December 31 (In millions) | 2017 | 2016 | ||||
Financing receivables and financing receivables held for sale | $ | (207 | ) | $ | (14 | ) |
Cost and equity method investments | (891 | ) | (44 | ) | ||
Long-lived assets | (819 | ) | (196 | ) | ||
Goodwill | (2,564 | ) | — | |||
Total | $ | (4,482 | ) | $ | (254 | ) |
CHANGES TO NONCONTROLLING INTERESTS | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
Balance at January 1 | $ | 1,663 | $ | 1,864 | $ | 8,674 | |||
Net earnings (loss) | (17 | ) | (46 | ) | 377 | ||||
GECC preferred stock(a) | — | — | (4,949 | ) | |||||
GECC preferred stock dividend | — | — | (311 | ) | |||||
Dividends | (222 | ) | (72 | ) | (43 | ) | |||
Dispositions | (92 | ) | (232 | ) | 189 | ||||
Synchrony Financial(b) | — | — | (2,840 | ) | |||||
Other (including AOCI)(c)(d)(e)(f)(g) | 16,390 | 150 | 767 | ||||||
Balance at December 31 | $ | 17,723 | $ | 1,663 | $ | 1,864 |
(a) | In 2015, included $(4,949) million related to the issuance of GE preferred stock in exchange for existing GECC preferred stock. GE preferred stock is reflected in shareowners’ equity in the consolidated Statement of Financial Position. |
(b) | Related to the split-off of Synchrony Financial from GE in 2015, where GE shares were exchanged for shares of Synchrony Financial; related to the Synchrony Financial IPO in 2014. |
(c) | In 2017, included $16,462 million related to Baker Hughes transaction. See Note 8 for further information. |
(d) | In 2016, included $155 million related to Arcam AB acquisition in our Aviation segment. |
(e) | In 2016, included $(123) million for deconsolidation of investment funds managed by GE Asset Management (GEAM) upon the adoption of ASU 2015-2, Amendments to the Consolidation Analysis. |
(f) | In 2015, included $695 million related to the Alstom acquisition. |
(g) | Includes research & development partner funding arrangements, acquisitions and eliminations. |
(In millions) | 2017 | 2016 | 2015 | ||||||
GE | $ | 1,783 | $ | 1,686 | $ | 1,397 | |||
GE Capital | 105 | 91 | 107 | ||||||
1,888 | 1,777 | 1,504 | |||||||
Eliminations | (143 | ) | (126 | ) | (169 | ) | |||
Total | $ | 1,746 | $ | 1,651 | $ | 1,335 |
(In millions) | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||
GE | $ | 1,189 | $ | 1,011 | $ | 849 | $ | 736 | $ | 630 | |||||
GE Capital | 27 | 23 | 22 | 22 | 56 | ||||||||||
1,216 | 1,035 | 871 | 758 | 686 | |||||||||||
Eliminations | (135 | ) | (127 | ) | (123 | ) | (120 | ) | (108 | ) | |||||
Total | $ | 1,081 | $ | 908 | $ | 748 | $ | 638 | $ | 578 |
Interest and other financial charges | Benefit (provision) for income taxes | ||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||
Capital | $ | 3,145 | $ | 3,790 | $ | 2,301 | $ | 6,302 | $ | 1,431 | $ | (4,979 | ) | ||||||
Corporate items and eliminations(a) | 1,724 | 1,234 | 1,162 | (3,259 | ) | (967 | ) | (1,506 | ) | ||||||||||
Total | $ | 4,869 | $ | 5,025 | $ | 3,463 | $ | 3,043 | $ | 464 | $ | (6,485 | ) |
(a) | Included amounts for Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation and Lighting, for which our measure of segment profit excludes interest and other financial charges and income taxes. |
NET INVESTMENT IN FINANCING LEASES | ||||||||||||||||||||
Total financing leases | Direct financing leases(a) | Leveraged leases(b) | ||||||||||||||||||
December 31 (In millions) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
Total minimum lease payments receivable | $ | 4,637 | $ | 5,466 | $ | 2,952 | $ | 3,274 | $ | 1,685 | $ | 2,191 | ||||||||
Less principal and interest on third-party non-recourse debt | (638 | ) | (1,053 | ) | — | — | (638 | ) | (1,053 | ) | ||||||||||
Net rentals receivable | 3,999 | 4,412 | 2,952 | 3,274 | 1,047 | 1,138 | ||||||||||||||
Estimated unguaranteed residual value of leased assets | 1,590 | 1,985 | 743 | 927 | 847 | 1,058 | ||||||||||||||
Less deferred income | (975 | ) | (1,400 | ) | (614 | ) | (909 | ) | (361 | ) | (491 | ) | ||||||||
Investment in financing leases, net of deferred income(c) | $ | 4,614 | $ | 4,998 | $ | 3,081 | $ | 3,292 | $ | 1,533 | $ | 1,706 |
(a) | Included $22 million and $30 million of initial direct costs on direct financing leases at December 31, 2017 and 2016, respectively. |
(b) | Included pre-tax income of $78 million and $74 million and income tax of $30 million and $28 million during 2017 and 2016, respectively. Net investment credits recognized on leveraged leases during 2017 and 2016 were insignificant. |
(c) | See Note 13 for deferred tax amounts related to financing leases. |
Remeasured during the years ended December 31 | |||||||||||||
2017 | 2016 | ||||||||||||
(In millions) | Level 2 | Level 3 | Level 2 | Level 3 | |||||||||
Financing receivables and financing receivables held for sale | $ | — | $ | 1,541 | $ | — | $ | 30 | |||||
Cost and equity method investments | — | 2,076 | — | 103 | |||||||||
Long-lived assets | 177 | 591 | 17 | 1,055 | |||||||||
Goodwill | — | — | — | — | |||||||||
Total | $ | 177 | $ | 4,208 | $ | 17 | $ | 1,189 |
(In millions) | |||
Due in | |||
2018 | $ | 3,298 | |
2019 | 2,902 | ||
2020 | 2,597 | ||
2021 | 2,204 | ||
2022 | 1,815 | ||
2023 and later | 5,590 | ||
Total | $ | 18,407 |
ROLLFORWARD OF THE RESERVE | ||||||
(In millions) | 2017 | 2016 | ||||
Balance at January 1 | $ | 626 | $ | 875 | ||
Provision | 51 | 91 | ||||
Claim resolutions / rescissions | (261 | ) | (340 | ) | ||
Balance at December 31 | $ | 416 | $ | 626 |
December 31 (In millions) | 2017 | 2016 | ||||
Prior service credit | $ | (2,814 | ) | $ | (2,975 | ) |
Net actuarial gain | (732 | ) | (682 | ) | ||
Total | $ | (3,546 | ) | $ | (3,657 | ) |
Principal pension plans | Other pension plans | ||||||||||||
December 31 (in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||
Prior service cost (credit) | $ | 784 | $ | 1,138 | $ | (100 | ) | $ | (88 | ) | |||
Net actuarial loss | 14,326 | 16,664 | 3,712 | 4,800 | |||||||||
Total | $ | 15,110 | $ | 17,802 | $ | 3,612 | $ | 4,712 |
FINANCIAL INFORMATION FOR ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Assets | ||||||
Current receivables(a) | $ | 703 | $ | 366 | ||
Inventories | 1,039 | 211 | ||||
Property, plant, and equipment – net | 931 | 632 | ||||
Goodwill | 1,619 | 212 | ||||
Other intangible assets – net | 403 | 123 | ||||
Contract assets | 858 | 125 | ||||
Valuation allowance on disposal group classified as held for sale(b) | (1,378 | ) | — | |||
Other | 67 | 76 | ||||
Assets of businesses held for sale | $ | 4,243 | $ | 1,745 | ||
Liabilities | ||||||
Accounts payable | $ | 602 | $ | 190 | ||
Progress collections and price adjustments accrued | 38 | 141 | ||||
Other current liabilities | 450 | 133 | ||||
Non-current compensation and benefits | 162 | 82 | ||||
Other | 87 | 110 | ||||
Liabilities of businesses held for sale | $ | 1,339 | $ | 656 |
(a) | Included transactions in our industrial businesses that were made on arm's length terms with GE Capital, including GE current receivables sold to GE Capital of $366 million and $117 million at December 31, 2017 and December 31, 2016, respectively. These intercompany balances included within our held for sale businesses are reported in the GE and GE Capital columns of our financial statements, but are eliminated in deriving our consolidated financial statements. |
(b) | During the fourth quarter of 2017, we adjusted the carrying value to fair value less cost to sell for certain held for sale businesses, which resulted in a pre-tax valuation allowance of $1,378 million recorded in the caption “Other income” in our consolidated Statement of Earnings (Loss). |
2017 | 2016 | ||||||||||||
December 31 (In millions) | Carrying amount (net) | Estimated fair value | Carrying amount (net) | Estimated fair value | |||||||||
GE | |||||||||||||
Assets | |||||||||||||
Investments and notes receivable | $ | 1,341 | $ | 1,418 | $ | 1,526 | $ | 1,595 | |||||
Liabilities | |||||||||||||
Borrowings(a)(b) | 34,473 | 35,416 | 19,184 | 19,923 | |||||||||
Borrowings (debt assumed)(a)(c) | 47,114 | 53,502 | 60,109 | 66,998 | |||||||||
GE Capital | |||||||||||||
Assets | |||||||||||||
Loans | 17,363 | 17,331 | 21,060 | 20,830 | |||||||||
Other commercial mortgages | 1,489 | 1,566 | 1,410 | 1,472 | |||||||||
Loans held for sale | 3,274 | 3,274 | 473 | 473 | |||||||||
Other financial instruments(d) | 112 | 147 | 121 | 150 | |||||||||
Liabilities | |||||||||||||
Borrowings(a)(e)(f)(g) | 55,353 | 60,415 | 58,523 | 62,024 | |||||||||
Investment contracts | 2,569 | 2,996 | 2,813 | 3,277 |
(a) | See Note 10. |
(b) | Included $217 million and $115 million of accrued interest in estimated fair value at December 31, 2017 and December 31, 2016, respectively. |
(c) | Included $696 million and $803 million of accrued interest in estimated fair value at December 31, 2017 and December 31, 2016, respectively. |
(d) | Principally comprises cost method investments. |
(e) | Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of borrowings at December 31, 2017 and December 31, 2016 would have been reduced by $1,754 million and $2,397 million, respectively. |
(f) | Included $731 million and $775 million of accrued interest in estimated fair value at December 31, 2017 and December 31, 2016, respectively. |
(g) | Excluded $39,844 million and $58,780 million of net intercompany payable to GE at December 31, 2017 and December 31, 2016, respectively. |
December 31 (In millions) | 2017 | 2016 | ||||
Future policy benefit reserves | ||||||
Long-term care insurance contracts | $ | 16,522 | $ | 7,629 | ||
Structured settlement annuities with life contingencies and other contracts | 9,448 | 9,267 | ||||
Shadow adjustments(a) | 4,582 | 1,845 | ||||
30,552 | 18,741 | |||||
Investment contracts | 2,569 | 2,813 | ||||
Claim reserves(b) | 5,094 | 4,606 | ||||
Unearned premiums and other | 372 | 386 | ||||
38,587 | 26,546 | |||||
Eliminations | (451 | ) | (460 | ) | ||
Total | $ | 38,136 | $ | 26,086 |
(a) | To the extent that unrealized gains on specific investment securities supporting our insurance contracts would result in a premium deficiency should those gains be realized, an increase in future policy benefit reserves is recorded, with an after-tax reduction of net unrealized gains recognized through Other comprehensive income. |
(b) | Included $3,590 million and $3,129 million related to long term-care insurance contracts and $364 million and $362 million related to short-duration contracts, net of eliminations, at December 31, 2017 and December 31, 2016, respectively. |
LEVEL 3 MEASUREMENTS - SIGNIFICANT UNOBSERVABLE INPUTS | ||||||
(Dollars in millions) | Fair value | Valuation technique | Unobservable inputs | Range (weighted-average) | ||
December 31, 2017 | ||||||
Recurring fair value measurements | ||||||
Investment securities(b) | $ | 903 | Income approach | Discount rate(a) | 3.0%-12.6% (6.2%) | |
Nonrecurring fair value measurements | ||||||
Financing receivables | $ | 1,532 | Income approach | Discount rate(a) | 3.2%-16.5% (10.0%) | |
Cost and equity method investments | 2,037 | Income approach | Discount rate(a) | 5.0%-50.00% (7.7%) | ||
Long-lived assets | 554 | Income approach | Discount rate(a) | 2.7%-18.0% (7.3%) | ||
December 31, 2016 | ||||||
Recurring fair value measurements | ||||||
Investment securities(b) | $ | 830 | Income approach | Discount rate(a) | 1.4%-17.4% (7.9%) | |
Nonrecurring fair value measurements | ||||||
Financing receivables | $ | 30 | Income approach | Discount rate(a) | 2.5%-30.0% (20.3%) | |
Cost and equity method investments | 94 | Income approach, | Discount rate(a) | 9.0%-30.0% (11.8%) | ||
Long-lived assets | 683 | Income approach | Discount rate(a) | 2.5%-20.0% (10.4%) |
(a) | Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value. |
(b) | Comprises substantially all of U.S. corporate securities |
(In millions) | 2017 | 2016 | ||||
Revenues and other income | $ | 126,755 | $ | 133,526 | ||
Earnings (loss) from continuing operations | (5,817 | ) | 6,379 |
For the years ended December 31 (In millions) | 2017 | 2016 | 2015 | ||||||
All other operating activities | |||||||||
(Gains) losses on purchases and sales of business interests(a) | $ | (656 | ) | $ | (3,701 | ) | $ | (1,020 | ) |
Contract assets (net)(b) | (3,988 | ) | (3,929 | ) | (1,919 | ) | |||
Income taxes(c) | 110 | (2,752 | ) | 1,671 | |||||
Principal pension plans(d) | 1,709 | 3,071 | 4,265 | ||||||
Other postretirement benefit plans(e) | (888 | ) | (716 | ) | (503 | ) | |||
Intangible asset amortization | 2,154 | 2,011 | 1,514 | ||||||
Restructuring and other charges(f) | 3,162 | 1,702 | 637 | ||||||
Deferred income | 55 | (371 | ) | (86 | ) | ||||
Net earnings (loss) attributable to noncontrolling interests | (274 | ) | (279 | ) | 83 | ||||
Other(g) | (562 | ) | (2,474 | ) | (2,559 | ) | |||
$ | 822 | $ | (7,438 | ) | $ | 2,083 | |||
All other investing activities | |||||||||
Derivative settlements (net)(h) | $ | (1,142 | ) | $ | — | $ | — | ||
Investments in intangible assets (net) | (321 | ) | (499 | ) | (158 | ) | |||
Investments in associated companies (net) | (226 | ) | (420 | ) | (182 | ) | |||
Other investments (net) | (272 | ) | (175 | ) | (181 | ) | |||
Other(i) | (136 | ) | (558 | ) | (32 | ) | |||
$ | (2,097 | ) | $ | (1,652 | ) | $ | (553 | ) | |
Net dispositions (purchases) of GE shares for treasury | |||||||||
Open market purchases under share repurchase program(j) | $ | (3,506 | ) | $ | (22,581 | ) | $ | (2,709 | ) |
Other purchases | (67 | ) | (399 | ) | (58 | ) | |||
Dispositions | 1,021 | 1,550 | 1,668 | ||||||
$ | (2,550 | ) | $ | (21,429 | ) | $ | (1,099 | ) |
(a) | Included pre-tax gains on sales of businesses reclassified to Proceeds from principal business dispositions within Cash flows from investing activities of $(1,943) million for Water in 2017, $(3,136) million for Appliances and $(398) million for GE Asset Management in 2016, and $(623) million for Signaling in 2015, partially offset by a valuation allowance on businesses classified as held for sale of $1,378 million in 2017. See Notes 2 and 17. |
(b) | Contract assets are presented net of related billings in excess of revenues on our long-term product service agreements. See Note 9. |
(c) | Reflected the effects of current tax expense (benefit) of $2,810 million, $(140) million and $3,307 million and net cash paid during the year for income taxes of $(2,700) million, $(2,612) million and $(1,636) million for the years ended December 31, 2017, 2016 and 2015, respectively. Cash flows effects of deferred tax provisions (benefits) are shown separately within Cash flows from operating activities in the Statement of Cash Flows. See Note 13. |
(d) | Reflected the effects of pension costs of $3,687 million, $3,623 million and $4,498 million and employer contributions of $(1,978) million, $(552) million and $(233) million for the years ended December 31, 2017, 2016 and 2015, respectively. 2016 employer contributions included GE Pension Trust funding of $(330) million representing net sale proceeds associated with the sale of GE Asset Management. See Note12. |
(e) | Reflected the effects of other postretirement plans costs of $369 million, $489 million and $547 million and employer contributions of $(1,257) million, $(1,205) million and $(1,050) million for the years ended December 31, 2017, 2016 and 2015, respectively. See Note 12. |
(f) | Reflected the effects of restructuring and other charges of $5,158 million (which included pre-tax impairments related to Power Conversion goodwill of $1,164 million and a power plant asset of $315 million), $3,384 million and $1,671 million and restructuring and other cash expenditures of $(1,996) million, $(1,682) million and $(1,034) million for the years ended December 31, 2017, 2016 and 2015, respectively. Excludes non-cash adjustments reflected as Depreciation and amortization of property, plant and equipment in the Statement of Cash Flows. |
(g) | Included other non-cash adjustments to net income, such as write-downs of assets and the impacts of acquisition accounting and changes in other assets and other liabilities classified as operating activities. |
(h) | The classification of the settlement of derivative instruments was corrected from operating cash flows to investing cash flows in 2017. Such settlements of $178 million and $(199) million in 2016 and 2015, respectively, were not reclassified and corrected in investing cash flows in those periods as they were not considered material. |
(i) | Primarily included cash collateral held on long-term financing arrangements in 2016. |
(j) | Included $(11,370) million paid under ASR agreements in 2016. |
For the years ended December 31 (In millions) | 2017 | 2016 | 2015 | ||||||
All other operating activities | |||||||||
Cash collateral on derivative contracts | $ | 131 | $ | (428 | ) | $ | (1,936 | ) | |
Increase (decrease) in other liabilities | (1,566 | ) | (2,616 | ) | 4,860 | ||||
Other(a) | 13,237 | (10 | ) | 2,163 | |||||
$ | 11,802 | $ | (3,054 | ) | $ | 5,087 | |||
Net decrease (increase) in GE Capital financing receivables | |||||||||
Increase in loans to customers | $ | (41,393 | ) | $ | (65,055 | ) | $ | (65,306 | ) |
Principal collections from customers - loans | 43,613 | 60,375 | 60,292 | ||||||
Investment in equipment for financing leases | (585 | ) | (690 | ) | (417 | ) | |||
Principal collections from customers - financing leases | 1,011 | 856 | 734 | ||||||
Sales of financing receivables | 251 | 3,235 | 4,923 | ||||||
$ | 2,897 | $ | (1,279 | ) | $ | 226 | |||
All other investing activities | |||||||||
Purchases of investment securities | $ | (2,867 | ) | $ | (18,588 | ) | $ | (7,790 | ) |
Dispositions and maturities of investment securities | 10,001 | 7,343 | 9,587 | ||||||
Decrease (increase) in other assets - investments | (8,457 | ) | 9,202 | (1,439 | ) | ||||
Other(b) | 4,375 | 3,690 | (5,025 | ) | |||||
$ | 3,052 | $ | 1,647 | $ | (4,667 | ) | |||
Repayments and other reductions (maturities longer than 90 days) | |||||||||
Short-term (91 to 365 days) | $ | (18,591 | ) | $ | (44,519 | ) | $ | (42,110 | ) |
Long-term (longer than one year) | (2,054 | ) | (13,418 | ) | (2,455 | ) | |||
Principal payments - non-recourse, leveraged leases | (362 | ) | (348 | ) | (283 | ) | |||
$ | (21,007 | ) | $ | (58,285 | ) | $ | (44,848 | ) | |
All other financing activities | |||||||||
Proceeds from sales of investment contracts | $ | 10 | $ | 19 | $ | 163 | |||
Redemption of investment contracts | (344 | ) | (346 | ) | (1,235 | ) | |||
Other | 54 | (800 | ) | (290 | ) | ||||
$ | (280 | ) | $ | (1,127 | ) | $ | (1,362 | ) |
(a) | Primarily included non-cash adjustments for insurance-related charges recorded in the fourth quarter of 2017. |
(b) | Primarily included net activity related to settlements between our continuing operations (primarily our treasury operations) and businesses in discontinued operations. |
2017 | 2016 | 2015 | |||||||
Stock options exercised (in thousands) | 30,774 | 56,973 | 65,764 | ||||||
Cash received from stock options exercised (in millions) | $ | 528 | $ | 1,037 | $ | 1,098 |
(In millions) | 2017 | 2016 | 2015 | ||||||
Income tax benefit recognized in earnings | $ | 138 | $ | 274 | $ | 148 | |||
Excess of actual tax deductions over amounts assumed recognized in equity(a) | — | — | 167 |
(a) | We adopted ASU 2016-09 in September 2016. The primary effects of adoption were the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital and the reclassification of cash flows related to excess tax benefits from financing activities to operating activities for the periods beginning January 1, 2016. See Note 1 for further information. |
(In millions) | 2017 | 2016 | 2015 | ||||||
Balance at January 1 | $ | 1,920 | $ | 1,723 | $ | 1,199 | |||
Current-year provisions | 985 | 791 | 649 | ||||||
Expenditures | (827 | ) | (729 | ) | (718 | ) | |||
Other changes(a) | 286 | 135 | 593 | ||||||
Balance at December 31 | $ | 2,364 | $ | 1,920 | $ | 1,723 |
(a) | Included $634 million related to Alstom acquisition in 2015, and $172 million related to Baker Hughes and LM Wind Power acquisitions in 2017. |
ROLLFORWARD OF THE RESERVE | ||||||
(In millions) | 2017 | 2016 | ||||
Balance at January 1 | $ | 626 | $ | 875 | ||
Provision | 51 | 91 | ||||
Claim resolutions / rescissions | (261 | ) | (340 | ) | ||
Balance at December 31 | $ | 416 | $ | 626 |
• | General Electric Company (the Parent Company Guarantor) - prepared with investments in subsidiaries accounted for under the equity method of accounting and excluding any inter-segment eliminations; |
• | GE Capital International Funding Company Unlimited Company (the Subsidiary Issuer) – finance subsidiary for debt; |
• | GE Capital International Holdings Limited (GECIHL) (the Subsidiary Guarantor) - prepared with investments in non-guarantor subsidiaries accounted for under the equity method of accounting; |
• | Non-Guarantor Subsidiaries - prepared on an aggregated basis excluding any elimination or consolidation adjustments and includes predominantly all non-cash adjustments for cash flows; |
• | Consolidating Adjustments - adjusting entries necessary to consolidate the Parent Company Guarantor with the Subsidiary Issuer, the Subsidiary Guarantor and Non-Guarantor Subsidiaries; and |
• | Consolidated - prepared on a consolidated basis. |
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2017 | ||||||||||||||||||
(in millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Revenues and other income | ||||||||||||||||||
Sales of goods and services | $ | 35,551 | $ | — | $ | — | $ | 161,158 | $ | (83,518 | ) | $ | 113,192 | |||||
Other income | 3,769 | — | — | 76,453 | (78,597 | ) | 1,625 | |||||||||||
Equity in earnings (loss) of affiliates | 2,014 | — | 1,938 | 109,525 | (113,477 | ) | — | |||||||||||
GE Capital revenues from services | — | 703 | 800 | 9,888 | (4,115 | ) | 7,276 | |||||||||||
Total revenues and other income | 41,335 | 703 | 2,737 | 357,024 | (279,706 | ) | 122,092 | |||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 4,396 | 652 | 2,006 | 4,928 | (7,112 | ) | 4,869 | |||||||||||
Other costs and expenses | 36,013 | — | 18 | 175,648 | (85,665 | ) | 126,014 | |||||||||||
Total costs and expenses | 40,409 | 653 | 2,023 | 180,576 | (92,778 | ) | 130,883 | |||||||||||
Earnings (loss) from continuing operations before income taxes | 926 | 50 | 714 | 176,447 | (186,929 | ) | (8,791 | ) | ||||||||||
Benefit (provision) for income taxes | (2,896 | ) | (5 | ) | 115 | 5,921 | (92 | ) | 3,043 | |||||||||
Earnings (loss) from continuing operations | (1,969 | ) | 45 | 829 | 182,368 | (187,020 | ) | (5,748 | ) | |||||||||
Earnings (loss) from discontinued operations, net of taxes | (319 | ) | — | 41 | 4 | (35 | ) | (309 | ) | |||||||||
Net earnings (loss) | (2,288 | ) | 45 | 870 | 182,372 | (187,055 | ) | (6,056 | ) | |||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | (137 | ) | (133 | ) | (270 | ) | |||||||||
Net earnings (loss) attributable to the Company | (2,288 | ) | 45 | 870 | 182,509 | (186,922 | ) | (5,786 | ) | |||||||||
Other comprehensive income | 4,202 | 0 | 567 | (7,474 | ) | 6,908 | 4,202 | |||||||||||
Comprehensive income (loss) attributable to the Company | $ | 1,914 | $ | 45 | $ | 1,436 | $ | 175,035 | $ | (180,014 | ) | $ | (1,584 | ) |
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2016 | ||||||||||||||||||
(in millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Revenues and other income | ||||||||||||||||||
Sales of goods and services | $ | 40,315 | $ | — | $ | — | $ | 152,047 | $ | (81,971 | ) | $ | 110,391 | |||||
Other income | 10,949 | — | — | 63,363 | (70,308 | ) | 4,005 | |||||||||||
Equity in earnings (loss) of affiliates | 1,397 | — | 1,542 | 116,897 | (119,836 | ) | — | |||||||||||
GE Capital revenues from services | — | 897 | 1,419 | 12,994 | (6,012 | ) | 9,297 | |||||||||||
Total revenues and other income | 52,661 | 897 | 2,961 | 345,301 | (278,127 | ) | 123,693 | |||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 3,505 | 831 | 2,567 | 5,429 | (7,308 | ) | 5,025 | |||||||||||
Other costs and expenses | 41,972 | — | 143 | 168,245 | (100,722 | ) | 109,638 | |||||||||||
Total costs and expenses | 45,478 | 831 | 2,711 | 173,674 | (108,030 | ) | 114,663 | |||||||||||
Earnings (loss) from continuing operations before income taxes | 7,183 | 66 | 250 | 171,627 | (170,097 | ) | 9,030 | |||||||||||
Benefit (provision) for income taxes | 2,539 | (10 | ) | (105 | ) | (1,911 | ) | (49 | ) | 464 | ||||||||
Earnings (loss) from continuing operations | 9,723 | 56 | 145 | 169,717 | (170,146 | ) | 9,494 | |||||||||||
Earnings (loss) from discontinued operations, net of taxes | (891 | ) | — | (1,927 | ) | 351 | 1,514 | (954 | ) | |||||||||
Net earnings (loss) | 8,831 | 56 | (1,782 | ) | 170,067 | (168,632 | ) | 8,540 | ||||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | (149 | ) | (142 | ) | (291 | ) | |||||||||
Net earnings (loss) attributable to the Company | 8,831 | 56 | (1,782 | ) | 170,216 | (168,490 | ) | 8,831 | ||||||||||
Other comprehensive income | (2,069 | ) | (12 | ) | 1,126 | (3,393 | ) | 2,279 | (2,069 | ) | ||||||||
Comprehensive income (loss) attributable to the Company | $ | 6,762 | $ | 44 | $ | (657 | ) | $ | 166,823 | $ | (166,211 | ) | $ | 6,762 |
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2015 | ||||||||||||||||||
(in millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Revenues and other income | ||||||||||||||||||
Sales of goods and services | $ | 43,945 | $ | — | $ | — | $ | 139,158 | $ | (77,294 | ) | $ | 105,809 | |||||
Other income | 2,725 | — | — | 31,146 | (31,644 | ) | 2,227 | |||||||||||
Equity in earnings (loss) of affiliates | 1,815 | — | 437 | 389,796 | (392,048 | ) | — | |||||||||||
GE Capital revenues from services | — | 250 | (460 | ) | 36,909 | (27,349 | ) | 9,350 | ||||||||||
Total revenues and other income | 48,485 | 250 | (23 | ) | 597,009 | (528,335 | ) | 117,386 | ||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 3,127 | 232 | 284 | 9,037 | (9,216 | ) | 3,463 | |||||||||||
Other costs and expenses | 45,308 | — | 3 | 163,220 | (102,795 | ) | 105,737 | |||||||||||
Total costs and expenses | 48,435 | 232 | 287 | 172,257 | (112,011 | ) | 109,200 | |||||||||||
Earnings (loss) from continuing operations before income taxes | 50 | 18 | (310 | ) | 424,752 | (416,324 | ) | 8,186 | ||||||||||
Benefit (provision) for income taxes | 1,314 | (2 | ) | (9 | ) | (11,426 | ) | 3,639 | (6,485 | ) | ||||||||
Earnings (loss) from continuing operations | 1,364 | 15 | (319 | ) | 413,326 | (412,686 | ) | 1,700 | ||||||||||
Earnings (loss) from discontinued operations, net of taxes | (7,490 | ) | — | 483 | (738 | ) | 250 | (7,495 | ) | |||||||||
Net earnings (loss) | (6,126 | ) | 15 | 164 | 412,588 | (412,436 | ) | (5,795 | ) | |||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | 249 | 82 | 332 | ||||||||||||
Net earnings (loss) attributable to the Company | (6,126 | ) | 15 | 164 | 412,339 | (412,518 | ) | (6,126 | ) | |||||||||
Other comprehensive income | 1,644 | 12 | 1,377 | (4,843 | ) | 3,454 | 1,644 | |||||||||||
Comprehensive income (loss) attributable to the Company | $ | (4,483 | ) | $ | 27 | $ | 1,542 | $ | 407,496 | $ | (409,065 | ) | $ | (4,483 | ) |
CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION | ||||||||||||||||||
DECEMBER 31, 2017 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Assets | ||||||||||||||||||
Cash and equivalents | $ | 3,275 | $ | — | $ | 3 | $ | 40,768 | $ | (747 | ) | $ | 43,299 | |||||
Investment securities | 1 | — | — | 39,809 | (1,113 | ) | 38,696 | |||||||||||
Receivables - net | 50,923 | 17,316 | 32,381 | 87,776 | (147,321 | ) | 41,076 | |||||||||||
Inventories | 4,829 | — | — | 22,246 | (5,152 | ) | 21,923 | |||||||||||
Property, plant and equipment - net | 5,808 | — | — | 48,516 | (450 | ) | 53,874 | |||||||||||
Investment in subsidiaries(a) | 289,469 | — | 77,488 | 715,936 | (1,082,893 | ) | — | |||||||||||
Goodwill and intangible assets | 8,014 | — | — | 90,226 | 6,002 | 104,242 | ||||||||||||
All other assets | 30,688 | 16 | 32 | 237,231 | (199,044 | ) | 68,923 | |||||||||||
Assets of discontinued operations | — | — | — | — | 5,912 | 5,912 | ||||||||||||
Total assets | $ | 393,008 | $ | 17,332 | $ | 109,904 | $ | 1,282,507 | $ | (1,424,806 | ) | $ | 377,945 | |||||
Liabilities and equity | ||||||||||||||||||
Short-term borrowings | $ | 191,807 | $ | — | $ | 46,033 | $ | 22,603 | $ | (236,407 | ) | $ | 24,036 | |||||
Accounts payable | 7,930 | — | — | 77,507 | (70,284 | ) | 15,153 | |||||||||||
Other current liabilities | 11,408 | 8 | 3 | 26,666 | 126 | 38,211 | ||||||||||||
Long-term and non-recourse borrowings | 71,023 | 16,632 | 34,730 | 55,367 | (67,197 | ) | 110,556 | |||||||||||
All other liabilities | 43,078 | 475 | 128 | 67,845 | (7,627 | ) | 103,899 | |||||||||||
Liabilities of discontinued operations | — | — | — | — | 706 | 706 | ||||||||||||
Total Liabilities | 325,247 | 17,116 | 80,894 | 249,988 | (380,684 | ) | 292,561 | |||||||||||
Redeemable noncontrolling interests | — | — | — | 2,627 | 772 | 3,399 | ||||||||||||
