frm10q.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 
WASHINGTON, D.C. 20549
 
FORM 10-Q
 (Mark One)
 
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2009
 
OR
 
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ____ to ____
 
Commission file number 001-00035
 
GENERAL ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)

 
New York
  
14-0689340
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)
     
3135 Easton Turnpike, Fairfield, CT
  
06828-0001
(Address of principal executive offices)
  
(Zip Code)
 
(Registrant’s telephone number, including area code) (203) 373-2211
 
_______________________________________________
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer þ
 
Accelerated filer ¨
 
Non-accelerated filer ¨
 
Smaller reporting company ¨
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ
 
There were 10,626,842,000 shares of common stock with a par value of $0.06 per share outstanding at June 26, 2009.

 
(1)
 


 
General Electric Company
 

 
   
Page
Part I - Financial Information
    
     
Item 1. Financial Statements
    
Condensed Statement of Earnings
    
 
3
 
4
 
5
 
6
 
7
 
8
 
49
 
71
 
71
     
Part II - Other Information
    
     
 
72
 
73
 
74
 
75
 
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: the severity and duration of current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; the impact of U.S. and foreign government programs to restore liquidity and stimulate national and global economies; the impact of conditions in the financial and credit markets on the availability and cost of GE Capital’s funding and on our ability to reduce GE Capital’s asset levels and commercial paper exposure as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; 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 soundness of other financial institutions with which GE Capital does business; the adequacy of our cash flow and earnings and other conditions which may affect our ability to maintain our quarterly dividend at the current level; the level of demand and financial performance of the major industries we serve, including, without limitation, air and rail transportation, energy generation, network television, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of proposed financial services regulation; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; 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.

 
(2)
 

Part I. Financial Information
 
 
Item 1. Financial Statements.
 
General Electric Company and consolidated affiliates
 
Condensed Statement of Earnings
 
 
Three months ended June 30  (Unaudited)
 
Consolidated
    
GE(a)
  
Financial Services (GECS)
(In millions; except share amounts)
2009
  
2008
    
2009
  
2008
  
2009
  
2008
                                     
Revenues
                                    
Sales of goods
$
 15,906 
  
$
 17,387 
    
$
 15,701 
  
$
 16,956 
  
$
 205 
  
$
 528 
Sales of services
  
 10,172 
    
 10,712 
      
 10,311 
    
 10,890 
    
– 
    
– 
Other income
  
 34 
    
 574 
      
 80 
    
 667 
    
– 
    
– 
GECS earnings from continuing operations
  
– 
    
– 
      
 349 
    
 2,774 
    
– 
    
– 
GECS revenues from services
  
 12,970 
    
 18,167 
      
– 
    
– 
    
 13,226 
    
 18,504 
   Total revenues
  
 39,082 
    
 46,840 
      
 26,441 
    
 31,287 
    
 13,431 
    
 19,032 
                                     
Costs and expenses
                                    
Cost of goods sold
  
 12,450 
    
 13,885 
      
 12,287 
    
 13,522 
    
 164 
    
 461 
Cost of services sold
  
 6,354 
    
 6,844 
      
 6,493 
    
 7,022 
    
– 
    
– 
Interest and other financial charges
  
 4,653 
    
 6,621 
      
 348 
    
 554 
    
 4,468 
    
 6,343 
Investment contracts, insurance losses and
                                    
   insurance annuity benefits
  
 779 
    
 821 
      
– 
    
– 
    
 823 
    
 870 
Provision for losses on financing receivables
  
 2,817 
    
 1,469 
      
– 
    
– 
    
 2,817 
    
 1,469 
Other costs and expenses
  
 8,933 
    
 10,568 
      
 3,556 
    
 3,687 
    
 5,471 
    
 6,985 
   Total costs and expenses
  
 35,986 
    
 40,208 
      
 22,684 
    
 24,785 
    
 13,743 
    
 16,128 
                                     
Earnings (loss) from continuing operations
                                    
   before income taxes
  
 3,096 
    
 6,632 
      
 3,757 
    
 6,502 
    
 (312)
    
 2,904 
Benefit (provision) for income taxes
  
 (219)
    
 (1,054)
      
 (897)
    
 (981)
    
 678 
    
 (73)
Earnings from continuing operations
  
 2,877 
    
 5,578 
      
 2,860 
    
 5,521 
    
 366 
    
 2,831 
Loss from discontinued operations, net of taxes
  
 (194)
    
 (322)
      
 (194)
    
 (322)
    
 (193)
    
 (337)
Net earnings
  
 2,683 
    
 5,256 
      
 2,666 
    
 5,199 
    
 173 
    
 2,494 
Less net earnings (loss) attributable to
                                    
   noncontrolling interests
  
 12 
    
 184 
      
 (5)
    
 127 
    
 17 
    
 57 
Net earnings attributable to the Company
  
 2,671 
    
 5,072 
      
 2,671 
    
 5,072 
    
 156 
    
 2,437 
Preferred stock dividends declared
  
 (75)
    
– 
      
 (75)
    
