EX-99 2 exhibit99.htm EXHIBIT 99 exhibit99.htm
 
­­­
Exhibit 99
PRESS RELEASE
GE Reports 1Q’14 Operating EPS $0.33
Industrial Organic Revenues +8%
1Q Operating Margins Up 50 Basis Points
Backlog of $245B
Reaffirms 2014 Framework


1Q Highlights
·  
1Q operating EPS $0.33,  down 15%; +9% excluding 2013 NBCU impact and restructuring and other charges
ü  
Industrial segment profit +12%
·  
Industrial segment organic revenues +8%
ü  
Growth market revenues +7%
·  
1Q margins +50 bps vs. 1Q’13
ü  
$254 million reduction in Industrial structural costs in 1Q
·  
Cash generation of $1.7 billion, including $500 million dividend from GECC
·  
GE Capital earnings flat, with ENI (excluding cash and equivalents) at $374 billion, down 7%
ü  
GECC Tier 1 common ratio (Basel 1) at 11.4%, +32 bps


FAIRFIELD, Conn. – April 17, 2014 – GE [NYSE: GE] announced today first-quarter 2014 operating earnings of $3.3 billion, with operating earnings per share of $0.33, down 15% from the first quarter of 2013.  Excluding the 2013 NBCUniversal impact and restructuring and other charges, operating EPS was up 9% from the year-ago period.  GAAP earnings from continuing operations were $3.0 billion, with earnings per share of $0.29, down 17%.  Revenues were $34.2 billion for the quarter, down 2% from the year-ago period.

“We had strong results in the first quarter in most of our markets, including Power & Water, Aviation, Oil & Gas, and GE Capital,” said GE Chairman and CEO Jeff Immelt.  “The environment was generally positive, and we executed on our operational priorities with strong organic growth, margin enhancement, and solid cash generation.”

Industrial segment profits rose 12% to $3.3 billion.  Industrial segment margins improved 50 basis points over the prior-year period.  Industrial segment revenues grew 8%, with organic growth of 8%.  Growth market revenues were up 7% for the quarter, with double-digit growth in five of nine growth regions.  Services revenues grew 3%, with double-digit growth in Aviation and Oil & Gas.  Equipment revenues grew 12%, on strong new product introductions and solid share positions.  The breadth of the GE portfolio was reflected in the quarter as the Company offset market volatility in Appliances, Healthcare, and Mining.

Infrastructure orders for the quarter were $23.7 billion, flat with the year-ago period.  GE’s backlog of equipment and services at the end of the quarter was $245 billion, with increases in every segment over the year-ago period.  During the quarter, Transnet placed an order for 233 advanced Evolution Series locomotives, valued at approximately $0.7 billion, and Air France-KLM announced the selection of GEnx engines, valued at $1.7 billion at list price, for 37 Boeing 787 Dreamliners.  GE also unveiled the world’s largest and most efficient gas turbines, the 9HA and 7HA, with combined cycle efficiencies better than 61%.

GE Capital earnings were flat, with ENI (excluding cash and equivalents) at $374 billion at quarter-end, down $7 billion from last quarter.  General Electric Capital Corporation’s (GECC) estimated Tier 1 common ratio (Basel 1) rose 32 basis points to 11.4%, and net interest margin was strong at 4.9%.  During the quarter, GECC paid $500 million in dividends to the parent.  Also during the quarter, GE filed a registration statement with the SEC for the IPO of its North American Retail Finance business, the first step in a planned, staged exit from that business.

The Company made good progress in accelerating efforts to achieve its simplification goals.  GE is on track to achieve its goal of $1 billion or more in structural cost-out for the year.  Industrial structural costs in the first quarter were down $254 million versus the prior-year period, driven by simplification initiatives and benefits from restructuring investments.

Cash from operating activities (CFOA) was $1.7 billion.  GE ended the quarter with $87 billion of consolidated cash and cash equivalents.  The Company returned $3.4 billion to shareowners in the first quarter, including $2.2 billion of dividends and $1.2 billion of stock buyback.  GE also announced $2 billion of acquisitions during the quarter in Oil & Gas and Healthcare.

