* [DB4\_2023 FS Final SIGNED](#pf1) + [Cover page](#pf1) + [Contents](#pf2) + [Directors and other information](#pf3) + [Directors™ report](#pf5) + [Statement of Directors™ responsibilities in respect of the Financial Statements](#pfe) + Independent auditor™s report + [Financial Statements](#pf18) - [Statement of Comprehensive Income](#pf18) - [Statement of Financial Position](#pf19) - [Statement of Changes in Equity](#pf1b) - [Cash Flow Statement](#pf1c) - [Notes forming part of the Financial Statements](#pf1d) * [16. Financial risk management](#pf1d) * [1. Basis of preparation](#pf1d) + [Reporting entity](#pf1d) * [2. Material accounting policy information](#pf1e) * [3. Use of estimates and judgements](#pf29) * [4. Interest income](#pf2d) * [5. Interest expense](#pf2d) * [6. Fee and commission income](#pf2d) * [7. Service and commitment fee expense](#pf2e) * [8. Net gain/(loss) from financial instruments carried at fair value](#pf2e) + [8.1. Company](#pf2e) * [9. Foreign exchange gain/(loss)](#pf2e) * [10. Profit before income tax](#pf2f) * [11. Income tax charge](#pf2f) * [12. Correction of errors in basis adjustment amortisation](#pf30) * [13. Cash and cash equivalents](#pf32) * [14. Deferred tax asset](#pf32) * [15. Share capital, share premium and reserves](#pf32) * [17. Accounting classifications and fair values](#pf43) * [18. Financial assets and liabilities](#pf45) * [19. Loans and advances](#pf46) * [20. Debt securities issued](#pf47) * [21. Changes in liabilities from financing activities](#pf49) * [22. Related party disclosures](#pf4a) * [23. Operating segments](#pf4c) * [24. Holding Company](#pf4d) * [25. Commitments and contingencies](#pf4d) * [26. Subsequent events](#pf4d) * [27. Approval of financial statements](#pf4d) * GE Capital UK Funding Unlimited Company\_ListedEntityAuditReport\_31 December 2023 ![]() Registration number: 367997 # GE Capital UK Funding Unlimited Company Directors' report and audited financial statements Financial year ended 31 December 2023 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Directors’ report and audited Financial Statements Contents Directors and other information 1 - 2 Directors’ report 3 - 11 Statement of Directors’ responsibilities in respect of the Financial Statements 12 Independent auditor’s report 13 - 21 Statement of Comprehensive Income 22 Statement of Financial Position 23 - 24 Statement of Changes in Equity 25 Cash Flow Statement 26 Notes forming part of the Financial Statements 27 - 75 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Directors and other information Directors F. Mullin (resigned 20 March 2024) R. Holmes (resigned 31 December 2023) T. Geary M. Power S. Pounch (resigned 20 March 2024) K. Lynch (appointed 29 September 2023) S. O'Connor (appointed 29 September 2023) D Redmond (appointed 29 September 2023) J. Connor (appointed 18 December 2023) Secretary H. McAneny Registered office 86-88 Lower Leeson Street Dublin 2 D02 A668 Ireland Independent auditor Deloitte Ireland LLP Chartered Accountants and Registered Auditors Deloitte & Touche House 29 Earlsfort Terrace Dublin 2 Ireland Principal bankers Barclays Plc 1 Churchill Place London E14 5HP England JP Morgan Chase & Co. 1 Chase Manhattan Plaza New York, 10005 United States BNP Paribas 16, Boulevard des Italiens Paris, 75009 France 1 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Directors and other information (continued) Solicitor A&L Goodbody 3 Dublin Landings, North Wall Quay International Financial Services Centre Dublin 1 D01C4E0 Ireland 2 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Directors’ report The Directors present their annual report and audited Financial Statements (the “Financial Statements”) for the financial year ended 31 December 2023. Principal activities, business review and future developments GE Capital UK Funding Unlimited Company (the “Company”) is incorporated and tax resident in Ireland and operates as a financial services Company. The Company is a public unlimited Company and is a wholly owned subsidiary of General Electric Company (“GEC”) which is a limited liability Company and therefore the Company, via section 1274, is in scope of Part 6 of the Companies Act 2014 for Financial Statements preparation purposes. The Company has established a Great British Pound (“GBP”) Commercial Paper (“Commercial Paper” or “CP”) Programme and a GBP Medium Term Note (“MTN”) Programme. The MTN programme is listed on the London Stock Exchange. The purpose of these programmes is to obtain financing in capital markets, to fund the operations of GEC affiliates. GE Capital International Holdings Limited (“GECIHL”), has guaranteed (assigned from General Electric Capital Corporation ‘GECC’) the CP and MTN programmes of the Company, thus reducing the risk to any potential investor and supporting the CP and MTN programme. GEC (rated BBB+), has also guaranteed the CP and MTN programmes of the Company thus reducing further the risk to any potential investor and supporting the CP and MTN programmes (See Note 20). During the year the Company had no requirement for excess cash and as a result did not participate in the CP market. The Company will continue in business for the foreseeable future to service existing MTN programmes. The Directors have determined a number of metrics including total assets and the results of the Company to be key performance indicators. The total assets for the year are set out in the Statements of Financial Position on page 23. The results for the year are set out in the Statements of Comprehensive Income (‘SOCI’) on page 22 and the related notes. The results before taxation of the Company are a loss of USD 6 million for the financial year ended 31 December 2023 (2022: profit of USD 44 million), primarily driven by foreign exchange ('FX') losses as a result of the GBP/USD FX rate increasing from 1.209 as at 31 December 2022 to 1.275 as at 31 December 2023 (2022: FX rate decreases from 1.353 as at 31 December 2021 to 1.209 as at 31 December 2022). The decrease in total assets is primarily driven by MTN maturities and cash distribution to its parent GE Ireland USD Holdings Unlimited Company. During the year, fixed rate debt with a nominal value of USD 478 million has matured and no debt failed hedge effectiveness (2022: no fixed rate debt matured and no debt failed hedge effectiveness). The directors are not expecting a change in the principal activity of the company in the foreseeable future. On 9 November 2021, GEC announced that it would form three global listed companies that are intended to be run independently and focus on the aerospace, healthcare, and energy segments. In this context, GEC spun off 80.1% of its Healthcare business on 3 Jan 2023. 3 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Directors’ report (continued) Principal activities, business review and future developments (continued) In addition, GE Digital, Renewables and Power businesses are to be combined into one business and spun off from GEC on 2 April 2024 (going forward branded as GE Vernova). GEC is an aviation-focused company shaping the future of flight while retaining certain other assets and liabilities including its runoff insurance operations (going forward branded as GE Aerospace). As a consequence of the operations, and going forward GEC will be known as GE Aerospace, the Company will be part of GE Aerospace. The spin-off has had no direct impact on this entity. At the date of signing these financial statements there has been no impact from these transactions on this entity. Dividends During the year, as part of a simplification restructuring plan within the group, the Company made a distribution of USD 700,000,000 (2022: USD Nil) to its parent GE Ireland USD Holdings Unlimited Company following a share premium reduction of USD 820,000,000 (2022: USD Nil). Going concern The future growth of the Company is dependent on the cash needs of the GE Aerospace after spin off. The Directors have assessed the loan receivable positions and have concluded that the balances remain recoverable. The GEC Group does not expect the need for new long-term debt issuances by the Company for the foreseeable future. As noted above the debt issued by the Company through its CP and MTN arrangements is guaranteed by GEC and GECIHL. Maturity dates of debt issued are provided in Note 20. The Directors have performed a going concern assessment for a period of 12 months from the date of approval of these financial statements, also considering events reasonably foreseeable beyond this horizon, which indicates that, taking account of the inflationary impacts in the economy and higher interest rates, and in light of the Company’s ability to access the group's cash pool facility if required, the Company will have sufficient funds to meet its liabilities as they fall due for that period. The Directors are confident that the Company will have sufficient funds to continue in operational existence for at least 12 months from the date of approval of these financial statements and they continue to adopt the going concern basis of accounting in preparing the annual financial statements. Accordingly, the Directors have also considered the below among other factors in concluding that it remains appropriate to prepare the Financial Statements on a going concern basis: • The Company has substantial positive equity and it is linked to the GE Aerospace's U.S. cash pool, therefore has the resources to continue in business. • GECIHL has guaranteed the Company’s liabilities under its CP and MTN programmes, substantially mitigating liquidity risk. • GEC has also guaranteed the Company’s liabilities under its CP and MTN programmes, substantially mitigating liquidity risk. 4 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Directors’ report (continued) CP and MTN’s The following table sets out the year on year increase / (decrease) in MTN’s issued, lending from GEC affiliates and lending to GEC affiliates. The Company did not participate in the CP market during the financial year. The Directors define GEC affiliates to be subsidiaries, associates and joint ventures of the wider GEC Group. The table has been calculated using the closing Company balances for the financial year. Dec 2023 Dec 2022 Year on year increase / (decrease) Liabilities Issued Medium Term Notes (Nominal) (29.2)% (10.6)% Loans from GEC affiliates 1.4% 130.5% Assets Loans to GEC affiliates (35.1)% (4.8)% The movement in MTNs is primarily driven by MTN maturities and an increase of GBP/USD foreign exchange rate from 1.209 as at 31 December 2022 to 1.275 as at 31 December 2023. During the year, MTNs matured with a nominal value of USD 478 million (2022: USD Nil). The following table sets out the weighted average maturities of MTN's in issue at 31 December 2023 and 31 December 2022. 31 December 2023 31 December 2022 Medium Term Notes (floating) at amortised cost nil nil Medium Term Notes (fixed) in qualifying hedging relationships 10.02 years 11.02 years Medium Term Notes (fixed) held at amortised cost nil 0.66 years During 2023, the Company discovered a system error related to the basis adjustment amortisation and as a consequence, the debt interest expense and the fair value of debt securities were understated for the 2022 financial year. The error has been corrected by restating each of the affected financial statement line items for the prior period. Please see Note 12 for further details. 5 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Directors’ report (continued) Principal risk and uncertainties The main financial risks that the Company is exposed to are foreign exchange risk, liquidity risk, market risk, credit risk and other price risk. The Directors are responsible for the oversight of policies to manage these exposures, as set out in Note 16. Foreign exchange risk The Company has exposure to foreign exchange risk. This risk arose as some operations including loans and advances to GEC affiliates and all debt securities issued are in GBP while the functional currency of the Company is USD. Through the use of foreign currency forwards, the Company is generally able to reduce the foreign exchange risk. During the financial year, the Company recorded an FX loss of USD 26 million (31 December 2022: gain of USD 105 million) driven by movement in the GBP/USD rates. Interest rate risk As a funding Company, it is exposed to interest rate volatility on variable funding arrangements. Through the use of derivatives, the Company was generally able to reduce interest rate mis-matches and in so doing reduce their interest rate risk. The Directors continue to monitor interest rate exposure. See Note 16 for an analysis of interest rate exposure at the financial year end. Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations from its financial liabilities. The Company has access to the cash pool of the wider GEC Group to fill any short-term liquidity requirements and to meet undrawn loan commitments. See further analysis of liquidity risk at the financial year end at Note 16. Market risk The carrying value of financial assets and financial liabilities may change due to interest rate volatility, credit spread changes and general market conditions. In an effort to ensure appropriate valuations were obtained, the Company relied on independent pricing providers such as International Data Corporation ("IDC") and models used by the wider GEC Group, which primarily use observable market data as inputs. Such valuations necessarily involve judgements and uncertainties on the selection of the inputs. Critical judgements and uncertainties surrounding valuations are discussed further in Note 3. Credit risk GEC affiliates may experience difficulty in repaying loans. By carrying out comprehensive due diligence on each borrower the Company has been able to manage its exposure to credit risk and the Company experienced no defaults during the financial year. The closing impairment loss provision at 31 December 2023 was USD 3.8 million (2022: USD 5 million) for the Company, please see Note 16 for further details. The Directors will continue to monitor the financial strength of its borrowers to ensure the Company’s exposure to the risk of default is minimized. 6 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Directors’ report (continued) Principal risk and uncertainties (continued) Operational risk Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal requirements and generally accepted standards of corporate behaviour. Operational risk arises from all of the Company’s operations and is similar to those faced by all business entities. The Company seeks to manage operational risk, so as to balance the avoidance of financial losses and damage to the Company’s reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity. The Directors are responsible for the development and implementation of controls to address operational risk. This responsibility is supported by the development of overall GEC standards for the management of operational risk in the following areas: • requirements for appropriate segregation of duties, including the independent authorisation of transactions; • requirements for the reconciliation and monitoring of transactions; • compliance with legal requirements; • documentation of controls and procedures; • requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks identified; • training and professional development; and • ethical and business standards. Compliance with the Company standards is supported by a programme of periodic reviews to ensure compliance with GEC Group risk management policies. The Directors review the development, selection and disclosure of the Company’s critical accounting policies and estimates, and the application of these policies and estimates. Directors, Secretary and their interests The Directors who served during the year and up to the date of signing the directors report were Sarah O'Connor, David Redmond, Keith Lynch, John Connor, Tom Geary and Michael Power listed on page 1. In accordance with the Articles of Association, the Directors are not required to retire by rotation. Robert Holmes resigned effective from 31 December 2023. Sarah O'Connor, David Redmond and Keith Lynch were appointed as Directors effective from 29 September 2023. John Connor was appointed as Director effective from 18 December 2023. The Secretary is Helena McAneny listed on page 1. In accordance with the Companies Act 2014, as none of the Directors or secretary holds a disclosable interest (representing shares in the Company of 1 percent or more in nominal value of GEC’s issued share capital) in the shares of GEC or any GEC affiliates, there is no requirement to disclose their shareholdings. 