December 31 (In millions) | 2018 | 2017 | ||||
Financing receivables and financing receivables held for sale | $ | (23 | ) | $ | (310 | ) |
Equity securities without readily determinable fair value and equity method investments | (535 | ) | (891 | ) | ||
Long-lived assets | (1,152 | ) | (819 | ) | ||
Goodwill | (22,136 | ) | (2,550 | ) | ||
Total | $ | (23,845 | ) | $ | (4,571 | ) |
CHANGES TO NONCONTROLLING INTERESTS (In millions) | 2018 | 2017 | 2016 | ||||||
Balance at January 1 | $ | 17,468 | $ | 1,663 | $ | 1,864 | |||
Net earnings (loss) | 203 | (47 | ) | (46 | ) | ||||
Dividends | (362 | ) | (222 | ) | (72 | ) | |||
Other (including AOCI)(a)(b)(c)(d) | 3,191 | 16,072 | (83 | ) | |||||
Balance at December 31(e) | $ | 20,500 | $ | 17,468 | $ | 1,663 |
(a) | Included impact of AOCI, acquisitions, dispositions and BHGE stock repurchases. |
(b) | Included $16,238 million related to BHGE transaction in 2017. |
(c) | Included $155 million related to Arcam AB acquisition in our Aviation segment in 2016. |
(d) | 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 in 2016. |
(e) | Included $19,239 million and $15,836 million attributable to the BHGE Class A Shareholders at December 31, 2018 and 2017, respectively. |
GE funded | Customer funded(c) | Partner funded | Total R&D | |||||||||||||||||||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||
Aviation | $ | 950 | $ | 907 | $ | 1,092 | $ | 564 | $ | 586 | $ | 498 | $ | — | $ | — | $ | — | $ | 1,514 | $ | 1,492 | $ | 1,591 | ||||||||||||
Healthcare | 968 | 908 | 869 | 23 | 26 | 32 | — | — | — | 991 | 934 | 901 | ||||||||||||||||||||||||
Power | 579 | 885 | 949 | 5 | 18 | 4 | 2 | 17 | 45 | 586 | 920 | 998 | ||||||||||||||||||||||||
Oil & Gas | 624 | 450 | 287 | 22 | 9 | — | 55 | 42 | 28 | 700 | 501 | 315 | ||||||||||||||||||||||||
Renewable Energy | 311 | 299 | 213 | 11 | 3 | 7 | — | — | — | 323 | 302 | 220 | ||||||||||||||||||||||||
Corporate(a) | 547 | 1,124 | 1,092 | 48 | 65 | 83 | — | — | — | 595 | 1,189 | 1,175 | ||||||||||||||||||||||||
All Other(b) | 155 | 165 | 235 | — | — | — | — | — | — | 155 | 165 | 235 | ||||||||||||||||||||||||
Total | $ | 4,134 | $ | 4,738 | $ | 4,737 | $ | 671 | $ | 707 | $ | 625 | $ | 57 | $ | 59 | $ | 73 | $ | 4,862 | $ | 5,504 | $ | 5,436 |
(In millions) | 2018 | 2017 | 2016 | ||||||
GE | $ | 1,850 | $ | 1,699 | $ | 1,576 | |||
GE Capital | 107 | 105 | 91 | ||||||
1,958 | 1,804 | 1,668 | |||||||
Eliminations | (110 | ) | (143 | ) | (126 | ) | |||
Total | $ | 1,848 | $ | 1,661 | $ | 1,542 |
(In millions) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||
GE | $ | 1,162 | $ | 1,010 | $ | 844 | $ | 707 | $ | 579 | |||||
GE Capital | 29 | 27 | 27 | 59 | 56 | ||||||||||
1,191 | 1,037 | 871 | 766 | 635 | |||||||||||
Eliminations | (103 | ) | (99 | ) | (95 | ) | (85 | ) | (70 | ) | |||||
Total | $ | 1,088 | $ | 938 | $ | 776 | $ | 681 | $ | 565 |
Interest and other financial charges | Benefit (provision) for income taxes | ||||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||
Capital | $ | 2,982 | $ | 3,145 | $ | 3,790 | $ | 374 | $ | 6,302 | $ | 1,431 | |||||||
Corporate items and eliminations(a) | 2,077 | 1,724 | 1,234 | (957 | ) | (3,691 | ) | (298 | ) | ||||||||||
Total | $ | 5,059 | $ | 4,869 | $ | 5,025 | $ | (583 | ) | $ | 2,611 | $ | 1,133 |
(a) | Included amounts for Power, Renewable Energy, Aviation, Oil & Gas, 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 | Leveraged leases | |||||||||||||||||
December 31 (In millions) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||
Total minimum lease payments receivable | $ | 2,719 | $ | 4,637 | $ | 1,421 | $ | 2,952 | $ | 1,298 | $ | 1,685 | ||||||||
Less principal and interest on third-party non-recourse debt | (474 | ) | (638 | ) | — | — | (474 | ) | (638 | ) | ||||||||||
Net rentals receivable | 2,245 | 3,999 | 1,421 | 2,952 | 824 | 1,047 | ||||||||||||||
Estimated unguaranteed residual value of leased assets | 1,295 | 1,590 | 571 | 743 | 724 | 847 | ||||||||||||||
Less deferred income | (718 | ) | (975 | ) | (437 | ) | (614 | ) | (282 | ) | (361 | ) | ||||||||
Investment in financing leases, net of deferred income(a) | $ | 2,822 | $ | 4,614 | $ | 1,556 | $ | 3,081 | $ | 1,266 | $ | 1,533 |
(a) | See Note 14 for deferred tax amounts related to financing leases. |
ASSETS MEASURED AT FAIR VALUE ON A NONRECURRING | Remeasured during the years ended December 31 | ||||||||||||
BASIS | 2018 | 2017 | |||||||||||
(In millions) | Level 2 | Level 3 | Level 2 | Level 3 | |||||||||
Financing receivables and financing receivables held for sale | $ | — | $ | 47 | $ | 32 | $ | 1,649 | |||||
Equity securities without readily determinable fair value and equity method investments | 479 | 874 | — | 2,076 | |||||||||
Long-lived assets | 152 | 422 | 177 | 591 | |||||||||
Goodwill | — | 2,440 | — | — | |||||||||
Total | $ | 631 | $ | 3,783 | $ | 209 | $ | 4,316 |
(In millions) | |||
Due in | |||
2019 | $ | 3,054 | |
2020 | 2,800 | ||
2021 | 2,418 | ||
2022 | 2,063 | ||
2023 | 1,599 | ||
2024 and later | 5,921 | ||
Total | $ | 17,855 |
ROLLFORWARD OF THE RESERVE RELATED TO REPURCHASE CLAIMS (In millions) | 2018 | 2017 | ||||
Balance at January 1 | $ | 416 | $ | 626 | ||
Provision | 2 | 51 | ||||
Claim resolutions / rescissions | (208 | ) | (261 | ) | ||
Balance at December 31 | $ | 210 | $ | 416 |
Principal pension plans | Other pension plans | ||||||||||||
December 31 (In millions, pre-tax) | 2018 | 2017 | 2018 | 2017 | |||||||||
Prior service cost (credit) | $ | 596 | $ | 784 | $ | 14 | $ | (100 | ) | ||||
Net actuarial loss | 10,430 | 14,326 | 3,918 | 3,712 | |||||||||
Total | $ | 11,026 | $ | 15,110 | $ | 3,932 | $ | 3,612 |
December 31 (In millions, pre-tax) | 2018 | 2017 | ||||
Prior service credit | $ | (2,584 | ) | $ | (2,814 | ) |
Net actuarial gain | (1,196 | ) | (732 | ) | ||
Total | $ | (3,780 | ) | $ | (3,546 | ) |
FINANCIAL INFORMATION FOR ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE December 31 (In millions) | 2018 | 2017 | ||||
Assets | ||||||
Current receivables(a) | $ | 184 | $ | 612 | ||
Inventories | 529 | 931 | ||||
Property, plant, and equipment – net | 423 | 931 | ||||
Goodwill | 514 | 1,619 | ||||
Other intangible assets – net | 370 | 403 | ||||
Contract and other deferred assets | 562 | 619 | ||||
Valuation allowance on disposal group classified as held for sale(b) | (1,013 | ) | (1,000 | ) | ||
Other | 60 | 49 | ||||
Assets of businesses held for sale | $ | 1,630 | $ | 4,164 | ||
Liabilities | ||||||
Accounts payable(a) | $ | 344 | $ | 602 | ||
Progress collections and price adjustments accrued | 84 | 179 | ||||
Non-current compensation and benefits | 152 | 162 | ||||
Other liabilities | 128 | 305 | ||||
Liabilities of businesses held for sale | $ | 708 | $ | 1,248 |
(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 $105 million and $366 million at December 31, 2018 and December 31, 2017, respectively, and amounts due to GE Capital associated with the supply chain finance program of $40 million at December 31, 2018. 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) | We adjusted the carrying value to fair value less cost to sell for certain held for sale businesses. |
2018 | 2017 | ||||||||||||
December 31 (In millions) | Carrying amount (net) | Estimated fair value | Carrying amount (net) | Estimated fair value | |||||||||
GE | |||||||||||||
Assets | |||||||||||||
Notes receivable | $ | 798 | $ | 787 | $ | 700 | $ | 700 | |||||
Liabilities | |||||||||||||
Borrowings(a)(b) | 32,309 | 29,586 | 34,473 | 35,416 | |||||||||
Borrowings (assumed by GE)(a)(c) | 36,262 | 36,298 | 47,114 | 53,502 | |||||||||
GE Capital | |||||||||||||
Assets | |||||||||||||
Loans | 10,820 | 10,807 | 17,363 | 17,331 | |||||||||
Other commercial mortgages | 1,747 | 1,792 | 1,489 | 1,566 | |||||||||
Loans held for sale | 404 | 405 | 3,274 | 3,274 | |||||||||
Liabilities | |||||||||||||
Borrowings(a)(d)(e)(f) | 43,028 | 42,006 | 55,353 | 60,415 | |||||||||
Investment contracts | 2,388 | 2,630 | 2,569 | 2,996 |
(a) | See Note 11 for further information. |
(b) | Included $210 million and $217 million of accrued interest in estimated fair value at December 31, 2018 and December 31, 2017, respectively. |
(c) | Included $568 million and $696 million of accrued interest in estimated fair value at December 31, 2018 and December 31, 2017, respectively. |
(d) | 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, 2018 and December 31, 2017 would have been reduced by $1,300 million and $1,754 million, respectively. |
(e) | Included $583 million and $731 million of accrued interest in estimated fair value at December 31, 2018 and December 31, 2017, respectively. |
(f) | Excluded $22,513 million and $39,844 million of net intercompany payable to GE at December 31, 2018 and December 31, 2017, respectively. |
INCOME TAXES PAID (RECOVERED) (In millions) | 2018 | 2017 | 2016 | ||||||
GE | $ | 1,803 | $ | 2,700 | $ | 2,612 | |||
GE Capital | 65 | (264 | ) | 4,857 | |||||
Total(a) | $ | 1,868 | $ | 2,436 | $ | 7,469 |
December 31, 2018 (In millions) | Long-term care insurance contracts | Structured settlement annuities & life insurance contracts | Other contracts | Other adjustments(a) | Total | ||||||||||
Future policy benefit reserves | $ | 16,029 | $ | 9,495 | $ | 169 | $ | 2,247 | $ | 27,940 | |||||
Claim reserves(b) | 3,917 | 230 | 1,178 | — | 5,324 | ||||||||||
Investment contracts(c) | — | 1,239 | 1,149 | — | 2,388 | ||||||||||
Unearned premiums and other | 34 | 205 | 103 | — | 342 | ||||||||||
19,980 | 11,169 | 2,599 | 2,247 | 35,994 | |||||||||||
Eliminations | — | — | (432 | ) | — | (432 | ) | ||||||||
Total | $ | 19,980 | $ | 11,169 | $ | 2,167 | $ | 2,247 | $ | 35,562 |
December 31, 2017 (In millions) | Long-term care insurance contracts | Structured settlement annuities & life insurance contracts | Other contracts | Other adjustments(a) | Total | ||||||||||
Future policy benefit reserves | $ | 16,522 | $ | 9,257 | $ | 191 | $ | 4,582 | $ | 30,552 | |||||
Claim reserves(b) | 3,590 | 274 | 1,230 | — | 5,094 | ||||||||||
Investment contracts(c) | — | 1,348 | 1,221 | — | 2,569 | ||||||||||
Unearned premiums and other | 45 | 211 | 117 | — | 372 | ||||||||||
20,157 | 11,090 | 2,759 | 4,582 | 38,587 | |||||||||||
Eliminations | — | — | (451 | ) | — | (451 | ) | ||||||||
Total | $ | 20,157 | $ | 11,090 | $ | 2,308 | $ | 4,582 | $ | 38,136 |
(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\" in our consolidated Statement of Earnings (Loss). |
(b) | Other contracts included claim reserves of $346 million and $364 million related to short-duration contracts at EIC, net of eliminations, at December 31, 2018 and December 31, 2017, respectively. |
(c) | Investment contracts are contracts without significant mortality or morbidity risks. |
December 31 (In millions) | 2018 | 2017 | ||||
Reinsurance recoverables, gross | ||||||
Future policy benefit reserves | $ | 2,605 | $ | 3,928 | ||
Claim reserves | 756 | 715 | ||||
3,361 | 4,643 | |||||
Allowance for losses | (1,090 | ) | (2,185 | ) | ||
Reinsurance recoverables, net | $ | 2,271 | $ | 2,458 |
LEVEL 3 MEASUREMENTS - SIGNIFICANT UNOBSERVABLE INPUTS | ||||||
(Dollars in millions) | Fair value | Valuation technique | Unobservable inputs | Range (weighted-average) | ||
December 31, 2018 | ||||||
Recurring fair value measurements | ||||||
Investment securities(b) | $ | 402 | Income approach | Discount rate(a) | 2.8%-7.6% (6.8)% | |
Nonrecurring fair value measurements | ||||||
Financing receivables | $ | 22 | Income approach | Discount rate(a) | 10% | |
Equity securities without readily determinable fair value and equity method investments | 579 | Income approach, market comparables | Discount rate(a) | 6.5%-35% (8.7%) | ||
Long-lived assets | 159 | Income approach | Discount rate(a) | 2.9%-11.1% (8.2%) | ||
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 | $ | 1,639 | Income approach | Discount rate(a) | 3.2%-16.5% (10.0%) | |
Equity securities without readily determinable fair value and equity method investments | 2,037 | Income approach | Discount rate(a) | 5.0%-50.0% (7.7%) | ||
Long-lived assets | 554 | Income approach | Discount rate(a) | 2.7%-18.0% (7.3%) |
(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 and government Non-U.S. securities |
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2018 | ||||||||||||||||||
(in millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Revenues | ||||||||||||||||||
Sales of goods and services | $ | 34,972 | $ | — | $ | — | $ | 164,691 | $ | (86,119 | ) | $ | 113,543 | |||||
GE Capital revenues from services | — | 917 | 1,038 | 9,531 | (3,414 | ) | 8,072 | |||||||||||
Total revenues and other income | 34,972 | 917 | 1,038 | 174,222 | (89,533 | ) | 121,615 | |||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 6,939 | 911 | 2,560 | 5,238 | (10,589 | ) | 5,059 | |||||||||||
Other costs and expenses | 42,233 | — | 1 | 183,511 | (86,795 | ) | 138,950 | |||||||||||
Total costs and expenses | 49,171 | 911 | 2,561 | 188,748 | (97,384 | ) | 144,008 | |||||||||||
Other income | 7,640 | — | — | 29,269 | (34,650 | ) | 2,259 | |||||||||||
Equity in earnings (loss) of affiliates | (15,162 | ) | — | 1,554 | 240,036 | (226,428 | ) | — | ||||||||||
Earnings (loss) from continuing operations before income taxes | (21,721 | ) | 6 | 31 | 254,778 | (253,228 | ) | (20,134 | ) | |||||||||
Benefit (provision) for income taxes | 1,092 | 5 | — | (2,381 | ) | 701 | (583 | ) | ||||||||||
Earnings (loss) from continuing operations | (20,629 | ) | 11 | 31 | 252,397 | (252,527 | ) | (20,717 | ) | |||||||||
Earnings (loss) from discontinued operations, net of taxes | (1,726 | ) | — | (39 | ) | — | 39 | (1,726 | ) | |||||||||
Net earnings (loss) | (22,355 | ) | 11 | (8 | ) | 252,396 | (252,488 | ) | (22,443 | ) | ||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | (204 | ) | 116 | (89 | ) | ||||||||||
Net earnings (loss) attributable to the Company | (22,355 | ) | 11 | (8 | ) | 252,601 | (252,604 | ) | (22,355 | ) | ||||||||
Other comprehensive income | (10 | ) | — | (82 | ) | (2,917 | ) | 2,999 | (10 | ) | ||||||||
Comprehensive income (loss) attributable to the Company | $ | (22,364 | ) | $ | 11 | $ | (90 | ) | $ | 249,683 | $ | (249,604 | ) | $ | (22,364 | ) |
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 | ||||||||||||||||||
Sales of goods and services | $ | 35,551 | $ | — | $ | — | $ | 161,158 | $ | (85,742 | ) | $ | 110,968 | |||||
GE Capital revenues from services | — | 703 | 800 | 9,888 | (4,115 | ) | 7,276 | |||||||||||
Total revenues and other income | 35,551 | 703 | 800 | 171,046 | (89,857 | ) | 118,243 | |||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 4,396 | 652 | 2,006 | 4,928 | (7,112 | ) | 4,869 | |||||||||||
Other costs and expenses | 36,263 | — | 18 | 175,676 | (85,306 | ) | 126,651 | |||||||||||
Total costs and expenses | 40,659 | 653 | 2,023 | 180,604 | (92,418 | ) | 131,520 | |||||||||||
Other income | 3,769 | — | — | 76,453 | (78,096 | ) | 2,126 | |||||||||||
Equity in earnings (loss) of affiliates | (3,985 | ) | — | 1,938 | 109,525 | (107,477 | ) | — | ||||||||||
Earnings (loss) from continuing operations before income taxes | (5,324 | ) | 50 | 714 | 176,420 | (183,012 | ) | (11,151 | ) | |||||||||
Benefit (provision) for income taxes | (2,842 | ) | (5 | ) | 115 | 5,926 | (583 | ) | 2,611 | |||||||||
Earnings (loss) from continuing operations | (8,166 | ) | 45 | 829 | 182,346 | (183,595 | ) | (8,540 | ) | |||||||||
Earnings (loss) from discontinued operations, net of taxes | (319 | ) | — | 41 | 4 | (35 | ) | (309 | ) | |||||||||
Net earnings (loss) | (8,484 | ) | 45 | 870 | 182,350 | (183,629 | ) | (8,849 | ) | |||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | (137 | ) | (228 | ) | (365 | ) | |||||||||
Net earnings (loss) attributable to the Company | (8,484 | ) | 45 | 870 | 182,487 | (183,402 | ) | (8,484 | ) | |||||||||
Other comprehensive income | 4,184 | — | 567 | (7,474 | ) | 6,908 | 4,184 | |||||||||||
Comprehensive income (loss) attributable to the Company | $ | (4,300 | ) | $ | 45 | $ | 1,436 | $ | 175,013 | $ | (176,494 | ) | $ | (4,300 | ) |
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 | ||||||||||||||||||
Sales of goods and services | $ | 40,315 | $ | — | $ | — | $ | 152,047 | $ | (82,191 | ) | $ | 110,171 | |||||
GE Capital revenues from services | — | 897 | 1,419 | 12,994 | (6,012 | ) | 9,297 | |||||||||||
Total revenues and other income | 40,315 | 897 | 1,419 | 165,041 | (88,203 | ) | 119,469 | |||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 3,505 | 831 | 2,567 | 5,429 | (7,308 | ) | 5,025 | |||||||||||
Other costs and expenses | 42,047 | — | 143 | 168,259 | (98,897 | ) | 111,553 | |||||||||||
Total costs and expenses | 45,552 | 831 | 2,711 | 173,688 | (106,205 | ) | 116,577 | |||||||||||
Other income | 10,949 | — | — | 63,363 | (70,172 | ) | 4,140 | |||||||||||
Equity in earnings (loss) of affiliates | 115 | — | 1,542 | 116,897 | (118,554 | ) | — | |||||||||||
Earnings (loss) from continuing operations before income taxes | 5,826 | 66 | 250 | 171,613 | (170,724 | ) | 7,031 | |||||||||||
Benefit (provision) for income taxes | 2,565 | (10 | ) | (105 | ) | (1,906 | ) | 589 | 1,133 | |||||||||
Earnings (loss) from continuing operations | 8,392 | 56 | 145 | 169,707 | (170,135 | ) | 8,165 | |||||||||||
Earnings (loss) from discontinued operations, net of taxes | (891 | ) | — | (1,927 | ) | 351 | 1,514 | (954 | ) | |||||||||
Net earnings (loss) | 7,500 | 56 | (1,782 | ) | 170,058 | (168,621 | ) | 7,211 | ||||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | (149 | ) | (141 | ) | (289 | ) | |||||||||
Net earnings (loss) attributable to the Company | 7,500 | 56 | (1,782 | ) | 170,207 | (168,480 | ) | 7,500 | ||||||||||
Other comprehensive income | (2,056 | ) | (12 | ) | 1,126 | (3,393 | ) | 2,279 | (2,056 | ) | ||||||||
Comprehensive income (loss) attributable to the Company | $ | 5,444 | $ | 44 | $ | (657 | ) | $ | 166,814 | $ | (166,201 | ) | $ | 5,444 |
CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION | ||||||||||||||||||
DECEMBER 31, 2018 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Assets | ||||||||||||||||||
Cash, cash equivalents and restricted cash | $ | 9,561 | $ | — | $ | — | $ | 25,975 | $ | (516 | ) | $ | 35,020 | |||||
Receivables - net | 28,426 | 17,467 | 2,792 | 69,268 | (84,161 | ) | 33,791 | |||||||||||
Investment in subsidiaries(a) | 215,434 | — | 45,832 | 733,535 | (994,801 | ) | — | |||||||||||
All other assets | 29,612 | 12 | — | 359,066 | (148,372 | ) | 240,318 | |||||||||||
Total assets | $ | 283,033 | $ | 17,479 | $ | 48,623 | $ | 1,187,844 | $ | (1,227,850 | ) | $ | 309,129 | |||||
Liabilities and equity | ||||||||||||||||||
Short-term borrowings | $ | 150,426 | $ | — | $ | 9,854 | $ | 9,649 | $ | (157,080 | ) | $ | 12,849 | |||||
Long-term and non-recourse borrowings | 59,800 | 16,115 | 24,341 | 41,066 | (44,213 | ) | 97,109 | |||||||||||
All other liabilities | 41,826 | 336 | 245 | 152,889 | (47,987 | ) | 147,308 | |||||||||||
Total Liabilities | 252,052 | 16,452 | 34,439 | 203,604 | (249,281 | ) | 257,266 | |||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 283,033 | $ | 17,479 | $ | 48,623 | $ | 1,187,844 | $ | (1,227,850 | ) | $ | 309,129 |
(a) | Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of $6,892 million and net assets of discontinued operations of $3,482 million. |
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, cash equivalents and restricted cash | $ | 3,472 | $ | — | $ | 3 | $ | 41,236 | $ | (743 | ) | $ | 43,967 | |||||
Receivables - net | 50,923 | 17,316 | 32,381 | 87,776 | (147,551 | ) | 40,846 | |||||||||||
Investment in subsidiaries(a) | 277,929 | — | 77,488 | 715,936 | (1,071,353 | ) | — | |||||||||||
All other assets | 49,147 | 16 | 32 | 437,537 | (202,301 | ) | 284,431 | |||||||||||
Total assets | $ | 381,472 | $ | 17,332 | $ | 109,904 | $ | 1,282,485 | $ | (1,421,948 | ) | $ | 369,245 | |||||
Liabilities and equity | ||||||||||||||||||
Short-term borrowings | $ | 191,807 | $ | — | $ | 46,033 | $ | 22,603 | $ | (236,407 | ) | $ | 24,036 | |||||
Long-term and non-recourse borrowings | 71,023 | 16,632 | 34,730 | 55,367 | (67,197 | ) | 110,556 | |||||||||||
All other liabilities | 62,612 | 484 | 131 | 172,020 | (77,483 | ) | 157,764 | |||||||||||
Total Liabilities | 325,442 | 17,116 | 80,894 | 249,991 | (381,088 | ) | 292,355 | |||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 381,472 | $ | 17,332 | $ | 109,904 | $ | 1,282,485 | $ | (1,421,948 | ) | $ | 369,245 |
(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 CASH FLOWS | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2018 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Cash from (used for) operating activities(a) | $ | 42,999 | $ | (387 | ) | $ | 34,361 | $ | 294,372 | $ | (367,099 | ) | $ | 4,246 | ||||
Cash from (used for) investing activities | 1,430 | 457 | 27,415 | (259,216 | ) | 248,152 | 18,239 | |||||||||||
Cash from (used for) financing activities | (38,340 | ) | (70 | ) | (61,779 | ) | (50,018 | ) | 119,175 | (31,033 | ) | |||||||
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | — | — | — | (628 | ) | — | (628 | ) | ||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | 6,089 | — | (3 | ) | (15,490 | ) | 228 | (9,176 | ) | |||||||||
Cash, cash equivalents and restricted cash at beginning of year | 3,472 | — | 3 | 41,993 | (743 | ) | 44,724 | |||||||||||
Cash, cash equivalents and restricted cash at end of year | 9,561 | — | — | 26,503 | (516 | ) | 35,548 | |||||||||||
Less cash, cash equivalents and restricted cash of discontinued operations at end of year | — | — | — | 528 | — | 528 | ||||||||||||
Cash, cash equivalents and restricted cash of continuing operations at end of year | $ | 9,561 | $ | — | $ | — | $ | 25,975 | $ | (516 | ) | $ | 35,020 |
(a) | Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $(1,726) 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 from (used for) operating activities(a) | $ | (29,470 | ) | $ | 52 | $ | 4,305 | $ | 248,524 | $ | (217,379 | ) | $ | 6,032 | ||||
Cash from (used for) investing activities | (4,251 | ) | (52 | ) | (1,871 | ) | (326,789 | ) | 339,527 | 6,564 | ||||||||
Cash from (used for) financing activities | 34,465 | — | (2,473 | ) | 70,163 | (121,302 | ) | (19,146 | ) | |||||||||
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | — | — | — | 891 | — | 891 | ||||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | 743 | — | (39 | ) | (7,211 | ) | 846 | (5,660 | ) | |||||||||
Cash, cash equivalents and restricted cash at beginning of year | 2,729 | — | 41 | 49,204 | (1,590 | ) | 50,384 | |||||||||||
Cash, cash equivalents and restricted cash at end of year | 3,472 | — | 3 | 41,993 | (743 | ) | 44,724 | |||||||||||
Less cash, cash equivalents and restricted cash of discontinued operations at end of year | — | — | — | 757 | — | 757 | ||||||||||||
Cash, cash equivalents and restricted cash of continuing operations at end of year | $ | 3,472 | $ | — | $ | 3 | $ | 41,236 | $ | (743 | ) | $ | 43,967 |
(a) | Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $(319) million. |
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 from (used for) operating activities(a) | $ | (5,344 | ) | $ | (10 | ) | $ | (387 | ) | $ | 229,968 | $ | (223,067 | ) | $ | 1,160 | ||
Cash from (used for) investing activities | 13,708 | 16,384 | 35,443 | (11,842 | ) | (4,557 | ) | 49,135 | ||||||||||
Cash from (used for) financing activities | (9,879 | ) | (16,374 | ) | (35,388 | ) | (275,647 | ) | 246,825 | (90,464 | ) | |||||||
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | — | — | — | (1,146 | ) | — | (1,146 | ) | ||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | (1,516 | ) | — | (332 | ) | (58,667 | ) | 19,201 | (41,315 | ) | ||||||||
Cash, cash equivalents and restricted cash at beginning of year | 4,244 | — | 374 | 107,871 | (20,791 | ) | 91,698 | |||||||||||
Cash, cash equivalents and restricted cash at end of year | 2,729 | — | 41 | 49,204 | (1,590 | ) | 50,384 | |||||||||||
Less cash, cash equivalents and restricted cash of discontinued operations at end of year | — | — | — | 1,601 | — | 1,601 | ||||||||||||
Cash, cash equivalents and restricted cash of continuing operations at end of year | $ | 2,729 | $ | — | $ | 41 | $ | 47,603 | $ | (1,590 | ) | $ | 48,783 |
(a) | Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $(891) million. |
• | Modifications. Under the new revenue standard, contract modifications are generally accounted for as if we entered into a new contract, resulting in prospective recognition of changes to our estimates of contract billings and costs. That is, cumulative effect adjustments will generally no longer be recognized in the period that modifications occur. |
• | Scope and term. The new revenue standard provides more prescriptive guidance on identifying the elements of long-term service type contracts that should be accounted for as separate performance obligations. Application of this guidance, which focuses on understanding the nature of the arrangement, including our customers' discretion in purchasing decisions, has resulted in changes to the scope of elements included in our accounting model for long-term service agreements. For example, significant equipment upgrades offered as part of our long-term service agreements are generally accounted for as separate performance obligations under the new revenue standard. |
For the years ended December 31 (In millions) | 2018 | 2017 | 2016 | ||||||
All other operating activities | |||||||||
Other gains on investing activities | $ | (510 | ) | $ | (138 | ) | $ | (90 | ) |
Restructuring and other charges(a) | 990 | 1,951 | 1,668 | ||||||
Increase (decrease) in equipment project accruals | (951 | ) | (186 | ) | (595 | ) | |||
Other(b) | 596 | (406 | ) | (1,834 | ) | ||||
$ | 125 | $ | 1,221 | $ | (851 | ) | |||
All other investing activities | |||||||||
Derivative settlements (net)(c) | $ | (861 | ) | $ | (1,142 | ) | $ | — | |
Investments in intangible assets (net) | (496 | ) | (321 | ) | (499 | ) | |||
Investments in associated companies (net) | 127 | (226 | ) | (420 | ) | ||||
Other investments (net) | (50 | ) | (281 | ) | (160 | ) | |||
Other | 90 | (90 | ) | (270 | ) | ||||
$ | (1,190 | ) | $ | (2,061 | ) | $ | (1,349 | ) | |
All other financing activities | |||||||||
Proceeds from BHGE public share offering | $ | 2,273 | $ | — | $ | — | |||
Acquisition of noncontrolling interests(d) | (3,732 | ) | (499 | ) | (102 | ) | |||
Dividends paid to noncontrolling interests | (366 | ) | (263 | ) | (49 | ) | |||
Other | 102 | 234 | (122 | ) | |||||
$ | (1,723 | ) | $ | (528 | ) | $ | (273 | ) | |
Net dispositions (purchases) of GE shares for treasury | |||||||||
