GE Report 1qtr 2013
Content
April 19, 2013 06:30 AM Eastern Day light Time
GE Reports 1Q’13 Operating EPS $0.39, +15% , Revenues $35.0B; Infrastructure orders +3% , +6% ex. Wind & FX; Record backlog of $216B, +$6B from year-end; $22B of cash at parent
FAIRFIELD, Conn.--(BUSINESS WIRE)--GE (NYSE: GE): 1Q 2013 Highlights Tw elfth consecutive quarter of strong operating earnings grow th 1Q Operating EPS of $0.39, up 15% 1Q Continuing EPS of $0.35, up 17% “In grow th markets, equipment and service orders grew 17%. We ended the quarter w ith our biggest backlog in history.”
1Q orders up 6% ex. Wind and FX; Grow th region orders up 17% Profit grow th in five of eight businesses versus prior-year period Double-digit Industrial segment revenue grow th in five of nine grow th markets, including China Significant funding of restructuring projects to reduce SG&A GE Capital earnings up 9%; 1Q ENI balance of $402 billion Overall framew ork for the year remains unchanged GE [NYSE: GE] announced today first-quarter 2013 operating earnings of $4.1 billion, or $0.39 per share, up 14% and 15% respectively from the first quarter of 2012. GAAP earnings from continuing operations w ere $3.6 billion, or $0.35 per share, up 13% and 17% respectively. Gains from the sale of GE’s remaining stake in NBCUniversal w ere $0.04 per share above the cost of Industrial restructuring and other charges. Revenues w ere $35.0 billion for the quarter, flat w ith the year-ago period. “Our equipment orders w ere strong in the quarter, grow ing 10%, w ith Oil & Gas orders up 24%, and Aviation up 47%,” said GE Chairman and CEO Jeff Immelt. “In grow th markets, equipment and service orders grew 17%. We ended the quarter w ith our biggest backlog in history.” Total infrastructure orders for the quarter rose 3% to $23.8 billion, and w ere up 6% excluding the effects of Wind and FX. Infrastructure order pricing rose 0.6% for the quarter. The ratio of equipment orders received to sales billed (book-to-bill) w as 1.3. Immelt continued, “GE’s markets w ere mixed. The U.S. and grow th markets w ere in line w ith expectations. We planned for a continued challenging environment in Europe, but conditions w eakened further w ith Industrial segment revenues in the region dow n 17%. Overall, Pow er & Water markets w ere w orse than w e expected. While w e anticipated significantly few er w ind and gas turbine shipments, w e saw additional pressure in European Pow er & Water services. This w eakness also had a negative impact on margins. We alw ays anticipated that the first half of 2013 w ould be our toughest comparison; w e expect Pow er & Water to improve during the year and be positive in the second half.” The remainder of the Industrial segments grew profits 6%, w ith 40 basis points of margin grow th. GE saw solid grow th in Aviation, Transportation and Home & Business Solutions, and excluding the impact of FX, grow th in Oil & Gas. GE continues to implement its cost-out plan. The Company expects to reduce industrial structural costs by at least $1 billion in 2013, and is off to a good start w ith a $200 million reduction in the first quarter. With improving profits in Pow er & Water, and solid performance in our other segments, GE continues to plan margin grow th of 70 basis points for the year. GE’s backlog of equipment and services at the end of the quarter w as its highest ever, at $216 billion. During the quarter, GE
announced a $620 million services contract for QGC’s Queensland Curtis LNG plant off the east coast of Australia, $500 million of contracts to provide pow er equipment and long-term service for the Emirates Aluminum smelter complex in Abu Dhabi, and a $333 million service contract extension for Russia’s Sakhalin-2, one of the w orld’s largest integrated oil and gas projects. GE Capital continued its strategy to reduce the overall size of its portfolio w hile focusing on core grow th. GE Capital earnings grew 9% in the quarter and ENI (excluding cash and equivalents) w as $402 billion at quarter end. General Electric Capital Corporation’s (GECC) Tier 1 common ratio under Basel 1 rose 65 basis points to 11.1%, and net interest margin w as strong at 5%. During the quarter, GE Capital finalized the acquisition of MetLife’s $6.4 billion deposit base and online deposits business. In the quarter, cash from operating activities w as low er due to inventory build for second-half volume, as w ell as tax and long-term