7 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Directors’ report (continued) Related parties The Company’s related party transactions in loans and advances to related parties have decreased by 35.1% and in loans and advances from related parties have increased by 1.4%. The decrease in loans and advances to related parties is due to termination and repayment of a loan facilities and cash distribution to its parent. Accounting records The Directors have reasonable grounds to believe that they have complied with the requirements of Sections 281 to 285 of the Companies Act 2014 with regard to maintaining adequate accounting records by utilising accounting personnel with appropriate expertise and by providing adequate resources to the finance function. The accounting records of the Company are maintained at 86-88 Lower Leeson Street, Dublin 2, D02 A668, Ireland. Corporate governance statement The Directors have put in place a framework for corporate governance which it believes is suitable for the Company and which enables the Company to operate in an environment of good governance throughout the financial year. The Company's internal control procedures are designed to safeguard the Company's net assets, support effective management of the Company's resources and provide reliable and timely financial reporting both internally to management and to those charged with governance, and externally to other stakeholders. They include the following: - An organisational structure with formally defined lines of responsibility and delegation of authority. - Established systems and procedures to identify, control and report on key risks. Exposure to these risks are monitored by the Directors. The preparation and issue of financial reports, including the Company Financial Statements is managed by the finance function with oversight from the Directors. The Company's financial reporting process is controlled using documented accounting policies and reporting formats issued by the finance function to all reporting entities (including subsidiaries) within the GEC Group in advance of each reporting year end. The finance function of the GEC Group supports all reporting entities with guidance in the preparation of financial information. The process is supported by a network of finance professionals throughout the GEC Group, who have responsibility and accountability to provide information in keeping with agreed policies, including the completion of reconciliations of financial information to processing systems. Its quality is underpinned by arrangements for the segregation of duties to facilitate independent checks on the integrity of financial data. The financial information for each entity is subject to a review at reporting entity and Company level by senior management. The Company’s risk management policies are based on the policies of the ultimate parent GEC and are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. 8 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Directors’ report (continued) Corporate governance statement (continued) As the Company has only debt securities listed on the London Stock Exchange, it has availed of an exemption from the Financial Services Authority’s requirements to make corporate governance disclosures and from auditor review thereof. The Company does not have transferrable securities as defined by S.I. No. 255/2006 - European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006 (“Takeover Bids Regulations”) and therefore the Company is not required to include in its Corporate Governance Statement the disclosures required by Section 21 thereof. Financial reporting The Company is responsible for establishing and maintaining adequate internal control and risk management systems in relation to the financial reporting process. Such systems are designed to manage rather than eliminate the risk of error or fraud in achieving the Company’s financial reporting objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The Company is responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the financial position of the Company and which enable it to ensure that the Financial Statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (E.U.) and comply with the Irish Companies Act 2014. The measures taken by the Directors to secure compliance with the Company’s obligation to keep adequate accounting records are the use of appropriate systems and procedures and the employment of competent persons. The Company has procedures in place to ensure all relevant accounting records are properly maintained and are readily available, including production of annual Financial Statements. The statutory Financial Statements of the Company are required to be approved by the Directors of the Company and filed with the London Stock Exchange and the Companies Registration Office. The statutory Financial Statements are required to be audited by independent auditors who report annually to the Directors on their findings. The Directors evaluate and discuss significant accounting and reporting issues as the need arises. Shareholder meetings The convening and conduct of shareholder meetings are governed by the Articles of Association of the Company and the Companies Act 2014. The Company is required to hold an annual general meeting each year and not more than fifteen months may elapse between the date of one annual general meeting of the Company and that of the next. The Directors may call general meetings and extraordinary general meetings may be convened in such manner as provided by the Companies Act 2014. Subject to the provisions of the Companies Act 2014 allowing a general meeting to be called by shorter notice, an annual general meeting and a general meeting called for by the passing of a special resolution will be called by at least twenty-one clear days’ notice. Composition and operation of the Board The Directors have established an on-going process for identifying, evaluating and managing the significant risks faced by the Company for the year under review and up to the date of approval of the Financial Statements. This risk management process is regularly reviewed by the Directors. The Directors review the internal audit programmes and the Financial Statements and there are formal procedures in place for the external auditors to report findings and recommendations to the Directors. Any significant findings or identified risks are examined so that appropriate action can be taken. 9 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() GE Capital UK Funding Unlimited Company ### Directors’ report (continued) Corporate governance statement (continued) The business of the Company is managed by the Directors who exercise all such powers of the Company as are not exercised by the Companies Act 2014 or by the Articles of Association of the Company required to be exercised by the shareholders in general meeting. Unless otherwise determined by the shareholders in a general meeting, the number of Directors shall not be less than two. Currently the Board of Directors of the Company is composed of eight Directors, being those listed on page 1 of these Financial Statements. The Directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit. The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors and unless so fixed at any other number will be two. Matters arising at any meeting of the Directors are determined by a majority of votes. A Director may, and the Company’s secretaries on the request of a Director will, at any time call a meeting of the Directors. Audit committee The Company’s ultimate parent, GEC, is a regulated entity that must meet certain requirements in accordance with its New York Stock Exchange listing. As a result, the GEC Group has internal audit and finance functions with responsibility for, amongst other things, the monitoring of the effectiveness of the GEC Group’s systems of internal control, internal audit and risk management. Nevertheless, the Directors having considered the matter, on 15 March 2017, an audit committee was established. The Members of the Committee are Thomas Geary, Michael Power and Keith Lynch. Thomas Geary and Michael Power are non-executive Directors. Robert Holmes resigned effective from 31 December 2023 and Keith Lynch was appointed as a committee member effective from 6 December 2023. Subsequent events Fergal Mullin and Shane Pounch resigned as Directors effective from 20 March 2024. On 2 April 2024 GEC completed the spin-off of its Digital, Renewables and Power businesses into GE Vernova, going forward GEC will be known as GE Aerospace. This has had no direct impact on the Company. No other significant events affecting the Company occurred since the reporting date, which require adjustment to or disclosure in the Financial Statements. Compliance statement The Directors, in accordance with Section 225(2) of the Companies Act 2014, acknowledge that they are responsible for securing the Company’s compliance with certain obligations specified in that section arising from the Companies Act 2014 where applicable, the Market Abuse Regulation, the Market Abuse (Criminal Sanctions) Directive, the Financial Conduct Authority's Transparency Rules and Tax laws (‘relevant obligations’). The Directors confirm that: - a compliance policy statement has been drawn up setting out the Company's policies that in their opinion are appropriate with regard to such compliance; - appropriate arrangements and structures have been put in place that, in their opinion, are designed to provide reasonable assurance of compliance in all material respects with those relevant obligations; and - a review has been conducted, during the financial year, of those arrangements and structures. 10 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Directors’ report (continued) Disclosure of information to the auditors The Directors who held office at the date of approval of this Directors’ report confirm that, so far as they are each aware, there is no relevant audit information of which the Company’s auditor is unaware; and each Director has taken all of the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of section 330 of the Companies Act 2014. Independent Auditor In accordance with Section 383(2) of the Companies Act 2014, the auditor, Deloitte Ireland LLP, Chartered Accountants and Statutory Audit Firm have expressed their willingness to continue in office. Responsibility Statement in accordance with the UK Financial Conduct Authority's Transparency Rules Each of the Directors whose names are listed on page 1 of these Financial Statements confirm that, to the best of each person’s knowledge and belief: • the Financial Statements, prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities and financial position of the Company at 31 December 2023 and its profit for the financial year then ended; • the Directors’ report contained in the Annual Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces. On behalf of the board K. Lynch J. Connor Director Director Date 19 April 2024 11 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Statement of Directors’ responsibilities in respect of the Financial Statements for the financial year ended 31 December 2023 The Directors are responsible for preparing the directors report and financial statements, in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Company and of its profit or loss for that year. In preparing these financial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • state whether applicable Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; • assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and • use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial position and profit or loss of the Company and enable them to ensure that the financial statements comply with the Companies Act 2014. They are responsible for such internal controls as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. The Directors are also responsible for preparing a directors report that complies with the requirements of the Companies Act 2014. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. On behalf of the Board K. Lynch J. Connor Director Director Date 19 April 2024 12 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() Continued on next page/ Deloitte Ireland LLP Chartered Accountants & Statutory Audit Firm INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GE CAPITAL UK FUNDING UNLIMITED COMPANY Report on the audit of the financial statements Opinion on the financial statements of GE Capital UK Funding Unlimited Company (the ‘company’) In our opinion the financial statements:  give a true and fair view of the assets, liabilities and financial position of the company as at 31 December 2023 and of the loss for the financial year then ended; and  have been properly prepared in accordance with the relevant financial reporting framework and, in particular, with the requirements of the Companies Act 2014. The financial statements we have audited comprise:  the Statement of Comprehensive Income;  the Statement of Financial Position;  the Statement of Changes in Equity;  the Cash Flow Statement; and  the related notes 1 to 27, including material accounting policy information as set out in note 2. The relevant financial reporting framework that has been applied in their preparation is the Companies Act 2014 and International Financial Reporting Standards (IFRS) as adopted by the European Union (“the relevant financial reporting framework”). Basis for opinion We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are described below in the “Auditor's responsibilities for the audit of the financial statements” section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), as applied to listed entites, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Summary of our approach Key audit matters The key audit matters that we identified in the current year were:  Recoverability of Loans and Advances to General Electric Company (“GEC”) Affiliates – Expected Credit Loss Provisioning  Hedge Accounting and Valuation of Derivatives Including CVA/DVA Within this report, any new key audit matters are identified with and any key audit matters which are the same as the prior year identified with . Materiality The materiality that we used in the current year was US $4,301k which was determined on the basis of 1% of net assets. Scoping We determined the scope of our audit by obtaining an understanding of the company and its environment, including the identification of relevant controls. We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. As part of our risk assessment, we assessed the control environment in place to the extent relevant to our audit. The risks of material misstatement that have the greatest effect on our audit are identified as key audit matters in the “Key Audit Matters” section of our report. ![]() /Continued from previous page INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GE CAPITAL UK FUNDING UNLIMITED COMPANY Continued on next page/ Significant changes in our approach No significant changes in our approach from prior year. Conclusions relating to going concern In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of accounting included:  obtaining an understanding of the company’s business model, objectives, strategy and related business risks and the manner in which the company is structured and financed;  reviewing the company’s financial performance, including forecasts, future cash flows, and management’s budgeting processes;  performing discussions with management on the directors’ going concern assessment, the future plans for the company and the feasibility of those plans;  reviewing board meeting minutes available for the current year up to the date of approval of the financial statements;  reviewing the cash pool agreements and guarantees from General Electric Capital International Holdings Limited (“GECIHL”) and GEC to the company;  reviewing the company’s activity subsequent to the financial year end; and  assessing the adequacy of the relevant going concern disclosures made in the financial statements. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current financial year and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Recoverability of Loans and Advances to GEC Affiliates – Expected Credit Loss Provisioning Key audit matter description The Company holds US $3,845k (2022: US $4,998k) of expected credit losses against: Non-current assets: US $997,483k (2022: US $966,071k) of loans and advances to GEC affiliates. Current assets: US $1,086,277k (2022: US $2,245,409k) of loans and advances to GEC affiliates. In line with IFRS 9- Financial Instruments, losses on financial assets which are classified at amortised cost are recognised on an Expected Credit Loss (“ECL”) basis. ECLs are required to incorporate forward looking information, reflecting management’s view of potential future economic environments. The complexity involved in the ECL calculations requires management to develop methodologies be ![]() /Continued from previous page INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GE CAPITAL UK FUNDING UNLIMITED COMPANY Continued on next page/ applied by management. Measurement of the ECL allowance on loans and advances to GEC affiliates is a key audit matter as the determination of assumptions for ECLs is highly subjective due to the level of judgement required to be applied by management. The appropriate accounting treatment of the impairment of loans and receivables, and the provision of impairment required by IFRS 9 is crucial to ensuring the financial statements are free from material misstatement. Furthermore, the audit team have engaged an internal valuation specialist to assess the ECL models. Please refer to note 2 (Material accounting policy information – Financial assets and liabilities), note 16 (Financial risk management) and note 19 (Loans and advances) in the financial statements. How the scope of our audit responded to the key audit matter The procedures we performed, included;  In conjunction with our internal specialists, assessing the ECL models and methodology against the requirements of IFRS 9;  Gaining an understanding on the movements in the ECL balance with reference to the underlying loan portfolios, credit quality changes and market factors;  Challenging the appropriateness of management’s key assumptions used in the ECL model, in particular the Probability of Default and Loss Given Default assumptions, by reference to the Company’s data and externally sourced information were available; and  Reviewing the supporting documentation for the ECL model and assessing the appropriateness of the approach adopted by management and the reasonableness of the ECL conclusions. Based on the work performed, the ECL recorded in the financial statements is within a range we consider reasonable. Key Observations There is no obersavtions which we would like to bring to your attention based on the procedures performed for this key audit matter. Application of Hedge Accounting & Valuation of Derivatives Key audit matter description As of 31 December 2023, the fair value of derivatives held for risk management were: Current assets: Derivative assets held for qualifying hedging relationships US $21,611k (2022: Nil) and Derivative assets held for trading US $Nil (2022: US $17,690k). Non-current liabilities: Derivative liabilities held for qualifying hedging relationships US ($9,092k) (2022: US 43,284k). This is a key audit matter as there is a risk that the incorrect application of IAS 39 hedge accounting rules and the valuation of underlying derivatives, including any valuation adjustments, could lead to a material misstatement in the financial statements.Furthermore, the audit team have engaged internal valuation specialists to assess the CVA/DVA methodologies applied by the company. Please refer to note 2 (Material accounting policy information - Derivatives held for risk management purposes and hedge accounting), note 16 (Financial risk management) and note 18 (Financial assets and liabilities). ![]() /Continued from previous page INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GE CAPITAL UK FUNDING UNLIMITED COMPANY Continued on next page/ How the scope of our audit responded to the key audit matter The procedures we performed, included: In relation to the application of IAS 39 hedge accounting and in conjunction with our internal valuation specialists:  We assessed the eligibility of each hedge designation by reviewing the hedge accounting policy.  