---

---

•	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,

•	many of our products are subject to a number of regulatory standards and

•	changing end markets, including shifts in energy sources and demand and the impact of technology changes.

---

•	Consolidated – the adding together of GE and GE Capital, giving effect to the elimination of transactions between the two. We present consolidated results 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.

•	GE Capital – 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.

•	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.

---

---

---

•	Decreased revenues by $1.4 billion in 2019, primarily driven by the euro ($0.7 billion), the Chinese renminbi ($0.2 billion), the Brazilian real ($0.1 billion), the pound sterling ($0.1 billion), and the Australian dollar ($0.1 billion).

•	Increased revenues by $0.5 billion in 2018, primarily driven by the euro ($0.3 billion).

---

---

---

---

---

---

(a)	Renewable Energy segment revenues represent 18% and 16% of total industrial segment revenues and total segment revenues, respectively, for the year ended December 31, 2019.

(b)	Renewable Energy segment profit represents (6)% of total industrial segment profit for the year ended December 31, 2019.

---

---

(a)	Aviation segment revenues represent 38% and 34% of total industrial segment revenues and total segment revenues, respectively, for the year ended December 31, 2019.

(b)	Aviation segment profit represents 65% of total industrial segment profit for the year ended December 31, 2019.

---

---

(a)	Healthcare segment revenues represent 23% and 21% of total industrial segment revenues and total segment revenues, respectively, for the year ended December 31, 2019.

(b)	Healthcare segment profit represents 37% of total industrial segment profit for the year ended December 31, 2019.

---

---

(a)	Capital segment revenues represent 9% of total segment revenues for the year ended December 31, 2019.

(b)

Other continuing operations primarily comprised excess interest costs from debt previously allocated to assets that have been sold as part of the GE Capital Exit Plan, preferred stock dividend costs and interest costs not allocated to GE Capital segments, which are driven by GE Capital’s interest allocation process. Interest costs are allocated to GE Capital segments based on the tenor of their assets using the market rate at the time of origination, which differs from the asset profile when the debt was originated. As a result, actual interest expense is higher than interest expense allocated to the remaining GE Capital segments. Substantially all preferred stock dividend costs will become a GE obligation in January 2021. See Note 16 to the consolidated financial statements for further information. The excess interest costs from debt previously allocated to assets that have been sold are expected to run off by 2020. In addition, we anticipate unallocated interest costs to gradually decline as debt matures and/or is refinanced.

---

---

---

---

---

---

---

---

(a)	Included elimination of other GE borrowings from GE Capital, primarily related to timing of cash settlements associated with GE receivables monetization programs.

---

---

---

•

It is our policy to minimize exposure to interest rate changes and their impact to interest and other financial charges. We fund our financial investments using a combination of debt and hedging instruments so that the interest rates of our borrowings match the expected interest rate profile on our assets. It is our policy to minimize currency exposures and to conduct operations either within functional currencies or using the protection of hedge strategies. To test the effectiveness of our hedging actions, for interest rate risk we assumed that, on January 1, 2020, interest rates decreased by 100 basis points and the decrease remained in place for the next 12 months and for currency risk of assets and liabilities denominated in other than their functional currencies, we evaluated the effect of a 10% shift in exchange rates against the U.S. dollar. The analyses indicated that our 2019 consolidated net earnings would decline by less than $0.1 billion for interest rate risk and approximately $0.1 billion for foreign exchange risk.

---

---

---

---

(a)	Included all take-or-pay arrangements, capital expenditures, contractual commitments to purchase equipment that will be leased to others, software acquisition/license commitments, and other purchase commitments.

(b)	Excluded funding commitments entered into in the ordinary course of business. See Notes 23 to the consolidated financial statements for further information on these commitments and other guarantees.

(c)

Included an estimate of future expected funding requirements related to our postretirement benefit plans and included liabilities for unrecognized tax benefits. Because their future cash outflows are uncertain, the following non-current liabilities are excluded from the table above: derivatives, deferred income and other sundry items. See Notes 13, 15 and 21 to the consolidated financial statements for further information on certain of these items.

(d)	Included payments for other liabilities.

---

---

•	Discount rate – A 25 basis point decrease in discount rate would increase pension cost in the following year by about $0.2 billion and would increase the pension benefit obligation at year-end by about $2.3 billion.

•	Expected return on assets – A 50 basis point decrease in the expected return on assets would increase pension cost in the following year by about $0.3 billion.

---

---

(a)	Statutory balances reflect recognition of the estimated remaining statutory increase in reserves of approximately $7 billion through 2023 under the permitted accounting practice discussed further below and in Note 12 to our consolidated financial statements.

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

•	comparing estimated labor and part costs to historical labor and parts costs,

•	comparing the estimated useful life, which is referred to as part life, of certain component parts to historical data and regulatory limits on part life, where applicable,

•	inspecting evidence underlying the inclusion of cost improvements in estimated costs, including regulatory and engineering approvals and actual reductions in production costs to date, and

•	ascertaining if major overhauls of covered assets are included in the cost estimates on a basis consistent with the estimated customer utilization of the assets that is used in estimating customer payments.

•	challenging the Company’s key assumptions and results by evaluating the relevance, reliability, and consistency of the assumptions with each other, the underlying data, relevant historical data, and industry data,

•	assessing the summary experience data and the corresponding actuarial assumptions for conformity with generally accepted actuarial principles,

•	performing recalculations to assess that the key assumptions were reflected in the cash flow projections, and

•	comparing the current year and prior year cash flow projections to analyze the impact of the updated key assumptions to the cash flows.

---

•	comparing the projected amounts to industry benchmark data, and

•	evaluating sensitivity analyses related to key inputs, including long-term revenue growth rates and projected operating profit.

•	evaluating the Company’s interpretation and application of relevant tax laws and regulations related to the tax positions, including income tax uncertainties, and

•	assessing the Company’s computation of the effects of the tax positions.

---

---

---

---

---

---

---

(a)

Total equity balance decreased by $(43,638) million from December 31, 2017, primarily due to non-cash after-tax goodwill impairment charge of $(22,371) million in 2018, reduction of noncontrolling interest balance of $(15,836) million attributable to Baker Hughes Class A shareholders at December 31, 2017 and after-tax loss of $(8,238) million in discontinued operations due to deconsolidation of Baker Hughes in 2019, partially offset by after-tax gain of $2,508 million in discontinued operations due to spin-off and subsequent merger of our Transportation business with Wabtec in 2019.

---

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FINANCIAL STATEMENT PRESENTATION. 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 supplemental information to our consolidated financial statements. To the extent that we have transactions between GE and GE Capital, these transactions are made on arm's length terms, are reported in the respective columns of our financial statements and are eliminated in consolidation. See Note 25 for further information.

Our financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP), which requires us to make estimates based on assumptions about current, and for some estimates, future, economic and market conditions which affect reported amounts and related disclosures in our financial statements. Although our current estimates contemplate current and expected future conditions, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position.

We have reclassified certain prior-year amounts to conform to the current-year’s presentation. Certain columns and rows may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in millions. Unless otherwise indicated, information in these notes to consolidated financial statements relates to continuing operations. Certain of our operations have been presented as discontinued. We present businesses whose disposal represents a strategic shift that has, or will have, a major effect on our operations and financial results as discontinued operations when the components meet the criteria for held for sale, are sold, or spun-off. See Note 2 for further information.

CONSOLIDATION. Our financial statements consolidate all of our affiliates, entities where we have a controlling financial interest, most often because we hold a majority voting interest, or where we are required to apply the variable interest entity (VIE) model

because we have the power to direct the most economically significant activities of entities. We reevaluate whether we have a controlling financial interest in all entities when our rights and interests change.

REVENUES FROM THE SALE OF EQUIPMENT

Performance Obligations Satisfied Over Time. We recognize revenue on agreements for the sale of customized goods including power generation equipment, long-term construction projects and military development contracts on an over-time basis as we customize the customer's equipment during the manufacturing or integration process and obtain right to payment for work performed.

We recognize revenue as we perform under the arrangements using the percentage of completion method which is based on our costs incurred to date relative to our estimate of total expected costs. Our estimate of costs to be incurred to fulfill our promise to a customer is based on our history of manufacturing or constructing similar assets for customers and is updated routinely to reflect changes in quantity or pricing of the inputs. We provide for potential losses on these agreements when it is probable that we will incur the loss.

Our billing terms for these over-time contracts are generally based on achieving specified milestones. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. See Note 9 for further information.

Performance Obligations Satisfied at a Point in Time. We recognize revenue on agreements for non-customized equipment including commercial aircraft engines, healthcare equipment and other goods we manufacture on a standardized basis for sale to the market at the point in time that the customer obtains control of the good, which is generally no earlier than when the customer has physical possession of the product. We use proof of delivery for certain large equipment with more complex logistics, whereas the delivery of other equipment is estimated based on historical averages of in-transit periods (i.e., time between shipment and delivery).

Where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have concluded that the customer has control of the goods and that acceptance is likely to occur. We do not provide for anticipated losses on point-in-time transactions prior to transferring control of the equipment to the customer.

Our billing terms for these point-in-time equipment contracts generally coincide with delivery to the customer; however, within certain businesses, we receive progress collections from customers for large equipment purchases, to generally reserve production slots.

REVENUES FROM THE SALE OF SERVICES. Consistent with our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) discussion and the way we manage our businesses, we refer to sales under service agreements, which includes both goods (such as spare parts and equipment upgrades) and related services (such as monitoring, maintenance and repairs) as sales of “services,” which is an important part of our operations. We sometimes offer our customers financing discounts for the purchase of certain GE products when sold in contemplation of long-term service agreements. These sales are accounted for as financing arrangements when payments for the products are collected through higher usage-based fees from servicing the equipment. See Note 9 for further information.

Performance Obligations Satisfied Over Time. We enter into long-term service agreements with our customers primarily within our Aviation and Power segments. These agreements require us to provide preventative maintenance, overhauls, and standby "warranty-type" services that include certain levels of assurance regarding asset performance and uptime throughout the contract periods, which generally range from 5 to 25 years. We account for items that are integral to the maintenance of the equipment as part of our performance obligation, unless the customer has a substantive right to make a separate purchasing decision (e.g., equipment upgrade).

---

We recognize revenue as we perform under the arrangements using the percentage of completion method which is based on our costs incurred to date relative to our estimate of total expected costs. Throughout the life of a contract, this measure of progress captures the nature, timing and extent of our underlying performance activities as our stand-ready services often fluctuate between routine inspections and maintenance, unscheduled service events and major overhauls at pre-determined usage intervals. We provide for potential losses on these agreements when it is probable that we will incur the loss. Contract modifications that extend or revise contract terms are not uncommon and generally result in our recognizing the impact of the revised terms prospectively over the remaining life of the modified contract (i.e., effectively like a new contract).

Our billing terms for these arrangements are generally based on the utilization of the asset (e.g., per hour of usage) or upon the occurrence of a major maintenance event within the contract, such as an overhaul. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. See Note 9 for further information.

We also enter into long-term services agreements in our Healthcare and Renewable Energy segments. Revenues are recognized for these arrangements on a straight-line basis consistent with the nature, timing and extent of our services, which primarily relate to routine maintenance and as needed product repairs. We generally invoice periodically as services are provided.

Performance Obligations Satisfied at a Point in Time. We sell certain tangible products, largely spare parts, through our services businesses. We recognize revenues and bill our customers at the point in time that the customer obtains control of the good, which is at the point in time we deliver the spare part to the customer.

COLLABORATIVE ARRANGEMENTS. Our Aviation business enters into collaborative arrangements and joint ventures with manufacturers and suppliers of components used to build and maintain certain engines. Under these arrangements, GE and its collaborative partners share in the risks and rewards of these programs through various revenue, cost and profit sharing payment structures. GE recognizes revenue and costs for these arrangements based on the scope of work GE is responsible for transferring to its customers. GE’s payments to participants are primarily recorded as either cost of services sold ($1,939 million, $1,809 million and $1,884 million for the years ended December 31, 2019, 2018 and 2017, respectively) or as cost of goods sold ($2,974 million, $3,097 million and $2,806 million for the years ended December 31, 2019, 2018 and 2017, respectively). Our most significant collaborative arrangement is with Safran Aircraft engines, a subsidiary of Safran Group of France, which sells LEAP and CFM56 engines through CFM International, a jointly owned company. GE makes substantial sales of parts and services to CFM International based on arm's length terms.

GE CAPITAL REVENUES FROM SERVICES. We use the interest method to recognize income on loans. Interest on loans includes origination, commitment and other non-refundable fees related to funding (recorded in earned income on the interest method). We stop accruing interest at the earlier of the time at which collection of an account becomes doubtful or the account becomes 90 days past due. Previously recognized interest income that was accrued but not collected from the borrower is reversed, unless the terms of the loan agreement permit capitalization of accrued interest to the principal balance. Payments received on nonaccrual loans are applied to reduce the principal balance of the loan. We resume accruing interest on nonaccrual loans only when payments are brought current according to the loan’s original terms and future payments are reasonably assured.

We recognize financing lease income on the interest method to produce a level yield on funds not yet recovered. Estimated unguaranteed residual values are based upon management's best estimates of the value of the leased asset at the end of the lease term. We use various sources of data in determining these estimates, including information obtained from third parties, which is adjusted for the attributes of the specific asset under lease. Guarantees of residual values by unrelated third parties are included within minimum lease payments. Significant assumptions we use in estimating residual values include estimated net cash flows over the remaining lease term, anticipated results of future remarketing, and estimated future component part and scrap metal prices, discounted at an appropriate rate.

We recognize operating lease income on a straight-line basis over the terms of underlying leases.

SALES OF BUSINESS INTERESTS IN WHICH WE LOSE CONTROL. Gains or losses on sales of affiliate shares that result in our loss of a controlling financial interest are recorded in earnings. If we retain a noncontrolling interest in our former affiliate, we initially record our investment at fair value, and any subsequent adjustments to the carrying value of the investment are recorded in earnings.

SALES OF BUSINESS INTERESTS IN WHICH WE RETAIN CONTROL. Gains or losses on sales of affiliate shares where we retain a controlling financial interest are recorded in equity.

CASH, CASH EQUIVALENTS AND RESTRICTED CASH. Debt securities and money market instruments with original maturities of three months or less are included in cash, cash equivalents and restricted cash unless classified as available-for-sale investment securities. Restricted cash primarily comprised collateral for receivables sold and funds restricted in connection with certain ongoing litigation matters and amounted to $589 million and $388 million at December 31, 2019 and December 31, 2018, respectively.

INVESTMENT SECURITIES. We report investments in available-for-sale debt securities and certain equity securities at fair value. Unrealized gains and losses on available-for-sale debt securities are recorded to other comprehensive income, net of applicable taxes and adjustments related to our insurance liabilities. Unrealized gains and losses on equity securities with readily determinable fair values are recorded to earnings.

---

Although we generally do not have the intent to sell any specific debt securities in the ordinary course of managing our portfolio, we may sell debt securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield and liquidity requirements and the funding of claims and obligations to policyholders.

We regularly review investment securities for impairment. For debt securities, if we do not intend to sell the security or it is not more likely than not that we will be required to sell the security before recovery of our amortized cost, we evaluate qualitative criteria, such as the financial health of and specific prospects for the issuer, to determine whether we do not expect to recover the amortized cost basis of the security. We also evaluate quantitative criteria including determining whether there has been an adverse change in expected future cash flows. If we do not expect to recover the entire amortized cost basis of the security, we consider the security to be other-than-temporarily impaired (OTTI), and we record the difference between the security’s amortized cost basis and its recoverable amount in earnings and the difference between the security’s recoverable amount and fair value in other comprehensive income. If we intend to sell the security or it is more likely than not we will be required to sell the security before recovery of its amortized cost basis, the security is also considered OTTI, and we recognize the entire difference between the security’s amortized cost basis and its fair value in earnings. See Note 3 for further information.

CURRENT RECEIVABLES. Amounts due from customers arising from the sales of products and services are recorded at the outstanding amount, less allowance for losses. We regularly monitor the recoverability of our receivables. See Note 4 for further information.

FINANCING RECEIVABLES. Our financing receivables portfolio consists of a variety of loans and leases, including both larger-balance, non-homogeneous loans and leases and smaller-balance homogeneous loans and leases. We routinely evaluate our entire portfolio for potential specific credit or collection issues that might indicate an impairment. Losses on financing receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. See Note 5 for further information.

INVENTORIES. All inventories are stated at lower of cost or realizable values. Cost of inventories is primarily determined on a first-in, first-out (FIFO) basis. See Note 6 for further information.

PROPERTY, PLANT AND EQUIPMENT. The cost of GE property, plant and equipment is generally depreciated on a straight-line basis over its estimated economic life. The cost of GE Capital equipment leased to others on operating leases is depreciated on a straight-line basis to estimated residual value over the lease term or over the estimated economic life of the equipment. See Note 7 for further information.

LEASE ACCOUNTING. We determine if an arrangement is a lease or a service contract at inception. Where an arrangement is a lease we determine if it is an operating lease or a finance lease. Subsequently, if the arrangement is modified we reevaluate our classification.

Lessee. At lease commencement, we record a lease liability and corresponding right-of-use (ROU) asset. Lease liabilities represent the present value of our future lease payments over the expected lease term which includes options to extend or terminate the lease when it is reasonably certain those options will be exercised. We have elected to include lease and non-lease components in determining our lease liability for all leased assets except our vehicle leases. Non-lease components are generally services that the lessor performs for the Company associated with the leased asset. For those leases with payments based on an index, the lease liability is determined using the index at lease commencement. Lease payments based on increases in the index subsequent to lease commencement are recognized as variable lease expense as they occur. The present value of our lease liability is determined using our incremental collateralized borrowing rate at lease inception. ROU assets represent our right to control the use of the leased asset during the lease and are recognized in an amount equal to the lease liability. Over the lease term we use the effective interest rate method to account for the lease liability as lease payments are made and the ROU asset is amortized to earnings in a manner that results in a straight-line expense recognition in the Statement of Earnings. A ROU asset and lease liability is not recognized for leases with an initial term of 12 months or less and we recognize lease expense for these leases on a straight-line basis over the lease term. We test ROU assets at least annually for impairment or whenever events or changes in circumstance indicate that the asset may be impaired.

Lessor. Equipment leased to others under operating leases are included in Property, plant and equipment and leases classified as finance leases are included in Financing receivables on our Statement of Financial Position. Finance lease receivables are tested for impairment as described in the Financing Receivables section above. See Notes 5 and 7 for further information.

GOODWILL AND OTHER INTANGIBLE ASSETS. We test goodwill at least annually for impairment at the reporting unit level. A reporting unit is the operating segment, or one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. However, components are aggregated as a single reporting unit if they have similar economic characteristics. We recognize an impairment charge if the carrying amount of a reporting unit exceeds its fair value and the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill. When a portion of a reporting unit is disposed, goodwill is allocated to the gain or loss on disposition based on the relative fair values of the business or businesses disposed and the portion of the reporting unit that will be retained.

---

For other intangible assets that are not deemed indefinite-lived, cost is generally amortized on a straight-line basis over the asset’s estimated economic life, except for individually significant customer-related intangible assets that are amortized in relation to total related sales. Amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. In these circumstances, they are tested for impairment based on undiscounted cash flows and, if impaired, written down to estimated fair value based on either discounted cash flows or appraised values. See Note 8 for further information.

ASSOCIATED COMPANIES. For unconsolidated entities over which we have significant influence and have not elected the fair value option, we account for our interest as equity method investments, and our investments in, and advances to, associated companies are presented on a one-line basis in All other assets in our consolidated Statement of Financial Position, net of any impairment. We evaluate our equity method investments for impairment whenever events or changes in circumstance indicate that the carrying amounts of such investments may not be recoverable. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. Our share of the results of associated companies are presented on a one-line basis in Other income within continuing operations in our consolidated Statement of Earnings (Loss). See Note 10 for further information.

Where we adopt the fair value option for our investment in an associated company, our investment in and any advances to are recorded in Investment securities in our consolidated Statement of Financial Position and any subsequent changes in fair value are recognized in Other income within continuing operations in our consolidated Statement of Earnings (Loss). See Note 3 for further information.

DERIVATIVES AND HEDGING. We use derivatives to manage a variety of risks, including risks related to interest rates, foreign exchange and commodity prices. Accounting for derivatives as hedges requires that, at inception and over the term of the arrangement, the hedged item and related derivative meet the requirements for hedge accounting. In evaluating whether a particular relationship qualifies for hedge accounting, we test effectiveness at inception and each reporting period thereafter by determining whether changes in the fair value of the derivative offset, within a specified range, changes in the fair value of the hedged item. If fair value changes fail this test, we discontinue applying hedge accounting to that relationship prospectively. Fair values of both the derivative instrument and the hedged item are calculated using internal valuation models incorporating market-based assumptions, subject to third-party confirmation, as applicable. See Note 21 for further information.

DEFERRED INCOME TAXES. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating loss and tax credit carryforwards, and are stated at enacted tax rates expected to be in effect when those taxes are paid or recovered. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. We evaluate the recoverability of these future tax deductions and credits by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. To the extent we consider it more likely than not that a deferred tax asset will not be recovered, a valuation allowance is established. Deferred taxes, as needed, are provided for our investment in affiliates and associated companies when we plan to remit those earnings. See Note 15 for further information.

BUSINESSES AND ASSETS HELD FOR SALE. Businesses and assets held for sale represent components that meet accounting requirements to be classified as held for sale and are presented as single asset and liability amounts in our financial statements with a valuation allowance, if necessary, to recognize the net carrying amount at the lower of cost or fair value, less cost to sell. Financing receivables that no longer qualify to be presented as held for investment are classified as assets held for sale and recognized in our financial statements at the lower of cost or fair value, less cost to sell, with that amount representing a new cost basis at the date of transfer.

The determination of fair value for businesses and assets held for sale involves significant judgments and assumptions. Development of estimates of fair values in this circumstance is complex and is dependent upon, among other factors, the nature of the potential sales transaction (for example, asset sale versus sale of legal entity), composition of assets and/or businesses in the disposal group, the comparability of the disposal group to market transactions and negotiations with third-party purchasers. Such factors bear directly on the range of potential fair values and the selection of the best estimates. Key assumptions were developed based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction. We review all businesses and assets held for sale each reporting period to determine whether the existing carrying amounts are fully recoverable in comparison to estimated fair values, less cost to sell. See Note 2 for further information.

INVESTMENT CONTRACTS, INSURANCE LIABILITIES AND INSURANCE ANNUITY BENEFITS. Our run-off insurance operations include providing insurance and reinsurance for life and health risks and providing certain annuity products. Primary product types include long-term care, structured settlement annuities, life and disability insurance contracts and investment contracts. Insurance contracts are contracts with significant mortality and/or morbidity risks, while investment contracts are contracts without such risks.

For traditional long-duration insurance contracts, we report premiums as revenue when due. Premiums received on non-traditional long-duration insurance contracts and investment contracts, including annuities without significant mortality risk, are not reported as revenues but rather as deposit liabilities. We recognize revenues for charges and assessments on these contracts, mostly for mortality, contract initiation, administration and surrender. Amounts credited to policyholder accounts are charged to expense.

---

Liabilities for traditional long-duration insurance contracts includes both future policy benefit reserves and claims reserves. Future policy benefit reserves represent the present value of future policy benefits less the present value of future gross premiums based on actuarial assumptions. Liabilities for investment contracts equal the account value, that is, the amount that accrues to the benefit of the contract or policyholder including credited interest and assessments through the financial statement date.

Claim reserves are established when a claim is incurred or is estimated to have been incurred and represents our best estimate of the present value of the ultimate obligations for future claim payments and claim adjustments expenses.

To the extent that unrealized gains on specific investment securities supporting our insurance contracts would result in a premium deficiency, should those gains be realized, an increase in future policy benefit reserves is recorded, with an offsetting after-tax reduction to net unrealized gains recorded in other comprehensive income. See Note 12 for further information.

POSTRETIREMENT BENEFIT PLANS. We sponsor a number of pension and retiree health and life insurance benefit plans that we present in three categories, principal pension plans, other pension plans and principal retiree benefit plans. We use a December 31 measurement date for these plans. On our consolidated Statement of Financial Position, we measure our plan assets at fair value and the obligations at the present value of the estimated payments to plan participants. Participants earn benefits based on their service and pay. Those estimated future payment amounts are determined based on assumptions. Differences between our actual results and what we assumed are recorded in a separate component of equity each period. These differences are amortized into earnings over the remaining average future service of active employees or the expected life of inactive participants, as applicable, who participate in the plan. See Note 13 for further information.

