1 PRESS RELEASE • 4Q’17 continuing operations EPS (GAAP) of $(1.15); full-year of $(0.68) • 4Q’17 Industrial operating + Verticals EPS (non-GAAP) of $(1.23); full-year of $(0.45) • Industrial + Verticals at low end of guidance excluding $(1.49) of charges for insurance-related items $(0.91), the Tax Cuts and Jobs Act (“U.S. tax reform”) $(0.40), and industrial portfolio items $(0.18) • 4Q’17 GE CFOA of $7.0 billion; adjusted Industrial CFOA -a) (non-GAAP) of $7.8 billion; full-year adjusted Industrial CFOA of $9.7 billion • Power continues to be challenging, Power segment profit down 88% • Strong performance in Aviation and Healthcare • $1.7 billion of structural cost -b) (non-GAAP) out in 2017 BOSTON - January 24, 2018 - GE (NYSE:GE) announced results today for the fourth quarter of 2017. GE Chairman and CEO John Flannery said, “In the fourth quarter, EPS was at the low-end of guidance, excluding insurance-related items, U.S. tax reform, and industrial portfolio actions. Cash performance was above expectations and our visibility and execution on cash is improving. Aviation and Healthcare had strong performances in the quarter. Power was down significantly and we expect market challenges to continue. Our results this quarter demonstrate some of the early progress we are seeing from our key initiatives. The team is focused on operational execution, capital allocation and deep cost reduction to position us for continued improvement in 2018.” Fourth Quarter Results Total Year Results (Dollars in millions; except per-share amounts) December 31 2017 2016 Year on Year 2017 2016 Year on Year GAAP Metrics Continuing Operations EPS $ (1.15) $ 0.39 U $ (0.68 ) $ 1.00 U Net Earnings EPS (1.13) 0.39 U (0.72) 0.89 U Total Revenues 31,402 33,088 (5) % 122,092 123,693 (1) % Industrial Margin 1.1 % 12.0 % (1,090) bps 5.7 % 11.4 % (570) bps GE CFOA 6,990 11,618 (40) % 11,040 29,960 (63) % Non-GAAP Metrics Industrial Operating + Verticals EPS $ (1.23) $ 0.46 U $ (0.45 ) $ 1.49 U Industrial Segment Organic Revenues 28,712 30,503 (6) % 109,430 109,296 — % Industrial Operating Profit/(Loss) -c) 3,526 5,226 (33) % 13,868 15,558 (11) % Industrial Operating Profit/(Loss) Margin -c) 11.2 % 16.8 % (560) bps 12.1 % 14.0 % (190) bps Adjusted Industrial CFOA -a) 7,757 8,242 (6) % 9,698 11,610 (16) % -a) Excluding deal taxes and GE Pension Plan funding, and with BHGE on a dividend basis -b) Excludes impact of acquisition and disposition activity in Industrial segments -c) Excludes non-operating pension, gains/(losses) and restructuring & other We present both GAAP and non-GAAP measures to provide investors with additional information. The non-GAAP measures are focused on our ongoing operations. Please see pages 8-12 for explanations of why we use these non-GAAP measures and the reconciliation to the most comparable GAAP financial measures. GE ANNOUNCES FOURTH QUARTER 2017 RESULTS
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GE ANNOUNCES FOURTH QUARTER 2017 RESULTS - General … · GENERAL ELECTRIC COMPANY CONDENSED STATEMENT OF EARNINGS (LOSS) (UNAUDITED) Consolidated GE(a) Financial Services (GE Capital)
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1
PRESS RELEASE
• 4Q’17 continuing operations EPS (GAAP) of $(1.15); full-year of $(0.68)
• 4Q’17 Industrial operating + Verticals EPS (non-GAAP) of $(1.23); full-year of $(0.45)
• Industrial + Verticals at low end of guidance excluding $(1.49) of charges for insurance-related items
$(0.91), the Tax Cuts and Jobs Act (“U.S. tax reform”) $(0.40), and industrial portfolio items $(0.18)
• 4Q’17 GE CFOA of $7.0 billion; adjusted Industrial CFOA-a) (non-GAAP) of $7.8 billion; full-year adjusted
Industrial CFOA of $9.7 billion
• Power continues to be challenging, Power segment profit down 88%
• Strong performance in Aviation and Healthcare
• $1.7 billion of structural cost-b) (non-GAAP) out in 2017
BOSTON - January 24, 2018 - GE (NYSE:GE) announced results today for the fourth quarter of 2017.
