EX-99 2 ge4q2019ex99.htm EXHIBIT 99 Exhibit


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GE ANNOUNCES FOURTH QUARTER 2019 RESULTS
Company delivers organic revenue growth, margin expansion, and positive cash flow in 2019
Fourth quarter 2019:
Total orders $24.9B, (5)%; organic orders (3)%
Total revenues (GAAP) $26.2B, (1.0)%; Industrial segment organic revenues* $24.7B, +4.6%
Industrial profit margin (GAAP) of 6.4%, +460 bps; adjusted Industrial profit margin* 11.3%, +410 bps
Continuing EPS (GAAP) $0.07, +17%; adjusted EPS* $0.21, +50%
GE CFOA (GAAP) $4.5B; Industrial free cash flow* $3.9B
Full year 2019:
Total orders $90.3B, (5)%; organic orders +1%; backlog $405B, +15%
Total revenues (GAAP) $95.2B, (1.9)%; Industrial segment organic revenues* $88.1B, +5.5%
Industrial profit margin (GAAP) of 2.1%, +2,520 bps; adjusted Industrial profit margin* 10.0%, +60 bps
Continuing EPS (GAAP) $(0.01), +100%; adjusted EPS* $0.65, +14%
GE CFOA (GAAP) $4.6B; Industrial free cash flow* $2.3B
BOSTON — January 29, 2020 — GE (NYSE:GE) announced results for the fourth quarter ending December 31, 2019.
GE Chairman and CEO H. Lawrence Culp, Jr. said, “The fourth quarter marked a strong close to the year for GE. We met or exceeded our full-year financial targets and are on a positive trajectory for 2020. We're proud of our progress in 2019, including decisive actions to reduce our leverage and strengthen our businesses. Our work continues, but GE's committed team, exceptional technology, and global network make me more confident than ever that we can deliver."
Culp continued, “Our priorities looking forward are clear. We are solidifying our financial position, continuing to strengthen our businesses as improvement efforts build momentum, and driving long-term profitable growth. We remain committed to creating value as we continue our multi-year transformation.”
GE took action in 2019 on its strategic priorities:
Reduced GE Industrial leverage, largely driven by reducing net debt* by $7 billion, bringing GE's net debt*/EBITDA* ratio from 4.8x in 2018 to 4.2x in 2019. Used cash from Wabtec and Baker Hughes transactions to pay down debt, including a $5 billion debt tender. Announced the sale of BioPharma to generate further cash for deleveraging as well as U.S. pension benefit changes to further reduce debt.
Reduced GE Capital leverage, largely driven by reducing GE Capital debt by $7 billion, bringing GE Capital's debt-to-equity ratio from 5.7x in 2018 to 3.9x in 2019. Completed asset reductions of approximately $12 billion, exceeding the 2019 target of $10 billion and the two-year target of $25 billion.
Strengthened GE's businesses. Aviation and Healthcare generated profitable growth, Power is stabilizing its businesses, Renewable Energy delivered a steep volume ramp in Onshore Wind to meet customer demand despite mixed performance overall, and GE Capital grew earnings partly through better operations.
Began to drive Lean transformation and mindset throughout GE. Established common operating processes and metrics and a series of standard operational, talent, strategy, and budget reviews. Shifted decision-making and accountability to the businesses, including delayering Power and Renewable Energy.
Named new leaders, including Carolina Dybeck Happe as Chief Financial Officer (to start in early 2020), Kevin Cox as Chief HR Officer, Pat Byrne as CEO of Digital, Rachel Duan as CEO of Global Growth Organization, John Godsman as VP Business Development, Steve Winoker as VP Investor Relations, and in newly created roles, Monish Patolawala as VP Operational Transformation and Chris Pereira as Chief Risk Officer.

*Non-GAAP Financial Measure                    1



Total Company Results
 
Three months ended December 31
Twelve months ended December 31
Dollars in millions; per-share amounts in dollars and diluted

2019

2018

Year on Year

2019

2018

Year on Year

GAAP Metrics
 
 
 
 
 
 
GE Cash from Operating Activities (GE CFOA)
$4,537
$5,159
(12
)%
$4,614
$701
F

Continuing EPS
0.07
0.06
17
 %
(0.01)
(2.47)
100
 %
Net EPS
0.06
0.07
(14
)%
(0.62)
(2.62)
76
 %
Total Revenues
26,238
26,499
(1.0
)%
95,214
97,012
(1.9
)%
GE Industrial Profit Margin
6.4
%
1.8
%
460
  bps
2.1
%
(23.1
)%
2,520
  bps
Non-GAAP Metrics
 
 
 
 
 
 
GE Industrial Free Cash Flow (FCF)
$3,884
$4,644
(16
)%
$2,322
$4,341
(47
)%
Adjusted EPS-a) 
0.21
0.14
50
 %
0.65
0.57
14
 %
GE Industrial Segment Organic Revenues
24,672
23,598
4.6
 %
88,053
83,432
5.5
 %
Adjusted GE Industrial Operating Profit-b)
2,767
1,753
58
 %
8,743
8,392
4
 %
Adjusted GE Industrial Profit Margin-b)
11.3
%
7.2
%
410
  bps
10.0
%
9.4
 %
60
  bps
(a- Excludes non-operating benefit costs, gains (losses), restructuring and other charges, goodwill impairments, tax reform enactment, debt extinguishment costs, BioPharma deal expenses, and 2019 Insurance premium deficiency test charge
(b- Excludes interest and other financial charges, non-op benefit costs, gains (losses), restructuring & other charges, and goodwill impairments
 
We present both GAAP and non-GAAP measures to provide investors with additional information. We believe that providing these non-GAAP measures along with GAAP measures allows for increased comparability of our ongoing performance from period to period. Please see pages 9-17 for explanations of why we use these non-GAAP measures and the reconciliation to the most comparable GAAP financial measures.



