baleine deepwater oil field.

Speaker 4: In the first quarter, we awarded a contract in Asia to provide subsea wellheads and subsea production systems plus related services, including 12 subsea trees for a deep water gas field.

Lorenzo Simonelli: We also achieved our first award in Ivory Coast, where we will supply subsea trees, flexible flow lines and rises to develop the Baleine deepwater oil field.

Speaker 4: We also achieved our first award in Ivory Coast, where we will supply subsea trees, flexible flow lines, and rises to develop the [inaudible] deepwater oilfield.

Lorenzo Simonelli: In Latin America, we were pleased to build on our flexible pipe business success, securing awards for flexible pipe systems in services that will be deployed across a number of key post-salt revitalization programs, enabling increased oil recovery and extending the life of multiple subsea developments.

Speaker 4: In Latin America, we were pleased to build on our flexible pipe business success, securing awards for flexible pipe systems and services that will be deployed across a number of key postal revitalization programs, enabling increased oil recovery and extending the life of multiple subsea developments.

Lorenzo Simonelli: Finally, in Digital Solutions, order activity remains solid with growth across our industrial end markets as well as improvement in the oil and gas markets.

Speaker 4: Finally, in digital solutions, order activity remains solid, with growth across our industrial end markets, as well as improvement in the oil and gas markets.

Lorenzo Simonelli: DS continues to be affected by supply chain challenges and electronic shortages as well as continued inflationary pressures. The team is working tirelessly to manage the situation and navigate the evolving supply chain issues that have been exasperated by recent events.

Lorenzo Simonelli: DS continues to be affected by supply chain challenges and electronic shortages, as well as continued inflationary pressures. The team is working tirelessly to manage the situation and navigate the evolving supply chain issues that have been exacerbated by recent events. In Q1, we made a number of changes in the DS business as we looked to improve the overall performance. We unified our unique sensor business units, Panametrics, Reuter-Stokes, and Druck, under one product line, Precision Sensors and Instrumentation, or PSI. As a combined business, PSI will better support potential investment opportunities crucial for the future development and help optimize the unique technology and commercial requirements of each brand. Unifying the businesses will also help drive better cost and operational performance.

DS continues to be affected by supply chain challenges and electronic shortages, as well as continued inflationary pressures. The team is working tirelessly to manage the situation and navigate the evolving supply chain issues that have been exacerbated by recent events. In Q1, we made a number of changes in the DS business as we looked to improve the overall performance. We unified our unique sensor business units, Panametrics, Reuter-Stokes, and Druck, under one product line, Precision Sensors and Instrumentation, or PSI. As a combined business, PSI will better support potential investment opportunities crucial for the future development and help optimize the unique technology and commercial requirements of each brand. Unifying the businesses will also help drive better cost and operational performance.

Speaker 4: DS continues to be affected by supply chain challenges and electronic shortages, as well as continued inflationary pressures. The team is working tirelessly to manage the situation and navigate the evolving supply chain issues that have been exasperated by recent events.

Lorenzo Simonelli: In the first quarter, we made a number of changes in the DS business as we look to improve the overall performance.

Speaker 4: In the first quarter, we made a number of changes in the DS business as we look to improve the overall performance.

Lorenzo Simonelli: We unified our unique sensor business units, Panametrics, Reuter Stokes and Druck under one product line, Precision Sensors and Instrumentation, or PSI. As a combined business, PSI will better support potential investment opportunities crucial for the future development and help optimize the unique technology and commercial requirements of each brand. Unifying the businesses will also help drive better cost and operational performance.

Speaker 4: We unified our unique sensor business units- Panametrics Router Stokes and [inaudible]- on the one product line: Precision Sensors and Instrumentation, or PSI. As a combined business, PSI will better support potential investment opportunities crucial for the future development and help optimize the unique technology and commercial requirements of each brand. Unifying the businesses will also help drive better cost and operational performance.

Lorenzo Simonelli: While we recognize that there is still more work to do, we also continue to make key personnel and operational changes across DS to drive performance, profitability, and return improvements, and to ensure that we have the right team in place to take this business forward. During the quarter, Bentley Nevada secured an important contract with a refinery in Brazil. Our Arms Reliability 1PM solution will support the customer's operations by providing visibility on over 10,000 assets. We will be providing optimal digital strategies to support asset integrity and availability, which will lead to maintenance cost optimization and effectively enable risk management while delivering enhanced performance. Despite some of the challenges this quarter, 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.

While we recognize that there is still more work to do, we also continue to make key personnel and operational changes across DS to drive performance, profitability, and return improvements, and to ensure that we have the right team in place to take this business forward. During the quarter, Bentley Nevada secured an important contract with a refinery in Brazil. Our Arms Reliability 1PM solution will support the customer's operations by providing visibility on over 10,000 assets. We will be providing optimal digital strategies to support asset integrity and availability, which will lead to maintenance cost optimization and effectively enable risk management while delivering enhanced performance. Despite some of the challenges this quarter, 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.

Speaker 4: While we recognize that there is still more work to do, we also continue to make key personnel and operational changes across DS to drive performance, profitability, and return improvements and to ensure that we have the right team in place to take this business forward.

Lorenzo Simonelli: During the quarter, Bentley Nevada secured an important contract with a refiner in Brazil. Our ARMS reliability OnePM solution will support the customers’ operations by providing visibility on over 10,000 assets.

Speaker 4: During the quarter, Bentley Nevada secured an important contract with a refiner in Brazil. Our arms reliability one PM solution will support the customers' operations by providing visibility on over 10,000 assets.

Speaker 4: We will be providing optimal digital strategies to support asset integrity and availability, which will lead to maintenance cost optimization and effectively enable risk management, while delivering enhanced performance.

Lorenzo Simonelli: Despite some of the challenges this quarter, 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.

Speaker 4: Despite some of the challenges this quarter, 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.

Lorenzo Simonelli: We believe that we are well positioned to benefit from an extended cyclical recovery in OFSE and longer-term structural growth trends in LNG, new energy, and industrial asset management. Importantly, we expect to generate strong free cash flow as the cycle plays out and remain committed to returning the majority of it back to shareholders. With that, I'll turn the call over to Brian. Thanks, Lorenzo. I'll begin with the total company results and then move into the segment details. Orders for the quarter were $6.8 billion, up 3% sequentially, driven by OFE and TPS, partially offset by a decrease in digital solutions and OFS. Year-over-year, orders were up 51%, driven by increases across all four segments. We are particularly pleased with the orders' performance in the quarter, especially in TPS, following a strong orders performance in the fourth quarter. Remaining performance obligation was $25.8 billion, up 10% sequentially.

We believe that we are well positioned to benefit from an extended cyclical recovery in OFSE and longer-term structural growth trends in LNG, new energy, and industrial asset management. Importantly, we expect to generate strong free cash flow as the cycle plays out and remain committed to returning the majority of it back to shareholders. With that, I'll turn the call over to Brian.

Lorenzo Simonelli: We believe that we are well-positioned to benefit from an extended cyclical recovery in OFSC and longer term structural growth trends in LNG, new energy and industrial asset management.

Speaker 4: We believe that we are well positioned to benefit from an extended cyclical recovery in OSSE and longer-term structural growth trends in LNG, new energy, and industrial asset management.

Lorenzo Simonelli: Importantly, we expect to generate strong free cash flow as the cycle plays out and remain committed to returning the majority of it back to shareholders.

Speaker 4: Importantly, we expect to generate strong free cash flow as the cycle plays out and remain committed to returning the majority of it back to shareholders. With that, I'll turn the call over to Brian.

Lorenzo Simonelli: With that, I'll turn the call over to Brian

Brian Worrell: Thanks, Lorenzo. I'll begin with the total company results and then move into the segment details. Orders for the quarter were $6.8 billion, up 3% sequentially, driven by OFE and TPS, partially offset by a decrease in digital solutions and OFS. Year-over-year, orders were up 51%, driven by increases across all four segments. We are particularly pleased with the orders' performance in the quarter, especially in TPS, following a strong orders performance in the fourth quarter. Remaining performance obligation was $25.8 billion, up 10% sequentially.

Brian Worrell: Thanks, Lorenzo. I will begin with the total company results and then move into the segment details.

Brian Worrell: Orders for the quarter were $6.8 billion, up 3% sequentially driven by OFE and TPS partially offset by a decrease in Digital Solutions and OFS. Year-over-year, orders were up 51%, driven by increases across all four segments.

Brian Worrell: Thanks, Lorenzo. I'll begin with the total company results and then move into the segment details.

Speaker 5: Orders for the quarter were $6.8 billion, up 3% sequentially driven by OSE and TPS, partially offset by a decrease in digital solutions and OSS. Year-over-year orders were up 51%, driven by increases across all four segments.

Brian Worrell: We are particularly pleased with the orders performance in the quarter, especially in TPS, following a strong orders performance in the fourth quarter. Remaining performance obligation was $25.8 billion, up 10% sequentially.

Speaker 5: We are particularly pleased with the orders' performance in the quarter, especially in TPS, following a strong orders' performance in the fourth quarter. Remaining performance obligation was $25.8 billion, up 10% sequentially.

Lorenzo Simonelli: Equipment RPO ended at $9.9 billion, up 20% sequentially, and services RPO ended at $15.9 billion, up 4% sequentially. Our total company book-to-bill ratio in the quarter was 1.4, and our equipment book-to-bill ratio in the quarter was 1.9. Revenue for the quarter was $4.8 billion, down 12% sequentially, with declines in all four segments. Year-over-year, revenue was up 1%, driven by increases in OFS and digital solutions, partially offset by decreases in OFE and TPS. Operating income for the quarter was $279 million. Adjusted operating income was $348 million, which excludes $70 million of restructuring, separation, and other charges. Adjusted operating income was down 39% sequentially and up 29% year-over-year. Our adjusted operating income rate for the quarter was 7.2%, down 320 basis points sequentially. Year-over-year, our adjusted operating income rate was up 160 basis points.

Equipment RPO ended at $9.9 billion, up 20% sequentially, and services RPO ended at $15.9 billion, up 4% sequentially. Our total company book-to-bill ratio in the quarter was 1.4, and our equipment book-to-bill ratio in the quarter was 1.9. Revenue for the quarter was $4.8 billion, down 12% sequentially, with declines in all four segments. Year-over-year, revenue was up 1%, driven by increases in OFS and digital solutions, partially offset by decreases in OFE and TPS. Operating income for the quarter was $279 million. Adjusted operating income was $348 million, which excludes $70 million of restructuring, separation, and other charges. Adjusted operating income was down 39% sequentially and up 29% year-over-year. Our adjusted operating income rate for the quarter was 7.2%, down 320 basis points sequentially. Year-over-year, our adjusted operating income rate was up 160 basis points.

Brian Worrell: Equipment RPO ended at $9.9 billion, up 20% sequentially. And services RPO ended at $15.9 billion, up 4% sequentially.

Speaker 5: Equipment RPO ended at $9.9 billion, up 20% sequentially. And services RPO ended at $15.9 billion, up 4% sequentially.

Brian Worrell: Our total company book-to-bill ratio in the quarter was 1.4 and our equipment book-to-bill ratio in the quarter was 1.9.

Speaker 5: Our total company book-to-bill ratio in the quarter was 1.4 and our equipment book-to-bill ratio in the quarter was 1.9.

Brian Worrell: Revenue for the quarter was $4.8 billion, down 12% sequentially with declines in all four segments. Year-over-year, revenue was up 1%, driven by increases in OFS and Digital Solutions partially offset by decreases in OFE and TPS.

Speaker 5: Revenue for the quarter was $4.8 billion, down 12% sequentially, with declines in all four segments. Year-over-year revenue was up 1%, driven by increases in OSS and digital solutions, partially offset by decreases in OSE and TPS.

Speaker 11: Year-over-year revenue was up 1%, driven by increases in Os and digital solutions, partially offset by decreases in OFE and TPS.

Brian Worrell: Operating income for the quarter was $279 million. Adjusted operating income was $348 million, which excludes $70 million of restructuring, separation and other charges.

Speaker 5: Operating income for the quarter was $279 million. Adjusted operating income was $348 million, which excludes $70 million of restructuring, separation, and other charges.

Brian Worrell: Adjusted operating income was down 39% sequentially and up 29% year-over-year. Our adjusted operating income rate for the quarter was 7.2%, down 320 basis points sequentially. Year-over-year, our adjusted operating income rate was up 160 basis points.

Speaker 5: Adjusted operating income was down 39% sequentially and up 29% year-over-year. Our adjusted operating income rate for the quarter was 7.2%, down 320 basis points sequentially.

Speaker 11: Year-over-year, our adjusted operating income rate was up 160 basis points.

Brian Worrell: Adjusted EBITDA in the quarter was $625 million, down 26% sequentially and up 11% year-over-year. Adjusted EBITDA rate was 12.9%, up 120 basis points year-over-year.

Lorenzo Simonelli: Adjusted EBITDA in the quarter was $625 million, down 26% sequentially and up 11% year-over-year. Adjusted EBITDA rate was 12.9%, up 120 basis points year-over-year. As I will expand in a moment, our adjusted operating income and adjusted EBITDA margin rates were impacted by geopolitical events, as well as broader global supply chain challenges. Corporate costs were $105 million in the quarter. For the second quarter, we expect corporate costs to be roughly flat compared to the first quarter. Depreciation and amortization expense was $277 million in the quarter. For the second quarter, we expect DNA to be slightly up compared to first-quarter levels. Net interest expense was $64 million. Income tax expense in the quarter was $107 million. GAAP-diluted earnings per share was $0.08.

Adjusted EBITDA in the quarter was $625 million, down 26% sequentially and up 11% year-over-year. Adjusted EBITDA rate was 12.9%, up 120 basis points year-over-year. As I will expand in a moment, our adjusted operating income and adjusted EBITDA margin rates were impacted by geopolitical events, as well as broader global supply chain challenges. Corporate costs were $105 million in the quarter. For the second quarter, we expect corporate costs to be roughly flat compared to the first quarter. Depreciation and amortization expense was $277 million in the quarter. For the second quarter, we expect DNA to be slightly up compared to first-quarter levels. Net interest expense was $64 million. Income tax expense in the quarter was $107 million. GAAP-diluted earnings per share was $0.08.

Speaker 5: Year-over-year, our adjusted operating income rate was up 160 basis points.

Speaker 5: Adjusted EBITDA in the quarter was $625 million, down 26% sequentially and up 11% year-over-year. Adjusted EBITDA rate was 12.9%, up 120 basis points year-over-year.

Brian Worrell: As I will expand in a moment, our adjusted operating income and adjusted EBITDA margin rates were impacted by geopolitical events as well as broader global supply chain challenges.

Speaker 5: As I will expand in a moment, our adjusted operating income and adjusted EBITDA margin rates were impacted by geopolitical events as well as broader global supply chain challenges.

Brian Worrell: Corporate costs were $105 million in the quarter. For the second quarter, we expect corporate costs to be roughly flat compared to the first quarter.

Speaker 5: Corporate costs were $105 million in the quarter. For the second quarter, we expect corporate costs to be roughly flat compared to the first quarter.

Brian Worrell: Depreciation and amortization expense was $277 million in the quarter. For the second quarter, we expect D&A to be slightly up compared to first quarter levels. Net interest expense was $64 million. Income tax expense in the quarter was $107 million.

Speaker 5: Depreciation and amortization expense was $277 million in the quarter. For the second quarter, we expect DNA to be slightly up compared to first quarter levels.

Speaker 19: Net interest expense was $64 million.

Speaker 19: Income tax expense in the quarter was $107 million.

Speaker 5: Net interest expense was $64 million. Income tax expense in the quarter was $107 million.

Brian Worrell: GAAP diluted earnings per share was $0.08. Included in GAAP diluted earnings per share is an $85 million gain from the net change in fair value of our investment in ADNOC drilling and a $74 million loss from the net change in fair value of our investment in C3.ai. Both are recorded in other non-operating loss. Adjusted earnings per share was $0.15.

Lorenzo Simonelli: Included in GAAP-diluted earnings per share is an $85 million gain from the net change in fair value of our investment in ADNOC Drilling and a $74 million loss from the net change in fair value of our investment in C3 AI. Both are recorded in other non-operating loss. Adjusted earnings per share were $0.15. Turning to the cash flow statement, free cash flow in the quarter was negative $105 million. Free cash flow in the quarter was impacted by lower collections from a select number of international customers, which are largely timing-related, as well as a buildup in inventory as we get ready to execute on our large order backlog. For the second quarter, we expect free cash flow to improve sequentially, primarily driven by higher earnings and stronger collections.

Included in GAAP-diluted earnings per share is an $85 million gain from the net change in fair value of our investment in ADNOC Drilling and a $74 million loss from the net change in fair value of our investment in C3 AI. Both are recorded in other non-operating loss. Adjusted earnings per share were $0.15. Turning to the cash flow statement, free cash flow in the quarter was negative $105 million. Free cash flow in the quarter was impacted by lower collections from a select number of international customers, which are largely timing-related, as well as a buildup in inventory as we get ready to execute on our large order backlog. For the second quarter, we expect free cash flow to improve sequentially, primarily driven by higher earnings and stronger collections.

Speaker 5: GAAP diluted earnings per share was eight cents. Included in GAAP diluted earnings per share is an $85 million gain from the net change in fair value of our investment in adnot drilling and a $74 million loss from the net change in fair value of our investment in C3AI. Both are recorded in other non-operating loss.

Speaker 19: Adjusted earnings per share were 15 cents.

Brian Worrell: Turning to the cash flow statement, free cash flow in the quarter was negative $105 million.

Speaker 5: Adjusted earnings per share were 15 cents.

Brian Worrell: Free cash flow in the quarter was impacted by lower collections from a select number of international customers, which are largely timing related as well as a build in inventory as we get ready to execute on our large order backlog.

Speaker 5: Turning to the cash flow statement, free cash flow in the quarter was -$105 million. Free cash flow in the quarter was impacted by lower collections from a select number of international customers, which are largely timing related, as well as a build-in inventory as we get ready to execute on our large order backlog.

Speaker 5: Free cash flow in the quarter was impacted by lower collections from a select number of international customers, which are largely timing related, as well as a build-in inventory as we get ready to execute on our large order backlog.

Brian Worrell: For the second quarter, we expect free cash flow to improve sequentially, primarily driven by higher earnings and stronger collections.

Speaker 5: For the second quarter, we expect free cash flow to improve sequentially, primarily driven by higher earnings and stronger collections.

Lorenzo Simonelli: We continue to expect free cash flow conversion from adjusted EBITDA to be around 50% for the year, but anticipate the majority of our free cash flow to be generated over the second half of 2022. The quarterly progression should be more in line with what we experienced during 2018 and 2019. In the first quarter, we continued to execute on our share repurchase program, repurchasing 8.1 million Baker Hughes Class A shares for $236 million at an average price of just under $29 per share. As of 31 March 2022, GE's ownership of Baker Hughes Class A shares represented 4% of the total company, down from just over 11% at the end of 2021. GE's overall ownership of Class A and Class B shares was 11.4% at the end of the first quarter, down from 16.2% at the end of 2021.

We continue to expect free cash flow conversion from adjusted EBITDA to be around 50% for the year, but anticipate the majority of our free cash flow to be generated over the second half of 2022. The quarterly progression should be more in line with what we experienced during 2018 and 2019. In the first quarter, we continued to execute on our share repurchase program, repurchasing 8.1 million Baker Hughes Class A shares for $236 million at an average price of just under $29 per share. As of 31 March 2022, GE's ownership of Baker Hughes Class A shares represented 4% of the total company, down from just over 11% at the end of 2021. GE's overall ownership of Class A and Class B shares was 11.4% at the end of the first quarter, down from 16.2% at the end of 2021.

Brian Worrell: We continue to expect free cash flow conversion from adjusted EBITDA to be around 50% for the year, but anticipate the majority of our free cash flow to be generated over the second half of 2022.

Speaker 5: We continue to expect free cash flow conversion from adjusted EBITDA to be around 50% for the year, but anticipate the majority of our free cash flow to be generated over the second half of 2022.

Brian Worrell: The quarterly progression should be more in line with what we experienced during 2018 and 2019.

Speaker 5: The quarterly progression should be more in line with what we experienced during 2018 and 2019.

Brian Worrell: In the first quarter, we continued to execute on our share repurchase program, repurchasing 8.1 million Baker Hughes Class A shares for $236 million at an average price of just under $29 per share.

Speaker 5: In the first quarter, we continued to execute on our share repurchase program, repurchasing 8.1 million Baker Hughes Class A shares for $236 million at an average price of just under $29 per share.

Brian Worrell: As of March 31, GE’s ownership of Baker Hughes Class B shares represented 4% of the total company, down from just over 11% at the end of 2021. GE’s overall ownership of Class A and Class B shares was 11.4% at the end of the first quarter, down from 16.2% at the end of 2021.

Speaker 5: As of March 31st, GE's ownership of Baker Hughes Class B shares represented 4% of the total company, down from just over 11% at the end of 2021. GE's overall ownership of Class A and Class B shares was 11.4% at the end of the first quarter, down from 16.2% at the end of 2021.

Speaker 19: Ge's overall ownership of Class a and Class B shares was 11% at the end of the first quarter, down from 16% at the end of 2021.

Speaker 5: GE's overall ownership of Class A and Class B shares was 11.4% at the end of the first quarter, down from 16.2% at the end of 2021.

Lorenzo Simonelli: Before I go into the segment results, I will comment on the current situation in Russia and how it currently factors into our broader outlook. Russia represented roughly 4% of total company revenue in Q1, and we recently announced that we have halted all new investment in the country. Additionally, sanctions from the US, UK, and the EU continue to evolve and are making ongoing operations increasingly complex and significantly more difficult. As a result, we expect erosion of our Russia-related revenues over the course of 2022, particularly in OFS. However, the pace and magnitude of this is difficult to predict given the dynamic nature of the situation. Therefore, there is a range of possible outcomes we are preparing for across our product companies.

Before I go into the segment results, I will comment on the current situation in Russia and how it currently factors into our broader outlook. Russia represented roughly 4% of total company revenue in Q1, and we recently announced that we have halted all new investment in the country. Additionally, sanctions from the US, UK, and the EU continue to evolve and are making ongoing operations increasingly complex and significantly more difficult. As a result, we expect erosion of our Russia-related revenues over the course of 2022, particularly in OFS. However, the pace and magnitude of this is difficult to predict given the dynamic nature of the situation. Therefore, there is a range of possible outcomes we are preparing for across our product companies.

Brian Worrell: Before I go into the segment results, I will comment on the current situation in Russia and how it currently factors into our broader outlook.

Speaker 5: Before I go into the segment results, I will comment on the current situation in Russia and how it currently factors into our broader outlook.

Brian Worrell: Russia represented roughly 4% of total company revenue in the first quarter and we recently announced that we have halted all new investment in the country.

Speaker 5: Russia represented roughly 4% of total company revenue in the first quarter and we recently announced that we have halted all new investment in the country.

Brian Worrell: Additionally, sanctions from the U.S., UK. and the EU continue to evolve and are making ongoing operations increasingly complex and significantly more difficult.

Speaker 5: Additionally, sanctions from the US, UK, and the EU continue to evolve and are making ongoing operations increasingly complex and significantly more difficult.

Brian Worrell: As a result, we expect erosion of our Russia-related revenues over the course of 2022, particularly in OFS. However, the pace and magnitude of this is difficult to predict given the dynamic nature of the situation. Therefore, there is a range of possible outcomes we are preparing for across our product companies.

Speaker 5: As a result, we expect erosion of our Russia-related revenues over the course of 2022, particularly in OSS. However, the pace and magnitude of this is difficult to predict, given the dynamic nature of the situation. Therefore, there is a range of possible outcomes we are preparing for across our product companies.

Lorenzo Simonelli: On broader supply chain, while we did see some areas stabilize in the first quarter, there continues to be pressure on electronics, challenges in logistics, and an evolving understanding of implications due to global and geopolitical uncertainty. We remain focused on being adaptable to deliver for our customers and on our commitments. Now, I will walk you through the segment results in more detail and give you our thoughts on the outlook going forward. In oilfield services, the team delivered a solid quarter despite some of the global challenges. OFS revenue in the quarter was $2.5 billion, down 3% sequentially. International revenue was down 7% sequentially, led by declines in the North Sea, Russia-Caspian, the Middle East, and Latin America. North America revenue increased 6% sequentially, with solid growth in both North America land and offshore. Operating income in the quarter was $221 million, down 14% sequentially.

On broader supply chain, while we did see some areas stabilize in the first quarter, there continues to be pressure on electronics, challenges in logistics, and an evolving understanding of implications due to global and geopolitical uncertainty. We remain focused on being adaptable to deliver for our customers and on our commitments. Now, I will walk you through the segment results in more detail and give you our thoughts on the outlook going forward. In oilfield services, the team delivered a solid quarter despite some of the global challenges.

Brian Worrell: On broader supply chain, while we did see some areas stabilize in the first quarter, there continues to be pressure on electronics, challenges in logistics and an evolving understanding of implications due to global and geopolitical uncertainty.

Speaker 5: On broader supply chain, while we did see some areas stabilize in the first quarter, there continues to be pressure on electronics, challenges in logistics, and an evolving understanding of implications due to global and geopolitical uncertainty. We remain focused on being adaptable to deliver for our customers and on our commitments.

Brian Worrell: We remain focused on being adaptable to deliver for our customers and on our commitments.

Brian Worrell: Now I will walk you through the segment results in more detail and give you our thoughts on the outlook going forward.

Speaker 5: We remain focused on being adaptable to deliver for our customers and on our commitments.

Speaker 5: Now, I will walk you through the segment results in more detail and give you our thoughts on the outlook going forward.

Brian Worrell: In Oilfield Services, the team delivered a solid quarter despite some of the global challenges. OFS revenue in the quarter was $2.5 billion, down 3% sequentially. International revenue was down 7% sequentially, led by declines in the North Sea, Russia Caspian, the Middle East and Latin America. North America revenue increased 6% sequentially with solid growth in both North America land and offshore.

OFS revenue in the quarter was $2.5 billion, down 3% sequentially. International revenue was down 7% sequentially, led by declines in the North Sea, Russia-Caspian, the Middle East, and Latin America. North America revenue increased 6% sequentially, with solid growth in both North America land and offshore. Operating income in the quarter was $221 million, down 14% sequentially.

Speaker 5: In oilfield services, the team delivered a solid quarter, despite some of the global challenges. OSS revenue in the quarter was $2.5 billion, down 3% sequentially. International revenue was down 7% sequentially, led by declines in the North Sea, Russia Caspian, the Middle East, and Latin America. North America revenue increased 6% sequentially, with solid growth in both North America land and offshore.

Brian Worrell: Operating income in the quarter was $221 million, down 14% sequentially.

Lorenzo Simonelli: Operating margin rate was 8.9%, with margins declining 110 basis points sequentially, driven by lower volume, less favorable mix, and continued inflationary pressure in the chemicals business. Year-over-year, margins were up 230 basis points. As we look ahead to Q2, underlying macro fundamentals continue to improve, and we expect to see strong growth in both international and North American activity, as well as improvement in pricing. This is likely to be partially offset by weakness in Russia. We estimate that our Q2 revenue should increase sequentially in the mid to high single-digit range. With this revenue framework, we would expect our margins to increase by approximately 100 to 200 basis points sequentially. For the full year 2022, we see an improving outlook across most major markets, which is partially tempered by global supply chain and geopolitical factors.

Operating margin rate was 8.9%, with margins declining 110 basis points sequentially, driven by lower volume, less favorable mix, and continued inflationary pressure in the chemicals business. Year-over-year, margins were up 230 basis points. As we look ahead to Q2, underlying macro fundamentals continue to improve, and we expect to see strong growth in both international and North American activity, as well as improvement in pricing. This is likely to be partially offset by weakness in Russia. We estimate that our Q2 revenue should increase sequentially in the mid to high single-digit range. With this revenue framework, we would expect our margins to increase by approximately 100 to 200 basis points sequentially. For the full year 2022, we see an improving outlook across most major markets, which is partially tempered by global supply chain and geopolitical factors.

Brian Worrell: Operating margin rate was 8.9% with margins declining 110 basis points sequentially driven by lower volume, less favorable mix and continued inflationary pressure in the Chemicals business.

Speaker 5: Operating income in the quarter was $221 million, down 14% sequentially.

Speaker 5: Operating margin rate was 8.9%, with margins declining 110 basis points sequentially driven by lower volume, less favorable mix, and continued inflationary pressure in the chemicals business. Year-over-year margins were up 230 basis points.

Brian Worrell: Year-over-year margins were up 230 basis points.

Brian Worrell: As we look ahead to the second quarter, underlying macro fundamentals continue to improve, and we expect to see strong growth in both international and North American activity, as well as improvement in pricing. This is likely to be partially offset by weakness in Russia.

Speaker 5: As we look ahead to the second quarter, underlying macro fundamentals continue to improve and we expect to see strong growth in both international and North American activity, as well as improvement in pricing. This is likely to be partially offset by weakness in Russia.

Brian Worrell: We estimate that our second quarter revenue should increase sequentially in the mid- to high single-digit range. With this revenue framework, we would expect our margins to increase by approximately 100 to 200 basis points sequentially.

Speaker 5: We estimate that our second quarter revenue should increase sequentially in the mid-to-high single-digit range. With this revenue framework, we would expect our margins to increase by approximately 100 to 200 basis points sequentially. For the full year 2022, we see an improving outlook across most major markets, which is partially tempered by global supply chain and geopolitical factors.

Brian Worrell: For the full year 2022, we see an improving outlook across most major markets, which is partially tempered by global supply chain and geopolitical factors.

Lorenzo Simonelli: In the international market, we expect the continuation of a broad-based recovery with industry-wide activity growth in the low to mid double digits. In North America, we expect continued activity increases, with the broader market set to experience strong growth in excess of 40%. Given this macro backdrop and some of the headwind considerations I noted earlier, we would expect OFS revenue to increase in the low to mid double digits. The largest variable to this range is the number of potential outcomes in Russia. Despite this uncertainty, we still expect margin rates to increase throughout the year and continue to target 20% EBITDA margins by Q4. Moving to oilfield equipment, orders for the quarter were $739 million, an increase of over 100%, or $394 million year-over-year.

In the international market, we expect the continuation of a broad-based recovery with industry-wide activity growth in the low to mid double digits. In North America, we expect continued activity increases, with the broader market set to experience strong growth in excess of 40%. Given this macro backdrop and some of the headwind considerations I noted earlier, we would expect OFS revenue to increase in the low to mid double digits. The largest variable to this range is the number of potential outcomes in Russia. Despite this uncertainty, we still expect margin rates to increase throughout the year and continue to target 20% EBITDA margins by Q4. Moving to oilfield equipment, orders for the quarter were $739 million, an increase of over 100%, or $394 million year-over-year.

Brian Worrell: In the international market. We expect the continuation of a broad-based recovery, with industry-wide activity growth in the low to mid-double digits.

Speaker 5: In the international market, we expect the continuation of a broad-based recovery, with industry-wide activity growth in the low to mid-double digits. In North America, we expect continued activity increases, with the broader market set to experience strong growth in excess of 40%.

Brian Worrell: In North America, we expect continued activity increases with the broader market set to experience strong growth in excess of 40%.

Brian Worrell: Given this macro backdrop and some of the headwind considerations I noted earlier, we would expect OFS revenue to increase in the low to mid-double digits. The largest variable to this range is the number of potential outcomes in Russia.

Speaker 5: Given this macro backdrop and some of the headwind considerations I noted earlier, we would expect OSS revenue to increase in the low to mid-double digits. The largest variable to this range is the number of potential outcomes in Russia.

Brian Worrell: Despite this uncertainty, we still expect margin rates to increase throughout the year and continue to target 20% EBITDA margins by the fourth quarter.

Speaker 5: Despite this uncertainty, we still expect margin rates to increase throughout the year and continue to target 20% EBITDA margins by the fourth quarter.

Brian Worrell: Moving to Oilfield Equipment. Orders for the quarter were $739 million, an increase of over 100% or $394 million year-over-year.

Speaker 5: Moving to oilfield equipment, orders for the quarter were $739 million, an increase of over 100%, or 394 million year-over-year.

Lorenzo Simonelli: The strong orders performance was driven by SPS, supported by a large subsea tree contract in Asia, along with growth in flexibles, surface pressure control, and services. As a reminder, we removed subsea drilling systems from consolidated OFE operations when we completed the merger with MH Wirth in Q4 2021. Revenue was $528 million, down 16% year-over-year, primarily driven by SPS, SPC, and the removal of SDS, partially offset by growth in services and flexibles. Operating loss was $8 million, down $12 million year-over-year, primarily driven by lower volume in the quarter. OFE's lower revenue and operating margin in the quarter were driven by lower equipment backlog conversion in SPS. For Q2, we anticipate revenue to be approximately flat to up mid-single digits sequentially, depending on the timing of backlog conversion. We expect operating income to be around break-even or slightly positive.

The strong orders performance was driven by SPS, supported by a large subsea tree contract in Asia, along with growth in flexibles, surface pressure control, and services. As a reminder, we removed subsea drilling systems from consolidated OFE operations when we completed the merger with MH Wirth in Q4 2021. Revenue was $528 million, down 16% year-over-year, primarily driven by SPS, SPC, and the removal of SDS, partially offset by growth in services and flexibles. Operating loss was $8 million, down $12 million year-over-year, primarily driven by lower volume in the quarter. OFE's lower revenue and operating margin in the quarter were driven by lower equipment backlog conversion in SPS. For Q2, we anticipate revenue to be approximately flat to up mid-single digits sequentially, depending on the timing of backlog conversion. We expect operating income to be around break-even or slightly positive.

Brian Worrell: The strong orders performance was driven by SPS, supported by a large subsea tree contract in Asia, along with growth in flexibles, surface pressure control and services.

Speaker 5: The strong orders performance was driven by SPS, supported by a large subsea tree contract in Asia, along with growth in flexibles, surface pressure control, and services.

Brian Worrell: As a reminder, we removed subsea drilling systems from consolidated OFE operations when we completed the merger with MHWirth in the fourth quarter of 2021.

Speaker 5: As a reminder, we removed subsea drilling systems from consolidated OSE operations when we completed the merger with MH Worth in the fourth quarter of 2021.

Brian Worrell: Revenue was $528 million, down 16% year-over-year, primarily driven by SPS, SPC and the removal of SDS, partially offset by growth in services and flexibles.

Speaker 5: Revenue was $528 million, down 16% year-over-year, primarily driven by SPS, SPC, and the removal of SDS, partially offset by growth in services and flexibles.

Brian Worrell: Operating loss was $8 million, down $12 million year-over-year, primarily driven by lower volume in the quarter. OFE’s lower revenue and operating margin in the quarter were driven by lower equipment backlog conversion in SPS.

Speaker 5: Operating loss was $8 million down $12 million year-over-year, primarily driven by lower volume in the quarter. OSE's lower revenue and operating margin in the quarter were driven by lower equipment backlog conversion in SPS.

Brian Worrell: For the second quarter, we anticipate revenue to be approximately flat to up mid-single digits sequentially, depending on the timing of backlog conversion. We expect operating income to be around breakeven or slightly positive.

Speaker 5: For the second quarter, we anticipate revenue to be approximately flat to up mid-single digits sequentially, depending on the timing of backlog conversion. We expect operating income to be around breakeven or slightly positive.

Lorenzo Simonelli: For the full year 2022, we expect a recovery in offshore activity and project awards, which should help drive a solid increase in orders when adjusting for the removal of SDS. We expect OFE revenue to decline double digits, primarily driven by the deconsolidation of SDS, and OFE margin rate to be in the low single-digit range. Next, I will cover turbomachinery. The team delivered another strong quarter with solid execution. Orders in the quarter were $3 billion, up $1.6 billion year-over-year, a new quarterly record for TPS. Equipment orders were up $1.5 billion year-over-year, driven by a significant award to provide an LNG system for the first phase of VG's Plaquemines LNG project in North America. Service orders in the quarter were up 8% year-over-year, primarily driven by growth in contractual and transactional services, partially offset by lower order volumes and upgrades.

