General Electric Co 10-Q for FY2026 Q2
General Electric Co (GE)
10-Q
2026-07-16
For: 2026-06-30
View Original
Added on
July 16, 2026
About this 10-Q
General Electric Co filed this 10-Q on July 16, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $13.35B
- up 21.1% from $11.02B a year earlier
- Net income
- $2.37B
- up 16.9% from net income of $2.03B a year earlier
- Diluted EPS
- $2.26
- up 19.6% from $1.89 a year earlier
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended June 30, 2026
OR
For the transition period from ____ to ____
Commission file number 001-00035
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
(Registrant’s telephone number, including area code) (513 ) 243-2000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
☑ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
There were 1,037,562,513 shares of common stock with a par value of $0.01 per share outstanding at June 30, 2026.
TABLE OF CONTENTS
| Page | |||||
About GE Aerospace | |||||
Corporate & Other | |||||
Statement of Operations | |||||
Note 6 Property, Plant and Equipment and Operating Leases | |||||
Note 8 Contract and Other Deferred Assets, Contract Liabilities and Deferred Income & Progress Collections | |||||
Note 18 Other Income (Loss) | |||||
Note 23 Segment Information & Remaining Performance Obligation | |||||
FORWARD-LOOKING STATEMENTS. Our public communications and filings we make with the U.S. Securities and Exchange Commission (SEC) may contain statements related to future, not past, events. These forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "estimate," "forecast," "target," "preliminary," "range" or similar expressions. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the impacts of macroeconomic and market conditions and volatility on our business operations, financial results and financial position; conditions affecting the aerospace industry, including our customers and suppliers; our expected financial performance, including cash flows, revenue, margins, net income and earnings per share; planned and potential transactions; our credit ratings and outlooks; our funding and liquidity; our cost structures and plans to reduce costs; restructuring, impairment or other financial charges; or tax rates.
For us, particular areas where risks or uncertainties could cause our actual results to be materially different than those expressed in our forward-looking statements include:
•changes in macroeconomic and market conditions and market volatility (including risks related to recession, inflation, supply chain constraints or disruptions, interest rates, values of financial assets, oil, jet fuel and other commodity prices and exchange rates), and the impact of such changes and volatility on our business operations and financial results;
•market or other developments that may affect demand or the financial strength and performance of airframers, airlines, suppliers and other key aerospace industry participants, such as demand for air travel, supply chain or other production constraints, shifts in U.S. or foreign government defense programs and other industry dynamics;
•pricing, cost, volume and the timing of sales, deliveries, investment and production by us and our customers, suppliers or other industry participants;
•the impact of actual or potential safety or quality issues or failures of our products or third-party products with which our products are integrated, including design, production, performance, durability or other issues, and related costs and reputational effects;
•operational execution on our business plans, including our performance amidst market growth and ramping newer product platforms, meeting delivery and other contractual obligations, improving turnaround times in our services businesses and reducing costs over time;
•global economic trends, competition and geopolitical risks, including evolving impacts from tariffs, sanctions or other trade tensions between the U.S. and other countries, or demand or supply shocks from events such as a major terrorist attack, war (including conflict in the Middle East), natural disasters or actual or threatened public health pandemics or other emergencies;
•the amount and timing of our income and cash flows, which may be impacted by macroeconomic, customer, supplier, competitive, contractual, financial or accounting (including changes in estimates) and other dynamics and conditions;
•our capital allocation plans, including the timing and amount of dividends, share repurchases, acquisitions, organic investments and other priorities;
•our decisions about investments in research and development or new products, services and platforms, and our ability to launch new products in a cost-effective manner, as well as technology developments and other dynamics that could shift the demand or competitive landscape for our products and services;
•our success in executing planned and potential transactions, including the timing for such transactions, the ability to satisfy regulatory requirements or any applicable pre-conditions and the expected benefits;
•downgrades of our credit ratings or ratings outlooks, or changes in rating application or methodology, and the related impact on our funding profile, costs, liquidity and competitive position;
•capital or liquidity needs associated with our run-off insurance operations or mortgage portfolio in Poland (Bank BPH), the amount and timing of any required future capital contributions and any strategic options that we may consider;
•changes in law, regulation or policy that may affect our business, including policies related to trade, tariffs or capital allocation; government defense priorities or budgets; environmental or climate regulation, incentives and emissions offsetting or trading regimes and the effects of tax law changes or audits;
•the impact of regulation; government investigations; regulatory, commercial and legal proceedings or disputes; environmental, health and safety matters; or other legal compliance risks, including the impact of shareholder and related lawsuits, Bank BPH and other proceedings that are described in our SEC filings;
•the impact related to information technology, cybersecurity, artificial intelligence or data security developments or breaches at GE Aerospace or third parties; and
•the other factors that are described in the "Risk Factors" section in our Annual Report on Form 10-K for the year ended December 31, 2025, as such descriptions may be updated or amended in future reports we file with the SEC.
These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
2026 2Q FORM 10-Q 3
ABOUT GE AEROSPACE. General Electric Company operates as GE Aerospace (GE Aerospace or the Company). GE Aerospace is a global aerospace leader with the industry's largest and growing commercial propulsion fleet. The Company’s installed base of approximately 50,000 commercial and 30,000 military engines, including parked aircraft in addition to fleet in service, supports its aftermarket services business, representing approximately 70% of revenue. Through FLIGHT DECK, the Company's proprietary lean operating model, GE Aerospace is accelerating its lean progress, prioritizing safety, quality, delivery and cost, to drive focused execution and bridge strategy to results. We are focused on delivering against our strategic priorities of today (ramping services and equipment), tomorrow (expanding capacity and capabilities) and the future (inventing the future of flight). Our global team is building on more than a century of innovation and learning, as we invent the future of flight, lift people up and bring them home safely.
GE Aerospace’s Internet address at www.geaerospace.com and Investor Relations website at www.geaerospace.com/investor-relations, as well as GE Aerospace’s LinkedIn and other social media accounts, contain a significant amount of information about GE Aerospace, including financial and other information for investors. GE Aerospace encourages investors to visit these websites from time to time, as information is updated and new information is posted.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A). The consolidated financial statements of GE Aerospace are prepared in conformity with U.S. generally accepted accounting principles (GAAP). Unless otherwise noted, tables are presented in U.S. dollars in millions. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented in this report are calculated from the underlying numbers in millions. Discussions throughout this MD&A are based on continuing operations unless otherwise noted. The MD&A should be read in conjunction with the Financial Statements and Notes to the consolidated financial statements.
In the accompanying analysis of financial information, we sometimes use information derived from consolidated financial data but not presented in our financial statements prepared in accordance with GAAP. Certain of these data are considered “non-GAAP financial measures” under SEC rules. See the Non-GAAP Financial Measures section for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures.
BUSINESS OVERVIEW AND ENVIRONMENT. As a global aerospace company, our worldwide operations can be affected by industrial, economic, and political factors on both a regional and global level. Demand for our equipment and services is demonstrated by our backlog of engine orders and services and growth in our installed base, and tends to follow commercial air travel and freight demand and government funding for defense budgets. We expect a significant ramp in our delivery of engine units and services for newer product platforms in the years ahead to meet this demand. Refer to the Segment Operations sections for Commercial Engines & Services (CES) and Defense & Propulsion Technologies (DPT) below for additional detail about these dynamics for our commercial and defense businesses, respectively.
Global material availability continues to cause disruptions and have impacted our production and delivery of equipment and services to our customers. We are investing in our manufacturing facilities, overhaul facilities and our supply chain to increase production and strengthen yield in order to improve delivery to our customers. We are leveraging FLIGHT DECK and partnering with suppliers to improve material input while also proactively managing the impact of inflationary pressure by driving cost productivity and adjusting the pricing of our products and services. We expect the impact of supply chain constraints and inflation will continue, and we are continuing to take action to mitigate the impacts. However, through FLIGHT DECK and the engagement with our suppliers, aftermarket output and engine deliveries have continued to improve quarter over quarter.
We support efforts to revitalize domestic manufacturing and are planning to invest $1 billion in U.S. manufacturing and hire 5,000 U.S workers in 2026, including both engineering and manufacturing roles. At the same time, we support promoting free and fair trade that ensures the continued strength of the U.S aerospace industry.
As we operate in a highly dynamic tariff environment, we are focused on continuing to deliver our products and services to our customers. Given our global business, tariffs result in additional cost for us and our suppliers. In 2025, the U.S. established a zero-for-zero tariff agreement on aerospace equipment with the EU, UK, Japan and Korea, establishing a mutual elimination of tariffs. In 2026, the Supreme Court ruled against tariffs imposed under the International Emergency Economic Powers Act (IEEPA). In the second quarter, GE Aerospace submitted refund requests and received a portion of previously paid IEEPA tariffs. We will continue to monitor recent developments on tariff policy and evaluate any changes to the applicability of tariffs to our business as they occur.
We are monitoring recent developments related to the conflict in the Middle East and the potential impact on the commercial aerospace industry, including lower utilization and increased prices, which can result in adverse effects on our airline customers. As a result, the impacts to our business may include lower volume related to shop visits, spare parts and spare engines and lower profitability of our long term contracts, as well as customer credit implications. We remain confident in our ability to navigate this with our young and diverse fleet, and we are also proactively taking action on costs. The conflict did not result in a material impact on our operations in the six months ended June 30, 2026.
On January 15, 2026, we announced that our 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 DPT segment. See Note 23 for further information.
4 2026 2Q FORM 10-Q
CONSOLIDATED RESULTS
| REVENUE | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Equipment revenue | $ | 3,602 | $ | 2,842 | $ | 6,870 | $ | 5,496 | ||||||||||||
| Services revenue | 9,031 | 7,308 | 17,378 | 13,656 | ||||||||||||||||
| Insurance revenue | 715 | 872 | 1,493 | 1,806 | ||||||||||||||||
| Total revenue | $ | 13,349 | $ | 11,023 | $ | 25,741 | $ | 20,957 | ||||||||||||
For the three months ended June 30, 2026, total revenue increased $2.3 billion, or 21%, compared to the three months ended June 30, 2025. Equipment revenue increased, driven by increased engine deliveries and improved pricing. Services revenue increased due to increased internal shop visit volume and workscopes, higher spare parts volume and pricing.
For the six months ended June 30, 2026, total revenue increased $4.8 billion, or 23%, compared to the six months ended June 30, 2025. Equipment revenue increased, driven by increased engine deliveries and improved pricing. Services revenue increased due to increased internal shop visit volume and workscopes, higher spare parts volume and pricing.
| NET INCOME (LOSS) AND EARNINGS (LOSS) PER SHARE (EPS) | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
(Per-share in dollars and diluted) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||
| Net income (loss) from continuing operations attributable to common shareholders | $ | 2,408 | $ | 2,008 | $ | 4,338 | $ | 3,975 | ||||||||||||
| Continuing EPS | $ | 2.30 | $ | 1.87 | $ | 4.13 | $ | 3.70 | ||||||||||||
For the three months ended June 30, 2026, net income from continuing operations increased $0.4 billion compared to the three months ended June 30, 2025, driven by an increase in segment profit of $0.5 billion and an increase in gains (losses) on retained and sold ownership interests and other equity securities of $0.1 billion. The increase was partially offset by an increase in interest and other financial charges of $0.1 billion and an increase in Adjusted Corporate & Other operating costs* of $0.1 billion. Adjusted net income* was $2.1 billion, an increase of $0.3 billion, due to an increase in segment profit of $0.5 billion, partially offset by an increase in Adjusted Corporate & Other operating costs* of $0.1 billion.
Profit was $2.8 billion, an increase of $0.4 billion and profit margin was 21.0%, a decrease of 70 basis points. Operating profit* was $2.7 billion, an increase of $0.4 billion and operating profit margin* was 21.7%, a decrease of 130 basis points. Adjusted EPS* was $2.02, an increase of 22%.
For the six months ended June 30, 2026, net income from continuing operations increased $0.4 billion compared to the six months ended June 30, 2025, driven by an increase in segment profit of $1.0 billion, partially offset by a decrease in gains (losses) on retained and sold ownership interests and other equity securities of $0.3 billion, an increase in Adjusted Corporate & Other operating costs* of $0.2 billion, an increase in interest and other financial charges of $0.1 billion and a decrease in Insurance profit of $0.1 billion. Adjusted net income* was $4.1 billion, an increase of $0.7 billion, due to an increase in segment profit of $1.0 billion, partially offset by an increase in Adjusted Corporate & Other operating costs* of $0.2 billion.
Profit was $5.0 billion, an increase of $0.4 billion and profit margin was 19.4%, a decrease of 270 basis points. Operating profit* was $5.3 billion, an increase of $0.8 billion and operating profit margin* was 21.8%, a decrease of 160 basis points. Adjusted EPS* was $3.88, an increase of 24%.
Remaining performance obligation (RPO) is unfilled customer orders for products and product services (expected life of contract sales for product services) excluding any purchase order that provides the customer with the ability to cancel or terminate without incurring a substantive penalty. See Note 23 for further information.
| RPO | June 30, 2026 | December 31, 2025 | |||||||||
| Equipment | $ | 32,085 | $ | 27,534 | |||||||
| Services | 178,705 | 163,029 | |||||||||
| Total RPO | $ | 210,790 | $ | 190,564 | |||||||
As of June 30, 2026, RPO increased $20.2 billion, or 11%, from December 31, 2025, primarily at CES, as a result of commercial actions and increases to existing long-term service agreements, and at DPT, driven by Defense & Systems equipment orders outpacing revenue recognized.
*Non-GAAP Financial Measure
2026 2Q FORM 10-Q 5
SEGMENT OPERATIONS
COMMERCIAL ENGINES & SERVICES. We are in frequent communication with our airline, airframe and maintenance, repair and overhaul (MRO) customers about the outlook for commercial air travel, new aircraft production, fleet retirements and after-market services, including shop visit and spare parts demand. In the first six months of 2026, there was a strong demand for engines and services, while commercial air travel departures were roughly flat.
Demand continues to be strong and, in the first half of 2026, we announced significant new deals with several major customers. United Airlines and Delta Airlines selected our GENx engines to power their widebody Boeing 787 Dreamliner orders. American Airlines and Copa Airlines selected LEAP engines for their narrowbody orders. Ryanair signed a long-term material services agreement to support Ryanair's entire fleet of about 2,000 CFM56 and LEAP engines powering its Boeing 737 aircraft.
To meet the strong demand, we are investing in our manufacturing and overhaul facilities and continue to strengthen our external global MRO network to support LEAP aftermarket demand by adding Iberia as the seventh Premier MRO and expanding Delta TechOps capabilities for both LEAP 1-A and LEAP 1-B engines. We are also deploying engineering and supply chain resources to increase production, expand capacity and strengthen yield.
These investments combined with improved material availability contributed to internal shop visit revenue growth of 30% in the first half of 2026, and total engine deliveries and LEAP engine deliveries increases of 37% and 41%, respectively.
Total engineering investments, both company and partner-funded, increased compared to prior year, and we continue to improve our products and advance our future of flight priorities. We recently completed the certification for the LEAP 1-B durability kit, including the upgraded HPT blade, which is expected to deliver approximately double time-on-wing for that engine. And for future of flight - In the first half of 2026, together with the Civil Aviation Authority of Singapore and Airbus, we established the world’s first airport test bed for RISE technologies, focused on Open Fan. In addition, through the NASA Electrified Powertrain Flight Demonstration, we recently completed ground tests for the megawatt-class hybrid electric demonstrator.
| Sales in units, except where noted | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Commercial Engines | 659 | 525 | 1,299 | 951 | ||||||||||||||||
| LEAP Engines(a) | 510 | 410 | 1,030 | 729 | ||||||||||||||||
| Internal shop visit revenue growth % | 25 | % | 22 | % | 30 | % | 16 | % | ||||||||||||
| (a) LEAP engines, which are in a significant production ramp, are a subset of Commercial Engines. | ||||||||||||||||||||
| SEGMENT REVENUE AND PROFIT | Three months ended June 30 | Six months ended June 30 | |||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Equipment | $ | 2,297 | $ | 1,765 | $ | 4,399 | $ | 3,514 | |||||||||||||||||||||||||||
| Services | 7,434 | 5,881 | 14,251 | 10,796 | |||||||||||||||||||||||||||||||
| Total segment revenue | $ | 9,731 | $ | 7,646 | $ | 18,650 | $ | 14,309 | |||||||||||||||||||||||||||
| Segment profit | $ | 2,657 | $ | 2,208 | $ | 5,012 | $ | 4,118 | |||||||||||||||||||||||||||
| Segment profit margin | 27.3 | % | 28.9 | % | 26.9 | % | 28.8 | % | |||||||||||||||||||||||||||
For the three months ended June 30, 2026, revenue was up $2.1 billion, or 27%, and profit was up $0.4 billion, or 20%, compared to the three months ended June 30, 2025.
Revenue increased due to internal shop visit volume and workscopes, increased spare parts volume, increased install engine deliveries and pricing.
Profit increased primarily due to internal shop visit volume and workscopes, increased spare parts volume, and price. These increases were partially offset by the impact of higher install engine deliveries, higher growth investment and inflation.
For the six months ended June 30, 2026, revenue was up $4.3 billion, or 30%, and profit was up $0.9 billion, or 22%, compared to the six months ended June 30, 2025.
Revenue increased due to internal shop visit volume and workscopes, increased spare parts volume, increased install engine deliveries and pricing.
Profit increased primarily due to internal shop visit volume and workscopes, increased spare parts volume, price and a lower unfavorable change in estimated profitability on long-term service agreements, primarily driven by the absence of charges. In the first quarter of 2026, we recorded an unfavorable change in estimated profitability on long-term service agreements of less than $0.1 billion, including a $0.1 billion reversal of a majority of the tariff-related charge in the first quarter of 2025. These increases were partially offset by the impact of higher install engine deliveries and higher growth investment.
6 2026 2Q FORM 10-Q
| RPO | June 30, 2026 | December 31, 2025 | |||||||||
| Equipment | $ | 9,618 | $ | 9,773 | |||||||
| Services | 170,282 | 154,712 | |||||||||
| Total RPO | $ | 179,900 | $ | 164,485 | |||||||
As of June 30, 2026, RPO increased $15.4 billion, or 9%, from December 31, 2025, as a result of commercial actions and increases to existing long-term service agreements.
