Good day, ladies and gentlemen, and welcome to the Baker Hughes Company Q4 and full year 2020 earnings 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. 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. Thank you. Good morning, everyone, and welcome to the Baker Hughes Q4 and full year 2020 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. 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 some 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. Thank you, Jud. Good morning, everyone, and thanks for joining us. We are pleased with our Q4 results as we generated strong free cash flow and executed on our cost-out programs while navigating the impacts of the global pandemic and industry downturn. During the quarter, OFS and DS executed well on commercial opportunities and cost-out initiatives, while TPS delivered solid orders and operating income. Despite an incredibly challenging year for Baker Hughes and the industry in 2020, we generated over $500 million in free cash flow, booked $6.4 billion in TPS orders, and executed on our substantial cost-out and restructuring program. We also took several important steps to accelerate our strategy and invest in new energy transition technologies, helping to position the company for the future. I cannot thank our employees enough for their hard work and dedication to achieve our goals and move the company forward over what has been a trying year for everyone. As we look ahead to 2021, we are cautiously optimistic that the global economy and oil demand will begin to recover from the impact of the global pandemic. Assuming a successful rollout of vaccines around the world, a synchronized global recovery should help drive solid growth in oil demand over the next 12- 18 months and support a meaningful reduction in excess capacity over that time period. We believe this macro environment likely translates into a somewhat tepid investment environment for oil and gas companies during the H1 of 2021. However, we expect spending and activity levels to gain momentum over the course of the year as the macro environment improves, likely setting up the industry for stronger growth in 2022. In the natural gas and LNG markets, 2020 proved to be a more resilient year for demand, primarily due to growth in China and accelerated coal to gas switching across several countries. LNG demand growth is estimated to have held firm versus 2019 levels and fared much better than other commodities that saw meaningful declines. We believe this resiliency highlights the structural demand growth for LNG and reaffirms our positive long-term view for natural gas as a transition and destination fuel for broader energy consumption. Regardless of the state of short-term macro environment, Baker Hughes remains focused on executing the three pillars of our strategy. To transform the core, invest for growth, and position for new frontiers. Our efforts to transform the core are the most visible and immediate components of our strategy. We delivered over $700 million of annualized cost savings in 2020. We will continue to optimize our processes and infrastructure in order to deliver further cost reductions and footprint consolidation in 2021. On the second pillar of investing for growth, we continue to identify opportunities to expand in the industrial sector and increase our condition monitoring and asset management offerings. We recently won awards in our DS segment that encompass our full suite of industrial asset management and digital capabilities, and we are having promising discussions for future awards in both the oil and gas and industrial sectors. We also continue to see good traction with our non-metallic offerings, where we broke ground on our facility in Saudi Arabia with our partner Saudi Aramco, and will soon be completing our new facility in Houston. On the third pillar of positioning for new frontiers, we continue to evaluate multiple concepts and business models across the CCUS, hydrogen, and energy storage value chains. We see several opportunities to deploy our existing technologies or add to our offering through targeted investments and bolt-on acquisitions. In CCUS, we acquired Compact Carbon Capture or 3C in November. 3C is an early-stage carbon capture technology that offers a 75% smaller footprint and lower CapEx requirements compared to what is available today. In hydrogen, we are seeing positive momentum with our product offerings and remain engaged with several customers across a wide range of industries to advance their hydrogen plans. As we execute on these three strategic pillars and our broader evolution as an energy technology company, we are committed to operating in a disciplined manner that prioritizes free cash flow and returns above our cost of capital. Now I'll give you an update on each of our segments. In our oilfield services business, activity has stabilized globally, with modest improvements in select areas and positive signs for further improvement across multiple regions over the course of 2021. In the international markets, the decline in Q4 activity was mostly in line with our expectations, aside from some additional softness in the Middle East that developed late in the year. For 2021, our view remains largely intact with a modest recovery in the H2 across several low-cost basins. Looking across different geographies, we expect a solid recovery to continue in Latin America off depressed levels, modest improvement in the North Sea and Russia, and the potential for a modest H2 recovery in the Middle East. In North America, a solid year-end improvement in drilling and completion activity outweighed typical Q4 seasonality. Looking into 2021, we expect further improvements in drilling activity over the H1 of the year as public E&Ps begin to add back rigs. Although the rig count is moving higher, we believe that the commitment towards capital discipline and maintenance mode spending remains intact. While we are pleased to see that the outlook for OFS is gradually improving, our primary focus remains on increasing the margin and return profile of this business through improved operating efficiency and portfolio actions. During 2020, we executed on our cost out actions in OFS and continue to work through multiple work streams to further reduce our cost structure. This includes a plan to reduce our rooftops by over 100 facilities in 2021 and shut down completions related operations in select countries in Latin America and Africa. Overall, we believe that OFS operating margins remain on track to reach double digits in the coming years, following the significant structural cost reductions in 2020, and as we institutionalize both remote operations and better operating processes. Moving to TPS, our focus remains on executing the significant backlog of LNG projects awarded in recent years, continuing to grow our aftermarket services offering, driving growth in our valves business, and capitalizing on attractive opportunities in the new energy space. During the quarter, we booked an additional award for power generation for the North