~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 1

Baker Hughes ~~a GE company,~~Holdings LLC

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

Three Months Ended March 31,
(In millions) 2019 2018
Net income (loss) $ 71
$ (143 )
Less: Net income attributable to noncontrolling interests 6
—
Net income (loss) attributable to Baker Hughes, a GE company, LLC 65
(143 )
Other comprehensive income:
Investment securities 2
—
Foreign currency translation adjustments 166
312
Cash flow hedges 4
7
Benefit plans —
(3 )
Other comprehensive income 172
316
Less: Other comprehensive income attributable to noncontrolling interests —
—
Other comprehensive income attributable to Baker Hughes, a GE company, LLC 172
316
Comprehensive income 243
173
Less: Comprehensive income attributable to noncontrolling interests 6
—
Comprehensive income attributable to Baker Hughes, a GE company, LLC $ 237
$ 173


	Three Months Ended March 31,
(In millions)	2020		2019
Net income (loss)	$	(16,045)	$	71
Less: Net income (loss) attributable to noncontrolling interests	8		6
Net income (loss) attributable to Baker Hughes Holdings LLC	(16,053)		65
Other comprehensive income (loss):
Investment securities	(2)		2
Foreign currency translation adjustments	(277)		166
Cash flow hedges	(8)		4
Benefit plans	23		—
Other comprehensive income (loss)	(264)		172
Less: Other comprehensive income (loss) attributable to noncontrolling interests	—		—
Other comprehensive income (loss) attributable to Baker Hughes Holdings LLC	(264)		172
Comprehensive income (loss)	(16,309)		243
Less: Comprehensive income (loss) attributable to noncontrolling interests	8		6
Comprehensive income (loss) attributable to Baker Hughes Holdings LLC	$	(16,317)	$	237

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 2

Baker Hughes ~~a GE company,~~Holdings LLC

Condensed Consolidated Statements of Financial Position

(Unaudited)


(In millions)	March 31, 2019			December 31, 2018			(In millions)	March 31, 2020		December 31, 2019
ASSETS	ASSETS						ASSETS
Current assets:							Current assets:
Cash and cash equivalents ⁽¹⁾	$	3,067		$	3,677		Cash and cash equivalents ⁽¹⁾	$	3,005	$	3,245
Current receivables, net	6,402			6,062			Current receivables, net	6,225		6,491
Inventories, net	4,871			4,620			Inventories, net	4,534		4,608
All other current assets	630			639			All other current assets	961		949
Total current assets	14,970			14,998			Total current assets	14,725		15,293
Property, plant and equipment (net of accumulated depreciation of $3,854 and $3,625)	6,218			6,228
Property, plant and equipment (net of accumulated depreciation of $4,506 and $4,384)							Property, plant and equipment (net of accumulated depreciation of $4,506 and $4,384)	5,997		6,240
Goodwill	20,468			20,423			Goodwill	5,639		20,396
Other intangible assets, net	5,663			5,719			Other intangible assets, net	4,576		5,381
Contract and other deferred assets	1,808			1,894			Contract and other deferred assets	1,826		1,881
All other assets	2,808			1,900			All other assets	3,063		3,058
Deferred income taxes	997			1,072			Deferred income taxes	1,315		964
Total assets ⁽¹⁾	$	52,932		$	52,234		Total assets ⁽¹⁾	$	37,141	$	53,213
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY						LIABILITIES AND EQUITY
Current liabilities:							Current liabilities:
Accounts payable	$	3,919		$	4,018		Accounts payable	$	3,983	$	4,268
Short-term debt and current portion of long-term debt ⁽¹⁾	906			942			Short-term debt and current portion of long-term debt ⁽¹⁾	210		321
Progress collections and deferred income	1,923			1,765			Progress collections and deferred income	3,196		2,870
All other current liabilities	2,274			2,276			All other current liabilities	2,719		2,535
Total current liabilities	9,022			9,001			Total current liabilities	10,108		9,994
Long-term debt	6,270			6,285			Long-term debt	6,285		6,301
Deferred income taxes	42			94			Deferred income taxes	260		—
Liabilities for pensions and other postretirement benefits	1,033			1,018			Liabilities for pensions and other postretirement benefits	1,025		1,079
All other liabilities	1,599			960			All other liabilities	1,478		1,425
Members' equity:
Members' capital (common units 1,036 and 1,035 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively)	37,432			37,582
Members' Equity:							Members' Equity:
Members' capital (common units 1,031 and 1,027 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively)							Members' capital (common units 1,031 and 1,027 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively)	36,882		36,998
Retained loss	(288		)	(354		)	Retained loss	(16,167)		(110)
Accumulated other comprehensive loss	(2,290		)	(2,462		)	Accumulated other comprehensive loss	(2,853)		(2,589)
Baker Hughes, a GE company, LLC members' equity	34,854			34,766
Baker Hughes Holdings LLC equity							Baker Hughes Holdings LLC equity	17,862		34,299
Noncontrolling interests	112			110			Noncontrolling interests	123		115
Total equity	34,966			34,876			Total equity	17,985		34,414
Total liabilities and equity	$	52,932		$	52,234		Total liabilities and equity	$	37,141	$	53,213

⁽¹⁾

⁽¹⁾Total assets include $156 million and $273 million of assets held on behalf of General Electric Company, of which $106 million and $162 million is cash and cash equivalents and $50 million and $111 million is investment securities at March 31, 2020 and December 31, 2019, respectively, and a corresponding amount of liability is reported in short-term borrowings. See "Note 15. Related Party Transactions" for further details.

Total assets include $861 million and $896 million of assets held on behalf of General Electric Company, of which $717 million and $747 million is cash and cash equivalents and $144 million and $149 million is investment securities at March 31, 2019 and December 31, 2018, respectively, and a corresponding amount of liability is reported in short-term borrowings. See "Note 15. Related Party Transactions" for further details.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 3

Baker Hughes ~~a GE company,~~Holdings LLC

Condensed Consolidated Statements of Changes in Members' Equity

(Unaudited)


(In millions, except per unit amounts)	Members' Capital		Retained Loss		Accumulated Other Comprehensive Loss		Non-controlling Interests		Total Equity
Balance at December 31, 2019	$	36,998	$	(110)	$	(2,589)	$	115	$	34,414
Comprehensive income (loss):
Net loss			(16,053)				8		(16,045)
Other comprehensive loss					(264)				(264)
Regular cash distribution to members ($0.18 per unit)	(186)								(186)


Baker Hughes Stock-based compensation cost	56								56

Other	14		(4)						10
Balance at March 31, 2020	$	36,882	$	(16,167)	$	(2,853)	$	123	$	17,985

(In millions, except per unit amounts) Common Unitholders
Retained
Loss Accumulated
Other
Comprehensive
Loss Non-controlling
Interests Total Equity
Balance at December 31, 2018 $ 37,582
$ (354 ) $ (2,462 ) $ 110
$ 34,876
Comprehensive income:
Net income 65
6
71
Other comprehensive income 172
172
Regular cash distribution to members ($0.18 per unit) (187 )

(187 )
BHGE stock-based compensation cost 40
40
Other (3 ) 1

(4 ) (6 )
Balance at March 31, 2019 $ 37,432
$ (288 ) $ (2,290 ) $ 112
$ 34,966

(In millions, except per unit amounts) Common Unitholders
Retained
Loss Accumulated
Other
Comprehensive
Loss Non-controlling
Interests Total Equity
Balance at December 31, 2017 $ 40,678
$ (541 ) $ (1,881 ) $ 140
$ 38,396
Effect of adoption of ASU 2016-16 on taxes

67

67
Comprehensive income (loss):
Net loss

(143 )
(143 )
Other comprehensive income

316

316
Regular cash distribution to members ($0.18 per unit) (203 )

(203 )
Repurchase and cancellation of common units (500 )

(500 )
BHGE stock-based compensation cost 30

30
Other 7

(1 ) 6
Balance at March 31, 2018 $ 40,012
$ (617 ) $ (1,565 ) $ 139
$ 37,969


(In millions, except per unit amounts)	Members' Capital		Retained Earnings (Loss)		Accumulated Other Comprehensive Loss		Non-controlling Interests		Total Equity
Balance at December 31, 2018	$	37,582	$	(354)	$	(2,462)	$	110	$	34,876
Comprehensive income:
Net income			65				6		71
Other comprehensive income					172				172
Regular cash distribution to members ($0.18 per unit)	(187)								(187)

Baker Hughes Stock-based compensation cost	40								40

Other	(3)		1				(4)		(6)
Balance at March 31, 2019	$	37,432	$	(288)	$	(2,290)	$	112	$	34,966

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 4

Baker Hughes ~~a GE company,~~Holdings LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended March 31,
(In millions) 2019 2018
Cash flows from operating activities:
Net income (loss) $ 71
$ (143 )
Adjustments to reconcile net income (loss) to net cash flows from (used in) operating activities:
Depreciation and amortization 350
388
Provision for deferred income taxes (18 ) (99 )
Changes in operating assets and liabilities:

Current receivables (192 ) 125
Inventories (220 ) (134 )
Accounts payable (63 ) 114
Progress collections and deferred income 62
(124 )
Contract and other deferred assets 61
140
Other operating items, net (194 ) 23
Net cash flows from (used in) operating activities (143 ) 290
Cash flows from investing activities:
Expenditures for capital assets (294 ) (177 )
Proceeds from disposal of assets 59
108
Other investing items, net (21 ) (66 )
Net cash flows used in investing activities (256 ) (135 )
Cash flows from financing activities:
Net repayments of short-term debt and other borrowings (36 ) (181 )
Repayment of long-term debt (12 ) (648 )
Distributions to members (187 ) (203 )
Repurchase of common units —
(524 )
Other financing items, net 2
(5 )
Net cash flows used in financing activities (233 ) (1,561 )
Effect of currency exchange rate changes on cash and cash equivalents 22
(6 )
Decrease in cash and cash equivalents (610 ) (1,412 )
Cash and cash equivalents, beginning of period 3,677
7,026
Cash and cash equivalents, end of period $ 3,067
$ 5,614
Supplemental cash flows disclosures:

Income taxes paid $ 76
$ 82
Interest paid $ 56
$ 72


	Three Months Ended March 31,
(In millions)	2020		2019
Cash flows from operating activities:
Net income (loss)	$	(16,045)	$	71
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization	355		350
Goodwill impairment	14,717		—
Intangible assets impairment	725		—
Property, plant and equipment impairment	218		—
Inventory impairment	160		—
Changes in operating assets and liabilities:
Current receivables	194		(192)
Inventories	(140)		(220)
Accounts payable	(212)		(63)
Progress collections and deferred income	311		62
Contract and other deferred assets	15		61
Other operating items, net	180		(212)
Net cash flows from (used in) operating activities	478		(143)
Cash flows from investing activities:
Expenditures for capital assets	(365)		(294)
Proceeds from disposal of assets	40		59

Other investing items, net	7		(21)
Net cash flows used in investing activities	(318)		(256)
Cash flows from financing activities:
Net repayments of debt and other borrowings	(115)		(48)

Distributions to members	(186)		(187)


Other financing items, net	(26)		2
Net cash flows used in financing activities	(327)		(233)
Effect of currency exchange rate changes on cash and cash equivalents	(73)		22
Decrease in cash and cash equivalents	(240)		(610)
Cash and cash equivalents, beginning of period	3,245		3,677
Cash and cash equivalents, end of period	$	3,005	$	3,067
Supplemental cash flows disclosures:
Income taxes paid, net of refunds	$	118	$	76
Interest paid	$	49	$	56

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 5

Baker Hughes ~~a GE company,~~Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE BUSINESS

Baker Hughes ~~a GE company,~~Holdings LLC, a Delaware limited liability company (the Company, ~~BHGE~~BHH LLC, we, us, or our), and the successor to Baker Hughes Incorporated, a Delaware corporation ~~(Baker Hughes)~~(BHI) is an energy technology company with a ~~fullstream oilfield technology provider~~diversified portfolio of technologies and services that ~~has~~span the entire energy value chain. The partnership was formed as the result of a ~~unique mix of equipment~~combination between BHI and ~~service capabilities. We conduct business in more than 120 countries and employ approximately 67,000 employees.~~

~~On July 3, 2017, we completed the combination of~~ the oil and gas business (GE O&G) of General Electric Company (GE) ~~and~~. On April 15, 2020, the Company changed its name from Baker Hughes, ~~(the Transactions).~~a GE company, LLC to Baker Hughes Holdings LLC. As of March 31, ~~2019,~~2020, GE owns approximately ~~50.3%~~36.6% of our common units and Baker Hughes ~~a GE company (BHGE)~~Company (Baker Hughes) owns approximately ~~49.7%~~63.4% of our common units.

BASIS OF PRESENTATION

In connection with the Transactions, we entered into and are governed by an Amended & Restated Limited Liability Company Agreement, dated as of July 3, 2017 (the BHGE LLC Agreement). Under the BHGE LLC Agreement, EHHC Newco, LLC (EHHC), a wholly owned subsidiary of BHGE, is our sole managing member and BHGE is the sole managing member of EHHC. As our managing member, EHHC conducts, directs and exercises full control over all our activities, including our day-to-day business affairs and decision-making, without the approval of any other member. As such, EHHC is responsible for all our operational and administrative decisions and the day-to-day management of our business.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. and such principles, U.S. GAAP) and pursuant to the rules and regulations of the SEC for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated and combined financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019 (2019 Annual Report).

In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary ~~for a fair presentation of the~~by management to fairly state our results of operations, financial position and cash flows of the Company and its subsidiaries for the periods presented and are not indicative of the results that may be expected for a full year. The Company's financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest). All intercompany accounts and transactions have been eliminated.

In the Company's financial statements and notes, certain amounts have been reclassified to conform with the current year presentation. In the notes to unaudited condensed consolidated financial statements, all dollar and unit amounts in tabulations are in millions of dollars and units, respectively, unless otherwise indicated. Certain columns and rows in our financial statements and notes thereto may not add due to the use of rounded numbers.

In ~~June 2018, GE announced their intention to pursue an orderly~~the three months ended March 31, 2020, separation and merger related costs include costs incurred in connection with the separation from ~~BHGE over time.~~GE. In the three months ended March 31, 2019, separation and merger related costs ~~primarily include costs incurred in connection with the finalization~~are comprised solely of ~~the Master Agreement Framework and costs related to the anticipated separation from GE. In the three months ended March 31, 2018, separation and merger related costs includes all~~ costs associated with the ~~Transactions.~~combination of BHI and GE O&G (the Transactions). See "Note 15. Related Party Transactions" for further ~~information on the Master Agreement Framework.~~

~~BHGE LLC 2019 First Quarter FORM 10-Q | 6~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

information.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Please refer to "Note 1. Basis of Presentation and Summary of Significant Accounting Policies," to our consolidated financial statements from our 2019 Annual Report ~~on Form 10-K for the year ended December 31, 2018 (2018 Annual Report)~~ for the discussion of our significant accounting policies. Please refer to the "New Accounting Standards Adopted" section of this Note for changes to our accounting policies.

Cash and Cash Equivalents

As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we had ~~$1,214~~$1,004 million and ~~$1,208~~$1,102 million, respectively, of cash held in bank accounts that cannot be released, transferred or otherwise converted into a currency that is regularly transacted internationally, due to lack of market liquidity, capital controls or similar monetary or exchange limitations limiting the flow of capital out of the jurisdiction. These funds are available to fund operations and growth in these jurisdictions, and we do not currently anticipate a need to transfer these funds to the U.S. Included in these amounts are ~~$432~~$93 million and ~~$461~~$142 million, as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, held on behalf of GE.

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 6

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

Cash and cash equivalents includes a total of ~~$717~~$106 million and ~~$747~~$162 million of cash at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, held on behalf of GE, and a corresponding liability is reported in short-term borrowings. See "Note 15. Related Party Transactions" for further details.

NEW ACCOUNTING STANDARDS ADOPTED

~~Leases~~

On January 1, ~~2019,~~2020, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. ~~2016-02,~~2016-13, ~~Leases,~~ and the related amendments (ASC 842). This ASU requires lessees to recognize an operating lease asset and a lease liability on the balance sheet, with the exception of short-term leases. We adopted the standard using the modified retrospective approach under which leases existing at, or entered into after January 1, 2019 were required to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with our historical accounting. The Company has elected the practical expedients upon transition that allow entities not to reassess lease identification, classification and initial direct costs for leases that existed prior to adoption.

The most significant impact of the standard is the recognition of right-of-use (ROU) assets and operating lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We implemented internal controls and key system functionality to enable the preparation of financial information on adoption.

We determine if an arrangement is a lease at inception. ROU assets are included in "All other assets" and operating lease liabilities are included in "All other current liabilities" and "All other liabilities" on our consolidated statement of financial position. Finance lease assets are included in "Property, plant and equipment," and finance lease liabilities are included in "Short-term debt," and "Long-term debt" on our consolidated statement of financial position.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at the later of the lease commencement date or the effective date of adoption of ASC 842 on January 1, 2019, based on the present value of lease payments over the remaining lease term. Finance lease ROU assets and liabilities are recognized at commencement date. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Short-term leases under one year do not result in a ROU asset, but are recognized in the income statement only on a straight-line basis over the lease term. The Company

~~BHGE LLC 2019 First Quarter FORM 10-Q | 7~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~has made an election to include within our operating lease liability future payments for both lease and non-lease components. See "Note 8. Leases" for additional information.~~

The adoption of this standard resulted in the recording of ROU assets and operating lease liabilities of $844 million as of January 1, 2019 on our consolidated statements of financial position with an immaterial impact on our consolidated statements of equity and no related impact on our consolidated statements of income (loss). Short-term leases have not been recorded on the consolidated statements of financial position. Our accounting for finance leases remained substantially unchanged.

