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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, 2021
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 15, 2021, 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 2021 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)2021202020212020
Revenue:
Sales of goods$2,984 $3,290 $8,997 $9,240 
Sales of services2,109 1,759 6,020 5,970 
Total revenue 5,093 5,049 15,017 15,210 
Costs and expenses:
Cost of goods sold2,561 2,920 7,769 8,296 
Cost of services sold1,522 1,372 4,404 4,724 
Selling, general and administrative607 565 1,836 1,830 
Goodwill impairment   14,717 
Restructuring, impairment and other14 209 219 1,637 
Separation related11 32 53 110 
Total costs and expenses4,715 5,098 14,281 31,314 
Operating income (loss)378 (49)736 (16,104)
Other non-operating loss, net(102)(149)(791)(367)
Interest expense, net(67)(66)(205)(195)
Income (loss) before income taxes209 (264)(260)(16,666)
Provision for income taxes(189)(47)(422)(110)
Net income (loss)20 (311)(682)(16,776)
Less: Net income attributable to noncontrolling interests5 9 24 23 
Net income (loss) attributable to Baker Hughes Holdings LLC$15 $(320)$(706)$(16,799)
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 2021 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)2021202020212020
Net income (loss)$20 $(311)$(682)$(16,776)
Less: Net income attributable to noncontrolling interests5 9 24 23 
Net income (loss) attributable to Baker Hughes Holdings LLC15 (320)(706)(16,799)
Other comprehensive income (loss):
Investment securities   (2)
Foreign currency translation adjustments(158)135 (51)(101)
Cash flow hedges(2)2 (13)(6)
Benefit plans25 (54)78 (24)
Other comprehensive income (loss)(135)83 14 (133)
Less: Other comprehensive loss attributable to noncontrolling interests(1) (1)(3)
Other comprehensive income (loss) attributable to Baker Hughes Holdings LLC(134)83 15 (130)
Comprehensive loss(115)(228)(668)(16,909)
Less: Comprehensive income attributable to noncontrolling interests4 9 23 20 
Comprehensive loss attributable to Baker Hughes Holdings LLC$(119)$(237)$(691)$(16,929)
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 2



Baker Hughes Holdings LLC
Condensed Consolidated Statements of Financial Position
(Unaudited)
(In millions)
September 30, 2021December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$3,917 $4,125 
Current receivables, net5,403 5,700 
Inventories, net4,110 4,421 
All other current assets1,525 2,280 
Total current assets14,955 16,526 
Property, plant and equipment (net of accumulated depreciation of $5,082 and $5,115)
4,982 5,358 
Goodwill5,777 5,739 
Other intangible assets, net4,151 4,397 
Contract and other deferred assets1,738 2,001 
All other assets3,172 2,955 
Deferred income taxes974 953 
Total assets$35,749 $37,929 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$3,514 $3,532 
Short-term debt and current portion of long-term debt56 889 
Progress collections and deferred income 3,263 3,454 
All other current liabilities2,587 2,431 
Total current liabilities9,420 10,306 
Long-term debt6,708 6,744 
Deferred income taxes96 108 
Liabilities for pensions and other postretirement benefits1,132 1,217 
All other liabilities1,385 1,391 
Members' equity:
Members' capital, common units, 1,038 and 1,035 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively
36,038 36,512 
Retained loss(16,645)(15,939)
Accumulated other comprehensive loss(2,527)(2,542)
Baker Hughes Holdings LLC equity16,866 18,031 
Noncontrolling interests142 132 
Total equity17,008 18,163 
Total liabilities and equity$35,749 $37,929 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 3



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, 2020$36,512 $(15,939)$(2,542)$132 $18,163 
Comprehensive income (loss):
Net income (loss)(706)24 (682)
Other comprehensive income (loss)15 (1)14 
Regular cash distribution to Members ($0.54 per unit)
(563)(563)
Repurchase and cancellation of common units(106)(106)
Baker Hughes stock-based compensation cost153 153 
Other42 (13)29 
Balance at September 30, 2021$36,038 $(16,645)$(2,527)$142 $17,008 


