filings.toolsItem 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
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Item 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
| CONSOLIDATED STATEMENT OF INCOME (LOSS) (UNAUDITED) | ||
| Three months ended March 31 | ||
| (In millions, except per share amounts) | 2026 | 2025 |
| Sales of equipment | $5,254 | $4,197 |
| Sales of services | 4,084 | 3,835 |
| Total revenues | 9,339 | 8,032 |
| Cost of equipment | 4,714 | 3,915 |
| Cost of services | 2,843 | 2,647 |
| Gross profit | 1,781 | 1,470 |
| Selling, general, and administrative expenses | 1,298 | 1,188 |
| Research and development expenses | 304 | 239 |
| Operating income (loss) | 179 | 43 |
| Interest and other financial income (charges) – net | 28 | 56 |
| Non-operating benefit income | 134 | 115 |
| Other income (expense) – net (Note 19) | 4,762 | 119 |
| Income (loss) before income taxes | 5,103 | 332 |
| Provision (benefit) for income taxes (Note 16) | 354 | 68 |
| Net income (loss) | 4,750 | 264 |
| Net loss (income) attributable to noncontrolling interests | (4) | (11) |
| Net income (loss) attributable to GE Vernova | $4,745 | $254 |
| Earnings (loss) per share attributable to GE Vernova (Note 18): | ||
| Basic | $17.65 | $0.92 |
| Diluted | $17.44 | $0.91 |
| Weighted-average number of common shares outstanding: | ||
| Basic | 269 | 275 |
| Diluted | 272 | 279 |
2026 1Q FORM 10-Q 6
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED) | ||
| (In millions, except share and per share amounts) | March 31, 2026 | December 31, 2025 |
| Cash, cash equivalents, and restricted cash | $10,172 | $8,848 |
| Current receivables – net (Note 4) | 9,568 | 9,803 |
| Inventories, including deferred inventory costs (Note 5) | 11,919 | 10,429 |
| Current contract assets (Note 9) | 9,609 | 9,294 |
| All other current assets (Note 10) | 1,701 | 1,445 |
| Assets held for sale (Note 3) | — | 396 |
| Current assets | 42,969 | 40,216 |
| Property, plant, and equipment – net (Note 6) | 7,139 | 6,006 |
| Goodwill (Note 8) | 9,855 | 4,439 |
| Intangible assets – net (Note 8) | 4,543 | 727 |
| Contract and other deferred assets (Note 9) | 462 | 378 |
| Equity method investments (Note 11) | 1,396 | 1,834 |
| Deferred income taxes (Note 16) | 5,182 | 5,321 |
| All other assets (Note 10) | 4,066 | 4,095 |
| Total assets | $75,612 | $63,016 |
| Accounts payable and equipment project payables (Note 12) | $9,572 | $8,809 |
| Contract liabilities and deferred income (Note 9) | 31,830 | 25,774 |
| All other current liabilities (Note 15) | 6,691 | 6,310 |
| Liabilities held for sale (Note 3) | — | 79 |
| Current liabilities | 48,094 | 40,972 |
| Long-term borrowings (Note 14) | 2,806 | 265 |
| Deferred income taxes (Note 16) | 1,298 | 1,162 |
| Non-current compensation and benefits | 3,195 | 3,171 |
| All other liabilities (Note 15) | 5,154 | 5,151 |
| Total liabilities | 60,547 | 50,720 |
| Commitments and contingencies (Note 22) | ||
| Common stock, par value $0.01 per share, 1,000,000,000 shares authorized, 268,719,995 and 269,529,464 shares outstanding as of March 31, 2026 and December 31, 2025, respectively | 3 | 3 |
| Additional paid-in capital | 9,414 | 9,813 |
| Retained earnings | 10,762 | 6,154 |
| Treasury common stock, 10,196,613 and 8,397,266 shares at cost as of March 31, 2026 and December 31, 2025, respectively | (4,684) | (3,385) |
| Accumulated other comprehensive income (loss) – net attributable to GE Vernova (Note 17) | (1,574) | (1,407) |
| Total equity attributable to GE Vernova | 13,922 | 11,178 |
| Noncontrolling interests | 1,143 | 1,118 |
| Total equity | 15,065 | 12,296 |
| Total liabilities and equity | $75,612 | $63,016 |
2026 1Q FORM 10-Q 7
| CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) | Three months ended March 31 | |
| (In millions) | 2026 | 2025 |
| Net income (loss) | $4,750 | $264 |
| Adjustments to reconcile net income (loss) to cash from (used for) operating activities | ||
| Depreciation and amortization of property, plant, and equipment (Note 6) | 166 | 149 |
| Amortization of intangible assets (Note 8) | 176 | 56 |
| (Gains) losses on purchases and sales of business interests | (4,405) | (21) |
| Principal pension plans – net (Note 13) | (90) | (89) |
| Other postretirement benefit plans – net (Note 13) | (80) | (44) |
| Provision (benefit) for income taxes (Note 16) | 354 | 68 |
| Cash recovered (paid) during the year for income taxes | (534) | (145) |
| Changes in operating working capital: | ||
| Decrease (increase) in current receivables | 610 | 918 |
| Decrease (increase) in inventories, including deferred inventory costs | (930) | (432) |
| Decrease (increase) in current contract assets | (417) | (345) |
| Increase (decrease) in accounts payable and equipment project payables | 473 | (269) |
| Increase (decrease) in contract liabilities and current deferred income | 5,574 | 1,124 |
| All other operating activities | (457) | (74) |
| Cash from (used for) operating activities | 5,188 | 1,161 |
| Additions to property, plant, and equipment and internal-use software | (397) | (186) |
| Dispositions of property, plant, and equipment | 177 | 34 |
| Purchases of and contributions to equity method investments | (10) | (6) |
| Sales of and distributions from equity method investments | 44 | 90 |
| Net cash paid for principal businesses purchased | (4,886) | (40) |
| Proceeds from principal business dispositions | 598 | — |
| All other investing activities | 183 | 15 |
| Cash from (used for) investing activities | (4,291) | (93) |
| Newly issued debt (maturities longer than 90 days) | 2,567 | — |
| Dividends paid to stockholders | (137) | (69) |
| Purchases of common stock for treasury | (1,278) | (1,101) |
| All other financing activities | (711) | (86) |
| Cash from (used for) financing activities | 442 | (1,257) |
| Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash | (16) | 90 |
| Increase (decrease) in cash, cash equivalents, and restricted cash, including cash classified within assets held for sale | 1,323 | (98) |
| Less: Net increase (decrease) in cash classified within assets held for sale | (2) | — |
| Increase (decrease) in cash, cash equivalents, and restricted cash | 1,324 | (98) |
| Cash, cash equivalents, and restricted cash at beginning of year | 8,848 | 8,205 |
| Cash, cash equivalents, and restricted cash as of March 31 | $10,172 | $8,107 |
2026 1Q FORM 10-Q 8
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) | ||
| Three months ended March 31 | ||
| (In millions) | 2026 | 2025 |
| Net income (loss) attributable to GE Vernova | $4,745 | $254 |
| Net loss (income) attributable to noncontrolling interests | (4) | (11) |
| Net income (loss) | $4,750 | $264 |
| Other comprehensive income (loss): | ||
| Currency translation adjustments – net of taxes | (72) | 154 |
| Benefit plans – net of taxes | (29) | (73) |
| Cash flow hedges – net of taxes | (63) | 21 |
| Other comprehensive income (loss) | $(164) | $102 |
| Comprehensive income (loss) | $4,585 | $367 |
| Comprehensive loss (income) attributable to noncontrolling interests | (7) | (14) |
| Comprehensive income (loss) attributable to GE Vernova | $4,579 | $353 |
2026 1Q FORM 10-Q 9
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) | ||||||||
| Common stock | ||||||||
| (In millions) | Common shares outstanding | Par value | Additional paid-in capital | Retained earnings | Treasury common stock | Accumulated other comprehensive income (loss) – net | Equity attributable to noncontrolling interests | Total equity |