DEFENSE & PROPULSION TECHNOLOGIES. Our results in the second quarter of 2026 reflect domestic and international government defense departments’ focus on modernizing and scaling their forces while maintaining flight operations, driving services demand. A key underlying driver of our business is government funding, as most of the revenue in Defense & Systems is derived from funding that flows through the U.S. Department of War budget or equivalent international budgets. Defense & Systems engine deliveries showed progress in the first half of 2026, increasing 15%, supported by improved material supply.
In the first half of 2026, GE Aerospace was awarded a NAVAIR contract to supply T408-GE-400 engines for the U.S. Marine Corps' Sikorsky CH-53K King Stallion helicopter. We also announced a contract award from Turkish Aerospace Industries (TAI) to continue integrating the GE Aerospace F404 engine into Türkiye's jet trainer Hurjet.
| Sales in units | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Defense & Systems engines(a) | 199 | 186 | 384 | 335 | ||||||||||||||||
(a) Includes Defense and Aeroderivative units.
| SEGMENT REVENUE AND PROFIT | Three months ended June 30 | Six months ended June 30 | |||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Defense & Systems (D&S) | $ | 2,213 | $ | 1,981 | $ | 4,302 | $ | 3,807 | |||||||||||||||||||||||||||
| Propulsion & Additive Technologies (P&AT) | 1,230 | 997 | 2,354 | 1,869 | |||||||||||||||||||||||||||||||
| Total segment revenue | $ | 3,443 | $ | 2,978 | $ | 6,657 | $ | 5,676 | |||||||||||||||||||||||||||
| Equipment | $ | 1,744 | $ | 1,469 | $ | 3,350 | $ | 2,692 | |||||||||||||||||||||||||||
| Services | 1,699 | 1,509 | 3,307 | 2,984 | |||||||||||||||||||||||||||||||
| Total segment revenue | $ | 3,443 | $ | 2,978 | $ | 6,657 | $ | 5,676 | |||||||||||||||||||||||||||
| Segment profit | $ | 475 | $ | 403 | $ | 855 | $ | 729 | |||||||||||||||||||||||||||
| Segment profit margin | 13.8 | % | 13.5 | % | 12.8 | % | 12.8 | % | |||||||||||||||||||||||||||
For the three months ended June 30, 2026, revenue was up $0.5 billion, or 16%, and profit was up $0.1 billion, or 18%, compared to the three months ended June 30, 2025.
D&S and P&AT revenue increased primarily due to increased volume and price, including higher engine deliveries in D&S.
Profit increased primarily due to volume and price, partially offset by inflation, mix and incremental investments to support next-generation products.
For the six months ended June 30, 2026, revenue was up $1.0 billion, or 17%, and profit was up $0.1 billion, or 17%, compared to the six months ended June 30, 2025.
D&S and P&AT revenue increased primarily due to increased volume and price, including higher engine deliveries in D&S.
Profit increased primarily due to volume and price, partially offset by inflation, mix and incremental investments to support next-generation products.
| RPO | June 30, 2026 | December 31, 2025 | |||||||||
| Equipment | $ | 22,467 | $ | 17,762 | |||||||
| Services | 8,197 | 8,094 | |||||||||
| Total RPO | $ | 30,663 | $ | 25,856 | |||||||
As of June 30, 2026, RPO increased $4.8 billion, or 19%, from December 31, 2025, primarily due to increases in equipment from orders outpacing revenue recognized.
CORPORATE & OTHER. Corporate & Other revenue includes our run-off insurance operations revenue and the elimination of intercompany activities. Corporate & Other operating profit includes Corporate functions and operations costs, certain costs of our principal retirement plans, significant, higher-cost restructuring programs, separation costs, profit (loss) of our run-off insurance operations, U.S. tax equity profit (loss), transition services agreements, environmental health and safety (EHS) impacts and other costs, as well as certain amounts that are not included in operating segment results because they are excluded from measurement of their operating performance for internal and external purposes.
2026 2Q FORM 10-Q 7
| REVENUE AND OPERATING PROFIT (COST) | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Insurance revenue (Note 12) | $ | 715 | $ | 872 | $ | 1,493 | $ | 1,806 | ||||||||||||
| Eliminations and other | (540) | (473) | (1,059) | (834) | ||||||||||||||||
| Corporate & Other revenue | $ | 175 | $ | 399 | $ | 434 | $ | 972 | ||||||||||||
| Gains (losses) on purchases and sales of business interests | — | — | 24 | — | ||||||||||||||||
| Gains (losses) on retained and sold ownership interests and other equity securities | 65 | 3 | (244) | 9 | ||||||||||||||||
| Restructuring and other charges (Note 19) | (27) | (26) | (50) | (27) | ||||||||||||||||
| Separation costs (Note 19) | (34) | (47) | (89) | (98) | ||||||||||||||||
| Insurance profit (loss) (Note 12) | 171 | 147 | 301 | 353 | ||||||||||||||||
| U.S. tax equity profit (loss) | (70) | (57) | (129) | (104) | ||||||||||||||||
| Adjusted Corporate & Other operating costs (Non-GAAP) | (386) | (274) | (592) | (363) | ||||||||||||||||
| Corporate & Other operating profit (cost) (GAAP) | $ | (280) | $ | (254) | $ | (780) | $ | (230) | ||||||||||||
| Less: gains (losses), impairments, Insurance, and restructuring & other | 106 | 20 | (188) | 133 | ||||||||||||||||
| Adjusted Corporate & Other operating costs (Non-GAAP) | $ | (386) | $ | (274) | $ | (592) | $ | (363) | ||||||||||||
| Corporate & Other profit (costs) | (208) | (131) | (244) | (106) | ||||||||||||||||
| Eliminations | (178) | (143) | (348) | (257) | ||||||||||||||||
| Adjusted Corporate & Other operating costs (Non-GAAP) | $ | (386) | $ | (274) | $ | (592) | $ | (363) | ||||||||||||
Adjusted Corporate & Other operating costs* excludes gains (losses) on purchases and sale of business interests, gains (losses) on retained and sold ownership interests and other equity securities, higher-cost restructuring programs, separation costs, our run-off insurance operations, and U.S. tax equity profit (loss). We believe that adjusting Corporate & Other costs to exclude the effects of items that are not closely associated with ongoing operations provides management and investors with a meaningful measure that increases the period-to-period comparability of our ongoing corporate costs.
For the three months ended, June 30, 2026, revenue decreased by $0.2 billion compared to the three months ended June 30, 2025, primarily due to lower run-off insurance operations revenue and higher intercompany eliminations. Corporate & Other operating cost was relatively flat primarily due to $0.1 billion of higher gains on retained and sold ownership interests and other equity securities offset by $0.1 billion of higher Adjusted Corporate & Other operating costs*.
Adjusted Corporate & Other operating costs* increased by $0.1 billion due to higher EHS costs, lower bank interest and higher intercompany profit eliminations.
For the six months ended, June 30, 2026, revenue decreased by $0.5 billion compared to the six months ended June 30, 2025, primarily due to lower run-off insurance operations revenue and higher intercompany eliminations. Corporate & Other operating cost increased by $0.6 billion, primarily due to $0.2 billion of higher losses on retained and sold ownership interests and other equity securities, $0.2 billion of higher Adjusted Corporate & Other operating costs* and $0.1 billion of lower run-off insurance operations profit.
Adjusted Corporate & Other operating costs* increased by $0.2 billion due to higher EHS costs, lower bank interest and higher intercompany profit eliminations.
OTHER CONSOLIDATED INFORMATION
RESTRUCTURING AND SEPARATION COSTS. 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. In addition, we incur costs associated with separation activities, which are also excluded from measurement of segment operating performance for internal and external purposes. We have substantially completed separation activities and expect an insignificant amount of costs in the second half of 2026. See Note 19 for further information on restructuring and separation costs.
INTEREST AND OTHER FINANCIAL CHARGES were $0.2 billion for both the three months ended June 30, 2026 and 2025, and $0.4 billion for both the six months ended June 30, 2026 and 2025. The primary components of interest and other financial charges are interest on short-term and long-term borrowings and interest on tax deficiencies.
POSTRETIREMENT BENEFIT PLANS. Refer to Note 13 for information about our pension and retiree benefit plans.
INCOME TAXES. For the three months ended June 30, 2026, the effective income tax rate was 14.5% compared to 16.2% for the three months ended June 30, 2025. The decrease in the effective tax rate was primarily driven by increased tax benefits on global activities, including the impact of the One Big Beautiful Bill Act (OBBBA), which were partially offset by a decrease in favorable audit resolutions.
*Non-GAAP Financial Measure
8 2026 2Q FORM 10-Q
For the three months ended June 30, 2026, the adjusted effective income tax rate* was 16.7% compared to 18.7% for the three months ended June 30, 2025. The decrease in the adjusted effective tax rate* was primarily driven by increased tax benefits on global activities, including the impact of the OBBBA, which were partially offset by a decrease in favorable audit resolutions.
For the six months ended June 30, 2026, the effective income tax rate was 13.2% compared to 14.5% for the six months ended June 30, 2025. The decrease in the effective tax rate was primarily driven by increased tax benefits on global activities, including the impact of the OBBBA, which were partially offset by a decrease in favorable audit resolutions and a nonrecurring benefit from foreign tax credits on the reinsurance transaction that occurred in 2025.
For the six months ended June 30, 2026, the adjusted effective income tax rate* was 15.7% compared to 18.2% for the six months ended June 30, 2025. The decrease in the adjusted effective tax rate* was primarily driven by increased tax benefits on global activities, including the impact of the OBBBA, which were partially offset by a decrease in favorable audit resolutions.
Refer to Note 15 for discussion of the 2016-2020 Internal Revenue Service (IRS) audit status.
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. See Note 2 for further information regarding our businesses in discontinued operations.
CAPITAL RESOURCES AND LIQUIDITY
FINANCIAL POLICY. GE Aerospace is committed to maintaining strong investment grade ratings with a disciplined capital allocation strategy. The Company will continue its commitment to investing and developing technologies that improve safety, durability, reliability and efficiency for our current engine products over their lifecycle and for the future of flight, and expanding our manufacturing and MRO capacity through research and development and capital expenditures. We intend to return a portion of our free cash flow* to shareholders through dividends and share repurchases. Merger and acquisition investments will be pursued in a disciplined way and focused on those that offer strategic, operational and financial synergies.
LIQUIDITY POLICY. We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our business needs and financial obligations under both normal and stressed conditions. We believe that our consolidated liquidity and availability under our revolving credit facilities will be sufficient to meet our liquidity needs.
CONSOLIDATED LIQUIDITY. Our primary sources of liquidity consist of cash, cash equivalents, time deposits with maturities greater than three months, free cash flow* from our operating businesses, and access to capital markets. If needed, we can also draw from short-term borrowing facilities, including revolving credit facilities. Cash generation can be subject to variability based on many factors, including receipt of down payments on large equipment orders, timing of billings on long-term contracts, timing of customer allowances and market conditions. At June 30, 2026, our sources of liquidity of $10.3 billion included cash, cash equivalents and restricted cash of $9.3 billion and time deposits with maturities greater than three months classified as All other current assets of $1.0 billion. Of these amounts, $7.3 billion was held in the U.S. and $3.0 billion was held outside the U.S.
Cash held outside the U.S. has generally been reinvested in active foreign business operations; however, substantially all of our unrepatriated income has been subject to U.S. federal tax and, if there is a change in reinvestment, we would expect to be able to repatriate available cash (excluding amounts held in countries with currency controls) without significant tax cost.
Cash, cash equivalents and restricted cash at June 30, 2026 included $0.4 billion of cash held in countries with currency control restrictions, which may restrict the transfer of funds to the U.S. or limit our ability to transfer funds to the U.S. without incurring substantial costs. Excluded from cash, cash equivalents and restricted cash is $1.2 billion of cash in our run-off insurance operations, which is classified as All other assets in the Statement of Financial Position, and $0.9 billion of cash in our discontinued operations held by Bank BPH (see Note 2).
In the second quarter, we repurchased 6.9 million shares for $2.0 billion, including repurchases of 3.5 million shares for $1.0 billion using accelerated stock repurchases as a mechanism to achieve planned repurchase volumes within a quarter during closed windows.
BORROWINGS. Consolidated total borrowings were $19.2 billion and $20.5 billion at June 30, 2026 and December 31, 2025, respectively. The decrease of $1.3 billion is due to maturities and changes in foreign currency exchange rates. The Company also holds a five-year unsecured revolving credit facility, maturing in 2029, in an aggregate committed amount of $3.0 billion, with zero outstanding at June 30, 2026.
CREDIT RATINGS AND CONDITIONS. We have relied, and may continue to rely, on the short- and long-term debt capital markets to fund, among other things, a significant portion of our operations. The cost and availability of debt financing is influenced by our credit ratings. Moody’s Investors Service (Moody’s) and Standard and Poor’s Global Ratings (S&P) currently issue ratings on our short- and long-term debt. On February 2, 2026, Moody's upgraded our long-term rating from A3 to A2, our short-term rating from P-2 to P-1 and maintained our positive outlook. On April 16, 2026, S&P revised our outlook from stable to positive, and affirmed our short-term rating of A-2 and our long-term rating of A-. Our credit ratings as of the date of this filing are set forth in the table below.
*Non-GAAP Financial Measure
2026 2Q FORM 10-Q 9
| Moody's | S&P | |||||||
| Outlook | Positive | Positive | ||||||
| Short term | P-1 | A-2 | ||||||
| Long term | A2 | A- | ||||||
Our ratings may be subject to a revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.
Our unused back-up revolving syndicated credit facility contains a customary net debt-to-EBITDA financial covenant, which we satisfied at June 30, 2026.
FOREIGN EXCHANGE RISK. As a result of our global operations, we generate and incur a small portion of our revenue and expenses in currencies other than the U.S. dollar. Such principal currencies include the euro, the British sterling pound and Brazilian real. The effect of foreign currency fluctuations on income was insignificant. See Note 20 for further information about our risk exposures, our use of derivatives, and the effects of this activity on our financial statements.
STATEMENT OF CASH FLOWS
CASH FLOWS FROM CONTINUING OPERATIONS. The most significant source of cash flows from operating activities (CFOA) is customer-related activities, the largest of which is collecting cash resulting from product or services sales. The most significant operating use of cash is to pay our suppliers, employees, tax authorities and postretirement plans.
Cash from operating activities was $5.1 billion for the six months ended June 30, 2026, an increase of $1.2 billion compared to 2025, primarily due to: an increase in net income (after adjusting for depreciation of property, plant, and equipment, and amortization of intangible assets) driven by all segments, an increase in sales discounts and allowances, and lower working capital growth, partially offset by an increase in cash used in All other operating activities.
Cash from sales discounts and allowances was $1.0 billion for the six months ended June 30, 2026, an increase of $0.5 billion compared to 2025, primarily due to increases in allowances on new engine installs and spare parts at CES.
The cash impacts from changes in working capital was $(0.3) billion for the six months ended June 30, 2026, a decrease in cash used of $0.2 billion compared to 2025, due to: current receivables of $0.5 billion, driven by higher collections primarily in CES, including increased collections from CFM International, partially offset by higher volume; inventories, including deferred inventory, of $0.8 billion, driven by higher output and lower tariffs, partially offset by higher material input. These decreases were partially offset by current contract assets, contract liabilities and current deferred income of $(0.4) billion, driven by higher revenue recognition and a lower unfavorable change in estimated profitability on long-term service agreements, primarily driven by the absence of charges, including a $0.1 billion reversal of a majority of the tariff-related charge from the first quarter of 2025, partially offset by higher billing and accounts payable of $(0.6) billion, driven by higher disbursements partially offset by higher volume. Progress collections were flat.
The components of All other operating activities included:
| Six months ended June 30 | 2026 | 2025 | |||||||||
| Increase (decrease) in employee benefit liabilities | $ | (487) | $ | (293) | |||||||
| Net restructuring and other charges/(cash expenditures) | (11) | (28) | |||||||||
| Other deferred assets | (145) | 11 | |||||||||
| Other | (15) | (107) | |||||||||
| All other operating activities | $ | (658) | $ | (417) | |||||||
Cash used for investing activities was $(1.9) billion for the six months ended June 30, 2026, an increase of $0.9 billion compared to 2025, primarily due to: purchases of time deposits with maturities greater than three months of $1.0 billion (a component of all other investing activities), higher net purchases of insurance investment securities of $0.4 billion, partially offset by lower cash paid for business acquisitions of $0.4 billion. Cash used for additions to property, plant and equipment and internal-use software net of dispositions (components of free cash flow*) was $0.6 billion and $0.5 billion for the six months ended June 30, 2026 and 2025, respectively.
Cash used for financing activities was $(6.4) billion for the six months ended June 30, 2026, an increase of $0.9 billion compared to 2025, primarily due to: an increase in treasury stock repurchases of $0.8 billion and higher dividends paid to shareholders of $0.2 billion, partially offset by lower debt maturities of $0.2 billion.
CRITICAL ACCOUNTING ESTIMATES. Please refer to the Critical Accounting Estimates and Other Items sections within MD&A and Note 1 to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of our accounting policies and critical accounting estimates.
*Non-GAAP Financial Measure
10 2026 2Q FORM 10-Q
OTHER ITEMS
NEW ACCOUNTING STANDARDS. In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The amendments increase disclosure requirements primarily through enhanced disclosures about types of expenses (including purchases of inventory, employee compensation, depreciation, and amortization) in commonly presented expense captions. The ASU is effective for fiscal years beginning after December 15, 2026, and is required to be applied prospectively with the option for retrospective application. We are currently evaluating the impact that this guidance will have on the disclosures within our consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The amendment establishes a framework for the recognition, measurement, and presentation of government grants received by business entities. The ASU is effective for fiscal years beginning after December 15, 2028 with adoption permitted on a modified prospective, modified retrospective, or retrospective basis. We are currently evaluating the impact that this guidance will have on our consolidated financial statements.
