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As Of Filer Filing For·On·As Docs:Size 7/31/19 General Electric Co 8-K:2,9 7/31/19 13:2.1M |
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Exhibit |
• | Total orders of $28.7 billion, down 4%; organic orders up 4%; total revenues (GAAP) of $28.8 billion, down 1%; Industrial segment organic revenues (non-GAAP) of $27.7 billion, up 7% |
• | GE
Industrial profit margin (GAAP) of (1.3)%; adjusted GE Industrial profit margin (non-GAAP) of 7.6% |
• | Continuing EPS (GAAP) of $(0.03); adjusted EPS (non-GAAP) of $0.17, including $0.06 benefit from tax audit resolution |
• | Non-cash goodwill impairment charge of $744 million pre-tax related to Grid Solutions equipment and services, resulting in $(0.09) impact to continuing EPS (GAAP) |
• | GE
CFOA (GAAP) of $42 million; adjusted GE Industrial free cash flows (non-GAAP) of $(1.0) billion |
• | Increasing 2019 outlook for Industrial segment organic revenues growth to the mid-single-digit range, adjusted EPS to $0.55 - $0.65, and GE Industrial free cash flows to $(1) - $1 billion |
Three
months ended June 30 | Six months ended June 30 | |||||||||||
(Dollars in millions; per-share amounts in dollars and diluted) | 2019 | 2018 | Year on Year | 2019 | 2018 | Year
on Year | ||||||
GAAP Metrics | ||||||||||||
GE Cash From Operating Activities (GE CFOA) | $42 | $268 | (84 | )% | $(842) | $(850) | 1 | % | ||||
Continuing
EPS | (0.03) | 0.08 | U | 0.07 | 0.11 | (36 | )% | |||||
Net EPS | (0.01) | 0.07 | U | 0.40 | (0.07) | F | ||||||
Total
Revenues | 28,831 | 29,162 | (1 | )% | 56,117 | 56,950 | (1 | )% | ||||
GE Industrial Profit Margin | (1.3 | )% | 4.6 | % | (590)
bps | 1.7 | % | 3.5 | % | (180) bps | ||
Non-GAAP Metrics | ||||||||||||
Adjusted
GE Industrial Free Cash Flows (FCF)-a) | $(993) | $316 | U | $(2,209) | $(1,440) | (53 | )% | |||||
Adjusted EPS-b) | 0.17 | 0.18 | (6 | )% | 0.31 | 0.33 | (6 | )% | ||||
GE
Industrial Segment Organic Revenues | 27,688 | 25,769 | 7 | % | 53,745 | 50,591 | 6 | % | ||||
Adjusted GE Industrial Operating Profit-c) | 2,032 | 2,762 | (26 | )% | 4,271 | 5,377 | (21 | )% | ||||
Adjusted
GE Industrial Profit Margin-c) | 7.6% | 10.2 | % | (260) bps | 8.2 | % | 10.1 | % | (190) bps |
-a) | Excludes
deal taxes and GE Pension Plan funding, and with BHGE on a dividend basis |
-b) | Excludes non-operating benefit costs, gains (losses), restructuring and other charges, goodwill impairment, and tax reform enactment |
-c) | Excludes interest and other financial charges, non-op benefit costs, gains (losses), restructuring & other charges, and goodwill impairment |
Three
months ended June 30 | Six months ended June 30 | |||||||||||
(in millions) | 2019 | 2018 | Year on Year | 2019 | 2018 | Year on Year | ||||||
Orders | $4,916 | $6,282 | (22 | )% | $8,578 | $10,740 | (20 | )% | ||||
Revenues | 4,681 | 6,261 | (25 | )% | 9,298 | 12,209 | (24 | )% | ||||
Segment
Profit/(Loss) | 117 | 410 | (71 | )% | 228 | 654 | (65 | )% | ||||
Segment Profit/(Loss) Margin | 2.5 | % | 6.5 | % | (400)
bps | 2.5 | % | 5.4 | % | (290) bps |
Three
months ended June 30 | Six months ended June 30 | |||||||||||
(in millions) | 2019 | 2018 | Year on Year | 2019 | 2018 | Year on Year | ||||||
Orders | $3,676 | $2,714 | 35 | % | $7,187 | $6,150 | 17 | % | ||||
Revenues | 3,627 | 2,883 | 26 | % | 6,165 | 5,722 | 8 | % | ||||
Segment
Profit/(Loss) | (184 | ) | 85 | U | (371 | ) | 196 | U | ||||
Segment Profit/(Loss) Margin | (5.1 | )% | 2.9 | % | (800)
bps | (6.0 | )% | 3.4 | % | (940) bps |
Three
months ended June 30 | Six months ended June 30 | |||||||||||
(in millions) | 2019 | 2018 | Year on Year | 2019 | 2018 | Year on Year | ||||||
Orders | $8,571 | $9,521 | (10 | )% | $17,278 | $17,635 | (2 | )% | ||||
Revenues | 7,877 | 7,519 | 5 | % | 15,831 | 14,631 | 8 | % | ||||
Segment
Profit/(Loss) | 1,385 | 1,475 | (6 | )% | 3,046 | 3,078 | (1 | )% | ||||
Segment Profit/(Loss) Margin | 17.6 | % | 19.6 | % | (200)
bps | 19.2 | % | 21.0 | % | (180) bps |
Three
months ended June 30 | Six months ended June 30 | |||||||||||
(in millions) | 2019 | 2018 | Year on Year | 2019 | 2018 | Year on Year | ||||||
Orders | $5,203 | $5,320 | (2 | )% | $10,135 | $10,052 | 1 | % | ||||
Revenues | 4,934 | 4,978 | (1 | )% | 9,616 | 9,680 | (1 | )% | ||||
Segment
Profit/(Loss) | 958 | 926 | 3 | % | 1,740 | 1,660 | 5 | % | ||||
Segment Profit/(Loss) Margin | 19.4 | % | 18.6 | % | 80
bps | 18.1 | % | 17.1 | % | 100 bps |
Three
months ended June 30 | Six months ended June 30 | |||||||||||
(in millions) | 2019 | 2018 | Year on Year | 2019 | 2018 | Year on Year | ||||||
Orders | $6,514 | $6,043 | 8 | % | $12,209 | $11,275 | 8 | % | ||||
Revenues | 5,953 | 5,554 | 7 | % | 11,569 | 10,939 | 6 | % | ||||
Adjusted
Segment Profit-a) | 217 | 222 | (2 | )% | 439 | 402 | 9 | % | ||||
Adjusted Segment Profit Margin-a) | 3.6 | % | 4.0 | % | (40)
bps | 3.8 | % | 3.7 | % | 10 | bps |
-a) | Excluded gains, restructuring and other charges; O&G segment profit including these items was $82 million for the three months ended June 30, 2019 and $73 million for the three months ended June
30, 2018; and $245 million for the six months ended June 30, 2019 and $(70) million for the six months ended June 30, 2018. |
Three months ended June 30 | Six months ended June 30 | ||||||
(in millions) | 2019 | 2018 | Year on Year | 2019 | 2018 | Year
on Year | |
Capital continuing operations | $(89) | $(207) | 57 | % | $46 | $(422) | F |
Discontinued operations | 238 | (66) | F | 273 | (1,618) | F | |
GE
Capital Earnings | 148 | (273) | F | 319 | (2,041) | F |
GE Total Company | 2019 Projected, March 2019 | 2019 Projected, July 2019 Update |
Industrial Segment Organic Revenue* Growth | Low- to mid-single digits | Mid-single digits |
Adjusted EPS* | $0.50 - $0.60 | $0.55
- $0.65 |
Adjusted Industrial Free Cash Flows* | $(2) - 0 billion | $(1) - 1 billion |
Adjusted GE Industrial Margin* Expansion | ~Flat to up ~100 basis points | ~Flat to up ~100 basis points |
Restructuring (Industrial): Expense | $2.4 - 2.7 billion | $1.7 - 2.0 billion |
Restructuring (Industrial): Cash | $2.0+
billion | $1.5+ billion |
GENERAL
ELECTRIC COMPANY | ||||||||||||||||||||||||||||||||||
CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED) | ||||||||||||||||||||||||||||||||||
Consolidated | GE(a) | Financial Services (GE Capital) | ||||||||||||||||||||||||||||||||
Three months ended June 30 | 2019 | 2018 | V% | 2019 | 2018 | V% | 2019 | 2018 | V% | |||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||
