|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
Three months ended March 31
|
|
|
|
2021
|
2020
|
|
|
|
Consolidated revenues
|
$
|
17,118
|
|
$
|
19,490
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
7,971
|
|
9,097
|
|
|
|
|
Services
|
8,358
|
|
9,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GE Industrial revenues
|
$
|
16,329
|
|
$
|
18,844
|
|
|
|
|
|
|
|
|
|
|
GE Capital revenues
|
$
|
878
|
|
$
|
837
|
|
|
|
|
For the three months ended March 31, 2021, Consolidated revenues were down $2.4 billion, driven by a decrease in GE Industrial revenues of $2.5 billion partially offset by an increase in GE Capital revenues.
GE Industrial revenues decreased $2.5 billion (13%), with decreases in services and equipment. The decrease in services was primarily at Aviation, due to lower commercial spare part shipments and decreased shop visits, partially offset by an increase at Power driven by Gas Power services revenues. The decrease in equipment was primarily at Aviation, due to fewer commercial install and spare engine shipments; at Healthcare, due to the disposition of the BioPharma business; and at Power, due to decreases in Steam Power and Gas Power; partially offset by an increase in Renewable Energy. The decrease in GE Industrial revenues included the net effects of dispositions of $1.1 billion and an increase from foreign currency translation of $0.3 billion. Excluding the effects of acquisitions, dispositions and foreign currency translation, GE Industrial organic revenues* decreased $1.7 billion (10%), with a decrease in services revenues of $1.4 billion (14%) and equipment revenues of $0.4 billion (5%). GE Industrial organic revenues* decreased at Aviation and Power, partially offset by an increase at Healthcare. Healthcare organic revenue* increased $0.3 billion (7%) due to increased demand for Healthcare Systems (HCS) products, and a return to pre-pandemic volume in Pharmaceutical Diagnostics (PDx).
GE Capital revenues increased 5%, primarily as a result of lower marks and impairments primarily in Insurance, partially offset by lower revenue at Working Capital Solutions (WCS) due to lower volume and lower gains and project revenues at EFS.
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) AND EARNINGS (LOSS) PER SHARE
|
Three months ended March 31
|
|
|
(Per-share in dollars and diluted)
|
2021
|
2020
|
|
|
|
Continuing earnings (loss)
|
$
|
20
|
|
$
|
6,175
|
|
|
|
|
Continuing earnings per share (loss)
|
$
|
—
|
|
$
|
0.70
|
|
|
|
|
For the three months ended March 31, 2021, Consolidated continuing earnings decreased $6.2 billion due to a decrease in GE Industrial profit.
GE Industrial profit decreased $6.2 billion driven by the nonrecurrence of the $12.3 billion gain on the sale of our BioPharma business and lower profit at Aviation, partially offset by a lower net loss on our investment in Baker Hughes of $6.0 billion, a decrease in adjusted total Corporate operating costs* of $0.2 billion, a decrease in non-operating benefit cost of $0.2 billion, and a decrease in interest and other financial charges of $0.1 billion. GE Industrial profit margin was 2.3%, a decrease from 34.9%, primarily due to the same net decreases as described above. Adjusted GE Industrial profit* was $0.8 billion, an increase of $0.1 billion organically*, due to increases at Healthcare, Renewable Energy and Power, partially offset by a decrease at Aviation. Adjusted GE Industrial profit margin* was 5.1%, an increase of 110 basis points organically*, primarily due to the same net increases as described above. At Aviation, the primary drivers were lower volume on commercial spare part and commercial spare engine shipments, and decreased shop visits in our service agreements. At Power, the increase was driven by growth in Gas Power services revenues and margins, and continued efforts to streamline the business. At Healthcare, the increase was primarily due to cost reductions and increased demand for HCS products and increases in PDx volume, and at Renewable Energy, the increase was due to product cost deflation, the favorable impact of cost reduction measures and improved project execution.
GE Capital continuing losses decreased 8% as lower claims, improved investment performance and lower marks and impairments in Insurance were partially offset by lower gains and project revenues at EFS and the nonrecurrence of the tax benefit related to the BioPharma sale in the first quarter of 2020.
*Non-GAAP Financial Measure
SEGMENT OPERATIONS. Refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for further information regarding our determination of Industrial and Capital segment profit for continuing operations, and for our allocations of corporate costs to our segments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUMMARY OF REPORTABLE SEGMENTS
|
Three months ended March 31
|
|
|
|
|
2021
|
2020
|
V%
|
|
|
|
|
|
|
Power
|
$
|
3,921
|
|
$
|
4,025
|
|
(3)
|
|
%
|
|
|
|
|
|
Renewable Energy
|
3,248
|
|
3,194
|
|
2
|
|
%
|
|
|
|
|
|
Aviation
|
4,992
|
|
6,892
|
|
(28)
|
|
%
|
|
|
|
|
|
Healthcare
|
4,308
|
|
4,727
|
|
(9)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
|
878
|
|
837
|
|
5
|
|
%
|
|
|
|
|
|
Total segment revenues
|
17,346
|
|
19,675
|
|
(12)
|
|
%
|
|
|
|
|
|
Corporate items and eliminations
|
(228)
|
|
(185)
|
|
(23)
|
|
%
|
|
|
|
|
|
Consolidated revenues
|
$
|
17,118
|
|
$
|
19,490
|
|
(12)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power
|
$
|
(87)
|
|
$
|
(131)
|
|
34
|
|
%
|
|
|
|
|
|
Renewable Energy
|
(234)
|
|
(327)
|
|
28
|
|
%
|
|
|
|
|
|
Aviation
|
641
|
|
1,003
|
|
(36)
|
|
%
|
|
|
|
|
|
Healthcare
|
698
|
|
867
|
|
(19)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
|
(172)
|
|
(187)
|
|
8
|
|
%
|
|
|
|
|
|
Total segment profit (loss)
|
847
|
|
1,224
|
|
(31)
|
|
%
|
|
|
|
|
|
Corporate items and eliminations
|
52
|
|
6,123
|
|
(99)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GE Industrial interest and other financial charges
|
(268)
|
|
(370)
|
|
28
|
|
%
|
|
|
|
|
|
GE Industrial non-operating benefit costs
|
(433)
|
|
(616)
|
|
30
|
|
%
|
|
|
|
|
|
GE Industrial benefit (provision) for income taxes
|
(148)
|
|
(187)
|
|
21
|
|
%
|
|
|
|
|
|
Earnings (loss) from continuing operations attributable to GE common shareholders
|
20
|
|
6,175
|
|
U
|
|
|
|
|
|
|
Earnings (loss) from discontinued operations, net of taxes
|
(2,894)
|
|
(21)
|
|
U
|
|
|
|
|
|
|
Less net earnings (loss) attributable to noncontrolling interests, discontinued operations
|
—
|
|
(2)
|
|
F
|
|
|
|
|
|
|
Earnings (loss) from discontinued operations, net of tax and noncontrolling interest
|
(2,894)
|
|
(19)
|
|
U
|
|
|
|
|
|
|
Consolidated net earnings (loss) attributable to the GE common shareholders
|
$
|
(2,874)
|
|
$
|
6,156
|
|
U
|
|
|
|
|
|
|
POWER. Power continues to streamline its business to better align with market demand and drive its businesses with an operational rigor and discipline that is focused on its customers’ lifecycle experience. We remain focused on our underwriting discipline and risk management to ensure we are securing deals that meet our financial hurdles and we have a high confidence to deliver for our customers.
Global electricity demand increased during the first quarter of 2021, driving increases in GE gas turbine utilization and long-term service agreement billings. Looking ahead, we anticipate the power market to continue to be impacted by overcapacity in the industry, continued price pressure from competition on servicing the installed base, and the uncertain timing of deal closures due to financing and the complexities of working in emerging markets, as well as the ongoing impacts of COVID-19. Market factors related to the energy transition such as greater renewable energy penetration and the adoption of climate change-related policies continue to impact long-term demand, to differing degrees across markets globally. We believe gas will play a critical role in the energy transition and our view of the market has not materially changed. Our businesses are executing on their turnarounds, including the planned exit of new build coal, and we are encouraged by the growth in Gas Power Services.
We continue to invest in new product development, such as our HA-Turbines. Our fundamentals remain strong with approximately $78 billion in backlog and a gas turbine installed base greater than 7,000 units, including approximately 1,800 units under long-term service agreements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
|
|
Orders
|
|
Sales
|
(In units)
|
|
|
|
|
|
|
2021
|
2020
|
|
2021
|
2020
|
GE Gas Turbines
|
|
|
|
|
|
|
18
|
|
9
|
|
|
11
|
|
7
|
|
Heavy-Duty Gas Turbines(a)
|
|
|
|
|
|
|
10
|
|
6
|
|
|
11
|
|
5
|
|
HA-Turbines(b)
|
|
|
|
|
|
|
2
|
|
2
|
|
|
5
|
|
4
|
|
Aeroderivatives(a)
|
|
|
|
|
|
|
8
|
|
3
|
|
|
—
|
|
2
|
|
GE Gas Turbine Gigawatts(c)
|
|
|
|
|
|
|
1.7
|
|
2.2
|
|
|
|
|
(a) Heavy-Duty Gas Turbines and Aeroderivatives are subsets of GE Gas Turbines.
(b) HA-Turbines are a subset of Heavy-Duty Gas Turbines.
(c) Gigawatts reported associated with orders in the periods presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
Equipment
|
$
|
16,563
|
|
$
|
17,127
|
|
$
|
18,187
|
|
Services
|
61,468
|
|
62,448
|
|
66,921
|
|
Total backlog
|
$
|
78,032
|
|
$
|
79,575
|
|
$
|
85,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
|
|
|
2021
|
|
2020
|
|
Equipment
|
|
|
|
|
|
$
|
837
|
|
|
$
|
1,498
|
|
|
Services
|
|
|
|
|
|
2,796
|
|
|
2,612
|
|
|
Total orders
|
|
|
|
|
|
$
|
3,633
|
|
|
$
|
4,111
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Power
|
|
|
|
|
|
$
|
2,829
|
|
|
$
|
2,859
|
|
|
Power Portfolio
|
|
|
|
|
|
1,091
|
|
|
1,165
|
|
|
Total segment revenues
|
|
|
|
|
|
$
|
3,921
|
|
|
$
|
4,025
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
|
|
|
$
|
1,241
|
|
|
$
|
1,506
|
|
|
Services
|
|
|
|
|
|
2,679
|
|
|
2,518
|
|
|
Total segment revenues
|
|
|
|
|
|
$
|
3,921
|
|
|
$
|
4,025
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss)
|
|
|
|
|
|
$
|
(87)
|
|
|
$
|
(131)
|
|
|
Segment profit margin
|
|
|
|
|
|
(2.2)
|
|
%
|
(3.3)
|
|
%
|
For the three months ended March 31, 2021, segment orders were down $0.5 billion (12%), segment revenues were down $0.1 billion (3%) and segment profit was up 34%.
Backlog as of March 31, 2021 decreased $1.5 billion (2%) and $7.1 billion (8%) from December 31, 2020 and March 31, 2020, respectively, primarily driven by sales outpacing new orders.
Orders decreased $0.5 billion (12%) organically, primarily due to decreases in Gas Power driven by the nonrecurrence of a large turnkey order and Steam Power equipment orders.
Revenues decreased $0.2 billion (4%) organically*, primarily due to decreased Steam Power equipment and services revenues and decreases in Gas Power equipment revenues, partially offset by an increase in Gas Power services revenues.
Profit increased 35% organically* due to growth in Gas Power services revenues and margins and continued efforts to streamline the business across Gas Power and Power Portfolio, partially offset by unfavorable legacy project arbitration resolutions and Steam project execution.
RENEWABLE ENERGY. Renewable Energy includes a portfolio of businesses comprising Onshore Wind (with our separate LM Wind blades business), Grid Solutions equipment and services, Hydro, Offshore Wind and Hybrid Solutions. These businesses are uniquely positioned to lead the energy transition with products and integrated solutions by growing new renewable energy generation, lowering the cost of electricity and modernizing the grid.
We continue to observe strong demand across the global onshore wind market together with a positive impact on deliveries and installations in the U.S. from the Production Tax Credit (PTC) cycle and customer preference shifting to larger, more efficient units to drive down costs and compete with other power generation options. The Grid and Hydro businesses are executing their turnaround plans and we are expecting improved operating results in 2021.
New product introductions remain important to our onshore and offshore customers who are demonstrating the willingness to adopt the new technology of larger turbines that decrease the levelized cost of energy. We have observed significant market demand for our Onshore 5-6 MW Cypress units and Offshore Haliade-X 12-13 MW units and are preparing for large scale production in response to this market demand.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
|
|
Orders
|
|
Sales
|
Onshore and Offshore (In units)
|
|
|
|
|
|
|
2021
|
2020
|
|
2021
|
2020
|
Wind Turbines
|
|
|
|
|
|
|
728
|
|
738
|
|
|
778
|
|
731
|
|
Wind Turbine Gigawatts
|
|
|
|
|
|
|
2.2
|
|
2.3
|
|
|
2.4
|
|
2.1
|
|
Repower units
|
|
|
|
|
|
|
121
|
|
6
|
|
|
—
|
|
219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
Equipment
|
$
|
16,987
|
|
$
|
17,470
|
|
$
|
15,799
|
|
Services
|
12,461
|
|
12,531
|
|
10,712
|
|
Total backlog
|
$
|
29,448
|
|
$
|
30,001
|
|
$
|
26,511
|
|
*Non-GAAP Financial Measure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
Equipment
|
|
|
|
|
|
$
|
2,954
|
|
|
$
|
2,669
|
|
|
Services
|
|
|
|
|
|
561
|
|
|
399
|
|
|
Total orders
|
|
|
|
|
|
$
|
3,515
|
|
|
$
|
3,068
|
|
|
|
|
|
|
|
|
|
|
|
|
Onshore Wind
|
|
|
|
|
|
$
|
2,118
|
|
|
$
|
2,124
|
|
|
Grid Solutions equipment and services
|
|
|
|
|
|
795
|
|
|
839
|
|
|
Hydro
|
|
|
|
|
|
165
|
|
|
179
|
|
|
Offshore Wind and Hybrid Solutions
|
|
|
|
|
|
169
|
|
|
51
|
|
|
Total segment revenues
|
|
|
|
|
|
$
|
3,248
|
|
|
$
|
3,194
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
|
|
|
$
|
2,844
|
|
|
$
|
2,576
|
|
|
Services
|
|
|
|
|
|
404
|
|
|
618
|
|
|
Total segment revenues
|
|
|
|
|
|
$
|
3,248
|
|
|
$
|
3,194
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss)
|
|
|
|
|
|
$
|
(234)
|
|
|
$
|
(327)
|
|
|
Segment profit margin
|
|
|
|
|
|
(7.2)
|
|
%
|
(10.2)
|
|
%
|
For the three months ended March 31, 2021, segment orders were up $0.4 billion (15%), segment revenues were up $0.1 billion (2%) and segment profit was up $0.1 billion (28%).
Backlog as of March 31, 2021 decreased $0.6 billion (2%) from December 31, 2020 primarily driven by the effects of foreign currency fluctuations, partially offset by new orders outpacing sales. Backlog increased $2.9 billion (11%) from March 31, 2020 primarily from Offshore Wind due to our first Haliade-X order for the Dogger Bank Wind Farm, new Cypress platform orders in Onshore Wind and an increase in Hydro. These increases were partially offset by sales exceeding new orders at Grid, primarily as a result of increased commercial selectivity in certain product lines.
Orders increased $0.4 billion (13%) organically, primarily due to the Grid high voltage direct current (HVDC) project for the Sofia Offshore Wind Farm and higher services orders at Onshore Wind.
Revenues were flat organically*, as higher revenue at Offshore Wind associated with the EDF’s 6MW PBG project in Saint-Nazaire, France and 30 more Onshore Wind turbine sales on a unit basis and 11% more on a megawatt basis, were offset by lower repower unit deliveries at Onshore Wind and lower revenue at Grid.
Profit increased $0.1 billion (31%) organically*, primarily from improvement in Onshore Wind product cost, the favorable impact of cost reduction measures, primarily at Grid and Hydro, and improved project execution, partially offset by lower margins on new product introductions at Onshore Wind and higher restructuring costs.
AVIATION. The global COVID-19 pandemic continues to have a material adverse effect on the global airline industry. A key underlying driver of Aviation’s commercial engine and services businesses is global commercial air traffic, which in turn is driven by economic activity and consumer and business propensity to travel. Since the beginning of the pandemic in the first quarter of 2020, we have seen varied levels of recovery in global markets. Government travel restrictions, public health advisories, individuals' propensity to travel and continued cases of the virus have all impacted the level of air travel. Aviation regularly tracks global departures, which as of March 31, 2021, were approximately 40% below first quarter 2020. Global departures improved in March 2021 compared to the first two months of the year, but levels of recovery varied across global regions. Aviation is closely monitoring government actions and economic and industry forecasts. Due to the global airline industry contraction, Aviation’s airline and airframe customers are taking measures to address reduced demand, which, in turn, continue to materially impact Aviation’s business operations and financial performance. More broadly, we are in frequent dialogue with our airline and airframe customers about the outlook for commercial air travel, new aircraft production, fleet retirements, and after-market services, including shop visit and spare part demand. Given current trends, we expect domestic travel routes primarily served by narrowbody aircraft to recover before long-haul, international travel routes which are primarily served by widebody aircraft. Consistent with industry projections, Aviation continues to estimate the duration of the market recovery to be prolonged over multiple years dependent on containing the spread of the virus, effective inoculation programs and government collaboration to encourage travel, particularly around reducing quarantine requirements.
Aviation has taken several business actions to respond to the current adverse environment, including a reduction of approximately 25% of its total global workforce since year-end 2019. The business is actively monitoring the pace of demand recovery to ensure the business is appropriately sized for the future. In addition, we continue to partner with our airline and leasing customers and are aligned with our airframe partners on production rates for 2021 and beyond.
As it relates to the military environment, Aviation continues to forecast strong military demand creating future growth opportunities for our Military business as the U.S. Department of Defense and foreign governments have continued flight operations, and have allocated budgets to upgrade and modernize their existing fleets. During the first quarter of 2021, Aviation continued to experience supply chain challenges, which the business is actively addressing.
Total engineering, comprised of company, customer and partner-funded and nonrecurring engineering costs, decreased compared to prior year in line with the changes in the commercial environment. During the first quarter of 2021, company-funded research and development spend decreased compared to the prior year. Customer and partner-funded engineering efforts, primarily in our Military business, decreased compared to the prior year due to the timing of planned program expenditures. Aviation continues to be committed to investment in developing and maturing technology that enables a more sustainable future of flight.
*Non-GAAP Financial Measure
Aviation is taking actions to protect its ability to serve its customers now and as the global airline industry recovers. Aviation’s deep history of innovation and technology leadership, commercial engine installed base of approximately 37,700 units, with approximately 12,500 units under long-term service agreements, and military engine installed base of approximately 26,500 units represents strong long-term fundamentals. Aviation seeks to emerge from this crisis stronger and drive long-term cash and profitable growth over time.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
|
|
Orders
|
|
Sales
|
(In units, except where noted)
|
|
|
|
|
|
|
2021
|
2020
|
|
2021
|
2020
|
Commercial Engines(a)
|
|
|
|
|
|
|
298
|
|
168
|
|
|
359
|
|
530
|
|
LEAP Engines(b)
|
|
|
|
|
|
|
141
|
|
6
|
|
|
188
|
|
272
|
|
Military Engines
|
|
|
|
|
|
|
181
|
|
272
|
|
|
96
|
|
146
|
|
Spare Parts Rate(c)
|
|
|
|
|
|
|
|
|
|
$
|
13.2
|
|
$
|
26.9
|
|
(a) Commercial Engines now includes Business and General Aviation and Aeroderivative units for all periods presented.
(b) LEAP engines are subsets of commercial engines.
(c) Commercial externally shipped spare parts and spare parts used in time and material shop visits in millions of dollars per day.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
Equipment
|
$
|
34,333
|
|
$
|
34,486
|
|
$
|
39,154
|
|
Services
|
225,032
|
|
225,927
|
|
234,078
|
|
Total backlog
|
$
|
259,365
|
|
$
|
260,412
|
|
$
|
273,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
Equipment
|
|
|
|
|
|
$
|
2,004
|
|
|
$
|
2,228
|
|
|
Services
|
|
|
|
|
|
3,488
|
|
|
5,221
|
|
|
Total orders
|
|
|
|
|
|
$
|
5,491
|
|
|
$
|
7,448
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Engines & Services
|
|
|
|
|
|
$
|
3,354
|
|
|
$
|
5,113
|
|
|
Military
|
|
|
|
|
|
956
|
|
|
960
|
|
|
Systems & Other
|
|
|
|
|
|
682
|
|
|
820
|
|
|
Total segment revenues
|
|
|
|
|
|
$
|
4,992
|
|
|
$
|
6,892
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
|
|
|
$
|
1,847
|
|
|
$
|
2,364
|
|
|
Services
|
|
|
|
|
|
3,145
|
|
|
4,529
|
|
|
Total segment revenues
|
|
|
|
|
|
$
|
4,992
|
|
|
$
|
6,892
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
$
|
641
|
|
|
$
|
1,003
|
|
|
Segment profit margin
|
|
|
|
|
|
12.8
|
|
%
|
14.6
|
|
%
|
For the three months ended March 31, 2021, segment orders were down $2.0 billion (26%), segment revenues were down $1.9 billion (28%) and segment profit was down $0.4 billion (36%).
