GENERAL ELECTRIC COMPANY | ||||||||||||||||||||||||||||||||||
CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED) | ||||||||||||||||||||||||||||||||||
Consolidated | GE(a) | Financial Services (GE Capital) | ||||||||||||||||||||||||||||||||
Three months ended September 30 | 2017 | 2016 | V% | 2017 | 2016 | V% | 2017 | 2016 | V% | |||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||||||||||||
Sales of goods and services | $ | 29,429 | $ | 26,814 | 10 | % | $ | 29,438 | $ | 26,934 | 9 | % | $ | 39 | $ | 34 | 15 | % | ||||||||||||||||
Other income | 2,146 | 227 | 2,141 | 213 | — | — | ||||||||||||||||||||||||||||
GE Capital earnings (loss) from continuing operations | — | — | 24 | 26 | — | — | ||||||||||||||||||||||||||||
GE Capital revenues from services | 1,898 | 2,224 | — | — | 2,359 | 2,566 | ||||||||||||||||||||||||||||
Total revenues and other income | 33,472 | 29,266 | 14 | % | 31,603 | 27,172 | 16 | % | 2,397 | 2,600 | (8 | )% | ||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||||||
Cost of sales | 24,093 | 20,965 | 23,521 | 20,545 | 621 | 574 | ||||||||||||||||||||||||||||
Selling, general and administrative expenses | 4,855 | 4,343 | 4,717 | 3,880 | 285 | 631 | ||||||||||||||||||||||||||||
Interest and other financial charges | 1,232 | 961 | 718 | 483 | 790 | 617 | ||||||||||||||||||||||||||||
Investment contracts, insurance losses and | ||||||||||||||||||||||||||||||||||
insurance annuity benefits | 617 | 684 | — | — | 640 | 700 | ||||||||||||||||||||||||||||
Other costs and expenses(b) | 1,208 | 238 | 947 | — | 271 | 241 | ||||||||||||||||||||||||||||
Total costs and expenses | 32,006 | 27,191 | 18 | % | 29,903 | 24,909 | 20 | % | 2,608 | 2,763 | (6 | )% | ||||||||||||||||||||||
Earnings (loss) from continuing operations | ||||||||||||||||||||||||||||||||||
before income taxes | 1,466 | 2,074 | (29 | )% | 1,701 | 2,263 | (25 | )% | (211 | ) | (163 | ) | (29 | )% | ||||||||||||||||||||
Benefit (provision) for income taxes | 334 | (18 | ) | 64 | (241 | ) | 270 | 223 | ||||||||||||||||||||||||||
Earnings (loss) from continuing operations | 1,800 | 2,056 | (12 | )% | 1,765 | 2,022 | (13 | )% | 59 | 60 | (2 | )% | ||||||||||||||||||||||
Earnings (loss) from discontinued | ||||||||||||||||||||||||||||||||||
operations, net of taxes | (106 | ) | (105 | ) | (105 | ) | (103 | ) | (106 | ) | (105 | ) | ||||||||||||||||||||||
Net earnings (loss) | 1,694 | 1,951 | (13 | )% | 1,660 | 1,918 | (13 | )% | (47 | ) | (45 | ) | (4 | )% | ||||||||||||||||||||
Less net earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
noncontrolling interests | (142 | ) | (76 | ) | (140 | ) | (76 | ) | (2 | ) | — | |||||||||||||||||||||||
Net earnings (loss) attributable to the Company | 1,836 | 2,027 | (9 | )% | 1,800 | 1,994 | (10 | )% | (46 | ) | (45 | ) | (2 | )% | ||||||||||||||||||||
Preferred stock dividends | (36 | ) | (33 | ) | — | — | (36 | ) | (33 | ) | ||||||||||||||||||||||||
Net earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
GE common shareowners | $ | 1,800 | $ | 1,994 | (10 | )% | $ | 1,800 | $ | 1,994 | (10 | )% | $ | (81 | ) | $ | (78 | ) | (4 | )% | ||||||||||||||
Amounts attributable to GE common | ||||||||||||||||||||||||||||||||||
shareowners: | ||||||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 1,800 | $ | 2,056 | (12 | )% | $ | 1,765 | $ | 2,022 | (13 | )% | $ | 59 | $ | 60 | (2 | )% | ||||||||||||||||
