UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

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 its 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
(Address of principal executive offices)			(Zip Code)

(Registrant’s telephone number, including area code) (617) 443-3000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.06 per share	GE	New York Stock Exchange
Floating Rate Notes due 2020	GE 20E	New York Stock Exchange
0.375% Notes due 2022	GE 22A	New York Stock Exchange
1.250% Notes due 2023	GE 23E	New York Stock Exchange
0.875% Notes due 2025	GE 25	New York Stock Exchange
1.875% Notes due 2027	GE 27E	New York Stock Exchange
1.500% Notes due 2029	GE 29	New York Stock Exchange
7 1/2% Guaranteed Subordinated Notes due 2035	GE /35	New York Stock Exchange
2.125% Notes due 2037	GE 37	New York Stock Exchange

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

There were 8,733,549,000 shares of common stock with a par value of $0.06 per share outstanding at September 30, 2019.

TABLE OF CONTENTS

	Page
About General Electric	3
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)	3
Consolidated Results	4
Segment Operations	7
Corporate Items and Eliminations	16
Other Consolidated Information	18
Capital Resources and Liquidity	20
Critical Accounting Estimates	26
Other Items	27
Non-GAAP Financial Measures	32
Controls and Procedures	39
Other Financial Data	39
Legal Proceedings	39
Financial Statements and Notes	41
Forward-Looking Statements	81
Glossary	82
Exhibits	82
Form 10-Q Cross Reference Index	83
Signatures	84

MD&A

ABOUT GENERAL ELECTRIC

General Electric Company is a high-tech industrial company that operates worldwide through its four industrial segments, Power, Renewable Energy, Aviation and Healthcare, and its financial services segment, Capital. The Power segment offers technologies, solutions, and services related to energy production, including gas and steam turbines, generators, and power generation services. The Renewable Energy segment provides wind turbine platforms, hardware and software, offshore wind turbines, solutions, products and services to hydropower industry, blades for onshore and offshore wind turbines, and high voltage equipment. The Aviation segment provides jet engines and turboprops for commercial airframes, maintenance, component repair, and overhaul services, as well as replacement parts, additive machines and materials, and engineering services. The Healthcare segment provides healthcare technologies in medical imaging, digital solutions, patient monitoring, and diagnostics, drug discovery, biopharmaceutical manufacturing technologies and performance enhancement solutions. The Capital segment leases and finances aircraft, aircraft engines and helicopters, provides financial and underwriting solutions, and manages our run-off insurance operations.

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

The consolidated financial statements of General Electric Company (the Company) combine the industrial manufacturing and services businesses of GE with the financial services businesses of GE Capital or Financial Services and are prepared in conformity with U.S. generally accepted accounting principles (GAAP).

We believe 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 GE 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 these terms to mean the following:

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

• 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 (Loss), Financial Position and Cash Flows.

• 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. As GE presents the continuing operations of GE Capital on a one-line basis, any intercompany profits resulting from transactions between GE and GE Capital are eliminated at the GE level. We present the results of GE in the center column of our consolidated Statements of Earnings (Loss), Financial Position and Cash Flows. An example of a GE metric is GE Cash Flows from Operations (GE CFOA).

• GE Capital or Financial Services – 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 (Loss), Financial Position and Cash Flows.

• GE 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 a GE Industrial metric is GE Industrial Free Cash Flows (Non-GAAP).

• Industrial segment – the sum of our four industrial reportable segments, without giving effect to the elimination of transactions among such segments or 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.

• Baker Hughes – represents our Oil & Gas segment through the date of deconsolidation and our remaining interest in Baker Hughes Company.

Refer to the Glossary for a list of key terms used in our MD&A and financial statements. This document contains “forward-looking statements” - that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain.

For details about the uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements, see the Forward-Looking Statements section, as well as our Annual Report on Form 10-K for the year ended December 31, 2018 and our other Quarterly Reports on Form 10-Q.

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 GAAP. Certain of these data are considered “non-GAAP financial measures” under SEC rules. See the Non-GAAP Financial Measures section for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures.

Amounts reported in billions in tables 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.

GE’s website 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 and 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.

