EX-99 2 ge8ker4q2016ex99.htm
Exhibit 99


 
 
 
 
 

 

 
 

GENERAL ELECTRIC COMPANY
                                       
CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED)
                   
                                         
 
Consolidated
   
GE(a)
   
Financial Services (GE Capital)
Three months ended December 31
2016
2015
 
V%
   
2016
2015
 
V%
2016
2015
 
V%
                                         
Revenues and other income
                                       
Sales of goods and services
$
30,234
$
30,543
 
(1)%
   
$
30,345
$
30,614
 
(1)%
$
27
$
15
 
80%
Other income
 
619
 
1,135
         
733
 
1,143
     
-
 
-
   
GE Capital earnings (loss) from continuing operations
 
-
 
-
         
215
 
(1,465)
     
-
 
-
   
GE Capital revenues from services
 
2,235
 
2,214
         
-
 
-
     
2,622
 
2,570
   
   Total revenues and other income
 
33,088
 
33,892
 
(2)%
     
31,294
 
30,292
 
3%
 
2,649
 
2,585
 
2%
Costs and expenses
                                       
Cost of sales
 
23,773
 
23,584
         
23,318
 
23,058
     
593
 
612
   
Selling, general and administrative expenses
 
4,543
 
4,772
         
4,029
 
3,878
     
709
 
1,053
   
Interest and other financial charges
 
1,002
 
1,235
         
536
 
463
     
784
 
953
   
Investment contracts, insurance losses and
                                       
   insurance annuity benefits
 
696
 
663
         
-
 
-
     
674
 
676
   
Other costs and expenses
 
182
 
1,735
         
-
 
-
     
191
 
1,744
   
   Total costs and expenses
 
30,196
 
31,989
 
(6)%
     
27,883
 
27,399
 
2%
 
2,952
 
5,039
 
(41)%
Earnings (loss) from continuing operations
                                       
   before income taxes
 
2,893
 
1,903
 
52%
     
3,411
 
2,892
 
18%
 
(303)
 
(2,454)
 
88%
Benefit (provision) for income taxes
 
766
 
742
         
67
 
(204)
     
699
 
946
   
Earnings (loss) from continuing operations
 
3,659
 
2,645
 
38%
     
3,478
 
2,688
 
29%
 
396
 
(1,508)
 
F
Earnings (loss) from discontinued
                                       
   operations, net of taxes
 
-
 
3,758
         
4
 
3,716
     
(1)
 
3,764
   
Net earnings (loss)
 
3,659
 
6,403
 
(43)%
     
3,482
 
6,404
 
(46)%
 
396
 
2,257
 
(82)%
Less net earnings (loss) attributable to
                                       
   noncontrolling interests
 
(8)
 
103
         
(4)
 
121
     
(4)
 
(19)
   
Net earnings (loss) attributable to the Company
 
3,667
 
6,301
 
(42)%
     
3,486
 
6,283
 
(45)%
 
399
 
2,275
 
(82)%
Preferred stock dividends
 
(181)
 
(18)
         
-
 
-
     
(181)
 
(169)
   
Net earnings (loss) attributable to
                                       
   GE common shareowners
$
3,486
$
6,283
 
(45)%
   
$
3,486
$
6,283
 
(45)%
$
218
$
2,107
 
(90)%
Amounts attributable to GE common
                                       
   shareowners:
                                       
   Earnings (loss) from continuing operations
$
3,659
$
2,645
 
38%
   
$
3,478
$
2,688
 
29%
$
396
$
(1,508)
 
F
   Less net earnings (loss) attributable
                                       
     to noncontrolling interests, continuing operations
 
(5)
 
60
         
(4)
 
121
     
(1)
 
(61)
   
   Earnings (loss) from continuing operations
                                       
     attributable to the Company
 
3,664
 
2,585
 
42%
     
3,483
 
2,567
 
36%
 
397
 
(1,447)
 
F
   Preferred stock dividends
 
(181)
 
(18)
         
-
 
-
     
(181)
 
(169)
   
   Earnings (loss) from continuing operations
                                       
     attributable to GE common shareowners
 
3,483
 
2,567
 
36%
     
3,483
 
2,567
 
36%
 
215
 
(1,615)
 
F
   Earnings (loss) from discontinued
                                       
     operations, net of taxes
 
-
 
3,758
         
4
 
3,716
     
(1)
 
3,764
   
   Less net earnings (loss) attributable to
                                       
      noncontrolling interests, discontinued operations
 
(3)
 
43
         
-
 
-
     
(3)
 
43
   
Net earnings (loss) attributable to GE
                                       
   common shareowners
$
3,486
$
6,283
 
(45)%
   
$
3,486
$
6,283
 
(45)%
$
218
$
2,107
 
(90)%
       
             
#REF!
         