Field East LNG project in Qatar. This follows the main refrigerant compression award we booked in the Q3. For the LNG market overall, our long-term outlook for demand growth remains intact. The recent increase in LNG spot prices has solidified a similar view for many of our customers and improved momentum for a number of projects. As a result, we continue to expect that three to four projects are likely to move forward in 2021, followed by a robust pipeline of LNG projects that we expect to reach FID beyond 2021. In our pipeline and gas processing segment, we secured an award with South Gas Company in Iraq for the design, manufacture, and construction of an integrated natural gas processing and production facility. An important part of this project is the supply of compression equipment and digital monitoring systems that will enable the reuse of previously flared natural gas, which is estimated to reduce Iraq's carbon emissions by roughly 6 million tons annually. This award highlights our broad capabilities as we seek to deliver a diverse range of decarbonization solutions for our customers. For TPS, we are optimistic about the outlook for recovery in 2021 and 2022 after a difficult year in 2020, as customers resume spending to maintain and, in some instances, upgrade their equipment. While our contractual services business has remained resilient through the recent market turbulence, we expect growth to be led by a recovery in transactional services and upgrades, areas that were particularly impacted during the pandemic. On a long-term basis, we are excited by recent traction for upgrade opportunities as customers look to decarbonize and improve the efficiency of their equipment. On oilfield equipment, we executed on our cost out efforts and have taken several portfolio actions over the course of 2020. We continue to focus on right-sizing the business and optimizing the portfolio in the face of a challenging offshore market environment. In the Q4, we won an order from Eni for the Agogo field in Angola. The project includes several solutions from our Subsea Connect suite of technologies, including multiple subsea trees, well heads, and manifolds. With Brent prices returning to the 50s and more optimistic view for oil demand over the next few years, we see the outlook for industry subsea tree awards improving modestly in 2021. Still well below 2019 levels. As we look out longer term, we believe that deepwater activity will be increasingly dominated by low-cost basins and that it will be difficult to sustain 2019 industry order levels for the foreseeable future. Finally, in digital solutions, the oil and gas and aerospace end markets remain challenging. We have seen some recovery in industrial end markets outside of aerospace, in line with the rebound in the global economy. In the Q4, we were awarded several projects that demonstrate our capabilities in industrial asset management. We secured an extension to a previously awarded project with Petrobras. We will provide a suite of digital solutions and services to optimize productivity, reduce operational and safety risk, and lower carbon emissions across Petrobras sites. Our Bently Nevada business secured a contract with a major hydroelectric operator in the U.S. to provide Orbit 60, System 1 software, and a five-year services agreement for industrial asset management across multiple dams. Bently Nevada also secured a fleetwide contract with the American Electric Power to deploy System 1 software, remote monitoring, and analytical services to diagnose machinery issues in real time. These wins are an example of our deep domain expertise in industrial asset management. Going forward, we see significant opportunities to apply these capabilities in the oil and gas sector, and we believe that these core competencies are also applicable to a number of industrial sectors. Overall, we executed well in 2020 against the challenge of the global pandemic and the industry downturn, delivering strong free cash flow and executing on our cost-out programs. Baker Hughes is well placed to navigate the current market environment and positioned to lead the energy transition. We remain focused on executing for customers, being disciplined on cost, and delivering for our 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 $5.2 billion, up 2% sequentially, driven by OFE and Digital Solutions, partially offset by declines in OFS and TPS. Year-over-year, orders were down 25% with declines in all four segments. Remaining performance obligation was $23.4 billion, up 2% sequentially. Equipment RPO ended at $8 billion, down 3% sequentially, and services RPO ended at $15.4 billion, up 5% sequentially. Our total company book-to-bill ratio in the quarter was 0.9, and our equipment book-to-bill in the quarter was 0.9. Revenue for the quarter was $5.5 billion, up 9% sequentially, driven by TPS and Digital Solutions, partially offset by low single-digit declines in OFS and OFE. Year-over-year, revenue was down 13%, driven by declines in OFS, OFE, and digital solutions, partially offset by an increase in TPS. Operating income for the quarter was $182 million. Adjusted operating income was $462 million, which excludes $281 million of restructuring, separation, and other charges. Adjusted operating income was up 98% sequentially and down 15% year-over-year. Our adjusted operating income rate for the quarter was 8.4%, up 380 basis points sequentially. We were particularly pleased with the margin improvement in the Q4, which was largely driven by strong execution on our restructuring actions and improvements in operating productivity. Corporate costs were $111 million in the quarter. For the Q1, we expect corporate costs to be roughly flat with Q4 levels. Depreciation and amortization expense was $307 million in the quarter. For the Q1, we expect D&A to decline slightly from Q4 levels and gradually decline through the year. Income tax expense in the quarter was $568 million, driven by our geographic mix of earnings, a valuation allowance tax expense of $225 million, and a $91 million tax expense related to business dispositions. Although we expect our book tax rate to remain elevated in 2021, we expect our cash taxes to decline. Diluted GAAP earnings per share were $0.91. Included in diluted GAAP earnings per share is a $1.4 billion gain on our investment in C3.ai, recorded in other non-operating income. We invested $69 million in C3.ai when we formed our partnership in June 2019. In December, C3 completed its IPO, which requires us to mark our investment at fair value. Since our C3 investment is recorded as a marketable security on our balance sheet, the change in fair value will be reflected in the other non-operating income line on a quarterly basis going forward. While we are very pleased with our investment, we are equally as pleased with our strong partnership with C3 as we develop and market new AI solutions for the oil and gas industry. We also view our unique C3 partnership as a good example of our capital allocation philosophy as we invest in new technology frontiers and