GE Chairman and CEO John Flannery said, “In the fourth quarter, EPS was at the low-end of guidance, excluding insurance-related items,
U.S. tax reform, and industrial portfolio actions. Cash performance was above expectations and our visibility and execution on cash is
improving. Aviation and Healthcare had strong performances in the quarter. Power was down significantly and we expect market challenges
to continue. Our results this quarter demonstrate some of the early progress we are seeing from our key initiatives. The team is focused on
operational execution, capital allocation and deep cost reduction to position us for continued improvement in 2018.”
Fourth Quarter Results Total Year Results
(Dollars in millions; except per-share amounts) December 31 2017 2016
Year on Year 2017 2016
Year on Year
GAAP Metrics
Continuing Operations EPS $ (1.15 ) $ 0.39 U $ (0.68 ) $ 1.00 U Net Earnings EPS (1.13 ) 0.39 U (0.72 ) 0.89 U Total Revenues 31,402 33,088 (5 ) % 122,092 123,693 (1 ) %
-a) Excluding deal taxes and GE Pension Plan funding, and with BHGE on a dividend basis
-b) Excludes impact of acquisition and disposition activity in Industrial segments
-c) Excludes non-operating pension, gains/(losses) and restructuring & other
We present both GAAP and non-GAAP measures to provide investors with additional information. The non-GAAP measures are
focused on our ongoing operations. Please see pages 8-12 for explanations of why we use these non-GAAP measures and the
reconciliation to the most comparable GAAP financial measures.
GE ANNOUNCES FOURTH QUARTER 2017 RESULTS
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Results by Reporting Segment The following segment discussions and variance explanations are intended to reflect management’s view of the relevant comparisons
of financial results.
Power
Three months ended December 31 Twelve months ended December 31
Three months ended December 31 2017 2016 V% 2017 2016 V% 2017 2016 V%
Revenues and other income Sales of goods and services $ 31,297 $ 30,234 4 % $ 31,356 $ 30,345 3 % $ 29 $ 27 7 %
Other income (loss) (987 ) 619 (1,142 ) 733 — — GE Capital earnings (loss) from continuing operations — — (6,569 ) 215 — — GE Capital revenues from services 1,091 2,235 — — 1,516 2,622
Total revenues and other income 31,402 33,088 (5 )% 23,645 31,294 (24 )% 1,545 2,649 (42 )%
Costs and expenses Cost of sales 25,688 23,773 25,230 23,318 546 593 Selling, general and administrative expenses 4,631 4,543 4,446 4,029 318 709 Interest and other financial charges 1,324 1,002 834 536 772 784 Investment contracts, insurance losses and
insurance annuity benefits 10,260 696 — — 10,255 674 Other costs and expenses(b) 2,101 182 217 — 1,743 191
Total costs and expenses 44,004 30,196 46 % 30,729 27,883 10 % 13,634 2,952 U
Earnings (loss) from continuing operations before income taxes (12,603 ) 2,893 U (7,084 ) 3,411 U (12,088 ) (303 ) U
Benefit (provision) for income taxes 2,740 766 (2,962 ) 67 5,702 699 Earnings (loss) from continuing operations (9,863 ) 3,659 U (10,046 ) 3,478 U (6,386 ) 396 U
Earnings (loss) from discontinued operations, net of taxes 182 — 182 4 182 (1 )
Net earnings (loss) (9,681 ) 3,659 U (9,864 ) 3,482 U (6,204 ) 396 U
Less net earnings (loss) attributable to noncontrolling interests (39 ) (8 ) (38 ) (4 ) (1 ) (4 )
Net earnings (loss) attributable to the Company (9,642 ) 3,667 U (9,826 ) 3,486 U (6,203 ) 399 U
Preferred stock dividends (184 ) (181 ) — — (184 ) (181 ) Net earnings (loss) attributable to
GE common shareowners $ (9,826 ) $ 3,486 U $ (9,826 ) $ 3,486 U $ (6,388 ) $ 218 U
Amounts attributable to GE common shareowners: Earnings (loss) from continuing operations $ (9,863 ) $ 3,659 U $ (10,046 ) $ 3,478 U $ (6,386 ) $ 396 U
Less net earnings (loss) attributable to noncontrolling interests, continuing operations (39 ) (5 ) (38 ) (4 ) (1 ) (1 )
Earnings (loss) from continuing operations attributable to the Company (9,824 ) 3,664 U (10,008 ) 3,483 U (6,385 ) 397 U
Revenues and other income Sales of goods and services $ 113,192 $ 110,390 3 % $ 113,479 $ 110,835 2 % $ 130 $ 115 13 %
