United States Securities and Exchange Commission

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☑ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2016

or

☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ___________to ___________

Commission file number 001-00035

General Electric Company(Exact name of registrant as specified in charter)

New York		14-0689340
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
41 Farnsworth Street, Boston, MA	02210	(617) 443-3000
(Address of principal executive offices)	(Zip Code)	(Telephone No.)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class		Name of each exchange on which registered
Common stock, par value $0.06 per share		New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act:

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10‑K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☑	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The aggregate market value of the outstanding common equity of the registrant not held by affiliates as of the last business day of the registrant's most recently completed second fiscal quarter was at least $279.3 billion. There were 8,724,783,000 shares of voting common stock with a par value of $0.06 outstanding at January 31, 2017.

DOCUMENTS INCORPORATED BY REFERENCE

The definitive proxy statement relating to the registrant's Annual Meeting of Shareowners, to be held April 26, 2017, is incorporated by reference into Part III to the extent described therein.

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FORWARD LOOKING STATEMENTS

This document contains "forward-looking statements" – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "estimate," "forecast" or "target."

Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about our announced plan to combine our Oil & Gas business with Baker Hughes, including projected revenue and cost synergies, impact on our earnings per share, and the timing and structure of the proposed transaction; the completion of our announced plan to reduce the size of our financial services businesses, including expected cash and non-cash charges associated with this plan and earnings per share of GE Capital's retained businesses (Verticals); expected income; earnings per share, including our 2018 target; revenues; organic growth; growth and productivity associated with our Digital business; margins; cost structure and plans to reduce costs; restructuring charges; transaction-related synergies and gains; cash flows, including the impact of pension funding contributions; returns on capital and investment; capital expenditures; capital allocation, including dividends, share repurchases and acquisitions; or capital structure, including leverage.

For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include:

· our ability to complete incremental asset sales as we complete our announced plan to reduce the size of our financial services businesses and our ability to reduce costs as we execute that plan;

· changes in law, economic and financial conditions, including interest and exchange rate volatility, commodity and equity prices and the value of financial assets;

· the impact of conditions in the financial and credit markets on the availability and cost of GE Capital Global Holdings, LLC's (GE Capital) funding, and GE Capital's exposure to counterparties;

· pending and future mortgage loan repurchase claims and other litigation claims and investigations in connection with WMC, which may affect our estimates of liability, including possible loss estimates;

· our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so;

· the amount and timing of our cash flows and earnings and other conditions, which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels;

· GE Capital's ability to pay dividends to GE at the planned level, which may be affected by GE Capital's cash flows and earnings, financial services regulation and oversight, claims and investigations relating to WMC and other factors;

· our ability to launch new products in a cost-effective manner;

· our ability to increase margins through restructuring and other cost reduction measures;

· our ability to convert pre-order commitments/wins into orders/bookings;

· the price we realize on orders/bookings since commitments/wins are stated at list prices;

· customer actions or developments such as early aircraft retirements or reduced energy demand, changes in economic conditions, including oil prices, and other factors that may affect the level of demand and financial performance of the major industries and customers we serve;

· the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of Alstom investigative and legal proceedings;

· our capital allocation plans, as such plans may change including with respect to the timing and size of share repurchases, acquisitions, joint ventures, dispositions and other strategic actions;

· our success in completing, including obtaining regulatory approvals and satisfying other closing conditions for, announced transactions, such as our announced plans and transactions to combine our Oil & Gas business with Baker Hughes, to reduce the size of our financial services businesses, and to acquire LM Wind Power;

· our success in integrating acquired businesses and operating joint ventures, including Baker Hughes;

· our ability to realize revenue and cost synergies from announced transactions, acquired businesses and joint ventures, including Alstom and Baker Hughes;

· the impact of potential information technology or data security breaches; and

· the other factors that are described in the Risk Factors section of this Form 10-K report.

These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.

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    ABOUT GENERAL ELECTRIC

OUR BUSINESS AND HOW WE TALK ABOUT IT

We are a global digital industrial company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. With products and services ranging from aircraft engines, power generation and oil and gas production equipment to medical imaging, financing and industrial products, we serve customers in approximately 180 countries and employ approximately 295,000 people worldwide. Since our incorporation in 1892, we have developed or acquired new technologies and services that have considerably broadened and changed the scope of our activities.

OUR INDUSTRIAL OPERATING SEGMENTS

	Power		Aviation		Energy Connections & Lighting(a)
	Renewable Energy		Healthcare
	Oil & Gas		Transportation

OUR FINANCIAL SERVICES OPERATING SEGMENT

Capital

(a) 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 historical results of the Appliances business prior to its sale in June 2016.

Business, operation and financial overviews for our operating segments are provided in the Segment Operations section within the Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section.

COMPETITIVE CONDITIONS AND ENVIRONMENT

In all of our global business activities, we encounter aggressive and able competition. In many instances, the competitive climate is characterized by changing technology that requires continuing research and development. With respect to manufacturing operations, we believe that, in general, we are one of the leading firms in most of the major industries in which we participate. The businesses in which GE Capital engages are subject to competition from various types of financial institutions, including commercial banks, investment banks, leasing companies, independent finance companies, finance companies associated with manufacturers and insurance and reinsurance companies.

As a diverse global company, we are affected by world economies, instability in certain regions, commodity prices, such as the price of oil, and foreign currency volatility. Other factors impacting our business include:

· product development cycles for many of our products are long and product quality and efficiency are critical to success,

· research and development expenditures are important to our business and

· many of our products are subject to a number of regulatory standards.

These factors are discussed throughout MD&A.

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OUR EMPLOYEES AND EMPLOYEE RELATIONS

At year-end 2016, General Electric Company and consolidated affiliates employed approximately 295,000 persons, of whom approximately 104,000 were employed in the United States. For further information about employees, see the Other Financial Data section within the MD&A.

Approximately 9,300 GE manufacturing and service employees in the United States are represented for collective bargaining purposes by one of 9 unions (approximately 48 different locals within such unions). A majority of such employees are represented by union locals that are affiliated with the IUE-CWA, The Industrial Division of the Communication Workers of America, AFL-CIO, CLC. In June 2015, we negotiated new four-year collective bargaining agreements with most of our U.S unions. These agreements continue to provide employees with good wages and benefits while addressing competitive realities facing the Company.

Other GE affiliates are parties to labor contracts with various labor unions, also with varying terms and expiration dates that cover approximately 1,700 employees.

PROPERTIES

Manufacturing operations are carried out at 184 manufacturing plants located in 38 states in the United States and Puerto Rico and at 325 manufacturing plants located in 40 other countries.

CORPORATE INFORMATION AND WEBSITES

General Electric's address is 1 River Road, Schenectady, NY 12345-6999; we also maintain executive offices at 41 Farnsworth Street, Boston, MA 02210.

GE's Internet address at www.ge.com, Investor Relations website at www.ge.com/investor-relations and our corporate blog at www.gereports.com, as well as GE's Facebook page, Twitter accounts and other social media, including @GE_Reports, contain a significant amount of information about GE, including financial and other information for investors. GE encourages investors to visit these websites from time to time, as information is updated and new information is posted.

Website references in this report are provided as a convenience and do not constitute, and should not be viewed as, incorporation by reference of the information contained on, or available through, the websites. Therefore, such information should not be considered part of this report.

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are available, without charge, on our website, www.ge.com/investor-relations/events-reports, as soon as reasonably practicable after they are filed electronically with the U.S. Securities and Exchange Commission (SEC). Copies are also available, without charge, from GE Corporate Investor Communications, 41 Farnsworth Street, Boston, MA 02210.

Reports filed with the SEC may be viewed at www.sec.gov or obtained at the SEC Public Reference Room in Washington, D.C. Information about the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

PRESENTATION

The consolidated financial statements of General Electric Company (the Company) combine the industrial manufacturing and services businesses of General Electric Company (GE) with the financial services businesses of GE Capital Global Holdings, LLC (GE Capital or Financial Services) and its predecessor, General Electric Capital Corporation.

We believe that investors will gain a better understanding of our company if they understand how we measure and talk about our results. Because of the diversity in our businesses, we present our financial statements in a three-column format, which allows investors to see our industrial operations separately from our Financial Services operations. We believe that this provides useful information to investors. When used in this report, unless otherwise indicated by the context, we use the terms to mean the following:

· General Electric or the Company – the parent company, General Electric Company.

· GE – the adding together of all affiliates except GE Capital, whose continuing operations are presented on a one-line basis, giving effect to the elimination of transactions among such affiliates. Transactions between GE and GE Capital have not been eliminated at the GE level. We present the results of GE in the center column of our consolidated statements of earnings, financial position and cash flows. An example of a GE metric is GE cash from operating activities (GE CFOA).

· General Electric Capital Corporation or GECC – predecessor to GE Capital Global Holdings, LLC.

· GE Capital Global Holdings, LLC or GECGH – the adding together of all affiliates of GECGH, giving effect to the elimination of transactions among such affiliates.

· GE Capital or Financial Services – refers to GECGH, or its predecessor GECC, and is the adding together of all affiliates of GE Capital giving effect to the elimination of transactions among such affiliates. We present the results of GE Capital in the right-side column of our consolidated statements of earnings, financial position and cash flows.

· GE consolidated – the adding together of GE and GE Capital, giving effect to the elimination of transactions between the two. We present the results of GE consolidated in the left-side column of our consolidated statements of earnings, financial position and cash flows.

· Industrial – GE excluding the continuing operations of GE Capital. We believe that this provides investors with a view as to the results of our industrial businesses and corporate items. An example of an Industrial metric is Industrial CFOA (Non-GAAP), which is GE CFOA excluding the effects of dividends from GE Capital.

· Industrial segment – the sum of our seven industrial reporting segments, without giving effect to the elimination of transactions among such segments and between these segments and our Financial Services segment. This provides investors with a view as to the results of our industrial segments, without inter-segment eliminations and corporate items. An example of an industrial segment metric is industrial segment revenue growth.

· Total segment – the sum of our seven industrial segments and one financial services segment, without giving effect to the elimination of transactions between such segments. This provides investors with a view as to the results of all of our segments, without inter-segment eliminations and corporate items.

· Verticals or GE Capital Verticals – the adding together of GE Capital businesses that we expect to retain, principally its vertical financing businesses—GE Capital Aviation Services (GECAS), Energy Financial Services (EFS) and Industrial Finance (which includes Healthcare Equipment Finance, Working Capital Solutions and Industrial Financing Solutions)—that relate to the Company's core industrial domain and other operations, including our run-off insurance activities, and allocated corporate costs.

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We integrate acquisitions as quickly as possible. Revenues and earnings from the date we complete the acquisition through the end of the fourth quarter following the acquisition are considered the acquisition effect of such businesses.

Discussion of GE Capital's total assets includes deferred income tax liabilities, which are presented within assets for purposes of our consolidated statement of financial position presentations for this filing.

Amounts reported in billions in graphs within this report are computed based on the amounts in millions. As a result, the sum of the components reported in billions may not equal the total amount reported in billions due to rounding.  Certain columns and rows within the tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in millions.

Discussions throughout this MD&A are based on continuing operations unless otherwise noted.

The MD&A should be read in conjunction with the Financial Statements and Notes to the consolidated financial statements.

OTHER TERMS USED BY GE

· Backlog – unfilled customer orders for products and product services (expected life of contract sales for product services).

· Borrowings as a percentage of total capital invested – for GE, the sum of borrowings and mandatorily redeemable preferred stock, divided by the sum of borrowings, mandatorily redeemable preferred stock, redeemable noncontrolling interest, noncontrolling interests and total shareowners' equity.

· Continuing earnings – unless otherwise indicated, we refer to the caption "earnings from continuing operations attributable to GE common shareowners" as continuing earnings or simply as earnings.

· Continuing earnings per share (EPS) – unless otherwise indicated, when we refer to continuing earnings per share, it is the diluted per-share amount of "earnings from continuing operations attributable to GE common shareowners".

· Digital revenues – revenues related to internally developed software (including Predix^TM) and associated hardware, and software solutions that improve our customers' asset performance. In 2016, we reassessed the span of our digital product offerings, which now excludes software-enabled product upgrades. These revenues are largely generated from our operating businesses and are included in their segment results.

· Ending Net Investment (ENI) (Non-GAAP) – the total capital we have invested in the Financial Services business. It is the sum of short-term borrowings, long-term borrowings and equity (excluding noncontrolling interests) adjusted for unrealized gains and losses on investment securities and hedging instruments. Alternatively, it is the amount of assets of continuing operations less the amount of non-interest-bearing liabilities.

· Equipment leased to others (ELTO) – rental equipment we own that is available to rent and is stated at cost less accumulated depreciation.

· Free cash flow (Non-GAAP) – GE's cash from operating activities (continuing operations) less GE additions to property, plant and equipment, plus GE dispositions of property, plant and equipment, which are included in cash flows from investing activities.

· GE Capital Exit Plan – our plan, announced on April 10, 2015, to reduce the size of our financial services businesses through the sale of most of the assets of GE Capital, and to focus on continued investment and growth in our industrial businesses.

· Global Growth Organization (GGO) – organization that provides operational processes through a shared services structure for the enabling functions: commercial, enterprise data management, finance, HR, IT, legal, supply chain and tax through a partnership with the businesses and global functions.

· Growth markets – consist of countries/regions which are expected to grow at above average world GDP rates over the long term and typically are resource rich and/or have large infrastructure needs. They encompass the following: Australasia; Canada; Latin America; Middle East, North Africa and Turkey; Russia and CIS; Sub-Saharan Africa; Greater China; South Asia; South East Asia (ASEAN).

· Industrial margin – GE revenues and other income excluding GE Capital earnings (loss) from continuing operations (Industrial revenues) minus GE total costs and expenses less GE interest and other financial charges divided by Industrial revenues.

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· Industrial operating profit margin (Non-GAAP) – Industrial segment profit plus corporate items and eliminations (excluding gains, restructuring, and pre-tax non-operating pension costs) divided by industrial segment revenues plus corporate items and eliminations (excluding gains and GE-GE Capital eliminations).

· Industrial return on total capital (Industrial ROTC) (Non-GAAP) – earnings from continuing operations attributable to GE common shareowners less GE Capital earnings from continuing operations plus GE after-tax interest, divided by average Industrial shareholders' equity, less average GE Capital's shareholders' equity, plus average debt and other, net.

· Industrial segment gross margin – industrial segment sales less industrial segment cost of sales.

· Industrial shareholders' equity and GE Capital shareholders' equity – for purposes of the Industrial ROTC calculation excludes the effects of discontinued operations and is calculated on an annual basis using a five-point average.

· Net earnings – unless otherwise indicated, we refer to the caption "net earnings attributable to GE common shareowners" as net earnings.

· Net earnings per share (EPS) – unless otherwise indicated, when we refer to net earnings per share, it is the diluted per-share amount of "net earnings attributable to GE common shareowners".

· Non-operating pension cost (Non-GAAP) – comprises the expected return on plan assets, interest cost on benefit obligations and net actuarial gain (loss) amortization for our principal pension plans.

· Operating earnings (Non-GAAP) – GE earnings from continuing operations attributable to common shareowners excluding the impact of non-operating pension costs.

· Operating earnings per share (Non-GAAP) – unless otherwise indicated, when we refer to operating earnings per share, it is the diluted per-share amount of "operating earnings".

· Operating pension cost (Non-GAAP) – comprises the service cost of benefits earned, prior service cost amortization and curtailment gain (loss) for our principal pension plans.

· Organic revenues (Non-GAAP) – revenues excluding the effects of acquisitions, dispositions and translational foreign currency exchange.

· Product services – for purposes of the financial statement display of sales and costs of sales in our Statement of Earnings, "goods" is required by SEC regulations to include all sales of tangible products, and "services" must include all other sales, including other services activities. In our MD&A section of this report, we refer to sales under product services agreements and sales of both goods (such as spare parts and equipment upgrades) and related services (such as monitoring, maintenance and repairs) as sales of "product services," which is an important part of our operations. We refer to "product services" simply as "services" within the MD&A.

· Product services agreements – contractual commitments, with multiple-year terms, to provide specified services for products in our Power, Renewable Energy, Oil & Gas, Aviation and Transportation installed base – for example, monitoring, maintenance, service and spare parts for a gas turbine/generator set installed in a customer's power plant.

· Revenues – unless otherwise indicated, we refer to captions such as "revenues and other income" simply as revenues.

· Segment profit – refers to the operating profit of the industrial segments and the net earnings of the Financial Services segment. See the Segment Operations section within the MD&A for a description of the basis for segment profits.

· Shared Services – sharing of business processes in order to standardize and consolidate services to provide value to the businesses in the form of simplified processes, reduced overall costs and increased service performance.

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NON-GAAP FINANCIAL MEASURES

In the accompanying analysis of financial information, we sometimes use information derived from consolidated financial data but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered "non-GAAP financial measures" under the SEC rules. Specifically, we have referred, in various sections of this report, to:

· Industrial segment organic revenues and industrial segment organic revenues excluding Oil & Gas

· Industrial segment organic operating profit

· Oil & Gas organic revenue and operating profit growth

· Operating and non-operating pension cost

· Adjusted corporate costs (operating)

· GE pre-tax earnings from continuing operations, excluding GE Capital earnings (loss) from continuing operations and the corresponding effective tax rates, and the reconciliation of the U.S. federal statutory income tax rate to GE effective tax rate, excluding GE Capital earnings

· Industrial operating earnings 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 operating profit + Verticals

· Industrial segment gross margin (excluding Alstom)

· Industrial segment operating profit and operating margin (excluding Alstom)

· Average GE shareowners' equity, excluding effects of discontinued operations

· Average GE Capital shareowners' equity, excluding effects of discontinued operations

· Industrial return on total capital (Industrial ROTC)

· Industrial cash flows from operating activities (Industrial CFOA) and Industrial CFOA excluding taxes related to business sales and principal pension plan funding

· GE cash flows from operating activities (GE CFOA) excluding taxes related to business sales and principal pension plan funding

· Free cash flow (FCF) and FCF plus dispositions

· Ratio of adjusted debt to equity at GE Capital, net of liquidity

· Capital ending net investment (ENI), excluding liquidity

· 2017 operating framework including 2017 Industrial operating + Verticals EPS target

The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are included in the Supplemental Information section within the MD&A. Non-GAAP financial measures referred to in this report are either labeled as "non-GAAP" or designated as such with an asterisk (*).

