geform10q2q13.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, 2013
 
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 10,183,781,000 shares of common stock with a par value of $0.06 per share outstanding at June 30, 2013.

 
 

 
(1)
 
 

General Electric Company
 
   
Page
Part I - Financial Information
    
     
Item 1. Financial Statements
    
Condensed Statement of Earnings
    
       Three Months Ended June 30, 2013
  
3
Six Months Ended June 30, 2013
  
4
Condensed Consolidated Statement of Comprehensive Income
  
5
Condensed Consolidated Statement of Changes in Shareowners' Equity
  
5
Condensed Statement of Financial Position
  
6
Condensed Statement of Cash Flows
  
7
Summary of Operating Segments
  
8
Notes to Condensed, Consolidated Financial Statements (Unaudited)
  
9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
  
61
Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
87
Item 4. Controls and Procedures
  
87
     
Part II - Other Information
    
     
Item 1. Legal Proceedings
Item 2. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
88
90
Item 6. Exhibits
  
91
Signatures
  
92
 
Forward-Looking Statements
 
This document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; potential market disruptions or other impacts arising in the United States or Europe from developments in sovereign debt situations; the impact of conditions in the financial and credit markets on the availability and cost of General Electric Capital Corporation’s (GECC) funding and on our ability to reduce GECC’s asset levels as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; 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 flows and earnings and other conditions, which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; GECC’s ability to pay dividends to GE at the planned level; our ability to convert pre-order commitments 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.
 
GE’s Investor Relations website at www.ge.com/investor and our corporate blog at www.gereports.com, as well as GE’s Facebook page and Twitter accounts, contain a significant amount of information about GE, including financial and other information for investors.  GE encourages investors to visit these websites from time to time, as information is updated and new information is posted.
 
 
 

 
(2)
 
 


Part I. Financial Information
 
 
Item 1. Financial Statements.
 
 
Three months ended June 30 (Unaudited)
 
Consolidated
    
GE(a)
  
Financial Services (GECC)
(In millions, except share amounts)
2013
  
2012
    
2013
  
2012
  
2013
  
2012
                                     
Revenues and other income
                                    
Sales of goods
$
 17,262
  
$
 18,185
    
$
 17,299
  
$
 18,215
  
$
 31
  
$
 26
Sales of services
  
 7,240
    
 6,818
      
 7,324
    
 6,923
    
– 
    
– 
Other income
  
 104
    
 393
      
 2
    
 409
    
– 
    
– 
GECC earnings from continuing operations
  
– 
    
– 
      
 1,922
    
 2,122
    
– 
    
– 
GECC revenues from services
  
 10,517
    
 11,001
      
– 
    
– 
    
 10,949
    
 11,328
   Total revenues and other income
  
 35,123
    
 36,397
      
 26,547
    
 27,669
    
 10,980
    
 11,354
                                     
Costs and expenses
                                    
Cost of goods sold
  
 13,865
    
 14,797
      
 13,909
    
 14,831
    
 25
    
 23
Cost of services sold
  
 4,623
    
 4,402
      
 4,707
    
 4,507
    
– 
    
– 
Interest and other financial charges
  
 2,617
    
 3,202
      
 326
    
 351
    
 2,405
    
 2,979
Investment contracts, insurance losses and
                                    
   insurance annuity benefits
  
 687
    
 662
      
– 
    
– 
    
 728
    
 702
Provision for losses on financing receivables
  
 1,029
    
 743
      
– 
    
– 
    
 1,029
    
 743
Other costs and expenses
  
 8,573
    
 8,404
      
 3,904
    
 3,911
    
 4,843
    
 4,667
   Total costs and expenses
  
 31,394
    
 32,210
      
 22,846
    
 23,600
    
 9,030
    
 9,114
                                     
Earnings from continuing operations
                                    
   before income taxes
  
 3,729
    
 4,187
      
 3,701
    
 4,069
    
 1,950
    
 2,240
Benefit (provision) for income taxes
  
 (308)
    
 (496)
      
 (297)
    
 (392)
    
 (11)
    
 (104)
Earnings from continuing operations
  
 3,421
    
 3,691
      
 3,404
    
 3,677
    
 1,939
    
 2,136
Earnings (loss) from discontinued operations,
                                    
   net of taxes
  
 (122)
    
 (553)
      
 (122)
    
 (553)
    
 (121)
    
 (553)
Net earnings
  
 3,299
    
 3,138
      
 3,282
    
 3,124
    
 1,818
    
 1,583
Less net earnings (loss) attributable to
                                    
   noncontrolling interests
  
 166
    
 33
      
 149
    
 19
    
 17
    
 14
Net earnings attributable to the Company
  
 3,133
    
 3,105
      
 3,133
    
 3,105
    
 1,801
    
 1,569
Preferred stock dividends declared
  
– 
    
– 
      
– 
    
– 
    
 (135)
    