For the full year 2022, we expect a recovery in offshore activity and project awards, which should help drive a solid increase in orders when adjusting for the removal of SDS. We expect OFE revenue to decline double digits, primarily driven by the deconsolidation of SDS, and OFE margin rate to be in the low single-digit range. Next, I will cover turbomachinery. The team delivered another strong quarter with solid execution. Orders in the quarter were $3 billion, up $1.6 billion year-over-year, a new quarterly record for TPS. Equipment orders were up $1.5 billion year-over-year, driven by a significant award to provide an LNG system for the first phase of VG's Plaquemines LNG project in North America. Service orders in the quarter were up 8% year-over-year, primarily driven by growth in contractual and transactional services, partially offset by lower order volumes and upgrades.

Brian Worrell: For the full year 2022, we expect a recovery in offshore activity and project awards, which should help drive a solid increase in orders when adjusting for the removal of SDS.

Speaker 5: For the full year 2022, we expect a recovery in offshore activity and project awards, which should help drive a solid increase in orders when adjusting for the removal of SDS.

Brian Worrell: We expect OFE revenue to decline double digits, primarily driven by the deconsolidation of SDS and OFE margin rate to be in the low single-digit range.

Speaker 5: We expect OSE revenue to decline double-digits, primarily driven by the deconsolidation of SDS, and OSE margin rate to be in the low single-digit range.

Brian Worrell: Next, I will cover Turbomachinery. The team delivered another strong quarter with solid execution.

Brian Worrell: Orders in the quarter were $3 billion, up $1.6 billion year-over-year, a new quarterly record for TPS. Equipment orders were up $1.5 billion year-over-year, driven by a significant award to provide an LNG system for the first phase of VG’s Plaquemines LNG project in North America.

Speaker 5: Next, I will cover turbo machinery. The team delivered another strong quarter with solid execution.

Speaker 5: Orders in the quarter were $3 billion, up $1.6 billion year-over-year, a new quarterly record for TPS. Equipment orders were up $1.5 billion year-over-year, driven by a significant award to provide an LNG system for the first phase of VG's [inaudible] LNG project in North America.

Brian Worrell: Service orders in the quarter were up 8% year-over-year, primarily driven by growth in contractual and transactional services, partially offset by lower order volumes and upgrades.

Speaker 5: Service orders in the quarter were up 8% year-over-year, primarily driven by growth in contractual and transactional services, partially offset by lower order volumes and upgrades.

Lorenzo Simonelli: Revenue for the quarter was $1.3 billion, down 9% versus the prior year. Equipment revenue was down 26%, driven by timing of project execution. Services revenue was up 6% year-over-year, driven by higher volume in upgrades, pumps, and valves. Operating income for TPS was $226 million, up 9% year-over-year. Operating margin was 16.8%, up 280 basis points year-over-year. Margin rates in the first quarter were favorably impacted by higher services mix and strong cost productivity, especially on projects at or near completion. For the second quarter, we expect revenue to be flat to up mid-single digits on a year-over-year basis, driven by higher equipment volume from planned backlog conversion. With this revenue outlook, we expect TPS margin rates to be roughly flat to slightly higher versus the second quarter of 2021, depending on the ultimate mix between equipment and services.

Revenue for the quarter was $1.3 billion, down 9% versus the prior year. Equipment revenue was down 26%, driven by timing of project execution. Services revenue was up 6% year-over-year, driven by higher volume in upgrades, pumps, and valves. Operating income for TPS was $226 million, up 9% year-over-year. Operating margin was 16.8%, up 280 basis points year-over-year. Margin rates in the first quarter were favorably impacted by higher services mix and strong cost productivity, especially on projects at or near completion. For the second quarter, we expect revenue to be flat to up mid-single digits on a year-over-year basis, driven by higher equipment volume from planned backlog conversion. With this revenue outlook, we expect TPS margin rates to be roughly flat to slightly higher versus the second quarter of 2021, depending on the ultimate mix between equipment and services.

Brian Worrell: Revenue for the quarter was $1.3 billion, down 9% versus the prior year. Equipment revenue was down 26%, driven by timing of project execution.

Speaker 5: Revenue for the quarter was $1.3 billion, down 9% versus the prior year. Equipment revenue was down 26%, driven by timing of project execution.

Brian Worrell: Services revenue was up 6% year-over-year, driven by higher volume in upgrades, pumps and valves.

Speaker 5: Services revenue was up 6% year-over-year, driven by higher volume in upgrades, pumps, and valves.

Brian Worrell: Operating income for TPS was $226 million, up 9% year-over-year. Operating margin was 16.8%, up 280 basis points year-over-year.

Speaker 5: Operating income for TPS was $226 million up 9% year-over-year. Operating margin was 16.8%, up 280 basis points year-over-year.

Brian Worrell: Margin rates in the first quarter were favorably impacted by higher services mix and strong cost productivity, especially on projects at or near completion.

Speaker 5: Margin rates in the first quarter were favorably impacted by higher services mix and strong cost productivity, especially on projects at or near completion.

Brian Worrell: For the second quarter, we expect revenue to be flat to up mid-single digits on a year-over-year basis driven by higher equipment volume from planned backlog conversion.

Speaker 5: For the second quarter, we expect revenue to be flat to up mid-single digits on a year-over-year basis, driven by higher equipment volume from planned backlog conversion.

Brian Worrell: With this revenue outlook, we expect TPS margin rates to be roughly flat to slightly higher versus the second quarter of 2021, depending on the ultimate mix between equipment and services.

Speaker 5: With this revenue outlook, we expect TPS margin rates to be roughly flat to slightly higher versus the second quarter of 2021, depending on the ultimate mix between equipment and services.

Lorenzo Simonelli: For the full year, we expect strong growth in TPS orders versus 2021, driven by increasing LNG awards. We also continue to see a solid pipeline in our onshore/offshore production segment, along with opportunities in pumps, valves, and new energy areas. While we expect very strong growth in orders, revenue growth should likely range between high single digits to low double digits. On the margin side, we continue to expect operating income margin rates to be roughly flat year-over-year in 2022, depending on the mix between services and equipment. As we mentioned last quarter, included in this framework is an expected increase in investments and R&D expenses that relate to our new energy and industrial growth areas. Finally, in digital solutions, orders for the quarter were $567 million, up 3% year-over-year. DS continues to see a strengthening market outlook and delivered growth in orders across most end markets.

For the full year, we expect strong growth in TPS orders versus 2021, driven by increasing LNG awards. We also continue to see a solid pipeline in our onshore/offshore production segment, along with opportunities in pumps, valves, and new energy areas. While we expect very strong growth in orders, revenue growth should likely range between high single digits to low double digits. On the margin side, we continue to expect operating income margin rates to be roughly flat year-over-year in 2022, depending on the mix between services and equipment.

Brian Worrell: For the full year, we expect strong growth in TPS orders versus 2021, driven by increasing LNG awards. We also continue to see a solid pipeline in our onshore/offshore production segment along with opportunities in pumps, valves and new energy areas.

Speaker 5: For the full year, we expect strong growth in TPS orders versus 2021, driven by increasing LNG awards. We also continue to see a solid pipeline in our onshore-offshore production segment, along with opportunities in pumps, valves, and new energy areas.

Brian Worrell: While we expect very strong growth in orders, revenue growth should likely range between high single digits to low double digits.

Speaker 5: While we expect very strong growth in orders, revenue growth should likely range between high single digits to low double digits.

Brian Worrell: On the margin side, we continue to expect operating income margin rates to be roughly flat year-over-year in 2022, depending on the mix between services and equipment.

Speaker 5: On the margin side, we continue to expect operating income margin rates to be roughly flat year-over-year in 2022, depending on the mix between services and equipment. As we mentioned last quarter, included in this framework is an expected increase in investments and RND expenses that relate to our new energy and industrial growth areas.

As we mentioned last quarter, included in this framework is an expected increase in investments and R&D expenses that relate to our new energy and industrial growth areas. Finally, in digital solutions, orders for the quarter were $567 million, up 3% year-over-year. DS continues to see a strengthening market outlook and delivered growth in orders across most end markets.

Brian Worrell: As we mentioned last quarter, included in this framework is an expected increase in investments and R&D expenses that relate to our new energy and industrial growth areas.

Brian Worrell: Finally, in Digital Solutions, orders for the quarter were $567 million, up 3% year-over-year. DS continues to see a strengthening market outlook and delivered growth in orders across most end markets. Sequentially, orders were down 6%, driven by typical seasonality.

Speaker 5: Finally, in digital solutions, orders for the quarter were $567 million, up 3% year-over-year. DS continues to see a strengthening market outlook and delivered growth in orders across most end markets. Sequentially, orders were down 6%, driven by typical seasonality.

Lorenzo Simonelli: Sequentially, orders were down 6%, driven by typical seasonality. Revenue for the quarter was $474 million, up 1% year-over-year, primarily driven by higher volumes in Precision Sensors and Instrumentation, and Waygate, partially offset by lower volume in PPS, Nexus Controls, and Bentley Nevada. Sequentially, revenue was down 15%, driven by typical seasonality and challenges in the global environment, particularly supply chain. Operating income for the quarter was $15 million, down 38% year-over-year, largely driven by headwinds from electronics shortages, some cost inflation, and COVID-19-related lockdowns in China. Sequentially, operating income was down 71%, driven by lower volume. For the second quarter, we expect to see strong sequential revenue growth and operating margin rates back into the mid-single digits.

Sequentially, orders were down 6%, driven by typical seasonality. Revenue for the quarter was $474 million, up 1% year-over-year, primarily driven by higher volumes in Precision Sensors and Instrumentation, and Waygate, partially offset by lower volume in PPS, Nexus Controls, and Bentley Nevada. Sequentially, revenue was down 15%, driven by typical seasonality and challenges in the global environment, particularly supply chain. Operating income for the quarter was $15 million, down 38% year-over-year, largely driven by headwinds from electronics shortages, some cost inflation, and COVID-19-related lockdowns in China. Sequentially, operating income was down 71%, driven by lower volume. For the second quarter, we expect to see strong sequential revenue growth and operating margin rates back into the mid-single digits.

Brian Worrell: Sequentially, orders were down 6%, driven by typical seasonality.

Brian Worrell: Revenue for the quarter was $474 million, up 1% year-over-year primarily driven by higher volumes in precision sensors and instrumentation and weight gate, partially offset by lower volume in PPS, Nexus Controls and Bently Nevada.

Speaker 5: Revenue for the quarter was $474 million, up 1% year-over-year, primarily driven by higher volumes in precision sensors and instrumentation and way gate, partially offset by lower volume in PPS, Nexus controls, and Bentley Nevada.

Brian Worrell: Sequentially, revenue was down 15%, driven by typical seasonality and challenges in the global environment, particularly supply chain.

Speaker 5: Sequentially, revenue was down 15%, driven by typical seasonality and challenges in the global environment, particularly supply chain.

Brian Worrell: Operating income for the quarter was $15 million, down 38% year-over-year largely driven by headwinds from electronics shortages, some cost inflation and COVID-19-related lockdowns in China. Sequentially, operating income was down 71% driven by lower volume.

Speaker 5: Operating income for the quarter was $15 million, down 38% year-over-year, largely driven by headwinds from electronics shortages, some cost inflation, and COVID-19 related lockdowns in China. Sequentially, operating income was down 71%, driven by lower volume.

Brian Worrell: For the second quarter, we expect to see strong sequential revenue growth and operating margin rates back into the mid-single digits. For the full year, following five quarters in a row of positive book-to-bill, we expect solid DS revenue growth as supply chain constraints begin to ease over the second half of the year and backlog conversion improves. With higher volumes, we expect to see strong improvements in DS margins, which should approach high single digits for the total year.

Speaker 5: For the second quarter, we expect to see strong sequential revenue growth and operating margin rates back into the mid-single digits. For the full year, following five quarters in a row of positive book-to-bill, we expect solid DS revenue growth as supply chain constraints begin to ease over the second half of the year and backlog conversion improves. With higher volumes, we expect to see strong improvements in DS margins, which should approach high single digits for the total year. Overall, we have navigated a volatile environment during the quarter, delivering strong orders across the company and positioning to execute on our record backlog. Despite very troubling and challenging geopolitical events and broadly stressed global supply chains, we are confident in our ability to adapt and execute as the rest of the year unfolds. With that, I will turn the call back over to Jud.

Lorenzo Simonelli: For the full year, following five quarters in a row of positive book-to-bill, we expect solid DS revenue growth as supply chain constraints begin to ease over the second half of the year and backlog conversion improves. With higher volumes, we expect to see strong improvements in DS margins, which should approach high single digits for the total year. Overall, we have navigated a volatile environment during the quarter, delivering strong orders across the company and positioning to execute on our record backlog. Despite very troubling and challenging geopolitical events and broadly stressed global supply chains, we are confident in our ability to adapt and execute as the rest of the year unfolds. With that, I will turn the call back over to Judd. Thanks, Brian. Operator, let's open the call for questions. Thank you.

For the full year, following five quarters in a row of positive book-to-bill, we expect solid DS revenue growth as supply chain constraints begin to ease over the second half of the year and backlog conversion improves. With higher volumes, we expect to see strong improvements in DS margins, which should approach high single digits for the total year. Overall, we have navigated a volatile environment during the quarter, delivering strong orders across the company and positioning to execute on our record backlog. Despite very troubling and challenging geopolitical events and broadly stressed global supply chains, we are confident in our ability to adapt and execute as the rest of the year unfolds. With that, I will turn the call back over to Judd.

Brian Worrell: Overall, we have navigated a volatile environment during the quarter, delivering strong orders across the company and positioning to execute on our record backlog. Despite very troubling and challenging geopolitical events and broadly stressed global supply chains, we are confident in our ability to adapt and execute as the rest of the year unfolds. With that, I will turn the call back over to Jud.

Jud Bailey: Thanks, Brian. Operator, let's open the call for questions. Thank you.

Judson Edwin Bailey: Thanks, Brian. Operator, let's open the call for questions.

Operator: Thank you. Ladies and gentlemen, if you have questions at this time, please press the star then the one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. In the consideration of time, we ask that you please limit yourself to one question and one related follow-up.

Multiple speakers: Thanks, Brian. Operator, let's open the call for questions. Thank you. Ladies and gentlemen, if you have questions at this time, please press the star then the one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. In the consideration of time, we ask that you please limit yourself to one question and one related follow-up.

Lorenzo Simonelli: Ladies and gentlemen, if you have questions at this time, please press the star and the one key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. In the consideration of time, we ask that you please limit yourself to one question and one related follow-up. Now, first question coming from the line of James West with Evercore ISI, Yolanda Sullivan. Hey, good morning, Lorenzo, Brian. Hey, James. So, Lorenzo, you gave some great detail on the LNG outlook, but I was wondering if we could get a little more color from your conversations specifically with customers as things have clearly changed pretty dramatically in the last eight or nine weeks as LNG has come into focus here.

Operator: Ladies and gentlemen, if you have questions at this time, please press the star and the one key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. In the consideration of time, we ask that you please limit yourself to one question and one related follow-up. Now, first question coming from the line of James West with Evercore ISI, Yolanda Sullivan.

Speaker 1: If your question has been answered or you wish to remove yourself from the queue, please press the pound key.

Speaker 1: wish to remove yourself from the queue, please press the pound key.

Speaker 1: please press the pound key.

Speaker 1: In the consideration of time, we ask that you please limit yourself to one question and one related follow-up.

Speaker 1: question and one related follow-up.

Operator: Our first question coming from the line of James West with Evercore ISI. Your line is open.

Speaker 1: And coming from the lineup James West.

Speaker 1: wh ever quires, are you lot of open?

James West: Hey, good morning, Lorenzo, Brian.

Operator: Now the first question is coming from line of James West with [inaudible]. Your line is open.

James Carlyle West: Hey, good morning, Lorenzo, Brian.

Lorenzo Simonelli: Hey, James.

James West: So, Lorenzo, you gave some great detail on the LNG outlook, but I was wondering if we could get a little more color from your conversations specifically with customers as things have clearly changed pretty dramatically in the last eight or nine weeks as LNG has come into focus here. And if you could maybe provide us what they're saying, what their urgency level is, kind of just a little more detail on how those conversations are going and how accelerated this build-out cycle could be.

James Carlyle West: So, Lorenzo, you gave some great detail on the LNG outlook. But I was wondering if we could get a little more color from your conversations specifically with customers as things have clearly changed pretty dramatically in the last 8 or 9 weeks as LNGs come into focus here. And if you could maybe provide us what they are saying, what their urgency level is, kind of just a little more detail on how those conversations are going and how accelerated this buildout cycle could be.

Multiple speakers: Hey, good morning Lorenzo and Brian. Hey, James.

James Carlyle West: So Lorenzo you had some great detail on the LNG outlook, but I was wondering if we could get a little more color from your conversations, specifically with customers, as things have clearly changed pretty dramatically in the last eight or nine weeks as LNGs come into focus here. And if you could maybe provide us what they're saying, what their urgency level is, kind of just a little more detail on how those conversations are going and how accelerated this build-out cycle could be.

Lorenzo Simonelli: And if you could maybe provide us what they're saying, what their urgency level is, kind of just a little more detail on how those conversations are going and how accelerated this build-out cycle could be. Yeah, sure, James. I think it's clear the unfolding situation in Europe has definitely accelerated the pace of discussions on the next wave of LNG projects aiming to take FID. We'd already started to see market momentum pick up in 2021 as countries set net zero targets and also started to realize the role of natural gas and what it would play in the energy transition. Now, I'd say we're arguably in the early stages in what could be a multi-year reorganizing of the global energy system. And with that, it will take time for the LNG landscape to evolve.

Lorenzo Simonelli: Yeah, sure, James. I think it's clear the unfolding situation in Europe has definitely accelerated the pace of discussions on the next wave of LNG projects aiming to take FID. We'd already started to see market momentum pick up in 2021 as countries set net zero targets and also started to realize the role of natural gas and what it would play in the energy transition. Now, I'd say we're arguably in the early stages in what could be a multi-year reorganizing of the global energy system. And with that, it will take time for the LNG landscape to evolve.

Lorenzo Simonelli: Yes. Sure, James. And I think it’s clear the unfolding situation in Europe has definitely accelerated the pace of discussions on the next wave of LNG projects aiming to take FID. We’ve already started to see market momentum pick up in 2021, as country set net-zero targets and also started to realize the role of natural gas and what it would play in the energy transition. Now I’d say we are arguably in the early stages in what could be a multi-year reorganizing of the global energy system. And with that, it will take time for the LNG landscape to evolve. And based on the discussions with customers, we see a significant step-up in a number of customers looking to take earlier FIDs with also increased long-term supply agreements. We now expect 100 to 150 MTPA to take FID over the next 2 years, with the potential of more FIDs in ‘24 and ‘25. As you know, a lot of these projects are in the U.S. So U.S. should be a big better and fishery as these redrawing of the global energy map. But also as we look at other places such as East, Middle East, Mexico and also Asia, we’re seeing increasing interest from customers. I think we’re very well positioned with some interesting concepts around flexibility and also speed to market. And with our highly efficient modularized reflection train system, which again was emphasized in VG, we are helping to lower construction and operational costs with the plug-and-play approach that enables faster installation, so feeling good about the LNG outlook for the number of years.

Lorenzo Simonelli: Sure James. And I think it's clear the unfolding situation in Europe has definitely accelerated the pace of discussions on the next wave of LNG projects aiming to take FID. We've already started to see market momentum pick up in 2021 as countries set net-zero targets and also started to realize the role of natural gas and what it would play in the energy transition. Now, I'd say, we're arguably in the early stages in what could be a multi-year reorganizing of the global energy system. And with that, it will take time for the LNG landscape to evolve, and based on the discussions with customers, we see a significant step up in a number of customers looking to take earlier FID's would also increase long-term supply agreements. We now expect 100-150 MTPA to take FID over the next two years, with a potential of more FIDs in 2024 and 2025.

Lorenzo Simonelli: Based on the discussions with customers, we see a significant step up in a number of customers looking to take earlier FIDs with also increased long-term supply agreements. We now expect 100 to 150 MTPA to take FID over the next two years, with the potential of more FIDs in 2024 and 2025. As you know, a lot of these projects are in the US, so the US should be a big beneficiary as these redrawing of the global energy map. But also, as we look at other places such as East, Middle East, Mexico, and also Asia, we're seeing increasing interest from customers. I think we're very well positioned with some interesting concepts around flexibility and also speed to market.

Based on the discussions with customers, we see a significant step up in a number of customers looking to take earlier FIDs with also increased long-term supply agreements. We now expect 100 to 150 MTPA to take FID over the next two years, with the potential of more FIDs in 2024 and 2025. As you know, a lot of these projects are in the US, so the US should be a big beneficiary as these redrawing of the global energy map. But also, as we look at other places such as East, Middle East, Mexico, and also Asia, we're seeing increasing interest from customers. I think we're very well positioned with some interesting concepts around flexibility and also speed to market.

Speaker 4: As you know, a lot of these projects are in the US, so the US should be a big beneficiary as these re-drawings of the global energy map, but also as we look at other places such as Middle East, Mexico, and also Asia, we're seeing increasing interest from customers. I think we're very well positioned with some interesting concepts around flexibility and also speed to market and with our highly efficient, modernized refraction train system, which again was emphasized in VG, we're helping to lower construction and operational costs with the plug-and play approach that enables faster installation. So feeling good about the LNG outlook for the number of years.

Lorenzo Simonelli: And with our highly efficient modularized compression train system, which, again, was emphasized in VG, we're helping to lower construction and operational costs with the plug-and-play approach that enables faster installation. So, feeling good about the LNG outlook for the number of years. Sure, no doubt about that. Thanks for that, Lorenzo. And then maybe just a quick follow-up for me. You made this investment in April, a few weeks ago or a week ago, with HIF Global to expand, I think, e-fuels. Could you maybe comment on what exactly is going on there, what that market looks like, how you see that playing out? Yeah, sure, James. And HIF is a great opportunity, and we're pleased to be involved with this customer. And it's another example of how collaboration can really help to drive the energy transition.

And with our highly efficient modularized compression train system, which, again, was emphasized in VG, we're helping to lower construction and operational costs with the plug-and-play approach that enables faster installation. So, feeling good about the LNG outlook for the number of years. Sure, no doubt about that. Thanks for that, Lorenzo. And then maybe just a quick follow-up for me. You made this investment in April, a few weeks ago or a week ago, with HIF Global to expand, I think, e-fuels. Could you maybe comment on what exactly is going on there, what that market looks like, how you see that playing out? Yeah, sure, James. And HIF is a great opportunity, and we're pleased to be involved with this customer. And it's another example of how collaboration can really help to drive the energy transition.

James Carlyle West: Sure. Thanks for that, Lorenzo. And then maybe just a quick follow-up for me, you made this investment in April, a few weeks ago or a week ago with HIF Global to expand, I think, e-fuels. Could you maybe comment on what exactly is going on there, what that market looks like? How you see that playing out?

Multiple speakers: Sure, thanks for that Lorenzo. Then maybe just a quick follow-up from me. You made this investment in April or we go with HIF Global to expand I think E fuels could you maybe comment on what exactly is going on there or what that market looks like, how you see that that playing out. Yes, sure James. HIF is a great opportunity and we're pleased to be involved with this customer, and it's another example of how collaboration can really help to drive the energy transition. HIF Global develops projects to produce E fuels by blending green hydrogen and CO2 and we've invested alongside AME, EIG, Porsche, and Gemstone great partners to really help HIF continue to develop carbon-neutral E fuel projects in the United States, Chile, and Australia. With the small minority investment in this equity round, we will be providing compressors, turbines, pumps, valves, and other technology on future projects

Lorenzo Simonelli: Yes, sure, James. HIF is a great opportunity, and we’re pleased to be involved with this customer, and it’s another example of how collaboration can really help to drive the energy transition. HIF Global develops projects to produce e-fuels by blending green hydrogen and CO2. And we’ve invested alongside AME, EIG, Porsche and Gemstone, great partners to really help HIF continue to develop carbon neutral e-fuel projects in the United States, Chile and Australia. With a small minority investment in this equity round we will be providing compressors, turbines, pumps, valves and other technology on future projects. And I think what’s interesting here is, again, as you look at electricity-based fuels or e-fuels, their clean carbon-neutral fuels produced from renewable green hydrogen and carbon dioxide taken from the atmosphere. And they can be used by existing cars and trucks without any modification to the engines, and e-fuels require no new infrastructure transportation or filling station. So a good opportunity and an expanding market for us.

Lorenzo Simonelli: HIF Global develops projects to produce e-fuels by blending green hydrogen and CO2. We've invested alongside AME, EIG, Porsche, and Gemstone, great partners, to really help HIF continue to develop carbon-neutral e-fuel projects in the United States, Chile, and Australia. With a small minority investment in this equity round, we'll be providing compressors, turbines, pumps, valves, and other technology on future projects. I think what's interesting here is, again, as you look at electricity-based fuels or e-fuels, they're clean carbon-neutral fuels produced from renewable green hydrogen and carbon dioxide taken from the atmosphere. They can be used by existing cars and trucks without any modification to the engines. E-fuels require no new infrastructure transportation or filling stations. So, a good opportunity and an expanding market for us. Got it. Thanks, Lorenzo. Our next question coming from the line of Chase Mulvehill with Bank of America.

HIF Global develops projects to produce e-fuels by blending green hydrogen and CO2. We've invested alongside AME, EIG, Porsche, and Gemstone, great partners, to really help HIF continue to develop carbon-neutral e-fuel projects in the United States, Chile, and Australia. With a small minority investment in this equity round, we'll be providing compressors, turbines, pumps, valves, and other technology on future projects. I think what's interesting here is, again, as you look at electricity-based fuels or e-fuels, they're clean carbon-neutral fuels produced from renewable green hydrogen and carbon dioxide taken from the atmosphere. They can be used by existing cars and trucks without any modification to the engines. E-fuels require no new infrastructure transportation or filling stations. So, a good opportunity and an expanding market for us.

Lorenzo Simonelli: I think what's interesting here is again, as you look at electricity-based fuels or E fuels, they're clean, carbon-neutral fuels produced from renewable green hydrogen and carbon dioxide taken from the atmosphere, and they can be used by existing cars and trucks without any modification to the engines, and e-fuels require no new infrastructure, transportation, or filling stations. So a good opportunity and an expanding market for us.

James West: Got it. Thanks, Lorenzo.

James Carlyle West: Got it. Thanks, Lorenzo.

Operator: Our next question coming from the line of Chase Mulvehill with Bank of America. Yolanda Sullivan.

Operator: Our next question coming from the line of Chase Mulvehill with Bank of America. Your line is open.

Multiple speakers: Thanks, Lorenzo. Our next question is coming from the line of Chase Mofield with Bank of America. Your line is open.

Lorenzo Simonelli: Yolanda Sullivan. Yeah, good morning, everyone. Hey, Chase. Hi, Chase. Hey, Brian. Hey, Lorenzo. I guess kind of a follow-up question on James' question around LNG. And obviously, you've taken up your guidance for LNG, or sorry, for TPS orders this year based on strong LNG. So you've been guiding flat. Now you expect kind of strong order growth momentum. So I don't know if you'd want to kind of quantify what strong means. And then we kind of all understand what's happening in LNG and the accelerated growth opportunities here. But maybe a step back a little bit and talk about your upstream onshore, offshore order opportunities, because it ultimately looks like the base orders related to kind of some of the onshore, offshore stuff is taking a step higher as well. Yeah, Chase.

Chase Mulvehill: Yeah, good morning, everyone.

Chase Mulvehill: Yes. Good morning, everyone.

Lorenzo Simonelli: Hey, Chase.

Brian Worrell: Hi, Chase.

Chase Mulvehill: Hey, Brian. Hey, Lorenzo. I guess kind of a follow-up question on James' question around LNG. And obviously, you've taken up your guidance for LNG, or sorry, for TPS orders this year based on strong LNG. So you've been guiding flat. Now you expect kind of strong order growth momentum. So I don't know if you'd want to kind of quantify what strong means. And then we kind of all understand what's happening in LNG and the accelerated growth opportunities here. But maybe a step back a little bit and talk about your upstream onshore, offshore order opportunities, because it ultimately looks like the base orders related to kind of some of the onshore, offshore stuff is taking a step higher as well.

Chase Mulvehill: Hi, Brian. Hi, Lorenzo. I guess kind of a follow-up question on James, a question around LNG. And obviously, you’ve taken up your guidance for LNG – or sorry, for TPS orders this year based on strong LNG. So you’ve been guiding flat. Now you expect kind of strong order growth momentum. So I don’t know if you want to kind of quantify what strong means. And then we kind of all understand what’s happening in LNG and accelerated growth opportunities here. But maybe just step back a little bit and talk about your upstream onshore, offshore order opportunities. Because it ultimately looks like the base orders related to kind of some of the onshore/offshore stuff has taken a step higher as well.

Multiple speakers: Good morning everyone. Hey, Chase. Hey, Bryan. Hey, Lorenzo. I guess, kind of a follow-up question on James' question around LNG and obviously, you've taken up your guidance for TPS orders this year based on a strong LNG. So you've been guiding flat, now you expect kind of strong order growth momentum. So I don't know if you'd want to kind of quantify what strong means and then we kind of all understand what's happening in LNG and accelerated growth opportunities here. But maybe a step back a little bit and talk about your upstream onshore-offshore order opportunities, because it ultimately looks like the base orders related to kind of some of the onnshore-offshore stuff have taken a step higher as well.

Lorenzo Simonelli: Yeah, Chase. On TPS, again, we're seeing a continued order momentum that we saw start at the end of 2021, and it's really accelerated in 2022, primarily driven by LNG, also the new energy opportunities, even though they're smaller in nature. But when you look at the LNG projects that are moving forward, as I mentioned before, and you think about the likely timing, it could translate in an order number for TPS of $8 to $9 billion in 2022.

Lorenzo Simonelli: Yes, Chase. On TPS, again, we’re seeing a continued order momentum that we saw start at the end of ‘21, and it’s really accelerated in ‘22, primarily driven by LNG, also the new energy opportunities, even though they are smaller in nature. But when you look at the LNG projects that are moving forward as I mentioned before, and you think about the likely timing, it could translate in an order number for TPS of $8 billion to $9 billion in 2022. And importantly, based on customer discussions, we’d expect our order levels to remain elevated in 2023 as well. As you can see, a lot of this on the LNG projects is a pull forward and also strong long-term LNG fundamentals. And we also see a continued traction in the new energy space. And as you saw again in the first quarter, we booked some awards on the new energy space, and we’re still at the upper end of our 100 to 200 range as we continue to see new energy orders in 2022.

Lorenzo Simonelli: On TPS, again, we're seeing a continued order momentum that we saw start at the end of 2021, and it's really accelerated in 2022, primarily driven by LNG, also the new energy opportunities, even though they're smaller in nature. But when you look at the LNG projects that are moving forward, as I mentioned before, and you think about the likely timing, it could translate in an order number for TPS of $8 to $9 billion in 2022. And importantly, based on customer discussions, we'd expect our order levels to remain elevated in 2023 as well. As you can see, a lot of this on the LNG projects is a pull forward and also strong long-term LNG fundamentals. And we also see a continued traction in the new energy space.

Multiple speakers: Yes, Chase on TPS again, we're seeing a continued order to momentum that we saw at the start at the end of 2021 and it's really accelerated in 2022, primarily driven by LNG, also the new energy opportunities, even though they are smaller in nature, But when you look at the LNG projects that are moving forward, as I mentioned before, and you think about the likely timing, it could translate in an order number of for TPS of 8 to $9 billion in 2022. And importantly, based on customer discussions, we'd expect our order levels to remain elevated in 2023 as well. As you can see, a lot of this on the LNG project is a pull forward and also strong long-term LNG fundamentals and we also see a continued traction in the new energy space and, as you saw again in the first quarter, we booked some awards on the new energy space and we're still at the upper end of 100 to 200 range as we continue to see new energy orders in 2022. Ok, that's helpful there. Nice to hear that strong orders are going to continue into 2023 for TPS. The follow-up is really obviously the Russia-Ukraine conflict is causing Europe and other countries to focus on energy security. Obviously, this is positive in the LNG front but what does it ultimately mean for the energy transition? Do you think that it actually slows the pace of adoption? Does it speed it up like what does it mean for energy transition?

And importantly, based on customer discussions, we'd expect our order levels to remain elevated in 2023 as well. As you can see, a lot of this on the LNG projects is a pull forward and also strong long-term LNG fundamentals. And we also see a continued traction in the new energy space. As you saw, again, in Q1, we booked some awards on the new energy space, and we're still at the upper end of our 100 to 200 range as we continue to see new energy orders in 2022.

Lorenzo Simonelli: As you saw, again, in Q1, we booked some awards on the new energy space, and we're still at the upper end of our 100 to 200 range as we continue to see new energy orders in 2022. Okay, all right. That's helpful there. Nice to hear. Strong orders are going to continue into 2023 for TPS. The follow-up is really, obviously, the Russia-Ukraine conflict is causing Europe and other countries to focus on energy security. Obviously, this is positive on the LNG front, but what does this ultimately mean for the energy transition? Do you think that it actually slows the pace of adoption? Does it speed it up? What does it mean for energy transition? Yeah, Chase, it's a question that many are posing. I think the focus right now in the near term has switched to energy security, reliability, and diversity.

Chase Mulvehill: Okay, all right. That's helpful there. Nice to hear. Strong orders are going to continue into 2023 for TPS. The follow-up is really, obviously, the Russia-Ukraine conflict is causing Europe and other countries to focus on energy security. Obviously, this is positive on the LNG front, but what does this ultimately mean for the energy transition? Do you think that it actually slows the pace of adoption? Does it speed it up? What does it mean for energy transition?

Chase Mulvehill: Okay, alright. That’s helpful there. Nice to hear. Strong orders are going to continue into 2023 for TPS. The follow-up is really obviously, the Russia-Ukraine conflict is causing Europe and other countries to focus on energy security. Obviously, this is positive on the LNG front. But what does that ultimately mean for the energy transition? Do you think that it actually slows the pace of adoption? Does it speed it up? Like what does it mean for energy transition?

Speaker 3: Obviously, this is positive in the LNG front but what does it ultimately mean for the energy transition? Do you think that it actually slows the pace of adoption? Does it speed it up like what does it mean for energy transition?

Lorenzo Simonelli: Yeah, Chase, it's a question that many are posing. I think the focus right now in the near term has switched to energy security, reliability, and diversity. But we don't believe that sustainability goes away. In fact, if you look at some of the policies even introduced in Germany, their 2035 energy plan still continues to focus on sustainability. We think the current environment will actually accelerate clean energy initiatives, particularly for fuels like hydrogen, which the EU is making a large part of its long-term energy plan.

Lorenzo Simonelli: Yes, Chase, it’s a question that many are posing then. I think the focus right now in the near-term has switched to energy security, reliability and diversity. But we don’t believe that sustainability goes away. And in fact, if you look at some of the policies even introduced in Germany, the 2035 Energy Plan still continues focus on sustainability. We think the current environment will actually accelerate clean energy initiatives, particularly for fuels like hydrogen, which EU is making a large part of its long-term energy plan. What we’re seeing from the current situation is that you cannot become too reliant on one country or one source of energy. So diversity of supply is critical. And we think that pragmatism has come back into this discussion and the role of energy. Not just renewables but also, as we’ve mentioned before, gas playing a key critical role. Given the elevated commodity prices, a number of major oil companies and NOCs are going to report good profits and free cash flow. We think they will use this to continue actually developing and accelerating their carbon or decarbonization plans as well as healthy shareholder returns. And you can see that also with an example like Aramco with its CapEx plan that includes significant hydrogen. So we think Baker Hughes is very well positioned then with gas, LNG, hydrogen, CCUS, oil and pipelines. And we’ve got the technologies that are going to continue to drive this transition.