Furthermore, we reviewed the hedge effectiveness testing to ensure the approach was in line with the requirements of IAS 39. With respect to the valuation of derivatives: • We independently valued a sample of derivatives based on the terms of the underlying contracts and compared to the valuations recorded by the company. • In conjunction with our valuation specialists, we independently assessed the Credit Valuation Adjustment (“CVA”) and Debit Valuation Adjustment (“DVA”) methodologies applied by the company. • We recalculated the CVA or DVA, where applicable, on a sample of open positions and compared to management calculation. No differences were above our clearly trivial threshold. We also reviewed the classification and adequacy of disclosures in the financial statements in accordance with the IFRSs. Key Observations We draw your attention to Note 12 of the financial statements, which outlines the restatement of the comparatives made by the company. Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express an opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any of the risks described above, and we do not express an opinion on these individual matters. Our application of materiality We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: Materiality $4,301k (2022 : $12,647k) Basis for determining materiality Approximately 1% of net assets Rationale for the benchmark applied We have considered the users of the financial statements (the investors) and have concluded net assets to be the critical component for determining materiality because it is the key indicator of assessing the company’s financial position. In determining this benchmark we considered the following: • The key balances within the financial statements; • Whether there are items on which the attention of the users of the financial statements are ![]() /Continued from previous page INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GE CAPITAL UK FUNDING UNLIMITED COMPANY Continued on next page/ focused; • The nature of the business and the industry and economic enviornment; • The ownership and finance structure of the company; and • Regulatory requirements of the financial statements We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. Performance materiality was set at 70% of materiality for the 2023 audit (2022: 70%). In determining performance materiality, we considered the following factors:  Our understanding of the entity including nature of the business and the industry;  The reliability of the entity’s internal control over Financial reporting; The entity’s history of misstatements, both corrected and uncorrected;  Any changes in the business that would affect the auditor's ability to forecast potential misstatements;  Management's lack of willingness to investigate and correct misstatements; and  Whether there is a disproportionate number of risks of material misstatement at the higher end of the spectrum. We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of US $215k (2022 : US $632k) as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements. An overview of the scope of our audit We structured our approach to the audit to reflect how the company is organised, with a primary focus on the key drivers of the company's main business operations and key risks. Our audit was scoped by obtaining an understanding of the company and its environment, including the controls operating within the company, and assessing the risks of material misstatement related to the financial statements of the company. The risks of material misstatement that have the greatest effect on our audit are identified as key audit matters in the table above. In establishing the overall approach to the audit, we determined the type of work that required the involvement of specialists, as a result we engaged tax, IT, valuation and hedge accounting specialists. Furthermore, we discussed the approach and scope with the component audit team. This ensured that our audit is both effective and risk focused. The company is primarily involved in obtaining finance in the capital markets to fund the operations of the wider GEC Group. The company has established a GBP Commercial Paper ("CP") and a GBP Medium Term Note (‘MTN’) Programme. We have conducted our audit based on the books and records maintained by the company at 86-88 Lower Leeson Street, Dublin 2, D02 A668, Ireland. Net Assets $430,087k Materiality $4,301k Audit Committee reporting threshold $215k Net Assets Materiality ![]() /Continued from previous page INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GE CAPITAL UK FUNDING UNLIMITED COMPANY Continued on next page/ The company is ultimately a wholly owned subsidiary of GEC. In establishing the overall scope of the audit, we determined the type of work that needed to be performed by component auditors for the purposes of this audit. We used the work of Deloitte member firsm in the United States fo America, operating under our instrcutions, in relation to the testing of the Loans and Advances, Derivative assets and liabilities and Debt securities issued. We had regular interaction with these component teams including virtual meetings and review of certain working papers. This, together with the additional procedures performed by Ireland, gave us the evidence we needed to form our opinion on the financial statements as a whole. Other information The other information comprises the information included in the directors’ report and audited financial statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the directors’ report and audited financial statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of directors As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on IAASA’s website at: https://iaasa.ie/publications/description-of-the-auditors-responsibilities-for-the-audit-of-the-financial-statements. This description forms part of our auditor’s report. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. ![]() /Continued from previous page INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GE CAPITAL UK FUNDING UNLIMITED COMPANY Continued on next page/ Identifying and assessing potential risks related to irregularities In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:  the nature of the industry and sector, control environment and business performance including the design of the company’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;  results of our enquiries of management and the audit committee about their own identification and assessment of the risks of irregularities;  any matters we identified having obtained and reviewed the company’s documentation of their policies and procedures relating to: o identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; o detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; o the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; the matters discussed among the audit engagement team and relevant internal specialists, including tax, valuations & IT specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. In common with all audits under ISAs (Ireland), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory framework that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2014, Applicable Listing Rules of the London Stock Exchange and Tax Legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. Audit response to risks identified As a result of performing the above, we did not identify any key audit matters related to the potential risk of fraud or non-compliance with laws and regulations. Our procedures to respond to risks identified included the following: • reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; • enquiring of management, the audit committee and in-house legal counsel concerning actual and potential litigation and claims; • performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; • reading minutes of meetings of those charged with governance and reviewing internal audit reports; and • in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, including internal specialists and significant component audit teams, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. ![]() /Continued from previous page INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GE CAPITAL UK FUNDING UNLIMITED COMPANY Continued on next page/ Report on other legal and regulatory requirements Opinion on other matters prescribed by the Companies Act 2014 Based solely on the work undertaken in the course of the audit, we report that:  We have obtained all the information and explanations which we consider necessary for the purposes of our audit.  In our opinion the accounting records of the company were sufficient to permit the financial statements to be readily and properly audited.  The financial statements are in agreement with the accounting records.  In our opinion the information given in the directors' report is consistent with the financial statements and the directors’ report has been prepared in accordance with the Companies Act 2014. Corporate Governance Statement required by the Companies Act 2014 We report, in relation to information given in the Corporate Governance Statement on pages 8 to 10 that: • In our opinion, based on the work undertaken during the course of the audit, the information given in the Corporate Governance Statement pursuant to subsections 2(c) and (d) of section 1373 of the Companies Act 2014 is consistent with the company’s statutory financial statements in respect of the financial year concerned and such information has been prepared in accordance with the Companies Act 2014. Based on our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any material misstatements in this information. Matters on which we are required to report by exception Based on the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report. We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by law are not made. Other matters which we are required to address Following the recommendation of the audit committee, we were appointed by the Board of Directors on the 23 May 2022 to audit the financial statements for the financial year ended 31 December 2022. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 2 years, covering the years ended 31 December 2022 to 31 December 2023. The non-audit services prohibited by IAASA’s Ethical Standard were not provided and we remained independent of the company in conducting the audit. Our audit opinion is consistent with the additional report to the audit committee we are required to provide in accordance with ISA (Ireland) 260. ![]() /Continued from previous page INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GE CAPITAL UK FUNDING UNLIMITED COMPANY Use of our report This report is made solely to the company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. David McCaffrey For and on behalf of Deloitte Ireland LLP Chartered Accountants and Statutory Audit Firm Deloitte & Touche House, 29 Earlsfort Terrace, Dublin 2 24 April 2024 ![]() ## GE Capital UK Funding Unlimited Company ### Statement of Comprehensive Income for the financial year ended 31 December 2023 Note 2023 USD'000 2022 (restated) USD'000 Interest income 4 104,534 39,100 Interest expense 5 (88,467) (52,497) Net interest income/(expense) 16,067 (13,397) Fee and commission income 6 264 433 Net trading income/(loss) 16,331 (12,964) Net gain/(loss) from financial instruments carried at fair value 8 3,996 (51,237) Service and commitment fee expense 7 (2,055) (1,132) Movement in impairment loss provision 16 1,153 3,789 Foreign exchange (loss)/gain 9 (25,694) 105,196 Operating (loss)/income (22,600) 56,616 (Loss)/profit before income tax 10 (6,269) 43,652 Income tax charge 11 - - (Loss)/profit for the year (6,269) 43,652 Other comprehensive income - - Total comprehensive (loss)/profit for the year (6,269) 43,652 The accompanying notes form an integral part of the Financial Statements. 22 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Statement of Financial Position at 31 December 2023 Note 31 December 2023 USD'000 31 December 2022 (restated) USD'000 Non-current assets Loans and advances to GEC affiliates 19 997,483 966,071 Current assets Cash and cash equivalents 13 - - Derivative assets held for qualifying hedging relationships 18 21,611 - Loans and advances to GEC affiliates 19 1,086,277 2,245,409 Derivative assets held for trading 18 - 17,690 Other assets 25 - Total assets 2,105,396 3,229,170 Current liabilities Loans and advances from GEC affiliates 19 (409,863) (404,301) Debt securities issued 20 (57,043) (530,775) Other liabilities - (1,024) Current Liabilities (466,906) (936,100) Net current assets 641,007 1,326,999 Total assets less current liabilities 1,638,490 2,293,070 Non-current liabilities Derivative liabilities held for qualifying hedging relationships 18 (9,092) (43,284) Debt securities issued 20 (1,199,311) (1,113,430) Total Liabilities (1,675,309) (2,092,814) Net assets 430,087 1,136,356 Capital and reserves Share capital 15 70,495 70,495 Share premium 15 367,244 1,187,244 Capital contribution 15 103,003 103,003 Undenominated capital reserve 15 18,766 18,766 Accumulated profits/(losses) 2,549 (111,182) Foreign exchange reserve 15 (131,970) (131,970) Shareholders' equity 430,087 1,136,356 The accompanying notes an integral part of the Financial Statements. 23 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Statement of Financial Position at 31 December 2023 (continued) On behalf of the board K. Lynch J. Connor Director Director Date 19 April 2024 24 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Statement of Changes in Equity at 31 December 2023 Share Capital USD'000 Share Premium USD'000 Undenominated Capital Reserve USD'000 Capital Contribution \* USD'000 Accumulated profits/(losses) USD'000 Foreign Exchange Reserve USD'000 Total USD'000 Balance at 1 January 2022 70,495 1,187,244 18,766 132,946 (154,834) (131,970) 1,122,647 Total comprehensive profit for the year (restated) - - - - 43,652 - 43,652 Transactions with owners of the Company Capital contribution \* - - - (29,943) - - (29,943) Balance at 31 December 2022 (restated) 70,495 1,187,244 18,766 103,003 (111,182) (131,970) 1,136,356 Balance at 1 January 2023 70,495 1,187,244 18,766 103,003 (111,182) (131,970) 1,136,356 Total comprehensive loss for the year - - - - (6,269) - (6,269) Transactions with owners of the Company Share premium reduction\* - (820,000) - - 820,000 - - Distribution - - - - (700,000) - (700,000) Balance at 31 December 2023 70,495 367,244 18,766 103,003 2,549 (131,970) 430,087 \* Please refer to Note 15 for further details on movement in capital contribution and share premium. The accompanying notes form an integral part of the Financial Statements. 25 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company ### Cash Flow Statement for the financial year ended 31 December 2023 Note 31 December 2023 USD'000 31 December 2022 (restated) USD'000 Cash flows from operating activities (Loss)/profit for the financial year (6,269) 43,652 Adjustments for: Net interest (income)/expense (16,067) 13,397 Movement in impairment loss provision 16 (1,153) (3,789) Change in other assets (25) 9,907 Change in derivative assets held for qualifying hedging relationships (12,519) 193,140 FX and fair value movement on fixed rate debt securities in qualifying hedging relationships 118,536 (403,875) Change in derivative assets held for trading 17,690 (6,895) Change in loans and advances to GEC affiliates 2,265,864 132,418 Change in loans and advances from GEC affiliates 403,508 65 Change in other liabilities (1,024) (5,406) Change in accrued interest on debt securities in issue 1,514 (8,991) Change in derivative liabilities held for qualifying hedging relationships (22,351) - 2,747,704 (36,377) Interest received 79,130 42,023 Interest paid (97,936) (81,860) Derivative payments (34,731) (149,773) Net cash provided by operating activities 2,694,167 (225,987) Cash flows from financing activities Drawdown of cashpool borrowings/(lendings) (1,111,587) 225,987 Repayment of cashpool borrowings (404,994) - Distribution paid (700,000) - Debt securities matured (477,586) - Net cash flows from financing activities (2,694,167) 225,987 Net movement in cash and cash equivalents - - Cash and cash equivalents at 1 January 13 - - Cash and cash equivalents at 31 December 13 - - The accompanying notes form an integral part of the Financial Statements. 