Backlog as of March 31, 2021 decreased $1.0 billion from December 31, 2020, primarily due to approximately 400 LEAP-1B unit order cancellations. Backlog decreased $13.9 billion (5%) from March 31, 2020, primarily due to a reduction in our Commercial Services backlog and cancellations of commercial equipment orders, which included approximately 1,900 LEAP-1B unit order cancellations. The reduction to Commercial Services backlog reflects estimates of lower engine utilization, the partial cancellation of long-term service agreements related to the equipment unit order cancellations, and anticipated customer fleet restructuring and contract modifications.
Orders decreased $1.9 billion (26%) organically, primarily driven by lower commercial equipment and service orders as airline customers have slowed or deferred new engine orders, as well as delayed maintenance and repair operations while existing fleets have lower utilization or been grounded. Military orders decreased 8% compared to the prior year primarily driven by lower spare parts orders.
Revenues decreased $1.9 billion (27%) organically*. Equipment revenues decreased, primarily due to 171 fewer commercial install and spare engine unit shipments, including 84 fewer LEAP units versus the prior year. Commercial Services revenues decreased, primarily due to lower commercial spare part shipments and decreased shop visits. Military revenues were flat with 50 fewer engine shipments due to supply chain challenges, offset by favorable product mix.
Profit decreased $0.4 billion (37%) organically*, primarily due to lower volume on commercial spare part and commercial spare engine shipments, and decreased shop visits in our service agreements. These decreases in profit were partially offset by operational cost reduction from the cost savings actions taken in 2020 and the first quarter of 2021, along with charges related to customer
credit risk and declines in the estimated profitability in long-term service agreements not repeating in the current year.
*Non-GAAP Financial Measure
HEALTHCARE. We continue to see an overall recovery in hospital spend and increases in procedure volume; the expectation is that this will continue in line with the worldwide COVID-19 vaccine rollout. PDx demand has largely recovered to pre-COVID levels in line with increases in procedure volume. However, in some markets we expect capital expenditures to remain under pressure from revenue declines related to COVID-19 impacts. The pandemic is still driving additional supply chain and logistics costs, and we expect this to continue. In response to continuing near-term volatility and cost pressures, we have continued to execute on structural cost reductions and cash optimization actions, in order to prioritize spend on growth and research and development.
We continue focusing on creating new products and digital solutions as well as expanding uses of existing offerings that are tailored to the different needs of our global customers. GE Healthcare introduced the latest member of the Venue™ point of care ultrasound family. We also introduced Vscan Air, a cutting edge wireless pocket-sized ultrasound that provides crystal clear image quality, whole-body scanning capabilities, and intuitive software. We received 510(k) clearance for OEC 3D surgical c-arm. OEC 3D sets the standard of interoperative imaging with precise 3D volumetric images for spine and orthopedic procedures combined with 2D imaging for greater everyday efficiency. We remain committed to innovate and invest to create more integrated, efficient, and personalized precision healthcare.
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
December 31, 2020
|
March 31, 2020
|
Equipment
|
$
|
5,564
|
|
$
|
5,538
|
|
$
|
5,957
|
|
Services
|
11,479
|
|
11,562
|
|
11,433
|
|
Total backlog
|
$
|
17,044
|
|
$
|
17,100
|
|
$
|
17,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
|
|
|
2021
|
|
2020
|
|
Equipment
|
|
|
|
|
|
$
|
2,445
|
|
|
$
|
3,305
|
|
|
Services
|
|
|
|
|
|
2,027
|
|
|
1,987
|
|
|
Total orders(a)
|
|
|
|
|
|
$
|
4,472
|
|
|
$
|
5,292
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare Systems (HCS)
|
|
|
|
|
|
$
|
3,825
|
|
|
$
|
3,448
|
|
|
Pharmaceutical Diagnostics (PDx)
|
|
|
|
|
|
482
|
|
|
450
|
|
|
BioPharma
|
|
|
|
|
|
—
|
|
|
830
|
|
|
Total segment revenues
|
|
|
|
|
|
$
|
4,308
|
|
|
$
|
4,727
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
|
|
|
$
|
2,227
|
|
|
$
|
2,699
|
|
|
Services
|
|
|
|
|
|
2,081
|
|
|
2,029
|
|
|
Total segment revenues
|
|
|
|
|
|
$
|
4,308
|
|
|
$
|
4,727
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
$
|
698
|
|
|
$
|
867
|
|
|
Segment profit margin
|
|
|
|
|
|
16.2
|
|
%
|
18.3
|
|
%
|
|
|
|
|
|
|
|
|
|
|
(a) Orders for the three months ended March 31, 2020 included $1,136 million related to BioPharma.
|
|
For the three months ended March 31, 2021, segment orders were down $0.8 billion (15%), segment revenues were down $0.4 billion (9%) and segment profit was down $0.2 billion (19%).
Backlog as of March 31, 2021 decreased $0.1 billion from December 31, 2020 and $0.3 billion (2%) from March 31, 2020 primarily due to conversion to revenue of shorter cycle time LCS products, offset by increases in orders of longer cycle time imaging products.
Orders increased $0.2 billion (5%) organically, due to increases in Imaging and Ultrasound in HCS, and a return to pre-pandemic volume in PDx, partially offset by lower Life Care Solutions (LCS) orders in HCS as pandemic-related demand softened.
Revenues increased $0.3 billion (7%) organically*, driven by increased demand in Imaging, Ultrasound and Life Care Solutions for HCS products, and a return to pre-pandemic volume in PDx.
Profit increased $0.2 billion (30%) organically*, primarily due to cost reductions and increased demand for HCS products, and increases in PDx volume.
CAPITAL. In the first quarter of 2021, we announced an agreement to combine GECAS with AerCap, for which the Company expects to receive $23.9 billion in cash, subject to contractual closing adjustments, approximately $6.6 billion in shares representing a 46% stake in the combined company, and $1 billion in AerCap notes and/or cash upon closing. The Company expects to transfer GECAS’ net assets, including its engine leasing and Milestone helicopter leasing businesses, as well as GECAS’ more than 400 employees and its current purchase obligations, to AerCap. In addition, upon the closing of the transaction, the remainder of GE Capital will be reported within Corporate.
In connection with the signing of the transaction agreement, GE Capital recorded a non-cash after-tax charge of $2.8 billion in discontinued operations in the first quarter of 2021, and the results of GECAS are now presented in discontinued operations.
In the first quarter of 2021, we announced our intention to discontinue the majority of our factoring programs, which was effective April 1, 2021.
GE Capital made capital contributions to its insurance subsidiaries of $2.0 billion in the first quarters of both 2021 and 2020, and expects to provide further capital contributions of approximately $5.5 billion through 2024.
*Non-GAAP Financial Measure
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
December 31, 2020
|
|
|
|
Energy Financial Services (EFS)
|
$
|
2,359
|
|
$
|
2,385
|
|
Working Capital Solutions (WCS)
|
4,567
|
5,884
|
Insurance
|
50,353
|
50,824
|
Other continuing operations(a)
|
14,429
|
|
18,577
|
|
Total segment assets - continuing operations
|
$
|
71,709
|
|
$
|
77,670
|
|
|
|
|
|
|
|
(a) Included cash, cash equivalents and restricted cash of $9,332 million as of March 31, 2021 and $13,245 million as of December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
|
2021
|
2020
|
|
|
|
|
|
|
EFS
|
|
|
|
$
|
(3)
|
|
$
|
64
|
|
WCS
|
|
|
|
55
|
|
131
|
|
Insurance
|
|
|
|
775
|
|
616
|
|
Other continuing operations
|
|
|
|
51
|
|
25
|
|
Total segment revenues
|
|
|
|
$
|
878
|
|
$
|
837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EFS
|
|
|
|
$
|
(5)
|
|
$
|
53
|
|
WCS
|
|
|
|
2
|
|
24
|
|
Insurance
|
|
|
|
116
|
|
(93)
|
|
Other continuing operations(a)
|
|
|
|
(285)
|
|
(171)
|
|
Total segment profit (loss)
|
|
|
|
$
|
(172)
|
|
$
|
(187)
|
|
(a) Other continuing operations primarily comprised excess interest costs from debt previously allocated to assets that have been sold, interest costs not allocated to GE Capital businesses, and preferred stock dividend costs prior to January 2021, at which time these became a GE Industrial obligation (see Note 17 for further information). Interest costs are allocated to GE Capital businesses based on the tenor of their assets using the market rate at the time of origination, which differs from the asset profile when the debt was originated. As a result, actual interest expense is higher than interest expense allocated to the remaining GE Capital businesses. We anticipate unallocated interest costs to gradually decline as debt matures and/or is refinanced.
For the three months ended March 31, 2021, segment revenues increased 5% and segment losses decreased 8%.
GE Capital revenues increased 5%, primarily as a result of lower marks and impairments primarily in Insurance, partially offset by lower revenue at WCS due to lower volume and lower gains and project revenues at EFS. GE Capital segment losses decreased 8% as lower claims, improved investment performance and lower marks and impairments in Insurance were partially offset by lower gains and project revenues at EFS and the nonrecurrence of the tax benefit related to the BioPharma sale in the first quarter of 2020.
CORPORATE ITEMS AND ELIMINATIONS. Corporate items and eliminations included the results of our Lighting segment for the three months ended March 31, 2020, and our GE Digital business for all periods presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
2021
|
2020
|
|
|
|
Revenues
|
|
|
|
|
|
Corporate revenues
|
$
|
227
|
|
$
|
377
|
|
|
|
|
Eliminations and other
|
(455)
|
|
(562)
|
|
|
|
|
Total Corporate Items and Eliminations
|
$
|
(228)
|
|
$
|
(185)
|
|
|
|
|
|
|
|
|
|
|
Operating profit (cost)
|
|
|
|
|
|
Gains (losses) on disposals and held for sale businesses
|
$
|
(159)
|
|
$
|
12,439
|
|
|
|
|
Restructuring and other charges
|
(106)
|
|
(143)
|
|
|
|
|
Unrealized gains (losses)
|
509
|
|
(5,794)
|
|
|
|
|
Adjusted total corporate operating costs (Non-GAAP)
|
(192)
|
|
(379)
|
|
|
|
|
Total Corporate Items and Eliminations (GAAP)
|
$
|
52
|
|
$
|
6,123
|
|
|
|
|
Less: gains (losses) and restructuring & other
|
244
|
|
6,502
|
|
|
|
|
Adjusted total corporate operating costs (Non-GAAP)
|
$
|
(192)
|
|
$
|
(379)
|
|
|
|
|
|
|
|
|
|
|
Functions & operations
|
$
|
(159)
|
|
$
|
(272)
|
|
|
|
|
Environmental, health and safety (EHS) and other items
|
(55)
|
|
(10)
|
|
|
|
|
Eliminations
|
23
|
|
(98)
|
|
|
|
|
Adjusted total corporate operating costs (Non-GAAP)
|
$
|
(192)
|
|
$
|
(379)
|
|
|
|
|
Adjusted total corporate operating costs* excludes gains (losses) on disposals and held for sale businesses, significant, higher-cost
restructuring programs and unrealized gains (losses). We believe that adjusting corporate costs to exclude the effects of items that are not closely associated with ongoing corporate operations provides management and investors with a meaningful measure that increases the period-to-period comparability of our ongoing corporate costs.
*Non-GAAP Financial Measure
For the three months ended March 31, 2021, revenues remained relatively flat year over year primarily as a result of a $0.1 billion decrease in revenues due to the sale of our Lighting business in June 2020, offset by $0.1 billion of lower inter-segment eliminations. Corporate operating profit decreased by $6.1 billion due to $12.6 billion of lower net gains, primarily driven by $12.3 billion of gains from the sale of our BioPharma business during the first three months of 2020, as compared to $0.2 billion of realized losses primarily related to our Baker Hughes shares during the first three months of 2021. These decreases were partially offset by a $6.3 billion change in net unrealized gains and losses primarily related to mark-to-market activity on our Baker Hughes shares. Overall, restructuring and other charges remained relatively flat year over year.
Adjusted total corporate operating costs* decreased by $0.2 billion in the first quarter of 2021 primarily as the result of $0.1 billion of cost reductions primarily within our Corporate functions. Costs also decreased by $0.1 billion due to lower intercompany profit eliminations as the result of lower intercompany activity from our Aviation segment to our GECAS business, lower intercompany elimination activity from project financing investments associated with wind energy projects in our Renewable Energy segment and lower GE industrial inter-segment eliminations. Overall, costs associated with EHS matters remained relatively flat year over year.
OTHER CONSOLIDATED INFORMATION
RESTRUCTURING. Restructuring actions are essential to our cost improvement efforts for both existing operations and those acquired. Restructuring and other charges relate primarily to workforce reductions, facility exit costs associated with the consolidation of sales, service and manufacturing facilities, the integration of acquisitions, and certain other asset write-downs such as those associated with product line exits. We also recognize an obligation for severance benefits that vest or accumulate with service. We continue to closely monitor the economic environment and expect to undertake further restructuring actions to more closely align our cost structure with earnings goals. This table is inclusive of all restructuring charges in our segments.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
2021
|
2020
|
|
|
|
Workforce reductions
|
$
|
211
|
|
$
|
154
|
|
|
|
|
Plant closures & associated costs and other asset write-downs
|
26
|
|
29
|
|
|
|
|
Acquisition/disposition net charges
|
5
|
|
27
|
|
|
|
|
Total restructuring and other charges
|
$
|
242
|
|
$
|
210
|
|
|
|
|
|
|
|
|
|
|
Cost of product/services
|
$
|
101
|
|
$
|
116
|
|
|
|
|
Selling, general and administrative expenses
|
148
|
|
94
|
|
|
|
|
Other income
|
(7)
|
|
—
|
|
|
|
|
Total restructuring and other charges
|
$
|
242
|
|
$
|
210
|
|
|
|
|
|
|
|
|
|
|
Power
|
$
|
49
|
|
$
|
33
|
|
|
|
|
Renewable Energy
|
76
|
|
26
|
|
|
|
|
Aviation
|
62
|
|
68
|
|
|
|
|
Healthcare
|
39
|
|
30
|
|
|
|
|
Corporate
|
11
|
|
50
|
|
|
|
|
Total GE Industrial restructuring and other charges
|
$
|
236
|
|
$
|
207
|
|
|
|
|
Capital
|
5
|
|
3
|
|
|
|
|
Total restructuring and other charges
|
$
|
242
|
|
$
|
210
|
|
|
|
|
Restructuring and other charges cash expenditures
|
$
|
223
|
|
$
|
210
|
|
|
|
|
Liabilities associated with restructuring activities were approximately $1.3 billion, including actuarial determined post-employment severance benefits of $0.7 billion as of both March 31, 2021 and December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST AND OTHER FINANCIAL CHARGES
|
Three months ended March 31
|
|
|
|
2021
|
2020
|
|
|
|
GE Industrial
|
$
|
268
|
|
$
|
370
|
|
|
|
|
GE Capital
|
291
|
|
271
|
|
|
|
|
The decrease in GE Industrial interest and other financial charges for the three months ended March 31, 2021 was primarily due to lower interest expense on debt driven by a lower intercompany loan balance and lower financing costs on sales of receivables. The primary components of GE interest and other financial charges are interest on short- and long-term borrowings and financing costs on sales of receivables. Total GE Industrial interest and other financial charges of $0.2 billion and $0.2 billion was recorded at Corporate and $0.1 billion and $0.1 billion was recorded by Industrial segments for the three months ended March 31, 2021 and 2020, respectively.
The increase in GE Capital interest and other financial charges for the three months ended March 31, 2021 was primarily due to higher average market interest rates and higher interest on assumed debt as a result of the repayments of intercompany loans by GE Industrial (effectively transferring that interest cost back to GE Capital), partially offset by lower average borrowings balances due to maturities and debt purchases.
*Non-GAAP Financial Measure
CONSOLIDATED INCOME TAXES. For the three months ended March 31, 2021, the consolidated income tax rate was 59.7% compared to 0.9% for the three months ended March 31, 2020.
The consolidated provision (benefit) for income taxes was $0.1 billion for both the three months ended March 31, 2021 and 2020. The provision increased slightly as there was a tax expense associated with the unrealized gain on our remaining interest in Baker Hughes in the first quarter of 2021 compared to a tax benefit associated with the unrealized loss recorded in the first quarter of 2020. This was largely offset by the nonrecurrence of the tax expense associated with the disposition of the BioPharma business in the first quarter of 2020.
The consolidated tax provision (benefit) includes $0.1 billion and $0.2 billion for GE Industrial for the three months ended March 31, 2021 and 2020, respectively.
DISCONTINUED OPERATIONS. Primarily comprise our GECAS business, our mortgage portfolio in Poland, and other trailing assets and liabilities associated with the dispositions of certain GE Capital and GE Industrial businesses. See Notes 2 and 21 for further financial information regarding our businesses in discontinued operations.
CAPITAL RESOURCES AND LIQUIDITY
FINANCIAL POLICY. We intend to maintain a disciplined financial policy, including maintaining a high cash balance. We are targeting a sustainable long-term credit rating in the Single-A range, achieving a GE Industrial net debt*-to-EBITDA ratio of less than 2.5x over the next few years and a dividend in line with our peers over time. In addition to net debt*-to-EBITDA, we also evaluate other leverage measures, including gross debt-to-EBITDA, and we will ultimately size our deleveraging actions across a range of measures to ensure we are operating the Company based on a strong balance sheet. We intend to continue to decrease our GE Industrial leverage over time as we navigate this period of uncertainty.
Following the closing of the GECAS transaction, the Company intends to use the transaction proceeds and its existing cash sources to significantly reduce debt, and will continue to target achieving a less than 2.5x net debt-to-EBITDA ratio over the next few years.
LIQUIDITY POLICY. We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our obligations under both normal and stressed conditions. We intend to maintain a high level of cash and maximize flexibility as we navigate the current environment. At both GE Industrial and GE Capital, we manage our liquidity to provide access to sufficient funding to meet our business needs and financial obligations, as well as capital allocation and growth objectives, throughout business cycles.
GE Industrial has continued to enhance its cash management operations, targeting increased linear cash flow, lower factoring, and reducing restricted cash. As a result, GE Industrial's go-forward cash needs are expected to be below $13 billion. We intend to continue holding elevated cash levels through this period of uncertainty.
At GE Capital, we continue to hold cash levels to cover at least 12 months of long-term debt maturities.
We believe that our consolidated liquidity and availability under our revolving credit facilities will be sufficient to meet our liquidity needs.
CONSOLIDATED LIQUIDITY. Following is a summary of cash, cash equivalents and restricted cash at March 31, 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
|
March 31, 2021
|
GE Industrial
|
$
|
22,361
|
|
|
U.S.
|
$
|
18,115
|
|
GE Capital
|
9,422
|
|
|
Non-U.S.
|
13,668
|
|
Consolidated
|
$
|
31,783
|
|
|
Consolidated
|
$
|
31,783
|
|
Cash held in non-U.S. entities has generally been reinvested in active foreign business operations; however, substantially all of our unrepatriated earnings were subject to U.S. federal tax and, if there is a change in reinvestment, we would expect to be able to repatriate available cash (excluding amounts held in countries with currency controls) without additional federal tax cost. Any foreign withholding tax on a repatriation to the U.S. would potentially be partially offset by a U.S. foreign tax credit.
GE INDUSTRIAL LIQUIDITY. GE Industrial's primary sources of liquidity consist of cash and cash equivalents, free cash flows from our operating businesses, monetization of receivables, and short-term borrowing facilities, including revolving credit facilities. Cash generation can be subject to variability based on many factors, including seasonality, receipt of down payments on large equipment orders, timing of billings on long-term contracts, market conditions and our ability to execute dispositions. Additionally, in connection with the program we launched in 2020 to fully monetize our Baker Hughes position over approximately three years, we received proceeds of $0.7 billion in the first quarter of 2021 and expect to receive approximately $1.0 billion in the second quarter of 2021.
GE Industrial cash, cash equivalents and restricted cash totaled $22.4 billion at March 31, 2021, including $2.1 billion of cash held in countries with currency control restrictions and $0.4 billion of restricted use cash. Cash held in countries with currency controls represents amounts held in countries 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. Restricted use cash represents amounts that are not available to fund operations, and primarily comprised funds restricted in connection with certain ongoing litigation matters.
*Non-GAAP Financial Measure
In the first quarter of 2021, we announced our intention to discontinue the majority of our factoring programs, which was effective April 1, 2021. The estimated adverse impact to GE Industrial CFOA is expected to be approximately $3.5 to $4 billion primarily in the second quarter of 2021, which will be excluded from GE Industrial free cash flows*.
During 2021, GE Capital’s liquidity and capital needs will be evaluated based on the anticipated timing of the closing of the GECAS transaction, as well as GE Capital’s overall performance, to determine if additional capital contributions to GE Capital are necessary.
Additionally, we do not anticipate any further funding requirements for the GE Pension Plan in the foreseeable future, potentially until the end of the decade. This is due to our $2.5 billion prefunding in 2020 and portfolio performance, as well as the recently enacted American Rescue Plan Act.
GE CAPITAL LIQUIDITY. GE Capital’s primary sources of liquidity consist of cash and cash equivalents, cash generated from asset sales (including the expected proceeds from the GECAS transaction) and cash flows from our businesses, as well as GE Industrial repayments of intercompany loans and capital contributions from GE Industrial. We expect to maintain a sufficient liquidity position to fund our insurance obligations, debt maturities and other obligations. See the Segment Operations - Capital section for further information regarding allocation of GE Capital interest expense to the GE Capital businesses.