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KEY PERFORMANCE INDICATORS

(Dollars in billions; per-share amounts in dollars)

REVENUES PERFORMANCE		GE CFOA
			GE Capital Dividend Industrial CFOA*
(a) Including the results of Alstom for November and December of both 2015 and 2016		(a) Industrial CFOA was $12.2 billion excluding deal taxes of $(0.2) billion related to the sale of our Signaling business (b) Industrial CFOA was $11.6 billion excluding deal taxes of $(1.4) billion related to the sale of our Appliances business and $(0.3) billion of pension funding (c) Included $(0.3) billion related to Alstom in both 2015 and 2016
INDUSTRIAL ORDERS		INDUSTRIAL BACKLOG
	Equipment Services		Equipment Services
(a) Included $2.5 billion related to Alstom (b) Included $17.4 billion related to Alstom		(a) Included $29.2 billion related to Alstom (b) Included $31.2 billion related to Alstom
INDUSTRIAL MARGINS		INDUSTRIAL OPERATING PROFIT MARGINS (NON-GAAP)(a)
(a) 12.0%, excluding (7.9)% related to Alstom* (b) 12.1%, excluding 5.9% related to Alstom*		(a) Excluded gains, non-operating pension costs, restructuring and other, noncontrolling interests, GE Capital preferred stock dividends, as well as the results of Alstom

*Non-GAAP Financial Measure

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KEY PERFORMANCE INDICATORS

(Dollars in billions; per-share amounts in dollars; attributable to GE common shareowners)

NET EARNINGS (LOSS)	NET EARNINGS (LOSS) PER SHARE
OPERATING EARNINGS (NON-GAAP)	OPERATING EARNINGS PER SHARE (NON-GAAP)
INDUSTRIAL OPERATING + VERTICALS EARNINGS (NON-GAAP)	INDUSTRIAL OPERATING + VERTICALS EPS (NON-GAAP)

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KEY PERFORMANCE INDICATORS

(Dollars in billions; per-share amounts in dollars)

SHAREHOLDER INFORMATION
RETURNED $30.5 BILLION TO SHAREOWNERS IN 2016 Dividends $8.5 billion Stock buyback $22.0 billion	ANNUAL MEETING General Electric's 2017 Annual Meeting of Shareowners will be held on April 26, 2017, in Asheville, NC
FIVE-YEAR PERFORMANCE GRAPH

The annual changes for the five-year period shown in the graph on this page are based on the assumption that $100 had been invested in General Electric common stock, the Standard & Poor's 500 Stock Index (S&P 500) and the Dow Jones Industrial Average (DJIA) on December 31, 2011, and that all quarterly dividends were reinvested. The cumulative dollar returns shown on the graph represent the value that such investments would have had on December 31 for each year indicated.

STOCK PRICE RANGE AND DIVIDENDS

With respect to "Market Information," in the United States, General Electric common stock is listed on the New York Stock Exchange (its principal market). General Electric common stock is also listed on the London Stock Exchange, Euronext Paris, the SIX Swiss Exchange and the Frankfurt Stock Exchange. The chart above shows trading prices, as reported on the New York Stock Exchange, Inc., Composite Transactions Tape.

As of January 31, 2017, there were approximately 440,000 shareowner accounts of record.

On February 10, 2017, our Board of Directors approved a quarterly dividend of $0.24 per share of common stock, which is payable April 25, 2017, to shareowners of record at close of business on February 27, 2017.

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CONSOLIDATED RESULTS

SIGNIFICANT DEVELOPMENTS IN 2016

Our consolidated results for 2016 were significantly affected by recent portfolio changes, including the 2015 acquisition of Alstom, the disposal of financial services businesses under the GE Capital Exit Plan initiated in 2015 and the 2016 sale of our Appliances business.

ALSTOM

In 2016, Alstom contributed revenues of $13.0 billion and an operating loss of $0.3 billion, of which $0.8 billion of profit is included in the segment results and $1.0 billion of charges is included in Corporate, primarily related to purchase accounting and acquisition related charges. Including the effects of tax benefits of $0.8 billion, net earnings were $0.4 billion for the year ended December 31, 2016. In addition, Alstom used cash flows from operating activities of $0.3 billion for the year ended December 31, 2016.

GE CAPITAL EXIT PLAN

As of December 31, 2016, we have signed agreements with buyers for $197 billion of GE Capital ending net investment (ENI), excluding liquidity (as originally reported at December 31, 2014), of which $190 billion have closed by the end of 2016.

In June 2016, we received approval of our request to the Financial Stability Oversight Council (FSOC) for rescission of GE Capital's designation as a nonbank Systemically Important Financial Institution (SIFI).

2016 SIGNIFICANT TRANSACTIONS

Transactions completed in 2016 included the following.

·The June 2016 sale of our Appliances business to Qingdao Haier Co., Ltd. (Haier) for $5.6 billion (including $0.8 billion from sale of receivables originated in our Appliances business and sold from GE Capital to Haier) on which we recognized an after-tax gain of $1.8 billion.

·Acquisition of the remaining 74% of software developer Meridium Inc. in September 2016, for $0.4 billion to enhance and accelerate our asset performance-management capabilities across our industrial businesses.

·The acquisitions of a 76.2% interest in Arcam AB for $0.5 billion and a 75% interest in Concept Laser GmbH for $0.6 billion, two European 3-D printing companies that print metal parts for aircraft and other industrial components, to expand our additive manufacturing capabilities.

PLANNED TRANSACTIONS

We also announced a number of strategic transactions during 2016 that we expect to complete in 2017, including the following.

·In October 2016, we announced an agreement with Baker Hughes Incorporated (Baker Hughes) to combine our Oil & Gas business and Baker Hughes to create a new entity in which GE will hold a 62.5% interest and existing Baker Hughes shareholders will have a 37.5% interest. Baker Hughes shareholders will also receive a cash dividend funded by a $7.4 billion cash contribution by GE. The transaction is subject to the approval of Baker Hughes shareholders, regulatory approvals and other customary closing conditions.

·In October 2016, we announced a plan to acquire LM Wind Power, one of the world's largest wind turbine blade manufacturers for $1.7 billion, subject to customary closing conditions.

·In October 2016, we also announced our plan to sell our Water & Process Technologies business and in December 2016, we announced our plan to sell our Industrial Solutions business.

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CONSOLIDATED RESULTS

(Dollars in billions)

2016 GEOGRAPHIC REVENUES		2016 SEGMENT REVENUES
REVENUES	INDUSTRIAL REVENUES		FINANCIAL SERVICES REVENUES
(a)Includes $2.0 billion related to Alstom (b)Includes $13.0 billion related to Alstom	(a)Includes $2.0 billion related to Alstom (b)Includes $13.0 billion related to Alstom
CONTINUING EARNINGS(a)	CONTINUING EARNINGS PER SHARE(a)
(a)Attributable to GE common shareowners

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CONSOLIDATED RESULTS

(Dollars in billions)

REVENUE COMMENTARY: 2016 – 2015

EARNINGS COMMENTARY: 2016 – 2015

Consolidated revenues increased $6.3 billion, or 5%, primarily driven by increased Industrial revenues of $6.6 billion and increased Financial Services revenues of $0.1 billion, partially offset by an increase in eliminations between Industrial and Financial Services of $0.4 billion. The overall foreign currency impact on consolidated revenues was a decrease of $1.3 billion. ·Industrial revenues increased $6.6 billion, or 6% due to increased industrial segment revenues of $4.4 billion, or 4%, as increases at Power, Renewable Energy, Aviation and Healthcare were partially offset by decreases at Oil & Gas, Transportation and Energy Connections & Lighting. This increase in industrial segment revenues was primarily driven by the net effects of acquisitions of $11.2 billion, offset by the net effects of dispositions of $5.6 billion and the effects of a stronger U.S. dollar of $0.8 billion.  Excluding the effects of acquisitions, dispositions and translational currency exchange, industrial segment organic revenues* decreased $0.5 billion. Industrial revenues increased an additional $2.2 billion at Corporate as current year gains were $1.9 billion higher than 2015 gains. ·Financial Services revenues increased $0.1 billion, or 1%, primarily due to lower impairments, higher gains and the effects of acquisitions, partially offset by organic revenue declines, the effects of dispositions and the effects of translational currency exchange.

Consolidated continuing earnings increased $7.5 billion, primarily driven by decreased Financial Services losses of $6.7 billion, increased Industrial continuing earnings of $0.5 billion and a net decrease of $0.2 billion resulting from income taxes, and interest and other financial charges. The overall foreign currency impact on consolidated earnings was a decrease of $0.3 billion. ·Industrial earnings increased $0.5 billion due to increased earnings at Corporate of $0.8 billion, or 17%, as current year gains were $1.9 billion higher and pension costs were $0.7 billion lower than 2015. These increases to earnings were partially offset by $1.8 billion of higher restructuring and other charges. Industrial earnings decreased due to decreased industrial segment earnings of $0.4 billion, or 2%, as decreases at Oil & Gas, Energy Connections & Lighting, and Transportation were partially offset by increases at Aviation, Power, Healthcare and Renewable Energy. This decrease in industrial segment earnings, was primarily driven by decreases in organic operating profit* of $0.8 billion and the net effect of dispositions of $0.5 billion, partially offset by the net effect of acquisitions of $0.9 billion. ·Financial Services losses decreased $6.7 billion, or 84%, primarily due to the absence of the 2015 charges associated with the GE Capital Exit Plan. ·In addition to the effects on net earnings described above, earnings per share amounts were also positively impacted by the reduction in number of outstanding common shares compared to 2015. The average number of shares outstanding used to calculate 2016 earnings per share amounts was 9% lower than 2015, primarily due to the 2015 Synchrony Financial share exchange and ongoing share buyback activities funded in large part by dividends from GE Capital.

*Non-GAAP Financial Measure

GE 2016 FORM 10-K 29

CONSOLIDATED RESULTS

(Dollars in billions)

REVENUE COMMENTARY: 2015 – 2014

EARNINGS COMMENTARY: 2015 – 2014

Consolidated revenues increased $0.2 billion, primarily driven by increased Industrial revenues of $0.4 billion and a decrease in eliminations between Industrial and Financial Services of $0.4 billion, partially offset by decreased Financial Services revenues of $0.5 billion. The overall foreign currency impact on consolidated revenues was a decrease of $4.9 billion. ·Industrial revenues increased $0.4 billion due an increase at Corporate of $1.3 billion, or 75%, as 2015 gains were $1.4 billion higher than 2014 year gains. This was offset by decreases in industrial segment revenues of $0.9 billion, or 1%, as decreases at Oil & Gas, Healthcare and Renewable Energy were partially offset by increases at Power, Aviation, Energy Connections & Lighting and Transportation. The $0.9 billion decrease in industrial segment revenues was primarily driven by the translational effects of a stronger U.S. dollar of $4.8 billion and the net effects of dispositions of $1.1 billion, partially offset by the net effects of acquisitions of $2.2 billion. Excluding the effects of acquisitions, dispositions and currency exchange, industrial segment organic revenues* increased by $2.8 billion, or 3%. ·Financial Services revenues decreased $0.5 billion, or 5%, primarily due to organic revenue declines, primarily resulting from lower ending net investment (ENI), lower gains and higher impairments, partially offset by the effects of acquisitions and dispositions.

Consolidated continuing earnings decreased $7.9 billion, or 83%, primarily driven by decreased Financial Services net earnings of $9.2 billion, partially offset by an increase in Industrial continuing earnings of $1.3 billion. The overall foreign currency impact on consolidated earnings was a decrease of $0.6 billion. ·Industrial earnings increased 1.3 billion, or 11%, due to increased industrial segment earnings of $0.2 billion, or 1%, as increases at Aviation, Energy Connections & Lighting, Transportation and Power were partially offset by decreases at Oil & Gas, Renewable Energy and Healthcare.  This increase in industrial segment earnings was primarily driven by increases in organic operating profit* of $1.2 billion, partially offset by the translational currency exchange effects of a stronger U.S. dollar of $0.7 billion, net acquisitions of $0.1 billion and net dispositions of $0.2 billion. Industrial earnings at Corporate increased an additional $1.1 billion, or 18%, as 2015 gains were $1.4 billion higher than 2014 gains, partially offset by $0.5 billion of higher Principal retirement plan costs in 2015. ·Financial Services net earnings decreased $9.2 billion, primarily due to 2015 charges associated with the GE Capital Exit Plan.

See Segment Results and Corporate Items & Eliminations sections within the MD&A for more information.

Also, see the Other Consolidated Information section within the MD&A for a discussion of postretirement benefit plans costs, income taxes and geographic data.

*Non-GAAP Financial Measure

GE 2016 FORM 10-K 30

GE CAPITAL

GE Capital results include continuing operations, which are reported in the Capital segment (see Segment discussion), and discontinued operations (see Discontinued Operations section and Note 2).

THE GE CAPITAL EXIT PLAN

On April 10, 2015, the Company announced a plan (the GE Capital Exit Plan) to create a simple, more valuable company by reducing the size of its financial services businesses through the sale of most of the assets of GE Capital over the following 24 months and aligning a smaller GE Capital with GE's industrial businesses.

Under the GE Capital Exit Plan, the Company is retaining certain GE Capital businesses, principally its vertical financing businesses—GE Capital Aviation Services (GECAS), Energy Financial Services (EFS) and Industrial Finance (which includes Healthcare Equipment Finance, Working Capital Solutions and Industrial Financing Solutions)—that relate to the Company's core industrial domain and other operations, including our run-off insurance activities, and allocated corporate costs (together referred to as GE Capital Verticals or Verticals).

As a result of the GE Capital Exit Plan dispositions, GE Capital has paid $24.4 billion in dividends to GE in 2015 and 2016 ($4.3 billion and $20.1 billion, respectively). We expect GE Capital to release additional dividends of up to approximately $10 billion through the remainder of the plan. In January 2017, GE received an additional $2.0 billion of common dividends from GE Capital. As of December 31, 2016, we are ahead of our plan, having signed agreements with buyers for $197 billion of ending net investment (ENI), excluding liquidity (as originally reported at December 31, 2014), of which $190 billion has closed. As of December 31, 2016, we have substantially completed the dispositions related to the GE Capital Exit Plan. In addition, as part of our initiative to reduce the size of our financial services businesses, we completed the split-off of our remaining interest in GE Capital's North American Retail Finance business, Synchrony Financial, to holders of GE common stock, which resulted in a $20.4 billion buyback of GE common stock (671.4 million shares) in 2015. In connection with the GE Capital Exit Plan, we completed a legal reorganization of GE Capital that included a merger of GE Capital into GE, a guarantee by GE of GE Capital debt, and an exchange of $36 billion of GE Capital debt for new notes guaranteed by GE. The result of all these actions reduced GE Capital's total assets by 63% from $500 billion at December 31, 2014 to $183 billion at December 31, 2016. From inception of plan through December 31, 2016, we incurred charges of $22.0 billion. Due to anticipated tax benefits and gains, we do not expect total after-tax charges through the completion of the GE Capital Exit Plan to exceed our initial $23 billion estimate.

On March 31, 2016, GE filed its request to the Financial Stability Oversight Council (FSOC) for rescission of GE Capital's designation as a nonbank Systemically Important Financial Institution (SIFI). On June 28, 2016, the FSOC rescinded GE Capital's designation as a nonbank SIFI.

SALES AGREEMENTS

During 2016, GE signed agreements to sell approximately $40 billion of ENI, excluding liquidity (as originally reported at December 31, 2014), of which approximately $19 billion, $21 billion and less than $1 billion related to our Commercial Lending and Leasing (CLL), Consumer and Real Estate businesses, respectively.

Sales representing approximately $86 billion of ENI, excluding liquidity (as originally reported at December 31, 2014) closed during 2016, including approximately $70 billion, $16 billion and less than $1 billion related to our CLL, Consumer and Real Estate businesses, respectively.

GE 2016 FORM 10-K 31

AFTER-TAX CHARGES RELATED TO THE GE CAPITAL EXIT PLAN

During 2016, GE recorded less than $0.1 billion of after-tax charges related to the GE Capital Exit Plan of which $0.7 billion of net benefits were recorded in continuing operations and $0.7 billion of after-tax charges were recorded in discontinued operations. A description of these after-tax charges for 2016 is provided below.

· $1.3 billion of net loss primarily related to the completed and planned dispositions of Consumer and most of the CLL businesses, which was recorded in discontinued operations under the caption "Earnings (loss) from discontinued operations, net of taxes" in the Statement of Earnings.

· $0.3 billion of charges associated with the preferred equity exchange that was completed in January 2016, which was recorded in continuing operations and reported in GE Capital's corporate component under the caption "Preferred stock dividends" in the Statement of Earnings.

· These charges were offset by tax benefits of $1.4 billion primarily related to increased tax efficiency of planned cash repatriations through increased foreign tax credit utilization of $0.8 billion and an IRS tax settlement of $0.6 billion. Of these benefits $1.1 billion was recorded in continuing operations and reported in GE Capital's corporate component under the caption "Benefit (provision) for income taxes" in the Statement of Earnings and $0.2 billion was recorded in discontinued operations under the caption "Earnings (loss) from discontinued operations, net of taxes" in the Statement of Earnings.

For additional information about the GE Capital Exit Plan 2015 sales agreements and after-tax charges, refer to our Form 8-K filed on June 3, 2016 related to the Annual Report on Form 10-K for the year ended December 31, 2015.

In addition to the above charges, during the year ended December 31, 2016, we have incurred other costs related to our ongoing liability management actions, including $0.6 billion of pre-tax losses related to the repurchase of $12.5 billion of long-term unsecured debt and subordinated debentures which were recorded in continuing operations.

GE 2016 FORM 10-K 32

SEGMENT OPERATIONS

SEGMENT CHANGES

· 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 historical results of the Appliances business prior to its sale in June 2016.

REVENUES AND PROFIT

Segment revenues include revenues and other income related to the segment.

