New York
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14-0689340
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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41 Farnsworth Street, Boston, MA
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02210
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(617) 443-3000
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(Address of principal executive offices)
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(Zip Code)
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(Telephone No.)
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Securities Registered Pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common stock, par value $0.06 per share
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New York Stock Exchange
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Securities Registered Pursuant to Section 12(g) of the Act:
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(Title of class)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Emerging growth company
¨
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Page
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10-K Introduction & Summary
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3
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About General Electric
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Risk Factors
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Management and Auditor's Reports
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Audited
Financial Statements and Notes
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Directors, Executive Officers and Corporate Governance
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Exhibits
and Financial Statement Schedules
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Form 10-K Cross Reference Index
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FORWARD LOOKING STATEMENTS
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•
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our execution of Industrial and GE Capital business or asset dispositions, including sale prices, the timing of disposition proceeds and potential trailing liabilities, as well as our ongoing portfolio review;
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the amount and timing of our Industrial cash flows and earnings, which may be impacted by customer, competitive, contractual and other dynamics and conditions;
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our capital allocation plans, as such plans may change including with respect to the timing and amount of GE dividends, organic investments, including research and development, investments in Digital and capital expenditures, pension funding contributions, acquisitions, joint ventures and other strategic actions;
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our ability to maintain our current short- and long-term credit ratings and the impact on our funding costs and competitive position if we do not do so;
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customer actions or market developments such as reduced demand for equipment and services in our Power business as a result of increased market penetration by renewables, shifts in the competitive landscape for our products and services, changes in economic conditions, including oil prices, early aircraft retirements and other factors that may affect the level of demand and financial performance of the major industries and customers we serve;
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changes in law, economic and financial conditions, including the enactment of tax reform or other tax law changes, interest and exchange rate volatility, commodity and equity prices and the value of financial assets;
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the impact of conditions in the financial and credit markets on GE Capital’s ability to sell financial assets, the availability and cost of GE Capital funding and GE Capital’s exposure to counterparties;
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pending and future mortgage loan repurchase claims, other litigation claims and the U.S. Department of Justice’s investigation under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 and other investigations in connection with WMC, which may affect our estimates of liability, including possible loss estimates;
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our ability to launch new products in a cost-effective manner;
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our ability to increase margins through restructuring and other cost reduction measures;
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our ability to convert pre-order commitments/wins into orders/bookings;
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the price we realize on orders/bookings since commitments/wins are stated at list prices;
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the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of WMC, Alstom and other investigative and legal proceedings;
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our success in completing, including obtaining regulatory approvals and satisfying other closing conditions for, announced transactions, such as our plans to sell our Industrial Solutions business, the substantial majority of our Lighting segment or other dispositions that we may pursue;
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our success in integrating acquired businesses and operating joint ventures, and our ability to realize revenue and cost synergies from announced transactions, acquired businesses and joint ventures, including Alstom and Baker Hughes, a GE company (BHGE);
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the impact of potential information technology, cybersecurity or data security breaches;
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the other factors that are described in “Forward-Looking Statements” in Baker Hughes, a GE company’s, most recent earnings release or SEC filing; and
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the other factors that are described in the Risk Factors section of this Form 10-K report.
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ABOUT GENERAL ELECTRIC
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Power
(a)
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Aviation
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Lighting
(a)
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Renewable Energy
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Healthcare
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Oil & Gas
(b)
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Transportation
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Capital
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(a)
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Beginning in the third quarter of 2017, the Energy Connections business within the former Energy Connections & Lighting segment was 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 are now reported as a separate segment called Lighting.
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(b)
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Beginning in the third quarter of 2017, our Oil & Gas segment is comprised of our ownership interest of approximately 62.5% in BHGE. We consolidate 100% of BHGE's revenues and cash flows, while our Oil & Gas segment profit and net income are derived net of minority interest of approximately 37.5% attributable to BHGE's Class A shareholders.
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•
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product development cycles for many of our products are long and product quality and efficiency are critical to success,
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•
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research and development expenditures are important to our business,
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•
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many of our products are subject to a number of regulatory standards and
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changing end markets, including shifts in energy sources and demand and the impact of technology changes.
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ABOUT GENERAL ELECTRIC
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MD&A
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General Electric or the Company
– the parent company, General Electric Company.
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GE
– the adding together of all affiliates except GE Capital, whose continuing operations are presented on a one-line basis, giving effect to the elimination of transactions among such affiliates. As GE presents the continuing operations of GE Capital on a one-line basis, certain intercompany profits resulting from transactions between GE and GE Capital have been eliminated at the GE level. We present the results of GE in the center column of our consolidated statements of earnings, financial position and cash flows. An example of a GE metric is GE cash from operating activities (GE CFOA).
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General Electric Capital Corporation or GECC
– predecessor to GE Capital Global Holdings, LLC.
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GE Capital Global Holdings, LLC or GECGH
– the adding together of all affiliates of GECGH, giving effect to the elimination of transactions among such affiliates.
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GE Capital or Financial Services
– refers to GECGH, or its predecessor GECC, and is the adding together of all affiliates of GE Capital giving effect to the elimination of transactions among such affiliates. We present the results of GE Capital in the right-side column of our consolidated statements of earnings, financial position and cash flows.
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GE consolidated
– the adding together of GE and GE Capital, giving effect to the elimination of transactions between the two. We present the results of GE consolidated in the left-side column of our consolidated statements of earnings, financial position and cash flows.
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GE Industrial
– GE excluding the continuing operations of GE Capital. We believe that this provides investors with a view as to the results of our industrial businesses and corporate items. An example of a GE Industrial metric is GE Industrial CFOA (Non-GAAP), as defined in Other Terms Used by GE below.
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Industrial segment
– the sum of our seven industrial reporting segments, without giving effect to the elimination of transactions among such segments and between these segments and our Financial Services segment. This provides investors with a view as to the results of our industrial segments, without inter-segment eliminations and corporate items. An example of an industrial segment metric is industrial segment revenue growth.
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Baker Hughes, a GE company or BHGE
- following the combination of our Oil & Gas business with Baker Hughes Incorporated, our Oil & Gas segment is comprised of our ownership interest of approximately 62.5% in the new company formed in the transaction, Baker Hughes, a GE Company (BHGE). We consolidate 100% of BHGE's revenues and cash flows, while our Oil & Gas segment profit and net income are derived net of minority interest of approximately 37.5% attributable to BHGE's Class A shareholders. References to "Baker Hughes" represent legacy Baker Hughes Incorporated operating activities which, in certain cases, have been excluded from our results for comparative purposes.
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Total segment
– the sum of our seven industrial segments and one financial services segment, without giving effect to the elimination of transactions between such segments. This provides investors with a view as to the results of all of our segments, without inter-segment eliminations and corporate items.
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Verticals or GE Capital Verticals
– the adding together of GE Capital businesses, principally its vertical financing businesses—GE Capital Aviation Services (GECAS), Energy Financial Services (EFS) and Industrial Finance (which includes Healthcare Equipment Finance, Working Capital Solutions and Industrial Financing Solutions)—that relate to the Company’s core industrial domain and other operations, including our run-off insurance operations, and allocated corporate costs.
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MD&A
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Backlog
– unfilled customer orders for products and product services (expected life of contract sales for product services).
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Borrowings as a percentage of total capital invested
– for GE, the sum of borrowings and mandatorily redeemable preferred stock, divided by the sum of borrowings, mandatorily redeemable preferred stock, redeemable noncontrolling interest, noncontrolling interests and total shareowners’ equity.
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Continuing earnings
– we refer to the caption “earnings from continuing operations attributable to GE common shareowners” as continuing earnings.
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Continuing earnings per share (EPS)
– when we refer to continuing earnings per share, it is the diluted per-share amount of “earnings from continuing operations attributable to GE common shareowners.”
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Digital revenues
– revenues related to internally developed software (including Predix
TM
) and associated hardware, and software solutions that improve our customers’ asset performance. In 2016, we reassessed the span of our digital product offerings, which now excludes software-enabled product upgrades. These revenues are largely generated from our operating businesses and are included in their segment results. Revenues of "Non-GE Verticals" refer to GE Digital revenues from customers operating in industries where GE does not have a presence.
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Equipment leased to others (ELTO)
– rental equipment we own that is available to rent and is stated at cost less accumulated depreciation.
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GE Capital Exit Plan
- our plan, announced on April 10, 2015, to reduce the size of our financial services businesses through the sale of most of the assets of GE Capital, and to focus on continued investment and growth in our industrial businesses.
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GE Industrial CFOA (Non-GAAP)
– GE CFOA excluding the effects of dividends from GE Capital. Adjusted GE Industrial CFOA (Non-GAAP) is GE Industrial CFOA excluding deal-related taxes, GE Pension Plan funding and Oil & Gas CFOA, and including dividends received from BHGE.
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GE Industrial free cash flow (Non-GAAP)
– Adjusted GE Industrial CFOA (Non-GAAP) adjusted for gross GE additions to property, plant and equipment and internal-use software, which are included in cash flows from investing activities, and excluding gross Oil & Gas additions to property, plant and equipment and internal-use software.
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GE Industrial margin
– GE revenues and other income excluding GE Capital earnings (loss) from continuing operations (GE Industrial revenues) minus GE total costs and expenses less GE interest and other financial charges divided by GE Industrial revenues.
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GE Industrial operating profit margin (Non-GAAP)
– Industrial segment profit plus corporate items and eliminations (excluding gains, restructuring, and pre-tax non-operating pension cost) divided by industrial segment revenues plus corporate items and eliminations (excluding gains and GE-GE Capital eliminations).
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GE Industrial return on total capital (GE Industrial ROTC) (Non-GAAP)
– earnings from continuing operations attributable to GE common shareowners less GE Capital earnings from continuing operations plus GE after-tax interest, divided by average GE shareowners’ equity, less average GE Capital’s shareowners’ equity, plus average debt and other, net.
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GE Industrial structural costs (Non-GAAP)
– Industrial structural costs include segment structural costs excluding the impact of business acquisitions and dispositions, plus total Corporate operating profit excluding pre-tax non-operating pension cost, restructuring and other charges and gains.
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GE shareowners’ equity and GE Capital shareowner's equity
– for purposes of the GE Industrial ROTC calculation excludes the effects of discontinued operations and is calculated on an annual basis using a five-point average.
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Global Growth Organization (GGO
) –
The GGO provides leadership in global markets, particularly within emerging and developing markets. The organization creates and identifies cross-business commercial opportunities and collaborates with businesses to capitalize on them. The GGO is heavily involved in government advocacy, shaping policy and regulation. Additionally, the GGO provides regional commercial finance capabilities and customer financing solutions, in collaboration with certain of our GE Capital businesses, and works to build the GE brand and protect GE’s reputation.
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Net earnings
– we refer to the caption “net earnings attributable to GE common shareowners” as net earnings.
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MD&A
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Net earnings per share (EPS)
– when we refer to net earnings per share, it is the diluted per-share amount of “net earnings attributable to GE common shareowners.”
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Non-operating pension cost (Non-GAAP)
– comprises the expected return on plan assets, interest cost on benefit obligations and net actuarial gain (loss) amortization for our principal pension plans.
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Operating earnings (Non-GAAP)
– GE earnings from continuing operations attributable to common shareowners excluding the impact of non-operating pension cost.
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Operating earnings per share (Non-GAAP)
– when we refer to operating earnings per share, it is the diluted per-share amount of “operating earnings.”
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Operating pension cost (Non-GAAP)
– comprises the service cost of benefits earned, prior service cost amortization and curtailment gain (loss) for our principal pension plans.
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Organic revenues (Non-GAAP)
– revenues excluding the effects of acquisitions, dispositions and translational foreign currency exchange.
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Product services agreements
– contractual commitments, with multiple-year terms, to provide specified services for products in our Power, Renewable Energy, Oil & Gas, Aviation and Transportation installed base – for example, monitoring, maintenance, service and spare parts for a gas turbine/generator set installed in a customer’s power plant.
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Revenues
– revenues comprise sales of goods, sales of services and other income for our industrial businesses and GE Capital revenues from services for our financial services businesses.
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Segment profit
– refers to the operating profit of the industrial segments and the net earnings of the Financial Services segment. See the Segment Operations section within the MD&A for a description of the basis for segment profits.
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Services
– for purposes of the financial statement display of sales and costs of sales in our Statement of Earnings (Loss), “goods” is required by SEC regulations to include all sales of tangible products, and “services” must include all other sales, including other services activities. In our MD&A section of this report, we refer to sales under product services agreements and sales of both goods (such as spare parts and equipment upgrades) and related services (such as monitoring, maintenance and repairs) as sales of “services,” which is an important part of our operations.
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Shared Services
– sharing of business processes in order to standardize and consolidate services to provide value to the businesses in the form of simplified processes, reduced overall costs and increased service performance.
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MD&A
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Industrial segment organic revenues
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Industrial segment organic operating profit
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Operating and non-operating pension cost
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GE Industrial structural costs and GE Industrial structural costs, excluding acquisitions and dispositions
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GE pre-tax earnings (loss) from continuing operations, excluding GE Capital earnings (loss) from continuing operations and the corresponding effective tax rates, and the reconciliation of the U.S. federal statutory income tax rate to GE effective tax rate, excluding GE Capital earnings
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GE Industrial operating earnings and GE Capital earnings (loss) from continuing operations and EPS
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GE Industrial operating + Verticals earnings and EPS
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GE Industrial operating profit and operating profit margin (excluding certain items)
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Average GE shareowners’ equity, excluding effects of discontinued operations
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Average GE Capital shareowner's equity, excluding effects of discontinued operations
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GE Industrial return on total capital (GE Industrial ROTC)
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GE Industrial cash flows from operating activities (GE Industrial CFOA), adjusted GE Industrial CFOA and GE Industrial free cash flow (FCF)
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2018 operating framework including 2018 Adjusted EPS and GE Industrial free cash flow
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MD&A
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KEY PERFORMANCE INDICATORS
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REVENUES PERFORMANCE
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2017
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2016
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Industrial Segment
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3
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%
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4
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%
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Industrial Segment Organic (Non-GAAP)(a)
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—
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%
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(1)% / 1%
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Financial Services
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(17
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)%
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1
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%
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GE INDUSTRIAL ORDERS AND BACKLOG
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(Dollars in billions)
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2017
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2016
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2015
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||||||
Orders
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Equipment
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$
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58.2
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$
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55.2
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$
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56.5
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Services
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60.6
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55.7
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49.5
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Total(a)
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$
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118.8
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$
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110.9
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$
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105.9
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||||||
Backlog
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||||||
Equipment
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$
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84.7
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$
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84.1
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$
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88.6
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Services
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256.7
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236.8
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225.9
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Total
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$
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341.3
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$
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320.9
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$
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314.5
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GE INDUSTRIAL MARGINS (GAAP) AND GE INDUSTRIAL OPERATING PROFIT MARGINS (NON-GAAP)
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(Dollars in billions)
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2017
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2016
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2015
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GE Industrial margins (GAAP)
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5.7
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%
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11.4
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%
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11.7
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%
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GE Industrial operating profit margins (Non-GAAP)(a)
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12.1
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%
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14.0
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%
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14.8
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%
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(a)
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Excluded gains on disposals, non-operating pension cost, restructuring and other charges, noncontrolling interests and GE Capital preferred stock dividends
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EARNINGS
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|||||||||
(Dollars in billions; per-share amounts in dollars)
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2017
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2016
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2015
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||||||
Continuing earnings (loss) (GAAP)
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$
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(5.9
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)
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$
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9.1
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$
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1.7
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Net earnings (loss) (GAAP)
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(6.2
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)
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8.2
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(6.1
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)
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Operating earnings (loss) (Non-GAAP)
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(4.4
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)
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10.5
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3.5
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GE Industrial operating + verticals earnings (loss) (Non-GAAP)
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(3.9
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)
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13.6
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13.1
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||||||
Continuing earnings (loss) per share (GAAP)
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$
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(0.68
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)
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$
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1.00
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$
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0.17
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Net earnings (loss) per share (GAAP)
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(0.72
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)
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0.89
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(0.61
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)
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Operating earnings (loss) per share (Non-GAAP)
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(0.51
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)
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1.14
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0.35
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GE Industrial operating + verticals earnings (loss) per share (Non-GAAP)
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(0.45
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)
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1.49
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1.31
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GE CFOA AND GE INDUSTRIAL FREE CASH FLOW (NON-GAAP)
|
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||||||
(Dollars in billions)
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2017
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2016
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2015
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|||
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||||||
GE CFOA (GAAP)(a)
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$
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11.0
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$
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30.0
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$
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16.4
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GE Industrial CFOA (Non-GAAP)(a)
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7.0
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9.9
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12.1
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Adjusted Industrial CFOA (Non-GAAP)
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9.7
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11.6
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12.2
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GE Industrial free cash flow (Non-GAAP)
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5.6
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7.1
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7.7
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(a)
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Included $0.5 billion related to Baker Hughes in 2017.
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MD&A
|
KEY PERFORMANCE INDICATORS
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SHAREOWNER INFORMATION
|
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RETURNED $12.1 BILLION TO
SHAREOWNERS IN 2017
Dividends $8.4 billion
Stock buyback $3.8 billion
|
ANNUAL MEETING
General Electric’s 2018 Annual Meeting of
Shareowners will be held on April 25, 2018,
in Imperial, PA
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FIVE-YEAR PERFORMANCE GRAPH
|
|
STOCK PRICE RANGE AND DIVIDENDS
|
|
MD&A
|
CONSOLIDATED RESULTS
|
•
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Continuing earnings
– we refer to the caption “earnings from continuing operations attributable to GE common shareowners” as continuing earnings.
|
•
|
Continuing earnings per share (EPS)
– when we refer to continuing earnings per share, it is the diluted per-share amount of “earnings from continuing operations attributable to GE common shareowners.”
|
•
|
GE Industrial margin
– GE revenues and other income excluding GE Capital earnings (loss) from continuing operations (GE Industrial revenues) minus GE total costs and expenses less GE interest and other financial charges divided by GE Industrial revenues.
|
•
|
Net earnings
– we refer to the caption “net earnings attributable to GE common shareowners” as net earnings.
|
•
|
Net earnings per share (EPS)
– when we refer to net earnings per share, it is the diluted per-share amount of “net earnings attributable to GE common shareowners.”
|
•
|
Operating earnings (Non-GAAP)
– GE earnings from continuing operations attributable to common shareowners excluding the impact of non-operating pension costs.
|
•
|
Organic revenues (Non-GAAP)
– revenues excluding the effects of acquisitions, dispositions and translational foreign currency exchange.
|
•
|
Revenues
– revenues comprise sales of goods, sales of services and other income for our industrial businesses and GE Capital revenues from services for our financial services businesses.
|
•
|
Segment profit
– refers to the operating profit of the industrial segments and the net earnings of the Financial Services segment. See the Segment Operations section within the MD&A for a description of the basis for segment profits.
|
•
|
Services
– for purposes of the financial statement display of sales and costs of sales in our Statement of Earnings (Loss), “goods” is required by SEC regulations to include all sales of tangible products, and “services” must include all other sales, including other services activities. In our MD&A section of this report, we refer to sales under product services agreements and sales of both goods (such as spare parts and equipment upgrades) and related services (such as monitoring, maintenance and repairs) as sales of “services,” which is an important part of our operations.
|
MD&A
|
CONSOLIDATED RESULTS
|
•
|
On January 10, 2017, we completed the acquisition of ServiceMax, a leader in cloud-based field service management (FSM) solutions, for $0.9 billion, net of cash acquired.
|
•
|
On April 20, 2017, we completed the acquisition of LM Wind Power, one of the world’s largest wind turbine blade manufacturers for approximately $1.7 billion, net of cash acquired.
|
•
|
On July 3, 2017, we completed the transaction to create Baker Hughes, a GE company (BHGE). We combined our Oil & Gas business and Baker Hughes Incorporated (Baker Hughes) to create a new company in which GE holds an ownership interest of approximately 62.5% and former Baker Hughes shareholders hold an ownership interest of approximately 37.5%. Baker Hughes shareholders also received a cash dividend funded by a
$7.5 billion
cash contribution from GE. Effective July 3, 2017, the operations of Baker Hughes are reported in our Oil & Gas segment.
|
•
|
On March 8, 2017, we signed an agreement to sell our Water business within our Power segment to Suez Environnement S.A. (Suez). On September 30, 2017, we completed the sale for consideration of
$3.1 billion
, net of obligations assumed and cash transferred (including
$0.1
billion from the sale of receivables originated in our Water business and sold from GE Capital to Suez), and recognized a pre-tax gain of
$1.9
billion in the third quarter of 2017.
|
•
|
In the first quarter of 2017, we classified our Industrial Solutions business within our Power segment as held for sale. In September 2017, we announced an agreement to sell the business for approximately $2.6 billion to ASEA Brown Boveri (ABB), a Swiss-based engineering company. The deal is expected to close in mid-2018, subject to customary closing conditions and regulatory approval.
|
•
|
In the fourth quarter of 2017, we classified the substantial majority of our Lighting segment and two nonstrategic Aviation businesses as held for sale. In connection with this determination, we adjusted the carrying value of each business classified as held for sale to fair value, less cost to sell, which resulted in a pre-tax loss of $0.8 billion related to Lighting and $0.6 billion related to Aviation. These losses have been recorded at Corporate. In February 2018, we entered into an agreement to sell our GE Lighting business in Europe, the Middle East, Africa and Turkey and our Global Automotive Lighting business to a company controlled by a former GE executive in the region. The proposed transaction is expected to close in mid-2018, subject to customary closing conditions and local agreements.
|
•
|
On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (“U.S. tax reform”) that lowers the statutory tax rate on U.S. earnings, taxes historic foreign earnings at a reduced rate of tax, establishes a territorial tax system and enacts new taxes associated with global operations. As a result of the enactment of U.S. tax reform, we have recorded tax expense of $3.3 billion in 2017 to reflect our provisional estimate of both the transition tax on historic foreign earnings ($1.2 billion) and the revaluation of deferred taxes ($2.2 billion).
|
•
|
On January 16, 2018, GE reported the results of a review of premium deficiency assumptions related to GE Capital’s run-off insurance business. With the completion of that review and of the annual premium deficiency test, GE recorded an increase in future policy benefit reserves of $8.9 billion and $0.6 billion of related intangible asset write-off for the fourth quarter of 2017. This resulted in an after-tax charge of $6.2 billion to GE’s earnings in the fourth quarter of 2017. In addition, GE Capital will contribute approximately $15 billion of capital to its run-off insurance business over the next seven years. GE Capital plans to make its first contribution of approximately $3.5 billion in the first quarter of 2018 and expects to make further contributions of approximately $2 billion per year in each of the six following years, subject to ongoing monitoring by the Kansas Insurance Department, its primary regulator. GE Capital plans to fund the capital contributions with its excess liquidity and other GE Capital portfolio actions and does not expect to make a common share dividend distribution to GE for the foreseeable future.
|
•
|
GE also announced that it plans to take actions to make GE Capital smaller and more focused, including a substantial reduction in the size of GE Capital’s Energy Financial Services and Industrial Finance businesses over the next 24 months. Those actions resulted in goodwill and other asset impairment charges of $1.8 billion on an after-tax basis in the fourth quarter of 2017.
|
MD&A
|
CONSOLIDATED RESULTS
|
MD&A
|
CONSOLIDATED RESULTS
|
REVENUES
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Consolidated revenues(a)
|
$
|
122.1
|
|
$
|
123.7
|
|
$
|
117.4
|
|
|
|
|
|
||||||
Industrial segment revenues(b)
|
$
|
116.2
|
|
$
|
112.8
|
|
$
|
108.6
|
|
Corporate revenues and Industrial eliminations
|
(1.2
|
)
|
2.1
|
|
(0.2
|
)
|
|||
GE Industrial revenues(b)
|
$
|
114.9
|
|
$
|
114.9
|
|
$
|
108.4
|
|
|
|
|
|
||||||
Financial services revenues
|
$
|
9.1
|
|
$
|
10.9
|
|
$
|
10.8
|
|
(a)
|
Included $
1.6
billion, $
4.0
billion, and $
2.2
billion of Other income primarily attributable to net gains on purchases and sales of business interests of $0.7 billion, $3.7 billion, and $1.0 billion in 2017, 2016, and 2015, respectively. See Note 17 to the consolidated financial statements for further information.
|
(b)
|
GE Industrial refers to GE excluding the continuing operations of GE Capital. Industrial segment refers to the sum of our seven industrial reporting segments, without giving effect to corporate items or the elimination of transactions among such segments and between these segments and our Financial Services segment.
|
REVENUES COMMENTARY: 2017 – 2016
|
•
|
GE Industrial revenues remained flat for the year
due to an increase in industrial segment revenues of $
3.3
billion offset by a decrease in Corporate revenues and Industrial eliminations of $3.3 billion.
|
•
|
Financial Services revenues decreased $
1.8
billion, or
17%
,
primarily due to higher impairments and organic revenue declines.
|
REVENUES COMMENTARY: 2016 – 2015
|
•
|
GE Industrial revenues increased $
6.6
billion, or
6%
, driven by increased industrial segment revenues of $
4.2
billion and increased Corporate revenues and Industrial eliminations of $2.3 billion.
|
•
|
Financial Services revenues increased $
0.1
billion, or
1%
,
primarily due to lower impairments, higher gains and the effects of acquisitions, partially offset by organic revenue declines, the effects of dispositions and the effects of translational currency exchange.
|
MD&A
|
CONSOLIDATED RESULTS
|
EARNINGS (LOSS) AND EARNINGS (LOSS) PER SHARE
|
|
|
|
||||||
(Dollars in billions; per-share amounts in dollars)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Continuing earnings (loss)(a)
|
$
|
(5.9
|
)
|
$
|
9.1
|
|
$
|
1.7
|
|
|
|
|
|
||||||
Continuing earnings (loss) per share
|
$
|
(0.68
|
)
|
$
|
1.00
|
|
$
|
0.17
|
|
EARNINGS COMMENTARY: 2017 – 2016
|
•
|
GE Industrial earnings decreased $
6.5
billion, or
49%
,
driven by a decrease in Corporate profit of $3.6 billion and a decrease in industrial segment profit of $2.9 billion.
|
•
|
Foreign exchange adversely affected Industrial operating earnings by an insignificant amount in 2017.
|
•
|
Financial Services losses increased $
5.5
billion,
primarily due to a $6.2 billion after-tax charge related to the completion of GE Capital's insurance premium deficiency review, as well as EFS strategic actions resulting in $1.8 billion of after-tax charges in addition to higher impairments, partially offset by lower headquarters and treasury operation expenses associated with the GE Capital Exit Plan, higher tax benefits including the effects of U.S. tax reform and lower preferred dividend expenses associated with the January 2016 preferred equity exchange.
|
EARNINGS COMMENTARY: 2016 – 2015
|
•
|
GE Industrial earnings increased $0.5 billion
due to an increase
in Corporate profit of
$0.9 billion, partially offset by a decrease in industrial segment profit of $0.4 billion.
|
•
|
Interest and other financial charges increased $
0.3
billion, while
GE Industrial
income taxes decreased $
0.5
billion.
|
•
|
Foreign exchange adversely affected Industrial operating earnings by $0.3 billion in 2016.
|
•
|
Financial Services losses decreased $6.7 billion, or 84%,
primarily due to the nonrecurrence of the 2015 charges associated with the GE Capital Exit Plan.
|
MD&A
|
CONSOLIDATED RESULTS
|
•
|
Interest and other financial charges, income taxes and GE preferred stock dividends are excluded in determining segment profit (which we sometimes refer to as “operating profit”) for the industrial segments.
|
•
|
Interest and other financial charges, income taxes and GE Capital preferred stock dividends are included in determining segment profit (which we sometimes refer to as “net earnings”) for the Capital segment.
|
MD&A
|
SEGMENT OPERATIONS
|
|
SUMMARY OF OPERATING SEGMENTS
|
|||||||||||||||
|
|
|
|
|
|
||||||||||
|
General Electric Company and consolidated affiliates
|
||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
|
|
|
|
|
|
||||||||||
Revenues
|
|
|
|
|
|
||||||||||
Power
|
$
|
35,990
|
|
$
|
36,795
|
|
$
|
28,903
|
|
$
|
27,746
|
|
$
|
26,770
|
|
Renewable Energy
|
10,280
|
|
9,033
|
|
6,273
|
|
6,399
|
|
4,824
|
|
|||||
Oil & Gas
|
17,231
|
|
12,898
|
|
16,450
|
|
19,085
|
|
17,341
|
|
|||||
Aviation
|
27,375
|
|
26,261
|
|
24,660
|
|
23,990
|
|
21,911
|
|
|||||
Healthcare
|
19,116
|
|
18,291
|
|
17,639
|
|
18,299
|
|
18,200
|
|
|||||
Transportation
|
4,178
|
|
4,713
|
|
5,933
|
|
5,650
|
|
5,885
|
|
|||||
Lighting(a)
|
1,987
|
|
4,823
|
|
8,751
|
|
8,404
|
|
8,338
|
|
|||||
Total industrial segment revenues
|
116,157
|
|
112,814
|
|
108,609
|
|
109,574
|
|
103,269
|
|
|||||
Capital
|
9,070
|
|
10,905
|
|
10,801
|
|
11,320
|
|
11,267
|
|
|||||
Total segment revenues
|
125,227
|
|
123,719
|
|
119,410
|
|
120,894
|
|
114,536
|
|
|||||
Corporate items and eliminations
|
(3,135
|
)
|
(26
|
)
|
(2,024
|
)
|
(3,709
|
)
|
(1,292
|
)
|
|||||
Consolidated revenues
|
$
|
122,092
|
|
$
|
123,693
|
|
$
|
117,386
|
|
$
|
117,184
|
|
$
|
113,245
|
|
|
|
|
|
|
|
||||||||||
Segment profit
|
|
|
|
|
|
||||||||||
Power
|
$
|
2,786
|
|
$
|
5,091
|
|
$
|
4,772
|
|
$
|
4,731
|
|
$
|
4,437
|
|
Renewable Energy
|
727
|
|
576
|
|
431
|
|
694
|
|
485
|
|
|||||
Oil & Gas(b)
|
220
|
|
1,392
|
|
2,427
|
|
2,758
|
|
2,357
|
|
|||||
Aviation
|
6,642
|
|
6,115
|
|
5,507
|
|
4,973
|
|
4,345
|
|
|||||
Healthcare
|
3,448
|
|
3,161
|
|
2,882
|
|
3,047
|
|
3,048
|
|
|||||
Transportation
|
824
|
|
1,064
|
|
1,273
|
|
1,130
|
|
1,166
|
|
|||||
Lighting(a)
|
93
|
|
199
|
|
674
|
|
431
|
|
381
|
|
|||||
Total industrial segment profit
|
14,740
|
|
17,598
|
|
17,966
|
|
17,764
|
|
16,220
|
|
|||||
Capital
|
(6,765
|
)
|
(1,251
|
)
|
(7,983
|
)
|
1,209
|
|
401
|
|
|||||
Total segment profit
|
7,975
|
|
16,347
|
|
9,983
|
|
18,973
|
|
16,621
|
|
|||||
Corporate items and eliminations
|
(7,871
|
)
|
(4,226
|
)
|
(5,108
|
)
|
(6,225
|
)
|
(6,002
|
)
|
|||||
GE interest and other financial charges
|
(2,753
|
)
|
(2,026
|
)
|
(1,706
|
)
|
(1,579
|
)
|
(1,333
|
)
|
|||||
GE provision for income taxes
|
(3,259
|
)
|
(967
|
)
|
(1,506
|
)
|
(1,634
|
)
|
(1,667
|
)
|
|||||
Earnings (loss) from continuing operations
|
|
|
|
|
|
||||||||||
attributable to GE common shareowners
|
(5,907
|
)
|
9,128
|
|
1,663
|
|
9,535
|
|
7,618
|
|
|||||
Earnings (loss) from discontinued operations, net of taxes
|
(309
|
)
|
(954
|
)
|
(7,495
|
)
|
5,855
|
|
5,475
|
|
|||||
Less net earnings (loss) attributable to
|
|
|
|
|
|
||||||||||
noncontrolling interests, discontinued operations
|
6
|
|
(1
|
)
|
312
|
|
157
|
|
36
|
|
|||||
Earnings (loss) from discontinued operations,
|
|
|
|
|
|
||||||||||
net of taxes and noncontrolling interests
|
(315
|
)
|
(952
|
)
|
(7,807
|
)
|
5,698
|
|
5,439
|
|
|||||
Consolidated net earnings (loss)
|
|
|
|
|
|
||||||||||
attributable to GE common shareowners
|
$
|
(6,222
|
)
|
$
|
8,176
|
|
$
|
(6,145
|
)
|
$
|
15,233
|
|
$
|
13,057
|
|
(a)
|
Lighting segment included Appliances for the years ended December 31, 2013, 2014, 2015, and through its disposition in the second quarter of 2016.
|
(b)
|
Subsequent to the Baker Hughes transaction, restructuring and other charges are included in the determination of segment profit for our Oil & Gas segment.
Oil & Gas segment profit excluding restructuring and other charges* was $899 million for the year ended December 31, 2017.
|
MD&A
|
SEGMENT OPERATIONS
|
|
INDUSTRIAL SEGMENT REVENUES
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Equipment(a)(c)
|
$
|
58.5
|
|
$
|
60.6
|
|
$
|
60.9
|
|
Services(b)(c)
|
57.7
|
|
52.3
|
|
47.8
|
|
|||
Total(d)
|
$
|
116.2
|
|
$
|
112.8
|
|
$
|
108.6
|
|
(a)
|
In 2017, $
56.3
billion, excluding $
2.2
billion related to Baker Hughes*.
|
(b)
|
In 2017, $
54.6
billion, excluding $
3.1
billion related to Baker Hughes*.
|
(c)
|
For the purposes of the MD&A, "services" refers to sales under product services agreements and sales of both goods (such as spare parts and equipment upgrades) and related services (such as monitoring, maintenance and repairs). For the purposes of the financial statement display of sales and costs of sales in our Statement of Earnings (Loss), “goods” is required by SEC regulations to include all sales of tangible products, and “services” must include all other sales, including other services activities.
|
(d)
|
Industrial segment refers to the sum of our seven industrial reporting segments, without giving effect to corporate items or the elimination of transactions among such segments and between these segments and our Financial Services segment. Therefore, industrial segment revenues will not agree to GE revenues as shown in the Statement of Earnings (Loss).
|
INDUSTRIAL SEGMENT PROFIT AND PROFIT MARGIN
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Segment profit(a)
|
$
|
14.7
|
|
$
|
17.6
|
|
$
|
18.0
|
|
Segment profit margin
|
13.3
|
%
|
15.6
|
%
|
16.5
|
%
|
(a)
|
In 2017, $
15.1
billion, excluding $
(0.4)
billion related to Baker Hughes*.
|
2017 – 2016 COMMENTARY
|
•
|
Industrial segment revenues increased $
3.3
billion, or
3%
, driven by increases at Oil & Gas primarily due to Baker Hughes, Renewable Energy, Aviation and Healthcare, partially offset by decreases at Power, Transportation and Lighting.
|
•
|
Industrial segment profit decreased $
2.9
billion, or
16%
, primarily due to lower earnings at Power driven by negative variable cost productivity, Oil & Gas primarily due to restructuring costs associated with Baker Hughes, and Transportation driven by lower volume and negative variable cost productivity. These decreases were partially offset by higher earnings at Aviation, Healthcare, Renewable Energy and Lighting.
|
•
|
Industrial segment margin decreased 230 basis points to 13.3% in 2017 from 15.6% in 2016 driven by negative cost productivity, price pressure and business mix. The decrease in industrial segment margin reflects decreases at Power, Oil & Gas and Transportation, offset by increases at Aviation, Renewable Energy, Healthcare and Lighting.
|
2016 – 2015 COMMENTARY
|
•
|
Industrial segment revenues increased $
4.2
billion, or
4%
, primarily driven by increases at Power and Renewable Energy, mainly due to the effects of the Alstom acquisition, as well as an organic* increase at Renewable Energy, partially offset by lower revenues at Oil & Gas and Transportation, including the effects of foreign currency exchange of $0.3 billion at Oil & Gas.
|
•
|
Industrial segment acquisition revenues, driven by Alstom, were partially offset by the effects of disposition revenues related to the sale of Appliances in the second quarter of 2016 and sales of Meters, Intelligent Platforms Embedded Systems Products and Signaling businesses in 2015.
|
•
|
Industrial segment profit decreased $0.4 billion, or 2%, mainly driven by lower earnings organically* at Oil & Gas, Lighting and Transportation, as well as an unfavorable impact of foreign exchange, partially offset by higher earnings at Aviation, Power, Healthcare and Renewable Energy.
|
•
|
Industrial segment profit margin decreased 90 basis points to 15.6% in 2016 from 16.5% in 2015, primarily driven by the effects of Alstom results. Excluding Alstom*, industrial segment profit margin was 16.8%, compared with 17.0% in 2015, reflecting core decreases at Power, Oil & Gas and Lighting, that more than offset increases at Aviation, Healthcare and Transportation.
|
MD&A
|
SEGMENT OPERATIONS | POWER
|
Leader: Russell Stokes
|
|
Headquarters & Operations
|
||
|
• Senior Vice President, GE and President & CEO, GE Power
•
Over 20 years of service with General Electric
|
|
|
• 29% of total segment revenues
• 31% of industrial segment revenues
• 19% of industrial segment profit
• Headquarters: Schenectady, NY
• Serving customers in 150+ countries
• Employees: approximately 83,500
|
Products & Services
|
|
Power serves power generation, industrial, government and other customers worldwide with products and services related to energy production and water reuse. Our products and technologies harness resources such as oil, gas, coal, diesel, nuclear and water to produce electric power and include gas and steam turbines, full balance of plant, upgrade and service solutions, as well as data-leveraging software.
|
•
|
Gas Power Systems
–
offers a wide spectrum of heavy-duty and aeroderivative gas turbines for utilities, independent power producers and numerous industrial applications, ranging from small, mobile power to utility scale power plants.
|
•
|
Steam Power Systems
–
offers steam power technology for coal and nuclear applications including boilers, generators, steam turbines and Air Quality Control Systems (AQCS) to help efficiently produce power and provide performance over the life of a power plant.
|
•
|
Power Services
–
delivers maintenance, service and upgrade solutions across total plant assets and over their operational lifecycle, leveraging the Industrial Internet to improve the performance of such solutions.
|
•
|
Distributed Power
–
provides technology-based products and services to generate reliable and efficient power at or near the point of use. The product portfolio features highly efficient, fuel flexible industrial gas engines, including Jenbacher and Waukesha engines, that generate power for numerous industries globally.
|
•
|
GE Hitachi Nuclear
–
offers advanced reactor technologies solutions, including reactors, fuels and support services for boiling water reactors, through joint ventures with Hitachi and Toshiba, for safety, reliability and performance for nuclear fleets.
|
•
|
Industrial Solutions
- creates advanced technologies that safely, reliably and efficiently distribute and control electricity to protect people, property, and equipment. Offerings include high performance software, control solutions and products such as circuit breakers, relays, arresters, switchgear and panel boards. The portfolio supports the commercial, data center, healthcare, mining, renewable energy, oil & gas, water and telecommunication sectors.
|
•
|
Grid Solutions
- a GE and Alstom joint venture that offers products and services, such as high voltage equipment, power electronics, automation and protection equipment and software solutions, and serves industries such as generation, transmission, distribution, oil & gas, telecommunication, mining and water.
|
•
|
Power Conversion
- applies the science and systems of power conversion to provide motors, generators, automation and control equipment and drives for energy intensive industries such as marine, oil & gas, renewable energy, mining, rail, metals, test systems and water.
|
•
|
Automation & Controls
- serves as the Controls Center of Excellence for GE and partners with GE Digital, the Global Research Center, and GE businesses around the world to provide control solutions to help customers become more productive and efficient.
|
•
|
Water & Process Technologies
- provides comprehensive chemical and equipment solutions and services to help manage and optimize water resources across numerous industries and municipalities, including water treatment, wastewater treatment and process system solutions. This business was sold to Suez in September of 2017 for
consideration of
$3.1 billion
, net of obligations assumed and cash transferred.
|
Competition & Regulation
|
MD&A
|
SEGMENT OPERATIONS | POWER
|
Significant Trends & Developments
|
•
|
In June of 2017, we announced the merger of the GE Power and GE Energy Connections businesses to create one power-focused business called GE Power.
|
•
|
In June of 2017, Steve Bolze, former President & CEO of legacy GE Power, announced his retirement with Russell Stokes assuming the role of President & CEO of the new GE Power business unit.
|
•
|
We completed the sale of our Water & Process Technologies business to Suez in October 2017.
|
•
|
We announced our plan to sell our Industrial Solutions business to ABB with a planned completion in the first half of 2018, subject to customary closing conditions and regulatory approval.
|
•
|
The new, combined GE Power business, will and has driven better customer focus, fewer redundancies and lower costs. However, to establish this new structure, we have had to execute significant restructuring actions.
|
•
|
The integration of Alstom’s Thermal and Grid businesses has continued to yield significant efficiencies in supply chain, service infrastructure, new product development and SG&A costs.
|
•
|
Digital offerings have been developed to further complement our equipment and services business and drive value and better outcomes for our customers.
|
•
|
The business has continued to invest in new product development, such as our HA-Turbines, reciprocating engines, advanced upgrades, substation automation, connected controls, micro-grids, energy storage and digital solutions, to expand our equipment and services offerings.
|
•
|
Subsequent to the large investment needed to develop our HA-Turbines, we expect overall research and development costs to decrease going forward in order to better align with the economic realities of the end demand markets.
|
•
|
Changing customer behaviors and shifts in demand to new regional markets are requiring offerings that can include extended scope and financing.
|
•
|
Significant declines in the market have prompted a deeper analysis of inventory utilization and resulted in additional charges related to slow-moving and obsolete inventory in our Power Services, Gas Power Systems and Power Conversion businesses.
|
•
|
Power faces pressure in the market driven by a changing energy mix with more emphasis on renewables and lower demand for thermal generation affecting both new unit additions and installed base services.
|
•
|
Macroeconomic and geopolitical environments, excess capacity in developed markets and continued pressure in oil and gas applications result in uncertainty for the industry and business.
|
•
|
We expect the overall market for new gas orders in 2018 to be less than 35 gigawatts, and we are executing restructuring efforts in 2018 to support a market that could be as low as 30 gigawatts next year. We expect restructuring efforts to continue into 2019.
|
•
|
In 2017, we reduced structural costs* by $0.8 billion, excluding the effects of acquisition and disposition activity, for the year and reduced our manufacturing and repair footprint by 15 sites.
|
•
|
We have made significant changes and are heavily focused on improving our operational and project execution across every business in Power. We expect operations to stabilize in 2018, with improving execution, a refocused services strategy and strong execution on cost reduction.
|
MD&A
|
SEGMENT OPERATIONS | POWER
|
GEOGRAPHIC REVENUES
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
U.S.
|
$
|
11.3
|
|
$
|
11.7
|
|
Non-U.S.
|
|
|
||||
Europe
|
6.3
|
|
6.5
|
|
||
Asia
|
6.8
|
|
7.0
|
|
||
Americas
|
3.7
|
|
4.1
|
|
||
Middle East and Africa
|
8.0
|
|
7.5
|
|
||
Total Non-U.S.
|
$
|
24.7
|
|
$
|
25.1
|
|
Total
|
$
|
36.0
|
|
$
|
36.8
|
|
|
|
|
||||
Non-U.S. Revenues as a % of Segment Revenues
|
69
|
%
|
68
|
%
|
SUB-SEGMENT REVENUES
|
|
|
||
|
2017
|
|
2016
|
|
|
|
|
||
Gas Power Systems(a)
|
23
|
%
|
21
|
%
|
Power Services
|
38
|
%
|
39
|
%
|
Steam Power Systems
|
5
|
%
|
5
|
%
|
Energy Connections(b)
|
28
|
%
|
27
|
%
|
Other(c)
|
6
|
%
|
8
|
%
|
(a) Includes Distributed Power
(b) Includes Industrial Solutions, Grid Solutions, Power Conversion and Automation & Controls (c) Includes Water & Process Technologies and GE Hitachi Nuclear |
ORDERS AND BACKLOG
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Orders
|
|
|
||||
Equipment
|
$
|
18.0
|
|
$
|
21.8
|
|
Services
|
19.0
|
|
20.8
|
|
||
Total
|
$
|
37.0
|
|
$
|
42.6
|
|
|
|
|
||||
Backlog
|
|
|
||||
Equipment
|
$
|
27.0
|
|
$
|
26.7
|
|
Services
|
71.3
|
|
68.9
|
|
||
Total
|
$
|
98.4
|
|
$
|
95.6
|
|
UNIT SALES
|
|||||
|
2017
|
|
2016
|
V
|
|
Gas Turbines
|
102
|
|
104
|
(2
|
)
|
MD&A
|
SEGMENT OPERATIONS | POWER
|
SEGMENT REVENUES
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Equipment
|
$
|
17.8
|
|
$
|
17.5
|
|
$
|
13.5
|
|
Services
|
18.2
|
|
19.3
|
|
15.4
|
|
|||
Total
|
$
|
36.0
|
|
$
|
36.8
|
|
$
|
28.9
|
|
|
|
|
|
||||||
SEGMENT PROFIT AND PROFIT MARGIN
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Segment profit
|
$
|
2.8
|
|
$
|
5.1
|
|
$
|
4.8
|
|
Segment profit margin
|
7.7
|
%
|
13.8
|
%
|
16.5
|
%
|
COMMENTARY:
|
2017 – 2016
|
•
|
The power market continues to be
challenged by the increasing penetration of renewable energy, fleet penetration for AGPs, lower capacity payments, utilization, and service outages which
decreased 8% from the prior year. In addition, e
xcess capacity in developed markets, continued pressure in oil and gas applications and macroeconomic and geopolitical environments have created uncertainty in the industry.
|
•
|
The decrease in profit was partially driven by $0.9 billion of charges in the fourth quarter primarily related to slow moving and obsolete inventory in Power Services, Gas Power Systems, and Power Conversion, a litigation settlement and a bankruptcy of a distributor. Profit further declined due to negative variable cost productivity, unfavorable business mix due to higher revenues from lower margin balance of plant volume and fewer higher margin aeroderivative units, and price pressure. These decreases were partially offset by positive base cost productivity.
|
2016 – 2015
|
•
|
The Alstom acquisition in November 2015 contributed $11.7 billion of inorganic revenue growth in 2016. Core services revenue increased primarily at Power Servic
es due to 40 more AGP upgrades. Core equipment revenues decreased primarily at Gas Power Systems due to 42 fewer generators, 11 fewer gas steam turbines, and three fewer gas turbines, partially offset by nine more aeroderivative units shipped compared to the prior year.
|
•
|
The increase in profit was mainly driven by the effects of the Alstom acquisition. Core profit decreased due to negative variable cost productivity on lower volume and unfavorable business mix attributable to a shift to the newer H-class gas turbines as these units carry a lower margin rate than the more mature gas turbine products. These decreases were partially offset by direct material deflation.
|
MD&A
|
SEGMENT OPERATIONS | RENEWABLE ENERGY
|
Leader: Jérôme Pécresse
|
|
Headquarters & Operations
|
||
|
• Senior Vice President, GE and President & CEO, GE Renewable Energy
• Former Alstom Renewable Power Executive Vice President
|
|
|
• 8% of total segment revenues
• 9% of industrial segment revenues
• 5% of industrial segment profit
• Headquarters: Paris, France
• Serving customers in 80+ countries
• Employees: approximately 21,000
|
Products & Services
|
|
GE Renewable Energy makes renewable power sources affordable, accessible and reliable for the benefit of people everywhere. With one of the broadest technology portfolios in the industry, Renewable Energy creates value for customers with solutions from onshore and offshore wind, hydro and its wind turbine blade manufacturing business. With operations in over 40 countries around the world, Renewable Energy can deliver solutions to where its customers need them most.
|
•
|
Onshore Wind
–
provides technology and services for the onshore wind power industry by providing wind turbine platforms and hardware and software to optimize wind resources. Wind services help customers improve availability and value of their assets over the lifetime of the fleet. Digital Wind Farm is a site level solution, creating a dynamic, connected and adaptable ecosystem that improves our customers’ fleet operations.
|
•
|
Offshore Wind
–
offers its high-yield offshore wind turbine, Haliade 150-6MW, which is compatible with bottom fixed and floating foundations. It uses the innovative pure torque design and the Advanced High Density direct-drive Permanent Magnet Generator. Wind services support customers over the lifetime of their fleet.
|
•
|
Hydro
– provides a full range of solutions, products and services to serve the hydropower industry from initial design to final commissioning, from Low Head / Medium / High Head hydropower plants to pumped storage hydropower plants, small hydropower plants.
|
•
|
LM Wind Power
- designs and manufactures blades for onshore and offshore wind turbines. LM became part of GE after a $1.7 billion acquisition in April 2017 and adds value for GE, as well as external customers worldwide, through advanced rotor solutions, improved blade efficiency, increased rotor swept-area, proven reliability and a global manufacturing footprint on or close to all major markets for wind.
|
Competition & Regulation
|
MD&A
|
SEGMENT OPERATIONS | RENEWABLE ENERGY
|
Significant Trends & Developments
|
•
|
Renewable energy has experienced a surge of development in the last decade. Renewable energy capacity additions account for more than half of all power plant additions worldwide. In the U.S. and beyond, traditional utilities and large brands are increasingly choosing renewable energy options - including onshore and offshore wind - based on cost as well as environmental benefits.
|
•
|
Consequently, the renewable energy market is highly competitive, particularly in onshore wind, resulting in significant pricing pressure.
|
•
|
Visible brands like Amazon, Google and Microsoft are increasingly contracting for output from wind and solar farms directly using Power Purchase Agreements (PPAs). GE’s EFS business has enabled several deals of this nature that use wind turbines from GE Renewable Energy’s Onshore Wind unit.
|
•
|
The onshore wind market continues to see megawatt (MW) growth as customer preference has shifted from 1.X models to larger, more efficient units.
|
•
|
The market to “repower” existing wind turbines – i.e., upgrade units that have been in service for a number of years to increase their efficiency and performance – is growing in the U.S. as the existing onshore wind turbine fleet is aging. Repowering allows customers to increase the annual energy output of their installed base, provide more competitively priced energy and extend the life of their assets.
|
•
|
New Product Introductions (NPIs) continue to be a key lever as our customers show a willingness to invest in new technology that decreases the levelized cost of energy. In September 2017, we introduced a new 4.8 MW turbine with 158 meter rotor diameter designed to reach the onshore industry’s highest Annual Energy Production rate, reducing the cost of energy for customers with low to medium wind speed sites.
|
•
|
In 2016, we introduced a new software applications suite for the Digital Wind Farm that can reduce maintenance costs by up to ten percent and deliver one-to-three percent of additional revenue per site. The company announced in July 2017 that the 2,000 MW Wind Catcher project in Oklahoma, which will be the largest wind farm in the U.S., will use Digital Wind Farm solutions to support Asset Performance Management and Operations Optimization.
|
•
|
While the uncertainty created by the U.S. tax reform debate resulted in certain orders being pushed to 2018, it had limited impact on our fourth quarter of 2017 performance. The final U.S. tax reform legislation preserved the Production Tax Credit (PTC), a positive outcome for the wind industry. However, while the tax equity market continues to function, the legislation has created some near-term uncertainty around the amount of available tax equity financing as financial institutions fully evaluate the impacts of the new tax law.
|
•
|
Pricing for our Onshore Wind business was down in 2017 due to the impact of auctions in many international markets and the competitive environment across all renewable sources.
|
•
|
Looking ahead, with a high level of price pressure likely persisting in 2018, we are continuing to focus on taking cost out of our NPI machines, including the 2.X, in-sourcing blade production and developing larger, more efficient turbines.
|
•
|
We believe that North America will continue to be a solid market in the near term with two main dynamics at play. First, we expect a ramp in 2019-2020 leading up to the expiration of the PTC at 100% value in 2020. Second, we expect Repower upgrades to complement a steadily growing renewable energy market.
|
•
|
Outside of North America, there continues to be solid growth in India, East Asia, Australia and newer markets in Latin America. Europe continues to be stable; however, given our relatively smaller market position, we are investing to grow faster than the market in that region.
|
MD&A
|
SEGMENT OPERATIONS | RENEWABLE ENERGY
|
GEOGRAPHIC REVENUES
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
U.S.
|
$
|
4.8
|
|
$
|
5.2
|
|
Non-U.S.
|
|
|
||||
Europe
|
1.9
|
|
1.5
|
|
||
Asia
|
1.0
|
|
0.8
|
|
||
Americas
|
2.0
|
|
1.0
|
|
||
Middle East and Africa
|
0.6
|
|
0.5
|
|
||
Total Non-U.S.
|
$
|
5.4
|
|
$
|
3.8
|
|
Total
|
$
|
10.3
|
|
$
|
9.0
|
|
|
|
|
||||
Non-U.S. Revenues as a % of Segment Revenues
|
53
|
%
|
42
|
%
|
SUB-SEGMENT REVENUES
|
|
|
||
|
2017
|
|
2016
|
|
|
|
|
||
Onshore Wind
|
86
|
%
|
89
|
%
|
Offshore Wind
|
3
|
%
|
3
|
%
|
Hydro
|
11
|
%
|
8
|
%
|
ORDERS AND BACKLOG
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Orders
|
|
|
||||
Equipment
|
$
|
8.2
|
|
$
|
8.5
|
|
Services
|
2.2
|
|
1.7
|
|
||
Total
|
$
|
10.4
|
|
$
|
10.3
|
|
|
|
|
||||
Backlog
|
|
|
||||
Equipment
|
$
|
8.1
|
|
$
|
7.8
|
|
Services
|
6.9
|
|
5.3
|
|
||
Total
|
$
|
15.0
|
|
$
|
13.1
|
|
UNIT SALES
|
||||||
|
2017
|
|
2016
|
|
V
|
|
Wind Turbines
|
2,825
|
|
3,289
|
|
(464
|
)
|
MD&A
|
SEGMENT OPERATIONS | RENEWABLE ENERGY
|
SEGMENT REVENUES
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Equipment
|
$
|
8.1
|
|
$
|
8.2
|
|
$
|
5.8
|
|
Services
|
2.2
|
|
0.9
|
|
0.5
|
|
|||
Total
|
$
|
10.3
|
|
$
|
9.0
|
|
$
|
6.3
|
|
|
|
|
|
||||||
SEGMENT PROFIT AND PROFIT MARGIN
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Segment profit
|
$
|
0.7
|
|
$
|
0.6
|
|
$
|
0.4
|
|
Segment profit margin
|
7.1
|
%
|
6.4
|
%
|
6.9
|
%
|
COMMENTARY:
|
2017 – 2016
|
•
|
The renewable energy market remains competitive, particularly in onshore wind. The onshore wind market continues to see megawatt growth as customer preference has shifted from 1.X models to larger, more efficient units. However, there is significant competitive pricing pressure driven by onshore turbines.
|
•
|
The increase in profit was due to positive variable cost productivity, material deflation and increased other income including a reduction in foreign exchange transactional losses. These increases were partially offset by negative base cost productivity and price pressure.
|
2016 – 2015
|
•
|
The Alstom acquisition in November 2015 contributed $1.2 billion of inorganic revenue growth in 2016. Core equipment and services revenues increased due to higher volume at Onshore Wind as a result of increased repowering projects, 420 more wind turbines shipments and 32% more megawatts shipped than in the prior year. These increases were partially offset by decreased other income including foreign exchange transactional losses, the effects of a stronger U.S. dollar versus the Brazilian real and lower prices due to competitive pressure from other wind turbine producers and other energy sources.
|
•
|
The increase in profit was due to higher volume in Onshore Wind and Hydro due to the Alstom acquisition, material deflation, and product cost-out actions. These increases were partially offset by increased NPI spending on 2 and 3 megawatt units, price pressure and decreased other income including foreign exchange transactional losses.
|
MD&A
|
SEGMENT OPERATIONS | OIL & GAS
|
Leader: Lorenzo Simonelli
|
|
Headquarters & Operations
|
||
|
• Chairman, President & CEO Baker Hughes, a GE company
•
Over 20 years of service with General Electric
|
|
|
• 14% of total segment revenues
• 15% of industrial segment revenues
• 1% of industrial segment profit
• Headquarters: London, UK and Houston, TX
• Serving customers in ~120 countries
• Employees: over 64,000
|
Products & Services
|
|
Oil & Gas is a fullstream oilfield technology provider that has a unique mix of integrated oilfield products, services and digital solutions. We conduct business in more than 120 countries. We operate through our four business segments: Oilfield Services, Oilfield Equipment, Turbomachinery & Processing Solutions and Digital Solutions.
|
•
|
Oilfield Services
–
provides equipment and services ranging from well evaluation to decommissioning. Products and services include diamond and tri-cone drill bits, drilling services (including directional drilling technology, measurement while drilling and logging while drilling), downhole completion tools and systems, wellbore intervention tools and services, wireline services, drilling and completions fluids, oilfield and industrial chemicals, pressure pumping and artificial lift technologies (including electrical submersible pumps).