Sales
of goods and services | $ | 26,788 | $ | 27,151 | (1 | )% | $ | 26,833 | $ | 27,138 | (1 | )% | $ | 18 | $ | 31 | (42 | )% | ||||||||||||||||
GE
Capital revenues from services | 2,043 | 2,011 | — | — | 2,303 | 2,398 | ||||||||||||||||||||||||||||
Total
revenues | 28,831 | 29,162 | (1 | )% | 26,833 | 27,137 | (1 | )% | 2,321 | 2,429 | (4 | )% | ||||||||||||||||||||||
Costs
and expenses | ||||||||||||||||||||||||||||||||||
Cost
of sales | 21,817 | 21,749 | 21,334 | 21,202 | 526 | 571 | ||||||||||||||||||||||||||||
Selling,
general and administrative expenses | 4,184 | 4,346 | 4,113 | 4,190 | 211 | 312 | ||||||||||||||||||||||||||||
Interest
and other financial charges | 991 | 1,291 | 444 | 686 | 646 | 772 | ||||||||||||||||||||||||||||
Insurance
liabilities and annuity benefits | 638 | 669 | — | — | 668 | 694 | ||||||||||||||||||||||||||||
Goodwill
impairments | 744 | — | 744 | — | — | — | ||||||||||||||||||||||||||||
Non-operating
benefit costs | 557 | 690 | 554 | 688 | 3 | 3 | ||||||||||||||||||||||||||||
Other
costs and expenses | 167 | 66 | 6 | (1 | ) | 178 | 79 | |||||||||||||||||||||||||||
Total
costs and expenses | 29,097 | 28,812 | 1 | % | 27,194 | 26,764 | 2 | % | 2,233 | 2,432 | (8 | )% | ||||||||||||||||||||||
Other
income | (8 | ) | 886 | (1 | ) | 866 | — | — | ||||||||||||||||||||||||||
GE
Capital earnings (loss) from continuing operations | — | — | (89 | ) | (207 | ) | — | — | ||||||||||||||||||||||||||
Earnings
(loss) from continuing operations | ||||||||||||||||||||||||||||||||||
before
income taxes | (274 | ) | 1,236 | U | (452 | ) | 1,032 | U | 88 | (3 | ) | F | ||||||||||||||||||||||
Benefit
(provision) for income taxes | 148 | (504 | ) | 137 | (487 | ) | 11 | (17 | ) | |||||||||||||||||||||||||
Earnings
(loss) from continuing operations | (126 | ) | 732 | U | (315 | ) | 545 | U | 99 | (20 | ) | F | ||||||||||||||||||||||
Earnings
(loss) from discontinued | ||||||||||||||||||||||||||||||||||
operations,
net of taxes | 231 | (63 | ) | 231 | (63 | ) | 238 | (66 | ) | |||||||||||||||||||||||||
Net
earnings (loss) | 104 | 669 | (84 | )% | (84 | ) | 482 | U | 336 | (86 | ) | F | ||||||||||||||||||||||
Less
net earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
noncontrolling
interests | (23 | ) | (132 | ) | (23 | ) | (133 | ) | — | 2 | ||||||||||||||||||||||||
Net
earnings (loss) attributable to the Company | 127 | 800 | (84 | )% | (61 | ) | 615 | U | 336 | (88 | ) | F | ||||||||||||||||||||||
Preferred
stock dividends | (188 | ) | (185 | ) | — | — | (188 | ) | (185 | ) | ||||||||||||||||||||||||
Net
earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
GE
common shareowners | $ | (61 | ) | $ | 615 | U | $ | (61 | ) | $ | 615 | U | $ | 148 | $ | (273 | ) | F | ||||||||||||||||
Amounts
attributable to GE common shareowners: | ||||||||||||||||||||||||||||||||||
Earnings
(loss) from continuing operations | $ | (126 | ) | $ | 732 | U | $ | (315 | ) | $ | 545 | U | $ | 99 | $ | (20 | ) | F | ||||||||||||||||
Less
net earnings (loss) attributable | ||||||||||||||||||||||||||||||||||
to
noncontrolling interests, continuing operations | (23 | ) | (132 | ) | (23 | ) | (134 | ) | — | 2 | ||||||||||||||||||||||||
Earnings
(loss) from continuing operations | ||||||||||||||||||||||||||||||||||
attributable
to the Company | (103 | ) | 864 | U | (291 | ) | 679 | U | 99 | (22 | ) | F | ||||||||||||||||||||||
Preferred
stock dividends | (188 | ) | (185 | ) | — | — | (188 | ) | (185 | ) | ||||||||||||||||||||||||
Earnings
(loss) from continuing operations | ||||||||||||||||||||||||||||||||||
attributable
to GE common shareowners | (291 | ) | 679 | U | (291 | ) | 679 | U | (89 | ) | (207 | ) | 57 | % | ||||||||||||||||||||
Earnings
(loss) from discontinued | ||||||||||||||||||||||||||||||||||
operations,
net of taxes | 231 | (63 | ) | 231 | (63 | ) | 238 | (66 | ) | |||||||||||||||||||||||||
Less
net earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
noncontrolling
interests, discontinued operations | — | 1 | — | 1 | — | — | ||||||||||||||||||||||||||||
Net
earnings (loss) attributable to GE | ||||||||||||||||||||||||||||||||||
common
shareowners | $ | (61 | ) | $ | 615 | U | $ | (61 | ) | $ | 615 | U | $ | 148 | $ | (273 | ) | F | ||||||||||||||||
Per-share
amounts - earnings (loss) from | ||||||||||||||||||||||||||||||||||
continuing
operations | ||||||||||||||||||||||||||||||||||
Diluted
earnings (loss) per share | $ | (0.03 | ) | $ | 0.08 | U | ||||||||||||||||||||||||||||
Basic
earnings (loss) per share | $ | (0.03 | ) | $ | 0.08 | U | ||||||||||||||||||||||||||||
Per-share
amounts - net earnings (loss) | ||||||||||||||||||||||||||||||||||
Diluted
earnings (loss) per share | $ | (0.01 | ) | $ | 0.07 | U | ||||||||||||||||||||||||||||
Basic
earnings (loss) per share | $ | (0.01 | ) | $ | 0.07 | U | ||||||||||||||||||||||||||||
Total
average equivalent shares | ||||||||||||||||||||||||||||||||||
Diluted | 8,724 | 8,699 | — | % | ||||||||||||||||||||||||||||||
Basic | 8,724 | 8,688 | — | % | ||||||||||||||||||||||||||||||
Dividends
declared per common share | $ | 0.01 | $ | 0.12 | (92 | )% |
GENERAL
ELECTRIC COMPANY | ||||||||||||||||||||||||||||||||||
CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED) | ||||||||||||||||||||||||||||||||||
Consolidated | GE(a) | Financial Services (GE Capital) | ||||||||||||||||||||||||||||||||
Six months ended June 30 | 2019 | 2018 | V% | 2019 | 2018 | V% | 2019 | 2018 | V% | |||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||
Sales
of goods and services | $ | 52,130 | $ | 53,153 | (2 | )% | $ | 52,242 | $ | 53,159 | (2 | )% | $ | 34 | $ | 63 | (45 | )% | ||||||||||||||||
GE
Capital revenues from services | 3,987 | 3,797 | — | — | 4,514 | 4,539 | ||||||||||||||||||||||||||||
Total
revenues | 56,117 | 56,950 | (1 | )% | 52,242 | 53,159 | (2 | )% | 4,548 | 4,602 | (1 | )% | ||||||||||||||||||||||
Costs
and expenses | ||||||||||||||||||||||||||||||||||
Cost
of sales | 42,170 | 42,659 | 41,310 | 41,614 | 1,026 | 1,121 | ||||||||||||||||||||||||||||
Selling,
general and administrative expenses | 8,330 | 8,434 | 8,052 | 8,072 | 478 | 655 | ||||||||||||||||||||||||||||
Interest
and other financial charges | 2,123 | 2,573 | 1,032 | 1,326 | 1,323 | 1,592 | ||||||||||||||||||||||||||||
Insurance
liabilities and annuity benefits | 1,249 | 1,299 | — | — | 1,302 | 1,339 | ||||||||||||||||||||||||||||
Goodwill
impairments | 744 | — | 744 | — | — | — | ||||||||||||||||||||||||||||
Non-operating