~~Derivatives and Hedging~~

~~On January 1, 2019, we adopted ASU 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~. Since there was no impact from the new guidance to our consolidated financial statements, no transition adjustments were recorded. ASU 2017-12 simplifies the application of hedge accounting and expands the strategies that qualify for hedge accounting. In accordance with the ASU, both the effective and ineffective portion of a cash flow hedge are initially reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings when the forecasted transaction affects earnings. The ASU requires certain changes to the presentation of hedge accounting in the financial statements and some new or modified disclosures. See "Note 13. Financial Instruments" for additional information.

~~NEW ACCOUNTING STANDARDS TO BE ADOPTED~~

~~In June 2016, the FASB issued ASU No. 2016-13,~~Financial Instruments - Credit Losses. The ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models ~~in current~~previously used under U.S. GAAP, which generally require that a loss be incurred before it is recognized. The new standard ~~will~~ also ~~apply~~applies to ~~receivables~~financial assets arising from revenue transactions such as contract assets and accounts ~~receivables and is effective for fiscal years beginning after December 15, 2019. We continue to evaluate the effect of the standard~~receivables. The adoption did not have a material impact on our condensed consolidated financial statements.

On January 1, 2020, we adopted FASB ASU 2017-04, Intangibles - Goodwill and Other - Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating the requirement to calculate the fair value of the individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the new ASU, when required to test goodwill for recoverability, an entity will perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying value and should recognize an impairment charge for the amount by which the carrying value exceeds the fair value of the reporting unit. We have applied this ASU on a prospective basis. See "Note 5. Goodwill and Other Intangible Assets" for further details.

NEW ACCOUNTING STANDARDS TO BE ADOPTED

All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.

NOTE 2. REVENUE RELATED TO CONTRACTS WITH CUSTOMERS

DISAGGREGATED REVENUE

We disaggregate our revenue from contracts with customers by primary geographic markets.

Three Months Ended March 31,
Total Revenue 2019 2018
U.S. $ 1,505
$ 1,483
Non-U.S. 4,110
3,916
Total $ 5,615
$ 5,399

~~BHGE LLC 2019 First Quarter FORM 10-Q | 8~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~


	Three Months Ended March 31,
Total Revenue	2020		2019
U.S.	$	1,315	$	1,505
Non-U.S.	4,110		4,110
Total	$	5,425	$	5,615

REMAINING PERFORMANCE OBLIGATIONS

As of March 31, ~~2019~~2020 and ~~2018,~~2019, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was ~~$20.5~~$22.7 billion and ~~$21.3~~$20.5 billion, respectively. As of March 31, ~~2019,~~2020, we expect to recognize revenue of approximately ~~47%~~53%, ~~62%~~67% and ~~89%~~91% of the total remaining performance obligations within 2, 5, and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations.

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 7

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 3. CURRENT RECEIVABLES

Current receivables are comprised of the following:

March 31, 2019 December 31, 2018
Customer receivables $ 5,305
$ 4,974
Related parties 718
746
Other 714
669
Total current receivables 6,737
6,389
Less: Allowance for doubtful accounts (335 ) (327 )
Total current receivables, net $ 6,402
$ 6,062


	March 31, 2020		December 31, 2019
Customer receivables	$	5,181	$	5,448
Related parties	538		570
Other	839		796
Total current receivables	6,558		6,814
Less: Allowance for credit losses	(333)		(323)
Total current receivables, net	$	6,225	$	6,491

Customer receivables are recorded at the invoiced amount. Related parties consists primarily of amounts owed to us by GE. The "Other" category consists primarily of indirect taxes, ~~customer retentions,~~ other tax receivables, customer retentions and advance payments to suppliers.

NOTE 4. INVENTORIES

Inventories, net of reserves of ~~$438~~$420 million and ~~$430~~$429 million as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, are comprised of the following:

March 31, 2019 December 31, 2018
Finished goods $ 2,782
$ 2,575
Work in process and raw material 2,089
2,045
Total inventories, net $ 4,871
$ 4,620


	March 31, 2020		December 31, 2019
Finished goods	$	2,474	$	2,546
Work in process and raw materials	2,060		2,062

Total inventories, net	$	4,534	$	4,608

~~We recorded inventory impairments of $61 million during~~During the three months ended March 31, ~~2018~~2020, we recorded $160 million of inventory impairments predominantly in our Oilfield Services (OFS) segment as a result of certain restructuring activities ~~we initiated.~~initiated by the Company. Charges for inventory impairments are predominantly reported in the "Cost of goods sold" caption of the condensed consolidated statements of income (loss).

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 98

Baker Hughes ~~a GE company,~~Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL

The changes in the carrying value of goodwill are detailed below by segment:


	Oilfield Services		Oilfield Equipment		Turbo-machinery & Process Solutions		Digital Solutions		Total
Balance at December 31, 2018, gross	$	12,932	$	4,177	$	2,186	$	2,432	$	24,471
Accumulated impairment at December 31, 2018	(183)		(867)		—		(254)		(3,754)
Balance at December 31, 2018	12,749		3,310		2,186		2,178		20,423
Currency exchange and others	—		9		(15)		(21)		(27)
Balance at December 31, 2019	12,749		3,319		2,171		2,157		20,396
Impairment	(11,428)		(3,289)		—		—		(14,717)
Currency exchange and others	(2)		(22)		(9)		(7)		(40)
Balance at March 31, 2020	$	1,319	$	8	$	2,162	$	2,150	$	5,639

Oilfield Services Oilfield Equipment Turbo-machinery & Process Solutions Digital Solutions Total
Balance at December 31, 2017, gross $ 15,565
$ 3,901
$ 1,906
$ 2,036
$ 23,408
Accumulated impairment at December 31, 2017 (2,633 ) (867 ) —
(254 ) (3,754 )
Balance at December 31, 2017 12,932
3,034
1,906
1,782
19,654
Purchase accounting adjustments⁽¹⁾
(157 ) 293
394
429
959
Currency exchange and others (26 ) (17 ) (114 ) (33 ) (190 )
Balance at December 31, 2018 12,749
3,310
2,186
2,178
20,423
Currency exchange and others —
22
6
17
45
Balance at March 31, 2019 $ 12,749
$ 3,332
$ 2,192
$ 2,195
$ 20,468

⁽¹⁾

Includes the final determination of fair value of the assets and liabilities and the related goodwill associated with the acquisition of Baker Hughes that was concluded in the second quarter of 2018. Of the total goodwill of $13,669 million resulting from the acquisition of Baker Hughes, $12,604 million is allocated to our Oilfield Services segment and the remainder to our other segments based on the expected benefit from the synergies of the acquisition.

~~We test goodwill for impairment annually in~~During the third quarter ~~using data as~~ of ~~July 1~~each fiscal year, in conjunction with our annual strategic planning process, we perform our annual goodwill impairment test for each of ~~that year.~~our reporting units. Our reporting units are the same as our ~~four~~4 reportable segments. We also test goodwill for impairment ~~between annual impairment testing dates~~ whenever events or circumstances occur ~~that,~~which, in our judgment, could more likely than not reduce the fair value of one or more reporting units below its carrying amount. ~~In assessing the possibility that a reporting unit’s fair value has been reduced below its carrying amount due to the occurrence of events or circumstances between annual~~Potential impairment ~~testing dates, we consider all available evidence, including,~~indicators include, but are not limited to, (i) the results of our ~~impairment testing at the prior~~most recent annual impairment testing, ~~date,~~ in particular the magnitude of the excess of fair value over carrying value observed, (ii) downward revisions to internal forecasts, and the magnitude thereof, if any, ~~(iii) the impact of the separation from GE, if any,~~ and ~~(iv)~~(iii) declines in ~~the~~our market capitalization ~~of BHGE~~ below ~~its~~our book value, and the magnitude and duration of those declines, if any.

During the first quarter of ~~2019,~~2020, Baker Hughes Company's market capitalization declined significantly compared to the fourth quarter of 2019. Baker Hughes Company's closing stock price fell to a historic low of $9.33 on March 23, 2020. Over the same period, the equity value of Baker Hughes Company's peer group companies and the overall U.S. stock market also declined significantly amid market volatility. In addition, the Oilfield Services Index (OSX), an indicator of investors’ view of the earnings prospects and cost of capital of the oil and gas services industry, traded at prices that were the lowest in its history. These declines were driven by the uncertainty surrounding the outbreak of the coronavirus (COVID-19) and other macroeconomic events such as the geopolitical tensions between OPEC and Russia, which also resulted in a significant drop in oil prices. Based on these factors, we ~~have not identified any events or circumstances~~concluded that ~~could more likely than not reduce~~a triggering event occurred and, accordingly, an interim quantitative impairment test was performed as of March 31, 2020 (“testing date”).

In performing the interim quantitative impairment test and consistent with our prior practice, we determined the fair value of ~~one or more~~each of our reporting units ~~below its carrying amount.~~using a combination of the income approach and the market approach by assessing each of these valuation methodologies based upon availability and relevance of comparable company data and determining the appropriate weighting.

AsUnder the income approach, the fair value for each of ~~March 31, 2019, we believe that the goodwill is recoverable, however, there can be no assurances that sustained declines in macroeconomic or business conditions affecting~~ our ~~industry and business will not occur. The impairment testing involves significant management judgment and are~~reporting units was determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We used our internal forecasts, updated for recent events, to estimate future cash flows with cash flows beyond the specific operating plans estimated using a terminal value calculation, which incorporates historical and forecasted trends, including an estimate of long-term future growth rates, based on our most recent views of the long-term outlook for each reporting unit. Our internal forecasts include assumptions about future commodity pricing ~~supply~~ and expected demand for our goods and ~~services,~~services. Due to the inherent uncertainties involved in making estimates and ~~market conditions, which are difficult to forecast in volatile economic environments. If~~assumptions, actual results ~~materially~~may differ from ~~the estimated assumptions utilized~~those assumed in our ~~forecasts, we may need to record impairment charges in future periods.~~

forecasts.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 109

Baker Hughes ~~a GE company,~~Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

We derived our discount rates using a capital asset pricing model and analyzing published rates for industries relevant to our reporting units to estimate the cost of equity financing. We used discount rates that are commensurate with the risks and uncertainties inherent in the respective businesses and in our internally developed forecasts, updated for recent events.

Valuations using the market approach were derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses was based on the markets in which the reporting units operate giving consideration to risk profiles, size, geography, and diversity of products and services.

Based upon the results of our interim quantitative impairment test, we concluded that the carrying value of the OFS and Oilfield Equipment (OFE) reporting units exceeded their estimated fair value as of the testing date, which resulted in goodwill impairment charges of $11,428 million and $3,289 million, respectively. The goodwill impairment was calculated as the amount that the carrying value of the reporting unit, including any goodwill, exceeded its fair value. The carrying value of our OFS and OFE reporting units equal their fair value upon completion of the goodwill impairment test whereas our other reporting units still maintain a headroom that is substantially in excess of their carrying values. Any significant adverse changes in future periods to our internal forecasts or the external market conditions, if any, could reasonably be expected to negatively affect our key assumptions and may result in future goodwill impairment charges which could be material.

OTHER INTANGIBLE ASSETS

Intangible assets are comprised of the following:


	March 31, 2020										December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships ⁽¹⁾	$	2,317	$	(853)	$	1,464	$	3,027	$	(1,045)	$	1,982
Technology ⁽¹⁾	1,030		(605)		425		1,075		(626)		449
Trade names and trademarks⁽¹⁾	380		(184)		196		696		(254)		442
Capitalized software ⁽¹⁾	1,181		(931)		250		1,193		(928)		265

Other	1		(1)		—		3		(2)		1
Finite-lived intangible assets	4,909		(2,574)		2,335		5,994		(2,855)		3,139
Indefinite-lived intangible assets	2,241		—		2,241		2,242		—		2,242
Total intangible assets	$	7,150	$	(2,574)	$	4,576	$	8,236	$	(2,855)	$	5,381

March 31, 2019 December 31, 2018
Gross
Carrying
Amount Accumulated
Amortization Net Gross
Carrying
Amount Accumulated
Amortization Net
Customer relationships $ 3,101
$ (983 ) $ 2,118
$ 3,085
$ (944 ) $ 2,141
Technology 1,091
(557 ) 534
1,107
(526 ) 581
Trade names and trademarks 703
(237 ) 466
698
(229 ) 469
Capitalized software 1,169
(866 ) 303
1,118
(824 ) 294
Other 1
(1 ) —
14
(2 ) 12
Finite-lived intangible assets 6,065
(2,644 ) 3,421
6,022
(2,525 ) 3,497
Indefinite-lived intangible assets ⁽¹⁾
2,242
—
2,242
2,222
—
2,222
Total intangible assets $ 8,307
$ (2,644 ) $ 5,663
$ 8,244
$ (2,525 ) $ 5,719

⁽¹⁾
During the three months ended March 31, 2020, we recorded intangible asset impairments to customer relationships of $476 million, technology of $8 million, trade names and trademarks of $236 million, and capitalized software of $3 million. See "Note 17. Restructuring, Impairment and Other" for further discussion.


⁽¹⁾	~~Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name.~~

Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 1 to 30 years. Amortization expense for the three months ended March 31, 2020 and 2019 was $84 million and ~~2018 was~~ $96 million, ~~and $139 million,~~ respectively.

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 10

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

Estimated amortization expense for the remainder of ~~2019~~2020 and each of the subsequent five fiscal years is expected to be as follows:


Year	Estimated Amortization Expense
Remainder of 2020	$	212
2021	236
2022	201
2023	182
2024	172
2025	144

Year Estimated Amortization Expense
Remainder of 2019 $ 261
2020 329
2021 280
2022 237
2023 225
2024 218

~~BHGE LLC 2019 First Quarter FORM 10-Q | 11~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

NOTE 6. CONTRACT AND OTHER DEFERRED ASSETS

A majority of our long-term product service agreements relate to our Turbomachinery & Process Solutions segment. Contract assets reflect revenue earned in excess of billings on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements and other deferred contract related costs. Contract assets are comprised of the following:


	March 31, 2020		December 31, 2019
Long-term product service agreements	$	589	$	603
Long-term equipment contracts ⁽¹⁾	1,049		1,097
Contract assets (total revenue in excess of billings)	1,638		1,700
Deferred inventory costs	142		130
Non-recurring engineering costs	46		51

Contract and other deferred assets	$	1,826	$	1,881

March 31, 2019 December 31, 2018
Long-term product service agreements $ 576
$ 609
Long-term equipment contracts ⁽¹⁾
1,040
1,085
Contract assets (total revenue in excess of billings) ⁽²⁾
1,616
1,694
Deferred inventory costs ⁽³⁾
144
179
Non-recurring engineering costs 48
21
Contract and other deferred assets $ 1,808
$ 1,894


⁽¹⁾⁽¹⁾Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment and certain other service agreements.	~~Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment and certain other service agreements.~~


⁽²⁾	~~Contract assets (total revenue in excess of billings) were $1,684 million as of January 1, 2018.~~


⁽³⁾	~~Deferred inventory costs were $360 million as of January 1, 2018, which represents cost deferral for shipped goods and other costs where the criteria for revenue recognition has not yet been met.~~

Revenue recognized during the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 from performance obligations satisfied (or partially satisfied) in previous periods related to our long-term service agreements was $7$6 million and ~~$10~~$7 million, respectively. This includes revenue recognized from revisions to cost or billing estimates that may affect a contract’s total estimated profitability resulting in an adjustment of earnings.

NOTE 7. PROGRESS COLLECTIONS AND DEFERRED INCOME

Contract liabilities include progress collections, which reflects billings in excess of revenue, and deferred income on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements. Contract liabilities are comprised of the following:


	March 31, 2020		December 31, 2019
Progress collections	$	3,066	$	2,760
Deferred income	130		110
Progress collections and deferred income (contract liabilities)	$	3,196	$	2,870

March 31, 2019 December 31, 2018
Progress collections $ 1,790
$ 1,600
Deferred income 133
165
Progress collections and deferred income (contract liabilities) ⁽¹⁾
$ 1,923
$ 1,765


⁽¹⁾	~~Progress collections and deferred income (contract liabilities) were $1,775 million at January 1, 2018.~~

Revenue recognized during the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 that was included in the contract liabilities at the beginning of the period was ~~$553~~$410 million and ~~$602~~$553 million, respectively.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 1211

Baker Hughes ~~a GE company,~~Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 8. LEASES

Our leasing activities primarily consist of operating leases for administrative offices, manufacturing facilities, research centers, service centers, sales offices and certain equipment.


	Three Months Ended March 31,
Operating Lease Expense	2020		2019
Long-term fixed lease	$	72	$	48
Long-term variable lease	11		11
Short-term lease ⁽¹⁾	161		165
Total operating lease expense	$	244	$	224

Operating Lease Expense Three Months Ended March 31, 2019
Long-term fixed lease $ 48
Long-term variable lease 11
Short-term lease 123
Total operating lease expense $ 182

⁽¹⁾
Leases with a term of one year or less, including leases with a term of one month or less

~~For the three months ended March 31, 2018, total operating lease expense was $147 million.~~ Cash flows used in operating activities for operating leases approximates our expense for the three months ended March 31, ~~2019~~2020 and ~~2018.~~

~~As of March 31, 2019, maturities of our operating lease liabilities are as follows:~~

Year Operating leases
Remainder of 2019 $ 165
2020 194
2021 140
2022 113
2023 80
Thereafter 386
Total lease payments 1,078
Less: imputed interest 209
Total $ 869

Amounts recognized in the condensed consolidated statement of financial position as of March 31, 2019:
Operating leases
All other current liabilities $ 194
All other liabilities 675
Total $ 869

~~ROU assets of $860 million as of March 31, 2019 were included in "All other assets" in our condensed consolidated statements of financial position.~~

2019. The weighted-average remaining lease term as of March 31, 2020 and 2019 was approximately eight years and nine years, respectively, for our operating leases. The weighted-average discount rate used to determine the operating lease liability as of March 31, 2020 and 2019 was 3.8% and 4.4%., respectively.

