GE - Earnings call transcript Q4 2018 | General Electric Company

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Operator

Good day, ladies and gentlemen and welcome to the General Electric Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. My name is Brandon and I'll be your conference facilitator today. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Steve Winoker Vice President of Investor Communications. sir. ahead go Please

Steve Winoker

good I'm welcome and joined CFO, Culp; and Quarter CEO GE's Earnings and Miller. Webcast. by Jamie morning Brandon to and Fourth Larry Thanks, our Chairman

you view forward we the are that best supplemental Before on statements the been earlier at we investor since looking making and based our on available like our that www.ge.com/investors. I'd to Please have the release, note and presentation world start, are press of as today. and our website are see we today today remind some of businesses them

As on call can And elements described to SEC in world I'll now, our filings over our website, changes. the as and Larry those the turn change

Larry Culp

Thank you, Steve. morning, And Good us. everyone. thank joining for you

to this can be at than But where going you understand rest longer bit much morning we for as are leave help time are and we're usual we a as assured, questions comments where going. end. to Our the we'll

our like welcoming I'd investors believe GE. had earth start by I'm over at relationships. impact decade. Steve's is he'll the the here him known same GE Steve for here going do to GE positive today I'm in reach, already on I've of because with sure, a and First, team. no I company GE's scale customer long-term forward. There a global you, talent for and brand, to

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for our right is profitable and shareholders. company value portfolio capable and I'm of share We creating have gaining of long-term the strategy confident the

let Then by stand of on providing to you take power. balance So outlook. with changes then we followed on frame will me quarter for and updates results, XXXX and an more the some the address before Q&A. comments metrics Jamie wrap company some help I'll through capital you I'll our where details the on outlook cover and the sheet,

start with Let's and because financially to but to far expect you come how perform important is want is the from the should expect outlook of place how know the investors a Simply how fundamental. to put much more reality. we

line businesses of and most today Healthcare. our Aviation We in have sight of good including a

in on organic For total, margins you with the do industrial portfolio our we operating so we'll and directionally flow. cash for free will and provide growth outlook

outlook more We detailed the near will give in you today. not but term a

the Power, we are For resetting baseline.

ownership work costs BHGE the takes flexibility stake contract incremental earnings story businesses respect and insights in key with of competitive benefits opportunities, speak I'll project team. to the this demonstrating last project customers the and in with business. advantage and our accelerated underlying us per changed June quarter. following Simply billion have we our delivering and found days. structure quarterly billion it's stake. every deals of seriousness portion $X about over with $X.X October. reviewing to meaningful to of and structure dividend in Power, the a we've enabling reduced balance what billion; spirit put and soon billion in are have strengths as Distributed shareholders. We the deeper In again we the strengthening leadership actions: more for starting retain with issues $X the year; and to With of to execution, our priorities We're were transaction providing closed near the the laid We respect This where improvement have as and market for We've for deleveraging Power and restructuring, and the all businesses time our respect We raising potential taken single to an new of net sale Wabtec important service decisions with retaining and we in legacy Wabtec understand We're and our paths digging particular. the our gaining $X.X beyond operations. BHGE and our is cash with and especially recognize our information the it, against Power. of cash into the executing long-term sheet and enhancing the the I Remember recut the to you XXX to out delevering, commercial

For roughly we targeted had billion of signed substantially all the asset completed sale $XX $XX billion proceeds. year, industrial or plan, which our in

through billion businesses. quarter taken corporate our cost in executed complete a $XX than billion of Today, $XXX this we consistent the our following WMC. capital of in investigation in for actions down GE for agreement We ServiceMax billion, of the in the the United strengthen our year. an We're pay and last Justice expect recorded of We States We've our penalty sales settle of quarter. to matter with was were that also principle sale XXXX. the value this halfway better. fourth from States announced $X.X billion at billion first to to quarter the actions which headquarters asset capital the we've Department $X in of reserve total the completed year to $X.X the In of or civil XXXX, year. reached we with million other $XX asset $X.X FIRREA total will more the bringing book United sale which have program, announced billion

We're savings. our Global accountable, more additional employees We that significant the and Growth managed the announced X,XXX begun to-date. directly see delayering confident those global third with were transferring include we over of recently headcount Organization. corporate of transferred have closer to reorganization operations the move to that segments that Good a around and with at previously headcount activities portion as or and agreement parties full-time activities and Genpact examples our to we will are activity

Power similar a in approach. followed changes Our

an We Energy. the the in amount additional Board have cost for process of business the bringing firm. the delayering cost creating appointment we by forward Board we at well combining move And renewables and $XXX with demand our to employee and perspective, business announced new having Software Paula decades. to I'm GE talent, headquarters strong that Insurance of great. matters And finally, will with for From The business something deeply of produce equity We're of to thinkers XXXX brought extensive as since our we savings our over generation a plan renewable majority be solar years start-up. will several domain time. for from week like GE's to and We're precipice impact. leaders as Directors independently business in integration deep customers remaining and in are and strengthening engaged fresh that of Power yesterday eyes billion at storage senior our Directors of this next-gen growing getting separate that and that last finding overhead they Board assets We're with offering bringing proven end-to-end Energy into And are into digital our will perspectives committee audit joined now and we with GE's on DNA governance announced the million domain out expect relationships. an a find the expect a headquarter power that Our experience the grid continues they capital We independent digital We've operate announced globally. raise an team. that of both functions. also over grow expertise the hardware leaders of external Renewable businesses expertise industries. headquarter's spirit, and ability $X.X new tender the as distribute that levels are combine and grid, operated Reynolds IoT as a We're audit to all from and the the we XXX our already units, announced customer entrepreneurial the

say, fame friend, more a my work Collins "good-to-great" As have start. much to we do. it's But might of Jim

more now Number one, start share it. how will I've managing earnings and let and call, is on corporate me so with can with me we around you, with So talked what how often for do that we business Those how later. and reviews how operational CEO this on just we our leaders month bring my the do do foremost We the about we for this preparing were showed how first focused the tightly team quarter job in first Preparing performance. operating including the and turned better, call. for happened. first get the we do reviews then that explain than holding

and get material Let are volume, example. operating to on productivity me Board of I into and much No of marketing room. then more more. P&L base and like profit. and then, high-level expenses operating which labor focused course, The on all now give understanding cost mix, and the R&D detail, We an operating revenue, critical same G&A, saw contribution you price, the margin reviews Previous and framing overhead and improving business. sales

center of on is do. second at focus The customer a the putting our all we

East, Europe about our from that work performance. time spent few the aligned customer the our and rather how We're with that how When and in I've the internally, ask our ourselves issues measure I past perspectives we there. of than Middle backwards measure customers learned measures in our with often understand the about here is and Take Over quality, experiences do we quality. our they I the which I've customers quality way what China, months, hear us. not always value US. cost so shifting own

Deleveraging At GE no committed and Power. company businesses areas our of priority mentioned is starting strengthening the and a like level, the the attention with importance good focus area we a company that but list. to that furthest. seen priorities. to the matter move so we've that's balance need has address the on sheet now more fewer impactful my third priorities ever ambition some to we I'd like I them things thing two can earlier: high are I've to the of of mostly having The more most, and other