Multiple speakers: Yes, Chase, It's a question that many are posing. I think the focus right now, in the near term, has switched to energy security, reliability, and diversity, but we don't believe that sustainability goes away. In fact, if you look at some of the policies, even introduced in Germany, their 2035 energy plan still continues to focus on sustainability. We think the current environment will actually accelerate clean energy initiatives, particularly for fuels like hydrogen, which EU is making a large part of its long-term energy plan. What we're seeing from the current situation is that you cannot become too reliant on one country or one source of energy so diversity of supply is critical and we think that pragmatism has come back into the discussion and the role of energy, not just for renewables but also, as we've mentioned before, gas playing a key critical role. Given the elevated commodity prices, a number of major oil companies and NOCS are going to report good profits and free cash flow. We think they'll use this to continue actually to develop and accelerate their carbon carbonization plans, as well as healthy shareholder returns. And you can see that also with an example like a Ramco with its CapEx plans that includes significant hydrogen. So we think Baker Hughes is very well positioned with gas, LNG, hydrogen, [inaudible], oil, and pipelines, and we've got the technologies that are going to continue to drive this transition. Alright, perfect. Thanks Lorenzo.

Lorenzo Simonelli: But we don't believe that sustainability goes away. In fact, if you look at some of the policies even introduced in Germany, their 2035 energy plan still continues to focus on sustainability. We think the current environment will actually accelerate clean energy initiatives, particularly for fuels like hydrogen, which the EU is making a large part of its long-term energy plan. What we're seeing from the current situation is that you cannot become too reliant on one country or one source of energy. So diversity of supply is critical. And we think that pragmatism has come back into the discussion and the role of energy, not just renewables, but also, as we've mentioned before, gas playing a key critical role. Given the elevated commodity prices, a number of major oil companies and NOCs are going to report good profits and free cash flow.

What we're seeing from the current situation is that you cannot become too reliant on one country or one source of energy. So diversity of supply is critical. And we think that pragmatism has come back into the discussion and the role of energy, not just renewables, but also, as we've mentioned before, gas playing a key critical role. Given the elevated commodity prices, a number of major oil companies and NOCs are going to report good profits and free cash flow.

Lorenzo Simonelli: We think they'll use this to continue actually developing and accelerating their decarbonization plans as well as healthy shareholder returns. You can see that also with an example like Aramco with its CapEx plans that includes significant hydrogen. So we think Baker Hughes is very well positioned with gas, LNG, hydrogen, CCUS, oil, and pipelines. And we've got the technologies that are going to continue to drive this transition. All righty. Perfect. Thanks, Lorenzo. Thanks. Our next question coming from the line of Connell Cunningham, Morgan Stanley, Yolanda Sullivan. Yes, thanks. I was hoping maybe we could talk a little bit more about Russia. So just wanted to understand, first off, the data point on the 4% of revenues. Is that already fully accounting for any ruble depreciation impacts? And so is what you're basically guiding to actual activity declines?

We think they'll use this to continue actually developing and accelerating their decarbonization plans as well as healthy shareholder returns. You can see that also with an example like Aramco with its CapEx plans that includes significant hydrogen. So we think Baker Hughes is very well positioned with gas, LNG, hydrogen, CCUS, oil, and pipelines. And we've got the technologies that are going to continue to drive this transition.

Speaker 4: As well as healthy shareholder returns, and you can see that also with an example like a ramco with this, CapEx plans that includes significant hydrogen, So we think bacer Hughes is very well positioned. Then with gas, LNG hydrogen CS, oil and pipelines, and we've got the technologies that are going to continue to drive this transition. Perfect placeis.

Chase Mulvehill: All righty. Perfect. Thanks, Lorenzo.

Chase Mulvehill: Alright. Perfect. Thanks, Lorenzo.

Lorenzo Simonelli: Thanks.

Operator: Our next question coming from the line of Connell Cunningham, Morgan Stanley, Yolanda Sullivan.

Lorenzo Simonelli: Thanks.

Operator: Our next question coming from the line of Connor Lynagh with Morgan Stanley. Your line is open.

Multiple speakers: Thanks. Our next question is coming from the line of Connor [inaudible] with Morgan Stanley, your line is open. Yes, thanks. I was hoping maybe we could talk a little bit more about Russia. So just wanted to understand first off, the data point on the 4% of revenues, is that already fully accounting for any ruble depreciation impacts? And so is what you're basically got into actual activity declines and I'm curious, you know further to that. Is it that at this point you have received notification from your customers that your activity will decline or is that just your expectation based on what you're seeing in the market? Yes Connor, to hit the first part, this does include the impact of what was going on with the ruble. And, as you know, it's been down and up again and is relatively stable at this point in time. and it represented roughly about 4% of revenues in the first quarter.

Connor Lynagh: Yes, thanks. I was hoping maybe we could talk a little bit more about Russia. So just wanted to understand, first off, the data point on the 4% of revenues. Is that already fully accounting for any ruble depreciation impacts? And so is what you're basically guiding to actual activity declines? I'm curious further to that, is it at this point you have received notification from your customers that your activity will decline, or is that just your expectation based on what you're seeing in the market?

Connor Joseph Lynagh: Yes, thanks. I was hoping maybe we could talk a little bit more about Russia. So just wanted to understand, first off, the data point on the 4% of revenues. Is that already fully accounting for any ruble depreciation impacts? And so is what you’re basically guiding to actual activity declines? And I’m curious further to that, is it at this point, you have received notification from your customers that your activity will decline or is that just your expectation based on what you’re seeing in the market?

Lorenzo Simonelli: I'm curious further to that, is it at this point you have received notification from your customers that your activity will decline, or is that just your expectation based on what you're seeing in the market? Yeah, Connell, to hit the first part, this does include the impact of what was going on with the ruble. And as you know, it's been down and up again and is relatively stable at this point in time. And you hit it. It represented roughly about 4% of revenues in Q1. And look, I'd say in terms of how we're thinking about it for the full year, you got to take a step back and realize that sanctions from the US, UK, and EU continue to evolve and are evolving and are making ongoing operations increasingly complex and a bit more difficult.

Speaker 31: Is it at this point you have received notification from your customers that your activity will decline, or is that just your expectation based on what you're seeing in the market?

Brian Worrell: Yeah, Connell, to hit the first part, this does include the impact of what was going on with the ruble. And as you know, it's been down and up again and is relatively stable at this point in time. And you hit it. It represented roughly about 4% of revenues in Q1. And look, I'd say in terms of how we're thinking about it for the full year, you got to take a step back and realize that sanctions from the US, UK, and EU continue to evolve and are evolving and are making ongoing operations increasingly complex and a bit more difficult.

Brian Worrell: Yes. Connor, to hit the first part, this does include the impact of what was going on with the ruble. And as you know, it’s been down and up again and is relatively stable at this point in time. And you hit it, it represented roughly about 4% of revenues in the first quarter. And look, I’d say in terms of how we’re thinking about it for the full year, you got to take a step back and realize that sanctions from the U.S., UK. and EU continue to evolve and are evolving and are making ongoing operations increasingly complex and a bit more difficult. And kind of to give you some perspective on the quarter, we did see some decremental impact on EBITDA, about the same level on EBITDA that as Russia represented in terms of revenue of the total company. And it was really driven from lower volumes from not being able to move people and assets into the country. I’d say there were also some logistical delays and delivery challenges, which largely impacted OFE in both equipment and services. And then we also saw some logistical delays and delivery challenges in TPS, primarily in services as well. So those were the two areas that we saw the most significant impact in the quarter from Russia. And if you a step back and look at what we talked about going forward and kind of the framework that we tried to provide you for the year, we did contemplate everything that we know today and the anticipation that things are going to continue to evolve there. So based on what we talked about in terms of the revenue outlook for OFS, up low to mid-double digits, the low end really assumes that our OFS Russia operation declines over the course of the year to basically an immaterial level, so by the end of the year, really, really low there. We do have inventory in the country. But given the sanctions, are unable to import key technologies for some of the services. So there will be a drop off over the course of the year, barring something unforeseen. And there will be some impacts in TPS associated with that. But look, as we get more clarity on the situation, we will clearly react and take the appropriate cost actions to offsetting the declines in volume, which we also included in the framework that we provided you. And then, as you think about Russia and the impact on the global environment, we’re obviously working through supply chain challenges that come with things coming out of Russia and Ukraine, or not as the case may be. And then, Connor, you got to take a look to – there is going to be some offsetting activity increase to soak up the supply to meet the demand that goes away from potential declines in Russian output. And as you know, that’s not going to be one-for-one in terms of timing. So we are seeing increased activity in North America. You’ve seen increased plans, particularly in the Middle East to invest more to bring more supply to market. So we will see some impacts from that, but there is likely to be a delay versus the impact you see in Russia.

Brian Worrell: And look, I'd say, in terms of how we're thinking about it for the full year, you got to take a step back and realize that sanctions from the US, UK, and EU continue to evolve and are evolving and are making ongoing operations increasingly complex and a bit more difficult and kind of to give you some perspective on the first quarter, we did see some decremental impact on EBITDA-about the same level on EBITDA as Russia represented in terms of revenue of the total company- and it was really driven from lower volumes, from not being able to move people and assets into the country. I'd say there were also some logistical delays and delivery challenges, which largely impacted OFE in both equipment and services, and then we also saw some logistical delays and delivery challenges and TPS primarily in services as well. So those were the two areas that we saw the most significant impact in the quarter from Russia. And if you take a step back and look at what we talked about going forward and kind of the framework that we tried to provide you for the year, we did contemplate everything that we know today and the anticipation that things are going to continue to evolve there. So based on what we talked about in terms of the revenue outlook for OSS up low to mid-double digits, the low end really assumes that our OSS Russia operation declines over the course of the year to basically an in-material level, So by the end of the year, really really low there. We do have an inventory in the country but, given the sanctions, we're unable to import key technologies for some of the services. So there will be a drop-off over the course of the year, barring something unforeseen, and there will be some impacts in TPS associated with that. But look, as we get more clarity on the situation, we'll clearly react and take the appropriate cost actions to offsetting the declines in volume, which we also included in the framework that we provided you.

Lorenzo Simonelli: To give you some perspective on Q1, we did see some decremental impact on EBITDA, about the same level on EBITDA as Russia represented in terms of revenue of the total company. And it was really driven from lower volumes, from not being able to move people and assets into the country. I'd say there were also some logistical delays and delivery challenges, which largely impacted OFE in both equipment and services. And then we also saw some logistical delays and delivery challenges in TPS, primarily in services as well. So those were the two areas that we saw the most significant impact in the quarter from Russia.

To give you some perspective on Q1, we did see some decremental impact on EBITDA, about the same level on EBITDA as Russia represented in terms of revenue of the total company. And it was really driven from lower volumes, from not being able to move people and assets into the country. I'd say there were also some logistical delays and delivery challenges, which largely impacted OFE in both equipment and services. And then we also saw some logistical delays and delivery challenges in TPS, primarily in services as well. So those were the two areas that we saw the most significant impact in the quarter from Russia.

Lorenzo Simonelli: If you take a step back and look at what we talked about going forward and kind of the framework that we tried to provide you for the year, we did contemplate everything that we know today and the anticipation that things are going to continue to evolve there. So based on what we talked about in terms of the revenue outlook for OFS up low to mid double digits, the low end really assumes that our OFS Russia operation declines over the course of the year to basically an immaterial level. So by the end of the year, really, really low there. We do have inventory in the country, but given the sanctions, we're unable to import key technologies for some of the services. So there'll be a drop-off over the course of the year, barring something unforeseen, and there'll be some impacts in TPS associated with that.

If you take a step back and look at what we talked about going forward and kind of the framework that we tried to provide you for the year, we did contemplate everything that we know today and the anticipation that things are going to continue to evolve there. So based on what we talked about in terms of the revenue outlook for OFS up low to mid double digits, the low end really assumes that our OFS Russia operation declines over the course of the year to basically an immaterial level. So by the end of the year, really, really low there. We do have inventory in the country, but given the sanctions, we're unable to import key technologies for some of the services. So there'll be a drop-off over the course of the year, barring something unforeseen, and there'll be some impacts in TPS associated with that.

Speaker 5: that we saw the most significant impact in the quarter from Russia. And if you take a step back and look at what we talked about going forward and kind of the framework that we tried to provide you for the year, we did contemplate everything that we know today and the anticipation that things are going to continue to evolve there. So based on what we talked about in terms of the revenue outlook for OSS up low to mid-double digits, the low end really assumes that our OSS Russia operation declines over the course of the year to basically an in-material level, So by the end of the year, really really low there. We do have an inventory in the country but, given the sanctions, we're unable to import key technologies for some of the services. So there will be a drop-off over the course of the year, barring something unforeseen, and there will be some impacts in TPS associated with that. But look, as we get more clarity on the situation, we'll clearly react and take the appropriate cost actions to offsetting the declines in volume, which we also included in the framework that we provided you.

Lorenzo Simonelli: But look, as we get more clarity on the situation, we'll clearly react and take the appropriate cost actions to offset any declines in volume, which we also included in the framework that we provided you. And then, as you think about Russia and the impact on the global environment, we're obviously working through supply chain challenges that come with things coming out of Russia and Ukraine or not, as the case may be. And then, Connell, you got to take a look too. There's going to be some offsetting activity increase to soak up the supply to meet the demand that goes away from potential declines in Russian output. And as you know, that's not going to be one for one in terms of timing. So we are seeing increased activity in North America.

But look, as we get more clarity on the situation, we'll clearly react and take the appropriate cost actions to offset any declines in volume, which we also included in the framework that we provided you. And then, as you think about Russia and the impact on the global environment, we're obviously working through supply chain challenges that come with things coming out of Russia and Ukraine or not, as the case may be. And then, Connell, you got to take a look too.

Speaker 5: And then as you think about Russia and the impact on the global environment, we're obviously working through supply chain challenges that come with things coming out of Russia and Ukraine or not, as the case may be. And then you've got to take a look too there's going to be some offsetting activity increase to soak up the supply to meet the demand that goes away from potential declines in Russian output and, as you know, that's not going to be one for one in terms of timing. So we are seeing increased activity in North America. You've seen increased plans, particularly in the Middle East, to invest more, to bring more through supply to market. So we will see some impacts from that, but there's likely to be a delay versus the impact you see in Russia.

There's going to be some offsetting activity increase to soak up the supply to meet the demand that goes away from potential declines in Russian output. And as you know, that's not going to be one for one in terms of timing. So we are seeing increased activity in North America. You've seen increased plans, particularly in the Middle East, to invest more to bring more supply to market. So we will see some impacts from that, but there's likely to be a delay versus the impact you see in Russia.

Lorenzo Simonelli: You've seen increased plans, particularly in the Middle East, to invest more to bring more supply to market. So we will see some impacts from that, but there's likely to be a delay versus the impact you see in Russia. Yeah, thanks for all that, Connell. The last portion you were talking about there was my follow-up. So basically, at this point, have you seen any of your major international customers alter plans or accelerate plans or indicate that they're planning to accelerate? Certainly, it seems like there is going to be some loss of Russian oil volumes to the market. I'm curious how some of these bigger companies are going to respond to that. Yeah, yes, we are seeing customers talk about increasing their spend plans. I'd say particularly we've seen that in the Middle East and have started to see awards increase.

Connor Lynagh: Yeah, thanks for all that, Connell. The last portion you were talking about there was my follow-up. So basically, at this point, have you seen any of your major international customers alter plans or accelerate plans or indicate that they're planning to accelerate? Certainly, it seems like there is going to be some loss of Russian oil volumes to the market. I'm curious how some of these bigger companies are going to respond to that.

Multiple speakers: [Connor Lynagh] Yes, thanks for all that color. The last portion you were talking about there was my follow-up. So basically, at this point, have you seen any of your major international customers alter plans or accelerate plans or indicate that they are planning to accelerate? Certainly, it seems like there is going to be some loss of Russian oil volumes to the market. I am curious how some of these bigger companies are going to respond to that? [Brian Worrell] Yes. Yes, we are seeing customers talk about increasing their spend plan. I would say particularly, we have seen that in the Middle East and have started to see awards increase. And I think you will start to see some of that flow through here in the second half of the year and into ‘23. Obviously, we talked about the outlook in North America. That’s clearly a reaction to what’s going on in the market and what’s happening in Russia. And look, Lorenzo talked about what we are seeing in TPS orders for the year, and the situation has certainly had an impact on that. And ironically, a little bit Connor, as I look at everything we are seeing right now, ‘23 is shaping up with some pretty good visibility, maybe even a little better than ‘22, because of the volatility right now. But with the backlog that we are building on the back of potentially $8 billion to $9 billion of orders in TPS with some service tailwinds, you saw service orders up in TPS 8% this quarter with strong returns and cash flow, with a lot of operators, I think you are likely to see that continue. And then we talked about what you are seeing in the upstream space. And I talked about that timing disconnect and things coming in later, I think ‘23 is shaping up with pretty good visibility and is looking to be pretty strong based on what we are seeing today. So look, we will manage through the volatility in ‘22, but I think we are positioning things to be able to take advantage of the broader context of things going on in the marketplace across the portfolio.

Multiple speakers: Yes, thanks for all that color. The last portion you were talking about there was my follow-up. So basically, at this point, have you seen any of your major international customers alter plans, or accelerate plans, or indicate that they're planning to accelerate? Certainly, it seems like there is going to be some loss of Russian oil volumes to the market. I'm curious how some of these bigger companies are going to respond to that. Yes, we are seeing customers talk about increasing their spend plan. I'd say particularly, we've seen that in the Middle East and it started to see awards increase and I think you'll start to some of that flow through here in the second half of the year and into 2023. Obviously, we talked about the outlook in North America, that's clearly a reaction to what's going on in the market and what's happening in Russia. And look, Lorenzo talked about what we're seeing in TPS orders for the year and the situation has certainly had an impact on that. And ironically, a little bit Connor, as I look at everything we're seeing right now, 2023 is shaping up with some pretty good visibility, maybe even a little better than 2022 because of the volatility right now. But with the backlog that we're building on the back of potentially eight to $9 billion of orders in TPS with some service tailwinds, you saw service orders up in TPS 8% this quarter with strong returns and cash flow with a lot of operators. I think you're likely to see that continue. And then we talked about what you're seeing in the upstream space and I talked about that timing disconnect and things coming in later- I think 2023 is shaping up with pretty good visibility and is looking to be pretty strong based on what we're seeing today. So we'll manage through the volatility in 2022 but I think we're positioning things to be able to take advantage of the broader context of things going on in the marketplace across the portfolio.

Brian Worrell: Yeah, yes, we are seeing customers talk about increasing their spend plans. I'd say particularly we've seen that in the Middle East and have started to see awards increase. I think you'll start to see some of that flow through here in the second half of the year and into 2023. Obviously, we talked about the outlook in North America. That's clearly a reaction to what's going on in the market and what's happening in Russia. And look, Lorenzo talked about what we're seeing in TPS orders for the year, and the situation has certainly had an impact on that. And ironically, a little bit, Connell, as I look at everything we're seeing right now, 2023 is shaping up with some pretty good visibility, maybe even a little better than 2022 because of the volatility right now.

Lorenzo Simonelli: I think you'll start to see some of that flow through here in the second half of the year and into 2023. Obviously, we talked about the outlook in North America. That's clearly a reaction to what's going on in the market and what's happening in Russia. And look, Lorenzo talked about what we're seeing in TPS orders for the year, and the situation has certainly had an impact on that. And ironically, a little bit, Connell, as I look at everything we're seeing right now, 2023 is shaping up with some pretty good visibility, maybe even a little better than 2022 because of the volatility right now.

Lorenzo Simonelli: But with the backlog that we're building on the back of potentially $8 to $9 billion of orders in TPS, with some service tailwinds, you saw service orders up in TPS 8% this quarter, with strong returns and cash flow with a lot of operators. I think you're likely to see that continue. And then we talked about what you're seeing in the upstream space, and I talked about that timing disconnect and things coming in later. I think 2023 is shaping up with pretty good visibility and is looking to be pretty strong based on what we're seeing today. So look, we'll manage through the volatility in 2022, but I think we're positioning things to be able to take advantage of the broader context of things going on in the marketplace across the portfolio. Got it. Thanks very much.

But with the backlog that we're building on the back of potentially $8 to $9 billion of orders in TPS, with some service tailwinds, you saw service orders up in TPS 8% this quarter, with strong returns and cash flow with a lot of operators. I think you're likely to see that continue. And then we talked about what you're seeing in the upstream space, and I talked about that timing disconnect and things coming in later. I think 2023 is shaping up with pretty good visibility and is looking to be pretty strong based on what we're seeing today. So look, we'll manage through the volatility in 2022, but I think we're positioning things to be able to take advantage of the broader context of things going on in the marketplace across the portfolio.

Speaker 5: Is shaping up with some pretty good visibility, maybe even a little better than 22 because the volatility right now. But you know with the backlog that we're building on the back up- potentially eight to $9 billion of orders in TPS with some service tailwinds. You saw service orders up in TPS 8% this quarter with strong returns and cash flow with a lot of operators. I think you're likely to see see that continue. And then we talked about what you're seeing in the upstream space and, and I talked about that timing disconnect and things coming in later- I think 23 is shaping up with pretty good visibility and is looking to be pretty strong based on what we're seeing today. So localwe'll manage through the volatility in 22 But I think we're positioning things to be able to take advantage of the broader context of things going on in the marketplace across the portfolio.

Connor Lynagh: Got it. Thanks very much.

Connor Joseph Lynagh: Got it. Thanks very much.

Operator: And our next question is coming from the line of Scott Gruber with Citigroup. Your line is open.

Lorenzo Simonelli: Now, our next question coming from the line of Scott Gruber with Citi, Yolanda Sullivan. Yes, thanks. So just building upon Connell's last question there, it sounds like the visibility into '23 is improving. What's the potential for the international OFS market to actually see an acceleration in spending in '23, given the fact that budgets for this year were set before the surge in oil prices? And some additional color, if you will, on longer cycle projects, building in the queue to support growth in '23 and beyond? Yeah, Scott, just on OFS international outlook, based on the conversations with our customers, we expect a broad-based recovery internationally with all major geographies, and overall international growth in the low to mid-teens.

Operator: Now, our next question coming from the line of Scott Gruber with Citi, Yolanda Sullivan.

Multiple speakers: Got it. Thanks very much. Our next question is coming from the line of Scott [inaudible] with City Group. Your line is open.

Scott Gruber: Yes, thanks. So just building upon Connell's last question there, it sounds like the visibility into '23 is improving. What's the potential for the international OFS market to actually see an acceleration in spending in '23, given the fact that budgets for this year were set before the surge in oil prices? And some additional color, if you will, on longer cycle projects, building in the queue to support growth in '23 and beyond?

Scott Andrew Gruber: Yes. Thanks. So, just building upon Connor’s last question there, it sounds like the visibility into ‘23 is improving. What’s the potential for the international OFS market to actually see an acceleration in spending in ‘23, given the fact that budgets for this year were set before the surge in oil prices? And some additional color, if you will, on longer cycle projects, building in the queue to support growth in ‘23 and beyond.

Unknown Speaker: Yes, thanks. So just building upon Connor's last question there. It sounds like the visibility into 2023 is improving. What's the potential for the international OSS market because it's actually seen an acceleration in spending in 2023, given the fact that budgets for this year were set before the surge in oil prices, and some additional color, if you will on longer cycle projects building in the queue to support growth in 2023 and beyond.

Lorenzo Simonelli: Yeah, Scott, just on OFS international outlook, based on the conversations with our customers, we expect a broad-based recovery internationally with all major geographies, and overall international growth in the low to mid-teens. We believe the Middle East could be one of the strongest markets in 2022 and is likely in the early stages of a growth cycle as the NOCs in the region look to add production capacity on a gradual long-term basis. So good outlook going into 2023 as well. We also expect to see another strong year of growth in Latin America, led by Brazil and Mexico. Then as we go forward, we would expect North Sea and Asia Pacific to see solid growth in 2022.

Lorenzo Simonelli: Yes scot just done. internnational look based on the conversations with our customers, we expect broad based recovery internally with all major geographies, and overall internnational growth in the low tomid-teens. We believe Middle East could be one of the strongest markets in 2022 and is likely in the early stages of a growth cycle as the ocs in the region look to add production capacity on a gradual long term basis- a good outlook going into 2023 as well. We also expect to see another strong year of growth in Latin America, led by Brazil and Mexico, and then, as we go forward, we would expect North Sea and Asia, Pacific todissees a solid growth in 2022 and not a strongest Middle East or Latin America, but solid growth and largely West Africa is also seeing some incremental activity and strong growth as we go forward. I think on the offshore side- you we'd say at a macro level, the trends in the Subsea and offshore markets continue to improve and as you look at our first quarter as well, on an orders perspective, you can see that and the subsea tree and flexible pipe market. We expect to see a solid increase and industry awards this year and see it coming back for the foreseeable future.

Speaker 4: Yes Scott just on OSS international outlook, based on the conversations with our customers, we expect a broad-based recovery internally with all major geographies and overall international growth in the low to mid-teens. We believe Middle East could be one of the strongest markets in 2022 and is likely in the early stages of a growth cycle as the NOCs in the region look to add production capacity on a gradual long-term basis. So good outlook going into 2023 as well. We also expect to see another strong year of growth in Latin America, led by Brazil and Mexico, and then, as we go forward, we would expect North Sea and Asia Pacific to see solid growth in 2022 and not a strongest Middle East or Latin America, but solid growth in largely West Africa is also seeing some incremental activity and strong growth as we go forward. I think on the offshore side, we'd say at a macro level, the trends in the subsea and offshore markets continue to improve.

Lorenzo Simonelli: We believe the Middle East could be one of the strongest markets in 2022 and is likely in the early stages of a growth cycle as the NOCs in the region look to add production capacity on a gradual long-term basis. So good outlook going into 2023 as well. We also expect to see another strong year of growth in Latin America, led by Brazil and Mexico. Then as we go forward, we would expect North Sea and Asia Pacific to see solid growth in 2022. And not as strong as the Middle East or Latin America, but solid growth. And lastly, West Africa is also seeing some incremental activity and strong growth as we go forward. I think on the offshore side, we'd say at a macro level, the trends in the subsea and offshore markets continue to improve.

And not as strong as the Middle East or Latin America, but solid growth. And lastly, West Africa is also seeing some incremental activity and strong growth as we go forward. I think on the offshore side, we'd say at a macro level, the trends in the subsea and offshore markets continue to improve. As you look at our Q1 as well, from an orders perspective, you can see that. In the subsea tree and flexible pipe market, we expect to see a solid increase in industry awards this year and see it coming back for the foreseeable future.

Lorenzo Simonelli: As you look at our Q1 as well, from an orders perspective, you can see that. In the subsea tree and flexible pipe market, we expect to see a solid increase in industry awards this year and see it coming back for the foreseeable future. Got it. With some of the international operators pulling forward some projects and responding to oil prices, can you provide some color on the pricing trends you're seeing on the international side of the OFS market? I imagine things are getting better, but do you foresee sufficient momentum there to propel above normal incrementals in 2023 and continue to extend your margins beyond the 20% threshold? Yeah, Scott, generally speaking, we're starting to get good pricing leverage and getting net pricing, particularly in North America, but also in some of the international markets.

Multiple speakers: And as you look at our first quarter as well from an orders perspective, you can see that. In the subsea tree and flexible pipe market, we expect to see a solid increase in industry awards this year and see it coming back for the foreseeable future. Got it. And with some of the international operators point forward some projects and responding to oil prices, can you provide some color on the pricing trends you're seeing on the international side of the OSS market? I imagine things are getting better, but do you foresee sufficient momentum there to propel above normal incrementals in 2023 and continue to extend the margins beyond the 20% threshold? Generally speaking, we're starting to get good pricing leverage and getting net pricing, particularly in North America but also in some of the international markets. Right now, it varies by market but we're having more success and better discussions around higher pricing levels. And look, I'd say particularly, from an OSS perspective, as the chemicals business recovers, I would expect to see some improvement in incrementals there.

Scott Gruber: Got it. With some of the international operators pulling forward some projects and responding to oil prices, can you provide some color on the pricing trends you're seeing on the international side of the OFS market? I imagine things are getting better, but do you foresee sufficient momentum there to propel above normal incrementals in 2023 and continue to extend your margins beyond the 20% threshold?

Multiple speakers: [Scott Gruber] Got it. And with some of the international operators pulling forward some projects and responding to oil prices, can you provide some color on the pricing trends you are seeing on the international side OFS market? I imagine things are getting better. But do you foresee sufficient momentum there to propel above normal incrementals in ‘23 and continue to expand your margins beyond the 20% threshold? [Lorenzo Simonelli] Scott, generally speaking, we are starting to get good pricing leverage and getting net pricing, particularly in North America, but also in some of the international markets. Right now, it varies by market, but we are having more success and better discussions around higher pricing levels.

Scott Gruber: Yeah, Scott, generally speaking, we're starting to get good pricing leverage and getting net pricing, particularly in North America, but also in some of the international markets.Right now, it varies by market, but we're having more success and better discussions around higher pricing levels.

Lorenzo Simonelli: Right now, it varies by market, but we're having more success and better discussions around higher pricing levels. Yeah, and look, I'd say particularly from an OFS perspective, as the chemicals business recovers, I would expect to see some improvement in incrementals there. And then the only thing I would say, Scott, is we're all dealing with inflation in the market, and we're working hard to get surcharges in and price increases in, but that's something you got to take into consideration as you think about the next 12 months or so. Thanks. Appreciate the call. Now, our next question coming from the line of Arun Jayaram with JPMorgan Chase. Yolanda Sullivan. Yeah, good morning. You booked Plaquemines, the LNG system this quarter with Venture Global, and I believe Calcasieu Pass was booked in Q3 2019.

Brian Worrell: Yeah, and look, I'd say particularly from an OFS perspective, as the chemicals business recovers, I would expect to see some improvement in incrementals there. And then the only thing I would say, Scott, is we're all dealing with inflation in the market, and we're working hard to get surcharges in and price increases in, but that's something you got to take into consideration as you think about the next 12 months or so.

Brian Worrell: Yes. And look, I'd say particularly from an OFS perspective, as the chemicals business recovers, I would expect to see some improvement in incrementals there. And then the only thing I would say, Scott, is we are all dealing with inflation in the market and we are working hard to get surcharges in and price increases in. But that’s something you got to take into consideration as you think about the next 12 months or so.

Lorenzo Simonelli: Thanks. Appreciate the call.

Scott Andrew Gruber: Thanks. I appreciate the color.

Operator: Now, our next question coming from the line of Arun Jayaram with JPMorgan Chase. Yolanda Sullivan.

Operator: And our next question is coming from the line of Arun Jayaram with JPMorgan Chase. Your line is open.

Speaker 1: A ruined gyram with J P Morgan chase you'll. Lot is open.

Arun Jayaram: Yeah, good morning. You booked Plaquemines, the LNG system this quarter with Venture Global, and I believe Calcasieu Pass was booked in Q3 2019. So I was wondering if you could talk a little bit about the margin potential of this project relative to Calcasieu Pass and obviously a much more challenging supply chain, and inflationary environment. And what are you doing in order to protect your margins from those inflationary pressures?

Arun Jayaram: Yes. Good morning. You booked Plaquemines, the LNG system this quarter with Venture Global. And I believe Calcasieu Pass was booked in the third quarter of 2019. So, I was wondering if you could talk a little bit about the margin potential of this project relative to Calcasieu Pass, and obviously a much more challenging supply chain and inflationary environment, and what are you doing in order to protect your margins from those inflationary pressures?

Lorenzo Simonelli: So I was wondering if you could talk a little bit about the margin potential of this project relative to Calcasieu Pass and obviously a much more challenging supply chain, and inflationary environment. And what are you doing in order to protect your margins from those inflationary pressures? Yeah, Arun, look, we're very pleased that we've gotten the second phase of our work with VG here with Plaquemines. And look, I think it's fair to assume that margins will be similar to what we saw on Calcasieu. I mean, there's a couple of things going on here. Obviously, we've got experience with this type of project with this customer before, so there's some natural synergies that come through in this project that we didn't have in the first one. You did mention inflation there. Obviously, we've priced that in and have worked on productivity to help offset that as well.

Lorenzo Simonelli: Yeah, Arun, look, we're very pleased that we've gotten the second phase of our work with VG here with Plaquemines. And look, I think it's fair to assume that margins will be similar to what we saw on Calcasieu. I mean, there's a couple of things going on here. Obviously, we've got experience with this type of project with this customer before, so there's some natural synergies that come through in this project that we didn't have in the first one. You did mention inflation there. Obviously, we've priced that in and have worked on productivity to help offset that as well.

Brian Worrell: Yes. Arun, look, we are very pleased that we have gotten the second phase of our work with VG here with Plaquemines. And look, I think it’s fair to assume that margins will be similar to what we saw on Calcasieu. I mean there is a couple of things going on here. Obviously, we have got experience with this type of project with this customer before. So, there are some natural synergies that come through in this project that we didn’t have in the first one. You did mention inflation there. Obviously, we have priced that in and have worked on productivity to help offset that as well. And look, you can imagine as we have said before, when we quote and when we win orders, we go out and we place orders for long lead items. Certainly have a view of what we believe is happening in the market today and what will happen and take the appropriate actions to protect ourselves and the customer from that inflation as much as possible. But look, this is a great order for us. It’s similar to what we did with Calcasieu. And you heard Lorenzo talk about we delivered all these modules ahead of schedule, which was very helpful for VG getting to first cargo in record time. So, our track record here is pretty good, and we are really excited about this space and this order and our partnership with VG.

Speaker 5: Here with with plaamends ight. Look, I think it's fair to assume that you know margins will be similar to what we saw on calc, sue. I mean theres there's a couple of things going on here. Obviously we've got experience with this type of project with this customer before, So there's some natural synergies that come through and this project that we didn't have in in the know the first 1- you did mention inflation there. Obviously we- we priced that in and you know it'have worked on productivity to help offset that as well. And look, you can imagine, as we've said before, you know when we you know when we quote and when we win orders we go out and we place. You know orders for long lead items, certainly have a view of what we believe is happening in the market today and what will happen and take the appropriate actions to to protect ourselves and the the customer from that inflation as much as possible. But look, there's a great order for us. You know's similarto whatwe did with C E and you heard linzo talk about.

Lorenzo Simonelli: And look, you can imagine, as we've said before, when we quote and when we win orders, we go out and we place orders for long lead items. Certainly have a view of what we believe is happening in the market today and what will happen and take the appropriate actions to protect ourselves and the customer from that inflation as much as possible. But look, this is a great order for us. It's similar to what we did with Calcasieu, and you heard Lorenzo talk about we delivered all these modules ahead of schedule, which was very helpful for VG getting to first cargo in record time. So our track record here is pretty good, and we're really excited about this space and this order and our partnership with VG. Great. And I just had a follow-up.

And look, you can imagine, as we've said before, when we quote and when we win orders, we go out and we place orders for long lead items. Certainly have a view of what we believe is happening in the market today and what will happen and take the appropriate actions to protect ourselves and the customer from that inflation as much as possible. But look, this is a great order for us. It's similar to what we did with Calcasieu, and you heard Lorenzo talk about we delivered all these modules ahead of schedule, which was very helpful for VG getting to first cargo in record time. So our track record here is pretty good, and we're really excited about this space and this order and our partnership with VG.

Speaker 5: You know we delivered all these modules. I had a schedule, which is very helpful for you know, V G getting to first cargo in in record time. So our track record here is pretty good and we're really excited about this space and it's a order in our our partnership with D g- great. And I just had a follow up. I think you deliver calcas su pass and lessen than 30 months or so, which is very, very impressive. one of the questions we've been getting from clients is given up. You know what's going on in L N G. is this fast L N G concept which is offshore? You know these are generally a third of the size of some of the. You know the onshore facilities, but could you talk a little bit about that? This Baker have a tool kit that can participate in the offshore ln G market? You know, how do you see this playing out and is this a Sandbox? You you want to play plan. So I think you know well we have capability and capacity to handle.