energy transition. Adjusted loss per share was $0.07. Included in adjusted loss per share are the valuation allowance tax expenses mentioned earlier. Turning to the cash flow statement, free cash flow in the quarter was $250 million. This was driven by an improvement in sequential operating results and modestly lower net CapEx. Free cash flow for the Q4 includes $189 million of cash payments related to restructuring and separation activities. For the Q1, we expect free cash flow to decline sequentially, primarily due to seasonality. When I look at the total year 2020, I am pleased with our financial results, considering the disruptions in the global economy, the impact of the COVID-19 pandemic, the significant restructuring that we executed over the year, and the number of corporate transactions that we completed. Orders of $20.7 billion for the full year were down 23% in 2020, driven by declines in all segments. Total company book-to-bill was one in the year. Total year revenue of $20.7 billion was down 13%. OFS was down 21%, and DS declined 19%, partially offset by an increase of 3% in TPS. Adjusted operating income of $1 billion was down 35% in the year, with total company adjusted operating income margins declining 170 basis points, mostly driven by volume declines in OFS and DS. Corporate costs for the year were $464 million. For 2021, we expect corporate expenses to decline versus 2020. Our cost-out efforts and lower separation costs should lead to a gradual reduction in quarterly corporate expenses over the course of the year. During 2020, we exceeded our goal of $700 million in annualized cost savings, with the majority coming out in the H2 of the year, and the average cash payback of our restructuring actions has been less than one year. In addition to restructuring, we completed the sale of three businesses in 2020, including SPC Flow in the Q4. These dispositions are in line with our strategy to exit businesses that do not meet our return requirements and are aligned with our broader portfolio evolution objectives. Overall, we believe that the actions taken in 2020 have greatly improved our global operations and helped to lay the groundwork for further improvement in our margin and return profile in the coming years. For the full year, we generated $518 million of free cash flow. We are pleased with our performance as our capital discipline, cost-out initiatives, and working capital release helped to offset lower operating results and $670 million in cash restructuring and separation costs incurred during the year. In order to achieve some of our cost-out initiatives in 2021, we booked restructuring and impairment charges of $256 million in the Q4, with an expected cash payback of less than one year. Following our cost rationalization actions in 2020, this next phase is primarily associated with optimizing our structural cost, most notably reducing our facilities footprint to align with our broader business transformation objectives. For 2021, we expect free cash flow to improve significantly versus 2020 and to approach historical levels, largely driven by higher operating income, modestly lower CapEx, and significantly lower restructuring and separation cash expenditures. 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 strong quarter to close out a challenging year in the market. OFS revenue in the quarter was $2.3 billion, down 1% sequentially. International revenue was down 5% sequentially, led by declines in Asia Pacific, the North Sea, and the Middle East. North America revenue increased 11% sequentially due to solid growth in both the North American land and offshore markets. Operating income in the quarter was $142 million, a 53% increase sequentially, and a 220-basis-point improvement in margin rate. The improvement in margin was driven by restructuring and cost-out initiatives, as well as favorable product mix. As we look ahead to the Q1, we expect to see typical seasonal softness during the quarter, even though international drilling activity has largely stabilized. We expect our Q1 international revenue to decline modestly on a sequential basis. In North America, we expect the recent momentum in drilling and completion activity in the US land segment to continue into the H1 of 2021 as operators refresh spending budgets. We expect a modest sequential increase in North American OFS revenues.; Although we should benefit from our cost-out initiatives, margin rates may decline modestly in the H1 due to international seasonality and fewer product sales. For the full year 2021, our expectations are largely in line with the view we shared in October on our Q3 earnings call. Internationally, we expect activity levels to stabilize and remain relatively unchanged for the H1 of 2021. We currently anticipate a H2 recovery in activity across multiple regions. However, we still expect that our international revenue will be down in the mid-single digit range on a year-over-year basis. The recent increase in commodity prices and the redeployment of budgets have improved the near-term outlook in North America. At the moment, though, activity in the back half of the year remains less clear. As a result, we believe that drilling and completion activity in North America is also likely to be down in the mid-single digits on a year-over-year basis. Although OFS revenue will likely be down modestly for the full year, we believe that our cost-out actions should still translate to a strong improvement in OFS margin in 2021. Moving to Oilfield Equipment, orders in the quarter were $561 million, down 49% year-over-year and up 30% sequentially. The sequential improvement in orders was driven by the Eni Agogo award and a strong performance by our SPC project segment, specifically in the Middle East, which helped offset a sequential decline in Flexibles orders. Revenue was $712 million, down 7% year-over-year. Revenue declines in subsea services and subsea drilling systems were offset by growth in SPS and Flexibles. Operating income was $23 million, a 47% improvement year-over-year. This was driven by higher volume in SPS and Flexibles, along with help from our cost-out program, which was partially offset by softness in services activity. For the Q1, we expect revenue to decrease sequentially, driven by lower SPS and Flexibles backlog conversion. We expect operating income to also decline sequentially, but remain in positive territory primarily based on our cost-out initiatives. For the full year 2021, we expect the offshore markets to remain challenged as operators reassess their portfolios and project selection. We expect OFE revenue to be down double digits on a year-over-year basis due to the lower order intake in 2020 and a likely continuation of a difficult offshore environment in 2021. Although revenue is likely to be down in 2021, our goal is to maintain positive operating income as our cost out efforts should offset the decline in volume. Next, I will cover Turbomachinery. The team delivered another strong quarter with solid execution. Orders in the quarter were $1.8 billion, down 