GENERAL ELECTRIC CO - FORM 8-K - EX-99 - EXHIBIT 99 - April 20, 2018

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GENERAL ELECTRIC COMPANY
CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED)
 
 
Consolidated
 
 
GE(a)
 
Financial Services (GE Capital)
Three months ended March 31
 
2018

 
2017

 
V%

 
 
2018

 
2017

 
V%

 
2018

 
2017

 
V%

Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales of goods and services
 
$
26,874

 
$
24,616

 
9
 %
 
 
$
26,894

 
$
24,781

 
9
%
 
$
32

 
$
29

 
10
 %
GE Capital revenues from services
 
1,786

 
2,264

 
 
 
 
—

 
—

 
 
 
2,141

 
2,652

 
 
Total revenues
 
28,660

 
26,881

 
7
 %
 
 
26,894

 
24,780

 
9
%
 
2,173

 
2,681

 
(19
)%
Costs and expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales
 
21,526

 
20,230

 
 
 
 
21,027

 
19,845

 
 
 
550

 
585

 
 
Selling, general and administrative expenses
 
4,204

 
4,287

 
 
 
 
3,999

 
3,803

 
 
 
343

 
572

 
 
Interest and other financial charges
 
1,285

 
1,139

 
 
 
 
642

 
564

 
 
 
819

 
812

 
 
Investment contracts, insurance losses and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
insurance annuity benefits
 
630

 
634

 
 
 
 
—

 
—

 
 
 
645

 
636

 
 
Non-operating benefit costs
 
688

 
651

 
 
 
 
684

 
649

 
 
 
4

 
2

 
 
Other costs and expenses
 
121

 
190

 
 
 
 
—

 
—

 
 
 
133

 
214

 
 
Total costs and expenses
 
28,453

 
27,131

 
5
 %
 
 
26,352

 
24,860

 
6
%
 
2,495

 
2,820

 
(12
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income
 
205

 
197

 
 
 
 
193

 
166

 
 
 
—

 
—

 
 
GE Capital earnings (loss) from continuing operations
 
—

 
—

 
 
 
 
(215
)
 
(47
)
 
 
 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
before income taxes
 
413

 
(53
)
 
F

 
 
519

 
39

 
F

 
(321
)
 
(139
)
 
U

Benefit (provision) for income taxes
 
27

 
105

 
 
 
 
(112
)
 
(23
)
 
 
 
139

 
128

 
 
Earnings (loss) from continuing operations
 
440

 
52

 
F

 
 
407

 
16

 
F

 
(182
)
 
(11
)
 
U

Earnings (loss) from discontinued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
operations, net of taxes
 
(1,553
)
 
(239
)
 
 
 
 
(1,553
)
 
(239
)
 
 
 
(1,553
)
 
(242
)
 
 
Net earnings (loss)
 
(1,113
)
 
(187
)
 
U

 
 
(1,146
)
 
(223
)
 
U

 
(1,735
)
 
(253
)
 
U

Less net earnings (loss) attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noncontrolling interests
 
34

 
(104
)
 
 
 
 
38

 
(106
)
 
 
 
(4
)
 
2

 
 
Net earnings (loss) attributable to the Company
 
(1,147
)
 
(83
)
 
U

 
 
(1,184
)
 
(117
)
 
U

 
(1,731
)
 
(256
)
 
U

Preferred stock dividends
 
(37
)
 
(34
)
 
 
 
 
—

 
—

 
 
 
(37
)
 
(34
)
 
 
Net earnings (loss) attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GE common shareowners
 
$
(1,184
)
 
$
(117
)
 
U

 
 
$
(1,184
)
 
$
(117
)
 
U

 
$
(1,768
)
 
$
(290
)
 
U

Amounts attributable to GE common
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
shareowners:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
440

 
$
52

 
F

 
 
$
407

 
$
16

 
F

 
$
(182
)
 
$
(11
)
 
U

Less net earnings (loss) attributable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
to noncontrolling interests, continuing operations
 
34

 
(104
)
 
 
 
 
38

 
(106
)
 
 
 
(4
)
 
2

 
 
Earnings (loss) from continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
attributable to the Company
 
406

 
156

 
F

 
 
369

 
122

 
F

 
(179
)
 
(13
)
 
U

Preferred stock dividends
 
(37
)
 