2019 Performance vs. Outlook
 
Investor Outlook
2Q Earnings
Baker Hughes
3Q Earnings
2019 actuals
 
March 14, 2019
July 31, 2019
 Pro Forma-a)
October 30, 2019
January 29, 2020
Industrial Segment Organic Revenue* Growth
Low- to mid-single digits
Mid-single digits
Mid-single digits
Mid-single digits
5.5%
Adjusted GE Industrial Profit Margin* Expansion
~Flat to up ~100 bps
~Flat to up ~100 bps
~Flat to up ~100 bps
~Flat to up ~100 bps
60 bps
Adjusted EPS*
$0.50 - $0.60
$0.55 - $0.65
$0.50 - $0.60
$0.55 - $0.65
$0.65
Industrial Free Cash Flow*
$(2) - 0 billion
$(1) - 1 billion
$(1) - 1 billion
$0 - 2 billion
$2.3 billion
Restructuring (Industrial): Expense
$2.4 - 2.7 billion
$1.7 - 2.0 billion
$1.5 - 1.8 billion
$1.1 - 1.4 billion
$1.3 billion
Restructuring (Industrial): Cash Cost
$2.0+ billion
$1.5+ billion
$1.5+ billion
$1.3+ billion
$1.2 billion
(a- Pro forma adjustments reflect Baker Hughes deconsolidation in the third quarter of 2019. Original full-year outlook assumed consolidating Baker Hughes through the end of 2019.


*Non-GAAP Financial Measure                    2



Results by Reporting Segment
The following segment discussions and variance explanations are intended to reflect management’s view of the relevant comparisons of financial results.

Power
 
Three months ended December 31
Twelve months ended December 31
(Dollars in millions)
2019

2018

Year on Year

2019

2018

Year on Year

Orders
$4,457
$6,382
(30
)%
$16,899
$22,645
(25
)%
Revenues
5,401
5,381
%
18,625
22,150
(16
%)
Segment Profit/(Loss)
302
(786)
F

386
(808)
F

Segment Profit/(Loss) Margin
5.6
%
(14.6
)%
2,020 bps

2.1
%
(3.6
)%
570 bps

Orders of $4.5 billion were down 30% reported and down 28% organically. Gas Power orders were down 8% reported and organically, largely driven by the non-repeat of a large turnkey equipment order. The business booked orders for 22 heavy-duty gas turbines, including three HA units and one aeroderivative unit, and services had its strongest orders growth quarter of 2019. Power Portfolio orders were down 57% reported and 55% organically, driven by the non-repeat of a large order in Steam Power.

Revenues of $5.4 billion were flat reported and up 5% organically*, with Gas Power up 8% reported and 9% organically* and Power Portfolio down 16% reported and 4% organically*. Segment profit of $302 million was favorable both reported and organically*. Segment margins improved, largely due to better operational rigor and stronger processes at Gas Power as the charges it experienced in 2018 did not repeat. The team continues to stabilize operations and drive cost-out.


Renewable Energy
 
Three months ended December 31
Twelve months ended December 31
(Dollars in millions)
2019

2018

Year on Year

2019

2018

Year on Year

Orders
$4,680
$5,274
(11
)%
$16,884
$15,283
10
%
Revenues
4,747
4,646
2
%
15,337
14,288
7
%
Segment Profit/(Loss)
(197)
(21)
U

(666)
292
U

Segment Profit/(Loss) Margin
(4.1
)%
(0.5
)%
(360) bps

(4.3
)%
2.0
%
(630) bps

Orders of $4.7 billion were down 11% reported and 10% organically due to the non-repeat of large deals in Hydro and Grid Solutions. Onshore Wind orders were flat reported, and new order pricing in Onshore Wind continues to stabilize. Revenues of $4.7 billion were up 2% reported and 4% organically*. Onshore Wind marked record deliveries in the quarter of 1,553 total turbines and repower kits, with roughly two-thirds of these in the U.S. Segment profit of negative $197 million was driven by execution issues, particularly in Grid; price headwinds; tariffs; and increased R&D investment; partially offset by positive volume.