4% year-over-year. Equipment orders were down 10% year-over-year. We were pleased with another solid quarter of bookings for TPS despite the challenging environment. Orders this quarter were supported by awards for the Iraq flare gas project and power generation units for Qatar Petroleum's NFE project. Service orders in the quarter were up 2% year-over-year, driven by growth in contractual services. Revenue for the quarter was $1.9 billion, up 19% versus the prior year. Equipment revenue was up 67% as we continue to execute on our LNG and onshore/offshore production backlog. Services revenue was down 11% versus the prior year. Operating income for TPS was $332 million, up 9% year-over-year, driven by higher volume and strong execution on cost productivity. Operating margin was 17.1%, down 160 basis points year-over-year, largely driven by a higher mix of equipment revenue. For the Q1, we expect revenue to decline sequentially, roughly in line with the last couple of years. Based on this revenue outlook, we expect TPS operating income to grow year-over-year, but expect margin rates to be roughly flat versus the Q1 of 2020 due to a higher mix of equipment revenue. For the full year 2021, we expect to generate solid year-over-year revenue growth driven by the conversion of our current equipment backlog and a modest increase in TPS service revenues. Although a higher mix of equipment revenue may be a slight headwind for growth and margin rates next year, we still expect solid growth in operating income based on higher volume. Finally, in Digital Solutions, orders for the quarter were $528 million, down 18% year-over-year. We saw declines in orders across most end markets, most notably transportation, oil and gas, and industrial. Sequentially, orders were up 7%, driven by seasonality in power and some improvements in transportation. Revenue for the quarter was $556 million, down 16% year-over-year due to lower volumes across all DS product lines, with the largest declines in Waygate and Reuter-Stokes. Sequentially, revenue was up 10% as some industrial end markets begin to recover. Operating income for the quarter was $76 million, down 30% year-over-year, driven by lower volume. Sequentially, operating income was up 66%, driven by higher volume across all product lines and cost productivity. For the Q1, we expect to see sequential revenue declines in line with typical seasonality and operating margin rates back into the single digits. Looking into 2021, we expect a modest increase in revenue on a year-over-year basis, primarily driven by a recovery in industrial end markets. With higher volumes and the benefit of our cost out program, we believe DS margin rates can get back to low double digits for the full year. Overall, I am pleased with the execution in the Q4 and the total year amid a difficult macroeconomic backdrop. While 2021 may have some challenges, we are confident in our strategy and our ability to execute. We remain focused on free cash flow and improving margins and financial returns. With that, I will turn the call back over to Jud. Thanks, Brian. Operator, let's open it up for questions. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Again, that's one question and one follow-up. Our first question comes from Sean Meakim with JP Morgan. You may proceed with your question. Thank you. Hey, good morning. Hey, Sean. To start off, I'd like to dig into free cash flow a bit more if we could. A really good result in the Q4, especially without any working capital help. Looks like good momentum into 2021. Lots of moving pieces between 2021 versus 2020. Brian touched on it in his comments. Core operational cash flow should improve. We're going to lap the severance and restructuring charges, but working capital progress payment tailwinds don't likely recur. CapEx should be pretty restrained. Cash taxes probably help a little bit. All in, dividend coverage shouldn't be an issue. Is there any reason why we shouldn't translate that into free cash flow north of $1 billion in 2021? Yeah, Sean. Look, you've got the right pieces there. Just to elaborate a little bit further on that, I did say earlier I would expect free cash flow to get back to historical levels, sort of the 18, 19 level. You hit on a couple. Based on how we're seeing things play out right now, should see higher earnings, as you mentioned. CapEx specifically, I would expect a modest decline versus what we saw in 2020, assuming similar activity levels and what we're seeing right now. Working capital, specifically, based on what I'm seeing now, Sean, I'd say should be neutral or a modest source of cash in 2021. I think it really depends on OFS activity levels and how progress payments play out from new orders in Turbo and OFE. As I also mentioned, while we expect earnings to be higher, do expect cash taxes to decline as we expect some refunds to come in 2021. That should be a tailwind, as you mentioned. Look, the largest change is really the cash restructuring and separation charges, which will reduce materially in 2021. Overall, that increase in earnings, the upside from cash restructuring should support material improvement. We feel good about the process improvements we've made. The teams are all over this. It's a key metric in all of our performance metrics and are pleased with the performance there and have got a pretty good construct for 2021. Understood. I appreciate that feedback. I'd also like to touch on the TPS order trajectory. Good inbound across the board, but TPS was the most resilient. You have some nice awards that you called out. We're off about 25% year-on-year in 2020. Not a surprise given the pandemic, and 2019 was quite strong. This is a very common debate today among investors, the trajectory of awards for this business, particularly as LNG sentiment has soured of late, and hydrogen expectations have gone hyperbolic. Can we just talk about your expectations for keeping your book-to-bill at or above one time in 2021 and beyond? I'm thinking about just kind of buildup of awards the next few years. You've got kind of base of service awards, you've got line of sight of equipment awards, maybe in downstream and then smaller versus larger LNG opportunities. Yeah, Sean, overall, we think that the order outlook for 2021 and 2022 is roughly similar to what we booked in 2020. The mix could slightly change year-over-year. As you mentioned on the LNG side, we saw some good bookings in 2020. We're seeing continued momentum in 2021 with, again, expecting three to four projects that will move towards FID in 2021. Also followed by a robust pipeline of LNG projects that continue to reach FID beyond 2021. Again, conversations with customers, given the current pricing, have continued to be positive. As you look at it from a demand perspective, we continue to believe LNG demand increases as we go forward. Outside of LNG equipment, the opportunity set for 2021 seems roughly the same as what we saw in 2020. There could be some mix movement between onshore, offshore, and valves and other areas, but the opportunity is roughly the