#REF!
   
Per-share amounts - earnings (loss) from
                                       
   continuing operations
                                       
Diluted earnings (loss) per share
$
0.39
$
0.26
 
50%
                           
Basic earnings (loss) per share
$
0.40
$
0.26
 
54%
                           
Per-share amounts - net earnings (loss)
                                       
Diluted earnings (loss) per share
$
0.39
$
0.64
 
(39)%
                           
Basic earnings (loss) per share
$
0.40
$
0.64
 
(38)%
                           
Total average equivalent shares
                                       
Diluted
 
8,901
 
9,821
 
(9)%
                           
Basic
 
8,795
 
9,745
 
(10)%
                           
Dividends declared per common share
$
0.24
$
0.23
 
4%
                           

(a)
Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis.


Amounts may not add due to rounding. Dollar amounts and share amounts in millions; per-share amounts in dollars.


"GE Capital" means GE Capital Global Holdings, LLC (GECGH) and its predecessor General Electric Capital Corporation (GECC) and all of their affiliates and associated companies. Separate information is shown for "GE" and "Financial Services (GE Capital)." Transactions between GE and GE Capital have been eliminated from the "Consolidated" column. See Note 1 to the 2015 consolidated financial statements at www.ge.com/ar2015 for further information about consolidation matters.
4

GENERAL ELECTRIC COMPANY
CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED)
 
 
Consolidated
   
GE(a)
Financial Services (GE Capital)
Twelve months ended December 31
2016
2015
 
V%
   
2016
2015
 
V%
2016
2015
 
V%
                                         
Revenues and other income
                                       
Sales of goods and services
$
110,391
$
105,808
 
4%
   
$
110,835
$
106,206
 
4%
$
115
$
79
 
46%
Other income
 
4,005
 
2,227
         
4,092
 
2,165
     
-
 
-
   
GE Capital earnings (loss) from continuing operations
-
 
-
         
(1,251)
 
(7,672)
     
-
 
-
   
GE Capital revenues from services
 
9,297
 
9,350
         
-
 
-
     
10,790
 
10,722
   
   Total revenues and other income
 
123,693
 
117,386
 
5%
     
113,676
 
100,700
 
13%
 
10,905
 
10,801
 
1%
                                         
Costs and expenses
                                       
Cost of sales
 
87,483
 
82,693
         
85,712
 
80,828
     
2,331
 
2,343
   
Selling, general and administrative expenses
 
18,377
 
17,831
         
16,123
 
14,914
     
2,947
 
3,512
   
Interest and other financial charges
 
5,025
 
3,463
         
2,026
 
1,706
     
3,790
 
2,301
   
Investment contracts, insurance losses and
                                       
   insurance annuity benefits
 
2,797
 
2,605
         
-
 
-
     
2,861
 
2,737
   
Other costs and expenses
 
982
 
2,608
         
-
 
-
     
1,013
 
2,647
   
   Total costs and expenses
 
114,663
 
109,200
 
5%
     
103,860
 
97,447
 
7%
 
12,942
 
13,539
 
(4)%
Earnings (loss) from continuing operations
                                       
    before income taxes
 
9,030
 
8,186
 
10%
     
9,815
 
3,252
 
F
 
(2,037)
 
(2,739)
 
(26)%
Benefit (provision) for income taxes
 
464
 
(6,485)
         
(967)
 
(1,506)
     
1,431
 
(4,979)
   
Earnings (loss) from continuing operations
 
9,494
 
1,700
 
F
     
8,849
 
1,746
 
F
 
(606)
 
(7,718)
 
(92)%
Earnings (loss) from discontinued
                                       
    operations, net of taxes
 
(954)
 
(7,495)
         
(952)
 
(7,807)
     
(954)
 
(7,485)
   
Net earnings (loss)
 
8,540
 
(5,795)
 
F
     
7,896
 
(6,061)
 
F
 
(1,560)
 
(15,202)
 
90%
Less net earnings (loss) attributable to
                                       
    noncontrolling interests
 
(291)
 
332
         
(279)
 
83
     
(12)
 
248
   
Net earnings (loss) attributable to the Company
 
8,831
 
(6,126)
 
F
     
8,176
 
(6,145)
 
F
 
(1,548)
 
(15,450)
 
90%
Preferred stock dividends
 
(656)
 
(18)
         
-
 
-
     
(656)
 
(330)
   
Net earnings (loss) attributable to
                                       
   GE common shareowners
$
8,176
$
(6,145)
 