incentive plan payouts. GE ended the quarter w ith $90 billion of consolidated cash and cash equivalents. During the quarter GE sold its remaining 49% stake in the NBCUniversal joint venture, and related assets, to Comcast for $18.1 billion. The transaction added significant capital to GE’s capital allocation plan, w hich includes returning approximately $18 billion to shareholders in 2013 through dividends and buybacks. The sale also allow ed GE to accelerate restructuring plans and provided more momentum tow ard its margin goals. In addition, today GECC paid the first-quarter income dividend to GE in the amount of $447 million. GE continued to execute on its balanced capital allocation plan. The Company’s strong cash position enabled the repurchase of $1.9 billion of stock during the first quarter. Combined w ith its dividend, GE returned $3.9 billion to investors during the quarter. Immelt concluded, “Despite the challenging macro environment, GE is w ell-positioned for stronger performance for the remainder of the year and w e are executing on our strategic priorities. We are using our complete and early exit from media to increase investment in our core industrial businesses, through accelerated restructuring, investment in technology, and investment in our global capabilities. We expect our cost-out efforts w ill mitigate w eakness in specific markets, and w e have a very strong cash position. Our overall framew ork for the year remains unchanged.” First-quarter Highlights: First-quarter operating earnings w ere $4.1 billion, up 14% from first-quarter 2012 and operating EPS w as $0.39, up 15%. GAAP earnings from continuing operations (attributable to GE) w ere $3.6 billion, up 13%, or $0.35 per share, up 17% from the first quarter of 2012. A positive one-time gain in the Industrial operations of $0.08 per share from the sale of GE’s remaining stake in the NBCUniversal joint venture w as partially offset by $0.04 per share of restructuring and other charges. GE Capital results include a $0.05 per share benefit from the NBCU sale; GE Capital incurred charges for restructuring and other significant charges of $0.05 per share. Including the effects of discontinued operations, first-quarter net earnings attributable to GE w ere $3.5 billion ($0.34 per share) in 2013 compared w ith $3.0 billion ($0.29 per share) in the first quarter of 2012. This is an increase in net earnings of 16% and net EPS of 17%. First-quarter revenues w ere flat at $35.0 billion. Industrial sales of $22.3 billion fell 6% versus the first quarter of 2012. GECC revenues of $11.5 billion rose 2% from last year. Cash generated from GE operating activities in the first quarter of 2013 totaled $0.2 billion, compared to $2.1 billion last year. The accompanying tables include information integral to assessing the Company’s financial position, operating performance and cash flow . GE w ill discuss preliminary first-quarter results on a Webcast at 8:30 a.m. ET today, available at w w w .ge.com/investor. Related charts w ill be posted there prior to the call. About GE GE (NYSE: GE) w orks 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, pow ering, moving and curing the w orld. Not just imagining. Doing. GE w orks. For more information, visit the company's w ebsite at w w w .ge.com. GE’s Investor Relations w ebsite at w w w .ge.com/investor and our corporate blog at w w w .gereports.com, as w ell as GE’s Facebook page and Tw itter accounts, contain a significant amount of information about GE, including financial and other information for investors. GE encourages investors to visit these w ebsites 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 the European sovereign debt situation; 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; changes in Japanese consumer behavior that may affect our estimates of liability for excess interest refund claims (GE Money Japan); 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 flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level; GECC’s ability to pay dividends to GE at the planned level; our ability to convert pre-order commitments into orders; 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 and affect planned share repurchases and strategic actions, including acquisitions, joint ventures and dispositions; our success in completing announced transactions and integrating acquired businesses; 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.
