GENERAL ELECTRIC CO

(a)Included $3,000 million decrease substantially all in Other capital related to our redemption of GE Series D preferred stock in the first quarter of 2023.

(b)Included a $5,300 million decrease in Retained earnings reflecting a pro-rata distribution of approximately 80.1% of the shares of GE HealthCare on January 3, 2023.

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NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. Our financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP), which requires us to make estimates based on assumptions about current, and for some estimates, future, economic and market conditions, which affect reported amounts and related disclosures in our financial statements. Although our current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations, financial position and cash flows. Such changes could result in future impairments of goodwill, intangibles, long-lived assets and investment securities, revisions to estimated profitability on long-term product service agreements, incremental credit losses on receivables and debt securities, a change in the carrying amount of our tax assets and liabilities, or a change in our insurance liabilities and pension obligations as of the time of a relevant measurement event.

In preparing our Statement of Cash Flows, we make certain adjustments to reflect cash flows that cannot otherwise be calculated by changes in our Statement of Financial Position. These adjustments may include, but are not limited to, the effects of currency exchange, acquisitions and dispositions of businesses, businesses classified as held for sale, the timing of settlements to suppliers for property, plant and equipment, non-cash gains/losses and other balance sheet reclassifications.

We have reclassified certain prior-year amounts to conform to the current-year’s presentation. Unless otherwise noted, tables are presented in U.S. dollars in millions. Certain columns and rows may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in millions. Earnings per share amounts are computed independently for earnings from continuing operations, earnings from discontinued operations and net earnings. As a result, the sum of per-share amounts may not equal the total. Unless otherwise indicated, information in these notes to consolidated financial statements relates to continuing operations. Certain of our operations have been presented as discontinued. We present businesses whose disposal represents a strategic shift that has, or will have, a major effect on our operations and financial results as discontinued operations when the components meet the criteria for held for sale, are sold, or spun-off. See Note 2 for further information.

On April 2, 2024, GE completed the separation of its GE Vernova business into a separate, independent publicly traded company, GE Vernova Inc. (GE Vernova). See Note 24 for further information.

The accompanying consolidated financial statements and notes are unaudited. The results reported in these financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. These financial statements should be read in conjunction with the financial statements, notes and significant accounting policies included in our Annual Report on Form 10-K for the year ended December 31, 2023.

NOTE 2. BUSINESSES HELD FOR SALE AND DISCONTINUED OPERATIONS. In the fourth quarter of 2022, we signed a binding agreement to sell a portion of our Steam business within our Power segment to Électricité de France S.A. (EDF). We are working with EDF to complete the sale as soon as possible, subject to regulatory approvals and other closing conditions. Closing the transaction is expected to result in a significant gain.

In the fourth quarter of 2022, we classified our captive industrial insurance subsidiary, Electric Insurance Company, domiciled in Massachusetts, with assets of $514 million and liabilities of $339 million as of March 31, 2024, into held for sale. In the third quarter

of 2023, we signed a binding agreement to sell this business and expect to complete the sale, subject to regulatory approvals and other customary closing conditions, in the second quarter of 2024. In connection with the expected sale, to date we have recorded a cumulative loss of $126 million in Other income (loss) in our Statement of Earnings (Loss).

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.

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GE HealthCare. On January 3, 2023, we completed the previously announced separation of our HealthCare business (the Separation), into a separate, independent, publicly traded company, GE HealthCare Technologies Inc. (GE HealthCare). The Separation was structured as a tax-free spin-off, and was achieved through GE's pro-rata distribution of approximately 80.1% of the outstanding shares of GE HealthCare to holders of GE common stock. In connection with the Separation, the historical results of GE HealthCare and certain assets and liabilities included in the Separation are reported in GE's consolidated financial statements as discontinued operations.

We have continuing involvement with GE HealthCare primarily through a transition services agreement, through which GE and GE HealthCare continue to provide certain services to each other for a period of time following the Separation, and a trademark licensing agreement. For the three months ended March 31, 2024, we collected net cash of $115 million related to these activities.

Bank BPH. As previously reported, Bank BPH, along with other Polish banks, has been subject to ongoing litigation in Poland related to its portfolio of floating rate residential mortgage loans, with cases brought by individual borrowers seeking relief related to their foreign currency indexed or denominated mortgage loans in various courts throughout Poland. As previously reported, GE and Bank BPH approved the adoption of a settlement program and recorded a charge of $1,014 million in the quarter ended June 30, 2023. The estimate of total losses for borrower litigation at Bank BPH was $2,517 million and $2,669 million as of March 31, 2024 and December 31, 2023, respectively. In order to maintain appropriate regulatory capital levels, during the year ended December 31, 2023, we made the previously reported non-cash capital contributions in the form of intercompany loan forgiveness of $1,797 million; no incremental contributions from GE were required during the three months ended March 31, 2024. For further information about the recent actions and other factors that are relevant to the estimate of total losses for borrower litigation at Bank BPH, see Note 23. Future changes or adverse developments could increase our estimate of total losses and potentially require future cash contributions to Bank BPH.

