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Shareowners' Equity
 9 Months Ended
Sep. 30, 2016
Stockholders' Equity Note [Abstract]  
Shareowners' Equity

NOTE 12. SHAREOWNERS’ EQUITY

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Three months ended September 30Nine months ended September 30
(In millions)2016201520162015
Investment securities
Beginning balance $1,077$564$460$1,013
Other comprehensive income (loss) (OCI) before reclassifications –
net of deferred taxes of $48, $14, $352 and $(196)9722675(382)
Reclassifications from OCI – net of deferred taxes
of $5, $(20), $36 and $(45)1(26)40(70)
Other comprehensive income (loss)(a)97(3)715(452)
Less OCI attributable to noncontrolling interests(2)-(1)-
Ending balance $1,176$561$1,176$561
Currency translation adjustments (CTA)
Beginning balance $(5,448)$(5,913)$(5,499)$(2,428)
OCI before reclassifications – net of deferred taxes
of $5, $(185), $222 and $1,158(280)(108)(138)(3,936)
Reclassifications from OCI – net of deferred taxes
of $(6), $(628), $74 and $(779)8573311,039
Other comprehensive income (loss)(a)(194)624(138)(2,895)
Less OCI attributable to noncontrolling interests-(8)6(43)
Ending balance $(5,643)$(5,281)$(5,643)$(5,281)
Cash flow hedges
Beginning balance $(51)$(140)$(80)$(180)
OCI before reclassifications – net of deferred taxes
of $(12), $(28), $(17) and $(24)(21)(133)(61)(626)
Reclassifications from OCI – net of deferred taxes
of $6, $11, $7 and $595298121632
Other comprehensive income (loss)(a)30(35)606
Less OCI attributable to noncontrolling interests----
Ending balance $(21)$(174)$(21)$(174)
Benefit plans
Beginning balance $(10,476)$(12,716)$(11,410)$(16,578)
Prior service credit (costs) - net of deferred taxes
of $0, $0, $5 and $1,194--232,090
Net actuarial gain (loss) – net of deferred taxes
of $49, $0, $6 and $269834371602
Net curtailment/settlement - net of deferred taxes
of $0, $0, $0 and $(44)--(1)(77)
Prior service cost amortization – net of deferred taxes
of $22, $17, $63 and $9212-45101
Net actuarial loss amortization – net of deferred taxes
of $216, $297, $649 and $9024535841,3431,771
Other comprehensive income (loss)(a)5486271,4814,486
Less OCI attributable to noncontrolling interests6-5(2)
Ending balance $(9,934)$(12,089)$(9,934)$(12,089)
Accumulated other comprehensive income (loss) at September 30$(14,422)$(16,983)$(14,422)$(16,983)

(a) Total other comprehensive income (loss) was $481 million and $1,214 million in the three months ended September 30, 2016 and 2015, respectively and $2,117 million and $1,144 million in the nine months ended September 30, 2016 and 2015, respectively.

RECLASSIFICATION OUT OF AOCI
Three months endedNine months ended
September 30September 30
(In millions)2016201520162015Statement of earnings caption
Available-for-sale securities
Realized gains (losses) on
sale/impairment of securities$(6)$45$(76)$116Total revenues and other income(a)
Income taxes5(20)36(45)Benefit (provision) for income taxes(b)
Net of tax$(1)$26$(40)$70
Currency translation adjustments
Gains (losses) on dispositions$(79)$(104)$(74)$(260)Total revenues and other income(c)
Income taxes(6)(628)74(779)Benefit (provision) for income taxes(d)
Net of tax$(85)$(733)$(1)$(1,039)
Cash flow hedges
Gains (losses) on interest rate
derivatives$(12)$(39)$(67)$(100)Interest and other financial charges
Foreign exchange contracts(43)(72)(47)(600)(e)
Other(3)2(14)9(f)
Total before tax(57)(109)(128)(691)
Income taxes611759Benefit (provision) for income taxes
Net of tax$(52)$(98)$(121)$(632)
Benefit plan items
Curtailment gain (loss)$-$-$1$121(g)
Amortization of prior service costs(34)(17)(108)(193)(g)
Amortization of actuarial gains (losses)(669)(881)(1,992)(2,673)(g)
Total before tax(703)(898)(2,099)(2,745)
Income taxes238314712950Benefit (provision) for income taxes
Net of tax$(465)$(584)$(1,387)$(1,795)
Total reclassification adjustments (net of tax)$(602)$(1,389)$(1,548)$(3,396)