Arun Jayaram: Great. And I just had a follow-up. I think you delivered Calcasieu Pass in less than 30 months or so, which is very, very impressive. One of the questions we've been getting from clients just given what's going on in LNG is this fast LNG concept, which is offshore. These are generally 1/3 of the size of some of the onshore facilities, but can you talk a little bit about that? Does Baker have a toolkit that can participate in the offshore LNG market? How do you see this playing out? And is this a sandbox you'd want to play in?

Arun Jayaram: Great. And I just had a follow up. I think you delivered Calcasieu Pass in less than 30 months or so, which is very, very impressive. One of the questions we have been getting from clients just given what’s going on in LNG is this fast LNG concept, which is offshore – either these are generally a third of the size of some of the onshore facilities. But could you talk a little bit about that? Does Baker have a toolkit that can participate in the offshore LNG market? How do you see this playing out? And is this a sandbox you do want to play in?

Lorenzo Simonelli: I think you delivered Calcasieu Pass in less than 30 months or so, which is very, very impressive. One of the questions we've been getting from clients just given what's going on in LNG is this fast LNG concept, which is offshore. These are generally 1/3 of the size of some of the onshore facilities, but can you talk a little bit about that? Does Baker have a toolkit that can participate in the offshore LNG market? How do you see this playing out? And is this a sandbox you'd want to play in? So, Arun, I think you know well we have capability and capacity to handle many different types of LNG equipment orders at the same time. We've got great capability in our facilities.

Lorenzo Simonelli: So, Arun, I think you know well we have capability and capacity to handle many different types of LNG equipment orders at the same time. We've got great capability in our facilities. As you look at the 30 years we've been in LNG, we've always been looking at new technologies to reduce the cycle time and also to plug and play. So this new motorized approach to fast LNG can be applied both to onshore and offshore. And the number of customer discussions are intensifying around this speed to market. So I think, again, with the technology enhancements we've made, we're well positioned to capture the market here.

Lorenzo Simonelli: So Arun, I think you know well, we have capability and capacity to handle many different types of LNG equipment orders at the same time. We've got great capability in our facilities. And as you look at the 30 years we have been in LNG, we have always been looking at new technologies to reduce the cycle time and also to plug-and-play. So, this new modularized approach of fast LNG can be applied both to onshore and offshore. And the number of customer discussions are intensifying around the speed to market. So, I think again, with the technology enhancements we've made, we are well positioned to capture the market here.

Lorenzo Simonelli: As you look at the 30 years we've been in LNG, we've always been looking at new technologies to reduce the cycle time and also to plug and play. So this new motorized approach to fast LNG can be applied both to onshore and offshore. And the number of customer discussions are intensifying around this speed to market. So I think, again, with the technology enhancements we've made, we're well positioned to capture the market here. Great. Thanks a lot. Now, our next question coming from the line of Stephen Gengaro with Stifel. Yolanda Sullivan. Thanks. Good morning, gentlemen. Morning. Good morning. Do you mind going back to your prepared comments on the oilfield services side and some of the changes you've made there?

Speaker 4: Many different types of LNG equipment orders. At the same time we've got great capability in our facilities and, as you look at the thiratty years we've been in LNG, we've always been looking at new technologies to reduce the cycle time and also to plug and play. So this new moderorized approach of fast LNG can be applied both to onshore and offshore and the number of customer discussions are intensifying around this speed to market. So I think again, with the technology enhancements we've made, we're well positioned to capture the market herethank.

Arun Jayaram: Great. Thanks a lot.

Operator: Now, our next question coming from the line of Stephen Gengaro with . Yolanda Sullivan.

Operator: And our next question is coming from the line of Stephen Gengaro with Stifel. Your line is now open.

Lorenzo Simonelli: Thanks. Good morning, gentlemen. Morning.

Speaker 2: Our next question, coming from the line up, steeven G with steel, you on selfphinthanks. Good morning gentleman, morning morning. Can you you find going back to your prepared comments on the oilfield services side and some of the changes you've made there? Can you you talk about sort of the path to 20% EBITDA margins by the end of the year and maybe with some color around the impact some of these changes you've made?

Stephen David Gengaro: Thanks. Good morning gentlemen. Do you mind going back to your prepared comments on your oilfield services side and some of the changes you have made there. Can you talk about sort of the path to 20% EBITDA margins by the end of the year and maybe with some color around the impact of some of these changes you have made?

Brian Worrell: Good morning.

Stephen Gengaro: Do you mind going back to your prepared comments on the oilfield services side and some of the changes you've made there? Can you talk about sort of the path to 20% EBITDA margins by the end of the year and maybe with some color around the impact of some of these changes you've made?

Lorenzo Simonelli: Can you talk about sort of the path to 20% EBITDA margins by the end of the year and maybe with some color around the impact of some of these changes you've made? Yeah, look, so I'd say overall, we still feel confident, Stephen, in hitting our margin target rates and getting OFS to a 20% EBITDA margin rate on a consistent basis. And I'd say from here, there's a couple of things that should drive margin improvement. The biggest driver will be better profitability in our chemicals business, which you know has been squeezed by higher input costs, higher logistics and shipping costs, and some raw material shortages. As Lorenzo mentioned, we put in pricing increases and surcharges to help offset that. But chemicals had about a 170 basis point drag on OFS margins in the first quarter.

Brian Worrell: Yeah, look, so I'd say overall, we still feel confident, Stephen, in hitting our margin target rates and getting OFS to a 20% EBITDA margin rate on a consistent basis. And I'd say from here, there's a couple of things that should drive margin improvement. The biggest driver will be better profitability in our chemicals business, which you know has been squeezed by higher input costs, higher logistics and shipping costs, and some raw material shortages. As Lorenzo mentioned, we put in pricing increases and surcharges to help offset that. But chemicals had about a 170 basis point drag on OFS margins in the first quarter.

Multiple speakers: [Brian Worrell] Yes. Look, so I would say overall, we still feel confident, Stephen, in hitting our margin target rates and getting OFS to a 20% EBITDA margin rate on a consistent basis. And I would say from here, there is a couple of things that should drive margin improvement. The biggest driver will be better profitability in our chemicals business which, as you know, has been squeezed by higher input costs, higher logistics and shipping costs and some raw material shortages. As Lorenzo mentioned, we put in pricing increases and surcharges to help offset that. But chemicals had about 170 basis point drag on OFS margins in the first quarter. So look, normalization of broader logistics and supply chain issues that have disrupted shipment schedules here in the quarter should also help with that. These two issues, if you combine with the volume improvement that we are expecting, should be enough to get us to the 20% level. In addition, we are set to bring on new chemical plants in Singapore and Saudi in ‘22 and ‘23, which will lower the cost for chemicals, get us closer to some of our customers and give us some advantages for our Eastern Hemisphere delivery. We are also continuing to work other productivity initiatives with Maria Claudia and the team, primarily around service delivery, with our remote operations continuing to drive margin improvements there. And we have been executing on supply chain rationalization as well as sourcing from some lower-cost countries, and that’s been part of a multiyear plan. So, we have got a lot of things that we have been working and are continuing to work to get the margin rates to that 20% level. But as I said, sort of broader supply chain and logistics and normalization of the chemicals margins, which we think have troughed here in the first quarter will get us there, and then there should be some icing on top. [Lorenzo Simonelli] And Stephen, just to add, the new organization that we announced is going to improve the speed of decision-making and also be able to capitalize on the growth opportunities in the market. So, it’s very much customer focused and allows us to be more responsive and more comprehensive in our integrated solutions and capture more of the market share of operating costs related to spend. So, it’s what our customers have been asking for, and we are delivering.

Speaker 8: Yes you know look, So'd say overall we still feel confident, stevenen in hitting our margin target rates, getting of's to a 20% EBITDA margin rate, you know, on a consistent basis. And I'd say from here, you know there's a couple things that should drive marg margin improvement. I'm the biggest driver will be better profitability in our chemicals business, which is, you know, has been squeezed by higher input costs, higher logistics and shipping costs and some raw material shortages. You know, as lorenza mentioned, we put in pricing increases and surcharges to help offset that. But you know, chemicals had about 170 basis point drag on o F's margins in in the first quarter, you know. So look, you know, normalization of broader logistics and supply chain issues that have disrupted shipment schedules, you know, here in the quarter should also should also help with with that, these two issues.

Lorenzo Simonelli: So look, normalization of broader logistics and supply chain issues that have disrupted shipment schedules here in the quarter should also help with that. These two issues, if you combine with the volume improvement that we're expecting, should be enough to get us to the 20% level. In addition, we're set to bring on new chemical plants in Singapore and Saudi in 2022 and 2023, which will lower the cost for chemicals, get us closer to some of our customers, and give us some advantages for our Eastern Hemisphere delivery. We're also continuing to work on other productivity initiatives with Maria Claudia Borras and the team, primarily around service delivery, with our remote operations continuing to drive margin improvements there. And we have been executing on supply chain rationalization as well as sourcing from some lower-cost countries, and that's been part of a multi-year plan.

So look, normalization of broader logistics and supply chain issues that have disrupted shipment schedules here in the quarter should also help with that. These two issues, if you combine with the volume improvement that we're expecting, should be enough to get us to the 20% level. In addition, we're set to bring on new chemical plants in Singapore and Saudi in 2022 and 2023, which will lower the cost for chemicals, get us closer to some of our customers, and give us some advantages for our Eastern Hemisphere delivery. We're also continuing to work on other productivity initiatives with Maria Claudia Borras and the team, primarily around service delivery, with our remote operations continuing to drive margin improvements there. And we have been executing on supply chain rationalization as well as sourcing from some lower-cost countries, and that's been part of a multi-year plan.

Speaker 5: If you combined with the volume improvement that we we're expecting, should be enough to get us to the the 20% level. In addition, we're set to bring on new chemical plants and Singapore and Saudi and 20, two Y, three which are lower the cost for cheicals, get us closer to some of our customers and give us some advantages for our Eastern Hemisphere delivery. We're also continuing to work other productivity initiatives with Maria cloudy in the team, primarily around service delivery with our remote operation continuing to drive margin improvements there and we have been executing on supply chain rationalization as well as sourcing from some lower cost countries and that's been part of a multiyear plan. So we've got a lot of things that we have been working and are continuing to work to get the margin rates to that 20% level. As I said, sort of broader supply chain in logistics and normalization of the chemicals margins which we think of trough here in the first quarter will get us there and then there should be some icing on top.

Lorenzo Simonelli: So we've got a lot of things that we have been working and are continuing to work to get the margin rates to that 20% level. But as I said, sort of broader supply chain, logistics, and normalization of the chemicals margins, which we think have troughed here in Q1, will get us there, and then there should be some icing on top. And Stephen, just to add, the new organization that we announced is going to improve the speed of decision-making and also be able to capitalize on the growth opportunities in the market. So it's very much customer-focused and allows us to be more responsive and more comprehensive in our integrated solutions and capture more of the market share of operating costs related to spend. So it's what our customers have been asking for, and we're delivering. Thanks.

So we've got a lot of things that we have been working and are continuing to work to get the margin rates to that 20% level. But as I said, sort of broader supply chain, logistics, and normalization of the chemicals margins, which we think have troughed here in Q1, will get us there, and then there should be some icing on top.

Lorenzo Simonelli: And Stephen, just to add, the new organization that we announced is going to improve the speed of decision-making and also be able to capitalize on the growth opportunities in the market. So it's very much customer-focused and allows us to be more responsive and more comprehensive in our integrated solutions and capture more of the market share of operating costs related to spend. So it's what our customers have been asking for, and we're delivering.

Speaker 4: And Stephen, just to add. The new organization that we announced is going to improve the speed of decision making and also be able to capitalize on the growth opportunities in the market. So it's very much customer focus that allows us to be more responsive and more comprehensive in our integrated solutions and capture more of the market share of operating costs related to spend. So it's what our customers have been asking for and we're deliveringthank as aquick follow-up on the chemicals. On the supply chain sidei clearly Russia kind of disrupted what look like, I think, a stabilization. What's your visibility and sort of confidence that things will sort of start to normalize here as you get into the second half of the year?

Stephen Gengaro: Thanks. And as a quick follow-up, on the chemicals on the supply chain side, I mean, clearly, Russia kind of disrupted what looked like, I think, a stabilization. What's your visibility and sort of confidence that things will sort of start to normalize here as you get into the second half of the year?

Stephen David Gengaro: Thanks. And as a quick follow-up, on the chemicals – on the supply chain side, I mean clearly, Russia kind of disrupted what looked like, I think stabilization. But what’s your visibility and sort of confidence that things will sort of start to normalize here as you get into the second half of the year?

Lorenzo Simonelli: And as a quick follow-up, on the chemicals on the supply chain side, I mean, clearly, Russia kind of disrupted what looked like, I think, a stabilization. What's your visibility and sort of confidence that things will sort of start to normalize here as you get into the second half of the year? Yeah, look, I'd say we started to see some encouraging signs in the latter part of Q4 as chemical prices started to stabilize and logistics started to look a bit better. But obviously, with everything going on in Russia and the increase in commodity prices, that's created some more headwinds. We have seen stabilization in the broader base chemical space, but I'd say where inflation is still tough is in the specialty chemical market.

Brian Worrell: Yeah, look, I'd say we started to see some encouraging signs in the latter part of Q4 as chemical prices started to stabilize and logistics started to look a bit better. But obviously, with everything going on in Russia and the increase in commodity prices, that's created some more headwinds. We have seen stabilization in the broader base chemical space, but I'd say where inflation is still tough is in the specialty chemical market.

Brian Worrell: Yes. Look, I would say we started to see some encouraging signs in the latter part of the fourth quarter as chemical prices started to stabilize and logistics started to look a bit better. But obviously, with everything going on in Russia and the increase in commodity prices that’s created some more headwinds. We have seen stabilization in the broader base chemical space. But I would say where inflation is still tough is in the specialty chemical market. And as I mentioned, we had some unique issues with the supplier who had a facility that was basically shutdown and getting that facility back up and running has taken them a bit longer. So, we have been having to get some alternative supply. That’s starting to normalize as well. So, we should see some recoveries come through. And then look, we have made some changes. We recently changed out leadership in chemicals. We are doing some specific things in supply chain to deal with the current environment. We broadened our sourcing relationships just given what we experienced with this large supplier that we had. We have actually taken a look and have eliminated some products where volumes were low and margins were relatively low to free up the capability to focus on some areas where we make more money and deal with some of the supply chain challenges and focus the team there. And then with the new factories coming on, it’s allowed us an opportunity to take a step back and look at the overall supply base, how we are contracting, and we have made some changes there that we should start to see come through here in the second half. But good visibility to what’s going on there. The team understands it, just working through a little bit of a perfect storm here that seems to be abating.

Speaker 8: yeah look, I'd say you know we, we started to see some encouraging signs and you know, in the latter part of the fourth quarter, as you know, chemical prices started to stabilize and logistics started to look a bit better. But obviously, with everything going on in rushsia and the increase in and commodity prices, that that's created some more headwinds. We have seen stabilization in the broader, you know, base chemical space, but I'd say where inflation is still tough, ES in the specialty chemical market and you know, as I mentioned, we had some unique issues with a supplier who had a facility that was basically shut down and getting that facility back up and running has taken them a bit longer. So we've been having to get some alternative supply that starting to normalize as well. So we should see some, some recoveries come through and then look, we've made some. We've made some changes. We recently changed out leadership and chemicals.

Lorenzo Simonelli: And as I mentioned, we had some unique issues with a supplier who had a facility that was basically shut down, and getting that facility back up and running has taken them a bit longer. So we've been having to get some alternative supply. That's starting to normalize as well, so we should see some recoveries come through. And then, look, we've made some changes. We've recently changed out leadership in chemicals. We're doing some specific things in supply chain to deal with the current environment. We've broadened our sourcing relationships just given what we experienced with this large supplier that we had.

And as I mentioned, we had some unique issues with a supplier who had a facility that was basically shut down, and getting that facility back up and running has taken them a bit longer. So we've been having to get some alternative supply. That's starting to normalize as well, so we should see some recoveries come through. And then, look, we've made some changes. We've recently changed out leadership in chemicals. We're doing some specific things in supply chain to deal with the current environment. We've broadened our sourcing relationships just given what we experienced with this large supplier that we had.

Speaker 5: We're doing some specific things and supply chain to deal with the current environment. We broadened our sourcing relationships just given what we experience with this large supplier that we had. We've actually taken a look and have eliminated some products where volumes were low and margins were relatively low to free up the capability to focus on some areas where we make more money and deal with some of the supply chain challenges and focus the team there. And then, with the new factories coming on, it's allowed us an opportunity to take a step back and look at the overall supply base, how we're contracting, and we've made some changes there that we should start to see come through here in the second half. But good visibility to what's what's going on there. The team understands it, just working through a little bit of a perfect storm here that seems to be abating. Very good, Thank you.

Lorenzo Simonelli: We've actually taken a look and have eliminated some products where volumes were low and margins were relatively low to free up the capability to focus on some areas where we make more money and deal with some of the supply chain challenges and focus the team there. And then with the new factories coming on, it's allowed us an opportunity to take a step back and look at the overall supply base, how we're contracting, and we've made some changes there that we should start to see come through here in the second half. But good visibility to what's going on there. The team understands it. Just working through a little bit of a perfect storm here that seems to be abating. Very good. Thank you. And our next question coming from the line of David Anderson with Barclays, Yolanda Sullivan. Hey, good morning, Lorenzo.

We've actually taken a look and have eliminated some products where volumes were low and margins were relatively low to free up the capability to focus on some areas where we make more money and deal with some of the supply chain challenges and focus the team there. And then with the new factories coming on, it's allowed us an opportunity to take a step back and look at the overall supply base, how we're contracting, and we've made some changes there that we should start to see come through here in the second half. But good visibility to what's going on there. The team understands it. Just working through a little bit of a perfect storm here that seems to be abating.

Stephen Gengaro: Very good. Thank you.

Stephen David Gengaro: Very good, Thank you.

Operator: And our next question coming from the line of David Anderson with Barclays, Yolanda Sullivan.

Operator: And our next question coming from the line of David Anderson with Barclays. Your line is open.

Speaker 6: And our next question coming from the line up, David andenderson, with berkeclay, you let us open.

David Anderson: Hey, good morning, Lorenzo. So, question on the global push to build out LNG capacity. I had heard anecdotally it was a minimum of four years to bring a new train from start to finish. But you're talking about Plaquemines in closer to 29 months. You're talking about modular design. Is this the new standard that we should be thinking about these projects? And I guess related to that, is there a limit to how much equipment you can provide in a given year in terms of your manufacturing capacity if these projects are accelerated?

J. David Anderson: Hey. Good morning Lorenzo. So, a question on the global push to build out LNG capacity, I had heard anecdotally it was a minimum of 4 years to bring a new train on, start to finish. But you are talking about Plaquemines closer to 29 months, you talk some modular design. Is this the new standard that we should be thinking about these projects? And I guess related to that, is there a limit to how much equipment you can provide in a given year in terms of your manufacturing capacity if these projects are accelerated?

Lorenzo Simonelli: So, question on the global push to build out LNG capacity. I had heard anecdotally it was a minimum of four years to bring a new train from start to finish. But you're talking about Plaquemines in closer to 29 months. You're talking about modular design. Is this the new standard that we should be thinking about these projects? And I guess related to that, is there a limit to how much equipment you can provide in a given year in terms of your manufacturing capacity if these projects are accelerated? Yeah, Dave, and I think you have to go back to the tenure we've had in the LNG cycle, and we've always said that there's going to be small scale, mid-scale, large scale, and we're going to be participating in all of those and also looking at modular as well as stick-built.

Speaker 7: Mor as also question: what will push to build out L N G capacity have ability of the minimum four years to bring a new train on start're tal abouttalking into the cloar to 29 month modular design? Is this the new standard that we should be thinking about? These projects and I guess related to that is a limit to how much equipment you can provide a given year in terms of your manufacturing capacity. If these projects are accelorryyes Dave, then I think you have to go back to the 10 URE we've had in the ln G cycle and we've always said that there's going to be small scale, mid scale, large scale and we're going to be participating in all of those and also looking at modular as well as stick build, depending on the customers' needs. We're going to be providing them. Clearly the modular is a fastter with the market. It is a plug and play model. So we're seeing increased interest from some of the independent players and I'd say also within North America.

Speaker 5: Bring new train on tostart to finish, but your time- time' talking me- ANS closer to 29 months. Its modular design: is this the new sstandard that we should be thinking about? These projects and I guess related to that, is there a limit to how much equipment you can provide a given year in terms of your manufacturing capacity if these projects are accelerated?

Lorenzo Simonelli: Yeah, Dave, and I think you have to go back to the tenure we've had in the LNG cycle, and we've always said that there's going to be small scale, mid-scale, large scale, and we're going to be participating in all of those and also looking at modular as well as stick-built. And depending on the customer's needs, we're going to be providing them. Clearly, the modular is a faster-to-market. It is a plug-and-play model. So we're seeing increased interest from some of the independent players, and I'd say also within North America.

Lorenzo Simonelli: Yes, Dave. And I think you have to go back to the tenure we have had in the LNG cycle. And we have always said that there is going to be small-scale, mid-scale, large-scale, and we are going to be participating in all of those and also looking at modular as well as stick build. And depending on the customers’ needs, we are going to be providing them. Clearly, the modular is faster to market. It is a plug-and-play model. So, we are seeing increased interest from some of the independent players, and I would say also within North America. Globally with some of the larger projects, they still continue on the stick build. We don’t have a challenge on capacity. Again, we have had big flows of LNG projects in the past, and we feel good about being able to manage it. And our facilities that are set up in Florence and Massa and Avenza in Italy, are well prepared for the LNG project wave.

Lorenzo Simonelli: And depending on the customer's needs, we're going to be providing them. Clearly, the modular is a faster-to-market. It is a plug-and-play model. So we're seeing increased interest from some of the independent players, and I'd say also within North America. Globally, with some of the larger projects, they still continue on the stick-built. We don't have a challenge on capacity. Again, we've had big flows of LNG projects in the past, and we feel good about being able to manage it. And our facilities that are set up in Florence, Massa, and Avenza in Italy are well prepared for the LNG project wave. So if we think about the US build-out of export capacity, are there any other kind of areas where you think there are bottlenecks that need to be freed up?

Globally, with some of the larger projects, they still continue on the stick-built. We don't have a challenge on capacity. Again, we've had big flows of LNG projects in the past, and we feel good about being able to manage it. And our facilities that are set up in Florence, Massa, and Avenza in Italy are well prepared for the LNG project wave.

Speaker 4: Globally. With some of the larger projects they still continue on the stick built. We don't have a challenge on capacity again. We've had big flows of L N G projects in the past and we feel good about being able to manage it and facilities that are set up in florence and massa and events in Italy well prepared for the L? N G project w. So if we think about the? U's build out export capacity, what? Are there any other kind of areas where you think there botlenes that need to be freed up? Would you expect most of the awards going forward to in this modular category? Just curious how you think about that kind. Supply to you're just one part of the course. I'm just wondering, looking at the rest of that, other other areas that are at botlenes that could be to speed up or slow on the projects. I think the area that people are looking at and also reacting to is on the E P C side and that's one of the areas that I think it's a focus right now.

David Anderson: So if we think about the US build-out of export capacity, are there any other kind of areas where you think there are bottlenecks that need to be freed up? Would you expect most of the awards going forward to be in this modular category? Just curious how you think about that kind of supply chain. You're just one part of it, of course. I'm just wondering, looking at the rest of that, are there other areas that are bottlenecks that could either speed up or slow down these projects?

J. David Anderson: So, if we think about the U.S. build-out of export capacity, what are – are there any other kind of areas where you think there are bottlenecks that need to be freed up? Would you expect most of the awards going forward to be in this modular category? Just curious how you think about that kind of supply. You are just one part of it, of course. So, I am just wondering, looking out the rest of that, are there other areas that are at bottlenecks that could either speed up or slowdown these projects?

Lorenzo Simonelli: Would you expect most of the awards going forward to be in this modular category? Just curious how you think about that kind of supply chain. You're just one part of it, of course. I'm just wondering, looking at the rest of that, are there other areas that are bottlenecks that could either speed up or slow down these projects? I think the area that people are looking at and also reacting to is on the EPC side, and that's one of the areas that I think is a focus right now. I'd say also the modular approach reduces some of the dependence on the full aspect of EPCs, and so it's a faster approach from that perspective. But labor continues to be constrained, and so that's something that's being looked at. Great. Thank you.

Lorenzo Simonelli: I think the area that people are looking at and also reacting to is on the EPC side, and that's one of the areas that I think is a focus right now. I'd say also the modular approach reduces some of the dependence on the full aspect of EPCs, and so it's a faster approach from that perspective. But labor continues to be constrained, and so that's something that's being looked at.

Lorenzo Simonelli: I think the area that people are looking at and also reacting to is on the EPC side. And that’s one of the areas that I think is a focus right now. I would say also the modular approach reduces some of the dependence on the full aspect of EPCs. And so it’s a faster approach from that perspective. But labor continues to be constrained. And so that’s something that’s being looked at.

Speaker 4: I'd say also, the modular approach reduces some of the dependence on the full aspect of epcs, And so it's a faster approach from that respectctive, but the labor continues to be constrained And so that's something that's being looked at, okyou.

David Anderson: Great. Thank you.

J. David Anderson: Good. Thank you.

Operator: And our next question is coming from the line of Roger Read with Wells Fargo. Your line is open.

Speaker 6: Our next question, coming from the line of Roger Reed with mortwell's bargo on, is openpopen.

Lorenzo Simonelli: Our next question coming from the line of Roger Read with Wells Fargo, Yolanda Sullivan. Yes, thank you. Good morning. How are you? Good. Hey, Roger. Just a couple of quick questions. The first one is you've made the comment about supply chain easing up as the year goes on. I understand chemicals are a little different than some of the others. But as we think of some of the pieces that will go into these LNG orders, some of the issues going over in China, is there any risk of that affecting? Hey, Roger, I'll go ahead. You cut off there a little bit, but on. Sorry. That's all right. On supply chain, it tends to be challenging, and obviously, with everything going on in the global geopolitical space, it's been a little more challenging.

Operator: Our next question coming from the line of Roger Read with Wells Fargo, Yolanda Sullivan.

Speaker 1: With mwell's bargo you on slopen.

Roger Read: Yes, thank you. Good morning. How are you?

Roger Read: Yes. Thank you. Good morning. How are you?

Lorenzo Simonelli: Good.

Brian Worrell: Hey, Roger.

Roger Read: Just a couple of quick questions. The first one is you've made the comment about supply chain easing up as the year goes on. I understand chemicals are a little different than some of the others. But as we think of some of the pieces that will go into these LNG orders, some of the issues going over in China, is there any risk of that affecting?

Speaker 11: Yes Thank you. Good, Mor than how are you? Just a couple of quick questions. The first 1, as you made the comment about supply chain easing up as a year goes on, and understand chemicals a little different than some of the others, But as we think of some of the pieces that will go into these LNG orders, some of the issues going over in china- is there any risk of that affecting?

Roger Read: Just a couple of quick questions. The first one is you made the comment about supply chain easing up as the year goes on, and understand chemical is a little different than some of the others. But as we think of some of the pieces that will go into these LNG orders, some of the issues going over in China, is there any risk of that affecting?

Brian Worrell: Hey, Roger, I'll go ahead. You cut off there a little bit, but on.

Multiple speakers: [Lorenzo Simonelli] Hey Roger, I will go ahead. You cut off there a little bit. But on -- [Roger Read] Sorry. [Lorenzo Simonelli] That’s alright. On supply chain, it tends to be challenging. And obviously, with everything going on in the global geopolitical space, it’s been a little more challenging. But look, I would say from how it impacts us and how we are dealing with it, we are managing the price increases in various metals like copper and steel and nickel. There is no supply issue, it’s just managing through those pricing. And you can imagine that, that’s going into our quotes. And to deal with all of this, we have taken down the timing and validity of our quotes to be able to deal with this. So, customers know what’s going on, and they can have good visibility into what the cost of these projects are going to be. Look, from a castings and forgings standpoint, we are still able to get supply. We are dealing with scarcity in Europe and higher pricing there. So, we are seeing – what we are doing with our customers, our suppliers are doing as well, with quotes are only valid for a shorter period of time given the raw material pricing and the unique energy challenges in Europe. But look, that’s the beauty of being part of a global company like Baker Hughes. I mean we have been able to shift supply into China. We focused on Northwest China to be able to deal with some of the port issues and things we are seeing in COVID. We had really good experience there. We have also moved some supply to Mexico and India. So, we are able to pivot because we have got a large supply base and can direct that demand to different places. So, we feel good about what we are doing there on supply chain. We expect to see some stabilization come through, but have a great sourcing team, working with the projects team to make sure we can fulfill on the demand that we see coming through. From a logistics standpoint, I would say the team has done an outstanding job of managing that. Our inflation we have seen in logistics is well below the headline prices that you have seen. We have changed ports that we are using in North America and China. So, we have been incredibly reactive here. I don’t see it being a big constraint today for the LNG cycle that we are seeing, but that’s something that we will have to watch as it evolves.

Speaker 6: Y drive, go ahead. You cut off there a little, but you know, on orry, that's all right. On supply chain, it tends to be you youknow, challenging and obviously, with everything going on in the global, you know, geopolitical space, it's been, it's been a little more challengge. But look, I'd say, from how it, how it impacts us and how we're dealing with it, we're managing, you know know, the price increases in various metals like copper and steel and nickel. There's, there's no supply issue, just managing through those pricing and you can imaginethat that's going into our quotes and to deal with all of this, we have taken down the- you know timing and validity of our quotes to be able to to deal with this. So So customers know what's going on and they can have good visibility into what the cost of these projects are going to be. Look, from a casting and forging standpoint, still able to get, you know, supply we're dealing with.

Roger Read: Sorry.

Brian Worrell: That's all right. On supply chain, it tends to be challenging, and obviously, with everything going on in the global geopolitical space, it's been a little more challenging. But look, I'd say from how it impacts us and how we're dealing with it, we're managing the price increases in various metals like copper, steel, and nickel. There's no supply issue. It's just managing through those pricing. And you can imagine that that's going into our quotes. And to deal with all of this, we have taken down the timing and validity of our quotes to be able to deal with this so customers know what's going on and they can have good visibility into what the cost of these projects are going to be. Look, from a castings and forging standpoint, still able to get supply. We're dealing with some scarcity in Europe and higher pricing there.

Lorenzo Simonelli: But look, I'd say from how it impacts us and how we're dealing with it, we're managing the price increases in various metals like copper, steel, and nickel. There's no supply issue. It's just managing through those pricing. And you can imagine that that's going into our quotes. And to deal with all of this, we have taken down the timing and validity of our quotes to be able to deal with this so customers know what's going on and they can have good visibility into what the cost of these projects are going to be. Look, from a castings and forging standpoint, still able to get supply. We're dealing with some scarcity in Europe and higher pricing there.

Lorenzo Simonelli: So we're seeing what we're doing with our customers. Our suppliers are doing as well, with quotes only valid for a shorter period of time given the raw material pricing and the unique energy challenges in Europe. But look, that's the beauty of being part of a global company like Baker Hughes. I mean, we've been able to shift supply into China. We focused on Northwest China to be able to deal with some of the port issues and things we're seeing in COVID. We had really good experience there. We've also moved some supply to Mexico and India. So we are able to pivot because we've got a large supply base and can direct that demand to different places. So we feel good about what we're doing there on supply chain.

So we're seeing what we're doing with our customers. Our suppliers are doing as well, with quotes only valid for a shorter period of time given the raw material pricing and the unique energy challenges in Europe. But look, that's the beauty of being part of a global company like Baker Hughes. I mean, we've been able to shift supply into China. We focused on Northwest China to be able to deal with some of the port issues and things we're seeing in COVID. We had really good experience there. We've also moved some supply to Mexico and India. So we are able to pivot because we've got a large supply base and can direct that demand to different places. So we feel good about what we're doing there on supply chain.

Speaker 5: Scarcity in Europe and higher pricing there. So we're seeing what we're doing with our customers. Our suppliers are doing as well, with quotes are only valid for a shorter period of time, given the raw material pricing and the unique energy challenges in Europe . But look, that's the beauty of being part of a global company like Baker hues. I mean, we've been able to shif supply into China. We focused on Northwest China to be able to deal with some of the court issues and things we're seeing in coin. We had really good experience there. We've also moved some supply to Mexico and India So we are able to pivot because we've got a large supply base and can directt that demand to different places. So we feel good about what we're doing there. On supply chain, we expect to see some stabilization come through, but have a great sourcing team working with the projects team to make sure we can fulfill on the demand that we see coming through. From a logistics standpoint, I'd say the team has done an outstanding job of managing that. Our inflation we've seen in logistics is well below the headline.

Lorenzo Simonelli: We expect to see some stabilization come through, but have a great sourcing team working with the projects team to make sure we can fulfill on the demand that we see coming through. From a logistics standpoint, I'd say the team has done an outstanding job of managing that. Our inflation we've seen in logistics is well below the headline prices that you've seen. We've changed ports that we're using in North America and China. So we've been incredibly reactive here. I don't see it being a big constraint today for the LNG cycle that we're seeing, but that's something that we'll have to watch as it evolves. Okay. Great. Thanks. And then the follow-up is we think about just we had one of your competitors yesterday talk about exceptional tightness in North America.

We expect to see some stabilization come through, but have a great sourcing team working with the projects team to make sure we can fulfill on the demand that we see coming through. From a logistics standpoint, I'd say the team has done an outstanding job of managing that. Our inflation we've seen in logistics is well below the headline prices that you've seen. We've changed ports that we're using in North America and China. So we've been incredibly reactive here. I don't see it being a big constraint today for the LNG cycle that we're seeing, but that's something that we'll have to watch as it evolves.

Speaker 5: Prices that you've seen. We've changed ports that we're using in North America and China, So we've been incredibly reactive here. I don't see it being a big constraint today for the LNG cycle that we're seeing, but that's something that we'll have to watch as it evolves.

Roger Read: Okay. Great. Thanks. And then the follow-up is we think about just we had one of your competitors yesterday talk about exceptional tightness in North America. I was just curious your view on availability of equipment, labor, etc., as we think about the international markets ramping up and at what point you would see significant tightness really helping out on the pricing side there. I understand things should get better as this year goes along given the guidance, but where we could see things get very, very good on the OFS and OFE sides.

Multiple speakers: [Roger Read] Okay, great. Thanks. And then the follow-up, as we think about just – we had one of your competitors yesterday talk about exceptional tightness in North America. I was just curious your view on availability and – of equipment, labor, et cetera, as we think about the international markets ramping up and at what point you would see significant tightness really helping out on the pricing side there. I understand things should get better as this year goes along, given the guidance, but where we could see things get very, very good on the OFS and OFE sides. [Brian Worrell] Yes. Look, I would say broadly, tightness you are seeing outside of the U.S., it’s similar to what you are seeing inside of North America, some labor tightness around the globe in some markets, not as much as you are seeing in North America. And look, just given the overall increase in activity, you are seeing tightness in supply of equipment. I think we have all got capability or I know we have got capability to ramp up and have been planning on that. But – but look, when you have got demand up as much as you are seeing in North America and globally, general economic tendencies come back into play and you start to see the ability to have more constructive pricing discussions, deal with some of those supply/demand issues. And I would say the international market, as you know, is more longer term contract base versus spot market like you see in North America. Where you see some real opportunity here is on some of that spot business, and I would say we are being very constructive with our customers, taking into account what we are seeing on the supply chain, what we are seeing in overall demand, and it’s a constructive backdrop for OFS at the moment.

Speaker 11: Ok great thanks. And then the follow up is: we think about just. You know we had one of your competitors yesterday talk about exceptional tightness in North America. I was just curious your view on availability and of equipment, labor et cetera, as we think about the international markets ramping up and at what point you would see, you know, significant tightness really helping out on the pricing side. There I understand things you get better is this year goes along, given the guidness. But you know what we could see things get very, very good on the L, F's and o F side. yeah look, I'd say broadly tightness you're seeing outside of the. It's similar what you're seeing inside in North America. You know some some labor tightness you know around the the globe in some markets, not as much as you're seeing in North America. And look just, given the overall increase in activity, you are are seeing tightness in supply of equipment. I think we've all got capability. I know we'vegot.