2019 3Q FORM 10-Q 3

MD&A CONSOLIDATED RESULTS

CONSOLIDATED RESULTS

SIGNIFICANT DEVELOPMENTS. In September 2019, pursuant to our announced plan of an orderly separation of Baker Hughes over time, we sold a total of 144.1 million shares in Baker Hughes for $3.0 billion in cash (net of expenses) which reduced our ownership interest from 50.2% to 36.8%. As a result, we have deconsolidated our Baker Hughes segment and reclassified results to discontinued operations for all periods presented. In addition, as disclosed in prior filings, including our 2018 Form 10-K, we expected to record a significant loss upon deconsolidation. In the third quarter of 2019, we recorded a loss of $8.7 billion ($8.2 billion after-tax) in discontinued operations. We elected to prospectively measure our remaining investment in Baker Hughes at fair value and all subsequent changes in fair value will be recognized in earnings from continuing operations. See Notes 2 and 3 to the consolidated financial statements for further information.

In February 2019, we completed the spin-off and subsequent merger of our Transportation segment with Wabtec Corporation, a U.S. rail equipment manufacturer. In the transaction, GE shareholders received shares of Wabtec common stock representing a 24.3% ownership interest in Wabtec common stock. GE received $2.8 billion in cash as well as shares of Wabtec common stock and Wabtec non-voting convertible preferred stock that, together, represented a 24.9% ownership interest in Wabtec. GE is also entitled to additional cash consideration up to $0.5 billion for tax benefits that Wabtec realizes from the transaction. As a result, we reclassified our Transportation segment to discontinued operations in the first quarter of 2019, for all periods presented, and recorded a gain of $3.5 billion ($2.5 billion after-tax) in discontinued operations. In May 2019, we sold 25.3 million shares of Wabtec common stock for proceeds of $1.8 billion. During the third quarter of 2019, we sold our remaining 22.5 million shares of Wabtec common stock for proceeds of $1.6 billion. See Notes 2 and 3 to the consolidated financial statements for further information.

Also in February 2019, we announced an agreement to sell our BioPharma business within our Healthcare segment to Danaher Corporation for total consideration of approximately $21.4 billion subject to certain adjustments. In the first quarter of 2019, we classified BioPharma as a business held for sale. We expect to complete the sale in the first quarter of 2020, subject to regulatory approval, providing us flexibility and optionality with respect to our remaining Healthcare business. See Note 2 to the consolidated financial statements for further information.

In the second quarter of 2019, we recognized a non-cash pre-tax impairment charge of $0.7 billion related to goodwill at our Grid Solutions equipment and services reporting unit within our Renewable Energy segment. In the third quarter of 2019, we recognized a non-cash impairment charge of $0.7 billion related to goodwill at our Hydro reporting unit within our Renewable Energy segment. These charges were recorded within earnings from continuing operations at Corporate. See Note 8 to the consolidated financial statements for further information.

In the third quarter of 2019, we completed a tender offer to purchase $4.8 billion of GE senior unsecured debt. The total cash consideration paid for these purchases was $5.0 billion, resulting in a pre-tax loss of $0.3 billion (including fees and other costs associated with the tender) which was included in Interest and other financial charges within earnings from continuing operations in the GE Statement of Earnings (Loss). See Note 11 to the consolidated financial statements for further information.

We annually perform premium deficiency testing in the aggregate across our run-off insurance portfolio. As previously disclosed in our second quarter 2019 10-Q, we planned to perform this year’s testing in the third quarter of 2019, consistent with our historical practice prior to 2017 when we reconstructed our claim cost curves. As a result of our testing, we identified a premium deficiency resulting in a $1.0 billion pre-tax ($0.8 billion after-tax) charge to earnings. See the “Other Items” section and Note 12 to the consolidated financial statements for further information.

In October 2019, we announced changes to the U.S. GE Pension Plan and the U.S. GE Supplementary Plan whereby the benefits for approximately 20,000 salaried employees will be frozen effective January 1, 2021 and thereafter these employees will receive increased benefits in the company sponsored defined contribution plan in lieu of participation in a defined benefit plan and benefits for approximately 700 employees that became executives before 2011 will be frozen effective January 1, 2021 and thereafter these employees will earn future benefits in an installment retirement defined benefit plan currently offered to new executives since 2011.  Finally, we announced our intent to pre-fund approximately $4 to $5 billion of our estimated 2021 and 2022 minimum ERISA funding requirements in 2020 and offer approximately 100,000 former U.S. employees with a vested pension benefit a limited-time option to take a lump sum distribution in lieu of future monthly payments. As a result of these actions, we expect to recognize a pre-tax increase in non-operating benefit costs of approximately $0.6 billion in the fourth quarter of 2019. See Capital Resources and Liquidity - Financial Policy within MD&A and Note 13 to the consolidated financial statements for further information.