benefit costs | 1,123 | 1,376 | 1,115 | 1,369 | 8 | 7 | ||||||||||||||||||||||||||||
Other
costs and expenses | 248 | 186 | 6 | (2 | ) | 277 | 212 | |||||||||||||||||||||||||||
Total
costs and expenses | 55,986 | 56,527 | (1 | )% | 52,259 | 52,379 | — | % | 4,413 | 4,926 | (10 | )% | ||||||||||||||||||||||
Other
income | 870 | 1,091 | 883 | 1,057 | — | — | ||||||||||||||||||||||||||||
GE
Capital earnings (loss) from continuing operations | — | — | 46 | (422 | ) | — | — | |||||||||||||||||||||||||||
Earnings
(loss) from continuing operations | ||||||||||||||||||||||||||||||||||
before
income taxes | 1,001 | 1,513 | (34 | )% | 912 | 1,415 | (36 | )% | 135 | (324 | ) | F | ||||||||||||||||||||||
Benefit
(provision) for income taxes | (74 | ) | (454 | ) | (213 | ) | (576 | ) | 139 | 122 | ||||||||||||||||||||||||
Earnings
(loss) from continuing operations | 926 | 1,060 | (13 | )% | 699 | 840 | (17 | )% | 273 | (202 | ) | F | ||||||||||||||||||||||
Earnings
(loss) from discontinued | ||||||||||||||||||||||||||||||||||
operations,
net of taxes | 2,823 | (1,504 | ) | 2,823 | (1,504 | ) | 273 | (1,618 | ) | |||||||||||||||||||||||||
Net
earnings (loss) | 3,749 | (444 | ) | F | 3,522 | (664 | ) | F | 547 | (1,821 | ) | F | ||||||||||||||||||||||
Less
net earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
noncontrolling
interests | 34 | (98 | ) | 33 | (96 | ) | — | (2 | ) | |||||||||||||||||||||||||
Net
earnings (loss) attributable to the Company | 3,716 | (347 | ) | F | 3,488 | (568 | ) | F | 547 | (1,819 | ) | F | ||||||||||||||||||||||
Preferred
stock dividends | (228 | ) | (222 | ) | — | — | (228 | ) | (222 | ) | ||||||||||||||||||||||||
Net
earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
GE
common shareowners | $ | 3,488 | $ | (568 | ) | F | $ | 3,488 | $ | (568 | ) | F | $ | 319 | $ | (2,041 | ) | F | ||||||||||||||||
Amounts
attributable to GE common shareowners: | ||||||||||||||||||||||||||||||||||
Earnings
(loss) from continuing operations | $ | 926 | $ | 1,060 | (13 | )% | $ | 699 | $ | 840 | (17 | )% | $ | 273 | $ | (202 | ) | F | ||||||||||||||||
Less
net earnings (loss) attributable | ||||||||||||||||||||||||||||||||||
to
noncontrolling interests, continuing operations | 36 | (102 | ) | 36 | (100 | ) | — | (2 | ) | |||||||||||||||||||||||||
Earnings
(loss) from continuing operations | ||||||||||||||||||||||||||||||||||
attributable
to the Company | 891 | 1,161 | (23 | )% | 663 | 940 | (29 | )% | 273 | (201 | ) | F | ||||||||||||||||||||||
Preferred
stock dividends | (228 | ) | (222 | ) | — | — | (228 | ) | (222 | ) | ||||||||||||||||||||||||
Earnings
(loss) from continuing operations | ||||||||||||||||||||||||||||||||||
attributable
to GE common shareowners | 663 | 940 | (29 | )% | 663 | 940 | (29 | )% | 46 | (422 | ) | F | ||||||||||||||||||||||
Earnings
(loss) from discontinued | ||||||||||||||||||||||||||||||||||
operations,
net of taxes | 2,823 | (1,504 | ) | 2,823 | (1,504 | ) | 273 | (1,618 | ) | |||||||||||||||||||||||||
Less
net earnings (loss) attributable to | ||||||||||||||||||||||||||||||||||
noncontrolling
interests, discontinued operations | (2 | ) | 4 | (2 | ) | 4 | — | — | ||||||||||||||||||||||||||
Net
earnings (loss) attributable to GE | ||||||||||||||||||||||||||||||||||
common
shareowners | $ | 3,488 | $ | (568 | ) | F | $ | 3,488 | $ | (568 | ) | F | $ | 319 | $ | (2,041 | ) | F | ||||||||||||||||
Per-share
amounts - earnings (loss) from | ||||||||||||||||||||||||||||||||||
continuing
operations | ||||||||||||||||||||||||||||||||||
Diluted
earnings (loss) per share | $ | 0.07 | $ | 0.11 | (36 | )% | ||||||||||||||||||||||||||||
Basic
earnings (loss) per share | $ | 0.08 | $ | 0.11 | (27 | )% | ||||||||||||||||||||||||||||
Per-share
amounts - net earnings (loss) | ||||||||||||||||||||||||||||||||||
Diluted
earnings (loss) per share | $ | 0.40 | $ | (0.07 | ) | F | ||||||||||||||||||||||||||||
Basic
earnings (loss) per share | $ | 0.40 | $ | (0.07 | ) | F | ||||||||||||||||||||||||||||
Total
average equivalent shares | ||||||||||||||||||||||||||||||||||
Diluted | 8,730 | 8,694 | — | % | ||||||||||||||||||||||||||||||
Basic | 8,716 | 8,686 | — | % | ||||||||||||||||||||||||||||||
Dividends
declared per common share | $ | 0.02 | $ | 0.24 | (92 | )% |
GENERAL
ELECTRIC COMPANY | |||||||||||||||||||||
SUMMARY OF OPERATING SEGMENTS (UNAUDITED) | |||||||||||||||||||||
Three
months ended June 30 | Six months ended June 30 | ||||||||||||||||||||
(Dollars in millions) | 2019 | 2018 | V% | 2019 | 2018 | V% | |||||||||||||||
Revenues(a) | |||||||||||||||||||||
Power | $ | 4,681 | $ | 6,261 | (25 | )% | $ | 9,298 | $ | 12,209 | (24 | )% | |||||||||
Renewable
Energy | 3,627 | 2,883 | 26 | % | 6,165 | 5,722 | 8 | % | |||||||||||||
Aviation | 7,877 | 7,519 | 5 | % | 15,831 | 14,631 | 8 | % | |||||||||||||
Healthcare | 4,934 | 4,978 | (1 | )% | 9,616 | 9,680 | (1 | )% | |||||||||||||
Oil
& Gas | 5,953 | 5,554 | 7 | % | 11,569 | 10,939 | 6 | % | |||||||||||||
Total
industrial segment revenues | 27,071 | 27,195 | — | % | 52,479 | 53,181 | (1 | )% | |||||||||||||
Capital | 2,321 | 2,429 | (4 | )% | 4,548 | 4,602 | (1 | )% | |||||||||||||
Total
segment revenues | 29,392 | 29,623 | (1 | )% | 57,027 | 57,783 | (1 | )% | |||||||||||||
Corporate
items and eliminations(a)(b) | (561 | ) | (462 | ) | (21 | )% | (910 | ) | (833 | ) | (9 | )% | |||||||||
Consolidated
revenues | $ | 28,831 | $ | 29,162 | (1 | )% | $ | 56,117 | $ | 56,950 | (1 | )% | |||||||||
Segment
profit (loss)(a) | |||||||||||||||||||||
Power | $ | 117 | $ | 410 | (71 | )% | $ | 228 | $ | 654 | (65 | )% | |||||||||
Renewable
Energy | (184 | ) | 85 | U | (371 | ) | 196 | U | |||||||||||||
Aviation | 1,385 | 1,475 | (6 | )% | 3,046 | 3,078 | (1 | )% | |||||||||||||
Healthcare | 958 | 926 | 3 | % | 1,740 | 1,660 | 5 | % | |||||||||||||
Oil
& Gas | 82 | 73 | 12 | % | 245 | (70 | ) | F | |||||||||||||
Total
industrial segment profit | 2,359 | 2,969 | (21 | )% | 4,887 | 5,518 | (11 | )% | |||||||||||||
Capital | (89 | ) | (207 | ) | 57 | % | 46 | (422 | ) | F | |||||||||||
Total
segment profit (loss) | 2,270 | 2,762 | (18 | )% | 4,933 | 5,095 | (3 | )% | |||||||||||||
Corporate
items and eliminations(a)(b) | (956 | ) | (222 | ) | U | (1,165 | ) | (886 | ) | (31 | )% | ||||||||||
GE
goodwill impairments | (744 | ) | — | — | % | (744 | ) | — | — | % | |||||||||||
GE
interest and other financial charges | (444 | ) | (686 | ) | 35 | % | (1,032 | ) | (1,326 | ) | 22 | % | |||||||||
GE