Lorenzo Simonelli: I was just curious your view on availability of equipment, labor, etc., as we think about the international markets ramping up and at what point you would see significant tightness really helping out on the pricing side there. I understand things should get better as this year goes along given the guidance, but where we could see things get very, very good on the OFS and OFE sides. Yeah. Look, I'd say broadly, tightness you're seeing outside of the US. It's similar to what you're seeing inside of North America, some labor tightness around the globe in some markets, not as much as you're seeing in North America. And look, just given the overall increase in activity, you are seeing tightness in supply of equipment. I think we've all got capability. I know we've got capability to ramp up and have been planning on that.

Lorenzo Simonelli: Yeah. Look, I'd say broadly, tightness you're seeing outside of the US. It's similar to what you're seeing inside of North America, some labor tightness around the globe in some markets, not as much as you're seeing in North America. And look, just given the overall increase in activity, you are seeing tightness in supply of equipment. I think we've all got capability. I know we've got capability to ramp up and have been planning on that.

Lorenzo Simonelli: But look, when you've got demand up as much as you're seeing in North America and globally, general economic tendencies come back into play, and you start to see the ability to have more constructive pricing discussions, deal with some of those supply-demand issues. And I'd say the international market, as you know, is more longer-term contract-based versus spot market like you see in North America, where you see some real opportunity here is on some of that spot business. And I'd say we're being very constructive with our customers, taking into account what we're seeing on the supply chain, what we're seeing in overall demand. And it's a constructive backdrop for OFS at the moment. Great. Thank you. And I'm showing no further questions at this time. I would now like to turn the call back over to Lorenzo Simonelli for any closing remarks. Yeah. Thank you very much.

Brian Worrell: But look, when you've got demand up as much as you're seeing in North America and globally, general economic tendencies come back into play, and you start to see the ability to have more constructive pricing discussions, deal with some of those supply-demand issues. And I'd say the international market, as you know, is more longer-term contract-based versus spot market like you see in North America, where you see some real opportunity here is on some of that spot business. And I'd say we're being very constructive with our customers, taking into account what we're seeing on the supply chain, what we're seeing in overall demand. And it's a constructive backdrop for OFS at the moment.

Roger Read: Great. Thank you.

Operator: And I'm showing no further questions at this time. I would now like to turn the call back over to Lorenzo Simonelli for any closing remarks.

Operator: And I am showing no further questions at this time. I would now like to turn the call back over to Lorenzo Simonelli for any closing remarks.

Lorenzo Simonelli: Yeah. Thank you very much. Thank you to everyone for joining our earnings call today. Just before we end the call, I wanted to leave you with some closing thoughts. Despite some of the challenges this quarter, we are optimistic on the outlook across both of our core business areas and excited about the new energy investments we're making for Baker Hughes.

Lorenzo Simonelli: Yes. Thank you very much, and thank you to everyone for joining our earnings call today. Just before we end the call, I wanted to leave you with some closing thoughts. Despite some of the challenges this quarter, 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 our upstream oil and gas businesses are poised to capitalize on a strong multiyear recovery, while our industrial businesses are poised to benefit from a strong LNG cycle, growth in new energy orders and the development of our industrial asset management capabilities. While we benefit from these macro tailwinds, we expect to generate strong free cash flow and return 60% to 80% of it back to shareholders. So, thanks for taking the time. We look forward to speaking to you all again soon. And operator, you may close out the call.

Lorenzo Simonelli: Thank you to everyone for joining our earnings call today. Just before we end the call, I wanted to leave you with some closing thoughts. Despite some of the challenges this quarter, we are optimistic on the outlook across both of our core business areas and excited about the new energy investments we're making for Baker Hughes. We believe that our upstream oil and gas businesses are poised to capitalize on a strong multi-year recovery while our industrial businesses are poised to benefit from a strong LNG cycle, growth in new energy orders, and the development of our industrial asset management capabilities. While we benefit from these macro tailwinds, we expect to generate strong free cash flow and return 60% to 80% of it back to shareholders. Thanks for taking the time. Look forward to speaking to you all again soon.

Speaker 2: To turn the call back over to loren. So some elo foriny closing remarks.

Speaker 4: Yes Thank you very much, and thank you to everyone for joining our earnings call today. Just before we end the call wanted to leave you with some closing forts. Despite some of the challenges this quarter, we are optimistic on the outlook across both of our core business areas and excited about the new energy investments we're making for bakic usewe believe that our upstream oil and gas businesses are poised to capitalize on our strong multiyear recovery, while our industrial businesses are poised to benefit from a strong LNG cycle growth in new energy orders, in the development of our industrial asset management capabilitieswhile we benefit from these macroteil windins, we expect to generate strong free cash flow and return 60 per to 80% of it back to shareholders. So thanks for taking the time. Look forward to speaking to you all again soon. And operator, you may close out the call.

We believe that our upstream oil and gas businesses are poised to capitalize on a strong multi-year recovery while our industrial businesses are poised to benefit from a strong LNG cycle, growth in new energy orders, and the development of our industrial asset management capabilities. While we benefit from these macro tailwinds, we expect to generate strong free cash flow and return 60% to 80% of it back to shareholders. Thanks for taking the time. Look forward to speaking to you all again soon. Operator, you may close out the call.

Lorenzo Simonelli: Operator, you may close out the call. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating in today's conference. You may all disconnect. Good day, ladies and gentlemen, and welcome to the Baker Hughes Company First Quarter 2022 Earnings Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Judd Bailey, Vice President of Investor Relations. Sir, you may begin. Thank you. Good morning, everyone, and welcome to the Baker Hughes First Quarter 2022 Earnings Conference Call.

Operator: Ladies and gentlemen, that does conclude our conference for today. Thank you for participating in today's conference. You may all disconnect.

Operator: Ladies and gentlemen, that does conclude our conference for today. Thank you for participating in today’s conference. You may all disconnect.

Speaker 2: Please and gentlemen afr, in call conference for today. Thank you for participating in today's conference. You may all disconnect.

Speaker 1: You may all disconnect.

Lorenzo Simonelli: Good day, ladies and gentlemen, and welcome to the Baker Hughes Company First Quarter 2022 Earnings Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Judd Bailey, Vice President of Investor Relations. Sir, you may begin. Thank you. Good morning, everyone, and welcome to the Baker Hughes First Quarter 2022 Earnings Conference Call.

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Speaker 44: Good day, Ladies and gentlemen, and welcome to the Baker Hughes company. First quarter 2022 earnings conference call.

Speaker 2: Good day, Ladies and gentlemen, and welcome to the Baker Hughes company. First quarter 2022 earnings conference call.

Speaker 1: At this time. All participants are in the listen. onlylimode later we will conduct a question-and-answer session and instructful by that time.

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Speaker 1: As a min, this conference call being recorded.

Speaker 1: I would now like to introduce your host, today's conference.

Speaker 2: As a remindor, this conference call being recorded, I would now like to introduce your host of today's conference, M it judge Bailey, Vice President of Investor Relations. Sir, you may begin.

Speaker 1: Is a Jud dailey Vice President of Investor Relations.

Speaker 1: Sorry may begin.

Speaker 2: Thank you. Good morning everyone and welcome to the Baker Hughes first quarter 2022 earnings conference call here with me, ER Chairman and CEO lorenza simminineelli, and our cefo Brian ol. The earnings release we issued earlier today can be found at our website at Aker Hughes Com.

Lorenzo Simonelli: Here with me are our Chairman and CEO, Lorenzo Simonelli, and our CFO, Brian Worrell. The earnings release we issued earlier today can be found at our website at bakerhughes.com. As a reminder, during the course of this conference call, we will provide forward-looking statements. These statements are not guarantees of future performance, and involve a number of risks and assumptions. Please review our SEC filings and website for a discussion of the factors that could cause actual results to differ materially. As you know, reconciliations of operating income and other GAAP and non-GAAP measures can be found in our earnings release. With that, I will turn the call over to Lorenzo. Thank you, Judd. Good morning, everyone, and thanks for joining us. Our first quarter results reflect operating in a very volatile market environment during the first few months of 2022.

Speaker 3: Thank you, good morning everyone and welcome to the Baker hughessfirst quarter 2022 earnings conference call, here with me, our Chairman and CEO , Lorenzo simminelli, and our CFO , Brian orlthe earnings release we issued earlier today can be found at our website at Baker Hughes Com, as a reminder. During the course of this conce call, we will provide forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and website for a discussion of the factors that could cause actual results to differ materially. As you know, reconciliations of operating income and other GAAP and non-gaapmeasures can be found in our earnings release. With that, I will turn the call over to Lorenzo.

Speaker 2: As a reminder, during the course of this conference call we will provide forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Please review our SEC filings and a website for a discussion of the factors that could cause actual results to differ materially. As you know, reconciliations of operating income and other GAAP and non-GAAP measures can be found in our earnings release. With that, I will turn the call over to Lorenzo.

Speaker 3: Thank you, judd. Good morning everyone and thanks for joining us. Our first quarter results reflect operating in a very volatile market environment during the first few months of 2022. on the positive side, TPS orders were up over 100% year-over-year, with TPS book to Bill of two point two as the LNG order cycle continues to unfoldwe also experienced some challenges in parts of our business due to continued pressures from broader global supply chain constraints that were as some impact from the recent geopolitical events.

Speaker 4: Thank you, judd. Good morning everyone and thanks for joining us. Our first quarter results reflect operating in a very volatile market environment during the first few months of 2022. on the positive side, TPS orders were up over 100% year-over-year, with TPS book to Bill of two point two as the LNG ordder cycle continues to unfold.we also experienced some challenges in parts of our business due to continued pressures from broader global supply chain constraints, as well as some impact from the recent geopolitical events.

Lorenzo Simonelli: On the positive side, TPS orders were up over 100% year-over-year, with TPS book to bill of 2.2 as the LNG order cycle continues to unfold. We also experienced some challenges in parts of our business due to continued pressures from broader global supply chain constraints, as well as some impact from the recent geopolitical events. As we look ahead to the rest of 2022, we see a favorable oil and gas price backdrop, as well as a dynamic operating environment with perhaps the most challenging supply chain and inflationary environment we have seen in several decades. The recent and unfortunate geopolitical events are amplifying several trends, including broad-based inflation and supply pressure for key materials, commodities, and labor.

Speaker 4: As we look ahead to the rest of 2022 we see a favorable oil and gas price backdrop as well as a dynamic operating environment with perhaps the most challenging supply chain and inflationary environment we have seen in several decades. The recent and unfortunate geopolitical events are amplifying several trends including broad-based inflation and supply pressure for key materials. Commodities and labor dividends are also driving changes on the economic front wherether. While this transitioning from an era of strong economic growth to an environment that is more tenuous and likely to feature diverging economic conditions regionally.

Lorenzo Simonelli: These events are also driving changes on the economic front, where the world is transitioning from an era of strong economic growth to an environment that is more tenuous and likely to feature diverging economic conditions regionally. Despite broader political uncertainty around the world, Baker Hughes is committed to helping deliver energy globally in a safe, clean, and reliable manner, while also maintaining our commitment to net-zero carbon emissions and leadership in the energy transition. To meet the world's energy needs in a responsible manner, we believe multiple years of spending growth will be required, as well as a significant increase in LNG infrastructure investment. While there is some near-term risk on the demand side, we expect global oil and gas supply to remain constrained in the coming years, which should support higher commodity prices and multiple years of spending growth from our customers.

Speaker 21: Despite broader political uncertainty around the world, Baker hugh committed to helping deliver energy globally in a safe, clean and reliable manner, while also maintaining our commitment to net zero carbon emissions and leadership in the energy transition.

Speaker 4: Despite broader political uncertainty around the world, Baker huuses committed to helping deliver energy globally in a safe, clean and reliable manner, while also maintaining our commitment to net zero carbon emissions and leadership in the energy transition. To meet the world's energy needs in a responsible manner, we believe multiple years of spending growth will be required, as well as significant increase in lngy infrastructure investment.

Speaker 6: While there is some near-term risk on the demand side, we expect global oil and gas supply to remain constrained in the coming years, which should support higher commodity prices and multiple years of spending growth from our customers.

Lorenzo Simonelli: Recent geopolitical events have severely constrained what was already a tight global natural gas market and have refocused the world on the importance of energy security, diversity, and reliability. As the world reacts to the rapid changes in the global commodity market, governments are prioritizing natural gas and LNG as a key transition and destination fuel. We continue to see a focus on prioritizing LNG from stable, lower-cost markets and locations that can provide cleaner LNG. Given the current LNG price environment and the quickly changing dynamics, we believe that global LNG capacity will likely exceed 800 MTPA by the end of this decade to meet growing demand forecasts. This compares to the current global installed base of 460 MTPA and projects under construction totaling almost 150 MTPA. In order to be operational by 2030, this additional capacity will need to reach FID by around 2025.

Speaker 8: Recent geopolitical events have severely constrained what was already a tight global natural gas market and have refocused the world on the importance of energy security, diversity and reliability. As the world reacts to the rapid changes in the global commodity market, governments are prioritizing natural gas and LNG as a key transition and destination fuel.

Speaker 4: Recent geopolitical events have severely constrained what was already a tight global natural gas market and have refocused the world on the importance of LNG security, diversity and reliabilityas the world reacts to the rapid changes in the global commodity market, governments are prioritizing natural gas and LNG has a key transition and destination fuelwe continue to see a focus on prioritizing LNG from stable, lower cost markets and locations that can provide cleaner lnggiven the current LNG price environment and the quickly changing dynamics, we believe that global LNG capacity will likely exceed 800 MTPA by the end of this decade to meet growing demand forecastthis compares to the current global installed base of 460 MTPA and projects under construction totaling almost 150 mtpain order to be operational by two thousandy 30, this additional capacity will need to reach FID by around two thousand and Y five.

Speaker 4: We continue to see a focus on prioritizing LNG from stable, lower cost markets and locations that can provide cleaner LNG.

Speaker 6: Given the current LNG price environment and the quickly changing dynamics, we believe that global LNG capacity will likely exceed 800 MTPA by the end of this decade to meet growing demand forecast. This compares to the current global installed base of 460 MTPA and projects under construction totaling almost 150 MTPA.

Speaker 6: In order to be operational by 2030 this additional capacity will need to reach FID by around two million and twenty-five and.

Speaker 21: Despite the volatile yet improving medium-term macro environment, Baker Hughes remains focused on executing our strategy and we continue to drive further optimization across the two core business areas of osse and it.

Lorenzo Simonelli: Despite the volatile yet improving medium-term macro environment, Baker Hughes remains focused on executing our strategy, and we continue to drive further optimization across the two core business areas of OFSE and IET. Earlier this year, we created Climate Technology Solutions, or CTS, and Industrial Asset Management, or IAM. The creation of these two groups is critical to accelerating the speed of commercial development across our key growth areas of new energy frontiers and industrials. We continue to make steady progress in developing our Climate Technology Solutions capabilities with recent investments and partnerships in NET Power, HIF Global, and the acquisition of Mosaic Materials, which features a promising direct air capture technology. Mosaic's material science and technical expertise, including their unique metal-organic framework technology, provides Baker Hughes with the potential to efficiently capture low concentrations of CO2 across a number of applications.

Speaker 9: Earlier this year we created climate technology solutions, or CTS, and industrial asset management, or am. The creation of these two groups is critical to accelerating the speed of commercial development across our key growth areas of new energy frontiers and industrials.

Speaker 4: We continue to make steady progress in developing our climate technology solutions capabilities, with recent investments and partnerships in net power, hif global and the acquisition of mosaic materials, which features a promising direct air capture technology. Mosaic's material science and technical expertise, including their unique metal-organic framework technology, provides Baker huuse with the potential to efficiently capture low concentrations of co two across a number of applications.

Speaker 4: Unique metalorganic framework technology provides Baker hues with the potential to efficiently capture low concentrations of co two across a number of applicationsnet power is an emission-free gas to power technology where Baker hues will develop supercritical co two turic fanders and other critical pumping and compression technology.

Lorenzo Simonelli: NetPower is an emission-free gas-to-power technology where Baker Hughes will develop supercritical CO2 turboexpanders and other critical pumping and compression technology. We will also bring system integration and process knowledge experience to the partnership to help accelerate the market positioning and deployment of NetPower's emission-free and low-cost electric power. HIF Global develops projects in multiple geographies to produce e-fuels by blending green hydrogen and CO2. Baker Hughes is investing alongside EIG, Porsche, AME, and Gemstone and will provide compressors, turbines, pumps, valves, and other technology on future projects. We are also discussing how our recently acquired Mosaic Materials DAC technology could be incorporated into these future projects. Overall, we're excited about adding another carbon capture technology to our portfolio and the potential of these two partnerships to open new market opportunities in clean power and low-carbon fuels for Baker Hughes.

Speaker 6: Net power is an emission-free gas to power technology where Baker Hughes will develop super-critical co two turboic fanders and other critical pumping and compression technology.

Speaker 6: Hf global develops projects in multiple geographies to produce E fuels by blending green hydrogen and Co. twobaker hues is investing alongside eig porsche, amme and gemstone and will provide compressors turbines, pumps.

Speaker 4: Hf global develops projects in multiple geographies to produce E fuels by blending green hydrogen and Co. twobaker hues is investing alongside eig porsche, amme and gemstone and will provide compressors turbines, pumpsvalves and other technology on future projects.

Speaker 6: Valves and other technology on future projects.

Speaker 4: We are also discussing how our recently acquired mosaic materials, the AC technology, could be incorporated into these future projects.

Speaker 4: We are also discussing how our recently acquired mosaic materials theac technology could be incorporated into these's future projects. Overall, we're excited about adding another carbon caps technology to our portfolio and the potential of these two partnerships to open new market opportunities in clean power and low carbon fuels for Baker usein industrial asset management. We signed an important agreement with exaccenture, cfi and Microsoft to collaborate on the buildout of the am solutions offering. The partnership will focus on creating and deploying Baker use am solutions that use digital technologies to help improve the safety, efficiency and emissions profile of industrial machines, fuel equipment and other physical assets.

Speaker 6: Overall we're excited about adding another carbon capture technology to our portfolio and the potential of these two partnerships to open new market opportunities in clean power and low carbon fuel for Baker hu.

Speaker 4: In industrial asset management. We signed an important agreement with exaccenture, cfi and Microsoft to collaborate on the buildout of the am solutions offering. The partnership will focus on creating and deploying Baker use am solutions that use digital technologies to help improve the safety, efficiency and emissions profile of industrial machines, field equipment and other physical assets.

Lorenzo Simonelli: In Industrial Asset Management, we signed an important agreement with Accenture, C3 AI, and Microsoft to collaborate on the build-out of the IAM solutions offering. The partnership will focus on creating and deploying Baker Hughes' IAM solutions that use digital technologies to help improve the safety, efficiency, and emissions profile of industrial machines, field equipment, and other physical assets. In addition to advancing our commercial efforts in CTS and IAM, we also remain focused on optimizing our broader organizational structure under the core business areas of OFSE and IET. At the beginning of April, we took some steps to strengthen and better position oilfield services to more closely align our products, services, and solutions to the life cycle of the well and ultimately to what our customers require. OFS will move from a product line-oriented structure to a solutions-focused business centered around well construction, completions, intervention, and measurements, and production solutions.

Speaker 4: In addition to advancing our commercial efforts in CTS and iim, we also remain focused on optimizing our broader organizational structure under the core business areas of ose and it.

Speaker 4: In addition to advancing our commercial efforts in CTS and im, we also remain focused on optimizing our broader organizational structure under the core business areas of ose and itat. The beginning of April we took some steps to strengthen and better position oilfield services, to more closely align our products, services and solutions to the life cycle of the wellalth and ultimately, to what our customers require.

Speaker 4: At the beginning of April , we took some steps to strengthen and better position oilfield services, to more closely align our products, services and solutions to the life cycle of the well and ultimately, to what our customers require.

Speaker 4: Os will move from a product line-oriented structure to a solutions-focused business centered around well construction completions, intervention and measurements, and production solutions.

Lorenzo Simonelli: In addition to the organizational changes in OFS, we were pleased to announce an agreement to acquire Altus Intervention, a leading international provider of well intervention services and downhole technology. The acquisition complements OFS's existing portfolio by enhancing our life-of-well capabilities as operators look to improve efficiencies from mature fields. Maria Claudia and the OFS team are enhancing their operating model to become more competitive, improve the speed of decision-making, and capitalize on growth opportunities in the market. These organizational changes are important steps in the OFS's journey as customers are increasingly asking for integrated offerings and more solutions-oriented outcomes, as well as a continuation of the strong productivity improvements in OFS over the past few years. As we continue to evolve Baker Hughes across the two business areas of OFSE and IET, we expect more meaningful synergy opportunities between TPS and DS.

Speaker 4: In addition to the organizational changes in Os, we were pleased to announce an agreement to acquire alis intervention, a leading international provider of well intervention services and downhold technology. The acquisition complements offto's existing portfolio by enhancing our life of well capabilities, as operators look to improve efficiencies from mature fields.

Speaker 4: In addition to the organizational changes in Os, we were pleased to announce an agreement to acquire alis intervention, a leading international provider of well intervention services and downho technology. The acquisition complements offto's existing portfolio by enhancing our life of well capabilities, as operators look to improve efficiencies from mature fields.

Speaker 4: Maria cloudy and the OFS team are enhancing their operating model to become more competitive, improve the speed of decision-making and capitalize on growth opportunities in the market.

Speaker 4: These organizational changes are important steps in the ifs's journey, as customers are increasingly asking for integrated offerings and more solutions-oriented outcomes, as well as a continuation of the strong productivity improvements in ifs over the past few years.

Speaker 4: These organizational changes are important steps in the ifs' journey, as customers are increasingly asking for integrated offerings and more solutions-oriented outcomes, as well as a continuation of the strong productivity improvements in Os over the past few yearsas we continue to evolve Baker use across the two business areas of osse and it, we expect more meaningful synergy opportunities between tpss and dss. We are also focused on driving better turns in our of business, as well as fervther synergies between Os and OFE.

Speaker 4: As we continue to evolve Baker use across the two business areas of ose and it, we expect more meaningful synergy opportunities between TPS and dss. We are also focused on driving better returns in our ose business as well as ferther synergies between Os and OFE.

Lorenzo Simonelli: We are also focused on driving better returns in our OFE business, as well as further synergies between OFS and OFE. Now I'll give you an update on each of our segments. In oilfield services, activity levels at the start of the year have continued to trend positively in both the international and North American markets. We also see improving visibility for stronger growth in several key areas over the rest of 2022. In the international markets, underlying activity is improving broadly, with particular strength in Southeast Asia, Latin America, and the Middle East. The uncertainty in Russia is an offset. We expect growth in most international markets to continue, with the strongest increases likely to come from the Middle East over the second half of the year and into 2023.

Speaker 4: Now I'll give you an update on each of our segments.

Speaker 4: In ofield services, activity levels at the start of the year have continued to trend positively in both the international and North American markets. We also see improving visibility for stronger growth in several key areas over the rest of 2020 -two.

Speaker 4: Now I'll give you an update on each of our segments in ofield services. Activity levels at the start of the year have continued to trend positively in both the international and North American markets. We also see improving visibility for stronger growth in several key areas over the rest of 2020 -two.

Speaker 4: In the international markets. Underlying activity is improving broadly, with particular strength in Southeast Asia, Latin America and the Middle East.

Speaker 4: In the international markets. Underlying activity is improving broadly, with particular strength in Southeast Asia, Latin America and the Middle East. The uncertainty in Russia is an offset.

Speaker 4: The uncertainty in Russia is an offset.

Speaker 6: We expect growth in most international markets to continue, with the strongest increases likely to come from the Middle East, over the second half of the year and into 2023. producers in the region are in the early stages of investing in capacity expansion and should help drive a multiyear increase in activity across the region.

Lorenzo Simonelli: Producers in the region are in the early stages of investing in capacity expansion and should help drive a multi-year increase in activity across the region. In North America, drilling and completion activity continues to move solidly higher, with further increases expected over the course of the year. Although current oil and gas prices would normally suggest a stronger increase in activity, the combination of E&P capital discipline and industry shortages in labor and equipment is likely to keep short-term incremental increases more moderate in nature. While we are pleased with the growth in activity and the growing pipeline of work in many regions, underlying operations continue to be impacted by supply chain and inflationary pressures, and most recently, disruption to our operations in Russia. Our OFS team is working extremely hard to offset these headwinds with price increases, sourcing actions, and a global team working to solve logistics constraints.

Speaker 6: While we are pleased with the growth in activity and the growing pipeline of work, in many regions, underlying operations continue to be impacted by supply chain and inflationary pressures and, most recently, disruption to our operations in Russia. Our offs team is working extremely hard to offset these headwinds with price increases, sourcing actions and a global team working to solve logistics constraints.

Speaker 4: While we are pleased with the growth in activity and the growing pipeline of work, in many regions, underlying operations continue to be impacted by supply chain and inflationary pressures and, most recently, disruption to our operations in Russia. Our offs team is working extremely hard to offset these headwinds with price increases, sourcing actions and a global team working to solve logistics constraints.

Lorenzo Simonelli: The product line that continues to feel the most supply chain-related pressure is our production chemicals business, where we have taken actions to enhance our sourcing and manufacturing functions. In addition to recently enacting a supply surcharge and changing out some of the leadership in our chemicals business, we are also taking steps to source and produce chemicals closer to key demand hubs, with the opening of our production chemicals facility in Singapore later this year and the recently announced JV with Dassault in Saudi Arabia. As we look over the balance of the year, we remain committed to achieving a 20% EBITDA margin by the fourth quarter. Moving to TPS, the first quarter represented a continuation of the successes we achieved in 2021. TPS orders totaled $3 billion for the second consecutive quarter, driven again by strong orders in LNG.

Speaker 4: The product line that continues to feel the most supply chain-related pressure is our production chemicals business.

Speaker 4: The product line that continues to feelel the most supply chain-related pressure is our production chemicals business, where we have taken actions to enhance our sourcing and manufacturing functions.

Speaker 4: Where we have taken actions to enhance our sourcing and manufacturing functions.

Speaker 8: As we look over the balance of the year, we remain committed to achieving a 20% EBITDA margin by the fourth quarter.

Speaker 4: As we look over the balance of the year, we remain committed to achieving a 20% EBITDA margin by the fourth quarter. Moving to TPS, the first quarter represented a continuation of the successes we achieved in 2021. TPS orders totaled $3 billion. For the second consecutive quarter, driven again by strong orders in LNG.

Speaker 7: Moving to TPS, the first quarter represented a continuation of the successes we achieved in 2021. ppps orders totaled $3 billion for the second consecutive quarter, driven again by strong orders in LNG.

Lorenzo Simonelli: We believe that we are at the beginning of another constructive LNG cycle, which is being expedited by the current geopolitical situation, particularly for US LNG projects. Our positive long-term view is also supported by the recent improvements in policy sentiment in certain parts of the world towards natural gas' role within the energy transition. The recent EU taxonomy changes to now include natural gas as a transition fuel is an example of this, and the added need to diversify and provide energy security will likely intensify policy efforts. As these market dynamics play out, a number of projects should accelerate, and we now believe that 100 to 150 MTPA of LNG FIDs will be authorized over the next two years, with additional FIDs becoming more likely in 2024 and 2025.

Speaker 6: We believe that we are at the beginning of another constructive LNG cycle, which is being expedited by the current geopolitical situation, particularly for U's LNG projects.

Speaker 4: We believe that we are at the beginning of another constructive LNG cycle, which is being expedited by the current geopolitical situation, particularly for U's LNG projects.

Speaker 8: Our positive long-term view is also supported by the recent improvements in policy sentiment in certaind parts of the world towards natural gas role within the energy transition.

Speaker 4: Our positive long-term view is also supported by the recent improvements in policy sentiment in sud parts of the world towards natural gas role within the energy transitionthe recent EU taxonomy changes to now include natural gas as a transition fuel as an example of this, and the added need to diversify and provide energy security will likely intensify policy efforts.

Speaker 4: The recent EU taxonomy changes to now include natural gas as a transition fuel as an example of this, and the added need to diversify and provide energy security will likely intensify policy efforts.

Speaker 8: As these market dynamics play out, a number of projects should accelerate and we now believe that 100 to 100 and fifty mtba of lngfids will be authorized over the next two years, with additional FIDs becoming more likely in 2020 -four and 2020 -five.

Speaker 4: As these market dynamics play out, a number of projects should accelerate and we now believe that 100 to 100 and fifty mtba of lngfids will be authorized over the next two years, with additional FIDs becoming more likely in 2020 -four and 2020 -fivegiven the strong TPS orders performance in the first quarter, as well as the acceleration in timing for several LNG projects, we now expect TPS orders to increase in 2020 -two versus 2021 .

Lorenzo Simonelli: Given the strong TPS orders performance in Q1, as well as the acceleration in timing for several LNG projects, we now expect TPS orders to increase in 2022 versus 2021. During Q1, we were pleased to be awarded a major order to provide an LNG system for the first phase of Venture Global's Plaquemines LNG project. We will be providing 24 modularized compression trains for the first phase of the project, and this award is part of a 70 MTPA master equipment supply agreement. The highly efficient liquefaction train system is modularized, helping to lower construction and operational costs with a plug-and-play approach that enables faster installation and first cargo. This important order builds on an award in Q4 of 2021 for power generation and the electrical distribution equipment for the comprehensive power island system for the Plaquemines project.

Speaker 4: Given the strong TPS orders performance in the first quarter, as well as the acceleration in timing for several LNG projects, we now expect TPS orders to increase in 2022 versus 2021.

Speaker 4: During the first quarter we were pleased to be awarded a major order to provide an LNG system for the first phase of venture globales plhaman's LNG project.

Speaker 4: We will be providing 24 modle ized compression trains for the first phase of the project and this award is part of our 70 ntpa master equipment supply agreement.

Speaker 4: We will be providing 24 modularized compression trains for the first phase of the project, and this award is part of our 70 MTPA master equipment supply agreement. The highly efficient liquidef action train system is modorularized, helping to lower construction and operational cost with a plug-and-play approach that enables faster installation and first cargo.

Speaker 9: The highly efficient liquefaction train system is modorized, helping to lower construction and operational costs with a plug-and-play approach that enables faster installation and first cargo.

Speaker 4: This important order builds on an award in the fourth quarter of 2021 for power generation and the electrical distribution equipment for the comprehensive power Island system for the platinman's projectthe plathaman's order follows a similar contract for vg's calkuse pass LNG terminal in 2019. in 2021, bakke use successfully completed delivery of the ninth and final block for calkuse pass. All shipments were finalized ahead of schedule and excellent and ievement by our team. calkuse pass holds the global record for the fastest construction of a large-scale greroom field LNG project, moving from FID to first LNG in two y-nine monthsoutside of LNG, we booked an award for Nova lt 16 turbines which will run on 100% hydrogen for air products. New net zero blue hydrogen energy complex in edmon and albertaour collaboration with Air products will be critical for a net zero future.

Lorenzo Simonelli: The Plaquemines order follows a similar contract for VG's Calcasieu Pass LNG terminal in 2019. In 2021, Baker Hughes successfully completed delivery of the ninth and final block for Calcasieu Pass. All shipments were finalized ahead of schedule, an excellent achievement by our team. Calcasieu Pass holds the global record for the fastest construction of a large-scale greenfield LNG project, moving from FID to first LNG in 29 months. Outside of LNG, we booked an award for NovaLT16 turbines, which will run on 100% hydrogen, for Air Products' new net-zero blue hydrogen energy complex in Edmonton, Alberta. Our collaboration with Air Products will be critical for a net-zero future, and this order follows the award we received for advanced compression technology for the NEOM Carbon-Free Green Hydrogen project.

Speaker 4: The plmman's order follows a similar contract for V G's calkashe pass LNG terminal in 2019. in 2021, bakyhu' successfully completed delivery of the ninth and final block for calkashe pass. All shipments were finalized ahead of schedule, an excellent achievement by our team. calkashe pass holds the global record for the fastest construction of a large-scale green field LNG project, moving from FID to first LNG in 2009 months.

Speaker 9: Outside of LNG we booked an award for Nova ltt 16 turbines which will run on 100% hydrogen for air products. New net zero blue hydrogen energy complex in Edmonton, Alberta.

Speaker 9: Our collaboration with our products will be critical for a net zero future, and this order follows the award we received for advanced compression technology for the neon-carbon-free green hydrogen project.

Speaker 4: And this order follows the award we received for advanced compression technology for the neon-carbon-free green hydrogen project. We were also pleased to be awarded a contract by turbna to supply gas turbines and compressors that can run on a blend of natural gas and hydrogen for a new compression station for the Greek natural gas transmission system. Baker use will provide free compression trains deploying our Nova lt 12 hydrogen ready gas turbines and pcl compressors with the capability to transport up to 10% hydrogen for this project. The project directly supports the eu'shydrogen and strategy goals to accelerate the development of clean hydrogen ensh its role as a cornerstone of a climate neutral energy system by 2050. these latest hydrogen orders build on Baker use's extensive experience in developing and supplying turbbo machinery equipment to compress, transport and utilized hydrogen.

Speaker 41: We were also pleased to be awarded a contract by terut to supply gas turbines and compressors that can run on a blend of natural gas and hydrogen for a new compression station for the Greek natural gas transmission system.

Lorenzo Simonelli: We were also pleased to be awarded a contract by Terna to supply gas turbines and compressors that can run on a blend of natural gas and hydrogen for a new compression station for the Greek natural gas transmission system. Baker Hughes will provide three compression trains, deploying our NovaLT12 hydrogen-ready gas turbines and PCL compressors, with the capability to transport up to 10% hydrogen for this project. The project directly supports the EU's hydrogen strategy goals to accelerate the development of clean hydrogen and ensure its role as a cornerstone of a climate-neutral energy system by 2050. These latest hydrogen orders build on Baker Hughes' extensive experience in developing and supplying turbomachinery equipment to compress, transport, and utilize hydrogen. Next, in oilfield equipment, we are encouraged to see improving demand trends across the different business areas.

Speaker 8: Baker hugh will provide free compression trains deploying our novlt 12 hydrogen-ready gas turbines and pcl compressors with the capability to transport up to 10% hydrogen for this project.

Speaker 9: The project directly supports the EU's hydrogen and strategy goals to accelerate the development of clean hydrogen and sure its role as a cornerstone of a climate neutral energy system by two thousand and fifty.

Speaker 9: These latest hydrogen orders build on Baker us's extensive experience in developing and supplying turbomachinery equipment to compress transport and utilizede hydrogen.

Speaker 21: Next nor field equipment. We are encouraged to see improving demand trends across the different business areas. Although recent world events impacted first quarter results, we remain disappointed with the overall level of profitability.

Speaker 4: Next nor fuield equipment. We are encouraged to see improving demand trends across the different business areas. Although recent world events impacted first quarter resultswe remain disappointed with the overall level of profitabilityat a macro level, trends in the Subsea and offshore markets continue to improve. In the subsea tree and flexible pipe market we expect a solid increase in industry awards this year as a firm commodity price outlook supports a growing pipeline of deepwater opportunities in core marketsin our international wellhead businesswe also see a positive order outlook across multiple regions, and particularly in the Middle East.

Lorenzo Simonelli: Although recent world events impacted Q1 results, we remain disappointed with the overall level of profitability. At a macro level, trends in the subsea and offshore markets continue to improve. In the subsea tree and flexible pipe market, we expect a solid increase in industry awards this year as a firm commodity price outlook supports a growing pipeline of deep water opportunities in core markets. In our international wellhead business, we also see a positive order outlook across multiple regions, and particularly in the Middle East. In Q1, we were awarded a contract in Asia to provide subsea wellheads and subsea production systems, plus related services, including 12 subsea trees for a deep water gas field. We also achieved our first award in Ivory Coast, where we will supply subsea trees, flexible flow lines, and risers to develop the Valiant Deepwater.