– 
Net earnings) attributable to GE common
                                    
   shareowners
$
 3,133
  
$
 3,105
    
$
 3,133
  
$
 3,105
  
$
 1,666
  
$
 1,569
                                     
                                     
Amounts attributable to the Company
                                    
   Earnings from continuing operations
$
 3,255
  
$
 3,658
    
$
 3,255
  
$
 3,658
  
$
 1,922
  
$
 2,122
   Earnings (loss) from discontinued operations,
                                    
      net of taxes
  
 (122)
    
 (553)
      
 (122)
    
 (553)
    
 (121)
    
 (553)
   Net earnings attributable to the Company
$
 3,133
  
$
 3,105
    
$
 3,133
  
$
 3,105
  
$
 1,801
  
$
 1,569
                                     
Per-share amounts
                                    
   Earnings from continuing operations
                                    
      Diluted earnings per share
$
 0.31
  
$
 0.34
                          
      Basic earnings per share
$
 0.32
  
$
 0.35
                          
                                     
   Net earnings
                                    
      Diluted earnings per share
$
 0.30
  
$
 0.29
                          
      Basic earnings per share
$
 0.30
  
$
 0.29
                          
                                     
Dividends declared per common share
$
 0.19
  
$
 0.17
                          
                                     
                                     

(a)
Represents the adding together of all affiliated companies except General Electric Capital Corporation (GECC 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 (GECC)." Transactions between GE and GECC 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 (GECC)
(In millions, except share amounts)
2013
  
2012
    
2013
  
2012
  
2013
  
2012
                                     
Revenues and other income
                                    
Sales of goods
$
 32,936
  
$
 35,500
    
$
 32,976
  
$
 35,572
  
$
 57
  
$
 56
Sales of services
  
 13,753
    
 13,030
      
 13,950
    
 13,253
    
– 
    
– 
Other income
  
 1,719
    
 950
      
 1,622
    
 1,009
    
– 
    
– 
GECC earnings from continuing operations
  
– 
    
– 
      
 3,849
    
 3,894
    
– 
    
– 
GECC revenues from services
  
 21,725
    
 21,997
      
– 
    
– 
    
 22,458
    
 22,638
   Total revenues and other income
  
 70,133
    
 71,477
      
 52,397
    
 53,728
    
 22,515
    
 22,694
                                     
Costs and expenses
                                    
Cost of goods sold
  
 26,732
    
 28,262
      
 26,783
    
 28,343
    
 46
    
 48
Cost of services sold
  
 9,072
    
 8,806
      
 9,269
    
 9,029
    
– 
    
– 
Interest and other financial charges
  
 5,238
    
 6,549
      
 650
    
 666
    
 4,805
    
 6,164
Investment contracts, insurance losses and
                                    
   insurance annuity benefits
  
 1,350
    
 1,399
      
– 
    
– 
    
 1,417
    
 1,473
Provision for losses on financing receivables
  
 2,517
    
 1,606
      
– 
    
– 
    
 2,517
    
 1,606
Other costs and expenses
  
 17,369
    
 16,734
      
 7,961
    
 7,914
    
 9,760
    
 9,164
   Total costs and expenses
  
 62,278
    
 63,356
      
 44,663
    
 45,952
    
 18,545
    
 18,455
                                     
Earnings from continuing operations
                                    
   before income taxes
  
 7,855
    
 8,121
      
 7,734
    
 7,776
    
 3,970
    
 4,239
Benefit (provision) for income taxes
  
 (814)
    
 (1,161)
      
 (721)
    
 (842)
    
 (93)
    
 (319)
Earnings from continuing operations
  
 7,041
    
 6,960
      
 7,013
    
 6,934
    
 3,877
    
 3,920
Earnings (loss) from discontinued operations,
                                    
   net of taxes
  
 (231)
    
 (750)
      
 (231)
    
 (750)
    
 (230)
    
 (750)
Net earnings
  
 6,810
    
 6,210
      
 6,782
    
 6,184
    
 3,647
    
 3,170
Less net earnings (loss) attributable to
                                    
   noncontrolling interests
  
 150
    
 71
      
 122
    
 45
    
 28
    
 26
Net earnings attributable to the Company
  
 6,660
    
 6,139
      
 6,660
    
 6,139
    
 3,619
    
 3,144
Preferred stock dividends declared
  
– 
    
– 
      
– 
    
– 
    
 (135)
    
– 
Net earnings (loss) attributable to GE common
                                    
   shareowners
$
 6,660
  
$
 6,139
    
$
 6,660
  
$
 6,139
  
$
 3,484
  
$
 3,144
                                     
                                     
Amounts attributable to the Company
                                    
   Earnings from continuing operations
$
 6,891
  
$
 6,889
    
$
 6,891
  
$
 6,889
  
$
 3,849
  
$
 3,894
   Earnings (loss) from discontinued operations,
                                    
      net of taxes
  
 (231)
    