F
   
$
8,176
$
(6,145)
 
F
$
(2,204)
$
(15,780)
 
86%
Amounts attributable to GE common
                                       
   shareowners:
                                       
   Earnings (loss) from continuing operations
$
9,494
$
1,700
 
F
   
$
8,849
$
1,746
 
F
$
(606)
$
(7,718)
 
92%
   Less net earnings (loss) attributable
                                       
     to noncontrolling interests, continuing operations
 
(290)
 
19
         
(279)
 
83
     
(10)
 
(64)
   
   Earnings (loss) from continuing operations
                                       
     attributable to the Company
 
9,784
 
1,681
 
F
     
9,128
 
1,663
 
F
 
(595)
 
(7,654)
 
92%
   Preferred stock dividends
 
(656)
 
(18)
         
-
 
-
     
(656)
 
(330)
   
   Earnings (loss) from continuing operations
                                       
      attributable to GE common shareowners
 
9,128
 
1,663
 
F
     
9,128
 
1,663
 
F
 
(1,251)
 
(7,983)
 
84%
   Earnings (loss) from discontinued
                                       
      operations, net of taxes
 
(954)
 
(7,495)
         
(952)
 
(7,807)
     
(954)
 
(7,485)
   
   Less net earnings (loss) attributable to
                                       
      noncontrolling interests, discontinued operations
 
(1)
 
312
         
-
 
-
     
(1)
 
312
   
Net earnings (loss) attributable to GE
                                       
   common shareowners
$
8,176
$
(6,145)
 
F
   
$
8,176
$
(6,145)
 
F
$
(2,204)
$
(15,780)
 
86%
                                         
Per-share amounts - earnings (loss) from
                                       
   continuing operations
                                       
Diluted earnings (loss) per share
$
1.00
$
0.17
 
F
                           
Basic earnings (loss) per share
$
1.01
$
0.17
 
F
                           
Per-share amounts - net earnings (loss)
                                       
Diluted earnings (loss) per share
$
0.89
$
(0.61)
 
F
                           
Basic earnings (loss) per share
$
0.90
$
(0.62)
 
F
                           
Total average equivalent shares
                                       
Diluted
 
9,130
 
10,016
 
(9)%
                           
Basic
 
9,025
 
9,944
 
(9)%
                           
Dividends declared per common share
$
0.93
$
0.92
 
1%
                           

(a)
Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis.


Amounts may not add due to rounding. Dollar amounts and share amounts in millions; per-share amounts in dollars.

"GE Capital" means GE Capital Global Holdings, LLC (GECGH) and its predecessor General Electric Capital Corporation (GECC) and all of their affiliates and associated companies. Separate information is shown for "GE" and "Financial Services (GE Capital)." Transactions between GE and GE Capital have been eliminated from the "Consolidated" column. See Note 1 to the 2015 consolidated financial statements at www.ge.com/ar2015 for further information about consolidation matters.
5

GENERAL ELECTRIC COMPANY
                             
SUMMARY OF OPERATING SEGMENTS (UNAUDITED)
                   
                               
 
Three months ended December 31
 
Twelve months ended December 31
(Dollars in millions)
2016
 
2015
 
V%
 
2016
 
2015
 
V%
                               
Revenues(a)
                             
   Power
$
8,479
 
$
7,085
 
 20 %
 
$
26,827
 
$
21,490
 
 25 %
   Renewable Energy
 
2,500
   
1,938
 
 29 %
   
9,033
   
6,273
 
 44 %
   Oil & Gas
 
3,402
   
4,355
 
 (22)%
   
12,898
   
16,450
 
 (22)%
   Aviation
 
7,187
   
6,734
 
 7 %
   
26,261
   
24,660
 
 6 %
   Healthcare
 
5,101
   
4,973
 
 3 %
   
18,291
   
17,639
 
 4 %
   Transportation
 
1,243
   
1,612
 
 (23)%
   
4,713
   
5,933
 
 (21)%
   Energy Connections & Lighting(b)
 
3,325
   
4,657
 
 (29)%
   
15,133
   
16,351
 
 (7)%
        Total industrial segment revenues
 
31,236
   
31,352
 
 - %
   
113,156
   
108,796
 
 4 %
   Capital
 
2,649
   
2,585
 
 2 %
   
10,905
   
10,801
 
 1 %
        Total segment revenues
 
33,885
   
33,937
 
 - %
   
124,061
   
119,597
 
 4 %
   Corporate items and eliminations(a)
 
(796)
   
(46)
       
(368)
   
(2,211)
   