$X.XX. ended and year We results. EPS flow the of $X.XX of $X.X financial billion. high-level industrial free of with EPS cash our adjusted GAAP First, negative

X% service X%. billion Our and backlog stands year-on-year at $XX billion up at up with up X%; at billion $XXX equipment $XXX

For the cash was fourth quarter, our flow industrial $X.X free billion.

moment. the the EPS this $X.XX. of flow impacted Jamie adjusted strong Power, a in cash cash were EPS all through We negatively in and take businesses. by will the generation we GAAP more weakness delivered was other encouraged $X.XX While by detail of in in you

balance the to sheet. Next

with businesses targeting stated are I've we sets We and needs GE than our As debt Capital. different all In the capital distinct debt we obligations Industrial structures and both X.Xx therefore two a our know of reducing financing years. next at but analyze already, few different own well are across full are that their levels shareholders these ratio net over debt-to-EBITDA we and leverage industrial, less of separately. GE

goal. can sources and Healthcare, Our BHGE of provide $XX transportation roughly that separations billion toward

to team Our company continues separation for Healthcare progressing that well. and prepare very is public

on business. to We expect to sell and proceeds amended XX% of Healthcare down with terms our just the cash the up Wabtec I will merger and our GE industrial to Transportation under in funding talked monetize remains cash we building earlier to increase ownership our time XX% took Overall billion. position BHGE lines we $XX.X liquidity an actions, billion $XX with orderly in of remaining and of the over November. strong in our manner

a ended In no with capital's targeting of materially goal XXXX, GECAS. Capital debt-to-equity clear, in this Now are in more plans our $XX ratio by half by assets including $XX to billion billion at sell we of on book line balance $XXX sales billion we and than down of $XX program. disposition with business. have to our shrink billion $XX external asset liquidity a the of be XXXX. year than billion less To paid executed we capital, asset debt Xx we

approximately with shortly. $X listened Power. XXXX. front parent then be release. We've contribute available to you will detail line we're preparing on peers, on to finally in cover disclosures with in of insurance expect Jamie which that and increased billion XX-K And our We support some of the will

one. underperformance Let them me we're to and our today the causes as of with root taking I each share the actions see address you

range to last secular XX for said, new the the to the the I as and the in embrace First Recent to gigawatts XX data were capacity pressures late quarter of cyclical the in generating suggests settling we business. foreseeable market realities is that for future.

this an electrification our We resize believe now. cost we expenses chains gas to our role to our reality global have to important supply will and capital structure, continue play in but new

As appropriate rate. business, Embracing by headcount in orders outlook, a in grounded footprint billion the our backlog exiting base the $XXX more a of $X result our rather by reduced revenue yet means and of reality cost a in last $XX consolidated year, took or won. XX,XXX one we new million lower out XX% market XX% is run hope the reality that than billion of further not at

programs. the Second water this legal past driven project year. of a There's of mark acquisition. we effects receivables Power and long-term by nonoperational These and the number expect settlements Alstom of high factoring faces include in also regard headwinds erosion this other runoff legacy a the and principally

effects should down years, few substantially. next the Over come these

Power how daily better. sell make improved better service our we means we to Third, and Running products. in execute management need

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cost. we customer, who and the long-term to Now, and now economic are leader under our face identify with more responsible customer execution for best one of XXX and coordinating expertise is organization one cost people, to project and domain experienced the present GE. for negotiations contracts assessments put equipment risks. sales both owning have negotiations. contract deep We performed better We the accountable answer the existing risk for on We

and to a utilization assessment XXX We the identify also similar CSA performed risk. on price contracts

and the issues from team's This Power's root Fixing these take confident will to and commitments proactively changes are but making start. our processes for to will results dedication more but work be come. Power those the We address realistic time have in their set changes, I'm underwriting operations encouraged hard is returns by commercial our the overhauled to cause. time I'm daily we're to reflected we take our and will financial turn that in improving at

the by they They're us can how around customers want with world, I'm us. struck rooting met really want they been They and know succeed I've As for their help. sentiment. to to

now detailed in summary, our Jamie action we to So the sheet starting results. our we're Power. you, on will action, take with businesses and laid priorities deleveraging you balance the taking financial taking strengthening out through

Jamie Miller

orders with and X% Transportation. driven driven a services Larry. with commercial X% Thanks. orders strength services engines renewables Healthcare X% reported by I'll organically. down reported by were in revenues quarter Revenues particular were in $XX.X Equipment and profit the Aviation industrial X% were driven The renewables. start and XXX summary. X% organically X% Orders and billion Oil fourth Power organic X% X%, basis were in basis year-over-year organically X.X% reported down aviation the up were up up equipment up segment quarter organically and XX% Gas up revenues by margins and points on significant Industrial were grew declines Renewables. & organically. up and

in strong XX% profit mostly points offset Baker down all GE was Healthcare delivering Hughes quarter For profit basis the Power. by Industrial growth down XX margins the Aviation, were and year, organically. with

$X.XX was EPS another year Continuing Starting EPS side $X.XX, I'll related had outstanding includes engines. expanding GAAP margins Power. to quarter continuing sale right page. walk shipping the Aviation $X.XX over of from share LEAP GAAP. Net EPS year on earnings from Capital. X,XXX was had Distributed the from total and and losses EPS continuing adjusted Specifically EPS $X.XX GAAP the principally the of while was gains adjusted which was operations discontinued to of $X.XX. per GE and we

fourth our the charge quarter, related the in charge incremental finalized an quarter during recall we Power best booked billion quarter, $XX time. the following based at And analysis will estimate Power booked we you the that $XX and for our on million third to As goodwill charge. impairment third

our a restructuring. We to stated of continue in principally and including business Corporate charges transaction Hydro of items, $X.XX of Power with these charge also at expenses resize impact. Combined $X.XX of goodwill and million line at charges On Hughes incurred and $XX share restructuring charges we were recorded development for GE's impairment business. other to those $X.XX as we in Baker related segments our renewables plan our $X.XX

updated negative a of we transition of the the tax of Lastly, estimate from we tax law. the enactment US our realized $X.XX aspects and impact reform other as new

reform issued accrual effects guidance on reflects Our current through the of based enactment tax year-end.

Excluding in these items EPS adjusted $X.XX was the quarter.

progress Income Moving the of cash primarily $X.X a and and volume driven to capital flow was services and Contract reduced $X.X as a consumption assets renewables a for and Hughes primarily from billion higher collections were positive CapEx inventory free of we fourth in quarter source than aviation collections. prior the cash lower gross or spent higher by billion over traffic for industrial higher cash, totaled grew was from progress saw driven we billion utilization strong lower quarter $XXX billion $X ex-Baker billion. $XXX in billion $X.X million $X year billings by million about in adjusted $X.X amortization parts the PTC-driven as quarter, depreciation air GE. strong on we million $XXX of orders. fleet by Working spare

the the nonoperational headwinds more Power issues. with free market volume the flow and and billion quarter billion of And as with execution as year, industrial restructuring to you $X.X provide to generated for typical we in well of businesses. detail, for ended year is adjusted the we our higher in a For fourth combination as used cash free due year $X.X flow cash costs,