GENERAL ELECTRIC COMPANY Condensed Statem ent of Earnings Financial Services (GECC) V% (6)% $ 2013 2012 V%
Consolidated Three Months Ended March 31 Revenues and other incom e Sales of goods and services Other income GECC earnings from continuing operations GECC revenues from services Total revenues and other income Costs and expenses Cost of sales, operating and administrative expenses Interest and other financial charges Investment contracts, insurance losses and insurance annuity benefits Provision for losses on financing receivables Total costs and expenses Earnings from continuing operations before incom e taxes Benefit (provision) for income taxes Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings Less net earnings (loss) attributable to 4,126 (506) 3,620 3,934 (665) 5% 4,033 (424) 3,609 26,112 2,621 26,199 3,347 21,493 324 2013 2012 V% 2013
GE(a) 2012
$22,187 $23,527 1,615 557 – – 11,208 10,996 35,010 35,080
(6)% $22,303 $23,687 1,620 600 1,927 1,772 – – -% 25,850 26,059
26 $ 30 (13)% – – – – 11,509 11,310 11,535 11,340 2%
(1)%
22,037 315
4,938 2,400
4,522 3,185
663 1,488 30,884
737 863 31,146 (1)%
– – 21,817
– – 22,352 (2)%
689 1,488 9,515
771 863 9,341 2%
3,707 (450)
9%
2,020 (82) 1,938
1,999 (215) 1,784
1% 9%
3,269 11%
3,257 11%
(109) 3,511
(197) 3,072 14%
(109) 3,500
(197) 3,060 14%
(109) 1,829
(197) 1,587 15%
noncontrolling interests Net earnings attributable to the Com pany
(16)
38
(27)
26
11
12
$ 3,527 $ 3,034 16%
$ 3,527 $ 3,034 16%
$ 1,818 $ 1,575
15%
Am ounts attributable to the Com pany: Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings attributable to the Com pany
$ 3,636 $ 3,231 13%
$ 3,636 $ 3,231 13%
$ 1,927 $ 1,772
9%
(109)
(197)
(109)
(197)
(109)
(197)
$ 3,527 $ 3,034 16% Per-share am ounts - earnings from continuing operations Diluted earnings per share Basic earnings per share Per-share am ounts - net earnings Diluted earnings per share Basic earnings per share Total average equivalent shares Diluted shares Basic shares Dividends declared per com m on share $ $ 0.35 $ 0.35 $ 0.30 17% 0.30 17%
$ 3,527 $ 3,034 16%
$ 1,818 $ 1,575
15%
$ $
0.34 $ 0.34 $
0.29 17% 0.29 17%
10,433 10,374 $
10,611 10,581
(2)% (2)%
0.19 $
0.17 12%
Am ounts attributable to the Com pany: Earnings from continuing operations Adjustment (net of tax): Non-operating pension costs/(income) Operating earnings (non-GAAP measure) Operating earnings – diluted earnings per share
$ 3,636 $ 3,231 13%
423
336
$ 4,059 $ 3,567 14%
$
0.39 $
0.34 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; unaudited. Supplemental data are show n for “GE” and “GECC.” Transactions betw een GE and GECC have been eliminated from the “Consolidated” columns. See Note 1 to the 2012 consolidated financial statements at w w w .ge.com/ar2012 for further information about consolidation matters.
GENERAL ELECTRIC COMPANY Sum m ary of Operating Segm ents (unaudited)
Three m onths ended March 31 (Dollars in millions) Revenues(a) Pow er & Water Oil & Gas Energy Management Aviation Healthcare Transportation Home & Business Solutions Total industrial segment revenues GE Capital Total segment revenues Corporate items and eliminations(a) Consolidated revenues and other incom e from continuing operations 2013 2012 V%
$
4,825 3,399 1,748 5,074 4,289 1,422 1,917 22,674 11,535 34,209 801
$
6,551 3,406 1,722 4,891 4,300 1,270 1,915 24,055 11,340 35,395 (315)
(26)% -% 2% 4% -% 12% -% (6)% 2% (3)% F -%
$ 35,010 Segm ent profit(a) Pow er & Water Oil & Gas Energy Management Aviation Healthcare Transportation Home & Business Solutions Total industrial segment profit GE Capital Total segment profit Corporate items and eliminations(a) GE interest and other financial charges GE provision for income taxes Earnings from continuing operations attributable to the Com pany 3,636 Earnings (loss) from discontinued operations, net of taxes, attributable to the Com pany (109) Consolidated net earnings attributable to the Com pany $ 3,527
$ 35,080
$
719 325 15 936 595 267 79 2,936 1,927 4,863 (479) (324) (424)
$
1,188 340 21 862 585 232 57 3,285 1,772 5,057 (1,061) (315) (450)
(39)% (4)% (29)% 9% 2% 15% 39% (11)% 9% (4)% 55% (3)% 6%
3,231
13%
(197)
45%
$
3,034
16%
(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, w hich w e sometimes refer to as “operating profit,” for Pow er & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation and Home & Business Solutions; included in determining segment profit, w hich w e 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.