Aviation
 
Three months ended December 31
Twelve months ended December 31
(Dollars in millions)
2019

2018

Year on Year

2019

2018

Year on Year

Orders
$10,664
$8,753
22
%
$36,738
$35,517
3
%
Revenues
8,936
8,456
6
%
32,875
30,566
8
%
Segment Profit/(Loss)
2,056
1,723
19
%
6,820
6,466
5
%
Segment Profit/(Loss) Margin
23.0
%
20.4
%
260 bps

20.7
%
21.2
%
(50) bps

Orders of $10.7 billion were up 22% reported and 23% organically with equipment up 37%, primarily driven by orders for two years of end-market demand from the formation of the Aeroderivatives joint venture between Baker Hughes & GE Power following GE's deconsolidation of Baker Hughes. Services orders were up 12% reported. Revenues of $8.9 billion grew 6% reported and 7% organically* with equipment up 9% reported—driven by sales of 420 LEAP-1A and -1B units, up 41 from last year, partially offset by CFM56 unit volume—and services up 4% reported. Segment profit of $2.1 billion was up 19% reported and organically*, driven by improved volume, price, and net productivity, partially offset by engine mix. CFM continues to work closely with Boeing to ensure the safe return to service of the 737 MAX.


*Non-GAAP Financial Measure                    3



Healthcare
 
Three months ended December 31
Twelve months ended December 31
(Dollars in millions)
2019

2018

Year on Year

2019

2018

Year on Year

Orders
$5,896
$5,756
2
%
$21,172
$20,897
1
%
Revenues
5,402
5,398
%
19,942
19,784
1
%
Segment Profit/(Loss)
1,183
1,176
1
%
3,896
3,698
5
%
Segment Profit/(Loss) Margin
21.9
%
21.8
%
10 bps

19.5
%
18.7
%
80 bps

Orders of $5.9 billion were up 2% reported and 3% organically, with Healthcare Systems up 1% organically, driven by growth in Life Care Solutions, Services, and Ultrasound, partially offset by Imaging. Life Sciences orders were up 10% organically. Revenues of $5.4 billion were flat reported and up 1% organically*, with Healthcare Systems down 1% reported and Life Sciences up 2% reported. Segment profit of $1.2 billion was up 1% reported and flat organically* driven by volume and cost productivity, offset by tariffs, price, and program investments.

 
GE Capital
 
Three months ended December 31
Twelve months ended December 31
(Dollars in millions)
2019
2018
Year on Year

2019
2018
Year on Year

Capital continuing operations
$69
$(86)
F

$(530)
$(489)
(8
)%
Discontinued operations
(63)
(91)
31
%
192
(1,670)
F

GE Capital Earnings
6
(177)
F

(338)
(2,159)
84
 %
(In billions)
December 31, 2019
December 31, 2018
Year on Year
GE Capital Assets
121.5
123.9
(2.5)
Continuing operations generated net income of $69 million in the quarter, up $27 million from the same period last year excluding prior-year tax reform impact of $128 million, primarily due to lower marks and impairments and lower incurred interest expense, partially offset by lower gains, tax benefits, and operations. GE Capital ended the quarter with approximately $121 billion of assets, including $19 billion of liquidity. WMC, a discontinued U.S. mortgage subsidiary of GE Capital, concluded its Chapter 11 bankruptcy case, and as of year-end, GE Capital has no further liabilities to WMC.

GE Capital completed asset reductions of approximately $8 billion in the quarter, totaling approximately $12 billion in 2019, exceeding its 2019 target of $10 billion. It also enabled Industrial orders of $1.6 billion in the quarter and $6.2 billion in the year, primarily driven by Energy Financial Services' (EFS) support of Power & Renewable Energy. GE remains focused on de-risking GE Capital, including improving its leverage profile. It will complete its annual statutory cash flow test of its insurance business during the first quarter of 2020.


2020 Outlook
GE announced the following total company outlook for full-year 2020:
GE Industrial revenues* to grow organically in the low-single-digit range.
Adjusted GE Industrial profit margin* to expand organically in a range from 0 to 75 basis points.
Adjusted earnings per share* of $0.50 to $0.60.
GE Industrial free cash flow* of $2 billion to $4 billion.
Compared to 2019, GE's 2020 outlook assumes lower cash and profit from BioPharma due to its planned disposition in the first quarter as well as reduced cash from Baker Hughes shareholder dividends in line with the orderly sale of GE's remaining stake. In 2019, for the full year, BioPharma generated approximately $1.3 billion* in cash and $1.5 billion in profit, and GE received approximately $350 million in Baker Hughes dividends. This outlook is also dependent on the 737 MAX's return to service, which GE is planning for in mid-2020, in line with Boeing. GE expects to offset these effects through performance improvements and reduced non-operational headwinds. GE also expects to achieve a GE Industrial net debt*/EBITDA* ratio of less than 2.5x, as well as a less than 4-to-1 debt-to-equity ratio for GE Capital, in 2020.

GE will hold an Investor Update on Wednesday, March 4, 2020, with additional details on its 2020 outlook, including by segment.

