ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS . The following discussion and analysis of our financial condition and results of operations should be read in conjunction
with our consolidated and combined financial statements, which are prepared in conformity with U.S. generally accepted accounting
principles (GAAP), and corresponding notes included elsewhere in this Annual Report on Form 10-K . The following discussion and analysis
provides information that management believes to be relevant to understanding the financial condition and results of operations of the
Company for the years ended December 31, 2025 and 2024 . Unless otherwise noted, tables are presented in U.S. dollars in millions,
except for per-share amounts which are presented in U.S. dollars. 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. Unless otherwise noted,
statements related to changes in operating results relate to the corresponding period in the prior year. Refer to the "Management's
Discussion and Analysis of Financial Condition and Results of Operations" included in Part II, Item 7 of our Annual Report on Form 10-K for
the fiscal year ended December 31, 2024 , for discussions of results for the years ended December 31, 2024 versus 2023 .
In the accompanying analysis of financial information, we sometimes use information derived from consolidated and combined 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. For the reasons we use these non-GAAP financial measures and the reconciliations to their most
directly comparable GAAP financial measures, see " — Non-GAAP Financial Measures."
Financial Presentation Under GE Ownership. We completed our separation from General Electric Company (GE), which now operates
as GE Aerospace, on April 2, 2024 (the Spin-Off). For further information, see Note 1 in the Notes to the consolidated and combined
financial statements.
Prolec GE. On October 21, 2025, we announced that GE Vernova will acquire the remaining fifty percent stake of Prolec GE, our
unconsolidated joint venture with Xignux. Prolec GE is a leading grid equipment supplier, producing transformers across most ratings and
voltages with approximately 10,000 global employees across seven manufacturing sites globally, including five in the U.S. Under the
purchase agreement, GE Vernova will pay approximately $5.3 billion at closing, expected to be funded equally between cash and debt. The
acquisition is expected to close in February 202 6 .
Tariffs. Throughout 2025, the United States and other countries imposed global tariffs. These tariffs have resulted, and any future tariffs will
result in additional costs to us. The total cost impact from the global tariffs for the full year 2025 was approximately $250 million , after taking
into consideration contractual protections and mitigating actions. The future impacts of tariffs may be significantly different and are subject
to several factors including the amount, duration, scope and nature of the tariffs, countermeasures that countries take, mitigating or other
actions we take, and contractual implications.
Power Conversion & Storage. Effective January 1, 2025 , our Power Conversion and Solar & Storage Solutions business units within our
Electrification segment were combined to form a new business unit, Power Conversion & Storage. Historical financial information presented
within this report conforms to the new business unit structure within the Electrification segment.
TRENDS AND FACTORS IMPACTING OUR PERFORMANCE. We believe our performance and future success depends on a number of
factors that present significant opportunities for us but also pose risks and challenges, including those discussed below.
Our worldwide operations are affected by regional and global factors impacting energy demand, including industry trends like
decarbonization, an increasing demand for renewable energy alternatives, governmental regulations and policies, and changes in broader
economic and geopolitical conditions. These trends, along with the growing focus on the digitization and sustainability of the electricity
infrastructure, can impact performance across each of our business segments. We believe that our industry-defining technologies and
commitment to innovation position us well to capitalize on, as well as mitigate adverse impacts from, these long-term trends:
• Demand growth for electricity generation – Significant investment, infrastructure, and supply diversity will be essential to help meet
forecasted energy demand growth arising from population and global economic growth.
• Decarbonization – The urgency to combat climate change is fueling technology advancements that improve the economic viability and
efficiency of renewable energy alternatives and facilitate the transition to a more sustainable power sector.
• Evolving generation mix – The power industry is shifting from coal generation to more electricity generated from zero- or low-carbon
energy sources, and an evolving balance of generation sources will be necessary to maintain a reliable, resilient, and affordable
system.
• Energy resilience & security – Threats and challenges from extreme weather events, cyber-attacks, and geopolitical tensions have
increased focus on the strength and resilience of power generation and transmission and reinforced the need for a diversified mix of
energy sources.
• Grid modernization and investment – Increased demand and the integration of advanced generation and storage solutions drive the
need to update aging infrastructure with new grid integration and automation solutions.
• Regulatory and policy changes – Government policies and regulations, such as carbon pricing, renewable energy mandates, and
subsidies for renewable energy technologies, can significantly impact the power generation landscape. Staying ahead of regulatory
changes and adapting to new compliance requirements is crucial for maintaining a competitive advantage.
• Financial and investment dynamics – Access to capital and investment trends in the energy sector can influence the development and
deployment of new power generation projects. Understanding market dynamics and securing funding are key to progressing strategic
initiatives.
2025 FORM 10-K 24
RESULTS OF OPERATIONS
Summary of Results. RPO was $150.2 billion and $119.0 billion as of December 31, 2025 and 2024 , respectively. For the year ended
December 31, 2025 , total revenues were $38.1 billion , an increase of $3.1 billion for the year. N et income (loss) was $4.9 billion , an
increase of $3.3 billion in net income for the year, and net income (loss) margin was 12.8% . Diluted earnings (loss) per share was $17.69
for the year ended December 31, 2025 , an increase in diluted earnings per share of $12.11 for the year. Cash flows from (used for)
operating activities were $5.0 billion and $2.6 billion for the years ended December 31, 2025 and 2024 , respectively.
For the year ended December 31, 2025 , Adjusted EBITDA* was $3.2 billion , an increase of $1.2 billion . Free cash flow* was $3.7 billion
and $1.7 billion for the years ended December 31, 2025 and 2024 , respectively.
RPO, a measure of backlog, includes unfilled firm and unconditional customer orders for equipment and services, excluding any purchase
order that provides the customer with the ability to cancel or terminate without incurring a substantive penalty. Services RPO includes the
estimated life of contract sales related to long-term service agreements which remain unsatisfied at the end of the reporting period,
excluding contracts that are not yet active. Services RPO also includes the estimated amount of unsatisfied performance obligations for
time and material agreements, material services agreements, spare parts under purchase order, multi-year maintenance programs, and
other services agreements, excluding any order that provides the customer with the ability to cancel or terminate without incurring a
substantive penalty. See Note 9 in the Notes to the consolidated and combined financial statements for further information.
