GENERAL ELECTRIC CO
For the period ended Jun 30, 2024. Filed Jul 23, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 23, 2024
GE$323.24+2.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-23.
0000040545-24-000113
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)Consolidated ResultsSegment OperationsCorporateOther Consolidated InformationCapital Resources and LiquidityCritical Accounting EstimatesOther ItemsNon-GAAP Financial MeasuresCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-23.
0000040545-24-000176
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)Consolidated ResultsSegment OperationsCorporateOther Consolidated InformationCapital Resources and LiquidityCritical Accounting EstimatesOther ItemsNon-GAAP Financial MeasuresThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 97 current paragraphs.
13 unchanged; 41 reworded; 43 added; 48 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 24 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (43)
Current report
As of June 30, 2024, RPO increased $5.8 billion (4%) from December 31, 2023, primarily at Commercial Engines & Services, as a result of engines contracted under long-term service agreements that have now been put into service and from equipment orders outpacing revenues recognized, and at Defense & Propulsion Technologies, driven by Defense & Systems equipment orders outpacing revenues recognized.
Current report
For the three months ended June 30, 2024, total revenues increased $0.3 billion (4%). Equipment revenues decreased driven by lower deliveries of new engines. Services revenues increased, primarily due to an increase in internal shop visit volume and higher prices.
Current report
For the six months ended June 30, 2024, total revenues increased $1.5 billion (9%). Equipment revenues increased, driven by higher prices and favorable mix. Services revenues increased, primarily due to an increase in internal shop visit volume and spare parts, and higher prices.
Current report
Profit was $1.4 billion, a decrease of $0.1 billion. Profit margin was 15.9%, a decrease of 130 basis points. Operating profit* was $1.9 billion, an increase of $0.5 billion. Operating profit margin* was 23.1%, an increase of 560 basis points.
Current report
For the six months ended June 30, 2024, continuing earnings decreased $4.7 billion primarily due to a decrease in gains on retained and sold ownership interests of $6.0 billion, primarily related to our retained stake from the spin-off of GE HealthCare. This decrease was partially offset by an increase in segment profit of $0.7 billion, an increase in Insurance profit of $0.2 billion, decreases of $0.1 billion in both provision for income taxes and Adjusted Corporate & Other operating costs*. Adjusted earnings* were $2.3 billion, an increase of $0.8 billion, due to an increase in segment profit of $0.7 billion and lower Adjusted Corporate & Other operating costs*.
Current report
Profit was $3.4 billion, a decrease of $5.0 billion. Profit margin was 19.0%, a decrease from 50.8%. Operating profit* was $3.4 billion, an increase of $0.8 billion. Operating profit margin* was 21.1%, an increase of 350 basis points.
Current report
COMMERCIAL ENGINES & SERVICES. Commercial Engines & Services (CES) designs, develops, manufactures and services jet engines for commercial airframes, as well as business aviation and aeroderivative applications. The services CES provides include maintenance, repair and overhaul (MRO) of engines and the sale of spare parts. We offer these services under a variety of contracts, including time and material contracts, as well as other long-term service arrangements. Our customers for equipment and services include, but are not limited to, airframers, airlines and third-party MRO shops. CES engines power aircraft in all categories: narrowbody, widebody and regional, which includes engines sold by joint venture partners, the most significant of which is CFM International, a 50-50 non-consolidated joint venture with Safran Aircraft Engines, a subsidiary of Safran Group of France.
Current report
RPO as of June 30, 2024 increased $5.5 billion (4%) from December 31, 2023 primarily as a result of engines contracted under long-term service agreements that have now been put into service and from equipment orders outpacing revenues recognized.
Current report
For the three months ended June 30, 2024, segment revenues were up $0.4 billion (7%) and segment profit was up $0.3 billion (21%).
Current report
Revenues increased primarily due to higher internal shop visit volume, particularly from time and material visits, higher pricing and favorable equipment mix. These increases were partially offset by lower deliveries of new engines.