GENERAL ELECTRIC COMPANY Sum m ary of Operating Segm ents (unaudited) Additional Inform ation Three m onths ended March 31 (Dollars in millions) GE Capital Revenues Segment profit Revenues Commercial Lending and Leasing (CLL) Consumer Real Estate Energy Financial Services GE Capital Aviation Services (GECAS) Segm ent profit CLL Consumer Real Estate Energy Financial Services GECAS $ 11,535 $ 1,927 $ 11,340 $ 1,772 2% 9% 2013 2012 V%
$
3,507 3,891 1,657 343 1,379
$
4,340 3,877 836 239 1,331
(19)% -% 98% 44% 4%
$
398 523 690 83 348
$
664 829 56 71 318
(40)% (37)% F 17% 9%
GENERAL ELECTRIC COMPANY Condensed Statem ent of Financial Position (unaudited) Consolidated (Dollars in billions) Assets Cash & marketable securities Receivables Inventories Financing receivables - net Property, plant & equipment - net Investment in GECC Goodw ill & intangible assets Other assets Assets of businesses held for sale Assets of discontinued operations Total assets Liabilities and equity Borrow ings and bank deposits Investment contracts, insurance liabilities and insurance annuity benefits Other liabilities Liabilities of businesses held for sale Liabilities of discontinued operations GE(a) Financial Services (GECC) 3/31/13 12/31/12
3/31/13 12/31/12 3/31/13 12/31/12
$ 138.1 $ 125.9 $ 22.1 $ 21.0 21.5 11.5 16.3 15.4 16.2 248.5 258.0 – 68.4 69.0 15.9 – – 79.9 84.6 85.2 56.4 91.6 107.9 30.6 0.3 0.2 0.2 1.9 2.3 –
15.6 $ 116.0 $ 10.9 – 15.3 0.1 – 258.3 16.0 52.5 77.9 – 56.8 28.2 43.9 66.8 – 0.2 – 1.9
110.4 – 0.1 269.0 53.0 – 28.3 70.1 0.2 2.3 533.4
$ 670.7 $ 685.4 $ 232.8 $ 236.4 $ 524.0 $
$ 397.3 $ 414.1 $ 12.3 $
17.5 $ 385.6 $
397.3
28.1 113.9 – 2.4
28.3 111.9 0.2 2.5
– 95.9 – 0.1
– 95.0 – 0.1
28.7 22.9 – 2.3
28.7 22.2 0.2 2.4
GE shareow ners' equity Noncontrolling interests Total liabilities and equity
123.7 5.3
123.0 5.4
123.7 0.8
123.0 0.8
83.9 0.6
81.9 0.7 533.4
$ 670.7 $ 685.4 $ 232.8 $ 236.4 $ 524.0 $
(a) Refers to the Industrial businesses of the Company including GECC on an equity basis.
Supplemental consolidating data are show n for "GE" and "GECC." Transactions betw een GE and GECC have been eliminated from the "Consolidated" columns. See Note 1 to the 2012 consolidated financial statements at w w w .ge.com/ar2012 for further information about consolidation matters.
GENERAL ELECTRIC COMPANY Financial Measures That Supplem ent GAAP
We sometimes use information derived from consolidated financial information but not presented in our financial statements prepared in accordance w ith U.S. generally accepted accounting principles (GAAP). Certain of these data are considered “nonGAAP 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) and GE Capital ending net investment (ENI) excluding cash and equivalents. The reconciliations of these measures to the most comparable GAAP measures follow .
Operating Earnings and Operating Earnings Per Share Three Months Ended March 31 (Dollars in millions; except earnings per share) Earnings from continuing operations attributable to GE Adjustment (net of tax): non-operating pension costs/(income) Operating earnings Earnings per share – diluted(a) Continuing earnings per share Adjustment (net of tax): non-operating pension costs/(income) Operating earnings per share $ $ 0.35 0.04 0.39 $ $ 0.30 0.03 0.34 17% 15% $ $ 2013 3,636 423 4,059 $ $ 2012 3,231 336 3,567 V% 13% 14%
(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, w e believe that our measure of operating earnings provides management and investors w ith a useful measure of the operational results of our business. Other components of GAAP pension cost are mainly driven by market performance, and w e 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 w ith the corresponding GAAP measure, provides management and investors w ith additional information for comparison of our operating results to the operating results of other companies.
GE Capital Ending Net Investm ent (ENI), Excluding Cash and Equivalents March 31, 2013 $ 524.0 5.5 529.5 (1.9) (57.8) 469.8 (67.7) $ 402.1
(In billions) Financial Services (GECC) total assets Adjustment: deferred income taxes GECC total assets Less assets of discontinued operations Less non-interest bearing liabilities GE Capital ENI Less cash and equivalents GE Capital ENI, excluding cash and equivalents
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, w e provide a meaningful measure of assets requiring capital to fund our GE Capital segment as a substantial amount of this cash resulted from debt issuances to pre-fund future debt maturities and w ill not be used to fund additional assets. Providing this measure w ill help investors measure how w e are performing against our previously communicated goal to reduce the size of our financial services segment.