| Balances as of January 1, 2026 | 270 | $3 | $9,813 | $6,154 | $(3,385) | $(1,407) | $1,118 | $12,296 |
| Issuance of shares in connection with equity awards | 1 | — | (464) | — | — | — | — | (464) |
| Share-based compensation expense | — | — | 65 | — | — | — | — | 65 |
| Dividends declared ($0.50 per common share) | — | — | — | (137) | — | — | — | (137) |
| Repurchase of common stock | (2) | — | — | — | (1,299) | — | — | (1,299) |
| Net income (loss) | — | — | — | 4,745 | — | — | 4 | 4,750 |
| Currency translation adjustments – net of taxes | — | — | — | — | — | (73) | 1 | (72) |
| Benefit plans – net of taxes | — | — | — | — | — | (30) | 1 | (29) |
| Cash flow hedges – net of taxes | — | — | — | — | — | (63) | — | (63) |
| Changes attributable to noncontrolling interests | — | — | — | — | — | — | 19 | 19 |
| Balances as of March 31, 2026 | 269 | $3 | $9,414 | $10,762 | $(4,684) | $(1,574) | $1,143 | $15,065 |
| Balances as of January 1, 2025 | 276 | $3 | $9,733 | $1,611 | $(43) | $(1,759) | $1,047 | $10,593 |
| Issuance of shares in connection with equity awards | 1 | — | (135) | — | — | — | (135) | |
| Share-based compensation expense | — | — | 56 | — | — | — | — | 56 |
| Repurchase of common stock | (4) | — | — | — | (1,213) | — | — | (1,213) |
| Net income (loss) | — | — | — | 254 | — | 11 | 264 | |
| Currency translation adjustments – net of taxes | — | — | — | — | — | 152 | 2 | 154 |
| Benefit plans – net of taxes | — | — | — | — | — | (74) | 1 | (73) |
| Cash flow hedges – net of taxes | — | — | — | — | — | 21 | — | 21 |
| Changes attributable to noncontrolling interests | — | — | — | — | — | 4 | 4 | |
| Balances as of March 31, 2025 | 273 | $3 | $9,654 | $1,865 | $(1,256) | $(1,660) | $1,065 | $9,672 |
2026 1Q FORM 10-Q 10
NOTE 1**.** ORGANIZATION AND BASIS OF PRESENTATION
Organization. GE Vernova Inc. (the Company, GE Vernova, our, we, or us) is a global leader in the electric power industry, with products
and services that generate, transfer, orchestrate, convert, and store electricity. We design, manufacture, deliver, and service technologies
to create a more reliable, secure, and sustainable electric power system, enabling electrification and decarbonization, underpinning the
progress and prosperity of the communities we serve. We report our financial results across three business segments:
- Our Power segment includes the design, manufacture, and servicing of gas, nuclear, and hydro technologies, providing a critical
foundation of dispatchable, flexible, stable, and reliable power.
- Our Electrification segment includes power transmission, grid systems integration, power conversion and storage, and grid
automation and software technologies required for the transmission, distribution, conversion, storage, and orchestration of
electricity from point of generation to point of consumption.
-
Our Wind segment includes our wind generation technologies, inclusive of onshore and offshore wind turbines and blades.
-
Effective January 1, 2026, the Company realigned the reporting of certain of its business units. Historical financial information
presented within this report conforms to the new business unit structure within the Power, Electrification, and Wind segments.
◦Within our Power segment, our Steam Power business unit was realigned into Nuclear Power, Hydro Power, and Gas
Power. In addition, a component of our former Electrification Software business unit was realigned into Gas Power.
◦Within our Electrification segment, we revised our Grid Solutions business unit into three new business units, Power
Transmission, Grid Systems Integration, and Grid Automation & Software. In addition, a component of our former
Electrification Software business unit was realigned into Grid Automation & Software and another component was
realigned into Gas Power within our Power segment.
◦Within our Wind segment, we combined our Onshore Wind and LM Wind Power business units into Onshore Wind.
Basis of Presentation. We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC) applicable to interim financial statements. Accordingly, certain information
related to our significant accounting policies and note disclosures normally included in financial statements prepared in accordance with
U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted. These unaudited consolidated financial
statements should be read in conjunction with our audited consolidated and combined financial statements, corresponding notes, and
significant accounting policies in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We have reclassified
certain prior year amounts to conform to the current year’s presentation. The information presented in tables throughout the notes is
presented in millions of U.S. dollars unless otherwise stated. Certain columns and rows may not add due to the use of rounded numbers.
Percentages presented are calculated from the underlying numbers in millions. All intercompany balances and transactions within the
Company have been eliminated in the consolidated financial statements.
NOTE 2**.** SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Estimates and Assumptions**.** The preparation of the consolidated financial statements in conformity with U.S. GAAP requires
management 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 the consolidated financial statements. We believe these assumptions to be
reasonable under the circumstances, and 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.
Estimates are used for, but are not limited to, determining revenues from contracts with customers, recoverability of inventory, long-lived
assets and investments, valuation of goodwill and intangible assets, useful lives used in depreciation and amortization, income taxes and
related valuation allowances, accruals for contingencies including legal, indemnifications, product warranties, and environmental, actuarial
assumptions used to determine costs of pension and postretirement benefits, valuation and recoverability of receivables, valuation of
derivatives, and valuation of assets acquired and liabilities assumed as a result of acquisitions.
See Note 2 in the Notes to our audited consolidated and combined financial statements in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2025, for further information on our significant accounting policies.
NOTE 3**.** ASSETS AND LIABILITIES HELD FOR SALE**.** During the first quarter of 2026, we completed the sale of the Proficy
manufacturing software business (Proficy) within our Grid Automation & Software business. In connection with the disposition, we received
net cash proceeds of $602 million, subject to customary working capital and other post-close adjustments. As a result, we recognized a pre-
tax gain of $330 million (after-tax gain of $210 million), recorded in Other income (expense) - net in our Consolidated Statement of Income
(Loss). See Note 19 for further information.
Additionally, during the first quarter of 2026, we completed the sale of the issued and outstanding membership interests of Linden VFT LLC,
a merchant transmission facility within our Gas Power business. In connection with the disposition, we received net cash proceeds of
$140 million, subject to customary working capital and other post-close adjustments. As a result, we recognized a pre-tax gain of $3 million
(after-tax gain of $2 million), recorded in Other income (expense) - net in our Consolidated Statement of Income (Loss).