LOSS CONTINGENCIES. Loss contingencies are uncertain and unresolved matters that arise in the ordinary course of business and result from events or actions by others that have the potential to result in a future loss. Such contingencies include, but are not limited to environmental obligations, litigation, regulatory investigations and proceedings, product quality and losses resulting from other events and developments. When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss. When there appears to be a range of possible costs with equal likelihood, liabilities are based on the low-end of such range. Disclosure is provided for material loss contingencies when a loss is probable but a reasonable estimate cannot be made, and when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. We regularly review contingencies to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made. See Note 23 for further information.

SUPPLY CHAIN FINANCE PROGRAMS. We evaluate supply chain finance programs to ensure where we use a third-party intermediary to settle our trade payables, their involvement does not change the nature, existence, amount, or timing of our trade payables and does not provide the Company with any direct economic benefit. If any characteristics of the trade payables change or we receive a direct economic benefit, we reclassify the trade payables as borrowings.

FAIR VALUE MEASUREMENTS. The following sections describe the valuation methodologies we use to measure financial and non-financial instruments accounted for at fair value including certain assets within our pension plans and retiree benefit plans. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These inputs establish a fair value hierarchy:

Level 1 –    Quoted prices for identical instruments in active markets.

Level 2 –    Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 –    Significant inputs to the valuation model are unobservable.

RECURRING FAIR VALUE MEASUREMENTS. For financial assets and liabilities measured at fair value on a recurring basis, primarily investment securities and derivatives, fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. See Note 20 for further information.

Debt Securities. When available, we use quoted market prices to determine the fair value of debt securities which are included in Level 1. For our remaining debt securities, we obtain pricing information from an independent pricing vendor. The inputs and assumptions to the pricing vendor’s models are derived from market observable sources including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and other market-related data. These investments are included in Level 2. Our pricing vendors may also provide us with valuations that are based on significant unobservable inputs, and in those circumstances, we classify the investment securities in Level 3.

Annually, we conduct reviews of our primary pricing vendor to validate that the inputs used in that vendor’s pricing process are deemed to be market observable as defined in the standard. We believe that the prices received from our pricing vendor are representative of prices that would be received to sell the assets at the measurement date (exit prices) and are classified appropriately in the hierarchy.

---

We use non-binding broker quotes and other third-party pricing services as our primary basis for valuation when there is limited, or no, relevant market activity for a specific instrument or for other instruments that share similar characteristics. Debt securities priced in this manner are included in Level 3.

Equity securities with readily determinable fair values. These publicly traded equity securities are valued using quoted prices and are included in Level 1.

Derivatives. The majority of our derivatives are valued using internal models. The models maximize the use of market observable inputs including interest rate curves and both forward and spot prices for currencies and commodities. Derivative assets and liabilities included in Level 2 primarily represent interest rate swaps, cross-currency swaps and foreign currency and commodity forward and option contracts. Derivative assets and liabilities included in Level 3 primarily represent equity derivatives and interest rate products that contain embedded optionality or prepayment features.

Investments in private equity, real estate and collective funds held within our pension plans. These investments are generally valued using the net asset value (NAV) per share as a practical expedient for fair value provided certain criteria are met. The NAVs are determined based on the fair values of the underlying investments in the funds. Investments that are measured at fair value using the NAV practical expedient are not required to be classified in the fair value hierarchy.

NONRECURRING FAIR VALUE MEASUREMENTS. Certain assets are measured at fair value on a nonrecurring basis. These assets may include loans and long-lived assets reduced to fair value upon classification as held for sale, impaired loans based on the fair value of the underlying collateral, impaired equity securities without readily determinable fair value, equity method investments and long-lived assets, and remeasured retained investments in formerly consolidated subsidiaries upon a change in control that results in the deconsolidation of that subsidiary and retention of a noncontrolling stake in the entity. Assets written down to fair value when impaired and retained investments are not subsequently adjusted to fair value unless further impairment occurs. See Note 20 for further information.

Equity investments without readily determinable fair value and Associated companies. Equity investments without readily determinable fair value and associated companies are valued using market observable data such as transaction prices when available. When market observable data is unavailable, investments are valued using either a discounted cash flow model, comparative market multiples, third-party pricing sources or a combination of these approaches as appropriate. These investments are generally included in Level 3.

Long-lived Assets. Fair values of long-lived assets, including aircraft, are primarily derived internally and are based on observed sales transactions for similar assets. In other instances for which we do not have comparable observed sales transaction data, collateral values are developed internally and corroborated by external appraisal information. Adjustments to third-party valuations may be performed in circumstances where market comparables are not specific to the attributes of the specific collateral or appraisal information may not be reflective of current market conditions due to the passage of time and the occurrence of market events since receipt of the information.

ACCOUNTING CHANGES. On January 1, 2019, we adopted ASU No. 2016-02 and related amendments, Leases (Topic 842). Upon adoption, we recorded a $315 million increase to retained earnings, primarily attributable to the release of deferred gains on sale-lease back transactions. Our ROU assets and lease liabilities for operating leases at adoption were $3,272 million and $3,459 million, respectively, excluding discontinued operations and businesses held for sale. After the adoption date, principal collections on financing leases are classified as Cash from operating activities in our consolidated Statement of Cash Flows. Previously, such flows were classified as Cash from investing activities.    

On January 1, 2019, we adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The ASU requires certain changes to the presentation of hedge accounting in the financial statements and some new or modified disclosures. The ASU also simplifies the application of hedge accounting and expands the strategies that qualify for hedge accounting. The adoption had an immaterial effect on our financial statements.

NOTE 2. BUSINESSES HELD FOR SALE AND DISCONTINUED OPERATIONS  

ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE. In August 2019, we announced an agreement to sell PK AirFinance, an aviation lending business within our Capital segment, to Apollo Global Management, LLC and Athene Holding Ltd. The sale of a substantial portion of the assets and liabilities was completed in the fourth quarter for proceeds of $3,575 million, and we recognized a pre-tax gain of $50 million. As of December 31, 2019, we had remaining assets of $241 million (including Cash, cash equivalents and restricted cash of $45 million) and liabilities of $52 million for this business classified as held for sale. We expect to complete the sale of these remaining assets in the first half of 2020.

In February 2019, we announced an agreement to sell our BioPharma business within our Healthcare segment to Danaher Corporation for total consideration of approximately $21,400 million, subject to certain adjustments. As of December 31, 2019, we had assets of $8,742 million (including goodwill of $5,549 million) and liabilities of $1,372 million for this business classified as held for sale. We expect to complete the sale, subject to regulatory approval, in the first quarter of 2020.

In 2018, we signed an agreement to sell Energy Financial Services' (EFS) debt origination business within our Capital segment, to Starwood Property Trust, Inc. The sale was completed for proceeds of $2,011 million and we recognized a pre-tax gain of $288 million.

---

In November 2017, the Company announced its intention to exit approximately $20 billion of industrial assets. Since this announcement, we have classified various businesses across our Power, Aviation, and Healthcare segments, and Corporate as held for sale. In 2019, we closed certain of these transactions within Corporate and our Power and Aviation segments for total net proceeds of $1,070 million, recognized a pre-tax gain of $214 million in Other income in our consolidated Statement of Earnings (Loss) and liquidated $548 million of our previously recorded valuation allowance. These transactions are subject to customary working capital and other post-close adjustments. In addition, we recorded an additional valuation allowance of $254 million for the remaining businesses in held for sale. As of December 31, 2019, we have closed the sale of substantially all of these assets in accordance with the plan.

FINANCIAL INFORMATION FOR ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE December 31 (In millions)	2019			2018
Current receivables	$	499		$	184
Inventories	712			529
Financing receivables held for sale	197			—
Property, plant, and equipment – net and Operating leases	958			423
Goodwill and Other intangible assets - net	6,286			884
Valuation allowance	(719		)	(1,013		)
Deferred income taxes	815			—
All other assets	400			622
Assets of businesses held for sale	$	9,149		$	1,629
Accounts payable & Progress collections and deferred income	$	843		$	428
Non-current compensation and benefits	466			152
All other liabilities	349			128
Liabilities of businesses held for sale	$	1,658		$	708

DISCONTINUED OPERATIONS. Discontinued operations include our Baker Hughes and Transportation segments and certain assets and liabilities from legacy financial services businesses. Results of operations, financial position and cash flows for these businesses are reported as discontinued operations for all periods presented.

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 $3,037 million in cash (net of certain deal related costs), which reduced our ownership interest in Baker Hughes from 50.2% to 36.8%. As a result, we have deconsolidated our Baker Hughes segment and reclassified its results to discontinued operations for all periods presented and recognized a loss of $8,715 million ($8,238 million after-tax). The loss represents the sum of the realized loss on sale of the 144.1 million shares as well as the loss upon deconsolidation, which represents the difference between the carrying value and fair value of our remaining interest as of the transaction date.

We elected to account for our remaining interest in Baker Hughes (comprising our 36.8% ownership interest and a promissory note receivable) at fair value. The initial fair value of this investment was $9,587 million based on the Baker Hughes opening share price of $23.53 as of the transaction date and the fair value of the promissory note receivable of $706 million. Our investment is recorded in Investment securities in our consolidated Statement of Financial Position and related earnings or loss from subsequent changes in fair value will be recognized in Other income in continuing operations in our consolidated Statement of Earnings (Loss). See Note 3 for further information.

We have continuing involvement with Baker Hughes primarily through our remaining interest, ongoing purchases and sales of products and services, as well as the transition services that we provide to Baker Hughes. They also participated in GE Capital's supply chain finance program up to the date of separation. In addition, in the fourth quarter of 2019, we formed an aeroderivative joint venture (JV) with Baker Hughes relating to their respective aeroderivative gas turbine products and services. The JV has total assets net of liabilities of $613 million and is currently consolidated by GE. Since the date of the transaction, we had sales and purchases of products and services with Baker Hughes and affiliates of $312 million and $105 million, respectively. We have collected net cash of $1,016 million from Baker Hughes related to these activities, including $494 million of repayments on the promissory note. In addition, in the fourth quarter of 2019 we received a dividend of $68 million from Baker Hughes.

In February 2019, we completed the spin-off and subsequent merger of our Transportation business with Wabtec, a U.S. rail equipment manufacturer. In the transaction, our shareholders received shares of Wabtec common stock representing an approximate 24.3% ownership interest in Wabtec common stock. We received $2,827 million in cash (net of certain deal related costs) as well as shares of Wabtec common stock and Wabtec non-voting convertible preferred stock that, together, represent approximately 24.9% ownership interest in Wabtec. In addition, we are entitled to additional cash consideration up to $470 million for tax benefits that Wabtec realizes from the transaction. We reclassified our Transportation segment to discontinued operations in the first quarter of 2019.

As part of the transaction, we recorded a gain of $3,471 million ($2,508 million after-tax) in discontinued operations and a net after-tax decrease of $852 million in additional paid in capital in connection with the spin-off of approximately 49.4% of Transportation to our shareholders. The decrease in additional paid in capital was net of $940 million of taxes, including $860 million of current taxes (of which $693 million was related to U.S. federal taxes). The fair value of our interest in Wabtec’s common and preferred shares was $3,513 million based on the opening share price of $73.45 at the date of the transaction and was recorded in Investment securities in our consolidated Statement of Financial Position.

---

Discontinued operations for our financial services businesses primarily relate to the GE Capital Exit Plan (our plan, announced on April 10, 2015, to reduce the size of our financial services businesses) and were previously reported in our Capital segment. These discontinued operations primarily comprise our mortgage portfolio in Poland, residual assets and liabilities related to our exited U.S. mortgage business (WMC), and trailing liabilities associated with the sale of our GE Capital businesses.

In January 2019, we announced an agreement in principle with the United States to settle the investigation by the U.S. Department of Justice (DOJ) regarding potential violations of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) by WMC and GE Capital, and in April 2019, the parties entered into a definitive settlement agreement. Under the agreement, which concludes this investigation, GE, without admitting liability or wrongdoing, paid the United States a civil penalty of $1,500 million.

In June 2019, GE Capital recorded in Earnings (loss) from discontinued operations, net of taxes in our consolidated Statement of Earnings (Loss), $332 million of tax benefits and $46 million of net interest benefits due to a decrease in our balance of unrecognized tax benefits. See Note 15 for further information.

RESULTS OF DISCONTINUED OPERATIONS For the year ended December 31, 2019 (In millions)	Baker Hughes				Transportation and Other				GE Capital				Total
Sales of goods and services	$	16,047			$	550			$	—			$	16,598
GE Capital revenues and other income (loss)	—				—				33				33
Cost of goods and services sold	(13,317		)		(478		)		—				(13,795		)
Other costs and expenses	(2,390		)		(19		)		(240		)		(2,650		)
					—
Earnings (loss) of discontinued operations before income taxes	340				53				(207		)		186
Benefit (provision) for income taxes(b)	(176		)		(15		)		344				153
Earnings (loss) of discontinued operations, net of taxes(a)	165				39				136				339
Gain (loss) on disposal before income taxes	(8,715		)		3,471				61				(5,183		)
Benefit (provision) for income taxes(b)	477				(963		)		(5		)		(491		)
Gain (loss) on disposal, net of taxes	(8,238		)		2,508				56				(5,675		)
													—
Earnings (loss) from discontinued operations, net of taxes	$	(8,074	)		$	2,547			$	192			$	(5,335	)

For the year ended December 31, 2018 (In millions)
Sales of goods and services	$	22,859			$	3,898			$	—			$	26,757
GE Capital revenues and other income (loss)	—				—				(1,347		)		(1,347		)
Cost of goods and services sold	(19,198		)		(2,809		)		—				(22,007		)
Other costs and expenses	(3,346		)		(607		)		(407		)		(4,360		)
Earnings (loss) of discontinued operations before income taxes	315				482				(1,755		)		(958		)
Benefit (provision) for income taxes(b)	(347		)		(143		)		82				(408		)
Earnings (loss) of discontinued operations, net of taxes(a)	(33		)		339				(1,673		)		(1,366		)
Gain (loss) on disposal before income taxes	—				—				4				4
Benefit (provision) for income taxes(b)	—				—				(1		)		(1		)
Gain (loss) on disposal, net of taxes	—				—				3				3
Earnings (loss) from discontinued operations, net of taxes	$	(33	)		$	339			$	(1,670	)		$	(1,363	)

For the year ended December 31, 2017 (In millions)
Sales of goods and services	$	17,180			$	3,935			$	—			$	21,115
GE Capital revenues and other income (loss)	—				—				174				174
Cost of goods and services sold	(14,450		)		(2,990		)		—				(17,441		)
Other costs and expenses	(2,993		)		(483		)		(910		)		(4,386		)
Earnings (loss) of discontinued operations before income taxes	(264		)		461				(735		)		(538		)
Benefit (provision) for income taxes(b)	(59		)		(138		)		295				97
Earnings (loss) of discontinued operations, net of taxes(a)	(323		)		323				(440		)		(441		)
Gain (loss) on disposal before income taxes	—				—				306				306
Benefit (provision) for income taxes(b)	—				—				(178		)		(178		)
Gain (loss) on disposal, net of taxes	—				—				128				128
Earnings (loss) from discontinued operations, net of taxes	$	(323	)		$	323			$	(312	)		$	(312	)

(a) Earnings (loss) of discontinued operations attributable to the Company after income taxes was $279 million, $(1,367) million and $(360) million for the years ended December 31, 2019, 2018 and 2017, respectively.

(b) Total tax benefit (provision) for discontinued operations and disposals included current tax benefit (provision) of $1,260 million, $(508) million, and $(704) million, including current U.S. Federal tax benefit (provision) of $1,252 million, $156 million and $(313) million, and deferred tax benefit (provision) of $(1,599) million, $99 million and $624 million for the years ended December 31, 2019, 2018, and 2017, respectively.

---

December 31 (In millions)	2019			2018
Cash, cash equivalents and restricted cash	$	638		$	4,424
Investment securities	202			522
Current receivables	81			6,258
Inventories	—			5,419
Financing receivables held for sale (Polish mortgage portfolio)	2,485			2,745
Property, plant and equipment - net	—			7,139
Goodwill and intangible assets - net	—			31,622
Deferred income taxes	264			1,174
All other assets	439			4,550
Assets of discontinued operations(a)	$	4,109		$	63,853
Accounts payable & Progress collections and deferred income	$	40		$	6,806
All other liabilities	163			12,476
Liabilities of discontinued operations(b)	$	203		$	19,281

(a) Assets of discontinued operations included $54,596 million and $4,573 million related to our Baker Hughes and Transportation businesses, respectively as of December 31, 2018.

(b) Liabilities of discontinued operations included $15,535 million and $1,871 million related to our Baker Hughes and Transportation businesses, respectively as of December 31, 2018.

NOTE 3. INVESTMENT SECURITIES

All of our debt securities are classified as available-for-sale and substantially all are investment-grade debt securities supporting obligations to annuitants and policyholders in our run-off insurance operations. Changes in fair value of our debt securities are recorded to other comprehensive income. Equity securities with readily determinable fair values are included within this caption and changes in their fair value are recorded in earnings.

	2019													2018
December 31 (In millions)	Amortized cost			Gross unrealized gains			Gross unrealized losses			Estimated fair value				Amortized cost			Gross unrealized gains			Gross unrealized losses			Estimated fair value
Debt
U.S. corporate	$	23,037		$	4,636		$	(11	)	$	27,661			$	21,306		$	2,257		$	(357	)	$	23,206
Non-U.S. corporate	2,161			260			(1		)	2,420				1,906			53			(76		)	1,883
State and municipal	3,086			598			(15		)	3,669				3,320			367			(54		)	3,633
Mortgage and asset-backed	3,117			116			(4		)	3,229				3,325			51			(54		)	3,322
Government and agencies	1,391			126			—			1,516				1,314			62			(20		)	1,357
Equity	10,025			—			—			10,025				107			—			—			107
Total	$	42,816		$	5,736		$	(31	)	$	48,521			$	31,277		$	2,792		$	(561	)	$	33,508

The estimated fair values of investment securities at December 31, 2019 increased since December 31, 2018, primarily due to decreases in market yields and the classification of our remaining equity interest in Baker Hughes within investment securities. We elected to account for our remaining Baker Hughes interest and a promissory note receivable at fair value. At December 31, 2019, the fair value of our interest in Baker Hughes was $9,888 million.

Net unrealized gains (losses) for equity securities, which are recorded in Other income within continuing operations, were $800 million (including a gain of $793 million related to our interest in Baker Hughes), $(8) million and an insignificant amount for the years ended December 31, 2019, 2018 and 2017, respectively. 

Proceeds from debt and equity securities sales, early redemptions by issuers and principal payments on the Baker Hughes promissory note totaled $7,967 million, $3,222 million and $3,240 million for the years ended December 31, 2019, 2018, and 2017, respectively. Gross realized gains on investment securities were $115 million, $249 million and $243 million, and gross realized losses and impairments were $(203) million, $(41) million and $(24) million for the years ended 2019, 2018 and 2017, respectively. These realized losses included $(132) million related to the Wabtec sale as of December 31, 2019.

Gross unrealized losses of $(11) million and $(20) million are associated with debt securities with a fair value of $724 million and $274 million that have been in a loss position for less than 12 months and 12 months or more, respectively, at December 31, 2019. Gross unrealized losses of $(310) million and $(251) million are associated with debt securities with a fair value of $7,048 million, and $3,856 million that have been in a loss position for less than 12 months and 12 months or more, respectively, at December 31, 2018.

---

Contractual maturities of investments in available-for-sale debt securities (excluding mortgage and asset-backed securities) at December 31, 2019 are as follows:

(In millions)	Amortized cost			Estimated fair value
Due
Within one year	$	514		$	527
After one year through five years	2,615			2,766
After five years through ten years	6,614			7,599
After ten years	19,932			24,374

We expect actual maturities to differ from contractual maturities because borrowers have the right to call or prepay certain obligations.  

NOTE 4. CURRENT AND LONG-TERM RECEIVABLES 

	Consolidated							GE
December 31 (In millions)	2019			2018				2019			2018
Power	$	4,689		$	4,652			$	3,289		$	2,270
Renewable Energy	2,306			1,938				1,749			1,475
Aviation(a)	3,249			1,483				2,867			1,145
Healthcare	2,105			2,431				1,379			1,260
Corporate	246			238				223			205
Customer receivables	12,594			10,742				9,507			6,355
Sundry receivables	5,049			4,573				5,247			4,569
Allowance for losses	(874		)	(670		)		(872		)	(662		)
Total current receivables	$	16,769		$	14,645			$	13,883		$	10,262

(a) Increase in Aviation segment is primarily driven by receivables from Boeing due to 737 MAX temporary fleet grounding, with balance of $1,397 million as of December 31, 2019.

Current sundry receivables include supplier advances, revenue sharing programs receivables, other non-income based tax receivables, certain intercompany balances that eliminate upon consolidation and deferred purchase price. The deferred purchase price represents our retained risk with respect to current customer receivables sold to third parties through one of the receivable facilities. The balance of the deferred purchase price held by GE Capital at December 31, 2019 and 2018, was $421 million and $468 million, respectively.  

Sales of GE current customer receivables. GE sales of customer receivables to GE Capital or third parties are made on arm's length terms and any discount related to time value of money is recognized by GE when the customer receivables are sold. As of December 31, 2019 and 2018, GE sold approximately 51% and 66%, respectively, of its gross customer receivables to GE Capital or third parties. The performance of sold current receivables is similar to the performance of our other GE current receivables; delinquencies are not expected to be significant. Any difference between the carrying value of receivables sold and total cash collected is recognized as financing costs by GE in Interest and other financial charges in our consolidated Statement of Earnings (Loss). Costs of $515 million and $616 million were recognized during the years ended December 31, 2019 and 2018, respectively.

---

Activity related to customer receivables sold by GE is as follows:

(In millions)	GE Capital				Third Parties				GE Capital				Third Parties
	2019								2018
Balance at January 1	$	4,386			$	7,880			$	9,656			$	5,710
GE sales to GE Capital	40,988				—				50,318				—
GE sales to third parties	—				6,370				—				5,481
GE Capital sales to third parties	(28,073		)		28,073				(30,904		)		30,904
Collections and other	(14,621		)		(35,567		)		(25,414		)		(34,216		)
Reclassification from long-term customer receivables	407				—				731				—
Balance at December 31	$	3,087		(a)	$	6,757			$	4,386		(a)	$	7,880

(a) At December 31, 2019 and 2018, $539 million and $1,380 million, respectively, of the current receivables purchased and retained by GE Capital, had been sold by GE to GE Capital with recourse (i.e., GE retains all or some risk of default). The effect on GE cash flows from operating activities (CFOA) of claims by GE Capital on receivables sold with recourse has been insignificant for the years ended December 31, 2019 and 2018.

When GE sells customer receivables to GE Capital or third parties it accelerates the receipt of cash that would otherwise have been collected from customers. In any given period, the amount of cash received from sales of customer receivables compared to the cash GE would have otherwise collected had those customer receivables not been sold represents the cash generated or used in the period relating to this activity. Sales to GE Capital impact GE CFOA, while sales to third parties impact both GE and Consolidated CFOA. The impact of selling fewer customer receivables to GE Capital and those subsequently sold by GE Capital to third parties, including the effect of business dispositions, decreased GE’s CFOA by $2,099 million, $3,401 million and $138 million in the years ended December 31, 2019, 2018 and 2017, respectively.

LONG-TERM RECEIVABLES. In certain circumstances, GE provides customers, primarily within our Power, Renewable Energy and Aviation businesses, with extended payment terms for the purchase of new equipment, purchases of upgrades and spare parts for our long-term service agreements. These long-term customer receivables are initially recorded at present value and have an average remaining duration of approximately three years and are included in All other assets in the consolidated Statement of Financial Position. 

	Consolidated							GE
December 31 (In millions)	2019			2018				2019			2018
Long-term customer receivables	$	906		$	1,442			$	506		$	559
Long-term sundry receivables	1,504			1,180				1,834			1,519
Allowance for losses	(128		)	(145		)		(128		)	(145		)
Total long-term receivables	$	2,282		$	2,477			$	2,212		$	1,933

Long-term sundry receivables include supplier advances, revenue sharing programs receivables, other non-income based tax receivables and certain intercompany balances that eliminate upon consolidation.

Sales of GE long-term customer receivables. Through the second quarter of 2018, sales of long-term customer receivables were primarily made to GE Capital, while subsequently, GE has sold an insignificant amount to third parties to transfer economic risk during both the years ended December 31, 2019 and 2018. Activity related to long-term customer receivables purchased by GE Capital is as follows:

GE Capital December 31 (In millions)	2019				2018
Balance at January 1	$	883			$	1,947
GE sales to GE Capital	—				134
Sales, collections, accretion and other	(75		)		(468		)
Reclassification to current customer receivables	(407		)		(731		)
Balance at December 31(a)	$	400			$	883

(a) At December 31, 2019 and 2018, $312 million and $628 million, respectively, of long-term customer receivables purchased and retained by GE Capital, had been sold by GE to GE Capital with recourse (i.e., GE retains all or some risk of default). The effect on GE CFOA of claims by GE Capital on receivables sold with recourse have been insignificant for the years ended December 31, 2019 and 2018.