GE shareowners' equity | 67,761 | 216 | 29,010 | 1,028,337 | (1,061,061 | ) | 64,263 | |||||||||||
Noncontrolling interests | — | — | — | 1,556 | 16,167 | 17,723 | ||||||||||||
Total equity | 67,761 | 216 | 29,010 | 1,029,892 | (1,044,894 | ) | 81,986 | |||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 393,008 | $ | 17,332 | $ | 109,904 | $ | 1,282,507 | $ | (1,424,806 | ) | $ | 377,945 |
(a) | Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of $15,225 million and net assets of discontinued operations of $4,318 million. |
CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION | ||||||||||||||||||
DECEMBER 31, 2016 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Assets | ||||||||||||||||||
Cash and equivalents | $ | 2,558 | $ | — | $ | 3 | $ | 46,994 | $ | (1,426 | ) | $ | 48,129 | |||||
Investment securities | 1 | — | — | 47,394 | (3,082 | ) | 44,313 | |||||||||||
Receivables - net | 63,620 | 17,157 | 30,470 | 79,401 | (148,385 | ) | 42,263 | |||||||||||
Inventories | 4,654 | — | — | 21,076 | (3,377 | ) | 22,354 | |||||||||||
Property, plant and equipment - net | 5,768 | — | — | 46,366 | (1,615 | ) | 50,518 | |||||||||||
Investment in subsidiaries(a) | 272,685 | — | 80,481 | 492,674 | (845,840 | ) | — | |||||||||||
Goodwill and intangible assets | 8,128 | — | — | 42,074 | 36,673 | 86,875 | ||||||||||||
All other assets | 14,692 | 44 | 39 | 201,276 | (160,134 | ) | 55,917 | |||||||||||
Assets of discontinued operations | — | — | — | — | 14,815 | 14,815 | ||||||||||||
Total assets | $ | 372,107 | $ | 17,202 | $ | 110,992 | $ | 977,255 | $ | (1,112,372 | ) | $ | 365,183 | |||||
Liabilities and equity | ||||||||||||||||||
Short-term borrowings | $ | 167,089 | $ | 1 | $ | 46,432 | $ | 25,919 | $ | (208,727 | ) | $ | 30,714 | |||||
Accounts payable | 5,412 | — | — | 47,366 | (38,343 | ) | 14,435 | |||||||||||
Other current liabilities | 11,072 | 33 | 117 | 25,095 | 114 | 36,431 | ||||||||||||
Long-term and non-recourse borrowings | 68,983 | 16,486 | 34,389 | 68,912 | (83,273 | ) | 105,496 | |||||||||||
All other liabilities | 43,722 | 511 | 481 | 58,376 | (9,656 | ) | 93,434 | |||||||||||
Liabilities of discontinued operations | — | — | — | — | 4,158 | 4,158 | ||||||||||||
Total Liabilities | 296,279 | 17,030 | 81,419 | 225,667 | (335,727 | ) | 284,668 | |||||||||||
Redeemable noncontrolling interests | — | — | — | 2,223 | 802 | 3,025 | ||||||||||||
GE shareowners' equity | 75,828 | 171 | 29,573 | 747,719 | (777,463 | ) | 75,828 | |||||||||||
Noncontrolling interests | — | — | — | 1,647 | 16 | 1,663 | ||||||||||||
Total equity | 75,828 | 171 | 29,573 | 749,366 | (777,447 | ) | 77,491 | |||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 372,107 | $ | 17,202 | $ | 110,992 | $ | 977,255 | $ | (1,112,372 | ) | $ | 365,183 |
(a) | Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of $28,516 million and net assets of discontinued operations of $6,012 million. |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2017 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows – operating activities | ||||||||||||||||||
Cash from (used for) operating activities - continuing operations | $ | (35,701 | ) | $ | 52 | $ | 4,305 | $ | 257,663 | $ | (214,924 | ) | $ | 11,394 | ||||
Cash from (used for) operating activities - discontinued operations | (319 | ) | — | — | (656 | ) | 6 | (968 | ) | |||||||||
Cash from (used for) operating activities | (36,020 | ) | 52 | 4,305 | 257,007 | (214,918 | ) | 10,426 | ||||||||||
Cash flows – investing activities | ||||||||||||||||||
Cash from (used for) investing activities – continuing operations | 2,469 | (52 | ) | (1,871 | ) | (333,491 | ) | 336,885 | 3,940 | |||||||||
Cash from (used for) investing activities – discontinued operations | — | — | — | (1,618 | ) | — | (1,618 | ) | ||||||||||
Cash from (used for) investing activities | 2,469 | (52 | ) | (1,871 | ) | (335,109 | ) | 336,885 | 2,322 | |||||||||
Cash flows – financing activities | ||||||||||||||||||
Cash from (used for) financing activities – continuing operations | 34,268 | — | (2,434 | ) | 68,398 | (121,288 | ) | (21,055 | ) | |||||||||
Cash from (used for) financing activities – discontinued operations | — | — | — | 1,909 | — | 1,909 | ||||||||||||
Cash from (used for) financing activities | 34,268 | — | (2,434 | ) | 70,307 | (121,288 | ) | (19,146 | ) | |||||||||
Effect of currency exchange rate changes on cash and equivalents | — | — | — | 891 | — | 891 | ||||||||||||
Increase (decrease) in cash and equivalents | 717 | — | — | (6,904 | ) | 680 | (5,507 | ) | ||||||||||
Cash and equivalents at beginning of year | 2,558 | — | 3 | 48,423 | (1,426 | ) | 49,558 | |||||||||||
Cash and equivalents at end of year | 3,275 | — | 3 | 41,519 | (747 | ) | 44,051 | |||||||||||
Less cash and equivalents of discontinued operations at end of year | — | — | — | 752 | — | 752 | ||||||||||||
Cash and equivalents of continuing operations at end of year | $ | 3,275 | $ | — | $ | 3 | $ | 40,768 | $ | (747 | ) | $ | 43,299 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2016 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows – operating activities | ||||||||||||||||||
Cash from (used for) operating activities - continuing operations | $ | (4,966 | ) | $ | (10 | ) | $ | (52 | ) | $ | 162,918 | $ | (151,791 | ) | $ | 6,099 | ||
Cash from (used for) operating activities - discontinued operations | (891 | ) | — | — | (5,039 | ) | (413 | ) | (6,343 | ) | ||||||||
Cash from (used for) operating activities | (5,858 | ) | (10 | ) | (52 | ) | 157,880 | (152,204 | ) | (244 | ) | |||||||
Cash flows – investing activities | ||||||||||||||||||
Cash from (used for) investing activities – continuing operations | 14,158 | 16,384 | 35,443 | 72,205 | (75,577 | ) | 62,613 | |||||||||||
Cash from (used for) investing activities – discontinued operations | — | — | — | (13,412 | ) | — | (13,412 | ) | ||||||||||
Cash from (used for) investing activities | 14,158 | 16,384 | 35,443 | 58,794 | (75,577 | ) | 49,202 | |||||||||||
Cash flows – financing activities | ||||||||||||||||||
Cash from (used for) financing activities – continuing operations | (9,879 | ) | (16,374 | ) | (35,388 | ) | (275,243 | ) | 246,964 | (89,920 | ) | |||||||
Cash from (used for) financing activities – discontinued operations | — | — | — | 789 | — | 789 | ||||||||||||
Cash from (used for) financing activities | (9,879 | ) | (16,374 | ) | (35,388 | ) | (274,454 | ) | 246,964 | (89,131 | ) | |||||||
Effect of currency exchange rate changes on cash and equivalents | — | — | — | (1,146 | ) | — | (1,146 | ) | ||||||||||
Increase (decrease) in cash and equivalents | (1,578 | ) | — | 3 | (58,927 | ) | 19,183 | (41,319 | ) | |||||||||
Cash and equivalents at beginning of year | 4,137 | — | — | 107,351 | (20,609 | ) | 90,879 | |||||||||||
Cash and equivalents at end of year | 2,558 | — | 3 | 48,423 | (1,426 | ) | 49,558 | |||||||||||
Less cash and equivalents of discontinued operations at end of year | — | — | — | 1,429 | — | 1,429 | ||||||||||||
Cash and equivalents of continuing operations at end of year | $ | 2,558 | $ | — | $ | 3 | $ | 46,994 | $ | (1,426 | ) | $ | 48,129 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2015 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows – operating activities | ||||||||||||||||||
Cash from (used for) operating activities - continuing operations | $ | 13,587 | $ | 68 | $ | 631 | $ | 433,479 | $ | (435,909 | ) | $ | 11,856 | |||||
Cash from (used for) operating activities - discontinued operations | (7,490 | ) | — | (30 | ) | 27,533 | (11,979 | ) | 8,034 | |||||||||
Cash from (used for) operating activities | 6,097 | 68 | 601 | 461,013 | (447,888 | ) | 19,891 | |||||||||||
Cash flows – investing activities | ||||||||||||||||||
Cash from (used for) investing activities – continuing operations | 7,106 | (248 | ) | (601 | ) | (493,933 | ) | 549,289 | 61,613 | |||||||||
Cash from (used for) investing activities – discontinued operations | — | — | — | 5,854 | (7,979 | ) | (2,125 | ) | ||||||||||
Cash from (used for) investing activities | 7,106 | (248 | ) | (601 | ) | (488,079 | ) | 541,310 | 59,488 | |||||||||
Cash flows – financing activities | ||||||||||||||||||
Cash from (used for) financing activities – continuing operations | (13,886 | ) | 180 | — | 67,063 | (122,904 | ) | (69,547 | ) | |||||||||
Cash from (used for) financing activities – discontinued operations | — | — | — | (37,582 | ) | 31,075 | (6,507 | ) | ||||||||||
Cash from (used for) financing activities | (13,886 | ) | 180 | — | 29,481 | (91,829 | ) | (76,054 | ) | |||||||||
Effect of currency exchange rate changes on cash and equivalents | — | — | — | (3,464 | ) | — | (3,464 | ) | ||||||||||
Increase (decrease) in cash and equivalents | (683 | ) | — | — | (1,049 | ) | 1,594 | (138 | ) | |||||||||
Cash and equivalents at beginning of year | 4,820 | — | — | 108,400 | (22,203 | ) | 91,017 | |||||||||||
Cash and equivalents at end of year | 4,137 | — | — | 107,351 | (20,609 | ) | 90,879 | |||||||||||
Less cash and equivalents of discontinued operations at end of year | — | — | — | 20,395 | — | 20,395 | ||||||||||||
Cash and equivalents of continuing operations at end of year | $ | 4,137 | $ | — | $ | — | $ | 86,955 | $ | (20,609 | ) | $ | 70,483 |
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2017 | ||||||||||||||||||
(in millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Revenues and other income | ||||||||||||||||||
Sales of goods and services | $ | 35,551 | $ | — | $ | — | $ | 161,158 | $ | (83,518 | ) | $ | 113,192 | |||||
Other income | 3,769 | — | — | 76,453 | (78,597 | ) | 1,625 | |||||||||||
Equity in earnings (loss) of affiliates | 2,014 | — | 1,938 | 109,525 | (113,477 | ) | — | |||||||||||
GE Capital revenues from services | — | 703 | 800 | 9,888 | (4,115 | ) | 7,276 | |||||||||||
Total revenues and other income | 41,335 | 703 | 2,737 | 357,024 | (279,706 | ) | 122,092 | |||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 4,396 | 652 | 2,006 | 4,928 | (7,112 | ) | 4,869 | |||||||||||
Other costs and expenses | 36,013 | — | 18 | 175,648 | (85,665 | ) | 126,014 | |||||||||||
Total costs and expenses | 40,409 | 653 | 2,023 | 180,576 | (92,778 | ) | 130,883 | |||||||||||
Earnings (loss) from continuing operations before income taxes | 926 | 50 | 714 | 176,447 | (186,929 | ) | (8,791 | ) | ||||||||||
Benefit (provision) for income taxes | (2,896 | ) | (5 | ) | 115 | 5,921 | (92 | ) | 3,043 | |||||||||
Earnings (loss) from continuing operations | (1,969 | ) | 45 | 829 | 182,368 | (187,020 | ) | (5,748 | ) | |||||||||
Earnings (loss) from discontinued operations, net of taxes | (319 | ) | — | 41 | 4 | (35 | ) | (309 | ) | |||||||||
Net earnings (loss) | (2,288 | ) | 45 | 870 | 182,372 | (187,055 | ) | (6,056 | ) | |||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | (137 | ) | (133 | ) | (270 | ) | |||||||||
Net earnings (loss) attributable to the Company | (2,288 | ) | 45 | 870 | 182,509 | (186,922 | ) | (5,786 | ) | |||||||||
Other comprehensive income | 4,202 | 0 | 567 | (7,474 | ) | 6,908 | 4,202 | |||||||||||
Comprehensive income (loss) attributable to the Company | $ | 1,914 | $ | 45 | $ | 1,436 | $ | 175,035 | $ | (180,014 | ) | $ | (1,584 | ) |
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2016 | ||||||||||||||||||
(in millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Revenues and other income | ||||||||||||||||||
Sales of goods and services | $ | 40,315 | $ | — | $ | — | $ | 152,047 | $ | (81,971 | ) | $ | 110,391 | |||||
Other income | 10,949 | — | — | 63,363 | (70,308 | ) | 4,005 | |||||||||||
Equity in earnings (loss) of affiliates | 1,397 | — | 1,542 | 116,897 | (119,836 | ) | — | |||||||||||
GE Capital revenues from services | — | 897 | 1,419 | 12,994 | (6,012 | ) | 9,297 | |||||||||||
Total revenues and other income | 52,661 | 897 | 2,961 | 345,301 | (278,127 | ) | 123,693 | |||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 3,505 | 831 | 2,567 | 5,429 | (7,308 | ) | 5,025 | |||||||||||
Other costs and expenses | 41,972 | — | 143 | 168,245 | (100,722 | ) | 109,638 | |||||||||||
Total costs and expenses | 45,478 | 831 | 2,711 | 173,674 | (108,030 | ) | 114,663 | |||||||||||
Earnings (loss) from continuing operations before income taxes | 7,183 | 66 | 250 | 171,627 | (170,097 | ) | 9,030 | |||||||||||
Benefit (provision) for income taxes | 2,539 | (10 | ) | (105 | ) | (1,911 | ) | (49 | ) | 464 | ||||||||
Earnings (loss) from continuing operations | 9,723 | 56 | 145 | 169,717 | (170,146 | ) | 9,494 | |||||||||||
Earnings (loss) from discontinued operations, net of taxes | (891 | ) | — | (1,927 | ) | 351 | 1,514 | (954 | ) | |||||||||
Net earnings (loss) | 8,831 | 56 | (1,782 | ) | 170,067 | (168,632 | ) | 8,540 | ||||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | (149 | ) | (142 | ) | (291 | ) | |||||||||
Net earnings (loss) attributable to the Company | 8,831 | 56 | (1,782 | ) | 170,216 | (168,490 | ) | 8,831 | ||||||||||
Other comprehensive income | (2,069 | ) | (12 | ) | 1,126 | (3,393 | ) | 2,279 | (2,069 | ) | ||||||||
Comprehensive income (loss) attributable to the Company | $ | 6,762 | $ | 44 | $ | (657 | ) | $ | 166,823 | $ | (166,211 | ) | $ | 6,762 |
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2015 | ||||||||||||||||||
(in millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Revenues and other income | ||||||||||||||||||
Sales of goods and services | $ | 43,945 | $ | — | $ | — | $ | 139,158 | $ | (77,294 | ) | $ | 105,809 | |||||
Other income | 2,725 | — | — | 31,146 | (31,644 | ) | 2,227 | |||||||||||
Equity in earnings (loss) of affiliates | 1,815 | — | 437 | 389,796 | (392,048 | ) | — | |||||||||||
GE Capital revenues from services | — | 250 | (460 | ) | 36,909 | (27,349 | ) | 9,350 | ||||||||||
Total revenues and other income | 48,485 | 250 | (23 | ) | 597,009 | (528,335 | ) | 117,386 | ||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 3,127 | 232 | 284 | 9,037 | (9,216 | ) | 3,463 | |||||||||||
Other costs and expenses | 45,308 | — | 3 | 163,220 | (102,795 | ) | 105,737 | |||||||||||
Total costs and expenses | 48,435 | 232 | 287 | 172,257 | (112,011 | ) | 109,200 | |||||||||||
Earnings (loss) from continuing operations before income taxes | 50 | 18 | (310 | ) | 424,752 | (416,324 | ) | 8,186 | ||||||||||
Benefit (provision) for income taxes | 1,314 | (2 | ) | (9 | ) | (11,426 | ) | 3,639 | (6,485 | ) | ||||||||
Earnings (loss) from continuing operations | 1,364 | 15 | (319 | ) | 413,326 | (412,686 | ) | 1,700 | ||||||||||
Earnings (loss) from discontinued operations, net of taxes | (7,490 | ) | — | 483 | (738 | ) | 250 | (7,495 | ) | |||||||||
Net earnings (loss) | (6,126 | ) | 15 | 164 | 412,588 | (412,436 | ) | (5,795 | ) | |||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | 249 | 82 | 332 | ||||||||||||
Net earnings (loss) attributable to the Company | (6,126 | ) | 15 | 164 | 412,339 | (412,518 | ) | (6,126 | ) | |||||||||
Other comprehensive income | 1,644 | 12 | 1,377 | (4,843 | ) | 3,454 | 1,644 | |||||||||||
Comprehensive income (loss) attributable to the Company | $ | (4,483 | ) | $ | 27 | $ | 1,542 | $ | 407,496 | $ | (409,065 | ) | $ | (4,483 | ) |
December 31 (Dollars in millions) | 2017 | 2016 | |||||||||
Short-term borrowings | Amount | Average Rate(a) | Amount | Average Rate(a) | |||||||
GE | |||||||||||
Commercial paper | $ | 3,000 | 1.35 | % | $ | 1,500 | 0.60 | % | |||
Current portion of long-term borrowings(e) | 9,452 | 3.01 | 17,109 | 3.16 | |||||||
Other | 2,095 | 1,874 | |||||||||
Total GE short-term borrowings(b) | $ | 14,548 | $ | 20,482 | |||||||
GE Capital | |||||||||||
Commercial paper | $ | 5,013 | 1.45 | $ | 5,002 | 0.59 | |||||
Current portion of long-term borrowings(c) | 5,781 | 1.26 | 6,517 | 1.64 | |||||||
Intercompany payable to GE(d) | 8,310 | 11,696 | |||||||||
Other | 497 | 229 | |||||||||
Total GE Capital short-term borrowings | $ | 19,602 | $ | 23,443 | |||||||
Eliminations(d) | (10,114 | ) | (13,212 | ) | |||||||
Total short-term borrowings | $ | 24,036 | $ | 30,714 | |||||||
Long-term borrowings | Maturities | Amount | Average Rate(a) | Amount | Average Rate(a) | ||||||
GE | |||||||||||
Senior notes(e) | 2019-2055 | $ | 62,724 | 3.15 | % | $ | 54,396 | 3.35 | % | ||
Subordinated notes | 2021-2037 | 2,913 | 3.28 | 2,768 | 3.73 | ||||||
Subordinated debentures(g) | — | 719 | 6.12 | ||||||||
Other | 1,403 | 928 | |||||||||
Total GE long-term borrowings(b) | 67,040 | 58,810 | |||||||||
GE Capital | |||||||||||
Senior notes | 2019-2039 | 40,754 | 3.11 | 44,131 | 2.45 | ||||||
Subordinated notes | 208 | 236 | |||||||||
Intercompany payable to GE(f) | 31,533 | 47,084 | |||||||||
Other(c) | 1,118 | 1,992 | |||||||||
Total GE Capital long-term borrowings | 73,614 | 93,443 | |||||||||
Eliminations(f) | (32,079 | ) | (47,173 | ) | |||||||
Total long-term borrowings | $ | 108,575 | $ | 105,080 | |||||||
Non-recourse borrowings of consolidated securitization entities(h) | 2018-2021 | 1,980 | 2.77 | % | 417 | 2.23 | % | ||||
Total borrowings | $ | 134,591 | $ | 136,210 |
(a) | Based on year-end balances and year-end local currency effective interest rates, including the effects from hedging. |
(b) | Excluding assumed debt of GE Capital, the total amount of GE borrowings was $41,744 million and $20,512 million at December 31, 2017 and December 31, 2016, respectively. |
(c) | Included $1,466 million and $2,665 million of funding secured by aircraft and other collateral at December 31, 2017 and December 31, 2016, respectively, of which $458 million and $1,419 million is non-recourse to GE Capital at December 31, 2017 and December 31, 2016, respectively. |
(d) | Included a reduction of zero and $1,329 million of short-term intercompany loans from GE Capital to GE at December 31, 2017 and December 31, 2016, which bear the right of offset against amounts owed under the assumed debt agreement. Excluding intercompany loans, total short-term assumed debt was $8,310 million and $13,024 million at December 31,2017 and December 31, 2016, respectively. The remaining short-term intercompany loan balance was paid in January 2017. |
(e) | Total borrowings included $7,225 million of borrowings issued by BHGE, which primarily included current portion of long-term borrowings and senior notes of $639 million and $6,206 million, respectively, at December 31, 2017. |
(f) | Included a reduction of $7,271 million and zero for long-term intercompany loans from GE Capital to GE at December 31, 2017 and December 31, 2016, respectively, which bear the right of offset against amounts owed under the assumed debt agreement. Excluding intercompany loans, total long-term assumed debt was $38,804 million and $47,084 million at December 31, 2017 and December 31, 2016, respectively. The $7,271 million of intercompany loans collectively have a weighted average interest rate of 3.5% and a term of approximately 15 years. |
(g) | Comprises subordinated debentures which constitute the sole assets of the trusts that have issued trust preferred securities and where GE owns 100% of the common securities of the trusts. Obligations associated with these trusts are unconditionally guaranteed by GE. |
(h) | Included $621 million and $320 million of current portion of long-term borrowings at December 31, 2017 and December 31, 2016, respectively. See Note 19 for further information. |
(In millions) | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||
GE excluding assumed debt(a) | $ | 1,142 | $ | 127 | $ | 888 | $ | 591 | $ | 6,351 | |||||
GE Capital debt assumed by GE | 8,310 | 3,774 | 6,208 | 4,713 | 1,942 | ||||||||||
GE Capital other debt | 5,781 | (b) | 4,462 | 11,476 | 2,211 | 2,338 |
(a) | Includes maturities of BHGE borrowings of $738 million, $47 million, $14 million, $538 million and $1,255 million in 2018, 2019, 2020, 2021 and 2022, respectively. Excluding BHGE borrowings, GE maturities will be $404 million, $80 million, $875 million, $53 million and $5,095 million in 2018, 2019, 2020, 2021 and 2022, respectively. |
(b) | Fixed and floating rate notes of $447 million contain put options with exercise dates in 2018, and which have final maturity beyond 2022. |
(In millions, after tax) | 2017 | 2016 | 2015 | ||||||
Compensation expense | $ | 146 | $ | 207 | $ | 234 |
2017 | 2016 | 2015 | |||||||
Weighted-average grant-date fair value of stock options | $ | 3.81 | $ | 3.61 | $ | 4.64 | |||
Stock Option Valuation Assumptions: | |||||||||
Risk-free interest rate | 2.3 | % | 1.4 | % | 2.0 | % | |||
Dividend yield | 3.3 | % | 3.4 | % | 3.4 | % | |||
Expected volatility | 28.0 | % | 20.0 | % | 25.0 | % | |||
Expected option life (in years) | 6.3 | 6.5 | 6.8 | ||||||
Other pricing model inputs: | |||||||||
Weighted-average grant-date market price of GE stock (strike price) | $ | 18.97 | $ | 29.63 | $ | 25.79 |
As of December 31, 2017 unless, otherwise stated (in thousands, except per-share data) | |||
Stock options granted during 2017 | 30,611 | ||
Weighted-average strike price of awards granted in 2017 | $ | 18.97 | |
Stock options outstanding | 398,571 | ||
Weighted-average strike price of stock options outstanding | $ | 21.91 | |
Stock options exercisable | 309,190 | ||
Weighted-average strike price of stock options exercisable | $ | 21.25 |
2017 | 2016 | 2015 | |||||||
Stock options exercised (in thousands) | 30,774 | 56,973 | 65,764 | ||||||
Cash received from stock options exercised (in millions) | $ | 528 | $ | 1,037 | $ | 1,098 |
(In millions, after tax) | 2017 | 2016 | 2015 | ||||||
Compensation expense(a) | $ | 95 | $ | 90 | $ | 72 |
(a) | Included $(6) million of compensation expense related to performance share units in 2017. |
2017 | 2016 | 2015 | |||||||
Weighted-average grant-date fair value of restricted stock awards | $ | 24.89 | $ | 30.20 | $ | 26.74 |
As of December 31, 2017, unless otherwise stated (in thousands, except per-share data) | |||
Restricted stock units granted during 2017 | 7,715 | ||
Non-vested restricted stock units outstanding | 17,233 | ||
Weighted-average fair value at grant date of non-vested stock | $ | 26.94 |
(In thousands) | 2017 | 2016 | 2015 | |||
Restricted stock units vested during the year ended | 6,490 | 4,427 | 3,899 |
(In millions) | 2017 | 2016 | 2015 | ||||||
Income tax benefit recognized in earnings | $ | 138 | $ | 274 | $ | 148 | |||
Excess of actual tax deductions over amounts assumed recognized in equity(a) | — | — | 167 |
(a) | We adopted ASU 2016-09 in September 2016. The primary effects of adoption were the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital and the reclassification of cash flows related to excess tax benefits from financing activities to operating activities for the periods beginning January 1, 2016. See Note 1 for further information. |
As of December 31, 2017, unless otherwise stated (in millions) | Aggregate intrinsic value | ||
Stock options outstanding | $ | 235 | |
Stock options exercised in 2017 | 326 | ||
Non-vested restricted stock units outstanding | 301 | ||
Restricted stock units vested in 2017 | 167 |
FINANCIAL INFORMATION FOR ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Assets | ||||||
Current receivables(a) | $ | 703 | $ | 366 | ||
Inventories | 1,039 | 211 | ||||
Property, plant, and equipment – net | 931 | 632 | ||||
Goodwill | 1,619 | 212 | ||||
Other intangible assets – net | 403 | 123 | ||||
Contract assets | 858 | 125 | ||||
Valuation allowance on disposal group classified as held for sale(b) | (1,378 | ) | — | |||
Other | 67 | 76 | ||||
Assets of businesses held for sale | $ | 4,243 | $ | 1,745 | ||
Liabilities | ||||||
Accounts payable | $ | 602 | $ | 190 | ||
Progress collections and price adjustments accrued | 38 | 141 | ||||
Other current liabilities | 450 | 133 | ||||
Non-current compensation and benefits | 162 | 82 | ||||
Other | 87 | 110 | ||||
Liabilities of businesses held for sale | $ | 1,339 | $ | 656 |
(a) | Included transactions in our industrial businesses that were made on arm's length terms with GE Capital, including GE current receivables sold to GE Capital of $366 million and $117 million at December 31, 2017 and December 31, 2016, respectively. These intercompany balances included within our held for sale businesses are reported in the GE and GE Capital columns of our financial statements, but are eliminated in deriving our consolidated financial statements. |
(b) | During the fourth quarter of 2017, we adjusted the carrying value to fair value less cost to sell for certain held for sale businesses, which resulted in a pre-tax valuation allowance of $1,378 million recorded in the caption “Other income” in our consolidated Statement of Earnings (Loss). |
FINANCIAL INFORMATION FOR DISCONTINUED OPERATIONS | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
Operations | |||||||||
Total revenues and other income (loss) | $ | 182 | $ | 2,968 | $ | 23,003 | |||
Earnings (loss) from discontinued operations before income taxes | $ | (731 | ) | $ | (162 | ) | $ | 887 | |
Benefit (provision) for income taxes(a) | 295 | 460 | (791 | ) | |||||
Earnings (loss) from discontinued operations, net of taxes | $ | (437 | ) | $ | 298 | $ | 96 | ||
Disposals | |||||||||
Gain (loss) on disposals before income taxes | $ | 306 | $ | (750 | ) | $ | (6,612 | ) | |
Benefit (provision) for income taxes(a) | (178 | ) | (502 | ) | (979 | ) | |||
Gain (loss) on disposals, net of taxes | $ | 128 | $ | (1,252 | ) | $ | (7,591 | ) | |
Earnings (loss) from discontinued operations, net of taxes(b)(c) | $ | (309 | ) | $ | (954 | ) | $ | (7,495 | ) |
(a) | GE Capital’s total tax benefit (provision) for discontinued operations and disposals included current tax benefit (provision) of $(299) million, $945 million and $(6,834) million for the years ended December 31, 2017, 2016 and 2015, respectively, including current U.S. Federal tax benefit (provision) of $(402) million, $1,224 million and $(6,245) million for the years ended December 31, 2017, 2016 and 2015, respectively, and deferred tax benefit (provision) of $416 million, $(988) million and $5,073 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
(b) | The sum of GE industrial earnings (loss) from discontinued operations, net of taxes, and GE Capital earnings (loss) from discontinued operations, net of taxes, after adjusting for earnings (loss) attributable to noncontrolling interests related to discontinued operations, is reported within GE industrial earnings (loss) from discontinued operations, net of taxes, on the consolidated Statement of Earnings (Loss). |
(c) | Earnings (loss) from discontinued operations attributable to the Company before income taxes was $(432) million, $(911) million, and $(6,083) million for the years ended December 31, 2017, 2016, and 2015, respectively. |
December 31 (In millions) | 2017 | 2016 | ||||
Assets | ||||||
Cash and equivalents | $ | 752 | $ | 1,429 | ||
Investment securities | 647 | 2,626 | ||||
Deferred income taxes | 951 | 487 | ||||
Financing receivables held for sale | 3,215 | 8,547 | ||||
Other assets | 347 | 1,727 | ||||
Assets of discontinued operations | $ | 5,912 | $ | 14,815 | ||
Liabilities | ||||||
Accounts payable | $ | 51 | $ | 164 | ||
Borrowings | 1 | 2,076 | ||||
Other liabilities | 654 | 1,918 | ||||
Liabilities of discontinued operations | $ | 706 | $ | 4,158 |
2017 | 2016 | 2015 | ||||||||||||||||||
(In millions; per-share amounts in dollars) | Diluted | Basic | Diluted | Basic | Diluted | Basic | ||||||||||||||
Amounts attributable to the Company: | ||||||||||||||||||||
Consolidated | ||||||||||||||||||||
Earnings (loss) from continuing operations for per-share calculation(a)(b) | $ | (5,495 | ) | $ | (5,495 | ) | $ | 9,764 | $ | 9,769 | $ | 1,680 | $ | 1,679 | ||||||
Preferred stock dividends | (436 | ) | (436 | ) | (656 | ) | (656 | ) | (18 | ) | (18 | ) | ||||||||
Earnings (loss) from continuing operations attributable to common shareowners for per-share calculation(a)(b) | $ | (5,931 | ) | $ | (5,931 | ) | $ | 9,108 | $ | 9,113 | $ | 1,662 | $ | 1,661 | ||||||
Earnings (loss) from discontinued operations for per-share calculation(a)(b) | (328 | ) | (328 | ) | (955 | ) | (950 | ) | (7,795 | ) | (7,795 | ) | ||||||||
Net earnings (loss) attributable to GE common shareowners for per-share calculation(a)(b) | $ | (6,246 | ) | $ | (6,246 | ) | $ | 8,157 | $ | 8,163 | $ | (6,135 | ) | $ | (6,135 | ) | ||||
Average equivalent shares | ||||||||||||||||||||
Shares of GE common stock outstanding | 8,687 | 8,687 | 9,025 | 9,025 | 9,944 | 9,944 | ||||||||||||||
Employee compensation-related shares (including stock options) and warrants | — | — | 105 | — | 72 | — | ||||||||||||||
Total average equivalent shares | 8,687 | 8,687 | 9,130 | 9,025 | 10,016 | 9,944 | ||||||||||||||
Per-share amounts | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | (0.68 | ) | $ | (0.68 | ) | $ | 1.00 | $ | 1.01 | $ | 0.17 | $ | 0.17 | ||||||
Earnings (loss) from discontinued operations | (0.04 | ) | (0.04 | ) | (0.10 | ) | (0.11 | ) | (0.78 | ) | (0.78 | ) | ||||||||
Net earnings (loss) | (0.72 | ) | (0.72 | ) | 0.89 | 0.90 | (0.61 | ) | (0.62 | ) |