2026 1Q FORM 10-Q 11
The major components of assets and liabilities held for sale in the Company’s Consolidated Statement of Financial Position are
summarized as follows:
| ASSETS AND LIABILITIES OF BUSINESS HELD FOR SALE | March 31, 2026 | December 31, 2025 |
| Property, plant, and equipment - net | $— | $137 |
| Goodwill | — | 184 |
| Other assets | — | 75 |
| Assets held for sale | $— | $396 |
| Other liabilities | $— | $79 |
| Liabilities held for sale | $— | $79 |
NOTE 4**.** CURRENT AND LONG-TERM RECEIVABLES
| CURRENT RECEIVABLES – NET | March 31, 2026 | December 31, 2025 |
| Customer receivables | $7,357 | $7,866 |
| Non-income based tax receivables | 845 | 662 |
| Supplier advances and other receivables | 1,816 | 1,717 |
| Other receivables | $2,661 | $2,379 |
| Allowance for credit losses | (450) | (441) |
| Total current receivables – net | $9,568 | $9,803 |
Activity in the allowance for credit losses related to current receivables for the three months ended March 31, 2026 and 2025 consists of
the following:
| ALLOWANCE FOR CREDIT LOSSES | 2026 | 2025 |
| Balance as of January 1 | $441 | $464 |
| Net additions (releases) charged to costs and expenses | 7 | (2) |
| Write-offs, net | (2) | (9) |
| Foreign exchange and other | 3 | 3 |
| Balance as of March 31 | $450 | $456 |
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 $298 million and $373 million in the three months ended March 31, 2026 and 2025,
respectively. Transactions under these arrangements are accounted for as sales, and the sold receivables are removed from the
Company's balance sheet. The Company maintains no continuing involvement with respect to the receivables being transferred.
| LONG-TERM RECEIVABLES | March 31, 2026 | December 31, 2025 |
| Long-term customer receivables | $227 | $228 |
| Supplier advances | 679 | 686 |
| Non-income based tax receivables | 85 | 80 |
| Other receivables | 528 | 440 |
| Allowance for credit losses | (197) | (197) |
| Total long-term receivables – net | $1,323 | $1,237 |
NOTE 5**.** INVENTORIES, INCLUDING DEFERRED INVENTORY COSTS
| March 31, 2026 | December 31, 2025 | |
| Raw materials and work in process | $7,217 | $6,377 |
| Finished goods | 3,874 | 3,267 |
| Deferred inventory costs(a) | 828 | 786 |
| Inventories, including deferred inventory costs | $11,919 | $10,429 |
(a) Represents cost deferral for shipped goods (such as components for wind turbine assemblies in our Wind segment) and labor and
overhead costs on time and material service contracts (primarily originating in our Power segment) and other costs where the criteria for
revenue recognition have not yet been met.
NOTE 6**.** PROPERTY, PLANT, AND EQUIPMENT
| March 31, 2026 | December 31, 2025 | |
| Original cost | $14,582 | $13,579 |
| Less: Accumulated depreciation and amortization | (8,303) | (8,360) |
| Right-of-use operating lease assets | 861 | 788 |
| Property, plant, and equipment – net | $7,139 | $6,006 |
2026 1Q FORM 10-Q 12
Depreciation and amortization related to property, plant, and equipment was $166 million and $149 million in the three months ended
March 31, 2026 and 2025, respectively.
NOTE 7**.** LEASES**.** Our operating lease liabilities, included in All other current liabilities and All other liabilities in our Consolidated
Statement of Financial Position, were $898 million and $843 million as of March 31, 2026 and December 31, 2025, respectively. Expense
related to our operating lease portfolio, primarily from our long-term fixed leases, was $68 million and $45 million for the three months
ended March 31, 2026 and 2025, respectively. Our finance lease liabilities, included in All other current liabilities and Long-term borrowings
in our Consolidated Statement of Financial Position, were $303 million and $278 million as of March 31, 2026 and December 31, 2025,
respectively.
NOTE 8**.** ACQUISITIONS**, GOODWILL, AND OTHER INTANGIBLE** ASSETS
Acquisitions**.** On February 2, 2026, GE Vernova completed the acquisition of the remaining 50% stake of Prolec GE, our former
unconsolidated joint venture with Xignux, in exchange for cash consideration of $5,254 million. Prolec GE is an electric industry leader in
North America, with approximately 10,000 employees across seven manufacturing sites in the Americas, including five in the U.S. It
produces a wide variety of transformers and transformer components for the generation, transmission, and distribution of electricity,
complemented by its broad transformer services offering. The acquisition increases our ability to serve the North American transformer
market. Net assets and results of operations of Prolec GE are included in our results commencing on February 2, 2026 and are reported
within the Electrification segment. As a result of this acquisition, we remeasured our previously held equity interest to fair value, with the
resulting pre-tax gain of $3,992 million recognized within Other income (expense) – net in our Consolidated Statement of Income during the
first quarter of 2026 and was determined by using the implied total equity value from the transaction price, adjusted for an assumed control
premium. Pro forma results of operations are not presented because the acquisition is not material to the Company’s consolidated results
of operations for the periods ended March 31, 2026 and 2025, respectively.
The following table summarizes the preliminary purchase consideration as well as the preliminary allocation to the assets acquired and
liabilities assumed based upon their estimated fair values at the date of acquisition:
| Cash consideration transferred | $5,254 |
| Fair value of previously held 50% equity interest | 4,402 |
| Total preliminary purchase consideration | $9,656 |
| Current assets | $1,597 |
| Intangible assets | 3,980 |
| Other non-current assets | 1,126 |
| Current liabilities | (1,045) |
| Non-current liabilities | (1,476) |
| Total identifiable net assets acquired | $4,183 |
| Goodwill | 5,473 |
| Total preliminary purchase consideration | $9,656 |
Goodwill is calculated as the excess of the purchase consideration over the estimated fair value of net assets acquired and primarily
represents the value of the assembled workforce along with expected synergies from integrating Prolec GE’s operations with the
Company’s operations. The goodwill is recorded in our Electrification segment and approximately $400 million of the goodwill is expected to
be deductible for tax purposes.
We determined the fair value of assets acquired and liabilities assumed using available market information and various valuation methods
that require judgment related to estimates. The purchase accounting related to the acquisition, including the valuation of tangible and
intangible assets, is preliminary and likely to change in future reporting periods. We will complete our post-closing procedures and
purchase price allocation as soon as practicable but no later than the first quarter of 2027. See Notes 9, 11, and 19 for further information.
The preliminary fair value and weighted-average amortization period of identifiable intangible assets acquired as of the acquisition date is
as follows:
| Weighted-average useful lives (in years) | Total | |
| Customer related | 12 | $2,720 |
| Patents and technology | 6 | 507 |
| Capitalized software | 3 | 8 |
| Trademarks and other | 3 | 745 |
| Total identifiable intangible assets acquired | $3,980 |
The fair values of the customer related and trademarks and other intangible assets were primarily determined using the multi-period excess
earnings method, and the fair values of the patents and technology intangible assets were valued using the relief-from-royalty method.
Revenue and income (loss) before income taxes of Prolec GE from the acquisition date through March 31, 2026 were $485 million and
$(105) million, respectively. The income (loss) before income taxes includes the impact of inventory step-up amortization, intangible asset
amortization, and integration costs. Acquisition-related costs totaled $35 million during the three months ended March 31, 2026 and are
included in Selling, general, and administrative expenses in our Consolidated Statement of Income.
2026 1Q FORM 10-Q 13
| GOODWILL | Power | Electrification | Wind | Total |
| Balance as of January 1, 2026 | $512 | $624 | $3,302 | $4,439 |
| Acquisitions | — | 5,473 | — | 5,473 |
| Currency exchange and other | — | (23) | (34) | (57) |
| Balance as of March 31, 2026 | $512 | $6,074 | $3,269 | $9,855 |
We assess the possibility that a reporting unit’s fair value has been reduced below its carrying amount due to the occurrence of events or
circumstances between annual impairment testing dates. In the first quarter of 2026, we did not identify any reporting units that were
impaired.