non-operating benefit costs | (554 | ) | (688 | ) | 19 | % | (1,115 | ) | (1,369 | ) | 19 | % | |||||||||
GE
benefit (provision) for income taxes | 137 | (487 | ) | F | (213 | ) | (576 | ) | 63 | % | |||||||||||
Earnings
(loss) from continuing operations attributable to GE common shareowners | (291 | ) | 679 | U | 663 | 940 | (29 | )% | |||||||||||||
Earnings
(loss) from discontinued operations, net of taxes | 231 | (63 | ) | F | 2,823 | (1,504 | ) | F | |||||||||||||
Less
net earnings attributable to noncontrolling interests, discontinued operations | — | 1 | (100 | )% | (2 | ) | 4 | U | |||||||||||||
Earnings
(loss) from discontinued operations, net of tax and noncontrolling interests | 231 | (64 | ) | F | 2,825 | (1,508 | ) | F | |||||||||||||
Consolidated
net earnings (loss) attributable to GE common shareowners | $ | (61 | ) | $ | 615 | U | $ | 3,488 | $ | (568 | ) | F |
(a) | Segment
revenues include sales of products and services related to the segment. Segment profit excludes results reported as discontinued operations, restructuring and other charges (with the exception of Oil & Gas), the portion of earnings or loss attributable to noncontrolling interests of consolidated subsidiaries, and as such only includes the portion of earnings or loss attributable to our share of the consolidated earnings or loss of consolidated subsidiaries. Segment profit excludes or includes interest and other financial charges, non-operating benefit costs, income taxes, and preferred stock dividends according to how a particular segment's management is measured – excluded in determining segment profit for Power, Renewable Energy, Aviation, Healthcare and Oil & Gas; included in determining
segment profit, which we sometimes refer to as "net earnings," for Capital. Other income is included in segment profit for the industrial segments. Certain corporate costs, such as those related to shared services, employee benefits and information technology are allocated to our segments based on usage. A portion of the remaining corporate costs is allocated based on each segment's relative net cost of operations. Industrial segment revenues and profit include the sum of our five industrial reporting segments without giving effect to the elimination of transactions among such segments and between these segments and our financial services segment. Total segment revenues and profit include the sum of our five industrial segments and one financial services segment, without giving effect to the elimination of transactions among such segments. We believe that this provides investors with a view as to the results of all of our segments, without inter-segment eliminations
and corporate items. |
(b) | Effective the first quarter of 2019, Corporate items and eliminations includes the results of our Lighting segment for all periods presented. |
GENERAL
ELECTRIC COMPANY | ||||||||||||||||||||||||
CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED) | ||||||||||||||||||||||||
Consolidated | GE(a) | Financial Services (GE Capital) | ||||||||||||||||||||||
June 30, | December
31, | June 30, | December 31, | June 30, | December 31, | |||||||||||||||||||
(Dollars
in billions) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Cash,
cash equivalents and restricted cash and marketable securities(b)(c) | $ | 71.4 | $ | 68.7 | $ | 22.1 | $ | 20.9 | $ | 49.3 | $ | 47.9 | ||||||||||||
Current
receivables | 20.2 | 19.5 | 16.9 | 15.1 | — | — | ||||||||||||||||||
Financing
receivables – net | 3.4 | 7.7 | — | — | 8.2 | 13.6 | ||||||||||||||||||
Inventories | 20.0 | 18.4 | 20.0 | 18.4 | — | — | ||||||||||||||||||
Property,
plant & equipment - net | 49.9 | 49.8 | 20.4 | 21.1 | 30.0 | 29.5 | ||||||||||||||||||
Operating
lease right-of-use-assets | 3.9 | — | 4.1 | — | 0.3 | — | ||||||||||||||||||
Receivable
from GE Capital(e)(f) | — | — | 21.2 | 22.5 | — | — | ||||||||||||||||||
Investment
in GE Capital | — | — | 13.5 | 11.4 | — | — | ||||||||||||||||||
Goodwill
& intangible assets | 68.9 | 76.6 | 67.8 | 75.5 | 1.1 | 1.1 | ||||||||||||||||||
Contract
assets | 19.2 | 19.2 | 19.2 | 19.2 | — | — | ||||||||||||||||||
Other
assets | 41.9 | 38.7 | 20.7 | 20.4 | 28.6 | 27.1 | ||||||||||||||||||
Assets
of businesses held for sale | 9.2 | 1.6 | 9.0 | 1.5 | — | — | ||||||||||||||||||
Assets
of discontinued operations | 4.2 | 9.3 | 0.1 | 4.6 | 4.1 | 4.6 | ||||||||||||||||||
Total
assets | $ | 312.1 | $ | 309.6 | $ | 234.9 | $ | 230.5 | $ | 121.5 | $ | 123.9 | ||||||||||||
Liabilities
and equity | ||||||||||||||||||||||||
Borrowings(d)(f) | $ | 105.8 | $ | 109.9 | $ | 31.8 | $ | 32.3 | $ | 40.0 | $ | 43.0 | ||||||||||||
Borrowings
assumed by GE(e) | — | — | 35.0 | 36.3 | 21.2 | 22.5 | ||||||||||||||||||
Operating
lease liabilities | 4.1 | — | 4.3 | — | 0.2 | — | ||||||||||||||||||
Insurance
liabilities and annuity benefits | 38.1 | 35.6 | — | — | 38.6 | 36.0 | ||||||||||||||||||
Non-current
compensation and benefits | 32.7 | 33.8 | 32.1 | 32.9 | 0.6 | 0.9 | ||||||||||||||||||
Other
liabilities | 73.5 | 74.4 | 74.0 | 74.9 | 7.0 | 8.3 | ||||||||||||||||||
Liabilities
of businesses held for sale | 1.5 | 0.7 | 1.5 | 0.7 | — | — | ||||||||||||||||||
Liabilities
of discontinued operations | 0.4 | 3.7 | 0.1 | 1.9 | 0.3 | 1.8 | ||||||||||||||||||
GE
shareowners' equity | 35.8 | 31.0 | 35.8 | 31.0 | 13.5 | 11.4 | ||||||||||||||||||
Noncontrolling
interests | 20.3 | 20.5 | 20.3 | 20.5 | — | — | ||||||||||||||||||
Total
liabilities and equity | $ | 312.1 | $ | 309.6 | $ | 234.9 | $ | 230.5 | $ | 121.5 | $ | 123.9 |
(a) | Represents
the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis. |
(b) | GE Capital cash, cash equivalents and restricted cash totaled $11.9 billion at June 30, 2019 (excluding $0.6 billion classified within discontinued operations), including $0.9 billion which was subject to regulatory restrictions, primarily in insurance entities. Included in our credit facilities is an unused $20.0 billion back-up syndicated credit facility extended by 36 banks, expiring in 2021, and an unused $14.8 billion syndicated credit facility extended by six banks, expiring in 2020. GE Capital has the right to compel GE to borrow under certain of these credit lines and transfer
the proceeds as loans to GE Capital, which would be subject to the same terms and conditions as those between GE and the lending banks. |