Open market purchases under share repurchase program(e) | $ | (245 | ) | $ | (3,506 | ) | $ | (22,581 | ) |
Other purchases | (23 | ) | (67 | ) | (399 | ) | |||
Dispositions | 250 | 1,021 | 1,550 | ||||||
$ | (17 | ) | $ | (2,550 | ) | $ | (21,429 | ) |
(a) | Reflected the effects of restructuring and other charges of $2,941 million, $3,947 million and $3,350 million and restructuring and other cash expenditures of $(1,951) million, $(1,996) million and $(1,682) million for the years ended December 31, 2018, 2017 and 2016, respectively. Excludes non-cash adjustments reflected as \"Depreciation and amortization of property, plant and equipment\" or \"Amortization of intangible assets\" in our consolidated Statement of Cash Flows. |
(b) | Included other 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, such as the timing of payments of employee-related liabilities and customer allowances. |
(c) | The classification of settlements of derivative instruments was corrected from operating cash flows to investing cash flows in 2017. Such settlements of $178 million in 2016 were not reclassified and corrected in investing cash flows as they were not considered material. |
(d) | Included the acquisition of Alstom's interest in the grid technology, renewable energy, and global nuclear and French steam power joint ventures for $(3,105) million in the fourth quarter of 2018. See Note 15. |
(e) | Included $(11,370) million paid under ASR agreements in 2016. |
For the years ended December 31 (In millions) | 2018 | 2017 | 2016 | ||||||
All other operating activities | |||||||||
Cash collateral on derivative contracts | $ | (595 | ) | $ | 131 | $ | (428 | ) | |
Increase (decrease) in other liabilities | 240 | (798 | ) | 3,256 | |||||
Other(a) | 483 | 11,783 | 1,204 | ||||||
$ | 127 | $ | 11,115 | $ | 4,032 | ||||
Net decrease (increase) in GE Capital financing receivables | |||||||||
Increase in loans to customers | $ | (30,207 | ) | $ | (45,251 | ) | $ | (65,055 | ) |
Principal collections from customers - loans | 37,237 | 47,471 | 60,375 | ||||||
Investment in equipment for financing leases | (306 | ) | (585 | ) | (690 | ) | |||
Principal collections from customers - financing leases | 802 | 1,011 | 856 | ||||||
Sales of financing receivables | 2,458 | 251 | 3,235 | ||||||
$ | 9,986 | $ | 2,897 | $ | (1,279 | ) | |||
All other investing activities | |||||||||
Purchases of investment securities | $ | (5,775 | ) | $ | (2,867 | ) | $ | (18,588 | ) |
Dispositions and maturities of investment securities | 8,309 | 10,001 | 7,343 | ||||||
Decrease (increase) in other assets - investments | (4,516 | ) | (8,497 | ) | 8,853 | ||||
Other(b) | 2,464 | 4,375 | 3,690 | ||||||
$ | 482 | $ | 3,013 | $ | 1,297 | ||||
Repayments and other reductions (maturities longer than 90 days) | |||||||||
Short-term (91 to 365 days) | $ | (14,251 | ) | $ | (18,591 | ) | $ | (44,519 | ) |
Long-term (longer than one year) | (5,460 | ) | (2,054 | ) | (13,418 | ) | |||
Principal payments - non-recourse, leveraged leases | (125 | ) | (362 | ) | (348 | ) | |||
$ | (19,836 | ) | $ | (21,007 | ) | $ | (58,285 | ) | |
All other financing activities | |||||||||
Proceeds from sales of investment contracts | $ | 5 | $ | 10 | $ | 19 | |||
Redemption of investment contracts | (268 | ) | (344 | ) | (346 | ) | |||
Other | (2,145 | ) | 54 | (2,134 | ) | ||||
$ | (2,408 | ) | $ | (280 | ) | $ | (2,460 | ) |
(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. |
(In millions) | 2018 | 2017 | 2016 | ||||||
Compensation expense (after-tax)(a)(b) | $ | 336 | $ | 241 | $ | 297 | |||
Cash received from stock options exercised | 24 | 528 | 1,037 | ||||||
Intrinsic value of stock options exercised and RSUs vested | 83 | 493 | 860 |
(a) | Unrecognized compensation expense related to unvested equity awards as of December 31, 2018 was $740 million, which will be amortized over approximately 2 years. |
(b) | Income tax benefit recognized in earnings was $40 million, $138 million, and $274 million in 2018, 2017, and 2016, respectively. |
(In millions) | 2018 | 2017 | 2016 | ||||||
Balance at January 1 | $ | 2,348 | $ | 1,929 | $ | 1,733 | |||
Current-year provisions | 1,071 | 961 | 801 | ||||||
Expenditures | (960 | ) | (827 | ) | (734 | ) | |||
Other changes(a) | 51 | 286 | 130 | ||||||
Balance at December 31 | $ | 2,510 | $ | 2,348 | $ | 1,929 |
(a) | Included $172 million related to Baker Hughes and LM Wind Power acquisitions in 2017. |
ROLLFORWARD OF THE RESERVE RELATED TO REPURCHASE CLAIMS (In millions) | 2018 | 2017 | ||||
Balance at January 1 | $ | 416 | $ | 626 | ||
Provision | 2 | 51 | ||||
Claim resolutions / rescissions | (208 | ) | (261 | ) | ||
Balance at December 31 | $ | 210 | $ | 416 |
• | 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 that issued the guaranteed notes 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 in the comparative periods, this category includes the impact of new accounting policies adopted as described in Note 1; and |
• | Consolidated – prepared on a consolidated basis. |
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2018 | ||||||||||||||||||
(in millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Revenues | ||||||||||||||||||
Sales of goods and services | $ | 34,972 | $ | — | $ | — | $ | 164,691 | $ | (86,119 | ) | $ | 113,543 | |||||
GE Capital revenues from services | — | 917 | 1,038 | 9,531 | (3,414 | ) | 8,072 | |||||||||||
Total revenues and other income | 34,972 | 917 | 1,038 | 174,222 | (89,533 | ) | 121,615 | |||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 6,939 | 911 | 2,560 | 5,238 | (10,589 | ) | 5,059 | |||||||||||
Other costs and expenses | 42,233 | — | 1 | 183,511 | (86,795 | ) | 138,950 | |||||||||||
Total costs and expenses | 49,171 | 911 | 2,561 | 188,748 | (97,384 | ) | 144,008 | |||||||||||
Other income | 7,640 | — | — | 29,269 | (34,650 | ) | 2,259 | |||||||||||
Equity in earnings (loss) of affiliates | (15,162 | ) | — | 1,554 | 240,036 | (226,428 | ) | — | ||||||||||
Earnings (loss) from continuing operations before income taxes | (21,721 | ) | 6 | 31 | 254,778 | (253,228 | ) | (20,134 | ) | |||||||||
Benefit (provision) for income taxes | 1,092 | 5 | — | (2,381 | ) | 701 | (583 | ) | ||||||||||
Earnings (loss) from continuing operations | (20,629 | ) | 11 | 31 | 252,397 | (252,527 | ) | (20,717 | ) | |||||||||
Earnings (loss) from discontinued operations, net of taxes | (1,726 | ) | — | (39 | ) | — | 39 | (1,726 | ) | |||||||||
Net earnings (loss) | (22,355 | ) | 11 | (8 | ) | 252,396 | (252,488 | ) | (22,443 | ) | ||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | (204 | ) | 116 | (89 | ) | ||||||||||
Net earnings (loss) attributable to the Company | (22,355 | ) | 11 | (8 | ) | 252,601 | (252,604 | ) | (22,355 | ) | ||||||||
Other comprehensive income | (10 | ) | — | (82 | ) | (2,917 | ) | 2,999 | (10 | ) | ||||||||
Comprehensive income (loss) attributable to the Company | $ | (22,364 | ) | $ | 11 | $ | (90 | ) | $ | 249,683 | $ | (249,604 | ) | $ | (22,364 | ) |
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 | ||||||||||||||||||
Sales of goods and services | $ | 35,551 | $ | — | $ | — | $ | 161,158 | $ | (85,742 | ) | $ | 110,968 | |||||
GE Capital revenues from services | — | 703 | 800 | 9,888 | (4,115 | ) | 7,276 | |||||||||||
Total revenues and other income | 35,551 | 703 | 800 | 171,046 | (89,857 | ) | 118,243 | |||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 4,396 | 652 | 2,006 | 4,928 | (7,112 | ) | 4,869 | |||||||||||
Other costs and expenses | 36,263 | — | 18 | 175,676 | (85,306 | ) | 126,651 | |||||||||||
Total costs and expenses | 40,659 | 653 | 2,023 | 180,604 | (92,418 | ) | 131,520 | |||||||||||
Other income | 3,769 | — | — | 76,453 | (78,096 | ) | 2,126 | |||||||||||
Equity in earnings (loss) of affiliates | (3,985 | ) | — | 1,938 | 109,525 | (107,477 | ) | — | ||||||||||
Earnings (loss) from continuing operations before income taxes | (5,324 | ) | 50 | 714 | 176,420 | (183,012 | ) | (11,151 | ) | |||||||||
Benefit (provision) for income taxes | (2,842 | ) | (5 | ) | 115 | 5,926 | (583 | ) | 2,611 | |||||||||
Earnings (loss) from continuing operations | (8,166 | ) | 45 | 829 | 182,346 | (183,595 | ) | (8,540 | ) | |||||||||
Earnings (loss) from discontinued operations, net of taxes | (319 | ) | — | 41 | 4 | (35 | ) | (309 | ) | |||||||||
Net earnings (loss) | (8,484 | ) | 45 | 870 | 182,350 | (183,629 | ) | (8,849 | ) | |||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | (137 | ) | (228 | ) | (365 | ) | |||||||||
Net earnings (loss) attributable to the Company | (8,484 | ) | 45 | 870 | 182,487 | (183,402 | ) | (8,484 | ) | |||||||||
Other comprehensive income | 4,184 | — | 567 | (7,474 | ) | 6,908 | 4,184 | |||||||||||
Comprehensive income (loss) attributable to the Company | $ | (4,300 | ) | $ | 45 | $ | 1,436 | $ | 175,013 | $ | (176,494 | ) | $ | (4,300 | ) |
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 | ||||||||||||||||||
Sales of goods and services | $ | 40,315 | $ | — | $ | — | $ | 152,047 | $ | (82,191 | ) | $ | 110,171 | |||||
GE Capital revenues from services | — | 897 | 1,419 | 12,994 | (6,012 | ) | 9,297 | |||||||||||
Total revenues and other income | 40,315 | 897 | 1,419 | 165,041 | (88,203 | ) | 119,469 | |||||||||||
Costs and expenses | ||||||||||||||||||
Interest and other financial charges | 3,505 | 831 | 2,567 | 5,429 | (7,308 | ) | 5,025 | |||||||||||
Other costs and expenses | 42,047 | — | 143 | 168,259 | (98,897 | ) | 111,553 | |||||||||||
Total costs and expenses | 45,552 | 831 | 2,711 | 173,688 | (106,205 | ) | 116,577 | |||||||||||
Other income | 10,949 | — | — | 63,363 | (70,172 | ) | 4,140 | |||||||||||
Equity in earnings (loss) of affiliates | 115 | — | 1,542 | 116,897 | (118,554 | ) | — | |||||||||||
Earnings (loss) from continuing operations before income taxes | 5,826 | 66 | 250 | 171,613 | (170,724 | ) | 7,031 | |||||||||||
Benefit (provision) for income taxes | 2,565 | (10 | ) | (105 | ) | (1,906 | ) | 589 | 1,133 | |||||||||
Earnings (loss) from continuing operations | 8,392 | 56 | 145 | 169,707 | (170,135 | ) | 8,165 | |||||||||||
Earnings (loss) from discontinued operations, net of taxes | (891 | ) | — | (1,927 | ) | 351 | 1,514 | (954 | ) | |||||||||
Net earnings (loss) | 7,500 | 56 | (1,782 | ) | 170,058 | (168,621 | ) | 7,211 | ||||||||||
Less net earnings (loss) attributable to noncontrolling interests | — | — | — | (149 | ) | (141 | ) | (289 | ) | |||||||||
Net earnings (loss) attributable to the Company | 7,500 | 56 | (1,782 | ) | 170,207 | (168,480 | ) | 7,500 | ||||||||||
Other comprehensive income | (2,056 | ) | (12 | ) | 1,126 | (3,393 | ) | 2,279 | (2,056 | ) | ||||||||
Comprehensive income (loss) attributable to the Company | $ | 5,444 | $ | 44 | $ | (657 | ) | $ | 166,814 | $ | (166,201 | ) | $ | 5,444 |
CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION | ||||||||||||||||||
DECEMBER 31, 2018 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Assets | ||||||||||||||||||
Cash, cash equivalents and restricted cash | $ | 9,561 | $ | — | $ | — | $ | 25,975 | $ | (516 | ) | $ | 35,020 | |||||
Receivables - net | 28,426 | 17,467 | 2,792 | 69,268 | (84,161 | ) | 33,791 | |||||||||||
Investment in subsidiaries(a) | 215,434 | — | 45,832 | 733,535 | (994,801 | ) | — | |||||||||||
All other assets | 29,612 | 12 | — | 359,066 | (148,372 | ) | 240,318 | |||||||||||
Total assets | $ | 283,033 | $ | 17,479 | $ | 48,623 | $ | 1,187,844 | $ | (1,227,850 | ) | $ | 309,129 | |||||
Liabilities and equity | ||||||||||||||||||
Short-term borrowings | $ | 150,426 | $ | — | $ | 9,854 | $ | 9,649 | $ | (157,080 | ) | $ | 12,849 | |||||
Long-term and non-recourse borrowings | 59,800 | 16,115 | 24,341 | 41,066 | (44,213 | ) | 97,109 | |||||||||||
All other liabilities | 41,826 | 336 | 245 | 152,889 | (47,987 | ) | 147,308 | |||||||||||
Total Liabilities | 252,052 | 16,452 | 34,439 | 203,604 | (249,281 | ) | 257,266 | |||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 283,033 | $ | 17,479 | $ | 48,623 | $ | 1,187,844 | $ | (1,227,850 | ) | $ | 309,129 |
(a) | Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of $6,892 million and net assets of discontinued operations of $3,482 million. |
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, cash equivalents and restricted cash | $ | 3,472 | $ | — | $ | 3 | $ | 41,236 | $ | (743 | ) | $ | 43,967 | |||||
Receivables - net | 50,923 | 17,316 | 32,381 | 87,776 | (147,551 | ) | 40,846 | |||||||||||
Investment in subsidiaries(a) | 277,929 | — | 77,488 | 715,936 | (1,071,353 | ) | — | |||||||||||
All other assets | 49,147 | 16 | 32 | 437,537 | (202,301 | ) | 284,431 | |||||||||||
Total assets | $ | 381,472 | $ | 17,332 | $ | 109,904 | $ | 1,282,485 | $ | (1,421,948 | ) | $ | 369,245 | |||||
Liabilities and equity | ||||||||||||||||||
Short-term borrowings | $ | 191,807 | $ | — | $ | 46,033 | $ | 22,603 | $ | (236,407 | ) | $ | 24,036 | |||||
Long-term and non-recourse borrowings | 71,023 | 16,632 | 34,730 | 55,367 | (67,197 | ) | 110,556 | |||||||||||
All other liabilities | 62,612 | 484 | 131 | 172,020 | (77,483 | ) | 157,764 | |||||||||||
Total Liabilities | 325,442 | 17,116 | 80,894 | 249,991 | (381,088 | ) | 292,355 | |||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 381,472 | $ | 17,332 | $ | 109,904 | $ | 1,282,485 | $ | (1,421,948 | ) | $ | 369,245 |
(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 CASH FLOWS | ||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2018 | ||||||||||||||||||
(In millions) | Parent Company Guarantor | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantor Subsidiaries | Consolidating Adjustments | Consolidated | ||||||||||||
Cash from (used for) operating activities(a) | $ | 42,999 | $ | (387 | ) | $ | 34,361 | $ | 294,372 | $ | (367,099 | ) | $ | 4,246 | ||||
Cash from (used for) investing activities | 1,430 | 457 | 27,415 | (259,216 | ) | 248,152 | 18,239 | |||||||||||
Cash from (used for) financing activities | (38,340 | ) | (70 | ) | (61,779 | ) | (50,018 | ) | 119,175 | (31,033 | ) | |||||||
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | — | — | — | (628 | ) | — | (628 | ) | ||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | 6,089 | — | (3 | ) | (15,490 | ) | 228 | (9,176 | ) | |||||||||
Cash, cash equivalents and restricted cash at beginning of year | 3,472 | — | 3 | 41,993 | (743 | ) | 44,724 | |||||||||||
Cash, cash equivalents and restricted cash at end of year | 9,561 | — | — | 26,503 | (516 | ) | 35,548 | |||||||||||
Less cash, cash equivalents and restricted cash of discontinued operations at end of year | — | — | — | 528 | — | 528 | ||||||||||||
Cash, cash equivalents and restricted cash of continuing operations at end of year | $ | 9,561 | $ | — | $ | — | $ | 25,975 | $ | (516 | ) | $ | 35,020 |
(a) | Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $(1,726) 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 from (used for) operating activities(a) | $ | (29,470 | ) | $ | 52 | $ | 4,305 | $ | 248,524 | $ | (217,379 | ) | $ | 6,032 | ||||
Cash from (used for) investing activities | (4,251 | ) | (52 | ) | (1,871 | ) | (326,789 | ) | 339,527 | 6,564 | ||||||||
Cash from (used for) financing activities | 34,465 | — | (2,473 | ) | 70,163 | (121,302 | ) | (19,146 | ) | |||||||||
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | — | — | — | 891 | — | 891 | ||||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | 743 | — | (39 | ) | (7,211 | ) | 846 | (5,660 | ) | |||||||||
Cash, cash equivalents and restricted cash at beginning of year | 2,729 | — | 41 | 49,204 | (1,590 | ) | 50,384 | |||||||||||
Cash, cash equivalents and restricted cash at end of year | 3,472 | — | 3 | 41,993 | (743 | ) | 44,724 | |||||||||||
Less cash, cash equivalents and restricted cash of discontinued operations at end of year | — | — | — | 757 | — | 757 | ||||||||||||
Cash, cash equivalents and restricted cash of continuing operations at end of year | $ | 3,472 | $ | — | $ | 3 | $ | 41,236 | $ | (743 | ) | $ | 43,967 |
(a) | Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $(319) million. |
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 from (used for) operating activities(a) | $ | (5,344 | ) | $ | (10 | ) | $ | (387 | ) | $ | 229,968 | $ | (223,067 | ) | $ | 1,160 | ||
Cash from (used for) investing activities | 13,708 | 16,384 | 35,443 | (11,842 | ) | (4,557 | ) | 49,135 | ||||||||||
Cash from (used for) financing activities | (9,879 | ) | (16,374 | ) | (35,388 | ) | (275,647 | ) | 246,825 | (90,464 | ) | |||||||
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | — | — | — | (1,146 | ) | — | (1,146 | ) | ||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | (1,516 | ) | — | (332 | ) | (58,667 | ) | 19,201 | (41,315 | ) | ||||||||
Cash, cash equivalents and restricted cash at beginning of year | 4,244 | — | 374 | 107,871 | (20,791 | ) | 91,698 | |||||||||||
Cash, cash equivalents and restricted cash at end of year | 2,729 | — | 41 | 49,204 | (1,590 | ) | 50,384 | |||||||||||
Less cash, cash equivalents and restricted cash of discontinued operations at end of year | — | — | — | 1,601 | — | 1,601 | ||||||||||||
Cash, cash equivalents and restricted cash of continuing operations at end of year | $ | 2,729 | $ | — | $ | 41 | $ | 47,603 | $ | (1,590 | ) | $ | 48,783 |
(a) | Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $(891) million. |
December 31, 2018 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Revenues in excess of billings | $ | 5,368 | $ | 5,412 | $ | 703 | $ | — | $ | 590 | $ | — | $ | 12,072 | |||||||
Billings in excess of revenues | (1,693 | ) | (3,297 | ) | (187 | ) | — | (56 | ) | — | (5,232 | ) | |||||||||
Long-term service agreements(b) | $ | 3,675 | $ | 2,115 | $ | 516 | $ | — | $ | 534 | $ | — | $ | 6,840 | |||||||
Equipment contract revenues(c) | 3,899 | 352 | 1,085 | 287 | 101 | 551 | 6,275 | ||||||||||||||
Total contract assets | 7,574 | 2,468 | 1,600 | 287 | 635 | 551 | 13,115 | ||||||||||||||
Deferred inventory costs(d) | 1,012 | 673 | 179 | 1,258 | 34 | 365 | 3,522 | ||||||||||||||
Nonrecurring engineering costs(e) | 124 | 1,916 | 22 | 22 | 100 | 34 | 2,217 | ||||||||||||||
Customer advances and other | — | 1,146 | — | — | 1 | — | 1,147 | ||||||||||||||
Contract and other deferred assets | $ | 8,709 | $ | 6,204 | $ | 1,800 | $ | 1,567 | $ | 769 | $ | 951 | $ | 20,000 |
December 31, 2017 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Revenues in excess of billings | $ | 6,294 | $ | 4,556 | $ | 721 | $ | 1 | $ | 827 | $ | — | $ | 12,400 | |||||||
Billings in excess of revenues | (2,937 | ) | (1,942 | ) | (204 | ) | — | (414 | ) | — | (5,498 | ) | |||||||||
Long-term service agreements(b) | $ | 3,357 | $ | 2,614 | $ | 517 | $ | 1 | $ | 413 | $ | — | $ | 6,902 | |||||||
Equipment contract revenues(c) | 4,757 | 280 | 1,095 | 295 | 76 | 371 | 6,874 | ||||||||||||||
Total contract assets | 8,115 | 2,893 | 1,612 | 296 | 488 | 371 | 13,775 | ||||||||||||||
Deferred inventory costs(d) | 1,304 | 564 | 358 | 950 | 43 | 359 | 3,579 | ||||||||||||||
Nonrecurring engineering costs(e) | 122 | 1,696 | — | — | 87 | — | 1,905 | ||||||||||||||
Customer advances and other | — | 1,098 | — | — | — | — | 1,098 | ||||||||||||||
Contract and other deferred assets | $ | 9,539 | $ | 6,251 | $ | 1,971 | $ | 1,246 | $ | 619 | $ | 729 | $ | 20,356 |
(a) | Primarily includes our Healthcare segment. |
(b) | On our consolidated Statement of Financial Position, long-term service agreement balances are presented net of related billings in excess of revenues of $5,232 million and $5,498 million at December 31, 2018 and 2017, respectively. |
(c) | Included in this balance are amounts due from customers for the sale of service upgrades, which we collect through higher fixed or usage-based fees from servicing the equipment under long-term service agreements. Amounts due from these arrangements totaled $883 million and $748 million as of December 31, 2018 and 2017, respectively. |
(d) | Represents cost deferral for shipped goods (such as components for wind turbine assemblies within our Renewable Energy segment) and labor and overhead costs on time and material service contracts (primarily originating in Power and Aviation) and other costs for which the criteria for revenue recognition has not yet been met. |
(e) | Includes costs incurred prior to production (such as requisition engineering) for equipment production contracts, primarily within our Aviation segment, which are allocated ratably to each unit produced. |
December 31, 2018 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Progress collections on equipment contracts | $ | 6,690 | $ | 114 | $ | 878 | $ | 423 | $ | 239 | $ | — | $ | 8,344 | |||||||
Other progress collections | 692 | 4,034 | 552 | 3,467 | 68 | 338 | 9,151 | ||||||||||||||
Total progress collections | $ | 7,382 | $ | 4,148 | $ | 1,430 | $ | 3,890 | $ | 307 | $ | 338 | $ | 17,495 | |||||||
Deferred income | 163 | 1,338 | 164 | 241 | 11 | 1,739 | 3,656 | ||||||||||||||
Progress collections and deferred income | $ | 7,545 | $ | 5,486 | $ | 1,594 | $ | 4,131 | $ | 318 | $ | 2,077 | $ | 21,151 |
December 31, 2017 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Progress collections on equipment contracts | $ | 8,493 | $ | 134 | $ | 1,149 | $ | 591 | $ | 316 | $ | — | $ | 10,683 | |||||||
Other progress collections | 775 | 4,373 | 141 | 2,180 | 71 | 88 | 7,627 | ||||||||||||||
Total progress collections | $ | 9,268 | $ | 4,507 | $ | 1,290 | $ | 2,771 | $ | 387 | $ | 88 | $ | 18,310 | |||||||
Deferred income | 286 | 1,289 | 317 | 245 | 18 | 1,756 | 3,911 | ||||||||||||||
Progress collections and deferred income | $ | 9,554 | $ | 5,795 | $ | 1,608 | $ | 3,016 | $ | 405 | $ | 1,843 | $ | 22,221 |
(a) | Primarily includes our Healthcare segment. |
December 31 (Dollars in millions) | 2018 | 2017 | |||||||||
Short-term borrowings | Amount | Average Rate(a) | Amount | Average Rate(a) | |||||||
GE | |||||||||||
Commercial paper | $ | 3,005 | 1.64 | % | $ | 3,000 | 1.35 | % | |||
Current portion of long-term borrowings | 103 | 6.60 | 1,142 | 4.29 | |||||||
Current portion of long-term borrowings assumed by GE(e) | 4,207 | 3.76 | 8,310 | 2.82 | |||||||
Other | 2,112 | 2,095 | |||||||||
Total GE short-term borrowings | $ | 9,427 | $ | 14,548 | |||||||
GE Capital | |||||||||||
Commercial paper | $ | 5 | $ | 5,013 | 1.45 | ||||||
Current portion of long-term borrowings(b) | 3,984 | 2.00 | 5,781 | 1.26 | |||||||
Intercompany payable to GE(d) | 2,684 | 8,310 | |||||||||
Other | 1,010 | 497 | |||||||||
Total GE Capital short-term borrowings | $ | 7,684 | $ | 19,602 | |||||||
Eliminations(d) | (4,262 | ) | (10,114 | ) | |||||||
Total short-term borrowings | $ | 12,849 | $ | 24,036 | |||||||
Long-term borrowings | Maturities | Amount | Average Rate(a) | Amount | Average Rate(a) | ||||||
GE | |||||||||||
Senior notes(c) | 2020-2047 | $ | 26,628 | 2.58 | % | $ | 27,233 | 2.55 | % | ||
Senior notes assumed by GE(e) | 2020-2055 | 29,218 | 4.30 | 35,491 | 3.59 | ||||||
Subordinated notes assumed by GE(e) | 2021-2037 | 2,836 | 3.64 | 2,913 | 3.28 | ||||||
Other | 460 | 1,003 | |||||||||
Other borrowings assumed by GE(e) | — | 400 | |||||||||
Total GE long-term borrowings | $ | 59,143 | $ | 67,040 | |||||||
GE Capital | |||||||||||
Senior notes | 2020-2039 | $ | 35,105 | 3.49 | $ | 40,754 | 3.11 | ||||
Subordinated notes | 165 | 208 | |||||||||
Intercompany payable to GE(d) | 19,828 | 31,533 | |||||||||
Other(b) | 885 | 1,118 | |||||||||
Total GE Capital long-term borrowings | $ | 55,982 | $ | 73,614 | |||||||
Eliminations(d) | (19,892 | ) | (32,079 | ) | |||||||
Total long-term borrowings | $ | 95,234 | $ | 108,575 | |||||||
Non-recourse borrowings of consolidated securitization entities(f) | 2019-2022 | 1,875 | 3.97 | % | 1,980 | 2.77 | % | ||||
Total borrowings | $ | 109,958 | $ | 134,591 |
(a) | Based on year-end balances and year-end local currency effective interest rates, including the effects from hedging. |
(b) | Included $161 million and $885 million of short- and long-term borrowings, respectively, at December 31, 2018 and $348 million and $1,118 million of short- and long-term borrowings, respectively, at December 31, 2017, of funding secured by aircraft and other collateral. Of this, $216 million and $458 million is non-recourse to GE Capital at December 31, 2018 and 2017, respectively. |
(c) | Included $6,177 million and $6,206 million of BHGE senior notes at December 31, 2018 and 2017, respectively. Total BHGE borrowings were $6,330 million and $7,225 million at December 31, 2018 and 2017, respectively. |
(d) | Included a reduction of $1,523 million and zero for the current portion of intercompany loans from GE Capital to GE at December 31, 2018 and 2017, respectively, and a reduction of $12,226 million and $7,271 million for the long-term portion of intercompany loans from GE Capital to GE at December 31, 2018 and 2017, respectively. These loans bear the right of offset against amounts owed under the assumed debt agreement and can be prepaid by GE at any time in whole or in part, without premium or penalty. |
(e) | At December 31, 2018, the remaining GE Capital borrowings that had been assumed by GE as part of the GE Capital Exit Plan was $36,262 million ($4,207 million short term and $32,054 long term), for which GE has an offsetting Receivable from GE Capital of $22,513 million. The difference of $13,749 million represents the amount of borrowings GE Capital had funded with available cash to GE via an intercompany loan in lieu of GE issuing borrowings externally. |
(f) | Included $225 million and $621 million of current portion of long-term borrowings at December 31, 2018 and 2017, respectively. See Note 21 for further information. |
(In millions) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||
GE excluding assumed debt(a) | $ | 103 | $ | 870 | $ | 578 | $ | 6,271 | $ | 1,451 | |||||
GE Capital debt assumed by GE(b) | 4,207 | 6,172 | 4,663 | 1,959 | 2,835 | ||||||||||
GE Capital other debt | 3,984 | (c) | 11,309 | 2,001 | 2,207 | 2,358 |
(a) | Includes maturities of BHGE borrowings of $43 million, $12 million, $537 million, $1,274 million and $8 million in 2019, 2020, 2021, 2022 and 2023, respectively. |
(b) | Of these maturities, $1,523 million, $3,369 million, $442 million, zero and zero for 2019, 2020, 2021, 2022 and 2023, respectively, were effectively transferred to GE through intercompany loans with right of offset. |
(c) | Fixed and floating rate notes of $433 million contain put options with exercise dates in 2019, and which have final maturity beyond 2023. |
DISAGGREGATED EQUIPMENT | Years ended December 31 | ||||||||||||||||||||||||||||
AND SERVICES REVENUES(a) | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||