 (750)
      
 (231)
    
 (750)
    
 (230)
    
 (750)
   Net earnings attributable to the Company
$
 6,660
  
$
 6,139
    
$
 6,660
  
$
 6,139
  
$
 3,619
  
$
 3,144
                                     
Per-share amounts
                                    
   Earnings from continuing operations
                                    
      Diluted earnings per share
$
 0.66
  
$
 0.65
                          
      Basic earnings per share
$
 0.67
  
$
 0.65
                          
                                     
   Net earnings
                                    
      Diluted earnings per share
$
 0.64
  
$
 0.58
                          
      Basic earnings per share
$
 0.65
  
$
 0.58
                          
                                     
Dividends declared per common share
$
 0.38
  
$
 0.34
                          
                                     
                                     

(a)
Represents the adding together of all affiliated companies except General Electric Capital Corporation (GECC 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 (GECC).” Transactions between GE and GECC have been eliminated from the “Consolidated” columns.
 
 

 
(4)
 
 

General Electric Company and consolidated affiliates
                  
Condensed, Consolidated Statement of Comprehensive Income
                  
                         
   
Three months ended June 30 (Unaudited)
  
Six months ended June 30 (Unaudited)
(In millions)
    
2013
    
2012
    
2013
    
2012
                         
Net earnings
  
$
3,299
  
$
3,138
  
$
6,810
  
$
6,210
Less: net earnings (loss) attributable to
                        
   noncontrolling interests
    
166
    
33
    
150
    
71
Net earnings attributable to GE
  
$
3,133
  
$
3,105
  
$
6,660
  
$
6,139
                         
Other comprehensive income (loss)
                        
   Investment securities
  
$
(600)
  
$
165
  
$
(532)
  
$
498
   Currency translation adjustments
    
373
    
(1,344)
    
(86)
    
(990)
   Cash flow hedges
    
191
    
21
    
293
    
145
   Benefit plans
    
1,208
    
558
    
2,061
    
1,596
Other comprehensive income (loss)
    
1,172
    
(600)
    
1,736
    
1,249
Less: other comprehensive income (loss) attributable to
                        
   noncontrolling interests
    
(29)
    
(10)
    
(31)
    
(2)
Other comprehensive income (loss) attributable to GE
  
$
1,201
  
$
(590)
  
$
1,767
  
$
1,251
                         
Comprehensive income
  
$
4,471
  
$
2,538
  
$
8,546
  
$
7,459
Less: comprehensive income (loss) attributable to
                        
   noncontrolling interests
    
137
    
23
    
119
    
69
Comprehensive income attributable to GE
  
$
4,334
  
$
2,515
  
$
8,427
  
$
7,390
                         
                         
Amounts presented net of taxes. See Note 12 for further information about other comprehensive income and noncontrolling interests.

See accompanying notes.


General Electric Company and consolidated affiliates
          
Condensed, Consolidated Statement of Changes in Shareowners' Equity
          
           
           
 
Six months ended June 30 (Unaudited)
(In millions)
  
2013
    
2012
         
GE shareowners' equity balance at January 1
$
123,026
  
$
116,438
Increases from net earnings attributable to GE
  
6,660
    
6,139
Dividends and other transactions with shareowners
  
(3,915)
    
(3,601)
Other comprehensive income (loss) attributable to GE
  
1,767
    
1,251
Net sales (purchases) of shares for treasury
  
(4,931)
    
87
Changes in other capital
  
(98)
    
(195)
Ending balance at June 30
  
122,509
    
120,119
Noncontrolling interests
  
6,302
    
3,780
Total equity balance at June 30
$
128,811
  
$
123,899
           
           
See Note 12 for further information about changes changes in shareowners’ equity.
 
See accompanying notes.
 
 
 

 
(5)
 
 

General Electric Company and consolidated affiliates
Condensed Statement of Financial Position
 
Consolidated
    
GE(a)
  
Financial Services (GECC)
 
June 30,
  
December 31,
    
June 30,
  
December 31,
  
June 30,
  
December 31,
(In millions, except share amounts)
2013
  
2012
    
2013
  
2012
  
2013
  
2012
 
(Unaudited)
        
(Unaudited)
      
(Unaudited)
    
