# GENERAL ELECTRIC CO (GE) FY 2025 MD&A

Verbatim Item 7 Management's Discussion and Analysis from GENERAL ELECTRIC CO's 10-K for fiscal year 2025.

SEC filing source: https://www.sec.gov/Archives/edgar/data/40545/000004054526000008/ge-20251231.htm
Accession: 0000040545-26-000008
Filing date: 2026-01-29
Report date: 2025-12-31
Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Company profile: /company/GE/
All MD&A years: /company/GE/mda/
Previous year: /company/GE/mda/fy2022/ (FY 2022)

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. Results for the years ended December 31, 2025 versus 2024 are discussed within this report. Refer to our Annual Report on Form 10-K for the year ended December 31, 2024 for discussions of results for the years ended December 31, 2024 versus 2023. The MD&A should be read in conjunction with the Financial Statements and Notes to the consolidated financial statements.

2025 FORM 10-K 7

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.

Beginning in the first quarter of 2025, we changed the terminology used to report our GAAP earnings from “Earnings” to “Net income” and our non-GAAP earnings from "Adjusted earnings" to "Adjusted net income." The change in terminology does not impact the amounts reported in the financial statements.

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 also 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 and Defense & Propulsion Technologies below for additional detail about these dynamics for our commercial and defense businesses, respectively.

Global material availability and supplier delivery performance continue to cause disruptions and have impacted our production and delivery of equipment and services to our customers. We are investing in our manufacturing facilities, overhaul facilities and our supply chain to increase production and strengthen yield in order to improve delivery to our customers. We continue to partner with our suppliers to improve material input, and work with our customers to calibrate future production rates. We are leveraging FLIGHT DECK and partnering with suppliers to improve material input 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 invested $1 billion in U.S manufacturing and hired 5,000 U.S workers in 2025. At the same time, we support promoting free and fair trade that ensures the continued strength of the U.S aerospace industry.

Additionally, we are expanding capacity across our global maintenance, repair and overhaul (MRO) network to support aftermarket demand. We are investing $1 billion to increase our MRO capacity, including $500 million to increase LEAP MRO capacity by expanding several sites.

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 will result in additional cost for us and our suppliers. We are optimizing operations and leveraging existing programs to reduce the impact from tariffs. In late 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. Additionally, we are taking measures to control cost and implementing pricing actions to primarily mitigate the remaining impact. We are continuing to monitor the tariff environment, including relevant U.S. Supreme Court rulings.

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

CONSOLIDATED RESULTS

[[GREPCENT_TABLE]]
[["REVENUE","","","","2025","2024","2023"],["Equipment revenue","","","","$","12,159","","$","10,274","","$","9,318"],["Services revenue","","","","30,163","","24,847","","22,641"],["Insurance revenue","","","","3,533","","3,581","","3,389"],["Total revenue","","","","$","45,855","","$","38,702","","$","35,348"]]
[[/GREPCENT_TABLE]]

For the year ended December 31, 2025, total revenue increased $7.2 billion, or 18%, compared to the year ended December 31, 2024. Equipment revenue increased, driven by increased engine deliveries and price. Services revenue increased, primarily due to increased internal shop visit volume and workscopes and higher spare parts volume.

[[GREPCENT_TABLE]]
[["NET INCOME (LOSS) AND EARNINGS (LOSS) PER SHARE (EPS)"],["(Per-share in dollars and diluted)","","","","2025","2024","2023"],["Net income (loss) from continuing operations attributable to common shareholders","","","","$","8,601","","$","6,670","","$","9,154"],["Continuing EPS","","","","$","8.05","","$","6.09","","$","8.33"]]
[[/GREPCENT_TABLE]]

8 2025 FORM 10-K

For the year ended December 31, 2025, net income from continuing operations increased $1.9 billion compared to the year ended December 31, 2024, driven by an increase in segment profit of $2.0 billion, a decrease in in restructuring and other charges of $0.6 billion, a decrease in separation costs of $0.3 billion, a decrease in goodwill impairment losses of $0.3 billion and a decrease in interest and other financial charges of $0.1 billion. These increases were partially offset by an increase in provision for income taxes of $0.4 billion, due to higher net income before taxes, a decrease in gains on sales of business interests of $0.4 billion, a decrease in gains on retained and sold ownership interests and other equity securities of $0.2 billion, and an increase in Adjusted Corporate & Other operating costs* of $0.2 billion. Adjusted net income* was $6.8 billion, an increase of $1.8 billion, due to an increase in segment profit of $2.0 billion, partially offset by an increase in Adjusted Corporate & Other operating costs* of $0.2 billion.

Profit was $10.0 billion, an increase of $2.4 billion. Profit margin was 21.8%, an increase of 210 basis points. Operating profit* was $9.1 billion, an increase of $1.8 billion. Operating profit margin* was 21.4%, an increase of 70 basis points. Adjusted EPS* was $6.37, an increase of 38%.

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 25 for further information.

[[GREPCENT_TABLE]]
[["RPO","December 31, 2025","December 31, 2024","December 31, 2023"],["Equipment","$","27,534","","$","22,509","","$","16,247"],["Services","163,029","","149,127","","137,756"],["Total RPO","$","190,564","","$","171,635","","$","154,003"]]
[[/GREPCENT_TABLE]]

As of December 31, 2025, RPO increased $18.9 billion, or 11%, from December 31, 2024, primarily at Commercial Engines & Services, as a result of contract modifications and engines contracted under long-term service agreements that have now been put into service and from equipment orders outpacing revenue recognized, and at Defense & Propulsion Technologies, driven by Defense & Systems equipment orders outpacing revenue recognized.

SEGMENT OPERATIONS

COMMERCIAL ENGINES & SERVICES. In 2025, demand for commercial air travel grew with departures up 3%. We are in frequent communication with our airline, airframe and MRO customers about the outlook for commercial air travel, new aircraft production, fleet retirements and after-market services, including shop visit and spare parts demand.

We secured a series of landmark engine commitments in 2025 from leading global carriers. These wins span GE9X, GEnx and LEAP programs and include major selections by Qatar Airways, Emirates International Airlines Group, ANA Holdings, Malaysia Aviation Group, Korean Air, Cathay Pacific and Pegasus. Collectively, these agreements reinforce our leadership on next-generation widebody and narrowbody platforms and provide strong multi-year visibility across equipment and services. We believe these awards underscore the competitiveness of our technology and the durability of airline demand.

Total engineering investments, both company and partner-funded, increased compared to prior year. Internal shop visit revenue grew in 2025 compared to 2024 and total engine deliveries and LEAP engine deliveries increased primarily due to improved material supply. We are investing in our manufacturing and overhaul facilities and are deploying engineering and supply chain resources to increase production, expand capacity and strengthen yield.