(In millions) | Equipment Revenues | Services Revenues | Total Revenues | Equipment Revenues | Services Revenues | Total Revenues | Equipment Revenues | Services Revenues | Total Revenues | ||||||||||||||||||||
Power | $ | 12,296 | $ | 15,004 | $ | 27,300 | $ | 17,477 | $ | 17,401 | $ | 34,878 | $ | 17,359 | $ | 18,476 | $ | 35,835 | |||||||||||
Renewable Energy | 7,036 | 2,497 | 9,533 | 7,036 | 2,169 | 9,205 | 8,861 | 891 | 9,752 | ||||||||||||||||||||
Aviation | 11,499 | 19,067 | 30,566 | 10,215 | 16,797 | 27,013 | 11,357 | 14,883 | 26,240 | ||||||||||||||||||||
Oil & Gas | 9,251 | 13,608 | 22,859 | 7,188 | 9,992 | 17,180 | 6,083 | 6,855 | 12,938 | ||||||||||||||||||||
Healthcare | 11,422 | 8,363 | 19,784 | 10,771 | 8,246 | 19,017 | 10,206 | 8,006 | 18,212 | ||||||||||||||||||||
Transportation | 1,363 | 2,535 | 3,898 | 1,686 | 2,248 | 3,935 | 2,279 | 2,306 | 4,585 | ||||||||||||||||||||
Lighting | 1,630 | 93 | 1,723 | 1,887 | 55 | 1,941 | 4,583 | 179 | 4,762 | ||||||||||||||||||||
Total Industrial Segment Revenues | $ | 54,497 | $ | 61,167 | $ | 115,664 | $ | 56,260 | $ | 56,909 | $ | 113,168 | $ | 60,728 | $ | 51,596 | $ | 112,324 |
SUB-SEGMENT REVENUES | Years ended December 31 | ||||||||||
(In millions) | 2018 | 2017 | 2016 | ||||||||
Power(a) | |||||||||||
Gas Power Systems | $ | 5,186 | $ | 7,990 | $ | 7,594 | |||||
Steam Power Systems | 1,912 | 2,176 | 1,793 | ||||||||
Power Services | 11,793 | 12,930 | 13,748 | ||||||||
Other | 8,409 | 11,782 | 12,700 | ||||||||
Power revenues | $ | 27,300 | $ | 34,878 | $ | 35,835 | |||||
Renewable Energy | |||||||||||
Onshore Wind | $ | 8,258 | $ | 8,056 | $ | 8,576 | |||||
Offshore Wind | 447 | 296 | 249 | ||||||||
Hydro | 827 | 853 | 927 | ||||||||
Renewable Energy revenues | $ | 9,533 | $ | 9,205 | $ | 9,752 | |||||
Aviation | |||||||||||
Commercial Engines & Services | $ | 22,724 | $ | 19,709 | $ | 19,521 | |||||
Military | 4,103 | 3,991 | 3,585 | ||||||||
Systems & Other | 3,740 | 3,314 | 3,135 | ||||||||
Aviation revenues | $ | 30,566 | $ | 27,013 | $ | 26,240 | |||||
Oil & Gas | |||||||||||
Turbomachinery & Process Solutions (TPS) | $ | 5,999 | $ | 6,298 | $ | 6,525 | |||||
Oilfield Services (OFS) | 11,617 | 5,881 | 788 | ||||||||
Oilfield Equipment (OFE) | 2,641 | 2,661 | 3,541 | ||||||||
Digital Solutions | 2,603 | 2,340 | 2,084 | ||||||||
Oil & Gas revenues | $ | 22,859 | $ | 17,180 | $ | 12,938 | |||||
Healthcare | |||||||||||
Healthcare Systems | $ | 14,886 | $ | 14,460 | $ | 13,975 | |||||
Life Sciences | 4,898 | 4,557 | 4,237 | ||||||||
Healthcare revenues | $ | 19,784 | $ | 19,017 | $ | 18,212 | |||||
Transportation | |||||||||||
Locomotives | $ | 867 | $ | 1,309 | $ | 2,071 | |||||
Services | 2,087 | 1,888 | 1,853 | ||||||||
Mining | 571 | 387 | 334 | ||||||||
Other | 373 | 351 | 328 | ||||||||
Transportation revenues | $ | 3,898 | $ | 3,935 | $ | 4,585 | |||||
Lighting | |||||||||||
Current | $ | 980 | $ | 1,042 | $ | 1,044 | |||||
GE Lighting | 743 | 899 | 1,136 | ||||||||
Appliances | — | — | 2,582 | ||||||||
Lighting revenues | $ | 1,723 | $ | 1,941 | $ | 4,762 | |||||
Total industrial segment revenues | $ | 115,664 | $ | 113,168 | $ | 112,324 | |||||
Capital revenues(b) | 9,551 | 9,070 | 10,905 | ||||||||
Corporate items and eliminations | (3,600 | ) | (3,995 | ) | (3,760 | ) | |||||
Consolidated revenues(b) | $ | 121,615 | $ | 118,243 | $ | 119,469 |
(a) | Upon completion of our announced reorganization, GE Gas Power will comprise Gas Power Systems and Power Services, while Power Portfolio will comprise Steam Power Systems (including services currently reported in Power Services) as well as Power Conversion and GE Hitachi Nuclear, which are reported within Other. |
(b) | Included $9,314 million, $8,886 million and $10,356 million for the years ended December 31, 2018, 2017 and 2016, respectively, of revenues at GE Capital outside of the scope of ASC 606. |
STOCK-BASED COMPENSATION ACTIVITY | Stock Options | RSUs | ||||||||||
Shares (in millions) | Weighted average exercise price | Shares (in millions) | Weighted average grant date fair value | |||||||||
Outstanding at January 1, 2018 | 399 | $ | 21.91 | 17 | $ | 26.94 | ||||||
Granted | 108 | 12.13 | 22 | 13.96 | ||||||||
Exercised | (2 | ) | 11.46 | (6 | ) | 25.81 | ||||||
Forfeited | (13 | ) | 20.09 | (4 | ) | 21.89 | ||||||
Expired | (26 | ) | 24.49 | N/A | N/A | |||||||
Outstanding at December 31, 2018 | 466 | $ | 19.59 | 29 | $ | 18.07 | ||||||
Exercisable at December 31, 2018 | 318 | $ | 21.46 | N/A | N/A | |||||||
Expected to vest | 133 | $ | 15.89 | 27 | $ | 18.08 |
(In millions) | 2018 | 2017 | 2016 | ||||||
Compensation expense (after-tax)(a)(b) | $ | 336 | $ | 241 | $ | 297 | |||
Cash received from stock options exercised | 24 | 528 | 1,037 | ||||||
Intrinsic value of stock options exercised and RSUs vested | 83 | 493 | 860 |
(a) | Unrecognized compensation expense related to unvested equity awards as of December 31, 2018 was $740 million, which will be amortized over approximately 2 years. |
(b) | Income tax benefit recognized in earnings was $40 million, $138 million, and $274 million in 2018, 2017, and 2016, respectively. |
FINANCIAL INFORMATION FOR ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE December 31 (In millions) | 2018 | 2017 | ||||
Assets | ||||||
Current receivables(a) | $ | 184 | $ | 612 | ||
Inventories | 529 | 931 | ||||
Property, plant, and equipment – net | 423 | 931 | ||||
Goodwill | 514 | 1,619 | ||||
Other intangible assets – net | 370 | 403 | ||||
Contract and other deferred assets | 562 | 619 | ||||
Valuation allowance on disposal group classified as held for sale(b) | (1,013 | ) | (1,000 | ) | ||
Other | 60 | 49 | ||||
Assets of businesses held for sale | $ | 1,630 | $ | 4,164 | ||
Liabilities | ||||||
Accounts payable(a) | $ | 344 | $ | 602 | ||
Progress collections and price adjustments accrued | 84 | 179 | ||||
Non-current compensation and benefits | 152 | 162 | ||||
Other liabilities | 128 | 305 | ||||
Liabilities of businesses held for sale | $ | 708 | $ | 1,248 |
(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 $105 million and $366 million at December 31, 2018 and December 31, 2017, respectively, and amounts due to GE Capital associated with the supply chain finance program of $40 million at December 31, 2018. 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) | We adjusted the carrying value to fair value less cost to sell for certain held for sale businesses. |
FINANCIAL INFORMATION FOR DISCONTINUED OPERATIONS (In millions) | 2018 | 2017 | 2016 | ||||||
Operations | |||||||||
Total revenues and other income (loss) | $ | (1,347 | ) | $ | 182 | $ | 2,968 | ||
Earnings (loss) from discontinued operations before income taxes | $ | (1,811 | ) | $ | (731 | ) | $ | (162 | ) |
Benefit (provision) for income taxes(a) | 82 | 295 | 460 | ||||||
Earnings (loss) from discontinued operations, net of taxes | $ | (1,729 | ) | $ | (437 | ) | $ | 298 | |
Disposals | |||||||||
Gain (loss) on disposals before income taxes | $ | 4 | $ | 306 | $ | (750 | ) | ||
Benefit (provision) for income taxes(a) | (1 | ) | (178 | ) | (502 | ) | |||
Gain (loss) on disposals, net of taxes | $ | 3 | $ | 128 | $ | (1,252 | ) | ||
Earnings (loss) from discontinued operations, net of taxes | $ | (1,726 | ) | $ | (309 | ) | $ | (954 | ) |
(a) | GE Capital’s total tax benefit (provision) for discontinued operations and disposals included current tax benefit (provision) of $201 million, $(299) million and $945 million for the years ended December 31, 2018, 2017 and 2016, respectively, including current U.S. Federal tax benefit (provision) of $91 million, $(402) million and $1,224 million and deferred tax benefit (provision) of $(120) million, $416 million and $(988) million for the years ended December 31, 2018, 2017 and 2016, respectively. |
December 31 (In millions) | 2018 | 2017 | ||||
Assets | ||||||
Cash, cash equivalents and restricted cash | $ | 528 | $ | 757 | ||
Investment securities | 195 | 647 | ||||
Deferred income taxes | 872 | 951 | ||||
Financing receivables held for sale | 2,745 | 3,215 | ||||
Other assets | 270 | 342 | ||||
Assets of discontinued operations | $ | 4,610 | $ | 5,912 | ||
Liabilities | ||||||
Accounts payable | $ | 43 | $ | 51 | ||
All other liabilities | 1,833 | 655 | ||||
Liabilities of discontinued operations | $ | 1,875 | $ | 706 |
2018 | 2017 | 2016 | ||||||||||||||||||
(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) | $ | (20,636 | ) | $ | (20,636 | ) | $ | (8,193 | ) | $ | (8,193 | ) | $ | 8,431 | $ | 8,436 | ||||
Preferred stock dividends | (447 | ) | (447 | ) | (436 | ) | (436 | ) | (656 | ) | (656 | ) | ||||||||
Earnings (loss) from continuing operations attributable to common shareowners for per-share calculation(a)(b) | $ | (21,083 | ) | $ | (21,083 | ) | $ | (8,629 | ) | $ | (8,629 | ) | $ | 7,775 | $ | 7,780 | ||||
Earnings (loss) from discontinued operations for per-share calculation(a)(b) | (1,734 | ) | (1,734 | ) | (328 | ) | (328 | ) | (955 | ) | (950 | ) | ||||||||
Net earnings (loss) attributable to GE common shareowners for per-share calculation(a)(b) | $ | (22,809 | ) | $ | (22,809 | ) | $ | (8,944 | ) | $ | (8,944 | ) | $ | 6,824 | $ | 6,829 | ||||
Average equivalent shares | ||||||||||||||||||||
Shares of GE common stock outstanding | 8,691 | 8,691 | 8,687 | 8,687 | 9,025 | 9,025 | ||||||||||||||
Employee compensation-related shares (including stock options) and warrants | — | — | — | — | 105 | — | ||||||||||||||
Total average equivalent shares | 8,691 | 8,691 | 8,687 | 8,687 | 9,130 | 9,025 | ||||||||||||||
Per-share amounts | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | (2.43 | ) | $ | (2.43 | ) | $ | (0.99 | ) | $ | (0.99 | ) | $ | 0.85 | $ | 0.86 | ||||
Earnings (loss) from discontinued operations | (0.20 | ) | (0.20 | ) | (0.04 | ) | (0.04 | ) | (0.10 | ) | (0.11 | ) | ||||||||
Net earnings (loss) | (2.62 | ) | (2.62 | ) | (1.03 | ) | (1.03 | ) | 0.75 | 0.76 |
(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 AOCI(b) | Purchases(c) | Sales | Settlements | Transfers into Level 3 | Transfers out of Level 3 | Balance at December 31 | ||||||||||||||||||
2018 | |||||||||||||||||||||||||||
Debt securities | $ | 4,413 | $ | 2 | $ | (234 | ) | $ | 804 | $ | (65 | ) | $ | (358 | ) | $ | 2 | $ | (262 | ) | $ | 4,301 | |||||
2017 | |||||||||||||||||||||||||||
Debt securities | $ | 4,406 | $ | 54 | 66 | $ | 1,108 | $ | (38 | ) | $ | (641 | ) | $ | 32 | $ | (575 | ) | $ | 4,413 |
(a) | Earnings effects are primarily included in the “GE Capital revenues from services” and “Interest and other financial charges” captions in our consolidated Statement of Earnings (Loss). |
(b) | Includes unrealized net gains and losses of $(233) million and $97 million and realized net gains and losses of $(1) million and $(32) million in other comprehensive income for the years ended December 31, 2018 and December 31, 2017, respectively. |
(c) | Included $615 million and $675 million of U.S. corporate debt securities for the years ended December 31, 2018 and 2017. |
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS (In millions) | Level 1 | Level 2 | Level 3(a) | Netting adjustment(d) | Net balance(b) | ||||||||||
December 31, 2018 | |||||||||||||||
Assets | |||||||||||||||
Investment securities | $ | 126 | $ | 29,408 | $ | 4,301 | $ | — | $ | 33,835 | |||||
Derivatives | — | 2,294 | 8 | (2,001 | ) | 301 | |||||||||
Total | $ | 126 | $ | 31,701 | $ | 4,309 | $ | (2,001 | ) | $ | 34,136 | ||||
Liabilities | |||||||||||||||
Derivatives | $ | — | $ | 1,913 | $ | 6 | $ | (1,234 | ) | $ | 686 | ||||
Other(c) | — | 722 | — | — | 722 | ||||||||||
Total | $ | — | $ | 2,635 | $ | 6 | $ | (1,234 | ) | $ | 1,408 | ||||
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(c) | — | 999 | — | — | 999 | ||||||||||
Total | $ | — | $ | 3,353 | $ | 7 | $ | (2,034 | ) | $ | 1,325 |
(a) | Included debt securities classified within Level 3 of $3,498 million of U.S. corporate and $580 million of Government and agencies securities at December 31, 2018, and $3,629 million of U.S. corporate and $614 million of Government and agencies securities at December 31, 2017. |
(b) | See Notes 3 and 20 for further information on the composition of our investment securities and derivative portfolios. |
(c) | Primarily represents the liabilities associated with certain of our deferred incentive compensation plans. |
(d) | 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. |
(In millions) | Balance at January 1 | Net realized/ unrealized gains (losses) included in earnings(a) | Net realized/ unrealized gains (losses) included in AOCI(b) | Purchases(c) | Sales | Settlements | Transfers into Level 3 | Transfers out of Level 3 | Balance at December 31 | ||||||||||||||||||
2018 | |||||||||||||||||||||||||||
Debt securities | $ | 4,413 | $ | 2 | $ | (234 | ) | $ | 804 | $ | (65 | ) | $ | (358 | ) | $ | 2 | $ | (262 | ) | $ | 4,301 | |||||
2017 | |||||||||||||||||||||||||||
Debt securities | $ | 4,406 | $ | 54 | 66 | $ | 1,108 | $ | (38 | ) | $ | (641 | ) | $ | 32 | $ | (575 | ) | $ | 4,413 |
(a) | Earnings effects are primarily included in the “GE Capital revenues from services” and “Interest and other financial charges” captions in our consolidated Statement of Earnings (Loss). |
(b) | Includes unrealized net gains and losses of $(233) million and $97 million and realized net gains and losses of $(1) million and $(32) million in other comprehensive income for the years ended December 31, 2018 and December 31, 2017, respectively. |
(c) | Included $615 million and $675 million of U.S. corporate debt securities for the years ended December 31, 2018 and 2017. |
ASSETS MEASURED AT FAIR VALUE ON A NONRECURRING | Remeasured during the years ended December 31 | ||||||||||||
BASIS | 2018 | 2017 | |||||||||||
(In millions) | Level 2 | Level 3 | Level 2 | Level 3 | |||||||||
Financing receivables and financing receivables held for sale | $ | — | $ | 47 | $ | 32 | $ | 1,649 | |||||
Equity securities without readily determinable fair value and equity method investments | 479 | 874 | — | 2,076 | |||||||||
Long-lived assets | 152 | 422 | 177 | 591 | |||||||||
Goodwill | — | 2,440 | — | — | |||||||||
Total | $ | 631 | $ | 3,783 | $ | 209 | $ | 4,316 |
December 31 (In millions) | 2018 | 2017 | ||||
Financing receivables and financing receivables held for sale | $ | (23 | ) | $ | (310 | ) |
Equity securities without readily determinable fair value and equity method investments | (535 | ) | (891 | ) | ||
Long-lived assets | (1,152 | ) | (819 | ) | ||
Goodwill | (22,136 | ) | (2,550 | ) | ||
Total | $ | (23,845 | ) | $ | (4,571 | ) |
LEVEL 3 MEASUREMENTS - SIGNIFICANT UNOBSERVABLE INPUTS | ||||||
(Dollars in millions) | Fair value | Valuation technique | Unobservable inputs | Range (weighted-average) | ||
December 31, 2018 | ||||||
Recurring fair value measurements | ||||||
Investment securities(b) | $ | 402 | Income approach | Discount rate(a) | 2.8%-7.6% (6.8)% | |
Nonrecurring fair value measurements | ||||||
Financing receivables | $ | 22 | Income approach | Discount rate(a) | 10% | |
Equity securities without readily determinable fair value and equity method investments | 579 | Income approach, market comparables | Discount rate(a) | 6.5%-35% (8.7%) | ||
Long-lived assets | 159 | Income approach | Discount rate(a) | 2.9%-11.1% (8.2%) | ||
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 | $ | 1,639 | Income approach | Discount rate(a) | 3.2%-16.5% (10.0%) | |
Equity securities without readily determinable fair value and equity method investments | 2,037 | Income approach | Discount rate(a) | 5.0%-50.0% (7.7%) | ||
Long-lived assets | 554 | Income approach | Discount rate(a) | 2.7%-18.0% (7.3%) |
(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 and government Non-U.S. 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. |
2018 | 2017 | ||||||||||||
December 31 (In millions) | Carrying amount (net) | Estimated fair value | Carrying amount (net) | Estimated fair value | |||||||||
GE | |||||||||||||
Assets | |||||||||||||
Notes receivable | $ | 798 | $ | 787 | $ | 700 | $ | 700 | |||||
Liabilities | |||||||||||||
Borrowings(a)(b) | 32,309 | 29,586 | 34,473 | 35,416 | |||||||||
Borrowings (assumed by GE)(a)(c) | 36,262 | 36,298 | 47,114 | 53,502 | |||||||||
GE Capital | |||||||||||||
Assets | |||||||||||||
Loans | 10,820 | 10,807 | 17,363 | 17,331 | |||||||||
Other commercial mortgages | 1,747 | 1,792 | 1,489 | 1,566 | |||||||||
Loans held for sale | 404 | 405 | 3,274 | 3,274 | |||||||||
Liabilities | |||||||||||||
Borrowings(a)(d)(e)(f) | 43,028 | 42,006 | 55,353 | 60,415 | |||||||||
Investment contracts | 2,388 | 2,630 | 2,569 | 2,996 |
(a) | See Note 11 for further information. |
(b) | Included $210 million and $217 million of accrued interest in estimated fair value at December 31, 2018 and December 31, 2017, respectively. |
(c) | Included $568 million and $696 million of accrued interest in estimated fair value at December 31, 2018 and December 31, 2017, respectively. |
(d) | 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, 2018 and December 31, 2017 would have been reduced by $1,300 million and $1,754 million, respectively. |
(e) | Included $583 million and $731 million of accrued interest in estimated fair value at December 31, 2018 and December 31, 2017, respectively. |
(f) | Excluded $22,513 million and $39,844 million of net intercompany payable to GE at December 31, 2018 and December 31, 2017, respectively. |
NOTIONAL AMOUNTS OF LOAN COMMITMENTS December 31 (In millions) | 2018 | 2017 | ||||
Ordinary course of business lending commitments(a) | $ | 767 | $ | 1,105 | ||
Unused revolving credit lines | 34 | 198 |
(a) | Excluded investment commitments of $1,373 million and $677 million at December 31, 2018 and December 31, 2017, respectively. |
FAIR VALUE OF DERIVATIVES | 2018 | 2017 | |||||||||||
December 31 (in millions) | Assets | Liabilities | Assets | Liabilities | |||||||||
Derivatives accounted for as hedges | |||||||||||||
Interest rate contracts | $ | 1,335 | $ | 23 | $ | 1,862 | $ | 148 | |||||
Currency exchange contracts | 175 | 121 | 160 | 70 | |||||||||
Other contracts | — | — | — | — | |||||||||
$ | 1,511 | $ | 145 | $ | 2,021 | $ | 218 | ||||||
Derivatives not accounted for as hedges | |||||||||||||
Interest rate contracts | 28 | 2 | 93 | 8 | |||||||||
Currency exchange contracts | 747 | 1,562 | 1,111 | 2,043 | |||||||||
Other contracts | 16 | 211 | 139 | 91 | |||||||||
$ | 791 | $ | 1,775 | $ | 1,343 | $ | 2,143 | ||||||
Gross derivatives recognized in Statement of Financial Position | |||||||||||||
Gross derivatives | 2,301 | 1,920 | 3,364 | 2,361 | |||||||||
Gross accrued interest | 209 | 6 | 469 | (38 | ) | ||||||||
$ | 2,511 | $ | 1,926 | $ | 3,833 | $ | 2,323 | ||||||
Amounts offset in Statement of Financial Position | |||||||||||||
Netting adjustments(a) | (963 | ) | (971 | ) | (1,457 | ) | (1,456 | ) | |||||
Cash collateral(b) | (1,042 | ) | (267 | ) | (1,529 | ) | (578 | ) | |||||
$ | (2,005 | ) | $ | (1,238 | ) | $ | (2,986 | ) | $ | (2,034 | ) | ||
Net derivatives recognized in Statement of Financial Position | |||||||||||||
Net derivatives | 505 | 687 | 847 | 289 | |||||||||
Amounts not offset in Statement of Financial Position | |||||||||||||
Securities held as collateral(c) | (235 | ) | — | (405 | ) | — | |||||||
Net amount(d) | $ | 270 | $ | 687 | $ | 441 | $ | 289 |
(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, 2018 and December 31, 2017, the cumulative adjustment for non-performance risk was $8 million and $(1) million, respectively. |
(b) | Excluded excess cash collateral received and posted of $3 million and $439 million at December 31, 2018, respectively, and $10 million and $255 million at December 31, 2017, respectively. |
(c) | Excluded excess securities collateral received with a fair value of zero and $16 million at December 31, 2018 and December 31, 2017, respectively. |
(d) | At December 31, 2018, our exposures to counterparties (including accrued interest), net of collateral we held, was $170 million; counterparties' exposures to our derivative liability (including accrued interest), net of collateral posted by us, was $657 million at December 31, 2018. These exposures exclude embedded derivatives. |
(In millions) | Effect on hedging instrument | Effect on underlying | Effect on earnings(a) | ||||||
2018 | |||||||||
Cash flow hedges | $ | (154 | ) | $ | 154 | $ | — | ||
Fair value hedges | (724 | ) | 617 | (107 | ) | ||||
Net investment hedges(b) | 669 | (646 | ) | 23 | |||||
Economic hedges(c) | (2,068 | ) | 1,560 | (508 | ) | ||||
Total | $ | (592 | ) |
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 | ) |
(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 $(12,458) million and $(13,028) million at December 31, 2018 and December 31, 2017, respectively. Total pre-tax reclassifications from CTA to gain (loss) was $(1) million and $125 million in 2018 and 2017, respectively. Total pre-tax reclassifications from CTA to gain (loss) included zero and $125 million recorded in discontinued operations in 2018 and 2017, 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 | Gains (losses) recognized in AOCI | Gains (losses) reclassified from AOCI into earnings | |||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||
Interest rate contracts | $ | (3 | ) | $ | 4 | $ | 6 | $ | (11 | ) | $ | (27 | ) | $ | (79 | ) | |||
Currency exchange contracts | (152 | ) | 195 | (281 | ) | (92 | ) | 176 | (282 | ) | |||||||||
Commodity contracts | — | — | — | — | — | (2 | ) | ||||||||||||
Total(a) | $ | (154 | ) | $ | 199 | $ | (274 | ) | $ | (102 | ) | $ | 149 | $ | (364 | ) |
(a) | Gains (losses) is recorded in “GE Capital revenues from services”, “Interest and other financial charges”, and “Other costs and expenses” in our consolidated Statement of Earnings (Loss) when reclassified. |
FINANCING RECEIVABLES – NET December 31 (In millions) | 2018 | 2017 | ||||
Loans, net of deferred income | $ | 10,834 | $ | 17,404 | ||
Investment in financing leases, net of deferred income | 2,822 | 4,614 | ||||
13,656 | 22,018 | |||||
Allowance for losses | (28 | ) | (51 | ) | ||
Financing receivables – net | $ | 13,628 | $ | 21,967 |
NET INVESTMENT IN FINANCING LEASES | Total financing leases | Direct financing leases | Leveraged leases | |||||||||||||||||
December 31 (In millions) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||
Total minimum lease payments receivable | $ | 2,719 | $ | 4,637 | $ | 1,421 | $ | 2,952 | $ | 1,298 | $ | 1,685 | ||||||||
Less principal and interest on third-party non-recourse debt | (474 | ) | (638 | ) | — | — | (474 | ) | (638 | ) | ||||||||||
Net rentals receivable | 2,245 | 3,999 | 1,421 | 2,952 | 824 | 1,047 | ||||||||||||||
Estimated unguaranteed residual value of leased assets | 1,295 | 1,590 | 571 | 743 | 724 | 847 | ||||||||||||||
Less deferred income | (718 | ) | (975 | ) | (437 | ) | (614 | ) | (282 | ) | (361 | ) | ||||||||
Investment in financing leases, net of deferred income(a) | $ | 2,822 | $ | 4,614 | $ | 1,556 | $ | 3,081 | $ | 1,266 | $ | 1,533 |
(a) | See Note 14 for deferred tax amounts related to financing leases. |
CONTRACTUAL MATURITIES (In millions) | Total loans | Net rentals receivable | ||||
Due in | ||||||
2019 | $ | 5,932 | $ | 446 | ||
2020 | 1,371 | 391 | ||||
2021 | 1,208 | 334 | ||||
2022 | 753 | 247 | ||||
2023 | 796 | 329 | ||||
2024 and later | 773 | 497 | ||||
Total | $ | 10,834 | $ | 2,245 |
(Dollars in millions) | Estimated fair value | Estimated useful life (in years) | ||
Trademarks - Baker Hughes | $ | 2,100 | Indefinite life | |
Customer-related | 1,240 | 24 | ||
Patents and technology | 465 | 4-8 | ||
Trademarks - Other | 45 | 10 | ||
Capitalized software | 64 | 3-7 | ||
In-process research and development | 70 | Indefinite life | ||
Favorable lease contracts | 21 | 10 | ||
Total | $ | 4,005 |
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 |
IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED (In millions) | July 3, 2017 | ||
Cash and cash equivalents | $ | 4,133 | |
Accounts receivable | 2,342 | ||
Inventories | 1,712 | ||
Property, plant, and equipment - net | 4,514 | ||
Other intangible assets - net | 4,005 | ||
All other assets | 1,335 | ||
Accounts payable | (1,245 | ) | |
Borrowings | (3,370 | ) | |
Deferred taxes(a) | (249 | ) | |
All other liabilities | (2,487 | ) | |
Total identifiable net assets(b) | 10,690 | ||
Fair value of existing noncontrolling interest | (35 | ) | |
Goodwill(c) | 14,143 | ||
Total allocated purchase price | $ | 24,798 |
(a) | Includes an increase of approximately $806 million primarily related to fair value adjustments to identifiable assets and liabilities (excluding goodwill) partially offset by a tax asset of approximately $553 million associated with the recognition of foreign tax credits. |
(b) | Through the end of the purchase accounting window in 2018, measurement period adjustments increased goodwill by $787 million primarily due to reductions in the fair value of property, plant and equipment of $362 million, equity method investments of $228 million, intangible assets of $123 million, and an increase to other liabilities of $315 million, partially offset by deferred tax adjustments of $251 million. Certain of these adjustments resulted in a cumulative decrease to depreciation and amortization expense of $33 million. In addition, we reclassified certain legacy Baker Hughes business balances to conform to our presentation. |
(c) | Goodwill represents future economic benefits expected to be recognized from combining the operations of GE Oil & Gas and Baker Hughes, including expected future synergies and operating efficiencies. Goodwill resulting from the acquisition has been allocated to our Oil & Gas reporting units, of which $67 million is deductible for tax purposes. |
(Dollars in millions) | Estimated fair value | Estimated useful life (in years) | ||
Trademarks - Baker Hughes | $ | 2,100 | Indefinite life | |
Customer-related | 1,240 | 24 | ||
Patents and technology | 465 | 4-8 | ||
Trademarks - Other | 45 | 10 | ||
Capitalized software | 64 | 3-7 | ||
In-process research and development | 70 | Indefinite life | ||
Favorable lease contracts | 21 | 10 | ||
Total | $ | 4,005 |
CHANGES IN GOODWILL BALANCES | |||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||
(In millions) | Balance at January 1 | Acquisitions | Impairments | Dispositions, currency exchange and other | Balance at December 31 | Balance at January 1 | Acquisitions | Impairments | Dispositions, currency exchange and other | Balance at December 31 | |||||||||||||||||||||
Power | $ | 25,269 | $ | — | $ | (21,209 | ) | $ | (2,289 | ) | $ | 1,772 | $ | 26,403 | $ | 37 | $ | (1,165 | ) | $ | (6 | ) | $ | 25,269 | |||||||