~~BHGE LLC 2019 First Quarter FORM 10-Q | 13~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

NOTE 9. BORROWINGS

Short-term and long-term borrowings are comprised of the following:

March 31, 2019 December 31, 2018
Short-term borrowings
Short-term borrowings from GE $ 861
$ 896
Other borrowings 45
46
Total short-term borrowings 906
942

Long-term borrowings
3.2% Senior Notes due August 2021 522
523
2.773% Senior Notes due December 2022 1,245
1,245
8.55% Debentures due June 2024 130
131
3.337% Senior Notes due December 2027 1,343
1,343
6.875% Notes due January 2029 292
294
5.125% Senior Notes due September 2040 1,305
1,306
4.08% Senior Notes due December 2047 1,336
1,336
Other long-term borrowings 97
107
Total long-term borrowings 6,270
6,285
Total borrowings $ 7,176
$ 7,227


	March 31, 2020		December 31, 2019
Short-term borrowings


Short-term borrowings from GE	$	156	$	273
Other borrowings	54		48
Total short-term borrowings	210		321


Long-term borrowings

2.773% Senior Notes due December 2022	1,247		1,246
8.55% Debentures due June 2024	126		127
3.337% Senior Notes due December 2027	1,344		1,343
6.875% Notes due January 2029	287		289
3.138% Senior Notes due November 2029	522		522
5.125% Senior Notes due September 2040	1,300		1,301
4.08% Senior Notes due December 2047	1,337		1,337
Other long-term borrowings	122		136
Total long-term borrowings	6,285		6,301
Total borrowings	$	6,495	$	6,622

We have a $3 billion committed unsecured revolving credit facility (the 2017 Credit Agreement) with commercial banks maturing in July 2022. The 2017 Credit Agreement contains certain customary representations and warranties, certain affirmative covenants and no negative covenants. Upon the occurrence of certain events of default, our obligations under the 2017 Credit Agreement may be accelerated. Such events of default include payment defaults to lenders under the 2017 Credit Agreement, and other customary defaults. No such events of default have occurred. At March 31, 2019 and December 31, 2018, there were no borrowings under the 2017 Credit Agreement.

We have a commercial paper program under which we may issue from time to time up to $3 billion in commercial paper with maturities of no more than 397 days. At March 31, 2019 and December 31, 2018, there were no borrowings outstanding under the commercial paper program. The maximum combined borrowing at any time under both the 2017 Credit Agreement and the commercial paper program is $3 billion.

~~Concurrent with the Transactions associated with the acquisition of Baker Hughes on July 3, 2017,~~ Baker Hughes Co-Obligor, Inc. ~~became~~is a co-obligor, jointly and severally with ~~us,~~BHH LLC on our ~~registered~~long-term debt securities. This co-obligor is a 100%-owned finance subsidiary of ~~the Company~~BHH LLC that was incorporated for the sole purpose of serving as a corporate co-obligor of long-term debt securities and has no assets or operations other than those related to its sole purpose. As of March 31, 2020, Baker Hughes Co-Obligor, Inc. is ~~also~~ a co-obligor of ~~the $3,950 million senior notes issued in December 2017 by us in a private placement and subsequently registered in January 2018.~~our long-term debt securities totaling $6,163 million.

Certain Senior Notes contain covenants that restrict our ability to take certain actions, including, but not limited to, the creation of certain liens securing debt, the entry into certain sale-leaseback transactions and engaging in

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 12

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

certain merger, consolidation and asset sale transactions in excess of specified limits. At March 31, 2020, we were in compliance with all debt covenants.

The estimated fair value of total borrowings at March 31, ~~2019~~2020 and December 31, ~~2018~~2019 was ~~$6,966~~$5,866 million and ~~$6,629~~$6,847 million, respectively. For a majority of our borrowings the fair value was determined using quoted period-end market prices. Where market prices are not available, we estimate fair values based on valuation methodologies using current market interest rate data adjusted for our non-performance risk.

See "Note 15. Related Party Transactions" for additional information on the short-term borrowings from GE.

~~BHGE LLC 2019 First Quarter FORM 10-Q | 14~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

NOTE 10. EMPLOYEE BENEFIT PLANS

~~In 2018, certain of our U.S. employees were covered under various U.S. GE employee benefit plans, including GE's retirement plans (pension, retiree health~~We have both funded and life insurance, and savings benefit plans). Beginning in 2019, such employees ceased to participate in these GE U.S. plans. In addition, certain United Kingdom (UK) employees participate in the GE UK Pension Plan. We are allocated relevant participation costs for these GE employee benefit plans as part of multi-employer plans. As such, we have not recorded any liabilities associated with our participation in these plans. Expenses associated with our participation in these plans was $2 million and $37 million in the three months ended March 31, 2019 and 2018, respectively. In November 2018, the Company entered into an agreement with GE whereby GE will transfer the assets and liabilities of the GE UK Pension Plan related to the oil & gas businesses to BHGE on what is intended to be a fully funded basis. Subsequent to this transfer, BHGE employees shall cease to participate in the GE UK Pension Plan. This transfer is expected to close in 2019.

~~In addition to these GE plans, certain of our employees are also covered by company sponsored employee defined benefit plans. These~~unfunded defined benefit plans which include ~~four~~4 U.S. plans and ~~six~~7 non-U.S. plans, primarily in the UK, Germany, and Canada, all with plan assets or obligations greater than $20 million. We use a December 31 measurement date for these ~~plans. These defined benefit~~ plans, and generally provide benefits to employees based on formulas recognizing length of service and earnings.

The components of net periodic cost ~~(benefit)~~ of plans sponsored by us are as ~~follows for the three months ended March 31:~~follows:

2019 2018
Service cost $ 4
$ 5
Interest cost 19
18
Expected return on plan assets (25 ) (30 )
Amortization of net actuarial loss 4
2
Net periodic cost (benefit) $ 2
$ (5 )


	Three Months Ended March 31,
	2020		2019
Service cost	$	7	$	4
Interest cost	20		19
Expected return on plan assets	(31)		(25)

Amortization of net actuarial loss	8		4


Net periodic cost	$	4	$	2

The service cost component of the net periodic cost ~~(benefit)~~ is included in operating income (loss) and all other components are included in ~~non operating~~non-operating income (loss) in our condensed consolidated statements of income (loss).

NOTE 11. INCOME TAXES

For the ~~quarter~~three months ended March 31, ~~2019,~~2020, income tax expense was ~~$67~~$8 million compared to ~~$38~~tax expense of $67 million for the prior year ~~quarter.~~period. The difference between the U.S. statutory tax rate of 21% and the current effective tax rate is primarily related to ~~the geographical mix of earnings~~non-deductible goodwill impairment and ~~losses, coupled with $21 million related to~~ losses with no tax benefit due to valuation allowances. We are a partnership for U.S. federal tax purposes, therefore, any tax effects associated with the U.S. are recognized by our members and not reflected in our tax expense.

In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the three months ended March 31, 2020, there were no material tax impacts to our condensed consolidated financial statements as it relates to COVID-19 measures. We continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others.

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 13

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 12. MEMBERS' EQUITY

COMMON UNITS

The ~~BHGE~~BHH LLC Agreement provides that initially there is one class of common units (Units), which are currently held by ~~BHGE~~Baker Hughes and GE. If ~~BHGE~~Baker Hughes issues a share of Class A common stock, including in connection with an equity incentive or similar plan, we will also issue a corresponding ~~common unit~~Unit to ~~BHGE~~Baker Hughes or one of its direct subsidiaries. For the three months ended March 31, 2020 and 2019 we issued ~~$1,541~~3,684 thousand ~~common units~~and 1,541 thousand Units to ~~BHGE~~Baker Hughes in connection with the issuance of Class A common stock by ~~BHGE.~~

~~BHGE LLC 2019 First Quarter FORM 10-Q | 15~~

Baker Hughes, ~~a GE company, LLC~~respectively.

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

The following table presents the changes in the number of ~~common units~~Units outstanding (in thousands):

Common Units Held by BHGE Common Units Held by GE
Balance at December 31, 2018 513,399
521,543
Issue of units to BHGE under equity incentive plan 1,541
—
Balance at March 31, 2019 514,940
521,543


	Common Units Held by Baker Hughes			Common Units Held by GE
	2020	2019	2020	2019
Balance at January 1	650,065	513,399	377,428	521,543
Issue of Units to Baker Hughes under equity incentive plan	3,684	1,541	—	—




Balance at March 31	653,749	514,940	377,428	521,543

ACCUMULATED OTHER COMPREHENSIVE LOSS (AOCL)

The following tables present the changes in accumulated other comprehensive loss, net of tax:


	Investment Securities		Foreign Currency Translation Adjustments		Cash Flow Hedges		Benefit Plans		Accumulated Other Comprehensive Loss
Balance at December 31, 2019	$	2	$	(2,274)	$	10	$	(327)	$	(2,589)
Other comprehensive income (loss) before reclassifications	(2)		(277)		(9)		17		(271)
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		—		11		11
Deferred taxes	—				1		(5)		(4)
Other comprehensive income (loss)	(2)		(277)		(8)		23		(264)
Less: Other comprehensive income (loss) attributable to noncontrolling interests	—		—		—		—		—


Balance at March 31, 2020	$	—	$	(2,551)	$	2	$	(304)	$	(2,853)

Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss
Balance at December 31, 2018 $ —
$ (2,326 ) $ (3 ) $ (133 ) $ (2,462 )
Other comprehensive income (loss) before reclassifications 2
166
5
(2 ) 171
Amounts reclassified from accumulated other comprehensive income (loss) —
—
—
1
1
Deferred taxes —
—
(1 ) 1
—
Other comprehensive income 2
166
4
—
172
Less: Other comprehensive income attributable to noncontrolling interests —
—
—
—
—
Balance at March 31, 2019 $ 2
$ (2,160 ) $ 1
$ (133 ) $ (2,290 )

Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss
Balance at December 31, 2017 $ 1
$ (1,824 ) $ 2
$ (60 ) $ (1,881 )
Other comprehensive income (loss) before reclassifications —
312
8
(3 ) 317
Amounts reclassified from accumulated other comprehensive income (loss) —
—
—
—
—
Deferred taxes —
—
(1 ) —
(1 )
Other comprehensive income (loss) —
312
7
(3 ) 316
Less: Other comprehensive income (loss) attributable to noncontrolling interests —
—
—
—
—
Balance at March 31, 2018 $ 1
$ (1,512 ) $ 9
$ (63 ) $ (1,565 )


	Investment Securities		Foreign Currency Translation Adjustments		Cash Flow Hedges		Benefit Plans		Accumulated Other Comprehensive Loss
Balance at December 31, 2018	$	—	$	(2,326)	$	(3)	$	(133)	$	(2,462)
Other comprehensive income (loss) before reclassifications	2		166		5		(2)		171
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		—		1		1
Deferred taxes	—		—		(1)		1		—
Other comprehensive income	2		166		4		—		172
Less: Other comprehensive income attributable to noncontrolling interests	—		—		—		—		—


Balance at March 31, 2019	$	2	$	(2,160)	$	1	$	(133)	$	(2,290)

The amounts reclassified from accumulated other comprehensive loss during the three months ended March

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 14

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

31, ~~2019~~2020 represent amortization of net actuarial gain (loss) which are included in the computation of net periodic pension cost (see "Note 10. Employee Benefit Plans" for additional details). These reclassifications are recorded across the various cost and expense line items within the condensed consolidated statements of income (loss).

~~BHGE LLC 2019 First Quarter FORM 10-Q | 16~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

NOTE 13. FINANCIAL INSTRUMENTS

RECURRING FAIR VALUE MEASUREMENTS

Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities.

March 31, 2019 December 31, 2018
Level 1 Level 2 Level 3 Net Balance Level 1 Level 2 Level 3 Net Balance
Assets

Derivatives $ —
$ 55
$ —
$ 55
$ —
$ 74
$ —
$ 74
Investment securities 49
—
290
339
39
—
288
327
Total assets 49
55
290
394
39
74
288
401

Liabilities
Derivatives —
(47 ) —
(47 ) —
(82 ) —
(82 )
Total liabilities $ —
$ (47 ) $ —
$ (47 ) $ —
$ (82 ) $ —
$ (82 )


	March 31, 2020														December 31, 2019
	Level 1		Level 2		Level 3		Net Balance		Level 1		Level 2		Level 3		Net Balance
Assets
Derivatives	$	—	$	61	$	—	$	61	$	—	$	58	$	—	$	58
Investment securities	2		—		187		189		24		—		259		283
Total assets	2		61		187		250		24		58		259		341

Liabilities
Derivatives	—		(36)		—		(36)		—		(27)		—		(27)
Total liabilities	$	—	$	(36)	$	—	$	(36)	$	—	$	(27)	$	—	$	(27)

There were no transfers between Level 1, 2 and 3 during the three months ended March 31, ~~2019.~~2020.

The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities:

2019 2018
Balance at January 1 $ 288
$ 304
Purchases 6
34
Proceeds at maturity (6 ) (12 )
Unrealized gains recognized in AOCI 2
—
Balance at March 31 $ 290
$ 326


	2020		2019
Balance at January 1	$	259	$	288
Purchases	—		6
Proceeds at maturity	(69)		(6)
Unrealized gains (losses) recognized in accumulated other comprehensive income (loss)	(2)		2
Balance at March 31	$	187	$	290

The most significant unobservable input used in the valuation of our Level 3 instruments is the discount rate. Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value of our investment securities. There are no0 unrealized gains or losses recognized in the condensed consolidated statement of income (loss) on account of any Level 3 instrument still held at the reporting date. At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we held ~~$144~~$50 million and ~~$149~~$111 million, respectively, of these investment securities on behalf of GE.

March 31, 2019 December 31, 2018
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value
Investment securities

Non-U.S. debt securities ⁽¹⁾
$ 288
$ 2
$ —
$ 290
$ 288
$ —
$ —
$ 288
Equity securities ⁽²⁾
49
—
—
49
39
—
—
39
Total $ 337
$ 2
$ —
$ 339
$ 327
$ —
$ —
$ 327


⁽¹⁾	~~All of our investment securities are classified as available for sale instruments. Non-U.S. debt securities mature within four years.~~


⁽²⁾	~~Gains (losses) recorded to earnings related to these securities were $10 million and $(13) million for the three months ended March 31, 2019 and 2018, respectively.~~


	March 31, 2020														December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investment securities
Non-U.S. debt securities ⁽¹⁾	$	187	$	—	$	—	$	187	$	257	$	2	$	—	$	259
Equity securities ⁽²⁾	2		—		—		2		24		—		—		24
Total	$	189	$	—	$	—	$	189	$	281	$	2	$	—	$	283

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 1715

Baker Hughes ~~a GE company,~~Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

⁽¹⁾All of our investment securities are classified as available for sale instruments. Non-U.S. debt securities mature within three years.

⁽²⁾Gains (losses) recorded to earnings related to these securities were $(13) million and $10 million for the three months ended March 31, 2020 and 2019, respectively.

FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS

Our financial instruments include cash, cash equivalents, current receivables, certain investments, accounts payable, short and long-term debt, and derivative financial instruments. Except for long-term debt, the estimated fair value of these financial instruments at March 31, ~~2019~~2020 and December 31, ~~2018~~2019 approximates their carrying value as reflected in our condensed consolidated financial statements. For further information on the fair value of our debt, see "Note 9. Borrowings."

DERIVATIVES AND HEDGING

We use derivatives to manage our risks and do not use derivatives for speculation.

The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives.

March 31, 2019 December 31, 2018
Assets (Liabilities) Assets (Liabilities)
Derivatives accounted for as hedges
Currency exchange contracts $ 1
$ —
$ —
$ (7 )

Derivatives not accounted for as hedges
Currency exchange contracts 52
(46 ) 74
(75 )
Commodity derivatives 2
—
—
—
Other derivatives —
(1 ) —
—
Total derivatives $ 55
$ (47 ) $ 74
$ (82 )


	March 31, 2020						December 31, 2019
	Assets		(Liabilities)		Assets		(Liabilities)
Derivatives accounted for as hedges
Currency exchange contracts	$	1	$	(1)	$	11	$	—

Derivatives not accounted for as hedges
Currency exchange contracts and other	60		(35)		47		(27)


Total derivatives	$	61	$	(36)	$	58	$	(27)

Derivatives are classified in the captions "All other current assets," "All other assets," "All other current liabilities," and "All other liabilities" depending on their respective maturity date.

As of March 31, ~~2019~~2020 and December 31, ~~2018, $50~~2019, $60 million and ~~$67~~$52 million of derivative assets are recorded in "All other current assets" and $5$1 million and $7$6 million are recorded in "All other assets" of the condensed consolidated statements of financial position, respectively. As of March 31, ~~2019~~2020 and December 31, ~~2018, $44~~2019, $34 million and ~~$79~~$24 million of derivative liabilities are recorded in "All other current liabilities" and $3$2 million and $3 million are recorded in "All other liabilities" of the condensed consolidated statements of financial position, respectively.