same. As you said, we are seeing increased traction on CCUS as well as hydrogen. With the continuing theme of the energy transition, a lot of customer discussions. On services, we're optimistic about the outlook for 2021 and 2022 as customers resume their maintenance activity and also with the opportunity to continue to focus on upgrades of their equipment. We think TPS services has been underappreciated in the decarbonization theme, and there's potential there for increase in 2021, 2022. Again, overall, 2021, 2022, roughly similar to 2020. Thank you. Our next question comes from James West with Evercore ISI. You may proceed with your question. Hey, good morning, guys. Hi, James. Lorenzo, I noticed you had in the release and in your commentary a number of pretty significant wins in the digital solutions business, particularly on the industrial side of the business. Could you perhaps elaborate a bit more on, I know this is a key part of the strategy to move into other verticals, industrial being a key one of those. Could you elaborate on kind of what you're seeing, what the trends are there, and how much further we potentially have to go? Yeah, James, I think you've seen that on the industrial landscape, a number of companies are looking to commit to net zero, and you've seen that propensity increase. When you look at our portfolio, we've got an opportunity in that second pillar of invest for growth, really to aid them in decreasing their carbon footprint, helping them to decarbonize. You look at areas of pulp and paper, you look at areas of cement, you look at food and beverage, also mining. That's where we're seeing an increased opportunity, and it's very much in line with the strategy that we're executing to provide from the existing portfolio of industrial gas turbines, valves, pumps, as well as then condition monitoring and asset management. That relationship also we have with C3 on the side of digital helps us. We are seeing increased intensity from the customer discussions, and this is very much in line with the way in which we're transforming the company. Right. Okay. Maybe a follow-up to that. CCUS is becoming a hot topic, something we've discussed, and Rod and I discussed recently. Could you maybe give your thoughts on kind of the near term outlook for carbon capture and maybe the longer term themes? From my perspective, it seems like the main mitigation pathway as we go carbon neutral, but it hasn't been adopted as rapidly as maybe one would've thought. James, we've been involved in carbon capture for some time, and you've seen some of the recent announcements where some of the LNG projects are looking to, again, mitigate some of the CO2 emissions. We feel confident about the outlook for the market of CCUS, and we're in dialogue with a number of customers. We're actually involved in over 20 trials at the moment, and that's also one of the key reasons why we acquired, in November, 3C Compact Carbon Capture, because we see the opportunity of the smaller footprint equipment being very useful there. As you look at it, the IEA already says that there's going to be an increased requirement of carbon capture from 40 million tons today up to 750 million tons by 2030, and then also to 2.4 billion tons by 2050. Hard to give you a precise number, but clearly it's an important part of the portfolio as it continues to grow, and we expect to see orders coming through in the next one to three years. I would agree with you, it is the area that probably first moves and then followed by hydrogen and others. It's clearly something that customers are looking at already. Thank you. Our next question comes from Angie Sedita with Goldman Sachs. You may proceed with your question. Thanks. Good morning, guys. Hi, Angie. Hi. On the international markets, Lorenzo, I don't know if you have additional color around your outlook, right? You spoke to the tepid recovery to start the year and gaining momentum into year-end and stronger growth into 2022, but maybe you can talk about the pace of activity for 2021, E&P spending outlook, customer dialogue, and then what is the degree of your visibility into the level of activity for 2022? Yeah, Angie, as we mentioned, we expect activity levels to stabilize and remain relatively unchanged for the H1 of 2021. We do expect an increase in the H2 from a recovery in the activity across multiple regions. That framework obviously is based on our current thinking that there's no material impact from the virus ongoing and lockdowns are maintained to a minimum, which obviously would impact that framework if it changes. Looking at the geographies, we expect a solid recovery to continue in Latin America after depressed levels. Also, some modest improvement in the North Sea and Russia. Also in the Middle East, a potential H2 recovery as things start to improve there. On the offshore markets, similarly mixed. Some improvement in areas like Brazil and Norway, but also as we look at some stagnant areas in West Africa. If we look at international, I think we still expect that our international revenue will be down in the mid-to-single digit range on a year-over-year basis with an uplift in the H2. 2020 likely to be a stronger year, just given the macro assumptions that we're seeing. 2022, sorry. Yeah. I figured it out. Helpful. I appreciate that, Lorenzo. On to OFS margins. Good to hear there's more to be done on the cost-out program, and I assume potentially further realignment of the portfolio. Maybe, Brian, is there additional color around the path of margins for 2021 and maybe even thoughts around the exit rate given the cost-out efforts? Even color around the realization of double-digit margins. Is that a possibility by late 2022? Yeah. Angie, just to give you a little more color, as I think about the year, at first, the team has done, I think, a great job in terms of responding to the environment and really realizing the benefits of multiple years of work to transform the business and the way it operates. Specifically around the Q1, as I mentioned, margin rate could be down slightly based on seasonality and lower product sales. The decline in volume and mix should be partially offset by the cost-out benefits that we've already seen come through that will carry over, as well as additional cost benefits that will come through in the Q1. Then, beyond the Q1, I'm feeling good about the margin accretion that we should see as volume recovers seasonally in the Q2 and then with any back half recovery and activity. You've got all the restructuring efforts that have started to show benefits, and you see that in the margin rate here in the Q4. You've got the incremental benefits that will be coming through as we continue to execute on the programs that we just announced. If I think about the exit rate and how to think about the business performance here, assuming there's no unexpected change in product or geographic mix, Angie, we should be in the high single digits by Q4 with a shot at reaching double digits depending on volume. I think the team has shown that they've been executing and