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Form 10-Q GENERAL ELECTRIC CO For: Mar 31

April 23, 2024 6:25 AM
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 001-00035
Aerospace.jpg
GENERAL ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
New York
14-0689340
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1 Neumann WayEvendaleOH45215
(Address of principal executive offices)(Zip Code)
(Registrant’s telephone number, including area code) (617) 443-3000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, par value $0.01 per share
GE
New York Stock Exchange
0.875% Notes due 2025
GE 25
New York Stock Exchange
1.875% Notes due 2027
GE 27E
New York Stock Exchange
1.500% Notes due 2029
GE 29
New York Stock Exchange
7 1/2% Guaranteed Subordinated Notes due 2035
GE /35
New York Stock Exchange
2.125% Notes due 2037
GE 37
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 þ 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 þ 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 filer
Accelerated filer 
Non-accelerated filer 
Smaller 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 
There were 1,094,606,676 shares of common stock with a par value of $0.01 per share outstanding at March 31, 2024.




TABLE OF CONTENTS
Page
Note 24 Subsequent Event




FORWARD-LOOKING STATEMENTS. Our public communications and SEC filings may contain statements related to future, not past, events. These forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "estimate," "forecast," "target," "preliminary," or "range." Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the impacts of macroeconomic and market conditions and volatility on our business operations, financial results and financial position and on the global supply chain and world economy; our expected financial performance, including cash flows, revenues, organic growth, margins, earnings and earnings per share; planned and potential transactions; our credit ratings and outlooks; our funding and liquidity; our businesses’ cost structures and plans to reduce costs; restructuring, impairment or other financial charges; or tax rates.

For us, particular areas where risks or uncertainties could cause our actual results to be materially different than those expressed in our forward-looking statements include:

changes in macroeconomic and market conditions and market volatility, including risk of recession, inflation, supply chain constraints or disruptions, interest rates, the value of securities and other financial assets, oil, natural gas and other commodity prices and exchange rates, and the impact of such changes and volatility on our business operations and financial results;
global economic trends, competition and geopolitical risks, including impacts from the ongoing conflict between Russia and Ukraine and related sanctions and risks related to conflict in the Middle East, demand or supply shocks from events such as a major terrorist attack, war, natural disasters or actual or threatened public health pandemics or other emergencies, or an escalation of sanctions, tariffs or other trade tensions between the U.S. and China or other countries, and related impacts on our businesses' global supply chains and strategies;
market or other developments that may affect demand or the financial strength and performance of customers we serve, such as demand for air travel and other aerospace and defense sector dynamics; pricing, cost, volume and the timing of investment by customers or other industry participants; conditions in key geographic markets; technology developments; and other shifts in the competitive landscape for our products and services;
the impact of actual or potential safety or quality issues or failures of our products or third-party products with which our products are integrated, and related costs and reputational effects;
our capital allocation plans, including the timing and amount of dividends, share repurchases, acquisitions, organic investments, and other priorities;
our success in executing planned and potential transactions, including the timing for such transactions, the ability to satisfy any applicable pre-conditions, and the expected proceeds, consideration and benefits;
downgrades of our current short- and long-term credit ratings or ratings outlooks, or changes in rating application or methodology, and the related impact on our funding profile, costs, liquidity and competitive position;
the amount and timing of our cash flows and earnings, which may be impacted by macroeconomic, customer, supplier, competitive, contractual and other dynamics and conditions;
capital or liquidity needs associated with our run-off insurance operations and mortgage portfolio in Poland (Bank BPH), the amount and timing of any required future capital contributions and any strategic options that we may consider;
operational execution and improvements, including our performance amidst market growth and ramping newer product platforms;
changes in law, regulation or policy that may affect our businesses, such as trade policy and tariffs, government defense budgets, regulation and incentives related to climate change (including the impact of the Inflation Reduction Act and other policies), and the effects of tax law changes;
our decisions about investments in research and development or new products, services and platforms, and our ability to launch new products in a cost-effective manner;
the impact of regulation; investigations; regulatory, commercial and legal proceedings or disputes; environmental, health and safety matters; or other legal compliance risks, including the impact of shareholder and related lawsuits, Bank BPH and other proceedings;
the impact related to information technology, cybersecurity or data security breaches at GE Aerospace or third parties; and
the other factors that are described in the "Risk Factors" section in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, as such descriptions may be updated or amended in any future reports we file with the SEC.

These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.

1Q 2024 FORM 10-Q 3



ABOUT GENERAL ELECTRIC. On April 2, 2024, General Electric Company completed the previously announced separation of its GE Vernova business into an independent publicly traded company, GE Vernova, Inc. (GE Vernova). General Electric Company now operates as GE Aerospace (GE or the Company). GE Aerospace is a global aerospace propulsion, services, and systems leader with an installed base of approximately 44,000 commercial and 26,000 military aircraft engines. With a global team building on more than a century of innovation and learning, GE Aerospace is committed to inventing the future of flight, lifting people up, and bringing them home safely.

The separation was structured as a tax-free spin-off and was achieved through GE's pro-rata distribution of all of the outstanding shares of GE Vernova to holders of GE common stock. In connection with the separation, the historical results of our Power, Renewable Energy and Digital businesses and certain assets and liabilities included in the separation will be reported in our consolidated financial statements as discontinued operations beginning in the second quarter of 2024. Upon separation, the Company now operates through two reportable segments: Commercial Engines and Services and Defense and Propulsion Technologies. See Note 24 for further information.

Prior to the separation, GE operated worldwide through three segments; Aerospace, Renewable Energy and Power. For purposes of this report, which covers the quarterly period before the completion of the GE Vernova separation, we refer to these prior reporting segments as they existed during that period. The composition of these reporting segments is unchanged.

GE Aerospace’s Internet address at www.geaerospace.com and Investor Relations website at www.geaerospace.com/investor-relations, as well as GE Aerospace’s LinkedIn and other social media accounts, contain a significant amount of information about GE Aerospace, including financial and other information for investors. GE Aerospace encourages investors to visit these websites from time to time, as information is updated and new information is posted.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A). Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP). Unless otherwise noted, tables are presented in U.S. dollars in millions. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented in this report are calculated from the underlying numbers in millions. Discussions throughout this MD&A are based on continuing operations unless otherwise noted. The MD&A should be read in conjunction with the Financial Statements and Notes to the consolidated financial statements.

In the accompanying analysis of financial information, we sometimes use information derived from consolidated financial data but not presented in our financial statements prepared in accordance with GAAP. Certain of these data are considered “non-GAAP financial measures” under SEC rules. See the Non-GAAP Financial Measures section for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures.

CONSOLIDATED RESULTS
FIRST QUARTER 2024 RESULTS. Total revenues were $16.1 billion, up $1.6 billion for the quarter, driven by increases at all segments and Corporate.

Continuing earnings (loss) per share was $1.38. Excluding the results from our run-off Insurance operations, non-operating benefit income, gains (losses) on purchases and sales of business interests, gains (losses) on equity securities, restructuring costs and separation costs, Adjusted earnings per share* was $0.82. For the three months ended March 31, 2024, profit margin was 11.6% and profit was down $4.6 billion, primarily due to a decrease in gains on retained and sold ownership interests of $5.3 billion, primarily related to our GE HealthCare Technologies Inc. (GE HealthCare) equity position, and an increase in separation costs of $0.2 billion. These decreases were partially offset by an increase in segment profit of $0.5 billion, the nonrecurrence of preferred stock dividends of $0.1 billion, an increase in Adjusted total corporate operating profit* of $0.1 billion and an increase in Insurance profit of $0.1 billion. Adjusted organic profit* increased $0.6 billion, driven primarily by increases at all segments and higher Adjusted total Corporate operating profit*.

Cash flows from operating activities (CFOA) were $1.0 billion and $0.2 billion for the three months ended March 31, 2024 and 2023, respectively. CFOA increased primarily due to an increase in net income (after adjusting for depreciation of property, plant, and equipment, amortization of intangible assets and non-cash (gains) losses related to our retained and sold ownership interests in GE HealthCare, AerCap and Baker Hughes) and an increase in cash received in working capital, partially offset by a decrease in All other operating activities. Free cash flows* (FCF) were $0.9 billion and $0.1 billion for the three months ended March 31, 2024 and 2023, respectively. FCF* increased primarily due to the same reasons as noted for CFOA above. See the Capital Resources and Liquidity - Statement of Cash Flows section for further information.








*Non-GAAP Financial Measure
2024 1Q FORM 10-Q 4


Remaining performance obligation (RPO) includes unfilled customer orders for equipment, excluding any purchase order that provides the customer with the ability to cancel or terminate without incurring a substantive penalty. Services RPO includes the estimated life of contract sales related to long-term service agreements which remain unsatisfied at the end of the reporting period, the estimated amount of unsatisfied performance obligations for time and material agreements, material services agreements, spare parts under purchase order, multi-year maintenance programs and other services agreements, excluding any order that provides the customer with the ability to cancel or terminate without incurring a substantive penalty. See Note 8 for further information.

RPOMarch 31, 2024December 31, 2023
Equipment$57,775 $54,675 
Services208,095 212,558 
Total RPO$265,870 $267,233 

As of March 31, 2024, RPO decreased $1.4 billion (1%) from December 31, 2023, primarily at Aerospace, due to sales recognized in the period and changes in estimated contract sales for long-term services agreements; partially offset by increases at Renewable Energy, from new orders at Grid Solutions outpacing revenue; and at Power, driven by increases in Gas Power Heavy-Duty Gas Turbine and Aeroderivative orders outpacing revenue.

REVENUESThree months ended March 31
20242023
Equipment revenues$5,935 $5,287 
Services revenues9,239 8,407 
Insurance revenues879 791 
Total revenues$16,053 $14,486 

For the three months ended March 31, 2024, total revenues increased $1.6 billion (11%). Equipment revenues increased, primarily at Aerospace, due to higher prices and product mix; at Renewable Energy, due to higher equipment revenues at Grid Solutions and Offshore Wind; and at Power, due to increases at Gas Power and Power Conversion. Services revenues increased, primarily at Aerospace, due to increased commercial spare part shipments, heavier work scopes and higher prices; and at Power, due to higher outages and favorable price.
Excluding the change in Insurance revenues, the net effects of acquisitions, dispositions and foreign currency, organic revenues* increased $1.4 billion (10%), with equipment revenues up $0.6 billion (11%) and services revenues up $0.8 billion (10%). Organic revenues* increased at Aerospace, Power and Renewable Energy.

EARNINGS (LOSS) AND EARNINGS (LOSS) PER SHAREThree months ended March 31
(Per-share in dollars and diluted)
20242023
Continuing earnings (loss) attributable to GE common shareholders$1,522 $6,103 
Continuing earnings (loss) per share$1.38 $5.56 

For the three months ended March 31, 2024, continuing earnings decreased $4.6 billion, primarily due to a decrease in gains on retained and sold ownership interests of $5.3 billion, primarily related to our GE HealthCare equity position, and an increase in separation costs of $0.2 billion. These decreases were partially offset by an increase in segment profit of $0.5 billion, an increase in Adjusted total corporate operating profit* of $0.1 billion and an increase in Insurance profit of $0.1 billion. Adjusted earnings* were $0.9 billion, an increase of $0.6 billion. Profit margin was 11.6%, a decrease from 44.8%. Adjusted profit* was $1.5 billion, an increase of $0.6 billion organically*, due to increases at Aerospace, Renewable Energy and Power. Adjusted profit margin* was 10.2%, an increase of 300 basis points organically*.

We continue to experience inflation pressure in our supply chain, as well as delays in sourcing key materials needed for our products. This has delayed our ability to convert RPO to revenue. While we expect the impact of inflation to continue to be challenging, we have taken and continue to take actions to limit this pressure, including lean initiatives to drive cost productivity, partnering with our suppliers and adjusting the pricing of our products and services. Also, because we operate in many countries around the world, we are subject to complex global geopolitical forces.











*Non-GAAP Financial Measure
1Q 2024 FORM 10-Q 5


SEGMENT OPERATIONS. Refer to our Annual Report on Form 10-K for the year ended December 31, 2023, for further information regarding our determination of segment profit for continuing operations, and for our allocations of corporate costs to our segments.

Three months ended March 31
SUMMARY OF REPORTABLE SEGMENTS20242023V%
Aerospace$8,064 $6,981 16 %
Renewable Energy3,005 2,837 6 %
Power4,134 3,820 8 %
Total segment revenues15,203 13,638 11 %
Corporate850 848  %
Total revenues$16,053 $14,486 11 %
Aerospace$1,529 $1,326 15 %
Renewable Energy(226)(414)45 %
Power229 75 F
Total segment profit (loss)1,532 987 55 %
Corporate(a)276 5,456 (95)%
Interest and other financial charges(267)(257)(4)%
Non-operating benefit income (cost)362 385 (6)%
Benefit (provision) for income taxes(380)(322)(18)%
Preferred stock dividends (145)F
Earnings (loss) from continuing operations attributable to GE common shareholders
1,522 6,103 (75)%
Earnings (loss) from discontinued operations attributable to GE common shareholders14 1,257 (99)%
Net earnings (loss) attributable to GE common shareholders
$1,537 $7,360 (79)%
(a) Includes interest and other financial charges of $10 million and $12 million; and benefit for income taxes of $62 million and $51 million related to Energy Financial Services (EFS) within Corporate for the three months ended March 31, 2024 and 2023 respectively.