*Non-GAAP Financial Measure                    4



GENERAL ELECTRIC COMPANY
CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED)
 
Consolidated
 
 
GE(a)
 
Financial Services (GE Capital)
Three months ended December 31
2019

 
2018

V%

 
 
2019

 
2018

V%

 
2019

 
2018

V%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales of goods and services
$
24,355

 
$
24,336

 %
 
 
$
24,460

 
$
24,437

 %
 
$
22

 
$
21

5
 %
GE Capital revenues from services
1,883

 
2,163

 
 
 

 

 
 
2,073

 
2,455

 
Total revenues
26,238

 
26,499

(1
)%
 
 
24,460

 
24,437

 %
 
2,096

 
2,476

(15
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales
19,080

 
20,574

 
 
 
18,679

 
20,177

 
 
528

 
532

 
Selling, general and administrative expenses
3,829

 
3,630

 
 
 
3,670

 
3,394

 
 
254

 
354

 
Interest and other financial charges
955

 
1,180

 
 
 
423

 
642

 
 
619

 
686

 
Insurance liabilities and annuity benefits
582

 
782

 
 
 

 

 
 
583

 
777

 
Goodwill impairments
2

 
162

 
 
 
2

 
162

 
 

 

 
Non-operating benefit costs
1,150

 
612

 
 
 
1,144

 
608

 
 
6

 
3

 
Other costs and expenses
120

 
160

 
 
 

 
(18
)
 
 
101

 
231

 
Total costs and expenses
25,718

 
27,101

(5
)%
 
 
23,917

 
24,966

(4
)%
 
2,090

 
2,584

(19
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income
1,052

 
933

 
 
 
1,023

 
967

 
 

 

 
GE Capital earnings (loss) from continuing
  operations

 

 
 
 
69

 
(86
)
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
  before income taxes
1,571

 
331

F

 
 
1,634

 
353

F

 
6

 
(107
)
F

Benefit (provision) for income taxes
(727
)
 
366

 
 
 
(982
)
 
157

 
 
255

 
209

 
Earnings (loss) from continuing operations
845

 
697

21
 %
 
 
652

 
510

28
 %
 
262

 
102

F

Earnings (loss) from discontinued
  operations, net of taxes
(123
)
 
163

 
 
 
(123
)
 
163

 
 
(63
)
 
(91
)
 
Net earnings (loss)
721

 
860

(16
)%
 
 
529

 
673

(21
)%
 
199

 
10

F

Less net earnings (loss) attributable to
  noncontrolling interests
(7
)
 
99

 
 
 
(9
)
 
99

 
 
2

 

 
Net earnings (loss) attributable to the Company
728

 
761

(4
)%
 
 
538

 
574

(6
)%
 
197

 
10

F

Preferred stock dividends
(190
)
 
(187
)
 
 
 

 

 
 
(190
)
 
(187
)
 
Net earnings (loss) attributable to
  GE common shareholders
$
538

 
$
574

(6
)%
 
 
$
538

 
$
574

(6
)%
 
$
6

 
$
(177
)
F

Amounts attributable to GE common
  shareholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
$
845

 
$
697

21
 %
 
 
$
652

 
$
510

28
 %
 
$
262

 
$
102

F

Less net earnings (loss) attributable
  to noncontrolling interests, continuing operations
(9
)
 
1

 
 
 
(11
)
 
1

 
 
2

 

 
Earnings (loss) from continuing operations
  attributable to the Company
854

 
696

23
 %
 
 
663

 
509

30
 %
 
259

 
101

F

Preferred stock dividends
(190
)
 
(187
)
 
 
 

 

 
 
(190
)
 
(187
)
 
Earnings (loss) from continuing operations
  attributable to GE common shareholders
663

 
509

30
 %
 
 
663

 
509

30
 %
 
69

 
(86
)
F

Earnings (loss) from discontinued
  operations, net of taxes
(123
)
 
163

 
 
 
(123
)
 
163

 
 
(63
)
 
(91
)
 
Less net earnings (loss) attributable to
  noncontrolling interests, discontinued operations
2

 
98

 
 
 
2

 
98

 
 

 

 
Net earnings (loss) attributable to GE
  common shareholders
$
538

 
$
574

(6
)%
 
 
$
538

 
$
574

(6
)%
 
$
6

 
$
(177
)
F

Per-share amounts - earnings (loss) from
  continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share
$
0.07

 
$
0.06

17
 %
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share
$
0.08

 
$
0.06

33
 %
 
 
 
 
 
 
 
 
 
 
 
Per-share amounts - net earnings (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share
$
0.06

 
$
0.07

(14
)%
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share
$
0.06

 
$
0.07

(14
)%
 
 
 
 
 
 
 
 
 
 
 
Total average equivalent shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted
8,742

 
8,701

 %
 
 
 
 
 
 
 
 
 
 
 
Basic
8,736

 
8,700

 %
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.01

 
$
0.01

 %
 
 
 
 
 
 
 
 
 
 
 
(a) Represents the adding together of all GE Industrial affiliates and GE Capital continuing operations on a one-line basis. See Note 1 to the 2018 consolidated financial statements at www.ge.com/ar2018 for further information about consolidation matters.
Amounts may not add due to rounding. Dollar amounts and share amounts in millions; per-share amounts in dollars.


