Guarantor Financial Information

9 Months Ended

Sep. 30, 2016

NOTE 18. GUARANTOR FINANCIAL INFORMATION

Guarantor and Non-Guarantor CONDENSED Consolidating Financial INFORMATION

On October 26, 2015, GE Capital International Funding Company Unlimited Company, formerly GE Capital International Funding Company (the Issuer), then a finance subsidiary of General Electric Capital Corporation, settled its previously announced private offers to exchange (the Exchange Offers) the Issuer’s new senior unsecured notes for certain outstanding debt securities of General Electric Capital Corporation.

The new notes that were issued were composed of $15.3 billion of 0.964% Six Month Notes due April 2016 (which have subsequently been repaid upon maturity), £0.8 billion of 1.363% Six Month Notes due April 2016 (which have subsequently been repaid upon maturity), $6.1 billion of 2.342% Notes due 2020, $2.0 billion of 3.373% Notes due 2025 and $11.5 billion of 4.418% Notes due 2035. These notes were fully and unconditionally, jointly and severally guaranteed by both the Company and GE Capital International Holdings Limited (GECIHL) (each a Guarantor, and together, the Guarantors).

Under the terms of a registration rights agreement entered into in connection with the Exchange Offers, the Issuer and the Company agreed to file a registration statement with the U.S. Securities and Exchange Commission (SEC) for an offer to exchange new senior notes of the Issuer registered with the SEC and guaranteed by the Guarantors for certain of the Issuer’s outstanding unregistered senior notes. This exchange was completed in July 2016.

Presentation

In connection with the registration of the senior notes, the Company is required to provide certain financial information regarding the Issuer and the Guarantors of the registered securities. Included are the Condensed Consolidating Statements of Earnings and Comprehensive Income for the three months ended September 30, 2016 and 2015 and nine months ended September 30, 2016 and 2015, Condensed Consolidating Statements of Financial Position as of September 30, 2016 and December 31, 2015 and Condensed Consolidating Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 for:

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. The equity basis earnings (losses) of subsidiaries are reflected in the captions “Equity in earnings (losses) of affiliates” and “Earnings (loss) from discontinued operations, net of tax”;
GE Capital International Funding Company Unlimited Company (the Subsidiary Issuer) – incorporated in May 2015 as a finance subsidiary for debt and reflects activity subsequent to the issuance of new notes on October 26, 2015;
GE Capital International Holdings Limited (GECIHL) (the Subsidiary Guarantor) - prepared with investments in non-guarantor subsidiaries accounted for under the equity method of accounting and reflects activity subsequent to the GE Capital Reorganization on December 3, 2015. The equity basis earnings (losses) of subsidiaries are reflected in the captions “Equity in earnings (losses) of affiliates” and “Earnings (loss) from discontinued operations, net of tax”;
Non-Guarantor Subsidiaries - prepared on an aggregated basis excluding any elimination or consolidation adjustments and includes predominantly all non-cash adjustments for cash flows;
Consolidating Adjustments - adjusting entries necessary to consolidate the Parent Company Guarantor with the Subsidiary Issuer, the Subsidiary Guarantor and Non-Guarantor Subsidiaries; and
Consolidated - prepared on a consolidated basis.

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016 (UNAUDITED)

		Parent						Non-
		Company		Subsidiary		Subsidiary		Guarantor		Consolidating
(in millions)		Guarantor		Issuer		Guarantor		Subsidiaries		Adjustments		Consolidated

Revenues and other income
Sales of goods and services	$	8,194	$	-	$	-	$	36,082	$	(17,462)	$	26,814
Other income		883		-		-		35,578		(36,234)		227
Equity in earnings (loss) of affiliates		1,788		-		428		29,804		(32,019)		-
GE Capital revenues from services		-		166		243		2,838		(1,023)		2,224
Total revenues and other income		10,865		166		671		104,302		(86,738)		29,266