Next, I'll liquidity. cover

to of Hughes total recall dividends industrial as cash Baker that paid $X.XX We will had proceeds is decreasing bank XXXX, we quarter the side in We free Care to cash we with in of the Dis taxes previously. and industrial assumed the of net billion GE. And the Wabtec Power. to cash of billion per of we We of industrial $X redemption you'll billion principally of to Capital Earlier Value-Based $X.X disposition billion generated operate $XX.X rights more share balance. billion was talked GE $X.X the cash year, the entities quarter billion. in These the see had about $XX On which together billion our year, the quarter. of GE fourth left the gets about can in Industrial of Solutions, than excluding which the related loss. walk the of options, GE $X.X And $X.X with for page, completed per ended quarter. plan, call in which quarter, the their from dividend principal billion at debt of and pension a and fourth third first the preserve the $X Alstom and that flow settled we JV for cash fund XXXX. exercised you

of the negatively be quarter $XXX and an about of consolidation impacted of the So in XXX% financials for headwind million fourth XXXX. us will income

year of fourth from used translation hedge $XXX Hughes of FX higher across our derivative of secondary goal for short buyback other balance cash. $X.X million funding billion address quarter. settlements including These some with $XX.X in declined a risks reliance Running buybacks million year; ownership reduce stock for primarily approximately as stake 'XX with mitigate to XXX of in commercial with to the on XX in will cash needs. $XX.X of quarter about of our 'XX. Baker Hughes actions to our million direct data items shares quarter as dollar-denominated of These during completed XX.X% and us We line totaled inter-quarter the non-US number million GE with includes on first Aviation GE our in bringing funding half credit funded the well business Baker funding, billion $XXX also a investments the short-term we were fourth combined other a to needs the a offering utilization with of in $X.X fourth Baker cash peak portfolio; that cash our In proceeds. GE The billion shares Hughes $XXX the help and of facilities. million paper short-term from the billion

would our funding of expect expect needs. facilities execute end to dispositions commercial to to and a to these the GE at intra-quarter excess Capital paper, at XXXX, outstanding we continue to of At needs lines credit year, use $X in the we decline As efficiently mix cash to and fund they was any adverse don't ratings of we paper and commercial revolving clauses. had financial facilities triggers time These $XX billion or and with change committed have are access drawn. zero covenants billion credit material available draw

downgraded collateral program. stable was transition of rating postings BBB+ impact credit from early two and $XX our to This less has in manageable smooth outlook know, quarter. been than with a you fourth with paper million to A As a Tier commercial a

rating in continue target range. single the sustainable We A to a

financial level target I'll our rating financial than single a our Deleveraging have We significant net you policy GE committed and A X.Xx of take through Now, and sources both with dividend remain peers. ultimately to Capital and of level we leverage. a is and a debt-to-EBITDA achieve our priority less in policy to a line goals. leverage GE

differently with Larry structure capital separately. and analyze needs and their these businesses therefore leverage mentioned, view we different balance we As sheets

Our about reminder we're toward less as the industrial we to basis, a Industrial leverage businesses X.Xx talking end cash. Measured leases debt than significant pensions, XXXX this portion the adjusted XXXX by GE when speak the a GE for and operating on $XX at and and debt, billion. goal about preferred net We was net end of debt-to-EBITDA. for goal of debt stock is net progress this plan make of of

from debt to delever and we stake billion stake These Hughes billion in debt over billion will expect used of Healthcare the proceeds up XX% our of XXX% by to derisk to under sources Healthcare, of of company. part and in used monetization These GE transportation. more be to remaining net of in of include cash sources $XX GE have reducing $X have Baker reduce out the As $XX to significant billion of and paper. levels $XX billion Capital GE GE than capital of to contribute parent At repaying Capital to we billion end debt part the from of Xx debt began transferred quarter billion. by the to The XXXX. Capital reduce debt the a ratio including ended to and GE our plan our XXXX $XX adequate just the also of industrial than our more with $XX to while maintain and total billion pension plans can look and that assets Capital, billion years, there. with couple commercial a we of transfer $XX measure equity next sources less roughly to than GE $XX in be $XXX

made of the leverage XXXX including billion year, X.X $XX $XX For GE from Capital Capital to billion down we ended of significant down debt, GE progress external reducing paying zero. taking $X turns paper with liquidity. by at commercial billion

Over from GE the $XX capital including XXXX from to most have Capital down $XX the transferred billion expect sales, cash we We'll the from sources billion of support our additional completing of asset in and of generate next reduction to plan. GE. two debt years, from asset GE cash pay

of We we until an continue XXXX. to to businesses principle expeditiously. per disclosed. have XXXX new will Capital don't And debt of capital down now reached about that conclude XXXX, maturities WMC to our as billion year agreement $X $XX GE debt expect and contribute and pay previously to in insurance scheduled billion We issue on in expect

ensuring have we levels contributions capital our of risk-based billion $X principal capital billion adequate portfolio. the today approximately planning and XXXX. are in Capital in GE for WMC current This $X.X includes announced to for agreement We

asset options a we requirements insurance combination support. strategic capital GE any or Capital liquidity anticipate and through sales, Going funding of GE parent earnings, forward,

to While we have more the to we do, in progress balance make continue work sheet. strengthening

Power Next XX% Gas XX%. down orders quarter. on Power. the in down Orders were were Systems

orders We $X the billion consistent were backlog, revenue This XX%. up Gas was down market with a Power Power ended outlook was year, Power was to down XX gigawatt down down Power year Systems Steam a were also For foreseeable orders for our year-over-year. Services down Gas orders grid XX XX%. the which is XX%. for revenues were Systems XX% Services were XX%. XX% X% down the with Power future. revenue orders were the XX%. down year. and for

we the revenue. $XXX charges which quarter, contracts, our related CSA During million impacts of took to

was Excluding these on volume Europe and XX%. charges was revenue grid Power Steam Services XX% and down flat. down was lower revenue America's

We some million Moving geographies utilization to and in is updated flat, and The the in our contracts segment units $XXX reflect our have utilization total fourth on seen of to profit. these pressure our while a performed we CSA some in market assumptions loss quarter. the pricing reviews normal revised book ongoing and relative dynamics some in on we to areas. outlook lower

In normal stage-one of standards million including in included mentioned. cost of cost updates, that to previously updates which our our issue addition, charges we impact the had standard $XXX the the expected. blade as This resulted I

turbine as project of opportunity year-over-year also well to and impacted to few the own significant Alstom issues. Similar the and partner execution buyout of a profit down resulting liquidated $XXX execution had In our see Grid costs the gas in Systems addition, overall, heavy significant we incurred share execution. the by experience over next related about results was third million see negatively market damages Gas of we items as to Power projects. to impact flat the on the quarter, These years issues continue is Power's improve JV. duty we

