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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-09397
Baker Hughes Holdings LLC
(Exact name of registrant as specified in its charter)
Delaware76-0207995
(State or other jurisdiction(I.R.S. Employer Identification No.)
of incorporation or organization)
17021 Aldine Westfield
Houston,Texas77073-5101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713439-8600
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Share 5.125% Senior Notes due 2040-New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
As of October 16, 2020, all of the common units of the registrant are held by affiliates of the registrant. None of the common units are publicly traded.



Baker Hughes Holdings LLC
Table of Contents

Page No.


Baker Hughes Holdings LLC 2020 Third Quarter FORM 10-Q | i



PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Baker Hughes Holdings LLC
Condensed Consolidated Statements of Income (Loss)
(Unaudited)


Three Months Ended September 30,Nine Months Ended September 30,
(In millions, except per unit amounts)2020201920202019
Revenue:
Sales of goods$3,290 $3,339 $9,240 $9,886 
Sales of services1,759 2,543 5,970 7,604 
Total revenue 5,049 5,882 15,210 17,490 
Costs and expenses:
Cost of goods sold2,920 2,901 8,296 8,647 
Cost of services sold1,372 1,880 4,724 5,705 
Selling, general and administrative565 679 1,830 2,083 
Goodwill impairment  14,717  
Restructuring, impairment and other209 71 1,637 183 
Separation related32 54 110 128 
Total costs and expenses5,098 5,585 31,314 16,746 
Operating income (loss)(49)297 (16,104)744 
Other non-operating loss, net(149)(14)(367)(124)
Interest expense, net(66)(59)(195)(174)
Income (loss) before income taxes(264)224 (16,666)446 
Provision for income taxes(47)(107)(110)(269)
Net income (loss)(311)117 (16,776)177 
Less: Net income attributable to noncontrolling interests9 7 23 20 
Net income (loss) attributable to Baker Hughes Holdings LLC$(320)$110 $(16,799)$157 
Cash distribution per common unit$0.18 $0.18 $0.54 $0.54 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Baker Hughes Holdings LLC 2020 Third Quarter FORM 10-Q | 1



Baker Hughes Holdings LLC
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2020201920202019
Net income (loss)$(311)$117 $(16,776)$177 
Less: Net income attributable to noncontrolling interests9 7 23 20 
Net income (loss) attributable to Baker Hughes Holdings LLC(320)110 (16,799)157 
Other comprehensive income (loss):
Investment securities (1)(2) 
Foreign currency translation adjustments135 (123)(101)(96)
Cash flow hedges2 2 (6)3 
Benefit plans(54)7 (24)(6)
Other comprehensive income (loss)83 (115)(133)(99)
Less: Other comprehensive loss attributable to noncontrolling interests  (3)(1)
Other comprehensive income (loss) attributable to Baker Hughes Holdings LLC83 (115)(130)(98)
Comprehensive income (loss)(228)2 (16,909)78 
Less: Comprehensive income attributable to noncontrolling interests9 7 20 19 
Comprehensive income (loss) attributable to Baker Hughes Holdings LLC$(237)$(5)$(16,929)$59 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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Baker Hughes Holdings LLC
Condensed Consolidated Statements of Financial Position
(Unaudited)
(In millions)
September 30, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents (1)
$4,053 $3,245 
Current receivables, net5,726 6,491 
Inventories, net4,469 4,608 
All other current assets1,031 949 
Total current assets15,279 15,293 
Property, plant and equipment (net of accumulated depreciation of $4,744 and $4,384)
5,536 6,240 
Goodwill5,685 20,396 
Other intangible assets, net4,377 5,381 
Contract and other deferred assets1,971 1,881 
All other assets3,112 3,058 
Deferred income taxes1,305 964 
Total assets (1)
$37,265 $53,213 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$3,482 $4,268 
Short-term debt and current portion of long-term debt (1)
935 321 
Progress collections and deferred income 3,623 2,870 
All other current liabilities2,684 2,535 
Total current liabilities10,724 9,994 
Long-term debt6,754 6,301 
Deferred income taxes122  
Liabilities for pensions and other postretirement benefits1,147 1,079 
All other liabilities1,378 1,425 
Members' Equity:
Members' capital (common units 1,034 and 1,027 issued and outstanding as of September 30, 2020 and December 31, 2019, respectively)
36,641 36,998 
Retained loss(16,913)(110)
Accumulated other comprehensive loss(2,719)(2,589)
Baker Hughes Holdings LLC equity17,009 34,299 
Noncontrolling interests131 115 
Total equity17,140 34,414 
Total liabilities and equity$37,265 $53,213 
(1)Total assets include $111 million and $273 million of assets held on behalf of General Electric Company, of which $85 million and $162 million is cash and cash equivalents and $26 million and $111 million is investment securities at September 30, 2020 and December 31, 2019, respectively, and a corresponding amount of liability is reported in short-term debt. See "Note 15. Related Party Transactions" for further details.
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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Baker Hughes Holdings LLC
Condensed Consolidated Statements of Changes in Members' Equity
(Unaudited)
(In millions, except per unit amounts)
Members' CapitalRetained
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 income (loss)(16,799)23 (16,776)
Other comprehensive loss(130)(3)(133)
Regular cash distribution to members ($0.54 per unit)
(558)(558)
Baker Hughes stock-based compensation cost164 164 
Other37 (4)(4)29 
Balance at September 30, 2020$36,641 $(16,913)$(2,719)$131 $17,140 