Contacts
GE Investor Contact: Trevor Schauenberg, 203-373-2424 (office) [email protected] or Media Contact: Seth Martin, 203-572-3567 (cell) [email protected]
GE Reports 1Q’13 Operating EPS $0.39, +15% , Revenues $35.0B; Infrastructure orders +3% , +6% ex. Wind & FX; Record backlog of $216B, +$6B from year-end; $22B of cash at parent
FAIRFIELD, Conn.--(BUSINESS WIRE)--GE (NYSE: GE): 1Q 2013 Highlights Tw elfth consecutive quarter of strong operating earnings grow th 1Q Operating EPS of $0.39, up 15% 1Q Continuing EPS of $0.35, up 17% “In grow th markets, equipment and service orders grew 17%. We ended the quarter w ith our biggest backlog in history.”
1Q orders up 6% ex. Wind and FX; Grow th region orders up 17% Profit grow th in five of eight businesses versus prior-year period Double-digit Industrial segment revenue grow th in five of nine grow th markets, including China Significant funding of restructuring projects to reduce SG&A GE Capital earnings up 9%; 1Q ENI balance of $402 billion Overall framew ork for the year remains unchanged GE [NYSE: GE] announced today first-quarter 2013 operating earnings of $4.1 billion, or $0.39 per share, up 14% and 15% respectively from the first quarter of 2012. GAAP earnings from continuing operations w ere $3.6 billion, or $0.35 per share, up 13% and 17% respectively. Gains from the sale of GE’s remaining stake in NBCUniversal w ere $0.04 per share above the cost of Industrial restructuring and other charges. Revenues w ere $35.0 billion for the quarter, flat w ith the year-ago period. “Our equipment orders w ere strong in the quarter, grow ing 10%, w ith Oil & Gas orders up 24%, and Aviation up 47%,” said GE Chairman and CEO Jeff Immelt. “In grow th markets, equipment and service orders grew 17%. We ended the quarter w ith our biggest backlog in history.” Total infrastructure orders for the quarter rose 3% to $23.8 billion, and w ere up 6% excluding the effects of Wind and FX. Infrastructure order pricing rose 0.6% for the quarter. The ratio of equipment orders received to sales billed (book-to-bill) w as 1.3. Immelt continued, “GE’s markets w ere mixed. The U.S. and grow th markets w ere in line w ith expectations. We planned for a continued challenging environment in Europe, but conditions w eakened further w ith Industrial segment revenues in the region dow n 17%. Overall, Pow er & Water markets w ere w orse than w e expected. While w e anticipated significantly few er w ind and gas turbine shipments, w e saw additional pressure in European Pow er & Water services. This w eakness also had a negative impact on margins. We alw ays anticipated that the first half of 2013 w ould be our toughest comparison; w e expect Pow er & Water to improve during the year and be positive in the second half.” The remainder of the Industrial segments grew profits 6%, w ith 40 basis points of margin grow th. GE saw solid grow th in Aviation, Transportation and Home & Business Solutions, and excluding the impact of FX, grow th in Oil & Gas. GE continues to implement its cost-out plan. The Company expects to reduce industrial structural costs by at least $1 billion in 2013, and is off to a good start w ith a $200 million reduction in the first quarter. With improving profits in Pow er & Water, and solid performance in our other segments, GE continues to plan margin grow th of 70 basis points for the year. GE’s backlog of equipment and services at the end of the quarter w as its highest ever, at $216 billion. During the quarter, GE
announced a $620 million services contract for QGC’s Queensland Curtis LNG plant off the east coast of Australia, $500 million of contracts to provide pow er equipment and long-term service for the Emirates Aluminum smelter complex in Abu Dhabi, and a $333 million service contract extension for Russia’s Sakhalin-2, one of the w orld’s largest integrated oil and gas projects. GE Capital continued its strategy to reduce the overall size of its portfolio w hile focusing on core grow th. GE Capital earnings grew 9% in the quarter and ENI (excluding cash and equivalents) w as $402 billion at quarter end. General Electric Capital Corporation’s (GECC) Tier 1 common ratio under Basel 1 rose 65 basis points to 11.1%, and net interest margin w as strong at 5%. During the quarter, GE Capital finalized the acquisition of MetLife’s $6.4 billion deposit base and online deposits business. In the quarter, cash from operating activities w as low er due to inventory build for second-half