Company: GE
Filing Date: 2025-10-21
Form Type: 10-Q
Source: 0000040545-25-000132
Chunk: 123

Company: GENERAL ELECTRIC CO
Filing Date: 2025-10-21
Form: 10-Q
Item: Item 8
Chunk 123
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 equivalents, investment securities (Note 3) and derivative financial instruments below.DERIVATIVES AND HEDGING. Per our policy, derivatives are used solely for managing risks and not for speculative purposes. We use derivatives to manage risks related to foreign currency exchange (including foreign equity investments), interest rates and commodity prices.We use foreign currency forward and cross-currency interest rate swap contracts designated as cash flow hedges primarily to reduce the effects of foreign exchange rate changes. The gains or losses on derivatives that are designated as cash flow hedges are initially recorded in Statement of Other Comprehensive Income (Loss) and subsequently reclassified to earnings when the hedged transaction affects earnings. We expect to reclassify $55 million of gains from AOCI to earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions.We use our foreign currency debt and cross-currency interest rate swaps in net investment hedges to hedge currency exposure of our net investments in foreign operations. Gains and losses on net investment hedges are initially recorded in the Statement of Other Comprehensive Income (Loss). The carrying value of foreign currency debt designated as net investment hedges was $4,944 million and $5,199 million at September 30, 2025 and December 31, 2024, respectively. For cross-currency interest rate swaps in qualified hedging relationships, we recognize the periodic interest settlements within Interest and other financial charges in the Statement of Operations. Such interest amounts were $9 million and $17 million for the three and nine months ended September 30, 2025, respectively. There was no activity during the first three quarters of 2024. The cash flows associated with these periodic interest settlements are classified as operating activities in the Statement of Cash Flows. We also use derivatives for economic hedges when we have exposures to currency exchange risk for which we are unable to meet the requirements for hedge accounting or when changes in the carrying amount of the hedged item are already recorded in income in the same period as the derivative making hedge accounting unnecessary. Even though the derivative is an effective economic hedge, there may be a net effect on income in each period due to differences in the timing of income recognition between the derivative and the hedged item.FAIR VALUE OF DERIVATIVESSeptember 30, 2025December 31, 2024Gross NotionalFair Value - AssetsFair Value - LiabilitiesGross NotionalFair Value - AssetsFair Value - LiabilitiesQualifying currency exchange contracts$1,