Less net earnings (loss) attributable | ||||||||||||||||||||||||||||||||||
to noncontrolling interests, continuing operations | (141 | ) | (74 | ) | (140 | ) | (76 | ) | (1 | ) | 1 | |||||||||||||||||||||||
Earnings (loss) from continuing operations | ||||||||||||||||||||||||||||||||||
attributable to the Company | 1,941 | 2,131 | (9 | )% | 1,905 | 2,097 | (9 | )% | 60 | 59 | 2 | % | ||||||||||||||||||||||
Preferred stock dividends | (36 | ) | (33 | ) | — | — | (36 | ) | (33 | ) | ||||||||||||||||||||||||
Earnings (loss) from continuing operations | ||||||||||||||||||||||||||||||||||
attributable to GE common shareowners | 1,905 | 2,097 | (9 | )% | 1,905 | 2,097 | (9 | )% | 24 | 26 | (8 | )% | ||||||||||||||||||||||
Earnings (loss) from discontinued | ||||||||||||||||||||||||||||||||||
operations, net of taxes | (106 | ) | (105 | ) | (105 | ) | (103 | ) | (106 | ) | (105 | ) | ||||||||||||||||||||||
Less net earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
noncontrolling interests, discontinued operations | (1 | ) | (2 | ) | — | — | (1 | ) | (2 | ) | ||||||||||||||||||||||||
Net earnings (loss) attributable to GE | ||||||||||||||||||||||||||||||||||
common shareowners | $ | 1,800 | $ | 1,994 | (10 | )% | $ | 1,800 | $ | 1,994 | (10 | )% | $ | (81 | ) | $ | (78 | ) | (4 | )% | ||||||||||||||
Per-share amounts - earnings (loss) from | ||||||||||||||||||||||||||||||||||
continuing operations | ||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.22 | $ | 0.23 | (4 | )% | ||||||||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.22 | $ | 0.24 | (8 | )% | ||||||||||||||||||||||||||||
Per-share amounts - net earnings (loss) | ||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.21 | $ | 0.22 | (5 | )% | ||||||||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.21 | $ | 0.22 | (5 | )% | ||||||||||||||||||||||||||||
Total average equivalent shares | ||||||||||||||||||||||||||||||||||
Diluted | 8,732 | 9,016 | (3 | )% | ||||||||||||||||||||||||||||||
Basic | 8,665 | 8,904 | (3 | )% | ||||||||||||||||||||||||||||||
Dividends declared per common share | $ | 0.24 | $ | 0.23 | 4 | % |
(a) | Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis. |
(b) | GE amount represents a goodwill impairment charge recognized in the third quarter of 2017. |
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 2016 consolidated financial statements at www.ge.com/ar2016 for further information about consolidation matters.
4
GENERAL ELECTRIC COMPANY | ||||||||||||||||||||||||||||||||||
CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED) | ||||||||||||||||||||||||||||||||||
Consolidated | GE(a) | Financial Services (GE Capital) | ||||||||||||||||||||||||||||||||
Nine months ended September 30 | 2017 | 2016 | V% | 2017 | 2016 | V% | 2017 | 2016 | V% | |||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||||||||||||
Sales of goods and services | $ | 81,895 | $ | 80,156 | 2 | % | $ | 82,123 | $ | 80,490 | 2 | % | $ | 101 | $ | 88 | 15 | % | ||||||||||||||||
Other income | 2,611 | 3,385 | 2,578 | 3,359 | — | — | ||||||||||||||||||||||||||||
GE Capital earnings (loss) from continuing operations | — | — | (195 | ) | (1,466 | ) | — | — | ||||||||||||||||||||||||||
GE Capital revenues from services | 6,184 | 7,063 | — | — | 7,424 | 8,168 | ||||||||||||||||||||||||||||
Total revenues and other income | 90,691 | 90,604 | — | % | 84,506 | 82,382 | 3 | % | 7,525 | 8,256 | (9 | )% | ||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||||||