Current report
Profit increased primarily due to higher internal shop visit volume, higher pricing and favorable services mix. These increases in profit were partially offset by additional growth investment and lower spare engine deliveries.
Current report
For the six months ended June 30, 2024, segment revenues were up $1.3 billion (11%) and segment profit was up $0.5 billion (19%).
Current report
Revenues increased primarily due to higher services volume across internal shop visits and spare parts, higher pricing and favorable equipment mix. These increases were partially offset by lower deliveries of new engines and an unfavorable change in estimated profitability of our long-term service agreements of $0.2 billion recognized in the first quarter of 2024.
Current report
Defense & Systems – Defense & Systems designs, develops, manufactures and services jet engines and aircraft systems for governments, military, and commercial airframers. Our defense engines power a wide variety of military aircraft including fighters, bombers, tankers, transport, helicopters, and surveillance aircraft, as well as aeroderivative engines for marine applications. Our defense engine fleet in service is approximately 26,000 units. Services provided include maintenance, repair and overhaul (MRO) of engines, as well as the sale of spare parts. Our product performance, dedication to innovation and commitment to quality have earned long-standing relationships with airframers and government agencies globally. Additionally, we provide a wide range of avionics systems and electrical power systems for commercial and military platforms.
Current report
Propulsion & Additive Technologies – Propulsion & Additive Technologies is a portfolio of businesses including Avio Aero, Unison, Dowty Propellers and Colibrium Additive. Each operates with a strong and recognized brand serving customers across the Aerospace industry. We primarily design, develop, manufacture and support aircraft components and systems for both commercial and military end users. These include small turboprop engines, aeroengine mechanical transmissions, turbines, combustors and controls, additive manufacturing, propeller systems, ignition systems, sensors and engine accessories for both fixed wing and rotorcraft applications. Avio Aero is a strategic partner in Europe supporting development of indigenous, classified engine technology and a core member of Clean Aviation, significantly contributing and benefiting from the European Union sustainability roadmap.
Current report
Significant Trends & Developments. Our results in the three and six months ended June 30, 2024 reflect domestic and international government defense departments’ focus on modernizing and scaling their forces. Specifically, we saw revenue growth in development programs during the first six months of 2024 compared to first six months of 2023, as the U.S. Department of Defense (DoD) is focused on advanced combat, enhancing platform capability and groundbreaking technology primarily in classified programs. We continue to forecast strong demand across the segment, creating future growth opportunities. A key underlying driver of our business is government funding, as most of the revenue in Defense & Systems is derived from funding that flows through the DoD budget, or equivalent international budgets. National defense budgets are expected to grow in the U.S. in the low-single digits and internationally in the mid-single digits. In March 2024, Congress passed its defense funding bill for fiscal year 2024, which includes funding that supports our advanced engine development research, classified programs and product procurement and maintenance in other engine lines. The DoD and international governments have continued flight operations driving services demand, and have allocated budgets to upgrade and modernize existing fleets, including support for the next generation T901 turboshaft engine and advanced engine architectures. In June 2024, GE Aerospace delivered two T901-GE-900 engines to Sikorsky for integration and testing aboard a UH-60 Black Hawk as part of the U.S. Army upgrade program. In addition, GE Aerospace was awarded a $1.1 billion contract to provide T700 series turbine engines to the U.S. Army through the first half of 2029.
Current report
Our Defense engine unit sales decreased in the second quarter of 2024 compared to the second quarter of 2023 due to global material availability and supplier delivery performance. We are working closely with our suppliers to improve material input and better support our customers. In addition, we are leveraging FLIGHT DECK and partnering with suppliers to improve material input and proactively managing the impact of inflationary pressure by driving cost productivity and adjusting the pricing of our products and services.
Current report
RPO as of June 30, 2024 increased $0.3 billion (2%) from December 31, 2023, primarily due to increases in equipment from Defense & Systems orders outpacing revenues recognized. Equipment growth was primarily driven by engine and flight management system orders.