Renewable Energy | 4,093 | — | (94 | ) | (28 | ) | 3,971 | 2,507 | 1,503 | — | 83 | 4,093 | |||||||||||||||||||
Aviation | 10,008 | — | — | (170 | ) | 9,839 | 9,455 | 25 | — | 529 | 10,008 | ||||||||||||||||||||
Oil & Gas | 23,943 | 68 | — | 444 | 24,455 | 10,363 | 13,364 | — | 216 | 23,943 | |||||||||||||||||||||
Healthcare | 17,306 | — | — | (80 | ) | 17,226 | 17,424 | 60 | — | (178 | ) | 17,306 | |||||||||||||||||||
Transportation | 902 | — | — | (18 | ) | 884 | 899 | — | — | 3 | 902 | ||||||||||||||||||||
Lighting | — | — | — | — | — | 281 | — | — | (281 | ) | — | ||||||||||||||||||||
Capital | 984 | — | — | (80 | ) | 904 | 2,368 | — | (1,386 | ) | 2 | 984 | |||||||||||||||||||
Corporate | 1,463 | — | (833 | ) | (66 | ) | 563 | 739 | 727 | — | (3 | ) | 1,463 | ||||||||||||||||||
Total | $ | 83,968 | $ | 68 | $ | (22,136 | ) | $ | (2,286 | ) | $ | 59,614 | $ | 70,438 | $ | 15,716 | $ | (2,550 | ) | $ | 365 | $ | 83,968 |
OTHER INTANGIBLE ASSETS – NET December 31 (In millions) | 2018 | 2017 | ||||
Intangible assets subject to amortization | $ | 15,937 | $ | 18,056 | ||
Indefinite-lived intangible assets(a) | 2,222 | 2,217 | ||||
Total | $ | 18,159 | $ | 20,273 |
(a) | Indefinite-lived intangible assets principally comprise trademarks and in-process research and development. |
2018 | 2017 | ||||||||||||||||||
INTANGIBLE ASSETS SUBJECT TO AMORTIZATION December 31 (In millions) | Gross carrying amount | Accumulated amortization | Net | Gross carrying amount | Accumulated amortization | Net | |||||||||||||
Customer-related(a) | $ | 10,214 | $ | (3,722 | ) | $ | 6,494 | $ | 10,614 | $ | (3,095 | ) | $ | 7,521 | |||||
Patents and technology | 10,332 | (4,528 | ) | 5,804 | 10,271 | (3,899 | ) | 6,372 | |||||||||||
Capitalized software | 7,437 | (4,617 | ) | 2,820 | 8,064 | (4,974 | ) | 3,089 | |||||||||||
Trademarks | 1,137 | (524 | ) | 613 | 1,280 | (421 | ) | 859 | |||||||||||
Lease valuations | 150 | (84 | ) | 66 | 170 | (80 | ) | 89 | |||||||||||
All other | 242 | (103 | ) | 139 | 218 | (92 | ) | 125 | |||||||||||
Total | $ | 29,513 | $ | (13,578 | ) | $ | 15,937 | $ | 30,617 | $ | (12,561 | ) | $ | 18,056 |
(a) | Balance includes payments made to our customers, primarily within our Aviation business. |
ESTIMATED 5 YEAR CONSOLIDATED AMORTIZATION (In millions) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||
Estimated annual pre-tax amortization | $ | 2,108 | $ | 1,973 | $ | 1,810 | $ | 1,641 | $ | 1,506 |
COMPONENTS OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED DURING 2018 (Dollars in millions) | Gross carrying value | Weighted-average amortizable period (in years) | ||
Customer-related | $ | 23 | 20 | |
Patents and technology | 662 | 19.5 | ||
Capitalized software | 686 | 4.7 | ||
Trademarks | 1 | 10 | ||
All other | 23 | 11 | ||
Total gross carrying value | $ | 1,395 |
(BENEFIT) PROVISION FOR INCOME TAXES (In millions) | 2018 | 2017 | 2016 | ||||||
GE | |||||||||
Current tax expense (benefit) | $ | 2,451 | $ | 2,810 | $ | (140 | ) | ||
Deferred tax expense (benefit) from temporary differences | (1,494 | ) | 881 | 438 | |||||
957 | 3,691 | 298 | |||||||
GE Capital | |||||||||
Current tax expense (benefit) | 596 | (1,008 | ) | (1,138 | ) | ||||
Deferred tax expense (benefit) from temporary differences | (970 | ) | (5,294 | ) | (293 | ) | |||
(374 | ) | (6,302 | ) | (1,431 | ) | ||||
Consolidated | |||||||||
Current tax expense (benefit) | 3,047 | 1,802 | (1,278 | ) | |||||
Deferred tax expense (benefit) from temporary differences | (2,464 | ) | (4,413 | ) | 145 | ||||
Total | $ | 583 | $ | (2,611 | ) | $ | (1,133 | ) |
CONSOLIDATED EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (In millions) | 2018 | 2017 | 2016 | ||||||
U.S. earnings | $ | (10,197 | ) | $ | (18,935 | ) | $ | 535 | |
Non-U.S. earnings | (9,937 | ) | 7,784 | 6,496 | |||||
Total | $ | (20,134 | ) | $ | (11,151 | ) | $ | 7,031 |
CONSOLIDATED (BENEFIT) PROVISION FOR INCOME TAXES (In millions) | 2018 | 2017 | 2016 | ||||||
U.S. Federal | |||||||||
Current | $ | 954 | $ | (823 | ) | $ | (2,646 | ) | |
Deferred | (3,393 | ) | (3,740 | ) | (1,217 | ) | |||
Non - U.S. | |||||||||
Current | 1,859 | 2,286 | 1,730 | ||||||
Deferred | 1,240 | (522 | ) | 1,054 | |||||
Other | (78 | ) | 188 | (54 | ) | ||||
Total | $ | 583 | $ | (2,611 | ) | $ | (1,133 | ) |
INCOME TAXES PAID (RECOVERED) (In millions) | 2018 | 2017 | 2016 | ||||||
GE | $ | 1,803 | $ | 2,700 | $ | 2,612 | |||
GE Capital | 65 | (264 | ) | 4,857 | |||||
Total(a) | $ | 1,868 | $ | 2,436 | $ | 7,469 |
RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO ACTUAL INCOME TAX RATE | Consolidated | GE | GE Capital | |||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||
U.S. federal statutory income tax rate | 21.0 | % | 35.0 | % | 35.0 | % | 21.0 | % | 35.0 | % | 35.0 | % | 21.0 | % | 35.0 | % | 35.0 | % | ||
Increase (reduction) in rate resulting from inclusion of after-tax earnings of GE Capital in before-tax earnings of GE | — | — | — | (0.5 | ) | (44.8 | ) | 5.6 | — | — | — | |||||||||
Tax on global activities including exports | (6.6 | ) | 31.2 | (29.8 | ) | (6.6 | ) | 36.6 | (25.6 | ) | 3.2 | 12.2 | 4.9 | |||||||
U.S. business credits(a) | 2.7 | 4.5 | (5.8 | ) | 0.5 | 1.7 | (1.2 | ) | 120.0 | 3.2 | 15.7 | |||||||||
Goodwill impairments | (22.4 | ) | (7.9 | ) | — | (22.3 | ) | (7.6 | ) | — | — | (3.8 | ) | — | ||||||
Tax Cuts and Jobs Act enactment | (0.2 | ) | (40.5 | ) | — | 0.5 | (92.9 | ) | — | (36.5 | ) | 3.1 | — | |||||||
All other – net(b)(c) | 2.6 | 1.1 | (15.5 | ) | 2.7 | 2.1 | (10.0 | ) | (8.0 | ) | 0.2 | 14.7 | ||||||||
(23.9 | ) | (11.6 | ) | (51.1 | ) | (25.7 | ) | (104.9 | ) | (31.2 | ) | 78.7 | 14.9 | 35.3 | ||||||
Actual income tax rate | (2.9 | )% | 23.4 | % | (16.1 | )% | (4.7 | )% | (69.9 | )% | 3.8 | % | 99.7 | % | 49.9 | % | 70.3 | % |
(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 21.0% federal effect for the year ended December 31, 2018 and 35.0% federal effect for the years ended December 31, 2017 and 2016. |
(c) | For the year ended December 31, 2018, included 2.9% and 2.9% in consolidated and GE, respectively, and in 2016, (9.9)% and (8.9)% in consolidated and GE, respectively, related to deductible stock losses. Included in 2017 is 5.7% and 12.1% in consolidated and GE, respectively, related to the disposition of the Water business. Also included in 2017 is (3.1)% and (6.6)% in consolidated and GE, respectively, related to losses on planned dispositions. |
UNRECOGNIZED TAX BENEFITS December 31 (Dollars in millions) | 2018 | 2017 | ||||
Unrecognized tax benefits | $ | 5,563 | $ | 5,449 | ||
Portion that, if recognized, would reduce tax expense and effective tax rate(a) | 4,265 | 3,626 | ||||
Accrued interest on unrecognized tax benefits | 934 | 810 | ||||
Accrued penalties on unrecognized tax benefits | 182 | 158 | ||||
Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months | 0-1,300 | 0-1,100 | ||||
Portion that, if recognized, would reduce tax expense and effective tax rate(a) | 0-1,200 | 0-900 |
(a) | Some portion of such reduction may be reported as discontinued operations. |
UNRECOGNIZED TAX BENEFITS RECONCILIATION (In millions) | 2018 | 2017 | ||||
Balance at January 1 | $ | 5,449 | $ | 4,692 | ||
Additions for tax positions of the current year | 300 | 260 | ||||
Additions for tax positions of prior years(a) | 945 | 791 | ||||
Reductions for tax positions of prior years | (905 | ) | (113 | ) | ||
Settlements with tax authorities | (64 | ) | (57 | ) | ||
Expiration of the statute of limitations | (162 | ) | (124 | ) | ||
Balance at December 31 | $ | 5,563 | $ | 5,449 |
(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. |
DEFERRED INCOME TAXES December 31 (In millions) | 2018 | 2017 | ||||
Assets | ||||||
GE | $ | 14,777 | $ | 16,013 | ||
GE Capital | 6,214 | 6,176 | ||||
20,991 | 22,189 | |||||
Liabilities | ||||||
GE | (4,286 | ) | (8,197 | ) | ||
GE Capital | (4,278 | ) | (5,177 | ) | ||
Eliminations | 5 | 4 | ||||
(8,559 | ) | (13,370 | ) | |||
Net deferred income tax asset (liability) | $ | 12,432 | $ | 8,819 |
COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY) December 31 (In millions) | 2018 | 2017 | ||||
GE | ||||||
Principal pension plans | $ | 3,883 | $ | 3,911 | ||
Other non-current compensation and benefits | 2,553 | 2,780 | ||||
Provision for expenses | 2,480 | 2,485 | ||||
Retiree insurance plans | 1,006 | 1,152 | ||||
Non-U.S. loss carryforwards(a) | 1,568 | 2,078 | ||||
U.S. credit carryforwards(b) | 74 | 1,932 | ||||
Contract assets | (1,874 | ) | (2,925 | ) | ||
Intangible assets | 1,303 | (2,033 | ) | |||
Depreciation | (720 | ) | (1,022 | ) | ||
Other – net | 218 | (543 | ) | |||
10,491 | 7,815 | |||||
GE Capital | ||||||
Operating leases | (2,690 | ) | (2,689 | ) | ||
Financing leases | (599 | ) | (877 | ) | ||
Energy investments | (144 | ) | (754 | ) | ||
Intangible assets | (16 | ) | (25 | ) | ||
U.S. credit carryforwards(b) | 2,491 | 1,632 | ||||
Insurance company loss reserves | 1,386 | 1,373 | ||||
Non-U.S. loss carryforwards(a) | 1,231 | 1,271 | ||||
Other – net | 277 | 1,068 | ||||
1,936 | 999 | |||||
Eliminations | 5 | 4 | ||||
Net deferred income tax asset (liability) | $ | 12,432 | $ | 8,819 |
(a) | Net of valuation allowances of $5,103 million and $4,251 million for GE and $767 million and $448 million for GE Capital, for 2018 and 2017, respectively. Of the net deferred tax asset as of December 31, 2018 of $2,799 million, $37 million relates to net operating loss carryforwards that expire in various years ending from December 31, 2019 through December 31, 2021; $314 million relates to net operating losses that expire in various years ending from December 31, 2022 through December 31, 2038 and $2,448 million relates to net operating loss carryforwards that may be carried forward indefinitely. |
(b) | Of the net deferred tax asset as of December 31, 2018 of $2,565 million for U.S. credit carryforwards, $1,144 million expires in the year ending December 31, 2027 through 2028, $74 million expires in the years ending December 31, 2030 through 2032 and $1,347 million expires in various years ending from December 31, 2033 through December 31, 2038. |
December 31 (In millions) | 2018 | 2017 | 2016 | ||||||
GE | |||||||||
Purchases and sales of business interests(a) | $ | 1,294 | $ | 1,021 | $ | 3,731 | |||
Licensing and royalty income | 221 | 193 | 175 | ||||||
Associated companies | (111 | ) | 202 | 76 | |||||
Net interest and investment income | 669 | 425 | 263 | ||||||
Other items | 182 | 96 | (17 | ) | |||||
2,255 | 1,937 | 4,227 | |||||||
Eliminations | 4 | 189 | (87 | ) | |||||
Total | $ | 2,259 | $ | 2,126 | $ | 4,140 |
(a) | Included pre-tax gains of $737 million on the sale of Distributed Power, $681 million on the sale of Healthcare Value-Based Care and $267 million on the sale of Industrial Solutions, partially offset by charges to the valuation allowance on businesses classified as held for sale of $554 million in 2018. Included a pre-tax gain of $1,931 million on the sale of our Water business, partially offset by charges to the valuation allowance on businesses classified as held for sale of $1,000 million in 2017. Included a pre-tax gain of $3,106 million on the sale of our Appliances business and $398 million on the sale of GE Asset Management in 2016. See Note 2 for further information. |
December 31 (In millions) | 2018 | 2017 | 2016 | ||||||
GE | |||||||||
Purchases and sales of business interests(a) | $ | 1,294 | $ | 1,021 | $ | 3,731 | |||
Licensing and royalty income | 221 | 193 | 175 | ||||||
Associated companies | (111 | ) | 202 | 76 | |||||
Net interest and investment income | 669 | 425 | 263 | ||||||
Other items | 182 | 96 | (17 | ) | |||||
2,255 | 1,937 | 4,227 | |||||||
Eliminations | 4 | 189 | (87 | ) | |||||
Total | $ | 2,259 | $ | 2,126 | $ | 4,140 |
(a) | Included pre-tax gains of $737 million on the sale of Distributed Power, $681 million on the sale of Healthcare Value-Based Care and $267 million on the sale of Industrial Solutions, partially offset by charges to the valuation allowance on businesses classified as held for sale of $554 million in 2018. Included a pre-tax gain of $1,931 million on the sale of our Water business, partially offset by charges to the valuation allowance on businesses classified as held for sale of $1,000 million in 2017. Included a pre-tax gain of $3,106 million on the sale of our Appliances business and $398 million on the sale of GE Asset Management in 2016. See Note 2 for further information. |
December 31 (In millions) | 2018 | 2017 | ||||
Raw materials and work in process | $ | 10,665 | $ | 10,131 | ||
Finished goods | 8,387 | 8,847 | ||||
Unbilled shipments | 219 | 441 | ||||
Total inventories | $ | 19,271 | $ | 19,419 |
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 | $ | 534 | $ | 536 | ||
After one year through five years | 2,870 | 2,963 | ||||
After five years through ten years | 6,116 | 6,527 | ||||
After ten years | 18,676 | 20,412 |
2018 | 2017 | ||||||||||||||||||||||||
December 31 (In millions) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | |||||||||||||||||
Debt | |||||||||||||||||||||||||
U.S. corporate | $ | 21,306 | $ | 2,257 | $ | (357 | ) | $ | 23,206 | $ | 20,104 | $ | 3,775 | $ | (35 | ) | $ | 23,843 | |||||||
Non-U.S. corporate | 1,906 | 53 | (76 | ) | 1,883 | 5,455 | 86 | (13 | ) | 5,528 | |||||||||||||||
State and municipal | 3,320 | 367 | (54 | ) | 3,633 | 3,775 | 534 | (40 | ) | 4,269 | |||||||||||||||
Mortgage and asset-backed | 3,325 | 51 | (54 | ) | 3,322 | 2,820 | 81 | (23 | ) | 2,878 | |||||||||||||||
Government and agencies | 1,603 | 63 | (20 | ) | 1,645 | 1,927 | 75 | (2 | ) | 2,000 | |||||||||||||||
Equity(a) | 146 | — | — | 146 | 166 | 12 | — | 178 | |||||||||||||||||
Total | $ | 31,605 | $ | 2,792 | $ | (561 | ) | $ | 33,835 | $ | 34,246 | $ | 4,564 | $ | (114 | ) | $ | 38,696 |
(a) | These securities have readily determinable fair values and subsequently to the adoption of ASU 2016-01 on January 1, 2018, changes in fair value are recorded to earnings. Net unrealized gains (losses) recorded to earnings were $(3) million, $29 million and $(2) million for the years ended December 31, 2018, 2017 and 2016, respectively. |
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 | $ | 534 | $ | 536 | ||
After one year through five years | 2,870 | 2,963 | ||||
After five years through ten years | 6,116 | 6,527 | ||||
After ten years | 18,676 | 20,412 |
December 31, 2018 (In millions) | Long-term care insurance contracts | Structured settlement annuities & life insurance contracts | Other contracts | Other adjustments(a) | Total | ||||||||||
Future policy benefit reserves | $ | 16,029 | $ | 9,495 | $ | 169 | $ | 2,247 | $ | 27,940 | |||||
Claim reserves(b) | 3,917 | 230 | 1,178 | — | 5,324 | ||||||||||
Investment contracts(c) | — | 1,239 | 1,149 | — | 2,388 | ||||||||||
Unearned premiums and other | 34 | 205 | 103 | — | 342 | ||||||||||
19,980 | 11,169 | 2,599 | 2,247 | 35,994 | |||||||||||
Eliminations | — | — | (432 | ) | — | (432 | ) | ||||||||
Total | $ | 19,980 | $ | 11,169 | $ | 2,167 | $ | 2,247 | $ | 35,562 |
December 31, 2017 (In millions) | Long-term care insurance contracts | Structured settlement annuities & life insurance contracts | Other contracts | Other adjustments(a) | Total | ||||||||||
Future policy benefit reserves | $ | 16,522 | $ | 9,257 | $ | 191 | $ | 4,582 | $ | 30,552 | |||||
Claim reserves(b) | 3,590 | 274 | 1,230 | — | 5,094 | ||||||||||
Investment contracts(c) | — | 1,348 | 1,221 | — | 2,569 | ||||||||||
Unearned premiums and other | 45 | 211 | 117 | — | 372 | ||||||||||
20,157 | 11,090 | 2,759 | 4,582 | 38,587 | |||||||||||
Eliminations | — | — | (451 | ) | — | (451 | ) | ||||||||
Total | $ | 20,157 | $ | 11,090 | $ | 2,308 | $ | 4,582 | $ | 38,136 |
(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\" in our consolidated Statement of Earnings (Loss). |
(b) | Other contracts included claim reserves of $346 million and $364 million related to short-duration contracts at EIC, net of eliminations, at December 31, 2018 and December 31, 2017, respectively. |
(c) | Investment contracts are contracts without significant mortality or morbidity risks. |
• | Increased discount rate assumptions in 2018 compared to our original estimate. Our revised reinvestment plan incorporates the remaining projected capital contribution of approximately $11,000 million through 2024, of which approximately $1,900 million was received in the first quarter of 2019, and introduction of strategic initiatives for the investment into new higher-yielding asset classes while maintaining an overall A-rated fixed income portfolio. These initiatives are the result of an extensive review in 2018 of our investment management opportunities including the engagement of external investment advisors. Our discount rate assumption for purposes of performing the premium deficiency assessments resulted in a weighted-average rate of approximately 6.04%, compared to approximately 5.67% in 2017. The increased discount rate favorably impacted our reserve margin by $1,900 million; |
• | Lower long-term care insurance morbidity improvement assumptions indicating less long-term improvement (1.25% per year) over shorter durations (between 12 and 20 years based on the average attained age of the underlying books of business) which adversely impacted our reserve margin by $1,200 million; |
• | Higher interest rates leading to higher inflation which increased projected utilization on long-term care insurance policies which adversely impacted our reserve margin by $325 million; |
• | Lower policy terminations on long-term care insurance policies and revisions to assumptions of future mortality primarily for older attained ages, based on experience analysis of internal and industry data, on life insurance products which adversely impacted our reserve margin by $200 million and $300 million, respectively; and |
• | Higher levels of projected long-term care premium rate increases due to larger rate filings by some ceding companies than previously planned which favorably impacted our reserve margin by $200 million. Our 2018 premium deficiency test includes approximately $1,700 million of anticipated premium increases or benefit reductions associated with future in-force rate actions, including actions that are: (a) approved and not implemented, (b) filed but not yet approved and (c) estimated on future filings through 2028. |
December 31 (In millions) | 2018 | 2017 | ||||
Reinsurance recoverables, gross | ||||||
Future policy benefit reserves | $ | 2,605 | $ | 3,928 | ||
Claim reserves | 756 | 715 | ||||
3,361 | 4,643 | |||||
Allowance for losses | (1,090 | ) | (2,185 | ) | ||
Reinsurance recoverables, net | $ | 2,271 | $ | 2,458 |
Consolidated(a) | GE(b) | ||||||||||||
December 31 (In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||
Power | $ | 6,982 | $ | 9,735 | $ | 4,325 | $ | 4,664 | |||||
Renewable Energy | 1,333 | 1,687 | 1,181 | 962 | |||||||||
Aviation | 2,973 | 3,722 | 2,562 | 1,859 | |||||||||
Oil & Gas | 5,643 | 5,953 | 5,645 | 5,832 | |||||||||
Healthcare | 2,888 | 3,487 | 1,721 | 1,814 | |||||||||
Transportation | 375 | 289 | 307 | 184 | |||||||||
Lighting | 85 | 105 | 50 | 36 | |||||||||
Corporate and eliminations | 598 | 304 | 623 | 342 | |||||||||
20,878 | 25,282 | 16,415 | 15,693 | ||||||||||
Less Allowance for losses | (1,004 | ) | (1,073 | ) | (997 | ) | (1,055 | ) | |||||
Total | $ | 19,874 | $ | 24,209 | $ | 15,418 | $ | 14,638 |
(a) | The consolidated total included a DPP receivable of $468 million and $388 million at December 31, 2018 and 2017, respectively, related to the Receivables facility (described below). During the years ended December 31, 2018 and 2017, GE Capital received additional non-cash DPP related to the sale of new current receivables of $5,272 million and $4,292 million, respectively and received cash payments on the DPP of $5,192 million and $4,411 million, respectively. |
(b) | GE current receivables balances at December 31, 2018 and 2017, before allowance for losses, included $11,491 million and $10,452 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. |
(In millions) | 2018 | 2017 | ||||
Retained by GE Capital(a) | $ | 4,455 | $ | 9,982 | ||
Sold to Receivables facilities and others(b) | 7,900 | 5,763 | ||||
Total | $ | 12,355 | $ | 15,745 |
(a) | Of these amounts, approximately 31% and 40% at December 31, 2018 and 2017, respectively, GE provided GE Capital with full or limited recourse (i.e., GE retains all or some risk of default). |
(b) | Other than the DPP held by GE Capital described below, the Company has no substantive risk of loss with respect to these sold receivables. |
December 31, 2018 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Revenues in excess of billings | $ | 5,368 | $ | 5,412 | $ | 703 | $ | — | $ | 590 | $ | — | $ | 12,072 | |||||||
Billings in excess of revenues | (1,693 | ) | (3,297 | ) | (187 | ) | — | (56 | ) | — | (5,232 | ) | |||||||||
Long-term service agreements(b) | $ | 3,675 | $ | 2,115 | $ | 516 | $ | — | $ | 534 | $ | — | $ | 6,840 | |||||||
Equipment contract revenues(c) | 3,899 | 352 | 1,085 | 287 | 101 | 551 | 6,275 | ||||||||||||||
Total contract assets | 7,574 | 2,468 | 1,600 | 287 | 635 | 551 | 13,115 | ||||||||||||||
Deferred inventory costs(d) | 1,012 | 673 | 179 | 1,258 | 34 | 365 | 3,522 | ||||||||||||||
Nonrecurring engineering costs(e) | 124 | 1,916 | 22 | 22 | 100 | 34 | 2,217 | ||||||||||||||
Customer advances and other | — | 1,146 | — | — | 1 | — | 1,147 | ||||||||||||||
Contract and other deferred assets | $ | 8,709 | $ | 6,204 | $ | 1,800 | $ | 1,567 | $ | 769 | $ | 951 | $ | 20,000 |
December 31, 2017 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Revenues in excess of billings | $ | 6,294 | $ | 4,556 | $ | 721 | $ | 1 | $ | 827 | $ | — | $ | 12,400 | |||||||
Billings in excess of revenues | (2,937 | ) | (1,942 | ) | (204 | ) | — | (414 | ) | — | (5,498 | ) | |||||||||
Long-term service agreements(b) | $ | 3,357 | $ | 2,614 | $ | 517 | $ | 1 | $ | 413 | $ | — | $ | 6,902 | |||||||
Equipment contract revenues(c) | 4,757 | 280 | 1,095 | 295 | 76 | 371 | 6,874 | ||||||||||||||
Total contract assets | 8,115 | 2,893 | 1,612 | 296 | 488 | 371 | 13,775 | ||||||||||||||
Deferred inventory costs(d) | 1,304 | 564 | 358 | 950 | 43 | 359 | 3,579 | ||||||||||||||
Nonrecurring engineering costs(e) | 122 | 1,696 | — | — | 87 | — | 1,905 | ||||||||||||||
Customer advances and other | — | 1,098 | — | — | — | — | 1,098 | ||||||||||||||
Contract and other deferred assets | $ | 9,539 | $ | 6,251 | $ | 1,971 | $ | 1,246 | $ | 619 | $ | 729 | $ | 20,356 |
(a) | Primarily includes our Healthcare segment. |
(b) | On our consolidated Statement of Financial Position, long-term service agreement balances are presented net of related billings in excess of revenues of $5,232 million and $5,498 million at December 31, 2018 and 2017, respectively. |
(c) | Included in this balance are amounts due from customers for the sale of service upgrades, which we collect through higher fixed or usage-based fees from servicing the equipment under long-term service agreements. Amounts due from these arrangements totaled $883 million and $748 million as of December 31, 2018 and 2017, respectively. |
(d) | Represents cost deferral for shipped goods (such as components for wind turbine assemblies within our Renewable Energy segment) and labor and overhead costs on time and material service contracts (primarily originating in Power and Aviation) and other costs for which the criteria for revenue recognition has not yet been met. |
(e) | Includes costs incurred prior to production (such as requisition engineering) for equipment production contracts, primarily within our Aviation segment, which are allocated ratably to each unit produced. |
December 31, 2018 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Progress collections on equipment contracts | $ | 6,690 | $ | 114 | $ | 878 | $ | 423 | $ | 239 | $ | — | $ | 8,344 | |||||||
Other progress collections | 692 | 4,034 | 552 | 3,467 | 68 | 338 | 9,151 | ||||||||||||||
Total progress collections | $ | 7,382 | $ | 4,148 | $ | 1,430 | $ | 3,890 | $ | 307 | $ | 338 | $ | 17,495 | |||||||
Deferred income | 163 | 1,338 | 164 | 241 | 11 | 1,739 | 3,656 | ||||||||||||||
Progress collections and deferred income | $ | 7,545 | $ | 5,486 | $ | 1,594 | $ | 4,131 | $ | 318 | $ | 2,077 | $ | 21,151 |
December 31, 2017 (In millions) | Power | Aviation | Oil & Gas | Renewable Energy | Transportation | Other(a) | Total | ||||||||||||||
GE | |||||||||||||||||||||
Progress collections on equipment contracts | $ | 8,493 | $ | 134 | $ | 1,149 | $ | 591 | $ | 316 | $ | — | $ | 10,683 | |||||||
Other progress collections | 775 | 4,373 | 141 | 2,180 | 71 | 88 | 7,627 | ||||||||||||||
Total progress collections | $ | 9,268 | $ | 4,507 | $ | 1,290 | $ | 2,771 | $ | 387 | $ | 88 | $ | 18,310 | |||||||
Deferred income | 286 | 1,289 | 317 | 245 | 18 | 1,756 | 3,911 | ||||||||||||||
Progress collections and deferred income | $ | 9,554 | $ | 5,795 | $ | 1,608 | $ | 3,016 | $ | 405 | $ | 1,843 | $ | 22,221 |
(a) | Primarily includes our Healthcare segment. |
• | 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) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||||
Service cost for benefits earned | $ | 1,227 | $ | 1,629 | $ | 1,699 | $ | 888 | $ | 1,055 | $ | 1,237 | $ | 339 | $ | 574 | $ | 462 | |||||||||||
Prior service cost (credit) amortization | 134 | 285 | 304 | 143 | 290 | 303 | (9 | ) | (5 | ) | 1 | ||||||||||||||||||
Expected return on plan assets | (4,646 | ) | (4,639 | ) | (4,370 | ) | (3,248 | ) | (3,390 | ) | (3,336 | ) | (1,398 | ) | (1,249 | ) | (1,034 | ) | |||||||||||
Interest cost on benefit obligations | 3,270 | 3,462 | 3,609 | 2,658 | 2,856 | 2,939 | 612 | 606 | 670 | ||||||||||||||||||||
Net actuarial loss amortization | 4,107 | 3,241 | 2,705 | 3,785 | 2,812 | 2,449 | 322 | 429 | 256 | ||||||||||||||||||||
Curtailment loss (gain) | 37 | 43 | 50 | 34 | 64 | 31 | 3 | (21 | ) | 19 | |||||||||||||||||||
Pension cost | $ | 4,129 | $ | 4,021 | $ | 3,997 | $ | 4,260 | $ | 3,687 | $ | 3,623 | $ | (131 | ) | $ | 334 | $ | 374 |
ASSUMPTIONS USED TO MEASURE PENSION | Principal pension plans | Other pension plans (weighted average) | |||||||||||
BENEFIT OBLIGATIONS December 31 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||
Discount rate | 4.34 | % | 3.64 | % | 4.11 | % | 2.81 | % | 2.45 | % | 2.58 | % | |
Compensation increases | 3.60 | 3.55 | 3.80 | 3.16 | 3.12 | 3.48 |
ASSUMPTIONS USED TO MEASURE PENSION COST | Principal pension plans | Other pension plans (weighted average) | |||||||||||
December 31 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||
Discount rate | 3.64 | % | 4.11 | % | 4.38 | % | 2.45 | % | 2.58 | % | 3.33 | % | |