NON-GAAP FINANCIAL MEASURES. We believe that presenting non-GAAP financial measures provides management and investors useful measures to evaluate performance and trends of the total company and its businesses. This includes adjustments in recent periods to GAAP financial measures to increase period-to-period comparability following actions to strengthen our overall financial position and how we manage our business. In addition, management recognizes that certain non-GAAP terms may be interpreted differently by other companies under different circumstances. In various sections of this report we have made reference to the following non-GAAP financial measures in describing our (1) revenue, specifically, Adjusted revenue, (2) profit, specifically, Operating profit and Operating profit margin; Adjusted net income (loss); Adjusted earnings (loss) per share (EPS) and Adjusted effective income tax rate, and (3) cash flows, specifically free cash flow (FCF). The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures follow.
| ADJUSTED REVENUE, OPERATING PROFIT AND PROFIT MARGIN (NON-GAAP) | Three months ended June 30 | Six months ended June 30 | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Total revenue (GAAP) | $ | 13,349 | $ | 11,023 | $ | 25,741 | $ | 20,957 | |||||||||||||||
| Less: Insurance revenue (Note 12) | 715 | 872 | 1,493 | 1,806 | |||||||||||||||||||
| Adjusted revenue (Non-GAAP) | $ | 12,634 | $ | 10,151 | $ | 24,248 | $ | 19,151 | |||||||||||||||
| Total costs and expenses (GAAP) | $ | 10,860 | $ | 8,932 | $ | 21,039 | $ | 16,924 | |||||||||||||||
| Less: Insurance cost and expenses (Note 12) | 544 | 725 | 1,192 | 1,453 | |||||||||||||||||||
| Less: U.S. tax equity cost and expenses | 4 | 5 | 8 | 10 | |||||||||||||||||||
| Less: interest and other financial charges(a) | 215 | 158 | 444 | 368 | |||||||||||||||||||
| Less: non-operating benefit cost (income) | (177) | (197) | (354) | (398) | |||||||||||||||||||
| Less: restructuring & other(a) | 27 | 26 | 50 | 27 | |||||||||||||||||||
| Less: separation costs(a) | 34 | 47 | 89 | 98 | |||||||||||||||||||
| Add: noncontrolling interests | (13) | (7) | 3 | (13) | |||||||||||||||||||
| Adjusted costs (Non-GAAP) | $ | 10,201 | $ | 8,161 | $ | 19,611 | $ | 15,353 | |||||||||||||||
| Other income (loss) (GAAP) | $ | 313 | $ | 298 | $ | 297 | $ | 600 | |||||||||||||||
| Less: U.S. tax equity | (66) | (53) | (121) | (94) | |||||||||||||||||||
| Less: gains (losses) on retained and sold ownership interests and other equity securities(a) | 65 | 3 | (244) | 9 | |||||||||||||||||||
| Less: gains (losses) on purchases and sales of business interests(a) | — | — | 24 | — | |||||||||||||||||||
| Adjusted other income (loss) (Non-GAAP) | $ | 314 | $ | 347 | $ | 638 | $ | 685 | |||||||||||||||
| Profit (loss) (GAAP) | $ | 2,801 | $ | 2,389 | $ | 4,999 | $ | 4,634 | |||||||||||||||
| Profit (loss) margin (GAAP) | 21.0% | 21.7% | 19.4% | 22.1% | |||||||||||||||||||
| Operating profit (loss) (Non-GAAP) | $ | 2,746 | $ | 2,337 | $ | 5,274 | $ | 4,483 | |||||||||||||||
| Operating profit (loss) margin (Non-GAAP) | 21.7% | 23.0% | 21.8% | 23.4% | |||||||||||||||||||
| (a) See the Corporate & Other and Other Consolidated Information sections for further information. | |||||||||||||||||||||||
| We believe that adjusting revenue provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of revenue from our run-off insurance operations. We believe that adjusting profit to exclude the effects of items that are not closely associated with ongoing operations provides management and investors with a meaningful measure that increases the period-to-period comparability. Gains (losses) and restructuring and other items are impacted by the timing and magnitude of gains associated with dispositions, and the timing and magnitude of costs associated with restructuring and other activities. We also use Adjusted revenue* growth and Operating profit* as performance metrics at the company level for our annual executive incentive plan for 2026. | |||||||||||||||||||||||
*Non-GAAP Financial Measure
2026 2Q FORM 10-Q 11
| ADJUSTED NET INCOME (LOSS) AND ADJUSTED EFFECTIVE INCOME TAX RATE (NON-GAAP) | Three months ended June 30 | Six months ended June 30 | |||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||
| (Diluted, per-share amounts in dollars) | Income | EPS | Income | EPS | Income | EPS | Income | EPS | |||||||||||||||||||||||||||||||||
| Net income (loss) from continuing operations (GAAP) (Note 17) | $ | 2,405 | $ | 2.30 | $ | 2,007 | $ | 1.87 | $ | 4,335 | $ | 4.13 | $ | 3,975 | $ | 3.70 | |||||||||||||||||||||||||
| Insurance net income (loss) (pre-tax) | 173 | 0.16 | 149 | 0.14 | 305 | 0.29 | 356 | 0.33 | |||||||||||||||||||||||||||||||||
| Tax effect on Insurance net income (loss)(a) | (36) | (0.03) | (32) | (0.03) | (65) | (0.06) | (8) | (0.01) | |||||||||||||||||||||||||||||||||
| Less: Insurance net income (loss) (net of tax) (Note 12) | 136 | 0.13 | 118 | 0.11 | 240 | 0.23 | 348 | 0.32 | |||||||||||||||||||||||||||||||||
| U.S. tax equity net income (loss) (pre-tax) | (77) | (0.07) | (66) | (0.06) | (144) | (0.14) | (120) | (0.11) | |||||||||||||||||||||||||||||||||
| Tax effect on U.S. tax equity net income (loss) | 86 | 0.08 | 77 | 0.07 | 162 | 0.15 | 141 | 0.13 | |||||||||||||||||||||||||||||||||
| Less: U.S. tax equity net income (loss) (net of tax) | 9 | 0.01 | 12 | 0.01 | 18 | 0.02 | 20 | 0.02 | |||||||||||||||||||||||||||||||||
| Non-operating benefit (cost) income (pre-tax) (GAAP) | 177 | 0.17 | 197 | 0.18 | 354 | 0.34 | 398 | 0.37 | |||||||||||||||||||||||||||||||||
| Tax effect on non-operating benefit (cost) income | (37) | (0.04) | (41) | (0.04) | (74) | (0.07) | (84) | (0.08) | |||||||||||||||||||||||||||||||||
| Less: Non-operating benefit (cost) income (net of tax) | 140 | 0.13 | 156 | 0.15 | 279 | 0.27 | 315 | 0.29 | |||||||||||||||||||||||||||||||||
| Gains (losses) on purchases and sales of business interests (pre-tax)(b) | — | — | — | — | 24 | 0.02 | — | — | |||||||||||||||||||||||||||||||||
| Tax effect on gains (losses) on purchases and sales of business interests | — | — | — | — | — | — | 3 | — | |||||||||||||||||||||||||||||||||
| Less: Gains (losses) on purchases and sales of business interests (net of tax) | — | — | — | — | 24 | 0.02 | 3 | — | |||||||||||||||||||||||||||||||||
| Gains (losses) on retained and sold ownership interests and other equity securities (pre-tax)(b) | 65 | 0.06 | 3 | — | (244) | (0.23) | 9 | 0.01 | |||||||||||||||||||||||||||||||||
| Tax effect on gains (losses) on retained and sold ownership interests and other equity securities(a)(c) | (11) | (0.01) | — | — | 51 | 0.05 | 1 | — | |||||||||||||||||||||||||||||||||
| Less: Gains (losses) on retained and sold ownership interests and other equity securities (net of tax) | 55 | 0.05 | 3 | — | (193) | (0.18) | 11 | 0.01 | |||||||||||||||||||||||||||||||||
| Restructuring & other (pre-tax)(b) | (27) | (0.03) | (26) | (0.02) | (50) | (0.05) | (27) | (0.03) | |||||||||||||||||||||||||||||||||
| Tax effect on restructuring & other | 6 | 0.01 | 5 | 0.01 | 11 | 0.01 | 6 | 0.01 | |||||||||||||||||||||||||||||||||
| Less: Restructuring & other (net of tax) | (21) | (0.02) | (21) | (0.02) | (40) | (0.04) | (21) | (0.02) | |||||||||||||||||||||||||||||||||
| Separation costs (pre-tax)(b) | (35) | (0.03) | (47) | (0.04) | (91) | (0.09) | (98) | (0.09) | |||||||||||||||||||||||||||||||||
| Tax effect on separation costs | 8 | 0.01 | 10 | 0.01 | 19 | 0.02 | 20 | 0.02 | |||||||||||||||||||||||||||||||||
| Less: Separation costs (net of tax) | (28) | (0.03) | (37) | (0.03) | (71) | (0.07) | (78) | (0.07) | |||||||||||||||||||||||||||||||||
| Adjusted net income (loss) (Non-GAAP) | $ | 2,114 | $ | 2.02 | $ | 1,777 | $ | 1.66 | $ | 4,077 | $ | 3.88 | $ | 3,378 | $ | 3.14 | |||||||||||||||||||||||||
| Income from continuing operations before taxes (GAAP) | $ | 2,801 | $ | 2,389 | $ | 4,999 | $ | 4,634 | |||||||||||||||||||||||||||||||||
| Less: Total adjustments above (pre-tax) | 276 | 211 | 154 | 519 | |||||||||||||||||||||||||||||||||||||
| Adjusted income before taxes (Non-GAAP) | $ | 2,525 | $ | 2,177 | $ | 4,845 | $ | 4,115 | |||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes (GAAP) | $ | 407 | $ | 388 | $ | 658 | $ | 671 | |||||||||||||||||||||||||||||||||
| Less: Tax effect on adjustments above | (15) | (20) | (104) | (78) | |||||||||||||||||||||||||||||||||||||
| Adjusted provision (benefit) for income taxes (Non-GAAP) | $ | 422 | $ | 408 | $ | 762 | $ | 749 | |||||||||||||||||||||||||||||||||
| Effective income tax rate (GAAP) | 14.5% | 16.2% | 13.2% | 14.5% | |||||||||||||||||||||||||||||||||||||
| Adjusted effective income tax rate (Non-GAAP) | 16.7% | 18.7% | 15.7% | 18.2% | |||||||||||||||||||||||||||||||||||||
| (a) Includes related tax valuation allowances. Tax effect on Insurance net income includes valuation allowances for 2025. | |||||||||||||||||||||||||||||||||||||||||
| (b) See the Corporate & Other and Other Consolidated Information sections for further information. | |||||||||||||||||||||||||||||||||||||||||
| (c) Includes tax benefits available to offset the tax on gains (losses) on equity securities. | |||||||||||||||||||||||||||||||||||||||||
| Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total. | |||||||||||||||||||||||||||||||||||||||||
| We believe that Adjusted net income* and the Adjusted effective income tax rate* provide management and investors with useful measures to evaluate the performance of the total company and increased period-to-period comparability, as well as a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding items that are not closely related with ongoing operations. We also use Adjusted EPS* as a performance metric at the company level for our performance stock units granted in 2026. | |||||||||||||||||||||||||||||||||||||||||
*Non-GAAP Financial Measure
12 2026 2Q FORM 10-Q
| FREE CASH FLOW (FCF) (NON-GAAP) | Six months ended June 30 | ||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities (CFOA) (GAAP) | $ | 5,126 | $ | 3,891 | |||||||
| Add: gross additions to property, plant and equipment and internal-use software | (666) | (535) | |||||||||
| Add: dispositions of property, plant and equipment | 58 | 25 | |||||||||
| Less: separation cash expenditures | (116) | (146) | |||||||||
| Less: Corporate & Other restructuring cash expenditures | (51) | (45) | |||||||||
| Free cash flow (FCF) (Non-GAAP) | $ | 4,685 | $ | 3,572 | |||||||
| We believe investors may find it useful to compare free cash flow* performance without the effects of separation cash expenditures and Corporate & Other restructuring cash expenditures (associated with the separation-related program announced in the fourth quarter of 2022). In addition, we include dispositions of property, plant and equipment, including sale leaseback activity. We believe this measure will better allow management and investors to evaluate the capacity of our operations to generate free cash flow*. We also use FCF* as a performance metric at the company level for our annual executive incentive plan and performance stock units granted in 2026. | |||||||||||
CONTROLS AND PROCEDURES. Under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that (i) our disclosure controls and procedures were effective as of June 30, 2026, and (ii) no change in internal control over financial reporting occurred during the quarter ended June 30, 2026, that has materially affected, or is reasonably likely to materially affect, such internal control over financial reporting.
OTHER FINANCIAL DATA
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS. In December 2025, the Board of Directors authorized up to $20 billion of common share repurchases through open market purchases or privately negotiated transactions, via various strategies, including accelerated share repurchases. We repurchased 6,888 thousand shares for $2,012 million during the three months ended June 30, 2026 under this authorization.
| Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of our share repurchase authorizations | Approximate dollar value of shares that may yet be purchased under our $20 billion share repurchase authorization | ||||||||||
| (Shares in thousands) | ||||||||||||||
| 2026 | ||||||||||||||
| April | 5,167 | $ | 291.30 | 5,167 | ||||||||||
| May | 1,721 | 294.79 | 1,721 | |||||||||||
| June | — | — | — | |||||||||||
| Total | 6,888 | $ | 292.17 | 6,888 | $ | 17,988 | ||||||||
*Non-GAAP Financial Measure
2026 2Q FORM 10-Q 13
| STATEMENT OF OPERATIONS (UNAUDITED) | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
| (In millions; per-share amounts in dollars) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||
| Sales of equipment | $ | $ | $ | $ | ||||||||||||||||
| Sales of services | ||||||||||||||||||||
| Insurance revenue (Note 12) | ||||||||||||||||||||
| Total revenue | ||||||||||||||||||||
| Cost of equipment sold | ||||||||||||||||||||
| Cost of services sold | ||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||
| Separation costs | ||||||||||||||||||||
| Research and development | ||||||||||||||||||||
| Interest and other financial charges | ||||||||||||||||||||
| Insurance losses, annuity benefits and other costs (Note 12) | ||||||||||||||||||||
| Non-operating benefit cost (income) | ( | ( | ( | ( | ||||||||||||||||
| Total costs and expenses | ||||||||||||||||||||
| Other income (loss) (Note 18) | ||||||||||||||||||||
| Income (loss) from continuing operations before income taxes | ||||||||||||||||||||
| Benefit (provision) for income taxes (Note 15) | ( | ( | ( | ( | ||||||||||||||||
| Net income (loss) from continuing operations | ||||||||||||||||||||
| Income (loss) from discontinued operations, net of taxes (Note 2) | ( | ( | ||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||
| Less net income (loss) attributable to noncontrolling interests | ( | ( | ( | |||||||||||||||||
| Net income (loss) attributable to the Company | ||||||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | $ | $ | $ | ||||||||||||||||
| Earnings (loss) per share from continuing operations (Note 17) | ||||||||||||||||||||
| Diluted earnings (loss) per share | $ | $ | $ | $ | ||||||||||||||||
| Basic earnings (loss) per share | $ | $ | $ | $ | ||||||||||||||||
| Net earnings (loss) per share (Note 17) | ||||||||||||||||||||
| Diluted earnings (loss) per share | $ | $ | $ | $ | ||||||||||||||||
| Basic earnings (loss) per share | $ | $ | $ | $ | ||||||||||||||||
14 2026 2Q FORM 10-Q
| STATEMENT OF FINANCIAL POSITION (UNAUDITED) | ||||||||
| (In millions, except share amounts) | June 30, 2026 | December 31, 2025 | ||||||
| Cash, cash equivalents and restricted cash | $ | $ | ||||||
| Current receivables (Note 4) | ||||||||
| Inventories, including deferred inventory costs (Note 5) | ||||||||
| Current contract assets (Note 8) | ||||||||
| All other current assets (Note 9) | ||||||||
| Current assets | ||||||||
| Investment securities (Note 3) | ||||||||
| Property, plant and equipment – net (Note 6) | ||||||||
| Goodwill (Note 7) | ||||||||
| Other intangible assets – net (Note 7) | ||||||||
| Contract and other deferred assets (Note 8) | ||||||||
| All other assets (Note 9) | ||||||||
| Deferred income taxes (Note 15) | ||||||||
Assets of discontinued operations (Note 2) | ||||||||
Total assets | $ | $ | ||||||
| Short-term borrowings (Note 10) | $ | $ | ||||||
| Accounts payable (Note 11) | ||||||||
| Progress collections (Note 8) | ||||||||
| Contract liabilities and deferred income (Note 8) | ||||||||
| Sales discounts and allowances (Note 14) | ||||||||
| All other current liabilities (Note 14) | ||||||||
| Current liabilities | ||||||||
| Deferred income (Note 8) | ||||||||
| Long-term borrowings (Note 10) | ||||||||
| Insurance liabilities and annuity benefits (Note 12) | ||||||||
| Non-current compensation and benefits | ||||||||
| All other liabilities (Note 14) | ||||||||
Liabilities of discontinued operations (Note 2) | ||||||||
Total liabilities | ||||||||
Common stock ( at June 30, 2026 and December 31, 2025, respectively) (Note 16) | ||||||||
| Accumulated other comprehensive income (loss) – net attributable to the Company (Note 16) | ( | ( | ||||||
Other capital | ||||||||
Retained earnings | ||||||||
Less common stock held in treasury | ( | ( | ||||||
| Total shareholders’ equity | ||||||||
| Noncontrolling interests | ||||||||
| Total equity | ||||||||
Total liabilities and equity | $ | $ | ||||||
2026 2Q FORM 10-Q 15
| STATEMENT OF CASH FLOWS (UNAUDITED) | Six months ended June 30 | ||||||||||
| (In millions) | 2026 | 2025 | |||||||||
| Net income (loss) | $ | $ | |||||||||
| Net (income) loss from discontinued operations activities | ( | ||||||||||
| Adjustments to reconcile net income (loss) to cash from (used for) operating activities: | |||||||||||
| Depreciation and amortization of property, plant and equipment (Note 6) | |||||||||||
| Amortization of intangible assets (Note 7) | |||||||||||
| (Gains) losses on equity securities (Note 18) | ( | ||||||||||
| Principal pension plans (benefit) cost (Note 13) | ( | ( | |||||||||
| Principal pension plans employer contributions | ( | ( | |||||||||
| Other postretirement benefit plans (net) | ( | ( | |||||||||
| Provision (benefit) for income taxes | |||||||||||
| Cash recovered (paid) during the year for income taxes | ( | ( | |||||||||
| Changes in operating working capital: | |||||||||||
| Decrease (increase) in current receivables | ( | ( | |||||||||
| Decrease (increase) in inventories, including deferred inventory costs | ( | ( | |||||||||
| Decrease (increase) in current contract assets | ( | ||||||||||
| Increase (decrease) in contract liabilities and current deferred income | ( | ||||||||||
| Increase (decrease) in progress collections | |||||||||||
Increase (decrease) in accounts payable | |||||||||||
| Increase (decrease) in sales discounts and allowances (Note 14) | |||||||||||
| All other operating activities | ( | ( | |||||||||
| Cash from (used for) operating activities – continuing operations | |||||||||||
| Cash from (used for) operating activities – discontinued operations | ( | ( | |||||||||
| Cash from (used for) operating activities | |||||||||||
Additions to property, plant and equipment and internal-use software | ( | ( | |||||||||
| Dispositions of property, plant and equipment | |||||||||||
| Net cash from (payments for) principal businesses purchased | ( | ( | |||||||||
| Net (purchases) dispositions of insurance investment securities | ( | ||||||||||
| All other investing activities | ( | ( | |||||||||
| Cash from (used for) investing activities – continuing operations | ( | ( | |||||||||
| Cash from (used for) investing activities – discontinued operations | ( | ||||||||||
| Cash from (used for) investing activities | ( | ( | |||||||||
| Net increase (decrease) in borrowings (maturities of 90 days or less) | ( | ||||||||||
| Repayments and other debt reductions (maturities longer than 90 days) | ( | ( | |||||||||
| Dividends paid to shareholders | ( | ( | |||||||||
| Purchases of common stock for treasury | ( | ( | |||||||||
| All other financing activities | |||||||||||
| Cash from (used for) financing activities – continuing operations | ( | ( | |||||||||
| Cash from (used for) financing activities – discontinued operations | |||||||||||
| Cash from (used for) financing activities | ( | ( | |||||||||
| Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | ( | ||||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Cash, cash equivalents and restricted cash at beginning of year | |||||||||||
Cash, cash equivalents and restricted cash at June 30 | |||||||||||
Less cash, cash equivalents and restricted cash of discontinued operations at June 30 | ( | ( | |||||||||
Cash, cash equivalents and restricted cash of continuing operations at June 30 | $ | $ | |||||||||
16 2026 2Q FORM 10-Q
| STATEMENT OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
(In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ||||||||||||||||
| Less: net income (loss) attributable to noncontrolling interests | ( | ( | ( | |||||||||||||||||
| Net income (loss) attributable to the Company | $ | $ | $ | $ | ||||||||||||||||
Currency translation adjustments | ( | ( | ( | |||||||||||||||||
Benefit plans | ( | ( | ( | ( | ||||||||||||||||
Investment securities and cash flow hedges | ( | |||||||||||||||||||
| Long-duration insurance contracts | ( | ( | ( | |||||||||||||||||
| Other comprehensive income (loss) attributable to the Company | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
| Comprehensive income (loss) | $ | $ | $ | $ | ||||||||||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests | ( | ( | ( | |||||||||||||||||
| Comprehensive income (loss) attributable to the Company | $ | $ | $ | $ | ||||||||||||||||
| STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
(In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||
| Common stock issued | $ | $ | $ | $ | ||||||||||||||||
| Beginning balance | ( | ( | ( | ( | ||||||||||||||||
| Currency translation adjustments | ( | ( | ( | |||||||||||||||||
| Benefit plans | ( | ( | ( | ( | ||||||||||||||||
Investment securities and cash flow hedges | ( | |||||||||||||||||||
| Long-duration insurance contracts | ( | ( | ( | |||||||||||||||||
| Accumulated other comprehensive income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
| Beginning balance | ||||||||||||||||||||
| Gains (losses) on treasury stock dispositions | ( | ( | ( | ( | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| Other changes | ||||||||||||||||||||
| Other capital | $ | $ | $ | $ | ||||||||||||||||
| Beginning balance | ||||||||||||||||||||
| Net income (loss) attributable to the Company | ||||||||||||||||||||
| Dividends and other transactions with shareholders | ( | ( | ( | ( | ||||||||||||||||
| Retained earnings | $ | $ | $ | $ | ||||||||||||||||
| Beginning balance | ( | ( | ( | ( | ||||||||||||||||
| Purchases | ( | ( | ( | ( | ||||||||||||||||
| Dispositions | ||||||||||||||||||||
| Common stock held in treasury | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
| GE Aerospace shareholders' equity balance | ||||||||||||||||||||
| Noncontrolling interests balance | ||||||||||||||||||||
Total equity balance at June 30 | $ | $ | $ | $ | ||||||||||||||||
2026 2Q FORM 10-Q 17
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.