volume, as w ell as tax and long-term incentive plan payouts. GE ended the quarter w ith $90 billion of consolidated cash and cash equivalents. During the quarter GE sold its remaining 49% stake in the NBCUniversal joint venture, and related assets, to Comcast for $18.1 billion. The transaction added significant capital to GE’s capital allocation plan, w hich includes returning approximately $18 billion to shareholders in 2013 through dividends and buybacks. The sale also allow ed GE to accelerate restructuring plans and provided more momentum tow ard its margin goals. In addition, today GECC paid the first-quarter income dividend to GE in the amount of $447 million. GE continued to execute on its balanced capital allocation plan. The Company’s strong cash position enabled the repurchase of $1.9 billion of stock during the first quarter. Combined w ith its dividend, GE returned $3.9 billion to investors during the quarter. Immelt concluded, “Despite the challenging macro environment, GE is w ell-positioned for stronger performance for the remainder of the year and w e are executing on our strategic priorities. We are using our complete and early exit from media to increase investment in our core industrial businesses, through accelerated restructuring, investment in technology, and investment in our global capabilities. We expect our cost-out efforts w ill mitigate w eakness in specific markets, and w e have a very strong cash position. Our overall framew ork for the year remains unchanged.” First-quarter Highlights: First-quarter operating earnings w ere $4.1 billion, up 14% from first-quarter 2012 and operating EPS w as $0.39, up 15%. GAAP earnings from continuing operations (attributable to GE) w ere $3.6 billion, up 13%, or $0.35 per share, up 17% from the first quarter of 2012. A positive one-time gain in the Industrial operations of $0.08 per share from the sale of GE’s remaining stake in the NBCUniversal joint venture w as partially offset by $0.04 per share of restructuring and other charges. GE Capital results include a $0.05 per share benefit from the NBCU sale; GE Capital incurred charges for restructuring and other significant charges of $0.05 per share. Including the effects of discontinued operations, first-quarter net earnings attributable to GE w ere $3.5 billion ($0.34 per share) in 2013 compared w ith $3.0 billion ($0.29 per share) in the first quarter of 2012. This is an increase in net earnings of 16% and net EPS of 17%. First-quarter revenues w ere flat at $35.0 billion. Industrial sales of $22.3 billion fell 6% versus the first quarter of 2012. GECC revenues of $11.5 billion rose 2% from last year. Cash generated from GE operating activities in the first quarter of 2013 totaled $0.2 billion, compared to $2.1 billion last year. The accompanying tables include information integral to assessing the Company’s financial position, operating performance and cash flow . GE w ill discuss preliminary first-quarter results on a Webcast at 8:30 a.m. ET today, available at w w w .ge.com/investor. Related charts w ill be posted there prior to the call. About GE GE (NYSE: GE) w orks 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, pow ering, moving and curing the w orld. Not just imagining. Doing. GE w orks. For more information, visit the company's w ebsite at w w w .ge.com. GE’s Investor Relations w ebsite at w w w .ge.com/investor and our corporate blog at w w w .gereports.com, as w ell as GE’s Facebook page and Tw itter accounts, contain a significant amount of information about GE, including financial and other information for investors. GE encourages investors to visit these w ebsites 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 the European sovereign debt situation; 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; changes in Japanese consumer behavior that may affect our estimates of liability for excess interest refund claims (GE Money Japan); 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 flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level; GECC’s ability to pay dividends to GE at the planned level; our ability to convert pre-order commitments into orders; 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 and affect planned share repurchases and strategic actions, including acquisitions, joint ventures and dispositions; our success in completing announced transactions and integrating acquired businesses; 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.
