| GENERAL ELECTRIC COMPANY |
| CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED) |
| |
| | Consolidated | | | GE(a) | Financial Services (GE Capital) |
| Three months ended March 31 | 2016 | 2015 | V% | | | 2016 | 2015 | | V% | 2016 | 2015 | V% |
| | | | | | | | | | | | | | | | | | | | | |
| Revenues and other income | | | | | | | | | | | | | | | | | | | | |
| Sales of goods and services | $ | 25,314 | $ | 23,683 | | 7% | | | $ | 25,407 | $ | 23,839 | | 7% | $ | 25 | $ | 21 | | 19% |
| Other income | | 9 | | 142 | | | | | | 92 | | 52 | | | | - | | - | | |
| GE Capital earnings (loss) from continuing operations | - | | - | | | | | | (893) | | (5,721) | | | | - | | - | | |
| GE Capital revenues from services | | 2,522 | | 2,414 | | | | | | - | | - | | | | 2,860 | | 2,845 | | |
| Total revenues and other income | | 27,845 | | 26,239 | | 6% | | | | 24,606 | | 18,171 | | 35% | | 2,885 | | 2,866 | | 1% |
| | | | | | | | | | | | | | | | | | | | | |
| Costs and expenses | | | | | | | | | | | | | | | | | | | | |
| Cost of sales | | 20,362 | | 18,682 | | | | | | 19,890 | | 18,325 | | | | 589 | | 535 | | |
| Selling, general and administrative expenses | | 4,608 | | 4,415 | | | | | | 3,982 | | 3,825 | | | | 874 | | 792 | | |
| Interest and other financial charges | | 1,736 | | 618 | | | | | | 440 | | 389 | | | | 1,430 | | 339 | | |
| Investment contracts, insurance losses and | | | | | | | | | | | | | | | | | | | | |
| insurance annuity benefits | | 642 | | 613 | | | | | | - | | - | | | | 671 | | 642 | | |
| Other costs and expenses | | 259 | | 291 | | | | | | - | | - | | | | 268 | | 290 | | |
| Total costs and expenses | | 27,606 | | 24,619 | | 12% | | | | 24,313 | | 22,540 | | 8% | | 3,833 | | 2,597 | | 48% |
| Earnings (loss) from continuing operations | | | | | | | | | | | | | | | | | | | | |
| before income taxes | | 238 | | 1,621 | | (85)% | | | | 294 | | (4,369) | | F | | (948) | | 269 | | U |
| Benefit (provision) for income taxes | | 139 | | (6,294) | | | | | | (201) | | (306) | | | | 341 | | (5,988) | | |
| Earnings (loss) from continuing operations | | 378 | | (4,673) | | F | | | | 92 | | (4,675) | | F | | (608) | | (5,719) | | 89% |
| Earnings (loss) from discontinued | | | | | | | | | | | | | | | | | | | | |
| operations, net of taxes | | (308) | | (8,936) | | | | | | (308) | | (9,025) | | | | (308) | | (8,935) | | |
| Net earnings (loss) | | 69 | | (13,608) | | F | | | | (216) | | (13,700) | | 98% | | (916) | | (14,654) | | 94% |
| Less net earnings (loss) attributable to | | | | | | | | | | | | | | | | | | | | |
| noncontrolling interests | | (121) | | (35) | | | | | | (117) | | (127) | | | | (4) | | 91 | | |
| Net earnings (loss) attributable to the Company | | 191 | | (13,573) | | F | | | | (98) | | (13,573) | | 99% | | (912) | | (14,745) | | 94% |
| Preferred stock dividends | | (289) | | - | | | | | | - | | - | | | | (289) | | - | | |
| Net earnings (loss) attributable to | | | | | | | | | | | | | | | | | | | | |
| GE common shareowners | $ | (98) | $ | (13,573) | | 99% | | | $ | (98) | $ | (13,573) | | 99% | $ | (1,201) | $ | (14,745) | | 92% |
| Amounts attributable to GE common | | | | | | | | | | | | | | | | | | | | |
| shareowners: | | | | | | | | | | | | | | | | | | | | |
| Earnings (loss) from continuing operations | $ | 378 | $ | (4,673) | | F | | | $ | 92 | $ | (4,675) | | F | $ | (608) | $ | (5,719) | | 89% |
| Less net earnings (loss) attributable | | | | | | | | | | | | | | | | | | | | |