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.
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 six months ended June 30, 2026, we had direct and indirect sales of $275 million to GE Vernova, primarily related to engine sales and parts. We collected net cash of $314 million related to the sales of engines and parts and the transition services agreement for the six months ended June 30, 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 $1,814 million and $2,334 million as of June 30, 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 six months ended June 30, 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 June 30, 2026, the total portfolio had no carrying value, net of a valuation allowance. Income (loss) related to ongoing borrower litigation was zero
18 2026 2Q FORM 10-Q
| RESULTS OF DISCONTINUED OPERATIONS | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of equipment and services sold | ||||||||||||||||||||||||||
| Other income, costs and expenses | ( | ( | ||||||||||||||||||||||||
| Net income (loss) of discontinued operations before income taxes | ( | ( | ||||||||||||||||||||||||
| Benefit (provision) for income taxes | ( | ( | ||||||||||||||||||||||||
| Net income (loss) of discontinued operations, net of taxes | ( | ( | ||||||||||||||||||||||||
| Gain (loss) on disposal before income taxes | ||||||||||||||||||||||||||
| Benefit (provision) for income taxes | ||||||||||||||||||||||||||
| Gain (loss) on disposal, net of taxes | ||||||||||||||||||||||||||
| Net income (loss) from discontinued operations, net of taxes | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
| ASSETS AND LIABILITIES OF DISCONTINUED OPERATIONS | June 30, 2026 | December 31, 2025 | ||||||
Cash, cash equivalents and restricted cash(a) | $ | $ | ||||||
| Current receivables | ||||||||
| Property, plant and equipment - net | ||||||||
All other assets | ||||||||
| Deferred income taxes | ||||||||
| Assets of discontinued operations(b) | $ | $ | ||||||
| Accounts payable | $ | $ | ||||||
| Non-current compensation and benefits | ||||||||
| All other liabilities | ||||||||
Liabilities of discontinued operations(b) | $ | $ | ||||||
(a) Included $851 million and $1,123 million of cash, cash equivalents and restricted cash related to Bank BPH as of June 30, 2026 and December 31, 2025, respectively. The decrease was primarily driven by utilization and foreign exchange movements.
(b) Included $1,103 million and $1,389 million of valuation allowances against financing receivables held for sale, related to estimated borrower litigation losses, and $711 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 June 30, 2026 and December 31, 2025, respectively. Accordingly, total estimated losses related to borrower litigation were $1,814 million and $2,334 million as of June 30, 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 June 30, 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.
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||
| Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||||||||||||
| Debt | |||||||||||||||||||||||||||||
| U.S. corporate | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||
| Non-U.S. corporate | ( | ( | |||||||||||||||||||||||||||
| State and municipal | ( | ( | |||||||||||||||||||||||||||
| Mortgage and asset-backed | ( | ( | |||||||||||||||||||||||||||
| Government and agencies | ( | ( | |||||||||||||||||||||||||||
| Equity | — | — | — | — | |||||||||||||||||||||||||
| Non-current investment securities | $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||
The amortized cost of debt securities excludes accrued interest of $479 million and $473 million at June 30, 2026 and December 31, 2025, respectively
The estimated fair value of non-current investment securities at June 30, 2026 decreased since December 31, 2025, primarily due to higher market yields, the mark-to-market effect on our equity interests and net proceeds from debt/equity securities.
2026 2Q FORM 10-Q 19
Total estimated fair value of debt securities in an unrealized loss position were $20,078 million and $18,484 million, of which $13,600 million and $14,656 million had gross unrealized losses of $(2,604 ) million and $(2,525 ) million and have been in a loss position for 12 months or more at June 30, 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.
| Three months ended June 30 | Six months ended June 30 | |||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Net unrealized gains (losses) for equity securities with readily determinable fair value (RDFV) | $ | $ | $ | ( | $ | |||||||||||||||
| Proceeds from debt/equity securities sales and redemptions | ||||||||||||||||||||
| Gross realized gains on debt securities | ||||||||||||||||||||
| Gross realized losses and impairments on debt securities | ( | ( | ( | ( | ||||||||||||||||
Contractual maturities of our debt securities (excluding mortgage and asset-backed securities) at June 30, 2026 are as follows:
| Amortized cost | Estimated fair value | |||||||
| Within one year | $ | $ | ||||||
| After one year through five years | ||||||||
| After five years through ten years | ||||||||
| After ten years | ||||||||
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 $3,353 million and $3,222 million are classified within Level 3, as significant inputs to their valuation models are unobservable at June 30, 2026 and December 31, 2025, respectively. During the six months ended June 30, 2026, $138 million was transferred out of Level 3 and there were no significant transfers into Level 3. During the six months ended June 30, 2025, $1,144 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 were no significant transfers into Level 3.
In addition to the equity securities described above, we held $2,056 million and $1,911 million of equity securities without RDFV including $2,041 million and $1,881 million within our run-off insurance operations at June 30, 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 $31 million and $62 million and $71 million and $100 million for the three and six months ended June 30, 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
| CURRENT RECEIVABLES | June 30, 2026 | December 31, 2025 | ||||||
| Customer receivables | $ | $ | ||||||
| Revenue sharing and other partner receivables(a) | ||||||||
| Supplier advances | ||||||||
| Non-income based tax receivables | ||||||||
| Other sundry receivables | ||||||||
| Allowance for credit losses | ( | ( | ||||||
| Total current 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.
20 2026 2Q FORM 10-Q
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 $59 million and $101 million during the six months ended June 30, 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.
| LONG-TERM RECEIVABLES | June 30, 2026 | December 31, 2025 | |||||||||||||||
| Long-term customer receivables(a) | $ | $ | |||||||||||||||
| Supplier advances | |||||||||||||||||
| Sundry receivables | |||||||||||||||||
| Allowance for credit losses(a) | ( | ( | |||||||||||||||
| Total long-term receivables | $ | $ | |||||||||||||||
(a) The decrease was primarily driven by the write-off of allowance against uncollectible accounts.
NOTE 5. INVENTORIES, INCLUDING DEFERRED INVENTORY COSTS
| June 30, 2026 | December 31, 2025 | |||||||
Raw materials and work in process | $ | $ | ||||||
| Finished goods | ||||||||
| Deferred inventory costs(a) | ||||||||
| Inventories, including deferred inventory costs | $ | $ | ||||||
NOTE 6. PROPERTY, PLANT AND EQUIPMENT AND OPERATING LEASES
| June 30, 2026 | December 31, 2025 | |||||||
| Original cost | $ | $ | ||||||
| Less accumulated depreciation and amortization | ( | ( | ||||||
| Property, plant and equipment – net | $ | $ | ||||||
| DEPRECIATION AND AMORTIZATION EXPENSE | Three months ended June 30 | Six months ended June 30 | |||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Commercial Engines & Services | $ | $ | $ | $ | |||||||||||||||||||||||||
| Defense & Propulsion Technologies | |||||||||||||||||||||||||||||
| Corporate & Other | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||||||||
Operating Lease Liabilities. Our current operating lease liabilities, included in in our Statement of Financial Position, were $287 million and $280 million as of June 30, 2026 and December 31, 2025, respectively. Our non-current operating lease liabilities, included in in our Statement of Financial Position, were $786 million and $783 million as of June 30, 2026 and December 31, 2025, respectively. Expense on our operating lease portfolio, primarily from our long-term fixed leases, was $84 million and $99 million for the three months ended June 30, 2026 and 2025, respectively, and $162 million and $197 million for the six months ended June 30, 2026 and 2025, respectively.
In the second quarter of 2026, as part of overall fleet management for one of our smaller engine programs with a diverse customer base, we entered into an agreement for the sale and leaseback of certain Company owned engines. We recognized sales proceeds of $41 million and net income attributable to the Company of $15 million for the six months ended June 30, 2026. The Company is leasing back the engines for a term of 12 years under an operating lease agreement.
NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS
| Commercial Engines & Services | Defense & Propulsion Technologies | Total | |||||||||
| Balance at January 1, 2026 | $ | $ | $ | ||||||||
| Goodwill acquisition | |||||||||||
| Goodwill adjustments(a) | ( | ( | ( | ||||||||
Balance at June 30, 2026 | $ | $ | $ | ||||||||
(a) Goodwill adjustments are primarily related to foreign currency exchange.
2026 2Q FORM 10-Q 21
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 second quarter of 2026, we did not identify any reporting units that required an interim impairment test.
Other intangible assets decreased $140 million during the six months ended June 30, 2026, primarily as a result of amortization and foreign currency exchange, partially offset by additions. Consolidated amortization expense was $88 million and $93 million in the three months ended June 30, 2026 and 2025, respectively, and $173 million and $182 million in the six months ended June 30, 2026 and 2025, respectively.
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 $187 million for the six months ended June 30, 2026, primarily due to decreases in long-term service agreement liabilities of $202 million. In aggregate, the net liability for long-term service agreements decreased primarily due to revenue recognized of $5,468 million, partially offset by billings of $5,208 million and net unfavorable changes in estimated profitability of $42 million driven by quarterly updates to contract margins, including a reversal of $118 million of tariff-related charges taken in the six months ended June 30, 2025, primarily in CES. Revenue recognized for contracts included in a liability position at the beginning of the year were $4,775 million and $3,892 million for the six months ended June 30, 2026 and 2025, respectively.
| CONTRACT ASSETS, LIABILITIES AND OTHER DEFERRED ASSETS AND INCOME | June 30, 2026 | December 31, 2025 | |||||||||
| Long-term service agreements | $ | $ | |||||||||
| Equipment and other service agreements | |||||||||||
| Current contract assets | $ | $ | |||||||||
| Nonrecurring engineering costs(a) | $ | $ | |||||||||
| Customer advances and other(b) | |||||||||||
| Contract and other deferred assets | |||||||||||
| Total contract and other deferred assets | $ | $ | |||||||||
| Long-term service agreement liabilities | $ | $ | |||||||||
| Current deferred income | |||||||||||
| Contract liabilities and current deferred income | $ | $ | |||||||||
| Non-current deferred income | |||||||||||
| Total contract liabilities and deferred income | $ | $ | |||||||||
| Contract assets (liabilities) and other deferred assets (income) | $ | ( | $ | ( | |||||||
(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 $275 million in the six months ended June 30, 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, time deposits with maturities greater than three months, pension surplus, prepaid taxes and other deferred charges and indemnity assets. All other current assets increased $1,025 million during the six months ended June 30, 2026, driven by the conversion of cash and cash equivalents to higher yielding time deposits with maturities greater than three months of $1,000 million. All other non-current assets increased $192 million in the six months ended June 30, 2026, primarily driven by an increase in equity method and other investments of $312 million, partially offset by a decrease in insurance cash and cash equivalents of $97 million. Insurance cash and cash equivalents were $1,168 million and $1,264 million as of June 30, 2026, and December 31, 2025, respectively.
22 2026 2Q FORM 10-Q
NOTE 10. BORROWINGS
| June 30, 2026 | December 31, 2025 | ||||||||||||||||
| Current portion of long-term borrowings | |||||||||||||||||
| Senior notes | $ | $ | |||||||||||||||
| Subordinated notes and other | |||||||||||||||||
| Other short-term borrowings | |||||||||||||||||
| Total short-term borrowings | $ | $ | |||||||||||||||
| Senior notes(a) | |||||||||||||||||
| Subordinated notes | |||||||||||||||||
| Other | |||||||||||||||||
| Total long-term borrowings | $ | $ | |||||||||||||||
| Total borrowings | $ | $ | |||||||||||||||
(a) In 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.
See Note 20 for further information about borrowings and associated hedges.
NOTE 11. ACCOUNTS PAYABLE
| June 30, 2026 | December 31, 2025 | |||||||
| Trade payables | $ | $ | ||||||
| Revenue sharing and other partner payables(a) | ||||||||
Sundry payables | ||||||||
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 $1,927 million and $1,545 million for the six months ended June 30, 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 $715 million and $872 million, profit was $171 million and $147 million and net income was $136 million and $118 million for the three months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026 and 2025, revenues were $1,493 million and $1,806 million, profit was $301 million and $353 million and net income was $240 million and $280 million, respectively. These operations were primarily supported by investment securities, substantially all debt securities, of $37,305 million and $37,842 million, limited partnerships of $5,288 million and $5,089 million, a diversified commercial mortgage loan portfolio collateralized by first liens on U.S. commercial real estate properties of $1,786 million and $1,802 million (net of allowance for credit losses of $19 million and $19 million) and residential mortgage loans of $442 million and $395 million (net of allowance for credit losses of an insignificant amount), as of June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026, the commercial mortgage loan portfolio had no 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.