Cost of sales | 66,246 | 63,710 | 64,822 | 62,394 | 1,753 | 1,738 | ||||||||||||||||||||||||||||
Selling, general and administrative expenses | 13,649 | 13,833 | 12,656 | 12,094 | 1,358 | 2,238 | ||||||||||||||||||||||||||||
Interest and other financial charges | 3,545 | 4,023 | 1,918 | 1,490 | 2,373 | 3,006 | ||||||||||||||||||||||||||||
Investment contracts, insurance losses and | ||||||||||||||||||||||||||||||||||
insurance annuity benefits | 1,908 | 2,101 | — | — | 1,958 | 2,186 | ||||||||||||||||||||||||||||
Other costs and expenses(b) | 1,531 | 801 | 947 | — | 629 | 822 | ||||||||||||||||||||||||||||
Total costs and expenses | 86,879 | 84,467 | 3 | % | 80,344 | 75,977 | 6 | % | 8,070 | 9,990 | (19 | )% | ||||||||||||||||||||||
Earnings (loss) from continuing operations | ||||||||||||||||||||||||||||||||||
before income taxes | 3,812 | 6,137 | (38 | )% | 4,162 | 6,405 | (35 | )% | (545 | ) | (1,734 | ) | 69 | % | ||||||||||||||||||||
Benefit (provision) for income taxes | 303 | (302 | ) | (297 | ) | (1,034 | ) | 600 | 732 | |||||||||||||||||||||||||
Earnings (loss) from continuing operations | 4,115 | 5,835 | (29 | )% | 3,865 | 5,370 | (28 | )% | 55 | (1,002 | ) | F | ||||||||||||||||||||||
Earnings (loss) from discontinued | ||||||||||||||||||||||||||||||||||
operations, net of taxes | (490 | ) | (954 | ) | (497 | ) | (956 | ) | (494 | ) | (954 | ) | ||||||||||||||||||||||
Net earnings (loss) | 3,624 | 4,881 | (26 | )% | 3,368 | 4,414 | (24 | )% | (439 | ) | (1,956 | ) | 78 | % | ||||||||||||||||||||
Less net earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
noncontrolling interests | (231 | ) | (283 | ) | (236 | ) | (275 | ) | 5 | (8 | ) | |||||||||||||||||||||||
Net earnings (loss) attributable to the Company | 3,856 | 5,164 | (25 | )% | 3,604 | 4,689 | (23 | )% | (443 | ) | (1,948 | ) | 77 | % | ||||||||||||||||||||
Preferred stock dividends | (252 | ) | (474 | ) | — | — | (252 | ) | (474 | ) | ||||||||||||||||||||||||
Net earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
GE common shareowners | $ | 3,604 | $ | 4,689 | (23 | )% | $ | 3,604 | $ | 4,689 | (23 | )% | $ | (695 | ) | $ | (2,422 | ) | 71 | % | ||||||||||||||
Amounts attributable to GE common | ||||||||||||||||||||||||||||||||||
shareowners: | ||||||||||||||||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 4,115 | $ | 5,835 | (29 | )% | $ | 3,865 | $ | 5,370 | (28 | )% | $ | 55 | $ | (1,002 | ) | F | ||||||||||||||||
Less net earnings (loss) attributable | ||||||||||||||||||||||||||||||||||
to noncontrolling interests, continuing operations | (238 | ) | (285 | ) | (236 | ) | (275 | ) | (2 | ) | (10 | ) | ||||||||||||||||||||||
Earnings (loss) from continuing operations | ||||||||||||||||||||||||||||||||||
attributable to the Company | 4,352 | 6,120 | (29 | )% | 4,101 | 5,645 | (27 | )% | 57 | (992 | ) | F | ||||||||||||||||||||||
Preferred stock dividends | (252 | ) | (474 | ) | — | — | (252 | ) | (474 | ) | ||||||||||||||||||||||||
Earnings (loss) from continuing operations | ||||||||||||||||||||||||||||||||||
attributable to GE common shareowners | 4,101 | 5,645 | (27 | )% | 4,101 | 5,645 | (27 | )% | (195 | ) | (1,466 | ) | 87 | % | ||||||||||||||||||||
Earnings (loss) from discontinued | ||||||||||||||||||||||||||||||||||
operations, net of taxes | (490 | ) | (954 | ) | (497 | ) | (956 | ) | (494 | ) | (954 | ) | ||||||||||||||||||||||