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LEAP four spare XX% from spares on we total, on year, operating last by utilization shipped year-over-year. basis XX% we almost profit expects profit you well of of up and expanded XXX narrow-body up volumes, in higher negative XX up XX% in to XX%. consumption engines. strong margins behind over And the shipped very with was more and the in billion driven win the XX.X% shipments the X,XXX mix are Specifically, quarter we engine deliveries Segment shipped parts win continues $X.X and We're traffic. Despite year. back quarter and AXXXneo business segment still and revenue with engines fourth to higher a XXX operating XXX The LEAP XXX be XX% the add CXXX. of Utilization to schedule compared Comac Boeing perform rates on MAX LEAP XX% the but mid-XXXX. engines weeks the Services LEAP basis by for points air points year. LEAP family productivity units this rate quarter by for price about rate rate grew higher when and from XX% on fleet improved in the

to of continue and LEAP ahead we've curve improve overall of the will on initially out the The out cost position of years, around more are cost the XX% laid engine taken than for the two the over last program. learning the break We XXXX. and program the even

to orders for In aviation successfully to the military points and points transparency more up shipped were some provide onshore XX% on prior bookings driven equipment offsetting through business gigawatts of higher XXXX pressure fourth billion onshore for R&D basis delays driven the execution X volume. orders XXX of X.X basis and and the and X% repowering headwind changing consolidation share. a seeing book XX% cycle, XX% cash David that tailwinds for $XX Segment this began up strong some we continue wind quarter units. the is mix the in services, and consolidating see company-funded and renewables X% we wind impacts year these in burn drag basis to in margin of projects seen the the and mainly chain higher business to mixing additional product margin Recall in another reduction hydro deal up Alstom XXX I'll continued while renewables, and pricing had a impact about supply and Now, was team. year repower new offshore down loss fully narrow-body of negative flow of the with for mainly strong XXX strong In transition those tariffs, up The shipments presented profit engine growth XX% points. by in saw on margin including summary, the losses Revenues projects as were fourth time and quarter. reserves services gained we basis them by legacy strong resulted versus and approximately from projects. year we're XX% CFMXX was points in entities driven quarter. on megawatts XXX damages pricing the and both LEAP up and has XX% cash spend. the and Alstom unit We the of and is onshore from through $X.X handful liquidated improving gigawatts complicated price, aftermarket the The of cost market. PTC quarter we continue from in we're and of down in at on working million negative The a of mitigate some favorable we to actions. adverse The by

basis and Organic productivity basis costs organically, on X% higher by points organically. Sciences basis Life separation and expanding XX price points Systems XXX organically, profit investment. was billion X% about Revenue we partially very in organically. incurred X% up $X.X up in XXXX. was orders Profit reported a $X.X XX.X% Systems inflation, which and down what organically. up XX%. by expected $X.X offset as reported of X% fourth was comping with driven a program were On orders quarter a X% XX%. up Segment was were Sciences of XX% was which billion in up for were and Healthcare and product organically Life line cost orders revenue XXXX. bioprocess up we grew preparation basis, Healthcare billion Healthcare, XX% were was a growth organically For excluded volume strong margin

As team the for Healthcare closed separation, continues out prepare solid year. to a they

Baker Brian its and gas. morning oil released following their to results call today Moving and Lorenzo will hold this earnings investors financial with GE and Hughes ours.

to pending agreement Next Transportation and Last Justice Since spoke signed an our proceeds of Industrial American merger last we Current October, down we Partners Department its sell Wabtec for to GE XX% in terms approximately cash Transportation plan. closed Lighting. approximately in also as its between increase increased sell approximately resulting billion review from GE has support we XX% our of further stake the and to week, the announced Wabtec. deleveraging stake. to we $X.X amended will and in transaction

transactions subject still cash closing We close and billion XXXX in Wabtec will both early in to receive from closing conditions. $X.X expected at are to customary

We I'll continuing was loss our GE income our $XX charge million runoff Adjusted tax net Net resulted million of GAAP after-tax annual reserves. increase million. adjustment million. Capital. including of portfolio, $XX cover a in in testing $XXX Finally, recognition in reform to which the an loss operations from continuing about completed $XX negative was insurance quarter,

related the policy billion. testing GAAP book. of our assumptions being As rate part two to funding. that and the improvement to reserve the changes and Recall The $X.X unlocked drivers negative a morbidity billion our of $X.X test, drives offset benefit impact by of assumptions updated statutory we key not largest future discount

mid-to-late required expect with We plan, to in statutory we first the to XXXX. approximately funding of billion of consistent our quarter in conclude funding continue February statutory and expect testing the $X existing insurance

premium our runoff are increased With mid-to-late book obligations, related disclosures our clarify items lapse our and to of back it insurance I'll focus. to that sensitivities. in be this a We'll related provide mortality increases and of management released plan board to include include range managing morbidity We over and to enhanced new our which profile in to insurance information turn the to Larry. and additional wide with from expertise rates, assumptions XX-K, February. book we further will portfolio To

Larry Culp

Jamie, thank you.

our today like of after you that our what I'm months, with and a I'd views forward. we four have you our give XXXX information nearly moving the have GE strategy to to all now challenges seeing sense by hopefully, soon. on at and for strengths, come better So more

organic in in Healthcare. low down up to on slightly of flat the a will down We continued significant market industrial be digits to ramp and expect back in mid-single to and Aviation Power revenue strength a growth renewables be in XXXX.

industrial to cash we renewables face on more such margins We operating reversing Corporate also we both at the headwinds expect as expect cash restructuring free in progress expand. spend will to and Power. On PTC cycle flow, our and operating

chain and pension and engine to We management separation. supply we Healthcare financing Capital to GE business Capital, in headway cash nonrecurring XXXX MUFG as and have the will significant flow cash restructuring we while for the commitments XX% program our particularly and of for costs contributions a 'XX. secured structural issues billion. Power. see create grow transitioning meaningfully These the lessen public with a In GE commercial settlements number our and of and anticipate which and to flow legal in XXXX we that revenues substantially investments related benefits drag approximately free simultaneously the to stream service reducing in a but factoring addition, on in revenue in our in include In recurring largely our businesses XXXX of to XX% from and preparation Alstom make aviation, XXXX daily stronger XXXX the legacy $XX addressing backlog, of realizing with

changes with pre-LEAP levels margin new periods a order book. despite mix consistent with maintaining are We healthy

PTC cash as to growth revenue and the as see in strong cycle organic this in transition we to those growth result against in The renewables. year, a mind, profit to which margins progress revenue will in low book last and build. begin We contributed these reversing is contracts. growth factory in year. range single-digit In onshore business growth. With wind, through Healthcare, XXXX, and high a we expect double-digit similar progress single-digit see performance revenue production of cycle That coming we

product However, forward. our we level the of declines our and see going today to our for price XXXX is efforts as reduction continues evolve. This moderating within baseline cost plan

will near respect cash full year. more in the for outlook update you with As flow situation the we term the the around conviction to develop we of Power,

my are the Aviation that healthy is for So XXXX more through stable cycle. and businesses the of growing. moving Renewables PTC is message Healthcare and

We are stronger. very progress is is shrinking. XXXX in much still working on Power a company and but capital the becoming is work

momentum, we're the making value. more How the is the process As shareholder the but How here, sustainability I'm how important about strengthen create to enduring this to across we'll but results proud I the fixing I for earlier, of how for that understanding cause. is processes about our up open and and said fundamental. root it ensure see the problems sake run. With much is your to to at GE of questions. is changes long not company far

Operator

[Operator Nigel from Instructions] Wolfe Research, have And we Coe.

Nigel Coe

morning. Thanks. Good

Larry Culp

morning, Good Nigel.