Assets
                                    
Cash and equivalents
$
 88,711
  
$
 77,357
    
$
 19,194
  
$
 15,509
  
$
 69,531
  
$
 61,942
Investment securities
  
 43,748
    
 48,510
      
 90
    
 74
    
 43,661
    
 48,439
Current receivables
  
 20,181
    
 19,902
      
 10,509
    
 9,274
    
– 
    
– 
Inventories
  
 16,762
    
 15,374
      
 16,674
    
 15,295
    
 88
    
 79
Financing receivables – net
  
 246,942
    
 258,028
      
– 
    
– 
    
 257,092
    
 268,951
Other GECC receivables
  
 9,381
    
 7,890
      
– 
    
– 
    
 15,710
    
 13,917
Property, plant and equipment – net
  
 68,762
    
 69,044
      
 16,109
    
 16,033
    
 52,608
    
 52,974
Investment in GECC
  
– 
    
– 
      
 79,261
    
 77,930
    
– 
    
– 
Goodwill
  
 73,088
    
 73,175
      
 46,270
    
 46,143
    
 26,818
    
 27,032
Other intangible assets – net
  
 11,596
    
 11,987
      
 10,399
    
 10,700
    
 1,203
    
 1,294
All other assets
  
 74,214
    
 101,659
      
 22,108
    
 39,534
    
 52,382
    
 62,201
Deferred income taxes
  
 5,013
    
 (42)
      
 10,601
    
 5,946
    
 (5,588)
    
 (5,988)
Assets of businesses held for sale
  
 288
    
 211
      
 123
    
– 
    
 165
    
 211
Assets of discontinued operations
  
 1,855
    
 2,308
      
 9
    
 9
    
 1,846
    
 2,299
Total assets(b)
$
 660,541
  
$
 685,403
    
$
 231,347
  
$
 236,447
  
$
 515,516
  
$
 533,351
                                     
Liabilities and equity
                                    
Short-term borrowings
$
 77,184
  
$
 101,392
    
$
 1,182
  
$
 6,041
  
$
 76,770
  
$
 95,940
Accounts payable, principally trade accounts
  
 16,237
    
 15,657
      
 14,716
    
 14,259
    
 7,093
    
 6,259
Progress collections and price adjustments accrued
  
 12,435
    
 10,877
      
 12,435
    
 10,877
    
– 
    
– 
Dividends payable
  
 1,939
    
 1,980
      
 1,939
    
 1,980
    
– 
    
– 
Other GE current liabilities
  
 14,393
    
 14,895
      
 14,394
    
 14,896
    
– 
    
– 
Non-recourse borrowings of consolidated
                                    
   securitization entities
  
 30,250
    
 30,123
      
– 
    
– 
    
 30,250
    
 30,123
Bank deposits
  
 48,597
    
 46,461
      
– 
    
– 
    
 48,597
    
 46,461
Long-term borrowings
  
 231,285
    
 236,084
      
 11,401
    
 11,428
    
 220,007
    
 224,776
Investment contracts, insurance liabilities
                                    
   and insurance annuity benefits
  
 27,074
    
 28,268
      
– 
    
– 
    
 27,615
    
 28,696
All other liabilities
  
 69,853
    
 68,588
      
 51,872
    
 53,093
    
 18,037
    
 15,961
Liabilities of businesses held for sale
  
 35
    
 157
      
 28
    
– 
    
 7
    
 157
Liabilities of discontinued operations
  
 2,448
    
 2,451
      
 69
    
 70
    
 2,379
    
 2,381
Total liabilities(b)
  
 531,730
    
 556,933
      
 108,036
    
 112,644
    
 430,755
    
 450,754
                                     
GECC preferred stock (50,000 and 40,000 shares
                                    
  outstanding at June 30, 2013 and
                                    
  December 31, 2012, respectively.)
  
– 
    
– 
      
– 
    
– 
    
– 
    
– 
Common stock (10,183,781,000 and 10,405,625,000
                                    
  shares outstanding at June 30, 2013 and
                                    
  December 31, 2012, respectively)
  
 702
    
 702
      
 702
    
 702
    
– 
    
– 
                                     
Accumulated other comprehensive income (loss) – net(c)
                                    
   Investment securities
  
 146
    
 677
      
 146
    
 677
    
 138
    
 673
   Currency translation adjustments
  
 358
    
 412
      
 358
    
 412
    
 (102)
    
 (131)
   Cash flow hedges
  
 (430)
    
 (722)
      
 (430)
    
 (722)
    
 (461)
    
 (746)
   Benefit plans
  
 (18,537)
    
 (20,597)
      
 (18,537)
    
 (20,597)
    
 (714)
    
 (736)
Other capital
  
 32,972
    
 33,070
      
 32,972
    
 33,070
    
 32,569
    
 31,586
Retained earnings
  
 146,800
    
 144,055
      
 146,800
    
 144,055
    
 52,781
    
 51,244
Less common stock held in treasury
  
 (39,502)
    
 (34,571)
      
 (39,502)
    
 (34,571)
    
– 
    
– 
                                     
Total GE shareowners’ equity
  
 122,509
    
 123,026
      
 122,509
    
 123,026
    
 84,211
    
 81,890
Noncontrolling interests(d)
  
 6,302
    
 5,444
      
 802
    
 777
    
 550
    
 707
Total equity
  
 128,811
    
 128,470
      
 123,311
    
 123,803
    
 84,761
    
 82,597
                                     
Total liabilities and equity
$
 660,541
  
$
 685,403
    
$
 231,347
  
$
 236,447
  
$
 515,516
  
$
 533,351
                                     
                                     
(a)
Represents the adding together of all affiliated companies except General Electric Capital Corporation (GECC or Financial Services), which is presented on a one-line basis.
 