The Bank BPH financing receivable portfolio is recorded at the lower of cost or fair value, less cost to sell, which reflects market yields and estimates with respect to ongoing borrower litigation. Earnings (loss) from discontinued operations included zero and $175 million in pre-tax charges for the three months ended March 31, 2024 and 2023, respectively, primarily related to the ongoing borrower litigation. At March 31, 2024, the total portfolio had a carrying value ofzero, net of a valuation allowance.

The tax benefit for the three months ended March 31, 2023 for GE HealthCare relates to preparatory steps for the spin-off, which resulted in taxable gain offset by a deferred tax asset and the reversal of valuation allowances for capital loss carryovers utilized against a portion of the gain.

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(a) Included $1,792 million and $1,963 million of valuation allowances against financing receivables held for sale, of which $1,553 million and $1,712 million related to estimated borrower litigation losses, and $964 million and $957 million in All other liabilities, related to estimated borrower litigation losses for Bank BPH’s foreign currency-denominated mortgage portfolio, as of March 31, 2024 and December 31, 2023, respectively. Accordingly, total estimated losses related to borrower litigation were $2,517 million and $2,669 million as of March 31, 2024 and December 31, 2023, respectively. As a result of the settlement program, the valuation allowance completely offsets the financing receivables balance as of March 31, 2024.

NOTE 3. INVESTMENT SECURITIES. The majority of our investment securities are held within our run-off insurance operations and are classified as non-current as they support the long-duration insurance liabilities and include debt securities all classified as available-for-sale, substantially all of which are investment-grade.

Our remaining equity shares in GE HealthCare, comprising 30.5 million shares (approximately 6.7% ownership interest) at March 31, 2024, are subject to a contractual lock-up restriction through May 15, 2024. Our senior note from AerCap, for which we have adopted the fair value option and matures in the fourth quarter of 2025, is still outstanding as of March 31, 2024.

The amortized cost of debt securities excludes accrued interest of $496 million and $466 million at March 31, 2024 and December 31, 2023, respectively, which is reported in All other current assets.

The estimated fair value of investment securities at March 31, 2024 decreased since December 31, 2023, primarily due to share sales of our GE HealthCare equity interest and higher market yields partially offset by new investments at Insurance and the mark-to-market effect on our equity interest in GE HealthCare.

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Total estimated fair value of debt securities in an unrealized loss position were $20,413 million and $18,730 million, of which $16,711 million and $17,146 million had gross unrealized losses of $(2,584) million and $(2,370) million and had been in a loss position for 12 months or more at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024, the majority of our U.S. and Non-U.S. corporate securities' gross unrealized losses were in the consumer, electric, technology and insurance industries. In addition, gross unrealized losses on our Mortgage and asset-backed securities included $(149) million related to commercial mortgage-backed securities (CMBS) collateralized by pools of commercial mortgage loans on real estate, and $(68) million related to asset-backed securities. The majority of our CMBS and asset-backed securities in an unrealized loss position have received investment-grade credit ratings from the major rating agencies. For our securities in an unrealized loss position, the losses are not indicative of credit losses, we currently do not intend to sell the investments, and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost basis.

Contractual maturities of our debt securities (excluding mortgage and asset-backed securities) at March 31, 2024 are as follows:

We expect actual maturities to differ from contractual maturities because borrowers have the right to call or prepay certain obligations.

The majority of our equity securities are classified within Level 1 and the majority of our debt securities are classified within Level 2, as their valuation is determined based on significant observable inputs. Investments with a fair value of $6,991 million and $6,841 million are classified within Level 3, as significant inputs to their valuation models are unobservable at March 31, 2024 and December 31, 2023, respectively. During the three months ended March 31, 2024 and 2023, there were no significant transfers into or out of Level 3.

In addition to the equity securities described above, we held $1,092 million and $1,012 million of equity securities without RDFV, including $1,019 million and $939 million at Insurance, as of March 31, 2024 and December 31, 2023, respectively, that are classified within non-current All other assets in our Statement of Financial Position. Fair value adjustments, including impairments, recorded in earnings were $23 million and $9 million for the three months ended March 31, 2024 and 2023, respectively. These are primarily limited partnership investments in private equity, infrastructure and real estate funds that are measured at net asset value per share (or equivalent) as a practical expedient to estimated fair value and are excluded from the fair value hierarchy.

NOTE 4. CURRENT AND LONG-TERM RECEIVABLES

(a) Revenue sharing program receivables in Aerospace are amounts due from third parties who participate in engine programs by developing and supplying certain engine components through the life of the program. The participants share in program revenues, receive a share of customer progress payments and share costs related to discounts and warranties.

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(a) Corporate balances include intercompany eliminations related to the sales of equipment and services.

Sales of customer receivables. From time to time, the Company sells current or long-term receivables to third parties in response to customer-sponsored requests or programs, to facilitate sales, or for risk mitigation purposes. The Company sold current customer receivables to third parties and subsequently collected $306 million and $464 million in the three months ended March 31, 2024 and 2023, respectively, related primarily to our participation in customer-sponsored supply chain finance programs. Within these programs, primarily in Renewable Energy and Aerospace, the Company has no continuing involvement; fees associated with the transferred receivables are covered by the customer and cash is received at the original invoice due date. Included in the sales of customer receivables in the first quarter of 2023, was $77 million in our Gas Power business, primarily for risk mitigation purposes.