Nigel Coe

on looking $XX a will lot analysts, defined Is pieces an process. on picked questions want I via to Morning. monetize to billion an now Lots or just Larry. are that moving my your sounds Healthcare you're by of but questions. It on. putting of there defined, pretty looks like It sure I up plans XX% still be other start IPO-type like mean, now are debts, pension of that some I'm process?

Larry Culp

case a preparation. are we this today you think The talked as don't we Karyn here. spending I to proud well separation cash cycles. very time and continues a Well, with record a and flotation. top obviously the along and of as money are of did and we've Nigel that with last 'XX team to be we line share amount is about be is for significant frame doing the going We're what of have think se We respect in through in strong but the preparation today. earnings plan to team that Very that a business strong a performance to resilient year is the performer per

is the So plan. that

Nigel Coe

one pricing Okay. and trading And lots didn't improvement. you few in be, thing, One touch may for been a the of on your the for excellence of precedent share. detail would opportunities has you been pricing then and for price my last lot follow-on GE really gave you've doing past was on of be and what market months

pricing terms I'm the what improving thoughts your realization So in are forward? curious, of just going

Larry Culp

with in book service remarks. on into both Power, the frequently. But hear our share is looking -- speaks not that we're us that on want doing prepared to didn't external of communicate low I the I Power We reality. right? want bid, to we sell new hear and overstay from to for is more that you get forgive equipment And that Nigel, know to both We to talk the the of acutely renewables we to you value so do for if we're share line what share within we think basically those I opportunities we push be productivity, sake. a at realities, some pressures. that in of of light pricing, these last around in labor project value we have are when very when Healthcare way profitable time, we good night about And can the got technology. We price able hard that aware our want that with the word it is respect we're frankly a and particularly detail. material us example to same market margins in think us, didn't businesses recognition. maintain just market to where can't frankly be in are really to our smarter an and internal and welcome that refer

Jamie Miller

half. chains becomes more expect, dynamic stretched as as Aviation as Larry at talked we're is mentioned. it mentioned, bit in and well moderate moving color unbalanced. than was Larry through you and about. as on we bids second supply It pressure cycle. add are renewables. total slightly would we just a Power new move up Healthcare as that just The with running pressure moderating PTC bit that as Larry the actually seeing more enhanced the primarily numbers And in flat. Orders and relatively price on throughout Nigel, little the there that which more strongly in was projects we're pricing discipline year really to was little at seeing for the numbers. are renewables, Power year are the and to that more a respect the In And up as and the

Operator

Please Steve ahead. have Tusa. go And from JPMorgan, we

Steve Tusa

good morning. Hey,

about a cash mentioned some provide In free us so maybe of think billion on addition, you nonrecurring much before on restructuring other I from that? how the just guess color dynamics, Can some I a, on said divestitures. color or more flow you mentioned PTC you the $X So headwind, some cash, bit Jamie headwind investments. give of

from obviously you maybe $X.X XXXX? help be the with of it's that a rough sounds So in Because just a did like going down. to bridge us bit

Jamie Miller

Yes.

rounding So through quarter of really fourth XXXX those I through our out in of address we performance of don't can you the walking the components first and questions. talk why terms some

XXXX, you if changes, walk obviously for the So really we had earnings.

year working was for flow. also free positive. cash zero was basically impact the capital, had which quarter of We $X.X billion Fourth

flat. basically volumes As with was this quarter. large through coming Contract we expected assets

Steve Tusa

headwinds? the Hey, year? can I obviously, know it on Is you sorry. question. see headwinds way And slide. the Capital the the as that's just there's of I that cash some like guess to just ask including size wanted an of I'm it that organization those a to simple of sounds curious -- next GE you as color be like Larry give generate maybe I Will will to lot billion. us had $X.X some down. can talked about.

Larry Culp

operational I communicate the simple today the nonrecurring. both what pressures to Yeah, to And see think that Steve. we is is, we're question are answer and trying going

regard. in We that walk going can you we be take are shortly through back to a detailed when

perspective, additional see to on restructuring likely generate from 'XX returns. in is cash in the be work go good given here that number put stronger the opportunities and we a are businesses. going acknowledging to 'XX PTC an performance to worth to think lot is we money I from a and perspective real operating of in dynamic. And was deep of renewables Clearly where

issues. events We some nonrecurring these also have or of

are program. decisions the supply chain them on move of like financing the Some policy

got today relative have legacy real the commitments come of out we're some thereafter we've that those IPO. of are issues think in better cost sight that do hook I and these or of 'XX on on in cash Alstom we abate line Healthcare that the

flow toward got with that to more we come operating performance 'XX in eye a I 'XX and details non-operating think and we soon. stronger work pressures in 'XX headline again, cash think the finished know through we an with strongly. So and is, We some

Steve Tusa

how generating? do how much XXXX and an earn ongoing what generation will perspective, Great. And you be expect from GE in much they cash to cash

Larry Culp

prepared we'll a and I that to have be ago as in get both specifics my do down everything to said when those moment back into locked you. then Steve, We'll remarks we soon.

Operator

we From Sprague have Vertical Jeffrey Research

Jeffrey Sprague

morning, Good everyone. you. Thank

Jamie Miller

Morning, Jeff.

Jeffrey Sprague

Yeah. Two me. from

the particular. exit for you the a on, in company? shrink thinking Larry, the of of losing term, potential which interested exit of kind term near Just exiting better particularly Can that with create some of timing stake. example, Do cash as the kind would split-off equity-friendly sense exit? share foresee lack you Kind a of, seems about give flow the the for the And XX% some view of, you remaining also stress organization. of, it you us for see the what then you remaining piece the that on count Healthcare like how might

Larry Culp

view I'd everything shareholder-friendly, Steve, do of to that we we want right? that do. mean, value I shareholder is create long-term that me strong you to other the Well we like a know, we here think that everything effect and with take from seeing in cumulative roles

is with XXXX. we're I on Timing an today think to here in IPO can respect that Healthcare the confirm path still TBD. is toward what we

billion to date mean $XX I go have you With about have for of today as in Like senior we I pool of don't respect a think part a Hughes, don't to. me talked on to clarity. have just I but we'll we date. that options time, So Baker that prom. my more

share want we a we our We us we think value again, I a of but approached is stake company. by manner, that there with orderly are various that the is to that again stake to think shares. timetable in don't And dispose to reiterate today interest shareholders. to high per have certainly in have an se you which is who to sell an in for probability our folks, for creation our view conducive

Jeffrey Sprague

relates adverse and what would onto it be Thanks. to And insurance unrelated date that from tacked than just have Steve Jamie now, going not instead follow-up, called about but review. if as those think that even and so as I've build? indicate some needs or statutory affect statutory review, Is is a near-term about as to it the comment if would reserve follow-up. your prom tail, of right there you're speak a worse been you're through Larry funding outcome I didn't we the in what that to the planning

Jamie Miller

referring was really funding the I what statutory was Jeff the to calculation that Well, the that, GAAP it's not statutory there needs. drives

the We of process. in middle are right that

to three entities contribute $X continue over that about process the to what four at billion is We point to the But to conclude We'll XXXX. insurance next expect in that we expect. weeks. this

Larry Culp

about Sorry that Jeff.

Jeffrey Sprague

Thanks.