RPO December 31
Equipment
Services
Total RPO
As of December 31, 2025 , RPO increase d $31.2 billion ( 26% ) from December 31, 2024 , primarily at Power, due to increases at Gas
Power due to Heavy-Duty Gas Turbine and Aeroderivative equipment and contractual services , and increases at Steam Power services,
Hydro Power equipment, and Nuclear Power equipment, partially offset by a decrease at Steam Power equipment; at Electrification,
primarily due to demand for alternating current substation solutions, switchgear, and transformers at Grid Solutions and synchronous
condensers and energy storage at Power Conversion & Storage; partially offset at Wind, due to a decrease at Offshore Wind as we
continue to execute on our contracts and a decrease in orders at Onshore Wind as U.S. customers dealt with policy uncertainty .
REVENUES
Equipment revenues
Services revenues
Total revenues
For the year ended December 31, 2025 , total revenues increase d $3.1 billion ( 9% ). Equipment revenues increased at Electrification,
primarily at Grid Solutions due to growth in switchgear, high-voltage direct current solutions, and alternating current substation solutions
volume and at Power Conversion & Storage; and at Power, due to increases in Gas Power from Heavy-Duty Gas Turbine and
Aeroderivative units deliveries and favorable price; partially offset at Wind, due to decreases at Offshore Wind from the nonrecurrence of
revenues recorded on the settlement of a previously canceled project in the third quarter of 2024, project delays, and fewer nacelles
produced in the year, and decreases at LM Wind Power due to lower volume from footprint reduction, partially offset by increases at
Onshore Wind due to improved pricing and delivery of more units. Services revenues increased at Power, driven by Gas Power higher
parts volume and favorable price; at Electrification, primarily due to growth at Grid Solutions; and at Wind due to higher transactional
services.
Organic revenues* exclude the effects of acquisitions, dispositions, and foreign currency. Excluding these effects, organic revenues*
increase d $3.2 billion ( 9% ), organic equipment revenues* increased $2.0 billion ( 11% ) and organic services revenues* increased $1.2
billion ( 7% ). Organic revenues * increased at Electrification and Power, partially offset at Wind.
EARNINGS (LOSS)
Operating income (loss)
Net income (loss)
Net income (loss) attributable to GE Vernova
Adjusted EBITDA*
Diluted earnings (loss) per share(a)
(a) The computation of earnings (loss) per share for all periods through April 1, 2024 was calculated using 274 million common shares that
were issued upon Spin-Off and excludes Net loss (income) attributable to noncontrolling interests. For periods prior to the Spin-Off, the
Company participated in various GE stock-based compensation plans, and there were no dilutive equity instruments as there were no
equity awards of GE Vernova outstanding prior to Spin-Off.
For the year ended December 31, 2025 , operating income (loss) was $1.4 billion , a $0.9 billion increase , primarily due to: an increase in
segment results at Electrification of $0.8 billion , primarily due to volume, favorable price, and productivity at Grid Solutions; at Power of $0.6
billion , primarily at Gas Power and Steam Power due to favorable price and increased productivity, partially offset by additional expenses to
support investments at Nuclear Power and Gas Power and the impact of inflation ; partially offset by a slight decrease in segment results at
Wind o f less than $0.1 billion , primarily at Offshore Wind due to the nonrecurrence of a gain recorded on the settlement of a previously
canceled project in the third quarter of 2024 and a termination of a supply agreement in the first quarter of 2025 , partially offset by lower
contract losses, and decreases from the impact of tariffs across the segment, partially offset by increases at Onshore Wind due to improved
*Non-GAAP Financial Measure
2025 FORM 10-K 25
pricing on an increased number of units delivered; the nonrecurrence of $0.3 billion received related to an arbitration refund in the second
quarter of 2024 ; the nonrecurrence of a $0.1 billion benefit related to deferred intercompany profit that was recognized upon GE retaining
the renewable energy U.S. tax equity investments in connection with the Spin-Off; and higher corporate costs required to operate as a
stand-alone public company.
Net income (loss) and Net income (loss) margin were $4.9 billion and 12.8% , respectively, for the year ended December 31, 2025 , an
increase of $3.3 billion and 8.3% , respectively, primarily due to a decrease in provision for income taxes of $3.0 billion driven by a $2.9
billion benefit primarily from a U.S. tax valuation allowance release in the fourth quarter of 2025 and an increase in operating income (loss)
of $0.9 billion , partially offset by a decrease in other income (expense) - net of $0.6 billion driven by the nonrecurrence of a $1.0 billion pre-
tax gain from the sale of a portion of Steam Power nuclear activities to E lectricité de France S.A. ( EDF) in the second quarter of 2024.
Adjusted EBITDA* and Adjusted EBITDA margin* were $3.2 billion and 8.4% , respectively, for the year ended December 31, 2025 , an
increase of $1.2 billion and 2.6% , respectively, primarily driven by increases in segment results at Electrification and Pow er.
SEGMENT OPERATIONS . Segment revenues include sales of equipment and services by our segments. Segment EBITDA is
determined based on performance measures used by our Chief Operating Decision Maker, who is our Chief Executive Officer (CEO), to
assess the performance of each business in a given period. In connection with that assessment, the CEO may exclude certain non-cash
charges, such as depreciation and amortization, impairments and other matters, major restructuring programs, and certain gains and
losses from purchases and sales of business interests. Certain corporate costs, including those related to shared services, employee
benefits, and information technology (IT), are allocated to our segments based on usage or their relative net cost of operations.
SUMMARY OF REPORTABLE SEGMENTS
Power
Wind
Electrification
Eliminations and other
Total revenues
Segment EBITDA
Power
Wind
Electrification
Corporate and other(a)
Adjusted EBITDA*(b)
(a) Includes our Financial Services business and other general corporate expenses, including costs required to operate as a stand-alone
public company.
(b) See "—Non-GAAP Financial Measures" for additional information related to Adjusted EBITDA*. Adjusted EBITDA* includes interest and
other financial income (charges) and the benefit (provision) for income taxes of Financial Services as this business is managed on an
after-tax basis due to the nature of its investments.
POWER
Orders in units
Gas Turbines
Heavy-Duty Gas Turbines
HA-Turbines
Aeroderivatives
Gas Turbine Gigawatts
Sales in units
Gas Turbines
Heavy-Duty Gas Turbines
HA-Turbines
Aeroderivatives
Gas Turbine Gigawatts
RPO December 31
Equipment
Services
Total RPO
RPO as of December 31, 2025 increased $21.0 billion ( 29% ) from December 31, 2024 , primarily at Gas Power due to Heavy-Duty Gas
Turbine and Aeroderivative equipment and contractual services, and increases at Steam Power services, Hydro Power equipment, and
Nuclear Power equipment, partially offset by a decrease at Steam Power equipment.