(a) | Included a dilutive adjustment of an insignificant amount of dividend equivalents in each of the three years presented. |
(b) | Included in 2016 is a dilutive adjustment for the change in income for forward purchase contracts that may be settled in stock. |
(In millions) | Balance at January 1 | Net realized/ unrealized gains (losses included in earnings(a) | Net realized/ unrealized gains (losses included in in AOCI | Purchase(b) | Sales | Settlements | Transfers into Level 3 | Transfers out of Level 3 | Balance at December 31 | ||||||||||||||||||
2017 | |||||||||||||||||||||||||||
Investment securities | $ | 4,406 | $ | 54 | $ | 66 | $ | 1,108 | $ | (38 | ) | $ | (641 | ) | $ | 32 | $ | (575 | ) | $ | 4,413 | ||||||
Derivatives | 21 | (2 | ) | (1 | ) | — | — | (9 | ) | 4 | 1 | 14 | |||||||||||||||
Total | $ | 4,427 | $ | 51 | $ | 65 | $ | 1,108 | $ | (38 | ) | $ | (650 | ) | $ | 37 | $ | (574 | ) | $ | 4,427 | ||||||
2016 | |||||||||||||||||||||||||||
Investment securities | $ | 3,695 | $ | 11 | $ | 51 | $ | 973 | $ | (152 | ) | $ | (166 | ) | $ | 34 | $ | (39 | ) | $ | 4,406 | ||||||
Derivatives | 88 | (18 | ) | — | 1 | — | (59 | ) | — | 8 | 21 | ||||||||||||||||
Other | 259 | — | — | — | — | — | — | (259 | ) | — | |||||||||||||||||
Total | $ | 4,042 | $ | (7 | ) | $ | 51 | $ | 974 | $ | (152 | ) | $ | (226 | ) | $ | 35 | $ | (290 | ) | $ | 4,427 |
(a) | Earnings effects are primarily included in the “GE Capital revenues from services” and “Interest and other financial charges” captions in the Statement of Earnings (Loss). |
(b) | Included $675 million and $468 million of U.S. corporate debt securities for the years ended December 31, 2017 and 2016. |
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS | |||||||||||||||
(In millions) | Level 1(a) | Level 2(a) | Level 3(b) | Netting adjustment | Net balance(c) | ||||||||||
December 31, 2017 | |||||||||||||||
Assets | |||||||||||||||
Investment securities | $ | 158 | $ | 34,126 | $ | 4,413 | $ | — | $ | 38,696 | |||||
Derivatives | — | 3,343 | 21 | (2,986 | ) | 378 | |||||||||
Total | $ | 158 | $ | 37,469 | $ | 4,433 | $ | (2,986 | ) | $ | 39,074 | ||||
Liabilities | |||||||||||||||
Derivatives | $ | — | $ | 2,354 | $ | 7 | $ | (2,034 | ) | $ | 327 | ||||
Other(d) | — | 999 | — | — | 999 | ||||||||||
Total | $ | — | $ | 3,353 | $ | 7 | $ | (2,034 | ) | $ | 1,325 | ||||
December 31, 2016 | |||||||||||||||
Assets | |||||||||||||||
Investment securities | $ | 188 | $ | 39,719 | $ | 4,406 | $ | — | $ | 44,313 | |||||
Derivatives | — | 5,444 | 23 | (5,121 | ) | 345 | |||||||||
Total | $ | 188 | $ | 45,163 | $ | 4,429 | $ | (5,121 | ) | $ | 44,658 | ||||
Liabilities | |||||||||||||||
Derivatives | $ | — | $ | 4,880 | $ | 2 | $ | (4,449 | ) | $ | 434 | ||||
Other(d) | — | 1,143 | — | — | 1,143 | ||||||||||
Total | $ | — | $ | 6,024 | $ | 2 | $ | (4,449 | ) | $ | 1,577 |
(a) | There were no significant transfers between Level 1 and Level 2 for the years ended December 31, 2017 and 2016. |
(b) | Included debt securities classified within Level 3 of $3,629 million of U.S. corporate and $614 million of Government and agencies securities at December 31, 2017, and $3,399 million of U.S. corporate and $688 million of Non-U.S. corporate securities at December 31, 2016. |
(c) | See Notes 3 and 19 for further information on the composition of our investment securities and derivative portfolios. |
(d) | Primarily represents the liabilities associated with certain of our deferred incentive compensation plans. |
(In millions) | Balance at January 1 | Net realized/ unrealized gains (losses included in earnings(a) | Net realized/ unrealized gains (losses included in in AOCI | Purchase(b) | Sales | Settlements | Transfers into Level 3 | Transfers out of Level 3 | Balance at December 31 | ||||||||||||||||||
2017 | |||||||||||||||||||||||||||
Investment securities | $ | 4,406 | $ | 54 | $ | 66 | $ | 1,108 | $ | (38 | ) | $ | (641 | ) | $ | 32 | $ | (575 | ) | $ | 4,413 | ||||||
Derivatives | 21 | (2 | ) | (1 | ) | — | — | (9 | ) | 4 | 1 | 14 | |||||||||||||||
Total | $ | 4,427 | $ | 51 | $ | 65 | $ | 1,108 | $ | (38 | ) | $ | (650 | ) | $ | 37 | $ | (574 | ) | $ | 4,427 | ||||||
2016 | |||||||||||||||||||||||||||
Investment securities | $ | 3,695 | $ | 11 | $ | 51 | $ | 973 | $ | (152 | ) | $ | (166 | ) | $ | 34 | $ | (39 | ) | $ | 4,406 | ||||||
Derivatives | 88 | (18 | ) | — | 1 | — | (59 | ) | — | 8 | 21 | ||||||||||||||||
Other | 259 | — | — | — | — | — | — | (259 | ) | — | |||||||||||||||||
Total | $ | 4,042 | $ | (7 | ) | $ | 51 | $ | 974 | $ | (152 | ) | $ | (226 | ) | $ | 35 | $ | (290 | ) | $ | 4,427 |
(a) | Earnings effects are primarily included in the “GE Capital revenues from services” and “Interest and other financial charges” captions in the Statement of Earnings (Loss). |
(b) | Included $675 million and $468 million of U.S. corporate debt securities for the years ended December 31, 2017 and 2016. |
Remeasured during the years ended December 31 | |||||||||||||
2017 | 2016 | ||||||||||||
(In millions) | Level 2 | Level 3 | Level 2 | Level 3 | |||||||||
Financing receivables and financing receivables held for sale | $ | — | $ | 1,541 | $ | — | $ | 30 | |||||
Cost and equity method investments | — | 2,076 | — | 103 | |||||||||
Long-lived assets | 177 | 591 | 17 | 1,055 | |||||||||
Goodwill | — | — | — | — | |||||||||
Total | $ | 177 | $ | 4,208 | $ | 17 | $ | 1,189 |
December 31 (In millions) | 2017 | 2016 | ||||
Financing receivables and financing receivables held for sale | $ | (207 | ) | $ | (14 | ) |
Cost and equity method investments | (891 | ) | (44 | ) | ||
Long-lived assets | (819 | ) | (196 | ) | ||
Goodwill | (2,564 | ) | — | |||
Total | $ | (4,482 | ) | $ | (254 | ) |
LEVEL 3 MEASUREMENTS - SIGNIFICANT UNOBSERVABLE INPUTS | ||||||
(Dollars in millions) | Fair value | Valuation technique | Unobservable inputs | Range (weighted-average) | ||
December 31, 2017 | ||||||
Recurring fair value measurements | ||||||
Investment securities(b) | $ | 903 | Income approach | Discount rate(a) | 3.0%-12.6% (6.2%) | |
Nonrecurring fair value measurements | ||||||
Financing receivables | $ | 1,532 | Income approach | Discount rate(a) | 3.2%-16.5% (10.0%) | |
Cost and equity method investments | 2,037 | Income approach | Discount rate(a) | 5.0%-50.00% (7.7%) | ||
Long-lived assets | 554 | Income approach | Discount rate(a) | 2.7%-18.0% (7.3%) | ||
December 31, 2016 | ||||||
Recurring fair value measurements | ||||||
Investment securities(b) | $ | 830 | Income approach | Discount rate(a) | 1.4%-17.4% (7.9%) | |
Nonrecurring fair value measurements | ||||||
Financing receivables | $ | 30 | Income approach | Discount rate(a) | 2.5%-30.0% (20.3%) | |
Cost and equity method investments | 94 | Income approach, | Discount rate(a) | 9.0%-30.0% (11.8%) | ||
Long-lived assets | 683 | Income approach | Discount rate(a) | 2.5%-20.0% (10.4%) |
(a) | Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value. |
(b) | Comprises substantially all of U.S. corporate securities |
Level 1 – | Quoted prices for identical instruments in active markets. |
Level 2 – | Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
Level 3 – | Significant inputs to the valuation model are unobservable. |
2017 | 2016 | ||||||||||||
December 31 (In millions) | Carrying amount (net) | Estimated fair value | Carrying amount (net) | Estimated fair value | |||||||||
GE | |||||||||||||
Assets | |||||||||||||
Investments and notes receivable | $ | 1,341 | $ | 1,418 | $ | 1,526 | $ | 1,595 | |||||
Liabilities | |||||||||||||
Borrowings(a)(b) | 34,473 | 35,416 | 19,184 | 19,923 | |||||||||
Borrowings (debt assumed)(a)(c) | 47,114 | 53,502 | 60,109 | 66,998 | |||||||||
GE Capital | |||||||||||||
Assets | |||||||||||||
Loans | 17,363 | 17,331 | 21,060 | 20,830 | |||||||||
Other commercial mortgages | 1,489 | 1,566 | 1,410 | 1,472 | |||||||||
Loans held for sale | 3,274 | 3,274 | 473 | 473 | |||||||||
Other financial instruments(d) | 112 | 147 | 121 | 150 | |||||||||
Liabilities | |||||||||||||
Borrowings(a)(e)(f)(g) | 55,353 | 60,415 | 58,523 | 62,024 | |||||||||
Investment contracts | 2,569 | 2,996 | 2,813 | 3,277 |
(a) | See Note 10. |
(b) | Included $217 million and $115 million of accrued interest in estimated fair value at December 31, 2017 and December 31, 2016, respectively. |
(c) | Included $696 million and $803 million of accrued interest in estimated fair value at December 31, 2017 and December 31, 2016, respectively. |
(d) | Principally comprises cost method investments. |
(e) | Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of borrowings at December 31, 2017 and December 31, 2016 would have been reduced by $1,754 million and $2,397 million, respectively. |
(f) | Included $731 million and $775 million of accrued interest in estimated fair value at December 31, 2017 and December 31, 2016, respectively. |
(g) | Excluded $39,844 million and $58,780 million of net intercompany payable to GE at December 31, 2017 and December 31, 2016, respectively. |
NOTIONAL AMOUNTS OF LOAN COMMITMENTS | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Ordinary course of business lending commitments(a) | $ | 1,105 | $ | 687 | ||
Unused revolving credit lines | 198 | 238 |
(a) | Excluded investment commitments of $677 million and $522 million at December 31, 2017 and December 31, 2016, respectively. |
Interest rate forwards/swaps | Interest rate increases | Interest rate decreases |
Pay fixed rate/receive floating rate | Fair value increases | Fair value decreases |
Currency forwards/swaps | U.S. dollar strengthens | U.S. dollar weakens |
Pay U.S. dollars/receive foreign currency | Fair value decreases | Fair value increases |
Commodity derivatives | Price increases | Price decreases |
Receive commodity/ pay fixed price | Fair value increases | Fair value decreases |
Interest rate forwards/swaps | Interest rate increases | Interest rate decreases |
Pay floating rate/receive fixed rate | Fair value decreases | Fair value increases |
Currency forwards/swaps | U.S. dollar strengthens | U.S. dollar weakens |
Receive U.S. dollars/pay foreign currency | Fair value increases | Fair value decreases |
Interest rate forwards/swaps interest rate | Interest rate increases | Interest rate decreases |
Pay floating rate/receive fixed rate | Fair value decreases | Fair value increases |
Currency forwards/swaps | U.S. dollar strengthens | U.S. dollar weakens |
Pay U.S. dollars/receive foreign currency | Fair value decreases | Fair value increases |
Receive U.S. dollars/pay foreign currency | Fair value increases | Fair value decreases |
Commodity derivatives | Price increases | Price decreases |
Receive commodity/ pay fixed price | Fair value increases | Fair value decreases |
FAIR VALUE OF DERIVATIVES | |||||||||||||
2017 | 2016 | ||||||||||||
December 31 (in millions) | Assets | Liabilities | Assets | Liabilities | |||||||||
Derivatives accounted for as hedges | |||||||||||||
Interest rate contracts | $ | 1,862 | $ | 148 | $ | 3,106 | $ | 210 | |||||
Currency exchange contracts | 160 | 70 | 402 | 624 | |||||||||
Other contracts | — | — | — | — | |||||||||
$ | 2,021 | $ | 218 | $ | 3,508 | $ | 834 | ||||||
Derivatives not accounted for as hedges | |||||||||||||
Interest rate contracts | 93 | 8 | 62 | 20 | |||||||||
Currency exchange contracts | 1,111 | 2,043 | 1,778 | 4,011 | |||||||||
Other contracts | 139 | 91 | 119 | 17 | |||||||||
$ | 1,343 | $ | 2,143 | $ | 1,958 | $ | 4,048 | ||||||
Gross derivatives recognized in statement of financial position | |||||||||||||
Gross derivatives | 3,364 | 2,361 | 5,467 | 4,883 | |||||||||
Gross accrued interest | 469 | (38 | ) | 768 | (24 | ) | |||||||
$ | 3,833 | $ | 2,323 | $ | 6,234 | $ | 4,859 | ||||||
Amounts offset in statement of financial position | |||||||||||||
Netting adjustments(a) | (1,457 | ) | (1,456 | ) | (3,097 | ) | (3,094 | ) | |||||
Cash collateral(b) | (1,529 | ) | (578 | ) | (2,025 | ) | (1,355 | ) | |||||
$ | (2,986 | ) | $ | (2,034 | ) | $ | (5,121 | ) | $ | (4,449 | ) | ||
Net derivatives recognized in statement of financial position | |||||||||||||
Net derivatives | 847 | 289 | 1,113 | 410 | |||||||||
Amounts not offset in statement of financial position | |||||||||||||
Securities held as collateral(c) | (405 | ) | — | (442 | ) | — | |||||||
Net amount | $ | 441 | $ | 289 | $ | 671 | $ | 410 |
(a) | The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts include fair value adjustments related to our own and counterparty non-performance risk. At December 31, 2017 and December 31, 2016, the cumulative adjustment for non-performance risk was $(1) million and $(3) million, respectively. |
(b) | Excluded excess cash collateral received and posted of $10 million and $255 million at December 31, 2017, respectively, and $6 million and $177 million at December 31, 2016, respectively. |
(c) | Excluded excess securities collateral received of $16 million and zero at December 31, 2017 and December 31, 2016, respectively. |
(In millions) | Effect on hedging instrument | Effect on underlying | Effect on earnings(a) | ||||||
2017 | |||||||||
Cash flow hedges | $ | 199 | $ | (199 | ) | $ | — | ||
Fair value hedges | (556 | ) | 371 | (185 | ) | ||||
Net investment hedges(b) | (1,833 | ) | 1,852 | 19 | |||||
Economic hedges(c) | 1,147 | (1,683 | ) | (536 | ) | ||||
Total | $ | (702 | ) |
2016 | |||||||||
Cash flow hedges | $ | (274 | ) | $ | 274 | $ | 1 | ||
Fair value hedges | 170 | (433 | ) | (263 | ) | ||||
Net investment hedges(b) | 2,458 | (2,376 | ) | 82 | |||||
Economic hedges(c) | (2,132 | ) | 1,784 | (348 | ) | ||||
Total | $ | (528 | ) |
(a) | For cash flow and fair value hedges, the effect on earnings is primarily related to ineffectiveness. For net investment hedges, the effect on earnings is related to ineffectiveness and spot-forward differences. |
(b) | Both non-derivatives and derivatives hedging instruments are included. The carrying value of non-derivative instruments designated as net investment hedges was $(13,028) million and $(13,355) million at December 31, 2017 and December 31, 2016, respectively. Total pre-tax reclassifications from CTA to gain (loss) was $125 million and $(528) million in 2017 and 2016, respectively. Total pre-tax reclassifications from CTA to gain (loss) included $125 million and $(529) million recorded in discontinued operations in 2017 and 2016, respectively. |
(c) | Net effect is substantially offset by the change in fair value of the hedged item that will affect earnings in future periods. |
CASH FLOW HEDGE ACTIVITY | |||||||||||||||||||
Gain (loss) recognized in AOCI | Gain (loss) reclassified from AOCI into earnings | ||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||
Interest rate contracts | $ | 4 | $ | 6 | $ | (1 | ) | $ | (27 | ) | $ | (79 | ) | $ | (130 | ) | |||
Currency exchange contracts | 195 | (281 | ) | (907 | ) | 176 | (282 | ) | (784 | ) | |||||||||
Commodity contracts | — | — | (5 | ) | — | (2 | ) | (4 | ) | ||||||||||
Total(a) | $ | 199 | $ | (274 | ) | $ | (913 | ) | $ | 149 | $ | (364 | ) | $ | (918 | ) |
(a) | Gain (loss) is recorded in “GE Capital revenues from services”, “Interest and other financial charges”, and “Other costs and expenses” in our Statement of Earnings (Loss) when reclassified. |
FINANCING RECEIVABLES – NET | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Loans, net of deferred income | $ | 17,404 | $ | 21,101 | ||
Investment in financing leases, net of deferred income | 4,614 | 4,998 | ||||
22,018 | 26,099 | |||||
Allowance for losses(a) | (51 | ) | (58 | ) | ||
Financing receivables – net | $ | 21,967 | $ | 26,041 |
NET INVESTMENT IN FINANCING LEASES | ||||||||||||||||||||
Total financing leases | Direct financing leases(a) | Leveraged leases(b) | ||||||||||||||||||
December 31 (In millions) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
Total minimum lease payments receivable | $ | 4,637 | $ | 5,466 | $ | 2,952 | $ | 3,274 | $ | 1,685 | $ | 2,191 | ||||||||
Less principal and interest on third-party non-recourse debt | (638 | ) | (1,053 | ) | — | — | (638 | ) | (1,053 | ) | ||||||||||
Net rentals receivable | 3,999 | 4,412 | 2,952 | 3,274 | 1,047 | 1,138 | ||||||||||||||
Estimated unguaranteed residual value of leased assets | 1,590 | 1,985 | 743 | 927 | 847 | 1,058 | ||||||||||||||
Less deferred income | (975 | ) | (1,400 | ) | (614 | ) | (909 | ) | (361 | ) | (491 | ) | ||||||||
Investment in financing leases, net of deferred income(c) | $ | 4,614 | $ | 4,998 | $ | 3,081 | $ | 3,292 | $ | 1,533 | $ | 1,706 |
(a) | Included $22 million and $30 million of initial direct costs on direct financing leases at December 31, 2017 and 2016, respectively. |
(b) | Included pre-tax income of $78 million and $74 million and income tax of $30 million and $28 million during 2017 and 2016, respectively. Net investment credits recognized on leveraged leases during 2017 and 2016 were insignificant. |
(c) | See Note 13 for deferred tax amounts related to financing leases. |
CONTRACTUAL MATURITIES | ||||||
(In millions) | Total loans | Net rentals receivable | ||||
Due in | ||||||
2018 | $ | 10,366 | $ | 932 | ||
2019 | 2,987 | 805 | ||||
2020 | 1,364 | 637 | ||||
2021 | 1,158 | 503 | ||||
2022 | 570 | 327 | ||||
2023 and later | 959 | 795 | ||||
Total | $ | 17,404 | $ | 3,999 |
(In millions) | Estimated fair value | Estimated useful life (in years) | ||
Trademarks - Baker Hughes | $ | 2,100 | Indefinite life | |
Customer-related | 1,260 | 15 | ||
Patents and technology | 550 | 10 | ||
Trademarks - Other | 70 | 10 | ||
Capitalized software | 90 | 3-7 | ||
In-process research and development | 45 | Indefinite life | ||
Favorable lease contracts | 8 | 10 | ||
Total | $ | 4,123 |
PURCHASE PRICE | |||
(In millions) | July 3, 2017 | ||
Cash consideration | $ | 7,498 | |
Fair value of the Class A Shares in BHGE issued to Baker Hughes shareholders | 17,300 | ||
Total consideration for Baker Hughes | $ | 24,798 |
PRELIMINARY IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED | |||
(In millions) | July 3, 2017 | ||
Cash and cash equivalents | $ | 4,133 | |
Accounts receivable | 2,383 | ||
Inventories | 1,695 | ||
Property, plant, and equipment - net | 4,868 | ||
Other intangible assets - net | 4,123 | ||
All other assets | 1,544 | ||
Accounts payable | (1,106 | ) | |
Borrowings | (3,370 | ) | |
Deferred taxes(a) | (464 | ) | |
All other liabilities | (2,288 | ) | |
Total identifiable net assets | 11,518 | ||
Fair value of existing noncontrolling interest | (76 | ) | |
Goodwill | 13,356 | ||
Total allocated purchase price | $ | 24,798 |
(a) | Includes an increase of approximately $ $1,051 million primarily related to fair value adjustments to identifiable assets and liabilities (excluding goodwill) partially offset by a tax asset of approximately $572 million associated with the recognition of foreign tax credits. |
(In millions) | Estimated fair value | Estimated useful life (in years) | ||
Trademarks - Baker Hughes | $ | 2,100 | Indefinite life | |
Customer-related | 1,260 | 15 | ||
Patents and technology | 550 | 10 | ||
Trademarks - Other | 70 | 10 | ||
Capitalized software | 90 | 3-7 | ||
In-process research and development | 45 | Indefinite life | ||
Favorable lease contracts | 8 | 10 | ||
Total | $ | 4,123 |
(In millions) | 2017 | 2016 | ||||
Revenues and other income | $ | 126,755 | $ | 133,526 | ||
Earnings (loss) from continuing operations | (5,817 | ) | 6,379 |
CHANGES IN GOODWILL BALANCES | |||||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||||
(In millions) | Balance at January 1 | Acquisitions | Dispositions, currency exchange and other | Balance at December 31 | Balance at January 1 | Acquisitions | Dispositions, currency exchange and other | Balance at December 31 | |||||||||||||||||
Power | $ | 26,403 | $ | 37 | $ | (1,171 | ) | $ | 25,269 | $ | 22,963 | $ | 4,131 | $ | (692 | ) | $ | 26,403 | |||||||
Renewable Energy | 2,507 | 1,503 | 83 | 4,093 | 2,580 | (46 | ) | (27 | ) | 2,507 | |||||||||||||||
Oil & Gas | 10,363 | 13,364 | 216 | 23,943 | 10,594 | — | (231 | ) | 10,363 | ||||||||||||||||
Aviation | 9,455 | 25 | 529 | 10,008 | 8,567 | 1,045 | (158 | ) | 9,455 | ||||||||||||||||
Healthcare | 17,424 | 60 | (178 | ) | 17,306 | 17,353 | 191 | (120 | ) | 17,424 | |||||||||||||||
Transportation | 899 | — | 3 | 902 | 851 | 41 | 6 | 899 | |||||||||||||||||
Lighting | 281 | — | (281 | ) | — | 214 | 63 | 5 | 281 | ||||||||||||||||
Capital | 2,368 | — | (1,384 | ) | 984 | 2,370 | — | (1 | ) | 2,368 | |||||||||||||||
Corporate | 739 | 727 | (3 | ) | 1,463 | 34 | 487 | 218 | 739 | ||||||||||||||||
Total | $ | 70,438 | $ | 15,716 | $ | (2,186 | ) | $ | 83,968 | $ | 65,526 | $ | 5,911 | $ | (1,000 | ) | $ | 70,438 |
OTHER INTANGIBLE ASSETS - NET | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Intangible assets subject to amortization | $ | 18,056 | $ | 16,336 | ||
Indefinite-lived intangible assets(a) | 2,217 | 100 | ||||
Total | $ | 20,273 | $ | 16,436 |
(a) | Indefinite-lived intangible assets principally comprise trademarks and in-process research and development. |
INTANGIBLE ASSETS SUBJECT TO AMORTIZATION | |||||||||||||||||||
2017 | 2016 | ||||||||||||||||||
December 31 (In millions) | Gross carrying amount | Accumulated amortization | Net | Gross carrying amount | Accumulated amortization | Net | |||||||||||||
Customer-related | $ | 10,614 | $ | (3,095 | ) | $ | 7,521 | $ | 9,172 | $ | (2,408 | ) | $ | 6,764 | |||||
Patents and technology | 10,271 | (3,899 | ) | 6,372 | 8,695 | (3,327 | ) | 5,368 | |||||||||||
Capitalized software | 8,064 | (4,974 | ) | 3,089 | 7,652 | (4,538 | ) | 3,114 | |||||||||||
Trademarks | 1,280 | (421 | ) | 859 | 1,165 | (307 | ) | 859 | |||||||||||
Lease valuations | 170 | (80 | ) | 89 | 143 | (59 | ) | 84 | |||||||||||
Present value of future profits(a) | — | — | — | 684 | (684 | ) | — | ||||||||||||
All other | 218 | (92 | ) | 125 | 273 | (124 | ) | 149 | |||||||||||
Total | $ | 30,618 | $ | (12,561 | ) | $ | 18,056 | $ | 27,783 | $ | (11,446 | ) | $ | 16,336 |
(a) | See Note 11 for discussion on the present value of future profits in our run-off insurance operations. |
ESTIMATED 5 YEAR CONSOLIDATED AMORTIZATION | |||||||||||||||
(In millions) | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||
Estimated annual pre-tax amortization | $ | 2,274 | $ | 2,148 | $ | 2,039 | $ | 1,878 | $ | 1,713 |
COMPONENTS OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED DURING 2017 | ||||
(In millions) | Gross carrying value | Weighted-average amortizable period (in years) | ||
Customer-related | $ | 1,451 | 14.9 | |
Patents and technology | 1,214 | 10.7 | ||
Capitalized software | 982 | 5.4 | ||
Trademarks | 91 | 8.6 | ||
Lease valuations | 8 | 10.0 | ||
All other | 19 | 8.6 |
(BENEFIT) PROVISION FOR INCOME TAXES | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
GE | |||||||||
Current tax expense (benefit) | $ | 2,810 | $ | (140 | ) | $ | 3,307 | ||
Deferred tax expense (benefit) from temporary differences | 449 | 1,107 | (1,800 | ) | |||||
3,259 | 967 | 1,506 | |||||||
GE Capital | |||||||||
Current tax expense (benefit) | (1,008 | ) | (1,138 | ) | 2,796 | ||||
Deferred tax expense (benefit) from temporary differences | (5,294 | ) | (293 | ) | 2,183 | ||||
(6,302 | ) | (1,431 | ) | 4,979 | |||||
Consolidated | |||||||||
Current tax expense (benefit) | 1,802 | (1,278 | ) | 6,103 | |||||
Deferred tax expense (benefit) from temporary differences | (4,845 | ) | 814 | 383 | |||||
Total | $ | (3,043 | ) | $ | (464 | ) | $ | 6,485 |
CONSOLIDATED EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
U.S. earnings | $ | (17,234 | ) | $ | 2,145 | $ | (309 | ) | |
Non-U.S. earnings | 8,443 | 6,885 | 8,495 | ||||||
Total | $ | (8,791 | ) | $ | 9,030 | $ | 8,186 |
CONSOLIDATED (BENEFIT) PROVISION FOR INCOME TAXES | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
U.S. Federal | |||||||||
Current | $ | (823 | ) | $ | (2,646 | ) | $ | 1,549 | |
Deferred | (4,261 | ) | (754 | ) | 492 | ||||
Non - U.S. | |||||||||
Current | 2,286 | 1,730 | 4,867 | ||||||
Deferred | (470 | ) | 1,239 | (121 | ) | ||||
Other | 225 | (33 | ) | (301 | ) | ||||
Total | $ | (3,043 | ) | $ | (464 | ) | $ | 6,485 |
RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO ACTUAL INCOME TAX RATE | ||||||||||||||||||||
Consolidated | GE | GE Capital | ||||||||||||||||||
2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||
U.S. federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | ||
Increase (reduction) in rate resulting from inclusion of after-tax earnings of GE Capital in before-tax earnings of GE | — | — | — | (81.0 | ) | 4.5 | 82.6 | — | — | — | ||||||||||
Tax on global activities including exports | 41.2 | (23.7 | ) | 54.1 | 71.0 | (20.8 | ) | (52.8 | ) | 12.2 | 4.9 | (224.5 | ) | |||||||
U.S. business credits(a) | 5.7 | (4.5 | ) | (4.7 | ) | 3.1 | (0.9 | ) | (4.1 | ) | 3.2 | 15.7 | 9.2 | |||||||
Tax Cuts and Jobs Act enactment | (37.8 | ) | — | — | (127.2 | ) | — | — | 3.1 | — | — | |||||||||
All other – net(b) | (9.5 | ) | (11.9 | ) | (5.2 | ) | (12.4 | ) | (7.9 | ) | (14.4 | ) | (3.6 | ) | 14.7 | (1.5 | ) | |||
(0.4 | ) | (40.1 | ) | 44.2 | (146.5 | ) | (25.1 | ) | 11.3 | 14.9 | 35.3 | (216.8 | ) | |||||||
Actual income tax rate | 34.6 | % | (5.1 | )% | 79.2 | % | (111.5 | )% | 9.9 | % | 46.3 | % | 49.9 | % | 70.3 | % | (181.8 | )% |
(a) | U.S. general business credits, primarily the credit for energy produced from renewable sources and the credit for research performed in the U.S. |
(b) | Includes, for each period, the expense or (benefit) for “Other” taxes reported above in the consolidated (benefit) provision for income taxes, net of 35.0% federal effect. |
UNRECOGNIZED TAX BENEFITS | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Unrecognized tax benefits | $ | 5,449 | $ | 4,692 | ||
Portion that, if recognized, would reduce tax expense and effective tax rate(a) | 3,626 | 2,886 | ||||
Accrued interest on unrecognized tax benefits | 810 | 615 | ||||
Accrued penalties on unrecognized tax benefits | 158 | 118 | ||||
Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months | 0-1,100 | 0-600 | ||||
Portion that, if recognized, would reduce tax expense and effective tax rate(a) | 0-900 | 0-500 |
(a) | Some portion of such reduction may be reported as discontinued operations. |
UNRECOGNIZED TAX BENEFITS RECONCILIATION | ||||||
(In millions) | 2017 | 2016 | ||||
Balance at January 1 | $ | 4,692 | $ | 6,778 | ||
Additions for tax positions of the current year | 260 | 248 | ||||
Additions for tax positions of prior years(a) | 791 | 521 | ||||
Reductions for tax positions of prior years | (113 | ) | (2,016 | ) | ||
Settlements with tax authorities | (57 | ) | (823 | ) | ||
Expiration of the statute of limitations | (124 | ) | (16 | ) | ||
Balance at December 31 | $ | 5,449 | $ | 4,692 |
(a) | For 2017, the amount shown as “additions for tax positions of prior years” included $326 million related to uncertain tax liabilities acquired in the Baker Hughes transaction. |
December 31 (In millions) | 2017 | 2016 | ||||
Assets | ||||||
GE | $ | 15,586 | $ | 21,106 | ||
GE Capital | 6,176 | 5,093 | ||||
21,762 | 26,199 | |||||
Liabilities | ||||||
GE | (10,382 | ) | (14,440 | ) | ||
GE Capital | (5,177 | ) | (9,926 | ) | ||
Eliminations | 4 | — | ||||
(15,555 | ) | (24,366 | ) | |||
Net deferred income tax asset (liability) | $ | 6,207 | $ | 1,833 |
COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY) | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
GE | ||||||
Principal pension plans | $ | 3,911 | $ | 8,963 | ||
Other non-current compensation and benefits | 2,780 | 4,230 | ||||
Provision for expenses | 2,499 | 2,633 | ||||
Retiree insurance plans | 1,152 | 2,000 | ||||
Non-U.S. loss carryforwards(a) | 2,078 | 1,444 | ||||
U.S. credit carryforwards(b) | 1,932 | 67 | ||||
Contract assets | (5,051 | ) | (6,677 | ) | ||
Intangible assets | (2,033 | ) | (2,962 | ) | ||
Depreciation | (1,022 | ) | (1,755 | ) | ||
Other – net | (1,042 | ) | (1,277 | ) | ||
5,204 | 6,666 | |||||
GE Capital | ||||||
Operating leases | (2,689 | ) | (3,582 | ) | ||
Financing leases | (877 | ) | (1,632 | ) | ||
Energy investments | (754 | ) | (1,410 | ) | ||
Intangible assets | (25 | ) | (125 | ) | ||
U.S. credit carryforwards(b) | 1,632 | 1,092 | ||||
Insurance company loss reserves | 1,373 | (819 | ) | |||
Non-U.S. loss carryforwards(a) | 1,271 | 1,323 | ||||
Other – net | 1,068 | 320 | ||||
999 | (4,833 | ) | ||||
Eliminations | 4 | — | ||||
Net deferred income tax asset (liability) | $ | 6,207 | $ | 1,833 |
(a) | Net of valuation allowances of $4,251 million and $2,450 million for GE and $448 million and $391 million for GE Capital, for 2017 and 2016, respectively. Of the net deferred tax asset as of December 31, 2017 of $3,349 million, $11 million relates to net operating loss carryforwards that expire in various years ending from December 31, 2018 through December 31, 2020; $342 million relates to net operating losses that expire in various years ending from December 31, 2021 through December 31, 2037 and $2,996 million relates to net operating loss carryforwards that may be carried forward indefinitely. |