GENERAL ELECTRIC COMPANY Condensed Statem ent of Earnings Financial Services (GECC) V% (6)% $ 2013 2012 V%
Consolidated Three Months Ended March 31 Revenues and other incom e Sales of goods and services Other income GECC earnings from continuing operations GECC revenues from services Total revenues and other income Costs and expenses Cost of sales, operating and administrative expenses Interest and other financial charges Investment contracts, insurance losses and insurance annuity benefits Provision for losses on financing receivables Total costs and expenses Earnings from continuing operations before incom e taxes Benefit (provision) for income taxes Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings Less net earnings (loss) attributable to 4,126 (506) 3,620 3,934 (665) 5% 4,033 (424) 3,609 26,112 2,621 26,199 3,347 21,493 324 2013 2012 V% 2013
GE(a) 2012
$22,187 $23,527 1,615 557 – – 11,208 10,996 35,010 35,080
(6)% $22,303 $23,687 1,620 600 1,927 1,772 – – -% 25,850 26,059
26 $ 30 (13)% – – – – 11,509 11,310 11,535 11,340 2%
(1)%
22,037 315
4,938 2,400
4,522 3,185
663 1,488 30,884
737 863 31,146 (1)%
– – 21,817
– – 22,352 (2)%
689 1,488 9,515
771 863 9,341 2%
3,707 (450)
9%
2,020 (82) 1,938
1,999 (215) 1,784
1% 9%
3,269 11%
3,257 11%
(109) 3,511
(197) 3,072 14%
(109) 3,500
(197) 3,060 14%
(109) 1,829
(197) 1,587 15%
noncontrolling interests Net earnings attributable to the Com pany
(16)
38
(27)
26
11
12
$ 3,527 $ 3,034 16%
$ 3,527 $ 3,034 16%
$ 1,818 $ 1,575
15%
Am ounts attributable to the Com pany: Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings attributable to the Com pany
$ 3,636 $ 3,231 13%
$ 3,636 $ 3,231 13%
$ 1,927 $ 1,772
9%
(109)
(197)
(109)
(197)
(109)
(197)
$ 3,527 $ 3,034 16% Per-share am ounts - earnings from continuing operations Diluted earnings per share Basic earnings per share Per-share am ounts - net earnings Diluted earnings per share Basic earnings per share Total average equivalent shares Diluted shares Basic shares Dividends declared per com m on share $ $ 0.35 $ 0.35 $ 0.30 17% 0.30 17%
$ 3,527 $ 3,034 16%
$ 1,818 $ 1,575
15%
$ $
0.34 $ 0.34 $
0.29 17% 0.29 17%
10,433 10,374 $
10,611 10,581
(2)% (2)%
0.19 $
0.17 12%
Am ounts attributable to the Com pany: Earnings from continuing operations Adjustment (net of tax): Non-operating pension costs/(income) Operating earnings (non-GAAP measure) Operating earnings – diluted earnings per share
$ 3,636 $ 3,231 13%
423
336
$ 4,059 $ 3,567 14%
$
0.39 $
0.34 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; unaudited. Supplemental data are show n for “GE” and “GECC.” Transactions betw een GE and GECC have been eliminated from the “Consolidated” columns. See Note 1 to the 2012 consolidated financial statements at w w w .ge.com/ar2012 for further information about consolidation matters.
GENERAL ELECTRIC COMPANY Sum m ary of Operating Segm ents (unaudited)
Three m onths ended March 31 (Dollars in millions) Revenues(a) Pow er & Water Oil & Gas Energy Management Aviation Healthcare Transportation Home & Business Solutions Total industrial segment revenues GE Capital Total segment revenues Corporate items and eliminations(a) Consolidated revenues and other incom e from continuing operations 2013 2012 V%
$
4,825 3,399 1,748 5,074 4,289 1,422 1,917 22,674 11,535 34,209 801
$
6,551 3,406 1,722 4,891 4,300 1,270 1,915 24,055 11,340 35,395 (315)
(26)% -% 2% 4% -% 12% -% (6)% 2% (3)% F -%
$ 35,010 Segm ent profit(a) Pow er & Water Oil & Gas Energy Management Aviation Healthcare Transportation Home & Business Solutions Total industrial segment profit GE Capital Total segment profit Corporate items and eliminations(a) GE interest and other financial charges GE provision for income taxes Earnings from continuing operations attributable to the Com pany 3,636 Earnings (loss) from discontinued operations, net of taxes, attributable to the Com pany (109) Consolidated net earnings attributable to the Com pany $ 3,527
$ 35,080
$
719 325 15 936 595 267 79 2,936 1,927 4,863 (479) (324) (424)
$
1,188 340 21 862 585 232 57 3,285 1,772 5,057 (1,061) (315) (450)
(39)% (4)% (29)% 9% 2% 15% 39% (11)% 9% (4)% 55% (3)% 6%
3,231
13%
(197)
45%
$
3,034
16%
(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, w hich w e sometimes refer to as “operating profit,” for Pow er & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation and Home & Business Solutions; included in determining segment profit, w hich w e 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.