*Non-GAAP Financial Measure
2025 FORM 10-K 26
SEGMENT REVENUES AND EBITDA
Gas Power
Nuclear Power
Hydro Power
Steam Power
Total segment revenues
Equipment
Services
Total segment revenues
Segment EBITDA
Segment EBITDA margin
For the year ended December 31, 2025 , segment revenues were up $1.6 billion ( 9% ) and segment EBITDA was up $0.6 billion
Segment revenues increased $1.9 billion ( 10% ) organically*, primarily at Gas Power equipment from increased Heavy-Duty Gas Turbine
and Aeroderivative deliveries and favorable price, and at Gas Power services due to higher parts volume, contractual services, and
favorable price.
Segment EBITDA increased $0.4 billion ( 18% ) organically*, primarily at Gas Power and Steam Power due to favorable price and increased
productivity, partially offset by additional expenses to support investments at Nuclear Power and Gas Power and the impact of inflation.
WIND
Onshore and Offshore Wind orders in units
Wind Turbines
Repower Units
Wind Turbine and Repower Units Gigawatts
Onshore and Offshore Wind sales in units
Wind Turbines
Repower Units
Wind Turbine and Repower Units Gigawatts
RPO December 31
Equipment
Services
Total RPO
R PO as of December 31, 2025 decreased $1.1 billion ( 5% ) from December 31, 2024 , primarily due to a decrease at Offshore Wind as we
continue to execute on our contracts and a decrease in orders at Onshore Wind as U.S. customers dealt with policy uncertainty.
SEGMENT REVENUES AND EBITDA
Onshore Wind
Offshore Wind
LM Wind Power
Total segment revenues
Equipment
Services
Total segment revenues
Segment EBITDA
Segment EBITDA margin
For the year ended December 31, 2025 , segment revenues were down $0.6 billion ( 6% ) and segment EBITDA decreased s lightly
Segment revenues decreased $0.6 billion ( 6% ) organically*, primarily at Offshore Wind due to the nonrecurrence of revenues recorded on
the settlement of a previously canceled project of $0.5 billion in the third quarter of 2024, project delays, and fewer nacelles produced in the
year , and decreases at LM Wind Power due to lower volume from footprint reduction, partially offset by increases at O nshore Wind due to
improved pricing , delivery of more units, and higher transactional services.
Segment EBITDA increased $0.1 billion ( 10% ) organically*, primarily at Onshore Wind due to improved pricing on an increased number of
units delivered, partially offset by decreases at Offshore Wind due to the nonrecurrence of a gain recorded on the settlement of a previously
canceled project of $0.3 billion in the third quarter of 2024 and a termination of a supply agreement in the first quarter of 2025 , partially
offset by lower contract losses of $0.4 billion. There were also decreases from the impact of tariffs across the segment.
*Non-GAAP Financial Measure
2025 FORM 10-K 27
ELECTRIFICATION
RPO December 31
Equipment
Services
Total RPO
RPO as of December 31, 2025 increased $11.2 billion ( 48% ) from December 31, 2024 , primarily due to demand for alternating current
substation solutions, switchgear, and transformers at Grid Solutions and synchronous condensers and energy storage at Power Conversion
& Storage.
SEGMENT REVENUES AND EBITDA
Grid Solutions
Power Conversion & Storage
Electrification Software
Total segment revenues
Equipment
Services
Total segment revenues
Segment EBITDA
Segment EBITDA margin
For t he y ear ended December 31, 2025 , segment revenues were up $2.1 billion ( 28% ) and segment EBITDA was up $0.8 billion .
Segment revenues increased $2.0 billion ( 26% ) organically*, primarily at Grid Solutions due to growth in switchgear, high-voltage direct
current solutions, and alternating current substation solutions volume and at Power Conversion & Storage.
Segment EBITDA increased $0.7 billion organically*, primarily due to volume, favorable price, and productivity at Grid Solutions.
OTHER INFORMATION
Gross Profit and Gross Margin. Gross profit was $7.5 billion , $6.1 billion , and $4.8 billion and gross margin was 19.8% , 17.4% , and
14.5% for the years ended December 31, 2025 , 2024 , and 2023 , respectively. The increase in gross profit in 2025 was due to an increase
at Electrification due to volume, favorable price, and productivity at Grid Solutions; an increase at Power due to Gas Power and Steam
Power favorable price and increased productivity, partially offset by the impact of inflation; partially offset by a slight decrease at Wind due
to decreases at Offshore Wind from the nonrecurrence of a gain recorded on the settlement of a previously canceled project in the third
quarter of 2024 and a termination of a supply agreement in the first quarter of 2025 , partially offset by lower contract losses, and decreases
from the impact of tariffs across the segment, partially offset by increases at Onshore Wind due to improved pricing on an increased
number of units delivered.
Selling, General, and Administrative. Selling, general, and administrative expense s were $4.9 billion , $4.6 billion , and $4.8 billion and
comprised 13.0% , 13.3% , and 14.6% of revenues for the years ended December 31, 2025 , 2024 , and 2023 , respectively. The increase in
costs in 2025 was primarily attributable to the nonrecurrence of $0.3 billion received related to an arbitration refund in 2024 , higher stock-
based compensation, labor inflation, and higher corporate costs required to operate as a stand-alone public company, partially offset by
cost reduction activities and lower costs associated with the portion of Steam Power nuclear activities sold to EDF in 2024 .
Restructuring and Other Charges. We continuously evaluate our cost structure and are implementing several restructuring and process
transformation actions considered necessary to simplify our organizational structure. In addition, in connection with the Spin-Off, we
incurred and will continue to incur certain one-time separation costs and recognized a benefit related to deferred intercompany profit upon
GE retaining the renewable energy U.S. tax equity investments in the second quarter of 2024. See Note 23 in the Notes to the consolidated
and combined financial statements for further information.
Research and Development (R&D). We conduct R&D activities to continually enhance our existing products and services, develop new
products and services to meet our customers’ changing needs and demands, and address new market opportunities. In addition to funding
R&D internally, we also receive funding externally from our customers, partners, and governments, which contributes to the overall R&D for
the Company.
GEV funded
Customer and Partner funded(a)
Total R&D
Power
Wind
Electrification
Other(b)
Total
(a) Primarily related to funding in our Nuclear Power business.
(b) Includes Advanced Research.