(34
)
 
 
 
 
—

 
—

 
 
 
(37
)
 
(34
)
 
 
Earnings (loss) from continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
attributable to GE common shareowners
 
369

 
122

 
F

 
 
369

 
122

 
F

 
(215
)
 
(47
)
 
U

Earnings (loss) from discontinued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
operations, net of taxes
 
(1,553
)
 
(239
)
 
 
 
 
(1,553
)
 
(239
)
 
 
 
(1,553
)
 
(242
)
 
 
Less net earnings (loss) attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noncontrolling interests, discontinued operations
 
—

 
—

 
 
 
 
—

 
—

 
 
 
—

 
—

 
 
Net earnings (loss) attributable to GE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
common shareowners
 
$
(1,184
)
 
$
(117
)
 
U

 
 
$
(1,184
)
 
$
(117
)
 
U

 
$
(1,768
)
 
$
(290
)
 
U

Per-share amounts - earnings (loss) from
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
continuing operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share
 
$
0.04

 
$
0.01

 
F

 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share
 
$
0.04

 
$
0.01

 
F

 
 
 
 
 
 
 
 
 
 
 
 
 
Per-share amounts - net earnings (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share
 
$
(0.14
)
 
$
(0.01
)
 
U

 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share
 
$
(0.14
)
 
$
(0.01
)
 
U

 
 
 
 
 
 
 
 
 
 
 
 
 
Total average equivalent shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted
 
8,696

 
8,811

 
(1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
8,683

 
8,714

 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per common share
 
$
0.12

 
$
0.24

 
(50
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis.
Amounts may not add due to rounding. Dollar amounts and share amounts in millions; per-share amounts in dollars.
"GE Capital" means GE Capital Global Holdings, LLC (GECGH) and all of their affiliates and associated companies. Separate information is shown for "GE" and "Financial Services (GE Capital)." Transactions between GE and GE Capital have been eliminated from the "Consolidated" column. See Note 1 to the 2017 consolidated financial statements at www.ge.com/ar2017 for further information about consolidation matters

4


GENERAL ELECTRIC COMPANY
 
 
 
 
 
 
SUMMARY OF OPERATING SEGMENTS (UNAUDITED)
 
 
 
 
 
 
 
 
Three months ended March 31
(Dollars in millions)
 
2018

 
2017

 
V%

Revenues(a)
 
 
 
 
 
 
Power(b)
 
$
7,222

 
$
7,940

 
(9
)%
Renewable Energy
 
1,646

 
1,767

 
(7
)%
Oil & Gas
 
5,385

 
3,086

 
74
 %
Aviation
 
7,112

 
6,673

 
7
 %
Healthcare
 
4,702

 
4,305

 
9
 %
Transportation
 
872

 
979

 
(11
)%
Lighting(b)
 
456

 
462

 
(1
)%
Total industrial segment revenues
 
27,395

 
25,213

 
9
 %
Capital
 
2,173

 
2,681

 
(19
)%
Total segment revenues
 
29,569

 
27,894

 
6
 %
Corporate items and eliminations(a)
 
(908
)
 
(1,013
)
 
 
Consolidated revenues
 
$
28,660

 
$
26,881

 
7
 %
Segment profit (loss)(a)
 
 
 
 
 
 
Power(b)
 
$
273

 
$
438

 
(38
)%
Renewable Energy
 
77

 
70

 
10
 %
Oil & Gas(c)
 
(144
)
 
260

 
U

Aviation
 
1,603

 
1,273

 
26
 %
Healthcare
 
735

 
661

 
11
 %
Transportation
 
130

 
95

 
37
 %
Lighting(b)
 
1

 
10

 
(90
)%
Total industrial segment profit
 
2,675

 
2,807

 
(5
)%
Capital
 
(215
)
 
(47
)
 
U

Total segment profit (loss)
 
2,460

 
2,760

 
(11
)%
Corporate items and eliminations(a)
 
(653
)
 
(1,402
)
 
 
GE interest and other financial charges
 
(642
)
 
(564
)
 
 
GE benefit (provision) for income taxes
 
(112
)
 
(23
)
 
 
GE non-operating benefit costs
 
(684
)
 
(649
)
 
 
Earnings (loss) from continuing operations
 
 
 