|
•
|
Oilfield Equipment
–
provides a broad portfolio of products and services required to facilitate the safe and reliable flow of hydrocarbons from the subsea wellhead to the surface. Products and services include pressure control equipment and services, subsea production systems and services, drilling equipment and flexible pipeline systems. Oilfield Equipment operation designs and manufactures onshore and offshore drilling and production systems and equipment for floating production platforms and provides a full range of services related to onshore and offshore drilling activities.
|
•
|
Turbomachinery & Process Solutions
–
provides equipment and related services for mechanical-drive, compression and power-generation applications across the oil and gas industry as well as products and services to serve the downstream segments of the industry including refining, petrochemical, distributed gas, flow and process control and other industrial applications. The Turbomachinery & Process Solutions portfolio includes drivers (aero-derivative gas turbines, heavy-duty gas turbines and synchronous and induction electric motors), compressors (centrifugal and axial, direct drive high speed, integrated, subsea compressors, turbo expanders and reciprocating), turn-key solutions (industrial modules and waste heat recovery), pumps, valves and compressed natural gas (CNG) and small-scale liquefied natural gas (LNG) solutions used primarily for shale oil and gas field development.
|
•
|
Digital Solutions
–
provides equipment and services for a wide range of industries, including oil & gas, power generation, aerospace, metals and transportation. The offerings include sensor-based measurement, non-destructive testing and inspection, turbine, generator and plant controls and condition monitoring, as well as pipeline integrity solutions.
|
Competition & Regulation
|
MD&A
|
SEGMENT OPERATIONS | OIL & GAS
|
Significant Trends & Developments
|
•
|
On July 3, 2017, we completed the transaction to create Baker Hughes, a GE company (BHGE). Under the terms of the deal, we combined our Oil & Gas business and Baker Hughes Incorporated (Baker Hughes) to create a new company in which GE holds an ownership interest of approximately 62.5% and former Baker Hughes shareholders hold an ownership interest of approximately 37.5%. Effective July 3, 2017, the operations of Baker Hughes are reported in our Oil & Gas segment. The combined business is a leading equipment, technology and services provider in the oil and gas industry.
|
•
|
Continuing market weakness including lower oil prices has led to reductions in customers’ forecasted capital expenditures and lower convertible orders, creating industry challenges, the effects of which are uncertain. In addition, decreased U.S. rig count and lower drilling activity versus prior peaks in the early 2000s has reduced the need for new wells, rigs, and replacement equipment.
|
•
|
We are also impacted by volatility in foreign currency exchange rates mainly due to a high concentration of non-U.S. dollar denominated business as well as long-term contracts denominated in multiple currencies.
|
•
|
In 2017, we experienced several indicators of improvement in activity. Demand for oil was higher than expected due to robust consumption in North American and revisions to Chinese, Russian and European demand growth expectations.
|
•
|
In 2017, total rig count increased 27% to an average of 2,030 from an average of 1,598 in 2016. This increase was driven by an increase in North American rig count from 642 in 2016 to 1,082 in 2017, primarily attributable to an increase in land rig count, partially offset by a decrease in offshore rig count.
|
•
|
Oil prices reached a low early in 2016 due to the impending production increases in Iran after economic sanctions were lifted. However, during the fourth quarter of 2017, OPEC announced extensions to agreed-upon production cuts, shifting Brent oil prices higher towards the end of the year.
|
•
|
In North America, customer spending is highly driven by WTI oil prices, which fluctuated significantly throughout the year. Average WTI oil prices increased to $50.80/Bbl in 2017 from $43.29/Bbl in 2016 and ranged from a low of $42.48/Bbl in June 2017 to a high of $60.46/Bbl in December 2017.
|
•
|
Outside of North America, customer spending is influenced by Brent oil prices, which also fluctuated significantly throughout the year. Average Brent oil prices increased to $54.12/Bbl in 2017 from $43.64/Bbl in 2016 and ranged from a low of $43.98/Bbl in June 2017 to a high of $68.80/Bbl in December 2017.
|
•
|
While we saw an increase in commodity prices during 2017, we have yet to see a sustained change in customer spending behavior, and we expect final investment decisions to continue to remain fluid due to continued oil price volatility.
|
MD&A
|
SEGMENT OPERATIONS | OIL & GAS
|
GEOGRAPHIC REVENUES
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
U.S.
|
$
|
4.4
|
|
$
|
3.1
|
|
Non-U.S.
|
|
|
||||
Europe
|
3.0
|
|
2.4
|
|
||
Asia
|
2.6
|
|
2.3
|
|
||
Americas
|
2.5
|
|
1.9
|
|
||
Middle East and Africa
|
4.8
|
|
3.2
|
|
||
Total Non-U.S.
|
$
|
12.8
|
|
$
|
9.8
|
|
Total
|
$
|
17.2
|
|
$
|
12.9
|
|
|
|
|
||||
Non-U.S. Revenues as a % of Segment Revenues
|
75
|
%
|
76
|
%
|
SUB-SEGMENT REVENUES
|
|
|
||
|
2017
|
|
2016
|
|
|
|
|
||
Turbomachinery & Process Solutions (TPS)
|
37
|
%
|
50
|
%
|
Oilfield Services (OFS)(a)
|
35
|
%
|
6
|
%
|
Oilfield Equipment (OFE)(b)
|
14
|
%
|
27
|
%
|
Digital Solutions
|
14
|
%
|
17
|
%
|
(a)
Previously referred to as Surface
(b)
Previously referred to as Subsea Systems & Drilling
|
ORDERS AND BACKLOG
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Orders
|
|
|
||||
Equipment
|
$
|
6.8
|
|
$
|
3.7
|
|
Services
|
10.4
|
|
7.4
|
|
||
Total(a)
|
$
|
17.2
|
|
$
|
11.1
|
|
(a) Included $5.2 billion related to Baker Hughes in 2017
|
|
|
||||
|
|
|
||||
Backlog
|
|
|
||||
Equipment
|
$
|
5.4
|
|
$
|
6.5
|
|
Services
|
15.7
|
|
14.3
|
|
||
Total
|
$
|
21.0
|
|
$
|
20.8
|
|
MD&A
|
SEGMENT OPERATIONS | OIL & GAS
|
SEGMENT REVENUES
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Equipment(a)
|
$
|
7.2
|
|
$
|
6.0
|
|
$
|
8.3
|
|
Services(b)
|
10.0
|
|
6.9
|
|
8.1
|
|
|||
Total
|
$
|
17.2
|
|
$
|
12.9
|
|
$
|
16.5
|
|
(a) $5.1 billion, excluding $2.2 billion related to Baker Hughes* in 2017
(b) $7.0 billion, excluding $3.1 billion related to Baker Hughes* in 2017
|
|
|
|
||||||
|
|
|
|
||||||
SEGMENT PROFIT AND PROFIT MARGIN
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Segment profit(a)
|
$
|
0.2
|
|
$
|
1.4
|
|
$
|
2.4
|
|
Segment profit margin
|
1.3
|
%
|
10.8
|
%
|
14.8
|
%
|
|||
(a) $0.6 billion, excluding $(0.4) billion related to Baker Hughes* in 2017
(b) 4.8%, excluding (6.8)% related to Baker Hughes* in 2017
|
|
|
|
COMMENTARY:
|
2017 – 2016
|
•
|
The oil and gas market remained challenging in 2017. Despite some improvements in activity, there were no significant increases in customer capital commitments, and oil prices remained volatile for the majority of the year. While oil prices stabilized towards the end of 2017 and North American rig count increased, major equipment project awards continued to be pushed out in the Oilfield Equipment and TPS businesses.
|
•
|
The decrease in profit was primarily driven by negative variable cost productivity, restructuring and other charges, lower prices and lower organic volume, partially offset by increased volume from Baker Hughes, deflation and increased other income including a reduction in foreign exchange transactional losses.
|
2016 – 2015
|
•
|
The oil and gas market continued to be challenging in 2016, primarily due to uncertainty and volatility in oil and gas prices. While there were indications of positive trends, the industry continued to focus on cost rationalization and capital spending reductions to align its cost structure with economics conditions.
|
•
|
The decrease in profit was primarily driven by continuing market weakness resulting in lower core volume across all sub-segments and lower oil prices, which, despite the effects of cost-out initiatives including restructuring actions, drove lower cost productivity. These decreases were partially offset by material deflation.
|
MD&A
|
SEGMENT OPERATIONS | AVIATION
|
Leader: David Joyce
|
|
Headquarters & Operations
|
||
|
• Vice Chairman, GE and President & CEO, GE Aviation
•
Over 30 years of service with General Electric
|
|
|
• 22% of total segment revenues
• 24% of industrial segment revenues
• 45% of industrial segment profit
• Headquarters: Cincinnati, OH
• Serving customers in 120+ countries
• Employees: approximately 44,500
|
Products & Services
|
|
Aviation designs and produces commercial and military aircraft engines, integrated digital components, electric power and mechanical aircraft systems. We also provide aftermarket services to support our products.
|
•
|
Commercial Engines
–
manufactures jet engines and turboprops for commercial airframes. Our commercial engines power aircraft in all categories; regional, narrowbody and widebody. We also manufacture engines and components for business and general aviation segments.
|
•
|
Commercial Services
–
provides maintenance, component repair and overhaul services (MRO), including sales of replacement parts.
|
•
|
Military
–
manufactures jet engines for military airframes. Our military engines power a wide variety of military aircraft including fighters, bombers, tankers, helicopters and surveillance aircraft, as well as marine applications. We provide maintenance, component repair and overhaul services, including sales of replacement parts.
|
•
|
Systems
–
provides components, systems and services for commercial and military segments. This includes avionics systems, aviation electric power systems, flight efficiency and intelligent operation services, aircraft structures and Avio Aero.
|
•
|
Additive
–
provides a wide variety of products and services including additive machines from Concept Laser and Arcam EBM, additive materials (including metal powders from AP&C), and additive engineering services through our consultancy brand AddWorks
TM
. In November 2017, GE Additive also acquired software simulation company GeonX.
|
•
|
We also produce and market engines through CFM International, a company jointly owned by GE and Snecma, a subsidiary of SAFRAN of France, and Engine Alliance, LLC, a company jointly owned by GE and the Pratt & Whitney division of United Technologies Corporation. New engines are also being designed and marketed in a joint venture with Honda Aero, Inc., a division of Honda Motor Co., Ltd.
|
Competition & Regulation
|
MD&A
|
SEGMENT OPERATIONS | AVIATION
|
Significant Trends & Developments
|
•
|
Global passenger air travel continued to grow during the year. In 2017, revenue passenger kilometers (RPKs) growth outpaced the five-year average, increasing 7.6%* with strong growth both domestically and internationally and demand exceeding capacity. RPK growth is expected to remain strong in 2018 although at a lower growth rate.
|
•
|
In 2017, air freight volume rebounded, and freight ton kilometers (FTKs) grew 9.0%*, particularly in international markets with demand exceeding capacity for the year.
|
•
|
Passenger load factors globally remained above 80%*.
|
•
|
Airline fuel costs are expected to rise in 2018 due to rising oil prices.
|
•
|
The installed base continues to grow with new product launches. In 2016, through our CFM joint venture, we successfully launched the LEAP engine for application on the Airbus A320 NEO. Another variant of the engine, applied to the Boeing 737 MAX aircraft entered into in service in 2017. A third variant of the LEAP engine, for the COMAC C919, had its first flight in 2017. We are also continuing development on the Advanced Turbo Prop program and the GE9X engine, incorporating the latest technologies for application in the widebody aircraft space. In 2018, we will ship the first Passport engines, powering the Bombardier Global 7000 business jet.
|
•
|
During 2017, Aviation delivered 459 LEAP engines with cost reductions in line with production cost curve expectations. LEAP reliability and performance specification continued to be on track. We expect to meet our ramp commitments in 2018 with a production volume of more than 2,000 engines by 2020. This ramp is a significant undertaking, and we have made extensive investments through our Supply Chain processes and plant infrastructure to manage the production ramp. In addition, we have utilized a "Run at Rate" program to stress test the system and evaluate materials, manufacturability, training, process maturity, production line readiness, logistics and vertical supply chain readiness.
|
•
|
The LEAP ramp experienced minor issues with limited interruption to airframe delivery in 2017. All issues have been addressed within our Supply Chain and in certain cases, minor engine re-designs and field retrofits are underway.
|
•
|
Our digital industrial business is providing insights and operational value for our customers, allowing us to deliver more productivity beyond our traditional services and assist our customers in solving challenging operational problems. Our digital initiatives, including analytics on flight operations, technical operations, and advanced manufacturing, are enabling our customers, internal operations and suppliers to reduce costs, cycle time and improve quality.
|
•
|
On January 2, 2018, GE purchased additional shares of Arcam, AB to bring GE’s total ownership to 96%. On January 11, 2018, Arcam applied to the Nasdaq Stockholm exchange to commence delisting of the remaining shares. The last day of trading was January 26, 2018, and GE announced the delisting on January 30, 2018.
|
•
|
We expect an uptick in military shipments and continue to advance our next generation science and technology programs. 2018 will be a critical year for contract decisions on the next generation combat and helicopter engines.
|
MD&A
|
SEGMENT OPERATIONS | AVIATION
|
GEOGRAPHIC REVENUES
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
U.S.
|
$
|
10.8
|
|
$
|
10.6
|
|
Non-U.S.
|
|
|
||||
Europe
|
6.2
|
|
4.5
|
|
||
Asia
|
5.6
|
|
5.1
|
|
||
Americas
|
1.2
|
|
1.6
|
|
||
Middle East and Africa
|
3.6
|
|
4.5
|
|
||
Total Non-U.S.
|
$
|
16.6
|
|
$
|
15.7
|
|
Total
|
$
|
27.4
|
|
$
|
26.3
|
|
|
|
|
||||
Non-U.S. Revenues as a % of Segment Revenues
|
61
|
%
|
60
|
%
|
SUB-SEGMENT REVENUES
|
|
|
||
|
2017
|
|
2016
|
|
|
|
|
||
Commercial Engines & Services
|
73
|
%
|
74
|
%
|
Military
|
14
|
%
|
13
|
%
|
Systems & Other
|
13
|
%
|
13
|
%
|
ORDERS AND BACKLOG
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Orders
|
|
|
||||
Equipment
|
$
|
10.6
|
|
$
|
10.0
|
|
Services
|
18.9
|
|
16.3
|
|
||
Total
|
$
|
29.5
|
|
$
|
26.3
|
|
|
|
|
||||
Backlog
|
|
|
||||
Equipment
|
$
|
32.8
|
|
$
|
33.3
|
|
Services
|
137.7
|
|
121.3
|
|
||
Total
|
$
|
170.4
|
|
$
|
154.5
|
|
UNIT SALES
|
|||||||||
|
2017
|
|
2016
|
|
V
|
|
|||
Commercial Engines
|
2,630
|
|
2,747
|
|
(117
|
)
|
|||
LEAP Engines(a)
|
459
|
|
77
|
|
382
|
|
|||
Military Engines
|
617
|
|
571
|
|
46
|
|
|||
Spares Rate(b)
|
$
|
23.5
|
|
$
|
18.9
|
|
$
|
4.6
|
|
(a) LEAP engines are a subset of commercial engines
(b) Commercial externally shipped spares and spares used in time & material shop visits in millions of dollars per day
|
MD&A
|
SEGMENT OPERATIONS | AVIATION
|
SEGMENT REVENUES
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Equipment
|
$
|
10.8
|
|
$
|
11.6
|
|
$
|
11.8
|
|
Services
|
16.6
|
|
14.7
|
|
12.9
|
|
|||
Total
|
$
|
27.4
|
|
$
|
26.3
|
|
$
|
24.7
|
|
|
|
|
|
||||||
SEGMENT PROFIT AND PROFIT MARGIN
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Segment profit
|
$
|
6.6
|
|
$
|
6.1
|
|
$
|
5.5
|
|
Segment profit margin
|
24.3
|
%
|
23.3
|
%
|
22.3
|
%
|
COMMENTARY:
|
2017 – 2016
|
•
|
Global passenger air travel continued to grow with RPK growth outpacing the five-year average and demand exceeding capacity. Air freight volume volume rebounded, particularly in international markets, with FTK demand also exceeding capacity for the year.
|
•
|
The increase in profit was mainly due to higher cost productivity driven by structural cost reductions, as well as material deflation, higher services volume and higher prices. These increases were partially offset by an unfavorable business mix driven by negative LEAP margin impact.
|
2016 – 2015
|
•
|
Global passenger air travel continued to grow, particularly in international markets including India and China, with RPKs demand nearly reaching capacity. FTKs also increased despite continuing overcapacity in the market.
|
•
|
The increase in profit was mainly due to higher cost productivity driven by favorable SG&A and shop productivity and lower engineering spend, as well as higher services volume and higher prices. These increases were partially offset by material inflation and an unfavorable business mix driven by negative LEAP margin impact.
|
MD&A
|
SEGMENT OPERATIONS | HEALTHCARE
|
Leader: Kieran Murphy
|
|
Headquarters & Operations
|
||
|
• Senior Vice President, GE and President & CEO, GE Healthcare
•
10 years of service with General Electric
|
|
|
• 15% of total segment revenues
• 16% of industrial segment revenues
• 23% of industrial segment profit
• Headquarters: Chicago, IL
• Serving customers in 140+ countries
• Employees: approximately 52,000
|
Products & Services
|
|
Healthcare provides essential healthcare technologies to developed and emerging markets and has expertise in medical imaging, digital solutions, patient monitoring and diagnostics, drug discovery, biopharmaceutical manufacturing technologies and performance improvement solutions that are the building blocks of precision health. Products and services are sold worldwide primarily to hospitals, medical facilities, pharmaceutical and biotechnology companies, and to the life science research market.
|
•
|
Healthcare Systems
–
provides a wide range of technologies and services that include diagnostic imaging and clinical systems. Diagnostic imaging systems such as X-ray, digital mammography, computed tomography (CT), magnetic resonance (MR), surgical and interventional imaging and molecular imaging technologies allow clinicians to see inside the human body more clearly. Clinical systems such as ultrasound, electrocardiography (ECG), bone densitometry, patient monitoring, incubators and infant warmers, respiratory care and anesthesia management enable clinicians to provide better care for patients every day -
from wellness screening to advanced diagnostics to life-saving treatment. Healthcare Systems also offers product services that include remote diagnostic and repair services for medical equipment manufactured by GE and by others.
|
•
|
Life Sciences
–
delivers products, services and manufacturing solutions for drug discovery, the biopharmaceutical industry, and cellular and gene therapy technologies, so that scientists and specialists can discover new ways to predict, diagnose and treat disease. It also researches, manufactures and markets innovative imaging agents used during medical scanning procedures to highlight organs, tissue and functions inside the human body, to aid physicians in the early detection, diagnosis and management of disease through advanced in-vivo diagnostics.
|
•
|
Healthcare Digital
–
provides medical technologies, software, analytics, cloud solutions, implementation and services to drive increased access, enhanced quality and more affordable healthcare around the world. Healthcare Digital’s expertise in artificial intelligence and operational excellence combines digital and industrial, software and hardware, to deliver integrated digital solutions that improve outcomes.
|
Competition & Regulation
|
MD&A
|
SEGMENT OPERATIONS | HEALTHCARE
|
Significant Trends & Developments
|
•
|
In June 2017, Jeffery R. Immelt, former Chief Executive Officer (CEO), announced his retirement with John L. Flannery, former President & CEO of GE Healthcare, succeeding Mr. Immelt as CEO effective August 1, 2017. Kieran Murphy, former President & CEO of GE Healthcare Life Sciences, assumed the role of President & CEO of GE Healthcare effective June 12, 2017.
|
•
|
Healthcare global markets continued to expand, predominately in China and emerging markets, and our share of these key markets grew from the prior year. The key drivers of this global growth were Ultrasound as well as Imaging across most modalities, as additional hospitals and other healthcare facilities have been built, particularly in emerging markets, and as equipment is replaced in existing facilities, primarily in developed markets.
|
•
|
We continue to lead in technology innovation with greater focus on productivity-based technology, services and IT/cloud-based solutions as healthcare providers seek greater productivity and better outcomes.
|
•
|
In 2017, we launched 26 new products in our Imaging and Clinical Care Solutions markets.
|
•
|
In Life Sciences, we launched new products in our contrast imaging and bioprocess portfolios and expanded our cell therapy business through organic investments and acquisitions.
|
•
|
In Healthcare Digital, we have upgraded our core imaging software, while continuing to enhance our products with new advances in analytics.
|
•
|
Emerging markets are expected to grow over the long-term with short-term volatility, driven by the long-term trend of expanding access to healthcare in these markets.
|
•
|
The China market is expected to continue to be a source of growth in 2018 with strong fundamentals in the public market and an expanding private market.
|
•
|
In the U.S., the Affordable Care Act (ACA) has contributed to accelerated customer consolidation and driven payment reforms, causing our customers to look for more complete solutions and greater efficiency. However, while the market is strong, it continues to face uncertainty regarding the future of the ACA. This uncertainty has contributed to slower demand for smaller Ultrasound and Life Care Solutions purchases that are more subject to near-term decision making.
|
•
|
Underlying demand for biopharmaceuticals is expected to continue to expand with new product introductions complemented by growing access to these treatments in emerging markets. These trends continue to support the underlying growth of our Life Sciences franchise which has significant exposure to these end markets.
|
MD&A
|
SEGMENT OPERATIONS | HEALTHCARE
|
GEOGRAPHIC REVENUES
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
U.S.
|
$
|
8.6
|
|
$
|
8.5
|
|
Non-U.S.
|
|
|
||||
Europe
|
3.8
|
|
3.6
|
|
||
Asia
|
4.9
|
|
4.5
|
|
||
Americas
|
1.0
|
|
0.9
|
|
||
Middle East and Africa
|
0.9
|
|
0.9
|
|
||
Total Non-U.S.
|
$
|
10.6
|
|
$
|
9.8
|
|
Total
|
$
|
19.1
|
|
$
|
18.3
|
|
|
|
|
||||
Non-U.S. Revenues as a % of Segment Revenues
|
55
|
%
|
54
|
%
|
SUB-SEGMENT REVENUES
|
|
|
||
|
2017
|
|
2016
|
|
|
|
|
||
Healthcare Systems
|
70
|
%
|
70
|
%
|
Healthcare Digital
|
6
|
%
|
7
|
%
|
Life Sciences
|
24
|
%
|
23
|
%
|
ORDERS AND BACKLOG
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Orders
|
|
|
||||
Equipment
|
$
|
12.4
|
|
$
|
11.4
|
|
Services
|
8.1
|
|
7.8
|
|
||
Total
|
$
|
20.4
|
|
$
|
19.2
|
|
|
|
|
||||
Backlog
|
|
|
||||
Equipment
|
$
|
6.5
|
|
$
|
5.6
|
|
Services
|
11.6
|
|
11.2
|
|
||
Total
|
$
|
18.1
|
|
$
|
16.8
|
|
MD&A
|
SEGMENT OPERATIONS | HEALTHCARE
|
SEGMENT REVENUES
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Equipment
|
$
|
11.0
|
|
$
|
10.4
|
|
$
|
9.9
|
|
Services
|
8.1
|
|
7.9
|
|
7.8
|
|
|||
Total
|
$
|
19.1
|
|
$
|
18.3
|
|
$
|
17.6
|
|
|
|
|
|
||||||
SEGMENT PROFIT AND PROFIT MARGIN
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Segment profit
|
$
|
3.4
|
|
$
|
3.2
|
|
$
|
2.9
|
|
Segment profit margin
|
18.0
|
%
|
17.3
|
%
|
16.3
|
%
|
COMMENTARY:
|
2017 – 2016
|
•
|
The Healthcare Systems global market continued to expand, predominately in emerging markets, including China, driven by Ultrasound as well as Imaging across most modalities. In addition, Healthcare Systems launched 26 new products in 2017, and Life Sciences continued to expand its business through product launches, organic investments and acquisitions.
|
•
|
The increase in profit was primarily driven by strong volume growth and cost productivity due to cost reduction actions including increasing digital automation, sourcing and logistic initiatives, design engineering and prior year restructuring actions. In addition, profit further increased due to the recognition of small gains on the disposition of nonstrategic operations. These increases were partially offset by price pressure at Healthcare Systems and investments in programs including Digital and new product offerings.
|
2016 – 2015
|
•
|
The Healthcare Systems global market continued to expand, predominately in emerging markets, including China, driven by Ultrasound as well as molecular imaging within Imaging. In addition, Life Sciences continued to expand its business through bioprocess market growth and enterprise solutions.
|
•
|
The increase in profit was primarily driven by strong volume growth and high cost productivity due to the effects of cost reduction actions including sourcing and logistic initiatives, design engineering, plant transfers from high cost to low cost countries and restructuring actions. These cost savings were partially offset by price pressure at Healthcare Systems and investments in programs including Digital.
|
MD&A
|
SEGMENT OPERATIONS | TRANSPORTATION
|
Leader: Rafael Santana
|
|
Headquarters & Operations
|
||
|
• Vice President, GE and President & CEO, GE Transportation
•
Over 15 years of service with General Electric
|
|
|
• 3% of total segment revenues
• 4% of industrial segment revenues
• 6% of industrial segment profit
• Headquarters: Chicago, IL
• Serving customers in 60+ countries
• Employees: approximately 8,000
|
Products & Services
|
|
Transportation is a global technology leader and supplier to the railroad, mining, marine, stationary power and drilling industries. Products and services offered by Transportation include:
|
•
|
Locomotives
–
provides freight and passenger locomotives as well as rail services to help solve rail challenges. We manufacture high-horsepower, diesel-electric locomotives including the Evolution Series
TM
, which meets or exceeds the U.S. Environmental Protection Agency’s (EPA) Tier 4 requirements for freight and passenger applications.
|
•
|
Services
–
develops partnerships that support advisory services, parts, integrated software solutions and data analytics. Our comprehensive offerings include tailored service programs, high-quality parts for GE and other locomotive platforms, overhaul, repair and upgrade services and wreck repair. Our portfolio provides the people, partnerships and leading software to optimize operations and asset utilization.
|
•
|
Digital Solutions
–
offers a suite of software-enabled solutions to help our customers lower operational costs, increase productivity and improve service quality and reliability.
|
•
|
Mining
–
provides mining equipment and services. The portfolio includes drive systems for off-highway vehicles, mining equipment, mining power and productivity.
|
•
|
Marine, Stationary & Drilling
–
offers marine diesel engines and stationary power diesel engines and motors for land and offshore drilling rigs.
|
Competition & Regulation
|
Significant Trends & Developments
|
•
|
Effective November 1, 2017, Jamie S. Miller, former President & CEO of GE Transportation, assumed the role of Chief Financial Officer, succeeding Jeffrey S. Bornstein. Effective the same date, Rafael Santana, former President & CEO of GE in Latin America, assumed the role of President & CEO of GE Transportation.
|
•
|
Rail carload volumes, especially in North America, began to improve in 2017 from the historical lows reached early in 2017. Parked locomotives have remained historically high in 2017 but have begun to slowly decrease as carload volume has improved and velocity has slowed.
|
•
|
Demand for natural resources began to recover in 2017, but commodity prices and mining sector activity remain well below levels seen during most recent commodity supercycle.
|
•
|
Global locomotive deliveries were down from 749 units in 2016 to 433 units in 2017 due to excess supply of locomotive power in the North American rail market.
|
•
|
Railroads, especially the Class 1s in North America, have begun to see some recovery in volume in both intermodal and commodity carloads. We expect railroads will continue to seek capital-efficient opportunities to improve the efficiency of their assets and network.
|
MD&A
|
SEGMENT OPERATIONS | TRANSPORTATION
|
GEOGRAPHIC REVENUES
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
U.S.
|
$
|
2.4
|
|
$
|
3.0
|
|
Non-U.S.
|
|
|
||||
Europe
|
0.2
|
|
0.2
|
|
||
Asia
|
0.3
|
|
0.3
|
|
||
Americas
|
0.6
|
|
0.9
|
|
||
Middle East and Africa
|
0.7
|
|
0.3
|
|
||
Total Non-U.S.
|
$
|
1.8
|
|
$
|
1.8
|
|
Total
|
$
|
4.2
|
|
$
|
4.7
|
|
|
|
|
||||
Non-U.S. Revenues as a % of Segment Revenues
|
43
|
%
|
37
|
%
|
SUB-SEGMENT REVENUES
|
|
|
||
|
2017
|
|
2016
|
|
|
|
|
||
Locomotives
|
31
|
%
|
44
|
%
|
Services
|
51
|
%
|
42
|
%
|
Mining
|
10
|
%
|
7
|
%
|
Other(a)
|
8
|
%
|
7
|
%
|
(a) Includes
Marine, Stationary, Drilling and Digital
|
ORDERS AND BACKLOG
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Orders
|
|
|
||||
Equipment
|
$
|
2.1
|
|
$
|
0.4
|
|
Services
|
3.0
|
|
3.0
|
|
||
Total
|
$
|
5.1
|
|
$
|
3.4
|
|
|
|
|
||||
Backlog
|
|
|
||||
Equipment
|
$
|
4.8
|
|
$
|
4.4
|
|
Services
|
13.2
|
|
15.7
|
|
||
Total
|
$
|
17.9
|
|
$
|
20.1
|
|
UNIT SALES
|
||||||
|
2017
|
|
2016
|
|
V
|
|
Locomotives
|
433
|
|
749
|
|
(316
|
)
|
MD&A
|
SEGMENT OPERATIONS | TRANSPORTATION
|
SEGMENT REVENUES
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Equipment
|
$
|
1.7
|
|
$
|
2.3
|
|
$
|
3.2
|
|
Services
|
2.5
|
|
2.4
|
|
2.7
|
|
|||
Total
|
$
|
4.2
|
|
$
|
4.7
|
|
$
|
5.9
|
|
|
|
|
|
||||||
SEGMENT PROFIT AND PROFIT MARGIN
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Segment profit
|
$
|
0.8
|
|
$
|
1.1
|
|
$
|
1.3
|
|
Segment profit margin
|
19.7
|
%
|
22.6
|
%
|
21.5
|
%
|
COMMENTARY:
|
2017 – 2016
|
•
|
The North American market continues to see overcapacity and spending budget cuts by the railroads limiting fleet expansion. However, carload volume increased 4.8% during the year driven by an increase in coal. With improving carload volume, the number of parked locomotives has decreased 18% from the prior year.
|
•
|
The decrease in profit was driven by lower equipment volume, partially offset by favorable business mix from a higher proportion of services volume including an increase in earnings in our long-term service contracts. Additionally, cost reduction actions including restructuring, supply chain initiatives and work transfers to more cost-competitive locations continued during the year.
|
2016 – 2015
|
•
|
The North American market continues to see overcapacity and spending budget cuts by the railroads limiting fleet expansion. Carload volume decreased 4.5% driven by decreases in coal and petroleum. With declining carload volume, the number of parked locomotives increased 50%.
|
•
|
The decrease in profit was primarily driven by lower volume, partially offset by the effects of cost reduction actions including material deflation, lower Tier 4 locomotive spend and restructuring actions.
|
MD&A
|
SEGMENT OPERATIONS | LIGHTING
|
Leaders: William Lacey & Maryrose Sylvester
|
|
Headquarters & Operations
|
||
|
•
Vice President, GE and President & CEO, GE Lighting
•
Over 25 years of service with General Electric
|
|
|
• 2% of total segment revenues
• 2% of industrial segment revenues
• 1% of industrial segment profit
• GE Lighting HQ: East Cleveland, OH
• Current, powered by GE HQ: Boston, MA
• Serving customers in 108 countries
• Employees: approximately 7,500
|
|
•
Vice President, GE and President & CEO, Current, powered by GE
•
Over 30 years of service with General Electric
|
|
|
Products & Services
|
|
Lighting includes the GE Lighting business, which is primarily focused on consumer lighting applications in the U.S., and Current, powered by GE (Current), which is focused on providing energy efficiency and productivity solutions for commercial, industrial and municipal customers.
|
•
|
GE Lighting
–
focused on driving innovation and growth in light emitting diode (LED) and connected home technology. The business offers LEDs in a variety of shapes, sizes, wattages and color temperatures. It is also investing in the growing smart home category, building a suite of connected lighting products with simple connection points that offer new opportunities to do more at home.
|
•
|
Current
–
delivers energy efficiency and productivity solutions for commercial, industrial and municipal customers. We combine infrastructure technology like LED and solar with new sensor-enabled data networks and digital applications to help our customers reduce energy costs, better predict spend and gain business productivity insights. We partner with a wide variety of digital companies to help expand our application catalog, and we offer flexible financing solutions that help our customers achieve faster payback periods and better long-term value.
|
Competition & Regulation
|
Significant Trends & Developments
|
•
|
In the last decade, the lighting industry has seen a major technology pivot away from traditional lighting products, including incandescent, halogen and specialty linear fluorescent lamps, to energy-saving LEDs primarily due to continued U.S. energy efficiency regulations. We estimate half of all residential sockets in the U.S. will convert to LED by 2020. This shift aligns with our LED focus.
|
•
|
The same LED transition is also happening in the commercial and industrial markets, coupled with an increasing trend toward digitization in commercial, industrial and retail buildings, as well as growing investment in smart city technology and digital sensing capabilities for utilities and municipalities. This change is being driven by multiple benefits, including cost reductions associated with energy savings, space utilization, worker productivity and a longer LED replacement cycle once installed.
|
•
|
The commercial, industrial and municipal markets are largely nascent, with point solution companies gathering data on the edge or developing specialized apps; no large-scale platform solution has yet emerged in the intelligent buildings and municipal space.
|
•
|
We classified the substantial majority of our Lighting segment as held for sale in the fourth quarter of 2017. In connection with this determination, we adjusted the carrying value of each business classified as held for sale to fair value, less cost to sell, resulting in a pre-tax loss of $0.8 billion recorded at Corporate. In February 2018, we entered into an agreement to sell our GE Lighting business in Europe, the Middle East, Africa and Turkey and our Global Automotive Lighting business to a company controlled by a former GE executive in the region. The proposed transaction is expected to close in mid-2018, subject to customary closing conditions and local agreements.
|
MD&A
|
SEGMENT OPERATIONS | LIGHTING
|
GEOGRAPHIC REVENUES(a)
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
U.S.
|
$
|
1.5
|
|
$
|
4.2
|
|
Non-U.S.
|
|
|
||||
Europe
|
0.2
|
|
0.2
|
|
||
Asia
|
—
|
|
0.1
|
|
||
Americas
|
0.2
|
|
0.3
|
|
||
Middle East and Africa
|
0.1
|
|
0.1
|
|
||
Total Non-U.S.
|
$
|
0.5
|
|
$
|
0.7
|
|
Total
|
$
|
2.0
|
|
$
|
4.8
|
|
|
|
|
||||
Non-U.S. Revenues as a % of Segment Revenues
|
24
|
%
|
14
|
%
|
SUB-SEGMENT REVENUES(a)
|
|
|
||
|
2017
|
|
2016
|
|
|
|
|
||
Current
|
54
|
%
|
22
|
%
|
GE Lighting
|
46
|
%
|
24
|
%
|
Appliances
|
—
|
%
|
54
|
%
|
ORDERS AND BACKLOG(a)
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Orders(b)
|
|
|
||||
Equipment
|
$
|
1.1
|
|
$
|
0.6
|
|
Services
|
0.1
|
|
—
|
|
||
Total
|
$
|
1.2
|
|
$
|
0.6
|
|
|
|
|
||||
Backlog
|
|
|
||||
Equipment
|
$
|
0.2
|
|
$
|
0.1
|
|
Services
|
—
|
|
—
|
|
||
Total
|
$
|
0.2
|
|
$
|
0.1
|
|
MD&A
|
SEGMENT OPERATIONS | LIGHTING
|
SEGMENT REVENUES(a)
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Equipment
|
$
|
1.9
|
|
$
|
4.6
|
|
$
|
8.3
|
|
Services
|
0.1
|
|
0.2
|
|
0.4
|
|
|||
Total
|
$
|
2.0
|
|
$
|
4.8
|
|
$
|
8.8
|
|
|
|
|
|
||||||
SEGMENT PROFIT AND PROFIT MARGIN(a)
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Segment profit
|
$
|
0.1
|
|
$
|
0.2
|
|
$
|
0.7
|
|
Segment profit margin
|
4.7
|
%
|
4.1
|
%
|
7.7
|
%
|
COMMENTARY:
|
2017 – 2016
|
•
|
The traditional lighting market continued to be challenging due to continued U.S. energy efficiency regulations and market shifts away from traditional lighting products in favor of more energy-efficient, cost-saving options.
|
•
|
The decrease in profit was due to lower volume driven by the Appliances disposition in June 2016. Excluding this disposition, profit increased for the remaining Lighting business driven by savings from restructuring, regional exits and decreased investment and controllable spending. These increases were partially offset by pressure in North America from declining traditional lighting product sales being only partially offset by increasing LED sales.
|
2016 – 2015
|
•
|
The main driver of the decrease in revenues was the Appliances disposition in June 2016. For the remaining Lighting business, equipment revenues decreased due to lower traditional lighting product sales and LED price pressure, partially offset by LED and solar growth in Current.
|
•
|
The decrease in profit was due to lower volume driven by the Appliances disposition in June 2016, increased investment in Current to align with market shifts, and price pressure, partially offset by the cost savings effects of regional exits outside of North America.
|
MD&A
|
SEGMENT OPERATIONS | CAPITAL
|
Leader: Alec Burger
|
|
Headquarters & Operations
|
||
|
• Vice President, GE and President, GE Capital
•
Over 25 years of service with General Electric
|
|
|
• 7% of segment revenues
• Headquarters: Norwalk, CT
• Employees: approximately 4,000
|
Products & Services
|
•
|
Industrial Finance (IF)
–
provides exclusive equipment financing solutions globally for the healthcare and additive businesses. In addition, its Working Capital Solutions business provides working capital services to GE to help optimize cash management.
|
•
|
Energy Financial Services (EFS)
–
a global energy investor that provides world class financial solutions and underwriting capabilities for Power, Renewable Energy, and Oil & Gas to meet rising demand and sustainability imperatives.
|
•
|
GE Capital Aviation Services (GECAS)
–
offers commercial aircraft leasing, financing, services, and consulting with the industry’s broadest range of business solutions.
|
Competition & Regulation
|
MD&A
|
SEGMENT OPERATIONS | CAPITAL
|
Significant Trends & Developments
|
•
|
GE Capital paid common share dividends of $4.0 billion to GE during the year ended December 31, 2017.
|
•
|
In December of 2017, Rich Laxer, former Chairman and CEO of GE Capital, announced his retirement from GE effective March 31, 2018. Alec Burger assumed the role of President, GE Capital on January 2, 2018.
|
•
|
During the fourth quarter of 2017, we completed the previously reported review of premium deficiency assumptions related to our run-off insurance operations (North America Life and Health (NALH)). With the completion of that review and NALH’s annual premium deficiency test, we recorded an increase to future policy benefit reserves of $8.9 billion and impairments of $0.4 billion of deferred acquisition costs and $0.2 billion of present value of future profits. This resulted in an after-tax charge of $6.2 billion to earnings in the fourth quarter of 2017. Refer to our Critical Accounting Estimates and Notes 1 and 11 to the consolidated financial statements for further information.
|
•
|
As a regulated insurance business, NALH is subject to a statutory accounting framework for establishing reserves that requires the modification of certain assumptions to reflect moderately adverse conditions and other differences from the reserve calculation under GAAP. Under that framework, we estimate that GE Capital will need to contribute approximately $15 billion of capital to NALH over the next seven years. GE Capital plans to make a first capital contribution of approximately $3.5 billion in the first quarter of 2018 and expects to make further contributions of approximately $2 billion per year from 2019 through 2024, subject to ongoing monitoring by NALH’s primary regulator, the Kansas Insurance Department. GE Capital plans to fund the capital contributions with its excess liquidity and other GE Capital portfolio actions and does not expect to make a common share dividend distribution to GE for the foreseeable future. GE is required to maintain specified capital levels at these insurance subsidiaries under capital maintenance agreements. Refer to our Financial Resources and Liquidity section for further information.
|
•
|
On January 16, 2018, we announced plans to take actions to make GE Capital smaller and more focused, including a substantial reduction in the size of GE Capital’s Energy Financial Services and Industrial Finance businesses over the next 24 months. Those actions resulted in goodwill and other asset impairment charges of $1.8 billion on an after-tax basis in the fourth quarter of 2017. Refer to Note 8 to the consolidated financial statements for further information.
|
MD&A
|
SEGMENT OPERATIONS | CAPITAL
|
GEOGRAPHIC REVENUES
|
|
|
||||
(Dollars in billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
U.S.
|
$
|
4.4
|
|
$
|
6.4
|
|
Non-U.S.
|
|
|
||||
Europe
|
1.5
|
|
1.4
|
|
||
Asia
|
1.4
|
|
1.7
|
|
||
Americas
|
0.8
|
|
0.4
|
|
||
Middle East and Africa
|
1.0
|
|
1.0
|
|
||
Total Non-U.S.
|
4.7
|
|
4.5
|
|
||
Total
|
$
|
9.1
|
|
$
|
10.9
|
|
|
|
|
||||
Non-U.S. Revenues as a % of Segment Revenues
|
52
|
%
|
41
|
%
|
SUB-SEGMENT ASSETS
|
|
|
||
|
2017
|
|
2016
|
|
|
|
|
||
GECAS
|
26
|
%
|
25
|
%
|
Industrial Finance
|
17
|
%
|
15
|
%
|
Insurance and Other Financing
|
50
|
%
|
53
|
%
|
EFS
|
7
|
%
|
7
|
%
|
MD&A
|
SEGMENT OPERATIONS | CAPITAL
|
SEGMENT REVENUES
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
Verticals
|
$
|
9.0
|
|
$
|
10.2
|
|
$
|
10.4
|
|
Other continuing
|
—
|
|
0.7
|
|
0.4
|
|
|||
Total
|
$
|
9.1
|
|
$
|
10.9
|
|
$
|
10.8
|
|
|
|
|
|
||||||
SEGMENT PROFIT(a)
|
|
|
|
||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Profit
|
|
|
|
||||||
Verticals
|
$
|
(6.2
|
)
|
$
|
1.9
|
|
$
|
1.7
|
|
Other continuing
|
(0.6
|
)
|
(3.1
|
)
|
(9.6
|
)
|
|||
Total
|
$
|
(6.8
|
)
|
$
|
(1.3
|
)
|
$
|
(8.0
|
)
|
COMMENTARY:
|
2017 – 2016
|
•
|
Within Capital, Verticals net earnings decreased $8.1 billion, primarily due to the completion of our insurance premium deficiency review ($6.2 billion), EFS strategic actions ($1.8 billion) and higher impairments ($0.4 billion), partially offset by higher tax benefits ($0.2 billion).
|
•
|
Other Capital losses decreased $2.6 billion, or 82%, primarily associated with the GE Capital Exit Plan as follows:
|
•
|
Lower headquarters operation expenses of $0.8 billion.
|
•
|
Lower treasury operation expenses of $0.8 billion reflecting lower excess interest expense, including costs associated with the February and May 2016 debt tenders and derivative activities that reduce or eliminate interest rate, currency or market risk between financial assets and liabilities.
|
•
|
Higher tax benefits of $0.8 billion.
|
•
|
Lower preferred dividend expenses of $0.2 billion associated with the January 2016 preferred equity exchange.
|
2016 – 2015
|
•
|
Within Capital, Verticals net earnings increased by
$0.2 billion
, or
14%
, as a result of higher gains (
$0.2 billion
) and lower impairments (
$0.2 billion
), partially offset by the effects of dispositions (
$0.1 billion
) and core decreases (
$0.1 billion
).
|
•
|
Other Capital net loss decreased by
$6.5 billion
, or
67%
, primarily as a result of:
|
•
|
Lower tax expenses of
$6.2 billion
primarily related to the nonrecurrence of the 2015 charges for repatriation of foreign earnings and write-off of deferred tax assets related to the GE Capital Exit Plan.
|
•
|
2016 tax benefits of
$1.1 billion
primarily related to increased tax efficiency of planned cash repatriations through increased foreign tax credit utilization of
$0.8 billion
and an IRS tax settlement of
$0.3 billion
.
|
•
|
Lower impairment expenses of
$0.8 billion
resulting from the 2015 impairment of a coal-fired power plant in the U.S.
|
•
|
Higher treasury operation expenses of
$1.3 billion
reflecting excess interest expense, costs associated with the February and May 2016 debt tenders and derivative activities that reduce or eliminate interest rate, currency or market risk between financial assets and liabilities. We expect to continue to have excess interest costs in 2017. We may engage in liability management actions, such as buying back debt, based on market and economic conditions.
|
•
|
Charges of
$0.3 billion
associated with the preferred equity exchange that was completed in January 2016.
|
•
|
Higher restructuring expenses of
$0.2 billion
.
|
MD&A
|
CORPORATE ITEMS AND ELIMINATIONS
|
REVENUES AND OPERATING PROFIT (COST)
|
|
|
|
|||||||
|
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||||
Revenues
|
|
|
|
|||||||
|
Gains (losses) on disposals(a)
|
$
|
552
|
|
$
|
3,444
|
|
$
|
1,497
|
|
|
Eliminations and other
|
(3,687
|
)
|
(3,471
|
)
|
(3,521
|
)
|
|||
Total Corporate Items and Eliminations
|
$
|
(3,135
|
)
|
$
|
(26
|
)
|
$
|
(2,024
|
)
|
|
|
|
|
|
|
||||||
Operating profit (cost)
|
|
|
|
|||||||
|
Gains (losses) on disposals(a)
|
$
|
520
|
|
$
|
3,444
|
|
$
|
1,497
|
|
|
Principal retirement plans(b)
|
(2,236
|
)
|
(2,044
|
)
|
(2,760
|
)
|
|||
|
Restructuring and other charges
|
(4,561
|
)
|
(3,578
|
)
|
(1,734
|
)
|
|||
|
Eliminations and other
|
(1,593
|
)
|
(2,048
|
)
|
(2,111
|
)
|
|||
Total Corporate Items and Eliminations
|
$
|
(7,871
|
)
|
$
|
(4,226
|
)
|
$
|
(5,108
|
)
|
(a)
|
Includes gains (losses) on disposed or held for sale businesses.
|
(b)
|
Included non-operating pension cost* of $2.3 billion, $2.1 billion and $2.8 billion in
2017
,
2016
and
2015
, respectively, which includes expected return on plan assets, interest costs and non-cash amortization of actuarial gains and losses.
|
CORPORATE COSTS
|
|
|
|
|||||||
|
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
||||||
Total Corporate Items and Eliminations (GAAP)
|
$
|
(7,871
|
)
|
$
|
(4,226
|
)
|
$
|
(5,108
|
)
|
|
Less non-operating pension cost (Non-GAAP)
|
(2,278
|
)
|
(2,052
|
)
|
(2,764
|
)
|
||||
Total Corporate costs (operating) (Non-GAAP)
|
$
|
(5,592
|
)
|
$
|
(2,175
|
)
|
$
|
(2,344
|
)
|
|
|
|
|
|
|
||||||
Less restructuring and other charges and gains (losses)
|
(4,042
|
)
|
(134
|
)
|
(237
|
)
|
||||
Adjusted Corporate costs (operating) (Non-GAAP)
|
$
|
(1,551
|
)
|
$
|
(2,040
|
)
|
$
|
(2,107
|
)
|
MD&A
|
CORPORATE ITEMS AND ELIMINATIONS
|
•
|
$1.5 billion of lower net gains from disposed businesses which included a $3.1 billion gain from the sale of our Appliance business to Haier in 2016 and a $0.4 billion gain from the sale of GE Asset Management to State Street Corporation in 2016, partially offset by a $1.9 billion gain from the sale of our Water business to Suez in 2017.
|
•
|
$1.4 billion of held for sale losses in 2017. This included $0.8 billion related to the substantial majority of our Lighting segment and $0.6 billion related to two businesses within our Aviation segment.
|
•
|
$1.5 billion of lower net gains from disposed businesses which included a $3.1 billion gain from the sale of our Appliance business to Haier in 2016 and a $0.4 billion gain from the sale of GE Asset Management to State Street Corporation in 2016, partially offset by a $1.9 billion gain from the sale of our Water business to Suez in 2017.
|
•
|
$1.4 billion of held for sale losses in 2017. This included $0.8 billion related to the substantial majority of our Lighting segment and $0.6 billion related to two businesses within our Aviation segment.
|
•
|
$1.0 billion of higher restructuring and other charges resulting from a charge of $1.2 billion for the impairment of Power Conversion goodwill and a charge of $0.3 billion for the impairment of a power plant asset, partially offset by a decrease of $0.5 billion of Oil & Gas related charges recorded at Corporate.
|
•
|
$0.2 billion of higher costs associated with our principal retirement plans including the effects of lower discount rates.
|
•
|
These increases were partially offset by $0.5 billion of lower costs resulting from restructuring and cost reduction actions.
|
•
|
$1.9 billion of higher net gains from disposed and held for sale businesses, which included a $3.1 billion gain from the sale of our Appliances business to Haier and a $0.4 billion gain from the sale of GE Asset Management to State Street Corporation in 2016, partially offset by a $0.1 billion impairment charge related to a potential sale of a non-strategic platform in our Aviation business in 2016. Gains on disposed or held for sale businesses in 2015 included a $0.6 billion gain from the sale of our Signaling business, a $0.2 billion break-up fee paid by Electrolux AB due to the termination of the agreement to acquire our Appliances business, and $0.5 billion in other income from a settlement related to the NBCU transaction.
|
•
|
$1.9 billion of higher net gains from disposed and held for sale businesses, which included a $3.1 billion gain from the sale of our Appliances business to Haier and a $0.4 billion gain from the sale of GE Asset Management to State Street Corporation in 2016, partially offset by a $0.1 billion impairment charge related to a potential sale of a non-strategic platform in our Aviation business in 2016. Gains on disposed or held for sale businesses in 2015 included a $0.6 billion gain from the sale of our Signaling business, a $0.2 billion break-up fee paid by Electrolux AB due to the termination of the agreement to acquire our Appliances business, and $0.5 billion in other income from a settlement related to the NBCU transaction, and
|
•
|
$0.7 billion of lower costs associated with our principal retirement plans including the effects of higher discount rates.
|
•
|
These decreases were partially offset by $1.8 billion higher restructuring and other charges, which included $0.7 billion of higher restructuring and other charges associated with the Alstom acquisition.
|
MD&A
|
CORPORATE ITEMS AND ELIMINATIONS
|
RESTRUCTURING & OTHER CHARGES
|
|
|
|
||||||
|
|
|
|
||||||
(In billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Workforce reductions
|
$
|
1.1
|
|
$
|
1.3
|
|
$
|
0.4
|
|
Plant closures & associated costs and other asset write-downs
|
1.9
|
|
1.3
|
|
0.6
|
|
|||
Acquisition/disposition net charges
|
0.9
|
|
0.7
|
|
0.4
|
|
|||
Goodwill impairment(a)
|
1.2
|
|
—
|
|
—
|
|
|||
Other
|
0.2
|
|
0.3
|
|
0.3
|
|
|||
Total(b)
|
$
|
5.3
|
|
$
|
3.6
|
|
$
|
1.7
|
|
(a)
|
The goodwill impairment charge for Power Conversion is recorded in Other costs and expenses in the Statement of Earnings (Loss). See Note 8 to the consolidated financial statements for further information.
|
(b)
|
Subsequent to the Baker Hughes transaction, restructuring and other charges are included in the determination of segment profit for our Oil & Gas segment.
|
MD&A
|
CORPORATE ITEMS AND ELIMINATIONS
|
COSTS
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
(In billions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
|
|
|
|
|
|
||||||
Power(a)
|
$
|
2.0
|
|
(f)
|
$
|
1.5
|
|
(f)
|
$
|
0.5
|
|
Renewable Energy
|
0.3
|
|
|
0.3
|
|
|
0.2
|
|
|||
Oil & Gas(b)
|
0.2
|
|
|
0.8
|
|
|
0.5
|
|
|||
Aviation
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|||
Healthcare
|
0.3
|
|
|
0.5
|
|
|
0.3
|
|
|||
Transportation
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
|||
Lighting(a)
|
0.2
|
|
|
0.3
|
|
|
0.1
|
|
|||
Total
|
$
|
3.3
|
|
|
$
|
3.7
|
|
|
$
|
1.7
|
|
GAINS (LOSSES)
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
(In billions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
|
|
|
|
|
|
||||||
Power(a)
|
$
|
1.9
|
|
(d)
|
—
|
|
|
$
|
0.1
|
|
|
Renewable Energy
|
—
|
|
|
—
|
|
|
—
|
|
|||
Oil & Gas(b)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Aviation
|
(0.6
|
)
|
(e)
|
(0.2
|
)
|
|
—
|
|
|||
Healthcare
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Transportation
|
—
|
|
|
—
|
|
|
0.6
|
|
|||
Lighting(a)
|
(0.8
|
)
|
(e)
|
3.1
|
|
(c)
|
—
|
|
|||
Total
|
$
|
0.5
|
|
|
$
|
3.0
|
|
|
$
|
0.9
|
|
(a)
|
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 are now reported as a separate segment called Lighting. The Lighting segment included the Appliances business for the year ended December 31, 2015, and through its disposition in the second quarter of 2016.
|
(b)
|
Subsequent to the Baker Hughes transaction restructuring and other charges are included in the determination of segment profit for our Oil & Gas segment.
|
(c)
|
Related to the sale of our Appliances business in the second quarter of 2016.
|
(d)
|
Related to the sale of our Water business in the third quarter of 2017.
|
(e)
|
Related to held for sale charges in our Lighting and Aviation businesses in the fourth quarter of 2017.
|
(f)
|
Included a charge of $1.2 billion for the impairment of Power Conversion goodwill in 2017 and $0.9 billion of Alstom-related restructuring and other charges in 2016.
|
MD&A
|
OTHER CONSOLIDATED INFORMATION
|
BENEFIT PLANS COST
|
|
|
|
||||||
(In billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Principal pension plans
|
$
|
3.7
|
|
$
|
3.6
|
|
$
|
4.5
|
|
Other pension plans
|
0.3
|
|
0.4
|
|
0.4
|
|
|||
Principal retiree benefit plans
|
—
|
|
0.1
|
|
0.2
|
|
|||
Total
|
$
|
4.0
|
|
$
|
4.1
|
|
$
|
5.0
|
|
PRINCIPAL PENSION PLANS(a)
|
|
|
|
|||
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|||
Discount rates (December 31)
|
3.64
|
%
|
4.11
|
%
|
4.38
|
%
|
Expected rate of return
|
7.50
|
%
|
7.50
|
%
|
7.50
|
%
|
•
|
Postretirement benefit plan cost decreased $0.1 billion as lower service cost resulting from fewer active principal pension plan participants and earnings from pension plan assets were essentially offset by the effects of lower discount rates and higher loss amortization related to our principal pension plans.
|
•
|
Postretirement benefit plans cost decreased
$0.9 billion
, primarily because of the effects of higher discount rates, lower service cost resulting from fewer active principal pension plans participants and lower loss amortization related to our principal pension plans.
|
•
|
We updated our mortality assumptions at December 31, 2016 based on guidance issued by the Society of Actuaries to reflect updated rates and methodology for future mortality improvements. The new mortality assumptions decreased our principal pension plans obligations by
$0.6 billion
at year-end 2016.
|
MD&A
|
OTHER CONSOLIDATED INFORMATION
|
•
|
Discount rate at
3.64%
for our principal pension plans, reflecting current long-term interest rates.
|
•
|
Assumed long-term return on our principal pension plan assets of
6.75%
, a decrease from 7.5% in 2017.
|
GAAP AND NON-GAAP PENSION COSTS
|
|
|
|
||||||
|
|
|
|
||||||
(In billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Principal pension plans cost (GAAP)
|
$
|
3.7
|
|
$
|
3.6
|
|
$
|
4.5
|
|
Operating pension cost (Non-GAAP)
|
1.4
|
|
1.6
|
|
1.7
|
|
FUNDED STATUS
|
|
|
||||
|
|
|
||||
(In billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
GE Pension Plan
|
$
|
(17.9
|
)
|
$
|
(19.1
|
)
|
GE Supplementary Pension Plan
|
(6.7
|
)
|
(6.5
|
)
|
||
Other pension plans
|
(4.1
|
)
|
(5.5
|
)
|
||
Principal retiree benefit plans
|
(5.5
|
)
|
(5.7
|
)
|
•
|
The GE Pension Plan deficit decreased in
2017
primarily due to investment performance, employer contributions and changes in mortality and salary assumptions, partially offset by lower discount rates and the growth in pension liabilities.
|
•
|
The decrease in the deficit of our other pension plans was primarily attributable to investment performance and employer contributions, partially offset by liability growth.
|
•
|
The decrease in the principal retiree benefit plans deficit was primarily attributable to employer contributions, partially offset by the growth in retiree benefit liabilities.
|
MD&A
|
OTHER CONSOLIDATED INFORMATION
|
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|||
Effective tax rate (ETR)
|
34.6
|
%
|
(5.1
|
)%
|
79.2
|
%
|
Provision (benefit) for income taxes
|
(3.0)
|
(0.5)
|
6.5
|
|||
Cash income taxes paid(a)
|
2.4
|
7.5
|
2.5
|
(a)
|
Includes taxes paid related to discontinued operations.