[[GREPCENT_TABLE]]
[["Sales in units, except where noted","","","","2025","2024","2023"],["Commercial Engines","","","","2,386","","1,911","2,075"],["LEAP Engines(a)","","","","1,802","","1,407","1,570"],["Internal shop visit revenue growth %","","","","24","%","19","%","27","%"],["(a) LEAP engines, which are in a significant production ramp, are a subset of Commercial Engines."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["SEGMENT REVENUE AND PROFIT","","","","","","2025","","2024","","2023"],["Equipment","","","","","","$","8,304","","","$","7,106","","","$","6,169"],["Services","","","","","","25,010","","","19,775","","","17,686"],["Total segment revenue","","","","","","$","33,314","","","$","26,881","","","$","23,855"],["Segment profit","","","","","","$","8,861","","","$","7,055","","","$","5,643"],["Segment profit margin","","","","","","26.6","","%","26.2","","%","23.7","","%"]]
[[/GREPCENT_TABLE]]

For the year ended December 31, 2025, revenue was up $6.4 billion, or 24%, and profit was up $1.8 billion, or 26%, compared to the year ended December 31, 2024.

Revenue increased due to increased spare parts volume, internal shop visit volume and workscopes, increased engine deliveries and pricing.

Profit increased primarily due to increased spare parts volume, internal shop visit volume and workscopes and improved pricing. These increases were partially offset by the impact of higher install engine deliveries, inflation, higher growth investment and an unfavorable change in estimated profitability of our long-term service agreements, primarily from the estimated impact from tariffs.

2025 FORM 10-K 9

[[GREPCENT_TABLE]]
[["RPO","December 31, 2025","December 31, 2024","December 31, 2023"],["Equipment","$","13,754","","$","11,462","","$","6,508"],["Services","156,068","","142,182","","131,028"],["Total RPO","$","169,822","","$","153,644","","$","137,535"]]
[[/GREPCENT_TABLE]]

As of December 31, 2025, RPO increased $16.2 billion, or 11%, from December 31, 2024, as a result of contract modifications, engines contracted under long-term service agreements that have now been put into service and from equipment orders outpacing revenue recognized.

DEFENSE & PROPULSION TECHNOLOGIES. Our results in 2025 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.

In 2025, we announced an Indefinite Delivery/Indefinite Quantity (IDIQ) contract from the U.S. Air Force valued up to $5 billion to support foreign military sales for F110-GE-129 engines, which power F-15 and F-16 aircraft operated by allied nations worldwide. In addition, we received an order from Hindustan Aeronautics (HAL) valued at $1.6 billion for F404-GE-IN20 engines.

[[GREPCENT_TABLE]]
[["Sales in units","","","","2025","2024","2023"],["Defense engines","","","","635","","490","","556"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["SEGMENT REVENUE AND PROFIT","","","","","","2025","","2024","","2023"],["Defense & Systems (D&S)","","","","","","$","6,574","","","$","6,109","","","$","5,927"],["Propulsion & Additive Technologies (P&AT)","","","","","","3,980","","","3,370","","","3,034"],["Total segment revenue","","","","","","$","10,554","","","$","9,478","","","$","8,961"],["Equipment","","","","","","$","5,128","","","$","4,208","","","$","4,000"],["Services","","","","","","5,426","","","5,270","","","4,961"],["Total segment revenue","","","","","","$","10,554","","","$","9,478","","","$","8,961"],["Segment profit","","","","","","$","1,296","","","$","1,061","","","$","908"],["Segment profit margin","","","","","","12.3","","%","11.2","","%","10.1","","%"]]
[[/GREPCENT_TABLE]]

For the year ended December 31, 2025, revenue was up $1.1 billion, or 11%, and profit was up $0.2 billion, or 22%, compared to the year ended December 31, 2024.

D&S revenue increased primarily due to increased engine deliveries and aircraft systems product growth, price and mix. P&AT revenue increased primarily due to volume and price.

Profit increased primarily due to higher volume in Defense and Avio, aircraft systems product growth, customer mix and price, partially offset by incremental investments to support next-generation products and inflation.

[[GREPCENT_TABLE]]
[["RPO","December 31, 2025","December 31, 2024","December 31, 2023"],["Equipment","$","13,780","","$","11,046","","$","9,739"],["Services","6,962","","6,944","","6,729"],["Total RPO","$","20,742","","$","17,991","","$","16,468"]]
[[/GREPCENT_TABLE]]

As of December 31, 2025, RPO increased $2.8 billion, or 15%, from December 31, 2024, primarily due to increases in equipment from orders outpacing revenue recognized.

CORPORATE & OTHER. Corporate & Other revenue include our run-off insurance operations revenue and the elimination of intersegment activities. Corporate & Other operating profit includes Corporate functions and operations costs, certain costs of our principal retirement plans, significant, higher-cost restructuring programs, separation costs, 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.

10 2025 FORM 10-K

[[GREPCENT_TABLE]]
[["REVENUE AND OPERATING PROFIT (COST)","","","","2025","2024","2023"],["Insurance revenue (Note 12)","","","","$","3,533","","$","3,581","","$","3,389"],["Eliminations and other","","","","(1,546)","","(1,239)","","(857)"],["Corporate & Other revenue","","","","$","1,987","","$","2,343","","$","2,532"],["Gains (losses) on purchases and sales of business interests","","","","5","","398","","(104)"],["Gains (losses) on retained and sold ownership interests and other equity securities (Note 19)","","","","312","","532","","5,776"],["Restructuring and other charges (Note 20)(a)","","","","87","","(525)","","(246)"],["Separation costs (Note 20)","","","","(202)","","(492)","","(692)"],["Insurance profit (loss) (Note 12)","","","","992","","1,022","","332"],["U.S. tax equity profit (loss)","","","","(189)","","(160)","","(132)"],["Goodwill impairments (Note 7)","","","","\u2014","","(251)","","\u2014"],["Adjusted Corporate & Other operating costs (Non-GAAP)","","","","(1,102)","","(864)","","(990)"],["Corporate & Other operating profit (cost) (GAAP)","","","","$","(96)","","$","(339)","","$","3,943"],["Less: gains (losses), impairments, Insurance, and restructuring & other","","","","1,006","","524","","4,933"],["Adjusted Corporate & Other operating costs (Non-GAAP)","","","","$","(1,102)","","$","(864)","","$","(990)"],["Corporate & Other profit (costs)","","","","(568)","","(396)","","(623)"],["Eliminations","","","","(534)","","(467)","","(367)"],["Adjusted Corporate & Other operating costs (Non-GAAP)","","","","$","(1,102)","","$","(864)","","$","(990)"],["(a) During the fourth quarter of 2025, we substantially completed separation-related restructuring activity. Based on the hiring needs and information technology capacity demands of the three public companies, includes a pre-tax benefit of $164 million for the year ended December 31, 2025. See Note 20 for further information. Additionally, included costs of $363 million for the settlement of the Sjunde AP-Fonden shareholder lawsuit for the year ended December 31, 2024. See Note 24 for further information."]]
[[/GREPCENT_TABLE]]

