General Electric (GE) 8-KOther events
Filed: 10 Oct 03, 12:00am
Exhibit 99(a)
GE Posts Third-Quarter Earnings of $.40 per Share,
With Double-Digit Growth at Eight of 13 Businesses
And Solid Cash Flow From Operating Activities
Fairfield, Conn., October 10, 2003– GE's earnings before required accounting changes for third quarter 2003 were $4.0 billion, or $.40 per share, compared with $4.1 billion, or $.41 per share, in third quarter 2002, the Company announced today.
"We delivered broad-based performance and continued to develop the resources with which we will create growth in a slow-growth world," said GE Chairman and CEO Jeff Immelt.We had several major operating highlights in the quarter: eight of 13 businesses delivered double-digit earnings growth, cash flow from operating activities increased 29%, and our five new growth platforms increased sales by 18%.
"During the quarter, we continued to accelerate the transformation of our portfolio. We announced or completed the dispositions of GE Edison Life, Financial Guaranty Insurance Company, GE Superabrasives, and Specialty Chemicals. This week we completed a definitive agreement to form NBC-Universal and create a diversified, fast-growth media business with $13 billion ofpro forma 2003 revenues.
"And this morning, we announced an agreement to acquire Amersham plc, a global leader in molecular medicine. With combinedpro forma revenues of $13 billion, the pairing of Amersham with GE Medical Systems will create a healthcare technology leader operating in one of the fastest-growing areas of medicine."
GE will discuss third quarter results and the proposed Amersham transaction on a conference call and Webcast at 8:30 a.m. EDT today. Call information and charts are available at www.ge.com/investor.
Third Quarter 2003 Financial Highlights
"We continue to execute in a challenging economy," Immelt said. "We're entering the fourth quarter with positive momentum and we expect to earn $.45-$.47 per share – up 45% over last year's reported results. With multiple revenue streams and new platforms, we expect 10 of our 13 businesses to generate double-digit earnings growth in the quarter, with per-share growth from operations, excluding mainly the impact of last year's reinsurance charges, of more than 10%. For the full year, we expect to deliver $1.55-$1.57 per share.
"At the same time, we are positioning the company for long-term, high-value growth. Our core initiatives – technology, services, customer focus, globalization, and growth platforms – are building sustainable competitive advantage. The creation of NBC-Universal and the expansion of our healthcare business through the Amersham transaction should give our company strong momentum for the future.
"I am immensely proud of the GE team that is making the company better each day," Immelt said.
Third Quarter 2003 Business Highlights
NBC
Medical Systems
Aircraft Engines
Power Systems
Commercial Finance
Consumer Finance
Insurance
Specialty Materials
Transportation Systems
Industrial Systems
Consumer Products
* * *
GE (NYSE: GE) is a diversified technology and services company dedicated to creating products that make life better. From aircraft engines and power generation to financial services, medical imaging, television programming and plastics, GE operates in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company's Web site at http://www.ge.com.
Caution Concerning Forward-Looking Statements
This document includes certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors. More information about those factors is contained in GE's filings with the U.S. Securities and Exchange Commission. This presentation includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in our GAAP Reconciliation file on our investor relations website at
http://www.ge.com/en/company/investor/webcast/webcast_10102003.htm or
http://www.ge.com/en/company/investor/secreport/reclass/sec8k2003ge.htm.
Forward-looking statements relating to the financial performance of GE have not been prepared or verified to the standards required by the UK City Code on Takeovers and Mergers, including its requirements for reports by auditors and financial advisers.
GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
Consolidated | GE | Financial Services (GECS) | ||||||||||||||||||||||||||
Third quarter ended September 30 | 2003 | 2002 | V | % | 2003 | 2002 | V | % | 2003 | 2002 | V | % | ||||||||||||||||
Revenues | ||||||||||||||||||||||||||||
Sales of goods and services | $ | 16,925 | $ | 18,048 | $ | 16,463 | $ | 17,386 | $ | 527 | $ | 779 | ||||||||||||||||
Earnings of GECS before accounting changes | – | – | 2,207 | 1,551 | – | – | ||||||||||||||||||||||
GECS revenues from services | 15,937 | 14,214 | – | – | 16,154 | 14,336 | ||||||||||||||||||||||
Other income | 206 | 457 | 235 | 486 | – | – | ||||||||||||||||||||||
Revenues from FIN 46 entities | 326 | – | – | – | 326 | – | ||||||||||||||||||||||
Total revenues | 33,394 | 32,719 | 2 | % | 18,905 | 19,423 | (3 | )% | 17,007 | 15,115 | 13 | % | ||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||
Cost of sales, operating and administrative expenses | 20,232 | 19,731 | 14,136 | 14,024 | 6,290 | 5,891 | ||||||||||||||||||||||
Interest and other financial charges | 2,607 | 2,773 | 282 | 212 | 2,442 | 2,645 | ||||||||||||||||||||||
Insurance losses and policyholder and annuity benefits | 4,093 | 4,227 | – | – | 4,093 | 4,227 | ||||||||||||||||||||||
Provision for losses on financing receivables | 1,061 | 640 | – | – | 1,061 | 640 | ||||||||||||||||||||||
Minority interest in net earnings of consolidated affiliates | 77 | 84 | 44 | 45 | 33 | 39 | ||||||||||||||||||||||
Expenses from FIN 46 entities | 204 | – | – | – | 204 | – | ||||||||||||||||||||||
Total costs and expenses | 28,274 | 27,455 | 3 | % | 14,462 | 14,281 | 1 | % | 14,123 | 13,442 | 5 | % | ||||||||||||||||
Earnings before income taxes and accounting changes | 5,120 | 5,264 | 4,443 | 5,142 | 2,884 | 1,673 | ||||||||||||||||||||||
Provision for income taxes | (1,099 | ) | (1,177 | ) | (422 | ) | (1,055 | ) | (677 | ) | (122 | ) | ||||||||||||||||
Earnings before accounting changes | $ | 4,021 | $ | 4,087 | (2 | )% | $ | 4,021 | $ | 4,087 | (2 | )% | $ | 2,207 | $ | 1,551 | 42 | % | ||||||||||
Cumulative effect of accounting changes | (372 | ) | – | (372 | ) | – | (339 | ) | – | |||||||||||||||||||
Net earnings | $ | 3,649 | $ | 4,087 | (11 | )% | $ | 3,649 | $ | 4,087 | (11 | )% | $ | 1,868 | $ | 1,551 | 20 | % | ||||||||||
Per-share amounts before accounting changes | ||||||||||||||||||||||||||||
Diluted earnings per share | $ | 0.40 | $ | 0.41 | (2 | )% | ||||||||||||||||||||||
Basic earnings per share | $ | 0.40 | $ | 0.41 | (2 | )% | ||||||||||||||||||||||
Per-share amounts after accounting changes | ||||||||||||||||||||||||||||
Diluted earnings per share | $ | 0.36 | $ | 0.41 | (12 | )% | ||||||||||||||||||||||
Basic earnings per share | $ | 0.36 | $ | 0.41 | (12 | )% | ||||||||||||||||||||||
Dividends declared per share | $ | 0.19 | $ | 0.18 |
Dollar amounts in millions; per-share amounts in dollars; unaudited. Supplemental consolidating data are shown for "GE" and "Financial Services (GECS)." Transactions between GE and Financial Services (GECS) have been eliminated from the "consolidated" columns. See note 1 to the consolidated financial statements in the 2002 Annual Report to Share Owners for further information about consolidation matters.
GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
Consolidated | GE | Financial Services (GECS) | ||||||||||||||||||||||||
Nine months ended September 30 | 2003 | 2002 | V | % | 2003 | 2002 | V | % | 2003 | 2002 | V | % | ||||||||||||||
Revenues | ||||||||||||||||||||||||||
Sales of goods and services | $ | 51,210 | $ | 55,797 | $ | 49,861 | $ | 53,593 | $ | 1,582 | $ | 2,494 | ||||||||||||||
Earnings of GECS before accounting changes | – | – | 5,479 | 4,535 | – | – | ||||||||||||||||||||
GECS revenues from services | 45,278 | 40,302 | – | – | 45,853 | 40,615 | ||||||||||||||||||||
Other income | 409 | 598 | 458 | 675 | – | – | ||||||||||||||||||||
Revenues from FIN 46 entities | 326 | – | – | – | 326 | – | ||||||||||||||||||||
Total revenues | 97,223 | 96,697 | 1 | % | 55,798 | 58,803 | (5 | )% | 47,761 | 43,109 | 11 | % | ||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||
Cost of sales, operating and administrative expenses | 59,402 | 59,427 | 41,885 | 43,065 | 18,117 | 16,826 | ||||||||||||||||||||
Interest and other financial charges | 7,886 | 7,590 | 705 | 444 | 7,438 | 7,362 | ||||||||||||||||||||
Insurance losses and policyholder and annuity benefits | 12,334 | 11,465 | – | – | 12,334 | 11,465 | ||||||||||||||||||||
Provision for losses on financing receivables | 2,799 | 2,087 | – | – | 2,799 | 2,087 | ||||||||||||||||||||
Minority interest in net earnings of consolidated affiliates | 219 | 250 | 123 | 137 | 96 | 113 | ||||||||||||||||||||
Expenses from FIN 46 entities | 204 | – | – | – | 204 | – | ||||||||||||||||||||
Total costs and expenses | 82,844 | 80,819 | 3 | % | 42,713 | 43,646 | (2 | )% | 40,988 | 37,853 | 8 | % | ||||||||||||||
Earnings before income taxes and accounting changes | 14,379 | 15,878 | 13,085 | 15,157 | 6,773 | 5,256 | ||||||||||||||||||||
Provision for income taxes | (3,350 | ) | (3,847 | ) | (2,056 | ) | (3,126 | ) | (1,294 | ) | (721 | ) | ||||||||||||||
Earnings before accounting changes | $ | 11,029 | $ | 12,031 | (8 | )% | $ | 11,029 | $ | 12,031 | (8 | )% | $ | 5,479 | $ | 4,535 | 21 | % | ||||||||
Cumulative effect of accounting changes | (587 | ) | (1,015 | ) | (587 | ) | (1,015 | ) | (339 | ) | (1,015 | ) | ||||||||||||||
Net earnings | $ | 10,442 | $ | 11,016 | (5 | )% | $ | 10,442 | $ | 11,016 | (5 | )% | $ | 5,140 | $ | 3,520 | 46 | % | ||||||||
Per-share amounts before accounting changes | ||||||||||||||||||||||||||
Diluted earnings per share | $ | 1.10 | $ | 1.20 | (8 | )% | ||||||||||||||||||||
Basic earnings per share | $ | 1.10 | $ | 1.21 | (9 | )% | ||||||||||||||||||||
Per-share amounts after accounting changes | ||||||||||||||||||||||||||
Diluted earnings per share | $ | 1.04 | $ | 1.10 | (5 | )% | ||||||||||||||||||||
Basic earnings per share | $ | 1.04 | $ | 1.11 | (6 | )% | ||||||||||||||||||||
Dividends declared per share | $ | 0.57 | $ | 0.54 |
Dollar amounts in millions; per-share amounts in dollars; unaudited. Supplemental consolidating data are shown for "GE" and "Financial Services (GECS)." Transactions between GE and Financial Services (GECS) have been eliminated from the "consolidated" columns. See note 1 to the consolidated financial statements in the 2002 Annual Report to Share Owners for further information about consolidation matters.
