SUBSEQUENT EVENT

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

SUBSEQUENT EVENT

NOTE 24. SUBSEQUENT EVENT. On April 2, 2024 (the Distribution Date), GE completed the previously announced separation of its GE Vernova business, into a separate, independent publicly traded company, GE Vernova Inc. (GE Vernova). The separation was structured as a tax-free spin-off, and was achieved through GE's pro-rata distribution of all of the outstanding shares of GE Vernova to holders of GE common stock. On the Distribution Date, each holder of record of GE common stock received one share of GE Vernova common stock for every four shares of GE common stock held. As a result of the separation, GE Vernova became an independent public company that trades under the symbol “GEV” on the New York Stock Exchange and we will no longer consolidate GE Vernova into our financial results.

In connection with the separation, the historical results of our Power, Renewable Energy and Digital businesses and certain assets and liabilities included in the separation will be reported in the Company's consolidated financial statements as discontinued operations beginning in the second quarter of 2024.

Also in connection with the separation, the Company entered into various agreements to effect the separation and provide a framework for the relationship between it and GE Vernova, including a Separation and Distribution Agreement (SDA), a Tax Matters Agreement and a Transition Services Agreement (TSA).

In connection with the separation and as a result of the legal split of certain plans as set forth in Note 13 in our Annual Report on Form 10-K for the year ended December 31, 2023, net liabilities of approximately $1.7 billion associated with GE's postretirement benefit plans, including a portion of the principal pension plans, the principal retiree benefit plans and other pension plans were transferred to GE Vernova. Deferred compensation arrangements and other compensation and benefits obligations of approximately $0.2 billion were also transferred to GE Vernova. The legal split and transfer of the plans and the related liabilities and obligations to GE Vernova will impact our assumptions and projections used to determine the funding and costs of the Company’s remaining plans.

In connection with the separation, the Company contributed $0.5 billion of cash to fund GE Vernova’s future operations such that GE Vernova’s cash balance on the date of Separation was $4.2 billion, inclusive of $0.1 billion of cash reported in assets of businesses held for sale.

Following the separation, the Company has remaining performance and bank guarantees on behalf of GE Vernova. To support GE Vernova in selling products and services globally, the Company often entered into contracts on behalf of GE Vernova or issued parent company guarantees or trade finance instruments supporting the performance of what were subsidiary legal entities transacting directly with customers, in addition to providing similar credit support for non-customer related activities of GE Vernova (collectively, “GE credit support”). Under the SDA, GE Vernova is obligated to use reasonable best efforts to replace the Company as the guarantor on or terminate all such credit support instruments. Until such termination or replacement, in the event of non-fulfillment of contractual obligations by the relevant obligor(s), the Company could be obligated to make payments under the applicable instruments. Under the SDA, GE Vernova is obligated to reimburse and indemnify the Company for any such payments. Beginning in 2025, GE Vernova will pay a quarterly fee to the Company based on amounts related to the GE credit support. The Company’s maximum aggregate exposure under the GE credit support cannot be reasonably estimated given the breadth of the portfolio across each of the GE Vernova businesses except for certain financial guarantees and trade finance instruments with a maximum exposure of approximately $1.5 billion, which are not expected to exceed a year beyond separation. The underlying obligations are predominantly customer contracts that GE Vernova performs in the normal course of its business. We have no known instances historically where payments or performance from the Company were required under parent company guarantees relating to GE Vernova customer contracts. The Company also has performance obligations related to GE Vernova's supply chain finance program and an environmental matter with a maximum aggregate exposure of $2.3 billion, of which $1.6 billion is not expected to exceed a year beyond separation.

In addition, under the SDA, TSA, and TMA agreements, the Company also has an obligation to indemnify GE Vernova for certain of its technology costs, separation costs for certain facilities, severance costs, environmental matters and tax matters of approximately $0.6 billion.