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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

(BENEFIT) PROVISION FOR INCOME TAXES

(In millions)		2014		2013		2012

GE
Current tax expense	$	2,110	$	4,239	$	2,307
Deferred tax expense (benefit) from temporary differences		(476)		(2,571)		(294)
		1,634		1,668		2,013
GECC
Current tax expense (benefit)		727		454		1,597
Deferred tax expense (benefit) from temporary differences		(853)		(910)		(1,084)
		(126)		(456)		513
Consolidated
Current tax expense		2,837		4,693		3,904
Deferred tax expense (benefit) from temporary differences		(1,329)		(3,481)		(1,378)
Total	$	1,508	$	1,212	$	2,526

CONSOLIDATED EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

(In millions)		2014		2013		2012

U.S. earnings	$	5,107	$	6,207	$	7,682
Non-U.S. earnings		9,047		7,216		6,879
Total	$	14,154	$	13,423	$	14,561

CONSOLIDATED (BENEFIT) PROVISION FOR INCOME TAXES

(In millions)			2014		2013		2012

U.S. Federal
	Current(a)	$	442	$	1,214	$	2,017
	Deferred		(71)		(2,375)		(1,417)
Non - U.S.
	Current		2,525		3,336		1,672
	Deferred		(1,067)		(1,132)		193
Other			(321)		169		61
Total		$	1,508	$	1,212	$	2,526

(a) Includes the benefit from GECC deductions and credits applied against GE’s current U.S. tax expense.

Reconciliation of Unrecognized Tax Benefits

UNRECOGNIZED TAX BENEFITS RECONCILIATION

(In millions)		2014		2013

Balance at January 1,	$	5,816	$	5,445
Additions for tax positions of the current year		234		771
Additions for tax positions of prior years		673		872
Reductions for tax positions of prior years		(761)		(1,140)
Settlements with tax authorities		(305)		(98)
Expiration of the statute of limitations		(38)		(34)
Balance at December 31	$	5,619	$	5,816

Unrecognized tax benefits

UNRECOGNIZED TAX BENEFITS

December 31 (In millions)	2014		2013

Unrecognized tax benefits	$	5,619	$	5,816
Portion that, if recognized, would reduce tax expense and effective tax rate(a)		4,059		4,307
Accrued interest on unrecognized tax benefits		807		975
Accrued penalties on unrecognized tax benefits		103		164
Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months		0-900		0-900
Portion that, if recognized, would reduce tax expense and effective tax rate(a)		0-300		0-350

(a) Some portion of such reduction may be reported as discontinued operations.

Reconciliation of Income Tax Rate

RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO ACTUAL INCOME TAX RATE

	Consolidated						GE						GECC
	2014		2013		2012		2014		2013		2012		2014		2013		2012


U.S. federal statutory income tax rate	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%
Increase (reduction) in rate resulting from
inclusion of after-tax earnings of GECC in
before-tax earnings of GE	-		-		-		(11.2)		(12.6)		(11.3)		-		-		-
Tax on global activities including exports(a)	(17.6)		(19.3)		(8.8)		(9.4)		(5.1)		(5.1)		(25.3)		(41.0)		(11.1)
U.S. business credits(b)	(2.4)		(3.3)		(2.1)		(0.8)		(1.8)		(0.8)		(5.1)		(4.3)		(3.7)
Business Property disposition	-		-		(2.3)		-		-		-		-		-		(6.5)
All other – net	(4.3)		(3.4)		(4.5)		(2.0)		(3.4)		(3.4)		(7.4)		0.4		(3.7)
	(24.3)		(26.0)		(17.7)		(23.4)		(22.9)		(20.6)		(37.8)		(44.9)		(25.0)
Actual income tax rate	10.7	%	9.0	%	17.3	%	11.6	%	12.1	%	14.4	%	(2.8)	%	(9.9)	%	10.0	%

Included (2.1)% and (6.4)% in consolidated and GECC, respectively, related to the sale of GEMB-Nordic in 2014 and (7.3)% and (21.2)% in consolidated and GECC, respectively, related to the sale of 68.5% of our Swiss consumer finance bank, Cembra Money Bank AG (Cembra), through an initial public offering in 2013. Also included 1.9% in both consolidated and GE related to repatriation of prior years’ non-U.S. earnings in 2013.
U.S. general business credits, primarily the credit for manufacture of energy efficient appliances, the credit for energy produced from renewable sources, the advanced energy project credit, the low-income housing credit and the credit for research performed in the U.S.

Schedule of Deferred Tax Assets and Liabilities

December 31 (In millions)		2014		2013

Assets
GE	$	19,942	$	15,284
GECC		9,113		8,714
		29,055		23,998
Liabilities
GE		(11,170)		(10,223)
GECC		(12,533)		(11,771)
		(23,703)		(21,994)
Net deferred income tax asset (liability)	$	5,352	$	2,004

COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY)

December 31 (In millions)		2014		2013

GE
Principal pension plans	$	7,859	$	3,436
Provision for expenses(a)		6,192		5,934
Retiree insurance plans		3,462		3,154
Non-U.S. loss carryforwards(b)		738		874
Contract costs and estimated earnings		(3,996)		(3,550)
Intangible assets		(2,364)		(2,268)
Depreciation		(1,226)		(1,079)
Investment in global subsidiaries		(979)		(1,077)
Other – net		(914)		(363)
		8,772		5,061
GECC
Operating leases		(3,748)		(3,776)
Financing leases		(1,898)		(1,791)
Intangible assets		(855)		(947)
Net unrealized gains (losses) on securities		(544)		(154)
Cash flow hedges		(80)		(108)
Non-U.S. loss carryforwards(b)		3,008		2,534
Allowance for losses		1,455		1,392
Investment in global subsidiaries		1,750		1,764
Other – net		(2,508)		(1,971)
		(3,420)		(3,057)
Net deferred income tax asset (liability)	$	5,352	$	2,004

(a) Represented the tax effects of temporary differences related to expense accruals for a wide variety of items, such as employee compensation and benefits, other pension plan liabilities, interest on tax liabilities, product warranties and other sundry items that are not currently deductible.

(b) Net of valuation allowances of $2,015 million and $2,089 million for GE and $430 million and $409 million for GECC, for 2014 and 2013, respectively. Of the net deferred tax asset as of December 31, 2014, of $3,746 million, $38 million relates to net operating loss carryforwards that expire in various years ending from December 31, 2015 through December 31, 2017; $75 million relates to net operating losses that expire in various years ending from December 31, 2018 through December 31, 2034 and $3,633 million relates to net operating loss carryforwards that may be carried forward indefinitely.