(b) | Of the net deferred tax asset as of December 31, 2017 of $3,564 million for U.S. credit carryforwards, $1,194 million expires in the year ending December 31, 2027, $67 million expires in the years ending December 31, 2030 through 2032 and $2,303 million expires in various years ending from December 31, 2033 through December 31, 2037. |
(In millions) | 2017 | 2016 | 2015 | ||||||
GE | |||||||||
Purchases and sales of business interests(a) | $ | 656 | $ | 3,701 | $ | 1,020 | |||
Licensing and royalty income | 193 | 175 | 168 | ||||||
Associated companies | 202 | 76 | 45 | ||||||
Net interest and investment income | 299 | 167 | 65 | ||||||
Other items(b) | 86 | (27 | ) | 868 | |||||
1,436 | 4,092 | 2,165 | |||||||
Eliminations | 189 | (87 | ) | 62 | |||||
Total | $ | 1,625 | $ | 4,005 | $ | 2,227 |
(a) | Included a pre-tax gain of $1,943 million on the sale of our Water business, partially offset by a valuation allowance on businesses classified as held for sale of $1,378 million in 2017. Included a pre-tax gain of $3,136 million on the sale of our Appliances business and $398 million on the sale of GE Asset Management in 2016. Included a pre-tax gain of $623 million on the sale of our Signaling business in 2015. See Note 2. |
(b) | In 2015, included a $450 million from a settlement related to the NBCU transaction and a $175 million break-up fee from Electrolux. Included net gains on asset sales of $59 million, $101 million and $90 million in 2017, 2016 and 2015, respectively. |
(In millions) | 2017 | 2016 | 2015 | ||||||
GE | |||||||||
Purchases and sales of business interests(a) | $ | 656 | $ | 3,701 | $ | 1,020 | |||
Licensing and royalty income | 193 | 175 | 168 | ||||||
Associated companies | 202 | 76 | 45 | ||||||
Net interest and investment income | 299 | 167 | 65 | ||||||
Other items(b) | 86 | (27 | ) | 868 | |||||
1,436 | 4,092 | 2,165 | |||||||
Eliminations | 189 | (87 | ) | 62 | |||||
Total | $ | 1,625 | $ | 4,005 | $ | 2,227 |
(a) | Included a pre-tax gain of $1,943 million on the sale of our Water business, partially offset by a valuation allowance on businesses classified as held for sale of $1,378 million in 2017. Included a pre-tax gain of $3,136 million on the sale of our Appliances business and $398 million on the sale of GE Asset Management in 2016. Included a pre-tax gain of $623 million on the sale of our Signaling business in 2015. See Note 2. |
(b) | In 2015, included a $450 million from a settlement related to the NBCU transaction and a $175 million break-up fee from Electrolux. Included net gains on asset sales of $59 million, $101 million and $90 million in 2017, 2016 and 2015, respectively. |
December 31 (In millions) | 2017 | 2016 | ||||
Raw materials and work in process | $ | 11,757 | $ | 12,636 | ||
Finished goods | 9,169 | 8,798 | ||||
Unbilled shipments | 481 | 536 | ||||
21,407 | 21,971 | |||||
Revaluation to LIFO | 516 | 383 | ||||
Total inventories | $ | 21,923 | $ | 22,354 |
CONTRACTUAL MATURITIES OF INVESTMENT IN AVAILABLE-FOR-SALE DEBT SECURITIES | ||||||
(EXCLUDING MORTGAGE AND ASSET-BACKED SECURITIES) | ||||||
(In millions) | Amortized cost | Estimated fair value | ||||
Due | ||||||
Within one year | $ | 5,647 | $ | 5,648 | ||
After one year through five years | 3,297 | 3,454 | ||||
After five years through ten years | 5,611 | 6,156 | ||||
After ten years | 16,792 | 20,483 |
2017 | 2016 | ||||||||||||||||||||||||
December 31 (In millions) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value (a) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value (a) | |||||||||||||||||
Debt | |||||||||||||||||||||||||
U.S. corporate | $ | 20,104 | $ | 3,775 | $ | (35 | ) | $ | 23,843 | $ | 20,049 | $ | 3,081 | $ | (85 | ) | $ | 23,046 | |||||||
Non-U.S. corporate | 5,455 | 86 | (13 | ) | 5,528 | 11,917 | 98 | (27 | ) | 11,987 | |||||||||||||||
State and municipal | 3,775 | 534 | (40 | ) | 4,269 | 3,916 | 412 | (92 | ) | 4,236 | |||||||||||||||
Mortgage and asset-backed | 2,820 | 81 | (23 | ) | 2,878 | 2,787 | 111 | (37 | ) | 2,861 | |||||||||||||||
Government and agencies | 1,927 | 75 | (2 | ) | 2,000 | 1,842 | 160 | (26 | ) | 1,976 | |||||||||||||||
Equity (b) | 166 | 12 | — | 178 | 154 | 55 | (1 | ) | 208 | ||||||||||||||||
Total | $ | 34,246 | $ | 4,564 | $ | (114 | ) | $ | 38,696 | $ | 40,665 | $ | 3,917 | $ | (269 | ) | $ | 44,313 |
(a) | Included $569 million and $137 million of investment securities held by GE at December 31, 2017 and December 31, 2016, respectively, of which $141 million and $86 million are equity securities. |
(b) | Estimated fair values included $98 million and $17 million of trading securities at December 31, 2017 and December 31, 2016, respectively. Net unrealized gains (losses) recorded to earnings related to these securities were $29 million and $(2) million for the years ended December 31, 2017 and 2016, respectively. |
ESTIMATED FAIR VALUE AND GROSS UNREALIZED LOSSES OF AVAILABLE-FOR-SALE INVESTMENT SECURITIES | |||||||||||||
In loss position for | |||||||||||||
Less than 12 months | 12 months or more | ||||||||||||
(In millions) | Estimated fair value | Gross unrealized losses | Estimated fair value | Gross unrealized losses | |||||||||
December 31, 2017 | |||||||||||||
Debt | |||||||||||||
U.S. corporate | $ | 502 | $ | (6 | ) | $ | 605 | $ | (30 | ) | |||
Non-U.S. corporate | 1,169 | (4 | ) | 3,685 | (10 | ) | |||||||
State and municipal | 48 | (1 | ) | 272 | (39 | ) | |||||||
Mortgage and asset-backed | 979 | (11 | ) | 318 | (12 | ) | |||||||
Government and agencies | 395 | (2 | ) | 69 | — | ||||||||
Equity | — | — | — | — | |||||||||
Total | $ | 3,093 | $ | (23 | ) | $ | 4,949 | $ | (91 | ) | |||
December 31, 2016 | |||||||||||||
Debt | |||||||||||||
U.S. corporate | $ | 1,692 | $ | (55 | ) | $ | 359 | $ | (30 | ) | |||
Non-U.S. corporate | 5,352 | (26 | ) | 14 | (1 | ) | |||||||
State and municipal | 674 | (27 | ) | 158 | (64 | ) | |||||||
Mortgage and asset-backed | 822 | (21 | ) | 132 | (16 | ) | |||||||
Government and agencies | 549 | (26 | ) | — | — | ||||||||
Equity | 9 | (1 | ) | — | — | ||||||||
Total | $ | 9,098 | $ | (157 | ) | $ | 663 | $ | (111 | ) |
CONTRACTUAL MATURITIES OF INVESTMENT IN AVAILABLE-FOR-SALE DEBT SECURITIES | ||||||
(EXCLUDING MORTGAGE AND ASSET-BACKED SECURITIES) | ||||||
(In millions) | Amortized cost | Estimated fair value | ||||
Due | ||||||
Within one year | $ | 5,647 | $ | 5,648 | ||
After one year through five years | 3,297 | 3,454 | ||||
After five years through ten years | 5,611 | 6,156 | ||||
After ten years | 16,792 | 20,483 |
December 31 (In millions) | 2017 | 2016 | ||||
Future policy benefit reserves | ||||||
Long-term care insurance contracts | $ | 16,522 | $ | 7,629 | ||
Structured settlement annuities with life contingencies and other contracts | 9,448 | 9,267 | ||||
Shadow adjustments(a) | 4,582 | 1,845 | ||||
30,552 | 18,741 | |||||
Investment contracts | 2,569 | 2,813 | ||||
Claim reserves(b) | 5,094 | 4,606 | ||||
Unearned premiums and other | 372 | 386 | ||||
38,587 | 26,546 | |||||
Eliminations | (451 | ) | (460 | ) | ||
Total | $ | 38,136 | $ | 26,086 |
(a) | To the extent that unrealized gains on specific investment securities supporting our insurance contracts would result in a premium deficiency should those gains be realized, an increase in future policy benefit reserves is recorded, with an after-tax reduction of net unrealized gains recognized through Other comprehensive income. |
(b) | Included $3,590 million and $3,129 million related to long term-care insurance contracts and $364 million and $362 million related to short-duration contracts, net of eliminations, at December 31, 2017 and December 31, 2016, respectively. |
Consolidated(a)(b) | GE(c)(d) | ||||||||||||
December 31 (In millions) | 2017 | 2016 | 2017 | 2016 | |||||||||
Power | $ | 9,735 | $ | 10,055 | $ | 4,664 | $ | 5,134 | |||||
Renewable Energy | 1,666 | 1,903 | 940 | 1,293 | |||||||||
Oil & Gas | 5,952 | 4,259 | 5,830 | 2,478 | |||||||||
Aviation | 3,738 | 3,542 | 1,875 | 1,731 | |||||||||
Healthcare | 3,725 | 3,996 | 2,052 | 2,068 | |||||||||
Transportation | 287 | 377 | 183 | 186 | |||||||||
Lighting | 105 | 349 | 36 | 173 | |||||||||
Corporate and eliminations | 304 | 454 | 342 | 499 | |||||||||
25,511 | 24,935 | 15,922 | 13,562 | ||||||||||
Less Allowance for losses | (1,073 | ) | (858 | ) | (1,055 | ) | (847 | ) | |||||
Total | $ | 24,438 | $ | 24,076 | $ | 14,867 | $ | 12,715 |
(a) | Included GE industrial customer receivables sold to a GE Capital affiliate and recorded on GE Capital's balance sheet of $10,370 million and $12,304 million at December 31, 2017 and 2016, respectively. The consolidated total included a deferred purchase price receivable of $388 million and $483 million at December 31, 2017 and 2016, respectively, related to our Receivables Facility. |
(b) | In order to manage short-term liquidity and credit exposure, the Company sells additional current receivables to third parties outside the Receivables Facility, substantially all of which are serviced by the Company. The outstanding balance of these current receivables was $2,541 million and $3,821 million at December 31, 2017 and 2016, respectively. Of these balances, $1,621 million and $2,504 million was sold by GE to GE Capital prior to the sale to third parties at December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, our maximum exposure to loss under the limited recourse arrangements is $90 million and $215 million, respectively. |
(c) | GE current receivables of $312 million and $299 million at December 31, 2017 and 2016, respectively, arose from sales, principally of Aviation goods and services, on open account to various agencies of the U.S. government. As a percentage of GE revenues, approximately 4% of GE sales of goods and services were to the U.S. government in 2017, compared with 3% in 2016 and 4% in 2015. |
(d) | GE current receivables balances at December 31, 2017 and 2016, before allowance for losses, included $10,671 million and $8,927 million, respectively, from sales of goods and services to customers. The remainder of the balances primarily relates to supplier advances, revenue sharing programs and other non-income based tax receivables. |
December 31, 2017 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Revenue in excess of billings | |||||||||||||||||||||
Long-term product service agreements(b)(f) | $ | 7,439 | $ | 5,265 | $ | 1,266 | $ | 1 | $ | 1,186 | $ | — | $ | 15,157 | |||||||
Long-term equipment contract revenue(c) | 3,777 | 1,833 | 997 | 254 | 69 | 25 | 6,954 | ||||||||||||||
Total revenue in excess of billings | 11,215 | 7,098 | 2,263 | 255 | 1,254 | 25 | 22,111 | ||||||||||||||
Deferred inventory costs(d) | 1,565 | 528 | 338 | 1,042 | 46 | 319 | 3,839 | ||||||||||||||
Nonrecurring engineering costs(e) | 7 | 1,720 | — | — | 87 | — | 1,814 | ||||||||||||||
Customer advances and other | — | 1,098 | — | — | — | — | 1,097 | ||||||||||||||
Contract assets | $ | 12,786 | $ | 10,445 | $ | 2,602 | $ | 1,297 | $ | 1,388 | $ | 344 | $ | 28,861 |
December 31, 2016 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Revenue in excess of billings | |||||||||||||||||||||
Long-term product service agreements(b) | $ | 6,595 | $ | 4,861 | $ | 508 | $ | 1 | $ | 787 | $ | — | $ | 12,752 | |||||||
Long-term equipment contract revenue(c) | 3,062 | 1,673 | 709 | 315 | 55 | 45 | 5,859 | ||||||||||||||
Total revenue in excess of billings | 9,657 | 6,534 | 1,217 | 316 | 843 | 45 | 18,611 | ||||||||||||||
Deferred inventory costs(d) | 1,168 | 650 | 217 | 923 | 40 | 350 | 3,349 | ||||||||||||||
Nonrecurring engineering costs(e) | 18 | 2,083 | — | — | 85 | — | 2,185 | ||||||||||||||
Customer advances and other | 10 | 993 | — | — | 1 | 13 | 1,018 | ||||||||||||||
Contract assets | $ | 10,852 | $ | 10,261 | $ | 1,433 | $ | 1,239 | $ | 969 | $ | 408 | $ | 25,162 |
(a) | Primarily includes our Healthcare segment |
(b) | Long-term product service agreement balances are presented net of related billings in excess of revenues of $3,037 million and $3,750 million at December 31, 2017 and 2016, respectively. |
(c) | Reflects revenues earned in excess of billings on our long-term contracts to construct technically complex equipment (such as gas power systems or commercial aircraft engines). |
(d) | Represents cost deferral for shipped goods (such as components for wind turbine assembly within our Renewable Energy segment) and labor and overhead costs on time and material service contracts (primarily originating in Power and Aviation) and other costs for which the criteria for revenue recognition has not yet been met. |
(e) | Includes costs incurred prior to production (e.g., requisition engineering) for long-term equipment production contracts, primarily within our Aviation segment, which are allocated ratably to each unit produced. |
(f) | The assets of legacy GE Oil & Gas were contributed to BHGE upon formation. The contributed assets included certain small-scale liquefied natural gas (LNG) contracts that were historically reported in our Power segment; therefore, on January 1, 2017, $236 million was transferred to Oil & Gas and additional $239 million was transferred to Oil & Gas on July 3, 2017 at the completion of the transaction. |
2017 | 2016 | 2015 | |||||||
Weighted-average grant-date fair value of restricted stock awards | $ | 24.89 | $ | 30.20 | $ | 26.74 |
As of December 31, 2017, unless otherwise stated (in thousands, except per-share data) | |||
Restricted stock units granted during 2017 | 7,715 | ||
Non-vested restricted stock units outstanding | 17,233 | ||
Weighted-average fair value at grant date of non-vested stock | $ | 26.94 |
• | Service cost – the cost of benefits earned by active employees who participate in the plan. |
• | Prior service cost (credit) amortization – the cost of changes to our benefits plans (plan amendments) related to prior service performed. |
• | Expected return on plan assets – the return we expect to earn on plan investments used to pay future benefits. |
• | Interest cost – the accrual of interest on the pension obligations due to the passage of time. |
• | Net actuarial loss (gain) amortization – differences between our estimates, (for example, discount rate, expected return on plan assets) and our actual experience which are initially recorded in equity and amortized into earnings. |
• | Curtailment loss (gain) – earnings effects of amounts previously deferred which have been accelerated because of an event that shortens future service or eliminates benefits (for example, a sale of a business). |
COST OF PENSION PLANS | |||||||||||||||||||||||||||||
Total | Principal pension plans | Other pension plans | |||||||||||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Service cost for benefits earned | $ | 1,629 | $ | 1,699 | $ | 1,840 | $ | 1,055 | $ | 1,237 | $ | 1,424 | $ | 574 | $ | 462 | $ | 416 | |||||||||||
Prior service cost (credit) amortization | 285 | 304 | 205 | 290 | 303 | 205 | (5 | ) | 1 | — | |||||||||||||||||||
Expected return on plan assets | (4,639 | ) | (4,370 | ) | (4,183 | ) | (3,390 | ) | (3,336 | ) | (3,302 | ) | (1,249 | ) | (1,034 | ) | (881 | ) | |||||||||||
Interest cost on benefit obligations | 3,462 | 3,609 | 3,333 | 2,856 | 2,939 | 2,778 | 606 | 670 | 555 | ||||||||||||||||||||
Net actuarial loss amortization | 3,241 | 2,705 | 3,577 | 2,812 | 2,449 | 3,288 | 429 | 256 | 289 | ||||||||||||||||||||
Curtailment loss (gain) | 43 | 50 | 99 | 64 | 31 | 105 | (21 | ) | 19 | (6 | ) | ||||||||||||||||||
Pension cost | $ | 4,021 | $ | 3,997 | $ | 4,871 | $ | 3,687 | $ | 3,623 | $ | 4,498 | $ | 334 | $ | 374 | $ | 373 |
ASSUMPTIONS USED TO MEASURE PENSION BENEFIT OBLIGATIONS | |||||||||||||
Principal pension plans | Other pension plans (weighted average) | ||||||||||||
December 31 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||
Discount rate | 3.64 | % | 4.11 | % | 4.38 | % | 2.45 | % | 2.58 | % | 3.33 | % | |
Compensation increases | 3.55 | 3.80 | 3.80 | 3.12 | 3.48 | 3.32 |
ASSUMPTIONS USED TO MEASURE PENSION COST | |||||||||||||
Principal pension plans | Other pension plans (weighted average) | ||||||||||||
December 31 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||
Discount rate | 4.11 | % | 4.38 | % | 4.02 | % | 2.58 | % | 3.33 | % | 3.53 | % | |
Expected return on assets | 7.50 | 7.50 | 7.50 | 6.75 | 6.36 | 6.95 |
FUNDED STATUS | |||||||||||||
Principal pension plans | Other pension plans | ||||||||||||
December 31 (in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||
Projected benefit obligations | $ | 74,985 | $ | 71,501 | $ | 25,303 | $ | 22,543 | |||||
Fair value of plan assets | 50,361 | 45,893 | 21,224 | 17,091 | |||||||||
Underfunded | $ | 24,624 | $ | 25,608 | $ | 4,079 | $ | 5,452 |
PROJECTED BENEFIT OBLIGATIONS (PBO) | |||||||||||||||
Principal pension plans | Other pension plans | ||||||||||||||
(In millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Balance at January 1 | $ | 71,501 | $ | 68,722 | $ | 22,543 | $ | 21,618 | |||||||
Service cost for benefits earned | 1,055 | 1,237 | 574 | 462 | |||||||||||
Interest cost on benefit obligations | 2,856 | 2,939 | 606 | 670 | |||||||||||
Participant contributions | 91 | 115 | 42 | 43 | |||||||||||
Plan amendments | — | — | — | (54 | ) | ||||||||||
Actuarial loss (gain) | 3,300 | (a) | 1,874 | (b) | (181 | ) | 2,993 | (a) | |||||||
Benefits paid | (3,818 | ) | (3,386 | ) | (977 | ) | (842 | ) | |||||||
Acquisitions (dispositions) / other - net | — | — | 1,321 | (98 | ) | ||||||||||
Exchange rate adjustments | — | — | 1,375 | (2,249 | ) | ||||||||||
Balance at December 31 | $ | 74,985 | (c) | $ | 71,501 | (c) | 25,303 | 22,543 |
(a) | Principally associated with discount rate changes. |
(b) | Principally associated with discount rate and mortality assumption changes. |
(c) | The PBO for the GE Supplementary Pension Plan, which is an unfunded plan, was $6,682 million and $6,531 million at year-end 2017 and 2016, respectively. |
Principal pension plans | Other pension plans | ||||||||||||
December 31 (in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||
Global equity | $ | 9,192 | $ | 15,504 | $ | 6,323 | $ | 5,746 | |||||
Debt securities | |||||||||||||
Fixed income and cash investment funds | 1,200 | 1,062 | 6,242 | 5,281 | |||||||||
U.S. corporate(a) | 6,597 | 5,252 | 393 | 319 | |||||||||
Other debt securities(b) | 5,225 | 5,066 | 599 | 577 | |||||||||
Real estate | 2,125 | 1,857 | 222 | 153 | |||||||||
Private equities & other investments | 581 | 258 | 481 | 346 | |||||||||
Total | 24,920 | 28,999 | 14,260 | 12,422 | |||||||||
Investments measured at net asset value (NAV) | |||||||||||||
Global equity | 13,790 | 5,655 | 1,871 | 1,257 | |||||||||
Debt securities | 4,107 | 3,835 | 1,247 | 768 | |||||||||
Real estate | 1,258 | 1,387 | 1,598 | 1,296 | |||||||||
Private equities & other investments | 6,286 | 6,017 | 2,248 | 1,348 | |||||||||
Total plan assets at fair value | $ | 50,361 | $ | 45,893 | $ | 21,224 | $ | 17,091 |
(a) | Primarily represented investment-grade bonds of U.S. issuers from diverse industries. |
(b) | Primarily represented investments in residential and commercial mortgage-backed securities, non-U.S. corporate and government bonds and U.S. government, federal agency, state and municipal debt. |
FAIR VALUE OF PLAN ASSETS | |||||||||||||
Principal pension plans | Other pension plans | ||||||||||||
(In millions) | 2017 | 2016 | 2017 | 2016 | |||||||||
Balance at January 1 | $ | 45,893 | $ | 45,720 | $ | 17,091 | $ | 17,368 | |||||
Actual gain on plan assets | 6,217 | 2,892 | 1,977 | 1,743 | |||||||||
Employer contributions | 1,978 | 552 | 870 | 795 | |||||||||
Participant contributions | 91 | 115 | 42 | 43 | |||||||||
Benefits paid | (3,818 | ) | (3,386 | ) | (977 | ) | (842 | ) | |||||
Acquisitions (dispositions) / other - net | — | — | 1,221 | (81 | ) | ||||||||
Exchange rate adjustments | — | — | 1,000 | (1,935 | ) | ||||||||
Balance at December 31 | $ | 50,361 | $ | 45,893 | $ | 21,224 | $ | 17,091 |
ASSET ALLOCATION | ||||||||
Principal pension plans | Other pension plans (weighted average) | |||||||
2017 | 2017 | 2017 | 2017 | |||||
December 31 | Target allocation | Actual allocation | Target allocation | Actual allocation | ||||
Global equity | 33.5 - 53.5% | 46 | % | 37 | % | 39 | % | |
Debt securities (including cash equivalents) | 15.0 - 58.5 | 34 | 36 | 40 | ||||
Real estate | 5.0 - 15.0 | 7 | 10 | 9 | ||||
Private equities & other investments | 6.5 - 16.5 | 13 | 17 | 12 |
Principal pension plans | Other pension plans | ||||||||||||
December 31 (in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||
Prior service cost (credit) | $ | 784 | $ | 1,138 | $ | (100 | ) | $ | (88 | ) | |||
Net actuarial loss | 14,326 | 16,664 | 3,712 | 4,800 | |||||||||
Total | $ | 15,110 | $ | 17,802 | $ | 3,612 | $ | 4,712 |
ESTIMATED FUTURE BENEFIT PAYMENTS | ||||||||||||||||||
2023 - | ||||||||||||||||||
(In millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2027 | ||||||||||||
Principal pension plans | $ | 3,600 | $ | 3,685 | $ | 3,775 | $ | 3,850 | $ | 3,910 | $ | 20,510 | ||||||
Other pension plans | 975 | 995 | 1,005 | 1,020 | 1,045 | 5,520 |
COST OF PRINCIPAL RETIREE BENEFIT PLANS | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
Service cost for benefits earned | $ | 94 | $ | 123 | $ | 145 | |||
Prior service credit amortization | (171 | ) | (164 | ) | (8 | ) | |||
Expected return on plan assets | (36 | ) | (43 | ) | (48 | ) | |||
Interest cost on benefit obligations | 224 | 249 | 335 | ||||||
Net actuarial gain amortization | (80 | ) | (50 | ) | (25 | ) | |||
Curtailment loss (gain)(a) | 4 | — | (225 | ) | |||||
Benefit plans cost | $ | 35 | $ | 115 | $ | 174 |
(a) | In 2015, gain principally resulting from life insurance amendment. |
ASSUMPTIONS USED TO MEASURE BENEFIT OBLIGATIONS | ||||||
December 31 | 2017 | 2016 | 2015 | |||
Discount rate | 3.43 | % | 3.75 | % | 3.93 | % |
Compensation increases | 3.55 | 3.80 | 3.80 | |||
Initial healthcare trend rate(a) | 6.00 | 6.00 | 6.00 |
(a) | For 2017, ultimately declining to 5% for 2030 and thereafter. |
ASSUMPTIONS USED TO MEASURE BENEFIT COST | ||||||
December 31 | 2017 | 2016 | 2015 | |||
Discount rate(a) | 3.75 | % | 3.93 | % | 3.89 | % |
Expected return on assets | 7.00 | 7.00 | 7.00 |
(a) | Weighted average discount rates of 3.86% and 3.92% were used for determination of costs in 2016 and 2015, respectively. |
FUNDED STATUS | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Accumulated postretirement benefit obligation | $ | 6,006 | $ | 6,289 | ||
Fair value of plan assets | 518 | 575 | ||||
Underfunded | $ | 5,488 | $ | 5,714 |
ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION | ||||||
(In millions) | 2017 | 2016 | ||||
Balance at January 1 | $ | 6,289 | $ | 6,757 | ||
Service cost for benefits earned | 94 | 123 | ||||
Interest cost on benefit obligations | 224 | 249 | ||||
Participant contributions | 54 | 51 | ||||
Plan amendments | (8 | ) | (7 | ) | ||
Actuarial gain(a) | (94 | ) | (291 | ) | ||
Benefits paid | (580 | ) | (603 | ) | ||
Acquisitions (dispositions) / other - net | 27 | 10 | ||||
Balance at December 31(b) | $ | 6,006 | $ | 6,289 |
(a) | In 2016, primarily associated with lower costs from new healthcare supplier contracts. |
(b) | The benefit obligation for retiree health plans was $4,084 million and $4,366 million at December 31, 2017 and 2016, respectively. |
December 31 (in millions) | 2017 | 2016 | ||||
Global equity | $ | — | $ | 289 | ||
Debt securities | ||||||
Fixed income and cash investment funds | 16 | 30 | ||||
U.S. corporate | 19 | 38 | ||||
Other debt securities | 66 | 82 | ||||
Private equities & other investments | 21 | 3 | ||||
Total | 122 | 442 | ||||
Investments measured at net asset value (NAV) | ||||||
Global equity | 321 | 50 | ||||
Debt securities | 28 | — | ||||
Private equities & other investments | 47 | 83 | ||||
Total plan assets at fair value | $ | 518 | $ | 575 |
FAIR VALUE OF PLAN ASSETS | ||||||
(In millions) | 2017 | 2016 | ||||
Balance at January 1 | $ | 575 | $ | 695 | ||
Actual gain on plan assets | 82 | 22 | ||||
Employer contributions | 387 | 410 | ||||
Participant contributions | 54 | 51 | ||||
Benefits paid | (580 | ) | (603 | ) | ||
Balance at December 31 | $ | 518 | $ | 575 |
ASSET ALLOCATION | |||
2017 | 2017 | ||
December 31 | Target allocation | Actual allocation | |
Global equity | 54 - 74% | 62 | % |
Debt securities (including cash equivalents) | 16 - 55 | 25 | |
Private equities & other investments | 0 - 12 | 13 |
December 31 (In millions) | 2017 | 2016 | ||||
Prior service credit | $ | (2,814 | ) | $ | (2,975 | ) |
Net actuarial gain | (732 | ) | (682 | ) | ||
Total | $ | (3,546 | ) | $ | (3,657 | ) |
ESTIMATED FUTURE BENEFIT PAYMENTS | ||||||||||||||||||
2023 - | ||||||||||||||||||
(In millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2027 | ||||||||||||
$ | 585 | $ | 555 | $ | 525 | $ | 500 | $ | 485 | $ | 2,090 |
2017 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME | ||||||||||||
(In millions) | Total postretirement benefit plans | Principal pension plans | Other pension plans | Principal retiree benefit plans | ||||||||
Cost of postretirement benefit plans | $ | 4,056 | $ | 3,687 | $ | 334 | $ | 35 | ||||
Changes in other comprehensive income | ||||||||||||
Prior service cost (credit) – current year | (8 | ) | — | — | (8 | ) | ||||||
Net actuarial loss (gain) – current year | (310 | ) | 474 | (656 | ) | (128 | ) | |||||
Reclassification out of AOCI: | ||||||||||||
Net curtailment gain (loss) | (88 | ) | (64 | ) | (20 | ) | (4 | ) | ||||
Prior service credit (cost) amortization | (114 | ) | (290 | ) | 5 | 171 | ||||||
Net actuarial gain (loss) amortization | (3,161 | ) | (2,812 | ) | (429 | ) | 80 | |||||
Total changes in other comprehensive income | (3,681 | ) | (2,692 | ) | (1,100 | ) | 111 | |||||
Cost of postretirement benefit plans and changes in other comprehensive income | $ | 375 | $ | 995 | $ | (766 | ) | $ | 146 |
2016 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME | ||||||||||||
(In millions) | Total postretirement benefit plans | Principal pension plans | Other pension plans | Principal retiree benefit plans | ||||||||
Cost of postretirement benefit plans | $ | 4,112 | $ | 3,623 | $ | 374 | $ | 115 | ||||
Changes in other comprehensive income | ||||||||||||
Prior service cost (credit) – current year | (61 | ) | — | (54 | ) | (7 | ) | |||||
Net actuarial loss (gain) – current year | 4,038 | 2,317 | 1,989 | (268 | ) | |||||||
Reclassification out of AOCI: | ||||||||||||
Net curtailment gain (loss) | (50 | ) | (31 | ) | (19 | ) | — | |||||
Prior service credit (cost) amortization | (140 | ) | (303 | ) | (1 | ) | 164 | |||||
Net actuarial gain (loss) amortization | (2,655 | ) | (2,449 | ) | (256 | ) | 50 | |||||
Total changes in other comprehensive income | 1,132 | (466 | ) | 1,659 | (61 | ) | ||||||
Cost of postretirement benefit plans and changes in other comprehensive income | $ | 5,244 | $ | 3,157 | $ | 2,033 | $ | 54 |
2015 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME | ||||||||||||
(In millions) | Total postretirement benefit plans | Principal pension plans | Other pension plans | Principal retiree benefit plans | ||||||||
Cost of postretirement benefit plans | $ | 5,045 | $ | 4,498 | $ | 373 | $ | 174 | ||||
Changes in other comprehensive income | ||||||||||||
Prior service cost (credit) – current year | (2,401 | ) | 902 | (12 | ) | (3,291 | ) | |||||
Net actuarial loss (gain) – current year | (1,604 | ) | (1,022 | ) | (164 | ) | (418 | ) | ||||
Reclassification out of AOCI: | ||||||||||||
Net curtailment gain (loss) | 76 | (105 | ) | 6 | 175 | |||||||
Prior service credit (cost) amortization | (197 | ) | (205 | ) | — | 8 | ||||||
Net actuarial gain (loss) amortization | (3,552 | ) | (3,288 | ) | (289 | ) | 25 | |||||
Total changes in other comprehensive income | (7,678 | ) | (3,718 | ) | (459 | ) | (3,501 | ) | ||||
Cost of postretirement benefit plans and changes in other comprehensive income | $ | (2,633 | ) | $ | 780 | $ | (86 | ) | $ | (3,327 | ) |
Depreciable | |||||||||||||||||
lives-new | Original Cost | Net Carrying Value | |||||||||||||||
December 31 (Dollars in millions) | (in years) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
GE | |||||||||||||||||
Land and improvements | 8 | (a) | $ | 1,175 | $ | 932 | $ | 1,154 | $ | 915 | |||||||
Buildings, structures and related equipment | 8-40 | 11,486 | 9,699 | 6,913 | 5,180 | ||||||||||||
Machinery and equipment | 4-20 | 26,702 | 24,599 | 12,734 | 10,181 | ||||||||||||
Leasehold costs and manufacturing plant under construction | 1-10 | 3,862 | 3,407 | 3,162 | 2,827 | ||||||||||||
$ | 43,225 | $ | 38,637 | $ | 23,963 | $ | 19,103 | ||||||||||
GE Capital(b) | |||||||||||||||||
Land and improvements, buildings, structures and related equipment | 1-39 | (a) | $ | 171 | $ | 238 | $ | 45 | $ | 68 | |||||||
Equipment leased to others | |||||||||||||||||
Aircraft(c) | 15-20 | 46,296 | 47,360 | 30,067 | 31,786 | ||||||||||||