GENERAL ELECTRIC COMPANY Sum m ary of Operating Segm ents (unaudited) Additional Inform ation Three m onths ended March 31 (Dollars in millions) GE Capital Revenues Segment profit Revenues Commercial Lending and Leasing (CLL) Consumer Real Estate Energy Financial Services GE Capital Aviation Services (GECAS) Segm ent profit CLL Consumer Real Estate Energy Financial Services GECAS $ 11,535 $ 1,927 $ 11,340 $ 1,772 2% 9% 2013 2012 V%
$
3,507 3,891 1,657 343 1,379
$
4,340 3,877 836 239 1,331
(19)% -% 98% 44% 4%
$
398 523 690 83 348
$
664 829 56 71 318
(40)% (37)% F 17% 9%
GENERAL ELECTRIC COMPANY Condensed Statem ent of Financial Position (unaudited) Consolidated (Dollars in billions) Assets Cash & marketable securities Receivables Inventories Financing receivables - net Property, plant & equipment - net Investment in GECC Goodw ill & intangible assets Other assets Assets of businesses held for sale Assets of discontinued operations Total assets Liabilities and equity Borrow ings and bank deposits Investment contracts, insurance liabilities and insurance annuity benefits Other liabilities Liabilities of businesses held for sale Liabilities of discontinued operations GE(a) Financial Services (GECC) 3/31/13 12/31/12
3/31/13 12/31/12 3/31/13 12/31/12
$ 138.1 $ 125.9 $ 22.1 $ 21.0 21.5 11.5 16.3 15.4 16.2 248.5 258.0 – 68.4 69.0 15.9 – – 79.9 84.6 85.2 56.4 91.6 107.9 30.6 0.3 0.2 0.2 1.9 2.3 –
15.6 $ 116.0 $ 10.9 – 15.3 0.1 – 258.3 16.0 52.5 77.9 – 56.8 28.2 43.9 66.8 – 0.2 – 1.9
110.4 – 0.1 269.0 53.0 – 28.3 70.1 0.2 2.3 533.4
$ 670.7 $ 685.4 $ 232.8 $ 236.4 $ 524.0 $
$ 397.3 $ 414.1 $ 12.3 $
17.5 $ 385.6 $
397.3
28.1 113.9 – 2.4
28.3 111.9 0.2 2.5
– 95.9 – 0.1
– 95.0 – 0.1
28.7 22.9 – 2.3
28.7 22.2 0.2 2.4
GE shareow ners' equity Noncontrolling interests Total liabilities and equity
123.7 5.3
123.0 5.4
123.7 0.8
123.0 0.8
83.9 0.6
81.9 0.7 533.4
$ 670.7 $ 685.4 $ 232.8 $ 236.4 $ 524.0 $
(a) Refers to the Industrial businesses of the Company including GECC on an equity basis.
Supplemental consolidating data are show n for "GE" and "GECC." Transactions betw een GE and GECC have been eliminated from the "Consolidated" columns. See Note 1 to the 2012 consolidated financial statements at w w w .ge.com/ar2012 for further information about consolidation matters.
GENERAL ELECTRIC COMPANY Financial Measures That Supplem ent GAAP
We sometimes use information derived from consolidated financial information but not presented in our financial statements prepared in accordance w ith U.S. generally accepted accounting principles (GAAP). Certain of these data are considered “nonGAAP 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) and GE Capital ending net investment (ENI) excluding cash and equivalents. The reconciliations of these measures to the most comparable GAAP measures follow .
Operating Earnings and Operating Earnings Per Share Three Months Ended March 31 (Dollars in millions; except earnings per share) Earnings from continuing operations attributable to GE Adjustment (net of tax): non-operating pension costs/(income) Operating earnings Earnings per share – diluted(a) Continuing earnings per share Adjustment (net of tax): non-operating pension costs/(income) Operating earnings per share $ $ 0.35 0.04 0.39 $ $ 0.30 0.03 0.34 17% 15% $ $ 2013 3,636 423 4,059 $ $ 2012 3,231 336 3,567 V% 13% 14%
(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, w e believe that our measure of operating earnings provides management and investors w ith a useful measure of the operational results of our business. Other components of GAAP pension cost are mainly driven by market performance, and w e 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 w ith the corresponding GAAP measure, provides management and investors w ith additional information for comparison of our operating results to the operating results of other companies.
GE Capital Ending Net Investm ent (ENI), Excluding Cash and Equivalents March 31, 2013 $ 524.0 5.5 529.5 (1.9) (57.8) 469.8 (67.7) $ 402.1
(In billions) Financial Services (GECC) total assets Adjustment: deferred income taxes GECC total assets Less assets of discontinued operations Less non-interest bearing liabilities GE Capital ENI Less cash and equivalents GE Capital ENI, excluding cash and equivalents
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, w e provide a meaningful measure of assets requiring capital to fund our GE Capital segment as a substantial amount of this cash resulted from debt issuances to pre-fund future debt maturities and w ill not be used to fund additional assets. Providing this measure w ill help investors measure how w e are performing against our previously communicated goal to reduce the size of our financial services segment.
Contacts
GE Investor Contact: Trevor Schauenberg, 203-373-2424 (office) [email protected] or Media Contact: Seth Martin, 203-572-3567 (cell) [email protected]