Consolidated revenues and other income
                             
  from continuing operations
$
33,088
 
$
33,892
 
 (2)%
 
$
123,693
 
$
117,386
 
 5 %
                               
Segment profit (loss)(a)
                             
   Power
$
2,069
 
$
1,628
 
 27 %
 
$
4,979
 
$
4,502
 
 11 %
   Renewable Energy
 
163
   
56
 
F
   
576
   
431
 
 34 %
   Oil & Gas
 
411
   
715
 
 (43)%
   
1,392
   
2,427
 
 (43)%
   Aviation
 
1,749
   
1,571
 
 11 %
   
6,115
   
5,507
 
 11 %
   Healthcare
 
1,030
   
938
 
 10 %
   
3,161
   
2,882
 
 10 %
   Transportation
 
317
   
339
 
 (6)%
   
1,064
   
1,273
 
 (16)%
   Energy Connections & Lighting(b)
 
102
   
274
 
 (63)%
   
311
   
944
 
 (67)%
        Total industrial segment profit
 
5,842
   
5,522
 
 6 %
   
17,598
   
17,966
 
 (2)%
   Capital
 
215
   
(1,615)
 
F
   
(1,251)
   
(7,983)
 
 84 %
   Total segment profit (loss)
 
6,057
   
3,907
 
 55 %
   
16,347
   
9,983
 
 64 %
Corporate items and eliminations(a)
 
(2,106)
   
(673)
       
(4,226)
   
(5,108)
   
GE interest and other financial charges
 
(536)
   
(463)
       
(2,026)
   
(1,706)
   
GE provision for income taxes
 
67
   
(204)
       
(967)
   
(1,506)
   
Earnings (loss) from continuing operations
                             
   attributable to GE common shareowners
 
3,483
   
2,567
 
 36 %
   
9,128
   
1,663
 
F
Earnings (loss) from discontinued operations,
                             
   net of taxes
 
-
   
3,758
 
U
   
(954)
   
(7,495)
 
 87 %
Less net earnings attributable to
                             
   noncontrolling interests, discontinued operations
 
(3)
   
43
 
U
   
(1)
   
312
 
U
Earnings (loss) from discontinued operations,
                             
   net of tax and noncontrolling interest
 
4
   
3,716
 
U
   
(952)
   
(7,807)
 
 88 %
Consolidated net earnings (loss)
                             
   attributable to GE common shareowners
$
3,486
 
$
6,283
 
 (45)%
 
$
8,176
 
$
(6,145)
 
F
                               
(a)
Segment revenues include revenues and other income related to the segment. Segment profit excludes results reported as discontinued operations and material accounting changes, the portion of earnings or loss attributable to noncontrolling interests of consolidated subsidiaries, and as such only includes the portion of earnings or loss attributable to our share of the consolidated earnings or loss of consolidated subsidiaries. Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment's management is measured – excluded in determining segment profit, which we sometimes refer to as "operating profit," for Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation and Energy Connections & Lighting; included in determining segment profit, which we sometimes refer to as "net earnings," for Capital. Certain corporate costs, such as shared services, employee benefits and information technology are allocated to our segments based on usage. A portion of the remaining corporate costs are allocated based on each segment's relative net cost of operations. Total industrial segment revenues and profit include the sum of our seven industrial reporting segments without giving effect to the elimination of transactions among such segments. Total segment revenues and profit include the sum of our seven industrial segments and one financial services segment, without giving effect to the elimination of transactions among such segments.  We believe that this provides investors with a view as to the results of all of our segments, without inter-segment eliminations and corporate items.
(b)
Beginning in the third quarter of 2016, the former Energy Connections and Appliances & Lighting segments are presented as one reporting segment called Energy Connections & Lighting. This segment includes the historical results of the Appliances business prior to its sale in June 2016.

Amounts may not add due to rounding

6

GENERAL ELECTRIC COMPANY
                                   
CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
 
                                     
 
Consolidated
   
GE(a)
 
Financial Services (GE Capital)
 