Current report
For the three months ended June 30, 2024, segment revenues were up 1% and segment profit was up $0.1 billion (71%).
Current report
Revenues increased primarily driven by growth in Propulsion & Additive Technologies. This growth is primarily from improved pricing and higher output at Avio Aero and Unison. The increase in Propulsion & Additive Technologies is partially offset by a decrease in Defense & Systems revenues. This decrease is primarily due to lower deliveries of new engines, partially offset by higher prices for aircraft systems products and services growth.
Current report
Profit increased primarily due to higher pricing, services growth and prior year impacts from program costs. The profit increase is partially offset by lower deliveries of new engines.
Current report
For the six months ended June 30, 2024, segment revenues were up $0.4 billion (9%) and segment profit was up $0.2 billion (49%).
Current report
Revenue increased in both Defense & Systems and Propulsion & Additive Technologies. Defense & Systems revenues increased primarily due to higher prices, services growth and an increase in development program revenues. This increase was partially offset by lower deliveries of new engines. Propulsion & Additive Technologies revenues increased, primarily due to higher output at Avio Aero and Unison and improved pricing.
Current report
Profit increased primarily due to higher pricing, services growth, more favorable equipment and services mix and prior year impacts from program costs. This increase was partially offset by additional growth investment and lower deliveries of new engines.
Current report
For the three months ended June 30, 2024, revenues decreased by $0.1 billion due to higher intersegment eliminations. Corporate & Other operating costs increased by $0.5 billion due to $0.8 billion of lower gains on retained and sold ownership interests and other equity securities, primarily related to our GE HealthCare and AerCap investments, offset by $0.1 billion each for lower separation costs and higher run-off Insurance operations profit.
Current report
Adjusted Corporate & Other operating costs* decreased by $0.1 billion primarily due to a reduction in our core functional cost and favorability from higher bank interest, partially offset by higher intersegment eliminations of $0.1 billion primarily resulting from additional intercompany volume related to engine part sales.
Current report
Adjusted Corporate & Other operating costs* decreased by $0.1 billion primarily due to a reduction in our core functional cost and favorability from higher bank interest, partially offset by higher intersegment eliminations of $0.1 billion primarily resulting from additional intercompany volume related to engine part sales.
Current report
The provision for income taxes was $0.1 billion for the three months ended June 30, 2024 and $0.3 billion for the three months ended June 30, 2023. The changes in the tax provision was primarily due to an increase in tax benefit associated with separation activities and a tax benefit associated with global activities for the three months ended June 30, 2024 compared to tax expense for global activities in the three months ended June 30, 2023, offset by an increase in tax expense due to higher pre-tax income excluding gains and losses on our retained and sold ownership interests.
Current report
For the three months ended June 30, 2024, the adjusted effective income tax rate* was 20.3% compared to 24.1% for the three months ended June 30, 2023. The adjusted provision (benefit) for income taxes* was $0.3 billion and $0.3 billion for the three months ended June 30, 2024 and 2023, respectively. The change in the tax provision was primarily due to the tax effect of the increase in adjusted earnings before taxes* partially offset by a tax benefit associated with global activities for the three months ended June 30, 2024 compared to a tax expense associated with global activities for the three months ended June 30, 2023.
Current report
For the six months ended June 30, 2024, the effective income tax rate was 10.7% compared to 5.5% for the six months ended June 30, 2023. See Note 15 for further information.
Current report
Cash used for investing activities of discontinued operations was $1.5 billion in 2024, a decrease of $1.0 billion compared to 2023, primarily driven by higher cash received of $3.2 billion from net settlements between our discontinued operations and businesses in continuing operations, due to cash received of $1.8 billion in 2024 related to the separation of our former GE Vernova business and the nonrecurrence of cash paid of $1.2 billion in 2023 related to the separation of our former GE HealthCare business. In addition, there was a decrease in cash used due to the prior year separation of GE HealthCare cash and equivalents of $1.8 billion. These decreases in cash used were partially offset by a reduction of cash and equivalents of $4.2 billion due to the separation of GE Vernova in 2024.