| to noncontrolling interests, continuing operations | | (121) | | (124) | | | | | | (117) | | (127) | | | | (4) | | 2 | | |
| Earnings (loss) from continuing operations | | | | | | | | | | | | | | | | | | | | |
| attributable to the Company | | 499 | | (4,548) | | F | | | | 210 | | (4,548) | | F | | (604) | | (5,721) | | 89% |
| Preferred stock dividends | | (289) | | - | | | | | | - | | - | | | | (289) | | - | | |
| Earnings (loss) from continuing operations | | | | | | | | | | | | | | | | | | | | |
| attributable to GE common shareowners | | 210 | | (4,548) | | F | | | | 210 | | (4,548) | | F | | (893) | | (5,721) | �� | 84% |
| Earnings (loss) from discontinued | | | | | | | | | | | | | | | | | | | | |
| operations, net of taxes | | (308) | | (8,936) | | | | | | (308) | | (9,025) | | | | (308) | | (8,935) | | |
| Less net earnings (loss) attributable to | | | | | | | | | | | | | | | | | | | | |
| noncontrolling interests, discontinued operations | | - | | 89 | | | | | | - | | - | | | | - | | 89 | | |
| Net earnings (loss) attributable to GE | | | | | | | | | | | | | | | | | | | | |
| common shareowners | $ | (98) | $ | (13,573) | | 99% | | | $ | (98) | $ | (13,573) | | 99% | $ | (1,201) | $ | (14,745) | | 92% |
| | | | | | | | | | | | | | | | | | | | | |
| Per-share amounts - earnings (loss) from | | | | | | | | | | | | | | | | | | | | |
| continuing operations | | | | | | | | | | | | | | | | | | | | |
| Diluted earnings (loss) per share | $ | 0.02 | $ | (0.45) | | F | | | | | | | | | | | | | | |
| Basic earnings (loss) per share | $ | 0.02 | $ | (0.45) | | F | | | | | | | | | | | | | | |
| Per-share amounts - net earnings (loss) | | | | | | | | | | | | | | | | | | | | |
| Diluted earnings (loss) per share | $ | (0.01) | $ | (1.35) | | 99% | | | | | | | | | | | | | | |
| Basic earnings (loss) per share | $ | (0.01) | $ | (1.35) | | 99% | | | | | | | | | | | | | | |
| Total average equivalent shares | | | | | | | | | | | | | | | | | | | | |
| Diluted earnings | | 9,372 | | 10,067 | | (7)% | | | | | | | | | | | | | | |
| Basic earnings | | 9,288 | | 10,067 | | (8)% | | | | | | | | | | | | | | |
| Dividends declared per common share | $ | 0.23 | $ | 0.23 | | -% | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Amounts attributable to GE | | | | | | | | | | | | | | | | | | | | |
| common shareowners: | | | | | | | | | | | | | | | | | | | | |
| Earnings (loss) from continuing operations | $ | 210 | $ | (4,548) | | F | | | | | | | | | | | | | | |
| Adjustment (net of tax): non-operating pension costs | | 333 | | 452 | | | | | | | | | | | | | | | | |
| Operating earnings (loss) (non-GAAP measure) | $ | 543 | $ | (4,096) | | F | | | | | | | | | | | | | | |
| Operating earnings - diluted | | | | | | | | | | | | | | | | | | | | |
| earnings (loss) per share (non-GAAP measure) | $ | 0.06 | $ | (0.41) | | F | | | | | | | | | | | | | | |
| (a) | Refers to the Industrial businesses of the Company including GE Capital on an equity basis. |
Amounts may not add due to rounding. Dollar amounts and share amounts in millions; per-share amounts in dollars.
"GE Capital" means GE Capital Global Holdings, LLC (GECGH) and its predecessor General Electric Capital Corporation (GECC) and all of their affiliates and associated companies. Separate information is shown for "GE" and "Financial Services (GE Capital)." Transactions between GE and GE Capital have been eliminated from the "Consolidated" column. See Note 1 to the 2015 consolidated financial statements at www.ge.com/ar2015 for further information about consolidation matters.