~~RISK MANAGEMENT STRATEGY~~

We buy, manufacture and sell components and products as well as provide services across global markets. These activities expose us to changes in foreign currency exchange rates and commodity prices, which can adversely affect revenues earned and costs of operating our business. When the currency in which we sell equipment differs from the primary currency (known as its functional currency) and the exchange rate fluctuates, it will affect the revenue we earn on the sale. These sales and purchase transactions also create receivables and payables denominated in foreign currencies, along with other monetary assets and liabilities, which expose us to foreign currency gains and losses based on changes in exchange rates. Changes in the price of a raw material that we use in manufacturing can affect the cost of manufacturing. We use derivatives to mitigate or eliminate these exposures.

FORMS OF HEDGING

Cash Flow Hedges

We use cash flow hedging primarily to reduce or eliminate the effects of foreign exchange rate changes on purchase and sale contracts. Accordingly, the vast majority of our derivative activity in this category consists of currency exchange contracts. We also use commodity derivatives to reduce or eliminate price risk on raw materials

purchased for use in manufacturing.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 1816

Baker Hughes ~~a GE company,~~Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

Changes in the fair value of cash flow hedges are recorded in a separate component of equity (referred to below as Accumulated Other Comprehensive Income, or AOCI) and are recorded in earnings in the period in which the hedged transaction occurs. The table below summarizes this activity by hedging instrument.

~~purchased for use~~


	Three Months Ended March 31,
	Gain (Loss) Recognized in AOCI						Gain (Loss) Reclassified from AOCI to Earnings
	2020		2019		2020		2019
Currency exchange contracts	$	(9)	$	5	$	—	$	—

We expect to transfer $2 million to earnings as a gain in ~~manufacturing.~~the next 12 months contemporaneously with the earnings effects of the related forecast transactions. Both at March 31, 2020 and December 31, 2019, the maximum term of derivative instruments that hedge forecast transactions was one year.

Economic Hedges

These derivatives are not designated as hedges from an accounting standpoint (and therefore we do not apply hedge accounting to the relationship) but otherwise serve the same economic purpose as other hedging arrangements. ~~Some economic~~Economic hedges are used when changes in the carrying amount of the hedged item are already recorded in earnings in the same period as the derivative, making hedge accounting unnecessary. For some other types of economic hedges, changes in the fair value of the derivative are recorded in earnings currently but changes in the value of the forecasted foreign currency cash flows are only recognized in earnings when they occur. As a result, even though the derivative is an effective economic hedge, there is a net effect on earnings in each period due to differences in the timing of earnings recognition between the derivative and the hedged item. These derivatives are marked to fair value through earnings each period.

The following table summarizes the gains (losses) from derivatives not designated as hedges in the condensed consolidated statements of income (loss).


Derivatives not designated as hedging instruments	Condensed consolidated statement of income caption	Three Months Ended March 31,
						2020	2019
Currency exchange contracts ⁽¹⁾	Cost of goods sold	$	(8)	$	3
Currency exchange contracts	Selling, general and administrative	65		(1)
Commodity derivatives	Cost of goods sold	(2)		2
Other derivatives	Other non-operating income, net	8		(1)
Total ⁽²⁾		$	63	$	3

⁽¹⁾Excludes gains of $7 million and losses of $2 million on embedded derivatives for the three months ended March 31, 2020 and 2019, respectively, as embedded derivatives are not considered to be hedging instruments in our economic hedges.

⁽²⁾The effect on earnings of derivatives not designated as hedges is substantially offset by the change in fair value of the economically hedged items in the current and future periods.

NOTIONAL AMOUNT OF DERIVATIVES

The notional amount of a derivative is the number of units of the underlying (for example, the notional principal amount of the debt in an interest rate swap). A substantial majority of the outstanding notional amount of ~~$5.4~~$5.5 billion and ~~$6.4~~$5.7 billion at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, is related to hedges of anticipated sales and purchases in foreign currency, commodity purchases, and contractual terms in contracts that are considered embedded derivatives and for intercompany borrowings in foreign currencies. We generally disclose derivative notional amounts on a gross basis to indicate the total counterparty risk. Where we have gross purchase and sale derivative contracts for a particular currency, we look to execute these contracts with the same counterparty to reduce our exposure. The corresponding net notional amounts were ~~$2.9~~$1.2 billion and ~~$2.8~~$1.8 billion at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

~~CASH FLOW HEDGES~~

Three Months Ended March 31,
Gain (Loss) Recognized in AOCI Gain (Loss) Reclassified from AOCI to Earnings
2019 2018 2019 2018
Currency exchange contracts $ 5
$ 8
$ —
$ —

We expect to transfer $1 million to earnings as an income in the next 12 months contemporaneously with the earnings effects of the related forecast transactions. At March 31, 2019 and December 31, 2018, the maximum term of derivative instruments that hedge forecast transactions was one year and two years, respectively.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 1917

Baker Hughes ~~a GE company,~~Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

~~ECONOMIC HEDGES~~

The following table summarizes the gains (losses) from derivatives not designated as hedges on the condensed consolidated statements of income (loss) for the three months ended March 31, 2019 and 2018.

Derivatives not designated as hedging instruments Condensed consolidated statement of income caption Three Months Ended March 31,
2019 2018
Currency exchange contracts ⁽¹⁾
Cost of goods sold $ 3
$ 41
Currency exchange contracts Selling, general and administrative expenses (1 ) (24 )
Commodity derivatives Cost of goods sold 2
—
Other derivatives Other non operating income, net (1 ) —
Total ⁽²⁾
$ 3
$ 17


⁽¹⁾	Excludes losses on embedded derivatives of $2 million and $39 million for the three months ended March 31, 2019 and 2018, respectively, as embedded derivatives are not considered to be hedging instruments in our economic hedges.


⁽²⁾	~~The effect on earnings of derivatives not designated as hedges is substantially offset by change in fair value of the economically hedged items in the current and future periods.~~

COUNTERPARTY CREDIT RISK

Fair values of our derivatives can change significantly from period to period based on, among other factors, market movements and changes in our positions. We manage counterparty credit risk (the risk that counterparties will default and not make payments to us according to the terms of our agreements) on an individual counterparty basis.

OTHER EQUITY INVESTMENTS

As of March 31, 2020 and December 31, 2019, the carrying amount of equity securities without readily determinable fair values was $637 million.

As required under U.S. GAAP, we have discontinued applying the equity method on our investment in BJ Services as previous losses have reduced our investment to 0, and we have no requirements to advance any additional funds. We will resume application of the equity method only after our share of unrecognized net income equals our share of net loss not recognized during the period the equity method was suspended.

NOTE 14. SEGMENT INFORMATION

Our reportable segments, which are the same as our operating segments, are organized based on the nature of markets and customers. We report our operating results through ~~four~~our 4 operating segments that ~~consists~~consist of similar products and services within each segment as described below.

OILFIELD SERVICES (OFS)

~~OFS~~Oilfield Services provides products and services for onshore and offshore operations across the lifecycle of a well, ranging from drilling, evaluation, completion, production and intervention. Products and services include diamond and tri-cone drill bits, drilling services, including directional drilling technology, measurement while drilling & logging while drilling, downhole completion tools and systems, wellbore intervention tools and services, wireline services, drilling and completions fluids, oilfield and industrial chemicals, pressure pumping, and artificial lift technologies, including electrical submersible pumps.

OILFIELD EQUIPMENT (OFE)

~~OFE~~Oilfield Equipment provides a broad portfolio of products and services required to facilitate the safe and reliable flow of hydrocarbons from the subsea wellhead to the surface. Products and services include pressure control equipment and services, subsea production systems and services, drilling equipment, and flexible pipeline systems. ~~OFE~~Oilfield Equipment designs and manufactures onshore and offshore drilling and production systems and equipment for floating production platforms and provides a full range of services related to onshore and offshore drilling activities.

TURBOMACHINERY & PROCESS SOLUTIONS (TPS)

~~TPS~~Turbomachinery & Process Solutions provides equipment and related services for mechanical-drive, compression and power-generation applications across the oil and gas industry as well as products and services to serve the downstream segments of the industry including refining, petrochemical, distributed gas, flow and process control and other industrial

~~BHGE LLC 2019 First Quarter FORM 10-Q | 20~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

applications. The ~~TPS~~Turbomachinery & Process Solutions portfolio includes drivers (aero-derivative gas turbines, heavy-duty gas turbines and synchronous and induction electric motors), compressors (centrifugal and axial, direct drive high speed, integrated, subsea compressors, turbo expanders and reciprocating), turn-key solutions (industrial modules and waste heat recovery), pumps, valves, and compressed natural gas (CNG) and small-scale liquefied natural gas (LNG) solutions used primarily for shale oil and gas field development.

DIGITAL SOLUTIONS (DS)

DSDigital Solutions provides equipment, software, and services for a wide range of industries, including oil & gas, power generation, aerospace, metals, and transportation. The offerings include sensor-based process

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 18

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

measurement, non-destructive testing and inspection, turbine, generator and plant controls and condition monitoring, as well as pipeline integrity solutions.

SEGMENT RESULTS

Segment revenue and profit are determined based on the internal performance measures used by the Company to assess the performance of each segment in a financial period. Summarized financial information is shown in the following tables. Consistent accounting policies have been applied by all segments within the Company, for all reporting periods.

Three Months Ended March 31,
Segments revenue 2019 2018
Oilfield Services $ 2,986
$ 2,678
Oilfield Equipment 735
664
Turbomachinery & Process Solutions 1,302
1,460
Digital Solutions 592
598
Total $ 5,615
$ 5,399


	Three Months Ended March 31,
Segment revenue	2020		2019
Oilfield Services	$	3,139	$	2,986
Oilfield Equipment	712		735
Turbomachinery & Process Solutions	1,085		1,302
Digital Solutions	489		592
Total	$	5,425	$	5,615

The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes ~~and equity in loss of affiliate and~~ before the following: net interest expense, net other ~~non operating~~non-operating income, ~~(loss),~~ corporate expenses, restructuring, impairment and other charges, inventory impairments, separation and merger related costs, goodwill impairments and certain gains and losses not allocated to the operating segments.


	Three Months Ended March 31,
Segment income (loss) before income taxes	2020		2019
Oilfield Services	$	206	$	176
Oilfield Equipment	(8)		12
Turbomachinery & Process Solutions	134		118
Digital Solutions	29		68
Total segment	361		373
Corporate	(122)		(100)
Inventory impairment ⁽¹⁾	(160)		—
Goodwill impairment	(14,717)		—
Restructuring, impairment and other	(1,325)		(62)
Separation and merger related	(41)		(34)
Other non-operating income, net	25		21
Interest expense, net	(59)		(59)
Total	$	(16,037)	$	138

Three Months Ended March 31,
Segment income (loss) before income taxes 2019 2018
Oilfield Services $ 176
$ 141
Oilfield Equipment 12
(6 )
Turbomachinery & Process Solutions 118
119
Digital Solutions 68
73
Total segment 373
327
Corporate (100 ) (98 )
Inventory impairment ⁽¹⁾
—
(61 )
Restructuring, impairment and other (62 ) (162 )
Separation and merger related costs (34 ) (46 )
Other non operating income, net 21
2
Interest expense, net (59 ) (46 )
Total $ 138
$ (85 )
⁽¹⁾Charges for inventory impairments are predominantly reported in the "Cost of goods sold" caption of the condensed consolidated statements of income (loss).


⁽¹⁾	~~Charges for inventory impairments are reported in the "Cost of goods sold" caption of the condensed consolidated statements of income (loss).~~

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 2119

Baker Hughes ~~a GE company,~~Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

The following table presents total assets by segment:


Segment assets	March 31, 2020		December 31, 2019
Oilfield Services	$	17,380	$	30,317
Oilfield Equipment	3,933		7,645
Turbomachinery & Process Solutions	8,239		8,365
Digital Solutions	3,847		3,983
Total segment	33,399		50,310
Corporate and eliminations ⁽¹⁾	3,742		2,903
Total	$	37,141	$	53,213

⁽¹⁾Corporate and eliminations in total segment assets includes adjustments of intercompany investments and receivables that are reflected within the total assets of the 4 reportable segments.

NOTE 15. RELATED PARTY TRANSACTIONS

~~In connection with the Transactions on July 3, 2017,~~Our most significant related party transactions are transactions that we have entered into ~~various agreements~~ with our members and their affiliates. GE and its affiliates ~~that govern our relationship with GE following the Transactions including an Intercompany Services Agreement pursuant~~have provided and continue to ~~which GE and its affiliates and the Company~~ provide ~~certain~~a variety of services to ~~each other. GE provides~~us. We also enter into certain ~~administrative services, GE proprietary technology and use of certain GE trademarks for an annual service fee of $55 million. GE may also provide~~transactions with Baker Hughes as provided in the BHH LLC Agreement. On September 16, 2019, GE's ownership in us with certain additional administrative services under the Intercompany Services Agreement and the fees for such services are based on actual usage of such services and historical GE intercompany pricing. In addition, we provide GE and its affiliates with confidential accesswas reduced from approximately 50.3% to certain of our proprietary technology and related developments and enhancements thereto related to GE's operations, products or service offerings. Under the terms of the Master Agreement Framework, entered into on November 13, 2018, the annual intercompany services fee of $55 million that we agreed to pay GE as part of the Transactions is reduced by 50% to $27.5 million per year beginning on January 1, 2019. The Intercompany Services Agreement will terminate 90 days following theapproximately 36.8% (the Trigger ~~Date. See further discussion below. We incurred costs of $7 million and $14 million related to the Intercompany Services Agreement during the three months ended~~Date). At March 31, ~~2019~~2020, GE's interest in us was 36.6% and Baker Hughes' interest in us was 63.4%.

During 2018 ~~respectively.~~

~~We sold $81 million~~ and ~~$100 million of products and services to GE and its affiliates during the three months ended March 31,~~ 2019, ~~and 2018, respectively. Purchases from GE and its affiliates were $451 million and $403 million during the three months ended March 31, 2019 and 2018, respectively.~~

~~MASTER AGREEMENT FRAMEWORK~~

~~In June 2018, GE announced their intention to pursue an orderly separation from BHGE over time. On November 13, 2018,~~ we entered into a Master Agreement and a series of related ancillary agreements ~~and binding term sheets (which were later negotiated into definitive agreements)~~ with GE and ~~BHGE~~Baker Hughes (collectively, the Master Agreement Framework) designed to ~~further~~ solidify the commercial and technological collaborations between usBaker Hughes and GE and to facilitate our ~~ability to~~ transition from operating as a controlled company. In particular, the Master Agreement Framework ~~contemplates~~contemplated long-term agreements between ~~us, BHGE~~Baker Hughes, BHH LLC and GE on technology, fulfillment and other key areas ~~to provide~~providing greater clarity to customers, employees and shareholders.

~~Key elements of the Master Agreement Framework include:~~

~~Secured long-term collaboration on critical rotating equipment~~

~~Under the terms of the Master Agreement Framework,~~Also in 2019, we ~~have defined the parameters for a long-term collaboration and strategic relationship with GE on certain critical rotating equipment products.~~

~~We have~~ entered into an ~~aero-derivative joint venture (JV)~~Omnibus Agreement, a general framework agreement ~~with GE to form a JV relating to the parties’ respective aero-derivative gas turbine products~~that addresses certain outstanding matters under existing long-term commercial agreements between us and services. Effectiveness of the JV is subject to regulatory clearances and other customary closing conditions. In addition, the JV cannot become effective prior to the first business day of the month after the "Trigger Date" which is defined as the later of (i) July 3, 2019 and (ii) the date on which GE and its affiliates cease to own more than 50% of the voting power of BHGE’s outstanding common stock. These jet engine aero-derivative products are mainly used in our LNG, onshore-offshore production, pipeline and industrial segments within our Turbomachinery & Process Solutions segment and by GE in its power generation business. GE and we will contribute certain assets, inventory and service facilities into the JV and both companies will jointly control operations. In addition to the contributions to the JV, we agreed to pay $60 million to GE, in order to equalize each party's interests in the JV at 50%.GE. The JV will have a supply and technology development agreement with GE’s aviation business (GE Aviation), which will revise and extend pricing arrangements as compared to BHGE’s existing supply agreement, and which will become effective at the Trigger Date.

~~Additionally, we have entered into an industrial steam turbine (IST) sale agreement with GE, which,~~Omnibus Agreement contains provisions regarding, among other things, ~~sets forth~~(i) the ~~terms~~repayment of certain outstanding amounts mutually owed by the parties, (ii) certain employee and ~~conditions on which BHGE LLC will transfer~~assets transfers (including the allocation of costs and expenses associated therewith), and (iii) certain ~~of its assets, liabilities and employees that are~~matters related to ~~BHGE LLC’s existing business of developing, designing, engineering, marketing, supplying, installing and servicing certain industrial steam turbine product lines to GE. In addition to the IST~~3 international joint ventures.

~~BHGE LLC 2019 First Quarter FORM 10-Q | 22~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

business transfer, the agreement provides that we will make a cash payment of $13 million to an affiliate of GE at the closing of the transactions subject to certain working capital adjustments. Subject to the satisfaction of customary closing conditions, the transfer of the IST business is expected to close in the second quarter of 2019.

