GE Vernova Inc.

Company Overview

Business Model: GE Vernova Inc. is a global leader in the electric power industry, providing products and services that generate, transfer, orchestrate, convert, and store electricity. The company designs, manufactures, delivers, and services technologies to create a more reliable, secure, and sustainable electric power system, enabling electrification and decarbonization. Its installed base generates approximately 25% of the world’s electricity.

Market Position: GE Vernova is positioned as an industry leader with a broad portfolio of advanced technologies for an intelligent, sustainable power system, aiming to accelerate the energy transition. The company competes based on product performance, quality, branding, service, and price in highly competitive global markets. Key competitors include Siemens Energy, Mitsubishi Power, Vestas, Hitachi Energy, Schneider Electric, and ABB.

Recent Strategic Developments:

• Spin-Off from General Electric Company: On April 2, 2024, General Electric Company completed the spin-off of GE Vernova, making it an independent public company.
• Prolec GE Acquisition: On October 21, 2025, GE Vernova announced the acquisition of the remaining 50% stake in Prolec GE, an unconsolidated joint venture and leading grid equipment supplier, for approximately $5.3 billion, expected to close in February 2026.
• Business Unit Combination: Effective January 1, 2025, the Power Conversion and Solar & Storage Solutions business units within the Electrification segment were combined to form a new business unit, Power Conversion & Storage.
• Small Modular Reactor (SMR) Development: Secured the first commercial contract of its kind in North America for SMR technology deployment and is in discussions with the U.S. Administration for further SMR development.
• Direct Air Capture Deployment: Launched its first commercial direct air capture deployment using proprietary solid sorbent technology with a collaborator.
• Product Portfolio Streamlining: Simplified its Wind segment management structure and product offerings, focusing on fewer, more reliable "workhorse" products, which account for approximately 75% of equipment Remaining Performance Obligations (RPO) as of December 31, 2025.
• Proficy Manufacturing Software Business Sale: Signed a binding agreement during Q3 2025 to sell the Proficy manufacturing software business within its Electrification Software business, expected to close in H1 2026.
• Linden VFT LLC Sale: Signed a binding agreement during Q3 2025 to sell Linden VFT LLC, a merchant transmission facility owned by its Gas Power business, expected to close in the near term.

Geographic Footprint: GE Vernova operates globally with approximately 600 sites in 458 cities and 97 countries. Approximately 80% of these sites are leased and 20% are owned. The company has 91 manufacturing sites, with 18 in the U.S. and 73 internationally.

• U.S.: 21,000 employees, 18 manufacturing sites, 45.5% of total revenue.
• Europe: 24,000 employees, 38 manufacturing sites (Europe, Middle East, and Africa region), 19.9% of total revenue.
• Asia: 19,000 employees, 26 manufacturing sites (Association of Southeast Asian Nations region), 12.2% of total revenue.
• Latin America: 6,000 employees, 27 manufacturing sites (Americas region), 8.2% of total revenue.
• Middle East and Africa: 14.2% of total revenue.

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: 19.8%
• Operating Margin: 3.6%
• Net Margin: 12.8%

Investment in Growth:

• R&D Expenditure: $1.20 billion (3.1% of revenue)
• Capital Expenditures: $1.28 billion (additions to property, plant, and equipment and internal-use software)
• Strategic Investments:
  • Acquisition of remaining 50% stake in Prolec GE for approximately $5.3 billion (expected to close in February 2026).
  • Investment of approximately $5 billion in cumulative R&D from 2025 through 2028, with half focused on industrializing existing products and supporting the installed base, and the other half on long-term innovation.