having some upside in these restructuring programs. I think that's a tailwind for how to think about OFS and feel good about the margin trajectory. Thank you. Our next question comes from Chase Mulvehill with Bank of America. You may proceed with your question. Hey, good morning, everyone. Hey, Chase. Hey. I guess I just wanted to kind of come back to the LNG topic. Prices are pretty strong today, just kind of want to understand what impact this is having on the LNG business. Maybe you can first talk to the impact it's having on the order front as you're having conversations with some of your customers. Then secondly, talk to it, and you spoke to it a little bit, on the service side. I'd assume that stronger LNG prices are having a rather positive impact on some of the transactional and upgrade services. You mentioned that previously, but if we look at the model, I think 2020 service revenues are about $400 million below kind of 2019 levels. Given stronger LNG prices, when do you think we can get back that $400 million that we lost last year on the service side? Chase, I'll kick it off here and just give you a view of the LNG outlook. We mentioned that, again, we were pleased with the resilience that we saw in 2020. Again, we continue to see that the demand for LNG increases, in particular in Asia, and also as you see coal to gas continuing to shift. As we look at this year, again, we see three to four projects moving towards FID, and the current discussions with customers are ongoing. As we look at beyond 2021, again, we see a number of projects solidifying going out. If you look at it from a longer-term perspective, by 2030, we still need to have capacity of approximately 650- 700 million tons of LNG in place. You're looking at 50- 100 million tons FID-ing over the course of the next three to four years. We feel that that trajectory is very much in place and feel good about our opportunities in the space continuing. Yeah. Chase, specifically around services as it relates to LNG, I'd remind you that the overwhelming majority of LNG services are on these Contractual Service Agreements, and that revenue has pretty much played out as we expected it to play out this year. The LNG service isn't really impacted as much by some of the shorter-term and in-year dynamics that you see in other parts of the portfolio. I will say, though, longer term for LNG service and CSAs, as we're booking these new orders and things start to come online, you will see more Contractual Service Agreements come into the RPO, and you did see RPO grow in the quarter, and that's really on the back of CSAs and LNG. As I said, the overwhelming majority sign up for these long-term service agreements. Taking a step back, though, and looking at overall TPS services and how I think about getting back to the 2019 baseline, I'd give it a wide timeframe, maybe over the next two to three years. As I said, CSA revenue's been pretty resilient and we've got good visibility there given the nature of those contracts and how we operate those. Transactional services should see some recovery as customers really stop delaying maintenance activity. Deciding when it normalizes back to 2019 levels is difficult, but we do expect some tailwinds this year based on what we're hearing from customers. I'd say, Chase, that probably the most difficult bucket of revenue to predict is upgrades, which is truly discretionary in nature and is usually one of the first items that operators cut. I'd say if budget constraints remain in place, it could take upgrades a little while to get back to 2019 levels. Again, we are seeing customers talk about upgrades for various reasons, performance, better cost positioning, and then also some of the carbon capture areas that Lorenzo mentioned. That's why I'd say the visibility is a bit less clear in that area and why I'd say about two to three years on getting back to 2019 levels. Okay. Helpful there. If we could shift gears a little bit and talk about BHC3. Maybe a little update here. We saw some nice awards in the press release, and obviously C3.ai had a really nice IPO. Could you talk about the success that you're having on the external opportunity side and maybe also hit briefly on kind of where you are kind of fully exploiting kind of AI across your enterprise? Very pleased with where we are on the C3 relationship. To think it's really just over a year that we've entered into this partnership. Put aside the IPO, because this is really a strategic relationship and partnership that we have for an increasing theme of providing artificial intelligence to our customer base across the energy landscape. You see awards that have happened in Asia as well as Latin America. The drive for productivity, the drive for reducing non-productive time really aids the element of introducing artificial intelligence and the platform that C3 has in place. We're continuing to see good traction with our customer base, and we think that will continue with the drive towards reducing unplanned downtime. Internally, we're taking the artificial intelligence and utilizing it within our process improvements of inventory, some of our internal processes, as well as then also on our manufacturing base, looking at our own equipment. Increasingly also looking at some of the services that we provide to our customers as we look at with drilling, et cetera, and seeing how we take the different information and anticipate, again, excursions that are taking place in some of the services we provide. This is an opportunity that continues to grow. Very committed to the partnership and happy with how it's proceeding. Yeah. Hey, Chase, I'd just add one thing. There's some exciting developments starting out that we're seeing some opportunities to pull through our own offerings with the sale of C3 AI's software. I'd say the most promising opportunities near term are around condition-based monitoring solutions. With our M&D services for ESPs. Look, we see an opportunity to expand the value that we can provide our customer base by expanding our advisory service offerings alongside that C3 portfolio. As we continue to work with the teams, we're again starting to see some of the opportunities play out that we were exploring when we made this investment. We're in early stages here, and I think long term, this is going to continue to be a great partnership. Thank you. Our next question comes from David Anderson with Barclays. You may proceed with your question. Hi, good morning, Lorenzo. A couple questions around your investing for growth pillar there. As I think about global oil demand recovering over the next few years, I would think your artificial lift and chemicals businesses would benefit most. Are you looking to kind of build these out more with that in mind? You mentioned a chemicals facility building in Asia. I was wondering if you could just kind of talk about some of those longer cycle businesses, because you have more exposure than your peers. I'm just wondering if this is an area that you're thinking about further for more investment. Yeah, Dave, look, we