Segment profit is determined based on internal performance measures used by the Chief Executive Officer (CEO) to assess the performance of each business in a given period. In connection with that assessment, the CEO may exclude matters such as charges for restructuring; rationalization and other similar expenses; acquisition costs and other related charges; technology and product development costs; certain gains and losses from acquisitions or dispositions; and litigation settlements or other charges, for which responsibility preceded the current management team. For additional information about costs excluded from segment profit, see Corporate Items and Eliminations section within this MD&A.

Segment profit excludes results reported as discontinued operations and material accounting changes. Segment profit also excludes 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:

· Interest and other financial charges, income taxes and GE preferred stock dividends are excluded in determining segment profit (which we sometimes refer to as "operating profit") for the industrial segments.

· Interest and other financial charges, income taxes and GE Capital preferred stock dividends are included in determining segment profit (which we sometimes refer to as "net earnings") for the Capital segment.

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 is allocated based on each segment's relative net cost of operations.

With respect to the segment revenue and profit walks, the overall effect of foreign exchange is included within multiple captions as follows:

· The translational foreign exchange impact is included within Foreign Exchange.

· The transactional impact of foreign exchange hedging is included in operating cost within Productivity and in other income within Other.

GE 2016 FORM 10-K 33

SIGNIFICANT SEGMENT DEVELOPMENTS

ALSTOM ACQUISITION

On November 2, 2015, we completed the acquisition of Alstom's Thermal, Renewables and Grid businesses, resulting in two months of activity in 2015 results and a full year of activity in 2016 results. The completion of the transaction followed the regulatory approval of the deal in over 20 countries and regions including the EU, U.S., China, India, Japan and Brazil. The cash purchase price was €9.2 billion (approximately $10.1 billion), net of cash acquired. The acquisition and alliances with Alstom affected our Power, Energy Connections & Lighting and Renewable Energy segments, and to a lesser extent our Oil & Gas segment.

At year-end 2015, our preliminary allocation of purchase price resulted in recognition of approximately $13.5 billion of goodwill, $5.2 billion of intangible assets, and $1.1 billion of unfavorable customer contract liabilities. The preliminary fair value of the associated noncontrolling interest was approximately $3.6 billion. As of the end of 2016, the amount of goodwill, intangible assets and unfavorable customer contract liabilities recognized was adjusted to approximately $17.3 billion, $4.4 billion, and $2.7 billion, respectively. The adjustments reflected revisions in estimates primarily related to cash flows and other valuation assumptions for customer contracts, increases to legal reserves, and other fair value adjustments related to acquired assets and liabilities. Deferred taxes, unrecognized tax benefits and other tax uncertainties were also adjusted under applicable accounting rules. We finalized our purchase accounting analysis in the fourth quarter of 2016. See Note 8 to the consolidated financial statements for further information.

For the year ended December 31, 2016, Alstom contributed revenues of $13.0 billion and an operating loss of $0.3 billion, of which $0.8 billion of profit is included in the segment results and $1.0 billion of charges is included in Corporate, primarily related to purchase accounting and acquisition related charges. Including the effects of tax benefits of $0.8 billion, net earnings were $0.4 billion for the year ended December 31, 2016. In addition, Alstom used cash flows from operating activities of $0.3 billion for the year ended December 31, 2016. Alstom related revenues and operating profit are presented separately in the segment revenues and profit walks that follow.

SALE OF APPLIANCES

On January 15, 2016, we announced the signing of an agreement to sell our Appliances business to Haier. On June 6, 2016, we completed the sale for proceeds of $5.6 billion (including $0.8 billion from the sale of receivables originated in our Appliances business and sold from GE Capital to Haier) and recognized an after-tax gain of $1.8 billion in 2016.

GE 2016 FORM 10-K 34

SUMMARY OF OPERATING SEGMENTS
	General Electric Company and consolidated affiliates
(In millions)		2016		2015		2014		2013		2012
Revenues
Power	$	26,827	$	21,490	$	20,580	$	19,315	$	20,364
Renewable Energy		9,033		6,273		6,399		4,824		7,373
Oil & Gas		12,898		16,450		19,085		17,341		15,539
Aviation		26,261		24,660		23,990		21,911		19,994
Healthcare		18,291		17,639		18,299		18,200		18,290
Transportation		4,713		5,933		5,650		5,885		5,608
Energy Connections & Lighting		15,133		16,351		15,724		15,907		15,379
Total industrial segment revenues		113,156		108,796		109,727		103,383		102,548
Capital		10,905		10,801		11,320		11,267		11,268
Total segment revenues		124,061		119,597		121,047		114,650		113,816
Corporate items and eliminations		(368)		(2,211)		(3,863)		(1,405)		(1,228)
Consolidated revenues	$	123,693	$	117,386	$	117,184	$	113,245	$	112,588
Segment profit
Power	$	4,979	$	4,502	$	4,486	$	4,328	$	4,368
Renewable Energy		576		431		694		485		914
Oil & Gas		1,392		2,427		2,758		2,357		2,064
Aviation		6,115		5,507		4,973		4,345		3,747
Healthcare		3,161		2,882		3,047		3,048		2,920
Transportation		1,064		1,273		1,130		1,166		1,031
Energy Connections & Lighting		311		944		677		491		442
Total industrial segment profit		17,598		17,966		17,764		16,220		15,487
Capital		(1,251)		(7,983)		1,209		401		1,245
Total segment profit		16,347		9,983		18,973		16,621		16,731
Corporate items and eliminations		(4,226)		(5,108)		(6,225)		(6,002)		(4,719)
GE interest and other financial charges		(2,026)		(1,706)		(1,579)		(1,333)		(1,353)
GE provision for income taxes		(967)		(1,506)		(1,634)		(1,667)		(2,013)
Earnings from continuing operations
attributable to GE common shareowners		9,128		1,663		9,535		7,618		8,646
Earnings (loss) from discontinued
operations, net of taxes		(954)		(7,495)		5,855		5,475		5,047
Less net earnings (loss) attributable to
noncontrolling interests, discontinued operations		(1)		312		157		36		53
Earnings (loss) from discontinued operations,
net of taxes and noncontrolling interests		(952)		(7,807)		5,698		5,439		4,995
Consolidated net earnings (loss)
attributable to GE common shareowners	$	8,176	$	(6,145)	$	15,233	$	13,057	$	13,641

GE 2016 FORM 10-K 35

SEGMENT RESULTS

(Dollars in billions)

INDUSTRIAL SEGMENT EQUIPMENT & SERVICES REVENUES		INDUSTRIAL SEGMENT PROFIT
	Equipment(a) Services(b)
(a)In 2015, $59.8 billion, excluding $1.1 billion related to Alstom.* In 2016, $52.7 billion, excluding $8.1 billion related to Alstom* (b)In 2015, $47.1 billion, excluding $0.8 billion related to Alstom.* In 2016, $47.5 billion, excluding $4.9 billion related to Alstom*		(a)$18.1 billion, excluding $(0.2) billion related to Alstom* (b)$16.8 billion, excluding $0.8 billion related to Alstom*
2016 – 2015 COMMENTARY
·Industrial segment revenues increased $4.4 billion, or 4%, primarily driven by increases at Power and Renewable Energy, mainly due to the effects of the Alstom acquisition, and an organic increase at Renewable Energy. This increase in industrial segment revenues was partially offset by lower revenues at Oil & Gas and Transportation, including the effects of foreign currency exchange of $0.3 billion at Oil & Gas. ·Industrial segment acquisition revenues, driven by Alstom, also positively affected Energy Connections & Lighting, however, this was mostly offset by the effects of disposition revenues related to the sale of Appliances in the second quarter of 2016 and sales of Meters, Intelligent Platforms Embedded Systems Products and Signaling businesses in 2015. ·Industrial segment profit decreased $0.4 billion, or 2%, mainly driven by lower earnings organically at Oil & Gas and Energy Connections & Lighting, as well as an unfavorable impact of foreign exchange, partially offset by higher earnings at Aviation, Power, Healthcare and Renewable Energy. ·Industrial segment operating profit margin decreased 90 bps to 15.6%, primarily driven by the effects of Alstom results. Excluding Alstom*, industrial segment operating profit margin was 16.8%, compared with 17.0% in 2015, reflecting core decreases at Power, Oil & Gas and Energy Connections & Lighting, that more than offset increases at Aviation, Healthcare and Transportation.

2015 – 2014 COMMENTARY

·Industrial segment revenues decreased $0.9 billion, or 1%, primarily driven by decreases at Oil & Gas, mainly related to the effects of foreign currency exchange and a decrease at Oil & Gas organically. This decrease was partially offset by higher revenues at Power, Energy Connections & Lighting, and Aviation, mainly as a result of organic increases, as well as the effects of the Alstom acquisition at Power and Energy Connections & Lighting, partially offset by the effects of dispositions related to the sale of Intelligent Platforms Embedded Systems Products and Wayne in 2015.

·Industrial segment profit increased $0.2 billion, or 1%, mainly driven by higher earnings at Aviation, Energy Connections & Lighting and Transportation, partially offset by lower earnings at Oil & Gas and Renewable Energy, as well as an unfavorable impact of foreign exchange.

·    Industrial segment operating profit margin increased 30 bps to 16.5% primarily driven by Aviation and Transportation, partially offset by the effects of the Alstom acquisition. Excluding Alstom*, industrial segment operating profit margin was 17.0%, compared with 16.2% in 2014, reflecting core increases at Power and Energy Connections & Lighting.

*Non-GAAP Financial Measure

GE 2016 FORM 10-K 36

POWER

BUSINESS OVERVIEW

Leader: Steve Bolze		Headquarters & Operations
	·Senior Vice President, GE and President & CEO, GE Power ·Over 20 years of service with General Electric		·22% of segment revenues ·24% of industrial segment revenues ·28% of industrial segment profit ·Headquarters: Schenectady, NY ·Serving customers in 140+ countries ·Employees: approximately 57,000
Products & Services
	Power serves power generation, industrial, government and other customers worldwide with products and services related to energy production and water reuse. Our products and technologies harness resources such as oil, gas, coal, diesel, nuclear and water to produce electric power and include gas and steam turbines, full balance of plant, upgrade and service solutions, as well as data-leveraging software.

· Gas Power Systems –offers a wide spectrum of heavy-duty and aeroderivative gas turbines for utilities, independent power producers and numerous industrial applications, ranging from small, mobile power to utility scale power plants.

· Steam Power Systems –offers steam power technology for coal and nuclear applications including boilers, generators, steam turbines, and Air Quality Control Systems (AQCS) to help efficiently produce power and provide performance over the life of a power plant.

· Power Services –delivers maintenance, service and upgrade solutions across total plant assets and over their operational lifecycle, leveraging the Industrial Internet to improve the performance of such solutions.

· Distributed Power – provides technology-based products and services to generate reliable and efficient power at or near the point of use. The product portfolio features highly efficient, fuel flexible industrial gas engines, including Jenbacher and Waukesha engines, that generate power for numerous industries globally.

· Water & Process Technologies – provides comprehensive chemical and equipment solutions and services to help manage and optimize water resources across numerous industries and municipalities, including water treatment, wastewater treatment and process system solutions.

· GE Hitachi Nuclear – offers advanced reactor technologies solutions, including reactors, fuels and support services for boiling water reactors, and is offered through joint ventures with Hitachi and Toshiba, for safety, reliability and performance for nuclear fleets.

Competition & Regulation

Worldwide competition for power generation products and services is intense. Demand for power generation is global and, as a result, is sensitive to the economic and political environments of each country in which we do business.

GE 2016 FORM 10-K 37

OPERATIONAL OVERVIEW

(Dollars in billions)

	2016 GEOGRAPHIC REVENUES: $ 26.8 BILLION	ORDERS
			Equipment Services
		(a) Includes $1.0 billion related to Alstom (b) Includes $10.0 billion related to Alstom
	2016 SUB-SEGMENT REVENUES	BACKLOG
	(a) Includes Water & Process Technologies, Distributed Power and GE Hitachi Nuclear		Equipment Services
		(a) Includes $15.5 billion related to Alstom (b) Includes $18.3 billion related to Alstom
	EQUIPMENT/SERVICES REVENUES	UNIT SALES
	Services                  Equipment
SIGNIFICANT TRENDS & DEVELOPMENTS

· The integration of Alstom's Thermal business has yielded significant efficiencies in supply chain, service infrastructure, new product development and SG&A costs.

· We announced our plan to sell our Water & Process Technologies business that will further position the business for long-term growth.

· We expanded our capabilities surrounding the manufacturing and supply of power plant equipment by acquiring Metem Corporation and a unit of South Korea's Doosan Engineering and Construction Company, which provides Heat Steam Recovery Generators.

· Digital offerings have been developed to further complement our equipment and services business and drive value and better outcomes for our customers.

· The business continues to invest in new product development, such as our new HA-Turbine, reciprocating engines and advanced upgrades, to expand our equipment and services offerings.

· Excess capacity in developed markets, continued pressure in oil and gas applications and macroeconomic and geopolitical environments result in uncertainty for the industry and business.

GE 2016 FORM 10-K 38

FINANCIAL OVERVIEW

(Dollars in billions)

SEGMENT REVENUES		SEGMENT PROFIT	SEGMENT PROFIT MARGIN
(a) $20.6 billion, excluding $0.9 billion related to Alstom* (b) $20.6 billion, excluding $6.3 billion related to Alstom*	Equipment Services	(a) $4.6 billion, excluding $(0.1) billion related to Alstom* (b) $4.4 billion, excluding $0.6 billion related to Alstom*	(a) 22.3%, excluding (8.7)% related to Alstom* (b) 21.5%, excluding 9.0% related to Alstom*

SEGMENT REVENUES & PROFIT WALK:					COMMENTARY:
2016 – 2015					2016 – 2015
					Segment revenues up $5.3 billion (25%); Segment profit up $0.5 billion (11%) as a result of: ·The increase in revenues was driven primarily by the effects of the Alstom acquisition, including higher sales at Steam Power Systems, as well as higher volume at Power Services, partially offset by the impact of a stronger U.S. dollar and lower other income. Core revenues were flat. ·The increase in profit was mainly driven by the effects of the Alstom acquisition, as well as material deflation, partially offset by lower cost productivity and an unfavorable business mix, driven by HA-Turbine shipments in the current year.
	Revenues		Profit
2015	$	21.5	$	4.5
Volume		0.1		-
Price		-		-
Foreign Exchange		(0.1)		-
(Inflation)/Deflation		N/A		0.1
Mix		N/A		(0.1)
Productivity		N/A		(0.1)
Other		(0.1)		(0.1)
Alstom		5.3		0.6
2016	$	26.8	$	5.0
2015 – 2014					2015 – 2014
					Segment revenues up $0.9 billion (4%); Segment profit was flat as a result of: ·The increase in revenues was mainly driven by higher volume, primarily at Power Services, as well as the effects of the Alstom acquisition, partially offset by the impact of a stronger U.S. dollar. ·Profit was flat as higher volume, the effects of deflation, higher prices, and favorable business mix were offset by lower productivity, including an increase in SG&A cost, the impact of a stronger U.S. dollar, and the effects of the Alstom acquisition.
	Revenues		Profit
2014	$	20.6	$	4.5
Volume		0.8		0.2
Price		0.1		0.1
Foreign Exchange		(0.8)		(0.1)
(Inflation)/Deflation		N/A		0.2
Mix		N/A		0.1
Productivity		N/A		(0.4)
Other		-		-
Alstom		0.9		(0.1)
2015	$	21.5	$	4.5

*Non-GAAP Financial Measure

GE 2016 FORM 10-K 39

RENEWABLE ENERGY

BUSINESS OVERVIEW

Leader: Jérôme Pécresse		Headquarters & Operations
	·Senior Vice President, GE and President & CEO, GE Renewable Energy ·Former Alstom Renewable Power Executive Vice President		·7% of segment revenues ·8% of industrial segment revenues ·3% of industrial segment profit ·Headquarters: Paris, France ·Serving customers in 80+ countries ·Employees: approximately 12,000
Products & Services
	GE Renewable Energy makes renewable power sources affordable, accessible, and reliable for the benefit of people everywhere. With one of the broadest technology portfolios in the industry, Renewable Energy creates value for customers with solutions from onshore and offshore wind, hydro, and emerging low carbon technologies. With operations in 40+ countries around the world, Renewable Energy can deliver solutions to where its customers need them most.

· Onshore Wind –provides technology and services for the onshore wind power industry by providing wind turbine platforms and hardware and software to optimize wind resources. Wind services help customers improve availability and value of their assets over the lifetime of the fleet. Digital Wind Farm is a site level solution, creating a dynamic, connected and adaptable ecosystem that improves our customers' fleet operations.

· Offshore Wind –offers its high-yield offshore wind turbine, Haliade 150-6MW, which is compatible with bottom fixed and floating foundations. It uses the innovative pure torque design and the Advanced High Density direct-drive Permanent Magnet Generator. Wind services support customers over the lifetime of their fleet.

· Hydro – provides a full range of solutions, products and services to serve the hydropower industry from initial design to final commissioning, from Low Head / Medium / High Head hydropower plants to pumped storage hydropower plants, small hydropower plants, concentrated solar power plants, geothermal power plants and biomass power plants.

Competition & Regulation

Renewable energy is now mainstream and more able to compete with other sources of power generation. While many factors, including government incentives and specific market rules, affect how renewable energy can deliver outcomes for customers in a given region, the point is the same: renewable energy is increasingly able to compete with fossil fuels. That is in large part due to technology. New innovations such as the digitization of renewable energy continue to drive down costs. We are also helping to make renewable energy more competitive through wind turbine product improvements, including larger rotors, taller towers and higher nameplate ratings that continue to drive down the cost of wind energy. As industry models continue to evolve, our digital strategy and investments in technical innovation will position us to add value for customers looking for clean, renewable energy.