Less net earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
noncontrolling interests, discontinued operations | 6 | 2 | — | — | 6 | 2 | ||||||||||||||||||||||||||||
Net earnings (loss) attributable to GE | ||||||||||||||||||||||||||||||||||
common shareowners | $ | 3,604 | $ | 4,689 | (23 | )% | $ | 3,604 | $ | 4,689 | (23 | )% | $ | (695 | ) | $ | (2,422 | ) | 71 | % | ||||||||||||||
Per-share amounts - earnings (loss) from | ||||||||||||||||||||||||||||||||||
continuing operations | ||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.47 | $ | 0.61 | (23 | )% | ||||||||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.47 | $ | 0.62 | (24 | )% | ||||||||||||||||||||||||||||
Per-share amounts - net earnings (loss) | ||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.41 | $ | 0.51 | (20 | )% | ||||||||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.41 | $ | 0.51 | (20 | )% | ||||||||||||||||||||||||||||
Total average equivalent shares | ||||||||||||||||||||||||||||||||||
Diluted | 8,774 | 9,201 | (5 | )% | ||||||||||||||||||||||||||||||
Basic | 8,689 | 9,096 | (4 | )% | ||||||||||||||||||||||||||||||
Dividends declared per common share | $ | 0.72 | $ | 0.69 | 4 | % |
(a) | Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis. |
(b) | GE amount represents a goodwill impairment charge recognized in the third quarter of 2017. |
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 2016 consolidated financial statements at www.ge.com/ar2016 for further information about consolidation matters.
5
GENERAL ELECTRIC COMPANY | ||||||||||||||||||||||
SUMMARY OF OPERATING SEGMENTS (UNAUDITED) | ||||||||||||||||||||||
Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||
(Dollars in millions) | 2017 | 2016 | V% | 2017 | 2016 | V% | ||||||||||||||||
Revenues(a) | ||||||||||||||||||||||
Power(b) | $ | 8,679 | $ | 8,995 | (4 | )% | $ | 26,569 | $ | 25,664 | 4 | % | ||||||||||
Renewable Energy | 2,905 | 2,770 | 5 | % | 7,406 | 6,533 | 13 | % | ||||||||||||||
Oil & Gas | 5,365 | 2,964 | 81 | % | 11,475 | 9,497 | 21 | % | ||||||||||||||
Aviation | 6,816 | 6,300 | 8 | % | 20,153 | 19,074 | 6 | % | ||||||||||||||
Healthcare | 4,724 | 4,482 | 5 | % | 13,714 | 13,190 | 4 | % | ||||||||||||||
Transportation | 1,074 | 1,249 | (14 | )% | 3,185 | 3,471 | (8 | )% | ||||||||||||||
Lighting(b) | 483 | 576 | (16 | )% | 1,442 | 4,239 | (66 | )% | ||||||||||||||
Total industrial segment revenues | 30,046 | 27,335 | 10 | % | 83,943 | 81,667 | 3 | % | ||||||||||||||
Capital | 2,397 | 2,600 | (8 | )% | 7,525 | 8,256 | (9 | )% | ||||||||||||||
Total segment revenues | 32,444 | 29,936 | 8 | % | 91,468 | 89,923 | 2 | % | ||||||||||||||
Corporate items and eliminations(a) | 1,028 | (670 | ) | (777 | ) | 681 | ||||||||||||||||
Consolidated revenues | $ | 33,472 | $ | 29,266 | 14 | % | $ | 90,691 | $ | 90,604 | — | % | ||||||||||
Segment profit (loss)(a) | ||||||||||||||||||||||
Power(b) | $ | 611 | $ | 1,259 | (51 | )% | $ | 2,526 | $ | 2,924 | (14 | )% | ||||||||||
Renewable Energy | 257 | 202 | 27 | % | 524 | 413 | 27 | % | ||||||||||||||
Oil & Gas(c) | (36 | ) | 353 | U | 325 | 981 | (67 | )% | ||||||||||||||
Aviation | 1,680 | 1,494 | 12 | % | 4,856 | 4,366 | 11 | % | ||||||||||||||
Healthcare | 820 | 717 | 14 | % | 2,289 | 2,130 | 7 | % | ||||||||||||||
Transportation | 276 | 309 | (11 | )% | 634 | 747 | (15 | )% | ||||||||||||||