GE Capital cash, cash equivalents and restricted cash totaled $9.4 billion at March 31, 2021, excluding $1.7 billion of cash in Insurance, which was classified as All other assets on the GE Capital Statement of Financial Position.
GE Capital provided capital contributions to its insurance subsidiaries of $2.0 billion, $2.0 billion, $1.9 billion and $3.5 billion in the first quarters of 2021, 2020, 2019 and 2018, respectively, and expects to provide further capital contributions of approximately $5.5 billion through 2024. These contributions are subject to ongoing monitoring by Kansas Insurance Department (KID), and the total amount to be contributed could increase or decrease, or the timing could be accelerated, based upon the results of reserve adequacy testing or a decision by KID to modify the schedule of contributions set forth in January 2018. GE is required to maintain specified capital levels at these insurance subsidiaries under capital maintenance agreements. Going forward, we anticipate funding any capital needs for Insurance through a combination of GE Capital liquidity, GE Capital asset sales, GE Capital future earnings and capital contributions from GE Industrial.
BORROWINGS. Consolidated total borrowings were $71.4 billion and $74.9 billion at March 31, 2021 and December 31, 2020, respectively, a decrease of $3.5 billion ($3.9 billion excluding intercompany eliminations). See the following table for a summary of GE Industrial and GE Capital borrowings.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GE Industrial
|
March 31, 2021
|
December 31, 2020
|
|
GE Capital
|
March 31, 2021
|
December 31, 2020
|
GE Industrial senior notes
|
$
|
18,753
|
|
$
|
18,994
|
|
|
Senior and subordinated notes
|
$
|
29,144
|
|
$
|
30,987
|
|
|
|
|
|
Senior and subordinated notes assumed by GE Industrial
|
21,538
|
|
22,390
|
|
Intercompany loans from
GE Capital
|
3,177
|
|
3,177
|
|
|
Intercompany loans to
GE Industrial
|
(3,177)
|
|
(3,177)
|
|
Other GE Industrial borrowings
|
956
|
|
1,352
|
|
|
Other GE Capital
borrowings
|
1,244
|
|
1,779
|
|
Total GE Industrial
|
|
|
|
Total GE Capital
|
|
|
adjusted borrowings(a)
|
$
|
22,886
|
|
$
|
23,523
|
|
|
adjusted borrowings(a)(b)
|
$
|
48,749
|
|
$
|
51,979
|
|
(a) Consolidated total borrowings of $71,358 million and $74,902 million at March 31, 2021 and December 31, 2020, respectively, are net of intercompany eliminations of $277 million and $600 million, respectively, of other GE Industrial borrowings from GE Capital, primarily related to timing of cash settlements associated with GE Industrial receivables monetization programs.
(b) Included $3,826 million and $5,687 million at March 31, 2021 and December 31, 2020, respectively, of fair value adjustments for debt in fair value hedge relationships. See Note 19 for further information.
The reduction in GE Industrial adjusted borrowings at March 31, 2021 compared to December 31, 2020 was driven by net repayments and maturities of other debt of $0.4 billion and $0.2 billion related to changes in foreign exchange rates.
GE Industrial net debt* was $32.3 billion and $32.3 billion at March 31, 2021 and December 31, 2020, respectively, as debt reductions of $0.6 billion were offset by a decrease in the net cash deduction of $0.6 billion due to a lower cash balance.
The reduction in GE Capital adjusted borrowings at March 31, 2021 compared to December 31, 2020 was driven primarily by long-term debt maturities of $0.9 billion, lower non-recourse borrowings of $0.3 billion, lower short-term borrowings of $0.2 billion, and $1.9 billion of fair value adjustments for debt in fair value hedge relationships.
The following table provides a reconciliation of total short- and long-term borrowings as reported on the respective GE Industrial and GE Capital Statements of Financial Position to borrowings adjusted for assumed debt and intercompany loans:
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
GE Industrial
|
GE Capital
|
Consolidated
|
Total short- and long-term borrowings
|
$
|
41,247
|
|
$
|
30,388
|
|
$
|
71,358
|
|
Debt assumed by GE Industrial from GE Capital(a)
|
(21,538)
|
|
21,538
|
|
—
|
|
Intercompany loans with right of offset(a)
|
3,177
|
|
(3,177)
|
|
—
|
|
Total intercompany payable (receivable) between GE Industrial and GE Capital
|
(18,361)
|
|
18,361
|
|
—
|
|
Total borrowings adjusted for assumed debt and intercompany loans
|
$
|
22,886
|
|
$
|
48,749
|
|
$
|
71,358
|
|
(a) See the Capital Resources and Liquidity section of our Annual Report on Form 10-K for the year ended December 31, 2020 for further details on the assumed debt and intercompany loans with right of offset.
The intercompany loans from GE Capital to GE Industrial bear the right of offset against amounts owed by GE Capital to GE Industrial under the assumed debt agreement and can be prepaid by GE Industrial at any time, in whole or in part, without premium or penalty. These loans are priced at market terms and have a collective weighted average interest rate of 3.7% and term of approximately 15.2 years at March 31, 2021.
GE Industrial has in place committed revolving credit facilities totaling $20.2 billion at March 31, 2021, comprised of a $15.0 billion unused back-up revolving syndicated credit facility and a total of $5.2 billion of bilateral revolving credit facilities.
Under the terms of an agreement between GE Capital and GE Industrial, GE Capital has the right to compel GE Industrial to borrow under the $15.0 billion unused back-up revolving syndicated credit facility. Under this agreement, GE Industrial would transfer the proceeds to GE Capital as intercompany loans, which would be subject to the same terms and conditions as those between GE Industrial and the lending banks. GE Capital has not exercised this right.
CREDIT RATINGS AND CONDITIONS. We have relied, and may continue to rely, on the short- and long-term debt capital markets to fund, among other things, a significant portion of our operations. The cost and availability of debt financing is influenced by our credit ratings. Moody’s Investors Service (Moody’s), Standard and Poor’s Global Ratings (S&P), and Fitch Ratings (Fitch) currently issue separate ratings on GE Industrial and GE Capital short- and long-term debt. The credit ratings of GE Industrial and GE Capital as of the date of this filing are set forth in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's
|
S&P
|
Fitch
|
GE Industrial
|
Outlook
|
Negative
|
CreditWatch Negative
|
Stable
|
|
Short term
|
P-2
|
A-2
|
F3
|
|
Long term
|
Baa1
|
BBB+
|
BBB
|
|
|
|
|
|
GE Capital
|
Outlook
|
Negative
|
CreditWatch Negative
|
Stable
|
|
Short term
|
P-2
|
A-2
|
F3
|
|
Long term
|
Baa1
|
BBB+
|
BBB
|
On March 10, 2021, Moody’s and Fitch affirmed their respective credit ratings, and S&P announced that they have placed us on CreditWatch with negative implications and currently expect to lower our credit ratings by one notch upon the closing of the GECAS transaction.
We are disclosing our credit ratings and any current quarter updates to these ratings to enhance understanding of our sources of liquidity and the effects of our ratings on our costs of funds and access to liquidity. Our ratings may be subject to a revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. For a description of some of the potential consequences of a reduction in our credit ratings, see the Financial Risks section of Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020.
Substantially all of the Company's debt agreements in place at March 31, 2021 do not contain material credit rating covenants. GE’s unused back-up revolving syndicated credit facility and certain of our bilateral revolving credit facilities contain a customary net debt-to-EBITDA financial covenant, which GE satisfied at March 31, 2021.
The Company may from time to time enter into agreements that contain minimum ratings requirements. The following table provides a summary of the maximum estimated liquidity impact in the event of further downgrades below each stated ratings level.
|
|
|
|
|
|
|
|
Triggers Below
|
At March 31, 2021
|
|
BBB+/A-2/P-2
|
$
|
277
|
|
|
BBB/A-3/P-3
|
621
|
|
|
BBB-
|
1,429
|
|
|
BB+ and below
|
468
|
|
Our most significant contractual ratings requirements are related to ordinary course commercial activities, our receivables sales programs, and our derivatives portfolio. The timing within the quarter of the potential liquidity impact of these areas may differ, as can the remedies to resolving any potential breaches of required ratings levels.
FOREIGN EXCHANGE. As a result of our global operations, we generate and incur a significant portion of our revenues and expenses in currencies other than the U.S. dollar. Such principal currencies include the euro, the Chinese renminbi, the British pound sterling and the Indian rupee, among others. The effects of foreign currency fluctuations on earnings, excluding the earnings impact of the underlying hedged item, was less than $0.1 billion for both the three months ended March 31, 2021 and 2020. This analysis excludes any offsetting effect from the forecasted future transactions that are economically hedged.
See Note 19 for further information about our risk exposures, our use of derivatives, and the effects of this activity on our financial statements.
STATEMENT OF CASH FLOWS – THREE MONTHS ENDED MARCH 31, 2021 VERSUS 2020. We manage the cash flow performance of our industrial and financial services businesses separately, in order to enable us and our investors to evaluate the cash from operating activities of our industrial businesses separately from the cash flows of our financial services business.
Transactions between GE Industrial and GE Capital are reported in the respective columns of our statement of cash flows, but are eliminated in deriving our consolidated statement of cash flows. See the GE Industrial working capital transactions section and Notes 4 and 22 for further information regarding certain transactions affecting our consolidated Statement of Cash Flows.
GE INDUSTRIAL CASH FLOWS FROM CONTINUING OPERATIONS. The most significant source of cash in GE Industrial CFOA is customer-related activities, the largest of which is collecting cash resulting from product or services sales. The most significant operating use of cash is to pay our suppliers, employees, tax authorities, contribute to post retirement plans and pay others for a wide range of material, services and taxes.
GE Industrial cash used for operating activities was $0.5 billion in 2021, a decrease of $1.2 billion compared with 2020, primarily due to: a decrease in cash used for working capital of $1.6 billion; partially offset by an increase in cash used for All other operating activities of $0.2 billion primarily due to increases in Aviation-related customer allowance accruals of $0.4 billion in 2020 and the settlement of an Alstom legacy legal matter of $0.2 billion in 2021, partially offset by lower net cash used for employee benefit liabilities of $0.3 billion. There was an insignificant decrease in Aviation-related customer allowance accruals in 2021.
The decrease in cash used for working capital was due to: a decrease in cash used for accounts payable and equipment project accruals of $1.0 billion, which was primarily as a result of lower disbursements related to purchases of materials in prior periods; a decrease in cash used for inventories, including deferred inventory, of $0.4 billion, which was primarily driven by lower material purchases, partially offset by lower liquidations; an increase in cash from current receivables of $0.2 billion, which was primarily driven by lower volume; and lower net liquidations of progress collections and current deferred income of $0.2 billion, which included a partial offset due to early payments received at our Aviation Military equipment business of $0.3 billion from a foreign government. These decreases were partially offset by changes in current contract assets of $0.2 billion, primarily due to a net unfavorable change in estimated profitability at Aviation in 2020.
GE Industrial cash from investing activities was $0.5 billion in 2021, a decrease of $19.5 billion compared with 2020, primarily due to: the nonrecurrence of proceeds from the sale our BioPharma business of $20.3 billion; partially offset by proceeds from the sales of a portion of our retained ownership interest in Baker Hughes of $0.7 billion. Cash used for additions to property, plant and equipment and internal-use software, which are components of GE Industrial free cash flows*, was $0.4 billion in 2021, down $0.2 billion compared with 2020.
GE Industrial cash used for financing activities was $0.8 billion in 2021, a decrease of $1.2 billion compared with 2020, primarily due to the non-recurrence of repayments of commercial paper of $1.1 billion in 2020.
GE CAPITAL CASH FLOWS FROM CONTINUING OPERATIONS. GE Capital cash used for operating activities was $2.5 billion in 2021, an increase of $3.0 billion compared with 2020, primarily due to: cash collateral paid, which is a standard market practice to minimize derivative counterparty exposures, and settlements paid on derivative contracts (components of All other operating activities) of $1.7 billion in 2021, compared with collateral and settlements received on derivative contracts of $1.4 billion in 2020.
GE Capital cash from investing activities was $1.2 billion in 2021, an increase of $0.5 billion compared with 2020, primarily due to: higher net collections of financing receivables of $1.1 billion partially offset by a decrease in cash related to our current receivables and supply chain finance programs with GE Industrial of $0.6 billion.
GE Capital cash used for financing activities was $1.4 billion in 2021, a decrease of $5.1 billion compared with 2020, primarily due to: lower net repayments of borrowings of $4.8 billion and lower cash settlements on derivatives hedging foreign currency debt of $0.3 billion.
GE CAPITAL CASH FLOWS FROM DISCONTINUED OPERATIONS. GE Capital cash from operating activities relates primarily to cash generated from earnings (loss) from discontinued operations in our GECAS business. GE Capital cash from investing activities increased by $0.2 billion primarily due to higher net collections of financing receivables of $0.3 billion.
*Non-GAAP Financial Measure
GE INDUSTRIAL WORKING CAPITAL TRANSACTIONS. Sales of Receivables. In order to manage short-term liquidity and credit exposure, GE Industrial may sell current customer receivables to GE Capital and other third parties. These transactions are made on arms-length terms and any discount related to time value of money is recognized within the respective GE Industrial business in the period these receivables were sold to GE Capital or third parties. See Note 4 for further information.
Supply Chain Finance Programs. GE Industrial facilitates voluntary supply chain finance programs with third parties, which provide participating GE Industrial suppliers the opportunity to sell their GE Industrial receivables to third parties at the sole discretion of both the suppliers and the third parties.
At March 31, 2021 and December 31, 2020, included in GE Industrial's accounts payable was $3.0 billion and $2.9 billion, respectively, of supplier invoices that are subject to the third-party programs. Total GE Industrial supplier invoices paid through these third-party programs were $1.6 billion and $1.1 billion for the three months ended March 31, 2021 and 2020, respectively.
Previously, GE Capital operated a supply chain finance program for suppliers to GE's Industrial businesses. The remaining GE Industrial liability associated with the funded participation in the GE Capital program was insignificant at March 31, 2021.
INTERCOMPANY TRANSACTIONS BETWEEN GE INDUSTRIAL AND GE CAPITAL. Transactions between related companies are made on arms-length terms and are reported in the GE Industrial and GE Capital columns of our financial statements, which we believe provide useful supplemental information to our consolidated financial statements. See Note 22 for further information.
GE Capital Finance Transactions. During the three months ended March 31, 2021 and 2020, GE Capital acquired from third parties three aircraft with a list price totaling $0.2 billion and five aircraft with a list price totaling $0.6 billion, respectively, that will be leased to others and are powered by engines manufactured by GE Aviation and affiliates. GE Capital made no payments to GE Aviation and affiliates related to spare engines and engine parts during the three months ended March 31, 2021 and $0.1 billion during the three months ended March 31, 2020, which included $0.1 billion to CFM International. Additionally, GE Capital had $2.0 billion and $2.1 billion of net book value of engines, originally manufactured by GE Aviation and affiliates and subsequently leased back to GE Aviation and affiliates at March 31, 2021 and December 31, 2020, respectively.
Also, during the three months ended March 31, 2021 and 2020, GE Industrial recognized equipment revenues of $0.4 billion and $0.5 billion, respectively, from customers within our Power and Renewable Energy segments in which GE Capital is an investee or is committed to be an investee in the underlying projects. At March 31, 2021, GE Capital had funded related investments of $0.1 billion.
For certain of these investments, in order to meet its underwriting criteria, GE Capital may obtain a direct guarantee from GE Industrial related to the performance of the third party. GE Industrial guarantees include direct performance or payment guarantees, return on investment guarantees and asset value guarantees. As of March 31, 2021, GE Industrial had outstanding guarantees to GE Capital on $0.8 billion of funded exposure and an insignificant amount on unfunded commitments, which included guarantees issued by industrial businesses. The recorded contingent liability for these guarantees was insignificant as of March 31, 2021 and is based on individual transaction level defaults, losses and/or returns.
CRITICAL ACCOUNTING ESTIMATES. Please refer to the Critical Accounting Estimates and Other Items sections within MD&A and Note 1 to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2020 for a discussion of our accounting policies and critical accounting estimates.
NEW ACCOUNTING STANDARDS. The Financial Accounting Standards Board issued new guidance on accounting for long-duration insurance contracts that is effective January 1, 2023. Early adoption is permitted, and if elected, the transition date can be either the beginning of the prior period or the earliest prior period presented. We are evaluating the effect of the new guidance on our consolidated financial statements and anticipate that its adoption will significantly change the accounting for measurements of our long-duration insurance liabilities. The new guidance requires cash flow assumptions used in the measurement of various insurance liabilities to be reviewed at least annually and updated if actual experience or other evidence indicates previous assumptions need to be revised with any required changes recorded in earnings. Under the current accounting guidance, the discount rate is based on expected investment yields, while under the new guidance the discount rate will be equivalent to the upper-medium grade (i.e., single A) fixed-income instrument yield reflecting the duration characteristics of the liability and is required to be updated in each reporting period with changes recorded in other comprehensive income. In measuring the insurance liabilities under the new guidance, contracts shall not be grouped together from different issue years. These changes result in the elimination of premium deficiency testing and shadow adjustments. While we continue to evaluate the effect of the new guidance on our ongoing financial reporting, we anticipate that its adoption will materially affect our financial statements. As the new guidance is only applicable to the measurements of our long-duration insurance liabilities under GAAP, it will not affect the accounting for our insurance reserves or the levels of capital and surplus under statutory accounting practices.
NON-GAAP FINANCIAL MEASURES. We believe that presenting non-GAAP financial measures provides management and investors useful measures to evaluate performance and trends of the total company and its businesses. This includes adjustments in recent periods to GAAP financial measures to increase period-to-period comparability following actions to strengthen our overall financial position and how we manage our business.
In addition, management recognizes that certain non-GAAP terms may be interpreted differently by other companies under different circumstances. In various sections of this report we have made reference to the following non-GAAP financial measures in describing our (1) revenues, specifically GE Industrial organic revenues by segment; GE Industrial organic revenues, and GE Industrial equipment and services organic revenues, (2) profit, specifically GE Industrial organic profit and profit margin by segment; Adjusted GE Industrial profit and profit margin (excluding certain items); Adjusted GE Industrial organic profit and profit margin; Adjusted earnings (loss); and Adjusted earnings (loss) per share (EPS), (3) cash flows, specifically GE Industrial free cash flows (FCF), and (4) debt balances, specifically GE Industrial net debt.
The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures follow.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GE INDUSTRIAL ORGANIC REVENUES, PROFIT (LOSS) AND PROFIT MARGIN BY SEGMENT (NON-GAAP)
|
|
|
Revenues
|
|
Segment profit (loss)
|
|
Profit margin
|
Three months ended March 31
|
|
2021
|
|
2020
|
|
V%
|
|
2021
|
|
2020
|
|
V%
|
|
2021
|
|
2020
|
V pts
|
Power (GAAP)
|
|
$
|
3,921
|
|
|
$
|
4,025
|
|
|
(3)
|
%
|
|
$
|
(87)
|
|
|
$
|
(131)
|
|
|
34
|
%
|
|
(2.2)
|
%
|
|
(3.3)
|
%
|
1.1pts
|
Less: acquisitions
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
Less: business dispositions
|
|
—
|
|
|
15
|
|
|
|
|
—
|
|
|
2
|
|
|
|
|
|
|
|
|
Less: foreign currency effect
|
|
63
|
|
|
—
|
|
|
|
|
(1)
|
|
|
—
|
|
|
|
|
|
|
|
|
Power organic (Non-GAAP)
|
|
$
|
3,858
|
|
|
$
|
4,009
|
|
|
(4)
|
%
|
|
$
|
(86)
|
|
|
$
|
(133)
|
|
|
35
|
%
|
|
(2.2)
|
%
|
|
(3.3)
|
%
|
1.1pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewable Energy (GAAP)
|
|
$
|
3,248
|
|
|
$
|
3,194
|
|
|
2
|
%
|
|
$
|
(234)
|
|
|
$
|
(327)
|
|
|
28
|
%
|
|
(7.2)
|
%
|
|
(10.2)
|
%
|
3.0pts
|
Less: acquisitions
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
Less: business dispositions
|
|
—
|
|
|
24
|
|
|
|
|
—
|
|
|
(4)
|
|
|
|
|
|
|
|
|
Less: foreign currency effect
|
|
90
|
|
|
—
|
|
|
|
|
(10)
|
|
|
—
|
|
|
|
|
|
|
|
|
Renewable Energy organic (Non-GAAP)
|
|
$
|
3,157
|
|
|
$
|
3,169
|
|
|
—
|
%
|
|
$
|
(224)
|
|
|
$
|
(323)
|
|
|
31
|
%
|
|
(7.1)
|
%
|
|
(10.2)
|
%
|
3.1pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aviation (GAAP)
|
|
$
|
4,992
|
|
|
$
|
6,892
|
|
|
(28)
|
%
|
|
$
|
641
|
|
|
$
|
1,003
|
|
|
(36)
|
%
|
|
12.8
|
%
|
|
14.6
|
%
|
(1.8)pts
|
Less: acquisitions
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
Less: business dispositions
|
|
—
|
|
|
25
|
|
|
|
|
—
|
|
|
(17)
|
|
|
|
|
|
|
|
|
Less: foreign currency effect
|
|
10
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
Aviation organic (Non-GAAP)
|
|
$
|
4,982
|
|
|
$
|
6,868
|
|
|
(27)
|
%
|
|
$
|
641
|
|
|
$
|
1,020
|
|
|
(37)
|
%
|
|
12.9
|
%
|
|
14.9
|
%
|
(2.0)pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare (GAAP)
|
|
$
|
4,308
|
|
|
$
|
4,727
|
|
|
(9)
|
%
|
|
$
|
698
|
|
|
$
|
867
|
|
|
(19)
|
%
|
|
16.2
|
%
|
|
18.3
|
%
|
(2.1)pts
|
Less: acquisitions
|
|
18
|
|
|
(21)
|
|
|
|
|
8
|
|
|
(6)
|
|
|
|
|
|
|
|
|
Less: business dispositions
|
|
—
|
|
|
865
|
|
|
|
|
—
|
|
|
380
|
|
|
|
|
|
|
|
|
Less: foreign currency effect
|
|
120
|
|
|
—
|
|
|
|
|
48
|
|
|
—
|
|
|
|
|
|
|
|
|
Healthcare organic (Non-GAAP)
|
|
$
|
4,170
|
|
|
$
|
3,884
|
|
|
7
|
%
|
|
$
|
643
|
|
|
$
|
493
|
|
|
30
|
%
|
|
15.4
|
%
|
|
12.7
|
%
|
2.7pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends. We also believe presenting organic revenues* and organic profit* separately for our industrial businesses provides management and investors with useful information about the trends of our industrial businesses and enables a more direct comparison to other non-financial companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GE INDUSTRIAL ORGANIC REVENUES (NON-GAAP)
|
Three months ended March 31
|
|
|
|
2021
|
2020
|
V%
|
|
|
|
|
GE Industrial revenues (GAAP)
|
$
|
16,329
|
|
$
|
18,844
|
|
(13)
|
%
|
|
|
|
|
Less: acquisitions
|
18
|
|
(21)
|
|
|
|
|
|
|
Less: business dispositions(a)
|
—
|
|
1,095
|
|
|
|
|
|
|
Less: foreign currency effect(b)
|
288
|
|
—
|
|
|
|
|
|
|
GE Industrial organic revenues (Non-GAAP)
|
$
|
16,023
|
|
$
|
17,770
|
|
(10)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Dispositions impact in 2020 primarily related to our BioPharma business, with revenues of $830 million.