Business Segment Analysis

Power

Financial Performance:

• Revenue: $19.77 billion (+9.0% YoY)
• Operating Margin (Segment EBITDA margin): 14.7% (vs. 12.5% in 2024)
• Key Growth Drivers: Increased Heavy-Duty Gas Turbine and Aeroderivative deliveries, favorable pricing, higher parts volume, and increased productivity at Gas Power and Steam Power. Partially offset by additional expenses for investments at Nuclear Power and Gas Power, and the impact of inflation. Product Portfolio: Gas and steam turbines, full balance of plant, upgrade, and service solutions. Nuclear technology solutions (boiling water reactors, reactor fuel, SMR design/development), and hydropower generation solutions. Market Dynamics: Gas power is seen as essential for energy transition, providing reliable and dispatchable power for industrialization, grid stability, and rising electricity demand from hyperscalers and data centers. Strong focus on underwriting discipline and risk management. Operating in emerging markets presents deal closure uncertainties due to financing complexities. Sub-segment Breakdown (2025 Revenue):
• Gas Power: $16.01 billion
• Nuclear Power: $1.02 billion
• Hydro Power: $0.81 billion
• Steam Power: $1.94 billion

Wind

Financial Performance:

• Revenue: $9.11 billion (-6.1% YoY)
• Operating Margin (Segment EBITDA margin): -6.6% (vs. -6.1% in 2024)
• Key Growth Drivers: Improved pricing and delivery of more units at Onshore Wind, and higher transactional services. Partially offset by the non-recurrence of a $0.5 billion revenue recorded on a previously canceled project settlement in Q3 2024, project delays, and fewer nacelles produced at Offshore Wind, and lower volume from footprint reduction at LM Wind Power. Decreases from the impact of tariffs across the segment. Product Portfolio: Onshore wind turbines, offshore wind turbines (Haliade-X 220m), blades (LM Wind Power). Workhorse products include 2.8-127m, 3.6-154m, 6.1-158m, and 6.0-164m onshore units. Market Dynamics: Focus on providing carbon-free electricity reliably and at scale, with a simplified product portfolio of fewer, more reliable workhorse products. The U.S. market represents approximately 60% of Onshore Wind's equipment RPO, experiencing short-term demand volatility due to sector-specific tariffs and production tax credits. Offshore Wind faces pressure related to project costs and execution timelines, with a pause on large-scale offshore wind projects in the U.S. announced in December 2025 impacting the Vineyard Wind project. Sub-segment Breakdown (2025 Revenue):
• Onshore Wind: $8.24 billion
• Offshore Wind: $0.65 billion
• LM Wind Power: $0.22 billion

Electrification

Financial Performance:

• Revenue: $9.64 billion (+27.7% YoY)
• Operating Margin (Segment EBITDA margin): 14.9% (vs. 9.0% in 2024)
• Key Growth Drivers: Growth in switchgear, high-voltage direct current solutions, and alternating current substation solutions volume at Grid Solutions, and synchronous condensers and energy storage at Power Conversion & Storage. Favorable pricing and productivity at Grid Solutions. Product Portfolio: Grid solutions (high-voltage direct current transmission, alternating current substation solutions, power transformers, switchgear, synchronous condensers, grid automation), power conversion & storage (advanced energy conversion and storage systems), and electrification software (GridOS). Market Dynamics: Robust demand for systems, equipment, and services, particularly for large-scale transmission-related equipment to interconnect renewables and move bulk power. Benefits from higher growth in orders from other transmission activities to connect new power sources, electrify industries (e.g., data centers for AI), and modernize existing grid infrastructure. Proactively managing increased customer lead-times through lean initiatives and capacity expansion investments. Sub-segment Breakdown (2025 Revenue):
• Grid Solutions: $6.62 billion
• Power Conversion & Storage: $2.05 billion
• Electrification Software: $0.97 billion

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $3.32 billion (8.2 million shares) during 2025. The Board authorized an increase of the repurchase program to $10.0 billion from $6.0 billion on December 9, 2025.
• Dividend Payments: $0.28 billion ($1.00 per share paid in quarterly dividends during 2025).
• Dividend Yield: Not explicitly stated, but $1.00/share paid in 2025. A dividend of $0.50 per share was declared on December 9, 2025, payable February 2, 2026.
• Future Capital Return Commitments: Expects quarterly dividends to continue, subject to Board determination. The share repurchase program may be suspended or discontinued at any time.