*Non-GAAP Financial Measure
2025 FORM 10-K 28
Interest and Other Financial Income (Charges) – Net. Interest and other financial income (charges) – net was a $0.2 billion and $0.1
billion income for the years ended December 31, 2025 and 2024 , respectively, and a $0.1 billion charge for the year ended December 31,
2023 . The higher income in 2025 was driven by higher average balance of invested funds, partially offset by the nonrecurrence of interest
income received from an arbitration refund in 2024 . The primary components of net interest and other financial income ( charges) are fees
on cash management activities, interest on borrowings, and interest earned on cash balances and short-term investments.
Income Taxes. The effective tax rate and provision (benefit) for income taxes for the years ended December 31, 2025 , 2024 , and 2023
were as follows:
Effective tax rate (ETR)
Provision (benefit) for income taxes
We recorded an income tax benefit on pre-tax income for the year ended December 31, 2025 , primarily due to a decrease in valuation
allowances from a change in judgment regarding the realizability of a significant portion of our U.S. federal and state deferred tax assets.
The effective tax rate for year ended December 31, 2024 was impacted primarily by an increase in valuation allowances in the U.S . and in
certain foreign jurisdictions with losses providing no tax benefit, partially offset by a pre-tax gain with an insignificant tax impact from the
sale of a portion of Steam Power nuclear activities to EDF.
We recorded an income tax expense on a pre-tax loss in the year ended December 31, 2023 due to taxes in profitable jurisdictions and an
increase in valuation allowances from losses providing no tax benefit in other jurisdictions.
See Note 15 in the Notes to the consolidated and combined financial statements for further information.
CAPITAL RESOURCES AND LIQUIDITY . Historically, we participated in cash pooling and other financing arrangements with GE to
manage liquidity and fund our operations. As a result of completing the Spin-Off, we no longer participate in these arrangements and our
Cash, cash equivalents, and restricted cash are held and used solely for our own operations. Our capital structure, long-term commitments,
and sources of liquidity have changed significantly from our historical practices. As of December 31, 2025 , our Cash, cash equivalents, and
restricted cash was $8.8 billion , $0.4 billion of which was restricted use cash. In addition, we have access to a $3.0 billion committed
revolving credit facility (Revolving Credit Facility). See “—Capital Resources and Liquidity—Debt” for further information. We believe our
unrestricted c ash, cash equivalents , future cash flows generated from operations, and committed credit facility will be responsive to the
needs of our current and planned operations for at least the next 12 months.
On December 9, 2025, we announced that the Board of Directors had authorized an increase of our repurchase program to $10.0 billion of
common stock repurchases, from the prior authorization of $6.0 billion, which was announced on December 10, 2024. W e repurchased 8.2
million shares for $3.3 billion during the year ended December 31, 2025 . Although we intend to fund priorities that profitably grow the
company and return capital to stockholders through dividends and share repurchases as part of our capital allocation strategy, we are not
obligated to pay cash dividends or to repurchase a specified or any number or dollar value of shares under our share repurchase program.
The declaration of any future dividends is at the discretion of our Board of Directors and will be based on our earnings, financial condition,
cash requirements, prospects, and other factors. The amount and timing of any future share repurchases under our share repurchase
program will be based on the trading price and volume of our shares of common stock and other market factors as well as our earnings,
financial condition, cash requirements, prospects, alternative uses for our cash, and other factors.
Consolidated and Combined Statement of Cash Flows . The most significant source of cash flows from operations is customer-related
activities, the largest of which is collecting cash resulting from equipment or services sales. The most significant operating uses of cash are
to pay our suppliers, employees, tax authorities, and postretirement plans. We measure ourselves on a free cash flow* basis. We believe
that free cash flow* provides management and investors with an important measure of our ability to generate cash on a normalized basis.
Free cash flow* also provides insight into our ability to produce cash subsequent to fulfilling our capital obligations; however, free cash flow*
does not delineate funds available for discretionary uses as it does not deduct the payments required for certain investing and financing
activities.
We typically invest in property, plant, and equipment (PP&E) over multiple periods to support new product introductions and increases in
manufacturing capacity and to perform ongoing maintenance of our manufacturing operations. We believe that while PP&E expenditures
will fluctuate period to period, we will need to maintain a material level of net PP&E spend to maintain ongoing operations and growth of the
business.
FREE CASH FLOW (NON-GAAP)
Cash from (used for) operating activities (GAAP)
Add: Gross additions to property, plant, and equipment and internal-use software
Free cash flow (Non-GAAP)
Cash from operating activities was $5.0 billion and $2.6 billion for the years ended December 31, 2025 and 2024 , respectively.
Cash from operating activities increased by $2.4 billion in 2025 compared to 2024 , primarily driven by: an increase from contract liabilities
and current deferred income of $5.2 billion , primarily due to higher down payments on orders and slot reservation agreements at Power;
higher net income (after adjusting for depreciation of PP&E, amortization of intangible assets, (gains) losses on purchases and sales of
business interests, and provision (benefit) for income taxes) of $1.0 billion , including the nonrecurrence of a $0.3 billion cash refund
received in connection with an arbitration proceeding in the second quarter of 2024; partially offset by a decrease from All other operating
*Non-GAAP Financial Measure
2025 FORM 10-K 29
activities of $(1.4) billion , primarily due to an increase in long-term receivables related to supplier advances and advanced manufacturing
credits, an increase in prepaid taxes and deferred charges, lower contract losses at Offshore Wind, and an increase in non-cash unrealized
gains related to our interest in China XD Electric Co., Ltd ; a decrease from inventories of $(0.8) billion , primarily due to higher build and
fewer liquidations in Wind; a decrease from accounts payable of $(0.8) billion , primarily due to higher disbursements, including a higher
impact related to prepayments, primarily at Wind and Power, partially offset by higher material purchases at Electrification, and the
nonrecurrence of settlements of payables with GE prior to the Spin-Off in the first quarter of 2024 ; and a decrease from current receivables
of $(0.6) billion , primarily due to higher net billings and increases in supplier advances at Power and Electrification, partially offset by lower
net billings at Wind.
Cash from operating activities of $5.0 billion for the year ended December 31, 2025 included a $4.1 billion inflow from changes in working
capital. The cash inflow from changes in working capital was primarily driven by: contract liabilities and current deferred income of $8.0
billion , driven by down payments on orders and slot reservation agreements at Power, and down payments and collections at
Electrification, partially offset by net revenue recognition at Wind; current receivables of $(1.9) billion , driven by net billings and an increase
in supplier advances in order to secure future volume in Power and Electrification, partially offset by a decrease in past dues at Power;
inventories of $(1.4) billion , primarily due to volume to support fulfillment and deliveries expected in 2026 at Gas Power and new unit build
and services volume at Onshore Wind ; and current contract assets of $(0.5) billion , driven by revenue recognition exceeding billings at
Offshore Wind.