Adjusted Corporate & Other operating costs* excludes gains (losses) on purchases and sales of business interests, gains (losses) on retained and sold ownership interests and other equity securities, higher-cost restructuring programs, separation costs, our run-off insurance operations, U.S. tax equity profit (loss) and goodwill impairments. 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 year ended, December 31, 2025, revenue was down $0.4 billion compared to the year ended December 31, 2024, primarily due to higher intercompany eliminations. Corporate & Other operating cost decreased by $0.2 billion primarily due to $0.4 billion of lower gains on purchases and sales of business interests, primarily related to the sale of our non-core licensing business in 2024, $0.2 billion of lower gains on retained and sold ownership interests and other equity securities, primarily related to higher prior year gains on our former GE HealthCare investment when compared to current year gains on our investment in BETA Technologies, Inc., and $0.2 billion of higher adjusted Corporate and Other operating costs partially offset by $0.6 billion of lower restructuring and other charges, $0.3 billion of lower of separation costs, and $0.3 billion of lower of goodwill Impairments, related to our Colibrium Additive reporting unit.

Adjusted Corporate & Other operating costs* increased by $0.2 billion primarily due to lower bank interest.

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. See Note 20 for further information on restructuring and separation costs.

INTEREST AND OTHER FINANCIAL CHARGES were $0.8 billion, $1.0 billion and $1.0 billion for the years ended December 31, 2025, 2024 and 2023, respectively. The decrease was primarily due to lower interest on tax deficiencies. The primary components of interest and other financial charges are interest on short- 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.

[[GREPCENT_TABLE]]
[["INCOME TAXES","2025","2024","2023"],["Effective tax rate (ETR)","14.1","%","12.6","%","9.5","%"],["Provision (benefit) for income taxes","$","1,405","","$","962","","$","994"],["Cash income taxes paid(a)","585","","852","","994"]]
[[/GREPCENT_TABLE]]

(a) Includes taxes paid/(refunds) related to discontinued operations. The decrease from 2025 compared to 2024 is primarily related to a 2025 decrease in discontinued operations.

*Non-GAAP Financial Measure

2025 FORM 10-K 11

For the year ended December 31, 2025, the effective income tax rate was 14.1% compared to 12.6% for the year ended December 31, 2024. See Note 15 for further information. The tax rates for both 2025 and 2024 reflect a tax provision on pre-tax income.

The provision (benefit) for income taxes was $1.4 billion and $1.0 billion for the years ended December 31, 2025 and 2024, respectively. The increase in the tax provision was primarily due to higher net income before taxes, a decrease in tax benefits associated with separation activities, lower non-taxable gains on our retained and sold ownership interests, and an increase in global minimum tax (Pillar 2), partially offset by higher tax benefits on global activities (reduced for the impact of the One Big Beautiful Bill Act (OBBBA)), an increase in business tax credits, tax benefits associated with realized foreign tax credits and favorable audit resolutions.

For the year ended December 31, 2025, the adjusted effective income tax rate* was 17.3% compared to 20.1% for the year ended December 31, 2024. The decrease was primarily due to higher tax benefits on global activities, higher U.S. business tax credits and favorable audit resolutions, partially offset by global minimum taxes (Pillar 2). The adjusted provision for income taxes* was $1.4 billion and $1.3 billion for the years ended December 31, 2025 and 2024, respectively. The increase was primarily due to higher adjusted income before taxes* and an increase in global minimum tax (Pillar 2), partially offset by higher tax benefit on global activities (reduced for the impact of the OBBBA), an increase of business tax credits and favorable audit resolutions.

The rate of tax on our profitable non-U.S. earnings is below the U.S. statutory rate because we have significant business operations subject to tax in countries where the tax rate on that income is lower than the U.S. statutory rate. Most of these earnings have been reinvested in active non-U.S. business operations. Due to U.S. tax reform, substantially all of our unrepatriated earnings have been subject to U.S. tax and accordingly we expect to have the ability to repatriate available non-U.S. cash without significant additional tax cost. We reassess reinvestment of earnings on an ongoing basis.

A substantial portion of the benefit for lower-taxed non-U.S. earnings related to business operations subject to tax in countries where the tax on that income is lower than the U.S. statutory rate is derived from our operations located in Singapore, where the earnings were primarily taxed at a rate of 8.5% in 2025, 2024 and 2023, respectively. In 2025, Singapore adopted a qualified domestic minimum top-up tax (QDMTT) of 15%, consistent with OECD (Organisation for Economic Co-operation and Development) Pillar 2 guidelines, which largely reduces the benefit from the lower tax rate in Singapore.

The U.S. has enacted a minimum tax on foreign earnings (global intangible low taxed income) as part of the Tax Cuts and Jobs Act of 2017 (U.S. tax reform). We pay significant foreign tax which substantially reduces the U.S. tax liability on these earnings. In addition, the rate of tax on non-U.S. operations has increased from losses in foreign jurisdictions where it is not likely that such losses can be utilized and therefore no tax benefit is provided for those losses. Non-U.S. losses also limit our ability to claim U.S. foreign tax credits on certain operations, increasing the rate of tax on non-U.S. operations. Overall, these factors reduce the benefit associated with our non-U.S. operations.

A more detailed analysis of differences between the U.S. federal statutory rate and the consolidated effective rate, as well as other information about our income tax provisions, is provided in Critical Accounting Estimates and Note 15.

DISCONTINUED OPERATIONS Our former GE Vernova and GE HealthCare businesses, our mortgage portfolio in Poland (Bank BPH) and other trailing assets and liabilities associated with prior dispositions are included in discontinued operations. Results of operations, financial position and cash flows for these businesses are reported as discontinued operations for all periods presented and the notes to the financial statements have been adjusted on a retrospective basis. 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 and cash equivalents, 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. Total cash, cash equivalents and restricted cash was $12.4 billion at December 31, 2025, of which $9.9 billion was held in the U.S. and $2.5 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 is 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.

*Non-GAAP Financial Measure

12 2025 FORM 10-K

Cash, cash equivalents and restricted cash at December 31, 2025 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 $1.3 billion of cash in our run-off insurance operations, which is classified as All other assets in the Statement of Financial Position, and $1.1 billion of cash in our discontinued operations held by Bank BPH (see Note 2).

