GENERAL ELECTRIC CO

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NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. Our consolidated 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, contract assets and investment securities, revisions to estimated profitability on long-term product service and other service agreements, incremental credit losses on receivables and debt securities, incremental losses related to our contingencies, 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, the timing of settlements to suppliers for property, plant and equipment, non-cash gains/losses and other balance sheet reclassifications.

Beginning in the first quarter of 2025, we changed the terminology used to report our earnings from “Earnings” to “Net income.” The change in terminology does not impact the amounts reported in the financial statements. Comparative periods have been renamed to reflect this change for consistency. 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 net income from continuing operations, net income from discontinued operations and net income. 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.

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, 2024.

NOTE 2. DISCONTINUED OPERATIONS. 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 are included in discontinued operations. 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.

GE Vernova. On April 2, 2024, we completed the previously announced separation of GE Vernova. The separation was structured as a tax-free spin-off and was achieved through the Company's pro-rata distribution of all the outstanding shares of GE Vernova to holders of the Company's common stock. In connection with the GE Vernova separation, the historical results of GE Vernova and certain assets and liabilities included in the separation are reported in GE Aerospace consolidated financial statements as discontinued operations. In addition, the Company contributed $515 million of cash to fund GE Vernova’s future operations such that GE Vernova’s cash balance on the date of separation was $4,242 million.

We have continuing involvement with GE Vernova primarily through ongoing sales of products, a transition services agreement, through which GE Aerospace and GE Vernova continue to provide certain services to each other for a period of time following the separation, a separation and distribution agreement, including performance and financial guarantees, a tax matters agreement and a trademark licensing agreement. For the nine months ended September 30, 2025, we had direct and indirect sales of $249 million to GE Vernova, primarily related to engine sales and parts. We collected net cash of $609 million related to the transition services agreement and sales of engines and parts for the nine months ended September 30, 2025.

GE HealthCare. On January 3, 2023, we completed the previously announced separation of our HealthCare business, 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 the Company's pro-rata distribution of approximately 80.1% of the outstanding shares of GE HealthCare to holders of the Company's 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 Aerospace consolidated financial statements as discontinued operations.

We had continuing involvement with GE HealthCare primarily through a transition services agreement, which was completed as of December 31, 2024, through which GE Aerospace and GE HealthCare continued to provide certain services to each other for a period of time following the separation. In addition, we have a tax matters agreement and a trademark licensing agreement. For the nine months ended September 30, 2025, we collected net cash of $51 million related to these activities, primarily in the first quarter of 2025.

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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. The estimate of total losses for borrower litigation at Bank BPH was $2,476 million and $2,461 million as of September 30, 2025 and December 31, 2024, respectively, with the increase primarily driven by foreign exchange movements. No incremental contributions from GE Aerospace were required during the nine months ended September 30, 2025. For further information about factors that are relevant to the estimate of total losses for borrower litigation at Bank BPH, see Note 22. 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. At September 30, 2025, the total portfolio hadno carrying value, net of a valuation allowance. Income (loss) related to ongoing borrower litigation was insignificant in pre-tax charges for the three and nine months ended September 30, 2025 andzero for the three and nine months ended September 30, 2024.

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(a) Included $1,168 million and $1,324 million of cash, cash equivalents and restricted cash related to Bank BPH as of September 30, 2025 and December 31, 2024, respectively, with the decrease primarily driven by purchases of investment securities in the third quarter which are recorded in All Other Assets.

(b) Included $1,488 million and $1,594 million of valuation allowances against financing receivables held for sale, of which $1,488 million and $1,517 million related to estimated borrower litigation losses, and $988 million and $944 million in All other liabilities related to estimated borrower litigation losses for Bank BPH’s foreign currency-denominated mortgage portfolio as of September 30, 2025 and December 31, 2024, respectively. Accordingly, total estimated losses related to borrower litigation were $2,476 million and $2,461 million as of September 30, 2025 and December 31, 2024, respectively, with the increase driven by foreign exchange movements. The valuation allowance completely offsets the financing receivables balance as of September 30, 2025 and December 31, 2024.

NOTE 3. INVESTMENT SECURITIES. Current investment securities include our senior note from AerCap, for which we have adopted the fair value option and matures in the fourth quarter of 2025, with a fair value of $1,008 million and $982 million at September 30, 2025 and December 31, 2024, respectively.