 
 
 
attributable to GE common shareowners
 
369

 
122

 
F

Earnings (loss) from discontinued operations,
 
 
 
 
 
 
net of taxes
 
(1,553
)
 
(239
)
 
U

Less net earnings attributable to
 
 
 
 
 
 
noncontrolling interests, discontinued operations
 
—

 
—

 
 
Earnings (loss) from discontinued operations,
 
 
 
 
 
 
net of tax and noncontrolling interests
 
(1,553
)
 
(239
)
 
U

Consolidated net earnings (loss)
 
 
 
 
 
 
attributable to GE common shareowners
 
$
(1,184
)
 
$
(117
)
 
U

(a)
Segment revenues include sales of products and services related to the segment. Segment profit excludes results reported as discontinued operations and material accounting changes, the portion of earnings or loss attributable to noncontrolling interests of consolidated subsidiaries, and as such only includes the portion of earnings or loss attributable to our share of the consolidated earnings or loss of consolidated subsidiaries. Segment profit excludes or includes interest and other financial charges, non-operating benefit costs, income taxes, and preferred stock dividends according to how a particular segment's management is measured – excluded in determining segment profit, which we sometimes refer to as "operating profit," for Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation and Lighting; included in determining segment profit, which we sometimes refer to as "net earnings," for Capital. Other income is included in segment profit for the industrial segments and the Capital segment. Certain corporate costs, such as shared services, employee benefits and information technology are allocated to our segments based on usage. A portion of the remaining corporate costs is allocated based on each segment's relative net cost of operations. Industrial segment revenues and profit include the sum of our seven industrial reporting segments without giving effect to the elimination of transactions among such segments and between these segments and our financial services segment. Total segment revenues and profit include the sum of our seven industrial segments and one financial services segment, without giving effect to the elimination of transactions among such segments. We believe that this provides investors with a view as to the results of all of our segments, without inter-segment eliminations and corporate items.
(b)
Beginning in the third quarter of 2017, the Energy Connections business within the former Energy Connections & Lighting segment has been combined with the Power segment and presented as one reporting segment called Power. As a result of this combination, our GE Lighting and Current, powered by GE (Current) businesses, have been reported as a separate segment called Lighting.
(c)
Oil & Gas segment profit (loss) includes $324 million of restructuring and other charges in the three months ended March 31, 2018. Excluding this amount, Oil & Gas operating profit was $181 million in the three months ended March 31, 2018.


Amounts may not add due to rounding

5


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

 
December 31,

 
March 31,

 
December 31,

 
March 31,

 
December 31,

(Dollars in billions)
 
2018

 
2017

 
2018

 
2017

 
2018

 
2017

Assets
 
 
 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash and marketable securities(b)(c)
 
$
69.3

 
$
82.7

 
$
13.7

 
$
19.4

 
$
55.7

 
$
63.4

Receivables
 
22.6

 
24.2

 
14.7

 
14.6

 
—

 
—

Inventories
 
20.6

 
19.4

 
20.5

 
19.3

 
0.1

 
0.1

GE Capital financing receivables - net
 
10.1

 
10.3

 
—

 
—

 
20.1

 
22.0

Property, plant & equipment - net
 
53.7

 
53.9

 
23.7

 
24.0

 
30.7

 
30.6

Receivable from GE Capital (debt assumption)
 
—

 
—

 
35.9

 
39.8

 
—

 
—

Investment in GE Capital
 
—

 
—

 
12.0

 
13.5

 
—

 
—

Goodwill & intangible assets
 
106.1

 
104.2

 
104.9

 
103.0

 
1.2

 
1.2

Contract assets
 
20.8

 
20.4

 
20.8

 
20.4

 
—

 
—

Other assets
 
45.0

 
44.1

 
22.0

 
21.4

 
32.5

 
33.5

Assets of businesses held for sale
 
4.3

 
4.2

 
4.0

 
3.8

 
—

 
—

Assets of discontinued operations
 
5.7

 
5.9

 
—

 
—

 
5.7

 
5.9

Total assets
 
$
358.1

 
$
369.2

 
$
272.1

 
$
279.3

 
$
146.0

 
$
156.7

Liabilities and equity
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings(d)
 
$
125.8

 
$
134.6

 
$
77.4

 
$
81.6

 
$
86.3

 
$
95.2

Investment contracts, insurance liabilities and
 
 
 