GE AEROSPACE. Our results in the first quarter of 2024 reflect strong demand for commercial air travel and continued strength in services, which represents 70% of Aerospace’s revenue. A key underlying driver of our commercial engine and services business is global commercial departures, which grew 11% during the first quarter of 2024 compared to the first quarter of 2023, with strong departures in China. The air traffic growth trends vary by region given economic conditions, airline competition and government regulations. We now estimate departures growth to be to high-single digits in 2024, given first quarter growth and improving freight departures. We are in frequent dialogue with our airline, airframe, and maintenance, repair and overhaul customers about the outlook for commercial air travel, new aircraft production, fleet retirements, and after-market services, including shop visit and spare parts demand.

As it relates to the defense environment, we continue to forecast strong demand creating future growth opportunities. The U.S. Department of Defense and foreign governments have continued flight operations and have allocated budgets to upgrade and modernize their existing fleets, including support for next generation large-combat engine architecture such as Aerospace’s XA100 program.

We increased our total engine unit sales in the first quarter of 2024 compared to the first quarter of 2023. However, global material availability and supplier delivery performance continue to cause disruptions for our suppliers and for us, and have impacted our production and delivery. We continue to partner with our customers on future production rates. We are investing in both our manufacturing facilities and our supply chain to increase production and strengthen quality to better support our customers in the long-term. Aerospace is proactively managing the impact of inflationary pressure by deploying FLIGHT DECK to drive cost productivity, partnering with our suppliers and adjusting the pricing of our products and services. We expect the impact of inflation will continue, and we are taking actions to mitigate the impact.

Total engineering, comprising company, customer and partner-funded and nonrecurring engineering costs, increased compared to the prior year. We remain committed to investing in developing and maturing technologies that enable a more sustainable future of flight.
Notably, CFM International's Revolutionary Innovation for Sustainable Engines (RISE) program represents our single largest efficiency step change, aiming to reduce fuel consumption and CO2 emissions by at least 20% compared to today’s most efficient engines.

We continue to take actions to serve our customers as demand in the global airline industry increases. Aerospace has a deep history of innovation and technology leadership. Our commercial and defense engine installed base, including units produced by joint ventures, of approximately 70,000 units, with approximately 12,700 units under long-term service agreements, supports recurring, profitable services growth for the future. We believe these strong fundamentals position Aerospace to generate long-term profitable growth and higher cash flow over time.

2024 1Q FORM 10-Q 6


Sales in unitsThree months ended March 31
20242023
Commercial Engines489 481 
LEAP Engines(a)367 366 
Defense Engines125 80 
(a) LEAP engines are subsets of commercial engines.

RPOMarch 31, 2024December 31, 2023
Equipment$18,438 $16,247 
Services134,258 137,611 
Total RPO$152,697 $153,858 

RPO as of March 31, 2024 decreased $1.2 billion (1%) from December 31, 2023, due to a decrease in services, partially offset by an increase in equipment. Services decreased primarily due to sales recognized in the period and changes in estimated contract sales for long-term services agreements. Equipment increased primarily due to an increase in both Commercial and Defense equipment orders since December 31, 2023.

SEGMENT REVENUES AND PROFITThree months ended March 31
20242023
Commercial Engines and Services$6,064 $5,194 
Defense and Propulsion Technologies2,301 1,961 
Eliminations & Other(301)(173)
Total segment revenues(a)$8,064 $6,981 
Equipment$2,421 $1,974 
Services5,643 5,007 
Total segment revenues$8,064 $6,981 
Segment profit$1,529 $1,326 
Segment profit margin19.0 %19.0 %
(a) Does not give effect to post-GE Vernova separation eliminations and Corporate adjustments.

For the three months ended March 31, 2024, segment revenues were up $1.1 billion (16%) and segment profit was up $0.2 billion (15%).
Revenues increased $1.1 billion (15%) organically*. Commercial Engines and Services revenue increased, primarily due to higher prices, increased commercial spare part shipments, higher services work scopes and favorable widebody engine mix. These increases were partially offset by an unfavorable change in estimated profitability of our long-term service agreements of $0.2 billion. Defense and Propulsion Technologies revenues increased, primarily due to 45 more Defense engine unit sales than the prior year and growth in classified development programs and services revenue, partially offset by Defense engine mix.
Profit increased $0.2 billion (16%) organically*, primarily due to benefits from higher prices and increased commercial spare part shipments. These increases in profit were partially offset by an unfavorable change in estimated profitability of our long-term service agreements of $0.2 billion, additional growth investment and inflation in our supply chain.

RENEWABLE ENERGY – part of GE Vernova. During the three months ended March 31, 2024, the segment experienced higher orders and revenue from increased demand at Grid Solutions. The Onshore and Offshore Wind businesses continue the effort of simplifying the portfolio of product offerings, focusing on fewer and more reliable workhorse products. Workhorse products, which include our 2.8-127m, 3.6-154m, and 6.1-158m onshore units, and our Haliade-250m offshore units, account for approximately 70% of our equipment RPO in Onshore Wind and Offshore Wind, of which Onshore Wind and Offshore Wind make up approximately 70% and 30%, respectively. Included in our RPO at March 31, 2024 are services agreements on approximately 25,000 of our onshore wind turbines, from an installed base of approximately 56,000 units.

At Onshore Wind, we are focused on improving our overall quality and fleet availability. We are reducing product variants and deploying repairs and other corrective measures across the fleet. Concurrently, we intend to operate in fewer geographies and focus on those markets that align better with our products and manufacturing footprint. We are realizing the favorable impact of the Inflation Reduction Act of 2022 (IRA) through a reduction in product costs as qualifying turbines manufactured in the U.S. are delivered. The IRA introduces new, and extends existing, tax incentives for at least 10 years and is expected to significantly increase near- and longer-term demand in the United States for onshore and offshore wind projects. More than 70% of Onshore Wind’s equipment RPO is associated with U.S. projects where we expect to receive IRA benefits as incremental qualifying turbines are delivered. Finally, we are continuing our restructuring program to reduce our operating costs and are seeing the benefits both operationally and financially.




*Non-GAAP Financial Measure
1Q 2024 FORM 10-Q 7


The Offshore Wind industry, where we expect global growth through the coming decades, currently faces challenges as companies attempt to increase output and reduce cost. In our Offshore Wind business, we continue to experience pressure related to our product and project costs as we deliver out the existing backlog. Although we are deploying countermeasures to combat these pressures and are committed to driving productivity and cost improvement for our new larger turbines, changes in execution timelines or other adverse developments likely could have an adverse effect on our cash collection timelines and contract profitability, and could result in further losses beyond the amounts that we currently estimate.

Our Grid Solutions business is positioned to support grid expansion and modernization needs globally. We secured a position in the rapidly growing offshore interconnection market with new products and technology supporting a 2 GW HVDC solution standard and are developing new technology, such as Grid-forming Static Synchronous Compensators and SF6-free switchgears, that solves for a denser, more resilient, stable and efficient electric grid; a grid with lower future greenhouse gas emissions. We also benefited from higher growth in orders from other transmission and grid automation related products within our Grid Solutions business.

Sales in units, except where notedThree months ended March 31
20242023
Wind Turbines252 405 
Wind Turbine Gigawatts1.1 1.5 
Repower units— 50 

RPOMarch 31, 2024December 31, 2023
Equipment$28,480 $27,703 
Services14,966 15,082 
Total RPO$43,446 $42,785 

RPO as of March 31, 2024 increased $0.7 billion (2%) from December 31, 2023 primarily at Grid Solutions due to orders outpacing revenue, partially offset by decreases at Offshore Wind and Onshore Wind.

SEGMENT REVENUES AND PROFITThree months ended March 31
20242023
Onshore Wind$1,198 $1,502 
Grid Solutions equipment and services1,085 824 
Hydro, Offshore Wind and Hybrid Solutions
722 511 
Total segment revenues$3,005 $2,837 
Equipment$2,458 $2,311 
Services547 527 
Total segment revenues$3,005 $2,837 
Segment profit (loss)$(226)$(414)
Segment profit margin(7.5)%(14.6)%

For the three months ended March 31, 2024, segment revenues were up $0.2 billion (6%) and segment losses were down $0.2 billion (45%).
Revenues increased $0.1 billion (4%) organically*, primarily from higher equipment revenue at Offshore Wind as we continue to execute on our remaining performance obligation and increases at Grid Solutions, led by equipment. These increases were partially offset by Onshore Wind, as fewer units were delivered in the period.
Segment losses decreased $0.2 billion (44%) organically*, primarily due to Onshore Wind through improved pricing and the impact of cost reduction activities. Additionally, Grid Solutions profit increased due to higher volume, improved pricing and productivity.

POWER – part of GE Vernova. We believe gas power will play a critical role in the energy transition by providing a critical foundation of reliable and dispatchable power. Although market factors related to the energy transition, such as greater renewable energy penetration and the adoption of climate change-related policies continue to evolve, we expect the gas power market to remain stable over the next decade with gas power generation continuing to grow low single digits. We remain focused on our underwriting discipline and risk management to ensure we are securing deals that meet our financial hurdles, where we have high confidence in delivering for our customers.

During the three months ended March 31, 2024, GE gas turbine utilization was up low single digits, with strength in the U.S. from overall demand increase, partially offset by lower utilization in Europe due to continued nuclear and hydro recoveries as well as new renewables capacity growth. Global electricity demand was up low-single digits.





*Non-GAAP Financial Measure
2024 1Q FORM 10-Q 8


As we continue to work in emerging markets, there could be uncertainty in the timing of deal closures due to financing and other complexities. Power has proactively managed the impact of inflationary pressure by deploying lean initiatives to drive cost productivity measures, partnering with our suppliers and adjusting the pricing of our products and services. Given the long-cycle nature of the business, we expect the impact of inflation will continue to be challenging and we will continue to take actions to manage.

In the first quarter of 2022, we signed a non-binding memorandum of understanding for GE Steam Power to sell a part of its nuclear activities to Electricité de France S.A. (EDF), which resulted in a reclassification of that business to held for sale. In the fourth quarter of 2022, we signed a binding agreement to sell a portion of our Steam business to EDF. We are working with EDF to complete the sale as soon as possible, subject to regulatory approvals and other closing conditions. In the second quarter of 2023, our Gas Power business acquired Nexus Controls, a business specializing in aftermarket control system upgrades and controls field services that is expected to strengthen our quality, service, and delivery of our customers' assets.

We continue to invest in new product development. In Nuclear, we have signed an agreement with a customer for the deployment of small modular nuclear reactor technology, the first commercial contract in North America, with the potential to enable reductions in nuclear power plant costs and cycle times. In Gas Power, we continue to invest for the long-term, including decarbonization pathways that will provide customers with cleaner, more reliable power. Our fundamentals remain strong with approximately $71.8 billion in RPO and a gas turbine installed base of approximately 7,000 units with approximately 1,700 units under long-term service agreements with an average remaining contract life of approximately 10 years. This includes 29 HA-Turbines in RPO and 94 HA-Turbines in the installed base with over two million operating hours.

Sales in unitsThree months ended March 31
20242023
GE Gas Turbines17 23 
Heavy-Duty Gas Turbines(a)10 18 
HA-Turbines(b)
Aeroderivatives(a)
(a) Heavy-Duty Gas Turbines and Aeroderivatives are subsets of GE Gas Turbines.
(b) HA-Turbines are a subset of Heavy-Duty Gas Turbines.
RPOMarch 31, 2024December 31, 2023
Equipment$13,178 $12,256 
Services58,626 59,462 
Total RPO$71,803 $71,718 
RPO as of March 31, 2024 increased $0.1 billion from December 31, 2023, primarily due to increases in Gas Power Heavy-Duty Gas Turbine and Aeroderivative equipment orders outpacing revenue, partially offset by decreases in Gas Power services and Steam Power equipment.

SEGMENT REVENUES AND PROFITThree months ended March 31
20242023
Gas Power$3,068 $2,867 
Steam Power584 541 
Power Conversion, Nuclear and other483 412 
Total segment revenues$4,134 $3,820 
Equipment$1,185 $1,102 
Services2,949 2,718 
Total segment revenues$4,134 $3,820 
Segment profit (loss)$229 $75 
Segment profit margin5.5 %2.0 %

For the three months ended March 31, 2024, segment revenues were up $0.3 billion (8%) and segment profit was up $0.2 billion.
Revenues increased $0.3 billion (7%) organically*, primarily due to an increase in Gas Power services from higher outages and favorable price.
Profit increased $0.1 billion organically* primarily due to an increase in Gas Power services where volume, price and productivity more than offset the impact of inflation.

CORPORATE. The Corporate amounts related to revenues and earnings include the results of disposed businesses, certain amounts not included in operating segment results because they are excluded from measurement of their operating performance for internal and external purposes and the elimination of intersegment activities. In addition, the Corporate amounts related to earnings include certain costs of our principal retirement plans, significant, higher-cost restructuring programs, separation costs, and other costs reported in Corporate.

*Non-GAAP Financial Measure
1Q 2024 FORM 10-Q 9


Corporate includes the results of the GE Digital business, which is part of GE Vernova, and our run-off Insurance operations (see Note 13 for further information).