THIRD QUARTER 2019 RESULTS. Consolidated revenues were $23.4 billion remained flat for the quarter. Offsetting a decrease in revenues largely attributable to the sale of our Distributed Power business in November 2018, industrial segment organic revenues* increased $1.4 billion, or 7%, driven by our Aviation, Renewable Energy and Healthcare segments, partially offset by our Power segment.

Continuing earnings per share was $(0.15). Excluding non-operating benefit costs, gains (losses) on business dispositions, restructuring and other charges, goodwill impairments, unrealized gains (losses) on investments debt extinguishment costs and insurance premium deficiency test charge, Adjusted earnings per share* was $0.15.

*Non-GAAP Financial Measure

4 2019 3Q FORM 10-Q

MD&A CONSOLIDATED RESULTS

For the three months ended September 30, 2019, GE Industrial profit was $(0.5) billion and profit margins were (2.1)%, up $22.6 billion, driven by decreased non-cash goodwill impairment charges of $21.2 billion, decreased restructuring and other costs of $1.2 billion, partially offset by increased net losses from disposed or held for sale businesses of $0.3 billion and increased adjusted Corporate operating costs* of $0.1 billion. Industrial segment profit increased $0.5 billion, or 25%, primarily due to higher results within our Power, Healthcare and Aviation segments, partially offset by the performance of our Renewable Energy segment. Industrial segment organic profit* increased $0.5 billion, or 28%.

GE CFOA from continuing operations was $0.1 billion and $(4.5) billion for the nine months ended September 30, 2019 and 2018, respectively. GE CFOA increased primarily due to no GE Pension Plan contributions in 2019 compared to $6.0 billion in 2018 and lower net disbursements for equipment project costs, partially offset by higher cash used for working capital compared to 2018. GE Industrial Free Cash Flows (FCF)* were $(1.6) billion and $(0.3) billion for the nine months ended September 30, 2019 and 2018, respectively. The increase in cash used was primarily due to higher cash used for working capital compared to 2018, partially offset by lower net disbursements for equipment project costs compared to 2018. See the Capital Resources and Liquidity - Statement of Cash Flows section for further information.

Orders are contractual commitments with customers to provide specified goods or services for an agreed upon price. Backlog is unfilled customer orders for products and product services (expected life of contract sales for product services).

GE INDUSTRIAL BACKLOG (In billions)	September 30, 2019		September 30, 2018
Equipment	$	80.0	$	77.3
Services	306.0		261.5
Total backlog	$	386.0	$	338.7

GE INDUSTRIAL ORDERS	Three months ended September 30				Nine months ended September 30
(In billions)	2019		2018		2019		2018
Equipment	$	11.3	$	12.3	$	32.6	$	35.0
Services	11.3		11.5		32.8		33.5
Total orders	$	22.5	$	23.8	$	65.4	$	68.6
Total organic orders	$	22.8	$	22.9	$	66.4	$	64.6

As of September 30, 2019, backlog increased $47.3 billion, or 14%, from the prior year due to an increase in services backlog of $44.5 billion primarily at Aviation and equipment backlog of $2.7 billion primarily at Renewable Energy.

For the three months ended September 30, 2019, orders decreased $1.3 billion, or 5%, on a reported basis and decreased $0.1 billion, or 1%, organically driven by a decrease in equipment orders of $0.4 billion primarily at Aviation and Power, partially offset by Renewable Energy, and an increase in services orders of $0.3 billion, primarily at Aviation, partially offset by Renewable Energy.

For the nine months ended September 30, 2019, orders decreased $3.2 billion, or 5%, on a reported basis and increased $1.8 billion, or 3%, organically driven by an increase in services orders of $2.1 billion primarily at Aviation and Power and a decrease in equipment orders of $0.3 billion primarily at Aviation and Power, partially offset by Renewable Energy.

Remaining performance obligation (RPO), a defined term under GAAP, is backlog excluding any purchase order that provides the customer with the ability to cancel or terminate without incurring a substantive penalty, even if the likelihood of cancellation is remote based on historical experience. We plan to continue reporting backlog as we believe that it is a useful metric for investors, given its relevance to total orders. See Note 9 to the consolidated financial statements for further information.