All other | 4-35 | 718 | 587 | 483 | 371 | ||||||||||||
47,185 | 48,185 | 30,595 | 32,225 | ||||||||||||||
Eliminations | (802 | ) | (925 | ) | (684 | ) | (809 | ) | |||||||||
Total | $ | 89,608 | $ | 85,897 | $ | 0 | $ | 53,874 | $ | 50,518 |
(a) | Depreciable lives exclude land. |
(b) | Included $1,414 million and $1,457 million of original cost of assets leased to GE with accumulated amortization of $193 million and $147 million at December 31, 2017 and 2016, respectively. |
(c) | The GECAS business of GE Capital recognized impairment losses of $145 million and $99 million in 2017 and 2016, respectively. These losses are recorded in the caption “Cost of services sold” in the Statement of Earnings (Loss) to reflect adjustments to fair value based on management’s best estimates, which are benchmarked against third-party appraiser current market values for aircraft of similar type and age. |
(In millions) | |||
Due in | |||
2018 | $ | 3,298 | |
2019 | 2,902 | ||
2020 | 2,597 | ||
2021 | 2,204 | ||
2022 | 1,815 | ||
2023 and later | 5,590 | ||
Total | $ | 18,407 |
Depreciable | |||||||||||||||||
lives-new | Original Cost | Net Carrying Value | |||||||||||||||
December 31 (Dollars in millions) | (in years) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
GE | |||||||||||||||||
Land and improvements | 8 | (a) | $ | 1,175 | $ | 932 | $ | 1,154 | $ | 915 | |||||||
Buildings, structures and related equipment | 8-40 | 11,486 | 9,699 | 6,913 | 5,180 | ||||||||||||
Machinery and equipment | 4-20 | 26,702 | 24,599 | 12,734 | 10,181 | ||||||||||||
Leasehold costs and manufacturing plant under construction | 1-10 | 3,862 | 3,407 | 3,162 | 2,827 | ||||||||||||
$ | 43,225 | $ | 38,637 | $ | 23,963 | $ | 19,103 | ||||||||||
GE Capital(b) | |||||||||||||||||
Land and improvements, buildings, structures and related equipment | 1-39 | (a) | $ | 171 | $ | 238 | $ | 45 | $ | 68 | |||||||
Equipment leased to others | |||||||||||||||||
Aircraft(c) | 15-20 | 46,296 | 47,360 | 30,067 | 31,786 | ||||||||||||
All other | 4-35 | 718 | 587 | 483 | 371 | ||||||||||||
47,185 | 48,185 | 30,595 | 32,225 | ||||||||||||||
Eliminations | (802 | ) | (925 | ) | (684 | ) | (809 | ) | |||||||||
Total | $ | 89,608 | $ | 85,897 | $ | 0 | $ | 53,874 | $ | 50,518 |
(a) | Depreciable lives exclude land. |
(b) | Included $1,414 million and $1,457 million of original cost of assets leased to GE with accumulated amortization of $193 million and $147 million at December 31, 2017 and 2016, respectively. |
(c) | The GECAS business of GE Capital recognized impairment losses of $145 million and $99 million in 2017 and 2016, respectively. These losses are recorded in the caption “Cost of services sold” in the Statement of Earnings (Loss) to reflect adjustments to fair value based on management’s best estimates, which are benchmarked against third-party appraiser current market values for aircraft of similar type and age. |
First quarter | Second quarter | Third quarter | Fourth quarter | ||||||||||||||||||||||||
(In millions; per-share amounts in dollars) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Consolidated operations | |||||||||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 816 | $ | 415 | $ | 1,499 | $ | 3,363 | $ | 1,800 | $ | 2,056 | $ | (9,863 | ) | $ | 3,659 | ||||||||||
Earnings (loss) from discontinued operations | (239 | ) | (308 | ) | (146 | ) | (541 | ) | (106 | ) | (105 | ) | 182 | — | |||||||||||||
Net earnings (loss) | 577 | 107 | 1,354 | 2,823 | 1,694 | 1,951 | (9,681 | ) | 3,659 | ||||||||||||||||||
Less net earnings (loss) attributable to noncontrolling interests | (76 | ) | (121 | ) | (14 | ) | (86 | ) | (142 | ) | (76 | ) | (39 | ) | (8 | ) | |||||||||||
Net earnings (loss) attributable to the Company | $ | 653 | $ | 228 | $ | 1,367 | $ | 2,908 | $ | 1,836 | $ | 2,027 | $ | (9,642 | ) | $ | 3,667 | ||||||||||
Per-share amounts – earnings (loss) from continuing operations | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.10 | $ | 0.03 | $ | 0.15 | $ | 0.36 | $ | 0.22 | $ | 0.23 | $ | (1.15 | ) | $ | 0.39 | ||||||||||
Basic earnings (loss) per share | 0.10 | 0.03 | 0.15 | 0.36 | 0.22 | 0.24 | (1.15 | ) | 0.39 | ||||||||||||||||||
Per-share amounts – earnings (loss) from discontinued operations | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | (0.03 | ) | (0.03 | ) | (0.02 | ) | (0.06 | ) | (0.01 | ) | (0.01 | ) | 0.02 | 0.00 | |||||||||||||
Basic earnings (loss) per share | (0.03 | ) | (0.03 | ) | (0.02 | ) | (0.06 | ) | (0.01 | ) | (0.01 | ) | 0.02 | 0.00 | |||||||||||||
Per-share amounts – net earnings (loss) | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | 0.07 | (0.01 | ) | 0.13 | 0.30 | 0.21 | 0.22 | (1.13 | ) | 0.39 | |||||||||||||||||
Basic earnings (loss) per share | 0.07 | (0.01 | ) | 0.14 | 0.30 | 0.21 | 0.22 | (1.13 | ) | 0.40 | |||||||||||||||||
Selected data | |||||||||||||||||||||||||||
GE | |||||||||||||||||||||||||||
Sales of goods and services | $ | 25,392 | $ | 25,407 | $ | 27,293 | $ | 28,150 | $ | 29,438 | $ | 26,934 | $ | 31,356 | $ | 30,345 | |||||||||||
Gross profit from sales | 5,418 | 5,516 | 5,965 | 6,192 | 5,918 | 6,388 | 6,126 | 7,027 | |||||||||||||||||||
GE Capital | |||||||||||||||||||||||||||
Total revenues | 2,681 | 2,885 | 2,446 | 2,771 | 2,397 | 2,600 | 1,545 | 2,649 | |||||||||||||||||||
Earnings (loss) from continuing operations attributable to the Company | (13 | ) | (603 | ) | 10 | (448 | ) | 60 | 59 | (6,385 | ) | 397 |
Assets(a) | Property, plant and equipment additions(b) | Depreciation and amortization | |||||||||||||||||||||||||||
At December 31 | For the years ended December 31 | For the years ended December 31 | |||||||||||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Power | $ | 71,133 | $ | 71,678 | $ | 68,793 | $ | 1,072 | $ | 963 | $ | 3,195 | $ | 1,358 | $ | 1,549 | $ | 1,035 | |||||||||||
Renewable Energy | 10,813 | 8,794 | 9,468 | 624 | 166 | 999 | 259 | 183 | 116 | ||||||||||||||||||||
Oil & Gas | 59,784 | 24,615 | 26,126 | 5,469 | 284 | 422 | 1,026 | 529 | 596 | ||||||||||||||||||||
Aviation | 41,753 | 38,899 | 34,524 | 1,426 | 1,328 | 1,260 | 979 | 900 | 855 | ||||||||||||||||||||
Healthcare | 28,772 | 28,639 | 28,162 | 393 | 432 | 284 | 806 | 785 | 799 | ||||||||||||||||||||
Transportation | 4,490 | 4,288 | 4,368 | 128 | 108 | 202 | 135 | 168 | 188 | ||||||||||||||||||||
Lighting(c) | 724 | 1,659 | 4,702 | 34 | 160 | 275 | 86 | 173 | 103 | ||||||||||||||||||||
Capital(d) | 156,716 | 187,804 | 316,069 | 3,680 | 3,769 | 7,570 | 2,343 | 2,515 | 2,584 | ||||||||||||||||||||
Corporate items and eliminations(e) | 3,761 | (1,192 | ) | 858 | (100 | ) | 94 | (297 | ) | 367 | 337 | 231 | |||||||||||||||||
Total | $ | 377,945 | $ | 365,183 | $ | 493,071 | $ | 12,728 | $ | 7,305 | $ | 13,911 | $ | 7,358 | $ | 7,139 | $ | 6,508 |
(a) | Total assets of Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation and Capital operating segments at December 31, 2017, include investments in and advances to associated companies of $1,170 million, $89 million, $476 million, $1,900 million, $392 million, $56 million and $7,294 million, respectively. Lighting held an insignificant balance as of December 31, 2017. Investments in and advances to associated companies contributed approximately $81 million, $(4) million, $(5) million, $110 million, $17 million, $(1) million, $2 million and $(31) million to segment pre-tax income of Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation, Lighting and Capital operating segments, respectively. |
(b) | Additions to property, plant and equipment include amounts relating to principal businesses purchased. |
(c) | Lighting segment included Appliances for the year ended December 31, 2015. |
(d) | Includes Capital discontinued operations. |
(e) | Includes deferred income taxes that are presented as assets for purposes of our consolidating balance sheet presentation. |
PROFIT AND EARNINGS | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
Power | $ | 2,786 | $ | 5,091 | $ | 4,772 | |||
Renewable Energy | 727 | 576 | 431 | ||||||
Oil & Gas | 220 | 1,392 | 2,427 | ||||||
Aviation | 6,642 | 6,115 | 5,507 | ||||||
Healthcare | 3,448 | 3,161 | 2,882 | ||||||
Transportation | 824 | 1,064 | 1,273 | ||||||
Lighting(a) | 93 | 199 | 674 | ||||||
Total industrial segment profit | 14,740 | 17,598 | 17,966 | ||||||
Capital | (6,765 | ) | (1,251 | ) | (7,983 | ) | |||
Total segment profit | 7,975 | 16,347 | 9,983 | ||||||
Corporate items and eliminations | (7,871 | ) | (4,226 | ) | (5,108 | ) | |||
GE interest and other financial charges | (2,753 | ) | (2,026 | ) | (1,706 | ) | |||
GE provision for income taxes | (3,259 | ) | (967 | ) | (1,506 | ) | |||
Earnings (loss) from continuing operations attributable to GE common shareowners | (5,907 | ) | 9,128 | 1,663 | |||||
Earnings (loss) from discontinued operations, net of taxes | (309 | ) | (954 | ) | (7,495 | ) | |||
Less net earnings (loss) attributable to noncontrolling interests, discontinued operations | 6 | (1 | ) | 312 | |||||
Earnings (loss) from discontinued operations, net of taxes and noncontrolling interests | (315 | ) | (952 | ) | (7,807 | ) | |||
Consolidated net earnings (loss) attributable to GE common shareowners | $ | (6,222 | ) | $ | 8,176 | $ | (6,145 | ) |
(a) | Lighting segment included Appliances for the year ended December 31, 2015, and through its disposition in the second quarter of 2016. |
REVENUES | |||||||||||||||||||||||||||||
Total revenues(a) | Intersegment revenues(b) | External revenues | |||||||||||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Power | $ | 35,990 | $ | 36,795 | $ | 28,903 | $ | 1,392 | $ | 1,330 | $ | 1,574 | $ | 34,598 | $ | 35,465 | $ | 27,328 | |||||||||||
Renewable Energy | 10,280 | 9,033 | 6,273 | 69 | 11 | 12 | 10,211 | 9,022 | 6,261 | ||||||||||||||||||||
Oil & Gas | 17,231 | 12,898 | 16,450 | 646 | 383 | 387 | 16,584 | 12,515 | 16,063 | ||||||||||||||||||||
Aviation | 27,375 | 26,261 | 24,660 | 585 | 730 | 418 | 26,790 | 25,530 | 24,242 | ||||||||||||||||||||
Healthcare | 19,116 | 18,291 | 17,639 | 18 | 15 | 7 | 19,098 | 18,276 | 17,633 | ||||||||||||||||||||
Transportation | 4,178 | 4,713 | 5,933 | 10 | 1 | 1 | 4,168 | 4,713 | 5,932 | ||||||||||||||||||||
Lighting(c) | 1,987 | 4,823 | 8,751 | 31 | 28 | 22 | 1,956 | 4,795 | 8,729 | ||||||||||||||||||||
Total industrial segment revenues | 116,157 | 112,814 | 108,609 | 2,751 | 2,498 | 2,421 | 113,406 | 110,316 | 106,188 | ||||||||||||||||||||
Capital | 9,070 | 10,905 | 10,801 | 1,620 | 1,288 | 1,151 | 7,451 | 9,617 | 9,650 | ||||||||||||||||||||
Corporate items and eliminations | (3,135 | ) | (26 | ) | (2,024 | ) | (4,371 | ) | (3,786 | ) | (3,572 | ) | 1,236 | 3,760 | 1,548 | ||||||||||||||
Total | $ | 122,092 | $ | 123,693 | $ | 117,386 | $ | — | $ | — | $ | — | $ | 122,092 | $ | 123,693 | $ | 117,386 |
(a) | Revenues of GE businesses include income from sales of goods and services to customers and other income. |
(b) | Sales from one component to another generally are priced at equivalent commercial selling prices. |
(c) | Lighting segment included Appliances for the year ended December 31, 2015, and through its disposition in the second quarter of 2016 |
CHANGES TO REDEEMABLE NONCONTROLLING INTERESTS | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
Balance at January 1 | $ | 3,025 | $ | 2,972 | $ | 98 | |||
Net earnings (loss) | (254 | ) | (244 | ) | (46 | ) | |||
Dividends | (62 | ) | (17 | ) | (11 | ) | |||
Redemption value adjustment | 353 | 266 | 25 | ||||||
Other(a)(b) | 337 | 49 | 2,906 | ||||||
Balance at December 31(c) | $ | 3,399 | $ | 3,025 | $ | 2,972 |
(a) | In 2016, included $204 million related to the Concept Laser GmbH acquisition in our Aviation segment. |
(b) | Includes impact of foreign currency changes. |
(c) | Included $3,065 million, $2,709 million and $2,859 million related to Alstom joint ventures for the years ended December 31, 2017, 2016 and 2015. respectively. |
• | GE Capital dividends to GE, |
• | GE Capital working capital solutions to optimize GE cash management, |
• | GE Capital enabled GE industrial orders, including related GE guarantees to GE Capital, |
• | GE Capital financing of GE long-term receivables, and |
• | Aircraft engines, power equipment, renewable energy equipment and healthcare equipment manufactured by GE that are installed on GE Capital investments, including leased equipment. |
• | Expenses related to parent-subsidiary pension plans, |
• | Buildings and equipment leased between GE and GE Capital, including sale-leaseback transactions, |
• | Information technology (IT) and other services sold to GE Capital by GE |
• | Settlements of tax liabilities, and |
• | Various investments, loans and allocations of GE corporate overhead costs. |
(In millions) | 2017 | 2016 | 2015 | ||||||
Cash from (used for) operating activities-continuing operations | |||||||||
Combined | $ | 13,414 | $ | 28,408 | $ | 17,891 | |||
GE current receivables sold to GE Capital | 1,800 | 697 | (856 | ) | |||||
GE Capital dividends to GE | (4,016 | ) | (20,095 | ) | (4,300 | ) | |||
Other reclassifications and eliminations(a) | 196 | (2,911 | ) | (879 | ) | ||||
Total cash from (used for) operating activities-continuing operations | $ | 11,394 | $ | 6,099 | $ | 11,856 | |||
Cash from (used for) investing activities-continuing operations | |||||||||
Combined | $ | (46 | ) | $ | 58,134 | $ | 59,516 | ||
GE current receivables sold to GE Capital | (1,721 | ) | (230 | ) | 1,261 | ||||
GE Capital long-term loans to GE | 7,271 | — | — | ||||||
GE Capital short-term loan to GE | (1,329 | ) | 1,329 | — | |||||
Other reclassifications and eliminations(a) | (235 | ) | 3,380 | 836 | |||||
Total cash from (used for) investing activities-continuing operations | $ | 3,940 | $ | 62,613 | $ | 61,613 | |||
Cash from (used for) financing activities-continuing operations | |||||||||
Combined | $ | (19,089 | ) | $ | (107,750 | ) | $ | (73,484 | ) |
GE current receivables sold to GE Capital | (79 | ) | (467 | ) | (405 | ) | |||
GE Capital dividends to GE | 4,016 | 20,095 | 4,300 | ||||||
GE Capital long-term loans to GE | (7,271 | ) | — | — | |||||
GE Capital short-term loan to GE | 1,329 | (1,329 | ) | — | |||||
Other reclassifications and eliminations(a) | 39 | (469 | ) | 42 | |||||
Total cash from (used for) financing activities-continuing operations | $ | (21,055 | ) | $ | (89,920 | ) | $ | (69,547 | ) |
(a) | Includes eliminations of other cash flows activities, including those related to GE Capital enabled GE industrial orders, long-term receivables financing, various investments, loans and allocations of GE corporate overhead costs. |
Consolidated(a)(b) | GE(c)(d) | ||||||||||||
December 31 (In millions) | 2017 | 2016 | 2017 | 2016 | |||||||||
Power | $ | 9,735 | $ | 10,055 | $ | 4,664 | $ | 5,134 | |||||
Renewable Energy | 1,666 | 1,903 | 940 | 1,293 | |||||||||
Oil & Gas | 5,952 | 4,259 | 5,830 | 2,478 | |||||||||
Aviation | 3,738 | 3,542 | 1,875 | 1,731 | |||||||||
Healthcare | 3,725 | 3,996 | 2,052 | 2,068 | |||||||||
Transportation | 287 | 377 | 183 | 186 | |||||||||
Lighting | 105 | 349 | 36 | 173 | |||||||||
Corporate and eliminations | 304 | 454 | 342 | 499 | |||||||||
25,511 | 24,935 | 15,922 | 13,562 | ||||||||||
Less Allowance for losses | (1,073 | ) | (858 | ) | (1,055 | ) | (847 | ) | |||||
Total | $ | 24,438 | $ | 24,076 | $ | 14,867 | $ | 12,715 |
(a) | Included GE industrial customer receivables sold to a GE Capital affiliate and recorded on GE Capital's balance sheet of $10,370 million and $12,304 million at December 31, 2017 and 2016, respectively. The consolidated total included a deferred purchase price receivable of $388 million and $483 million at December 31, 2017 and 2016, respectively, related to our Receivables Facility. |
(b) | In order to manage short-term liquidity and credit exposure, the Company sells additional current receivables to third parties outside the Receivables Facility, substantially all of which are serviced by the Company. The outstanding balance of these current receivables was $2,541 million and $3,821 million at December 31, 2017 and 2016, respectively. Of these balances, $1,621 million and $2,504 million was sold by GE to GE Capital prior to the sale to third parties at December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, our maximum exposure to loss under the limited recourse arrangements is $90 million and $215 million, respectively. |
(c) | GE current receivables of $312 million and $299 million at December 31, 2017 and 2016, respectively, arose from sales, principally of Aviation goods and services, on open account to various agencies of the U.S. government. As a percentage of GE revenues, approximately 4% of GE sales of goods and services were to the U.S. government in 2017, compared with 3% in 2016 and 4% in 2015. |
(d) | GE current receivables balances at December 31, 2017 and 2016, before allowance for losses, included $10,671 million and $8,927 million, respectively, from sales of goods and services to customers. The remainder of the balances primarily relates to supplier advances, revenue sharing programs and other non-income based tax receivables. |
FINANCING RECEIVABLES – NET | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Loans, net of deferred income | $ | 17,404 | $ | 21,101 | ||
Investment in financing leases, net of deferred income | 4,614 | 4,998 | ||||
22,018 | 26,099 | |||||
Allowance for losses(a) | (51 | ) | (58 | ) | ||
Financing receivables – net | $ | 21,967 | $ | 26,041 |
COMPONENTS OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED DURING 2017 | ||||
(In millions) | Gross carrying value | Weighted-average amortizable period (in years) | ||
Customer-related | $ | 1,451 | 14.9 | |
Patents and technology | 1,214 | 10.7 | ||
Capitalized software | 982 | 5.4 | ||
Trademarks | 91 | 8.6 | ||
Lease valuations | 8 | 10.0 | ||
All other | 19 | 8.6 |
ASSET ALLOCATION | ||||||||
Principal pension plans | Other pension plans (weighted average) | |||||||
2017 | 2017 | 2017 | 2017 | |||||
December 31 | Target allocation | Actual allocation | Target allocation | Actual allocation | ||||
Global equity | 33.5 - 53.5% | 46 | % | 37 | % | 39 | % | |
Debt securities (including cash equivalents) | 15.0 - 58.5 | 34 | 36 | 40 | ||||
Real estate | 5.0 - 15.0 | 7 | 10 | 9 | ||||
Private equities & other investments | 6.5 - 16.5 | 13 | 17 | 12 |
ASSET ALLOCATION | |||
2017 | 2017 | ||
December 31 | Target allocation | Actual allocation | |
Global equity | 54 - 74% | 62 | % |
Debt securities (including cash equivalents) | 16 - 55 | 25 | |
Private equities & other investments | 0 - 12 | 13 |
Principal pension plans | Other pension plans | ||||||||||||
December 31 (in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||
Global equity | $ | 9,192 | $ | 15,504 | $ | 6,323 | $ | 5,746 | |||||
Debt securities | |||||||||||||
Fixed income and cash investment funds | 1,200 | 1,062 | 6,242 | 5,281 | |||||||||
U.S. corporate(a) | 6,597 | 5,252 | 393 | 319 | |||||||||
Other debt securities(b) | 5,225 | 5,066 | 599 | 577 | |||||||||
Real estate | 2,125 | 1,857 | 222 | 153 | |||||||||
Private equities & other investments | 581 | 258 | 481 | 346 | |||||||||
Total | 24,920 | 28,999 | 14,260 | 12,422 | |||||||||
Investments measured at net asset value (NAV) | |||||||||||||
Global equity | 13,790 | 5,655 | 1,871 | 1,257 | |||||||||
Debt securities | 4,107 | 3,835 | 1,247 | 768 | |||||||||
Real estate | 1,258 | 1,387 | 1,598 | 1,296 | |||||||||
Private equities & other investments | 6,286 | 6,017 | 2,248 | 1,348 | |||||||||
Total plan assets at fair value | $ | 50,361 | $ | 45,893 | $ | 21,224 | $ | 17,091 |
(a) | Primarily represented investment-grade bonds of U.S. issuers from diverse industries. |
(b) | Primarily represented investments in residential and commercial mortgage-backed securities, non-U.S. corporate and government bonds and U.S. government, federal agency, state and municipal debt. |
December 31 (in millions) | 2017 | 2016 | ||||
Global equity | $ | — | $ | 289 | ||
Debt securities | ||||||
Fixed income and cash investment funds | 16 | 30 | ||||
U.S. corporate | 19 | 38 | ||||
Other debt securities | 66 | 82 | ||||
Private equities & other investments | 21 | 3 | ||||
Total | 122 | 442 | ||||
Investments measured at net asset value (NAV) | ||||||
Global equity | 321 | 50 | ||||
Debt securities | 28 | — | ||||
Private equities & other investments | 47 | 83 | ||||
Total plan assets at fair value | $ | 518 | $ | 575 |
2017 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME | ||||||||||||
(In millions) | Total postretirement benefit plans | Principal pension plans | Other pension plans | Principal retiree benefit plans | ||||||||
Cost of postretirement benefit plans | $ | 4,056 | $ | 3,687 | $ | 334 | $ | 35 | ||||
Changes in other comprehensive income | ||||||||||||
Prior service cost (credit) – current year | (8 | ) | — | — | (8 | ) | ||||||
Net actuarial loss (gain) – current year | (310 | ) | 474 | (656 | ) | (128 | ) | |||||
Reclassification out of AOCI: | ||||||||||||
Net curtailment gain (loss) | (88 | ) | (64 | ) | (20 | ) | (4 | ) | ||||
Prior service credit (cost) amortization | (114 | ) | (290 | ) | 5 | 171 | ||||||
Net actuarial gain (loss) amortization | (3,161 | ) | (2,812 | ) | (429 | ) | 80 | |||||
Total changes in other comprehensive income | (3,681 | ) | (2,692 | ) | (1,100 | ) | 111 | |||||
Cost of postretirement benefit plans and changes in other comprehensive income | $ | 375 | $ | 995 | $ | (766 | ) | $ | 146 |
2016 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME | ||||||||||||
(In millions) | Total postretirement benefit plans | Principal pension plans | Other pension plans | Principal retiree benefit plans | ||||||||
Cost of postretirement benefit plans | $ | 4,112 | $ | 3,623 | $ | 374 | $ | 115 | ||||
Changes in other comprehensive income | ||||||||||||
Prior service cost (credit) – current year | (61 | ) | — | (54 | ) | (7 | ) | |||||
Net actuarial loss (gain) – current year | 4,038 | 2,317 | 1,989 | (268 | ) | |||||||
Reclassification out of AOCI: | ||||||||||||
Net curtailment gain (loss) | (50 | ) | (31 | ) | (19 | ) | — | |||||
Prior service credit (cost) amortization | (140 | ) | (303 | ) | (1 | ) | 164 | |||||
Net actuarial gain (loss) amortization | (2,655 | ) | (2,449 | ) | (256 | ) | 50 | |||||
Total changes in other comprehensive income | 1,132 | (466 | ) | 1,659 | (61 | ) | ||||||
Cost of postretirement benefit plans and changes in other comprehensive income | $ | 5,244 | $ | 3,157 | $ | 2,033 | $ | 54 |
2015 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME | ||||||||||||
(In millions) | Total postretirement benefit plans | Principal pension plans | Other pension plans | Principal retiree benefit plans | ||||||||
Cost of postretirement benefit plans | $ | 5,045 | $ | 4,498 | $ | 373 | $ | 174 | ||||
Changes in other comprehensive income | ||||||||||||
Prior service cost (credit) – current year | (2,401 | ) | 902 | (12 | ) | (3,291 | ) | |||||
Net actuarial loss (gain) – current year | (1,604 | ) | (1,022 | ) | (164 | ) | (418 | ) | ||||
Reclassification out of AOCI: | ||||||||||||
Net curtailment gain (loss) | 76 | (105 | ) | 6 | 175 | |||||||
Prior service credit (cost) amortization | (197 | ) | (205 | ) | — | 8 | ||||||
Net actuarial gain (loss) amortization | (3,552 | ) | (3,288 | ) | (289 | ) | 25 | |||||
Total changes in other comprehensive income | (7,678 | ) | (3,718 | ) | (459 | ) | (3,501 | ) | ||||
Cost of postretirement benefit plans and changes in other comprehensive income | $ | (2,633 | ) | $ | 780 | $ | (86 | ) | $ | (3,327 | ) |
ASSUMPTIONS USED TO MEASURE BENEFIT OBLIGATIONS | ||||||
December 31 | 2017 | 2016 | 2015 | |||
Discount rate | 3.43 | % | 3.75 | % | 3.93 | % |
Compensation increases | 3.55 | 3.80 | 3.80 | |||
Initial healthcare trend rate(a) | 6.00 | 6.00 | 6.00 |
(a) | For 2017, ultimately declining to 5% for 2030 and thereafter. |
ASSUMPTIONS USED TO MEASURE BENEFIT COST | ||||||
December 31 | 2017 | 2016 | 2015 | |||
Discount rate(a) | 3.75 | % | 3.93 | % | 3.89 | % |
Expected return on assets | 7.00 | 7.00 | 7.00 |
(a) | Weighted average discount rates of 3.86% and 3.92% were used for determination of costs in 2016 and 2015, respectively. |
ASSUMPTIONS USED TO MEASURE PENSION BENEFIT OBLIGATIONS | |||||||||||||
Principal pension plans | Other pension plans (weighted average) | ||||||||||||
December 31 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||
Discount rate | 3.64 | % | 4.11 | % | 4.38 | % | 2.45 | % | 2.58 | % | 3.33 | % | |
Compensation increases | 3.55 | 3.80 | 3.80 | 3.12 | 3.48 | 3.32 |
ASSUMPTIONS USED TO MEASURE PENSION COST | |||||||||||||
Principal pension plans | Other pension plans (weighted average) | ||||||||||||
December 31 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||
Discount rate | 4.11 | % | 4.38 | % | 4.02 | % | 2.58 | % | 3.33 | % | 3.53 | % | |
Expected return on assets | 7.50 | 7.50 | 7.50 | 6.75 | 6.36 | 6.95 |
2017 | 2016 | ||||||||||||||||||||||||
December 31 (In millions) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value (a) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value (a) | |||||||||||||||||
Debt | |||||||||||||||||||||||||
U.S. corporate | $ | 20,104 | $ | 3,775 | $ | (35 | ) | $ | 23,843 | $ | 20,049 | $ | 3,081 | $ | (85 | ) | $ | 23,046 | |||||||
Non-U.S. corporate | 5,455 | 86 | (13 | ) | 5,528 | 11,917 | 98 | (27 | ) | 11,987 | |||||||||||||||
State and municipal | 3,775 | 534 | (40 | ) | 4,269 | 3,916 | 412 | (92 | ) | 4,236 | |||||||||||||||
Mortgage and asset-backed | 2,820 | 81 | (23 | ) | 2,878 | 2,787 | 111 | (37 | ) | 2,861 | |||||||||||||||
Government and agencies | 1,927 | 75 | (2 | ) | 2,000 | 1,842 | 160 | (26 | ) | 1,976 | |||||||||||||||
Equity (b) | 166 | 12 | — | 178 | 154 | 55 | (1 | ) | 208 | ||||||||||||||||
Total | $ | 34,246 | $ | 4,564 | $ | (114 | ) | $ | 38,696 | $ | 40,665 | $ | 3,917 | $ | (269 | ) | $ | 44,313 |
(a) | Included $569 million and $137 million of investment securities held by GE at December 31, 2017 and December 31, 2016, respectively, of which $141 million and $86 million are equity securities. |
(b) | Estimated fair values included $98 million and $17 million of trading securities at December 31, 2017 and December 31, 2016, respectively. Net unrealized gains (losses) recorded to earnings related to these securities were $29 million and $(2) million for the years ended December 31, 2017 and 2016, respectively. |
PURCHASE PRICE | |||
(In millions) | July 3, 2017 | ||
Cash consideration | $ | 7,498 | |
Fair value of the Class A Shares in BHGE issued to Baker Hughes shareholders | 17,300 | ||
Total consideration for Baker Hughes | $ | 24,798 |
CASH FLOW HEDGE ACTIVITY | |||||||||||||||||||
Gain (loss) recognized in AOCI | Gain (loss) reclassified from AOCI into earnings | ||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||
Interest rate contracts | $ | 4 | $ | 6 | $ | (1 | ) | $ | (27 | ) | $ | (79 | ) | $ | (130 | ) | |||
Currency exchange contracts | 195 | (281 | ) | (907 | ) | 176 | (282 | ) | (784 | ) | |||||||||
Commodity contracts | — | — | (5 | ) | — | (2 | ) | (4 | ) | ||||||||||
Total(a) | $ | 199 | $ | (274 | ) | $ | (913 | ) | $ | 149 | $ | (364 | ) | $ | (918 | ) |
(a) | Gain (loss) is recorded in “GE Capital revenues from services”, “Interest and other financial charges”, and “Other costs and expenses” in our Statement of Earnings (Loss) when reclassified. |
Interest rate forwards/swaps | Interest rate increases | Interest rate decreases |
Pay fixed rate/receive floating rate | Fair value increases | Fair value decreases |
Currency forwards/swaps | U.S. dollar strengthens | U.S. dollar weakens |
Pay U.S. dollars/receive foreign currency | Fair value decreases | Fair value increases |
Commodity derivatives | Price increases | Price decreases |
Receive commodity/ pay fixed price | Fair value increases | Fair value decreases |
For the years ended December 31 (In millions) | 2017 | 2016 | 2015 | ||||||
All other operating activities | |||||||||
(Gains) losses on purchases and sales of business interests(a) | $ | (656 | ) | $ | (3,701 | ) | $ | (1,020 | ) |
Contract assets (net)(b) | (3,988 | ) | (3,929 | ) | (1,919 | ) | |||
Income taxes(c) | 110 | (2,752 | ) | 1,671 | |||||
Principal pension plans(d) | 1,709 | 3,071 | 4,265 | ||||||
Other postretirement benefit plans(e) | (888 | ) | (716 | ) | (503 | ) | |||
Intangible asset amortization | 2,154 | 2,011 | 1,514 | ||||||
Restructuring and other charges(f) | 3,162 | 1,702 | 637 | ||||||
Deferred income | 55 | (371 | ) | (86 | ) | ||||
Net earnings (loss) attributable to noncontrolling interests | (274 | ) | (279 | ) | 83 | ||||
Other(g) | (562 | ) | (2,474 | ) | (2,559 | ) | |||
$ | 822 | $ | (7,438 | ) | $ | 2,083 | |||
All other investing activities | |||||||||
Derivative settlements (net)(h) | $ | (1,142 | ) | $ | — | $ | — | ||
Investments in intangible assets (net) | (321 | ) | (499 | ) | (158 | ) | |||
Investments in associated companies (net) | (226 | ) | (420 | ) | (182 | ) | |||