(In millions, except per unit amounts)
Members' CapitalRetained
Loss
Accumulated
Other
Comprehensive
Loss
Non-
controlling
Interests
Total Equity
Balance at June 30, 2021$36,266 $(16,660)$(2,393)$142 $17,355 
Comprehensive income (loss):
Net income15 5 20 
Other comprehensive loss(134)(1)(135)
Regular cash distribution to Members ($0.18 per unit)
(188)(188)
Repurchase and cancellation of common units(106)(106)
Baker Hughes stock-based compensation cost51 51 
Other15 (4)11 
Balance at September 30, 2021$36,038 $(16,645)$(2,527)$142 $17,008 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
















Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 4



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.
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 5



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

Nine Months Ended September 30,
(In millions)20212020
Cash flows from operating activities:
Net loss$(682)$(16,776)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation and amortization832 1,010 
Loss on equity securities955  
Provision (benefit) for deferred income taxes42 (254)
Property, plant and equipment impairment, net21 290 
Goodwill impairment 14,717 
Intangible assets impairment 729 
Inventory impairment 218 
Loss on sale of business 217 
Write-down of assets held for sale 129 
Changes in operating assets and liabilities:
Current receivables319 580 
Inventories151 (183)
Accounts payable(10)(674)
Progress collections and deferred income(157)619 
Contract and other deferred assets178 (90)
Other operating items, net(51)392 
Net cash flows from operating activities1,598 924 
Cash flows from investing activities:
Expenditures for capital assets(590)(801)
Proceeds from disposal of assets178 141 
Other investing items, net200 109 
Net cash flows used in investing activities(212)(551)
Cash flows from financing activities:
Net repayments of debt and other borrowings(60)(170)
Proceeds from (repayment of) commercial paper(832)737 
Proceeds from issuance of long-term debt 500 
Distributions to Members(563)(558)
Repurchase of common units(106) 
Other financing items, net(24)(15)
Net cash flows from (used in) financing activities(1,585)494 
Effect of currency exchange rate changes on cash and cash equivalents(9)(59)
Increase (decrease) in cash and cash equivalents(208)808 
Cash and cash equivalents, beginning of period4,125 3,245 
Cash and cash equivalents, end of period$3,917 $4,053 
Supplemental cash flows disclosures:
Income taxes paid, net of refunds$181 $317 
Interest paid$204 $188 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 6



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 (BHI), is an energy technology company with a diversified portfolio of technologies and services that span the entire energy value chain. As of September 30, 2021, General Electric (GE) owns 17.2% of our common units and Baker Hughes Company (Baker Hughes) owns directly or indirectly 82.8% of our common units (collectively, the Members).
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 Securities and Exchange Commission (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 financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 (2020 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 to the current year presentation. In the notes to unaudited condensed consolidated financial statements, all dollar and common 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 2020 Annual Report for the discussion of our significant accounting policies.
Cash and Cash Equivalents
As of September 30, 2021 and December 31, 2020, we had $691 million and $687 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.
NEW ACCOUNTING STANDARDS TO BE ADOPTED
All 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.
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 7



Baker Hughes Holdings LLC
Notes to Unaudited Condensed Consolidated Financial Statements

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 Revenue2021202020212020
U.S.$1,199 $1,032 $3,337 $3,330 
Non-U.S.3,894 4,017 11,680 11,880 
Total$5,093 $5,049 $15,017 $15,210 
REMAINING PERFORMANCE OBLIGATIONS
As of September 30, 2021 and 2020, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $23.5 billion and $23.0 billion, respectively. As of September 30, 2021, we expect to recognize revenue of approximately 50%, 67% and 89% 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.
NOTE 3. CURRENT RECEIVABLES
Current receivables are comprised of the following:
September 30, 2021December 31, 2020
Customer receivables$4,569 $4,676 
Related parties439 507 
Other782 890 
Total current receivables5,790 6,073 
Less: Allowance for credit losses(387)(373)
Total current receivables, net$5,403 $5,700 
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, advance payments to suppliers, other tax receivables and customer retentions.
NOTE 4. INVENTORIES
Inventories, net of reserves of $390 million and $421 million as of September 30, 2021 and December 31, 2020, respectively, are comprised of the following:
September 30, 2021December 31, 2020
Finished goods$2,255 $2,337 
Work in process and raw materials1,855 2,084 
Total inventories, net$4,110 $4,421 
During the three and nine months ended September 30, 2020, we recorded inventory impairments of $42 million, predominately in our Oilfield Equipment segment, and $218 million, predominately in our Oilfield Services segment, respectively, 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).
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 8