(b)
Our consolidated assets at June 30, 2013 include total assets of $46,913 million of certain variable interest entities (VIEs) that can only be used to settle the liabilities of those VIEs. These assets include net financing receivables of $40,048 million and investment securities of $4,334 million. Our consolidated liabilities at June 30, 2013 include liabilities of certain VIEs for which the VIE creditors do not have recourse to GE. These liabilities include non-recourse borrowings of consolidated securitization entities (CSEs) of $28,600 million. See Note 18.
 
(c)
The sum of accumulated other comprehensive income (loss) attributable to GE was $(18,463) million and $(20,230) million at June 30, 2013 and December 31, 2012, respectively.
 
(d)
Included accumulated other comprehensive income (loss) attributable to noncontrolling interests of $(186) million and $(155) million at June 30, 2013 and December 31, 2012, respectively.
 
See accompanying notes. Separate information is shown for "GE" and "Financial Services (GECC)." Transactions between GE and GECC have been eliminated from the "Consolidated" columns.
 
 

 
(6)
 
 

General Electric Company and consolidated affiliates
Condensed Statement of Cash Flows
 
Six months ended June 30 (Unaudited)
 
Consolidated
    
GE(a)
  
Financial Services (GECC)
(In millions)
2013
  
2012
    
2013
  
2012
  
2013
  
2012
                                     
Cash flows – operating activities
                                    
Net earnings
$
 6,810
  
$
 6,210
    
$
 6,782
  
$
 6,184
  
$
 3,647
  
$
 3,170
Less net earnings (loss) attributable to noncontrolling
   interests
  
 150
    
 71
      
 122
    
 45
    
 28
    
 26
Net earnings attributable to the Company
  
 6,660
    
 6,139
      
 6,660
    
 6,139
    
 3,619
    
 3,144
(Earnings) loss from discontinued operations
  
 231
    
 750
      
 231
    
 750
    
 230
    
 750
Adjustments to reconcile net earnings attributable to the
                                    
   Company to cash provided from operating activities
                                    
      Depreciation and amortization of property,
                                    
         plant and equipment
  
 4,577
    
 4,412
      
 1,172
    
 1,124
    
 3,405
    
 3,288
      Earnings from continuing operations retained by GECC(b)
  
– 
    
– 
      
 (1,902)
    
 (894)
    
– 
    
– 
      Deferred income taxes
  
 (1,779)
    
 (193)
      
 (2,337)
    
 (547)
    
 558
    
 354
      Decrease (increase) in GE current receivables
  
 223
    
 118
      
 (1,234)
    
 406
    
– 
    
– 
      Decrease (increase) in inventories
  
 (1,452)
    
 (1,645)
      
 (1,414)
    
 (1,615)
    
 (9)
    
 (9)
      Increase (decrease) in accounts payable
  
 870
    
 856
      
 448
    
 698
    
 648
    
 185
      Increase (decrease) in GE progress collections
  
 1,695
    
 (316)
      
 1,695
    
 (316)
    
– 
    
– 
      Provision for losses on GECC financing receivables
  
 2,517
    
 1,606
      
– 
    
– 
    
 2,517
    
 1,606
      All other operating activities
  
 (1,426)
    
 2,457
      
 378
    
 1,044
    
 (2,191)
    
 1,428
Cash from (used for) operating activities – continuing
                                    
   operations
  
 12,116
    
 14,184
      
 3,697
    
 6,789
    
 8,777
    
 10,746
Cash from (used for) operating activities – discontinued
                                    
   operations
  
 (185)
    
 33
      
 (2)
    
– 
    
 (183)
    
 33
Cash from (used for) operating activities
  
 11,931
    
 14,217
      
 3,695
    
 6,789
    
 8,594
    
 10,779
                                     
Cash flows – investing activities
                                    
Additions to property, plant and equipment
  
 (7,218)
    
 (7,298)
      
 (1,832)
    
 (2,020)
    
 (5,481)
    
 (5,505)
Dispositions of property, plant and equipment
  
 2,560
    
 2,717
      
– 
    
– 
    
 2,560
    
 2,717
Net decrease (increase) in GECC financing receivables
  
 5,500
    
 5,924
      
– 
    
– 
    
 6,854
    
 5,798
Proceeds from principal business dispositions
  
 1,013
    
 117
      
 260
    
 29
    
 753
    
 88
Proceeds from sale of equity interest in NBCU LLC
  
 16,699
    
– 
      
 16,699
    
– 
    
– 
    
– 
Net cash from (payments for) principal businesses purchased
  
 6,187
    
 (394)
      