Other investments (net) | (272 | ) | (175 | ) | (181 | ) | |||
Other(i) | (136 | ) | (558 | ) | (32 | ) | |||
$ | (2,097 | ) | $ | (1,652 | ) | $ | (553 | ) | |
Net dispositions (purchases) of GE shares for treasury | |||||||||
Open market purchases under share repurchase program(j) | $ | (3,506 | ) | $ | (22,581 | ) | $ | (2,709 | ) |
Other purchases | (67 | ) | (399 | ) | (58 | ) | |||
Dispositions | 1,021 | 1,550 | 1,668 | ||||||
$ | (2,550 | ) | $ | (21,429 | ) | $ | (1,099 | ) |
(a) | Included pre-tax gains on sales of businesses reclassified to Proceeds from principal business dispositions within Cash flows from investing activities of $(1,943) million for Water in 2017, $(3,136) million for Appliances and $(398) million for GE Asset Management in 2016, and $(623) million for Signaling in 2015, partially offset by a valuation allowance on businesses classified as held for sale of $1,378 million in 2017. See Notes 2 and 17. |
(b) | Contract assets are presented net of related billings in excess of revenues on our long-term product service agreements. See Note 9. |
(c) | Reflected the effects of current tax expense (benefit) of $2,810 million, $(140) million and $3,307 million and net cash paid during the year for income taxes of $(2,700) million, $(2,612) million and $(1,636) million for the years ended December 31, 2017, 2016 and 2015, respectively. Cash flows effects of deferred tax provisions (benefits) are shown separately within Cash flows from operating activities in the Statement of Cash Flows. See Note 13. |
(d) | Reflected the effects of pension costs of $3,687 million, $3,623 million and $4,498 million and employer contributions of $(1,978) million, $(552) million and $(233) million for the years ended December 31, 2017, 2016 and 2015, respectively. 2016 employer contributions included GE Pension Trust funding of $(330) million representing net sale proceeds associated with the sale of GE Asset Management. See Note12. |
(e) | Reflected the effects of other postretirement plans costs of $369 million, $489 million and $547 million and employer contributions of $(1,257) million, $(1,205) million and $(1,050) million for the years ended December 31, 2017, 2016 and 2015, respectively. See Note 12. |
(f) | Reflected the effects of restructuring and other charges of $5,158 million (which included pre-tax impairments related to Power Conversion goodwill of $1,164 million and a power plant asset of $315 million), $3,384 million and $1,671 million and restructuring and other cash expenditures of $(1,996) million, $(1,682) million and $(1,034) million for the years ended December 31, 2017, 2016 and 2015, respectively. Excludes non-cash adjustments reflected as Depreciation and amortization of property, plant and equipment in the Statement of Cash Flows. |
(g) | Included other non-cash adjustments to net income, such as write-downs of assets and the impacts of acquisition accounting and changes in other assets and other liabilities classified as operating activities. |
(h) | The classification of the settlement of derivative instruments was corrected from operating cash flows to investing cash flows in 2017. Such settlements of $178 million and $(199) million in 2016 and 2015, respectively, were not reclassified and corrected in investing cash flows in those periods as they were not considered material. |
(i) | Primarily included cash collateral held on long-term financing arrangements in 2016. |
(j) | Included $(11,370) million paid under ASR agreements in 2016. |
For the years ended December 31 (In millions) | 2017 | 2016 | 2015 | ||||||
All other operating activities | |||||||||
Cash collateral on derivative contracts | $ | 131 | $ | (428 | ) | $ | (1,936 | ) | |
Increase (decrease) in other liabilities | (1,566 | ) | (2,616 | ) | 4,860 | ||||
Other(a) | 13,237 | (10 | ) | 2,163 | |||||
$ | 11,802 | $ | (3,054 | ) | $ | 5,087 | |||
Net decrease (increase) in GE Capital financing receivables | |||||||||
Increase in loans to customers | $ | (41,393 | ) | $ | (65,055 | ) | $ | (65,306 | ) |
Principal collections from customers - loans | 43,613 | 60,375 | 60,292 | ||||||
Investment in equipment for financing leases | (585 | ) | (690 | ) | (417 | ) | |||
Principal collections from customers - financing leases | 1,011 | 856 | 734 | ||||||
Sales of financing receivables | 251 | 3,235 | 4,923 | ||||||
$ | 2,897 | $ | (1,279 | ) | $ | 226 | |||
All other investing activities | |||||||||
Purchases of investment securities | $ | (2,867 | ) | $ | (18,588 | ) | $ | (7,790 | ) |
Dispositions and maturities of investment securities | 10,001 | 7,343 | 9,587 | ||||||
Decrease (increase) in other assets - investments | (8,457 | ) | 9,202 | (1,439 | ) | ||||
Other(b) | 4,375 | 3,690 | (5,025 | ) | |||||
$ | 3,052 | $ | 1,647 | $ | (4,667 | ) | |||
Repayments and other reductions (maturities longer than 90 days) | |||||||||
Short-term (91 to 365 days) | $ | (18,591 | ) | $ | (44,519 | ) | $ | (42,110 | ) |
Long-term (longer than one year) | (2,054 | ) | (13,418 | ) | (2,455 | ) | |||
Principal payments - non-recourse, leveraged leases | (362 | ) | (348 | ) | (283 | ) | |||
$ | (21,007 | ) | $ | (58,285 | ) | $ | (44,848 | ) | |
All other financing activities | |||||||||
Proceeds from sales of investment contracts | $ | 10 | $ | 19 | $ | 163 | |||
Redemption of investment contracts | (344 | ) | (346 | ) | (1,235 | ) | |||
Other | 54 | (800 | ) | (290 | ) | ||||
$ | (280 | ) | $ | (1,127 | ) | $ | (1,362 | ) |
(a) | Primarily included non-cash adjustments for insurance-related charges recorded in the fourth quarter of 2017. |
(b) | Primarily included net activity related to settlements between our continuing operations (primarily our treasury operations) and businesses in discontinued operations. |
FAIR VALUE OF PLAN ASSETS | ||||||
(In millions) | 2017 | 2016 | ||||
Balance at January 1 | $ | 575 | $ | 695 | ||
Actual gain on plan assets | 82 | 22 | ||||
Employer contributions | 387 | 410 | ||||
Participant contributions | 54 | 51 | ||||
Benefits paid | (580 | ) | (603 | ) | ||
Balance at December 31 | $ | 518 | $ | 575 |
FAIR VALUE OF PLAN ASSETS | |||||||||||||
Principal pension plans | Other pension plans | ||||||||||||
(In millions) | 2017 | 2016 | 2017 | 2016 | |||||||||
Balance at January 1 | $ | 45,893 | $ | 45,720 | $ | 17,091 | $ | 17,368 | |||||
Actual gain on plan assets | 6,217 | 2,892 | 1,977 | 1,743 | |||||||||
Employer contributions | 1,978 | 552 | 870 | 795 | |||||||||
Participant contributions | 91 | 115 | 42 | 43 | |||||||||
Benefits paid | (3,818 | ) | (3,386 | ) | (977 | ) | (842 | ) | |||||
Acquisitions (dispositions) / other - net | — | — | 1,221 | (81 | ) | ||||||||
Exchange rate adjustments | — | — | 1,000 | (1,935 | ) | ||||||||
Balance at December 31 | $ | 50,361 | $ | 45,893 | $ | 21,224 | $ | 17,091 |
ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION | ||||||
(In millions) | 2017 | 2016 | ||||
Balance at January 1 | $ | 6,289 | $ | 6,757 | ||
Service cost for benefits earned | 94 | 123 | ||||
Interest cost on benefit obligations | 224 | 249 | ||||
Participant contributions | 54 | 51 | ||||
Plan amendments | (8 | ) | (7 | ) | ||
Actuarial gain(a) | (94 | ) | (291 | ) | ||
Benefits paid | (580 | ) | (603 | ) | ||
Acquisitions (dispositions) / other - net | 27 | 10 | ||||
Balance at December 31(b) | $ | 6,006 | $ | 6,289 |
(a) | In 2016, primarily associated with lower costs from new healthcare supplier contracts. |
(b) | The benefit obligation for retiree health plans was $4,084 million and $4,366 million at December 31, 2017 and 2016, respectively. |
PROJECTED BENEFIT OBLIGATIONS (PBO) | |||||||||||||||
Principal pension plans | Other pension plans | ||||||||||||||
(In millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Balance at January 1 | $ | 71,501 | $ | 68,722 | $ | 22,543 | $ | 21,618 | |||||||
Service cost for benefits earned | 1,055 | 1,237 | 574 | 462 | |||||||||||
Interest cost on benefit obligations | 2,856 | 2,939 | 606 | 670 | |||||||||||
Participant contributions | 91 | 115 | 42 | 43 | |||||||||||
Plan amendments | — | — | — | (54 | ) | ||||||||||
Actuarial loss (gain) | 3,300 | (a) | 1,874 | (b) | (181 | ) | 2,993 | (a) | |||||||
Benefits paid | (3,818 | ) | (3,386 | ) | (977 | ) | (842 | ) | |||||||
Acquisitions (dispositions) / other - net | — | — | 1,321 | (98 | ) | ||||||||||
Exchange rate adjustments | — | — | 1,375 | (2,249 | ) | ||||||||||
Balance at December 31 | $ | 74,985 | (c) | $ | 71,501 | (c) | 25,303 | 22,543 |
(a) | Principally associated with discount rate changes. |
(b) | Principally associated with discount rate and mortality assumption changes. |
(c) | The PBO for the GE Supplementary Pension Plan, which is an unfunded plan, was $6,682 million and $6,531 million at year-end 2017 and 2016, respectively. |
(In millions, after tax) | 2017 | 2016 | 2015 | ||||||
Compensation expense | $ | 146 | $ | 207 | $ | 234 |
(In millions, after tax) | 2017 | 2016 | 2015 | ||||||
Compensation expense(a) | $ | 95 | $ | 90 | $ | 72 |
(a) | Included $(6) million of compensation expense related to performance share units in 2017. |
CONSOLIDATED (BENEFIT) PROVISION FOR INCOME TAXES | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
U.S. Federal | |||||||||
Current | $ | (823 | ) | $ | (2,646 | ) | $ | 1,549 | |
Deferred | (4,261 | ) | (754 | ) | 492 | ||||
Non - U.S. | |||||||||
Current | 2,286 | 1,730 | 4,867 | ||||||
Deferred | (470 | ) | 1,239 | (121 | ) | ||||
Other | 225 | (33 | ) | (301 | ) | ||||
Total | $ | (3,043 | ) | $ | (464 | ) | $ | 6,485 |
(BENEFIT) PROVISION FOR INCOME TAXES | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
GE | |||||||||
Current tax expense (benefit) | $ | 2,810 | $ | (140 | ) | $ | 3,307 | ||
Deferred tax expense (benefit) from temporary differences | 449 | 1,107 | (1,800 | ) | |||||
3,259 | 967 | 1,506 | |||||||
GE Capital | |||||||||
Current tax expense (benefit) | (1,008 | ) | (1,138 | ) | 2,796 | ||||
Deferred tax expense (benefit) from temporary differences | (5,294 | ) | (293 | ) | 2,183 | ||||
(6,302 | ) | (1,431 | ) | 4,979 | |||||
Consolidated | |||||||||
Current tax expense (benefit) | 1,802 | (1,278 | ) | 6,103 | |||||
Deferred tax expense (benefit) from temporary differences | (4,845 | ) | 814 | 383 | |||||
Total | $ | (3,043 | ) | $ | (464 | ) | $ | 6,485 |
CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION | ||||||||||||||||||
DECEMBER 31, 2017 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Assets | ||||||||||||||||||
Cash and equivalents | $ | 3,275 | $ | — | $ | 3 | $ | 40,768 | $ | (747 | ) | $ | 43,299 | |||||
Investment securities | 1 | — | — | 39,809 | (1,113 | ) | 38,696 | |||||||||||
Receivables - net | 50,923 | 17,316 | 32,381 | 87,776 | (147,321 | ) | 41,076 | |||||||||||
Inventories | 4,829 | — | — | 22,246 | (5,152 | ) | 21,923 | |||||||||||
Property, plant and equipment - net | 5,808 | — | — | 48,516 | (450 | ) | 53,874 | |||||||||||
Investment in subsidiaries(a) | 289,469 | — | 77,488 | 715,936 | (1,082,893 | ) | — | |||||||||||
Goodwill and intangible assets | 8,014 | — | — | 90,226 | 6,002 | 104,242 | ||||||||||||
All other assets | 30,688 | 16 | 32 | 237,231 | (199,044 | ) | 68,923 | |||||||||||
Assets of discontinued operations | — | — | — | — | 5,912 | 5,912 | ||||||||||||
Total assets | $ | 393,008 | $ | 17,332 | $ | 109,904 | $ | 1,282,507 | $ | (1,424,806 | ) | $ | 377,945 | |||||
Liabilities and equity | ||||||||||||||||||
Short-term borrowings | $ | 191,807 | $ | — | $ | 46,033 | $ | 22,603 | $ | (236,407 | ) | $ | 24,036 | |||||
Accounts payable | 7,930 | — | — | 77,507 | (70,284 | ) | 15,153 | |||||||||||
Other current liabilities | 11,408 | 8 | 3 | 26,666 | 126 | 38,211 | ||||||||||||
Long-term and non-recourse borrowings | 71,023 | 16,632 | 34,730 | 55,367 | (67,197 | ) | 110,556 | |||||||||||
All other liabilities | 43,078 | 475 | 128 | 67,845 | (7,627 | ) | 103,899 | |||||||||||
Liabilities of discontinued operations | — | — | — | — | 706 | 706 | ||||||||||||
Total Liabilities | 325,247 | 17,116 | 80,894 | 249,988 | (380,684 | ) | 292,561 | |||||||||||
Redeemable noncontrolling interests | — | — | — | 2,627 | 772 | 3,399 | ||||||||||||
GE shareowners' equity | 67,761 | 216 | 29,010 | 1,028,337 | (1,061,061 | ) | 64,263 | |||||||||||
Noncontrolling interests | — | — | — | 1,556 | 16,167 | 17,723 | ||||||||||||
Total equity | 67,761 | 216 | 29,010 | 1,029,892 | (1,044,894 | ) | 81,986 | |||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 393,008 | $ | 17,332 | $ | 109,904 | $ | 1,282,507 | $ | (1,424,806 | ) | $ | 377,945 |
(a) | Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of $15,225 million and net assets of discontinued operations of $4,318 million. |
CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION | ||||||||||||||||||
DECEMBER 31, 2016 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Assets | ||||||||||||||||||
Cash and equivalents | $ | 2,558 | $ | — | $ | 3 | $ | 46,994 | $ | (1,426 | ) | $ | 48,129 | |||||
Investment securities | 1 | — | — | 47,394 | (3,082 | ) | 44,313 | |||||||||||
Receivables - net | 63,620 | 17,157 | 30,470 | 79,401 | (148,385 | ) | 42,263 | |||||||||||
Inventories | 4,654 | — | — | 21,076 | (3,377 | ) | 22,354 | |||||||||||
Property, plant and equipment - net | 5,768 | — | — | 46,366 | (1,615 | ) | 50,518 | |||||||||||
Investment in subsidiaries(a) | 272,685 | — | 80,481 | 492,674 | (845,840 | ) | — | |||||||||||
Goodwill and intangible assets | 8,128 | — | — | 42,074 | 36,673 | 86,875 | ||||||||||||
All other assets | 14,692 | 44 | 39 | 201,276 | (160,134 | ) | 55,917 | |||||||||||
Assets of discontinued operations | — | — | — | — | 14,815 | 14,815 | ||||||||||||
Total assets | $ | 372,107 | $ | 17,202 | $ | 110,992 | $ | 977,255 | $ | (1,112,372 | ) | $ | 365,183 | |||||
Liabilities and equity | ||||||||||||||||||
Short-term borrowings | $ | 167,089 | $ | 1 | $ | 46,432 | $ | 25,919 | $ | (208,727 | ) | $ | 30,714 | |||||
Accounts payable | 5,412 | — | — | 47,366 | (38,343 | ) | 14,435 | |||||||||||
Other current liabilities | 11,072 | 33 | 117 | 25,095 | 114 | 36,431 | ||||||||||||
Long-term and non-recourse borrowings | 68,983 | 16,486 | 34,389 | 68,912 | (83,273 | ) | 105,496 | |||||||||||
All other liabilities | 43,722 | 511 | 481 | 58,376 | (9,656 | ) | 93,434 | |||||||||||
Liabilities of discontinued operations | — | — | — | — | 4,158 | 4,158 | ||||||||||||
Total Liabilities | 296,279 | 17,030 | 81,419 | 225,667 | (335,727 | ) | 284,668 | |||||||||||
Redeemable noncontrolling interests | — | — | — | 2,223 | 802 | 3,025 | ||||||||||||
GE shareowners' equity | 75,828 | 171 | 29,573 | 747,719 | (777,463 | ) | 75,828 | |||||||||||
Noncontrolling interests | — | — | — | 1,647 | 16 | 1,663 | ||||||||||||
Total equity | 75,828 | 171 | 29,573 | 749,366 | (777,447 | ) | 77,491 | |||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 372,107 | $ | 17,202 | $ | 110,992 | $ | 977,255 | $ | (1,112,372 | ) | $ | 365,183 |
(a) | Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of $28,516 million and net assets of discontinued operations of $6,012 million. |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2017 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows – operating activities | ||||||||||||||||||
Cash from (used for) operating activities - continuing operations | $ | (35,701 | ) | $ | 52 | $ | 4,305 | $ | 257,663 | $ | (214,924 | ) | $ | 11,394 | ||||
Cash from (used for) operating activities - discontinued operations | (319 | ) | — | — | (656 | ) | 6 | (968 | ) | |||||||||
Cash from (used for) operating activities | (36,020 | ) | 52 | 4,305 | 257,007 | (214,918 | ) | 10,426 | ||||||||||
Cash flows – investing activities | ||||||||||||||||||
Cash from (used for) investing activities – continuing operations | 2,469 | (52 | ) | (1,871 | ) | (333,491 | ) | 336,885 | 3,940 | |||||||||
Cash from (used for) investing activities – discontinued operations | — | — | — | (1,618 | ) | — | (1,618 | ) | ||||||||||
Cash from (used for) investing activities | 2,469 | (52 | ) | (1,871 | ) | (335,109 | ) | 336,885 | 2,322 | |||||||||
Cash flows – financing activities | ||||||||||||||||||
Cash from (used for) financing activities – continuing operations | 34,268 | — | (2,434 | ) | 68,398 | (121,288 | ) | (21,055 | ) | |||||||||
Cash from (used for) financing activities – discontinued operations | — | — | — | 1,909 | — | 1,909 | ||||||||||||
Cash from (used for) financing activities | 34,268 | — | (2,434 | ) | 70,307 | (121,288 | ) | (19,146 | ) | |||||||||
Effect of currency exchange rate changes on cash and equivalents | — | — | — | 891 | — | 891 | ||||||||||||
Increase (decrease) in cash and equivalents | 717 | — | — | (6,904 | ) | 680 | (5,507 | ) | ||||||||||
Cash and equivalents at beginning of year | 2,558 | — | 3 | 48,423 | (1,426 | ) | 49,558 | |||||||||||
Cash and equivalents at end of year | 3,275 | — | 3 | 41,519 | (747 | ) | 44,051 | |||||||||||
Less cash and equivalents of discontinued operations at end of year | — | — | — | 752 | — | 752 | ||||||||||||
Cash and equivalents of continuing operations at end of year | $ | 3,275 | $ | — | $ | 3 | $ | 40,768 | $ | (747 | ) | $ | 43,299 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2016 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows – operating activities | ||||||||||||||||||
Cash from (used for) operating activities - continuing operations | $ | (4,966 | ) | $ | (10 | ) | $ | (52 | ) | $ | 162,918 | $ | (151,791 | ) | $ | 6,099 | ||
Cash from (used for) operating activities - discontinued operations | (891 | ) | — | — | (5,039 | ) | (413 | ) | (6,343 | ) | ||||||||
Cash from (used for) operating activities | (5,858 | ) | (10 | ) | (52 | ) | 157,880 | (152,204 | ) | (244 | ) | |||||||
Cash flows – investing activities | ||||||||||||||||||
Cash from (used for) investing activities – continuing operations | 14,158 | 16,384 | 35,443 | 72,205 | (75,577 | ) | 62,613 | |||||||||||
Cash from (used for) investing activities – discontinued operations | — | — | — | (13,412 | ) | — | (13,412 | ) | ||||||||||
Cash from (used for) investing activities | 14,158 | 16,384 | 35,443 | 58,794 | (75,577 | ) | 49,202 | |||||||||||
Cash flows – financing activities | ||||||||||||||||||
Cash from (used for) financing activities – continuing operations | (9,879 | ) | (16,374 | ) | (35,388 | ) | (275,243 | ) | 246,964 | (89,920 | ) | |||||||
Cash from (used for) financing activities – discontinued operations | — | — | — | 789 | — | 789 | ||||||||||||
Cash from (used for) financing activities | (9,879 | ) | (16,374 | ) | (35,388 | ) | (274,454 | ) | 246,964 | (89,131 | ) | |||||||
Effect of currency exchange rate changes on cash and equivalents | — | — | — | (1,146 | ) | — | (1,146 | ) | ||||||||||
Increase (decrease) in cash and equivalents | (1,578 | ) | — | 3 | (58,927 | ) | 19,183 | (41,319 | ) | |||||||||
Cash and equivalents at beginning of year | 4,137 | — | — | 107,351 | (20,609 | ) | 90,879 | |||||||||||
Cash and equivalents at end of year | 2,558 | — | 3 | 48,423 | (1,426 | ) | 49,558 | |||||||||||
Less cash and equivalents of discontinued operations at end of year | — | — | — | 1,429 | — | 1,429 | ||||||||||||
Cash and equivalents of continuing operations at end of year | $ | 2,558 | $ | — | $ | 3 | $ | 46,994 | $ | (1,426 | ) | $ | 48,129 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2015 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows – operating activities | ||||||||||||||||||
Cash from (used for) operating activities - continuing operations | $ | 13,587 | $ | 68 | $ | 631 | $ | 433,479 | $ | (435,909 | ) | $ | 11,856 | |||||
Cash from (used for) operating activities - discontinued operations | (7,490 | ) | — | (30 | ) | 27,533 | (11,979 | ) | 8,034 | |||||||||
Cash from (used for) operating activities | 6,097 | 68 | 601 | 461,013 | (447,888 | ) | 19,891 | |||||||||||
Cash flows – investing activities | ||||||||||||||||||
Cash from (used for) investing activities – continuing operations | 7,106 | (248 | ) | (601 | ) | (493,933 | ) | 549,289 | 61,613 | |||||||||
Cash from (used for) investing activities – discontinued operations | — | — | — | 5,854 | (7,979 | ) | (2,125 | ) | ||||||||||
Cash from (used for) investing activities | 7,106 | (248 | ) | (601 | ) | (488,079 | ) | 541,310 | 59,488 | |||||||||
Cash flows – financing activities | ||||||||||||||||||
Cash from (used for) financing activities – continuing operations | (13,886 | ) | 180 | — | 67,063 | (122,904 | ) | (69,547 | ) | |||||||||
Cash from (used for) financing activities – discontinued operations | — | — | — | (37,582 | ) | 31,075 | (6,507 | ) | ||||||||||
Cash from (used for) financing activities | (13,886 | ) | 180 | — | 29,481 | (91,829 | ) | (76,054 | ) | |||||||||
Effect of currency exchange rate changes on cash and equivalents | — | — | — | (3,464 | ) | — | (3,464 | ) | ||||||||||
Increase (decrease) in cash and equivalents | (683 | ) | — | — | (1,049 | ) | 1,594 | (138 | ) | |||||||||
Cash and equivalents at beginning of year | 4,820 | — | — | 108,400 | (22,203 | ) | 91,017 | |||||||||||
Cash and equivalents at end of year | 4,137 | — | — | 107,351 | (20,609 | ) | 90,879 | |||||||||||
Less cash and equivalents of discontinued operations at end of year | — | — | — | 20,395 | — | 20,395 | ||||||||||||
Cash and equivalents of continuing operations at end of year | $ | 4,137 | $ | — | $ | — | $ | 86,955 | $ | (20,609 | ) | $ | 70,483 |
COST OF PENSION PLANS | |||||||||||||||||||||||||||||
Total | Principal pension plans | Other pension plans | |||||||||||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Service cost for benefits earned | $ | 1,629 | $ | 1,699 | $ | 1,840 | $ | 1,055 | $ | 1,237 | $ | 1,424 | $ | 574 | $ | 462 | $ | 416 | |||||||||||
Prior service cost (credit) amortization | 285 | 304 | 205 | 290 | 303 | 205 | (5 | ) | 1 | — | |||||||||||||||||||
Expected return on plan assets | (4,639 | ) | (4,370 | ) | (4,183 | ) | (3,390 | ) | (3,336 | ) | (3,302 | ) | (1,249 | ) | (1,034 | ) | (881 | ) | |||||||||||
Interest cost on benefit obligations | 3,462 | 3,609 | 3,333 | 2,856 | 2,939 | 2,778 | 606 | 670 | 555 | ||||||||||||||||||||
Net actuarial loss amortization | 3,241 | 2,705 | 3,577 | 2,812 | 2,449 | 3,288 | 429 | 256 | 289 | ||||||||||||||||||||
Curtailment loss (gain) | 43 | 50 | 99 | 64 | 31 | 105 | (21 | ) | 19 | (6 | ) | ||||||||||||||||||
Pension cost | $ | 4,021 | $ | 3,997 | $ | 4,871 | $ | 3,687 | $ | 3,623 | $ | 4,498 | $ | 334 | $ | 374 | $ | 373 |
COST OF PRINCIPAL RETIREE BENEFIT PLANS | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
Service cost for benefits earned | $ | 94 | $ | 123 | $ | 145 | |||
Prior service credit amortization | (171 | ) | (164 | ) | (8 | ) | |||
Expected return on plan assets | (36 | ) | (43 | ) | (48 | ) | |||
Interest cost on benefit obligations | 224 | 249 | 335 | ||||||
Net actuarial gain amortization | (80 | ) | (50 | ) | (25 | ) | |||
Curtailment loss (gain)(a) | 4 | — | (225 | ) | |||||
Benefit plans cost | $ | 35 | $ | 115 | $ | 174 |
(a) | In 2015, gain principally resulting from life insurance amendment. |
December 31 (Dollars in millions) | 2017 | 2016 | |||||||||
Short-term borrowings | Amount | Average Rate(a) | Amount | Average Rate(a) | |||||||
GE | |||||||||||
Commercial paper | $ | 3,000 | 1.35 | % | $ | 1,500 | 0.60 | % | |||
Current portion of long-term borrowings(e) | 9,452 | 3.01 | 17,109 | 3.16 | |||||||
Other | 2,095 | 1,874 | |||||||||
Total GE short-term borrowings(b) | $ | 14,548 | $ | 20,482 | |||||||
GE Capital | |||||||||||
Commercial paper | $ | 5,013 | 1.45 | $ | 5,002 | 0.59 | |||||
Current portion of long-term borrowings(c) | 5,781 | 1.26 | 6,517 | 1.64 | |||||||
Intercompany payable to GE(d) | 8,310 | 11,696 | |||||||||
Other | 497 | 229 | |||||||||
Total GE Capital short-term borrowings | $ | 19,602 | $ | 23,443 | |||||||
Eliminations(d) | (10,114 | ) | (13,212 | ) | |||||||
Total short-term borrowings | $ | 24,036 | $ | 30,714 | |||||||
Long-term borrowings | Maturities | Amount | Average Rate(a) | Amount | Average Rate(a) | ||||||
GE | |||||||||||
Senior notes(e) | 2019-2055 | $ | 62,724 | 3.15 | % | $ | 54,396 | 3.35 | % | ||
Subordinated notes | 2021-2037 | 2,913 | 3.28 | 2,768 | 3.73 | ||||||
Subordinated debentures(g) | — | 719 | 6.12 | ||||||||
Other | 1,403 | 928 | |||||||||
Total GE long-term borrowings(b) | 67,040 | 58,810 | |||||||||
GE Capital | |||||||||||
Senior notes | 2019-2039 | 40,754 | 3.11 | 44,131 | 2.45 | ||||||
Subordinated notes | 208 | 236 | |||||||||
Intercompany payable to GE(f) | 31,533 | 47,084 | |||||||||
Other(c) | 1,118 | 1,992 | |||||||||
Total GE Capital long-term borrowings | 73,614 | 93,443 | |||||||||
Eliminations(f) | (32,079 | ) | (47,173 | ) | |||||||
Total long-term borrowings | $ | 108,575 | $ | 105,080 | |||||||
Non-recourse borrowings of consolidated securitization entities(h) | 2018-2021 | 1,980 | 2.77 | % | 417 | 2.23 | % | ||||
Total borrowings | $ | 134,591 | $ | 136,210 |
(a) | Based on year-end balances and year-end local currency effective interest rates, including the effects from hedging. |
(b) | Excluding assumed debt of GE Capital, the total amount of GE borrowings was $41,744 million and $20,512 million at December 31, 2017 and December 31, 2016, respectively. |
(c) | Included $1,466 million and $2,665 million of funding secured by aircraft and other collateral at December 31, 2017 and December 31, 2016, respectively, of which $458 million and $1,419 million is non-recourse to GE Capital at December 31, 2017 and December 31, 2016, respectively. |
(d) | Included a reduction of zero and $1,329 million of short-term intercompany loans from GE Capital to GE at December 31, 2017 and December 31, 2016, which bear the right of offset against amounts owed under the assumed debt agreement. Excluding intercompany loans, total short-term assumed debt was $8,310 million and $13,024 million at December 31,2017 and December 31, 2016, respectively. The remaining short-term intercompany loan balance was paid in January 2017. |
(e) | Total borrowings included $7,225 million of borrowings issued by BHGE, which primarily included current portion of long-term borrowings and senior notes of $639 million and $6,206 million, respectively, at December 31, 2017. |
(f) | Included a reduction of $7,271 million and zero for long-term intercompany loans from GE Capital to GE at December 31, 2017 and December 31, 2016, respectively, which bear the right of offset against amounts owed under the assumed debt agreement. Excluding intercompany loans, total long-term assumed debt was $38,804 million and $47,084 million at December 31, 2017 and December 31, 2016, respectively. The $7,271 million of intercompany loans collectively have a weighted average interest rate of 3.5% and a term of approximately 15 years. |
(g) | Comprises subordinated debentures which constitute the sole assets of the trusts that have issued trust preferred securities and where GE owns 100% of the common securities of the trusts. Obligations associated with these trusts are unconditionally guaranteed by GE. |
(h) | Included $621 million and $320 million of current portion of long-term borrowings at December 31, 2017 and December 31, 2016, respectively. See Note 19 for further information. |
December 31 (In millions) | 2017 | 2016 | ||||
Assets | ||||||
GE | $ | 15,586 | $ | 21,106 | ||
GE Capital | 6,176 | 5,093 | ||||
21,762 | 26,199 | |||||
Liabilities | ||||||
GE | (10,382 | ) | (14,440 | ) | ||
GE Capital | (5,177 | ) | (9,926 | ) | ||
Eliminations | 4 | — | ||||
(15,555 | ) | (24,366 | ) | |||
Net deferred income tax asset (liability) | $ | 6,207 | $ | 1,833 |
COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY) | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
GE | ||||||
Principal pension plans | $ | 3,911 | $ | 8,963 | ||
Other non-current compensation and benefits | 2,780 | 4,230 | ||||
Provision for expenses | 2,499 | 2,633 | ||||
Retiree insurance plans | 1,152 | 2,000 | ||||
Non-U.S. loss carryforwards(a) | 2,078 | 1,444 | ||||
U.S. credit carryforwards(b) | 1,932 | 67 | ||||
Contract assets | (5,051 | ) | (6,677 | ) | ||
Intangible assets | (2,033 | ) | (2,962 | ) | ||
Depreciation | (1,022 | ) | (1,755 | ) | ||
Other – net | (1,042 | ) | (1,277 | ) | ||
5,204 | 6,666 | |||||
GE Capital | ||||||
Operating leases | (2,689 | ) | (3,582 | ) | ||
Financing leases | (877 | ) | (1,632 | ) | ||
Energy investments | (754 | ) | (1,410 | ) | ||
Intangible assets | (25 | ) | (125 | ) | ||
U.S. credit carryforwards(b) | 1,632 | 1,092 | ||||
Insurance company loss reserves | 1,373 | (819 | ) | |||
Non-U.S. loss carryforwards(a) | 1,271 | 1,323 | ||||
Other – net | 1,068 | 320 | ||||
999 | (4,833 | ) | ||||
Eliminations | 4 | — | ||||
Net deferred income tax asset (liability) | $ | 6,207 | $ | 1,833 |