Immelt concluded, “We’re off to a good start to the year, and our 2014 framework remains unchanged.  The environment is consistent with our expectations, with a positive bias.  The GE team is executing with strong organic growth, consistent margin enhancement, cash growth with disciplined allocation, and a stronger GE Capital.  We are on track for our Retail Finance IPO and remain committed to a GE that has 70% of our earnings from the Industrial businesses.  GE is in good shape.”


First-quarter Highlights:

First-quarter operating earnings were $3.3 billion, down 18% from first-quarter 2013, and operating EPS was $0.33, down 15%.  GAAP earnings from continuing operations (attributable to GE) were $3.0 billion, down 18%, or $0.29 per share, down 17% from the first quarter of 2013.

Including the effects of discontinued operations, first-quarter net earnings attributable to GE were $3.0 billion ($0.30 per share) in the first quarter of 2014 compared with $3.5 billion ($0.34 per share) in the first quarter of 2013.

First-quarter revenues decreased 2% to $34.2 billion.  Industrial sales of $24 billion increased 8% compared to the first quarter of 2013.  GECC revenues of $10.5 billion decreased 8% from last year.
 
 
(1)
 
 
 
Cash generated from GE operating activities in the first quarter of 2014 totaled $1.7 billion.  Cash generated from Industrial operating activities totaled $1.2 billion.

The accompanying tables include information integral to assessing the Company’s financial position, operating performance and cash flow.

GE will discuss preliminary first-quarter results on a webcast at 8:30 a.m. ET today, available at www.ge.com/investor.  Related charts are now posted on our website for your review prior to the call.

*   *   *
About GE
GE (NYSE: GE) works on things that matter.  The best people and the best technologies taking on the toughest challenges.  Finding solutions in energy, health and home, transportation and finance.  Building, powering, moving and curing the world.  Not just imagining.  Doing.  GE works.  For more information, visit the company's website at www.ge.com.

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

Caution Concerning Forward-Looking Statements:
This document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and
 
financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; potential market disruptions or other impacts arising in the United States or Europe from developments in sovereign debt situations; the impact of conditions in the financial and credit markets on the availability and cost of General Electric Capital Corporation’s (GECC) funding and on our ability to reduce GECC’s asset levels as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; pending and future mortgage securitization claims and litigation in connection with WMC, which may affect our estimates of liability, including possible loss estimates; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flows and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; GECC’s ability to pay dividends to GE at the planned level; our ability to convert pre-order commitments/wins into orders; the price we realize on orders since commitments/wins are stated at list prices; the level of demand and financial performance of the major industries we serve, including, without limitation, air and rail transportation, energy generation, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation; our capital allocation plans, as such plans may change including with respect to the timing and size of share repurchases, acquisitions, joint ventures, dispositions and other strategic actions; our success in completing announced transactions and integrating acquired businesses; our ability to complete the staged exit from our North American Retail Finance business as planned; the impact of potential information technology or data security breaches; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

Investor Contact:
Matt Cribbins, 203.373.2424
matthewg.cribbins@ge.com

Media Contact:
Seth Martin, 203.572.3567
seth.martin@ge.com

 
 
(2)
 
 
 
GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
(unaudited)
                                         
Financial
   
Consolidated
   
GE(a)
 