Other income 1,625 4,005 1,436 4,092 — — GE Capital earnings (loss) from continuing operations — — (6,765 ) (1,251 ) — — GE Capital revenues from services 7,276 9,297 — — 8,940 10,790
Total revenues and other income 122,092 123,693 (1 )% 108,150 113,676 (5 )% 9,070 10,905 (17 )%
Costs and expenses Cost of sales 91,934 87,483 90,053 85,712 2,298 2,331 Selling, general and administrative expenses 18,280 18,377 17,103 16,123 1,676 2,947 Interest and other financial charges 4,869 5,025 2,753 2,026 3,145 3,790 Investment contracts, insurance losses and
insurance annuity benefits 12,168 2,797 — — 12,213 2,861 Other costs and expenses(b) 3,632 982 1,165 — 2,371 1,013
Total costs and expenses 130,883 114,663 14 % 111,072 103,860 7 % 21,703 12,942 68 %
Earnings (loss) from continuing operations before income taxes (8,791 ) 9,030 U (2,922 ) 9,815 U (12,633 ) (2,037 ) U
Benefit (provision) for income taxes 3,043 464 (3,259 ) (967 ) 6,302 1,431 Earnings (loss) from continuing operations (5,748 ) 9,494 U (6,181 ) 8,849 U (6,331 ) (606 ) U
Earnings (loss) from discontinued operations, net of taxes (309 ) (954 ) (315 ) (952 ) (312 ) (954 )
Net earnings (loss) (6,056 ) 8,540 U (6,496 ) 7,896 U (6,643 ) (1,560 ) U
Less net earnings (loss) attributable to noncontrolling interests (270 ) (291 ) (274 ) (279 ) 4 (12 )
Net earnings (loss) attributable to the Company (5,786 ) 8,831 U (6,222 ) 8,176 U (6,647 ) (1,548 ) U
Preferred stock dividends (436 ) (656 ) — — (436 ) (656 ) Net earnings (loss) attributable to
GE common shareowners $ (6,222 ) $ 8,176 U $ (6,222 ) $ 8,176 U $ (7,083 ) $ (2,204 ) U
Amounts attributable to GE common shareowners: Earnings (loss) from continuing operations $ (5,748 ) $ 9,494 U $ (6,181 ) $ 8,849 U $ (6,331 ) $ (606 ) U
Less net earnings (loss) attributable to noncontrolling interests, continuing operations (277 ) (290 ) (274 ) (279 ) (3 ) (10 )
Earnings (loss) from continuing operations attributable to the Company (5,471 ) 9,784 U (5,907 ) 9,128 U (6,328 ) (595 ) U
(a) The tax effect on non-operating pension cost was calculated using a 35% U.S. federal statutory tax rate, based on its applicability to such cost.
(b) Earnings (loss) per share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.
Operating earnings (loss) excludes non-service related pension cost of our principal pension plans comprising interest cost, expected
return on plan assets and amortization of actuarial gains/losses. The service cost, prior service cost and any curtailment gain or loss
components of our principal pension plans are included in operating earnings (loss). We believe that these components of pension cost
better reflect the ongoing service-related cost of providing pension benefits to our employees. As such, we believe that our measure of
operating earnings (loss) 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 cost are necessarily indicative of
the current or future cash flow requirements related to our pension plans. We 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. We also believe that presenting operating earnings (loss) separately for our industrial
businesses provides management and investors with useful information about the relative size of our industrial and financial services
businesses in relation to the total company.
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INDUSTRIAL OPERATING + VERTICALS EARNINGS (LOSS) AND EPS AND INDUSTRIAL OPERATING + VERTICALS EARNINGS (LOSS) AND EPS (EXCLUDING 4Q CHARGES NOT INCLUDED IN NOVEMBER 13, 2017 GUIDANCE)
Three months ended December 31 Twelve months ended December 31
(Dollars in millions; except per share amounts) 2017 2016 V% 2017 2016 V%
GE Capital earnings (loss) from continuing operations attributable to GE common shareowners (GAAP) $ (6,569 ) $ 215
U (6,765 ) (1,251 ) U
Less: GE Capital other continuing earnings (loss) (Other Capital)(a) 1,016 (262 ) F (557 ) (3,143 ) 82 %
Verticals earnings (loss)(b) $ (7,585 ) $ 478 U $ (6,208 ) $ 1,892 U