December 31,
 
December 31,
   
December 31,
 
December 31,
 
December 31,
 
December 31,
(Dollars in billions)
2016
 
2015
   
2016
 
2015
 
2016
 
2015
                         
Assets
                                   
Cash and marketable securities
$
92.4
 
$
102.5
   
$
10.7
 
$
10.5
 
$
81.8
 
$
91.9
Receivables
 
24.1
   
27.0
     
12.7
   
14.7
   
-
   
-
Inventories
 
22.4
   
22.5
     
22.3
   
22.4
   
0.1
   
0.1
GE Capital financing receivables - net
 
12.2
   
12.1
     
-
   
-
   
26.0
   
25.0
Property, plant & equipment - net
 
50.5
   
54.1
     
19.1
   
20.1
   
32.2
   
34.8
Receivable from GE Capital (debt assumption)
 
-
   
-
     
58.8
   
84.7
   
-
   
-
Investment in GE Capital
 
-
   
-
     
24.7
   
46.2
   
-
   
-
Goodwill & intangible assets
 
86.9
   
83.3
     
84.2
   
80.5
   
2.7
   
2.8
Contract assets
 
25.2
   
21.2
     
25.2
   
21.2
   
-
   
-
Other assets
 
35.0
   
46.7
     
18.7
   
20.5
   
25.4
   
36.0
Assets of businesses held for sale
 
1.7
   
2.8
     
1.6
   
2.8
   
-
   
-
Assets of discontinued operations
 
14.8
   
121.0
     
-
   
-
   
14.8
   
120.9
Total assets
$
365.2
 
$
493.1
   
$
277.9
 
$
323.7
 
$
183.0
 
$
311.5
                                     
Liabilities and equity
                                   
Borrowings
$
136.2
 
$
197.6
   
$
79.3
 
$
103.1
 
$
117.3
 
$
180.2
Investment contracts, insurance liabilities and
                                   
   insurance annuity benefits
 
26.1
   
25.7
     
-
   
-
   
26.5
   
26.2
Non-current compensation and benefits
 
43.8
   
40.5
     
42.8
   
39.5
   
1.0
   
1.0
Other liabilities
 
73.8
   
78.8
     
74.9
   
77.0
   
9.0
   
11.1
Liabilities of businesses held for sale
 
0.7
   
0.9
     
0.7
   
1.4
   
-
   
-
Liabilities of discontinued operations
 
4.2
   
46.5
     
-
   
0.1
   
4.1
   
46.4
Redeemable noncontrolling interest
 
3.0
   
3.0
     
3.0
   
3.0
   
-
   
-
GE shareowners' equity
 
75.8
   
98.3
     
75.8
   
98.3
   
24.7
   
46.2
Noncontrolling interests
 
1.7
   
1.9
     
1.4
   
1.4
   
0.3
   
0.5
Total liabilities and equity
$
365.2
 
$
493.1
   
$
277.9
 
$
323.7
 
$
183.0
 
$
311.5
                                     
(a)
Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis.


Amounts may not add due to rounding


"GE Capital" means GE Capital Global Holdings, LLC (GECGH) and its predecessor General Electric Capital Corporation (GECC) and all of their affiliates and associated companies. Separate information is shown for "GE" and "Financial Services (GE Capital)." Transactions between GE and GE Capital have been eliminated from the "Consolidated" column. See Note 1 to the 2015 consolidated financial statements at www.ge.com/ar2015 for further information about consolidation matters.

7

GENERAL ELECTRIC COMPANY
Financial Measures That Supplement GAAP


We sometimes use financial measures derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. The following non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure.

Industrial operating and GE Capital earnings (loss) from continuing operations and EPS
Industrial operating + Verticals earnings and EPS
Industrial operating profit and operating profit margin (excluding certain items)
Industrial segment organic revenues and industrial segment organic revenues including Alstom results for November and December of both 2015 and 2016
Industrial cash flows from operating activities (Industrial CFOA) and Industrial CFOA excluding deal taxes and pension funding
Free cash flow plus dispositions

The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures follow. Certain columns, rows or percentages within these reconciliations may not add or recalculate due to the use of rounded numbers. Totals and percentages presented are calculated from the underlying numbers in millions.
8

 
INDUSTRIAL OPERATING AND GE CAPITAL EARNINGS (LOSS) FROM CONTINUING OPERATIONS AND EPS
   
                               
   
Three months ended December 31
   
Twelve months ended December 31
(Dollars in millions; except per share amounts)
 
2016
   
2015
 
V%
   
2016
   
2015
 
V%
                               
Earnings (loss) from continuing operations attributable to GE
                             
   common shareowners (GAAP)
$
3,483
 
$
2,567
     
$
9,128
 
$
1,663
   
      Non-operating pension costs (pre-tax)
 
517
   
687
       
2,052
   
2,764
   
      Tax effect on non-operating pension costs(a)
 
(181)
   
(240)
       
(718)
   
(967)
   
Adjustment: non-operating pension costs (net of tax)
 
336
   
447
       
1,334
   
1,797
   
Operating earnings (loss) (Non-GAAP)
 
3,819
   
3,014
 
27%
   
10,462
   
3,460
 
F
                               
Adjustment: GE Capital earnings (loss) from continuing operations
                             
   attributable to GE common shareowners
 
215
   
(1,615)
       
