Baker Hughes Company

Good day, ladies and gentlemen, and welcome to the Baker Hughes Company second quarter 2021 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 our 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 Second Quarter 2021 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 the factors that could cause actual results to differ materially. As you know, reconciliations of operating income and other gap to non-gap 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. During the second quarter, we generated strong free cash flow, booked several peer awards, and took a number of positive steps in our journey to grow our new energy businesses. At a product company level, TPS once again delivered solid orders and operating income, while OFE booked a solid orders quarter and OFS continued to improve margins. As we look to the second half of 2021 and into 2022, we see continued signs of global economic recovery that should drive further demand growth for oil and natural gas. Although we recognize the risks presented by the variant strains of the COVID-19 virus, we believe that price environment looks constructive, with demand recovering and operators largely maintaining spending discipline. In the natural gas and LNG markets, fundamentals are equally as strong, if not better, than oil, as a combination of outages and strong demand in Asia, Latin America, and Europe have driven third-quarter LNG prices to levels not seen since 2015. Although hot weather in Europe and U.S. has contributed to solid demand improvement and lower gas storage levels, Structural growth continues unabated in Asia, with Chinese energy imports up almost 30% in the first half of 2021 versus the first half of 2020.