In parallel, we have also entered into an agreement for the long-term supply and related distribution arrangement with GE for heavy-duty gas turbine technology at the current pricing levels, which will become effective at the Trigger Date. Under this agreement BHGE LLC will be appointed as GE's exclusive distributor (with limited exceptions) within the oil and gas industry with respect to the heavy-duty gas turbine units for an initial term of 5 years and associated services (including parts and components) for an initial term of 20 years or the operating service life of the relevant gas turbine, whichever is more. The heavy-duty gas turbine technologies are important components of TPS’ offerings and the long-term agreements provide greater clarity on the commercial approach and customer fulfillment, and will enable us and GE to jointly innovate on leading technology.

~~Preserved access to GE Digital software & technology~~

As part of the Master Agreement Framework, BHGE LLC has agreed with GE Digital to maintain, subject to certain conditions, BHGE LLC's current status as the exclusive reseller of GE Digital offerings in the oil & gas space, and BHGE LLC will continue to source exclusively from GE Digital for certain GE Digital offerings for oil and gas applications. As part of this agreement, BHGE LLC and GE Digital have revised and extended certain pricing arrangements and have established service level obligations.

~~Other key agreements~~

• GE and we agreed to maintain current operations and pricing levels with regards to Control upgrade services we offer through our Digitals Solution segment division for the 4 years commencing on the Trigger Date.

• GE will transfer to BHGE certain UK pension liabilities related to the oil and gas businesses of BHGE and certain specified former oil and gas businesses of GE on what is intended to be a fully funded basis (using agreed upon actuarial assumptions). No liabilities associated with GE’s broad-based U.S. defined benefit pension plan will be transferred to us. The transfer of the UK pension liabilities is expected to be completed in 2019.

• The Tax Matters Agreement with GE that was negotiated at the time of the Transactions will be clarified but otherwise will remain substantially in place and both companies retain the ability to monetize certain tax benefits.

• Under the terms of the Master Agreement Framework, the annual intercompany services fee of $55 million that we agreed to pay GE as part of the Transactions is reduced by 50% to $27.5 million per year beginning on January 1, 2019. The Intercompany Services Agreement will terminate 90 days following the Trigger Date (except with respect to certain tools access).

In connection with the Master Agreement Framework, we have agreed to terminate certain aspects of the transfer restrictions previously applicable to GE under the Stockholders Agreement, dated as of July 3, 2017, by and between us and GE, as amended from time to time (the Stockholders Agreement). The transfer restrictions prohibited GE from transferring any shares of our common stock prior to July 3, 2019 (except to its affiliates) without the approval of the Conflicts Committee of our board of directors. Other provisions of the Stockholders Agreement, including continuing restrictions on certain private transfers of shares of our common stock by GE, and approval requirements for related party transactions, remain in effect.

In addition, the Stockholders Agreement was amended and restated to provide that, following the Trigger Date and until GE and its affiliates own less than 20% of the voting power of our outstanding common stock, GE shall be entitled to designate one person for nomination to our board of directors.

~~OTHER~~ RELATED PARTY TRANSACTIONS WITH GE

~~In connection with the Transactions, on~~On July 3, 2017, we executed a promissory note with GE (which was amended and restated on July 31, 2019 in connection with the entry into the Omnibus Agreement referenced above) that represents

~~BHGE LLC 2019 First Quarter FORM 10-Q | 23~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

certain cash that we are holding on GE's behalf due to the restricted nature of the cash. The restriction arises as the majority of the cash cannot be released, transferred or otherwise converted into a non-restricted market currency due to the lack of market liquidity, capital controls or similar monetary or exchange limitations by a ~~Government~~government entity of the jurisdiction in which such cash is situated. There is no maturity date on the promissory note, but we remain obligated to repay GE, therefore, this obligation is reflected as short-term borrowings. As of March 31, ~~2019,~~2020, of the ~~$861~~$156 million due to GE, ~~$717~~$106 million was held in the form of cash and ~~$144~~$50 million was held in the form of investment securities. As of December 31, ~~2018,~~2019, of the ~~$896~~$273 million due to GE, ~~$747~~$162 million was held in the form of cash and ~~$149~~$111 million was held in the form of investment securities. A corresponding liability is reported in short-term borrowings in the condensed consolidated statements of financial position.

We sold products and services to GE and its affiliates for $55 million and $81 million during the three months ended March 31, 2020 and 2019, respectively. Purchases from GE and its affiliates were $263 million and $451 million during the three months ended March 31, 2020 and 2019, respectively. Additionally, the Company has ~~$510~~$76 million and ~~$538~~$75 million of current receivable at March 31, 2020 and December 31, 2019, respectively, from Baker Hughes.

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 20

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

The Company has $440 million and $536 million of accounts payable at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, for goods and services provided by GE in the ordinary course of business. The Company has ~~$635~~$462 million and ~~$653~~$495 million of current receivables at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, for goods and services provided to GE in the ordinary course of business. ~~Additionally, the company has $83 million and $93 million of current receivable at March 31, 2019 and December 31, 2018, respectively from BHGE.~~

~~We also provide guarantees to GE Capital on behalf of some customers who have entered into financing arrangements with GE Capital.~~

~~TRADE PAYABLES ACCELERATED PAYMENT PROGRAM~~

Our North American operations participate in accounts payable programs with GE Capital. Invoices are settled with vendors per our payment terms to obtain cash discounts. GE Capital provides funding for invoices eligible for a cash discount. Our liability associated with the funded participation in the accounts payable programs, which is presented as accounts payable within the condensed consolidated statements of financial position, was $456 million and $471 million as of March 31, 2019 and December 31, 2018, respectively. On January 16, 2019, GE announced the sale of GE Capital’s accounts payable program platform to a third-party and their intent to start transitioning their existing program to an accounts payable program with that party. As a GE affiliate, we are covered under the agreement.

NOTE 16. COMMITMENTS AND CONTINGENCIES

LITIGATION

We are subject to a number of lawsuits and claims arising out of the conduct of our business. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. We record a liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, including accruals for self-insured losses which are calculated based on historical claim data, specific loss development factors and other information.

A range of total possible losses for all litigation matters cannot be reasonably estimated. Based on a consideration of all relevant facts and circumstances, we do not expect the ultimate outcome of currently pending lawsuits or claims against us, other than those discussed below, will have a material adverse effect on our financial position, results of operations or cash flows, however, there can be no assurance as to the ultimate outcome of these matters.

With respect to the litigation matters below, if there was an adverse outcome individually or collectively, there could be a material impact on our business, financial condition and results of operations expected for the year. These litigation matters are subject to inherent uncertainties and management's view of these matters may change in the future. Therefore, there can be no assurance as to the ultimate outcome of these matters.

During 2014, we received notification from a customer related to a possible equipment failure in a natural gas storage system in Northern Germany, which includes certain of our products. The customer initiated ~~arbitral~~arbitration proceedings against us on June 19, 2015, under the rules of the German Institute of Arbitration e.V. (DIS). On August 3, 2016, the customer amended its claims and alleged damages of €202 million plus interest at an annual

~~BHGE LLC 2019 First Quarter FORM 10-Q | 24~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

rate of prime + 5%. Hearings before the arbitration panel were held January 16, 2017 through January 23, 2017, and March 20, 2017 through March 21, 2017. In addition, on September 21, 2015, TRIUVA Kapitalverwaltungsgesellschaft mbH filed a lawsuit in the United States District Court for the Southern District of Texas, Houston Division against the Company and Baker Hughes Oilfield Operations, Inc. alleging that the plaintiff is the owner of gas storage caverns in Etzel, Germany in which the Company provided certain equipment in connection with the development of the gas storage caverns. The plaintiff further alleges that the Company supplied equipment that was either defectively designed or failed to warn of risks that the equipment posed, and that these alleged defects caused damage to the plaintiff's property. The plaintiff seeks recovery of alleged compensatory and punitive damages of an unspecified amount, in addition to reasonable attorneys' fees, court costs and pre-judgment and post-judgment interest. The allegations in this lawsuit are related to the claims made in the June 19, 2015 German arbitration referenced above. On June 7, 2018, the DIS arbitration panel issued a confidential Arbitration Ruling which addressed all claims asserted by the customer. The estimated financial impact of the Arbitration Ruling has been reflected in the Company's financial statements and did not have a material impact. Further, on March 11, 2019, the customer initiated a second arbitral proceeding against us, under the rules of the German Institute of Arbitration e.V. (DIS). The customer alleged damages of €142 million plus interest at an annual rate of prime + 5% since June 20, 2015. The allegations in this second arbitration proceeding are related to the claims made in the June 19, 2015 German arbitration and Houston Federal Court proceedings referenced above. The Company is ~~vigorously~~ contesting the claims made by TRIUVA in the Houston Federal Court and the claims made by the customer in the ~~2019~~second arbitration proceeding. At this time, we are not able to predict the outcome of the claims asserted in the Houston Federal Court or the ~~2019~~second arbitration proceeding.

On July 31, 2015, Rapid Completions LLC filed a lawsuit in federal court in the Eastern District of Texas against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc., and others claiming infringement of U.S. Patent Nos. 6,907,936; 7,134,505; 7,543,634; 7,861,774; and 8,657,009. On August 6, 2015, Rapid Completions amended its complaint to allege infringement of U.S. Patent No. 9,074,451. On ~~September 17, 2015, Rapid Completions and Packers Plus Energy Services Inc. sued Baker Hughes Canada Company in the Canada Federal Court on the related Canadian patent 2,412,072. On~~ April 1, 2016, Rapid Completions removed U.S. Patent No. 6,907,936 from its claims in the lawsuit. On April 5, 2016, Rapid Completions filed a second lawsuit

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 21

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

in federal court in the Eastern District of Texas against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc. and others claiming infringement of U.S. Patent No. 9,303,501. These patents relate primarily to certain specific downhole completions equipment. The plaintiff has requested a permanent injunction against further alleged infringement, damages in an unspecified amount, supplemental and enhanced damages, and additional relief such as attorney's fees and costs. During August and September 2016, the United States Patent and Trademark Office (USPTO) agreed to institute an inter-partes review of U.S. Patent Nos 7,861,774; 7,134,505; 7,543,634; 6,907,936; 8,657,009; and 9,074,451. On August 29, 2017, the USPTO issued its final written decisions in the inter-partes reviews of U.S. Patent Nos. 8,657,009 and 9,074,451 finding that all claims of those patents were unpatentable. On August 31, 2017, the USPTO issued its final written decision in the inter-partes review of U.S. Patent 6,907,936 - the patent dropped from the lawsuit by the plaintiffs - finding that all claims of this patent were patentable. On October 27, 2017, Rapid Completions filed its notices of appeal of the USPTO’s final written decision in the inter-partes review of U.S. Patent Nos. 8,657,009 and 9,074,451. On September 26, 2018, the USPTO issued its final written decision in the inter-partes review of U.S. Patent No. 7,134,505 finding all of the challenged claims unpatentable. On September 27, 2018, the USPTO issued its final written decision in the inter-partes review of U.S. Patent No. 7,543,634 finding all of the challenged claims unpatentable. Trial on the validity of asserted claims from Canada patent 2,412,072, was completed March 9, 2017. On December 7, 2017, the Canadian Court issued its judgment finding the patent claims asserted from Canada patent 2,412,072 against Baker Hughes Canada Company were invalid. On January 5, 2018, Rapid Completions filed its Notice of Appeal of the Canadian Court’s judgment of invalidity. On November 19, 2018, the U.S. Court of Appeals for the Federal Circuit affirmed the USPTO’s unpatentability findings with respect to U.S. Patent Nos. 8,657,009 and 9,074,451. On November 26, 2018, Rapid Completions filed notices of appeal of the USPTO’s final written decisions in the inter partes reviews of U.S. Patent No. 7,134,505, and 7,543,634. On ~~April 24,~~May 2, 2019, the ~~Canadian~~USPTO issued a final written decision in an IPR on U.S. Patent Number 9,303,501 finding all of its claims unpatentable, and Rapid Completions appealed that decision to the Federal Circuit on July 5, 2019. On November 13, 2019, the U.S. Court of Appeals ~~ruled against~~for the Federal Circuit affirmed the USPTO’s unpatentability findings with respect to U.S. Patent No. 7,134,505, and 7,543,634. On November 26, 2019, the USPTO issued a final written decision in the inter-partes review of U.S. Patent No. 7,861,774 finding all challenged claims unpatentable, and Rapid Completions ~~and dismissed Rapid Completion’s~~did not timely appeal ~~in Canada. The remaining appeals~~that decision. On January 21, 2020, the Federal Circuit affirmed the USPTO’s unpatentability finding as to all asserted claims of the ~~USPTO decisions finding Rapid Completion’s~~ U.S. Patent ~~claims unpatentable are still pending and, at this time, we are not able to predict the outcome of these claims.~~No. 9,303,501.

In January 2013, INEOS and Naphtachimie initiated expertise proceedings in Aix-en-Provence, France arising out of a fire at a chemical plant owned by INEOS in Lavera, France, which resulted in a 15-day plant shutdown and

~~BHGE LLC 2019 First Quarter FORM 10-Q | 25~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

destruction of a steam turbine, which was part of a compressor train owned by Naphtachimie. The most recent quantification of the alleged damages is €250 million. ~~Two~~2 of the Company's subsidiaries (and 17 other companies) were notified to participate in the proceedings. The proceedings are ongoing, and at this time, there is no indication that the Company's subsidiaries were involved in the incident. Although the outcome of the claims remains uncertain, ~~BHGE's~~our insurer has accepted coverage and is defending the Company in the expertise proceeding.

In late November 2017, staff of the Boston office of the SEC notified GE that they are conducting an investigation of GE’s revenue recognition practices and internal controls over financial reporting related to long-term service agreements. The scope of the SEC’s request may include some BHGE contracts, expected to be mainly in our TPS business. We have provided documents to GE and are cooperating with them in their response to the SEC. At this time, we are not able to predict the outcome of this review.

On July 31, 2018, International Engineering & Construction S.A. (IEC) initiated arbitration proceedings in New York administered by the International Center for Dispute Resolution (ICDR) against the Company and its subsidiaries arising out of a series of sales and service contracts entered between IEC and the Company’s subsidiaries for the sale and installation of LNG plants and related power generation equipment in Nigeria (Contracts). Prior to the filing of the IEC Arbitration, the Company’s subsidiaries made demands for payment due under the Contracts. On August 15, 2018, the Company’s subsidiaries initiated a separate demand for ICDR arbitration against IEC for claims of additional costs and amounts due under the Contracts. On October 10, 2018, IEC filed a Petition to Compel Arbitration in the United States District Court for the Southern District of New York against the Company seeking to compel non-signatory ~~BHGE~~Baker Hughes entities to participate in the arbitration filed by IEC. The complaint is captioned International Engineering & Construction S.A. et al. v. Baker Hughes, a GE ~~Company~~company LLC, et al. No. 18-cv-09241 (S.D.N.Y 2018).; this action was dismissed by the Court on August 13, 2019. In the arbitration, IEC alleges breach of contract and other claims against the Company and its subsidiaries and seeks recovery of alleged compensatory damages, in addition to reasonable attorneys' fees, expenses and arbitration costs. On March 15, 2019, IEC amended its request for arbitration to alleged damages of $591 million of lost profits plus unspecified additional costs based on alleged non-performance of the contracts in dispute. The arbitration hearing was held from December 9, 2019 to December 20, 2019. On March 3, 2020, IEC amended their damages claim to $700 million of alleged loss cash flow or, in the alternative, $244.9 million of lost profits and various costs based on alleged non-performance of the contracts in dispute, and in addition $4.8 million of liquidated damages, $58.6 million in take-or-pay costs of feed gas, and unspecified additional costs of rectification and take-or-pay future obligations, plus unspecified interest and attorneys fees. The Company ~~has vigorously~~and its subsidiaries have contested IEC’s claims and isare pursuing ~~BHGE’s~~ claims for compensation under the contracts. At this time, we are not able to predict the outcome of these claims.

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 22

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

On March 15, 2019 and March 18, 2019, the City of Riviera Beach Pension Fund and Richard Schippnick, respectively, filed in the Delaware Court of Chancery shareholder derivative lawsuits for and on ~~BHGE's~~Baker Hughes’s behalf against GE, the ~~current~~then-current members of the Board of Directors of ~~BHGE~~Baker Hughes and ~~BHGE~~Baker Hughes as a nominal defendant, related to the decision to (i) terminate the contractual prohibition barring GE from selling any of ~~BHGE's~~Baker Hughes’ shares before July 3, 2019; (ii) repurchase $1.5 billion in ~~BHGE's~~Baker Hughes stock from GE; (iii) permit GE to sell approximately $2.5 billion in ~~BHGE's~~Baker Hughes stock through a secondary offering; and (iv) enter into a series of other agreements and amendments that will govern the ongoing relationship between ~~BHGE~~Baker Hughes and GE (collectively, the “2018 Transactions”). The complaints in both lawsuits allege, among other things, that GE, as ~~BHGE’s~~Baker Hughes' controlling stockholder, and the members of ~~BHGE’s~~Baker Hughes’ Board of Directors breached their fiduciary duties by entering into the 2018 Transactions. The relief sought in the complaints includes a request for a declaration that the defendants breached their fiduciary duties, that GE was unjustly enriched, disgorgement of profits, an award of damages sustained by ~~BHGE,~~Baker Hughes, pre- and post-judgment interest, and attorneys’ fees and costs. On March 21, 2019, the Chancery Court entered an order consolidating the Schippnick and City of Riviera Beach complaints under consolidated C.A. No. 2019-0201-AGB, styled in re Baker Hughes, a GE company derivative litigation. On May 10, 2019, Plaintiffs voluntarily dismissed their claims against the members of Baker Hughes' Conflicts Committee, and on May 15, 2019, Plaintiffs voluntarily dismissed their claims against former Baker Hughes director Martin Craighead. On June 7, 2019, the defendants and nominal defendant filed a motion to dismiss the lawsuit on the ground that the derivative plaintiffs failed to make a demand on Baker Hughes' Board of Directors to pursue the claims itself, and GE and Baker Hughes' Board of Directors filed a motion to dismiss the lawsuit on the ground that the complaint failed to state a claim on which relief can be granted. The Chancery Court denied the motions on October 8, 2019, except granted GE’s motion to dismiss the unjust enrichment claim against it. On October 31, 2019, Baker Hughes' Board of Directors designated a Special Litigation Committee and empowered it with full authority to investigate and evaluate the allegations and issues raised in the derivative litigation. The Special Litigation Committee filed a motion to stay the derivative litigation during its investigation. On December 3, 2019, the Chancery Court granted the motion and stayed the derivative litigation until June 1, 2020. The Special Litigation Committee’s investigation and evaluation remains ongoing. At this time, we are not able to predict the outcome of the Special Litigation Committee investigation or these claims.