GE 2016 FORM 10-K 40

OPERATIONAL OVERVIEW

(Dollars in billions)

	2016 GEOGRAPHIC REVENUES: $ 9.0 BILLION	ORDERS
			Equipment Services
		(a) Includes $0.5 billion related to Alstom (b) Includes $1.8 billion related to Alstom
	2016 SUB-SEGMENT REVENUES	BACKLOG
			Equipment Services
		(a) Includes $5.3 billion related to Alstom (b) Includes $5.5 billion related to Alstom
	EQUIPMENT/SERVICES REVENUES	UNIT SALES
	Services               Equipment
SIGNIFICANT TRENDS & DEVELOPMENTS

· Renewable energy has experienced a surge of development in the last decade. Renewable energy capacity additions account for approximately half of all power plant additions worldwide.

· The market to "repower" existing wind turbines – i.e., upgrade units that have been in service for a number of years to increase their efficiency and performance – is growing as the existing Onshore Wind turbine fleet is aging.  Repowering allows customers to increase the annual energy output of their installed base, provide more competitively priced energy, and extend the life of their assets.

· New Product Introductions continue to be a key lever as our customers show a willingness to invest in new technology that decreases the levelized cost of energy.

· The $1.7 billion planned acquisition of LM Wind Power will bolster the ability of the GE Onshore and Offshore wind businesses to add value for customers while in-sourcing production and also better serve the customers of LM Wind Power.

· In 2016, we introduced new software applications suite for the Digital Wind Farm.  The new apps, which streamline wind farm operations, are compatible with the company's latest 2 and 3 MW wind turbine platforms and GE's broader Predix software and diagnostics platform. The new applications can reduce maintenance costs by up to 10 percent and deliver one-to-three percent of additional revenue per site.

· The Offshore Wind business supported its customer, Deepwater Wind, in bringing the first ever offshore wind farm – the 30MW Block Island Wind Farm near Rhode Island – into commercial operation in the U.S.

· Continued competitive pressure from other wind turbine producers, as well as from other energy sources such as primarily solar photovoltaic, reinforced by a general move to auction mechanisms, increases price pressure and the need for innovation in the wind market.

GE 2016 FORM 10-K 41

FINANCIAL OVERVIEW

(Dollars in billions)

SEGMENT REVENUES		SEGMENT PROFIT	SEGMENT PROFIT MARGIN
(a) $6.2 billion, excluding $0.1 billion related to Alstom* (b) $7.9 billion, excluding $1.2 billion related to Alstom*	Equipment Services	(a) $0.5 billion, excluding $(0.1) billion related to Alstom* (b) $0.5 billion, excluding an insignificant amount related to Alstom*	(a) 8.1%, excluding (79.3)% related to Alstom* (b) 6.9%, excluding 2.6% related to Alstom*

SEGMENT REVENUES & PROFIT WALK:					COMMENTARY:
2016 – 2015					2016 – 2015
					Segment revenues up $2.8 billion (44%); Segment profit up $0.1 billion (34%) as a result of: ·The increase in revenues was due to higher volume, mainly driven by higher core equipment sales at Onshore Wind as a result of shipping 420 more onshore wind turbines than in the prior year, as well as higher sales at Hydro, driven by the effects of the Alstom acquisition. The increase was partially offset by lower other income, including negative foreign exchange transactional hedge impacts, and lower prices. ·The increase in profit was due to material deflation and higher volume, driven primarily by Onshore Wind, partially offset by lower other income, including negative foreign exchange transactional hedge impacts, lower prices and an unfavorable business mix, driven by low margin projects with higher services margins.
	Revenues		Profit
2015	$	6.3	$	0.4
Volume		2.0		0.1
Price		(0.1)		(0.1)
Foreign Exchange		(0.1)		-
(Inflation)/Deflation		N/A		0.2
Mix		N/A		(0.1)
Productivity		N/A		-
Other		(0.1)		(0.1)
Alstom		1.1		0.1
2016	$	9.0	$	0.6
2015 – 2014					2015 – 2014
					Segment revenues down $0.1 billion (2%); Segment profit down $0.3 billion (38%) as a result of: ·The decrease in revenues was primarily driven by the effects of a stronger U.S. dollar, partially offset by higher volume, driven by the sale of 2 MW onshore units, higher prices, the effects of the Alstom acquisition and other income. ·The decrease in profit was due to lower productivity, primarily driven by a shift to new products and technology, the effects of inflation, the effects of the Alstom acquisition and negative business mix, partially offset by higher prices and other income.
	Revenues		Profit
2014	$	6.4	$	0.7
Volume		0.3		-
Price		0.1		0.1
Foreign Exchange		(0.6)		-
(Inflation)/Deflation		N/A		(0.1)
Mix		N/A		(0.1)
Productivity		N/A		(0.1)
Other		0.1		0.1
Alstom		0.1		(0.1)
2015	$	6.3	$	0.4

*Non-GAAP Financial Measure

GE 2016 FORM 10-K 42

OIL & GAS

BUSINESS OVERVIEW

	Leader: Lorenzo Simonelli		Headquarters & Operations
		·Senior Vice President, GE and President & CEO, GE Oil & Gas ·Over 20 years of service with General Electric		·10% of segment revenues ·11% of industrial segment revenues ·8% of industrial segment profit ·Headquarters: London, UK ·Serving customers in 140+ countries ·Employees: approximately 34,000
Products & Services
		Oil & Gas serves all segments of the oil and gas industry, from drilling, completion, production and oil field operations, to transportation via liquefied natural gas (LNG) and pipelines. In addition, Oil & Gas provides industrial power generation and compression solutions to the refining and petrochemicals segments. Oil & Gas also delivers pipeline integrity solutions and a wide range of sensing, inspection and monitoring technologies. Oil & Gas exploits technological innovation from other GE segments, such as Aviation and Healthcare, to continuously improve oil and gas industry performance, output and productivity.

· Turbomachinery Solutions (TMS)– provides equipment and related services for mechanical-drive, compression and power-generation applications across the oil and gas industry. Our designs deliver high capacities and efficiencies, increase product flow and decrease both operational and environmental risks in the most extreme conditions, pressures and temperatures. Our portfolio includes drivers (aero-derivative gas turbines, heavy-duty gas turbines and synchronous and induction electric motors), compressors (centrifugal and axial, direct drive high speed, integrated, subsea compressors and turbo expanders), and turn-key solutions (industrial modules and waste heat recovery).

· Subsea Systems & Drilling (SS&D) – provides a broad portfolio of subsea products and services required to facilitate the safe and reliable flow of hydrocarbons from the subsea wellhead to the surface. In addition, the sub-segment designs and manufactures onshore and offshore drilling and production systems and equipment for floating production platforms and provides a full range of services related to onshore and offshore drilling activities.

· Digital Solutions (DS)–provides equipment and services for a wide range of industries, including oil & gas, power generation, aerospace, metals, and transportation. The offerings include sensor-based measurement; non-destructive testing and inspection; turbine, generator and plant controls and condition monitoring, as well as pipeline integrity solutions.

· Surface –provides products and services for onshore oil & gas wells and manufactures artificial lift equipment for extracting crude oil and other fluids from wells. Specific products include downhole tools for well integrity, dry trees and surface wellheads, electric submersible pumps, surface wellheads, wireline logging, artificial lift technologies, drilling pressure control equipment.

· Downstream Technology Solutions (DTS)– provides products and services to serve the downstream segments of the industry including refining, petrochemical, distributed gas, flow and process control and other industrial applications. Products include steam turbines, reciprocating and centrifugal compressors, pumps, valves, and compressed natural gas (CNG) and small-scale LNG solutions used primarily for shale oil and gas field development.

Competition & Regulation

Demand for oil and gas equipment and services is global and, as a result, is sensitive to the economic and political environment of each country in which we do business. We are subject to the regulatory bodies of the countries in which we operate. Our products are subject to regulation by U.S. and non-U.S. energy policies.

GE 2016 FORM 10-K 43

OPERATIONAL OVERVIEW

(Dollars in billions)

	2016 GEOGRAPHIC REVENUES: $ 12.9 BILLION	ORDERS
			Equipment Services
		(a) Includes $0.1 billion related to Alstom
	2016 SUB-SEGMENT REVENUES	BACKLOG
			Equipment Services
	(a) Previously referred to as Measurement & Controls (M&C)	(a) Includes $0.1 billion related to Alstom
	EQUIPMENT/SERVICES REVENUES
	ServicesEquipment
SIGNIFICANT TRENDS & DEVELOPMENTS

· In October 2016, we announced that our Oil & Gas business would combine with Baker Hughes to create a world-leading oilfield technology provider with mix of service and equipment. The combined businesses will be a leading equipment, technology and services provider in the oil and gas industry. The transaction is subject to the approval of Baker Hughes shareholders, regulatory approvals and other customary closing conditions.

· Lower oil prices leading to reductions in customers' forecasted capital expenditures create industry challenges, the effects of which are uncertain.

· We are impacted by volatility in foreign currency exchange rates mainly due to a high concentration of non-U.S. dollar denominated business as well as long-term contracts denominated in multiple currencies.

· In 2015, a portion of the Distributed Power business that provides turbines for oil and gas applications was realigned from the Power segment to the Oil & Gas segment.

· We continue to take significant cost reduction actions in response to the weakening oil & gas market.

GE 2016 FORM 10-K 44

FINANCIAL OVERVIEW

(Dollars in billions)

SEGMENT REVENUES		SEGMENT PROFIT	SEGMENT PROFIT MARGIN
(a) $12.8 billion, excluding $0.1 billion related to Alstom*	Equipment Services	(a) $1.4 billion, excluding an insignificant amount related to Alstom*	(a) 10.8%, excluding 6.5% related to Alstom*

SEGMENT REVENUES & PROFIT WALK:					COMMENTARY:
2016 – 2015					2016 – 2015
					Segment revenues down $3.6 billion (22%); Segment profit down $1.0 billion (43%) as a result of: ·The decrease in revenues was mainly due to lower core volume across all sub-segments, primarily Surface and SS&D, due to lower oil prices, as well as the effects of a stronger U.S. dollar, and lower other income, including negative foreign exchange transactional hedge impacts, partially offset by the effects of the Alstom acquisition. ·The decrease in profit was primarily market driven, mainly due to lower core volume across all sub-segments due to lower oil prices, which, despite the effects of restructuring actions, drove lower cost productivity. Profit was also adversely impacted by unfavorable foreign exchange transactional hedge impacts in the year. These decreases were partially offset by material deflation. Operating profit excluding the effects of foreign exchange of $0.1 billion was $1.5 billion (down 37% compared with prior year).*
	Revenues		Profit
2015	$	16.5	$	2.4
Volume		(3.0)		(0.4)
Price		(0.3)		(0.3)
Foreign Exchange		(0.3)		-
(Inflation)/Deflation		N/A		0.2
Mix		N/A		-
Productivity		N/A		(0.5)
Other		(0.1)		-
Alstom		0.1		-
2016	$	12.9	$	1.4
2015 – 2014					2015 – 2014
					Segment revenues down $2.6 billion (14%); Segment profit down $0.3 billion (12%) as a result of: ·The decrease in revenues was primarily due to the impact of a stronger U.S. dollar and lower volume at Surface and SS&D, driven by lower oil prices. Organic revenues* were down 5% compared with prior year. ·The decrease in profit was primarily due to the impact of a stronger U.S. dollar and lower volume at Surface and SS&D, driven by lower oil prices, partially offset by the effects of deflation and cost productivity. Organic profit* increased 1% compared with prior year.
	Revenues		Profit
2014	$	19.1	$	2.8
Volume		(1.0)		(0.1)
Price		-		-
Foreign Exchange		(1.6)		(0.3)
(Inflation)/Deflation		N/A		0.1
Mix		N/A		-
Productivity		N/A		0.1
Other		-		-
Alstom		-		-
2015	$	16.5	$	2.4

*Non-GAAP Financial Measure

GE 2016 FORM 10-K 45

AVIATION

BUSINESS OVERVIEW

	Leader: David Joyce		Headquarters & Operations
		·Vice Chairman, GE and President & CEO, GE Aviation ·Over 30 years of service with General Electric		·21% of segment revenues ·23% of industrial segment revenues ·35% of industrial segment profit ·Headquarters: Cincinnati, OH ·Serving customers in 120+ countries ·Employees: approximately 45,000
Products & Services
		Aviation designs and produces commercial and military aircraft engines, integrated digital components, electric power and mechanical aircraft systems. We also provide aftermarket services to support our products.

· Commercial Engines – manufactures jet engines and turboprops for commercial airframes. Our commercial engines power aircraft in all categories; regional, narrowbody and widebody. We also manufacture engines and components for business and general aviation segments.

· Commercial Services – provides maintenance, component repair and overhaul services (MRO), including sales of replacement parts.

· Military – manufactures jet engines for military airframes. Our military engines power a wide variety of military aircraft including fighters, bombers, tankers, helicopters and surveillance aircraft, as well as marine applications. We provide maintenance, component repair and overhaul services, including sales of replacement parts.

· Systems – provides components, systems and services for commercial and military segments. This includes avionics systems, aviation electric power systems, flight efficiency and intelligent operation services, aircraft structures and Avio Aero.

· Additive – provides machines for metal additive manufacturing for industry and comprises our existing technologies as well as two new acquisitions, enabling the design and manufacture of complex parts and leverage of technology for improved cost and performance.

· We also produce and market engines through CFM International, a company jointly owned by GE and Snecma, a subsidiary of SAFRAN of France, and Engine Alliance, LLC, a company jointly owned by GE and the Pratt & Whitney division of United Technologies Corporation. New engines are also being designed and marketed in a joint venture with Honda Aero, Inc., a division of Honda Motor Co., Ltd.

Competition & Regulation

The global businesses for aircraft jet engines, maintenance component repair and overhaul services (including parts sales) are highly competitive. Both U.S. and non-U.S. markets are important to the growth and success of the business. Product development cycles are long and product quality and efficiency are critical to success. Research and development expenditures are important in this business, as are focused intellectual property strategies and protection of key aircraft engine design, manufacture, repair and product upgrade technologies. Aircraft engine orders and systems tend to follow civil air travel and demand and military procurement cycles.

Our product, services and activities are subject to a number of regulators such as by the U.S. Federal Aviation Administration (FAA), European Aviation Safety Agency (EASA) and other regulatory bodies.

GE 2016 FORM 10-K 46

OPERATIONAL OVERVIEW

(Dollars in billions)

	2016 GEOGRAPHIC REVENUES: $ 26.3 BILLION	ORDERS
			Equipment Services
	2016 SUB-SEGMENT REVENUES	BACKLOG
			Equipment Services
	EQUIPMENT/SERVICES REVENUES	UNIT SALES
		(a)GEnx and LEAP engines are a subset of commercial engines (b)Commercial spares shipment rate in millions of dollars per day
	Services                    Equipment
SIGNIFICANT TRENDS & DEVELOPMENTS

· The installed base continues to grow with new product launches. In 2016, through our CFM joint venture, we successfully launched the LEAP engine for application on the Airbus A320 NEO. Another variant of the engine, applied to the Boeing 737 MAX aircraft, is expected to enter in service in 2017. We are also continuing development on the Advanced Turbo Prop program, and the GE9X engine incorporating the latest technologies for application in the widebody aircraft space.

· During the fourth quarter of 2016, Aviation completed its acquisition of a 75% stake in Concept Laser GmbH, a German company specializing in powder bed based laser metal printing, and a 76.2% stake in Arcam AB, a Swedish company specializing in electron beam melting systems. We expect both of these investments in the additive manufacturing space to open a new market segment and also realize manufacturing efficiencies for GE.

· Our digital industrial business is providing insights and operational value for our customers, unlocking opportunities to deliver more productivity beyond our traditional services and becoming a better partner as we work on solving our customers' toughest operational problems. Our digital factory initiatives, including digital design tools, advanced and automated inspection, and advanced manufacturing analytics are enabling our operations, partners and suppliers to dramatically reduce cycle time while improving quality.

· We expect an uptick in military shipments and continue to advance our next generation science and technology programs, two of which were awarded contracts in 2016.

GE 2016 FORM 10-K 47

FINANCIAL OVERVIEW

(Dollars in billions)

SEGMENT REVENUES		SEGMENT PROFIT	SEGMENT PROFIT MARGIN
	Equipment Services

SEGMENT REVENUES & PROFIT WALK:					COMMENTARY:
2016 – 2015					2016 – 2015
					Segment revenues up $1.6 billion (6%); Segment profit up $0.6 billion (11%) as a result of: ·The increase in revenues was primarily due to higher services volume and LEAP engine shipments, partially offset by lower equipment volume driven by lower Military shipments. Revenues also increased as a result of higher engines and services pricing. Prices increased in response to higher material and conversion costs. ·The increase in profit was mainly due to higher cost productivity, driven by higher services volume and prices. These increases were partially offset by the effects of inflation, an unfavorable business mix driven by LEAP shipments, and lower other income.
	Revenues		Profit
2015	$	24.7	$	5.5
Volume		1.5		0.3
Price		0.2		0.2
Foreign Exchange		-		-
(Inflation)/Deflation		N/A		(0.2)
Mix		N/A		(0.1)
Productivity		N/A		0.5
Other		-		(0.1)
2016	$	26.3	$	6.1
2015 – 2014					2015 – 2014
					Segment revenues up $0.7 billion (3%); Segment profit up $0.5 billion (11%) as a result of: ·The increase in revenues was due to higher prices in Commercial Engines and higher services volume, partially offset by decreased equipment sales. ·The increase in profit was mainly due to higher prices, favorable business mix and higher cost productivity, partially offset by the effects of inflation and lower other income.
	Revenues		Profit
2014	$	24.0	$	5.0
Volume		0.1		-
Price		0.5		0.5
Foreign Exchange		-		-
(Inflation)/Deflation		N/A		(0.2)
Mix		N/A		0.2
Productivity		N/A		0.1
Other		-		(0.1)
2015	$	24.7	$	5.5

GE 2016 FORM 10-K 48

HEALTHCARE

BUSINESS OVERVIEW

	Leader: John L. Flannery			Headquarters & Operations
			·Senior Vice President, GE and President & CEO, GE Healthcare ·Over 25 years of service with General Electric		·15% of segment revenues ·16% of industrial segment revenues ·18% of industrial segment profit ·Headquarters: Chicago, IL ·Serving customers in 140+ countries ·Employees: approximately 54,000
Products & Services
		Healthcare provides essential healthcare technologies to developed and emerging markets and has expertise in medical imaging, digital solutions, patient monitoring and diagnostics, drug discovery, biopharmaceutical manufacturing technologies and performance improvement solutions. Products and services are sold worldwide primarily to hospitals, medical facilities, pharmaceutical and biotechnology companies, and to the life science research market.