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, 2019, gross$15,382 $4,186 $2,171 $2,411 $24,150 
Accumulated impairment at December 31, 2019(2,633)(867) (254)(3,754)
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)63 41 60 
Balance at December 31, 20201,301 6 2,234 2,198 5,739 
Currency exchange and others (3)(20)61 38 
Balance at September 30, 2021$1,301 $3 $2,214 $2,259 $5,777 
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 our book value, and the magnitude and duration of those declines, if any.
During the third quarter of 2021, we completed our annual impairment test and determined that the fair value was substantially in excess of the carrying value for each reporting unit resulting in no goodwill impairment. 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.
During the first quarter of 2020, Baker Hughes' market capitalization declined significantly. 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 our 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 the Organization of Petroleum Exporting Countries (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. Based upon the results of our interim quantitative impairment test, we concluded that the carrying value of the Oilfield Services and Oilfield Equipment reporting units exceeded their estimated fair value as of March 31, 2020, 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.
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 9



Baker Hughes Holdings LLC
Notes to Unaudited Condensed Consolidated Financial Statements

OTHER INTANGIBLE ASSETS
Intangible assets are comprised of the following:
September 30, 2021December 31, 2020
Gross
Carrying
Amount
Accumulated
Amortization
NetGross
Carrying
Amount
Accumulated
Amortization
Net
Customer relationships$1,944 $(749)$1,195 $2,261 $(916)$1,345 
Technology1,105 (741)364 1,127 (696)431 
Trade names and trademarks293 (168)125 326 (181)145 
Capitalized software1,306 (1,062)244 1,294 (1,041)253 
Finite-lived intangible assets4,648 (2,720)1,928 5,008 (2,834)2,174 
Indefinite-lived intangible assets2,223 — 2,223 2,223 — 2,223 
Total intangible assets$6,871 $(2,720)$4,151 $7,231 $(2,834)$4,397 
Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 1 to 35 years. Amortization expense for the three months ended September 30, 2021 and 2020 was $59 million and $75 million, respectively, and $193 million and $231 million for the nine months ended September 30, 2021 and 2020, respectively.
Estimated amortization expense for the remainder of 2021 and each of the subsequent five fiscal years is expected to be as follows:
YearEstimated Amortization Expense
Remainder of 2021$58 
2022213 
2023200 
2024182 
2025135 
202692 
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, 2021December 31, 2020
Long-term product service agreements $644 $660 
Long-term equipment contracts (1)
909 1,160 
Contract assets (total revenue in excess of billings)1,553 1,820 
Deferred inventory costs153 138 
Non-recurring engineering costs32 43 
Contract and other deferred assets$1,738 $2,001 
(1)Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment and certain other service agreements.
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 10



Baker Hughes Holdings LLC
Notes to Unaudited Condensed Consolidated Financial Statements