– 
    
– 
    
– 
Net earnings attributable to GE common
                                    
   shareowners
$
 2,596 
  
$
 5,072 
    
$
 2,596 
  
$
 5,072 
  
$
 156 
  
$
 2,437 
                                     
                                     
Amounts attributable to the Company
                                    
   Earnings from continuing operations
$
 2,865 
  
$
 5,394 
    
$
 2,865 
  
$
 5,394 
  
$
 349 
  
$
 2,774 
   Loss from discontinued operations, net of taxes
  
 (194)
    
 (322)
      
 (194)
    
 (322)
    
 (193)
    
 (337)
   Net earnings attributable to the Company
$
 2,671 
  
$
 5,072 
    
$
 2,671 
  
$
 5,072 
  
$
 156 
  
$
 2,437 
                                     
Per-share amounts
                                    
   Earnings from continuing operations
                                    
      Diluted earnings per share
$
 0.26 
  
$
 0.54 
                          
      Basic earnings per share
$
 0.26 
  
$
 0.54 
                          
                                     
   Net earnings
                                    
      Diluted earnings per share
$
 0.24 
  
$
 0.51 
                          
      Basic earnings per share
$
 0.24 
  
$
 0.51 
                          
                                     
Dividends declared per share
$
 0.10 
  
$
 0.31 
                          
                                     

(a)
Represents the adding together of all affiliated companies except General Electric Capital Services, Inc. (GECS or financial services) which is presented on a one-line basis.
 
See Note 3 for other-than-temporary impairment amounts.
 
See accompanying notes. Separate information is shown for "GE" and "Financial Services (GECS)." Transactions between GE and GECS have been eliminated from the "Consolidated" columns.
 

 
(3)
 


General Electric Company and consolidated affiliates
 
Condensed Statement of Earnings
 
 
Six months ended June 30  (Unaudited)
 
Consolidated
    
GE(a)
  
Financial Services (GECS)
(In millions; except share amounts)
2009
  
2008
    
2009
  
2008
  
2009
  
2008
                                     
Revenues
                                    
Sales of goods
$
 29,978 
  
$
 32,168 
    
$
 29,514 
  
$
 31,403 
  
$
 478 
  
$
 895 
Sales of services
  
 20,227 
    
 20,253 
      
 20,520 
    
 20,629 
    
– 
    
– 
Other income
  
 462 
    
 1,149 
      
 559 
    
 1,325 
    
– 
    
– 
GECS earnings from continuing operations
  
– 
    
– 
      
 1,310 
    
 5,230 
    
– 
    
– 
GECS revenues from services
  
 26,826 
    
 35,498 
      
– 
    
– 
    
 27,383 
    
 36,175 
   Total revenues
  
 77,493 
    
 89,068 
      
 51,903 
    
 58,587 
    
 27,861 
    
 37,070 
                                     
Costs and expenses
                                    
Cost of goods sold
  
 23,883 
    
 25,793 
      
 23,509 
    
 25,145 
    
 388 
    
 778 
Cost of services sold
  
 12,987 
    
 12,929 
      
 13,280 
    
 13,305 
    
– 
    
– 
Interest and other financial charges
  
 9,980 
    
 13,148 
      
 724 
    
 1,156 
    
 9,589 
    
 12,519 
Investment contracts, insurance losses and
                                    
   insurance annuity benefits
  
 1,525 
    
 1,625 
      
– 
    
– 
    
 1,596 
    
 1,718 
Provision for losses on financing receivables
  
 5,153 
    
 2,812 
      
– 
    
– 
    
 5,153 
    
 2,812 
Other costs and expenses
  
 18,270 
    
 20,775 
      
 6,920 
    
 7,239 
    
 11,600 
    
 13,769 
   Total costs and expenses
  
 71,798 
    
 77,082 
      
 44,433 
    
 46,845 
    
 28,326 
    
 31,596 
                                     
Earnings (loss) from continuing operations
                                    
   before income taxes
  
 5,695 
    
 11,986 
      
 7,470 
    
 11,742 
    
 (465)
    
 5,474 
Benefit (provision) for income taxes
  
 99 
    
 (1,895)
      
 (1,739)
    
 (1,739)
    
 1,838 
    
 (156)
Earnings from continuing operations
  
 5,794 
    
 10,091 
      
 5,731 
    
 10,003 
    
 1,373 
    
 5,318 
Loss from discontinued operations, net of taxes
  
 (215)
    
 (369)
      
 (215)
    
 (369)
    
 (197)
    
 (398)
Net earnings
  
 5,579 
    
 9,722 
      
 5,516 
    
 9,634 
    
 1,176 
    
 4,920 
Less net earnings attributable to noncontrolling interests
  
 97 
    
 346 
      
 34 
    
 258 
    
 63 
    
 88 
Net earnings attributable to the Company
  
 5,482 
    
 9,376 
      
 5,482 
    
 9,376 
    
 1,113 
    
 4,832 
Preferred stock dividends declared
  
 (150)
    
– 
      
 (150)
    