 (197)
    
 (394)
    
 6,384
    
– 
All other investing activities
  
 12,041
    
 3,613
      
 (351)
    
 37
    
 12,257
    
 3,857
Cash from (used for) investing activities – continuing
                                    
   operations
  
 36,782
    
 4,679
      
 14,579
    
 (2,348)
    
 23,327
    
 6,955
Cash from (used for) investing activities – discontinued
                                    
   operations
  
 163
    
 (41)
      
 2
    
– 
    
 161
    
 (41)
Cash from (used for) investing activities
  
 36,945
    
 4,638
      
 14,581
    
 (2,348)
    
 23,488
    
 6,914
                                     
Cash flows – financing activities
                                    
Net increase (decrease) in borrowings (maturities of
                                    
   90 days or less)
  
 (7,168)
    
 (731)
      
 28
    
 (143)
    
 (6,815)
    
 (621)
Net increase (decrease) in bank deposits
  
 (4,506)
    
 (890)
      
– 
    
– 
    
 (4,506)
    
 (890)
Newly issued debt (maturities longer than 90 days)
  
 30,484
    
 30,053
      
 38
    
 167
    
 30,450
    
 29,658
Repayments and other reductions (maturities longer
                                    
   than 90 days)
  
 (46,621)
    
 (52,868)
      
 (5,032)
    
 (24)
    
 (41,589)
    
 (52,844)
Proceeds from issuance of GECC preferred stock
  
 990
    
 2,227
      
– 
    
– 
    
 990
    
 2,227
Net dispositions (purchases) of GE shares for treasury
  
 (5,600)
    
 (505)
      
 (5,600)
    
 (505)
    
– 
    
– 
Dividends paid to shareowners
  
 (3,955)
    
 (3,601)
      
 (3,955)
    
 (3,601)
    
 (2,082)
    
 (3,000)
All other financing activities
  
 (457)
    
 (2,416)
      
 (17)
    
 (62)
    
 (305)
    
 (2,354)
Cash from (used for) financing activities – continuing
                                    
   operations
  
 (36,833)
    
 (28,731)
      
 (14,538)
    
 (4,168)
    
 (23,857)
    
 (27,824)
Cash from (used for) financing activities – discontinued
                                    
   operations
  
 15
    
– 
      
– 
    
– 
    
 15
    
– 
Cash from (used for) financing activities
  
 (36,818)
    
 (28,731)
      
 (14,538)
    
 (4,168)
    
 (23,842)
    
 (27,824)
Effect of currency exchange rate changes on cash
                                    
   and equivalents
  
 (711)
    
 (338)
      
 (53)
    
 (11)
    
 (658)
    
 (327)
Increase (decrease) in cash and equivalents
  
 11,347
    
 (10,214)
      
 3,685
    
 262
    
 7,582
    
 (10,458)
Cash and equivalents at beginning of year
  
 77,459
    
 84,622
      
 15,509
    
 8,382
    
 62,044
    
 76,823
Cash and equivalents at June 30
  
 88,806
    
 74,408
      
 19,194
    
 8,644
    
 69,626
    
 66,365
Less cash and equivalents of discontinued operations
                                    
   at June 30
  
 95
    
 112
      
– 
    
– 
    
 95
    
 112
Cash and equivalents of continuing operations
                                    
   at June 30
$
 88,711
  
$
 74,296
    
$
 19,194
  
$
 8,644
  
$
 69,531
  
$
 66,253
                                     
                                     
(a)
Represents the adding together of all affiliated companies except General Electric Capital Corporation (GECC or Financial Services), which is presented on a one-line basis.
 
(b)
Represents GECC earnings from continuing operations attributable to the Company, net of GECC dividends paid to GE.
 
See accompanying notes. Separate information is shown for "GE" and "Financial Services (GECC)." Transactions between GE and GECC have been eliminated from the "Consolidated" columns and are discussed in Note 19.
 
 

 
(7)
 
 

Summary of Operating Segments
General Electric Company and consolidated affiliates
 
 
Three months ended June 30
  
Six months ended June 30
 
(Unaudited)
  
(Unaudited)
(In millions)
2013
  
2012
  
2013
  
2012
                       
Revenues(a)
                      