Revenue recognized during the three months ended September 30, 2021 and 2020 from performance obligations satisfied (or partially satisfied) in previous periods related to our long-term service agreements was $9 million and $(8) million, respectively, and $18 million and $22 million during the nine months ended September 30, 2021 and 2020, 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:
September 30, 2021December 31, 2020
Progress collections$3,140 $3,352 
Deferred income123 102 
Progress collections and deferred income (contract liabilities)$3,263 $3,454 
Revenue recognized during the three months ended September 30, 2021 and 2020 that was included in the contract liabilities at the beginning of the period was $448 million and $501 million, respectively, and $2,033 million and $1,328 million during the nine months ended September 30, 2021 and 2020, respectively.
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 September 30,Nine Months Ended September 30,
Operating Lease Expense2021202020212020
Long-term fixed lease$64 $71 $192 $213 
Long-term variable lease7 3 24 23 
Short-term lease119 102 328 382 
Total operating lease expense$190 $176 $544 $618 
Cash flows used in operating activities for operating leases approximates our expense for the three and nine months ended September 30, 2021 and 2020.
The weighted-average remaining lease term as of September 30, 2021 and December 31, 2020 was approximately nine years and eight years for our operating leases, respectively. The weighted-average discount rate used to determine the operating lease liability as of September 30, 2021 and December 31, 2020 was 3.5% and 3.7%, respectively.
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 11



Baker Hughes Holdings LLC
Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 9. BORROWINGS
Short-term and long-term borrowings are comprised of the following:
September 30, 2021December 31, 2020
Short-term borrowings
Commercial paper$ $801 
Short-term borrowings from GE11 45 
Other borrowings45 43 
Total short-term borrowings56 889 
Long-term borrowings  
2.773% Senior Notes due December 2022
1,249 1,247 
8.55% Debentures due June 2024
119 123 
   3.337% Senior Notes due December 2027
1,341 1,344 
6.875% Notes due January 2029
280 284 
3.138% Senior Notes due November 2029
522 522 
4.486% Senior Notes due May 2030
497 497 
5.125% Senior Notes due September 2040
1,293 1,297 
4.08% Senior Notes due December 2047
1,337 1,337 
Other long-term borrowings70 93 
Total long-term borrowings6,708 6,744 
Total borrowings$6,764 $7,633 
The estimated fair value of total borrowings at September 30, 2021 and December 31, 2020 was $7,498 million and $8,502 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.
BHH LLC has a $3 billion committed unsecured revolving credit facility (the Credit Agreement) with commercial banks maturing in December 2024. The Credit Agreement contains certain customary representations and warranties, certain customary affirmative covenants and certain customary negative covenants. Upon the occurrence of certain events of default, BHH LLC's obligations under the Credit Agreement may be accelerated. Such events of default include payment defaults to lenders under the Credit Agreement and other customary defaults. No such events of default have occurred. At September 30, 2021 and December 31, 2020, there were no borrowings under the Credit Agreement. In addition, we have a commercial paper program under which we may issue from time to time commercial paper with maturities of no more than 397 days. As a result of the repayment of our commercial paper that matured on April 30, 2021, our authorized commercial paper program was reduced from $3.8 billion to $3 billion.
Baker Hughes Co-Obligor, Inc. is a co-obligor, jointly and severally with BHH LLC on our long-term debt securities.  This co-obligor is a 100%-owned finance subsidiary of 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 September 30, 2021, Baker Hughes Co-Obligor, Inc. is a co-obligor of our long-term debt securities totaling $6,638 million.
Certain Senior Notes contain covenants that restrict BHH LLC's 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 certain merger, consolidation and asset sale transactions in excess of specified limits. At September 30, 2021, we were in compliance with all debt covenants.
See "Note 15. Related Party Transactions" for additional information on the short-term borrowings from GE.
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 12