26 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements 1 Basis of preparation Reporting entity GE Capital UK Funding Unlimited Company is an Irish incorporated, public unlimited Company and is Irish tax resident. The address of the Company’s registered office is 86-88 Lower Leeson Street, Dublin 2, D02 A668, Ireland. The Financial Statements of the Company are as at and for the financial year ended 31 December 2023. The Company is primarily involved in obtaining finance in the capital markets to fund the operations of the wider GEC Group. The Company has established a GBP Commercial Paper ("CP") and a GBP Medium Term Note (“MTN”) Programme. This debt is listed on the London Stock Exchange. Statement of compliance The Financial Statements of the Company have been prepared in accordance with IFRS as adopted by the EU. The Financial Statements also comply with the requirements of the relevant Irish legislation including the Companies Act 2014. Basis of measurement The Financial Statements have been prepared on the historical cost basis except for the following: • derivative financial instruments are measured at fair value; • certain fixed rate debt securities issued in qualifying hedging relationships at amortised cost adjusted by the fair value of the hedged risk; and • de-designated fixed rate debt securities which were formerly in a qualifying hedging relationship are measured at adjusted amortised cost. Functional and presentation currency The Financial Statements is presented in USD which is the functional currency of the Company. Except as indicated, financial information presented in USD has been rounded to the nearest thousand. Use of estimates and judgements The preparation of Financial Statements requires the Directors to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the Financial Statements are allowances for credit losses and determining the fair value of financial instruments. These are described in Note 3. 27 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 1 Basis of preparation (continued) Going concern The future growth of the Company is dependent on the cash needs of the GE Aerospace after spin off. The Directors have assessed the loan receivable positions and have concluded that the balances remain recoverable. The GEC Group does not expect the need for new long-term debt issuances by the Company for the foreseeable future. The debt issued by the Company through its CP and MTN arrangements is guaranteed by GEC and GECIHL. Maturity dates of debt issued are provided in Note 20. The Directors have performed a going concern assessment for a period of 12 months from the date of approval of these financial statements, also considering events reasonably foreseeable beyond this horizon, which indicates that, taking account of the inflationary impacts in the economy and higher interest rates, and in light of the Company’s ability to access the group's cash pool facility if required, the Company will have sufficient funds to meet its liabilities as they fall due for that period. The Directors are confident that the Company will have sufficient funds to continue in operational existence for at least 12 months from the date of approval of these financial statements and they continue to adopt the going concern basis of accounting in preparing the annual financial statements. Accordingly, the Directors have also considered the below among other factors in concluding that it remains appropriate to prepare the Financial Statements on a going concern basis: • The Company has substantial positive equity and it is linked to the GE Aerospace's U.S. cash pool, therefore has the resources to continue in business. • GECIHL has guaranteed the Company’s liabilities under its CP and MTN programmes, substantially mitigating liquidity risk. • GEC has also guaranteed the Company’s liabilities under its CP and MTN programmes, substantially mitigating liquidity risk. 2 Material accounting policy information The Company adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) from 1 January 2023. The amendments require the disclosure of 'material' rather than 'significant' accounting policies. Although the amendments did not result in any changes to the accounting policies themselves. Management reviewed the accounting policies and made updates to the information disclosed in Note 2 Material accounting policies (2022: Significant accounting policies) in certain instances in line with the amendments. 28 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) Amendments to IAS 12 Income Taxes-International Tax Reform-Pillar Two Model Rules The Company has adopted the amendments to IAS 12 for the first time in the current year. The IASB amends the scope of IAS 12 to clarify that the Standard applies to income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by the OECD, including tax law that implements qualified domestic minimum top-up taxes described in those rules. The amendments introduce a temporary exception to the accounting requirements for deferred taxes in IAS 12, so that an entity would neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. Following the amendments, the Company is required to disclose that it has applied the exception and to disclose separately its current tax expense (income) related to Pillar Two income taxes. Please see Note 11 for further details. (a) New currently effective requirements The below table lists the recent changes to Accounting Standards that are required to be applied with the year beginning on 1 January 2023. The Directors have assessed the impact of the below and do not determine to have a material impact on the financial statements of the Company: Newly effective EU-endorsed standard for 01 Jan 2023 to 31 Dec 2023 New standards of amendments Effective date Disclosure of Accounting Policies (Amendments to IAS 1) 01 January 2023 Definition of Accounting Estimates (Amendments to IAS 8) 01 January 2023 Insurance Contracts (Amendments to IFRS 17) 01 January 2023 Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) 01 January 2023 Initial Application of IFRS 17 and IFRS 9 – Comparative Information (Amendments to IFRS 17) 01 January 2023 International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12) 23 May 2023 29 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) (b) Standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations have been issued and have not been applied in preparing these Financial Statements. The directors have reviewed the below and are not determined to have a material impact on the statements when they are effective. These are set out below: New standards of amendments Effective Date Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) 01 January 2024 Lease Liability in a Sale and Leaseback (Amendment to IFRS 16) 01 January 2024 Classification of Liabilities as Current or Non-current Date and Non-current Liabilities with Covenants (Amendments to IAS 1) 01 January 2024 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (Amendment to IAS 21) 01 January 2025 (c) Foreign currency transactions Transactions and balances Foreign currency transactions are translated into the functional currency using exchange rates applicable to the period in which the transaction occurred. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation at the period end of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income (SOCI). Non-monetary items denominated in foreign currencies are translated using the exchange rate on the date of the initial transaction and recorded at historical cost. The assets and liabilities of foreign currency are translated into USD at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into USD at the average monthly rate during the year. (d) Interest Interest income and expense are recognised in the Statement of Comprehensive Income using the effective interest method. The effective interest rate is the rate that discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the carrying amount of the financial asset or liability. When calculating the effective interest rate, the Company estimate future cash flows considering all contractual terms of the financial instrument but not future credit losses. The calculation of the effective interest rate includes all fees paid or received, transaction costs, and discounts or premiums that are an integral part of the effective interest rate. Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or liability. Interest income and expense presented in the Statement of Comprehensive Income include interest on financial assets and liabilities at amortised cost on an effective interest rate basis together with interest on financial assets and liabilities designated at fair value through SOCI. 30 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) (e) Commission Commission income and expenses represented in the Statement of Comprehensive Income include commitment fees on financial assets and liabilities. However, commission income and expenses that are integral to the effective interest rate on a financial asset or liability are included in the measurement of the effective interest rate. (f) Fees Fees comprise of transaction and service fees, which are expensed as the services are received. (g) Net gain/(loss) from financial instruments at fair value Net gain/(loss) from financial instruments at fair value relates to fair value movement on fixed debt securities issued in qualifying hedging relationships, also relates to fair value movement on derivatives related to interest rate swaps, gain/(loss) on foreign currency forwards and gain/(loss) on termination of interest rate swaps, for details see Note 2(i), Note 2(j) and Note 8. (h) Tax expense Tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in SOCI except to the extent that they relate to items recognised directly in equity or in other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax payable also includes any tax liability arising from the declaration of dividends. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for: • temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable SOCI; • temporary differences related to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future; and • temporary differences arising on the initial recognition of goodwill. 31 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) (h) Tax expense (continued) Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities against current tax assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. Additional taxes that arise from the distribution of dividends by the Company are recognised at the same time as the liability to pay the related dividend is recognised. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. (i) Financial assets and liabilities Recognition and initial measurement The Company initially recognise loans and advances, deposits, debt securities issued and subordinated liabilities on the date on which they are originated. All other financial instruments (including regular-way purchases and sales of financial assets) are recognised on the trade date, which is the date on which the Company becomes a party to the contractual provisions of the instrument. A financial asset or financial liability is measured initially at fair value plus, for an item not at fair value through profit and loss (“FVTPL”), transaction costs that are directly attributable to its acquisition or issue. The fair value of a financial instrument at initial recognition is generally its transaction price. Derecognition The Company derecognise a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that are created or retained by the Company is recognised as a separate asset or liability. The Company derecognise a financial liability when its contractual obligations are discharged or cancelled or expire. Classification and subsequent measurement of financial assets and financial liabilities A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: • It is held within a business model whose objective it is to both collect contractual cash flows and sell financial assets. • Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. 32 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) (i) Financial assets and liabilities (continued) A financial asset is measured at fair value through other comprehensive income (‘FVOCI’) if it meets both of the following conditions and is not designated as at FVTPL: • It is held within a business model whose objective it is to both collect contractual cash flows and sell financial assets. • Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The business model of the Company for loans and advances is to hold assets to collect contractual cashflows. As such, the Company’s loans and advances are typically measured at amortised cost. All other financial assets are typically classified as measured at FVTPL. The Company do not hold any assets measured at FVOCI. Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Other financial liabilities are measured at amortised cost using the effective interest method. Modification of financial assets and financial liabilities If the terms of a financial asset or liability are modified and the cash flows are substantially different, the original instrument is derecognised and a new instrument recognised. If the modification of a financial asset measured at amortised cost does not result in derecognition of the financial asset, then the Company first recalculates the gross carrying amount of the financial asset using the original effective interest rate of the asset and recognises the resulting adjustment as a modification gain or loss in SOCI. If the modification of a financial liability is not accounted for as derecognition, then the amortised cost of the liability is recalculated by discounting the modified cash flows at the original effective interest rate and the resulting gain or loss is recognised in SOCI. The difference between the carrying amount of the financial liability derecognised and the consideration paid is recognised in SOCI. 33 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) (i) Financial assets and liabilities (continued) Interest rate benchmark reform If the basis for determining the contractual cash flows of a financial asset or financial liability measured at amortised cost changes as a result of interest rate benchmark reform, then the Company updates the effective interest rate of the financial asset or financial liability to reflect the change that is required by the reform. A change in the basis for determining the contractual cash flows is required by interest rate benchmark reform if the following conditions are met: - the change is necessary as a direct consequence of the reform; and - the new basis for determining the contractual cash flows is economically equivalent to the previous basis - i.e. the basis immediately before the change. If changes are made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, then the Company first updates the effective interest rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Company applies the policies on accounting for modifications set out above to the additional changes. Offsetting Financial assets and liabilities are set off and the net amount presented in the Statement of Financial Position when, and only when, the Company has a legal right to set off the amounts and intend either to settle on a net basis or to realise the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted under IFRS. (j) Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When available, the Company measures the fair value of an instrument using quoted prices in an active market for that instrument. A market is regarded as active if quoted prices are readily and regularly available and represent actual occurring market transactions on an arm’s length basis. If a market for a financial instrument is not active, the Company establish fair value using valuation techniques. Valuation techniques include using recent arm’s length transactions between knowledgeable, willing parties (if available), reference to the current fair value of other instruments that are substantially the same, discounted cash flow analyses and option pricing models. The chosen valuation technique makes use of market inputs, relies as little as possible on estimates specific to the Company, incorporates factors that market participants would consider in setting a price, and is consistent with accepted economic methodologies for pricing financial instruments. 