C ash from operating activities of $2.6 billion for the year ended December 31, 2024 included a $1.1 billion inflow from changes in working
capital. The cash inflow from changes in working capital was primarily driven by: contract liabilities and current deferred income of $2.8
billion , driven by net collections at Power, and down payments and collections on several large projects in Grid Solutions at Electrification,
partially offset by liquidations and the settlement of a previously canceled project at Wind; accounts payable and equipment project
payables of $0.7 billion due to material purchases outpacing disbursements, including an increase in prepayments as we more closely align
the timing of disbursements and collections, partially offset by settlements of payables with GE prior to the Spin-Off; current receivables of
$(1.3) billion , driven by billings outpacing collections, an increase in past dues, and increases in supplier advances in order to secure future
volume, primarily in Power; inventories of $(0.6) billion , primarily in Gas Power, to support fulfillment and deliveries expected in 2025 ,
partially offset by liquidations in Wind; and current contract assets of $(0.4) billion , driven by revenue recognition exceeding billings on our
equipment and other service agreements in Wind and Electrification, and on our contractual service agreements in Gas Power, partially
offset by an unfavorable change in estimated profitability.
Cash from (used for) investing activities was $(0.8) billion and less than $( 0.1) billion for the years ended December 31, 2025 and 2024 ,
respectively. Cash used for investing activities increased by $0.7 billion in 2025 compared to 2024 primarily driven by: the nonrecurrence of
the Steam Power business sale of part of its nuclear activities to EDF in our Power segment of $0.6 billion in 2024 ; and an increase in
additions to PP&E and internal-use software of $0.4 billion ; partially offset by higher sales of and distributions from equity method
investments of $0.2 billion . Cash used for additions to PP&E and internal-use software, which is a component of free cash flow*, was $1.3
billion and $0.9 billion for the years ended December 31, 2025 and 2024 , respectively.
Cash from (used for) financing activities was $(3.8) billion and $3.7 billion for the years ended December 31, 2025 and 2024 ,
respectively. Cash used for financing activities increased by $7.5 billion in 2025 compared to 2024 primarily driven by: cash settlements for
share repurchases of $3.3 billion in 2025 ; the nonrecurrence of transfers from parent of $2.9 billion ; the nonrecurrence of proceeds from the
sale of an approximately 24% equity interest in GE Vernova T&D India Ltd. in 2024 of $0.9 billion; and dividends paid of $0.3 billion in 2025 .
Material Cash Requirements. In the normal course of business, we enter into contracts and commitments that oblige us to make
payments in the future. See Notes 7 and 22 in the Notes to the consolidated and combined financial statements for further information
regarding our obligations under lease and guarantee arrangements as well as our investment commitments. See Note 13 in the Notes to
the consolidated and combined financial statements for further information regarding material cash requirements related to our pension
obligations.
Debt. Total debt, excluding finance leases, was less than $0.1 billion and $0.1 billion as of December 31, 2025 and December 31, 2024 ,
respectively . We have a $3.0 billion Revolving Credit Facility to fund near-term intra-quarter working capital needs as they arise. In addition,
we have a $3.0 billion committed trade finance facility (Trade Finance Facility, and together with the Revolving Credit Facility, the Credit
Facilities). The Trade Finance Facility has not been and is not expected to be utilized, and does not contribute to direct liquidity. We believe
that our financing arrangements, future cash from operations, and access to capital markets will provide adequate resources to fund our
future cash flow needs. For more information about the Credit Facilities, refer to our Current Report on Form 8-K, filed with the SEC on
April 2, 2024 , and see Note 22 in the Notes to the consolidated and combined financial statements.
Credit Ratings and Conditions. We have access to the Revolving Credit Facility to fund operations, and we may rely on debt capital
markets in the future, including for funding the acquisition of Prolec GE , to further su pport our liquidity needs. The cost and availability of
any debt financing is influenced by our credit ratings and market conditions. Standard and Poor's Global Ratings (S&P) and Fitch Ratings
(Fitch) have issued credit ratings for the Company. On December 18, 2025, Fitch upgraded GE Vernova Inc. 's long-term credit rating to
BBB+ from BBB and issued a Positive outlook. On December 11, 2025, S&P upgraded GE Vernova Inc.'s long-term credit rating to BBB
from BBB- and issued a Positive outlook. Our credit ratings as of the date of this filing are set forth in the following table.
Fitch
Outlook
Positive
Positive
Long-term
BBB
BBB+
We are disclosing our credit ratings to enhance understanding of our sources of liquidity and the effects of our ratings on our costs of funds
and access to credit. 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. See Item 1A “Risk Factors—Risks Related to our Customers and Industry
Dynamics” for a description of some potential consequences for our credit ratings.
*Non-GAAP Financial Measure
2025 FORM 10-K 30
If we are unable to maintain investment grade ratings, we could face significant challenges in being awarded new contracts, substantially
increasing financing and hedging costs, and refinancing risks as well as substantially decreasing the availability of credit. As of December
31, 2025 , we estimated an insignificant liquidity impact of a ratings downgrade below investment grade.
Parent Company Credit Support. Prior t o the Spin-Off, to support GE Vernova businesses in selling products and services globally, GE
often entered into contracts on behalf of GE Vernova or issued parent company guarantees or trade finance instruments supporting the
performance of its subsidiary legal entities transacting directly with customers, in addition to providing similar credit support for non-
customer related activities of GE Vernova (collectively, the GE credit support). In connection with the Spin-Off, we are working to seek
novation or assignment of GE credit support , the majority of which relates to parent company guarantees, associated with GE Vernova
legal entities from GE to GE Vernova. For GE credit support that remained outstanding at the Spin-Off, GE Vernova is obligated to use
reasonable best efforts to terminate or replace, and obtain a full release of GE’s obligations and liabilities under, all such credit support. GE
Vernova pays quarterly fees to GE which are determined by amounts associated with GE credit support. GE Vernova is subject to other
contractual restrictions and requirements while GE continues to be obligated under such credit support on behalf of GE Vernova. In
addition, while GE will remain obligated under the contract or instrument, GE Vernova will be obligated to indemnify GE for credit support
related payments that GE is required to make and possible related costs.
