GENERAL ELECTRIC CO

THIRD QUARTER 2024 RESULTS. Total revenues were $9.8 billion, up $0.5 billion for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, driven primarily by an increase at Commercial Engines & Services.

Continuing earnings (loss) per share was $1.56. Adjusted earnings per share* was $1.15, excluding the results from our run-off Insurance business, separation, restructuring and other, and non-operating benefit costs, gains on retained and sold ownership interests, gains (losses) on purchases and sales of business interests and goodwill impairments. For the three months ended September 30, 2024, profit was $1.9 billion, with margins of 19.2%. Profit was up $1.6 billion compared to the three months ended September 30, 2023, driven by an increase in gains on retained and sold ownership interests of $1.5 billion, related to our GE HealthCare and AerCap investments, an increase in gains on sales of business interests of $0.4 billion, primarily related to the sale of our non-core licensing business, and an increase in segment profit of $0.2 billion. These increases were partially offset by increased restructuring and other charges of $0.3 billion and a goodwill impairment loss related to our Colibrium Additive reporting unit of $0.3 billion. Operating profit* was $1.8 billion, with margins* of 20.3%. Operating profit* was up $0.2 billion, driven by an increase in segment profit of $0.2 billion.

Cash flows from operating activities (CFOA) were $4.5 billion and $3.4 billion for the nine months ended September 30, 2024 and 2023, respectively. Cash flows from operating activities increased primarily due to higher 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), a decrease in income tax payments and an increase in sales discounts and allowances, partially offset by working capital growth. Free cash flows* (FCF) were $4.6 billion and $3.5 billion for the nine months ended September 30, 2024 and 2023, respectively. FCF* increased primarily due to higher net income, lower income tax payments and higher sales discounts and allowances accruals, partially offset by working capital growth, 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.

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.

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As of September 30, 2024, RPO increased $12.1 billion, or 8%, from December 31, 2023, 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.

For the three months ended September 30, 2024, total revenues increased $0.5 billion, or 6%, compared to the three months ended September 30, 2023. Equipment revenues increased, driven by improved pricing. Services revenues increased, primarily due to an increase in spare parts volume and mix.

For the nine months ended September 30, 2024, total revenues increased $2.0 billion, or 8%, compared to the nine months ended September 30, 2023. Equipment revenues increased, driven by favorable mix and improved pricing. Services revenues increased, primarily due to an increase in internal shop visit volume and spare parts, and improved pricing.

For the three months ended September 30, 2024, continuing earnings increased $1.5 billion compared to the three months ended September 30, 2023, driven by an increase in gains on retained and sold ownership interests of $1.5 billion, related to our GE HealthCare and AerCap investments, an increase in gains on sales of business interests of $0.4 billion, primarily related to the sale of our non-core licensing business, and an increase in segment profit of $0.2 billion. These increases were partially offset by an increase in restructuring and other charges of $0.3 billion and a goodwill impairment loss related to our Colibrium Additive reporting unit of $0.3 billion. Adjusted earnings* were $1.3 billion, an increase of $0.2 billion, due to an increase in segment profit.

Profit was $1.9 billion, an increase of $1.6 billion. Profit margin was 19.2%, an increase of 1,560 basis points. Operating profit* was $1.8 billion, an increase of $0.2 billion. Operating profit margin* was 20.3%, an increase of 150 basis points.

For the nine months ended September 30, 2024, continuing earnings decreased $3.2 billion compared to the nine months ended September 30, 2023, driven by a decrease in gains on retained and sold ownership interests of $4.6 billion, primarily related to our GE HealthCare and AerCap investments, an increase in restructuring and other charges of $0.3 billion and a goodwill impairment loss related to our Colibrium Additive reporting unit of $0.3 billion. These decreases were partially offset by an increase in segment profit of $0.9 billion, an increase in gains on sales of business interests of $0.5 billion, primarily related to the sale of our non-core licensing business, an increase in Insurance profit of $0.3 billion and the nonrecurrence of prior year preferred stock dividends of $0.3 billion. Adjusted earnings* were $3.6 billion, an increase of $1.1 billion, due to an increase in segment profit of $0.9 billion and lower Adjusted Corporate & Other operating costs*.

Profit was $5.3 billion, a decrease of $3.4 billion. Profit margin was 19.1%, a decrease from 33.9%. Operating profit* was $5.3 billion, an increase of $1.0 billion. Operating profit margin* was 20.9%, an increase of 280 basis points.

Global material availability and supplier delivery performance continue to cause disruptions and have impacted our production and delivery of equipment and services 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 delivery to 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 supply chain constraints and inflation will continue, and we are continuing to take action to mitigate the impacts.

Given the significant business we have with airframers and many airlines, challenges affecting the commercial aviation industry or key participants can adversely impact the demand for our products and services, the timing of orders, deliveries and related payments and other factors. We are monitoring the production and other challenges at The Boeing Company, including the ongoing strike, and we continue to align with them on production expectations and assess potential impacts to our business. The impacts from the strike to our revenues, earnings and cash flows for the three and nine months ended September 30, 2024 have not been significant.

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