NOTE 5. INVENTORIES, INCLUDING DEFERRED INVENTORY COSTS

(a) Represents cost deferral for shipped goods (such as components for wind turbine assemblies within our Renewable Energy segment) and labor and overhead costs on time and material service contracts (primarily originating in Power and Aerospace) and other costs for which the criteria for revenue recognition has not yet been met.

NOTE 6. PROPERTY, PLANT AND EQUIPMENT AND OPERATING LEASES

Operating Lease Liabilities. Our consolidated operating lease liabilities, included in All other liabilities in our Statement of Financial Position, were $1,908 million and $1,973 million, as of March 31, 2024 and December 31, 2023, respectively. Expense on our operating lease portfolio, primarily from our long-term fixed leases, was $188 million and $195 million for the three months ended March 31, 2024 and 2023, respectively.

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NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS

(a) Corporate balance comprises our Digital business.

We assess the possibility that a reporting unit’s fair value has been reduced below its carrying amount due to the occurrence of events or circumstances between annual impairment testing dates. In the first quarter of 2024, we did not identify any reporting units that required an interim impairment test. However, we continue to monitor the operating results and cash flow forecasts of our Additive reporting unit in our Aerospace segment as the fair value of this reporting unit was not significantly in excess of its carrying value based on the results of our most recent annual impairment test, performed in the fourth quarter of 2023. At March 31, 2024, our Additive reporting unit had goodwill of $244 million.

Intangible assets decreased $148 million during the three months ended March 31, 2024, primarily as a result of amortization. Consolidated amortization expense was $145 million and $140 million in the three months ended March 31, 2024 and 2023, respectively.

NOTE 8. REVENUES

(a) Does not give effect to post-GE Vernova separation eliminations and Corporate adjustments.

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REMAINING PERFORMANCE OBLIGATION. As of March 31, 2024, the aggregate amount of the contracted revenues allocated to our unsatisfied (or partially unsatisfied) performance obligations was $265,870 million. We expect to recognize revenue as we satisfy our remaining performance obligations as follows: (1) equipment-related remaining performance obligation of $57,775 million, of which 41%,65% and 88% is expected to be satisfied within 1,2 and 5 years, respectively; and (2) services-related remaining performance obligation of $208,095 million, of which 13%,46%,69% and 84% is expected to be recognized within 1,5,10 and 15 years, respectively, and the remaining thereafter.

NOTE 9. CONTRACT AND OTHER DEFERRED ASSETS & PROGRESS COLLECTIONS AND DEFERRED INCOME

Contract and other deferred assets increased $72 million in the three months ended March 31, 2024, primarily due to the timing of revenue recognition ahead of billing milestones on long-term equipment contracts and short-term and other services agreements, partially offset by a decrease in long-term service agreements. Our long-term service agreements decreased primarily due to billings of $3,155 million and net unfavorable changes in estimated profitability of $162 million at Aerospace and $29 million at Power, partially offset by revenues recognized of $3,029 million.

(a) Included costs incurred prior to production (such as requisition engineering) for equipment production contracts, primarily within our Aerospace segment, which are amortized ratably over each unit produced.

(b) Included amounts due from customers at Aerospace for the sales of engines, spare parts and services, and at Power, for the sale of services upgrades, which we collect through incremental fixed or usage-based fees from servicing the equipment under long-term service agreements.

Progress collections and deferred income increased $999 million primarily due to collections received in excess of revenue recognition at Renewable Energy, Power and Aerospace. Revenues recognized for contracts included in a liability position at the beginning of the year were $4,628 million and $4,468 million for the three months ended March 31, 2024 and 2023, respectively.

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NOTE 10. ALL OTHER ASSETS. All other current assets and All other assets primarily include equity method investments, Insurance cash and cash equivalents, receivables and other investments in our run-off insurance operations, long-term customer and sundry receivables (see Note 4), pension surplus and prepaid taxes and other deferred charges. All other non-current assets increased $999 million in the three months ended March 31, 2024, primarily due to an increase in Insurance cash and cash equivalents of $581 million, an increase in equity method investments of $229 million and an increase in prepaid taxes and deferred charges of $179 million. Insurance cash and cash equivalents was $1,364 million and $784 million at March 31, 2024 and December 31, 2023, respectively.

NOTE 11. BORROWINGS

See Note 21 for further information about borrowings and associated hedges.

NOTE 12. ACCOUNTS PAYABLE AND EQUIPMENT PROJECT PAYABLES

(a) Primarily related to projects at Power and Renewable Energy.

We facilitate voluntary supply chain finance programs with third parties, which provide participating suppliers the opportunity to sell their GE receivables to third parties at the sole discretion of both the suppliers and the third parties. Total supplier invoices paid through these third-party programs were $1,705 million and $2,079 million for the three months ended March 31, 2024 and 2023, respectively.