In March 2024, the Company announced that the Board of Directors had authorized the repurchase of up to $15.0 billion of our common stock. Under this program, shares may be repurchased on the open market, via various strategies, including plans complying with rules 10b5-1 and 10b-18 as well as plans using accelerated share repurchases. In 2025, we repurchased 29.6 million shares for $7.4 billion, including repurchases of 20.1 million shares for $5.2 billion using accelerated stock repurchases as a mechanism to achieve planned repurchase volumes within a quarter during closed windows. We have repurchased $12.3 billion in total under this authorization.

BORROWINGS. Consolidated total borrowings were $20.5 billion and $19.3 billion at December 31, 2025 and December 31, 2024, respectively, an increase of $1.2 billion, primarily due to new debt issued of $2.0 billion, and currency exchange of $0.9 billion, partially offset by maturities of $1.8 billion. The Company also holds a five-year unsecured revolving credit facility maturing in 2029 in an aggregate committed amount of $3.0 billion and had zero outstanding at December 31, 2025.

In July 2025, GE Aerospace issued a total of $2.0 billion in aggregate principal amount of senior unsecured debt, comprised of $1.0 billion of 4.3% senior notes due 2030, and $1.0 billion of 4.9% senior notes due 2036 (see Note 10).

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 14, 2025, Moody's upgraded our long-term rating from Baa1 to A3 and maintained our positive outlook. On March 25, 2025, S&P upgraded our long-term rating from BBB+ to A- and maintained stable outlook. Our credit ratings as of the date of this filing are set forth in the table below.

[[GREPCENT_TABLE]]
[["","Moody's","S&P"],["Outlook","Positive","Stable"],["Short term","P-2","A-2"],["Long term","A3","A-"]]
[[/GREPCENT_TABLE]]

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.

Substantially all of the Company's debt agreements in place at December 31, 2025 do not contain material credit rating covenants. Our unused back-up revolving syndicated credit facility contains a customary net debt-to-EBITDA financial covenant, which we satisfied at December 31, 2025.

FOREIGN EXCHANGE AND INTEREST RATE RISKS. 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 22 for further information about our risk exposures, our use of derivatives, and the effects of this activity on our financial statements.

Exchange rate and interest rate risks are managed with a variety of techniques, including selective use of derivatives. We apply policies to manage each of these risks, including prohibitions on speculative activities. It is our policy to minimize currency exposures by conducting operations in the U.S. dollar if possible or by utilizing the protection of hedge strategies. To assess exposure to interest rate risk, we apply a +/- 100 basis points change in interest rates and keep that in place for the next 12 months. To assess exposure to currency risk of assets and liabilities denominated in other than their functional currencies, we evaluate the effect of a 10% shift in exchange rates against the U.S. dollar (USD). The analyses indicated that our 2025 consolidated net income would be impacted by $0.1 billion for interest rate risk and insignificantly for foreign exchange risk.

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 equipment or services sales. The most significant operating use of cash is to pay our suppliers, employees, tax authorities and postretirement plans. GE Aerospace measures itself on a free cash flow* basis. This metric includes CFOA plus investments in property, plant and equipment and internal-use software and cash received from dispositions of property, plant and equipment.

Cash from operating activities was $8.5 billion in 2025, an increase of $2.7 billion compared to 2024, primarily due to: an increase in net income (after adjusting for depreciation of property, plant and equipment, amortization of intangible assets, goodwill impairments and non-cash (gains) losses related to our retained and sold ownership interests and other equity securities) driven by all segments, increases in sales discount and allowances and All other operating activities, partially offset by working capital growth and higher income tax payments. The components of All other operating activities were as follows:

2025 FORM 10-K 13

[[GREPCENT_TABLE]]
[["","Years ended December 31","2025","2024"],["","Increase (decrease) in employee benefit liabilities","$","746","","$","356"],["","Net restructuring and other charges/(cash expenditures)","(144)","","(112)"],["","(Gains) Losses on purchases and sales of business interests","(6)","","(399)"],["","Net interest and other financial charges/(cash paid)","(39)","","31"],["","Other deferred assets","(88)","","(84)"],["","Other","(334)","","(118)"],["","All other operating activities","$","136","","$","(326)"]]
[[/GREPCENT_TABLE]]

The cash impacts from changes in working capital were $(1.0) billion, a decrease of $0.6 billion compared to 2024, due to: current receivables of $(1.4) billion, driven by higher volume partially offset by higher collections; inventories, including deferred inventory, of $(0.5) billion, driven by higher material purchases; current contract assets, contract liabilities and current deferred income of $(0.4) billion, driven by higher revenue recognition, partially offset by billings and net unfavorable changes in estimated profitability on long-term service contracts mainly related to tariffs; progress collections of $0.3 billion, driven by higher collections partially offset by higher liquidations; and accounts payable of $1.3 billion, driven by higher volume for material purchases.

Cash used for investing activities was $0.8 billion in 2025, an increase of $0.2 billion compared to 2024, primarily due to: a decrease in proceeds from the dispositions of our ownership interests in GE HealthCare of $5.3 billion and from the dispositions of our non-core licensing business and Electric Insurance Company of $0.5 billion in 2024, and an increase in cash paid for business acquisitions of $0.2 billion; partially offset by higher cash received related to net settlements between continuing operations and businesses in discontinued operations of $3.3 billion, primarily related to the establishment of the opening cash balances for our former GE Vernova business in 2024 (a component of All other investing activities), higher net dispositions of insurance investment securities of $1.4 billion and AerCap senior note proceeds of $1.0 billion received in the fourth quarter of 2025. Cash used for additions to property, plant and equipment and internal-use software net of dispositions, which are components of free cash flow*, was $1.2 billion and $0.9 billion for the years ended December 31, 2025 and 2024, respectively.

Cash used for financing activities was $8.7 billion in 2025, an increase of $2.1 billion compared to 2024, primarily due to: an increase in treasury stock repurchases of $1.7 billion, a decrease in cash received of $1.1 billion from stock option exercises (a component of All other financing activities) and higher dividends paid to shareholders of $0.4 billion, partially offset by net debt issuance of $1.0 billion, including new long-term debt issuance of $2.0 billion in 2025.

Free cash flow* (FCF) was $7.7 billion and $6.2 billion for the years ended December 31, 2025 and 2024, respectively. FCF* increased primarily due to higher net income, higher sales discount and allowances and higher All other operating activities, partially offset by higher working capital growth, higher income tax payments and higher net investments in property, plant and equipment and internal-use software, after adjusting for a decrease in separation cash and Corporate & Other restructuring cash expenditures, which are excluded from FCF*.