Substantially all of our non-current investment securities are held within our run-off insurance operations and support the long-duration insurance liabilities. The portfolio includes debt securities, of which all are substantially investment grade, and are classified as available-for-sale.

The amortized cost of debt securities excludes accrued interest of $497 million and $473 million at September 30, 2025 and December 31, 2024, respectively, which is reported in All other current assets.

The estimated fair value of non-current investment securities at September 30, 2025 increased since December 31, 2024, primarily due to lower market yields partially offset by net proceeds from debt/equity securities sales and redemptions.

Total estimated fair value of debt securities in an unrealized loss position were $18,065 million and $21,876 million, of which $15,368 million and $14,011 million had gross unrealized losses of $(2,463) million and $(2,795) million and have been in a loss position for 12 months or more at September 30, 2025 and December 31, 2024, respectively. The majority of our U.S. and non-U.S. corporate securities' gross unrealized losses were in the consumer, electric, technology, communication and energy industries. The majority of our commercial mortgage-backed securities 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.

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Contractual maturities of our debt securities (excluding mortgage and asset-backed securities) at September 30, 2025 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 non-current investment securities are classified within Level 2, as their valuation is determined based on significant observable inputs. Investments with a fair value of $4,298 million and $5,074 million, including the AerCap senior note, are classified within Level 3, as significant inputs to their valuation models are unobservable at September 30, 2025 and December 31, 2024, respectively. During the nine months ended September 30, 2025, $1,246 million was transferred out of Level 3 related to increases in the observability of external information used in determining fair value in our run-off insurance operations and primarily included certain investments in private placement U.S. and non-U.S. corporate debt securities. During the nine months ended September 30, 2025 there were no significant transfers into Level 3 and during the nine months ended September 30, 2024, there were no significant transfers into or out of Level 3.

In addition to the equity securities described above, we held $2,090 million and $1,439 million of equity securities without RDFV including $1,760 million and $1,410 million within our run-off insurance operations at September 30, 2025 and December 31, 2024, respectively, that are classified within All other assets in our Statement of Financial Position. Fair value adjustments, net of impairments, recorded in income were $57 million and $37 million and $157 million and $100 million for the three and nine months ended September 30, 2025, and 2024, 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. These limited partnership investments are generally not eligible for redemption and generally cannot be sold without approval of the general partner. Distributions from each fund will be received as the underlying investments of the funds are liquidated at the discretion of the general partner. These investments are generally considered illiquid and our ability to receive the most recent net asset value in a sale would be determined by external market factors.

NOTE 4. CURRENT AND LONG-TERM RECEIVABLES

(a) Revenue sharing and other partner receivables are primarily amounts due from revenue sharing partners who participate in engine programs by developing and supplying certain engine components through the life of the program or other partners who support our production or aftermarket activities. The revenue sharing partners share in program revenue, receive a share of customer progress payments and share costs related to discounts and warranties.

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 $115 million and $437 million in thenine months ended September 30, 2025 and 2024, respectively, related primarily to our participation in customer-sponsored supply chain finance programs. Within these programs, primarily in the Commercial Engines & Services business, 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 value and due date.

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NOTE 5. INVENTORIES, INCLUDING DEFERRED INVENTORY COSTS

(a) Represents deferred labor and overhead costs on time and material service contracts and other costs of products and services 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 current operating lease liabilities, included in All other current liabilities in our Statement of Financial Position, were $287 million and $283 million as of September 30, 2025 and December 31, 2024, respectively. Our non-current operating lease liabilities, included in All other liabilities in our Statement of Financial Position, were $796 million and $822 million as of September 30, 2025 and December 31, 2024, respectively. Expense on our operating lease portfolio, primarily from our long-term fixed leases, was $97 million and $120 million for the three months ended September 30, 2025 and 2024, respectively, and $294 million and $360 million for the nine months ended September 30, 2025 and 2024, respectively.

NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS

(a) Goodwill adjustments are primarily related to foreign currency exchange.

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 third quarter of 2025, we did not identify any reporting units that required an interim impairment test.