   Power & Water
$
 5,715
  
$
 6,900
  
$
 10,540
  
$
 13,451
   Oil & Gas
  
 3,955
    
 3,642
    
 7,354
    
 7,048
   Energy Management
  
 1,981
    
 1,877
    
 3,729
    
 3,599
   Aviation
  
 5,303
    
 4,855
    
 10,377
    
 9,746
   Healthcare
  
 4,490
    
 4,500
    
 8,779
    
 8,800
   Transportation
  
 1,597
    
 1,565
    
 3,019
    
 2,835
   Home & Business Solutions
  
 2,127
    
 2,029
    
 4,044
    
 3,944
   Total industrial segment revenues
  
 25,168
    
 25,368
    
 47,842
    
 49,423
   GE Capital
  
 10,980
    
 11,354
    
 22,515
    
 22,694
      Total segment revenues
  
 36,148
    
 36,722
    
 70,357
    
 72,117
Corporate items and eliminations(a)
  
 (1,025)
    
 (325)
    
 (224)
    
 (640)
Consolidated revenues and other income
$
 35,123
  
$
 36,397
  
$
 70,133
  
$
 71,477
                       
Segment profit(a)
                      
   Power & Water
$
 1,087
  
$
 1,303
  
$
 1,806
  
$
 2,491
   Oil & Gas
  
 532
    
 466
    
 857
    
 806
   Energy Management
  
 31
    
 4
    
 46
    
 25
   Aviation
  
 1,067
    
 922
    
 2,003
    
 1,784
   Healthcare
  
 726
    
 694
    
 1,321
    
 1,279
   Transportation
  
 313
    
 282
    
 580
    
 514
   Home & Business Solutions
  
 83
    
 79
    
 162
    
 136
   Total industrial segment profit
  
 3,839
    
 3,750
    
 6,775
    
 7,035
   GE Capital
  
 1,922
    
 2,122
    
 3,849
    
 3,894
      Total segment profit
  
 5,761
    
 5,872
    
 10,624
    
 10,929
Corporate items and eliminations(a)
  
 (1,883)
    
 (1,471)
    
 (2,362)
    
 (2,532)
GE interest and other financial charges
  
 (326)
    
 (351)
    
 (650)
    
 (666)
GE provision for income taxes
  
 (297)
    
 (392)
    
 (721)
    
 (842)
Earnings from continuing operations attributable
                      
  to the Company
  
 3,255
    
 3,658
    
 6,891
    
 6,889
Earnings (loss) from discontinued operations,
                      
  net of taxes, attributable to the Company
  
 (122)
    
 (553)
    
 (231)
    
 (750)
Consolidated net earnings attributable to
                      
   the Company
$
 3,133
  
$
 3,105
  
$
 6,660
  
$
 6,139
                       
                       
(a)
Segment revenues includes both revenues and other income related to the segment. Segment profit excludes results reported as discontinued operations, earnings attributable to noncontrolling interests of consolidated subsidiaries, GECC preferred stock dividends declared and accounting changes. Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment’s management is measured – excluded in determining segment profit, which we sometimes refer to as “operating profit,” for Power & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation and Home & Business Solutions; included in determining segment profit, which we sometimes refer to as “net earnings,” for GE Capital.
 
 
See accompanying notes.
 
 
 

 
(8)
 
 


 
Notes to Condensed, Consolidated Financial Statements (Unaudited)
 
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
The accompanying condensed, consolidated financial statements represent the consolidation of General Electric Company (the 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 fiscal year ended December 31, 2012 (2012 consolidated financial statements), which discusses our consolidation and financial statement presentation. As used in this report on Form 10-Q (Report), “GE” represents the adding together of all affiliated companies except General Electric Capital Corporation (GECC or Financial Services), whose continuing operations are presented on a one-line basis; GECC consists of General Electric Capital Corporation and all of its affiliates; and “Consolidated” represents the adding together of GE and GECC with the effects of transactions between the two eliminated. Unless otherwise indicated, we refer to the caption revenues and other income simply as “revenues” throughout Item 1 of this Form 10-Q.

We have reclassified certain prior-period amounts to conform to the current-period presentation. Unless otherwise indicated, information in these notes to the condensed, consolidated financial statements relates to continuing operations.

Accounting Changes
 
On January 1, 2012, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2011-05, an amendment to Accounting Standards Codification (ASC) 220, Comprehensive Income. ASU 2011-05 introduced a new statement, the Consolidated Statement of Comprehensive Income. The amendments affect only the display of those components of equity categorized as other comprehensive income and do not change existing recognition and measurement requirements that determine net earnings.

On January 1, 2012, we adopted FASB ASU 2011-04, an amendment to ASC 820, Fair Value Measurements. ASU 2011-04 clarifies or changes the application of existing fair value measurements, including: that the highest and best use valuation premise in a fair value measurement is relevant only when measuring the fair value of nonfinancial assets; that a reporting entity should measure the fair value of its own equity instrument from the perspective of a market participant that holds that instrument as an asset; to permit an entity to measure the fair value of certain financial instruments on a net basis rather than based on its gross exposure when the reporting entity manages its financial instruments on the basis of such net exposure; that in the absence of a Level 1 input, a reporting entity should apply premiums and discounts when market participants would do so when pricing the asset or liability consistent with the unit of account; and that premiums and discounts related to size as a characteristic of the reporting entity’s holding are not permitted in a fair value measurement. Adopting these amendments had no effect on the financial statements. For a description of how we estimate fair value and our process for reviewing fair value measurements classified as Level 3 in the fair value hierarchy, see Note 1 in our 2012 consolidated financial statements.