Intangible assets. All intangible assets are subject to amortization. Intangible assets increased $3,816 million during the three months
ended March 31, 2026, primarily as a result of the acquisition of Prolec GE, partially offset by amortization. Amortization expense was $176
million and $56 million for the three months ended March 31, 2026 and 2025, respectively.
NOTE 9**.** CONTRACT AND OTHER DEFERRED ASSETS & CONTRACT LIABILITIES AND DEFERRED INCOME
Contract assets reflect revenue recognized on contracts in excess of billings based on contractual terms. Contract liabilities primarily
represent cash received from customers under ordinary commercial payment terms in advance of delivery of equipment orders or servicing
of customers’ installed base.
Contract and other deferred assets increased $399 million in the three months ended March 31, 2026 primarily due to the timing of revenue
recognition ahead of billing milestones on equipment and other service agreements. Contract liabilities and deferred income increased
$6,000 million in the three months ended March 31, 2026 primarily due to new collections received in excess of revenue recognition and as
a result of the acquisition of Prolec GE. Net contractual service agreements increased primarily due to revenues recognized of $1,280
million, partially offset by billings of $1,163 million and net unfavorable changes in estimated profitability of $89 million.
Revenue recognized related to the contract liabilities balance at the beginning of the year was approximately $4,001 million and $3,601
million for the three months ended March 31, 2026 and 2025, respectively.
| CONTRACT AND OTHER DEFERRED ASSETS | ||||
| March 31, 2026 | Power | Electrification | Wind | Total |
| Contractual service agreement assets | $5,384 | $— | $— | $5,384 |
| Equipment and other service agreement assets | 1,696 | 1,600 | 928 | 4,225 |
| Current contract assets | $7,081 | $1,600 | $928 | $9,609 |
| Non-current contract and other deferred assets(a) | 453 | 7 | 1 | 462 |
| Total contract and other deferred assets | $7,534 | $1,607 | $930 | $10,071 |
| December 31, 2025 | Power | Electrification | Wind | Total |
| Contractual service agreement assets | $5,417 | $— | $— | $5,417 |
| Equipment and other service agreement assets | 1,521 | 1,368 | 988 | 3,877 |
| Current contract assets | $6,938 | $1,368 | $988 | $9,294 |
| Non-current contract and other deferred assets(a) | 368 | 9 | 1 | 378 |
| Total contract and other deferred assets | $7,305 | $1,376 | $990 | $9,672 |
(a) Primarily represents amounts due from customers at Gas Power for the sale of services upgrades, which we collect through incremental
fixed or usage-based fees from servicing the equipment under contractual service agreements.
| CONTRACT LIABILITIES AND DEFERRED INCOME | ||||
| March 31, 2026 | Power | Electrification | Wind | Total |
| Contractual service agreement liabilities | $1,917 | $— | $— | $1,917 |
| Equipment and other service agreement liabilities | 18,479 | 8,259 | 3,173 | 29,913 |
| Contract liabilities and current deferred income | $20,396 | $8,259 | $3,173 | $31,830 |
| Non-current deferred income | 4 | 10 | 105 | 119 |
| Total contract liabilities and deferred income | $20,400 | $8,269 | $3,278 | $31,949 |
| December 31, 2025 | Power | Electrification | Wind | Total |
| Contractual service agreement liabilities | $1,977 | $— | $— | $1,977 |
| Equipment and other service agreement liabilities | 14,550 | 6,449 | 2,796 | 23,798 |
| Contract liabilities and current deferred income | $16,527 | $6,449 | $2,796 | $25,774 |
| Non-current deferred income | 20 | 13 | 142 | 175 |
| Total contract liabilities and deferred income | $16,547 | $6,462 | $2,938 | $25,950 |
2026 1Q FORM 10-Q 14
Remaining Performance Obligation (RPO). As of March 31, 2026, the aggregate amount of the contracted revenues allocated to our
unsatisfied (or partially unsatisfied) performance obligations were $163,276 million. We expect to recognize revenue as we satisfy our
remaining performance obligations as follows:
(1)Equipment-related RPO of $75,924 million of which 38%, 69%, and 98% is expected to be recognized within 1, 2, and 5 years,
respectively, and the remaining thereafter.
(2)Services-related RPO of $87,352 million of which 16%, 53%, 78%, and 91% is expected to be recognized within 1, 5, 10, and 15
years, respectively, and the remaining thereafter.
Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related RPO.
NOTE 10**.** CURRENT AND ALL OTHER ASSETS**.** All other current assets primarily include investment securities, prepaid taxes and
deferred charges, and derivative instruments (see Note 20). All other current assets increased $256 million for the three months ended
March 31, 2026 primarily due to an increase in our investment in China XD Electric Co., Ltd due to unrealized gains, partially offset by a
sale of a portion of our shares, and an increase in financing receivables. The fair value of our investment in China XD Electric Co., Ltd was
$564 million as of March 31, 2026, which is considered to be Level 1. See Note 19 for further information. All other assets primarily include
pension surplus, long-term receivables (see Note 4), taxes receivable, and prepaid taxes and deferred charges. All other assets decreased
$29 million in the three months ended March 31, 2026.
NOTE 11**.** EQUITY METHOD INVESTMENTS
| Equity method investment balance | Equity method income (loss) | ||||
| Three months ended March 31 | |||||
| March 31, 2026 | December 31, 2025 | 2026 | 2025 | ||
| Power(a) | $934 | $922 | $17 | $(10) | |
| Electrification(b) | 85 | 479 | 56 | 50 | |
| Wind | 28 | 30 | — | — | |
| Corporate | 349 | 403 | (8) | 20 | |
| Total | $1,396 | $1,834 | $65 | $60 |
(a) Includes Aero Alliance, our joint venture with Baker Hughes Company, that supports our customers through the fulfillment of
aeroderivative engines, spare parts, repairs, and maintenance services. Purchases of parts and services from the joint venture were
$201 million and $126 million in the three months ended March 31, 2026 and 2025, respectively. The Company owed Aero Alliance
$62 million and $55 million as of March 31, 2026 and December 31, 2025, respectively. These amounts have been recorded in
Accounts payable and equipment project payables on the Consolidated Statement of Financial Position.
(b) In the first quarter of 2026, we acquired the remaining 50% stake of our former equity method investment in Prolec GE from Xignux. As
a result, Prolec GE is now consolidated within our financial statements. See Note 8 for further information.
NOTE 12**.** ACCOUNTS PAYABLE AND EQUIPMENT PROJECT PAYABLES
| March 31, 2026 | December 31, 2025 | |
| Trade payables | $6,333 | $5,721 |
| Supply chain finance programs | 1,804 | 1,542 |
| Equipment project payables | 1,121 | 1,210 |
| Non-income based tax payables | 314 | 335 |
| Accounts payable and equipment project payables | $9,572 | $8,809 |
We facilitate voluntary supply chain finance programs with third parties, which provide participating suppliers the opportunity to sell their GE
Vernova 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 $856 million and $1,258 million for the three months ended March 31, 2026 and 2025, respectively.
NOTE 13**.** POSTRETIREMENT BENEFIT PLANS**.** GE Vernova-sponsored plans are presented in three categories: principal pension
plans, other pension plans, and principal retiree benefit plans. See Note 13 in the Notes to our audited consolidated and combined financial
statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for further information.