(b) Foreign currency impact in 2021 was primarily driven by U.S. Dollar appreciation against euro, Brazilian real, and Chinese renminbi.
|
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends.
|
*Non-GAAP Financial Measure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GE INDUSTRIAL EQUIPMENT AND SERVICES
|
Three months ended March 31
|
|
|
ORGANIC REVENUES (NON-GAAP)
|
2021
|
2020
|
V%
|
|
|
|
|
GE Industrial equipment revenues (GAAP)
|
$
|
7,971
|
|
$
|
9,097
|
|
(12)
|
%
|
|
|
|
|
Less: acquisitions
|
—
|
|
—
|
|
|
|
|
|
|
Less: business dispositions
|
—
|
|
948
|
|
|
|
|
|
|
Less: foreign currency effect
|
189
|
|
—
|
|
|
|
|
|
|
GE Industrial equipment organic revenues (Non-GAAP)
|
$
|
7,782
|
|
$
|
8,149
|
|
(5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
GE Industrial services revenues (GAAP)
|
$
|
8,358
|
|
$
|
9,748
|
|
(14)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: acquisitions
|
18
|
|
(21)
|
|
|
|
|
|
|
Less: business dispositions
|
—
|
|
147
|
|
|
|
|
|
|
Less: foreign currency effect
|
99
|
|
—
|
|
|
|
|
|
|
GE Industrial services organic revenues (Non-GAAP)
|
$
|
8,241
|
|
$
|
9,622
|
|
(14)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED GE INDUSTRIAL PROFIT AND PROFIT MARGIN
|
Three months ended March 31
|
|
|
(EXCLUDING CERTAIN ITEMS) (NON-GAAP)
|
2021
|
2020
|
V%
|
|
|
|
GE Industrial total revenues (GAAP)
|
$
|
16,329
|
|
$
|
18,844
|
|
(13)
|
%
|
|
|
|
|
|
|
|
|
|
|
Costs
|
|
|
|
|
|
|
GE Industrial total costs and expenses (GAAP)
|
$
|
16,574
|
|
$
|
19,133
|
|
(13)
|
%
|
|
|
|
Less: GE Industrial interest and other financial charges
|
268
|
|
370
|
|
|
|
|
|
Less: non-operating benefit costs
|
433
|
|
616
|
|
|
|
|
|
Less: restructuring & other(a)
|
113
|
|
143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: noncontrolling interests
|
7
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted GE Industrial costs (Non-GAAP)
|
$
|
15,767
|
|
$
|
18,040
|
|
(13)
|
%
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
|
|
|
|
GE Industrial other income (GAAP)
|
$
|
623
|
|
$
|
6,874
|
|
(91)
|
%
|
|
|
|
Less: unrealized gains (losses)(a)
|
509
|
|
(5,794)
|
|
|
|
|
|
Less: restructuring & other
|
7
|
|
—
|
|
|
|
|
|
Less: gains (losses) and impairments for disposed or held for sale businesses(a)
|
(159)
|
|
12,439
|
|
|
|
|
|
Adjusted GE Industrial other income (Non-GAAP)
|
$
|
266
|
|
$
|
228
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
GE Industrial profit (GAAP)
|
$
|
378
|
|
$
|
6,585
|
|
(94)
|
%
|
|
|
|
GE Industrial profit margin (GAAP)
|
2.3
|
%
|
34.9
|
%
|
(32.6)pts
|
|
|
|
|
|
|
|
|
|
|
Adjusted GE Industrial profit (Non-GAAP)
|
$
|
828
|
|
$
|
1,032
|
|
(20)
|
%
|
|
|
|
Adjusted GE Industrial profit margin (Non-GAAP)
|
5.1
|
%
|
5.5
|
%
|
(0.4)pts
|
|
|
|
|
|
|
|
|
|
|
(a) See the Corporate Items and Eliminations section for further information.
|
We believe that adjusting industrial profit to exclude the effects of items that are not closely associated with ongoing operations provides management and investors with a meaningful measure that increases the period-to-period comparability. Gains (losses), unrealized gains (losses) and restructuring and other items are impacted by the timing and magnitude of gains associated with dispositions, and the timing and magnitude of costs associated with restructuring and other activities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED GE INDUSTRIAL ORGANIC PROFIT
|
Three months ended March 31
|
|
|
(NON-GAAP)
|
2021
|
2020
|
V%
|
|
|
|
|
Adjusted GE Industrial profit (Non-GAAP)
|
$
|
828
|
|
$
|
1,032
|
|
(20)
|
%
|
|
|
|
|
Less: acquisitions
|
8
|
|
9
|
|
|
|
|
|
|
Less: business dispositions
|
—
|
|
366
|
|
|
|
|
|
|
Less: foreign currency effect
|
43
|
|
—
|
|
|
|
|
|
|
Adjusted GE Industrial organic profit (Non-GAAP)
|
$
|
777
|
|
$
|
657
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted GE Industrial profit margin (Non-GAAP)
|
5.1
|
%
|
5.5
|
%
|
(0.4)pts
|
|
|
|
|
Adjusted GE Industrial organic profit margin (Non-GAAP)
|
4.8
|
%
|
3.7
|
%
|
1.1pts
|
|
|
|
|
|
|
|
|
|
|
|
|
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EARNINGS (LOSS) (NON-GAAP)
|
Three months ended March 31
|
|
|
|
2021
|
2020
|
V%
|
|
|
|
|
Consolidated earnings (loss) from continuing operations attributable to GE common shareholders (GAAP)(a)
|
$
|
18
|
|
$
|
6,158
|
|
(100)
|
%
|
|
|
|
|
Add: Accretion of redeemable noncontrolling interests (RNCI)
|
2
|
|
—
|
|
|
|
|
|
|
Less: GE Capital earnings (loss) from continuing operations attributable to GE common shareholders (GAAP)
|
(172)
|
|
(187)
|
|
|
|
|
|
|
GE Industrial earnings (loss) (Non-GAAP)
|
$
|
192
|
|
$
|
6,345
|
|
(97)
|
%
|
|
|
|
|
Non-operating benefits costs (pre-tax) (GAAP)
|
(433)
|
|
(616)
|
|
|
|
|
|
|
Tax effect on non-operating benefit costs
|
91
|
|
129
|
|
|
|
|
|
|
Less: non-operating benefit costs (net of tax)
|
(342)
|
|
(487)
|
|
|
|
|
|
|
Gains (losses) and impairments for disposed or held for sale businesses (pre-tax)(b)
|
(159)
|
|
12,439
|
|
|
|
|
|
|
Tax effect on gains (losses) and impairments for disposed or held for sale businesses
|
33
|
|
(1,265)
|
|
|
|
|
|
|
Less: gains (losses) and impairments for disposed or held for sale businesses (net of tax)
|
(126)
|
|
11,174
|
|
|
|
|
|
|
Restructuring & other (pre-tax)(b)
|
(106)
|
|
(143)
|
|
|
|
|
|
|
Tax effect on restructuring & other
|
22
|
|
30
|
|
|
|
|
|
|
Less: restructuring & other (net of tax)
|
(84)
|
|
(114)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) (pre-tax)(b)
|
509
|
|
(5,794)
|
|
|
|
|
|
|
Tax on unrealized gains (losses)
|
(152)
|
|
1,096
|
|
|
|
|
|
|
Less: unrealized gains (losses) (net of tax)
|
357
|
|
(4,697)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion of RNCI (pre-tax)
|
2
|
|
—
|
|
|
|
|
|
|
Tax effect on accretion of RNCI
|
—
|
|
—
|
|
|
|
|
|
|
Less: Accretion of RNCI (net of tax)
|
2
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted GE Industrial earnings (loss) (Non-GAAP)
|
$
|
384
|
|
$
|
469
|
|
(18)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
GE Capital earnings (loss) from continuing operations attributable to GE common shareholders (GAAP)
|
$
|
(172)
|
|
$
|
(187)
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: GE Capital tax benefit related to BioPharma sale
|
—
|
|
88
|
|
|
|
|
|
|
Less: GE Capital tax loss related to GECAS sale
|
(44)
|
|
—
|
|
|
|
|
|
|
Adjusted GE Capital earnings (loss) (Non-GAAP)
|
$
|
(129)
|
|
$
|
(275)
|
|
53
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted GE Industrial earnings (loss) (Non-GAAP)
|
$
|
384
|
|
$
|
469
|
|
(18)
|
%
|
|
|
|
|
Add: Adjusted GE Capital earnings (loss) (Non-GAAP)
|
(129)
|
|
(275)
|
|
53
|
%
|
|
|
|
|
Adjusted earnings (loss) (Non-GAAP)
|
$
|
256
|
|
$
|
194
|
|
32
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) See Note 18 for further information.
|
(b) See the Corporate Items and Eliminations section for further information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EARNINGS (LOSS) PER SHARE (EPS)
|
Three months ended March 31
|
|
|
(NON-GAAP)
|
2021
|
2020
|
V%
|
|
|
|
|
Consolidated EPS from continuing operations attributable to GE common shareholders (GAAP)
|
$
|
—
|
|
$
|
0.70
|
|
U
|
|
|
|
|
Add: Accretion of redeemable noncontrolling interests (RNCI)
|
—
|
|
—
|
|
|
|
|
|
|
Less: GE Capital EPS from continuing operations attributable to GE common shareholders (GAAP)
|
(0.02)
|
|
(0.02)
|
|
|
|
|
|
|
GE Industrial EPS (Non-GAAP)
|
$
|
0.02
|
|
$
|
0.73
|
|
(97)
|
%
|
|
|
|
|
Non-operating benefits costs (pre-tax) (GAAP)
|
(0.05)
|
|
(0.07)
|
|
|
|
|
|
|
Tax effect on non-operating benefit costs
|
0.01
|
|
0.01
|
|
|
|
|
|
|
Less: non-operating benefit costs (net of tax)
|
(0.04)
|
|
(0.06)
|
|
|
|
|
|
|
Gains (losses) and impairments for disposed or held for sale businesses (pre-tax)
|
(0.02)
|
|
1.42
|
|
|
|
|
|
|
Tax effect on gains (losses) and impairments for disposed or held for sale businesses
|
—
|
|
(0.14)
|
|
|
|
|
|
|
Less: gains (losses) and impairments for disposed or held for sale businesses (net of tax)
|
(0.01)
|
|
1.28
|
|
|
|
|
|
|
Restructuring & other (pre-tax)
|
(0.01)
|
|
(0.02)
|
|
|
|
|
|
|
Tax effect on restructuring & other
|
—
|
|
—
|
|
|
|
|
|
|
Less: restructuring & other (net of tax)
|
(0.01)
|
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) (pre-tax)
|
0.06
|
|
(0.66)
|
|
|
|
|
|
|
Tax on unrealized gains (losses)
|
(0.02)
|
|
0.13
|
|
|
|
|
|
|
Less: unrealized gains (losses) (net of tax)
|
0.04
|
|
(0.54)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accretion of RNCI (pre-tax)
|
—
|
|
—
|
|
|
|
|
|
|
Tax effect on accretion of RNCI
|
—
|
|
—
|
|
|
|
|
|
|
Less: Accretion of RNCI (net of tax)
|
—
|
|
—
|
|
|
|
|
|
|
Less: GE Industrial U.S. tax reform enactment adjustment
|
—
|
|
—
|
|
|
|
|
|
|
Adjusted GE Industrial EPS (Non-GAAP)
|
$
|
0.04
|
|
$
|
0.05
|
|
(20)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
GE Capital EPS from continuing operations attributable to GE common shareholders (GAAP)
|
$
|
(0.02)
|
|
$
|
(0.02)
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: GE Capital tax benefit related to BioPharma sale
|
—
|
|
0.01
|
|
|
|
|
|
|
Less: GE Capital tax loss related to GECAS sale
|
—
|
|
—
|
|
|
|
|
|
|
Adjusted GE Capital EPS (Non-GAAP)
|
$
|
(0.01)
|
|
$
|
(0.03)
|
|
67
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted GE Industrial EPS (Non-GAAP)
|
$
|
0.04
|
|
$
|
0.05
|
|
(20)
|
%
|
|
|
|
|
Add: Adjusted GE Capital EPS (Non-GAAP)
|
(0.01)
|
|
(0.03)
|
|
67
|
%
|
|
|
|
|
Adjusted EPS (Non-GAAP)
|
$
|
0.03
|
|
$
|
0.02
|
|
50
|
%
|
|
|
|
|
Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.
|
The service cost of our pension and other benefit plans are included in adjusted earnings (loss)*, which represents the ongoing cost of providing pension benefits to our employees. The components of non-operating benefit costs are mainly driven by capital allocation decisions and market performance, and we manage these separately from the operational performance of our businesses. Gains (losses), unrealized gains (losses) and restructuring and other items are impacted by the timing and magnitude of gains associated with dispositions, and the timing and magnitude of costs associated with restructuring and other activities. We believe that the retained costs in Adjusted earnings (loss)* provides management and investors a useful measure to evaluate the performance of the total company, and increases period-to-period comparability. We believe that presenting Adjusted Industrial earnings (loss)* separately for our financial services businesses also provides management and investors with useful information about the relative size of our industrial and financial services businesses in relation to the total company.
|
|
|
|
|
|
|
|
|
|
GE INDUSTRIAL FREE CASH FLOWS (FCF) (NON-GAAP)
|
Three months ended March 31
|
|
2021
|
2020
|
GE Industrial CFOA (GAAP)
|
$
|
(491)
|
|
$
|
(1,662)
|
|
Add: gross additions to property, plant and equipment
|
(332)
|
|
(504)
|
|
Add: gross additions to internal-use software
|
(23)
|
|
(58)
|
|
|
|
|
|
|
|
Less: taxes related to business sales
|
—
|
|
(17)
|
|
GE Industrial free cash flows (Non-GAAP)
|
$
|
(845)
|
|
$
|
(2,207)
|
|
|
|
|
We believe investors may find it useful to compare GE's Industrial free cash flows* performance without the effects of cash used for taxes related to business sales. We believe this measure will better allow management and investors to evaluate the capacity of our industrial operations to generate free cash flows.
|
*Non-GAAP Financial Measure
|
|
|
|
|
|
|
|
|
GE INDUSTRIAL NET DEBT (NON-GAAP)
|
March 31, 2021
|
December 31, 2020
|
Total GE Industrial short- and long-term borrowings (GAAP)
|
$
|
41,247
|
|
$
|
42,736
|
|
Less: GE Capital short- and long-term debt assumed by GE Industrial
|
21,538
|
|
22,390
|
|
Add: intercompany loans from GE Capital
|
3,177
|
|
3,177
|
|
Total adjusted GE Industrial borrowings
|
$
|
22,886
|
|
$
|
23,523
|
|
Pension and principal retiree benefit plan liabilities (pre-tax)(a)
|
25,492
|
|
25,492
|
|
Less: taxes at 21%
|
5,353
|
|
5,353
|
|
Pension and principal retiree benefit plan liabilities (net of tax)
|
$
|
20,139
|
|
$
|
20,139
|
|
GE Industrial operating lease liabilities
|
3,083
|
|
3,133
|
|
GE Industrial preferred stock
|
5,930
|
|
5,918
|
|
Less: 50% of GE Industrial preferred stock
|
2,965
|
|
2,959
|
|
50% of preferred stock
|
$
|
2,965
|
|
$
|
2,959
|
|
Deduction for total GE Industrial cash, cash equivalents and restricted cash
|
(22,361)
|
|
(23,209)
|
|
Less: 25% of GE Industrial cash, cash equivalents and restricted cash
|
(5,590)
|
|
(5,802)
|
|
Deduction for 75% of GE Industrial cash, cash equivalents and restricted cash
|
$
|
(16,771)
|
|
$
|
(17,407)
|
|
Total GE Industrial net debt (Non-GAAP)
|
$
|
32,302
|
|
$
|
32,347
|
|
(a) Represents the sum of the net deficit of principal pension, other pension, and principal retiree benefit plans at December 31, 2020. The funded status of our benefit plans is updated annually in the fourth quarter.
|
In this document we use GE Industrial net debt*, which is calculated based on rating agency methodologies. We are including the calculation of GE Industrial net debt* to provide investors more clarity regarding how the credit rating agencies measure GE Industrial leverage.
|
CONTROLS AND PROCEDURES. Under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that (i) our disclosure controls and procedures were effective as of March 31, 2021, and (ii) no change in internal control over financial reporting occurred during the quarter ended March 31, 2021, that has materially affected, or is reasonably likely to materially affect, such internal control over financial reporting.
OTHER FINANCIAL DATA. GE did not repurchase any equity securities during the three months ended March 31, 2021.
RISK FACTORS. The risk factor set forth below updates the corresponding risk factor in our Annual Report on Form 10-K for the year ended December 31, 2020. In addition to the risk factor below, you should carefully consider the risk factors discussed in our most recent Form 10-K report, which could have a material adverse effect on our business, reputation, financial position, results of operations, cash flows and stock price, and they could cause our future results to be materially different than we presently anticipate.
Business portfolio - Our success depends on achieving our strategic and financial objectives, including through dispositions, acquisitions, integrations and joint ventures. Over the past several years we have been pursuing a variety of dispositions, including the ongoing monetization of our remaining equity ownership position in Baker Hughes, and in March 2021 we announced a new plan to combine our GECAS business with AerCap. The proceeds from dispositions have been an important source of cash flow for the Company as part of our strategic and financial planning. When we seek to sell certain businesses, equity interests or assets, we may encounter difficulties in finding buyers or in market conditions that could delay or prevent the accomplishment of our objectives, and declines in the values of equity interests (such as our remaining interest in Baker Hughes, or the equity ownership position that we will hold in AerCap after completing our announced plan to combine GECAS with AerCap) or other assets that we sell can diminish the cash proceeds that we realize. We may dispose of businesses or assets at a price or on terms that are less favorable than we had anticipated, or with purchase price adjustments or the exclusion of assets or liabilities that must be divested, managed or run off separately. We can also be subject to limitations in the form of regulatory or governmental approvals that may prevent certain prospective counterparties from completing transactions with us or delay us from executing transactions on our preferred timeline, or arising from our debt or other contractual obligations that limit our ability to complete certain transactions. For example, the planned transaction to combine GECAS with AerCap is subject to closing conditions, including regulatory approvals in multiple jurisdictions, and accordingly there are risks that one or more closing conditions may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the proposed transaction, may require conditions, limitations or restrictions in connection with such approvals or that the required approval by the shareholders of AerCap may not be obtained. Moreover, dispositions have the effect of reducing the Company’s cash flow and earnings capacity, resulting in a less diversified portfolio of businesses and increasing our dependency on remaining businesses for our financial results from ongoing operations. Dispositions or other business separations also often involve continued financial involvement in the divested business, such as through continuing equity ownership, retained assets or liabilities, transition services agreements, commercial agreements, guarantees, indemnities or other current or contingent financial obligations or liabilities. Under these arrangements, performance by the divested businesses or other conditions outside our control could materially affect our future financial results. With respect to acquisitions, joint ventures and business integrations, we may not achieve expected returns and other benefits on a timely basis or at all as a result of changes in strategy or separation/integration challenges related to personnel, IT systems or other factors. Executing on all types of portfolio transactions can divert senior management time and resources from other pursuits. In addition, in connection with acquisitions over time, we have recorded significant goodwill and other intangible assets on our balance sheet, and if we are not able to realize the value of these assets, we may be required to incur charges relating to the impairment of these assets. We also participate in a number of joint ventures with other companies or government enterprises in various markets around the world, including joint ventures where we have a lesser degree of control over the business operations, which may expose us to additional operational, financial, reputational, legal or compliance risks.