Lighting(b) | 23 | (15 | ) | F | 43 | 196 | (78 | )% | ||||||||||||||
Total industrial segment profit | 3,630 | 4,320 | (16 | )% | 11,198 | 11,756 | (5 | )% | ||||||||||||||
Capital | 24 | 26 | (8 | )% | (195 | ) | (1,466 | ) | 87 | % | ||||||||||||
Total segment profit (loss) | 3,654 | 4,345 | (16 | )% | 11,003 | 10,290 | 7 | % | ||||||||||||||
Corporate items and eliminations(a) | (1,095 | ) | (1,524 | ) | (4,687 | ) | (2,120 | ) | ||||||||||||||
GE interest and other financial charges | (718 | ) | (483 | ) | (1,918 | ) | (1,490 | ) | ||||||||||||||
GE benefit (provision) for income taxes | 64 | (241 | ) | (297 | ) | (1,034 | ) | |||||||||||||||
Earnings (loss) from continuing operations | ||||||||||||||||||||||
attributable to GE common shareowners | 1,905 | 2,097 | (9 | )% | 4,101 | 5,645 | (27 | )% | ||||||||||||||
Earnings (loss) from discontinued operations, | ||||||||||||||||||||||
net of taxes | (106 | ) | (105 | ) | (1 | )% | (490 | ) | (954 | ) | 49 | % | ||||||||||
Less net earnings attributable to | ||||||||||||||||||||||
noncontrolling interests, discontinued operations | (1 | ) | (2 | ) | 6 | 2 | ||||||||||||||||
Earnings (loss) from discontinued operations, | ||||||||||||||||||||||
net of tax and noncontrolling interests | (105 | ) | (103 | ) | (2 | )% | (497 | ) | (956 | ) | 48 | % | ||||||||||
Consolidated net earnings (loss) | ||||||||||||||||||||||
attributable to GE common shareowners | $ | 1,800 | $ | 1,994 | (10 | )% | $ | 3,604 | $ | 4,689 | (23 | )% |
(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, income taxes, and preferred stock dividends 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, Aviation, Healthcare, Transportation and 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 is allocated based on each segment's relative net cost of operations. Total industrial segment revenues and profit include the sum of our seven industrial reporting segments without giving effect to the elimination of transactions among such segments. Total segment revenues and profit include the sum of our seven 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. |
(b) | Beginning in the third quarter of 2017, the Energy Connections business within the former Energy Connections & Lighting segment has been combined with the Power segment and presented as one reporting segment called Power. As a result of this combination, our GE Lighting and Current, powered by GE (Current) businesses, have been reported as a separate segment called Lighting. |
(c) | Oil & Gas segment profit (loss) includes $(267) million of restructuring and other charges in the three and nine months ended September 30, 2017. Excluding this amount, Oil & Gas operating profit was $231 million and $593 million in the three and nine months ended September 30, 2017, respectively. |
Amounts may not add due to rounding
6
GENERAL ELECTRIC COMPANY | ||||||||||||||||||||||||
CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED) | ||||||||||||||||||||||||
Consolidated | GE(a) | Financial Services (GE Capital) | ||||||||||||||||||||||
September 30, | December 31, | September 30, | December 31, | September 30, | December 31, | |||||||||||||||||||
(Dollars in billions) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Cash and marketable securities(b) | $ | 78.6 | $ | 92.4 | $ | 13.2 | $ | 10.7 | $ | 65.4 | $ | 81.8 | ||||||||||||
Receivables | 25.0 | 24.1 | 14.7 | 12.7 | — | — | ||||||||||||||||||