NOTE 13. INSURANCE LIABILITIES AND ANNUITY BENEFITS. Insurance liabilities and annuity benefits comprise substantially all obligations to annuitants and insureds in our run-off insurance operations. Our insurance operations (net of eliminations) generated revenues of $879 million and $791 million, profit was $200 million and $70 million and net earnings was $158 million and $54 million for the three months ended March 31, 2024 and 2023, respectively. These operations were primarily supported by investment securities of $38,304 million and $37,592 million, limited partnerships of $3,498 million and $3,300 million, and a diversified commercial mortgage loan portfolio substantially all collateralized by first liens on U.S. commercial real estate properties of $1,924 million and $1,947 million (net of allowance for credit losses of $61 million and $48 million), as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, the commercial mortgage loan portfolio had 4 delinquent loans,1 non-accrual loan and about one-third of the portfolio was held in the office sector, which had a weighted average loan-to-value ratio of 70%, debt service coverage of 1.6, and no scheduled maturities through 2025. A summary of our insurance liabilities and annuity benefits is presented below:

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The following tables summarize balances of and changes in future policy benefits reserves.

The Statement of Earnings (Loss) for the three months ended March 31, 2024 and 2023 included gross premiums or assessments of $207 million and $214 million and interest accretion of $439 million and $435 million, respectively. For the three months ended March 31, 2024 and 2023, gross premiums or assessments were substantially all related to long-term care of $123 million and $124 million and life of $79 million and $84 million, while interest accretion was substantially all related to long-term care of $318 million and $310 million and structured settlement annuities of $111 million and $115 million, respectively.

The following table provides the amount of undiscounted and discounted expected future gross premiums and expected future benefits and expenses for nonparticipating traditional contracts.

(a) Determined using the current discount rate as of March 31, 2024 and 2023, respectively.

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The following table provides the weighted-average durations of and weighted-average interest rates for the liability for future policy benefits.

(a) Determined using the current discount rate as of March 31, 2024 and 2023.

As of March 31, 2024 and 2023, policyholders account balances totaled $1,686 million and $1,921 million, respectively. As our insurance operations are in run-off, changes in policyholder account balances for the three months ended March 31, 2024 and 2023 are primarily attributed to surrenders, withdrawals, and benefit payments of $106 million and $120 million, partially offset by net additions from separate accounts and interest credited of $66 million and $75 million, respectively. Interest on policyholder account balances is generally credited at minimum guaranteed rates, primarily between 3.0% and 6.0% at both March 31, 2024 and 2023.

Following approval of a statutory permitted accounting practice in 2018 by our primary regulator, the Kansas Insurance Department, we have since provided a total of $15,035 million of capital contributions to our run-off insurance subsidiaries, including the final contribution of $1,820 million in the first quarter of 2024.

See Notes 3 and 10 for further information related to our run-off insurance operations.

NOTE 14. POSTRETIREMENT BENEFIT PLANS. We sponsor a number of pension and retiree health and life insurance benefit plans that we present inthree categories, principal pension plans, other pension plans and principal retiree benefit plans. Please refer to Note 13 to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2023 and Note 24 for further information.

The components of benefit plans cost other than the service cost are included in the caption Non-operating benefit costs in our Statement of Earnings (Loss).

Principal retiree benefit plans income was $36 million and $36 million for the three months ended March 31, 2024 and 2023, respectively. Other pension plans income was $13 million and $29 million for the three months ended March 31, 2024 and 2023, respectively.

We have a defined contribution plan for eligible U.S. employees that provides employer contributions, which were $89 million and $77 million for the three months ended March 31, 2024 and 2023, respectively. We also have deferred incentive compensation plans and deferred salary plans for eligible employees with expenses of $9 million and $20 million for the three months ended March 31, 2024 and 2023.

NOTE 15. CURRENT AND ALL OTHER LIABILITIES. Current and All other liabilities primarily include liabilities for customer sales allowances, equipment project and commercial liabilities, loss contracts, employee compensation and benefits, income taxes payable and uncertain tax positions, operating lease liabilities (see Note 6), environmental, health and safety remediations and product warranties (see Note 23). All other current liabilities decreased $370 million in the three months ended March 31, 2024, primarily due to decreases in sales discounts and allowances of $107 million, interest payable of $65 million and taxes payable of $51 million. All other liabilities increased $347 million in the three months ended March 31, 2024, primarily due to increases in uncertain and other income taxes and related liabilities of $295 million and environmental and health and safety liabilities of $100 million.

NOTE 16. INCOME TAXES. Our effective income tax rate was 17.0% and 4.2% for the three months ended March 31, 2024 and 2023, respectively. The tax rate for 2024 was reduced compared to the U.S. statutory rate of 21% primarily due to gains associated with our retained and sold ownership interests, which we expect to recover without tax and U.S. business credits. This was partially offset by losses in foreign jurisdictions that are not likely to be utilized. The low tax rate for 2023 was reduced compared to the U.S. statutory rate of 21% primarily due to gains associated with our retained and sold ownership interests, which we expect to recover without tax. This was partially offset by separation income tax costs including disallowed expenses and valuation allowances related to the spin of GE HealthCare and by losses in foreign jurisdictions that are not likely to be utilized.