REVENUES AND OPERATING PROFIT (COST)Three months ended March 31
20242023
GE Digital revenues$209 $237 
Insurance revenues (Note 13)879 791 
Eliminations and other(237)(181)
Total Corporate revenues$850 $848 
Gains (losses) on retained and sold ownership interests (Note 19)$628 $5,908 
Gains (losses) on other equity securities(2)
Gains (losses) on purchases and sales of business interests(55)
Restructuring and other charges (Note 20)(218)(151)
Separation costs (Note 20)(355)(205)
Insurance profit (loss) (Note 13)200 70 
Adjusted total Corporate operating profit (costs) (Non-GAAP)10 (109)
Total Corporate operating profit (cost) (GAAP)$276 $5,456 
Less: gains (losses), impairments, Insurance, and restructuring & other266 5,565 
Adjusted total Corporate operating profit (costs) (Non-GAAP)$10 $(109)
Functions & operations$(74)$(145)
Environmental, health and safety (EHS) and other items81 30 
Eliminations
Adjusted total Corporate operating profit (costs) (Non-GAAP)$10 $(109)

Adjusted total corporate operating profit (costs)* excludes gains (losses) on purchases and sales of business interests, significant, higher-cost restructuring programs, separation costs, gains (losses) on equity securities, and our run-off Insurance operations profit. We believe that adjusting corporate costs to exclude the effects of items that are not closely associated with ongoing corporate operations provides management and investors with a meaningful measure that increases the period-to-period comparability of our ongoing corporate costs.

For the three months ended March 31, 2024, revenues remained relatively flat due to higher revenue in our run-off Insurance operations offset by higher intersegment eliminations. Corporate operating profit decreased by $5.2 billion due to $5.3 billion of lower gains on retained and sold ownership interests, primarily related to our GE HealthCare investment, partially offset by the nonrecurrence of a prior year loss on our AerCap investment. In addition, Corporate operating profit decreased as the result of $0.2 billion of higher separation costs and $0.1 billion of higher restructuring and other charges.
Adjusted total corporate operating profit* increased by $0.1 billion driven by favorability in functions and operations due to lower functional costs and favorability in EHS and other items as a result of higher bank interest, partially offset by higher EHS costs.

OTHER CONSOLIDATED INFORMATION
RESTRUCTURING AND SEPARATION COSTS. Significant, higher-cost restructuring programs are excluded from measurement of segment operating performance for internal and external purposes; those excluded amounts are reported in Restructuring and other charges for Corporate. In addition, we incur costs associated with separation activities, which are also excluded from measurement of segment operating performance for internal and external purposes. See Note 20 for further information on restructuring and separation costs.

INTEREST AND OTHER FINANCIAL CHARGES were $0.3 billion for both the three months ended March 31, 2024 and 2023. The primary components of interest and other financial charges are interest on short- and long-term borrowings.

POSTRETIREMENT BENEFIT PLANS. Refer to Note 14 for information about our pension and retiree benefit plans.

INCOME TAXES. For the three months ended March 31, 2024, the effective income tax rate was 17.0% compared to 4.2% for the three months ended March 31, 2023. See Note 16 for further information.

The provision for income taxes was $0.3 billion for both the three months ended March 31, 2024 and 2023. The insignificant change in the tax provision was primarily due to an increase in tax expense related to the increase in pre-tax income excluding gains and losses on our retained and sold ownership interests, offset by a decrease in tax expenses associated with separation activities.

For the three months ended March 31, 2024, the adjusted income tax rate* was 24.7% compared to 28.0% for the three months ended March 31, 2023. The adjusted provision (benefit) for income taxes* was $0.3 billion and $0.2 billion for the three months ended March 31, 2024 and 2023, respectively. The increase in the tax provision was primarily due to the tax effect of the increase in adjusted earnings before taxes*.

*Non-GAAP Financial Measure
2024 1Q FORM 10-Q 10


DISCONTINUED OPERATIONS primarily comprise our former GE HealthCare business, our mortgage portfolio in Poland (Bank BPH), and other trailing assets and liabilities associated with prior dispositions. Results of operations, financial position and cash flows for these businesses are reported as discontinued operations for all periods presented and the notes to the financial statements have been adjusted on a retrospective basis. See Note 2 for further information regarding our businesses in discontinued operations.

CAPITAL RESOURCES AND LIQUIDITY
FINANCIAL POLICY. GE Aerospace is committed to maintaining strong investment grade ratings with a disciplined capital allocation strategy. The Company will continue to invest in future growth and innovation through research and development and capital expenditures. We intend to return a majority of our free cash flow* to shareholders through dividends and share repurchases. Merger and acquisition investments will be pursued in a disciplined way and focused on those that offer strategic, operational and financial synergies.

LIQUIDITY POLICY. We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our business needs and financial obligations under both normal and stressed conditions. We believe that our consolidated liquidity and availability under our revolving credit facilities will be sufficient to meet our liquidity needs.

CONSOLIDATED LIQUIDITY. Our primary sources of liquidity consist of cash and cash equivalents, free cash flows* from our operating businesses, cash generated from asset sales and dispositions, and short-term borrowing facilities, including revolving credit facilities. Cash generation can be subject to variability based on many factors, including seasonality, receipt of down payments on large equipment orders, timing of billings on long-term contracts and timing of customer allowances and market conditions. Total cash, cash equivalents and restricted cash was $18.4 billion at March 31, 2024, of which $3.2 billion was held in the U.S. and $15.2 billion was held outside the U.S.

Cash held in non-U.S. entities has generally been reinvested in active foreign business operations; however, substantially all of our unrepatriated earnings were subject to U.S. federal tax and, if there is a change in reinvestment, we would expect to be able to repatriate available cash (excluding amounts held in countries with currency controls) without additional federal tax cost. Any foreign withholding tax on a repatriation to the U.S. may be at least partially offset by a U.S. foreign tax credit.

Cash, cash equivalents and restricted cash at March 31, 2024 included $1.5 billion of cash held in countries with currency control restrictions (including a total of $0.1 billion in Russia and Ukraine) and $0.4 billion of restricted use cash. Cash held in countries with currency controls represents amounts held in countries that may restrict the transfer of funds to the U.S. or limit our ability to transfer funds to the U.S. without incurring substantial costs. Restricted use cash represents amounts that are not available to fund operations, and primarily comprised funds restricted in connection with certain ongoing litigation matters. Excluded from cash, cash equivalents and restricted cash was $1.4 billion of cash in our run-off Insurance operations, which was classified as All other assets in the Statement of Financial Position.

As part of the spin-off of GE HealthCare completed in the first quarter of 2023, we retained an approximately 19.9% stake of GE HealthCare common stock. During the first quarter of 2024, we received total proceeds of $2.6 billion from the disposition of 31.1 million shares of GE HealthCare. As of March 31, 2024, our remaining interest in GE HealthCare of 30.5 million shares is subject to a contractual lock-up restriction through May 15, 2024. We intend to exit our remaining stake in GE HealthCare over time, in an orderly manner. See Notes 3 and 19 for further information.

Following approval of a statutory permitted accounting practice in 2018 by our primary insurance regulator, the Kansas Insurance Department (KID), we have since provided a total of $15.0 billion of capital contributions to our insurance subsidiaries, including the final contribution of $1.8 billion in the first quarter of 2024. See Note 13 for further information.

On March 6, 2022, the Board of Directors authorized to repurchase up to $3.0 billion of our common stock. In connection with this authorization, we repurchased 1.1 million shares for $0.1 billion during the first quarter of 2024 and 24.9 million shares for $2.2 billion life to date. On March 7, 2024, the Company announced that the Board of Directors had authorized the repurchase of up to $15.0 billion of our common stock, which replaces the Company's prior $3.0 billion share repurchase authorization.

On April 5, 2024, the Board of Directors declared a $0.28 per share dividend on the outstanding common stock of the Company, payable on April 25, 2024, to shareholders of record at close of business on April 15, 2024.

BORROWINGS. Consolidated total borrowings were $20.5 billion and $21.0 billion at March 31, 2024 and December 31, 2023, respectively, representing a decrease of $0.4 billion mainly due to maturities. We had in place a committed revolving unused syndicated credit facility of $10.0 billion at March 31, 2024. In April 2024, the Company replaced it with a five-year unsecured revolving credit facility in an aggregate committed amount of $3.0 billion.

CREDIT RATINGS AND CONDITIONS. We have relied, and may continue to rely, on the short- and long-term debt capital markets to fund, among other things, a significant portion of our operations. The cost and availability of debt financing is influenced by our credit ratings. Moody’s Investors Service (Moody’s), Standard and Poor’s Global Ratings (S&P), and Fitch Ratings (Fitch) currently issue ratings on our short- and long-term debt. Our credit ratings as of the date of this filing, which reflect GE Aerospace post the GE Vernova separation, are set forth in the following table.

*Non-GAAP Financial Measure
1Q 2024 FORM 10-Q 11


Moody'sS&PFitch
OutlookPositiveStableStable
Short termP-2A-2F1
Long termBaa1BBB+BBB+

We are disclosing our credit ratings and any current quarter updates to these ratings to enhance understanding of our sources of liquidity and the effects of our ratings on our costs of funds and access to liquidity. Our ratings may be subject to a revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. Prior to the spin-off of GE Vernova, rating agencies have reviewed our ratings. As a result, Moody's changed its outlook from stable to positive. Fitch changed its long term rating from BBB to BBB+. For a description of some of the potential consequences of a reduction in our credit ratings, see the Financial Risks section of Risk Factors.

Substantially all of the Company's debt agreements in place at March 31, 2024 do not contain material credit rating covenants. Our unused back-up revolving syndicated credit facility contains a customary net debt-to-EBITDA financial covenant, which we satisfied at March 31, 2024.

The Company may from time to time enter into agreements that contain minimum ratings requirements. The following table provides a summary of the maximum estimated liquidity impact in the event of further downgrades below each stated ratings level.

Triggers Below
March 31, 2024
BBB+/A-2/P-2$— 
BBB/A-3/P-338 
BBB- 1,128 
BB+ and below578 
Our most significant contractual ratings requirements are related to ordinary course commercial activities. The timing within the quarter of the potential liquidity impact of these areas may differ, as can the remedies to resolving any potential breaches of required ratings levels.

FOREIGN EXCHANGE AND INTEREST RATE RISK. As a result of our global operations, we generate and incur a significant portion of our revenues and expenses in currencies other than the U.S. dollar. Such principal currencies include the euro, the Chinese renminbi, the British pound sterling and the Indian rupee, among others. The effects of foreign currency fluctuations on earnings were less than $0.1 billion, for both the three months ended March 31, 2024 and 2023. See Note 21 for further information about our risk exposures, our use of derivatives, and the effects of this activity on our financial statements.

STATEMENT OF CASH FLOWS
CASH FLOWS FROM CONTINUING OPERATIONS. The most significant source of cash in CFOA is customer-related activities, the largest of which is collecting cash resulting from equipment or services sales. The most significant operating use of cash is to pay our suppliers, employees, tax authorities and postretirement plans.

Cash from operating activities was $1.0 billion in 2024, an increase of $0.9 billion compared to 2023, primarily due to: an increase in net income (after adjusting for depreciation of property, plant, and equipment, amortization of intangible assets and non-cash (gains) losses related to our retained and sold ownership interests in GE HealthCare, AerCap and Baker Hughes) driven by all segments, an increase in cash received from working capital, partially offset by a decrease in All other operating activities. The components of All other operating activities were as follows:
Three months ended March 3120242023
Increase (decrease) in employee benefit liabilities$153 $125 
Increase (decrease) in Aerospace-related customer allowance accruals(106)135 
Net interest and other financial charges/(cash paid)(26)(78)
Other deferred assets(150)71 
Net restructuring and other charges/(cash expenditures)(29)(1)
Other(139)(123)
All other operating activities$(297)$128 

The net increase in cash received from changes in working capital of $0.6 billion compared to prior year were as follows: current receivables of $(0.3) billion, driven by higher volume partially offset by higher collections; inventories, including deferred inventory, of $0.1 billion, driven by lower material purchases partially offset by lower liquidations; current contract assets of $(0.4) billion, driven by higher revenue recognition partially offset by higher billings on our long-term equipment contracts and long-term service agreements and net unfavorable changes in estimated profitability; accounts payable and equipment project payables of $0.3 billion driven by higher volume partially offset by higher disbursements; progress collections and current deferred income of $0.9 billion driven by higher collections.


2024 1Q FORM 10-Q 12


Cash from investing activities was $0.8 billion in 2024, a decrease of $0.5 billion compared to 2023, primarily due to: lower cash received related to net settlements between our continuing operations and businesses in discontinued operations of $1.3 billion, primarily related to the nonrecurrence of the GE HealthCare spin-off in 2023; partially offset by an increase in proceeds of $0.6 billion from the dispositions of our retained ownership interests driven by GE HealthCare in 2024, partially offset by the nonrecurrence of AerCap and Baker Hughes in 2023, and lower net purchases of insurance investment securities of $0.4 billion. Cash used for additions to property, plant and equipment and internal-use software, which are components of free cash flows*, was $0.4 billion and $0.3 billion in 2024 and 2023, respectively.

Cash used for financing activities was $0.2 billion in 2024, a decrease of $5.0 billion compared to 2023, primarily due to: the non-recurrence of cash paid for redemption of GE preferred stock of $3.0 billion in 2023; lower debt maturities of $1.5 billion, and an increase in cash received of $0.5 billion from stock option exercises (a component of All other financing activities).

CASH FLOWS FROM DISCONTINUED OPERATIONS
Cash used for operating activities of discontinued operations was less than $(0.1) billion in 2024, a decrease of $0.4 billion compared with 2023, primarily driven by the nonrecurrence of disbursements for purchases of materials in prior periods and separation costs related to our former GE HealthCare business.

Cash from investing activities of discontinued operations was less than $0.1 billion in 2024, a decrease of $3.1 billion compared with 2023, primarily driven by the nonrecurrence of the deconsolidation of GE HealthCare cash and equivalents of $1.8 billion in 2023 and lower net settlements between our discontinued operations and businesses in continuing operations of $1.3 billion.