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Removed paragraphs (48)
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
(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.
Previous report
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.
Previous report
Notably, CFM International's Revolutionary Innovation for Sustainable Engines (RISE) program represents our single largest efficiency step change, aiming to reduce fuel consumption and CO 2 emissions by at least 20% compared to today’s most efficient engines.
Previous report
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.
Previous report
(a) Does not give effect to post-GE Vernova separation eliminations and Corporate adjustments.
Previous report
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%).
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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%).
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
For the three months ended March 31, 2024, segment revenues were up $0.3 billion (8%) and segment profit was up $0.2 billion.
Previous report
Revenues increased $0.3 billion (7%) organically*, primarily due to an increase in Gas Power services from higher outages and favorable price.
Previous report
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.
Previous report
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).
Previous report
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.
Previous report
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.
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Reworded paragraphs (41)
Previous wording
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.
Current wording
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A). The consolidated financial statements of GE Aerospace 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.
Previous wording
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.
Current wording
SECOND QUARTER 2024 RESULTS. Total revenues were $9.1 billion, up $0.3 billion for the quarter, driven primarily by an increase at Commercial Engines & Services.
Previous wording
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*.
Current wording
Continuing earnings (loss) per share was $1.20. Excluding the results from our run-off Insurance business, separation, restructuring, and non-operating benefit costs and gains on retained and sold ownership interests, Adjusted earnings per share* was $1.20. For the three months ended June 30, 2024, profit margin was 15.9% and profit was down $0.1 billion, primarily due to a decrease in gains on retained and sold ownership interests of $0.8 billion, partially offset by an increase in segment profit of $0.4 billion, an increase in Insurance profit of $0.1 billion and decreases of $0.1 billion in both separation costs and Adjusted Corporate & Other operating costs*. Operating profit margin* was 23.1% and operating profit* was up $0.5 billion, driven by increased segment profit of $0.4 billion and lower Adjusted Corporate & Other operating costs*.
Previous wording
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.
Current wording
Cash flows from operating activities (CFOA) were $2.6 billion and $1.6 billion for the six months ended June 30, 2024 and 2023, respectively. Cash flows from operating activities 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), partially offset by a decrease in All other operating activities. Free cash flows* (FCF) were $2.8 billion and $1.8 billion for the six months ended June 30, 2024 and 2023, respectively. FCF* increased primarily due to the same reasons as noted for CFOA above after adjusting for an increase in separation cash expenditures, which are excluded from FCF*. See the Capital Resources and Liquidity - Statement of Cash Flows section for further information.
Previous wording
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.
Current wording
Remaining performance obligation (RPO) is unfilled customer orders for products and product services (expected life of contract sales for product services) excluding any purchase order that provides the customer with the ability to cancel or terminate without incurring a substantive penalty. See Note 23 for further information.
Previous wording
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*.
Current wording
For the three months ended June 30, 2024, continuing earnings increased $0.1 billion primarily due to an increase in segment profit of $0.4 billion, a decrease in provision for income taxes of $0.1 billion, an increase in Insurance profit of $0.1 billion, and decreases of $0.1 billion in both separation costs and Adjusted Corporate & Other operating costs*. These increases were partially offset by a decrease in gains on retained and sold ownership interests of $0.8 billion. Adjusted earnings* were $1.3 billion, an increase of $0.5 billion, due to an increase in segment profit of $0.4 billion and lower Adjusted Corporate & Other operating costs*.
Previous wording
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.
Current wording
Significant Trends & Developments. Our results in the second quarter of 2024 reflect robust demand for commercial air travel. A key underlying driver of our CES business is global commercial departures, which grew 9% during the first six months of 2024 compared to the first six months 2023. We continue to estimate departures growth will be high-single digits in 2024. We are in frequent dialogue with our airline, airframe, and MRO customers about the outlook for commercial air travel, new aircraft production, fleet retirements, and after-market services, including shop visit and spare parts demand.