Costs and expenses
Interest and other financial charges		1,166		138		525		856		(1,724)		961
Investment contracts, insurance losses and
insurance annuity benefits		-		-		-		701		(17)		684
Other costs and expenses		8,498		-		16		35,400		(18,367)		25,547
Total costs and expenses		9,664		138		541		36,957		(20,109)		27,191
Earnings (loss) from continuing
operations before income taxes		1,201		28		130		67,345		(66,630)		2,074
Benefit (provision) for income taxes		932		(3)		(11)		(951)		16		(18)
Earnings (loss) from continuing operations		2,132		24		119		66,395		(66,614)		2,056
Earnings (loss) from discontinued
operations, net of taxes		(105)		-		(552)		224		328		(105)
Net earnings (loss)		2,027		24		(433)		66,619		(66,286)		1,951
Less net earnings (loss) attributable to
noncontrolling interests		-		-		-		(51)		(25)		(76)
Net earnings (loss) attributable to
the Company		2,027		24		(433)		66,670		(66,262)		2,027
Other comprehensive income (loss)		477		-		51		(711)		661		477
Comprehensive income (loss) attributable
to the Company	$	2,504	$	24	$	(382)	$	65,959	$	(65,601)	$	2,504

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2015 (UNAUDITED)

		Parent						Non-
		Company		Subsidiary		Subsidiary		Guarantor		Consolidating
(in millions)		Guarantor		Issuer		Guarantor		Subsidiaries		Adjustments		Consolidated

Revenues and other income
Sales of goods and services	$	11,175	$	-	$	-	$	33,206	$	(18,854)	$	25,527
Other income		353		-		-		2,367		(2,550)		169
Equity in earnings (loss) of affiliates		2,152		-		-		126,207		(128,359)		-
GE Capital revenues from services		-		-		-		7,376		(5,044)		2,332
Total revenues and other income		13,680		-		-		169,155		(154,806)		28,028

Costs and expenses
Interest and other financial charges		805		-		-		2,251		(2,159)		897
Investment contracts, insurance losses and
insurance annuity benefits		-		-		-		717		(44)		673
Other costs and expenses		11,155		-		-		37,487		(24,233)		24,408
Total costs and expenses		11,960		-		-		40,455		(26,436)		25,978
Earnings (loss) from continuing
operations before income taxes		1,720		-		-		128,700		(128,370)		2,050
Benefit (provision) for income taxes		156		-		-		661		(952)		(135)
Earnings (loss) from continuing operations		1,876		-		-		129,362		(129,322)		1,915
Earnings (loss) from discontinued
operations, net of taxes		629		-		-		1,466		(1,466)		629
Net earnings (loss)		2,506		-		-		130,828		(130,789)		2,545
Less net earnings (loss) attributable to
noncontrolling interests		-		-		-		88		(49)		39
Net earnings (loss) attributable to
the Company		2,506		-		-		130,740		(130,740)		2,506
Other comprehensive income (loss)		1,221		-		-		175		(175)		1,221
Comprehensive income (loss) attributable
to the Company	$	3,727	$	-	$	-	$	130,915	$	(130,915)	$	3,727

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 (UNAUDITED)

		Parent						Non-
		Company		Subsidiary		Subsidiary		Guarantor		Consolidating
(in millions)		Guarantor		Issuer		Guarantor		Subsidiaries		Adjustments		Consolidated

Revenues and other income
Sales of goods and services	$	28,870	$	-	$	-	$	108,043	$	(56,757)	$	80,156
Other income		845		-		-		55,062		(52,522)		3,385
Equity in earnings (loss) of affiliates		7,923		-		1,093		58,732		(67,747)		-
GE Capital revenues from services		-		762		1,262		9,182		(4,144)		7,063
Total revenues and other income		37,638		762		2,355		231,019		(181,170)		90,604