The components of benefit plans cost (income) other than the service cost are included in the caption Non-operating benefit income in our
Consolidated Statement of Income (Loss).
2026 1Q FORM 10-Q 15
| 2026 | 2025 | ||||||
| Three months ended March 31 | Principal pension | Other pension | Principal retiree benefit | Principal pension | Other pension | Principal retiree benefit | |
| Service cost – operating | $6 | $7 | $1 | $6 | $7 | $1 | |
| Interest cost | 135 | 59 | 8 | 140 | 54 | 10 | |
| Expected return on plan assets | (170) | (86) | — | (178) | (76) | — | |
| Amortization of net loss (gain) | (54) | 6 | (13) | (50) | 9 | (10) | |
| Amortization of prior service cost (credit) | 2 | (2) | (14) | — | (2) | (14) | |
| Curtailment/settlement loss (gain) | — | — | — | — | 1 | — | |
| Non-operating benefit costs (income) | $(88) | $(23) | $(19) | $(88) | $(13) | $(13) | |
| Net periodic expense (income) | $(82) | $(16) | $(18) | $(82) | $(7) | $(12) |
Defined Contribution Plan. GE Vernova sponsors a defined contribution plan for its eligible U.S. employees. Expenses associated with
their participation in the plan represent the employer contributions for GE Vernova employees and were $42 million and $36 million for the
three months ended March 31, 2026 and 2025, respectively.
NOTE 14**.** LONG-TERM BORROWINGS
| March 31, 2026 | December 31, 2025 | |
| 4.250% senior notes due 2031 | $600 | $— |
| 4.875% senior notes due 2036 | 1,000 | — |
| 5.500% senior notes due 2056 | 1,000 | — |
| Other long-term borrowings and finance leases | 314 | 289 |
| Unamortized discount and issuance costs | (56) | — |
| Total | $2,857 | $289 |
| Less - Current maturities of long-term borrowings and finance leases | 51 | 24 |
| Total long-term borrowings | $2,806 | $265 |
On February 4, 2026, GE Vernova issued $2,600 million aggregate principal amount of senior notes, consisting of $600 million of 4.250%
senior notes due February 2031, $1,000 million of 4.875% senior notes due February 2036, and $1,000 million of 5.500% senior notes due
February 2056. The senior notes contain customary optional redemption provisions. Net proceeds from the offering were approximately
$2,543 million, net of the original issue discount, underwriting fees, and deferred issuance costs. The net proceeds from the debt issuance
were used for general corporate purposes, including financing a portion of the acquisition of the remaining 50% interest in Prolec GE, which
closed on February 2, 2026.
The estimated fair value of our long-term borrowings, excluding finance leases, was $2,557 million and $11 million as of March 31, 2026
and December 31, 2025, respectively, compared to carrying values of $2,554 million and $11 million as of March 31, 2026 and December
31, 2025, respectively. The fair value of the senior notes is classified as Level 2 within the fair value hierarchy.
Credit Facilities. As of March 31, 2026, we have $6,000 million of credit facilities consisting of (i) an unsecured revolving credit facility in
an aggregate committed amount of $3,000 million and (ii) a standby letter of credit and bank guarantee facility in an aggregate committed
amount of $3,000 million. Each of the credit facilities will mature on April 2, 2029. There were no borrowings outstanding on these facilities
as of March 31, 2026. Fees related to the unused portion of the facilities were insignificant in the three months ended March 31, 2026. See
Note 22 in the Notes to our audited consolidated and combined financial statements in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2025 for further information.
NOTE 15**.** CURRENT AND ALL OTHER LIABILITIES**.** All other current liabilities primarily include liabilities related to employee
compensation and benefits, equipment projects and other commercial liabilities, product warranties (see Note 22), taxes payable, liabilities
related to business disposition activities, operating lease liabilities (see Note 7), and restructuring liabilities (see Note 23). All other current
liabilities increased $381 million in the three months ended March 31, 2026 primarily due to an increase in employee compensation and
benefit liabilities. All other liabilities primarily include liabilities related to uncertain and other income taxes, product warranties (see Note
22), legal liabilities (see Note 22), asset retirement obligations (see Note 22), operating lease liabilities (see Note 7), deferred income (see
Note 9), equipment projects and other commercial liabilities, and indemnifications (see Note 22). All other liabilities increased $3 million in
the three months ended March 31, 2026.
NOTE 16**.** INCOME TAXES**.** Our effective tax rate was 6.9% for the three months ended March 31, 2026. The effective tax rate was
lower than the U.S. statutory rate of 21% primarily due to a nontaxable gain on the acquisition of Prolec GE and an income tax benefit from
stock-based compensation partially offset by losses providing no tax benefit in certain jurisdictions.
Our effective tax rate was 20.5% for the three months ended March 31, 2025. The effective tax rate was lower than the U.S. statutory rate
of 21% primarily due to an income tax benefit from stock-based compensation, mostly offset by losses providing no tax benefit in certain
jurisdictions.
2026 1Q FORM 10-Q 16
NOTE 17**.** ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (AOCI) AND COMMON STOCK
| Currency translation adjustment | Benefit plans | Cash flow hedges | Total AOCI | |
| Balance as of January 1, 2026 | $(1,260) | $(247) | $100 | $(1,407) |
| AOCI before reclasses – net of taxes of $14, $(18), and $(5) | (72) | (16) | (42) | (130) |
| Reclasses from AOCI – net of taxes of $—, $62, and $— | — | (13) | (21) | (34) |
| Less: AOCI attributable to noncontrolling interests | 1 | 1 | — | 2 |
| Balance as of March 31, 2026 | $(1,333) | $(277) | $36 | $(1,574) |
| Balance as of January 1, 2025 | $(1,734) | $(58) | $33 | $(1,759) |
| AOCI before reclasses – net of taxes of $—, $8, and $— | 154 | (1) | 12 | 165 |
| Reclasses from AOCI – net of taxes of $—, $(2), and $— | — | (72) | 9 | (63) |
| Less: AOCI attributable to noncontrolling interests | 2 | 1 | — | 3 |
| Balance as of March 31, 2025 | $(1,582) | $(132) | $54 | $(1,660) |
Common Stock. On March 31, 2026, there were 268,719,995 shares of GE Vernova common stock outstanding. On December 9, 2025,
we announced that the Board of Directors had authorized an increase of our repurchase program to $10 billion of common stock
repurchases, from the prior authorization of $6 billion, which was announced on December 10, 2024. We repurchased 1.8 million shares for
$1,295 million in the three months ended March 31, 2026, excluding commission fees and excise taxes. Cumulatively we have repurchased
$4,613 million of common stock over the life of the program.
NOTE 18**.** EARNINGS PER SHARE INFORMATION**.** The dilutive effect of outstanding stock options, restricted stock units, and
performance share units is reflected in the denominator for diluted earnings per share using the treasury stock method.
| Three months ended March 31 | ||
| (In millions, except per share amounts) | 2026 | 2025 |
| Numerator: | ||
| Net income (loss) | $4,750 | $264 |
| Net loss (income) attributable to noncontrolling interests | (4) | (11) |
| Net income (loss) attributable to GE Vernova | $4,745 | $254 |
| Denominator: | ||
| Basic weighted-average shares outstanding | 269 | 275 |
| Dilutive effect of common stock equivalents | 3 | 4 |
| Diluted weighted-average shares outstanding | 272 | 279 |
| Basic earnings (loss) per share | $17.65 | $0.92 |
| Diluted earnings (loss) per share | $17.44 | $0.91 |
| Antidilutive securities(a) | — | 1 |
(a) Diluted earnings (loss) per share excludes certain shares issuable under share-based compensation plans because the effect would
have been antidilutive.