Expected return on assets | 6.75 | 7.50 | 7.50 | 6.67 | 6.75 | 6.36 |
FUNDED STATUS | Principal pension plans | Other pension plans | |||||||||||||
December 31 (In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Projected benefit obligations | $ | 68,500 | $ | 74,985 | $ | 23,256 | $ | 25,303 | |||||||
Fair value of plan assets | 50,009 | 50,361 | 19,379 | 21,224 | |||||||||||
Underfunded | $ | 18,491 | $ | 24,624 | $ | 3,877 | $ | 4,079 |
PROJECTED BENEFIT OBLIGATIONS (PBO) | Principal pension plans | Other pension plans | |||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Balance at January 1 | $ | 74,985 | $ | 71,501 | $ | 25,303 | $ | 22,543 | |||||||
Service cost for benefits earned | 888 | 1,055 | 339 | 574 | |||||||||||
Interest cost on benefit obligations | 2,658 | 2,856 | 612 | 606 | |||||||||||
Participant contributions | 90 | 91 | 37 | 42 | |||||||||||
Plan amendments | — | — | 89 | — | |||||||||||
Actuarial loss (gain) | (6,263 | ) | (a) | 3,300 | (a) | (961 | ) | (181 | ) | ||||||
Benefits paid | (3,729 | ) | (3,818 | ) | (1,113 | ) | (977 | ) | |||||||
Acquisitions (dispositions) / other - net | (129 | ) | — | (4 | ) | 1,321 | |||||||||
Exchange rate adjustments | — | — | (1,046 | ) | 1,375 | ||||||||||
Balance at December 31 | $ | 68,500 | (b) | $ | 74,985 | (b) | $ | 23,256 | $ | 25,303 |
(a) | Principally associated with discount rate changes. |
(b) | The PBO for the GE Supplementary Pension Plan, which is an unfunded plan, was $6,110 million and $6,682 million at year-end 2018 and 2017, respectively. |
Principal pension plans | Other pension plans | ||||||||||||
December 31 (In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||
Global equity | $ | 6,015 | $ | 9,192 | $ | 4,323 | $ | 6,323 | |||||
Debt securities | |||||||||||||
Fixed income and cash investment funds | 2,069 | 1,200 | 6,504 | 6,242 | |||||||||
U.S. corporate(a) | 8,734 | 6,597 | 397 | 393 | |||||||||
Other debt securities(b) | 5,264 | 5,225 | 520 | 599 | |||||||||
Real estate | 2,218 | 2,125 | 175 | 222 | |||||||||
Private equities & other investments | 557 | 581 | 424 | 481 | |||||||||
Total | 24,857 | 24,920 | 12,343 | 14,260 | |||||||||
Investments measured at net asset value (NAV) | |||||||||||||
Global equity | 12,558 | 13,790 | 1,668 | 1,871 | |||||||||
Debt securities | 6,400 | 4,107 | 1,431 | 1,247 | |||||||||
Real estate | 1,261 | 1,258 | 1,754 | 1,598 | |||||||||
Private equities & other investments | 4,933 | 6,286 | 2,183 | 2,248 | |||||||||
Total plan assets at fair value | $ | 50,009 | $ | 50,361 | $ | 19,379 | $ | 21,224 |
(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) | 2018 | 2017 | 2018 | 2017 | |||||||||
Balance at January 1 | $ | 50,361 | $ | 45,893 | $ | 21,224 | $ | 17,091 | |||||
Actual gain (loss) on plan assets | (2,996 | ) | 6,217 | (299 | ) | 1,977 | |||||||
Employer contributions | 6,283 | 1,978 | 522 | 870 | |||||||||
Participant contributions | 90 | 91 | 37 | 42 | |||||||||
Benefits paid | (3,729 | ) | (3,818 | ) | (1,113 | ) | (977 | ) | |||||
Acquisitions (dispositions) / other - net | — | — | (92 | ) | 1,221 | ||||||||
Exchange rate adjustments | — | — | (900 | ) | 1,000 | ||||||||
Balance at December 31 | $ | 50,009 | $ | 50,361 | $ | 19,379 | $ | 21,224 |
ASSET ALLOCATION | Principal pension plans | Other pension plans (weighted average) | ||||||
2018 | 2018 | 2018 | 2018 | |||||
December 31 | Target allocation | Actual allocation | Target allocation | Actual allocation | ||||
Global equity | 33.5 - 53.5% | 37 | % | 33 | % | 32 | % | |
Debt securities (including cash equivalents) | 15.0 - 58.5 | 45 | 35 | 46 | ||||
Real estate | 5.0 - 15.0 | 7 | 11 | 10 | ||||
Private equities & other investments | 6.5 - 16.5 | 11 | 21 | 12 |
Principal pension plans | Other pension plans | ||||||||||||
December 31 (In millions, pre-tax) | 2018 | 2017 | 2018 | 2017 | |||||||||
Prior service cost (credit) | $ | 596 | $ | 784 | $ | 14 | $ | (100 | ) | ||||
Net actuarial loss | 10,430 | 14,326 | 3,918 | 3,712 | |||||||||
Total | $ | 11,026 | $ | 15,110 | $ | 3,932 | $ | 3,612 |
ESTIMATED FUTURE BENEFIT PAYMENTS (In millions) | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 - 2028 | ||||||||||||
Principal pension plans | $ | 3,735 | $ | 3,795 | $ | 3,875 | $ | 3,930 | $ | 3,985 | $ | 20,760 | ||||||
Other pension plans | 1,050 | 1,045 | 1,050 | 1,070 | 1,080 | 5,715 |
ASSUMPTIONS USED TO MEASURE BENEFIT OBLIGATIONS December 31 | 2018 | 2017 | 2016 | |||
Discount rate | 4.12 | % | 3.43 | % | 3.75 | % |
Compensation increases | 3.60 | 3.55 | 3.80 | |||
Initial healthcare trend rate(a) | 6.00 | 6.00 | 6.00 |
(a) | For 2018, ultimately declining to 5% for 2030 and thereafter. |
ASSUMPTIONS USED TO MEASURE BENEFIT COST December 31 | 2018 | 2017 | 2016 | |||
Discount rate(a) | 3.43 | % | 3.75 | % | 3.93 | % |
Expected return on assets | 7.00 | 7.00 | 7.00 |
(a) | Weighted average discount rate of 3.86% was used for determination of cost in 2016. |
FUNDED STATUS December 31 (In millions) | 2018 | 2017 | ||||
Accumulated postretirement benefit obligation | $ | 5,153 | $ | 6,006 | ||
Fair value of plan assets | 362 | 518 | ||||
Underfunded | $ | 4,791 | $ | 5,488 |
ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION (In millions) | 2018 | 2017 | ||||
Balance at January 1 | $ | 6,006 | $ | 6,289 | ||
Service cost for benefits earned | 63 | 94 | ||||
Interest cost on benefit obligations | 196 | 224 | ||||
Participant contributions | 60 | 54 | ||||
Plan amendments | — | (8 | ) | |||
Actuarial gain(a) | (593 | ) | (94 | ) | ||
Benefits paid | (569 | ) | (580 | ) | ||
Acquisitions (dispositions) / other - net | (10 | ) | 27 | |||
Balance at December 31(b) | $ | 5,153 | $ | 6,006 |
(a) | In 2018, gain principally due to increase in discount rate and favorable cost trends. |
(b) | The benefit obligation for retiree health plans was $3,425 million and $4,084 million at December 31, 2018 and 2017, respectively. |
ASSET ALLOCATION | 2018 | 2018 | |
December 31 | Target allocation | Actual allocation | |
Global equity | 54 - 74% | 63 | % |
Debt securities (including cash equivalents) | 16 - 55 | 28 | |
Private equities & other investments | 0 - 12 | 9 |
December 31 (In millions, pre-tax) | 2018 | 2017 | ||||
Prior service credit | $ | (2,584 | ) | $ | (2,814 | ) |
Net actuarial gain | (1,196 | ) | (732 | ) | ||
Total | $ | (3,780 | ) | $ | (3,546 | ) |
ESTIMATED FUTURE BENEFIT PAYMENTS (In millions) | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 - 2028 | ||||||||||||
$ | 520 | $ | 500 | $ | 480 | $ | 465 | $ | 450 | $ | 1,950 |
2018 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME (In millions, pre-tax) | Total postretirement benefit plans | Principal pension plans | Other pension plans | Principal retiree benefit plans | ||||||||
Cost of postretirement benefit plans | $ | 4,050 | $ | 4,260 | $ | (131 | ) | $ | (79 | ) | ||
Changes in other comprehensive income | ||||||||||||
Prior service cost (credit) – current year | 89 | — | 89 | — | ||||||||
Net actuarial loss (gain) – current year | (103 | ) | (111 | ) | 551 | (543 | ) | |||||
Reclassification out of AOCI: | ||||||||||||
Net curtailment gain (loss) | (52 | ) | (45 | ) | (7 | ) | — | |||||
Prior service credit (cost) amortization | 96 | (143 | ) | 9 | 230 | |||||||
Net actuarial gain (loss) amortization | (4,028 | ) | (3,785 | ) | (322 | ) | 79 | |||||
Total changes in other comprehensive income | (3,998 | ) | (4,084 | ) | 320 | (234 | ) | |||||
Cost of postretirement benefit plans and changes in other comprehensive income | $ | 52 | $ | 176 | $ | 189 | $ | (313 | ) |
2017 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME (In millions, pre-tax) | 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, pre-tax) | 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 |
Depreciable lives-new | Original Cost | Net Carrying Value | |||||||||||||
December 31 (Dollars in millions) | (in years) | 2018 | 2017 | 2018 | 2017 | ||||||||||
GE | |||||||||||||||
Land and improvements | 8 | (a) | $ | 1,148 | $ | 1,175 | $ | 1,113 | $ | 1,154 | |||||
Buildings, structures and related equipment | 8-40 | 11,557 | 11,486 | 6,479 | 6,913 | ||||||||||
Machinery and equipment | 4-20 | 27,088 | 26,702 | 11,828 | 12,734 | ||||||||||
Leasehold costs and manufacturing plant under construction | 1-10 | 3,289 | 3,862 | 2,546 | 3,162 | ||||||||||
$ | 43,082 | $ | 43,225 | $ | 21,967 | $ | 23,963 | ||||||||
GE Capital(b) | |||||||||||||||
Land and improvements, buildings, structures and related equipment | 1-40 | (a) | $ | 153 | $ | 171 | $ | 32 | $ | 45 | |||||
Equipment leased to others | |||||||||||||||
Aircraft | 15-20 | 44,944 | 46,296 | 29,352 | 30,067 | ||||||||||
All other | 4-34 | 205 | 718 | 126 | 483 | ||||||||||
$ | 45,302 | $ | 47,185 | $ | 29,510 | $ | 30,595 | ||||||||
Eliminations | (909 | ) | (802 | ) | (728 | ) | (684 | ) | |||||||
Total | $ | 87,475 | $ | 89,608 | $ | 50,749 | $ | 53,874 |
(a) | Depreciable lives exclude land. |
(b) | Included $1,397 million and $1,414 million of original cost of assets leased to GE with accumulated amortization of $241 million and $193 million at December 31, 2018 and 2017, respectively. |
(In millions) | |||
Due in | |||
2019 | $ | 3,054 | |
2020 | 2,800 | ||
2021 | 2,418 | ||
2022 | 2,063 | ||
2023 | 1,599 | ||
2024 and later | 5,921 | ||
Total | $ | 17,855 |
Depreciable lives-new | Original Cost | Net Carrying Value | |||||||||||||
December 31 (Dollars in millions) | (in years) | 2018 | 2017 | 2018 | 2017 | ||||||||||
GE | |||||||||||||||
Land and improvements | 8 | (a) | $ | 1,148 | $ | 1,175 | $ | 1,113 | $ | 1,154 | |||||
Buildings, structures and related equipment | 8-40 | 11,557 | 11,486 | 6,479 | 6,913 | ||||||||||
Machinery and equipment | 4-20 | 27,088 | 26,702 | 11,828 | 12,734 | ||||||||||
Leasehold costs and manufacturing plant under construction | 1-10 | 3,289 | 3,862 | 2,546 | 3,162 | ||||||||||
$ | 43,082 | $ | 43,225 | $ | 21,967 | $ | 23,963 | ||||||||
GE Capital(b) | |||||||||||||||
Land and improvements, buildings, structures and related equipment | 1-40 | (a) | $ | 153 | $ | 171 | $ | 32 | $ | 45 | |||||
Equipment leased to others | |||||||||||||||
Aircraft | 15-20 | 44,944 | 46,296 | 29,352 | 30,067 | ||||||||||
All other | 4-34 | 205 | 718 | 126 | 483 | ||||||||||
$ | 45,302 | $ | 47,185 | $ | 29,510 | $ | 30,595 | ||||||||
Eliminations | (909 | ) | (802 | ) | (728 | ) | (684 | ) | |||||||
Total | $ | 87,475 | $ | 89,608 | $ | 50,749 | $ | 53,874 |
(a) | Depreciable lives exclude land. |
(b) | Included $1,397 million and $1,414 million of original cost of assets leased to GE with accumulated amortization of $241 million and $193 million at December 31, 2018 and 2017, respectively. |
First quarter | Second quarter | Third quarter | Fourth quarter | ||||||||||||||||||||||||
(In millions; per-share amounts in dollars) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Consolidated operations | |||||||||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 440 | $ | 52 | $ | 789 | $ | 1,164 | $ | (22,899 | ) | $ | 1,297 | $ | 952 | $ | (11,053 | ) | |||||||||
Earnings (loss) from discontinued operations | (1,553 | ) | (239 | ) | (121 | ) | (146 | ) | 39 | (106 | ) | (92 | ) | 182 | |||||||||||||
Net earnings (loss) | (1,113 | ) | (187 | ) | 669 | 1,019 | (22,859 | ) | 1,191 | 860 | (10,872 | ) | |||||||||||||||
Less net earnings (loss) attributable to noncontrolling interests | 34 | (104 | ) | (132 | ) | (38 | ) | (90 | ) | (169 | ) | 99 | (53 | ) | |||||||||||||
Net earnings (loss) attributable to the Company | $ | (1,147 | ) | $ | (83 | ) | $ | 800 | $ | 1,057 | $ | (22,769 | ) | $ | 1,360 | $ | 761 | $ | (10,818 | ) | |||||||
Per-share amounts – earnings (loss) from continuing operations | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.04 | $ | 0.01 | $ | 0.08 | $ | 0.12 | $ | (2.63 | ) | $ | 0.16 | $ | 0.08 | $ | (1.29 | ) | |||||||||
Basic earnings (loss) per share | 0.04 | 0.01 | 0.08 | 0.12 | (2.63 | ) | 0.16 | 0.08 | (1.29 | ) | |||||||||||||||||
Per-share amounts – earnings (loss) from discontinued operations | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | (0.18 | ) | (0.03 | ) | (0.01 | ) | (0.02 | ) | — | (0.01 | ) | (0.01 | ) | 0.02 | |||||||||||||
Basic earnings (loss) per share | (0.18 | ) | (0.03 | ) | (0.01 | ) | (0.02 | ) | — | (0.01 | ) | (0.01 | ) | 0.02 | |||||||||||||
Per-share amounts – net earnings (loss) | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | (0.14 | ) | (0.01 | ) | 0.07 | 0.10 | (2.62 | ) | 0.15 | 0.07 | (1.27 | ) | |||||||||||||||
Basic earnings (loss) per share | (0.14 | ) | (0.01 | ) | 0.07 | 0.10 | (2.62 | ) | 0.15 | 0.07 | (1.27 | ) | |||||||||||||||
Dividends declared | 0.12 | 0.24 | 0.12 | 0.24 | 0.12 | 0.24 | 0.01 | 0.12 | |||||||||||||||||||
Selected data | |||||||||||||||||||||||||||
GE | |||||||||||||||||||||||||||
Sales of goods and services | $ | 26,894 | $ | 24,780 | $ | 28,079 | $ | 27,129 | $ | 27,456 | $ | 28,774 | $ | 31,213 | $ | 30,571 | |||||||||||
Gross profit from sales | 5,867 | 4,936 | 6,202 | 5,971 | 5,107 | 5,676 | 5,738 | 5,671 | |||||||||||||||||||
GE Capital | |||||||||||||||||||||||||||
Total revenues | 2,173 | 2,681 | 2,429 | 2,446 | 2,473 | 2,397 | 2,476 | 1,545 | |||||||||||||||||||
Earnings (loss) from continuing operations attributable to the Company | (179 | ) | (13 | ) | (22 | ) | 10 | 58 | 60 | 101 | (6,385 | ) |
Assets(a) | Property, plant and equipment additions(b) | Depreciation and amortization(c) | |||||||||||||||||||||||||||
At December 31 | For the years ended December 31 | For the years ended December 31 | |||||||||||||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||||
Power | $ | 33,809 | $ | 66,552 | $ | 68,165 | $ | 378 | $ | 1,072 | $ | 963 | $ | 1,474 | $ | 1,358 | $ | 1,549 | |||||||||||
Renewable Energy | 10,974 | 10,467 | 7,812 | 285 | 624 | 166 | 309 | 255 | 183 | ||||||||||||||||||||
Aviation | 38,021 | 37,473 | 35,614 | 1,070 | 1,426 | 1,328 | 1,042 | 979 | 811 | ||||||||||||||||||||
Oil & Gas | 54,300 | 59,072 | 24,426 | 624 | 5,469 | 284 | 1,486 | 1,100 | 548 | ||||||||||||||||||||
Healthcare | 28,048 | 28,408 | 28,331 | 378 | 393 | 432 | 832 | 806 | 785 | ||||||||||||||||||||
Transportation | 4,270 | 3,757 | 3,746 | 104 | 128 | 108 | 156 | 136 | 170 | ||||||||||||||||||||
Lighting(d) | 699 | 619 | 1,570 | 17 | 34 | 160 | 1 | 86 | 173 | ||||||||||||||||||||
Capital(e) | 123,939 | 156,716 | 182,970 | 4,569 | 3,680 | 3,769 | 2,163 | 2,343 | 2,514 | ||||||||||||||||||||
Corporate items and eliminations(f) | 15,068 | 6,182 | 6,488 | (65 | ) | (100 | ) | 94 | 760 | 367 | 340 | ||||||||||||||||||
Total | $ | 309,129 | $ | 369,245 | $ | 359,122 | $ | 7,360 | $ | 12,728 | $ | 7,305 | $ | 8,223 | $ | 7,429 | $ | 7,073 |
(a) | Total assets of Power, Renewable Energy, Aviation, Oil & Gas, Healthcare, Transportation and Capital operating segments at December 31, 2018, include investments in and advances to associated companies of $1,140 million, $46 million, $2,013 million, $133 million, $271 million, $59 million and $3,029 million, respectively. Lighting held an insignificant balance as of December 31, 2018. Investments in and advances to associated companies contributed approximately $(1) million, $3 million, $126 million, $(136) million, $16 million, $4 million, $(2) million and $185 million to segment pre-tax income for the year ended December 31, 2018 of Power, Renewable Energy, Aviation, Oil & Gas, Healthcare, Transportation, Lighting and Capital operating segments, respectively. |
(b) | Additions to property, plant and equipment include amounts relating to principal businesses purchased. |
(c) | Includes amortization expense related to intangible assets. |
(d) | Lighting segment included Appliances through its disposition in the second quarter of 2016. |
(e) | Includes Capital discontinued operations. |
(f) | Includes deferred income taxes that are presented as assets for purposes of our consolidating balance sheet presentation. |
PROFIT AND EARNINGS (In millions) | 2018 | 2017 | 2016 | ||||||
Power | $ | (808 | ) | $ | 1,947 | $ | 4,187 | ||
Renewable Energy | 287 | 583 | 631 | ||||||
Aviation | 6,466 | 5,370 | 5,324 | ||||||
Oil & Gas | 429 | 158 | 1,302 | ||||||
Healthcare | 3,698 | 3,488 | 3,210 | ||||||
Transportation | 633 | 641 | 966 | ||||||
Lighting(a) | 70 | 27 | 165 | ||||||
Total industrial segment profit | 10,774 | 12,213 | 15,785 | ||||||
Capital | (489 | ) | (6,765 | ) | (1,251 | ) | |||
Total segment profit | 10,285 | 5,448 | 14,534 | ||||||
Corporate items and eliminations | (2,796 | ) | (4,060 | ) | (2,064 | ) | |||
GE goodwill impairments | (22,136 | ) | (1,165 | ) | — | ||||
GE interest and other financial charges | (2,708 | ) | (2,753 | ) | (2,026 | ) | |||
GE non-operating benefit costs | (2,764 | ) | (2,385 | ) | (2,349 | ) | |||
GE provision for income taxes | (957 | ) | (3,691 | ) | (298 | ) | |||
Earnings (loss) from continuing operations attributable to GE common shareowners | (21,076 | ) | (8,605 | ) | 7,797 | ||||
Earnings (loss) from discontinued operations, net of taxes | (1,726 | ) | (309 | ) | (954 | ) | |||
Less net earnings (loss) attributable to noncontrolling interests, discontinued operations | — | 6 | (1 | ) | |||||
Earnings (loss) from discontinued operations, net of taxes and noncontrolling interests | (1,726 | ) | (315 | ) | (952 | ) | |||
Consolidated net earnings (loss) attributable to GE common shareowners | $ | (22,802 | ) | $ | (8,920 | ) | $ | 6,845 |
(a) | Lighting segment included Appliances through its disposition in the second quarter of 2016. |
Total revenues(a) | Intersegment revenues(b) | External revenues | |||||||||||||||||||||||||||
REVENUES (In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||||
Power | $ | 27,300 | $ | 34,878 | $ | 35,835 | $ | 1,795 | $ | 1,385 | $ | 1,325 | $ | 25,505 | $ | 33,493 | $ | 34,510 | |||||||||||
Renewable Energy | 9,533 | 9,205 | 9,752 | 25 | 70 | 11 | 9,508 | 9,135 | 9,740 | ||||||||||||||||||||
Aviation | 30,566 | 27,013 | 26,240 | 448 | 573 | 718 | 30,119 | 26,440 | 25,522 | ||||||||||||||||||||
Oil & Gas | 22,859 | 17,180 | 12,938 | 363 | 646 | 382 | 22,496 | 16,535 | 12,556 | ||||||||||||||||||||
Healthcare | 19,784 | 19,017 | 18,212 | 20 | 15 | 12 | 19,765 | 19,002 | 18,201 | ||||||||||||||||||||
Transportation | 3,898 | 3,935 | 4,585 | 25 | 10 | — | 3,873 | 3,925 | 4,585 | ||||||||||||||||||||
Lighting(c) | 1,723 | 1,941 | 4,762 | 2 | 28 | 19 | 1,721 | 1,913 | 4,743 | ||||||||||||||||||||
Total industrial segment revenues | 115,664 | 113,168 | 112,324 | 2,678 | 2,725 | 2,467 | 112,986 | 110,443 | 109,857 | ||||||||||||||||||||
Capital | 9,551 | 9,070 | 10,905 | 1,384 | 1,620 | 1,288 | 8,166 | 7,451 | 9,617 | ||||||||||||||||||||
Corporate items and eliminations | (3,600 | ) | (3,995 | ) | (3,760 | ) | (4,062 | ) | (4,345 | ) | (3,755 | ) | 463 | 350 | (5 | ) | |||||||||||||
Total | $ | 121,615 | $ | 118,243 | $ | 119,469 | $ | — | $ | — | $ | — | $ | 121,615 | $ | 118,243 | $ | 119,469 |
(a) | Revenues of GE businesses include income from sales of goods and services to customers. |
(b) | Sales from one component to another generally are priced at equivalent commercial selling prices. |
(c) | Lighting segment included Appliances through its disposition in the second quarter of 2016 |
CHANGES TO REDEEMABLE NONCONTROLLING INTERESTS (In millions) | 2018 | 2017 | 2016 | ||||||
Balance at January 1 | $ | 3,391 | $ | 3,017 | $ | 2,962 | |||
Net earnings (loss) | (291 | ) | (320 | ) | (243 | ) | |||
Dividends | (19 | ) | (62 | ) | (17 | ) | |||
Redemption value adjustment | 408 | 419 | 267 | ||||||
Other(a)(b)(c) | (3,106 | ) | 337 | 49 | |||||
Balance at December 31 | $ | 382 | $ | 3,391 | $ | 3,017 |
(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) | In 2018, included $(3,105) million to acquire Alstom’s interest in joint ventures described above. |
• | GE Capital dividends to GE, |
• | GE Capital working capital services to GE, including trade receivables and supply chain finance programs, |
• | 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) | 2018 | 2017 | 2016 | ||||||
Cash from (used for) operating activities-continuing operations | |||||||||
Combined | $ | 3,839 | $ | 13,408 | $ | 29,753 | |||
GE current receivables sold to GE Capital(a) | 198 | (2,611 | ) | 697 | |||||
GE long-term receivables sold to GE Capital | 1,079 | (250 | ) | (1,569 | ) | ||||
GE Capital common dividends to GE | — | (4,016 | ) | (20,095 | ) | ||||
Other reclassifications and eliminations(b) | (455 | ) | 470 | (1,282 | ) | ||||
Total cash from (used for) operating activities-continuing operations | $ | 4,662 | $ | 7,000 | $ | 7,503 | |||
Cash from (used for) investing activities-continuing operations | |||||||||
Combined | $ | 14,054 | $ | (49 | ) | $ | 58,087 | ||
GE current receivables sold to GE Capital(a) | (1,149 | ) | 2,538 | (170 | ) | ||||
GE long-term receivables sold to GE Capital | (1,079 | ) | 250 | 1,569 | |||||
GE Capital long-term loans to GE | 5,999 | 7,271 | — | ||||||
GE Capital short-term loans to GE | 480 | (1,329 | ) | 1,329 | |||||
Other reclassifications and eliminations(b) | (252 | ) | (335 | ) | 1,751 | ||||
Total cash from (used for) investing activities-continuing operations | $ | 18,052 | $ | 8,348 | $ | 62,566 | |||
Cash from (used for) financing activities-continuing operations | |||||||||
Combined | $ | (26,212 | ) | $ | (19,065 | ) | $ | (109,024 | ) |
GE current receivables sold to GE Capital | 952 | 72 | (527 | ) | |||||
GE Capital common dividends to GE | — | 4,016 | 20,095 | ||||||
GE Capital long-term loans to GE | (5,999 | ) | (7,271 | ) | — | ||||
GE Capital short-term loans to GE | (480 | ) | 1,329 | (1,329 | ) | ||||
Other reclassifications and eliminations(b) | 706 | (135 | ) | (468 | ) | ||||
Total cash from (used for) financing activities-continuing operations | $ | (31,033 | ) | $ | (21,055 | ) | $ | (91,253 | ) |
(a) | Excludes $5,192 million, $4,411 million and zero related to cash payments received on the Receivable facility DPP in the years ended December 31, 2018, 2017 and 2016, respectively, which are reflected as Cash from investing activities in the GE Capital and the consolidated GE Company columns of our Statement of Cash Flows. Sales of current receivables from GE to GE Capital are classified as Cash from operating activities in the GE column of our Statement of Cash flows. See Note 1 and Note 4. |
(b) | Includes eliminations of other cash flows activities, including financing of supply chain finance programs of $(318) million, $122 million and $(586) million in the years ended December 31, 2018, 2017 and 2016, respectively, and various investments, loans and allocations of GE corporate overhead costs. |
DISAGGREGATED EQUIPMENT | Years ended December 31 | ||||||||||||||||||||||||||||
AND SERVICES REVENUES(a) | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||
(In millions) | Equipment Revenues | Services Revenues | Total Revenues | Equipment Revenues | Services Revenues | Total Revenues | Equipment Revenues | Services Revenues | Total Revenues | ||||||||||||||||||||
Power | $ | 12,296 | $ | 15,004 | $ | 27,300 | $ | 17,477 | $ | 17,401 | $ | 34,878 | $ | 17,359 | $ | 18,476 | $ | 35,835 | |||||||||||
Renewable Energy | 7,036 | 2,497 | 9,533 | 7,036 | 2,169 | 9,205 | 8,861 | 891 | 9,752 | ||||||||||||||||||||
Aviation | 11,499 | 19,067 | 30,566 | 10,215 | 16,797 | 27,013 | 11,357 | 14,883 | 26,240 | ||||||||||||||||||||
Oil & Gas | 9,251 | 13,608 | 22,859 | 7,188 | 9,992 | 17,180 | 6,083 | 6,855 | 12,938 | ||||||||||||||||||||
Healthcare | 11,422 | 8,363 | 19,784 | 10,771 | 8,246 | 19,017 | 10,206 | 8,006 | 18,212 | ||||||||||||||||||||
Transportation | 1,363 | 2,535 | 3,898 | 1,686 | 2,248 | 3,935 | 2,279 | 2,306 | 4,585 | ||||||||||||||||||||
Lighting | 1,630 | 93 | 1,723 | 1,887 | 55 | 1,941 | 4,583 | 179 | 4,762 | ||||||||||||||||||||
Total Industrial Segment Revenues | $ | 54,497 | $ | 61,167 | $ | 115,664 | $ | 56,260 | $ | 56,909 | $ | 113,168 | $ | 60,728 | $ | 51,596 | $ | 112,324 |
SUB-SEGMENT REVENUES | Years ended December 31 | ||||||||||
(In millions) | 2018 | 2017 | 2016 | ||||||||
Power(a) | |||||||||||
Gas Power Systems | $ | 5,186 | $ | 7,990 | $ | 7,594 | |||||
Steam Power Systems | 1,912 | 2,176 | 1,793 | ||||||||
Power Services | 11,793 | 12,930 | 13,748 | ||||||||
Other | 8,409 | 11,782 | 12,700 | ||||||||
Power revenues | $ | 27,300 | $ | 34,878 | $ | 35,835 | |||||
Renewable Energy | |||||||||||
Onshore Wind | $ | 8,258 | $ | 8,056 | $ | 8,576 | |||||
Offshore Wind | 447 | 296 | 249 | ||||||||
Hydro | 827 | 853 | 927 | ||||||||
Renewable Energy revenues | $ | 9,533 | $ | 9,205 | $ | 9,752 | |||||
Aviation | |||||||||||
Commercial Engines & Services | $ | 22,724 | $ | 19,709 | $ | 19,521 | |||||
Military | 4,103 | 3,991 | 3,585 | ||||||||
Systems & Other | 3,740 | 3,314 | 3,135 | ||||||||
Aviation revenues | $ | 30,566 | $ | 27,013 | $ | 26,240 | |||||
Oil & Gas | |||||||||||
Turbomachinery & Process Solutions (TPS) | $ | 5,999 | $ | 6,298 | $ | 6,525 | |||||
Oilfield Services (OFS) | 11,617 | 5,881 | 788 | ||||||||
Oilfield Equipment (OFE) | 2,641 | 2,661 | 3,541 | ||||||||
Digital Solutions | 2,603 | 2,340 | 2,084 | ||||||||
Oil & Gas revenues | $ | 22,859 | $ | 17,180 | $ | 12,938 | |||||
Healthcare | |||||||||||
Healthcare Systems | $ | 14,886 | $ | 14,460 | $ | 13,975 | |||||
Life Sciences | 4,898 | 4,557 | 4,237 | ||||||||
Healthcare revenues | $ | 19,784 | $ | 19,017 | $ | 18,212 | |||||
Transportation | |||||||||||
Locomotives | $ | 867 | $ | 1,309 | $ | 2,071 | |||||
Services | 2,087 | 1,888 | 1,853 | ||||||||
Mining | 571 | 387 | 334 | ||||||||
Other | 373 | 351 | 328 | ||||||||
Transportation revenues | $ | 3,898 | $ | 3,935 | $ | 4,585 | |||||
Lighting | |||||||||||
Current | $ | 980 | $ | 1,042 | $ | 1,044 | |||||
GE Lighting | 743 | 899 | 1,136 | ||||||||
Appliances | — | — | 2,582 | ||||||||
Lighting revenues | $ | 1,723 | $ | 1,941 | $ | 4,762 | |||||
Total industrial segment revenues | $ | 115,664 | $ | 113,168 | $ | 112,324 | |||||
Capital revenues(b) | 9,551 | 9,070 | 10,905 | ||||||||
Corporate items and eliminations | (3,600 | ) | (3,995 | ) | (3,760 | ) | |||||
Consolidated revenues(b) | $ | 121,615 | $ | 118,243 | $ | 119,469 |
(a) | Upon completion of our announced reorganization, GE Gas Power will comprise Gas Power Systems and Power Services, while Power Portfolio will comprise Steam Power Systems (including services currently reported in Power Services) as well as Power Conversion and GE Hitachi Nuclear, which are reported within Other. |
(b) | Included $9,314 million, $8,886 million and $10,356 million for the years ended December 31, 2018, 2017 and 2016, respectively, of revenues at GE Capital outside of the scope of ASC 606. |