Other intangible assets increased $26 million during the nine months ended September 30, 2025, primarily as a result of acquisitions within our Defense & Propulsion Technologies segment, additions of capitalized software and foreign currency exchange, partially offset by amortization. All other intangible assets are subject to amortization. Consolidated amortization expense was $88 million and $89 million in the three months ended and $270 million and $261 million in the nine months ended September 30, 2025 and 2024, respectively.

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NOTE 8. CONTRACT AND OTHER DEFERRED ASSETS, CONTRACT LIABILITIES AND DEFERRED INCOME & PROGRESS COLLECTIONS

Contract assets (liabilities) and other deferred assets (income), on a net basis, increased the net liability position by $550 million for the nine months ended September 30, 2025, primarily due to an increase in long-term service agreements liabilities of $525 million. In aggregate, the net liability for long-term service agreements increased primarily due to billings of $7,147 million and net unfavorable changes in estimated profitability of $296 million, including quarterly updates to contract margins and an estimated impact from tariffs, primarily in Commercial Engines & Services, partially offset by revenue recognized of $6,865 million. Revenue recognized for contracts included in a liability position at the beginning of the year were $5,884 million and $5,063 million for the nine months ended September 30, 2025 and 2024, respectively.

(a) Includes contract fulfillment costs for engineering and development incurred prior to production for equipment production contracts, primarily within our Defense & Propulsion Technologies segment, which are amortized ratably over each unit produced. We assess the recoverability of these costs and if we determine the costs are no longer probable of recovery, the asset is impaired.

(b) Includes amounts due from customers within our Commercial Engines & Services segment for the sales of engines, spare parts and services, which we collect through fixed or usage-based billings from the sale of spare parts and servicing of equipment under long-term service agreements.

Progress collections increased $287 million in the nine months ended September 30, 2025 primarily due to increased collections at Defense & Propulsion Technologies.

NOTE 9. 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, pension surplus, prepaid taxes and other deferred charges and indemnity assets. All other non-current assets increased $1,648 million in the nine months ended September 30, 2025, due to an increase in equity method and other investments of $819 million, an increase in Insurance cash and cash equivalents of $406 million, an increase in Insurance receivables of $153 million and an increase in pension surplus of $104 million. Insurance cash and cash equivalents was $1,340 million and $934 million at September 30, 2025 and December 31, 2024, respectively.

NOTE 10. BORROWINGS

(a) In the third quarter of 2025, GE Aerospace issued a total of $2,000 million in aggregate principal amount of senior unsecured debt, comprised of $1,000 million of 4.3% senior notes due 2030, and $1,000 million of 4.9% senior notes due 2036 (collectively, the "Notes"). Interest payments on the Notes are due semi-annually until maturity, with the first interest payment due in January 2026.

See Note 20 for further information about borrowings and associated hedges.

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NOTE 11. ACCOUNTS PAYABLE

(a) During the first quarter of 2025 and fourth quarter of 2024, GE Aerospace made prepayments of $199 million and $198 million, respectively, related to the supply chain finance programs. There wereno prepayments made in the second and third quarters of 2025.

We facilitate voluntary supply chain finance programs with third parties, which provide participating suppliers the opportunity to sell their GE Aerospace 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 $2,527 million and $2,709 million for the nine months ended September 30, 2025 and 2024, respectively. GE Aerospace has no costs associated with this program.

NOTE 12. INSURANCE LIABILITIES AND ANNUITY BENEFITS. Insurance liabilities and annuity benefits are comprised of obligations to annuitants and insureds in our run-off insurance operations. These insurance operations (net of eliminations) generated revenue of $875 million and $899 million, profit was $361 million and $171 million and net income was $287 million and $135 million for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, revenues were $2,681 million and $2,649 million, profit was $714 million and $541 million and net income was $567 million and $427 million, respectively. These operations were primarily supported by investment securities, substantially all debt securities, of $37,822 million and $37,352 million, limited partnerships of $4,925 million and $4,321 million, a diversified commercial mortgage loan portfolio collateralized by first liens on U.S. commercial real estate properties of $1,841 million and $1,887 million (net of allowance for credit losses of $37 million and $46 million) and residential mortgage loans of $345 million and $251 million (net of allowance for credit losses of an insignificant amount), as of September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025, the commercial mortgage loan portfolio hadno delinquent or non-accrual loans and about one-fourth of the portfolio was held in the office sector, which had a weighted average loan-to-value ratio of 69%, debt service coverage of 1.9, and an insignificant amount of scheduled maturities through 2026. 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 benefit reserves.