(In millions, except per unit amounts)Members' CapitalRetained
Loss
Accumulated
Other
Comprehensive
Loss
Non-
controlling
Interests
Total Equity
Balance at June 30, 2020$36,762 $(16,593)$(2,802)$126 $17,493 
Comprehensive income (loss):
Net income (loss)(320)9 (311)
Other comprehensive income83 83 
Regular cash distribution to members ($0.18 per unit)
(186)(186)
Baker Hughes stock-based compensation cost52 52 
Other13 (4)9 
Balance at September 30, 2020$36,641 $(16,913)$(2,719)$131 $17,140 

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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Baker Hughes Holdings LLC
Condensed Consolidated Statements of Changes in Members' Equity
(Unaudited)
(In millions, except per unit amounts)Members' CapitalRetained
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 (loss):
Net income157 20 177 
Other comprehensive loss(98)(1)(99)
Regular cash distribution to members ($0.54 per unit)
(560)(560)
Other transactions with members177 (119)58 
Repurchase of common units(250)(250)
Baker Hughes stock-based compensation cost136 136 
Other29 1 (25)5 
Balance at September 30, 2019$37,114 $(196)$(2,679)$104 $34,343 


(In millions, except per unit amounts)Members' CapitalRetained
Earnings (Loss)
Accumulated
Other
Comprehensive
Loss
Non-
controlling
Interests
Total Equity
Balance at June 30, 2019$37,418 $(306)$(2,564)$116 $34,664 
Comprehensive income (loss):
Net income110 7 117 
Other comprehensive loss(115)(115)
Regular cash distribution to members ($0.18 per unit)
(187)(187)
Other transactions with members65 65 
Repurchase of common units(250)(250)
Baker Hughes stock-based compensation cost50 50 
Other18 (19)(1)
Balance at September 30, 2019$37,114 $(196)$(2,679)$104 $34,343 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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Baker Hughes Holdings LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)

