GENERAL ELECTRIC CO

162026 1Q FORM 10-Q

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.

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, 2025.

NOTE 2. DISCONTINUED OPERATIONS. Our former GE Vernova business, 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 three months ended March 31, 2026, we had direct and indirect sales of $97 million to GE Vernova, primarily related to engine sales and parts. We collected net cash of $112 million related to the transition services agreement and sales of engines and parts for the three months ended March 31, 2026.

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 $2,090 million and $2,334 million as of March 31, 2026 and December 31, 2025, respectively, with the decrease driven by utilization and foreign exchange movements. No incremental contributions from GE Aerospace were required during the three months ended March 31, 2026. 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 March 31, 2026, the total portfolio hadno carrying value, net of a valuation allowance. Income (loss) related to ongoing borrower litigation waszero in pre-tax charges for the three months ended March 31, 2026 and 2025.

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(a) Included $997 million and $1,123 million of cash, cash equivalents and restricted cash related to Bank BPH as of March 31, 2026 and December 31, 2025, respectively. The decrease was primarily driven by utilization and foreign exchange movements.

(b) Included $1,255 million and $1,389 million of valuation allowances against financing receivables held for sale, related to estimated borrower litigation losses, and $835 million and $945 million in All other liabilities related to estimated borrower litigation losses for Bank BPH’s foreign currency-denominated mortgage portfolio as of March 31, 2026 and December 31, 2025, respectively. Accordingly, total estimated losses related to borrower litigation were $2,090 million and $2,334 million as of March 31, 2026 and December 31, 2025, respectively, with the decrease driven by utilization and foreign exchange movements. The valuation allowance completely offsets the financing receivables balance as of March 31, 2026 and December 31, 2025.

NOTE 3. INVESTMENT SECURITIES. 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, which substantially all are investment grade, and are classified as available-for-sale.

The amortized cost of debt securities excludes accrued interest of $500 million and $473 million at March 31, 2026 and December 31, 2025, respectively, which is reported in All other current assets.

The estimated fair value of non-current investment securities at March 31, 2026 decreased since December 31, 2025, primarily due to higher market yields, the mark-to-market effect on our equity interests partially offset by net purchases from debt/equity securities.

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Total estimated fair value of debt securities in an unrealized loss position were $20,750 million and $18,484 million, of which $13,974 million and $14,656 million had gross unrealized losses of $(2,763) million and $(2,525) million and have been in a loss position for 12 months or more at March 31, 2026 and December 31, 2025, 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.

Contractual maturities of our debt securities (excluding mortgage and asset-backed securities) at March 31, 2026 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 $3,389 million and $3,222 million, are classified within Level 3, as significant inputs to their valuation models are unobservable at March 31, 2026 and December 31, 2025, respectively. During the three months ended March 31, 2026, $118 million was transferred out of Level 3 and there wereno transfers into Level 3. During the three months ended March 31, 2025, $949 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, and there wereno significant transfers into Level 3.

In addition to the equity securities described above, we held $1,971 million and $1,911 million of equity securities without RDFV including $1,941 million and $1,881 million within our run-off insurance operations at March 31, 2026 and December 31, 2025, respectively, that are classified within All other assets in our Statement of Financial Position. Fair value adjustments, net of impairments, recorded in income were $40 million and $38 million for the three months ended March 31, 2026 and 2025, 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.

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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 $40 million and $92 million during thethree months ended March 31, 2026 and 2025, respectively, related primarily to our participation in customer-sponsored supply chain finance programs. Within these programs, primarily in the Commercial Engines & Services (CES) segment, 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.

(a) The decrease was primarily driven by the write-off of allowance against uncollectible accounts.

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 $282 million and $280 million as of March 31, 2026 and December 31, 2025, respectively. Our non-current operating lease liabilities, included in All other liabilities in our Statement of Financial Position, were $762 million and $783 million as of March 31, 2026 and December 31, 2025, respectively. Expense on our operating lease portfolio, primarily from our long-term fixed leases, was $76 million and $98 million for the three months ended March 31, 2026 and 2025, 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 first quarter of 2026, we did not identify any reporting units that required an interim impairment test.

