Company: BKR
Filing Date: 2025-10-24
Form Type: 10-Q
Source: 0001701605-25-000117
Chunk: 80

Company: Baker Hughes Co
Filing Date: 2025-10-24
Form: 10-Q
Item: Part I, Item 8
Chunk 80
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, respectively, to third-party financial institutions. The CDS relate to borrowings provided by these financial institutions to a customer in Mexico who utilized these borrowings to pay certain of the Company's outstanding receivables. The total notional amount remaining on the issued CDS was $377 million and $412 million as of September 30, 2025 and December 31, 2024, respectively, which will reduce each month through September 2026 as the customer repays the borrowings. As of September 30, 2025, the fair value of these derivative liabilities is not material.FORMS OF HEDGINGCash Flow HedgesThe Company uses cash flow hedging primarily to mitigate the effects of foreign exchange rate changes on purchase and sale contracts. Accordingly, the vast majority of derivative activity in this category consists of currency exchange contracts. In addition, the Company is exposed to interest rate risk fluctuations in connection with long-term debt that it issues from time to time to fund its operations. Changes in the fair value of cash flow hedges are recorded in a separate component of equity (referred to as "Accumulated Other Comprehensive Income" or "AOCI") and are recorded in earnings in the period in which the hedged transaction occurs. See "Note 10. Equity" for further information on activity in AOCI for cash flow hedges. As of September 30, 2025 and December 31, 2024, the maximum term of cash flow hedges that hedge forecasted transactions was approximately two years and one year, respectively.At September 30, 2025, the Company had outstanding interest rate swap contracts designated as cash flow hedges with a notional amount of $2,500 million in order to hedge a portion of the Company's expected exposure in connection with future debt financing activities related to the acquisition of Chart, expected to take place in 2026. As of September 30, 2025, the fair value of these interest rate swap contracts is $(77) million.Fair Value HedgesAll of the Company's long-term debt is comprised of fixed rate instruments. The Company is subject to interest rate risk on its debt portfolio and may use interest rate swaps to manage the economic effect of fixed rate obligations associated with certain debt. Under these arrangements, the Company agrees to exchange, at specified 

Baker Hughes Company 2025 Third Quarter Form 10-Q | 17

Baker Hughes CompanyNotes to Unaudited Condensed Consolidated Financial Statements

intervals, the difference