As of December 31, 2025 , we estimated GE Vernova RPO and other obligations that relate to GE credit support to be approximately $8
billion , an over 77% reduction since the Spin-Off. We expect approximately $6 billion of the RPO related to GE credit support obligations to
contractually mature by December 31, 2029. 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 GE were required under
parent company guarantees relating to GE Vernova customer contracts.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS . For a discussion of recently issued accounting standards, see Note 2 in the
Notes to the consolidated and combined financial statements for further information .
CRITICAL ACCOUNTING ESTIMATES. To prepare our consolidated and combined financial statements in accordance with U.S. GAAP,
management makes estimates and assumptions that may affect the reported amounts of our assets and liabilities, including our contingent
liabilities, as of the date of our financial statements and the reported amounts of our revenues and expenses during the reporting periods.
Our actual results may differ from these estimates. We consider estimates to be critical (i) if we are required to make assumptions about
material matters that are uncertain at the time of estimation or (ii) if materially different estimates could have been made or it is reasonably
likely that the accounting estimate will change from period to period. The following are areas considered to be critical and require
management’s judgment: Allocations from GE, Revenue Recognition on Service Agreements, Revenue Recognition on Equipment on an
Over-Time Basis, Goodwill, Income Taxes, Postretirement Benefit Plans, Loss Contingencies, and Environmental and Asset Retirement
Obligations. See Note 2 in the Notes to the consolidated and combined financial statements for further information regarding our significant
accounting policies.
Allocations From GE. The consolidated and combined financial statements include expense allocations prior to the Spin-Off for certain
corporate, infrastructure, and shared services expenses provided by GE on a centralized basis, including, but not limited to, finance, supply
chain, human resources, IT, insurance, employee benefits, and other expenses that are either specifically identifiable or clearly applicable
to GE Vernova. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a
pro rata basis using an applicable measure of headcount, revenue, or other allocation methodologies that are considered to be a
reasonable reflection of the utilization of services provided or the benefit received by GE Vernova during the periods presented.
Management considers that such allocations have been made on a reasonable basis; however, these allocations may not be indicative of
the actual expense that would have been incurred had we operated as an independent, stand-alone public entity.
Revenue Recognition on Service Agreements. We have long-term service agreements with our customers within our Power and Wind
segments that require us to maintain the customers’ assets over the contract terms, which generally range from 5 to 25 years.
Power. Within Power, these long-term service agreements, which we refer to as contractual service agreements, generally include
maintenance associated with major outage events and revenues are recognized as we perform under the arrangements using the
percentage of completion method, which is based on costs incurred relative to our estimate of total expected costs. This requires us to
make estimates of customer payments expected to be received over the contract term as well as the costs to perform required
maintenance services.
Customers generally pay us based on the utilization of the asset (per hour of usage for example) or upon the occurrence of a major
maintenance event within the contract. As a result, a significant estimate in determining expected revenues 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 maintenance events over the life of the contract. We generally use historical utilization trends in
developing our revenue estimates. To develop our cost estimates, we consider the timing and extent of future maintenance events,
including the amount and cost of labor, spare parts, and other resources required to perform the services.
We routinely review estimates under long-term service agreements and regularly revise them to adjust for changes in outlook. 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 earnings 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 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 earnings.
2025 FORM 10-K 31
As of December 31, 2025 , our net long-term service agreements balance of $3.4 billion represents approximately 4% of our total estimated
life of contract billings. Our contracts (on average) are approximately 29% 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 contract assets balance by $0.2 billion. Billings on these
contracts were $5.4 billion and $5.0 billion during the years ended December 31, 2025 and 2024 , respectively. See Notes 2 and 9 in the
Notes to the consolidated and combined financial statements for further information.
Wind. The equipment within our Wind segment generally does not require major planned outages and revenues associated with service
agreements are recognized on a straight-line basis consistent with the nature, timing, and exten t of these arrangements, which generally
include planned and unplanned maintenance and may also include performance guarantees of the wind farm’s availability to operate under
adequate wind conditions. Availability is typically measured across the wind farm over a reference period of one year. Any forecasted
shortfalls that may result in a payment to a customer are recorded as a reduction of revenues, while additional revenues are recognized
when availability exceeds the contractual targets. During the years ended December 31, 2025 , 2024 , and 2023 , the reduction of revenues
from availability shortfalls was $0.3 billion, $0.3 billion, and $0.3 billion, respectively. A further 1% reduction in availability across the entire
fleet would have resulted in an additional revenue reduction of less than $0.1 billion.
Revenue Recognition on Equipment on an Over-Time Basis. We have agreements for the sale of customized goods, including power
generation equipment such as gas and certain wind turbines. We recognize revenues 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 contract term as well as the costs to complete the
project. In addition, variable consideration is included in the transaction price if, in our judgment, it is expected that a significant future
reversal of cumulative revenue under the contract will not occur. Some of our contracts with customers for the sale of equipment contain
clauses for liquidated damages related to milestones established for on-time delivery or meeting certain product specifications. On an
ongoing basis, we evaluate the probability and magnitude of having to pay liquidated damages. This is factored into our estimate of variable
consideration using the expected value method taking into consideration progress towards meeting contractual milestones, specified
liquidated damages rates, if applicable, and history of paying liquidated damages to the customer or similar customers.
Our billing terms for these agreements are generally based on achieving specified milestones and include billing adjustments for project
delays and performance guarantees. As a result, a significant estimate in determining expected revenues of a contract is estimating project
execution timelines that may be adjusted due to internal and external supply chain adjustments, overall project execution, and product
performance. We generally use a combination of historical information as well as forward-looking information surrounding project execution
timelines and product performance in developing our revenue estimates. To develop our revenue estimates, we start with the contract price
and then make downward revisions based on historical trends. In addition, we also adjust as we become aware of new information.
Our estimation of the total costs required to fulfill our promise to a customer is generally based on our history of manufacturing similar
assets for customers. This estimation of cost is critical to our revenue recognition process and is updated routinely to reflect changes in
quantity or cost of the inputs. In certain projects, the underlying technology or promise to the customer is unique to what we have
historically promised, and reliably estimating the total cost to fulfill the promise to the customer requires a significant level of judgment. The
estimation of costs is subject to increased subjectivity when we introduce new products and technologies, and actual costs may differ from
estimates more widely at this stage of development due to lack of historical experience.
We routinely review estimates and regularly revise them to adjust for changes in outlook. These revisions are based on objectively
verifiable information that is available at the time of the review.
Goodwill. We test goodwill for impairment at the reporting unit level annually in the fourth quarter of each year using October 1st as the
measurement date. We also test goodwill for impairment when an event occurs or circumstances change that would more likely than not
reduce the fair value of a reporting unit below its carrying value. An impairment charge is recognized if the carrying amount of a reporting
unit exceeds its fair value.
