Company: BKR
Filing Date: 2025-07-23
Form Type: 10-Q
Source: 0001701605-25-000107
Chunk: 72

Company: Baker Hughes Co
Filing Date: 2025-07-23
Form: 10-Q
Item: Part I, Item 8
Chunk 72
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 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 intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount.As of June 30, 2025 and December 31, 2024, the Company had interest rate swaps with a notional amount of $500 million that converted a portion of its $1,350 million aggregate principal amount of 3.337% fixed rate Senior Notes due 2027 into a floating rate instrument with an interest rate based on a Secured Overnight Financing Rate 

Baker Hughes Company 2025 Second Quarter Form 10-Q | 16

Baker Hughes CompanyNotes to Unaudited Condensed Consolidated Financial Statements

index. The Company concluded that the interest rate swap met the criteria necessary to qualify for hedge accounting, and as such, the changes in this fair value hedge are recorded as gains or losses in interest expense and are equally offset by the gains or losses of the underlying debt instrument, which are also recorded in interest expense.NOTIONAL AMOUNT OF DERIVATIVESThe notional amount of a derivative is used to determine, along with the other terms of the derivative, the amounts to be exchanged between the counterparties. The Company discloses the derivative notional amounts on a gross basis to indicate the total counterparty risk but it does not generally represent amounts exchanged by the Company and the counterparties. A substantial majority of the outstanding notional amount of $4.0 billion at June 30, 2025 and December 31, 2024 is related to hedges of anticipated sales and purchases in foreign currency, commodity purchases, changes in interest rates, and contractual terms in contracts that are considered embedded derivatives and for intercompany borrowings in foreign currencies.COUNTERPARTY CREDIT RISKFair values of the Company's derivatives can change significantly from period to period based on, among other factors, market movements and changes in the Company's positions. The Company manages counterparty credit risk (the risk that counterparties will default and not make payments according to the terms of the agreements) on an individual counterparty basis.

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

Baker Hughes CompanyNotes to Unaudited Condensed Consolidated Financial Statements

NOTE 13. REVENUE RELATED TO CONTRACTS WITH CUSTOMERS

DISAGGREGATED REVENUEThe