Baker Hughes Holdings LLC
Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 10. EMPLOYEE BENEFIT PLANS
We have both funded and unfunded defined benefit plans which include four U.S. plans and seven 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, and generally provide benefits to employees based on formulas recognizing length of service and earnings.
The components of net periodic cost are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Service cost$7 $7 $21 $21 
Interest cost15 19 47 59 
Expected return on plan assets(32)(31)(95)(93)
Amortization of net actuarial loss10 9 30 25 
Curtailment/settlement & other loss1 3 1 3 
Net periodic cost$1 $7 $4 $15 
The service cost component of the net periodic cost is included in operating income (loss) and all other components are included in non-operating income (loss) in our condensed consolidated statements of income (loss).
NOTE 11. INCOME TAXES
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 provision for income taxes. For the three and nine months ended September 30, 2021, the provision for income taxes was $189 million and $422 million, respectively. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily related to losses with no tax benefit due to valuation allowances and changes in unrecognized tax benefits related to uncertain tax positions.
For the three months ended September 30, 2020, the provision for income taxes was $47 million. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily related to losses with no tax benefit due to valuation allowances.
For the nine months ended September 30, 2020, the provision for income taxes was $110 million. The difference between the U.S. statutory tax rate of 21% and the effective tax rate is primarily related to non-deductible goodwill impairment, the geographical mix of earnings and losses, and losses with no tax benefit due to valuation allowances.
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 13



Baker Hughes Holdings LLC
Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 12. MEMBERS' EQUITY
COMMON UNITS
The BHH LLC Agreement provides that initially there is one class of common units (Units), which are currently held by the Members. If 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 Unit to Baker Hughes or one of its direct subsidiaries. For the nine months ended September 30, 2021 and 2020 we issued 7,204 thousand and 6,721 thousand Units, respectively, to Baker Hughes or one of its direct subsidiaries in connection with the issuance of its Class A common stock. The Members are entitled through their Units to receive distributions on an equal amount of any dividend paid by Baker Hughes to its Class A shareholders.
During the nine months ended September 30, 2021, GE's economic interest in us was reduced to approximately 17.2% primarily as a result of the exchange of 132.7 million shares of Class B common stock, and associated Units. When shares of Class B common stock, together with associated Units, are exchanged for shares of Class A common stock pursuant to the Exchange Agreement, such shares of Class B common stock, together with associated Units, are canceled.
On July 30, 2021, our Board of Directors authorized us to repurchase up to $2 billion of our Units. We expect to fund the repurchase program from cash generated from operations, and we expect to make Unit repurchases from time to time subject to the Company's capital plan, market conditions, and other factors, including regulatory restrictions. The repurchase program may be suspended or discontinued at any time and does not have a specified expiration date. During the three months ended September 30, 2021, we repurchased and canceled 4.4 million Units for a total of $106 million. At September 30, 2021, we had authorization remaining to repurchase up to approximately $1.9 billion of our Units.
The following table presents the changes in the number of Units outstanding (in thousands):
Common Units Held by Baker HughesCommon Units Held by GE
2021202020212020
Balance at January 1723,999 650,065 311,433 377,428 
Issue of Units to Baker Hughes under equity incentive plan7,204 6,721   
Exchange of Units132,706 27,988 (132,706)(27,988)
Repurchase and cancellation of Units(4,430)   
Balance at September 30859,480 684,775 178,726 349,440 
ACCUMULATED OTHER COMPREHENSIVE LOSS (AOCL)
The following tables present the changes in accumulated other comprehensive loss, net of tax:
Investment SecuritiesForeign Currency Translation AdjustmentsCash Flow HedgesBenefit PlansAccumulated Other Comprehensive Loss
Balance at December 31, 2020$ $(2,096)$5 $(451)$(2,542)
   Other comprehensive income (loss) before reclassifications
 (82)(6)47 (41)
   Amounts reclassified from accumulated other comprehensive income (loss)
 31 (7)32 56 
   Deferred taxes   (1)(1)
Other comprehensive income (loss) (51)(13)78 14 
Less: Other comprehensive loss attributable to noncontrolling interests (1)  (1)
Balance at September 30, 2021$ $(2,146)$(8)$(373)$(2,527)
Baker Hughes Holdings LLC 2021 Third Quarter Form 10-Q | 14



Baker Hughes Holdings LLC
Notes to Unaudited Condensed Consolidated Financial Statements

Investment SecuritiesForeign Currency Translation AdjustmentsCash Flow HedgesBenefit PlansAccumulated Other Comprehensive Loss
Balance at December 31, 2019$2 $(2,274)$10 $(327)$(2,589)
   Other comprehensive loss before reclassifications(2)(101)(5)(