Operator

Julian have we Mitchell. Barclays, From

Julian Mitchell

understand, you I sense underlying Morning. much XXXX if could on minus color out give million in point, separation projects and forward-looking Maybe How or $XXX of, financial both conditions those give question at And the to overruns so gas numbers on? to of that non-gas sort the free reported us Power? too you're as EBIT at reticent for any charges of two $X.X characterize you a would figures the you pieces? if if look but look us of and uncovered as the also of two you and first separation color of billion. loss the the give What items, perhaps Power. maybe cash strip that to on execution of has each within

Larry Culp

Sure, sure.

$X.X operating the Let We've rhythms. is progress service the me if very marketplace. that's million did we a backlog. in just what side would I that But asset right? work given quarter $XX on a again the got and in the on establishing much say things, that take We start appropriate book we new think charge billion in a team new billion fourth a contract with of this do $XXX about and see we

to we're pricing though I around the think here. execution relative encouraged

see you productivity here of in way still you year's we that Transitioning field at there's of to incomplete. Alstom get combined from part folks that's a the and from But end. We good are volume again, will need that organizations the that operating the work that compensated. have margin. changed loss But is here them, if the to bit post

here lower to encouraged we We sure online. we dealing are share the profitable There we back and the improve some in But we are clearly equipment, the points that of we focused here in by brought around of took share. the market project of US execution half. make again, want have demand a to know lot the way in projects on with $XXX just charges book million in these

projects. think in vintages, I the But progress. 'XX on in we look you margins our much class the of by that the see terms progress that's when at a we're those work very post encouraged underwriting

Power, again it the cost getting I part respect to think shared but better the P&L-by-P&L. the are we also of the in of is We a visibility of in underlying reduction. with change businesses prepared that structure some remarks on

of combining talk we So equipment gas, about services then have and portfolio. our Power we're the rest we

up that Power manage that to profit Jamie we're help line own improvement all grid, bottoms But cost the of on going P&L's all. we from meaningful of Conversion accordingly. we've now it discreet for and them have the As on sight and the businesses all those Nuclear take grid got mentioned, now Steam, at we us now better all four of doesn't potential

in around and charges, with P&L a out have of perspective be here 'XX. back lot how we'll soon from a to and visibility conviction other at we're 'XX clearly, work improvements, and plays some break more better back those to that and here absence do So be respect we'll even our as we

Jamie Miller

add to continue other The factories a here. there but just projects frame you their leveling cash through, is declining been comes in work free our in we've down and negative volume as see I volume flow on would color the way as

Larry other new where the a come So progress of equipment of through. our and we're the or what's project, where progress on payables to some on costs project phase burn billings through in the down addition we where the constructing payables. our now starting of really we in down flowing a items projects are Situations of and to and cash mentioned is of in burn receive received advance the projects

as that that level. flow. also So Power also of free cash that's the to pressuring levels And starts

Julian Mitchell

second term Thanks. where about medium question a Aviation. visibility business, be And then better my may there's

the margin a LEAP this risk bps? transition horizon that major could operating you say let's How on beyond then year. You looking just to see that or profile? year XXX NMA the that to you of XXXX last think anything talked free the margin And moving headwind terms do relative cash in flow out in XXXX cause about in aviation

Jamie Miller

remixing significant LEAP quarter and when we LEAP up happening Aviation's and saw quarter to up respect down that's CFM Year-over-year strong look at periods. and XX% over fourth come in the merger seeing and mix those you in between over increase the With X.Xx you're CFM shipments meaningfully same prior the year.

again CFM we reduced will had up this I'd X,XXX year, also to say than Next down about deliveries next from be the of will CFM LEAP more year ramps year X,XXX-plus. come the but XX%

year on job shifting They're the and So call with that a again that R&D. but doing it expect remixing continues next nice growth. XXX to military company-funded drag the was of that We occur. services basis mentioned in really small offsetting We a do points. in XXXX continued some Aviation's drag

Larry Culp

We're new platforms. clearly about in customers airframe conversations with major our

to cash I would think a to we're here flow headwind that those around at premature it in 'XX. headwind any flow this point, cash material going be have suggest programs of a

Operator

Research, Scott Davis. ahead. Melius have From we Please go

Scott Davis

Hey. Good morning, guys.

Larry Culp

Good morning, Scott.

Scott Davis

number. was as that far I headquarter seems you talking it guess including about around Larry I context was a new, as had you're you date. what number. Even eye-popping I I a prom just like have of All one headquarter? insane But don't gave $X.X billion some Power number prom you're in That's that? really And going to was aside, kidding don't was the a that It such birth. that buy kind just know at to date. which I nonsense. Can me, put bald

Larry Culp

line think both we've got time it's a bring know, the Scott And Well, I done for that horizontally again, the there's by of sight near businesses. as large the you effectively, at and at over terms levels XXX. -- and in here lot number corporate we've to about down segment a

as But true for it but as adjustment I budgets primarily ownership think savings. likely we not here move time we into the in allocation it's for an operating to take businesses from them we their find businesses clearly opposed They're don't or that further cost is and do they an have the are as opportunities to corporate. there those if as for activities reduction. wasteful over it's So the unhelpful can

I to it think we really P&L-by-P&L. and do visibility accountability help drive

I think I've shared tenure my businesses. It's would of was one with if some Power folks obviously that early as on number talk a we business. in about it

different better issues than others, there. Some and here

that I I take as think issues. better on It's not but better get meaningful better we've across to portfolio. perfect drive today that results we action position visibility got to those visibility think

Scott Davis

other close can unions to totally that? governments then World realistic is And sense. a that's little it's gigawatts the a Is down that clear get lot and be anywhere make you've arguably capital XX years? That your the of two say New is in not closer the World else. which is lot get gigawatts, people thing it capacity mean equipment, to to to down and something next New how just lots the pressure even I lower or do able everybody XX? of from of but XX got XX to factories, big you if is,

Larry Culp

think it of last priorities to are right? we a I year. but number and of cost competing is pressures out going There Well, be billion took realistic, $X

parameters build last to did the -- think we putting on year. what up of are a we're we putting I the program

this. do So have to do Scott, absolutely We this. to we have

have I know, effort in think one but it's the the both Productivity of a we simply around question to back the margins multiyear Right pricing. challenge equipment around earlier and not is here in new capacity. performance business. things us optimism to to and this field in we better think can give you. I on It's that we a But that prove services. host that of the margin cash drive whole

Operator

we Citi, Kaplowitz. And Andrew ahead. Please have from go

Andrew Kaplowitz

seems when morning, the Larry, of company. do FIRREA is dropping confident issues in is like continue Good guys. in surprises the had surprise think GE really start Hey. in The you've the development all that legacy will liabilities a regard, biggest the adjustment. one investors of relatively to to you with reasonably agreement this small point, I that have identified the skeletons that are DOJ a positive the LTC negative closet so moving at does the that forward? feel going level But concern

Larry Culp

ever that both said that positions. spot think But reserved. last I around good my don't where all WMC fact tend take we I The right with say, respect is don't a on. and I right? here to resolution would think skeletons, that you're day the I found we even today to news have we came in on absolute were the

begin to that move So episode behind we us. can

to new in eyes not and of fresh absence come walked we've new again, run. we've fresh got again to still cash the the new a a first requirements But and encouraged to in really GC, with you few we're LRT. stat a news will results got years. by of no new it's not eyes through their has think GE the the Jamie weeks that I more from But lot test a that and my GAAP the controller the relative

sign adding to I'm We're positive things. that months to going a is doing help not you address here understand when by to open what can, we're that going And time. what we see the as arisen in what and nearly four be transparent encouraged think aren't I we're and list. we I we has to possibly as them but find