Inventories | 25.8 | 22.4 | 25.8 | 22.3 | 0.1 | 0.1 | ||||||||||||||||||
GE Capital financing receivables - net | 12.2 | 12.2 | — | — | 24.9 | 26.0 | ||||||||||||||||||
Property, plant & equipment - net | 54.1 | 50.5 | 23.7 | 19.1 | 31.3 | 32.2 | ||||||||||||||||||
Receivable from GE Capital (debt assumption) | — | — | 42.6 | 58.8 | — | — | ||||||||||||||||||
Investment in GE Capital | — | — | 20.9 | 24.7 | — | — | ||||||||||||||||||
Goodwill & intangible assets | 108.5 | 86.9 | 105.9 | 84.2 | 2.6 | 2.7 | ||||||||||||||||||
Contract assets | 29.8 | 25.2 | 29.8 | 25.2 | — | — | ||||||||||||||||||
Other assets | 34.8 | 35.0 | 20.3 | 18.7 | 23.8 | 25.4 | ||||||||||||||||||
Assets of businesses held for sale | 2.4 | 1.7 | 2.2 | 1.6 | — | — | ||||||||||||||||||
Assets of discontinued operations | 6.8 | 14.8 | — | — | 6.8 | 14.8 | ||||||||||||||||||
Total assets | $ | 378.0 | $ | 365.2 | $ | 299.1 | $ | 277.9 | $ | 154.9 | $ | 183.0 | ||||||||||||
Liabilities and equity | ||||||||||||||||||||||||
Borrowings(c) | $ | 136.4 | $ | 136.2 | $ | 83.8 | $ | 79.3 | $ | 97.5 | $ | 117.3 | ||||||||||||
Investment contracts, insurance liabilities and | ||||||||||||||||||||||||
insurance annuity benefits | 26.6 | 26.1 | — | — | 27.1 | 26.5 | ||||||||||||||||||
Non-current compensation and benefits | 42.4 | 43.8 | 41.4 | 42.8 | 1.0 | 1.0 | ||||||||||||||||||
Other liabilities | 73.6 | 73.8 | 75.9 | 74.9 | 7.3 | 9.0 | ||||||||||||||||||
Liabilities of businesses held for sale | 0.6 | 0.7 | 0.6 | 0.7 | — | — | ||||||||||||||||||
Liabilities of discontinued operations | 1.0 | 4.2 | — | — | 1.0 | 4.1 | ||||||||||||||||||
Redeemable noncontrolling interests | 3.4 | 3.0 | 3.4 | 3.0 | — | — | ||||||||||||||||||
GE shareowners' equity | 76.0 | 75.8 | 76.0 | 75.8 | 20.9 | 24.7 | ||||||||||||||||||
Noncontrolling interests | 18.0 | 1.7 | 17.8 | 1.4 | 0.2 | 0.3 | ||||||||||||||||||
Total liabilities and equity | $ | 378.0 | $ | 365.2 | $ | 299.1 | $ | 277.9 | $ | 154.9 | $ | 183.0 |
(a) | Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis. |
(b) | At September 30, 2017, GE Capital maintained liquidity sources of $32.5 billion that consisted of cash and equivalents of $27.0 billion, high-quality investments of $5.0 billion and cash and equivalents of $0.5 billion classified as assets of discontinued operations. Additionally, at September 30, 2017, GE has $20 billion of committed unused credit lines. Credit lines maintained at GE Company since December 2015, but can be drawn and lent to GE Capital upon request. |
(c) | GE Capital borrowings includes commercial paper of $5 billion for both periods ended September 30, 2017 and December 31, 2016. |
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 2016 consolidated financial statements at www.ge.com/ar2016 for further information about consolidation matters.
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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 operating and GE Capital earnings (loss) from continuing operations and EPS |
• | Industrial operating + Verticals earnings and EPS |
• | Industrial operating profit and operating profit margin (excluding certain items) |
• | Industrial segment organic revenues |
• | Industrial cash flows from operating activities (Industrial CFOA) and Industrial CFOA excluding deal taxes and GE Pension Plan funding |
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.
