Company: BKR
Filing Date: 2025-07-23
Form Type: 10-Q
Source: 0001701605-25-000107
Chunk: 71

Company: Baker Hughes Co
Filing Date: 2025-07-23
Form: 10-Q
Item: Part I, Item 8
Chunk 71
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 financial position depending on their respective maturity date. As of June 30, 2025 and December 31, 2024, $16 million and $9 million of derivative assets are recorded in "All other current assets" and $1 million and $3 million are recorded in "All other assets" in the condensed consolidated statements of financial position, respectively. As of June 30, 2025 and December 31, 2024, $12 million and $16 million of derivative liabilities are recorded in "All other current liabilities" and $32 million and $50 million are recorded in "All other liabilities" in the condensed consolidated statements of financial position, respectively.As of June 30, 2025 and December 31, 2024, the Company had issued credit default swaps ("CDS") totaling $775 million and $553 million, 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 $466 million and $412 million as of June 30, 2025 and December 31, 2024, respectively, which will reduce each month through September 2026 as the customer repays the borrowings. As of June 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 June 30, 2025 and December 31, 2024, the maximum term of cash flow hedges that hedge forecasted transactions was approximately one year.Fair Value HedgesAll of the Company's long-term debt is comprised of fixed rate instruments. The Company is subject to interest rate risk