5



GENERAL ELECTRIC COMPANY
CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED)
 
Consolidated
 
 
GE(a)
 
Financial Services (GE Capital)
Twelve months ended December 31
2019

 
2018

V%

 
 
2019

 
2018

V%

 
2019

 
2018

V%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales of goods and services
$
87,487

 
$
88,940

(2
)%
 
 
$
87,718

 
$
89,038

(1
)%
 
$
79

 
$
121

(35
)%
GE Capital revenues from services
7,728

 
8,072

 

 
 

 

 

 
8,662

 
9,430

 
Total revenues
95,214

 
97,012

(2
)%
 
 
87,719

 
89,038

(1
)%
 
8,741

 
9,551

(8
)%
 
 
 
 
 

 
 
 
 
 
 

 
 
 
 
 
Cost of sales
70,029

 
72,818

 

 
 
68,285

 
70,875

 

 
2,080

 
2,183

 
Selling, general and administrative expenses
13,949

 
14,643

 

 
 
13,404

 
13,851

 

 
931

 
1,341

 
Interest and other financial charges
4,227

 
4,766

 

 
 
2,115

 
2,415

 

 
2,532

 
2,982

 
Insurance liabilities and annuity benefits
3,294

 
2,790

 

 
 

 

 

 
3,353

 
2,849

 
Goodwill impairments
1,486

 
22,136

 
 
 
1,486

 
22,136

 
 

 

 
Non-operating benefit costs
2,844

 
2,753

 
 
 
2,828

 
2,740

 
 
16

 
12

 
Other costs and expenses
458

 
414

 

 
 

 
(51
)
 

 
480

 
558

 
Total costs and expenses
96,287

 
120,320

(20
)%
 
 
88,118

 
111,967

(21
)%
 
9,392

 
9,926

(5
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income
2,222

 
2,321

 

 
 
2,200

 
2,317

 

 

 

 
GE Capital earnings (loss) from continuing
operations

 

 

 
 
(530
)
 
(489
)
 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
before income taxes
1,149

 
(20,987
)
F

 
 
1,271

 
(21,101
)
F

 
(652
)
 
(375
)
(74
)%
Benefit (provision) for income taxes
(726
)
 
(93
)
 

 
 
(1,309
)
 
(467
)
 

 
582

 
374

 
Earnings (loss) from continuing operations
423

 
(21,080
)
F

 
 
(38
)
 
(21,568
)
100
 %
 
(69
)
 
(1
)
U

Earnings (loss) from discontinued
operations, net of taxes
(5,335
)
 
(1,363
)
 

 
 
(5,335
)
 
(1,363
)
 

 
192

 
(1,670
)
 
Net earnings (loss)
(4,912
)
 
(22,443
)
78
 %
 
 
(5,373
)
 
(22,931
)
77
 %
 
123

 
(1,672
)
F

Less net earnings (loss) attributable to
noncontrolling interests
66

 
(89
)
 

 
 
66

 
(129
)
 

 
1

 
40

 
Net earnings (loss) attributable to the Company
(4,979
)
 
(22,355
)
78
 %
 
 
(5,439
)
 
(22,802
)
76
 %
 
122

 
(1,712
)
F

Preferred stock dividends
(460
)
 
(447
)
 

 
 

 

 

 
(460
)
 
(447
)
 
Net earnings (loss) attributable to
GE common shareholders
$
(5,439
)
 
$
(22,802
)
76
 %
 
 
$
(5,439
)
 
$
(22,802
)
76
 %
 
$
(338
)
 
$
(2,159
)
84
 %
Amounts attributable to GE common
shareholders:
 
 
 
 

 
 
 
 
 
 

 
 
 
 
 
Earnings (loss) from continuing operations
$
423

 
$
(21,080
)
F

 
 
$
(38
)
 
$
(21,568
)
100
 %
 
$
(69
)
 
$
(1
)
U

Less net earnings (loss) attributable
to noncontrolling interests, continuing operations
7

 
(90
)
 

 
 
6

 
(130
)
 

 
1

 
40

 
Earnings (loss) from continuing operations
attributable to the Company
416

 
(20,991
)
F

 
 
(44
)
 
(21,438
)
100
 %
 
(70
)
 
(42
)
(67
)%
Preferred stock dividends
(460
)
 
(447
)
 

 
 

 

 

 
(460
)
 
(447
)
 
Earnings (loss) from continuing operations
attributable to GE common shareholders
(44
)
 
(21,438
)
100
 %
 
 
(44
)
 
(21,438
)
100
 %
 
(530
)
 
(489
)
(8
)%
Earnings (loss) from discontinued
operations, net of taxes
(5,335
)
 
(1,363
)
 

 
 
(5,335
)
 
(1,363
)
 

 
192

 
(1,670
)
 
Less net earnings (loss) attributable to
noncontrolling interests, discontinued operations
60

 
1

 

 
 
60

 
1

 

 

 

 
Net earnings (loss) attributable to GE
common shareholders
$
(5,439
)
 
$
(22,802
)
76
 %
 
 
$
(5,439
)
 
$
(22,802
)
76
 %
 
$
(338
)
 
$
(2,159
)
84
 %
Per-share amounts - earnings (loss) from
continuing operations
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share
$
(0.01
)
 
$
(2.47
)
100
 %
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share
$
(0.01
)
 
$
(2.47
)
100
 %
 
 
 
 
 
 
 
 
 
 
 
Per-share amounts - net earnings (loss)
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share
$
(0.62
)
 
$
(2.62
)
76
 %
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share
$
(0.62
)
 
$
(2.62
)
76
 %
 
 
 
 
 
 
 
 
 
 
 
Total average equivalent shares
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
Diluted
8,724

 
8,691

 %
 
 
 
 
 
 
 
 
 
 
 
Basic
8,724

 
8,691

 %
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.04

 
$
0.37

(89
)%
 
 
 
 
 
 
 
 
 
 
 
(a) Represents the adding together of all GE Industrial affiliates and GE Capital continuing operations on a one-line basis. See Note 1 to the 2018 consolidated financial statements at www.ge.com/ar2018 for further information about consolidation matters.
Amounts may not add due to rounding. Dollar amounts and share amounts in millions; per-share amounts in dollars.