*Non-GAAP Financial Measure
|
|
|
|
|
|
|
|
|
STATEMENT OF EARNINGS (LOSS)
|
Three months ended March 31
|
(UNAUDITED)
|
Consolidated
|
(In millions; per-share amounts in dollars)
|
2021
|
2020
|
Sales of goods
|
$
|
10,349
|
|
$
|
12,339
|
|
Sales of services
|
5,967
|
|
6,452
|
|
GE Capital revenues from services
|
803
|
|
699
|
|
Total revenues (Note 9)
|
17,118
|
|
19,490
|
|
|
|
|
Cost of goods sold
|
8,679
|
|
9,930
|
|
Cost of services sold
|
3,859
|
|
4,497
|
|
Selling, general and administrative expenses
|
2,891
|
|
3,061
|
|
Research and development
|
561
|
|
723
|
|
Interest and other financial charges
|
500
|
|
561
|
|
Insurance losses and annuity benefits
|
555
|
|
636
|
|
|
|
|
Non-operating benefit costs
|
430
|
|
618
|
|
Other costs and expenses
|
32
|
|
25
|
|
Total costs and expenses
|
17,506
|
|
20,051
|
|
|
|
|
Other income (Note 23)
|
626
|
|
6,869
|
|
|
|
|
Earnings (loss) from continuing operations before income taxes
|
238
|
|
6,308
|
|
Benefit (provision) for income taxes
|
(142)
|
|
(54)
|
|
Earnings (loss) from continuing operations
|
97
|
|
6,254
|
|
Earnings (loss) from discontinued operations, net of taxes (Note 2)
|
(2,894)
|
|
(21)
|
|
Net earnings (loss)
|
(2,798)
|
|
6,233
|
|
Less net earnings (loss) attributable to noncontrolling interests
|
5
|
|
34
|
|
Net earnings (loss) attributable to the Company
|
(2,802)
|
|
6,199
|
|
Preferred stock dividends
|
(72)
|
|
(43)
|
|
Net earnings (loss) attributable to GE common shareholders
|
$
|
(2,874)
|
|
$
|
6,156
|
|
|
|
|
Amounts attributable to GE common shareholders
|
|
|
Earnings (loss) from continuing operations
|
$
|
97
|
|
$
|
6,254
|
|
Less net earnings (loss) attributable to noncontrolling interests,
|
|
|
continuing operations
|
5
|
|
36
|
|
Earnings (loss) from continuing operations attributable to the Company
|
92
|
|
6,218
|
|
Preferred stock dividends
|
(72)
|
|
(43)
|
|
Earnings (loss) from continuing operations attributable
|
|
|
to GE common shareholders
|
20
|
|
6,175
|
|
Earnings (loss) from discontinued operations, net of taxes
|
(2,894)
|
|
(21)
|
|
Less net earnings (loss) attributable to
|
|
|
noncontrolling interests, discontinued operations
|
—
|
|
(2)
|
|
Net earnings (loss) attributable to GE common shareholders
|
$
|
(2,874)
|
|
$
|
6,156
|
|
|
|
|
Earnings (loss) per share from continuing operations (Note 18)
|
|
|
Diluted earnings (loss) per share
|
$
|
—
|
|
$
|
0.70
|
|
Basic earnings (loss) per share
|
$
|
—
|
|
$
|
0.70
|
|
|
|
|
Net earnings (loss) per share (Note 18)
|
|
|
Diluted earnings (loss) per share
|
$
|
(0.33)
|
|
$
|
0.70
|
|
Basic earnings (loss) per share
|
$
|
(0.33)
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENT OF EARNINGS (LOSS) (CONTINUED)
|
Three months ended March 31
|
(UNAUDITED)
|
GE Industrial
|
|
GE Capital
|
(In millions)
|
2021
|
2020
|
|
2021
|
2020
|
Sales of goods
|
$
|
10,349
|
|
$
|
12,359
|
|
|
$
|
—
|
|
$
|
—
|
|
Sales of services
|
5,980
|
|
6,486
|
|
|
—
|
|
—
|
|
GE Capital revenues from services
|
—
|
|
—
|
|
|
878
|
|
837
|
|
Total revenues
|
16,329
|
|
18,844
|
|
|
878
|
|
837
|
|
|
|
|
|
|
|
Cost of goods sold
|
8,679
|
|
9,949
|
|
|
—
|
|
—
|
|
Cost of services sold
|
3,867
|
|
4,526
|
|
|
5
|
|
5
|
|
Selling, general and administrative expenses
|
2,766
|
|
2,949
|
|
|
116
|
|
149
|
|
Research and development
|
561
|
|
723
|
|
|
—
|
|
—
|
|
Interest and other financial charges
|
268
|
|
370
|
|
|
291
|
|
271
|
|
Insurance losses and annuity benefits
|
—
|
|
—
|
|
|
567
|
|
653
|
|
|
|
|
|
|
|
Non-operating benefit costs
|
433
|
|
616
|
|
|
(3)
|
|
2
|
|
Other costs and expenses
|
—
|
|
—
|
|
|
42
|
|
33
|
|
Total costs and expenses
|
16,574
|
|
19,133
|
|
|
1,018
|
|
1,113
|
|
|
|
|
|
|
|
Other income (Note 23)
|
623
|
|
6,874
|
|
|
—
|
|
—
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations before income taxes
|
378
|
|
6,585
|
|
|
(140)
|
|
(277)
|
|
Benefit (provision) for income taxes
|
(148)
|
|
(187)
|
|
|
6
|
|
133
|
|
Earnings (loss) from continuing operations
|
230
|
|
6,398
|
|
|
(134)
|
|
(144)
|
|
Earnings (loss) from discontinued operations, net of taxes (Note 2)
|
—
|
|
(14)
|
|
|
(2,894)
|
|
(7)
|
|
Net earnings (loss)
|
230
|
|
6,384
|
|
|
(3,028)
|
|
(151)
|
|
Less net earnings (loss) attributable to noncontrolling interests
|
7
|
|
34
|
|
|
(2)
|
|
—
|
|
Net earnings (loss) attributable to the Company
|
223
|
|
6,350
|
|
|
(3,025)
|
|
(151)
|
|
Preferred stock dividends
|
(31)
|
|
—
|
|
|
(41)
|
|
(43)
|
|
Net earnings (loss) attributable to GE common shareholders
|
$
|
192
|
|
$
|
6,350
|
|
|
$
|
(3,066)
|
|
$
|
(194)
|
|
|
|
|
|
|
|
Amounts attributable to GE common shareholders:
|
|
|
|
|
|
Earnings (loss) from continuing operations
|
$
|
230
|
|
$
|
6,398
|
|
|
$
|
(134)
|
|
$
|
(144)
|
|
Less net earnings (loss) attributable to noncontrolling interests,
|
|
|
|
|
|
continuing operations
|
7
|
|
36
|
|
|
(2)
|
|
—
|
|
Earnings (loss) from continuing operations attributable to the Company
|
223
|
|
6,362
|
|
|
(131)
|
|
(144)
|
|
Preferred stock dividends
|
(31)
|
|
—
|
|
|
(41)
|
|
(43)
|
|
Earnings (loss) from continuing operations attributable
|
|
|
|
|
|
to GE common shareholders
|
192
|
|
6,362
|
|
|
(172)
|
|
(187)
|
|
Earnings (loss) from discontinued operations, net of taxes
|
—
|
|
(14)
|
|
|
(2,894)
|
|
(7)
|
|
Less net earnings (loss) attributable to
|
|
|
|
|
|
noncontrolling interests, discontinued operations
|
—
|
|
(2)
|
|
|
—
|
|
—
|
|
Net earnings (loss) attributable to GE common shareholders
|
$
|
192
|
|
$
|
6,350
|
|
|
$
|
(3,066)
|
|
$
|
(194)
|
|
|
|
|
|
|
|
|
|
|
STATEMENT OF FINANCIAL POSITION (UNAUDITED)
|
Consolidated
|
(In millions, except share amounts)
|
March 31, 2021
|
December 31, 2020
|
Cash, cash equivalents and restricted cash(a)
|
$
|
31,783
|
|
$
|
36,530
|
|
Investment securities (Note 3)
|
6,741
|
|
7,319
|
|
Current receivables (Note 4)
|
15,381
|
|
16,691
|
|
Financing receivables – net (Note 5)
|
306
|
|
326
|
|
Inventories, including deferred inventory costs (Note 6)
|
16,530
|
|
15,890
|
|
Other GE Capital receivables
|
1,339
|
|
1,549
|
|
Receivable from GE Capital
|
—
|
|
—
|
|
Current contract assets (Note 10)
|
5,821
|
|
5,764
|
|
All other current assets (Note 11)
|
1,376
|
|
1,109
|
|
Assets of discontinued operations (Note 2)
|
33,922
|
|
—
|
|
Current assets
|
113,198
|
|
85,180
|
|
|
|
|
Investment securities (Note 3)
|
40,786
|
|
42,549
|
|
Financing receivables – net (Note 5)
|
—
|
|
—
|
|
Other GE Capital receivables
|
4,634
|
|
4,661
|
|
Property, plant and equipment – net (Note 7)
|
16,296
|
|
16,699
|
|
Receivable from GE Capital
|
—
|
|
—
|
|
Goodwill (Note 8)
|
25,320
|
|
25,524
|
|
Other intangible assets – net (Note 8)
|
9,395
|
|
9,671
|
|
Contract and other deferred assets (Note 10)
|
5,985
|
|
5,888
|
|
All other assets (Note 11)
|
12,308
|
|
11,038
|
|
Deferred income taxes (Note 16)
|
14,232
|
|
14,253
|
|
Assets of discontinued operations (Note 2)
|
3,009
|
|
40,749
|
|
Total assets
|
$
|
245,164
|
|
$
|
256,211
|
|
|
|
|
Short-term borrowings (Note 12)
|
$
|
4,468
|
|
$
|
4,713
|
|
Short-term borrowings assumed by GE (Note 12)
|
—
|
|
—
|
|
Accounts payable and equipment project accruals
|
16,090
|
|
16,458
|
|
Progress collections and deferred income (Note 10)
|
17,993
|
|
18,371
|
|
All other current liabilities (Note 15)
|
14,139
|
|
15,071
|
|
Liabilities of discontinued operations (Note 2)
|
4,991
|
|
—
|
|
Current liabilities
|
57,681
|
|
54,613
|
|
|
|
|
Deferred income (Note 10)
|
1,748
|
|
1,801
|
|
Long-term borrowings (Note 12)
|
66,890
|
|
70,189
|
|
Long-term borrowings assumed by GE (Note 12)
|
—
|
|
—
|
|
Insurance liabilities and annuity benefits (Note 13)
|
39,562
|
|
42,191
|
|
Non-current compensation and benefits
|
29,104
|
|
29,677
|
|
All other liabilities (Note 15)
|
14,821
|
|
15,484
|
|
Liabilities of discontinued operations (Note 2)
|
204
|
|
5,182
|
|
Total liabilities
|
210,011
|
|
219,138
|
|
|
|
|
Preferred stock (5,939,875 shares outstanding at both March 31, 2021
and December 31, 2020)
|
6
|
|
6
|
|
Common stock (8,778,641,000 and 8,765,493,000 shares outstanding
at March 31, 2021 and December 31, 2020, respectively)
|
702
|
|
702
|
|
Accumulated other comprehensive income (loss) – net attributable to GE
|
(8,893)
|
|
(9,749)
|
|
Other capital
|
34,042
|
|
34,307
|
|
Retained earnings
|
89,276
|
|
92,247
|
|
Less common stock held in treasury
|
(81,548)
|
|
(81,961)
|
|
Total GE shareholders’ equity
|
33,585
|
|
35,552
|
|
Noncontrolling interests
|
1,568
|
|
1,522
|
|
Total equity
|
35,153
|
|
37,073
|
|
Total liabilities and equity
|
$
|
245,164
|
|
$
|
256,211
|
|
(a) Excluded $1,707 million and $455 million at March 31, 2021 and December 31, 2020, respectively, in Insurance, which is subject to regulatory restrictions. This balance is included in All other assets. See Note 11 for further information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENT OF FINANCIAL POSITION (CONTINUED)
|
GE Industrial
|
|
GE Capital
|
(UNAUDITED) (In millions, except share amounts)
|
March 31, 2021
|
December 31, 2020
|
|
March 31, 2021
|
December 31, 2020
|
Cash, cash equivalents and restricted cash
|
$
|
22,361
|
|
$
|
23,209
|
|
|
$
|
9,422
|
|
$
|
13,322
|
|
Investment securities (Note 3)
|
6,741
|
|
7,319
|
|
|
—
|
|
—
|
|
Current receivables (Note 4)
|
12,418
|
|
13,442
|
|
|
—
|
|
—
|
|
Financing receivables – net (Note 5)
|
—
|
|
—
|
|
|
3,738
|
|
4,172
|
|
Inventories, including deferred inventory costs (Note 6)
|
16,530
|
|
15,890
|
|
|
—
|
|
—
|
|
Other GE Capital receivables
|
—
|
|
—
|
|
|
2,260
|
|
3,280
|
|
Receivable from GE Capital
|
1,784
|
|
2,432
|
|
|
—
|
|
—
|
|
Current contract assets (Note 10)
|
5,821
|
|
5,764
|
|
|
—
|
|
—
|
|
All other current assets (Note 11)
|
1,062
|
|
835
|
|
|
518
|
|
543
|
|
Assets of discontinued operations (Note 2)
|
—
|
|
—
|
|
|
33,922
|
|
—
|
|
Current assets
|
66,716
|
|
68,892
|
|
|
49,860
|
|
21,317
|
|
|
|
|
|
|
|
Investment securities (Note 3)
|
32
|
|
36
|
|
|
40,756
|
|
42,515
|
|
Financing receivables – net (Note 5)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
Other GE Capital receivables
|
—
|
|
—
|
|
|
5,077
|
|
5,076
|
|
Property, plant and equipment – net (Note 7)
|
16,039
|
|
16,433
|
|
|
261
|
|
271
|
|
Receivable from GE Capital
|
16,577
|
|
16,780
|
|
|
—
|
|
—
|
|
Goodwill (Note 8)
|
25,320
|
|
25,524
|
|
|
—
|
|
—
|
|
Other intangible assets – net (Note 8)
|
9,358
|
|
9,632
|
|
|
37
|
|
39
|
|
Contract and other deferred assets (Note 10)
|
5,985
|
|
5,921
|
|
|
—
|
|
—
|
|
All other assets (Note 11)
|
7,952
|
|
7,948
|
|
|
4,617
|
|
3,354
|
|
Deferred income taxes (Note 16)
|
9,209
|
|
9,154
|
|
|
5,023
|
|
5,099
|
|
Assets of discontinued operations (Note 2)
|
132
|
|
144
|
|
|
2,876
|
|
40,587
|
|
Total assets
|
$
|
157,321
|
|
$
|
160,462
|
|
|
$
|
108,507
|
|
$
|
118,257
|
|
|
|
|
|
|
|
Short-term borrowings (Note 12)
|
$
|
535
|
|
$
|
918
|
|
|
$
|
2,426
|
|
$
|
1,963
|
|
Short-term borrowings assumed by GE (Note 12)
|
1,784
|
|
2,432
|
|
|
1,784
|
|
2,432
|
|
Accounts payable and equipment project accruals
|
15,839
|
|
16,380
|
|
|
841
|
|
918
|
|
Progress collections and deferred income (Note 10)
|
17,993
|
|
18,371
|
|
|
—
|
|
—
|
|
All other current liabilities (Note 15)
|
13,508
|
|
14,131
|
|
|
1,507
|
|
2,288
|
|
Liabilities of discontinued operations (Note 2)
|
—
|
|
—
|
|
|
4,991
|
|
—
|
|
Current liabilities
|
49,659
|
|
52,232
|
|
|
11,549
|
|
7,602
|
|
|
|
|
|
|
|
Deferred income (Note 10)
|
1,748
|
|
1,801
|
|
|
—
|
|
—
|
|
Long-term borrowings (Note 12)
|
19,174
|
|
19,428
|
|
|
27,962
|
|
30,803
|
|
Long-term borrowings assumed by GE (Note 12)
|
19,754
|
|
19,957
|
|
|
16,577
|
|
16,780
|
|
Insurance liabilities and annuity benefits (Note 13)
|
—
|
|
—
|
|
|
40,004
|
|
42,565
|
|
Non-current compensation and benefits
|
28,769
|
|
29,291
|
|
|
327
|
|
379
|
|
All other liabilities (Note 15)
|
14,586
|
|
15,072
|
|
|
363
|
|
539
|
|
Liabilities of discontinued operations (Note 2)
|
125
|
|
139
|
|
|
79
|
|
5,058
|
|
Total liabilities
|
133,815
|
|
137,921
|
|
|
96,861
|
|
103,726
|
|
|
|
|
|
|
|
Preferred stock (5,939,875 shares outstanding at both
March 31, 2021 and December 31, 2020)
|
6
|
|
6
|
|
|
—
|
|
6
|
|
Common stock (8,778,641,000 and 8,765,493,000 shares outstanding at
March 31, 2021 and December 31, 2020, respectively)
|
702
|
|
702
|
|
|
5
|
|
—
|
|
Accumulated other comprehensive income (loss) – net attributable to GE
|
(8,108)
|
|
(8,945)
|
|
|
(786)
|
|
(804)
|
|
Other capital
|
16,055
|
|
16,466
|
|
|
17,982
|
|
17,835
|
|
Retained earnings
|
95,006
|
|
94,910
|
|
|
(5,730)
|
|
(2,663)
|
|
Less common stock held in treasury
|
(81,548)
|
|
(81,961)
|
|
|
—
|
|
—
|
|
Total GE shareholders’ equity
|
22,113
|
|
21,179
|
|
|
11,472
|
|
14,373
|
|
Noncontrolling interests
|
1,393
|
|
1,363
|
|
|
175
|
|
159
|
|
Total equity
|
23,506
|
|
22,542
|
|
|
11,646
|
|
14,531
|
|
Total liabilities and equity
|
$
|
157,321
|
|
$
|
160,462
|
|
|
$
|
108,507
|
|
$
|
118,257
|
|
|
|
|
|
|
|
|
|
|
STATEMENT OF CASH FLOWS
|
Three months ended March 31
|
(UNAUDITED)
|
Consolidated
|
(In millions)
|
2021
|
2020
|
Net earnings (loss)
|
$
|
(2,798)
|
|
$
|
6,233
|
|
|
|
|
|
|
|
(Earnings) loss from discontinued operations
|
2,894
|
|
21
|
|
Adjustments to reconcile net earnings (loss)
|
|
|
to cash provided from operating activities
|
|
|
Depreciation and amortization of property, plant and equipment (Note 7)
|
452
|
|
461
|
|
Amortization of intangible assets (Note 8)
|
301
|
|
318
|
|
|
|
|
|
|
|
(Gains) losses on purchases and sales of business interests (Note 23)
|
(3)
|
|
(12,372)
|
|
(Gains) losses on equity securities (Note 23)
|
(296)
|
|
5,873
|
|
Principal pension plans cost (Note 14)
|
658
|
|
877
|
|
Principal pension plans employer contributions
|
(74)
|
|
(70)
|
|
Other postretirement benefit plans (net)
|
(289)
|
|
(254)
|
|
Provision (benefit) for income taxes
|
142
|
|
54
|
|
Cash recovered (paid) during the year for income taxes
|
(322)
|
|
(310)
|
|
Changes in operating working capital:
|
|
|
Decrease (increase) in current receivables
|
946
|
|
(503)
|
|
Decrease (increase) in inventories, including deferred inventory costs
|
(722)
|
|
(1,077)
|
|
Decrease (increase) in current contract assets
|
(35)
|
|
145
|
|
Increase (decrease) in accounts payable and equipment project accruals
|
(349)
|
|
(617)
|
|
Increase (decrease) in progress collections and current deferred income
|
(425)
|
|
(590)
|
|
All other operating activities
|
(2,719)
|
|
892
|
|
Cash from (used for) operating activities – continuing operations
|
(2,640)
|
|
(919)
|
|
Cash from (used for) operating activities – discontinued operations
|
680
|
|
686
|
|
Cash from (used for) operating activities
|
(1,959)
|
|
(233)
|
|
|
|
|
Additions to property, plant and equipment
|
(332)
|
|
(504)
|
|
Dispositions of property, plant and equipment
|
34
|
|
28
|
|
Additions to internal-use software
|
(24)
|
|
(60)
|
|
Net decrease (increase) in financing receivables
|
21
|
|
(103)
|
|
|
|
|
Proceeds from principal business dispositions
|
1
|
|
20,505
|
|
Net cash from (payments for) principal businesses purchased
|
—
|
|
(6)
|
|
|
|
|
Sales of retained ownership interests
|
735
|
|
—
|
|
Net (purchases) dispositions of GE Capital investment securities
|
(709)
|
|
(1,289)
|
|
All other investing activities
|
1,121
|
|
1,455
|
|
Cash from (used for) investing activities – continuing operations
|
847
|
|
20,025
|
|
Cash from (used for) investing activities – discontinued operations
|
(646)
|
|
(920)
|
|
Cash from (used for) investing activities
|
202
|
|
19,105
|
|
|
|
|
Net increase (decrease) in borrowings (maturities of 90 days or less)
|
(319)
|
|
(1,905)
|
|
Newly issued debt (maturities longer than 90 days)
|
314
|
|
125
|
|
Repayments and other debt reductions (maturities longer than 90 days)
|
(1,513)
|
|
(5,867)
|
|
|
|
|
|
|
|
Dividends paid to shareholders
|
(148)
|
|
(89)
|
|
All other financing activities
|
57
|
|
(226)
|
|
Cash from (used for) financing activities – continuing operations
|
(1,608)
|
|
(7,962)
|
|
Cash from (used for) financing activities – discontinued operations
|
3
|
|
43
|
|
Cash from (used for) financing activities
|
(1,605)
|
|
(7,919)
|
|
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash
|
(131)
|
|
(256)
|
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
(3,494)
|
|
10,697
|
|
Cash, cash equivalents and restricted cash at beginning of year
|
37,608
|
|
37,077
|
|
Cash, cash equivalents and restricted cash at March 31
|
34,115
|
|
47,774
|
|
Less cash, cash equivalents and restricted cash of discontinued operations at March 31
|
625
|
|
584
|
|
Cash, cash equivalents and restricted cash of continuing operations at March 31
|
$
|
33,490
|
|
$
|
47,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENT OF CASH FLOWS (CONTINUED)
|
Three months ended March 31
|
(UNAUDITED)
|
GE Industrial
|
|
GE Capital
|
(In millions)
|
2021
|
2020
|
|
2021
|
2020
|
Net earnings (loss)
|
$
|
230
|
|
$
|
6,384
|
|
|
$
|
(3,028)
|
|
$
|
(151)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Earnings) loss from discontinued operations
|
—
|
|
14
|
|
|
2,894
|
|
7
|
|
Adjustments to reconcile net earnings (loss)
|
|
|
|
|
|
to cash provided from operating activities
|
|
|
|
|
|
Depreciation and amortization of property, plant and equipment (Note 7)
|
446
|
|
453
|
|
|
6
|
|
7
|
|
Amortization of intangible assets (Note 8)
|
297
|
|
315
|
|
|
3
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Gains) losses on purchases and sales of business interests (Note 23)
|
(3)
|
|
(12,372)
|
|
|
—
|
|
—
|
|
(Gains) losses on equity securities (Note 23)
|
(293)
|
|
5,789
|
|
|
(4)
|
|
85
|
|
Principal pension plans cost (Note 14)
|
658
|
|
877
|
|
|
—
|
|
—
|
|
Principal pension plans employer contributions
|
(74)
|
|
(70)
|
|
|
—
|
|
—
|
|
Other postretirement benefit plans (net)
|
(275)
|
|
(247)
|
|
|
(14)
|
|
(8)
|
|
Provision (benefit) for income taxes
|
148
|
|
187
|
|
|
(6)
|
|
(133)
|
|
Cash recovered (paid) during the year for income taxes
|
(336)
|
|
(278)
|
|
|
14
|
|
(32)
|
|
Changes in operating working capital:
|
|
|
|
|
|
Decrease (increase) in current receivables
|
691
|
|
487
|
|
|
—
|
|
—
|
|