We determine fair value for each of the reporting units using the market approach, when available and appropriate, or the income
approach, or a combination of both. We assess the valuation methodology based upon the relevance and availability of the data at the time
we perform the valuation. If multiple valuation methodologies are used, the results are weighted appropriately.
Under the market approach, fair value is derived from metrics of publicly traded companies or historically completed transactions of
comparable businesses, when available. The selection of comparable businesses is based on the markets in which the reporting units
operate giving consideration to risk profiles, size, geography, and diversity of products and services. A market approach is limited to
reporting units for which there are publicly traded companies that have characteristics similar to our businesses.
Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an
appropriate risk-adjusted rate. We use discount rates that are commensurate with the risks and uncertainty inherent in the respective
businesses and in our internally developed forecasts.
Estimating the fair value of reporting units involves the use of significant judgments that are based on a number of factors including actual
operating results, internal forecasts, such as forecasts of costs, margins, investments and capital expenditures, market observable pricing
multiples of similar businesses and comparable transactions, possible control premiums, determining the appropriate discount rate and
long-term growth rate assumptions, and, if multiple approaches are being used, determining the appropriate weighting applied to each
approach. It is reasonably possible that the judgments and estimates described above could change in future periods.
In the fourth quarter of 2025, we performed our annual goodwill impairment test. Based on the results of this test, the fair values of each of
our reporting units significantly exceeded their carrying values; however, we identified one reporting unit for which the fair value in excess of
carrying value declined significantly since the prior year. The fair value of our Wind reporting unit, which has $3.3 billion of goodwill,
exceeds the carrying value by 27%. See Note 8 in the Notes to the consolidated and combined financial statements for further information.
2025 FORM 10-K 32
Income Taxes. Prior to the Spin- O ff, GE Vernova was included in the consolidated U.S. federal, state, and foreign income tax returns of
GE, where eligible, through April 2, 2024 . We have adopted the separate return method in preparing a provision for income taxes for the
periods prior to the Spin-Off. The calculation of income taxes on a separate return basis requires considerable judgment and use of both
estimates and allocations. As a result, our provision for income taxes reflected in our consolidated and combined financial statements for
2023 and the first quarter of 2024 have been estimated as if we were a separate taxpayer. Following the Spin-Off, GE Vernova files tax
returns independently and our provision for income taxes is prepared on a stand-alone basis.
We only recognize the tax benefits from income tax positions that have a greater than 50 percent likelihood of being sustained upon
examination by the taxing authorities. A liability is recorded for uncertain tax positions when there is a 50 percent or less likelihood such tax
position would be sustained based on its technical merits. Significant judgment is required when evaluating tax positions for uncertainty. We
re-evaluate uncertain tax positions upon changes in facts and circumstances, changes in tax law or guidance, and upon effective
settlement of issues with tax authorities. Changes in the recognition or measurement of uncertain tax positions could result in material
increases or decreases in our provision (benefit) for income taxes in the period such determination is made.
We record deferred taxes on the future tax consequences of differences between the financial statement carrying value of our assets and
liabilities and their respective tax basis. The realization of deferred tax assets depends on sufficient sources of taxable income. Possible
sources of taxable income include taxable income in carry-back periods, the future reversal of existing taxable temporary differences
recorded as a deferred tax liability, tax-planning strategies that generate future income, and projected future taxable income. If, based upon
all available evidence, both positive and negative, it is more likely than not such deferred tax assets will not be realized, a valuation
allowance is recorded to adjust the deferred tax assets to the net amount which is more likely than not to be realized. Significant weight is
given to evidence that is objectively verifiable such as cumulative losses in recent years; however, some evidence may be based on
estimates and assumptions regarding potential sources of future taxable income. Changes in these estimates and assumptions may result
in a change in judgment regarding the realizability of deferred tax assets. See Note 15 in the Notes to the consolidated and combined
financial statements for further information.
Postretirement Benefit Plans. We engage third-party actuaries to assist in the determination of pension obligations and related plan
costs. We develop significant long-term assumptions including discount rates and the expected rate of return on assets in connection with
our pension accounting. We recognize differences between the expected long-term return on plan assets, the actual return, and net
actuarial gains and losses for the pension plan liabilities annually in the fourth quarter of each fiscal year and whenever a plan is
determined to qualify for a remeasurement within our Consolidated and Combined Statement of Comprehensive Income (Loss).
Accounting requirements necessitate the use of assumptions to reflect the uncertainties and the length of time over which the pension
obligations will be paid. The actual amount of future benefit payments will depend upon when participants retire, the amount of their benefit
at retirement, and how long they live. We discount the future payments using a rate that matches the time frame over which the payments
will be made. We also assume a long-term rate of return that will be earned on investments used to fund these payments.
We evaluate these assumptions annually. We periodically evaluate other assumptions, such as compensation, retirement age, mortality,
and turnover, and update them as necessary to reflect our actual experience and expectations for the future.
We determine the discount rate using the weighted-average yields on high-quality fixed-income securities that have maturities consistent
with the timing of benefit payments. Lower discount rates increase the size of the benefit obligations and generally increase pension
expense in the following year; higher discount rates reduce the size of the benefit obligation and generally reduce subsequent-year pension
expense.
The expected return on plan assets is the estimated long-term rate of return that will be earned on the investments used to fund the
pension obligations. To determine this rate, we consider the current and target composition of plan investments, our historical returns
earned, and our expectation about the future.
As of the measurement date of December 31, 2025 , net periodic benefit income for 2026 is estimated to be $0.5 billion. The components of
net periodic benefit costs, other than the service component, are included in Non-operating benefit income in our Consolidated and
Combined Statement of Income (Loss).
Fluctuations in discount rates can significantly impact pension costs and obligations. A 25 basis point decrease in the discount rate would
increase our pension and retiree benefit plan costs in the following year by less than $0.1 billion and would also expect an increase in the
pension and retiree benefit plan projected benefit obligations at year-end by approximately $0.4 billion. A 50 basis point decrease in the
expected return on assets would increase pension plan costs in the following year by less than $0.1 billion. See Note 13 in the Notes to the
consolidated and combined financial statements 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, warranties,
environmental obligations, litigation, regulatory investigations and proceedings, and losses resulting from other events and developments.
When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss.
We consider many factors in making these assessments, including historical experience and matter specifics. Estimates are developed in
consultation with legal counsel and are based on an analysis of potential results.