|
•
|
The consolidated income tax rate for
2017
was 34.6%. This effective tax rate reflects a tax benefit on a consolidated pre-tax loss.
|
•
|
The effective tax rate included a charge of $3.3 billion associated with the provisional estimate of the impact of the transition tax on historic foreign earnings ($1.2 billion) and the revaluation of deferred taxes ($2.2 billion) as a result of the enactment of U.S. tax reform.
|
•
|
As discussed in Note 13 to the consolidated financial statements, the impact of U.S. tax reform on the revaluation of deferred taxes and the transition tax on historic earnings has been recorded on a provisional basis as the legislation provides for additional guidance to be issued by the U.S. Department of the Treasury on several provisions including the computation of the transition tax. Guidance during 2018 could impact the information required for, and the calculation of, the transition tax charge and could affect decisions on timing of various U.S. and foreign items, which would further impact the final 2017 amounts included in the transition charge and the revaluation of deferred taxes. In addition, analysis performed and conclusions reached as part of the tax return filing process and additional guidance on accounting for U.S. tax reform could affect the provisional amount.
|
•
|
The consolidated tax rate excluding the effect of U.S. tax reform was 72.4%. This effective tax rate was also a tax benefit on a consolidated pre-tax loss. The tax benefit excluding the impact of tax reform was larger than 35% because of the benefit from lower-taxed international income compared to losses taxed at higher than the average rate and the benefit of the lower-taxed disposition of the Water business.
|
•
|
The consolidated tax provision included $3.3 billion and $1.0 billion for GE (excluding GE Capital) for
2017
and
2016
, respectively.
|
MD&A
|
OTHER CONSOLIDATED INFORMATION
|
•
|
The consolidated income tax rate for 2016 was
(5.1)%
. The effective tax rate was negative largely because of increased tax benefits from global operations including benefits from the repatriation of GE non-U.S. earnings, benefits of integrating our existing services business with Alstom’s services business and foreign tax credit planning at GE Capital to reduce the tax cost of anticipated repatriations of foreign cash.
|
•
|
The decrease in the consolidated provision for income tax was attributable to the increased benefit from global operations and the non-repeat of the 2015 charges associated with the GE Capital Exit Plan.
|
•
|
As discussed in Note 13 to the consolidated financial statements, in 2015 in conjunction with the GE Capital Exit Plan, we incurred tax expense of
$6.3 billion
related to expected repatriation of foreign earnings and write-off of deferred tax assets.
|
•
|
The consolidated tax provision included $1.0 billion and $1.5 billion for GE (excluding GE Capital) for 2016 and 2015, respectively.
|
BENEFITS FROM LOWER-TAXED GLOBAL OPERATIONS
|
|
|
|
||||||
|
|
|
|
||||||
(In billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Benefit of lower foreign tax rate on indefinitely reinvested non-U.S. earnings
|
$
|
0.8
|
|
$
|
0.9
|
|
$
|
1.1
|
|
GE Capital Exit Plan
|
—
|
|
—
|
|
(6.1
|
)
|
|||
Benefit of audit resolutions
|
—
|
|
0.1
|
|
0.2
|
|
|||
Other
|
2.8
|
|
1.1
|
|
0.4
|
|
|||
Total
|
$
|
3.6
|
|
$
|
2.1
|
|
$
|
(4.4
|
)
|
MD&A
|
OTHER CONSOLIDATED INFORMATION
|
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
GE ETR, excluding GE Capital earnings*
|
84.8
|
%
|
8.7
|
%
|
13.8
|
%
|
|||
GE provision for income taxes
|
$
|
3.3
|
|
$
|
1.0
|
|
$
|
1.5
|
|
•
|
The GE provision for income taxes increased in 2017 because of the $3.7 billion charge for the provisional estimate of the transition tax on historic foreign earnings ($2.9 billion) and effect of revaluing our deferred taxes ($0.8 billion).
|
•
|
Excluding the charge associated with U.S. tax reform, the GE tax provision decreased by $1.4 billion. The decrease was due primarily to a decrease in pre-tax income, excluding non-deductible held-for-sale and impairment losses, which is taxed at above the average tax rate ($1.6 billion).
|
•
|
The GE provision for income taxes decreased in 2016 because of increased benefits from lower-taxed global operations (
$0.3 billion
), including benefits from the repatriation of GE non-U.S. earnings and benefits of integrating our existing services business with Alstom’s services business.
|
•
|
The GE provision for income taxes also decreased due to increases in the benefit from deductible stock losses (
$0.4 billion
).
|
•
|
Partially offsetting these decreases was a lower benefit of audit resolutions (
$0.1 billion
) shown below.
|
MD&A
|
OTHER CONSOLIDATED INFORMATION
|
AUDIT RESOLUTIONS - EFFECT ON GE TAX RATE, EXCLUDING GE CAPITAL EARNINGS
|
|||||||||
|
|
|
|
|
|
|
|||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|||
Tax on global activities including exports
|
(0.8
|
)
|
%
|
(1.4
|
)
|
%
|
(1.5
|
)
|
%
|
U.S. business credits
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
All other - net
|
(0.7
|
)
|
|
(0.4
|
)
|
|
(0.3
|
)
|
|
Total
|
(1.5
|
)
|
%
|
(1.8
|
)
|
%
|
(2.3
|
)
|
%
|
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
GE Capital ETR
|
49.9
|
%
|
70.3
|
%
|
(181.8
|
)%
|
|||
GE Capital provision (benefit) for income taxes
|
$
|
(6.3
|
)
|
$
|
(1.4
|
)
|
$
|
5.0
|
|
•
|
The increase in the tax benefit at GE Capital from a benefit of $1.4 billion in 2016 to a benefit of $6.3 billion is primarily due to the increase in the pre-tax loss with a tax benefit above the average tax rate including the one-time charge to revalue insurance reserves.
|
•
|
The GE Capital tax provision included a benefit of $0.4 billion for the provisional estimate of the transition tax on historic foreign earnings ($1.8 billion benefit) partially offset by the effect of revaluing our deferred taxes ($1.4 billion charge).
|
•
|
The decrease in the income tax expense for GE Capital from an expense of
$5.0 billion
to a benefit of
$1.4 billion
is primarily due to the nonrecurrence of the
$6.3 billion
tax expense, discussed in Note 13 to the consolidated financial statements, related to the GE Capital Exit Plan.
|
•
|
The GE Capital tax expense also decreased in 2016 due to higher benefits from global operations including foreign tax credit planning to reduce the tax cost of anticipated repatriations of foreign cash.
|
MD&A
|
OTHER CONSOLIDATED INFORMATION
|
GEOGRAPHIC REVENUES
|
||||||||||||||
|
|
|
|
V%
|
||||||||||
(Dollars in billions)
|
2017
|
|
2016
|
|
2015
|
|
2017-2016
|
|
2016-2015
|
|||||
|
|
|
|
|
|
|
||||||||
U.S.
|
$
|
46.3
|
|
$
|
53.6
|
|
$
|
53.2
|
|
(14)
|
%
|
|
1
|
%
|
Non-U.S.
|
|
|
|
|
|
|
||||||||
Europe
|
22.6
|
|
20.1
|
|
16.8
|
|
|
|
|
|||||
Asia
|
22.3
|
|
21.4
|
|
19.3
|
|
|
|
|
|||||
Americas
|
11.8
|
|
10.8
|
|
12.0
|
|
|
|
|
|||||
Middle East and Africa
|
19.1
|
|
17.8
|
|
16.0
|
|
|
|
|
|||||
Total Non-U.S.
|
75.8
|
|
70.1
|
|
64.1
|
|
8
|
%
|
|
9
|
%
|
|||
Total
|
$
|
122.1
|
|
$
|
123.7
|
|
$
|
117.4
|
|
(1)
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
||||||||
Non-U.S. Revenues as a % of Consolidated Revenues
|
62
|
%
|
57
|
%
|
55
|
%
|
|
|
|
•
|
Increased revenues by $0.6 billion in 2017, primarily driven by the euro ($0.4 billion), the Brazilian real ($0.3 billion), and the Indian rupee ($0.1 billion), partially offset by decreases in revenue driven by the pound sterling ($0.2 billion).
|
•
|
Decreased revenues by $1.3 billion in 2016, primarily driven by the Brazilian real ($0.2 billion), pound sterling ($0.2 billion), euro ($0.1 billion) and the Chinese renminbi ($0.1 billion).
|
MD&A
|
OTHER CONSOLIDATED INFORMATION
|
TOTAL ASSETS (CONTINUING OPERATIONS)
|
||||||
|
|
|
||||
December 31 (In billions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
U.S.
|
$
|
188.4
|
|
$
|
164.2
|
|
Non-U.S.
|
|
|
||||
Europe
|
119.9
|
|
123.0
|
|
||
Asia
|
23.9
|
|
25.5
|
|
||
Americas
|
21.3
|
|
21.1
|
|
||
Other Global
|
18.6
|
|
16.6
|
|
||
Total Non-U.S.
|
$
|
183.6
|
|
$
|
186.2
|
|
Total
|
$
|
372.0
|
|
$
|
350.4
|
|
•
|
The Baker Hughes transaction increased total assets (excluding cash assumed as a result of the transaction) by $27.5 billion
, primarily due to goodwill of $13.4 billion, property, plant and equipment of $4.9 billion, other intangible assets of $4.1 billion, current receivables of $2.4 billion and inventories of $1.7 billion. See Note 8 to the consolidated financial statements for further information.
|
•
|
Cash and equivalents decreased $4.8 billion.
As of the year ended December 31, 2017, GE Cash and equivalents excluding BHGE was $11.2 billion and BHGE Cash and equivalents was $7.0 billion.
|
MD&A
|
STATEMENT OF FINANCIAL POSITION
|
|
•
|
Investment securities decreased
$5.6 billion
,
primarily due to maturities of liquidity portfolio investments at GE Capital. See Note 3 to the consolidated financial statements for further information.
|
•
|
Inventories decreased $2.1 billion (excluding the impact of the Baker Hughes transaction),
primarily due to the classification of businesses as held for sale, liquidations in excess of material inputs and inventory obsolescence write-offs. See Note 5 to the consolidated financial statements for further information.
|
•
|
Goodwill increased $0.2 billion (excluding the impact of the Baker Hughes transaction),
primarily due to the effects of currency exchange of $1.9 billion, the acquisition of LM Wind Power in our Renewable Energy segment of $1.5 billion and the acquisition of ServiceMax in Digital of $0.7 billion, partially offset by the classification of various businesses in our Lighting, Aviation, Healthcare and Power segments as held for sale of $1.6 billion, the impairment of the Energy Financial Services business goodwill in our Capital segment of $1.4 billion and an impairment of the Power Conversion business goodwill in our Power segment of $1.2 billion. See Note 8 to the consolidated financial statements for further information.
|
•
|
Contract assets increased $3.7 billion.
Revenues in excess of billings increased $2.4 billion and $1.1 billion for our long-term service and equipment agreements, respectively. The remaining increase in contract assets of $0.2 billion is primarily due to an increase in deferred inventory costs partially offset by a decrease in nonrecurring engineering costs. See Note 9 to the consolidated financial statements for further information.
|
•
|
Deferred income taxes increased $4.4 billion,
primarily due to the increase in reserves for GE Capital's run-off insurance operations and planning at GE Capital to reduce the tax cost of repatriations of foreign cash, partially offset by the impact of U.S. tax reform. See Note 13 to the consolidated financial statements for further information.
|
•
|
Assets of businesses held for sale increased $2.5 billion,
primarily due to the classification of various businesses in our Lighting, Aviation, Healthcare and Power segments as held for sale in 2017, partially offset by the sale of our Water business.
See Note 2 to the consolidated financial statements for further information.
|
•
|
Assets of discontinued operations decreased $8.9 billion,
primarily due to the disposition of businesses at GE Capital. See Note 2 to the consolidated financial statements for further information.
|
•
|
The Baker Hughes transaction increased total liabilities by $6.8 billion,
primarily due to borrowings of $3.4 billion, accounts payable of $1.1 billion, other GE current liabilities of $1.1 billion and non-current compensation and benefits of $0.7 billion. See Note 8 to the consolidated financial statements for further information.
|
•
|
Borrowings decreased $5.0 billion (excluding the impact of the Baker Hughes transaction),
primarily due to net repayment of borrowings at GE Capital of $18.7 billion and maturity of long-term debt at GE of $4.0 billion, partially offset by the issuance of long-term debt at GE of $12.5 billion (including $4.0 billion at BHGE) and the effects of currency exchange of $4.9 billion. See Note 10 to the consolidated financial statements for further information.
|
•
|
Investment contracts, insurance liabilities and insurance annuity benefits increased $12.1 billion,
primarily due to the recognition of a premium deficiency arising from our annual test that assessed the adequacy of future policy benefit reserves. See the Critical Accounting Estimate section of the MD&A and Note 11 to the consolidated financial statements for further information.
|
•
|
Liabilities of discontinued operations decreased $3.5 billion,
primarily due to the disposition of businesses at GE Capital. See Note 2 to the consolidated financial statements for further information.
|
•
|
Common stock held in treasury increased $1.9 billion,
primarily due to treasury stock purchases of $3.8 billion (book basis), partially offset by treasury stock issuances of $2.0 billion.
|
•
|
Noncontrolling interests increased $16.1 billion,
primarily due to the recognition of an approximate 37.5% noncontrolling interest attributable to BHGE's Class A shareholders in conjunction with the Baker Hughes transaction. See Note 8 to the consolidated financial statements for further information.
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
December 31, 2017 (In billions)
|
GE
|
|
GE Capital
|
|
Consolidated(a)
|
|
|||
|
|
|
|
||||||
Total short- and long-term borrowings
|
$
|
81.6
|
|
$
|
55.4
|
|
$
|
134.6
|
|
|
|
|
|
||||||
Debt assumed by GE from GE Capital
|
(47.1
|
)
|
47.1
|
|
—
|
|
|||
Intercompany loans with right of offset
|
7.3
|
|
(7.3
|
)
|
—
|
|
|||
Total intercompany payable (receivable) between GE and GE Capital
|
$
|
(39.8
|
)
|
$
|
39.8
|
|
$
|
—
|
|
|
|
|
|
||||||
Total borrowings issued and outstanding
|
$
|
41.7
|
|
$
|
95.2
|
|
$
|
134.6
|
|
(a)
|
Included $2.3 billion elimination of other intercompany borrowings between GE and GE Capital.
|
(a)
|
The intercompany loans from GE Capital to GE bear the right of offset against amounts owed by GE Capital to GE under the assumed debt agreement.
|
CASH AND EQUIVALENTS
|
||||||||
|
|
|
|
|
||||
(In billions)
|
December 31, 2017
|
|
|
|
December 31, 2017
|
|
||
|
|
|
|
|
||||
GE(a)
|
$
|
18.2
|
|
|
U.S.
|
$
|
13.7
|
|
GE Capital(b)
|
25.1
|
|
|
Non-U.S.(a)
|
29.6
|
|
(a)
|
At
December 31, 2017
,
$4.1 billion
of GE cash and equivalents was held in countries with currency controls that may restrict the transfer of funds to the U.S. or limit our ability to transfer funds to the U.S. without incurring substantial costs. These funds are available to fund operations and growth in these countries and we do not currently anticipate a need to transfer these funds to the U.S. Included in this amount was $1.2 billion of BHGE cash and equivalents, which is subject to similar restrictions.
|
(b)
|
At
December 31, 2017
, GE Capital cash and equivalents of about
$0.6 billion
were primarily in insurance entities and was subject to regulatory restrictions.
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
COMMERCIAL PAPER
|
||||||
|
|
|
||||
(In billions)
|
GE
|
|
GE Capital
|
|
||
|
|
|
||||
Average commercial paper borrowings during the fourth quarter of 2017
|
$
|
17.3
|
|
$
|
6.1
|
|
Maximum commercial paper borrowings outstanding during the fourth quarter of 2017
|
19.7
|
|
7.0
|
|
||
Ending commercial paper balance at December 31, 2017
|
3.0
|
|
5.0
|
|
•
|
It is our policy to minimize exposure to interest rate changes and their impact to interest and other financial charges. We fund our financial investments using debt or a combination of debt and hedging instruments so that the interest rates of our borrowings match the expected interest rate profile on our assets. To test the effectiveness of our hedging actions, we assumed that, on January 1, 2017, interest rates decreased by 100 basis points across the yield curve (a “parallel shift” in that curve) and further assumed that the decrease remained in place for the next 12 months. Based on the year-end 2017 portfolio and holding all other assumptions constant, we estimated that our consolidated net earnings for the next 12 months, starting in January 2017, would decline by less than
$0.1 billion
as a result of this parallel shift in the yield curve.
|
•
|
It is our policy to minimize currency exposures and to conduct operations either within functional currencies or using the protection of hedge strategies. We analyzed year-end
2017
consolidated currency exposures, including derivatives designated and effective as hedges, to identify assets and liabilities denominated in other than their relevant functional currencies. For such assets and liabilities, we then evaluated the effects of a
10%
shift in exchange rates between those currencies and the U.S. dollar, holding all other assumptions constant. This analysis indicated that our
2017
consolidated net earnings would decline by less than
$0.1 billion
as a result of such a shift in exchange rates. This analysis excludes any translation impact from changes in exchange rates on our financial results and any offsetting effect from the forecasted future transactions that are economically hedged.
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
•
|
GE Capital paid common dividends to GE totaling
$4.0
billion in
2017
compared with $20.1 billion in
2016
.
|
•
|
Cash generated from GE Industrial CFOA* amounted to
$7.0
billion in
2017
and
$9.9
billion
in
2016
, respectively, primarily due to the following:
|
•
|
Net earnings for cash flows plus depreciation and deferred income taxes of
$4.2
billion in 2017 compared with
$14.1
billion in
2016
. Net earnings for cash flows included pre-tax gains of $
1.9
billion from the sale of Water in 2017 and $3.1 billion from the sale of Appliances and $0.4 billion from the sale of GEAM in 2016 which are not included in GE Industrial CFOA* and are instead reflected as a component of total Proceeds from principal business dispositions within Cash from (used for) investing activities. Net earnings for cash flows included non-cash pre-tax charges and impairments of $2.9 billion related to the classification of certain businesses in our Lighting and Aviation segments as held for sale, Power Conversion goodwill and a power plant asset in 2017 which are reflected as adjustments to cash provided from operating activities within All other operating activities. Net earnings for cash flows also included current tax expense of $2.8 billion in 2017 compared with current tax benefit of $0.1 billion in 2016.
|
•
|
A decrease in cash generated from working capital of $1.2 billion in
2017
compared with
2016
. This was primarily due to an increase in cash used for accounts payable of $2.1 billion, mainly in our Power, Aviation and Renewable Energy segments, a decrease in cash generated from current receivables of $0.6 billion, mainly in our Oil & Gas segment (primarily due to the cessation of sales of current receivables to GE Capital in the fourth quarter of 2017), and a decrease in progress collections of $0.6 billion, including the benefit from the timing of progress collections received in the fourth quarter of 2017 of approximately $0.7 billion. The decreases in working capital were partially offset by an increase in cash generated from inventories of $2.1 billion, mainly in our Renewable Energy, Power and Healthcare segments and in our Appliances business, due to inventory build in the first half of 2016 which did not reoccur in 2017 as a result of the sale of the business in the second quarter of 2016.
|
•
|
Cash used for contract assets was $
4.0
billion in
2017
compared with $
3.9
billion in
2016
. Cash used for contract assets in 2017 was primarily due to cumulative catch up adjustments driven by lower forecasted cost to complete the contracts as well as increased forecasted revenue on our long-term service agreements and the timing of revenue recognized relative to the timing of billings and collections on both our long-term service agreements and long-term equipment contracts.
|
•
|
GE Pension Plan contributions of $1.7 billion in 2017 compared with $0.3 billion in 2016.
|
•
|
Higher taxes paid of $2.7 billion in 2017 compared with $2.6 billion in 2016.
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
•
|
Business acquisition activities of $6.1 billion, primarily driven by the Baker Hughes transaction for $3.4 billion ($7.5 billion cash consideration, less $4.1 billion of cash assumed), LM Wind Power for $
1.7
billion (net of cash acquired) and ServiceMax for
$0.9
billion (net of cash acquired) in
2017
, compared with business acquisitions of $2.3 billion in
2016
, which included two European 3-D printing companies in our Aviation segment for $1.1 billion (net of cash acquired)
.
|
•
|
Business disposition proceeds of $3.1 billion, primarily driven by the sale of our Water business for $2.9 billion (net of cash transferred) in 2017, compared with proceeds of $5.4 billion, primarily driven by the sale of our Appliances business for
$4.8
billion and the sale of GEAM for $0.4 billion in
2016
.
|
•
|
Net cash paid for settlements of derivative hedges of $1.1 billion in
2017
.
|
•
|
Net repurchases of GE treasury shares of
$2.6
billion and $21.4 billion in
2017
and
2016
, respectively.
|
•
|
A net increase in borrowings of
$16.0
billion in
2017
, mainly driven by the issuance of long-term debt of
$12.5
billion, (including $4.0 billion at BHGE) and long-term loans from GE Capital to GE of $
7.3
billion, partially offset by maturity of long-term debt of $4.0 billion and the settlement of the remaining portion of a
2016
short-term loan from GE Capital to GE of
$1.3
billion, compared with a net increase in borrowings of
$2.7
billion in
2016
, including a short-term loan from GE Capital to GE of
$1.3
billion.
|
•
|
GE Capital paid common dividends totaling $20.1 billion and $4.3 billion to GE in 2016 and 2015, respectively.
|
•
|
Cash generated from GE Industrial CFOA* amounted to
$9.9
billion in 2016
and
$12.1
billion in 2015
, respectively, primarily due to the following:
|
•
|
Net
earnings for cash flows plus depreciation and deferred income taxes of $14.1 billion in 2016 compared with $10.3
billion in
2015. Net earnings for cash flows included pre-tax gains of $3.1 billion from the sale of Appliances and $0.4 billion from the sale of GE Asset Management in 2016 and $0.6 billion from the sale of Signaling in 2015 which are not included in GE Industrial CFOA* and are instead reflected as a component of total Proceeds from principal business dispositions within Cash from (used for) investing activities. Net earnings for cash flows included restructuring charges of $3.6 billion and current tax benefit of $0.1 billion in 2016 compared with restructuring charges of $1.7 billion and current tax expense of $3.3 billion in 2015. Net earnings for cash flows also included settlements related to the NBCU transaction of $0.5 billion and an Electrolux break-up fee of $0.2 billion in 2015 which did not reoccur in 2016.
|
•
|
An improvement in working capital of $3.6 billion in 2016 compared with 2015. This was primarily due to an increase in progress collections of $2.9 billion, mainly in our Power and Renewable Energy segments, and an improvement in accounts payable of $1.4 billion, mainly in our Power segment, partially offset by an increase in inventory build of $1.1 billion, mainly in our Power segment.
|
•
|
Cash used for
contract assets of $3.9 billion in 2016 compared with $1.9 billion in 2015, primarily due to cumulative catch up adjustments driven by lower forecasted cost to complete the contracts as well as increased forecasted revenue and the timing of revenue recognized relative to the timing of billings and collections on our long-term service agreements.
|
•
|
$1.0 billion increase in income tax payments, including $1.4 billion in taxes related to the 2016 sale of our Appliances business to Haier.
|
•
|
Higher restructuring payments of $0.6 billion when compared to 2015.
|
•
|
$0.5 billion of 2016 incentive compensation payments due to long-term performance awards. No such payments were made in 2015.
|
•
|
2016 GE Pension Trust funding of $0.3 billion representing net sale proceeds associated with the July 1, 2016 sale of GEAM to State Street Corporation.
|
•
|
Higher proceeds from principal business dispositions of $3.6 billion, primarily driven by the sale of our Appliances business to Haier for proceeds of $4.8 billion and the sale of GEAM for proceeds of $0.4 billion in 2016, compared to $1.7 billion of total proceeds from principal business dispositions in 2015.
|
•
|
A decrease in business acquisition activity of $8.1 billion, primarily driven by the acquisition of Alstom for $10.1 billion in 2015.
|
•
|
These decreases were partially offset by the funding of joint ventures of $0.4 billion in 2016, principally related to our Aviation business (reflected in All other investing activities).
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
•
|
Net purchases of GE treasury shares of $21.4 billion, including $11.4 billion paid under ASR agreements compared to $1.1 billion in 2015.
|
•
|
This increase in cash usage was partially offset by the following decreases:
|
•
|
A net increase in borrowings of $0.8 billion, primarily driven by a short-term loan from GE Capital to GE of $1.3 billion in 2016.
|
•
|
Lower dividends paid to shareowners of $0.8 billion due to lower shares outstanding in 2016 as a result of repurchases of GE treasury shares.
|
•
|
Lower cash paid for income taxes and interest of $2.3 billion.
|
•
|
Net increase in cash collateral and settlements received from counterparties on derivative contracts of $1.2 billion and a general increase in cash generated from earnings (loss) from continuing operations.
|
•
|
Net proceeds from the sales of our discontinued operations of
$1.5 billion
in 2017 compared to
$59.9 billion
in
2016
.
|
•
|
Maturities of
$10.4 billion
related to interest bearing time deposits in 2016.
|
•
|
Long-term loans from GE Capital to GE of
$7.3 billion
, partially offset by the settlement of the remaining portion of 2016 short-term loan from GE Capital to GE of
$1.3 billion
in 2017, compared to the remaining portion of a short-term loan from GE Capital to GE of
$1.3 billion
in 2016.
|
•
|
Net cash paid for derivative settlements of an insignificant amount in 2017 compared to net cash received from derivative settlements of
$0.4 billion
in
2016
.
|
•
|
These decreases were partially offset by the following increases:
|
•
|
Investment securities of
$18.0 billion
related to maturities of
$6.5 billion
in 2017 compared to purchases of investment securities of
$11.5 billion
in
2016
.
|
•
|
Higher collections of financing receivables of
$4.2 billion
in 2017.
|
•
|
A general reduction in funding related to discontinued operations.
|
•
|
Lower net repayments of borrowings of
$19.0 billion
in 2017 compared to
$58.8 billion
in 2016.
|
•
|
GE Capital paid common dividends to GE totaling
$4.0 billion
in 2017 compared to
$20.1 billion
in 2016.
|
•
|
Higher cash paid for income taxes of
$2.6 billion
.
|
•
|
Higher cash paid for interest reflecting excess interest expense, and costs associated with the February and May 2016 debt tenders.
|
•
|
These increases were partially offset by a net increase in cash collateral received from counterparties on derivative contracts of
$1.7 billion
.
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
•
|
Net proceeds from the sales of our CLL, Consumer and Real Estate businesses of
$59.9 billion
compared to
$79.6 billion
in
2015
.
|
•
|
Liquidity investments of
$11.5 billion
purchased in
2016
.
|
•
|
Net cash received from derivative settlements of
$0.4 billion
compared to
$4.4 billion
in
2015
.
|
•
|
An increase in net financing receivables of
$1.5 billion
, including
$4.3 billion
in additions, partially offset by
$2.1 billion
received from the refinancing of our Receivables Facility and proceeds from the sale of receivables purchased from our Appliances business of
$0.8 billion
in 2016.
|
•
|
A short-term loan from GE Capital to GE with remaining principal of
$1.3 billion
in 2016.
|
•
|
These decreases were partially offset by the following increases:
|
•
|
Investment and maturity of
$20.8 billion
related to high quality interest bearing deposits reflecting an investment of
$10.4 billion
in
2015
that matured in
2016
.
|
•
|
Other investing activities of
$3.9 billion
, primarily due to a reduction in net additions to property, plant & equipment of
$1.6 billion
and an increase in aircraft deposits received of
$1.5 billion
.
|
•
|
The 2015 acquisition of Milestone Aviation Group resulting in net cash paid of
$1.7 billion
.
|
•
|
GE Capital paid common dividends to GE totaling
$20.1 billion
compared to
$4.3 billion
in 2015, partially offset by;
|
•
|
Lower net repayments of borrowings of
$58.8 billion
compared to
$59.3 billion
in 2015, reflecting
$2.1 billion
of repayments resulting from the refinancing of our Receivables Facility in
2016
.
|
•
|
Lower cash paid for income taxes and interest in 2017.
|
•
|
The sale of bank deposits for
$16.5 billion
in net cash paid in conjunction with the sale of GE Capital Bank’s U.S. online deposit platform during 2016.
|
•
|
The sale of bank deposits and other investments for $1.1 billion in net cash paid related to our Consumer platform during 2016.
|
•
|
These decreases were partially offset by the following increases:
|
•
|
Reduction of funding from continuing operations (primarily our treasury operations).
|
•
|
Sale of bank deposits for
$0.5 billion
resulting in net cash paid related to our Consumer platform during
2017
.
|
•
|
Debt issued of
$1.8 billion
in 2017 and
$1.5 billion
in 2016 by a discontinued business sold during the first quarter of 2017.
|
•
|
Lower repayments of borrowings and bank deposit activity of
$0.7 billion
in 2017.
|
•
|
Lower cash generated as a result of certain dispositions in our CLL business of
$9.9 billion
and Consumer business of
$5.9 billion
(primarily resulting from the 2015 split-off of Synchrony Financial), partially offset by our Real Estate business of
$2.4 billion
. In connection with the GE Capital Exit Plan, we closed a vast majority of our Consumer business and substantially all of our CLL and Real Estate business dispositions in
2015
and
2016
.
|
•
|
Lower cash paid for interest, partially offset by higher cash paid for income taxes that are included in the above.
|
•
|
The sale of bank deposits for
$16.5 billion
in net cash paid in conjunction with the sale of GE Capital Bank’s U.S. online deposit platform during
2016
.
|
•
|
The sale of bank deposits and other investments for
$1.1 billion
in net cash paid related to our Consumer platform during
2016
.
|
•
|
These increases were partially offset by Other investing activities of
$6.2 billion
, primarily higher net cash received on investment securities of
$3.5 billion
(including the sale of investment securities resulting from the split-off of Synchrony Financial) and cash generated from
2015
collections of financing receivables and other investing assets prior to disposition of the underlying business.
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
•
|
Lower repayments of borrowings of
$9.3 billion
as a result of certain dispositions in our Consumer (including the 2015 split-off of Synchrony Financial), CLL and Real Estate businesses, partially offset by;
|
•
|
Other financing activities of
$2.1 billion
primarily newly issued debt of
$1.5 billion
in
2016
.
|
•
|
GE Capital dividends to GE,
|
•
|
GE Capital working capital solutions to optimize GE cash management,
|
•
|
GE Capital enabled GE industrial orders, including related GE guarantees to GE Capital,
|
•
|
GE Capital financing of GE long-term receivables, and
|
•
|
A
ircraft 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
,
|
•
|
Settlements of tax liabilities, and
|
•
|
Various investments, loans and allocations of GE corporate overhead costs.
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
MD&A
|
FINANCIAL RESOURCES AND LIQUIDITY
|
|
Payments due by period
|
||||||||||||||
|
|
|
|
|
2023 and
|
|
|||||||||
(In billions)
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
thereafter
|
|
|||||
|
|
|
|
|
|
||||||||||
Borrowings (Note 10)
|
$
|
134.6
|
|
$
|
24.7
|
|
$
|
27.7
|
|
$
|
18.2
|
|
$
|
64.0
|
|
Interest on borrowings
|
40.8
|
|
3.7
|
|
6.0
|
|
4.7
|
|
26.4
|
|
|||||
Purchase obligations(a)(b)
|
63.3
|
|
22.1
|
|
19.2
|
|
12.5
|
|
9.5
|
|
|||||
Insurance liabilities (Note 11)(c)
|
38.0
|
|
2.5
|
|
4.1
|
|
4.0
|
|
27.4
|
|
|||||
Operating lease obligations (Note 25)
|
5.3
|
|
1.1
|
|
1.7
|
|
1.2
|
|
1.3
|
|
|||||
Other liabilities(d)
|
71.0
|
|
15.3
|
|
5.5
|
|
5.5
|
|
44.7
|
|
|||||
Contractual obligations of discontinued operations(e)
|
1.6
|
|
1.1
|
|
0.1
|
|
0.2
|
|
0.2
|
|
(a)
|
Included all take-or-pay arrangements, capital expenditures, contractual commitments to purchase equipment that will be leased to others, software acquisition/license commitments, contractual minimum programming commitments and any contractually required cash payments for acquisitions.
|
(b)
|
Excluded funding commitments entered into in the ordinary course of business. See Notes 19 and 21 to the consolidated financial statements for further information on these commitments and other guarantees.
|
(c)
|
Included all contracts associated with our run-off insurance operations and represents the present value of future policy benefit and claim reserves.
|
(d)
|
Included an estimate of future expected funding requirements related to our postretirement benefit plans and included liabilities for unrecognized tax benefits. Because their future cash outflows are uncertain, the following non-current liabilities are excluded from the table above: derivatives, deferred revenue and other sundry items. See Notes 12, 13 and 19 to the consolidated financial statements for further information on certain of these items.
|
(e)
|
Included payments for other liabilities.
|
MD&A
|
CRITICAL ACCOUNTING ESTIMATES
|
MD&A
|
CRITICAL ACCOUNTING ESTIMATES
|
MD&A
|
CRITICAL ACCOUNTING ESTIMATES
|
MD&A
|
CRITICAL ACCOUNTING ESTIMATES
|
•
|
Discount rate – A 25 basis point increase in discount rate would decrease pension cost in the following year by
$0.2 billion
and would decrease the pension benefit obligation at year-end by about
$2.4 billion
.
|
•
|
Expected return on assets – A 50 basis point decrease in the expected return on assets would increase pension cost in the following year by
$0.3 billion
.
|
MD&A
|
CRITICAL ACCOUNTING ESTIMATES
|
MD&A
|
CRITICAL ACCOUNTING ESTIMATES
|
MD&A
|
CRITICAL ACCOUNTING ESTIMATES
|
MD&A
|
OTHER ITEMS
|
|
MD&A
|
OTHER ITEMS
|
|
MD&A
|
OTHER ITEMS
|
|
MD&A
|
OTHER ITEMS
|
|
|
GE funded
|
Customer funded(c)
|
Partner funded
|
Total R&D
|
||||||||||||||||||||||||||||||||
(In millions)
|
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
||||||||||||||||||||||||
Aviation
|
$
|
916
|
|
$
|
1,097
|
|
$
|
1,111
|
|
$
|
586
|
|
$
|
498
|
|
$
|
813
|
|
$
|
—
|
|
$
|
—
|
|
$
|
107
|
|
$
|
1,502
|
|
$
|
1,595
|
|
$
|
2,031
|
|
Healthcare
|
990
|
|
905
|
|
890
|
|
26
|
|
32
|
|
14
|
|
—
|
|
—
|
|
—
|
|
1,016
|
|
938
|
|
905
|
|
||||||||||||
Power
|
885
|
|
945
|
|
834
|
|
18
|
|
4
|
|
20
|
|
17
|
|
45
|
|
108
|
|
920
|
|
994
|
|
962
|
|
||||||||||||
Oil & Gas
|
418
|
|
287
|
|
371
|
|
41
|
|
—
|
|
—
|
|
42
|
|
28
|
|
10
|
|
501
|
|
315
|
|
382
|
|
||||||||||||
Renewable Energy
|
299
|
|
213
|
|
100
|
|
3
|
|
7
|
|
8
|
|
—
|
|
—
|
|
—
|
|
302
|
|
220
|
|
108
|
|
||||||||||||
Corporate(a)
|
1,129
|
|
1,099
|
|
587
|
|
65
|
|
83
|
|
86
|
|
—
|
|
—
|
|
—
|
|
1,194
|
|
1,183
|
|
672
|
|
||||||||||||
All Other(b)
|
165
|
|
235
|
|
355
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
165
|
|
235
|
|
355
|
|
||||||||||||
Total
|
$
|
4,803
|
|
$
|
4,782
|
|
$
|
4,249
|
|
$
|
739
|
|
$
|
625
|
|
$
|
941
|
|
$
|
59
|
|
$
|
73
|
|
$
|
226
|
|
$
|
5,600
|
|
$
|
5,480
|
|
$
|
5,416
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|||
Total sales to U.S. Government agencies
|
4
|
%
|
3
|
%
|
4
|
%
|
Aviation segment defense-related sales
|
3
|
%
|
3
|
%
|
3
|
%
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
•
|
Industrial segment organic revenues
|
•
|
Industrial segment organic operating profit
|
•
|
Operating and non-operating pension costs
|
•
|
GE Industrial structural costs and GE Industrial structural costs, excluding acquisitions and dispositions
|
•
|
GE pre-tax earnings (loss) from continuing operations, excluding GE Capital earnings (loss) from continuing operations and the corresponding effective tax rates, and the reconciliation of the U.S. federal statutory income tax rate to GE effective tax rate, excluding GE Capital earnings
|
•
|
GE Industrial operating earnings and GE Capital earnings (loss) from continuing operations and EPS
|
•
|
GE Industrial operating + Verticals earnings and EPS
|
•
|
GE Industrial operating profit and operating profit margin (excluding certain items)
|
•
|
Average GE shareowners’ equity, excluding effects of discontinued operations
|
•
|
Average GE Capital shareowner's equity, excluding effects of discontinued operations
|
•
|
GE Industrial return on total capital (GE Industrial ROTC)
|
•
|
GE Industrial cash flows from operating activities (GE Industrial CFOA), adjusted GE Industrial CFOA and GE Industrial free cash flow (FCF)
|
•
|
2018 operating framework including 2018 Adjusted EPS and GE Industrial FCF
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
INDUSTRIAL SEGMENT ORGANIC REVENUES (NON-GAAP)
|
||||||||
|
|
|
|
|||||
(Dollars in millions)
|
2017
|
|
2016
|
|
V%
|
|
||
|
|
|
|
|||||
Industrial segment revenues (GAAP)
|
$
|
116,157
|
|
$
|
112,814
|
|
3
|
%
|
Adjustments:
|
|
|
|
|||||
Acquisitions
|
6,059
|
|
37
|
|
|
|||
Business dispositions (other than dispositions of businesses acquired for investment)
|
89
|
|
3,481
|
|
|
|||
Currency exchange rates
|
578
|
|
—
|
|
|
|||
Industrial segment organic revenues (Non-GAAP)
|
$
|
109,430
|
|
$
|
109,296
|
|
—
|
%
|
|
|
|
|
|||||
(Dollars in millions)
|
2016
|
|
2015
|
|
V%
|
|
||
|
|
|
|
|||||
Industrial segment revenues (GAAP)
|
$
|
112,814
|
|
$
|
108,609
|
|
4
|
%
|
Adjustments:
|
|
|
|
|||||
Acquisitions
|
13,207
|
|
1,961
|
|
|
|||
Business dispositions (other than dispositions of businesses acquired for investment)
|
1,256
|
|
6,838
|
|
|
|||
Currency exchange rates
|
(808
|
)
|
—
|
|
|
|||
Industrial segment organic revenues (Non-GAAP)
|
$
|
99,159
|
|
$
|
99,810
|
|
(1
|
)%
|
Adjustment: Plus Alstom November and December(a)
|
$
|
3,202
|
|
$
|
1,812
|
|
|
|
Industrial segment organic revenues including Alstom results for November and December of both 2015 and 2016 (Non-GAAP)
|
$
|
102,361
|
|
$
|
101,622
|
|
1
|
%
|
|
|
|
|
|||||
(Dollars in millions)
|
2015
|
|
2014
|
|
V%
|
|
||
|
|
|
|
|||||
Industrial segment revenues (GAAP)
|
$
|
108,609
|
|
$
|
109,574
|
|
(1
|
)%
|
Adjustments:
|
|
|
|
|||||
Acquisitions
|
2,204
|
|
46
|
|
|
|||
Business dispositions (other than dispositions of businesses acquired for investment)
|
108
|
|
1,224
|
|
|
|||
Currency exchange rates
|
(4,791
|
)
|
—
|
|
|
|||
Industrial segment organic revenues (Non-GAAP)
|
$
|
111,088
|
|
$
|
108,304
|
|
3
|
%
|
(a)
|
Alstom was acquired in November 2015. This adjustment results in the inclusion of Alstom revenues from November and December of both 2015 and 2016 in the adjusted organic revenue growth* measure as described below.
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
INDUSTRIAL SEGMENT ORGANIC OPERATING PROFIT (NON-GAAP)
|
||||||||
|
|
|
|
|||||
(Dollars in millions)
|
2017
|
|
2016
|
|
V%
|
|
||
Industrial segment profit (GAAP)
|
$
|
14,740
|
|
$
|
17,598
|
|
(16
|
)%
|
Adjustments:
|
|
|
|
|||||
Acquisitions
|
(388
|
)
|
(7
|
)
|
|
|||
Business dispositions (other than dispositions of businesses acquired for investment)
|
84
|
|
286
|
|
|
|||
Currency exchange rates
|
(4
|
)
|
—
|
|
|
|||
Industrial segment organic operating profit (Non-GAAP)
|
$
|
15,048
|
|
$
|
17,319
|
|
(13
|
)%
|
|
|
|
|
|||||
(Dollars in millions)
|
2016
|
|
2015
|
|
V%
|
|
||
Industrial segment profit (GAAP)
|
$
|
17,598
|
|
$
|
17,966
|
|
(2
|
)%
|
Adjustments:
|
|
|
|
|||||
Acquisitions
|
739
|
|
(151
|
)
|
|
|||
Business dispositions (other than dispositions of businesses acquired for investment)
|
181
|
|
649
|
|
|
|||
Currency exchange rates
|
(33
|
)
|
—
|
|
|
|||
Industrial segment organic operating profit (Non-GAAP)
|
$
|
16,712
|
|
$
|
17,469
|
|
(4
|
)%
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
OPERATING AND NON-OPERATING PENSION COSTS (NON-GAAP)
|
|
|
|
||||||
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Total principal pension plans cost (GAAP)
|
$
|
3,687
|
|
$
|
3,623
|
|
$
|
4,498
|
|
|
|
|
|
||||||
Operating pension cost (Non-GAAP)
|
|
|
|
||||||
Service cost for benefits earned
|
$
|
1,055
|
|
$
|
1,237
|
|
$
|
1,424
|
|
Prior service cost amortization
|
290
|
|
303
|
|
205
|
|
|||
Curtailment loss
|
64
|
|
31
|
|
105
|
|
|||
Operating pension cost (Non-GAAP)
|
$
|
1,409
|
|
$
|
1,571
|
|
$
|
1,734
|
|
|
|
|
|
||||||
Non-operating pension cost (Non-GAAP)
|
|
|
|
||||||
Expected return on plan assets
|
$
|
(3,390
|
)
|
$
|
(3,336
|
)
|
$
|
(3,302
|
)
|
Interest cost on benefit obligations
|
2,856
|
|
2,939
|
|
2,778
|
|
|||
Net actuarial loss amortization
|
2,812
|
|
2,449
|
|
3,288
|
|
|||
Non-operating pension cost (Non-GAAP)
|
$
|
2,278
|
|
$
|
2,052
|
|
$
|
2,764
|
|
GE INDUSTRIAL STRUCTURAL COSTS AND GE INDUSTRIAL STRUCTURAL COSTS, EXCLUDING ACQUISITIONS AND DISPOSITIONS (NON-GAAP)
|
||||||
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
GE Industrial costs excluding interest and financial charges (GAAP)
|
$
|
108,320
|
|
$
|
101,834
|
|
Less: Segment variable costs
|
77,749
|
|
72,252
|
|
||
Less: Corporate revenue excluding GE-GE Capital elimination
|
(1,225
|
)
|
2,113
|
|
||
Less: Corporate gains on disposals
|
(1,945
|
)
|
(3,444
|
)
|
||
Less: Corporate restructuring and other charges
|
5,986
|
|
3,578
|
|
||
Less: Corporate non-operating pension cost (pre-tax)
|
2,278
|
|
2,052
|
|
||
Less: Corporate noncontrolling interests
|
(1
|
)
|
(7
|
)
|
||
Less: Oil & Gas restructuring and other charges
|
769
|
|
—
|
|
||
GE Industrial structural costs (Non-GAAP)
|
$
|
24,707
|
|
$
|
25,291
|
|
Less: Acquisitions and dispositions structural costs
|
1,679
|
|
568
|
|
||
GE Industrial structural costs, excluding acquisitions and dispositions (Non-GAAP)
|
$
|
23,028
|
|
$
|
24,723
|
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
GE PRE-TAX EARNINGS (LOSS) FROM CONTINUING OPERATIONS, EXCLUDING GE CAPITAL EARNINGS (LOSS) FROM
|
|||||||||
CONTINUING OPERATIONS AND THE CORRESPONDING EFFECTIVE TAX RATES (NON-GAAP)
|
|||||||||
|
|
|
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
GE earnings (loss) from continuing operations before income taxes (GAAP)
|
$
|
(2,922
|
)
|
$
|
9,815
|
|
$
|
3,252
|
|
Less: GE Capital earnings (loss) from continuing operations
|
(6,765
|
)
|
(1,251
|
)
|
(7,672
|
)
|
|||
Total
|
$
|
3,843
|
|
$
|
11,066
|
|
$
|
10,924
|
|
|
|
|
|
||||||
GE provision for income taxes (GAAP)
|
$
|
3,259
|
|
$
|
967
|
|
$
|
1,506
|
|
GE effective tax rate, excluding GE Capital earnings (Non-GAAP)
|
84.8
|
%
|
8.7
|
%
|
13.8
|
%
|
RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO GE EFFECTIVE TAX RATE,
|
||||||
EXCLUDING GE CAPITAL EARNINGS (NON-GAAP)
|
||||||
|
|
|
|
|||
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|||
U.S. federal statutory income tax rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
Reduction in rate resulting from:
|
|
|
|
|||
Tax on global activities including exports
|
(54.0
|
)
|
(18.5
|
)
|
(15.8
|
)
|
U.S. business credits
|
(2.4
|
)
|
(0.8
|
)
|
(1.2
|
)
|
Tax Cuts and Jobs Acts enactment
|
96.7
|
|
—
|
|
—
|
|
All other – net
|
9.5
|
|
(7.0
|
)
|
(4.2
|
)
|
|
49.8
|
|
(26.3
|
)
|
(21.2
|
)
|
GE effective tax rate, excluding GE Capital earnings (Non-GAAP)
|
84.8
|
%
|
8.7
|
%
|
13.8
|
%
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
GE INDUSTRIAL OPERATING EARNINGS AND GE CAPITAL EARNINGS (LOSS) FROM CONTINUING OPERATIONS AND EPS (NON-GAAP)
|
|||||||||
|
|
|
|
||||||
(Dollars in million; except per share amounts)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Consolidated earnings from continuing operations attributable to GE common shareowners (GAAP)
|
$
|
(5,907
|
)
|
$
|
9,128
|
|
$
|
1,663
|
|
Non-operating pension cost (pre-tax)
|
2,278
|
|
2,052
|
|
2,764
|
|
|||
Tax effect on non-operating pension cost(a)
|
(797
|
)
|
(718
|
)
|
(967
|
)
|
|||
Less: non-operating pension cost (net of tax)
|
1,482
|
|
1,334
|
|
1,797
|
|
|||
Operating earnings (Non-GAAP)
|
$
|
(4,425
|
)
|
$
|
10,462
|
|
$
|
3,460
|
|
|
|
|
|
||||||
Adjustment: GE Capital earnings (loss) from continuing operations
attributable to GE common shareowners
|
(6,765
|
)
|
(1,251
|
)
|
(7,983
|
)
|
|||
Industrial operating earnings (Non-GAAP)
|
$
|
2,339
|
|
$
|
11,713
|
|
$
|
11,443
|
|
|
|
|
|
||||||
Earnings (loss) per share (EPS) - diluted(b)
|
|
|
|
||||||
Consolidated EPS from continuing operations
attributable to GE common shareowners (GAAP)
|
$
|
(0.68
|
)
|
$
|
1.00
|
|
$
|
0.17
|
|
Adjustment: non-operating pension cost (net of tax)
|
0.17
|
|
0.15
|
|
0.18
|
|
|||
Operating EPS (Non-GAAP)
|
(0.51
|
)
|
1.14
|
|
0.35
|
|
|||
GE Capital EPS from continuing operations
attributable to GE common shareowners (GAAP)
|
(0.78
|
)
|
(0.14
|
)
|
(0.80
|
)
|
|||
GE Industrial operating EPS (Non-GAAP)
|
$
|
0.27
|
|
$
|
1.28
|
|
$
|
1.14
|
|
(a)
|
The tax effect of non-operating pension cost* was calculated using a 35% U.S. federal statutory tax rate, based on its applicability to such cost.
|
(b)
|
Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.
|
GE INDUSTRIAL OPERATING + VERTICALS EARNINGS AND EPS (NON-GAAP)
|
|
||||||||
|
|
|
|
||||||
(Dollars in millions; except per share amounts)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
GE Capital earnings (loss) from continuing operations attributable
to GE common shareowners (GAAP)
|
$
|
(6,765
|
)
|
$
|
(1,251
|
)
|
$
|
(7,983
|
)
|
Adjustment: GE Capital other continuing earnings (loss) (Other Capital)
|
(557
|
)
|
(3,143
|
)
|
(9,649
|
)
|
|||
Verticals earnings(a)
|
(6,208
|
)
|
1,892
|
|
1,666
|
|
|||
|
|
|
|
||||||
GE Industrial operating earnings (Non-GAAP)
|
$
|
2,339
|
|
$
|
11,713
|
|
$
|
11,443
|
|
Verticals earnings(a)
|
(6,208
|
)
|
1,892
|
|
1,666
|
|
|||
GE Industrial operating earnings + Verticals earnings (Non-GAAP)
|
$
|
(3,869
|
)
|
$
|
13,605
|
|
$
|
13,109
|
|
Adjustment: Non-operating pension cost and other Capital
|
(2,039
|
)
|
(4,477
|
)
|
(11,446
|
)
|
|||
Earnings (loss) from continuing operations
attributable to GE common shareowners (GAAP)
|
(5,907
|
)
|
9,128
|
|
1,663
|
|
|||
|
|
|
|
||||||
Earnings (loss) per share - diluted(b)
|
|
|
|
||||||
GE Industrial operating EPS (Non-GAAP)
|
$
|
0.27
|
|
$
|
1.28
|
|
$
|
1.14
|
|
Verticals EPS
|
(0.71
|
)
|
0.21
|
|
0.17
|
|
|||
GE Industrial operating + Verticals EPS (Non-GAAP)
|
$
|
(0.45
|
)
|
$
|
1.49
|
|
$
|
1.31
|
|
Adjustment: Non-operating pension cost* and other Capital
|
(0.23
|
)
|
(0.49
|
)
|
(1.14
|
)
|
|||
EPS from continuing operations (GAAP)
|
$
|
(0.68
|
)
|
$
|
1.00
|
|
$
|
0.17
|
|
(a)
|
Verticals include GECAS, Energy Financial Services, Industrial Finance and run-off insurance operations, including allocated corporate costs of $100 million, $100 million, $133 million and $233 million after tax for the years ended December 31, 2017, 2016, 2015 and 2014, respectively.
|
(b)
|
Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
GE INDUSTRIAL OPERATING PROFIT AND OPERATING PROFIT MARGIN (EXCLUDING CERTAIN ITEMS) (NON-GAAP)
|
|||||||||
|
|
|
|
||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues
|
|
|
|
||||||
GE total revenues and other income
|
$
|
108,150
|
|
$
|
113,676
|
|
$
|
100,700
|
|
Less: GE Capital earnings (loss) from continuing operations
|
(6,765
|
)
|
(1,251
|
)
|
(7,672
|
)
|
|||
GE revenues and other income excluding GE
Capital earnings (loss) (Industrial revenues) (GAAP)
|
$
|
114,915
|
|
$
|
114,927
|
|
$
|
108,371
|
|
|
|
|
|
||||||
Less: gains, net
|
552
|
|
3,444
|
|
1,497
|
|
|||
Adjusted GE Industrial revenues (Non-GAAP)
|
$
|
114,363
|
|
$
|
111,483
|
|
$
|
106,874
|
|
|
|
|
|
||||||
Costs
|
|
|
|
||||||
GE total costs and expenses
|
$
|
111,072
|
|
$
|
103,860
|
|
$
|
97,447
|
|
Less: GE interest and other financial charges
|
2,753
|
|
2,026
|
|
1,706
|
|
|||
GE Industrial costs excluding interest and other
financial charges (GAAP)
|
$
|
108,320
|
|
$
|
101,834
|
|
$
|
95,741
|
|
|
|
|
|
||||||
Less adjustments for:
|
|
|
|
||||||
Non-operating pension cost (pre-tax)
|
2,278
|
|
2,052
|
|
2,764
|
|
|||
Restructuring and other charges
|
4,561
|
|
3,578
|
|
1,734
|
|
|||
Oil & Gas restructuring
|
679
|
|
—
|
|
—
|
|
|||
Held for sale curtailment charges
|
33
|
|
—
|
|
—
|
|
|||
Noncontrolling interests and 2015 GE Capital
preferred stock dividends
|
274
|
|
279
|
|
229
|
|
|||
Adjusted GE Industrial costs (Non-GAAP)
|
$
|
100,494
|
|
$
|
95,925
|
|
$
|
91,015
|
|
|
|
|
|
||||||
GE Industrial profit (GAAP)
|
$
|
6,595
|
|
$
|
13,093
|
|
$
|
12,630
|
|
GE Industrial margins (GAAP)
|
5.7
|
%
|
11.4
|
%
|
11.7
|
%
|
|||
|
|
|
|
||||||
GE Industrial operating profit (Non-GAAP)
|
$
|
13,868
|
|
$
|
15,558
|
|
$
|
15,859
|
|
GE Industrial operating profit margins (Non-GAAP)
|
12.1
|
%
|
14.0
|
%
|
14.8
|
%
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
AVERAGE GE SHAREOWNERS' EQUITY, EXCLUDING EFFECTS OF DISCONTINUED OPERATIONS (NON-GAAP)(a)
|
|||||||||||||||
|
|
|
|
|
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
|
|
|
|
|
|
||||||||||
Average GE Shareowners’ equity(a) (GAAP)
|
$
|
72,976
|
|
$
|
86,412
|
|
$
|
111,140
|
|
$
|
131,914
|
|
$
|
124,501
|
|
Less the effects of the average net investment
in discontinued operations
|
4,860
|
|
2,854
|
|
27,910
|
|
45,455
|
|
44,948
|
|
|||||
Average GE shareowners’ equity, excluding
effects of discontinued operations(b) (Non-GAAP)
|
$
|
68,116
|
|
$
|
83,558
|
|
$
|
83,230
|
|
$
|
86,459
|
|
$
|
79,553
|
|
(a)
|
On an annual basis, calculated using a five-point average.
|
(b)
|
Used for computing GE Industrial return on total capital (ROTC).
|
AVERAGE GE CAPITAL SHAREOWNER'S EQUITY, EXCLUDING EFFECTS OF DISCONTINUED OPERATIONS (NON-GAAP)(a)
|
|||||||||||||||
|
|
|
|
|
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
|
|
|
|
|
|
||||||||||
Average GE Capital Shareowner's equity(a) (GAAP)
|
$
|
20,509
|
|
$
|
34,382
|
|
$
|
67,930
|
|
$
|
85,370
|
|
$
|
83,358
|
|
Less the effects of the average net investment
in discontinued operations
|
4,883
|
|
2,955
|
|
28,028
|
|
45,589
|
|
45,023
|
|
|||||
Average GE Capital shareowner's equity, excluding
effects of discontinued operations(b) (Non-GAAP)
|
$
|
15,626
|
|
$
|
31,427
|
|
$
|
39,902
|
|
$
|
39,781
|
|
$
|
38,335
|
|
(a)
|
On an annual basis, calculated using a five-point average.
|
(b)
|
Used for computing GE Industrial return on total capital (ROTC).
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
GE INDUSTRIAL RETURN ON TOTAL CAPITAL (GE INDUSTRIAL ROTC) (NON-GAAP)
|
|
||||||||||||||
|
|
|
|
|
|
||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
|
|
|
|
|
|
||||||||||
Earnings (loss) from continuing operations (GAAP)
|
$
|
(5,748
|
)
|
$
|
9,494
|
|
$
|
1,700
|
|
$
|
9,490
|
|
$
|
7,881
|
|
Less: GE Capital earnings (loss) from continuing operations
|
(6,331
|
)
|
(606
|
)
|
(7,718
|
)
|
1,537
|
|
716
|
|
|||||
Plus: GE after-tax interest
|
2,037
|
|
1,499
|
|
1,262
|
|
1,026
|
|
865
|
|
|||||
GE Adjusted Industrial return (Non-GAAP)
|
$
|
2,620
|
|
$
|
11,599
|
|
$
|
10,680
|
|
$
|
8,979
|
|
$
|
8,030
|
|
|
|
|
|
|
|
||||||||||
Average GE shareowners' equity, excluding effects
of discontinued operations(a)
|
$
|
68,116
|
|
$
|
83,558
|
|
$
|
83,230
|
|
$
|
86,459
|
|
$
|
79,553
|
|
Less: average GE Capital shareowner's equity,
excluding effects of discontinued operations(a)
|
15,626
|
|
31,427
|
|
39,902
|
|
39,781
|
|
38,335
|
|
|||||
Average GE Industrial shareowners' equity, excluding
effects of discontinued operations
|
52,490
|
|
52,131
|
|
43,328
|
|
46,678
|
|
41,218
|
|
|||||
Plus: average debt(a)
|
32,184
|
|
21,491
|
|
18,411
|
|
15,724
|
|
13,652
|
|
|||||
Plus: other, net(b)
|
11,084
|
|
1,924
|
|
1,486
|
|
1,743
|
|
1,367
|
|
|||||
Adjusted GE Industrial capital (Non-GAAP)
|
$
|
95,758
|
|
$
|
75,546
|
|
$
|
63,225
|
|
$
|
64,145
|
|
$
|
56,237
|
|
|
|
|
|
|
|
||||||||||
GE Industrial ROTC (Non-GAAP)
|
2.7
|
%
|
15.4
|
%
|
16.9
|
%
|
14.0
|
%
|
14.3
|
%
|
(a)
|
On an annual basis, calculated using a five-point average.
|
(b)
|
Includes average noncontrolling interests, calculated using a five-point average partially offset by the estimated value of assets held by GE to support GE Capital.