Cash from financing activities of discontinued operations was zero in 2024, a decrease of $2.0 billion compared with 2023, primarily driven by the nonrecurrence of GE HealthCare's long-term debt issuance of $2.0 billion in connection with the spin-off in 2023.

CRITICAL ACCOUNTING ESTIMATES. Refer to the Critical Accounting Estimates and Note 1 to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2023 for discussion of accounting policies and critical accounting estimates.

OTHER ITEMS
NEW ACCOUNTING STANDARDS. In November of 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments are intended to increase reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the impact of this guidance on the disclosures within our consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments require disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact that this guidance will have on the disclosures within our consolidated financial statements.

PARENT COMPANY CREDIT SUPPORT. To support GE Vernova in selling products and services globally, GE often entered into contracts on behalf of GE Vernova or issued parent company guarantees or trade finance instruments supporting the performance of what were subsidiary legal entities transacting directly with customers, in addition to providing similar credit support for non-customer related activities of GE Vernova (collectively, “GE credit support”). In preparation for the spin-off, GE Vernova has been working to seek novation or assignment of GE credit support, the majority of which relates to parent company guarantees, associated with GE Vernova legal entities from GE to GE Vernova. For GE credit support that remains outstanding at the spin-off, GE Vernova is obligated to use reasonable best efforts to terminate or replace and obtain a full release of the Company’s obligations and liabilities under, all such credit support. Beginning in 2025, GE Vernova will pay a quarterly fee to the Company based on amounts related to the GE credit support. GE Vernova will face other contractual restrictions and requirements while the Company continues to be obligated under such credit support on behalf of GE Vernova. While the Company will remain obligated under the contract or instrument, GE Vernova will be obligated to indemnify the Company for credit support related payments that the Company is required to make.

At separation, we estimated GE Vernova RPO and other obligations that relate to GE credit support to be approximately $37 billion, an over 35% reduction since year end, of which, approximately $1 billion are financial guarantees. We expect, approximately $20 billion of the of RPO related GE credit support obligations to contractually mature within five years and credit support on financial guarantees to not exceed a year beyond separation. The Company’s maximum aggregate exposure under the GE credit support cannot be reasonably estimated given the breadth of the portfolio across each of the GE Vernova businesses. The underlying obligations are predominantly customer contracts that GE Vernova performs in the course of its business. We have no known instances historically where payments or performance from us were required under parent company guarantees relating to GE Vernova customer contracts. The fair value of GE Vernova’s obligation to indemnify the Company post spin-off is not expected to be significant primarily due to the low probability of loss.


*Non-GAAP Financial Measure
1Q 2024 FORM 10-Q 13


NON-GAAP FINANCIAL MEASURES. We believe that presenting non-GAAP financial measures provides management and investors useful measures to evaluate performance and trends of the total company and its businesses. This includes adjustments in recent periods to GAAP financial measures to increase period-to-period comparability following actions to strengthen our overall financial position and how we manage our business. In addition, management recognizes that certain non-GAAP terms may be interpreted differently by other companies under different circumstances. In various sections of this report we have made reference to the following non-GAAP financial measures in describing our (1) revenues, specifically organic revenues by segment; organic revenues; and equipment and services organic revenues, (2) profit, specifically organic profit and profit margin by segment; Adjusted profit and profit margin; Adjusted organic profit and profit margin; Adjusted earnings (loss); Adjusted income tax rate; and Adjusted earnings (loss) per share (EPS) and (3) cash, specifically Free cash flow (FCF). The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures follow.
ORGANIC REVENUES, PROFIT (LOSS) AND PROFIT MARGIN BY SEGMENT (NON-GAAP)
RevenuesSegment profit (loss)Profit margin
Three months ended March 3120242023V%20242023V%20242023V pts
Aerospace (GAAP)$8,064 $6,981 16 %$1,529 $1,326 15 %19.0 %19.0 %—pts
Less: acquisitions and business dispositions— — — — 
Less: foreign currency effect(5)
Aerospace organic (Non-GAAP)$8,061 $6,980 15 %$1,534 $1,325 16 %19.0 %19.0 %—pts
Renewable Energy (GAAP)$3,005 $2,837 %$(226)$(414)45 %(7.5)%(14.6)%7.1pts
Less: acquisitions and business dispositions— — — — 
Less: foreign currency effect30 (9)(21)(44)
Renewable Energy organic (Non-GAAP)$2,974 $2,846 %$(206)$(371)44 %(6.9)%(13.0)%6.1pts
Power (GAAP)$4,134 $3,820 %$229 $75 F5.5 %2.0 %3.5pts
Less: acquisitions and business dispositions41 — 10 — 
Less: foreign currency effect13 (26)(43)
Power organic (Non-GAAP)$4,080 $3,818 %$245 $119 F6.0 %3.1 %2.9pts
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, which includes translational and transactional impacts, as these activities can obscure underlying trends.

ORGANIC REVENUES (NON-GAAP)Three months ended March 31
20242023V%
Total revenues (GAAP)$16,053 $14,486 11 %
Less: Insurance revenues (Note 13)879 791 
Adjusted revenues (Non-GAAP)$15,174 $13,695 11 %
Less: acquisitions and business dispositions42 — 
Less: foreign currency effect(a)47 (6)
Organic revenues (Non-GAAP)$15,085 $13,701 10 %
(a) Foreign currency impact was primarily driven by U.S. dollar currency exchange differences against the euro, British pound and Brazilian real for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of revenues from our run-off Insurance operations, acquisitions, dispositions and foreign currency, which includes translational and transactional impacts, as these activities can obscure underlying trends.

EQUIPMENT AND SERVICES ORGANIC REVENUES (NON-GAAP)Three months ended March 31
20242023V%
Total equipment revenues (GAAP)$5,935 $5,287 12 %
Less: acquisitions and business dispositions20 — 
Less: foreign currency effect45 (7)
Equipment organic revenues (Non-GAAP)$5,871 $5,294 11 %
Total services revenues (GAAP)$9,239 $8,407 10 %
Less: acquisitions and business dispositions23 — 
Less: foreign currency effect
Services organic revenues (Non-GAAP)$9,214 $8,406 10 %
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, which includes translational and transactional impacts, as these activities can obscure underlying trends.

2024 1Q FORM 10-Q 14


ADJUSTED PROFIT AND PROFIT MARGIN (NON-GAAP)Three months ended March 31
20242023V%
Total revenues (GAAP)$16,053$14,48611%
Less: Insurance revenues (Note 13)879791
Adjusted revenues (Non-GAAP)$15,174$13,69511%
Total costs and expenses (GAAP)$15,295$14,0759%
Less: Insurance cost and expenses (Note 13) 679722
Less: interest and other financial charges(a)267257
Less: non-operating benefit cost (income)(362)(385)
Less: restructuring & other(a)218151
Less: separation costs(a)355205
Add: noncontrolling interests27(27)
Add: EFS benefit from taxes(62)(51)
Adjusted costs (Non-GAAP)$14,102$13,0478%
Other income (loss) (GAAP)$1,109$6,081(82)%
Less: gains (losses) on retained and sold ownership interests and other equity securities(a)6355,906
Less: gains (losses) on purchases and sales of business interests & other(a)4(55)
Adjusted other income (loss) (Non-GAAP)$470$230F
Profit (loss) (GAAP)$1,866$6,492(71)%
Profit (loss) margin (GAAP)11.6%44.8%(33.2)pts
Adjusted profit (loss) (Non-GAAP)$1,542$87776%
Adjusted profit (loss) margin (Non-GAAP)10.2%6.4%3.8pts
(a) See the Corporate and Other Consolidated Information sections for further information.
We believe that adjusting profit to exclude the effects of items that are not closely associated with ongoing operations provides management and investors with a meaningful measure that increases the period-to-period comparability. Gains (losses) and restructuring and other items are impacted by the timing and magnitude of gains associated with dispositions, and the timing and magnitude of costs associated with restructuring and other activities.

ADJUSTED ORGANIC PROFIT (NON-GAAP)Three months ended March 31
20242023V%
Adjusted profit (loss) (Non-GAAP)$1,542 $877 76 %
Less: acquisitions and business dispositions10 (6)
Less: foreign currency effect(a)(48)(140)
Adjusted organic profit (loss) (Non-GAAP)$1,581 $1,023 55 %
Adjusted profit (loss) margin (Non-GAAP)10.2 %6.4 %3.8 pts
Adjusted organic profit (loss) margin (Non-GAAP)10.5 %7.5 %3.0 pts
(a) Included foreign currency positive effect on revenues of $47 million and negative effect on operating costs and other income (loss) of $96 million for the three months ended March 31, 2024.
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, which includes translational and transactional impacts, as these activities can obscure underlying trends.
1Q 2024 FORM 10-Q 15


ADJUSTED EARNINGS (LOSS) AND ADJUSTED INCOME TAX RATE (NON-GAAP)Three months ended March 31
20242023
(Per-share amounts in dollars)EarningsEPSEarningsEPS
Earnings (loss) from continuing operations (GAAP) (Note 18)$1,522$1.38$6,097$5.56
Insurance earnings (loss) (pre-tax)2010.18710.06
Tax effect on Insurance earnings (loss)(43)(0.04)(16)(0.01)
Less: Insurance earnings (loss) (net of tax) (Note 13) 1580.14540.05
Earnings (loss) excluding Insurance (Non-GAAP)$1,365$1.24$6,043$5.51
Non-operating benefit (cost) income (pre-tax) (GAAP)3620.333850.35
Tax effect on non-operating benefit (cost) income(76)(0.07)(81)(0.07)
Less: Non-operating benefit (cost) income (net of tax)2860.263040.28
Gains (losses) on purchases and sales of business interests (pre-tax)(a)4(55)(0.05)
Tax effect on gains (losses) on purchases and sales of business interests80.011
Less: Gains (losses) on purchases and sales of business interests (net of tax)120.01(53)(0.05)
Gains (losses) on retained and sold ownership interests and other equity securities (pre-tax)(a)6350.585,9065.39
Tax effect on gains (losses) on retained and sold ownership interests and other equity securities(b)(c)(1)
Less: Gains (losses) on retained and sold ownership interests and other equity securities (net of tax)6330.575,9065.39
Restructuring & other (pre-tax)(a)(218)(0.20)(151)(0.14)
Tax effect on restructuring & other460.04320.03
Less: Restructuring & other (net of tax)(172)(0.16)(119)(0.11)
Separation costs (pre-tax)(a)(355)(0.32)(205)(0.19)
Tax effect on separation costs540.05(56)(0.05)
Less: Separation costs (net of tax)(301)(0.27)(261)(0.24)
Less: Excise tax and accretion of preferred share redemption(30)(0.03)
Adjusted earnings (loss) (Non-GAAP)$906$0.82$296$0.27
Earnings (loss) from continuing operations before taxes (GAAP)$1,866$6,492
Less: Total adjustments above (pre-tax)6285,950
Adjusted earnings before taxes (Non-GAAP)$1,238$542
Provision (benefit) for income taxes (GAAP)$318$271
Less: Tax effect on adjustments above12119
Adjusted provision (benefit) for income taxes (Non-GAAP)$306$152
Income tax rate (GAAP)17.0%4.2%
Adjusted income tax rate (Non-GAAP)24.7%28.0%
(a) See the Corporate and Other Consolidated Information sections for further information.
(b) Includes tax benefits available to offset the tax on gains (losses) on equity securities.
(c) Includes related tax valuation allowances.
Earnings per share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.
The service cost for our pension and other benefit plans are included in Adjusted earnings*, which represents the ongoing cost of providing pension benefits to our employees. The components of non-operating benefit costs are mainly driven by capital allocation decisions and market performance. We believe the retained cost in Adjusted earnings* and the Adjusted tax rate* provides management and investors a useful measure to evaluate the performance of the total company and increases period-to-period comparability. We also use Adjusted EPS* as a performance metric at the company level for our annual executive incentive plan for 2024.












*Non-GAAP Financial Measure
2024 1Q FORM 10-Q 16


FREE CASH FLOWS (FCF) (NON-GAAP)
Three months ended March 31
20242023
CFOA (GAAP)$1,024 $155 
Less: Insurance CFOA84 
CFOA excluding Insurance (Non-GAAP)$939 $149 
Add: gross additions to property, plant and equipment and internal-use software(421)(298)
Less: separation costs cash expenditures(247)(204)
Less: Corporate restructuring cash expenditures(79)(32)
Less: taxes related to business sales(6)(16)
Free cash flows (Non-GAAP)$850 $102 
We believe investors may find it useful to compare free cash flows* performance without the effects of cash flows for taxes related to business sales, operating activities related to our run-off Insurance operations, separation cash expenditures and Corporate restructuring cash expenditures (associated with the separation-related program announced in October 2022). We believe this measure will better allow management and investors to evaluate the capacity of our operations to generate free cash flows.

CONTROLS AND PROCEDURES. Under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that (i) our disclosure controls and procedures were effective as of March 31, 2024, and (ii) no change in internal control over financial reporting occurred during the quarter ended March 31, 2024, that has materially affected, or is reasonably likely to materially affect, such internal control over financial reporting.