Speaker 4: At a macro level, trends in the Subsea and offshore markets continue to improvein the subsea tree and flexible pipe market we expect a solid increase in industry awards this year as a firm commodity price outlook supports a growing pipeline of deepwater up opportunities in core markets.

Speaker 9: In our international wellhead business. We also see a positive order outlook across multiple regions, and particularly in the Middle East.

Speaker 4: In the first quarter we awarded a contract in Asia to provide subsea wellheads and subsea production systems plus-related services, including 12 subsea trees for a deepwater gas field.

Speaker 4: In the first quarter, we were awarded a contract in Asia to provide subsea wellheads and subsea production systems, plus-related services, including 12 subsea trees for a deepwater gas fieldwe also achieved our first award in Ivory Coast, where we will supply subsea trees, flexible flow lines and risers to develop the valy deepwater oil fieldin Latin America, we were pleased to build on our flexible pipe business success, securing awards for flexible PPE systems and services that will be deployed across a number of key post Al revitalization programs, enabling increased oil recovery and extending the life of multiple Subsea developments. Finally, in digital solutions, order activity remain solid, with growth across our industrial end markets as well as improvement in the oil and gas marketsds continued to be affected by supply chain challenges and electronic shortages, as well as continued inflationary pressures.

Speaker 9: We also achieved our first award in Ivory Coast, where we will supply subsea trees, flexible flow lines and rises to develop the valing deepwater oilfield.

Speaker 4: In Latin America, we were pleased to build on our flexible pipe business success, securing awards for flexible pipe systems and services that will be deployed across a number of key post-sal revitalization programs, enabling increased oil recovery and extending the life of multiple Subsea developments.

Lorenzo Simonelli: In Latin America, we were pleased to build on our flexible pipe business success, securing awards for flexible pipe systems and services that will be deployed across a number of key post-salt revitalization programs, enabling increased oil recovery and extending the life of multiple subsea developments. Finally, in digital solutions, order activity remains solid, with growth across our industrial end markets, as well as improvement in the oil and gas markets. DS continues to be affected by supply chain challenges and electronic shortages, as well as continued inflationary pressures. The team is working tirelessly to manage the situation and navigate the evolving supply chain issues that have been exacerbated by recent events. In Q1, we made a number of changes in the DS business as we looked to improve the overall performance.

Speaker 4: Finally in digital solutions, order activity remains solid, with growth across our industrial end markets, as well as improvement in the oil and gas markets.

Speaker 4: Ds continued to be affected by supply chain challenges and electronic shortages, as well as continued inflationary pressures. The team is working tirelessly to manage the situation and navigate the evolving supply chain issues that have been as aspirated by recent events.

Speaker 4: The team is working tirelessly to manage the situation and navigate the evolving supply chain issues that have been as asirated by recent events. In the first quarter we made a number of changes in the DS business as we look to improve the overall performancewe unified our unique sensor business units- panaometrics rous, Stokes and drug- under one product line: Precision sensors and instrumentation, or psi. As a combined business, psi will better support potential investment opportunities, crucial for the future development, and help optimize the unique technology and commercial requirements of each brand. Unifying the businesses will also help drive better cost and operational performance.

Speaker 21: In the first quarter we made a number of changes in the DS business as we look to improve the overall performance.

Lorenzo Simonelli: We unified our unique sensor business units, Panametrics, Reuter-Stokes, and Druck, under one product line, Precision Sensors and Instrumentation, or PSI. As a combined business, PSI will better support potential investment opportunities crucial for the future development and help optimize the unique technology and commercial requirements of each brand. Unifying the businesses will also help drive better cost and operational performance. While we recognize that there is still more work to do, we also continue to make key personnel and operational changes across DS to drive performance, profitability, and return improvements, and to ensure that we have the right team in place to take this business forward. During the quarter, Bentley Nevada secured an important contract with a refinery in Brazil. Our Arms Reliability 1PM solution will support the customer's operations by providing visibility on over 10,000 assets.

Speaker 4: We unified our unique sensor business units- Panametrics router, Stokes and drug- under the one product line: Precision sensors and instrumentation, or psi. As a combined business, psi will better support potential investment opportunities crucial for the future development and help optimize the unique technology and commercial requirements of each brand. Unifying the businesses will also help drive better cost and operational performance.

Speaker 4: While we recognize that there is still more work to do, we also continue to make key personnel and operational changes across ES to drive performance, profitability and return improvements and to ensure that we have the right team in place to take this business forward.

Speaker 4: While we recognize that there is still more work to do, we also continue to make key personnel and operational changes across the's to drive performance, profitability and return improvements and to ensure that we have the right team in place to take this business forwardduring the quarter, bentin novada secured an important contract with a refiner in Brazil. Our arms reliability one PM solution will support the customers' operations by providing visibility on over one thousand assets. We will be providing optimal digital strategies to support asset integrity and availability, which will lead to maintenance cost optimization and effectively enable risk management while delivering enhanced performancedespite some of the challenges this quarter, we are optimistic on the outlook across both of our core business areas and excited about the new energy investments we are making for baka usewe believe that we are well positioned to benefit from an extended cyclical recovery in osse.

Speaker 9: During the quarter, bentin Nevada secured an important contract with a refiner in Brazil. Our arms reliability one PM solution will support the customers's operations by providing visibility on over one thousand assets.

Lorenzo Simonelli: We will be providing optimal digital strategies to support asset integrity and availability, which will lead to maintenance cost optimization and effectively enable risk management while delivering enhanced performance. Despite some of the challenges this quarter, 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 OFSE and longer-term structural growth trends in LNG, new energy, and industrial asset management. Importantly, we expect to generate strong free cash flow as the cycle plays out and remain committed to returning the majority of it back to shareholders. With that, I'll turn the call over to Brian. Thanks, Lorenzo. I'll begin with the total company results and then move into the segment details.

Speaker 21: Despite some of the challenges this quarter, we are optimistic on the outlook across both of our core business areas and excited about the new energy investments we are making for bor hu.

Speaker 6: We believe that we are well positioned to benefit from an extended cyclical recovery in oversse and longer-term structural growth trends in LNG, new energy and industrial asset management.

Speaker 4: And longer term structural growth trends in LNG, new energy and industrial asset management. Importantly, we expect to generate strong free cash flow as the cycle plays out and remain committed to returning the majority of it back to shareholders. With that, I'll turn the call over to Brian . Thanks, Lorenzo. I'll begin with the total company results and then move into the segment details.

Speaker 7: Importantly, we expect to generate strong free cash flow as the cycle plays out and remain committed to returning the majority of it back to shareholders.

Speaker 21: With that, I'll turn the call over to brri.

Speaker 10: Thanks Lorenzo. I'll begin with the total company results and then move into the segment details.

Lorenzo Simonelli: Orders for the quarter were $6.8 billion, up 3% sequentially, driven by OFE and TPS, partially offset by a decrease in digital solutions and OFS. Year-over-year, orders were up 51%, driven by increases across all four segments. We are particularly pleased with the orders performance in the quarter, especially in TPS, following a strong orders performance in the fourth quarter. Remaining performance obligation was $25.8 billion, up 10% sequentially. Equipment RPO ended at $9.9 billion, up 20% sequentially, and Services RPO ended at $15.9 billion, up 4% sequentially. Our total company book-to-bill ratio in the quarter was 1.4, and our equipment book-to-bill ratio in the quarter was 1.9. Revenue for the quarter was $4.8 billion, down 12% sequentially, with declines in all four segments. Year-over-year, revenue was up 1%, driven by increases in OFS and digital solutions, partially offset by decreases in OFE and TPS.

Speaker 20: Orders for the quarter were $6.8 billion, up 3% sequentially, driven by OFE and TPS, partially offset by a decrease in digital solutions and Os. Year-over-year orders were up 51%, driven by increases across all four segments.

Speaker 5: Orders for the quarter were $6.8 billion, up 3% sequentially driven by ose and TPS, partially offset by a decrease in digital solutions and Os. Year-over-year orders were up 51%, driven by increases across all four segments.

Speaker 12: We are particularly pleased with the orders' performance in the quarter, especially in TPS. Following a strong orders' performance in the fourth quarterremaining performance obligation was $25.8 billion, up 10% sequentially.

Speaker 5: We are particularly pleased with the orders' performance in the quarter, especially in tpos, following a strong orders' performance in the fourth quarter. Remaining performance obligation was $25.8 billion up 10% sequentially. Equipment RPO ended at $9.9 billion up 20% sequentially and services RPO ended at $15.9 billion up 4% sequentially. Our total company bookto Bill ratio in the quarter was one point four and our equipment booktobill ratio in the quarter was 1.9. revenue for the quarter was four point eight billion dollars down 12% sequentially, with declines in all four segments.

Speaker 20: Equipment RPO ended at $9.9 billion, up 20% sequentially. And services RPO ended at $15.9 billion- of 4% sequentially.

Speaker 14: Our total company book-to-bill ratio in the quarter was one point four and our equipment book-to-bill ratio in the quarter was one point nine.

Speaker 19: Revenue for the quarter was $4.8 billion, down 12% sequentially, with declines in all fourre segments.

Speaker 11: Year-over-year revenue was up 1%, driven by increases in Os and digital solutions, partially offset by decreases in OFE and TPS.

Speaker 5: Year-over-year revenue was up 1%, driven by increases in Os and digital solutions, partially offset by decreases in OFE and TPS.

Lorenzo Simonelli: Operating income for the quarter was $279 million. Adjusted operating income was $348 million, which excludes $70 million of restructuring, separation, and other charges. Adjusted operating income was down 39% sequentially and up 29% year-over-year. Our adjusted operating income rate for the quarter was 7.2%, down 320 basis points sequentially. Year-over-year, our adjusted operating income rate was up 160 basis points. Adjusted EBITDA in the quarter was $625 million, down 26% sequentially and up 11% year-over-year. Adjusted EBITDA rate was 12.9%, up 120 basis points year-over-year. As I will expand in a moment, our adjusted operating income and adjusted EBITDA margin rates were impacted by geopolitical events, as well as broader global supply chain challenges. Corporate costs were $105 million in the quarter. For the second quarter, we expect corporate costs to be roughly flat compared to the first quarter. Depreciation and amortization expense was $277 million in the quarter.

Speaker 15: Operating income for the quarter was $279 million. Adjusted operating income was $348 million, which excludes $7 million of restructuring, separation and other charges.

Speaker 5: Operating income for the quarter was $279 million. Adjusted operating income was $348 million, which excludes $7 million of restructuring, separation and other charges.

Speaker 20: Adjusted operating income was down 39% sequentially and up 29% year-over-year. Our adjusted operating income rate for the quarter was 7%, down 320 basis points sequentially.

Speaker 5: Adjusted operating income was down 39% sequentially and up 29% year-over-year. Our adjusted operating income rate for the quarter was 7% down 320 basis points sequentially year-over-year. Our adjusted operating income rate was up 160 basis points.

Speaker 11: Year-over-year, our adjusted operating income rate was up 160 basis points.

Speaker 16: Adjusted EBITDA in the quarter was $625 million, down 26% sequentially and up 11% year-over-year. Adjusted EBITDA rate was 13% of 120 basis points year-over-year.

Speaker 5: Adjusted EBITDA in the quarter was $625 million, down 26% sequentially and up 11% year.-over-year. Adjusted EBITDA rate was 13%, up 120 basis points year-over-year.

Speaker 17: As I will expand in a moment. Our adjusted operating income and adjusted EBITDA margin rates were impacted by geopolitical events as well as broader global supply chain challenges.

Speaker 5: As I will expand in a moment. Our adjusted operating income and adjusted EBITDA margin rates were impacted by geopolitical events as well as broader global supply chain challenges.

Speaker 18: Corporate costs were $105 million in the quarter. For the second quarter, we expect corporate costs to be roughly flat compared to the first quarter.

Speaker 5: Corporate costs were $105 million in the quarter. For the second quarter, we expect corporate costs to be roughly flat compared to the first quarter. Depreciation and amortization expense was $277 million in the quarter. For the second quarter, we expect DNA to be slightly up compared to first quarter levels. Net interest expense was $64 million.

Speaker 14: Depreciation and amortization expense was $277 million in the quarter. For the second quarter we expect DNA to be slightly up compared to first quarter levels.

Lorenzo Simonelli: For the second quarter, we expect OFSE to be slightly up compared to first-quarter levels. Net interest expense was $64 million. Income tax expense in the quarter was $107 million. GAAP-diluted earnings per share was $0.08. Included in GAAP-diluted earnings per share is an $85 million gain from the net change in fair value of our investment in ADNOC Drilling and a $74 million loss from the net change in fair value of our investment in C3 AI. Both are recorded in other non-operating loss. Adjusted earnings per share were $0.15. Turning to the cash flow statement, free cash flow in the quarter was negative $105 million. Free cash flow in the quarter was impacted by lower collections from a select number of international customers, which are largely timing-related, as well as a build in inventory as we get ready to execute on our large order backlog.

Speaker 14: Net interest expense was $64 million.

Speaker 14: Income tax expense in the quarter was $107 million.

Speaker 16: Gaap diluted earnings per share was eight cents. Included in GAAP diluted earnings per share is an $85 million gain from the net change in fair value of our investment in adnot drilling and a $74 million loss from the net change in fair value of our investment in C three AI. Both are recorded in other nonoperating loss.

Speaker 5: Income tax expense in the quarter was $107 million. Gaap diluted earnings per share was eight cents. Included in GAAP dilut earnings per share is an $85 million gain from the net change in fair value of our investment in ad not drilling and a $74 million loss from the net change in fair value of our investment in C three AI. Both are recorded in other nonoperating loss.

Speaker 13: Adjusted earnings per share were 15 cents.

Speaker 45: Turning to the cash flow statement, free cash flow in the quarter was negative $105 million.

Speaker 5: Adjusted earnings per share were 15 cents. Turning to the cash flow statement, free cash flow in the quarter was negative $105 million.

Speaker 20: Free cash flow in the quarter was impacted by lower collections from a select number of international customers, which are largely timing related, as well as a build-in inventory as we get ready to execute on our large order backlog.

Lorenzo Simonelli: For the second quarter, we expect free cash flow to improve sequentially, primarily driven by higher earnings and stronger collections. We continue to expect free cash flow conversion from adjusted EBITDA to be around 50% for the year, but anticipate the majority of our free cash flow to be generated over the second half of 2022. The quarterly progression should be more in line with what we experienced during 2018 and 2019. In the first quarter, we continued to execute on our share repurchase program, repurchasing 8.1 million Baker Hughes Class A shares for $236 million at an average price of just under $29 per share. As of 31 March, GE's ownership of Baker Hughes Class B shares represented 4% of the total company, down from just over 11% at the end of 2021.

Speaker 20: For the second quarter, we expect free cash flow to improve sequentially, primarily driven by higher earnings and stronger collections.

Speaker 5: For the second quarter. We expect free cash flow to improve sequentially, primarily driven by higher earnings and stronger collections. We continue to expect free cash flow conversion from adjusted EBITDA to be around 50% for the year, but anticipate the majority of our free cash flow to be generated over the second half of 2020. -two.

Speaker 12: We continue to expect free cash flow conversion from adjusted EBITDA to be around 50% for the year, but anticipate the majority of our free cash flow to be generated over the second half of 2020 -two.

Speaker 20: The quarterly progression should be more in line with what we experienced during 2018 and two thousand and nineteen and.

Speaker 5: The quarterly progression should be more in line with what we experienced during 2018 and 2019. in the first quarter, we continued to execute on our share repurchase program, repurchasing eight point one million Baker hugh Class a shares for $236 million, at an average price of just under $29 per share.

Speaker 20: In the first quarter, we continued to execute on our share repurchase program, repurchasing eight point one million Baker hugh Class a shares for $236 million at an average price of just under $29 per share.

Speaker 14: As of March, thirty-first GE's ownership of Baker Hughes Class B shares represented 4% of the total company, down from just over 11% at the end of 2021.

Speaker 5: As of March thirty-first, GE's ownership of Baker hughuse Class B shares represented 4% of the total company, down from just over 11% at the end of 2021. GE's overall ownership of Class a and Class B shares was 11 point 4% at the end of the first quarter, down from 16% at the end of 2021.

Lorenzo Simonelli: GE's overall ownership of Class A and Class B shares was 11.4% at the end of Q1, down from 16.2% at the end of 2021. Before I go into the segment results, I will comment on the current situation in Russia and how it currently factors into our broader outlook. Russia represented roughly 4% of total company revenue in Q1, and we recently announced that we have halted all new investment in the country. Additionally, sanctions from the US, UK, and the EU continue to evolve and are making ongoing operations increasingly complex and significantly more difficult. As a result, we expect erosion of our Russia-related revenues over the course of 2022, particularly in OFS. However, the pace and magnitude of this is difficult to predict given the dynamic nature of the situation.

Speaker 14: Ge's overall ownership of Class a and Class B shares was 11% at the end of the first quarter, down from 16% at the end of 2021.

Speaker 45: Before I go into the segment results, I will comment on the current situation in Russia and how it currently factors into our broader outlook.

Speaker 5: Before I go into the segment results, I will comment on the current situation in Russia and how it currently factors into our broader outlook. Russia represented roughly 4% of total company revenue in the first quarter and we recently announced that we have halted all new investment in the country.

Speaker 20: Russia represented roughly 4% of total company revenue in the first quarter and we recently announced that we have halted all new investment in the country.

Speaker 13: Additionally, sanctions from the U's U K and the EU continue to evolve and are making ongoing operations increasingly complex and significantly more difficult.

Speaker 5: Additionally, sanctions from the U's U K and the EU continue to evolve and are making ongoing operations increasingly complex and significantly more difficult.

Speaker 14: As a result, we expect erosion of our russia-related revenues over the course of 2022, particularly in Os. However, the pace and magnitude of this is difficult to predict, given the dynamic nature of the situation. Therefore, there is a range of possible outcomes we are preparing for across our product companies.

Speaker 5: As a result, we expect erosion of our russia-related revenues over the course of 2022, particularly in Os. However, the pace and magnitude of this is difficult to predict, given the dynamic nature of the situation. Therefore, there is a range of possible outcomes we are preparing for across our product companies.

Lorenzo Simonelli: Therefore, there is a range of possible outcomes we are preparing for across our product companies. On broader supply chain, while we did see some areas stabilize in the first quarter, there continues to be pressure on electronics, challenges in logistics, and an evolving understanding of implications due to global and geopolitical uncertainty. We remain focused on being adaptable to deliver for our customers and on our commitments. Now, I will walk you through the segment results in more detail and give you our thoughts on the outlook going forward. In oilfield services, the team delivered a solid quarter despite some of the global challenges. OFS revenue in the quarter was $2.5 billion, down 3% sequentially. International revenue was down 7% sequentially, led by declines in the North Sea, Russia-Caspian, the Middle East, and Latin America.

Speaker 20: On broader supply chain. While we did see some areas stabilize in the first quarter, there continues to be pressure on electronics, challenges in logistics and an evolving understanding of implications due to global and geopolitical uncertainty.

Speaker 5: On broader supply chain. While we did see some areas stabilize in the first quarter, there continues to be pressure on electronics, challenges in logistics and an evolving understanding of implications due to global and geopolitical uncertainty.

Speaker 11: We remain focused on being adaptable to deliver for our customers and on our commitments.

Speaker 46: Now I will walk you through the segment results in more detail and give you our thoughts on the outlook going forward.

Speaker 5: We remain focused on being adaptable to deliver for our customers and on our commitments. Now I will walk you through the segment results in more detail and give you our thoughts on the outlook going forward.

Speaker 45: In oilfield services, the team delivered a solid quarter despite some of the global challenges. Os revenue and the quarter was $2.5 billion, down 3% sequentially. International revenue was down 7% sequentially, led by declines in the North Sea Russia Caspian, the Middle East and Latin America. North America revenue increased 6% sequentially, with solid growth in both North America land and offshore.

Speaker 5: In oilfield services, the team delivered a solid quarter, despite some of the global challenges. Os revenue in the quarter was $2.5 million, down 3% sequentiallyinternational revenue was down 7% sequentially, led by declines in the North Sea Russia Caspian, the Middle East and Latin America. North America revenue increased 6% sequentially, with solid growth in both North America land and offshore. Operating income in the quarter was $221 million, down 14% sequentially. Operating margin rate was 9%, with margins declining 110 basis point sequentially, driven by lower volume, less favorable mix and continued inflationary pressure. In the chemicals, businessyear-over-year margins were up 230 basis points.

Lorenzo Simonelli: North America revenue increased 6% sequentially, with solid growth in both North America land and offshore. Operating income in the quarter was $221 million, down 14% sequentially. Operating margin rate was 8.9%, with margins declining 110 basis points sequentially, driven by lower volume, less favorable mix, and continued inflationary pressure in the chemicals business. Year-over-year, margins were up 230 basis points. As we look ahead to Q2, underlying macro fundamentals continue to improve, and we expect to see strong growth in both international and North American activity, as well as improvement in pricing. This is likely to be partially offset by weakness in Russia. We estimate that our Q2 revenue should increase sequentially in the mid to high single-digit range. With this revenue framework, we would expect our margins to increase by approximately 100 to 200 basis points sequentially.

Speaker 15: Operating income in the quarter was $221 million, down 14% sequentially.

Speaker 15: Operating margin rate was 9%, with margins declining 110 basis points sequentially driven by lower volume, less favorable mix and continued inflationary pressure in the chemicals business.

Speaker 11: Year-over-year margins were up 230 basis points.

Speaker 14: As we look ahead to the second quarter, underlying macro fundamentals continue to improve and we expect to see strong growth in growth, international and North American activity, as well as improvement in pricing. This is likely to be partially offset by weakness in Russia.

Speaker 5: As we look ahead to the second quarter, underlying macro fundamentals continue to improve and we expect to see strong growth in growth, international and North American activity, as well as improvement in pricing. This is likely to be partially offset by weakness in Russia. We estimate that our second quarter revenue should increase sequentially in the mid- to high single digit range. With this revenue framework, we would expect our margins to increase by approximately 100 to 200 basis points sequentially for the full year 2022. We see an improving outlook across most major markets, which is partially tempered by global supply chain and geopolitical factors. In the international market, we expect the continuation of a broad-based recovery, with industry-wide activity growth in the low to mid- double digits. In North America, we expect continued activity increases, with the broader market set to experience strong growth in excess of 40%.

Speaker 14: We estimate that our second quarter revenue should increase sequentially in the mid- to high single-digit range. With this revenue framework, we would expect our margins to increase by approximately 100 to 200 basis points sequentially.

Speaker 45: For the full year 2022, we see an improving outlook across most major markets, which is partially tempered by global supply chain and geopolitical factors.

Lorenzo Simonelli: For the full year 2022, we see an improving outlook across most major markets, which is partially tempered by global supply chain and geopolitical factors. In the international market, we expect the continuation of a broad-based recovery with industry-wide activity growth in the low to mid double digits. In North America, we expect continued activity increases, with the broader market set to experience strong growth in excess of 40%. Given this macro backdrop and some of the headwind considerations I noted earlier, we would expect OFS revenue to increase in the low to mid double digits. The largest variable to this range is the number of potential outcomes in Russia. Despite this uncertainty, we still expect margin rates to increase throughout the year and continue to target 20% EBITDA margins by Q4.

Speaker 20: In the international market. We expect the continuation of a broad-based recovery, with industry-wide activity growth in the low to mid-double digits.

Speaker 11: In North .america, we expect continued activity increases, with the broader market set to experience strong growth in excess of 40%, and.

Speaker 14: Given this macro backdrop and some of the headwind considerations I noted earlier, we would expect Os revenue to increase in the low to mid-double digits. The largest variable to this range is the number of potential outcomes in Russia.

Speaker 5: Given this macro backdrop and some of the headwind considerations I noted earlier, we would expect Os revenue to increase in the low to mid-double digits. The largest variable to this range is the number of potential outcomes in Russia.

Speaker 13: Despite this uncertainty, we still expect margin rates to increase throughout the year and continue to target 20% EBITDA margins by the fourth quarter.

Speaker 5: Despite this uncertainty, we still expect margin rates to increase throughout the year and continue to target 20% EBITDA margins by the fourth quarter. Moving to oilfield equipment, orders for the quarter were $739 million, an increase of over 100% were 394 million year-over-year. The strong orders performance was driven by PS, supported by a large subsea tree contract in Asia, along with growth in flexibles, surface pressure control and services.

Lorenzo Simonelli: Moving to oilfield equipment, orders for the quarter were $739 million, an increase of over 100%, or $394 million year-over-year. The strong orders performance was driven by SPS, supported by a large subsea tree contract in Asia, along with growth in flexibles, surface pressure control, and services. As a reminder, we removed subsea drilling systems from consolidated OFE operations when we completed the merger with MH Wirth in Q4 2021. Revenue was $528 million, down 16% year-over-year, primarily driven by SPS, SPC, and the removal of SDS, partially offset by growth in services and flexibles. Operating loss was $8 million, down $12 million year-over-year, primarily driven by lower volume in the quarter. OFE's lower revenue and operating margin in the quarter were driven by lower equipment backlog conversion in SPS.

Speaker 45: Moving to oilfield equipment, orders for the quarter were $739 million, an increase of over 100%, were 394 million year-over-year.

Speaker 47: The strong orders. Performance was driven by sp, supported by a large subsea tree contract in Asia, along with growth in flexibles, surface pressure control and services.

Speaker 13: As a reminder, we removed Subsea drilling systems from consolidated OFE operations when we completed the merger with MH worth in the fourth quarter of 2021.

Speaker 5: As a reminder, we removed Subsea drilling systems from consolidated OFE operations when we completed the merger with MH worth in the fourth quarter of 2021, revenue was $528 million down 16% year-over-year, primarily driven by sp, SPC and the removal of DS, partially offset by growth in services and flexibles.

Speaker 19: Revenue was $528 million, down 16% year-over-year, primarily driven by sp, SPC and the removal of DS, partially offset by growth in services and flexibles.

Speaker 15: Operating loss was $8 million down $12 million year-over-year, primarily driven by lower volume in the quarter. ose's lower revenue and operating margin in the quarter were driven by lower equipment backlog conversion in sp.

Speaker 5: Operating loss was $8 million down $12 million year-over-year, primarily driven by lower volume in the quarter. Ofe's lower revenue and operating margin in the quarter were driven by lower equipment backlog conversion in PS. For the second quarter we anticipate revenue to be approximately flat to up mid-single digit sequentially, depending on the timing of backlog conversion. We expect operating income to be around breakeven or slightly positive.

Lorenzo Simonelli: For the second quarter, we anticipate revenue to be approximately flat to up mid-single digit sequentially, depending on the timing of backlog conversion. We expect operating income to be around break-even or slightly positive. For the full year 2022, we expect a recovery in offshore activity and project awards, which should help drive a solid increase in orders when adjusting for the removal of SDS. We expect OFE revenue to decline double digits, primarily driven by the deconsolidation of SDS, and OFE margin rate to be in the low single-digit range. Next, I will cover turbomachinery. The team delivered another strong quarter with solid execution. Orders in the quarter were $3 billion, up $1.6 billion year-over-year, a new quarterly record for TPS.

Speaker 19: For the second quarter we anticipate revenue to be approximately flat to up mid-single digits sequentially, depending on the timing of backlog conversion. We expect operating income to be around breakeven or slightly positive.

Speaker 5: For the full year 2022, we expect to recovery in offshore activity and project awards, which should help drive a solid increase in orders when adjusting for the removal ofds.

Speaker 14: We expect oe revenue to decline double digits, primarily driven by the deconsolidation of DS, and oe margin rate to be in the low single-digit range.

Speaker 5: We expect OFE revenue to decline double digits, primarily driven by the deconsolidation of Ts, and OFE margin rate to be in the low single digit rangenext I will cover turbine machinery. The team delivered another strong quarter with solid execution. Orders in the quarter were $3 billion, up $1.6 billion year-over-year- a new quarterly record for TPS. Equipment orders were up $1.5 billion year, -over--year, driven a significant award to provide an LNG system for the first phase of vg's poackeen's LNG project in North America. Service orders in the quarter were up 8% year-over-year, primarily driven by growth in contractual and transactional services, partially offset by lower order volumes in upgrades. Revenue for the quarter was one point $3 billion, down 9% versus the prior -year. Equipment revenue was down 26%, driven by timing of project execution. Services revenue was up 6% year-over-year, driven by higher volume in upgrades, pumps and valves. Operating income for TPS was two hundred and 26 million dollars, up 9% year-over-year.

Speaker 22: Next I will cover turbine machinery. The team delivered another strong quarter with solid execution.

Speaker 19: Orders in the quarter were $3 billion of $1.6 billion year-over-year, a new quarterly record for TPS equipment orders were up $1.5 billion year-over-year, driven by a significant award to provide an LNG system for the first phase of vg's plmen's LNG project in North America.

Lorenzo Simonelli: Equipment orders were up $1.5 billion year-over-year, driven by a significant award to provide an LNG system for the first phase of VG's Plaquemines LNG project in North America. Service orders in the quarter were up 8% year-over-year, primarily driven by growth in contractual and transactional services, partially offset by lower order volumes and upgrades. Revenue for the quarter was $1.3 billion, down 9% versus the prior year. Equipment revenue was down 26%, driven by timing of project execution. Services revenue was up 6% year-over-year, driven by higher volume in upgrades, pumps, and valves. Operating income for TPS was $226 million, up 9% year-over-year. Operating margin was 16.8%, up 280 basis points year-over-year. Margin rates in the first quarter were favorably impacted by higher services mix and strong cost productivity, especially on projects at or near completion.

Speaker 19: Service orders in the quarter were up 8% year-over-year, primarily driven by growth in contractual and transactional services, partially offset by lower order volumes in upgrades.

Speaker 19: Revenue for the quarter was $1.3 billion, down 9% versus the prior year. Equipment revenue was down 26%, driven by timing of project execution.

Speaker 19: Services revenue was up 6% year-over-year, driven by higher volume in upgrades, pumps and valves.

Speaker 15: Operating income for TPS was $226 million up 9% year-over-year. Operating margin was 17% up 280 basis points year-over-year.

Speaker 5: Operating margin was 17%, up 280 basis points. Year-over-year margin rates in the first quarter were favorably impacted by higher services mix and strong cost productivity, especially on projects at or near completion. For the second quarter, we expect revenue to be flat to up mid-single digits on a year-over-year basis, driven by higher equipment volume from planned backlog conversion.

Speaker 19: Margin rates in the first quarter were favorably impacted by higher services mix and strong cost productivity, especially on projects at or near completion.

Lorenzo Simonelli: For Q2, we expect revenue to be flat to up mid-single digits on a year-over-year basis, driven by higher equipment volume from planned backlog conversion. With this revenue outlook, we expect TPS margin rates to be roughly flat to slightly higher versus Q2 of 2021, depending on the ultimate mix between equipment and services. For the full year, we expect strong growth in TPS orders versus 2021, driven by increasing LNG awards. We also continue to see a solid pipeline in our onshore/offshore production segment, along with opportunities in pumps, valves, and new energy areas. While we expect very strong growth in orders, revenue growth should likely range between high single digits to low double digits. On the margin side, we continue to expect operating income margin rates to be roughly flat year-over-year in 2022, depending on the mix between services and equipment.

Speaker 14: For the second quarter we expect revenue to be flat to up mid-single digits on a year-over-year basis, driven by higher equipment volume from planned backlog conversion.

Speaker 14: With this revenue outlook, we expect TPS margin rates to be roughly flat to slightly higher versus the second quarter of 2021, depending on the ultimate mix between equipment and services.

Speaker 45: For the full year we expect strong growth in TPS orders versus 2021, driven by increasing LNG awards. We also continue to see a solid pipeline in our onshore offshore production segment, along with opportunities in pumps, valves and new energy areas.

Speaker 5: For the full year. We expect strong growth in TPS orders versus 2021, driven by increasing LNG awardswe also continue to see a solid pipeline in our onshore offshore production segment, along with opportunities in pumps, valves and new energy areas. While we expect very strong growth in orders, revenue growth should likely range between high single digits to low double digits.

Speaker 5: While we expect very strong growth in orders, revenue growth should likely range between high single digits to low double digits.

Speaker 19: On the margin side, we continue to expect operating income margin rates to be roughly flat year-over-year in 2022, depending on the mix between services and equipment.

Speaker 5: On the margin side, we continue to expect operating income margin rates to be roughly flat year-over-year in 2022, depending on the mix between services and equipment.

Lorenzo Simonelli: As we mentioned last quarter, included in this framework is an expected increase in investments and R&D expenses that relate to our new energy and industrial growth areas. Finally, in digital solutions, orders for the quarter were $567 million, up 3% year-over-year. DS continues to see a strengthening market outlook and delivered growth in orders across most end markets. Sequentially, orders were down 6%, driven by typical seasonality. Revenue for the quarter was $474 million, up 1% year-over-year, primarily driven by higher volumes in precision sensors and instrumentation and Waygate, partially offset by lower volume in PPS, Nexus Controls, and Bentley Nevada. Sequentially, revenue was down 15%, driven by typical seasonality and challenges in the global environment, particularly supply chain. Operating income for the quarter was $15 million, down 38% year-over-year, largely driven by headwinds from electronics shortages, some cost inflation, and COVID-19-related lockdowns in China.

Speaker 13: As we mentioned last quarter. Included in this framework is an expected increase in investments and rnd expenses that relate to our new energy and industrial growth areas.

Speaker 5: As we mentioned last quarter, included in this framework is an expected increase in investments and rnd expenses that relate to our new energy and industrial growth areas. Finally, in digital solutions, orders for the quarter were $567 million, up 3% year-over-year. Ds continues to see a strengthening market outlook and delivered growth in orders across most end markets.

Speaker 15: Finally in digital solutions, orders for the quarter were $567 million, up 3% year-over-year. Ds continues to see a strengthening market outlook and delivered growth in orders across most end markets.

Speaker 13: Sequentially, orders were down 6%, driven by typical seasonality.

Speaker 19: Revenue for the quarter was $474 million of 1% year-over-year, primarily driven by higher volumes in Precision sensors and instrumentation and way gate, partially offset by lower volume in ppps, Nexus controls and bentling Nevada.

Speaker 5: Sequentially, orders were down 6%, driven by typical seasonality. Revenue for the quarter was $474 million of 1% year-over-year, primarily driven by higher volumes in Precision sensors and instrumentation and way gate, partially offset by lower volume in ppps, Nexus controls and beentling Nevada. Sequentially, revenue was down 15%, driven by typical seasonality and challenges in the global environment, particularly supply chain.

Speaker 13: Sequentially, revenue was down 15%, driven by typical seasonality and challenges in the global environment, particularly supply chain.

Speaker 15: Operating income for the quarter was $15 million, down 38% year-over-year, largely driven by headwinds from electronics shortages, some cost inflation and COVID-19 related lockdowns in chinasequentially, operating income was down 71%, driven by lower volume.

Speaker 5: Operating income for the quarter was $15 million, down 38% year-over-year, largely driven by headwinds from electronics shortages, some cost inflation and COVID-19 related lockdowns in China. Sequentially, operating income was down 71%, driven by lower volume.

Lorenzo Simonelli: Sequentially, operating income was down 71%, driven by lower volume. For the second quarter, we expect to see strong sequential revenue growth and operating margin rates back into the mid-single digits. For the full year, following five quarters in a row of positive book-to-bill, we expect solid DS revenue growth as supply chain constraints begin to ease over the second half of the year and backlog conversion improves. With higher volumes, we expect to see strong improvements in DS margins, which should approach high single digits for the total year. Overall, we have navigated a volatile environment during the quarter, delivering strong orders across the company and positioning to execute on our record backlog. Despite very troubling and challenging geopolitical events and broadly stressed global supply chains, we are confident in our ability to adapt and execute as the rest of the year unfolds.

Speaker 14: For the second quarter. We expect to see strong sequential revenue growth and operating margin rates back into the mid-single digits for the full year, following five quarters in a row of positive book. To Bill, we expect solid DS revenue growth as supply chain constraints begin to ease over the second half of the year and backlog conversion improves with higher volumes. We expect to see strong improvements in DS margins which should approach high single digits for the total year.