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The OECD (Organisation for Economic Co-operation and Development) has proposed a global minimum tax of 15% of reported profits (Pillar 2) that has been agreed upon in principle by over 140 countries. During 2023, many countries took steps to incorporate Pillar 2 model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar 2. Accordingly, we still are evaluating the potential consequences of Pillar 2 on our longer-term financial position. In 2024, we expect to incur insignificant tax expenses in connection with Pillar 2.

The IRS is currently auditing our consolidated U.S. income tax returns for 2016-2020.

NOTE 17. SHAREHOLDERS’ EQUITY

(a)The total reclassification from AOCI included $195 million, including currency translation of $2,234 million and benefit plans of $(2,030) million, net of taxes, in first quarter of 2023 related to the spin-off of GE HealthCare.

Preferred stock. On September 15, 2023 we redeemed the remaining outstanding shares of GE preferred stock. GE preferred stock shares outstanding was 2,795,444 at March 31, 2023. We redeemed $3,000 million of GE Series D preferred stock in the first quarter of 2023.

Common stock. GE common stock shares outstanding were 1,094,606,676 and 1,088,415,995 at March 31, 2024 and December 31, 2023, respectively. For further information on our common and preferred stock issuances, please refer to our Annual Report on Form 10-K for the year ended December 31, 2023.

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NOTE 18. EARNINGS PER SHARE INFORMATION

(a) For the three months ended March 31, 2023, included $(30) million related to excise tax on preferred share redemptions.

(b) Outstanding stock awards not included in the computation of diluted earnings (loss) per share because their effect was antidilutive.

Our unvested restricted stock unit awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and, therefore, are included in the computation of earnings per share pursuant to the two-class method. For the three months ended March 31, 2024 and 2023, application of this treatment had an insignificant effect.

NOTE 19. OTHER INCOME (LOSS)

Our investment in GE HealthCare comprises 30.5 million shares (approximately 6.7% ownership interest) at March 31, 2024. During the three months ended March 31, 2024, we received total proceeds of $2,602 million from the disposition of 31.1 million shares of GE HealthCare.

NOTE 20. RESTRUCTURING CHARGES AND SEPARATION COSTS

RESTRUCTURING AND OTHER CHARGES. This table is inclusive of all restructuring charges in our segments and at Corporate, and the charges are shown below for the business where they originated. Separately, in our reported segment results, 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.

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(a) Includes $125 million and $75 million, primarily in non-cash impairment, accelerated depreciation and other charges for the three months ended March 31, 2024 and 2023, respectively, not reflected in the liability table below.

(b) Primarily for employee severance payments, contract and lease terminations.

An analysis of changes in the liability for restructuring follows:

(a) Includes actuarial determined post-employment severance benefits reserve of $325 million and $353 million as of March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024 and 2023, respectively, restructuring primarily included exit activities related to the restructuring programs announced in 2022, reflecting lower Corporate shared-service and footprint needs as a result of the GE HealthCare spin-off, and exit activities across our businesses planned to be part of GE Vernova, primarily reflecting the selectivity strategy to operate in fewer markets and to simplify and standardize product variants at Renewable Energy. This plan was expanded during the third quarter of 2023 to include the consolidation of the global footprint and related resources at our Power business to better serve our customers.

SEPARATION COSTS. In November 2021, the company announced its plan to form three industry-leading, global public companies focused on the growth sectors of aviation, healthcare, and energy. As a result of this plan, we have incurred and expect to continue to incur separation, transition, and operational costs, which will depend on specifics of the transactions.

For the three months ended March 31, 2024 and 2023, respectively, we incurred $355 million and $205 million in pre-tax costs and paid $247 million and $204 million in cash, primarily related to employee costs, professional fees, costs to establish certain stand-alone functions and information technology systems, and other transformation and transaction costs to transition to stand-alone public companies. These costs are presented as separation costs in our consolidated Statement of Earnings (Loss). In addition, we recognized $54 million of net tax benefit and $56 million of net tax expense primarily associated with planned legal entity separation and tax on changes to indefinite reinvestment of foreign earnings.

As discussed in Note 2, GE completed the separation of its HealthCare business into a separate, independent publicly traded company, GE HealthCare Technologies Inc. As a result, pre-tax separation costs specifically identifiable to GE HealthCare are now reflected in discontinued operations. We incurred zero and $20 million in pre-tax costs, recognized zero and $4 million of tax benefits, and spent $9 million and $85 million in cash related to GE HealthCare for the three months ended March 31, 2024 and 2023, respectively.

NOTE 21. FINANCIAL INSTRUMENTS. The following table provides information about assets and liabilities not carried at fair value and excludes finance leases, equity securities without readily determinable fair value and non-financial assets and liabilities. Substantially all of these assets are considered to be Level 3 and the vast majority of our liabilities’ fair value are considered Level 2.

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Assets and liabilities that are reflected in the accompanying financial statements at fair value are not included in the above disclosures; such items include cash and equivalents, investment securities and derivative financial instruments.