Services (GECC)
Three Months Ended March 31
   
2014 
   
2013 
   
V%
     
2014 
   
2013 
   
V%
   
2014 
   
2013 
   
V%
Revenues and other income
                                                       
Sales of goods and services
 
$
23,850 
 
$
22,187 
   
7%
   
$
24,011 
 
$
22,303 
   
8%
 
$
27 
 
$
26 
   
4%
Other income
   
196 
   
1,615 
           
161 
   
1,620 
         
– 
   
– 
     
GECC earnings from continuing operations
   
– 
   
– 
           
1,933 
   
1,938 
         
– 
   
– 
     
GECC revenues from services
   
10,132 
   
11,141 
           
– 
   
– 
         
10,488 
   
11,442 
     
   Total revenues and other income
   
34,178 
   
34,943 
   
(2)%
     
26,105 
   
25,861 
   
1%
   
10,515 
   
11,468 
   
(8)%
                                                         
Costs and expenses
                                                       
Cost of sales, operating and administrative
                                                       
   expenses
   
26,718 
   
26,081 
           
22,493 
   
21,493 
         
4,599 
   
4,907 
     
Interest and other financial charges
   
2,414 
   
2,603 
           
365 
   
324 
         
2,161 
   
2,382 
     
Investment contracts, insurance losses and
                                                       
   insurance annuity benefits
   
620 
   
663 
           
– 
   
– 
         
643 
   
689 
     
Provision for losses on financing receivables
   
970 
   
1,457 
           
– 
   
– 
         
970 
   
1,457 
     
   Total costs and expenses
   
30,722 
   
30,804 
   
-%
     
22,858 
   
21,817 
   
5%
   
8,373 
   
9,435 
   
(11)%
                                                         
Earnings from continuing operations
                                                       
   before income taxes
   
3,456 
   
4,139 
   
(17)%
     
3,247 
   
4,044 
   
(20)%
   
2,142 
   
2,033 
   
5%
Benefit (provision) for income taxes
   
(516)
   
(508)
           
(318)
   
(424)
         
(198)
   
(84)
     
Earnings from continuing operations
   
2,940 
   
3,631 
   
(19)%
     
2,929 
   
3,620 
   
(19)%
   
1,944 
   
1,949 
   
-%
Earnings (loss) from discontinued
                                                       
   operations, net of taxes
   
12 
   
(120)
           
12 
   
(120)
         
12 
   
(120)
     
Net earnings
   
2,952 
   
3,511 
   
(16)%
     
2,941 
   
3,500 
   
(16)%
   
1,956 
   
1,829 
   
7%
Less net earnings (loss) attributable to
                                                       
   noncontrolling interests
   
(47)
   
(16)
           
(58)
   
(27)
         
11 
   
11 
     
Net earnings attributable
                                                       
    to the Company
 
$
2,999 
 
$
3,527 
   
(15)%
   
$
2,999 
 
$
3,527 
   
(15)%
 
$
1,945 
 
$
1,818 
   
7%
                                                         
Amounts attributable to the Company:
                                                       
Earnings from continuing operations
 
$
2,987 
 
$
3,647 
   
(18)%
   
$
2,987 
 
$
3,647 
   
(18)%
 
$
1,933 
 
$
1,938 
   
-%
Earnings (loss) from discontinued
                                                       
   operations, net of taxes
   
12 
   
(120)
           
12 
   
(120)
         
12 
   
(120)
     
Net earnings attributable
                                                       
   to the Company
 
$
2,999 
 
$
3,527 
   
(15)%
   
$
2,999 
 
$
3,527 
   
(15)%
 
$
1,945 
 
$
1,818 
   
7%
                                                         
Per-share amounts - earnings from
                                                       
   continuing operations
                                                       
Diluted earnings per share
 
$
 0.29 
 
$
 0.35 
   
(17)%
                                     
Basic earnings per share
 
$
 0.30 
 
$
 0.35 
   
(14)%
                                     
                                                         
Per-share amounts - net earnings
                                                       
Diluted earnings per share
 
$
 0.30 
 
$
 0.34 
   
(12)%
                                     
Basic earnings per share
 
$
 0.30 
 
$
 0.34 
   
(12)%
                                     
                                                         
Total average equivalent shares
                                                       
Diluted shares
   
10,123 
   
10,433 
   
(3)%
                                     
Basic shares
   
10,045 
   
10,374 
   
(3)%
                                     
                                                         
Dividends declared per common share
 
$
 0.22 
 
$
 0.19 
   
16%
                                     
                                                         
Amounts attributable to the Company:
                                                       
Earnings from continuing operations
 
$
2,987 
 
$
3,647 
   
(18)%
                                     
Adjustment (net of tax): Non-operating
                                                       
   pension costs/(income)
   
342 
   
423 
                                           
Operating earnings (non-GAAP measure)
 
$
3,329 
 
$
4,070 
   
(18)%
                                     
                                                         
Operating earnings – diluted earnings
                                                       
   per share
 
$
 0.33 
 
$
 0.39 
   
(15)%
                                     
                                                         
(a)  
Refers to the Industrial businesses of the Company including GECC on an equity basis.
 