Similar to sales of current customer receivables, sales of long-term customer receivables can result in cash generation or use in our Statements of Cash Flows. The impact from the sale of long-term customer receivables to GE Capital, including those subsequently sold by GE Capital to third parties, decreased GE’s CFOA by $585 million, $878 million and increased GE's CFOA by $250 million in the years ended December 31, 2019, 2018 and 2017, respectively.

---

UNCONSOLIDATED RECEIVABLES FACILITIES. GE Capital has two revolving receivables facilities, with a total program size of $4,300 million, under which customer receivables purchased from GE are sold to third parties. In one of the facilities, upon the sale of receivables, we receive proceeds of cash and deferred purchase price and the Company’s remaining risk with respect to the sold receivables is limited to the balance of the deferred purchase price. In December 2018, we renegotiated the terms of this receivables facility. Effective January 2019, sales of receivables to the third-party purchasers and creation of deferred purchase price occur monthly rather than daily. As a result, both non-cash increases to the deferred purchase price and cash payments received on the deferred purchase price declined in 2019. In the other facility, upon the sale of receivables, we receive proceeds of cash only and therefore the Company has no remaining risk with respect to the sold receivables. Activity related to these facilities is included in GE Capital sales to third parties line in the sales of GE current customer receivables table above and is as follows:

For the years ended December 31 (In millions)	2019				2018
Customer receivables sold to receivables facilities	$	21,695			$	23,984
Total cash purchase price for customer receivables	21,202				18,040
Cash collections re-invested to purchase customer receivables	18,012				15,095
Non-cash increases to deferred purchase price	$	257			$	5,272
Cash payments received on deferred purchase price	303				5,192

NOTE 5. FINANCING RECEIVABLES AND ALLOWANCES

	Consolidated							GE Capital
December 31 (In millions)	2019			2018				2019			2018
Loans, net of deferred income	$	1,098		$	5,118			$	4,927		$	10,834
Investment in financing leases, net of deferred income	2,070			2,639				2,070			2,822
	3,168			7,757				6,996			13,656
Allowance for losses	(33		)	(58		)		(17		)	(28		)
Financing receivables – net	$	3,134		$	7,699			$	6,979		$	13,628

Consolidated finance lease income was $173 million, $275 million and $274 million for the years ended December 31, 2019, 2018 and 2017, respectively.

NET INVESTMENT IN FINANCING LEASES	Total financing leases							Direct financing and sales type leases(a)							Leveraged leases
December 31 (In millions)	2019			2018				2019			2018				2019			2018
Total minimum lease payments receivable	$	1,628		$	2,719			$	799		$	1,421			$	829		$	1,298
Less principal and interest on third-party non-recourse debt	(216		)	(474		)		—			—				(216		)	(474		)
Net minimum lease payments receivable	1,412			2,245				799			1,421				613			824
Less deferred income	(178		)	(329		)		(139		)	(286		)		(39		)	(43		)
Discounted lease receivable	1,234			1,916				660			1,135				574			781
Estimated unguaranteed residual value of leased assets, net of deferred income	835			906				412			420				423			486
Investment in financing leases, net of deferred income(b)	$	2,070		$	2,822			$	1,072		$	1,556			$	997		$	1,266

(a) Included $506 million and $399 million investment in sales type leases at December 31, 2019 and 2018, respectively.

(b) See Note 15 for deferred tax amounts related to financing leases.

CONTRACTUAL MATURITIES, DUE IN  (In millions)	2020			2021			2022			2023			2024			Thereafter			Total
Total loans	$	3,832		$	511		$	238		$	113		$	93		$	140		$	4,927
Net minimum lease payments receivable	303			270			194			281			198			166			1,412

We expect actual maturities to differ from contractual maturities, primarily as a result of prepayments. 

---

We manage our GE Capital financing receivables portfolio using delinquency and nonaccrual data as key performance indicators. At December 31, 2019, 4.2%, 2.9% and 6.1% of financing receivables were over 30 days past due, over 90 days past due and on nonaccrual, respectively, with the vast majority of nonaccrual financing receivables secured by collateral. At December 31, 2018, 2.4%, 1.8% and 0.9% of financing receivables were over 30 days past due, over 90 days past due and on nonaccrual, respectively.

NOTE 6. INVENTORIES

December 31 (In millions)	2019			2018
Raw materials and work in process	$	8,771		$	8,057
Finished goods	5,333			5,746
Total inventories	$	14,104		$	13,803

NOTE 7. PROPERTY, PLANT AND EQUIPMENT AND OPERATING LEASES

	Depreciable lives-new	Original Cost							Net Carrying Value
December 31 (Dollars in millions)	(in years)	2019			2018				2019			2018
Land and improvements	8	$	608		$	700			$	596		$	673
Buildings, structures and related equipment	8-40	7,824			8,455				3,875			4,083
Machinery and equipment	4-20	20,082			19,425				8,360			8,048
Leasehold costs and manufacturing plant under construction	1-10	2,165			2,646				1,539			2,024
GE		$	30,680		$	31,225			$	14,370		$	14,828
Land and improvements, buildings, structures and related equipment	1-40	149			$	153			29			$	32
Equipment leased to others (ELTO)
Aircraft	15-20	35,507			36,476				21,414			22,201
Engines	15-20	4,113			3,234				3,283			2,489
Helicopters	15-20	5,474			5,230				4,709			4,660
All other	15-35	237			209				214			128
GE Capital(a)		$	45,480		$	45,302			$	29,649		$	29,510
Eliminations		(972		)	(909		)		(729		)	(728		)
Total		$	75,187		$	75,618			$	43,290		$	43,611

(a) Included $1,539 million and $1,397 million of original cost of assets leased to GE with accumulated amortization of $(251) million and $(241) million at December 31, 2019 and 2018, respectively.

Consolidated depreciation and amortization related to property, plant and equipment was $4,026 million, $4,419 million and $4,332 million for the years ended December 31, 2019, 2018 and 2017, respectively. Amortization of GE Capital ELTO was $2,019 million, $2,089 million and $2,190 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Noncancellable future rentals due from customers for equipment on operating leases at December 31, 2019, are as follows:

(In millions)	2020			2021			2022			2023			2024			Thereafter			Total
	$	2,982		$	2,625		$	2,258		$	1,820		$	1,647		$	5,652		$	16,985

Operating lease income on our ELTO was $3,804 million, $4,075 million, and $4,144 million for the years ended December 31, 2019, 2018, and 2017, respectively, and comprises fixed lease income of $3,045 million, $3,243 million and $3,395 million and variable lease income of $759 million, $832 million and $748 million, respectively.

Operating Lease Assets and Liabilities. Our ROU assets and lease liabilities for operating leases were $2,896 million and $3,162 million, respectively, as of December 31, 2019. Substantially all of our operating leases have remaining lease terms of 12 years or less, some of which may include options to extend.

OPERATING LEASE EXPENSE (In millions)	2019				2018				2017
Long-term (fixed)	$	834			$	966			$	1,003
Long-term (variable)	136				177				231
Short-term	206				133				131
Total operating lease expense	$	1,176			$	1,276			$	1,365

---

MATURITY OF LEASE LIABILITIES (In millions)	2020			2021			2022			2023			2024			Thereafter			Total
Undiscounted lease payments	$	766		$	655		$	561		$	465		$	375		$	914		$	3,737
Less: imputed interest																			(575		)
Total lease liability as of December 31, 2019																			$	3,162

SUPPLEMENTAL INFORMATION RELATED TO OPERATING LEASES (Dollars in millions)
Operating cash flows used for operating leases for the year ended December 31, 2019	$	888
Right-of-use assets obtained in exchange for new lease liabilities for the year ended December 31, 2019	$	746
Weighted-average remaining lease term at December 31, 2019	6.9 years
Weighted-average discount rate at December 31, 2019	4.9		%

NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS

CHANGES IN GOODWILL BALANCES
				2018												2019
(In millions)	Balance at December 31, 2017			Dispositions and classifications to held for sale			Impairments			Currency exchange and other			Balance at December 31, 2018			Dispositions and classifications to held for sale			Impairments			Currency exchange and other			Balance at December 31, 2019
Power	$	20,855		$	(1,903	)	$	(18,443	)	$	(369	)	$	139		$	—		$	—		$	6		$	145
Renewable Energy	7,626			(3		)	(2,859		)	(35		)	4,730			—			(1,486		)	46			3,290
Aviation	10,008			(12		)	—			(158		)	9,839			—			—			20			9,859
Healthcare	17,306			(21		)	—			(58		)	17,226			(5,558		)	—			59			11,728
Capital(a)	984			—			—			(80		)	904			(39		)	—			(26		)	839
Corporate(b)	2,042			(81		)	(833		)	9			1,136			—			—			(262		)	873
Total	$	58,821		$	(2,020	)	$	(22,136	)	$	(691	)	$	33,974		$	(5,597	)	$	(1,486	)	$	(157	)	$	26,734

(a) Capital balance at December 31, 2019 is our GE Capital Aviation Services (GECAS) business.

(b) Corporate balance at December 31, 2019 is our Digital business.

Goodwill balances decreased primarily as a result of transferring our BioPharma business within our Healthcare segment to held for sale and goodwill impairments at our Hydro and Grid Solutions equipment and services reporting units within our Renewable Energy segment.

In the second quarter of 2019, we reorganized our Grid Solutions reporting unit in our Power segment by separating our Grid Solutions software business from the Grid Solutions reporting unit. Our Grid Solutions software business was then moved into Corporate and combined with our Digital business. In addition, the remaining Grid Solutions reporting unit (now referred to as Grid Solutions equipment and services) was moved into our Renewable Energy segment as a separate reporting unit. As a result, we allocated goodwill between Grid Solutions software and the Grid Solutions equipment and services reporting units based on the relative fair values of each business. This resulted in $1,618 million of goodwill transferring from our Power segment to our Renewable Energy segment and our Digital business within Corporate in the amounts of $744 million and $874 million, respectively.

As a consequence of separating the two businesses, the Grid Solutions equipment and services reporting unit’s fair value was below its carrying value. Therefore, we conducted step two of the goodwill impairment test for this reporting unit using a current outlook.

In performing the second step, we identified unrecognized intangible assets primarily related to internally developed technology and trade name. The combination of these unrecognized intangibles, adjustments to the carrying value of other assets and liabilities, and reduced reporting unit fair value calculated in step one, resulted in an implied fair value of goodwill below the carrying value of goodwill for the Grid Solutions equipment and services reporting unit. Therefore, we recorded a non-cash goodwill impairment loss of $744 million in Goodwill impairments in our consolidated Statement of Earnings (Loss). We determined the fair value of the Grid Solutions equipment and services reporting unit using a combination of the market and income approaches. After the impairment charge, there is no remaining goodwill associated with our Grid Solutions equipment and services reporting unit.

Further, in the second quarter of 2019, a portion of goodwill recorded at Corporate associated with our Digital acquisitions that was previously allocated to our Renewable Energy, Aviation and Healthcare segments in purchase accounting and for goodwill testing purposes was reflected in these segments in the table above.

---

In the third quarter of 2019, we performed our annual impairment test. Based on the results of this test, the fair values of each of our reporting units exceeded their carrying values except for our Hydro reporting unit within our Renewable Energy segment. The Hydro reporting unit continued to experience declines in order growth and increased project costs which resulted in downward revisions to our current and projected earnings and cash flows for this business. Therefore, we performed a step two analysis which resulted in a non-cash goodwill impairment loss of $742 million. We determined the fair value of the Hydro reporting unit using the income approach. We recorded the impairment loss in Goodwill impairments in our consolidated Statement of Earnings (Loss). After the impairment charge, there is no remaining goodwill associated with our Hydro reporting unit. All of the goodwill in this reporting unit was previously recorded as a result of the Alstom acquisition.

Subsequent to this year's third quarter testing, and in order to improve alignment of our annual goodwill impairment testing and strategic planning processes, we changed our annual testing date from the third quarter to the fourth quarter. Therefore, we retested the goodwill at each of our reporting units in the fourth quarter of 2019. Based on the results of this test, the fair value of all our reporting units exceeded their carrying values.

We continue to monitor the operating results and cash flow forecasts of our Additive reporting unit in our Aviation segment as the fair value of this reporting unit was not significantly in excess of its carrying value. At December 31, 2019, our Additive reporting unit had goodwill of $1,116 million.

We also continue to evaluate strategic options to accelerate the further reduction in the size of GE Capital, some of which could have a material charge depending on the timing, negotiated terms and conditions of any agreements, including $839 million of goodwill.

In 2018, we recognized a total non-cash goodwill impairment loss of $22,136 million in our Power Generation, Grid Solutions, and Hydro reporting units in our Power and Renewable Energy segments.

Determining the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods.

	2019										2018
INTANGIBLE ASSETS SUBJECT TO AMORTIZATION December 31 (In millions)	Gross carrying amount			Accumulated amortization			Net				Gross carrying amount			Accumulated amortization			Net
Customer-related(a)	$	6,770		$	(3,070	)	$	3,701			$	7,107		$	(2,768	)	$	4,341
Patents and technology	8,180			(3,730		)	4,450				9,166			(3,973		)	5,192
Capitalized software	5,822			(3,651		)	2,171				5,951			(3,643		)	2,308
Trademarks & other	737			(406		)	332				818			(481		)	337
Total	$	21,510		$	(10,857	)	$	10,653			$	23,041		$	(10,865	)	$	12,178

(a) Balance includes payments made to our customers, primarily within our Aviation business.

Intangible assets decreased in the fourth quarter of 2019, primarily as a result of amortization, impairments, and the transfer of BioPharma within our Healthcare segment to held for sale of $542 million. Consolidated amortization expense was $1,569 million, $2,163 million and $1,862 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Included within amortization expense for the years ended December 31, 2019 and December 31, 2018 were non-cash impairment charges recorded in Corporate and in our Power segment for $103 million and $428 million, respectively. We determined the fair value of these intangible assets using an income approach. These charges were recorded in Selling, general, and administrative expenses in our consolidated Statement of Earnings (Loss).

Estimated Consolidated annual pre-tax amortization for intangible assets over the next five calendar years are as follows:

ESTIMATED 5 YEAR CONSOLIDATED AMORTIZATION (In millions)	2020			2021			2022			2023			2024
Estimated annual pre-tax amortization	$	1,358		$	1,274		$	1,173		$	1,081		$	1,107

During 2019, we recorded additions to intangible assets subject to amortization of $664 million with a weighted-average amortizable period of 5.4 years, including capitalized software of $555 million, with a weighted-average amortizable period of 5.2 years.

---

NOTE 9. CONTRACT AND OTHER DEFERRED ASSETS & PROGRESS COLLECTIONS AND DEFERRED INCOME 

Contract and other deferred assets decreased $629 million in 2019. Our long-term service agreements decreased primarily due to billings of $11,508 million and a net unfavorable change in estimated profitability of $124 million at Power and $49 million at Aviation, offset by revenues recognized of $11,082 million.

December 31, 2019 (In millions)	Power			Aviation			Renewable Energy			Healthcare			Other			Total
Revenues in excess of billings	$	5,342		$	4,996		$	—		$	—		$	—		$	10,338
Billings in excess of revenues	(1,561		)	(3,719		)	—			—			—			(5,280		)
Long-term service agreements(a)	$	3,781		$	1,278		$	—		$	—		$	—		$	5,058
Short-term and other service agreements	190			316			43			169			—			717
Equipment contract revenues(b)	2,508			82			1,217			324			106			4,236
Total contract assets	6,478			1,675			1,260			492			106			10,011
Deferred inventory costs(c)	943			287			1,677			359			—			3,267
Nonrecurring engineering costs(d)	44			2,257			47			35			8			2,391
Customer advances and other(e)	—			1,165			—			—			(32		)	1,133
Contract and other deferred assets	$	7,465		$	5,384		$	2,985		$	886		$	82		$	16,801

December 31, 2018 (In millions)
Revenues in excess of billings	$	5,368		$	5,412		$	—		$	—		$	—		$	10,780
Billings in excess of revenues	(1,693		)	(3,297		)	—			—			—			(4,989		)
Long-term service agreements(a)	$	3,675		$	2,115		$	—		$	—		$	—		$	5,790
Short-term and other service agreements	167			272			—			251			—			690
Equipment contract revenues(b)	2,761			80			1,174			320			64			4,400
Total contract assets	6,603			2,468			1,174			571			64			10,880
Deferred inventory costs(c)	1,003			673			1,267			360			5			3,309
Nonrecurring engineering costs(d)	43			1,916			85			34			17			2,095
Customer advances and other(e)	—			1,146			—			—			—			1,146
Contract and other deferred assets	$	7,650		$	6,204		$	2,525		$	966		$	87		$	17,431

(a)

Included amounts due from customers at Aviation for the sales of engines, spare parts and services, which we will collect through higher usage-based fees from servicing equipment under long-term service agreements, totaling $1,712 million and $1,562 million as of December 31, 2019 and 2018, respectively. The corresponding discount is recorded within liabilities as Deferred income and amounted to $308 million and $310 million as of December 31, 2019 and 2018, respectively.

(b)	Included are amounts due from customers at Power for the sale of services upgrades, which we collect through incremental fixed or usage-based fees from servicing the equipment under long-term service agreements, totaling $909 million and $886 million as of December 31, 2019 and 2018, respectively.

(c)	Represents cost deferral for shipped goods (such as components for wind turbine assemblies within our Renewable Energy segment) and labor and overhead costs on time and material service contracts (primarily originating in Power and Aviation) and other costs for which the criteria for revenue recognition has not yet been met.

(d)	Included costs incurred prior to production (such as requisition engineering) for equipment production contracts, primarily within our Aviation segment, which are allocated ratably to each unit produced.

(e)

Included advances to and amounts due from customers at Aviation for the sale of engines, spare parts and services, which we will collect through incremental fees for goods and services to be delivered in future periods, totaling $986 million and $950 million as of December 31, 2019 and 2018, respectively. The corresponding discount is recorded within liabilities as Deferred income and amounted to $256 million and $223 million as of December 31, 2019 and 2018, respectively.

PROGRESS COLLECTIONS & DEFERRED INCOME. Progress collections represent cash received from customers under ordinary commercial payment terms in advance of delivery. Progress collections on equipment contracts primarily comprise milestone payments received from customers prior to the manufacture and delivery of customized equipment orders. Other progress collections primarily comprise down payments from customers to reserve production slots for standardized inventory orders such as advance payments from customers when they place orders for wind turbines and blades within our Renewable Energy segment and payments from airframers and airlines for install and spare engines, respectively, within our Aviation segment.

Progress collections and deferred income increased $1,456 million in 2019 primarily due to milestone payments received primarily at Aviation and Renewable Energy. These increases were partially offset by the timing of revenue recognition in excess of new collections received, primarily at Healthcare and Power.

Revenues recognized for contracts included in liability position at the beginning of the year were $11,020 million and $14,960 million for the year ended December 31, 2019 and 2018, respectively.

---

December 31, 2019 (In millions)	Power			Aviation			Renewable Energy			Healthcare			Other			Total
Progress collections on equipment contracts	$	5,857		$	115		$	1,268		$	—		$	—		$	7,240
Other progress collections	413			4,748			4,193			305			189			9,849
Total progress collections	$	6,270		$	4,863		$	5,461		$	305		$	189		$	17,089
Deferred income(a)	49			1,528			284			1,647			98			3,606
GE Progress collections and deferred income	$	6,319		$	6,391		$	5,745		$	1,952		$	287		$	20,694

December 31, 2018 (In millions)
Progress collections on equipment contracts	$	5,536		$	114		$	1,325		$	—		$	—		$	6,975
Other progress collections	691			4,034			3,557			299			201			8,783
Total progress collections	$	6,227		$	4,148		$	4,883		$	299		$	201		$	15,758
Deferred income(a)	112			1,338			260			1,692			79			3,480
GE Progress collections and deferred income	$	6,339		$	5,486		$	5,143		$	1,991		$	280		$	19,239

(a)	Included in this balance are finance discounts associated with customer advances at Aviation of $564 million and $533 million as of December 31, 2019 and 2018, respectively.

NOTE 10. ALL OTHER ASSETS

December 31 (In millions)	2019			2018
Equity method and other investments (Notes 3 and 26)	$	4,015		$	4,003
Long-term receivables (Note 4)	2,212			1,933
Prepaid taxes and deferred charges	1,480			1,763
Derivative instruments (Note 21)	211			30
Other	481			849
Total GE	$	8,399		$	8,578
Equity method and other investments (Notes 3 and 26)	$	2,227		$	3,097
GECAS pre-delivery payments (Note 23)	2,934			3,086
Assets held for sale	2,294			2,762
Derivative instruments (Note 21)	529			175
Other	664			748
Total GE Capital	$	8,648		$	9,869
Eliminations	(586		)	(90		)
Total Consolidated	$	16,461		$	18,357

---

NOTE 11. BORROWINGS

December 31 (Dollars in millions)		2019					2018
		Amount			Average Rate		Amount			Average Rate
Commercial paper		$	3,008		1.62	%	$	3,005		1.64	%
Current portion of long-term borrowings		766			0.36		60			4.02
Current portion of long-term borrowings assumed by GE		5,473			3.71		4,207			3.76
Other		1,832					2,081
Total GE short-term borrowings		$	11,079				$	9,354
Current portion of long-term borrowings		11,226			3.01	%	3,984			2.00	%
Intercompany payable to GE		2,104					2,684
Other		804					1,015
Total GE Capital short-term borrowings		$	14,134				$	7,684
Eliminations		(3,140		)			(4,262		)
Total short-term borrowings		$	22,072				$	12,776
	Maturities	Amount			Average Rate		Amount			Average Rate
Senior notes	2022-2044	$	14,762		2.11	%	$	20,387		2.28	%
Senior notes assumed by GE	2021-2054	23,024			4.17		29,218			4.30
Subordinated notes assumed by GE	2021-2037	2,871			3.68		2,836			3.64
Other		324					417
Total GE long-term borrowings		$	40,980				$	52,858
Senior notes	2021-2042	$	25,371		3.66	%	$	35,105		3.49	%
Subordinated notes		178					165
Intercompany payable to GE		17,038					19,828
Other		626					885
Total GE Capital long-term borrowings		$	43,213				$	55,982
Eliminations		(17,038		)			(19,892		)
Total long-term borrowings		$	67,155				$	88,949
Non-recourse borrowings of consolidated securitization entities	2020-2021	1,655			1.34	%	1,875			2.05	%
Total borrowings		$	90,882				$	103,599

At December 31, 2019, the outstanding GE Capital borrowings that had been assumed by GE as part of the GE Capital Exit Plan was $31,368 million ($5,473 million short term and $25,895 million long term), for which GE has an offsetting Receivable from GE Capital of $19,142 million. The difference of $12,226 million ($3,369 million in short-term borrowings and $8,857 million in long-term borrowings) represents the amount of borrowings GE Capital had funded with available cash to GE via intercompany loans in lieu of GE issuing borrowings externally. In 2019, GE repaid $1,523 million of maturing intercompany loans from GE Capital.

At December 31, 2019, total GE borrowings of $32,917 million comprised GE-issued borrowings of $20,691 million and intercompany loans from GE Capital to GE of $12,226 million as described above.

GE has provided a full and unconditional guarantee on the payment of the principal and interest on all tradable senior and subordinated outstanding long-term debt securities and all commercial paper issued or guaranteed by GE Capital. At December 31, 2019, the Guarantee applies to $34,683 million of GE Capital debt.

On September 30, 2019, GE completed a tender offer to purchase $4,846 million in aggregate principal amount of certain senior unsecured debt, comprising $1,250 million of 4.500% Notes due 2044, $1,144 million of 4.125% Notes due 2042, €992 million ($1,101 million equivalent) of 2.125% Notes due 2037, €784 million ($870 million equivalent) of 1.500% Notes due 2029, €374 million ($415 million equivalent) of 1.875% Notes due 2027, and €59 million ($66 million equivalent) of 1.250% Notes due 2023. The total cash consideration paid for these purchases was $5,031 million and the total carrying amount of the purchased notes was $4,787 million, resulting in a loss of $255 million (including $12 million of accrued fees and other costs associated with the tender) which was recorded in Interest and other financial charges in the GE Statement of Earnings (Loss). In addition to the purchase price, GE paid any accrued and unpaid interest on the purchased notes through the date of purchase.