34 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) (j) Fair value measurement (continued) Inputs to valuation techniques reasonably represent market expectations and measures the risk return factors inherent in the financial instrument. The Company calibrate valuation techniques and test them for validity using prices from observable current market transactions in the same instrument or based on other available observable market data. The best evidence of the fair value of a financial instrument at initial recognition is the transaction price, i.e., the fair value of the consideration given or received, unless the fair value of that instrument is evidenced by comparison with other observable current market transactions in the same instrument (i.e., without modification or repackaging) or based on a valuation technique whose variables include only data from observable markets. When transaction price provides the best evidence of fair value at initial recognition, the financial instrument is initially measured at the transaction date and any difference between this price and the value initially obtained from a valuation model is subsequently recognised in the Statement of Comprehensive Income depending on the individual facts and circumstances of the transaction but not later than when the valuation is supported wholly by observable market data or the transaction is closed out. Assets and long positions are measured at a mid-price; liabilities and short positions are measured at an ask price. Where the Company have positions with offsetting risks, mid-market prices are used to measure the offsetting risk positions and a bid or ask price adjustment is applied only to the net open position as appropriate. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the Company entity and counterparty where appropriate. Fair value estimates obtained from models are adjusted for any other factors, such as liquidity risk or model uncertainties, to the extent that the Company believe a third-party market participant would take them into account in pricing a transaction. (k) Impairment Identification and measurement of impairment The Company uses the expected credit loss (‘ECL’) model to assess impairment on the financial assets measured at amortised cost. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of cashflows. Note 16 provides further detail of how expected credit losses are measured. For loans and advances to GEC affiliates measured at amortised cost, the Company recognises a loss allowance equal to the ECLs that result from possible default events within the 12 months after the reporting date if there is not a significant increase in credit risk. If the credit risk of a financial asset has increased significantly since initial recognition, the Company recognises lifetime ECLs. Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. When determining whether the credit risk of a financial asset has increased significantly since the initial recognition when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and expert credit assessment and including forward looking information. 35 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) (k) Impairment (continued) The Company considers a debt security to have a low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade’. The Company considers this to be BBB- or higher as per Standard and Poor’s (‘S&P’) rating scale. The indicators below are used to identify receivables which have experienced a significant increase in credit risk and should be individually reviewed for impairment. The triggers which would indicate a significant increase in credit risk are: • The receivable is highlighted by the business as a potential risk and requires further review. • The borrower has a significant increase in GE’s Obligor Rating, being defined as a drop of 4 notches in the original grade (outside of investment grade of BBB-). • Payments are 30 days overdue. Credit-impaired financial assets At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit-impaired. Loans and advances are considered to be credit-impaired when the Company determines that there is objective evidence of impairment and does not expect to collect all principal and interest due according to the contractual terms of the loan agreement(s). Evidence that a financial asset is credit-impaired include observable data about the following: • Significant financial difficulty of the borrower; • Default in the payment of interest or commitment fees which is not rectified within 5 business days of having received notice from the lender; • Default in the payment of other amount due under the terms of the loan agreement which is not rectified within 5 business days of having received notice from the lender; • The lender, for economic or contractual reasons relating to the borrower’s financial difficulty, has granted a concession that the lender would not otherwise consider; • It is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; • The borrower is highlighted by the business as a potential risk and requires further review; and • The borrower has a significant increase in GE’s Obligor Rating, being defined as a drop of 4 notches in the original grade (outside of investment grade of BBB-). Presentation of impairment Impairment losses on financial assets measured at amortised cost are deducted from the gross carrying amount of the assets and presented separately in the statement of comprehensive income. (l) Cash and cash equivalents Cash and cash equivalents include cash at bank and highly liquid financial assets with original maturities of less than three months, which are subject to insignificant risk of changes in their fair value, and are used by the Company in the management of their short-term commitments. Cash is carried at amortised cost in the Statement of Financial Position. 36 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) (m) Derivatives held for risk management purposes and hedge accounting The Company has elected to continue to apply the hedge accounting requirements of IAS 39 instead of the requirements of new hedge accounting requirements of IFRS 9. Derivatives held for risk management purposes include all derivative assets and liabilities that are not classified as trading assets or liabilities. All derivatives held for risk management purposes are measured at fair value in the Statement of Financial Position. The Company designate certain derivatives held for risk management as hedged instruments in qualifying hedging relationships. Hedges directly affected by interest rate benchmark reform When the basis for determining the contractual cash flows of the hedged item or hedging instrument changes as a result of IBOR reform and therefore there is no longer uncertainty arising about the cash flows of the hedged item or the hedging instrument, the Company amends the hedge documentation of that hedging relationship to reflect the change(s) required by IBOR reform. For this purpose, the hedge designation is amended only to make one or more of the following changes: - designating an alternative benchmark rate as the hedged risk; - updating the description of the hedged item, including the description of the designated portion of the cash flows or fair value being hedged; or - updating the description of the hedging instrument. The Company amends the description of the hedging instrument only if the following conditions are met: - it makes a change required by IBOR reform by using an approach other than changing the basis for determining the contractual cash flows of the hedging instrument; - the chosen approach is economically equivalent to changing the basis for determining the contractual cash flows of the original hedging instrument; and - the original hedging instrument is not derecognized. The Company amends the formal hedge documentation by the end of the reporting period during which a change required by IBOR reform is made to the hedged risk, hedged item or hedging instrument. These amendments in the formal hedge documentation do not constitute the discontinuation of the hedging relationship or the designation of a new hedging relationship. If changes are made in addition to those changes required by IBOR reform described above, then the Company first considers whether those additional changes result in the discontinuation of the hedge accounting relationship. If the additional changes do not result in the discontinuation of the hedge accounting relationship, then the Company amends the formal hedge documentation for changes required by IBOR reform as mentioned above. When the interest rate benchmark on which the hedged future cash flows had been based is changed as required by IBOR reform, for the purpose of determining whether the hedged future cash flows are expected to occur, the Company deems that the hedging reserve recognised in OCI for that hedging relationship is based on the alternative benchmark rate on which the hedged future cash flows will be based. 37 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) (m) Derivatives held for risk management purposes and hedge accounting (continued) Policy applicable for all hedging relationships On initial designation of the hedge, the Company formally documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objective and strategy in undertaking the hedge, together with the method that will be used to assess the effectiveness of the hedging relationship. The Company makes an assessment, both on inception of the hedging relationship and on an ongoing basis, of whether the hedging instrument(s) is (are) expected to be highly effective in offsetting the changes in the fair value or cash flows of the respective hedged item(s) during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125%. (i) Fair value hedges When a derivative is designated as the hedging instrument in a hedge of the change in fair value of a recognised asset or liability or a firm commitment that could affect SOCI, changes in the fair value of the derivative are recognised immediately in SOCI. The change in fair value of the hedged item attributable to the hedged risk is recognised in SOCI. If the hedged item would otherwise be measured at cost or amortised cost, then its carrying amount is adjusted accordingly. If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for fair value hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued. If a hedging relationship is de-designated the basis adjustment on the hedged item is then amortized, using the effective interest method, over the remaining life of the hedged item. Any adjustment up to the point of discontinuation to a hedged item for which the effective interest method is used is amortised to SOCI as an adjustment to the recalculated effective interest rate of the item over its remaining life. On hedge discontinuation, any hedging adjustment made previously to a hedged financial instrument for which the effective interest method is used is amortised to SOCI by adjusting the effective interest rate of the hedged item from the date on which amortisation begins. If the hedged item is derecognised, then the adjustment is recognised immediately in SOCI when the item is derecognised. (ii) Derivatives held for trading When a derivative is not designated in a qualifying hedge relationship including all foreign currency forwards, all changes in fair value are recognised immediately through SOCI. (n) Loans and advances Loans and advances captions in the Statement of Financial Position include loans and advances measured at amortised cost; they are initially measured at fair value plus incremental direct transaction costs; and subsequently at their amortised cost using the effective interest method. The interest rate on loans advanced to GEC affiliates is deemed to be an arms length rate. 38 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 2 Material accounting policy information (continued) (o) Debt securities issued Debt securities issued are the Company’s source of debt funding. The Company classify capital instruments as financial liabilities or equity instruments in accordance with the substance of the contractual terms of the instrument. Debt securities issued are initially measured at fair value plus directly attributable transaction costs, and subsequently measured at their amortised cost using the effective interest method, except where the Company choose to designate at inception the debt securities at fair value through SOCI. The Company carry certain debt securities at amortised cost adjusted for the fair value of the interest rate risk element, with fair value changes recognised immediately through profit or loss in the Statements of Comprehensive Income. (p) Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components, whose operating results are reviewed regularly by the Directors (being the chief operating decision maker) to make decisions about resources allocated to each segment and to assess its performance. 3 Use of estimates and judgements The Directors review the development, selection and disclosure of the Company's critical accounting policies and estimates, and the application of these policies and estimates. These disclosures supplement the commentary on financial risk management (see Note 16). A. Judgements Critical accounting judgements made in applying the Company's accounting policies include: (a) Allowances for impairment Note 2 (k) and Note 16 outline the following Criteria for establishing the criteria for determining whether credit risk on the financial asset has increased significantly since initial recognition, determining the methodology for incorporating forward-looking information into the measurement of ECL and selection and approval of models used to measure ECL as described in Note 16. 39 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 3 Use of estimates and judgements (continued) B. Sources of estimation uncertainty (a) Determining fair values of financial instruments where a quoted market price is unavailable As indicated in Note 17, all of the derivative instruments are measured at fair value on the respective Statement of Financial Position and it is usually possible to determine their fair values within a reasonable range of estimates. Fair value estimates are made at a specific point in time, based on market conditions and information about the financial instrument. These estimates are subjective in nature and involve market uncertainties and matters of judgement (including interest rates, volatility, estimated cash flows) and therefore, cannot be determined with precision. The Company has estimated the fair value of its loans and advances to GEC affiliates taking into account market risk and the changes in credit quality of its borrowers. (b) Valuation of financial assets and liabilities The Company measure fair values using the following hierarchy of methods: • Level 1 - Quoted market price in an active market for an identical instrument. • Level 2 - Valuation techniques based on observable inputs. This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data. • Level 3 - Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs could have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments. The valuation techniques and significant inputs used in determining the fair values for financial assets and liabilities classified as Level 1, Level 2 and Level 3 are as follows: Debt securities -are traded in active markets and are based on quoted market prices or dealer price quotations. For non-traded securities, the Company determine fair values using valuation techniques. Valuation techniques include net present value and discounted cash flow models, comparison to similar instruments for which market observable prices exist. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and other premia used in estimating discount rates, bond prices, foreign currency exchange rates, expected price volatilities and correlations. The objective of valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the reporting date that would have been determined by market participants acting at arm’s length. 40 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 3 Use of estimates and judgements (continued) Derivative assets and liabilities - the Company use widely recognised valuation models for determining the fair value of common and more simple financial instruments, such as interest rate swaps that use only observable market data and require little management judgement and estimation. Observable prices and model inputs are usually available in the market for listed debt securities of the ultimate parent, GEC, exchange traded derivatives and simple over the counter derivatives such as interest rate swaps. Availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with determination of fair values. Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions in the financial markets. Derivatives are shown gross on statement of financial position as they do not qualify for offset in accordance with IAS 32. In addition there are no master netting agreements in place. All derivatives are executed with Hedge Management Services, Inc. (HMS) and a CVA is calculated to reflect the credit risk of HMS. A DVA is calculated to reflect the credit risk of the Company with the bilateral adjustment recorded in the measurement of the derivatives in the Financial Statements. Loans and advances from GEC affiliates - The fair value of loans received is estimated from the present value of the cash flows, using current market rates for similar loans. Loans and advances to GEC affiliates - The fair value of issued loans is estimated from the present value of the cash flows, using current market rates for similar loans. There were no Level 3 assets or liabilities held at 31 December 2023 or 31 December 2022. Measured at Fair Value Measured at Amortised Cost Level 1 Level 2 Level 3 Total In million of USD 31 December 2023 Assets Loans and advances to GEC affiliates - - - 2,084 2,084 Derivative assets - held for qualifying hedging relationships - 22 - - 22 - 22 - 2,084 2,106 In million of USD Liabilities Loans and advances from GEC affiliates - - - (410) (410) Debt securities issued\* - - - (1,256) (1,256) Derivative liabilities held for qualifying hedging relationships - (9) - - (9) - (9) - (1,666) (1,675) 41 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 3 Use of estimates and judgements (continued) Measured at Fair Value Measured at Amortised Cost Level 1 Level 2 Level 3 Total In million of USD 31 December 2022 Assets Loans and advances to GEC affiliates - - - 3,211 3,211 Derivative assets not in qualifying hedging relationships - 18 - - 18 - 18 - 3,211 3,229 In million of USD 31 December 2022 Liabilities (restated) Loans and advances from GEC affiliates - - - (404) (404) Debt securities issued\* - - - (1,645) (1,645) Derivative liabilities held for qualifying hedging relationships - (43) - - (43) Other liabilities - - - (1) (1) - (43) - (2,050) (2,093) \* Measured at amortised cost as adjusted for the fair value of hedged risk under hedge accounting rules. Significant transfers between Level 2 and Level 3 of the fair value hierarchy At 31 December 2023, there were no transfers between Level 2 and Level 3 of the fair value hierarchy. At 31 December 2022, there were no transfers between Level 2 and Level 3 of the fair value hierarchy. Qualifying hedge relationships In designating financial instruments into qualifying hedge relationships, the Company have determined that it expects the hedge to be highly effective over the life of the hedging instrument. For disclosure of the impact of hedge ineffectiveness in the period, see Note 16. 