September 30, 2019 (In billions)	Equipment			Services			Total
Backlog	$	80.0		$	306.0		$	386.0
Adjustments	(34.2		)	(111.3		)	(145.5		)
Remaining performance obligation	$	45.8		$	194.7		$	240.5

Adjustments to reported backlog of $(145.5) billion as of September 30, 2019 are largely driven by adjustments of $(133.7) billion in our Aviation segment: (1) backlog includes engine contracts for which we have received purchase orders that are cancelable. We have included these in backlog as our historical experience has shown no net cancellations, as any canceled engines are typically moved by the airframer to other program customers; (2) our services backlog includes contracts that are cancelable without substantive penalty, primarily time and materials contracts; (3) backlog includes engines contracted under long-term service agreements, even if the engines have not yet been put into service. These adjustments to reported backlog are expected to be satisfied beyond one year.

*Non-GAAP Financial Measure

2019 3Q FORM 10-Q 5

MD&A CONSOLIDATED RESULTS

REVENUES	Three months ended September 30				Nine months ended September 30
(In billions)	2019		2018		2019		2018
Consolidated revenues	$	23.4	$	23.4	$	69.0	$	70.5
Equipment	11.0		10.3		30.5		30.6
Services	10.4		10.4		31.7		32.3
Industrial segment revenues	21.4		20.7		62.3		62.9
Corporate items and Industrial eliminations	0.1		0.6		1.0		1.7
GE Industrial revenues	$	21.5	$	21.3	$	63.3	$	64.6
Financial services revenues	$	2.1	$	2.5	$	6.6	$	7.1

For the three months ended September 30, 2019, consolidated revenues were flat primarily driven by decreased Financial Services revenues of $0.4 billion and decreased Corporate revenues of $0.2 billion largely attributable to the sale of our Current business in November 2018. These decreases were offset by increased industrial segment revenues of $0.7 billion. The overall foreign currency impact on consolidated revenues was a decrease of $0.2 billion.

Industrial segment revenues increased $0.7 billion, or 3%, as increases at Aviation, Renewable Energy, and Healthcare were partially offset by a decrease at Power. This increase included the net effects of dispositions of $0.5 billion, primarily attributable to the sale of Distributed Power in November 2018, and the effects of a stronger U.S. dollar of $0.2 billion. Excluding the effects of acquisitions, dispositions and foreign currency translation, industrial segment organic revenues* increased $1.4 billion, or 7%.

Financial Services revenues decreased $0.4 billion, or 15%, primarily due to lower gains and volume declines, partially offset by lower impairments.

For the nine months ended September 30, 2019, consolidated revenues decreased $1.5 billion, or 2%, primarily driven by decreased industrial segment revenues of $0.6 billion, decreased Corporate revenues of $0.6 billion largely attributable to the sale of our Current business in November 2018, and decreased Financial Services revenues of $0.4 billion. The overall foreign currency impact on consolidated revenues was a decrease of $1.2 billion.

Industrial segment revenues decreased $0.6 billion, or 1%, as a decrease at Power was partially offset by increases at Aviation, Renewable Energy and Healthcare. This decrease was driven by the net effects of dispositions of $3.0 billion, primarily attributable to the sales of Industrial Solutions, Value-Based Care and Distributed Power in June 2018, July 2018 and November 2018, respectively, and the effects of a stronger U.S. dollar of $1.2 billion, partially offset by the net effects of acquisitions of $0.1 billion. Excluding the effects of acquisitions, dispositions and foreign currency translation, industrial segment organic revenues* increased $3.5 billion, or 6%.

Financial Services revenues decreased $0.4 billion, or 6%, primarily due to volume declines and lower gains, partially offset by lower impairments.

EARNINGS (LOSS) AND EARNINGS (LOSS) PER SHARE	Three months ended September 30						Nine months ended September 30
(In billions; per-share in dollars and diluted)	2019			2018			2019			2018
Continuing earnings	$	(1.3	)	$	(23.0	)	$	(0.7	)	$	(21.9	)
Continuing earnings per share	$	(0.15	)	$	(2.64	)	$	(0.08	)	$	(2.53	)

For the three months ended September 30, 2019, consolidated continuing earnings increased $21.6 billion due to decreased goodwill impairment charges of $21.2 billion, increased GE Industrial continuing earnings of $1.2 billion and decreased non-operating benefit costs of $0.2 billion, partially offset by decreased Financial Services earnings of $0.7 billion, increased interest and other financial charges of $0.2 billion and increased provision for GE Industrial income taxes of $0.1 billion.