June 30, 2026 | Long-term care | Structured settlement annuities | Life | Other contracts | Total | ||||||||||||
Future policy benefit reserves | $ | $ | $ | $ | $ | ||||||||||||
Investment contracts | |||||||||||||||||
Other | |||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||
December 31, 2025 | |||||||||||||||||
Future policy benefit reserves | $ | $ | $ | $ | $ | ||||||||||||
Investment contracts | |||||||||||||||||
Other | |||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||
2026 2Q FORM 10-Q 23
The following tables summarize balances of and changes in future policy benefit reserves.
| June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||||||||
| Long-term care | Structured settlement annuities | Life | Long-term care | Structured settlement annuities | Life | ||||||||||||||||||||||||||||||
| Present value of expected net premiums | |||||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Beginning balance at locked-in discount rate | |||||||||||||||||||||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | |||||||||||||||||||||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||||||||||||||||||||
| Interest accrual | |||||||||||||||||||||||||||||||||||
| Net premiums collected | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Effect of foreign currency | ( | ||||||||||||||||||||||||||||||||||
| Ending balance at locked-in discount rate | |||||||||||||||||||||||||||||||||||
| Effect of changes in discount rate assumptions | ( | ||||||||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Present value of expected future policy benefits | |||||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Beginning balance at locked-in discount rate | |||||||||||||||||||||||||||||||||||
| Effect of changes in cash flow assumptions | ( | ( | |||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||||||||||||||||||||
| Interest accrual | |||||||||||||||||||||||||||||||||||
| Benefit payments | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Effect of foreign currency | ( | ||||||||||||||||||||||||||||||||||
| Ending balance at locked-in discount rate | |||||||||||||||||||||||||||||||||||
| Effect of changes in discount rate assumptions | ( | ||||||||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Net future policy benefit reserves | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Less: Reinsurance recoverables, net of allowance for credit losses | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net future policy benefit reserves, after reinsurance recoverables | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Weighted-average duration of liability (years)(a) | |||||||||||||||||||||||||||||||||||
| Weighted-average interest accretion rate | % | % | % | % | % | % | |||||||||||||||||||||||||||||
| Current discount rate | % | % | % | % | % | % | |||||||||||||||||||||||||||||
| Gross premiums or assessments recognized during period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Expected future gross premiums, undiscounted | |||||||||||||||||||||||||||||||||||
| Expected future gross premiums, discounted(a) | |||||||||||||||||||||||||||||||||||
| Expected future benefit payments, undiscounted | |||||||||||||||||||||||||||||||||||
| Expected future benefit payments, discounted(a) | |||||||||||||||||||||||||||||||||||
(a) Determined using the current discount rate as of June 30, 2026 and 2025.
As of June 30, 2026 and 2025, policyholders account balances totaled $1,321 million and $1,499 million, respectively. As our insurance operations are in run-off, changes in policyholder account balances for the six months ended June 30, 2026 and 2025 are primarily attributed to surrenders, withdrawals and benefit payments of $175 million and $211 million, partially offset by net additions from separate accounts and interest credited of $119 million and $134 million, respectively. Interest on policyholder account balances is generally credited at minimum guaranteed rates, primarily between 3.0 % and 6.0 % at both June 30, 2026 and 2025, respectively.
In the third quarter, we will complete our annual review of future policy benefit reserves cash flow assumptions, except related claim expenses which remain locked-in. If the review concludes that the assumptions need to be updated, future policy benefit reserves will be adjusted retroactively based on the revised net premium ratio using actual historical experience, updated cash flow assumptions, and the locked-in discount rate with the effect of those changes recognized in current period earnings.
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 in three 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.
24 2026 2Q FORM 10-Q
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 PENSION PLANS | Three months ended June 30 | Six months ended June 30 | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Service cost for benefits earned | $ | $ | $ | $ | |||||||||||||
| Prior service cost amortization | ( | ( | ( | ( | |||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | |||||||||||||
| Interest cost on benefit obligations | |||||||||||||||||
| Net actuarial gain amortization | ( | ( | ( | ( | |||||||||||||
| Net periodic expense (income) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||
Principal retiree benefit plans income was $13 million and $17 million for the three months ended June 30, 2026 and 2025, and $26 million and $32 million for the six months ended June 30, 2026 and 2025, respectively.
NOTE 14. SALES DISCOUNTS AND ALLOWANCES & ALL OTHER LIABILITIES. Sales discounts and allowances increased $956 million during the six months ended June 30, 2026, primarily due to increases in allowances on new engine installs and spare parts, as well as product durability reserves at CES.
NOTE 15. INCOME TAXES. Our effective income tax rate was 13.2 % and 14.5 % for the six months ended June 30, 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), which were partially offset by a decrease in favorable audit resolutions and a non-recurring benefit from foreign tax credits on the reinsurance transaction that occurred in 2025.
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.
DEFERRED INCOME TAXES | June 30, 2026 | December 31, 2025 | ||||||
| Total assets | $ | $ | ||||||
| Total liabilities | ( | ( | ||||||
| Net deferred income tax asset | $ | $ | ||||||
2026 2Q FORM 10-Q 25
NOTE 16. SHAREHOLDERS’ EQUITY
| ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
| (Dividends per share in dollars) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||
| Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
AOCI before reclasses – net of taxes of $ | ( | ( | ( | |||||||||||||||||
| AOCI | ( | ( | ( | |||||||||||||||||
| Currency translation adjustments AOCI | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
| Beginning balance | $ | ( | $ | $ | ( | $ | ||||||||||||||
AOCI before reclasses – net of taxes of $ | ( | ( | ||||||||||||||||||
Reclasses from AOCI – net of taxes of $( | ( | ( | ( | ( | ||||||||||||||||
| AOCI | ( | ( | ( | ( | ||||||||||||||||
| Benefit plans AOCI | $ | ( | $ | $ | ( | $ | ||||||||||||||
| Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
AOCI before reclasses – net of taxes of $ | ( | |||||||||||||||||||
Reclasses from AOCI – net of taxes of $ | ( | ( | ||||||||||||||||||
| AOCI | ( | |||||||||||||||||||
| Investment securities and cash flow hedges AOCI | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
| Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
AOCI before reclasses – net of taxes of $( | ( | ( | ( | |||||||||||||||||
| AOCI | ( | ( | ( | |||||||||||||||||
| Long-duration insurance contracts AOCI | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
AOCI at June 30 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
| Dividends declared per common share | $ | $ | $ | $ | ||||||||||||||||
Common stock. GE Aerospace common stock shares outstanding were 1,037,562,513 and 1,048,766,702 as of June 30, 2026 and December 31, 2025, respectively. We repurchased 6.9 million shares for $2,012 million and 14.1 million shares for $4,223 million during the three and six months ended June 30, 2026. This included repurchases of 3.5 million shares for $1,028 million and 7.7 million shares for $2,338 million during the three and six months ended June 30, 2026 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
| Three months ended June 30 | 2026 | 2025 | |||||||||||||||
| (Earnings for per-share calculation, shares in millions, per-share amounts in dollars) | Diluted | Basic | Diluted | Basic | |||||||||||||
| Net income (loss) from continuing operations attributable to common shareholders(a) | $ | $ | $ | $ | |||||||||||||
| Net income (loss) from discontinued operations | ( | ( | |||||||||||||||
| Net income (loss) attributable to common shareholders | |||||||||||||||||
| Shares of common stock outstanding | |||||||||||||||||
Employee compensation-related shares (including stock options) | — | — | |||||||||||||||
Total average equivalent shares | |||||||||||||||||
| EPS from continuing operations | $ | $ | $ | $ | |||||||||||||
| EPS from discontinued operations | ( | ( | |||||||||||||||
| Net EPS | |||||||||||||||||
| Potentially dilutive securities(a) | |||||||||||||||||
26 2026 2Q FORM 10-Q
| Six months ended June 30 | 2026 | 2025 | |||||||||||||||
| (Earnings for per-share calculation, shares in millions, per-share amounts in dollars) | Diluted | Basic | Diluted | Basic | |||||||||||||
| Net income (loss) from continuing operations attributable to common shareholders(a) | $ | $ | $ | $ | |||||||||||||
| Net income (loss) from discontinued operations | ( | ( | |||||||||||||||
| Net income (loss) attributable to common shareholders | |||||||||||||||||
| Shares of common stock outstanding | |||||||||||||||||
Employee compensation-related shares (including stock options) | — | — | |||||||||||||||
Total average equivalent shares | |||||||||||||||||
| EPS from continuing operations | $ | $ | $ | $ | |||||||||||||
| EPS from discontinued operations | ( | ( | |||||||||||||||
| Net EPS | |||||||||||||||||
| Potentially dilutive securities(a) | |||||||||||||||||
(a) Outstanding stock awards not included in the computation of diluted earnings per share because their effect was antidilutive.
NOTE 18. OTHER INCOME (LOSS)
| Three months ended June 30 | Six months ended June 30 | |||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Net interest and investment income (loss)(a) | ||||||||||||||||||||
| Licensing and royalty income | ||||||||||||||||||||
| Equity method income | ||||||||||||||||||||
| Other items | ||||||||||||||||||||
| Total other income (loss) | $ | $ | $ | $ | ||||||||||||||||
(a) Included unrealized gain of $47 million and unrealized loss of $262 million related to our investment in BETA Technologies, Inc. for the three and six months ended June 30, 2026, respectively.
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.
| RESTRUCTURING AND OTHER CHARGES | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Workforce reductions | $ | $ | $ | $ | ||||||||||||||||
| Plant closures & associated costs and other asset write-downs | ( | |||||||||||||||||||
Acquisition/disposition net charges and other | ||||||||||||||||||||
| Total restructuring and other charges | $ | $ | $ | $ | ||||||||||||||||
| Cost of equipment/services | $ | $ | $ | $ | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||
| Total restructuring and other charges | $ | $ | $ | $ | ||||||||||||||||
| Restructuring and other cash expenditures(a) | $ | $ | $ | $ | ||||||||||||||||
(a) Primarily related to employee severance payments.
The restructuring liability as of June 30, 2026 and December 31, 2025 was $76 million and $91 million, respectively.
For the three and six months ended June 30, 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. We expect to complete separation activities in the second half of 2026.
For the three months ended June 30, 2026 and 2025, we incurred pre-tax separation costs of $34 million and $47 million, recognized $7 million and $10 million of net tax benefits and paid $33 million and $70 million in cash, respectively.
2026 2Q FORM 10-Q 27
For the six months ended June 30, 2026 and 2025, we incurred pre-tax separation costs of $89 million and $98 million, recognized $19 million and $20 million of net tax benefits and paid $116 million and $146 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. Additionally, cash, cash equivalents and time deposits with maturities greater than three months are excluded from the table below, as the carrying value approximates their fair value because of the relatively short-term maturities of these financial instruments. Substantially all of these assets are considered Level 3 and substantially all these liabilities’ fair value are considered Level 2.
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||
| Carrying amount (net) | Estimated fair value | Carrying amount (net) | Estimated fair value | |||||||||||||||||
| Assets | Commercial and residential mortgage loans (Note 12) | $ | $ | $ | $ | |||||||||||||||
| Liabilities | Borrowings (Note 10) | |||||||||||||||||||
| Investment contracts (Note 12) | ||||||||||||||||||||
Assets and liabilities that are reflected in the accompanying financial statements at fair value are not included in the above disclosures; such items include 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.
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 $4 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 $4,762 million and $4,958 million as of June 30, 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. For the three months and the six months ended June 30, 2026, gain or (loss) on interest rate swaps was $(6 ) million and $(10 ) million, respectively, recognized in interest and other financial changes and offset by the changes of fair value of the hedged debts within the same line in the Statement of Operations.
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 amounts reduced Interest and other financial charges by $10 million and $6 million for the three months ended June 30, 2026 and 2025, respectively, and $19 million and $8 million for the six months ended June 30, 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.
28 2026 2Q FORM 10-Q
| FAIR VALUE OF DERIVATIVES | June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||
| Classification(a) | Gross Notional | Fair Value - Assets | Fair Value - Liabilities | Gross Notional | Fair Value - Assets | Fair Value - Liabilities | ||||||||||||||||||||
| Qualifying currency exchange contracts | Current | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Qualifying cross currency interest rate swaps | Current | |||||||||||||||||||||||||
| Qualifying cross currency interest rate swaps | Non-Current | |||||||||||||||||||||||||
| Qualifying interest rate swaps | Non-Current | |||||||||||||||||||||||||
| Non-qualifying currency exchange contracts and other(b) | Current | |||||||||||||||||||||||||
| Gross derivatives | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Netting and credit adjustments | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Net derivatives recognized in Statement of Financial Position | $ | $ | $ | $ | ||||||||||||||||||||||
(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 were $40 million and $181 million for the three months ended June 30, 2026 and 2025, and $5 million and $216 million for six months ended June 30, 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
| Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives | Amount of Gain (Loss) Reclassified from AOCI into Net Income | |||||||||||||||||||||||||||||||
| Three months ended June 30 | Six months ended June 30 | Three months ended June 30 | Six months ended June 30 | |||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Cash flow hedges(a) | $ | ( | $ | $ | ( | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
| Net investment hedges | ( | ( | ||||||||||||||||||||||||||||||
FAIR VALUE HEDGES. As of June 30, 2026 and December 31, 2025, the cumulative amount of hedging adjustments (primarily from discontinued hedges) of $889 969 8,535 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 $70 million and $187 million as of June 30, 2026 and December 31, 2025, respectively. Counterparties' exposures to our derivative liability (including accrued interest), were $89 million and $71 million as of June 30, 2026 and December 31, 2025, respectively.
NOTE 21. VARIABLE INTEREST ENTITIES. In our Statement of Financial Position, we have assets of $174 million and $170 million and liabilities of $137 million and $144 million as of June 30, 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.
NOTE 22. COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES AND OTHER LOSS CONTINGENCIES
COMMITMENTS. As of June 30, 2026, we had total investment commitments of $4,209 million, 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 $4,043 million. Additionally, we have committed to provide financing assistance of $2,978 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.
2026 2Q FORM 10-Q 29
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 June 30, 2026, we estimated GE Vernova RPO and other obligations that relate to GE Aerospace credit support to be approximately $7,000 million, a more than 89 % reduction since December 31, 2023. We expect approximately $5,000 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 $63 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 $170 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 $140 million, of which $92 million is reserved.
We also have specific indemnities related to the spin-off or disposal of GE's other legacy businesses for which the aggregate maximum potential exposure is $180 million and the aggregated related reserves are $70 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 $633 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 $35 million, which are fully reserved.
We also have specific indemnities related to the spin-off or disposal of GE's other legacy businesses for which the aggregate maximum potential exposure is $450 million and the aggregated related reserves are $78 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 $511 million and $595 million as of June 30, 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.
Shareholder and related lawsuits. Since February 2018, multiple shareholder derivative lawsuits were filed against current and former GE executive officers and members of GE’s Board of Directors and GE (as nominal defendant). These lawsuits have alleged violations of securities laws, breaches of fiduciary duties, unjust enrichment, waste of corporate assets, abuse of control and gross mismanagement, although the specific matters underlying the allegations in the lawsuits have varied. Two shareholder derivative lawsuits had been pending: the Lindsey and Priest/Tola cases, which were filed in New York state court. The allegations in these two cases relate to substantially the same facts as those underlying the Sjunde AP-Fonden case, which settled in April 2025. The plaintiffs seek unspecified damages and improvements in GE’s corporate governance and internal procedures. The Lindsey case had been stayed by agreement of the parties, and the court later dismissed it. GE filed a motion to dismiss the Priest/Tola complaint in March 2021. In August 2024, the plaintiffs in the Priest/Tola case filed an amended consolidated complaint asserting substantially the same claims as in the prior derivative actions, and the Company filed a motion to dismiss this amended complaint in October 2024. In July 2026, the court granted the Company’s motion to dismiss the Priest/Tola case with prejudice.
30 2026 2Q FORM 10-Q
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 $1,814 million and $2,334 million as of June 30, 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 $2,190 million and $2,129 million as of June 30, 2026 and December 31, 2025, respectively.
NOTE 23. SEGMENT INFORMATION & REMAINING PERFORMANCE OBLIGATION. We have two reportable segments and three 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 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 DPT 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.
| EQUIPMENT & SERVICES REVENUE | |||||||||||||||||||||||
| Three months ended June 30 | 2026 | 2025 | |||||||||||||||||||||
| Equipment | Services | Total | Equipment | Services | Total | ||||||||||||||||||
| Commercial Engines & Services | $ | $ | $ | $ | $ | $ | |||||||||||||||||
| Defense & Propulsion Technologies | |||||||||||||||||||||||
| Total segment revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||
| Six months ended June 30 | 2026 | 2025 | |||||||||||||||||||||
| Equipment | Services | Total | Equipment | Services | Total | ||||||||||||||||||
| Commercial Engines & Services | $ | $ | $ | $ | $ | $ | |||||||||||||||||
| Defense & Propulsion Technologies | |||||||||||||||||||||||
| Total segment revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||
2026 2Q FORM 10-Q 31
| EXPENSES, PROFIT AND INCOME | Three months ended June 30 | Six months ended June 30 | ||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Commercial Engines & Services | ||||||||||||||||||||
| Cost of revenue | $ | $ | $ | $ | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||
| Research and development | ||||||||||||||||||||
| Other segment expenses (income)(a) | ( | ( | ( | ( | ||||||||||||||||
| Total Commercial Engines & Services expenses | ||||||||||||||||||||
| Defense & Propulsion Technologies | ||||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||
| Research and development | ||||||||||||||||||||
| Other segment expenses (income)(a) | ( | ( | ( | ( | ||||||||||||||||
| Total Defense & Propulsion Technologies expenses | ||||||||||||||||||||
| Commercial Engines & Services | ||||||||||||||||||||
| Defense & Propulsion Technologies | ||||||||||||||||||||
| Total segment profit (loss) | ||||||||||||||||||||
| Corporate & Other | ( | ( | ( | ( | ||||||||||||||||
| Interest and other financial charges | ( | ( | ( | ( | ||||||||||||||||
| Non-operating benefit income (cost) | ||||||||||||||||||||
| Benefit (provision) for income taxes | ( | ( | ( | ( | ||||||||||||||||
| Net income (loss) from continuing operations attributable to common shareholders | ||||||||||||||||||||
| Net income (loss) from discontinued operations attributable to common shareholders | ( | ( | ||||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | $ | $ | $ | ||||||||||||||||
(a) Other segment expenses (income) primarily includes equity method income, interest income and licensing and royalty income.