In March 2019, ~~BHGE~~Baker Hughes received a document request from the United States Department of Justice (the “DOJ”) related to certain of the Company’s operations in Iraq and its dealings with Unaoil Limited and its affiliates. ~~BHGE and~~In December 2019, Baker Hughes received a similar document request from the ~~Company are~~Securities Exchange Commission (the "SEC"). Baker Hughes is cooperating with the DOJ and the SEC in connection with ~~this request~~their requests and any related matters. In addition, ~~BHGE~~Baker Hughes has agreed to toll any statute of limitations in connection with the matters subject to the DOJ’s document request.

On May 7, 2019, the Alaska District Attorney filed a Criminal Information against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc., Baker Petrolite Corporation and a Baker Hughes employee alleging that individuals working at a Baker Petrolite Corporation chemical transfer facility in Kenai, Alaska were exposed to hazardous air emissions. The Criminal Information charges 6 counts of Assault in the Third Degree, 3 counts of Assault in the Fourth Degree and Negligent Air Emissions. On July 22, 2019, the 6 counts of Assault in the Third Degree were dismissed, with the Alaska Attorney General’s office indicating their intent to present those charges to the grand jury to obtain an indictment. On or around September 11, 2019, the grand jury issued an indictment on 25 counts, including 10 counts of Assault in the First Degree, 10 counts of Assault in the Second Degree, and 5 counts of Assault in the Third Degree. On or around December 3, 2019, the State agreed to dismiss the indictment against Baker Hughes Oilfield Operations, Inc. On April 9, 2020 the court granted the Company’s unopposed motion to dismiss the indictment for failure to present exculpatory evidence to the grand jury, thereby dismissing the indictments against Baker Hughes Incorporated, Baker Petrolite Corporation, and the Baker Hughes employee without prejudice.

On August 13, 2019, Tri-State Joint Fund filed in the Delaware Court of Chancery, a shareholder class action lawsuit for and on the behalf of itself and all similarly situated public stockholders of Baker Hughes Incorporated (“BHI”) against the General Electric Company, the former members of the Board of Directors of BHI, and certain former BHI Officers alleging breaches of fiduciary duty, aiding and abetting, and other claims in connection with the Transactions. On October 28, 2019, City of Providence filed in the Delaware Court of Chancery a shareholder class action lawsuit for and on behalf of itself and all similarly situated public shareholders of BHI against GE, the former members of the Board of Directors of BHI, and certain former BHI Officers alleging substantially the same claims in

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 23

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

connection with the Transactions. The relief sought in these complaints include a request ~~until~~for a declaration that Defendants breached their fiduciary duties, an award of damages, pre- and post-judgment interest, and attorneys’ fees and costs. The lawsuits have been consolidated, and plaintiffs filed a consolidated class action complaint on December ~~2019.~~17, 2019 against certain former BHI officers alleging breaches of fiduciary duty and against GE for aiding and abetting those breaches. The December 2019 complaint omitted the former members of the Board of Directors of BHI, except for Mr. Craighead who also served as President and CEO of BHI. Mr. Craighead and Ms. Ross, who served as Senior Vice President and Chief Financial Officer of BHI, remain named in the December 2019 complaint along with GE. The relief sought in the consolidated complaint includes a declaration that the former BHI officers breached their fiduciary duties and that GE aided and abetted those breaches, an award of damages, pre- and post-judgment interest, and attorneys’ fees and costs. At this time, we are not able to predict the outcome of these claims.

On December 11, 2019, BMC Software, Inc. (“BMC”) filed a lawsuit in federal court in the Southern District of Texas against Baker Hughes, a GE company, LLC alleging trademark infringement, unfair competition, and unjust enrichment, arising out of the Company’s use of its new logo and affiliated branding. On January 1, 2020, BMC amended its complaint to add Baker Hughes Company. The relief sought in the complaint includes a request for injunctive relief, an award of damages (including punitive damages), pre- and post-judgment interest, and attorneys’ fees and costs. At this time, we are not able to predict the outcome of these claims.

We insure against risks arising from our business to the extent deemed prudent by our management and to the extent insurance is available, but no assurance can be given that the nature and amount of that insurance will be sufficient to fully indemnify us against liabilities arising out of pending or future legal proceedings or other claims. Most of our insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure

~~BHGE LLC 2019 First Quarter FORM 10-Q | 26~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability, general liability and workers compensation.

PRODUCT WARRANTIES

We provide for estimated product warranty expenses when we sell the related products. Because warranty estimates are forecasts that are based on the best available information, primarily historical claims experience, claims costs may differ from amounts provided. An analysis of changes in the liability for product warranties are as follows:

2019 2018
Balance at January 1 $ 236
$ 164
Provisions 3
10
Expenditures (5 ) (7 )
Other 2
2
Balance at March 31 $ 236
$ 169


	2020		2019
Balance at January 1	$	220	$	236
Provisions	2		3
Expenditures	(3)		(5)
Other	(2)		2
Balance at March 31	$	217	$	236

OTHER

In the normal course of business with customers, vendors and others, we have entered into off-balance sheet arrangements, such as surety bonds for performance, letters of credit and other bank issued guarantees. We also provide guarantees ~~which~~to GE Capital on behalf of some customers who have entered into financing arrangements with GE Capital. These off-balance sheet arrangements totaled approximately ~~$3.8~~$4.1 billion at March 31, ~~2019.~~2020. It is not practicable to estimate the fair value of these financial instruments. None of the off-balance sheet arrangements either has, or is likely to have, a material effect on our financial position, results of operations or cash flows.

We sometimes enter into consortium or similar arrangements for certain projects primarily in our Oilfield Equipment segment. Under such arrangements, each party is responsible for performing a certain scope of work within the total scope of the contracted work, and the obligations expire when all contractual obligations are completed. The failure or inability, financially or otherwise, of any of the parties to perform their obligations could

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 24

Baker Hughes Holdings LLC

Notes to Unaudited Condensed Consolidated Financial Statements

impose additional cost and obligations on us. These factors could result in unanticipated costs to complete the project, liquidated damages or contract disputes.

NOTE 17. RESTRUCTURING, IMPAIRMENT AND OTHER

WeDuring the three months ended March 31, 2020, in response to the impact on our business from the COVID-19 pandemic and the significant decline in oil and gas prices, we approved a plan of $1.8 billion (the 2020 Plan) primarily associated with rationalizing certain product lines and restructuring our business, which is designed to, among other things, right-size our operations for anticipated activity levels and market conditions. As a result, during the three months ended March 31, 2020, we recorded restructuring, impairment and other charges of ~~$62~~$1,325 million and ~~$162 million during~~inventory impairments of $160 million. See "Note 4. Inventories" for further discussion. Almost all of the ~~three months ended March 31, 2019 and 2018, respectively. Details~~remaining charges associated with the 2020 Plan are expected to be recorded in the second or third quarter of ~~these~~2020. These initiatives could generate additional charges ~~are discussed below.~~in future periods as the 2020 Plan comes to completion.

RESTRUCTURING AND IMPAIRMENT ~~CHARGES~~

InThe following table presents restructuring and impairment charges by the current and prior periods, we approved various restructuring plans globally, mainly to consolidate manufacturing and service facilities, rationalize product lines and rooftops, and reduce headcount across various functions. As a result, we recognized a charge of $62 million and $125 million for the three months ended March 31, 2019 and 2018, respectively. These restructuring initiatives will generate charges post March 31, 2019, and the related estimated remainingimpacted segment, however, these charges are ~~approximately $74 million.~~

~~The amount of costs~~ not included in the reported segment ~~results is as follows:~~

results:


	Three Months Ended March 31,					Three Months Ended March 31,
	2019		2018			2020		2019
Oilfield Services	$	17	$	59	Oilfield Services	$	296	$	17
Oilfield Equipment	18		12		Oilfield Equipment	98		18
Turbomachinery & Process Solutions	19		28		Turbomachinery & Process Solutions	8		19
Digital Solutions	3		9		Digital Solutions	24		3
Corporate	5		17		Corporate	9		5
Total	$	62	$	125	Total	$	435	$	62

~~These costs~~Restructuring and impairment charges were primarily related to employee termination expenses from reducing our headcount in certain geographical locations, and product line ~~terminations,~~rationalization, including plant closures and related expenses such as property, plant ~~and~~& equipment impairments and contract ~~terminations and costs~~termination fees. Details of ~~assets' and employees' relocation, employee-related termination benefits, and other incremental costs that were a direct result of the restructuring plans.~~these charges are as follows:

~~BHGE LLC 2019 First Quarter FORM 10-Q | 27~~

~~Baker Hughes, a GE company, LLC~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

Three Months Ended March 31,

2019 2018
Property, plant & equipment, net $ 9
$ 19
Employee-related termination expenses 44
83
Asset relocation costs 2
5
Environmental remediation costs —
3
Contract termination fees 7
7
Other incremental costs —
8
Total $ 62
$ 125


	Three Months Ended March 31,
	2020		2019
Impairments of property, plant & equipment	$	141	$	9
Employee-related termination expenses	272		44

Contract termination fees	21		7
Other incremental costs	1		2
Total	$	435	$	62

OTHER ~~CHARGES~~

~~Other charges included in "Restructuring, impairment and other" of the condensed consolidated statements of income (loss) were $37 million for~~During the three months ended March 31, ~~2018 relating~~2020, we recorded other charges totaling $890 million. These charges are comprised of intangible asset impairments of $601 million driven by our decision to ~~accelerated amortization for~~exit certain ~~trade names, and technology~~businesses primarily in our ~~Oilfield Services~~OFS segment, other long-lived asset impairments of $216 million ($124 million of intangible assets, $77 million of property, plant and equipment and $15 million of other assets) in our OFE segment and other charges of $73 million driven by certain litigation matters and impairment of an equity method investment primarily in corporate and the OFE segment.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 2825

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the condensed consolidated financial statements and the related notes included in Item 1 thereto.

EXECUTIVE SUMMARY

~~On July 3, 2017, we closed~~We are an energy technology company with a broad and diversified portfolio of technologies and services that span the ~~Transactions to combine GE O&G~~energy and ~~Baker Hughes, creating a fullstream oilfield technology provider that has a unique mix of integrated oilfield products, services~~industrial value chain. We conduct business in more than 120 countries and digital solutions. The Transactions were executed using a partnership structure, pursuant to which GE O&G and Baker Hughes each contributed their operating assets to the Company. As of March 31, 2019, GE holds an approximate 50.3% interest in us and BHGE holds an approximate 49.7% interest. GE's interest is held through a voting interest of Class B Common Stock in BHGE and its economic interest through a corresponding number of our common units.employ approximately 67,000 employees. We operate through our four business segments: Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & ~~Processing~~Process Solutions (TPS), and Digital Solutions (DS).

We sell products and services primarily in the global oil and gas markets, within the upstream, midstream and downstream segments. Throughout the first quarter of 2020, the industry experienced multiple factors which drove expectations for global oil and gas related spending to be lower through 2020. First, the COVID-19 pandemic lowered global demand for hydrocarbons, as social distancing and travel restrictions were implemented across the world. Second, the lifting of Organization of the Petroleum Exporting Countries (OPEC)+ supply curtailments, and the associated increase in production, drove the global supply of hydrocarbons higher through the first quarter of 2020. As a result of both dynamics, prices for hydrocarbons declined 67% from peak prices within the quarter. In addition, while global gross domestic product (GDP) growth was impacted by COVID-19 during the first quarter of 2020, we expect GDP to decline globally in the second quarter of 2020 and for the total year 2020 as a result of the COVID-19 pandemic.

As a result, we expect oil and gas related markets will continue to experience significant volatility in 2020. Our goal through this downturn is to remain disciplined in allocating capital, focus on liquidity and cash preservation, and to preserve our investment grade rating while also maintaining our current dividend payout.

We are taking the necessary actions to right-size the business for expected activity levels. We approved a plan for restructuring and other actions totaling $1.8 billion, $1.5 billion of which was recorded in the first quarter of 2020. These charges are primarily related to the expected costs for reductions in work force, product line exits in certain geographies, and the write down of inventory and intangible assets. These actions are taking place across the business and our corporate functions as we align our workforce with expected activity levels. We expect cash expenditures from the restructuring plan to total approximately $500 million, and for the cash payback to be less than one year.

In addition, during the first quarter of 2020, our market capitalization declined significantly driven by the current macroeconomic and geopolitical conditions including the decrease in demand caused by the COVID-19 pandemic and collapse of oil prices. Based on these events, we concluded that a triggering event occurred and we performed an interim quantitative impairment test as of March 31, ~~2019, BHGE LLC employs approximately 67,000 employees and operates in more than 120 countries.~~2020. Based upon the results of the impairment test, we recognized a goodwill impairment charge of $14,717 million.

In the first quarter of ~~2019,~~2020, we generated revenue of ~~$5,615~~$5,425 million, compared to ~~$5,399~~$5,615 million for the first quarter of ~~2018.~~2019. The ~~increase~~decline in revenue was primarily driven by ~~increased activity~~COVID-19 related volume declines in ~~OFS~~DS, TPS, and OFE, partially offset by ~~declines~~increased activity in ~~TPS and DS. Income~~OFS. Loss before income taxes ~~and equity in loss of affiliate~~ was ~~$138~~$16,037 million for the first quarter of ~~2019,~~2020 which included a goodwill impairment of $14,717 million, restructuring, impairment and ~~included restructuring and impairment~~other charges of ~~$62~~$1,325 million and ~~separation and merger related costs~~inventory impairments of ~~$34~~$160 million. ~~The restructuring and impairment charges were recorded as~~We also estimate that the COVID-19 pandemic had a ~~result~~negative impact to our operating income of ~~our continued actions to adjust our operations and cost structure. For~~approximately $100 million. In the first quarter of ~~2018, loss~~2019, income before income taxes ~~and equity in loss of affiliate~~ was ~~$85~~$138 million, which also included restructuring and impairment charges of ~~$162 million, and separation and merger related costs of $46~~$62 million.

In June 2018, GE announced their intention to pursue an orderly separation from BHGE over time. To that end, during the fourth quarter of 2018, certain equity transactions were completed and GE’s ownership of BHGE was reduced from approximately 62.5% to approximately 50.4%. At the same time, we entered into a Master Agreement Framework which includes a series of related ancillary agreements and binding term sheets (which were later negotiated into definitive agreements) designed to further solidify the commercial and technological collaboration between us and GE and to position us for the future. The Master Agreement Framework focuses on areas where we work most closely with GE on developing leading technology and executing for customers.

Baker Hughes Holdings LLC 2020 First we defined the parameters for long-term collaboration and partnership with GE on critical rotating equipment technology. Second, for our digital software and technology business we will maintain the status quo as the exclusive supplier of GE Digital oil and-gas applications. Finally, we reached agreements on a number of other areas including our controls business, pension, taxes, and intercompany services. All agreements within the Master Agreement Framework were finalized during the first quarter of 2019. For further details on the Master Agreement Framework see "Note 15. Related Party Transactions" of the Notes to Unaudited Condensed Consolidated Financial Statements in this Quarterly Report.Quarter FORM 10-Q | 26

In aggregate, we anticipate that the net financial impact of the agreements contemplated by the Master Agreement Framework will have a slightly negative impact on our operating margin rates of approximately 20 to 40 basis points. In addition, we expect to incur one-time charges related to separation from GE of approximately $0.2 billion to $0.3 billion over the next three years. We expect these charges to be primarily related to the build-out of information technology infrastructure as well as customary transaction fees.

OUTLOOK

Our business is exposed to a number of ~~different~~ macro factors, which influence our outlook and expectations ~~and outlook. All of our outlook expectations are purely based on~~given the ~~market as we see it today, and are subject to changing~~volatile conditions in the industry. We expect the current weakness in oil and gas prices to persist for the rest of 2020 and expect economic conditions to begin to improve in the third quarter. In addition, we expect that some form of travel restrictions, strict social distancing, and health and safety protocols remain in place until the middle of the year and gradually begin to ease in the second half of the year.

•North America onshore activity: inas a result of the ~~first quarter of 2019, we experienced a~~significant decline in oil and gas prices, we expect U.S. drilling & completion spending to decline more than 50% versus 2019, as operators adjust budgets for the rig count, as compared to the first quarter of 2018. We expect that in the short-term, North American onshore activity will remain subdued as commodity prices fluctuate and supply chain constraints abate. Over the long-term, we remain optimistic about the outlook.current oil price environment.