DERIVATIVES AND HEDGING. Our policy requires that derivatives are used solely for managing risks and not for speculative purposes. We use derivatives to manage currency risks related to foreign exchange, and interest rate and currency risk between financial assets and liabilities, and certain equity investments and commodity prices.

FAIR VALUE HEDGES. As of March 31, 2024, all fair value hedges were terminated. Gains (losses) associated with the terminated hedging relationships will continue to amortize into interest expense until the hedged borrowings mature. The cumulative amount of hedging adjustments of $1,130 million (all on discontinued hedging relationships) was included in the carrying amount of the previously hedged liability of $8,803 million. At March 31, 2023, the cumulative amount of hedging adjustments of $1,226 million (all on discontinued hedging relationships) was included in the carrying amount of the previously hedged liability of $8,817 million. The cumulative amount of hedging adjustments was primarily recorded inlong-term borrowings.

(a) Primarily related to currency exchange contracts.

(b) The carrying value of foreign currency debt designated as net investment hedges was $4,655 million and $3,398 million as of March 31, 2024 and 2023, respectively. The total reclassified from AOCI into earnings waszero andzero for the years ended March 31, 2024 and 2023, respectively.

Changes in the fair value of cash flow hedges are recorded in AOCI and recorded in earnings in the period in which the hedged transaction occurs. The total amount in AOCI related to cash flow hedges of forecasted transactions was a $25 million loss as of March 31, 2024. We expect to reclassify $43 million of loss to earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions. As of March 31, 2024, the maximum term of derivative instruments that hedge forecasted transactions was approximately 12 years.

The table below presents the effects of hedges and resulting gains (losses) of our derivative financial instruments in the Statement of Earnings (Loss):

(a) Amounts are inclusive of cost of sales and other income (loss).

(b) SG&A was primarily driven by hedges of deferred incentive compensation, and hedges of remeasurement of monetary assets and liabilities.

COUNTERPARTY CREDIT RISK. Our exposures to counterparties were $381 million and $374 million at March 31, 2024 and December 31, 2023, respectively. Counterparties' exposures to our derivative liability were $80 million and $120 million at March 31, 2024 and December 31, 2023, respectively.

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NOTE 22. VARIABLE INTEREST ENTITIES. In our Statement of Financial Position, we have assets of $240 million and $117 million and liabilities of $262 million and $203 million at March 31, 2024 and December 31, 2023, respectively, in consolidated Variable Interest Entities (VIEs). These entities were created to help our customers facilitate or finance the purchase of GE equipment and services, and to manage our industrial insurance exposure through an insurance captive, and have no features that could expose us to losses that would significantly exceed the difference between the consolidated assets and liabilities.

Our investments in unconsolidated VIEs were $6,977 million and $6,657 million at March 31, 2024 and December 31, 2023, respectively. Of these investments, $1,293 million and $1,272 million were owned by Energy Financial Services (EFS), comprising equity method investments, primarily renewable energy tax equity investments, at March 31, 2024 and December 31, 2023, respectively. In addition, $5,447 million and $5,151 million were owned by our run-off insurance operations, primarily comprising equity method investments at March 31, 2024 and December 31, 2023, respectively. Our maximum exposure to loss in respect of unconsolidated VIEs is increased by our commitments to make additional investments in these entities described in Note 23.

NOTE 23. COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES AND OTHER LOSS CONTINGENCIES

COMMITMENTS. We had total investment commitments of $3,648 million and unfunded lending commitments, primarily at EFS, of $582 million at March 31, 2024. The investment commitments primarily comprise investments by our run-off insurance operations in other assets and investment securities of $3,570 million and included within these commitments are obligations to make investments in unconsolidated VIEs of $3,515 million. See Note 22 for further information.

As of March 31, 2024, in our Aerospace segment, we have committed to provide financing assistance of $2,676 million of future customer acquisitions of aircraft equipped with our engines.

GUARANTEES. Credit support. We have provided $909 million of credit support on behalf of certain customers or associated companies, predominantly joint ventures and partnerships, using arrangements such as standby letters of credit and performance guarantees, and a line of credit to support our consolidated subsidiaries. The liability for such credit support was $17 million.

Indemnification agreements – Continuing Operations. GE has obligations under the Tax Matters Agreement to indemnify GE HealthCare for certain tax costs and other indemnifications of $35 million, which are fully reserved. In addition, we have $285 million of other indemnification commitments, including representations and warranties in sales of business assets, for which we recorded a liability of $71 million.

Indemnification agreements - Discontinued Operations. Following the Separation of GE HealthCare on January 3, 2023, GE has remaining performance and bank guarantees on behalf of its former HealthCare business, with a maximum aggregate exposure of $25 million. GE also has obligations under the Transition Services Agreement and Tax Matters Agreement to indemnify GE HealthCare for certain technology and tax costs of $77 million, which are fully reserved. In addition, we have provided specific indemnities to other buyers of assets of our business that, in the aggregate, represent a maximum potential claim of $710 million with related reserves of $69 million. See Note 24 for further information on GE Vernova.