EXHIBITS
11. Computation of Per Share Earnings. Data is provided in Note 17 of this Report.* | ||||||||
101. The following materials from General Electric Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in XBRL (eXtensible Business Reporting Language); (i) Statement of Operations for the three and six months ended June 30, 2026 and 2025, (ii) Statement of Financial Position at June 30, 2026 and December 31, 2025, (iii) Statement of Cash Flows for the six months ended June 30, 2026 and 2025, (iv) Consolidated Statement of Comprehensive Income (Loss) for the three and six months ended June 30, 2026 and 2025, (v) Statement of Changes in Shareholders' Equity for the three and six months ended June 30, 2026 and 2025, and (vi) Notes to Consolidated Financial Statements. | ||||||||
Exhibit 104. Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||||||
| *Filed electronically herewith | ||||||||
32 2026 2Q FORM 10-Q
| FORM 10-Q CROSS REFERENCE INDEX | Page(s) | |||||||||||||
| Part I – FINANCIAL INFORMATION | ||||||||||||||
| Item 1. | Financial Statements | 14-32 | ||||||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4-13 | ||||||||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 10, 28-29 | ||||||||||||
| Item 4. | Controls and Procedures | |||||||||||||
Part II – OTHER INFORMATION | ||||||||||||||
| Item 1. | Legal Proceedings | 30-31 | ||||||||||||
| Item 1A. | Risk Factors | Not applicable(a) | ||||||||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||||||||||
| Item 3. | Defaults Upon Senior Securities | Not applicable | ||||||||||||
| Item 4. | Mine Safety Disclosures | Not applicable | ||||||||||||
| Item 5. | Other Information | |||||||||||||
| Item 6. | Exhibits | |||||||||||||
| Signatures | ||||||||||||||
(a) For a discussion of our risk factors, refer to our Annual Report on Form 10-K for the year ended December 31, 2025.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| July 16, 2026 | /s/ Robert Giglietti | |||||||
| Date | Robert Giglietti Vice President - Chief Accounting Officer, Controller and Treasurer Principal Accounting Officer | |||||||
2026 2Q FORM 10-Q 33
Exhibit 10(a)
GE AEROSPACE 2022 LONG-TERM INCENTIVE PLAN
Amended and restated as of May 5, 2026
Amended and restated as of May 5, 2026
Section I.Purpose
The purpose of this GE Aerospace 2022 Long-Term Incentive Plan is to attract, retain and motivate current and prospective employees, officers, non-employee directors and other service providers of the Company. Stock- and performance-based compensation provided under this Plan is designed to align such individuals’ interests and efforts with those of the Company’s shareholders.
Section II.Definitions
As used in the Plan, the following terms shall have the meanings set forth below:
(a)“Act” means the Securities Exchange Act of 1934.
(b)“Affiliate” means any company or business entity under the direct or indirect control of the Company, and any company or business entity in which the Company has a 50% or more interest, in each case, as determined by the Committee.
(c)“Award” means an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award or Other Stock-Based Award, or any combination of these, granted to a Participant pursuant to the provisions of the Plan.
(d)“Award Agreement” means a written or electronic agreement or other instrument implementing the grant of each Award. An Award Agreement may be in the form of an agreement to be executed by the Participant (or both the Participant and an authorized representative of the Company), or in the form of certificates, notices or similar instruments as approved by the Committee and designated as such.
(e)“Board” means the Board of Directors of the Company.
(f)“Cause” means, except as otherwise provided in an Award Agreement, as determined in the sole discretion of the Committee, the Participant’s:
(i) breach of the Employee Innovation and Proprietary Information Agreement or any other confidentiality, non-solicitation or non-competition agreement with the Company or any Affiliate, or breach of a material term of any other agreement between the Participant and the Company or any Affiliate;
(ii) engagement in conduct that results in, or has the potential to cause, material harm financially, reputationally, or otherwise to the Company or any Affiliate;
(iii) commission of an act of dishonesty, fraud, embezzlement or theft;
(iv) conviction of, or plea of guilty or no contest to a felony or crime involving moral turpitude; or
(v) failure to comply with the Company’s or any Affiliate’s policies and procedures, including but not limited to The Spirit and Letter.
A Participant’s employment or service will be deemed to have been terminated for Cause if the Committee determines subsequent to such termination that Cause existed at the time of such termination.
(g)“Change in Control” means, except as otherwise provided in an Award Agreement, the occurrence of any one of the following events:
(i)a transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby a Person directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 50% or more of either (A) the then-outstanding shares of Common Stock (the “Outstanding Shares”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”);
(ii)the consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the Company’s assets (a “Business Combination”), unless following such Business Combination all or substantially all of the beneficial owners of the Outstanding Shares or Outstanding Voting Securities immediately prior to the Business Combination beneficially own (directly or indirectly) more than 50% of the then-outstanding shares of common stock or combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors of the entity resulting from the business combination (including an entity that as a result of the Business Combination owns (directly or indirectly) the Company or all or substantially all of the Company’s assets in substantially the same proportions as their ownership immediately prior to the Business Combination.
(iii)For the avoidance of doubt, a public offering, internal restructuring or transfer of Common Stock or assets to any Affiliate will not be treated as a Change in Control.
(h)“Change in Control Price” means the amount determined by the Committee in its sole discretion based on the following clauses, whichever the Committee determines is applicable, as follows: (i) the price per share offered to holders of Common Stock in any merger or consolidation, tender offer or exchange offer whereby a Change in Control takes place (ii) the per share Fair Market Value of the Common Stock immediately before the Change in Control, without regard to assets sold in the Change in Control and assuming the Company has received the consideration paid therefor, or (iii) the value per share of the Common Stock that may otherwise be obtained with respect to such Awards or to which such Awards track, as determined by the Committee as of the date of cancellation and surrender of such Awards. In the event that the consideration offered to shareholders of the Company in a Change in Control consists of anything other than cash, the Committee shall determine in its sole discretion the fair cash equivalent of such non-cash consideration.
(i)“Code” means the Internal Revenue Code of 1986.
(j)“Committee” means the Management Development and Compensation Committee of the Board (or its successor) or such other committee as designated by the Board to administer the Plan; provided, however, that with respect to Awards granted to non-employee directors, “Committee” means the Governance and Public Affairs Committee of the Board (or its successor) or such other committee as designated by the Board to administer the Plan with respect to such Awards.
(k)“Common Stock” means the common stock of the Company, $0.01 par value per share, or such other class or kind of shares or other securities as may be applicable under Section XV.
(l)“Company” means General Electric Company (a New York corporation), operating as GE Aerospace, and, except as utilized in the definition of Change in Control, any successor corporation.
(m)“Disability” means, except as otherwise provided in an Award Agreement, the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. A determination of Disability shall be made by the Committee on the basis
2
of such medical evidence as the Committee deems warranted under the circumstances, and in this respect, Participants shall submit to an examination by a physician upon request by the Committee.
(n)“Dividend Equivalent” means an amount payable in cash or Common Stock, as determined by the Committee, equal to the dividends that would have been paid to the Participant if the share of Common Stock with respect to which the Dividend Equivalent relates had been owned by the Participant.
(o)“Eligible Person” means any current or prospective employee, officer, non-employee director or other service provider of the Company or any of its Affiliates; provided, however, that Incentive Stock Options may only be granted to employees of the Company or any of its “subsidiary corporations” within the meaning of Section 424 of the Code.
(p)“FASB ASC Topic 718” means the Financial Accounting Standards Board Accounting Standards Codification Topic 718 or any successor accounting standard.
(q)“Fair Market Value” means as of any date, (i) the closing sales price of a share of Common Stock as quoted on the New York Stock Exchange or such other source as the Committee deems reliable (or, if no sale of Common Stock is reported for such date, on the next preceding date on which any sale is reported), or (ii) in the absence of an established market for the Common Stock, the value determined in good faith by the Committee by the reasonable application of a reasonable valuation method, taking into account factors consistent with Treasury Department regulation 1.409A-1(b)(5)(iv)(B) as the Committee deems appropriate.
(r)“Good Reason” means, except as otherwise provided in an Award Agreement, any of the following, in each case, without the Participant’s consent: (i) a material reduction in the Participant’s base salary, (ii) a material breach by the Company or its Affiliate of any material provision of any agreement between the Participant and the Company or its Affiliate, or (iii) a material diminution in the Participant’s title, authority, duties, responsibilities or reporting relationships; provided, however, that the Termination of Employment or Separation from Service shall not be for Good Reason unless: (A) the Participant has provided written notice to the Chief Human Resources Officer of the Company of the existence of the circumstances providing grounds for termination for Good Reason within 30 calendar days of the date the Participant first becomes aware of such circumstances, (B) the Company or its Affiliate has been given at least 30 calendar days from the date on which such notice is provided to cure such circumstances (the “cure period”), and (C) the Termination of Employment or Separation from Service occurs within 30 calendar days following the Company’s or Affiliate’s failure to cure such circumstances within the cure period. For the avoidance of doubt, the sale, disposition or spin-off of any one or more businesses of the Company or its Affiliates, or any transaction following which the Company’s (or its successor’s) common equity is not publicly traded on a nationally recognized securities exchange or through a national market quotation service, shall not be deemed a material reduction in the Participant’s title, authority, duties, responsibilities or reporting relationships.
(s)“Incentive Stock Option” means an Option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.
(t)“Nonqualified Stock Option” means an Option that is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.
(u)“Option” means a right to purchase a number of shares of Common Stock at such exercise price, at such times and on such other terms and conditions as are specified in or determined pursuant to an Award Agreement. Options granted pursuant to the Plan may be Incentive Stock Options or Nonqualified Stock Options.
3
(v)“Other Stock-Based Award” means an Award granted to an Eligible Person as described in Section XI.
(w)“Participant” means any Eligible Person to whom Awards have been granted by the Committee and, if applicable, the authorized transferee of such individual.
(x)“Performance Award” means an Award described in Section XII pursuant to which a Participant may become entitled to receive an amount based on satisfaction of such performance criteria established for such performance period as specified in the Award Agreement.
(y)“Person” shall have the meaning given in Section 3(a)(9) of the Act, as modified and used in Sections 14(d) and 15(d) thereof, except that such term shall not include (i) the Company or any Affiliate, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Affiliate, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(z)“Plan” means this GE Aerospace 2022 Long-Term Incentive Plan.
(aa)“Prior Plan” means the GE 2007 Long-Term Incentive Plan.
(ab)“Restricted Stock” means an Award or issuance of Common Stock the vesting and/or transferability of which is subject during specified periods of time to such terms and conditions (including continued employment or engagement or performance conditions) as the Committee determines.
(ac)“Restricted Stock Unit” means an Award denominated in units of Common Stock under which the issuance of shares of Common Stock (or cash payment in lieu thereof) is subject to such terms and conditions (including continued employment or engagement or performance conditions) as the Committee determines.
(ad)“Retirement” means, except as otherwise provided in an Award Agreement, attainment of age 60 and completion of five years of continuous employment with the Company and its Affiliates.
(ae)“Separation from Service” or “Separates from Service” means a Termination of Employment or other cessation of service that constitutes a “separation from service” within the meaning of Section 409A of the Code.
(af)“Stock Appreciation Right” or “SAR” means a right that entitles the Participant to receive, in cash or Common Stock or a combination thereof, as determined by the Committee, value equal to the excess of (i) the Fair Market Value of a specified number of shares of Common Stock at the time of exercise over (ii) the exercise price of the right, as established by the Committee on the date of grant.
(ag)“Substitute Awards” means Awards granted or Common Stock issued by the Company in assumption of, or in substitution or exchange for, awards previously granted (or the right or obligation to make future awards) by a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines.
(ah)“Termination of Employment” means, except as otherwise provided in an Award Agreement or as otherwise determined by the Committee, ceasing to serve as an employee of the Company and its Affiliates or, with respect to a non-employee director or other service provider, ceasing to serve as such for the Company and its Affiliates; provided, however, that with respect to all or any Awards held by a Participant, the Committee may determine that (i) a leave of absence (including as a result of a Participant’s short-term or long-term disability or other medical leave) or employment on a less than full-time basis is considered a “Termination of Employment,” (ii) service as a member of the Board or
4
other service provider to the Company or an Affiliate shall constitute continued employment with respect to Awards granted to a Participant while he or she served as an employee of the Company or an Affiliate, or (iii) service as an employee of the Company or an Affiliate shall constitute continued service/employment with respect to Awards granted to a Participant while he or she served as a member of the Board or other service provider to the Company or an Affiliate. The Committee shall determine whether any corporate transaction, such as a sale or spin-off of a division or Affiliate that employs or engages a Participant, shall be deemed to result in a Termination of Employment with the Company and its Affiliates for purposes of any affected Participant’s Awards, and the Committee’s decision shall be final and binding. For purposes of determining the time of payment of any Award that is subject to Section 409A of the Code and provides for payment upon a Termination of Employment, a Termination of Employment shall not be deemed to occur for such purpose (as opposed to another purpose, such as vesting) until such Participant’s Separation from Service.
Section III.Eligibility
Any Eligible Person is eligible for selection by the Committee to receive an Award.
Section IV.Effective Date and Termination of Plan
This Plan became effective on May 4, 2022 (the “Effective Date”) and shareholders of the Company approved a decrease to the aggregate number of shares of Common Stock issuable under the Plan effective as of May 5, 2026 (the “Amendment Effective Date”). The Plan shall remain available for the grant of Awards until the 10th anniversary of the Amendment Effective Date; provided, however, that no Incentive Stock Option may be granted under this Plan after February 6, 2036. Notwithstanding the foregoing, the Plan may be terminated at such earlier time as the Board may determine. Termination of the Plan will not affect the rights and obligations of the Participants and the Company arising under Awards granted prior to such termination.
Section V.Shares Subject to the Plan and to Awards
(a)Aggregate Limits. As of the Amendment Effective Date, the aggregate number of shares of Common Stock issuable under the Plan shall be equal to (i) 50 million shares of Common Stock, plus (ii) the shares of Common Stock subject to Awards outstanding as of December 31, 2025, plus (iii) any shares of Common Stock that become available for issuance under the Plan pursuant to Section V(c). The aggregate number of shares of Common Stock available for grant under this Plan and the number of shares of Common Stock subject to Awards outstanding at the time of any event described in Section XV shall be subject to adjustment as provided in Section XV. The shares of Common Stock issued under this Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market or in private transactions.
(b)Issuance of Shares; Fungible Ratio. For purposes of Section V(a), the aggregate number of shares of Common Stock issued under this Plan at any time shall equal only the number of shares of Common Stock actually issued upon exercise or settlement of an Award; provided that each share issued pursuant to an Award of Options or Stock Appreciation Rights shall be counted against the limit in Section V(a) as one share and each share issued pursuant to any other Award type shall be counted against such limit as 2.21 shares. The aggregate number of shares available for issuance under this Plan at any time shall not be reduced by shares subject to Awards that have been canceled, terminated, expired unexercised, forfeited or settled in cash; provided, however, that (i) shares subject to Awards that have been retained or withheld by the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of an Award (including shares that were subject to an Award but were not issued or delivered as a result of the net settlement or net exercise of such Award) and (ii) shares repurchased on the open market with the proceeds of an Option exercise, in each case, shall not be available for issuance under this Plan.
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(c)Prior Plan Awards. Shares of Common Stock subject to awards granted under the Prior Plan that are canceled, terminated, expired unexercised, forfeited or settled in cash following the Effective Date shall become available for issuance under this Plan on a one-for-one basis; provided, however, that shares of Common Stock subject to awards granted under the Prior Plan that have been retained or withheld by the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of such award shall not become available for issuance under this Plan.
(d)Substitute Awards. Substitute Awards shall not reduce the shares of Common Stock authorized for issuance under the Plan. Additionally, in the event that a company acquired by the Company or any Affiliate, or with which the Company or any Affiliate combines, has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the shares of Common Stock authorized for issuance under the Plan; provided that Awards using such available shares (i) shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, (ii) shall only be made to individuals who were not employees or service providers of the Company or its Affiliates at the time of such acquisition or combination, and (iii) shall comply with the requirements of any stock exchange, market or quotation system on which the Common Stock is traded, listed or quoted.
(e)Tax Code Limits. The aggregate number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options granted under this Plan shall be equal to 50 million, which number shall be calculated and adjusted pursuant to Section XV only to the extent that such calculation or adjustment will not affect the status of any Option intended to qualify as an Incentive Stock Option under Section 422 of the Code.
(f)Limits on Non-Employee Director Compensation. The aggregate dollar value of equity-based and cash compensation granted under this Plan or otherwise to any non-employee director (determined at the grant date and, for equity-based Awards, in accordance with FASB ASC Topic 718) shall not exceed $1 million (U.S. dollars) during any calendar year.
Section VI.Administration of the Plan
(a)Administrator of the Plan. The Plan shall be administered by the Committee. To the maximum extent permissible under applicable law, the Committee (or any successor) may by resolution delegate any or all of its authority to one or more subcommittees composed of one or more directors or officers of the Company (with the power to re-delegate such authority), and any such subcommittee (or its delegate) shall be treated as the Committee for all purposes under this Plan; provided, however, that no Award may be granted to an Eligible Person who is then subject to Section 16 of the Act in respect of the Company by any such subcommittee unless such subcommittee is composed solely of two or more “non-employee directors” within the meaning of Rule 16b-3(b)(3) promulgated under the Act. The Committee may designate and delegate to one or more officers or employees of the Company or any Affiliate, and/or one or more agents, authority to assist the Committee in any or all aspects of the day-to-day administration of the Plan and/or of Awards granted under the Plan.
(b)Powers of Committee. Subject to the express provisions of this Plan, the Committee shall be authorized and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of this Plan, including:
(i)to prescribe, amend and rescind rules and regulations relating to this Plan and to define terms not otherwise defined herein;
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(ii)to determine the Eligible Persons to which Awards shall be granted, if any, hereunder and the timing of any such Awards;
(iii)to prescribe and amend the terms of the Award Agreements, to grant Awards and to determine the terms and conditions thereof;
(iv)to establish and verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, vesting, exercise or settlement of any Award;
(v)to prescribe and amend the terms or form of any document or notice required to be delivered to the Company or the applicable Affiliate by Participants under this Plan;
(vi)to determine the extent to which adjustments are required pursuant to Section XV;
(vii)to interpret and construe this Plan, any rules and regulations under this Plan and the terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions if the Committee, in good faith, determines that it is appropriate to do so;
(viii)to approve corrections in the documentation or administration of any Award; and
(ix)to make all other determinations it deems necessary or advisable for the administration of this Plan.