OTHER FINANCIAL DATA

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS. On March 6, 2022, the Board of Directors authorized up to $3 billion of common share repurchases. We repurchased 1,050 thousand shares for $144 million during the three months ended March 31, 2024 under this authorization. On March 7, 2024 General Electric Company announced that the Board of Directors had provided a new authorization for up to $15 billion of common share repurchases, which will replace the prior $3 billion authorization, with an effective date of April 24, 2024.
2024 (Shares in thousands)Total number of shares purchasedAverage price paid per shareTotal number of shares purchased as part of our share repurchase authorizationApproximate dollar value of shares that may yet be purchased under our share repurchase authorization
January504 $129.99 504 
February546 144.35 546 
March— — — 
Total1,050 $137.45 1,050 $794 

RISK FACTORS. The following discussion of the material factors, events and uncertainties that may make an investment in the Company speculative or risky contains "forward-looking statements," as discussed in the Forward-Looking Statements section. The risk factors set forth below update the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2023 to reflect risks for GE Aerospace following completion of the spin-off of GE Vernova on April 2, 2024. These risk factors may be important to understanding any statement in this report or elsewhere. The risks described below should not be considered a complete list of potential risks that we face, and additional risks not currently known to us or that we currently consider immaterial may also negatively impact us. The following information should be read in conjunction with the MD&A section and the consolidated financial statements and related notes in this report and in our Annual Report on Form 10-K for the year ended December 31, 2023. The risks we describe in this report or in our other SEC filings could, in ways we may not be able to accurately predict, recognize or control, have a material adverse effect on our business, reputation, financial position, results of operations, cash flows and stock price, and they could cause our future results to be materially different than we presently anticipate.

STRATEGIC RISKS. Strategic risk relates to the Company's future business plans and strategies, including the risks associated with global macro-environment; dynamics in the commercial aviation sector; competitive threats; the demand for our products and services and the success of our investments in technology and innovation; impacts of government spending, programs and contracts; climate change; our recent spin-offs; capital allocation decisions; acquisitions, dispositions, joint ventures and other inorganic investments; intellectual property; and other risks.

1Q 2024 FORM 10-Q 17


Global macro-environment - Our financial performance and growth are subject to risks related to global economic, political and geopolitical developments or other disruptions to the economy or our business sectors. We serve customers in many countries around the world and receive a significant portion of our revenues from outside the United States. Accordingly, our operations and execution are subject to the effects of global economic trends, geopolitical risks and demand or supply shocks from events such as war or international conflict, a major terrorist attack, natural disasters or actual or threatened public health pandemics or other emergencies. Further, following the completion of the GE Vernova spin-off, we are a less diversified company, and as a result we may be more vulnerable to shocks to the global macro-environment. Our operations and performance are also affected by local and regional economic environments, supply chain constraints and policies in the U.S. and other markets that we serve, including factors such as inflationary pressures in many markets, increased interest rates from recent historic lows, economic growth rates, the availability of skilled labor, monetary policy, exchange rates, currency volatility, commodity prices and sovereign debt levels. For example, inflationary pressures have caused and may continue to cause many of our material and labor costs to increase, which adversely affects our profitability and cash flows, particularly when we are unable to increase customer contract values or pricing to offset those pressures. Deterioration of economic conditions or outlooks, such as lower rates of investment, lower economic growth, recession or fears of recession in the U.S., China, Europe or other key markets, may adversely affect the demand for or profitability of our products and services, and the impact from developments outside the U.S. on our business performance can be significant given the extent of our global activities. Increased geopolitical tensions and outbreaks of armed conflict can also adversely impact our businesses, both directly or by adversely affecting economic activity globally or in particular regions or countries. For example, Russia’s invasion of Ukraine in early 2022 and related political and economic consequences, such as sanctions and other measures imposed by the European Union, the U.S. and other countries and organizations in response, have caused and may continue to cause disruption and instability in global markets, supply chains and industries that negatively impact our businesses, financial condition and results of operations and pose reputational risks. More recently, there is risk of wider conflict in the Middle East that could have significant adverse impacts on the region and business activity in addition to the humanitarian and other consequences of the current conflict. In addition, political changes and trends such as populism, protectionism, economic nationalism and sentiment toward multinational companies, as well as tariffs, export controls, restrictions on outbound investment or other trade barriers, sanctions, technical or local content regulations, currency controls, or changes to tax or other laws and policies, have been and may continue to be disruptive and costly to our businesses. These can interfere with our global operating model, supply chain, production costs, customer relationships and competitive position. Further escalation of any specific trade tensions, including intensified decoupling between the U.S. and China, or in global trade conflict more broadly could be harmful to global economic growth or to our business in or with China or other countries. We also do business in emerging market jurisdictions where economic, political and legal risks are heightened and the operating environments are complex.

Commercial aviation sector - Our financial performance is dependent on the condition of the commercial aviation sector and our partners and customers in that sector. Following the completion of the GE Vernova spin-off, a substantial portion of our business is directly tied to economic conditions in the commercial aviation sector, which is cyclical in nature. Capital spending and demand for aircraft engines, aviation products and component aftermarket parts and services by commercial airlines, lessors, other aircraft operators and airframers are influenced by a wide variety of factors, including current and predicted traffic levels, load factors, aircraft fuel prices, labor costs and other issues, airline consolidation, bankruptcies and restructuring activities, competition, the retirement of older aircraft, changes in production schedules, regulatory changes, terrorism and related safety concerns, general economic conditions, tightening of credit in financial markets, corporate profitability, cost reduction efforts and remaining performance obligations levels. Any of these factors could reduce our sales and profit margins. Other factors, including future terrorist actions, aviation safety concerns, public health crises or major natural disasters, could also dramatically reduce the demand for commercial air travel, which could negatively impact our sales and profit margins. As we experienced with the COVID-19 pandemic, our business suffered adverse effects from a global health pandemic that led to a significant decline in commercial air traffic, had material adverse effects on our airline and airframer customers and their demand for our products and services and caused other significant dislocations throughout the aviation sector. Supply chain disruptions and other lingering impacts from the pandemic and measures in response continue to pose challenges and risks for our business and other industry participants, and future public health crises could cause other disruptions and challenges in the future. We also face risks related to longer-term strategies the aviation sector has implemented and may implement, such as reducing capacity, shifting route patterns or other strategies to mitigate impacts from COVID-19 and the risk of future public health crises, and from potential shifts in the flying public’s demand for travel, any of which could adversely affect future growth in commercial air traffic capacity and the demand for or profitability of our products and services. Additionally, because a substantial portion of product deliveries to commercial aviation customers are scheduled for delivery in the future, changes in economic conditions can cause customers to request that orders be rescheduled or canceled. Spare parts sales and aftermarket service trends are affected by similar factors, including usage, pricing, technological improvements, regulatory changes and the retirement of older aircraft. Furthermore, because of the lengthy research and development cycle involved in bringing new engine platforms and other products to market, we cannot predict the economic conditions that will exist when any new product is ready to enter into service. We also have dependencies on our partners for commercial engine programs to develop, manufacture and service their share of an engine, and on the major airframers that we supply to timely and successfully develop, certify and commercialize aircraft that utilize our engines as well as to successfully sell those aircraft against aircraft powered by our competitors. A reduction in spending in the commercial aviation sector, or challenges for key industry participants, could have a significant effect on the demand for our products and services, which could have a material adverse effect on our competitive position, results of operations, financial condition or cash flows.

Competitive environment - We are dependent on the maintenance of existing product lines and service relationships, market acceptance of new product and service introductions, competitive pricing and other terms, and technology and innovation leadership for revenue and earnings growth. The markets in which we operate are highly competitive in terms of pricing, product and service quality, product development and introduction time, customer service, financing terms, the ability to respond to shifts in market demand and the ability to attract and retain skilled talent. Our long-term operating results and competitive position also depend substantially upon our ability to continually develop, introduce, and market new and innovative technology, products, services and
2024 1Q FORM 10-Q 18


platforms, to develop digital solutions for our own operations and our customers, to modify existing products and services, to customize products and services, to maintain long-term customer relationships and to increase our productivity over time as we perform on long-term service agreements. We often enter into long-term service agreements in connection with significant contracts for the sale of our products. In connection with these agreements, we must accurately estimate our costs associated with delivering the products, product durability and reliability, and the provision of services over time in order to be profitable and generate acceptable returns on our investments. A failure to appropriately estimate, plan for or execute our business plans may adversely affect our delivery of products, services and outcomes in line with our projected financial performance or cost estimates, and ultimately may result in excess costs, build-up of inventory that becomes obsolete, lower profit margins and an erosion of our competitive position.

Our businesses are also subject to technological change and advances, such as growth in industrial automation and increased digitization of the operations, infrastructure and solutions that customers demand. In addition, our use of emerging and evolving technologies such as artificial intelligence and machine learning, which we expect to increase over time, presents business, reputational, legal and compliance risks related to data sourcing, design flaws, integration issues, security threats, privacy protections and the ability to develop sufficient protection measures. The introduction of innovative and disruptive technologies in the markets in which we operate also poses risks in the form of new competitors (including new entrants from outside our traditional industries, such as competitors from digital technology companies), market consolidation, substitutions of existing products, services or solutions, niche players, new business models and competitors that are faster to market with new or more cost-effective products or services. Existing and new competitors frequently offer services for our installed base, and if the customers that purchase our equipment and products select our competitors’ services or if we otherwise fail to maintain or renew service relationships, this can erode the revenues and profitability of our businesses. In addition, the research and development cycle involved in bringing new products to market is often lengthy, it is inherently difficult to predict the economic conditions or competitive dynamics that will exist when any new product is complete, and our investments, to the extent they result in bringing a product to market, may generate weaker returns than we anticipated at the outset. Our capacity to invest in research and development efforts to advance our technologies, products and services also depends on the financial resources that we have available for such investment relative to other capital allocation priorities. Under-investment in research and development, or investment in technologies that prove to be less competitive in the future (at the expense of alternative investment opportunities not pursued), could lead to loss of sales of our products or services in the future due to the long product development cycles in our business. The amounts that we do invest in research and development efforts may not lead to the development of new technologies or products on a timely basis or meet the needs of our customers as fully as competitive offerings.

Government programs and contracts - Our Defense business is subject to risks from changes in government spending that can adversely affect our business strategy or financial performance, in addition to risks related to regulations and compliance with government contracts. Our Defense business is heavily influenced by the spending and policy actions of the U.S. federal government, as well as allied governments that rely on U.S. suppliers to provide products and services important to their national defense. Changes in U.S. or other government defense spending, including as a result of potential changes in policy or budgetary positions or priorities, can negatively impact the results and growth prospects of our Defense business. U.S. defense spending levels are difficult to predict and may be impacted by numerous factors such as the evolving nature of the national security threat environment, U.S. national security strategy, U.S. foreign policy, the domestic political environment, macroeconomic conditions and the ability of the U.S. government to enact relevant legislation such as authorization and appropriations bills. In addition, government customers often may modify, curtail or terminate their contracts and subcontracts with us either at their convenience or for default based on performance. The termination of one or more of our government contracts, or the occurrence of performance delays, cost overruns (due to inflation or otherwise), product failures, shortages in materials, components or labor, or other failures to perform to customer expectations and contract requirements could negatively impact our reputation, competitive position and financial results. In addition, our government contracts are subject to extensive procurement regulations, and new regulations or changes to existing requirements could increase our compliance costs. We are also subject to U.S. and other government inquiries and investigations, including periodic audits of our quality systems, manufacturing operations, and costs that we determine are allowable or reimbursable under government contracts. Failure to comply with provisions of our defense customer contracts or other applicable laws and regulations could lead to civil or criminal enforcement under the U.S. False Claims Act or similar enforcement legislation, including potentially significant financial penalties, suspension or debarment against new business and reputational harm.

Climate change - Our business and financial performance may be adversely affected by climate change, including changes in regulations, customer demand, technologies and extreme weather. Our business may be impacted by climate change and governmental and industry actions taken in response, which present a variety of risks to our business and financial results. Changes in environmental and climate-related laws or regulations, including regulations on greenhouse gas emissions, emissions pricing and taxes, energy taxes, product efficiency standards, mandatory disclosure obligations and U.S. government procurement requirements, could increase our operational and compliance expenditures and those of our suppliers, including increased energy and raw materials costs and costs associated with manufacturing changes, and could require new or additional investments in product designs and facility upgrades. In addition, we face, along with others across the aerospace and defense sector, increasing demand for transitioning to lower emission technologies, including low to no carbon products and services, the use of alternative energy sources and other sustainable aviation technologies, and climate adaptation products and services. Customers, shareholders and institutional investors also continue to increase their focus on environmental, social and governance issues, including our environmental sustainability practices and commitments with respect to our operations, products and suppliers. We anticipate that over time we will make additional investments in new technologies and capabilities and devote additional management and other resources in connection with these dynamics.