42 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 4 Interest income Interest income is earned on loans made by the Company directly to other GEC affiliates. 2023 USD'000 2022 USD'000 Interest income on loan and advances to GEC affiliates 104,534 39,100 104,534 39,100 The increase in interest income is primarily driven by the average USD loan interest rate increase and the interest income generated from a higher average cashpool lending position during 2023 compared to 2022. 5 Interest expense The following table details the interest expense incurred by the Company during the year. 2023 USD ' 000 (restated) 2022 USD'000 Net interest expense for financial assets and liabilities: Debt securities issued; - in qualifying hedging relationships at adjusted amortised cost 74,548 58,863 - at amortised cost 13,308 20,591 Amortisation of fair value component of debt with associated terminated derivative assets and those no longer in a hedging relationship (24,797) (31,857) Interest expense on loans and advances from GEC affiliates 25,408 4,899 Bank charges - 1 88,467 52,497 Interest expense on loans and advances from GEC affiliates relates to borrowings from GEC and Cash Management Services Inc.("CMS"). Increase in the year is primarily driven by an increase in the interest rate during the year and the basis adjustment amortisation decrease during the year. 6 Fee and commission income 2023 USD'000 2022 USD'000 Commitment fee income from GEC affiliates 264 433 264 433 43 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 7 Service and commitment fee expense 2023 USD'000 2022 USD'000 Commitment fees 324 65 Service fee expense to GEC affiliates 1,731 1,067 2,055 1,132 The Company has a management service agreement and investment services agreement in place with GE Treasury Ireland Services UK (“T2K”), an affiliate Company, the management fee charge above relates to services provided by T2K. 8 Net gain/(loss) from financial instruments carried at fair value 2023 USD'000 2022 USD'000 Fair value movement on interest rate swaps - in qualifying hedging relationships 35,611 (44,608) Realised loss on early termination of interest rate swaps - (149,772) Fair value movement on fixed rate debt securities issued in qualifying hedging relationships (41,352) 197,640 Gain/(loss) on foreign currency forwards 9,737 (54,497) 3,996 (51,237) In the 2022 financial year, a number of derivatives in qualifying hedging relationships were early terminated and de-designated in qualifying hedging relationships. The effect of the transaction resulted in a realised loss on the terminated derivatives of USD 150 million, which had previously been recognised as an unrealised loss prior to the termination date. 9 Foreign exchange gain/(loss) 2023 USD'000 2022 USD'000 Foreign exchange gain/(loss) (25,694) 105,196 The foreign exchange loss in the current financial year is primarily due to the movement in GBP/USD exchange rate from 1.209 in 2022 to 1.275 in 2023 (movement in GBP/USD exchange rate from 1.353 in 2021 to 1.209 in 2022). 44 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 10 Profit before income tax 2023 USD'000 2022 USD'000 Profit before taxation has been arrived at after charging Director's remuneration \* 122 61 Auditor's remuneration Audit of these Company financial statements\*\* 39 39 Other assurance services\*\*\* 24 24 Tax advisory services - - Other non-audit services - - \* Includes short term benefits and post-employment benefits in respect of key management personnel. Directors' remuneration for the year ended 31 December 2023 was paid by an affiliated entity T2K, Directors remuneration has been included in the service fee charged from this company. A portion of annual Directors' remuneration attributable to Company was estimated at USD 122,002 for the year end 31 December 2023 (2022: USD 60,753). \*\* Auditor's remuneration paid to Deloitte Ireland LLP is $23,400 (2022: $23,400). Payments to other Deloitte member firms is $15,600 (2022: $15,600). \*\*\* Other assurance services cost relates to the interim review per the ISRE 2410 standard. 11 Income tax charge 2023 USD ' 000 2022 USD'000 Analysis of charge/(credit) in year Current tax: Total current tax - - Deferred tax: Total tax charge in the Income Statement - - Factors effecting tax charge/credit for the year The tax assessed for the year is different to that at the standard rate of corporation tax in Ireland (12.5%). The differences are explained below. 45 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 11 Income tax charge (continued) Reconciliation of effective rate 2023 USD'000 2022 USD'000 Loss/profit before taxation (6,269) 43,652 Profit multiplied by the standard rate of corporation tax in Republic of Ireland of 12.5% (2022:12.5%) (784) 5,456 Tax effect of: - - Non deductible income - (120) Losses carried forward/(utilized) 2,301 (8,704) Non-deductible expenditure (1,517) 3,368 Total tax charge/(credit) in SOCI - - The GE Group is within the scope of the global minimum top-up tax under the OECD Pillar Two model rules. Under the new legislation, the GE Group is liable to pay a top-up tax for the difference between the Pillar Two effective tax rate per jurisdiction and the 15% minimum rate. Specific adjustments envisaged in the Pillar Two legislation can give rise to different effective tax rates compared to those calculated for IFRS purposes. Since the newly enacted legislation in Ireland is only effective for the Group from 1 January 2024, there is no current tax impact for the year ended 31 December 2023. The Company has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12. Accordingly, the Company neither recognises nor discloses information about deferred tax assets and liabilities related to Pillar Two income taxes. The GE Group and the Company are continuing to assess the impact of the Pillar Two income taxes legislation on its future financial performance. 12 Correction of errors in basis adjustment amortisation During 2023, the Company discovered that the basis adjustment amortisation had been set up incorrectly when the Company transferred this process between systems in 2022. As a consequence, the debt interest expense and the fair value of debt securities were understated for the 2022 financial year. The error has been corrected by restating each of the affected financial statement line items for the prior period as follows: 46 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 12 Correction of errors in basis adjustment amortisation (continued) Statement of Comprehensive Income (extract) 2022 (previously reported) Profit increase/(decrease) 2022 (restated) USD'000 USD'000 USD'000 Interest expense (38,352) (14,145) (52,497) Profit before income tax 57,797 (14,145) 43,652 Profit for the year 57,797 (14,145) 43,652 Total comprehensive profit for the financial year 57,797 (14,145) 43,652 Statement of Financial Position (extract) 31 December 2022 (previously reported) Increase/(decrease) 31 December 2022 (restated) USD'000 USD'000 USD'000 Creditors: amounts falling due after more than one year Debt securities issued (1,099,285) (14,145) (1,113,430) Net assets 1,150,501 (14,145) 1,136,356 Accumulated losses (97,037) (14,145) (111,182) Shareholder's equity 1,150,501 (14,145) 1,136,356 Cash Flow Statement (extract) 31 December 2022 (previously reported) Increase/(decrease) 31 December 2022 (restated) USD'000 USD'000 USD'000 Profit of the financial year 57,797 (14,145) 43,652 Net interest (income)/expense (748) 14,145 13,397 Cash flows from operating activities 189,610 - 189,610 47 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 13 Cash and cash equivalents 2023 USD'000 2022 USD'000 - - There are no restricted cash balances at the financial year end (2022: USD Nil). There are no cash balances held at 31 December 2023 (2022: USD Nil). 14 Deferred tax asset A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be recovered. At 31 December 2023, a deferred tax asset of USD Nil arises (2022: USD Nil). The Directors have considered the assumptions underpinning the recognition of the asset and as a consequence of the 10 April 2015 GEC announcement, the need for new long-term debt issuance has reduced and the change in functional currency to USD with the foreign exchange exposure, the Company has recorded no deferred tax asset for the year ended 31 December 2023. The Company has an unrecognised deferred tax asset at the financial year end of USD 20.4 million (2022 (restated): USD 18.1 million) which relates to losses carried forward. These losses may be carried forward indefinitely against profits of the same trade. 15 Share capital, share premium and reserves Company 31 December 2023 USD'000 31 December 2022 USD'000 Authorised 100,000,000 Ordinary Shares of USD 1.2422 each 124,220 124,220 Allotted, called up and fully paid 56,750,000 Ordinary Shares of USD 1.2422 each 70,495 70,495 48 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 15 Share capital, share premium and reserves (continued) Share capital USD'000 Share premium USD'000 Undenominated Capital Reserves USD'000 Foreign exchange reserve USD'000 Capital contribution USD'000 Total USD'000 Opening at 1 January 2022 70,495 1,187,244 18,766 (131,970) 132,946 1,277,481 Capital contribution \* - - - - (29,943) (29,943) Balance at 31 December 2022 70,495 1,187,244 18,766 (131,970) 103,003 1,247,538 Opening at 1 January 2023 70,495 1,187,244 18,766 (131,970) 103,003 1,247,538 Share Premium Reduction - (820,000) - - - (820,000) Balance at 31 December 2023 70,495 367,244 18,766 (131,970) 103,003 427,538 \*In prior years, the Company had advanced loans to other group companies at an interest rate that was not considered to correspond to market rates. The excess of interest over market rates was therefore treated as a capital contribution on initial recognition of these loans. It was agreed that the interest rates charged by the Company did correspond to market rates so no further capital contribution was recognised during 2022. The reduction in the capital contribution for the 2022 year relates to the reversal of the capital contribution recorded in the 2021 year end financial statements for difference between cost plus and market rate from 1 January 2022 to maturity dates of the loans advanced to group companies. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. The ordinary shares rank pari passu in all respects. On 5 December 2023, the Company passed a written resolution to reduce the share premium account of the Company by an amount of USD 820,000,000 in connection with an internal reorganization, and made a cash distribution of USD 700,000,000 to the Company's parent GE Ireland USD Holdings Unlimited Company on 7 December 2023. The Company does not have any externally imposed capital requirements. The opening undenominated capital reserve arises due to the redenomination of issued share capital from GBP to USD on 16 December 2016. The opening foreign exchange reserve arose due to the retranslation of share capital, share premium and other reserves at the historic rates prevailing at the dates of transactions following the change in functional currency of the Company from GBP to USD on 3 December 2015. 49 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management Introduction and overview The Company has exposure to the following risks from the use of financial instruments: (a) credit risk (b) liquidity risk (c) market risk (d) other price risk This note presents information about the Company's exposure to each of the above risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's management of capital. Risk management framework The Directors have overall responsibility for the establishment and oversight of the Company's risk management framework in line with the overall GEC risk management framework. The Board of Directors has eight members as at 31 December 2023. The Company’s risk management policies are based on policies of the Company’s ultimate parent, GEC, and are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions, products and services offered. The Directors are responsible for monitoring compliance with the Company’s risk management policies and procedures, and for reviewing the adequacy of the risk management framework in relation to the risks faced by the Company. The Directors are assisted in these functions by GEC Corporate Audit Staff and Internal Audit. (a) Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's loans and advances to GEC affiliates. For risk management reporting purposes the Company considers and consolidates all elements of credit risk exposure (such as individual obligor risk, default risk and country risk). The Directors monitor performance of borrowers and continually assess recoverability of loans (see points below). The Directors set the credit policy to minimise the risk to earnings and capital. All loans and advances made by the Company are with GEC affiliates. All loans are uncollateralized. Management of credit risk The Directors are responsible for the oversight of the Company's credit risk in line with the overall GEC risk framework, including: • Following GEC credit policies covering credit assessment, risk grading and reporting, documentary and legal procedures, and compliance with regulatory and statutory requirements; 50 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (a) Credit risk (continued) • Establishing the authorization structure for the approval and renewal of credit facilities; • Reviewing and assessing credit risk. The Directors assess all credit exposures prior to facilities being committed, and these facilities are subject to periodic review based on the overall risk associated as determined by Management. A comprehensive due diligence is carried out on each borrower annually as part of the repricing process. At 31 December 2023, the total carrying amount at amortised cost of lending exposed to credit risk in the Company amounted to USD 2,084 million (2022: USD 3,211 million). As at 31 December 2023, the loans and advances to Cash Management Services Inc.(CMS) was 94% (2022: 29%) of the total loan portfolio for the Company. As at 31 December 2023, the loans and advances to GE Financial Funding Unlimited Company (“GEFF”) was 0% (2022: 69%) of the total loan portfolio for the Company. The Directors monitor the performance of GEC affiliates to assess the recoverability of the loans in line with the overall GEC risk framework. As at 31 December 2023, the Directors consider none of the loans and advances to GEC affiliates to be either past due or individually impaired. Impairment loss provisions are discussed further in this note. Cash and cash equivalents are held in cashpools with financial institutions rated A- to BBB+ (2022: A- to BBB) by Standard and Poor’s at the year end. Loans with renegotiated terms Loans with renegotiated terms are loans that have been restructured due to the deterioration of the borrower’s financial position. No loans were renegotiated during the financial year ended 31 December 2023 (2022: USD Nil). Allowances for impairment The Company establishes an allowance for impairment losses on assets carried at amortised costs based on the three-stage ECL model as described in Note 2. It is considered that all loans and advances are Stage 1, as all loans are to GEC affiliates and interest and principal are paid in a timely manner as per the terms of the loan agreements. No history of default or non repayment in respect of the borrowers. Additionally, the Company has determined that the credit risk on financial assets has not significantly increased since initial application. 