Non-recourse borrowings of consolidated securitization entities included $1,569 million and $225 million of current portion of long-term borrowings at December 31, 2019 and 2018, respectively. See Notes 4 and 22 for further information.

See Note 21 for further information about borrowings and associated interest rate swaps.

---

Long-term debt maturities over the next five years follow.  

(In millions)	2020			2021			2022			2023			2024
GE excluding assumed debt	$	766		$	47		$	4,994		$	1,360		$	773
GE Capital debt assumed by GE(a)	5,473			4,685			1,954			2,842			918
GE Capital other debt	11,226		(b)	1,930			2,215			2,418			117

(a)	Of these maturities, $3,369 million, $442 million, zero, zero and $528 million for 2020, 2021, 2022, 2023 and 2024 respectively, were effectively transferred to GE through intercompany loans with right of offset.

(b)	Fixed and floating rate notes of $443 million contain put options with exercise dates in 2020, which have final maturity beyond 2024.

NOTE 12. INSURANCE LIABILITIES AND ANNUITY BENEFITS 

Insurance liabilities and annuity benefits comprise mainly obligations to annuitants and insureds in our run-off insurance operations.   

December 31, 2019 (In millions)	Long-term care insurance contracts			Structured settlement annuities & life insurance contracts			Other contracts			Other adjustments(a)			Total
Future policy benefit reserves	$	16,755		$	9,511		$	183		$	5,655		$	32,104
Claim reserves(b)	4,238			252			1,125						5,615
Investment contracts(c)	—			1,136			1,055			—			2,191
Unearned premiums and other	30			196			96			—			322
	21,023			11,095			2,459			5,655			40,232
Eliminations	—			—			(406		)	—			(406		)
Total	$	21,023		$	11,095		$	2,053		$	5,655		$	39,826

December 31, 2018 (In millions)
Future policy benefit reserves	$	16,029		$	9,495		$	169		$	2,247		$	27,940
Claim reserves(b)	3,917			230			1,178			—			5,324
Investment contracts(c)	—			1,239			1,149			—			2,388
Unearned premiums and other	34			205			103			—			342
	19,980			11,169			2,599			2,247			35,994
Eliminations	—			—			(432		)	—			(432		)
Total	$	19,980		$	11,169		$	2,167		$	2,247		$	35,562

(a)	To the extent that unrealized gains on specific investment securities supporting our insurance contracts would result in a premium deficiency should those gains be realized, an increase in future policy benefit reserves is recorded, with an after-tax reduction of net unrealized gains recognized through Other comprehensive income in our consolidated Statement of Earnings (Loss).

(b)	Other contracts included claim reserves of $342 million and $346 million related to short-duration contracts at Electric Insurance Company, net of eliminations, at December 31, 2019 and December 31, 2018, respectively.

(c)	Investment contracts are contracts without significant mortality or morbidity risks.

We annually perform premium deficiency testing in the aggregate across our run-off insurance portfolio. We performed 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. These procedures included updating experience studies since our last test completed in the fourth quarter of 2018, independent actuarial analysis and review of industry benchmarks. As we experienced a premium deficiency in 2018, our 2019 premium deficiency testing started with a zero margin and, accordingly, any net adverse development would result in a future charge to earnings. Using our most recent future policy benefit reserve assumptions, including changes to our assumptions related to discount rate and future premium rate increases, as described below, we identified a premium deficiency resulting in a $972 million non-cash pre-tax charge to earnings in the third quarter 2019.

---

The increase to future policy benefit reserves resulting from our 2019 testing was primarily attributable to the following key assumption changes:

•

We have observed a significant decline in market interest rates this year, which has resulted in a lower discount rate and adversely impacted our reserve margin by $1,344 million. As noted above, our discount rate is based upon the actual yields on our investment portfolio and our forecasted reinvestment rates, which comprise the future rates at which we expect to invest proceeds from investment maturities, net of operating cash flows, and projected future capital contributions. Market interest rates have declined by approximately 130 basis points since our 2018 premium deficiency test, with 60 basis points of this reduction occurring since the second quarter 2019. Although the movement in market rates impacts the reinvestment rate, it does not materially impact the actual yield on our existing investments. Furthermore, our assumed reinvestment rate on future fixed income investments is based both on current expected long-term average rates and market interest rates. Thus, a decline in market interest rates will not result in an equivalent decline in our discount rate assumption. Our discount rate assumption for purposes of performing the premium deficiency assessment resulted in weighted average rate of 5.74% compared to 6.04% in 2018. This decline in the discount rate from 2018 to 2019 reflected a lower reinvestment rate increasing to an expected long-term average investment yield over a longer period, lower prospective expected returns on higher yielding assets classes introduced with our 2018 strategic initiatives, and slightly lower actual yields on our investment security portfolio.

•

Higher levels of projected long-term care premium rate increases due to larger rate filings by some ceding companies than previously planned, which favorably impacted our reserve margin by $263 million. Since our premium deficiency testing performed in 2018, we have implemented approximately $200 million of previously approved rate increase actions. Our 2019 premium deficiency test includes approximately $2,000 million of anticipated future premium increases or benefit reductions associated with future in-force rate actions. This represents an increase of $300 million from our 2018 premium deficiency test to account for actions that are: (a) approved and not yet implemented, (b) filed but not yet approved, and (c) estimated on future filings through 2028, and includes the effect of the lower discount rate mentioned above.

Certain future adverse changes in our assumptions could result in the unlocking of reserves, resetting of actuarial assumptions to current assumptions, an increase to future policy benefit reserves and a charge to earnings. Any favorable changes to these assumptions could result in additional margin in our premium deficiency test and higher income over the remaining duration of the portfolio, including higher investment income. 

Claim reserve activity included incurred claims of $1,873 million, $2,106 million and $2,020 million, of which $(36) million, $(46) million and $135 million related to the recognition of adjustments to prior year claim reserves arising from our periodic reserve evaluation in the years ended December 31, 2019, 2018 and 2017, respectively. Paid claims were $1,626 million, $1,937 million and $1,670 million in the years ended December 31, 2019, 2018 and 2017, respectively. The vast majority of paid claims relate to prior year insured events primarily as a result of the length of time long-term care policyholders remain on claim.

When insurance companies cede insurance risk to third parties, such as reinsurers, they are not relieved of their primary obligation to policyholders and cedents. When losses on ceded risks give rise to claims for recovery, we establish allowances for probable losses on such receivables from reinsurers as required. The vast majority of our remaining net reinsurance recoverables are secured by assets held in a trust for which we are the beneficiary. Reinsurance recoverables, net of allowances of $1,355 million and $1,090 million, are included in Other GE Capital receivables in our consolidated Statement of Financial Position, and amounted to $2,416 million and $2,271 million at December 31, 2019 and December 31, 2018, respectively.   

We recognize reinsurance recoveries as a reduction of Insurance losses and annuity benefits in our consolidated Statement of Earnings (Loss). Reinsurance recoveries were $362 million, $324 million and $454 million for the years ended December 31, 2019, 2018 and 2017, respectively.

---

NOTE 13. POSTRETIREMENT BENEFIT PLANS

PENSION BENEFITS AND RETIREE HEALTH AND LIFE BENEFITS.

We sponsor a number of pension and retiree health and life insurance benefit plans that we present in three categories, principal pension plans, other pension plans and principal retiree benefit plans. Smaller pension plans with pension assets or obligations less than $50 million and other retiree benefit plans are not presented. We use a December 31 measurement date for these plans.

Principal pension plans represent the GE Pension Plan and the GE Supplementary Pension Plan. The GE Pension Plan is a defined benefit plan that covers approximately 245,500 retirees and beneficiaries, approximately 97,000 vested former employees and approximately 31,500 active employees. This plan has been closed to new participants since 2012.

The GE Supplementary Pension Plan is an unfunded plan that provides supplementary benefits to higher-level, longer-service employees. The GE Supplementary Pension Plan annuity benefit has been closed to new participants since 2011 and has been replaced by an installment benefit.

Other pension plans in 2019 included 44 U.S. and non-U.S. pension plans with pension assets or obligations greater than $50 million which cover approximately 57,000 retirees and beneficiaries, approximately 54,000 vested former employees and approximately 22,000 active employees. Principal retiree benefit plans provide health and life insurance benefits to certain eligible participants, and these participants share in the cost of the healthcare benefits. Principal retiree benefit plans cover approximately 176,000 retirees and dependents.

In October 2019, we approved changes to our principal pension plans. The GE Pension Plan benefits for approximately 20,000 employees with salaried benefits will be frozen effective January 1, 2021, and thereafter these employees will receive increased company contributions in the company sponsored defined contribution plan in lieu of participation in a defined benefit plan. As a result, we recognized a non-cash pre-tax curtailment loss of $298 million in the fourth quarter of 2019 as non-operating benefit costs. In addition, the GE Supplementary Pension Plan benefits for approximately 700 employees who became executives before 2011 will be frozen effective January 1, 2021, and thereafter these employees will accrue the installment benefit currently offered to new executives since 2011. The change in the GE Supplementary Pension Plan reduced the projected benefit obligation by $297 million and has been treated as a plan amendment that is being amortized over future periods.

As result, we remeasured the pension assets and obligations for the principal pension plans as of October 1, 2019, which resulted in a net actuarial loss of $4,735 million, which was recorded in Accumulated other comprehensive income. The net actuarial loss was primarily due to a reduction in the discount rate since December 31, 2018, offset by our asset performance up to the remeasurement date and the impact of the freeze for the GE Pension Plan.

Finally, we offered approximately 100,000 former U.S. employees with a vested benefit in the GE Pension Plan a limited-time option to take a lump sum distribution in lieu of future monthly payments. In December 2019, lump sum distributions of $2,657 million were made from the GE Pension Trust.

At December 31, 2019, we completed our annual year-end measurement of the funded status of the principal pension plans which resulted in a net actuarial gain of $3,898 million which was recorded in Accumulated Other Comprehensive Income. The net actuarial gain was primarily due to the impact of the lump-sum distributions, an increase in the discount rate since the remeasurement date, asset performance in the fourth quarter and updated mortality assumptions.

For the year ended December 31, 2019, we recognized a net actuarial loss of $837 million which is a result of a $4,735 million net actuarial loss from remeasurement as of October 1, 2019 and a $3,898 million net actuarial gain from our annual year-end measurement.

---

COST OF OUR BENEFITS PLANS AND ASSUMPTIONS
	2019										2018										2017
(Dollars in millions)	Principal pension			Other pension			Principal retiree benefit				Principal pension			Other pension			Principal retiree benefit				Principal pension			Other pension			Principal retiree benefit
Components of expense (income)
Service cost - operating	$	654		$	246		$	58			$	888		$	323		$	63			$	1,055		$	542		$	94
Interest cost	2,780			542			202				2,658			548			196				2,856			561			224
Expected return on plan assets	(3,428		)	(1,144		)	(21		)		(3,248		)	(1,285		)	(29		)		(3,390		)	(1,176		)	(36		)
Amortization of net actuarial loss (gain)	3,439			319			(118		)		3,785			312			(79		)		2,812			418			(80		)
Amortization of prior service cost (credit)	135			3			(232		)		143			(9		)	(230		)		290			(5		)	(171		)
Curtailment / settlement loss (gain)(a)	349			13			(38		)		34			1			—				64			24			4
Non-operating	3,275			(267		)	(207		)		3,372			(433		)	(142		)		2,632			(178		)	(59		)
Net periodic expense (income)	$	3,929		$	(21	)	$	(149	)		$	4,260		$	(110	)	$	(79	)		$	3,687		$	364		$	35
Weighted-average assumptions used to determine benefit obligations
Discount rate	3.36		%	1.97		%	3.05		%		4.34		%	2.75		%	4.12		%		3.64		%	2.41		%	3.43		%
Compensation increases	2.95			3.16			3.75				3.60			3.16			3.60				3.55			3.09			3.55
Initial healthcare trend rate(b)	N/A			N/A			5.90				N/A			N/A			6.00				N/A			N/A			6.00
Weighted-average assumptions used to determine benefit cost
Discount rate(c)	4.07			2.75			4.12				3.64			2.41			3.43				4.11			2.55			3.75
Expected rate of return on plan assets	6.75			6.76			7.00				6.75			6.75			7.00				7.50			6.75			7.00

(a) For 2019, principal pension principally the curtailment loss due to GE Pension Plan freeze announced in October 2019.

(b) For 2019, ultimately declining to 5% for 2030 and thereafter.

(c) Weighted average 2019 discount rate for principal pension was 4.07%. Discount rate was 4.34% for January 1, 2019 through September 30, 2019 and then changed to 3.24% for the remainder of 2019 due to the remeasurement of the plans for the U.S. pension changes announced in October 2019.

The components of net periodic benefit costs, other than the service cost component, are included in Non-operating benefit costs in our consolidated Statement of Earnings (Loss).

---

PLAN FUNDED STATUS AND AMOUNTS RECORDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
	2019												2018
(in millions)	Principal pension				Other pension				Principal retiree benefit				Principal pension				Other pension				Principal retiree benefit
Change in benefit obligations
Balance at January 1	$	68,500			$	21,091			$	5,153			$	74,985			$	23,066			$	6,006
Service cost	654				246				58				888				323				63
Interest cost	2,780				542				202				2,658				548				196
Participant contributions	77				29				61				90				37				60
Plan amendments	(42		)	(a)	(17		)		(23		)		—				82				—
Actuarial loss (gain)	7,073			(b)	2,422			(e)	275			(e)	(6,263		)	(e)	(879		)	(e)	(593		)	(f)
Benefits paid	(3,788		)		(1,043		)		(533		)		(3,729		)		(1,002		)		(569		)
Curtailments	(838		)		(32		)		(33		)		—				(11		)		—
Settlements	(2,657		)	(c)	—				—				—				—				—
Acquisitions (dispositions) / other - net	(3		)		(1,030		)		—				(129		)		(90		)		(10		)
Exchange rate adjustments	—				713				—				—				(983		)		—
Balance at December 31	$	71,756		(d)	$	22,921			$	5,160		(g)	$	68,500		(d)	$	21,091			$	5,153		(g)
Change in plan assets
Balance at January 1	50,009				17,537				362				50,361				19,306				518
Actual gain (loss) on plan assets	8,694				2,229				57				(2,996		)		(245		)		(17		)
Employer contributions	298				716				342				6,283				475				370
Participant contributions	77				29				61				90				37				60
Benefits paid	(3,788		)		(1,043		)		(533		)		(3,729		)		(1,002		)		(569		)
Settlements	(2,657		)	(c)	—				—				—				—				—
Acquisitions (dispositions) / other - net	—				(1,030		)		—				—				(185		)		—
Exchange rate adjustments	—				704				—				—				(849		)		—
Balance at December 31	$	52,633			$	19,142			$	289			$	50,009			$	17,537			$	362
Funded status - deficit(h)	$	19,123			$	3,779			$	4,871			$	18,491			$	3,554			$	4,791
Amounts recorded in the consolidated Statement of Financial Position
Non-current assets - other	—				475				—				—				746				—
Current liabilities - other	(296		)		(123		)		(355		)		(280		)		(117		)		(378		)
Non-current liabilities - compensation and benefits	(18,827		)		(4,131		)		(4,516		)		(18,211		)		(4,183		)		(4,413		)
Net amount recorded	$	(19,123	)		$	(3,779	)		$	(4,871	)		$	(18,491	)		$	(3,554	)		$	(4,791	)
Amounts recorded in Accumulated other comprehensive income (loss)
Prior service cost (credit)	67				(16		)		(2,376		)		596				7				(2,584		)
Actuarial loss (gain)	7,961				4,665				(833		)		10,430				3,740				(1,196		)
Total recorded in Accumulated other comprehensive income (loss)	$	8,028			$	4,649			$	(3,209	)		$	11,026			$	3,747			$	(3,780	)

(a)	GE Supplementary Pension Plan amendment for the U.S. pension changes announced in October 2019 offset by other plan amendments adopted in 2019.

(b)	Principally associated with discount rate changes offset by impact of the one-time lump sum payments.

(c)	Payments made to former employees from the GE Pension Trust for the one-time lump sum payments.

(d)	The PBO for the GE Supplementary Pension Plan, which is an unfunded plan, was $6,691 million and $6,110 million at year-end 2019 and 2018, respectively.

(e)	Principally associated with discount rate changes.

(f)	Principally due to discount rate changes and favorable cost trends.

(g)	The benefit obligation for retiree health plans was $3,306 million and $3,425 million at December 31, 2019 and 2018, respectively.

(h)

Total unfunded status for principal pension plan, other pension plans and principal retiree benefit plans was $27,773 million and $26,836 million at December 31, 2019 and 2018, respectively. Of these amounts, $14,340 million and $13,292 million at December 31, 2019 and 2018, respectively, related to plans that are not subject to regulatory funding requirements and the benefits for these plans are funded as they become due.

---

ASSUMPTIONS USED IN CALCULATIONS. We determine the discount rate using the weighted-average yields on high-quality fixed-income securities that have maturities consistent with the timing of benefit payments. Lower discount rates increase the size of the benefit obligation and generally increase pension expense in the following year; higher discount rates reduce the size of the benefit obligation and generally reduce subsequent-year pension expense.

The compensation assumption is used to estimate the annual rate at which pay of plan participants will grow. If the rate of growth assumed increases, the size of the pension obligations will increase, as will the amount recorded in Accumulated other comprehensive income (loss) in our consolidated Statement of Financial Position and amortized into earnings in subsequent periods.

The expected return on plan assets is the estimated long-term rate of return that will be earned on the investments used to fund the pension obligations. To determine this rate, we consider the composition of our plan investments, our historical returns earned, and our expectations about the future. Based on our analysis, we have assumed a 6.75% long-term expected return on GE Pension Plan assets for cost recognition in 2019 and 2018. This is a reduction from the 7.50% we assumed in 2017.

The healthcare trend assumptions apply to our pre-65 retiree medical plans. Our post-65 retiree plan has a fixed subsidy and therefore is not subject to healthcare inflation.

We evaluate these assumptions annually. We evaluate other assumptions periodically, such as retirement age, mortality and turnover, and update them as necessary to reflect our actual experience and expectations for the future. Differences between our actual results and what we assumed are recorded in Accumulated other comprehensive income each period. These differences are amortized into earnings over the remaining average future service of active participating employees or the expected life of inactive participants, as applicable.

THE COMPOSITION OF OUR PLAN ASSETS. The fair value of our pension plans' investments is presented below. The inputs and valuation techniques used to measure the fair value of these assets are described in Note 1 and have been applied consistently.

	2019								2018
(In millions)	Principal pension				Other pension				Principal pension				Other pension
Global equity	$	6,826			$	3,484			$	6,015			$	4,323
Debt securities
Fixed income and cash investment funds	4,398				8,089				2,069				6,320
U.S. corporate(a)	8,025				365				8,734				397
Other debt securities(b)	6,076				424				5,264				472
Real estate	2,309				140				2,218				175
Private equities and other investments	23				452				557				369
Total	27,657				12,954				24,857				12,056
Plan assets measured at net asset value
Global equity	14,616				1,450				12,558				1,228
Debt securities	3,744				914				6,400				883
Real estate	1,167				1,930				1,261				1,704
Private equities and other investments	5,449				1,894				4,933				1,666
Total plan assets at fair value	$	52,633			$	19,142			$	50,009			$	17,537

(a)	Primarily represented investment-grade bonds of U.S. issuers from diverse industries.

(b)	Primarily represented investments in residential and commercial mortgage-backed securities, non-U.S. corporate and government bonds and U.S. government, federal agency, state and municipal debt.

GE Pension Plan investments with a fair value of $2,838 million and $2,990 million in 2019 and 2018, respectively, were classified within Level 3 and primarily relate to real estate. The remaining investments were substantially all considered Level 1 and 2. Other pension plans investments with a fair value of $105 million and $116 million in 2019 and 2018, respectively, were classified within Level 3. Principal retiree benefit plan investments with a fair value of $289 million and $362 million at December 31, 2019 and 2018, respectively, comprised global equity and debt securities which are considered Level 1 and 2. There were no Level 3 principal retiree benefit plan investments held in 2019 and 2018. Plan assets that were measured at fair value using NAV as practical expedient were excluded from the fair value hierarchy.

ASSET ALLOCATION OF PENSION PLANS	2019 Target allocation						2019 Actual allocation
	Principal Pension			Other Pension (weighted average)			Principal Pension			Other Pension (weighted average)
Global equity	30.0 - 47.0	%		23	%		41	%		27	%
Debt securities (including cash equivalents)	21.0 - 65.0			55			42			51
Real estate	3.5 - 13.5			9			7			11
Private equities & other investments	6.0 - 16.0			13			10			11

---

Plan fiduciaries of the GE Pension Plan set investment policies and strategies for the GE Pension Trust and oversee its investment allocation, which includes selecting investment managers and setting long-term strategic targets. The primary strategic investment objectives are balancing investment risk and return and monitoring the plan’s liquidity position in order to meet the near-term benefit payment and other cash needs. Target allocation percentages are established at an asset class level by plan fiduciaries. Target allocation ranges are guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range.

GE securities represented 0.6% and 0.5% of the GE Pension Trust assets at December 31, 2019 and 2018, respectively. The GE Pension Plan has a broadly diversified portfolio of investments in equities, fixed income, private equities and real estate; these investments are both U.S. and non-U.S. in nature. The plan utilizes derivatives to implement investment strategies as well as for hedging asset and liability risks. As of December 31, 2019, no sector concentration of assets exceeded 15% of total GE Pension Plan assets.

OUR FUNDING POLICY. Our policy for funding the GE Pension Plan is to contribute amounts sufficient to meet minimum funding requirements under employee benefit and tax laws. We may decide to contribute additional amounts beyond this level. We made contributions of $6,000 million to the GE Pension Plan in 2018. Our 2018 contributions satisfied our minimum ERISA funding requirement of $1,500 million and the remaining $4,500 million was a voluntary contribution to the plan. This voluntary contribution was sufficient to satisfy our minimum ERISA funding requirement for 2019 and 2020. In October 2019, we announced our intent to contribute approximately $4,000 million to $5,000 million to the GE Pension Plan in 2020. We expect this amount to equal our estimated future minimum ERISA funding requirements at least through 2022.

We expect to pay approximately $305 million for benefit payments under our GE Supplementary Pension Plan and administrative expenses of our principal pension plans and expect to contribute approximately $500 million to other pension plans in 2020. We fund retiree health benefits on a pay-as-you-go basis and the retiree life insurance trust at our discretion. We expect to contribute approximately $360 million in 2020 to fund such benefits.

EXPECTED FUTURE BENEFIT PAYMENTS OF OUR BENEFIT PLANS (In millions)	Principal pension				Other pension				Principal retiree benefit
2020	$	3,795			$	1,030			$	495
2021	3,875				1,005				475
2022	3,930				1,015				455
2023	3,965				1,035				435
2024	3,980				1,050				415
2025 - 2029	19,965				5,550				1,775

DEFINED CONTRIBUTION PLAN. We have a defined contribution plan for eligible U.S. employees that provides discretionary contributions. Defined contribution costs were $355 million, $410 million and $460 million for the years ended December 31, 2019, 2018, and 2017, respectively.

COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME
For the years ended December 31	2019										2018										2017
(In millions, pre-tax)	Principal pension			Other pension			Principal retiree benefit				Principal pension			Other pension			Principal retiree benefit				Principal pension			Other pension			Principal retiree benefit
Cost (income) of postretirement benefit plans	$	3,929		$	(21	)	$	(149	)		$	4,260		$	(110	)	$	(79	)		$	3,687		$	364		$	35
Changes in other comprehensive income
Prior service cost (credit) - current year	(42		)	(17		)	(23		)		—			82			—				—			—			(8		)
Actuarial loss (gain) - current year	971			1,252			240				(111		)	464			(543		)		474			(639		)	(128		)
Reclassifications out of AOCI
Curtailment / settlement gain (loss)	(353		)	(12		)	4				(45		)	(2		)	—				(64		)	(20		)	(4		)
Amortization of net actuarial gain (loss)	(3,439		)	(319		)	118				(3,785		)	(312		)	79				(2,812		)	(418		)	80
Amortization of prior service credit (cost)	(135		)	(3		)	232				(143		)	9			230				(290		)	5			171
Total changes in other comprehensive income	(2,998		)	901			571				(4,084		)	241			(234		)		(2,692		)	(1,072		)	111
Cost of postretirement benefit plans and changes in other comprehensive income	$	931		$	880		$	422			$	176		$	131		$	(313	)		$	995		$	(708	)	$	146

---

NOTE 14. CURRENT AND ALL OTHER LIABILITIES

December 31 (In millions)	2019			2018
Sales allowances, equipment projects and other commercial liabilities	$	5,203		$	5,255
Product warranties (Note 23)	1,371			1,346
Employee compensation and benefit liabilities	5,114			5,138
Taxes payable	1,349			503
Environmental, health and safety liabilities (Note 23)	330			204
Due to GE Capital	1,080			1,578
Other	2,385			2,422
Other GE current liabilities	16,833			16,444
Eliminations	(1,080		)	(1,578		)
Consolidated other GE current liabilities	$	15,753		$	14,866
Sales allowances, equipment projects and other commercial liabilities	4,422			5,136
Product warranties (Note 23)	793			846
Uncertain tax positions and related liabilities	2,585			3,404
Alstom legacy legal matters (Note 23)	875			889
Environmental, health and safety liabilities (Note 23)	2,154			1,968
Redeemable noncontrolling interests (Note 16)	439			378
Derivative instruments (Note 21)	171			328
Other	1,349			1,931
GE all other liabilities	$	12,787		$	14,881
Aircraft maintenance reserve, sales deposits and other commercial liabilities	2,900			2,585
Interest payable	1,189			1,458
Uncertain tax positions and other taxes payable	394			1,646
Derivative instruments (Note 21)	31			258
Other	525			1,615
GE Capital other liabilities	$	5,040		$	7,562
Eliminations	(1,244		)	(1,605		)
Consolidated all other liabilities	$	16,583		$	20,839
Total	$	32,336		$	35,705

NOTE 15. INCOME TAXES

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.

Our businesses are subject to regulation under a wide variety of U.S. federal, state and foreign tax laws, regulations and policies. Changes to these laws or regulations may affect our tax liability, return on investments and business operations.

(BENEFIT) PROVISION FOR INCOME TAXES (In millions)	2019			2018			2017
Current tax expense (benefit)	$	2,551		$	1,743		$	2,405
Deferred tax expense (benefit) from temporary differences	(1,242		)	(1,276		)	1,088
Total GE	1,309			467			3,493
Current tax expense (benefit)	(720		)	596			(1,008		)
Deferred tax expense (benefit) from temporary differences	138			(970		)	(5,294		)
Total GE Capital	(582		)	(374		)	(6,302		)
Current tax expense (benefit)	1,831			2,339			1,397
Deferred tax expense (benefit) from temporary differences	(1,104		)	(2,245		)	(4,205		)
Total consolidated	$	726		$	93		$	(2,808	)

CONSOLIDATED EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (In millions)	2019			2018			2017
U.S. earnings	$	506		$	(9,861	)	$	(17,918	)
Non-U.S. earnings	643			(11,126		)	6,573
Total	$	1,149		$	(20,987	)	$	(11,345	)

---

CONSOLIDATED (BENEFIT) PROVISION FOR INCOME TAXES (In millions)	2019			2018			2017
U.S. Federal
Current	$	146		$	1,019		$	(734	)
Deferred	(1,266		)	(3,144		)	(3,625		)
Non - U.S.
Current	2,008			1,132			1,820
Deferred	106			1,197			(429		)
Other	(267		)	(111		)	160
Total	$	726		$	93		$	(2,808	)

INCOME TAXES PAID (RECOVERED) (In millions)	2019			2018			2017
GE	$	2,183		$	1,803		$	2,700
GE Capital	45			65			(264		)
Total(a)	$	2,228		$	1,868		$	2,436

(a) Includes tax payments reported in discontinued operations.

RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO ACTUAL INCOME TAX RATE	Consolidated							GE							GE Capital
	2019		2018		2017			2019		2018		2017			2019		2018		2017
U.S. federal statutory income tax rate	21.0	%	21.0	%	35.0	%		21.0	%	21.0	%	35.0	%		21.0	%	21.0	%	35.0	%
Increase (reduction) in rate resulting from inclusion of after-tax earnings of GE Capital in before-tax earnings of GE	—		—		—			8.8		(0.5	)	(43.2	)		—		—		—
Tax on global activities including exports	91.0		(5.0	)	30.3			86.5		(5.0	)	34.6			8.1		3.2		12.2
U.S. business credits(a)	(22.5	)	2.6		4.3			(9.1	)	0.4		1.5			21.9		120.0		3.2
Goodwill impairments	26.0		(21.5	)	(7.8	)		23.5		(21.4	)	(7.3	)		—		—		(3.8	)
Tax Cuts and Jobs Act enactment	0.2		(0.2	)	(39.8	)		7.9		0.5		(89.6	)		15.2		(36.5	)	3.1
All other – net(b)(c)(d)	(52.5	)	2.7		2.8			(35.6	)	2.8		5.2			23.1		(8.0	)	0.2
	42.2		(21.4	)	(10.2	)		82.0		(23.2	)	(98.8	)		68.3		78.7		14.9
Actual income tax rate	63.2	%	(0.4	)%	24.8	%		103.0	%	(2.2	)%	(63.8	)%		89.3	%	99.7	%	49.9	%

(a)	U.S. general business credits, primarily the credit for energy produced from renewable sources and the credit for research performed in the U.S.

(b)	Included, for each period, the expense or benefit for Other taxes reported above in the consolidated (benefit) provision for income taxes, net of 21.0% federal effect for the years ended December 31, 2019 and 2018 and 35.0% federal effect for the year ended December 31, 2017.

(c)

For the year ended December 31, 2019, included (12.5)% and (11.3)% in consolidated and GE, respectively, related to the disposition of the Digital ServiceMax business. For the year ended December 31, 2018, included 2.8% and 2.8% in consolidated and GE, respectively, related to deductible stock losses. Included in 2017 is 5.6% and 11.7% in consolidated and GE, respectively, related to the disposition of the Water business. Also included in 2017 is (3.1)% and (6.4)% in consolidated and GE, respectively, related to losses on planned dispositions.

(d)	For the year ended December 31, 2019, included (32.9)%, (27.9)% and 3.5% in consolidated, GE and GE Capital, respectively for the resolution of the IRS audit of our consolidated U.S. income tax returns for 2012-2013.

U.S. TAX REFORM. On December 22, 2017, the U.S. enacted legislation commonly known as the Tax Cuts and Jobs Act (U.S. tax reform) that lowered the statutory tax rate on U.S. earnings to 21%, taxes historic foreign earnings at a reduced rate of tax, establishes a territorial tax system and enacts new taxes associated with global operations.

The impact of enactment of U.S. tax reform was recorded in 2017 on a provisional basis as the legislation provided for additional guidance to be issued by the U.S. Department of the Treasury on several provisions including the computation of the transition tax. This amount was adjusted in both 2018 and 2019 based on guidance issued during each of these years. Additional guidance may be issued after 2019 and any resulting effects will be recorded in the quarter of issuance. Additionally, as part of U.S. tax reform, the U.S. has enacted a minimum tax on foreign earnings (global intangible low tax income). We have not made an accrual for the deferred tax aspects of this provision.

---

With the enactment of U.S. tax reform, we recorded, for the year ended December 31, 2017, tax expense of $4,512 million to reflect our provisional estimate of both the transition tax on historic foreign earnings ($1,155 million including $2,925 million at GE and $(1,770) million at GE Capital) and the revaluation of deferred taxes ($3,357 million including $1,980 million at GE and $1,377 million at GE Capital). For the year ended December 31, 2018, we finalized our provisional estimate of the enactment of U.S. tax reform and recorded an additional tax expense of $41 million. For the year ended December 31, 2019, we recorded an additional tax expense of $2 million based on the issuance in January 2019 of final regulations on the transition tax on historic foreign earnings. The cash impact of the transition tax on historic foreign earnings was largely offset by accelerated use of deductions and tax credits and was substantially incurred with the filing of the 2017 tax return with no amount subject to the deferred payment provision provided under law.

UNRECOGNIZED TAX POSITIONS. Annually, we file over 4,100 income tax returns in almost 300 global taxing jurisdictions. We are under examination or engaged in tax litigation in many of these jurisdictions. The Internal Revenue Service (IRS) is currently auditing our consolidated U.S. income tax returns for 2014-2015. In June 2019, the IRS completed the audit of our consolidated U.S. income tax returns for 2012-2013, which resulted in a decrease in our balance of unrecognized tax benefits (i.e., the aggregate tax effect of differences between tax return positions and the benefits recognized in our financial statements). The Company recognized a resulting non-cash continuing operations tax benefit of $378 million plus an additional net interest benefit of $107 million. Of these amounts, GE recorded $355 million of tax benefits and $98 million of net interest benefits and GE Capital recorded $23 million of tax benefits and $9 million of net interest benefits. GE Capital recorded an additional non-cash benefit in discontinued operations of $332 million of tax benefits and $46 million of net interest benefits. See Note 2 for further information. As previously disclosed, the United Kingdom tax authorities disallowed interest deductions claimed by GE Capital for the years 2007-2015 that could result in a potential impact of approximately $1 billion, which includes a possible assessment of tax and reduction of deferred tax assets, not including interest and penalties. We are contesting the disallowance. We comply with all applicable tax laws and judicial doctrines of the United Kingdom and believe that the entire benefit is more likely than not to be sustained on its technical merits. We believe that there are no other jurisdictions in which the outcome of unresolved issues or claims is likely to be material to our results of operations, financial position or cash flows. We further believe that we have made adequate provision for all income tax uncertainties.

The balance of unrecognized tax benefits, the amount of related interest and penalties we have provided and what we believe to be the range of reasonably possible changes in the next 12 months were:

UNRECOGNIZED TAX BENEFITS December 31 (Dollars in millions)	2019			2018
Unrecognized tax benefits	$	4,169		$	5,563
Portion that, if recognized, would reduce tax expense and effective tax rate(a)	2,701			4,265
Accrued interest on unrecognized tax benefits	722			934
Accrued penalties on unrecognized tax benefits	195			182
Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months	0-700			0-1,300
Portion that, if recognized, would reduce tax expense and effective tax rate(a)	0-650			0-1,200

(a) Some portion of such reduction may be reported as discontinued operations.

UNRECOGNIZED TAX BENEFITS RECONCILIATION (In millions)	2019			2018
Balance at January 1	$	5,563		$	5,449
Additions for tax positions of the current year	403			300
Additions for tax positions of prior years	500			945
Reductions for tax positions of prior years(a)	(1,927		)	(905		)
Settlements with tax authorities	(155		)	(64		)
Expiration of the statute of limitations	(214		)	(162		)
Balance at December 31	$	4,169		$	5,563

(a)	For 2019, reductions included $710 million related to the completion of the 2012-2013 IRS audit and $442 million related to the deconsolidation of Baker Hughes.

We classify interest on tax deficiencies as interest expense; we classify income tax penalties as provision for income taxes. For the years ended December 31, 2019, 2018 and 2017, $(93) million, $127 million and $143 million of interest expense (income), respectively, and $20 million, $(7) million and $7 million of tax expense (income) related to penalties, respectively, were recognized in our consolidated Statement of Earnings (Loss).

DEFERRED INCOME TAXES. We have not provided deferred taxes on cumulative net earnings of non-U.S. affiliates and associated companies of approximately $40 billion that have been reinvested indefinitely. Given U.S. tax reform, substantially all of our prior unrepatriated earnings were subject to U.S. tax and accordingly we expect to have the ability to repatriate available non-U.S. cash without additional federal tax cost, and any foreign withholding tax on a repatriation to the U.S. would potentially be partially offset by a U.S. foreign tax credit. However, because most of these earnings have been reinvested in active non-U.S. business operations, as of December 31, 2019, we have not decided to repatriate these earnings to the U.S. It is not practicable to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely.

---

DEFERRED INCOME TAXES December 31 (In millions)	2019			2018
GE	$	12,807		$	14,479
GE Capital	5,124			6,214
Total assets	17,931			20,693
GE	(4,618		)	(4,302		)
GE Capital	(3,424		)	(4,278		)
Eliminations	—			4
Total liabilities	(8,042		)	(8,576		)
Net deferred income tax asset (liability)	$	9,889		$	12,117

COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY) December 31 (In millions)	2019			2018
Principal pension plans	$	4,016		$	3,883
Other non-current compensation and benefits	2,206			2,431
Provision for expenses	1,990			2,208
Intangible assets	1,315			820
Retiree insurance plans	1,023			1,006
Non-U.S. loss carryforwards(a)	602			1,362
U.S. credit carryforwards(b)	74			74
Baker Hughes investment	(1,256		)	721
Contract assets	(1,232		)	(1,781		)
Depreciation	(823		)	(855		)
Other – net(c)	274			307
GE	8,189			10,176
Operating leases	(2,218		)	(2,690		)
Financing leases	(477		)	(599		)
Intangible assets	(10		)	(16		)
Insurance company loss reserves	1,715			1,386
Non-U.S. loss carryforwards(a)	1,274			1,231
U.S. credit carryforwards(b)	785			2,491
Other – net(c)	631			133
GE Capital	1,700			1,936
Eliminations	—			4
Net deferred income tax asset (liability)	$	9,889		$	12,117

(a)

Net of valuation allowances of $4,801 million and $3,799 million for GE and $201 million and $767 million for GE Capital as of December 31, 2019 and 2018, respectively. Of the net deferred tax asset as of December 31, 2019 of $1,876 million, $3 million relates to net operating loss carryforwards that expire in various years ending from December 31, 2020 through December 31, 2022; $193 million relates to net operating losses that expire in various years ending from December 31, 2023 through December 31, 2039 and $1,680 million relates to net operating loss carryforwards that may be carried forward indefinitely.

(b)	Of the net deferred tax asset as of December 31, 2019 of $859 million for U.S. credit carryforwards, $74 million expires in the years ending December 31, 2030 through 2032 and $785 million expires in various years ending from December 31, 2036 through December 31, 2039.

(c) Included valuation allowances related to assets other than non-U.S. loss carryforwards of $1,897 million and $1,002 million for GE and $248 million and $131 million for GE Capital as of December 31, 2019 and 2018, respectively.

---

NOTE 16. SHAREHOLDERS’ EQUITY

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (In millions)	2019				2018				2017
Beginning balance	$	(39	)		$	(102	)		$	674
Other comprehensive income (loss) (OCI) before reclassifications – net of deferred taxes of $32, $41 and $(335)(a)	141				87				(627		)
Reclassifications from OCI – net of deferred taxes of $(11), $(6) and $(81)	(42		)		(23		)		(149		)
Other comprehensive income (loss)	100				64				(776		)
Less OCI attributable to noncontrolling interests	—				—				1
Investment securities ending balance	$	61			$	(39	)		$	(102	)
Beginning balance	$	(6,134	)		$	(4,661	)		$	(6,806	)
OCI before reclassifications – net of deferred taxes of $(98), $29 and $(537)	41				(2,076		)		846
Reclassifications from OCI – net of deferred taxes of $(9), $89 and $(543)(b)	1,234				412				1,333
Other comprehensive income (loss)	1,275				(1,664		)		2,179
Less OCI attributable to noncontrolling interests	(40		)		(192		)		35
Currency translation adjustments ending balance	$	(4,818	)		$	(6,134	)		$	(4,661	)
Beginning balance	$	13			$	62			$	12
OCI before reclassifications – net of deferred taxes of $6, $(26) and $31	(21		)		(149		)		171
Reclassifications from OCI – net of deferred taxes of $2, $4 and $(28)	58				98				(120		)
Other comprehensive income (loss)	37				(51		)		51
Less OCI attributable to noncontrolling interests	2				(2		)		1
Cash flow hedges ending balance	$	49			$	13			$	62
Beginning balance	$	(8,254	)		$	(9,702	)		$	(12,469	)
OCI before reclassifications – net of deferred taxes of $(355), $115 and $32	(1,820		)		71				550
Reclassifications from OCI – net of deferred taxes of $852, $2,610 and $1,111	3,048				1,345				2,232
Other comprehensive income (loss)	1,228				1,416				2,782
Less OCI attributable to noncontrolling interests	(2		)		(32		)		15
Benefit plans ending balance	$	(7,024	)		$	(8,254	)		$	(9,702	)
Accumulated other comprehensive income (loss) at December 31	$	(11,732	)		$	(14,414	)		$	(14,404	)

(a) Included adjustments of $(2,693) million, $1,825 million and $(1,259) million in 2019, 2018 and 2017, respectively, related to insurance liabilities and annuity benefits in our run-off insurance operations to reflect the effects that would have been recognized had the related unrealized investment security gains been realized. See Note 12 for further information.

(b) Currency translation gains and losses included $1,066 million, zero and $483 million in 2019, 2018 and 2017, respectively, in earnings (loss) from discontinued operations, net of taxes.

In 2016, we issued $5,694 million of GE Series D preferred stock, which are callable on January 21, 2021. In addition to Series D, $250 million of existing GE Series A, B and C preferred stock are also outstanding. The total carrying value of GE preferred stock at December 31, 2019 was $5,738 million and will increase to $5,944 million by the respective call dates through periodic accretion. Dividends on GE preferred stock are payable semi-annually in June and December and accretion is recorded on a quarterly basis. Dividends on GE preferred stock totaled $460 million, including cash dividends of $295 million, $447 million, including cash dividends of $295 million, and $436 million, including cash dividends of $295 million, for the years ended December 31, 2019, 2018 and 2017, respectively.

In conjunction with the 2016 exchange of GE Capital preferred stock into GE preferred stock, GE Capital issued preferred stock to GE for which the amount and terms mirrored the GE external preferred stock. In 2018, GE Capital and GE exchanged the existing Series D preferred stock issued to GE for new Series D preferred stock, which is mandatorily convertible into GE Capital Common stock on January 21, 2021. After this conversion, GE Capital will no longer pay preferred dividends to GE. The exchange of GE Capital Series D preferred stock has no impact on the GE Series D preferred stock, which remains callable for $5,694 million on January 21, 2021 or thereafter on dividend payment dates. Additionally, there were no changes to the existing Series A, B or C preferred stock issued to GE.

GE has 50.0 million authorized shares of preferred stock ($1.00 par value), of which 5,939,875, 5,939,875 and 5,939,875 shares are outstanding as of December 31, 2019, 2018 and 2017, respectively. GE’s authorized common stock consists of 13,200 million shares having a par value of $0.06 each, with 11,694 million shares issued. Under our share purchase programs we repurchased shares of 1.1 million, and 19.5 million, for a total of $10 million and $235 million for the years ended 2019 and 2018, respectively.

Noncontrolling interests in equity of consolidated affiliates amounted to $1,545 million and $20,500 million, including zero and $19,239 million attributable to Baker Hughes Class A shareholders at December 31, 2019 and 2018, respectively. See Note 2 for further information related to the Baker Hughes transaction. Net earnings (loss) attributable to noncontrolling interests were $33 million, $203 million and $(47) million in 2019, 2018 and 2017, respectively. Dividends attributable to noncontrolling interests were $(331) million, $(362) million and $(222) million in 2019, 2018 and 2017, respectively.

---

Redeemable noncontrolling interests presented in All other liabilities in our consolidated Statement of Financial Position include common shares issued by our affiliates that are redeemable at the option of the holder of those interests and amounted to $439 million and $378 million as of December 31, 2019 and 2018, respectively. Net earnings (loss) attributable to redeemable noncontrolling interests was $33 million, $(291) million and $(320) million for the years ended December 31, 2019, 2018 and 2017, respectively. On October 2, 2018, we settled the redeemable noncontrolling interest balance associated with three joint ventures with Alstom for a payment amount of $3,105 million in accordance with contractual payment terms.

NOTE 17. SHARE-BASED COMPENSATION 

We grant stock options, restricted stock units and performance share units to employees under the 2007 Long-Term Incentive Plan. Grants made under all plans must be approved by the Management Development and Compensation Committee of GE’s Board of Directors, which is composed entirely of independent directors. We record compensation expense for awards expected to vest over the vesting period. We estimate forfeitures based on experience and adjust expense to reflect actual forfeitures. When options are exercised and restricted stock units vest, we issue shares from treasury stock.

Stock options provide employees the opportunity to purchase GE shares in the future at the market price of our stock on the date the award is granted (the strike price). The options become exercisable over the vesting period (typically three or five years) and expire 10 years from the grant date if not exercised. Restricted stock units (RSU) provide an employee with the right to receive shares of GE stock when the restrictions lapse over the vesting period. Upon vesting, each RSU is converted into GE common stock on a one-for-one basis. Performance share units (PSU) provide an employee with the right to receive shares of GE stock based upon achievement of certain performance or market metrics. Upon vesting (if applicable), each PSU is converted into GE common stock on a one-for-one basis. We value stock options using a Black-Scholes option pricing model, RSUs using market price on grant date, and PSUs using both market price on grant date and a Monte Carlo simulation as needed based on performance metrics.

WEIGHTED AVERAGE GRANT DATE FAIR VALUE		2019			2018			2017
Stock Options		$	3.48		$	3.00		$	3.81
RSUs		10.12			13.96			24.89
PSUs		10.73			4.80			N/A

Key assumptions used in the Black Scholes valuation for stock options include: risk free rates of 2.5%, 2.8%, and 2.3%, dividend yields of 0.4%, 2.3%, and 3.3%, expected volatility of 33%, 32%, and 28%, expected lives of 6.0 years, 5.9 years, and 6.3 years, and strike prices of $10.00, $12.13, and $18.97 for 2019, 2018, and 2017, respectively.

STOCK-BASED COMPENSATION ACTIVITY	Stock Options										RSUs
	Shares (in millions)		Weighted average exercise price			Weighted average contractual term (in years)	Intrinsic value (in millions)				Shares (in millions)		Weighted average grant date fair value			Weighted average contractual term (in years)	Intrinsic value (in millions)
Outstanding at January 1, 2019	466		$	19.59							29		$	18.07
Spin-off adjustment (a)	17		N/A								1		N/A
Granted	34		10.00								16		10.12
Exercised	(7	)	9.36								(15	)	17.04
Forfeited	(11	)	13.66								(3	)	15.40
Expired	(41	)	17.24								N/A		N/A
Outstanding at December 31, 2019	458		$	18.66		4.6	$	185			28		$	13.29		1.4	$	315
Exercisable at December 31, 2019	335		$	21.03		3.1	$	—			N/A		N/A			N/A	N/A
Expected to vest	113		$	12.36		8.5	$	165			26		$	13.45		1.3	$	285

(a)	In connection with the spin-off of GE Transportation and pursuant to the anti-dilution provisions of the 2007 Long Term Incentive Plan, the Company made adjustments to exercise price and the number of shares to preserve the intrinsic value of the awards prior to the separation. The adjustments to the stock-based compensation awards did not result in additional compensation expense.

Total outstanding PSUs at December 31, 2019 were 12 million shares with a weighted average fair value of $7.39. The intrinsic value and weighted average contractual term of PSUs outstanding were $128 million and 2.3 years, respectively.

---

(In millions)	2019			2018			2017
Compensation expense (after-tax)(a)(b)	$	400		$	336		$	241
Cash received from stock options exercised	69			24			528
Intrinsic value of stock options exercised and RSUs vested	154			83			493

(a)	Unrecognized compensation cost related to unvested equity awards as of December 31, 2019 was $515 million, which will be amortized over a weighted average period of 1.1 years.

(b)	Income tax benefit recognized in earnings was $20 million, $40 million and $138 million in 2019, 2018, and 2017, respectively.

NOTE 18. EARNINGS PER SHARE INFORMATION

	2019							2018							2017
(In millions; per-share amounts in dollars)	Diluted			Basic				Diluted			Basic				Diluted			Basic
Earnings (loss) from continuing operations for   per-share calculation	$	416		$	416			$	(20,997	)	$	(20,997	)		$	(8,270	)	$	(8,270	)
Preferred stock dividends	(460		)	(460		)		(447		)	(447		)		(436		)	(436		)
Earnings (loss) from continuing operations attributable to common shareholders for per-share calculation	$	(45	)	$	(45	)		$	(21,445	)	$	(21,445	)		$	(8,706	)	$	(8,706	)
Earnings (loss) from discontinued operations for   per-share calculation	(5,396		)	(5,396		)		(1,372		)	(1,372		)		(251		)	(251		)
Net earnings (loss) attributable to GE common   shareholders for per-share calculation	(5,440		)	(5,440		)		(22,809		)	(22,809		)		(8,944		)	(8,944		)
Shares of GE common stock outstanding	8,724			8,724				8,691			8,691				8,687			8,687
Employee compensation-related shares (including stock options) and warrants(a)	—			—				—			—				—			—
Total average equivalent shares	8,724			8,724				8,691			8,691				8,687			8,687
Earnings (loss) from continuing operations	$	(0.01	)	$	(0.01	)		$	(2.47	)	$	(2.47	)		$	(1.00	)	$	(1.00	)
Earnings (loss) from discontinued operations	(0.62		)	(0.62		)		(0.16		)	(0.16		)		(0.03		)	(0.03		)
Net earnings (loss)	(0.62		)	(0.62		)		(2.62		)	(2.62		)		(1.03		)	(1.03		)
Potentially dilutive securities(a)				450							420							119

(a) All outstanding stock awards are not included in the computation of diluted earnings per share because their effect was antidilutive due to the loss from continuing operations.