Decrease (increase) in inventories, including deferred inventory costs
|
(681)
|
|
(1,065)
|
|
|
—
|
|
—
|
|
Decrease (increase) in current contract assets
|
(35)
|
|
145
|
|
|
—
|
|
—
|
|
Increase (decrease) in accounts payable and equipment project accruals
|
(449)
|
|
(1,475)
|
|
|
14
|
|
(18)
|
|
Increase (decrease) in progress collections and current deferred income
|
(425)
|
|
(590)
|
|
|
—
|
|
—
|
|
All other operating activities
|
(390)
|
|
(215)
|
|
|
(2,359)
|
|
763
|
|
Cash from (used for) operating activities – continuing operations
|
(491)
|
|
(1,662)
|
|
|
(2,479)
|
|
524
|
|
Cash from (used for) operating activities – discontinued operations
|
—
|
|
29
|
|
|
681
|
|
658
|
|
Cash from (used for) operating activities
|
(491)
|
|
(1,633)
|
|
|
(1,798)
|
|
1,181
|
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
(332)
|
|
(504)
|
|
|
—
|
|
—
|
|
Dispositions of property, plant and equipment
|
34
|
|
29
|
|
|
—
|
|
—
|
|
Additions to internal-use software
|
(23)
|
|
(58)
|
|
|
(1)
|
|
(1)
|
|
Net decrease (increase) in financing receivables
|
—
|
|
—
|
|
|
575
|
|
(559)
|
|
|
|
|
|
|
|
Proceeds from principal business dispositions
|
1
|
|
20,505
|
|
|
—
|
|
—
|
|
Net cash from (payments for) principal businesses purchased
|
—
|
|
(6)
|
|
|
—
|
|
—
|
|
|
|
|
|
|
|
Sales of retained ownership interests
|
735
|
|
—
|
|
|
—
|
|
—
|
|
Net (purchases) dispositions of GE Capital investment securities
|
—
|
|
—
|
|
|
(709)
|
|
(1,289)
|
|
All other investing activities
|
133
|
|
81
|
|
|
1,334
|
|
2,579
|
|
Cash from (used for) investing activities – continuing operations
|
548
|
|
20,046
|
|
|
1,199
|
|
730
|
|
Cash from (used for) investing activities – discontinued operations
|
—
|
|
(33)
|
|
|
(646)
|
|
(887)
|
|
Cash from (used for) investing activities
|
549
|
|
20,013
|
|
|
553
|
|
(157)
|
|
|
|
|
|
|
|
Net increase (decrease) in borrowings (maturities of 90 days or less)
|
(655)
|
|
(1,881)
|
|
|
(223)
|
|
(514)
|
|
Newly issued debt (maturities longer than 90 days)
|
—
|
|
1
|
|
|
315
|
|
124
|
|
Repayments and other debt reductions (maturities longer than 90 days)
|
(20)
|
|
(64)
|
|
|
(1,493)
|
|
(5,804)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid to shareholders
|
(118)
|
|
(89)
|
|
|
(41)
|
|
(42)
|
|
All other financing activities
|
(27)
|
|
(12)
|
|
|
84
|
|
(214)
|
|
Cash from (used for) financing activities – continuing operations
|
(820)
|
|
(2,045)
|
|
|
(1,358)
|
|
(6,450)
|
|
Cash from (used for) financing activities – discontinued operations
|
—
|
|
—
|
|
|
3
|
|
43
|
|
Cash from (used for) financing activities
|
(820)
|
|
(2,045)
|
|
|
(1,355)
|
|
(6,406)
|
|
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash
|
(85)
|
|
(143)
|
|
|
(46)
|
|
(113)
|
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
(848)
|
|
16,193
|
|
|
(2,646)
|
|
(5,495)
|
|
Cash, cash equivalents and restricted cash at beginning of year
|
23,209
|
|
17,617
|
|
|
14,400
|
|
19,460
|
|
Cash, cash equivalents and restricted cash at March 31
|
22,361
|
|
33,810
|
|
|
11,754
|
|
13,964
|
|
Less cash, cash equivalents and restricted cash of discontinued operations at March 31
|
—
|
|
—
|
|
|
625
|
|
584
|
|
Cash, cash equivalents and restricted cash of continuing operations at March 31
|
$
|
22,361
|
|
$
|
33,810
|
|
|
$
|
11,129
|
|
$
|
13,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
|
Three months ended March 31
|
|
|
(In millions, net of tax)
|
2021
|
2020
|
|
|
|
Net earnings (loss)
|
$
|
(2,798)
|
|
$
|
6,233
|
|
|
|
|
Less net earnings (loss) attributable to noncontrolling interests
|
5
|
|
34
|
|
|
|
|
Net earnings (loss) attributable to the Company
|
$
|
(2,802)
|
|
$
|
6,199
|
|
|
|
|
|
|
|
|
|
|
Investment securities
|
$
|
(18)
|
|
$
|
(41)
|
|
|
|
|
Currency translation adjustments
|
110
|
|
135
|
|
|
|
|
Cash flow hedges
|
62
|
|
(211)
|
|
|
|
|
Benefit plans
|
705
|
|
1,035
|
|
|
|
|
Other comprehensive income (loss)
|
859
|
|
918
|
|
|
|
|
Less: other comprehensive income (loss) attributable to noncontrolling interests
|
3
|
|
5
|
|
|
|
|
Other comprehensive income (loss) attributable to the Company
|
$
|
856
|
|
$
|
913
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
$
|
(1,939)
|
|
$
|
7,152
|
|
|
|
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
8
|
|
39
|
|
|
|
|
Comprehensive income (loss) attributable to the Company
|
$
|
(1,947)
|
|
$
|
7,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
|
Three months ended March 31
|
|
|
(In millions)
|
2021
|
2020
|
|
|
|
Preferred stock issued
|
$
|
6
|
|
$
|
6
|
|
|
|
|
Common stock issued
|
$
|
702
|
|
$
|
702
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
(9,749)
|
|
(11,732)
|
|
|
|
|
Investment securities
|
(18)
|
|
(41)
|
|
|
|
|
Currency translation adjustments
|
108
|
|
133
|
|
|
|
|
Cash flow hedges
|
62
|
|
(211)
|
|
|
|
|
Benefit plans
|
704
|
|
1,032
|
|
|
|
|
Accumulated other comprehensive income (loss) ending balance
|
$
|
(8,893)
|
|
$
|
(10,819)
|
|
|
|
|
Beginning balance
|
34,307
|
|
34,405
|
|
|
|
|
Gains (losses) on treasury stock dispositions
|
(384)
|
|
(249)
|
|
|
|
|
Stock-based compensation
|
106
|
|
105
|
|
|
|
|
Other changes
|
14
|
|
35
|
|
|
|
|
Other capital ending balance
|
$
|
34,042
|
|
$
|
34,296
|
|
|
|
|
Beginning balance
|
92,247
|
|
87,732
|
|
|
|
|
Net earnings (loss) attributable to the Company
|
(2,802)
|
|
6,199
|
|
|
|
|
Dividends and other transactions with shareholders
|
(168)
|
|
(142)
|
|
|
|
|
Changes in accounting (Note 1)
|
—
|
|
(175)
|
|
|
|
|
Retained earnings ending balance
|
$
|
89,276
|
|
$
|
93,615
|
|
|
|
|
Beginning balance
|
(81,961)
|
|
(82,797)
|
|
|
|
|
Purchases
|
(38)
|
|
(14)
|
|
|
|
|
Dispositions
|
450
|
|
295
|
|
|
|
|
Common stock held in treasury ending balance
|
$
|
(81,548)
|
|
$
|
(82,516)
|
|
|
|
|
GE shareholders' equity balance
|
33,585
|
|
35,284
|
|
|
|
|
Noncontrolling interests balance (Note 17)
|
1,568
|
|
1,575
|
|
|
|
|
Total equity balance at March 31
|
$
|
35,153
|
|
$
|
36,859
|
|
|
|
|
NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. We present our financial statements in a three-column format, which allows investors to see our GE industrial operations separately from our financial services operations. We believe that this provides useful supplemental information to our consolidated financial statements. To the extent that we have transactions between GE Industrial and GE Capital, these transactions are made on arms-length terms, are reported in the respective columns of our financial statements and are eliminated in consolidation. See Note 22 for further information.
Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP), which requires us to make estimates based on assumptions about current and, for some estimates, future economic and market conditions which affect reported amounts and related disclosures in our financial statements. Although our current estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. In particular, a number of estimates have been and will continue to be affected by the ongoing Coronavirus Disease 2019 (COVID-19) pandemic. The severity, magnitude and duration, as well as the economic consequences, of the COVID-19 pandemic, are uncertain, rapidly changing and difficult to predict. As a result, our accounting estimates and assumptions may change over time in response to COVID-19. Such changes could result in future impairments of goodwill, intangibles, long-lived assets and investment securities, revisions to estimated profitability on long-term product service agreements, incremental credit losses on receivables and debt securities, a decrease in the carrying amount of our tax assets, or an increase in our insurance liabilities and pension obligations as of the time of a relevant measurement event.
In preparing our Statement of Cash Flows, we make certain adjustments to reflect cash flows that cannot otherwise be calculated by changes in our Statement of Financial Position. These adjustments may include, but are not limited to, the effects of currency exchange, acquisitions and dispositions of businesses, businesses classified as held for sale, the timing of settlements to suppliers for property, plant and equipment, non-cash gains/losses and other balance sheet reclassifications.
We have reclassified certain prior-period amounts to conform to the current-period’s presentation. Unless otherwise noted, tables are presented in U.S. dollars in millions. Certain columns and rows may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in millions. Earnings per share amounts are computed independently for earnings from continuing operations, earnings from discontinued operations and net earnings. As a result, the sum of per-share amounts may not equal the total. Unless otherwise indicated, information in these notes to the consolidated financial statements relates to continuing operations. Certain of our operations have been presented as discontinued. We present businesses whose disposal represents a strategic shift that has, or will have, a major effect on our operations and financial results as discontinued operations when the components meet the criteria for held for sale, are sold, or spun-off. See Note 2 for further information.
The accompanying consolidated financial statements and notes are unaudited. The results reported in these consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. These consolidated financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2020.
Our significant accounting policies are described in Note 1 of our aforementioned Annual Report.
ACCOUNTING CHANGES. On January 1, 2021, we adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The ASU removes certain exceptions from the guidance in ASC 740 related to intra-period tax allocations, interim calculations and the recognition of deferred tax liabilities for outside basis differences and clarifies and simplifies several other aspects of accounting for income taxes. Different transition methods apply to the various income tax simplifications. For the changes requiring a retrospective or modified retrospective transition, the adoption of the new standard did not have a material impact to our financial statements.
NOTE 2. BUSINESSES HELD FOR SALE AND DISCONTINUED OPERATIONS. On March 31, 2020, we completed the sale of our BioPharma business within our Healthcare segment for total consideration of $21,112 million (after certain working capital adjustments) and incurred $185 million of cash payments directly associated with the transaction. In the first quarter of 2020, we recognized a pre-tax gain of $12,292 million ($11,145 million after-tax) in our consolidated Statement of Earnings (Loss).
DISCONTINUED OPERATIONS. Primarily comprise our GE Capital Aviation Services (GECAS) business, our mortgage portfolio in Poland, and other trailing assets and liabilities associated with the dispositions of certain GE Capital and GE Industrial businesses. Results of operations, financial position and cash flows for these businesses are reported as discontinued operations for all periods presented.
GECAS. On March 9, 2021 we entered into an agreement with AerCap Holdings N.V. (AerCap) to combine our GECAS business with AerCap. GE will receive total consideration consisting of $23,905 million cash subject to contractual closing adjustments, 111.5 million shares of AerCap common stock (approximately 46% ownership interest) valued at $6,550 million based on the AerCap’s closing share price of $58.74 on March 31, 2021 and $1,000 million paid in AerCap notes and/or cash upon closing at AerCap's option. As a result, we have reclassified GECAS' results to discontinued operations for all periods presented and recognized a non-cash after-tax loss of $2,755 million in discontinued operations in the first quarter of 2021. Given the economics of GECAS accrue to AerCap in conjunction with the transaction, the net impact of GECAS (loss on sale and operations) could change materially, mainly due to fluctuations in AerCap's closing share price. Completion of the transaction remains subject to AerCap shareholder approval, regulatory approvals and other customary closing conditions.
After completion of the transaction, we will elect to prospectively measure our investment in AerCap at fair value and expect to have continuing involvement with AerCap, primarily through our ownership interest and ongoing sales or leases of products and services.
Bank BPH. The mortgage portfolio in Poland (Bank BPH) comprises floating rate residential mortgages, 86% of which are indexed to or denominated in foreign currencies (primarily Swiss francs). At March 31, 2021, the total portfolio had a carrying value of $1,986 million with a 1.67% 90-day delinquency rate and an average loan to value ratio of approximately 61.6%. The portfolio is recorded at the lower of cost or fair value, less cost to sell, which reflects market yields as well as estimates with respect to ongoing litigation in Poland related to foreign currency-denominated mortgages and other factors. Earnings from discontinued operations for the three months ended March 31, 2021 included $282 million non-cash pre-tax charges, reflecting estimates with respect to ongoing litigation as well as market yields. Future changes in the estimated legal liabilities or market yields could result in further losses related to these loans in future reporting periods. See Note 21 for further information.
Baker Hughes (BKR). We have continuing involvement with BKR primarily through our remaining interest, ongoing purchases and sales of products and services, transition services that we provide to BKR, as well as an aeroderivative joint venture (JV) we formed with BKR in the fourth quarter of 2019. The JV is jointly controlled by GE and BKR and is consolidated by GE due to the significance of our investment in BKR.
For the three months ended March 31, 2021, we had sales of $166 million and purchases of $61 million with BKR for products and services outside of the JV. We collected net cash of $131 million from BKR related to sales, purchases and transition services.
In the first quarter of 2021, we had sales of $119 million to BKR for products and services from the JV, and we collected cash of $161 million. When our investment in BKR is reduced to below 20%, we will deconsolidate the JV. A deconsolidation of the JV is not expected to have a material impact on GE Industrial Cash from operating activities (CFOA).
In addition, we received $28 million of repayments on the promissory note receivable from BKR and dividends of $56 million on our investment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESULTS OF DISCONTINUED OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
2020
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GE Capital revenues from services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
633
|
|
$
|
1,010
|
|
|
|
|
Cost of goods and services sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(368)
|
|
(547)
|
|
|
|
|
Other income, costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(386)
|
|
(462)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) of discontinued operations before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(121)
|
|
2
|
|
|
|
|
Benefit (provision) for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(29)
|
|
(19)
|
|
|
|
|
Earnings (loss) of discontinued operations, net of taxes(a)(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(149)
|
|
$
|
(17)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on disposal before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,702)
|
|
(4)
|
|
|
|
|
Benefit (provision) for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(43)
|
|
—
|
|
|
|
|
Gain (loss) on disposal, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(2,745)
|
|
$
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from discontinued operations, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(2,894)
|
|
$
|
(21)
|
|
|
|
|
(a) Earnings (loss) of discontinued operations attributable to the Company after income taxes was $(149) million and $(15) million for the three months ended March 31, 2021 and 2020, respectively.
(b) Included $177 million and $155 million from GECAS operations, including $(359) million and $(545) million of depreciation and amortization, for the three months ended March 31, 2021 and 2020, respectively. Depreciation and amortization ceased on March 10, 2021.
|
|
|
|
|
|
|
|
|
ASSETS AND LIABILITIES OF DISCONTINUED OPERATIONS
|
March 31, 2021
|
December 31, 2020
|
Cash, cash equivalents and restricted cash
|
$
|
142
|
|
$
|
—
|
|
Financing receivables - net
|
2,095
|
|
—
|
|
Other GE Capital receivables
|
2,122
|
|
—
|
|
Property, plant, and equipment - net
|
28,143
|
|
—
|
|
Valuation allowance on disposal group classified as discontinued operations
|
(2,536)
|
|
—
|
|
All other current assets
|
3,957
|
|
—
|
|
Total current assets of discontinued operations
|
33,922
|
|
—
|
|
Cash, cash equivalents and restricted cash
|
483
|
|
623
|
|
Financing receivables - net
|
—
|
|
2,710
|
|
Other GE Capital receivables
|
49
|
|
1,844
|
|
Financing receivables held for sale (Polish mortgage portfolio)
|
1,986
|
|
2,461
|
|
Property, plant, and equipment - net
|
102
|
|
28,429
|
|
All other assets
|
389
|
|
4,683
|
|
Assets of discontinued operations(a)
|
$
|
36,931
|
|
$
|
40,749
|
|
|
|
|
Deferred income taxes
|
$
|
2,268
|
|
$
|
—
|
|
Accounts payable and all other liabilities
|
2,723
|
|
—
|
|
Total current liabilities of discontinued operations
|
4,991
|
|
—
|
|
Deferred income taxes
|
—
|
|
2,172
|
|
Accounts payable and all other liabilities(b)
|
204
|
|
3,010
|
|
Liabilities of discontinued operations(a)
|
$
|
5,195
|
|
$
|
5,182
|
|
(a) Included $33,922 million and $37,199 million of assets and $4,991 million and $4,997 million of liabilities for GECAS as of March 31, 2021 and December 31, 2020, respectively.
(b) Included within All other liabilities of discontinued operations at March 31, 2021 and December 31, 2020 are intercompany tax receivables in the amount of $657 million and $704 million, respectively, primarily related to previously disposed financial services businesses, which are eliminated upon consolidation.