like our positioning on the production and chemical side, and as you say, from the artificial lift side, as again, oil demand improves, we feel good about our ESPs. We feel good about the technology we have in place, we'll continue to grow that product line. On the chemical side, yes, we've actually announced investments both in Asia and Singapore and also in the Kingdom of Saudi Arabia. We see the opportunity of chemicals continuing to increase, especially as you look at enhanced oil recovery, also an opportunity to go further into the downstream with our chemicals business as well. Both of those areas are, as you look at growth trajectory, feel good about the prospects going forward. Sticking on the investment for growth theme, you touched on this before about your digital business, the digital segment and how the mix is shifting there. If we think about the new Biden administration coming in, methane release is sure to be a big topic up there. You have a number of products within there that could really fit in there. Are your customers starting to talk about that yet? Can you just kind of talk about how that market could develop for you over the next few years? It seems like it's kind of low-hanging fruit for Biden right now. Yeah, Dave, we are seeing increased traction from the customer base, and irrespective of the administration, just the whole aspect of emissions management and people focusing on the emissions. You saw it happen earlier also during the Obama administration. Now with the conversations with our customers, we've got the technology in place. It be drone-based, it be we've got the sensors, LUMEN. Again, conversations are increasing with our customers, and it's both a point solution as well as a service that we can provide. We see an opportunity as we look at energy transition to really help our customers decrease their emissions. Dave, I'd just add here to Lorenzo's point, Shell has publicly stated that they're working with us on our LUMEN technology, and we've got both LUMEN Terrain, which is continuous monitoring for methane emissions, and as Lorenzo mentioned, we've got LUMEN Sky, which is aerial and drone-based. We can do fleet-wide. We can drill down into particular assets. We can quantify leakage, identify where it's actually occurring. Look, this is a much better technology than traditional ways for trying to determine if there are methane leaks, because they can be quite destructive and less accurate. As you know, methane is around 80x worse for the environment than carbon emissions. This is an area that is important in the world, and we think we've got a great offering, and do expect to see more uptake of that in the coming years. Thank you. Our next question comes from Kurt Hallead with RBC. You may proceed with your question. Hey, good morning, everybody. Hi, Kurt. Hey, thanks for that great summary. I really want to continue on the concept here of your investing for growth and the energy transition, and then talk about the carbon capture, both in terms of, is there any way that you can help the investor base kind of quantify what you're currently generating in terms of revenue from that CCUS business? Maybe that's one. Then more importantly, can you give us some general sense as to what you see, Lorenzo, in terms of the potential total addressable market for the specific products and services that Baker Hughes is currently providing? Kurt. Look, I'll start out here. I'd say, if you look at revenue today, depending on how you define energy transition, there's a lot in our portfolio that supports that, but things like carbon capture, hydrogen, energy storage, relatively small in terms of revenue base for each of the product companies. Look, the way I think about it is, Lorenzo's talked about it, carbon capture is probably the first area where you'll start to see some meaningful revenue come through over the next few years. We are in pilot projects around the world. We've just made the technology acquisition in 3C, so lots of activities there. As we've talked about on earlier calls, we are in hydrogen today and have been in hydrogen for decades. Basically, elementary uses for hydrogen in our compression technology. We're starting to see discussions there with customers. The same thing on the energy storage front. The way I think about it is they will be some of the faster-growing areas, particularly in turbomachinery and in digital solutions, as we build out condition-based monitors and monitoring and sensing technology around that. I think they will be things that will make turbomachinery grow faster because of these new offerings. Look, I think the pace at how it happens will really depend on market acceptance and the overall economics of these projects. I'd say in the short term, carbon capture is the best opportunity in the next one to three years. Yeah. If you look at it, again, just look at what's happening around the world. You've got all of these countries that are now committing to net zero. You've got companies that are committing to net zero and even negative net zero. Again, to put a precise number on it's difficult at this stage. When you look at the portfolio we have, when you look at the hydrogen discussions we're having as well as CCUS, this will be an area of growth for us, and it's very much in line with our strategy. In the Invest for Growth as well as the New Frontiers. That's why you're seeing us take some of the small technology bets that we've taken, and we'll continue to do that. Feel very good that we're at a pivotal point in time where this energy transition and also the move towards these new technologies will continue to accelerate. That's great. Appreciate that. Just one follow-up, Brian, on your part, just want to clarify one thing. You said you'd have substantially higher free cash flow in 2021 than 2020, but I wasn't quite clear as to whether or not you thought that free cash flow would be sufficient to cover the dividend in full. Yeah, Kurt, as I mentioned, based on what I'm seeing today, I would expect it to be back at levels in line with 2018 and 2019. If you recall, we were well in excess of covering our dividend in those years. Again, I think the process improvement, the way we're running the business, and the framework supports strong free cash flow in 2021. Thank you. Our next question comes from Marc Bianchi with Cowen. You may proceed with your question. Thank you. I'd like to follow up a bit on the energy transition and carbon capture stuff that you mentioned so far in this call. My sense is that most of your offering revolves around kind of the compression equipment that you have and some of the other stuff in turbomachinery. As we think about how Baker wants to participate in these markets, what are the missing pieces of the portfolio, if any? What would be a reasonable timeline for you to build out that capability, either organically or through M&A? Marc, maybe just take a step back, because carbon capture has been taking place already, and we're involved, as you mentioned, from the compression standpoint. There's