GENERAL ELECTRIC CO

General Electric Company, operating as GE Aerospace, is a global aerospace leader with the industry's largest and growing commercial propulsion fleet. The Company's installed base of approximately 50,000 commercial and 30,000 military engines, including parked aircraft in addition to fleet in service, supports its aftermarket services business, which represents approximately 70% of revenue, reflecting the strength of customer demand across the business. GE Aerospace serves customers in approximately 120 countries, with manufacturing and service operations carried out at 70 facilities located in 23 states in the United States and Puerto Rico, of which 24 are owned, and at 62 facilities located in 23 other countries, of which 30 are owned.

The markets in which GE Aerospace operates are highly competitive in terms of pricing, product and service quality, durability and reliability, product development and introduction time, intellectual property, customer service, financing terms, the ability to respond to shifts in market demand and the ability to attract and retain skilled talent. Key competitors in commercial engine services include other global engine manufacturers and third-party MRO shops. In Defense & Propulsion Technologies, the Company competes against a range of U.S. and non-U.S. companies or groups for contract and subcontract awards by governments and their prime contractors. The Company's installed base of approximately 50,000 commercial and 30,000 military engines supports its aftermarket services business, which represents approximately 70% of revenue.

GE Aerospace generates revenue through the design, development, manufacture, and servicing of jet engines for commercial airframes, business aviation, and aeroderivative applications, as well as defense engines and critical aircraft systems. Services include maintenance, repair and overhaul (MRO) of engines and the sale of spare parts, offered under a variety of arrangements such as long-term service agreements, spare parts agreements, or time and material contracts. The Company's aftermarket services business represents approximately 70% of revenue, reflecting the strength of customer demand across the business. The Company's customers for equipment and services consist primarily of airframers and airlines, including both Boeing and Airbus, and third-party MRO shops, to whom it sells spare parts and licenses MRO technology.

GE Aerospace operates through two reportable segments: Commercial Engines & Services (CES) and Defense & Propulsion Technologies (DPT). CES designs, develops, manufactures and services jet engines for commercial airframes, as well as business aviation and aeroderivative applications. CES was approximately 73% of total GE Aerospace revenue for the year ended December 31, 2025, with services representing 75% of total CES revenue. CES engines power aircraft in all commercial categories—narrowbody, widebody and regional—and this includes engines sold by joint venture partners, the most significant of which is CFM International, a 50-50 non-consolidated joint venture with Safran Aircraft Engines. In the narrowbody aircraft market, the Company is in the midst of a significant ramp in production of the LEAP engine, which entered into service in 2016 and is expected in the coming years to overtake the mature CFM56 as the industry's largest fleet. In the widebody aircraft market, the Company has a range of engine platforms including the more mature CF6 and GE90 engines, the GEnx engine that entered into service in 2011, and the newest engine, the GE9X, that will power the Boeing 777X. For the year ended December 31, 2025, CES segment revenue was $33,314 million ¹ and segment profit was $8,861 million ² with a segment profit margin of 26.6% ³.

Defense & Propulsion Technologies (DPT) is a leading provider of defense engines and critical aircraft systems, consisting of Defense & Systems and Propulsion & Additive Technologies businesses. DPT was approximately 23% of total GE Aerospace revenue for the year ended December 31, 2025, with services representing 51% of total DPT revenue. Defense & Systems designs, develops, manufactures and services jet engines and avionics and power systems for governments, militaries and commercial airframers. Significant product platforms include the F110, F404 and F414 for combat engines, the T408, T700 and T901 for rotorcraft engines and the LM2500 for mobility and marine engines. Propulsion & Additive Technologies businesses primarily design, develop, manufacture and support aircraft components and systems for both commercial and military end users under the Avio Aero, Unison, Dowty Propellers and Colibrium Additive brands. For the year ended December 31, 2025, DPT segment revenue was $10,554 million ⁴ and segment profit was $1,296 million ⁵ with a segment profit margin of 12.3% ⁶.