– 
    
– 
    
– 
Net earnings attributable to GE common
                                    
   shareowners
$
 5,332 
  
$
 9,376 
    
$
 5,332 
  
$
 9,376 
  
$
 1,113 
  
$
 4,832 
                                     
                                     
Amounts attributable to the Company
                                    
   Earnings from continuing operations
$
 5,697 
  
$
 9,745 
    
$
 5,697 
  
$
 9,745 
  
$
 1,310 
  
$
 5,230 
   Loss from discontinued operations, net of taxes
  
 (215)
    
 (369)
      
 (215)
    
 (369)
    
 (197)
    
 (398)
   Net earnings attributable to the Company
$
 5,482 
  
$
 9,376 
    
$
 5,482 
  
$
 9,376 
  
$
 1,113 
  
$
 4,832 
                                     
Per-share amounts
                                    
   Earnings from continuing operations
                                    
      Diluted earnings per share
$
 0.52 
  
$
 0.98 
                          
      Basic earnings per share
$
 0.52 
  
$
 0.98 
                          
                                     
   Net earnings
                                    
      Diluted earnings per share
$
 0.50 
  
$
 0.94 
                          
      Basic earnings per share
$
 0.50 
  
$
 0.94 
                          
                                     
Dividends declared per share
$
 0.41 
  
$
 0.62 
                          
                                     

(a)
 
Represents the adding together of all affiliated companies except General Electric Capital Services, Inc. (GECS or financial services) which is presented on a one-line basis.
 
 
See Note 3 for other-than-temporary impairment amounts.
 
See accompanying notes. Separate information is shown for "GE" and "Financial Services (GECS)." Transactions between GE and GECS have been eliminated from the "Consolidated" columns.
 

 
(4)
 

General Electric Company and consolidated affiliates
 
Condensed Statement of Financial Position
 
 
Consolidated
    
GE(a)
  
Financial Services (GECS)
 
June 30,
  
December 31,
    
June 30,
  
December 31,
  
June 30,
  
December 31,
(In millions; except share amounts)
2009
  
2008
    
2009
  
2008
  
2009
  
2008
 
(Unaudited)
        
(Unaudited)
      
(Unaudited)
    
Assets
                                    
Cash and equivalents
$
 52,316 
  
$
 48,187 
    
$
 2,985 
  
$
 12,090 
  
$
 50,017 
  
$
 37,486 
Investment securities
  
 45,214 
    
 41,446 
      
 46 
    
 213 
    
 45,168 
    
 41,236 
Current receivables
  
 19,194 
    
 21,411 
      
 12,228 
    
 15,064 
    
– 
    
– 
Inventories
  
 13,307 
    
 13,674 
      
 13,234 
    
 13,597 
    
 73 
    
 77 
Financing receivables – net
  
 351,601 
    
 365,168 
      
– 
    
– 
    
 359,478 
    
 372,456 
Other GECS receivables
  
 14,517 
    
 13,439 
      
– 
    
– 
    
 18,719 
    
 18,636 
Property, plant and equipment (including
                                    
   equipment leased to others) – net
  
 72,937 
    
 78,530 
      
 14,288 
    
 14,433 
    
 58,649 
    
 64,097 
Investment in GECS
  
– 
    
– 
      
 67,868 
    
 53,279 
    
– 
    
– 
Goodwill
  
 83,825 
    
 81,759 
      
 56,510 
    
 56,394 
    
 27,315 
    
 25,365 
Other intangible assets – net
  
 15,227 
    
 14,977 
      
 11,218 
    
 11,364 
    
 4,009 
    
 3,613 
All other assets
  
 107,565 
    
 106,899 
      
 23,251 
    
 22,435 
    
 85,646 
    
 85,721 
Assets of businesses held for sale
  
 939 
    
 10,556 
      
 707 
    
– 
    
 232 
    
 10,556 
Assets of discontinued operations
  
 1,526 
    
 1,723 
      
 64 
    
 64 
    
 1,462 
    
 1,659 
Total assets
$
 778,168 
  
$
 797,769 
    
$
 202,399 
  
$
 198,933 
  
$
 650,768 
  
$
 660,902 
                                     
Liabilities and equity
                                    
Short-term borrowings
$
 174,644 
  
$
 193,695 
    
$
 2,415 
  
$
 2,375 
  
$
 173,458 
  
$
 193,533 
Accounts payable, principally trade accounts
  
 19,194 
    
 20,819 
      
 10,610 
    
 11,699 
    
 12,401 
    
 13,882 
Progress collections and price adjustments
                                    
   accrued
  
 11,883 
    
 12,536 
      
 12,429 
    
 13,058 
    
– 
    
– 
Other GE current liabilities
  
 19,192 
    
 21,560 
      
 19,192 
    
 21,624 
    
– 
    
– 
Long-term borrowings
  
 339,420 
    
 330,067 
      
 11,250 
    
 9,827 
    
 329,129 
    
 321,068 
Investment contracts, insurance liabilities
                                    
   and insurance annuity benefits
  
 32,377 
    
 34,032 
      
– 
    
– 
    
 32,831 
    
 34,369 
All other liabilities
  
 56,393 
    
 64,796 
      
 31,633 
    
 32,767 
    
 24,886 
    
 32,090 
Deferred income taxes
  
 2,858 
    
 4,584 
      
 (3,915)
    
 (3,949)
    