| GENERAL ELECTRIC COMPANY | | | | | | | |
| SUMMARY OF OPERATING SEGMENTS (UNAUDITED) | | | | | | | |
| | | | | | | | |
| | Three months ended March 31 |
| (Dollars in millions) | 2016 | | 2015 | | V% |
| | | | | | | | |
| Revenues(a) | | | | | | | |
| Power | $ | 5,204 | | $ | 4,612 | | 13 % |
| Renewable Energy | | 1,669 | | | 1,028 | | 62 % |
| Oil & Gas | | 3,314 | | | 4,040 | | (18)% |
| Energy Connections | | 2,260 | | | 1,685 | | 34 % |
| Aviation | | 6,262 | | | 5,674 | | 10 % |
| Healthcare | | 4,183 | | | 4,075 | | 3 % |
| Transportation | | 981 | | | 1,308 | | (25)% |
| Appliances & Lighting | | 1,996 | | | 1,940 | | 3 % |
| Total industrial segment revenues | | 25,869 | | | 24,362 | | 6 % |
| Capital | | 2,885 | | | 2,866 | | 1 % |
| Total segment revenues | | 28,754 | | | 27,228 | | 6 % |
| Corporate items and eliminations(a) | | (909) | | | (988) | | |
| Consolidated revenues | $ | 27,845 | | $ | 26,239 | | 6 % |
| | | | | | | | |
| Segment profit (loss)(a) | | | | | | | |
| Power | $ | 573 | | $ | 757 | | (24)% |
| Renewable Energy | | 83 | | | 57 | | 46 % |
| Oil & Gas | | 308 | | | 489 | | (37)% |
| Energy Connections | | (85) | | | 28 | | U |
| Aviation | | 1,524 | | | 1,314 | | 16 % |
| Healthcare | | 631 | | | 587 | | 7 % |
| Transportation | | 164 | | | 225 | | (27)% |
| Appliances & Lighting | | 115 | | | 102 | | 13 % |
| Total industrial segment profit | | 3,314 | | | 3,560 | | (7)% |
| Capital | | (893) | | | (5,721) | | 84 % |
| Total segment profit (loss) | | 2,421 | | | (2,162) | | F |
| Corporate items and eliminations(a) | | (1,571) | | | (1,691) | | |
| GE interest and other financial charges | | (440) | | | (389) | | |
| GE provision for income taxes | | (201) | | | (306) | | |
| Earnings (loss) from continuing operations attributable to GE common shareowners | | 210 | | | (4,548) | | F |
| | | | | | | | |
| Earnings (loss) from discontinued operations, net of taxes | | (308) | | | (8,936) | | 97 % |
| Less net earnings (loss) attributable to noncontrolling interests, discontinued operations | | - | | | 89 | | U |
| Earnings (loss) from discontinued operations net of tax and noncontrolling interest | | (308) | | | (9,025) | | 97 % |
| Consolidated net earnings (loss) attributable to GE common shareowners | $ | (98) | | $ | (13,573) | | 99 % |
| | | | | | | | |
| (a) | Segment revenues include revenues and other income related to the segment. Segment profit excludes results reported as discontinued operations and material accounting changes, the portion of earnings or loss attributable to noncontrolling interests of consolidated subsidiaries, and as such only includes the portion of earnings or loss attributable to our share of the consolidated earnings or loss of consolidated subsidiaries. Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment's management is measured – excluded in determining segment profit, which we sometimes refer to as "operating profit," for Power, Renewable Energy, Oil & Gas, Energy Connections, Aviation, Healthcare, Transportation and Appliances & Lighting; included in determining segment profit, which we sometimes refer to as "net earnings," for Capital. Certain corporate costs, such as shared services, employee benefits and information technology are allocated to our segments based on usage. A portion of the remaining corporate costs are allocated based on each segment's relative net cost of operations. Total industrial segment revenues and profit include the sum of our eight industrial reporting segments without giving effect to the elimination of transactions among such segments. Total segment revenues and profit include the sum of our eight industrial segments and one financial services segment, without giving effect to the elimination of transactions among such segments. We believe that this provides investors with a view as to the results of all of our segments, without inter-segment eliminations and corporate items. |
Amounts may not add due to rounding
| GENERAL ELECTRIC COMPANY | | | | | | | | | | | | | | | | | | |
| CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED) |
| |
| | | | | | | | | | | | | | | | | | | |
| | Consolidated | | | GE(a) | | Financial Services (GE Capital) |
| | March 31, | | December 31, | | | March 31, | | December 31, | | March 31, | | December 31, |