· Healthcare Systems – provides a wide range of technologies and services that include diagnostic imaging and clinical systems. Diagnostic imaging systems such as X-ray, digital mammography, computed tomography (CT), magnetic resonance (MR), surgical and interventional imaging and molecular imaging technologies allow clinicians to see inside the human body more clearly. Clinical systems such as ultrasound, electrocardiography (ECG), bone densitometry, patient monitoring, incubators and infant warmers, respiratory care, and anesthesia management that enable clinicians to provide better care for patients every day –from wellness screening to advanced diagnostics to life-saving treatment. Healthcare systems also offers product services that include remote diagnostic and repair services for medical equipment manufactured by GE and by others.

· Life Sciences –delivers products, services and manufacturing solutions for drug discovery, the biopharmaceutical industry and cellular technologies, so scientists and specialists discover new ways to predict, diagnose and treat disease. It also researches, manufactures and markets innovative imaging agents used during medical scanning procedures to highlight organs, tissue and functions inside the human body, to aid physicians in the early detection, diagnosis and management of disease through advanced in-vivo diagnostics.

· Healthcare Digital –provides medical technologies, software, analytics, cloud solutions, implementation and services to drive increased access, enhanced quality and more affordable healthcare around the world. By combining digital and industrial, software and hardware, Healthcare Digital delivers integrated digital solutions that improve outcomes.

Competition & Regulation

Healthcare competes with a variety of U.S. and non-U.S. manufacturers and services providers. Customers require products and services that allow them to provide better access to healthcare, improve the affordability of care, and improve the quality of patient outcomes. Technology and solution innovation to provide products that meet these customer requirements and competitive pricing are among the key factors affecting competition for these products and services. New technologies and solutions could make our products and services obsolete unless we continue to develop new and improved products and services.

Our products are subject to regulation by numerous government agencies, including the U.S. Food and Drug Administration (U.S. FDA), as well as various laws and regulations that apply to claims submitted under Medicare, Medicaid or other government funded healthcare programs.

GE 2016 FORM 10-K 49

OPERATIONAL OVERVIEW

(Dollars in billions)

	2016 GEOGRAPHIC REVENUES: $ 18.3 BILLION	ORDERS
			Equipment Services
	2016 SUB-SEGMENT REVENUES	BACKLOG
			Equipment Services
	EQUIPMENT/SERVICES REVENUES
	Services  Equipment
SIGNIFICANT TRENDS & DEVELOPMENTS

· We continue to lead in technology innovation with greater focus on productivity based technology, services, and IT/cloud-based solutions as healthcare providers seek greater productivity and efficiency.

· The U.S. market is facing uncertainty regarding the future of the Affordable Care Act. Emerging markets are expected to grow long-term with short-term volatility. The China market was more robust in 2016 and is expected to be a source of growth.

· Life Sciences is expanding its business through bioprocess market growth and enterprise solutions.

GE 2016 FORM 10-K 50

FINANCIAL OVERVIEW

(Dollars in billions)

SEGMENT REVENUES		SEGMENT PROFIT	SEGMENT PROFIT MARGIN
	Equipment Services

SEGMENT REVENUES & PROFIT WALK:					COMMENTARY:
2016 – 2015					2016 – 2015
					Segment revenues up $0.7 billion (4%); Segment profit up $0.3 billion (10%) as a result of: ·The increase in revenues was primarily due to higher volume in Life Sciences and Healthcare Systems, as well as higher other income, partially offset by lower prices at Healthcare Systems and the effects of a stronger U.S. dollar. ·The increase in profit was primarily driven by higher cost productivity, including the effects of previous restructuring actions and strong volume growth, partially offset by lower prices at Healthcare Systems.
	Revenues		Profit
2015	$	17.6	$	2.9
Volume		1.0		0.2
Price		(0.3)		(0.3)
Foreign Exchange		(0.1)		-
(Inflation)/Deflation		N/A		-
Mix		N/A		-
Productivity		N/A		0.4
Other		0.1		-
2016	$	18.3	$	3.2
2015 – 2014					2015 – 2014
					Segment revenues down $0.7 billion (4%); Segment profit down $0.2 billion (5%) as a result of: ·The decrease in revenues was primarily due to the effects of a stronger U.S. dollar, as well as lower prices, mainly at Healthcare Systems, partially offset by higher volume in Life Sciences and Healthcare Systems. ·The decrease in profit was primarily due to lower prices, mainly in Healthcare Systems, the effects of inflation and the impact of a stronger U.S. dollar, partially offset by higher productivity, as increased R&D and related costs were more than offset by higher cost productivity, and higher volume.
	Revenues		Profit
2014	$	18.3	$	3.0
Volume		0.8		0.1
Price		(0.3)		(0.3)
Foreign Exchange		(1.1)		(0.1)
(Inflation)/Deflation		N/A		(0.2)
Mix		N/A		-
Productivity		N/A		0.3
Other		(0.1)		-
2015	$	17.6	$	2.9

GE 2016 FORM 10-K 51

TRANSPORTATION

BUSINESS OVERVIEW

Leader: Jamie S. Miller		Headquarters & Operations
	·Senior Vice President, GE and President & CEO, GE Transportation ·8 years of service with General Electric		·4% of segment revenues ·4% of industrial segment revenues ·6% of industrial segment profit ·Headquarters: Chicago, IL ·Serving customers in 60+ countries ·Employees: approximately 10,000

Products & Services
		Transportation is a global technology leader and supplier to the railroad, mining, marine, stationary power and drilling industries. Products and services offered by Transportation include:

· Locomotives – we provide freight and passenger locomotives as well as rail services to help solve rail challenges. We manufacture high-horsepower, diesel-electric locomotives including the Evolution Series^TM, which meets or exceeds the U.S. Environmental Protection Agency's (EPA) Tier 4 requirements for freight and passenger applications.

· Services – we develop partnerships that support advisory services, parts, integrated software solutions and data analytics. Our comprehensive offerings include tailored service programs, high-quality parts for GE and other locomotive platforms, overhaul, repair and upgrade services, and wreck repair. Our portfolio provides the people, partnerships and leading software to optimize operations and asset utilization.

· Digital Solutions – we offer a suite of software-enabled solutions to help our customers lower operational costs, increase productivity and improve service quality and reliability.

· Mining – we provide mining equipment and services. The portfolio includes drive systems for off-highway vehicles, mining equipment, mining power and productivity.

· Marine, Stationary & Drilling –we offer marine diesel engines and stationary power diesel engines and motors for land and offshore drilling rigs.

Competition & Regulation

The competitive environment for locomotives and mining equipment and services consists of large global competitors. A number of smaller competitors compete in a limited-size product range and geographic regions. North America will remain a focus of the industry, due to the EPA Tier 4 emissions standard that went into effect in 2015.

GE 2016 FORM 10-K 52

OPERATIONAL OVERVIEW

(Dollars in billions)

	2016 GEOGRAPHIC REVENUES: $ 4.7 BILLION	ORDERS
			Equipment Services
	2016 SUB-SEGMENT REVENUES	BACKLOG
	(a) Includes Digital Solutions and Marine, Stationary & Drilling		Equipment Services
	EQUIPMENT/SERVICES REVENUES	UNIT SALES
	Services                Equipment
SIGNIFICANT TRENDS & DEVELOPMENTS

· Rail carload volumes, especially in North America, continue to decline and the number of parked locomotives remained high throughout 2016.

· Demand for natural resources remains low, driving a decline in the overall mining industry.

· Global locomotive deliveries were down from 985 units in 2015 to 749 units in 2016, due to a lower need for power across the railroad industry.

· The Signaling business was sold to Alstom on November 2, 2015 for approximately $0.8 billion, on which we recognized a pre-tax gain of $0.6 billion, which was reported in Corporate.

GE 2016 FORM 10-K 53

FINANCIAL OVERVIEW

(Dollars in billions)

SEGMENT REVENUES		SEGMENT PROFIT	SEGMENT PROFIT MARGIN
	Equipment Services

SEGMENT REVENUES & PROFIT WALK:					COMMENTARY:
2016 – 2015					2016 – 2015
					Segment revenues down $1.2 billion (21%); Segment profit down $0.2 billion (16%) as a result of: ·The decrease in revenues was primarily driven by lower equipment volume, driven by 236 fewer locomotive shipments than in the prior year, as well as lower services volume due to higher parked locomotives. The decrease in revenues was also impacted by the Signaling business disposition in November 2015. ·The decrease in profit was primarily driven by lower volume, partially offset by material deflation and higher cost productivity, as well as the effects of restructuring actions.
	Revenues		Profit
2015	$	5.9	$	1.3
Volume		(1.2)		(0.2)
Price		-		-
Foreign Exchange		-		-
(Inflation)/Deflation		N/A		0.1
Mix		N/A		-
Productivity		N/A		-
Other		-		-
2016	$	4.7	$	1.1
2015 – 2014					2015 – 2014
					Segment revenues up $0.3 billion (5%); Segment profit up $0.1 billion (13%) as a result of: ·The increase in revenues was primarily due to higher volume driven by Tier 4 locomotive sales, partially offset by the Signaling disposition. ·The increase in profit was primarily due to higher productivity, including a reduction in SG&A cost, and higher volume driven by Tier 4 locomotive sales, partially offset by negative business mix.
	Revenues		Profit
2014	$	5.7	$	1.1
Volume		0.3		0.1
Price		-		-
Foreign Exchange		-		-
(Inflation)/Deflation		N/A		-
Mix		N/A		(0.2)
Productivity		N/A		0.2
Other		-		-
2015	$	5.9	$	1.3

GE 2016 FORM 10-K 54

ENERGY CONNECTIONS & LIGHTING

BUSINESS OVERVIEW

Leaders:  Russell Stokes,                  William Lacey & Maryrose Sylvester			Headquarters & Operations
		·Senior Vice President, GE and President & CEO, GE Energy Connections ·Over 20 years of service with General Electric ·Vice President, GE and President & CEO, GE Lighting ·25 years of service with General Electric ·Vice President, GE and President & CEO, Current, powered by GE ·Over 25 years of service with General Electric		·12% of segment revenues ·13% of industrial segment revenues ·2% of industrial segment profit ·Energy Connections HQ: Atlanta, GA ·GE Lighting HQ: East Cleveland, OH ·Current, powered by GE HQ: Boston, MA ·Serving customers in 150+ countries ·Employees: approximately 53,000
Products & Services
	GE Energy Connections designs and deploys industry-leading technologies that transport, convert, automate and optimize energy to ensure safe, efficient and reliable electrical power. Combining all the resources and scale of the world's digital industrial company, we connect brilliant machines, grids, and systems to power utility, oil & gas, marine, mining and renewables customers, that keep our world running. Lighting includes the GE Lighting business, which is primarily focused on consumer lighting applications in the U.S., and Current, powered by GE (Current), which is focused on providing energy efficiency and productivity solutions for commercial and industrial customers.

Energy Connections

· Industrial Solutions – creates advanced technologies that safely, reliably and efficiently distribute and control electricity to protect people, property and equipment. We provide high performance software and control solutions and offer products such as circuit breakers, relays, arresters, switchgear, panel boards and repair for the commercial, data center, healthcare, mining, renewable energy, oil & gas, water and telecommunication markets.

· Grid Solutions – a GE and Alstom joint venture, equips 90% of power utilities worldwide to bring power from the point of generation to end consumers. With over 200 years combined experience in providing advanced energy solutions, our products and services enable more resilient, efficient and reliable power systems. Our products and services, such as high voltage equipment, power electronics, automation and protection equipment, software solutions, in addition to our robust projects and services capabilities modernize the grid. We serve industries such as generation, transmission, distribution, oil & gas, telecommunication, mining and water and our strategic partnership ventures, primarily in Mexico and China, allow us to support our customers through various product and service offerings.

· Power Conversion – applies the science and systems of power conversion to help drive the electric transformation of the world's energy infrastructure. Our product portfolio includes motors, generators, automation and control equipment and drives for energy intensive industries such as marine, oil & gas, renewable energy, mining, rail, metals, test systems and water.

GE 2016 FORM 10-K 55

· Automation & Controls– serves as the Controls Center of Excellence for GE and is leading the next chapter in GE's digital industrial journey and transformation. In partnership with GE Digital, the Global Research Center, and GE businesses around the world, we are focused on the future of control solutions – helping customers become more productive and efficient. Each year $21 billion of GE equipment is sold with controls inside of them. Controls are critical to keeping industry running and connected. They are the brains of industrial equipment, connecting data and machines.

Lighting

· GE Lighting – focused on driving innovation and growth in light emitting diode (LED) and connected home technology. The business offers LEDs in a variety of shapes, sizes, wattages and color temperatures. It's also investing in the growing smart home category, building a suite of connected lighting products with simple connection points that offer new opportunities to do more at home.

· Current–delivers energy efficiency and productivity solutions for commercial and industrial customers. We combine infrastructure technology like LED and solar with new sensor-enabled data networks and Predix-based digital applications to help our customers reduce energy costs, better predict spend and gain business productivity insights. We partner with a wide variety of digital companies to help expand our application catalog, and we offer flexible financing solutions that help our customers achieve faster payback periods and better long-term value.

Competition & Regulation

Energy Connections & Lighting faces competition from businesses operating with global presence and with deep energy domain expertise. Our products and services sold to end customers are often subject to a number of regulatory specification and performance standards under different federal, state, foreign and energy industry standards. The potential combination of energy technologies like lighting and solar with sensor-based data networks is unlocking new Internet of Things (IoT) capabilities for the commercial and industrial market in which Current operates and introducing new competitors.

SIGNIFICANT TRENDS & DEVELOPMENTS

Energy Connections

· We are continuing to see growth in renewable energy industries, specifically wind & solar industries, which is driving demand in our Power Conversion business for equipment and services. This growth is offset by the decline in the oil & gas industry.

· We see soft demand in the North American and European electrical distribution market, and continued soft demand in other parts of the developed world. There are signs of market improvements in China, but the Asia Pacific region has mixed results.

· The U.S. electrical grid capacity is high and load growth is expected to be slow in the near term; spending by utilities in the U.S. continues to be focused more heavily on sustaining operations versus capital investment.

· Integrating large shares of renewables will require strengthening of the grid and ensuring the availability of power plants to dispatch at short notice; these system integration tools may present further business opportunities, and will be needed to pave the way for further decarbonization.

· In December 2016, we announced our plan to sell our Industrial Solutions business.

· The Intelligent Platforms Embedded Systems Products business of Automation & Control was sold in December 2015 for approximately $0.5 billion and the Electricity Meters business of Grid Solutions was sold in December 2015 for approximately $0.2 billion.

Lighting

· In the last decade, the lighting industry has seen a major technology pivot away from traditional lighting products, including incandescent, halogen and specialty linear fluorescent lamps to energy-saving LEDs. That shift has been supported by the U.S. government phasing out incandescent bulbs and declining prices overall for LEDs. We estimate half of all residential sockets in the U.S. will convert to LED by 2020. This shift aligns with our LED focus.

· In 2016, GE Lighting and Current both made strategic organizational changes to help reduce costs, focus on key markets and simplify the businesses.

Appliances

· In June 2016, we completed the sale of our Appliances business to Haier for $5.6 billion (including $0.8 billion from the sale of receivables originated in our Appliances business and sold from GE Capital to Haier), on which we recognized an after-tax gain of $1.8 billion, which is reported in Corporate.