(c) | Balance included consolidated restricted cash of $0.7 billion and $0.5 billion at June 30, 2019 and December 31, 2018, respectively. GE restricted cash was $0.7 billion and $0.5 billion at June 30, 2019 and December 31, 2018, respectively, and GE Capital restricted cash was an insignificant amount at June 30, 2019 and December
31, 2018, respectively. |
(d) | GE borrowings includes commercial paper of $3.0 billion at both June 30, 2019 and December 31, 2018. GE Capital borrowings includes commercial paper of zero and an insignificant amount at June 30, 2019 and December 31, 2018, respectively. |
(e) | At June
30, 2019, the remaining GE Capital borrowings that had been assumed by GE as part of the GE Capital Exit Plan was $35.0 billion, for which GE has an offsetting receivable from GE Capital of $21.2 billion. The difference of $13.7 billion represents the amount of borrowings GE Capital has funded with available cash to GE via an intercompany loan in lieu of issuing borrowings externally. |
(f) | At June 30, 2019, total GE borrowings is comprised of GE-issued borrowings of $31.8 billion and the $13.7 billion of borrowings from GE Capital as described in note (e) above for a total of $45.6 billion (including $6.3 billion BHGE borrowings). |
ADJUSTED
EARNINGS (LOSS) (NON-GAAP) | Three months ended June 30 | Six months ended June 30 | |||||||||||||||
(In millions) | 2019 | 2018 | V% | 2019 | 2018 | V% | |||||||||||
Consolidated
earnings (loss) from continuing operations attributable to GE common shareowners (GAAP) | $ | (291 | ) | $ | 679 | U | $ | 663 | $ | 940 | (29 | )% | |||||
Less:
GE Capital earnings (loss) from continuing operations attributable to GE common shareowners (GAAP) | (89 | ) | (207 | ) | 46 | (422 | ) | ||||||||||
GE Industrial earnings
(loss) (Non-GAAP) | (202 | ) | 886 | U | 617 | 1,362 | (55 | )% | |||||||||
Non-operating
benefits costs (pre-tax) (GAAP) | (554 | ) | (688 | ) | (1,115 | ) | (1,369 | ) | |||||||||
Tax effect on non-operating benefit costs | 116 | 144 | 234 | 287 | |||||||||||||
Less:
non-operating benefit costs (net of tax) | (437 | ) | (543 | ) | (881 | ) | (1,081 | ) | |||||||||
Gains (losses) and impairments for disposed or held for sale businesses (pre-tax) | (196 | ) | 329 | 169 | 263 | ||||||||||||
Tax
effect on gains (losses) and impairments for disposed or held for sale businesses(a) | 16 | (129 | ) | 52 | (105 | ) | |||||||||||
Less: gains (losses) and impairments
for disposed or held for sale businesses (net of tax) | (179 | ) | 200 | 221 | 158 | ||||||||||||
Restructuring & other (pre-tax) | (382 | ) | (610 | ) | (681 | ) | (1,139 | ) | |||||||||
Tax
effect on restructuring & other(a) | 88 | (79 | ) | 144 | 55 | ||||||||||||
Less: restructuring & other (net of tax) | (295 | ) | (689 | ) | (538 | ) | (1,084 | ) | |||||||||
Goodwill
impairments (pre-tax) | (744 | ) | — | (744 | ) | — | |||||||||||
Tax effect on goodwill impairments(a) | (55 | ) | — | (55 | ) | — | |||||||||||
Less:
goodwill impairments (net of tax) | (799 | ) | — | (799 | ) | — | |||||||||||
Unrealized gains (losses) | (51 | ) | 266 | (38 | ) | 266 | |||||||||||
Tax
on unrealized gains (losses) | 11 | (56 | ) | 8 | (56 | ) | |||||||||||
Less: unrealized gains (losses) | (40 | ) | 210 | (30 | ) | 210 | |||||||||||
Less:
GE Industrial U.S. tax reform enactment adjustment | — | (24 | ) | (101 | ) | (55 | ) | ||||||||||
Adjusted GE Industrial earnings (loss) (Non-GAAP) | $ | 1,549 | $ | 1,732 | (11 | )% | $ | 2,745 | $ | 3,215 | (15 | )% | |||||
GE
Capital earnings (loss) from continuing operations attributable to GE common shareowners (GAAP) | (89 | ) | (207 | ) | 57 | % | 46 | (422 | ) | F | |||||||
Less:
GE Capital U.S. tax reform enactment adjustment | — | — | 99 | (45 | ) | ||||||||||||
Adjusted GE Capital earnings (loss) (Non-GAAP) | $ | (89 | ) | $ | (207 | ) | 57 | % | $ | (53 | ) | $ | (377 | ) | 86 | % | |
Adjusted
GE Industrial earnings (loss) (Non-GAAP) | $ | 1,549 | $ | 1,732 | (11 | )% | $ | 2,745 | $ | 3,215 | (15 | )% | |||||
Add:
Adjusted GE Capital earnings (loss) (Non-GAAP) | (89 | ) | (207 | ) | 57 | % | (53 | ) | (377 | ) | 86 | % | |||||
Adjusted
earnings (loss) (Non-GAAP) | $ | 1,460 | $ | 1,525 | (4 | )% | $ | 2,692 | $ | 2,838 | (5 | )% | |||||
(a)
The tax effect presented includes both the rate for the relevant item as well as other direct and incremental tax charges. |
ADJUSTED
EARNINGS (LOSS) PER SHARE (EPS) (NON-GAAP) | Three months ended June 30 | Six months ended June 30 | |||||||||||||||
2019 | 2018 | V% | 2019 | 2018 | V% | ||||||||||||
Consolidated
EPS from continuing operations attributable to GE common shareowners (GAAP) | $ | (0.03 | ) | $ | 0.08 | U | 0.07 | 0.11 | (36 | )% | |||||||
Less:
GE Capital EPS from continuing operations attributable to GE common shareowners (GAAP) | (0.01 | ) | (0.02 | ) | 0.01 | (0.05 | ) | ||||||||||
GE Industrial EPS (Non-GAAP) | $ | (0.02 | ) | $ | 0.10 | U | $ | 0.07 | $ | 0.16 | (56 | )% | |||||
Non-operating
benefits costs (pre-tax) (GAAP) | (0.06 | ) | (0.08 | ) | (0.13 | ) | (0.16 | ) | |||||||||
Tax effect on non-operating benefit costs | 0.01 | 0.02 | 0.03 | 0.03 | |||||||||||||
Less:
non-operating benefit costs (net of tax) | (0.05 | ) | (0.06 | ) | (0.10 | ) | (0.12 | ) | |||||||||
Gains (losses) and impairments for disposed or held for sale businesses
(pre-tax) | (0.02 | ) | 0.04 | 0.02 | 0.03 | ||||||||||||
Tax effect on gains (losses) and impairments for disposed or held for sale businesses(a) | — | (0.01 | ) | 0.01 | (0.01 | ) | |||||||||||
Less:
gains (losses) and impairments for disposed or held for sale businesses (net of tax) | (0.02 | ) | 0.02 | 0.03 | 0.02 | ||||||||||||
Restructuring & other
(pre-tax) | (0.04 | ) | (0.07 | ) | (0.08 | ) | (0.13 | ) | |||||||||
Tax effect on restructuring & other(a) | 0.01 | (0.01 | ) | 0.02 | 0.01 | ||||||||||||
Less:
restructuring & other (net of tax) | (0.03 | ) | (0.08 | ) | (0.06 | ) | (0.12 | ) | |||||||||
Goodwill impairments (pre-tax) | (0.09 | ) | — | (0.09 | ) | — | |||||||||||
Tax
effect on goodwill impairments(a) | (0.01 | ) | — | (0.01 | ) | — | |||||||||||
Less: goodwill impairments (net of tax) | (0.09 | ) | — | (0.09 | ) | — | |||||||||||
Unrealized
gains (losses) | (0.01 | ) | 0.03 | — | 0.03 | ||||||||||||
Tax on unrealized gains (losses) | — | (0.01 | ) | — | (0.01 | ) | |||||||||||
Less:
unrealized gains (losses) | — | 0.02 | — | 0.02 | |||||||||||||
Less: GE Industrial U.S. tax reform enactment adjustment | — | — | (0.01 | ) | (0.01 | ) | |||||||||||
Adjusted
GE Industrial EPS (Non-GAAP) | $ | 0.18 | $ | 0.20 | (10 | )% | $ | 0.31 | $ | 0.37 | (16 | )% | |||||
GE