 6,773 
    
 8,533 
Liabilities of businesses held for sale
  
 268 
    
 636 
      
 72 
    
– 
    
 196 
    
 636 
Liabilities of discontinued operations
  
 1,480 
    
 1,432 
      
 175 
    
 189 
    
 1,305 
    
 1,243 
Total liabilities
  
 657,709 
    
 684,157 
      
 83,861 
    
 87,590 
    
 580,979 
    
 605,354 
                                     
Preferred stock (30,000 shares outstanding at
                                    
   both June 30, 2009 and December 31, 2008)
  
– 
    
– 
      
– 
    
– 
    
– 
    
– 
Common stock (10,626,842,000 and 10,536,897,000
                                    
   shares outstanding at June 30, 2009 and
                                    
   December 31, 2008, respectively)
  
 702 
    
 702 
      
 702 
    
 702 
    
 1 
    
 1 
Accumulated other comprehensive income – net(b)
                                    
   Investment securities
  
 (2,176)
    
 (3,094)
      
 (2,176)
    
 (3,094)
    
 (2,176)
    
 (3,097)
   Currency translation adjustments
  
 2,186 
    
 (299)
      
 2,186 
    
 (299)
    
 494 
    
 (1,258)
   Cash flow hedges
  
 (1,927)
    
 (3,332)
      
 (1,927)
    
 (3,332)
    
 (1,884)
    
 (3,134)
   Benefit plans
  
 (14,649)
    
 (15,128)
      
 (14,649)
    
 (15,128)
    
 (376)
    
 (367)
Other capital
  
 38,371 
    
 40,390 
      
 38,371 
    
 40,390 
    
 27,579 
    
 18,079 
Retained earnings
  
 123,166 
    
 122,123 
      
 123,166 
    
 122,123 
    
 44,230 
    
 43,055 
Less common stock held in treasury
  
 (33,554)
    
 (36,697)
      
 (33,554)
    
 (36,697)
    
– 
    
– 
                                     
Total GE shareowners’ equity
  
 112,119 
    
 104,665 
      
 112,119 
    
 104,665 
    
 67,868 
    
 53,279 
Noncontrolling interests(c)
  
 8,340 
    
 8,947 
      
 6,419 
    
 6,678 
    
 1,921 
    
 2,269 
Total equity
  
 120,459 
    
 113,612 
      
 118,538 
    
 111,343 
    
 69,789 
    
 55,548 
                                     
Total liabilities and equity
$
 778,168 
  
$
 797,769 
    
$
 202,399 
  
$
 198,933 
  
$
 650,768 
  
$
 660,902 
                                     

(a)
 
 
(b)
 
 
(c)
 
 

 
(5)
 

General Electric Company and consolidated affiliates
 
Condensed Statement of Cash Flows
 
 
Six months ended June 30 (Unaudited)
 
Consolidated
    
GE(a)
  
Financial Services (GECS)
(In millions)
2009
  
2008
    
2009
  
2008
  
2009
  
2008
                                     
Cash flows – operating activities
                                    
Net earnings attributable to the Company
$
 5,482 
  
$
 9,376 
    
$
 5,482 
  
$
 9,376 
  
$
 1,113 
  
$
 4,832 
Loss from discontinued operations
  
 215 
    
 369 
      
 215 
    
 369 
    
 197 
    
 398 
Adjustments to reconcile net earnings attributable to the
                                    
   Company to cash provided from operating activities
                                    
      Depreciation and amortization of property,
                                    
         plant and equipment
  
 5,235 
    
 5,355 
      
 1,107 
    
 1,089 
    
 4,128 
    
 4,266 
      Earnings from continuing operations retained
                                    
         by GECS
  
– 
    
– 
      
 (1,310)
    
 (3,211)
    
– 
    
– 
      Deferred income taxes
  
 (1,150)
    
 (308)
      
 29 
    
 (534)
    
 (1,179)
    
 226 
      Decrease (increase) in GE current receivables
  
 2,187 
    
 (842)
      
 2,836 
    
 110 
    
– 
    
– 
      Decrease (increase) in inventories
  
 210 
    
 (1,949)
      
 246 
    
 (1,930)
    
 4 
    
 (19)
      Increase (decrease) in accounts payable
  
 (984)
    
 1,003 
      
 (651)
    
 477 
    
 (1,278)
    
 1,089 
      Increase (decrease) in GE progress collections
  
 (675)
    
 2,776 
      
 (651)
    
 2,866 
    
– 
    
– 
      Provision for losses on GECS financing receivables
  
 5,153 
    
 2,812 
      
– 
    
– 
    
 5,153 
    
 2,812 
      All other operating activities
  
 (10,076)
    
 (987)
      
 (240)
    
 680 
    
 (9,803)
    
 (1,835)
Cash from (used for) operating activities – continuing
                                    
   operations
  
 5,597 
    
 17,605 
      
 7,063 
    
 9,292 
    
 (1,665)
    
 11,769 
Cash from (used for) operating activities – discontinued
                                    
   operations
  
 (44)
    
 485 
      
– 
    
 (9)
    
 (44)
    