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
GE INDUSTRIAL CASH FLOWS FROM OPERATING ACTIVITIES (GE INDUSTRIAL CFOA), ADJUSTED GE INDUSTRIAL CFOA AND GE INDUSTRIAL FREE CASH FLOW (FCF)
|
|||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Cash from GE's operating activities (continuing operations),
as reported (GAAP)
|
$
|
11,040
|
|
$
|
29,960
|
|
$
|
16,354
|
|
Adjustment: dividends from GE Capital
|
4,016
|
|
20,095
|
|
4,300
|
|
|||
GE Industrial CFOA (Non-GAAP)
|
$
|
7,024
|
|
$
|
9,865
|
|
$
|
12,054
|
|
Less: deal-related taxes
|
(229
|
)
|
(1,398
|
)
|
(184
|
)
|
|||
Less: GE Pension Plan funding
|
(1,717
|
)
|
(347
|
)
|
—
|
|
|||
Less: Oil & Gas CFOA
|
(477
|
)
|
—
|
|
—
|
|
|||
Add: BHGE Class B shareholder dividend
|
251
|
|
—
|
|
—
|
|
|||
Adjusted GE Industrial CFOA (Non-GAAP)
|
$
|
9,698
|
|
$
|
11,610
|
|
$
|
12,238
|
|
Adjustment: GE additions to property, plant and equipment
|
(4,132
|
)
|
(3,758
|
)
|
(3,785
|
)
|
|||
Adjustment: GE additions to internal-use software
|
(518
|
)
|
(740
|
)
|
(755
|
)
|
|||
Adjustment: Oil & Gas additions to property, plant and equipment
|
488
|
|
—
|
|
—
|
|
|||
Adjustment: Oil & Gas additions to internal-use software
|
34
|
|
—
|
|
—
|
|
|||
GE Industrial FCF (Non-GAAP)
|
$
|
5,569
|
|
$
|
7,112
|
|
$
|
7,698
|
|
MD&A
|
SUPPLEMENTAL INFORMATION
|
|
2018 OPERATING FRAMEWORK INCLUDING 2018 ADJUSTED EPS AND GE INDUSTRIAL FCF (NON-GAAP)
|
1)
|
Non-operating pension cost*. This amount is affected by, among other things, the timing of voluntary funding and associated asset allocation.
|
2)
|
Gains and restructuring net income/(loss). This amount is affected by, among other things:
|
2018 OPERATING FRAMEWORK GE INDUSTRIAL FREE CASH FLOW
|
|
(In billions)
|
2018F
|
|
|
GE CFOA
|
~$3-4
|
Adjustment: dividends from GE Capital
|
~ -
|
GE Industrial CFOA (Non-GAAP)
|
~$3-4
|
Less: GE Pension Plan funding and deal taxes
|
~(6)
|
Less: Oil & Gas CFOA
|
~1
|
Add: BHGE Class B shareholder dividend
|
~1
|
Adjusted GE Industrial CFOA (Non-GAAP)
|
~$9-10
|
Adjustment: GE additions to property, plant and equipment and internal-use software
|
~(4)
|
Adjustment: Oil & Gas additions to property, plant and equipment and internal-use software
|
~1
|
GE Industrial FCF (Non-GAAP)
|
~$6-7
|
OTHER FINANCIAL DATA
|
|
|
(Dollars in millions; per-share amounts in dollars)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
General Electric Company and Consolidated Affiliates
|
|
|
|
|
|
||||||||||
Revenues and other income
|
$
|
122,092
|
|
$
|
123,693
|
|
$
|
117,386
|
|
$
|
117,184
|
|
$
|
113,245
|
|
Earnings (loss) from continuing operations attributable to the Company
|
(5,471
|
)
|
9,784
|
|
1,681
|
|
9,535
|
|
7,618
|
|
|||||
Earnings (loss) from discontinued operations, net of taxes, attributable to the Company
|
(315
|
)
|
(952
|
)
|
(7,807
|
)
|
5,698
|
|
5,439
|
|
|||||
Net earnings (loss) attributable to the Company
|
(5,786
|
)
|
8,831
|
|
(6,126
|
)
|
15,233
|
|
13,057
|
|
|||||
Dividends declared(a)
|
7,741
|
|
9,054
|
|
9,161
|
|
8,948
|
|
8,060
|
|
|||||
Return on average GE shareowners’ equity
|
(8.7
|
)%
|
10.9
|
%
|
1.6
|
%
|
10.8
|
%
|
9.5
|
%
|
|||||
Per common share
|
|
|
|
|
|
||||||||||
Earnings (loss) from continuing operations – diluted
|
$
|
(0.68
|
)
|
$
|
1.00
|
|
$
|
0.17
|
|
$
|
0.94
|
|
$
|
0.74
|
|
Earnings (loss) from discontinued operations – diluted
|
(0.04
|
)
|
(0.10
|
)
|
(0.78
|
)
|
0.56
|
|
0.53
|
|
|||||
Net earnings (loss) – diluted
|
(0.72
|
)
|
0.89
|
|
(0.61
|
)
|
1.50
|
|
1.27
|
|
|||||
Earnings (loss) from continuing operations – basic
|
(0.68
|
)
|
1.01
|
|
0.17
|
|
0.95
|
|
0.74
|
|
|||||
Earnings (loss) from discontinued operations – basic
|
(0.04
|
)
|
(0.11
|
)
|
(0.78
|
)
|
0.57
|
|
0.53
|
|
|||||
Net earnings (loss) – basic
|
(0.72
|
)
|
0.90
|
|
(0.62
|
)
|
1.51
|
|
1.28
|
|
|||||
Dividends declared
|
0.84
|
|
0.93
|
|
0.92
|
|
0.89
|
|
0.79
|
|
|||||
Cash and equivalents
|
43,299
|
|
48,129
|
|
70,483
|
|
70,025
|
|
79,175
|
|
|||||
Total assets
|
377,945
|
|
365,183
|
|
493,071
|
|
653,931
|
|
662,202
|
|
|||||
Long-term borrowings
|
108,575
|
|
105,080
|
|
144,659
|
|
185,832
|
|
216,640
|
|
|||||
Common shares outstanding – average (in thousands)
|
8,687,492
|
|
9,025,479
|
|
9,944,179
|
|
10,044,995
|
|
10,222,198
|
|
|||||
GE funded research and development
|
4,803
|
|
4,782
|
|
4,249
|
|
4,233
|
|
4,643
|
|
|||||
Total employees
|
313,000
|
|
295,000
|
|
333,000
|
|
305,000
|
|
307,000
|
|
|||||
GE data
|
|
|
|
|
|
||||||||||
Short-term borrowings(c)
|
$
|
14,548
|
|
$
|
20,482
|
|
$
|
19,792
|
|
$
|
3,872
|
|
$
|
1,841
|
|
Long-term borrowings(c)
|
67,040
|
|
58,810
|
|
83,309
|
|
12,421
|
|
11,484
|
|
|||||
Redeemable noncontrolling interests
|
3,399
|
|
3,025
|
|
2,972
|
|
98
|
|
176
|
|
|||||
Noncontrolling interests
|
17,506
|
|
1,378
|
|
1,378
|
|
825
|
|
835
|
|
|||||
GE shareowners’ equity
|
64,263
|
|
75,828
|
|
98,274
|
|
128,159
|
|
130,566
|
|
|||||
Total capital invested
|
$
|
166,755
|
|
$
|
159,523
|
|
$
|
205,725
|
|
$
|
145,375
|
|
$
|
144,903
|
|
GE Industrial return on total capital(b)*
|
2.7
|
%
|
15.4
|
%
|
16.9
|
%
|
14.0
|
%
|
14.3
|
%
|
|||||
Borrowings as a percentage of total capital invested(b)
|
48.9
|
%
|
49.7
|
%
|
50.1
|
%
|
11.2
|
%
|
9.2
|
%
|
|||||
GE Capital data
|
|
|
|
|
|
||||||||||
GE Capital shareowner's equity
|
$
|
13,493
|
|
$
|
24,677
|
|
$
|
46,227
|
|
$
|
87,499
|
|
$
|
82,694
|
|
Total borrowings(d)
|
95,197
|
|
117,303
|
|
180,178
|
|
245,252
|
|
283,820
|
|
|||||
Ratio of debt to equity at GE Capital
|
7.06:1
|
|
4.75:1
|
|
3.90:1
|
|
2.80:1
|
|
3.43:1
|
|
(a)
|
Included $436 million, $656 million and $18 million of preferred stock dividends in 2017, 2016 and 2015, respectively.
|
(b)
|
Indicated terms are defined in the Other Terms used by GE section within the MD&A.
|
(c)
|
Excluding assumed debt of GE Capital, GE total borrowings were
$41,744 million
, $20,512 million and $18,397 million at
December 31, 2017
, 2016 and 2015, respectively. The short-term portion of GE borrowings excluding assumed debt of GE Capital was $6,237 million, $8,786 million and $2,150 million at
December 31, 2017
, 2016 and 2015, respectively.
|
(d)
|
Included $39,844 million, $58,780 million and $84,704 million of GE Capital debt assumed by GE and maintained as intercompany payable to GE at
December 31, 2017
, 2016 and 2015, respectively.
|
OTHER FINANCIAL DATA
|
|
|
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
||||||||
Period
|
Total number
of shares
purchased
|
|
Average
price paid
per share
|
|
Total number
of shares
purchased
as part of
our share
repurchase
program(a)
|
|
Approximate
dollar value
of shares that
may yet be
purchased
under our
share
repurchase
program(a)
|
|
(Shares in thousands)
|
|
|
|
|
||||
|
|
|
|
|
||||
2017
|
|
|
|
|
||||
October
|
1,764
|
|
$
|
22.27
|
|
1,764
|
|
|
November
|
2,547
|
|
18.94
|
|
2,547
|
|
|
|
December
|
1,431
|
|
17.67
|
|
1,431
|
|
|
|
Total
|
5,741
|
|
$
|
19.65
|
|
5,741
|
|
$20.9 billion
|
(a)
|
Shares were repurchased through the GE Share Repurchase Program that we announced on April 10, 2015 (the Program). Under the program, we are authorized to repurchase up to
$50.0 billion
of our common stock through 2018 and, as of December 31, 2017, we had repurchased a total of approximately
$29.1 billion
under the Program. The Program is flexible and shares will be acquired with a combination of borrowings and free cash flow from the public markets and other sources, including GE Stock Direct, a stock purchase plan that is available to the public.
|
RISK FACTORS
|
|
|
RISK FACTORS
|
|
|
RISK FACTORS
|
|
|
RISK FACTORS
|
|
|
RISK FACTORS
|
|
|
RISK FACTORS
|
|
|
LEGAL PROCEEDINGS
|
|
|
LEGAL PROCEEDINGS
|
|
|
LEGAL PROCEEDINGS
|
|
|
REPORTS
|
|
|
REPORTS
|
|
|
/s/ John L. Flannery
|
|
/s/ Jamie S. Miller
|
John L. Flannery
|
|
Jamie S. Miller
|
Chairman of the Board and
Chief Executive Officer
February 23, 2018
|
|
Senior Vice President and
Chief Financial Officer
|
REPORTS
|
|
|
/s/ KPMG LLP
|
KPMG LLP
We have served as the Company's auditor since 1909
Boston, Massachusetts
February 23, 2018 |
FINANCIAL STATEMENTS
|
|
|
Statement of Earnings (Loss)
|
|||
Consolidated Statement of Comprehensive Income (Loss)
|
|||
Statement of Financial Position
|
|||
Statement of Cash Flows
|
|||
Notes to Consolidated Financial Statements
|
|
||
1
|
|
Basis of Presentation and Summary of Significant Accounting Policies
|
|
2
|
|
Businesses Held for Sale and Discontinued Operations
|
|
3
|
|
Investment Securities
|
|
4
|
|
Current Receivables
|
|
5
|
|
Inventories
|
|
6
|
|
GE Capital Financing Receivables and Allowance for Losses on Financing Receivables
|
|
7
|
|
Property, Plant and Equipment
|
|
8
|
|
Acquisitions, Goodwill and Other Intangible Assets
|
|
9
|
|
Contract Assets
|
|
10
|
|
Borrowings
|
|
11
|
|
Investment Contracts, Insurance Liabilities and Insurance Annuity Benefits
|
|
12
|
|
Postretirement Benefit Plans
|
|
13
|
|
Income Taxes
|
|
14
|
|
Shareowners’ Equity
|
|
15
|
|
Other Stock-related Information
|
|
16
|
|
Earnings Per Share Information
|
|
17
|
|
Other Income
|
|
18
|
|
Fair Value Measurements
|
|
19
|
|
Financial Instruments
|
|
20
|
|
Variable Interest Entities
|
|
21
|
|
Commitments, Guarantees, Product Warranties and Other Loss Contingencies
|
|
22
|
|
Cash Flows Information
|
|
23
|
|
Intercompany Transactions
|
|
24
|
|
Operating Segments
|
|
25
|
|
Cost Information
|
|
26
|
|
Guarantor Financial Information
|
|
27
|
|
Quarterly Information (unaudited)
|
FINANCIAL STATEMENTS
|
|
|
STATEMENT OF EARNINGS (LOSS)
|
|
|
|
||||||
|
General Electric Company
and consolidated affiliates
|
||||||||
For the years ended December 31 (In millions; per-share amounts in dollars)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Revenues and other income
|
|
|
|
||||||
Sales of goods
|
$
|
75,641
|
|
$
|
75,414
|
|
$
|
74,510
|
|
Sales of services
|
37,551
|
|
34,976
|
|
31,298
|
|
|||
Other income (Note 17)
|
1,625
|
|
4,005
|
|
2,227
|
|
|||
GE Capital earnings (loss) from continuing operations
|
—
|
|
—
|
|
—
|
|
|||
GE Capital revenues from services
|
7,276
|
|
9,297
|
|
9,350
|
|
|||
Total revenues and other income
|
122,092
|
|
123,693
|
|
117,386
|
|
|||
|
|
|
|
||||||
Costs and expenses (Note 25)
|
|
|
|
||||||
Cost of goods sold
|
64,328
|
|
62,440
|
|
59,905
|
|
|||
Cost of services sold
|
27,606
|
|
25,043
|
|
22,788
|
|
|||
Selling, general and administrative expenses
|
18,280
|
|
18,377
|
|
17,831
|
|
|||
Interest and other financial charges
|
4,869
|
|
5,025
|
|
3,463
|
|
|||
Investment contracts, insurance losses and
insurance annuity benefits
|
12,168
|
|
2,797
|
|
2,605
|
|
|||
Other costs and expenses
|
3,632
|
|
982
|
|
2,608
|
|
|||
Total costs and expenses
|
130,883
|
|
114,663
|
|
109,200
|
|
|||
|
|
|
|
||||||
Earnings (loss) from continuing operations
before income taxes
|
(8,791
|
)
|
9,030
|
|
8,186
|
|
|||
Benefit (provision) for income taxes (Note 13)
|
3,043
|
|
464
|
|
(6,485
|
)
|
|||
Earnings (loss) from continuing operations
|
(5,748
|
)
|
9,494
|
|
1,700
|
|
|||
Earnings (loss) from discontinued operations,
net of taxes (Note 2)
|
(309
|
)
|
(954
|
)
|
(7,495
|
)
|
|||
Net earnings (loss)
|
(6,056
|
)
|
8,540
|
|
(5,795
|
)
|
|||
Less net earnings (loss) attributable to noncontrolling interests
|
(270
|
)
|
(291
|
)
|
332
|
|
|||
Net earnings (loss) attributable to the Company
|
(5,786
|
)
|
8,831
|
|
(6,126
|
)
|
|||
Preferred stock dividends
|
(436
|
)
|
(656
|
)
|
(18
|
)
|
|||
Net earnings (loss) attributable to GE common shareowners
|
$
|
(6,222
|
)
|
$
|
8,176
|
|
$
|
(6,145
|
)
|
|
|
|
|
||||||
Amounts attributable to GE common shareowners
|
|
|
|
||||||
Earnings (loss) from continuing operations
|
$
|
(5,748
|
)
|
$
|
9,494
|
|
$
|
1,700
|
|
Less net earnings (loss) attributable to
noncontrolling interests, continuing operations
|
(277
|
)
|
(290
|
)
|
19
|
|
|||
Earnings (loss) from continuing operations attributable
to the Company
|
(5,471
|
)
|
9,784
|
|
1,681
|
|
|||
Preferred stock dividends
|
(436
|
)
|
(656
|
)
|
(18
|
)
|
|||
Earnings (loss) from continuing operations attributable
to GE common shareowners
|
(5,907
|
)
|
9,128
|
|
1,663
|
|
|||
Earnings (loss) from discontinued operations, net of taxes
|
(309
|
)
|
(954
|
)
|
(7,495
|
)
|
|||
Less net earnings (loss) attributable to
noncontrolling interests, discontinued operations
|
6
|
|
(1
|
)
|
312
|
|
|||
Net earnings (loss) attributable to GE common shareowners
|
$
|
(6,222
|
)
|
$
|
8,176
|
|
$
|
(6,145
|
)
|
|
|
|
|
||||||
Per-share amounts (Note 16)
|
|
|
|
||||||
Earnings (loss) from continuing operations
|
|
|
|
||||||
Diluted earnings (loss) per share
|
$
|
(0.68
|
)
|
$
|
1.00
|
|
$
|
0.17
|
|
Basic earnings (loss) per share
|
$
|
(0.68
|
)
|
$
|
1.01
|
|
$
|
0.17
|
|
|
|
|
|
||||||
Net earnings (loss)
|
|
|
|
||||||
Diluted earnings (loss) per share
|
$
|
(0.72
|
)
|
$
|
0.89
|
|
$
|
(0.61
|
)
|
Basic earnings (loss) per share
|
$
|
(0.72
|
)
|
$
|
0.90
|
|
$
|
(0.62
|
)
|
|
|
|
|
||||||
Dividends declared per common share
|
$
|
0.84
|
|
$
|
0.93
|
|
$
|
0.92
|
|
FINANCIAL STATEMENTS
|
|
|
STATEMENT OF EARNINGS (LOSS) (CONTINUED)
|
|
|
|
|
|
|
|||||||||||||
For the years ended December 31
|
GE(a)
|
|
Financial Services (GE Capital)
|
||||||||||||||||
(In millions; per-share amounts in dollars)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Revenues and other income
|
|
|
|
|
|
|
|
||||||||||||
Sales of goods
|
$
|
75,718
|
|
$
|
75,580
|
|
$
|
74,565
|
|
|
$
|
130
|
|
$
|
115
|
|
$
|
79
|
|
Sales of services
|
37,761
|
|
35,255
|
|
31,641
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Other income (Note 17)
|
1,436
|
|
4,092
|
|
2,165
|
|
|
—
|
|
—
|
|
—
|
|
||||||
GE Capital earnings (loss) from continuing operations
|
(6,765
|
)
|
(1,251
|
)
|
(7,672
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
GE Capital revenues from services
|
—
|
|
—
|
|
—
|
|
|
8,940
|
|
10,790
|
|
10,722
|
|
||||||
Total revenues and other income
|
108,150
|
|
113,676
|
|
100,700
|
|
|
9,070
|
|
10,905
|
|
10,801
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Costs and expenses (Note 25)
|
|
|
|
|
|
|
|
||||||||||||
Cost of goods sold
|
64,433
|
|
62,628
|
|
59,970
|
|
|
102
|
|
93
|
|
69
|
|
||||||
Cost of services sold
|
25,619
|
|
23,084
|
|
20,858
|
|
|
2,196
|
|
2,238
|
|
2,273
|
|
||||||
Selling, general and administrative expenses
|
17,103
|
|
16,123
|
|
14,914
|
|
|
1,676
|
|
2,947
|
|
3,512
|
|
||||||
Interest and other financial charges
|
2,753
|
|
2,026
|
|
1,706
|
|
|
3,145
|
|
3,790
|
|
2,301
|
|
||||||
Investment contracts, insurance losses and
insurance annuity benefits
|
—
|
|
—
|
|
—
|
|
|
12,213
|
|
2,861
|
|
2,737
|
|
||||||
Other costs and expenses
|
1,165
|
|
—
|
|
—
|
|
|
2,371
|
|
1,013
|
|
2,647
|
|
||||||
Total costs and expenses
|
111,072
|
|
103,860
|
|
97,447
|
|
|
21,703
|
|
12,942
|
|
13,539
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) from continuing operations
before income taxes
|
(2,922
|
)
|
9,815
|
|
3,252
|
|
|
(12,633
|
)
|
(2,037
|
)
|
(2,739
|
)
|
||||||
Benefit (provision) for income taxes (Note 13)
|
(3,259
|
)
|
(967
|
)
|
(1,506
|
)
|
|
6,302
|
|
1,431
|
|
(4,979
|
)
|
||||||
Earnings (loss) from continuing operations
|
(6,181
|
)
|
8,849
|
|
1,746
|
|
|
(6,331
|
)
|
(606
|
)
|
(7,718
|
)
|
||||||
Earnings (loss) from discontinued operations,
net of taxes (Note 2)
|
(315
|
)
|
(952
|
)
|
(7,807
|
)
|
|
(312
|
)
|
(954
|
)
|
(7,485
|
)
|
||||||
Net earnings (loss)
|
(6,496
|
)
|
7,896
|
|
(6,061
|
)
|
|
(6,643
|
)
|
(1,560
|
)
|
(15,202
|
)
|
||||||
Less net earnings (loss) attributable to noncontrolling interests
|
(274
|
)
|
(279
|
)
|
83
|
|
|
4
|
|
(12
|
)
|
248
|
|
||||||
Net earnings (loss) attributable to the Company
|
(6,222
|
)
|
8,176
|
|
(6,145
|
)
|
|
(6,647
|
)
|
(1,548
|
)
|
(15,450
|
)
|
||||||
Preferred stock dividends
|
—
|
|
—
|
|
—
|
|
|
(436
|
)
|
(656
|
)
|
(330
|
)
|
||||||
Net earnings (loss) attributable to GE common shareowners
|
$
|
(6,222
|
)
|
$
|
8,176
|
|
$
|
(6,145
|
)
|
|
$
|
(7,083
|
)
|
$
|
(2,204
|
)
|
$
|
(15,780
|
)
|
|
|
|
|
|
|
|
|
||||||||||||
Amounts attributable to GE common shareowners:
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) from continuing operations
|
$
|
(6,181
|
)
|
$
|
8,849
|
|
$
|
1,746
|
|
|
$
|
(6,331
|
)
|
$
|
(606
|
)
|
$
|
(7,718
|
)
|
Less net earnings (loss) attributable to
noncontrolling interests, continuing operations
|
(274
|
)
|
(279
|
)
|
83
|
|
|
(3
|
)
|
(10
|
)
|
(64
|
)
|
||||||
Earnings (loss) from continuing operations attributable
to the Company
|
(5,907
|
)
|
9,128
|
|
1,663
|
|
|
(6,328
|
)
|
(595
|
)
|
(7,654
|
)
|
||||||
Preferred stock dividends
|
—
|
|
—
|
|
—
|
|
|
(436
|
)
|
(656
|
)
|
(330
|
)
|
||||||
Earnings (loss) from continuing operations attributable
to GE common shareowners
|
(5,907
|
)
|
9,128
|
|
1,663
|
|
|
(6,765
|
)
|
(1,251
|
)
|
(7,983
|
)
|
||||||
Earnings (loss) from discontinued operations, net of taxes
|
(315
|
)
|
(952
|
)
|
(7,807
|
)
|
|
(312
|
)
|
(954
|
)
|
(7,485
|
)
|
||||||
Less net earnings (loss) attributable to
noncontrolling interests, discontinued operations
|
—
|
|
—
|
|
—
|
|
|
6
|
|
(1
|
)
|
312
|
|
||||||
Net earnings (loss) attributable to GE common shareowners
|
$
|
(6,222
|
)
|
$
|
8,176
|
|
$
|
(6,145
|
)
|
|
$
|
(7,083
|
)
|
$
|
(2,204
|
)
|
$
|
(15,780
|
)
|
(a)
|
Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis. See Note 1.
|
FINANCIAL STATEMENTS
|
|
|
GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES
|
|
|
|
||||||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
||||||
|
|
|
|
||||||
For the years ended December 31 (In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Net earnings (loss)
|
$
|
(6,056
|
)
|
$
|
8,540
|
|
$
|
(5,795
|
)
|
Less net earnings (loss) attributable to noncontrolling interests
|
(270
|
)
|
(291
|
)
|
332
|
|
|||
Net earnings (loss) attributable to the Company
|
$
|
(5,786
|
)
|
$
|
8,831
|
|
$
|
(6,126
|
)
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
|
|
|
||||||
Investment securities
|
$
|
(775
|
)
|
$
|
203
|
|
$
|
(553
|
)
|
Currency translation adjustments
|
2,198
|
|
(1,311
|
)
|
(3,137
|
)
|
|||
Cash flow hedges
|
51
|
|
93
|
|
99
|
|
|||
Benefit plans
|
2,782
|
|
(1,068
|
)
|
5,165
|
|
|||
Other comprehensive income (loss)
|
4,255
|
|
(2,083
|
)
|
1,575
|
|
|||
Less other comprehensive income (loss) attributable to noncontrolling interests
|
53
|
|
(14
|
)
|
(69
|
)
|
|||
Other comprehensive income (loss) attributable to the Company
|
$
|
4,202
|
|
$
|
(2,069
|
)
|
$
|
1,644
|
|
|
|
|
|
||||||
Comprehensive income (loss)
|
$
|
(1,801
|
)
|
$
|
6,457
|
|
$
|
(4,220
|
)
|
Less comprehensive income (loss) attributable to noncontrolling interests
|
(217
|
)
|
(305
|
)
|
263
|
|
|||
Comprehensive income (loss) attributable to the Company
|
$
|
(1,584
|
)
|
$
|
6,762
|
|
$
|
(4,483
|
)
|
FINANCIAL STATEMENTS
|
|
|
FINANCIAL STATEMENTS
|
|
|
STATEMENT OF FINANCIAL POSITION
|
||||||
|
General Electric Company
and consolidated affiliates |
|||||
December 31 (In millions, except share amounts)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Assets
|
|
|
||||
Cash and equivalents
|
$
|
43,299
|
|
$
|
48,129
|
|
Investment securities (Note 3)
|
38,696
|
|
44,313
|
|
||
Current receivables (Note 4)
|
24,438
|
|
24,076
|
|
||
Inventories (Note 5)
|
21,923
|
|
22,354
|
|
||
Financing receivables – net (Note 6)
|
10,336
|
|
12,242
|
|
||
Other GE Capital receivables
|
6,301
|
|
5,944
|
|
||
Property, plant and equipment – net (Note 7)
|
53,874
|
|
50,518
|
|
||
Receivable from GE Capital (debt assumption)
|
—
|
|
—
|
|
||
Investment in GE Capital
|
—
|
|
—
|
|
||
Goodwill (Note 8)
|
83,968
|
|
70,438
|
|
||
Other intangible assets – net (Note 8)
|
20,273
|
|
16,436
|
|
||
Contract assets (Note 9)
|
28,861
|
|
25,162
|
|
||
All other assets
|
29,612
|
|
27,176
|
|
||
Deferred income taxes (Note 13)
|
6,207
|
|
1,833
|
|
||
Assets of businesses held for sale (Note 2)
|
4,243
|
|
1,745
|
|
||
Assets of discontinued operations (Note 2)
|
5,912
|
|
14,815
|
|
||
Total assets(a)
|
$
|
377,945
|
|
$
|
365,183
|
|
|
|
|
||||
Liabilities and equity
|
|
|
||||
Short-term borrowings (Note 10)
|
$
|
24,036
|
|
$
|
30,714
|
|
Accounts payable, principally trade accounts
|
15,153
|
|
14,435
|
|
||
Progress collections and price adjustments accrued
|
18,462
|
|
16,760
|
|
||
Dividends payable
|
1,052
|
|
2,107
|
|
||
Other GE current liabilities
|
18,697
|
|
17,564
|
|
||
Non-recourse borrowings of consolidated securitization entities (Note 10)
|
1,980
|
|
417
|
|
||
Long-term borrowings (Note 10)
|
108,575
|
|
105,080
|
|
||
Investment contracts, insurance liabilities and insurance annuity benefits (Note 11)
|
38,136
|
|
26,086
|
|
||
Non-current compensation and benefits
|
41,630
|
|
43,780
|
|
||
All other liabilities
|
22,795
|
|
22,912
|
|
||
Liabilities of businesses held for sale (Note 2)
|
1,339
|
|
656
|
|
||
Liabilities of discontinued operations (Note 2)
|
706
|
|
4,158
|
|
||
Total liabilities(a)
|
292,561
|
|
284,668
|
|
||
|
|
|
||||
Redeemable noncontrolling interests (Note 14)
|
3,399
|
|
3,025
|
|
||
|
|
|
||||
Preferred stock (5,939,874 and 5,944,250 and shares outstanding at December 31, 2017 and
December 31, 2016, respectively)
|
6
|
|
6
|
|
||
Common stock (8,680,571,000 and 8,742,614,000 shares outstanding
at December 31, 2017 and December 31, 2016, respectively)
|
702
|
|
702
|
|
||
Accumulated other comprehensive income (loss) – net attributable to GE(b)
|
|
|
||||
Investment securities
|
(102
|
)
|
674
|
|
||
Currency translation adjustments
|
(4,653
|
)
|
(6,816
|
)
|
||
Cash flow hedges
|
62
|
|
12
|
|
||
Benefit plans
|
(9,702
|
)
|
(12,469
|
)
|
||
Other capital
|
37,171
|
|
37,224
|
|
||
Retained earnings
|
125,682
|
|
139,532
|
|
||
Less common stock held in treasury
|
(84,902
|
)
|
(83,038
|
)
|
||
Total GE shareowners’ equity
|
64,263
|
|
75,828
|
|
||
Noncontrolling interests(c) (Note 14)
|
17,723
|
|
1,663
|
|
||
Total equity (Note 14)
|
81,986
|
|
77,491
|
|
||
Total liabilities, redeemable noncontrolling interests and equity
|
$
|
377,945
|
|
$
|
365,183
|
|
(a)
|
Our consolidated assets at
December 31, 2017
included total assets of
$6,200 million
of certain variable interest entities (VIEs) that can only be used to settle the liabilities of those VIEs. These assets included current receivables and net financing receivables of
$1,720 million
and investment securities of
$918 million
within continuing operations and assets of discontinued operations of
$300 million
. Our consolidated liabilities at
December 31, 2017
included liabilities of certain VIEs for which the VIE creditors do not have recourse to GE. These liabilities included non-recourse borrowings of consolidated securitization entities (CSEs) of
$685 million
within continuing operations. See Note 20.
|
(b)
|
The sum of accumulated other comprehensive income (loss) (AOCI) attributable to the Company was
$(14,396) million
and
$(18,598) million
at
December 31, 2017
and
December 31, 2016
, respectively.
|
(c)
|
Included AOCI attributable to noncontrolling interests of
$(226) million
and
$(278) million
at
December 31, 2017
and
December 31, 2016
, respectively.
|
FINANCIAL STATEMENTS
|
|
|
STATEMENT OF FINANCIAL POSITION (CONTINUED)
|
|
|
|
|
|
||||||||
|
GE(a)
|
|
Financial Services (GE Capital)
|
||||||||||
December 31 (In millions, except share amounts)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
||||||||
Cash and equivalents
|
$
|
18,211
|
|
$
|
10,525
|
|
|
$
|
25,088
|
|
$
|
37,604
|
|
Investment securities (Note 3)
|
569
|
|
137
|
|
|
38,231
|
|
44,180
|
|
||||
Current receivables (Note 4)
|
14,867
|
|
12,715
|
|
|
—
|
|
—
|
|
||||
Inventories (Note 5)
|
21,848
|
|
22,263
|
|
|
75
|
|
91
|
|
||||
Financing receivables – net (Note 6)
|
—
|
|
—
|
|
|
21,967
|
|
26,041
|
|
||||
Other GE Capital receivables
|
—
|
|
—
|
|
|
16,945
|
|
15,576
|
|
||||
Property, plant and equipment – net (Note 7)
|
23,963
|
|
19,103
|
|
|
30,595
|
|
32,225
|
|
||||
Receivable from GE Capital (debt assumption)(b)
|
39,844
|
|
58,780
|
|
|
—
|
|
—
|
|
||||
Investment in GE Capital
|
13,493
|
|
24,677
|
|
|
—
|
|
—
|
|
||||
Goodwill (Note 8)
|
82,985
|
|
68,070
|
|
|
984
|
|
2,368
|
|
||||
Other intangible assets – net (Note 8)
|
20,014
|
|
16,131
|
|
|
259
|
|
305
|
|
||||
Contract assets (Note 9)
|
28,861
|
|
25,162
|
|
|
—
|
|
—
|
|
||||
All other assets
|
14,035
|
|
12,007
|
|
|
15,662
|
|
14,608
|
|
||||
Deferred income taxes (Note 13)
|
5,204
|
|
6,666
|
|
|
999
|
|
(4,833
|
)
|
||||
Assets of businesses held for sale (Note 2)
|
3,877
|
|
1,629
|
|
|
—
|
|
—
|
|
||||
Assets of discontinued operations (Note 2)
|
—
|
|
9
|
|
|
5,912
|
|
14,806
|
|
||||
Total assets
|
$
|
287,770
|
|
$
|
277,874
|
|
|
$
|
156,716
|
|
$
|
182,970
|
|
|
|
|
|
|
|
||||||||
Liabilities and equity
|
|
|
|
|
|
||||||||
Short-term borrowings(b) (Note 10)
|
$
|
14,548
|
|
$
|
20,482
|
|
|
$
|
19,602
|
|
$
|
23,443
|
|
Accounts payable, principally trade accounts
|
21,634
|
|
20,876
|
|
|
1,853
|
|
1,605
|
|
||||
Progress collections and price adjustments accrued
|
18,566
|
|
16,838
|
|
|
—
|
|
—
|
|
||||
Dividends payable
|
1,052
|
|
2,107
|
|
|
—
|
|
—
|
|
||||
Other GE current liabilities
|
18,697
|
|
17,564
|
|
|
—
|
|
—
|
|
||||
Non-recourse borrowings of consolidated securitization entities (Note 10)
|
—
|
|
—
|
|
|
1,980
|
|
417
|
|
||||
Long-term borrowings(b) (Note 10)
|
67,040
|
|
58,810
|
|
|
73,614
|
|
93,443
|
|
||||
Investment contracts, insurance liabilities and insurance annuity benefits (Note 11)
|
—
|
|
—
|
|
|
38,587
|
|
26,546
|
|
||||
Non-current compensation and benefits
|
40,820
|
|
42,770
|
|
|
801
|
|
1,001
|
|
||||
All other liabilities
|
18,884
|
|
17,506
|
|
|
5,886
|
|
7,430
|
|
||||
Liabilities of businesses held for sale (Note 2)
|
1,339
|
|
656
|
|
|
—
|
|
—
|
|
||||
Liabilities of discontinued operations (Note 2)
|
23
|
|
35
|
|
|
683
|
|
4,123
|
|
||||
Total liabilities
|
202,602
|
|
197,644
|
|
|
143,007
|
|
158,008
|
|
||||
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interests (Note 14)
|
3,399
|
|
3,025
|
|
|
—
|
|
—
|
|
||||
|
|
|
|
|
|
||||||||
Preferred stock (5,939,874 and 5,944,250 shares outstanding at December 31, 2017
and December 31, 2016, respectively)
|
6
|
|
6
|
|
|
6
|
|
6
|
|
||||
Common stock (8,680,571,000 and 8,742,614,000 shares outstanding
at December 31, 2017 and December 31, 2016, respectively)
|
702
|
|
702
|
|
|
—
|
|
—
|
|
||||
Accumulated other comprehensive income (loss) – net attributable to GE
|
|
|
|
|
|
||||||||
Investment securities
|
(102
|
)
|
674
|
|
|
(99
|
)
|
656
|
|
||||
Currency translation adjustments
|
(4,653
|
)
|
(6,816
|
)
|
|
(225
|
)
|
(740
|
)
|
||||
Cash flow hedges
|
62
|
|
12
|
|
|
54
|
|
43
|
|
||||
Benefit plans
|
(9,702
|
)
|
(12,469
|
)
|
|
(524
|
)
|
(622
|
)
|
||||
Other capital
|
37,171
|
|
37,224
|
|
|
12,806
|
|
12,669
|
|
||||
Retained earnings
|
125,682
|
|
139,532
|
|
|
1,476
|
|
12,664
|
|
||||
Less common stock held in treasury
|
(84,902
|
)
|
(83,038
|
)
|
|
—
|
|
—
|
|
||||
Total GE shareowners’ equity
|
64,263
|
|
75,828
|
|
|
13,493
|
|
24,677
|
|
||||
Noncontrolling interests (Note 14)
|
17,506
|
|
1,378
|
|
|
217
|
|
285
|
|
||||
Total equity (Note 14)
|
81,769
|
|
77,205
|
|
|
13,709
|
|
24,962
|
|
||||
Total liabilities, redeemable noncontrolling interests and equity
|
$
|
287,770
|
|
$
|
277,874
|
|
|
$
|
156,716
|
|
$
|
182,970
|
|
(a)
|
Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis. See Note 1.
|
(b)
|
In 2015, senior unsecured notes and commercial paper were assumed by GE upon its merger with GE Capital, resulting in an intercompany receivable and payable between GE and GE Capital. See Note 10 for further information.
|
FINANCIAL STATEMENTS
|
|
|
STATEMENT OF CASH FLOWS
|
|
|
|
||||||
|
General Electric Company
and consolidated affiliates
|
||||||||
For the years ended December 31 (In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Cash flows – operating activities
|
|
|
|
||||||
Net earnings (loss)
|
$
|
(6,056
|
)
|
$
|
8,540
|
|
$
|
(5,795
|
)
|
Less net earnings (loss) attributable to noncontrolling interests
|
(270
|
)
|
(291
|
)
|
332
|
|
|||
Net earnings (loss) attributable to the Company
|
(5,786
|
)
|
8,831
|
|
(6,126
|
)
|
|||
(Earnings) loss from discontinued operations
|
309
|
|
954
|
|
7,495
|
|
|||
Adjustments to reconcile net earnings attributable to the
Company to cash provided from operating activities:
|
|
|
|
||||||
Depreciation and amortization of property, plant and equipment
|
5,139
|
|
4,997
|
|
4,847
|
|
|||
(Earnings) loss from continuing operations retained by GE Capital
|
—
|
|
—
|
|
—
|
|
|||
Deferred income taxes
|
(4,845
|
)
|
814
|
|
383
|
|
|||
Decrease (increase) in GE current receivables
|
1,551
|
|
1,514
|
|
(52
|
)
|
|||
Decrease (increase) in inventories
|
747
|
|
(1,389
|
)
|
(314
|
)
|
|||
Increase (decrease) in accounts payable
|
(335
|
)
|
1,198
|
|
(541
|
)
|
|||
Increase (decrease) in GE progress collections
|
1,322
|
|
1,836
|
|
(996
|
)
|
|||
All other operating activities
|
13,291
|
|
(12,655
|
)
|
7,160
|
|
|||
Cash from (used for) operating activities – continuing operations
|
11,394
|
|
6,099
|
|
11,856
|
|
|||
Cash from (used for) operating activities – discontinued operations
|
(968
|
)
|
(6,343
|
)
|
8,034
|
|
|||
Cash from (used for) operating activities
|
10,426
|
|
(244
|
)
|
19,891
|
|
|||
|
|
|
|
||||||
Cash flows – investing activities
|
|
|
|
||||||
Additions to property, plant and equipment
|
(7,371
|
)
|
(7,199
|
)
|
(7,309
|
)
|
|||
Dispositions of property, plant and equipment
|
5,746
|
|
4,424
|
|
3,020
|
|
|||
Additions to internal-use software
|
(549
|
)
|
(749
|
)
|
(778
|
)
|
|||
Net decrease (increase) in GE Capital financing receivables
|
805
|
|
200
|
|
1,043
|
|
|||
Proceeds from sale of discontinued operations
|
1,464
|
|
59,890
|
|
79,615
|
|
|||
Proceeds from principal business dispositions
|
3,228
|
|
5,357
|
|
2,283
|
|
|||
Net cash from (payments for) principal businesses purchased
|
(6,087
|
)
|
(2,271
|
)
|
(12,027
|
)
|
|||
All other investing activities
|
6,704
|
|
2,960
|
|
(4,235
|
)
|
|||
Cash from (used for) investing activities – continuing operations
|
3,940
|
|
62,613
|
|
61,613
|
|
|||
Cash from (used for) investing activities – discontinued operations
|
(1,618
|
)
|
(13,412
|
)
|
(2,125
|
)
|
|||
Cash from (used for) investing activities
|
2,322
|
|
49,202
|
|
59,488
|
|
|||
|
|
|
|
||||||
Cash flows – financing activities
|
|
|
|
||||||
Net increase (decrease) in borrowings (maturities of 90 days or less)
|
1,794
|
|
(1,135
|
)
|
(24,459
|
)
|
|||
Newly issued debt (maturities longer than 90 days)
|
14,876
|
|
1,492
|
|
13,951
|
|
|||
Repayments and other reductions (maturities longer than 90 days)
|
(25,622
|
)
|
(58,768
|
)
|
(47,038
|
)
|
|||
Net dispositions (purchases) of GE shares for treasury
|
(2,550
|
)
|
(21,429
|
)
|
(1,099
|
)
|
|||
Dividends paid to shareowners
|
(8,650
|
)
|
(8,806
|
)
|
(9,295
|
)
|
|||
All other financing activities
|
(903
|
)
|
(1,274
|
)
|
(1,605
|
)
|
|||
Cash from (used for) financing activities – continuing operations
|
(21,055
|
)
|
(89,920
|
)
|
(69,547
|
)
|
|||
Cash from (used for) financing activities – discontinued operations
|
1,909
|
|
789
|
|
(6,507
|
)
|
|||
Cash from (used for) financing activities
|
(19,146
|
)
|
(89,131
|
)
|
(76,054
|
)
|
|||
Effect of currency exchange rate changes on cash and equivalents
|
891
|
|
(1,146
|
)
|
(3,464
|
)
|
|||
Increase (decrease) in cash and equivalents
|
(5,507
|
)
|
(41,319
|
)
|
(138
|
)
|
|||
Cash and equivalents at beginning of year
|
49,558
|
|
90,879
|
|
91,017
|
|
|||
Cash and equivalents at end of year
|
44,051
|
|
49,558
|
|
90,879
|
|
|||
Less cash and equivalents of discontinued operations at end of year
|
752
|
|
1,429
|
|
20,395
|
|
|||
Cash and equivalents of continuing operations at end of year
|
$
|
43,299
|
|
$
|
48,129
|
|
$
|
70,483
|
|
Supplemental disclosure of cash flows information
|
|
|
|
||||||
Cash paid during the year for interest
|
$
|
(5,049
|
)
|
$
|
(5,779
|
)
|
$
|
(8,764
|
)
|
Cash recovered (paid) during the year for income taxes
|
(2,436
|
)
|
(7,469
|
)
|
(2,486
|
)
|
FINANCIAL STATEMENTS
|
|
|
STATEMENT OF CASH FLOWS (CONTINUED)
|
|
|
|
|
|
|
|
||||||||||||
|
GE(a)
|
|
Financial Services (GE Capital)
|
||||||||||||||||
For the years ended December 31 (In millions)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Cash flows – operating activities
|
|
|
|
|
|
|
|
||||||||||||
Net earnings (loss)
|
$
|
(6,496
|
)
|
$
|
7,896
|
|
$
|
(6,061
|
)
|
|
$
|
(6,643
|
)
|
$
|
(1,560
|
)
|
$
|
(15,202
|
)
|
Less net earnings (loss) attributable to noncontrolling interests
|
(274
|
)
|
(279
|
)
|
83
|
|
|
4
|
|
(12
|
)
|
248
|
|
||||||
Net earnings (loss) attributable to the Company
|
(6,222
|
)
|
8,176
|
|
(6,145
|
)
|
|
(6,647
|
)
|
(1,548
|
)
|
(15,450
|
)
|
||||||
(Earnings) loss from discontinued operations
|
315
|
|
952
|
|
7,807
|
|
|
312
|
|
954
|
|
7,485
|
|
||||||
Adjustments to reconcile net earnings attributable to the Company to cash provided from operating activities:
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization of property, plant and equipment
|
2,857
|
|
2,597
|
|
2,473
|
|
|
2,277
|
|
2,384
|
|
2,436
|
|
||||||
(Earnings) loss from continuing operations retained by GE Capital(b)
|
10,781
|
|
21,345
|
|
12,284
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Deferred income taxes
|
449
|
|
1,107
|
|
(1,800
|
)
|
|
(5,294
|
)
|
(293
|
)
|
2,183
|
|
||||||
Decrease (increase) in GE current receivables
|
297
|
|
929
|
|
666
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Decrease (increase) in inventories
|
764
|
|
(1,337
|
)
|
(282
|
)
|
|
(2
|
)
|
(10
|
)
|
(14
|
)
|
||||||
Increase (decrease) in accounts payable
|
(370
|
)
|
1,716
|
|
276
|
|
|
(75
|
)
|
17
|
|
(189
|
)
|
||||||
Increase (decrease) in GE progress collections
|
1,349
|
|
1,913
|
|
(1,010
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
All other operating activities
|
822
|
|
(7,438
|
)
|
2,083
|
|
|
11,802
|
|
(3,054
|
)
|
5,087
|
|
||||||
Cash from (used for) operating activities – continuing operations
|
11,040
|
|
29,960
|
|
16,354
|
|
|
2,374
|
|
(1,552
|
)
|
1,537
|
|
||||||
Cash from (used for) operating activities – discontinued operations
|
(1
|
)
|
(90
|
)
|
(12
|
)
|
|
(968
|
)
|
(6,253
|
)
|
8,046
|
|
||||||
Cash from (used for) operating activities
|
11,039
|
|
29,870
|
|
16,342
|
|
|
1,407
|
|
(7,805
|
)
|
9,583
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Cash flows – investing activities
|
|
|
|
|
|
|
|
||||||||||||
Additions to property, plant and equipment
|
(4,132
|
)
|
(3,758
|
)
|
(3,785
|
)
|
|
(3,680
|
)
|
(3,769
|
)
|
(4,237
|
)
|
||||||
Dispositions of property, plant and equipment
|
1,401
|
|
1,080
|
|
939
|
|
|
4,579
|
|
3,637
|
|
2,526
|
|
||||||
Additions to internal-use software
|
(518
|
)
|
(740
|
)
|
(755
|
)
|
|
(31
|
)
|
(8
|
)
|
(23
|
)
|
||||||
Net decrease (increase) in GE Capital financing receivables
|
—
|
|
—
|
|
—
|
|
|
2,897
|
|
(1,279
|
)
|
226
|
|
||||||
Proceeds from sale of discontinued operations
|
—
|
|
—
|
|
—
|
|
|
1,464
|
|
59,890
|
|
79,615
|
|
||||||
Proceeds from principal business dispositions
|
3,106
|
|
5,357
|
|
1,725
|
|
|
—
|
|
—
|
|
532
|
|
||||||
Net cash from (payments for) principal businesses purchased
|
(6,087
|
)
|
(2,271
|
)
|
(10,350
|
)
|
|
—
|
|
—
|
|
(1,677
|
)
|
||||||
All other investing activities
|
(2,097
|
)
|
(1,652
|
)
|
(553
|
)
|
|
3,052
|
|
1,647
|
|
(4,667
|
)
|
||||||
Cash from (used for) investing activities – continuing operations
|
(8,328
|
)
|
(1,984
|
)
|
(12,779
|
)
|
|
8,282
|
|
60,118
|
|
72,295
|
|
||||||
Cash from (used for) investing activities – discontinued operations
|
1
|
|
90
|
|
12
|
|
|
(1,618
|
)
|
(13,501
|
)
|
(2,137
|
)
|
||||||
Cash from (used for) investing activities
|
(8,327
|
)
|
(1,894
|
)
|
(12,767
|
)
|
|
6,664
|
|
46,617
|
|
70,158
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Cash flows – financing activities
|
|
|
|
|
|
|
|
||||||||||||
Net increase (decrease) in borrowings (maturities of 90 days or less)
|
1,680
|
|
1,595
|
|
603
|
|
|
69
|
|
(1,655
|
)
|
(24,834
|
)
|
||||||
Newly issued debt (maturities longer than 90 days)
|
20,264
|
|
5,307
|
|
3,560
|
|
|
1,909
|
|
1,174
|
|
10,391
|
|
||||||
Repayments and other reductions (maturities longer than 90 days)
|
(5,981
|
)
|
(4,156
|
)
|
(2,190
|
)
|
|
(21,007
|
)
|
(58,285
|
)
|
(44,848
|
)
|
||||||
Net dispositions (purchases) of GE shares for treasury
|
(2,550
|
)
|
(21,429
|
)
|
(1,099
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Dividends paid to shareowners
|
(8,355
|
)
|
(8,474
|
)
|
(9,289
|
)
|
|
(4,311
|
)
|
(20,427
|
)
|
(4,620
|
)
|
||||||
All other financing activities
|
(528
|
)
|
(273
|
)
|
203
|
|
|
(280
|
)
|
(1,127
|
)
|
(1,362
|
)
|
||||||
Cash from (used for) financing activities – continuing operations
|
4,530
|
|
(27,430
|
)
|
(8,211
|
)
|
|
(23,619
|
)
|
(80,320
|
)
|
(65,273
|
)
|
||||||
Cash from (used for) financing activities – discontinued operations
|
—
|
|
—
|
|
—
|
|
|
1,909
|
|
789
|
|
(6,507
|
)
|
||||||
Cash from (used for) financing activities
|
4,530
|
|
(27,430
|
)
|
(8,211
|
)
|
|
(21,710
|
)
|
(79,531
|
)
|
(71,780
|
)
|
||||||
Effect of currency exchange rate changes on cash and equivalents
|
444
|
|
(392
|
)
|
(908
|
)
|
|
447
|
|
(754
|
)
|
(2,556
|
)
|
||||||
Increase (decrease) in cash and equivalents
|
7,686
|
|
153
|
|
(5,544
|
)
|
|
(13,193
|
)
|
(41,473
|
)
|
5,406
|
|
||||||
Cash and equivalents at beginning of year
|
10,525
|
|
10,372
|
|
15,916
|
|
|
39,033
|
|
80,506
|
|
75,100
|
|
||||||
Cash and equivalents at end of year
|
18,211
|
|
10,525
|
|
10,372
|
|
|
25,840
|
|
39,033
|
|
80,506
|
|
||||||
Less cash and equivalents of discontinued operations at end of year
|
—
|
|
—
|
|
—
|
|
|
752
|
|
1,429
|
|
20,395
|
|
||||||
Cash and equivalents of continuing operations at end of year
|
$
|
18,211
|
|
$
|
10,525
|
|
$
|
10,372
|
|
|
$
|
25,088
|
|
$
|
37,604
|
|
$
|
60,111
|
|
Supplemental disclosure of cash flows information
|
|
|
|
|
|
|
|
||||||||||||
Cash paid during the year for interest
|
$
|
(2,256
|
)
|
$
|
(1,753
|
)
|
$
|
(1,327
|
)
|
|
$
|
(2,793
|
)
|
$
|
(4,982
|
)
|
$
|
(8,047
|
)
|
Cash recovered (paid) during the year for income taxes
|
(2,700
|
)
|
(2,612
|
)
|
(1,636
|
)
|
|
264
|
|
(4,857
|
)
|
(850
|
)
|
(a)
|
Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis.
|
(b)
|
Represents GE Capital earnings/loss from continuing operations attributable to the Company, net of GE Capital dividends paid to GE.
|
FINANCIAL STATEMENTS
|
PRESENTATION & POLICIES
|
FINANCIAL STATEMENTS
|
PRESENTATION & POLICIES
|
FINANCIAL STATEMENTS
|
PRESENTATION & POLICIES
|
FINANCIAL STATEMENTS
|
PRESENTATION & POLICIES
|
FINANCIAL STATEMENTS
|
PRESENTATION & POLICIES
|
FINANCIAL STATEMENTS
|
PRESENTATION & POLICIES
|
Level 1 –
|
Quoted prices for identical instruments in active markets.
|
Level 2 –
|
Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
|
Level 3 –
|
Significant inputs to the valuation model are unobservable.
|
FINANCIAL STATEMENTS
|
PRESENTATION & POLICIES
|
FINANCIAL STATEMENTS
|
PRESENTATION & POLICIES
|
FINANCIAL STATEMENTS
|
HELD FOR SALE & DISCONTINUED OPERATIONS
|
FINANCIAL INFORMATION FOR ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE
|
||||||
|
|
|
||||
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
|
|||
Assets
|
|
|
|
|||
Current receivables(a)
|
$
|
703
|
|
$
|
366
|
|
Inventories
|
1,039
|
|
211
|
|
||
Property, plant, and equipment – net
|
931
|
|
632
|
|
||
Goodwill
|
1,619
|
|
212
|
|
||
Other intangible assets – net
|
403
|
|
123
|
|
||
Contract assets
|
858
|
|
125
|
|
||
Valuation allowance on disposal group classified as held for sale(b)
|
(1,378
|
)
|
—
|
|
||
Other
|
67
|
|
76
|
|
||
Assets of businesses held for sale
|
$
|
4,243
|
|
$
|
1,745
|
|
|
|
|
||||
Liabilities
|
|
|
||||
Accounts payable
|
$
|
602
|
|
$
|
190
|
|
Progress collections and price adjustments accrued
|
38
|
|
141
|
|
||
Other current liabilities
|
450
|
|
133
|
|
||
Non-current compensation and benefits
|
162
|
|
82
|
|
||
Other
|
87
|
|
110
|
|
||
Liabilities of businesses held for sale
|
$
|
1,339
|
|
$
|
656
|
|
(a)
|
Included transactions in our industrial businesses that were made on arm's length terms with GE Capital, including GE current receivables sold to GE Capital of $
366
million and $
117
million at
December 31, 2017
and
December 31, 2016
, respectively. These intercompany balances included within our held for sale businesses are reported in the GE and GE Capital columns of our financial statements, but are eliminated in deriving our consolidated financial statements.
|
(b)
|
During the fourth quarter of 2017, we adjusted the carrying value to fair value less cost to sell for certain held for sale businesses, which resulted in a pre-tax valuation allowance of
$1,378 million
recorded in the caption “Other income” in our consolidated Statement of Earnings (Loss).
|
FINANCIAL STATEMENTS
|
HELD FOR SALE & DISCONTINUED OPERATIONS
|
FINANCIAL INFORMATION FOR DISCONTINUED OPERATIONS
|
|||||||||
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Operations
|
|
|
|
||||||
Total revenues and other income (loss)
|
$
|
182
|
|
$
|
2,968
|
|
$
|
23,003
|
|
|
|
|
|
||||||
Earnings (loss) from discontinued operations before income taxes
|
$
|
(731
|
)
|
$
|
(162
|
)
|
$
|
887
|
|
Benefit (provision) for income taxes(a)
|
295
|
|
460
|
|
(791
|
)
|
|||
Earnings (loss) from discontinued operations, net of taxes
|
$
|
(437
|
)
|
$
|
298
|
|
$
|
96
|
|
|
|
|
|
||||||
Disposals
|
|
|
|
||||||
Gain (loss) on disposals before income taxes
|
$
|
306
|
|
$
|
(750
|
)
|
$
|
(6,612
|
)
|
Benefit (provision) for income taxes(a)
|
(178
|
)
|
(502
|
)
|
(979
|
)
|
|||
Gain (loss) on disposals, net of taxes
|
$
|
128
|
|
$
|
(1,252
|
)
|
$
|
(7,591
|
)
|
|
|
|
|
||||||
Earnings (loss) from discontinued operations, net of taxes(b)(c)
|
$
|
(309
|
)
|
$
|
(954
|
)
|
$
|
(7,495
|
)
|
(a)
|
GE Capital’s total tax benefit (provision) for discontinued operations and disposals included current tax benefit (provision) of
$(299) million
,
$945 million
and
$(6,834) million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively, including current U.S. Federal tax benefit (provision) of
$(402) million
,
$1,224 million
and
$(6,245) million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively, and deferred tax benefit (provision) of
$416 million
,
$(988) million
and
$5,073 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
(b)
|
The sum of GE industrial earnings (loss) from discontinued operations, net of taxes, and GE Capital earnings (loss) from discontinued operations, net of taxes, after adjusting for earnings (loss) attributable to noncontrolling interests related to discontinued operations, is reported within GE industrial earnings (loss) from discontinued operations, net of taxes, on the consolidated Statement of Earnings (Loss).