| (Dollars in billions) | 2016 | | 2015 | | | 2016 | | 2015 | | 2016 | | 2015 |
| | | | | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | | | | |
| Cash and marketable securities | $ | 108.0 | | $ | 102.5 | | | $ | 9.4 | | $ | 10.5 | | $ | 98.7 | | $ | 91.9 |
| Receivables | | 25.9 | | | 27.0 | | | | 14.4 | | | 14.7 | | | - | | | - |
| Inventories | | 23.9 | | | 22.5 | | | | 23.8 | | | 22.4 | | | 0.1 | | | 0.1 |
| GE Capital financing receivables - net | | 11.9 | | | 12.1 | | | | - | | | - | | | 23.7 | | | 25.0 |
| Property, plant & equipment - net | | 53.8 | | | 54.1 | | | | 19.7 | | | 20.1 | | | 34.9 | | | 34.8 |
| Receivable from GE Capital (debt assumption) | | - | | | - | | | | 73.6 | | | 84.7 | | | - | | | - |
| Investment in GE Capital | | - | | | - | | | | 38.2 | | | 46.2 | | | - | | | - |
| Goodwill & intangible assets | | 83.1 | | | 83.4 | | | | 80.3 | | | 80.6 | | | 2.8 | | | 2.8 |
| Contract assets | | 21.7 | | | 21.2 | | | | 21.7 | | | 21.2 | | | - | | | - |
| Other assets | | 49.2 | | | 46.7 | | | | 20.0 | | | 20.5 | | | 39.5 | | | 36.0 |
| Assets of businesses held for sale | | 3.0 | | | 2.8 | | | | 3.0 | | | 2.8 | | | - | | | - |
| Assets of discontinued operations | | 81.6 | | | 121.0 | | | | - | | | - | | | 81.6 | | | 120.9 |
| Total assets | $ | 462.2 | | $ | 493.1 | | | $ | 304.2 | | $ | 323.8 | | $ | 281.2 | | $ | 311.5 |
| | | | | | | | | | | | | | | | | | | |
| Liabilities and equity | | | | | | | | | | | | | | | | | | |
| Borrowings | $ | 186.0 | | $ | 197.6 | | | $ | 93.0 | | $ | 103.1 | | $ | 167.8 | | $ | 180.2 |
| Investment contracts, insurance liabilities and | | | | | | | | | | | | | | | | | | |
| insurance annuity benefits | | 26.3 | | | 25.7 | | | | - | | | - | | | 27.0 | | | 26.2 |
| Non-current compensation and benefits | | 40.4 | | | 40.5 | | | | 39.6 | | | 39.5 | | | 0.8 | | | 1.0 |
| Other liabilities | | 75.7 | | | 78.9 | | | | 74.6 | | | 77.1 | | | 10.2 | | | 11.1 |
| Liabilities of businesses held for sale | | 1.0 | | | 0.9 | | | | 1.5 | | | 1.4 | | | - | | | - |
| Liabilities of discontinued operations | | 36.9 | | | 46.5 | | | | 0.1 | | | 0.1 | | | 36.8 | | | 46.4 |
| Redeemable noncontrolling interest | | 3.0 | | | 3.0 | | | | 3.0 | | | 3.0 | | | - | | | - |
| GE shareowners' equity | | 91.1 | | | 98.3 | | | | 91.1 | | | 98.3 | | | 38.2 | | | 46.2 |
| Noncontrolling interests | | 1.7 | | | 1.9 | | | | 1.2 | | | 1.4 | | | 0.4 | | | 0.5 |
| Total liabilities and equity | $ | 462.2 | | $ | 493.1 | | | $ | 304.2 | | $ | 323.8 | | $ | 281.2 | | $ | 311.5 |
| | | | | | | | | | | | | | | | | | | |
| (a) | Refers to the Industrial businesses of the Company including GE Capital on an equity basis. |
Amounts may not add due to rounding
"GE Capital" means GE Capital Global Holdings, LLC (GECGH) and its predecessor General Electric Capital Corporation (GECC) and all of their affiliates and associated companies. Separate information is shown for "GE" and "Financial Services (GE Capital)." Transactions between GE and GE Capital have been eliminated from the "Consolidated" column. See Note 1 to the 2015 consolidated financial statements at www.ge.com/ar2015 for further information about consolidation matters.
GENERAL ELECTRIC COMPANY
Financial Measures That Supplement GAAP
We sometimes use financial measures derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. The following non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure.
| | Industrial and GE Capital operating earnings (loss) and EPS |
| | GE Industrial operating + Verticals Earnings and EPS |
| | GE Industrial + Verticals revenues |
| | Industrial segment operating profit and operating profit margin (excluding Alstom) |
| | Industrial operating profit and operating profit margin (excluding Alstom) |
| | Industrial organic operating profit |
| | Industrial segment gross margins (excluding Alstom) |
| | Industrial segment organic revenue growth |
| | Industrial cash flows from operating activities (Industrial CFOA) |
| | Capital ending net investment (ENI), excluding liquidity |
The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures follow. Certain columns, rows or percentages within these reconciliations may not add or recalculate due to the use of rounded numbers. Totals and percentages presented are calculated from the underlying numbers in millions.