The achievement of aerospace and defense sector climate goals over the coming decades is likely to depend in part on technologies that are not yet deployed or widely adopted today. For example, emissions reduction over time will likely require a combination of
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changes such as continued technological innovation in the fuel efficiency of engines, expanded use of sustainable aviation fuels and the development of electric flight and hydrogen-based aviation technologies. The risk of insufficient availability of low carbon fuels (such as sustainable aviation fuels or hydrogen) may compromise the pace and degree of emissions reduction. Our success in advancing climate objectives will depend in part on the actions of governments, regulators and other market participants to invest in infrastructure, create appropriate market incentives and to otherwise support the development of new technologies. The process of developing new high-technology products and enhancing existing products to mitigate climate change is often complex, costly and uncertain, and we may pursue strategies or make investments that do not prove to be commercially successful in the time frames expected or at all. Moreover, we rely on our suppliers to adapt and meet our evolving technological supply needs, and they may be unable to fully respond to our requirements in a timely manner or at all. We also face risks as our competitors respond to advancing sustainable technologies. Our competitors may develop these in-demand technologies before we do, their new technologies may be deemed by our customers to be superior to technologies we may develop, and their technologies may otherwise gain industry acceptance in advance of or instead of our products. In addition, as we and our competitors develop increasingly sustainable technologies, demand for our older offerings may decrease or become nonexistent. Our reputation may also be damaged if we or others in our sector fail, or are perceived to fail, to achieve sustainability goals or commitments or to comply with evolving climate-related regulations. In addition, climate-related litigation and government investigations could be commenced against us, could be costly to defend and could adversely affect our business. Furthermore, our business, the businesses of our partners, suppliers, subcontractors, service providers, distributors and customers, and the industries in which we operate could be negatively impacted by increasing frequency and severity of acute extreme weather events caused by climate change, including hurricanes, tornadoes, floods, snow and ice storms, fires, heat waves, and mud slides, and by chronic changes in weather patterns, such as temperature increases, drought and sea level rise. These events could damage our and our suppliers’ facilities, products and other assets, and cause disruptions to our business and operations, supply chain and distribution networks, and the businesses of our customers, and could require an increase in expenditures to improve climate resiliency of our operations. Any of the foregoing could materially decrease our revenues and materially increase our costs and expenses.

Recent spin-offs - The profile of the Company has changed in connection with the spin-offs of GE HealthCare and GE Vernova, and we face a number of risks related to these business separations and the related period of transition. In connection with the GE HealthCare and GE Vernova spin-offs, we entered into separation and distribution agreements and other related agreements. These separation arrangements have shaped the capital structure and liability profile of GE Aerospace as it exists today. These agreements allocate assets and liabilities among the three companies, and also contain indemnities and other obligations of each of the three companies that could lead to disputes in the future. If we are required to indemnify GE HealthCare or GE Vernova under the circumstances set forth in these agreements, we may be subject to substantial liabilities. Furthermore, with respect to the liabilities for which GE HealthCare and GE Vernova have agreed to indemnify us under these agreements, there can be no assurance that the indemnity rights we have against GE HealthCare and GE Vernova will be sufficient to protect us against the full amount of liabilities, or that GE HealthCare or GE Vernova will be able to fully satisfy their indemnification obligations. In particular, we previously entered into contracts on behalf of GE Vernova, issued parent company guarantees or supported trade finance instruments relating to the performance of GE Vernova businesses transacting directly with customers, in addition to providing similar credit support for some non-customer-related activities of GE Vernova (collectively, credit support). For credit support that is not novated or transferred to GE Vernova with a release of GE Aerospace, the failure or alleged failure of GE Vernova (or of any subsequent acquirors of all or a portion of GE Vernova's businesses) to perform under any relevant contract could result in claims for damages or other relief against us. The total amount of GE Vernova business that the credit support relates to is significant, and GE Aerospace will likely continue to have exposure that is based on the continued performance of the relevant contracts for some years following completion of the GE Vernova spin-off. See the Other Items - Parent Company Credit Support section within MD&A for additional information.

Each of the GE HealthCare and the GE Vernova separations were effected through spin-offs that are intended to be tax-free for the Company and its shareholders for U.S. federal income tax purposes. If either of the GE HealthCare or GE Vernova separation transactions were ultimately determined to be taxable, we would incur a significant tax liability, while the distributions to the Company’s shareholders would become taxable and the new independent companies might incur income tax liabilities as well. In addition, while we believe that the completed spin-offs have resulted in a GE Aerospace with more focused operations that will have financial, operational and other benefits to us and our stockholders, the Company today is less diversified than GE in the past and is more concentrated in the aerospace and defense sector, particularly in commercial aviation. The execution and completion of the spin-offs have also entailed various restructuring and business transformation actions that have brought changes across our organizational structure, senior leadership, functional alignment, outsourcing and other areas. These pose risks in the form of personnel capacity constraints and institutional knowledge loss that could pose operational, financial, reputational or other risks, particularly in the transitional period during and following completion of these spin-offs.

Inorganic investments - Our success depends on achieving our strategic and financial objectives, including through acquisitions, integrations, dispositions, joint ventures and other inorganic investments. With respect to acquisitions and business integrations, dispositions, separations, joint ventures and other inorganic investments, we may not achieve expected returns or other benefits on a timely basis or at all as a result of changes in strategy, integration challenges, investment risk or other factors. Acquisitions may require us to use more financial and other resources on integration and implementation activities than we expect, and we may not be able to successfully integrate the businesses or assets acquired into our existing operations or realize the expected economic benefits of the acquisition. Further, acquired businesses may present risks and unforeseen difficulties that can arise in integrating operations and systems and in retaining and assimilating employees. Declines in the value of equity interests (such as our remaining interest in GE HealthCare) or other assets that we sell can diminish the cash proceeds that we realize, and our ability and timing to sell can depend on market conditions, the liquidity of the relevant asset or other restrictions. We may dispose of businesses or assets at a price or on terms that are less favorable than we had anticipated, or with purchase price adjustments or the exclusion of assets or liabilities that must be divested, managed or run off separately. Dispositions or other business separations also often involve
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continued financial involvement in the divested business, such as through continuing equity ownership, retained assets or liabilities, transition services agreements, commercial agreements, guarantees, indemnities or other current or contingent financial obligations or liabilities. Under these arrangements, performance by the divested businesses or other conditions outside our control could materially affect our future financial results. Evaluating or executing on all types of potential or planned portfolio transactions can divert senior management time and resources from other pursuits. We also participate in a number of joint ventures with other companies or government enterprises in various markets around the world, including joint ventures where we have a lesser or minimal degree of control over the business operations, which expose us to additional operational, financial, reputational, legal or compliance risks. Furthermore, as our and our joint venture partners’ strategies change or general conditions involving a joint venture and its intended purposes evolve, we may not be able to exit or wind down any unfavorable joint ventures on acceptable terms or without additional concessions to our joint venture partners.

Intellectual property - Our intellectual property portfolio may not prevent competitors from independently developing products and services similar to or duplicative to ours, and the value of our intellectual property may be negatively impacted by external dependencies. Our patents and other intellectual property may not prevent competitors from independently developing or selling products and services similar to or duplicative of ours, and there can be no assurance that the resources invested by us to protect our intellectual property will be sufficient or that our intellectual property portfolio will adequately deter misappropriation or improper use of our technology, particularly in certain markets outside the U.S. where intellectual property laws and related enforcement mechanisms may not be as well-developed. Trademark licenses of the GE brand in connection with dispositions, including in connection with the separation of GE HealthCare and GE Vernova into independent companies, may negatively impact the overall value of the brand in the future. We also face competition in some countries where we have not invested in an intellectual property portfolio. If we are not able to protect our intellectual property, the value of our brand and other intangible assets may be diminished, and our business may be adversely affected. We also face attempts, both internally from insider threats and externally from cyber-attacks, to gain unauthorized access to our IT systems or products for the purpose of improperly acquiring our trade secrets or confidential business information. In addition, we have observed an increase in the use of social engineering tactics by bad actors attempting to obtain confidential business information or credentials to access systems with our intellectual property. The theft or unauthorized use or publication of our trade secrets and other confidential business information as a result of such incidents could adversely affect our competitive position and the value of our investment in research and development. In addition, we are subject to the enforcement of patents or other intellectual property by third parties, including aggressive and opportunistic enforcement claims by non-practicing entities. Regardless of the merit of such claims, responding to infringement claims can be expensive and time-consuming. We have been in the past, and may in the future be, found to infringe third-party rights, which could require us to pay substantial damages or enjoin us from offering some of our products and services or bringing to market new products and services. The value of, or our ability to use, our intellectual property may also be negatively impacted by dependencies on third parties, such as our ability to obtain or renew on reasonable terms licenses that we need in the future, or our ability to secure or retain ownership or rights to use data in certain software analytics or services offerings.

OPERATIONAL RISKS. Operational risk relates to risks arising from systems, processes, people and external events that affect the operation of our businesses. It includes risks related to product safety, quality and performance; operational execution across product and service life cycles; information management and data protection and security, including cybersecurity; and supply chain and business disruption.

Product safety and quality - Our products and services are highly sophisticated and specialized, and a major failure or quality issue affecting our products or third-party products with which our products are integrated can adversely affect our business, reputation, financial position, results of operations and cash flows. We produce highly sophisticated products, including commercial and defense aircraft engines, integrated engine components, electric power and mechanical aircraft systems, and we provide specialized services for both our own and third-party products that incorporate or use complex or leading-edge technology, including both hardware and software. Accordingly, the adverse impact of product quality issues can be significant. Actual or perceived design, production, performance, durability or other quality issues related to new product introductions or existing product lines can result in reputational harm to our businesses, in addition to the potential need for increased inspections and shop visits, direct warranty, maintenance and other costs that may arise. In addition, a catastrophic product failure or similar event resulting in injuries or death, a fleet grounding or similar systemic consequences could have a material adverse effect on our business, reputation, financial position, cash flows and results of operations. Even when there have not been significant or widespread product failures in the field, many of our products and services must function under demanding operating conditions and meet exacting and evolving certification, performance, reliability and durability standards that we, our customers or regulators adopt. Developing and maintaining products that meet or exceed these standards can be costly and technologically challenging, and may also involve extensive coordination of suppliers and highly skilled labor from thousands of workers; a failure to deliver products and services that meet these standards could have significant adverse financial, competitive or reputational effects. Technical, mechanical and other failures occur from time to time, whether as a result of human factors, manufacturing or design defects, or operational process or production issues attributable to us, our customers, suppliers, third-party integrators or others.

In some circumstances we have also incurred, and in the future we may incur, increased costs, delayed payments or lost equipment or services revenue in connection with a significant issue with a third party’s product with which our products are integrated, or if parts or other components that we incorporate in our products have defects or other quality issues. For example, a prolonged aircraft grounding, certification or production delays or other adverse developments with aircraft powered by our engines can pose risks to our business. There can be no assurance that the operational processes around sourcing, product design, manufacture, performance and servicing that we or our customers or other third parties have designed to meet rigorous regulatory and quality standards will be sufficient to
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prevent us or our customers or other third parties from experiencing operational process or product failures and other problems, including through human factors, manufacturing or design defects, process or other failures of contractors or third-party suppliers, cyber-attacks or other intentional acts, software vulnerabilities or malicious software, that could result in potential product, safety, quality, regulatory or environmental risks.

Operational execution - Operational challenges could have a material adverse effect on our business, reputation, financial position, results of operations and cash flows. Our financial results depend on the successful execution of our businesses’ operating plans across all steps of the product and service life cycle. We seek to improve the operations and execution of our businesses on an ongoing basis, and our ability to make the desired improvements is an important factor in our profitability and overall financial performance. We also face operational risks in connection with launching or ramping newer product platforms, such as the LEAP or GE9X engines. Particularly with newer product platforms and technologies, our businesses seek to reduce the costs of these products over time through experience and other measures, including the introduction of new designs, technologies, manufacturing methods and suppliers. Risks related to engineering, our supply chain, the availability of skilled labor, product quality, timely delivery or other aspects of operational execution can adversely affect our ability to achieve those cost reductions and to meet contract obligations as well as customers' expectations. Many of our customer contracts are complex and contain provisions that could cause us to incur penalties, be liable for liquidated or actual damages and incur unanticipated expenses with respect to the timely delivery, functionality, deployment, operation and durability of our products, solutions and services. Operational failures at any of our businesses that result in product safety or quality problems or potential environmental, health or other risks could have a material adverse effect on our business, reputation, financial position, cash flows and results of operations.

Cybersecurity - Increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted computer crime, as well as cybersecurity failures, pose risk to our systems, networks, products, solutions, services and data. Increased global cybersecurity requirements, vulnerabilities, threats, computer viruses and more sophisticated and targeted cyber-related attacks such as ransomware, as well as cybersecurity failures resulting from human or technological errors, pose risk to the security of our and our customers', partners', suppliers' and third-party service providers' infrastructure, products, systems and networks and the confidentiality, availability and integrity of GE Aerospace and customers' data, as well as associated financial and reputational risks. The perpetrators of such attacks include sophisticated malicious actors, including states and state-affiliated actors targeting critical infrastructure. The risks in this area continue to grow, and cyberattacks are expected to accelerate on a global basis in frequency and impact as threat actors increasingly use artificial intelligence and other techniques to circumvent security controls, evade detection and remove forensic evidence. As a result, we may be unable to promptly or effectively detect, investigate, remediate or recover from cybersecurity attacks, which may result in material harm to our systems, information or business.

We have experienced, and expect to continue to experience, cyberattacks of varying degrees of sophistication and other cybersecurity incidents. Bad actors have attempted and we expect will continue to attempt to use our separation of GE HealthCare in January 2023 and the separation of GE Vernova in April 2024 as an opportunity to launch attacks or increase their number of attacks against our networks and systems, as well as attempt to use social engineering tactics or phishing emails to induce our employees to reveal sensitive information or install malware. A significant cyber-related attack against us, a key third-party system or a network that we use, or in our sector, such as an attack on commercial aircraft (even if such an attack does not involve our products, services or systems), could adversely affect our business. The large number of suppliers that we work with requires significant effort for the initial and ongoing verification of the effective implementation of cybersecurity requirements by suppliers. The increasing degree of interconnectedness that we have with our partners, suppliers and customers also poses a risk to the security of our network as well as the larger ecosystem in which we operate. Our risk mitigation efforts may fail to prevent, detect and limit the impact of cyber-related attacks, and we remain vulnerable to known and unknown cybersecurity threats.