The Committee may, in its sole and absolute discretion, without amendment to the Plan but subject to the limitations otherwise set forth in Section XIX: (i) waive or amend the operation of Plan provisions respecting vesting, exercise or settlement in connection with a Termination of Employment or Separation from Service, and/or (ii) waive, settle or adjust any of the terms of any Award so as to avoid unanticipated consequences or address unanticipated events (including any temporary closure of an applicable stock exchange, disruption of communications or natural catastrophe).
(c)Determinations by the Committee. All decisions, determinations and interpretations by the Committee regarding the Plan, any rules and regulations under the Plan and the terms and conditions of (or operation of) any Award granted hereunder, shall be final and binding on all Participants, beneficiaries, heirs, assigns or other persons holding or claiming rights under the Plan or any Award. The Committee shall consider such factors as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations and interpretations, including the recommendations or advice of any officer or other employee of the Company and such attorneys, consultants and accountants as it may select.
(d)Indemnification. Subject to requirements of applicable law, each individual who is or shall have been a member of the Board, the Committee or an officer or manager of the Company to whom authority was delegated in accordance with Section VI shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under this Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit or proceeding against him or her; provided, that he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability or expense is a result of his or her own willful misconduct or except as expressly provided by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
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Section VII.Plan Awards
(a)Terms Set Forth in Award Agreement. Awards may be granted to Eligible Persons as determined by the Committee at any time, and from time to time, prior to the termination of the Plan. Receipt of an Award does not obligate the Committee to provide future Awards to an Eligible Person. The terms and conditions of each Award shall be set forth in an Award Agreement that includes (other than for Restricted Stock) the time or times at or within which the shares of Common Stock or cash, as applicable, may be acquired from the Company and the consideration, if any, that must be paid. Such Award Agreement may contain, incorporate or reference such applicable terms and conditions described in this Plan and/or such other terms and conditions determined by the Committee consistent with its authority under this Plan. The terms of Awards may vary among Participants, and the Plan does not impose upon the Committee any requirement to make Awards subject to uniform terms or interpretations. Accordingly, individual Award Agreements may vary.
(b)Termination of Employment. Subject to the express provisions of the Plan, the Committee shall specify before, at, or after the time of grant of an Award the provisions governing the effect(s) upon an Award of a Participant’s Termination of Employment or Separation from Service.
(c)Rights of a Shareholder. Except as otherwise set forth in the applicable Award Agreement, a Participant shall have no rights as a shareholder (including voting rights) with respect to shares of Common Stock covered by an Award, other than Restricted Stock, until the date the Participant becomes the holder of record of such shares of Common Stock. No adjustment shall be made for dividends or other rights for which the record date is prior to such date, except as provided in Sections X(b), XI(b), XII or XV of this Plan or as otherwise provided by the Committee.
(d)Fractional Shares. The Committee, in its sole discretion, shall determine whether fractional shares of Common Stock may be issued pursuant to an Award or in settlement thereof and shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares. In addition, the Committee shall determine whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
Section VIII.Options
(a)Grant, Term and Price. The grant, issuance, vesting, exercise or settlement of any Option shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the Committee, which may include conditions based on continued employment or engagement, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. The term of an Option shall in no event be greater than 10 years, except that the term of an Option (other than an Incentive Stock Option) shall be automatically extended if the Participant holding such Option is prohibited by law or the Company’s insider trading policy from exercising the Option at the time of its scheduled expiration, in which case the Option shall expire on the 30th day following the date such prohibition no longer applies. The Committee will establish the price at which Common Stock may be purchased upon exercise of an Option, which may not be less than the Fair Market Value of such shares on the date of grant unless (i) such Option is granted as a Substitute Award and (ii) such exercise price is based on a formula set forth in the terms of the original option agreement or the applicable merger or acquisition agreement that satisfies the requirements of Section 424(a) of the Code if such options are Incentive Stock Options and Section 409A of the Code if such options are Nonqualified Stock Options. The exercise price of any Option may be paid by such methods as determined by the Committee, including by cash in U.S. dollars, by an irrevocable commitment to use the proceeds from a sale of shares of Common Stock issuable under an Option, by delivery of previously owned shares of Common Stock or by withholding of shares of Common Stock otherwise deliverable upon exercise.
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(b)No Repricing without Shareholder Approval. Other than in connection with a change in the Company’s capitalization (as described in Section XV), the Committee shall not, without shareholder approval: (i) reduce the exercise price of a previously awarded Option or (ii) at any time when the exercise price of a previously awarded Option is above the Fair Market Value of a share of Common Stock, cancel and re-grant or exchange such Option for cash or a new Award with a lower (or no) exercise price.
(c)No Reload Grants. Options shall not be granted under the Plan in consideration for, and shall not be conditioned upon the delivery of, shares of Common Stock to the Company in payment of the exercise price and/or tax withholding obligation under any other employee stock option.
(d)Incentive Stock Options. Notwithstanding anything to the contrary in this Section VIII, in the case of the grant of an Incentive Stock Option, if the Participant owns stock possessing more than 10% of the combined voting power of all classes of stock of the Company, the exercise price of such Option must be at least 110% of the Fair Market Value of the shares of Common Stock on the date of grant and the Option must expire within a period of not more than five years from the date of grant. Further notwithstanding anything to the contrary in this Section VIII, Options designated as Incentive Stock Options shall not be eligible for treatment under the Code as Incentive Stock Options (and will be deemed Nonqualified Stock Options) to the extent that either (i) the aggregate Fair Market Value of shares of Common Stock (determined as of the time of grant) with respect to which such Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any of its “subsidiary corporations” within the meaning of Section 424 of the Code) exceeds $100,000, taking Options into account in the order in which they were granted, or (ii) such Options otherwise remain exercisable but are not exercised within three months (or such other period of time provided in Section 422 of the Code) of separation of service (as determined in accordance with Section 3401(c) of the Code).
(e)No Shareholder Rights. Participants shall have no voting rights and will have no rights to receive dividends or Dividend Equivalents in respect of an Option or any shares of Common Stock subject to an Option until the Participant has become the holder of record of such shares.
Section IX.Stock Appreciation Rights
(a)General Terms. The grant, issuance, vesting, exercise or settlement of any Stock Appreciation Right shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the Committee, which may include conditions based on continued employment or engagement, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. The term of a Stock Appreciation Right shall in no event be greater than 10 years, except that the term of a Stock Appreciation Right shall be automatically extended if the Participant holding such Stock Appreciation Right is prohibited by law or the Company’s insider trading policy from exercising the Stock Appreciation Right at the time of its scheduled expiration, in which case the Stock Appreciation Right shall expire on the 30th day following the date such prohibition no longer applies. Stock Appreciation Rights may be granted to Participants from time to time either in tandem with or as a component of Options granted under the Plan (“tandem SARs”) or not in conjunction with other Awards (“freestanding SARs”). Upon exercise of a tandem SAR as to some or all of the shares covered by the grant, the related Option shall be canceled automatically to the extent of the number of shares covered by such exercise. Conversely, if the related Option is exercised as to some or all of the shares covered by the grant, the related tandem SAR shall be canceled automatically to the extent of the number of shares covered by such exercise. Any Stock Appreciation Right granted in tandem with an Option may be granted at the same time such Option is granted or at any time thereafter before exercise or expiration of such Option, provided that the Fair Market Value of Common Stock on the date of the SAR’s grant is not greater than the exercise price of the related Option. All freestanding SARs shall be granted subject to the same terms and conditions applicable to Options as set forth in Section VIII and all tandem SARs shall have the same exercise price as the Option to which they relate. Subject to the provisions of
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Section VIII and the immediately preceding sentence, the Committee may impose such other conditions or restrictions on any Stock Appreciation Right as it shall deem appropriate. Stock Appreciation Rights may be settled in Common Stock, cash, Restricted Stock or a combination thereof, as determined by the Committee and set forth in the applicable Award Agreement.
(b)No Repricing without Shareholder Approval. Other than in connection with a change in the Company’s capitalization (as described in Section XV), the Committee shall not, without shareholder approval, reduce the exercise price of a previously awarded Stock Appreciation Right, and at any time when the exercise price of a previously awarded Stock Appreciation Right is above the Fair Market Value of a share of Common Stock, the Committee shall not, without shareholder approval, cancel and re-grant or exchange such Stock Appreciation Right for cash or a new Award with a lower (or no) exercise price.
(c)No Shareholder Rights. Participants shall have no voting rights and will have no rights to receive dividends or Dividend Equivalents in respect of a Stock Appreciation Right or any shares of Common Stock subject to a Stock Appreciation Right until the Participant has become the holder of record of such shares.
Section X.Restricted Stock and Restricted Stock Units
(a)Vesting and Performance Criteria. The grant, issuance, vesting or settlement of any Restricted Stock or Restricted Stock Units shall occur at such time and be subject to such terms and conditions as determined by the Committee or under criteria established by the Committee, which may include conditions based on continued employment or engagement, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. In addition, the Committee shall have the right to grant Restricted Stock or Restricted Stock Unit Awards as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company.
(b)Dividends and Distributions. Participants in whose name Restricted Stock is granted shall be entitled to receive all dividends and other distributions paid with respect to those shares of Common Stock, unless determined otherwise by the Committee; provided, however, that such dividends and other distributions will be subject to the same restrictions on transferability and vesting conditions as the Restricted Stock with respect to which they were distributed. The Committee will determine whether any such dividends or distributions will be automatically reinvested in additional shares of Restricted Stock or paid in cash. Shares underlying Restricted Stock Units shall be entitled to Dividend Equivalents only to the extent provided by the Committee; provided, however, that such Dividend Equivalents will be subject to the same vesting conditions as the underlying Restricted Stock Units.
Section XI.Other Stock-Based Awards
(a)General Terms. Subject to limitations under applicable law, the Committee is authorized to grant to Eligible Persons such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, the value of Common Stock, as deemed by the Committee to be consistent with the purposes of the Plan. The Committee shall determine the terms and conditions of such Other Stock-Based Awards. Common Stock delivered pursuant to an Other Stock-Based Award in the nature of a purchase right granted under this Section XI shall be purchased for such consideration and paid for at such times, by such methods and in such forms (including cash, Common Stock, other Awards or other property) as the Committee shall determine.
(b)Dividends and Distributions. Shares underlying Other Stock-Based Awards shall be entitled to Dividend Equivalents only to the extent provided by the Committee; provided, however, that such Dividend Equivalents will be subject to the same vesting conditions as the underlying Other Stock-Based Award.
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(c)Director Deferred Stock Units. For the avoidance of doubt, cash-settled deferred stock units granted after the Effective Date to non-employee directors under the Company’s 2003 Non-Employee Director Compensation Plan (the “2003 Plan”) shall be considered Other Stock-Based Awards under the Plan and shall be subject to the provisions hereof, including Section VI; provided, however, that in the event of any conflict between the Plan and the 2003 Plan, the 2003 Plan shall control.
Section XII.Performance Awards
The Committee may establish performance criteria and level of achievement versus such criteria that shall determine the amount of cash or the number of shares of Common Stock, Options, SARs, Restricted Stock or Restricted Stock Units to be granted, retained, vested, issued or paid pursuant to a Performance Award. A Performance Award may be identified as “Performance Share,” “Performance Equity,” “Performance Unit” or other such term as chosen by the Committee. Participants shall have no voting rights and will have no rights to receive dividends or Dividend Equivalents in respect of a Performance Award that is an Option or Stock Appreciation Right or any shares of Common Stock subject to such Option or Stock Appreciation Right until the Participant has become the holder of record of such shares. Shares underlying other Performance Awards shall be entitled to Dividend Equivalents only to the extent provided by the Committee; provided, however, that such Dividend Equivalents will be subject to the same vesting conditions as the underlying Performance Award.
Section XIII.Deferral of Payment
The Committee may, in an Award Agreement or otherwise, provide for the deferred delivery of Common Stock or cash upon vesting or other events with respect to Restricted Stock Units or Other Stock-Based Awards. Notwithstanding any provision of the Plan to the contrary, (i) no Award shall provide for deferral of compensation that does not comply with Section 409A of the Code and (ii) in no event will any election to defer the delivery of Common Stock or any other payment with respect to any Award be allowed if the Committee determines, in its sole discretion, that the deferral would result in the imposition of additional tax under Section 409A of the Code. None of the Company, its Affiliates, the Board, the Committee or any delegates thereof shall have any liability for its actions or otherwise to a Participant or any other party if an Award that is intended to be exempt from or compliant with Section 409A of the Code is not so exempt or compliant.
Section XIV.Conditions and Restrictions Upon Securities Subject to Awards
The Committee may provide that the Common Stock subject to or issued upon exercise or settlement of an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Committee in its discretion may specify prior to the grant, issuance, vesting, exercise or settlement of such Award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales or other transfers by the Participant of any shares of Common Stock issued under an Award, including (a) restrictions under an insider trading policy, a stock ownership policy or pursuant to applicable law, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by the Participant and holders of other Company equity compensation arrangements, (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers and (d) provisions requiring Common Stock be sold on the open market or to the Company in order to satisfy tax withholding or other obligations.
Section XV.Adjustment of and Changes in the Stock
(a)The number and kind of shares of Common Stock available for issuance under this Plan (including under any Awards then outstanding) shall be equitably adjusted by the Committee to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that affects the number or kind of shares of Common Stock outstanding. Such adjustment may be designed to (i) comply with Section 424 of the Code, (ii) treat
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the shares of Common Stock available under the Plan and subject to Awards as if they were all outstanding on the record date for such event or transaction, and/or (iii) increase the number of such shares of Common Stock to reflect a deemed reinvestment in shares of Common Stock of the amount distributed to the Company’s shareholders. The terms of any outstanding Award shall also be equitably adjusted by the Committee as to price, number or kind of shares of Common Stock subject to such Award, vesting, performance criteria, and other terms to reflect the foregoing events, which adjustments need not be uniform as between different Awards or different types of Awards. No fractional shares of Common Stock shall be issued or issuable pursuant to such an adjustment.
(b)In the event there is any other change in the number or kind of outstanding shares of Common Stock (or other securities into which such Common Stock is changed or for which it is exchanged) by reason of a Change in Control, other merger, consolidation or otherwise, then the Committee shall determine the appropriate and equitable adjustment to be effected, which adjustments need not be uniform between different Awards or different types of Awards. In addition, in such event, the Committee may (i) accelerate the time or times at which any Award may be exercised or settled, consistent with and as otherwise permitted under Section 409A of the Code, and/or (ii) provide for cancellation of such accelerated Awards that are not exercised within a time prescribed by the Committee in its sole discretion.
(c)In the event of a Change in Control, the Committee, acting in its sole discretion without the consent or approval of any Participant, may take one or more of the following actions, which may vary among individual Participants and/or among Awards held by any individual Participant:
(i)accelerate vesting or waive any forfeiture conditions;
(ii)accelerate the time of exercisability of an Award so that such Award may be exercised in full or in part for a limited period of time on or before a date specified by the Committee, after which specified date all unexercised Awards and all rights of Participants thereunder shall terminate;
(iii)redeem in whole or in part outstanding Awards by requiring the mandatory surrender to the Company of some or all of the outstanding Awards held by a Participant (irrespective of whether such Awards are then vested or exercisable) as of a date specified by the Committee, in which event the Committee shall thereupon cancel such Awards and pay to each Participant an amount of cash or other consideration per Award equal to the Change in Control Price (less the exercise price with respect to an Option or SAR with an exercise price that is less than or equal to the Change in Control Price) or no consideration if the exercise price of an Option or SAR exceeds the Change in Control Price;
(iv)separately require the mandatory surrender of Dividend Equivalents in exchange for such cash or other consideration (if any) determined by the Committee in is sole discretion; or
(v)make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change in Control or other such event (including the substitution, assumption, or continuation of Awards by the successor company or a parent or subsidiary thereof).
Notwithstanding anything herein to the contrary, in the event of a Change in Control in which the acquiring or surviving company in the transaction (or any parent or subsidiary thereof) does not assume or continue outstanding Awards or issue substitute awards upon the Change in Control in a manner determined by the Committee, in its sole discretion, pursuant to this Section XV(c), all Awards that are not assumed, continued or substituted for shall be treated as follows effective immediately prior to the Change in Control: (A) in the case of an Option or Stock Appreciation Right, the Participant shall have the ability to exercise such Option or Stock Appreciation Right, including any portion of the Option or Stock Appreciation Right not previously exercisable, (B) in the case of any Performance Award, all conditions to the grant, issuance, vesting or settlement of (or any other restrictions applicable to) such Award shall immediately lapse and the Participant shall have the right to receive a payment based on target level achievement or actual performance through a date determined by the Committee, as determined by the Committee, and (C) in the case of outstanding
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Restricted Stock, Restricted Stock Units or Other Stock-Based Awards (other than a Performance Award), all conditions to the grant, issuance, vesting or settlement of (or any other restrictions applicable to) such Award shall immediately lapse. In no event shall any action be taken pursuant to this Section XV(c) that would change the payment or settlement date of an Award in a manner that would result in the imposition of any additional taxes or penalties pursuant to Section 409A of the Code.
(d)For the avoidance of doubt, no provision of the Plan or any Award Agreement shall provide to any Participant a gross-up payment or other compensation for any taxes imposed by Section 4999 of the Code or otherwise.
Section XVI.Transferability
Each Award may not be sold, transferred for value, pledged, assigned, or otherwise alienated or hypothecated by a Participant, and each Option or Stock Appreciation Right shall be exercisable only by the Participant during his or her lifetime. Notwithstanding the foregoing, as permitted by the Committee under procedures it establishes, a Participant may (i) transfer or assign an Award as a gift to any “family member” (as such term is defined for purposes of the Registration Statement on Form S-8) who may be entitled to exercise any assigned Options or Stock Appreciation Rights only during the lifetime of the assigning Participant and (ii) designate one or more beneficiaries with respect to Awards in the event of a Participant’s death who may be entitled to exercise any Options or Stock Appreciation rights as provided by the Committee. In such case, such family member or beneficiary shall not further sell, pledge, transfer, assign or otherwise alienate or hypothecate such Award, and the Participant’s estate will be deemed the beneficiary in the absence of a beneficiary designation.