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: $8.85 billion (including $0.38 billion restricted cash)
• Total Debt: Less than $0.1 billion (excluding finance leases)
• Net Cash Position: Approximately $8.75 billion
• Credit Rating:
  • S&P: BBB (Positive outlook, upgraded from BBB- on December 11, 2025)
  • Fitch: BBB+ (Positive outlook, upgraded from BBB on December 18, 2025)
• Debt Maturity Profile: Not explicitly detailed, but the $3.0 billion Revolving Credit Facility and $3.0 billion Trade Finance Facility mature on April 2, 2029.

Cash Flow Generation (2025):

• Operating Cash Flow: $4.99 billion
• Free Cash Flow: $3.71 billion
• Cash Conversion Metrics: Cash from operating activities increased by $2.4 billion in 2025 compared to 2024, primarily driven by a $5.2 billion increase from contract liabilities and current deferred income (higher down payments on orders and slot reservation agreements at Power).

Operational Excellence

Production & Service Model: GE Vernova designs, manufactures, delivers, and services technologies globally. The company emphasizes lean initiatives to improve cost structure, productivity, and reduce lead-times. It focuses on maintaining and enhancing strong relationships with utilities, developers, governments, and electricity users, servicing the existing installed base, and delivering new technologies.

Supply Chain Architecture:

• Annually purchases approximately $20 billion in materials and components from over 100 countries.
• Faces industry-wide supply chain challenges including global conflicts, economic trends, geopolitical dynamics (sanctions, tariffs), inflation, logistics issues, and regulatory changes.
• Mitigation measures include strong supplier relationships, connected forecasting, dual-sourcing, increased inventory, factory capacity expansion, lean initiatives, alternative logistics, product/component redesign, and cost-sharing.
• Prioritizes localizing supply chains for distinct geographies while maintaining global diversity for resiliency.
• Risk-based supplier onboarding process includes due diligence on performance, labor standards, ethical sourcing, human rights, and expanding to environmental impact and ESG regulations.

Key Suppliers & Partners:

• Joint Ventures:
  • Aero Alliance (50-50 joint venture with Baker Hughes Company) for aeroderivative engines, spare parts, repairs, and maintenance services.
  • Hitachi-GE Nuclear Energy (joint venture with Hitachi, Ltd.) for nuclear technology solutions.
  • Prolec GE (joint venture with Xignux) for transformers (remaining 50% stake to be acquired).
• Collaborators: For direct air capture deployment.
• Third-party manufacturers/suppliers: For raw materials, parts, components, and subsystems.

Facility Network:

• Headquarters: Cambridge, Massachusetts.
• Manufacturing: 91 sites globally (18 U.S., 73 international).
  • Power: 41 facilities
  • Wind: 17 facilities
  • Electrification: 33 facilities
• Research & Development: Research facilities in Niskayuna, New York, and Bangalore, India (Advanced Research).
• Distribution: Many offices, warehouses, and distribution facilities globally.

Operational Metrics:

• Gas turbine installed base: Approximately 7,000 units, with approximately 1,800 units under long-term service agreements (average remaining contract life of ~10 years).
• HA-Turbines in installed base: 126 units with approximately 3.6 million operating hours.
• Onshore wind turbines under service agreements: Approximately 24,000 units from an installed base of approximately 59,000 units.
• Workforce: Approximately 75,000 employees globally, with 70% specializing in manufacturing, engineering, or services. Over 3,000 employees in quality or EHS roles.

Market Access & Customer Relationships

Go-to-Market Strategy:

• Direct Sales: Maintains strong relationships with leading and largest utilities, developers, governments, and electricity users.
• Channel Partners: Engages in joint ventures and other collaborations (e.g., Aero Alliance, Hitachi-GE Nuclear Energy, Prolec GE).
• Digital Platforms: Utilizes digital infrastructure for wind services to monitor, predict, and optimize wind farm energy performance. Electrification Software business builds software and solutions (e.g., GridOS) to enable customers to orchestrate reliable and efficient power transmission and delivery.

Customer Portfolio:

• Enterprise Customers: Utilities, independent power producers, industrial customers, governments, hyperscalers, and data centers.
• Strategic Partnerships: Joint ventures with Baker Hughes Company, Hitachi, Ltd., and Xignux.
• Customer Concentration: Not explicitly detailed, but the company serves a broad range of customers globally.