projects in Australia, projects in the Middle East where we're active. As we go forward, we see ourselves playing in some of the key areas of post-combustion capture, consulting, and reservoir evaluation and design, the compression, but also the subsurface storage services like well construction, reservoir modeling, and long-term integrity and monitoring. If you look at our portfolio, those are capabilities that we have. Really, it's more than just compression. Again, this is something that over the course of the next two to three years, we continue to see expanding. We mentioned we're in 20 trials already, and we're seeing increased interest from our customer base on CCUS. Marc, I'd say specifically, the technology acquisition that we just talked about earlier, 3C. Look, we believe that this is pioneering technology, and it's currently the pilot stage, and it was incubated with some key partners, including Equinor, and we believe that we can accelerate that technology and commercialize it. Look, we think the differentiation is important versus traditional carbon capture that Lorenzo had talked about. I mean, our technology now uses rotating beds versus static columns. Solvents are distributed in a compact and modularized format, that combination allows us to have a 75% reduction in footprint, leading to lower CapEx and lower OpEx solutions. Again, our manufacturing know-how, our technology know-how with this new technology that was developed, I think is what's going to help us become a leader or continue to be a leader in this space. Combine that with our turbomachinery business and what we have to offer there with all the things that come in from digital solutions, we think we already have a very powerful offering in this space and can start to show some progress with our customers. There's obviously, as you would imagine, a lot of conversations in this area. Right. Yep. Thanks for that. The other one I had was on the CSA service within TPS. If I just sort of look at historical LNG capacity installations, it would appear that there's quite a large increase of sort of facilities that have been up and running for five years as we enter 2021. I was surprised to hear that piece of the service business within TPS isn't going to be inflecting here. Could you maybe talk to how you see that playing out and maybe why that might not be inflecting in '21? Yeah. Look, as I said, we've got really good visibility into how that portfolio performs. The devil's always in the details, Marc, in terms of when outages actually happen and when these major event happens. It really depends on how that equipment is operating, the environment that it's operating within, and the type of gas. The whole attractiveness of the CSA portfolio is pretty known cash flows for customers and kind of a known view of our cash flows as well. Based on what we're seeing right now in terms of working with customers and the particular machines and the outages, that's what we're basing that view on. There's always room for things to move around, sort of ±6 months. It could be an area where we could potentially see some upside come through. Right now, based on what I'm seeing, I feel confident with what we said, in terms of how we view that space in 2021. Got it. Thanks very much. Thank you. Our next question comes from Jacob Lundberg with Credit Suisse. You may proceed with your question. Hey, good morning, guys. Thanks for squeezing me in. Hi, Jac. Hey, good morning. I wanted to spend some time just on your efforts and strategy to grow the industrial business. Could you just sort of expand on the opportunity set that you're looking at with respect to expanding in the industrial sector through industrial asset management, please? Yeah, Jac. If you go back to what we're seeing happen around the world, a lot of industries are focused on reducing emissions and also net zero goals. As you look at cement industry, you look at pulp and paper, you look at food and beverage, light industrial, these are all areas where energy is consumed today and emissions are actually produced. We've got capabilities within our portfolio to actually help them on their decarbonization journey, emissions management. When you look at our digital solutions as well as our TPS portfolio, you've got industrial gas turbines, which we introduced. You've got valves, you've got pumps, you've got condition monitoring. It's really an adjacency associated with invest for growth, where commercially we can go out and help our customers in the industrial sector continue to meet their goals and ambitions around net zero. We feel that it's an opportunity for us and part of our strategic aspect of working across the energy value chain. A number of customers you've seen us before announce within pulp and paper, these conversations are increasing, and we see an opportunity on that industrial space. Okay, good. Related, you guys have a lot of ongoing efforts to grow in markets. We've talked about carbon capture today. You've talked about non-metallics, hydrogen as well. Do you expect this to be an organic effort from here, or how are you thinking about augmenting your efforts with M&A, either large scale or bolt-ons? Jac, look, I think we've got a lot of the know-how and what we need to do to win in-house today. For instance, in asset management, we've been doing asset management for decades, so the jump over to other industries is not a far reach. Saying that, though, you have seen us make some investments, some relatively small investments like C3 and 3C. Those types of investments are ones that I think are quite attractive. It's good technology, integrates nicely in with the portfolio, adds some capabilities that we think augment what we already have in-house. From my perspective, those are the things that tend to be on the radar screen right now. I don't see a need for any large-scale acquisition at the moment. We'll continue to work those opportunities for those small tuck-in technologies and keep you guys posted if anything changes. That's kind of where our head is today and the types of things that we're seeing that we like right now. Thank you. Great. Well, look, I think we've come to time, so I want to thank everyone for joining our call today. Before we end, I just want to leave you with some closing thoughts. We're very pleased with our Q4 and total year results and believe they further illustrate the strength of the Baker Hughes portfolio as we execute on our margin and returns objectives and evolve our company within the energy landscape. We continue to execute on our strategy of becoming an energy technology company with the three strategic pillars of transform the core, investing for growth, and positioning for new frontiers in areas like CCUS, hydrogen, and energy storage. We're committed to executing this strategy while prioritizing free cash flow generation and returns. Again, I just want to thank you for taking the time and look forward to speaking to you all again soon. Operator, you can close the call. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.