Andrew Kaplowitz

having definitive out obviously It pretty no a And noise sell lot there. clear but Larry, plans you're quite to of about sounds GECAS. there's

So maybe business? in you stream debt weigh back earnings GECAS to strong you the in the and get the versus keeping I could Capital GE step have ask tact you how that urgency down from

Larry Culp

some every I -- We with But desk. to on that that on frequency. think there. get business rumor we're everything inbounds on inbounds every on frankly. keen my we're that's is one frankly but out not innuendo we comment GECAS Well, get

billion. $XX We've it from think debt bring a to $XX something think net the billion delever to of that closer assets. the options. to quality we I can speaks I and number got Again, of down

think when here plan work as we've strategic need gets. mindful and and assets We as elevate again, But straightforward move impact that we cash that's it clear. today and I you the and earnings think we're really We the as trades the on is I are to simple of we are outlined level, our delever the and capability. out to going to

Operator

Lynch, Merrill go of Please Obin. From Bank America we have Andrew ahead.

Andrew Obin

Hi, good morning.

Just a question.

And asset of evaluating we see sort we book the the big took of these is far process in You mentioned there? a that $XXX more Shall in you of are understanding is How of writedowns? my culturally writedown deal. million that Power. contract along

Jamie Miller

pay the at just that clean attention What quarter as review. company. that We particular across they take a higher to which new asked their we and reviewed about when did CSA make of buckets call, we the through cleanly to the about controller, our everything this to of were standards started And look thinking -- comprised he way. the they went was contracts, right sure different really risk on them results three were talked normal

mentioned cost pressure we before, standard as we on then updates. utilization, had and our just So pricing for adjustments some

has been you energy it's demonstrating I side, be utilization the book, at relatively to to look an utilization fairly continues And flat actually generation. important of gas a continues source profile. CSA the that the it support base healthy when and just On think

like adoptions. see did that at but in our you geographies And in California largely just of sure that. the our isn't book, reflecting concentration make geographies some by view some impacted Now of renewables those to more look we we true-ups were our Turkey areas on are as we and best places took some

when we are productivity. pricing portfolio, but that this expected happen, manufacturing. do do like updating offset do as the often view a And able we scope had just portfolio, well. also how seeing sure cost contracts. reflected we that term blade to issue make of On would high Having we go some always realistic in there that's standard on these well. the wanted Those the margin through pressure, And small we We cost through some are went you are standard These we one in saw we a we contracts. long through stage of pricing and that quarter with of had that that impact said as reviews. roll something part cost expansion process when in our renegotiation these, that's from to

Andrew Obin

achieve How capital? incremental, on to billion to how XXXX you. much much just incremental $X Thank put You Capital. And you. 'XX your but you leverage in do said need targets? GE Got in

Jamie Miller

Yeah.

point, as the XXXX, So get about $X we XXXX, said which Andrew understand. we we're this as is at And talking obviously billion. we beyond

expect funded to talk We the capital but to into not That will and capital continue or Capital parents sales through a combination about fully will be earnings this more prepared that. of asset continue put to we're point, GE GE to put subsidiaries. at liquidity support insurance

Operator

Deutsche From Bank, ahead. go Nicole DeBlase. have we Please

Nicole DeBlase

morning. good So,

to part Power want I a question. of kind on two So start just

execution XX%. you improve and by headcount maybe as exactly driver to weaker question. level And the you guess different doing in then a when we topic same equation by of do getting an keeps that pricing you I coming of about part profitability reduced get with stop utilization? are is capacity up inning talking XX%, know What that to Power but here footprint need the right the that to you piece might You of back are reduced to of important profitability to margin headwinds? respect I to since what what of

Larry Culp

relative what I'm operating management. the new are else the Power. at is team, the talk metrics the feed to growth that very in how responsible know, operating understand the Well, in early the making for turnaround the folks we this referring it. daily about in Again, talk a that factories, to better a sure into both level labs folks the I to that the Nicole in in What key we I When field, the the folks would don't say, innings day margins every in operating structure, new frame new we business. are really rhythms. execution, at about they are

importantly not driving a Those Execution but in It's how exercise they field we not Not outages and time understand quickly quality frankly productivity. getting go that how exercise, going sure to price, in into turn and customers a the reporting I made to is performance. about at well. for it's not I'm when how get not It's a it going issues making as only things. But material time back. We'll over organization. time a it better are better metrics being that the while. and lift take organization. will This around operating sure get around cost into just actually source global of little about only think solve making So clearly a actually but what we're the takes more measured I'm management what the in on are be some the is really underlying optimistic year go of translate our right? we they're because first from focused to the see focused we'll the that big we of better to And absence and end adjustments those sooner operating on, improvements. but and investors are that

Nicole DeBlase

Thanks, are need on items tie consider? indicative we that rate of And reduction one expense quick Or to that progress really That's there you corporate is for up. the to just expense run Would that Larry. this in the XXXX? it. Good got a Okay, helpful. quarter. saw XQ there say corporate we

Jamie Miller

roughly it's indicative. I'd say

from we from higher in some it'll a it's slightly in XXXX. I onetime down that quarter down that. It bit due bit expenses Little to think was be but close. little the had

Operator

have Dray. ahead. From Deane RBC Markets, Capital go we Please

Deane Dray

Good morning, you. everyone. Thank

Larry Culp

morning. Hey, Dean. Good

Deane Dray

I'd like add him our also all to best. to wish Winoker the and Steve welcome

Steve Winoker

Dean. Thanks,

Deane Dray

especially third questions, of to more is housekeeping that a and one of be? more quarter burn have timing about early of have the where to plans in my yet cash terms not that just you're on what's earnings would get Maybe But still specifics side. and Analyst in like Looks flow host like, guidance I an in a lot for of meeting. in there's question filled what that ready talked does you to XXXX. meeting the Looks stand Larry the

Larry Culp

think yourselves more like terms today I the up. minds level as not with know not we be a without that folks in think not indicating Dean on in of we again, Well, every how answering grounding that here Power. of fourth but a the actions ourselves some but we particularly as that shaping prepared in about that today. with question but of not also we'll answer have through We question issues, under going well soon folks only work talked are to what we're way see quarter and XXXX and But might of their only we've we're of we investors back conviction any to remarks the we expect we're our sharing respect and us are and expect I Q&A can

Deane Dray

the How see and news Okay. accountability color that's recognition And be. might you with lots in change? I mean I stand all the the loss terms on where customer. the a the the Where appreciate good And surprise. and voice long Larry, second the in there side. upfront. off what started and good terms how of not the third of We've management of good then call how I fence In news, risk today was priorities? the hear all that got does term to was changes does is on insurance --that question ring that for to quarter, certainly is approach my of calls that insurance new

Larry Culp

LRT sure data I everybody understands Dean, are here that point. want Well, again the to a positive make results

respect we'll liability commitments think have as position take like GE book in going a the in structure of to necessarily don't be hands. surprises well share a that have our get fulfill a expect and not shareholder. to weeks. would to value I folks, term you stat is those major from the a those. I But who'd certainly practice. more here the to We We're permitted think right? with that we long off any we a sense is test in This with results inbounds at but important and And few our to this make for

I that about understanding with there anything it understand and way. think what our suspect transparency out. is fact-based Certainly the around in debate. lead again, is. be this rule means. better ring to a our to suspect us is they'll we're understanding that optimistic But I some of But disclosures, can that forever? enhance there talk we better Is still as understands, People can obligations not this the we to I'm now, right will what everyone way to is that will So to fence Or going insurance it use trying and do your book. to what it what make I are sure a what word I'm is be

helpful that the the some with K in today test. come in side stat hopefully, once of we're regard the disclosures other So on more to

Operator

we Please have Gordon Haskett, John And go from Inch. ahead.