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INDUSTRIAL OPERATING AND GE CAPITAL EARNINGS (LOSS) FROM CONTINUING OPERATIONS AND EPS | |||||||||||
Three months ended September 30 | |||||||||||
(Dollars in millions; except per share amounts) | 2017 | 2016 | V% | ||||||||
Consolidated earnings from continuing operations attributable to GE common shareowners (GAAP) | $ | 1,905 | $ | 2,097 | (9 | )% | |||||
Non-operating pension cost | 570 | 511 | |||||||||
Tax effect on non-operating pension cost(a) | (199 | ) | (179 | ) | |||||||
Adjustment: non-operating pension cost (net of tax) | 371 | 332 | |||||||||
Operating earnings (Non-GAAP) | $ | 2,276 | $ | 2,429 | (6 | )% | |||||
Adjustment: GE Capital earnings (loss) from continuing operations attributable to GE common shareowners | 24 | 26 | |||||||||
Industrial operating earnings (Non-GAAP) | $ | 2,252 | $ | 2,404 | (6 | )% | |||||
Earnings (loss) per share (EPS) - diluted(b) | |||||||||||
Consolidated EPS from continuing operations attributable to GE common shareowners (GAAP) | $ | 0.22 | $ | 0.23 | (4 | )% | |||||
Adjustment: non-operating pension cost (net of tax) | 0.04 | 0.04 | |||||||||
Operating EPS (Non-GAAP) | $ | 0.26 | $ | 0.27 | (4 | )% | |||||
Adjustment: GE Capital EPS from continuing operations attributable to GE common shareowners (GAAP) | — | — | — | % | |||||||
Industrial operating EPS (Non-GAAP) | $ | 0.26 | $ | 0.27 | (4 | )% |
(a) | The tax effect on non-operating pension cost was calculated using a 35% U.S. federal statutory tax rate, based on its applicability to such cost. |
(b) | 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 cost 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 any curtailment gain or 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 cost 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 cost are necessarily indicative of the current or future cash flow requirements related to our pension plans. We 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 also believe that presenting operating earnings separately for our industrial businesses provides management and investors with useful information about the relative size of our industrial and financial services businesses in relation to the total company.
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INDUSTRIAL OPERATING + VERTICALS EARNINGS AND EPS | |||||||||||
Three months ended September 30 | |||||||||||
(Dollars in millions; except per share amounts) | 2017 | 2016 | V% | ||||||||
GE Capital earnings (loss) from continuing operations attributable to GE common shareowners (GAAP) | $ | 24 | $ | 26 | (8 | )% | |||||
Adjustment: GE Capital other continuing earnings (loss) (Other Capital)(a) | (275 | ) | (441 | ) | 38 | % | |||||
Verticals earnings(b) | $ | 299 | $ | 466 | (36 | )% | |||||
Industrial operating earnings (Non-GAAP) | 2,252 | 2,404 | (6 | )% | |||||||
Industrial operating earnings + Verticals earnings (Non-GAAP) | $ | 2,550 | $ | 2,870 | (11 | )% | |||||
Earnings (loss) per share (EPS) - diluted(c) | |||||||||||
GE Capital EPS from continuing operations attributable to GE common shareowners (GAAP) | — | — | — | % | |||||||
Adjustment: GE Capital other continuing EPS (Other Capital EPS) | (0.03 | ) | (0.05 | ) | |||||||
Verticals EPS | $ | 0.03 | $ | 0.05 | (40 | )% | |||||
Industrial operating EPS (Non-GAAP) | 0.26 | 0.27 | (4 | )% | |||||||
Industrial operating + Verticals EPS (Non-GAAP) | $ | 0.29 | $ | 0.32 | (9 | )% |
(a) | Includes interest on non-Verticals borrowings, restructuring costs and allocations of GE and GE Capital headquarters costs in excess of those allocated to the Verticals. |
(b) | Verticals include businesses expected to be retained (GECAS, Energy Financial Services, Industrial Finance, and run-off insurance activities), including allocated corporate after-tax costs of $25 million in the three months ended September 30, 2017 and 2016. |
(c) | Earnings (loss) 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.