| |
| INDUSTRIAL AND GE CAPITAL OPERATING EARNINGS (LOSS) AND EPS | | |
| | | | | | | | |
| | | Three months ended March 31 |
| (Dollars in millions; except per share amounts) | | 2016 | | | 2015 | | V% |
| | | | | | �� | | |
| Earnings (loss) from continuing operations attributable to GE common shareowners | $ | 210 | | $ | (4,548) | | F |
| Adjustment (net of tax): non-operating pension costs | | 333 | | | 452 | | |
| Operating earnings (loss) | | 543 | | | (4,096) | | F |
| | | | | | | | |
| Less GE Capital earnings (loss) from continuing operations attributable to GE common shareowners | | (893) | | | (5,721) | | |
| Operating earnings excluding GE Capital earnings (loss) from continuing operations attributable to GE | | | | | | | |
| (Industrial operating earnings) | $ | 1,436 | | $ | 1,625 | | (12)% |
| | | | | | | | |
Earnings (loss) per share - diluted(a) | | | | | | | |
| Continuing earnings (loss) per share | | 0.02 | | | (0.45) | | F |
| Adjustment (net of tax): non-operating pension costs | | 0.04 | | | 0.04 | | -% |
| Operating earnings (loss) per share | | 0.06 | | | (0.41) | | F |
| Operating earnings (loss) per share attributable to GE Capital (GE Capital operating EPS) | | (0.10) | | | (0.57) | | 82% |
| Operating earnings per share attributable to Industrial (Industrial operating EPS) | $ | 0.15 | | $ | 0.16 | | (6)% |
| | | | | | | | |
| (a) | Earnings (loss) per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total. |
Operating earnings (loss) excludes non-service related pension costs of our principal pension plans comprising interest cost, expected return on plan assets and amortization of actuarial gains/losses. The service cost, prior service cost and curtailment loss components of our principal pension plans are included in operating earnings. We believe that these components of pension cost better reflect the ongoing service-related costs of providing pension benefits to our employees. As such, we believe that our measure of operating earnings (loss) provides management and investors with a useful measure of the operational results of our business. Other components of GAAP pension cost are mainly driven by capital allocation decisions and market performance, and we manage these separately from the operational performance of our businesses. Neither GAAP nor operating pension costs are necessarily indicative of the current or future cash flow requirements related to our pension plan. We also believe that this measure, considered along with the corresponding GAAP measure, provides management and investors with additional information for comparison of our operating results to the operating results of other companies.
We believe that presenting operating earnings and operating EPS separately for our industrial and financial services businesses also provides management and investors with useful information about the relative size of our industrial and financial services businesses in relation to the total company.
| GE INDUSTRIAL OPERATING + VERTICALS EARNINGS AND EPS | | | | | | | |
| | | | | | | | |
| | | Three months ended March 31 |
| (Dollars in millions; except per share amounts) | | 2016 | | | 2015 | | V% |
| | | | | | | | |
| GE Capital operating earnings (loss) | $ | (893) | | $ | (5,721) | | 84% |
| Less: Verticals earnings(a) | | 496 | | | 346 | | |
| GE Capital operating earnings less Verticals earnings | $ | (1,389) | | $ | (6,067) | | 77% |
| | | | | | | | |
| Industrial operating earnings | $ | 1,436 | | $ | 1,625 | | (12)% |
| Verticals earnings(a) | | 496 | | | 346 | | |
| Industrial operating earnings + Verticals earnings | $ | 1,932 | | $ | 1,971 | | (2)% |
| | | | | | | | |
Earnings (loss) per share - diluted(b) | | | | | | | |
| Industrial operating earnings-per-share | $ | 0.15 | | $ | 0.16 | | (6)% |
| Verticals earnings-per-share | | 0.05 | | | 0.03 | | 67% |
| Industrial operating + Verticals earnings-per-share | $ | 0.21 | | $ | 0.20 | | 5% |
| | | | | | | | |
| (a) | Verticals include businesses expected to be retained (GECAS, EFS, Industrial Finance, and run-off Insurance), including allocated corporate costs of $25 million and $58 million after tax in the three months ended March 31, 2016 and 2015, respectively. |
| (b) | Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total. |
As described above, Verticals represents the GE Capital businesses that we expect to retain. We believe that presenting Industrial operating + Verticals earnings-per-share amounts provides management and investors with a useful measure to evaluate the performance of the businesses we expect to retain after the disposition of most of our financial services business.