Geographic Revenue Distribution (2025):

• U.S.: 45.5% of total revenue ($17.34 billion)
• Europe: 19.9% of total revenue ($7.59 billion)
• Asia: 12.2% of total revenue ($4.63 billion)
• Americas (excluding U.S.): 8.2% of total revenue ($3.12 billion)
• Middle East and Africa: 14.2% of total revenue ($5.39 billion)

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The electric power industry is characterized by significant demand growth driven by population and global economic expansion, an urgent need for decarbonization, an evolving generation mix shifting towards zero- or low-carbon sources, increased focus on energy resilience and security, and the need for grid modernization and investment. Government policies, regulations, and financial/investment dynamics significantly influence the market.

Competitive Positioning Matrix (2025):

Direct Competitors

Primary Competitors:

• Power Segment: Siemens Energy, Mitsubishi Power, Westinghouse, Framatome, Rolls-Royce.
• Wind Segment: Vestas, Siemens-Gamesa, Nordex, Envision, Goldwind.
• Electrification Segment: Hitachi Energy, Siemens Energy, Siemens, Schneider Electric, Mitsubishi Electric, ABB.

Emerging Competitive Threats: Growing competition from emerging threats due to increasing demand exceeding available capacity for products and services. New entrants, including manufacturers from regions like China, are improving quality and reliability.

Competitive Response Strategy:

• Continued investment in products, services, and emerging technologies to deliver economic value through efficiency, reliability, and affordability.
• Focus on reducing cycle times and ensuring available capacity.
• Streamlining product portfolio to focus on core workhorse products to improve cost and quality.
• Utilizing lean operating model to improve cost structure and productivity.
• Innovating and investing, often with third parties, in new offerings and technologies for electrification and decarbonization.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Decarbonization and Energy Transition: Shifting policies, market economics, and technology trajectories (e.g., increased policy support for fossil fuels or rollback of renewable-supportive policies could reduce demand for decarbonization products; falling renewable costs could reduce demand for new gas turbines).
• Changes in Energy, Environmental, and Tax Policies: Reductions or adverse modifications to government incentives (e.g., tax incentives for renewable energy) could limit markets, reduce returns, or lead to project abandonment. Broader greenhouse gas regulations and carbon pricing could increase compliance costs.
• Demand for Oil and Gas: Demand for certain Power segment products depends on oil and gas regulatory policy, prices, and global supply/demand, which are outside the company's control.
• Technology Disruption: Failure to innovate and commercialize new technologies (e.g., SMRs, hydrogen-based power generation, carbon capture) could impact competitive position and growth. Rapid innovation can shorten product cycles, increasing quality and execution risks.
• Customer Concentration: Not explicitly detailed as a risk, but dependency on large infrastructure projects and governmental entities is noted.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Significant Supply Chain and Logistics Disruptions: Volatility in cost or availability of critical materials and components (e.g., semiconductor chips, specialty metals, rare earths), labor shortages, inflationary pressures, transportation challenges, and manufacturing disruptions.
• Supplier Dependency: Reliance on third-party suppliers, contract manufacturers, and commodity markets, with certain inputs being limited or sole-sourced.
• Geographic Concentration: Supply chains are globally distributed and subject to economic and geopolitical dynamics, sanctions, tariffs, and import/export restrictions.
• Capacity Constraints: Disruptions or capacity constraints at manufacturing and operating facilities (e.g., work stoppages, natural disasters, cybersecurity attacks) could delay deliveries and increase costs. Capacity expansions require significant capital and lead time and may outpace realized demand. Quality Issues: Design, production, performance, or other quality issues in products, solutions, or services could lead to significant costs, reduced demand, claims for damages, or regulatory actions. Long-term Service Obligations: Failure to accurately estimate and execute long-term service obligations, particularly in Gas Power, could lead to excess costs, lower profit margins, and contract losses. Fixed-Price Contracts: Exposure to reduced margins and project loss risks if costs exceed expectations due to procurement challenges, schedule disruptions, product performance failures, unforeseen site conditions, or inaccurate estimates. Joint Ventures and Collaborations: Exposure to partner, governance, compliance, and financial risks, including differing objectives, impasses, delays, and potential liability for partner non-performance.