6



GENERAL ELECTRIC COMPANY
 
 
 
 
 
 
 
 
 
 
 
SUMMARY OF OPERATING SEGMENTS (UNAUDITED)
 
 
 
 
 
 
 
 
 
Three months ended December 31
 
Twelve months ended December 31
(Dollars in millions)
2019

 
2018

 
V%

 
2019

 
2018

 
V%

Revenues(a)
 
 
 
 
 
 
 
 
 
 
 
Power
$
5,401

 
$
5,381

 
 %
 
$
18,625

 
$
22,150

 
(16
)%
Renewable Energy
4,747

 
4,646

 
2
 %
 
15,337

 
14,288

 
7
 %
Aviation
8,936

 
8,456

 
6
 %
 
32,875

 
30,566

 
8
 %
Healthcare
5,402

 
5,398

 
 %
 
19,942

 
19,784

 
1
 %
Total industrial segment revenues
24,486

 
23,881

 
3
 %
 
86,778

 
86,789

 
 %
Capital
2,096

 
2,476

 
(15
)%
 
8,741

 
9,551

 
(8
)%
Total segment revenues
26,581

 
26,357

 
1
 %
 
95,519

 
96,339

 
(1
)%
Corporate items and eliminations(a)
(343
)
 
142

 
U

 
(305
)
 
673

 
U

Consolidated revenues
$
26,238

 
$
26,499

 
(1
)%
 
$
95,214

 
$
97,012

 
(2
)%
Segment profit (loss)(a)
 
 
 
 
 
 
 
 
 
 
 
Power
$
302

 
$
(786
)
 
F

 
$
386

 
$
(808
)
 
F

Renewable Energy
(197
)
 
(21
)
 
U

 
(666
)
 
292

 
U

Aviation
2,056

 
1,723

 
19
 %
 
6,820

 
6,466

 
5
 %
Healthcare
1,183

 
1,176

 
1
 %
 
3,896

 
3,698

 
5
 %
Total industrial segment profit
3,344

 
2,092

 
60
 %
 
10,436

 
9,647

 
8
 %
Capital
69

 
(86
)
 
F

 
(530
)
 
(489
)
 
(8
)%
Total segment profit (loss)
3,413

 
2,007

 
70
 %
 
9,906

 
9,158

 
8
 %
Corporate items and eliminations(a)
(199
)
 
(241
)
 
18
 %
 
(2,212
)
 
(2,837
)
 
22
 %
GE goodwill impairments
(2
)
 
(162
)
 
99
 %
 
(1,486
)
 
(22,136
)
 
93
 %
GE interest and other financial charges
(423
)
 
(642
)
 
34
 %
 
(2,115
)
 
(2,415
)
 
12
 %
GE non-operating benefit costs
(1,144
)
 
(608
)
 
(88
)%
 
(2,828
)
 
(2,740
)
 
(3
)%
GE benefit (provision) for income taxes
(982
)
 
157

 
U

 
(1,309
)
 
(467
)
 
U

Earnings (loss) from continuing operations attributable to GE common shareholders
663

 
509

 
30
 %
 
(44
)
 
(21,438
)
 
100
 %
Earnings (loss) from discontinued operations, net of taxes
(123
)
 
163

 
U

 
(5,335
)
 
(1,363
)
 
U

Less net earnings attributable to noncontrolling interests, discontinued operations
2

 
98

 
(98
)%
 
60

 
1

 
F

Earnings (loss) from discontinued operations, net of tax and noncontrolling interests
(125
)
 
65

 
U

 
(5,395
)
 
(1,364
)
 
U

Consolidated net earnings (loss) attributable to GE common shareholders
$
538

 
$
574

 
(6
)%
 
$
(5,439
)
 
$
(22,802
)
 
76
 %
(a)
Segment revenues include sales of products and services related to the segment. Segment profit excludes results reported as discontinued operations, restructuring and other charges, 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, non-operating benefit costs, income taxes, and preferred stock dividends according to how a particular segment's management is measured – excluded in determining segment profit for Power, Renewable Energy, Aviation and Healthcare; included in determining segment profit, which we sometimes refer to as "net earnings," for Capital. 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. Industrial segment revenues and profit include the sum of our four industrial reporting segments without giving effect to the elimination of transactions among such segments and between these segments and our financial services segment. Total segment revenues and profit include the sum of our four industrial segments and one financial services segment, without giving effect to the elimination of transactions among such segments. We believe that this provides investors with a view as to the results of all of our segments, without inter-segment eliminations and corporate items.