GE Industrial continuing earnings decreased $1.2 billion. Corporate items and eliminations increased $0.7 billion primarily attributable to decreased restructuring and other costs of $1.2 billion, partially offset by increased net losses from disposed or held for sale businesses of $0.3 billion and increased adjusted Corporate operating costs* of $0.1 billion. Industrial segment profit increased $0.5 billion, or 25%, with higher profit at Power, Healthcare and Aviation, partially offset by lower profit at Renewable Energy. This increase in industrial segment profit includes the net effects of dispositions of $0.1 billion, primarily associated with the sale of Distributed Power in November 2018. Excluding the effects of acquisitions, dispositions and foreign currency translation, industrial segment organic profit* increased $0.5 billion, or 28%.

Financial Services continuing earnings decreased $0.7 billion, primarily due to a $1.0 billion pre-tax charge identified through the completion of our annual insurance premium deficiency review and lower gains, partially offset by lower impairments and lower excess interest costs. Gains were $0.2 billion and $0.4 billion in the third quarters of 2019 and 2018, respectively, which primarily related to sales of GECAS aircraft and engines resulting in gains of $0.1 billion in both 2019 and 2018 as well as the sale of GE Capital's Energy Financial Services (EFS) debt origination business and equity investments resulting in gains of $0.3 billion in 2018.

For the nine months ended September 30, 2019, consolidated continuing earnings increased $21.2 billion due to decreased goodwill impairment charges of $20.5 billion, decreased non-operating benefit costs of $0.4 billion, decreased provision for GE Industrial income taxes of $0.3 billion driven by the completion of prior years’ audit, increased GE Industrial continuing earnings of $0.1 billion and decreased interest and other financial charges of $0.1 billion, partially offset by increased Financial Services losses of $0.2 billion.

*Non-GAAP Financial Measure

6 2019 3Q FORM 10-Q

MD&A CONSOLIDATED RESULTS

GE Industrial continuing earnings decreased $0.1 billion, or 2%. Corporate items and eliminations increased $0.6 billion primarily attributable to decreased restructuring and other costs of $1.4 billion, partially offset by increased net unrealized losses on investments of $0.3 billion, increased net losses from disposed or held for sale businesses of $0.3 billion and increased adjusted Corporate operating costs* of $0.2 billion. Industrial segment profit decreased $0.5 billion, or 6%, with lower profit at Renewable Energy, partially offset by higher profit at Healthcare, Power and Aviation. This decrease in industrial segment profit was driven in part by the net effects of dispositions of $0.3 billion, primarily associated with the sales of Industrial Solutions, Value-Based Care and Distributed Power in June 2018, July 2018 and November 2018, respectively, offset by the effects of a weaker U.S. dollar of $0.1 billion. Excluding the effects of acquisitions, dispositions and foreign currency translation, industrial segment organic profit* decreased $0.3 billion, or 3%.

Financial Services continuing losses increased $0.2 billion, or 49%, primarily due to a $1.0 billion pre-tax charge identified through the completion of our annual insurance premium deficiency review and lower gains, partially offset by lower impairments, lower excess interest costs and tax law changes. Gains were $0.5 billion and $0.6 billion in the first nine months of 2019 and 2018, respectively, which primarily related to sales of GECAS aircraft and engines resulting in gains of $0.3 billion and $0.2 billion in the first nine months of 2019 and 2018, respectively, as well as the sale of an equity method investment resulting in a gain of $0.1 billion in 2019 at EFS and the sale of EFS' debt origination business and equity investments resulting in gains of $0.4 billion in 2018.