 
 
 
 
 
 
 
 
 
insurance annuity benefits
 
36.9

 
38.1

 
—

 
—

 
37.5

 
38.6

Non-current compensation and benefits
 
41.1

 
41.6

 
40.4

 
40.8

 
0.7

 
0.8

Other liabilities
 
74.4

 
76.0

 
76.6

 
78.9

 
7.3

 
7.7

Liabilities of businesses held for sale
 
1.0

 
1.2

 
1.1

 
1.2

 
—

 
—

Liabilities of discontinued operations
 
2.1

 
0.7

 
—

 
—

 
2.1

 
0.7

Redeemable noncontrolling interests
 
3.5

 
3.4

 
3.5

 
3.4

 
—

 
—

GE shareowners' equity
 
56.0

 
56.0

 
56.0

 
56.0

 
12.0

 
13.5

Noncontrolling interests
 
17.2

 
17.5

 
17.0

 
17.3

 
0.2

 
0.2

Total liabilities and equity
 
$
358.1

 
$
369.2

 
$
272.1

 
$
279.3

 
$
146.0

 
$
156.7

(a)
Represents the adding together of all affiliated companies except GE Capital, which is presented on a one-line basis.
(b)
At March 31, 2018, GE Capital maintained liquidity sources of $21.7 billion that consisted of cash and equivalents of $19.0 billion, high-quality investments of $2.0 billion and cash and equivalents of $0.6 billion classified as discontinued operations. Additionally, at March 31, 2018, GE has $20.3 billion of committed bilateral operating lines extended by 15 banks, which had no outstanding balance at March 31, 2018, as well as $20.0 billion of committed unused credit lines extended by 36 banks in a syndicated credit facility agreement expiring in 2021. GE Capital has the right to compel GE to borrow under certain of these credit lines and transfer the proceeds as loans to GE Capital.
(c)
Balance included consolidated restricted cash of $0.5 billion of $0.7 billion at March 31, 2018 and December 31, 2017, respectively. GE restricted cash was $0.4 billion and $0.6 billion at March 31, 2018 and December 31, 2017, respectively, and GE Capital restricted cash was $0.1 billion at both March 31, 2018 and December 31, 2017.
(d)
GE Capital borrowings includes commercial paper of $4 billion and $5 billion for the periods ended March 31, 2018 and December 31, 2017.

Amounts may not add due to rounding

"GE Capital" means GE Capital Global Holdings, LLC (GECGH) and all of their affiliates and associated companies. Separate information is shown for "GE" and "Financial Services (GE Capital)." Transactions between GE and GE Capital have been eliminated from the "Consolidated" column. See Note 1 to the 2017 consolidated financial statements at www.ge.com/ar2017 for further information about consolidation matters.


6


GENERAL ELECTRIC COMPANY
Financial Measures That Supplement GAAP


We sometimes use financial measures 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 are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission rules. The following non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure.

•
Adjusted earnings and EPS
•
Adjusted GE Industrial operating profit and operating profit margin (excluding certain items)
•
GE Industrial segments organic revenue growth
•
Oil & Gas organic revenue growth
•
Healthcare organic revenue growth
•
Oil & Gas organic operating profit growth
•
GE Industrial structural costs
•
GE Industrial free cash flows (FCF) and adjusted GE Industrial FCF
The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures follow. Certain columns, rows or percentages within these reconciliations may not add or recalculate due to the use of rounded numbers. Totals and percentages presented are calculated from the underlying numbers in millions.
performance of the businesses we expect to retain after the disposition of most of our financial services business.

7


ADJUSTED EARNINGS AND EPS (NON-GAAP)
 
Three months ended March 31
(Dollars in millions; except per-share amounts)
2018

2017

V%

 
 
 
 
Consolidated earnings (loss) from continuing operations attributable to GE common shareowners (GAAP)
$
369

$
122

F

Non-operating benefits costs (pre-tax) (GAAP)
(684
)
(649
)
(5
)%
Tax effect on non-operating benefit costs
144

227

(37
)%
Less: non-operating benefit costs (net of tax)
(540
)
(422
)
(28
)%
Operating earnings (GAAP)
909

544

67
 %
 
 
 
 
Less: GE Capital earnings (loss) from continuing operations attributable to GE common shareowners
(215
)
(47
)
U