Capital EPS from continuing operations attributable to GE common shareowners (GAAP) | (0.01 | ) | (0.02 | ) | 50 | % | 0.01 | (0.05 | ) | F | |||||||
Less:
GE Capital U.S. tax reform enactment adjustment | — | — | 0.01 | (0.01 | ) | ||||||||||||
Adjusted GE Capital EPS (Non-GAAP) | $ | (0.01 | ) | $ | (0.02 | ) | 50 | % | $ | (0.01 | ) | $ | (0.04 | ) | 75 | % | |
Adjusted
GE Industrial EPS (Non-GAAP) | $ | 0.18 | $ | 0.20 | (10 | )% | $ | 0.31 | $ | 0.37 | (16 | )% | |||||
Add:
Adjusted GE Capital EPS (Non-GAAP) | (0.01 | ) | (0.02 | ) | 50 | % | (0.01 | ) | (0.04 | ) | 75 | % | |||||
Adjusted
EPS (Non-GAAP)(b) | $ | 0.17 | $ | 0.18 | (6 | )% | $ | 0.31 | $ | 0.33 | (6 | )% | |||||
(a)
The tax effect presented includes both the rate for the relevant item as well as other direct and incremental tax charges. | |||||||||||||||||
(b) Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total. | |||||||||||||||||
The service cost for our pension and other benefit plans are included in adjusted earnings*, 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. We believe that the retained costs in Adjusted earnings and EPS* provides management and investors a useful measure to evaluate the performance of the total company, and increases period-to-period comparability. We also use Adjusted EPS* as a performance metric at the
company level for our annual executive incentive plan for 2019. We believe that presenting Adjusted Industrial earnings and EPS* 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. |
ADJUSTED GE INDUSTRIAL PROFIT AND PROFIT MARGIN (EXCLUDING CERTAIN ITEMS) (NON-GAAP) | Three months ended June 30 | Six months ended June 30 | |||||||||||
(Dollars
in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
GE
Industrial revenues (GAAP) | $ | 26,833 | $ | 27,137 | $ | 52,242 | $ | 53,159 | |||||
Costs | |||||||||||||
GE
Industrial costs and expenses (GAAP) | $ | 27,194 | $ | 26,764 | $ | 52,259 | $ | 52,379 | |||||
Less:
GE interest and other financial charges | 444 | 686 | 1,032 | 1,326 | |||||||||
Less: non-operating benefit costs | 554 | 688 | 1,115 | 1,369 | |||||||||
Less:
restructuring & other | 382 | 610 | 690 | 1,270 | |||||||||
Less: goodwill impairments | 744 | — | 744 | — | |||||||||
Add:
noncontrolling interests | (23 | ) | (134 | ) | 36 | (100 | ) | ||||||
Adjusted GE Industrial costs (Non-GAAP) | $ | 25,047 | $ | 24,646 | $ | 48,714 | $ | 48,314 | |||||
Other
Income | |||||||||||||
GE other income (GAAP) | $ | (1 | ) | $ | 866 | $ | 883 | $ | 1,057 | ||||
Less:
unrealized gains (losses) | (51 | ) | 266 | (38 | ) | 266 | |||||||
Less: restructuring & other | — | — | 9 | (3 | ) | ||||||||
Less:
gains (losses) and impairments for disposed or held for sale businesses | (196 | ) | 329 | 169 | 263 | ||||||||
Adjusted GE other income (Non-GAAP) | $ | 246 | $ | 270 | $ | 743 | $ | 532 | |||||
GE
Industrial profit (GAAP) | $ | (362 | ) | $ | 1,239 | $ | 866 | $ | 1,838 | ||||
GE Industrial
profit margin (GAAP) | (1.3 | )% | 4.6 | % | 1.7 | % | 3.5 | % | |||||
Adjusted
GE Industrial profit (Non-GAAP) | $ | 2,032 | $ | 2,762 | $ | 4,271 | $ | 5,377 | |||||
Adjusted
GE Industrial profit margin (Non-GAAP) | 7.6 | % | 10.2 | % | 8.2 | % | 10.1 | % | |||||
We
believe that GE Industrial profit and profit margins adjusted for the items included in the above reconciliation are meaningful measures because they increase the comparability of period-to-period results. |
GE
INDUSTRIAL ORGANIC REVENUES, PROFIT (LOSS) AND PROFIT MARGIN BY SEGMENT (NON-GAAP) | |||||||||||||||||||||||||||||
Revenue | Segment profit (loss) | Profit margin | |||||||||||||||||||||||||||
Three months ended June 30 (In millions) | 2019 | 2018 | V% | 2019 | 2018 | V% | 2019 | 2018 | V
pts | ||||||||||||||||||||
Power
(GAAP) | $ | 4,681 | $ | 6,261 | (25 | )% | $ | 117 | $ | 410 | (71 | )% | 2.5 | % | 6.5 | % | (4)pts | ||||||||||||
Less:
acquisitions | — | — | — | — | |||||||||||||||||||||||||
Less:
business dispositions | (4 | ) | 1,144 | — | 85 | ||||||||||||||||||||||||
Less:
foreign currency effect | (165 | ) | — | 17 | — | ||||||||||||||||||||||||
Power
organic (Non-GAAP) | $ | 4,849 | $ | 5,117 | (5 | )% | $ | 100 | $ | 325 | (69 | )% | 2.1 | % | 6.4 | % | (4.3)pts | ||||||||||||
Renewable
Energy (GAAP) | $ | 3,627 | $ | 2,883 | 26 | % | $ | (184 | ) | $ | 85 | U | (5.1 | )% | 2.9 | % | (8)pts | ||||||||||||
Less:
acquisitions | 1 | — | 2 | — | |||||||||||||||||||||||||
Less:
business dispositions | — | — | — | (2 | ) | ||||||||||||||||||||||||
Less:
foreign currency effect | (197 | ) | — | 23 | — | ||||||||||||||||||||||||
Renewable
Energy organic (Non-GAAP) | $ | 3,823 | $ | 2,883 | 33 | % | $ | (208 | ) | $ | 87 | U | (5.4 | )% | 3.0 | % | (8.4)pts | ||||||||||||
Aviation
(GAAP) | $ | 7,877 | $ | 7,519 | 5 | % | $ | 1,385 | $ | 1,475 | (6 | )% | 17.6 | % | 19.6 | % | (2)pts | ||||||||||||
Less:
acquisitions | — | — | — | — | |||||||||||||||||||||||||
Less:
business dispositions | — | 105 | — | 13 | |||||||||||||||||||||||||
Less:
foreign currency effect | (8 | ) | — | 9 | — | ||||||||||||||||||||||||
Aviation
organic (Non-GAAP) | $ | 7,885 | $ | 7,413 | 6 | % | $ | 1,376 | $ | 1,462 | (6 | )% | 17.5 | % | 19.7 | % | (2.2)pts | ||||||||||||
Healthcare
(GAAP) | $ | 4,934 | $ | 4,978 | (1 | )% | $ | 958 | $ | 926 | 3 | % | 19.4 | % | 18.6 | % | 0.8pts | ||||||||||||
Less:
acquisitions | 19 | — | (6 | ) | — | ||||||||||||||||||||||||
Less:
business dispositions | — | 108 | (10 | ) | 30 | ||||||||||||||||||||||||
Less:
foreign currency effect | (136 | ) | — | 2 | — | ||||||||||||||||||||||||
Healthcare
organic (Non-GAAP) | $ | 5,051 | $ | 4,870 | 4 | % | $ | 972 | $ | 895 | 9 | % | 19.2 | % | 18.4 | % | 0.8pts | ||||||||||||
Oil
& Gas (GAAP) | $ | 5,953 | $ | 5,554 | 7 | % | $ | 82 | $ | 73 | 12 | % | 1.4 | % | 1.3 | % | 0.1pts | ||||||||||||
Less:
restructuring & other (GE share) | (135 | ) | (148 | ) | |||||||||||||||||||||||||
Adjusted
Oil & Gas (Non-GAAP) | 5,953 | 5,554 | 7 | % | 217 | 222 | (2 | )% | 3.6 | % | 4.0 | % | (0.4)pts | ||||||||||||||||
Less:
acquisitions | — | — | — | — | |||||||||||||||||||||||||
Less:
business dispositions | 4 | 68 | — | 10 | |||||||||||||||||||||||||
Less:
foreign currency effect | (131 | ) | — | (5 | ) | — | |||||||||||||||||||||||
Adjusted
Oil & Gas organic (Non-GAAP) | $ | 6,080 | $ | 5,486 | 11 | % | $ | 223 | $ | 212 | 5 | % | 3.7 | % | 3.9 | % | (0.2)pts | ||||||||||||
GE
Industrial segment (GAAP) | 27,071 | 27,195 | — | % | 2,359 | 2,969 | (21 | )% | 8.7 | % | 10.9 | % | (2)pts | ||||||||||||||||