GE 2016 FORM 10-K 56

OPERATIONAL OVERVIEW

(Dollars in billions)

2016 GEOGRAPHIC REVENUES: $ 15.1 BILLION	ORDERS
		Equipment Services
	(a) Includes $1.1 billion related to Alstom (b) Included $5.5 billion related to Alstom
2016 SUB-SEGMENT REVENUES	BACKLOG
		Equipment Services
(a) Includes Current, powered by GE (b) Reflects historical results of Appliances prior to its sale in June 2016	(a) Included $8.4 billion related to Alstom (b) Included $7.9 billion related to Alstom
EQUIPMENT/SERVICES REVENUES
Services            Equipment

GE 2016 FORM 10-K 57

FINANCIAL OVERVIEW

(Dollars in billions)

SEGMENT REVENUES						SEGMENT PROFIT		SEGMENT PROFIT MARGIN
(a) $15.4 billion, excluding $1.0 billion related to Alstom* (b) $9.7 billion, excluding $5.5 billion related to Alstom*, and $7.1 billion, excluding $8.1 billion related to Alstom and Appliances*			Equipment Services			(a) $0.9 billion, excluding an insignificant amount related to Alstom* (b) $0.1 billion, excluding $0.2 billion related to Alstom*, and $(0.1) billion, excluding $0.4 billion related to Alstom and Appliances*		(a) 6.2%, excluding (0.5)% related to Alstom* (b) 1.5%, excluding 3.1% related to Alstom*, and (1.6)%, excluding 5.3% related to Alstom and Appliances*
SEGMENT REVENUES & PROFIT WALK:							COMMENTARY:
2016 – 2015							2016 – 2015
							Segment revenues down $1.2 billion (7%); Segment profit down $0.6 billion (67%) as a result of: ·Energy Connections revenues increased driven by the effects of Alstom, including higher equipment sales at Grid, partially offset by core decreases at Industrial Solutions and Power Conversion. The increase in revenues was partially offset by lower prices, the effects of a stronger U.S. dollar, and lower other income, including the negative foreign exchange transactional hedge impacts. Lighting revenues decreased primarily due to lower traditional lighting sales and were partially offset by increases in LED revenues and non-lighting product sales in Current, as well as lower prices. Revenues also decreased as a result of the sale of Appliances in June 2016. ·Energy Connections profit decreased primarily as a result of lower cost productivity, driven by core volume decreases, as well as lower other income, including negative foreign exchange transactional hedge impacts, and an unfavorable business mix, partially offset by the effects of Alstom. Lighting profit decreased as a result of the investment in Current, lower other income and lower prices, partially offset by material deflation. Profit also decreased due to the sale of Appliances in June 2016.
	Revenues			Profit
2015	$	16.4		$	0.9
Volume		(1.7)			(0.1)
Price		(0.1)			(0.1)
Foreign Exchange		(0.2)			-
(Inflation)/Deflation		N/A			-
Mix		N/A			(0.1)
Productivity		N/A			(0.2)
Other		(0.1)			(0.1)
Alstom		4.5			0.2
Appliances		(3.7)			(0.3)
2016	$	15.1		$	0.3

*Non-GAAP Financial Measure

GE 2016 FORM 10-K 58

2015 – 2014					2015 – 2014
					Segment revenues up $0.6 billion (4%); Segment profit up $0.3 billion (39%) as a result of: ·Energy Connections revenues increased primarily due to higher sales at Grid Solutions, driven by the effects of the Alstom acquisition, and a gain on the sale of a meters business, partially offset by the impact of a stronger U.S. dollar and lower volume at Industrial Solutions. Appliance revenues increased as a result of higher volume, partially offset by lower prices. Lighting revenues decreased as lower traditional lighting sales were partially offset by increases in LED revenues, lower prices and the impact of a stronger U.S. dollar, partially offset by gains on asset sales. ·Energy Connections profit increased primarily due to higher productivity, including a reduction in SG&A, partially offset by the impact of a stronger U.S. dollar. Appliances profit increased due to improved productivity, including the effects of classifying Appliances as a business held for sale, partially offset by lower prices. Lighting profit decreased as a result of lower prices, partially offset by material deflation.
	Revenues		Profit
2014	$	15.7	$	0.7
Volume		-		-
Price		(0.1)		(0.1)
Foreign Exchange		(0.7)		(0.1)
(Inflation)/Deflation		N/A		0.1
Mix		N/A		-
Productivity		N/A		0.1
Other		-		-
Alstom		1.0		-
Appliances		0.4		0.3
2015	$	16.4	$	0.9

GE 2016 FORM 10-K 59

CAPITAL

BUSINESS OVERVIEW

Leader: Richard Laxer		Headquarters & Operations
	·Senior Vice President, GE and Chairman & CEO, GE Capital ·Over 30 years of service with General Electric		·9% of segment revenues ·Headquarters: Norwalk, CT ·Employees: approximately 6,000
Products & Services
Capital is the financial services division of GE focused on customers and markets aligned with GE's industrial businesses, whether in developed economies or emerging markets. We provide financial products and services around the globe that are geared to utilize GE's industry specific expertise in aviation, energy, infrastructure, and healthcare to capitalize on market-specific opportunities. In addition, we continue to operate our run-off insurance activities as part of our continuing operations. Our expertise, domain knowledge, and deep relationships create an environment for new hospitals to obtain necessary equipment, cities to function more safely, and transportation networks to deliver people, goods, and services on time. We are the Capital in the GE Store. Products and services include:

· Industrial Finance (IF) – provides exclusive equipment financing solutions globally for the GE industrial businesses.  In addition, its Working Capital Solutions business provides critical working capital services to GE to help optimize cash management.

· Energy Financial Services (EFS)– a global energy investor that provides world class financial solutions and underwriting capabilities for Power, Renewable Energy, and Oil & Gas to meet rising demand and sustainability imperatives.  EFS invests in long-lived, capital intensive energy projects and companies by providing structured equity, debt, leasing, partnership financing, project finance and broad-based commercial finance.

· GE Capital Aviation Services (GECAS) – offers commercial aircraft leasing, financing, services, and consulting with the industry's broadest range of business solutions.

As a result of the GE Capital Exit Plan, GE Capital's Real Estate business, Consumer business and most of its Commercial Lending and Leasing (CLL) business are classified as discontinued operations and are no longer reported as part of the Capital segment. As such, all comparative prior period information has been reclassified to reflect Real Estate, Consumer and most of CLL as discontinued operations. As of December 31, 2016, we have substantially completed the dispositions related to the GE Capital Exit Plan.

Competition & Regulation

The businesses in which we engage are subject to competition from various types of financial institutions, including commercial banks, investment banks, leasing companies, independent finance companies, finance companies associated with manufacturers and insurance and reinsurance companies.

With the rescission of its designation as a nonbank SIFI in June 2016, GE Capital's activities are no longer subject to the consolidated supervision of the Federal Reserve or subject to the enhanced prudential standards set forth in the Dodd Frank Wall Street Reform and Consumer Protection Act and its implementing regulations, including minimum regulatory capital and liquidity requirements, submission of annual resolution plans, the Volcker Rule and regulatory reporting requirements.

GE Capital's international operations are consolidated under GE Capital International Holdings Limited, a wholly owned subsidiary of GE Capital. GE Capital International Holdings Limited continues to maintain its own capital structure and is supervised on a consolidated basis by the U.K. Prudential Regulation Authority (PRA). The PRA's supervision includes capital and liquidity standards that could impact GE Capital's ability to pay dividends to GE. We expect to exit the PRA's consolidated supervision in 2017.

GE 2016 FORM 10-K 60

OPERATIONAL OVERVIEW

(Dollars in billions)

2016 GEOGRAPHIC REVENUES: $10.9 BILLION	2016 SUB-SEGMENT REVENUES
ENDING NET INVESTMENT, EXCLUDING LIQUIDITY*	SUB-SEGMENT ASSET ALLOCATION AS OF DECEMBER 31, 2016
(a) $166 billion including discontinued operations (b) $93 billion including discontinued operations

SIGNIFICANT TRENDS & DEVELOPMENTS

· The GE Capital Exit Plan – As the GE Capital Exit Plan progresses, we will continue to incur interest on non-Verticals borrowings, restructuring costs and GE and GE Capital headquarters costs that are in excess of those allocated to the Verticals. These costs are recorded within other continuing operations within Capital.

*Non-GAAP Financial Measure

GE 2016 FORM 10-K 61

FINANCIAL OVERVIEW

(Dollars in billions)

SEGMENT REVENUES		SEGMENT PROFIT (LOSS)(a)
	Total Capital Other Continuing Verticals		Total Capital Verticals Other Continuing
		(a)Interest and other financial charges and income taxes areincluded in determining segment profit for the Capital segment.

COMMENTARY:  2016 – 2015

Capital revenues increased $0.1 billion, or 1%, primarily due to lower impairments, higher gains and the effects of acquisitions, partially offset by organic revenue declines, the effects of dispositions and the effects of currency exchange.

· Within Capital, Verticals revenues decreased by $0.2 billion, or 2%, as a result of organic revenue declines ($0.6 billion) and the effects of dispositions ($0.2 billion), partially offset by higher gains ($0.3 billion), lower impairments ($0.2 billion), and the effects of acquisitions.

· Other Capital revenues increased $0.3 billion, or 99%, as a result of lower impairments ($0.2 billion) and organic revenue growth ($0.2 billion) partially offset by the effects of currency exchange ($0.1 billion).

Capital net loss decreased by $6.7 billion, or 84%, primarily due to the absence of the 2015 charges associated with the GE Capital Exit Plan.

· Within Capital, Verticals net earnings increased by $0.2 billion, or 14%, as a result of higher gains ($0.2 billion) and lower impairments ($0.2 billion), partially offset by the effects of dispositions ($0.1 billion) and core decreases ($0.1 billion).

· Other Capital net loss decreased by $6.5 billion, or 67%, primarily as a result of:

· Lower tax expenses of $6.2 billion primarily related to the absence of the 2015 charges for repatriation of foreign earnings and write-off of deferred tax assets related to the GE Capital Exit Plan.

· 2016 tax benefits of $1.1 billion primarily related to increased tax efficiency of planned cash repatriations through increased foreign tax credit utilization of $0.8 billion and an IRS tax settlement of $0.3 billion.

· Lower impairment expenses of $0.8 billion resulting from the 2015 impairment of a coal-fired power plant in the U.S.

· Higher treasury operation expenses of $1.3 billion reflecting excess interest expense, costs associated with the February and May 2016 debt tenders and derivative activities that reduce or eliminate interest rate, currency or market risk between financial assets and liabilities. We expect to continue to have excess interest costs in 2017. We may engage in liability management actions, such as buying back debt, based on market and economic conditions.

· Charges of $0.3 billion associated with the preferred equity exchange that was completed in January 2016.

· Higher restructuring expenses of $0.2 billion.

GE 2016 FORM 10-K 62

COMMENTARY:  2015 – 2014

Capital revenues decreased by $0.5 billion, or 5%, primarily as a result of organic revenue declines, primarily due to lower ENI, lower gains and higher impairments, partially offset by the effects of acquisitions and dispositions.

· Within Capital, Verticals revenues decreased by $0.7 billion, or 6%, as a result of organic revenue declines ($0.9 billion), lower gains ($0.2 billion) and higher impairments ($0.1 billion), partially offset by the effects of acquisitions and dispositions ($0.5 billion).

Capital net earnings decreased by $9.2 billion primarily due to charges associated with the GE Capital Exit Plan.

· Within Capital, Verticals net earnings increased by $0.1 billion, or 4%, as a result of lower equipment leased to others (ELTO) impairments ($0.1 billion) related to our operating lease portfolio of commercial aircraft and the effects of acquisitions and dispositions ($0.2 billion), partially offset by lower gains ($0.1 billion) and core decreases ($0.1 billion).

· Other Capital net earnings decreased by $9.3 billion primarily as a result of the GE Capital Exit Plan as follows:

· Higher tax expenses of $7.0 billion primarily related to expected repatriation of foreign earnings and write-off of deferred tax assets related to the GE Capital Exit Plan.

· Higher treasury operation expenses of $1.0 billion reflecting excess interest expense, including costs associated with the debt exchange completed in October 2015 and derivative activities that reduce or eliminate interest rate, currency or market risk between financial assets and liabilities.

· The 2015 $0.8 billion impairment of a coal-fired power plant in the U.S. related to a decision in the fourth quarter to exit the investment over time.

GE 2016 FORM 10-K 63

GE CORPORATE ITEMS AND ELIMINATIONS

GE Corporate Items and Eliminations is a caption used in the Segment Operations – Summary of Operating Segment table to reconcile the aggregated results of our segments to the consolidated results of the Company. As such, it includes corporate activities, including certain GE Digital activities, and the elimination of inter-segment activities. Specifically, the GE Corporate Items and Eliminations amounts related to revenues and earnings include the results of disposed businesses, certain amounts not included in GE industrial operating segment results because they are excluded from measurement of their operating performance for internal and external purposes and the elimination of inter-segment activities. In addition, the GE Corporate Items and Eliminations amounts related to earnings include certain costs of our principal retirement plans, restructuring and other costs reported in Corporate, and the unallocated portion of certain corporate costs (such as research and development spending and costs related to our Global Growth Organization).

REVENUES AND OPERATING PROFIT (COST)
(In millions)			2016		2015		2014
Revenues
	Gains (losses) on disposals(a)	$	3,444	$	1,047	$	91
	NBCU settlement		-		450		-
	Eliminations and other		(3,812)		(3,708)		(3,954)
Total Corporate Items and Eliminations		$	(368)	$	(2,211)	$	(3,863)
Operating profit (cost)
	Gains (losses) on disposals(a)	$	3,444	$	1,047	$	91
	NBCU settlement		-		450		-
	Principal retirement plans(b)		(2,044)		(2,760)		(2,313)
	Restructuring and other charges		(3,578)		(1,734)		(1,788)
	Eliminations and other		(2,048)		(2,111)		(2,215)
Total Corporate Items and Eliminations		$	(4,226)	$	(5,108)	$	(6,225)
CORPORATE COSTS
(In millions)			2016		2015		2014
Total Corporate Items and Eliminations		$	(4,226)	$	(5,108)	$	(6,225)
Less non-operating pension cost*			(2,052)		(2,764)		(2,120)
Total Corporate costs (operating)*		$	(2,175)	$	(2,344)	$	(4,105)
Less, restructuring and other charges, gains and NBCU settlement			(134)		(237)		(1,697)
Adjusted Corporate costs (operating)*		$	(2,040)	$	(2,107)	$	(2,408)

(a) Included gains (losses) on disposed or held for sale businesses.

(b) Included non-operating pension cost* of $2.1 billion, $2.8 billion and $2.1 billion in 2016, 2015 and 2014, respectively, which includes expected return on plan assets, interest costs and non-cash amortization of actuarial gains and losses.

.

*Non-GAAP Financial Measure

GE 2016 FORM 10-K 64

2016 – 2015 COMMENTARY

Revenues and other income increased $1.8 billion, primarily a result of:

· $2.4 billion of higher net gains from disposed and held for sale businesses, which included a $3.1 billion gain from the sale of our Appliances business to Haier and a $0.4 billion gain from the sale of GE Asset Management to State Street Corporation in 2016, partially offset by a $0.1 billion impairment charge related to a potential sale of a non-strategic platform in our Aviation business in 2016. Gains on disposed or held for sale businesses in 2015 included a $0.6 billion gain from the sale of our Signaling business, and a $0.2 billion break-up fee paid by Electrolux AB due to the termination of the agreement to acquire the GE Appliances business.

These increases to revenues and other income was partially offset by the following:

· $0.5 billion lower other income from a settlement related to the NBCU transaction in 2015, and

· $0.4 billion of higher inter-segment eliminations.

Operating costs decreased $0.9 billion, primarily as a result of:

· $2.4 billion of higher net gains from disposed and held for sale businesses, which included a $3.1 billion gain from the sale of our Appliances business to Haier and a $0.4 billion gain from the sale of GE Asset Management to State Street Corporation in 2016, partially offset by a $0.1 billion impairment charge related to a potential sale of a non-strategic platform in our Aviation business in 2016. Gains in 2015 included a $0.6 billion gain from the sale of our Signaling business, and a $0.2 billion break-up fee paid by Electrolux AB due to the termination of the agreement to acquire the GE Appliances business, and

· $0.7 billion of lower costs associated with our principal retirement plans including the effects of higher discount rates.

These decreases to operating costs were partially offset by the following:

· $1.8 billion higher restructuring and other charges, which included $0.7 billion of higher restructuring and other charges associated with the Alstom acquisition, and

· $0.5 billion lower other income due to a non-repeat of a settlement related to the NBCU transaction in the second quarter of 2015.

2015 – 2014 COMMENTARY

Revenues and other income increased $1.7 billion, primarily a result of:

· $1.0 billion of higher gains from disposed or held for sale businesses, which included a $0.2 billion break-up fee paid by Electrolux AB due to the termination of the agreement to acquire the GE Appliances business,

· $0.5 billion higher other income from a settlement related to the NBCU transaction in 2015, and

· $0.2 billion of lower eliminations and other, which was driven by $0.4 billion of lower inter-segment eliminations, partially offset by $0.2 billion lower licensing, GE Asset Management fees and other income.

Operating costs decreased $1.1 billion, primarily as a result of:

· $1.0 billion of higher gains from disposed businesses, which included a $0.2 billion break-up fee paid by Electrolux AB due to termination of the agreement to acquire the GE Appliances business,

· $0.5 billion higher other income from a settlement related to the NBCU transaction in 2015, and

· Lower headquarter functional costs offset by higher investment in Information Technology (IT) growth initiatives.

These decreases to operating costs were partially offset by $0.4 billion of higher costs associated with our principal retirement plans including the effects of lower discount rates and updated mortality assumptions.

GE 2016 FORM 10-K 65

RESTRUCTURING

Restructuring actions are an essential component of our cost improvement efforts to both existing operations and those recently acquired. Restructuring and other charges relate primarily to workforce reductions, facility exit costs associated with the consolidation of sales, service and manufacturing facilities, the integration of recent acquisitions, including Alstom, and other asset write-downs. We continue to closely monitor the economic environment and may undertake further restructuring actions to more closely align our cost structure with earnings goals.

RESTRUCTURING & OTHER CHARGES
(In billions)		2016		2015		2014
Workforce reductions	$	1.3	$	0.4	$	0.5
Plant closures & associated costs and other asset write-downs		1.3		0.6		0.7
Acquisition/disposition net charges		0.7		0.4		0.4
Other		0.3		0.3		0.1
Total	$	3.6	$	1.7	$	1.8

For 2016, restructuring and other charges were $3.6 billion of which approximately $2.3 billion was reported in cost of products/services and $1.2 billion was reported in other costs and expenses (SG&A). These activities were primarily at Power, Oil & Gas and Energy Connections & Lighting. Cash expenditures for restructuring were approximately $1.0 billion in 2016.

For 2015, restructuring and other charges were $1.7 billion of which approximately $1.0 billion was reported in cost of products/services and $0.6 billion was reported in other costs and expenses (SG&A). These activities were primarily at Oil & Gas, Corporate and Energy Connections & Lighting. Cash expenditures for restructuring were approximately $0.4 billion in 2015.

For 2014, restructuring and other charges were $1.8 billion of which approximately $1.0 billion was reported in cost of products/services and $0.5 billion was reported in other costs and expenses (SG&A). These activities were primarily at Power, Corporate and Oil & Gas. Cash expenditures for restructuring were approximately $0.6 billion in 2014.

GE 2016 FORM 10-K 66

COSTS AND GAINS NOT INCLUDED IN SEGMENT RESULTS

As discussed in the Segment Operations section within the MD&A, certain amounts are not included in industrial operating segment results because they are excluded from measurement of their operating performance for internal and external purposes. The amount of costs and gains (losses) not included in segment results follows.

COSTS
(In billions)		2016		2015		2014
Power	$	1.2	$	0.3	$	0.5
Renewable Energy		0.3		0.2		0.1
Oil & Gas		0.8		0.5		0.3
Aviation		0.1		-		0.3
Healthcare		0.5		0.3		0.5
Transportation		0.2		0.1		-
Energy Connections & Lighting		0.6		0.3		0.3
Total	$	3.7	$	1.7	$	2.1

GAINS (LOSSES)
(In billions)		2016			2015			2014
Power	$	-		$	-		$	-
Renewable Energy		-			-			-
Oil & Gas		-			-			0.1
Aviation		(0.2)	(a)		-			-
Healthcare		-			0.1	(c)		-
Transportation		-			0.6	(d)		-
Energy Connections & Lighting		3.1	(b)		0.1	(e)		-
Total	$	3.0		$	0.9		$	0.1

(a) Largely due to impairment related to a potential sale of a non-strategic platform in our Aviation business.