51 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (a) Credit risk (continued) Measuring ECL - explanation of inputs, assumptions and estimation techniques: ECLs are the discounted product of Probability of Default (“PD”) and Exposure at Default (“EAD”) and Loss Given Default (“LGD”). These inputs are defined below. The PD represents the likelihood of a borrower defaulting on its financial obligation either in the next 12 months or the remaining lifetime of the obligation. The PD for the Company is considered low as all loans are to Group undertakings. S&P’s Credit Model is used to assign a rating to internal GEC entities. This model produces outputs on the S&P rating scale. Reviewing S&P’s model documents confirms that the Credit Model rating output maps directly to the S&P scale. Since the S&P rating is the industry reference, this is also used to set the GE Obligor Rating scale which was directly mapped to the S&P scale, which in turn assigns a PD. EAD is based on the amounts the Company expects to be owed at the time of default. For revolving credit agreements (‘RCAs’), the Company includes the current drawn balance plus any further amount that is expected to be drawn up to the current contractual limit by the time of default, should it occur. The discount rate used in the ECL calculation is determined to be the original effective interest rate on the loan (market rate of interest). LGD is assumed to be 60%. For GEC intercompany loans, given the fact that all these loans are senior unsecured, an external benchmark is leveraged for the LGD assumption. According to Moody’s Corporate Default and Recovery dataset, the LGD of 60% is estimated based on the summary statistics from US Corporate Senior Unsecured Bonds population. The discount rate used in the ECL calculation is determined to be the original effective interest rate on the loan (market rate of interest). GE has replaced its PD Term Structure Model from the Moody’s Expected Default Frequency (‘EDF’) model to FHR-TPM model which uses historical RapidRatings Financial Health Rating (FHR) scores since 2022. The model forecasts quarterly cumulative PDs for a horizon of up to 30 years over a range of FHR scores. The PD forecasts over the first 3 years are based on economic conditions provided by end-users, and thereafter a through-the-cycle (TTC) mean condition is assumed over the remaining forecasting horizon. RapidRatings is a quantitative rating system that produces the Financial Health Rating (FHR), a score ranging from 0 (highest risk) to 100 (lowest risk). FHR measures a firm’s overall ability to remain competitive against its industry peers and exhibits certain discriminating power between low-risk survivors and high-risk defaulters over a future 12-month period. A specifically designed macro scenario with exact response from each industry to this scenario may generate false precision in the portfolio PD projection, especially when a long period macro forecast is used. The model will become less accurate if the historical relationship between FRI and macro variables breaks in the future. Given these considerations, a simplified fixed-state output provides more intuitive solutions. The fixed-state scenario generates PDTS based on a specified series of discrete state input rather than the continuum of the exact state implied by any macro forecasts. 52 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (a) Credit risk (continued) The following tables provides information about exposure to credit risk and ECLs for the Company as at 31 December 2023, All loans are considered low-risk. The impairment allowance includes the ECL on loan commitments. 31 December 2023 S&P rating Gross carrying amount\* Impairment allowance Credit impaired? USD’000 USD’000 Loans and advances to GEC affiliates BBB+ 2,935,953 (3,845) No 31 December 2022 S&P rating Gross carrying amount\* Impairment allowance Credit impaired? USD’000 USD’000 Loans and advances to GEC affiliates BBB+ 3,997,705 (4,998) No Impairment allowance 31 December 2022 31 December 2023 Movement USD’000 USD’000 USD’000 Loans and advances to GEC affiliates (4,998) (3,845) 1,153 Impairment allowance 31 December 2021 31 December 2022 Movement USD’000 USD’000 USD’000 Loans and advances to GEC affiliates (8,787) (4,998) 3,789 \* The gross carrying amount in the above table includes USD 1,800 million (2022: USD 786 million to GEFF) of commitments made to GEC for future loan financing. The decrease in loss allowance is mainly attributable to the reduction in the principal of loans and advances to GEC affiliates and to the loan and advances to GEC affiliates moving closer to maturity at 31 December 2023. As a result, USD 1.2 million impairment allowance is released in profit and loss. PD rates are consistent with the prior year (average PD rate is 0.24% as at 31 December 2023 and 0.26% as at 31 December 2022). Write-off policy The Company write off loans and advances when they are determined to be uncollectable. All amounts owed by group undertakings were made to GEC Group companies and payments were received as they fell due. There were no write-offs during the financial year ended 31 December 2023 (2022: USD Nil). 53 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (a) Credit risk (continued) Fair value adjustment for credit risk The Company assesses the valuation adjustments required for credit risks associated with derivatives measured at fair value as at 31 December 2023. All derivatives are executed with an affiliated Company HMS and a credit valuation adjustment (“CVA”) is calculated to reflect the credit risk of HMS. A debit valuation adjustment (“DVA”) is calculated to reflect the credit risk of the Company with the bilateral adjustment recorded in the measurement of the derivative in the Financial Statements. As at 31 December 2023, the bilateral adjustment for the Company amounted to USD 1.4 million (2022: USD 0.5 million) which has been recorded as debit to “Net loss from financial instruments carried at fair value” in the Statement of Comprehensive Income. (b) Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations from its financial liabilities. Management of liquidity risk The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. As a result of the GE Capital restructuring it is anticipated that there will be no requirement for the Company to issue new long term debt for the foreseeable future with the expectation that the current MTN portfolio remains until maturity. The CP programme continues presently albeit no CP is in issue at year end. The Company has access to the cash pool should it be required. GECIHL has guaranteed that it will meet the liabilities of the CP and MTN programmes should the Company be unable to meet these liabilities. GEC, has also guaranteed the CP and MTN programmes of the Company thus reducing further the risk to any potential investor and supporting the CP and MTN programmes. As part of the Company’s processes, management monitor the ratings of GECIHL and the GEC affiliates with which the Company trades. 54 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (b) Liquidity risk (continued) GEC receives information from other business units regarding the liquidity profile of their financial assets and financial liabilities and details of other projected cash flows arising from projected future business. The repayment terms of debt securities issued are outlined in Note 20. GEC maintains a portfolio of short-term liquid assets, largely made up of short-term liquid investment securities, loans and advances to banks and other inter-bank facilities, to ensure that sufficient liquidity is maintained within the Company. The Company also has access to short term liquidity through their access to the GE Cashpool operated by CMS. The Directors with the assistance of GEC monitor the ongoing liquidity requirements of the Company in detail, and by way of short-term loans from GEC cover any short term fluctuations and obtain longer term funding to address any structural liquidity requirements. The overall group daily liquidity position is monitored by GEC. At 31 December 2023, the Company held derivative assets for qualifying hedging relationships purposes of USD 22 million (2022: USD Nil) and derivative assets not in qualifying hedging relationships purposes of USD Nil (2022: USD 18 million). The Company held derivative liabilities for qualifying hedging relationships purposes of USD 9 million (2022: USD 43 million) and derivative liabilities not in qualifying hedging relationships purposes of USD Nil (2022: USD Nil). All derivatives were placed with another GEC affiliate whose external derivative liabilities are backed by GEC’s BBB+ (2022: BBB+) credit rating. The derivative assets and liabilities have been split between qualifying hedging relationships and not in qualifying hedging relationships, disclosing separately those derivatives that qualify as hedge under IAS 39 from those that do not. Residual contractual maturities of financial assets Note Carrying amount Current amount Non-current amount In millions of USD 31 December 2023 Non-derivative financial assets Loans and advances to GEC affiliates 19 2,084 1,087 997 Cash and cash equivalents 12 - - - 2,084 1,087 997 Derivative assets Inflow - held for qualifying hedging relationships 18 22 - 22 Outflow - held for qualifying hedging relationships 18 - - - 22 - 22 2,106 1,087 1,019 55 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (b) Liquidity risk (continued) Residual contractual maturities of financial assets Note Carrying amount Current amount Non-current amount In million of $ 31 December 2022 Non-derivative financial assets Loans and advances to GEC affiliates 19 3,211 2,245 966 Cash and cash equivalents 12 - - - 3,211 2,245 966 Derivative assets Inflow - held for trading 18 450 450 - Outflow - held for trading 18 (432) (432) - 18 18 - 3,229 2,263 966 The above tables show the undiscounted cash flows on the Company’s financial assets on the basis of their contractual maturity. Non-current loans to GEC affiliates represent revolving credit agreements that have a maturity greater than one year where the lender does not have the ability to demand repayment of the loans. 56 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (b) Liquidity risk (continued) Residual contractual maturities of financial liabilities Note Carrying amount Gross nominal inflow/(outflow) Less than 1 month1-3 months 3 months to 1 year 1-5 years More than 5 years In millions of USD 31 December 2023 Non derivative liabilities Loans and advances from GEC affiliates 19 410 (410) (410) - - - - Debt securities issued 20 1,256 (1,678) (57) - (61) (244) (1,316) Other liabilities - - - - - - - 1,666 (2,088) (467) - (61) (244) (1,316) Derivative liabilities Inflow - held for qualifying hedging relationships 18 (1,240) 1,240 - - - - 1,240 Outflow - held for qualifying hedging relationships 18 1,249 (1,249) - - - - (1,249) 9 (9) - - - - (9) Undrawn loan commitments - (1,800) - - (1,800) - - 1,675 (3,897) (467) - (1,861) (244) (1,325) At 31 December 2023, loans and advances from GEC affiliates represent outstanding principal and interest balances on cashpool borrowings with a GEC affiliate. 57 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (b) Liquidity risk (continued) Re sidual contractual maturities of financial liabilities Note Carrying amount Gross nominal inflow/(outflow) Less than 1 month 1-3 months 3 months to 1 year 1-5 years More than 5 years In millions of USD 31 December 2022(restated) Non derivative liabilities Loans and advances from GEC affiliates 19 404 (404) (404) - - - - Debt securities issued 20 1,645 (2,133) (61) - (534) (232) (1,306) Other liabilities 1 (1) - - (1) - - 2,050 (2,538) (465) - (535) (232) (1,306) Derivative liabilities Inflows – held for qualifying hedging relationships 18 (1,152) 1,152 - - - - 1,152 Outflows – held for qualifying hedging relationships 18 1,195 (1,195) - - - - (1,195) 43 (43) - - - - (43) Undrawn loan commitments - (786) - - - (786) - 2,093 (3,367) (465) - (535) (1,018) (1,349) At 31 December 2022, loans and advances from GEC affiliates represent outstanding principal and interest balances on cashpool borrowings with a GEC affiliate. 58 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (b) Liquidity risk (continued) Residual contractual maturities of financial liabilities The previous table shows the undiscounted cash flows on the Company's financial liabilities and unrecognised loan commitments on the basis of their earliest possible contractual maturity. The Company's expected cash flows on these instruments may vary significantly from this analysis. The gross nominal inflow / (outflow) disclosed in the previous table is the contractual, undiscounted cash flow on the financial liability or commitment. The disclosure for derivatives shows a net amount for derivatives that are net settled, and a gross inflow and outflow amount for derivatives that have simultaneous gross settlement. To manage the liquidity risk arising from financial liabilities, the Company holds liquid assets comprising cash and cash equivalents held in cashpools. Hence, the Company believes that it is not necessary to disclose a maturity analysis in respect of these assets to enable users to evaluate the nature and extent of liquidity risk. The cash balances pool with another GEC affiliate nightly, is payable on demand and is recorded under loans and advances from GEC affiliates and/or loans and advances to GEC affiliates depending on whether the cash has been borrowed from or lent to the cash pool. (c) Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rate, equity prices and credit spreads (not relating to changes in the obligor’s / issuer’s credit standing) will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. Exposure to foreign currency risk The principal market risk faced by the Company relates to currency risk as almost all borrowing and lending is in GBP while the functional currency is USD. The following table sets out the Company's non-USD monetary assets and liabilities at 31 December 2023 and the net exposure in original currency and USD of those monetary assets and liabilities. 59 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (c) Market risk (continued) 31 December 2023 Original Currency Amounts Currency Monetary Assets Monetary Liabilities Swaps/FX forwards Net Exposure Rates Net Exposure '000 '000 '000 '000 USD'000 GBP 794,828 (986,598) 10,518 (181,252) 1.275 (231,042) 31 December 2022 (restated) Original Currency Amounts Currency Monetary Assets Monetary Liabilities Swaps/FX forwards Net Exposure Rates Net Exposure '000 '000 '000 '000 USD'000 GBP 782,524 (1,390,774) 424,354 (183,896) 1.209 (222,330) The Company reduces currency exposure through the use of foreign currency forwards. A 1% appreciation/depreciation in the GBP/USD exchange rate as at 31 December 2023 would give rise to approximately a USD 2 million loss/profit based on the net exposure at 31 December 2023 (2022: USD 2 million). Interest rate benchmark reform (i) Overview A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as "IBOR reform"). In 2021, the Company undertook amendments to most financial instruments with contractual terms indexed to IBORs such that they incorporate new benchmark rates. As at 31 December 2023, the Company remaining unreformed IBOR exposure is indexed to US dollar LIBOR. The alternative reference rate for US dollar LIBOR is the Secured Overnight Financing Rate (SOFR). The Company finished the process of implementing appropriate fallback clauses for all US dollar LIBOR indexed exposures in 2022. These clauses automatically switch the instrument from USD LIBOR to SOFR as and when USD LIBOR ceases. As announced by the Financial Conduct Authority (FCA) in early 2022, the panel bank submissions for the overnight and 12-month US Dollar LIBOR ceased on 31 June 2023. In addition, the FCA announced in early 2023 that the one-, three- and six-month synthetic US dollar LIBOR settings will cease on 30 September 2024. 60 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) At 31 December 2023, the Company held the following instruments to hedge exposures to change in interest rates. 31 December 2023 Carrying Amount Non Interest bearing Less than 3 month 3-6 month 6-12 month 1-5 years More than 5 years Derivative assets held for qualifying hedging purposes 22 - - - - - 22 Derivative assets not qualifying hedging purposes - - - - - - - Loans and advances to GEC affiliates 2,084 38 952 20 77 997 - 2,106 38 952 20 77 997 22 Derivative liabilities held for qualifying hedging purposes (9) - - - - - (9) Loans and advances from GEC affiliates (410) (5) (405) - - - - Debt securities issued (1,256) (57) - - - - (1,199) Other liabilities - - - - - - (1,675) (62) (405) - - - (1,208) Effect of derivatives held for risk management (notional) - - (997) - - 997 Average fixed interest rate - - - - - - 6.71% Sensitivity gap - - (450) 20 77 997 (189) 61 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) At 31 December 2022, the Company held the following instruments to hedge exposures to change in interest rates. 