~~BHGE LLC 2019 First Quarter FORM 10-Q | 29~~

•International onshore activity: we ~~have seen a moderate increase in rig count activity~~expect spending outside of North America to decline over 10% versus 2019. We expect that the Middle East will remain most resilient in the first quarter of 2019 and expect this growth to continue for the remainder of the year, at a moderate rate. We have seen signs of improvement with the increase in commodity prices during the quarter, but due to continued volatility, we remain cautious as to growth expectations.current environment.

•Offshore projects: following a strong 2019, we ~~have begun to see increasing customer activity on~~expect significantly fewer offshore projects ~~and more~~to reach positive final investment decisions ~~being made. Subsea tree awards increased~~ in ~~2018~~2020, due to the economic uncertainty and lower oil and gas prices.

•Liquefied natural gas (LNG) projects: we remain optimistic on the LNG market long term, but expect ~~subsea awards to be roughly flat in 2019, though still at levels well below prior 2012 & 2013 peaks. We expect customers to continue to evaluate the timing of~~fewer positive final investment decisions ~~and~~on LNG projects in ~~light of increased commodity price volatility, there may be some project delays.~~

~~Liquefied Natural Gas (LNG) projects: while currently oversupplied, we believe a significant number of final investment decisions are needed to fill the projected supply-demand imbalance~~2020 than in ~~the early to middle part of the next decade. We continue to view the long-term economics of the LNG industry as positive given our outlook for supply and demand.~~

Refinery, petrochemical and industrial projects: in refining, we believe large, complex refineries should gain advantage in a more competitive, oversupplied landscape in 2019 as the industry globalizes and refiners position to meet local demand and secure export potential. In petrochemicals, we continue to see healthy demand and cost-advantaged supply driving projects forward in 2019. The industrial market continues to grow as outdated infrastructure is replaced, policy changes come into effect and power is decentralized. We continue to see growing demand across these markets in 2019.

We have other segments in our portfolio that are more correlated with ~~different~~various industrial metrics, including GDP, such as our Digital Solutions ~~business, which~~segment. As a result of the economic uncertainty caused by COVID-19, we expect global GDP to ~~grow at or above global Gross Domestic Product (GDP).~~contract in 2020. Overall, we believe our portfolio is ~~uniquely~~well positioned to compete across the energy value chain and deliver ~~unique~~comprehensive solutions for our customers. We remain optimistic about the long-term economics of the industry, but we are continuing to operate with flexibility given our expectations for volatility and changing ~~assumptions~~activity levels in the near term.

~~Solar and wind net additions continue to exceed coal and gas. Governments~~While governments may change or ~~may not continue~~discontinue incentives for renewable energy ~~additions. In~~additions, in the long term, ~~renewables'~~renewable energy cost ~~decline~~declines may accelerate to compete with ~~new-built~~new-build fossil ~~capacity, however,~~fuel capacity. However, we do not anticipate any significant impacts to our business in the foreseeable future.

~~Despite the near-term volatility, the long-term outlook for our industry remains strong. We~~Over time, we believe the world’s demand for energy will continue to rise, and the supply of energy will continue to increase in complexity, requiring greater service intensity and more advanced technology from oilfield service companies. As such, we remain focused on delivering innovative, cost-efficient solutions that deliver step changes in operating and economic performance for our customers.

BUSINESS ENVIRONMENT

The following discussion and analysis summarizes the significant factors affecting our results of operations, financial condition and liquidity position as of and for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, and should be read in conjunction with the condensed consolidated financial statements and related notes of the Company.

We operate in more than 120 countries helping customers find, evaluate, drill, produce, transport and process hydrocarbon resources. Our revenue is predominately generated from the sale of products and services to major, national, and independent oil and natural gas companies worldwide, and is dependent on spending by our customers for oil and natural gas exploration, field development and production. This spending is driven by a number of factors, including our customers' forecasts of future energy demand and supply, their access to resources to develop and produce oil and natural gas, their ability to fund their capital programs, the impact of new government regulations and most importantly, their expectations for oil and natural gas prices as a key driver of their cash flows.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 3027

Oil and Natural Gas Prices

Oil and natural gas prices are summarized in the table below as averages of the daily closing prices during each of the periods indicated.


	Three Months Ended March 31,
	2020		2019
Brent oil price ($/Bbl) ⁽¹⁾	$	50.27	$	63.10
WTI oil price ($/Bbl) ⁽²⁾	45.34		54.82
Natural gas price ($/mmBtu) ⁽³⁾	1.90		2.92

Three Months Ended March 31,

2019 2018
Brent oil price ($/Bbl) ⁽¹⁾
$ 63.10
$ 66.86
WTI oil price ($/Bbl) ⁽²⁾
54.82
62.91
Natural gas price ($/mmBtu) ⁽³⁾
2.92
3.08
⁽¹⁾Energy Information Administration (EIA) Europe Brent Spot Price per Barrel


⁽¹⁾ ⁽²⁾EIA Cushing, OK WTI (West Texas Intermediate) spot price ⁽³⁾EIA Henry Hub Natural Gas Spot Price per million British Thermal Unit	~~Energy Information Administration (EIA) Europe Brent Spot Price per Barrel~~


⁽²⁾	~~EIA Cushing, OK WTI (West Texas Intermediate) spot price~~


⁽³⁾	~~EIA Henry Hub Natural Gas Spot Price per million British Thermal Unit~~

Outside North America, customer spending is most heavily influenced by Brent oil prices, which ~~increased~~decreased during the quarter, ranging from a low of ~~$53.23/~~$14.85/Bbl in ~~January 2019~~March 2020 to a high of ~~$68.35/~~$70.25/Bbl in ~~March 2019.~~January 2020. For the three months ended March 31, ~~2019,~~2020, Brent oil prices averaged ~~$63.10/~~$50.27/Bbl, which represented a decrease of ~~$3.76/~~$12.83/Bbl from the same period last year.

In North America, customer spending is highly driven by WTI oil prices, which ~~increased~~decreased during the quarter. Overall, WTI oil prices ranged from a low of ~~$46.31/~~$14.10/Bbl in ~~January 2019~~March 2020 to a high of ~~$60.19/~~$63.27/Bbl in ~~March 2019.~~January 2020. For the three months ended March 31, ~~2019,~~2020, WTI oil prices averaged ~~$54.82/~~$45.34/Bbl, which represented a decrease of ~~$8.09/~~$9.48/Bbl from the same period last year.

In North America, natural gas prices, as measured by the Henry Hub Natural Gas Spot Price, averaged ~~$2.92/~~$1.90/mmBtu in the first quarter of ~~2019,~~2020, representing a 5%35% decrease over the prior year. Throughout the quarter, Henry Hub Natural Gas Spot Prices ranged from a low of ~~$2.54/~~$1.65/mmBtu in ~~February 2019~~March 2020 to a high of ~~$4.25/~~$2.17/mmBtu in ~~March 2019.~~January 2020.

Baker Hughes Rig Count

The Baker Hughes rig counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry. Rig count trends are driven by the exploration and development spending by oil and natural gas companies, which in turn is influenced by current and future price expectations for oil and natural gas. The counts may reflect the relative strength and stability of energy prices and overall market activity; however, these counts should not be solely relied on as other specific and pervasive conditions may exist that affect overall energy prices and market activity.

We have been providing rig counts to the public since 1944. We gather all relevant data through our field service personnel, who obtain the necessary data from routine visits to the various rigs, customers, contractors and other outside sources as necessary. We base the classification of a well as either oil or natural gas primarily upon filings made by operators in the relevant jurisdiction. This data is then compiled and distributed to various wire services and trade associations and is published on our website. We believe the counting process and resulting data is reliable; however, it is subject to our ability to obtain accurate and timely information. Rig counts are compiled weekly for the U.S. and Canada and monthly for all international rigs. Published international rig counts do not include rigs drilling in certain locations, such as Russia, the Caspian region, and onshore China because this information is not readily available.

Beginning in the second quarter of 2019, Ukraine was added to the Baker Hughes international rig count. The Company will continue tracking active drilling rigs in the country going forward. Historical periods will not be updated.

Rigs in the U.S. and Canada are counted as active if, on the day the count is taken, the well being drilled has been started but drilling has not been completed and the well is anticipated to be of sufficient depth to be a potential

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 28

consumer of our drill bits. In international areas, rigs are counted on a weekly basis and deemed active if drilling activities occurred during the majority of the week. The weekly results are then averaged for the month and published accordingly. The rig count does not include rigs that are in transit from one location to another, rigging up,

~~BHGE LLC 2019 First Quarter FORM 10-Q | 31~~

being used in non-drilling activities including production testing, completion and workover, and are not expected to be significant consumers of drill bits.

The rig counts are summarized in the table below as averages for each of the periods indicated.


	Three Months Ended March 31,					Three Months Ended March 31,
	2019	2018	% Change			2020	2019	% Change
North America	1,226	1,235	(1	)%	North America	981	1,226	(20)	%
International	1,028	971	6	%	International	1,074	1,028	4	%
Worldwide	2,254	2,206	2	%	Worldwide	2,055	2,254	(9)	%

Overall rig count was ~~2,254~~2,055 for the first quarter of ~~2019, an increase~~2020, a decrease of 2%9% as compared to the same period last year due primarily to ~~International~~declines in North America activity. Internationally, the rig count increased 6%4% and the rig count in North America decreased 20% when compared to the same period last year. Excluding Ukraine, the international rig count was up 1% when compared to the same period last year.

Within North America, the decrease was primarily driven by the ~~Canadian~~U.S. rig count, which was down ~~32%~~25% on average when compared to the same period last year, partially offset ~~with~~by an increase in the ~~U.S.~~Canada rig count, which was up 8%7% on ~~average.~~average when compared to the same period last year. Internationally, the improvement in the rig count was driven ~~primarily~~ by increases in the ~~Africa~~Europe region of ~~35%~~38%, primarily related to the ~~Asia-Pacific region and Europe region, were also up by 10% and 6%, respectively,~~addition of Ukraine during the second quarter of 2019, partially offset by the Latin America region which was down 3%by 11%.

RESULTS OF OPERATIONS

The discussions below relating to significant line items from our condensed consolidated statements of income (loss) are based on available information and represent our analysis of significant changes or events that impact the comparability of reported amounts. Where appropriate, we have identified specific events and changes that affect comparability or trends and, where reasonably practicable, have quantified the impact of such items. All dollar amounts in tabulations in this section are in millions of dollars, unless otherwise stated. Certain columns and rows may not add due to the use of rounded numbers.

Our condensed consolidated statement of income (loss) displays sales and costs of sales in accordance with SEC regulations under which "goods" is required to include all sales of tangible products and "services" must include all other sales, including other service activities. For the amounts shown below, we distinguish between "equipment" and "product services", where product services refer to sales under product services agreements, including sales of both goods (such as spare parts and equipment upgrades) and related services (such as monitoring, maintenance and repairs), which is an important part of its operations. We refer to "product services" simply as "services" within the Business Environment section of Management's Discussion and Analysis.

The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and ~~equity in loss of affiliate and~~ before the following: net interest expense, net other ~~non operating~~non-operating income (loss), corporate expenses, restructuring, impairment and other charges, inventory impairments, separation and merger related costs, and certain gains and losses not allocated to the operating segments.

In evaluating the segment performance, the Company primarily uses the following:

Volume: Volume is the increase or decrease in products and/or services sold period-over-period excluding the impact of foreign exchange and price. The volume impact on profit is calculated by multiplying the prior period profit rate by the change in revenue volume between the current and prior period. It also includes price, defined as the change in sales price for a comparable product or service period-over-period and is calculated as the period-over-period change in sales prices of comparable products and services.

Foreign Exchange (FX): FX measures the translational foreign exchange impact, or the translation impact of the period-over-period change on sales and costs directly attributable to change in the foreign exchange rate

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 29

compared to the U.S. dollar. FX impact is calculated by multiplying the functional currency amounts (revenue or profit) with the period-over-period FX rate variance, using the average exchange rate for the respective period.

~~BHGE LLC 2019 First Quarter FORM 10-Q | 32~~

(Inflation)/Deflation: (Inflation)/deflation is defined as the increase or decrease in direct and indirect costs of the same type for an equal amount of volume. It is calculated as the year-over-year change in cost (i.e. price paid) of direct material, compensation & benefits and overhead costs.

Productivity: Productivity is measured by the remaining variance in profit, after adjusting for the period-over-period impact of volume & price, foreign exchange and (inflation)/deflation as defined above. Improved or lower period-over-period cost productivity is the result of cost efficiencies or inefficiencies, such as cost decreasing or increasing more than volume, or cost increasing or decreasing less than volume, or changes in sales mix among segments. This also includes the period-over-period variance of transactional foreign exchange, aside from those foreign currency devaluations that are reported separately for business evaluation purposes.

Orders and Remaining Performance Obligations

Orders: For the three months ended March 31, ~~2019,~~2020, we recognized orders of ~~$5.7~~$5.5 billion, ~~up 9% compared to~~a decrease of $0.2 billion, or 3%, from the ~~first quarter of 2018.~~three months ended March 31, 2019. Service orders were ~~up 4%~~down 2% and equipment orders were ~~up 17%~~down 4%. The decline in orders was driven by Oilfield Equipment and Digital Solutions, partially offset by year-over-year growth in Oilfield Services and Turbomachinery & Process Solutions.

Remaining Performance Obligations (RPO): As of March 31, ~~2019,~~2020, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was ~~$20.5~~$22.7 billion.

Revenue and Segment Operating Income (Loss) Before Tax

Revenue and segment operating income (loss) for each of our four operating segments is provided below.


	Three Months Ended March 31,				$ Change				Three Months Ended March 31,						$ Change
	2019		2018						2020		2019
Revenue:								Revenue:
Oilfield Services	$	2,986	$	2,678	$	308		Oilfield Services	$	3,139	$	2,986	$	153
Oilfield Equipment	735		664		71			Oilfield Equipment	712		735		(23)
Turbomachinery & Process Solutions	1,302		1,460		(158		)	Turbomachinery & Process Solutions	1,085		1,302		(217)
Digital Solutions	592		598		(6		)	Digital Solutions	489		592		(103)
Total	$	5,615	$	5,399	$	216		Total	$	5,425	$	5,615	$	(190)

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 3330


	Three Months Ended March 31,						$ Change				Three Months Ended March 31,						$ Change
	2019			2018							2020		2019
Segment operating income (loss):										Segment operating income (loss):
Oilfield Services	$	176		$	141		$	35		Oilfield Services	$	206	$	176	$	30
Oilfield Equipment	12			(6		)	18			Oilfield Equipment	(8)		12		(20)
Turbomachinery & Process Solutions	118			119			(1		)	Turbomachinery & Process Solutions	134		118		16
Digital Solutions	68			73			(5		)	Digital Solutions	29		68		(39)
Total segment operating income	373			327			47			Total segment operating income	361		373		(12)
Corporate	(100		)	(98		)	(2		)	Corporate	(122)		(100)		(22)
Inventory impairment	—			(61		)	61			Inventory impairment	(160)		—		(160)
Goodwill impairment										Goodwill impairment	(14,717)		—		(14,717)
Restructuring, impairment and other	(62		)	(162		)	100			Restructuring, impairment and other	(1,325)		(62)		(1,263)
Separation and merger related costs	(34		)	(46		)	12
Separation and merger related										Separation and merger related	(41)		(34)		(7)
Operating income (loss)	176			(41		)	218			Operating income (loss)	(16,003)		176		(16,181)
Other non operating income, net	21			2			19
Other non-operating income, net										Other non-operating income, net	25		21		4
Interest expense, net	(59		)	(46		)	(13		)	Interest expense, net	(59)		(59)		—
Income (loss) before income taxes and equity in loss of affiliate	138			(85		)	223
Equity in loss of affiliate	—			(20		)	20
Income (loss) before income taxes										Income (loss) before income taxes	(16,037)		138		(16,175)

Provision for income taxes	(67		)	(38		)	(29		)	Provision for income taxes	(8)		(67)		59
Net income (loss)	$	71		$	(143	)	$	214		Net income (loss)	$	(16,045)	$	71	$	(16,116)

Segment Revenues and Segment Operating Income (Loss)

First Quarter of ~~2019~~2020 Compared to the First Quarter of ~~2018~~2019

Revenue ~~increased $216~~decreased $190 million, or 4%3%, primarily driven by ~~increased activity in Oilfield Services and Oilfield Equipment. Oilfield Services increased $308 million and Oilfield Equipment increased $71 million, partially offset by the decrease~~lower volume in Turbomachinery & Process Solutions ~~of $158~~and Digital Solutions. Turbomachinery & Process Solutions decreased $217 million, ~~and in~~ Digital Solutions ~~of $6~~decreased $103 million, Oilfield Equipment decreased $23 million, partially offset by Oilfield Services which increased $153 million.

Total segment operating income ~~increased $47~~decreased $12 million. The ~~increase~~decline was driven by Digital Solutions which decreased $39 million and Oilfield Equipment which decreased $20 million, partially offset by Oilfield Services which increased ~~$35 million and Oilfield Equipment which increased $18 million, partially offset by Digital Solutions which decreased $5~~$30 million and Turbomachinery & Process Solutions which ~~decreased $1~~increased $16 million.