NOTE 19**.** OTHER INCOME (EXPENSE) – NET
| Three months ended March 31 | ||
| 2026 | 2025 | |
| Equity method investment income (loss) (Note 11) | $65 | $60 |
| Net interest and investment income (loss)(a) | 263 | 16 |
| Gains (losses) on purchases and sales of business interests(b) | 4,405 | 21 |
| Derivative instruments (Note 20) | 5 | 2 |
| Licensing income | 9 | 4 |
| Other – net | 14 | 16 |
| Total other income (expense) – net | $4,762 | $119 |
(a) Includes financial interest related to our normal business operations primarily with customers. Includes a pre-tax unrealized gain of
$231 million and a pre-tax realized gain of $20 million related to our interest in China XD Electric Co., Ltd in the three months ended
March 31, 2026. See Note 10 for further information.
(b) Includes a pre-tax gain of $3,992 million related to the acquisition of the remaining 50% stake in Prolec GE from Xignux as a result of
the remeasurement of our previously held equity interest to fair value, a pre-tax gain of $330 million related to the sale of our Proficy
business in our Electrification segment, and a pre-tax gain of $86 million related to the sale of an equity method investment at our
Financial Services business in the three months ended March 31, 2026. See Notes 3, 8, and 10 for further information.
2026 1Q FORM 10-Q 17
NOTE 20**.** FINANCIAL INSTRUMENTS
Loans and Other Receivables**.** The Company’s financial assets not carried at fair value primarily consist of loan receivables and
noncurrent customer and other receivables. The net carrying amount was $196 million and $229 million as of March 31, 2026 and
December 31, 2025, respectively. The estimated fair value was $196 million and $225 million as of March 31, 2026 and December 31,
2025, respectively. All of these assets are considered to be Level 3.
Derivatives and Hedging. Our primary objective in executing and holding derivatives is to reduce the earnings and cash flow volatility
associated with fluctuations in foreign currency exchange rates and commodity prices over the terms of our customer contracts. These
hedge contracts reduce, but do not entirely eliminate, the impact of foreign currency exchange rate and commodity price movements. The
Company does not enter into or hold derivative instruments for speculative trading purposes.
We use foreign currency contracts to reduce the volatility of cash flows related to forecasted revenues, expenses, assets, and liabilities.
These contracts are generally one to 13 months in duration but with maximum remaining maturities of up to 14 years as of March 31, 2026.
Cash Flow Hedges. The total amount in AOCI related to cash flow hedges was a net $36 million gain and a net $100 million gain as of
March 31, 2026 and December 31, 2025, respectively, of which a net $1 million gain and a net $26 million gain, respectively, related to our
share of AOCI recognized at our non-consolidated joint ventures. We expect to reclassify $9 million of pre-tax net losses associated with
designated cash flow hedges to earnings in the next 12 months, contemporaneously with the earnings effects of the related forecasted
transactions. The Company reclassified net gains (losses) from AOCI into earnings of $21 million and $(9) million for the three months
ended March 31, 2026 and 2025, respectively. As of March 31, 2026, the maximum length of time over which we are hedging forecasted
transactions was approximately 9 years.
Net Investment Hedges. We enter into foreign exchange forwards designated as the hedging instruments in net investment hedging
relationships in order to mitigate the foreign currency risk attributable to the translation of the Company’s net investment in certain non-U.S.
dollar functional equity method investees. The total amount in AOCI related to net investment hedges was a net gain of $33 million and
$31 million as of March 31, 2026 and December 31, 2025, respectively.
The following table presents the gross fair values of our outstanding derivative instruments as of the dates indicated:
GROSS FAIR VALUE OF OUTSTANDING DERIVATIVE INSTRUMENTS
| March 31, 2026 | Gross Notional | All other current assets | All other assets | All other current liabilities | All other liabilities |
| Foreign currency exchange contracts accounted for as hedges(a) | $7,011 | $78 | $151 | $41 | $51 |
| Foreign currency exchange contracts(a) | 36,964 | 461 | 138 | 384 | 136 |
| Commodity and other contracts | 439 | 49 | 26 | 2 | 4 |
| Derivatives not accounted for as hedges | $37,403 | $510 | $164 | $386 | $139 |
| Total gross derivatives | $44,414 | $589 | $315 | $426 | $191 |
| Netting adjustment(b) | (299) | (134) | (296) | (134) | |
| Net derivatives recognized in the Consolidated Statement of Financial Position | $290 | $181 | $131 | $57 |
| December 31, 2025 | Gross Notional | All other current assets | All other assets | All other current liabilities | All other liabilities |
| Foreign currency exchange contracts accounted for as hedges(a) | $6,547 | $72 | $147 | $28 | $23 |
| Foreign currency exchange contracts(a) | 38,005 | 382 | 161 | 316 | 156 |
| Commodity and other contracts | 389 | 52 | 32 | 1 | 2 |
| Derivatives not accounted for as hedges | $38,393 | $434 | $193 | $317 | $158 |
| Total gross derivatives | $44,940 | $506 | $340 | $345 | $181 |
| Netting adjustment(b) | (274) | (118) | (271) | (118) | |
| Net derivatives recognized in the Consolidated Statement of Financial Position | $233 | $223 | $74 | $63 |
(a) Total gross notional amount of foreign currency exchange contracts represents the volume of derivatives activity. When foreign currency
exchange contracts with the same currency pair and maturity date are netted across different counterparties, the notional amount
reduces to approximately $24,361 million and $24,740 million as of March 31, 2026 and December 31, 2025, respectively.
(b) The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts
include fair value adjustments related to our own and counterparty non-performance risk.
2026 1Q FORM 10-Q 18
PRE-TAX GAINS (LOSSES) RECOGNIZED IN AOCI RELATED TO CASH FLOW AND NET INVESTMENT HEDGES
| Three months ended March 31 | ||
| 2026 | 2025 | |
| Cash flow hedges | $(13) | $10 |
| Net investment hedges | 2 | (2) |
The tables below show the effect of our derivative financial instruments in the Consolidated Statement of Income (Loss):
| Three months ended March 31, 2026 | Sales of equipment and services | Cost of equipment and services | Selling, general, and administrative expenses | Other income (expense) – net |
| Total amount of income (expense) in the Consolidated Statement of Income (Loss) | $9,339 | $7,558 | $1,298 | $4,762 |
| Effects of cash flow hedges | $12 | $(9) | $— | $— |
| Foreign currency exchange contracts | 1 | 58 | (14) | 5 |
| Commodity and other contracts | — | (1) | 5 | — |
| Effect of derivatives not designated as hedges | $1 | $57 | $(9) | $5 |
| Three months ended March 31, 2025 | Sales of equipment and services | Cost of equipment and services | Selling, general, and administrative expenses | Other income (expense) – net |
| Total amount of income (expense) in the Consolidated Statement of Income (Loss) | $8,032 | $6,562 | $1,188 | $119 |
| Effects of cash flow hedges | $(9) | $— | $— | $— |
| Foreign currency exchange contracts | — | (3) | (38) | 2 |
| Commodity and other contracts | — | (8) | 5 | — |
| Effect of derivatives not designated as hedges | $— | $(11) | $(33) | $2 |
The amount excluded for cash flow hedges was a gain (loss) of $9 million and $8 million for the three months ended March 31, 2026 and
2025, respectively. These amounts are recognized in Sales of equipment, Sales of services, Cost of equipment, and Cost of services in our
Consolidated Statement of Income (Loss).
