Company: BKR
Filing Date: 2025-02-04
Form Type: 10-K
Source: 0001701605-25-000035
Chunk: 33

Company: Baker Hughes Co
Filing Date: 2025-02-04
Form: 10-K
Item: Item 8
Chunk 33
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2)269 112 338 Tax impact of partnership structure(40)(103)6 Change in valuation allowances (1)(625)53 164 Tax expense (benefit) due to unrecognized tax benefits38 (5)(7)Other - net(71)70 94 Provision for income taxes$257 $685 $600 Actual income tax rate7.9 %25.8 %2,727.3 %(1)For December 31, 2024 and 2023, this amount was reduced by $664 million and $81 million, respectively, that is related to the release of a valuation allowance for certain deferred tax assets.(2)For December 31, 2022, $140 million of this amount relates to the charges associated with the sale and suspension of the Company's Russia operations.Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss and tax credit carryforwards.As a result of an internal reorganization completed on December 30, 2023, BHH LLC became a single member LLC thereby terminating the partnership for U.S. income tax purposes. From December 31, 2023, U.S. deferred tax assets and liabilities are recorded based on the inside book basis versus tax basis difference and are no longer recorded based on the Company's outside basis difference in the BHH LLC partnership. As a result, in 2023 the deferred tax asset related to the investment in partnership has been adjusted accordingly and other deferred tax assets and liabilities, including PP&E, intangible assets, and lower tier investment in partnerships & subsidiaries, have been increased to reflect the tax effect of the inside basis difference of those respective assets and liabilities.

Baker Hughes Company 2024 Form 10-K | 78

Baker Hughes CompanyNotes to Consolidated Financial Statements

The tax effects of differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities as of December 31 consist of the following:20242023Deferred tax assets:Operating & capital loss carryforwards$3,442 $3,332 Tax credit & other carryforwards772 936 Investment in partnerships & subsidiaries276 286 Property, plant and equipment250 168 Employee benefits278 241 Goodwill and other intangible assets198 137 Receivables150 111 Inventory150