Other intangible assets decreased $74 million during the three months ended March 31, 2026, primarily as a result of amortization and foreign currency exchange, partially offset by additions. Consolidated amortization expense was $85 million and $89 million in the three months ended March 31, 2026 and 2025, 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, decreased the net liability position by $84 million for the three months ended March 31, 2026, primarily due to decreases in long-term service agreement liabilities of $159 million, partially offset by decreases in long-term service agreement assets of $54 million. In aggregate, the net liability for long-term service agreements decreased primarily due to revenue recognized of $2,661 million, partially offset by billings of $2,571 million and net unfavorable changes in estimated profitability of $23 million driven by quarterly updates to contract margins, including a reversal of $118 million of tariff-related charges taken in the three months ended March 31, 2025, primarily in CES. Revenue recognized for contracts included in a liability position at the beginning of the year were $2,890 million and $2,040 million for the three months ended March 31, 2026, and 2025, respectively.

(a) Includes contract fulfillment costs for engineering and development incurred prior to production for equipment production contracts, primarily within our Defense & Propulsion Technologies (DPT) 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. The most significant program relates to DPT contracts for the Boeing 777X aircraft, which will be amortized once entered into service.

(b) Includes amounts due from customers within our CES 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 $59 million in the three months ended March 31, 2026, primarily due to collections received in excess of liquidations at CES.

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 decreased $118 million during the three months ended March 31, 2026, primarily driven by a decrease in insurance cash of $446 million, partially offset by an increase in equity method and other investments of $292 million. Insurance cash and cash equivalents were $818 million and $1,264 million at March 31, 2026 and December 31, 2025, 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").

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

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NOTE 11. ACCOUNTS PAYABLE

(a) Revenue sharing and other partner payables are primarily amounts due to revenue sharing and joint venture 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.

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 $717 million and $874 million for the three months ended March 31, 2026 and 2025, 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. Our insurance operations (net of eliminations) generated revenue of $778 million and $934 million, profit was $130 million and $205 million and net income was $104 million and $163 million for the three months ended March 31, 2026 and 2025, respectively. These operations were primarily supported by investment securities, substantially all debt securities, of $37,583 million and $37,842 million, limited partnerships of $5,236 million and $5,089 million, a diversified commercial mortgage loan portfolio collateralized by first liens on U.S. commercial real estate properties of $1,779 million and $1,802 million (net of allowance for credit losses of $21 million and $19 million) and residential mortgage loans of $419 million and $395 million (net of allowance for credit losses of an insignificant amount), as of March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, 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 59%, debt service coverage of 1.7, 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) Determined using the current discount rate as of March 31, 2026 and 2025.

As of March 31, 2026 and 2025, policyholders account balances totaled $1,353 million and $1,535 million, respectively. As our insurance operations are in run-off, changes in policyholder account balances for the three months ended March 31, 2026 and 2025 are primarily attributed to surrenders, withdrawals and benefit payments of $87 million and $114 million, partially offset by net additions from separate accounts and interest credited of $64 million and $74 million, respectively. Interest on policyholder account balances is generally credited at minimum guaranteed rates, primarily between 3.0% and 6.0% at both March 31, 2026 and 2025, respectively.

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, 2025 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.

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Principal retiree benefit plans income was $13 million and $15 million for the three months ended March 31, 2026 and 2025, respectively.

We have a defined contribution plan for eligible U.S. employees that provides employer contributions, which were $97 million and $80 million for the three months ended March 31, 2026 and 2025, respectively.

NOTE 14. SALES DISCOUNTS AND ALLOWANCES & ALL OTHER LIABILITIES. Sales discounts and allowances increased by $1,000 million during the three months ended March 31, 2026, primarily due to increases in allowances on new engine installs and spare parts, as well as product durability reserves at CES.

All other current liabilities and All other liabilities primarily include employee compensation and benefits, equipment project and commercial liabilities, uncertain and other income taxes and related liabilities, environmental, health and safety remediations and operating lease liabilities (see Note 6). All other current liabilities decreased by $905 million during the three months ended March 31, 2026, primarily related to a decrease in employee compensation and benefits of $874 million. All other liabilities decreased $51 million during the three months ended March 31, 2026, primarily due to a decrease in uncertain and other income taxes and related liabilities of $134 million, partially offset by an increase in environmental, health and safety liabilities of $93 million.

NOTE 15. INCOME TAXES. Our effective income tax rate was 11.5% and 12.6% for the three months ended March 31, 2026 and 2025, respectively. The decrease in our effective tax rate was primarily driven by increased tax benefits on global activities, including the impact of the One Big Beautiful Bill Act (OBBBA), and equity compensation, which were partially offset by a decrease in favorable audit resolutions and benefits from foreign tax credits on the reinsurance transaction that occurred in the prior-year period.