NOTE 21**.** VARIABLE INTEREST ENTITIES (VIEs)****. In our Consolidated Statement of Financial Position, we have assets of $131
million and $128 million and liabilities of $136 million and $132 million as of March 31, 2026 and December 31, 2025, respectively, from
consolidated VIEs. These entities were created to manage our insurance exposure through an insurance captive and to help our customers
facilitate or finance the purchase of GE Vernova equipment and services, and have no features that could expose us to losses that would
significantly exceed the difference between the consolidated assets and liabilities.
Our investments in unconsolidated VIEs were $129 million and $85 million as of March 31, 2026 and December 31, 2025, respectively. Our
maximum exposure to loss in respect of unconsolidated VIEs is increased by our commitments to make additional investments in these
entities described in Note 22.
NOTE 22**.** COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES, AND OTHER LOSS CONTINGENCIES
Commitments**.** We had total investment commitments of $133 million and no unfunded lending commitments at March 31, 2026. The
commitments primarily consist of obligations to make investments or provide funding by our Financial Services business. See Note 21 for
further information.
Guarantees**.** As of March 31, 2026, we were committed under the following guarantee arrangements:
Credit support. We have provided $626 million of credit support on behalf of certain customers or associated companies, predominantly
joint ventures and partnerships, using arrangements such as standby letters of credit and performance guarantees, and a line of credit to
support our consolidated subsidiaries. The liability for such credit support was $5 million.
Indemnification agreements**.** We have $1,010 million of indemnification commitments, including our commercial contracts and
agreements governing the sale of business assets, for which we recorded a liability of $674 million. The liability is primarily associated with
cash and deposits and includes a $378 million liability at March 31, 2026 related to cash transferred to the Company from General Electric
Company (GE) as part of the separation that is restricted in connection with certain legal matters related to legacy GE operations. The
liability reflects the use of these funds to settle any associated obligations and the return of any remaining cash to GE in a future reporting
period once resolved. In addition, the liability includes $200 million of indemnifications in connection with agreements entered into with GE
related to the separation, including a tax matters agreement (TMA). The IRS is currently auditing the consolidated GE U.S. income tax
returns for 2016 through 2020, during which years the GE Vernova businesses were part of the consolidated filing. In the first quarter of
2026, we were informed by GE of an update to this IRS audit. The resolution could result in additional tax obligations that may be allocated
to GE Vernova by GE, in accordance with the TMA. The resolution of this matter could be time-consuming and is not likely in the near term.
If the resolution is unfavorable, then it could result in material indemnification obligations due from GE Vernova to GE, which are not
reasonably estimable at this time and for which no liability has been accrued.
2026 1Q FORM 10-Q 19
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 $1,580 million and $1,573 million as of March 31, 2026 and December 31, 2025,
respectively.
Legal Matters**.** In the normal course of our business, we are involved from time to time in various arbitrations, class actions, litigation,
investigations, and other legal, regulatory, or governmental actions. See Note 22 in the Notes to our audited consolidated and combined
financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for further information.
Environmental and Asset Retirement Obligations. Our operations involve the use, disposal, and cleanup of substances regulated under
environmental protection laws and nuclear decommissioning regulations. We have obligations for ongoing and future environmental
remediation activities and may incur additional liabilities in connection with previously remediated sites. Additionally, like many other
industrial companies, we and our subsidiaries are defendants in various lawsuits related to alleged worker exposure to asbestos or other
hazardous materials. Liabilities for environmental remediation, nuclear decommissioning, and worker exposure claims exclude possible
insurance recoveries.
It is reasonably possible that our exposure will exceed amounts accrued. However, due to uncertainties about the status of laws,
regulations, technology, and information related to individual sites and lawsuits, such amounts are not reasonably estimable. Our reserves
related to environmental remediation and worker exposure claims recorded in All other liabilities were $132 million and $135 million as of
March 31, 2026 and December 31, 2025, respectively.
We record asset retirement obligations associated with the retirement of tangible long-lived assets as a liability in the period in which the
obligation is incurred and its fair value can be reasonably estimated. These obligations primarily represent nuclear decommissioning, legal
obligations to return leased premises to their initial state, or dismantle and repair specific alterations for certain leased sites. The liability is
measured at the present value of the obligation when incurred and is adjusted in subsequent periods. Corresponding asset retirement costs
are capitalized as part of the carrying value of the related long-lived assets and depreciated over the asset’s useful life. Our asset
retirement obligations were $544 million and $541 million as of March 31, 2026 and December 31, 2025, respectively, and are recorded in
All other current liabilities and All other liabilities in our Consolidated Statement of Financial Position. Of these amounts, $463 million and
$459 million, respectively, were related to nuclear decommissioning obligations.
NOTE 23**.** RESTRUCTURING CHARGES AND SEPARATION COSTS
Restructuring and Other Charges. The Company has undertaken or committed to various restructuring initiatives, including workforce
reductions and the consolidation of manufacturing and service facilities. Restructuring and other charges primarily include employee-related
termination benefits associated with workforce reductions, facility exit costs, asset write-downs, and cease-use costs. We expect the
majority of costs to be incurred within two years of the commitment of a restructuring initiative.
This table is inclusive of all restructuring charges and the charges are shown below for the business where they originated. Separately, in
our reported segment results, major restructuring programs are excluded from measurement of segment operating performance for internal
and external purposes; those excluded amounts are reported in Restructuring and other charges. See Note 24 for further information.
| RESTRUCTURING AND OTHER CHARGES | Three months ended March 31 | |
| 2026 | 2025 | |
| Workforce reductions | $36 | $41 |
| Plant closures and associated costs and other asset write-downs | 2 | 22 |
| Acquisition/disposition net charges and other | 57 | 5 |
| Total restructuring and other charges | $95 | $68 |
| Cost of equipment and services | $12 | $54 |
| Selling, general, and administrative expenses | 83 | 14 |
| Total restructuring and other charges | $95 | $68 |
| Power | $14 | $11 |
| Electrification | 62 | 2 |
| Wind | 6 | 51 |
| Other | 12 | 4 |
| Total restructuring and other charges(a) | $95 | $68 |
(a) Includes $72 million, and $28 million for the three months ended March 31, 2026 and 2025 respectively, primarily of non-cash
impairment, accelerated depreciation, and other charges not reflected in the liability table below.
Liabilities associated with restructuring activities were primarily related to workforce reductions and were recorded in All other current
liabilities, All other liabilities, and Non-current compensation and benefits in our Consolidated Statement of Financial Position.
| RESTRUCTURING LIABILITIES | 2026 | 2025 |
| Balance as of January 1 | $279 | $308 |
| Additions | 23 | 40 |
| Payments | (34) | (46) |
| Foreign exchange and other | (2) | (25) |
| Balance as of March 31 | $266 | $277 |
2026 1Q FORM 10-Q 20
Total restructuring and other charges incurred for the three months ended March 31, 2026 and 2025 primarily relate to programs to simplify
the organizational structure of, reduce operating costs in, and to right-size the businesses. The costs for the three months ended March 31,
2026 also include costs of $56 million related to the acquisition and integration of the remaining 50% stake of Prolec GE in our
Electrification segment. On July 21, 2025, we approved a restructuring plan (the Plan) accelerating previously announced enterprise
transformation activities to reduce general and administrative costs. We anticipate that the Plan will be substantially complete by mid-2026.