PRODUCT WARRANTIES. We provide for estimated product warranty expenses when we sell the related products. Because warranty estimates are forecasts that are based on the best available information, mostly historical claims experience, claims costs may differ from amounts provided. The liability for product warranties was $1,999 million and $2,053 million at March 31, 2024 and December 31, 2023.

LEGAL MATTERS. The following information supplements and amends the discussion of Legal Matters in Note 24 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023; refer to that discussion for information about previously reported legal matters that are not updated below. In the normal course of our business, we are involved from time to time in various arbitrations, class actions, commercial litigation, investigations and other legal, regulatory or governmental actions, including the significant matters described below that could have a material impact on our results of operations. In many proceedings, including the specific matters described below, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the size or range of the possible loss, and accruals for legal matters are not recorded until a loss for a particular matter is considered probable and reasonably estimable. Given the nature of legal matters and the complexities involved, it is often difficult to predict and determine a meaningful estimate of loss or range of loss until we know, among other factors, the particular claims involved, the likelihood of success of our defenses to those claims, the damages or other relief sought, how discovery or other procedural considerations will affect the outcome, the settlement posture of other parties and other factors that may have a material effect on the outcome. For these matters, unless otherwise specified, we do not believe it is possible to provide a meaningful estimate of loss at this time. Moreover, it is not uncommon for legal matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated.

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Alstom legacy legal matters. In 2015, GE acquired the Steam Power, Renewables and Grid businesses from Alstom, which prior to our acquisition were the subject of significant cases involving anti-competitive activities and improper payments. We had reserves of $391 million and $393 million at March 31, 2024 and December 31, 2023, respectively, for legal and compliance matters related to the legacy business practices that were the subject of cases in various jurisdictions. Allegations in these cases relate to claimed anti-competitive conduct or improper payments in the pre-acquisition period as the source of legal violations or damages. Given the significant litigation and compliance activity related to these matters and the ongoing efforts to resolve them, it is difficult to assess whether the disbursements will ultimately be consistent with the reserve established. The estimation of this reserve may not reflect the full range of uncertainties and unpredictable outcomes inherent in litigation and investigations of this nature, and at this time we are unable to develop a meaningful estimate of the range of reasonably possible additional losses beyond the amount of this reserve. Factors that can affect the ultimate amount of losses associated with these and related matters include the way cooperation is assessed and valued, prosecutorial discretion in the determination of damages, formulas for determining disgorgement, fines or penalties, the duration and amount of legal and investigative resources applied, political and social influences within each jurisdiction, and tax consequences of any settlements or previous deductions, among other considerations. Actual losses arising from claims in these and related matters could exceed the amount provided. With the spin-off of GE Vernova on April 2, 2024, the liabilities associated with these matters transferred to GE Vernova.

Shareholder and related lawsuits. Since November 2017, several putative shareholder class actions under the federal securities laws were filed against GE and certain affiliated individuals and consolidated into a single action currently pending in the U.S. District Court for the Southern District of New York (the Hachem case, also referred to as the Sjunde AP-Fonden case). The complaint against defendants GE and current and former GE executive officers alleged violations of Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934 related to insurance reserves and accounting for long-term service agreements and seeks damages on behalf of shareholders who acquired GE stock between February 27, 2013 and January 23, 2018. GE filed a motion to dismiss in December 2019. In January 2021, the court granted the motion to dismiss as to the majority of the claims. Specifically, the court dismissed all claims related to insurance reserves, as well as all claims related to accounting for long-term service agreements, with the exception of certain claims about historic disclosures related to factoring in the Power business that survive as to GE and its former CFO Jeffrey S. Bornstein. All other individual defendants have been dismissed from the case. In April 2022, the court granted the plaintiffs' motion for class certification for shareholders who acquired stock between February 26, 2016 and January 23, 2018. In September 2022, GE filed a motion for summary judgment on the plaintiffs' remaining claims, which the court denied in September 2023, except as to claims arising from disclosures made between November 2017 and January 2018. In April 2024, the court scheduled a trial date for November 2024.

GE Retirement Savings Plan class actions. In 2017, four putative class action lawsuits were filed regarding the oversight of the GE RSP, and those class actions were consolidated into a single action in the U.S. District Court for the District of Massachusetts. The consolidated complaint named as defendants GE, GE Asset Management, current and former GE and GE Asset Management executive officers and employees who served on fiduciary bodies responsible for aspects of the GE RSP during the class period. Like similar lawsuits that were brought against other companies in recent years, this action alleged that the defendants breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA) in their oversight of the GE RSP, principally by retaining five proprietary funds that plaintiffs alleged were underperforming as investment options for plan participants and by charging higher management fees than some alternative funds. The plaintiffs sought unspecified damages on behalf of a class of GE RSP participants and beneficiaries from September 26, 2011 through the date of any judgment. In March 2024, the court granted final approval of the previously reported class action settlement.