Speaker 5: For the second quarter, we expect to see strong sequential revenue growth and operating margin rates back into the mid-single digitsfor the full year, following five quarters in a row of positive book. To Bill, we expect solid DS revenue growth as supply chain constraints begin to ease over the second half of theyear and backlog conversion improves with higher volumes. We expect to see strong improvements in DS margins, which should approach high single digits for the total year. Overall, we have navigated a volatile environment during the quarter, delivering strong orders across the company and positioning to execute on our record backlog. Despite very troubling and challenging geopolitical events and broadly stressed global supply chains, we are confident in our ability to adapt and execute as the rest of the year unfolds. With that, I will turn the call back over to Jud. Thanks Brian , operator. Let's open the call for questions. Thank you, Ladies and John , that if you have question at this time, Please.

Speaker 48: Overall we have navigated a volatile environment during the quarter, delivering strong orders across the company and positioning to execute on our record backlog. Despite very troubling and challenging geopolitical events and broadly stressed global supply chains, we are confident in our ability to adapt and execute as the rest of the year unfolds. With that, I will turn the call back over to judd.

Lorenzo Simonelli: With that, I will turn the call back over to Judd. Thanks, Brian. Operator, let's open the call for questions. Thank you. Ladies and gentlemen, if you have questions at this time, please press the star then the one key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. In consideration of time, we ask that you please limit yourself to one question and one related follow-up. Now, first question coming from the line of James West with Evercore ISI. Your line is open. Hey, good morning, Lorenzo. Brian. Hey, James. Hey, James.

Speaker 2: Thanks Brian operator. Let's open the call for questions.

Speaker 23: Thank you, Ladies and gentlemen, if you have question at this time, Please press the sp and the one key on your touchdown te.

Speaker 1: Phone if your question has been answered.

Speaker 1: Wisdom of yourself from the.

Speaker 2: Star then to one key on your touchphone telephone. If your question has been answered or you wish to remove yourself from the queue, Please press the pound key. In a consideration of time, we ask that you please limit yourself to one question and one related follow up.

Speaker 1: Please brress the pound key.

Speaker 1: In the consideration of time. We as that you please limit yourself to one.

Speaker 1: Question and one related follow-up.

Speaker 44: No first question.

Speaker 1: And coming from the lineup James West.

Speaker 1: wh ever quires I a lot of open.

Speaker 2: Now first question coming from the lineup James was with ever client itself and Y, good morning the RINs B A. So there was: get some great detail on the L N G outlook. But I was wondering: get alittle more color from your conversations specifically with with customers, as things have clearly changed pretty dramatically in the last. You know E Inter on weeks as ln G's come into focus here and if you could maybe canprovide us. You know what they're saying, what their urgency level is. You know kind of a little moregreat detail on how those conversations are going and how accelerated this buildout cycle could be?

Speaker 24: Hey good morning. The rena grrime eight tings.

Lorenzo Simonelli: So, Lorenzo, you gave some great detail on the LNG outlook, but I was wondering if we could get a little more color from your conversations specifically with customers as things have clearly changed pretty dramatically in the last 8 or 9 weeks as LNG has come into focus here. And if you could maybe provide us what they're saying, what their urgency level is, kind of just a little more detail on how those conversations are going and how accelerated this build-out cycle could be. Yeah, sure, James. And I think it's clear the unfolding situation in Europe has definitely accelerated the pace of discussions on the next wave of LNG projects aiming to take FID.

Speaker 25: So there yes, some more detail on the LNG outlook. But I was wondering if you get a littlemore more color from your conversations, specifically with with customers, as things have clearly changed pretty dramatically in the last interon weeks as LNGs come into focus here, And if you could maybe provide us what they're saying, what their urgency level is, kind of just a little more detail on how those conversations are going and how accelerated this build-out cycle could be.

Speaker 21: Sure James, and having it's clear the unfolding situation in Europe definitely accelerated the pace of discussions on the next wave of lnerg projects aiming to take F? Id. You know we've already started C market momentum pick up in 2021 as country, set net zero targets and also started to realize the role of natural gas and what it would play in energy transition. Now I'd say we're arguably in the early stages in work could be a multi year reorganizing of the global energy system and with that it will take time for the lnergy landscape to evolve. And, based on the discussions with customers, we see a significant step up in a number of customers looking to take earlier F ID. Would also increase long term supply agreements. We now expect 10.15 thousand M T P a to take F ID D overthe next two years, with the potential of more F ID in 24 and 2: 25. as you know, a lot of these projects are in the? U's, So this U's should be a big, better fishery at these redrawings of the global energy map. But also, as we look at other places such as East Middle East, Mexico and also Asia, we're seeing increasing interest from customers. I think we're very well positioned with some interesting concepts around flexibility and also speed to market and with our highly efficient moderorized refleion train system, which again was emfilized in V? G. we're helping to lower construction and operational costs with the plug and player approach that enables faster installation. So, feeling good about the lenergy outlook for the number of years.

Speaker 4: Sure James, and having it's clear the unfolding situation in Europe definitely accelerated the pace of discussions on the next wave of ln G projects aiming to take F? Id. You know we've already started to see market momentum pick up in 2021 as country, set net zero targets and also started to realize the role of natural gas and what it would play in the energy transition. Now I'd say we're arguably in the early stages in what could be a multi year reorganizing of the global energy system and with that it will take time for the lergy landscape to evolve and, based on the discussions with customers, we see a significant step up in a number of customers looking to take earlier F ID would also increase long term supply agreements. We now expect 10.15 thousand M T P a to take F? Id over the next two years, with the potential of more F ID in 24 and 25. asyou know, a lot of these projects are in the? U's, So this U's should be a big, better fishery as D rerawings of the global energy map, but also as we look at other places such as.

Lorenzo Simonelli: We'd already started to see market momentum pick up in 2021 as countries set net-zero targets and also started to realize the role of natural gas and what it would play in the energy transition. Now, I'd say we're arguably in the early stages in what could be a multi-year reorganizing of the global energy system. With that, it will take time for the LNG landscape to evolve. Based on the discussions with customers, we see a significant step up in a number of customers looking to take earlier FIDs with also increased long-term supply agreements. We now expect 100 to 150 MTPA to take FID over the next two years, with the potential of more FIDs in 2024 and 2025.

Lorenzo Simonelli: As you know, a lot of these projects are in the US, so this US should be a big bet on OFSE as these redrawing of the global energy map. But also, as we look at other places such as East, Middle East, Mexico, and also Asia, we're seeing increasing interest from customers. I think we're very well positioned with some interesting concepts around flexibility and also speed to market. And with our highly efficient modularized LNG train system, which, again, was emphasized in VG, we're helping to lower construction and operational costs with the plug-and-play approach that enables faster installation. So feeling good about the LNG outlook for the number of years. Sure. No doubt about that. Thanks for that, Lorenzo. And then maybe just a quick follow-up for me.

Speaker 4: East Middle East Mexico and also Asia we're seeing increasing interest from customers. I think we're very well positioned with some interesting concepts around flexibility and also speed to market and with our highly efficient moderorizer reflection train system which again was emflilliized in V G we're helping to lower construction and operational costs with the plug-and play approach that enables faster installation. So feeling good about the LNG outlook for the number of years that Lear then let me just a quick for be you made this investment in April or we could go with a say F global to expand. I think E fuels could may be coming on our that we is going on there or what that market looks like how you see that that plan out yes. So James and hhif is a great opportunity and we're pleased to be involved with this customer and it's another example of how collaboration.

Speaker 26: Sure no, no about that. Thanks for that. Learned though, and then maybe just a quick follow-up for me. You made this investment in April - a few, we see, or we could go with hhif global to expand, I think, E fuels. Could you maybe comment on what exactly is going on there, what that market looks like, how you see that, that plan out?

Lorenzo Simonelli: You made this investment in April, a few weeks ago or a week ago, with HIF Global to expand, I think, e-fuels. Could you maybe comment on what exactly is going on there, what that market looks like, how you see that playing out? Yeah, sure, James. And HIF is a great opportunity, and we're pleased to be involved with this customer. And it's another example of how collaboration can really help to drive the energy transition. HIF Global develops projects to produce e-fuels by blending green hydrogen and CO2. And we've invested alongside AME, EIG, Porsche, and Gemstone, great partners, to really help HIF continue to develop carbon-neutral e-fuel projects in the United States, Chile, and Australia. With a small minority investment in this equity round, we'll be providing compressors, turbines, pumps, valves, and other technology on future projects.

Speaker 21: Yes James and F is a great opportunity and we're pleased to be involved with this customer, and it's another example of how collaboration can really help to drive the energy transition. hif global develops projects to produce E fuels by blending green hydrogen and co 2, and we've invested alongside amme EI, pors and gemstone, great partners, to really help F continue to develop carbon neutral E fuel projects in the United States, Chile and Australia with the small minority. Investment in this equity round will be providing compressors turbines pumps, valilves and another technology on future projects. And I think what's interesting here is again, as you look at electricity based fuels or E fuels. Their clean, carbon neutral fuels produce from renewable green hydrogen and carbon dioxide taken from the atmosphere and they can be used by existing cars and trucks without any modification to the engines, and E fuels require no new infrastructure, transportation or filling stations. So a good opportunity and an expanding market for us.

Speaker 4: Can really help to drive the energy transition. hif global develops projects to produce E fuels by blending green hydrogen and co 2, and we've invested alongside amme eig, pors and gemstone great partners- to really help F continue to develop carbon neutral E fuel projects in the United States, Chile and Australia with a small minority. Investment in this equity around will be providing compressors turbines pumps, valves and other technology on future projects. And I think what's interesting here is again as you look at electricity based fuels or E fuels. Their clean, carbon neutral fuels produce from renewable green hydrogen and carbon dioxide taken from the atmosphere and they can be used by existing cars and trucks without any modification to the engines, and E fuels require no new infrastructure, transportation or filling stations. So a good opportunity and an expanding market for us.

Lorenzo Simonelli: And I think what's interesting here is, again, as you look at electricity-based fuels or e-fuels, they're clean carbon-neutral fuels produced from renewable green hydrogen and carbon dioxide taken from the atmosphere. And they can be used by existing cars and trucks without any modification to the engines. And e-fuels require no new infrastructure, transportation, or filling stations. So a good opportunity and an expanding market for us. Got it. Thanks, Lorenzo. Our next question coming from the line of Chase Mulvehill with Bank of America. Your line is open. Yeah, good morning, everyone. Hey, Chase. Hi, Chase. Hey, Brian. Hey, Lorenzo. I guess kind of a follow-up question on James' question around LNG. And obviously, you've taken up your guidance for LNG, or sorry, for TPS orders this year based on strong LNG. So you've been guiding flat. Now you expect kind of strong order growth momentum.

Speaker 26: Got thanks for it.

Speaker 23: Our next question, coming from the line of Jason mvilield: withod Bank of America you want is open.

Speaker 12: Got thanks for itour. Next question coming from the lineup jayason movfm with Bank of America, you and is open. Good morning everyone's 18 trase.

Speaker 33: yeah good morning everyone. 18 I trust.

Speaker 27: bro there was a- I guess, kind of a following question on James, you know, question around LNG and you know obviously you've taken up your guidance for LNG CY, for tpss orders, this here based on a strong LNG, So you've been guiding flat. You know now you expect kind of strong order growth momentum. So I don't know if you, if you'd want to, of quantify, you know what strong means and then you know we kind of all understand, you know what's happening in LNG and accelerated growth opportunities here. But maybe a step back a little bit and talk about, you know, your upstream, ownshore offshore order opportunities, because it ultimately looks like the base orders related to kind of some of lllenshore offshore stuff is taken a step higher as well.

Speaker 7: gr there is a I guess a kind of a phone question on James question around LNG and you know obviously you've taken up your guidance for for LNG or CY for TPS orders this year based on strong LNG. So you've been guiding flat. You know now you expect kind of strong order growth momentum. I don't know if you if you'd want to kindofquantify. You know what strong means and then you we kind of all understand. You what's happening in LNG and accelerated growth opportunities here but maybe a step back a little bit and talk about you your upstream ownshore offshore order opportunities because it ultimately looks like the base orders related to kind of some llenshore. Offshore. Stuff is taken a step higher as well. So.

Lorenzo Simonelli: So, I don't know if you'd want to kind of quantify what strong means. And then we kind of all understand what's happening in LNG and the accelerated growth opportunities here. But maybe a step back a little bit and talk about your upstream, onshore, offshore order opportunities because it ultimately looks like the base orders related to kind of some of the onshore, offshore stuff is taking a step higher as well. Yeah, Chase. On TPS, again, we're seeing a continued order momentum that we saw start at the end of 2021, and it's really accelerated in 2022, primarily driven by LNG, also the new energy opportunities, even though they're smaller in nature.

Speaker 21: Yes chaseon, TPS. Again we're seeing a continued order momentum that we saw start at the end of 21 and it's really accelerated in two twenty 2, primarily driven by LNG. Also the new energy opportunities, even though there'are smaller in nature, But when you look at you the LNG projects that are moving forward, as I mentioned before, and you think about the likely timing, it could translate in an order number of for T PS of eight to $9 billion in 2020 two and importantly, based on customer discussions, we'd expect our order levels to remain elevated in two and thousand and twenty three as well. As you can see, a lot of this on the LNG projects is a pull forward and also strong long term LNG fundamentals and we also see a continued traction in the new energy space and, as you saw again in the first quarter we booked some awards on the new ener space and we're still at the upper end of 100 to two hundred range as we continue to see new energy orders in 2020 two

Speaker 4: Yes chase on TPS, again we're seeing a continued order momentum that we saw start at the end of 2- 21 and it's really accelerated in two twenty 2, primarily driven by L NG. Also the new energy opportunities, even though there'are smaller in nature, But when you look at you, the L? Ng projects that are moving forward, as I mentioned before, and you think about the likely timing, it could translate in an order number of for T? Ps of eight to $9 billion in 2020 two and importantly, based on customer discussions, we'd expect our order levels to remain llevated in 2020 three as well. As you can see, lot of this on the L? Ng projects is a pull forward and also strong long term LNG fundamentals and we also see a continued traction in the new energy space and, as you saw again in the first quarter we booked some awards on the new energy space and we're still at the upper end of 100 to two hundred range.

Lorenzo Simonelli: But when you look at the LNG projects that are moving forward, as I mentioned before, and you think about the likely timing, it could translate in an order number for TPS of $8 to $9 billion in 2022. And importantly, based on customer discussions, we'd expect our order levels to remain elevated in 2023 as well. As you can see, a lot of this on the LNG projects is a pull forward and also strong long-term LNG fundamentals. And we also see a continued traction in the new energy space. And as you saw, again, in Q1, we booked some awards on the new energy space, and we're still at the upper end of our 100 to 200 range as we continue to see new energy orders in 2022. Okay. All right. That's helpful there. Nice to hear.

Speaker 41: Okay right, that's helpful. They're nice to strong. Orders are going to continue in the 2: 23 for P's. The follow-up is really. Obviously the Russia euk conflict is causing Europe , and in other countries, to focus on energy security. Obviously this is positive, the LNG front- But what does it ultimately mean for the energy transition? Do you think that it actually slows the pace of adoption? Does it speed it up like? What does it mean for energy transition?

Speaker 4: As we continue to see new engy orders in 2022. Ok right, that's helpful, they're nice to strong. Orders are going to continue into 2- 23 for G PS. The follow-up is really obviously the russia- EU ke conflict is causing Europe and in other countries to focus on energy security. Obviously this is positive- the LNG front- But But what does it ultimately mean for the energy transition? Do you think that it actually slows the pace of adoption? Does it speed up like? What does it mean for energy transition?

Lorenzo Simonelli: Strong orders are going to continue into 2023 for TPS. The follow-up is really, obviously, the Russia-Ukraine conflict is causing Europe and other countries to focus on energy security. Obviously, this is positive on the LNG front, but what does this ultimately mean for the energy transition? Do you think that it actually slows the pace of adoption? Does it speed it up? What does it mean for energy transition? Yeah, Chase, it's a question that many are posing. And I think the focus right now in the near term has switched to energy security, reliability, and diversity. But we don't believe that sustainability goes away. In fact, if you look at some of the policies even introduced in Germany, their 2035 energy plan still continues to focus on sustainability.

Speaker 21: Yes So said, a question that many opposing them. I think the focus right now, in the near term, has switched to energy security, reliability and diversity, but we don't believe that sustainability goes away. In fact, if you look at some of the policies, even introduced in Germany, their twoythousand and 35 energy plans- still continues the focus on sustainability. We think the current environment will actually accelerate clean energy initiatives, particularly for fuels like hydrogen, which E? U is making a large part of its long term energy PL. What we're seeing from the current situation is that you cannot become to reliant on one country or one source of energy. So diversity of supply is critical and we think that pragmatism has come back into this discussion and the role of energy, not just for renewables but also, as we've mentioned before, gas playing a key critical role given the elevated commodity prices. Number of major oil companies and N? O C's are going to report good profits and free cash flow. We think they'll use this to continue actually developing, accelerating their carbon carbonization plans as well as healthy shareholder returns, and you can see that also with an example like a ramco with its CapEx plans. That includes significant hydrogen. So know, we think bacer use is very well positioned then, with gas L N G hydrogen C, C? U's oil and pipelines, and we've got the technologies that are going to continue to drive this transition.

Speaker 4: I said, a question that many opposing them. I think the focus right now, in the near term, has switched to energy security, reliability and diversity, but we don't believe that sustainability goes away. In fact, if you look at some of the policies, even introduced in Germany, their 2035 energy plans still continues to focus on sustainability. We think the current environment will actually accelerate clean energy initiatives, particularly for fuels like hydrogen, which EU is making a large part of its long term energy planwhat we're seeing from the current situation is that you cannot become to reliant on one country or one source of energy, So diversity of supply is critical and we think that pragmatism has come back into the discussion and the role of energy, not just for renewables, but also, as we've mentioned before, gas playing a key critical role. Given the elevated commodity prices, number of major oil companies and ocs are going to report good profits and free cash flow. We think they'll use this to continue actually developing, accelerating their carbcaron carbonization plans, as well as healthy shareholder returns.

Lorenzo Simonelli: We think the current environment will actually accelerate clean energy initiatives, particularly for fuels like hydrogen, which EU is making a large part of its long-term energy plan. What we're seeing from the current situation is that you cannot become too reliant on one country or one source of energy. So diversity of supply is critical. And we think that pragmatism has come back into this discussion and the role of energy, not just renewables, but also, as we've mentioned before, gas playing a key critical role. Given the elevated commodity prices, a number of major oil companies and NOCs are going to report good profits and free cash flow. We think they'll use this to continue actually developing and accelerating their decarbonization plans as well as healthy shareholder returns. And you can see that also with an example like Aramco with its CapEx plans that includes significant hydrogen.

Lorenzo Simonelli: So we think Baker Hughes is very well positioned with gas, LNG, hydrogen, CCUS, oil, and pipelines. And we've got the technologies that are going to continue to drive this transition. All righty. Perfect. Thanks, Lorenzo. Thanks. Our next question coming from the line of Connell Cunningham, Morgan Stanley, your line is open. Yes, thanks. I was hoping maybe we could talk a little bit more about Russia. So just wanted to understand, first off, the data point on the 4% of revenues. Is that already fully accounting for any ruble depreciation impacts? And so is what you're basically guiding to actual activity declines? And I'm curious further to that, is it at this point you have received notification from your customers that your activity will decline, or is that just your expectation based on what you're seeing at the market?

Speaker 4: And you can see that also with an example like a ramco with his CapEx plans. That includes significant hydrogen. So you know, we think bacis hues is very well positioned then with gas, LNG hydrogen C, C? U's oil and pipelines, and we've got the technologies that are going to continue to drive this transition. Perfect placeof thanks. Our next question, coming from the line of conol, and that's with margan Stanley, an selfphin.

Speaker 41: All right perfect thanks, lindzo.

Speaker 28: Thanks.

Speaker 29: Our next question, coming from the line of connell and esestwood, Morgan Stanley LL, let us open.

Speaker 30: Yes's, I was something. Maybe we could ttalkck a little bit more about Russia, So just wanted to understand. First off, the data point on the 4% of revenues: is that already fully accounting for any riuble depreciation impacts? And so is what you're basically guid to. Actual activity declines. And I'm curious further to that.

Speaker 12: Yes thanks, I was something. Maybe we could. We could talk a little bit more about Russia, So just wanted to understand. First off, the data point on the 4% of revenues: is that already fully accounting for any ruble depreciation impacts? And so is what you're basically got into to? You know actual activity declines and I'm curious, you know, further to that, is it at this point you have received notification from your customers that your activity will decline or is that just your expectation based on what you're saying in the market? Yes conor, to hit the first part this does, you know, include the impact of what was going on? You know, with the ruble And as you know that" it's been down and up again and is relatively stable at this point in time and you know you, it represented roughly about 4% of revenues in the first quarter. And look, I'd say in terms of how we're thinking about it, you know, for the full year you got to take a step back and you know, realize that sanctions from the? U's U, K and E? U continue to evolve and are evolving and are making ongoing operations increasingly complex.

Speaker 31: Is it at this point you have received notification from your customers that your activity will decline, or is that just your expectation based on what you're seeing in the market?

Lorenzo Simonelli: Yeah, Connell, to hit the first part, this does include the impact of what was going on with the ruble. As you know, it's been down and up again and is relatively stable at this point in time. You hit it. It represented roughly about 4% of revenues in Q1. Look, I'd say in terms of how we're thinking about it for the full year, you got to take a step back and realize that sanctions from the US, UK, and EU continue to evolve and are evolving and are making ongoing operations increasingly complex and a bit more difficult. Kind of to give you some perspective on Q1, we did see some decremental impact on EBITDA, about the same level on EBITDA as Russia represented in terms of revenue of the total company.

Speaker 32: Con to hit the first part. This does, you know, include the impact of what was going on. You know, with the ruble And as you know that' that's been down and up again and is relatively stable at this point in time and you know you, it represented roughly about 4% of revenues in the first quarter. And look, I'd say, in terms of how we're thinking about it, you know, for the full year you got to take a step back and know, realize that sanctions from U's U, K and E? U continue to evolve and are evolving and are making ongoing operations increasingly complex and and a bit more difficult. And kind of, to give you some perspective on the first quarter, we did see decremental impact on ebitd. About the same level on EBIT does the as Russia represented in terms of revenue of the total company and and it was really driven from, you know, lower volumes, from not being able to move people and assets into the country. I'd say there're also some logistical delays and delivery challenges which largely impacted o F? E in both equipment and and services. And then we also saw some logical delays and delivery challenges in T P's, primarily in services, as well. So those were the two areas that we saw the most significant impact: the quarter from Russia. And if you take a st back and look at what we talked about going forward and kind of the framework that we tried to provide you for the year, we did contemplate everything that we know today and the anticipation that things are going to continue to evolve there. So So, based on what we talked about, terms of the revenue outlook for o F's, you know, low to mid double digits. The low end really assumes that our o F's Russia operation declines over the course of the year to basically and material level, So by the end of the year really really low there are. We do have inventory in the country but you know, given the sanctions, are unable to import key technologies for some of the services. So there will be a drop off over the course of the year, barring something on perscseen, and there will be some impact in T P's associated with that. But look as as we get more clarity on the situation, will clearly react and take the appropriate cost actctions to offsetting the declines and volume which we also included in the framework that we proved you. And then you know, as you think about Russia and the impact on, you know, global environment 'reviously working through supply chain challenges that you know come with things coming out of Russia and ukraine- or not, as the case maybe- and then con you got to takea look to there's going tobesome offsetting activity increase to soak up the supply, you know, to meet the demand that goes away from. You know, potential declines and rsian output and, as you know, that's not going to be one for one in terms of timing. So we are seeing creased activity in North America. You you've seening increased plans, particularly in the Middle East: invest more to, you know, bring more supply to market. So we will see some impacts from that, but there's likely to be a delay versus the impact you see in Russia.

Speaker 5: And a bit more difficult and kind of to give you some perspective on the first quarter, we did see decremental impact on EBITDA. About the same level on EBITDA is as Russia represented in terms of our revenue of the total company and it was really driven from lower volumes, from not being able to move people and assets into the countryi'd say there were also some logistical delays and delivery challenges which largely impacted OFE in both equipment and services, and then we also saw some logistical delays and delivery challenges in TPS, primarily in services, as well. So those were the two areas that we saw the most significant impact in the quarter from Russia. And if you take a step back andlook at what we talked about going forward and kind of the framework that we tried to provide you for the year, we did contemplate everything that we know today and the anticipation that things are going to continue to evolve there. So So, based on what we talked about in terms of the revenue outlook for Os, uplow to mid double digits. The low end really assumes that our Os Russia operation.

Lorenzo Simonelli: And it was really driven from lower volumes, from not being able to move people and assets into the country. I'd say there were also some logistical delays and delivery challenges, which largely impacted OFE in both equipment and services. And then we also saw some logistical delays and delivery challenges in TPS, primarily in services as well. So those were the two areas that we saw the most significant impact in the quarter from Russia. And if you take a step back and look at what we talked about going forward and kind of the framework that we tried to provide you for the year, we did contemplate everything that we know today and the anticipation that things are going to continue to evolve there.

Lorenzo Simonelli: So based on what we talked about in terms of the revenue outlook for OFS up low to mid double digits, the low end really assumes that our OFS Russia operation declines over the course of the year to basically an immaterial level. So by the end of the year, really, really low there. We do have inventory in the country, but given the sanctions, we're unable to import key technologies for some of the services. So there'll be a drop-off over the course of the year, barring something unforeseen, and there'll be some impacts in TPS associated with that. But look, as we get more clarity on the situation, we'll clearly react and take the appropriate cost actions to offset any declines in volume, which we also included in the framework that we provided you.

Speaker 5: Declines over the course of the year to basically in material level. So by the end of the year really really low there. We do have inventory in the country but you know, given the sanctions, are unable to import key technologies for some of the services. So there will be a drop off over the course of the year, barring something unperseen, and there will be some impacts in in T PS associated with that. But look as, as we get more clarity on the situation, will clearly react and take the appropriate cost actions to to offsetting the declines in volume, which we also included in the framework that we provided you. And then you know, as you think, about Russia and the impact on, you know, global environment. We're obviously working through supply chain challenges that you know come with things coming out of Russia and Ukraine or not, as the case may be, and then kindor you've got to take a look to. There's going to be some offsetting activity increase to soak up the supply, you know, to meet the demand that goes away from. You know potential declines in Russian output and, as you know, that's not going to be one for one in terms of timing. So we are seeing increased actiity in North America.

Lorenzo Simonelli: And then as you think about Russia and the impact on the global environment, we're obviously working through supply chain challenges that come with things coming out of Russia and Ukraine or not, as the case may be. And then kind of you got to take a look too. There's going to be some offsetting activity increase to soak up the supply to meet the demand that goes away from potential declines in Russian output. And as you know, that's not going to be one for one in terms of timing. So we are seeing increased activity in North America. You've seen increased plans, particularly in the Middle East, to invest more to bring more supply to market. So we will see some impacts from that, but there's likely to be a delay versus the impact you see in Russia. Yeah. Thanks for all that, Connell.

Speaker 5: You've seen increincreased plans, particularly the Middle E East, to invest more to, you know, bring more supply to market. So we will see some impacts from that, but there's likely to be a delay versus the impact you see in russia.that thanks for all that. The last portion you were talking about there was my follow up. So basically at this point, have you seen any of your major international customers alter plans or accelerate plans or indicate that they're planning to accelerate? Certainly it seems like there is going to be some loss of Russian oil volumes to the market and curious how some of these bigger companies are going to respond to that. Yes know yes yes, we are seeing customers talked about increasing there, increasing their spin plan, I'd sayparticularly. We've seen that in in the Middle East and started to see awards increase. I think you'll start tosee some of that flow through here in the second half of the year and into into 23. obviously we talked about the outlook in North America. That's clearly reaction to what's going on in the market, what's happening in russi and look, you know lrenzo talked about what we're seeing in.

Speaker 30: Yes thanks for all that. The last portion you were talking about there was was my follow up. So basically, at this point, have you seen any of your major international customers alter plans or accelerate plans or indicate that they're planning to accelerate? Certainly it seems like there is going to be some loss of Russian oil volumes to the market and curious how some of these bigger companies going to respond to thatyes, you know yes, we are seeing customers talked about increincreasing there, increasing their spend plan. I'd say particularly we've seen that in the Middle East and it started to seeawards increase and I think'll tosee some of that flow through here in the second half of the year and into into 23. obviously we talked about the outlook in North America. That's clearly reaction to what's going on in the market, what's happening in rushsi and look, you know Lorenzo talked about what we're seeing in T P's orders. You know for the year and the situation has current certainly had an impact on that and ironically, a little bit Connor, as I look at you know everything we're seeing right now, 23 is is shaping up with some pretty good visibility. You know, maybe even a littlebetter than 22 because the volatility right now. But you know, you know with the backlog that we're building on the backup potially eight to $9 billion of orders and T P's with some service tailwind. You saw service orders up in T P's 8% this quarder with strong returns and cash flow with a lot of operators. I think you're likely to see see that continue. And then you know we talked about what you're seeing in the upstream space and, and I talked about that timing disconnect and things coming in later, I think 23 is is shaping up with pretty good visibility and is looking to be pretty strong based on on what we're seeing today. So local manage through the volatility in 22. But I I think we're positioning things to be able to to take advantage of the broader context of things going on in the marketplace across the portfolio.

Lorenzo Simonelli: The last portion you were talking about there was my follow-up. So basically, at this point, have you seen any of your major international customers alter plans or accelerate plans or indicate that they're planning to accelerate? Certainly, it seems like there is going to be some loss of Russian oil volumes to the market. I'm curious how some of these bigger companies are going to respond to that. Yeah. Yes, we are seeing customers talk about increasing their spend plans. I'd say particularly we've seen that in the Middle East, and have started to see awards increase. And I think you'll start to see some of that flow through here in the second half of the year and into 2023. Obviously, we talked about the outlook in North America. That's clearly a reaction to what's going on in the market and what's happening in Russia.

Lorenzo Simonelli: And look, Lorenzo talked about what we're seeing in TPS orders for the year. And the situation has certainly had an impact on that. And ironically, a little bit, Connell, as I look at everything we're seeing right now, 2023 is shaping up with some pretty good visibility, maybe even a little better than 2022 because of the volatility right now. But with the backlog that we're building on the back of potentially $8 to $9 billion of orders in TPS, with some service tailwinds, you saw service orders up in TPS 8% this quarter with strong returns and cash flow with a lot of operators. I think you're likely to see that continue. And then we talked about what you're seeing in the upstream space. And I talked about that timing disconnect and things coming in later.

Speaker 5: In T PS orders for the year and the situation has current certainly had an impact on that and ironically, a little bit Connor, as I look at everything we're seeing right now. 23 is is shaping up with some pretty good visibility, maybe even a little better than 22 because the volatility right now. But you know with the backlog that we're building on the back up potially: eight to $9 billion of orders in TPS with some service tailwinds. You saw service orders up in tps- 8% this quarter with strong returns and cash flow with a lot of operators. I think you're likely to see see that continue and you we talked about what you're seeing in the upstream space and I talked about that timing disconnect and things coming in later. I think 23 is is shaping up with pretty good visibility and is looking to be pretty strong based on what we're seeing today. So look, we'll manage through the volatility in in 22, but I think we're positioning things to be able to take advantage of the broader.

Lorenzo Simonelli: I think 2023 is shaping up with pretty good visibility and is looking to be pretty strong based on what we're seeing today. So look, we'll manage through the volatility in 2022, but I think we're positioning things to be able to take advantage of the broader context of things going on in the marketplace across the portfolio. Got it. Thanks very much. And our next question coming from the line of Scott Gruber with Citi, your line is open. Yes, thanks. So just building upon Connell's last question there, it sounds like the visibility into 2023 is improving. What's the potential for the international OFS market to actually see an acceleration in spending in 2023, given the fact that budgets for this year were set before the surge in oil prices?

Speaker 30: Got it. Thanks very much.

Speaker 5: Context of things going on in the marketplace across the portfolio got it. Thanks very much. Our next question, and coming from a lot of groureement, let's see the group lot self. Yes, So just building upon Connor's last question, there it sounds like the visibility in the 23 is improving. What's the potential for the international of's market to? It's actually seen an acceleration and spending in 23, given the fact that your budgets for this year were set? Know before the the surgeon oil prices some additional color if you will on you know longer cycle projects. Know building building in the queue to support growth in in 23 and beyond.

Speaker 23: Now next question. Com from a lot of thought group, I would see the group you us open.

Speaker 33: Yes for just building upon Connor's last question. There it sounds like the visibility in 23 is improving. What's the potential for the international OFS market? It's actually seen an acceleration and spending 23, given the fact that budgets for this year were set before the surgeon oil prices and some additional color, if you will on you a longer cycle projects building, building in the queue to support growth in in 23 and beyond.

Lorenzo Simonelli: And some additional color, if you will, on longer cycle projects, building in the queue to support growth in 2023 and beyond? Yeah, Scott, just on OFS international outlook, based on the conversations with our customers, we expect a broad-based recovery internationally with all major geographies, and overall international growth in the low to mid-teens. We believe the Middle East could be one of the strongest markets in 2022 and is likely in the early stages of a growth cycle as the NOCs in the region look to add production capacity on a gradual long-term basis. So good outlook going into 2023 as well. We also expect to see another strong year of growth in Latin America, led by Brazil and Mexico. And then as we go forward, we would expect North Sea and Asia Pacific to see solid growth in 2022.

Speaker 23: yesscot just done. internnational look based on the conversations with our customers, we expect broad based recovery internally with all major geographies, an overall internnational growth in the low tomid-teens. We believe Middle East could be one of the strongest markets in two and twenty two and is likely in the early stages of a growth cycle as the ocs in the region look to add production capacity on a gradual long term basis- a good outlook going into 2020 three as well. We also expect to see another strong year of growth in Latin America, led by Brazil and Mexico, and then, as we go forward we would expect North Sea and Asia, Pacific todisseease a solid growth in 2020 two and not a strongest Middle East or Latin America, but solid growth and largely West Africa is also seeing some incremental activity and strong growth as we go forward. I think on the offshore side, we'd say at a macro level, the trends in the Subsea and offshore markets continue to improve and as you look at our first quarter as well, on an orders perspective you can see that and the subsea tree and flexible pipe market. We expect to see a solid increase and industry awards this year and see it coming back for the foreseeable future.

Speaker 4: Yes it'scot just done. International outlook: based on the conversations with our customers, we expect broad based recovery internationally, with all major geographies, and overall international growth in the low to mid-teens. We believe Middle East could be one of the strongest marketts in 2022 and is likely in the early stages of a growth cycle as the nnoocs in the region look to add production capacity on a gradual long term basis. So good outlook going into 2023 as well. We also expect to see another strong year of growth in Latin America, led by Brazil and Mexico, and then, as we go forward, we would expect North Sea and Asia, Pacific todissees, solid growth in two and twenty two and not a strong as Middle East or Latin America, but solid growth and largely West Africa is also seeing some incremental activity and strong growth as we go forwardi think on the offshore side, we'd say at a macro level, the trends in the Subsea and offshore markets continue to improve and as you look at our first quarter as well, on an orders perspective, you can see that.

Lorenzo Simonelli: And not as strong as the Middle East or Latin America, but solid growth. And lastly, West Africa is also seeing some incremental activity and strong growth as we go forward. I think on the offshore side, we'd say at a macro level, the trends in the subsea and offshore markets continue to improve. And as you look at our first quarter as well, from an orders perspective, you can see that. In the subsea tree and flexible pipe market, we expect to see a solid increase in industry awards this year and see it coming back for the foreseeable future. Got it. And with some of the international operators pulling forward some projects and responding to oil prices, can you provide some color on the pricing trends you're seeing on the international side of the OFS market?