Dollar amounts and share amounts in millions; per-share amounts in dollars. Supplemental data are shown for “GE” and “GECC.” Transactions between GE and GECC have been eliminated from the “Consolidated” columns. See Note 1 to the 2013 consolidated financial statements at www.ge.com/ar2013 for further information about consolidation matters.
 
 
(3)
 
 

GENERAL ELECTRIC COMPANY
Summary of Operating Segments
(unaudited)
                   
                 
Three months ended March 31
     
(Dollars in millions)
                 
2014 
   
2013 
   
V%
                                 
Revenues(a)
                               
   Power & Water
               
$
5,509 
 
$
4,825 
   
14%
   Oil & Gas
                 
4,308 
   
3,399 
   
27%
   Energy Management
                 
1,672 
   
1,748 
   
(4)%
   Aviation
                 
5,778 
   
5,074 
   
14%
   Healthcare
                 
4,198 
   
4,289 
   
(2)%
   Transportation
                 
1,227 
   
1,422 
   
(14)%
   Appliances & Lighting
                 
1,857 
   
1,917 
   
(3)%
      Total industrial segment revenues
                 
24,549 
   
22,674 
   
8%
   GE Capital
                 
10,515 
   
11,468 
   
(8)%
      Total segment revenues
                 
35,064 
   
34,142 
   
3%
   Corporate items and eliminations(a)
                 
(886)
   
801 
   
U
Consolidated revenues and other income from
                               
   continuing operations
               
$
34,178 
 
$
34,943 
   
(2)%
                                 
Segment profit(a)
                               
   Power & Water
               
$
888 
 
$
719 
   
24%
   Oil & Gas
                 
446 
   
325 
   
37%
   Energy Management
                 
   
15 
   
(67)%
   Aviation
                 
1,115 
   
936 
   
19%
   Healthcare
                 
570 
   
595 
   
(4)%
   Transportation
                 
202 
   
267 
   
(24)%
   Appliances & Lighting
                 
53 
   
79 
   
(33)%
      Total industrial segment profit
                 
3,279 
   
2,936 
   
12%
   GE Capital
                 
1,933 
   
1,938 
   
-%
      Total segment profit
                 
5,212 
   
4,874 
   
7%
                                 
Corporate items and eliminations(a)
                 
(1,542)
   
(479)
   
U
GE interest and other financial charges
                 
(365)
   
(324)
   
(13)%
GE provision for income taxes
                 
(318)
   
(424)
   
25%
                                 
Earnings from continuing operations
                               
   attributable to the Company
                 
2,987 
   
3,647 
   
(18)%
                                 
Earnings (loss) from discontinued operations,
                               
   net of taxes, attributable to the Company
                 
12 
   
(120)
   
F
                                 
Consolidated net earnings attributable
                               
    to the Company
               
$
2,999 
 
$
3,527 
   
(15)%
                                 
(a)  
Segment revenues includes both revenues and other income related to the segment. Segment profit excludes results reported as discontinued operations, earnings attributable to noncontrolling interests of consolidated subsidiaries, GECC preferred stock dividends declared and accounting changes. Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment’s management is measured – excluded in determining segment profit, which we sometimes refer to as “operating profit,” for Power & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation and Appliances & Lighting; included in determining segment profit, which we sometimes refer to as “net earnings,” for GE Capital. Certain corporate costs, such as shared services, employee benefits and information technology are allocated to our segments based on usage. A portion of the remaining corporate costs are allocated based on each segment’s relative net cost of operations.
 