In 2025, GE Aerospace secured a series of landmark engine commitments from leading global carriers, spanning GE9X, GEnx and LEAP programs, including major selections by Qatar Airways, Emirates International Airlines Group, ANA Holdings, Malaysia Aviation Group, Korean Air, Cathay Pacific and Pegasus. The Company announced an Indefinite Delivery/Indefinite Quantity (IDIQ) contract from the U.S. Air Force valued up to $5 billion ⁷ to support foreign military sales for F110-GE-129 engines, and received an order from Hindustan Aeronautics (HAL) valued at $1.6 billion ⁸ for F404-GE-IN20 engines. The Company invested $1 billion ⁹ in U.S. manufacturing and hired 5,000 ¹⁰ U.S. workers in 2025, and is investing $1 billion ¹¹ to increase MRO capacity, including $500 million ¹² to increase LEAP MRO capacity by expanding several sites. In July 2025, GE Aerospace issued a total of $2.0 billion ¹³ in aggregate principal amount of senior unsecured debt, comprised of $1.0 billion ¹⁴ of 4.3% senior notes due 2030, and $1.0 billion ¹⁵ of 4.9% senior notes due 2036. In 2025, the Company repurchased 29.6 million ¹⁶ shares for $7.4 billion ¹⁷, including repurchases of 20.1 million ¹⁸ shares for $5.2 billion ¹⁹ using accelerated stock repurchases. The Board of Directors authorized a new share repurchase program for up to $20 billion ²⁰ approved in December 2025.

For the year ended December 31, 2025, total revenue was $45,855 million ²¹, an increase of $7.2 billion, or 18%, compared to $38,702 million ²² for the year ended December 31, 2024. Net income from continuing operations attributable to common shareholders was $8,601 million ²³ compared to $6,670 million ²⁴ in the prior year. Diluted continuing EPS was $8.05 ²⁵ compared to $6.09 ²⁶ in 2024. Segment profit was $10.0 billion ²⁷, an increase of $2.4 billion, and segment profit margin was 21.8% ²⁸, an increase of 210 basis points. Adjusted EPS was $6.37 ²⁹, an increase of 38%. Free cash flow was $7.7 billion ³⁰ compared to $6.2 billion ³¹ in 2024.

A key growth vector for GE Aerospace is the significant ramp in production of the LEAP engine, which entered into service in 2016 and is expected in the coming years to overtake the mature CFM56 as the industry's largest fleet, which is expected to also drive a significant increase in shop visits and need for MRO capacity as LEAP engines come due for services. The Company is investing $1 billion ³² to increase MRO capacity, including $500 million ³³ to increase LEAP MRO capacity by expanding several sites. Another growth vector is the CFM International RISE program, which is advancing a suite of pioneering technologies including Open Fan, compact core, and hybrid electric systems with more than 350 tests completed toward ground and flight tests this decade. In 2025, the Company began dust ingestion testing on next-generation HPT blades for the RISE program's compact engine core development. Additionally, in DPT, the Company achieved important development and testing milestones on two advanced engines for the U.S. war fighter, and achieved first flight for the T901 on a Black Hawk helicopter, with investments including the development of advanced propulsion solutions such as adaptive cycle combat engines.

The Company is 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 its products and services. Management expects the impact of supply chain constraints and inflation will continue, and the Company is continuing to take action to mitigate the impacts. 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, and the Company is taking measures to control cost and implementing pricing actions to primarily mitigate the remaining impact from tariffs.

GE Aerospace is investing in its manufacturing facilities, overhaul facilities and its supply chain to increase production and strengthen yield in order to improve delivery to customers. The Company is expanding capacity across its global maintenance, repair and overhaul (MRO) network to support aftermarket demand, investing $1 billion ³⁴ to increase MRO capacity, including $500 million ³⁵ to increase LEAP MRO capacity by expanding several sites. The Company invested $1 billion ³⁶ in U.S. manufacturing and hired 5,000 ³⁷ U.S. workers in 2025. At December 31, 2025, GE Aerospace and consolidated affiliates employed approximately 57,000 ³⁸ people, of whom approximately 30,000 ³⁹ were employed in the United States.