• | Equipment - total remaining performance obligation of $51,873 million of which 51%, 72% and 95% is expected to be satisfied within 1, 2 and 5 years, respectively, and the remaining thereafter. |
• | Service - total remaining performance obligation of $201,292 million of which 18%, 53%, 76% and 87% is expected to be recognized within 1, 5, 10 and 15 years, respectively, and the remaining thereafter. |
• | Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations. |
Consolidated(a) | GE(b) | ||||||||||||
December 31 (In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||
Power | $ | 6,982 | $ | 9,735 | $ | 4,325 | $ | 4,664 | |||||
Renewable Energy | 1,333 | 1,687 | 1,181 | 962 | |||||||||
Aviation | 2,973 | 3,722 | 2,562 | 1,859 | |||||||||
Oil & Gas | 5,643 | 5,953 | 5,645 | 5,832 | |||||||||
Healthcare | 2,888 | 3,487 | 1,721 | 1,814 | |||||||||
Transportation | 375 | 289 | 307 | 184 | |||||||||
Lighting | 85 | 105 | 50 | 36 | |||||||||
Corporate and eliminations | 598 | 304 | 623 | 342 | |||||||||
20,878 | 25,282 | 16,415 | 15,693 | ||||||||||
Less Allowance for losses | (1,004 | ) | (1,073 | ) | (997 | ) | (1,055 | ) | |||||
Total | $ | 19,874 | $ | 24,209 | $ | 15,418 | $ | 14,638 |
(a) | The consolidated total included a DPP receivable of $468 million and $388 million at December 31, 2018 and 2017, respectively, related to the Receivables facility (described below). During the years ended December 31, 2018 and 2017, GE Capital received additional non-cash DPP related to the sale of new current receivables of $5,272 million and $4,292 million, respectively and received cash payments on the DPP of $5,192 million and $4,411 million, respectively. |
(b) | GE current receivables balances at December 31, 2018 and 2017, before allowance for losses, included $11,491 million and $10,452 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. |
(In millions) | 2018 | 2017 | ||||
Retained by GE Capital(a) | $ | 4,455 | $ | 9,982 | ||
Sold to Receivables facilities and others(b) | 7,900 | 5,763 | ||||
Total | $ | 12,355 | $ | 15,745 |
(a) | Of these amounts, approximately 31% and 40% at December 31, 2018 and 2017, respectively, GE provided GE Capital with full or limited recourse (i.e., GE retains all or some risk of default). |
(b) | Other than the DPP held by GE Capital described below, the Company has no substantive risk of loss with respect to these sold receivables. |
FINANCING RECEIVABLES – NET December 31 (In millions) | 2018 | 2017 | ||||
Loans, net of deferred income | $ | 10,834 | $ | 17,404 | ||
Investment in financing leases, net of deferred income | 2,822 | 4,614 | ||||
13,656 | 22,018 | |||||
Allowance for losses | (28 | ) | (51 | ) | ||
Financing receivables – net | $ | 13,628 | $ | 21,967 |
COMPONENTS OF FINITE-LIVED INTANGIBLE ASSETS ACQUIRED DURING 2018 (Dollars in millions) | Gross carrying value | Weighted-average amortizable period (in years) | ||
Customer-related | $ | 23 | 20 | |
Patents and technology | 662 | 19.5 | ||
Capitalized software | 686 | 4.7 | ||
Trademarks | 1 | 10 | ||
All other | 23 | 11 | ||
Total gross carrying value | $ | 1,395 |
ASSET ALLOCATION | Principal pension plans | Other pension plans (weighted average) | ||||||
2018 | 2018 | 2018 | 2018 | |||||
December 31 | Target allocation | Actual allocation | Target allocation | Actual allocation | ||||
Global equity | 33.5 - 53.5% | 37 | % | 33 | % | 32 | % | |
Debt securities (including cash equivalents) | 15.0 - 58.5 | 45 | 35 | 46 | ||||
Real estate | 5.0 - 15.0 | 7 | 11 | 10 | ||||
Private equities & other investments | 6.5 - 16.5 | 11 | 21 | 12 |
ASSET ALLOCATION | 2018 | 2018 | |
December 31 | Target allocation | Actual allocation | |
Global equity | 54 - 74% | 63 | % |
Debt securities (including cash equivalents) | 16 - 55 | 28 | |
Private equities & other investments | 0 - 12 | 9 |
Principal pension plans | Other pension plans | ||||||||||||
December 31 (In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||
Global equity | $ | 6,015 | $ | 9,192 | $ | 4,323 | $ | 6,323 | |||||
Debt securities | |||||||||||||
Fixed income and cash investment funds | 2,069 | 1,200 | 6,504 | 6,242 | |||||||||
U.S. corporate(a) | 8,734 | 6,597 | 397 | 393 | |||||||||
Other debt securities(b) | 5,264 | 5,225 | 520 | 599 | |||||||||
Real estate | 2,218 | 2,125 | 175 | 222 | |||||||||
Private equities & other investments | 557 | 581 | 424 | 481 | |||||||||
Total | 24,857 | 24,920 | 12,343 | 14,260 | |||||||||
Investments measured at net asset value (NAV) | |||||||||||||
Global equity | 12,558 | 13,790 | 1,668 | 1,871 | |||||||||
Debt securities | 6,400 | 4,107 | 1,431 | 1,247 | |||||||||
Real estate | 1,261 | 1,258 | 1,754 | 1,598 | |||||||||
Private equities & other investments | 4,933 | 6,286 | 2,183 | 2,248 | |||||||||
Total plan assets at fair value | $ | 50,009 | $ | 50,361 | $ | 19,379 | $ | 21,224 |
(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. |
2018 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME (In millions, pre-tax) | Total postretirement benefit plans | Principal pension plans | Other pension plans | Principal retiree benefit plans | ||||||||
Cost of postretirement benefit plans | $ | 4,050 | $ | 4,260 | $ | (131 | ) | $ | (79 | ) | ||
Changes in other comprehensive income | ||||||||||||
Prior service cost (credit) – current year | 89 | — | 89 | — | ||||||||
Net actuarial loss (gain) – current year | (103 | ) | (111 | ) | 551 | (543 | ) | |||||
Reclassification out of AOCI: | ||||||||||||
Net curtailment gain (loss) | (52 | ) | (45 | ) | (7 | ) | — | |||||
Prior service credit (cost) amortization | 96 | (143 | ) | 9 | 230 | |||||||
Net actuarial gain (loss) amortization | (4,028 | ) | (3,785 | ) | (322 | ) | 79 | |||||
Total changes in other comprehensive income | (3,998 | ) | (4,084 | ) | 320 | (234 | ) | |||||
Cost of postretirement benefit plans and changes in other comprehensive income | $ | 52 | $ | 176 | $ | 189 | $ | (313 | ) |
2017 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME (In millions, pre-tax) | 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, pre-tax) | 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 |
ASSUMPTIONS USED TO MEASURE PENSION | Principal pension plans | Other pension plans (weighted average) | |||||||||||
BENEFIT OBLIGATIONS December 31 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||
Discount rate | 4.34 | % | 3.64 | % | 4.11 | % | 2.81 | % | 2.45 | % | 2.58 | % | |
Compensation increases | 3.60 | 3.55 | 3.80 | 3.16 | 3.12 | 3.48 |
ASSUMPTIONS USED TO MEASURE PENSION COST | Principal pension plans | Other pension plans (weighted average) | |||||||||||
December 31 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||
Discount rate | 3.64 | % | 4.11 | % | 4.38 | % | 2.45 | % | 2.58 | % | 3.33 | % | |
Expected return on assets | 6.75 | 7.50 | 7.50 | 6.67 | 6.75 | 6.36 |
ASSUMPTIONS USED TO MEASURE BENEFIT OBLIGATIONS December 31 | 2018 | 2017 | 2016 | |||
Discount rate | 4.12 | % | 3.43 | % | 3.75 | % |
Compensation increases | 3.60 | 3.55 | 3.80 | |||
Initial healthcare trend rate(a) | 6.00 | 6.00 | 6.00 |
(a) | For 2018, ultimately declining to 5% for 2030 and thereafter. |
ASSUMPTIONS USED TO MEASURE BENEFIT COST December 31 | 2018 | 2017 | 2016 | |||
Discount rate(a) | 3.43 | % | 3.75 | % | 3.93 | % |
Expected return on assets | 7.00 | 7.00 | 7.00 |
(a) | Weighted average discount rate of 3.86% was used for determination of cost in 2016 |
2018 | 2017 | ||||||||||||||||||||||||
December 31 (In millions) | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | |||||||||||||||||
Debt | |||||||||||||||||||||||||
U.S. corporate | $ | 21,306 | $ | 2,257 | $ | (357 | ) | $ | 23,206 | $ | 20,104 | $ | 3,775 | $ | (35 | ) | $ | 23,843 | |||||||
Non-U.S. corporate | 1,906 | 53 | (76 | ) | 1,883 | 5,455 | 86 | (13 | ) | 5,528 | |||||||||||||||
State and municipal | 3,320 | 367 | (54 | ) | 3,633 | 3,775 | 534 | (40 | ) | 4,269 | |||||||||||||||
Mortgage and asset-backed | 3,325 | 51 | (54 | ) | 3,322 | 2,820 | 81 | (23 | ) | 2,878 | |||||||||||||||
Government and agencies | 1,603 | 63 | (20 | ) | 1,645 | 1,927 | 75 | (2 | ) | 2,000 | |||||||||||||||
Equity(a) | 146 | — | — | 146 | 166 | 12 | — | 178 | |||||||||||||||||
Total | $ | 31,605 | $ | 2,792 | $ | (561 | ) | $ | 33,835 | $ | 34,246 | $ | 4,564 | $ | (114 | ) | $ | 38,696 |
(a) | These securities have readily determinable fair values and subsequently to the adoption of ASU 2016-01 on January 1, 2018, changes in fair value are recorded to earnings. Net unrealized gains (losses) recorded to earnings were $(3) million, $29 million and $(2) million for the years ended December 31, 2018, 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 | Gains (losses) recognized in AOCI | Gains (losses) reclassified from AOCI into earnings | |||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||
Interest rate contracts | $ | (3 | ) | $ | 4 | $ | 6 | $ | (11 | ) | $ | (27 | ) | $ | (79 | ) | |||
Currency exchange contracts | (152 | ) | 195 | (281 | ) | (92 | ) | 176 | (282 | ) | |||||||||
Commodity contracts | — | — | — | — | — | (2 | ) | ||||||||||||
Total(a) | $ | (154 | ) | $ | 199 | $ | (274 | ) | $ | (102 | ) | $ | 149 | $ | (364 | ) |
(a) | Gains (losses) is recorded in “GE Capital revenues from services”, “Interest and other financial charges”, and “Other costs and expenses” in our consolidated Statement of Earnings (Loss) when reclassified. |
For the years ended December 31 (In millions) | 2018 | 2017 | 2016 | ||||||
All other operating activities | |||||||||
Other gains on investing activities | $ | (510 | ) | $ | (138 | ) | $ | (90 | ) |
Restructuring and other charges(a) | 990 | 1,951 | 1,668 | ||||||
Increase (decrease) in equipment project accruals | (951 | ) | (186 | ) | (595 | ) | |||
Other(b) | 596 | (406 | ) | (1,834 | ) | ||||
$ | 125 | $ | 1,221 | $ | (851 | ) | |||
All other investing activities | |||||||||
Derivative settlements (net)(c) | $ | (861 | ) | $ | (1,142 | ) | $ | — | |
Investments in intangible assets (net) | (496 | ) | (321 | ) | (499 | ) | |||
Investments in associated companies (net) | 127 | (226 | ) | (420 | ) | ||||
Other investments (net) | (50 | ) | (281 | ) | (160 | ) | |||
Other | 90 | (90 | ) | (270 | ) | ||||
$ | (1,190 | ) | $ | (2,061 | ) | $ | (1,349 | ) | |
All other financing activities | |||||||||
Proceeds from BHGE public share offering | $ | 2,273 | $ | — | $ | — | |||
Acquisition of noncontrolling interests(d) | (3,732 | ) | (499 | ) | (102 | ) | |||
Dividends paid to noncontrolling interests | (366 | ) | (263 | ) | (49 | ) | |||
Other | 102 | 234 | (122 | ) | |||||
$ | (1,723 | ) | $ | (528 | ) | $ | (273 | ) | |
Net dispositions (purchases) of GE shares for treasury | |||||||||
Open market purchases under share repurchase program(e) | $ | (245 | ) | $ | (3,506 | ) | $ | (22,581 | ) |
Other purchases | (23 | ) | (67 | ) | (399 | ) | |||
Dispositions | 250 | 1,021 | 1,550 | ||||||
$ | (17 | ) | $ | (2,550 | ) | $ | (21,429 | ) |
(a) | Reflected the effects of restructuring and other charges of $2,941 million, $3,947 million and $3,350 million and restructuring and other cash expenditures of $(1,951) million, $(1,996) million and $(1,682) million for the years ended December 31, 2018, 2017 and 2016, respectively. Excludes non-cash adjustments reflected as \"Depreciation and amortization of property, plant and equipment\" or \"Amortization of intangible assets\" in our consolidated Statement of Cash Flows. |
(b) | Included other 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, such as the timing of payments of employee-related liabilities and customer allowances. |
(c) | The classification of settlements of derivative instruments was corrected from operating cash flows to investing cash flows in 2017. Such settlements of $178 million in 2016 were not reclassified and corrected in investing cash flows as they were not considered material. |
(d) | Included the acquisition of Alstom's interest in the grid technology, renewable energy, and global nuclear and French steam power joint ventures for $(3,105) million in the fourth quarter of 2018. See Note 15. |
(e) | Included $(11,370) million paid under ASR agreements in 2016. |
For the years ended December 31 (In millions) | 2018 | 2017 | 2016 | ||||||
All other operating activities | |||||||||
Cash collateral on derivative contracts | $ | (595 | ) | $ | 131 | $ | (428 | ) | |
Increase (decrease) in other liabilities | 240 | (798 | ) | 3,256 | |||||
Other(a) | 483 | 11,783 | 1,204 | ||||||
$ | 127 | $ | 11,115 | $ | 4,032 | ||||
Net decrease (increase) in GE Capital financing receivables | |||||||||
Increase in loans to customers | $ | (30,207 | ) | $ | (45,251 | ) | $ | (65,055 | ) |
Principal collections from customers - loans | 37,237 | 47,471 | 60,375 | ||||||
Investment in equipment for financing leases | (306 | ) | (585 | ) | (690 | ) | |||
Principal collections from customers - financing leases | 802 | 1,011 | 856 | ||||||
Sales of financing receivables | 2,458 | 251 | 3,235 | ||||||
$ | 9,986 | $ | 2,897 | $ | (1,279 | ) | |||
All other investing activities | |||||||||
Purchases of investment securities | $ | (5,775 | ) | $ | (2,867 | ) | $ | (18,588 | ) |
Dispositions and maturities of investment securities | 8,309 | 10,001 | 7,343 | ||||||
Decrease (increase) in other assets - investments | (4,516 | ) | (8,497 | ) | 8,853 | ||||
Other(b) | 2,464 | 4,375 | 3,690 | ||||||
$ | 482 | $ | 3,013 | $ | 1,297 | ||||
Repayments and other reductions (maturities longer than 90 days) | |||||||||
Short-term (91 to 365 days) | $ | (14,251 | ) | $ | (18,591 | ) | $ | (44,519 | ) |
Long-term (longer than one year) | (5,460 | ) | (2,054 | ) | (13,418 | ) | |||
Principal payments - non-recourse, leveraged leases | (125 | ) | (362 | ) | (348 | ) | |||
$ | (19,836 | ) | $ | (21,007 | ) | $ | (58,285 | ) | |
All other financing activities | |||||||||
Proceeds from sales of investment contracts | $ | 5 | $ | 10 | $ | 19 | |||
Redemption of investment contracts | (268 | ) | (344 | ) | (346 | ) | |||
Other | (2,145 | ) | 54 | (2,134 | ) | ||||
$ | (2,408 | ) | $ | (280 | ) | $ | (2,460 | ) |
(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 | Principal pension plans | Other pension plans | |||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||
Balance at January 1 | $ | 50,361 | $ | 45,893 | $ | 21,224 | $ | 17,091 | |||||
Actual gain (loss) on plan assets | (2,996 | ) | 6,217 | (299 | ) | 1,977 | |||||||
Employer contributions | 6,283 | 1,978 | 522 | 870 | |||||||||
Participant contributions | 90 | 91 | 37 | 42 | |||||||||
Benefits paid | (3,729 | ) | (3,818 | ) | (1,113 | ) | (977 | ) | |||||
Acquisitions (dispositions) / other - net | — | — | (92 | ) | 1,221 | ||||||||
Exchange rate adjustments | — | — | (900 | ) | 1,000 | ||||||||
Balance at December 31 | $ | 50,009 | $ | 50,361 | $ | 19,379 | $ | 21,224 |
ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION (In millions) | 2018 | 2017 | ||||
Balance at January 1 | $ | 6,006 | $ | 6,289 | ||
Service cost for benefits earned | 63 | 94 | ||||
Interest cost on benefit obligations | 196 | 224 | ||||
Participant contributions | 60 | 54 | ||||
Plan amendments | — | (8 | ) | |||
Actuarial gain(a) | (593 | ) | (94 | ) | ||
Benefits paid | (569 | ) | (580 | ) | ||
Acquisitions (dispositions) / other - net | (10 | ) | 27 | |||
Balance at December 31(b) | $ | 5,153 | $ | 6,006 |
(a) | In 2018, gain principally due to increase in discount rate and favorable cost trends. |
(b) | The benefit obligation for retiree health plans was $3,425 million and $4,084 million at December 31, 2018 and 2017, respectively. |
PROJECTED BENEFIT OBLIGATIONS (PBO) | Principal pension plans | Other pension plans | |||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Balance at January 1 | $ | 74,985 | $ | 71,501 | $ | 25,303 | $ | 22,543 | |||||||
Service cost for benefits earned | 888 | 1,055 | 339 | 574 | |||||||||||
Interest cost on benefit obligations | 2,658 | 2,856 | 612 | 606 | |||||||||||
Participant contributions | 90 | 91 | 37 | 42 | |||||||||||
Plan amendments | — | — | 89 | — | |||||||||||
Actuarial loss (gain) | (6,263 | ) | (a) | 3,300 | (a) | (961 | ) | (181 | ) | ||||||
Benefits paid | (3,729 | ) | (3,818 | ) | (1,113 | ) | (977 | ) | |||||||
Acquisitions (dispositions) / other - net | (129 | ) | — | (4 | ) | 1,321 | |||||||||
Exchange rate adjustments | — | — | (1,046 | ) | 1,375 | ||||||||||
Balance at December 31 | $ | 68,500 | (b) | $ | 74,985 | (b) | $ | 23,256 | $ | 25,303 |
(a) | Principally associated with discount rate changes. |
(b) | The PBO for the GE Supplementary Pension Plan, which is an unfunded plan, was $6,110 million and $6,682 million at year-end 2018 and 2017, respectively. |
GE funded | Customer funded(c) | Partner funded | Total R&D | |||||||||||||||||||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||
Aviation | $ | 950 | $ | 907 | $ | 1,092 | $ | 564 | $ | 586 | $ | 498 | $ | — | $ | — | $ | — | $ | 1,514 | $ | 1,492 | $ | 1,591 | ||||||||||||
Healthcare | 968 | 908 | 869 | 23 | 26 | 32 | — | — | — | 991 | 934 | 901 | ||||||||||||||||||||||||
Power | 579 | 885 | 949 | 5 | 18 | 4 | 2 | 17 | 45 | 586 | 920 | 998 | ||||||||||||||||||||||||
Oil & Gas | 624 | 450 | 287 | 22 | 9 | — | 55 | 42 | 28 | 700 | 501 | 315 | ||||||||||||||||||||||||
Renewable Energy | 311 | 299 | 213 | 11 | 3 | 7 | — | — | — | 323 | 302 | 220 | ||||||||||||||||||||||||
Corporate(a) | 547 | 1,124 | 1,092 | 48 | 65 | 83 | — | — | — | 595 | 1,189 | 1,175 | ||||||||||||||||||||||||
All Other(b) | 155 | 165 | 235 | — | — | — | — | — | — | 155 | 165 | 235 | ||||||||||||||||||||||||
Total | $ | 4,134 | $ | 4,738 | $ | 4,737 | $ | 671 | $ | 707 | $ | 625 | $ | 57 | $ | 59 | $ | 73 | $ | 4,862 | $ | 5,504 | $ | 5,436 |
(In millions) | 2018 | 2017 | 2016 | ||||||
Compensation expense (after-tax)(a)(b) | $ | 336 | $ | 241 | $ | 297 | |||
Cash received from stock options exercised | 24 | 528 | 1,037 | ||||||
Intrinsic value of stock options exercised and RSUs vested | 83 | 493 | 860 |
(a) | Unrecognized compensation expense related to unvested equity awards as of December 31, 2018 was $740 million, which will be amortized over approximately 2 years. |
(b) | Income tax benefit recognized in earnings was $40 million, $138 million, and $274 million in 2018, 2017, and 2016, respectively. |
(BENEFIT) PROVISION FOR INCOME TAXES (In millions) | 2018 | 2017 | 2016 | ||||||
GE | |||||||||
Current tax expense (benefit) | $ | 2,451 | $ | 2,810 | $ | (140 | ) | ||
Deferred tax expense (benefit) from temporary differences | (1,494 | ) | 881 | 438 | |||||
957 | 3,691 | 298 | |||||||
GE Capital | |||||||||
Current tax expense (benefit) | 596 | (1,008 | ) | (1,138 | ) | ||||
Deferred tax expense (benefit) from temporary differences | (970 | ) | (5,294 | ) | (293 | ) | |||
(374 | ) | (6,302 | ) | (1,431 | ) | ||||
Consolidated | |||||||||
Current tax expense (benefit) | 3,047 | 1,802 | (1,278 | ) | |||||
Deferred tax expense (benefit) from temporary differences | (2,464 | ) | (4,413 | ) | 145 | ||||
Total | $ | 583 | $ | (2,611 | ) | $ | (1,133 | ) |
CONSOLIDATED EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (In millions) | 2018 | 2017 | 2016 | ||||||
U.S. earnings | $ | (10,197 | ) | $ | (18,935 | ) | $ | 535 | |
Non-U.S. earnings | (9,937 | ) | 7,784 | 6,496 | |||||
Total | $ | (20,134 | ) | $ | (11,151 | ) | $ | 7,031 |
CONSOLIDATED (BENEFIT) PROVISION FOR INCOME TAXES (In millions) | 2018 | 2017 | 2016 | ||||||
U.S. Federal | |||||||||
Current | $ | 954 | $ | (823 | ) | $ | (2,646 | ) | |
Deferred | (3,393 | ) | (3,740 | ) | (1,217 | ) | |||
Non - U.S. | |||||||||
Current | 1,859 | 2,286 | 1,730 | ||||||
Deferred | 1,240 | (522 | ) | 1,054 | |||||
Other | (78 | ) | 188 | (54 | ) | ||||
Total | $ | 583 | $ | (2,611 | ) | $ | (1,133 | ) |
COST OF PENSION PLANS | Total | Principal pension plans | Other pension plans | ||||||||||||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||||
Service cost for benefits earned | $ | 1,227 | $ | 1,629 | $ | 1,699 | $ | 888 | $ | 1,055 | $ | 1,237 | $ | 339 | $ | 574 | $ | 462 | |||||||||||
Prior service cost (credit) amortization | 134 | 285 | 304 | 143 | 290 | 303 | (9 | ) | (5 | ) | 1 | ||||||||||||||||||
Expected return on plan assets | (4,646 | ) | (4,639 | ) | (4,370 | ) | (3,248 | ) | (3,390 | ) | (3,336 | ) | (1,398 | ) | (1,249 | ) | (1,034 | ) | |||||||||||
Interest cost on benefit obligations | 3,270 | 3,462 | 3,609 | 2,658 | 2,856 | 2,939 | 612 | 606 | 670 | ||||||||||||||||||||
Net actuarial loss amortization | 4,107 | 3,241 | 2,705 | 3,785 | 2,812 | 2,449 | 322 | 429 | 256 | ||||||||||||||||||||
Curtailment loss (gain) | 37 | 43 | 50 | 34 | 64 | 31 | 3 | (21 | ) | 19 | |||||||||||||||||||
Pension cost | $ | 4,129 | $ | 4,021 | $ | 3,997 | $ | 4,260 | $ | 3,687 | $ | 3,623 | $ | (131 | ) | $ | 334 | $ | 374 |
December 31 (Dollars in millions) | 2018 | 2017 | |||||||||
Short-term borrowings | Amount | Average Rate(a) | Amount | Average Rate(a) | |||||||
GE | |||||||||||
Commercial paper | $ | 3,005 | 1.64 | % | $ | 3,000 | 1.35 | % | |||
Current portion of long-term borrowings | 103 | 6.60 | 1,142 | 4.29 | |||||||
Current portion of long-term borrowings assumed by GE(e) | 4,207 | 3.76 | 8,310 | 2.82 | |||||||
Other | 2,112 | 2,095 | |||||||||
Total GE short-term borrowings | $ | 9,427 | $ | 14,548 | |||||||
GE Capital | |||||||||||
Commercial paper | $ | 5 | $ | 5,013 | 1.45 | ||||||
Current portion of long-term borrowings(b) | 3,984 | 2.00 | 5,781 | 1.26 | |||||||
Intercompany payable to GE(d) | 2,684 | 8,310 | |||||||||
Other | 1,010 | 497 | |||||||||
Total GE Capital short-term borrowings | $ | 7,684 | $ | 19,602 | |||||||
Eliminations(d) | (4,262 | ) | (10,114 | ) | |||||||
Total short-term borrowings | $ | 12,849 | $ | 24,036 | |||||||
Long-term borrowings | Maturities | Amount | Average Rate(a) | Amount | Average Rate(a) | ||||||
GE | |||||||||||
Senior notes(c) | 2020-2047 | $ | 26,628 | 2.58 | % | $ | 27,233 | 2.55 | % | ||
Senior notes assumed by GE(e) | 2020-2055 | 29,218 | 4.30 | 35,491 | 3.59 | ||||||
Subordinated notes assumed by GE(e) | 2021-2037 | 2,836 | 3.64 | 2,913 | 3.28 | ||||||
Other | 460 | 1,003 | |||||||||
Other borrowings assumed by GE(e) | — | 400 | |||||||||
Total GE long-term borrowings | $ | 59,143 | $ | 67,040 | |||||||
GE Capital | |||||||||||
Senior notes | 2020-2039 | $ | 35,105 | 3.49 | $ | 40,754 | 3.11 | ||||
Subordinated notes | 165 | 208 | |||||||||
Intercompany payable to GE(d) | 19,828 | 31,533 | |||||||||
Other(b) | 885 | 1,118 | |||||||||
Total GE Capital long-term borrowings | $ | 55,982 | $ | 73,614 | |||||||
Eliminations(d) | (19,892 | ) | (32,079 | ) | |||||||
Total long-term borrowings | $ | 95,234 | $ | 108,575 | |||||||
Non-recourse borrowings of consolidated securitization entities(f) | 2019-2022 | 1,875 | 3.97 | % | 1,980 | 2.77 | % | ||||
Total borrowings | $ | 109,958 | $ | 134,591 |
(a) | Based on year-end balances and year-end local currency effective interest rates, including the effects from hedging. |
(b) | Included $161 million and $885 million of short- and long-term borrowings, respectively, at December 31, 2018 and $348 million and $1,118 million of short- and long-term borrowings, respectively, at December 31, 2017, of funding secured by aircraft and other collateral. Of this, $216 million and $458 million is non-recourse to GE Capital at December 31, 2018 and 2017, respectively. |
(c) | Included $6,177 million and $6,206 million of BHGE senior notes at December 31, 2018 and 2017, respectively. Total BHGE borrowings were $6,330 million and $7,225 million at December 31, 2018 and 2017, respectively. |
(d) | Included a reduction of $1,523 million and zero for the current portion of intercompany loans from GE Capital to GE at December 31, 2018 and 2017, respectively, and a reduction of $12,226 million and $7,271 million for the long-term portion of intercompany loans from GE Capital to GE at December 31, 2018 and 2017, respectively. These loans bear the right of offset against amounts owed under the assumed debt agreement and can be prepaid by GE at any time in whole or in part, without premium or penalty. |
(e) | At December 31, 2018, the remaining GE Capital borrowings that had been assumed by GE as part of the GE Capital Exit Plan was $36,262 million ($4,207 million short term and $32,054 long term), for which GE has an offsetting Receivable from GE Capital of $22,513 million. The difference of $13,749 million represents the amount of borrowings GE Capital had funded with available cash to GE via an intercompany loan in lieu of GE issuing borrowings externally. |
(f) | Included $225 million and $621 million of current portion of long-term borrowings at December 31, 2018 and 2017, respectively. See Note 21 for further information. |
DEFERRED INCOME TAXES December 31 (In millions) | 2018 | 2017 | ||||
Assets | ||||||
GE | $ | 14,777 | $ | 16,013 | ||
GE Capital | 6,214 | 6,176 | ||||
20,991 | 22,189 | |||||
Liabilities | ||||||
GE | (4,286 | ) | (8,197 | ) | ||
GE Capital | (4,278 | ) | (5,177 | ) | ||
Eliminations | 5 | 4 | ||||
(8,559 | ) | (13,370 | ) | |||
Net deferred income tax asset (liability) | $ | 12,432 | $ | 8,819 |
COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY) December 31 (In millions) | 2018 | 2017 | ||||
GE | ||||||
Principal pension plans | $ | 3,883 | $ | 3,911 | ||
Other non-current compensation and benefits | 2,553 | 2,780 | ||||
Provision for expenses | 2,480 | 2,485 | ||||
Retiree insurance plans | 1,006 | 1,152 | ||||
Non-U.S. loss carryforwards(a) | 1,568 | 2,078 | ||||
U.S. credit carryforwards(b) | 74 | 1,932 | ||||
Contract assets | (1,874 | ) | (2,925 | ) | ||
Intangible assets | 1,303 | (2,033 | ) | |||
Depreciation | (720 | ) | (1,022 | ) | ||
Other – net | 218 | (543 | ) | |||
10,491 | 7,815 | |||||
GE Capital | ||||||
Operating leases | (2,690 | ) | (2,689 | ) | ||
Financing leases | (599 | ) | (877 | ) | ||
Energy investments | (144 | ) | (754 | ) | ||
Intangible assets | (16 | ) | (25 | ) | ||
U.S. credit carryforwards(b) | 2,491 | 1,632 | ||||
Insurance company loss reserves | 1,386 | 1,373 | ||||
Non-U.S. loss carryforwards(a) | 1,231 | 1,271 | ||||
Other – net | 277 | 1,068 | ||||
1,936 | 999 | |||||
Eliminations | 5 | 4 | ||||
Net deferred income tax asset (liability) | $ | 12,432 | $ | 8,819 |
(a) | Net of valuation allowances of $5,103 million and $4,251 million for GE and $767 million and $448 million for GE Capital, for 2018 and 2017, respectively. Of the net deferred tax asset as of December 31, 2018 of $2,799 million, $37 million relates to net operating loss carryforwards that expire in various years ending from December 31, 2019 through December 31, 2021; $314 million relates to net operating losses that expire in various years ending from December 31, 2022 through December 31, 2038 and $2,448 million relates to net operating loss carryforwards that may be carried forward indefinitely. |