 
 
(4)
 
 


 
GENERAL ELECTRIC COMPANY
Summary of Operating Segments (unaudited)
Additional Information
                                     
                       
                     
Three months ended March 31
     
(Dollars in millions)
                     
2014 
   
2013 
   
V%
                                     
GE Capital
                                   
                                     
   Revenues
                   
$
10,515 
 
$
11,468 
   
(8)%
                                     
   Segment profit
                   
$
1,933 
 
$
1,938 
   
-%
                                     
   Revenues
                                   
      Commercial Lending and Leasing (CLL)
                   
$
3,582 
 
$
3,507 
   
2%
      Consumer
                     
3,602 
   
3,825 
   
(6)%
      Real Estate
                     
631 
   
1,657 
   
(62)%
      Energy Financial Services
                     
469 
   
343 
   
37%
      GE Capital Aviation Services (GECAS)
                     
1,345 
   
1,379 
   
(2)%
                                     
   Segment profit
                                   
      CLL
                   
$
564 
 
$
398 
   
42%
      Consumer
                     
786 
   
534 
   
47%
      Real Estate
                     
239 
   
690 
   
(65)%
      Energy Financial Services
                     
153 
   
83 
   
84%
      GECAS
                     
352 
   
348 
   
1%
                                     
 
 
 
(5)
 
 


 
GENERAL ELECTRIC COMPANY
Condensed Statement of Financial Position
 (unaudited)
                                     
                           
Financial 
 
Consolidated 
   
GE(a) 
 
Services (GECC) 
(Dollars in billions)
 
3/31/14
   
12/31/13
     
3/31/14
   
12/31/13
   
3/31/14
   
12/31/13
                                     
Assets
                                   
   Cash & marketable securities
$
132.7 
 
$
132.5 
   
$
12.0 
 
$
14.0 
 
$
120.7 
 
$
118.5 
   Receivables
 
21.0 
   
21.4 
     
11.1 
   
11.0 
   
– 
   
– 
   Inventories
 
18.9 
   
17.3 
     
18.8 
   
17.3 
   
0.1 
   
0.1 
   Financing receivables - net
 
237.0 
   
241.9 
     
– 
   
– 
   
247.2 
   
253.0 
   Property, plant & equipment - net
 
67.7 
   
68.8 
     
17.6 
   
17.6 
   
50.5 
   
51.6 
   Investment in GECC
 
– 
   
– 
     
79.6 
   
77.7 
   
– 
   
– 
   Goodwill & intangible assets
 
93.9 
   
92.0 
     
66.3 
   
64.6 
   
27.6 
   
27.3 
   Other assets
 
79.6 
   
80.0 
     
24.0 
   
23.7 
   
62.9 
   
63.9 
   Assets of businesses held for sale
 
– 
   
0.1 
     
– 
   
– 
   
– 
   
0.1 
   Assets of discontinued operations
 
1.5 
   
2.3 
     
– 
   
– 
   
1.4 
   
2.3 
                                     
Total assets
$
652.3 
 
$
656.3 
   
$
229.4 
 
$
225.9 
 
$
510.4 
 
$
516.8 
                                     
Liabilities and equity
                                   
   Borrowings and bank deposits
$
380.6 
 
$
383.0 
   
$
16.0 
 
$
13.4 
 
$
365.2 
 
$
371.1 
   Investment contracts, insurance liabilities
                                   
      and insurance annuity benefits
 
27.0 
   
26.5 
     
– 
   
– 
   
27.6 
   
27.0 
   Other liabilities
 
105.4 
   
106.1 
     
80.7 
   
81.0 
   
31.5 
   
31.8 
   Liabilities of discontinued operations
 
1.3 
   
3.9 
     
0.1 
   
0.1 
   
1.1 
   
3.8 
   GE shareowners' equity
 
131.8 
   
130.6 
     
131.8 
   
130.6 
   
84.6 
   
82.7 
   Noncontrolling interests
 
6.2 
   
6.2 
     
0.8 
   
0.8 
   
0.4 
   
0.4 
                                     
Total liabilities and equity
$
652.3 
 
$
656.3 
   
$
229.4 
 
$
225.9 
 
$
510.4 
 
$
516.8 
                                     
(a)
 
Refers to the Industrial businesses of the Company including GECC on an equity basis.
 