Costs and expenses
Interest and other financial charges		2,828		685		2,133		4,027		(5,651)		4,023
Investment contracts, insurance losses and
insurance annuity benefits		-		-		-		2,188		(87)		2,101
Other costs and expenses		30,555		-		71		108,537		(60,819)		78,344
Total costs and expenses		33,383		686		2,204		114,752		(66,558)		84,467
Earnings (loss) from continuing
operations before income taxes		4,255		76		150		116,267		(114,612)		6,137
Benefit (provision) for income taxes		1,862		(10)		(58)		(1,908)		(189)		(302)
Earnings (loss) from continuing operations		6,118		67		93		114,359		(114,801)		5,835
Earnings (loss) from discontinued
operations, net of taxes		(954)		-		(1,547)		398		1,149		(954)
Net earnings (loss)		5,164		67		(1,455)		114,757		(113,652)		4,881
Less net earnings (loss) attributable to
noncontrolling interests		-		-		-		(143)		(140)		(283)
Net earnings (loss) attributable to
the Company		5,164		67		(1,455)		114,900		(113,512)		5,164
Other comprehensive income (loss)		2,107		(12)		114		136		(238)		2,107
Comprehensive income (loss) attributable
to the Company	$	7,271	$	55	$	(1,341)	$	115,036	$	(113,750)	$	7,271

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 (UNAUDITED)

		Parent						Non-
		Company		Subsidiary		Subsidiary		Guarantor		Consolidating
(in millions)		Guarantor		Issuer		Guarantor		Subsidiaries		Adjustments		Consolidated

Revenues and other income
Sales of goods and services	$	32,310	$	-	$	-	$	97,982	$	(55,026)	$	75,266
Other income		765		-		-		6,766		(6,439)		1,092
Equity in earnings (loss) of affiliates		1,068		-		-		141,183		(142,251)		-
GE Capital revenues from services		-		-		-		25,000		(17,863)		7,136
Total revenues and other income		34,143		-		-		270,930		(221,579)		83,494

Costs and expenses
Interest and other financial charges		2,374		-		-		6,898		(7,045)		2,228
Investment contracts, insurance losses and
insurance annuity benefits		-		-		-		2,070		(128)		1,942
Other costs and expenses		34,174		-		-		116,287		(77,420)		73,041
Total costs and expenses		36,549		-		-		125,255		(84,592)		77,211
Earnings (loss) from continuing
operations before income taxes		(2,406)		-		-		145,675		(136,987)		6,283
Benefit (provision) for income taxes		1,228		-		-		(9,266)		811		(7,227)
Earnings (loss) from continuing operations		(1,178)		-		-		136,409		(136,176)		(945)
Earnings (loss) from discontinued
operations, net of taxes		(11,249)		-		-		(1,226)		1,222		(11,253)
Net earnings (loss)		(12,427)		-		-		135,182		(134,953)		(12,198)
Less net earnings (loss) attributable to
noncontrolling interests		-		-		-		285		(56)		229
Net earnings (loss) attributable to
the Company		(12,427)		-		-		134,897		(134,897)		(12,427)
Other comprehensive income (loss)		1,189		-		-		(3,610)		3,610		1,189
Comprehensive income (loss) attributable
to the Company	$	(11,238)	$	-	$	-	$	131,288	$	(131,288)	$	(11,238)

CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION
SEPTEMBER 30, 2016 (UNAUDITED)

		Parent						Non-
		Company		Subsidiary		Subsidiary		Guarantor		Consolidating
(In millions)		Guarantor		Issuer		Guarantor		Subsidiaries		Adjustments	Consolidated