  • Included an insignificant amount and $29 million for the three months ended September 30, 2016 and 2015, and $(72) million and $49 million for the nine months ended September 30, 2016 and 2015, respectively in earnings (loss) from discontinued operations, net of taxes.
  • Included $3 million and $(15) million for the three months ended September 30, 2016 and 2015, and $34 million and $(21) million for the nine months ended September 30, 2016 and 2015, respectively in earnings (loss) from discontinued operations, net of taxes.
  • Included $(79) million and $(104) million for the three months ended September 30, 2016 and 2015, and $(8) million and $(261) million for the nine months ended September 30, 2016 and 2015, respectively in earnings (loss) from discontinued operations, net of taxes.
  • Included $(7) million and $(628) million for the three months ended September 30, 2016 and 2015, and $73 million and $(779) million for the nine months ended September 30, 2016 and 2015, respectively in earnings (loss) from discontinued operations, net of taxes
  • Included $(30) million and $(47) million in GE Capital revenues from services and $(13) million and $(25) million in interest and other financial charges in the three months ended September 30, 2016 and 2015, respectively and $1 million and $(587) million in GE Capital revenues from services and $(48) million and $(13) million in interest and other financial charges in the nine months ended September 30, 2016 and 2015, respectively.
  • Primarily recorded in costs and expenses.
  • Curtailment gain (loss), amortization of prior service costs and actuarial gains and losses out of AOCI are included in the computation of net periodic pension costs. See Note 10 for further information.

SHARES OF GE PREFERRED STOCK

At December 31, 2014 GECC had outstanding 50,000 shares of non-cumulative A, B and C Series perpetual preferred stock at an average dividend rate of 6.44% with a face value of $5,000 million. In connection with the GE Capital Exit Plan, on December 3, 2015, these shares were converted into a corresponding Series A, B, and C of fixed-to-floating rate non-cumulative perpetual preferred stock issued by GE with face value of $2,778 million, $2,073 million, $1,094 million, respectively, for a cumulative face value of $5,944 million and an initial average fixed dividend rate of 4.07%. The incremental shares were issued in order to compensate preferred holders for the lower dividend rate. Subsequent to the issuance of the preferred stock on December 3, 2015, in response to investor feedback, GE launched an exchange offer on December 18, 2015 that allowed GE preferred stock investors to exchange their existing Series A, B and C preferred stock into a Series D GE preferred stock. These Series D instruments bear an initial fixed interest rate of 5.00% through January 21, 2021, will bear a floating rate equal to three-month LIBOR plus 3.33% thereafter and are callable on January 21, 2021. On January 20, 2016, $2,687 million of Series A, $2,008 million of Series B and $999 million of Series C were exchanged into $5,694 million Series D GE preferred stock. In addition to interim dividends and accretion of $122 million, a deemed dividend of $232 million was recorded in the nine months ended September 30, 2016, $195 million for the amount by which the fair value of the Series D GE preferred stock exceeded the fair value of the original GECC Series A, B and C preferred stock, and a cash payment of $37 million paid to the GE Series A and B preferred stockholders who exchanged into the Series D GE preferred stock. Post exchange, $91 million of Series A, $64 million of Series B and $95 million of Series C GE preferred stock remain outstanding. The carrying value of the GE preferred stock at September 30, 2016 was $5,250 million and will increase to $5,944 million through periodic accretion to the respective call dates of each series. Principal and accretion for the preferred stock is recorded in other capital in the consolidated Statement of Financial Position and dividends and accretion are presented under the caption “Preferred stock dividends” in the Statement of Earnings (Loss). Dividends on GE preferred stock are payable semi-annually, in June and December and accretion is recorded on a quarterly basis.

In conjunction with the exchange of the GE Capital preferred stock into GE preferred stock and the exchange of Series A, B and C preferred stock into Series D preferred stock, GE Capital issued preferred stock to GE for which the amount and terms mirror the GE preferred stock held by external investors ($5,250 million carrying value at September 30, 2016).

Noncontrolling Interests

Noncontrolling interests in equity of consolidated affiliates includes common shares in consolidated affiliates and preferred stock issued by our affiliates.