Nine Months Ended September 30,
(In millions)20202019
Cash flows from operating activities:
Net income (loss)$(16,776)$177 
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization1,010 1,065 
Goodwill impairment14,717  
Intangible assets impairment729  
Property, plant and equipment impairment290  
Inventory impairment218  
Loss on sale of business217 138 
Write-down of assets held for sale129  
Benefit for deferred income taxes(254)(46)
Changes in operating assets and liabilities:
Current receivables580 (322)
Inventories(183)(324)
Accounts payable(674)(27)
Progress collections and deferred income619 710 
Contract and other deferred assets(90)(46)
Other operating items, net392 (510)
Net cash flows from operating activities924 815 
Cash flows from investing activities:
Expenditures for capital assets(801)(873)
Proceeds from disposal of assets141 201 
Other investing items, net109 13 
Net cash flows used in investing activities(551)(659)
Cash flows from financing activities:
Net repayments of debt and other borrowings
(170)(227)
Proceeds from issuance of commercial paper737  
Proceeds from issuance of long-term debt500  
Distributions to members(558)(560)
Repurchase of common units (250)
Other financing items, net(15)37 
Net cash flows from (used in) financing activities494 (1,000)
Effect of currency exchange rate changes on cash and cash equivalents(59)(29)
Increase (decrease) in cash and cash equivalents808 (873)
Cash and cash equivalents, beginning of period3,245 3,677 
Cash and cash equivalents, end of period$4,053 $2,804 
Supplemental cash flows disclosures:
Income taxes paid, net of refunds$317 $299 
Interest paid$188 $196 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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Baker Hughes 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 Holdings LLC, a Delaware limited liability company (the Company, BHH LLC, we, us, or our), and the successor to Baker Hughes Incorporated, a Delaware corporation (BHI) is an energy technology company with a diversified portfolio of technologies and services that span the entire energy value chain. The partnership was formed as the result of a combination between BHI and the oil and gas business (GE O&G) of General Electric Company (GE). On April 15, 2020, the Company changed its name from Baker Hughes, a GE company, LLC to Baker Hughes Holdings LLC. As of September 30, 2020, GE owns approximately 33.8% of our common units and Baker Hughes Company (Baker Hughes) owns approximately 66.2% of our common units.
BASIS OF PRESENTATION
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, 2019 (2019 Annual Report).
In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary 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.
Separation related costs as reflected in our condensed consolidated statements of income (loss) include costs incurred in connection with the ongoing activities related to our separation from GE. See "Note 15. Related Party Transactions" for further 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 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 September 30, 2020 and December 31, 2019, we had $803 million and $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 $75 million and $142 million, as of September 30, 2020 and December 31, 2019, respectively, held on behalf of GE.

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Baker Hughes Holdings LLC
Notes to Unaudited Condensed Consolidated Financial Statements
Cash and cash equivalents includes a total of $85 million and $162 million of cash at September 30, 2020 and December 31, 2019, respectively, held on behalf of GE, and a corresponding liability is reported in short-term debt. See "Note 15. Related Party Transactions" for further details.
NEW ACCOUNTING STANDARDS ADOPTED
On January 1, 2020, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (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 previously used under U.S. GAAP, which generally require that a loss be incurred before it is recognized. The new standard also applies to financial assets arising from revenue transactions such as contract assets and accounts 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 September 30,Nine Months Ended September 30,
Total Revenue2020201920202019
U.S.$1,032 $1,500 $3,330 $4,621 
Non-U.S.4,017 4,382 11,880 12,869 
Total$5,049 $5,882 $15,210 $17,490 
REMAINING PERFORMANCE OBLIGATIONS
As of September 30, 2020 and 2019, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $23.0 billion and $22.2 billion, respectively. As of September 30, 2020, we expect to recognize revenue of approximately 49%, 68% and 92% 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.

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Baker Hughes Holdings LLC
Notes to Unaudited Condensed Consolidated Financial Statements
NOTE 3. CURRENT RECEIVABLES
Current receivables are comprised of the following:
September 30, 2020December 31, 2019
Customer receivables$4,657 $5,448 
Related parties604 570 
Other826 796 
Total current receivables6,087 6,814 
Less: Allowance for credit losses(361)(323)
Total current receivables, net$5,726 $6,491 
Customer receivables are recorded at the invoiced amount. Related parties consists primarily of amounts owed to us by GE and Baker Hughes. The "Other" category consists primarily of indirect taxes, other tax receivables, customer retentions and advance payments to suppliers.
NOTE 4. INVENTORIES
Inventories, net of reserves of $425 million and $429 million as of September 30, 2020 and December 31, 2019, respectively, are comprised of the following:
September 30, 2020December 31, 2019
Finished goods$2,425 $2,546 
Work in process and raw materials2,044 2,062 
Total inventories, net$4,469 $4,608 
During the three and nine months ended September 30, 2020, we recorded inventory impairments of $42 million and $218 million, respectively, predominantly in our Oilfield Services segment as a result of certain restructuring activities 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).