(a) Substantially all of Life reflects novations executed during the three months ended September 30, 2025, in connection with the February 3, 2025, Canadian life and health insurance portfolio reinsurance transaction.

(b) Determined using the current discount rate as of September 30, 2025 and 2024.

As of September 30, 2025 and 2024, policyholders account balances totaled $1,407 million and $1,612 million, respectively. As our insurance operations are in run-off, changes in policyholder account balances for the nine months ended September 30, 2025 and 2024 are primarily attributed to surrenders, withdrawals and benefit payments of $367 million and $323 million, partially offset by net additions from separate accounts and interest credited of $197 million and $206 million, respectively. Interest on policyholder account balances is generally credited at minimum guaranteed rates, primarily between 3.0% and 6.0% at both September 30, 2025 and 2024.

Our 2025 annual review of future policy benefit reserves cash flow assumptions resulted in an increase in net future policy benefit reserves, after reinsurance recoverables and a pre-tax charge to earnings of $126 million ($100 million, after-tax), primarily related to long-term care cost of care inflation and lower policy terminations or benefit reductions related to premium rate increases assumptions, partially offset by favorable experience, including mortality. Our 2024 annual review of future policy benefit reserves cash flow assumptions resulted in an immaterial charge to net earnings.

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Included in Insurance losses and annuity benefits in our Statement of Earnings (Loss) for the nine months ended September 30, 2025 and 2024 are unfavorable pre-tax adjustments of $166 million and $54 million respectively, from updating the net premium ratio (i.e., the percentage of projected gross premiums required to cover expected policy benefits and related expenses) after updating for actual historical experience each quarter and updating of future cash flow assumptions. Included in these amounts for the nine months ended September 30, 2025 and 2024, are unfavorable adjustments of $189 million and $107 million, respectively, due to insufficient gross premiums (i.e., net premium ratio exceeded 100%), related to certain cohorts in our long-term care and life insurance portfolios. These adjustments are primarily attributable to increases in the net premium ratio as a result of updating future cash flow assumptions on cohorts where the beginning of the period net premium ratio exceeded 100%.

On February 3, 2025, we closed the Canadian life and health insurance portfolio reinsurance transaction that was announced in 2024. We received a ceding commission of $128 million and the gain was deferred and will be recognized over the remaining life of the policies or earlier if the underlying treaties are novated. Included in Insurance losses and annuity benefits in our Statement of Earnings (Loss) for the three and nine months ended September 30, 2025, is a benefit of $275 million, related to executed novations, resulting in a remaining deferred gain balance of approximately $60 million.

See Notes 3 and 9 for further information related to our run-off insurance operations.

NOTE 13. 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, 2024 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 Operations.

Principal retiree benefit plans income was $17 million and $22 million for the three months ended September 30, 2025 and 2024, and $49 million and $79 million for the nine months ended September 30, 2025 and 2024, respectively. Principal retiree benefit plans income from continuing operations was $22 million and $65 million for the three and nine months ended September 30, 2024, respectively.

We have a defined contribution plan for eligible U.S. employees that provides employer contributions, which were $55 million and $47 million for the three months ended September 30, 2025 and 2024, and $194 million and $210 million for the nine months ended September 30, 2025 and 2024, respectively. Employer contributions from continuing operations were $47 million and $175 million for the three and nine months ended September 30, 2024, respectively.

NOTE 14. SALES DISCOUNTS AND ALLOWANCES & ALL OTHER LIABILITIES. Sales discounts and allowances increased $554 million in the nine months ended September 30, 2025, primarily due to accruals on product reserves, spare part discounts and engine shipments outpacing payments to airline customers in Commercial Engines & Services.

All other current liabilities and All other liabilities primarily includes employee compensation and benefits, equipment project and commercial liabilities, income taxes payable and uncertain tax positions, environmental, health and safety remediations, operating lease liabilities (see Note 6) and product warranties (see Note 22). All other current liabilities decreased $132 million in the nine months ended September 30, 2025, primarily due to a decrease in environmental, health and safety liabilities of $121 million driven by spend. All other liabilities increased $623 million in the nine months ended September 30, 2025, primarily due to increases in uncertain and other income taxes and related liabilities of $261 million and environmental, health and safety liabilities of $236 million driven by additional accruals.