NOTE 3. INVESTMENT SECURITIES. All of our debt securities are classified as available-for-sale and substantially all are investment-grade supporting obligations to annuitants and policyholders in our run-off insurance operations. We have adopted the fair value option for our investment in BKR (comprising 311.4 million shares with approximately 30% ownership and a promissory note receivable as of March 31, 2021), which is recorded as Equity securities with readily determinable fair values. We classify investment securities as current or non-current based on our intent regarding the usage of proceeds from those investments. Investment securities held within insurance entities are classified as non-current as they support the long-duration insurance liabilities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
|
December 31, 2020
|
|
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Estimated
fair value
|
|
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Estimated
fair value
|
Equity (Baker Hughes)
|
$
|
6,741
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,741
|
|
|
$
|
7,319
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7,319
|
|
Current investment securities
|
$
|
6,741
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,741
|
|
|
$
|
7,319
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7,319
|
|
Debt
|
|
|
|
|
|
|
|
|
|
U.S. corporate
|
$
|
24,159
|
|
$
|
4,616
|
|
$
|
(79)
|
|
$
|
28,695
|
|
|
$
|
23,604
|
|
$
|
6,651
|
|
$
|
(26)
|
|
$
|
30,230
|
|
Non-U.S. corporate
|
2,456
|
|
273
|
|
(5)
|
|
2,724
|
|
|
2,283
|
|
458
|
|
(1)
|
|
2,740
|
|
State and municipal
|
3,409
|
|
648
|
|
(19)
|
|
4,038
|
|
|
3,387
|
|
878
|
|
(9)
|
|
4,256
|
|
Mortgage and asset-backed
|
3,725
|
|
153
|
|
(63)
|
|
3,815
|
|
|
3,652
|
|
171
|
|
(71)
|
|
3,752
|
|
Government and agencies
|
1,166
|
|
112
|
|
(3)
|
|
1,275
|
|
|
1,169
|
|
184
|
|
—
|
|
1,353
|
|
Other equity
|
239
|
|
—
|
|
—
|
|
239
|
|
|
218
|
|
—
|
|
—
|
|
218
|
|
Non-current investment securities
|
$
|
35,152
|
|
$
|
5,801
|
|
$
|
(168)
|
|
$
|
40,786
|
|
|
$
|
34,313
|
|
$
|
8,342
|
|
$
|
(106)
|
|
$
|
42,549
|
|
Total
|
$
|
41,893
|
|
$
|
5,801
|
|
$
|
(168)
|
|
$
|
47,527
|
|
|
$
|
41,632
|
|
$
|
8,342
|
|
$
|
(106)
|
|
$
|
49,868
|
|
The amortized cost of debt securities as of March 31, 2021 excludes accrued interest of $438 million, which is reported in current Other GE Capital receivables.
The estimated fair value of investment securities at March 31, 2021 decreased since December 31, 2020, primarily due to higher market yields and the sale of BKR shares, partially offset by new investments in our Insurance business and the mark-to-market effect on our remaining interest in BKR.
Total estimated fair value of debt securities in an unrealized loss position were $3,732 million and $1,765 million, of which $644 million and $165 million had gross unrealized losses of $(56) million and $(20) million and had been in a loss position for 12 months or more at March 31, 2021 and December 31, 2020, respectively. Gross unrealized losses of $(168) million at March 31, 2021 included $(79) million related to U.S. corporate securities and $(57) million related to commercial mortgage-backed securities (CMBS). Primarily all of our CMBS in an unrealized loss position have received investment-grade credit ratings from the major rating agencies and are collateralized by pools of commercial mortgage loans on real estate.
Net unrealized gains (losses) for equity securities with readily determinable fair values, which are recorded in Other income within continuing operations, were $238 million and $(5,772) million for the three months ended March 31, 2021 and 2020, respectively.
Proceeds from debt and equity securities sales, early redemptions by issuers and principal payments on the BKR promissory note totaled $1,333 million and $1,250 million for the three months ended March 31, 2021 and 2020, respectively. Gross realized gains on investment securities were $30 million and $46 million and gross realized losses and impairments were $(60) million and $(17) million for the three months ended March 31, 2021 and 2020, respectively.
Contractual maturities of our debt securities (excluding mortgage and asset-backed securities) at March 31, 2021 are as follows:
|
|
|
|
|
|
|
|
|
|
Amortized
cost
|
Estimated
fair value
|
Within one year
|
$
|
613
|
|
$
|
622
|
|
After one year through five years
|
3,111
|
|
3,396
|
|
After five years through ten years
|
6,579
|
|
7,626
|
|
After ten years
|
20,886
|
|
25,088
|
|
We expect actual maturities to differ from contractual maturities because borrowers have the right to call or prepay certain obligations.
Substantially all our equity securities are classified within Level 1 and substantially all our debt securities are classified within Level 2, as their valuation is determined based on significant observable inputs. Investments with a fair value of $5,641 million and $5,866 million are classified within Level 3, as significant inputs to the valuation model are unobservable at March 31, 2021 and December 31, 2020, respectively. During the three months ended March 31, 2021 and 2020, there were no significant transfers into or out of Level 3.
In addition to the equity securities described above, we hold $291 million and $274 million of equity securities without readily determinable fair values at March 31, 2021 and December 31, 2020, respectively, that are classified within non-current All other assets in our consolidated Statement of Financial Position. Fair value adjustments, including impairments, recorded in earnings were an insignificant amount and $(93) million for the three months ended March 31, 2021 and 2020, respectively.
NOTE 4. CURRENT AND LONG-TERM RECEIVABLES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT RECEIVABLES
|
Consolidated
|
|
GE Industrial
|
|
March 31, 2021
|
December 31, 2020
|
|
March 31, 2021
|
December 31, 2020
|
Customer receivables
|
$
|
12,441
|
|
$
|
13,459
|
|
|
$
|
9,307
|
|
$
|
9,841
|
|
Sundry receivables(a)(b)
|
4,106
|
|
4,395
|
|
|
4,274
|
|
4,763
|
|
Allowance for credit losses(c)
|
(1,165)
|
|
(1,164)
|
|
|
(1,163)
|
|
(1,161)
|
|
Total current receivables
|
$
|
15,381
|
|
$
|
16,691
|
|
|
$
|
12,418
|
|
$
|
13,442
|
|
(a) Includes supplier advances, revenue sharing programs receivables in our Aviation business, other non-income based tax receivables, primarily value-added tax related to our operations in various countries outside of the U.S., receivables from disposed businesses, including receivables for transactional services agreements and certain intercompany balances that eliminate upon consolidation. Revenue sharing program receivables in Aviation are amounts due from third parties who participate in engine programs by developing and supplying certain engine components through the life of the program. The participants share in program revenues, receive a share of customer progress payments and share costs related to discounts and warranties.
(b) Consolidated current receivables included a deferred purchase price receivable, which represents our retained risk with respect to current customer receivables sold to third parties through one of the receivable facilities. The balance of the deferred purchase price held by GE Capital as of March 31, 2021 and December 31, 2020 was $461 million and $413 million, respectively.
(c) GE Industrial allowance for credit losses primarily increased due to net new provisions of $39 million offset by write-offs and foreign currency impact.
Sales of GE Industrial current customer receivables. When GE Industrial sells customer receivables to GE Capital or third parties, it accelerates the receipt of cash that would otherwise have been collected from customers. In any given period, the amount of cash received from sales of customer receivables compared to the cash GE Industrial would have otherwise collected had those customer receivables not been sold represents the cash generated or used in the period relating to this activity. GE Industrial sales of customer receivables to GE Capital or third parties are made on arms-length terms and any discount related to time value of money is recognized by GE Industrial when the customer receivables are sold. In our Statement of Cash Flows, receivables purchased and retained by GE Capital are reflected as cash from operating activities at GE Industrial, primarily as cash used for investing activities at GE Capital and are eliminated in consolidation. Collections on receivables purchased by GE Capital are reflected primarily as cash from investing activities at GE Capital and are reclassified to cash from operating activities in consolidation. As of March 31, 2021 and 2020, GE Industrial sold approximately 38% and 49%, respectively, of its gross customer receivables to GE Capital or third parties. Effective April 1, 2021, the Company discontinued the majority of its factoring programs. Activity related to customer receivables sold by GE Industrial is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
GE Capital
|
|
Third Parties
|
|
GE Capital
|
|
Third Parties
|
Balance at January 1
|
$
|
3,618
|
|
|
$
|
2,992
|
|
|
$
|
3,087
|
|
|
$
|
6,757
|
|
GE Industrial sales to GE Capital
|
7,044
|
|
|
—
|
|
|
9,225
|
|
|
—
|
|
GE Industrial sales to third parties
|
—
|
|
|
124
|
|
|
—
|
|
|
307
|
|
GE Capital sales to third parties
|
(3,826)
|
|
|
3,826
|
|
|
(5,253)
|
|
|
5,253
|
|
Collections and other
|
(3,765)
|
|
|
(4,360)
|
|
|
(3,224)
|
|
|
(7,797)
|
|
Reclassification from long-term customer receivables
|
63
|
|
|
—
|
|
|
123
|
|
|
—
|
|
Balance at March 31
|
$
|
3,134
|
|
(a)
|
$
|
2,582
|
|
(b)
|
$
|
3,958
|
|
(a)
|
$
|
4,519
|
|
(a) At March 31, 2021 and 2020, $526 million and $557 million, respectively, of the current receivables purchased and retained by GE Capital had been sold by GE Industrial to GE Capital with recourse (i.e., GE Industrial retains all or some risk of default). The effect on GE Industrial CFOA of claims by GE Capital on receivables sold with recourse was insignificant for the three months ended March 31, 2021 and 2020.
(b) Included $1,863 million in our active unconsolidated receivables facility at March 31, 2021, under which we currently expect to continue sales of GE Industrial receivables in the future.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM RECEIVABLES
|
Consolidated
|
|
GE Industrial
|
|
March 31, 2021
|
December 31, 2020
|
|
March 31, 2021
|
December 31, 2020
|
Long-term customer receivables(a)
|
$
|
638
|
|
$
|
585
|
|
|
$
|
601
|
|
$
|
474
|
|
Long-term sundry receivables(b)
|
1,656
|
|
1,748
|
|
|
1,928
|
|
2,097
|
|
Allowance for credit losses
|
(136)
|
|
(142)
|
|
|
(136)
|
|
(142)
|
|
Total long-term receivables
|
$
|
2,158
|
|
$
|
2,191
|
|
|
$
|
2,392
|
|
$
|
2,430
|
|
(a) As of March 31, 2021 and December 31, 2020, GE Capital held $37 million and $111 million, respectively, of GE Industrial long-term customer receivables, substantially all of which are with recourse (i.e. GE Industrial retains all or some risk of default).
(b) Includes supplier advances, revenue sharing programs receivables, other non-income based tax receivables and certain intercompany balances that eliminate upon consolidation.
UNCONSOLIDATED RECEIVABLES FACILITIES. GE Capital has one active revolving receivables facility, under which customer receivables purchased from GE Industrial are sold to third parties. In this facility, which has a program size of $2,000 million as of March 31, 2021, upon the sale of receivables, we receive proceeds of cash and deferred purchase price and the Company’s remaining risk with respect to the sold receivables is limited to the balance of the deferred purchase price.
Activity related to our unconsolidated receivables facilities is included in the GE Capital sales to third parties line in the sales of GE Industrial current customer receivables table above and is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
2021
|
|
2020
|
Customer receivables sold to receivables facilities
|
$
|
2,605
|
|
|
$
|
4,307
|
|
Total cash purchase price for customer receivables
|
2,479
|
|
|
4,120
|
|
Cash collections re-invested to purchase customer receivables
|
2,274
|
|
|
3,723
|
|
|
|
|
|
Non-cash increases to deferred purchase price
|
$
|
116
|
|
|
$
|
160
|
|
Cash payments received on deferred purchase price
|
68
|
|
|
78
|
|
CONSOLIDATED SECURITIZATION ENTITIES. GE Capital consolidates three variable interest entities (VIEs) that purchased customer receivables and long-term customer receivables from GE Industrial. At March 31, 2021 and December 31, 2020, these VIEs held current customer receivables of $1,133 million and $1,489 million and long-term customer receivables of $29 million and $93 million, respectively. At March 31, 2021 and December 31, 2020, the outstanding non-recourse debt under their respective debt facilities was $624 million and $892 million, respectively.
NOTE 5. FINANCING RECEIVABLES AND ALLOWANCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
GE Capital
|
|
March 31, 2021
|
December 31, 2020
|
|
March 31, 2021
|
December 31, 2020
|
Loans, net of deferred income
|
$
|
337
|
|
$
|
359
|
|
|
$
|
3,749
|
|
$
|
4,182
|
|
Allowance for losses
|
(31)
|
|
(32)
|
|
|
(11)
|
|
(10)
|
|
Current financing receivables - net
|
$
|
306
|
|
$
|
326
|
|
|
$
|
3,738
|
|
$
|
4,172
|
|
We manage our GE Capital financing receivables portfolio using delinquency data as key performance indicators. At March 31, 2021 and December 31, 2020, financing receivables over 30 days past due were 3.7% and 2.8% and 90 days past due were 1.6% and 1.7%, respectively.
GE Capital financing receivables that comprise receivables purchased from GE Industrial are reclassified to either Current receivables or All other assets in our consolidated Statement of Financial Position. To the extent these receivables are purchased with full or limited recourse, they are excluded from the delinquency above. See Note 4 for further information.
NOTE 6. INVENTORIES, INCLUDING DEFERRED INVENTORY COSTS
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
December 31, 2020
|
Raw materials and work in process
|
$
|
8,013
|
|
$
|
7,937
|
|
Finished goods
|
6,057
|
|
5,654
|
|
Deferred inventory costs(a)
|
2,460
|
|
2,299
|
|
Inventories, including deferred inventory costs
|
$
|
16,530
|
|
$
|
15,890
|
|
(a) Represents cost deferral for shipped goods (such as components for wind turbine assemblies 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.
NOTE 7. PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
December 31, 2020
|
Original cost
|
$
|
31,893
|
|
$
|
32,098
|
|
Less accumulated depreciation and amortization
|
(18,405)
|
|
(18,251)
|
|
Right-of-use operating lease assets
|
2,808
|
|
2,852
|
|
Property, plant and equipment – net
|
$
|
16,296
|
|
$
|
16,699
|
|
Consolidated depreciation and amortization on property, plant and equipment was $452 million and $461 million for the three months ended March 31, 2021 and 2020, respectively.
Operating Lease Liabilities. Our consolidated operating lease liabilities, included in All other liabilities in our Statement of Financial Position, were $3,143 million and $3,195 million, as of March 31, 2021 and December 31, 2020, respectively, which included GE Industrial operating lease liabilities of $3,083 million and $3,133 million, respectively. Expense on our operating lease portfolio, primarily from our long-term fixed leases, was $281 million and $294 million for the three months ended March 31, 2021 and 2020, respectively.
NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GOODWILL
|
January 1, 2021
|
|
|
Currency exchange
and other
|
Balance at
March 31, 2021
|
Power
|
$
|
146
|
|
|
|
$
|
—
|
|
$
|
145
|
|
Renewable Energy
|
3,401
|
|
|
|
(88)
|
|
3,313
|
|
Aviation
|
9,247
|
|
|
|
(103)
|
|
9,144
|
|
Healthcare
|
11,855
|
|
|
|
(15)
|
|
11,840
|
|
|
|
|
|
|
|
Corporate
|
876
|
|
|
|
1
|
|
877
|
|
Total
|
$
|
25,524
|
|
|
|
$
|
(204)
|
|
$
|
25,320
|
|
In assessing the possibility that a reporting unit’s fair value has been reduced below its carrying amount due to the occurrence of events or circumstances between annual impairment testing dates, we consider all available evidence, including (i) the results of our impairment testing from the most recent testing date, (ii) downward revisions to internal forecasts or decreases in market multiples, if any, and (iii) declines in market capitalization. In the first quarter of 2021, we did not identify any reporting units that required an interim impairment test. However, we continue to monitor the operating results and cash flow forecasts of our Additive reporting unit in our Aviation segment as the fair value of this reporting unit was not significantly in excess of its carrying value. At March 31, 2021, our Additive reporting unit had goodwill of $236 million.
All other intangible assets of $9,395 million and $9,671 million at March 31, 2021 and December 31, 2020, respectively, are subject to amortization. Intangible assets decreased in the first quarter of 2021, primarily as a result of amortization. Consolidated amortization expense was $301 million and $318 million in the three months ended March 31, 2021 and 2020, respectively.
NOTE 9. REVENUES. The equipment and services revenues classification in the table below is consistent with our segment MD&A presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUIPMENT & SERVICES REVENUES
|
|
Three months ended March 31
|
2021
|
|
2020
|
|
Equipment
|
Services
|
Total
|
|
Equipment
|
Services
|
Total
|
Power
|
$
|
1,241
|
|
$
|
2,679
|
|
$
|
3,921
|
|
|
$
|
1,506
|
|
$
|
2,518
|
|
$
|
4,025
|
|
Renewable Energy
|
2,844
|
|
404
|
|
3,248
|
|
|
2,576
|
|
618
|
|
3,194
|
|
Aviation
|
1,847
|
|
3,145
|
|
4,992
|
|
|
2,364
|
|
4,529
|
|
6,892
|
|
Healthcare
|
2,227
|
|
2,081
|
|
4,308
|
|
|
2,699
|
|
2,029
|
|
4,727
|
|
Corporate items and industrial eliminations
|
(188)
|
|
49
|
|
(139)
|
|
|
(48)
|
|
54
|
|
6
|
|
Total GE Industrial revenues
|
$
|
7,971
|
|
$
|
8,358
|
|
$
|
16,329
|
|
|
$
|
9,097
|
|
$
|
9,748
|
|
$
|
18,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
Three months ended March 31
|
|
|
|
2021
|
|
2020
|
|
|
|
|
Gas Power
|
$
|
2,829
|
|
|
$
|
2,859
|
|
|
|
|
|
Power Portfolio
|
1,091
|
|
|
1,165
|
|
|
|
|
|
Power
|
$
|
3,921
|
|
|
$
|
4,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Onshore Wind
|
$
|
2,118
|
|
|
$
|
2,124
|
|
|
|
|
|
Grid Solutions equipment and services
|
795
|
|
|
839
|
|
|
|
|
|
Hydro
|
165
|
|
|
179
|
|
|
|
|
|
Offshore Wind and Hybrid Solutions
|
169
|
|
|
51
|
|
|
|
|
|
Renewable Energy
|
$
|
3,248
|
|
|
$
|
3,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Engines & Services
|
$
|
3,354
|
|
|
$
|
5,113
|
|
|
|
|
|
Military
|
956
|
|
|
960
|
|
|
|
|
|
Systems & Other
|
682
|
|
|
820
|
|
|
|
|
|
Aviation
|
$
|
4,992
|
|
|
$
|
6,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare Systems
|
$
|
3,825
|
|
|
$
|
3,448
|
|
|
|
|
|
Pharmaceutical Diagnostics
|
482
|
|
|
450
|
|
|
|
|
|
BioPharma
|
—
|
|
|
830
|
|
|
|
|
|
Healthcare
|
$
|
4,308
|
|
|
$
|
4,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate items and industrial eliminations
|
(139)
|
|
|
6
|
|
|
|
|
|
Total GE Industrial revenues
|
$
|
16,329
|
|
|
$
|
18,844
|
|
|
|
|
|
Capital
|
878
|
|
|
837
|
|
|
|
|
|
GE Capital-GE Industrial eliminations
|
$
|
(89)
|
|
|
$
|
(191)
|
|
|
|
|
|
Consolidated revenues
|
$
|
17,118
|
|
|
$
|
19,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REMAINING PERFORMANCE OBLIGATION. As of March 31, 2021, the aggregate amount of the contracted revenues allocated to our unsatisfied (or partially unsatisfied) performance obligations was $226,962 million. We expect to recognize revenue as we satisfy our remaining performance obligations as follows: (1) equipment-related remaining performance obligation of $40,951 million, of which 62%, 82% and 97% is expected to be satisfied within 1, 2 and 5 years, respectively; and (2) services-related remaining performance obligation of $186,012 million, of which 15%, 47%, 67% and 83% is expected to be recognized within 1, 5, 10 and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations.