INDUSTRIAL OPERATING PROFIT AND OPERATING PROFIT MARGIN (EXCLUDING CERTAIN ITEMS) | ||||||||
Three months ended September 30 | ||||||||
(Dollars in millions) | 2017 | 2016 | ||||||
Revenues | ||||||||
GE total revenues and other income | $ | 31,603 | $ | 27,172 | ||||
Less: GE Capital earnings (loss) from continuing operations | 24 | 26 | ||||||
GE revenues and other income excluding GE Capital earnings (loss) (Industrial revenues) (GAAP) | $ | 31,580 | $ | 27,146 | ||||
Less: gains on disposals | 1,897 | 208 | ||||||
Adjusted Industrial revenues (Non-GAAP) | $ | 29,682 | $ | 26,938 | ||||
Costs | ||||||||
GE total costs and expenses | $ | 29,903 | $ | 24,909 | ||||
Less: GE interest and other financial charges | 718 | 483 | ||||||
Industrial costs excluding interest and other financial charges (GAAP) | $ | 29,185 | $ | 24,426 | ||||
Less: non-operating pension cost | 570 | 511 | ||||||
Less: restructuring and other charges | 2,294 | 683 | ||||||
Less: noncontrolling interests | 140 | 76 | ||||||
Adjusted Industrial costs (Non-GAAP) | $ | 26,181 | $ | 23,156 | ||||
Industrial profit (GAAP) | $ | 2,394 | $ | 2,720 | ||||
Industrial margins (GAAP) | 7.6 | % | 10.0 | % | ||||
Industrial operating profit (Non-GAAP) | $ | 3,501 | $ | 3,782 | ||||
Industrial operating profit margins (Non-GAAP) | 11.8 | % | 14.0 | % |
We have presented our Industrial operating profit and operating profit margin excluding gains, non-operating pension cost, restructuring and other charges and noncontrolling interests. We believe that Industrial operating profit and operating profit margin adjusted for these items are meaningful measures because they increase the comparability of period-to-period results.
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INDUSTRIAL SEGMENT ORGANIC REVENUES | |||||||||||
Three months ended September 30 | |||||||||||
(Dollars in millions) | 2017 | 2016 | V% | ||||||||
Industrial segment revenues (GAAP) | $ | 30,046 | $ | 27,335 | 10 | % | |||||
Less adjustments: | |||||||||||
Acquisitions | 2,865 | 6 | |||||||||
Business dispositions | 51 | 57 | |||||||||
Currency exchange rates | 219 | — | |||||||||
Industrial segment organic revenues (Non-GAAP) | $ | 26,911 | $ | 27,272 | (1 | )% |
Organic revenue growth measures revenue growth 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) AND INDUSTRIAL CFOA EXCLUDING DEAL TAXES AND GE PENSION PLAN FUNDING | ||||||||||||||||||||||
Three months ended September 30 | Nine months ended September 30 | |||||||||||||||||||||
(Dollars in millions) | 2017 | 2016 | V% | 2017 | 2016 | V% | ||||||||||||||||
Cash from GE's operating activities (continuing operations), as reported (GAAP) | $ | 465 | $ | 7,575 | (94 | )% | $ | 4,050 | $ | 18,342 | (78 | )% | ||||||||||
Less: dividends from GE Capital | — | 5,050 | 4,016 | 16,050 | ||||||||||||||||||
Industrial CFOA (Non-GAAP) | $ | 465 | $ | 2,525 | (82 | )% | $ | 34 | $ | 2,292 | (99 | )% | ||||||||||
Adjustments: | ||||||||||||||||||||||
Deal taxes | 61 | $ | 376 | 112 | 1,076 | |||||||||||||||||
GE Pension Plan funding | 1,214 | $ | — | 1,431 | — | |||||||||||||||||
Industrial CFOA excluding deal taxes and GE Pension Plan funding (Non-GAAP) | $ | 1,740 | $ | 2,901 | (40 | )% | $ | 1,577 | $ | 3,368 | (53 | )% |
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 reflects the effects of intercompany transactions, which include, but are not limited to, the following: GE Capital working capital solutions to optimize GE cash management; GE Capital enabled GE industrial orders; aircraft engines, power equipment, renewable energy equipment and healthcare equipment manufactured by GE that are installed on GE Capital investments, including leased equipment; expenses related to parent-subsidiary pension plans; buildings and equipment leased between GE and GE Capital, including sale-leaseback transactions; information technology (IT) and other services sold to GE Capital by GE; 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. We also believe that investors may find it useful to compare Industrial CFOA excluding the effects of deal taxes paid related to the 2016 Appliances business sale, the 2017 Baker Hughes transaction and contributions to our GE Pension Plan. Management recognizes that these measures 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 and Industrial CFOA excluding deal-related taxes and GE Pension Plan contributions provides management and investors with useful measures 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 useful measures to supplement the reported GAAP CFOA measure.
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