Amounts may not add due to rounding




7



GENERAL ELECTRIC COMPANY
CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
 
 
Consolidated
 
GE(a)
 
Financial Services (GE Capital)
 
 
December 31

 
December 31

 
December 31

 
December 31

 
December 31

 
December 31

(Dollars in billions)
 
2019

 
2018

 
2019

 
2018

 
2019

 
2018

Assets
 
 
 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash and marketable securities(b)(c)
 
$
84.9

 
$
64.6

 
$
27.6

 
$
16.8

 
$
57.3

 
$
47.9

Current receivables
 
16.8

 
14.6

 
13.9

 
10.3

 

 

Financing receivables – net
 
3.1

 
7.7

 

 

 
7.0

 
13.6

Inventories
 
14.1

 
13.8

 
14.1

 
13.8

 

 

Property, plant & equipment - net
 
43.3

 
43.6

 
14.4

 
14.8

 
29.6

 
29.5

Operating lease right-of-use-assets
 
2.9

 

 
3.1

 

 
0.2

 

Receivable from GE Capital(e)(f)
 

 

 
19.1

 
22.5

 

 

Investment in GE Capital
 

 

 
15.3

 
11.4

 

 

Goodwill & intangible assets
 
37.4

 
46.2

 
36.4

 
45.0

 
1.0

 
1.1

Contract assets and other deferred assets
 
16.8

 
17.4

 
16.8

 
17.4

 

 

Other assets
 
33.5

 
37.6

 
16.6

 
18.8

 
22.1

 
27.2

Assets of businesses held for sale
 
9.1

 
1.6

 
8.6

 
1.5

 
0.2

 

Assets of discontinued operations
 
4.1

 
63.9

 
0.2

 
59.2

 
3.9

 
4.6

Total assets
 
$
266.0

 
$
311.1

 
$
186.1

 
$
231.5

 
$
121.5

 
$
123.9

Liabilities and equity
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings(d)(f)
 
$
90.9

 
$
103.6

 
$
20.7

 
$
26.0

 
$
39.9

 
$
43.0

Borrowings assumed by GE(e)
 

 

 
31.4

 
36.3

 
19.1

 
22.5

Operating lease liabilities
 
3.2

 

 
3.4

 

 
0.2

 

Insurance liabilities and annuity benefits
 
39.8

 
35.6

 

 

 
40.2

 
36.0

Non-current compensation and benefits
 
31.7

 
31.9

 
31.2

 
31.5

 
0.5

 
0.5

Other liabilities
 
68.8

 
68.5

 
68.0

 
68.1

 
5.9

 
8.7

Liabilities of businesses held for sale
 
1.7

 
0.7

 
1.6

 
0.7

 
0.1

 

Liabilities of discontinued operations
 
0.2

 
19.3

 
0.1

 
17.5

 
0.1

 
1.8

GE shareholders' equity
 
28.3

 
31.0

 
28.3

 
31.0

 
15.3

 
11.4

Noncontrolling interests
 
1.5

 
20.5

 
1.4

 
20.5

 
0.1

 

Total liabilities and equity
 
$
266.0

 
$
311.1

 
$
186.1

 
$
231.5

 
$
121.5

 
$
123.9

(a)
Represents the adding together of all GE Industrial affiliates and GE Capital continuing operations on a one-line basis. See Note 1 to the 2018 consolidated financial statements at www.ge.com/ar2018 for further information about consolidation matters.
(b)
GE Capital cash, cash equivalents and restricted cash totaled $18.8 billion at December 31, 2019, including $0.9 billion which was subject to regulatory restrictions, primarily in insurance entities. Included in our credit facilities is an unused $20.0 billion back-up syndicated credit facility extended by 36 banks, expiring in 2021, and an unused $14.8 billion syndicated credit facility extended by six banks, expiring in 2020. The commitments under these syndicated credit facilities may be reduced by up to $6.7 billion due to offset provisions for any bank that holds a commitment to lend under both facilities. GE Capital has the right to compel GE to borrow under certain of these credit lines and transfer the proceeds as loans to GE Capital, which would be subject to the same terms and conditions as those between GE and the lending banks.
(c)
Balance included consolidated restricted cash of $0.6 billion and $0.4 billion at December, 2019 and December 31, 2018, respectively. GE restricted cash was $0.5 billion and $0.4 billion at December 31, 2019 and December 31, 2018, respectively, and GE Capital restricted cash was $0.1 billion and an insignificant amount at December 31, 2019 and December 31, 2018, respectively.
(d)
GE borrowings includes commercial paper of $3.0 billion at both December 31, 2019 and December 31, 2018. GE Capital borrowings includes commercial paper of zero and an insignificant amount at December 31, 2019 and December 31, 2018, respectively.
(e)
At December 31, 2019, the remaining GE Capital borrowings that had been assumed by GE as part of the GE Capital Exit Plan was $31.4 billion, for which GE has an offsetting receivable from GE Capital of $19.1 billion. The difference of $12.2 billion represents the amount of borrowings GE Capital has funded with available cash to GE via an intercompany loan in lieu of issuing borrowings externally.
(f)
At December 31, 2019, total GE borrowings is comprised of GE-issued borrowings of $20.7 billion and the $12.2 billion of borrowings from GE Capital as described in note (e) above for a total of $32.9 billion.