CASH FLOWS FROM DISCONTINUED OPERATIONS

Cash used for operating activities of discontinued operations decreased $1.1 billion for the year ended December 31, 2025 compared to 2024, primarily driven by working capital cash usage and cash paid for income taxes at our former GE Vernova

business in 2024.

Cash used for investing activities of discontinued operations decreased $0.7 billion for the year ended December 31, 2025 compared to 2024, primarily driven by a reduction of cash and cash equivalents of $4.2 billion due to the separation of our former GE Vernova business in 2024, partially offset by higher cash paid of $3.3 billion from net settlements between our discontinued operations and businesses in continuing operations, primarily related to establishment of the opening cash balance for our former GE Vernova business in 2024.

Cash used for financing activities of discontinued operations decreased $0.1 billion for the year ended December 31, 2025 compared to 2024, primarily driven by net debt repayments in 2024 by our former GE Vernova business.

CRITICAL ACCOUNTING ESTIMATES. Accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to an understanding of our financial statements because they involve significant judgments and uncertainties. Actual results in these areas could differ from management's estimates. See Note 1 for further information on our most significant accounting policies.

REVENUE RECOGNITION ON LONG-TERM SERVICES AGREEMENTS. We enter into long-term services agreements with our customers, predominantly within the CES segment, that require us to maintain the customers’ assets over the contract terms, which generally range from 10 to 25 years. Contract modifications that extend or revise contracts are not uncommon. We recognize revenue as we perform under the arrangements using the percentage of completion method which is based on our costs incurred to date relative to our estimate of total expected costs. This requires us to make estimates of customer payments expected to be received over the current contract term as well as the costs to perform required maintenance services.

14 2025 FORM 10-K

Our rights to consideration for these arrangements are generally based on the utilization of the asset (e.g., per hour of usage) and contractual payment terms are based on either periodic billing schedules or upon the occurrence of a maintenance event, such as an overhaul. As a result, a significant estimate in determining expected revenue of a contract is estimating how customers will utilize their assets over the term of the agreement. The estimate of utilization, which can change over the contract life, impacts both the amount of customer payments we expect to receive and our estimate of future contract costs. Customers' asset utilization will influence the timing and extent of overhauls and other service events over the life of the contract. We generally use a combination of both historical utilization trends as well as forward-looking information such as market conditions and potential asset retirements in developing our revenue estimates.

To develop our cost estimates, we consider the timing and extent of future maintenance and overhaul events, including the frequency of maintenance events and cost of labor, spare parts and other resources required to perform the maintenance. In developing our cost estimates, we utilize a combination of our historical cost experience and expected cost improvements. Cost improvements are only included in future cost estimates after savings have been observed in actual results or proven effective through an extensive regulatory or engineering approval process.

We routinely review estimates and revise them to adjust for changes in outlook. Changes in estimates are recognized on a cumulative catch-up basis with an adjustment to revenue in the current period. These revisions are based on objectively verifiable information that is available at the time of the review. Contract modifications that change the rights and obligations, as well as the nature, timing and extent of future cash flows, are evaluated for potential price concessions, contract asset impairments and significant financing to determine if adjustments of net income are required before effectively accounting for a modified contract as a new contract.

We regularly assess expected billings adjustments and customer credit risk inherent in the carrying amounts of receivables and contract assets, including the risk that contractual penalties may not be sufficient to offset our accumulated investment in the event of customer termination. We gain insight into future utilization and cost trends, as well as credit risk, through our knowledge of the installed base of equipment and fleet management strategies through close interaction with our customers that comes with supplying critical services and parts over extended periods. Revisions may affect a long-term services agreement’s total estimated profitability resulting in an adjustment of net income.

On December 31, 2025, our long-term service agreements net liability balance of $7.2 billion represents approximately 4.1% of our total estimated life of contract billings of $174 billion. Our contracts (on average) are approximately 19.2% complete based on costs incurred to date and our estimate of future costs. Revisions to our estimates of future billings or costs that increase or decrease total estimated contract profitability by one percentage point would increase or decrease the long-term service agreements balance by $0.4 billion. Billings collected on these contracts were $9.9 billion and $8.6 billion during the years ended December 31, 2025 and 2024, respectively. See Notes 1 and 8 for further information.

NONRECURRING ENGINEERING COSTS. We incur contract fulfillment costs for engineering and development of products directly related to existing or anticipated contracts with customers, primarily in our Defense & Propulsion Technologies segment. Contract fulfillment costs are capitalized to the extent recoverable from the customer contract, and subsequently amortized as the products are delivered to the customer. We periodically assess the recoverability of capitalized contract fulfillment costs, which requires significant judgment. Specifically, we estimate program volumes, contract revenue based on negotiated prices, and product costs based on input costs, inflation and productivity. See Note 8 for further information.

IMPAIRMENT OF GOODWILL AND OTHER IDENTIFIED INTANGIBLE ASSETS. Goodwill is subject to annual, or more frequent, if necessary, impairment testing. In the impairment test, the fair value is estimated utilizing a discounted cash flow approach utilizing cash flow forecasts, including strategic and annual operating plans, adjusted for terminal value assumptions, or a market approach, when available and appropriate, utilizing market observable pricing multiples of similar businesses and comparable transactions, or both. These impairment tests involve the use of accounting estimates and assumptions, and changes to those assumptions could materially impact our financial condition or operating performance if actual results differ from such estimates and assumptions. To address this uncertainty, we perform sensitivity analyses on key estimates and assumptions. Once the fair value is determined, if the carrying amount exceeds the fair value, it is impaired. In the fourth quarter of each year, we perform our annual impairment test. See Note 7 for further information.

We review identified intangible assets with defined useful lives and subject to amortization for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment loss has occurred requires the use of our internal forecast to estimate future cash flows and the useful life over which these cash flows will occur. To determine fair value, we use our internal cash flow estimates discounted at an appropriate discount rate. See Notes 1 and 7 for further information.

INSURANCE AND INVESTMENT CONTRACTS. Refer to the Other Items - Insurance section for further discussion of the accounting estimates and assumptions in our insurance reserves and their sensitivity to change. See Notes 1 and 12 for further information.

PENSION ASSUMPTIONS. Refer to Note 13 for our accounting estimates and assumptions related to our postretirement benefit plans.