Financial & Regulatory Risks

Market & Financial Risks:

• Access to Capital: Inability to access capital and credit markets or obtain financing on favorable terms could hinder business operations and customer projects.
• Foreign Currency: Volatility in foreign currency exchange rates may adversely affect financial condition, results of operations, and cash flows.
• Future Impairments: Future impairments of long-lived assets, including goodwill, could result in significant non-cash charges. Regulatory & Compliance Risks:
• Global Legal and Regulatory Complexity: Operating across diverse legal and regulatory systems in approximately 100 countries, subject to varying requirements for anti-corruption, tax, trade controls, environmental, employment, sustainability, product safety, human rights, and data privacy.
• EHS Laws and Regulations: Extensive EHS regulations worldwide, including hazardous chemical handling laws (e.g., PFAS), and potential liabilities for personal injury, property damage, and health risks. Nuclear operations involve radioactive and hazardous materials, exposing the company to strict regulations and potential liabilities.
• Government Contracting and Procurement: Sales to government entities entail additional compliance obligations and potential penalties, contract loss, or debarment for noncompliance.
• Antitrust and Competition Laws: Noncompliance could result in fines, sanctions, business restrictions, and reputational harm.
• Financial Services Regulations: Affiliates acting as broker-dealers or registered investment advisers are subject to SEC, FINRA, and state securities regulations, which can be costly and disruptive.
• Spin-Off Tax Liability: The Spin-Off may not qualify as tax-free, potentially resulting in significant tax liabilities for General Electric Company and its stockholders, and substantial indemnification obligations for GE Vernova.
• Tax Matters Agreement Restrictions: Covenants under the Tax Matters Agreement limit certain strategic actions (e.g., acquisitions, mergers, stock sales) for a specified period to preserve tax-free treatment of the Spin-Off, potentially limiting strategic flexibility.

Geopolitical & External Risks

Geopolitical Exposure:

• Major Events Beyond Control: Natural disasters, physical effects of climate change, pandemics, armed conflicts, acts of terrorism, civil unrest, and political/economic instability can disrupt operations, damage facilities, and impact supply chains.
• International Trade Policies: Changes in international trade and investment policies (e.g., tariffs, import/export controls, trade barriers, sanctions) could increase costs, reduce demand, or restrict ability to sell/manufacture in certain countries.
• Sanctions and Export Controls: Global sanctions regimes and increasing trade restrictions may limit or prohibit transactions in certain jurisdictions.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Energy Transition: R&D efforts are focused on driving the energy transition, engineering technologies, forging partnerships, and delivering innovations to electrify and decarbonize the world.
• Existing Products & Installed Base: Approximately half of the $5 billion cumulative R&D investment from 2025-2028 is dedicated to continuously industrializing existing products and supporting the installed base.
• Long-Term Innovation: The other half of R&D investment is focused on delivering the next generation of differentiated products.
• Advanced Research: Performed at facilities in Niskayuna, New York, and Bangalore, India, partnering with businesses to create technology breakthroughs for future product roadmaps, guided by customer demands for sustainable, affordable, resilient, and secure energy.
• Emerging Technologies: Investing in small modular or other advanced nuclear power, hydrogen-based power generation, carbon capture and sequestration, and grid-scale batteries or other storage solutions. Innovation Pipeline: Developing new products and technologies to solve for a denser, more resilient, stable, and efficient electric grid with lower future greenhouse gas emissions.

Intellectual Property Portfolio:

• Patent Strategy: Substantial portfolio of registered and unregistered IP assets, including patents, to protect R&D investments and products/services. Actively shapes and repositions its patent portfolio to cover emerging technologies.
• Software Protection: Software, critical to all businesses (especially Electrification), is protected by copyrights, patents, and contractual protections.
• Trade Secrets: Protects trade secrets and confidential know-how through internal policies, innovation/proprietary information agreements, non-disclosure agreements, and cybersecurity tools.
• Licensing Programs: Has a license to use certain IP from General Electric Company, including the GE name and Monogram, for its products, services, and natural extensions.