Section XVII.Compliance with Laws and Regulations
(a)This Plan, the grant, issuance, vesting, exercise and settlement of Awards hereunder, and the obligation of the Company to sell, issue or deliver shares of Common Stock under such Awards, shall be subject to all applicable foreign, federal, state and local laws, governmental and regulatory approvals, and stock exchange rules and regulations. The Company shall not be required to register in a Participant’s name or deliver Common Stock prior to the completion of any registration or qualification of such shares which the Committee shall determine to be necessary or advisable. To the extent the Company is unable to (or the Committee deems it infeasible to) obtain approval from any regulatory body deemed by the Company’s counsel to be advisable to the lawful issuance and sale of any shares of Common Stock hereunder, the Company, its Affiliates, the Board, the Committee and any delegates thereof shall be relieved of any liability with respect to the failure to issue or sell such shares of Common Stock.
(b)In the event an Award is granted to or held by a Participant who is employed or providing services outside the United States, the Committee may (in its sole discretion) modify the provisions of the Plan or such Award (or create sub-plans) as they pertain to such individual to comply with applicable foreign law or to recognize differences in local law, currency or tax policy. The Committee may also impose conditions on the grant, issuance, vesting, exercise or settlement of Awards in order to comply with such foreign law and/or to minimize the Company’s obligations with respect to tax equalization for Participants employed outside their home country.
Section XVIII.Withholding
To the extent required by applicable foreign, federal, state or local law, a Participant shall (and the Committee may) make arrangements acceptable to the Company for the satisfaction of any tax withholding obligations that arise with respect to any Award or the issuance or sale of any shares of Common Stock. The Company shall not be required to recognize any Participant’s rights, issue shares of Common Stock, or recognize the disposition of shares of Common Stock, under an Award until such
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obligations are satisfied. To the extent permitted or required by the Committee, these obligations may or shall be satisfied by (i) the Company withholding cash from any compensation otherwise payable to or for the benefit of a Participant, (ii) the Company withholding a portion of the shares of Common Stock that otherwise would be issued to a Participant under such Award or any other Award held by the Participant, or (iii) the Participant tendering to the Company cash or shares of Common Stock. None of the Company, its Affiliates, the Board, the Committee or any delegates thereof shall be liable to a Participant or any other person as to any tax consequence expected but not realized (or unexpected and realized) due to the grant, issuance, vesting, exercise or settlement of any Award.
Section XIX.Amendment of the Plan or Awards
The Board or its designee may amend, alter, suspend or terminate the Plan at any time and for any reason, and the Committee or its designee may amend or alter any Award Agreement or other document evidencing an Award made under this Plan. Notwithstanding the foregoing and except as provided in Section XV, no such amendment shall, without the approval of the shareholders of the Company:
(a)increase the maximum number of shares of Common Stock for which Awards may be granted under this Plan;
(b)reduce the price at which Options may be granted below the price provided in Section VIII(a);
(c)reprice outstanding Options or SARs as described in Sections VIII(b) and IX(b);
(d)extend the term of this Plan;
(e)change the class of Eligible Persons;
(f)increase the individual maximum limits in Section V(f); or
(g)otherwise amend the Plan in any manner requiring shareholder approval by law or the rules of any stock exchange, market or quotation system on which the Common Stock is traded, listed or quoted.
Except as otherwise provided in any Award Agreement, no amendment or alteration to the Plan, an Award or an Award Agreement shall be made which would materially impair the rights of the Award holder without the Award holder’s consent. Notwithstanding the foregoing, no such consent shall be required to the extent the Committee determines, in its sole discretion and prior to the date of any applicable Change in Control, that such amendment or alteration either (i) is required or advisable in order for the Company, the Plan or the Award to satisfy any law or accounting standard (or to avoid adverse financial accounting consequences) or (ii) is not reasonably likely to significantly diminish the benefits provided under such Award (or has been adequately compensated).
Section XX.Other
(a)Non-Exclusivity of Plan. Neither the adoption of this Plan by the Board nor the submission of this Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as either may deem desirable, including the granting of equity awards otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
(b)Governing Law. This Plan and any Award Agreements or other documents hereunder shall be interpreted and construed in accordance with the laws of the State of New York and applicable federal law, including securities laws. All references in this Plan or an Award Agreement or similar document to laws, rules, regulations, contracts, agreements and instruments refer to (i) all rules, regulations and
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administrative guidance promulgated thereunder, (ii) such items as they may be amended from time to time and (iii) any successor law, rule or regulation of similar effect or applicability.
(c)No Right to Employment, Reelection or Continued Service. Nothing in this Plan or related to any Award shall itself (i) constitute an employment contract with the Company or its Affiliate, (ii) confer upon any Participant any right to continue employment or service for any specified period of time or (iii) limit in any way the right of the Company or its Affiliates to terminate any Participant’s employment, service on the Board or other service at any time and for any reason not prohibited by law. Subject to Sections IV and XIX, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Board without giving rise to any liability on the part of the Company, its Affiliates, the Board, the Committee or any delegates thereof.
(d)Specified Employee Delay. If, upon Separation from Service, a Participant is a “specified employee” within the meaning of Section 409A of the Code, any payment under this Plan that is subject to Section 409A of the Code and would otherwise be paid within six months after the Participant’s Separation from Service will instead be paid in the seventh month following the Participant’s Separation from Service.
(e)Severability. If any provision of the Plan or any Award shall be held unlawful or otherwise invalid or unenforceable in whole or in part, the unlawfulness, invalidity, or unenforceability shall not affect any other provision of the Plan or any Award, each of which shall remain in full force and effect. Likewise, if the Committee determines that any provision would disqualify the Plan or any Award under any law, rule or regulation it deems applicable, such provision shall be construed or deemed amended to conform with the applicable law, rule or regulation, as determined by the Committee.
(f)Unfunded Plan. The Plan is intended to be an unfunded plan, and Participants are general creditors of the Company with respect to their Awards. If the Committee or the Company chooses to set aside funds in a trust or otherwise for the payment of Awards under the Plan, such funds shall at all times be subject to the Company’s creditors.
(g)Interpretation. Headings are used within the Plan, Award Agreements and other related documents solely as a convenience shall not be deemed in any way material or relevant to the construction or interpretation of any provision of the Plan. The use of the word “including” following any general statement in the Plan, Award Agreements or any related documents shall not be construed to limit the scope of such statement, regardless of whether it is accompanied by non-limiting language (such as “without limitation”).
Section XXI.Clawback/Recoupment
If a Participant’s Termination of Employment or Separation from Service is for Cause or if the Committee determines in its sole discretion that a Participant has engaged in conduct that (a) constitutes a breach of an agreement with the Company or its Affiliate, (b) results in (or has the potential to cause) material harm financially, reputationally, or otherwise to the Company or its Affiliate or (c) occurred prior to the Participant’s Termination of Employment or Separation from Service and would give rise to a termination for Cause (regardless of whether such conduct is discovered before, during or after the Participant’s Termination of Employment or Separation from Service), the Participant shall forfeit the Participant’s right to any unvested or unexercised Awards and may be required to repay any cash, Common Stock or other property received pursuant to vested and exercised Awards to the extent recovery is permitted by law. The remedy under this Section XXI is not exclusive and shall not limit any right of the Company under applicable law, including a remedy under (i) Section 10D of the Act, (ii) any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which shares of the Company may be traded, and/or (iii) any Company policy adopted with respect to compensation recoupment.
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In addition, the Committee may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Committee determines necessary or appropriate, including a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of misconduct. No recovery of compensation described in this Section XXI will give rise to a right to resign for “good reason” or a “constructive termination” as such terms (or any similar term) are used in any agreement between any Participant and the Company or its Affiliate.
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Exhibit 10(b)
May 5, 2026 Equity Grant Agreement
GE Aerospace 2022 Long-Term Incentive Plan
GE Aerospace Restricted Stock Unit Grant Agreement (“Grant Agreement”)
For <<Insert Name>>
Grant Date | RSUs Granted | Vesting Date | ||||||
May 5, 2026 | 678 | The earlier of (i) the first anniversary of the Grant Date, and (ii) the next annual meeting of stockholders of the Company following the Grant Date | ||||||
1. Grant. The Governance & Public Affairs Committee (“Committee”) of the Board of Directors (the “Board”) of GE Aerospace (General Electric Company or the “Company”) has granted the above number of Restricted Stock Units (“RSUs”) to the individual named in this Grant Agreement (“Grantee”), subject to the terms of this Grant Agreement. Without limiting any condition of this RSU award, the award is subject to cancellation and forfeiture if the Grantee does not confirm acceptance within 45 days of the Grant Date. Once vested, each RSU (including additional RSUs accrued as Dividend Equivalents (described below)) entitles the Grantee to receive from the Company one share of Common Stock, in accordance with the terms of this Grant Agreement, the GE Aerospace 2022 Long-Term Incentive Plan, as amended and restated (“Plan”), and any rules and procedures adopted by the Committee.
2. Vesting. In order to vest in the RSUs, the Grantee must not incur a Termination of Employment from the Grant Date through the Vesting Date listed above. All unvested RSUs shall be immediately cancelled without payment upon the Grantee’s Termination of Employment for any reason before the Vesting Date, except as specifically provided below:
i. Death or Disability. If the Grantee’s Termination of Employment is as a result of the Grantee’s death or Disability prior to the Vesting Date listed above, then any unvested RSUs shall vest as of such Termination of Employment.
3. Dividend Equivalents. On each dividend payment date, each outstanding RSU will be credited with dividend equivalents in the form of additional RSUs determined by multiplying the number of outstanding RSUs on the related dividend record date by any per share cash
dividends declared by the Company on the Common Stock and dividing the product by the closing market price of the Common Stock as reported on the New York Stock Exchange on such dividend payment date (“Dividend Equivalents”). All Dividend Equivalents shall be subject to the same vesting conditions as the RSUs. Any accumulated and unpaid Dividend Equivalents attributable to a RSU that is cancelled are immediately forfeited upon cancellation and will not be paid.
4. Settlement and Delivery. The Company shall deliver to the Grantee a number of shares of Common Stock equal to the number of vested RSUs, including any accrued Dividend Equivalents, within two weeks of the date any RSUs vest, unless the Grantee has delivered to the Company a deferral election in the form and in accordance with procedures established by the Company consistent with the terms of the GE Aerospace 2024 Non-Employee Director Compensation Plan to defer the receipt of such shares of Common Stock (the “Deferral Election”). In the event the Grantee has made a timely and valid Deferral Election, the Company shall deliver such shares of Common Stock to the Grantee on the payment date(s) specified in the Deferral Election. Delivery shall be electronic, through the brokerage account established by the Company for the Grantee, or in such other medium as is determined by the Company. Any fractional shares of Common Stock deliverable to the Grantee pursuant to the foregoing shall instead be paid in cash. The Grantee is ultimately responsible for any and all applicable taxes. Notwithstanding the foregoing, the date of issuance or delivery of shares of Common Stock may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable listing requirements of any national securities exchange and requirements under any law or regulation applicable to the issuance or transfer of such shares of Common Stock to the extent such postponement is permissible under Section 409A of the Code.
5. Data Security and Privacy.
i. Data Collection, Processing and Usage. Personal data collected, processed and used by the Company in connection with Awards granted under the Plan includes the Grantee’s name, home address, email address, telephone number, date of birth, social insurance number or other identification number, pay, citizenship, any shares of Common Stock or directorships held in the Company, and details of all Awards granted, cancelled, exercised, vested, or outstanding. In granting Awards under the Plan, the Company will collect the Grantee’s personal data for purposes of allocating shares of Common Stock in settlement of the Awards and implementing, administering and managing the Plan. The Company collects, processes and uses the Grantee’s personal data in compliance with GE’s Employment Data Protection Standards and the Uses of Employment Data for GE Entities. The Grantee may exercise rights to access, correction, or restriction or deletion where applicable, by contacting the Head of Executive Compensation.
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ii. Administrative Service Provider. The Company transfers the Grantee’s personal data to UBS Financial Services, which assists with the implementation, administration and management of the Plan (the “Third-Party Administrator”). In the future, the Company may select a different Third-Party Administrator and share the Grantee’s personal data with another company that serves in a similar manner. The Third-Party Administrator will open an account for the Grantee to receive and trade shares of Common Stock acquired under the Plan. The Grantee will be asked to agree on separate terms and data processing practices with the Third-Party Administrator, which is a condition to the Grantee’s ability to participate in the Plan. The privacy policy of the Third-Party Administrator may be reviewed here.
6. Additional Requirements. The Company reserves the right to impose other requirements on the Award, shares of Common Stock acquired pursuant to the Award, and the Grantee’s participation in the Plan to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local law or to facilitate the operation and administration of the Award and the Plan. Without limiting the generality of the foregoing, the Company may require the Grantee to sign any agreements or undertakings that may be necessary to accomplish the foregoing.
7. Alteration/Termination. Under the express terms of this Grant Agreement, the Committee shall have the right at any time in its sole discretion to amend, alter, suspend, discontinue or terminate any RSUs without the consent of the Grantee. Also, the RSUs shall be null and void to the extent the grant of the RSUs or the vesting thereof is prohibited under the laws of the country of residence of the Grantee.
8. Plan Terms and Definitions. Except to the extent that the context clearly provides otherwise, all terms used in this Grant Agreement have the same meaning as given such terms in the Plan. This Grant Agreement is subject to the terms and provisions of the Plan, which are incorporated by reference. In the event of any conflict between the provisions of this Grant Agreement and those of the Plan, the provisions of the Plan shall control.
9. Interpretation and Construction. This Grant Agreement and the Plan shall be construed and interpreted by the Committee, in its sole discretion. Any interpretation or other determination by Committee (including correction of any defect or omission and reconciliation of any inconsistency) shall be binding and conclusive. All determinations regarding enforcement, waiver or modification of the cancellation and rescission and other provisions of this Grant Agreement shall be made in the Committee’s sole discretion. Determinations made under this Grant Agreement and the Plan need not be uniform and may be made selectively among individuals, whether or not such individuals are similarly situated.
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10. Severability. The invalidity or unenforceability of any provision of the Plan or this Grant Agreement will not affect the validity or enforceability of any other provision of the Plan or this Grant Agreement, and each provision of the Plan and this Grant Agreement will be severable and enforceable to the extent permitted by law.
11. Shareholder Rights. The Grantee shall not have any voting or other shareholder rights unless and until shares of Common Stock are actually delivered to the Grantee.
12. No Rights to Continued Service. The grant of the Award described in this Grant Agreement does not give the Grantee any rights in respect of continued services with the Company or any Affiliate.
13. Discretionary Award. Awards under the Plan are granted to directors of the Company in the Committee’s sole discretion. The Award described in this Grant Agreement is a one-time benefit and does not create any contractual or other right to receive other Awards under the Plan or other benefits in lieu thereof. Future grants, if any, will be at the sole discretion of the Committee. The Grantee’s participation in the Plan is voluntary.
14. No Transfer or Assignment. No rights under this Award shall be assignable or transferable by the Grantee, except to the extent expressly permitted by the Plan.
15. Successors and Assigns. The Company may assign any of its rights under this Grant Agreement. This Grant Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Grant Agreement will be binding upon the Grantee and the Grantee’s beneficiaries, executors or administrators.
16. Section 409A. To the extent applicable, this Grant Agreement shall be construed and administered consistently with the intent to comply with or be exempt from the requirements of Section 409A of the Code and any state law of similar effect (i.e., applying the “short-term deferral” rule described in Treas. Reg. § 1.409A-1(b)(4) and/or another exemption). Where the Grant Agreement specifies a window during which a payment may be made, the payment date within such window shall be determined by the Company in its sole discretion.
17. Entire Agreement. This Grant Agreement, the Plan, and any rules and procedures adopted by the Committee contain all of the provisions applicable to the RSUs. No other statements, documents or practices may modify, waive or alter such provisions unless expressly set forth in writing, signed by an authorized officer of the Company and delivered to the Grantee.
By acknowledging this Grant Agreement, the Grantee acknowledges and confirms that the
By acknowledging this Grant Agreement, the Grantee acknowledges and confirms that the
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Grantee has read this Grant Agreement and the Plan, and the Grantee accepts and agrees to the provisions therein.
18. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to this or other Awards under the Plan by electronic means. The Grantee hereby consents to receive such documents electronically and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
Accepted:
Signature Date
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Exhibit 31(a)
Certification Pursuant to
Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as Amended
Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as Amended
I, H. Lawrence Culp, Jr., certify that:
1.I have reviewed this quarterly report on Form 10-Q of General Electric Company;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 16, 2026
| /s/ H. Lawrence Culp, Jr. | ||
| H. Lawrence Culp, Jr. | ||
| Chairman & Chief Executive Officer | ||
Exhibit 31(b)
Certification Pursuant to
Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as Amended
Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as Amended
I, Rahul Ghai, certify that:
1.I have reviewed this quarterly report on Form 10-Q of General Electric Company;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 16, 2026
| /s/ Rahul Ghai | ||
| Rahul Ghai | ||
| Chief Financial Officer | ||
Exhibit 32
Certification Pursuant to
18 U.S.C. Section 1350
18 U.S.C. Section 1350
In connection with the Quarterly Report of General Electric Company (the “registrant”) on Form 10-Q for the period ended June 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “report”), we, H. Lawrence Culp, Jr. and Rahul Ghai, Chief Executive Officer and Chief Financial Officer, respectively, of the registrant, certify, pursuant to 18 U.S.C. § 1350, that to our knowledge:
(1)The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
July 16, 2026
| /s/ H. Lawrence Culp, Jr. | ||
| H. Lawrence Culp, Jr. | ||
| Chairman & Chief Executive Officer | ||
| /s/ Rahul Ghai | ||
| Rahul Ghai | ||
| Chief Financial Officer | ||