GENERAL ELECTRIC CO

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.

1Q 2024 FORM 10-Q 11

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.

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:

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 operationswas 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 operationswas 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.