In 2026, the Organisation for Economic Co-operation and Development (OECD)/G20 issued a Side-by-Side package (SbS) that simplifies Pillar 2, creates new safe harbors, fully exempts U.S.-parented groups from two of the three top-up taxes, and extends the Transitional Country-by-Country Reporting (CbCR) Safe Harbor through fiscal year 2027. In certain jurisdictions, local legislative action is needed to effectuate the SbS agreement and cannot be considered in our accounting estimate until enactment. We continue to refine the effective tax rate and cash tax impact of Pillar 2 as legislative changes are implemented in multiple countries, but we do not expect significant changes in the tax provision as countries adopt the SbS.

The Internal Revenue Service (IRS) is currently auditing our consolidated U.S. income tax returns for 2016-2020. In March 2026, we received Acknowledgement of Facts Information Document Requests (AOF IDRs) from the IRS regarding this audit. The AOF IDRs relate to the Company's income tax computations before and after the 2017 Tax Cuts and Jobs Act, which among other things provided for a one-time transition tax on certain undistributed earnings and profits of foreign subsidiaries. The Company is responding to these requests and believes the previously accrued amounts are sufficient; however, the IRS may assert a material amount of additional taxes as this process continues. The Company would contest any such additional taxes, and it is not possible to provide a meaningful estimate of such amount at this time. Any tax obligations would be allocated among the Company, GE Vernova and GE HealthCare in accordance with the tax matters agreements entered into as part of the separations. Regardless of the outcome, a final resolution of this matter could be time-consuming and is not likely within the next 12 months. An unfavorable ultimate resolution of this matter could adversely affect the Company's results of operations and cash flow.

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

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NOTE 16. SHAREHOLDERS’ EQUITY

Common stock. GE Aerospace common stock shares outstanding were 1,043,337,235 and 1,048,766,702 at March 31, 2026 and December 31, 2025, respectively. We repurchased 7.2 million shares for a total of $2,211 million during the three months ended March 31, 2026. This included repurchases of 4.2 million shares for $1,310 million using accelerated stock repurchases, which were utilized as a mechanism to achieve planned repurchase volumes within a 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) Outstanding stock awards not included in the computation of diluted earnings per share because their effect was antidilutive.

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NOTE 18. OTHER INCOME (LOSS)

(a) Included unrealized loss of $309 million related to our investment in BETA Technologies, Inc. for the three months ended March 31, 2026.

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 March 31, 2026 and December 31, 2025 was $77 million and $91 million, respectively.

For the three months ended March 31, 2026, and 2025, restructuring and other charges for ongoing programs included exit activities reflecting lower Corporate & Other shared-service and footprint needs as a result of the GE HealthCare and GE Vernova spin-offs.

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, primary related to 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.

For the three months ended March 31, 2026 and 2025, we incurred pre-tax separation costs of $55 million and $51 million, recognized $12 million and $10 million of net tax benefits and paid $83 million and $76 million in cash, respectively.

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.

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 (see 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.

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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 $32 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 $4,847 million and $4,958 million at March 31, 2026 and December 31, 2025, respectively.

We use interest rate swaps in fair value hedges to hedge the effects of interest rates on debt we issued. The gains or losses on derivatives that are designated as fair value hedges are recognized in the same line in the Statement of Operations as the hedged debt.

For cross-currency interest rate swaps and 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 $2 million for the three months ended March 31, 2026 and 2025, respectively. 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 of derivatives classified as current are components of All other current assets and All other current Liabilities. Fair values of derivatives classified as non-current are components of All other assets and All other liabilities in the Statement of Financial Position.

(b) Gains (losses) included in our Statement of Operations are $(35) million and $35 million for the three months ended March 31, 2026 and 2025, 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 earnings.

CASH FLOW HEDGES AND NET INVESTMENT HEDGES

(a) Consist of currency exchange contracts and cross-currency interest rate swaps, primarily recognized in SG&A and costs of equipment or services sold in our Statement of Operations.

FAIR VALUE HEDGES. At March 31, 2026 and December 31, 2025, the cumulative amount of hedging adjustments (primarily from discontinued hedges) of $930 million and $969 million were included primarily inlong-term borrowings of $8,218 million and $8,286 million, respectively. Cumulative adjustments related to previously discontinued hedges will continue to amortize into interest expense until the borrowings mature.