Assets
Cash and equivalents	$	2,344	$	-	$	3	$	53,095	$	(2,913)	$	52,530
Investment securities		2		-		-		51,943		(5,576)		46,369
Receivables - net		63,057		17,295		31,971		73,689		(142,660)		43,351
Inventories		5,085		-		-		22,080		(3,049)		24,116
Property, plant and equipment - net		5,607		-		-		47,128		(1,282)		51,453
Investment in subsidiaries(a)		275,823		-		77,814		479,809		(833,446)		-
Goodwill and intangible assets		7,987		-		-		55,877		22,902		86,767
All other assets		13,491		1,502		554		209,173		(172,543)		52,178
Assets of discontinued operations		-		-		-		-		30,930		30,930
Total assets	$	373,397	$	18,797	$	110,341	$	992,795	$	(1,107,637)	$	387,694

Liabilities and equity
Short-term borrowings	$	161,873	$	1	$	43,258	$	35,032	$	(208,593)	$	31,571
Accounts payable		3,405		-		-		38,742		(29,080)		13,067
Other current liabilities		11,900		31		69		25,671		380		38,051
Long-term and non-recourse borrowings		72,304		18,315		37,400		79,624		(89,782)		117,861
All other liabilities		42,033		269		725		58,203		(10,464)		90,765
Liabilities of discontinued operations		-		-		-		-		9,782		9,782
Total Liabilities		291,515		18,615		81,452		237,272		(327,756)		301,098

Redeemable noncontrolling interests		-		-		-		2,309		742		3,051

GE shareowners' equity		81,882		182		28,889		751,448		(780,519)		81,882
Noncontrolling interests		-		-		-		1,766		(103)		1,663
Total equity		81,882		182		28,889		753,214		(780,622)		83,544
Total liabilities, redeemable
noncontrolling interests and equity	$	373,397	$	18,797	$	110,341	$	992,795	$	(1,107,637)	$	387,694

(a) Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of $25.9 billion and net assets of discontinued operations of $21.6 billion.

CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2015

		Parent						Non-
		Company		Subsidiary		Subsidiary		Guarantor		Consolidating
(In millions)		Guarantor		Issuer		Guarantor		Subsidiaries		Adjustments	Consolidated

Assets
Cash and equivalents	$	4,137	$	-	$	-	$	86,955	$	(20,609)	$	70,483
Investment securities		14		-		-		40,886		(8,927)		31,973
Receivables - net		88,696		33,232		69,306		75,909		(221,286)		45,856
Inventories		5,447		-		-		19,762		(2,694)		22,515
Property, plant and equipment - net		6,540		-		-		56,808		(9,253)		54,095
Investment in subsidiaries(a)		274,471		-		78,505		405,686		(758,662)		-
Goodwill and intangible assets		7,793		-		-		61,412		14,118		83,323
All other assets		15,732		11		915		247,611		(200,392)		63,876
Assets of discontinued operations		-		-		-		-		120,951		120,951
Total assets	$	402,828	$	33,242	$	148,725	$	995,029	$	(1,086,754)	$	493,071

Liabilities and equity
Short-term borrowings	$	145,051	$	16,204	$	71,862	$	60,601	$	(243,858)	$	49,860
Accounts payable		6,096		-		-		37,636		(30,052)		13,680
Other current liabilities		14,482		(1)		17		34,903		(7,860)		41,540
Long-term and non-recourse borrowings		97,471		16,423		46,392		105,801		(118,345)		147,742
All other liabilities		41,455		489		224		57,996		(9,514)		90,651
Liabilities of discontinued operations		-		-		-		-		46,487		46,487
Total Liabilities		304,555		33,115		118,495		296,937		(363,141)		389,961

Redeemable noncontrolling interests		-		-		-		2,888		84		2,972

GE shareowners' equity		98,274		127		30,230		693,589		(723,946)		98,274
Noncontrolling interests		-		-		-		1,616		248		1,864
Total equity		98,274		127		30,230		695,204		(723,697)		100,138
Total liabilities, redeemable
noncontrolling interests and equity	$	402,828	$	33,242	$	148,725	$	995,029	$	(1,086,754)	$	493,071