2025 FORM 10-K 15

INCOME TAXES. Our annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining our tax expense and in evaluating our tax positions, including evaluating uncertainties. We review our tax positions quarterly and adjust the balances as new information becomes available. Our income tax rate is significantly affected by the tax rate on our global operations. In addition to local country tax laws and regulations, this rate can depend on the extent to which earnings are indefinitely reinvested outside the U.S. Historically, U.S. taxes were due upon the repatriation of foreign net income. Due to the enactment of U.S. tax reform in 2017, substantially all of our unrepatriated earnings has been subject to U.S. tax and accordingly we expect to have the ability to repatriate available non-U.S. cash without significant additional tax cost. Indefinite reinvestment is determined by management’s judgment about and intentions concerning the future operations of the Company. Most of these earnings have been reinvested in active non-U.S. business operations. We reassess reinvestment of earnings on an ongoing basis.

We evaluate the recoverability of deferred income tax assets by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies, which rely on reasonable estimates. We use our historical experience and our short- and long-range business forecasts to provide insight. Further, our global and diversified business portfolio gives us the opportunity to employ various prudent and feasible tax planning strategies to facilitate the recoverability of future deductions. Amounts recorded for deferred tax assets related to non-U.S. net operating losses, net of valuation allowances, were $0.7 billion and $0.5 billion at December 31, 2025 and 2024, respectively. Of this, an insignificant amount at December 31, 2025 and 2024 respectively, were associated with losses reported in discontinued operations. See Other Consolidated Information – Income Taxes section and Notes 1 and 15 for further information.

LOSS CONTINGENCIES. Loss contingencies are existing conditions, situations or circumstances involving uncertainty as to possible loss that will ultimately be resolved when future events occur or fail to occur. Such contingencies include, but are not limited to, environmental, health and safety matters, litigation, regulatory investigations and proceedings, government contracts, employee benefit plans, product quality guarantees and losses resulting from other events and developments. In particular, the design, development, production and support of aerospace products is inherently complex and subject to risk. Technical issues associated with these products may arise in the normal course and may result in financial impacts, including increased warranty provisions, customer contract settlements, and changes in contract performance estimates. When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss. When there appears to be a range of possible costs with equal likelihood, liabilities are based on the low-end of such range. However, the likelihood of a loss with respect to a particular contingency is often difficult to predict and determining a meaningful estimate of the loss or a range of loss may not be practicable based on the information available and the potential effect of future events and negotiations with or decisions by third parties that will determine the ultimate resolution of the contingency. Moreover, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated to determine both the likelihood of potential loss and whether it is possible to reasonably estimate a range of possible loss. Disclosure is provided for material loss contingencies when a loss is probable but a reasonable estimate cannot be made, and when it is reasonably possible that a loss will be incurred or the amount of a loss will exceed the recorded provision. We regularly review contingencies to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made. See Note 24 for further information.

OTHER ITEMS

INSURANCE. Our run-off insurance operations include Employers Reassurance Corporation (ERAC) and Union Fidelity Life Insurance Company (UFLIC). ERAC primarily assumed long-term care insurance and life insurance from numerous cedents under various types of reinsurance treaties and stopped accepting new policies after 2008. UFLIC primarily assumed long-term care insurance, structured settlement annuities with and without life contingencies and variable annuities from Genworth Financial Inc. (Genworth) and has been closed to new business since 2004.

Key Portfolio Characteristics

Long-term care insurance contracts. The long-term care insurance contracts we reinsure provide coverage at varying levels of benefits to policyholders and may include attributes (e.g., lifetime benefit periods, inflation protection options, and joint life policies) that could result in claimants being on claim for longer periods or at higher daily claim costs, or alternatively limiting the premium paying period, compared to contracts with a lower level of benefits. Presented in the table below are reserve balances and key attributes of our long-term care insurance portfolio.

16 2025 FORM 10-K

[[GREPCENT_TABLE]]
[["December 31, 2025","ERAC","UFLIC","Total"],["GAAP: Ending balance of reserves at locked-in rate","$","18,887","","$","4,950","","$","23,837"],["Gross statutory reserves(a)","23,943","","5,900","","29,843"],["Number of policies in force","161,300","","40,400","","201,700"],["Number of covered lives in force","212,600","","40,400","","253,000"],["Average policyholder attained age","79","","85","","80"],["GAAP: Ending balance of reserves at locked-in rate per policy (in actual dollars)","$","117,107","","$","122,670","","$","118,220"],["GAAP: Ending balance of reserves at locked-in rate per covered life (in actual dollars)","88,854","","122,670","","94,249"],["Statutory: Gross reserves per policy (in actual dollars)(a)","148,441","","146,050","","147,962"],["Statutory: Gross reserves per covered life (in actual dollars)(a)","112,622","","146,050","","117,960"],["Percentage of policies with:"],["Lifetime benefit period","69","%","31","%","63","%"],["Inflation protection option","76","%","82","%","77","%"],["Joint lives","32","%","\u2014","%","25","%"],["Percentage of policies that are premium paying","63","%","70","%","64","%"],["Policies on claim","12,000","","7,300","","19,300"]]
[[/GREPCENT_TABLE]]
(a) Pending completion of our December 31, 2025 statutory reporting process.

Structured settlement annuities. We reinsure approximately 23,000 structured settlement annuities with an average attained age of 58. Approximately 27% of these structured settlement annuities were underwritten on impaired lives (i.e., shorter-than-average life expectancies) at origination and have projected payments extending decades into the future. Our primary risks associated with these contracts include mortality (i.e., life expectancy or longevity), mortality improvement (i.e., assumed rate that mortality is expected to reduce over time), which may extend the duration of payments on life contingent contracts beyond our estimates, and reinvestment risk (i.e., a low interest rate environment). Unlike long-term care insurance, structured settlement annuities offer no ability to require additional premiums or reduce benefits.

Life Insurance contracts. Our life reinsurance business typically covers the mortality risk associated with various types of life insurance policies that we reinsure from approximately 135 ceding company relationships where we pay a benefit based on the death of a covered life. At December 31, 2025, we reinsure approximately $32 billion of net amount at risk (i.e., difference between the death benefit and any accrued cash value) from approximately 823,000 policies with an average attained age of 65. In 2025, our incurred claims were approximately $0.4 billion with an average individual claim of approximately $48,000. The covered products substantially include 30-year level term insurance and permanent life insurance. We anticipate a significant portion of the 30-year level term policies, which represent approximately 60% of the net amount of risk, to lapse through 2035 as the policies reach the end of their 30-year level premium period.

Critical Accounting Estimates. Our insurance reserves include the following key accounting estimates and assumptions described below.

Future policy benefit reserves. Future policy benefit reserves represent the present value of future benefits to be paid to or on behalf of policyholders and related expenses less the present value of future net premiums and are estimated based on actuarial assumptions such as mortality, morbidity, terminations, and expenses. The liability is measured for each group of contracts (i.e., cohorts) using current cash flow assumptions.