Our unvested restricted stock unit awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and, therefore, are included in the computation of earnings per share pursuant to the two-class method. For the years ended December 31, 2019, 2018 and 2017, as a result of excess dividends in respect to the current period earnings, losses were not allocated to the participating securities.

NOTE 19. OTHER INCOME

(In millions)	2019			2018			2017
Purchases and sales of business interests(a)	$	3		$	1,234		$	1,024
Licensing and royalty income	256			218			188
Associated companies	206			21			208
Net interest and investment income(b)	1,220			562			358
Other items	515			282			115
GE	2,200			2,317			1,893
Eliminations	22			4			189
Total	$	2,222		$	2,321		$	2,083

(a)

Included a pre-tax gain of $224 million on the sale of ServiceMax partially offset by charges to the valuation allowance on businesses classified as held for sale of $245 million in 2019. Included pre-tax gains of $737 million on the sale of Distributed Power, $681 million on the sale of Value-Based Care and $267 million on the sale of Industrial Solutions, partially offset by charges to the valuation allowance on businesses classified as held for sale of $554 million in 2018. Included a pre-tax gain of $1,931 million on the sale of our Water business, partially offset by charges to the valuation allowance on businesses classified as held for sale of $1,000 million in 2017. See Note 2 for further information.

(b)	Included unrealized gain of $793 million related to our interest in Baker Hughes in 2019. Included interest income associated with customer advances of $143 million, $136 million and $105 million in 2019, 2018 and 2017, respectively. See Notes 1, 3 and 9.

---

NOTE 20. FAIR VALUE MEASUREMENTS 

RECURRING FAIR VALUE MEASUREMENTS. Our assets and liabilities measured at fair value on a recurring basis include investment securities mainly supporting obligations to annuitants and policyholders in our run-off insurance operations, derivatives, and our remaining equity interest in Baker Hughes.

ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS December 31 (In millions)
	Level 1						Level 2						Level 3(a)						Netting adjustment(d)						Net balance(b)
	2019			2018			2019			2018			2019			2018			2019			2018			2019			2018
Investment securities	$	9,704		$	88		$	33,606		$	29,408		$	5,210		$	4,013		$	—		$	—		$	48,521		$	33,508
Derivatives	—			—			2,561			2,197			11			8			(1,832		)	(2,001		)	740			205
Total assets	$	9,704		$	88		$	36,167		$	31,605		$	5,221		$	4,021		$	(1,832	)	$	(2,001	)	$	49,261		$	33,713
Derivatives	$	—		$	—		$	834		$	1,814		$	19		$	6		$	(651	)	$	(1,234	)	$	202		$	586
Other(c)	—			—			807			722			—			—			—			—			807			722
Total liabilities	$	—		$	—		$	1,641		$	2,535		$	19		$	6		$	(651	)	$	(1,234	)	$	1,009		$	1,308

(a)	Included debt securities classified within Level 3 of $3,977 million of U.S. corporate and $330 million of Government and agencies securities at December 31, 2019, and $3,498 million of U.S. corporate and $292 million of Government and agencies securities at December 31, 2018.

(b)	See Notes 3 and 21 for further information on the composition of our investment securities and derivative portfolios.

(c)	Primarily represents the liabilities associated with certain of our deferred incentive compensation plans.

(d)	The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts include fair value adjustments related to our own and counterparty non-performance risk.

LEVEL 3 INSTRUMENTS. The majority of our Level 3 balances comprised debt securities classified as available-for-sale with changes in fair value recorded in other comprehensive income.

(In millions)	Balance at January 1			Net realized/unrealized gains(losses)(a)			Purchases(b)			Sales & Settlements			Transfers into Level 3			Transfers out of Level 3			Balance at December 31
2019
Investment securities	$	4,013		$	399		$	2,159		$	(1,308	)	$	—		$	(53	)	$	5,210
2018
Investment securities	$	4,109		$	(231	)	$	729		$	(333	)	$	2		$	(262	)	$	4,013

(a)	Primarily included net unrealized gains (losses) of $404 million and $(231) million in other comprehensive income for the years ended December 31, 2019 and December 31, 2018, respectively.

(b)	Included $975 million and $615 million of U.S. corporate debt securities for the years ended December 31, 2019 and 2018, respectively.

NONRECURRING FAIR VALUE MEASUREMENTS. The following table represents fair values (as measured at the time of the adjustment) for those assets remeasured to fair value on a nonrecurring basis during the fiscal year and were still held at December 31, 2019 and 2018.

	Remeasured during the years ended December 31
	2019							2018
(In millions)	Level 2			Level 3				Level 2			Level 3
Financing receivables and financing receivables held for sale	$	—		$	21			$	—		$	47
Equity securities without readily determinable fair value and equity method investments	—			306				479			874
Long-lived assets	12			412				152			422
Goodwill	—			—				—			2,440
Total	$	12		$	739			$	631		$	3,783

---

NOTE 21. FINANCIAL INSTRUMENTS

The following table provides information about assets and liabilities not carried at fair value and excludes finance leases, equity securities without readily determinable fair value and non-financial assets and liabilities. Substantially all of these assets are considered to be Level 3 and the vast majority of our liabilities’ fair value are considered Level 2.

	December 31, 2019							December 31, 2018
(In millions)	Carrying amount (net)			Estimated fair value				Carrying amount (net)			Estimated fair value
Assets
Loans and other receivables	$	4,113		$	4,208			$	8,811		$	8,829
Liabilities
Borrowings (Note 11)	$	90,882		$	97,754			$	103,599		$	100,492
Investment contracts (Note 12)	2,191			2,588				2,388			2,630

Unlike the carrying amount, estimated fair value of borrowings included $1,106 million and $1,324 million of accrued interest at

December 31, 2019 and 2018, respectively.

Assets and liabilities that are reflected in the accompanying financial statements at fair value are not included in the above disclosures; such items include cash and equivalents, investment securities and derivative financial instruments.

 

DERIVATIVES AND HEDGING. Our policy requires that derivatives are used solely for managing risks and not for speculative purposes. Total gross notional was $98,018 million ($55,704 million in GE Capital and $42,314 million in GE) and $117,104 million ($79,082 million in GE Capital and $38,022 million in GE) at December 31, 2019 and 2018, respectively. GE Capital notional relates primarily to managing interest rate and currency risk between financial assets and liabilities, and GE notional relates primarily to managing currency risk.

GE and GE Capital use cash flow hedges primarily to reduce or eliminate the effects of foreign exchange rate changes. In addition, GE Capital uses fair value hedges to hedge the effects of interest rate and currency changes on debt it has issued as well as net investment hedges to hedge investments in foreign operations. Both GE and GE Capital also use derivatives not designated as hedges from an accounting standpoint (and therefore we do not apply hedge accounting to the relationship) but otherwise serve the same economic purpose as other hedging arrangements. We use economic hedges when we have exposures to currency exchange risk for which we are unable to meet the requirements for hedge accounting or when changes in the carrying amount of the hedged item are already recorded in earnings in the same period as the derivative making hedge accounting unnecessary. Even though the derivative is an effective economic hedge, there may be a net effect on earnings in each period due to differences in the timing of earnings recognition between the derivative and the hedged item.

---

The table below provides additional information about how derivatives are reflected in our financial statements. Derivative assets and liabilities are recorded at fair value exclusive of interest earned or owed on interest rate derivatives, which is presented separately in our consolidated Statement of Financial Position. Cash collateral and securities held as collateral represent assets that have been provided by our derivative counterparties as security for amounts they owe us (derivatives that are in an asset position).

	December 31, 2019										December 31, 2018
(In millions)	Gross Notional			All other assets			All other liabilities				Gross Notional			All other assets			All other liabilities
Interest rate contracts	$	23,918		$	1,636		$	11			$	22,904		$	1,335		$	23
Currency exchange contracts	7,044			99			46				7,854			175			114
Derivatives accounted for as hedges	$	30,961		$	1,734		$	57			$	30,758		$	1,511		$	138
Interest rate contracts	$	3,185		$	18		$	12			$	6,198		$	28		$	2
Currency exchange contracts	62,165			697			744				77,544			653			1,472
Other contracts	1,706			123			40				2,604			13			209
Derivatives not accounted for as hedges	$	67,056		$	838		$	796			$	86,346		$	695		$	1,682
Gross derivatives	$	98,018		$	2,572		$	853			$	117,104		$	2,205		$	1,820
Netting and credit adjustments				$	(546	)	$	(546	)					$	(959	)	$	(967	)
Cash collateral adjustments				(1,286		)	(105		)					(1,042		)	(267		)
Net derivatives recognized in Statement of Financial Position				$	740		$	202						$	205		$	586
Net accrued interest				$	182		$	1						$	205		$	1
Securities held as collateral				(469		)	—							(235		)	—
Net amount				$	452		$	203						$	174		$	587

Fair value of derivatives in our consolidated Statement of Financial Position excluded accrued interest. Cash collateral adjustments excluded excess collateral received and posted of $104 million and $603 million at December 31, 2019, respectively, and $3 million and $439 million at December 31, 2018, respectively. Securities held as collateral excluded excess collateral received with a fair value of $27 million and zero at December 31, 2019 and 2018, respectively.

FAIR VALUE HEDGES. We use derivatives to hedge the effects of interest rate and currency exchange rate changes on our borrowings. At December 31, 2019, the cumulative amount of hedging adjustments of $4,234 million (including $2,458 million on discontinued hedging relationships) was included in the carrying amount of the hedged liability of $54,723 million. At December 31, 2018, the cumulative amount of hedging adjustments of $3,255 million (including $2,731 million on discontinued hedging relationships) was included in the carrying amount of the hedged liability of $59,651 million. The cumulative amount of hedging adjustments was primarily recorded in long-term borrowings.

CASH FLOW HEDGES. We use cash flow hedging primarily to reduce or eliminate the effects of foreign exchange rate changes on purchase and sale contracts in our industrial businesses and to convert foreign currency debt that we have issued in our financial services business back to our functional currency. Changes in the fair value of cash flow hedges are recorded in Accumulated other comprehensive income (AOCI) in our consolidated Statement of Financial Position and recorded in earnings in the period in which the hedged transaction occurs. The gain (loss) recognized in AOCI was $25 million, $(154) million and $199 million for the years ended December 31, 2019, 2018 and 2017, respectively. The gain (loss) reclassified from AOCI to earnings was $(60) million, $(102) million and $149 million for the years ended December 31, 2019, 2018 and 2017, respectively. These amounts were primarily related to currency exchange and interest rate contracts.

The total amount in AOCI related to cash flow hedges of forecasted transactions was a $110 million gain at December 31, 2019. We expect to reclassify $16 million of gain to earnings in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions. For the years ended December 31, 2019, 2018 and 2017, we recognized insignificant gains and losses related to hedged forecasted transactions and firm commitments that did not occur by the end of the originally specified period. At December 31, 2019, 2018 and 2017, the maximum term of derivative instruments that hedge forecasted transactions was 13 years, 14 years and 15 years, respectively.

NET INVESTMENT HEDGES. We invest in foreign operations that conduct their financial services activities in currencies other than the U.S. dollar. We hedge the currency risk associated with those investments primarily using non-derivative instruments such as debt denominated in a foreign currency and short-term currency exchange contracts under which we receive U.S. dollars and pay foreign currency. For these hedges, the portion of the fair value changes of the derivatives or debt instruments that relates to changes in spot currency exchange rates is recorded in a separate component of AOCI. The portion of the fair value changes of the derivatives related to differences between spot and forward rates is recorded in earnings each period. The amounts recorded in AOCI affect earnings if the hedged investment is sold, substantially liquidated, or control is lost.

---

The total gain (loss) recognized in AOCI on hedging instruments for the years ended December 31, 2019, 2018 and 2017 was $120 million, $646 million and $(1,852) million, respectively, comprising $(36) million, $162 million and $(277) million on currency exchange contracts and $156 million, $484 million and $(1,575) million on foreign currency debt, respectively. The total gain (loss) excluded from assessment and recognized in earnings was $27 million, $23 million and $19 million for the years ended December 31, 2019, 2018 and 2017, respectively.

The carrying value of foreign currency debt designated as net investment hedges was $9,190 million, $12,458 million and $13,028 at

December 31, 2019, 2018 and 2017 respectively. The total reclassified from AOCI into earnings was $7 million, $(1) million and $125 million for the years ended December 31, 2019, 2018 and 2017, respectively.

EFFECTS OF DERIVATIVES ON EARNINGS. All derivatives are marked to fair value on our balance sheet, whether they are designated in a hedging relationship for accounting purposes or are used as economic hedges. For derivatives not designated as hedging instruments, substantially all of the gain or loss recognized in earnings is offset by either the current period change in value of underlying exposures which is recorded in earnings in the current period or a future period when the recording of the exposures occur.

The table below presents the effect of our derivative financial instruments in the consolidated Statement of Earnings (Loss):

	2019																2018
(In millions)	Revenues			Cost of sales			Interest Expense			SG&A			Other Income				Revenues			Cost of sales			Interest Expense			SG&A			Other Income
Total amounts presented in   the consolidated Statement   of Earnings (Loss)	$	95,214		$	70,029		$	4,227		$	13,949		$	2,222			$	97,012		$	72,818		$	4,766		$	14,643		$	2,321
Total effect of cash flow   hedges	$	5		$	(24	)	$	(37	)	$	(3	)	$	—			$	(53	)	$	(10	)	$	(39	)	$	—		$	—
Hedged items							$	(1,276	)														$	617
Derivatives designated as   hedging instruments							1,229																(724		)
Total effect of fair value   hedges							$	(48	)														$	(107	)
Interest rate contracts	$	(24	)	$	—		$	(50	)	$	—		$	—			$	(72	)	$	—		$	(4	)	$	—		$	—
Currency exchange contracts	180			(35		)	—			(6		)	(59		)		(1,303		)	(520		)	—			—			(47		)
Other	(2		)	—			195			—			1				(1		)	—			(95		)	—			(10		)
Total effect of derivatives   not designated as hedges	$	154		$	(35	)	$	145		$	(6	)	$	(58	)		$	(1,375	)	$	(520	)	$	(99	)	$	—		$	(56	)

COUNTERPARTY CREDIT RISK. Fair values of our derivatives can change significantly from period to period based on, among other factors, market movements and changes in our positions. We manage counterparty credit risk (the risk that counterparties will default and not make payments to us according to the terms of our agreements) on an individual counterparty basis. Where we have agreed to netting of derivative exposures with a counterparty, we net our exposures with that counterparty and apply the value of collateral posted to us to determine the exposure. We actively monitor these net exposures against defined limits and take appropriate actions in response, including requiring additional collateral. Our exposures to counterparties (including accrued interest), net of collateral we held, was $368 million and $95 million at December 31, 2019 and 2018, respectively. Counterparties' exposures to our derivative liability (including accrued interest), net of collateral posted by us, was $159 million and $571 million at December 31, 2019 and 2018, respectively.

NOTE 22. VARIABLE INTEREST ENTITIES

In addition to the three VIEs detailed in Note 4, we have other consolidated VIEs with assets of $2,663 million and $2,321 million, and liabilities of $1,137 million and $1,611 million at December 31 2019 and 2018, respectively. The increase in consolidated VIE assets is primarily due to the formation of the aeroderivative JV described in Note 2. These entities have no features that could expose us to losses that would significantly exceed the difference between the consolidated assets and liabilities. Substantially all the assets of our consolidated VIEs at December 31, 2019 can only be used to settle the liabilities of those VIEs.

---

NOTE 23. COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES AND OTHER LOSS CONTINGENCIES  

COMMITMENTS. The GECAS business within our Capital segment has placed multiple-year orders for various Boeing, Airbus and other aircraft manufacturers with list prices approximating $36,313 million, excluding pre-delivery payments made in advance, (including 366 new aircraft with delivery dates of 16% in 2020, 19% in 2021 and 65% in 2022 through 2026) and secondary orders with airlines for used aircraft of approximately $2,419 million (including 55 used aircraft with delivery dates of 71% in 2020, 20% in 2021 and 9% in 2022) at December 31, 2019. When we purchase aircraft, it is at a contractual price, which is usually less than the aircraft manufacturer’s list price. As of December 31, 2019, we have made $2,934 million of pre-delivery payments to aircraft manufacturers.

GE Capital had total investment commitments of $2,648 million at December 31, 2019. The commitments primarily comprise project financing investments in thermal and wind energy projects of $1,225 million and investments by our run-off insurance operations in investment securities and other assets of $1,394 million, included within these commitments are obligations to make additional investments in unconsolidated VIEs of $217 million and $996 million, respectively. See Note 22 for further information.

As of December 31, 2019, in our Aviation segment, we have committed to provide financing assistance of $2,269 million of future customer acquisitions of aircraft equipped with our engines.    

GUARANTEES. At December 31, 2019, we were committed under the following guarantee arrangements:  

Credit Support. At December 31, 2019, we have provided $1,565 million of credit support on behalf of certain customers or associated companies, predominantly joint ventures and partnerships, using arrangements such as standby letters of credit and performance guarantees. The liability for such credit support was $35 million at December 31, 2019.  

Indemnification Agreements – Continuing Operations. At December 31, 2019, we have $1,611 million of other indemnification commitments, including representations and warranties in sales of businesses or assets, for which we recorded a liability of $192 million. 

Indemnification Agreements – Discontinued Operations. At December 31, 2019, we have provided specific indemnities to buyers of GE Capital’s assets that, in the aggregate, represent a maximum potential claim of $1,032 million with the related reserves of $142 million, which incorporates our evaluation of risk and the likelihood of making payments under the indemnities. The recognized liabilities represent the estimated fair value of the indemnities when issued as adjusted for any subsequent probable and estimable losses. Approximately 44% of these exposures are expected to be resolved within the next year, while substantially all indemnifications are expected to be resolved within the next ten years.

PRODUCT WARRANTIES. We provide for estimated product warranty expenses when we sell the related products. Because warranty estimates are forecasts that are based on the best available information, mostly historical claims experience, claims costs may differ from amounts provided. An analysis of changes in the liability for product warranties follows.  

(In millions)	2019			2018			2017
Balance at January 1	$	2,192		$	2,103		$	1,743
Current-year provisions	713			945			929
Expenditures	(715		)	(788		)	(708		)
Other changes	(26		)	(69		)	139
Balance at December 31	$	2,165		$	2,192		$	2,103

---

LEGAL MATTERS. In the normal course of our business, we are involved from time to time in various arbitrations, class actions, commercial litigation, investigations and other legal, regulatory or governmental actions, including the significant matters described below that could have a material impact on our results of operations. In many proceedings, including the specific matters described below, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the size or range of the possible loss, and accruals for legal matters are not recorded until a loss for a particular matter is considered probable and reasonably estimable. Given the nature of legal matters and the complexities involved, it is often difficult to predict and determine a meaningful estimate of loss or range of loss until we know, among other factors, the particular claims involved, the likelihood of success of our defenses to those claims, the damages or other relief sought, how discovery or other procedural considerations will affect the outcome, the settlement posture of other parties and other factors that may have a material effect on the outcome. For these matters, unless otherwise specified, we do not believe it is possible to provide a meaningful estimate of loss at this time. Moreover, it is not uncommon for legal matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated. 

WMC. During the fourth quarter of 2007, we completed the sale of WMC, our U.S. mortgage business. WMC substantially discontinued all new loan originations by the second quarter of 2007, and was never a loan servicer. In connection with the sale, WMC retained certain representation and warranty obligations related to loans sold to third parties prior to the disposal of the business and contractual obligations to repurchase previously sold loans that had an early payment default. All claims received by WMC for early payment default have either been resolved or are no longer being pursued. The remaining claims that were active during 2019 were brought by securitization trustees or administrators seeking recovery from WMC for alleged breaches of representations and warranties on mortgage loans that serve as collateral for residential mortgage-backed securities (RMBS). These claims were resolved as part of the Chapter 11 bankruptcy case described below.

In January 2019, we announced an agreement in principle with the United States to settle the investigation by the U.S. Department of Justice (DOJ) regarding potential violations of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) by WMC and GE Capital, and in April 2019, the parties entered into a definitive settlement agreement. Under the agreement, which concludes this investigation, GE, without admitting liability or wrongdoing, paid the United States a civil penalty of $1,500 million.

In April 2019, WMC commenced a case under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. WMC subsequently filed a Chapter 11 plan seeking an efficient and orderly resolution of all claims, demands, rights, and/or liabilities to be asserted by or against WMC as the debtor. GE Capital provided approximately $14 million of debtor-in-possession financing to fund administrative expenses associated with the Chapter 11 proceeding. In August 2019, we reached a settlement with WMC to resolve potential claims that WMC may have had against certain GE entities. This settlement was incorporated into and approved as part of the Chapter 11 plan that the Bankruptcy Court approved in November 2019. The Chapter 11 plan also incorporated the resolution of the claims at issue in the previously reported lawsuit that the TMI Trust Company (TMI), as successor to Law Debenture Trust Company of New York, brought against WMC in the United States District Court for the District of Connecticut with respect to approximately $800 million of mortgage loans. The Chapter 11 plan became effective in December 2019, and GE Capital’s membership interests in WMC were extinguished pursuant to the plan. In total, we paid approximately $207 million to WMC in connection with the settlement of potential claims that WMC may have had against us, as discussed above. As of December 31, 2019, we had no further liabilities to WMC. As a condition to the settlement agreement described above, GE Capital provided WMC $39.5 million of exit financing that is secured by other remaining assets of WMC.

Alstom legacy legal matters. On November 2, 2015, we acquired the Thermal, Renewables and Grid businesses from Alstom. Prior to the acquisition, the seller was the subject of two significant cases involving anti-competitive activities and improper payments: (1) in January 2007, Alstom was fined €65 million by the European Commission for participating in a gas insulated switchgear cartel that operated from 1988 to 2004 (that fine was later reduced to €59 million), and (2) in December 2014, Alstom pled guilty in the United States to multiple violations of the Foreign Corrupt Practices Act and paid a criminal penalty of $772 million. As part of GE’s accounting for the acquisition, we established a reserve amounting to $858 million for legal and compliance matters related to the legacy business practices that were the subject of these and related cases in various jurisdictions, including the previously reported legal proceedings in Israel and Slovenia that are described below. The reserve balance was $875 million and $889 million at December 31, 2019 and 2018, respectively.

Regardless of jurisdiction, the allegations relate to claimed anti-competitive conduct or improper payments in the pre-acquisition period as the source of legal violations and/or damages. Given the significant litigation and compliance activity related to these matters and our ongoing efforts to resolve them, it is difficult to assess whether the disbursements will ultimately be consistent with the reserve established. The estimation of this reserve involved significant judgment and may not reflect the full range of uncertainties and unpredictable outcomes inherent in litigation and investigations of this nature, and at this time we are unable to develop a meaningful estimate of the range of reasonably possible additional losses beyond the amount of this reserve. Damages sought may include disgorgement of profits on the underlying business transactions, fines and/or penalties, interest, or other forms of resolution. Factors that can affect the ultimate amount of losses associated with these and related matters include the way cooperation is assessed and valued, prosecutorial discretion in the determination of damages, formulas for determining fines and penalties, the duration and amount of legal and investigative resources applied, political and social influences within each jurisdiction, and tax consequences of any settlements or previous deductions, among other considerations. Actual losses arising from claims in these and related matters could exceed the amount provided.   

---

In September 2013, the Israeli Antitrust Authority issued a decision whereby Alstom, Siemens AG and ABB Ltd. were held liable for an alleged anti-competitive arrangement in the gas-insulated switchgears market in Israel. While there was no fine in connection with that decision, claimants brought civil actions in 2013 seeking damages of approximately $950 million and $600 million, respectively, related to the alleged conduct underlying the decision that are pending before the Central District Court in Israel. The parties have been working to finalize a settlement, which is subject to court approval, and we anticipate a decision from the court in the first half of 2020. 

In connection with alleged improper payments by Alstom relating to contracts won in 2006 and 2008 for work on a state-owned power plant in Šoštanj, Slovenia, the power plant owner in January 2017 filed an arbitration claim for damages of approximately $430 million before the International Chamber of Commerce Court of Arbitration in Vienna, Austria. In February 2017, a government investigation in Slovenia of the same underlying conduct proceeded to an investigative phase overseen by a judge of the Celje District Court.