NOTE 15. INCOME TAXES. Our effective income tax rate was 14.2% and 10.6% for the nine months ended September 30, 2025 and 2024, respectively. The tax rate for 2025 was reduced compared to the U.S. statutory rate of 21% primarily due to U.S. business tax credit benefits, tax benefits on global activities, tax effects of favorable audit resolutions, realized foreign tax credits benefits on the reinsurance transaction (see Note 12), and tax benefits on equity compensation. The tax rate for 2024 was reduced compared to the U.S. statutory rate of 21% primarily due to separation income tax benefit associated with an increase in net state deferred tax assets that are likely to be utilized after the spin of GE Vernova, U.S. business tax credit benefits, and gains associated with our retained and sold ownership interests which we expect to recover without tax.

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On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (OBBBA), was signed into law, which includes a broad range of tax reform provisions. Beginning in 2025, the OBBBA provides an elective deduction for domestic research and development expenses, a reinstatement of elective 100% first-year bonus depreciation and repeal of non-U.S. corporations' fiscal year end. Some impacts of the OBBBA will not be realized until 2026 and forward, such as a more favorable tax rate on Foreign-Derived Deduction Eligible Income and income from non-U.S. subsidiaries (Net CFC Tested Income). Based on current expectations, in 2025, we may incur up to $0.1 billion of tax expense in connection with the OBBBA, which we have considered as part of the annual effective tax rate. Due to the nature of the tax law changes, the company has not realized an impact in the Statement of Operations related to deferred taxes. We will continue to monitor the impact of the OBBBA and the range of potential outcomes, which will depend on our facts in each year and anticipated guidance from the U.S. Department of the Treasury.

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. Since the proposal, many countries incorporated 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. In addition, in January 2025, the United States issued an executive order announcing opposition to aspects of these rules. In June 2025, the G7 agreed to exclude U.S. Multi-National Entities (MNEs) from certain aspects of the Pillar 2 global minimum tax rules (the G7 Statement) in exchange for the U.S. not imposing retaliatory taxes in the OBBBA. We will continue to monitor the G7 Statement, which has not yet been incorporated into the OECD framework. We continue to refine the effective tax rate and cash tax impact of Pillar 2 in light of legislative changes in multiple countries. As of September 30, 2025, we expect to incur $0.1 billion in 2025 in connection with the incorporation of the Pillar 2 model rules, which we have considered as part of the effective tax rate.

The Internal Revenue Service (IRS) is currently auditing our consolidated U.S. income tax returns for 2016-2020.

The following table presents our net deferred tax assets and net deferred tax liabilities attributable to different tax jurisdictions or different tax paying components.

NOTE 16. SHAREHOLDERS’ EQUITY

(a) The total reclassifications from AOCI included $1,590 million, including currency translation of $2,174 million and benefit plans of $(584) million, net of taxes, in the second quarter of 2024 related to the separation of GE Vernova.

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Common stock. GE Aerospace common stock shares outstanding were 1,054,813,911 and 1,073,692,183 at September 30, 2025 and December 31, 2024, respectively. We repurchased 6.6 million shares for $1,840 million and 23.6 million shares for $5,406 million during the three and nine months ended September 30, 2025. This included repurchases of 5.3 million shares for $1,469 million and 15.8 million shares for $3,794 million during the three and nine months ended September 30, 2025 using accelerated stock repurchases as a mechanism to achieve planned repurchase volumes within the quarter during closed windows. The Company's share repurchase program does not obligate it to acquire any specific number of shares. Under this program, shares may be purchased in the open market, in privately negotiated transactions, under accelerated share repurchase programs or under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended.

NOTE 17. EARNINGS PER SHARE (EPS) INFORMATION

(a) Included in 2025 is a dilutive adjustment for the change in income for forward purchase contracts that may be settled in stock.

(b) Outstanding stock awards not included in the computation of diluted earnings 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 historically have been included in the calculation pursuant to the two-class method. For the three and nine months ended September 30, 2025, and the comparative period in 2024, and the Company calculates earnings per share using the treasury stock method.

NOTE 18. OTHER INCOME (LOSS)

(a) Included a pre-tax gain of $341 million related to the sale of our non-core licensing business in Corporate in the three and nine months ended September 30, 2024.