GE Industrial operating earnings (GAAP)
$
1,125

$
591

90
 %
Gains (losses) and impairments for businesses held for sale (pre-tax)
(67
)
2

U

Tax effect on gains (losses) and impairments for businesses held for sale
24

(1
)
F

Less: Gains (losses) and impairments for businesses held for sale (net of tax)
(43
)
1

U

Restructuring & other (pre-tax)
(522
)
(974
)
46
 %
Tax effect on restructuring & other
132

292

(55
)%
Less: restructuring & other (net of tax)
(390
)
(681
)
43
 %
Less: GE Industrial U.S. tax reform enactment adjustment
(31
)
—

U

Adjusted GE Industrial operating earnings (Non-GAAP)
1,588

1,271

25
 %
 
 
 
 
GE Capital earnings (loss) from continuing operations attributable to GE common shareowners (GAAP)
(215
)
(47
)
U

Less: GE Capital U.S. tax reform enactment adjustment
(45
)
—

U

Adjusted GE Capital earnings (Non-GAAP)
(170
)
(47
)
U

 
 
 
 
Adjusted GE Industrial operating earnings (Non-GAAP)
1,588

1,271

25
 %
Add: Adjusted GE Capital earnings (Non-GAAP)
(170
)
(47
)
U

Adjusted earnings (Non-GAAP)
1,418

1,224

16
 %
 
 
 
 
Earnings (loss) per share (EPS) - diluted(b)
 
 
 
Consolidated EPS from continuing operations attributable to GE common shareowners (GAAP)
$
0.04

$
0.01

F

Non-operating benefits costs (pre-tax) (GAAP)
(0.08
)
(0.07
)


Tax effect on non-operating benefit costs
0.02

0.03



Less: non-operating benefit costs (net of tax)
(0.06
)
(0.05
)


Operating EPS (GAAP)
0.10

0.06

67
 %
 
 
 
 
Less: GE Capital EPS from continuing operations attributable to GE common shareowners
(0.02
)
(0.01
)


GE Industrial operating EPS (GAAP)
0.13

0.07

86
 %
Gains (losses) and impairments for businesses held for sale (pre-tax)
(0.01
)
—



Tax effect on gains (losses) and impairments for businesses held for sale
—

—



Less: Gains (losses) and impairments for businesses held for sale (net of tax)
—

—



Restructuring & other (pre-tax)
(0.06
)
(0.11
)


Tax effect on restructuring & other
0.02

0.03



Less: restructuring & other (net of tax)
(0.04
)
(0.08
)


Less: GE Industrial U.S. tax reform enactment adjustment
—

—



Adjusted GE Industrial operating EPS (Non-GAAP)
0.18

0.14

29
 %
 
 
 
 
GE Capital EPS from continuing operations attributable to GE common shareowners (GAAP)
(0.02
)
(0.01
)
(100
)%
Less: GE Capital U.S. tax reform enactment adjustment
(0.01
)
—



Adjusted GE Capital EPS (Non-GAAP)
(0.02
)
(0.01
)
(100
)%
 
 
 
 
Adjusted GE Industrial operating EPS (Non-GAAP)
0.18

0.14

29
 %
Add: Adjusted GE Capital EPS (Non-GAAP)
(0.02
)
(0.01
)


Adjusted EPS (Non-GAAP)
$
0.16

$
0.14

14
 %
 
 
 
 
(a) The tax effect on non-operating benefit costs was calculated using a 21% U.S. federal statutory tax rate, based on its applicability to such cost.
(b) Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.

Adjusted earnings (loss) and EPS* excludes non-operating benefit costs, gains, and restructuring and other items, after tax. The service cost of our pension and other benefit plans are included in adjusted earnings, which represents the ongoing cost of providing pension benefits to our employees. The components of non-operating benefit costs are mainly driven by capital allocation decisions and market performance, and we manage these separately from the operational performance of our businesses. Gains and restructuring and other items are impacted by the timing and magnitude of gains associated with dispositions, and the timing and magnitude of costs associated with restructuring activities. We believe that the retained costs in Adjusted earnings and EPS* provides management and investors a useful measure to evaluate the performance of the total company, and increases period-to-period comparability. We also use Adjusted EPS* as a performance metric at the company level for our annual executive incentive plan for 2018. We believe that presenting Adjusted Industrial earnings and EPS* separately for our financial services businesses also provides management and investors with useful information about the relative size of our industrial and financial services businesses in relation to the total company.