 
Supplemental consolidating data are shown for "GE" and "GECC." Transactions between GE and GECC have been eliminated from the "Consolidated" columns. See Note 1 to the 2013 consolidated financial statements at www.ge.com/ar2013 for further information about consolidation matters.
 
 
 
(6)
 
 

GENERAL ELECTRIC COMPANY
Financial Measures That Supplement GAAP



We sometimes use information derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. We have referred to operating earnings, operating earnings per share (EPS), Adjusted operating EPS, Industrial segment organic revenue growth, GE Capital ending net investment (ENI) excluding cash and equivalents and cash generated from GE Industrial operating activities (Industrial CFOA). The reconciliations of these measures to the most comparable GAAP measures follow.

Operating Earnings, Operating Earnings Per Share and Adjusted Operating Earnings Per Share
                   
   
Three months ended March 31
     
(Dollars in millions; except earnings per share)
   
2014 
   
2013 
   
V% 
                   
Earnings from continuing operations attributable to GE
 
$
 2,987 
 
$
 3,647 
   
(18)%
Adjustment (net of tax): non-operating pension costs/(income)
   
 342 
   
 423 
     
Operating earnings
 
$
 3,329 
 
$
 4,070 
   
(18)%
                   
Earnings per share – diluted(a)
                 
Continuing earnings per share
 
$
 0.29 
 
$
 0.35 
   
(17)%
Adjustment (net of tax): non-operating pension costs/(income)
   
 0.03 
   
 0.04 
     
Operating earnings per share
 
$
 0.33 
 
$
 0.39 
   
(15)%
                   
Less costs/(income):
                 
   NBCU gain/income
 
$
   
$
 (0.10)
     
   GECC 30 Rock gain
         
(0.05)
     
   Industrial restructuring and other charges
   
 0.03 
   
 0.04 
     
   GECC restructuring and other charges
         
 0.05 
     
Adjusted operating earnings per share
 
$
 0.36 
 
$
 0.33 
   
9%
                   
(a)  
Earnings-per-share amounts are computed independently.  As a result, the sum of per-share amounts may not equal the total.

Operating earnings excludes non-service related pension costs of our principal pension plans comprising interest cost, expected return on plan assets and amortization of actuarial gains/losses. The service cost and prior service cost components of our principal pension plans are included in operating earnings. We believe that these components of pension cost better reflect the ongoing service-related costs of providing pension benefits to our employees. As such, we believe that our measure of operating earnings provides management and investors with a useful measure of the operational results of our business. Other components of GAAP pension cost are mainly driven by capital allocation decisions and market performance, and we manage these separately from the operational performance of our businesses. Neither GAAP nor operating pension costs are necessarily indicative of the current or future cash flow requirements related to our pension plan. We also believe that this measure, considered along with the corresponding GAAP measure, provides management and investors with additional information for comparison of our operating results to the operating results of other companies. In addition, we believe that investors may find it useful to compare our operating EPS excluding the effects of the disposition of NBCU, including the GECC gain on sale of real estate comprising certain floors located at 30 Rockefeller Center, and restructuring and other charges because it increases the comparability of period-to-period results.
 
 
 
(7)
 
 

 
Industrial Segment Organic Revenue Growth
 
Three months ended March 31
     
(Dollars in millions)
 
2014 
   
2013 
   
V%
                 
Segment revenues:
               
    Power & Water
$
5,509 
 
$
4,825 
     
    Oil & Gas
 
4,308 
   
3,399 
     
    Energy Management
 
1,672 
   
1,748 
     
    Aviation
 
5,778 
   
5,074 
     
    Healthcare
 
4,198 
   
4,289 
     
    Transportation
 
1,227 
   
1,422 
     
    Appliances & Lighting
 
1,857 
   
1,917 
     
Industrial segment revenues
 
24,549 
   
22,674 
   
8%
Less the effects of:
               