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Baker Hughes 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$15,382 $4,177 $2,186 $2,432 $24,177 
Accumulated impairment at December 31, 2018(2,633)(867) (254)(3,754)
Balance at December 31, 201812,749 3,310 2,186 2,178 20,423 
Currency exchange and others
 9 (15)(21)(27)
Balance at December 31, 201912,749 3,319 2,171 2,157 20,396 
Impairment(11,428)(3,289)  (14,717)
Currency exchange and others(20)(24)43 7 6 
Balance at September 30, 2020$1,301 $6 $2,214 $2,164 $5,685 
We perform our annual goodwill impairment test for each of our reporting units as of July 1 of each fiscal year, in conjunction with our annual strategic planning process. Our reporting units are the same as our four reportable segments. We also test goodwill for impairment whenever events or circumstances occur which, in our judgment, could more likely than not reduce the fair value of one or more reporting units below its carrying value. Potential impairment indicators include, but are not limited to, (i) the results of our most recent annual or interim impairment testing, 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, and (iii) declines in Baker Hughes' market capitalization below book value, and the magnitude and duration of those declines, if any.
During the first quarter of 2020, Baker Hughes' market capitalization declined significantly compared to the fourth quarter of 2019. Baker Hughes' 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' 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 concluded that 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 each of our reporting units 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.
Under the income approach, the fair value for each of our 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 and expected demand for our goods and services. Due to the inherent uncertainties involved in making estimates and assumptions, actual results may differ from those assumed in our forecasts.

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Baker Hughes 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 performed during the first quarter of 2020, we concluded that the carrying value of the Oilfield Services (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. As of March 31, 2020, the carrying value of our OFS and OFE reporting units equaled their fair value upon completion of the goodwill impairment test whereas our other reporting units still maintained a headroom that was substantially in excess of their carrying values.
During the third quarter of 2020, we completed our annual impairment test for each reporting unit. As a result of this assessment, we concluded that no indicators existed that would lead to a determination that it is more likely than not that the fair value of each reporting unit is less than its carrying value. There can be no assurances that future sustained declines in macroeconomic or business conditions affecting our industry will not occur, which could result in goodwill impairment charges in future periods.

OTHER INTANGIBLE ASSETS
Intangible assets are comprised of the following:
September 30, 2020December 31, 2019
Gross
Carrying
Amount
Accumulated
Amortization
NetGross
Carrying
Amount
Accumulated
Amortization
Net
Customer relationships (1)
$2,243 $(888)$1,355 $3,027 $(1,045)$1,982 
Technology (1)
1,097 (663)434 1,075 (626)449 
Trade names and trademarks (1)
325 (178)147 696 (254)442 
Capitalized software (1)
1,253 (1,005)248 1,193 (928)265 
Other   3 (2)1 
Finite-lived intangible assets4,918 (2,734)2,184 5,994 (2,855)3,139 
Indefinite-lived intangible assets2,193 — 2,193 2,242 — 2,242 
Total intangible assets$7,111 $(2,734)$4,377 $8,236 $(2,855)$5,381 
(1)During the three months ended September 30, 2020, we recorded $4 million of intangible asset impairments to customer relationships. During the nine months ended September 30, 2020, we recorded intangible asset impairments to customer relationships of $480 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.
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 September 30, 2020 and 2019 was $75 million and $85 million, respectively, and $231 million and $278 million for the nine months ended September 30, 2020 and 2019, respectively.

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Baker Hughes Holdings LLC
Notes to Unaudited Condensed Consolidated Financial Statements
Estimated amortization expense for the remainder of 2020 and each of the subsequent five fiscal years is expected to be as follows:
YearEstimated Amortization Expense
Remainder of 2020$70 
2021245 
2022205 
2023192 
2024175 
2025137 

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:
September 30, 2020December 31, 2019
Long-term product service agreements $655 $603 
Long-term equipment contracts (1)
1,158 1,097 
Contract assets (total revenue in excess of billings)1,813 1,700 
Deferred inventory costs115 130 
Non-recurring engineering costs43 51 
Contract and other deferred assets$