(a) | Net of valuation allowances of $4,251 million and $2,450 million for GE and $448 million and $391 million for GE Capital, for 2017 and 2016, respectively. Of the net deferred tax asset as of December 31, 2017 of $3,349 million, $11 million relates to net operating loss carryforwards that expire in various years ending from December 31, 2018 through December 31, 2020; $342 million relates to net operating losses that expire in various years ending from December 31, 2021 through December 31, 2037 and $2,996 million relates to net operating loss carryforwards that may be carried forward indefinitely. |
(b) | Of the net deferred tax asset as of December 31, 2017 of $3,564 million for U.S. credit carryforwards, $1,194 million expires in the year ending December 31, 2027, $67 million expires in the years ending December 31, 2030 through 2032 and $2,303 million expires in various years ending from December 31, 2033 through December 31, 2037. |
FAIR VALUE OF DERIVATIVES | |||||||||||||
2017 | 2016 | ||||||||||||
December 31 (in millions) | Assets | Liabilities | Assets | Liabilities | |||||||||
Derivatives accounted for as hedges | |||||||||||||
Interest rate contracts | $ | 1,862 | $ | 148 | $ | 3,106 | $ | 210 | |||||
Currency exchange contracts | 160 | 70 | 402 | 624 | |||||||||
Other contracts | — | — | — | — | |||||||||
$ | 2,021 | $ | 218 | $ | 3,508 | $ | 834 | ||||||
Derivatives not accounted for as hedges | |||||||||||||
Interest rate contracts | 93 | 8 | 62 | 20 | |||||||||
Currency exchange contracts | 1,111 | 2,043 | 1,778 | 4,011 | |||||||||
Other contracts | 139 | 91 | 119 | 17 | |||||||||
$ | 1,343 | $ | 2,143 | $ | 1,958 | $ | 4,048 | ||||||
Gross derivatives recognized in statement of financial position | |||||||||||||
Gross derivatives | 3,364 | 2,361 | 5,467 | 4,883 | |||||||||
Gross accrued interest | 469 | (38 | ) | 768 | (24 | ) | |||||||
$ | 3,833 | $ | 2,323 | $ | 6,234 | $ | 4,859 | ||||||
Amounts offset in statement of financial position | |||||||||||||
Netting adjustments(a) | (1,457 | ) | (1,456 | ) | (3,097 | ) | (3,094 | ) | |||||
Cash collateral(b) | (1,529 | ) | (578 | ) | (2,025 | ) | (1,355 | ) | |||||
$ | (2,986 | ) | $ | (2,034 | ) | $ | (5,121 | ) | $ | (4,449 | ) | ||
Net derivatives recognized in statement of financial position | |||||||||||||
Net derivatives | 847 | 289 | 1,113 | 410 | |||||||||
Amounts not offset in statement of financial position | |||||||||||||
Securities held as collateral(c) | (405 | ) | — | (442 | ) | — | |||||||
Net amount | $ | 441 | $ | 289 | $ | 671 | $ | 410 |
(a) | The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts include fair value adjustments related to our own and counterparty non-performance risk. At December 31, 2017 and December 31, 2016, the cumulative adjustment for non-performance risk was $(1) million and $(3) million, respectively. |
(b) | Excluded excess cash collateral received and posted of $10 million and $255 million at December 31, 2017, respectively, and $6 million and $177 million at December 31, 2016, respectively. |
(c) | Excluded excess securities collateral received of $16 million and zero at December 31, 2017 and December 31, 2016, respectively. |
FAIR VALUE OF DERIVATIVES | |||||||||||||
2017 | 2016 | ||||||||||||
December 31 (in millions) | Assets | Liabilities | Assets | Liabilities | |||||||||
Derivatives accounted for as hedges | |||||||||||||
Interest rate contracts | $ | 1,862 | $ | 148 | $ | 3,106 | $ | 210 | |||||
Currency exchange contracts | 160 | 70 | 402 | 624 | |||||||||
Other contracts | — | — | — | — | |||||||||
$ | 2,021 | $ | 218 | $ | 3,508 | $ | 834 | ||||||
Derivatives not accounted for as hedges | |||||||||||||
Interest rate contracts | 93 | 8 | 62 | 20 | |||||||||
Currency exchange contracts | 1,111 | 2,043 | 1,778 | 4,011 | |||||||||
Other contracts | 139 | 91 | 119 | 17 | |||||||||
$ | 1,343 | $ | 2,143 | $ | 1,958 | $ | 4,048 | ||||||
Gross derivatives recognized in statement of financial position | |||||||||||||
Gross derivatives | 3,364 | 2,361 | 5,467 | 4,883 | |||||||||
Gross accrued interest | 469 | (38 | ) | 768 | (24 | ) | |||||||
$ | 3,833 | $ | 2,323 | $ | 6,234 | $ | 4,859 | ||||||
Amounts offset in statement of financial position | |||||||||||||
Netting adjustments(a) | (1,457 | ) | (1,456 | ) | (3,097 | ) | (3,094 | ) | |||||
Cash collateral(b) | (1,529 | ) | (578 | ) | (2,025 | ) | (1,355 | ) | |||||
$ | (2,986 | ) | $ | (2,034 | ) | $ | (5,121 | ) | $ | (4,449 | ) | ||
Net derivatives recognized in statement of financial position | |||||||||||||
Net derivatives | 847 | 289 | 1,113 | 410 | |||||||||
Amounts not offset in statement of financial position | |||||||||||||
Securities held as collateral(c) | (405 | ) | — | (442 | ) | — | |||||||
Net amount | $ | 441 | $ | 289 | $ | 671 | $ | 410 |
(a) | The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts include fair value adjustments related to our own and counterparty non-performance risk. At December 31, 2017 and December 31, 2016, the cumulative adjustment for non-performance risk was $(1) million and $(3) million, respectively. |
(b) | Excluded excess cash collateral received and posted of $10 million and $255 million at December 31, 2017, respectively, and $6 million and $177 million at December 31, 2016, respectively. |
(c) | Excluded excess securities collateral received of $16 million and zero at December 31, 2017 and December 31, 2016, respectively. |
(In millions) | Effect on hedging instrument | Effect on underlying | Effect on earnings(a) | ||||||
2017 | |||||||||
Cash flow hedges | $ | 199 | $ | (199 | ) | $ | — | ||
Fair value hedges | (556 | ) | 371 | (185 | ) | ||||
Net investment hedges(b) | (1,833 | ) | 1,852 | 19 | |||||
Economic hedges(c) | 1,147 | (1,683 | ) | (536 | ) | ||||
Total | $ | (702 | ) |
2016 | |||||||||
Cash flow hedges | $ | (274 | ) | $ | 274 | $ | 1 | ||
Fair value hedges | 170 | (433 | ) | (263 | ) | ||||
Net investment hedges(b) | 2,458 | (2,376 | ) | 82 | |||||
Economic hedges(c) | (2,132 | ) | 1,784 | (348 | ) | ||||
Total | $ | (528 | ) |
(a) | For cash flow and fair value hedges, the effect on earnings is primarily related to ineffectiveness. For net investment hedges, the effect on earnings is related to ineffectiveness and spot-forward differences. |
(b) | Both non-derivatives and derivatives hedging instruments are included. The carrying value of non-derivative instruments designated as net investment hedges was $(13,028) million and $(13,355) million at December 31, 2017 and December 31, 2016, respectively. Total pre-tax reclassifications from CTA to gain (loss) was $125 million and $(528) million in 2017 and 2016, respectively. Total pre-tax reclassifications from CTA to gain (loss) included $125 million and $(529) million recorded in discontinued operations in 2017 and 2016, respectively. |
(c) | Net effect is substantially offset by the change in fair value of the hedged item that will affect earnings in future periods. |
FINANCIAL INFORMATION FOR DISCONTINUED OPERATIONS | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
Operations | |||||||||
Total revenues and other income (loss) | $ | 182 | $ | 2,968 | $ | 23,003 | |||
Earnings (loss) from discontinued operations before income taxes | $ | (731 | ) | $ | (162 | ) | $ | 887 | |
Benefit (provision) for income taxes(a) | 295 | 460 | (791 | ) | |||||
Earnings (loss) from discontinued operations, net of taxes | $ | (437 | ) | $ | 298 | $ | 96 | ||
Disposals | |||||||||
Gain (loss) on disposals before income taxes | $ | 306 | $ | (750 | ) | $ | (6,612 | ) | |
Benefit (provision) for income taxes(a) | (178 | ) | (502 | ) | (979 | ) | |||
Gain (loss) on disposals, net of taxes | $ | 128 | $ | (1,252 | ) | $ | (7,591 | ) | |
Earnings (loss) from discontinued operations, net of taxes(b)(c) | $ | (309 | ) | $ | (954 | ) | $ | (7,495 | ) |
(a) | GE Capital’s total tax benefit (provision) for discontinued operations and disposals included current tax benefit (provision) of $(299) million, $945 million and $(6,834) million for the years ended December 31, 2017, 2016 and 2015, respectively, including current U.S. Federal tax benefit (provision) of $(402) million, $1,224 million and $(6,245) million for the years ended December 31, 2017, 2016 and 2015, respectively, and deferred tax benefit (provision) of $416 million, $(988) million and $5,073 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
(b) | The sum of GE industrial earnings (loss) from discontinued operations, net of taxes, and GE Capital earnings (loss) from discontinued operations, net of taxes, after adjusting for earnings (loss) attributable to noncontrolling interests related to discontinued operations, is reported within GE industrial earnings (loss) from discontinued operations, net of taxes, on the consolidated Statement of Earnings (Loss). |
(c) | Earnings (loss) from discontinued operations attributable to the Company before income taxes was $(432) million, $(911) million, and $(6,083) million for the years ended December 31, 2017, 2016, and 2015, respectively. |
December 31 (In millions) | 2017 | 2016 | ||||
Assets | ||||||
Cash and equivalents | $ | 752 | $ | 1,429 | ||
Investment securities | 647 | 2,626 | ||||
Deferred income taxes | 951 | 487 | ||||
Financing receivables held for sale | 3,215 | 8,547 | ||||
Other assets | 347 | 1,727 | ||||
Assets of discontinued operations | $ | 5,912 | $ | 14,815 | ||
Liabilities | ||||||
Accounts payable | $ | 51 | $ | 164 | ||
Borrowings | 1 | 2,076 | ||||
Other liabilities | 654 | 1,918 | ||||
Liabilities of discontinued operations | $ | 706 | $ | 4,158 |
2017 | 2016 | 2015 | ||||||||||||||||||
(In millions; per-share amounts in dollars) | Diluted | Basic | Diluted | Basic | Diluted | Basic | ||||||||||||||
Amounts attributable to the Company: | ||||||||||||||||||||
Consolidated | ||||||||||||||||||||
Earnings (loss) from continuing operations for per-share calculation(a)(b) | $ | (5,495 | ) | $ | (5,495 | ) | $ | 9,764 | $ | 9,769 | $ | 1,680 | $ | 1,679 | ||||||
Preferred stock dividends | (436 | ) | (436 | ) | (656 | ) | (656 | ) | (18 | ) | (18 | ) | ||||||||
Earnings (loss) from continuing operations attributable to common shareowners for per-share calculation(a)(b) | $ | (5,931 | ) | $ | (5,931 | ) | $ | 9,108 | $ | 9,113 | $ | 1,662 | $ | 1,661 | ||||||
Earnings (loss) from discontinued operations for per-share calculation(a)(b) | (328 | ) | (328 | ) | (955 | ) | (950 | ) | (7,795 | ) | (7,795 | ) | ||||||||
Net earnings (loss) attributable to GE common shareowners for per-share calculation(a)(b) | $ | (6,246 | ) | $ | (6,246 | ) | $ | 8,157 | $ | 8,163 | $ | (6,135 | ) | $ | (6,135 | ) | ||||
Average equivalent shares | ||||||||||||||||||||
Shares of GE common stock outstanding | 8,687 | 8,687 | 9,025 | 9,025 | 9,944 | 9,944 | ||||||||||||||
Employee compensation-related shares (including stock options) and warrants | — | — | 105 | — | 72 | — | ||||||||||||||
Total average equivalent shares | 8,687 | 8,687 | 9,130 | 9,025 | 10,016 | 9,944 | ||||||||||||||
Per-share amounts | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | (0.68 | ) | $ | (0.68 | ) | $ | 1.00 | $ | 1.01 | $ | 0.17 | $ | 0.17 | ||||||
Earnings (loss) from discontinued operations | (0.04 | ) | (0.04 | ) | (0.10 | ) | (0.11 | ) | (0.78 | ) | (0.78 | ) | ||||||||
Net earnings (loss) | (0.72 | ) | (0.72 | ) | 0.89 | 0.90 | (0.61 | ) | (0.62 | ) |
(a) | Included a dilutive adjustment of an insignificant amount of dividend equivalents in each of the three years presented. |
(b) | Included in 2016 is a dilutive adjustment for the change in income for forward purchase contracts that may be settled in stock. |
RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO ACTUAL INCOME TAX RATE | ||||||||||||||||||||
Consolidated | GE | GE Capital | ||||||||||||||||||
2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||
U.S. federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | ||
Increase (reduction) in rate resulting from inclusion of after-tax earnings of GE Capital in before-tax earnings of GE | — | — | — | (81.0 | ) | 4.5 | 82.6 | — | — | — | ||||||||||
Tax on global activities including exports | 41.2 | (23.7 | ) | 54.1 | 71.0 | (20.8 | ) | (52.8 | ) | 12.2 | 4.9 | (224.5 | ) | |||||||
U.S. business credits(a) | 5.7 | (4.5 | ) | (4.7 | ) | 3.1 | (0.9 | ) | (4.1 | ) | 3.2 | 15.7 | 9.2 | |||||||
Tax Cuts and Jobs Act enactment | (37.8 | ) | — | — | (127.2 | ) | — | — | 3.1 | — | — | |||||||||
All other – net(b) | (9.5 | ) | (11.9 | ) | (5.2 | ) | (12.4 | ) | (7.9 | ) | (14.4 | ) | (3.6 | ) | 14.7 | (1.5 | ) | |||
(0.4 | ) | (40.1 | ) | 44.2 | (146.5 | ) | (25.1 | ) | 11.3 | 14.9 | 35.3 | (216.8 | ) | |||||||
Actual income tax rate | 34.6 | % | (5.1 | )% | 79.2 | % | (111.5 | )% | 9.9 | % | 46.3 | % | 49.9 | % | 70.3 | % | (181.8 | )% |
(a) | U.S. general business credits, primarily the credit for energy produced from renewable sources and the credit for research performed in the U.S. |
(b) | Includes, for each period, the expense or (benefit) for “Other” taxes reported above in the consolidated (benefit) provision for income taxes, net of 35.0% federal effect. |
ESTIMATED FUTURE BENEFIT PAYMENTS | ||||||||||||||||||
2023 - | ||||||||||||||||||
(In millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2027 | ||||||||||||
$ | 585 | $ | 555 | $ | 525 | $ | 500 | $ | 485 | $ | 2,090 |
ESTIMATED FUTURE BENEFIT PAYMENTS | ||||||||||||||||||
2023 - | ||||||||||||||||||
(In millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2027 | ||||||||||||
Principal pension plans | $ | 3,600 | $ | 3,685 | $ | 3,775 | $ | 3,850 | $ | 3,910 | $ | 20,510 | ||||||
Other pension plans | 975 | 995 | 1,005 | 1,020 | 1,045 | 5,520 |
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS | |||||||||||||||
(In millions) | Level 1(a) | Level 2(a) | Level 3(b) | Netting adjustment | Net balance(c) | ||||||||||
December 31, 2017 | |||||||||||||||
Assets | |||||||||||||||
Investment securities | $ | 158 | $ | 34,126 | $ | 4,413 | $ | — | $ | 38,696 | |||||
Derivatives | — | 3,343 | 21 | (2,986 | ) | 378 | |||||||||
Total | $ | 158 | $ | 37,469 | $ | 4,433 | $ | (2,986 | ) | $ | 39,074 | ||||
Liabilities | |||||||||||||||
Derivatives | $ | — | $ | 2,354 | $ | 7 | $ | (2,034 | ) | $ | 327 | ||||
Other(d) | — | 999 | — | — | 999 | ||||||||||
Total | $ | — | $ | 3,353 | $ | 7 | $ | (2,034 | ) | $ | 1,325 | ||||
December 31, 2016 | |||||||||||||||
Assets | |||||||||||||||
Investment securities | $ | 188 | $ | 39,719 | $ | 4,406 | $ | — | $ | 44,313 | |||||
Derivatives | — | 5,444 | 23 | (5,121 | ) | 345 | |||||||||
Total | $ | 188 | $ | 45,163 | $ | 4,429 | $ | (5,121 | ) | $ | 44,658 | ||||
Liabilities | |||||||||||||||
Derivatives | $ | — | $ | 4,880 | $ | 2 | $ | (4,449 | ) | $ | 434 | ||||
Other(d) | — | 1,143 | — | — | 1,143 | ||||||||||
Total | $ | — | $ | 6,024 | $ | 2 | $ | (4,449 | ) | $ | 1,577 |
(a) | There were no significant transfers between Level 1 and Level 2 for the years ended December 31, 2017 and 2016. |
(b) | Included debt securities classified within Level 3 of $3,629 million of U.S. corporate and $614 million of Government and agencies securities at December 31, 2017, and $3,399 million of U.S. corporate and $688 million of Non-U.S. corporate securities at December 31, 2016. |
(c) | See Notes 3 and 19 for further information on the composition of our investment securities and derivative portfolios. |
(d) | Primarily represents the liabilities associated with certain of our deferred incentive compensation plans. |
Interest rate forwards/swaps | Interest rate increases | Interest rate decreases |
Pay floating rate/receive fixed rate | Fair value decreases | Fair value increases |
CONTRACTUAL MATURITIES | ||||||
(In millions) | Total loans | Net rentals receivable | ||||
Due in | ||||||
2018 | $ | 10,366 | $ | 932 | ||
2019 | 2,987 | 805 | ||||
2020 | 1,364 | 637 | ||||
2021 | 1,158 | 503 | ||||
2022 | 570 | 327 | ||||
2023 and later | 959 | 795 | ||||
Total | $ | 17,404 | $ | 3,999 |
INTANGIBLE ASSETS SUBJECT TO AMORTIZATION | |||||||||||||||||||
2017 | 2016 | ||||||||||||||||||
December 31 (In millions) | Gross carrying amount | Accumulated amortization | Net | Gross carrying amount | Accumulated amortization | Net | |||||||||||||
Customer-related | $ | 10,614 | $ | (3,095 | ) | $ | 7,521 | $ | 9,172 | $ | (2,408 | ) | $ | 6,764 | |||||
Patents and technology | 10,271 | (3,899 | ) | 6,372 | 8,695 | (3,327 | ) | 5,368 | |||||||||||
Capitalized software | 8,064 | (4,974 | ) | 3,089 | 7,652 | (4,538 | ) | 3,114 | |||||||||||
Trademarks | 1,280 | (421 | ) | 859 | 1,165 | (307 | ) | 859 | |||||||||||
Lease valuations | 170 | (80 | ) | 89 | 143 | (59 | ) | 84 | |||||||||||
Present value of future profits(a) | — | — | — | 684 | (684 | ) | — | ||||||||||||
All other | 218 | (92 | ) | 125 | 273 | (124 | ) | 149 | |||||||||||
Total | $ | 30,618 | $ | (12,561 | ) | $ | 18,056 | $ | 27,783 | $ | (11,446 | ) | $ | 16,336 |
(a) | See Note 11 for discussion on the present value of future profits in our run-off insurance operations. |
(In millions) | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||
GE | $ | 1,189 | $ | 1,011 | $ | 849 | $ | 736 | $ | 630 | |||||
GE Capital | 27 | 23 | 22 | 22 | 56 | ||||||||||
1,216 | 1,035 | 871 | 758 | 686 | |||||||||||
Eliminations | (135 | ) | (127 | ) | (123 | ) | (120 | ) | (108 | ) | |||||
Total | $ | 1,081 | $ | 908 | $ | 748 | $ | 638 | $ | 578 |
CHANGES IN GOODWILL BALANCES | |||||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||||
(In millions) | Balance at January 1 | Acquisitions | Dispositions, currency exchange and other | Balance at December 31 | Balance at January 1 | Acquisitions | Dispositions, currency exchange and other | Balance at December 31 | |||||||||||||||||
Power | $ | 26,403 | $ | 37 | $ | (1,171 | ) | $ | 25,269 | $ | 22,963 | $ | 4,131 | $ | (692 | ) | $ | 26,403 | |||||||
Renewable Energy | 2,507 | 1,503 | 83 | 4,093 | 2,580 | (46 | ) | (27 | ) | 2,507 | |||||||||||||||
Oil & Gas | 10,363 | 13,364 | 216 | 23,943 | 10,594 | — | (231 | ) | 10,363 | ||||||||||||||||
Aviation | 9,455 | 25 | 529 | 10,008 | 8,567 | 1,045 | (158 | ) | 9,455 | ||||||||||||||||
Healthcare | 17,424 | 60 | (178 | ) | 17,306 | 17,353 | 191 | (120 | ) | 17,424 | |||||||||||||||
Transportation | 899 | — | 3 | 902 | 851 | 41 | 6 | 899 | |||||||||||||||||
Lighting | 281 | — | (281 | ) | — | 214 | 63 | 5 | 281 | ||||||||||||||||
Capital | 2,368 | — | (1,384 | ) | 984 | 2,370 | — | (1 | ) | 2,368 | |||||||||||||||
Corporate | 739 | 727 | (3 | ) | 1,463 | 34 | 487 | 218 | 739 | ||||||||||||||||
Total | $ | 70,438 | $ | 15,716 | $ | (2,186 | ) | $ | 83,968 | $ | 65,526 | $ | 5,911 | $ | (1,000 | ) | $ | 70,438 |
CONSOLIDATED EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
U.S. earnings | $ | (17,234 | ) | $ | 2,145 | $ | (309 | ) | |
Non-U.S. earnings | 8,443 | 6,885 | 8,495 | ||||||
Total | $ | (8,791 | ) | $ | 9,030 | $ | 8,186 |
OTHER INTANGIBLE ASSETS - NET | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Intangible assets subject to amortization | $ | 18,056 | $ | 16,336 | ||
Indefinite-lived intangible assets(a) | 2,217 | 100 | ||||
Total | $ | 20,273 | $ | 16,436 |
(a) | Indefinite-lived intangible assets principally comprise trademarks and in-process research and development. |
December 31 (In millions) | 2017 | 2016 | ||||
Raw materials and work in process | $ | 11,757 | $ | 12,636 | ||
Finished goods | 9,169 | 8,798 | ||||
Unbilled shipments | 481 | 536 | ||||
21,407 | 21,971 | |||||
Revaluation to LIFO | 516 | 383 | ||||
Total inventories | $ | 21,923 | $ | 22,354 |
(In millions) | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||
GE excluding assumed debt(a) | $ | 1,142 | $ | 127 | $ | 888 | $ | 591 | $ | 6,351 | |||||
GE Capital debt assumed by GE | 8,310 | 3,774 | 6,208 | 4,713 | 1,942 | ||||||||||
GE Capital other debt | 5,781 | (b) | 4,462 | 11,476 | 2,211 | 2,338 |
(a) | Includes maturities of BHGE borrowings of $738 million, $47 million, $14 million, $538 million and $1,255 million in 2018, 2019, 2020, 2021 and 2022, respectively. Excluding BHGE borrowings, GE maturities will be $404 million, $80 million, $875 million, $53 million and $5,095 million in 2018, 2019, 2020, 2021 and 2022, respectively. |
(b) | Fixed and floating rate notes of $447 million contain put options with exercise dates in 2018, and which have final maturity beyond 2022. |
FUNDED STATUS | |||||||||||||
Principal pension plans | Other pension plans | ||||||||||||
December 31 (in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||
Projected benefit obligations | $ | 74,985 | $ | 71,501 | $ | 25,303 | $ | 22,543 | |||||
Fair value of plan assets | 50,361 | 45,893 | 21,224 | 17,091 | |||||||||
Underfunded | $ | 24,624 | $ | 25,608 | $ | 4,079 | $ | 5,452 |
FUNDED STATUS | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Accumulated postretirement benefit obligation | $ | 6,006 | $ | 6,289 | ||
Fair value of plan assets | 518 | 575 | ||||
Underfunded | $ | 5,488 | $ | 5,714 |
Currency forwards/swaps | U.S. dollar strengthens | U.S. dollar weakens |
Receive U.S. dollars/pay foreign currency | Fair value increases | Fair value decreases |
NOTIONAL AMOUNTS OF LOAN COMMITMENTS | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Ordinary course of business lending commitments(a) | $ | 1,105 | $ | 687 | ||
Unused revolving credit lines | 198 | 238 |
(a) | Excluded investment commitments of $677 million and $522 million at December 31, 2017 and December 31, 2016, respectively. |
December 31, 2017 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Revenue in excess of billings | |||||||||||||||||||||
Long-term product service agreements(b)(f) | $ | 7,439 | $ | 5,265 | $ | 1,266 | $ | 1 | $ | 1,186 | $ | — | $ | 15,157 | |||||||
Long-term equipment contract revenue(c) | 3,777 | 1,833 | 997 | 254 | 69 | 25 | 6,954 | ||||||||||||||
Total revenue in excess of billings | 11,215 | 7,098 | 2,263 | 255 | 1,254 | 25 | 22,111 | ||||||||||||||
Deferred inventory costs(d) | 1,565 | 528 | 338 | 1,042 | 46 | 319 | 3,839 | ||||||||||||||
Nonrecurring engineering costs(e) | 7 | 1,720 | — | — | 87 | — | 1,814 | ||||||||||||||
Customer advances and other | — | 1,098 | — | — | — | — | 1,097 | ||||||||||||||
Contract assets | $ | 12,786 | $ | 10,445 | $ | 2,602 | $ | 1,297 | $ | 1,388 | $ | 344 | $ | 28,861 |
December 31, 2016 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Revenue in excess of billings | |||||||||||||||||||||
Long-term product service agreements(b) | $ | 6,595 | $ | 4,861 | $ | 508 | $ | 1 | $ | 787 | $ | — | $ | 12,752 | |||||||
Long-term equipment contract revenue(c) | 3,062 | 1,673 | 709 | 315 | 55 | 45 | 5,859 | ||||||||||||||
Total revenue in excess of billings | 9,657 | 6,534 | 1,217 | 316 | 843 | 45 | 18,611 | ||||||||||||||
Deferred inventory costs(d) | 1,168 | 650 | 217 | 923 | 40 | 350 | 3,349 | ||||||||||||||
Nonrecurring engineering costs(e) | 18 | 2,083 | — | — | 85 | — | 2,185 | ||||||||||||||
Customer advances and other | 10 | 993 | — | — | 1 | 13 | 1,018 | ||||||||||||||
Contract assets | $ | 10,852 | $ | 10,261 | $ | 1,433 | $ | 1,239 | $ | 969 | $ | 408 | $ | 25,162 |
(a) | Primarily includes our Healthcare segment |
(b) | Long-term product service agreement balances are presented net of related billings in excess of revenues of $3,037 million and $3,750 million at December 31, 2017 and 2016, respectively. |
(c) | Reflects revenues earned in excess of billings on our long-term contracts to construct technically complex equipment (such as gas power systems or commercial aircraft engines). |
(d) | Represents cost deferral for shipped goods (such as components for wind turbine assembly within our Renewable Energy segment) and labor and overhead costs on time and material service contracts (primarily originating in Power and Aviation) and other costs for which the criteria for revenue recognition has not yet been met. |
(e) | Includes costs incurred prior to production (e.g., requisition engineering) for long-term equipment production contracts, primarily within our Aviation segment, which are allocated ratably to each unit produced. |
(f) | The assets of legacy GE Oil & Gas were contributed to BHGE upon formation. The contributed assets included certain small-scale liquefied natural gas (LNG) contracts that were historically reported in our Power segment; therefore, on January 1, 2017, $236 million was transferred to Oil & Gas and additional $239 million was transferred to Oil & Gas on July 3, 2017 at the completion of the transaction. |
Interest rate forwards/swaps interest rate | Interest rate increases | Interest rate decreases |
Pay floating rate/receive fixed rate | Fair value decreases | Fair value increases |
Currency forwards/swaps | U.S. dollar strengthens | U.S. dollar weakens |
Pay U.S. dollars/receive foreign currency | Fair value decreases | Fair value increases |
Receive U.S. dollars/pay foreign currency | Fair value increases | Fair value decreases |
Commodity derivatives | Price increases | Price decreases |
Receive commodity/ pay fixed price | Fair value increases | Fair value decreases |
(In millions) | 2017 | 2016 | 2015 | ||||||
Balance at January 1 | $ | 1,920 | $ | 1,723 | $ | 1,199 | |||
Current-year provisions | 985 | 791 | 649 | ||||||
Expenditures | (827 | ) | (729 | ) | (718 | ) | |||
Other changes(a) | 286 | 135 | 593 | ||||||
Balance at December 31 | $ | 2,364 | $ | 1,920 | $ | 1,723 |
(a) | Included $634 million related to Alstom acquisition in 2015, and $172 million related to Baker Hughes and LM Wind Power acquisitions in 2017. |
First quarter | Second quarter | Third quarter | Fourth quarter | ||||||||||||||||||||||||
(In millions; per-share amounts in dollars) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Consolidated operations | |||||||||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 816 | $ | 415 | $ | 1,499 | $ | 3,363 | $ | 1,800 | $ | 2,056 | $ | (9,863 | ) | $ | 3,659 | ||||||||||
Earnings (loss) from discontinued operations | (239 | ) | (308 | ) | (146 | ) | (541 | ) | (106 | ) | (105 | ) | 182 | — | |||||||||||||
Net earnings (loss) | 577 | 107 | 1,354 | 2,823 | 1,694 | 1,951 | (9,681 | ) | 3,659 | ||||||||||||||||||
Less net earnings (loss) attributable to noncontrolling interests | (76 | ) | (121 | ) | (14 | ) | (86 | ) | (142 | ) | (76 | ) | (39 | ) | (8 | ) | |||||||||||
Net earnings (loss) attributable to the Company | $ | 653 | $ | 228 | $ | 1,367 | $ | 2,908 | $ | 1,836 | $ | 2,027 | $ | (9,642 | ) | $ | 3,667 | ||||||||||
Per-share amounts – earnings (loss) from continuing operations | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.10 | $ | 0.03 | $ | 0.15 | $ | 0.36 | $ | 0.22 | $ | 0.23 | $ | (1.15 | ) | $ | 0.39 | ||||||||||
Basic earnings (loss) per share | 0.10 | 0.03 | 0.15 | 0.36 | 0.22 | 0.24 | (1.15 | ) | 0.39 | ||||||||||||||||||
Per-share amounts – earnings (loss) from discontinued operations | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | (0.03 | ) | (0.03 | ) | (0.02 | ) | (0.06 | ) | (0.01 | ) | (0.01 | ) | 0.02 | 0.00 | |||||||||||||
Basic earnings (loss) per share | (0.03 | ) | (0.03 | ) | (0.02 | ) | (0.06 | ) | (0.01 | ) | (0.01 | ) | 0.02 | 0.00 | |||||||||||||
Per-share amounts – net earnings (loss) | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | 0.07 | (0.01 | ) | 0.13 | 0.30 | 0.21 | 0.22 | (1.13 | ) | 0.39 | |||||||||||||||||
Basic earnings (loss) per share | 0.07 | (0.01 | ) | 0.14 | 0.30 | 0.21 | 0.22 | (1.13 | ) | 0.40 | |||||||||||||||||
Selected data | |||||||||||||||||||||||||||
GE | |||||||||||||||||||||||||||
Sales of goods and services | $ | 25,392 | $ | 25,407 | $ | 27,293 | $ | 28,150 | $ | 29,438 | $ | 26,934 | $ | 31,356 | $ | 30,345 | |||||||||||
Gross profit from sales | 5,418 | 5,516 | 5,965 | 6,192 | 5,918 | 6,388 | 6,126 | 7,027 | |||||||||||||||||||
GE Capital | |||||||||||||||||||||||||||
Total revenues | 2,681 | 2,885 | 2,446 | 2,771 | 2,397 | 2,600 | 1,545 | 2,649 | |||||||||||||||||||
Earnings (loss) from continuing operations attributable to the Company | (13 | ) | (603 | ) | 10 | (448 | ) | 60 | 59 | (6,385 | ) | 397 |
PRELIMINARY IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED | |||
(In millions) | July 3, 2017 | ||
Cash and cash equivalents | $ | 4,133 | |
Accounts receivable | 2,383 | ||
Inventories | 1,695 | ||
Property, plant, and equipment - net | 4,868 | ||
Other intangible assets - net | 4,123 | ||
All other assets | 1,544 | ||
Accounts payable | (1,106 | ) | |
Borrowings | (3,370 | ) | |
Deferred taxes(a) | (464 | ) | |
All other liabilities | (2,288 | ) | |
Total identifiable net assets | 11,518 | ||
Fair value of existing noncontrolling interest | (76 | ) | |
Goodwill | 13,356 | ||
Total allocated purchase price | $ | 24,798 |
(a) | Includes an increase of approximately $ $1,051 million primarily related to fair value adjustments to identifiable assets and liabilities (excluding goodwill) partially offset by a tax asset of approximately $572 million associated with the recognition of foreign tax credits. |
(In millions) | 2017 | 2016 | 2015 | ||||||
Cash from (used for) operating activities-continuing operations | |||||||||
Combined | $ | 13,414 | $ | 28,408 | $ | 17,891 | |||