Previous wording
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.
Current wording
Internal shop visit output grew in the second quarter of 2024 compared to the second quarter of 2023; while total engine deliveries decreased. Global material availability and supplier delivery performance continue to cause disruptions and have impacted our production and delivery of equipment to our customers. We are investing in our manufacturing facilities, overhaul facilities and our supply chain to increase production and strengthen yield in order to improve support for our customers. We continue to partner with our suppliers to improve material input, and work with our customers to calibrate future production rates. We are leveraging FLIGHT DECK and partnering with suppliers to improve material input and proactively managing the impact of inflationary pressure by driving cost productivity and adjusting the pricing of our products and services. We expect the impact of inflation will continue, and we are continuing to take action to mitigate the impact.
Previous wording
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.
Current wording
Total engineering investments, both company and partner-funded, 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 is a suite of pioneering technologies including Open Fan, compact core, hybrid electric systems and alternative fuels. We are developing a hybrid electric demonstrator engine with NASA that embeds generators in a turbofan engine and initial hybrid electric component and baseline engine tests have been completed in 2024. This is one of several initiatives underway to help make hybrid electric commercial flight possible.
Previous wording
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.
Current wording
CES has a deep history of innovation and technology leadership with a commercial engine fleet in service, including units produced by joint ventures, of approximately 44,000 units. Approximately 13,000 units are under long-term service agreements, which will support recurring, profitable services growth for the future. We believe these strong fundamentals position CES to generate long-term profitable growth and higher cash flow over time.
Previous wording
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.
Current wording
Profit increased primarily due to higher services volume and higher pricing. These increases in profit were partially offset by additional growth investment, lower spare engine deliveries, inflation in our supply chain and an unfavorable change in estimated profitability of our long-term service agreements of $0.2 billion recognized in the first quarter of 2024.
Previous wording
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.
Current wording
CORPORATE & OTHER. Corporate & Other revenues include our run-off Insurance operations revenues and the elimination of intersegment activities. Corporate & Other operating profit includes Corporate functions and operations costs, certain costs of our principal retirement plans, significant, higher-cost restructuring programs, separation costs, insurance profit (loss), U.S. tax equity profit (loss), transition services agreements, environmental health and safety (EHS) impacts and other costs, as well as certain amounts that are not included in operating segment results because they are excluded from measurement of their operating performance for internal and external purposes.
Previous wording
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.
Current wording
Adjusted Corporate & Other operating costs* excludes gains (losses) on purchases and sales of business interests, gains (losses) on retained and sold ownership interests and other equity securities, higher-cost restructuring programs, separation costs, our run-off Insurance operations and U.S. tax equity profit (loss). We believe that adjusting Corporate & Other 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.
Previous wording
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.
Current wording
For the six months ended June 30, 2024, revenues decreased by $0.2 billion due to higher segment eliminations, partially offset by an increase in our run-off Insurance operations revenues. Corporate & Other operating profit decreased by $5.6 billion due to $6.0 billion of lower gains on retained and sold ownership interests and other equity securities, primarily related to our GE HealthCare and AerCap investments and $0.1 billion of higher restructuring and other charges, partially offset by $0.2 billion of higher run-off Insurance operations profit and $0.1 billion of lower losses on purchases and sales of business interests, primarily due to additional valuation allowance losses recognized in the first half of 2023 related to the classification of the Electric Insurance business as held-for-sale in the fourth quarter of 2022.
Previous wording
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.
Current wording
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 & Other. 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 19 for further information on restructuring and separation costs.
Previous wording
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.
Current wording
INTEREST AND OTHER FINANCIAL CHARGES were $0.2 billion for both the three months ended and $0.5 billion for both the six months ended June 30, 2024 and 2023, respectively. The primary components of interest and other financial charges are interest on short- and long-term borrowings.
Previous wording
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.