Shareholder and related lawsuits. Since November 2017, several putative shareholder class actions under the federal securities laws have been filed against GE and certain affiliated individuals and consolidated into a single action currently pending in the U.S. District Court for the Southern District of New York (the Hachem case). In October 2019, the lead plaintiff filed a fifth amended consolidated class action complaint naming as defendants GE and current and former GE executive officers. It alleges violations of Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934 related to insurance reserves and accounting for long-term service agreements and seeks damages on behalf of shareholders who acquired GE stock between February 27, 2013 and January 23, 2018. GE filed a motion to dismiss in December 2019.

Since February 2018, multiple shareholder derivative lawsuits have also been filed against current and former GE executive officers and members of GE’s Board of Directors and GE (as nominal defendant). Two shareholder derivative lawsuits are currently pending: the Bennett case, which was filed in Massachusetts state court, and the Cuker case, which was filed in New York state court. These lawsuits have alleged violations of securities laws, breaches of fiduciary duties, unjust enrichment, waste of corporate assets, abuse of control and gross mismanagement, although the specific matters underlying the allegations in the lawsuits have varied. The allegations in the Bennett case relate to substantially the same facts as those underlying the securities class action described above, and the allegations in the Cuker case relate to alleged corruption in China. The Bennett complaint also includes a claim for professional negligence and accounting malpractice against GE’s auditor, KPMG. The plaintiffs seek unspecified damages and improvements in GE’s corporate governance and internal procedures. The Bennett case has been stayed pending final resolution of another shareholder derivative lawsuit (the Gammel case) that was previously dismissed. In August 2019, the Cuker plaintiffs filed an amended complaint. In September 2019, GE filed a motion to dismiss the amended complaint. 

In June 2018, a lawsuit (the Bezio case) was filed in New York state court derivatively on behalf of participants in GE’s 401(k) plan (the GE Retirement Savings Plan (RSP)), and alternatively as a class action on behalf of shareholders who acquired GE stock between February 26, 2013 and January 24, 2018, alleging violations of Section 11 of the Securities Act of 1933 based on alleged misstatements and omissions related to insurance reserves and performance of GE’s business segments in a GE RSP registration statement and documents incorporated therein by reference. In November 2018, the plaintiffs filed an amended derivative complaint naming as defendants GE, former GE executive officers and Fidelity Management Trust Company, as trustee for the GE RSP. In January 2019, GE filed a motion to dismiss, and in November 2019, the court dismissed the remaining claims and the plaintiffs filed a notice of appeal. In December 2019, the plaintiffs filed a second amended derivative complaint, and in January 2020, GE filed a motion to dismiss.

In July 2018, a putative class action (the Mahar case) was filed in New York state court naming as defendants GE, former GE executive officers, a former member of GE’s Board of Directors and KPMG. It alleged violations of Sections 11, 12 and 15 of the Securities Act of 1933 based on alleged misstatements related to insurance reserves and performance of GE’s business segments in GE Stock Direct Plan registration statements and documents incorporated therein by reference and seeks damages on behalf of shareholders who acquired GE stock between July 20, 2015 and July 19, 2018 through the GE Stock Direct Plan. In February 2019, this case was dismissed. In March 2019, plaintiffs filed an amended derivative complaint naming the same defendants. In April 2019, GE filed a motion to dismiss the amended complaint. In October 2019, the court denied GE's motion to dismiss and stayed the case pending the outcome of the Hachem case. In November 2019, the plaintiffs moved to re-argue to challenge the stay, and GE cross-moved to re-argue the denial of the motion to dismiss and filed a notice of appeal.

  

In October 2018, a putative class action (the Houston case) was filed in New York state court naming as defendants GE, certain GE subsidiaries and current and former GE executive officers and employees. It alleges violations of Sections 11, 12 and 15 of the Securities Act of 1933 and seeks damages on behalf of purchasers of senior notes issued in 2016 and rescission of transactions involving those notes. This case has been stayed pending resolution of the motion to dismiss the Hachem case.

In December 2018, a putative class action (the Varga case) was filed in the U.S. District Court for the Northern District of New York naming GE and a former GE executive officer as defendants in connection with the oversight of the GE RSP. It alleges that the defendants breached fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) by failing to advise GE RSP participants that GE Capital insurance subsidiaries were allegedly under-reserved and continued to retain a GE stock fund as an investment option in the GE RSP. The plaintiffs seek unspecified damages on behalf of a class of GE RSP participants and beneficiaries from January 1, 2010 through January 19, 2018 or later. In April 2019, GE filed a motion to dismiss.

---

In February 2019, two putative class actions (the Birnbaum case and the Sheet Metal Workers Local 17 Trust Funds case) were filed in the U.S. District Court for the Southern District of New York naming as defendants GE and current and former GE executive officers. In April 2019, the court issued an order consolidating these two actions. In June 2019, the lead plaintiff filed an amended consolidated complaint. It alleges violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 based on alleged misstatements regarding GE's H-class turbines and goodwill related to GE's Power business. The lawsuit seeks damages on behalf of shareholders who acquired GE stock between December 4, 2017 and December 6, 2018. In August 2019, the lead plaintiff filed a second amended complaint. In September 2019, GE filed a motion to dismiss the second amended complaint.

In February 2019, a securities action (the Touchstone case) was filed in the U.S. District Court for the Southern District of New York naming as defendants GE and current and former GE executive officers. It alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Section 1707.43 of the Ohio Securities Act and common law fraud based on alleged misstatements regarding insurance reserves, GE Power’s revenue recognition practices related to long term service agreements, GE’s acquisition of Alstom, and the goodwill recognized in connection with that transaction. The lawsuit seeks damages on behalf of six institutional investors who purchased GE common stock between August 1, 2014 and October 30, 2018 and rescission of those purchases. This case has been stayed pending resolution of the motion to dismiss the Hachem case.

As previously reported by Baker Hughes, in March 2019, two derivative lawsuits were filed in the Delaware Court of Chancery naming as defendants GE, directors of Baker Hughes (including former members of GE’s Board of Directors and current and former GE executive officers) and Baker Hughes (as nominal defendant), and the court issued an order consolidating these two actions (the Schippnick case). The complaint as amended in May 2019 alleges, among other things, that GE and the Baker Hughes directors breached their fiduciary duties and that GE was unjustly enriched by entering into transactions and agreements related to GE's sales of approximately 12% of its ownership interest in Baker Hughes in November 2018. The complaint seeks declaratory relief, disgorgement of profits, an award of damages, pre- and post-judgment interest and attorneys’ fees and costs. In May 2019, the plaintiffs voluntarily dismissed their claims against the directors who were members of the Baker Hughes Conflicts Committee and a former Baker Hughes director. In October 2019, the Court denied the remaining defendants’ motions to dismiss, except with respect to the unjust enrichment claim against GE, which has been dismissed. In November 2019, the defendants filed their answer to the complaint, and a special litigation committee of the Baker Hughes Board of Directors moved for an order staying all proceedings in this action pending completion of the committee's investigation of the allegations and claims asserted in the complaint. In December 2019, the court granted a six-month stay.

In August 2019, a putative class action (the Tri-State case) was filed in the Delaware Court of Chancery naming as defendants GE and the former Board of Directors of Baker Hughes Incorporated (BHI). It alleges fraud, aiding and abetting breaches of fiduciary duty, and aiding and abetting breaches of duty of disclosure by GE based on allegations regarding financial statements that GE provided the former BHI board, management and shareholders in connection with BHI’s merger with GE’s Oil and Gas Business in July 2017. The plaintiff seeks damages on behalf of BHI shareholders during the period between October 7, 2016 and July 5, 2017. In October 2019, the City of Providence filed a complaint containing allegations substantially similar to those in the Tri-State complaint. The cases were consolidated in November 2019, and in December 2019, the plaintiffs filed an amended consolidated complaint which is similar to the prior complaints but does not include fraud claims against GE.

These cases are at an early stage; we believe we have defenses to the claims and are responding accordingly.

SEC investigation. In late November 2017, staff of the Boston office of the U.S. Securities & Exchange Commission (SEC) notified us that they are conducting an investigation of GE’s revenue recognition practices and internal controls over financial reporting related to long-term service agreements. Following our investor update in January 2018 about the increase in future policy benefit reserves for GE Capital’s run-off insurance operations, the SEC staff expanded the scope of its investigation to encompass the reserve increase and the process leading to the reserve increase. Following our announcement in October 2018 about the expected non-cash goodwill impairment charge related to GE’s Power business, the SEC expanded the scope of its investigation to include that charge as well. We are providing documents and other information requested by the SEC staff, and we are cooperating with the ongoing investigation. Staff from the DOJ are also investigating these matters, and we are providing them with requested documents and information as well.

Other GE Retirement Savings Plan class actions. Four putative class action lawsuits have been filed regarding the oversight of the GE RSP, and those class actions have been consolidated into a single action in the U.S. District Court for the District of Massachusetts. The consolidated complaint names as defendants GE, GE Asset Management, current and former GE and GE Asset Management executive officers and employees who served on fiduciary bodies responsible for aspects of the GE RSP during the class period. Like similar lawsuits that have been brought against other companies in recent years, this action alleges that the defendants breached their fiduciary duties under ERISA in their oversight of the GE RSP, principally by retaining five proprietary funds that plaintiffs allege were underperforming as investment options for plan participants and by charging higher management fees than some alternative funds. The plaintiffs seek unspecified damages on behalf of a class of GE RSP participants and beneficiaries from September 26, 2011 through the date of any judgment. In August and December 2018, the court issued orders dismissing one count of the complaint and denying GE's motion to dismiss the remaining counts. We believe we have defenses to the claims and are responding accordingly.

---

Bank BPH. As previously reported, GE Capital’s subsidiary Bank BPH, along with other Polish banks, has been subject to ongoing litigation in Poland related to its portfolio of floating rate residential mortgages, with cases brought by individual borrowers seeking relief related to their foreign currency-denominated mortgages in various courts throughout Poland. Approximately 86% of the Bank BPH portfolio is indexed to or denominated in foreign currencies (primarily Swiss francs), and the total portfolio had a carrying value of $2.5 billion at December 31, 2019. In October 2019, the European Court of Justice (ECJ) issued a decision about the approach to remedy in a case involving another Polish bank’s foreign currency loans, and in January 2020, a pending case involving a Bank BPH loan was referred to the ECJ. While there remains significant uncertainty as to how the prior ECJ decision, or a future decision on the Bank BPH case, will influence the Polish courts as they consider individual cases, we are observing an increase in the number of lawsuits brought against Bank BPH and other banks in Poland with similar portfolios that may continue in future reporting periods. We also believe there is a potential for unifying rules of decision to emerge regarding both the finding of liability and approach to remedy that could change our estimate of the potential effects of borrower litigation. Future adverse developments in the potential for legislative relief or in litigation across the Polish banking industry as a result of ECJ decisions or otherwise could result in losses related to these loans in future reporting periods.

ENVIRONMENTAL, HEALTH AND SAFETY MATTERS. Our operations, like operations of other companies engaged in similar businesses, involve the use, disposal and cleanup of substances regulated under environmental protection laws and nuclear decommissioning regulations. Additionally, like many other industrial companies, we and our subsidiaries are defendants in various lawsuits related to alleged worker exposure to asbestos or other hazardous materials. Liabilities for environmental remediation, nuclear decommissioning and worker exposure claims exclude possible insurance recoveries. It is reasonably possible that our exposure will exceed amounts accrued. However, due to uncertainties about the status of laws, regulations, technology and information related to individual sites and lawsuits, such amounts are not reasonably estimable. Total reserves related to environmental remediation, nuclear decommissioning and worker exposure claims were $2,484 million and $2,172 million at December 31, 2019 and 2018, respectively.

As previously reported, in 2000, GE and the Environmental Protection Agency (EPA) entered into a consent decree relating to PCB cleanup of the Housatonic River in Massachusetts. Following EPA’s release in September 2015 of an intended final remediation decision, GE and EPA engaged in mediation and the first step of the dispute resolution process contemplated by the consent decree. In October 2016, the EPA issued its final decision pursuant to the consent decree, which GE and several other interested parties appealed to EPA’s Environmental Appeals Board (EAB). The EAB issued its decision in January 2018, affirming parts of EPA’s decision and granting relief to GE on certain significant elements of its challenge. The EAB remanded the decision back to EPA to address those elements and reissue a revised final remedy, and EPA convened a mediation process with GE and interested stakeholders. In February 2020, EPA announced an agreement between EPA and many of the mediation stakeholders, including GE, concerning a revised Housatonic River remedy. EPA will next propose this remedy for public comment and then finalize a revised remedy. As of December 31, 2019, and based on its assessment of current facts and circumstances and its defenses, GE believes that it has recorded adequate reserves to cover future obligations associated with the proposed final remedy.

Expenditures for site remediation, nuclear decommissioning and worker exposure claims amounted to approximately $236 million, $214 million, and $227 million for the years ended December 31, 2019, 2018, and 2017, respectively. We presently expect that such expenditures will be approximately $350 million and $250 million in 2020 and 2021, respectively.

---

NOTE 24. CASH FLOWS INFORMATION

Changes in operating assets and liabilities are net of acquisitions and dispositions of principal businesses.

Amounts reported in the Proceeds from sales of discontinued operations and Proceeds from principal business dispositions captions in our consolidated Statement of Cash Flows are net of cash transferred and included certain deal-related costs. Amounts reported in the Net cash from (payments for) principal businesses purchased caption are net of cash acquired and included certain deal-related costs and debt assumed and immediately repaid in acquisitions.

GE For the years ended December 31 (In millions)	2019			2018			2017
Increase (decrease) in employee benefit liabilities(a)	$	227		$	587		$	(68	)
Other gains on investing activities	(723		)	(378		)	(138		)
Restructuring and other charges(b)	1,144			2,244			2,781
Restructuring and other cash expenditures	(1,157		)	(1,474		)	(1,484		)
Increase (decrease) in equipment project accruals	(314		)	(939		)	(212		)
Baker Hughes Class B dividends received	282			494			251
Other(c)	613			142			374
All other operating activities	$	72		$	676		$	1,504
Derivative settlements (net)	$	(14	)	$	(947	)	$	(1,016	)
Investments in intangible assets (net)	(30		)	(496		)	(321		)
Other investments (net)(d)	791			726			(1,404		)
Sales of retained ownership interests in Wabtec	3,383			—			—
Other(e)	(455		)	77			(6,698		)
All other investing activities	$	3,675		$	(640	)	$	(9,439	)
Disposition of Baker Hughes noncontrolling interests	$	—		$	4,373		$	308
Acquisition of noncontrolling interests(f)	(28		)	(3,345		)	(135		)
Other(g)	(284		)	79			117
All other financing activities	$	(312	)	$	1,107		$	290
Open market purchases under share repurchase program	$	(10	)	$	(245	)	$	(3,506	)
Other purchases	(47		)	(23		)	(67		)
Dispositions	84			250			1,021
Net dispositions (purchases) of GE shares for treasury	$	29		$	(17	)	$	(2,550	)

(a)	Included non-cash adjustments for stock-based compensation expenses.

(b)	Excluded non-cash adjustments reflected as Depreciation and amortization of property, plant and equipment or Amortization of intangible assets in our consolidated Statement of Cash Flows.

(c)	Included other adjustments to net income, such as write-downs of assets and the impacts of acquisition accounting and changes in other assets and other liabilities classified as operating activities, such as the timing of payments of customer allowances.

(d)	Included the provision of a promissory note to Baker Hughes in 2017 and subsequent principal collections in 2018 and 2019. See Note 2.

(e)	Included net activity related to settlements between our continuing operations and discontinued operations. In 2017, this was primarily driven by funding in order to complete the Baker Hughes acquisition.

(f)	Primarily included the acquisition of Alstom's interest in the grid technology, renewable energy, and global nuclear and French steam power joint ventures for $(3,105) million in the fourth quarter of 2018. See Note 16.

(g)	Primarily included debt tender expenditures of $(255) million incurred to purchase GE long-term debt in 2019.

---

GE CAPITAL For the years ended December 31 (In millions)	2019			2018			2017
Cash collateral and settlements received (paid) on derivative contracts	$	1,263		$	(708	)	$	836
Increase (decrease) in other liabilities	(1,470		)	240			(798		)
Other(a)	811			627			11,076
All other operating activities	$	605		$	158		$	11,114
Increase in loans to customers	$	(15,022	)	$	(30,207	)	$	(45,251	)
Principal collections from customers - loans	18,083			37,237			47,471
Investment in equipment for financing leases	(18		)	(306		)	(585		)
Principal collections from customers - financing leases(b)	—			802			1,011
Sales of financing receivables	345			2,458			251
Net decrease (increase) in GE Capital financing receivables	$	3,389		$	9,986		$	2,897
Purchases of investment securities	$	(6,205	)	$	(5,775	)	$	(2,867	)
Dispositions and maturities of investment securities	4,589			8,309			10,001
Decrease (increase) in other assets - investments	1,347			(4,516		)	(8,497		)
Other(c)	2,886			2,464			4,375
All other investing activities	$	2,617		$	482		$	3,013
Short-term (91 to 365 days)	$	(10,515	)	$	(14,251	)	$	(18,591	)
Long-term (longer than one year)	(991		)	(5,460		)	(2,054		)
Principal payments - non-recourse, leveraged leases	(126		)	(125		)	(362		)
Repayments and other reductions (maturities longer than 90 days)	$	(11,632	)	$	(19,836	)	$	(21,007	)
Redemption of investment contracts	$	(279	)	$	(268	)	$	(344	)
Settlements paid on derivative contracts	(864		)	(2,235		)	(212		)
Other	324			95			276
All other financing activities	$	(819	)	$	(2,408	)	$	(280	)

(a)	Primarily included non-cash adjustments for insurance-related charges recorded in 2019 and 2017.

(b)	In 2019, per ASU No. 2016-02, Leases, principal collections from customers on financing leases is classified as cash from operating activities.

(c)	Primarily included cash related to our current receivables and supply chain finance programs and net activity related to settlements between our continuing operations (primarily our treasury operations) and businesses in discontinued operations.

---

NOTE 25. INTERCOMPANY TRANSACTIONS

Transactions between related companies may include, but are not limited to, the following: GE Capital working capital services to GE, including current receivables and supply chain finance programs; GE Capital finance transactions, including related GE guarantees to GE Capital; GE Capital financing of GE long-term receivables; and aircraft engines, power equipment and renewable energy equipment manufactured by GE that are installed on GE Capital investments, including leased equipment.

In addition to the above transactions that primarily enable growth for the GE businesses, there are routine related party transactions, which include, but are not limited to, the following: expenses related to parent-subsidiary pension plans; buildings and equipment leased between GE and GE Capital, including sale-leaseback transactions; information technology (IT) and other services sold to GE Capital by GE; settlements of tax liabilities; and various investments, loans and allocations of GE corporate overhead costs.

Presented below is a walk of intercompany eliminations from the combined GE and GE Capital totals to the consolidated cash flows.

(In millions)	2019			2018			2017
Combined GE and GE Capital cash from (used for) operating activities - continuing operations	$	6,495		$	2,282		$	13,853
GE current receivables sold to GE Capital	1,081			5			(4,435		)
GE long-term receivables sold to GE Capital	468			1,079			(250		)
Supply chain finance programs(a)	2,289			(18		)	302
GE Capital common dividends to GE	—			—			(4,016		)
Other reclassifications and eliminations	86			(138		)	387
Consolidated cash from (used for) operating activities-continuing operations	$	10,419		$	3,210		$	5,840
Combined GE and GE Capital cash from (used for) investing activities - continuing operations	$	13,509		$	14,915		$	(3,473	)
GE current receivables sold to GE Capital	(1,677		)	(839		)	4,561
GE long-term receivables sold to GE Capital	(468		)	(1,079		)	250
Supply chain finance programs(a)	(2,289		)	18			(302		)
GE Capital loans to GE	—			6,479			7,271
Repayment of GE Capital loans by GE	(1,523		)	—			(1,329		)
Capital contribution from GE to GE Capital	4,000			—			—
Other reclassifications and eliminations	(868		)	(570		)	(251		)
Consolidated cash from (used for) investing activities-continuing operations	$	10,684		$	18,925		$	6,728
Combined GE and GE Capital cash from (used for) financing activities - continuing operations	$	(14,665	)	$	(22,408	)	$	(21,738	)
GE current receivables sold to GE Capital	596			835			(127		)
GE Capital common dividends to GE	—			—			4,016
GE Capital loans to GE	—			(6,479		)	(7,271		)
Repayment of GE Capital loans by GE	1,523			—			1,329
Capital contribution from GE to GE Capital	(4,000		)	—			—
Other reclassifications and eliminations	782			706			(136		)
Consolidated cash from (used for) financing activities-continuing operations	$	(15,764	)	$	(27,345	)	$	(23,927	)

(a)	Represents the reduction of the GE liability associated with the funded participation in a supply chain finance program with GE Capital, primarily as a result of GE Capital's sale of the program platform to MUFG Union Bank, N.A. (MUFG) in 2019.

---

NOTE 26. OPERATING SEGMENTS

BASIS FOR PRESENTATION. Our operating businesses are organized based on the nature of markets and customers. Segment accounting policies are the same as described and referenced in Note 1. Segment results for our financial services businesses reflect the discrete tax effect of transactions.

A description of our operating segments as of December 31, 2019, can be found in the Summary of Operating Segments section within MD&A.

	Years ended December 31
	Total revenues(a)										Intersegment revenues(b)										External revenues
REVENUES (In millions)	2019			2018			2017				2019			2018			2017				2019			2018			2017
Power	$	18,625		$	22,150		$	29,426			$	357		$	152		$	326			$	18,267		$	21,997		$	29,100
Renewable Energy	15,337			14,288			14,321				139			186			242				15,198			14,102			14,080
Aviation	32,875			30,566			27,013				758			375			459				32,117			30,191			26,554
Healthcare	19,942			19,784			19,017				—			—			—				19,942			19,784			19,017
Total industrial segment revenues	86,778			86,789			89,776				1,254			714			1,027				85,524			86,075			88,749
Capital	8,741			9,551			9,070				971			1,384			1,558				7,770			8,167			7,512
Corporate items and eliminations	(305		)	673			433				(2,225		)	(2,097		)	(2,585		)		1,920			2,770			3,018
Total	$	95,214		$	97,012		$	99,279			$	—		$	—		$	—			$	95,214		$	97,012		$	99,279

(a)	Revenues of GE businesses include income from sales of goods and services to customers.

(b)	Sales from one component to another generally are priced at equivalent commercial selling prices.

The equipment and services revenues classification in the table below is consistent with our segment MD&A presentation.

	Years ended December 31
	2019										2018										2017
(In millions)	Equipment			Services			Total				Equipment			Services			Total				Equipment			Services			Total
Power	$	6,247		$	12,378		$	18,625			$	8,077		$	14,073		$	22,150			$	12,909		$	16,517		$	29,426
Renewable Energy	12,267			3,069			15,337				11,419			2,870			14,288				13,969			352			14,321
Aviation	12,804			20,071			32,875				11,499			19,067			30,566				10,215			16,797			27,013
Healthcare	11,585			8,357			19,942				11,422			8,363			19,784				10,771			8,246			19,017
Total industrial segment revenues	$	42,904		$	43,875		$	86,778			$	42,416		$	44,372		$	86,789			$	47,864		$	41,913		$	89,776

SEGMENT REVENUES	Years ended December 31
(In millions)	2019				2018				2017
Gas Power	$	13,122			$	13,296			$17,100
Power Portfolio	5,503				8,853				12,326
Power	$	18,625			$	22,150			$	29,426
Onshore Wind	$	10,421			$	8,220			$	8,055
Grid Solutions equipment and services	4,062				4,772				5,117
Other	855				1,296				1,149
Renewable Energy	$	15,337			$	14,288			$	14,321
Commercial	$	24,217			$	22,724			$	19,709
Military	4,389				4,103				3,991
Systems & Other	4,269				3,740				3,314
Aviation	$	32,875			$	30,566			$	27,013
Healthcare Systems	$	14,648			$	14,886			$	14,460
Life Sciences	5,294				4,898				4,557
Healthcare	$	19,942			$	19,784			$	19,017
Total industrial segment revenues	$	86,778			$	86,789			$	89,776
Capital(a)	8,741				9,551				9,070
Corporate items and eliminations	(305		)		673				433
Consolidated revenues	$	95,214			$	97,012			$	99,279

(a) Substantially all of our revenues at GE Capital are outside of the scope of ASC 606.

Revenues from customers located in the United States were $39,372 million, $39,876 million and $41,468 million for the years ended December 31, 2019, 2018 and 2017, respectively. Revenues from customers located outside the United States were $55,843 million, $57,136 million and $57,811 million for the years ended December 31, 2019, 2018 and 2017, respectively.