(b) Related to the sale of our Appliances business in the second quarter of 2016.

(c) Related to the Clarient business disposition in 2015.

(d) Related to the Signaling business disposition in 2015.

(e) Related to the Intelligent Platforms Embedded Systems Products business disposition in 2015.

GE 2016 FORM 10-K 67

DISCONTINUED OPERATIONS

Discontinued operations primarily relate to our financial services businesses as a result of the GE Capital Exit Plan and include our Consumer business, most of our CLL business, our Real Estate business and U.S. mortgage business (WMC). All of these operations were previously reported in the Capital segment.

We have entered into Transitional Service Agreements (TSA) with and provided certain indemnifications to buyers of GE Capital's assets. Under the TSAs, GE Capital provides various services for terms generally between 12 and 24 months and receives a level of cost reimbursement from the buyers.

At December 31, 2016, we provided specific indemnifications to buyers of GE Capital's assets that amounted to $2.6 billion, for which we have recognized related liabilities of $0.3 billion. In addition, in connection with the 2015 public offering and sale of Synchrony Financial, GE Capital indemnified Synchrony Financial and its directors, officers, and employees against the liabilities of GECC's businesses other than historical liabilities of the businesses that are part of Synchrony Financial's ongoing operations.

As part of the GE Capital Exit Plan, we entered into hedges (on an after-tax basis) of our net investment in businesses that we plan to dispose. These derivatives are treated as standalone hedges and the mark-to-market valuation changes on the derivatives are recorded in earnings of discontinued operations.

Results of operations, financial position and cash flows for these businesses are separately reported as discontinued operations for all periods presented.

FINANCIAL INFORMATION FOR DISCONTINUED OPERATIONS
(In millions)	2016		2015		2014
Earnings (loss) from discontinued operations, net of taxes	$	(954)	$	(7,495)	$	5,855

The 2016 loss from discontinued operations, net of taxes, primarily reflected the following:

· $1.1 billion after-tax loss at our CLL business (including $0.9 billion after-tax loss on planned disposals), and

· $0.1 billion after-tax loss at our Consumer business (including $0.3 billion after-tax loss on planned disposals).

· 2016 losses were partially offset by a $0.2 billion tax benefit related to an IRS tax settlement in our discontinued insurance operations.

The 2015 loss from discontinued operations, net of taxes, primarily reflected the following:

· $7.9 billion after-tax loss at our CLL business (including $8.7 billion after-tax loss on planned disposals),

· $2.0 billion after-tax loss at our Real Estate business (including $2.0 billion after-tax loss on planned disposals), and

· $0.1 billion after-tax effect of incremental reserves related to retained representation and warranty obligations to repurchase previously sold loans on the 2007 sale of WMC.

· 2015 losses were partially offset by $2.5 billion after-tax earnings at our Consumer business, primarily $3.4 billion after-tax gain on the split-off of Synchrony Financial, $0.5 billion after-tax gain on other transactions closed, partially offset by $0.8 billion after-tax loss on disposals and $0.6 billion after-tax loss from operations.

The 2014 earnings from discontinued operations, net of taxes, primarily reflected the following:

· $3.2 billion of after-tax earnings from operations at our Consumer business,

· $1.8 billion of after-tax earnings from operations at our CLL business,

· $1.0 billion of after-tax earnings from operations at our Real Estate business, and

· $0.1 billion tax benefit related to the extinguishment of our loss-sharing arrangement for excess interest claims associated with the 2008 sale of GE Money Japan.

· 2014 earnings were partially offset by a $0.2 billion after-tax loss on incremental reserves related to retained representation and warranty obligations to repurchase previously sold loans on the 2007 sale of WMC.

See Note 2 to the consolidated financial statements for additional information related to discontinued operations.

GE 2016 FORM 10-K 68

OTHER CONSOLIDATED INFORMATION

INTEREST AND OTHER FINANCIAL CHARGES

Interest on borrowings and other financial charges amounted to $5.0 billion, $3.5 billion and $2.7 billion in 2016, 2015 and 2014, respectively.  The majority of our borrowings are in Financial Services, where interest expense was $3.8 billion, $2.3 billion and $1.6 billion in 2016, 2015 and 2014, respectively.  Included in interest expense were $0.6 billion, $0.2 billion and an insignificant amount of debt extinguishment costs in 2016, 2015 and 2014, respectively.  GE Capital average borrowings were $145.0 billion, $216.8 billion and $266.7 billion in 2016, 2015 and 2014, respectively. The GE Capital average composite effective interest rate (including interest allocated to discontinued operations) was 3.0% in 2016, 2.6% in 2015 and 2.6% in 2014.  The rate increase from 2015 to 2016 was primarily driven by debt extinguishment costs. Excluding the effect of debt extinguishment costs, the GE Capital average composite effective interest rate (including interest allocated to discontinued operations) was 2.6% in 2016, 2015 and 2014. In 2016, GE Capital average assets continued to decrease in line with the GE Capital Exit Plan. See the Liquidity and Borrowings section within the MD&A for a discussion of liquidity, borrowings and interest rate risk management.

It is our policy to allocate Capital interest expense that is either directly attributable or related to discontinued operations. The allocation is based on a market based leverage ratio, taking into consideration the underlying characteristics of the assets for the specific discontinued operations. Interest expense that is associated with debt that is not assumed by the buyer or required to be repaid as a result of the disposal transaction is reflected in other continuing operations after the disposal occurs.

POSTRETIREMENT BENEFIT PLANS

(Dollars in billions)

	PRINCIPAL PENSION PLANS
BENEFIT PLANS COST	DISCOUNT RATES (December 31)	EXPECTED RATE OF RETURN

2016 – 2015 COMMENTARY

· Postretirement benefit plans cost decreased $0.9 billion, primarily because of the effects of higher discount rates, lower service cost resulting from fewer active principal pension plans participants and lower loss amortization related to our principal pension plans.

· We updated our mortality assumptions at December 31, 2016 based on guidance issued by the Society of Actuaries to reflect updated rates and methodology for future mortality improvements.  The new mortality assumptions decreased our principal pension plans obligations by $0.6 billion at year-end 2016.

2015 – 2014 COMMENTARY

· Postretirement benefit plans cost increased $0.2 billion, primarily because of the effects of lower discount rates and new mortality assumptions, which were partially offset by lower loss amortization related to our principal pension plans and by changes to principal retiree benefit plans.

· In 2015, we amended our principal retiree benefit plans affecting post-65 retiree health and retiree life insurance for certain production participants. These plan amendments reduced our principal postretirement benefit obligations by approximately $3.3 billion.

GE 2016 FORM 10-K 69

Looking forward, our key assumptions affecting 2017 postretirement benefits costs are as follows:

· Discount rate at 4.11% for our principal pension plans, reflecting current long-term interest rates.

· Assumed long-term return on our principal pension plan assets of 7.5%.

We expect 2017 postretirement benefit plans cost to be about the same as 2016.

PENSION COSTS

GAAP AND NON-GAAP PENSION COSTS
(In billions)		2016		2015		2014
GAAP principal pension plans' cost	$	3.6	$	4.5	$	3.6
Non-GAAP operating pension cost*		1.6		1.7		1.5

Our operating pension cost for our principal pension plans includes only those components that relate to benefits earned by active employees during the period (service cost, prior service cost amortization and curtailment loss). Non-operating pension cost elements such as interest cost, expected return on plan assets and non-cash amortization of actuarial gains and losses are excluded from this measure. We expect operating pension cost to be approximately $1.4 billion in 2017.

FUNDED STATUS OF PLANS

The table below presents the funded status of our benefit plans. The funded status represents the fair value of plan assets less benefit obligations.

FUNDED STATUS
(In billions)		2016		2015
GE Pension Plan	$	(19.1)	$	(16.9)
GE Supplementary Pension Plan		(6.5)		(6.1)
Other pension plans		(5.5)		(4.3)
Principal retiree benefit plans		(5.7)		(6.1)

2016 – 2015 COMMENTARY

· The GE Pension Plan deficit increased in 2016 primarily due to the growth in pension liabilities and lower discount rates, partially offset by investment performance and changes in mortality assumptions.

· The increase in the underfunding of our other pension plans was primarily attributable to lower discount rates and liability growth, partially offset by investment performance and employer contributions.

· The decrease in principal retiree benefit plans deficit was primarily attributable to employer contributions and lower costs from new healthcare supplier contracts, partially offset by the growth in retiree benefit liabilities.

The Employee Retirement Income Security Act (ERISA) determines minimum pension funding requirements in the U.S. We made a $0.3 billion contribution to the GE Pension Plan in 2016. We did not contribute to the GE Pension Plan in 2015. On an ERISA basis, our preliminary estimate is that the GE Pension Plan was approximately 95% funded at January 1, 2017. The ERISA funded status is higher than the GAAP funded status (71% funded) primarily because the ERISA prescribed interest rate is calculated using an average interest rate. As a result, the ERISA interest rate is higher than the year-end GAAP discount rate. The higher ERISA interest rate lowers pension liabilities for ERISA funding purposes. Our current estimate projects $1.7 billion of pension funding contributions to the GE Pension Plan in 2017 and approximately $1.6 billion in 2018.

*Non-GAAP Financial Measure

GE 2016 FORM 10-K 70

We expect to contribute $0.9 billion to our other pension plans in 2017, as compared to $0.8 billion in 2016 and $0.5 billion in 2015. GE Capital is a member of certain GE pension plans. As a result of the GE Capital Exit Plan, GE Capital will have additional funding obligations for these pension plans. These obligations do not relate to the Verticals and are recognized as an expense in GE Capital's other continuing operations when they become probable and estimable. See the Intercompany Transactions between GE and GE Capital section within the MD&A for further information.

We also expect to contribute $0.5 billion to our principal retiree benefit plans in 2017 as compared to $0.4 billion in 2016 and $0.5 billion in 2015.

The funded status of our postretirement benefit plans and future effects on operating results depend on economic conditions, interest rates and investment performance. See the Critical Accounting Estimates section within the MD&A and Notes 12 and 29 to the consolidated financial statements for further information about our benefit plans and the effects of this activity on our financial statements.

INCOME TAXES

GE pays the income taxes it owes in every country in which it does business.  While GE and GE Capital file a consolidated U.S. federal income tax return, many factors impact our income tax expense and cash tax payments.  The most significant factor is that we conduct business in approximately 180 countries and more than half of our revenue is earned outside the U.S., often in countries with lower tax rates than in the U.S.  We reinvest most of our foreign earnings overseas to be able to fund our active non-U.S. business operations.  Our tax liability is also affected by U.S. and foreign tax incentives designed to encourage certain investments, like research and development; and by acquisitions, dispositions and tax law changes.  Finally, our tax returns are routinely audited, and settlements of issues raised in these audits sometimes affect our tax rates.

GE and GE Capital file a consolidated U.S. federal income tax return. This enables GE and GE Capital to use tax deductions and credits of one member of the group to reduce the tax that otherwise would have been payable by another member of the group. The effective tax rate reflects the benefit of these tax reductions in the consolidated return. GE makes cash payments to GE Capital for tax reductions and GE Capital pays for tax increases at the time GE's tax payments are due.

CONSOLIDATED

(Dollars in billions)

EFFECTIVE TAX RATE (ETR)	PROVISION (BENEFIT) FOR INCOME TAXES	CASH INCOME TAXES PAID(a)

(a) Includes taxes paid related to discontinued operations.

GE 2016 FORM 10-K 71

2016 – 2015 COMMENTARY

· The consolidated income tax rate for 2016 was (5.1)%. The effective tax rate was negative largely because of increased tax benefits from global operations including benefits from the repatriation of GE non-U.S. earnings, benefits of integrating our existing services business with Alstom's services business and foreign tax credit planning at GE Capital to reduce the tax cost of anticipated repatriations of foreign cash.

· The decrease in the consolidated provision for income tax was attributable to the increased benefit from global operations and the non-repeat of the 2015 charges associated with the GE Capital Exit Plan.

· As discussed in Note 14 to the consolidated financial statements, in 2015 in conjunction with the GE Capital Exit Plan, we incurred tax expense of $6.3 billion related to expected repatriation of foreign earnings and write-off of deferred tax assets.

· The consolidated tax provision includes $1.5 billion and $1.0 billion for GE (excluding GE Capital) for 2015 and 2016, respectively.

2015 – 2014 COMMENTARY

· The consolidated income tax rate for 2015 was greater than 35% due to charges associated with the GE Capital Exit Plan.

· The increase in the income tax expense is primarily due to the tax expense incurred as part of the GE Capital Exit Plan.

· The consolidated tax provision includes $1.6 billion and $1.5 billion for GE (excluding GE Capital) for 2014 and 2015, respectively.

BENEFITS FROM GLOBAL OPERATIONS

Absent the effects of the GE Capital Exit Plan, our consolidated income tax provision is lower because of the benefits of lower-taxed global operations. There is a benefit from global operations as non-U.S. income is subject to local country tax rates that are significantly below the 35% U.S. statutory rate. These non-U.S. earnings have been indefinitely reinvested outside the U.S. and are not subject to current U.S. income tax. Most of these earnings have been reinvested in active non-U.S. business operations and we do not intend to repatriate these earnings to fund U.S. operations. The rate of tax on our indefinitely reinvested non-U.S. earnings is below the 35% U.S. statutory tax rate because we have significant business operations subject to tax in countries where the tax on that income is lower than the U.S. statutory rate and because GE funds certain non-U.S. operations through foreign companies that are subject to low foreign taxes.

A substantial portion of the benefit related to business operations subject to tax in countries where the tax on that income is lower than the U.S. statutory rate is derived from our GECAS aircraft leasing operations located in Ireland, from our Power operations located in Switzerland and Hungary, and our Healthcare operations in Europe.

We expect our ability to benefit from non-U.S. income taxed at less than the U.S. rate to continue, subject to changes in U.S. or foreign law. In addition, since this benefit depends on management's intention to indefinitely reinvest amounts outside the U.S., our tax provision will increase to the extent we no longer indefinitely reinvest foreign earnings.

BENEFITS FROM LOWER-TAXED GLOBAL OPERATIONS
(In billions)		2016		2015		2014
Benefit of lower foreign tax rate on indefinitely reinvested non-U.S. earnings	$	0.9	$	1.1	$	1.2
GE Capital Exit Plan		-		(6.1)		-
Benefit of audit resolutions		0.1		0.2		0.1
Other		1.1		0.4		0.5
Total	$	2.1	$	(4.4)	$	1.8

2016 – 2015 COMMENTARY

Our benefit from lower-taxed global operations increased in 2016 because of the non-repeat of the 2015 tax expense associated with the GE Capital Exit Plan and because of benefits from the repatriation of GE non-U.S. earnings, benefits of integrating our existing services business with Alstom's services business and foreign tax credit planning at GE Capital to reduce the tax cost of anticipated repatriations of foreign cash, all of which are included in "other" in the table above.

GE 2016 FORM 10-K 72

2015 – 2014 COMMENTARY

Our benefits from lower-taxed global operations decreased in 2015 because of the tax expense associated with the GE Capital Exit Plan.

OTHER INFORMATION

To the extent non-U.S. operating income increases, we would expect tax benefits to increase, subject to management's intention to indefinitely reinvest those earnings. Included in 2015 is a tax expense of $6.1 billion related to the expected repatriation of foreign earnings and write-off of deferred tax assets in conjunction with the GE Capital Exit Plan.

The tax benefit from non-U.S. income taxed at a local country rate rather than the U.S. statutory tax rate is reported in the caption "Tax on global activities including exports" in the effective tax rate reconciliation in Note 14 to the consolidated financial statements.

A more detailed analysis of differences between the U.S. federal statutory rate and the consolidated effective rate, as well as other information about our income tax provisions, is provided in the Critical Accounting Estimates section within the MD&A and Note 14 to the consolidated financial statements. The nature of business activities and associated income taxes differ for GE and for GE Capital; therefore, a separate analysis of each is presented in the paragraphs that follow.

GE EFFECTIVE TAX RATE (EXCLUDING GE CAPITAL EARNINGS)

(Dollars in billions)

We believe that the GE effective tax rate and provision for income taxes are best analyzed in relation to GE earnings before income taxes excluding the GE Capital net earnings from continuing operations, as GE tax expense does not include taxes on GE Capital earnings. For further information on this calculation, see the Supplemental Information section within the MD&A.

GE ETR, EXCLUDING GE CAPITAL EARNINGS*	GE PROVISION FOR INCOME TAXES

2016 – 2015 COMMENTARY

· The GE provision for income taxes decreased in 2016 because of increased benefits from lower-taxed global operations ($0.3 billion), including benefits from the repatriation of GE non-U.S. earnings and benefits of integrating our existing services business with Alstom's services business.

· The GE provision for income taxes also decreased due to increases in the benefit from deductible stock losses ($0.4 billion).

· Partially offsetting these decreases was a lower benefit of audit resolutions ($0.1 billion) shown below.

2015 – 2014 COMMENTARY

· The GE provision for income taxes decreased in 2015 because of increased benefits from lower-taxed global operations ($0.2 billion), including benefits from integrating our existing services business with Alstom's services business.

· The GE provision for income taxes also decreased due to increases in the benefit of audit resolutions ($0.2 billion) shown below and deductible stock losses ($0.2 billion).

· Partially offsetting these decreases was an increase in income taxed at rates above the average tax rate ($0.5 billion).

GE 2016 FORM 10-K 73

Resolution of audit matters reduced the GE provision for income taxes by $0.2 billion, $0.3 billion and $0.1 billion in 2016, 2015 and 2014, respectively. The effects of such resolutions are included in the following captions in Note 14 to the consolidated financial statements.