|
(c)
|
Earnings (loss) from discontinued operations attributable to the Company before income taxes was
$(432) million
,
$(911) million
, and
$(6,083) million
for the years ended
December 31, 2017
,
2016
, and
2015
, respectively.
|
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Assets
|
|
|
||||
Cash and equivalents
|
$
|
752
|
|
$
|
1,429
|
|
Investment securities
|
647
|
|
2,626
|
|
||
Deferred income taxes
|
951
|
|
487
|
|
||
Financing receivables held for sale
|
3,215
|
|
8,547
|
|
||
Other assets
|
347
|
|
1,727
|
|
||
Assets of discontinued operations
|
$
|
5,912
|
|
$
|
14,815
|
|
|
|
|
||||
Liabilities
|
|
|
||||
Accounts payable
|
$
|
51
|
|
$
|
164
|
|
Borrowings
|
1
|
|
2,076
|
|
||
Other liabilities
|
654
|
|
1,918
|
|
||
Liabilities of discontinued operations
|
$
|
706
|
|
$
|
4,158
|
|
FINANCIAL STATEMENTS
|
INVESTMENT SECURITIES
|
|
2017
|
|
2016
|
||||||||||||||||||||||
December 31 (In millions)
|
Amortized
cost |
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Estimated
fair value (a) |
|
|
Amortized
cost |
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Estimated
fair value (a) |
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. corporate
|
$
|
20,104
|
|
$
|
3,775
|
|
$
|
(35
|
)
|
$
|
23,843
|
|
|
$
|
20,049
|
|
$
|
3,081
|
|
$
|
(85
|
)
|
$
|
23,046
|
|
Non-U.S. corporate
|
5,455
|
|
86
|
|
(13
|
)
|
5,528
|
|
|
11,917
|
|
98
|
|
(27
|
)
|
11,987
|
|
||||||||
State and municipal
|
3,775
|
|
534
|
|
(40
|
)
|
4,269
|
|
|
3,916
|
|
412
|
|
(92
|
)
|
4,236
|
|
||||||||
Mortgage and asset-backed
|
2,820
|
|
81
|
|
(23
|
)
|
2,878
|
|
|
2,787
|
|
111
|
|
(37
|
)
|
2,861
|
|
||||||||
Government and agencies
|
1,927
|
|
75
|
|
(2
|
)
|
2,000
|
|
|
1,842
|
|
160
|
|
(26
|
)
|
1,976
|
|
||||||||
Equity (b)
|
166
|
|
12
|
|
—
|
|
178
|
|
|
154
|
|
55
|
|
(1
|
)
|
208
|
|
||||||||
Total
|
$
|
34,246
|
|
$
|
4,564
|
|
$
|
(114
|
)
|
$
|
38,696
|
|
|
$
|
40,665
|
|
$
|
3,917
|
|
$
|
(269
|
)
|
$
|
44,313
|
|
(a)
|
Included
$569
million and
$137
million of investment securities held by GE at
December 31, 2017
and December 31, 2016, respectively, of which
$141
million and
$86
million are equity securities.
|
(b)
|
Estimated fair values included
$98 million
and
$17 million
of trading securities at
December 31, 2017
and December 31, 2016, respectively. Net unrealized gains (losses) recorded to earnings related to these securities were
$29 million
and
$(2) million
for the
years ended
December 31, 2017
and 2016, respectively.
|
ESTIMATED FAIR VALUE AND GROSS UNREALIZED LOSSES OF AVAILABLE-FOR-SALE INVESTMENT SECURITIES
|
|||||||||||||
|
|
|
|
|
|
||||||||
|
In loss position for
|
||||||||||||
|
Less than 12 months
|
|
12 months or more
|
||||||||||
(In millions)
|
Estimated
fair value
|
|
Gross
unrealized
losses
|
|
|
Estimated
fair value
|
|
Gross
unrealized
losses
|
|
||||
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
||||||||
Debt
|
|
|
|
|
|
||||||||
U.S. corporate
|
$
|
502
|
|
$
|
(6
|
)
|
|
$
|
605
|
|
$
|
(30
|
)
|
Non-U.S. corporate
|
1,169
|
|
(4
|
)
|
|
3,685
|
|
(10
|
)
|
||||
State and municipal
|
48
|
|
(1
|
)
|
|
272
|
|
(39
|
)
|
||||
Mortgage and asset-backed
|
979
|
|
(11
|
)
|
|
318
|
|
(12
|
)
|
||||
Government and agencies
|
395
|
|
(2
|
)
|
|
69
|
|
—
|
|
||||
Equity
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Total
|
$
|
3,093
|
|
$
|
(23
|
)
|
|
$
|
4,949
|
|
$
|
(91
|
)
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
||||||||
Debt
|
|
|
|
|
|
||||||||
U.S. corporate
|
$
|
1,692
|
|
$
|
(55
|
)
|
|
$
|
359
|
|
$
|
(30
|
)
|
Non-U.S. corporate
|
5,352
|
|
(26
|
)
|
|
14
|
|
(1
|
)
|
||||
State and municipal
|
674
|
|
(27
|
)
|
|
158
|
|
(64
|
)
|
||||
Mortgage and asset-backed
|
822
|
|
(21
|
)
|
|
132
|
|
(16
|
)
|
||||
Government and agencies
|
549
|
|
(26
|
)
|
|
—
|
|
—
|
|
||||
Equity
|
9
|
|
(1
|
)
|
|
—
|
|
—
|
|
||||
Total
|
$
|
9,098
|
|
$
|
(157
|
)
|
|
$
|
663
|
|
$
|
(111
|
)
|
FINANCIAL STATEMENTS
|
INVESTMENT SECURITIES
|
CONTRACTUAL MATURITIES OF INVESTMENT IN AVAILABLE-FOR-SALE DEBT SECURITIES
|
||||||
(EXCLUDING MORTGAGE AND ASSET-BACKED SECURITIES)
|
||||||
|
|
|
||||
|
|
|
||||
(In millions)
|
Amortized
cost
|
|
Estimated
fair value
|
|
||
|
|
|
||||
Due
|
|
|
||||
Within one year
|
$
|
5,647
|
|
$
|
5,648
|
|
After one year through five years
|
3,297
|
|
3,454
|
|
||
After five years through ten years
|
5,611
|
|
6,156
|
|
||
After ten years
|
16,792
|
|
20,483
|
|
|
Consolidated(a)(b)
|
|
GE(c)(d)
|
||||||||||
December 31 (In millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
Power
|
$
|
9,735
|
|
$
|
10,055
|
|
|
$
|
4,664
|
|
$
|
5,134
|
|
Renewable Energy
|
1,666
|
|
1,903
|
|
|
940
|
|
1,293
|
|
||||
Oil & Gas
|
5,952
|
|
4,259
|
|
|
5,830
|
|
2,478
|
|
||||
Aviation
|
3,738
|
|
3,542
|
|
|
1,875
|
|
1,731
|
|
||||
Healthcare
|
3,725
|
|
3,996
|
|
|
2,052
|
|
2,068
|
|
||||
Transportation
|
287
|
|
377
|
|
|
183
|
|
186
|
|
||||
Lighting
|
105
|
|
349
|
|
|
36
|
|
173
|
|
||||
Corporate and eliminations
|
304
|
|
454
|
|
|
342
|
|
499
|
|
||||
|
25,511
|
|
24,935
|
|
|
15,922
|
|
13,562
|
|
||||
Less Allowance for losses
|
(1,073
|
)
|
(858
|
)
|
|
(1,055
|
)
|
(847
|
)
|
||||
Total
|
$
|
24,438
|
|
$
|
24,076
|
|
|
$
|
14,867
|
|
$
|
12,715
|
|
(a)
|
Included GE industrial customer receivables sold to a GE Capital affiliate and recorded on GE Capital's balance sheet of
$10,370 million
and
$12,304 million
at
December 31, 2017
and
2016
, respectively. The consolidated total included a deferred purchase price receivable of
$388 million
and
$483 million
at
December 31, 2017
and
2016
, respectively, related to our Receivables Facility.
|
(b)
|
In order to manage short-term liquidity and credit exposure, the Company sells additional current receivables to third parties outside the Receivables Facility, substantially all of which are serviced by the Company. The outstanding balance of these current receivables was
$2,541 million
and
$3,821 million
at
December 31, 2017
and
2016
, respectively. Of these balances,
$1,621 million
and
$2,504 million
was sold by GE to GE Capital prior to the sale to third parties at December 31, 2017 and 2016, respectively. At
December 31, 2017
and
2016
, our maximum exposure to loss under the limited recourse arrangements is
$90 million
and
$215 million
, respectively.
|
(c)
|
GE current receivables of
$312 million
and
$299 million
at
December 31, 2017
and
2016
, respectively, arose from sales, principally of Aviation goods and services, on open account to various agencies of the U.S. government. As a percentage of GE revenues, approximately
4%
of GE sales of goods and services were to the U.S. government in
2017
, compared with
3%
in
2016
and
4%
in
2015
.
|
(d)
|
GE current receivables balances at
December 31, 2017
and
2016
, before allowance for losses, included
$10,671 million
and
$8,927 million
, respectively, from sales of goods and services to customers. The remainder of the balances primarily relates to supplier advances, revenue sharing programs and other non-income based tax receivables.
|
FINANCIAL STATEMENTS
|
CURRENT RECEIVABLES & INVENTORIES
|
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Raw materials and work in process
|
$
|
11,757
|
|
$
|
12,636
|
|
Finished goods
|
9,169
|
|
8,798
|
|
||
Unbilled shipments
|
481
|
|
536
|
|
||
|
21,407
|
|
21,971
|
|
||
Revaluation to LIFO
|
516
|
|
383
|
|
||
Total inventories
|
$
|
21,923
|
|
$
|
22,354
|
|
FINANCING RECEIVABLES – NET
|
|
|
||||
|
|
|
||||
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Loans, net of deferred income
|
$
|
17,404
|
|
$
|
21,101
|
|
Investment in financing leases, net of deferred income
|
4,614
|
|
4,998
|
|
||
|
22,018
|
|
26,099
|
|
||
Allowance for losses(a)
|
(51
|
)
|
(58
|
)
|
||
Financing receivables – net
|
$
|
21,967
|
|
$
|
26,041
|
|
FINANCIAL STATEMENTS
|
FINANCING RECEIVABLES
|
NET INVESTMENT IN FINANCING LEASES
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total financing leases
|
|
Direct financing leases(a)
|
|
Leveraged leases(b)
|
|||||||||||||||
December 31 (In millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Total minimum lease payments receivable
|
$
|
4,637
|
|
$
|
5,466
|
|
|
$
|
2,952
|
|
$
|
3,274
|
|
|
$
|
1,685
|
|
$
|
2,191
|
|
Less principal and interest on third-party non-recourse debt
|
(638
|
)
|
(1,053
|
)
|
|
—
|
|
—
|
|
|
(638
|
)
|
(1,053
|
)
|
||||||
Net rentals receivable
|
3,999
|
|
4,412
|
|
|
2,952
|
|
3,274
|
|
|
1,047
|
|
1,138
|
|
||||||
Estimated unguaranteed residual value of leased assets
|
1,590
|
|
1,985
|
|
|
743
|
|
927
|
|
|
847
|
|
1,058
|
|
||||||
Less deferred income
|
(975
|
)
|
(1,400
|
)
|
|
(614
|
)
|
(909
|
)
|
|
(361
|
)
|
(491
|
)
|
||||||
Investment in financing leases, net of deferred income(c)
|
$
|
4,614
|
|
$
|
4,998
|
|
|
$
|
3,081
|
|
$
|
3,292
|
|
|
$
|
1,533
|
|
$
|
1,706
|
|
(a)
|
Included
$22 million
and
$30 million
of initial direct costs on direct financing leases at
December 31, 2017
and
2016
, respectively.
|
(b)
|
Included pre-tax income of
$78 million
and
$74 million
and income tax of
$30 million
and
$28 million
during
2017
and
2016
, respectively. Net investment credits recognized on leveraged leases during
2017
and
2016
were insignificant.
|
(c)
|
See Note 13 for deferred tax amounts related to financing leases.
|
CONTRACTUAL MATURITIES
|
|
|
||||
|
|
|
||||
(In millions)
|
Total
loans |
|
Net rentals
receivable |
|
||
|
|
|
||||
Due in
|
|
|
||||
2018
|
$
|
10,366
|
|
$
|
932
|
|
2019
|
2,987
|
|
805
|
|
||
2020
|
1,364
|
|
637
|
|
||
2021
|
1,158
|
|
503
|
|
||
2022
|
570
|
|
327
|
|
||
2023 and later
|
959
|
|
795
|
|
||
Total
|
$
|
17,404
|
|
$
|
3,999
|
|
FINANCIAL STATEMENTS
|
PROPERTY, PLANT AND EQUIPMENT
|
|
Depreciable
|
|
|
|
|
|
|
||||||||||
|
lives-new
|
|
Original Cost
|
|
Net Carrying Value
|
||||||||||||
December 31 (Dollars in millions)
|
(in years)
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||
GE
|
|
|
|
|
|
|
|
||||||||||
Land and improvements
|
8
|
(a)
|
$
|
1,175
|
|
$
|
932
|
|
|
$
|
1,154
|
|
$
|
915
|
|
||
Buildings, structures and related equipment
|
8-40
|
|
11,486
|
|
9,699
|
|
|
6,913
|
|
5,180
|
|
||||||
Machinery and equipment
|
4-20
|
|
26,702
|
|
24,599
|
|
|
12,734
|
|
10,181
|
|
||||||
Leasehold costs and manufacturing plant under construction
|
1-10
|
|
3,862
|
|
3,407
|
|
|
3,162
|
|
2,827
|
|
||||||
|
|
|
$
|
43,225
|
|
$
|
38,637
|
|
|
$
|
23,963
|
|
$
|
19,103
|
|
||
|
|
|
|
|
|
|
|
||||||||||
GE Capital(b)
|
|
|
|
|
|
|
|
||||||||||
Land and improvements, buildings, structures and related equipment
|
1-39
|
(a)
|
$
|
171
|
|
$
|
238
|
|
|
$
|
45
|
|
$
|
68
|
|
||
Equipment leased to others
|
|
|
|
|
|
|
|
||||||||||
Aircraft(c)
|
15-20
|
|
46,296
|
|
47,360
|
|
|
30,067
|
|
31,786
|
|
||||||
All other
|
4-35
|
|
718
|
|
587
|
|
|
483
|
|
371
|
|
||||||
|
|
|
47,185
|
|
48,185
|
|
|
30,595
|
|
32,225
|
|
||||||
Eliminations
|
|
|
(802
|
)
|
(925
|
)
|
|
(684
|
)
|
(809
|
)
|
||||||
Total
|
|
|
$
|
89,608
|
|
$
|
85,897
|
|
$
|
0
|
|
$
|
53,874
|
|
$
|
50,518
|
|
(a)
|
Depreciable lives exclude land.
|
(b)
|
Included
$1,414 million
and
$1,457 million
of original cost of assets leased to GE with accumulated amortization of
$193 million
and
$147 million
at
December 31, 2017
and
2016
, respectively.
|
(c)
|
The GECAS business of GE Capital
recognized impairment losses of
$145 million
and
$99 million
in
2017
and
2016
, respectively. These losses are recorded in the caption “Cost of services sold” in the Statement of Earnings (Loss) to reflect adjustments to fair value based on management’s best estimates, which are benchmarked against third-party appraiser current market values for aircraft of similar type and age.
|
FINANCIAL STATEMENTS
|
ACQUISITIONS & INTANGIBLE ASSETS
|
|
PURCHASE PRICE
|
|
||
(In millions)
|
July 3, 2017
|
|
|
|
|
||
Cash consideration
|
$
|
7,498
|
|
Fair value of the Class A Shares in BHGE issued to Baker Hughes shareholders
|
17,300
|
|
|
Total consideration for Baker Hughes
|
$
|
24,798
|
|
FINANCIAL STATEMENTS
|
ACQUISITIONS & INTANGIBLE ASSETS
|
|
PRELIMINARY IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED
|
|
||
(In millions)
|
July 3, 2017
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
4,133
|
|
Accounts receivable
|
2,383
|
|
|
Inventories
|
1,695
|
|
|
Property, plant, and equipment - net
|
4,868
|
|
|
Other intangible assets - net
|
4,123
|
|
|
All other assets
|
1,544
|
|
|
Accounts payable
|
(1,106
|
)
|
|
Borrowings
|
(3,370
|
)
|
|
Deferred taxes(a)
|
(464
|
)
|
|
All other liabilities
|
(2,288
|
)
|
|
Total identifiable net assets
|
11,518
|
|
|
Fair value of existing noncontrolling interest
|
(76
|
)
|
|
Goodwill
|
13,356
|
|
|
Total allocated purchase price
|
$
|
24,798
|
|
(a)
|
Includes an increase of approximately $
$1,051 million
primarily related to fair value adjustments to identifiable assets and liabilities (excluding goodwill)
partially offset by a tax asset of approximately
$572 million
associated with the recognition of foreign tax credits.
|
(In millions)
|
Estimated fair value
|
|
Estimated useful life (in years)
|
|
Trademarks - Baker Hughes
|
$
|
2,100
|
|
Indefinite life
|
Customer-related
|
1,260
|
|
15
|
|
Patents and technology
|
550
|
|
10
|
|
Trademarks - Other
|
70
|
|
10
|
|
Capitalized software
|
90
|
|
3-7
|
|
In-process research and development
|
45
|
|
Indefinite life
|
|
Favorable lease contracts
|
8
|
|
10
|
|
Total
|
$
|
4,123
|
|
|
FINANCIAL STATEMENTS
|
ACQUISITIONS & INTANGIBLE ASSETS
|
|
(In millions)
|
2017
|
|
2016
|
|
||
Revenues and other income
|
$
|
126,755
|
|
$
|
133,526
|
|
Earnings (loss) from continuing operations
|
(5,817
|
)
|
6,379
|
|
CHANGES IN GOODWILL BALANCES
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||||
(In millions)
|
Balance at
January 1
|
|
Acquisitions
|
|
Dispositions,
currency exchange and other |
|
Balance at
December 31
|
|
|
Balance at
January 1
|
|
Acquisitions
|
|
Dispositions,
currency exchange and other |
|
Balance at
December 31
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Power
|
$
|
26,403
|
|
$
|
37
|
|
$
|
(1,171
|
)
|
$
|
25,269
|
|
|
$
|
22,963
|
|
$
|
4,131
|
|
$
|
(692
|
)
|
$
|
26,403
|
|
Renewable Energy
|
2,507
|
|
1,503
|
|
83
|
|
4,093
|
|
|
2,580
|
|
(46
|
)
|
(27
|
)
|
2,507
|
|
||||||||
Oil & Gas
|
10,363
|
|
13,364
|
|
216
|
|
23,943
|
|
|
10,594
|
|
—
|
|
(231
|
)
|
10,363
|
|
||||||||
Aviation
|
9,455
|
|
25
|
|
529
|
|
10,008
|
|
|
8,567
|
|
1,045
|
|
(158
|
)
|
9,455
|
|
||||||||
Healthcare
|
17,424
|
|
60
|
|
(178
|
)
|
17,306
|
|
|
17,353
|
|
191
|
|
(120
|
)
|
17,424
|
|
||||||||
Transportation
|
899
|
|
—
|
|
3
|
|
902
|
|
|
851
|
|
41
|
|
6
|
|
899
|
|
||||||||
Lighting
|
281
|
|
—
|
|
(281
|
)
|
—
|
|
|
214
|
|
63
|
|
5
|
|
281
|
|
||||||||
Capital
|
2,368
|
|
—
|
|
(1,384
|
)
|
984
|
|
|
2,370
|
|
—
|
|
(1
|
)
|
2,368
|
|
||||||||
Corporate
|
739
|
|
727
|
|
(3
|
)
|
1,463
|
|
|
34
|
|
487
|
|
218
|
|
739
|
|
||||||||
Total
|
$
|
70,438
|
|
$
|
15,716
|
|
$
|
(2,186
|
)
|
$
|
83,968
|
|
|
$
|
65,526
|
|
$
|
5,911
|
|
$
|
(1,000
|
)
|
$
|
70,438
|
|
FINANCIAL STATEMENTS
|
ACQUISITIONS & INTANGIBLE ASSETS
|
|
FINANCIAL STATEMENTS
|
ACQUISITIONS & INTANGIBLE ASSETS
|
|
OTHER INTANGIBLE ASSETS - NET
|
||||||
|
|
|
||||
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Intangible assets subject to amortization
|
$
|
18,056
|
|
$
|
16,336
|
|
Indefinite-lived intangible assets(a)
|
2,217
|
|
100
|
|
||
Total
|
$
|
20,273
|
|
$
|
16,436
|
|
(a)
|
Indefinite-lived intangible assets principally comprise trademarks and in-process research and development.
|
INTANGIBLE ASSETS SUBJECT TO AMORTIZATION
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
2017
|
|
2016
|
||||||||||||||||
December 31 (In millions)
|
Gross
carrying amount |
|
Accumulated
amortization |
|
Net
|
|
|
Gross
carrying amount |
|
Accumulated
amortization |
|
Net
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Customer-related
|
$
|
10,614
|
|
$
|
(3,095
|
)
|
$
|
7,521
|
|
|
$
|
9,172
|
|
$
|
(2,408
|
)
|
$
|
6,764
|
|
Patents and technology
|
10,271
|
|
(3,899
|
)
|
6,372
|
|
|
8,695
|
|
(3,327
|
)
|
5,368
|
|
||||||
Capitalized software
|
8,064
|
|
(4,974
|
)
|
3,089
|
|
|
7,652
|
|
(4,538
|
)
|
3,114
|
|
||||||
Trademarks
|
1,280
|
|
(421
|
)
|
859
|
|
|
1,165
|
|
(307
|
)
|
859
|
|
||||||
Lease valuations
|
170
|
|
(80
|
)
|
89
|
|
|
143
|
|
(59
|
)
|
84
|
|
||||||
Present value of future profits(a)
|
—
|
|
—
|
|
—
|
|
|
684
|
|
(684
|
)
|
—
|
|
||||||
All other
|
218
|
|
(92
|
)
|
125
|
|
|
273
|
|
(124
|
)
|
149
|
|
||||||
Total
|
$
|
30,618
|
|
$
|
(12,561
|
)
|
$
|
18,056
|
|
|
$
|
27,783
|
|
$
|
(11,446
|
)
|
$
|
16,336
|
|
(a)
|
See Note 11 for discussion on the present value of future profits in our run-off insurance operations.
|
FINANCIAL STATEMENTS
|
ACQUISITIONS & INTANGIBLE ASSETS
|
|
ESTIMATED 5 YEAR CONSOLIDATED AMORTIZATION
|
|||||||||||||||
|
|
|
|
|
|
||||||||||
(In millions)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
|||||
|
|
|
|
|
|
||||||||||
Estimated annual pre-tax amortization
|
$
|
2,274
|
|
$
|
2,148
|
|
$
|
2,039
|
|
$
|
1,878
|
|
$
|
1,713
|
|
COMPONENTS OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED DURING 2017
|
||||
|
|
|
||
(In millions)
|
Gross
carrying value |
|
Weighted-average
amortizable period (in years) |
|
|
|
|
||
Customer-related
|
$
|
1,451
|
|
14.9
|
Patents and technology
|
1,214
|
|
10.7
|
|
Capitalized software
|
982
|
|
5.4
|
|
Trademarks
|
91
|
|
8.6
|
|
Lease valuations
|
8
|
|
10.0
|
|
All other
|
19
|
|
8.6
|
FINANCIAL STATEMENTS
|
CONTRACT ASSETS
|
December 31, 2017 (In millions)
|
Power
|
Aviation
|
Oil & Gas
|
Renewable Energy
|
Transportation
|
Other(a)
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||
GE
|
|
|
|
|
|
|
|
||||||||||||||
Revenue in excess of billings
|
|
|
|
|
|
|
|
||||||||||||||
Long-term product service agreements(b)(f)
|
$
|
7,439
|
|
$
|
5,265
|
|
$
|
1,266
|
|
$
|
1
|
|
$
|
1,186
|
|
$
|
—
|
|
$
|
15,157
|
|
Long-term equipment contract revenue(c)
|
3,777
|
|
1,833
|
|
997
|
|
254
|
|
69
|
|
25
|
|
6,954
|
|
|||||||
Total revenue in excess of billings
|
11,215
|
|
7,098
|
|
2,263
|
|
255
|
|
1,254
|
|
25
|
|
22,111
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Deferred inventory costs(d)
|
1,565
|
|
528
|
|
338
|
|
1,042
|
|
46
|
|
319
|
|
3,839
|
|
|||||||
Nonrecurring engineering costs(e)
|
7
|
|
1,720
|
|
—
|
|
—
|
|
87
|
|
—
|
|
1,814
|
|
|||||||
Customer advances and other
|
—
|
|
1,098
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,097
|
|
|||||||
Contract assets
|
$
|
12,786
|
|
$
|
10,445
|
|
$
|
2,602
|
|
$
|
1,297
|
|
$
|
1,388
|
|
$
|
344
|
|
$
|
28,861
|
|
December 31, 2016 (In millions)
|
Power
|
Aviation
|
Oil & Gas
|
Renewable Energy
|
Transportation
|
Other(a)
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||
GE
|
|
|
|
|
|
|
|
||||||||||||||
Revenue in excess of billings
|
|
|
|
|
|
|
|
||||||||||||||
Long-term product service agreements(b)
|
$
|
6,595
|
|
$
|
4,861
|
|
$
|
508
|
|
$
|
1
|
|
$
|
787
|
|
$
|
—
|
|
$
|
12,752
|
|
Long-term equipment contract revenue(c)
|
3,062
|
|
1,673
|
|
709
|
|
315
|
|
55
|
|
45
|
|
5,859
|
|
|||||||
Total revenue in excess of billings
|
9,657
|
|
6,534
|
|
1,217
|
|
316
|
|
843
|
|
45
|
|
18,611
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Deferred inventory costs(d)
|
1,168
|
|
650
|
|
217
|
|
923
|
|
40
|
|
350
|
|
3,349
|
|
|||||||
Nonrecurring engineering costs(e)
|
18
|
|
2,083
|
|
—
|
|
—
|
|
85
|
|
—
|
|
2,185
|
|
|||||||
Customer advances and other
|
10
|
|
993
|
|
—
|
|
—
|
|
1
|
|
13
|
|
1,018
|
|
|||||||
Contract assets
|
$
|
10,852
|
|
$
|
10,261
|
|
$
|
1,433
|
|
$
|
1,239
|
|
$
|
969
|
|
$
|
408
|
|
$
|
25,162
|
|
(a)
|
Primarily includes our Healthcare segment
|
(b)
|
Long-term product service agreement balances are presented net of related billings in excess of revenues of
$3,037 million
and
$3,750 million
at
December 31, 2017
and
2016
, respectively.
|
(c)
|
Reflects revenues earned in excess of billings on our long-term contracts to construct technically complex equipment (such as gas power systems or commercial aircraft engines).
|
(d)
|
Represents cost deferral for shipped goods (such as components for wind turbine assembly within our Renewable Energy segment) and labor and overhead costs on time and material service contracts (primarily originating in Power and Aviation) and other costs for which the criteria for revenue recognition has not yet been met.
|
(e)
|
Includes costs incurred prior to production (e.g., requisition engineering) for long-term equipment production contracts, primarily within our Aviation segment, which are allocated ratably to each unit produced.
|
(f)
|
The assets of legacy GE Oil & Gas were contributed to BHGE upon formation. The contributed assets included certain small-scale liquefied natural gas (LNG) contracts that were historically reported in our Power segment; therefore, on January 1, 2017,
$236 million
was transferred to Oil & Gas and additional
$239 million
was transferred to Oil & Gas on July 3, 2017 at the completion of the transaction.
|
FINANCIAL STATEMENTS
|
BORROWINGS
|
|
December 31 (Dollars in millions)
|
|
2017
|
|
|
2016
|
|
|
||||
|
|
|
|
|
|
||||||
Short-term borrowings
|
|
Amount
|
|
Average Rate(a)
|
|
Amount
|
|
Average Rate(a)
|
|
||
GE
|
|
|
|
|
|
||||||
Commercial paper
|
|
$
|
3,000
|
|
1.35
|
%
|
$
|
1,500
|
|
0.60
|
%
|
Current portion of long-term borrowings(e)
|
|
9,452
|
|
3.01
|
|
17,109
|
|
3.16
|
|
||
Other
|
|
2,095
|
|
|
1,874
|
|
|
||||
Total GE short-term borrowings(b)
|
|
$
|
14,548
|
|
|
$
|
20,482
|
|
|
||
|
|
|
|
|
|
||||||
GE Capital
|
|
|
|
|
|
||||||
Commercial paper
|
|
$
|
5,013
|
|
1.45
|
|
$
|
5,002
|
|
0.59
|
|
Current portion of long-term borrowings(c)
|
|
5,781
|
|
1.26
|
|
6,517
|
|
1.64
|
|
||
Intercompany payable to GE(d)
|
|
8,310
|
|
|
11,696
|
|
|
||||
Other
|
|
497
|
|
|
229
|
|
|
||||
Total GE Capital short-term borrowings
|
|
$
|
19,602
|
|
|
$
|
23,443
|
|
|
||
|
|
|
|
|
|
||||||
Eliminations(d)
|
|
(10,114
|
)
|
|
(13,212
|
)
|
|
||||
Total short-term borrowings
|
|
$
|
24,036
|
|
|
$
|
30,714
|
|
|
||
|
|
|
|
|
|
||||||
Long-term borrowings
|
Maturities
|
Amount
|
|
Average Rate(a)
|
|
Amount
|
|
Average Rate(a)
|
|
||
GE
|
|
|
|
|
|
||||||
Senior notes(e)
|
2019-2055
|
$
|
62,724
|
|
3.15
|
%
|
$
|
54,396
|
|
3.35
|
%
|
Subordinated notes
|
2021-2037
|
2,913
|
|
3.28
|
|
2,768
|
|
3.73
|
|
||
Subordinated debentures(g)
|
|
—
|
|
|
719
|
|
6.12
|
|
|||
Other
|
|
1,403
|
|
|
928
|
|
|
||||
Total GE long-term borrowings(b)
|
|
67,040
|
|
|
58,810
|
|
|
||||
|
|
|
|
|
|
||||||
GE Capital
|
|
|
|
|
|
||||||
Senior notes
|
2019-2039
|
40,754
|
|
3.11
|
|
44,131
|
|
2.45
|
|
||
Subordinated notes
|
|
208
|
|
|
236
|
|
|
||||
Intercompany payable to GE(f)
|
|
31,533
|
|
|
47,084
|
|
|
||||
Other(c)
|
|
1,118
|
|
|
1,992
|
|
|
||||
Total GE Capital long-term borrowings
|
|
73,614
|
|
|
93,443
|
|
|
||||
|
|
|
|
|
|
||||||
Eliminations(f)
|
|
(32,079
|
)
|
|
(47,173
|
)
|
|
||||
Total long-term borrowings
|
|
$
|
108,575
|
|
|
$
|
105,080
|
|
|
||
Non-recourse borrowings of
consolidated securitization entities(h)
|
2018-2021
|
1,980
|
|
2.77
|
%
|
417
|
|
2.23
|
%
|
||
Total borrowings
|
|
$
|
134,591
|
|
|
$
|
136,210
|
|
|
(a)
|
Based on year-end balances and year-end local currency effective interest rates, including the effects from hedging.
|
(b)
|
Excluding assumed debt of GE Capital, the total amount of GE borrowings was
$41,744 million
and
$20,512
million at
December 31, 2017
and
December 31, 2016
, respectively.
|
(c)
|
Included
$1,466 million
and
$2,665 million
of funding secured by aircraft and other collateral at
December 31, 2017
and
December 31, 2016
, respectively, of which
$458 million
and
$1,419 million
is non-recourse to GE Capital at
December 31, 2017
and
December 31, 2016
, respectively.
|
(d)
|
Included a reduction of
zero
and
$1,329 million
of short-term intercompany loans from GE Capital to GE at December 31, 2017 and December 31, 2016, which bear the right of offset against amounts owed under the assumed debt agreement. Excluding intercompany loans, total short-term assumed debt was
$8,310 million
and
$13,024 million
at December 31,2017 and December 31, 2016, respectively. The remaining short-term intercompany loan balance was paid in January 2017.
|
(e)
|
Total borrowings included
$7,225 million
of borrowings issued by BHGE, which primarily included current portion of long-term borrowings and senior notes of
$639 million
and
$6,206 million
, respectively, at December 31, 2017.
|
(f)
|
Included a reduction of
$7,271 million
and
zero
for long-term intercompany loans from GE Capital to GE at December 31, 2017 and December 31, 2016, respectively, which bear the right of offset against amounts owed under the assumed debt agreement. Excluding intercompany loans, total long-term assumed debt was
$38,804 million
and
$47,084 million
at December 31, 2017 and December 31, 2016, respectively. The
$7,271 million
of intercompany loans collectively have a weighted average interest rate of
3.5%
and a term of approximately
15 years
.
|
(g)
|
Comprises subordinated debentures which constitute the sole assets of the trusts that have issued trust preferred securities and where GE owns
100%
of the common securities of the trusts. Obligations associated with these trusts are unconditionally guaranteed by GE.
|
(h)
|
Included
$621 million
and
$320 million
of current portion of long-term borrowings at
December 31, 2017
and
December 31, 2016
, respectively. See Note 19 for further information.
|
FINANCIAL STATEMENTS
|
BORROWINGS
|
|
(In millions)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
|||||
|
|
|
|
|
|
||||||||||
GE excluding assumed debt(a)
|
$
|
1,142
|
|
$
|
127
|
|
$
|
888
|
|
$
|
591
|
|
$
|
6,351
|
|
GE Capital debt assumed by GE
|
8,310
|
|
3,774
|
|
6,208
|
|
4,713
|
|
1,942
|
|
|||||
GE Capital other debt
|
5,781
|
(b)
|
4,462
|
|
11,476
|
|
2,211
|
|
2,338
|
|
(a)
|
Includes maturities of BHGE borrowings of
$738 million
,
$47 million
,
$14 million
,
$538 million
and
$1,255 million
in 2018, 2019, 2020, 2021 and 2022, respectively. Excluding BHGE borrowings, GE maturities will be
$404 million
,
$80 million
,
$875 million
,
$53 million
and
$5,095 million
in 2018, 2019, 2020, 2021 and 2022, respectively.
|
(b)
|
Fixed and floating rate notes of
$447 million
contain put options with exercise dates in 2018, and which have final maturity beyond 2022.
|
FINANCIAL STATEMENTS
|
INVESTMENT CONTRACTS & INSURANCE
|
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Future policy benefit reserves
|
|
|
||||
Long-term care insurance contracts
|
$
|
16,522
|
|
$
|
7,629
|
|
Structured settlement annuities with life contingencies and other contracts
|
9,448
|
|
9,267
|
|
||
Shadow adjustments(a)
|
4,582
|
|
1,845
|
|
||
|
30,552
|
|
18,741
|
|
||
Investment contracts
|
2,569
|
|
2,813
|
|
||
Claim reserves(b)
|
5,094
|
|
4,606
|
|
||
Unearned premiums and other
|
372
|
|
386
|
|
||
|
38,587
|
|
26,546
|
|
||
Eliminations
|
(451
|
)
|
(460
|
)
|
||
Total
|
$
|
38,136
|
|
$
|
26,086
|
|
(a)
|
To the extent that unrealized gains on specific investment securities supporting our insurance contracts would result in a premium deficiency should those gains be realized, an increase in future policy benefit reserves is recorded, with an after-tax reduction of net unrealized gains recognized through Other comprehensive income.
|
(b)
|
Included
$3,590 million
and
$3,129 million
related to long term-care insurance contracts and
$364 million
and
$362 million
related to short-duration contracts, net of eliminations, at
December 31, 2017
and December 31, 2016, respectively.
|
FINANCIAL STATEMENTS
|
INVESTMENT CONTRACTS & INSURANCE
|
FINANCIAL STATEMENTS
|
POSTRETIREMENT BENEFIT PLANS
|
|
•
|
Service cost – the cost of benefits earned by active employees who participate in the plan.
|
•
|
Prior service cost (credit) amortization – the cost of changes to our benefits plans (plan amendments) related to prior service performed.
|
•
|
Expected return on plan assets – the return we expect to earn on plan investments used to pay future benefits.
|
•
|
Interest cost – the accrual of interest on the pension obligations due to the passage of time.
|
•
|
Net actuarial loss (gain) amortization – differences between our estimates, (for example, discount rate, expected return on plan assets) and our actual experience which are initially recorded in equity and amortized into earnings.
|
•
|
Curtailment loss (gain) – earnings effects of amounts previously deferred which have been accelerated because of an event that shortens future service or eliminates benefits (for example, a sale of a business).
|
COST OF PENSION PLANS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Total
|
|
Principal pension plans
|
|
Other pension plans
|
||||||||||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Service cost for benefits earned
|
$
|
1,629
|
|
$
|
1,699
|
|
$
|
1,840
|
|
|
$
|
1,055
|
|
$
|
1,237
|
|
$
|
1,424
|
|
|
$
|
574
|
|
$
|
462
|
|
$
|
416
|
|
Prior service cost (credit) amortization
|
285
|
|
304
|
|
205
|
|
|
290
|
|
303
|
|
205
|
|
|
(5
|
)
|
1
|
|
—
|
|
|||||||||
Expected return on plan assets
|
(4,639
|
)
|
(4,370
|
)
|
(4,183
|
)
|
|
(3,390
|
)
|
(3,336
|
)
|
(3,302
|
)
|
|
(1,249
|
)
|
(1,034
|
)
|
(881
|
)
|
|||||||||
Interest cost on benefit obligations
|
3,462
|
|
3,609
|
|
3,333
|
|
|
2,856
|
|
2,939
|
|
2,778
|
|
|
606
|
|
670
|
|
555
|
|
|||||||||
Net actuarial loss amortization
|
3,241
|
|
2,705
|
|
3,577
|
|
|
2,812
|
|
2,449
|
|
3,288
|
|
|
429
|
|
256
|
|
289
|
|
|||||||||
Curtailment loss (gain)
|
43
|
|
50
|
|
99
|
|
|
64
|
|
31
|
|
105
|
|
|
(21
|
)
|
19
|
|
(6
|
)
|
|||||||||
Pension cost
|
$
|
4,021
|
|
$
|
3,997
|
|
$
|
4,871
|
|
|
$
|
3,687
|
|
$
|
3,623
|
|
$
|
4,498
|
|
|
$
|
334
|
|
$
|
374
|
|
$
|
373
|
|
FINANCIAL STATEMENTS
|
POSTRETIREMENT BENEFIT PLANS
|
|
ASSUMPTIONS USED TO MEASURE PENSION BENEFIT OBLIGATIONS
|
|
|
|
|
|
||||||||
|
Principal pension plans
|
|
Other pension plans (weighted average)
|
||||||||||
December 31
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.64
|
%
|
4.11
|
%
|
4.38
|
%
|
|
2.45
|
%
|
2.58
|
%
|
3.33
|
%
|
Compensation increases
|
3.55
|
|
3.80
|
|
3.80
|
|
|
3.12
|
|
3.48
|
|
3.32
|
|
ASSUMPTIONS USED TO MEASURE PENSION COST
|
|
|
|
|
|
|
|
||||||
|
Principal pension plans
|
|
Other pension plans (weighted average)
|
||||||||||
December 31
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.11
|
%
|
4.38
|
%
|
4.02
|
%
|
|
2.58
|
%
|
3.33
|
%
|
3.53
|
%
|
Expected return on assets
|
7.50
|
|
7.50
|
|
7.50
|
|
|
6.75
|
|
6.36
|
|
6.95
|
|
FUNDED STATUS
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
Principal pension plans
|
|
Other pension plans
|
||||||||||
December 31 (in millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
|
|
|
|
|
|
||||||||
Projected benefit obligations
|
$
|
74,985
|
|
$
|
71,501
|
|
|
$
|
25,303
|
|
$
|
22,543
|
|
Fair value of plan assets
|
50,361
|
|
45,893
|
|
|
21,224
|
|
17,091
|
|
||||
Underfunded
|
$
|
24,624
|
|
$
|
25,608
|
|
|
$
|
4,079
|
|
$
|
5,452
|
|
FINANCIAL STATEMENTS
|
POSTRETIREMENT BENEFIT PLANS
|
|
PROJECTED BENEFIT OBLIGATIONS (PBO)
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Principal pension plans
|
|
Other pension plans
|
|
|||||||||||
(In millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at January 1
|
$
|
71,501
|
|
|
$
|
68,722
|
|
|
$
|
22,543
|
|
$
|
21,618
|
|
|
Service cost for benefits earned
|
1,055
|
|
|
1,237
|
|
|
574
|
|
462
|
|
|
||||
Interest cost on benefit obligations
|
2,856
|
|
|
2,939
|
|
|
606
|
|
670
|
|
|
||||
Participant contributions
|
91
|
|
|
115
|
|
|
42
|
|
43
|
|
|
||||
Plan amendments
|
—
|
|
|
—
|
|
|
—
|
|
(54
|
)
|
|
||||
Actuarial loss (gain)
|
3,300
|
|
(a)
|
1,874
|
|
(b)
|
(181
|
)
|
2,993
|
|
(a)
|
||||
Benefits paid
|
(3,818
|
)
|
|
(3,386
|
)
|
|
(977
|
)
|
(842
|
)
|
|
||||
Acquisitions (dispositions) / other - net
|
—
|
|
|
—
|
|
|
1,321
|
|
(98
|
)
|
|
||||
Exchange rate adjustments
|
—
|
|
|
—
|
|
|
1,375
|
|
(2,249
|
)
|
|
||||
Balance at December 31
|
$
|
74,985
|
|
(c)
|
$
|
71,501
|
|
(c)
|
25,303
|
|
22,543
|
|
|
(a)
|
Principally associated with discount rate changes.
|
(b)
|
Principally associated with discount rate and mortality assumption changes.
|
(c)
|
The PBO for the GE Supplementary Pension Plan, which is an unfunded plan, was
$6,682 million
and
$6,531 million
at year-end
2017
and
2016
, respectively.
|
|
Principal pension plans
|
|
Other pension plans
|
||||||||||
December 31 (in millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
|
|
|
|
|
|
||||||||
Global equity
|
$
|
9,192
|
|
$
|
15,504
|
|
|
$
|
6,323
|
|
$
|
5,746
|
|
Debt securities
|
|
|
|
|
|
||||||||
Fixed income and cash investment funds
|
1,200
|
|
1,062
|
|
|
6,242
|
|
5,281
|
|
||||
U.S. corporate(a)
|
6,597
|
|
5,252
|
|
|
393
|
|
319
|
|
||||
Other debt securities(b)
|
5,225
|
|
5,066
|
|
|
599
|
|
577
|
|
||||
Real estate
|
2,125
|
|
1,857
|
|
|
222
|
|
153
|
|
||||
Private equities & other investments
|
581
|
|
258
|
|
|
481
|
|
346
|
|
||||
Total
|
24,920
|
|
28,999
|
|
|
14,260
|
|
12,422
|
|
||||
|
|
|
|
|
|
||||||||
Investments measured at net asset value (NAV)
|
|
|
|
|
|
||||||||
Global equity
|
13,790
|
|
5,655
|
|
|
1,871
|
|
1,257
|
|
||||
Debt securities
|
4,107
|
|
3,835
|
|
|
1,247
|
|
768
|
|
||||
Real estate
|
1,258
|
|
1,387
|
|
|
1,598
|
|
1,296
|
|
||||
Private equities & other investments
|
6,286
|
|
6,017
|
|
|
2,248
|
|
1,348
|
|
||||
Total plan assets at fair value
|
$
|
50,361
|
|
$
|
45,893
|
|
|
$
|
21,224
|
|
$
|
17,091
|
|
(a)
|
Primarily represented investment-grade bonds of U.S. issuers from diverse industries.
|
(b)
|
Primarily represented investments in residential and commercial mortgage-backed securities, non-U.S. corporate and government bonds and U.S. government, federal agency, state and municipal debt.
|
FINANCIAL STATEMENTS
|
POSTRETIREMENT BENEFIT PLANS
|
|
FAIR VALUE OF PLAN ASSETS
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
|
Principal pension plans
|
|
Other pension plans
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
|
|
|
|
|
|
||||||||
Balance at January 1
|
$
|
45,893
|
|
$
|
45,720
|
|
|
$
|
17,091
|
|
$
|
17,368
|
|
Actual gain on plan assets
|
6,217
|
|
2,892
|
|
|
1,977
|
|
1,743
|
|
||||
Employer contributions
|
1,978
|
|
552
|
|
|
870
|
|
795
|
|
||||
Participant contributions
|
91
|
|
115
|
|
|
42
|
|
43
|
|
||||
Benefits paid
|
(3,818
|
)
|
(3,386
|
)
|
|
(977
|
)
|
(842
|
)
|
||||
Acquisitions (dispositions) / other - net
|
—
|
|
—
|
|
|
1,221
|
|
(81
|
)
|
||||
Exchange rate adjustments
|
—
|
|
—
|
|
|
1,000
|
|
(1,935
|
)
|
||||
Balance at December 31
|
$
|
50,361
|
|
$
|
45,893
|
|
|
$
|
21,224
|
|
$
|
17,091
|
|
ASSET ALLOCATION
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
Principal pension plans
|
|
Other pension plans
(weighted average)
|
|||||
|
2017
|
2017
|
|
|
2017
|
|
2017
|
|
December 31
|
Target
allocation
|
Actual
allocation
|
|
|
Target
allocation
|
|
Actual
allocation
|
|
|
|
|
|
|
|
|||
Global equity
|
33.5 - 53.5%
|
46
|
%
|
|
37
|
%
|
39
|
%
|
Debt securities (including cash equivalents)
|
15.0 - 58.5
|
34
|
|
|
36
|
|
40
|
|
Real estate
|
5.0 - 15.0
|
7
|
|
|
10
|
|
9
|
|
Private equities & other investments
|
6.5 - 16.5
|
13
|
|
|
17
|
|
12
|
|
|
Principal pension plans
|
|
Other pension plans
|
||||||||||
December 31 (in millions)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||
|
|
|
|
|
|
||||||||
Prior service cost (credit)
|
$
|
784
|
|
$
|
1,138
|
|
|
$
|
(100
|
)
|
$
|
(88
|
)
|
Net actuarial loss
|
14,326
|
|
16,664
|
|
|
3,712
|
|
4,800
|
|
||||
Total
|
$
|
15,110
|
|
$
|
17,802
|
|
|
$
|
3,612
|
|
$
|
4,712
|
|
FINANCIAL STATEMENTS
|
POSTRETIREMENT BENEFIT PLANS
|
|
ESTIMATED FUTURE BENEFIT PAYMENTS
|
||||||||||||||||||
|
|
|
|
|
|
2023 -
|
|
|||||||||||
(In millions)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2027
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Principal pension plans
|
$
|
3,600
|
|
$
|
3,685
|
|
$
|
3,775
|
|
$
|
3,850
|
|
$
|
3,910
|
|
$
|
20,510
|
|
Other pension plans
|
975
|
|
995
|
|
1,005
|
|
1,020
|
|
1,045
|
|
5,520
|
|
COST OF PRINCIPAL RETIREE BENEFIT PLANS
|
|||||||||
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Service cost for benefits earned
|
$
|
94
|
|
$
|
123
|
|
$
|
145
|
|
Prior service credit amortization
|
(171
|
)
|
(164
|
)
|
(8
|
)
|
|||
Expected return on plan assets
|
(36
|
)
|
(43
|
)
|
(48
|
)
|
|||
Interest cost on benefit obligations
|
224
|
|
249
|
|
335
|
|
|||
Net actuarial gain amortization
|
(80
|
)
|
(50
|
)
|
(25
|
)
|
|||
Curtailment loss (gain)(a)
|
4
|
|
—
|
|
(225
|
)
|
|||
Benefit plans cost
|
$
|
35
|
|
$
|
115
|
|
$
|
174
|
|
(a)
|
In 2015, gain principally resulting from life insurance amendment.
|
ASSUMPTIONS USED TO MEASURE BENEFIT OBLIGATIONS
|
||||||
|
|
|
|
|||
December 31
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|||
Discount rate
|
3.43
|
%
|
3.75
|
%
|
3.93
|
%
|
Compensation increases
|
3.55
|
|
3.80
|
|
3.80
|
|
Initial healthcare trend rate(a)
|
6.00
|
|
6.00
|
|
6.00
|
|
(a)
|
For
2017
, ultimately declining to
5%
for 2030 and thereafter.
|
FINANCIAL STATEMENTS
|
POSTRETIREMENT BENEFIT PLANS
|
|
ASSUMPTIONS USED TO MEASURE BENEFIT COST
|
||||||
|
|
|
|
|||
December 31
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|||
Discount rate(a)
|
3.75
|
%
|
3.93
|
%
|
3.89
|
%
|
Expected return on assets
|
7.00
|
|
7.00
|
|
7.00
|
|
(a)
|
Weighted average discount rates of
3.86%
and
3.92%
were used for determination of costs in
2016
and
2015
, respectively.
|
FUNDED STATUS
|
|
|
||||
|
|
|
||||
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Accumulated postretirement benefit obligation
|
$
|
6,006
|
|
$
|
6,289
|
|
Fair value of plan assets
|
518
|
|
575
|
|
||
Underfunded
|
$
|
5,488
|
|
$
|
5,714
|
|
ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION
|
||||||
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Balance at January 1
|
$
|
6,289
|
|
$
|
6,757
|
|
Service cost for benefits earned
|
94
|
|
123
|
|
||
Interest cost on benefit obligations
|
224
|
|
249
|
|
||
Participant contributions
|
54
|
|
51
|
|
||
Plan amendments
|
(8
|
)
|
(7
|
)
|
||
Actuarial gain(a)
|
(94
|
)
|
(291
|
)
|
||
Benefits paid
|
(580
|
)
|
(603
|
)
|
||
Acquisitions (dispositions) / other - net
|
27
|
|
10
|
|
||
Balance at December 31(b)
|
$
|
6,006
|
|
$
|
6,289
|
|
(a)
|
In 2016, primarily associated with lower costs from new healthcare supplier contracts.
|
(b)
|
The benefit obligation for retiree health plans was
$4,084 million
and
$4,366 million
at
December 31, 2017
and
2016
, respectively.
|
December 31 (in millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Global equity
|
$
|
—
|
|
$
|
289
|
|
Debt securities
|
|
|
||||
Fixed income and cash investment funds
|
16
|
|
30
|
|
||
U.S. corporate
|
19
|
|
38
|
|
||
Other debt securities
|
66
|
|
82
|
|
||
Private equities & other investments
|
21
|
|
3
|
|
||
Total
|
122
|
|
442
|
|
||
|
|
|
||||
Investments measured at net asset value (NAV)
|
|
|
||||
Global equity
|
321
|
|
50
|
|
||
Debt securities
|
28
|
|
—
|
|
||
Private equities & other investments
|
47
|
|
83
|
|
||
Total plan assets at fair value
|
$
|
518
|
|
$
|
575
|
|
FINANCIAL STATEMENTS
|
POSTRETIREMENT BENEFIT PLANS
|
|
FAIR VALUE OF PLAN ASSETS
|
|
|
||||
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Balance at January 1
|
$
|
575
|
|
$
|
695
|
|
Actual gain on plan assets
|
82
|
|
22
|
|
||
Employer contributions
|
387
|
|
410
|
|
||
Participant contributions
|
54
|
|
51
|
|
||
Benefits paid
|
(580
|
)
|
(603
|
)
|
||
Balance at December 31
|
$
|
518
|
|
$
|
575
|
|
ASSET ALLOCATION
|
|||
|
|
|
|
|
2017
|
2017
|
|
December 31
|
Target
allocation
|
Actual
allocation
|
|
|
|
|
|
Global equity
|
54 - 74%
|
62
|
%
|
Debt securities (including cash equivalents)
|
16 - 55
|
25
|
|
Private equities & other investments
|
0 - 12
|
13
|
|
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Prior service credit
|
$
|
(2,814
|
)
|
$
|
(2,975
|
)
|
Net actuarial gain
|
(732
|
)
|
(682
|
)
|
||
Total
|
$
|
(3,546
|
)
|
$
|
(3,657
|
)
|
ESTIMATED FUTURE BENEFIT PAYMENTS
|
||||||||||||||||||
|
|
|
|
|
|
2023 -
|
|
|||||||||||
(In millions)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2027
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
|
$
|
585
|
|
$
|
555
|
|
$
|
525
|
|
$
|
500
|
|
$
|
485
|
|
$
|
2,090
|
|
FINANCIAL STATEMENTS
|
POSTRETIREMENT BENEFIT PLANS
|
|
2017 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME
|
||||||||||||
|
|
|
|
|
||||||||
(In millions)
|
Total
postretirement
benefit plans
|
|
Principal
pension
plans
|
|
Other
pension
plans
|
|
Principal
retiree
benefit
plans
|
|
||||
|
|
|
|
|
||||||||
Cost of postretirement benefit plans
|
$
|
4,056
|
|
$
|
3,687
|
|
$
|
334
|
|
$
|
35
|
|
Changes in other comprehensive income
|
|
|
|
|
||||||||
Prior service cost (credit) – current year
|
(8
|
)
|
—
|
|
—
|
|
(8
|
)
|
||||
Net actuarial loss (gain) – current year
|
(310
|
)
|
474
|
|
(656
|
)
|
(128
|
)
|
||||
Reclassification out of AOCI:
|
|
|
|
|
||||||||
Net curtailment gain (loss)
|
(88
|
)
|
(64
|
)
|
(20
|
)
|
(4
|
)
|
||||
Prior service credit (cost) amortization
|
(114
|
)
|
(290
|
)
|
5
|
|
171
|
|
||||
Net actuarial gain (loss) amortization
|
(3,161
|
)
|
(2,812
|
)
|
(429
|
)
|
80
|
|
||||
Total changes in other comprehensive income
|
(3,681
|
)
|
(2,692
|
)
|
(1,100
|
)
|
111
|
|
||||
Cost of postretirement benefit plans and
changes in other comprehensive income
|
$
|
375
|
|
$
|
995
|
|
$
|
(766
|
)
|
$
|
146
|
|
2016 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME
|
||||||||||||
|
|
|
|
|
||||||||
(In millions)
|
Total
postretirement
benefit plans
|
|
Principal
pension
plans
|
|
Other
pension
plans
|
|
Principal
retiree
benefit
plans
|
|
||||
|
|
|
|
|
||||||||
Cost of postretirement benefit plans
|
$
|
4,112
|
|
$
|
3,623
|
|
$
|
374
|
|
$
|
115
|
|
Changes in other comprehensive income
|
|
|
|
|
||||||||
Prior service cost (credit) – current year
|
(61
|
)
|
—
|
|
(54
|
)
|
(7
|
)
|
||||
Net actuarial loss (gain) – current year
|
4,038
|
|
2,317
|
|
1,989
|
|
(268
|
)
|
||||
Reclassification out of AOCI:
|
|
|
|
|
||||||||
Net curtailment gain (loss)
|
(50
|
)
|
(31
|
)
|
(19
|
)
|
—
|
|
||||
Prior service credit (cost) amortization
|
(140
|
)
|
(303
|
)
|
(1
|
)
|
164
|
|
||||
Net actuarial gain (loss) amortization
|
(2,655
|
)
|
(2,449
|
)
|
(256
|
)
|
50
|
|
||||
Total changes in other comprehensive income
|
1,132
|
|
(466
|
)
|
1,659
|
|
(61
|
)
|
||||
Cost of postretirement benefit plans and
changes in other comprehensive income
|
$
|
5,244
|
|
$
|
3,157
|
|
$
|
2,033
|
|
$
|
54
|
|
2015 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME
|
||||||||||||
|
|
|
|
|
||||||||
(In millions)
|
Total
postretirement
benefit plans
|
|
Principal
pension
plans
|
|
Other
pension
plans
|
|
Principal
retiree
benefit
plans
|
|
||||
|
|
|
|
|
||||||||
Cost of postretirement benefit plans
|
$
|
5,045
|
|
$
|
4,498
|
|
$
|
373
|
|
$
|
174
|
|
Changes in other comprehensive income
|
|
|
|
|
||||||||
Prior service cost (credit) – current year
|
(2,401
|
)
|
902
|
|
(12
|
)
|
(3,291
|
)
|
||||
Net actuarial loss (gain) – current year
|
(1,604
|
)
|
(1,022
|
)
|
(164
|
)
|
(418
|
)
|
||||
Reclassification out of AOCI:
|
|
|
|
|
||||||||
Net curtailment gain (loss)
|
76
|
|
(105
|
)
|
6
|
|
175
|
|
||||
Prior service credit (cost) amortization
|
(197
|
)
|
(205
|
)
|
—
|
|
8
|
|
||||
Net actuarial gain (loss) amortization
|
(3,552
|
)
|
(3,288
|
)
|
(289
|
)
|
25
|
|
||||
Total changes in other comprehensive income
|
(7,678
|
)
|
(3,718
|
)
|
(459
|
)
|
(3,501
|
)
|
||||
Cost of postretirement benefit plans and
changes in other comprehensive income
|
$
|
(2,633
|
)
|
$
|
780
|
|
$
|
(86
|
)
|
$
|
(3,327
|
)
|
FINANCIAL STATEMENTS
|
INCOME TAXES
|
|
CONSOLIDATED EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|||||||||
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
U.S. earnings
|
$
|
(17,234
|
)
|
$
|
2,145
|
|
$
|
(309
|
)
|
Non-U.S. earnings
|
8,443
|
|
6,885
|
|
8,495
|
|
|||
Total
|
$
|
(8,791
|
)
|
$
|
9,030
|
|
$
|
8,186
|
|
FINANCIAL STATEMENTS
|
INCOME TAXES
|
|
CONSOLIDATED (BENEFIT) PROVISION FOR INCOME TAXES
|
|||||||||
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
U.S. Federal
|
|
|
|
||||||
Current
|
$
|
(823
|
)
|
$
|
(2,646
|
)
|
$
|
1,549
|
|
Deferred
|
(4,261
|
)
|
(754
|
)
|
492
|
|
|||
Non - U.S.