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NOTE 19. RESTRUCTURING CHARGES AND SEPARATION COSTS

RESTRUCTURING AND OTHER CHARGES. This table is inclusive of all restructuring charges in our segments and at Corporate & Other. Separately, in our reported segment results, significant, higher-cost restructuring programs, primarily related to the separations, 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.

(a) Primarily related to employee severance payments.

The restructuring liability as of September 30, 2025 and December 31, 2024 was $198 million and $242 million, respectively.

For the three and nine months ended September 30, 2025, and 2024, restructuring and other charges for ongoing programs primarily included exit activities announced in the fourth quarter of 2022, reflecting lower Corporate & Other shared-service and footprint needs as a result of the GE HealthCare and GE Vernova spin-offs. Additionally, for the three and nine months ended September 30, 2024, restructuring and other charges included costs of $328 million and $363 million, respectively, for the settlement of the Sjunde AP-Fonden shareholder lawsuit.

SEPARATION COSTS. In November 2021, the Company announced its plan to form three industry-leading, global public companies focused on the growth sectors of aerospace, healthcare and energy. As discussed in Note 2, we completed this plan with the spin of GE Vernova in the second quarter of 2024. Post-separation, we continue to incur operational and transition costs related to ongoing separation activities, including employee costs, professional fees, costs to establish certain stand-alone functions and information technology systems, and other transformation to transition to a stand-alone public company. These costs are presented as separation costs in our Statement of Operations.

We incurred pre-tax separation costs of $53 million and $74 million, recognized $11 million and $61 million of net tax benefits and paid $56 million and $144 million in cash for the three months ended September 30, 2025 and 2024, respectively. For 2024, the net tax benefits included tax benefit of losses on separation related entity restructuring.

We incurred pre-tax separation costs of $150 million and $408 million, recognized $31 million and $311 million of net tax benefits, and paid $202 million and $716 million in cash for the nine months ended September 30, 2025 and 2024, respectively. For 2024, the net tax benefits included deferred tax benefits associated with state tax attributes.

The pre-tax separation costs specifically identifiable to GE HealthCare and GE Vernova are reflected in discontinued operations. For the three months ended September 30, 2025 and 2024, we incurred insignificant costs for both GE Healthcare and GE Vernova. Additionally, we had insignificant cash spend related to GE HealthCare and GE Vernova for the three months ended September 30, 2025, and for GE Vernova we paid $66 million in cash for the three months ended September 30, 2024.

For the nine months ended September 30, 2025 and 2024, we incurred insignificant costs and cash spend related to GE HealthCare. For GE Vernova, we incurred insignificant costs and cash spend for the period ended September 30, 2025, and incurred pre-tax separation costs of $99 million, recognized $21 million of net tax benefit and paid $187 million in cash for the nine months ended September 30, 2024.

NOTE 20. 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 Level 3 and substantially all these liabilities’ fair value are considered Level 2.

(a) Primarily related to our run-off insurance operations. See Note 12 for further information.

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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 cash equivalents, investment securities (Note 3) and derivative financial instruments below.

DERIVATIVES AND HEDGING. Per our policy, derivatives are used solely for managing risks and not for speculative purposes. We use derivatives to manage risks related to foreign currency exchange (including foreign equity investments), interest rates and commodity prices.

We use foreign currency forward and cross-currency interest rate swap contracts designated as cash flow hedges primarily to reduce the effects of foreign exchange rate changes. The gains or losses on derivatives that are designated as cash flow hedges are initially recorded in Statement of Other Comprehensive Income (Loss) and subsequently reclassified to earnings when the hedged transaction affects earnings. We expect to reclassify $55 million of gains from AOCI to earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions.

We use our foreign currency debt and cross-currency interest rate swaps in net investment hedges to hedge currency exposure of our net investments in foreign operations. Gains and losses on net investment hedges are initially recorded in the Statement of Other Comprehensive Income (Loss). The carrying value of foreign currency debt designated as net investment hedges was $4,944 million and $5,199 million at September 30, 2025 and December 31, 2024, respectively.