Less:
restructuring & other (GE share) | (135 | ) | (148 | ) | |||||||||||||||||||||||||
Adjusted
GE Industrial segment (Non-GAAP) | 27,071 | 27,195 | — | % | 2,494 | 3,117 | (20 | )% | 9.2 | % | 11.5 | % | (2.3)pts | ||||||||||||||||
Less:
acquisitions | 20 | — | (4 | ) | — | ||||||||||||||||||||||||
Less:
business dispositions | — | 1,426 | (10 | ) | 136 | ||||||||||||||||||||||||
Less:
foreign currency effect | (637 | ) | — | 46 | — | ||||||||||||||||||||||||
GE
Industrial segment organic (Non-GAAP) | 27,688 | 25,769 | 7 | % | 2,463 | 2,981 | (17 | )% | 8.9 | % | 11.6 | % | (3)pts | ||||||||||||||||
We
believe that this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends. We also believe that presenting organic revenues* 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,
PROFIT (LOSS) AND PROFIT MARGIN BY SEGMENT (NON-GAAP) | |||||||||||||||||||||||||||||
Revenue | Segment profit (loss) | Profit margin | |||||||||||||||||||||||||||
Six months ended June 30 (In millions) | 2019 | 2018 | V% | 2019 | 2018 | V% | 2019 | 2018 | V
pts | ||||||||||||||||||||
Power
(GAAP) | $ | 9,298 | $ | 12,209 | (24 | )% | $ | 228 | $ | 654 | (65 | )% | 2.5 | % | 5.4 | % | (2.9)pts | ||||||||||||
Less:
acquisitions | — | — | — | — | |||||||||||||||||||||||||
Less:
business dispositions | 5 | 2,156 | (4 | ) | 160 | ||||||||||||||||||||||||
Less:
foreign currency effect | (376 | ) | — | 37 | — | ||||||||||||||||||||||||
Power
organic (Non-GAAP) | $ | 9,668 | $ | 10,053 | (4 | )% | $ | 194 | $ | 494 | (61 | )% | 2.0 | % | 4.9 | % | (2.9)pts | ||||||||||||
Renewable
Energy (GAAP) | $ | 6,165 | $ | 5,722 | 8 | % | $ | (371 | ) | $ | 196 | U | (6.0 | )% | 3.4 | % | (9.4)pts | ||||||||||||
Less:
acquisitions | 2 | — | 6 | — | |||||||||||||||||||||||||
Less:
business dispositions | — | — | — | (2 | ) | ||||||||||||||||||||||||
Less:
foreign currency effect | (369 | ) | — | 48 | — | ||||||||||||||||||||||||
Renewable
Energy organic (Non-GAAP) | $ | 6,532 | $ | 5,722 | 14 | % | $ | (425 | ) | $ | 198 | U | (6.5 | )% | 3.5 | % | (10)pts | ||||||||||||
Aviation
(GAAP) | $ | 15,831 | $ | 14,631 | 8 | % | $ | 3,046 | $ | 3,078 | (1 | )% | 19.2 | % | 21.0 | % | (1.8)pts | ||||||||||||
Less:
acquisitions | — | — | — | — | |||||||||||||||||||||||||
Less:
business dispositions | — | 105 | — | 14 | |||||||||||||||||||||||||
Less:
foreign currency effect | (16 | ) | — | 19 | — | ||||||||||||||||||||||||
Aviation
organic (Non-GAAP) | $ | 15,846 | $ | 14,526 | 9 | % | $ | 3,027 | $ | 3,063 | (1 | )% | 19.1 | % | 21.1 | % | (2)pts | ||||||||||||
Healthcare
(GAAP) | $ | 9,616 | $ | 9,680 | (1 | )% | $ | 1,740 | $ | 1,660 | 5 | % | 18.1 | % | 17.1 | % | 1pts | ||||||||||||
Less:
acquisitions | 40 | — | (10 | ) | — | ||||||||||||||||||||||||
Less:
business dispositions | — | 217 | (43 | ) | 51 | ||||||||||||||||||||||||
Less:
foreign currency effect | (270 | ) | — | — | — | ||||||||||||||||||||||||
Healthcare
organic (Non-GAAP) | $ | 9,847 | $ | 9,463 | 4 | % | $ | 1,793 | $ | 1,609 | 11 | % | 18.2 | % | 17.0 | % | 1.2pts | ||||||||||||
Oil
& Gas (GAAP) | $ | 11,569 | $ | 10,939 | 6 | % | $ | 245 | $ | (70 | ) | F | 2.1 | % | (0.6 | )% | 2.7pts | ||||||||||||
Less:
restructuring & other (GE share) | (194 | ) | (473 | ) | |||||||||||||||||||||||||
Adjusted
Oil & Gas (Non-GAAP) | 11,569 | 10,939 | 6 | % | 439 | 402 | 9 | % | 3.8 | % | 3.7 | % | 0.1pts | ||||||||||||||||
Less:
acquisitions | — | — | — | — | |||||||||||||||||||||||||
Less:
business dispositions | 4 | 112 | — | 19 | |||||||||||||||||||||||||
Less:
foreign currency effect | (286 | ) | — | (13 | ) | — | |||||||||||||||||||||||
Adjusted
Oil & Gas organic (Non-GAAP) | $ | 11,851 | $ | 10,827 | 9 | % | $ | 452 | $ | 383 | 18 | % | 3.8 | % | 3.5 | % | 0.3pts | ||||||||||||
GE
Industrial segment (GAAP) | 52,479 | 53,181 | (1 | )% | 4,887 | 5,518 | (11 | )% | 9.3 | % | 10.4 | % | (1.1)pts | ||||||||||||||||
Less:
restructuring & other (GE share) | (194 | ) | (473 | ) | |||||||||||||||||||||||||
Adjusted
GE Industrial segment (Non-GAAP) | 52,479 | 53,181 | (1 | )% | 5,081 | 5,990 | (15 | )% | 9.7 | % | 11.3 | % | (1.6)pts | ||||||||||||||||
Less:
acquisitions | 41 | — | (4 | ) | — | ||||||||||||||||||||||||
Less:
business dispositions | 9 | 2,590 | (46 | ) | 242 | ||||||||||||||||||||||||
Less:
foreign currency effect | (1,316 | ) | — | 91 | — | ||||||||||||||||||||||||
GE
Industrial segment organic (Non-GAAP) | 53,745 | 50,591 | 6 | % | 5,040 | 5,748 | (12 | )% | 9.4 | % | 11.4 | % | (2.0)pts | ||||||||||||||||
We
believe that this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends. We also believe that presenting organic revenues* 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. |
GAS POWER FIXED COSTS (NON-GAAP) | Three months ended June 30 | Six
months ended June 30 | |||||||||||||||
(Dollars in millions) | 2019 | 2018 | V% | 2019 | 2018 | V% | |||||||||||
Gas
Power total costs and expenses (GAAP) | $ | 3,097 | $ | 3,108 | — | % | $ | 6,266 | $ | 6,508 | (4 | )% | |||||
Less:
Gas Power variable costs (Non-GAAP) | 2,325 | 2,251 | 3 | % | 4,673 | 4,796 | (3 | )% | |||||||||
Gas
Power fixed costs (Non-GAAP) | $ | 772 | $ | 856 | (10 | )% | $ | 1,593 | $ | 1,712 | (7 | )% | |||||
We
believe that fixed costs* is a meaningful measure as it is broader than selling, general and administrative costs and represents the costs in the segments that generally do not vary with volume. | |||||||||||||||||
Segment variable costs* are those costs within our industrial segments that vary with volume. The most significant variable costs would be material and direct labor costs incurred to produce our products and deliver our services that are recorded in the Statement of Earnings line items of cost of goods and cost of services sold. |
GE
INDUSTRIAL FREE CASH FLOWS (FCF) AND ADJUSTED GE INDUSTRIAL FCF (NON-GAAP) | Three months ended June 30 | Six months ended June 30 | |||||||||||||||||
(Dollars in millions) | 2019 | 2018 | V$ | 2019 | 2018 | V$ | |||||||||||||
GE
CFOA (GAAP) | $ | 42 | $ | 268 | $ | (226 | ) | $ | (842 | ) | $ | (850 | ) | $ | 8 | ||||
Add:
gross additions to property, plant and equipment | (847 | ) | (741 | ) | (1,684 | ) | (1,595 | ) | |||||||||||
Add: gross additions to internal-use software | (89 | ) | (79 | ) | (163 | ) | (169 | ) | |||||||||||
Less:
GE Pension Plan funding | — | (634 | ) | — | (921 | ) | |||||||||||||
Less: taxes related to business sales | (100 | ) | (17 | ) | (108 | ) | (17 | ) | |||||||||||
GE