(1,251)
   
(7,983)
   
Industrial operating earnings (Non-GAAP)
$
3,603
 
$
4,629
 
(22)%
 
$
11,713
 
$
11,443
 
2%
   
                             
Earnings (loss) per share - diluted(a)
                             
Continuing EPS from continuing operations
                             
   attributable to GE common shareowners (GAAP)
 
0.39
   
0.26
 
50%
   
1.00
   
0.17
 
F
Adjustment: non-operating pension costs (net of tax)
 
0.04
   
0.05
       
0.15
   
0.18
   
Operating EPS (Non-GAAP)
 
0.43
   
0.31
 
39%
   
1.14
   
0.35
 
F
GE Capital EPS from continuing operations
                             
   attributable to GE common shareowners (GAAP)
 
0.02
   
(0.16)
 
F
   
(0.14)
   
(0.80)
 
83%
Industrial operating EPS (Non-GAAP)
$
0.40
 
$
0.47
 
(15)%
 
$
1.28
 
$
1.14
 
12%
                               
(a)
The tax effect on non-operating pension costs was calculated using a 35% U.S. federal statutory tax rate, based on its applicability to such cost.
(b)
Earnings (loss) per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.

Operating earnings (loss) excludes non-service related pension costs of our principal pension plans comprising interest cost, expected return on plan assets and amortization of actuarial gains/losses. The service cost, prior service cost and any curtailment gain or loss components of our principal pension plans are included in operating earnings. We believe that these components of pension cost better reflect the ongoing service-related costs of providing pension benefits to our employees. As such, we believe that our measure of operating earnings (loss) provides management and investors with a useful measure of the operational results of our business. Other components of GAAP pension cost are mainly driven by capital allocation decisions and market performance, and we manage these separately from the operational performance of our businesses. Non-operating pension costs are not necessarily indicative of the current or future cash flow requirements related to our pension plan. We also believe that this measure, considered along with the corresponding GAAP measure, provides management and investors with additional information for comparison of our operating results to the operating results of other companies.
9

INDUSTRIAL OPERATING + VERTICALS EARNINGS AND EPS
               
                               
   
Three months ended December 31
   
Twelve months ended December 31
(Dollars in millions; except per share amounts)
 
2016
   
2015
 
V%
   
2016
   
2015
 
V%
                               
GE Capital earnings (loss) from continuing operations
                             
   attributable to GE common shareowners (GAAP)
$
215
 
$
(1,615)
 
F
 
$
(1,251)
 
$
(7,983)
 
84%
Adjustment: GE Capital other continuing
                             
   earnings (loss) (Other Capital)
 
(262)
   
(2,053)
       
(3,143)
   
(9,649)
   
Verticals earnings(a)
$
478
 
$
438
 
9%
 
$
1,892
 
$
1,666
 
14%
                               
Industrial operating earnings (Non-GAAP)
$
3,603
 
$
4,629
 
(22)%
 
$
11,713
 
$
11,443
 
2%
Verticals earnings(a)
 
478
   
438
       
1,892
   
1,666
   
Industrial operating earnings + Verticals earnings (Non-GAAP)
$
4,081
 
$
5,067
 
(19)%
 
$
13,605
 
$
13,109
 
4%
Adjustment: Non-operating pension costs and Other Capital
 
(598)
   
(2,500)
       
(4,477)
   
(11,446)
   
Earnings (loss) from continuing operations
                             
   attributable to GE common shareowners (GAAP)
$
3,483
   
2,567
 
36%
 
$
9,128
   
1,663
 
F
                               
                               
Earnings (loss) per share - diluted(b)
                             
Industrial operating EPS (Non-GAAP)
$
0.40
 
$
0.47
 
(15)%
 
$
1.28
 
$
1.14
 
12%
Verticals EPS
 
0.05
   
0.04
 
25%
   
0.21
   
0.17
 
24%
Industrial operating + Verticals EPS (Non-GAAP)
$
0.46
 
$
0.52
 
(12)%
 
$
1.49
 
$
1.31
 
14%
Adjustment: Non-operating pension costs and Other Capital
 
(0.07)
   
(0.25)
       
(0.49)
   
(1.14)
   
EPS from continuing operations (GAAP)
$
0.39
   
0.26
 
50%
 
$
1.00
   
0.17
 
F
                               
(a)
Verticals include businesses expected to be retained (GECAS, EFS, Industrial Finance, and run-off Insurance), including allocated corporate after tax costs of $25 million in both the three months ended December 31, 2016 and 2015 and $100 million and $133 million in the twelve months ended December 31, 2016 and 2015, respectively.
(b)
Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.