|
|
|
|
||||||
Current
|
2,286
|
|
1,730
|
|
4,867
|
|
|||
Deferred
|
(470
|
)
|
1,239
|
|
(121
|
)
|
|||
Other
|
225
|
|
(33
|
)
|
(301
|
)
|
|||
Total
|
$
|
(3,043
|
)
|
$
|
(464
|
)
|
$
|
6,485
|
|
(a)
|
U.S. general business credits, primarily the credit for energy produced from renewable sources and the credit for research performed in the U.S.
|
(b)
|
Includes, for each period, the expense or (benefit) for “Other” taxes reported above in the consolidated (benefit) provision for income taxes, net of
35.0%
federal effect.
|
FINANCIAL STATEMENTS
|
INCOME TAXES
|
|
UNRECOGNIZED TAX BENEFITS
|
||||||
|
|
|
||||
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Unrecognized tax benefits
|
$
|
5,449
|
|
$
|
4,692
|
|
Portion that, if recognized, would reduce tax expense and effective tax rate(a)
|
3,626
|
|
2,886
|
|
||
Accrued interest on unrecognized tax benefits
|
810
|
|
615
|
|
||
Accrued penalties on unrecognized tax benefits
|
158
|
|
118
|
|
||
Reasonably possible reduction to the balance of unrecognized tax benefits
in succeeding 12 months
|
0-1,100
|
|
0-600
|
|
||
Portion that, if recognized, would reduce tax expense and effective tax rate(a)
|
0-900
|
|
0-500
|
|
(a)
|
Some portion of such reduction may be reported as discontinued operations.
|
UNRECOGNIZED TAX BENEFITS RECONCILIATION
|
||||||
|
|
|
||||
(In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Balance at January 1
|
$
|
4,692
|
|
$
|
6,778
|
|
Additions for tax positions of the current year
|
260
|
|
248
|
|
||
Additions for tax positions of prior years(a)
|
791
|
|
521
|
|
||
Reductions for tax positions of prior years
|
(113
|
)
|
(2,016
|
)
|
||
Settlements with tax authorities
|
(57
|
)
|
(823
|
)
|
||
Expiration of the statute of limitations
|
(124
|
)
|
(16
|
)
|
||
Balance at December 31
|
$
|
5,449
|
|
$
|
4,692
|
|
(a)
|
For 2017, the amount shown as “additions for tax positions of prior years” included
$326 million
related to uncertain tax liabilities acquired in the Baker Hughes transaction.
|
FINANCIAL STATEMENTS
|
INCOME TAXES
|
|
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Assets
|
|
|
||||
GE
|
$
|
15,586
|
|
$
|
21,106
|
|
GE Capital
|
6,176
|
|
5,093
|
|
||
|
21,762
|
|
26,199
|
|
||
Liabilities
|
|
|
||||
GE
|
(10,382
|
)
|
(14,440
|
)
|
||
GE Capital
|
(5,177
|
)
|
(9,926
|
)
|
||
Eliminations
|
4
|
|
—
|
|
||
|
(15,555
|
)
|
(24,366
|
)
|
||
Net deferred income tax asset (liability)
|
$
|
6,207
|
|
$
|
1,833
|
|
COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY)
|
||||||
|
|
|
||||
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
GE
|
|
|
||||
Principal pension plans
|
$
|
3,911
|
|
$
|
8,963
|
|
Other non-current compensation and benefits
|
2,780
|
|
4,230
|
|
||
Provision for expenses
|
2,499
|
|
2,633
|
|
||
Retiree insurance plans
|
1,152
|
|
2,000
|
|
||
Non-U.S. loss carryforwards(a)
|
2,078
|
|
1,444
|
|
||
U.S. credit carryforwards(b)
|
1,932
|
|
67
|
|
||
Contract assets
|
(5,051
|
)
|
(6,677
|
)
|
||
Intangible assets
|
(2,033
|
)
|
(2,962
|
)
|
||
Depreciation
|
(1,022
|
)
|
(1,755
|
)
|
||
Other – net
|
(1,042
|
)
|
(1,277
|
)
|
||
|
5,204
|
|
6,666
|
|
||
GE Capital
|
|
|
||||
Operating leases
|
(2,689
|
)
|
(3,582
|
)
|
||
Financing leases
|
(877
|
)
|
(1,632
|
)
|
||
Energy investments
|
(754
|
)
|
(1,410
|
)
|
||
Intangible assets
|
(25
|
)
|
(125
|
)
|
||
U.S. credit carryforwards(b)
|
1,632
|
|
1,092
|
|
||
Insurance company loss reserves
|
1,373
|
|
(819
|
)
|
||
Non-U.S. loss carryforwards(a)
|
1,271
|
|
1,323
|
|
||
Other – net
|
1,068
|
|
320
|
|
||
|
999
|
|
(4,833
|
)
|
||
Eliminations
|
4
|
|
—
|
|
||
Net deferred income tax asset (liability)
|
$
|
6,207
|
|
$
|
1,833
|
|
(a)
|
Net of valuation allowances of
$4,251 million
and
$2,450 million
for GE and
$448 million
and
$391 million
for GE Capital, for
2017
and
2016
, respectively. Of the net deferred tax asset as of
December 31, 2017
of
$3,349 million
,
$11 million
relates to net operating loss carryforwards that expire in various years ending from December 31, 2018 through December 31, 2020;
$342 million
relates to net operating losses that expire in various years ending from December 31, 2021 through December 31, 2037 and
$2,996 million
relates to net operating loss carryforwards that may be carried forward indefinitely.
|
(b)
|
Of the net deferred tax asset as of December 31, 2017 of
$3,564 million
for U.S. credit carryforwards,
$1,194 million
expires in the year ending December 31, 2027,
$67 million
expires in the years ending December 31, 2030 through 2032 and
$2,303 million
expires in various years ending from December 31, 2033 through December 31, 2037.
|
FINANCIAL STATEMENTS
|
SHAREOWNERS' EQUITY
|
|
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Preferred stock issued
|
$
|
6
|
|
$
|
6
|
|
$
|
6
|
|
Common stock issued
|
$
|
702
|
|
$
|
702
|
|
$
|
702
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
||||||
Balance at January 1
|
$
|
(18,598
|
)
|
$
|
(16,529
|
)
|
$
|
(18,172
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
|
|
||||||
Investment securities - net of deferred taxes of $(335), $84, $(270)(a)
|
(627)
|
170
|
(486)
|
||||||
Currency translation adjustments (CTA) - net of deferred taxes of $(537), $719, $1,348
|
866
|
(1,606)
|
(4,932)
|
||||||
Cash flow hedges - net of deferred taxes of $31, $(41), $(21)
|
171
|
(234)
|
(732)
|
||||||
Benefit plans - net of deferred taxes of $32, $(1,016), $1,506
|
550
|
(2,946)
|
2,768
|
||||||
Total
|
$
|
960
|
|
$
|
(4,616
|
)
|
$
|
(3,382
|
)
|
Reclassifications from other comprehensive income
|
|
|
|
||||||
Investment securities - net of deferred taxes of $(81), $30, $(36)(b)
|
(149
|
)
|
34
|
|
(67
|
)
|
|||
Currency translation gains (losses) on dispositions - net of deferred taxes of $(543), $241, $(1,489)(b)
|
1,332
|
|
294
|
|
1,794
|
|
|||
Cash flow hedges - net of deferred taxes of $(28), $37, $86(c)
|
(120
|
)
|
327
|
|
831
|
|
|||
Benefit plans - net of deferred taxes of $1,111, $966, $1,260(d)
|
2,232
|
|
1,878
|
|
2,397
|
|
|||
Total(e)
|
$
|
3,295
|
|
$
|
2,533
|
|
$
|
4,955
|
|
Other comprehensive income (loss)
|
4,255
|
|
(2,083
|
)
|
1,575
|
|
|||
Less other comprehensive income (loss) attributable to noncontrolling interests
|
53
|
|
(14
|
)
|
(69
|
)
|
|||
Other comprehensive income (loss), net, attributable to GE
|
$
|
4,202
|
|
$
|
(2,069
|
)
|
$
|
1,644
|
|
Balance at December 31
|
$
|
(14,396
|
)
|
$
|
(18,598
|
)
|
$
|
(16,529
|
)
|
Other capital
|
|
|
|
||||||
Balance at January 1
|
$
|
37,224
|
|
$
|
37,613
|
|
$
|
32,889
|
|
Gains (losses) on treasury stock dispositions and other(f)(g)
|
(53
|
)
|
(389
|
)
|
4,724
|
|
|||
Balance at December 31
|
$
|
37,171
|
|
$
|
37,224
|
|
$
|
37,613
|
|
Retained earnings
|
|
|
|
||||||
Balance at January 1
|
$
|
139,532
|
|
$
|
140,020
|
|
$
|
155,333
|
|
Net earnings (loss) attributable to the Company
|
(5,786
|
)
|
8,831
|
|
(6,126
|
)
|
|||
Dividends and other transactions with shareowners
|
(7,741
|
)
|
(9,054
|
)
|
(9,161
|
)
|
|||
Redemption value adjustment on redeemable noncontrolling interests(h)
|
(322
|
)
|
(266
|
)
|
(25
|
)
|
|||
Balance at December 31
|
$
|
125,682
|
|
$
|
139,532
|
|
$
|
140,020
|
|
Common stock held in treasury
|
|
|
|
||||||
Balance at January 1
|
$
|
(83,038
|
)
|
$
|
(63,539
|
)
|
$
|
(42,593
|
)
|
Purchases(i)(j)
|
(3,849
|
)
|
(22,073
|
)
|
(23,762
|
)
|
|||
Dispositions
|
1,985
|
|
2,574
|
|
2,816
|
|
|||
Balance at December 31
|
$
|
(84,902
|
)
|
$
|
(83,038
|
)
|
$
|
(63,539
|
)
|
Total equity
|
|
|
|
||||||
GE shareowners' equity balance
|
$
|
64,263
|
|
$
|
75,828
|
|
$
|
98,274
|
|
Noncontrolling interests balance
|
17,723
|
|
1,663
|
|
1,864
|
|
|||
Total equity balance at December 31
|
$
|
81,986
|
|
$
|
77,491
|
|
$
|
100,138
|
|
(a)
|
Included adjustments of
$(1,259) million
,
$(57) million
and
$611 million
in 2017, 2016 and 2015, respectively, to deferred acquisition costs, present value of future profits, and investment contracts, insurance liabilities and annuity benefits in our run-off insurance operations to reflect the effects that would have been recognized had the related unrealized investment securities holding gains and losses been realized. See Note 11 for further information.
|
(b)
|
Recorded in total revenues and other income and income taxes in benefit (provision) for income taxes in the Statement of Earnings (Loss). Currency translation gains (losses) on dispositions included
$483 million
,
$211 million
and
$1,730 million
in 2017, 2016 and 2015, respectively, in earnings (loss) from discontinued operations, net of taxes.
|
(c)
|
Cash flow hedges primarily includes impact of foreign exchange contracts and gains (losses) on interest rate derivatives, primarily recorded in GE Capital revenue from services, interest and other financial charges and other costs and expenses. See Note 19 for further information
.
|
(d)
|
Primarily includes amortization of actuarial gains (losses), amortization of prior service cost and curtailment gain (loss). These components are included in the computation of net periodic pension cost. See Note 12 for further information.
|
(e)
|
Included
$784 million
after-tax reclassification of AOCI to additional paid in capital as a result of recognition of noncontrolling interest in GE Oil & Gas as part of Baker Hughes transaction in 2017.
|
(f)
|
Included
$4,949 million
related to issuance of new preferred stock in exchange for existing GE Capital preferred stock in
2015
.
|
(g)
|
Included
$(126) million
decrease in additional paid in capital in 2017 as a result of Baker Hughes transaction. See Note 8 for further information.
|
(h)
|
Amount of redemption value adjustment on redeemable noncontrolling interest shown net of deferred taxes.
|
(i)
|
Included
$(20,383) million
related to the split-off of Synchrony Financial from GE, where GE shares were exchanged for shares of Synchrony Financial in
2015
.
|
(j)
|
Included
$(11,370) million
of GE shares purchased under accelerated share repurchase (ASR) agreements in
2016
.
|
FINANCIAL STATEMENTS
|
SHAREOWNERS' EQUITY
|
|
December 31 (In thousands)
|
2017
|
2016
|
2015
|
|
|
|
|
Issued
|
11,693,841
|
11,693,841
|
11,693,841
|
In treasury
|
(3,013,270)
|
(2,951,227)
|
(2,314,553)
|
Outstanding
|
8,680,571
|
8,742,614
|
9,379,288
|
FINANCIAL STATEMENTS
|
SHAREOWNERS' EQUITY
|
|
CHANGES TO NONCONTROLLING INTERESTS
|
|||||||||
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Balance at January 1
|
$
|
1,663
|
|
$
|
1,864
|
|
$
|
8,674
|
|
Net earnings (loss)
|
(17
|
)
|
(46
|
)
|
377
|
|
|||
GECC preferred stock(a)
|
—
|
|
—
|
|
(4,949
|
)
|
|||
GECC preferred stock dividend
|
—
|
|
—
|
|
(311
|
)
|
|||
Dividends
|
(222
|
)
|
(72
|
)
|
(43
|
)
|
|||
Dispositions
|
(92
|
)
|
(232
|
)
|
189
|
|
|||
Synchrony Financial(b)
|
—
|
|
—
|
|
(2,840
|
)
|
|||
Other (including AOCI)(c)(d)(e)(f)(g)
|
16,390
|
|
150
|
|
767
|
|
|||
Balance at December 31
|
$
|
17,723
|
|
$
|
1,663
|
|
$
|
1,864
|
|
(a)
|
In
2015
,
included
$(4,949) million
related to the issuance of GE preferred stock in exchange for existing GECC preferred stock. GE preferred stock is reflected in shareowners’ equity in the consolidated Statement of Financial Position.
|
(b)
|
Related to the split-off of Synchrony Financial from GE in 2015, where GE shares were exchanged for shares of Synchrony Financial; related to the Synchrony Financial IPO in
2014
.
|
(c)
|
In 2017, included
$16,462 million
related to Baker Hughes transaction. See Note 8 for further information.
|
(d)
|
In
2016
,
included
$155 million
related to Arcam AB acquisition in our Aviation segment
.
|
(e)
|
In
2016
, included
$(123) million
for deconsolidation of investment funds managed by GE Asset Management (GEAM) upon the adoption of ASU 2015-2,
Amendments to the Consolidation Analysis
.
|
(f)
|
In
2015, included
$695 million
related to the Alstom acquisition
.
|
(g)
|
Includes research & development partner funding arrangements, acquisitions and eliminations.
|
FINANCIAL STATEMENTS
|
SHAREOWNERS' EQUITY
|
|
CHANGES TO REDEEMABLE NONCONTROLLING INTERESTS
|
|||||||||
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Balance at January 1
|
$
|
3,025
|
|
$
|
2,972
|
|
$
|
98
|
|
Net earnings (loss)
|
(254
|
)
|
(244
|
)
|
(46
|
)
|
|||
Dividends
|
(62
|
)
|
(17
|
)
|
(11
|
)
|
|||
Redemption value adjustment
|
353
|
|
266
|
|
25
|
|
|||
Other(a)(b)
|
337
|
|
49
|
|
2,906
|
|
|||
Balance at December 31(c)
|
$
|
3,399
|
|
$
|
3,025
|
|
$
|
2,972
|
|
(a)
|
In 2016, included
$204 million
related to the Concept Laser GmbH acquisition in our Aviation segment.
|
(b)
|
Includes impact of foreign currency changes.
|
(c)
|
Included
$3,065 million
,
$2,709 million
and
$2,859 million
related to Alstom joint ventures for the years ended December 31, 2017, 2016 and 2015. respectively.
|
(In millions, after tax)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Compensation expense
|
$
|
146
|
|
$
|
207
|
|
$
|
234
|
|
FINANCIAL STATEMENTS
|
OTHER STOCK-RELATED INFORMATION
|
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Weighted-average grant-date fair value of stock options
|
$
|
3.81
|
|
$
|
3.61
|
|
$
|
4.64
|
|
|
|
|
|
||||||
Stock Option Valuation Assumptions:
|
|
|
|
||||||
Risk-free interest rate
|
2.3
|
%
|
1.4
|
%
|
2.0
|
%
|
|||
Dividend yield
|
3.3
|
%
|
3.4
|
%
|
3.4
|
%
|
|||
Expected volatility
|
28.0
|
%
|
20.0
|
%
|
25.0
|
%
|
|||
Expected option life (in years)
|
6.3
|
|
6.5
|
|
6.8
|
|
|||
|
|
|
|
||||||
Other pricing model inputs:
|
|
|
|
||||||
Weighted-average grant-date market price of GE stock (strike price)
|
$
|
18.97
|
|
$
|
29.63
|
|
$
|
25.79
|
|
As of December 31, 2017 unless, otherwise stated (in thousands, except per-share data)
|
|
||
|
|
||
Stock options granted during 2017
|
30,611
|
|
|
Weighted-average strike price of awards granted in 2017
|
$
|
18.97
|
|
Stock options outstanding
|
398,571
|
|
|
Weighted-average strike price of stock options outstanding
|
$
|
21.91
|
|
Stock options exercisable
|
309,190
|
|
|
Weighted-average strike price of stock options exercisable
|
$
|
21.25
|
|
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Stock options exercised (in thousands)
|
30,774
|
|
56,973
|
|
65,764
|
|
|||
Cash received from stock options exercised (in millions)
|
$
|
528
|
|
$
|
1,037
|
|
$
|
1,098
|
|
FINANCIAL STATEMENTS
|
OTHER STOCK-RELATED INFORMATION
|
(In millions, after tax)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Compensation expense(a)
|
$
|
95
|
|
$
|
90
|
|
$
|
72
|
|
(a)
|
Included
$(6) million
of compensation expense related to performance share units in
2017
.
|
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Weighted-average grant-date fair value of restricted stock awards
|
$
|
24.89
|
|
$
|
30.20
|
|
$
|
26.74
|
|
As of December 31, 2017, unless otherwise stated (in thousands, except per-share data)
|
|
||
|
|
||
Restricted stock units granted during 2017
|
7,715
|
|
|
Non-vested restricted stock units outstanding
|
17,233
|
|
|
Weighted-average fair value at grant date of non-vested stock
|
$
|
26.94
|
|
(In thousands)
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|||
Restricted stock units vested during the year ended
|
6,490
|
|
4,427
|
|
3,899
|
|
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Income tax benefit recognized in earnings
|
$
|
138
|
|
$
|
274
|
|
$
|
148
|
|
Excess of actual tax deductions over amounts assumed recognized in equity(a)
|
—
|
|
—
|
|
167
|
|
(a)
|
We adopted ASU 2016-09 in September 2016. The primary effects of adoption were the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital and the reclassification of cash flows related to excess tax benefits from financing activities to operating activities for the periods beginning January 1, 2016. See Note 1 for further information.
|
As of December 31, 2017, unless otherwise stated (in millions)
|
Aggregate
intrinsic
value
|
|
|
|
|
||
Stock options outstanding
|
$
|
235
|
|
Stock options exercised in 2017
|
326
|
|
|
Non-vested restricted stock units outstanding
|
301
|
|
|
Restricted stock units vested in 2017
|
167
|
|
FINANCIAL STATEMENTS
|
EARNINGS PER SHARE & OTHER INCOME
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
(In millions; per-share amounts in dollars)
|
Diluted
|
|
Basic
|
|
|
Diluted
|
|
Basic
|
|
|
Diluted
|
|
Basic
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Amounts attributable to the Company:
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) from continuing operations for
per-share calculation(a)(b)
|
$
|
(5,495
|
)
|
$
|
(5,495
|
)
|
|
$
|
9,764
|
|
$
|
9,769
|
|
|
$
|
1,680
|
|
$
|
1,679
|
|
Preferred stock dividends
|
(436
|
)
|
(436
|
)
|
|
(656
|
)
|
(656
|
)
|
|
(18
|
)
|
(18
|
)
|
||||||
Earnings (loss) from continuing operations attributable to
common shareowners for per-share calculation(a)(b)
|
$
|
(5,931
|
)
|
$
|
(5,931
|
)
|
|
$
|
9,108
|
|
$
|
9,113
|
|
|
$
|
1,662
|
|
$
|
1,661
|
|
Earnings (loss) from discontinued operations
for per-share calculation(a)(b)
|
(328
|
)
|
(328
|
)
|
|
(955
|
)
|
(950
|
)
|
|
(7,795
|
)
|
(7,795
|
)
|
||||||
Net earnings (loss) attributable to GE common
shareowners for per-share calculation(a)(b)
|
$
|
(6,246
|
)
|
$
|
(6,246
|
)
|
|
$
|
8,157
|
|
$
|
8,163
|
|
|
$
|
(6,135
|
)
|
$
|
(6,135
|
)
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average equivalent shares
|
|
|
|
|
|
|
|
|
||||||||||||
Shares of GE common stock outstanding
|
8,687
|
|
8,687
|
|
|
9,025
|
|
9,025
|
|
|
9,944
|
|
9,944
|
|
||||||
Employee compensation-related shares (including
stock options) and warrants
|
—
|
|
—
|
|
|
105
|
|
—
|
|
|
72
|
|
—
|
|
||||||
Total average equivalent shares
|
8,687
|
|
8,687
|
|
|
9,130
|
|
9,025
|
|
|
10,016
|
|
9,944
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||||||
Per-share amounts
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) from continuing operations
|
$
|
(0.68
|
)
|
$
|
(0.68
|
)
|
|
$
|
1.00
|
|
$
|
1.01
|
|
|
$
|
0.17
|
|
$
|
0.17
|
|
Earnings (loss) from discontinued operations
|
(0.04
|
)
|
(0.04
|
)
|
|
(0.10
|
)
|
(0.11
|
)
|
|
(0.78
|
)
|
(0.78
|
)
|
||||||
Net earnings (loss)
|
(0.72
|
)
|
(0.72
|
)
|
|
0.89
|
|
0.90
|
|
|
(0.61
|
)
|
(0.62
|
)
|
(a)
|
Included a dilutive adjustment of an insignificant amount of dividend equivalents in each of the three years presented.
|
(b)
|
Included in
2016
is a dilutive adjustment for the change in income for forward purchase contracts that may be settled in stock.
|
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
GE
|
|
|
|
||||||
Purchases and sales of business interests(a)
|
$
|
656
|
|
$
|
3,701
|
|
$
|
1,020
|
|
Licensing and royalty income
|
193
|
|
175
|
|
168
|
|
|||
Associated companies
|
202
|
|
76
|
|
45
|
|
|||
Net interest and investment income
|
299
|
|
167
|
|
65
|
|
|||
Other items(b)
|
86
|
|
(27
|
)
|
868
|
|
|||
|
1,436
|
|
4,092
|
|
2,165
|
|
|||
Eliminations
|
189
|
|
(87
|
)
|
62
|
|
|||
Total
|
$
|
1,625
|
|
$
|
4,005
|
|
$
|
2,227
|
|
(a)
|
Included a pre-tax gain of
$1,943 million
on the sale of our Water business, partially offset by a valuation allowance on businesses classified as held for sale of
$1,378 million
in 2017.
Included a pre-tax gain of
$3,136 million
on the sale of our Appliances business and
$398 million
on the sale of GE Asset Management in 2016. Included a pre-tax gain of
$623 million
on the sale of our Signaling business in 2015. See Note 2.
|
(b)
|
In 2015, included a
$450 million
from a settlement related to the NBCU transaction and a
$175 million
break-up fee from Electrolux. Included net gains on asset sales of
$
59
million, $
101
million
and
$
90
million
in
2017
,
2016
and
2015
, respectively.
|
FINANCIAL STATEMENTS
|
FAIR VALUE MEASUREMENT
|
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
|
|
|
|||||||||||||
|
|
|
|
|
|
||||||||||
(In millions)
|
Level 1(a)
|
|
Level 2(a)
|
|
Level 3(b)
|
|
Netting
adjustment
|
|
Net balance(c)
|
|
|||||
December 31, 2017
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
||||||||||
Investment securities
|
$
|
158
|
|
$
|
34,126
|
|
$
|
4,413
|
|
$
|
—
|
|
$
|
38,696
|
|
Derivatives
|
—
|
|
3,343
|
|
21
|
|
(2,986
|
)
|
378
|
|
|||||
Total
|
$
|
158
|
|
$
|
37,469
|
|
$
|
4,433
|
|
$
|
(2,986
|
)
|
$
|
39,074
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
||||||||||
Derivatives
|
$
|
—
|
|
$
|
2,354
|
|
$
|
7
|
|
$
|
(2,034
|
)
|
$
|
327
|
|
Other(d)
|
—
|
|
999
|
|
—
|
|
—
|
|
999
|
|
|||||
Total
|
$
|
—
|
|
$
|
3,353
|
|
$
|
7
|
|
$
|
(2,034
|
)
|
$
|
1,325
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
||||||||||
Investment securities
|
$
|
188
|
|
$
|
39,719
|
|
$
|
4,406
|
|
$
|
—
|
|
$
|
44,313
|
|
Derivatives
|
—
|
|
5,444
|
|
23
|
|
(5,121
|
)
|
345
|
|
|||||
Total
|
$
|
188
|
|
$
|
45,163
|
|
$
|
4,429
|
|
$
|
(5,121
|
)
|
$
|
44,658
|
|
Liabilities
|
|
|
|
|
|
||||||||||
Derivatives
|
$
|
—
|
|
$
|
4,880
|
|
$
|
2
|
|
$
|
(4,449
|
)
|
$
|
434
|
|
Other(d)
|
—
|
|
1,143
|
|
—
|
|
—
|
|
1,143
|
|
|||||
Total
|
$
|
—
|
|
$
|
6,024
|
|
$
|
2
|
|
$
|
(4,449
|
)
|
$
|
1,577
|
|
(a)
|
There were no significant transfers between Level 1 and Level 2 for the years ended December 31, 2017 and 2016.
|
(b)
|
Included debt securities classified within Level 3 of
$3,629
million of U.S. corporate and
$614
million of Government and agencies securities at December 31, 2017, and
$3,399 million
of U.S. corporate and
$688 million
of Non-U.S. corporate securities at December 31, 2016.
|
(c)
|
See Notes 3 and 19 for further information on the composition of our investment securities and derivative portfolios.
|
(d)
|
Primarily represents the liabilities associated with certain of our deferred incentive compensation plans.
|
(In millions)
|
Balance at
January 1
|
|
Net
realized/
unrealized
gains
(losses
included in
earnings(a)
|
|
Net
realized/
unrealized
gains
(losses
included in
in AOCI
|
|
Purchase(b)
|
|
Sales
|
|
Settlements
|
|
Transfers
into
Level 3
|
|
Transfers
out of
Level 3
|
|
Balance at
December 31
|
|
|||||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Investment securities
|
$
|
4,406
|
|
$
|
54
|
|
$
|
66
|
|
$
|
1,108
|
|
$
|
(38
|
)
|
$
|
(641
|
)
|
$
|
32
|
|
$
|
(575
|
)
|
$
|
4,413
|
|
Derivatives
|
21
|
|
(2
|
)
|
(1
|
)
|
—
|
|
—
|
|
(9
|
)
|
4
|
|
1
|
|
14
|
|
|||||||||
Total
|
$
|
4,427
|
|
$
|
51
|
|
$
|
65
|
|
$
|
1,108
|
|
$
|
(38
|
)
|
$
|
(650
|
)
|
$
|
37
|
|
$
|
(574
|
)
|
$
|
4,427
|
|
2016
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Investment securities
|
$
|
3,695
|
|
$
|
11
|
|
$
|
51
|
|
$
|
973
|
|
$
|
(152
|
)
|
$
|
(166
|
)
|
$
|
34
|
|
$
|
(39
|
)
|
$
|
4,406
|
|
Derivatives
|
88
|
|
(18
|
)
|
—
|
|
1
|
|
—
|
|
(59
|
)
|
—
|
|
8
|
|
21
|
|
|||||||||
Other
|
259
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(259
|
)
|
—
|
|
|||||||||
Total
|
$
|
4,042
|
|
$
|
(7
|
)
|
$
|
51
|
|
$
|
974
|
|
$
|
(152
|
)
|
$
|
(226
|
)
|
$
|
35
|
|
$
|
(290
|
)
|
$
|
4,427
|
|
(a)
|
Earnings effects are primarily included in the “GE Capital revenues from services” and “Interest and other financial charges” captions in the Statement of Earnings (Loss).
|
(b)
|
Included
$675 million
and
$468 million
of U.S. corporate debt securities for the years ended
December 31, 2017
and 2016.
|
FINANCIAL STATEMENTS
|
FAIR VALUE MEASUREMENT
|
|
Remeasured during the years ended December 31
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
(In millions)
|
Level 2
|
Level 3
|
|
Level 2
|
Level 3
|
||||||||
|
|
|
|
|
|
||||||||
Financing receivables and financing receivables held for sale
|
$
|
—
|
|
$
|
1,541
|
|
|
$
|
—
|
|
$
|
30
|
|
Cost and equity method investments
|
—
|
|
2,076
|
|
|
—
|
|
103
|
|
||||
Long-lived assets
|
177
|
|
591
|
|
|
17
|
|
1,055
|
|
||||
Goodwill
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Total
|
$
|
177
|
|
$
|
4,208
|
|
|
$
|
17
|
|
$
|
1,189
|
|
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Financing receivables and financing receivables held for sale
|
$
|
(207
|
)
|
$
|
(14
|
)
|
Cost and equity method investments
|
(891
|
)
|
(44
|
)
|
||
Long-lived assets
|
(819
|
)
|
(196
|
)
|
||
Goodwill
|
(2,564
|
)
|
—
|
|
||
Total
|
$
|
(4,482
|
)
|
$
|
(254
|
)
|
LEVEL 3 MEASUREMENTS - SIGNIFICANT UNOBSERVABLE INPUTS
|
||||||
|
|
|
|
|
||
(Dollars in millions)
|
Fair value
|
Valuation technique
|
Unobservable inputs
|
Range
(weighted-average)
|
||
|
|
|
|
|
||
December 31, 2017
|
|
|
|
|
||
Recurring fair value measurements
|
|
|
|
|
||
Investment securities(b)
|
$
|
903
|
|
Income approach
|
Discount rate(a)
|
3.0%-12.6% (6.2%)
|
|
|
|
|
|
||
Nonrecurring fair value measurements
|
||||||
Financing receivables
|
$
|
1,532
|
|
Income approach
|
Discount rate(a)
|
3.2%-16.5% (10.0%)
|
|
|
|
|
|
||
Cost and equity method investments
|
2,037
|
|
Income approach
|
Discount rate(a)
|
5.0%-50.00% (7.7%)
|
|
|
|
|
|
|
||
Long-lived assets
|
554
|
|
Income approach
|
Discount rate(a)
|
2.7%-18.0% (7.3%)
|
|
|
|
|
|
|
||
|
|
|
|
|
||
December 31, 2016
|
|
|
|
|
||
Recurring fair value measurements
|
|
|
|
|
||
Investment securities(b)
|
$
|
830
|
|
Income approach
|
Discount rate(a)
|
1.4%-17.4% (7.9%)
|
|
|
|
|
|
||
|
|
|
|
|
||
Nonrecurring fair value measurements
|
|
|
|
|
||
Financing receivables
|
$
|
30
|
|
Income approach
|
Discount rate(a)
|
2.5%-30.0% (20.3%)
|
|
|
|
|
|
||
Cost and equity method investments
|
94
|
|
Income approach,
|
Discount rate(a)
|
9.0%-30.0% (11.8%)
|
|
|
|
|
|
|
||
Long-lived assets
|
683
|
|
Income approach
|
Discount rate(a)
|
2.5%-20.0% (10.4%)
|
(a)
|
Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value.
|
(b)
|
Comprises substantially all of U.S. corporate securities
|
FINANCIAL STATEMENTS
|
FINANCIAL INSTRUMENTS
|
|
2017
|
|
2016
|
||||||||||
December 31 (In millions)
|
Carrying
amount (net) |
|
Estimated
fair value |
|
|
Carrying
amount (net) |
|
Estimated
fair value |
|
||||
|
|
|
|
|
|
||||||||
GE
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
||||||||
Investments and notes receivable
|
$
|
1,341
|
|
$
|
1,418
|
|
|
$
|
1,526
|
|
$
|
1,595
|
|
Liabilities
|
|
|
|
|
|
||||||||
Borrowings(a)(b)
|
34,473
|
|
35,416
|
|
|
19,184
|
|
19,923
|
|
||||
Borrowings (debt assumed)(a)(c)
|
47,114
|
|
53,502
|
|
|
60,109
|
|
66,998
|
|
||||
|
|
|
|
|
|
||||||||
GE Capital
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
||||||||
Loans
|
17,363
|
|
17,331
|
|
|
21,060
|
|
20,830
|
|
||||
Other commercial mortgages
|
1,489
|
|
1,566
|
|
|
1,410
|
|
1,472
|
|
||||
Loans held for sale
|
3,274
|
|
3,274
|
|
|
473
|
|
473
|
|
||||
Other financial instruments(d)
|
112
|
|
147
|
|
|
121
|
|
150
|
|
||||
Liabilities
|
|
|
|
|
|
||||||||
Borrowings(a)(e)(f)(g)
|
55,353
|
|
60,415
|
|
|
58,523
|
|
62,024
|
|
||||
Investment contracts
|
2,569
|
|
2,996
|
|
|
2,813
|
|
3,277
|
|
(a)
|
See Note 10.
|
(b)
|
Included
$217 million
and
$115 million
of accrued interest in estimated fair value at
December 31, 2017
and
December 31, 2016
, respectively.
|
(c)
|
Included
$696 million
and
$803 million
of accrued interest in estimated fair value at
December 31, 2017
and
December 31, 2016
, respectively.
|
(d)
|
Principally comprises cost method investments.
|
(e)
|
Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of borrowings at
December 31, 2017
and
December 31, 2016
would have been reduced by
$1,754 million
and
$2,397 million
, respectively.
|
(f)
|
Included
$731 million
and
$775 million
of accrued interest in estimated fair value at
December 31, 2017
and
December 31, 2016
, respectively.
|
(g)
|
Excluded
$39,844 million
and
$58,780 million
of net intercompany payable to GE at
December 31, 2017
and
December 31, 2016
, respectively.
|
FINANCIAL STATEMENTS
|
FINANCIAL INSTRUMENTS
|
NOTIONAL AMOUNTS OF LOAN COMMITMENTS
|
|
|
||||
|
|
|
||||
December 31 (In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Ordinary course of business lending commitments(a)
|
$
|
1,105
|
|
$
|
687
|
|
Unused revolving credit lines
|
198
|
|
238
|
|
(a)
|
Excluded investment commitments of
$677 million
and
$522 million
at
December 31, 2017
and
December 31, 2016
, respectively.
|
Interest rate forwards/swaps
|
Interest rate increases
|
Interest rate decreases
|
Pay fixed rate/receive floating rate
|
Fair value increases
|
Fair value decreases
|
|
|
|
Currency forwards/swaps
|
U.S. dollar strengthens
|
U.S. dollar weakens
|
Pay U.S. dollars/receive foreign currency
|
Fair value decreases
|
Fair value increases
|
|
|
|
Commodity derivatives
|
Price increases
|
Price decreases
|
Receive commodity/ pay fixed price
|
Fair value increases
|
Fair value decreases
|
Interest rate forwards/swaps
|
Interest rate increases
|
Interest rate decreases
|
Pay floating rate/receive fixed rate
|
Fair value decreases
|
Fair value increases
|
FINANCIAL STATEMENTS
|
FINANCIAL INSTRUMENTS
|
Currency forwards/swaps
|
U.S. dollar strengthens
|
U.S. dollar weakens
|
Receive U.S. dollars/pay foreign currency
|
Fair value increases
|
Fair value decreases
|
Interest rate forwards/swaps interest rate
|
Interest rate increases
|
Interest rate decreases
|
Pay floating rate/receive fixed rate
|
Fair value decreases
|
Fair value increases
|
|
|
|
Currency forwards/swaps
|
U.S. dollar strengthens
|
U.S. dollar weakens
|
Pay U.S. dollars/receive foreign currency
|
Fair value decreases
|
Fair value increases
|
Receive U.S. dollars/pay foreign currency
|
Fair value increases
|
Fair value decreases
|
|
|
|
Commodity derivatives
|
Price increases
|
Price decreases
|
Receive commodity/ pay fixed price
|
Fair value increases
|
Fair value decreases
|
FINANCIAL STATEMENTS
|
FINANCIAL INSTRUMENTS
|
FAIR VALUE OF DERIVATIVES
|
|||||||||||||
|
|
|
|
|
|
||||||||
|
2017
|
|
2016
|
||||||||||
December 31 (in millions)
|
Assets
|
|
Liabilities
|
|
|
Assets
|
|
Liabilities
|
|
||||
|
|
|
|
|
|
||||||||
Derivatives accounted for as hedges
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
1,862
|
|
$
|
148
|
|
|
$
|
3,106
|
|
$
|
210
|
|
Currency exchange contracts
|
160
|
|
70
|
|
|
402
|
|
624
|
|
||||
Other contracts
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
|
$
|
2,021
|
|
$
|
218
|
|
|
$
|
3,508
|
|
$
|
834
|
|
|
|
|
|
|
|
||||||||
Derivatives not accounted for as hedges
|
|
|
|
|
|
||||||||
Interest rate contracts
|
93
|
|
8
|
|
|
62
|
|
20
|
|
||||
Currency exchange contracts
|
1,111
|
|
2,043
|
|
|
1,778
|
|
4,011
|
|
||||
Other contracts
|
139
|
|
91
|
|
|
119
|
|
17
|
|
||||
|
$
|
1,343
|
|
$
|
2,143
|
|
|
$
|
1,958
|
|
$
|
4,048
|
|
|
|
|
|
|
|
||||||||
Gross derivatives recognized in statement of
financial position
|
|
|
|
|
|
||||||||
Gross derivatives
|
3,364
|
|
2,361
|
|
|
5,467
|
|
4,883
|
|
||||
Gross accrued interest
|
469
|
|
(38
|
)
|
|
768
|
|
(24
|
)
|
||||
|
$
|
3,833
|
|
$
|
2,323
|
|
|
$
|
6,234
|
|
$
|
4,859
|
|
|
|
|
|
|
|
||||||||
Amounts offset in statement of financial position
|
|
|
|
|
|
||||||||
Netting adjustments(a)
|
(1,457
|
)
|
(1,456
|
)
|
|
(3,097
|
)
|
(3,094
|
)
|
||||
Cash collateral(b)
|
(1,529
|
)
|
(578
|
)
|
|
(2,025
|
)
|
(1,355
|
)
|
||||
|
$
|
(2,986
|
)
|
$
|
(2,034
|
)
|
|
$
|
(5,121
|
)
|
$
|
(4,449
|
)
|
|
|
|
|
|
|
||||||||
Net derivatives recognized in statement of
financial position
|
|
|
|
|
|
||||||||
Net derivatives
|
847
|
|
289
|
|
|
1,113
|
|
410
|
|
||||
|
|
|
|
|
|
||||||||
Amounts not offset in statement of
financial position
|
|
|
|
|
|
||||||||
Securities held as collateral(c)
|
(405
|
)
|
—
|
|
|
(442
|
)
|
—
|
|
||||
|
|
|
|
|
|
||||||||
Net amount
|
$
|
441
|
|
$
|
289
|
|
|
$
|
671
|
|
$
|
410
|
|
(a)
|
The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts include fair value adjustments related to our own and counterparty non-performance risk. At
December 31, 2017
and
December 31, 2016
, the cumulative adjustment for non-performance risk was
$(1) million
and
$(3) million
, respectively.
|
(b)
|
Excluded excess cash collateral received and posted of
$10 million
and
$255 million
at
December 31, 2017
, respectively, and
$6 million
and
$177 million
at
December 31, 2016
, respectively.
|
(c)
|
Excluded excess securities collateral received of
$16 million
and
zero
at
December 31, 2017
and
December 31, 2016
, respectively.
|
FINANCIAL STATEMENTS
|
FINANCIAL INSTRUMENTS
|
(In millions)
|
Effect on hedging instrument
|
|
Effect on underlying
|
|
Effect on earnings(a)
|
|
|||
|
|
|
|
||||||
2017
|
|
|
|
||||||
Cash flow hedges
|
$
|
199
|
|
$
|
(199
|
)
|
$
|
—
|
|
Fair value hedges
|
(556
|
)
|
371
|
|
(185
|
)
|
|||
Net investment hedges(b)
|
(1,833
|
)
|
1,852
|
|
19
|
|
|||
Economic hedges(c)
|
1,147
|
|
(1,683
|
)
|
(536
|
)
|
|||
Total
|
|
|
$
|
(702
|
)
|
2016
|
|
|
|
||||||
Cash flow hedges
|
$
|
(274
|
)
|
$
|
274
|
|
$
|
1
|
|
Fair value hedges
|
170
|
|
(433
|
)
|
(263
|
)
|
|||
Net investment hedges(b)
|
2,458
|
|
(2,376
|
)
|
82
|
|
|||
Economic hedges(c)
|
(2,132
|
)
|
1,784
|
|
(348
|
)
|
|||
Total
|
|
|
$
|
(528
|
)
|
(a)
|
For cash flow and fair value hedges, the effect on earnings is primarily related to ineffectiveness. For net investment hedges, the effect on earnings is related to ineffectiveness and spot-forward differences.
|
(b)
|
Both non-derivatives and derivatives hedging instruments are included. The carrying value of non-derivative instruments designated as net investment hedges was
$(13,028) million
and
$(13,355) million
at December 31, 2017 and December 31, 2016, respectively. Total pre-tax reclassifications from CTA to gain (loss) was
$125 million
and
$(528) million
in 2017 and 2016, respectively. Total pre-tax reclassifications from CTA to gain (loss) included
$125 million
and
$(529) million
recorded in discontinued operations in 2017 and 2016, respectively.
|
(c)
|
Net effect is substantially offset by the change in fair value of the hedged item that will affect earnings in future periods.
|
CASH FLOW HEDGE ACTIVITY
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
Gain (loss) recognized in AOCI
|
|
Gain (loss) reclassified
from AOCI into earnings
|
||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
4
|
|
$
|
6
|
|
$
|
(1
|
)
|
|
$
|
(27
|
)
|
$
|
(79
|
)
|
$
|
(130
|
)
|
Currency exchange contracts
|
195
|
|
(281
|
)
|
(907
|
)
|
|
176
|
|
(282
|
)
|
(784
|
)
|
||||||
Commodity contracts
|
—
|
|
—
|
|
(5
|
)
|
|
—
|
|
(2
|
)
|
(4
|
)
|
||||||
Total(a)
|
$
|
199
|
|
$
|
(274
|
)
|
$
|
(913
|
)
|
|
$
|
149
|
|
$
|
(364
|
)
|
$
|
(918
|
)
|
(a)
|
Gain (loss) is recorded in “GE Capital revenues from services”, “Interest and other financial charges”, and “Other costs and expenses” in our Statement of Earnings (Loss) when reclassified.
|
FINANCIAL STATEMENTS
|
FINANCIAL INSTRUMENTS
|
FINANCIAL STATEMENTS
|
VARIABLE INTEREST ENTITIES
|
ASSETS AND LIABILITIES OF CONSOLIDATED VIEs
|
||||||||||||
|
|
|
|
|
||||||||
|
|
GE Capital
|
|
|||||||||
|
|
Customer
|
|
|
||||||||
(In millions)
|
GE
|
Notes receivables(a)
|
Other
|
Total
|
|
|||||||
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
||||||||
Financing receivables, net
|
$
|
—
|
|
$
|
—
|
|
$
|
792
|
|
$
|
792
|
|
Current receivables
|
59
|
|
570
|
|
—
|
|
630
|
|
||||
Investment securities
|
—
|
|
—
|
|
918
|
|
918
|
|
||||
Other assets
|
586
|
|
1,182
|
|
1,920
|
|
3,688
|
|
||||
Total
|
$
|
646
|
|
$
|
1,752
|
|
$
|
3,630
|
|
$
|
6,028
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
||||||||
Borrowings
|
$
|
39
|
|
$
|
—
|
|
$
|
1,027
|
|
$
|
1,066
|
|
Non-recourse borrowings
|
—
|
|
669
|
|
16
|
|
685
|
|
||||
Other liabilities
|
345
|
|
1,021
|
|
1,525
|
|
2,891
|
|
||||
Total
|
$
|
384
|
|
$
|
1,690
|
|
$
|
2,568
|
|
$
|
4,642
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
||||||||
Financing receivables, net
|
$
|
—
|
|
$
|
—
|
|
$
|
1,035
|
|
$
|
1,035
|
|
Current receivables
|
57
|
|
670
|
|
—
|
|
727
|
|
||||
Investment securities
|
—
|
|
—
|
|
982
|
|
982
|
|
||||
Other assets
|
492
|
|
1,122
|
|
1,747
|
|
3,361
|
|
||||
Total
|
$
|
549
|
|
$
|
1,792
|
|
$
|
3,764
|
|
$
|
6,105
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
||||||||
Borrowings
|
$
|
1
|
|
$
|
—
|
|
$
|
818
|
|
$
|
819
|
|
Non-recourse borrowings
|
—
|
|
401
|
|
16
|
|
417
|
|
||||
Other liabilities
|
457
|
|
1,378
|
|
1,482
|
|
3,317
|
|
||||
Total
|
$
|
458
|
|
$
|
1,779
|
|
$
|
2,316
|
|
$
|
4,553
|
|
(a)
|
Two
funding entities were established to purchase customer notes receivable from GE,
one
of which is partially funded by third-party debt.
|
FINANCIAL STATEMENTS
|
COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES AND OTHER LOSS CONTINGENCIES
|
FINANCIAL STATEMENTS
|
COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES AND OTHER LOSS CONTINGENCIES
|
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Balance at January 1
|
$
|
1,920
|
|
$
|
1,723
|
|
$
|
1,199
|
|
Current-year provisions
|
985
|
|
791
|
|
649
|
|
|||
Expenditures
|
(827
|
)
|
(729
|
)
|
(718
|
)
|
|||
Other changes(a)
|
286
|
|
135
|
|
593
|
|
|||
Balance at December 31
|
$
|
2,364
|
|
$
|
1,920
|
|
$
|
1,723
|
|
(a)
|
Included
$634 million
related to Alstom acquisition in 2015, and
$172 million
related to Baker Hughes and LM Wind Power acquisitions in 2017.
|
ROLLFORWARD OF THE RESERVE
|
|
|
||||
|
|
|||||
(In millions)
|
2017
|
|
2016
|
|
||
|
|
|
||||
Balance at January 1
|
$
|
626
|
|
$
|
875
|
|
Provision
|
51
|
|
91
|
|
||
Claim resolutions / rescissions
|
(261
|
)
|
(340
|
)
|
||
Balance at December 31
|
$
|
416
|
|
$
|
626
|
|
FINANCIAL STATEMENTS
|
COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES AND OTHER LOSS CONTINGENCIES
|
FINANCIAL STATEMENTS
|
CASH FLOWS INFORMATION
|
For the years ended December 31 (In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
All other operating activities
|
|
|
|
||||||
(Gains) losses on purchases and sales of business interests(a)
|
$
|
(656
|
)
|
$
|
(3,701
|
)
|
$
|
(1,020
|
)
|
Contract assets (net)(b)
|
(3,988
|
)
|
(3,929
|
)
|
(1,919
|
)
|
|||
Income taxes(c)
|
110
|
|
(2,752
|
)
|
1,671
|
|
|||
Principal pension plans(d)
|
1,709
|
|
3,071
|
|
4,265
|
|
|||
Other postretirement benefit plans(e)
|
(888
|
)
|
(716
|
)
|
(503
|
)
|
|||
Intangible asset amortization
|
2,154
|
|
2,011
|
|
1,514
|
|
|||
Restructuring and other charges(f)
|
3,162
|
|
1,702
|
|
637
|
|
|||
Deferred income
|
55
|
|
(371
|
)
|
(86
|
)
|
|||
Net earnings (loss) attributable to noncontrolling interests
|
(274
|
)
|
(279
|
)
|
83
|
|
|||
Other(g)
|
(562
|
)
|
(2,474
|
)
|
(2,559
|
)
|
|||
|
$
|
822
|
|
$
|
(7,438
|
)
|
$
|
2,083
|
|
All other investing activities
|
|
|
|
||||||
Derivative settlements (net)(h)
|
$
|
(1,142
|
)
|
$
|
—
|
|
$
|
—
|
|
Investments in intangible assets (net)
|
(321
|
)
|
(499
|
)
|
(158
|
)
|
|||
Investments in associated companies (net)
|
(226
|
)
|
(420
|
)
|
(182
|
)
|
|||
Other investments (net)
|
(272
|
)
|
(175
|
)
|
(181
|
)
|
|||
Other(i)
|
(136
|
)
|
(558
|
)
|
(32
|
)
|
|||
|
$
|
(2,097
|
)
|
$
|
(1,652
|
)
|
$
|
(553
|
)
|
Net dispositions (purchases) of GE shares for treasury
|
|
|
|
||||||
Open market purchases under share repurchase program(j)
|
$
|
(3,506
|
)
|
$
|
(22,581
|
)
|
$
|
(2,709
|
)
|
Other purchases
|
(67
|
)
|
(399
|
)
|
(58
|
)
|
|||
Dispositions
|
1,021
|
|
1,550
|
|
1,668
|
|
|||
|
$
|
(2,550
|
)
|
$
|
(21,429
|
)
|
$
|
(1,099
|
)
|
(a)
|
Included pre-tax gains on sales of businesses reclassified to Proceeds from principal business dispositions within Cash flows from investing activities of
$(1,943)
million for Water in 2017,
$(3,136) million
for Appliances and
$(398) million
for GE Asset Management in
2016
, and
$(623) million
for Signaling in
2015
, partially offset by a valuation allowance on businesses classified as held for sale of
$1,378
million in
2017
. See Notes 2 and 17.
|
(b)
|
Contract assets are presented net of related billings in excess of revenues on our long-term product service agreements. See Note 9.
|
(c)
|
Reflected the effects of current tax expense (benefit) of
$2,810 million
,
$(140) million
and
$3,307 million
and net cash paid during the year for income taxes of
$(2,700) million
,
$(2,612) million
and
$(1,636) million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively. Cash flows effects of deferred tax provisions (benefits) are shown separately within Cash flows from operating activities in the Statement of Cash Flows. See Note 13.
|
(d)
|
Reflected the effects of pension costs of
$3,687 million
,
$3,623 million
and
$4,498 million
and employer contributions of
$(1,978) million
,
$(552) million
and
$(233) million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively. 2016 employer contributions included GE Pension Trust funding of
$(330) million
representing net sale proceeds associated with the sale of GE Asset Management. See Note12.
|
(e)
|
Reflected the effects of other postretirement plans costs of $
369
million, $
489
million and $
547
million and employer contributions of $
(1,257)
million, $
(1,205)
million and $
(1,050)
million for the years ended
December 31, 2017
,
2016
and
2015
, respectively. See Note 12.
|
(f)
|
Reflected the effects of restructuring and other charges of $
5,158
million (which included pre-tax impairments related to Power Conversion goodwill of
$1,164 million
and a power plant asset of
$315 million
), $
3,384
million and $
1,671
million and restructuring and other cash expenditures of $
(1,996)
million, $
(1,682)
million and $
(1,034)
million for the years ended
December 31, 2017
,
2016
and
2015
, respectively. Excludes non-cash adjustments reflected as Depreciation and amortization of property, plant and equipment in the Statement of Cash Flows.
|
(g)
|
Included other non-cash adjustments to net income, such as write-downs of assets and the impacts of acquisition accounting and changes in other assets and other liabilities classified as operating activities.
|
(h)
|
The classification of the settlement of derivative instruments was corrected from operating cash flows to investing cash flows in 2017. Such settlements of
$178 million
and
$(199) million
in 2016 and 2015, respectively, were not reclassified and corrected in investing cash flows in those periods as they were not considered material.
|
(i)
|
Primarily included cash collateral held on long-term financing arrangements in 2016.
|
(j)
|
Included
$(11,370) million
paid under ASR agreements in 2016.
|
FINANCIAL STATEMENTS
|
CASH FLOWS INFORMATION
|
For the years ended December 31 (In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
All other operating activities
|
|
|
|
||||||
Cash collateral on derivative contracts
|
$
|
131
|
|
$
|
(428
|
)
|
$
|
(1,936
|
)
|
Increase (decrease) in other liabilities
|
(1,566
|
)
|
(2,616
|
)
|
4,860
|
|
|||
Other(a)
|
13,237
|
|
(10
|
)
|
2,163
|
|
|||
|
$
|
11,802
|
|
$
|
(3,054
|
)
|
$
|
5,087
|
|
Net decrease (increase) in GE Capital financing receivables
|
|
|
|
||||||
Increase in loans to customers
|
$
|
(41,393
|
)
|
$
|
(65,055
|
)
|
$
|
(65,306
|
)
|
Principal collections from customers - loans
|
43,613
|
|
60,375
|
|
60,292
|
|
|||
Investment in equipment for financing leases
|
(585
|
)
|
(690
|
)
|
(417
|
)
|
|||
Principal collections from customers - financing leases
|
1,011
|
|
856
|
|
734
|
|
|||
Sales of financing receivables
|
251
|
|
3,235
|
|
4,923
|
|
|||
|
$
|
2,897
|
|
$
|
(1,279
|
)
|
$
|
226
|
|
All other investing activities
|
|
|
|
||||||
Purchases of investment securities
|
$
|
(2,867
|
)
|
$
|
(18,588
|
)
|
$
|
(7,790
|
)
|
Dispositions and maturities of investment securities
|
10,001
|
|
7,343
|
|
9,587
|
|
|||
Decrease (increase) in other assets - investments
|
(8,457
|
)
|
9,202
|
|
(1,439
|
)
|
|||
Other(b)
|
4,375
|
|
3,690
|
|
(5,025
|
)
|
|||
|
$
|
3,052
|
|
$
|
1,647
|
|
$
|
(4,667
|
)
|
Repayments and other reductions (maturities longer than 90 days)
|
|
|
|
||||||
Short-term (91 to 365 days)
|
$
|
(18,591
|
)
|
$
|
(44,519
|
)
|
$
|
(42,110
|
)
|
Long-term (longer than one year)
|
(2,054
|
)
|
(13,418
|
)
|
(2,455
|
)
|
|||
Principal payments - non-recourse, leveraged leases
|
(362
|
)
|
(348
|
)
|
(283
|
)
|
|||
|
$
|
(21,007
|
)
|
$
|
(58,285
|
)
|
$
|
(44,848
|
)
|
All other financing activities
|
|
|
|
||||||
Proceeds from sales of investment contracts
|
$
|
10
|
|
$
|
19
|
|
$
|
163
|
|
Redemption of investment contracts
|
(344
|
)
|
(346
|
)
|
(1,235
|
)
|
|||
Other
|
54
|
|
(800
|
)
|
(290
|
)
|
|||
|
$
|
(280
|
)
|
$
|
(1,127
|
)
|
$
|
(1,362
|
)
|
(a)
|
Primarily included non-cash adjustments for insurance-related charges recorded in the fourth quarter of 2017.
|
(b)
|
Primarily included net activity related to settlements between our continuing operations (primarily our treasury operations) and businesses in discontinued operations.