For cross-currency interest rate swaps in qualified hedging relationships, we recognize the periodic interest settlements within Interest and other financial charges in the Statement of Operations. Such interest amounts were $9 million and $17 million for the three and nine months ended September 30, 2025, respectively. There wasno activity during the first three quarters of 2024. The cash flows associated with these periodic interest settlements are classified as operating activities in the Statement of Cash Flows.

We also use derivatives for economic hedges when we have exposures to currency exchange risk for which we are unable to meet the requirements for hedge accounting or when changes in the carrying amount of the hedged item are already recorded in income in the same period as the derivative making hedge accounting unnecessary. Even though the derivative is an effective economic hedge, there may be a net effect on income in each period due to differences in the timing of income recognition between the derivative and the hedged item.

(a) The fair values for cross-currency interest rate swaps are components of All other assets and All other Liabilities. All other derivatives included in the table are components of All other current assets and All other current liabilities in the Statement of Financial Position.

(b) Gains (losses) included in our Statement of Operations were $(22) million and $175 million for the three months ended September 30, 2025 and 2024, and $194 million and $237 million for nine months ended September 30, 2025 and 2024, respectively, primarily in SG&A, driven by hedges of foreign currency exchange and deferred employee compensation. Substantially all of these amounts are offset by the remeasurement of the underlying exposure through income.

CASH FLOW HEDGES AND NET INVESTMENT HEDGES

(a) Primarily currency exchange contracts, and recognized in SG&A and Costs of equipment or services sold in our Statement of Operations.

FAIR VALUE HEDGES. We used fair value hedges to hedge the effects of interest rate and currency changes on debt we issued. All fair value hedges were terminated in 2022 due to exposure management actions. The cumulative net gains related to hedging adjustments of $995 million and $1,037 million on discontinued hedges were included primarily inlong-term borrowings of $8,704 million and $8,387 million as of September 30, 2025 and December 31, 2024, respectively, and will continue to amortize into interest expense until the borrowings mature.

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COUNTERPARTY CREDIT RISK. Our exposures to counterparties (including accrued interest) were $152 million and $188 million at September 30, 2025 and December 31, 2024, respectively. Counterparties' exposures to our derivative liability (including accrued interest), were $95 million and $77 million at September 30, 2025 and December 31, 2024, respectively.

NOTE 21. VARIABLE INTEREST ENTITIES. In our Statement of Financial Position, we have assets of $166 million and $141 million and liabilities of $142 million and $131 million at September 30, 2025 and December 31, 2024, respectively, in consolidated Variable Interest Entities (VIEs). These VIEs are primarily associated with a legacy business in Corporate & Other 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 $8,856 million and $8,131 million at September 30, 2025 and December 31, 2024, respectively. Of these investments, $1,147 million and $1,280 million were in our U.S. tax equity portfolio, comprising equity method investments related to onshore renewable energy projects, at September 30, 2025 and December 31, 2024, respectively. In addition, $7,511 million and $6,665 million were in our run-off insurance operations, primarily comprised of equity method investments at September 30, 2025 and December 31, 2024, respectively. The increase in investments in unconsolidated VIEs in our run-off insurance operations reflects strategic initiatives to invest in higher-yielding asset classes. Our maximum exposure to loss with respect to unconsolidated VIEs is increased by our commitments to make additional investments in these entities described in Note 22.

NOTE 22. COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES AND OTHER LOSS CONTINGENCIES

COMMITMENTS. As of September 30, 2025, we had total investment commitments of $4,377 million, of which $4,246 million are related to investments by our run-off insurance operations in investment securities and other assets. Included within these commitments are obligations to make investments in unconsolidated VIEs of $4,050 million. We also have unfunded commitments for U.S. tax equity of $131 million. Additionally, we have committed to provide financing assistance of $2,583 million for future customer acquisitions of aircraft equipped with our engines. We believe there is a low probability of utilization of this financing assistance based on the terms under which the financing would be provided. See Note 21 for further information regarding VIEs.