---

REMAINING PERFORMANCE OBLIGATION. As of December 31, 2019, the aggregate amount of the contracted revenues allocated to our unsatisfied (or partially unsatisfied) performance obligations was $245,434 million. We expect to recognize revenue as we satisfy our remaining performance obligations as follows: 1) equipment-related remaining performance obligation of $48,487 million of which 58%, 76% and 88% is expected to be recognized within 1, 2 and 5 years, respectively, and the remaining thereafter; and 2) services-related remaining performance obligations of $196,947 million of which 14%, 46%, 72% and 83% is expected to be recognized within 1, 5, 10 and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations.

Total sales of goods and services to agencies of the U.S. Government were 5%, 5% and 4% of GE revenues for the years ended December 31, 2019, 2018 and 2017, respectively. Within our Aviation segment, defense-related sales were 5%, 4% and 4% of GE revenues for the years ended December 31, 2019, 2018 and 2017, respectively.

PROFIT AND EARNINGS For the years ended December 31 (In millions)	2019			2018			2017
Power	$	386		$	(808	)	$	1,894
Renewable Energy	(666		)	292			728
Aviation	6,820			6,466			5,370
Healthcare	3,896			3,698			3,488
Total industrial segment profit	10,436			9,647			11,479
Capital	(530		)	(489		)	(6,765		)
Total segment profit	9,906			9,158			4,714
Corporate items and eliminations	(2,212		)	(2,837		)	(3,798		)
GE goodwill impairments	(1,486		)	(22,136		)	(1,165		)
GE interest and other financial charges	(2,115		)	(2,415		)	(2,538		)
GE non-operating benefit costs	(2,828		)	(2,740		)	(2,409		)
GE provision for income taxes	(1,309		)	(467		)	(3,493		)
Earnings (loss) from continuing operations attributable to GE common shareholders	(44		)	(21,438		)	(8,689		)
Earnings (loss) from discontinued operations, net of taxes	(5,335		)	(1,363		)	(312		)
Less net earnings (loss) attributable to noncontrolling interests, discontinued operations	60			1			(81		)
Earnings (loss) from discontinued operations, net of taxes and noncontrolling interests	(5,395		)	(1,364		)	(231		)
Consolidated net earnings (loss) attributable to GE common shareholders	$	(5,439	)	$	(22,802	)	$	(8,920	)

	Interest and other financial charges										Benefit (provision) for income taxes
For the years ended December 31 (In millions)	2019			2018			2017				2019			2018			2017
Capital	$	2,532		$	2,982		$	3,145			$	582		$	374		$	6,302
Corporate items and eliminations(a)	1,695			1,784			1,510				(1,309		)	(467		)	(3,493		)
Total	$	4,227		$	4,766		$	4,655			$	(726	)	$	(93	)	$	2,808

(a)	Included amounts for Power, Renewable Energy, Aviation and Healthcare, for which our measure of segment profit excludes interest and other financial charges and income taxes.

	Assets										Property, plant and equipment additions(a)										Depreciation and amortization(b)
	At December 31										For the years ended December 31										For the years ended December 31
(In millions)	2019			2018			2017				2019			2018			2017				2019			2018			2017
Power	$	26,731		$	27,389		$	55,827			$	277		$	358		$	1,018			$	880		$	1,307		$	1,228
Renewable Energy	15,935			16,400			18,466				455			303			677				425			474			382
Aviation	41,647			38,021			37,473				1,031			1,070			1,426				1,150			1,042			979
Healthcare	30,514			28,048			28,408				395			378			393				702			832			806
Capital(c)	117,546			119,329			150,805				3,830			4,569			3,680				2,083			2,163			2,342
Corporate items and eliminations(d)	29,565			18,032			10,758				(175		)	(46		)	(64		)		355			763			456
Total continuing	$	261,939		$	247,219		$	301,737			$	5,813		$	6,632		$	7,130			$	5,595		$	6,582		$	6,193

(a)	Additions to property, plant and equipment include amounts relating to principal businesses purchased.

(b)	Included amortization expense related to intangible assets.

(c)	Included Capital deferred income taxes that are presented as assets for purposes of our balance sheet presentation.

(d)	Included GE deferred income taxes that are presented as assets for purposes of our balance sheet presentation.

---

Total assets of Power, Renewable Energy, Aviation, Healthcare, Capital and Corporate at December 31, 2019, include investments in and advances to associated companies of $565 million, $630 million, $2,073 million, $245 million, $2,159 million and $45 million, respectively. Investments in and advances to associated companies contributed approximately $(4) million, $(2) million, $204 million, $19 million, $324 million and $(11) million to pre-tax income for the year ended December 31, 2019 of Power, Renewable Energy, Aviation, Healthcare, Capital and Corporate, respectively.

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

December 31 (In millions)	2019			2018
U.S.	$	144,405		$	126,566
Non-U.S.
Europe	70,565			70,007
Asia	22,089			22,355
Americas	13,435			12,871
Other Global	11,445			15,420
Total Non-U.S.	$	117,534		$	120,653
Total assets (Continuing Operations)	$	261,939		$	247,219

The increase in total continuing assets from December 31, 2018 to December 31, 2019 is primarily due to the deconsolidation of our Baker Hughes segment and classification of our retained interest in Baker Hughes within investment securities, as well as lower sales of receivables and the effect of adopting new leasing standards.

Property, plant and equipment – net associated with operations based in the United States were $11,992 million, $11,868 million and $12,393 million at December 31, 2019, 2018 and 2017, respectively. Property, plant and equipment – net associated with operations based outside the United States were $31,298 million, $31,743 million and $33,576 million at December 31, 2019, 2018 and 2017, respectively.

NOTE 27. GUARANTOR FINANCIAL INFORMATION

GE Capital International Funding Company Unlimited Company (the Issuer) previously issued senior unsecured registered notes that are fully and unconditionally, jointly and severally guaranteed by both the Company and GE Capital International Holdings Limited (each a Guarantor, and together, the Guarantors). The Company is required to provide certain financial information regarding the Issuer and the Guarantors of the registered securities, specifically Condensed Consolidating Statements of Earnings and Comprehensive Income, Condensed Consolidating Statements of Financial Position and Condensed Consolidating Statements of Cash Flows for:

•	General Electric Company (the Parent Company Guarantor) – prepared with investments in subsidiaries accounted for under the equity method of accounting and excluding any inter-segment eliminations;

•	GE Capital International Funding Company Unlimited Company (the Subsidiary Issuer) – finance subsidiary that issued the guaranteed notes for debt;

•	GE Capital International Holdings Limited (GECIHL) (the Subsidiary Guarantor) – prepared with investments in non-guarantor subsidiaries accounted for under the equity method of accounting;

•	Non-Guarantor Subsidiaries – prepared on an aggregated basis excluding any elimination or consolidation adjustments and includes predominantly all non-cash adjustments for cash flows;

•	Consolidating Adjustments – adjusting entries necessary to consolidate the Parent Company Guarantor with the Subsidiary Issuer, the Subsidiary Guarantor and Non-Guarantor Subsidiaries and in the comparative periods, this category includes the impact of new accounting policies adopted as described in Note 1; and

•	Consolidated – prepared on a consolidated basis.

---

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2019
(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales of goods and services	$	28,078		$	—		$	—		$	154,927		$	(95,518	)	$	87,487
GE Capital revenues from services	—			964			64			9,949			(3,250		)	7,728
Total revenues	28,078			964			64			164,876			(98,768		)	95,214
Interest and other financial charges	1,612			980			1,405			1,975			(1,745		)	4,227
Other costs and expenses	32,563			1			—			166,371			(106,876		)	92,059
Total costs and expenses	34,175			981			1,406			168,346			(108,622		)	96,287
Other income	(3,853		)	—			—			30,453			(24,378		)	2,222
Equity in earnings (loss) of affiliates	5,923			—			1,290			75,445			(82,658		)	—
Earnings (loss) from continuing operations before income taxes	(4,028		)	(17		)	(52		)	102,427			(97,182		)	1,149
Benefit (provision) for income taxes	(1,143		)	1			—			(228		)	643			(726		)
Earnings (loss) from continuing operations	(5,170		)	(16		)	(52		)	102,200			(96,539		)	423
Earnings (loss) from discontinued operations, net of taxes	192			—			59			—			(5,585		)	(5,335		)
Net earnings (loss)	(4,979		)	(16		)	7			102,200			(102,124		)	(4,912		)
Less net earnings (loss) attributable to noncontrolling interests	—			—			—			7			59			66
Net earnings (loss) attributable to the Company	(4,979		)	(16		)	7			102,192			(102,184		)	(4,979		)
Other comprehensive income	2,681			—			(1,022		)	2,280			(1,258		)	2,681
Comprehensive income (loss) attributable to the Company	$	(2,297	)	$	(16	)	$	(1,015	)	$	104,472		$	(103,441	)	$	(2,297	)

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2018
(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales of goods and services	$	34,972		$	—		$	—		$	164,691		$	(110,723	)	$	88,940
GE Capital revenues from services	—			917			1,038			9,531			(3,414		)	8,072
Total revenues	34,972			917			1,038			174,222			(114,136		)	97,012
Interest and other financial charges	1,728			911			2,560			2,459			(2,893		)	4,766
Other costs and expenses	47,471			—			1			186,262			(118,180		)	115,554
Total costs and expenses	49,199			911			2,561			188,721			(121,073		)	120,320
Other income	3,910			—			—			29,268			(30,857		)	2,321
Equity in earnings (loss) of affiliates	(11,404		)	—			1,554			240,036			(230,186		)	—
Earnings (loss) from continuing operations before income taxes	(21,721		)	6			31			254,803			(254,106		)	(20,987		)
Benefit (provision) for income taxes	1,092			5			—			(2,381		)	1,191			(93		)
Earnings (loss) from continuing operations	(20,629		)	11			31			252,422			(252,915		)	(21,080		)
Earnings (loss) from discontinued operations, net of taxes	(1,726		)	—			(39		)	—			401			(1,363		)
Net earnings (loss)	(22,355		)	11			(8		)	252,422			(252,514		)	(22,443		)
Less net earnings (loss) attributable to noncontrolling interests	—			—			—			(204		)	116			(89		)
Net earnings (loss) attributable to the Company	(22,355		)	11			(8		)	252,627			(252,629		)	(22,355		)
Other comprehensive income	(10		)	—			(82		)	(2,840		)	2,922			(10		)
Comprehensive income (loss) attributable to the Company	$	(22,364	)	$	11		$	(90	)	$	249,786		$	(249,707	)	$	(22,364	)

---

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2017
(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Sales of goods and services	$	35,551		$	—		$	—		$	161,172		$	(104,782	)	$	91,942
GE Capital revenues from services	—			703			800			9,888			(4,053		)	7,337
Total revenues	35,551			703			800			171,060			(108,835		)	99,279
Interest and other financial charges	1,644			652			2,006			3,343			(2,990		)	4,655
Other costs and expenses	38,765			—			18			177,223			(107,954		)	108,052
Total costs and expenses	40,409			653			2,023			180,566			(110,943		)	112,707
Other income	(959		)	—			—			75,291			(72,249		)	2,083
Equity in earnings (loss) of affiliates	553			—			1,938			109,521			(112,012		)	—
Earnings (loss) from continuing operations before income taxes	(5,263		)	50			714			175,307			(182,152		)	(11,345		)
Benefit (provision) for income taxes	(2,896		)	(5		)	115			5,877			(282		)	2,808
Earnings (loss) from continuing operations	(8,159		)	45			829			181,184			(182,435		)	(8,536		)
Earnings (loss) from discontinued operations, net of taxes	(325		)	—			41			4			(32		)	(312		)
Net earnings (loss)	(8,484		)	45			870			181,187			(182,467		)	(8,849		)
Less net earnings (loss) attributable to noncontrolling interests	—			—			—			(137		)	(228		)	(365		)
Net earnings (loss) attributable to the Company	(8,484		)	45			870			181,324			(182,239		)	(8,484		)
Other comprehensive income	4,184			—			567			(7,552		)	6,985			4,184
Comprehensive income (loss) attributable to the Company	$	(4,300	)	$	45		$	1,436		$	173,773		$	(175,254	)	$	(4,300	)

CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2019
(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Cash, cash equivalents and restricted cash	$	10,591		$	—		$	—		$	26,438		$	(636	)	$	36,394
Receivables - net	47,170			17,726			230			61,026			(99,104		)	27,047
Investment in subsidiaries	147,397			—			40,408			421,613			(609,418		)	—
All other assets	28,377			236			—			291,995			(118,000		)	202,607
Total assets	$	233,535		$	17,961		$	40,638		$	801,071		$	(827,158	)	$	266,048
Short-term borrowings	$	135,172		$	—		$	2,981		$	9,712		$	(125,792	)	$	22,072
Long-term and non-recourse borrowings	40,660			16,771			24,417			34,262			(47,301		)	68,809
All other liabilities	66,808			161			70			146,972			(68,705		)	145,306
Total liabilities	242,640			16,932			27,468			190,946			(241,799		)	236,187
Total liabilities and equity	$	233,535		$	17,961		$	40,638		$	801,071		$	(827,158	)	$	266,048

---

CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2018
(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Cash, cash equivalents and restricted cash	$	9,561		$	—		$	—		$	25,975		$	(4,412	)	$	31,124
Receivables - net	30,466			17,467			2,792			69,268			(90,504		)	29,488
Investment in subsidiaries	176,239			—			45,832			733,535			(955,605		)	—
All other assets	29,615			12			—			359,063			(138,230		)	250,460
Total assets	$	245,881		$	17,479		$	48,623		$	1,187,841		$	(1,188,751	)	$	311,072
Short-term borrowings	$	150,426		$	—		$	9,854		$	9,649		$	(157,153	)	$	12,776
Long-term and non-recourse borrowings	59,800			16,115			24,341			41,066			(50,498		)	90,824
All other liabilities	43,872			336			245			153,160			(41,622		)	155,992
Total liabilities	254,098			16,452			34,439			203,875			(249,273		)	259,591
Total liabilities and equity	$	245,881		$	17,479		$	48,623		$	1,187,841		$	(1,188,751	)	$	311,072

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2019
(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Cash from (used for) operating activities(a)	$	5,526		$	137		$	(1,685	)	$	33,515		$	(28,721	)	$	8,772
Cash from (used for) investing activities	32,210			(137		)	6,223			400,190			(429,548		)	8,939
Cash from (used for) financing activities	(36,706		)	—			(4,538		)	(436,933		)	462,045			(16,133		)
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	—			—			—			(50		)	—			(50		)
Increase (decrease) in cash, cash equivalents and restricted cash	1,030			—			—			(3,277		)	3,776			1,529
Cash, cash equivalents and restricted cash at beginning of year	9,561			—			—			30,399			(4,412		)	35,548
Cash, cash equivalents and restricted cash at end of year	10,591			—			—			27,121			(636		)	37,077
Less cash, cash equivalents and restricted cash of discontinued operations at end of year	—			—			—			638			—			638
Cash, cash equivalents and restricted cash of continuing operations at end of year	$	10,591		$	—		$	—		$	26,484		$	(636	)	$	36,439

(a)	Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $(1,282) million.

---

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2018
(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Cash from (used for) operating activities(a)	$	42,950		$	(387	)	$	34,361		$	328,029		$	(399,976	)	$	4,978
Cash from (used for) investing activities	1,292			457			27,415			(297,621		)	286,736			18,280
Cash from (used for) financing activities	(38,154		)	(70		)	(61,779		)	(48,782		)	116,979			(31,807		)
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	—			—			—			(628		)	—			(628		)
Increase (decrease) in cash, cash equivalents and restricted cash	6,089			—			(3		)	(19,002		)	3,739			(9,176		)
Cash, cash equivalents and restricted cash at beginning of year	3,472			—			3			49,400			(8,151		)	44,724
Cash, cash equivalents and restricted cash at end of year	9,561			—			—			30,399			(4,412		)	35,548
Less cash, cash equivalents and restricted cash of discontinued operations at end of year	—			—			—			4,424			—			4,424
Cash, cash equivalents and restricted cash of continuing operations at end of year	$	9,561		$	—		$	—		$	25,975		$	(4,412	)	$	31,124

(a)	Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $1,991 million.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2017
(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Cash from (used for) operating activities(a)	$	(29,441	)	$	52		$	4,305		$	149,385		$	(117,747	)	$	6,554
Cash from (used for) investing activities	(4,432		)	(52		)	(1,871		)	(222,298		)	234,032			5,379
Cash from (used for) financing activities	34,616			—			(2,473		)	70,782			(121,410		)	(18,484		)
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	—			—			—			891			—			891
Increase (decrease) in cash, cash equivalents and restricted cash	743			—			(39		)	(1,239		)	(5,125		)	(5,659		)
Cash, cash equivalents and restricted cash at beginning of year	2,729			—			41			50,640			(3,026		)	50,384
Cash, cash equivalents and restricted cash at end of year	3,472			—			3			49,400			(8,151		)	44,724
Less cash, cash equivalents and restricted cash of discontinued operations at end of year	—			—			—			7,901			—			7,901
Cash, cash equivalents and restricted cash of continuing operations at end of year	$	3,472		$	—		$	3		$	41,499		$	(8,151	)	$	36,823

(a)	Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $239 million.

NOTE 28. BAKER HUGHES SUMMARIZED FINANCIAL INFORMATION

In September 2019, we deconsolidated our Baker Hughes segment and elected to account for our remaining interest in Baker Hughes (comprising 377.4 million shares and a promissory note receivable) at fair value. At December 31, 2019, the fair value of our interest in Baker Hughes was $9,888 million. Since the date of deconsolidation, we have not sold any shares of Baker Hughes and recognized an unrealized gain of $793 million for the period ended December 31, 2019 based on a share price of $25.63. See Notes 2 and 3 for further information.

---

Summarized financial information of Baker Hughes from the date of deconsolidation is as follows.

From September 16 to December 31, 2019 (In millions)
Revenues	$	7,751
Gross Profit	1,558
Net income (loss)	120
Net income (loss) attributable to the entity	60

December 31, 2019 (In millions)
Current	$	15,222
Noncurrent	38,147
Total assets	$	53,369
Current	$	10,014
Noncurrent	8,857
Total liabilities	$	18,871
Noncontrolling interests	$	12,570

Baker Hughes is a SEC registrant with separate filing requirements, and its financial information can be obtained from www.sec.gov or www.bakerhughes.com.

NOTE 29. QUARTERLY INFORMATION (UNAUDITED)

	First quarter							Second quarter							Third quarter							Fourth quarter
(In millions; per-share amounts in dollars)	2019			2018				2019			2018				2019			2018				2019			2018
Consolidated operations
Earnings (loss) from continuing operations	$	983		$	446			$	(115	)	$	791			$	(1,290	)	$	(23,014	)		$	845		$	697
Earnings (loss) from discontinued operations	2,663			(1,559		)		219			(122		)		(8,093		)	155				(123		)	163
Net earnings (loss)	3,645			(1,113		)		104			669				(9,383		)	(22,859		)		721			860
Less net earnings (loss) attributable to noncontrolling interests	57			34				(23		)	(132		)		40			(90		)		(7		)	99
Net earnings (loss) attributable to the Company	$	3,588		$	(1,147	)		$	127		$	800			$	(9,423	)	$	(22,769	)		$	728		$	761
Per-share amounts – earnings (loss) from continuing operations
Diluted earnings (loss) per share	$	0.10		$	0.03			$	(0.03	)	$	0.08			$	(0.15	)	$	(2.64	)		$	0.07		$	0.06
Basic earnings (loss) per share	0.10			0.03				(0.03		)	0.08				(0.15		)	(2.64		)		0.08			0.06
Per-share amounts – earnings (loss) from discontinued operations
Diluted earnings (loss) per share	0.30			(0.17		)		0.03			(0.01		)		(0.93		)	0.02				(0.02		)	0.01
Basic earnings (loss) per share	0.30			(0.17		)		0.03			(0.01		)		(0.93		)	0.02				(0.01		)	0.01
Per-share amounts – net earnings (loss)
Diluted earnings (loss) per share	0.40			(0.14		)		(0.01		)	0.07				(1.08		)	(2.62		)		0.06			0.07
Basic earnings (loss) per share	0.41			(0.14		)		(0.01		)	0.07				(1.08		)	(2.62		)		0.06			0.07
Dividends declared	0.01			0.12				0.01			0.12				0.01			0.12				0.01			0.01
Selected data
GE
Sales of goods and services	$	20,324		$	21,138			$	21,416		$	22,190			$	21,519		$	21,273			$	24,460		$	24,437
Gross profit from sales	4,494			4,879				4,500			5,100				4,660			3,924				5,780			4,261
GE Capital
Total revenues	2,227			2,173				2,321			2,429				2,097			2,473				2,096			2,476
Earnings (loss) from continuing operations   attributable to the Company	175			(179		)		99			(22		)		(603		)	58				259			101

For GE, gross profit from sales is sales of goods and services less costs of goods and services sold.

Earnings-per-share amounts are computed independently each quarter for earnings (loss) from continuing operations, earnings (loss) from discontinued operations and net earnings (loss). As a result, the sum of each quarter’s per-share amount may not equal the total per-share amount for the respective year; and the sum of per-share amounts from continuing operations and discontinued operations may not equal the total per-share amounts for net earnings (loss) for the respective quarters.

---

•

our success in executing and completing, including obtaining regulatory approvals and satisfying other closing conditions for, announced GE Industrial and GE Capital business or asset dispositions or other transactions, including the planned sale of our BioPharma business within our Healthcare segment and plan to exit our equity ownership position in Baker Hughes, the timing of closing for those transactions and the expected proceeds and benefits to GE;

•	our de-leveraging and capital allocation plans, including with respect to actions to reduce our indebtedness, the timing and amount of GE dividends, organic investments, and other priorities;

•	further downgrades of our current short- and long-term credit ratings or ratings outlooks, or changes in rating application or methodology, and the related impact on our liquidity, funding profile, costs and competitive position;

•	GE’s liquidity and the amount and timing of our GE Industrial cash flows and earnings, which may be impacted by customer, competitive, contractual and other dynamics and conditions;

•

GE Capital's capital and liquidity needs, including in connection with GE Capital’s run-off insurance operations and discontinued operations; the amount and timing of required capital contributions to the insurance operations and strategic actions that we may pursue; the impact of conditions in the financial and credit markets on GE Capital's ability to sell financial assets; the availability and cost of funding; and GE Capital's exposure to particular counterparties and markets;

•	global economic trends, competition and geopolitical risks, including changes in the rates of investment or economic growth in key markets we serve, or an escalation of trade tensions such as those between the U.S. and China;

•	changes in macroeconomic and market conditions, particularly interest rates as it relates to our pension and run-off insurance liabilities, as well as the value of stocks and other financial assets (including our equity ownership positions in Baker Hughes), oil and other commodity prices and exchange rates;

•

market developments or customer actions that may affect levels of demand and the financial performance of the major industries and customers we serve, such as secular, cyclical and competitive pressures in our Power business, pricing and other pressures in the renewable energy market, levels of demand for air travel and other customer dynamics such as early aircraft retirements, conditions in key geographic markets and other shifts in the competitive landscape for our products and services;

•	the length and severity of the recent coronavirus outbreak, including its impacts across our businesses on demand, operations in China and our global supply chains;

•	operational execution by our businesses, including our ability to improve the operations and execution of our Power and Renewable Energy businesses, and the continued strength of our Aviation business;

•	changes in law, regulation or policy that may affect our businesses, such as trade policy and tariffs, regulation related to climate change and the effects of U.S. tax reform and other tax law changes;

•	our decisions about investments in new products, services and platforms, and our ability to launch new products in a cost-effective manner;

•	our ability to increase margins through implementation of operational changes, restructuring and other cost reduction measures;

•	the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of Alstom, SEC and other investigative and legal proceedings;

•	the impact of actual or potential failures of our products or third-party products with which our products are integrated, such as the fleet grounding of the Boeing 737 MAX and the timing of its return to service, and related reputational effects;

•	the impact of potential information technology, cybersecurity or data security breaches; and

•	the other factors that are described in "Risk Factors" in this form 10-K report.

---

---

---

---

---

(a)	Incorporated by reference to “Compensation” in the 2020 Proxy Statement.

(b)	Incorporated by reference to “Stock Ownership Information” in the 2020 Proxy Statement.

(c)	Incorporated by reference to “Related Person Transactions” and “How We Assess Director Independence” in the 2020 Proxy Statement.

(d)	Incorporated by reference to “Independent Auditor Information” in the 2020 Proxy Statement.

---