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
2025 FORM 10-K 33
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 22 in the
Notes to the consolidated and combined financial statements 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 or as a result of any restructuring
actions taken in future periods. 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.
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 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. See Note 22 i n the Notes to the
consolidated and combined financial statements for further information.
NON-GAAP FINANCIAL MEASURES . The non-GAAP financial measures presented in this Annual Report on Form 10-K are supplemental
measures of our performance and our liquidity that we believe help investors understand our financial condition and operating results and
assess our future prospects. We believe that presenting these non-GAAP financial measures, in addition to the corresponding U.S. GAAP
financial measures, are important supplemental measures that exclude non-cash or other items that may not be indicative of or are
unrelated to our core operating results and the overall health of our company. We believe that these non-GAAP financial measures provide
investors greater transparency to the information used by management for its operational decision-making and allow investors to see our
results “through the eyes of management.” We further believe that providing this information assists our investors in understanding our
operating performance and the methodology used by management to evaluate and measure such performance. When read in conjunction
with our U.S. GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and
can be used by management as one basis for financial, operational, and planning decisions. Finally, these measures are often used by
analysts and other interested parties to evaluate companies in our industry.
Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by
other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from
company to company. In order to compensate for these and the other limitations discussed below, management does not consider these
measures in isolation from or as alternatives to the comparable financial measures determined in accordance with U.S. GAAP. Readers
should review the reconciliations below , and above with respect to free cash flow, and should not rely on any single financial measure to
evaluate our business. The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable
U.S. GAAP financial measures follow.
We believe the organic measures presented below provide management and investors with a more complete understanding of underlying
operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions, and foreign currency,
which includes translational and transactional impacts, as these activities can obscure underlying trends.
ORGANIC REVENUES, EBITDA, AND EBITDA MARGIN BY SEGMENT (NON-GAAP)
Revenue(a)
Segment EBITDA
Segment EBITDA margin
V pts
Power (GAAP)
2.2pts
Less: Acquisitions
Less: Business dispositions
Less: Foreign currency effect
Power organic (Non-GAAP)
1.0pts
Wind (GAAP)
(0.5)pts
Less: Acquisitions
Less: Business dispositions
Less: Foreign currency effect
Wind organic (Non-GAAP)
0.2pts
Electrification (GAAP)
5.9pts
Less: Acquisitions
Less: Business dispositions
Less: Foreign currency effect
Electrification organic (Non-GAAP)
5.6pts
(a) Includes intersegment sales of $487 million and $483 million for the years ended December 31, 2025 and 2024 , respectively. See Note
24 in the Notes to the consolidated and combined financial statements for further information.
2025 FORM 10-K 34
ORGANIC REVENUES (NON-GAAP)
Total revenues (GAAP)
Less: Acquisitions
Less: Business dispositions
Less: Foreign currency effect
Organic revenues (Non-GAAP)
EQUIPMENT AND SERVICES ORGANIC REVENUES (NON-GAAP)
Total equipment revenues (GAAP)
Less: Acquisitions
Less: Business dispositions
Less: Foreign currency effect
Equipment organic revenues (Non-GAAP)
Total services revenues (GAAP)
Less: Acquisitions
Less: Business dispositions
Less: Foreign currency effect
Services organic revenues (Non-GAAP)
We believe that Adjusted EBITDA* and Adjusted EBITDA margin*, which are adjusted to exclude the effects of unique and/or non-cash
items that are not closely associated with ongoing operations, provide management and investors with meaningful measures of our
performance that increase the period-to-period comparability by highlighting the results from ongoing operations and the underlying
profitability factors. We believe Adjusted organic EBITDA* and Adjusted organic EBITDA margin* provide management and investors with,
when considered with Adjusted EBITDA* and Adjusted EBITDA margin*, a more complete understanding of underlying operating results
and trends of established, ongoing operations by further excluding the effect of acquisitions, dispositions, and foreign currency, which
includes translational and transactional impacts, as these activities can obscure underlying trends. We believe these measures provide
additional insight into how our businesses are performing on a normalized basis. However, Adjusted EBITDA*, Adjusted organic EBITDA*,
Adjusted EBITDA margin*, and Adjusted organic EBITDA margin* should not be construed as inferring that our future results will be
unaffected by the items for which the measures adjust.
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
(NON-GAAP)
Net income (loss) (GAAP)
Add: Restructuring and other charges
Add: (Gains) losses on purchases and sales of business interests(a)
Add: Russia and Ukraine charges(b)
Add: Separation costs (benefits)(c)
Add: Arbitration refund(d)
Add: Non-operating benefit income
Add: Depreciation and amortization(e)
Add: Interest and other financial (income) charges – net(f)(g)
Add: Provision (benefit) for income taxes(g)
Adjusted EBITDA (Non-GAAP)
Net income (loss) margin (GAAP)
8.3 pts
Adjusted EBITDA margin (Non-GAAP)
2.6 pts
(a) Includes unrealized (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.
(b) Related to recoverability of asset charges recorded in connection with the ongoing conflict between Russia and Ukraine and resulting
sanctions primarily related to our Power business.
(c) Costs incurred in the Spin-Off and separation from GE, including system implementations, advisory fees, one-time stock option grant,
and other one-time costs. In addition, 2024 includes $136 million benefit related to deferred intercompany profit that was recognized
upon GE retaining the renewable energy U.S. tax equity investments.
(d) Represents a cash refund received related to an arbitration proceeding with a multiemployer pension plan and excludes $52 million
related to the interest on such amounts that was recorded in Interest and other financial charges – net.
(e) 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.
(f) Consists of interest and other financial charges, net of interest income, other than financial interest related to our normal business
operations primarily with customers.
(g) Excludes interest expense (income) of $(1) million , $10 million and $45 million and benefit (provision) for income taxes of $(11) million ,
$56 million and $168 million for the years ended December 31, 2025 , 2024 and 2023 , respectively, related to our Financial Services
business which, because of the nature of its investments, is measured on an after-tax basis.
*Non-GAAP Financial Measure
2025 FORM 10-K 35
ADJUSTED ORGANIC EBITDA AND ADJUSTED ORGANIC EBITDA MARGIN
(NON-GAAP)
Adjusted EBITDA (Non-GAAP)
Less: Acquisitions
Less: Business dispositions
Less: Foreign currency effect
Adjusted organic EBITDA (Non-GAAP)
Adjusted EBITDA margin (Non-GAAP)
2.6 pts
Adjusted organic EBITDA margin (Non-GAAP)
2.1 pts
See “ — Capital Resources and Liquidity” for discussion of free cash flow*.