Summary of Operating Segments
General Electric Company and Consolidated Affiliates
THIRD QUARTER | THIRD QUARTER YTD | |||||||||||||||
(Dollars in millions) | 2003 | 2002 | V | % | 2003 | 2002 | V | % | ||||||||
Revenues | ||||||||||||||||
Aircraft Engines | $ | 2,534 | $ | 2,721 | (7 | ) | $ | 7,645 | $ | 8,062 | (5 | ) | ||||
Commercial Finance | 4,750 | 4,522 | 5 | 13,824 | 12,942 | 7 | ||||||||||
Consumer Finance | 3,499 | 2,701 | 30 | 9,304 | 7,536 | 23 | ||||||||||
Consumer Products | 2,075 | 2,116 | (2 | ) | 6,053 | 6,236 | (3 | ) | ||||||||
Equipment Management | 1,136 | 1,207 | (6 | ) | 3,407 | 3,531 | (4 | ) | ||||||||
Industrial Products and Systems | 2,068 | 1,880 | 10 | 6,113 | 5,408 | 13 | ||||||||||
Insurance | 6,824 | 6,197 | 10 | 19,984 | 17,228 | 16 | ||||||||||
Medical Systems | 2,336 | 2,130 | 10 | 6,878 | 6,205 | 11 | ||||||||||
NBC | 1,517 | 1,370 | 11 | 4,943 | 5,355 | (8 | ) | |||||||||
Plastics | 1,297 | 1,329 | (2 | ) | 3,860 | 3,928 | (2 | ) | ||||||||
Power Systems | 4,199 | 5,123 | (18 | ) | 12,927 | 16,920 | (24 | ) | ||||||||
Specialty Materials | 789 | 689 | 15 | 2,244 | 1,698 | 32 | ||||||||||
Transportation Systems | 569 | 521 | 9 | 1,686 | 1,597 | 6 | ||||||||||
All Other GECS | 798 | 488 | 64 | 1,242 | 1,872 | (34 | ) | |||||||||
Corporate items and eliminations | (997 | ) | (275 | ) | U | (2,887 | ) | (1,821 | ) | (59 | ) | |||||
Consolidated revenues | $ | 33,394 | $ | 32,719 | 2 | $ | 97,223 | $ | 96,697 | 1 | ||||||
Segment profit (a) | ||||||||||||||||
Aircraft Engines | $ | 484 | $ | 512 | (5 | ) | $ | 1,518 | $ | 1,499 | 1 | |||||
Commercial Finance | 1,001 | 879 | 14 | 2,632 | 2,334 | 13 | ||||||||||
Consumer Finance | 595 | 467 | 27 | 1,655 | 1,431 | 16 | ||||||||||
Consumer Products | 114 | 97 | 18 | 391 | 356 | 10 | ||||||||||
Equipment Management | 48 | 83 | (42 | ) | 131 | 225 | (42 | ) | ||||||||
Industrial Products and Systems | 156 | 153 | 2 | 472 | 433 | 9 | ||||||||||
Insurance | 604 | 327 | 85 | 1,624 | 938 | 73 | ||||||||||
Medical Systems | 383 | 347 | 10 | 1,129 | 1,014 | 11 | ||||||||||
NBC | 431 | 330 | 31 | 1,462 | 1,188 | 23 | ||||||||||
Plastics | 100 | 224 | (55 | ) | 271 | 706 | (62 | ) | ||||||||
Power Systems | 984 | 1,418 | (31 | ) | 2,914 | 4,880 | (40 | ) | ||||||||
Specialty Materials | 115 | 56 | 105 | 279 | 197 | 42 | ||||||||||
Transportation Systems | 109 | 91 | 20 | 292 | 268 | 9 | ||||||||||
All Other GECS | (41 | ) | (205 | ) | 80 | (563 | ) | (393 | ) | (43 | ) | |||||
Total segment profit | 5,083 | 4,779 | 6 | 14,207 | 15,076 | (6 | ) | |||||||||
GE corporate items and eliminations | (358 | ) | 575 | U | (417 | ) | 525 | U | ||||||||
GE interest and other financial charges | (282 | ) | (212 | ) | (33 | ) | (705 | ) | (444 | ) | (59 | ) | ||||
GE provision for income taxes | (422 | ) | (1,055 | ) | 60 | (2,056 | ) | (3,126 | ) | 34 | ||||||
Earnings before accounting changes | 4,021 | 4,087 | (2 | ) | 11,029 | 12,031 | (8 | ) | ||||||||
Cumulative effect of accounting changes | (372 | ) | – | (587 | ) | (1,015 | ) | |||||||||
Consolidated net earnings | $ | 3,649 | $ | 4,087 | (11 | ) | $ | 10,442 | $ | 11,016 | (5 | ) | ||||
(a) | Segment profit excludes the effects of pension and other retiree benefit plans, accounting changes and certain restructuring and other charges. Segment profit includes or excludes interest and other financial charges and segment income taxes according to how segment management is measured – excluded in determining operating profit for Aircraft Engines, Consumer Products, Industrial Products and Systems, Medical Systems, NBC, Plastics, Power Systems, Specialty Materials and Transportation Systems, but included in determining net earnings for Commercial Finance, Consumer Finance, Equipment Management, Insurance and All Other GECS. |