CHANGES TO NONCONTROLLING INTERESTS
Three months ended September 30Nine months ended September 30
(In millions)2016201520162015
Beginning balance$1,693$8,776$1,864$8,674
Net earnings (loss)639(62)232
GECC preferred stock dividend---(161)
Dividends(25)(18)(47)(36)
Dispositions(53)(3)(94)(9)
Other (including AOCI)(a)(b)42(6)188
Ending balance$1,663$8,788$1,663$8,788

(a) Includes research & development partner funding arrangements, acquisitions and eliminations.

(b) Includes $(123) million for deconsolidation of investment funds managed by GE Asset Management (GEAM) upon the adoption of ASU 2015-02, Amendments to the Consolidation Analysis. See Note 1.

The ending balance for the period ended September 30, 2015 included $4,949 million related to GECC Series A, B and C preferred stock. In connection with the reorganization of the GE Capital businesses, original GECC preferred stock was converted to preferred stock issued by GE in the fourth quarter of 2015, and accordingly GE preferred stock is reflected in shareowners’ equity in the consolidated Statement of Financial Position. There was no dividend on GECC preferred stock in the three months ended September 30, 2015. The dividend on GECC preferred stock was $161 million in the nine months ended September 30, 2015. In addition, the ending balance for the period ended September 30, 2015 also included $2,790 million related to Synchrony Financial, which was eliminated as part of the split-off of Synchrony Financial from GE in the fourth quarter of 2015.

redeemable noncontrolling interest

Redeemable noncontrolling interest presented in our statement of financial position includes common shares issued by our affiliates that are redeemable at the option of the holder of those interests.

As part of the Alstom acquisition, we formed three joint ventures in which the noncontrolling interests hold certain redemption rights. These joint ventures and the associated redemption rights are discussed in Note 7. Our retained earnings will be adjusted for subsequent changes in the redemption value of the noncontrolling interest in these entities to the extent that the redemption value exceeds the carrying amount of the noncontrolling interest.

Three months ended September 30Nine months ended September 30
(In millions)2016201520162015
Beginning balance$3,070$79$2,972$98
Net earnings (loss)(82)-(221)(3)
Dividends(8)-(17)(11)
Redemption value adjustment68-1781
Other33138(4)
Ending balance $3,051$82$3,051$82

Other

During the first nine months of 2016, we repurchased $18,144 million of our common stock, including $9,125 million repurchased under the accelerated share repurchase (ASR) agreements.

In September 2016, we entered into an ASR agreement with a financial institution which allowed us to repurchase GE common stock at a price below its volume weighted-average price during a given period. During the third quarter, we paid $2,500 million and received and classified as treasury shares an initial delivery of 71,189,280 shares based on then-current market prices. The payment was recorded as a reduction to shareowners’ equity, consisting of a $2,125 million increase in treasury stock, which reflects the value of the shares received upon initial delivery, and a $375 million decrease in other capital, which reflects the value of the stock held back pending final delivery. In the fourth quarter of 2016, we received the remaining 14,758,566 shares based on the final volume weighted-average price less the negotiated discount.

We accounted for the ASR as two separate transactions: (i) 71,189,280 shares of common stock initially delivered to GE and $2,125 million was accounted for as a treasury stock transaction and (ii) the unsettled contract of $375 million was determined to be a forward contract indexed to GE’s own common stock. The initial delivery of 71,189,280 shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. GE has determined that the forward contract, indexed to its own common stock, met all the criteria for equity classification.

In the third quarter of 2016, we received the remaining 18,269,775 shares related to the ASR agreement entered in June 2016 based on the final volume weighted-average price less the negotiated discount.

Common dividends from GE Capital totaled $5,050 million and $16,050 million to GE in the three months ended September 30, 2016 and the nine months ended September 30, 2016, respectively. GE Capital did not pay any common dividends to GE in the three months ended September 30, 2015 and paid common dividends of $450 million to GE in the nine months ended September 30, 2015, respectively. Dividends on GE preferred stock totaled $33 million and $474 million, including cash dividends of $184 million to GE in the three months ended September 30, 2016 and the nine months ended September 30, 2016, respectively. There were no dividends on GE preferred stock in the three months ended and in the nine months ended September 30, 2015.