Industrial Free Cash Flows (Non-GAAP) | $ | (794 | ) | $ | 98 | $ | (893 | ) | $ | (2,581 | ) | $ | (1,675 | ) | $ | (906 | ) | ||
Less:
Oil & Gas CFOA | 593 | 142 | 410 | 433 | |||||||||||||||
Less: Oil & Gas gross additions to property, plant and equipment | (283 | ) | (226 | ) | (568 | ) | (399 | ) | |||||||||||
Less:
Oil & Gas gross additions to internal-use software | (18 | ) | (8 | ) | (26 | ) | (17 | ) | |||||||||||
Add: BHGE Class B shareholder dividend | 94 | 125 | 188 | 253 | |||||||||||||||
Adjusted
GE Industrial Free Cash Flows (Non-GAAP) | $ | (993 | ) | $ | 316 | $ | (1,308 | ) | $ | (2,209 | ) | $ | (1,440 | ) | $ | (768 | ) | ||
We
believe that this measure will better allow management and investors to evaluate the capacity of our industrial operations to generate free cash flows. In addition, we report Adjusted GE Industrial Free Cash Flows* in order to provide a more fair representation of the cash that we are entitled to utilize in a given period. We also use Adjusted GE Industrial Free Cash Flows* as a performance metric at the company-wide level for our annual executive incentive plan. |
2019 OPERATING FRAMEWORK:
2019 ADJUSTED EPS (NON-GAAP) | ||||||
We cannot provide a reconciliation of the differences between the non-GAAP expectations and corresponding GAAP measure for Adjusted EPS* in 2019 without unreasonable effort due to the uncertainty of timing of any gains or losses related to acquisitions & dispositions, the timing and magnitude of financial impacts related to our planned orderly separation of BHGE, the timing and magnitude of
the mark-to-market of our investment in Wabtec, and the timing and magnitude of restructuring expenses. Although we have attempted to estimate the amount of gains and restructuring charges for the purpose of explaining the probable significance of these components, this calculation involves a number of unknown variables, resulting in a GAAP range that we believe is too large and variable to be meaningful. |
2019 OPERATING FRAMEWORK: 2019 ADJUSTED GE INDUSTRIAL FREE CASH FLOWS (NON-GAAP) | |||||
We
cannot provide a reconciliation of the differences between the non-GAAP expectations and corresponding GAAP measure for Adjusted GE Industrial Free Cash Flows* in 2019 without unreasonable effort due to the uncertainty of timing of deal taxes related to business sales and in particular the timing of the planned orderly separation of BHGE. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results. |
• | our
success in executing and completing, including obtaining regulatory approvals and satisfying other closing conditions for, announced GE Industrial and GE Capital business or asset dispositions or other transactions, including the planned sale of our BioPharma business within our Healthcare segment and plans to exit our equity ownership positions in BHGE and Wabtec, the timing of closing for those transactions and the expected proceeds and benefits to GE; |
• | our de-leveraging and capital allocation plans, including with respect to actions to reduce our indebtedness, the timing and amount of GE dividends, organic investments, and other priorities; |
• | further
downgrades of our current short- and long-term credit ratings or ratings outlooks, or changes in rating application or methodology, and the related impact on our liquidity, funding profile, costs and competitive position; |
• | GE’s liquidity and the amount and timing of our GE Industrial cash flows and earnings, which may be impacted by customer, competitive, contractual and other dynamics and conditions; |
• | GE Capital's capital and liquidity needs, including in connection with GE Capital’s run-off insurance operations, the
amount and timing of required capital contributions and related strategic actions that we may pursue; the impact of conditions in the financial and credit markets on GE Capital's ability to sell financial assets; the availability and cost of funding; and GE Capital's exposure to particular counterparties and markets; |
• | the results of our annual GAAP premium deficiency testing for GE Capital’s run-off insurance operations, which we expect to be completed in the third quarter of 2019; |
• | changes in macroeconomic conditions,
particularly interest rates, as well as the value of stocks and other financial assets (including our equity ownership positions in BHGE and Wabtec), oil and other commodity prices and exchange rates; |
• | market developments or customer actions that may affect levels of demand and the financial performance of the major industries and customers we serve, such as secular and cyclical pressures in our Power business, pricing and other pressures in the renewable energy market, conditions in China and other key markets, early aircraft retirements, and other shifts in the competitive landscape for our products and services; |
• | operational
execution by our businesses, including our ability to improve the operations and execution of our Power business, execution by our Renewable Energy business, and the continued strength of our Aviation business; |
• | changes in law, regulation or policy that may affect our businesses, such as trade policy and tariffs, regulation related to climate change, and the effects of U.S. tax reform and other tax law changes; |
• | our decisions about investments in new products, services and platforms, and our ability to launch new products
in a cost-effective manner; |
• | our ability to increase margins through implementation of operational changes, restructuring and other cost reduction measures; |
• | the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of Alstom, SEC and other investigative and legal proceedings; |
• | the
impact of actual or potential failures of our products or our customers’ products, such as the fleet grounding of the Boeing 737 MAX, and related reputational effects; |
• | the impact of potential information technology, cybersecurity or data security breaches; |
• | the other factors that are described in "Forward-Looking Statements" in BHGE’s most recent earnings release or SEC filings; and |
• | the
other factors that are described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018, as updated in our Quarterly Reports on Form 10-Q. |
This ‘8-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
Filed on / For Period end: | 7/31/19 | 10-Q, 8-K | ||
6/30/19 | 10-Q, 13F-HR | |||
12/31/18 | 10-K, 11-K, 13F-HR, 4, SD | |||
6/30/18 | 10-Q, 13F-HR | |||
List all Filings |