 494 
Cash from (used for) operating activities
  
 5,553 
    
 18,090 
      
 7,063 
    
 9,283 
    
 (1,709)
    
 12,263 
                                     
Cash flows – investing activities
                                    
Additions to property, plant and equipment
  
 (4,459)
    
 (8,065)
      
 (1,325)
    
 (1,640)
    
 (3,299)
    
 (6,600)
Dispositions of property, plant and equipment
  
 2,605 
    
 5,325 
      
– 
    
– 
    
 2,605 
    
 5,325 
Net decrease (increase) in GECS financing receivables
  
 25,944 
    
 (23,770)
      
– 
    
– 
    
 25,450 
    
 (24,781)
Proceeds from sales of discontinued operations
  
– 
    
 203 
      
– 
    
 203 
    
– 
    
– 
Proceeds from principal business dispositions
  
 9,032 
    
 4,346 
      
 186 
    
 (76)
    
 8,846 
    
 4,422 
Payments for principal businesses purchased
  
 (5,973)
    
 (14,678)
      
 (336)
    
 (1,916)
    
 (5,637)
    
 (12,762)
Capital contribution from GE to GECS
  
– 
    
– 
      
 (9,500)
    
– 
    
– 
    
– 
All other investing activities
  
 (48)
    
 (3,362)
      
 (14)
    
 212 
    
 974 
    
 (3,567)
Cash from (used for) investing activities – continuing
                                    
   operations
  
 27,101 
    
 (40,001)
      
 (10,989)
    
 (3,217)
    
 28,939 
    
 (37,963)
Cash from (used for) investing activities – discontinued
                                    
   operations
  
 48 
    
 (456)
      
– 
    
– 
    
 48 
    
 (456)
Cash from (used for) investing activities
  
 27,149 
    
 (40,457)
      
 (10,989)
    
 (3,217)
    
 28,987 
    
 (38,419)
                                     
Cash flows – financing activities
                                    
Net increase (decrease) in borrowings (maturities of
                                    
   90 days or less)
  
 (31,184)
    
 6,996 
      
 1,564 
    
 (2,015)
    
 (33,732)
    
 8,732 
Newly issued debt (maturities longer than 90 days)
  
 51,795 
    
 61,355 
      
 1,330 
    
 98 
    
 50,596 
    
 61,396 
Repayments and other reductions (maturities longer
                                    
   than 90 days)
  
 (40,816)
    
 (34,761)
      
 (1,559)
    
 (52)
    
 (39,257)
    
 (34,709)
Net dispositions (purchases) of GE shares for treasury
  
 484 
    
 (1,543)
      
 484 
    
 (1,543)
    
– 
    
– 
Dividends paid to shareowners
  
 (6,705)
    
 (6,215)
      
 (6,705)
    
 (6,215)
    
– 
    
 (2,019)
Capital contribution from GE to GECS
  
– 
    
– 
      
– 
    
– 
    
 9,500 
    
– 
All other financing activities
  
 (2,143)
    
 (163)
      
 (293)
    
– 
    
 (1,850)
    
 (163)
Cash from (used for) financing activities – continuing
                                    
   operations
  
 (28,569)
    
 25,669 
      
 (5,179)
    
 (9,727)
    
 (14,743)
    
 33,237 
Cash used for financing activities – discontinued
                                    
   operations
  
– 
    
 (5)
      
– 
    
– 
    
– 
    
 (5)
Cash from (used for) financing activities
  
 (28,569)
    
 25,664 
      
 (5,179)
    
 (9,727)
    
 (14,743)
    
 33,232 
Increase (decrease) in cash and equivalents
  
 4,133 
    
 3,297 
      
 (9,105)
    
 (3,661)
    
 12,535 
    
 7,076 
Cash and equivalents at beginning of year
  
 48,367 
    
 16,031 
      
 12,090 
    
 6,702 
    
 37,666 
    
 9,739 
Cash and equivalents at June 30
  
 52,500 
    
 19,328 
      
 2,985 
    
 3,041 
    
 50,201 
    
 16,815 
Less cash and equivalents of discontinued operations
                                    
   at June 30
  
 184 
    
 333 
      
– 
    
– 
    
 184 
    
 333 
Cash and equivalents of continuing operations
                                    
   at June 30
$
 52,316 
  
$
 18,995 
    
$
 2,985 
  
$
 3,041 
  
$
 50,017 
  
$
 16,482 
                                     

(a)
 
Represents the adding together of all affiliated companies except General Electric Capital Services, Inc. (GECS or financial services) which is presented on a one-line basis.
 
 
See accompanying notes. Separate information is shown for "GE" and "Financial Services (GECS)." Transactions between GE and GECS have been eliminated from the "Consolidated" columns and are discussed in Note 17.