Speaker 4: In the subsea tree and flexible pipe market. We expect to see a solid increase in industry awards this year and see it coming back for around the foreseeable future. Got and with some of the international operators point forward some, some projects and responding to oil prices, you providide some color on the pricing trends you're seeing on the international side of Os market legine things are getting better, but do you foresee sufficient momentum there to propell above normal incrementals in 23 and ue to expandend margins to be on the 20% thcial itcot generally speaking, with re starting to get good pricing leverage and getting net pricing, particularly in North America but also in some of the international markets. Right now it varies by market but we're having more success and better discussions around higher pricing levels.

Speaker 33: Got and with some of the international operators point forward some projects and responding to oil prices, you providide some color on the pricing trends you're seeing on the international side of Os market. imagagine things are getting better, but do you foresee sufficient momentum there to propel above normal incrementals in 23 and continue to expand your margins? Know beyond the 20% thcial? it'sgott, generally speaking, with starting to get good pricing leverage and getting net pricing, particularly in North America but also some of the international markets. Right now it varies by market but we're having more success and better discussions around higher pricing levels.

Lorenzo Simonelli: Imagine things are getting better, but do you foresee sufficient momentum there to propel above normal incrementals in 2023 and continue to extend your margins beyond the 20% threshold? Yeah, Scott, generally speaking, we're starting to get good pricing leverage and getting net pricing, particularly in North America, but also in some of the international markets. Right now, it varies by market, but we're having more success and better discussions around higher pricing levels. Yeah. And look, I'd say particularly from an OFS perspective, as the chemicals business recovers, I would expect to see some improvement in incrementals there. And then the only thing I would say, Scott, is we're all dealing with inflation in the market, and we're working hard to get surcharges in and price increases in. But that's something you got to take into consideration as you think about the next 12 months or so. Thanks.

Speaker 17: yeah and look, I'd say particularly, you know, from an o's perspective, as the chemicals business recovers, I would expect to see some improvement in incrementinals there. And then, you know, the only thing I wouldsay: it's got. You know we're all dealing with inflation in the market and and you know we're working hard to get surcharges in and price increases in. But that's something you ve gotTa take into sideration as you think about the next, you know, 12 months or so.

Speaker 8: yeah and look, I'd say particularly, you know, from an o F's perspective, as the chemicals business recovers, I would expect to see some improvement and incrementals there. And then you know the only thingguy say it's got it. You know we're all dealwith with flation in the market and and you you know we're working hard to get surcharges in and price increases in. But that's something you've gottato into into sideration as you think about the next. You know, 12 months or so, Thank' for sure. The go next question coming from the lineup.

Speaker 33: Thanks for shaate the code.

Lorenzo Simonelli: Appreciate the call. Our next question coming from the line of Arun Jayaram with JPMorgan Chase. Your line is open. Yeah, good morning. You booked Plaquemines, the LNG system this quarter with Venture Global. And I believe Calcasieu Pass was booked in Q3 2019. So I was wondering if you could talk a little bit about the margin potential of this project relative to Calcasieu Pass and obviously a much more challenging supply chain and inflationary environment. And what are you doing in order to protect your margins from those inflationary pressures? Yeah, Arun, look, we're very pleased that we've gotten the second phase of our work with VG here with Plaquemines. And look, I think it's fair to assume that margins will be similar to what we saw on Calcasieu. I mean, there's a couple of things going on here.

Speaker 1: No next question coming from the line up.

Speaker 1: A ruined gyram with J P Morgan chase you'll. Lot is open.

Speaker 34: Good morning. You book platamus, the LNG system, this quarter with venture global and I believe calasssu pass was was booked in the third quarter of 2019. I was wondering if you could talk a little bit about the margin potential of this project relative to calus su pass and obviously a much more challenging supply chain in the flationary environment, and what are you doing in order to protect your margins from those inflationary pressures?

Speaker 2: I gyirron with J P margin chaase is help. Good morning. You book Black the L N T system this quarter with venture global and I believe calus su pass was was booked in the third quarter of 2019. der, if you could talk a little bit about the margins potential of this project relative to call us su pass, and obviously a much more challenging supply chain in the flationary environment, and what are you doing in order to protect your margins from those inflationary pressures? yeah look we, we're very pleased that you know we've got in the second phase of you know our work with V G here, with with plaam end tonight. Look, I think it's fair to assume that you know margins will be similar to what we saw on calwcas. I mean, there's a there's a couple of things going on here. Obviously we've got experience with this hpe of project with this customer before, So there's some natural synergies that come through and in this project that we didn't have in the you know the first one you did mention inflation there. Obviously we priced that in.

Speaker 35: yeah look, we we're very pleased that you know we've got in the second phase of you know our work with V G here, with with plaammans ight. Look, I think it's fair to assume that you know margins will be similar to what we saw on calc. I mean, there's a there's a couple of things going on here. Obviously we've got experience with this type of project with this customer before, So there's some natural synergies that come through and this project that we didn't have in in the you know the first one you did mention inflation there. Obviously we- we priceed that in and you know' have worked on productivity to to help offset that as well. And look, you can imagine, as we've said before, know when we you know when we quote and when we win orders we go out and we place, you know, orders for a long lead items, certainly have a view of what we believe is happening in the market today and what will happen and take the appropriate actions to to protect ourselves and the customer from that inflation as as much as possible. But look, there's a great order for us. You know's similar to what we did with calc and you heard lrenzo talk about. You know we delivered all these modules ahead of schedule, which was very helpful for you know V G getting to first cargo and in record time. So our track record here is pretty good and and we're really excited about this, this space and this order and our, our partnership with the G.

Lorenzo Simonelli: Obviously, we've got experience with this type of project with this customer before. So there's some natural synergies that come through in this project that we didn't have in the first one. You did mention inflation there. Obviously, we've priced that in and have worked on productivity to help offset that as well. And look, you can imagine, as we've said before, when we quote and when we win orders, we go out and we place orders for long lead items. Certainly have a view of what we believe is happening in the market today and what will happen and take the appropriate actions to protect ourselves and the customer from that inflation as much as possible. But look, this is a great order for us. It's similar to what we did with Calcasieu.

Speaker 5: And you know it, have worked on productivity to help offset that as well. And look, you can imagine, as we've said before, you know when we, you know when we quote and when we win orders we go out and we place. You know orders for a long lead items certainly have a view of what we believe is happening in the market today and what will happen, and take the appropriate actions to to protect ourselves and the customer from that inflation as much as possible. But look's a great order for us. You know's similar to what we did with calccassue and you heard lrenzo talk about. You know we delivered all these modules ahead of schedule, which was very helpful for you know V? G getting to first cargo and in record time. So our track record here is pretty good and we're really excited about this space and this order and our our partnership with the G great and I just had a follow up. I think you deliver calus su, pass and listen than 30 months or so, which is very, very impressive. one of the questions we've been getting from clients is given up. You know what's going on in L? Ng is this fast LNG concept, which is all shore.

Lorenzo Simonelli: You heard Lorenzo talk about we delivered all these modules ahead of schedule, which was very helpful for VG getting to first cargo in record time. So our track record here is pretty good, and we're really excited about this space and this order and our partnership with VG. Great. I just had a follow-up. I think you delivered Calcasieu Pass in less than 30 months or so, which is very, very impressive. One of the questions we've been getting from clients is given what's going on in LNG. Is this fast LNG concept, which is offshore? These are generally 1/3 of the size of some of the onshore facilities. But can you talk a little bit about that? Does Baker have a toolkit that can participate in the offshore LNG market? How do you see this playing out?

Speaker 36: Great and I just had a follow up. I think you deliver calcus, you pass and lessen than 30 months or so, which is very, very impressive. one of the questions we've been getting from clients is given up. What's going on in LNG is this fast LNG concept which is offshore? These are generally a third of the size of some of the the onshore facilities, but could you talk a little bit about that does? Does Baker have it a toolkit that can participate in the offshore LNG market? How do you see this playing out and is this a Sandbox? You don't want to play plan.

Speaker 13: youknow these are generally a third of the size of some of the know the onshore facilities. But could you talk a little bit about that? Does this Baker have a talk ketit that can participate in the offshore LNG market? You know, how do you see this playing out? And is this this stand BU? You you't want to play play and so I think you know well we have capability and capacity to handle many different types of LNG equipment orders at the same time. We've got great capability in our facilities and as you look at the thiratty years we've been in LNG, we've always been looking at new technologies to reduce the cycle time and also to plug and play. So this new moderorized approach to fast LNG can be applied both to onshore and offshore and the number of customer discussions are intensifying around the speed to market. So I think again, with the technology enhancements we've made, we're well positioned to capture the market here. Very Thank whatour next question, coming from the line of steeven G, with people, you lot of selfin.

Lorenzo Simonelli: And is this a sandbox you'd want to play in? So Arun, I think you know well. We have capability and capacity to handle many different types of LNG equipment orders at the same time. We've got great capability in our facilities. And as you look at the 30 years we've been in LNG, we've always been looking at new technologies to reduce the cycle time and also to plug and play. So this new motorized approach to fast LNG can be applied both to onshore and offshore. And the number of customer discussions are intensifying around this speed to market. So I think, again, with the technology enhancements we've made, we're well positioned to capture the market here. Great. Thanks a lot. And our next question coming from the line of Stephen Gengaro with Stifel, your line is open. Thanks. Good morning, gentlemen. Morning. Good morning.

Speaker 49: So I think well, we have capability and capacity to handle many different types of LNG equipment orders. At the same time, we've got great capability in our facilities and as you look at the 30 years we've been in LNG, we've always been looking at new technologies to reduce the cycle time and also to plug in play. So this new modernized approach of fast LNG can be applied both to onshore and offshore, and the number of customer discussions are intensifying around this speed to market. So I think again, with the technology enhancements we've made, we're well positioned to capture the market here.

Speaker 37: Great Thanks a lot.

Speaker 23: Our next question, coming from the line of stevensonjar with st, want us open?

Speaker 38: Thanks good morning gentlemen. ning ning, can you you going back to your prepared comments on the oilfield services side and some of the changes you've made there, can you talk about sort of the path to 20% EBITDA margins by the end of the year and maybe with some color around the impact, some of these changes you've made?

Lorenzo Simonelli: Do you mind going back to your prepared comments on the oilfield services side and some of the changes you've made there? Can you talk about sort of the path to 20% EBITDA margins by the end of the year and maybe with some color around the impact of some of these changes you've made? Yeah. Look, so I'd say overall, we still feel confident, Stephen, in hitting our margin target rates and getting OFS to a 20% EBITDA margin rate on a consistent basis. And I'd say from here, there's a couple of things that should drive margin improvement. The biggest driver will be better profitability in our chemicals business, which you know has been squeezed by higher input costs, higher logistics and shipping costs, and some raw material shortages. As Lorenzo mentioned, we put in pricing increases and surcharges to help offset that.

Speaker 14: thanksgood morning, gentlemen ning. Can you you find going back to your prepared comments on the oilfield services side and some of the changes you've made there? Can you talk about sort of the path to 20% EBITDA margins by the end of the year and maybe with some color around the impact some of these changes you've made?

Speaker 50: Yes you know, look So say overall we still feel confident even in and hitting our margin arget rates, getting F's to a 20% EBITDA marg rate, you know, on a consistent basis. And I'd say from here, you know there's a couple things that should drive mar margin improvement. The biggest driver will be better profitability in our cheicals business which is, you know, is been squeezed by higher input costs, higher logistics and shipping costs and some raw material shortages. You know, as lorenza mentioned, we've put in pricing increases and surcharges to help offset that. You know chemicals had about 170 basis point drag on o F's margins in the first quarter, know. So you know, normalization of broader logistics and supply chain issues that have disrupted shipment schedules, you know here in the quarter should also should also help with with that these two issues if you you know, combined with the volume improvement that we're we're expecting should be enough to get us to the the 20% level. In addition, you know we're set to bring on new chemical plants and Singapore and Saudi and 20, two and 20, three which are lower the cost for chemicalses, get us closer to some of our customers and give us some advantages for our Eastern Hemisphere delivery. You we're also continuing to work other productivityinitiatives with Maria cloudy in the team, primarily around service delivery with our remote operation continuing to drive margin improvements there and we have been executing on, you know, supply chain rationalization as well. As you know, sourcing from some lower cost countries that that's been partofa multiyear PL. So we've got a lot of things that we have been working and are continuing to work to get marg rates to that 20% level. As I said you, sort of broader supply chain and logistics and normalization of the chemicals margins which we think have trough here in the first quarter will will get us there and there should be some isicing on top and Stephen. Just to add the new organization that we announced. It's going to improve the speed of decision making and also be able to capitalize on the growth opportunities in the market. So it's very much custommer of focus and allows us to be more responsive and more comprehensive in integrated solutions and capture more of the market share of operatinging cost related to spend. So it's what our customers have been asking for. And we're deliing.

Speaker 8: Yes you know, look. So I'd say overall we still feel confident, steeven in in hitting our margin target rates and getting o F's to a 20% EBITDA margin rate, you know, on a consistent basis. And I'd say from here, you know there's a couple things that should drive mar margin improvement, I M the biggest driver will be better profitability in our chemicals business, which is, you know, has been squeezed by higher input costs, higher logistics and shipping costs and some raw material shortages. You know, as Lorenzo mentioned, we put in pricing increases and surcharges to help offset that. But you know chemicals had about 170 basis point drag on o F's margins in in the first quarter, you know. So look, you know, normalization of broader logistics and supply chain issues that have disrupted shipment schedules, you know, here in the quarter should also should also help with with that, these two issues.

Lorenzo Simonelli: But chemicals had about a 170 basis points drag on OFS margins in Q1. So look, normalization of broader logistics and supply chain issues that have disrupted shipment schedules here in the quarter should also help with that. These two issues, if you combine with the volume improvement that we're expecting, should be enough to get us to the 20% level. In addition, we're set to bring on new chemical plants in Singapore and Saudi Arabia in 2022 and 2023, which will lower the cost for chemicals, get us closer to some of our customers, and give us some advantages for our Eastern Hemisphere delivery. We're also continuing to work on other productivity initiatives with Maria Claudia and the team, primarily around service delivery, with our remote operations continuing to drive margin improvements there.

Speaker 5: If you combined with the volume improvement that we we're expecting, should be enough to get us to the the 20% level. In addition, we're set to bring on new chemical plants and Singapore and Saudi and 20, two Y, three which are lower the cost for micals, get us closer to some of our customers and give us some advantages for our Eastern Hemisphere delivery. We're also continuing to work other productivity initiatives with Maria cloudy in the team, primarily around service delivery with our remote operation continuing to drive margin improvements there and we have been executing on supply chain rationalization as well as sourcing from some lower cost countries and that's been part of a multiyear plan. So we've got a lot of things that we have been working and are continuing to work to get the margin rates to that 20% level. As I said, sort of broader supply chain in logistics and normalization of the chemicals margins which we think of trough tihere in the first quarter will get us there and then there should be some icing on top.

Lorenzo Simonelli: And we have been executing on supply chain rationalization as well as sourcing from some lower-cost countries, and that's been part of a multi-year plan. So we've got a lot of things that we have been working and are continuing to work to get the margin raised to that 20% level. But as I said, sort of broader supply chain and logistics and normalization of the chemicals margins, which we think have troughed here in Q1, will get us there. And then there should be some icing on top. And Stephen, just to add, the new organization that we announced is going to improve the speed of decision-making and also be able to capitalize on the growth opportunities in the market.

Speaker 4: And Stephen, just to add. The new organization that we announced is going to improve the speed of decision-making and also be able to capitalize on the growth opportunities in the market. So it's very much customer focus that allows us to be more responsive and more comprehensive in our integrated solutions and capture more of the market share of operating costs related to spend. So it's what our customers have been asking for and we're deliveringthank as aquick follow up on the chemicals. On the supply chain sidei mean clearly Russia kind of disrupted what look like I big a stabilization. What's your visibility and sort of confidence that things will sort of start to normalize here as you get into the second half of the year?

Lorenzo Simonelli: So it's very much customer-focused and allows us to be more responsive and more comprehensive in our integrated solutions and capture more of the market share of operating costs related to spend. So it's what our customers have been asking for, and we're delivering. Thanks. And as a quick follow-up, on the chemicals on the supply chain side, I mean, clearly, Russia kind of disrupted what looked like, I think, a stabilization. But what's your visibility and sort of confidence that things will sort of start to normalize here as you get into the second half of the year? Yeah. Look, I'd say we started to see some encouraging signs in the latter part of Q4 as chemical prices started to stabilize and logistics started to look a bit better.

Speaker 39: And as a quick follow-up on the chemicals on the supply chain side and mean mean clearly Russia kind of disrupted what looked like, I think, a stabilization. But what's your visibility and sort of confidence that things will sort of start to normalize here as you get into the second half of the year?

Speaker 40: yeah look, I'd say, you know we started to see some encouraging signs and you know, in the latter part of the fourth quarter, as you know, chemical prices started to stabilize and logistics started to look a bit better. But obviously with everything going on in Russia and the increase in and commodity prices that that's created some more headwinds. We have seen stabilization in the broader you know base chemical spase But I'd say where're inflation is still toughes in the specialty chemical market and you know, as I mentioned, we had some unique issues with the lier who had a facility that was basically shut down and getting that facility back up and running has Ta them a bit longer. So we've been having to get some alternative supply that starting to normalize as well. So we should see some, some recoveries come through and then look, we've made some. We've made some changes. We recently changed out leadership and chemicals. We're doing some specific things and supply chain to deal with the current environment. We broadened our sourcing relationships, just given what we experience with this large supplier that we had. We've actually Ta a look and have eliminated some products where you know volumes were low and margins were relatively low, to free up the capability to focus on some areas where we make more money and deal with some of the supply chain challenges and focus the team there. And then, you know, with the new factories coming on, it's allowed us an opportunity to take a step back and look at the overall supply base, how we're contracting and we've made some changes there that we should start to see come through here in the second half. But you know, good visibility to what's what's going on there, the team understands it just working through. You know, a little bit of a perfect storm here that seems to be abating.

Speaker 8: yeah look, I'd say, you know we started to see some encouraging signs and you know, in the latter part of the fourth quarter, as you know, chemical prices started to stabilize and logistics started to look a bit better. But obviously, with everything going on in Russia and the increase in and commodity prices, that that's created some more headwinds. We have seen stabilization in the broader, you know, base chemical space but I'd say, where inflation is still toughes, in the specialty chemical market and you know, as I mentioned, we had some unique issues with a supplier who had a facility that was basically shut down and getting that facility back up and running has taken them a bit longer. So we've been having to get some alternative supply that starting to normalize as well. So we should see some, some recoveries come through. And then look, we've made some. We've made some changes. We recently changed out leadership and chemicals. We're doing some specific things and supply chain to deal with the current environment. We broadened our sourcing relationships, just given what we experienced with this large supplier that we had. We've actually taken a look and have eliminated some products where you know, volumes were low and margins were relatively low.

Lorenzo Simonelli: But obviously, with everything going on in Russia and the increase in commodity prices that's created some more headwinds, we have seen stabilization in the broader base chemical space. But I'd say where inflation is still tough is in the specialty chemical market. And as I mentioned, we had some unique issues with a supplier who had a facility that was basically shut down, and getting that facility back up and running has taken them a bit longer. So we've been having to get some alternative supply. That's starting to normalize as well. So we should see some recoveries come through. And then, look, we've made some changes. We've recently changed out leadership in chemicals. We're doing some specific things in supply chain to deal with the current environment. We've broadened our sourcing relationships just given what we experienced with this large supplier that we had.

Lorenzo Simonelli: We've actually taken a look and have eliminated some products where volumes were low and margins were relatively low to free up the capability to focus on some areas where we make more money, and deal with some of the supply chain challenges, and focus the team there. And then with the new factories coming on, it's allowed us an opportunity to take a step back and look at the overall supply base, how we're contracting, and we've made some changes there that we should start to see come through here in the second half. But good visibility to what's going on there. The team understands it. Just working through a little bit of a perfect storm here that seems to be abating. Very good. Thank you. And our next question coming from the line of David Anderson with Barclays. You'll let us open. Hey, good morning, Lorenzo.

Speaker 27: Very good, Thank you.

Speaker 23: And our next question coming from the lineup David Anderson with Berkeley if you let us open.

Speaker 27: Good morning Lorenzo. So question: a global push to build out LNG capacity. I have heard ancability was a minimum of four years to.

Lorenzo Simonelli: Question on the global push to build out LNG capacity. I had heard anecdotally it was a minimum of 4 years to bring a new train on start to finish. But you're talking about Plaquemines in closer to 29 months. You're talking about modular design. Is this the new standard that we should be thinking about these projects? And I guess related to that, is there a limit to how much equipment you can provide in a given year in terms of your manufacturing capacity if these projects are accelerated? Yeah, Dave. I think you have to go back to the tenure we've had in the LNG cycle. We've always said that there's going to be small scale, mid-scale, large scale, and we're going to be participating in all of those and also looking at modular as well as stick-built.

Speaker 51: Bring new train on tostart to finish your time talking main in closer to 29 months. Its modular design. Is this the new sstandard that we should be thinking about? These projects and I guess related to that, is there a limit to how much equipment you can provide a given year in terms of your manufacturing capacity if these projects are accelerate?

Speaker 21: Yes Dave, then I think you have to go back to the tenure we've had in the LNG cycle and we've always said that there's going to be small scale, mid scale, large scale and we're going to be participating in all of those and also looking at modular as well as stick bubuild and, depending on the customers' needs, we're going to be providing them. Clearly, the modular is a faster the market. It is a plug-and play model. So we're seeing increased interest from some of the independent players and I'd say also within North America, globally with some of the larger projects. They still continue. On the stick bubuild, we don't have a challenge on capacity. Again, we've had big flows of LNG projects in the past and we feel good about being able to manage it and our facilities that are set up in florence and masass and events in Italy well prepared for the LNG project wave.

Speaker 15: In terms of your manufacturing capacity if these projects are accelerated.

Speaker 4: Yes day, then I think you have to go back to the tenure we've had in the LNG cycle and we've always said that there's going to be small scale, mid scale, large scale and we're going to be participating in all of those and also looking at modular as well as stick build and, depending on the customers' needs, we're going to be providing them. Clearly, the modular is a fastter with the market. It is a plug-and play model. So we're seeing increased interest from some of the independent players and I'd say also within North America, globally with some of the larger projects. They still continue on the stick bubuild, we don't have a challenge on capacity again, we've had big flows of LNG projects in the past and we feel good about being able to manage it and our facilities that are set up in florence and masassa and events in Italy well prepared for the LNG project wave.

Lorenzo Simonelli: Depending on the customer's needs, we're going to be providing them. Clearly, the modular is a faster-to-market. It is a plug-and-play model. So we're seeing increased interest from some of the independent players, and I'd say also within North America. Globally, with some of the larger projects, they still continue on the stick-built. We don't have a challenge on capacity. Again, we've had big flows of LNG projects in the past, and we feel good about being able to manage it. And our facilities that are set up in Florence, Massa, and Avenza in Italy are well prepared for the LNG project wave. So if we think about the US build-out of export capacity, are there any other kind of areas where you think there are bottlenecks that need to be freed up?

Speaker 52: So if we think about the? U's buildout or export capacity, what are? Are there any other kind of areas where you think there are bottlenecks that need to be freed up and would you expect most of the awards going forward to in this modular category? Just curious how you think about that kind of supply. You're just one part of it, of course. I'm just wondering, looking out the rest of that, are there other areas that are at bottlenecks that could eitherto speed up or slow down these projects?

Speaker 16: So if we think about the? U's build out export capacity, what? Are there any other kind of areas where you think there are botlenes that need to be freed up? Would you expect most of the awards going forward to be this modular category? Just curious how you think about that kind of supply to you're just one part of the course. I'm just wondering, looking at the rest of that, other areas that are at bottlenecks that could need to speed up or slowit on the projectsi think the area that people are looking at and also reacting to is on the EPC side, and that's one of the areas that I think it's a focus right now. I'd say also the modular approach reduces some of the dependence on the fuhotal aspect of epcs And so it's a fostter approach from that respective, but labor continues to be constrained And so that's something that's being looked at.

Lorenzo Simonelli: Would you expect most of the awards going forward to be in this modular category? Just curious how you think about that kind of supply chain. You're just one part of it, of course. I'm just wondering, looking at the rest of that, are there other areas that are at bottlenecks that could either speed up or slow down these projects? I think the area that people are looking at and also reacting to is on the EPC side. That's one of the areas that I think is a focus right now. I'd say also the modular approach reduces some of the dependence on the full aspect of EPCs. So it's a faster approach from that perspective. But labor continues to be constrained. So that's something that's being looked at. Great. Thank you.

Speaker 8: I think the area that people are looking at and also reacting to is on the EPC side, and that's one of the areas that I think it's a focus right now. I'd say also, the moduular approach reduces some of the dependence on the full aspect of epcs, And so it's a faster approach from that respectctive, but labor continues to be constrained, And so that's something that's being looked at.

Speaker 52: Ok Thank you.

Speaker 23: A next question coming from the line of Roger Reed.

Lorenzo Simonelli: And our next question coming from the line of Roger Read with Wells Fargo. Your line is open. Yeah. Thank you. Good morning. How are you? Good. Hey, Roger. Just a couple of quick questions. The first one is you've made the comment about supply chain easing up as the year goes on. And I understand chemicals are a little different than some of the others. But as we think of some of the pieces that will go into these LNG orders, some of the issues going over in China, is there any risk of that affecting? Hey, Roger. I'll go ahead. You cut off there a little bit. But on. Sorry. That's all right. On supply chain, it tends to be challenging. And obviously, with everything going on in the global geopolitical space, it's been a little more challenging.

Speaker 1: With monte' bargo, you'll on to sopen.

Speaker 30: yeah Thank you. Good morning. How are you a Roger?

Speaker 42: Just a couple of quick questions. The first 1: as you made the comment about supply chain easing up as a year goes on and understand chemicalsis a little different than some of the others, But as we think of some of the pieces that will go into these LNG orers some of the issues going over in china- is there any risk of that affecting?

Speaker 23: ve ahead. You cut a little bit but you know, on on that's all right. On supply chain, it tends to be, you know, challenging and obviously with everything going on in the global, you know, geo political space, it's been, youit's been, a little more challenge. But look, ID say, from how it, how it impacts us and how we're dealing with it. We're managing, you know, the price increases in various metals like copper and steal and nickel. There's there's no supply issues, just managing through those pricing. And you can imagine that that's going into our quotes. And to deal with all of this we have taken down you know timing and validity of our quotes to be able to to deal with this. So So customers know what's going on and we can have good visibility into what the cost of these projects are going to be. Look, from casting and forgaging standpoint, still able to get, you know, supply we're dealing with, you know, scarcity in Europe and higher pricing there. So we're seeing, you know, what we're doing with our customers. Our suppliers are doing as well, with quotes are only valid for, you know, a shorter period of time, given the raw material pricing and the unique energy challchallenges in Europe . But look, that's the beauty of being part of a global company like Baker use. I mean. We've been able to sht supply to china- we focused on Northwest china- be able to deal with some of the court issues and things we're seeing. And COVID-19- we had really good experience there. We've also moved some supply to to Mexico and India. So we are able to pivot because we've got a large supply base and can direct that demand, you know, to different places. So we feel good about what we're doing there. On supply in, we expect to see some stilization come through but have a great sourcing team you know, working with the pros team to make sure we can fulfill. On the demand that we see coming through. From a logistic stand, ID say the team is done an outstanding job of managmanaging that. Our inflation we've seeing in logistics is well below the headline. You know prices that you've seen we've changed know ports that we're using in North America and China. So we've been incredibly reactive here. I don't see it being a big constraint today for the, for the L N G cycle, that' seeing, but that's something that will. We'll have to watch as it evolves.

Speaker 5: It's been a little more challengge, but look, I'd say, from how it, how it impacts us and how we're dealing with it. We're managing, you know, the price increases in various metals like copper and steel and nickel. There's there's no supply issues, just managing through those pricing and you can imagine that that's going into our quotes. And to deal with all of this, we have taken down the you know timing and validity of our quotes to be able to to deal with this. So So customers know what's going on and they can have good visibility into what the cost of these projects are going to be. Look, from a casting and forging standpoint, still able to get you know supply. We're dealing with some you know scarcity in Europe and higher pricing there. So we're seeing you know what we're doing with our customers. Our suppliers are doing as well with know quotes are only valid for, you know, a shorter period of time, given the raw material pricing and the unique energy challenges in Europe . But look, that's the beauty of being part of a global company like Baker hues. I mean, we've been able to shift supply.

Lorenzo Simonelli: So we're seeing what we're doing with our customers; our suppliers are doing as well, with quotes only valid for a shorter period of time given the raw material pricing and the unique energy challenges in Europe. But look, that's the beauty of being part of a global company like Baker Hughes. I mean, we've been able to shift supply into China. We focused on Northwest China to be able to deal with some of the port issues and things we're seeing in COVID. We've had really good experience there. We've also moved some supply to Mexico and India. So we are able to pivot because we've got a large supply base and can direct that demand to different places. So we feel good about what we're doing there on supply chain.

Speaker 5: Into China. We focused on Northwest China to be able to deal with some of the court issues and things we're seeing in coin. We had really good experience there. We've also moved some, some supply to Mexico and India So we are able to pivot because we've got a large supply base and can direct that demand to to different places. So we feel good about what we're doing there. On supply chain, we expect to see some stabilization come through but have a great sourcing team working with the projects team to make sure we can fulfill on the demand that we see coming through. From a logistics standpoint, I'd say the team has done an outstanding job of managing that. Our inflation we've seen in logistics is well below the headline prices that you've seen. We've changed ports that we're using in North America and China, So we've been incredibly reactive here. I don't see it being a big constraint today for the for the LNG cycle that we're seeing, but that's something that we we'll have to watch as it evolves.

Lorenzo Simonelli: We expect to see some stabilization come through, but have a great sourcing team working with the projects team to make sure we can fulfill on the demand that we see coming through. From a logistics standpoint, I'd say the team has done an outstanding job of managing that. Our inflation we've seen in logistics is well below the headline prices that you've seen. We've changed ports that we're using in North America and China. So we've been incredibly reactive here. I don't see it being a big constraint today for the LNG cycle that we're seeing. But that's something that we'll have to watch as it evolves. Okay. Great. Thanks. And then the follow-up is, as we think about just, we had one of your competitors yesterday talk about exceptional tightness in North America.

Speaker 43: Ok great thanks, and that the follow up is we think about. Just, you know we had one of your competitors yesterday. Talk about exceptional tightness, North America. I was just curious your view on availability and of equipment labor et CEA, as we think about the international markets ramping up and at what point you would see, you know, significant tightness really helping out on the pricing side. There I understand, think you get better is this year, goes along, given the guidness. But you know what we could see things get very, very good on the o, F's and F side. yeah look, I'd say broadly tightness you're seeingoutside the U's, it'sits ilar. What're seeing inside in North America. You know some, some labor tightness you know around the globebal in some markets not is as much as you're seeing in in North America. And look, just given the overall increase in activity you are are, see tightness and supply of equipment. I think we've all got capability and that we've got capability to ramp up and have been planning on that. But but look, when you've got demand up is as much as you're seeing in North America and globally general economic tendencies come back into play and you start to see the ability to, you know, have more constructive pricing discussions, deal with you know some of those supply demand issues and I'd say you know the international market, as you know is more. You know longer term contract base versus spot market, like you see in North America where you see some, you know real opportunity here is on on on some of that spot business and and I'd say we're being very constructive with our customers, taking into account what we're seeing on the supply chain, what we're seeing in overall demand and you know it's it's a constructive backdrop for for o F's at the moment.

Speaker 11: Ok great thanks. And the follow up is: we think about just. You know we had one of your competitors yesterday talk about exceptional tightness and North America. I was just curious your view on availability and of equipment labor et CEA, as we think about the international markets ramping up and at what point you would see, you know, significant tightness really helping out on the pricing side. There I understand things you get better is this year goes along given the guidness. But you know what we could see things get very, very good on the L? F's and F? fe side. yeah look, I'd say broadly tightness you're seeing out of the? U's, it'sit's similar what you're seeing inside in North America. You know some, some labor tightness you know around the globe in some market, S not as much as you're seeing in North America. And look, just given the overall increase in activity you are are see tightness in supply of equipment. I think we've all got capability. I know we've got capability to ramp up and have been planning on that, but but look, when you've got demand up is as much as you're seeing in North America and globally, general economic tendencies come back into play and you start to see the ability to.

Lorenzo Simonelli: I was just curious, your view on availability of equipment, labor, etc., as we think about the international markets ramping up and at what point you would see significant tightness really helping out on the pricing side there. I understand things should get better as this year goes along given the guidance, but where we could see things get very, very good on the OFS and OFE sides. Yeah. Look, I'd say broadly, tightness you're seeing outside of the US, it's similar to what you're seeing inside of North America. Some labor tightness around the globe in some markets. Not as much as you're seeing in North America. And look, just given the overall increase in activity, you are seeing tightness in supply of equipment. I think we've all got capability. I know we've got capability to ramp up and have been planning on that.

Lorenzo Simonelli: But look, when you've got demand up as much as you're seeing in North America and globally, general economic tendencies come back into play, and you start to see the ability to have more constructive pricing discussions, deal with some of those supply-demand issues. And I'd say the international market, as you know, is more longer-term contract-based versus spot market like you see in North America. Where you see some real opportunity here is on some of that spot business. And I'd say we're being very constructive with our customers, taking into account what we're seeing on the supply chain, what we're seeing in overall demand. And it's a constructive backdrop for OFS at the moment. Great. Thank you. And I'm showing no further questions at this time. I would now like to turn the call back over to Lorenzo Simonelli for any closing remarks. Yeah. Thank you very much.

Speaker 5: Have more constructive pricing discussions, deal with some of those supply demand issues and I'd say the international market, as you know, is more longer-term contract base versus spot market, like you see in North America. Where you see some real opportunity here is on some of that spot business and I'd say we're being very constructive with our customers, taking into account what we're seeing on the supply chain, what we're seeing in overall demand, and it's a constructive backdrop for Os at the momentgreatthank.

Speaker 30: Great Thank you.

Speaker 23: And I'm showing now further questions at this time. I would now like to turn the call back over to laloreno. im in for any closing remarks.

Speaker 12: And I'm showing now for the questions. At this time, I would now like to turn the call back over tolo, And so some finany closing remarks. Yes, Thank you very much, and thank you to everyone for joining our earnings call today. Just before we end the call, wanted to leave you with some closing forts. Despite some of the challenges this quarter, we are optimistic on the outlook across both of our core business areas and excited about the new energy investments we're making for baking use. We believe that our upstream oil and gas businesses are poised to capitalize on a strong multiyear recovery, while our industrial businesses are poised to benefit from a strong LNG cycle growth in new energy orders and the development of our industrial asset management capabilities. While we benefit from these macrohotel wins, we expect to generate strong free cash flow and return 60% to 80% of it back to shareholders. So thanks for taking the time. Look forward to speaking to you all again soon and operator, you may close out the call.

Speaker 9: Yes Thank you very much, and thank you to everyone for joining our earnings call today. Just before we end the call wanted to leave you with some closing forts. Despite some of the challenges this quarter, we are optimistic on the outlook across both of our core business areas and excited about the new energy investments we're making for baic use. We believe that our upstream oil and gas businesses are poised to capitalize on our strong multiyear recovery, while our industrial businesses are poised to benefit from a strong LNG cycle growth in new energy orders and the development of our industrial asset management capabilitieswhile we benefit from these macrotel wins, we expect to generate strong free cash flow and return 60% to 80% of it back to shareholders. So thanks for taking the time. Look forward to speaking to you all again soon and operator, you may close out the call.

Speaker 44: Ladies and gentlemen, up con call conference for today. Thank you for participating in today's conference.

Speaker 2: Ladies and gentlemen, about from K conference for today. Thank you for participating in today's conferenceyou may all disconnect.

Speaker 1: You may all disconnect.

Q1 2022 Baker Hughes Co Earnings Call

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