Technology Partnerships:

• Strategic Alliances: Collaborates with third parties on R&D and new offerings (e.g., direct air capture deployment with a collaborator).
• Research Collaborations: Advanced Research partners with other established and start-up companies and educational institutions to incubate and commercialize new technology and launch new businesses.
• Joint Ventures: Engages in joint ventures for technology development (e.g., Hitachi-GE Nuclear Energy for SMR design and development).

Leadership & Governance

Executive Leadership Team

Leadership Continuity: Not explicitly detailed in the provided 10-K excerpt.

Board Composition: The Board of Directors includes a Non-Executive Chair (Stephen Angel) and several other Directors (Nicholas K. Akins, Arnold W. Donald, Matthew Harris, Martina Hund-Mejean, Jesus Malave, Paula Rosput Reynolds, Kim K.W. Rucker). The board is classified through 2029, with directors removable only for cause during that period. The Audit Committee of the Board is responsible for board-level oversight of cybersecurity risk.

Human Capital Strategy

Workforce Composition:

• Total Employees: Approximately 75,000 employees globally.
• Geographic Distribution: Approximately 24,000 in Europe, 21,000 in the U.S., 19,000 in Asia, and 6,000 in Latin America.
• Skill Mix: Approximately 70% of employees specialize in manufacturing, engineering, or services. Over 3,000 employees are in quality or environmental, health, and safety (EHS) roles.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Committed to attracting, developing, and retaining exceptional talent.
• Retention Metrics: Not explicitly detailed, but the company aims to cultivate an engaging work experience.
• Employee Value Proposition: Focuses on an environment where employees can learn, experiment, and grow professionally and personally, with self-directed career development tools, world-class early career development programs, leadership learning, energy industry acumen, and hands-on lean experiences. Compensation philosophy includes clear expectations, ongoing feedback, and pay-for-performance.

Diversity & Development:

• Diversity Metrics: Not explicitly detailed, but committed to building and fostering an inclusive workplace globally.
• Development Programs: Investments in early career development, leadership learning, energy industry acumen, and lean experiences.
• Culture & Engagement: Operates according to shared principles ("the GE Vernova Way") focused on innovation, customer service, lean practices, teamwork, and accountability. Strives to build and maintain productive relationships with employee-representative organizations globally.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Emissions Targets: Goal to achieve carbon neutrality for Scope 1 and Scope 2 emissions by 2030.
• Carbon Neutrality: Committed to advancing decarbonization technologies and deploying products increasingly capable of lower carbon emissions.
• Renewable Energy: Catalyzes access to more secure, sustainable, reliable, and affordable electricity, and invents, deploys, and services technology to help decarbonize and electrify the world. Supply Chain Sustainability:
• Supplier Engagement: Expanding efforts to consider environmental impact and ESG regulations, and alignment to the GE Vernova sustainability framework in its risk-based supplier onboarding process.
• Responsible Sourcing: Recognizes the importance of critical raw materials and nature in its mission. Social Impact Initiatives:
• Community Investment: Committed to building and fostering an inclusive workplace globally and in the communities in which it operates.
• Product Impact: Seeks to add power generation and grid capacity to strengthen electricity infrastructure, provide critical redundancy, support electrification in underserved regions, and encourage economic development.
• Circular Economy: Working to track 90% of its top products as part of its circularity framework by 2030, including eco-design principles.
• Thrive Pillar: Advances safe, responsible, and inclusive working conditions, prioritizes safety, promotes a culture of compliance and ethics, and advances human rights across its supply chain.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Not explicitly detailed, but demand for wind energy can be impacted by sector-specific tariffs and production tax credits, increasing short-term demand volatility.
• Economic Sensitivity: Global operations are affected by regional and global factors impacting energy demand, including industry trends like decarbonization, increasing demand for renewable energy, governmental regulations, and broader economic and geopolitical conditions.
• Industry Cycles: The power industry is shifting from coal generation to zero- or low-carbon energy sources, requiring an evolving balance of generation sources.