     Acquisitions, business dispositions (other than dispositions of businesses acquired
               
       for investment) and currency exchange rates
 
438 
   
317 
     
Industrial segment revenues excluding effects of acquisitions, business dispositions
               
   (other than dispositions of businesses acquired for investment) and currency
               
      exchange rates (Industrial segment organic revenues)
$
24,111 
 
$
22,357 
   
8%
                 
Organic revenue growth measures revenue excluding the effects of acquisitions, business dispositions and currency exchange rates.  We believe that this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and currency exchange, which activities are subject to volatility and can obscure underlying trends.  We also believe that presenting organic revenue growth separately for our industrial businesses provides management and investors with useful information about the trends of our industrial businesses and enables a more direct comparison to other non-financial businesses and companies.  Management recognizes that the term "organic revenue growth" may be interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the respective businesses or companies and may therefore be a useful tool in assessing period-to-period performance trends.

                   
GE Capital Ending Net Investment (ENI), Excluding Cash and Equivalents
             
                   
                   
(In billions)
 
March 31, 2014
   
December 31, 2013
   
March 31, 2013
 
                   
GECC total assets
$
510.4 
 
$
516.8 
 
$
529.5 
 
   Less assets of discontinued operations
 
1.4 
   
2.3 
   
2.8 
 
   Less non-interest bearing liabilities
 
60.0 
   
59.3 
   
57.8 
 
GE Capital ENI
 
449.0 
   
455.2 
   
468.9 
 
   Less cash and equivalents
 
75.3 
   
74.9 
   
67.7 
 
GE Capital ENI, excluding cash and equivalents
$
373.7 
 
$
380.3 
 
$
401.2 
 
                   
Variance to March 31, 2014
     
$
(6.6)
 
$
(27.5)
 
Percentage variance to March 31, 2014
       
 (2)
%
 
 (7)
%

We use ENI to measure the size of our GE Capital segment. We believe that this measure is a useful indicator of the capital (debt or equity) required to fund a business as it adjusts for non-interest-bearing current liabilities generated in the normal course of business that do not require a capital outlay. We also believe that by excluding cash and equivalents, we provide a meaningful measure of assets requiring capital to fund our GE Capital segment as a substantial amount of this cash and equivalents resulted from debt issuances to pre-fund future debt maturities and will not be used to fund additional assets. Providing this measure will help investors measure how we are performing against our previously communicated goal to reduce the size of our financial services segment.
 
 
 
(8)
 
 

 
Industrial CFOA
 
Three months ended March 31
     
(Dollars in millions)
 
2014
   
2013 
   
V%
                 
Cash from GE's operating activities (continuing operations) as reported
$
1,750 
 
$
200 
   
F
Less dividends from GECC
 
500 
   
– 
     
Cash from GE's operating activities (continuing operations) excluding dividends
               
   from GECC (Industrial CFOA)
$
1,250 
 
$
200 
   
F
                 

We define “Industrial CFOA” as GE’s cash from operating activities (continuing operations) less the amount of dividends received by GE from GECC. This includes the effects of intercompany transactions, including GE customer receivables sold to GECC; GECC services for trade receivables management and material procurement; buildings and equipment (including automobiles) leased by GE from GECC; information technology (IT) and other services sold to GECC by GE; aircraft engines manufactured by GE that are installed on aircraft purchased by GECC from third-party producers for lease to others; and various investments, loans and allocations of GE corporate overhead costs. We believe that investors may find it useful to compare GE’s operating cash flows without the effect of GECC dividends, since these dividends are not representative of the operating cash flows of our industrial businesses and can vary from period to period based upon the results of the financial services businesses. Management recognizes that these measures may not be comparable to cash flow results of companies which contain both industrial and financial services businesses, but believes that this comparison is aided by the provision of additional information about the amounts of dividends paid by our financial services business and the separate presentation in our financial statements of the GECC cash flows. We believe that our measure of Industrial CFOA provides management and investors with a useful measure to compare the capacity of our industrial operations to generate operating cash flow with the operating cash flow of other non-financial businesses and companies and as such provides useful measures to supplement the reported GAAP CFOA measure.

 
 
(9)