AUDIT RESOLUTIONS - EFFECT ON GE TAX RATE, EXCLUDING GE CAPITAL EARNINGS
	2016		2015		2014
Tax on global activities including exports	(1.4)	%	(1.5)	%	(0.2)	%
U.S. business credits	-		(0.5)		-
All other - net	(0.4)		(0.3)		(0.7)
Total	(1.8)	%	(2.3)	%	(0.9)	%

GE CAPITAL EFFECTIVE TAX RATE

(Dollars in billions)

GE CAPITAL ETR		GE CAPITAL PROVISION (BENEFIT) FOR INCOME TAXES

2016 – 2015 COMMENTARY

· The decrease in the income tax expense for GE Capital from an expense of $5.0 billion to a benefit of $1.4 billion is primarily due to the non-recurrence of the $6.3 billion tax expense, discussed in Note 14 to the consolidated financial statements, related to the GE Capital Exit Plan.

· The GE Capital tax expense also decreased in 2016 due to higher benefits from global operations including foreign tax credit planning to reduce the tax cost of anticipated repatriations of foreign cash.

2015 – 2014 COMMENTARY

· The increase in the income tax expense from a benefit of $0.9 billion for 2014 to an expense of $5.0 billion for 2015 is primarily due to the tax expense, discussed in Note 14 to the consolidated financial statements, related to the GE Capital Exit Plan.

GEOGRAPHIC DATA

Our global activities span all geographic regions and primarily encompass manufacturing for local and export markets, import and sale of products produced in other regions, leasing of aircraft, sourcing for our plants domiciled in other global regions and provision of financial services within these regional economies. Thus, when countries or regions experience currency and/or economic stress, we often have increased exposure to certain risks, but also often have new opportunities that include, among other things, expansion of industrial activities through purchases of companies or assets at reduced prices and lower U.S. debt financing costs.

Financial results of our non-U.S. activities reported in U.S. dollars are affected by currency exchange. We use a number of techniques to manage the effects of currency exchange, including selective borrowings in local currencies and selective hedging of significant cross-currency transactions. Such principal currencies are the euro, the pound sterling, the Brazilian real and the Chinese renminbi.

GE 2016 FORM 10-K 74

REVENUES

Revenues are classified according to the region to which products and services are sold. For purposes of this analysis, the U.S. is presented separately from the remainder of the Americas.

GEOGRAPHIC REVENUES
							V%
(Dollars in billions)		2016		2015		2014	2016-2015	2015-2014
U.S.	$	53.3	$	53.2	$	51.1	-%	4 %
Non-U.S.
Europe		21.6		16.8		18.4
Asia		20.4		19.3		20.2
Americas		10.5		12.0		11.8
Middle East and Africa		17.8		16.0		15.6
Total Non-U.S.		70.4		64.1		66.0	10 %	(3)%
Total	$	123.7	$	117.4	$	117.2	5 %	-%
Non-U.S. Revenues as a % of Consolidated Revenues		57%		55%		56%

NON-U.S. REVENUES AND EARNINGS

The increase in non-US. revenues in 2016 was primarily due to increases of 32% in Europe (primarily due to Alstom), 12% in Middle East, North Africa and Turkey (MENAT) and 35% in India, partially offset by a decrease of 10% in Latin America.

The decrease in non-U.S. revenues in 2015 was primarily due to decreases in growth markets of 11% in Canada and 29% in Australia & New Zealand (ANZ), partially offset by an increase of 2% in Middle East, North Africa and Turkey (MENAT) and 1% in China.

The effects of currency fluctuations on reported results were as follows:

· Decreased revenues by $1.3 billion in 2016, primarily driven by the Brazilian real ($0.2 billion), pound sterling ($0.2 billion), euro ($0.1 billion) and the Chinese renminbi ($0.1 billion).

· Decreased revenues by $4.9 billion in 2015, primarily driven by the euro ($2.6 billion), the Brazilian real ($0.9 billion) and the Canadian dollar ($0.2 billion).

The effects of foreign currency fluctuations decreased earnings by $0.3 billion in 2016. The effects of foreign currency fluctuations decreased earnings in 2015 by $0.7 billion.

ASSETS

We classify certain assets that cannot meaningfully be associated with specific geographic areas as "Other Global" for this purpose.

TOTAL ASSETS (CONTINUING OPERATIONS)
December 31 (In billions)		2016		2015
U.S.	$	179.0	$	176.7
Non-U.S.
Europe		110.8		141.9
Asia		24.0		22.0
Americas		20.6		17.5
Other Global		15.8		14.0
Total Non-U.S.		171.4		195.4
Total	$	350.4	$	372.1

The decrease in total assets of non-U.S. operations on a continuing basis reflected a decrease primarily in Europe driven by the strengthening of the U.S. dollar against the euro and pound sterling, coupled with a decrease in time deposits in line with debt maturities at GE Capital.

GE 2016 FORM 10-K 75

FOREIGN CURRENCY EXPOSURE

As a result of our global operations, we generate and incur a significant portion of our revenues and expenses in currencies other than the U.S. dollar. Such principal currencies are the euro, the pound sterling, the Brazilian real and the Chinese renminbi. The results of operating entities reported in currencies other than U.S. dollar are translated to the U.S. dollar at the applicable exchange rate for inclusion in the financial statements. We use a number of techniques to manage the effects of currency exchange, including selective borrowings in local currencies and selective hedging of significant cross-currency transactions. The foreign currency effect arising from operating activities outside of the U.S., including the remeasurement of derivatives, can result in significant transactional foreign currency fluctuations at points in time, but will generally be offset as the underlying hedged item is recognized in earnings. The effects of foreign currency fluctuations, excluding the earnings impact of the underlying hedged item, decreased net earnings for the year ended December 31, 2016 by $0.3 billion.

On June 23, 2016, a referendum in the United Kingdom (U.K.) was approved to withdraw from the European Union. The referendum was advisory and the terms of any withdrawal are subject to a negotiation period that could last for two years after the U.K. government initiates the withdrawal process. The approval of the referendum had, and may continue to have, an impact on foreign currency exchange rates, among other things. We actively manage our exposure to the U.K. and do not anticipate a material economic impact from our currency exposure as a result of the recent decision by the U.K. to exit the European Union.

See Notes 20 and 29 to the consolidated financial statements for further information about our risk exposures, our use of derivatives, and the effects of this activity on our financial statements.

GE 2016 FORM 10-K 76

STATEMENT OF FINANCIAL POSITION

Because GE and GE Capital share certain significant elements of their Statements of Financial Position, the following discussion addresses significant captions in the consolidated statement. Within the following discussions, however, we distinguish between GE and GE Capital activities in order to permit meaningful analysis of each individual consolidating statement.

MAJOR CHANGES IN OUR FINANCIAL POSITION DURING 2016

· Cash and equivalents decreased $22.4 billion. GE Cash and equivalents increased $0.2 billion due to continuing cash flows from operating activities of $30.0 billion (including common dividends from GE Capital of $20.1 billion), proceeds from the sale of our Appliances business of $4.8 billion and a short-term loan from GE Capital of $1.3 billion. This is partially offset by treasury stock net purchases of $21.4 billion (cash basis), including $11.4 billion paid under ASR agreements, common dividends of $8.5 billion, net PP&E additions of $2.7 billion, business acquisitions of $2.3 billion and software spend of $0.7 billion. GE Capital Cash and equivalents decreased $22.5 billion primarily driven by $58.8 billion net repayments of debt, $20.4 billion in payments of dividends to shareowners and a short-term loan to GE of $1.3 billion, partially offset by $59.9 billion in proceeds from business dispositions and $0.8 billion in proceeds from the sale of receivables originated in our Appliances business and sold to Haier. See the Statement of Cash Flows section of MD&A for additional information.

· Investment securities increased $12.3 billion, primarily driven by investing excess cash in longer term investments to achieve higher yield at GE Capital. See Note 3 to the consolidated financial statements for additional information.

· All other assets decreased $9.6 billion, primarily due to maturities of time deposits in line with debt maturities at GE Capital. See Note 9 to the consolidated financial statements for additional information.

· Assets of discontinued operations decreased $106.1 billion, primarily due to the disposition of CLL businesses of $89.2 billion at GE Capital. See Note 2 to the consolidated financial statements for additional information.

· Borrowings decreased $61.4 billion, primarily due to net repayment of debt at GE Capital. See Note 10 to the consolidated financial statements for additional information.

· Liabilities of discontinued operations decreased $42.3 billion, primarily driven by the disposition of CLL businesses of $34.7 billion at GE Capital. See Note 2 to the consolidated financial statements for additional information.

· Common stock held in treasury increased $19.5 billion, primarily due to treasury stock purchases of $22.0 billion (book basis), including $11.4 billion repurchased under ASR agreements. This was partially offset by treasury stock issuances of $2.6 billion. See Note 15 to the consolidated financial statements for additional information.

GE 2016 FORM 10-K 77

FINANCIAL RESOURCES AND LIQUIDITY

LIQUIDITY AND BORROWINGS

We maintain a strong focus on liquidity. At both GE and GE Capital we manage our liquidity to help provide access to sufficient funding to meet our business needs and financial obligations throughout business cycles.

Our liquidity and borrowing plans for GE and GE Capital are established within the context of our annual financial and strategic planning processes. At GE, our liquidity and funding plans take into account the liquidity necessary to fund our operating commitments, which include primarily purchase obligations for inventory and equipment, payroll and general expenses (including pension funding). We also take into account our capital allocation and growth objectives, including paying dividends, repurchasing shares, investing in research and development and acquiring industrial businesses. At GE, we rely primarily on cash generated through our operating activities, any dividend payments from GE Capital, and also have historically maintained a commercial paper program that we regularly use to fund operations in the U.S., principally within the quarters.

During 2017, GE plans to incur new long-term debt to refinance existing unsecured term debt, finance the Baker Hughes transaction, and for other corporate purposes.  This new debt may consist of new unsecured term debt issued by GE or intercompany arrangements between GE and GE Capital utilizing GE Capital's excess unsecured term debt.  GE maintains a commercial paper program with a balance of $1.5 billion at December 31, 2016.

Based on asset and liability management actions we have taken, GE Capital does not plan to issue any incremental GE Capital senior unsecured term debt until 2019. GE Capital's global commercial paper issuances total $5.0 billion at December 31, 2016. GE Capital mainly relies on excess cash positions, cash generated through dispositions, and the cash flow from our Verticals to fund our debt maturities, including current portion of long-term debt ($18.2 billion at December 31, 2016), and our operating and interest costs. GE Capital's liquidity position is targeted to meet its obligations under both normal and stressed conditions. We expect to maintain an elevated liquidity position as we generate cash from asset sales, returning to more normalized levels in 2019. During this period we expect to continue to have excess interest costs as asset sales have outpaced our debt maturities. While we maintain elevated liquidity levels, we may engage in liability management actions, such as buying back debt, based on market and economic conditions in order to reduce our excess interest costs. In 2016, we repurchased $6.7 billion of long-term unsecured debt and $5.8 billion of subordinated debentures, resulting in a pre-tax loss of $0.6 billion.

We maintain a detailed liquidity policy for GE Capital that defines GE Capital's liquidity risk tolerance under stress based on its liquidity sources, and a comprehensive framework for managing liquidity risk including metrics to identify and monitor liquidity risk and procedures to escalate and address potential issues.

On December 2, 2015, $87.7 billion of senior unsecured notes and $4.9 billion of commercial paper was assumed by GE upon its merger with GE Capital. On the GE balance sheet, assumed debt is presented in borrowings with an offsetting receivable from GE Capital.  On the GE Capital balance sheet, assumed debt is reflected as an intercompany payable to GE presented in borrowings (see Note 10 for additional information). The following table illustrates total GE and GE Capital external debt and debt assumed by GE as of December 31, 2016.

December 31, 2016 (In billions)		GE		GE Capital		Consolidated(a)
External debt	$	79.3	$	58.5	$	136.2
Debt assumed by GE from GE Capital		(58.8)		58.8		-
Debt adjusted for assumed debt		20.5		117.3		136.2

(a)Includes $1.6 billion elimination of intercompany borrowings between GE and GE Capital.

GE 2016 FORM 10-K 78

LIQUIDITY SOURCES

In addition to GE cash of $10.5 billion at December 31, 2016, GE Capital maintained liquidity sources of $50.5 billion that consisted of cash and equivalents of $37.6 billion, high-quality investments of $11.5 billion and cash and equivalents of $1.4 billion classified as discontinued operations. Additionally, at December 31, 2016, we have $20.0 billion of committed unused credit lines extended by 36 banks in a syndicated credit facility agreement.  GE Capital has the right to compel GE to borrow under such credit lines and transfer the proceeds as loans to GE Capital.

CASH AND EQUIVALENTS
(In billions)		December 31, 2016			December 31, 2016
GE(a)	$	10.5	U.S.	$	9.6
GE Capital(b)		37.6	Non-U.S.(c)		38.6

(a) At December 31, 2016, $3.5 billion of GE cash and equivalents was held in countries with currency controls that may restrict the transfer of funds to the U.S. or limit our ability to transfer funds to the U.S. without incurring substantial costs. These funds are available to fund operations and growth in these countries and we do not currently anticipate a need to transfer these funds to the U.S.

(b) At December 31, 2016, GE Capital cash and equivalents of about $0.5 billion was primarily in insurance entities and was subject to regulatory restrictions.

(c) Of this amount at December 31, 2016, $3.3 billion is held outside of the U.S. and is available to fund operations and other growth of non-U.S. subsidiaries; it is also available to fund our needs in the U.S. on a short-term basis through short-term loans, without being subject to U.S. tax. Under the Internal Revenue Code, these loans are permitted to be outstanding for 30 days or less and the total of all such loans is required to be outstanding for less than 60 days during the year. If we were to repatriate this cash, we would be subject to additional U.S. income taxes and foreign withholding taxes.

There were no new senior unsecured debt issuances in 2016.

COMMERCIAL PAPER
(In billions)	GE		GE Capital
Average commercial paper borrowings during the fourth quarter of 2016	$	13.9	$	5.0
Maximum commercial paper borrowings outstanding during the fourth quarter of 2016		19.5		5.1

GE Capital commercial paper maturities have historically been funded principally through new commercial paper issuances and at GE are substantially repaid before quarter-end using indefinitely reinvested overseas cash, which as discussed above, is available for use in the U.S. on a short-term basis without being subject to U.S. tax.

We securitize financial assets as an alternative source of funding. At December 31, 2016, consolidated non-recourse securitization borrowings were $0.4 billion.

We have two deposit-taking banks outside of the U.S., which are classified as discontinued operations, and neither deposit-taking platform will be retained after the planned completion of the remaining GE Capital Exit Plan dispositions in Europe in 2017. On April 18, 2016, we completed the sale of the deposit-taking bank in the U.S., GE Capital Bank, an industrial bank.

EXCHANGE RATE AND INTEREST RATE RISKS

Exchange rate and interest rate risks are managed with a variety of techniques, including match funding and selective use of derivatives. We use derivatives to mitigate or eliminate certain financial and market risks because we conduct business in diverse markets around the world and local funding is not always efficient. In addition, we use derivatives to adjust the debt we are issuing to match the fixed or floating nature of the assets we are originating. We apply strict policies to manage each of these risks, including prohibitions on speculative activities. Following is an analysis of the potential effects of changes in interest rates and currency exchange rates using so-called "shock" tests that seek to model the effects of shifts in rates. Such tests are inherently limited based on the assumptions used (described further below) and should not be viewed as a forecast; actual effects would depend on many variables, including market factors and the composition of the Company's assets and liabilities at that time.

GE 2016 FORM 10-K 79

· It is our policy to minimize exposure to interest rate changes. We fund our financial investments using debt or a combination of debt and hedging instruments so that the interest rates of our borrowings match the expected interest rate profile on our assets. To test the effectiveness of our hedging actions, we assumed that, on January 1, 2016, interest rates decreased by 100 basis points across the yield curve (a "parallel shift" in that curve) and further assumed that the decrease remained in place for the next 12 months. Based on the year-end 2016 portfolio and holding all other assumptions constant, we estimated that our consolidated net earnings for the next 12 months, starting in January 2016, would decline by less than $0.1 billion as a result of this parallel shift in the yield curve.

· It is our policy to minimize currency exposures and to conduct operations either within functional currencies or using the protection of hedge strategies. We analyzed year-end 2016 consolidated currency exposures, including derivatives designated and effective as hedges, to identify assets and liabilities denominated in other than their relevant functional currencies. For such assets and liabilities, we then evaluated the effects of a 10% shift in exchange rates between those currencies and the U.S. dollar, holding all other assumptions constant. This analysis indicated that our 2016 consolidated net earnings would decline by less than $0.3 billion as a result of such a shift in exchange rates. This analysis excludes any translation impact from changes in exchange rates on our financial results and any offsetting effect from the forecasted future transactions that are economically hedged.

DEBT AND DERIVATIVE INSTRUMENTS, GUARANTEES AND COVENANTS

CREDIT RATINGS

We have relied, and may continue to rely, on the short-term and long-term debt capital markets to fund, among other things, a significant portion of our operations and significant acquisitions. The cost and availability of debt financing is influenced by our credit ratings.

On September 23, 2016, Standard and Poor's Global Ratings (S&P) lowered GE's and GE Capital's long-term unsecured debt ratings to AA- from AA+.  The A-1+ short-term funding rating from S&P remained unchanged.   On October 31, 2016, GE announced an agreement with Baker Hughes as previously discussed in the Consolidated Results section of MD&A. Moody's, S&P and Fitch Ratings (Fitch) affirmed GE's credit ratings following the announcement.  Fitch has published credit ratings for GE and GE Capital since August 2, 2016.

We are disclosing these ratings to enhance understanding of our sources of liquidity and the effects of our ratings on our costs of funds. Although we currently do not expect a downgrade in the credit ratings, our ratings may be subject to a revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.  For a description of some of the potential consequences of a reduction in our credit ratings, see "Risk Factors – Financial Risks - Funding access/costs - Failure to maintain our credit ratings, or conditions in the financial and credit markets, could adversely affect our access to capital markets, funding costs and related margins, liquidity and competitive position."

GE's and GE Capital's ratings are set forth in the table below.

	Moody's	S&P	Fitch
GE
Outlook	Stable	Stable	Stable
Short term	P-1	A-1+	F1+
Long term	A1	AA-	AA-
GE Capital
Outlook	Stable	Stable	Stable
Commercial paper	P-1	A-1+	F1+
Senior notes	A1