|
FINANCIAL STATEMENTS
|
INTERCOMPANY TRANSACTIONS
|
•
|
GE Capital dividends to GE,
|
•
|
GE Capital working capital solutions to optimize GE cash management,
|
•
|
GE Capital enabled GE industrial orders, including related GE guarantees to GE Capital,
|
•
|
GE Capital financing of GE long-term receivables, and
|
•
|
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
|
•
|
Settlements of tax liabilities, and
|
•
|
Various investments, loans and allocations of GE corporate overhead costs.
|
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Cash from (used for) operating activities-continuing operations
|
|
|
|
||||||
Combined
|
$
|
13,414
|
|
$
|
28,408
|
|
$
|
17,891
|
|
GE current receivables sold to GE Capital
|
1,800
|
|
697
|
|
(856
|
)
|
|||
GE Capital dividends to GE
|
(4,016
|
)
|
(20,095
|
)
|
(4,300
|
)
|
|||
Other reclassifications and eliminations(a)
|
196
|
|
(2,911
|
)
|
(879
|
)
|
|||
Total cash from (used for) operating activities-continuing operations
|
$
|
11,394
|
|
$
|
6,099
|
|
$
|
11,856
|
|
Cash from (used for) investing activities-continuing operations
|
|
|
|
||||||
Combined
|
$
|
(46
|
)
|
$
|
58,134
|
|
$
|
59,516
|
|
GE current receivables sold to GE Capital
|
(1,721
|
)
|
(230
|
)
|
1,261
|
|
|||
GE Capital long-term loans to GE
|
7,271
|
|
—
|
|
—
|
|
|||
GE Capital short-term loan to GE
|
(1,329
|
)
|
1,329
|
|
—
|
|
|||
Other reclassifications and eliminations(a)
|
(235
|
)
|
3,380
|
|
836
|
|
|||
Total cash from (used for) investing activities-continuing operations
|
$
|
3,940
|
|
$
|
62,613
|
|
$
|
61,613
|
|
Cash from (used for) financing activities-continuing operations
|
|
|
|
||||||
Combined
|
$
|
(19,089
|
)
|
$
|
(107,750
|
)
|
$
|
(73,484
|
)
|
GE current receivables sold to GE Capital
|
(79
|
)
|
(467
|
)
|
(405
|
)
|
|||
GE Capital dividends to GE
|
4,016
|
|
20,095
|
|
4,300
|
|
|||
GE Capital long-term loans to GE
|
(7,271
|
)
|
—
|
|
—
|
|
|||
GE Capital short-term loan to GE
|
1,329
|
|
(1,329
|
)
|
—
|
|
|||
Other reclassifications and eliminations(a)
|
39
|
|
(469
|
)
|
42
|
|
|||
Total cash from (used for) financing activities-continuing operations
|
$
|
(21,055
|
)
|
$
|
(89,920
|
)
|
$
|
(69,547
|
)
|
(a)
|
Includes eliminations of other cash flows activities, including those related to GE Capital enabled GE industrial orders, long-term receivables financing, various investments, loans and allocations of GE corporate overhead costs.
|
FINANCIAL STATEMENTS
|
OPERATING SEGMENTS
|
FINANCIAL STATEMENTS
|
OPERATING SEGMENTS
|
REVENUES
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Total revenues(a)
|
|
Intersegment revenues(b)
|
|
External revenues
|
||||||||||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Power
|
$
|
35,990
|
|
$
|
36,795
|
|
$
|
28,903
|
|
|
$
|
1,392
|
|
$
|
1,330
|
|
$
|
1,574
|
|
|
$
|
34,598
|
|
$
|
35,465
|
|
$
|
27,328
|
|
Renewable Energy
|
10,280
|
|
9,033
|
|
6,273
|
|
|
69
|
|
11
|
|
12
|
|
|
10,211
|
|
9,022
|
|
6,261
|
|
|||||||||
Oil & Gas
|
17,231
|
|
12,898
|
|
16,450
|
|
|
646
|
|
383
|
|
387
|
|
|
16,584
|
|
12,515
|
|
16,063
|
|
|||||||||
Aviation
|
27,375
|
|
26,261
|
|
24,660
|
|
|
585
|
|
730
|
|
418
|
|
|
26,790
|
|
25,530
|
|
24,242
|
|
|||||||||
Healthcare
|
19,116
|
|
18,291
|
|
17,639
|
|
|
18
|
|
15
|
|
7
|
|
|
19,098
|
|
18,276
|
|
17,633
|
|
|||||||||
Transportation
|
4,178
|
|
4,713
|
|
5,933
|
|
|
10
|
|
1
|
|
1
|
|
|
4,168
|
|
4,713
|
|
5,932
|
|
|||||||||
Lighting(c)
|
1,987
|
|
4,823
|
|
8,751
|
|
|
31
|
|
28
|
|
22
|
|
|
1,956
|
|
4,795
|
|
8,729
|
|
|||||||||
Total industrial segment revenues
|
116,157
|
|
112,814
|
|
108,609
|
|
|
2,751
|
|
2,498
|
|
2,421
|
|
|
113,406
|
|
110,316
|
|
106,188
|
|
|||||||||
Capital
|
9,070
|
|
10,905
|
|
10,801
|
|
|
1,620
|
|
1,288
|
|
1,151
|
|
|
7,451
|
|
9,617
|
|
9,650
|
|
|||||||||
Corporate items
and eliminations
|
(3,135
|
)
|
(26
|
)
|
(2,024
|
)
|
|
(4,371
|
)
|
(3,786
|
)
|
(3,572
|
)
|
|
1,236
|
|
3,760
|
|
1,548
|
|
|||||||||
Total
|
$
|
122,092
|
|
$
|
123,693
|
|
$
|
117,386
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
122,092
|
|
$
|
123,693
|
|
$
|
117,386
|
|
(a)
|
Revenues of GE businesses include income from sales of goods and services to customers and other income.
|
(b)
|
Sales from one component to another generally are priced at equivalent commercial selling prices.
|
(c)
|
Lighting segment included Appliances for the year ended December 31, 2015, and through its disposition in the second quarter of 2016.
|
PROFIT AND EARNINGS
|
|
|
|
||||||
|
|
|
|
||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
Power
|
$
|
2,786
|
|
$
|
5,091
|
|
$
|
4,772
|
|
Renewable Energy
|
727
|
|
576
|
|
431
|
|
|||
Oil & Gas
|
220
|
|
1,392
|
|
2,427
|
|
|||
Aviation
|
6,642
|
|
6,115
|
|
5,507
|
|
|||
Healthcare
|
3,448
|
|
3,161
|
|
2,882
|
|
|||
Transportation
|
824
|
|
1,064
|
|
1,273
|
|
|||
Lighting(a)
|
93
|
|
199
|
|
674
|
|
|||
Total industrial segment profit
|
14,740
|
|
17,598
|
|
17,966
|
|
|||
Capital
|
(6,765
|
)
|
(1,251
|
)
|
(7,983
|
)
|
|||
Total segment profit
|
7,975
|
|
16,347
|
|
9,983
|
|
|||
Corporate items and eliminations
|
(7,871
|
)
|
(4,226
|
)
|
(5,108
|
)
|
|||
GE interest and other financial charges
|
(2,753
|
)
|
(2,026
|
)
|
(1,706
|
)
|
|||
GE provision for income taxes
|
(3,259
|
)
|
(967
|
)
|
(1,506
|
)
|
|||
Earnings (loss) from continuing operations attributable to GE common shareowners
|
(5,907
|
)
|
9,128
|
|
1,663
|
|
|||
Earnings (loss) from discontinued operations, net of taxes
|
(309
|
)
|
(954
|
)
|
(7,495
|
)
|
|||
Less net earnings (loss) attributable to noncontrolling interests, discontinued operations
|
6
|
|
(1
|
)
|
312
|
|
|||
Earnings (loss) from discontinued operations, net of taxes and noncontrolling interests
|
(315
|
)
|
(952
|
)
|
(7,807
|
)
|
|||
Consolidated net earnings (loss) attributable to GE common shareowners
|
$
|
(6,222
|
)
|
$
|
8,176
|
|
$
|
(6,145
|
)
|
(a)
|
Lighting segment included Appliances for the year ended December 31, 2015, and through its disposition in the second quarter of 2016.
|
FINANCIAL STATEMENTS
|
OPERATING SEGMENTS
|
|
Assets(a)
|
|
Property, plant and
equipment additions(b) |
|
Depreciation and amortization
|
||||||||||||||||||||||||
|
At December 31
|
|
For the years ended December 31
|
|
For the years ended December 31
|
||||||||||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Power
|
$
|
71,133
|
|
$
|
71,678
|
|
$
|
68,793
|
|
|
$
|
1,072
|
|
$
|
963
|
|
$
|
3,195
|
|
|
$
|
1,358
|
|
$
|
1,549
|
|
$
|
1,035
|
|
Renewable Energy
|
10,813
|
|
8,794
|
|
9,468
|
|
|
624
|
|
166
|
|
999
|
|
|
259
|
|
183
|
|
116
|
|
|||||||||
Oil & Gas
|
59,784
|
|
24,615
|
|
26,126
|
|
|
5,469
|
|
284
|
|
422
|
|
|
1,026
|
|
529
|
|
596
|
|
|||||||||
Aviation
|
41,753
|
|
38,899
|
|
34,524
|
|
|
1,426
|
|
1,328
|
|
1,260
|
|
|
979
|
|
900
|
|
855
|
|
|||||||||
Healthcare
|
28,772
|
|
28,639
|
|
28,162
|
|
|
393
|
|
432
|
|
284
|
|
|
806
|
|
785
|
|
799
|
|
|||||||||
Transportation
|
4,490
|
|
4,288
|
|
4,368
|
|
|
128
|
|
108
|
|
202
|
|
|
135
|
|
168
|
|
188
|
|
|||||||||
Lighting(c)
|
724
|
|
1,659
|
|
4,702
|
|
|
34
|
|
160
|
|
275
|
|
|
86
|
|
173
|
|
103
|
|
|||||||||
Capital(d)
|
156,716
|
|
187,804
|
|
316,069
|
|
|
3,680
|
|
3,769
|
|
7,570
|
|
|
2,343
|
|
2,515
|
|
2,584
|
|
|||||||||
Corporate items
and eliminations(e)
|
3,761
|
|
(1,192
|
)
|
858
|
|
|
(100
|
)
|
94
|
|
(297
|
)
|
|
367
|
|
337
|
|
231
|
|
|||||||||
Total
|
$
|
377,945
|
|
$
|
365,183
|
|
$
|
493,071
|
|
|
$
|
12,728
|
|
$
|
7,305
|
|
$
|
13,911
|
|
|
$
|
7,358
|
|
$
|
7,139
|
|
$
|
6,508
|
|
(a)
|
Total assets of Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation and Capital operating segments at December 31, 2017, include investments in and advances to associated companies of
$1,170 million
,
$89 million
,
$476 million
,
$1,900 million
,
$392 million
,
$56 million
and
$7,294 million
, respectively. Lighting held an insignificant balance as of
December 31, 2017
. Investments in and advances to associated companies contributed approximately
$81 million
,
$(4) million
,
$(5) million
,
$110 million
,
$17 million
,
$(1) million
,
$2 million
and
$(31) million
to segment pre-tax income of Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation, Lighting and Capital operating segments, respectively.
|
(b)
|
Additions to property, plant and equipment include amounts relating to principal businesses purchased.
|
(c)
|
Lighting segment included Appliances for the year ended December 31, 2015.
|
(d)
|
Includes Capital discontinued operations.
|
(e)
|
Includes deferred income taxes that are presented as assets for purposes of our consolidating balance sheet presentation.
|
|
Interest and other financial charges
|
|
Benefit (provision) for income taxes
|
||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Capital
|
$
|
3,145
|
|
$
|
3,790
|
|
$
|
2,301
|
|
|
$
|
6,302
|
|
$
|
1,431
|
|
$
|
(4,979
|
)
|
Corporate items and eliminations(a)
|
1,724
|
|
1,234
|
|
1,162
|
|
|
(3,259
|
)
|
(967
|
)
|
(1,506
|
)
|
||||||
Total
|
$
|
4,869
|
|
$
|
5,025
|
|
$
|
3,463
|
|
|
$
|
3,043
|
|
$
|
464
|
|
$
|
(6,485
|
)
|
(a)
|
Included amounts for Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation and Lighting, for which our measure of segment profit excludes interest and other financial charges and income taxes.
|
FINANCIAL STATEMENTS
|
COST INFORMATION
|
|
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|||
|
|
|
|
||||||
GE
|
$
|
1,783
|
|
$
|
1,686
|
|
$
|
1,397
|
|
GE Capital
|
105
|
|
91
|
|
107
|
|
|||
|
1,888
|
|
1,777
|
|
1,504
|
|
|||
Eliminations
|
(143
|
)
|
(126
|
)
|
(169
|
)
|
|||
Total
|
$
|
1,746
|
|
$
|
1,651
|
|
$
|
1,335
|
|
(In millions)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
|||||
|
|
|
|
|
|
||||||||||
GE
|
$
|
1,189
|
|
$
|
1,011
|
|
$
|
849
|
|
$
|
736
|
|
$
|
630
|
|
GE Capital
|
27
|
|
23
|
|
22
|
|
22
|
|
56
|
|
|||||
|
1,216
|
|
1,035
|
|
871
|
|
758
|
|
686
|
|
|||||
Eliminations
|
(135
|
)
|
(127
|
)
|
(123
|
)
|
(120
|
)
|
(108
|
)
|
|||||
Total
|
$
|
1,081
|
|
$
|
908
|
|
$
|
748
|
|
$
|
638
|
|
$
|
578
|
|
FINANCIAL STATEMENTS
|
GUARANTOR FINANCIAL INFORMATION
|
•
|
General Electric Company (the Parent Company Guarantor)
- prepared with investments in subsidiaries accounted for under the equity method of accounting and excluding any inter-segment eliminations;
|
•
|
GE Capital International Funding Company Unlimited Company (the Subsidiary Issuer)
– finance subsidiary for debt;
|
•
|
GE Capital International Holdings Limited (GECIHL)
(the Subsidiary Guarantor)
- prepared with investments in non-guarantor subsidiaries accounted for under the equity method of accounting;
|
•
|
Non-Guarantor Subsidiaries
- prepared on an aggregated basis excluding any elimination or consolidation adjustments and includes predominantly all non-cash adjustments for cash flows;
|
•
|
Consolidating Adjustments
- adjusting entries necessary to consolidate the Parent Company Guarantor with the Subsidiary Issuer, the Subsidiary Guarantor and Non-Guarantor Subsidiaries; and
|
•
|
Consolidated
- prepared on a consolidated basis.
|
FINANCIAL STATEMENTS
|
GUARANTOR FINANCIAL INFORMATION
|
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2017
|
||||||||||||||||||
|
||||||||||||||||||
(in millions)
|
Parent
Company
Guarantor
|
|
Subsidiary
Issuer
|
|
Subsidiary
Guarantor
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Revenues and other income
|
|
|
|
|
|
|
||||||||||||
Sales of goods and services
|
$
|
35,551
|
|
$
|
—
|
|
$
|
—
|
|
$
|
161,158
|
|
$
|
(83,518
|
)
|
$
|
113,192
|
|
Other income
|
3,769
|
|
—
|
|
—
|
|
76,453
|
|
(78,597
|
)
|
1,625
|
|
||||||
Equity in earnings (loss) of affiliates
|
2,014
|
|
—
|
|
1,938
|
|
109,525
|
|
(113,477
|
)
|
—
|
|
||||||
GE Capital revenues from services
|
—
|
|
703
|
|
800
|
|
9,888
|
|
(4,115
|
)
|
7,276
|
|
||||||
Total revenues and other income
|
41,335
|
|
703
|
|
2,737
|
|
357,024
|
|
(279,706
|
)
|
122,092
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Costs and expenses
|
|
|
|
|
|
|
||||||||||||
Interest and other financial charges
|
4,396
|
|
652
|
|
2,006
|
|
4,928
|
|
(7,112
|
)
|
4,869
|
|
||||||
Other costs and expenses
|
36,013
|
|
—
|
|
18
|
|
175,648
|
|
(85,665
|
)
|
126,014
|
|
||||||
Total costs and expenses
|
40,409
|
|
653
|
|
2,023
|
|
180,576
|
|
(92,778
|
)
|
130,883
|
|
||||||
Earnings (loss) from continuing
operations before income taxes
|
926
|
|
50
|
|
714
|
|
176,447
|
|
(186,929
|
)
|
(8,791
|
)
|
||||||
Benefit (provision) for income taxes
|
(2,896
|
)
|
(5
|
)
|
115
|
|
5,921
|
|
(92
|
)
|
3,043
|
|
||||||
Earnings (loss) from continuing operations
|
(1,969
|
)
|
45
|
|
829
|
|
182,368
|
|
(187,020
|
)
|
(5,748
|
)
|
||||||
Earnings (loss) from discontinued
operations, net of taxes
|
(319
|
)
|
—
|
|
41
|
|
4
|
|
(35
|
)
|
(309
|
)
|
||||||
Net earnings (loss)
|
(2,288
|
)
|
45
|
|
870
|
|
182,372
|
|
(187,055
|
)
|
(6,056
|
)
|
||||||
Less net earnings (loss) attributable to
noncontrolling interests
|
—
|
|
—
|
|
—
|
|
(137
|
)
|
(133
|
)
|
(270
|
)
|
||||||
Net earnings (loss) attributable to
the Company
|
(2,288
|
)
|
45
|
|
870
|
|
182,509
|
|
(186,922
|
)
|
(5,786
|
)
|
||||||
Other comprehensive income
|
4,202
|
|
0
|
|
567
|
|
(7,474
|
)
|
6,908
|
|
4,202
|
|
||||||
Comprehensive income (loss) attributable
to the Company
|
$
|
1,914
|
|
$
|
45
|
|
$
|
1,436
|
|
$
|
175,035
|
|
$
|
(180,014
|
)
|
$
|
(1,584
|
)
|
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2016
|
||||||||||||||||||
|
||||||||||||||||||
(in millions)
|
Parent
Company
Guarantor
|
|
Subsidiary
Issuer
|
|
Subsidiary
Guarantor
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Revenues and other income
|
|
|
|
|
|
|
||||||||||||
Sales of goods and services
|
$
|
40,315
|
|
$
|
—
|
|
$
|
—
|
|
$
|
152,047
|
|
$
|
(81,971
|
)
|
$
|
110,391
|
|
Other income
|
10,949
|
|
—
|
|
—
|
|
63,363
|
|
(70,308
|
)
|
4,005
|
|
||||||
Equity in earnings (loss) of affiliates
|
1,397
|
|
—
|
|
1,542
|
|
116,897
|
|
(119,836
|
)
|
—
|
|
||||||
GE Capital revenues from services
|
—
|
|
897
|
|
1,419
|
|
12,994
|
|
(6,012
|
)
|
9,297
|
|
||||||
Total revenues and other income
|
52,661
|
|
897
|
|
2,961
|
|
345,301
|
|
(278,127
|
)
|
123,693
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Costs and expenses
|
|
|
|
|
|
|
||||||||||||
Interest and other financial charges
|
3,505
|
|
831
|
|
2,567
|
|
5,429
|
|
(7,308
|
)
|
5,025
|
|
||||||
Other costs and expenses
|
41,972
|
|
—
|
|
143
|
|
168,245
|
|
(100,722
|
)
|
109,638
|
|
||||||
Total costs and expenses
|
45,478
|
|
831
|
|
2,711
|
|
173,674
|
|
(108,030
|
)
|
114,663
|
|
||||||
Earnings (loss) from continuing
operations before income taxes
|
7,183
|
|
66
|
|
250
|
|
171,627
|
|
(170,097
|
)
|
9,030
|
|
||||||
Benefit (provision) for income taxes
|
2,539
|
|
(10
|
)
|
(105
|
)
|
(1,911
|
)
|
(49
|
)
|
464
|
|
||||||
Earnings (loss) from continuing operations
|
9,723
|
|
56
|
|
145
|
|
169,717
|
|
(170,146
|
)
|
9,494
|
|
||||||
Earnings (loss) from discontinued
operations, net of taxes
|
(891
|
)
|
—
|
|
(1,927
|
)
|
351
|
|
1,514
|
|
(954
|
)
|
||||||
Net earnings (loss)
|
8,831
|
|
56
|
|
(1,782
|
)
|
170,067
|
|
(168,632
|
)
|
8,540
|
|
||||||
Less net earnings (loss) attributable to
noncontrolling interests
|
—
|
|
—
|
|
—
|
|
(149
|
)
|
(142
|
)
|
(291
|
)
|
||||||
Net earnings (loss) attributable to
the Company
|
8,831
|
|
56
|
|
(1,782
|
)
|
170,216
|
|
(168,490
|
)
|
8,831
|
|
||||||
Other comprehensive income
|
(2,069
|
)
|
(12
|
)
|
1,126
|
|
(3,393
|
)
|
2,279
|
|
(2,069
|
)
|
||||||
Comprehensive income (loss) attributable
to the Company
|
$
|
6,762
|
|
$
|
44
|
|
$
|
(657
|
)
|
$
|
166,823
|
|
$
|
(166,211
|
)
|
$
|
6,762
|
|
FINANCIAL STATEMENTS
|
GUARANTOR FINANCIAL INFORMATION
|
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2015
|
||||||||||||||||||
|
||||||||||||||||||
(in millions)
|
Parent
Company
Guarantor
|
|
Subsidiary
Issuer
|
|
Subsidiary
Guarantor
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Revenues and other income
|
|
|
|
|
|
|
||||||||||||
Sales of goods and services
|
$
|
43,945
|
|
$
|
—
|
|
$
|
—
|
|
$
|
139,158
|
|
$
|
(77,294
|
)
|
$
|
105,809
|
|
Other income
|
2,725
|
|
—
|
|
—
|
|
31,146
|
|
(31,644
|
)
|
2,227
|
|
||||||
Equity in earnings (loss) of affiliates
|
1,815
|
|
—
|
|
437
|
|
389,796
|
|
(392,048
|
)
|
—
|
|
||||||
GE Capital revenues from services
|
—
|
|
250
|
|
(460
|
)
|
36,909
|
|
(27,349
|
)
|
9,350
|
|
||||||
Total revenues and other income
|
48,485
|
|
250
|
|
(23
|
)
|
597,009
|
|
(528,335
|
)
|
117,386
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Costs and expenses
|
|
|
|
|
|
|
||||||||||||
Interest and other financial charges
|
3,127
|
|
232
|
|
284
|
|
9,037
|
|
(9,216
|
)
|
3,463
|
|
||||||
Other costs and expenses
|
45,308
|
|
—
|
|
3
|
|
163,220
|
|
(102,795
|
)
|
105,737
|
|
||||||
Total costs and expenses
|
48,435
|
|
232
|
|
287
|
|
172,257
|
|
(112,011
|
)
|
109,200
|
|
||||||
Earnings (loss) from continuing
operations before income taxes
|
50
|
|
18
|
|
(310
|
)
|
424,752
|
|
(416,324
|
)
|
8,186
|
|
||||||
Benefit (provision) for income taxes
|
1,314
|
|
(2
|
)
|
(9
|
)
|
(11,426
|
)
|
3,639
|
|
(6,485
|
)
|
||||||
Earnings (loss) from continuing operations
|
1,364
|
|
15
|
|
(319
|
)
|
413,326
|
|
(412,686
|
)
|
1,700
|
|
||||||
Earnings (loss) from discontinued
operations, net of taxes
|
(7,490
|
)
|
—
|
|
483
|
|
(738
|
)
|
250
|
|
(7,495
|
)
|
||||||
Net earnings (loss)
|
(6,126
|
)
|
15
|
|
164
|
|
412,588
|
|
(412,436
|
)
|
(5,795
|
)
|
||||||
Less net earnings (loss) attributable to
noncontrolling interests
|
—
|
|
—
|
|
—
|
|
249
|
|
82
|
|
332
|
|
||||||
Net earnings (loss) attributable to
the Company
|
(6,126
|
)
|
15
|
|
164
|
|
412,339
|
|
(412,518
|
)
|
(6,126
|
)
|
||||||
Other comprehensive income
|
1,644
|
|
12
|
|
1,377
|
|
(4,843
|
)
|
3,454
|
|
1,644
|
|
||||||
Comprehensive income (loss) attributable
to the Company
|
$
|
(4,483
|
)
|
$
|
27
|
|
$
|
1,542
|
|
$
|
407,496
|
|
$
|
(409,065
|
)
|
$
|
(4,483
|
)
|
FINANCIAL STATEMENTS
|
GUARANTOR FINANCIAL INFORMATION
|
CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION
|
||||||||||||||||||
DECEMBER 31, 2017
|
||||||||||||||||||
|
||||||||||||||||||
(In millions)
|
Parent
Company
Guarantor
|
|
Subsidiary
Issuer
|
|
Subsidiary
Guarantor
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
||||||||||||
Cash and equivalents
|
$
|
3,275
|
|
$
|
—
|
|
$
|
3
|
|
$
|
40,768
|
|
$
|
(747
|
)
|
$
|
43,299
|
|
Investment securities
|
1
|
|
—
|
|
—
|
|
39,809
|
|
(1,113
|
)
|
38,696
|
|
||||||
Receivables - net
|
50,923
|
|
17,316
|
|
32,381
|
|
87,776
|
|
(147,321
|
)
|
41,076
|
|
||||||
Inventories
|
4,829
|
|
—
|
|
—
|
|
22,246
|
|
(5,152
|
)
|
21,923
|
|
||||||
Property, plant and equipment - net
|
5,808
|
|
—
|
|
—
|
|
48,516
|
|
(450
|
)
|
53,874
|
|
||||||
Investment in subsidiaries(a)
|
289,469
|
|
—
|
|
77,488
|
|
715,936
|
|
(1,082,893
|
)
|
—
|
|
||||||
Goodwill and intangible assets
|
8,014
|
|
—
|
|
—
|
|
90,226
|
|
6,002
|
|
104,242
|
|
||||||
All other assets
|
30,688
|
|
16
|
|
32
|
|
237,231
|
|
(199,044
|
)
|
68,923
|
|
||||||
Assets of discontinued operations
|
—
|
|
—
|
|
—
|
|
—
|
|
5,912
|
|
5,912
|
|
||||||
Total assets
|
$
|
393,008
|
|
$
|
17,332
|
|
$
|
109,904
|
|
$
|
1,282,507
|
|
$
|
(1,424,806
|
)
|
$
|
377,945
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and equity
|
|
|
|
|
|
|
||||||||||||
Short-term borrowings
|
$
|
191,807
|
|
$
|
—
|
|
$
|
46,033
|
|
$
|
22,603
|
|
$
|
(236,407
|
)
|
$
|
24,036
|
|
Accounts payable
|
7,930
|
|
—
|
|
—
|
|
77,507
|
|
(70,284
|
)
|
15,153
|
|
||||||
Other current liabilities
|
11,408
|
|
8
|
|
3
|
|
26,666
|
|
126
|
|
38,211
|
|
||||||
Long-term and non-recourse borrowings
|
71,023
|
|
16,632
|
|
34,730
|
|
55,367
|
|
(67,197
|
)
|
110,556
|
|
||||||
All other liabilities
|
43,078
|
|
475
|
|
128
|
|
67,845
|
|
(7,627
|
)
|
103,899
|
|
||||||
Liabilities of discontinued operations
|
—
|
|
—
|
|
—
|
|
—
|
|
706
|
|
706
|
|
||||||
Total Liabilities
|
325,247
|
|
17,116
|
|
80,894
|
|
249,988
|
|
(380,684
|
)
|
292,561
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Redeemable noncontrolling interests
|
—
|
|
—
|
|
—
|
|
2,627
|
|
772
|
|
3,399
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
GE shareowners' equity
|
67,761
|
|
216
|
|
29,010
|
|
1,028,337
|
|
(1,061,061
|
)
|
64,263
|
|
||||||
Noncontrolling interests
|
—
|
|
—
|
|
—
|
|
1,556
|
|
16,167
|
|
17,723
|
|
||||||
Total equity
|
67,761
|
|
216
|
|
29,010
|
|
1,029,892
|
|
(1,044,894
|
)
|
81,986
|
|
||||||
Total liabilities, redeemable
noncontrolling interests and equity
|
$
|
393,008
|
|
$
|
17,332
|
|
$
|
109,904
|
|
$
|
1,282,507
|
|
$
|
(1,424,806
|
)
|
$
|
377,945
|
|
(a)
|
Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of
$15,225 million
and net assets of discontinued operations of
$4,318 million
.
|
FINANCIAL STATEMENTS
|
GUARANTOR FINANCIAL INFORMATION
|
CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION
|
||||||||||||||||||
DECEMBER 31, 2016
|
||||||||||||||||||
|
||||||||||||||||||
(In millions)
|
Parent
Company
Guarantor
|
|
Subsidiary
Issuer
|
|
Subsidiary
Guarantor
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
||||||||||||
Cash and equivalents
|
$
|
2,558
|
|
$
|
—
|
|
$
|
3
|
|
$
|
46,994
|
|
$
|
(1,426
|
)
|
$
|
48,129
|
|
Investment securities
|
1
|
|
—
|
|
—
|
|
47,394
|
|
(3,082
|
)
|
44,313
|
|
||||||
Receivables - net
|
63,620
|
|
17,157
|
|
30,470
|
|
79,401
|
|
(148,385
|
)
|
42,263
|
|
||||||
Inventories
|
4,654
|
|
—
|
|
—
|
|
21,076
|
|
(3,377
|
)
|
22,354
|
|
||||||
Property, plant and equipment - net
|
5,768
|
|
—
|
|
—
|
|
46,366
|
|
(1,615
|
)
|
50,518
|
|
||||||
Investment in subsidiaries(a)
|
272,685
|
|
—
|
|
80,481
|
|
492,674
|
|
(845,840
|
)
|
—
|
|
||||||
Goodwill and intangible assets
|
8,128
|
|
—
|
|
—
|
|
42,074
|
|
36,673
|
|
86,875
|
|
||||||
All other assets
|
14,692
|
|
44
|
|
39
|
|
201,276
|
|
(160,134
|
)
|
55,917
|
|
||||||
Assets of discontinued operations
|
—
|
|
—
|
|
—
|
|
—
|
|
14,815
|
|
14,815
|
|
||||||
Total assets
|
$
|
372,107
|
|
$
|
17,202
|
|
$
|
110,992
|
|
$
|
977,255
|
|
$
|
(1,112,372
|
)
|
$
|
365,183
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and equity
|
|
|
|
|
|
|
||||||||||||
Short-term borrowings
|
$
|
167,089
|
|
$
|
1
|
|
$
|
46,432
|
|
$
|
25,919
|
|
$
|
(208,727
|
)
|
$
|
30,714
|
|
Accounts payable
|
5,412
|
|
—
|
|
—
|
|
47,366
|
|
(38,343
|
)
|
14,435
|
|
||||||
Other current liabilities
|
11,072
|
|
33
|
|
117
|
|
25,095
|
|
114
|
|
36,431
|
|
||||||
Long-term and non-recourse borrowings
|
68,983
|
|
16,486
|
|
34,389
|
|
68,912
|
|
(83,273
|
)
|
105,496
|
|
||||||
All other liabilities
|
43,722
|
|
511
|
|
481
|
|
58,376
|
|
(9,656
|
)
|
93,434
|
|
||||||
Liabilities of discontinued operations
|
—
|
|
—
|
|
—
|
|
—
|
|
4,158
|
|
4,158
|
|
||||||
Total Liabilities
|
296,279
|
|
17,030
|
|
81,419
|
|
225,667
|
|
(335,727
|
)
|
284,668
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Redeemable noncontrolling interests
|
—
|
|
—
|
|
—
|
|
2,223
|
|
802
|
|
3,025
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
GE shareowners' equity
|
75,828
|
|
171
|
|
29,573
|
|
747,719
|
|
(777,463
|
)
|
75,828
|
|
||||||
Noncontrolling interests
|
—
|
|
—
|
|
—
|
|
1,647
|
|
16
|
|
1,663
|
|
||||||
Total equity
|
75,828
|
|
171
|
|
29,573
|
|
749,366
|
|
(777,447
|
)
|
77,491
|
|
||||||
Total liabilities, redeemable
noncontrolling interests and equity
|
$
|
372,107
|
|
$
|
17,202
|
|
$
|
110,992
|
|
$
|
977,255
|
|
$
|
(1,112,372
|
)
|
$
|
365,183
|
|
(a)
|
Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of
$28,516 million
and net assets of discontinued operations of
$6,012 million
.
|
FINANCIAL STATEMENTS
|
GUARANTOR FINANCIAL INFORMATION
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2017
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||
(In millions)
|
Parent
Company
Guarantor
|
|
Subsidiary
Issuer
|
|
Subsidiary
Guarantor
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Cash flows – operating activities
|
|
|
|
|
|
|
||||||||||||
Cash from (used for) operating activities -
continuing operations
|
$
|
(35,701
|
)
|
$
|
52
|
|
$
|
4,305
|
|
$
|
257,663
|
|
$
|
(214,924
|
)
|
$
|
11,394
|
|
Cash from (used for) operating activities -
discontinued operations
|
(319
|
)
|
—
|
|
—
|
|
(656
|
)
|
6
|
|
(968
|
)
|
||||||
Cash from (used for) operating activities
|
(36,020
|
)
|
52
|
|
4,305
|
|
257,007
|
|
(214,918
|
)
|
10,426
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Cash flows – investing activities
|
|
|
|
|
|
|
||||||||||||
Cash from (used for) investing activities –
continuing operations
|
2,469
|
|
(52
|
)
|
(1,871
|
)
|
(333,491
|
)
|
336,885
|
|
3,940
|
|
||||||
Cash from (used for) investing activities –
discontinued operations
|
—
|
|
—
|
|
—
|
|
(1,618
|
)
|
—
|
|
(1,618
|
)
|
||||||
Cash from (used for) investing activities
|
2,469
|
|
(52
|
)
|
(1,871
|
)
|
(335,109
|
)
|
336,885
|
|
2,322
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Cash flows – financing activities
|
|
|
|
|
|
|
||||||||||||
Cash from (used for) financing activities –
continuing operations
|
34,268
|
|
—
|
|
(2,434
|
)
|
68,398
|
|
(121,288
|
)
|
(21,055
|
)
|
||||||
Cash from (used for) financing activities –
discontinued operations
|
—
|
|
—
|
|
—
|
|
1,909
|
|
—
|
|
1,909
|
|
||||||
Cash from (used for) financing activities
|
34,268
|
|
—
|
|
(2,434
|
)
|
70,307
|
|
(121,288
|
)
|
(19,146
|
)
|
||||||
Effect of currency exchange rate changes
on cash and equivalents
|
—
|
|
—
|
|
—
|
|
891
|
|
—
|
|
891
|
|
||||||
Increase (decrease) in cash and equivalents
|
717
|
|
—
|
|
—
|
|
(6,904
|
)
|
680
|
|
(5,507
|
)
|
||||||
Cash and equivalents at beginning of year
|
2,558
|
|
—
|
|
3
|
|
48,423
|
|
(1,426
|
)
|
49,558
|
|
||||||
Cash and equivalents at end of year
|
3,275
|
|
—
|
|
3
|
|
41,519
|
|
(747
|
)
|
44,051
|
|
||||||
Less cash and equivalents of discontinued
operations at end of year
|
—
|
|
—
|
|
—
|
|
752
|
|
—
|
|
752
|
|
||||||
Cash and equivalents of continuing operations
at end of year
|
$
|
3,275
|
|
$
|
—
|
|
$
|
3
|
|
$
|
40,768
|
|
$
|
(747
|
)
|
$
|
43,299
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2016
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||
(In millions)
|
Parent
Company
Guarantor
|
|
Subsidiary
Issuer
|
|
Subsidiary
Guarantor
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Cash flows – operating activities
|
|
|
|
|
|
|
||||||||||||
Cash from (used for) operating activities -
continuing operations
|
$
|
(4,966
|
)
|
$
|
(10
|
)
|
$
|
(52
|
)
|
$
|
162,918
|
|
$
|
(151,791
|
)
|
$
|
6,099
|
|
Cash from (used for) operating activities -
discontinued operations
|
(891
|
)
|
—
|
|
—
|
|
(5,039
|
)
|
(413
|
)
|
(6,343
|
)
|
||||||
Cash from (used for) operating activities
|
(5,858
|
)
|
(10
|
)
|
(52
|
)
|
157,880
|
|
(152,204
|
)
|
(244
|
)
|
||||||
|
|
|
|
|
|
|
||||||||||||
Cash flows – investing activities
|
|
|
|
|
|
|
||||||||||||
Cash from (used for) investing activities –
continuing operations
|
14,158
|
|
16,384
|
|
35,443
|
|
72,205
|
|
(75,577
|
)
|
62,613
|
|
||||||
Cash from (used for) investing activities –
discontinued operations
|
—
|
|
—
|
|
—
|
|
(13,412
|
)
|
—
|
|
(13,412
|
)
|
||||||
Cash from (used for) investing activities
|
14,158
|
|
16,384
|
|
35,443
|
|
58,794
|
|
(75,577
|
)
|
49,202
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Cash flows – financing activities
|
|
|
|
|
|
|
||||||||||||
Cash from (used for) financing activities –
continuing operations
|
(9,879
|
)
|
(16,374
|
)
|
(35,388
|
)
|
(275,243
|
)
|
246,964
|
|
(89,920
|
)
|
||||||
Cash from (used for) financing activities –
discontinued operations
|
—
|
|
—
|
|
—
|
|
789
|
|
—
|
|
789
|
|
||||||
Cash from (used for) financing activities
|
(9,879
|
)
|
(16,374
|
)
|
(35,388
|
)
|
(274,454
|
)
|
246,964
|
|
(89,131
|
)
|
||||||
Effect of currency exchange rate changes
on cash and equivalents
|
—
|
|
—
|
|
—
|
|
(1,146
|
)
|
—
|
|
(1,146
|
)
|
||||||
Increase (decrease) in cash and equivalents
|
(1,578
|
)
|
—
|
|
3
|
|
(58,927
|
)
|
19,183
|
|
(41,319
|
)
|
||||||
Cash and equivalents at beginning of year
|
4,137
|
|
—
|
|
—
|
|
107,351
|
|
(20,609
|
)
|
90,879
|
|
||||||
Cash and equivalents at end of year
|
2,558
|
|
—
|
|
3
|
|
48,423
|
|
(1,426
|
)
|
49,558
|
|
||||||
Less cash and equivalents of discontinued
operations at end of year
|
—
|
|
—
|
|
—
|
|
1,429
|
|
—
|
|
1,429
|
|
||||||
Cash and equivalents of continuing operations
at end of year
|
$
|
2,558
|
|
$
|
—
|
|
$
|
3
|
|
$
|
46,994
|
|
$
|
(1,426
|
)
|
$
|
48,129
|
|
FINANCIAL STATEMENTS
|
GUARANTOR FINANCIAL INFORMATION
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2015
|
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||
(In millions)
|
Parent
Company
Guarantor
|
|
Subsidiary
Issuer
|
|
Subsidiary
Guarantor
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Cash flows – operating activities
|
|
|
|
|
|
|
||||||||||||
Cash from (used for) operating activities -
continuing operations
|
$
|
13,587
|
|
$
|
68
|
|
$
|
631
|
|
$
|
433,479
|
|
$
|
(435,909
|
)
|
$
|
11,856
|
|
Cash from (used for) operating activities -
discontinued operations
|
(7,490
|
)
|
—
|
|
(30
|
)
|
27,533
|
|
(11,979
|
)
|
8,034
|
|
||||||
Cash from (used for) operating activities
|
6,097
|
|
68
|
|
601
|
|
461,013
|
|
(447,888
|
)
|
19,891
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Cash flows – investing activities
|
|
|
|
|
|
|
||||||||||||
Cash from (used for) investing activities –
continuing operations
|
7,106
|
|
(248
|
)
|
(601
|
)
|
(493,933
|
)
|
549,289
|
|
61,613
|
|
||||||
Cash from (used for) investing activities –
discontinued operations
|
—
|
|
—
|
|
—
|
|
5,854
|
|
(7,979
|
)
|
(2,125
|
)
|
||||||
Cash from (used for) investing activities
|
7,106
|
|
(248
|
)
|
(601
|
)
|
(488,079
|
)
|
541,310
|
|
59,488
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Cash flows – financing activities
|
|
|
|
|
|
|
||||||||||||
Cash from (used for) financing activities –
continuing operations
|
(13,886
|
)
|
180
|
|
—
|
|
67,063
|
|
(122,904
|
)
|
(69,547
|
)
|
||||||
Cash from (used for) financing activities –
discontinued operations
|
—
|
|
—
|
|
—
|
|
(37,582
|
)
|
31,075
|
|
(6,507
|
)
|
||||||
Cash from (used for) financing activities
|
(13,886
|
)
|
180
|
|
—
|
|
29,481
|
|
(91,829
|
)
|
(76,054
|
)
|
||||||
Effect of currency exchange rate changes
on cash and equivalents
|
—
|
|
—
|
|
—
|
|
(3,464
|
)
|
—
|
|
(3,464
|
)
|
||||||
Increase (decrease) in cash and equivalents
|
(683
|
)
|
—
|
|
—
|
|
(1,049
|
)
|
1,594
|
|
(138
|
)
|
||||||
Cash and equivalents at beginning of year
|
4,820
|
|
—
|
|
—
|
|
108,400
|
|
(22,203
|
)
|
91,017
|
|
||||||
Cash and equivalents at end of year
|
4,137
|
|
—
|
|
—
|
|
107,351
|
|
(20,609
|
)
|
90,879
|
|
||||||
Less cash and equivalents of discontinued
operations at end of year
|
—
|
|
—
|
|
—
|
|
20,395
|
|
—
|
|
20,395
|
|
||||||
Cash and equivalents of continuing operations
at end of year
|
$
|
4,137
|
|
$
|
—
|
|
$
|
—
|
|
$
|
86,955
|
|
$
|
(20,609
|
)
|
$
|
70,483
|
|
FINANCIAL STATEMENTS
|
QUARTERLY INFORMATION
|
|
|
First quarter
|
|
Second quarter
|
|
Third quarter
|
|
Fourth quarter
|
||||||||||||||||||||
(In millions; per-share amounts in dollars)
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Consolidated operations
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Earnings (loss) from continuing operations
|
$
|
816
|
|
$
|
415
|
|
|
$
|
1,499
|
|
$
|
3,363
|
|
|
$
|
1,800
|
|
$
|
2,056
|
|
|
$
|
(9,863
|
)
|
$
|
3,659
|
|
Earnings (loss) from discontinued
operations
|
(239
|
)
|
(308
|
)
|
|
(146
|
)
|
(541
|
)
|
|
(106
|
)
|
(105
|
)
|
|
182
|
|
—
|
|
||||||||
Net earnings (loss)
|
577
|
|
107
|
|
|
1,354
|
|
2,823
|
|
|
1,694
|
|
1,951
|
|
|
(9,681
|
)
|
3,659
|
|
||||||||
Less net earnings (loss) attributable to
noncontrolling interests
|
(76
|
)
|
(121
|
)
|
|
(14
|
)
|
(86
|
)
|
|
(142
|
)
|
(76
|
)
|
|
(39
|
)
|
(8
|
)
|
||||||||
Net earnings (loss) attributable to
the Company
|
$
|
653
|
|
$
|
228
|
|
|
$
|
1,367
|
|
$
|
2,908
|
|
|
$
|
1,836
|
|
$
|
2,027
|
|
|
$
|
(9,642
|
)
|
$
|
3,667
|
|
Per-share amounts – earnings (loss) from
continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings (loss) per share
|
$
|
0.10
|
|
$
|
0.03
|
|
|
$
|
0.15
|
|
$
|
0.36
|
|
|
$
|
0.22
|
|
$
|
0.23
|
|
|
$
|
(1.15
|
)
|
$
|
0.39
|
|
Basic earnings (loss) per share
|
0.10
|
|
0.03
|
|
|
0.15
|
|
0.36
|
|
|
0.22
|
|
0.24
|
|
|
(1.15
|
)
|
0.39
|
|
||||||||
Per-share amounts – earnings (loss)
from discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings (loss) per share
|
(0.03
|
)
|
(0.03
|
)
|
|
(0.02
|
)
|
(0.06
|
)
|
|
(0.01
|
)
|
(0.01
|
)
|
|
0.02
|
|
0.00
|
|
||||||||
Basic earnings (loss) per share
|
(0.03
|
)
|
(0.03
|
)
|
|
(0.02
|
)
|
(0.06
|
)
|
|
(0.01
|
)
|
(0.01
|
)
|
|
0.02
|
|
0.00
|
|
||||||||
Per-share amounts – net earnings (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings (loss) per share
|
0.07
|
|
(0.01
|
)
|
|
0.13
|
|
0.30
|
|
|
0.21
|
|
0.22
|
|
|
(1.13
|
)
|
0.39
|
|
||||||||
Basic earnings (loss) per share
|
0.07
|
|
(0.01
|
)
|
|
0.14
|
|
0.30
|
|
|
0.21
|
|
0.22
|
|
|
(1.13
|
)
|
0.40
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Selected data
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
GE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sales of goods and services
|
$
|
25,392
|
|
$
|
25,407
|
|
|
$
|
27,293
|
|
$
|
28,150
|
|
|
$
|
29,438
|
|
$
|
26,934
|
|
|
$
|
31,356
|
|
$
|
30,345
|
|
Gross profit from sales
|
5,418
|
|
5,516
|
|
|
5,965
|
|
6,192
|
|
|
5,918
|
|
6,388
|
|
|
6,126
|
|
7,027
|
|
||||||||
GE Capital
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total revenues
|
2,681
|
|
2,885
|
|
|
2,446
|
|
2,771
|
|
|
2,397
|
|
2,600
|
|
|
1,545
|
|
2,649
|
|
||||||||
Earnings (loss) from continuing operations
attributable to the Company
|
(13
|
)
|
(603
|
)
|
|
10
|
|
(448
|
)
|
|
60
|
|
59
|
|
|
(6,385
|
)
|
397
|
|
OTHER INFORMATION
|
|
|
|
|
|
|
|
|
Date assumed
|
|
|
|
|
|
|
Executive
|
Name
|
|
Position
|
|
Age
|
|
Officer Position
|
|
|
|
|
|
|
|
John L. Flannery
|
|
Chairman of the Board & Chief Executive Officer
|
|
56
|
|
August 2017
|
Jamie S. Miller
|
|
Senior Vice President & Chief Financial Officer
|
|
49
|
|
November 2017
|
Alexander Dimitrief
|
|
Senior Vice President, General Counsel & Secretary of General Electric
|
|
59
|
|
November 2015
|
|
|
Company; President and CEO, Global Growth Organization
|
|
|
|
|
Jan R. Hauser
|
|
Vice President, Controller & Chief Accounting Officer
|
|
58
|
|
April 2013
|
David L. Joyce
|
|
Vice Chairman of General Electric Company;
|
|
61
|
|
September 2016
|
|
|
President & CEO, GE Aviation
|
|
|
|
|
Raghu Krishnamoorthy
|
|
Senior Vice President, Chief Human Resources Officer
|
|
57
|
|
December 2017
|
OTHER INFORMATION
|
|
|
Exhibit
Number |
|
Description
|
|
2(a)
|
|
||
|
|
|
|
2(b)
|
|
||
|
|
|
|
3(i)
|
|
The Restated Certificate of Incorporation of General Electric Company (
Incorporated by reference to Exhibit 3(i) to GE’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013
), as amended by the Certificate of Amendment, dated December 2, 2015 (
Incorporated by reference to Exhibit 3.1 to GE’s Current Report on Form 8-K, dated December 3, 2015
), as further amended by the Certificate of Amendment, dated January 19, 2016 (
Incorporated by reference to Exhibit 3.1 to GE’s Current Report on Form 8-K, dated January 20, 2016
) and as further amended by the Certificate of Change of General Electric Company (
Incorporated by reference to Exhibit 3(1) to GE’s Current Report on Form 8-K, dated September 1, 2016
(in each case, under Commission file number 001-00035).
|
|
|
|||
3(ii)
|
|
||
|
|||
4(a)
|
|
||
|
|||
4(b)
|
|
||
|
|||
4(c)
|
|
||
|
|||
4(d)
|
|
||
|
|||
4(e)
|
|
||
|
OTHER INFORMATION
|
|
|
4(f)
|
|
||
|
|||
4(g)
|
|
||
|
|
|
|
4(h)
|
|
||
|
|
|
|
4(i)
|
|
||
|
|
|
|
4(j)
|
|
||
|
|
|
|
4(k)
|
|
||
|
|||
4(l)
|
|
||
|
|||
(10)
|
|
Except for 10(t), (x), (y) and (z) below, all of the following exhibits consist of Executive Compensation Plans or Arrangements:
|
|
|
|||
|
|
(a)
|
General Electric Incentive Compensation Plan, as amended effective July 1, 1991 (Incorporated by reference to Exhibit 10(a) to GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 1991).
|
|
|||
|
|
(b)
|
|
|
|||
|
|
(c)
|
General Electric Supplemental Life Insurance Program, as amended February 8, 1991 (Incorporated by reference to Exhibit 10(i) to GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 1990).
|
|
|||
|
|
(d)
|
|
|
|||
|
|
(e)
|
|
|
|||
|
|
(f)
|
|
|
|
|
|
|
|
(g)
|
|
|
|||
|
|
(h)
|
|
|
|||
|
|
(i)
|
|
|
|||
|
|
(j)
|
|
|
OTHER INFORMATION
|
|
|
OTHER INFORMATION
|
|
|
31(a)
|
|
||
|
|||
31(b)
|
|
||
|
|||
(32)
|
|
||
|
|||
99(a)
|
|
Undertaking for Inclusion in Registration Statements on Form S-8 of General Electric Company (Incorporated by reference to Exhibit 99(b) to General Electric Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 1992).
|
|
|
|
|
|
99(b)
|
|
||
|
|
|
|
99(c)
|
|
||
|
|
|
|
(101)
|
|
The following materials from General Electric Company's Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language); (i) Statement of Earnings (Loss) for the years ended December 31, 2017, 2016 and 2015, (ii) Consolidated Statement of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015, (iii) Statement of Financial Position at December 31, 2017 and 2016, (iv) Statement of Cash Flows for the years ended December 31, 2017, 2016 and 2015, and (v) the Notes to Consolidated Financial Statements.*
|
|
|
|||
*
|
Filed electronically herewith.
|
||
**
|
Information required to be presented in Exhibit 11 is provided in Note 16 to the consolidated financial statements in this Form 10-K Report in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification 260,
Earnings Per Share
.
|
OTHER INFORMATION
|
|
|
(a)
|
Incorporated by reference to “Compensation” in the 2018 Proxy Statement.
|
(b)
|
Incorporated by reference to “Stock Ownership Information” in the 2018 Proxy Statement.
|
(c)
|
Incorporated by reference to “Related Person Transactions” and “How We Assess Director Independence” in the 2018 Proxy Statement.
|
(d)
|
Incorporated by reference to “Independent Auditor Information” in the 2018 Proxy Statement.
|
(e)
|
The Introduction & Summary does not include Part III information because it will be incorporated by reference to the 2018 Proxy Statement.
|
By
|
/s/ Jamie S. Miller
|
|
Jamie S. Miller
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
Signer
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Jamie S. Miller
|
|
Principal Financial Officer
|
|
February 23, 2018
|
|
Jamie S. Miller
Senior Vice President and
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Jan R. Hauser
|
|
Principal Accounting Officer
|
|
February 23, 2018
|
|
Jan R. Hauser
Vice President and Controller |
|
|
|
|
|
|
|
|
|
|
|
/s/ John L. Flannery
|
|
Principal Executive Officer
|
|
February 23, 2018
|
|
John L. Flannery*
Chairman of the Board of Directors
|
|
|
|
|
|
|
|
|
|
|
|
Sébastien M. Bazin*
|
|
Director
|
|
|
|
W. Geoffrey Beattie*
|
|
Director
|
|
|
|
John J. Brennan*
|
|
Director
|
|
|
|
Francisco D’Souza*
|
|
Director
|
|
|
|
Edward P. Garden*
|
|
Director
|
|
|
|
Peter B. Henry*
|
|
Director
|
|
|
|
Susan Hockfield*
|
|
Director
|
|
|
|
Risa Lavizzo-Mourey*
|
|
Director
|
|
|
|
Rochelle B. Lazarus*
|
|
Director
|
|
|
|
James J. Mulva*
|
|
Director
|
|
|
|
James E. Rohr*
|
|
Director
|
|
|
|
Mary L. Schapiro*
|
|
Director
|
|
|
|
James S. Tisch*
|
|
Director
|
|
|
|
|
|
|
|
|
|
A majority of the Board of Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*By
|
/s/ Christoph A. Pereira
|
|
|
|
|
|
Christoph A. Pereira
Attorney-in-fact February 23, 2018 |
|
|
|
|
|
Jennifer B. VanBelle
Vice President and GE Treasurer
General Electric Company
901 Main Avenue
Norwalk, CT 06856
|
/s/ Jennifer B. VanBelle
|
Jennifer B. VanBelle
|
Vice President and GE Treasurer
|
1.
|
Separation Date and Consideration/Other Payments
.
|
a.
|
Separation Date
. The Employee’s employment with the Company will end on December 31, 2017 (the “Separation Date”). Until the Separation Date, the Company will pay the Employee his regular salary and benefits and the Employee will continue to perform his regular duties or other duties as assigned by the Chief Executive Officer of the Company.
|
b.
|
Severance Pay
. The Company will pay the Employee an amount equal to his regular salary on the Company’s regular pay dates until the earlier of the date he starts full-time employment with another employer or December 31, 2018 (this period is the “Severance Period”). During the Severance Period, the Employee must be available to provide reasonable transition assistance and answer questions related to his Company employment. The Employee agrees to notify the Company’s Senior Vice President, Human Resources as soon as he accepts full-time employment with another employer, and Employee agrees that any adjusted Severance Period due to new employment remains sufficient consideration for this Agreement. Severance Pay will not be considered as compensation under the Company’s benefit plans.
|
c.
|
Paid Time Off
. The Employee understands and agrees that the consideration provided in this Agreement includes any paid time off and that he will not receive any payment for unused or accrued paid time off of any kind.
|
d.
|
Health Benefits
. Following the Separation Date, the Employee can elect COBRA health care continuation coverage. If he timely does so, his cost for such coverage during the Severance Period will be the same amount as if he had remained actively employed, and such costs (premiums) will be deducted from any severance payments during the Severance Period. Following the
Severance Period, the Employee will be solely responsible for the full cost of COBRA coverage, which the Employee must pay directly to the COBRA Administrator. Except as otherwise provided in this paragraph, the Company’s regular COBRA rules and procedures will apply.
|
e.
|
Life Insurance
. Effective March 30, 2018, the Company will discontinue premium payments on behalf of the Employee under the Executive Life, Senior Executive Life and Leadership Life Insurance Plans.
|
f.
|
Annual Executive Incentive Plan (AEIP)
. AEIP for the current AEIP Plan year will be reviewed and determined during the regular AEIP process by the Company and a payment of AEIP, if any, will be made in accordance with usual Company procedures.
|
g.
|
Stock Options
. Any stock option grants the Employee has not held for at least one year as of the Effective Date will be cancelled. Any other options that would otherwise vest in the same calendar year as the Separation Date and the next two calendar years will be vested as soon as practicable following the Separation Date. The Employee can exercise all vested options until the earlier of their expiration date(s) or the end of the second calendar year following the Separation Date. If the Employee dies before the date a vested option will expire, the option will expire on the earlier of two years after death or the original expiration date.
|
h.
|
Restricted Stock Units (RSUs)
. Any RSU grants the Employee has not held for at least one year as of the Effective Date will be cancelled. The restrictions on any other RSUs that would normally lapse in the same calendar year as the Separation Date or during the next two calendar years will lapse (i.e., those RSUs will be vested) as soon as practicable following the Separation Date.
|
i.
|
Performance Stock Units (PSUs).