The continued adoption of new technologies by our businesses and our suppliers also increases our exposure to cybersecurity threats. An unknown vulnerability or compromise in our or a third-party product (for example, open source software) may expose our systems, networks, software or connected products to malicious actors and lead to the misuse or unintended use of our products, loss of intellectual property, misappropriation of sensitive, confidential or personal data, safety risks or unavailability of equipment. We also have access to sensitive, classified, confidential or personal data or information that is subject to privacy and security laws, regulations or customer-imposed controls. We are vulnerable to security breaches, theft, misplaced, lost or corrupted data, programming errors and misconfigurations, employee errors (including as a result of social engineering/phishing) and/or malfeasance (including misappropriation by insiders or departing employees) that may compromise sensitive, classified, confidential or personal data or information, improper use of our systems, software solutions or networks, unauthorized access, use, disclosure, modification or destruction of or denial of access to information, defective products, production downtimes and operational disruptions. In addition, our partners or suppliers may be the victim of a cyber-related incident that could compromise our intellectual property, personal data or other confidential information, or result in production downtimes and operational disruptions that could cause us to breach our commitments to customers. An unknown security vulnerability or malicious software in a product used by a partner or supplier to deliver a service or embedded in a product that is later integrated into a GE Aerospace product could lead to a vulnerability in the security of GE Aerospace’s product or, if used internally in our network environment, to a compromise of the GE Aerospace network, which may lead to the loss of information or operational disruptions. Cybersecurity-related and data privacy and protection laws and regulatory regimes are evolving, can vary significantly by country and present increasing compliance challenges, and we from time to time receive, and in the future will likely receive, regulatory inquiries about specific incidents or aspects of our cybersecurity framework; these dynamics increase our costs, affect our competitiveness and can expose us to fines or other penalties and reputational risks. In addition, cybersecurity incidents can result in other negative consequences, regardless of whether the direct effects of an incident are significant, including damage to our reputation or competitiveness, restoration and remediation costs, increased digital infrastructure or related costs that are not covered by insurance, and costs or fines arising from litigation or regulatory investigations or actions. While
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we carry cyber insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.

Supply chain - Significant raw material or other input shortages, supplier capacity constraints, supplier or customer production disruptions, supplier quality and sourcing issues or price increases have increased, and may continue to increase, our operating costs and can adversely impact the competitive positions of our products. Our reliance on third-party suppliers, partners, contract manufacturers and service providers and on commodity markets to secure raw materials, parts, components and sub-systems used in our products exposes us to volatility in the prices and availability of these materials, parts, components, systems and services. As our supply chains are complex and extend into many different countries and regions around the world, we are also subject to global economic and geopolitical dynamics and risks associated with exporting components manufactured in particular countries for incorporation into finished products completed in other countries. We operate in a supply-constrained environment and are facing, and may continue to face, supply-chain shortages, inflationary pressures, shortages of skilled labor, transportation and logistics challenges and manufacturing disruptions that impact our revenues, profitability and timeliness in fulfilling customer orders. We anticipate supply chain pressures across our businesses will continue to challenge and adversely affect our operations and financial performance for some period of time. For example, successfully executing the significant production and delivery ramp-up efforts in connection with both the growth of newer engine platforms such as the LEAP and the aviation sector’s recovery from the COVID-19 pandemic depends in part on our suppliers having access to the materials and skilled labor they require and making timely deliveries to us, as well as meeting the required safety, quality and performance standards for commercial and military aviation. In addition, some of our suppliers or their sub-suppliers are limited- or sole-source suppliers, and our ability to meet our obligations to customers depends on the performance, product quality, continued product availability and stability of such suppliers. We also have dependencies on certain key internal manufacturing or other facilities. Disruptions in deliveries, capacity constraints, production disruptions up- or down-stream, price increases, or decreased availability of raw materials or commodities, including as a result of war, natural disasters (including the effects of climate change such as sea level rise, drought, flooding, wildfires and more intense weather events), actual or threatened public health pandemics or emergencies, governmental, legislative or regulatory actions, or other business continuity events, adversely affect our operations and, depending on the length and severity of the disruption, can limit our ability to meet our commitments to customers or significantly impact our operating profit or cash flows. Further, a prolonged disruption at a significant supplier or discontinuation of an important material, part, component or system can require us to identify and qualify a new supplier or develop other manufacturing or production alternatives; this can require substantial time to implement, particularly if it involves new regulatory certifications, and can lead to costs or delays that adversely impact our production timelines, fulfillment of customer contracts, revenues, profitability and reputation. Quality, capability, compliance and sourcing issues experienced by third-party providers can also adversely affect our costs, margin rates and the quality and effectiveness of our products and services and result in liability and reputational harm. The harm to us could be significant if, for example, a quality issue at a supplier or with components that we integrate into our products results in a widespread quality issue across one of our product lines or our installed base of equipment. In addition, our suppliers may experience cyber-related attacks, as described above, which could negatively impact their ability to meet their delivery obligations to us and in turn have an adverse effect on our ability to meet our commitments to customers.

FINANCIAL RISKS. Financial risk relates to our ability to meet financial goals and obligations and mitigate exposure to broad market risks. In addition to the risks to financial performance that most of the items described throughout our risk factors pose, financial risks include credit risk; funding and liquidity risks; and volatility in foreign currency exchange rates, interest rates and commodity prices. We also face financial risks associated with our run-off insurance and banking operations and our pension, healthcare and life insurance benefits obligations. Credit risk is the risk of financial loss arising from a customer or counterparty failure to meet its contractual obligations. Liquidity risk refers to the potential inability to meet contractual or contingent financial obligations (whether on- or off-balance sheet) as they arise, and could potentially impact our financial condition, cash flow or overall safety and soundness.

Customers and counterparties - Global economic, industry-specific or other developments that weaken the financial condition, soundness or continuity of significant customers, governments, government programs or other parties we deal with can adversely affect our business, results of operations and cash flows. Our business and operating results have been, and will continue to be, affected by worldwide economic conditions, including conditions in the aerospace and defense sector. Existing or potential customers may delay or cancel plans to purchase our products and services and may not be able to fulfill their obligations to us in a timely fashion or at all as a result of business deterioration, cash flow shortages or difficulty obtaining funding for programs or particular projects or due to macroeconomic conditions, geopolitical disruptions, changes in law or other challenges that they face. The airline industry is highly cyclical, and sustained economic growth and political stability in both developed and emerging markets are principal factors underlying long-term air traffic growth; the current macroeconomic and geopolitical environment and the potential for recession or armed conflict pose risks to the rate of that growth. Aviation sector activity is also particularly influenced by the actions of a small group of large original equipment manufacturers, as well as large airlines in various geographies. We have significant business with, and credit exposure to, some of our largest customers and accordingly our performance can be adversely affected by challenges that individual customers or the industry faces related to factors such as competition, the need for cost reduction, financial stability and soundness, the availability of aircraft leasing and financing alternatives, the satisfaction of certification or other regulatory requirements for aircraft in various jurisdictions, the retirement of older aircraft and other dynamics affecting the original equipment and aftermarket service markets, or by a significant disruption of air travel such as what occurred during the COVID-19 pandemic. A potential future disruption in connection with a terrorist incident, war, cyberattack, actual or threatened public health pandemic or emergency or recessionary economic environment that results in the loss of business and leisure traffic could also adversely affect our customers, their ability to fulfill their obligations to us in a timely fashion or at all, demand for our products and services and the viability of a customer’s business. (See also Risk Factors - Commercial aviation sector.) In addition, our customers include governmental entities
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within and outside the U.S., including the U.S. federal government. Sustained and increased funding from government customers supports research, new product development, production and aftermarket business for our Defense business, and a variety of domestic and international political, macroeconomic and geopolitical factors, including recession, can materially affect our customers’ ability to secure budget support and fund these activities year after year. We also at times face greater challenges collecting on receivables with customers that are sovereign governments or located in emerging markets. If there is significant deterioration in the global economy, in our sector, in financial markets or with particular significant counterparties, our results of operations, financial position and cash flows could be materially adversely affected.

Run-off insurance and banking operations - We continue to have exposure to our run-off insurance operations and Bank BPH mortgage portfolio in Poland. While in recent years we have greatly reduced the scope of our former financial services operations, we continue to retain significant exposure to legacy insurance and other financial services operations that will run off over a long period of time and, in the event of future adverse developments, could cause funding or liquidity stress. For example, it is possible that results of our statutory testing of insurance reserves in future years will require capital contributions to our insurance subsidiaries, even after the capital contribution made in the first quarter of 2024 that completed the contributions in connection with the statutory permitted practice approved in 2018 by the KID. Our statutory testing of insurance reserves is subject to a variety of assumptions, including assumptions about the discount rate (which is sensitive to changes in market interest rates), morbidity, mortality and future long-term care premium increases. Future adverse changes to these assumptions (to the extent not offset by any favorable changes to these assumptions) could result in an increase to future policy benefit reserves and, potentially, to the amount of capital we are required to contribute to our insurance subsidiaries (as discussed in the Other Items - Insurance section within the MD&A included in our Annual Report on Form 10-K for the year ended December 31, 2023). In addition, we have exposure to various financial counterparties that pose credit and other risks in the event of insolvency or other default. For example, a portion of our run-off insurance operations’ assets are held in trust accounts associated with reinsurance contracts. For our UFLIC subsidiary, such trust assets are currently held in trusts for the benefit of insurance company subsidiaries of Genworth, which has stated in the past that it will not bolster the capital position of its insurance subsidiaries. Solvency or other concerns about Genworth or its insurance company subsidiaries may cause those subsidiaries or their regulators to take or attempt to take actions that could adversely affect UFLIC, including control over assets in the relevant trusts. It is also possible that additional contingent liabilities and loss estimates for Bank BPH, in connection with the ongoing litigation in Poland related to its portfolio of residential mortgage loans denominated in or indexed to foreign currencies (see Note 23), will need to be recognized (or loss estimates may increase in the future) and will require additional capital contributions. Though we may consider strategic options to accelerate the further reduction in the size of these remaining financial services operations, such options may not be viable or attractive because of the associated cash payments, financial charges or other adverse effects. There can be no assurance that future liabilities, losses or impairments to the carrying value of assets within our financial services operations would not materially and adversely affect our business, financial position, cash flows or results of operations.

Borrowings & liquidity - We may face risks related to the refinancing of our debt, particularly in severely adverse market conditions, and future credit downgrades could adversely affect our liquidity, funding costs and related margins. We have significantly reduced our debt levels over the past several years through liability management actions, and we intend to maintain a sustainable investment-grade long-term credit rating. There can be no assurance that we will not face future credit rating downgrades as a result of factors such as the performance of our businesses or changes in rating application or methodology, and future downgrades could adversely affect our cost of funds, liquidity and competitive position. In addition, if we are unable to generate cash flows in accordance with our plans or face unforeseen needs for capital, we may adopt changes to our capital allocation plans (such as plans related to the timing or amounts of investments or capital expenditures, share repurchases or dividends) or take other actions. For additional discussion about our credit ratings and related considerations, refer to the Capital Resources and Liquidity section within MD&A.

Postretirement benefit plans - Increases in pension, healthcare and life insurance benefits obligations and costs can adversely affect our earnings, cash flows and further progress toward our leverage goals. Our results of operations, cash flow and financial condition may be positively or negatively affected by the amount of income or expense we record for our defined benefit pension plans. GAAP requires that we calculate income or expense for the plans using actuarial valuations, which reflect assumptions about financial markets, interest rates and other economic conditions such as the discount rate and the expected long-term rate of return on plan assets. We are also required to make an annual measurement of plan assets and liabilities, which may result in a significant reduction or increase to equity. The factors that impact our pension calculations are subject to changes in key economic indicators, and future decreases in the discount rate or low returns on plan assets can increase our funding obligations and adversely impact our financial results. In addition, although GAAP expense and pension funding contributions are not directly related, key economic factors that affect GAAP expense, such as sustained market volatility, would also likely affect the amount of cash we would be required to contribute to pension plans under ERISA. Such factors could also result in a failure to achieve expected returns on plan assets. In addition, there may be upward pressure on the cost of providing healthcare benefits to current and future retirees. There can be no assurance that the measures we have taken to control increases in these costs, or that the assignment of assets and liabilities with respect to certain U.S. and non-U.S. benefit plans in connection with the separation into three independent companies, will succeed in limiting cost increases, and continued upward pressure could reduce our profitability. For a discussion regarding how our financial statements have been and can be affected by our pension and healthcare benefit obligations, see Note 13 to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2023.