(b) | Of the net deferred tax asset as of December 31, 2018 of $2,565 million for U.S. credit carryforwards, $1,144 million expires in the year ending December 31, 2027 through 2028, $74 million expires in the years ending December 31, 2030 through 2032 and $1,347 million expires in various years ending from December 31, 2033 through December 31, 2038. |
FAIR VALUE OF DERIVATIVES | 2018 | 2017 | |||||||||||
December 31 (in millions) | Assets | Liabilities | Assets | Liabilities | |||||||||
Derivatives accounted for as hedges | |||||||||||||
Interest rate contracts | $ | 1,335 | $ | 23 | $ | 1,862 | $ | 148 | |||||
Currency exchange contracts | 175 | 121 | 160 | 70 | |||||||||
Other contracts | — | — | — | — | |||||||||
$ | 1,511 | $ | 145 | $ | 2,021 | $ | 218 | ||||||
Derivatives not accounted for as hedges | |||||||||||||
Interest rate contracts | 28 | 2 | 93 | 8 | |||||||||
Currency exchange contracts | 747 | 1,562 | 1,111 | 2,043 | |||||||||
Other contracts | 16 | 211 | 139 | 91 | |||||||||
$ | 791 | $ | 1,775 | $ | 1,343 | $ | 2,143 | ||||||
Gross derivatives recognized in Statement of Financial Position | |||||||||||||
Gross derivatives | 2,301 | 1,920 | 3,364 | 2,361 | |||||||||
Gross accrued interest | 209 | 6 | 469 | (38 | ) | ||||||||
$ | 2,511 | $ | 1,926 | $ | 3,833 | $ | 2,323 | ||||||
Amounts offset in Statement of Financial Position | |||||||||||||
Netting adjustments(a) | (963 | ) | (971 | ) | (1,457 | ) | (1,456 | ) | |||||
Cash collateral(b) | (1,042 | ) | (267 | ) | (1,529 | ) | (578 | ) | |||||
$ | (2,005 | ) | $ | (1,238 | ) | $ | (2,986 | ) | $ | (2,034 | ) | ||
Net derivatives recognized in Statement of Financial Position | |||||||||||||
Net derivatives | 505 | 687 | 847 | 289 | |||||||||
Amounts not offset in Statement of Financial Position | |||||||||||||
Securities held as collateral(c) | (235 | ) | — | (405 | ) | — | |||||||
Net amount(d) | $ | 270 | $ | 687 | $ | 441 | $ | 289 |
(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, 2018 and December 31, 2017, the cumulative adjustment for non-performance risk was $8 million and $(1) million, respectively. |
(b) | Excluded excess cash collateral received and posted of $3 million and $439 million at December 31, 2018, respectively, and $10 million and $255 million at December 31, 2017, respectively. |
(c) | Excluded excess securities collateral received with a fair value of zero and $16 million at December 31, 2018 and December 31, 2017, respectively. |
(d) | At December 31, 2018, our exposures to counterparties (including accrued interest), net of collateral we held, was $170 million; counterparties' exposures to our derivative liability (including accrued interest), net of collateral posted by us, was $657 million at December 31, 2018. These exposures exclude embedded derivatives. |
FAIR VALUE OF DERIVATIVES | 2018 | 2017 | |||||||||||
December 31 (in millions) | Assets | Liabilities | Assets | Liabilities | |||||||||
Derivatives accounted for as hedges | |||||||||||||
Interest rate contracts | $ | 1,335 | $ | 23 | $ | 1,862 | $ | 148 | |||||
Currency exchange contracts | 175 | 121 | 160 | 70 | |||||||||
Other contracts | — | — | — | — | |||||||||
$ | 1,511 | $ | 145 | $ | 2,021 | $ | 218 | ||||||
Derivatives not accounted for as hedges | |||||||||||||
Interest rate contracts | 28 | 2 | 93 | 8 | |||||||||
Currency exchange contracts | 747 | 1,562 | 1,111 | 2,043 | |||||||||
Other contracts | 16 | 211 | 139 | 91 | |||||||||
$ | 791 | $ | 1,775 | $ | 1,343 | $ | 2,143 | ||||||
Gross derivatives recognized in Statement of Financial Position | |||||||||||||
Gross derivatives | 2,301 | 1,920 | 3,364 | 2,361 | |||||||||
Gross accrued interest | 209 | 6 | 469 | (38 | ) | ||||||||
$ | 2,511 | $ | 1,926 | $ | 3,833 | $ | 2,323 | ||||||
Amounts offset in Statement of Financial Position | |||||||||||||
Netting adjustments(a) | (963 | ) | (971 | ) | (1,457 | ) | (1,456 | ) | |||||
Cash collateral(b) | (1,042 | ) | (267 | ) | (1,529 | ) | (578 | ) | |||||
$ | (2,005 | ) | $ | (1,238 | ) | $ | (2,986 | ) | $ | (2,034 | ) | ||
Net derivatives recognized in Statement of Financial Position | |||||||||||||
Net derivatives | 505 | 687 | 847 | 289 | |||||||||
Amounts not offset in Statement of Financial Position | |||||||||||||
Securities held as collateral(c) | (235 | ) | — | (405 | ) | — | |||||||
Net amount(d) | $ | 270 | $ | 687 | $ | 441 | $ | 289 |
(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, 2018 and December 31, 2017, the cumulative adjustment for non-performance risk was $8 million and $(1) million, respectively. |
(b) | Excluded excess cash collateral received and posted of $3 million and $439 million at December 31, 2018, respectively, and $10 million and $255 million at December 31, 2017, respectively. |
(c) | Excluded excess securities collateral received with a fair value of zero and $16 million at December 31, 2018 and December 31, 2017, respectively. |
(d) | At December 31, 2018, our exposures to counterparties (including accrued interest), net of collateral we held, was $170 million; counterparties' exposures to our derivative liability (including accrued interest), net of collateral posted by us, was $657 million at December 31, 2018. These exposures exclude embedded derivatives. |
(In millions) | Effect on hedging instrument | Effect on underlying | Effect on earnings(a) | ||||||
2018 | |||||||||
Cash flow hedges | $ | (154 | ) | $ | 154 | $ | — | ||
Fair value hedges | (724 | ) | 617 | (107 | ) | ||||
Net investment hedges(b) | 669 | (646 | ) | 23 | |||||
Economic hedges(c) | (2,068 | ) | 1,560 | (508 | ) | ||||
Total | $ | (592 | ) |
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 | ) |
(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 $(12,458) million and $(13,028) million at December 31, 2018 and December 31, 2017, respectively. Total pre-tax reclassifications from CTA to gain (loss) was $(1) million and $125 million in 2018 and 2017, respectively. Total pre-tax reclassifications from CTA to gain (loss) included zero and $125 million recorded in discontinued operations in 2018 and 2017, 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) | 2018 | 2017 | 2016 | ||||||
Operations | |||||||||
Total revenues and other income (loss) | $ | (1,347 | ) | $ | 182 | $ | 2,968 | ||
Earnings (loss) from discontinued operations before income taxes | $ | (1,811 | ) | $ | (731 | ) | $ | (162 | ) |
Benefit (provision) for income taxes(a) | 82 | 295 | 460 | ||||||
Earnings (loss) from discontinued operations, net of taxes | $ | (1,729 | ) | $ | (437 | ) | $ | 298 | |
Disposals | |||||||||
Gain (loss) on disposals before income taxes | $ | 4 | $ | 306 | $ | (750 | ) | ||
Benefit (provision) for income taxes(a) | (1 | ) | (178 | ) | (502 | ) | |||
Gain (loss) on disposals, net of taxes | $ | 3 | $ | 128 | $ | (1,252 | ) | ||
Earnings (loss) from discontinued operations, net of taxes | $ | (1,726 | ) | $ | (309 | ) | $ | (954 | ) |
(a) | GE Capital’s total tax benefit (provision) for discontinued operations and disposals included current tax benefit (provision) of $201 million, $(299) million and $945 million for the years ended December 31, 2018, 2017 and 2016, respectively, including current U.S. Federal tax benefit (provision) of $91 million, $(402) million and $1,224 million and deferred tax benefit (provision) of $(120) million, $416 million and $(988) million for the years ended December 31, 2018, 2017 and 2016, respectively. |
December 31 (In millions) | 2018 | 2017 | ||||
Assets | ||||||
Cash, cash equivalents and restricted cash | $ | 528 | $ | 757 | ||
Investment securities | 195 | 647 | ||||
Deferred income taxes | 872 | 951 | ||||
Financing receivables held for sale | 2,745 | 3,215 | ||||
Other assets | 270 | 342 | ||||
Assets of discontinued operations | $ | 4,610 | $ | 5,912 | ||
Liabilities | ||||||
Accounts payable | $ | 43 | $ | 51 | ||
All other liabilities | 1,833 | 655 | ||||
Liabilities of discontinued operations | $ | 1,875 | $ | 706 |
2018 | 2017 | 2016 | ||||||||||||||||||
(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) | $ | (20,636 | ) | $ | (20,636 | ) | $ | (8,193 | ) | $ | (8,193 | ) | $ | 8,431 | $ | 8,436 | ||||
Preferred stock dividends | (447 | ) | (447 | ) | (436 | ) | (436 | ) | (656 | ) | (656 | ) | ||||||||
Earnings (loss) from continuing operations attributable to common shareowners for per-share calculation(a)(b) | $ | (21,083 | ) | $ | (21,083 | ) | $ | (8,629 | ) | $ | (8,629 | ) | $ | 7,775 | $ | 7,780 | ||||
Earnings (loss) from discontinued operations for per-share calculation(a)(b) | (1,734 | ) | (1,734 | ) | (328 | ) | (328 | ) | (955 | ) | (950 | ) | ||||||||
Net earnings (loss) attributable to GE common shareowners for per-share calculation(a)(b) | $ | (22,809 | ) | $ | (22,809 | ) | $ | (8,944 | ) | $ | (8,944 | ) | $ | 6,824 | $ | 6,829 | ||||
Average equivalent shares | ||||||||||||||||||||
Shares of GE common stock outstanding | 8,691 | 8,691 | 8,687 | 8,687 | 9,025 | 9,025 | ||||||||||||||
Employee compensation-related shares (including stock options) and warrants | — | — | — | — | 105 | — | ||||||||||||||
Total average equivalent shares | 8,691 | 8,691 | 8,687 | 8,687 | 9,130 | 9,025 | ||||||||||||||
Per-share amounts | ||||||||||||||||||||
Earnings (loss) from continuing operations | $ | (2.43 | ) | $ | (2.43 | ) | $ | (0.99 | ) | $ | (0.99 | ) | $ | 0.85 | $ | 0.86 | ||||
Earnings (loss) from discontinued operations | (0.20 | ) | (0.20 | ) | (0.04 | ) | (0.04 | ) | (0.10 | ) | (0.11 | ) | ||||||||
Net earnings (loss) | (2.62 | ) | (2.62 | ) | (1.03 | ) | (1.03 | ) | 0.75 | 0.76 |
(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 | |||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||
U.S. federal statutory income tax rate | 21.0 | % | 35.0 | % | 35.0 | % | 21.0 | % | 35.0 | % | 35.0 | % | 21.0 | % | 35.0 | % | 35.0 | % | ||
Increase (reduction) in rate resulting from inclusion of after-tax earnings of GE Capital in before-tax earnings of GE | — | — | — | (0.5 | ) | (44.8 | ) | 5.6 | — | — | — | |||||||||
Tax on global activities including exports | (6.6 | ) | 31.2 | (29.8 | ) | (6.6 | ) | 36.6 | (25.6 | ) | 3.2 | 12.2 | 4.9 | |||||||
U.S. business credits(a) | 2.7 | 4.5 | (5.8 | ) | 0.5 | 1.7 | (1.2 | ) | 120.0 | 3.2 | 15.7 | |||||||||
Goodwill impairments | (22.4 | ) | (7.9 | ) | — | (22.3 | ) | (7.6 | ) | — | — | (3.8 | ) | — | ||||||
Tax Cuts and Jobs Act enactment | (0.2 | ) | (40.5 | ) | — | 0.5 | (92.9 | ) | — | (36.5 | ) | 3.1 | — | |||||||
All other – net(b)(c) | 2.6 | 1.1 | (15.5 | ) | 2.7 | 2.1 | (10.0 | ) | (8.0 | ) | 0.2 | 14.7 | ||||||||
(23.9 | ) | (11.6 | ) | (51.1 | ) | (25.7 | ) | (104.9 | ) | (31.2 | ) | 78.7 | 14.9 | 35.3 | ||||||
Actual income tax rate | (2.9 | )% | 23.4 | % | (16.1 | )% | (4.7 | )% | (69.9 | )% | 3.8 | % | 99.7 | % | 49.9 | % | 70.3 | % |
(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 21.0% federal effect for the year ended December 31, 2018 and 35.0% federal effect for the years ended December 31, 2017 and 2016. |
(c) | For the year ended December 31, 2018, included 2.9% and 2.9% in consolidated and GE, respectively, and in 2016, (9.9)% and (8.9)% in consolidated and GE, respectively, related to deductible stock losses. Included in 2017 is 5.7% and 12.1% in consolidated and GE, respectively, related to the disposition of the Water business. Also included in 2017 is (3.1)% and (6.6)% in consolidated and GE, respectively, related to losses on planned dispositions. |
ESTIMATED FUTURE BENEFIT PAYMENTS (In millions) | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 - 2028 | ||||||||||||
$ | 520 | $ | 500 | $ | 480 | $ | 465 | $ | 450 | $ | 1,950 |
ESTIMATED FUTURE BENEFIT PAYMENTS (In millions) | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 - 2028 | ||||||||||||
Principal pension plans | $ | 3,735 | $ | 3,795 | $ | 3,875 | $ | 3,930 | $ | 3,985 | $ | 20,760 | ||||||
Other pension plans | 1,050 | 1,045 | 1,050 | 1,070 | 1,080 | 5,715 |
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS (In millions) | Level 1 | Level 2 | Level 3(a) | Netting adjustment(d) | Net balance(b) | ||||||||||
December 31, 2018 | |||||||||||||||
Assets | |||||||||||||||
Investment securities | $ | 126 | $ | 29,408 | $ | 4,301 | $ | — | $ | 33,835 | |||||
Derivatives | — | 2,294 | 8 | (2,001 | ) | 301 | |||||||||
Total | $ | 126 | $ | 31,701 | $ | 4,309 | $ | (2,001 | ) | $ | 34,136 | ||||
Liabilities | |||||||||||||||
Derivatives | $ | — | $ | 1,913 | $ | 6 | $ | (1,234 | ) | $ | 686 | ||||
Other(c) | — | 722 | — | — | 722 | ||||||||||
Total | $ | — | $ | 2,635 | $ | 6 | $ | (1,234 | ) | $ | 1,408 | ||||
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(c) | — | 999 | — | — | 999 | ||||||||||
Total | $ | — | $ | 3,353 | $ | 7 | $ | (2,034 | ) | $ | 1,325 |
(a) | Included debt securities classified within Level 3 of $3,498 million of U.S. corporate and $580 million of Government and agencies securities at December 31, 2018, and $3,629 million of U.S. corporate and $614 million of Government and agencies securities at December 31, 2017. |
(b) | See Notes 3 and 20 for further information on the composition of our investment securities and derivative portfolios. |
(c) | Primarily represents the liabilities associated with certain of our deferred incentive compensation plans. |
(d) | 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. |
CONTRACTUAL MATURITIES (In millions) | Total loans | Net rentals receivable | ||||
Due in | ||||||
2019 | $ | 5,932 | $ | 446 | ||
2020 | 1,371 | 391 | ||||
2021 | 1,208 | 334 | ||||
2022 | 753 | 247 | ||||
2023 | 796 | 329 | ||||
2024 and later | 773 | 497 | ||||
Total | $ | 10,834 | $ | 2,245 |
2018 | 2017 | ||||||||||||||||||
INTANGIBLE ASSETS SUBJECT TO AMORTIZATION December 31 (In millions) | Gross carrying amount | Accumulated amortization | Net | Gross carrying amount | Accumulated amortization | Net | |||||||||||||
Customer-related(a) | $ | 10,214 | $ | (3,722 | ) | $ | 6,494 | $ | 10,614 | $ | (3,095 | ) | $ | 7,521 | |||||
Patents and technology | 10,332 | (4,528 | ) | 5,804 | 10,271 | (3,899 | ) | 6,372 | |||||||||||
Capitalized software | 7,437 | (4,617 | ) | 2,820 | 8,064 | (4,974 | ) | 3,089 | |||||||||||
Trademarks | 1,137 | (524 | ) | 613 | 1,280 | (421 | ) | 859 | |||||||||||
Lease valuations | 150 | (84 | ) | 66 | 170 | (80 | ) | 89 | |||||||||||
All other | 242 | (103 | ) | 139 | 218 | (92 | ) | 125 | |||||||||||
Total | $ | 29,513 | $ | (13,578 | ) | $ | 15,937 | $ | 30,617 | $ | (12,561 | ) | $ | 18,056 |
(a) | Balance includes payments made to our customers, primarily within our Aviation business. |
(In millions) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||
GE | $ | 1,162 | $ | 1,010 | $ | 844 | $ | 707 | $ | 579 | |||||
GE Capital | 29 | 27 | 27 | 59 | 56 | ||||||||||
1,191 | 1,037 | 871 | 766 | 635 | |||||||||||
Eliminations | (103 | ) | (99 | ) | (95 | ) | (85 | ) | (70 | ) | |||||
Total | $ | 1,088 | $ | 938 | $ | 776 | $ | 681 | $ | 565 |
CHANGES IN GOODWILL BALANCES | |||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||
(In millions) | Balance at January 1 | Acquisitions | Impairments | Dispositions, currency exchange and other | Balance at December 31 | Balance at January 1 | Acquisitions | Impairments | Dispositions, currency exchange and other | Balance at December 31 | |||||||||||||||||||||
Power | $ | 25,269 | $ | — | $ | (21,209 | ) | $ | (2,289 | ) | $ | 1,772 | $ | 26,403 | $ | 37 | $ | (1,165 | ) | $ | (6 | ) | $ | 25,269 | |||||||
Renewable Energy | 4,093 | — | (94 | ) | (28 | ) | 3,971 | 2,507 | 1,503 | — | 83 | 4,093 | |||||||||||||||||||
Aviation | 10,008 | — | — | (170 | ) | 9,839 | 9,455 | 25 | — | 529 | 10,008 | ||||||||||||||||||||
Oil & Gas | 23,943 | 68 | — | 444 | 24,455 | 10,363 | 13,364 | — | 216 | 23,943 | |||||||||||||||||||||
Healthcare | 17,306 | — | — | (80 | ) | 17,226 | 17,424 | 60 | — | (178 | ) | 17,306 | |||||||||||||||||||
Transportation | 902 | — | — | (18 | ) | 884 | 899 | — | — | 3 | 902 | ||||||||||||||||||||
Lighting | — | — | — | — | — | 281 | — | — | (281 | ) | — | ||||||||||||||||||||
Capital | 984 | — | — | (80 | ) | 904 | 2,368 | — | (1,386 | ) | 2 | 984 | |||||||||||||||||||
Corporate | 1,463 | — | (833 | ) | (66 | ) | 563 | 739 | 727 | — | (3 | ) | 1,463 | ||||||||||||||||||
Total | $ | 83,968 | $ | 68 | $ | (22,136 | ) | $ | (2,286 | ) | $ | 59,614 | $ | 70,438 | $ | 15,716 | $ | (2,550 | ) | $ | 365 | $ | 83,968 |
CONSOLIDATED EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (In millions) | 2018 | 2017 | 2016 | ||||||
U.S. earnings | $ | (10,197 | ) | $ | (18,935 | ) | $ | 535 | |
Non-U.S. earnings | (9,937 | ) | 7,784 | 6,496 | |||||
Total | $ | (20,134 | ) | $ | (11,151 | ) | $ | 7,031 |
OTHER INTANGIBLE ASSETS – NET December 31 (In millions) | 2018 | 2017 | ||||
Intangible assets subject to amortization | $ | 15,937 | $ | 18,056 | ||
Indefinite-lived intangible assets(a) | 2,222 | 2,217 | ||||
Total | $ | 18,159 | $ | 20,273 |
(a) | Indefinite-lived intangible assets principally comprise trademarks and in-process research and development. |
December 31 (In millions) | 2018 | 2017 | ||||
Raw materials and work in process | $ | 10,665 | $ | 10,131 | ||
Finished goods | 8,387 | 8,847 | ||||
Unbilled shipments | 219 | 441 | ||||
Total inventories | $ | 19,271 | $ | 19,419 |
(In millions) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||
GE excluding assumed debt(a) | $ | 103 | $ | 870 | $ | 578 | $ | 6,271 | $ | 1,451 | |||||
GE Capital debt assumed by GE(b) | 4,207 | 6,172 | 4,663 | 1,959 | 2,835 | ||||||||||
GE Capital other debt | 3,984 | (c) | 11,309 | 2,001 | 2,207 | 2,358 |
(a) | Includes maturities of BHGE borrowings of $43 million, $12 million, $537 million, $1,274 million and $8 million in 2019, 2020, 2021, 2022 and 2023, respectively. |
(b) | Of these maturities, $1,523 million, $3,369 million, $442 million, zero and zero for 2019, 2020, 2021, 2022 and 2023, respectively, were effectively transferred to GE through intercompany loans with right of offset. |
(c) | Fixed and floating rate notes of $433 million contain put options with exercise dates in 2019, and which have final maturity beyond 2023. |
FUNDED STATUS December 31 (In millions) | 2018 | 2017 | ||||
Accumulated postretirement benefit obligation | $ | 5,153 | $ | 6,006 | ||
Fair value of plan assets | 362 | 518 | ||||
Underfunded | $ | 4,791 | $ | 5,488 |
FUNDED STATUS | Principal pension plans | Other pension plans | |||||||||||||
December 31 (In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Projected benefit obligations | $ | 68,500 | $ | 74,985 | $ | 23,256 | $ | 25,303 | |||||||
Fair value of plan assets | 50,009 | 50,361 | 19,379 | 21,224 | |||||||||||
Underfunded | $ | 18,491 | $ | 24,624 | $ | 3,877 | $ | 4,079 |
NOTIONAL AMOUNTS OF LOAN COMMITMENTS December 31 (In millions) | 2018 | 2017 | ||||
Ordinary course of business lending commitments(a) | $ | 767 | $ | 1,105 | ||
Unused revolving credit lines | 34 | 198 |
(a) | Excluded investment commitments of $1,373 million and $677 million at December 31, 2018 and December 31, 2017, respectively. |
(In millions) | 2018 | 2017 | 2016 | ||||||
Balance at January 1 | $ | 2,348 | $ | 1,929 | $ | 1,733 | |||
Current-year provisions | 1,071 | 961 | 801 | ||||||
Expenditures | (960 | ) | (827 | ) | (734 | ) | |||
Other changes(a) | 51 | 286 | 130 | ||||||
Balance at December 31 | $ | 2,510 | $ | 2,348 | $ | 1,929 |
(a) | Included $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) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Consolidated operations | |||||||||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 440 | $ | 52 | $ | 789 | $ | 1,164 | $ | (22,899 | ) | $ | 1,297 | $ | 952 | $ | (11,053 | ) | |||||||||
Earnings (loss) from discontinued operations | (1,553 | ) | (239 | ) | (121 | ) | (146 | ) | 39 | (106 | ) | (92 | ) | 182 | |||||||||||||
Net earnings (loss) | (1,113 | ) | (187 | ) | 669 | 1,019 | (22,859 | ) | 1,191 | 860 | (10,872 | ) | |||||||||||||||
Less net earnings (loss) attributable to noncontrolling interests | 34 | (104 | ) | (132 | ) | (38 | ) | (90 | ) | (169 | ) | 99 | (53 | ) | |||||||||||||
Net earnings (loss) attributable to the Company | $ | (1,147 | ) | $ | (83 | ) | $ | 800 | $ | 1,057 | $ | (22,769 | ) | $ | 1,360 | $ | 761 | $ | (10,818 | ) | |||||||
Per-share amounts – earnings (loss) from continuing operations | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.04 | $ | 0.01 | $ | 0.08 | $ | 0.12 | $ | (2.63 | ) | $ | 0.16 | $ | 0.08 | $ | (1.29 | ) | |||||||||
Basic earnings (loss) per share | 0.04 | 0.01 | 0.08 | 0.12 | (2.63 | ) | 0.16 | 0.08 | (1.29 | ) | |||||||||||||||||
Per-share amounts – earnings (loss) from discontinued operations | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | (0.18 | ) | (0.03 | ) | (0.01 | ) | (0.02 | ) | — | (0.01 | ) | (0.01 | ) | 0.02 | |||||||||||||
Basic earnings (loss) per share | (0.18 | ) | (0.03 | ) | (0.01 | ) | (0.02 | ) | — | (0.01 | ) | (0.01 | ) | 0.02 | |||||||||||||
Per-share amounts – net earnings (loss) | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | (0.14 | ) | (0.01 | ) | 0.07 | 0.10 | (2.62 | ) | 0.15 | 0.07 | (1.27 | ) | |||||||||||||||
Basic earnings (loss) per share | (0.14 | ) | (0.01 | ) | 0.07 | 0.10 | (2.62 | ) | 0.15 | 0.07 | (1.27 | ) | |||||||||||||||
Dividends declared | 0.12 | 0.24 | 0.12 | 0.24 | 0.12 | 0.24 | 0.01 | 0.12 | |||||||||||||||||||
Selected data | |||||||||||||||||||||||||||
GE | |||||||||||||||||||||||||||
Sales of goods and services | $ | 26,894 | $ | 24,780 | $ | 28,079 | $ | 27,129 | $ | 27,456 | $ | 28,774 | $ | 31,213 | $ | 30,571 | |||||||||||
Gross profit from sales | 5,867 | 4,936 | 6,202 | 5,971 | 5,107 | 5,676 | 5,738 | 5,671 | |||||||||||||||||||
GE Capital | |||||||||||||||||||||||||||
Total revenues | 2,173 | 2,681 | 2,429 | 2,446 | 2,473 | 2,397 | 2,476 | 1,545 | |||||||||||||||||||
Earnings (loss) from continuing operations attributable to the Company | (179 | ) | (13 | ) | (22 | ) | 10 | 58 | 60 | 101 | (6,385 | ) |
IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED (In millions) | July 3, 2017 | ||
Cash and cash equivalents | $ | 4,133 | |
Accounts receivable | 2,342 | ||
Inventories | 1,712 | ||
Property, plant, and equipment - net | 4,514 | ||
Other intangible assets - net | 4,005 | ||
All other assets | 1,335 | ||
Accounts payable | (1,245 | ) | |
Borrowings | (3,370 | ) | |
Deferred taxes(a) | (249 | ) | |
All other liabilities | (2,487 | ) | |
Total identifiable net assets(b) | 10,690 | ||
Fair value of existing noncontrolling interest | (35 | ) | |
Goodwill(c) | 14,143 | ||
Total allocated purchase price | $ | 24,798 |
(a) | Includes an increase of approximately $806 million primarily related to fair value adjustments to identifiable assets and liabilities (excluding goodwill) partially offset by a tax asset of approximately $553 million associated with the recognition of foreign tax credits. |
(b) | Through the end of the purchase accounting window in 2018, measurement period adjustments increased goodwill by $787 million primarily due to reductions in the fair value of property, plant and equipment of $362 million, equity method investments of $228 million, intangible assets of $123 million, and an increase to other liabilities of $315 million, partially offset by deferred tax adjustments of $251 million. Certain of these adjustments resulted in a cumulative decrease to depreciation and amortization expense of $33 million. In addition, we reclassified certain legacy Baker Hughes business balances to conform to our presentation. |
(c) | Goodwill represents future economic benefits expected to be recognized from combining the operations of GE Oil & Gas and Baker Hughes, including expected future synergies and operating efficiencies. Goodwill resulting from the acquisition has been allocated to our Oil & Gas reporting units, of which $67 million is deductible for tax purposes. |
(In millions) | 2018 | 2017 | 2016 | ||||||
Cash from (used for) operating activities-continuing operations | |||||||||
Combined | $ | 3,839 | $ | 13,408 | $ | 29,753 | |||
GE current receivables sold to GE Capital(a) | 198 | (2,611 | ) | 697 | |||||
GE long-term receivables sold to GE Capital | 1,079 | (250 | ) | (1,569 | ) | ||||
GE Capital common dividends to GE | — | (4,016 | ) | (20,095 | ) | ||||
Other reclassifications and eliminations(b) | (455 | ) | 470 | (1,282 | ) | ||||
Total cash from (used for) operating activities-continuing operations | $ | 4,662 | $ | 7,000 | $ | 7,503 | |||
Cash from (used for) investing activities-continuing operations | |||||||||
Combined | $ | 14,054 | $ | (49 | ) | $ | 58,087 | ||
GE current receivables sold to GE Capital(a) | (1,149 | ) | 2,538 | (170 | ) | ||||
GE long-term receivables sold to GE Capital | (1,079 | ) | 250 | 1,569 | |||||
GE Capital long-term loans to GE | 5,999 | 7,271 | — | ||||||
GE Capital short-term loans to GE | 480 | (1,329 | ) | 1,329 | |||||
Other reclassifications and eliminations(b) | (252 | ) | (335 | ) | 1,751 | ||||
Total cash from (used for) investing activities-continuing operations | $ | 18,052 | $ | 8,348 | $ | 62,566 | |||
Cash from (used for) financing activities-continuing operations | |||||||||
Combined | $ | (26,212 | ) | $ | (19,065 | ) | $ | (109,024 | ) |
GE current receivables sold to GE Capital | 952 | 72 | (527 | ) | |||||
GE Capital common dividends to GE | — | 4,016 | 20,095 | ||||||
GE Capital long-term loans to GE | (5,999 | ) | (7,271 | ) | — | ||||
GE Capital short-term loans to GE | (480 | ) | 1,329 | (1,329 | ) | ||||
Other reclassifications and eliminations(b) | 706 | (135 | ) | (468 | ) | ||||
Total cash from (used for) financing activities-continuing operations | $ | (31,033 | ) | $ | (21,055 | ) | $ | (91,253 | ) |
(a) | Excludes $5,192 million, $4,411 million and zero related to cash payments received on the Receivable facility DPP in the years ended December 31, 2018, 2017 and 2016, respectively, which are reflected as Cash from investing activities in the GE Capital and the consolidated GE Company columns of our Statement of Cash Flows. Sales of current receivables from GE to GE Capital are classified as Cash from operating activities in the GE column of our Statement of Cash flows. See Note 1 and Note 4. |
(b) | Includes eliminations of other cash flows activities, including financing of supply chain finance programs of $(318) million, $122 million and $(586) million in the years ended December 31, 2018, 2017 and 2016, respectively, and various investments, loans and allocations of GE corporate overhead costs. |