We regularly monitor emerging experience in our run-off insurance operations and industry developments to identify trends that may help us refine our reserve assumptions. We review at least annually in the third quarter, future policy benefit reserves cash flow assumptions, except related claim expenses which remain locked-in, and if the review concludes that the assumptions need to be updated, future policy benefit reserves are 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. Our annual review procedures include updating certain experience studies since our last completed review, independent actuarial analysis (principally on long-term care insurance exposures) and review of industry benchmarks. The review of experience and assumptions is a comprehensive and complex process that depends on a number of factors, many of which are interdependent and require evaluation individually and in the aggregate across all insurance products. The vast majority of our run-off insurance operations consists of reinsurance from multiple ceding insurance entities pursuant to treaties having complex terms and conditions. The review relies on claim and policy information provided by these ceding entities and considers the reinsurance treaties and underlying policies. In order to utilize that information for purposes of completing experience studies covering all key assumptions, we perform detailed procedures to conform and validate the data received from the ceding entities. Our long-term care insurance portfolio includes coverage where credible claim experience for higher attained ages is still emerging, and to the extent future experience deviates from current expectations, new projections of claim costs extending over the expected life of the policies may be required. Significant uncertainties exist in making projections for these long-term care insurance contracts, which requires that we consider a wide range of possible outcomes.

2025 FORM 10-K 17

The primary cash flow assumptions used in the annual review include:

Morbidity. Morbidity assumptions used in estimating future policy benefit reserves are based on estimates of expected incidences of disability among policyholders and the costs associated with these policyholders asserting claims under their contracts, and these estimates account for any expected future morbidity improvement. For long-term care insurance exposures, estimating expected future costs includes assessments of incidence (probability of a claim), utilization (amount of available benefits expected to be incurred, including the effects of inflation) and continuance (how long the claim will last, including claim terminations due to death or recovery).

Rate of Change in Morbidity. Our review incorporates our best estimates of projected future changes in the morbidity rates reflected in our base claim incidence rates. These estimates draw upon a number of inputs, some of which are subjective, and all of which are interpreted and applied in the exercise of professional actuarial judgment in the context of the characteristics specific to our portfolios. This exercise of actuarial judgment considers factors such as the work performed by internal and external independent actuarial experts engaged to advise us in our annual review, the observed actual experience in our portfolios measured against our base assumptions, industry developments, and other trends, including advances in the state of medical care and healthcare technology development.

Terminations. Terminations include active life mortality and lapse. Mortality assumptions used in estimating future policy benefit reserves are based on published mortality tables as adjusted for the results of our experience studies and estimates of expected future mortality improvement. Lapse refers to the rate at which the underlying policies are cancelled due to non-payment of premiums by a policyholder. Lapse rate assumptions used in estimating the present value of future policy benefit reserves are based on the results of our experience studies and reflect actuarial judgment.

Future long-term care premium rate increases. Substantially all long-term care insurance policies that are currently premium paying allow the issuing insurance entity to increase premiums, or alternatively allow the policyholder the option to decrease benefits, with approval by state regulators, should actual experience emerge worse than what was projected when such policies were initially underwritten. As a reinsurer, we rely upon the primary insurers that issued the underlying policies to file proposed premium rate increases on those policies with the relevant state insurance regulators. While we have no direct ability to seek or to institute such premium rate increases, we often collaborate with the primary insurers in accordance with reinsurance contractual terms to file proposed premium rate increases. The amount of times that rate increases have occurred varies by ceding company. We consider recent experience of rate increase filings made by our ceding companies along with state insurance regulatory processes and precedents in establishing our current expectations.

Included in Insurance losses, annuity benefits and other costs in our Statement of Operations for the years ended December 31, 2025 and 2024, are unfavorable and favorable pre-tax adjustments of $(107) million and $196 million, respectively, from updating the net premium ratio (i.e., the percentage of projected gross premiums required to cover expected policy benefits and related expenses) after updating for actual historical experience each quarter and updating of future cash flow assumptions in the third quarter of each year.

Sensitivities. The following table provides sensitivities with respect to the impact of changes of key cash flow assumptions underlying our future policy benefit reserves using the locked-in discount rate assumption and have been estimated across the entire product line rather than at an individual cohort level. Many of our assumptions, which are based on our credible experience, are interdependent and require evaluation individually and in the aggregate across all insurance products. Small changes in the amounts used in the sensitivities could result in materially different outcomes from those reflected below. In addition, the effects of changes to cash flow assumptions underlying our future policy benefit reserves may be partially or wholly reflected in the period in which the assumptions are changed and/or over future periods and may vary across cohorts.

[[GREPCENT_TABLE]]
[["Assumption","Hypothetical change in 2025 assumption","Estimated adverse impact to projected present value of future cash flows (In millions, pre-tax)"],["Morbidity:"],["Long-term care insurance incidence rates","5% increase in incidence rates","$600"],["Long-term care insurance claim continuance","5% reduction in disabled life deaths","$1,200"],["Long-term care insurance utilization","5% increase in utilization","$1,200"],["Long-term care insurance morbidity improvement","25 basis point reduction by age with 0% floor No morbidity improvement","$300$1,200"],["Active life terminations:"],["Long-term care insurance mortality","5% reduction in mortality","$300"],["Long-term care insurance future premium rate increases","25% adverse change in success rate on premium rate increase actions not yet approved","$200"],["Long-term care inflation","0.25% increase to long-term care inflation rate","$100"],["Life insurance mortality","5% increase in mortality","$100"],["Structured settlement annuity mortality","Impaired life mortality grades to standard ten years earlier","$300"]]
[[/GREPCENT_TABLE]]

18 2025 FORM 10-K

While higher assumed inflation, holding all other assumptions constant, would result in unfavorable impacts to the projected present value of future cash flows in the table above, it would be expected to be mitigated by more long-term care insurance policies reaching contractual daily or monthly benefit caps and by increased investment income from higher portfolio yields.

Our run-off insurance subsidiaries are required to prepare statutory financial statements in accordance with statutory accounting practices. Statutory accounting practices are set forth by the National Association of Insurance Commissioners as well as state laws, regulation and general administrative rules and can differ in certain respects from GAAP and would result in several of the sensitivities described in the table above being less impactful on our statutory reserves.

See Capital Resources and Liquidity and Notes for further information related to our run-off insurance operations.

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.