*Non-GAAP Financial Measure

8


ADJUSTED GE INDUSTRIAL OPERATING PROFIT AND
OPERATING PROFIT MARGIN (EXCLUDING CERTAIN ITEMS)(NON-GAAP)
 
Three months ended March 31
(Dollars in millions)
2018

2017

 
 
 
GE total revenue (GAAP)
$
26,894

$
24,780

 
 
 
Costs
 
 
GE total costs and expenses
$
26,352

$
24,860

Less: non-operating benefit costs
684

649

Less: GE interest and other financial charges
642

564

GE Industrial costs excluding non-operating benefit costs and interest and other financial charges (GAAP)
$
25,026

$
23,647

 
 
 
Less: Restructuring and other charges
656

974

Add: noncontrolling interests
38

(106
)
Adjusted GE Industrial costs (Non-GAAP)
$
24,408

$
22,568

 
 
 
Other Income
 
 
GE other income (GAAP)
$
193

$
166

Less: gains (losses) and impairments for businesses held for sale
(67
)
2

Adjusted GE other income (Non-GAAP)
$
259

$
165

 
 
 
GE Industrial operating profit (GAAP)
$
2,060

$
1,299

GE Industrial operating profit margins (GAAP)
7.7
%
5.2
%
 
 
 
Adjusted GE Industrial operating profit (Non-GAAP)
$
2,745

2,377

Adjusted GE Industrial operating profit margins (Non-GAAP)
10.2
%
9.6
%
 
 
 
We have presented our adjusted GE Industrial operating profit* and operating profit margin* excluding gains and impairments for businesses held for sale, restructuring and other, noncontrolling interests. We believe that Adjusted GE Industrial operating profit* and operating profit margin* adjusted for these items are meaningful measures because they increase the comparability of period-to-period results.


































*Non-GAAP Financial Measure

9


GE INDUSTRIAL SEGMENTS ORGANIC REVENUE GROWTH (NON-GAAP)
 
 
 
 
Three months ended March 31
(In millions)
2018

2017

V%
 
 
 
 
GE Industrial segment revenue (GAAP)
$
27,395

$
25,213

9
 %
Adjustments:
 
 
 
Acquisitions
2,725

7

 
Business dispositions (other than dispositions acquired for investment)
1

483

 
Currency exchange rate(a)
853

—

 
GE Industrial segment organic revenue (Non-GAAP)
$
23,817

$
24,724

(4)
 %
(a) Translational foreign exchange
 
 
 
 
 
 
 
OIL & GAS ORGANIC REVENUE GROWTH (NON-GAAP)
 
 
 
 
Three months ended March 31
(In millions)
2018

2017

V%
 
 
 
 
Oil & Gas segment revenue (GAAP)
$
5,385

$
3,086

74
 %
Adjustments:
 
 
 
Acquisitions
2,560

—

 
Business dispositions (other than dispositions acquired for investment)
—

—

 
Currency exchange rate(a)
159

 
 
Oil & Gas organic revenue (Non-GAAP)
$
2,666

$
3,086

(14
)%
(a) Translational foreign exchange
 
 
 
 
 
 
 
HEALTHCARE ORGANIC REVENUE GROWTH (NON-GAAP)
 
 
 
 
Three months ended March 31
(In millions)
2018

2017

V%
 
 
 
 
Healthcare segment revenue (GAAP)
$
4,702

$
4,305

9
 %
Adjustments:
 
 
 
Acquisitions
2

—

 
Business dispositions (other than dispositions acquired for investment)
1

17

 
Currency exchange rate(a)
174

 
 
Healthcare organic revenue (Non-GAAP)
$
4,525

$
4,288

6
 %
(a) Translational foreign exchange
 
 
 
 
 
 
 
Organic revenue growth* measures revenue growth 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.