John Inch

Larry. Good morning, morning, Good everybody.

Larry Culp

morning. Hey, John. Good

John Inch

Hi, Steve.

Steve Winoker

John. morning, Good

John Inch

Good morning, Steve.

are $XX And may but for have almost gains I earnings? billion of this Just it's sales? in guide cash on of, the ex billion the say kind what's flow Larry Jamie, XXXX? Jamie $XX you the XXXX? the capital expecting? we guide. Healthcare's missed and like, from are What on what asset also So was guide free capital from expecting is what And what

Jamie Miller

we're not XXXX Capital's as XXXX respect with guidance today. GE to mentioned, offering Well, Larry

you of cycle that's be well that's is I term I and think today. So some there's And that strong It's to cash business. flow been that free something out maps been our flow understood the cash think with not flow, with lot a that a business Healthcare's it's but we near will in respect a long sharing unlike of there. valuation

cash think free disclosing to not Healthcare's come I conclusion flow, we're there while probably So what that you pretty can about reasonable a is.

John Inch

Okay.

we targeting were looks the we $XXX loss? think a losing the from wondering, actually is cash positive in quarter you even free and in million. originally what walk be actually to quarter. mix positive year in I'm just the capital flow would ended the is And Hughes It like money. -- fourth Jamie, cash free walk, even Baker generated fourth on I also in break this break when your the changed up thought cash flow cash Baker what

So Why positive? a technical just negative a why it that guess. isn't drawing would a question, it's that be I out,

Jamie Miller

in well. about had We the by That the marks as that the we And some fourth quarter in GE Capital. million. of benefits then $XXX in less so LRT million. had tax than us was other the impacted first had We Well, we portfolio on actually results half. second $XX expected

So expected Hughes. had we then and And between to was we where up. that ended the what really with Baker large difference respect

are flow. We free backing out cash

cash on might flow. be that So labeling there. issue the Baker slide a It's free less Hughes

it you dividend. out the back If you have and

Operator

Please we ahead. Joe Goldman Ritchie. Sachs, go from And have

Joe Ritchie

morning. Good Thanks.

Larry Culp

Hey, Joe. Good morning.

Jamie Miller

Good morning, Joe.

Joe Ritchie

guys. morning, Good

better flow flow, answer just be And year. so Power XXXX on just to you Power from know, I a expect I XXXX $X.X could may ask perspective? the much the 'XX little on guide. reluctant than cash be you're a to just burn this Do But billion free free cash

Larry Culp

that position place, framing color just, where With is cash hopefully serious at challenge, we're think burned we I to can respect back to. a we're a And Power we're we'll be addressing. again, But soon. of we today sharing we're everything helpful. year and that. clearly, we're where the detail do particularly and we $X.X that with respect the not the know, around more to the magnitude commit able you last when are in But understand with to everything again, we billion and about the with task

Joe Ritchie

maybe that I definitely in of then billion focus will get on the Getting near the the guess, the onetime term. on if the second can and in half disclosure issues some occurred I just $X.X XXXX. helpful But more path the on hopefully color

around say Does should it that that how charges to issues call far Specifically, it sounds like to? so turbine. orders roughly you fair are least you? about that does it Is $XXX we issue. all it blade received so relate in to behind there. in or like What the what think the each million And at roughly, that those quantifiable relate was

would helpful? be any color Just that on

Larry Culp

we the when -- we we And base. it's Because were we to anticipating, effectively out is that. regrettable. Yes. these replacing blade blades But sooner think understand the That is I function work way had life Well under talk effectively the than useful really the for shorter think about anticipated cost a again, right? going the issue, it's unfortunately. of we than and installed with respect

the customers like site that think and to to we're we're issue remediating respect the continue that our understand, in to in talk margin not to going what's is the the 'XX. them think something, here with about pressure field when you how in I'd going to I happened business

Jamie Miller

and quarter third from back walking updating maybe just And Yeah. today.

$XXX So we had the million to related accruals third quarter, one and stage warranty of blade. other

We also services outperformed amount our the as a that that similar worked over expected experience time we of that mentioned in book. to

the blade includes part charges what to So services I stage mentioned those started of updates. through on earlier issue come that one

Larry Culp

are But there of of host elements that

Jamie Miller

Absolutely.

Larry Culp

That just not update the very.

Jamie Miller

very in But that part it's work. that of quarter. just Yeah. issue small the as It's off bleed a do we the

Larry Culp

our Joe. Cowen and from go we question Thanks, ahead. Khanna. Please Gautam And Company, have final

Gautam Khanna

Yes. Thank morning, you. guys. Good

Larry Culp

morning. Good

Gautam Khanna

Two questions.

senior any as now? have to the changes the time Any you if comp changes wondering, triggers we the contemplated that was I First, being you're triggers management PSU about approach to proxy for incentive thinking whole frame?

Larry Culp

we can reference that Nothing this morning.

Gautam Khanna

And compares And already pricing if was it maybe in to the if bottom pricing transactional has a will your I wondering, that Okay. where year was expect when how Power you to Or could now talk it you aftermarket? opinion? about ago? and

Jamie Miller

I think of that that's a question the and depends to scope with do geography customers. kinds really we're the it depends work, on looking our and on

less has it. as on we year, has refocused group, some scope last do our talked Scott He come the in. to Over as more but about transactional margin work we've cases focus in before as higher really

XX, You we in, rate year. our consistently competitive margin increasing XX, up it's having some as market and order been a come cases on even said know, that order CM in or XX throughout it's points we're but book our that have seeing the orders

of the we yet that and on we are that Now operational increase not these it things seeing should to the think piece capacity. are as capture markets the primarily we're of that pricing execution all kind very fixable. the pressure, these as call, to we over because But really And a of we pressure with have drop Larry time work, the book, should of really believe that But mentioned earlier seek work share to lot higher field that capture respect issues that say issues. flow want generally, our through. the in competitive margin execution are I margin through of operational

of and leveling through years think out see we dynamic levels couple as next capacity the as I market that the until So and go we well. until will the out continue

Steve Winoker

we know, everyone time to the of we out ran before I get could in queue.

us. you to Investor can But you. website. Thank available everybody this call through afternoon be team will of So and replay I reach today's the me day. want my joining The thank our on for

Operator

Ladies and you. you Thank today's conference. joining. concludes for gentlemen, this Thank

now disconnect. may You

General Electric (GE) 31 Jan 192018 Q4 Earnings call transcript