| GE INDUSTRIAL + VERTICALS REVENUES | | | | | | | |
| | | | | | | | |
| | Three months ended March 31 |
| (Dollars in millions) | | 2016 | | | 2015 | | V% |
| | | | | | | | |
| GE Capital revenues | $ | 2,885 | | $ | 2,866 | | 1 % |
| Less: Verticals revenues(a) | | 2,637 | | | 2,551 | | 3 % |
| GE Capital revenues less Verticals revenues | $ | 248 | | $ | 314 | | (21)% |
| | | | | | | | |
| Industrial segment revenues | $ | 25,869 | | $ | 24,362 | | 6 % |
| Verticals revenues(a) | | 2,637 | | | 2,551 | | 3 % |
| Corporate items and eliminations | | (909) | | | (988) | | |
| GE Industrial + Verticals revenues | $ | 27,597 | | $ | 25,925 | | 6 % |
| | | | | | | | |
| (a) | Verticals include businesses expected to be retained (GECAS, EFS, Industrial Finance, and run-off Insurance). |
As described above, Verticals represents the GE Capital businesses that we expect to retain. We believe that presenting Industrial + Verticals revenues amounts provides management and investors with a useful measure to evaluate the performance of the businesses we expect to retain after the disposition of most of our financial services business.
| INDUSTRIAL SEGMENT OPERATING PROFIT AND OPERATING MARGIN (EXCLUDING ALSTOM) |
| | | | | | |
| | Three months ended March 31 |
| (Dollars in millions) | 2016 | | 2015 |
| | | | | | |
| Revenues | | | | | |
| Total industrial segment revenues | $ | 25,869 | | $ | 24,362 |
| Less: Alstom revenues | | 2,813 | | | - |
| Total industrial segment operating revenues excluding Alstom | $ | 23,056 | | $ | 24,362 |
| | | | | | |
| Segment profit (loss) | | | | | |
| Total industrial segment operating profit | $ | 3,314 | | $ | 3,560 |
| Total industrial segment operating profit margin | | 12.8% | | | 14.6% |
| | | | | | |
| Less: Alstom profit (loss) | | (20) | | | - |
| Total industrial segment operating profit excluding Alstom | $ | 3,335 | | $ | 3,560 |
| Total industrial segment operating profit margin excluding Alstom | | 14.5% | | | 14.6% |
| | | | | | |
We have presented our industrial segment operating profit and industrial segment operating profit margin excluding the results of Alstom power and grid. We believe that operating profit and operating profit margin adjusted for the Alstom impacts are meaningful measures because they increase the comparability of period-to-period results.
| INDUSTRIAL OPERATING PROFIT AND OPERATING PROFIT MARGIN (EXCLUDING ALSTOM) |
| | | | | | |
| | Three months ended March 31 |
| (Dollars in millions) | | 2016 | | | 2015 |
| | | | | | |
| Revenues | | | | | |
| Total industrial segment revenues | $ | 25,869 | | $ | 24,362 |
| | | | | | |
| Corporate items and eliminations | | (909) | | | (988) |
| Less: gains | | 59 | | | - |
| Less: GE-GE Capital eliminations | | (540) | | | (518) |
| Adjusted corporate items and eliminations(a) | | (428) | | | (471) |
| Total Industrial operating revenues | | 25,440 | | | 23,892 |
| Less Alstom revenues | | 2,813 | | | - |
| Total Industrial operating revenues excluding Alstom(a) | $ | 22,627 | | $ | 23,892 |
| | | | | | |
| | | | | | |
| Segment profit (loss) | | | | | |
| Total industrial segment profit | $ | 3,314 | | $ | 3,560 |
| | | | | | |
| Corporate items and eliminations | | (1,571) | | | (1,691) |
| Less: gains | | 59 | | | - |
| Less: restructuring and other charges | | (686) | | | (422) |
| Less: non-operating pension costs (pre-tax) | | (512) | | | (695) |
| Adjusted corporate items and eliminations(a) | | (431) | | | (574) |
| Total Industrial operating profit | | 2,883 | | | 2,985 |
| Less Alstom profit (loss) | | (20) | | | - |
| | | | | | |
| Total Industrial operating profit excluding Alstom(a) | $ | 2,904 | | $ | 2,985 |
| Total Industrial operating profit margin | | 12.8% | | | 12.5% |
| | | | | | |
| (a) | Excludes gains and restructuring and non-operating pension costs (pre-tax). |
We have presented our Industrial operating profit and operating profit margin excluding restructuring, gains, and GE-GE Capital eliminations as well as the results of Alstom power and grid. We believe that Industrial operating profit and operating profit margin adjusted for restructuring, gains and GE-GE Capital eliminations as well as the Alstom impacts are meaningful measures because they increase the comparability of period-to-period results.