GE current receivables sold to GE Capital | 1,800 | 697 | (856 | ) | |||||
GE Capital dividends to GE | (4,016 | ) | (20,095 | ) | (4,300 | ) | |||
Other reclassifications and eliminations(a) | 196 | (2,911 | ) | (879 | ) | ||||
Total cash from (used for) operating activities-continuing operations | $ | 11,394 | $ | 6,099 | $ | 11,856 | |||
Cash from (used for) investing activities-continuing operations | |||||||||
Combined | $ | (46 | ) | $ | 58,134 | $ | 59,516 | ||
GE current receivables sold to GE Capital | (1,721 | ) | (230 | ) | 1,261 | ||||
GE Capital long-term loans to GE | 7,271 | — | — | ||||||
GE Capital short-term loan to GE | (1,329 | ) | 1,329 | — | |||||
Other reclassifications and eliminations(a) | (235 | ) | 3,380 | 836 | |||||
Total cash from (used for) investing activities-continuing operations | $ | 3,940 | $ | 62,613 | $ | 61,613 | |||
Cash from (used for) financing activities-continuing operations | |||||||||
Combined | $ | (19,089 | ) | $ | (107,750 | ) | $ | (73,484 | ) |
GE current receivables sold to GE Capital | (79 | ) | (467 | ) | (405 | ) | |||
GE Capital dividends to GE | 4,016 | 20,095 | 4,300 | ||||||
GE Capital long-term loans to GE | (7,271 | ) | — | — | |||||
GE Capital short-term loan to GE | 1,329 | (1,329 | ) | — | |||||
Other reclassifications and eliminations(a) | 39 | (469 | ) | 42 | |||||
Total cash from (used for) financing activities-continuing operations | $ | (21,055 | ) | $ | (89,920 | ) | $ | (69,547 | ) |
(a) | Includes eliminations of other cash flows activities, including those related to GE Capital enabled GE industrial orders, long-term receivables financing, various investments, loans and allocations of GE corporate overhead costs. |
(In millions) | 2017 | 2016 | 2015 | ||||||
GE | $ | 1,783 | $ | 1,686 | $ | 1,397 | |||
GE Capital | 105 | 91 | 107 | ||||||
1,888 | 1,777 | 1,504 | |||||||
Eliminations | (143 | ) | (126 | ) | (169 | ) | |||
Total | $ | 1,746 | $ | 1,651 | $ | 1,335 |
As of December 31, 2017, unless otherwise stated (in millions) | Aggregate intrinsic value | ||
Stock options outstanding | $ | 235 | |
Stock options exercised in 2017 | 326 | ||
Non-vested restricted stock units outstanding | 301 | ||
Restricted stock units vested in 2017 | 167 |
As of December 31, 2017 unless, otherwise stated (in thousands, except per-share data) | |||
Stock options granted during 2017 | 30,611 | ||
Weighted-average strike price of awards granted in 2017 | $ | 18.97 | |
Stock options outstanding | 398,571 | ||
Weighted-average strike price of stock options outstanding | $ | 21.91 | |
Stock options exercisable | 309,190 | ||
Weighted-average strike price of stock options exercisable | $ | 21.25 |
2017 | 2016 | 2015 | |||||||
Weighted-average grant-date fair value of stock options | $ | 3.81 | $ | 3.61 | $ | 4.64 | |||
Stock Option Valuation Assumptions: | |||||||||
Risk-free interest rate | 2.3 | % | 1.4 | % | 2.0 | % | |||
Dividend yield | 3.3 | % | 3.4 | % | 3.4 | % | |||
Expected volatility | 28.0 | % | 20.0 | % | 25.0 | % | |||
Expected option life (in years) | 6.3 | 6.5 | 6.8 | ||||||
Other pricing model inputs: | |||||||||
Weighted-average grant-date market price of GE stock (strike price) | $ | 18.97 | $ | 29.63 | $ | 25.79 |
(In thousands) | 2017 | 2016 | 2015 | |||
Restricted stock units vested during the year ended | 6,490 | 4,427 | 3,899 |
December 31 (In thousands) | 2017 | 2016 | 2015 |
Issued | 11,693,841 | 11,693,841 | 11,693,841 |
In treasury | (3,013,270) | (2,951,227) | (2,314,553) |
Outstanding | 8,680,571 | 8,742,614 | 9,379,288 |
(In millions) | 2017 | 2016 | 2015 | ||||||
Preferred stock issued | $ | 6 | $ | 6 | $ | 6 | |||
Common stock issued | $ | 702 | $ | 702 | $ | 702 | |||
Accumulated other comprehensive income (loss) | |||||||||
Balance at January 1 | $ | (18,598 | ) | $ | (16,529 | ) | $ | (18,172 | ) |
Other comprehensive income (loss) before reclassifications | |||||||||
Investment securities - net of deferred taxes of $(335), $84, $(270)(a) | (627) | 170 | (486) | ||||||
Currency translation adjustments (CTA) - net of deferred taxes of $(537), $719, $1,348 | 866 | (1,606) | (4,932) | ||||||
Cash flow hedges - net of deferred taxes of $31, $(41), $(21) | 171 | (234) | (732) | ||||||
Benefit plans - net of deferred taxes of $32, $(1,016), $1,506 | 550 | (2,946) | 2,768 | ||||||
Total | $ | 960 | $ | (4,616 | ) | $ | (3,382 | ) | |
Reclassifications from other comprehensive income | |||||||||
Investment securities - net of deferred taxes of $(81), $30, $(36)(b) | (149 | ) | 34 | (67 | ) | ||||
Currency translation gains (losses) on dispositions - net of deferred taxes of $(543), $241, $(1,489)(b) | 1,332 | 294 | 1,794 | ||||||
Cash flow hedges - net of deferred taxes of $(28), $37, $86(c) | (120 | ) | 327 | 831 | |||||
Benefit plans - net of deferred taxes of $1,111, $966, $1,260(d) | 2,232 | 1,878 | 2,397 | ||||||
Total(e) | $ | 3,295 | $ | 2,533 | $ | 4,955 | |||
Other comprehensive income (loss) | 4,255 | (2,083 | ) | 1,575 | |||||
Less other comprehensive income (loss) attributable to noncontrolling interests | 53 | (14 | ) | (69 | ) | ||||
Other comprehensive income (loss), net, attributable to GE | $ | 4,202 | $ | (2,069 | ) | $ | 1,644 | ||
Balance at December 31 | $ | (14,396 | ) | $ | (18,598 | ) | $ | (16,529 | ) |
Other capital | |||||||||
Balance at January 1 | $ | 37,224 | $ | 37,613 | $ | 32,889 | |||
Gains (losses) on treasury stock dispositions and other(f)(g) | (53 | ) | (389 | ) | 4,724 | ||||
Balance at December 31 | $ | 37,171 | $ | 37,224 | $ | 37,613 | |||
Retained earnings | |||||||||
Balance at January 1 | $ | 139,532 | $ | 140,020 | $ | 155,333 | |||
Net earnings (loss) attributable to the Company | (5,786 | ) | 8,831 | (6,126 | ) | ||||
Dividends and other transactions with shareowners | (7,741 | ) | (9,054 | ) | (9,161 | ) | |||
Redemption value adjustment on redeemable noncontrolling interests(h) | (322 | ) | (266 | ) | (25 | ) | |||
Balance at December 31 | $ | 125,682 | $ | 139,532 | $ | 140,020 | |||
Common stock held in treasury | |||||||||
Balance at January 1 | $ | (83,038 | ) | $ | (63,539 | ) | $ | (42,593 | ) |
Purchases(i)(j) | (3,849 | ) | (22,073 | ) | (23,762 | ) | |||
Dispositions | 1,985 | 2,574 | 2,816 | ||||||
Balance at December 31 | $ | (84,902 | ) | $ | (83,038 | ) | $ | (63,539 | ) |
Total equity | |||||||||
GE shareowners' equity balance | $ | 64,263 | $ | 75,828 | $ | 98,274 | |||
Noncontrolling interests balance | 17,723 | 1,663 | 1,864 | ||||||
Total equity balance at December 31 | $ | 81,986 | $ | 77,491 | $ | 100,138 |
(a) | Included adjustments of $(1,259) million, $(57) million and $611 million in 2017, 2016 and 2015, respectively, to deferred acquisition costs, present value of future profits, and investment contracts, insurance liabilities and annuity benefits in our run-off insurance operations to reflect the effects that would have been recognized had the related unrealized investment securities holding gains and losses been realized. See Note 11 for further information. |
(b) | Recorded in total revenues and other income and income taxes in benefit (provision) for income taxes in the Statement of Earnings (Loss). Currency translation gains (losses) on dispositions included $483 million, $211 million and $1,730 million in 2017, 2016 and 2015, respectively, in earnings (loss) from discontinued operations, net of taxes. |
(c) | Cash flow hedges primarily includes impact of foreign exchange contracts and gains (losses) on interest rate derivatives, primarily recorded in GE Capital revenue from services, interest and other financial charges and other costs and expenses. See Note 19 for further information. |
(d) | Primarily includes amortization of actuarial gains (losses), amortization of prior service cost and curtailment gain (loss). These components are included in the computation of net periodic pension cost. See Note 12 for further information. |
(e) | Included $784 million after-tax reclassification of AOCI to additional paid in capital as a result of recognition of noncontrolling interest in GE Oil & Gas as part of Baker Hughes transaction in 2017. |
(f) | Included $4,949 million related to issuance of new preferred stock in exchange for existing GE Capital preferred stock in 2015. |
(g) | Included $(126) million decrease in additional paid in capital in 2017 as a result of Baker Hughes transaction. See Note 8 for further information. |
(h) | Amount of redemption value adjustment on redeemable noncontrolling interest shown net of deferred taxes. |
(i) | Included $(20,383) million related to the split-off of Synchrony Financial from GE, where GE shares were exchanged for shares of Synchrony Financial in 2015. |
(j) | Included $(11,370) million of GE shares purchased under accelerated share repurchase (ASR) agreements in 2016. |
ESTIMATED FAIR VALUE AND GROSS UNREALIZED LOSSES OF AVAILABLE-FOR-SALE INVESTMENT SECURITIES | |||||||||||||
In loss position for | |||||||||||||
Less than 12 months | 12 months or more | ||||||||||||
(In millions) | Estimated fair value | Gross unrealized losses | Estimated fair value | Gross unrealized losses | |||||||||
December 31, 2017 | |||||||||||||
Debt | |||||||||||||
U.S. corporate | $ | 502 | $ | (6 | ) | $ | 605 | $ | (30 | ) | |||
Non-U.S. corporate | 1,169 | (4 | ) | 3,685 | (10 | ) | |||||||
State and municipal | 48 | (1 | ) | 272 | (39 | ) | |||||||
Mortgage and asset-backed | 979 | (11 | ) | 318 | (12 | ) | |||||||
Government and agencies | 395 | (2 | ) | 69 | — | ||||||||
Equity | — | — | — | — | |||||||||
Total | $ | 3,093 | $ | (23 | ) | $ | 4,949 | $ | (91 | ) | |||
December 31, 2016 | |||||||||||||
Debt | |||||||||||||
U.S. corporate | $ | 1,692 | $ | (55 | ) | $ | 359 | $ | (30 | ) | |||
Non-U.S. corporate | 5,352 | (26 | ) | 14 | (1 | ) | |||||||
State and municipal | 674 | (27 | ) | 158 | (64 | ) | |||||||
Mortgage and asset-backed | 822 | (21 | ) | 132 | (16 | ) | |||||||
Government and agencies | 549 | (26 | ) | — | — | ||||||||
Equity | 9 | (1 | ) | — | — | ||||||||
Total | $ | 9,098 | $ | (157 | ) | $ | 663 | $ | (111 | ) |
UNRECOGNIZED TAX BENEFITS RECONCILIATION | ||||||
(In millions) | 2017 | 2016 | ||||
Balance at January 1 | $ | 4,692 | $ | 6,778 | ||
Additions for tax positions of the current year | 260 | 248 | ||||
Additions for tax positions of prior years(a) | 791 | 521 | ||||
Reductions for tax positions of prior years | (113 | ) | (2,016 | ) | ||
Settlements with tax authorities | (57 | ) | (823 | ) | ||
Expiration of the statute of limitations | (124 | ) | (16 | ) | ||
Balance at December 31 | $ | 5,449 | $ | 4,692 |
(a) | For 2017, the amount shown as “additions for tax positions of prior years” included $326 million related to uncertain tax liabilities acquired in the Baker Hughes transaction. |
ASSETS AND LIABILITIES OF CONSOLIDATED VIEs | ||||||||||||
GE Capital | ||||||||||||
Customer | ||||||||||||
(In millions) | GE | Notes receivables(a) | Other | Total | ||||||||
December 31, 2017 | ||||||||||||
Assets | ||||||||||||
Financing receivables, net | $ | — | $ | — | $ | 792 | $ | 792 | ||||
Current receivables | 59 | 570 | — | 630 | ||||||||
Investment securities | — | — | 918 | 918 | ||||||||
Other assets | 586 | 1,182 | 1,920 | 3,688 | ||||||||
Total | $ | 646 | $ | 1,752 | $ | 3,630 | $ | 6,028 | ||||
Liabilities | ||||||||||||
Borrowings | $ | 39 | $ | — | $ | 1,027 | $ | 1,066 | ||||
Non-recourse borrowings | — | 669 | 16 | 685 | ||||||||
Other liabilities | 345 | 1,021 | 1,525 | 2,891 | ||||||||
Total | $ | 384 | $ | 1,690 | $ | 2,568 | $ | 4,642 | ||||
December 31, 2016 | ||||||||||||
Assets | ||||||||||||
Financing receivables, net | $ | — | $ | — | $ | 1,035 | $ | 1,035 | ||||
Current receivables | 57 | 670 | — | 727 | ||||||||
Investment securities | — | — | 982 | 982 | ||||||||
Other assets | 492 | 1,122 | 1,747 | 3,361 | ||||||||
Total | $ | 549 | $ | 1,792 | $ | 3,764 | $ | 6,105 | ||||
Liabilities | ||||||||||||
Borrowings | $ | 1 | $ | — | $ | 818 | $ | 819 | ||||
Non-recourse borrowings | — | 401 | 16 | 417 | ||||||||
Other liabilities | 457 | 1,378 | 1,482 | 3,317 | ||||||||
Total | $ | 458 | $ | 1,779 | $ | 2,316 | $ | 4,553 |
(a) | Two funding entities were established to purchase customer notes receivable from GE, one of which is partially funded by third-party debt. |
ESTIMATED 5 YEAR CONSOLIDATED AMORTIZATION | |||||||||||||||
(In millions) | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||
Estimated annual pre-tax amortization | $ | 2,274 | $ | 2,148 | $ | 2,039 | $ | 1,878 | $ | 1,713 |
REVENUES | |||||||||||||||||||||||||||||
Total revenues(a) | Intersegment revenues(b) | External revenues | |||||||||||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Power | $ | 35,990 | $ | 36,795 | $ | 28,903 | $ | 1,392 | $ | 1,330 | $ | 1,574 | $ | 34,598 | $ | 35,465 | $ | 27,328 | |||||||||||
Renewable Energy | 10,280 | 9,033 | 6,273 | 69 | 11 | 12 | 10,211 | 9,022 | 6,261 | ||||||||||||||||||||
Oil & Gas | 17,231 | 12,898 | 16,450 | 646 | 383 | 387 | 16,584 | 12,515 | 16,063 | ||||||||||||||||||||
Aviation | 27,375 | 26,261 | 24,660 | 585 | 730 | 418 | 26,790 | 25,530 | 24,242 | ||||||||||||||||||||
Healthcare | 19,116 | 18,291 | 17,639 | 18 | 15 | 7 | 19,098 | 18,276 | 17,633 | ||||||||||||||||||||
Transportation | 4,178 | 4,713 | 5,933 | 10 | 1 | 1 | 4,168 | 4,713 | 5,932 | ||||||||||||||||||||
Lighting(c) | 1,987 | 4,823 | 8,751 | 31 | 28 | 22 | 1,956 | 4,795 | 8,729 | ||||||||||||||||||||
Total industrial segment revenues | 116,157 | 112,814 | 108,609 | 2,751 | 2,498 | 2,421 | 113,406 | 110,316 | 106,188 | ||||||||||||||||||||
Capital | 9,070 | 10,905 | 10,801 | 1,620 | 1,288 | 1,151 | 7,451 | 9,617 | 9,650 | ||||||||||||||||||||
Corporate items and eliminations | (3,135 | ) | (26 | ) | (2,024 | ) | (4,371 | ) | (3,786 | ) | (3,572 | ) | 1,236 | 3,760 | 1,548 | ||||||||||||||
Total | $ | 122,092 | $ | 123,693 | $ | 117,386 | $ | — | $ | — | $ | — | $ | 122,092 | $ | 123,693 | $ | 117,386 |
(a) | Revenues of GE businesses include income from sales of goods and services to customers and other income. |
(b) | Sales from one component to another generally are priced at equivalent commercial selling prices. |
(c) | Lighting segment included Appliances for the year ended December 31, 2015, and through its disposition in the second quarter of 2016. |
PROFIT AND EARNINGS | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
Power | $ | 2,786 | $ | 5,091 | $ | 4,772 | |||
Renewable Energy | 727 | 576 | 431 | ||||||
Oil & Gas | 220 | 1,392 | 2,427 | ||||||
Aviation | 6,642 | 6,115 | 5,507 | ||||||
Healthcare | 3,448 | 3,161 | 2,882 | ||||||
Transportation | 824 | 1,064 | 1,273 | ||||||
Lighting(a) | 93 | 199 | 674 | ||||||
Total industrial segment profit | 14,740 | 17,598 | 17,966 | ||||||
Capital | (6,765 | ) | (1,251 | ) | (7,983 | ) | |||
Total segment profit | 7,975 | 16,347 | 9,983 | ||||||
Corporate items and eliminations | (7,871 | ) | (4,226 | ) | (5,108 | ) | |||
GE interest and other financial charges | (2,753 | ) | (2,026 | ) | (1,706 | ) | |||
GE provision for income taxes | (3,259 | ) | (967 | ) | (1,506 | ) | |||
Earnings (loss) from continuing operations attributable to GE common shareowners | (5,907 | ) | 9,128 | 1,663 | |||||
Earnings (loss) from discontinued operations, net of taxes | (309 | ) | (954 | ) | (7,495 | ) | |||
Less net earnings (loss) attributable to noncontrolling interests, discontinued operations | 6 | (1 | ) | 312 | |||||
Earnings (loss) from discontinued operations, net of taxes and noncontrolling interests | (315 | ) | (952 | ) | (7,807 | ) | |||
Consolidated net earnings (loss) attributable to GE common shareowners | $ | (6,222 | ) | $ | 8,176 | $ | (6,145 | ) |
(a) | Lighting segment included Appliances for the year ended December 31, 2015, and through its disposition in the second quarter of 2016. |
Assets(a) | Property, plant and equipment additions(b) | Depreciation and amortization | |||||||||||||||||||||||||||
At December 31 | For the years ended December 31 | For the years ended December 31 | |||||||||||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Power | $ | 71,133 | $ | 71,678 | $ | 68,793 | $ | 1,072 | $ | 963 | $ | 3,195 | $ | 1,358 | $ | 1,549 | $ | 1,035 | |||||||||||
Renewable Energy | 10,813 | 8,794 | 9,468 | 624 | 166 | 999 | 259 | 183 | 116 | ||||||||||||||||||||
Oil & Gas | 59,784 | 24,615 | 26,126 | 5,469 | 284 | 422 | 1,026 | 529 | 596 | ||||||||||||||||||||
Aviation | 41,753 | 38,899 | 34,524 | 1,426 | 1,328 | 1,260 | 979 | 900 | 855 | ||||||||||||||||||||
Healthcare | 28,772 | 28,639 | 28,162 | 393 | 432 | 284 | 806 | 785 | 799 | ||||||||||||||||||||
Transportation | 4,490 | 4,288 | 4,368 | 128 | 108 | 202 | 135 | 168 | 188 | ||||||||||||||||||||
Lighting(c) | 724 | 1,659 | 4,702 | 34 | 160 | 275 | 86 | 173 | 103 | ||||||||||||||||||||
Capital(d) | 156,716 | 187,804 | 316,069 | 3,680 | 3,769 | 7,570 | 2,343 | 2,515 | 2,584 | ||||||||||||||||||||
Corporate items and eliminations(e) | 3,761 | (1,192 | ) | 858 | (100 | ) | 94 | (297 | ) | 367 | 337 | 231 | |||||||||||||||||
Total | $ | 377,945 | $ | 365,183 | $ | 493,071 | $ | 12,728 | $ | 7,305 | $ | 13,911 | $ | 7,358 | $ | 7,139 | $ | 6,508 |
(a) | Total assets of Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation and Capital operating segments at December 31, 2017, include investments in and advances to associated companies of $1,170 million, $89 million, $476 million, $1,900 million, $392 million, $56 million and $7,294 million, respectively. Lighting held an insignificant balance as of December 31, 2017. Investments in and advances to associated companies contributed approximately $81 million, $(4) million, $(5) million, $110 million, $17 million, $(1) million, $2 million and $(31) million to segment pre-tax income of Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation, Lighting and Capital operating segments, respectively. |
(b) | Additions to property, plant and equipment include amounts relating to principal businesses purchased. |
(c) | Lighting segment included Appliances for the year ended December 31, 2015. |
(d) | Includes Capital discontinued operations. |
(e) | Includes deferred income taxes that are presented as assets for purposes of our consolidating balance sheet presentation. |
Interest and other financial charges | Benefit (provision) for income taxes | ||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||
Capital | $ | 3,145 | $ | 3,790 | $ | 2,301 | $ | 6,302 | $ | 1,431 | $ | (4,979 | ) | ||||||
Corporate items and eliminations(a) | 1,724 | 1,234 | 1,162 | (3,259 | ) | (967 | ) | (1,506 | ) | ||||||||||
Total | $ | 4,869 | $ | 5,025 | $ | 3,463 | $ | 3,043 | $ | 464 | $ | (6,485 | ) |
(a) | Included amounts for Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation and Lighting, for which our measure of segment profit excludes interest and other financial charges and income taxes. |
Level 1 – | Quoted prices for identical instruments in active markets. |
Level 2 – | Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
Level 3 – | Significant inputs to the valuation model are unobservable. |
(In millions) | 2017 | 2016 | 2015 | ||||||
Preferred stock issued | $ | 6 | $ | 6 | $ | 6 | |||
Common stock issued | $ | 702 | $ | 702 | $ | 702 | |||
Accumulated other comprehensive income (loss) | |||||||||
Balance at January 1 | $ | (18,598 | ) | $ | (16,529 | ) | $ | (18,172 | ) |
Other comprehensive income (loss) before reclassifications | |||||||||
Investment securities - net of deferred taxes of $(335), $84, $(270)(a) | (627) | 170 | (486) | ||||||
Currency translation adjustments (CTA) - net of deferred taxes of $(537), $719, $1,348 | 866 | (1,606) | (4,932) | ||||||
Cash flow hedges - net of deferred taxes of $31, $(41), $(21) | 171 | (234) | (732) | ||||||
Benefit plans - net of deferred taxes of $32, $(1,016), $1,506 | 550 | (2,946) | 2,768 | ||||||
Total | $ | 960 | $ | (4,616 | ) | $ | (3,382 | ) | |
Reclassifications from other comprehensive income | |||||||||
Investment securities - net of deferred taxes of $(81), $30, $(36)(b) | (149 | ) | 34 | (67 | ) | ||||
Currency translation gains (losses) on dispositions - net of deferred taxes of $(543), $241, $(1,489)(b) | 1,332 | 294 | 1,794 | ||||||
Cash flow hedges - net of deferred taxes of $(28), $37, $86(c) | (120 | ) | 327 | 831 | |||||
Benefit plans - net of deferred taxes of $1,111, $966, $1,260(d) | 2,232 | 1,878 | 2,397 | ||||||
Total(e) | $ | 3,295 | $ | 2,533 | $ | 4,955 | |||
Other comprehensive income (loss) | 4,255 | (2,083 | ) | 1,575 | |||||
Less other comprehensive income (loss) attributable to noncontrolling interests | 53 | (14 | ) | (69 | ) | ||||
Other comprehensive income (loss), net, attributable to GE | $ | 4,202 | $ | (2,069 | ) | $ | 1,644 | ||
Balance at December 31 | $ | (14,396 | ) | $ | (18,598 | ) | $ | (16,529 | ) |
Other capital | |||||||||
Balance at January 1 | $ | 37,224 | $ | 37,613 | $ | 32,889 | |||
Gains (losses) on treasury stock dispositions and other(f)(g) | (53 | ) | (389 | ) | 4,724 | ||||
Balance at December 31 | $ | 37,171 | $ | 37,224 | $ | 37,613 | |||
Retained earnings | |||||||||
Balance at January 1 | $ | 139,532 | $ | 140,020 | $ | 155,333 | |||
Net earnings (loss) attributable to the Company | (5,786 | ) | 8,831 | (6,126 | ) | ||||
Dividends and other transactions with shareowners | (7,741 | ) | (9,054 | ) | (9,161 | ) | |||
Redemption value adjustment on redeemable noncontrolling interests(h) | (322 | ) | (266 | ) | (25 | ) | |||
Balance at December 31 | $ | 125,682 | $ | 139,532 | $ | 140,020 | |||
Common stock held in treasury | |||||||||
Balance at January 1 | $ | (83,038 | ) | $ | (63,539 | ) | $ | (42,593 | ) |
Purchases(i)(j) | (3,849 | ) | (22,073 | ) | (23,762 | ) | |||
Dispositions | 1,985 | 2,574 | 2,816 | ||||||
Balance at December 31 | $ | (84,902 | ) | $ | (83,038 | ) | $ | (63,539 | ) |
Total equity | |||||||||
GE shareowners' equity balance | $ | 64,263 | $ | 75,828 | $ | 98,274 | |||
Noncontrolling interests balance | 17,723 | 1,663 | 1,864 | ||||||
Total equity balance at December 31 | $ | 81,986 | $ | 77,491 | $ | 100,138 |
(a) | Included adjustments of $(1,259) million, $(57) million and $611 million in 2017, 2016 and 2015, respectively, to deferred acquisition costs, present value of future profits, and investment contracts, insurance liabilities and annuity benefits in our run-off insurance operations to reflect the effects that would have been recognized had the related unrealized investment securities holding gains and losses been realized. See Note 11 for further information. |
(b) | Recorded in total revenues and other income and income taxes in benefit (provision) for income taxes in the Statement of Earnings (Loss). Currency translation gains (losses) on dispositions included $483 million, $211 million and $1,730 million in 2017, 2016 and 2015, respectively, in earnings (loss) from discontinued operations, net of taxes. |
(c) | Cash flow hedges primarily includes impact of foreign exchange contracts and gains (losses) on interest rate derivatives, primarily recorded in GE Capital revenue from services, interest and other financial charges and other costs and expenses. See Note 19 for further information. |
(d) | Primarily includes amortization of actuarial gains (losses), amortization of prior service cost and curtailment gain (loss). These components are included in the computation of net periodic pension cost. See Note 12 for further information. |
(e) | Included $784 million after-tax reclassification of AOCI to additional paid in capital as a result of recognition of noncontrolling interest in GE Oil & Gas as part of Baker Hughes transaction in 2017. |
(f) | Included $4,949 million related to issuance of new preferred stock in exchange for existing GE Capital preferred stock in 2015. |
(g) | Included $(126) million decrease in additional paid in capital in 2017 as a result of Baker Hughes transaction. See Note 8 for further information. |
(h) | Amount of redemption value adjustment on redeemable noncontrolling interest shown net of deferred taxes. |
(i) | Included $(20,383) million related to the split-off of Synchrony Financial from GE, where GE shares were exchanged for shares of Synchrony Financial in 2015. |
(j) | Included $(11,370) million of GE shares purchased under accelerated share repurchase (ASR) agreements in 2016. |
December 31 (In thousands) | 2017 | 2016 | 2015 |
Issued | 11,693,841 | 11,693,841 | 11,693,841 |
In treasury | (3,013,270) | (2,951,227) | (2,314,553) |
Outstanding | 8,680,571 | 8,742,614 | 9,379,288 |
CHANGES TO NONCONTROLLING INTERESTS | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
Balance at January 1 | $ | 1,663 | $ | 1,864 | $ | 8,674 | |||
Net earnings (loss) | (17 | ) | (46 | ) | 377 | ||||
GECC preferred stock(a) | — | — | (4,949 | ) | |||||
GECC preferred stock dividend | — | — | (311 | ) | |||||
Dividends | (222 | ) | (72 | ) | (43 | ) | |||
Dispositions | (92 | ) | (232 | ) | 189 | ||||
Synchrony Financial(b) | — | — | (2,840 | ) | |||||
Other (including AOCI)(c)(d)(e)(f)(g) | 16,390 | 150 | 767 | ||||||
Balance at December 31 | $ | 17,723 | $ | 1,663 | $ | 1,864 |
(a) | In 2015, included $(4,949) million related to the issuance of GE preferred stock in exchange for existing GECC preferred stock. GE preferred stock is reflected in shareowners’ equity in the consolidated Statement of Financial Position. |
(b) | Related to the split-off of Synchrony Financial from GE in 2015, where GE shares were exchanged for shares of Synchrony Financial; related to the Synchrony Financial IPO in 2014. |
(c) | In 2017, included $16,462 million related to Baker Hughes transaction. See Note 8 for further information. |
(d) | In 2016, included $155 million related to Arcam AB acquisition in our Aviation segment. |
(e) | In 2016, included $(123) million for deconsolidation of investment funds managed by GE Asset Management (GEAM) upon the adoption of ASU 2015-2, Amendments to the Consolidation Analysis. |
(f) | In 2015, included $695 million related to the Alstom acquisition. |
(g) | Includes research & development partner funding arrangements, acquisitions and eliminations. |
CHANGES TO REDEEMABLE NONCONTROLLING INTERESTS | |||||||||
(In millions) | 2017 | 2016 | 2015 | ||||||
Balance at January 1 | $ | 3,025 | $ | 2,972 | $ | 98 | |||
Net earnings (loss) | (254 | ) | (244 | ) | (46 | ) | |||
Dividends | (62 | ) | (17 | ) | (11 | ) | |||
Redemption value adjustment | 353 | 266 | 25 | ||||||
Other(a)(b) | 337 | 49 | 2,906 | ||||||
Balance at December 31(c) | $ | 3,399 | $ | 3,025 | $ | 2,972 |
(a) | In 2016, included $204 million related to the Concept Laser GmbH acquisition in our Aviation segment. |
(b) | Includes impact of foreign currency changes. |
(c) | Included $3,065 million, $2,709 million and $2,859 million related to Alstom joint ventures for the years ended December 31, 2017, 2016 and 2015. respectively. |
UNRECOGNIZED TAX BENEFITS | ||||||
December 31 (In millions) | 2017 | 2016 | ||||
Unrecognized tax benefits | $ | 5,449 | $ | 4,692 | ||
Portion that, if recognized, would reduce tax expense and effective tax rate(a) | 3,626 | 2,886 | ||||
Accrued interest on unrecognized tax benefits | 810 | 615 | ||||
Accrued penalties on unrecognized tax benefits | 158 | 118 | ||||
Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months | 0-1,100 | 0-600 | ||||
Portion that, if recognized, would reduce tax expense and effective tax rate(a) | 0-900 | 0-500 |
(a) | Some portion of such reduction may be reported as discontinued operations. |
ASSETS AND LIABILITIES OF CONSOLIDATED VIEs | ||||||||||||
GE Capital | ||||||||||||
Customer | ||||||||||||
(In millions) | GE | Notes receivables(a) | Other | Total | ||||||||
December 31, 2017 | ||||||||||||
Assets | ||||||||||||
Financing receivables, net | $ | — | $ | — | $ | 792 | $ | 792 | ||||
Current receivables | 59 | 570 | — | 630 | ||||||||
Investment securities | — | — | 918 | 918 | ||||||||
Other assets | 586 | 1,182 | 1,920 | 3,688 | ||||||||
Total | $ | 646 | $ | 1,752 | $ | 3,630 | $ | 6,028 | ||||
Liabilities | ||||||||||||
Borrowings | $ | 39 | $ | — | $ | 1,027 | $ | 1,066 | ||||
Non-recourse borrowings | — | 669 | 16 | 685 | ||||||||
Other liabilities | 345 | 1,021 | 1,525 | 2,891 | ||||||||
Total | $ | 384 | $ | 1,690 | $ | 2,568 | $ | 4,642 | ||||
December 31, 2016 | ||||||||||||
Assets | ||||||||||||
Financing receivables, net | $ | — | $ | — | $ | 1,035 | $ | 1,035 | ||||
Current receivables | 57 | 670 | — | 727 | ||||||||
Investment securities | — | — | 982 | 982 | ||||||||
Other assets | 492 | 1,122 | 1,747 | 3,361 | ||||||||
Total | $ | 549 | $ | 1,792 | $ | 3,764 | $ | 6,105 | ||||
Liabilities | ||||||||||||
Borrowings | $ | 1 | $ | — | $ | 818 | $ | 819 | ||||
Non-recourse borrowings | — | 401 | 16 | 417 | ||||||||
Other liabilities | 457 | 1,378 | 1,482 | 3,317 | ||||||||
Total | $ | 458 | $ | 1,779 | $ | 2,316 | $ | 4,553 |
(a) | Two funding entities were established to purchase customer notes receivable from GE, one of which is partially funded by third-party debt. |