See Note 1 in our 2012 consolidated financial statements for a summary of our significant accounting policies.
 
 

 
(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. 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 2012 consolidated financial statements. 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 for 2013 is available on our website, www.ge.com/secreports.

 
2. ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE AND DISCONTINUED OPERATIONS
 
Assets and Liabilities of Businesses Held for Sale
 
In the first quarter of 2013, we committed to sell certain of our machining and fabrication businesses at Aviation and our Consumer auto and personal loan business in Portugal.

In the second quarter of 2012, we committed to sell a portion of our Business Properties portfolio (Business Property) in Real Estate, including certain commercial loans, the origination and servicing platforms and the servicing rights on loans previously securitized by GECC. We completed the sale of Business Property on October 1, 2012 for proceeds of $2,406 million. We deconsolidated substantially all Real Estate securitization entities in the fourth quarter of 2012 as servicing rights related to these entities were transferred to the buyer at closing.

Summarized financial information for businesses held for sale is shown below.
 

 
At
 
June 30,
  
December 31,
(In millions)
2013
  
2012
   
           
      
Assets
  
           
      
Cash and equivalents
$
16
  
$
74
Financing receivables – net
  
109
    
47
Property, plant and equipment – net
  
13
    
31
Other intangible assets – net
  
29
    
9
Other
  
121
    
50
Assets of businesses held for sale
$
288
  
$
211
           
Liabilities
          
Short-term borrowings
$
– 
  
$
138
Other
  
35
    
19
Liabilities of businesses held for sale
$
35
  
$
157
 
 

 
(10)
 
 
 

NBCU
 
On March 19, 2013, we closed a transaction to sell our remaining 49% common equity interest in NBCUniversal LLC (NBCU LLC) to Comcast Corporation (Comcast) for total consideration of $16,722 million, consisting of $11,997 million in cash, $4,000 million in Comcast guaranteed debt and $725 million in preferred stock. The $4,000 million of debt and the $725 million of preferred shares were both issued by a wholly-owned subsidiary of Comcast.  During the three months ended March 31, 2013, but subsequent to the closing of the transaction, both of these instruments were sold at approximately par value. In addition, Comcast is obligated to share with us potential tax savings associated with Comcast’s purchase of our NBCU LLC interest, if realized. We did not recognize these potential future payments as consideration for the sale, but will record such payments in income as they are received. GECC also sold real estate comprising certain floors located at 30 Rockefeller Center, New York and the CNBC property located in Englewood Cliffs, New Jersey to affiliates of NBCU LLC for $1,430 million in cash.

As a result of the transactions, we recognized a pre-tax gain of $1,096 million ($825 million after tax) on the sale of our 49% common equity interest in NBCU LLC and $921 million ($564 million after tax) on the sale of GECC’s real estate properties.
 
Discontinued Operations
 
Discontinued operations primarily 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), our Consumer mortgage lending business in Ireland (Consumer Ireland) and our CLL trailer services business in Europe (CLL Trailer Services). Associated results of operations, financial position and cash flows are separately reported as discontinued operations for all periods presented.

Summarized financial information for discontinued operations is shown below.
 
 
Three months ended June 30
  
Six months ended June 30
(In millions)
  
 2013
    
2012
    
 2013
    
2012
                       
Operations
                      
Total revenues and other income (loss)
$
43
  
$
(244)
  
$
30
  
$
(143)
                       
Earnings (loss) from discontinued operations
                      
   before income taxes
$
(31)
  
$
(382)
  
$
(159)
  
$
(448)
Benefit (provision) for income taxes
  
21
    
123
    
142
    
157
Earnings (loss) from discontinued operations,
                      
   net of taxes
$
(10)
  
$
(259)
  
$
(17)
  
$
(291)
                       
Disposal
                      
Gain (loss) on disposal before income taxes
$
(95)
  
$
(308)
  
$
(282)
  
$
(502)
Benefit (provision) for income taxes
  
(17)
    
14
    
68
    
43
Gain (loss) on disposal, net of taxes
$
(112)
  
$
(294)
  
$
(214)
  
$
(459)
                       
Earnings (loss) from discontinued operations,
                      
   net of taxes(a)
$
(122)
  
$
(553)
  
$
(231)
  
$
(750)
                       
                       
(a)
The sum of GE industrial earnings (loss) from discontinued operations, net of taxes, and GECC earnings (loss) from discontinued operations, net of taxes, is reported as GE earnings (loss) from discontinued operations, net of taxes, on the Condensed Statement of Earnings.