Planning & Forecasting:

• Maintains strong supplier relationships and connected forecasting to identify and mitigate capacity risks.
• Makes capacity expansion decisions and supply commitments based on demand forecasts, orders, slot reservation agreements, and deposits.
• Adjusts pricing and contractual terms based on demand, inflation, and industry dynamics.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Nuclear: Nuclear products and technologies are regulated by country-specific laws (e.g., U.S. Nuclear Regulatory Commission, Canadian Nuclear Safety Commission) covering licensing, permitting, and decommissioning.
• Offshore Wind: Subject to regulatory oversight by agencies like the U.S. Bureau of Safety and Environmental Enforcement (BSEE) and the U.K.'s Health and Safety Executive (HSE) and Marine Management Organisation (MMO).
• Electrification Software: Products and services comply with applicable privacy, data, and cybersecurity regulations (e.g., General Data Protection Regulation in Europe).
• Financial Services: Certain entities are registered with the SEC as an investment adviser and a broker-dealer, subject to laws and regulations from the SEC, FINRA, and state securities regulators.
• EHS Laws: Subject to international, national, state, and local EHS laws, regulations, and industry/customer standards across its product lifecycle and global organization.
• Chemicals: Regulations governing chemicals and components (e.g., REACH regulation in the EU, PFAS).
• Radioactive Materials: Operations involve handling, use, transportation, and disposal of radioactive and hazardous materials, subject to international, federal, state, and local regulations. International Compliance:
• Global Sanctions Regimes: Must comply with global sanctions regimes and an increasing number of global laws and regulations extending to sourcing, purchasing, and product life cycles.
• Customs Laws: Import activities governed by customs laws in each country of operation.
• ESG Regulations: Subject to sustainability disclosure requirements (e.g., EU Corporate Sustainability Reporting Directive, EU Taxonomy, EU Corporate Sustainability Due Diligence Directive), carbon emissions regulations (e.g., EU Carbon Board Adjustment Mechanism), labor and employment, deforestation, human rights due diligence, modern slavery, forced labor, and whistleblower directives. Trade & Export Controls:
• Export Restrictions: Subject to export control laws and trade restrictions.
• Sanctions Compliance: Compliance with sanctioned entity restrictions and monitoring. Legal Proceedings: Regularly involved in various arbitrations, class actions, commercial litigation, investigations, and enforcement actions. Accruals for legal matters are recorded when a loss is probable and reasonably estimable. As of December 31, 2025, the company had $441 million in legal liabilities.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate (2025): -72.5% (benefit)
• Geographic Tax Planning: Subject to income and other taxes in the U.S. and numerous foreign jurisdictions.
• Tax Reform Impact: Benefits from advanced manufacturing credits provided by the Inflation Reduction Act, resulting in a $401 million reduction to cost of equipment in 2025.
• Deferred Tax Assets: Recorded a $2.91 billion income tax benefit in Q4 2025 due to a change in judgment regarding the realizability of a significant portion of its U.S. federal and state deferred tax assets. As of December 31, 2025, total deferred tax assets after valuation allowances were $5.30 billion.
• Unrecognized Tax Benefits: $921 million (including interest and penalties) as of December 31, 2025.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Manages insurance exposure through an insurance captive.
• Risk Transfer Mechanisms: Uses financial instruments, including derivatives contracts, to manage and mitigate market risks from foreign currency exchange rates, interest rates, and commodity prices. Employs hedging strategies and master netting arrangements for derivative contracts.
• Guarantees: Provides credit support ($557 million as of December 31, 2025) on behalf of customers or associated companies (joint ventures and partnerships).
• Indemnification Agreements: Has $964 million in indemnification commitments, including obligations from the Spin-Off and commercial contracts, with a recorded liability of $628 million as of December 31, 2025. This includes a $347 million liability related to restricted cash from General Electric Company for legacy legal matters and $186 million for indemnifications related to the Spin-Off agreements (e.g., Tax Matters Agreement).