NOTE 10. CONTRACT AND OTHER DEFERRED ASSETS & PROGRESS COLLECTIONS AND DEFERRED INCOME
Contract and other deferred assets increased $153 million in the three months ended March 31, 2021 primarily due to the timing of revenue recognition ahead of billing milestones on our long-term equipment contracts. Our long-term service agreements decreased primarily due to billings of $2,232 million, offset by revenues recognized of $2,118 million, a net favorable change in estimated profitability of $31 million at Aviation and a net unfavorable change in estimated profitability of $8 million at Power.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
Power
|
Aviation
|
Renewable Energy
|
Healthcare
|
Other
|
Total
|
Revenues in excess of billings
|
$
|
5,223
|
|
$
|
2,911
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8,134
|
|
Billings in excess of revenues
|
(1,541)
|
|
(5,347)
|
|
—
|
|
—
|
|
—
|
|
(6,888)
|
|
Long-term service agreements
|
$
|
3,682
|
|
$
|
(2,436)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,246
|
|
Short-term and other service agreements
|
139
|
|
342
|
|
109
|
|
164
|
|
16
|
|
769
|
|
Equipment contract revenues
|
2,024
|
|
36
|
|
1,239
|
|
289
|
|
217
|
|
3,805
|
|
Current contract assets
|
$
|
5,845
|
|
$
|
(2,058)
|
|
$
|
1,348
|
|
$
|
454
|
|
$
|
232
|
|
$
|
5,821
|
|
|
|
|
|
|
|
|
Nonrecurring engineering costs
|
13
|
|
2,436
|
|
33
|
|
29
|
|
—
|
|
2,511
|
|
Customer advances and other
|
783
|
|
2,570
|
|
—
|
|
122
|
|
—
|
|
3,474
|
|
Non-current contract and other deferred assets
|
$
|
796
|
|
$
|
5,005
|
|
$
|
33
|
|
$
|
151
|
|
$
|
—
|
|
$
|
5,985
|
|
Total contract and other deferred assets
|
$
|
6,641
|
|
$
|
2,948
|
|
$
|
1,381
|
|
$
|
604
|
|
$
|
233
|
|
$
|
11,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
|
|
|
|
Revenues in excess of billings
|
$
|
5,282
|
|
$
|
3,072
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
8,354
|
|
Billings in excess of revenues
|
(1,640)
|
|
(5,375)
|
|
—
|
|
—
|
|
—
|
|
(7,015)
|
|
Long-term service agreements
|
$
|
3,642
|
|
$
|
(2,304)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,338
|
|
Short-term and other service agreements
|
129
|
|
282
|
|
106
|
|
173
|
|
29
|
|
719
|
|
Equipment contract revenues
|
2,015
|
|
59
|
|
1,127
|
|
306
|
|
201
|
|
3,707
|
|
Current contract assets
|
$
|
5,786
|
|
$
|
(1,963)
|
|
$
|
1,233
|
|
$
|
479
|
|
$
|
229
|
|
$
|
5,764
|
|
|
|
|
|
|
|
|
Nonrecurring engineering costs
|
16
|
|
2,409
|
|
34
|
|
31
|
|
—
|
|
2,490
|
|
Customer advances and other
|
822
|
|
2,481
|
|
—
|
|
128
|
|
(32)
|
|
3,398
|
|
Non-current contract and other deferred assets
|
$
|
838
|
|
$
|
4,889
|
|
$
|
34
|
|
$
|
159
|
|
$
|
(32)
|
|
$
|
5,888
|
|
Total contract and other deferred assets
|
$
|
6,623
|
|
$
|
2,927
|
|
$
|
1,268
|
|
$
|
638
|
|
$
|
197
|
|
$
|
11,653
|
|
Progress collections and deferred income decreased $431 million primarily due to the timing of revenue recognition in excess of new collections received, primarily at Aviation and Power. Revenues recognized for contracts included in a liability position at the beginning of the year were $5,909 million and $4,137 million for the three months ended March 31, 2021 and 2020, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
Power
|
Aviation
|
Renewable Energy
|
Healthcare
|
Other
|
Total
|
Progress collections on equipment contracts
|
$
|
4,829
|
|
$
|
197
|
|
$
|
1,388
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,414
|
|
Other progress collections
|
371
|
|
4,483
|
|
4,343
|
|
416
|
|
121
|
|
9,735
|
|
|
|
|
|
|
|
|
Current deferred income
|
16
|
|
122
|
|
219
|
|
1,392
|
|
95
|
|
1,844
|
|
Progress collections and deferred income
|
$
|
5,217
|
|
$
|
4,802
|
|
$
|
5,949
|
|
$
|
1,808
|
|
$
|
217
|
|
$
|
17,993
|
|
Non-current deferred income
|
118
|
|
855
|
|
211
|
|
555
|
|
9
|
|
1,748
|
|
Total Progress collections and deferred income
|
$
|
5,335
|
|
$
|
5,657
|
|
$
|
6,160
|
|
$
|
2,363
|
|
$
|
226
|
|
$
|
19,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
|
|
|
|
Progress collections on equipment contracts
|
$
|
4,918
|
|
$
|
214
|
|
$
|
1,229
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,362
|
|
Other progress collections
|
458
|
|
4,623
|
|
4,604
|
|
414
|
|
152
|
|
10,252
|
|
|
|
|
|
|
|
|
Current deferred income
|
17
|
|
132
|
|
194
|
|
1,309
|
|
105
|
|
1,757
|
|
Progress collections and deferred income
|
$
|
5,393
|
|
$
|
4,969
|
|
$
|
6,028
|
|
$
|
1,724
|
|
$
|
257
|
|
$
|
18,371
|
|
Non-current deferred income
|
116
|
|
898
|
|
214
|
|
564
|
|
10
|
|
1,801
|
|
Total Progress collections and deferred income
|
$
|
5,509
|
|
$
|
5,867
|
|
$
|
6,241
|
|
$
|
2,288
|
|
$
|
267
|
|
$
|
20,172
|
|
NOTE 11. ALL OTHER ASSETS. All other current assets and All other assets primarily includes equity method and other investments, long-term customer and sundry receivables (see Note 4), cash and cash equivalents in our run-off insurance operations and prepaid taxes and other deferred charges. Consolidated All other non-current assets increased $1,270 million in the three months ended March 31, 2021, primarily due to an increase in Insurance cash and cash equivalents of $1,252 million.
NOTE 12. BORROWINGS
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
December 31, 2020
|
|
|
|
Current portion of long-term borrowings
|
$
|
47
|
|
$
|
36
|
|
Current portion of long-term borrowings assumed by GE Industrial
|
1,784
|
|
2,432
|
|
Other
|
488
|
|
882
|
|
Total GE Industrial short-term borrowings
|
$
|
2,318
|
|
$
|
3,350
|
|
|
|
|
Current portion of long-term borrowings
|
$
|
1,743
|
|
$
|
788
|
|
Intercompany payable to GE Industrial
|
1,784
|
|
2,432
|
|
Non-recourse borrowings of consolidated securitization entities
|
624
|
|
892
|
|
Other
|
59
|
|
283
|
|
Total GE Capital short-term borrowings
|
$
|
4,210
|
|
$
|
4,395
|
|
|
|
|
Eliminations
|
(2,061)
|
|
(3,033)
|
|
Total short-term borrowings
|
$
|
4,468
|
|
$
|
4,713
|
|
|
|
|
Senior notes
|
$
|
18,753
|
|
$
|
18,994
|
|
Senior notes assumed by GE Industrial
|
17,981
|
|
18,178
|
|
Subordinated notes assumed by GE Industrial
|
1,774
|
|
1,779
|
|
Other
|
422
|
|
435
|
|
Total GE Industrial long-term borrowings
|
$
|
38,929
|
|
$
|
39,386
|
|
|
|
|
Senior notes
|
$
|
27,292
|
|
$
|
30,132
|
|
Subordinated notes
|
148
|
|
189
|
|
Intercompany payable to GE Industrial
|
16,577
|
|
16,780
|
|
Non-recourse borrowings of consolidated securitization entities
|
—
|
|
—
|
|
Other
|
521
|
|
483
|
|
Total GE Capital long-term borrowings
|
$
|
44,539
|
|
$
|
47,584
|
|
|
|
|
Eliminations
|
(16,577)
|
|
(16,780)
|
|
Total long-term borrowings
|
$
|
66,890
|
|
$
|
70,189
|
|
Total borrowings
|
$
|
71,358
|
|
$
|
74,902
|
|
At March 31, 2021, the outstanding GE Capital borrowings that had been assumed by GE Industrial as part of the GE Capital Exit Plan was $21,538 million ($1,784 million short-term and $19,754 million long-term), for which GE Industrial has an offsetting Receivable from GE Capital of $18,361 million. The difference of $3,177 million in long-term borrowings represents the amount of borrowings GE Capital had funded with available cash to GE Industrial via intercompany loans in lieu of GE Industrial issuing borrowings externally.
At March 31, 2021, total GE Industrial borrowings of $22,886 million comprised GE Industrial-issued borrowings of $19,709 million and intercompany loans from GE Capital to GE Industrial of $3,177 million as described above.
GE Industrial has provided a full and unconditional guarantee on the payment of the principal and interest on all tradable senior and subordinated outstanding long-term debt securities issued by GE Capital. This guarantee applied to $27,332 million and $28,503 million of GE Capital debt at March 31, 2021 and December 31, 2020, respectively.
See Note 19 for further information about borrowings and associated interest rate swaps.
NOTE 13. INSURANCE LIABILITIES AND ANNUITY BENEFITS. Insurance liabilities and annuity benefits comprise substantially all obligations to annuitants and insureds in our run-off insurance operations. Our insurance operations generated revenues of $775 million and $616 million and profit (loss) of $116 million and $(93) million for the three months ended March 31, 2021 and 2020, respectively. These operations were supported by assets of $50,353 million and $50,824 million at March 31, 2021 and December 31, 2020, respectively. A summary of our insurance contracts is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021
|
Long-term care
|
Structured settlement annuities & life
|
Other contracts
|
Other adjustments(a)
|
Total
|
Future policy benefit reserves
|
$
|
16,997
|
|
$
|
9,105
|
|
$
|
183
|
|
$
|
5,580
|
|
$
|
31,864
|
|
Claim reserves
|
4,397
|
|
306
|
|
1,062
|
|
—
|
|
5,765
|
|
Investment contracts
|
—
|
|
1,018
|
|
1,003
|
|
—
|
|
2,021
|
|
Unearned premiums and other
|
16
|
|
191
|
|
147
|
|
—
|
|
353
|
|
|
21,409
|
|
10,620
|
|
2,395
|
|
5,580
|
|
40,004
|
|
Eliminations
|
—
|
|
—
|
|
(442)
|
|
—
|
|
(442)
|
|
Total
|
$
|
21,409
|
|
$
|
10,620
|
|
$
|
1,953
|
|
$
|
5,580
|
|
$
|
39,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
Long-term care
|
Structured settlement annuities & life
|
Other contracts
|
Other adjustments(a)
|
Total
|
Future policy benefit reserves
|
$
|
16,934
|
|
$
|
9,207
|
|
$
|
181
|
|
$
|
8,160
|
|
$
|
34,482
|
|
Claim reserves
|
4,393
|
|
275
|
|
1,068
|
|
—
|
|
5,736
|
|
Investment contracts
|
—
|
|
1,034
|
|
1,016
|
|
—
|
|
2,049
|
|
Unearned premiums and other
|
19
|
|
189
|
|
89
|
|
—
|
|
298
|
|
|
21,346
|
|
10,705
|
|
2,354
|
|
8,160
|
|
42,565
|
|
Eliminations
|
—
|
|
—
|
|
(374)
|
|
—
|
|
(374)
|
|
Total
|
$
|
21,346
|
|
$
|
10,705
|
|
$
|
1,980
|
|
$
|
8,160
|
|
$
|
42,191
|
|
(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 Accumulated other comprehensive income (loss) (AOCI) in our consolidated Statement of Earnings (Loss). The decrease in Other adjustments of $2,580 million is a result of the decline in unrealized gains on investment securities.
Claim reserves included incurred claims of $454 million and $507 million, of which insignificant amounts related to the recognition of adjustments to prior year claim reserves arising from our periodic reserve evaluation for the three months ended March 31, 2021 and 2020, respectively. Paid claims were $424 million and $405 million in the three months ended March 31, 2021 and 2020, respectively.
Reinsurance recoverables, net of allowances of $1,540 million and $1,510 million, are included in non-current Other GE Capital receivables in our consolidated Statement of Financial Position, and amounted to $2,592 million and $2,552 million at March 31, 2021 and December 31, 2020, respectively. The vast majority of our remaining net reinsurance recoverables are secured by assets held in a trust for which we are the beneficiary.
NOTE 14. POSTRETIREMENT BENEFIT PLANS. We sponsor a number of pension and retiree health and life insurance benefit plans that we present in three categories, principal pension plans, other pension plans and principal retiree benefit plans. Please refer to Note 13 to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2020 for a discussion of our postretirement benefit plans.
The components of benefit plans cost other than the service cost are included in the caption Non-operating benefit costs in our consolidated Statement of Earnings (Loss).
|
|
|
|
|
|
|
|
|
|
|
|
PRINCIPAL PENSION PLANS
|
Three months ended March 31
|
|
|
|
2021
|
2020
|
|
|
|
Service cost for benefits earned
|
$
|
64
|
|
$
|
153
|
|
|
|
|
Prior service cost amortization
|
7
|
|
37
|
|
|
|
|
Expected return on plan assets
|
(763)
|
|
(748)
|
|
|
|
|
Interest cost on benefit obligations
|
486
|
|
587
|
|
|
|
|
Net actuarial loss amortization
|
864
|
|
848
|
|
|
|
|
|
|
|
|
|
|
Benefit plans cost
|
$
|
658
|
|
$
|
877
|
|
|
|
|
Principal retiree benefit plans income was $40 million and $32 million for the three months ended March 31, 2021 and 2020, respectively. Other pension plans was $24 million income and $7 million cost for the three months ended March 31, 2021 and 2020, respectively.
We also have a defined contribution plan for eligible U.S. employees that provides employer contributions. Defined contribution plan costs were $108 million and $95 million for the three months ended March 31, 2021 and 2020, respectively.
NOTE 15. CURRENT AND ALL OTHER LIABILITIES. All other current liabilities and All other liabilities primarily includes liabilities for customer sales allowances, equipment project and commercial liabilities, employee compensation and benefits, income taxes payable and uncertain tax positions, operating lease liabilities (see Note 7), environmental, health and safety remediations and product warranties (see Note 21). GE Industrial All other liabilities decreased $486 million in the three months ended March 31, 2021, primarily due to a decrease in Alstom legacy legal matters of $199 million (see Note 21) and a decrease in interest accruals on assumed debt of $132 million.
NOTE 16. INCOME TAXES. Our consolidated effective income tax rate was 59.7% and 0.9% during the three months ended March 31, 2021 and 2020, respectively. The rate for 2021 is higher than the U.S. statutory rate primarily due to the cost of global activities, including the base erosion and global intangible minimum tax provisions and from tax expense associated with the unrealized gain in our remaining interest in Baker Hughes. This was partially offset by an adjustment to decrease the 2021 three-month tax rate to be in line with the lower expected full-year rate and by U.S. business credits. The rate for 2020 is lower than the U.S. statutory rate primarily due to the lower tax rate on the sale of our BioPharma business. The tax rate on the BioPharma sale was low because the gain outside the U.S. was taxed at lower than 21% and because we recorded $633 million of the tax associated with preparatory steps for the transaction in the fourth quarter of 2019.
The Internal Revenue Service (IRS) is currently auditing our consolidated U.S. income tax returns for 2016-2018. The United Kingdom tax authority (the UK Government) disallowed interest deductions claimed by GE Capital for the years 2004-2015 that could result in a potential impact of approximately $1.1 billion, which includes a possible assessment of tax and reduction of deferred tax assets, not including interest and penalties. We are contesting the disallowance. The UK Government is seeking to set aside a 2005 tax settlement agreement, alleging that GE misstated or omitted relevant facts. In October 2019, the UK Government asserted three new claims of fraudulent misrepresentation, one of which the Business and Property Court allowed in a July 2020 decision to go forward. In April 2021, the UK Court of Appeal reversed, holding that the equitable portion of that claim was time barred. The UK Government has petitioned the UK Supreme Court to hear an appeal, and the case remains scheduled for trial this fall in the Business and Property Court and may (depending on the outcome of the trial) be subject to further proceedings in the UK tax tribunal. We comply with all applicable tax laws and judicial doctrines of the United Kingdom and believe that the entire benefit is more likely than not to be sustained on its technical merits.
NOTE 17. SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
Three months ended March 31
|
|
|
|
2021
|
2020
|
|
|
|
Beginning balance
|
$
|
60
|
|
$
|
61
|
|
|
|
|
AOCI before reclasses – net of taxes of $(7) and $0(a)
|
(29)
|
|
6
|
|
|
|
|
Reclasses from AOCI – net of taxes of $4 and $(12)
|
11
|
|
(47)
|
|
|
|
|
AOCI
|
(18)
|
|
(41)
|
|
|
|
|
Less AOCI attributable to noncontrolling interests
|
—
|
|
—
|
|
|
|
|
Investment securities AOCI ending balance
|
$
|
42
|
|
$
|
20
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
(4,386)
|
|
$
|
(4,818)
|
|
|
|
|
AOCI before reclasses – net of taxes of $(57) and $(5)
|
110
|
|
(554)
|
|
|
|
|
Reclasses from AOCI – net of taxes of $0 and $0(b)
|
—
|
|
690
|
|
|
|
|
AOCI
|
110
|
|
135
|
|
|
|
|
Less AOCI attributable to noncontrolling interests
|
2
|
|
2
|
|
|
|
|
Currency translation adjustments AOCI ending balance
|
$
|
(4,278)
|
|
$
|
(4,685)
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
(28)
|
|
$
|
49
|
|
|
|
|
AOCI before reclasses – net of taxes of $4 and $(45)
|
39
|
|
(262)
|
|
|
|
|
Reclasses from AOCI – net of taxes of $10 and $8(b)
|
23
|
|
51
|
|
|
|
|
AOCI
|
62
|
|
(211)
|
|
|
|
|
Less AOCI attributable to noncontrolling interests
|
—
|
|
—
|
|
|
|
|
Cash flow hedges AOCI ending balance
|
$
|
34
|
|
$
|
(163)
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
$
|
(5,395)
|
|
$
|
(7,024)
|
|
|
|
|
AOCI before reclasses – net of taxes of $(47) and $30
|
16
|
|
219
|
|
|
|
|
Reclasses from AOCI – net of taxes of $194 and $239(b)
|
689
|
|
817
|
|
|
|
|
AOCI
|
705
|
|
1,035
|
|
|
|
|
Less AOCI attributable to noncontrolling interests
|
1
|
|
3
|
|
|
|
|
Benefit plans AOCI ending balance
|
$
|
(4,691)
|
|
$
|
(5,991)
|
|
|
|
|
|
|
|
|
|
|
AOCI at March 31
|
$
|
(8,893)
|
|
$
|
(10,819)
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
$
|
0.01
|
|
$
|
0.01
|
|
|
|
|
(a) Included adjustments of $2,038 million and $1,267 million for the three months ended March 31, 2021 and 2020, respectively, related to 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 security gains been realized. See Note 13 for further information.
(b) The total reclassification from AOCI included $836 million, including currency translation of $688 million, net of taxes, for the three months ended March 31, 2020, related to the sale of our BioPharma business within our Healthcare segment.
On January 21, 2021, GE Capital Series D preferred stock issued to GE Industrial was converted to GE Capital common stock and GE Capital and GE Industrial also agreed to retire the Series A, B and C GE Capital preferred stock. As a result of these actions, there is no remaining preferred stock between GE Industrial and GE Capital, and accordingly GE Capital will no longer pay preferred dividends to GE Industrial and all preferred stock dividend costs have become a GE Industrial obligation effective January 21, 2021. The exchange of GE Capital Series D preferred stock has no impact on the GE Series D preferred stock, which, effective January 21, 2021 became callable for $5,694 million on dividend payment dates and which dividends converted from 5% fixed rate to 3-month LIBOR plus 3.33%, payable quarterly. Similarly, there were no changes to the GE Series A, B or C preferred stock, which become callable at various dates in 2022 and 2023. The total carrying value of GE preferred stock at March 31, 2021 was $5,930 million and will increase to $5,940 million by the respective call dates through periodic accretion. See our Annual Report on Form 10-K for the year ended December 31, 2020 for further information.
Redeemable noncontrolling interests, presented within All other liabilities in our consolidated Statement of Financial Position, include common shares issued by our affiliates that are redeemable at the option of the holder of those interests and amounted to $451 million and $487 million as of March 31, 2021 and December 31, 2020, respectively.
NOTE 18. EARNINGS PER SHARE INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31
|
2021
|
|
2020
|
(Earnings for per-share calculation, shares in millions, per-share amounts in dollars)
|
Diluted
|
Basic
|
|
Diluted
|
Basic
|
Earnings from continuing operations
|
$
|
90
|
|
$
|
92
|
|
|
$
|
6,202
|
|
$
|
6,202
|
|
Preferred stock dividends
|
(72)
|
|
(72)
|
|
|
(43)
|
|
(43)
|
|
Accretion of redeemable noncontrolling interests, net of tax(a)
|
2
|
|
2
|
|
|
—
|
|
—
|
|
Earnings from continuing operations attributable to common shareholders
|
20
|
|
22
|
|
|
6,158
|
|
6,158
|
|
Earnings (loss) from discontinued operations
|
(2,897)
|
|
(2,894)
|
|
|
(19)
|
|
(19)
|
|
Net earnings (loss) attributable to GE common shareholders
|
(2,874)
|
|
(2,872)
|
|
|
6,140
|
|
6,140
|
|
|
|
|
|
|
|
Shares of GE common stock outstanding
|
8,772
|
|
8,772
|
|
|
8,742
|
|
8,742
|
|
Employee compensation-related shares (including stock options)
|
35
|
|
—
|
|
|
7
|
|
—
|
|
Total average equivalent shares
|
8,807
|
|
8,772
|
|
|
8,749
|
|
8,742
|
|
|
|
|
|
|
|
Earnings per share from continuing operations
|
$
|
—
|
|
$
|
—
|
|
|
$
|
0.70
|
|
$
|
0.70
|
|
Earnings (loss) per share from discontinued operations
|
(0.33)
|
|
(0.33)
|
|
|
0.00
|
|
0.00
|
|
Net earnings (loss) per share
|
(0.33)
|
|
(0.33)
|
|
|
0.70
|
|
0.70
|
|
|
|
|
|
|
|
Potentially dilutive securities(b)
|
370
|
|
|
|
422
|
|
|
(a) Represents accretion adjustment of redeemable noncontrolling interests in our Additive business within our Aviation segment.
(b) Outstanding stock awards not included in the computation of diluted earnings per share because their effect was antidilutive.
Our unvested restricted stock unit awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and, therefore, are included in the computation of earnings per share pursuant to the two-class method. For the three months ended March 31, 2021, as a result of excess dividends in respect to the current period earnings, losses were not allocated to the participating securities. For the three months ended March 31, 2020, application of this treatment had an insignificant effect.