*Non-GAAP Financial Measure

10


OIL & GAS ORGANIC OPERATING PROFIT GROWTH (NON-GAAP)
 
 
 
 
Three months ended March 31
(In millions)
2018

2017

V%
 
 
 
 
Oil & Gas segment operating profit (GAAP)
$
(144
)
$
260

U

Less: restructuring
(324
)
 
 
Adjusted Oil & Gas segment operating profit (Non-GAAP)
$
181

$
260

 
Adjustments:
 
 
 
Acquisitions
121

—

 
Business dispositions (other than dispositions required for investment)
—

—

 
Currency exchange rate(a)
5

—

 
Oil & Gas organic operating profit (Non-GAAP)
$
55

$
260

(79
)%
(a) Translational foreign exchange
 
 
 
 
 
 
 
Organic operating profit growth* measures profit 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. Management recognizes that the term "organic operating profit 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 Oil & Gas business and may therefore be a useful tool in assessing period-to-period performance trends.

GE INDUSTRIAL STRUCTURAL COSTS (NON-GAAP)
 
 
 
 
 
 
Three months ended March 31
(In millions)
2018

2017

V$
 
 
 
 
GE Industrial costs excluding interest and other financial charges and non-operating benefit costs (GAAP)
$
25,026

$
23,647

$
1,379

Less: Segment variable costs
18,757

16,932



Less: Segment restructuring & other charges
280

12



Less: Segment acquisitions/dispositions structural costs and impact from foreign exchange
306

(376
)


Less: Corporate restructuring & other charges
331

974



Add: Corporate revenues, other income and NCI (excluding gains and GE Capital eliminations)
373

424


GE Industrial structural costs (Non-GAAP)
$
5,725

$
6,530

$
(805
)
 
 
 
 
GE Industrial structural costs* include segment structural costs excluding the impact of restructuring and other charges, business acquisitions and dispositions, foreign exchange, plus total Corporate operating profit excluding restructuring and other charges and gains. The Baker Hughes acquisition is represented on a pro-forma basis, which means we calculated our structural costs by including legacy Baker Hughes results for the three months ended March 31, 2017.
We believe that GE Industrial structural costs* are a meaningful measure as they are broader than selling, general and administrative costs and represent the total structural costs in the industrial segments and Corporate that generally do not vary with volume.




















*Non-GAAP Financial Measure

11


GE INDUSTRIAL FREE CASH FLOWS (FCF) AND ADJUSTED GE INDUSTRIAL FCF (NON-GAAP)
 
Three months ended March 31
(Dollars in millions)
2018

2017

V$

GE CFOA (GAAP)
$
(1,012
)
$
368

$
(1,380
)
Add: Gross additions to PP&E
(882
)
(992
)
 
Add: Gross additions to internal-use software
(91
)
(124
)
 
Less: Dividends from GE Capital
—

2,000

 
Less: GE Pension Plan funding
(287
)
—

 
Less: Taxes related to business sale
—

—

 
GE Industrial Free Cash Flows (Non-GAAP)
$
(1,698
)
$
(2,748
)
$
1,050

 
 
 
 
Less: Oil & Gas CFOA
291

$
—

 
Less: Oil & Gas gross additions to PP&E
(173
)
$
—

 
Less: Oil & Gas gross additions to internal-use software
(9
)
$
—

 
Add: BHGE Class B shareholder dividend
127

$
—

 
Adjusted GE Industrial Free Cash Flows (Non-GAAP)
$
(1,681
)
$
(2,748
)
$
1,067

 
 
 
 
In 2018, GE transitioned from reporting an Adjusted GE Industrial CFOA metric to measuring itself on a GE Industrial Free Cash Flow basis*. This metric includes GE CFOA plus investments in property, plant and equipment and additions to internal-use software; this metric excludes any dividends received from GE Capital, any cash received from dispositions of property, plant, and equipment and internal-use software.
 
 
 
 
We believe that investors may also find it useful to compare GE’s Industrial free cash flow performance without the effects of cash used for deal taxes and contributions to the GE Principal Pension Plan. We believe that this measure will better allow management and investors to evaluate the capacity of our industrial operations to generate free cash flows. In addition, we report Adjusted GE Industrial Free Cash Flows* in order to provide a more fair representation of the cash that we are entitled to utilize in a given period. We also use Adjusted GE Industrial Free Cash Flows* as a performance metric at the company-wide level for our annual executive incentive plan for 2018.
 
 
 
 
Management recognizes that the term free cash flow 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.




























*Non-GAAP Financial Measure

12


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GENERAL ELECTRIC CO Reports