(a) Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of $40.1 billion and net assets of discontinued operations of $58.6 billion.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2016 (UNAUDITED)

		Parent						Non-
		Company		Subsidiary		Subsidiary		Guarantor		Consolidating
(In millions)		Guarantor		Issuer		Guarantor		Subsidiaries		adjustments		Consolidated

Cash flows – operating activities
Cash from (used for) operating activities -
continuing operations	$	(14,847)	$	175	$	(121)	$	83,404	$	(64,766)	$	3,846
Cash from (used for) operating activities -
discontinued operations		(954)		-		-		(4,366)		(399)		(5,719)
Cash from (used for) operating activities		(15,801)		175		(121)		79,038		(65,165)		(1,873)

Cash flows – investing activities
Cash from (used for) investing activities –
continuing operations		20,902		16,080		36,317		32,000		(51,740)		53,559
Cash from (used for) investing activities –
discontinued operations		-		-		-		(12,056)		-		(12,056)
Cash from (used for) investing activities		20,902		16,080		36,317		19,944		(51,740)		41,503

Cash flows – financing activities
Cash from (used for) financing activities –
continuing operations		(6,894)		(16,255)		(36,194)		(150,446)		134,601		(75,188)
Cash from (used for) financing activities –
discontinued operations		-		-		-		295		-		295
Cash from (used for) financing activities		(6,894)		(16,255)		(36,194)		(150,151)		134,601		(74,893)
Effect of currency exchange rate changes
on cash and equivalents		-		-		-		(169)		-		(169)
Increase (decrease) in cash and equivalents		(1,792)		-		3		(51,339)		17,696		(35,432)
Cash and equivalents at beginning of year		4,137		-		-		107,350		(20,609)		90,878
Cash and equivalents at September 30		2,344		-		3		56,011		(2,913)		55,445
Less cash and equivalents of discontinued
operations at September 30		-		-		-		2,915		-		2,915
Cash and equivalents of continuing operations
at September 30	$	2,344	$	-	$	3	$	53,095	$	(2,913)	$	52,530

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2015 (UNAUDITED)

		Parent						Non-
		Company		Subsidiary		Subsidiary		Guarantor		Consolidating
(In millions)		Guarantor		Issuer		Guarantor		Subsidiaries		adjustments		Consolidated

Cash flows – operating activities
Cash from (used for) operating activities -
continuing operations	$	(5,898)	$	-	$	-	$	176,052	$	(164,710)	$	5,444
Cash from (used for) operating activities -
discontinued operations		(11,249)		-		-		17,729		1,222		7,702
Cash from (used for) operating activities		(17,147)		-		-		193,781		(163,488)		13,146

Cash flows – investing activities
Cash from (used for) investing activities –
continuing operations		24,884		-		-		(93,930)		128,512		59,466
Cash from (used for) investing activities –
discontinued operations		-		-		-		305		-		305
Cash from (used for) investing activities		24,884		-		-		(93,625)		128,512		59,771

Cash flows – financing activities
Cash from (used for) financing activities –
continuing operations		(9,693)		-		-		(46,188)		8,324		(47,556)
Cash from (used for) financing activities –
discontinued operations		-		-		-		(2,250)		-		(2,250)
Cash from (used for) financing activities		(9,693)		-		-		(48,438)		8,324		(49,807)
Effect of currency exchange rate changes
on cash and equivalents		-		-		-		(3,516)		-		(3,516)
Increase (decrease) in cash and equivalents		(1,956)		-		-		48,201		(26,651)		19,594
Cash and equivalents at beginning of year		4,820		-		-		88,216		(2,020)		91,016
Cash and equivalents at September 30		2,864		-		-		136,417		(28,671)		110,610
Less cash and equivalents of discontinued
operations at September 30		-		-		-		26,743		-		26,743
Cash and equivalents of continuing operations
at September 30	$	2,864	$	-	$	-	$	109,674	$	(28,671)	$	83,867