RESTRUCTURING CHARGES AND SEPARATION COSTS

3 Months Ended

Mar. 31, 2023

Restructuring and Related Activities [Abstract]

RESTRUCTURING CHARGES AND SEPARATION COSTS

NOTE 20. RESTRUCTURING CHARGES AND SEPARATION COSTS

RESTRUCTURING AND OTHER CHARGES. This table is inclusive of all restructuring charges in our segments and at Corporate, and the charges are shown below for the business where they originated. Separately, in our reported segment results, significant, higher-cost 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 for Corporate.

	Three months ended March 31
RESTRUCTURING AND OTHER CHARGES	2023		2022
Workforce reductions	$	66	$	13
Plant closures & associated costs and other asset write-downs	82		26
Acquisition/disposition net charges and other	12		9
Total restructuring and other charges	$	161	$	48
Cost of equipment/services	$	36	$	27
Selling, general and administrative expenses	125		25
Other (income) loss	—		(3)
Total restructuring and other charges	$	161	$	48
Aerospace	$	4	$	5
Renewable Energy	65		6
Power	19		34
Corporate	72		3
Total restructuring and other charges	$	161	$	48
Restructuring and other charges cash expenditures	$	137	$	127

An analysis of changes in the liability for restructuring follows.

	2023		2022
Balance at January 1	$	977	$	825
Additions	86		9
Payments	(87)		(115)
Effect of foreign currency and other	—		(9)
Balance at March 31(a)	$	976	$	710

(a) Includes actuarial determined post-employment severance benefits reserve of $353 million and $322 million as of March 31, 2023 and 2022, respectively. Also includes $64 million reserve in discontinued operations related to a GE technology contract which is indemnified by GE HealthCare as of March 31, 2023.

For the three months ended March 31, 2023, restructuring and other initiatives primarily included exit activities related to the restructuring program announced in the fourth quarter of 2022 reflecting lower Corporate shared-service and footprint needs as a result of the GE HealthCare spin-off. It also includes exit activities associated with the plan announced in the fourth quarter of 2022 to undertake a restructuring program across our businesses planned to be part of GE Vernova, primarily reflecting the selectivity strategy to operate in fewer markets and to simplify and standardize product variants at Renewable Energy. We recorded total charges of $161 million, consisting of $75 million primarily in non-cash impairment, accelerated depreciation and other charges, not reflected in the table above, and $86 million primarily in employee workforce reduction and contract related charges, which are reflected in the table above. We incurred $137 million in cash outflows related to restructuring actions, primarily for employee severance payments.

For the three months ended March 31, 2022, restructuring and other initiatives primarily included exit activities at our Power business related to our new coal build wind-down actions announced in the third quarter of 2021, which included the exit of certain product lines, closing certain manufacturing and office facilities, and workforce reduction programs. We recorded total charges of $48 million, consisting of $39 million primarily in non-cash impairment, accelerated depreciation and other charges, not reflected in the table above, and $9 million primarily in employee workforce reduction charges, which are reflected in the table above. We incurred $127 million in cash outflows related to restructuring actions, primarily for employee severance payments.

SEPARATION COSTS. In November 2021, the company announced its plan to form three industry-leading, global public companies focused on the growth sectors of aviation, healthcare, and energy. As a result of this plan, we expect to incur separation, transition, and operational costs, which will depend on specifics of the transactions.

For the three months ended March 31, 2023, we incurred pre-tax separation expense of $205 million and paid $204 million in cash primarily related to employee costs, professional fees, costs to establish certain stand-alone functions and information technology systems, and other transformation and transaction costs to transition to three stand-alone public companies. These costs are presented as separation costs in our consolidated Statement of Earnings (Loss). In addition, we incurred $56 million of net tax expense, including taxes associated with planned legal entity restructuring and changes to indefinite reinvestment of foreign earnings. For the three months ended March 31, 2022, we incurred pre-tax separation costs of $99 million, spent $3 million in cash, and recognized $24 million of net tax expense related to separation activities.

As discussed in Note 2, GE completed the previously announced separation of its HealthCare business into a separate, independent publicly traded company, GE HealthCare Technologies Inc. (GE HealthCare). As a result, pre-tax separation costs specifically identifiable to GE HealthCare are now reflected in discontinued operations. We incurred $20 million in pre-tax costs and recognized $4 million of tax benefits for both the three months ended March 31, 2023 and 2022, and spent $85 million in cash related to GE HealthCare for the three months ended March 31, 2023.