GE Aerospace funded research and development was $1,580 million ⁴⁰ in 2025, compared to $1,286 million ⁴¹ in 2024 and $1,011 million ⁴² in 2023. Total research and development, including customer and partner funded, was $2,989 million ⁴³ in 2025. Additions to property, plant and equipment and internal-use software were $1,273 million ⁴⁴ in 2025. In March 2024, the Company announced that the Board of Directors had authorized the repurchase of up to $15.0 billion ⁴⁵ of common stock, and as of December 31, 2025, the Company had repurchased $12.3 billion ⁴⁶ in total under this authorization. A new authorization for up to $20 billion ⁴⁷ was approved by the Board of Directors in December 2025. Dividends paid to shareholders were $1,452 million ⁴⁸ in 2025.

Global material availability and supplier delivery performance continue to cause disruptions and have impacted the Company's production and delivery of equipment and services to its customers. The Company operates in a supply-constrained environment that has impacted the industry for the past several years, and management expects the impact of supply chain constraints and inflation will continue. As the Company operates in a highly dynamic tariff environment, tariffs will result in additional cost for the Company and its suppliers. The Company is continuing to monitor the tariff environment, including relevant U.S. Supreme Court rulings. Additionally, the Company faces risks from changes in government spending and policies that can adversely affect its business strategy or financial performance, particularly in its defense business which is heavily influenced by the spending and policy actions of the U.S. federal government and allied governments.

A material risk is the Company's exposure to its run-off insurance operations, with long-term care insurance reserves of $25,792 million ⁴⁹ at December 31, 2025, where a 5% increase in incidence rates would have an estimated adverse impact of $600 million ⁵⁰ to the projected present value of future cash flows, and a 5% reduction in disabled life deaths would have an estimated adverse impact of $1,200 million ⁵¹. The Company also retains significant exposure to the Bank BPH mortgage portfolio in Poland, where ongoing litigation related to residential mortgage loans denominated in or indexed to foreign currencies could require additional capital contributions. Another key risk is the Company's dependence on the commercial aviation sector, which is cyclical and influenced by factors such as air travel demand, aircraft fuel prices, airline consolidation, and regulatory changes; a prolonged aircraft grounding, certification delays, or other adverse developments with aircraft powered by the Company's engines could materially affect results. The Company operates in a supply-constrained environment, and supply chain capacity shortfalls and disruptions continue to pose challenges, with the Company expecting the impact of supply chain constraints and inflation to continue. Additionally, the Company faces risks from changes in U.S. and foreign government defense spending and policies, as its defense business is heavily influenced by the spending of the U.S. federal government and allied governments, and the termination of one or more government contracts could negatively impact reputation, competitive position, and financial results.

Management's message emphasizes that GE Aerospace is a global aerospace leader with the industry's largest and growing commercial propulsion fleet, and that through FLIGHT DECK, the Company's proprietary lean operating model, it is prioritizing safety, quality, delivery and cost to drive focused execution and bridge strategy to results. The Company is focused on delivering against its strategic priorities for today (ramping services and equipment), tomorrow (expanding capacity and capabilities) and the future (inventing the future of flight). Management highlights that the Company secured a series of landmark engine commitments in 2025 from leading global carriers, reinforcing its leadership on next-generation widebody and narrowbody platforms and providing strong multi-year visibility across equipment and services. The Company is committed to maintaining strong investment grade ratings with a disciplined capital allocation strategy, intending to return a portion of free cash flow to shareholders through dividends and share repurchases, and pursuing merger and acquisition investments in a disciplined way focused on strategic, operational and financial synergies.