| INDUSTRIAL ORGANIC OPERATING PROFIT |
| | | | | | | | |
| | Three months ended March 31 |
| (Dollars in millions) | 2016 | | 2015 | | V% |
| | | | | | | | |
| Segment profit (loss) | | | | | | | |
| Total industrial segment profit | $ | 3,314 | | $ | 3,560 | | (7)% |
| Adjusted corporate items and eliminations(a) | | (431) | | | (574) | | |
| Total industrial profit(a) | $ | 2,883 | | $ | 2,985 | | (3)% |
| | | | | | | | |
| Less the effects of: | | | | | | | |
| Acquisitions, business dispositions (other than | | | | | | | |
| dispositions of businesses acquired for investment) | | | | | | | |
| and currency exchange rates | $ | (51) | | $ | 41 | | |
| Total industrial profit excluding effects of acquisitions, | | | | | | | |
| business dispositions (other than dispositions of | | | | | | | |
| businesses acquired for investment) and currency | | | | | | | |
| exchange rates (Industrial organic operating profit)(a) | $ | 2,935 | | $ | 2,944 | | -% |
| | | | | | | | |
| (a) | Excludes gains and restructuring and non-operating pension costs (pre-tax). |
Industrial organic operating profit growth, excluding gains and restructuring, measures Industrial operating profit excluding the effects of acquisitions, business dispositions and currency exchange rates and gains and restructuring. We believe that this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and currency exchange as well as gains and restructuring, which activities are subject to volatility and can obscure underlying trends. Management recognizes that the term "Industrial organic operating profit" may be interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the respective businesses or companies and may therefore be a useful tool in assessing period-to-period performance trends.
| INDUSTRIAL SEGMENT GROSS MARGIN (EXCLUDING ALSTOM) | | | | | |
| | | | | | |
| | Three months ended March 31 |
| (Dollars in millions) | | 2016 | | | 2015 |
| | | | | | |
| Industrial Sales | $ | 25,407 | | $ | 23,839 |
| Less: Corporate sales and eliminations | | (456) | | | (439) |
| Industrial segment sales | | 25,863 | | | 24,278 |
| Less: Alstom sales | | 2,887 | | | - |
| Industrial segment sales excluding Alstom | $ | 22,976 | | $ | 24,278 |
| | | | | | |
| Industrial cost of sales | $ | 19,890 | | $ | 18,325 |
| Less: Corporate cost of sales and eliminations | | 599 | | | 415 |
| Industrial segment cost of sales | | 19,291 | | | 17,910 |
| Less: Alstom cost of sales | | 2,329 | | | - |
| Industrial segment cost of sales excluding Alstom | $ | 16,962 | | $ | 17,910 |
| | | | | | |
| Industrial segment gross margin | | 6,572 | | | 6,368 |
| Industrial segment gross margin percentage | | 25.4% | | | 26.2% |
| | | | | | |
| Industrial segment gross margin excluding Alstom | | 6,014 | | | 6,368 |
| Industrial segment gross margin percentage excluding Alstom | | 26.2% | | | 26.2% |
| | | | | | |
We have presented our industrial segment gross margin excluding the results of Alstom power and grid. We believe that industrial segment gross margin adjusted for the Alstom impacts is a meaningful measure because it increases the comparability of period-to-period results.
| INDUSTRIAL SEGMENT ORGANIC REVENUE GROWTH |
| | | | | | | | |
| | Three months ended March 31 |
| (Dollars in millions) | | 2016 | | | 2015 | | V% |
| | | | | | | | |
| Industrial segment revenues | $ | 25,869 | | $ | 24,362 | | 6% |
| Less the effects of: | | | | | | | |
| Acquisitions, business dispositions (other than | | | | | | | |
| dispositions of businesses acquired for investment) | | | | | | | |
| and currency exchange rates | | 2,287 | | | 542 | | |
| Industrial segment revenues excluding effects of acquisitions, | | | | | | | |
| business dispositions (other than dispositions of | | | | | | | |
| businesses acquired for investment) and currency | | | | | | | |
| exchange rates (Industrial segment organic revenues) | $ | 23,582 | | $ | 23,821 | | (1)% |
| | | | | | | | |
Organic revenue growth measures revenue excluding the effects of acquisitions, business dispositions and currency exchange rates. We believe that this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and currency exchange, which activities are subject to volatility and can obscure underlying trends. We also believe that presenting organic revenue growth separately for our industrial businesses provides management and investors with useful information about the trends of our industrial businesses and enables a more direct comparison to other non-financial businesses and companies. Management recognizes that the term "organic revenue growth" may be interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the respective businesses or companies and may therefore be a useful tool in assessing period-to-period performance trends.