GUARANTEES. Credit support and indemnification agreements - Continuing Operations. Following the separation of GE Vernova, we have remaining performance and bank guarantees on behalf of GE Vernova. To support GE Vernova in selling products and services globally, we 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"). Under the Separation and Distribution Agreement (SDA), GE Vernova is obligated to use reasonable best efforts to replace us 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), we could be obligated to make payments under the applicable instruments. Under the SDA, GE Vernova is obligated to reimburse and indemnify us for any such payments. Beginning in 2025, GE Vernova is paying us a quarterly fee based on amounts related to the GE Aerospace credit support. We have recorded a reserve of $101 million for our stand ready to perform obligation. Our 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 except for certain financial guarantees and trade finance instruments with a maximum exposure of approximately $222 million. 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 were required by us under parent company guarantees relating to GE Vernova customer contracts. In connection with the spin-off of GE Vernova, under terms of the SDA, Transition Service Agreement (TSA) and Tax Matters Agreement (TMA), we have an obligation to indemnify GE Vernova for certain of its severance costs, environmental matters and tax matters of $130 million, of which $88 million is reserved.

We also have remaining obligations under the TMA with GE HealthCare to indemnify them for certain tax costs and other indemnifications of $52 million, which are fully reserved.

In addition, we have $163 million of other indemnification commitments, including representations and warranties in sales of business assets, for which we recorded a liability of $53 million.

Credit support and indemnification agreements- Discontinued Operations. Following the separation of GE Vernova, we also have performance obligations related to GE Vernova nuclear decommissioning with a maximum aggregate exposure of $616 million for which we are fully indemnified. Also, under the SDA, TSA and TMA agreements we have obligations to indemnify GE Vernova for costs of certain environmental matters and tax matters of $34 million, which are fully reserved.

GE Aerospace also has obligations under the TMA to indemnify GE HealthCare for certain tax costs of $39 million, which are fully reserved.

We also have provided specific indemnities to other buyers of assets of our business that, in the aggregate, represent a maximum potential claim of $463 million with related reserves of $49 million.

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 $595 million and $592 million at September 30, 2025 and December 31, 2024, respectively.

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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, 2024 and Note 22 to the consolidated financial statements in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025; refer to those discussions 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.

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 $2,476 million and $2,461 million as of September 30, 2025 and December 31, 2024, respectively. This estimate accounts for the costs associated with 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 informed by experience since adopting the program. 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, 2024.

ENVIRONMENTAL, HEALTH AND SAFETY MATTERS. Our operations involve or have involved the use, disposal and cleanup of substances regulated under environmental protection laws, including activities for a variety of matters related to GE businesses that have been discontinued or exited. 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 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 worker exposure lawsuits, such amounts are not reasonably estimable. Total reserves related to environmental remediation and worker exposure claims were $2,118 million and $2,003 million at September 30, 2025 and December 31, 2024 respectively.

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NOTE 23. SEGMENT INFORMATION & REMAINING PERFORMANCE OBLIGATION. We havetwo reportable segments andthree operating segments. Operating segments are aggregated into a reportable segment if the operating segments have similar quantitative economic characteristics and if the operating segments are similar in the following qualitative characteristics: (i) nature of products and services; (ii) nature of production processes; (iii) type or class of customer for their products and services; (iv) methods used to distribute the products or provide services; and (v) if applicable, the nature of the regulatory environment. We have aggregated Defense & Systems and Propulsion & Additive Technology into one reportable segment, Defense & Propulsion Technologies, based on similarity in economic characteristics, other qualitative factors and the objectives and principles of ASC 280, Segment Reporting. This is consistent with how our chief operating decision maker (CODM) allocates resources and makes decisions. Refer to our Annual Report on Form 10-K for the year ended December 31, 2024, for a description of our segments, further information regarding our determination of segment profit for continuing operations and our allocations of corporate costs to our segments.

The Company does not report total assets by segment for internal or external reporting purposes as the Company’s CODM does not assess performance, make strategic decisions, or allocate resources based on assets.

(a) Other segment expenses (income) primarily includes equity method income, interest income and licensing and royalty income.

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REMAINING PERFORMANCE OBLIGATION. As of September 30, 2025, the aggregate amount of the contracted revenue allocated to our unsatisfied (or partially unsatisfied) performance obligations was $176,285 million. We expect to recognize revenue as we satisfy our remaining performance obligations as follows: (1) equipment-related remaining performance obligation of $25,284 million, of which 35%,60% and 93% is expected to be satisfied within 1,2 and 5 years, respectively; and (2) services-related remaining performance obligation of $151,001 million, of which 13%,43%,70% and 87% is expected to be recognized within 1,5,10 and 15 years, respectively, and the remaining thereafter.