AVIATION AND GECAS 737 MAX. Aviation develops, produces, and sells LEAP aircraft engines through CFM International (CFM), a company jointly owned by GE and Safran Aircraft Engines, a subsidiary of the Safran Group of France. The LEAP-1B engine is the exclusive engine for the Boeing 737 MAX. In March 2019, global regulatory authorities ordered a temporary fleet grounding of the Boeing 737 MAX. In April 2019, Boeing announced a temporary reduction in the 737 MAX production rate, and during the second quarter of 2019, CFM reduced its production rate for the LEAP-1B to meet Boeing's revised aircraft build rate. As a result of the 737 MAX grounding, GE CFOA was adversely affected by an estimated $0.3 billion and $1.0 billion for the three and nine months ended September 30, 2019, respectively, which primarily represents receivables growth partially offset by progress collections. If the 737 MAX remains grounded, based on current assumptions, we anticipate a negative impact to GE CFOA of approximately $0.4 billion in the fourth quarter of 2019. See Capital Resources and Liquidity - Statement of Cash Flows for further information.

At September 30, 2019, GECAS owned 29 of these aircraft, 25 of which are leased to various lessees that remain obligated to make contractual rental payments. In addition, GECAS has made pre-delivery payments to Boeing related to 150 of these aircraft on order and has made financing commitments to acquire a further 19 aircraft under purchase and leaseback contracts with airlines.

As of September 30, 2019, we have approximately $2.5 billion of net assets related to the 737 MAX program that primarily comprises pre-delivery payments and owned aircraft subject to lease offset by progress collections. No impairment charges were incurred related to the 737 MAX aircraft and related balances in the first nine months of 2019 as we continue to believe these assets are fully recoverable. We continue to monitor these developments with our airline customers, lessees and Boeing.

SEGMENT OPERATIONS. Segment revenues include sales of products and services by the segment. Industrial segment profit is determined based on performance measures used by our Chief Operating Decision Maker (CODM), who is our 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, certain gains and losses from acquisitions or dispositions, and certain litigation settlements. See the Corporate Items and Eliminations section for additional information about costs excluded from segment profit.

Segment profit excludes results reported as discontinued operations and 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.

Interest and other financial charges, income taxes and non-operating benefit costs are excluded in determining segment profit for the industrial segments. Interest and other financial charges, income taxes, non-operating benefit costs and GE Capital preferred stock dividends are included in determining segment profit (which we sometimes refer to as “net earnings”) for the Capital segment.

Other income is included in segment profit for the industrial segments.

Certain corporate costs, such as those related to 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.

2019 3Q FORM 10-Q 7

MD&A SEGMENT OPERATIONS

SUMMARY OF REPORTABLE SEGMENTS	Three months ended September 30								Nine months ended September 30
(Dollars in millions)	2019			2018			V%		2019			2018			V%
Power	$	3,926		$	4,559		(14)	%	$	13,224		$	16,768		(21)	%
Renewable Energy	4,425			3,920			13	%	10,590			9,642			10	%
Aviation	8,109			7,480			8	%	23,940			22,111			8	%
Healthcare	4,923			4,707			5	%	14,540			14,387			1	%
Total industrial segment revenues	21,383			20,665			3	%	62,293			62,908			(1)	%
Capital	2,097			2,473			(15)	%	6,645			7,075			(6)	%
Total segment revenues	23,480			23,138			1	%	68,938			69,982			(1)	%
Corporate items and eliminations	(120		)	254			U		39			531			(93)	%
Consolidated revenues	$	23,360		$	23,392		—	%	$	68,976		$	70,513		(2)	%
Power	$	(144	)	$	(676	)	79	%	$	84		$	(22	)	F
Renewable Energy	(98		)	116			U		(469		)	312			U
Aviation	1,718			1,665			3	%	4,764			4,743			—	%
Healthcare	974			861			13	%	2,714			2,522			8	%
Total industrial segment profit (loss)	2,450			1,967			25	%	7,092			7,555			(6)	%
Capital	(645		)	19			U		(599		)	(403		)	(49	)%
Total segment profit (loss)	1,806			1,986			(9)	%	6,493			7,151			(9)	%
Corporate items and eliminations	(808		)	(1,523		)	47	%	(2,013		)	(2,596		)	22	%
GE goodwill impairments	(740		)	(21,973		)	97	%	(1,484		)	(21,973		)	93	%
GE interest and other financial charges	(791		)	(590		)	(34)	%	(1,693		)	(1,773		)	5	%
GE non-operating benefit costs	(562		)	(760		)	26	%	(1,684		)	(2,132		)	21	%
GE benefit (provision) for income taxes	(229		)	(95		)	U		(327		)	(624		)	48	%
Earnings (loss) from continuing operations attributable to GE common shareowners	(1,325		)	(