COUNTERPARTY CREDIT RISK. Our exposures to counterparties (including accrued interest) were $127 million and $187 million at March 31, 2026 and December 31, 2025, respectively. Counterparties' exposures to our derivative liability (including accrued interest), were $94 million and $71 million at March 31, 2026 and December 31, 2025, respectively.

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NOTE 21. VARIABLE INTEREST ENTITIES. In our Statement of Financial Position, we have assets of $189 million and $170 million and liabilities of $151 million and $144 million at March 31, 2026 and December 31, 2025, 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 $9,150 million and $8,976 million at March 31, 2026 and December 31, 2025, respectively. Of these investments, $1,201 million and $1,114 million were in our U.S. tax equity portfolio, comprising equity method investments related to onshore renewable energy projects, at March 31, 2026 and December 31, 2025, respectively. In addition, $7,739 million and $7,660 million were in our run-off insurance operations, primarily comprised of equity method investments at March 31, 2026 and December 31, 2025, 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 March 31, 2026, we had total investment commitments of $4,010 million, of which 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 $3,882 million. Additionally, we have committed to provide financing assistance of $3,148 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.

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. As of March 31, 2026, we estimated GE Vernova RPO and other obligations that relate to GE Aerospace credit support to be approximately $7,500 million, a more than 88% reduction since December 31, 2023. We expect approximately $5,500 million of the RPO related to GE Aerospace credit support obligations to contractually mature by the end of 2030. Additionally, 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 $67 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 $218 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 $153 million, of which $109 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 $55 million, which are fully reserved.

We also have provided specific indemnities to other buyers of assets of our GE legacy businesses that, in the aggregate, represent a maximum potential claim of $129 million with related reserves of $15 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 $628 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 $36 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 GE legacy businesses that, in the aggregate, represent a maximum potential claim of $401 million with related reserves of $36 million.

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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 $555 million and $595 million at March 31, 2026 and December 31, 2025.

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, 2025; refer to that discussion for information about previously reported legal matters that are not updated below. In the normal course of our business, we are involved from time to time in various arbitrations, class actions, commercial litigation, investigations and other legal, regulatory or governmental actions, including the significant matters described below that could have a material impact on our results of operations. In many proceedings, including the specific matters described below, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the size or range of the possible loss, and accruals for legal matters are not recorded until a loss for a particular matter is considered probable and reasonably estimable. Given the nature of legal matters and the complexities involved, it is often difficult to predict and determine a meaningful estimate of loss or range of loss until we know, among other factors, the particular claims involved, the likelihood of success of our defenses to those claims, the damages or other relief sought, how discovery or other procedural considerations will affect the outcome, the settlement posture of other parties and other factors that may have a material effect on the outcome. For these matters, unless otherwise specified, we do not believe it is possible to provide a meaningful estimate of loss at this time. Moreover, it is not uncommon for legal matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated.

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 $2,090 million and $2,334 million as of March 31, 2026 and December 31, 2025, 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, 2025.

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, polychlorinated biphenyls (PCBs) 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 due to uncertainties about the status of laws, regulations, technology and information related to individual sites and worker exposure lawsuits. Total reserves related to environmental remediation and worker exposure claims were $2,179 million and $2,129 million at March 31, 2026 and December 31,2025, 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, 2025, 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.

On January 15, 2026, we announced that our Commercial Engines & Services (CES) segment will expand to include the entire commercial engine lifecycle, including safety and quality, product management, engineering, supply chain, manufacturing and aftermarket services. In addition, our Aeroderivative business, previously reported in CES, has moved to our Defense Propulsion & Technologies segment. We have recast previously reported amounts to conform to the updated segment presentation.

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.

REMAINING PERFORMANCE OBLIGATION. As of March 31, 2026, the aggregate amount of the contracted revenue allocated to our unsatisfied (or partially unsatisfied) performance obligations was $211,299 million. We expect to recognize revenue as we satisfy our remaining performance obligations as follows: (1) equipment-related remaining performance obligation of $31,390 million, of which 31%,53% and 90% is expected to be satisfied within 1,2 and 5 years, respectively; and (2) services-related remaining performance obligation of $179,909 million, of which 11%,39%,65% and 82% is expected to be recognized within 1,5,10 and 15 years, respectively, and the remaining thereafter.

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