Current wording
INCOME TAXES. For the three months ended June 30, 2024, the effective income tax rate was 8.6% compared to 16.8% for the three months ended June 30, 2023.
Previous wording
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.
Current wording
The provision for income taxes was $0.4 billion for the six months ended June 30, 2024 and $0.5 billion for the six months ended June 30, 2023. The decrease in the tax provision was primarily due to a tax benefit associated with separation activities for the six months ended June 30, 2024 compared to a tax expense associated with separation activities for the six months ended June 30, 2023, partially offset by an increase in tax expense related to the increase in pre-tax income excluding gains and losses on our retained and sold ownership interests.
Previous wording
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*.
Current wording
For the six months ended June 30, 2024, the adjusted effective income tax rate* was 20.5% compared to 21.8% for the six months ended June 30, 2023. The adjusted provision (benefit) for income taxes* was $0.6 billion and $0.5 billion for the six months ended June 30, 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* partially offset by the benefit of a lower adjusted effective income tax rate*.
Previous wording
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.
Current wording
DISCONTINUED OPERATIONS primarily comprise our former GE Vernova and GE HealthCare businesses, 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.
Previous wording
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.
Current wording
CONSOLIDATED LIQUIDITY. Our primary sources of liquidity consist of cash and cash equivalents, free cash flows* from our operating businesses, 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, timing of customer allowances and market conditions. Total cash, cash equivalents and restricted cash was $12.1 billion at June 30, 2024, of which $5.0 billion was held in the U.S. and $7.1 billion was held outside the U.S.
Previous wording
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.
Current wording
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. would potentially be partially offset by a U.S. foreign tax credit.
Previous wording
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.
Current wording
Cash, cash equivalents and restricted cash at June 30, 2024 included $0.3 billion of cash held in countries with currency control restrictions. 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. Excluded from cash, cash equivalents and restricted cash was $1.4 billion of cash in our run-off Insurance business, which was classified as All other assets in the Statement of Financial Position.
Previous wording
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.
Current wording
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 upon the spin. 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 June 30, 2024, our remaining interest in GEHC investment is 30.5 million shares. We intend to exit our remaining stake in GE HealthCare over time, in an orderly manner. See Notes 3 and 18 for further information.
Previous wording
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.
Current wording
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 replaced its prior $3.0 billion share repurchase authorization. Under this program, shares may be repurchased on the open market, under accelerated share repurchase programs, or under plans complying with rules 10b5-1 and 10b-18 as amended. In connection with this new authorization, we repurchased 11.7 million shares for $1.9 billion during the three months ended June 30, 2024.
Previous wording
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.
Current wording
BORROWINGS. Consolidated total borrowings were $19.7 billion and $20.5 billion at June 30, 2024 and December 31, 2023, respectively, a decrease of $0.9 billion, mainly due to maturities. In April 2024, the Company replaced its previous $10.0 billion syndicated credit facility with a five-year unsecured revolving credit facility in an aggregate committed amount of $3.0 billion.
Previous wording
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.
Current wording
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 are set forth in the table below.
Previous wording
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.
Current wording
In connection with the spin-off of GE Vernova, in the first quarter of 2024, Moody’s changed its outlook from stable to positive. Fitch changed its long term rating from BBB to BBB+. 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.
Previous wording
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.
Current wording
Substantially all of the Company's debt agreements in place at June 30, 2024 do not contain material credit rating covenants. Our unused back-up revolving syndicated credit facility contain a customary net debt-to-EBITDA financial covenant, which we satisfied at June 30, 2024.
Previous wording
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.
Current wording
FOREIGN EXCHANGE AND INTEREST RATE RISK. As a result of our global operations, we generate and incur a small portion of our revenues and expenses in currencies other than the U.S. dollar. Such principal currencies include the euro, the British Sterling pound, and Brazilian real. The effect of foreign currency fluctuations on earnings was immaterial. See Note 20 for further information about our risk exposures, our use of derivatives, and the effects of this activity on our financial statements.
Previous wording
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.