2025 FORM 10-K 19

[[GREPCENT_TABLE]]
[["ADJUSTED REVENUE, OPERATING PROFIT AND PROFIT MARGIN (NON-GAAP)","","","","","2025","2024"],["Total revenue (GAAP)","","","","","$","45,855","$","38,702"],["Less: Insurance revenue (Note 12)","","","","","3,533","3,581"],["Adjusted revenue (Non-GAAP)","","","","","$","42,322","$","35,121"],["Total costs and expenses (GAAP)","","","","","$","37,342","$","33,346"],["Less: Insurance cost and expenses (Note 12)","","","","","2,541","2,560"],["Less: U.S. tax equity cost and expenses","","","","","20","14"],["Less: interest and other financial charges(a)","","","","","843","986"],["Less: non-operating benefit cost (income)","","","","","(788)","(842)"],["Less: restructuring & other(a)","","","","","(87)","525"],["Less: goodwill impairments(a)","","","","","\u2014","251"],["Less: separation costs(a)","","","","","202","492"],["Add: noncontrolling interests","","","","","(6)","(13)"],["Adjusted costs (Non-GAAP)","","","","","$","34,606","$","29,348"],["Other income (loss) (GAAP)","","","","","$","1,487","$","2,264"],["Less: U.S. tax equity","","","","","(169)","(146)"],["Less: gains (losses) on retained and sold ownership interests and other equity securities(a)","","","","","312","532"],["Less: gains (losses) on purchases and sales of business interests(a)","","","","","5","398"],["Adjusted other income (loss) (Non-GAAP)","","","","","$","1,339","$","1,480"],["Profit (loss) (GAAP)","","","","","$","10,000","$","7,620"],["Profit (loss) margin (GAAP)","","","","","21.8%","19.7%"],["Operating profit (loss) (Non-GAAP)","","","","","$","9,055","$","7,253"],["Operating profit (loss) margin (Non-GAAP)","","","","","21.4%","20.7%"],["(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* and Operating profit* as performance metrics at the company level for our annual executive incentive plan for 2025."]]
[[/GREPCENT_TABLE]]

*Non-GAAP Financial Measure

20 2025 FORM 10-K

[[GREPCENT_TABLE]]
[["ADJUSTED NET INCOME (LOSS) AND ADJUSTED EFFECTIVE INCOME TAX RATE (NON-GAAP)","","","","","2025","","2024"],["(Diluted, per-share amounts in dollars)","","","","","","","Income","EPS","","Income","EPS"],["Net income (loss) from continuing operations (GAAP) (Note 18)","","","","","","","$","8,598","$","8.05","","$","6,670","$","6.09"],["Insurance net income (loss) (pre-tax)","","","","","","","1,002","0.94","","1,025","0.94"],["Tax effect on Insurance net income (loss)(a)","","","","","","","(125)","(0.12)","","(219)","(0.20)"],["Less: Insurance net income (loss) (net of tax) (Note 12)","","","","","","","877","0.82","","806","0.74"],["U.S. tax equity net income (loss) (pre-tax)","","","","","","","(220)","(0.21)","","(191)","(0.17)"],["Tax effect on U.S. tax equity net income (loss)","","","","","","","259","0.24","","235","0.21"],["Less: U.S. tax equity net income (loss) (net of tax)","","","","","","","38","0.04","","44","0.04"],["Non-operating benefit (cost) income (pre-tax) (GAAP)","","","","","","","788","0.74","","842","0.77"],["Tax effect on non-operating benefit (cost) income","","","","","","","(166)","(0.15)","","(177)","(0.16)"],["Less: Non-operating benefit (cost) income (net of tax)","","","","","","","623","0.58","","665","0.61"],["Gains (losses) on purchases and sales of business interests (pre-tax)(b)","","","","","","","5","\u2014","","398","0.36"],["Tax effect on gains (losses) on purchases and sales of business interests","","","","","","","2","\u2014","","(2)","\u2014"],["Less: Gains (losses) on purchases and sales of business interests (net of tax)","","","","","","","7","0.01","","396","0.36"],["Gains (losses) on retained and sold ownership interests and other equity securities (pre-tax)(b)","","","","","","","312","0.29","","532","0.49"],["Tax effect on gains (losses) on retained and sold ownership interests and other equity securities(a)(c)","","","","","","","(61)","(0.06)","","(3)","\u2014"],["Less: Gains (losses) on retained and sold ownership interests and other equity securities (net of tax)","","","","","","","251","0.23","","529","0.48"],["Restructuring & other (pre-tax)(b)","","","","","","","87","0.08","","(525)","(0.48)"],["Tax effect on restructuring & other","","","","","","","(18)","(0.02)","","110","0.10"],["Less: Restructuring & other (net of tax)","","","","","","","69","0.06","","(415)","(0.38)"],["Goodwill impairments (pre-tax)(b)","","","","","","","\u2014","\u2014","","(251)","(0.23)"],["Tax effect on goodwill impairments","","","","","","","\u2014","\u2014","","3","\u2014"],["Less: goodwill impairments (net of tax)","","","","","","","\u2014","\u2014","","(248)","(0.23)"],["Separation costs (pre-tax)(b)","","","","","","","(207)","(0.19)","","(492)","(0.45)"],["Tax effect on separation costs","","","","","","","129","0.12","","349","0.32"],["Less: Separation costs (net of tax)","","","","","","","(79)","(0.07)","","(143)","(0.13)"],["Adjusted net income (loss) (Non-GAAP)","","","","","","","$","6,812","$","6.37","","$","5,035","$","4.60"],["Income from continuing operations before taxes (GAAP)","","","","","","","$","10,000","","","$","7,620"],["Less: Total adjustments above (pre-tax)","","","","","","","1,767","","","1,338"],["Adjusted income before taxes (Non-GAAP)","","","","","","","$","8,233","","","$","6,282"],["Provision (benefit) for income taxes (GAAP)","","","","","","","$","1,405","","","$","962"],["Less: Tax effect on adjustments above","","","","","","","(19)","","","(297)"],["Adjusted provision (benefit) for income taxes (Non-GAAP)","","","","","","","$","1,425","","","$","1,260"],["Effective income tax rate (GAAP)","","","","","","","14.1%","","","12.6%"],["Adjusted effective income tax rate (Non-GAAP)","","","","","","","17.3%","","","20.1%"],["(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 2025."]]
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*Non-GAAP Financial Measure

2025 FORM 10-K 21

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[["FREE CASH FLOW (FCF) (NON-GAAP)","2025","2024"],["Cash flows from operating activities (CFOA) (GAAP)","$","8,543","","$","5,817"],["Add: gross additions to property, plant and equipment and internal-use software","(1,273)","","(1,032)"],["Add: dispositions of property, plant and equipment","123","","114"],["Less: separation cash expenditures","(245)","","(800)"],["Less: Corporate & Other restructuring cash expenditures","(56)","","(504)"],["Free cash flow (FCF) (Non-GAAP)","$","7,694","","$","6,203"],["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, beginning in the third quarter of 2025, we now include dispositions of property, plant and equipment. 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 2025."]]
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