As described above, Verticals represents the GE Capital businesses that we expect to retain. We believe that presenting Industrial operating + Verticals earnings-per-share amounts provides management and investors with a useful measure to evaluate the performance of the businesses we expect to retain after the disposition of most of our financial services business.
10

INDUSTRIAL OPERATING PROFIT AND OPERATING PROFIT MARGIN (EXCLUDING CERTAIN ITEMS)
                       
 
Three months ended December 31
 
Twelve months ended December 31
(Dollars in millions)
 
2016
   
2015
   
2016
   
2015
                       
Revenues
                     
   GE total revenues and other income
$
31,294
 
$
30,292
 
$
113,676
 
$
100,700
      Less: GE Capital earnings (loss) from continuing operations
 
215
   
(1,465)
   
(1,251)
   
(7,672)
  GE revenues and other income excluding GE Capital
                     
    earnings (loss) (Industrial revenues) (GAAP)
$
31,079
 
$
31,757
 
$
114,927
 
$
108,371
                       
      Less: gains
 
49
   
998
   
3,444
   
1,497
      Less: Alstom revenues
 
3,805
   
1,956
   
13,015
   
1,956
   Adjusted Industrial revenues (Non-GAAP)
$
27,225
 
$
28,803
 
$
98,468
 
$
104,918
                       
Costs
                     
   GE total costs and expenses
$
27,883
 
$
27,399
 
$
103,860
 
$
97,447
      Less: GE interest and other financial charges
 
536
   
463
   
2,026
   
1,706
   Industrial costs excluding interest and other financial charges (GAAP)
$
27,347
 
$
26,936
 
$
101,834
 
$
95,741
                       
      Less: Alstom costs and expenses
 
3,295
   
2,110
   
12,243
   
2,110
      Less: non-operating pension costs (pre-tax)
 
517
   
687
   
2,052
   
2,764
      Less: restructuring and other
 
1,022
   
567
   
3,578
   
1,734
      Less: noncontrolling interests and 2015 GE preferred stock dividend
 
4
   
30
   
279
   
229
   Adjusted Industrial costs (Non-GAAP)
$
22,509
 
$
23,542
 
$
83,682
 
$
88,905
                       
Industrial profit (GAAP)
$
3,732
 
$
4,820
 
$
13,093
 
$
12,630
Industrial margins (GAAP)
 
12.0%
   
15.2%
   
11.4%
   
11.7%
                       
Industrial operating profit (Non-GAAP)
$
4,716
 
$
5,259
 
$
14,786
 
$
16,013
Industrial operating profit margins (Non-GAAP)
 
17.3%
   
18.3%
   
15.0%
   
15.3%
                       
We have presented our Industrial operating profit and operating profit margin excluding gains, non-operating pension costs (pre-tax) restructuring and other, noncontrolling interests, GE Capital preferred stock dividends, as well as the results of Alstom. We believe that Industrial operating profit and operating profit margin adjusted for these items are meaningful measures because they increase the comparability of period-to-period results.
11

INDUSTRIAL SEGMENT ORGANIC REVENUES GROWTH AND INDUSTRIAL SEGMENT ORGANIC REVENUES
INCLUDING ALSTOM RESULTS FOR NOVEMBER AND DECEMBER OF BOTH 2015 AND 2016
                               
 
Three months ended December 31
 
Twelve months ended December 31
(Dollars in millions)
 
2016
   
2015
 
V%
   
2016
   
2015
 
V%
                               
Industrial segment revenues (GAAP)
$
31,236
 
$
31,352
 
 - %
 
$
113,156
 
$
108,796
 
 4 %
Adjustments:
                             
   Acquisitions
 
3,916
   
1,961
       
13,207
   
1,961
   
   Business dispositions (other than dispositions of businesses
                             
      acquired for investment
 
104
   
1,833
       
1,256
   
6,838
   
   Currency exchange rates
 
(79)
   
-
       
(808)
   
-
   
Industrial segment organic revenues (Non-GAAP)
 
27,295
   
27,559
 
 (1)%
   
99,501
   
99,997
 
 - %
Adjustments: Plus Alstom November and December(a)
 
3,202
   
1,812
       
3,202
   
1,812
   
Industrial segment organic revenues including November
                             
   and December of both 2015 and 2016 (Non-GAAP)
$
30,497
 
$
29,371
 
 4 %
 
$
102,703
 
$
101,809
 
 1 %
                               
(a)
Alstom was acquired in November 2015. This adjustment results in the inclusion of Alstom revenues from November and December 2015 and 2016 in the adjusted organic revenue growth measure as described below.