 
(6)
 

Summary of Operating Segments
General Electric Company and consolidated affiliates
 
 
Three months ended June 30
  
Six months ended June 30
 
(Unaudited)
  
(Unaudited)
(In millions)
2009 
  
2008 
  
2009 
  
2008 
                       
Revenues
                      
   Energy Infrastructure
$
 9,577 
  
$
 9,671 
  
$
 17,816 
  
$
 17,395 
   Technology Infrastructure
  
 10,555 
    
 11,851 
    
 20,991 
    
 22,311 
   NBC Universal
  
 3,565 
    
 3,882 
    
 7,089 
    
 7,466 
   Capital Finance
  
 12,797 
    
 17,981 
    
 25,885 
    
 34,950 
   Consumer & Industrial
  
 2,507 
    
 3,139 
    
 4,728 
    
 6,001 
      Total segment revenues
  
 39,001 
    
 46,524 
    
 76,509 
    
 88,123 
Corporate items and eliminations
  
 81 
    
 316 
    
 984 
    
 945 
Consolidated revenues
$
 39,082 
  
$
 46,840 
  
$
 77,493 
  
$
 89,068 
                       
Segment profit(a)
                      
   Energy Infrastructure
$
 1,792 
  
$
 1,579 
  
$
 3,065 
  
$
 2,649 
   Technology Infrastructure
  
 1,833 
    
 2,056 
    
 3,636 
    
 3,757 
   NBC Universal
  
 539 
    
 909 
    
 930 
    
 1,621 
   Capital Finance
  
 590 
    
 2,903 
    
 1,709 
    
 5,582 
   Consumer & Industrial
  
 111 
    
 138 
    
 147 
    
 282 
      Total segment profit
  
 4,865 
    
 7,585 
    
 9,487 
    
 13,891 
Corporate items and eliminations
  
 (755)
    
 (656)
    
 (1,327)
    
 (1,251)
GE interest and other financial charges
  
 (348)
    
 (554)
    
 (724)
    
 (1,156)
GE provision for income taxes
  
 (897)
    
 (981)
    
 (1,739)
    
 (1,739)
Earnings from continuing operations attributable to
                      
   the Company
  
 2,865 
    
 5,394 
    
 5,697 
    
 9,745 
Loss from discontinued operations, net of taxes,
                      
  attributable to the Company
  
 (194)
    
 (322)
    
 (215)
    
 (369)
Consolidated net earnings attributable to
                      
   the Company
$
 2,671 
  
$
 5,072 
  
$
 5,482 
  
$
 9,376 
                       

(a)
Segment profit always excludes the effects of principal pension plans, results reported as discontinued operations, earnings attributable to noncontrolling interests of consolidated subsidiaries and accounting changes, and may exclude matters such as charges for restructuring; rationalization and other similar expenses; in-process research and development and certain other acquisition-related charges and balances; technology and product development costs; certain gains and losses from acquisitions or dispositions; and litigation settlements or other charges, responsibility for which preceded the current management team. 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 Energy Infrastructure, Technology Infrastructure, NBC Universal and Consumer & Industrial; included in determining segment profit, which we sometimes refer to as “net earnings,” for Capital Finance.
 
See accompanying notes to condensed, consolidated financial statements.
     

 
(7)
 


 
Notes to Condensed, Consolidated Financial Statements (Unaudited)
 
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
The accompanying condensed, consolidated financial statements represent the consolidation of General Electric Company and all companies that we directly or indirectly control, either through majority ownership or otherwise. See Note 1 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2008 (2008 Form 10-K), which discusses our consolidation and financial statement presentation. As used in this report on Form 10-Q (Report) and in our Annual Report on Form 10-K, “GE” represents the adding together of all affiliated companies except General Electric Capital Services, Inc. (GECS or financial services), which is presented on a one-line basis; GECS consists of General Electric Capital Services, Inc. and all of its affiliates; and “Consolidated” represents the adding together of GE and GECS with the effects of transactions between the two eliminated. GE includes Energy Infrastructure, Technology Infrastructure, NBC Universal and Consumer & Industrial. GECS includes Capital Finance. We have reclassified certain prior-period amounts to conform to the current-period’s presentation. Unless otherwise indicated, information in these notes to condensed, consolidated financial statements relates to continuing operations.
 
Accounting Changes
 
Effective January 1, 2008, we adopted Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) 157, Fair Value Measurements, for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis. Effective January 1, 2009, we adopted SFAS 157 for all non-financial instruments accounted for at fair value on a non-recurring basis. SFAS 157 establishes a new framework for measuring fair value and expands related disclosures. See Note 14.
 
On January 1, 2009, we adopted SFAS 141(R), Business Combinations. This standard significantly changes the accounting for business acquisitions both during the period of the acquisition and in subsequent periods. Among the more significant changes in the accounting for acquisitions are the following:
 
·  
Acquired in-process research and development (IPR&D) is accounted for as an asset, with the cost recognized as the research and development is realized or abandoned. IPR&D was previously expensed at the time of the acquisition.
 
·  
Contingent consideration is recorded at fair value as an element of purchase price with subsequent adjustments recognized in operations. Contingent consideration was previously accounted for as a subsequent adjustment of purchase price.
 
·  
Subsequent decreases in valuation allowances on acquired deferred tax assets are recognized in operations after the measurement period. Such changes were previously considered to be subsequent changes in consideration and were recorded as decreases in goodwill.
 
·  
Transaction costs are expensed. These costs were previously treated as costs of the acquisition.
 