Bank BPH. As previously reported, Bank BPH, along with other Polish banks, has been subject to ongoing litigation in Poland related to its portfolio of floating rate residential mortgage loans, with cases brought by individual borrowers seeking relief related to their foreign currency indexed or denominated mortgage loans in various courts throughout Poland. For a number of years, we have observed an increase in the total number of lawsuits being brought against Bank BPH and other banks in Poland by current and former borrowers, and we expect this to continue in future reporting periods. As previously reported, GE and Bank BPH approved the adoption of a settlement program and recorded an additional charge of $1,014 million in the quarter ended June 30, 2023. The estimate of total losses for borrower litigation at Bank BPH was $2,517 million and $2,669 million as of March 31, 2024 and December 31, 2023, respectively. The estimate accounts for the costs of payments to borrowers who we estimate will participate in the settlement program, as well as estimates for the results of litigation with other borrowers, which in either case can exceed the value of the current loan balance, and represents our best estimate of the total losses we expect to incur over time. However, there are a number of factors that could affect the estimate in the future; refer to the disclosure about Bank BPH in our Annual Report on Form 10-K for the year ended December 31, 2023.

ENVIRONMENTAL, HEALTH AND SAFETY MATTERS. Our operations, like operations of other companies engaged in similar businesses, involve the use, disposal and cleanup of substances regulated under environmental protection laws and nuclear decommissioning regulations. We record reserves for obligations for ongoing and future environmental remediation activities, such as the Housatonic River cleanup, and for additional liabilities we expect to incur in connection with previously remediated sites, such as natural resource damages for the Hudson River where GE completed dredging in 2019. Additionally, like many other industrial companies, we and our subsidiaries are defendants in various lawsuits related to alleged exposure by workers and others to asbestos or other hazardous materials. Liabilities for environmental remediation, nuclear decommissioning and worker exposure claims exclude possible insurance recoveries. It is reasonably possible that our exposure will exceed amounts accrued. However, due to uncertainties about the status of laws, regulations, technology and information related to individual sites and lawsuits, such amounts are not reasonably estimable. Total reserves related to environmental remediation, nuclear decommissioning and worker exposure claims were$2,537 million and$2,465 million at March 31, 2024 and December 31, 2023, respectively.

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NOTE 24. SUBSEQUENT EVENT. On April 2, 2024 (the Distribution Date), GE completed the previously announced separation of its GE Vernova business, into a separate, independent publicly traded company, GE Vernova Inc. (GE Vernova). 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. On the Distribution Date, each holder of record of GE common stock received one share of GE Vernova common stock for every four shares of GE common stock held. As a result of the separation, GE Vernova became an independent public company that trades under the symbol “GEV” on the New York Stock Exchange and we will no longer consolidate GE Vernova into our financial results.

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 the Company's consolidated financial statements as discontinued operations beginning in the second quarter of 2024.

Also in connection with the separation, the Company entered into various agreements to effect the separation and provide a framework for the relationship between it and GE Vernova, including a Separation and Distribution Agreement (SDA), a Tax Matters Agreement and a Transition Services Agreement (TSA).

In connection with the separation and as a result of the legal split of certain plans as set forth in Note 13 in our Annual Report on Form 10-K for the year ended December 31, 2023, net liabilities of approximately $1.7 billion associated with GE's postretirement benefit plans, including a portion of the principal pension plans, the principal retiree benefit plans and other pension plans were transferred to GE Vernova. Deferred compensation arrangements and other compensation and benefits obligations of approximately $0.2 billion were also transferred to GE Vernova. The legal split and transfer of the plans and the related liabilities and obligations to GE Vernova will impact our assumptions and projections used to determine the funding and costs of the Company’s remaining plans.

In connection with the separation, the Company contributed $0.5 billion of cash to fund GE Vernova’s future operations such that GE Vernova’s cash balance on the date of Separation was $4.2 billion, inclusive of $0.1 billion of cash reported in assets of businesses held for sale.

Following the separation, the Company has remaining performance and bank guarantees on behalf of GE Vernova. To support GE Vernova in selling products and services globally, the Company 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”). Under the SDA, GE Vernova is obligated to use reasonable best efforts to replace the Company as the guarantor on or terminate all such credit support instruments. Until such termination or replacement, in the event of non-fulfillment of contractual obligations by the relevant obligor(s), the Company could be obligated to make payments under the applicable instruments. Under the SDA, GE Vernova is obligated to reimburse and indemnify the Company for any such payments. Beginning in 2025, GE Vernova will pay a quarterly fee to the Company based on amounts related to the GE credit support. 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 except for certain financial guarantees and trade finance instruments with a maximum exposure of approximately $1.5 billion, which are not expected to exceed a year beyond separation. The underlying obligations are predominantly customer contracts that GE Vernova performs in the normal course of its business. We have no known instances historically where payments or performance from the Company were required under parent company guarantees relating to GE Vernova customer contracts. The Company also has performance obligations related to GE Vernova's supply chain finance program and an environmental matter with a maximum aggregate exposure of $2.3 billion, of which $1.6 billion is not expected to exceed a year beyond separation.

In addition, under the SDA, TSA, and TMA agreements, the Company also has an obligation to indemnify GE Vernova for certain of its technology costs, separation costs for certain facilities, severance costs, environmental matters and tax matters of approximately $0.6 billion.