(In millions) | 2018 | 2017 | 2016 | ||||||
GE | $ | 1,850 | $ | 1,699 | $ | 1,576 | |||
GE Capital | 107 | 105 | 91 | ||||||
1,958 | 1,804 | 1,668 | |||||||
Eliminations | (110 | ) | (143 | ) | (126 | ) | |||
Total | $ | 1,848 | $ | 1,661 | $ | 1,542 |
STOCK-BASED COMPENSATION ACTIVITY | Stock Options | RSUs | ||||||||||
Shares (in millions) | Weighted average exercise price | Shares (in millions) | Weighted average grant date fair value | |||||||||
Outstanding at January 1, 2018 | 399 | $ | 21.91 | 17 | $ | 26.94 | ||||||
Granted | 108 | 12.13 | 22 | 13.96 | ||||||||
Exercised | (2 | ) | 11.46 | (6 | ) | 25.81 | ||||||
Forfeited | (13 | ) | 20.09 | (4 | ) | 21.89 | ||||||
Expired | (26 | ) | 24.49 | N/A | N/A | |||||||
Outstanding at December 31, 2018 | 466 | $ | 19.59 | 29 | $ | 18.07 | ||||||
Exercisable at December 31, 2018 | 318 | $ | 21.46 | N/A | N/A | |||||||
Expected to vest | 133 | $ | 15.89 | 27 | $ | 18.08 |
COMMON SHARES ISSUES AND OUTSTANDING December 31 (In thousands) | 2018 | 2017 | 2016 |
Issued | 11,693,841 | 11,693,841 | 11,693,841 |
In treasury | (2,991,614) | (3,013,270) | (2,951,227) |
Outstanding | 8,702,227 | 8,680,571 | 8,742,614 |
(In millions) | 2018 | 2017 | 2016 | ||||||
Preferred stock issued | $ | 6 | $ | 6 | $ | 6 | |||
Common stock issued | $ | 702 | $ | 702 | $ | 702 | |||
Accumulated other comprehensive income (loss) | |||||||||
Balance at January 1 | $ | (14,404 | ) | $ | (18,588 | ) | $ | (16,532 | ) |
Other comprehensive income (loss) before reclassifications | |||||||||
Investment securities - net of deferred taxes of $41, $(335), $84(a) | 87 | (627) | 170 | ||||||
Currency translation adjustments (CTA) - net of deferred taxes of $29, $(537), $719 | (2,076) | 846 | (1,593) | ||||||
Cash flow hedges - net of deferred taxes of $(26), $31, $(41) | (149) | 171 | (234) | ||||||
Benefit plans - net of deferred taxes of $115, $32, $(1,016) | 71 | 550 | (2,946) | ||||||
Total | $ | (2,066 | ) | $ | 940 | $ | (4,603 | ) | |
Reclassifications from other comprehensive income | |||||||||
Investment securities - net of deferred taxes of $(6), $(81), $30(b) | (23 | ) | (149 | ) | 34 | ||||
Currency translation gains (losses) on dispositions - net of deferred taxes of $89, $(543), $241(b) | 412 | 1,333 | 294 | ||||||
Cash flow hedges - net of deferred taxes of $4, $(28), $37(c) | 98 | (120 | ) | 327 | |||||
Benefit plans - net of deferred taxes of $2,610, $1,111, $966(d) | 1,345 | 2,232 | 1,878 | ||||||
Total(e)(f) | $ | 1,831 | $ | 3,296 | $ | 2,533 | |||
Other comprehensive income (loss) | (235 | ) | 4,236 | (2,070 | ) | ||||
Less other comprehensive income (loss) attributable to noncontrolling interests | (225 | ) | 51 | (14 | ) | ||||
Other comprehensive income (loss), net, attributable to GE | $ | (10 | ) | $ | 4,184 | $ | (2,056 | ) | |
Balance at December 31 | $ | (14,414 | ) | $ | (14,404 | ) | $ | (18,588 | ) |
Other capital | |||||||||
Balance at January 1 | $ | 37,384 | $ | 37,224 | $ | 37,613 | |||
Gains (losses) on treasury stock dispositions and other(g) | (1,880 | ) | 160 | (389 | ) | ||||
Balance at December 31 | $ | 35,504 | $ | 37,384 | $ | 37,224 | |||
Retained earnings | |||||||||
Balance at January 1(h) | $ | 117,245 | $ | 133,857 | $ | 135,677 | |||
Net earnings (loss) attributable to the Company | (22,355 | ) | (8,484 | ) | 7,500 | ||||
Dividends and other transactions with shareowners | (3,669 | ) | (7,741 | ) | (9,054 | ) | |||
Redemption value adjustment on redeemable noncontrolling interests(i) | (374 | ) | (388 | ) | (267 | ) | |||
Changes in accounting(j) | 2,261 | — | — | ||||||
Balance at December 31 | $ | 93,109 | $ | 117,245 | $ | 133,857 | |||
Common stock held in treasury | |||||||||
Balance at January 1 | $ | (84,902 | ) | $ | (83,038 | ) | $ | (63,539 | ) |
Purchases | (268 | ) | (3,849 | ) | (22,073 | ) | |||
Dispositions | 1,244 | 1,985 | 2,574 | ||||||
Balance at December 31 | $ | (83,925 | ) | $ | (84,902 | ) | $ | (83,038 | ) |
Total equity | |||||||||
GE shareowners' equity balance | $ | 30,981 | $ | 56,030 | $ | 70,162 | |||
Noncontrolling interests balance | 20,500 | 17,468 | 1,663 | ||||||
Total equity balance at December 31 | $ | 51,481 | $ | 73,498 | $ | 71,825 |
(a) | Included adjustments of $1,825 million, $(1,259) million and $(57) million in 2018, 2017 and 2016, respectively, to 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 12 for further information. |
(b) | Primarily recorded in \"GE Capital Revenues from Services\" and \"Other income\" and income taxes in \"Benefit (provision) for income taxes\" in our consolidated Statement of Earnings (Loss). Currency translation gains and losses on dispositions included zero, $483 million and $211 million in 2018, 2017 and 2016, respectively, in earnings (loss) from discontinued operations, net of taxes. |
(c) | Cash flow hedges primarily includes impact of foreign exchange contracts and gains and 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 20. |
(d) | Primarily includes amortization of actuarial gains and losses, amortization of prior service cost and curtailment gain and loss. These components are included in the computation of net periodic pension cost. See Note 13 for further information. |
(e) | Included $227 million and $782 million after-tax reclassification of AOCI to Other Capital as part of the loss from sale of 12.1% economic interest in BHGE in November, 2018, and recognition of noncontrolling interest in BHGE in 2017, respectively. |
(f) | Included $(1,815) million deferred tax AOCI, primarily related to benefit plans $(1,740) million, reclassified to retained earnings for stranded tax effects as a result of adoption of ASU 2018-02 in 2018. |
(g) | Included $(1,696) million loss recorded in Other Capital from the sale of 12.1% economic interest in BHGE in November 2018. |
(h) | January 1, 2018 amount has been adjusted to reflect retrospective adoption of ASC 606 $(8,061) million and preferable accounting change from LIFO to FIFO $(377) million. |
(i) | Amount of redemption value adjustment on redeemable noncontrolling interest shown net of deferred taxes. |
(j) | On January 1, 2018, we adopted several new accounting standards on a modified retrospective basis. Cumulative impact of these changes was recorded in the opening retained earnings and it increased our retained earnings by $446 million, primarily due to an increase of $410 million related to ASU 2016-16. In the fourth quarter of 2018, we adopted ASU 2018-02 and reclassified $1,815 stranded tax effects from the Tax Cuts and Jobs act on AOCI to retained earnings. See Note 1 for further information. |
UNRECOGNIZED TAX BENEFITS RECONCILIATION (In millions) | 2018 | 2017 | ||||
Balance at January 1 | $ | 5,449 | $ | 4,692 | ||
Additions for tax positions of the current year | 300 | 260 | ||||
Additions for tax positions of prior years(a) | 945 | 791 | ||||
Reductions for tax positions of prior years | (905 | ) | (113 | ) | ||
Settlements with tax authorities | (64 | ) | (57 | ) | ||
Expiration of the statute of limitations | (162 | ) | (124 | ) | ||
Balance at December 31 | $ | 5,563 | $ | 5,449 |
(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 | GE Capital | ||||||||||||||
OF CONSOLIDATED VIES | Customer | Trade | |||||||||||||
(In millions) | GE | Notes receivables(a) | receivables(b) | Other(c) | Total | ||||||||||
December 31, 2018 | |||||||||||||||
Assets | |||||||||||||||
Financing receivables, net | $ | — | $ | — | $ | 1,774 | $ | 930 | $ | 2,704 | |||||
Current receivables | 129 | 366 | — | — | 496 | ||||||||||
Investment securities | 35 | — | — | — | 35 | ||||||||||
Other assets | 593 | 830 | — | 944 | 2,367 | ||||||||||
Total | $ | 756 | $ | 1,197 | $ | 1,774 | $ | 1,874 | $ | 5,601 | |||||
Liabilities | |||||||||||||||
Borrowings | $ | 44 | $ | — | $ | — | $ | 806 | $ | 850 | |||||
Non-recourse borrowings | — | 534 | 1,341 | — | 1,875 | ||||||||||
Other liabilities | 342 | 546 | 423 | 490 | 1,801 | ||||||||||
Total | $ | 386 | $ | 1,079 | $ | 1,765 | $ | 1,296 | $ | 4,526 | |||||
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 |
(a) | Two funding entities were established to purchase customer notes receivable from GE, one of which is partially funded by third-party debt. |
(b) | On September 28, 2018, GE Capital entered a new $1,500 million current receivables facility with an alternative funding vehicle that it controlled. This facility, which will expire in eighteen months, unless extended, is a pan-European multi-jurisdiction, multi-currency revolving receivables facility. The alternative funding vehicle purchases GE current receivables on a daily basis and issues non-recourse debt to third-party banks to fund its purchases. GE Capital consolidates the entity because it services the purchased current receivables. |
(c) | In January 2018, ownership of the equity shares of Electric Insurance Company (EIC) were distributed to GE Capital by a bankruptcy trustee. We have previously reported EIC as a VIE because we received a 100% beneficial interest in the assets, liabilities and operations of EIC, related to an interim distribution in 2001. As EIC is now a consolidated voting interest entity we removed EIC from our VIE disclosure. In 2017, $1,470 million of assets and $959 million of liabilities were included related to EIC. |
ESTIMATED 5 YEAR CONSOLIDATED AMORTIZATION (In millions) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||
Estimated annual pre-tax amortization | $ | 2,108 | $ | 1,973 | $ | 1,810 | $ | 1,641 | $ | 1,506 |
Total revenues(a) | Intersegment revenues(b) | External revenues | |||||||||||||||||||||||||||
REVENUES (In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||||
Power | $ | 27,300 | $ | 34,878 | $ | 35,835 | $ | 1,795 | $ | 1,385 | $ | 1,325 | $ | 25,505 | $ | 33,493 | $ | 34,510 | |||||||||||
Renewable Energy | 9,533 | 9,205 | 9,752 | 25 | 70 | 11 | 9,508 | 9,135 | 9,740 | ||||||||||||||||||||
Aviation | 30,566 | 27,013 | 26,240 | 448 | 573 | 718 | 30,119 | 26,440 | 25,522 | ||||||||||||||||||||
Oil & Gas | 22,859 | 17,180 | 12,938 | 363 | 646 | 382 | 22,496 | 16,535 | 12,556 | ||||||||||||||||||||
Healthcare | 19,784 | 19,017 | 18,212 | 20 | 15 | 12 | 19,765 | 19,002 | 18,201 | ||||||||||||||||||||
Transportation | 3,898 | 3,935 | 4,585 | 25 | 10 | — | 3,873 | 3,925 | 4,585 | ||||||||||||||||||||
Lighting(c) | 1,723 | 1,941 | 4,762 | 2 | 28 | 19 | 1,721 | 1,913 | 4,743 | ||||||||||||||||||||
Total industrial segment revenues | 115,664 | 113,168 | 112,324 | 2,678 | 2,725 | 2,467 | 112,986 | 110,443 | 109,857 | ||||||||||||||||||||
Capital | 9,551 | 9,070 | 10,905 | 1,384 | 1,620 | 1,288 | 8,166 | 7,451 | 9,617 | ||||||||||||||||||||
Corporate items and eliminations | (3,600 | ) | (3,995 | ) | (3,760 | ) | (4,062 | ) | (4,345 | ) | (3,755 | ) | 463 | 350 | (5 | ) | |||||||||||||
Total | $ | 121,615 | $ | 118,243 | $ | 119,469 | $ | — | $ | — | $ | — | $ | 121,615 | $ | 118,243 | $ | 119,469 |
(a) | Revenues of GE businesses include income from sales of goods and services to customers. |
(b) | Sales from one component to another generally are priced at equivalent commercial selling prices. |
(c) | Lighting segment included Appliances through its disposition in the second quarter of 2016. |
PROFIT AND EARNINGS (In millions) | 2018 | 2017 | 2016 | ||||||
Power | $ | (808 | ) | $ | 1,947 | $ | 4,187 | ||
Renewable Energy | 287 | 583 | 631 | ||||||
Aviation | 6,466 | 5,370 | 5,324 | ||||||
Oil & Gas | 429 | 158 | 1,302 | ||||||
Healthcare | 3,698 | 3,488 | 3,210 | ||||||
Transportation | 633 | 641 | 966 | ||||||
Lighting(a) | 70 | 27 | 165 | ||||||
Total industrial segment profit | 10,774 | 12,213 | 15,785 | ||||||
Capital | (489 | ) | (6,765 | ) | (1,251 | ) | |||
Total segment profit | 10,285 | 5,448 | 14,534 | ||||||
Corporate items and eliminations | (2,796 | ) | (4,060 | ) | (2,064 | ) | |||
GE goodwill impairments | (22,136 | ) | (1,165 | ) | — | ||||
GE interest and other financial charges | (2,708 | ) | (2,753 | ) | (2,026 | ) | |||
GE non-operating benefit costs | (2,764 | ) | (2,385 | ) | (2,349 | ) | |||
GE provision for income taxes | (957 | ) | (3,691 | ) | (298 | ) | |||
Earnings (loss) from continuing operations attributable to GE common shareowners | (21,076 | ) | (8,605 | ) | 7,797 | ||||
Earnings (loss) from discontinued operations, net of taxes | (1,726 | ) | (309 | ) | (954 | ) | |||
Less net earnings (loss) attributable to noncontrolling interests, discontinued operations | — | 6 | (1 | ) | |||||
Earnings (loss) from discontinued operations, net of taxes and noncontrolling interests | (1,726 | ) | (315 | ) | (952 | ) | |||
Consolidated net earnings (loss) attributable to GE common shareowners | $ | (22,802 | ) | $ | (8,920 | ) | $ | 6,845 |
(a) | Lighting segment included Appliances through its disposition in the second quarter of 2016. |
Assets(a) | Property, plant and equipment additions(b) | Depreciation and amortization(c) | |||||||||||||||||||||||||||
At December 31 | For the years ended December 31 | For the years ended December 31 | |||||||||||||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||||
Power | $ | 33,809 | $ | 66,552 | $ | 68,165 | $ | 378 | $ | 1,072 | $ | 963 | $ | 1,474 | $ | 1,358 | $ | 1,549 | |||||||||||
Renewable Energy | 10,974 | 10,467 | 7,812 | 285 | 624 | 166 | 309 | 255 | 183 | ||||||||||||||||||||
Aviation | 38,021 | 37,473 | 35,614 | 1,070 | 1,426 | 1,328 | 1,042 | 979 | 811 | ||||||||||||||||||||
Oil & Gas | 54,300 | 59,072 | 24,426 | 624 | 5,469 | 284 | 1,486 | 1,100 | 548 | ||||||||||||||||||||
Healthcare | 28,048 | 28,408 | 28,331 | 378 | 393 | 432 | 832 | 806 | 785 | ||||||||||||||||||||
Transportation | 4,270 | 3,757 | 3,746 | 104 | 128 | 108 | 156 | 136 | 170 | ||||||||||||||||||||
Lighting(d) | 699 | 619 | 1,570 | 17 | 34 | 160 | 1 | 86 | 173 | ||||||||||||||||||||
Capital(e) | 123,939 | 156,716 | 182,970 | 4,569 | 3,680 | 3,769 | 2,163 | 2,343 | 2,514 | ||||||||||||||||||||
Corporate items and eliminations(f) | 15,068 | 6,182 | 6,488 | (65 | ) | (100 | ) | 94 | 760 | 367 | 340 | ||||||||||||||||||
Total | $ | 309,129 | $ | 369,245 | $ | 359,122 | $ | 7,360 | $ | 12,728 | $ | 7,305 | $ | 8,223 | $ | 7,429 | $ | 7,073 |
(a) | Total assets of Power, Renewable Energy, Aviation, Oil & Gas, Healthcare, Transportation and Capital operating segments at December 31, 2018, include investments in and advances to associated companies of $1,140 million, $46 million, $2,013 million, $133 million, $271 million, $59 million and $3,029 million, respectively. Lighting held an insignificant balance as of December 31, 2018. Investments in and advances to associated companies contributed approximately $(1) million, $3 million, $126 million, $(136) million, $16 million, $4 million, $(2) million and $185 million to segment pre-tax income for the year ended December 31, 2018 of Power, Renewable Energy, Aviation, Oil & Gas, Healthcare, Transportation, Lighting and Capital operating segments, respectively. |
(b) | Additions to property, plant and equipment include amounts relating to principal businesses purchased. |
(c) | Includes amortization expense related to intangible assets. |
(d) | Lighting segment included Appliances through its disposition in the second quarter of 2016. |
(e) | Includes Capital discontinued operations. |
(f) | 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) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||
Capital | $ | 2,982 | $ | 3,145 | $ | 3,790 | $ | 374 | $ | 6,302 | $ | 1,431 | |||||||
Corporate items and eliminations(a) | 2,077 | 1,724 | 1,234 | (957 | ) | (3,691 | ) | (298 | ) | ||||||||||
Total | $ | 5,059 | $ | 4,869 | $ | 5,025 | $ | (583 | ) | $ | 2,611 | $ | 1,133 |
(a) | Included amounts for Power, Renewable Energy, Aviation, Oil & Gas, 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. |
• | Modifications. Under the new revenue standard, contract modifications are generally accounted for as if we entered into a new contract, resulting in prospective recognition of changes to our estimates of contract billings and costs. That is, cumulative effect adjustments will generally no longer be recognized in the period that modifications occur. |
• | Scope and term. The new revenue standard provides more prescriptive guidance on identifying the elements of long-term service type contracts that should be accounted for as separate performance obligations. Application of this guidance, which focuses on understanding the nature of the arrangement, including our customers' discretion in purchasing decisions, has resulted in changes to the scope of elements included in our accounting model for long-term service agreements. For example, significant equipment upgrades offered as part of our long-term service agreements are generally accounted for as separate performance obligations under the new revenue standard. |
(In millions) | 2018 | 2017 | 2016 | ||||||
Preferred stock issued | $ | 6 | $ | 6 | $ | 6 | |||
Common stock issued | $ | 702 | $ | 702 | $ | 702 | |||
Accumulated other comprehensive income (loss) | |||||||||
Balance at January 1 | $ | (14,404 | ) | $ | (18,588 | ) | $ | (16,532 | ) |
Other comprehensive income (loss) before reclassifications | |||||||||
Investment securities - net of deferred taxes of $41, $(335), $84(a) | 87 | (627) | 170 | ||||||
Currency translation adjustments (CTA) - net of deferred taxes of $29, $(537), $719 | (2,076) | 846 | (1,593) | ||||||
Cash flow hedges - net of deferred taxes of $(26), $31, $(41) | (149) | 171 | (234) | ||||||
Benefit plans - net of deferred taxes of $115, $32, $(1,016) | 71 | 550 | (2,946) | ||||||
Total | $ | (2,066 | ) | $ | 940 | $ | (4,603 | ) | |
Reclassifications from other comprehensive income | |||||||||
Investment securities - net of deferred taxes of $(6), $(81), $30(b) | (23 | ) | (149 | ) | 34 | ||||
Currency translation gains (losses) on dispositions - net of deferred taxes of $89, $(543), $241(b) | 412 | 1,333 | 294 | ||||||
Cash flow hedges - net of deferred taxes of $4, $(28), $37(c) | 98 | (120 | ) | 327 | |||||
Benefit plans - net of deferred taxes of $2,610, $1,111, $966(d) | 1,345 | 2,232 | 1,878 | ||||||
Total(e)(f) | $ | 1,831 | $ | 3,296 | $ | 2,533 | |||
Other comprehensive income (loss) | (235 | ) | 4,236 | (2,070 | ) | ||||
Less other comprehensive income (loss) attributable to noncontrolling interests | (225 | ) | 51 | (14 | ) | ||||
Other comprehensive income (loss), net, attributable to GE | $ | (10 | ) | $ | 4,184 | $ | (2,056 | ) | |
Balance at December 31 | $ | (14,414 | ) | $ | (14,404 | ) | $ | (18,588 | ) |
Other capital | |||||||||
Balance at January 1 | $ | 37,384 | $ | 37,224 | $ | 37,613 | |||
Gains (losses) on treasury stock dispositions and other(g) | (1,880 | ) | 160 | (389 | ) | ||||
Balance at December 31 | $ | 35,504 | $ | 37,384 | $ | 37,224 | |||
Retained earnings | |||||||||
Balance at January 1(h) | $ | 117,245 | $ | 133,857 | $ | 135,677 | |||
Net earnings (loss) attributable to the Company | (22,355 | ) | (8,484 | ) | 7,500 | ||||
Dividends and other transactions with shareowners | (3,669 | ) | (7,741 | ) | (9,054 | ) | |||
Redemption value adjustment on redeemable noncontrolling interests(i) | (374 | ) | (388 | ) | (267 | ) | |||
Changes in accounting(j) | 2,261 | — | — | ||||||
Balance at December 31 | $ | 93,109 | $ | 117,245 | $ | 133,857 | |||
Common stock held in treasury | |||||||||
Balance at January 1 | $ | (84,902 | ) | $ | (83,038 | ) | $ | (63,539 | ) |
Purchases | (268 | ) | (3,849 | ) | (22,073 | ) | |||
Dispositions | 1,244 | 1,985 | 2,574 | ||||||
Balance at December 31 | $ | (83,925 | ) | $ | (84,902 | ) | $ | (83,038 | ) |
Total equity | |||||||||
GE shareowners' equity balance | $ | 30,981 | $ | 56,030 | $ | 70,162 | |||
Noncontrolling interests balance | 20,500 | 17,468 | 1,663 | ||||||
Total equity balance at December 31 | $ | 51,481 | $ | 73,498 | $ | 71,825 |
(a) | Included adjustments of $1,825 million, $(1,259) million and $(57) million in 2018, 2017 and 2016, respectively, to 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 12 for further information. |
(b) | Primarily recorded in \"GE Capital Revenues from Services\" and \"Other income\" and income taxes in \"Benefit (provision) for income taxes\" in our consolidated Statement of Earnings (Loss). Currency translation gains and losses on dispositions included zero, $483 million and $211 million in 2018, 2017 and 2016, respectively, in earnings (loss) from discontinued operations, net of taxes. |
(c) | Cash flow hedges primarily includes impact of foreign exchange contracts and gains and 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 20. |
(d) | Primarily includes amortization of actuarial gains and losses, amortization of prior service cost and curtailment gain and loss. These components are included in the computation of net periodic pension cost. See Note 13 for further information. |
(e) | Included $227 million and $782 million after-tax reclassification of AOCI to Other Capital as part of the loss from sale of 12.1% economic interest in BHGE in November, 2018, and recognition of noncontrolling interest in BHGE in 2017, respectively. |
(f) | Included $(1,815) million deferred tax AOCI, primarily related to benefit plans $(1,740) million, reclassified to retained earnings for stranded tax effects as a result of adoption of ASU 2018-02 in 2018. |
(g) | Included $(1,696) million loss recorded in Other Capital from the sale of 12.1% economic interest in BHGE in November 2018. |
(h) | January 1, 2018 amount has been adjusted to reflect retrospective adoption of ASC 606 $(8,061) million and preferable accounting change from LIFO to FIFO $(377) million. |
(i) | Amount of redemption value adjustment on redeemable noncontrolling interest shown net of deferred taxes. |
(j) | On January 1, 2018, we adopted several new accounting standards on a modified retrospective basis. Cumulative impact of these changes was recorded in the opening retained earnings and it increased our retained earnings by $446 million, primarily due to an increase of $410 million related to ASU 2016-16. In the fourth quarter of 2018, we adopted ASU 2018-02 and reclassified $1,815 stranded tax effects from the Tax Cuts and Jobs act on AOCI to retained earnings. See Note 1 for further information. |
COMMON SHARES ISSUES AND OUTSTANDING December 31 (In thousands) | 2018 | 2017 | 2016 |
Issued | 11,693,841 | 11,693,841 | 11,693,841 |
In treasury | (2,991,614) | (3,013,270) | (2,951,227) |
Outstanding | 8,702,227 | 8,680,571 | 8,742,614 |
CHANGES TO NONCONTROLLING INTERESTS (In millions) | 2018 | 2017 | 2016 | ||||||
Balance at January 1 | $ | 17,468 | $ | 1,663 | $ | 1,864 | |||
Net earnings (loss) | 203 | (47 | ) | (46 | ) | ||||
Dividends | (362 | ) | (222 | ) | (72 | ) | |||
Other (including AOCI)(a)(b)(c)(d) | 3,191 | 16,072 | (83 | ) | |||||
Balance at December 31(e) | $ | 20,500 | $ | 17,468 | $ | 1,663 |
(a) | Included impact of AOCI, acquisitions, dispositions and BHGE stock repurchases. |
(b) | Included $16,238 million related to BHGE transaction in 2017. |
(c) | Included $155 million related to Arcam AB acquisition in our Aviation segment in 2016. |
(d) | 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 in 2016. |
(e) | Included $19,239 million and $15,836 million attributable to the BHGE Class A Shareholders at December 31, 2018 and 2017, respectively. |
CHANGES TO REDEEMABLE NONCONTROLLING INTERESTS (In millions) | 2018 | 2017 | 2016 | ||||||
Balance at January 1 | $ | 3,391 | $ | 3,017 | $ | 2,962 | |||
Net earnings (loss) | (291 | ) | (320 | ) | (243 | ) | |||
Dividends | (19 | ) | (62 | ) | (17 | ) | |||
Redemption value adjustment | 408 | 419 | 267 | ||||||
Other(a)(b)(c) | (3,106 | ) | 337 | 49 | |||||
Balance at December 31 | $ | 382 | $ | 3,391 | $ | 3,017 |
(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) | In 2018, included $(3,105) million to acquire Alstom’s interest in joint ventures described above. |
UNRECOGNIZED TAX BENEFITS December 31 (Dollars in millions) | 2018 | 2017 | ||||
Unrecognized tax benefits | $ | 5,563 | $ | 5,449 | ||
Portion that, if recognized, would reduce tax expense and effective tax rate(a) | 4,265 | 3,626 | ||||
Accrued interest on unrecognized tax benefits | 934 | 810 | ||||
Accrued penalties on unrecognized tax benefits | 182 | 158 | ||||
Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months | 0-1,300 | 0-1,100 | ||||
Portion that, if recognized, would reduce tax expense and effective tax rate(a) | 0-1,200 | 0-900 |
(a) | Some portion of such reduction may be reported as discontinued operations. |
ASSETS AND LIABILITIES | GE Capital | ||||||||||||||
OF CONSOLIDATED VIES | Customer | Trade | |||||||||||||
(In millions) | GE | Notes receivables(a) | receivables(b) | Other(c) | Total | ||||||||||
December 31, 2018 | |||||||||||||||
Assets | |||||||||||||||
Financing receivables, net | $ | — | $ | — | $ | 1,774 | $ | 930 | $ | 2,704 | |||||
Current receivables | 129 | 366 | — | — | 496 | ||||||||||
Investment securities | 35 | — | — | — | 35 | ||||||||||
Other assets | 593 | 830 | — | 944 | 2,367 | ||||||||||
Total | $ | 756 | $ | 1,197 | $ | 1,774 | $ | 1,874 | $ | 5,601 | |||||
Liabilities | |||||||||||||||
Borrowings | $ | 44 | $ | — | $ | — | $ | 806 | $ | 850 | |||||
Non-recourse borrowings | — | 534 | 1,341 | — | 1,875 | ||||||||||
Other liabilities | 342 | 546 | 423 | 490 | 1,801 | ||||||||||
Total | $ | 386 | $ | 1,079 | $ | 1,765 | $ | 1,296 | $ | 4,526 | |||||
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 |
(a) | Two funding entities were established to purchase customer notes receivable from GE, one of which is partially funded by third-party debt. |
(b) | On September 28, 2018, GE Capital entered a new $1,500 million current receivables facility with an alternative funding vehicle that it controlled. This facility, which will expire in eighteen months, unless extended, is a pan-European multi-jurisdiction, multi-currency revolving receivables facility. The alternative funding vehicle purchases GE current receivables on a daily basis and issues non-recourse debt to third-party banks to fund its purchases. GE Capital consolidates the entity because it services the purchased current receivables. |
(c) | In January 2018, ownership of the equity shares of Electric Insurance Company (EIC) were distributed to GE Capital by a bankruptcy trustee. We have previously reported EIC as a VIE because we received a 100% beneficial interest in the assets, liabilities and operations of EIC, related to an interim distribution in 2001. As EIC is now a consolidated voting interest entity we removed EIC from our VIE disclosure. In 2017, $1,470 million of assets and $959 million of liabilities were included related to EIC. |