In April 2009, the FASB issued FASB Staff Position (FSP) FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, which amends the accounting in SFAS 141(R) for assets and liabilities arising from contingencies in a business combination. The FSP is effective January 1, 2009, and requires pre-acquisition contingencies to be recognized at fair value, if fair value can be reasonably determined during the measurement period. If fair value cannot be reasonably determined, the FSP requires measurement based on the recognition and measurement criteria of SFAS 5, Accounting for Contingencies.
 

 
(8)
 

On January 1, 2009, we adopted SFAS 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51, which requires us to make certain changes to the presentation of our financial statements. This standard requires us to classify noncontrolling interests (previously referred to as “minority interest”) as part of consolidated net earnings ($12 million and $184 million for the three months ended June 30, 2009 and 2008, respectively, and $97 million and $346 million for the six months ended June 30, 2009 and 2008, respectively) and to include the accumulated amount of noncontrolling interests as part of shareowners' equity ($8,340 million and $8,947 million at June 30, 2009 and December 31, 2008, respectively). The net earnings amounts we have previously reported are now presented as "Net earnings attributable to the Company" and, as required by SFAS 160, earnings per share continues to reflect amounts attributable only to the Company. Similarly, in our presentation of shareowners’ equity, we distinguish between equity amounts attributable to GE shareowners and amounts attributable to the noncontrolling interests – previously classified as minority interest outside of shareowners’ equity. Beginning January 1, 2009, dividends to noncontrolling interests are classified as financing cash flows. In addition to these financial reporting changes, SFAS 160 provides for significant changes in accounting related to noncontrolling interests; specifically, increases and decreases in our controlling financial interests in consolidated subsidiaries will be reported in equity similar to treasury stock transactions. If a change in ownership of a consolidated subsidiary results in loss of control and deconsolidation, any retained ownership interests are remeasured with the gain or loss reported in net earnings.
 
Effective January 1, 2009, we adopted Emerging Issues Task Force (EITF) Issue 07-1, Accounting for Collaborative Arrangements, which requires gross basis presentation of revenues and expenses for principal participants in collaborative arrangements. Our Technology Infrastructure and Energy Infrastructure segments enter into collaborative arrangements with manufacturers and suppliers of components used to build and maintain certain engines, aero-derivatives, and turbines, under which GE and these participants share in risks and rewards of these product programs. Adoption of the standard had no effect as our historical presentation had been consistent with the new requirements.
 
Effective April 1, 2009, we adopted FASB FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. Adoption of the FSP had an insignificant effect on our financial statements.
 
Effective April 1, 2009, we adopted FASB FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. See Note 3. The FSP modifies the existing model for recognition and measurement of impairment for debt securities. The two principal changes to the impairment model for securities are as follows:
 
·  
Recognition of an other-than-temporary impairment charge for debt securities is required if any of these conditions are met: (1) we do not expect to recover the entire amortized cost basis of the security, (2) we intend to sell the security or (3) it is more likely than not that we will be required to sell the security before we recover its amortized cost basis.
 
·  
If the first condition above is met, but we do not intend to sell and it is not more likely than not that we will be required to sell the security before recovery of its amortized cost basis, we would be required to record the difference between the security’s amortized cost basis and its recoverable amount in earnings and the difference between the security’s recoverable amount and fair value in other comprehensive income. If either the second or third criteria are met, then we would be required to recognize the entire difference between the security’s amortized cost basis and its fair value in earnings.
 

 
(9)
 

Interim Period Presentation
 
The condensed, consolidated financial statements and notes thereto are unaudited. These statements include all adjustments (consisting of normal recurring accruals) that we considered necessary to present a fair statement of our results of operations, financial position and cash flows. We have evaluated subsequent events that have occurred through August 3, 2009, the date of financial statement issuance. The results reported in these condensed, consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. It is suggested that these condensed, consolidated financial statements be read in conjunction with the financial statements and notes thereto included in our 2008 Form 10-K. We label our quarterly information using a calendar convention, that is, first quarter is labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is our longstanding practice to establish interim quarterly closing dates using a fiscal calendar, which requires our businesses to close their books on either a Saturday or Sunday, depending on the business. The effects of this practice are modest and only exist within a reporting year. The fiscal closing calendar from 1993 through 2013 is available on our website, www.ge.com/secreports.
 
2. DISCONTINUED OPERATIONS
 
Discontinued operations comprised GE Money Japan (our Japanese personal loan business, Lake, and our Japanese mortgage and card businesses, excluding our investment in GE Nissen Credit Co., Ltd.), our U.S. mortgage business (WMC), Plastics, Advanced Materials, GE Life, Genworth Financial, Inc. (Genworth) and most of GE Insurance Solutions Corporation (GE Insurance Solutions). Associated results of operations, financial position and cash flows are separately reported as discontinued operations for all periods presented.
 