Organic revenue growth measures revenue excluding the effects of acquisitions, business dispositions and currency exchange rates. We believe that this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and currency exchange, which activities are subject to volatility and can obscure underlying trends. We also believe that presenting organic revenue growth separately for our industrial businesses provides management and investors with useful information about the trends of our industrial businesses and enables a more direct comparison to other non-financial businesses and companies. Management recognizes that the term "organic revenue growth" may be interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the respective businesses or companies and may therefore be a useful tool in assessing period-to-period performance trends.

We integrate acquisitions as soon as possible.  Revenues from the date we complete the acquisition through the end of the fourth quarter following the acquisition are considered the acquisition effect of such business for purposes of calculating organic revenue.  As such, organic revenue excludes Alstom revenues from November 3, 2015 through December 31, 2016.  However, because of the significance of Alstom to our results and the exclusion of Alstom revenues for more than 12 months in calculating organic revenue growth, we believe investors would also find it helpful to see the revenue growth of the industrial segments adjusted to include Alstom's November and December revenues in an organic measure.  As a result, we have also presented an adjusted organic revenue growth measure on that basis.
12

INDUSTRIAL CASH FLOWS FROM OPERATING ACTIVITIES (INDUSTRIAL CFOA)
             
AND INDUSTRIAL CFOA EXCLUDING DEAL TAXES AND PENSION FUNDING
               
 
Twelve months ended December 31
(Dollars in millions)
 
2016
   
2015
 
V%
               
Cash from GE's operating activities (continuing operations), as reported (GAAP)
$
29,960
 
$
16,354
 
83%
Adjustment: dividends from GE Capital
 
20,095
   
4,300
   
Industrial CFOA (Non-GAAP)
$
9,865
 
$
12,054
 
(18)%
Adjustment: deal taxes related to the Appliances business sale & pension funding
 
1,745
   
184
   
Industrial CFOA excluding deal taxes and pension funding (Non-GAAP)
$
11,611
 
$
12,238
 
(5)%
               
We define "Industrial CFOA" as GE's cash from operating activities (continuing operations) less the amount of dividends received by GE from GE Capital. This includes the effects of intercompany transactions, including GE customer receivables sold to GE Capital; GE Capital services for trade receivables management and material procurement; buildings and equipment leased by GE from GE Capital; information technology (IT) and other services sold to GE Capital by GE; aircraft engines manufactured by GE that are installed on aircraft purchased by GE Capital from third-party producers for lease to others; and various investments, loans and allocations of GE corporate overhead costs.  We believe that investors may find it useful to compare GE's operating cash flows without the effect of GE Capital dividends, since these dividends are not representative of the operating cash flows of our industrial businesses and can vary from period to period based upon the results of the financial services businesses. We also believe that investors may find it useful to compare Industrial CFOA excluding the effects of deal taxes paid related to the Appliances business sale and the amount of pension funding. Management recognizes that these measures may not be comparable to cash flow results of companies which contain both industrial and financial services businesses, but believes that this comparison is aided by the provision of additional information about the amounts of dividends paid by our financial services business and the separate presentation in our financial statements of the GE Capital cash flows. We believe that our measure of Industrial CFOA and Industrial CFOA excluding Appliances deal-related taxes and pension funding provides management and investors with useful measures to compare the capacity of our industrial operations to generate operating cash flow with the operating cash flow of other non-financial businesses and companies and as such provides useful measures to supplement the reported GAAP CFOA measure.


FREE CASH FLOW PLUS DISPOSITIONS
                     
                 
Twelve months ended
(Dollars in millions)
               
December 31, 2016
                     
Cash from GE's operating activities (continuing operations) (GAAP)
               
$
29,960
Less GE additions to property, plant and equipment
                 
3,758
Plus GE dispositions of property, plant and equipment
                 
1,080
Free cash flow (FCF) (Non-GAAP)
                 
27,282
                     
Plus GE proceeds from principal  business dispositions
                 
5,357
FCF plus dispositions (Non-GAAP)
   
32,639

We define free cash flow as GE's cash from operating activities (continuing operations) less GE additions to property, plant and equipment and plus GE dispositions of property, plant and equipment, which are included in cash flows from investing activities. We believe that free cash flow is a useful financial metric to assess our ability to pursue opportunities to enhance our growth. We also believe that presenting free cash flow plus proceeds from business dispositions provides investors with useful information about the company's actual performance against performance targets. Management recognizes that the term free cash flow may be interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the respective businesses or companies and may therefore be a useful tool in assessing period-to-period performance trends.


13