Oilfield Services

Oilfield Services revenue increased ~~$308~~$153 million, or ~~12%~~5%, in the first quarter of ~~2019~~2020 compared to the first quarter of ~~2018,~~2019, as a result of increased ~~activity as evidenced by an increase in the U.S. and~~international activity. International ~~rig counts. North America~~ revenue was ~~$1,156~~$2,121 million in the first quarter of ~~2019,~~2020, an increase of ~~$62~~$291 million from the first quarter of ~~2018. International~~2019. North America revenue was ~~$1,830~~$1,018 million in the first quarter of ~~2019, an increase~~2020, a decrease of ~~$246~~$138 million from the first quarter of ~~2018.~~2019.

Oilfield Services segment operating income was ~~$176~~$206 million in the first quarter of ~~2019~~2020 compared to ~~$141~~$176 million ~~of segment operating income~~ in the first quarter of ~~2018. The increase was~~2019, primarily driven by ~~synergy benefits~~higher volume and ~~to a lesser extent~~increased cost productivity, partially offset by ~~higher volume.~~the impact of COVID-19.

Oilfield Equipment

Oilfield Equipment revenue ~~increased $71~~decreased $23 million, or ~~11%~~3%, in the first quarter of ~~2019~~2020 compared to the first quarter of ~~2018.~~2019. The ~~increase~~decline was driven by lower volume in the surface pressure control and services businesses, related to the impact of COVID-19 pandemic. These decreases were partially offset by higher volume in the subsea production systems ~~business, subsea services business,~~ and ~~subsea drilling systems business. These increases were partially offset by lower volume in the~~ flexible pipe ~~business.~~

businesses.

~~BHGE~~Baker Hughes Holdings LLC ~~2019~~2020 First Quarter FORM 10-Q | 3431

Oilfield Equipment segment operating loss was $8 million in the first quarter of 2020 compared to segment operating income ~~was~~of $12 million in the first quarter of ~~2019 compared to segment operating loss of $6 million in the first quarter of 2018.~~2019. The ~~increase~~decline in income was driven primarily by ~~positive~~supply-chain and mobility related delays from COVID-19, lower volume due to seasonality and lower cost ~~productivity and to a lesser extent by volume increases.~~productivity.

Turbomachinery & Process Solutions

Turbomachinery & Process Solutions revenue of ~~$1,302~~$1,085 million decreased ~~$158~~$217 million, or ~~11%~~17%, in the first quarter of ~~2019~~2020 compared to the first quarter of ~~2018.~~2019. The decrease was driven by lower equipment ~~installation volume, lower~~and services ~~upgrades and the sale of the natural gas solutions~~revenue as well as business dispositions, partially offset by higher ~~contractual services revenue.~~installations and higher revenues in the flow and process technologies business. Equipment revenue in the quarter represented ~~35%~~32%, and service revenue represented ~~65%~~68% of total segment revenue. Equipment revenue was down ~~23%~~24% year-over-year, ~~and service~~driven by supply chain delays primarily related to COVID-19. Service revenue was down ~~2%.~~13% compared to the prior year due to COVID-19 mobility related delays.

Turbomachinery & Process Solutions segment operating income was $134 million in the first quarter of 2020 compared to $118 million in the first quarter of ~~2019 compared to segment operating income of $119 million in the first quarter of 2018.~~2019. The ~~decline~~increase in profitability was driven primarily by ~~lower volume~~increased cost productivity and ~~the sale of the natural gas solutions~~ business mix, partially offset by ~~higher cost productivity and favorable business mix.~~lower volume driven by COVID-19.

Digital Solutions

Digital Solutions revenue decreased $6$103 million, or 1%17%, in the first quarter of ~~2019~~2020 compared to the first quarter of ~~2018, driven~~2019, due to volume declines in most segments, primarily ~~by lower volume in controls~~related to COVID-19 impacts as a significant portion of both the customer base and ~~software businesses, partially offset with higher volume in~~supply chain was offline during the ~~measurement & sensing and pipeline and process solutions businesses.~~quarter.

Digital Solutions segment operating income was $29 million in the first quarter of 2020 compared to $68 million in the first quarter of ~~2019 compared to segment operating income of $73 million in the first quarter of 2018.~~2019. The decrease in profitability was driven by ~~unfavorable business mix.~~lower volumes related to COVID-19.

Goodwill Impairment

During the first quarter of 2020, the Company’s market capitalization declined significantly driven by current macroeconomic and geopolitical conditions including the decrease in demand caused by the COVID-19 pandemic and collapse of oil prices driven by both surplus production and supply. Based on these events, we concluded that a triggering event occurred and we performed an interim quantitative impairment test as of March 31, 2020. Based upon the results of the impairment test, we recognized a goodwill impairment charge of $14,717 million.

Restructuring, Impairment and Other

In the first quarter of 2020, we recognized $1,325 million in restructuring, impairment and other items, compared to $62 million in the first quarter of 2019. The charges in the first quarter of 2020 primarily relate to product line rationalization and headcount reductions in certain geographical locations to align our workforce with expected activity levels and market conditions.

Separation and Merger Related

For the first quarter of 2019, we recognized $62 million in restructuring and impairment charges, a decrease of $100 million from the first quarter of 2018, primarily from reduced restructuring activity as we conclude the integration of Baker Hughes.

~~Separation and Merger Related Costs~~

~~For the first quarter of 2019,~~2020, we incurred separation and merger related costs of ~~$34~~$41 million, ~~a decrease~~an increase of ~~$12~~$7 million from the first quarter of ~~2018.~~2019. Costs in the first quarter of ~~2019~~2020 primarily relate to the ~~finalization of~~ongoing activities for the ~~Master Agreement Framework and the anticipated~~ separation from GE. ~~In the first quarter of 2018, separation and merger related costs primarily include costs associated with the acquisition of Baker Hughes.~~

~~Equity in Loss of Affiliate~~

As we have discontinued applying the equity method on our investment in BJ Services, we did not record any gain or loss during the first quarter of 2019 compared to a loss of $20 million recorded in the first quarter of 2018. We will resume application of the equity method only after our share of unrecognized net income equals our share of net loss not recognized during the period the equity method was suspended.

Interest Expense, Net

For the first quarter of ~~2019,~~2020, we incurred interest expense, net of interest income, of $59 million, ~~an increase of $13 million from~~flat in comparison to the first quarter of ~~2018, primarily driven by lower interest income.~~2019.

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 32

Income Taxes

For the ~~first quarter of 2019,~~three months ended March 31, 2020, income tax expense was ~~$67~~$8 million compared to ~~$38~~a tax expense of $67 million for the prior year ~~quarter.~~period. The difference between the U.S. statutory tax rate of 21% and the current effective tax rate is primarily ~~due~~related to ~~the geographical mix of earnings~~non-deductible goodwill impairment and ~~losses, coupled with $21 million related to~~ losses with no tax benefit due to

~~BHGE LLC 2019 First Quarter FORM 10-Q | 35~~

valuation allowances. ~~Since we~~We are a partnership for U.S. federal tax purposes, therefore, any tax ~~benefits~~effects associated with the U.S. ~~losses~~ are recognized by our members and not reflected in our tax ~~expense~~.expense.

LIQUIDITY AND CAPITAL RESOURCES

Our objective in financing our business is to maintain sufficient liquidity, adequate financial resources and financial flexibility in order to fund the requirements of our business. Despite the challenging dynamics during the quarter, we continue to maintain solid financial strength and liquidity.At March 31, ~~2019,~~2020, we had cash and cash equivalents of ~~$3,067 million~~$3.0 billion compared to ~~$3,677 million~~$3.2 billion at December 31, ~~2018.~~ 2019. Our liquidity is further supported by a revolving credit facility of $3 billion, and access to both commercial paper and uncommitted lines of credit.At both March 31, 2020 and December 31, 2019, we had no borrowings outstanding under the revolving credit facility, the commercial paper program, or our uncommitted lines of credit. Our next debt maturity is December 2022.

Cash and cash equivalents includes ~~$717~~$106 million and ~~$747~~$162 million of cash held on behalf of GE at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

Excluding cash held on behalf of GE, our U.S. subsidiaries held approximately ~~$0.4~~$0.5 billion and ~~$0.7~~$0.4 billion while our foreign subsidiaries held approximately ~~$1.9~~$2.4 billion and ~~$2.3~~$2.7 billion of our cash and cash equivalents as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. A substantial portion of the cash held by foreign subsidiaries at March 31, ~~2019~~2020 has been reinvested in active non-U.S. business operations. If we decide at a later date to repatriate those funds to the U.S., ~~we may be required to provide taxes on certain of those funds, however, due to the enactment of U.S. tax reform, repatriations of foreign earnings~~they will generally be free of U.S. federal tax but may incur other taxes such as withholding or state taxes.

We have a $3 billion committed unsecured revolving credit facility (the ~~2017~~2019 Credit Agreement) with commercial banks maturing in ~~July 2022.~~December 2024. The ~~2017~~2019 Credit Agreement contains certain customary representations and warranties, certain customary affirmative covenants and nocertain customary negative covenants. Upon the occurrence of certain events of default, our obligations under the ~~2017~~2019 Credit Agreement may be accelerated. Such events of default include payment defaults to lenders under the ~~2017~~2019 Credit Agreement and other customary defaults. No such events of default have occurred. ~~During the three months ended March 31, 2019 and 2018, there were no borrowings under the 2017 Credit Agreement.~~

WeIn addition, we have a commercial paper program under which we may issue from time to time up to $3 billion in commercial paper with maturities of no more than 397 days. ~~During~~

Certain Senior Notes contain covenants that restrict our ability to take certain actions. See Note 9. "Borrowings" of the ~~three months ended~~Notes to Unaudited Condensed Consolidated Financial Statements in this Quarterly Report. At March 31, ~~2019~~2020, we were in compliance with all debt covenants.

We continuously review our liquidity and 2018, there were no borrowings outstanding under the commercial paper program. The maximum combined borrowing at any time under both the 2017 Credit Agreement and the commercial paper program is $3 billion.

capital resources. If market conditions were to change, for instance due to the uncertainty created by the COVID-19 pandemic or the significant decline in oil prices, and our revenue was reduced significantly or operating costs were to increase significantly, our cash flows and liquidity could be reduced. Additionally, it could cause the rating agencies to lower our credit ~~rating.~~ratings. There are no ratings triggers that would accelerate the maturity of any borrowings under our committed credit ~~facility. However,~~facility; however, a downgrade in our credit ratings could increase the cost of borrowings under the credit facility and could also limit or preclude our ability to issue commercial paper. Should this occur, we could seek alternative sources of funding, including borrowing under the credit facility.

During the three months ended March 31, ~~2019,~~2020, we ~~used~~dispersed cash to fund a variety of activities including certain working capital needs, ~~and~~ restructuring and GE separation related costs, capital expenditures, and ~~distribution~~the payment of dividends and distributions to ~~members.~~noncontrolling interests. We believe that cash on hand, cash flows generated from operations and the available credit facility will provide sufficient liquidity to manage our global cash needs.

Baker Hughes Holdings LLC 2020 First Quarter FORM 10-Q | 33

Cash Flows

Cash flows provided by (used in) each type of activity were as follows for the three months ended March 31:


(In millions)	2019			2018			(In millions)	2020		2019
Operating activities	$	(143	)	$	290		Operating activities	$	478	$	(143)
Investing activities	(256		)	(135		)	Investing activities	(318)		(256)
Financing activities	(233		)	(1,561		)	Financing activities	(327)		(233)


Title of each class	Trading Symbol	Name of each exchange on which registered
Share 5.125% Senior Notes due 2040	None	New York Stock Exchange



		Page No.
PART I -	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Income (Loss) (Unaudited) - Three months ended March 31, ~~2019~~2020 and ~~2018~~2019	1

	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - Three months ended March 31, ~~2019~~2020 and ~~2018~~2019	2

	Condensed Consolidated Statements of Financial Position (Unaudited) - March 31, ~~2019~~2020 and December 31, ~~2018~~2019	3

	Condensed Consolidated Statements of Changes in Members' Equity (Unaudited) - Three months ended March 31, ~~2019~~2020 and ~~2018~~2019	4

	Condensed Consolidated Statements of Cash Flows (Unaudited) - Three months ended March 31, ~~2019~~2020 and ~~2018~~2019	5

	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2926

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3836

Item 4.	Controls and Procedures	3936

PART II -	OTHER INFORMATION

Item 1.	Legal Proceedings	4037

Item 1A.	Risk Factors	4037

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4037

Item 3.	Defaults Upon Senior Securities	4037

Item 4.	Mine Safety Disclosures	4037

Item 5.	Other Information	4037

Item 6.	Exhibits	4138

	Signatures	4239



þ☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



(In millions, except per unit amounts)	Common Unitholders			Retained Loss			Accumulated Other Comprehensive Loss			Non-controlling Interests			Total Equity
Balance at December 31, 2018	$	37,582		$	(354	)	$	(2,462	)	$	110		$	34,876
Comprehensive income:
Net income				65						6			71
Other comprehensive income							172						172
Regular cash distribution to members ($0.18 per unit)	(187		)										(187		)
BHGE stock-based compensation cost	40												40
Other	(3		)	1						(4		)	(6		)
Balance at March 31, 2019	$	37,432		$	(288	)	$	(2,290	)	$	112		$	34,966



Year	Estimated Amortization Expense
Remainder of 2019	$	261
2020	329
2021	280
2022	237
2023	225
2024	218




Operating Lease Expense	Three Months Ended March 31, 2019
Long-term fixed lease	$	48
Long-term variable lease	11
Short-term lease	123
Total operating lease expense	$	182



Year	Operating leases
Remainder of 2019	$	165
2020	194
2021	140
2022	113
2023	80
Thereafter	386
Total lease payments	1,078
Less: imputed interest	209
Total	$	869

Amounts recognized in the condensed consolidated statement of financial position as of March 31, 2019:
	Operating leases
All other current liabilities	$	194
All other liabilities	675
Total	$	869



	Common Units Held by BHGE	Common Units Held by GE
Balance at December 31, 2018	513,399	521,543
Issue of units to BHGE under equity incentive plan	1,541	—
Balance at March 31, 2019	514,940	521,543



	Three Months Ended March 31,
Segments revenue	2019		2018
Oilfield Services	$	2,986	$	2,678
Oilfield Equipment	735		664
Turbomachinery & Process Solutions	1,302		1,460
Digital Solutions	592		598
Total	$	5,615	$	5,399



3.1		Amendment to the Certificate of Formation of Baker Hughes ~~a GE company,~~Holdings LLC ~~(incorporated by reference to Exhibit 3.2 to the Current Report of~~(formerly known as Baker Hughes, a GE company, ~~LLC on Form 8-K12B filed on July 3, 2017).~~LLC) dated as of April 15, 2020.
3.2		Amended and Restated Limited Liability Company Agreement of Baker Hughes Holdings LLC (formerly known as Baker Hughes, a GE company, ~~LLC,~~LLC) dated as of ~~July 3, 2017 (incorporated by reference to Exhibit 3.3 to the Current Report of Baker Hughes, a GE company, LLC on Form 8-K12B filed on July 3, 2017).~~April 15, 2020.
~~10.1~~31.1**		Transaction Agreement, dated as of February 28, 2019, between Baker Hughes, a GE company, LLC, General Electric Company and GE Aero Power LLC (incorporated by reference to Exhibit 10.1 to the Current Report of Baker Hughes, a GE company, LLC on Form 8-K filed on February 28, 2019).
~~10.2~~	Stock and Asset Purchase Agreement, dated February 25, 2019, among Baker Hughes, a GE company, LLC, GE Energy Switzerland GmbH and, for the limited purpose of the last sentence of Section 11.06, GE, and for the limited purpose of Section 11.15(b) and the last sentence of Section 11.06, Baker Hughes, a GE company (incorporated by reference to Exhibit 10.2 to the Current Report of Baker Hughes, a GE company, LLC on Form 8-K filed on February 28, 2019).
~~10.3~~	Amended and Restated HDGT Distribution and Supply Agreement, dated as of February 27, 2019, between Baker Hughes, a GE company, LLC and General Electric Company (incorporated by reference to Exhibit 10.3 to the Current Report of Baker Hughes, a GE company, LLC on Form 8-K filed on February 28, 2019).
~~10.4~~	Letter Agreement, dated as of February 28, 2019, between Baker Hughes, a GE company, LLC and General Electric Company (incorporated by reference to Exhibit 10.4 to the Current Report of Baker Hughes, a GE company, LLC on Form 8-K filed on February 28, 2019).
~~10.5~~	Letter Agreement, dated as of February 28, 2019, between Baker Hughes, a GE company, LLC and General Electric Company (incorporated by reference to Exhibit 10.5 to the Current Report of Baker Hughes, a GE company, LLC on Form 8-K filed on February 28, 2019).
~~10.6~~	Amendment No. 2 to the Master Agreement, dated as of February 22, 2019, among General Electric Company, Baker Hughes, a GE company, and Baker Hughes, a GE company, LLC (incorporated by reference to Exhibit 10.6 to the Current Report of Baker Hughes, a GE company, LLC on Form 8-K filed on February 28, 2019).
31.1**	Certification of Lorenzo Simonelli, President and Chief Executive Officer, furnished pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2**		Certification of Brian Worrell, Chief Financial Officer, furnished pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
32**		Certification of Lorenzo Simonelli, President and Chief Executive Officer, and Brian Worrell, Chief Financial Officer, furnished pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended.
95*		~~Mine Safety Disclosure~~
101.INS*		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		XBRL Schema Document
101.CAL*		XBRL Calculation Linkbase Document
101.LAB101.DEF		XBRL Definition Linkbase Document
101.LAB*		XBRL Label Linkbase Document
101.PRE*		XBRL Presentation Linkbase Document
101.DEF*	~~XBRL Definition Linkbase Document~~