Any PSU grants the Employee has not held for at least one year as of the Effective Date will be cancelled. The restrictions on any other outstanding PSUs will lapse contingent upon satisfying the performance conditions and other provisions set forth in such PSUs, and to the extent earned, will be payable in accordance with normal Company procedures.
|
j.
|
Executive Deferred Salary Plans
. Payments from any Executive Deferred Salary Plan in which the Employee participated will be made after the Separation Date in accordance with the rules of the Plan.
|
k.
|
Deferred Incentive Compensation/AEIP
. Employee’s deferred Incentive Compensation and/or deferred AEIP, if any, will be paid out in accordance with the rules of the applicable program.
|
l.
|
Allowance
. The Employee will receive the Allowance described in the
ALLOWANCE EXHIBIT
to this Agreement.
|
m.
|
2016-18 Long-Term Performance Award (LTPA)
. The Employee will be eligible to receive a pro rata payment under the 2016-18 LTPA Program equal to 24/36 of the award the Employee would have been eligible to receive if he remained employed during
|
n.
|
Company Car
. The Employee may continue using the Company-provided car in his possession until the Separation Date, at which time he may purchase the car at its market value (as determined by the Company’s fleet services provider) or return the car to the Company.
|
o.
|
Financial Planner
. The Employee may continue to avail himself of the services of a financial planner until the Separation Date.
|
2.
|
Employee Acknowledgments and Representations
. The Employee acknowledges, represents and agrees:
|
a.
|
Receipt of Wages and Benefits
. Except as stated above, Employee agrees that he has received all wages and compensation, including but not limited to overtime compensation, due to him. He is not entitled to any other payments of any kind, including to the payments and benefits he is receiving under this Agreement, except as a result of his agreement to the terms herein. Employee agrees that those payments and benefits are sufficient consideration for this Agreement.
|
b.
|
Taxes & Withholdings
. All payments and benefits received under this Agreement are subject to applicable taxes and withholdings.
|
c.
|
Time to Review & Revoke
. The Employee has 21 days to consider this Agreement, and his waiver of rights under the Age Discrimination in Employment Act, as amended, before signing it, and can revoke this Agreement within 7 days after signing it by sending written notice of that revocation to the Company’s Senior Vice President, Human Resources (the day following this revocation period is the “Effective Date” of this Agreement). Employee also agrees that he has had the opportunity to consult with an attorney of his choice before signing it.
|
d.
|
Disclosure of Past and Present Claims
. The Employee is not aware of (or has already disclosed to the Company) any information he has or knows about conduct by the Company or any of the Releasees that he has any reason to believe violates or may violate any domestic or foreign law or regulation or Company policy, or involves or may involve false claims to the United States.
|
e.
|
Alternative Dispute Resolution
. The Employee agrees that his agreement to Solutions or any applicable prior internal Company alternative dispute resolution process (for purposes of this Agreement collectively called “Company ADR”) remains in effect. Employee further agrees to submit to the Company ADR any claims not released by this
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f.
|
Company’s Reliance on Employee Representations
. The Employee understands that the Company is relying on the Employee’s representations and obligations contained in this Agreement, including but not limited to his Release of Claims.
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g.
|
Existing Restrictive Covenants
. Employee agrees that any existing Non-Solicitation agreement and/or Non-Compete agreement to which he is a party shall continue in full force and effect.
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3.
|
Confidentiality
. Unless compelled by law to do so, the Employee has not and will not, disclose the fact of, terms and conditions of, or amounts in this Agreement to anyone other than his spouse, legal or financial advisor, or U.S. governmental officials who seek such information as part of their official duties. If a third-party requests or demands that the Employee disclose or produce this Agreement or any terms or conditions in it, the Employee will not take any action related to such request or subpoena without first notifying the Company and giving it a reasonable opportunity to respond.
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4.
|
Release of Claims
. In return for the consideration provided by this Agreement, the Employee, his heirs, assigns, and agents waive and release all waivable claims of any kind (whether known or unknown, and including those under the Age Discrimination in Employment Act (ADEA)) that the Employee may have against Releasees (defined below), which arise from or relate to his employment and/or the termination of his employment with the Company. The released/waived claims include, but are not limited to, any and all claims that Releasees discriminated, harassed or retaliated against the Employee on the basis of race, color, religion, national origin, sex (including pregnancy), sexual orientation, gender identity/expression, age, disability, veteran status or other characteristic or activity protected by law, violated any GE policies, procedures, covenants or express or implied contracts of any kind, violated any public policy, statutory or common law (including tort), or are in any way obligated to pay him damages, expenses, costs or attorneys’ fees in relation to an alleged violation of any waivable local, state (including the Massachusetts Wage Act) or federal law.
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5.
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Employee Availability
. The Employee agrees to make himself reasonably available to the Company to respond to requests for information related to his employment with the Company. The Employee will fully cooperate with the Company in connection with existing or future litigation or investigations brought by or against the Company or any Releasees, whether administrative, civil or criminal in nature. The Company will reimburse the Employee for reasonable out-of pocket expenses he incurs as a result of such cooperation. For purposes of this provision, the Company agrees that any request for cooperation that prevents or impedes the Employee’s ability to secure or maintain gainful employment will not be deemed reasonable.
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6.
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Non-Disparagement
. The Employee agrees, subject to any obligations he may have under applicable law, that he will not make or cause to be made any statements or take any actions that disparage or damage the reputation of the Company or any of its affiliates, subsidiaries, agents, officers, directors or employees. The Employee understands that nothing in this paragraph prevents him from disclosing statements, of any nature, regarding possible violations of law or regulation to government agencies or authorities.
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7.
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Return of Company Property
. The Employee agrees that he has, or will have, as of the Separation Date, returned to the Company all Company property or equipment in his possession, including but not limited to: any documents (whether in electronic or hard copy), computer, computer related hardware, external data storage or other memory device, phone, tablet, printer, scanner, credit card, keys, and security badge assigned to him. The Employee agrees that as of the Separation Date he will have submitted the appropriate T&L expense reports for any expenses on his corporate credit card.
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8.
|
Confidential Information
. The Employee acknowledges that the Employee Innovation and Proprietary Information Agreement (“EIPIA”) he signed will remain in full force and effect. The Employee understands that nothing herein prevents the Employee from disclosing a trade secret or other confidential and proprietary information of the Company (“Confidential Information”) when reporting, in confidence, potential violations of law or regulation to U.S. government authorities, including but not limited to the Department of Justice and the Securities and Exchange Commission, or to a U.S. court. The Employee represents that he has not and will not copy, transfer or take any GE Confidential Information to any external storage device, external personal email or disclose in any other manner without written approval by the Company’s Senior Vice President, Human Resources. GE Confidential Information includes but is not limited to documents and data containing work product that the Employee or others prepared for the Company during his employment. Confidential Information does not include materials of a solely personal or social nature or documents that relate to Company-provided compensation or benefits received by the Employee or his dependents. If the Employee has any questions regarding what he can/cannot copy, transfer or take, he will raise those questions to the Company’s Senior Vice President, Human Resources prior to signing this Agreement. If the Employee has previously copied, transferred or taken Confidential Information, he will tell the Company, permit the Company to retrieve such information in a forensically sound manner, and allow and/or assist the Company, or its designee, to permanently delete the data from his personal computer or other storage.
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9.
|
Non-Solicitation
. Employee agrees that up until the Separation Date and continuing for one year (12 months) following that date, he will not, without prior written approval from the Company’s Senior Vice-President, Human Resources: (a) directly or indirectly solicit or encourage any person who is an employee of the Company to terminate his or her employment relationship with, or accept any other employment outside of, the Company; (b) directly hire, or recommend or cause to be hired by an entity for which the Employee works, any person who is, or was within twelve (12) months before or after the Separation Date, an employee of the Company; or (c) provide any non-public information regarding an employee of the Company to any external person in connection with employment outside the Company, including, but not limited to, recruiters and prospective employers.
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10.
|
Non-Competition
. The Employee agrees that for one year (12 months) following the Separation Date, he will not enter into an employment or contractual relationship, either directly or indirectly, to provide services to any major competitor with revenue in excess of 10B without the express written consent of the Company.
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11.
|
Breach by Employee
. The Company’s obligations to the Employee after the Effective Date are contingent on the Employee fulfilling his obligations under this Agreement. Employee acknowledges and agrees that any material breach by him of the obligations under this Agreement, if such breach is not cured within 10 days of the Company providing notice to him of such breach, inevitably would cause substantial and irreparable damage to the
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12.
|
Severability of Provisions
. If a court or arbitrator holds that any provision in this Agreement is legally invalid or unenforceable, and cannot be modified to be enforceable, the affected provision will be stricken from the Agreement and the remaining terms of the Agreement and its enforceability shall remain unaffected.
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13.
|
Compliance with Section 409A of the Internal Revenue Code
. This Agreement is intended to satisfy the requirements of Section 409A of the Internal Revenue Code (and any related guidance issued by the IRS or the Treasury Department), so as to avoid the imposition of any additional taxes, penalties or interest under those rules. Accordingly, the Company will modify this Agreement to the extent necessary to avoid the imposition of any such additional taxes, penalties or interest. In the unlikely event that this need arises, the Company will take reasonable efforts to provide advance notice to the Employee. All payments under this Agreement will be delayed to the extent necessary to comply with the rules in Section 409A(a)(2)(B)(i) (generally requiring a delay of six months after separation from service for certain payments made to top-50 officers determined in accordance with Company rules).
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14.
|
Benefits Plans
. The Company reserves the right to terminate, amend, suspend, replace or modify any of its benefit plans and compensation programs at any time and for any reason, and the Employee will be subject to any such termination, amendment, suspension, replacement, or modification. If a plan or program is terminated, the Employee will not receive any further benefits under that plan/program, other than payment for benefits for services or coverages incurred before it was terminated. In addition, to the extent any of the provisions in this Agreement are inconsistent with the terms and conditions of any Plan document, Award Agreement or Grant Agreement, the provisions in those documents shall be controlling. This paragraph shall not alter any vested benefits to which the Employee may be entitled under the terms of the GE Pension Plan and/or GE Retirement Savings Plan.
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15.
|
Entire Agreement
. This Agreement sets forth the entire agreement and understanding between the parties. The parties agree they have not relied on any oral statements that are not included in this Agreement. This Agreement supersedes all prior agreements and understandings concerning the subject matter of this Agreement, other than as described in this Agreement. Any modifications to this Agreement must be in writing, must reference this Agreement, and must be signed by the Employee and an authorized employee or agent of
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16.
|
Applicable Law
. This Agreement shall be construed, interpreted and applied in accordance with the law of the State of New York.
|
17.
|
Format
. The Employee and the Company agree that a facsimile (“fax”), photographic, or electronic copy of this Agreement shall be as valid as the original.
|
Jeffrey Bornstein
|
|
GENERAL ELECTRIC COMPANY
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|
|
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|
|
|
/s/ Jeffrey Bornstein
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By:
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/s/ Alexander Dimitrief
|
Date:
10-4-17
|
Date:
|
10-5-2017
|
SSO:
203009393
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|
|
Signed /s/ Jeffrey Bornstein
|
Dated:
|
10-4-17
|
Jeffrey Bornstein
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1.
|
Separation Date and Consideration/Other Payments
.
|
a.
|
Separation Date/Salary Payments
. The Employee shall continue to perform her regular full-time duties and responsibilities as an active employee and be paid her current salary at the Company’s regular pay intervals through December 31, 2017 (referred to as the “Separation Date”).
|
b.
|
Paid time off
. Employee understands and agrees that the compensation and/or benefits she is receiving under this Agreement is inclusive of all vacation, permissive time off, personal illness, personal business, or holiday pay to which the Employee is or may be entitled, including under any of the Company’s paid time off plans or programs. Employee will not receive any other payments for such plans or programs.
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c.
|
Stock Options
. Stock options held by Employee for at least 12 months as of the Separation Date that are not vested on the Separation Date shall be deemed vested on the Separation Date, and will be exercisable until the earlier of December 31, 2020 or the original expiration date of the grant. All options already vested prior to the Separation Date will be exercisable until the earlier of December 31, 2020 or the original expiration date of the grant. All other stock options that are not already vested on the Separation Date, or that do not become vested as set forth in this Paragraph, shall be cancelled. If the Employee dies before the date a vested option will expire under this Agreement, such option will expire on the earlier of two years after death or the original expiration date.
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d.
|
Annual Executive Incentive Plan (AEIP)
. AEIP for 2017 will be reviewed and determined during the regular AEIP process by the Company and any payments shall be made in accordance with usual Company procedures. No AEIP will be paid for any subsequent years.
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e.
|
Executive Deferred Salary Plans
. Payments from any Executive Deferred Salary Plans in which the Employee participated will be made after the Employee’s Separation Date in accordance with the rules of the Plans and any applicable requirements pursuant to Paragraph 18 and Section 409A of the Internal Revenue Code.
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f.
|
Deferred Incentive Compensation
. Employee’s deferred incentive compensation will be paid out in accordance with the rules of the GE Deferred Incentive Compensation Program and any applicable requirements pursuant to Paragraph 18 and Section 409A of the Internal Revenue Code.
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g.
|
Officer Benefits
. Officer benefits and perquisites shall be treated as follows:
|
i.
|
Company Automobile
. The Employee may continue using the Company-provided car in her possession at the Effective Date of this Agreement until December 31, 2017. As of December 31, 2017, the Employee may purchase the car at its market value (as determined by the Company’s fleet services provider) or relinquish the car to the Company.
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ii.
|
Financial Planner
. The Employee may continue to avail herself of the services of a financial planner until the end of December 31, 2017 in accordance with the respective program.
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iii.
|
Leadership, Executive and Senior Executive Life Insurance
. The Company agrees to maintain the Employee’s Leadership, Executive and Senior Executive Life Insurance Policies and continue to make premium payments in accordance with the terms of the respective plans. For purposes of each of these plans, Employee is deemed to have retired as of her Separation Date.
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h.
|
Benefits
. Up until the Separation Date, Employee’s participation in the Company benefit plans (e.g., Savings and Security, pension, medical, life insurance) will be on the same terms as, and in accordance with, the provisions of the various Company benefit plans for a similarly situated active employee.
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i.
|
Retirement Allowance
. Employee will be granted a retirement allowance commencing on the first of the month following the Separation Date. The retirement allowance will be based on the Employee’s pensionable service through the Separation Date and compensation history as of the Separation Date, and will be on the terms and conditions as set forth in Exhibit A (“General Electric Company Allowance on Termination of Service – Employee Agreement”) attached hereto. Employee must sign both this Agreement and Exhibit A to receive the retirement allowance. The Employee understands and agrees that she is responsible for her share of Social Security and Medicare taxes and for any federal and/or state income taxes and any other taxes that may apply. Following the Separation Date, the Employee shall be eligible for those health and other welfare benefits under the Company’s employee benefit plans on the same basis as a similarly situated individual who elected optional retirement from the Company. For example, upon retirement, the Employee shall be eligible to remain in the active medical plan until attainment of age 65, with contributions the same as when employed. Contributions are subject to change, and no GE-sponsored medical coverage is available after attainment of age 65. Notwithstanding the above, the Company reserves the right to terminate, amend, eliminate and/or replace those health and other welfare benefits at its sole discretion and at any time. The Employee’s eligibility for, and benefits under, such plans shall be subject to any changes to those plans.
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j.
|
2016-18 Long-Term Performance Award
. The Employee will be eligible to receive a pro rata payment under the 2016-18 Long-Term Performance Award Program. The payout will be based on factors set forth in the original performance award granted to the Employee. The award will be 24/36 of the award the Employee would have been entitled to if she were employed for the entire 2016-18 award period. The award, if any, will be paid after the end of the LTPA program period in accordance with the terms of the Program.
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k.
|
Restricted Stock Units
. Restricted Stock Units (“RSUs”) that are unvested and held by Employee for at least 12 months as of the Separation Date and otherwise scheduled to vest on or before December 31, 2020 shall be vested on the Separation Date. Payment of vested RSUs will be delivered in shares net of withholding for applicable taxes as appropriate as soon as practicable following the Separation Date in accordance with plan rules and any requirements pursuant to Paragraph 18 and Section 409A of the Internal Revenue Code. All other RSUs that are not already vested on the Separation Date, or that do not become vested as set forth in this Paragraph, shall be cancelled.
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l.
|
Performance Stock Units
. The restrictions on Employee’s outstanding PSUs will lapse contingent upon satisfying the performance conditions and other provisions set forth in such PSUs, and to the extent earned, will be payable in accordance with normal Company procedures.
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m.
|
Employee Acknowledgements about Consideration/ Other Payments
.
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i.
|
Employee agrees that, except as stated in this Agreement, she has otherwise received all wages and compensation due to her; she is not entitled to any further payments of any kind; and she is not otherwise entitled to the additional payments and benefits she is receiving as consideration for this Agreement.
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ii.
|
Employee agrees that the payments and benefits she receives under this Agreement are sufficient consideration in exchange for her obligations under this Agreement.
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iii.
|
All payments and benefits received under this Agreement shall be subject to applicable taxes and withholdings
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2.
|
Effective Date of the Agreement
. Employee shall have seven (7) days from the date she signs this Agreement to revoke her consent to the waiver of her rights under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”). To do so, she must submit a written revocation to the Company’s Senior Vice President, Human Resources. If Employee revokes her consent to the waiver, all of the provisions of this Agreement shall be void and unenforceable. If Employee does not revoke her consent, the Agreement will take effect on the day after the end of this revocation period (the “Effective Date”).
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3.
|
Employee Representations
. Employee hereby represents and acknowledges to the Company that:
|
a.
|
Attorney Consultation
. The Company has advised Employee to consult with an attorney of her choosing prior to signing this Agreement;
|
b.
|
Time for Review
. The Employee has had the opportunity to take at least twenty-one (21) days to consider the waiver of her rights under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”) prior to signing this Agreement.
|
c.
|
Disclosure of Past and Present Claims
. The Employee has disclosed to the Company in writing any information in her possession concerning any conduct involving the Company or its affiliates that she has any reason to believe involves any violation of domestic or foreign law or regulation,
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d.
|
Meaning of Release
. Employee understands that, by agreeing to the Release in Paragraph
7
,
she is giving up the right to sue Releasees as defined below for any of the reasons outlined in the Release, subject to the terms of the Release. Employee understands that this Release applies to any claims known or unknown at the time she signs this Agreement.
|
e.
|
Company’s Reliance on Employee Representations
. The Employee understands that the Company is entering into this Agreement in reliance on Employee’s representations and obligations contained in this Agreement, including but not limited to Employee’s Release.
|
4.
|
Confidential Information
. The Employee acknowledges that she has obtained knowledge about confidential Company information. Such information may include proprietary information, trade secrets of the Company, customer information, technical information about Company products, strategic plans of Company businesses, price information, or employee information (hereinafter the "Confidential Information")
1
. Employee agrees to never use, publish or otherwise disclose any Confidential Information to anyone except upon prior written approval from the Company’s Senior Vice President, Human Resources. Employee understands that this includes, but is not limited to, any subsequent employer or competitor of the Company. The Employee understands that nothing herein prevents the Employee from disclosing a trade secret or other Confidential Information when reporting, in confidence, potential violations of law or regulation to U.S. government authorities, including but not limited to the Department of Justice and the Securities and Exchange Commission, or to a U.S. court. However, any and all Covered Claims (as defined in GE’s ADR procedure) are subject to, and must be brought consistent with, the terms of GE’s ADR procedure (see Paragraph 7.f.) If the Employee has any question regarding what data or information would be considered by the Company to be Confidential Information subject to this provision, the Employee agrees to contact the Company’s Senior Vice President, Human Resources for written clarification.
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5.
|
Employee Innovation and Proprietary Information Agreement (EIPIA), Non-Solicit Agreement, Non-Compete Agreement and Company Alternative Dispute Resolution (ADR) Program
. The EIPIA, any Non-Solicitation (whether applicable to clients, customers or employees) and Non-Compete Agreements, and the Company ADR Program will each remain in effect in accordance with their respective terms.
|
6.
|
Non-Solicitation and Non-competition
.
|
a.
|
Employee agrees that up until the Separation Date and continuing for a period of 12 months thereafter, she will not, without prior written approval from the Company’s Senior Vice-President, Human Resources: (a) directly or indirectly solicit or encourage any person who is an employee of the Company to terminate his or her employment relationship with, or accept any other employment outside of, the Company; (b) directly hire, or recommend or cause to be hired by an entity for which the Employee works, any person who is, or was within twelve (12) months before or after the Separation Date, an employee of the Company; or (c) provide any non-public information regarding an employee of the Company to any external person in connection with employment outside the Company, including, but not limited to, recruiters and prospective employers.
|
b.
|
The Employee agrees that, for a period of one year following the Separation Date, she will not enter into an employment or contractual relationship, either directly or indirectly, to provide services to any competitor of the Company without first speaking to and obtaining the consent of the Company’s Senior Vice President, Human Resources.
|
7.
|
Release of Claims
. The Employee and her heirs, assigns, and agents agree to and hereby do release, waive, and discharge the Company and Releasees (as defined below) from each and every waivable claim, action or right of any sort, known or unknown, suspected or unsuspected, arising on or before the Effective Date (as described below).
|
a.
|
Releasees
. “Releasees” include the following: (1) the Company; (2) all current and former Company parents, subsidiaries, related companies, affiliates, partnerships or joint ventures, and, with respect to each of them, their predecessors and successors; (3) with respect to each such entity identified in (1) and (2) above, all of its past, present, and future employees, officers, directors, stockholders, owners, representatives, assigns, attorneys, agents, insurers, employee benefit programs (and the trustees, administrators, fiduciaries and insurers of such programs), and (4) any other person acting by, through, under or in concert with any of the persons or entities listed in this paragraph, and their predecessors or successors.
|
b.
|
Claims Released.
The foregoing release includes, but is not limited to: (1) any claim of discrimination, harassment, or retaliation related to race, sex, pregnancy, religion, marital status, sexual orientation, national origin, handicap or disability, age, veteran status, or citizenship status or any other category protected by law; (2) any other claim based on a statutory prohibition or requirement; (3) any and all claims under any law of any nation, including any and all claims under any United States of America
|
c.
|
ADEA Claims
. The Employee acknowledges that she is releasing rights and claims under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”).
|
d.
|
Violating the Release
. If the Employee violates this release by suing a Releasee or causing a Releasee to be sued for any matter in the scope of the release, the Employee agrees to pay all costs and expenses of defending against the suit incurred by the Releasee, including reasonable attorneys’ fees, except to the extent that paying such fees, costs and expenses is prohibited by law or would result in the invalidation of the foregoing release.
|
e.
|
Participating with Government Agencies
. Nothing in this Agreement is intended to discourage or interfere with the Employee taking advantage of her right to file or participate in administrative claims or charges and/or communicating with government agencies or authorities, including any state or federal fair employment practices agency and law enforcement authorities. However, the Employee agrees she cannot receive any monetary or personal gain for such participation, to the maximum extent permitted by law. Accordingly, Employee shall be barred from seeking and expressly waives any and all waivable rights to any monetary, injunctive, or other personal relief for released claims, including but not limited to damages, remedies, or other such relief, any and all rights to which Employee hereby waives; provided however that this waiver shall not apply to participation in any investigation or proceeding conducted by, or to any communication with, the United States Securities and Exchange Commission Employee understands that such waiver does not extend to relief that cannot lawfully be waived.
|
f.
|
Alternative Dispute Resolution
. The Employee agrees to submit to the Company’s internal alternative dispute resolution process, “Solutions” (for purposes of this Agreement called “Company ADR”), including final and binding arbitration, any claims not released by this Agreement and covered by such Company ADR process, or any claims that arise after the Effective Date (as described below) of this Agreement, including, but not limited to, disputes about the Agreement itself to the maximum extent permitted by law. Employee understands that this means she is giving up the right to a jury trial for any claims not released by this Agreement or that arise after the Effective Date, to
the maximum extent permitted by law, and that all such claims submitted to arbitration pursuant to the Company ADR will be decided solely by an arbitrator. If Employee needs another copy of the Company ADR guidelines, she can access it online, if available, or ask her, Company HRM (or that person’s successor, if that person is no longer in the role) for a copy.
|
g.
|
Supplemental Release
. The Employee agrees that on or immediately after the Separation Date, she will execute a supplemental release covering the period from the Effective Date to the Separation Date. The Employee agrees that all of the covenants that relate to the Company’s obligations on or after the Separation Date will be contingent on her execution of the Supplemental Release, which will be in the form of Exhibit B to this Agreement.
|
8.
|
Employee Availability
. The Employee agrees to make herself reasonably available to the Company to respond to requests by the Company for information in any way pertaining to the Company that may be within the knowledge of the Employee. Employee will cooperate fully with the Company in connection with any and all existing or future litigation or investigations brought by or against the Company or any Releasees, whether administrative, civil or criminal in nature. Employee agrees to cooperate to the extent the Company reasonably deems necessary. The Company will reimburse the Employee for reasonable out-of-pocket expenses incurred as a result of such cooperation.
|
9.
|
Non-Disparagement
. The Employee agrees, subject to any obligations she may have under applicable law, that she will not make or cause to be made any statements or take any actions that disparage or in any way damage the reputation of the Company or any of its affiliates, subsidiaries, agents, officers, directors or employees. In the event such a communication is made to anyone, including but not limited to the media, public interest groups or publishing companies, it will be considered a material breach of the terms of this Agreement. Employee understands that nothing in this paragraph prevents the Employee from disclosing statements, of any nature, regarding possible violations of law or regulation to government agencies or authorities.
|
10.
|
Severability of Provisions
. In the event that any provision (other than Paragraph 7) in this Agreement is determined to be legally invalid or unenforceable by an arbitrator or any court of competent jurisdiction, in accordance with the Alternative Dispute Resolution paragraphs above, and cannot be modified to be enforceable, the affected provision shall be stricken from the Agreement. The remaining terms of the Agreement and its enforceability shall remain unaffected.
|
11.
|
Non-Transfer of GE Information
. Employee represents that consistent with her obligations under the EIPIA and other Company policies she has not copied or transferred any GE Confidential Information to any external storage device, external personal email or other non GE-authorized storage location in anticipation of or connection with her separation, without the authorization of her Manager or her Company HRM. Such GE Confidential Information includes but is not limited to documents and data containing work product that was prepared for the Company by Employee or others during her employment. Employee represents that any material so transferred or copied by her, or on her behalf, is of a solely personal or social nature to Employee or relates to Company-provided compensation or benefits received by her or her dependents and that if she has any questions regarding the prohibitions in this paragraph she will discuss those with her the Senior Vice President of Human Resources prior to signing this Agreement. If Employee possesses Confidential Information stored on personal computer media, Employee shall so advise the Company upon execution of this Agreement, and work with the Company to ensure the location of all such data is fully disclosed by Employee to the Company, retrieved by the Company in a forensically sound manner, and permanently deleted by the Company or its designee from his personal computer media prior to the Separation Date.
|
12.
|
Return of Company Property
. The Employee agrees that by the Separation Date she will have returned to the Company any and all Company property or equipment in her possession, including but not limited to: any computer, PDA, memory device, computer related hardware, printer, scanner, phone, credit card and dial comm card assigned to her. The Employee agrees that as of the Separation Date she will have no outstanding balance on her corporate credit card or other expenses for which appropriate T&L accounting has not been submitted.
|
13.
|
Confidentiality
. The Employee shall keep strictly confidential all the terms and conditions, including amounts, in this Agreement and shall not disclose them to any person other than the Employee's spouse, the Employee’s legal or financial advisor, or U.S. governmental officials who seek such information in the course of their official duties, unless compelled by law to do so. If a person not a party to this Agreement requests or demands, by subpoena or otherwise, that the Employee disclose or produce this Agreement or any terms or conditions thereof, the Employee shall immediately notify the Company and shall give the Company an opportunity to respond to such notice. The Employee shall not take any action
|
14.
|
Breach by Employee
. The Company’s obligations to the Employee after the Effective Date are contingent on Employee fulfilling her obligations under this Agreement. If the Employee commits any material breach of this Agreement, the Company shall have the right to immediately cancel its obligations under this Agreement, and the Employee will be required to reimburse the Company for any and all compensation and benefits (other than those already vested) paid as consideration under the terms of this Agreement, except to the extent that such reimbursement is prohibited by law or would result in the invalidation of the release in Paragraph 7 above. In the event such breach is established after arbitration in accordance with Company ADR, the Employee shall indemnify and hold Company harmless from any loss, claim or damages, including without limitation all reasonable attorneys’ fees, costs and expenses incurred in enforcing its rights under this Agreement.
|
15.
|
Descriptive Headings
. The paragraph headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
|
16.
|
Entire Agreement
. This Agreement sets forth the entire agreement and understanding between the parties. The parties agree they have not relied on any oral statements that are not included in this Agreement. This Agreement supersedes all prior agreements and understandings concerning the subject matter of this Agreement. Any modifications to this Agreement must be in writing, must reference this Agreement, and must be signed by Employee and an authorized employee or agent of the Company.
|
17.
|
Applicable Law
. This Agreement shall be construed, interpreted and applied in accordance with the law of the State of New York.
|
18.
|
Compliance with Section 409A of the Internal Revenue Code.
This Agreement is intended to satisfy the requirements of Section 409A of the Internal Revenue Code (and any related guidance issued by the IRS or the Treasury Department), so as to avoid the imposition of any additional taxes, penalties or interest under those rules. Accordingly, this Agreement shall be modified, as determined by the Company, to the extent necessary to avoid the imposition of any such additional taxes, penalties or interest. The Company may take any such action without the consent of, or notice to, the Employee. Consistent with the foregoing all payments under this Agreement shall be delayed to the extent necessary to comply with the rules in Section 409A(a)(2)(B)(i) (generally requiring a delay of six months after separation from service for certain payments made to top-50 officers determined in accordance with Company rules).
|
19.
|
Format.
The Employee and the Company agree that a facsimile (“fax”), photographic, or electronic copy of this Agreement shall be as valid as the original.
|
Elizabeth Comstock
|
|
General Electric Company
|
||
By:
|
/s/ Elizabeth J. Comstock
|
/s/ Susan Peters
|
||
Date:
|
October 2, 2017
|
Date:
|
October 6, 2017
|
Name:
|
Elizabeth Comstock
|
|
SSO:200001033
|
|
1.
|
A survivor benefit will be paid under the GE Pension Plan to your surviving spouse if you die before your pension commences under that Plan (i.e., the first of the month after you would have reached age 60). The survivor benefit starts when your pension under the GE Pension Plan would have started had you survived.
|
2.
|
To provide for an immediate and uninterrupted survivor benefit starting on the first of the month following your death, you can elect a survivor benefit with respect to the pre-age 60 Allowance shown in (A) and (B) above. You may also waive the survivor benefit with respect to such Allowance with your spouse's consent in which case no benefits will be paid pursuant to this Agreement if your death occurs before the first of the month after you would have reached age 60. If you elect this survivor benefit, your pre-age 60 Allowance will be paid as follows:
|
3.
|
The pre-age 60 Allowance shown in (A) and (B) above shall be reduced in the same manner as a pension is reduced to provide a 50% survivor benefit under Section IX (1) of the GE Pension Plan to a participant who is age 60 and taking into account the difference in age between you and your spouse.
|
4.
|
If you die before the first of the month following attainment of age 60, a benefit shall be paid to your surviving spouse equal to 50% of your reduced pre-age 60 Allowance under (A) and (B) above. The amount payable under this survivor benefit includes any benefit available to your surviving spouse in the form of a monthly income under the GE Pension Plan but this election will have no effect upon the amount of pension payable to you on and after the first of the month after you reach after age 60. If you die prior to such first of the month following attainment of age 60, the 50% survivor benefit payable to your surviving spouse
|
1.
|
On the first of the month after you reach age 60, the Allowance shown in (A) above will stop and your pension under the GE Pension Plan will begin. If you are married at that time, such pension will provide automatically for the payment of a reduced 50% joint and survivor annuity with a lifetime benefit to your surviving spouse after your subsequent death. During the 180-day period ending on the date such pension starts, you and your spouse can waive this payment method in favor of an optional method. Your GE Benefits Handbook and distribution election forms explain the conditions applicable to the survivor benefit and its waiver.
|
2.
|
The Allowance shown in (B) above includes the vesting of your benefit under the GE Supplementary Pension Plan. Such vested benefit also begins on the first of the month after you have reached age 60 and is payable in accordance with the terms of the GE Supplementary Pension Plan. If you are married at that time, such benefit will also provide automatically for the payment of a reduced 50% joint and survivor annuity with a lifetime benefit to your surviving spouse after your subsequent death. During the 180-day period ending on the date such pension starts, you and your spouse can waive this payment method in favor of an optional method. Your distribution election forms explain the conditions applicable to the survivor benefit and its waiver.
|
Elizabeth Comstock
|
(Spouse of Employee)
|
Elizabeth Comstock
|
|
GENERAL ELECTRIC COMPANY
|
||
By:
|
/s/ Elizabeth J. Comstock
|
/s/ Susan Peters
|
||
Date:
|
Oct. 2, 2017
|
Date:
|
Oct. 6., 2017
|
A.
|
Aggregate Amount of Loan
:
|
B.
|
Date of Loan:
|
C.
|
Type of Loan:
|
D.
|
Interest Period (if a Eurodollar Loan):
|
E.
|
Interest Payment Dates:
|
F.
|
Availability Termination Date/Maturity (subject to extension by the Borrower if provided for under the Credit Agreement):
|
G.
|
Location and number of Borrower’s account to which
proceeds of
Loan
are to be disbursed:
|
CITIBANK, N.A.
|
|
By:
|
|
|
Name:
|
|
Title:
|
CITIBANK, N.A.
|
|
By:
|
|
|
Name:
|
|
Title:
|
1.
|
The Revolving Credit Agreement, dated the date hereof, between General Electric Company as the Borrower and Morgan Stanley Senior Funding, Inc. as the Bank.
|
2.
|
The Revolving Credit Agreement, dated the date hereof, between General Electric Company as the Borrower and Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC, each as a Lender and collectively, the Lenders.
|
(A)
|
increase the Commitment of such Lender;
|
(B)
|
reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable in connection therewith;
|
(C)
|
postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment; or
|
(D)
|
change any of the provisions of this Section.
|
A.
|
Aggregate Amount of Loan
:
|
B.
|
Date of Loan:
|
C.
|
Type of Loan:
|
D.
|
Interest Period (if a Eurodollar Loan):
|
E.
|
Interest Payment Dates:
|
F.
|
Availability Termination Date/Maturity (subject to extension by the Borrower if provided for under the Credit Agreement):
|
G.
|
Location and number of Borrower’s account to which
proceeds of
Loan
are to be disbursed:
|
[BANK]
|
|
By:
|
|
|
Name:
|
|
Title:
|
[BANK]
|
|
By:
|
|
|
Name:
|
|
Title:
|
1.
|
The Revolving Credit Agreement, dated the date hereof, between General Electric Company as the Borrower and Morgan Stanley Senior Funding, Inc. as the Bank.
|
2.
|
The Revolving Credit Agreement, dated the date hereof, between General Electric Company as the Borrower and Citibank, N.A. as the Bank.
|
Lender
|
Initial Commitment
|
Goldman Sachs Bank USA
|
$2,350,000,000
|
Goldman Sachs Lending Partners LLC
|
$2,650,000,000
|
(A)
|
increase the Commitment of the Bank;
|
(B)
|
reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable in connection therewith;
|
(C)
|
postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment; or
|
(D)
|
change any of the provisions of this
Section 17
.
|
A.
|
Aggregate Amount of Loan
:
|
B.
|
Date of Loan:
|
C.
|
Type of Loan:
|
D.
|
Interest Period (if a Eurodollar Loan):
|
E.
|
Interest Payment Dates:
|
F.
|
Availability Termination Date/Maturity (subject to extension by the Borrower if provided for under the Credit Agreement):
|
G.
|
Location and number of Borrower’s account to which
proceeds of
Loan
are to be disbursed:
|
MORGAN STANLEY SENIOR FUNDING, INC.
|
|
By:
|
|
|
Name:
|
|
Title:
|
MORGAN STANLEY SENIOR FUNDING, INC.
|
|
By:
|
|
|
Name:
|
|
Title:
|
1.
|
The Revolving Credit Agreement, dated the date hereof, between General Electric Company as the Borrower and Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC, each as a Lender and collectively, the Lenders.
|
2.
|
The Revolving Credit Agreement, dated the date hereof, between General Electric Company as the Borrower and Citibank, N.A. as the Bank.
|
General Electric Company
|
|||||||||||||||
Computation of Ratio of Earnings to Fixed Charges
|
|||||||||||||||
|
|
|
|
|
|
||||||||||
|
Years ended December 31
|
||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
|
|
|
|
|
|
||||||||||
General Electric Company and
|
|
|
|
|
|
||||||||||
consolidated affiliates
|
|
|
|
|
|
||||||||||
Earnings(a)
|
$
|
(8,875
|
)
|
$
|
8,689
|
|
$
|
7,991
|
|
$
|
9,769
|
|
$
|
9,040
|
|
Plus:
|
|
|
|
|
|
||||||||||
Interest and other financial charges
|
|
|
|
|
|
||||||||||
included in expense(b)
|
4,975
|
|
5,765
|
|
8,366
|
|
9,482
|
|
10,116
|
|
|||||
One-third of rental expense(c)
|
511
|
|
432
|
|
499
|
|
473
|
|
504
|
|
|||||
|
|
|
|
|
|
||||||||||
Adjusted “earnings”
|
$
|
(3,389
|
)
|
$
|
14,886
|
|
$
|
16,856
|
|
$
|
19,724
|
|
$
|
19,660
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
||||||||||
Interest and other financial charges
|
|
|
|
|
|
||||||||||
included in expense(b)
|
$
|
4,975
|
|
$
|
5,765
|
|
$
|
8,366
|
|
$
|
9,482
|
|
$
|
10,116
|
|
Interest capitalized
|
42
|
|
35
|
|
26
|
|
25
|
|
29
|
|
|||||
One-third of rental expense(c)
|
511
|
|
432
|
|
499
|
|
473
|
|
504
|
|
|||||
|
|
|
|
|
|
||||||||||
Total fixed charges
|
$
|
5,528
|
|
$
|
6,232
|
|
$
|
8,891
|
|
$
|
9,980
|
|
$
|
10,649
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
-0.61
|
|
2.39
|
|
1.90
|
|
1.98
|
|
1.85
|
|
(a)
|
Earnings before income taxes, noncontrolling interests, discontinued operations and undistributed earnings of equity investees.
|
(b)
|
Included interest on tax deficiencies and interest on discontinued operations.
|
(c)
|
Considered to be representative of interest factor in rental expense.
|
General Electric Company
|
|||||||||||||||
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
|
|||||||||||||||
|
|
|
|
|
|
||||||||||
|
Years ended December 31
|
||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
|
|
|
|
|
|
||||||||||
General Electric Company and
|
|
|
|
|
|
||||||||||
consolidated affiliates
|
|
|
|
|
|
||||||||||
Earnings(a)
|
$
|
(8,875
|
)
|
$
|
8,689
|
|
$
|
7,991
|
|
$
|
9,769
|
|
$
|
9,040
|
|
Plus:
|
|
|
|
|
|
||||||||||
Interest and other financial charges
|
|
|
|
|
|
||||||||||
included in expense(b)
|
4,975
|
|
5,765
|
|
8,366
|
|
9,482
|
|
10,116
|
|
|||||
One-third of rental expense(c)
|
511
|
|
432
|
|
499
|
|
473
|
|
504
|
|
|||||
|
|
|
|
|
|
||||||||||
Adjusted “earnings”
|
$
|
(3,389
|
)
|
$
|
14,886
|
|
$
|
16,856
|
|
$
|
19,724
|
|
$
|
19,660
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
||||||||||
Interest and other financial charges
|
|
|
|
|
|
||||||||||
included in expense(b)
|
$
|
4,975
|
|
$
|
5,765
|
|
$
|
8,366
|
|
$
|
9,482
|
|
$
|
10,116
|
|
Interest capitalized
|
42
|
|
35
|
|
26
|
|
25
|
|
29
|
|
|||||
One-third of rental expense(c)
|
511
|
|
432
|
|
499
|
|
473
|
|
504
|
|
|||||
|
|
|
|
|
|
||||||||||
Total fixed charges
|
$
|
5,528
|
|
$
|
6,232
|
|
$
|
8,891
|
|
$
|
9,980
|
|
$
|
10,649
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
-0.61
|
|
2.39
|
|
1.90
|
|
1.98
|
|
1.85
|
|
|||||
|
|
|
|
|
|
||||||||||
Preferred stock dividend requirements
|
$
|
436
|
|
$
|
656
|
|
$
|
18
|
|
-
|
|
-
|
|
||
|
|
|
|
|
|
||||||||||
Ratio of earnings before provision for
|
|
|
|
|
|
||||||||||
income taxes to earnings from
|
|
|
|
|
|
||||||||||
continuing operations
|
1.53
|
|
0.95
|
|
4.82
|
|
1.08
|
|
1.15
|
|
|||||
|
|
|
|
|
|
||||||||||
Preferred stock dividend factor on pre-tax basis
|
$
|
667
|
|
$
|
623
|
|
$
|
87
|
|
-
|
|
-
|
|
||
Fixed charges
|
5,528
|
|
6,232
|
|
8,891
|
|
9,980
|
|
10,649
|
|
|||||
|
|
|
|
|
|
||||||||||
Total fixed charges and preferred stock
|
|
|
|
|
|
||||||||||
dividend requirements
|
$
|
6,195
|
|
$
|
6,855
|
|
$
|
8,978
|
|
$
|
9,980
|
|
$
|
10,649
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to combined fixed
|
|
|
|
|
|
||||||||||
charges and preferred stock dividends
|
-0.55
|
|
2.17
|
|
1.88
|
|
1.98
|
|
1.85
|
|
(a)
|
Earnings before income taxes, noncontrolling interests, discontinued operations and undistributed earnings of equity investees.
|
(b)
|
Included interest on tax deficiencies and interest on discontinued operations.
|
(c)
|
Considered to be representative of interest factor in rental expense.
|
|
|
Percentage of voting
|
|
|
|
|
securities directly or
|
|
State or Country
|
|
|
indirectly owned by
|
|
of incorporation
|
|
|
registrant (1)
|
|
or organization
|
|
|
|
|
|
ALSTOM Power Systems
|
|
80
|
|
France
|
ALSTOM UK Holdings Ltd.
|
|
87
|
|
United Kingdom & Northern Ireland
|
Amersham Health Norge AS
|
|
100
|
|
Norway
|
Baker Hughes, a GE company, LLC
|
|
63
|
|
Delaware
|
Bently Nevada, LLC
|
|
63
|
|
Delaware
|
CALGEN Holdings, Inc.
|
|
100
|
|
Delaware
|
Cardinal Cogen, Inc.
|
|
100
|
|
Delaware
|
Caribe GE International of Puerto Rico, Inc.
|
|
100
|
|
Puerto Rico
|
Concept Laser GmbH
|
|
75
|
|
Germany
|
Datex-Ohmeda, Inc.
|
|
100
|
|
Delaware
|
Dresser, LLC
|
|
63
|
|
Delaware
|
Druck, LLC
|
|
63
|
|
Connecticut
|
FieldCore Service, Inc.
|
|
100
|
|
Delaware
|
GE Aero Energy Power, LLC
|
|
100
|
|
Delaware
|
GE Albany CH GmbH
|
|
100
|
|
Switzerland
|
GE Albany C.V.
|
|
100
|
|
Netherlands
|
GE Albany Global Holdings BV
|
|
100
|
|
Netherlands
|
GE Albany US Holdings LLC
|
|
100
|
|
Delaware
|
GE Aviation Systems Group Limited
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE Aviation Systems North America LLC
|
|
100
|
|
Delaware
|
GE Aviation UK
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE Business Services GmbH
|
|
100
|
|
Germany
|
GE Caledonian Limited
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE Canada Holdings, Inc.
|
|
100
|
|
Delaware
|
GE Capital Fleet Services International Holdings, LLC
|
|
100
|
|
Delaware
|
GE Capital Global Financial Holdings, LLC
|
|
100
|
|
Connecticut
|
GE Capital Global Holdings, LLC
|
|
100
|
|
Delaware
|
GE Capital UK Finance
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE Celma LTDA
|
|
100
|
|
Brazil
|
GE Digital Holdings LLC
|
|
100
|
|
Delaware
|
GE Distributed Power, Inc.
|
|
100
|
|
Delaware
|
GE Drives & Controls, Inc.
|
|
100
|
|
Delaware
|
GE Druck Holdings Limited
|
|
63
|
|
United Kingdom & Northern Ireland
|
GE Energias Renovaveis Ltda.
|
|
75
|
|
Brazil
|
GE Energy Europe B.V.
|
|
63
|
|
Netherlands
|
GE Energy Netherlands, B.V.
|
|
100
|
|
Netherlands
|
GE Energy Parts, Inc.
|
|
100
|
|
Delaware
|
GE Energy Power Conversion GmbH
|
|
100
|
|
Germany
|
|
|
Percentage of voting
|
|
|
GE Energy Power Conversion Group
|
|
100
|
|
France
|
GE Energy Power Conversion UK Holdings Limited
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE Energy Power Conversion USA Inc.
|
|
100
|
|
Delaware
|
GE Energy Products France SNC
|
|
100
|
|
France
|
GE Energy Services, Inc.
|
|
100
|
|
Delaware
|
GE Energy Switzerland GmbH
|
|
100
|
|
Switzerland
|
GE Energy (USA), LLC
|
|
100
|
|
Delaware
|
GE Engine Services, LLC
|
|
100
|
|
Delaware
|
GE Engine Services - Dallas, LP
|
|
100
|
|
Delaware
|
GE Engine Services Distribution, L.L.C.
|
|
100
|
|
Delaware
|
GE Engine Services - Miami, Inc.
|
|
100
|
|
Delaware
|
GE Engine Services UNC Holding I, Inc.
|
|
100
|
|
Delaware
|
GE Europe Holdings LLC
|
|
100
|
|
Delaware
|
GE Financial Assurance Holdings, LLC
|
|
100
|
|
Delaware
|
GE Financial Funding Unlimited Company
|
|
100
|
|
Ireland
|
GE Financial Ireland Unlimited Company
|
|
100
|
|
Ireland
|
GE France
|
|
100
|
|
France
|
GE France Financial Holdings, LLC
|
|
100
|
|
Delaware
|
GE Gas Turbines (Greenville) L.L.C.
|
|
100
|
|
Delaware
|
GE Global Parts & Products GmbH
|
|
100
|
|
Switzerland
|
GE Global Sourcing LLC
|
|
100
|
|
Delaware
|
GE Grid Alliance B.V.
|
|
50
|
|
Netherlands
|
GE Grid Solutions UK B.V.
|
|
87
|
|
Netherlands
|
GE Healthcare AS
|
|
100
|
|
Norway
|
GE Healthcare Bio-Sciences AB
|
|
100
|
|
Sweden
|
GE Healthcare BVBA
|
|
100
|
|
Belgium
|
GE Healthcare European Holdings SARL
|
|
100
|
|
Luxembourg
|
GE Healthcare Finland Oy
|
|
100
|
|
Finland
|
GE Healthcare Holding Norge AS
|
|
100
|
|
Norway
|
GE Healthcare Japan Corporation
|
|
100
|
|
Japan
|
GE Healthcare Life Sciences Holding AB
|
|
100
|
|
Sweden
|
GE Healthcare Limited
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE Healthcare Norge AS
|
|
100
|
|
Norway
|
GE Healthcare Sweden Holding AB
|
|
100
|
|
Sweden
|
GE Healthcare USA Holding LLC
|
|
100
|
|
Delaware
|
GE HOLDINGS LUXEMBOURG & CO S.a.r.l.
|
|
100
|
|
Luxembourg
|
GE Holdings (US), Inc.
|
|
100
|
|
Delaware
|
GE Hungary Kft.
|
|
100
|
|
Hungary
|
GE Industrial Consolidation Limited
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE Infrastructure Aviation
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE Infrastructure, LLC
|
|
100
|
|
Delaware
|
GE Infrastructure Technology International LLC
|
|
100
|
|
Delaware
|
GE Inspection and Repair Services Limited
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE Intelligent Platforms, Inc.
|
|
100
|
|
Delaware
|
GE Investments, Inc.
|
|
100
|
|
Delaware
|
GE Italia Holding S.r.l.
|
|
100
|
|
Italy
|
GE Japan Investments Coöperatief U.A.
|
|
100
|
|
Netherlands
|
GE Jenbacher GmbH & Co OG
|
|
100
|
|
Austria
|
GE LIGHTING SYSTEMS S.R.L.
|
|
100
|
|
Italy
|
|
|
Percentage of voting
|
|
|
GE Maintenance Services, Inc.
|
|
100
|
|
Delaware
|
GE Media Holdings, Inc.
|
|
100
|
|
Delaware
|
GE Medical Systems Global Technology Company, LLC
|
|
100
|
|
Delaware
|
GE Medical Systems Information Technologies, Inc.
|
|
100
|
|
Wisconsin
|
GE Medical Systems, Inc.
|
|
100
|
|
Delaware
|
GE Medical Systems, L.L.C.
|
|
100
|
|
Delaware
|
GE Medical Systems Societe en Commandite Simple
|
|
100
|
|
France
|
GE Medical Systems, Ultrasound & Primary Care Diagnostics, LLC
|
|
100
|
|
Delaware
|
GE Mexico, S.A. de C.V.
|
|
100
|
|
Mexico
|
GE Military Systems
|
|
100
|
|
Delaware
|
GE Oil & Gas Angola, Limitada
|
|
63
|
|
Angola
|
GE Oil & Gas Pressure Control LP
|
|
63
|
|
Texas
|
GE Oil & Gas US Holdings I, Inc.
|
|
100
|
|
Delaware
|
GE Oil & Gas US Holdings IV, Inc.
|
|
100
|
|
Delaware
|
GE Pacific Holdings II B.V.
|
|
100
|
|
Netherlands
|
GE Pacific Holdings Pte. Ltd.
|
|
100
|
|
Singapore
|
GE Pacific Private Limited
|
|
100
|
|
Singapore
|
GE Packaged Power, Inc.
|
|
100
|
|
Delaware
|
GE Packaged Power, L.P.
|
|
100
|
|
Delaware
|
GE Power Netherlands B.V.
|
|
100
|
|
Netherlands
|
GE Renewable Holding B.V.
|
|
50
|
|
Netherlands
|
GE Renewables North America, LLC
|
|
100
|
|
Delaware
|
GE Repair Solutions Singapore Pte. Ltd.
|
|
100
|
|
Singapore
|
GE Transportation Parts, LLC
|
|
100
|
|
Delaware
|
GE Treasury Services Industrial Ireland Unlimited Company
|
|
100
|
|
Ireland
|
GE UK Group
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE UK Holdings
|
|
100
|
|
United Kingdom & Northern Ireland
|
GE WIND France SAS
|
|
50
|
|
France
|
GEAE Technology, Inc.
|
|
100
|
|
Delaware
|
GEAST SAS
|
|
80
|
|
France
|
GEFH AS
|
|
100
|
|
Norway
|
GEH HOLDINGS
|
|
100
|
|
United Kingdom & Northern Ireland
|
GENE Holding LLC
|
|
100
|
|
Delaware
|
General Electric Austria GmbH
|
|
100
|
|
Austria
|
General Electric (Bermuda) Ltd.
|
|
100
|
|
Bermuda
|
General Electric Canada Company
|
|
100
|
|
Canada
|
General Electric Canada Holdings Company
|
|
100
|
|
Canada
|
General Electric Deutschland Holding GmbH
|
|
100
|
|
Germany
|
GENERAL ELECTRIC ENERGY UK LIMITED
|
|
87
|
|
United Kingdom & Northern Ireland
|
General Electric Europe Holdings C.V.
|
|
100
|
|
Netherlands
|
General Electric Financing C.V.
|
|
100
|
|
Netherlands
|
General Electric Foreign Sales Corporation
|
|
100
|
|
The Bahamas & Eleuthera Island
|
General Electric International (Benelux) B.V.
|
|
100
|
|
Netherlands
|
General Electric International, Inc.
|
|
100
|
|
Delaware
|
General Electric International Japan Investments I SARL
|
|
100
|
|
Luxembourg
|
General Electric International Operations Company, Inc.
|
|
100
|
|
Delaware
|
General Electric Services (Bermuda) Ltd.
|
|
100
|
|
Bermuda
|
General Electric Services Luxembourg SARL
|
|
100
|
|
Luxembourg
|
General Electric (Switzerland) GmbH
|
|
100
|
|
Switzerland
|
|
|
Percentage of voting
|
|
|
General Electric Technology GmbH
|
|
100
|
|
Switzerland
|
GMC Consolidation LLC
|
|
100
|
|
Delaware
|
Grid Solutions SAS
|
|
50
|
|
France
|
Grid Solutions (U.S.) LLC
|
|
50
|
|
Delaware
|
IDX Systems Corporation
|
|
100
|
|
Vermont
|
Inland Empire Energy Center, LLC
|
|
100
|
|
Delaware
|
Inland Empire Holding Limited I, Inc.
|
|
100
|
|
Delaware
|
International General Electric (U.S.A.)
|
|
100
|
|
United Kingdom &
North Ireland
|
LM Wind Power Holding A/S
|
|
100
|
|
Denmark
|
MRA Systems, LLC
|
|
100
|
|
Delaware
|
Nuclear Fuel Holding Co., Inc.
|
|
100
|
|
Delaware
|
Nuovo Pignone Holding S.p.a.
|
|
63
|
|
Italy
|
Nuovo Pignone International S.r.l.
|
|
63
|
|
Italy
|
OEC Medical Systems, Inc.
|
|
100
|
|
Delaware
|
One GE Healthcare UK
|
|
100
|
|
United Kingdom & Northern Ireland
|
Panametrics Limited
|
|
63
|
|
Bermuda
|
Patent Licensing International, Inc.
|
|
100
|
|
Delaware
|
PII Limited
|
|
63
|
|
United Kingdom & Northern Ireland
|
Power Holding LLC
|
|
100
|
|
Delaware
|
Reuter-Stokes, LLC
|
|
63
|
|
Delaware
|
Ropcor, Inc.
|
|
100
|
|
Delaware
|
Unison Industries, LLC
|
|
100
|
|
Delaware
|
Viceroy, Inc.
|
|
100
|
|
Delaware
|
Whatman Limited
|
|
100
|
|
United Kingdom & Northern Ireland
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
With respect to certain companies, shares in names of nominees and qualifying shares in names of directors are included in above percentages.
|
/s/ KPMG LLP
|
KPMG LLP
|
|
|
/s/ John L. Flannery
|
|
|
||
|
|
John L. Flannery
|
|
|
||
|
|
Chairman of the Board
|
|
|
||
|
|
(Principal Executive
|
|
|
||
|
|
Officer and Director)
|
|
|
||
|
|
|
||||
|
|
|
||||
/s/ Jamie S. Miller
|
|
/s/ Jan R. Hauser
|
||||
Jamie S. Miller
|
|
Jan R. Hauser
|
||||
Senior Vice President and
|
|
Vice President and Controller
|
||||
Chief Financial Officer
|
|
(Principal Accounting Officer)
|
||||
(Principal Financial Officer)
|
|
|
/s/ Sébastien M. Bazin
|
|
/s/ Risa Lavizzo-Mourey
|
Sébastien M. Bazin
Director
|
|
Risa Lavizzo-Mourey
Director |
|
||
|
|
|
|
|
|
/s/ W. Geoffrey Beattie
|
|
/s/ Rochelle B. Lazarus
|
W. Geoffrey Beattie
Director
|
|
Rochelle B. Lazarus
Director |
|
||
|
|
|
|
|
|
/s/ John J. Brennan
|
|
/s/ James J. Mulva
|
John J. Brennan
Director
|
|
James J. Mulva
Director |
|
||
|
|
|
|
|
|
/s/ Francisco D’Souza
|
|
/s/ James E. Rohr
|
Francisco D’Souza
Director
|
|
James E. Rohr
Director |
|
|
|
|
|
|
/s/ Edward P. Garden
|
|
/s/ Mary L. Schapiro
|
Edward P. Garden
Director
|
|
Mary L. Schapiro
Director |
|
||
|
|
|
|
|
|
/s/ Peter B. Henry
|
|
/s/ James S. Tisch
|
Peter B. Henry
Director |
|
James S. Tisch
Director |
|
||
|
|
|
|
|
|
/s/ Susan Hockfield
|
|
|
Susan Hockfield
Director |
|
|
1.
|
I have reviewed this annual report on Form 10-K of General Electric Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John L. Flannery
|
John L. Flannery
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of General Electric Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Jamie S. Miller
|
Jamie S. Miller
|
Chief Financial Officer
|
(1)
|
The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
|
/s/ John L. Flannery
|
|
John L. Flannery
|
|
Chief Executive Officer
|
|
/s/ Jamie S. Miller
|
|
Jamie S. Miller
|
|
Chief Financial Officer
|
|
FIVE-YEAR PERFORMANCE GRAPH
|
|
|
|
|||||||||||||||
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
GE
|
$
|
100
|
|
$
|
138
|
|
$
|
129
|
|
$
|
164
|
|
$
|
172
|
|
$
|
98
|
|
S&P 500
|
100
|
|
132
|
|
150
|
|
153
|
|
171
|
|
208
|
|
||||||
DJIA
|
100
|
|
130
|
|
143
|
|
143
|
|
167
|
|
213
|
|
STOCK PRICE RANGE AND DIVIDENDS
|
|
|
|
||||||
|
Common stock market price
|
Dividends
|
|
||||||
|
High
|
|
Low
|
|
declared
|
|
|||
|
|
|
|
||||||
2017
|
|
|
|
||||||
Fourth quarter
|
$
|
24.89
|
|
$
|
17.25
|
|
$
|
0.12
|
|
Third quarter
|
27.59
|
|
23.58
|
|
0.24
|
|
|||
Second quarter
|
30.54
|
|
26.79
|
|
0.24
|
|
|||
First quarter
|
31.84
|
|
29.25
|
|
0.24
|
|
|||
|
|
|
|
||||||
2016
|
|
|
|
||||||
Fourth quarter
|
$
|
32.38
|
|
$
|
28.19
|
|
$
|
0.24
|
|
Third quarter
|
33.00
|
|
29.40
|
|
0.23
|
|
|||
Second quarter
|
32.02
|
|
29.06
|
|
0.23
|
|
|||
First quarter
|
32.05
|
|
27.10
|
|
0.23
|
|