GE Money Japan
 
During the third quarter of 2007, we committed to a plan to sell Lake upon determining that, despite restructuring, Japanese regulatory limits for interest charges on unsecured personal loans did not permit us to earn an acceptable return. During the third quarter of 2008, we completed the sale of GE Money Japan, which included Lake, along with our Japanese mortgage and card businesses, excluding our investment in GE Nissen Credit Co., Ltd. As a result, we recognized an after-tax loss of $908 million in 2007 and an incremental loss in 2008 of $361 million. In connection with the transaction, GE Money Japan reduced the proceeds on the sale for estimated interest refund claims in excess of the statutory interest rate. Proceeds from the sale may be increased or decreased based on the actual claims experienced in accordance with terms specified in the agreement, and will not be adjusted unless claims exceed approximately $2,800 million. During the second quarter of 2009, we accrued $132 million, which represents the amount by which we expect claims to exceed those levels and is based on our historical and recent claims experience and the estimated future requests, taking into consideration the ability and likelihood of customers to make claims and other industry risk factors. Uncertainties around the status of laws and regulations and lack of certain information related to the individual customers make it difficult to develop a meaningful estimate of the aggregate claims exposure. We will continue to review our estimated exposure quarterly, and make adjustments when required. GE Money Japan revenues from discontinued operations were an insignificant amount and $261 million in the second quarters of 2009 and 2008, respectively, and an insignificant amount and $551 million in the first six months of 2009 and 2008, respectively. In total, GE Money Japan losses from discontinued operations, net of taxes, were $136 million and $311 million in the second quarters of 2009 and 2008, respectively, and $132 million and $348 million in the first six months of 2009 and 2008, respectively.
 

 
(10)
 

WMC
 
During the fourth quarter of 2007, we completed the sale of our U.S. mortgage business. In connection with the transaction, WMC retained certain obligations related to loans sold prior to the disposal of the business, including WMC’s contractual obligations to repurchase previously sold loans as to which there was an early payment default or with respect to which certain contractual representations and warranties were not met. Reserves related to these obligations were $243 million at June 30, 2009, and $244 million at December 31, 2008. The amount of these reserves is based upon pending and estimated future loan repurchase requests, the estimated percentage of loans validly tendered for repurchase, and our estimated losses on loans repurchased. Based on our historical experience, we estimate that a small percentage of the total loans we originated and sold will be tendered for repurchase, and of those tendered, only a limited amount will qualify as “validly tendered,” meaning the loans sold did not satisfy specified contractual obligations. The amount of our current reserve represents our best estimate of losses with respect to our repurchase obligations. However, actual losses could exceed our reserve amount if actual claim rates, valid tenders or losses we incur on repurchased loans are higher than historically observed. WMC revenues from discontinued operations were $(2) million and $(62) million in the second quarters of 2009 and 2008, respectively, and $(9) million and $(57) million in the first six months of 2009 and 2008, respectively. In total, WMC’s losses from discontinued operations, net of taxes, were $5 million and $20 million in the second quarters of 2009 and 2008, respectively, and $11 million and $27 million in the first six months of 2009 and 2008, respectively.
 
GE industrial earnings (loss) from discontinued operations, net of taxes, were $(1) million and $15 million in the second quarters of 2009 and 2008, respectively, and $(18) million and $29 million in the first six months of 2009 and 2008, respectively.
 
Assets of GE industrial discontinued operations were $64 million at both June 30, 2009 and December 31, 2008. Liabilities of GE industrial discontinued operations were $175 million and $189 million at June 30, 2009, and December 31, 2008, respectively, and primarily represent taxes payable and pension liabilities related to the sale of our Plastics business in 2007.
 
Summarized financial information for discontinued GECS operations is shown below.
 
 
Three months ended June 30
  
Six months ended June 30
(In millions)
2009
  
2008
  
2009
  
2008
                       
Operations
                      
Total revenues
$
 (2)
  
$
 199 
  
$
 (8)
  
$
 494 
                       
Loss from discontinued operations before
                      
   income taxes
$
 (101)
  
$
 (208)
  
$
 (113)
  
$
 (309)
Income tax benefit
  
 39 
    
 103 
    
 43 
    
 143 
Loss from discontinued operations,
                      
   net of taxes
$
 (62)
  
$
 (105)
  
$
 (70)
  
$
 (166)
                       
Disposal
                      
Loss on disposal before income taxes
$
 (130)
  
$
 (222)
  
$
 (123)
  
$
 (222)
Income tax expense
  
 (1)
    
 (10)
    
 (4)
    
 (10)
Loss on disposal, net of taxes
$
 (131)
  
$
 (232)
  
$
 (127)
  
$
 (232)
                       
Loss from discontinued operations, net of taxes(a)
$
 (193)
  
$
 (337)
  
$
 (197)
  
$
 (398)
                       

(a)
The sum of GE industrial earnings (loss) from discontinued operations, net of taxes, and GECS loss from discontinued operations, net of taxes, are reported as GE industrial loss from discontinued operations, net of taxes, on the Condensed Statement of Earnings.
 
  


 
(11)
 


 
At
 
June 30,
  
December 31,
(In millions)
2009
  
2008
           
Assets
          
Cash and equivalents
$
 184 
  
$
 180 
All other assets
  
 13 
    
 19 
Other
  
 1,265 
    
 1,460 
Assets of discontinued operations
$
 1,462 
  
$
 1,659 
           
           
 
At
 
June 30,
  
December 31,
(In millions)
2009
  
2008