Amounts may not add due to rounding



8



GENERAL ELECTRIC COMPANY
Financial Measures That Supplement GAAP

We believe that presenting non-GAAP financial measures provides management and investors useful measures to evaluate performance and trends of the total company and its businesses. This includes adjustments in recent periods to GAAP financial measures to increase period-to-period comparability following actions to strengthen our overall financial position and how we manage our business.

In addition, management recognizes that certain non-GAAP terms may be interpreted differently by other companies under different circumstances. In various sections of this report we have made reference to the following non-GAAP financial measures in describing our (1) revenues, specifically GE Industrial segment organic revenues; Gas Power organic revenues; Power Portfolio organic revenues and GE Industrial organic revenues (2) profit, specifically GE Industrial segment organic profit; Adjusted GE Industrial profit and profit margin; Adjusted GE Industrial organic profit and profit margin; Adjusted earnings (loss); Adjusted earnings (loss) per share (EPS) and GE Industrial leverage EBITDA, (3) cash flows, specifically GE Industrial free cash flow (FCF) and BioPharma free cash flow, (4) debt balances, specifically, GE Industrial net debt and GE Industrial net debt/EBITDA ratio and (5) outlook, specifically 2020 Adjusted EPS; and 2020 GE Industrial free cash flows.

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

9



GE INDUSTRIAL ORGANIC REVENUES, PROFIT (LOSS) AND PROFIT MARGIN BY SEGMENT (NON-GAAP)
 
 
Revenues
 
Segment profit (loss)
 
Profit margin
Three months ended December 31 (In millions)
 
2019

 
2018

 
V%

 
2019

 
2018

 
V%

 
2019

 
2018

V pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Power (GAAP)
 
$
5,401

 
$
5,381

 
%
 
$
302

 
$
(786
)
 
F

 
5.6
 %
 
(14.6
)%
20.2pts
Less: acquisitions
 
3

 

 
 
 
1

 

 
 
 
 
 
 
 
Less: business dispositions
 

 
184

 
 
 

 
11

 
 
 
 
 
 
 
Less: foreign currency effect
 
(65
)
 

 
 
 
10

 

 
 
 
 
 
 
 
Power organic (Non-GAAP)
 
$
5,462

 
$
5,198

 
5
%
 
$
290

 
$
(797
)
 
F

 
5.3
 %
 
(15.3
)%
20.6pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewable Energy (GAAP)
 
$
4,747

 
$
4,646

 
2
%
 
$
(197
)
 
$
(21
)
 
U

 
(4.1
)%
 
(0.5
)%
(3.6)pts
Less: acquisitions
 

 

 
 
 

 

 
 
 
 
 
 
 
Less: business dispositions
 

 

 
 
 

 

 
 
 
 
 
 
 
Less: foreign currency effect
 
(95
)
 

 
 
 
6

 

 
 
 
 
 
 
 
Renewable Energy organic (Non-GAAP)
 
$
4,842

 
$
4,646

 
4
%
 
$
(203
)
 
$
(21
)
 
U

 
(4.2
)%
 
(0.5
)%
(3.7)pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aviation (GAAP)
 
$
8,936

 
$
8,456

 
6
%
 
$
2,056

 
$
1,723

 
19
 %
 
23.0
 %
 
20.4
 %
2.6pts
Less: acquisitions
 

 

 
 
 

 

 
 
 
 
 
 
 
Less: business dispositions
 

 
95

 
 
 

 
7

 
 
 
 
 
 
 
Less: foreign currency effect
 
(5
)
 

 
 
 
6

 

 
 
 
 
 
 
 
Aviation organic (Non-GAAP)
 
$
8,941

 
$
8,361

 
7
%
 
$
2,050

 
$
1,716

 
19
 %
 
22.9
 %
 
20.5
 %
2.4pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare (GAAP)
 
$
5,402

 
$
5,398

 
%
 
$
1,183

 
$
1,176

 
1
 %
 
21.9
 %
 
21.8
 %
0.1pts
Less: acquisitions
 
21

 

 
 
 
(1
)
 

 
 
 
 
 
 
 
Less: business dispositions
 

 
4

 
 
 

 
(20
)
 
 
 
 
 
 
 
Less: foreign currency effect
 
(46
)
 

 
 
 
(10
)
 

 
 
 
 
 
 
 
Healthcare organic (Non-GAAP)
 
$
5,427

 
$
5,393

 
1
%
 
$
1,194

 
$
1,196

 
 %
 
22.0
 %
 
22.2
 %
(0.2)pts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GE Industrial segment (GAAP)
 
$
24,486

 
$
23,881

 
3
%
 
$
3,344

 
$
2,092

 
60
 %
 
13.7
 %
 
8.8
 %
4.9pts
Less: acquisitions
 
24

 

 
 
 

 

 
 
 
 
 
 
 
Less: business dispositions
 

 
283

 
 
 

 
(2
)
 
 
 
 
 
 
 
Less: foreign currency effect
 
(211
)
 

 
 
 
13

 

 
 
 
 
 
 
 
GE Industrial segment organic (Non-GAAP)
 
$
24,672

 
$
23,598

 
4.6
%
 
$
3,331

 
$
2,094

 
59
 %
 
13.5
 %
 
8.9
 %
4.6pts