We expect to incur approximately $225 million in total costs in connection with the Plan primarily consisting of termination benefits
associated with a reduction in the workforce, with approximately $175 million of the costs resulting in cash expenditures. In the three
months ended March 31, 2026, we incurred $41 million of costs related to the Plan and have incurred $186 million of costs since inception
of the Plan.
Separation Costs. In connection with the separation from GE, the Company recognized separation costs of $23 million and $45 million for
the three months ended March 31, 2026 and 2025, respectively, in our Consolidated Statement of Income (Loss). Separation costs include
system implementations, advisory fees, one-time stock option grant, and other one-time costs, which are primarily recorded in Selling,
general, and administrative expenses.
NOTE 24**.** SEGMENT INFORMATION**.** Operating segments include components of an enterprise about which separate financial
information is available that is evaluated regularly by the Company’s Chief Operating Decision Maker (CODM) for the purpose of assessing
performance and allocating resources. The Company’s CODM is its Chief Executive Officer (CEO). Our operating activities are managed
through three segments: Power, Electrification, and Wind. These segments have been identified based on the nature of the products and
services sold and how the Company manages its operations.
The performance of these segments is principally measured based on revenues and segment EBITDA. Segment EBITDA is determined
based on the performance measures used by our CEO to assess the performance of each business in a given period. In connection with
that assessment, the CEO may exclude matters, such as charges for impairments, significant higher-cost restructuring programs,
manufacturing footprint rationalization and other similar expenses, acquisition costs and other related charges, certain gains and losses
from acquisitions or dispositions, and certain other non-operational items.
Consistent accounting policies have been applied by all segments for all reporting periods. See Note 1 for a description of our reportable
segments.
| Three months ended March 31 | ||
| TOTAL SEGMENT REVENUES BY BUSINESS UNIT | 2026 | 2025 |
| Gas Power | $4,066 | $3,605 |
| Nuclear Power | 757 | 661 |
| Hydro Power | 148 | 183 |
| Power | $4,971 | $4,449 |
| Power Transmission | $1,380 | $692 |
| Grid Systems Integration | 691 | 390 |
| Power Conversion & Storage | 477 | 381 |
| Grid Automation & Software | 411 | 378 |
| Electrification | 2,959 | 1,840 |
| Onshore Wind | $1,186 | $1,646 |
| Offshore Wind | 246 | 204 |
| Wind | $1,432 | $1,850 |
| Total segment revenues | $9,363 | $8,139 |
| SEGMENT EBITDA | ||||
| Three months ended March 31, 2026 | Power | Electrification | Wind | Total |
| Equipment revenues | $1,877 | $2,488 | $889 | $5,254 |
| Services revenues | 3,084 | 451 | 543 | 4,077 |
| Intersegment revenues | 11 | 21 | — | 32 |
| Segment revenues | 4,971 | 2,959 | 1,432 | 9,363 |
| Other revenues and elimination of intersegment revenues | (25) | |||
| Total revenues | 9,339 | |||
| Less:(a) | ||||
| Cost of revenues(b) | 3,638 | 2,027 | 1,649 | |
| Selling, general, and administrative expenses(b) | 445 | 354 | 128 | |
| Research and development expenses(b) | 132 | 107 | 36 | |
| Other segment items(c) | (55) | (57) | 1 | |
| Segment EBITDA | $811 | $528 | $(382) | $958 |
2026 1Q FORM 10-Q 21
| Three months ended March 31, 2025 | Power | Electrification | Wind | Total |
| Equipment revenues | $1,422 | $1,369 | $1,406 | $4,197 |
| Services revenues | 2,951 | 439 | 438 | 3,828 |
| Intersegment revenues | 76 | 31 | 7 | 114 |
| Segment revenues | 4,449 | 1,840 | 1,850 | 8,139 |
| Other revenues and elimination of intersegment revenues | (107) | |||
| Total revenues | 8,032 | |||
| Less:(a) | ||||
| Cost of revenues(b) | 3,368 | 1,272 | 1,840 | |
| Selling, general, and administrative expenses(b) | 468 | 330 | 134 | |
| Research and development expenses(b) | 109 | 82 | 33 | |
| Other segment items(c) | (13) | (49) | (11) | |
| Segment EBITDA | $517 | $205 | $(146) | $576 |
(a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
Intersegment expenses are included within the amounts shown.
(b) Excludes depreciation and amortization expenses.
(c) Primarily includes equity method investment income and other interest and investment income.
| Three months ended March 31 | ||
| RECONCILIATION OF SEGMENT EBITDA TO NET INCOME (LOSS) | 2026 | 2025 |
| Segment EBITDA | $958 | $576 |
| Corporate and other(a) | (62) | (119) |
| Restructuring and other charges | (94) | (67) |
| Gains (losses) on purchases and sales of business interests(b) | 4,494 | 19 |
| Separation costs(c) | (23) | (45) |
| Non-operating benefit income | 134 | 115 |
| Depreciation and amortization(d) | (341) | (203) |
| Interest and other financial income (charges) – net(e) | 27 | 55 |
| (Provision) benefit for income taxes | (344) | (67) |
| Net income (loss) | $4,750 | $264 |
(a) Includes interest (income) expense of zero and zero and (provision) benefit for income taxes of $(10) million and $(2) million for the
three months ended March 31, 2026 and 2025, respectively, related to our Financial Services business which, because of the nature of
its investments, is measured on an after-tax basis.
(b) Includes a pre-tax gain of $3,992 million related to the acquisition of the remaining 50% stake in Prolec GE from Xignux as a result of
the remeasurement of our previously held equity interest to fair value and an expense of $71 million for the impact of a fair value
adjustment to Prolec GE inventory that was recorded in Cost of equipment in the three months ended March 31, 2026. Includes a pre-
tax gain of $330 million related to the sale of our Proficy business in our Electrification segment in the three months ended March 31,
- Also includes unrealized and realized (gains) losses related to our interest in China XD Electric Co., Ltd, recorded in Net interest
and investment income (loss) which is part of Other income (expense) - net. See Note 19 for further information.
(c) Costs incurred in the separation from GE, including system implementations, advisory fees, one-time stock option grant, and other one-
time costs.
(d) Excludes depreciation and amortization expense related to Restructuring and other charges. Includes amortization of basis differences
included in Equity method investment income (loss) which is part of Other income (expense) - net.
(e) Consists of interest and other financial charges, net of interest income, other than financial interest related to our normal business
operations primarily with customers.
| ASSETS BY SEGMENT | March 31, 2026 | December 31, 2025 |
| Power | $26,917 | $26,847 |
| Electrification | 20,622 | 9,017 |
| Wind | 11,780 | 11,444 |
| Other(a) | 16,292 | 15,709 |
| Total assets | $75,612 | $63,016 |
(a)We classify deferred tax assets as "Other" for purposes of this disclosure.
| Property, plant, and equipment additions | Depreciation and amortization | ||||
| Three months ended March 31 | 2026 | 2025 | 2026 | 2025 | |
| Power | $168 | $84 | $117 | $116 | |
| Electrification(a) | 1,033 | 36 | 150 | 21 | |
| Wind | 95 | 50 | 58 | 54 | |
| Other | 28 | 15 | 16 | 15 | |
| Total | $1,324 | $186 | $341 | $205 |
(a)Includes $938 million of Property, plant, and equipment acquired with Prolec GE in the three months ended March 31, 2026.
2026 1Q FORM 10-Q 22
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