LEGAL AND COMPLIANCE RISKS. Legal and compliance risk relates to risks arising from the government and regulatory environment, legal proceedings and compliance with integrity policies and procedures, including matters relating to financial reporting and the environment, health and safety. Government and regulatory risk includes the risk that the government or regulatory actions will impose additional cost on us or require us to make adverse changes to our business models or practices.
2024 1Q FORM 10-Q 24



Regulatory - We are subject to a wide variety of laws, regulations and government policies that require ongoing compliance efforts and may change in significant ways. Our businesses are subject to regulation under a wide variety of U.S. federal and state and non-U.S. laws, regulations and policies that require ongoing compliance efforts. There can be no assurance that laws, regulations and policies will not be changed or interpreted or enforced in ways that will require us to modify our business models and objectives or affect our returns on investments by restricting existing activities and products, subjecting them to escalating costs or prohibiting them outright. In particular, recent trends globally toward increased protectionism, import and export controls, required licenses or authorizations to engage in business dealings with certain countries or entities, the use of tariffs, restrictions on outbound investment and other trade barriers can result in actions by governments around the world that have been and may continue to be disruptive and costly to our businesses, and can interfere with our global operating model and weaken our competitive position. In addition, changes in environmental and climate change laws, regulations or policies (including emissions pricing and taxes, emissions standards or sustainable finance, among others) affecting the aerospace and defense sector could lead to additional costs or compliance requirements, a need for additional investment in product designs, require carbon offset investments or otherwise negatively impact our businesses or competitive position. Other legislative and regulatory areas of significance for our businesses that U.S. and non-U.S. governments have focused and continue to focus on include cybersecurity, data privacy and sovereignty, artificial intelligence, anti-corruption, competition law, public procurement law, compliance with complex trade controls and economic sanctions laws, technical regulations or local content requirements that could result in market access criteria that our products cannot or do not meet, restrictions related to per- and polyfluoroalkyl substances (PFAS), foreign exchange intervention in response to currency volatility and currency controls that could restrict the movement of liquidity from particular jurisdictions. Potential changes to tax laws, including changes to taxation of global income, may have an effect on our subsidiaries' structure, operations, sales, liquidity, cash flows, capital requirements, effective tax rate and performance. For example, legislative or regulatory measures by U.S. federal, state or non-U.S. governments, or rules, interpretations or audits under new or existing tax laws such as global minimum taxes or other changes to the treatment of global income, could increase our cash tax costs and effective tax rate. Regulation or government scrutiny may impact the requirements for marketing our products and slow our ability to introduce new products, resulting in an adverse impact on our business. Furthermore, we make sales to U.S. and non-U.S. governments and other public sector customers, and we participate in various governmental financing programs, that require us to comply with strict governmental regulations. As a U.S. government contractor, we are also subject to risks relating to U.S. government audits and investigations that in the past have led, and in the future may lead, to cash withholds, fines, damages or other penalties. Inability to comply with applicable regulations could adversely affect our status with government customers or our ability to participate in projects, and could have collateral consequences such as suspension or debarment. Suspension or debarment, depending on the entity involved and length of time, can limit our ability to bid for new U.S. government contracts or business with other government-related customers, or to participate in projects involving multilateral development banks, and this could adversely affect our results of operations, financial position and cash flows.

Legal proceedings - We are subject to a variety of legal proceedings, disputes, investigations and legal compliance risks, including contingent liabilities from businesses that we have exited or are inactive. We are subject to a variety of legal proceedings, commercial disputes, legal compliance risks and environmental, health and safety compliance risks in virtually every part of the world. We, our representatives and the industries in which we operate are subject to continuing scrutiny by regulators, other governmental authorities and private sector entities or individuals in the U.S., the European Union, China and other jurisdictions, which have led or may, in certain circumstances, lead to enforcement actions, adverse changes to our business practices, fines and penalties, required remedial actions such as contaminated site clean-up or other environmental claims, or the assertion of private litigation claims and damages that could be material. For example, while in December 2020 we entered into a settlement to conclude a previously disclosed SEC investigation of GE, we remain subject to shareholder lawsuits related to the Company's financial performance, accounting and disclosure practices and related legacy matters from several years ago. We have observed that these proceedings related to claims about past financial performance and reporting pose particular reputational risks for the Company that can cause new allegations about past or current misconduct, even if unfounded, to have a more significant impact on our reputation and how we are viewed by investors, customers and others than they otherwise would. We also from time to time are involved in commercial discussions, disputes or proceedings in which, given the nature of our business that often involves large equipment and service orders and long-term commercial relationships, the claims asserted can be for significant amounts. The estimation of legal reserves or possible losses involves significant judgment and may not reflect the full range of uncertainties and unpredictable outcomes inherent in litigation, disputes and investigations, and the actual losses arising from particular matters may exceed our current estimates and adversely affect our results of operations. The risk management and compliance programs we have adopted and related actions that we take may not fully mitigate legal and compliance risks that we face, particularly in light of the global and diverse nature of our operations and the current enforcement environments in many jurisdictions. For example, when we investigate potential noncompliance under U.S. and non-U.S. law involving our employees, partners or third parties we work with, in some circumstances we make self-disclosures about our findings to the relevant authorities who may pursue or decline to pursue enforcement proceedings against us in connection with those matters. We are also subject to material trailing legal liabilities from businesses that we have exited or are inactive. We also expect that additional legal proceedings and other contingencies will arise from time to time. Moreover, we sell products and services in growth markets where claims arising from alleged violations of law, product failures or other incidents involving our products and services are adjudicated within legal systems that are less developed and less reliable than those of the U.S. or other more developed markets, and this can create additional uncertainty about the outcome of proceedings before courts or other governmental bodies in those markets. See Note 23 for further information about legal proceedings and other loss contingencies.

1Q 2024 FORM 10-Q 25


STATEMENT OF EARNINGS (LOSS) (UNAUDITED)Three months ended March 31
(In millions, per-share amounts in dollars)20242023
Sales of equipment$5,935 $5,287 
Sales of services9,239 8,407 
Insurance revenues (Note 13)879 791 
Total revenues (Note 8)16,053 14,486 
Cost of equipment sold6,024 5,605 
Cost of services sold5,596 5,124 
Selling, general and administrative expenses2,269 2,142 
Separation costs (Note 20)355 205 
Research and development507 431 
Interest and other financial charges278 269 
Insurance losses, annuity benefits and other costs (Note 13)627 684 
Non-operating benefit cost (income)(362)(385)
Total costs and expenses15,295 14,075 
Other income (loss) (Note 19)1,109 6,081 
Earnings (loss) from continuing operations before income taxes1,866 6,492 
Benefit (provision) for income taxes (Note 16)(318)(271)
Earnings (loss) from continuing operations1,549 6,221 
Earnings (loss) from discontinued operations, net of taxes (Note 2)14 1,257 
Net earnings (loss)1,563 7,478 
Less net earnings (loss) attributable to noncontrolling interests27 (27)
Net earnings (loss) attributable to the Company1,537 7,506 
Preferred stock dividends and other (145)
Net earnings (loss) attributable to GE common shareholders$1,537 $7,360 
Amounts attributable to GE common shareholders
Earnings (loss) from continuing operations$1,549 $6,221 
Less net earnings (loss) attributable to noncontrolling interests,
   continuing operations27 (27)
Earnings (loss) from continuing operations attributable to the Company1,522 6,248 
Preferred stock dividends and other (145)
Earnings (loss) from continuing operations attributable
   to GE common shareholders1,522 6,103 
Earnings (loss) from discontinued operations attributable
to GE common shareholders14 1,257 
Net earnings (loss) attributable to GE common shareholders$1,537 $7,360 
Earnings (loss) per share from continuing operations (Note 18)
Diluted earnings (loss) per share$1.38 $5.56 
Basic earnings (loss) per share$1.39 $5.60 
Net earnings (loss) per share (Note 18)
Diluted earnings (loss) per share$1.39 $6.71 
Basic earnings (loss) per share$1.41 $6.76 









2024 1Q FORM 10-Q 26


STATEMENT OF FINANCIAL POSITION
(In millions)March 31, 2024December 31, 2023
Cash, cash equivalents and restricted cash$18,447 $16,967 
Investment securities (Note 3)3,737 5,706 
Current receivables (Note 4)15,100 15,466 
Inventories, including deferred inventory costs (Note 5)17,603 16,528 
Current contract assets (Note 9)1,547 1,500 
All other current assets (Note 10)1,650 1,647 
Assets of businesses held for sale (Note 2)1,507 1,985 
  Current assets59,589 59,799 
Investment securities (Note 3)38,705 38,000 
Property, plant and equipment – net (Note 6)12,345 12,494 
Goodwill (Note 7)13,304 13,385 
Other intangible assets – net (Note 7)5,547 5,695 
Contract and other deferred assets (Note 9)5,431 5,406 
All other assets (Note 10)16,995 15,997 
Deferred income taxes (Note 16)10,316 10,575 
Assets of discontinued operations (Note 2)
1,709 1,695 
Total assets
$163,942 $163,045 
Short-term borrowings (Note 11)$1,032 $1,253 
Accounts payable and equipment project payables (Note 12)15,184 15,408 
Progress collections and current deferred income (Note 9)20,718 19,677 
All other current liabilities (Note 15)12,342 12,712 
Liabilities of businesses held for sale (Note 2)1,811 1,826 
  Current liabilities51,087 50,876 
Deferred income (Note 9)1,297 1,339 
Long-term borrowings (Note 11)19,493 19,711 
Insurance liabilities and annuity benefits (Note 13)37,934 39,624 
Non-current compensation and benefits11,002 11,214 
All other liabilities (Note 15)10,855 10,508 
Liabilities of discontinued operations (Note 2)
1,169 1,193 
Total liabilities
132,838 134,466 
Common stock (Note 17)15 15 
Accumulated other comprehensive income (loss) – net attributable to GE (Note 17)(5,603)(6,150)
Other capital
25,887 26,962 
Retained earnings
88,065 86,527 
Less common stock held in treasury
(78,508)(79,976)
Total GE shareholders’ equity
29,855 27,378 
Noncontrolling interests1,248 1,202 
Total equity31,104 28,579 
Total liabilities and equity
$163,942 $163,045 

1Q 2024 FORM 10-Q 27


STATEMENT OF CASH FLOWSThree months ended March 31
(In millions)20242023
Net earnings (loss)$1,563 $7,478 
(Earnings) loss from discontinued operations activities(14)(1,257)
Adjustments to reconcile net earnings (loss) to cash from (used for) operating activities:
Depreciation and amortization of property, plant and equipment378 367 
Amortization of intangible assets (Note 7)145 140 
(Gains) losses on purchases and sales of business interests (9)52 
(Gains) losses on retained and sold ownership interests and other equity securities (Note 19)(665)(5,906)
Principal pension plans cost (Note 14)(256)(271)
Principal pension plans employer contributions(53)(52)
Other postretirement benefit plans (net)(133)(181)
Provision (benefit) for income taxes318 271 
Cash recovered (paid) during the year for income taxes(105)(172)
Changes in operating working capital:
Decrease (increase) in current receivables235 536 
Decrease (increase) in inventories, including deferred inventory costs(1,216)(1,275)
Decrease (increase) in current contract assets(72)294 
Increase (decrease) in accounts payable and equipment project payables111 (201)
Increase (decrease) in progress collections and current deferred income1,095 205 
All other operating activities(297)128 
Cash from (used for) operating activities – continuing operations1,024 155 
Cash from (used for) operating activities – discontinued operations(32)(413)
Cash from (used for) operating activities992 (259)
Additions to property, plant and equipment and internal-use software(421)(298)
Dispositions of property, plant and equipment41 7 
Dispositions of retained ownership interests2,610 2,025 
Net (purchases) dispositions of insurance investment securities(1,141)(1,556)
All other investing activities(320)1,096 
Cash from (used for) investing activities – continuing operations769 1,273 
Cash from (used for) investing activities – discontinued operations38 (3,068)
Cash from (used for) investing activities808 (1,796)
Net increase (decrease) in borrowings (maturities of 90 days or less)(37)1 
Newly issued debt (maturities longer than 90 days) 9 
Repayments and other debt reductions (maturities longer than 90 days)(298)(1,815)
Dividends paid to shareholders(86)(203)
Redemption of GE preferred stock (3,000)
Purchases of GE common stock for treasury(322)(309)
All other financing activities540 87 
Cash from (used for) financing activities – continuing operations(204)(5,230)
Cash from (used for) financing activities – discontinued operations 1,999 
Cash from (used for) financing activities(204)(3,232)
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash(61)65 
Increase (decrease) in cash, cash equivalents and restricted cash$1,534 $(5,220)
Cash, cash equivalents and restricted cash at beginning of year$19,755 $19,092 
Cash, cash equivalents and restricted cash at March 31
21,290 13,871 
Less cash, cash equivalents and restricted cash of discontinued operations at March 31
1,391 1,180 
Cash, cash equivalents and restricted cash of continuing operations at March 31
$19,899 $12,691 
2024 1Q FORM 10-Q 28


STATEMENT OF COMPREHENSIVE INCOME (LOSS)Three months ended March 31
(In millions)20242023
Net earnings (loss)$1,563 $7,478 
Less: net earnings (loss) attributable to noncontrolling interests27 (27)
Net earnings (loss) attributable to the Company$1,537 $7,506 
Currency translation adjustments
(35)2,387 
Benefit plans
(198)(2,319)
Investment securities and cash flow hedges
(453)706 
Long-duration insurance contracts1,236 (1,793)
Less: other comprehensive income (loss) attributable to noncontrolling interests
2 (3)
Other comprehensive income (loss) attributable to the Company$547 $(1,017)
Comprehensive income (loss)$2,112 $6,458 
Less: comprehensive income (loss) attributable to noncontrolling interests
28 (30)
Comprehensive income (loss) attributable to the Company$2,084 $6,489 

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Three months ended March 31
(In millions)20242023
Preferred stock issued$ $3 
Common stock issued$15 $15 
Beginning balance(6,150)(2,272)
Currency translation adjustments(35)2,388 
Benefit plans(200)(2,317)
Investment securities and cash flow hedges
(453)706 
Long-duration insurance contracts1,236 (1,793)
Accumulated other comprehensive income (loss)$(5,603)$(3,289)
Beginning balance26,962 34,173 
Gains (losses) on treasury stock dispositions(1,191)(619)
Stock-based compensation114 73 
Other changes(a)2 (2,898)
Other capital$25,887 $30,729 
Beginning balance86,527 82,983 
Net earnings (loss) attributable to the Company1,537 7,506 
Dividends and other transactions with shareholders(b)1 (5,534)
Retained earnings$88,065 $84,955 
Beginning balance(79,976)(