INDUSTRIAL CASH FLOWS FROM OPERATING ACTIVITIES (INDUSTRIAL CFOA) |
| | | | | | | | |
| | Three months ended March 31 |
| (Dollars in millions) | | 2016 | | | 2015 | | V% |
| | | | | | | | |
| Cash from GE's operating activities (continuing operations), as reported | $ | 7,856 | | $ | 1,340 | | F |
| Less dividends from GE Capital | | 7,500 | | | 450 | | |
| Cash from GE's operating activities (continuing operations), | | | | | | | |
| excluding dividends from GE Capital (Industrial CFOA) | $ | 356 | | $ | 890 | | (60)% |
| | | | | | | | |
We define "Industrial CFOA" as GE's cash from operating activities (continuing operations) less the amount of dividends received by GE from GE Capital. This includes the effects of intercompany transactions, including GE customer receivables sold to GE Capital; GE Capital services for trade receivables management and material procurement; buildings and equipment leased by GE from GE Capital; information technology (IT) and other services sold to GE Capital by GE; aircraft engines manufactured by GE that are installed on aircraft purchased by GE Capital from third-party producers for lease to others; and various investments, loans and allocations of GE corporate overhead costs. We believe that investors may find it useful to compare GE's operating cash flows without the effect of GE Capital dividends, since these dividends are not representative of the operating cash flows of our industrial businesses and can vary from period to period based upon the results of the financial services businesses. Management recognizes that this measure may not be comparable to cash flow results of companies which contain both industrial and financial services businesses, but believes that this comparison is aided by the provision of additional information about the amounts of dividends paid by our financial services business and the separate presentation in our financial statements of the GE Capital cash flows. We believe that our measure of Industrial CFOA provides management and investors with a useful measure to compare the capacity of our industrial operations to generate operating cash flow with the operating cash flow of other non-financial businesses and companies and as such provides a useful measure to supplement the reported GAAP CFOA measure.
| CAPITAL ENDING NET INVESTMENT (ENI), EXCLUDING LIQUIDITY |
| | | |
| (Dollars in billions) | March 31, 2016 | | March 31, 2015(b) |
| | | | | | |
| Financial Services (GE Capital) total assets | $ | 281.2 | | $ | 476.5 |
| Adjustment deferred income taxes | | 4.3 | | | - |
| GE Capital total assets | | 285.4 | | | 476.5 |
| Less assets of discontinued operations | | 81.6 | | | 31.3 |
| Less non-interest bearing liabilities | | 43.0 | | | 66.0 |
| Capital ENI | | 160.8 | | | 379.2 |
| Less liquidity(a) | | 79.7 | | | 76.4 |
| Capital ENI, excluding liquidity | $ | 81.1 | | $ | 302.8 |
| Discontinued operations, excluding liquidity | | 45.6 | | | 28.6 |
| Total ENI (excluding liquidity) including discontinued operations | $ | 126.7 | | | 331.4 |
| | | | | | |
| Total ENI (excluding liquidity) including discontinued operations percentage | | | | | |
| variance to March 31, 2015 | | (62)% | | | |
| | | | | | |
| (a) | Liquidity includes cash and equivalents and $13.9 billion of high quality interest bearing deposits at March 31, 2016. |
| (b) | As originally reported. |
We use ENI to measure the size of our Capital segment. We believe that this measure is a useful indicator of the capital (debt or equity) required to fund a business as it adjusts for non-interest bearing current liabilities generated in the normal course of business that do not require a capital outlay. We also believe that by excluding liquidity, we provide a meaningful measure of assets requiring capital to fund our Capital segment as a substantial amount of liquidity resulted from debt issuances to pre-fund future debt maturities and will not be used to fund additional assets. Liquidity consists of cash and equivalents and certain high quality interest bearing deposits. As a general matter, investments included in liquidity are expected to be highly liquid, giving us the ability to readily convert them to cash. Providing this measure will help investors measure how we are performing against our previously communicated goal to reduce the size of our financial services segment.