31 December 2022 (restated) Carrying Amount Non Interest bearing Less than 3 month 3-6 month 6-12 month 1-5 years More than 5 years Derivative assets held for qualifying hedging purposes - - - - - - - Derivative assets not qualifying hedging purposes 18 18 - - - - - Loans and advances to GEC affiliates 3,211 17 - 20 2,208 966 - 3,229 35 - 20 2,208 966 - Derivative liabilities held for qualifying hedging purposes (43) - - - - - (43) Loans and advances from GEC affiliates (404) - (404) - - - - Debt securities issued (1,645) (61) - (64) (406) - (1,114) Other liabilities (1) (1) - - - - - (2,093) (62) (404) (64) (406) - (1,157) Effect of derivatives held for risk management (notional) - - (946) - - - 946 Average fixed interest rate - - - 5.1% 4.1% 6.5% Sensitivity gap - - (1,350) (44) 1,802 966 (211) 62 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (c) Market risk (continued) The amounts relating to items designated as hedging instruments against debt securities and hedge ineffectiveness were as follows: In millions of USD 31 December 2023 Carrying amount Nominal amount Assets Liabilities Line item in the statement of financial position where the hedging instrument is included Changes in the value of the hedging instrument recognised in SOCI Hedge ineffectiveness recognised in SOCI Line item in SOCI that includes hedging ineffectiveness Interest rate swaps held for qualifying hedging relationships 997 22 (9) Non-Current Assets: Derivative assets held for qualifying hedging relationships; Current Assets: Derivative assets held for qualifying hedging relationships 36 (4) Net expense from financial instruments carried at fair value 31 December 2022 Interest rate swaps held for qualifying hedging relationships 946 - (43) Non-Current Assets: Derivative assets held for qualifying hedging relationships; Current Assets: Derivative assets held for qualifying hedging relationships (45) 153 Net expense from financial instruments carried at fair value 63 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 16 Financial risk management (continued) Risk management framework (continued) (d) Other price risk Other price risk is the risk that the fair value of the financial instruments will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual instrument, its issuer or factors affecting all instruments traded in the market. One GEC affiliate, GEFF, accounted for 46% (2022: 96%) of the Company revenue and another GEC affiliate, CMS, accounted for 51% (2022: 0%) of Company revenue. In addition to the above, the Company entered into lending commitments of USD 1,800 million (31 December 2022: USD 786 million) with 100% owned GEC affiliates. The Directors consider the impact of other price risk to be low. The process for monitoring and measuring this risk is unchanged from the prior year. 64 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 17 Accounting classifications and fair values The table below sets out the carrying amounts and fair values of the financial assets and liabilities. Fair value through SOCI Amortised Cost In millions of USD 31 December 2023 Held for qualifying hedging relationships Derivatives not in qualifying hedging relationships Amortised cost Qualifying hedging relationships at amortised cost Total Carrying Amount Fair Value \* Derivative assets held for qualifying hedging relationships 22 - - - 22 22 Derivative assets not in qualifying hedging relationships - - - - - - Loans and advances to GEC affiliates - - 2,084 - 2,084 2,046 Other assets - - - - - - 22 - 2,084 - 2,106 2,068 Derivative liabilities held for qualifying hedging relationships (9) - - - (9) (9) Loans and advances from GEC affiliates - - (410) - (410) (410) Debt securities issued - - - (1,256) (1,256) (1,147) Other liabilities - - - - - - (9) - (410) (1,256) (1,675) (1,566) 65 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 17 Accounting classifications and fair values (continued) Fair value through SOCI Amortised Cost In millions of USD 31 December 2022 (restated) Held for qualifying hedging relationships Derivatives not in qualifying hedging relationships Amortised cost Qualifying hedging relationships at amortised cost Total Carrying Amount Fair Value \* Derivative assets not in qualifying hedging relationships - 18 - - 18 18 Loans and advances to GEC affiliates - - 3,211 - 3,211 3,144 - 18 3,211 - 3,229 3,162 Derivative liabilities held for qualifying hedging relationships (43) - - - (43) (43) Loans and advances from GEC affiliates - - (404) - (404) (404) Debt securities issued - - (477) (1,168) (1,645) (1,494) Other liabilities - - (1) - (1) (1) (43) - (882) (1,168) (2,093) (1,942) \*All “Loans and advances to affiliates” are with GEC affiliates and planned to be held to maturity and are Level 2 inputs. Market risks are key assumptions in the estimation of the fair value of “loans and advances to GEC affiliates”. Derivative assets and liabilities are valued using internal models. These models maximise the use of market observable inputs including market observable swap rates and spread indicators obtained from three leading market makers. 66 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 18 Financial assets and liabilities Fair value hedging relationships At 31 December 2023,certain MTN's shown within debt securities issued are in interest rate hedging relationships valued at USD 997 million (31 December 2022: USD 946 million). These are nominal valued with respect to the hedged interest risk. Derivatives held for risk management and trading At December 2023, certain derivatives are entered into for risk management purposes however those that qualify under IAS 39 for hedge accounting are disclosed separately from those that are not. All the derivatives are with a GEC affiliate, HMS. 31 December 2023 USD'000 31 December 2022 USD'000 Derivative assets Instrument type: Interest rate swaps held for qualifying hedging relationships 21,611 - Foreign currency forwards held for trading - 17,690 Derivative liabilities Instrument type: Interest rate swaps held for qualifying hedging relationships (9,092) (43,284) Foreign currency forwards held for trading - - 12,519 (25,594) Fair value hedges of interest rate risk The Company used interest rate swaps to hedge its exposure to changes in the fair value of its fixed rate GBP MTN’s. Interest rate swaps were matched to specific issuances of fixed rate notes. At 31 December 2023, the fair value of derivative assets designated as fair value hedges is USD 22 million (31 December 2022: USD Nil) and the fair value of derivative liabilities designated as fair value hedges is USD 9 million (31 December 2022: USD 43 million). Other derivatives held for qualifying trading The Company uses other derivatives, not designated in a qualifying hedge relationship, to manage the exposure to foreign exchange risk. The instruments used are foreign currency forwards. All foreign currency forwards matured during the year. The notional amounts of all interest rate swaps outstanding at 31 December 2023 were USD 997 million (31 December 2022: USD 946 million). The notional amount of all foreign currency forwards outstanding at 31 December 2023 were USD Nil (31 December 2022: USD 463 million). 67 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 19 Loans and advances Loans and advances to GEC affiliates 31 December 2023 USD'000 31 December 2022 USD'000 Amounts falling due within one year 1,086,277 2,245,409 Amounts falling after one year 997,483 966,071 2,083,760 3,211,480 Please see Note 16 for details of impairment loss provision recognised in relation to loans and advances to GEC affiliates. All loans are entered into with other GEC affiliates. Loans and advances from GEC affiliates 31 December 2023 USD'000 31 December 2022 USD'000 Amounts falling due within one year 409,863 404,301 409,863 404,301 Schedule 3.58 of the Companies Act 2014 requires the disclosure of the aggregate amount of any debt outstanding at year end. The outstanding debt of the Company at 31 December 2023 and 31 December 2022 is as follows: 31 December 2023 Currency Amount (‘000) USD Equivalent (‘000) Interest Rate Repayment Terms GBP 990 1,263 5.2680% On demand EUR 1 1 4.4540% On demand USD 408,599 408,599 3M SOFR +0.3600% Revolving Credit Agreement 409,863 31 December 2022 Currency Amount (‘000) USD Equivalent (‘000) Interest Rate Repayment Terms GBP 30,802 37,240 1.5680% On demand USD 366,996 366,996 1.9577% On demand USD 65 65 0.3600% Revolving Credit Agreement 404,301 68 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 20 Debt securities issued 31 December 2023 USD'000 31 December 2022 (restated) USD'000 Fixed rate debt securities in qualifying hedging relationship 1,256,354 1,167,540 Fixed rate debt securities held at amortised cost (no longer in qualifying hedging relationships) - 476,665 1,256,354 1,644,205 At 31 December 2023, USD 997 million (2022: USD 946 million) of nominal debt securities issued are expected to be settled more than twelve months after the reporting date and Nil (2022: 463 million) are expected to settle within twelve months of the reporting date. The carrying amount of financial liabilities designated at amortised cost in qualifying hedging relationships at 31 December 2023 was USD 218 million higher than the contractual amount at maturity (2022 (restated): USD 184 million). Schedule 3.56 of the Companies Act 2014 requires the disclosure of the aggregate amount of any debt outstanding at year end. The outstanding debt of the Company at 31 December 2023 is as follows: Fixed rate debt securities in qualifying hedging relationship Currency Amount (‘000) USD Equivalent (‘000) Interest Rate Repayment Terms GBP 813,576 1,037,065 5.8750% 18 January 2033 GBP 72,322 92,189 6.2500% 5 May 2038 GBP 99,710 127,100 8.0000% 14 January 2039 Total USD 1,256,354 The outstanding debt of the Company at 31 December 2022 is as follows: Fixed rate debt securities in qualifying hedging relationship Currency Amount (‘000) USD Equivalent (‘000) Interest Rate Repayment Terms GBP 786,137 964,584 5.8750% January 18, 2033 GBP 71,165 86,039 6.2500% May 05, 2038 GBP 96,706 116,917 8.0000% January 14, 2039 Total USD 1,167,540 69 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 20 Debt securities issued (continued) Debt securities at amortised cost (no longer in qualifying hedging relationships) Currency Amount (‘000) USD Equivalent (‘000) Interest Rate \* Repayment Terms GBP 54,677 66,104 5.1250% May 24, 2023 GBP 339,587 410,561 4.1250% September 13, 2023 Total USD 476,665 The Company had undrawn loan commitments, all to other GEC affiliates of USD 1,800 million at 31 December 2023 (2022: USD 786 million). An undrawn commitment is the amount of any given credit facility that has not been drawn by the borrower. The longest of these commitments is the commitment with GEC that has the potential to extend to 2024. The table below analyses nominal movements in medium term notes: 2023 2022 Medium Term Medium Term Notes Notes USD’000 USD’000 Opening balance 1,409,089 1,576,805 Issued - - Maturities (477,586) - Foreign exchange (gain)/loss 65,978 (167,716) Closing balance 997,481 1,409,089 The Company has not had any defaults of principal, interest or other breaches with respect to its debt securities during 2023 or 2022. Foreign exchange arises due to large gross movements in balances, maturities and issuances have been translated at the rates of exchange prevailing at the dates of transaction and opening and closing balances have been translated at the closing rates of exchange as at 31 December 2023 and 31 December 2022. 70 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 21 Changes in liabilities from financing activities 1 January 2023 Cash Flows Non-cash Changes 31 December 2023 FX Movements Fair Value Changes Accrued interest and fee In millions of USD 31 December 2023 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 Debt securities issued 1,644,205 (477,586) 65,978 27,008 (3,251) 1,256,354 1 January 2022 Cash Flows Non-cash Changes 31 December 2022 FX Movements Fair Value Changes Accrued interest and fee In millions of USD 31 December 2022 (restated) USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 Debt securities issued 2,086,968 - (167,716) (271,875) (3,172) 1,644,205 71 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 22 Related party disclosures (a) Transactions with subsidiary undertakings and other affiliate GEC Group companies The Company enters into banking transactions with the Partnership and other GEC affiliates in the normal course of business. These include loans and derivative instruments. In addition, the Company enter into transactions with GEC and derivative transactions with HMS. Transactions and balances between the Company and other Group affiliates are detailed in relevant notes. From 3 December 2015, the guarantee for the CP and MTN programmes is now provided by GECIHL and GEC. No fee has been payable from this date for this guarantee. The below table provides the Company's SOCI transactions with related parties including it's immediate parent, GE Ireland USD Holdings Unlimited Company. Related Party 2023 2022 USD’000 USD’000 Service fee expense GE Treasury Ireland Services Unlimited Company (1,731) (1,066) Interest income and expense on loan and advances with GEC affiliates GE Financial Funding Unlimited Company 51,984 38,136 Cash Management Services Inc. 39,522 (65) GE Ireland CHF Funding Unlimited Company 711 - GE Ireland USD Holdings Unlimited Company 1,333 659 GE Capital Treasury Services (U.S.) LLC (12,284) (38,351) GE RZU Holdings LLC 528 336 GE Capital International Holdings Limited - 131 GE IRELAND FINANCIAL FUNDING LIMITED - 33 GE Capital DG2 Holdings LLC - 237 General Electric Company (1,576) - Gain/(loss) on derivative instruments Hedge Management Services, Inc. 45,347 (99,104) GE Financial Markets Unlimited Company - (149,773) 123,834 (248,827) 72 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 22 Related party disclosures (continued) The below table lists the related parties that the Company has balances or has transacted with during the year. Balances and transactions during the year with the immediate parent, GE Ireland USD Holdings Unlimited Company are included in the below table. Related Party Opening Balance 1/1/2023 Receipts/FV adjustments during the financial year Repayments/FV adjustments during the financial year Closing Balance 31/12/2023 USD’000 USD’000 USD’000 USD’000 Service fee accrued GE Treasury Ireland Services Unlimited Company (1,022) 1,047 - 25 Loans and advances to/from GEC affiliates GE Financial Funding Unlimited Company 2,226,445 - (2,226,445) - Cash Management Services Inc. 944,499 610,487 - 1,554,986 GE Ireland CHF Funding Unlimited Company - 20,221 - 20,221 GE Ireland USD Holdings Unlimited Company 20,215 52 - 20,267 GE Capital Treasury Services (U.S.) LLC (404,236) 404,236 - - GE RZU Holdings LLC 20,256 - (20,256) - General Electric Company - 78,424 - 78,424 Derivative instruments held Hedge Management Services, Inc. (25,595) 38,114 - 12,519 Total 2,780,562 1,152,581 (2,246,701) 1,686,442 73 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 22 Related party disclosures (continued) (b) Compensation of Key Management Personnel Disclosures are made in Note 10 in accordance with the provisions of IAS 24 - Related Party Disclosures and Company law in respect of the compensation of Key Management Personnel. Under IAS 24 - Related Party Disclosures, “Key Management Personnel” are defined as comprising the Directors (executive and non-executive) at year end. The compensation of key management personnel during the year consists of short-term employment benefits of USD 116,617 and post-employment benefits of USD 5,385. As outlined in Note 10, Directors’ remuneration for the year ended 31 December 2023 was paid by an affiliated entity, T2K. Directors remuneration has been included in the service fee charged from this company. (c) Transactions with Key Management Personnel There were no loans, quasi-loans or credit transactions outstanding to its key management personnel at any time during the current or preceding financial year. 23 Operating segments The Company’s business is organised as a single segment and have earned all their revenues in the Republic of Ireland. All of the revenues arise from the provision of loans to GEC affiliates and from the reversal of an over-accrual for service fee expense with another GEC affiliate. 2023 Ireland USD'000 2022 Ireland USD'000 Revenue from loans and advances to GEC affiliates 104,534 39,100 Revenue from commitment fees from GEC affiliates 264 433 Total segment revenue 104,798 39,533 One GEC affiliate, GEFF, accounted for 46% of total revenue during the year (31 December 2022: 96%) and another GEC affiliate, CMS, accounted for 51% of total revenue of the Company during the year (31 December 2022: 0%). No other GEC affiliates accounted for more than 10% of total revenue. 2023 Ireland USD'000 2022 (restated) Ireland USD'000 Reportable segment gain/(loss) before tax (6,269) 43,652 74 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24 ![]() ## GE Capital UK Funding Unlimited Company Notes forming part of the financial statements (continued) 23 Operating segments (continued) 2023 USD'000 2022 (restated) USD'000 Reportable segment assets 2,105,396 3,229,170 Reportable segment liabilities 1,675,309 2,092,814 Loans to CMS, accounted for 94% of segment assets at 31 December 2023 (at 31 December 2022: 29%). Loans to GEFF, accounted for 0% of segment assets at 31 December 2023 (31 December 2022: 69%). No other GEC affiliates accounted for more than 10% of segment assets. 24 Holding Company At 31 December 2023, the Company is a wholly owned subsidiary of GE Ireland USD Holdings Unlimited Company, an unlimited Company incorporated in the Ireland, which is ultimately a wholly owned subsidiary of GEC, a company incorporated in the USA. The smallest and largest group in which the Company results are included is that held by GEC, a Company incorporated in the USA, copies of whose consolidated Financial Statements may be obtained from GEC, 41 Farnsworth Street, Boston, MA 02210, USA. 25 Commitments and contingencies The Company had commitments to lend USD 1,800 million at 31 December 2023 (2022: USD 786 million). In the opinion of the Directors, the Company had no contingent liabilities at 31 December 2023 (2022: Nil). 26 Subsequent events Fergal Mullin and Shane Pounch resigned as Directors effective from 20 March 2024. On 2 April 2024 GEC completed the spin-off of its Digital, Renewables and Power businesses into GE Vernova, going forward GEC will be known as GE Aerospace. This has had no direct impact on the Company. No other significant events affecting the Company have occurred since the reporting date, which require adjustment to the Financial Statements or inclusion of a note therein. 27 Approval of financial statements The Directors approved the Financial Statements on 19th April 2024. 75 DocuSign Envelope ID: 8EC8DE5E-204F-403E-976F-A0943D2D6D24