Current wording
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 product or services sales. The most significant operating use of cash is to pay our suppliers, employees, tax authorities and post retirement plans.
Previous wording
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:
Current wording
Cash from operating activities was $2.6 billion in 2024, an increase of$1.1 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, partially offset by a decrease in All other operating activities. The components of All other operating activities were as follows:
Previous wording
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.
Current wording
The cash impacts from changes in working capital compared to prior year were as follows: current receivables of $0.3 billion, driven by higher collections, including increased collections from CFM International; inventories, including deferred inventory, of $(0.5) billion, driven by higher material purchases and lower liquidations primarily due to output challenges; current contract assets, contract liabilities and current deferred income of $(0.1) billion, driven by higher revenue recognition on our long-term service agreements, partially offset by higher billings on those agreements and net unfavorable changes in estimated profitability; progress collections of $0.2 billion, driven by higher collections; and accounts payable of $0.2 billion, driven by higher volume partially offset by higher disbursements related to purchases of materials in prior periods.
Previous wording
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.
Current wording
Cash used for investing activities was $2.0 billion in 2024, an increase of $4.3 billion compared to 2023, primarily due to: higher cash paid related to net settlements between our continuing operations and businesses in discontinued operations of $3.2 billion, primarily related to the separation of GE Vernova of $1.8 billion in 2024 and lower cash received of $1.4 billion, primarily related to the separation of GE HealthCare in 2023 (components of All other investing activities); a decrease in proceeds of $1.7 billion from the disposition of our retained ownership interest primarily driven by the nonrecurrence of dispositions of AerCap and Baker Hughes in 2023, partially offset by the disposition of GE HealthCare in 2024. These increases in cash used were partially offset by 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 $0.5 billion and $0.4 billion in 2024 and 2023, respectively.
Previous wording
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).
Current wording
Cash used for financing activities was $3.0 billion in 2024, a decrease of $3.4 billion compared to 2023, primarily due to: the nonrecurrence of cash paid for redemption of GE preferred stock of $3.0 billion in 2023; lower net debt maturities of $2.0 billion; and an increase in cash received of $0.7 billion from stock option exercises (a component of All other financing activities); partially offset by an increase in treasury stock repurchases of $2.0 billion.
Previous wording
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.
Current wording
Cash used for operating activities of discontinued operations was $0.7 billion in 2024, a decrease of $0.7 billion compared to 2023, primarily driven by lower net losses from our former GE Vernova business and disbursements for purchases of materials and separation costs incurred by our former GE HealthCare business in 2023.
Previous wording
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.
Current wording
Cash used for financing activities of discontinued operations was $0.1 billion in 2024, a decrease of $2.1 billion compared to 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.
Previous wording
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.
Current wording
CRITICAL ACCOUNTING ESTIMATES. Please refer to the Critical Accounting Estimates and Other Items sections within MD&A and Note 1 to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of our accounting policies and critical accounting estimates.
Previous wording
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.
Current wording
GE VERNOVA PARENT COMPANY GUARANTEES. 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 Aerospace credit support”). Prior to the spin-off in the second quarter of 2024, GE Vernova had been working to seek novation or assignment of GE Aerospace credit support, the majority of which relates to parent company guarantees, associated with GE Vernova legal entities from GE Aerospace to GE Vernova. For GE Aerospace credit support that remains outstanding post-spin, 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 Aerospace credit support, for which we have recorded a stand ready to perform obligation. 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.
Previous wording
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.
Current wording
As of second quarter 2024, we estimated GE Vernova RPO and other obligations that relate to GE Aerospace credit support to be approximately $29.0 billion, an over 50% reduction since year end, of which, approximately $1 billion are financial guarantees. We expect, approximately $16 billion of the of RPO related to GE Aerospace credit support obligations to contractually mature within five years from the date of spin-off and credit support on financial guarantees to not exceed a year beyond separation. The Company’s maximum aggregate exposure under the GE Aerospace 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. See Note 22 for additional details regarding guarantees.
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