UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

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  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  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):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

There were 10,096,429,000 shares of common stock with a par value of $0.06 per share outstanding at June 30, 2015.

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TABLE OF CONTENTS

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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," "will," "would," or "target."

Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about our announced plan to reduce the size of our financial services businesses, including expected cash and non-cash charges associated with this plan; expected income; earnings per share; revenues; organic growth; margins; cost structure; restructuring charges; cash flows; return on capital; capital expenditures, capital allocation or capital structure; dividends; and the split between Industrial and GE Capital earnings.

For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include:

	obtaining (or the timing of obtaining) any required regulatory reviews or approvals or any other consents or approvals associated with our announced plan to reduce the size of our financial services businesses;

	our ability to complete incremental asset sales as part of that plan in a timely manner (or at all) and at the prices we have assumed;



changes in law, economic and financial conditions, including interest and exchange rate volatility, commodity and equity prices and the value of financial assets, including the impact of these conditions on our ability to sell or the value of incremental assets to be sold as part of our announced plan to reduce the size of our financial services businesses as well as other aspects of that plan;

	the impact of conditions in the financial and credit markets on the availability and cost of GECC's funding, and GECC's exposure to counterparties;

	the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults;

	pending and future mortgage loan repurchase claims and other litigation claims 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, which may be affected by GECC's cash flows and earnings, financial services regulation and oversight, and other factors;

	our ability to convert pre-order commitments/wins into orders;

	the price we realize on orders since commitments/wins are stated at list prices;

	customer actions or developments such as early aircraft retirements or reduced energy demand and other factors that may affect the level of demand and financial performance of the major industries and customers we serve;

	the effectiveness of our risk management framework;

	the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation and litigation;

	adverse market conditions, timing of and ability to obtain required bank regulatory approvals, or other factors relating to us or Synchrony Financial that could prevent us from completing the Synchrony Financial split-off as planned;

	our capital allocation plans, as such plans may change including with respect to the timing and size of share repurchases, acquisitions, joint ventures, dispositions and other strategic actions;



our success in completing, including obtaining regulatory approvals for, announced transactions, such as the proposed transactions and alliances with Alstom, Appliances and our announced plan to reduce the size of our financial services businesses, and our ability to realize anticipated earnings and savings;

	our success in integrating acquired businesses and operating joint ventures;

	the impact of potential information technology or data security breaches; and

	the other factors that are described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2014.

These or other 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. This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

HOW WE TALK ABOUT OUR RESULTS

We believe that investors will gain a better understanding of our company if they understand how we measure and talk about our results. Because of the diversity in our businesses, we present our financial statements in a three- column format, which allows investors to see our industrial operations separately from our financial services operations. We believe that this provides useful information to investors. When used in this report, unless otherwise indicated by the context, we use the terms to mean the following:

	General Electric or the Company - the parent company, General Electric Company.



GE - the adding together of all affiliates other than General Electric Capital Corporation (GECC), whose continuing operations are presented on a one-line basis, giving effect to the elimination of transactions among such affiliates. Transactions between GE and GECC have not been eliminated at the GE level. We present the results of GE in the center columns of our consolidated statements of earnings, financial position and cash flows. An example of a GE metric is GE cash from operating activities (GE CFOA).



General Electric Capital Corporation or GECC or Financial Services – the adding together of all affiliates of GECC, giving effect to the elimination of transactions among such affiliates. We present the results of GECC in the right-side columns of our consolidated statements of earnings, financial position and cash flows. It should be noted that GECC is sometimes referred to as GE Capital or Capital, when not in the context of discussing segment results.

	GE consolidated – the adding together of GE and GECC, giving effect to the elimination of transactions between GE and GECC. We present the results of GE consolidated in the left side columns of our consolidated statements of earnings, financial position and cash flows.

	Industrial – GE excluding GECC. We believe that this provides investors with a view as to the results of our industrial businesses and corporate items. An example of an Industrial metric is Industrial CFOA, which is GE CFOA excluding the effects of dividends from GECC.



Industrial segment – the sum of our seven industrial reporting segments without giving effect to the elimination of transactions among such segments. We believe that this provides investors with a view as to the results of our industrial segments, without inter-segment eliminations and corporate items. An example of an industrial segment metric is industrial segment revenue growth.



Total segment – the sum of our seven industrial reporting segments and one financial services reporting segment, without giving effect to the elimination of transactions among such segments. We believe that this provides investors with a view as to the results of all of our segments, without inter-segment eliminations and corporate items.



GE Capital Verticals or Verticals – the adding together of GE Capital businesses that we expect to retain, principally its vertical financing businesses—GE Capital Aviation Services (GECAS), Energy Financial Services and Healthcare Equipment Finance—that directly relate to the Company's core industrial domain and other operations, including Working Capital Solutions, our run-off insurance activities, and allocated corporate costs.

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OTHER TERMS USED BY GE

	Revenues – unless otherwise indicated, we refer to captions such as "revenues and other income", simply as revenues.

	Organic revenues – revenues excluding the effects of acquisitions, dispositions and foreign currency exchange.

	Earnings – unless otherwise indicated, we refer to captions such as "earnings from continuing operations attributable to the company" simply as earnings.

	Earnings per share (EPS) – unless otherwise indicated, we refer to "earnings per share from continuing operations attributable to the company" simply as earnings per share.

	Operating earnings – GE earnings from continuing operations attributable to the company excluding the impact of non-operating pension costs.

	Segment profit – refers to the operating profit of the industrial segments and the net earnings of the financial services segment. See page 12 for a description of the basis for segment profits.

	Operating pension costs – comprise the service cost of benefits earned, prior service cost amortization and curtailment loss for our principal pension plans.

	Non-operating pension costs – comprise the expected return on plan assets, interest cost on benefit obligations and net actuarial loss amortization for our principal pension plans.

NON-GAAP FINANCIAL MEASURES

In the accompanying analysis of financial information, we sometimes use information derived from consolidated financial data but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered "non-GAAP financial measures" under the SEC rules. Specifically, we have referred, in various sections of this Form 10-Q Report, to:

	Operating earnings (loss) and operating EPS

	GE Industrial operating + Verticals EPS

	Operating and non-operating pension costs

	Industrial segment organic revenue growth

	Oil & Gas organic revenue and operating profit growth

	Industrial cash flows from operating activities (Industrial CFOA)

	Adjusted Corporate Costs (Operating)

	GE Capital ending net investment (ENI), excluding liquidity

	GECC Tier 1 common ratio estimate

The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are included in Exhibit 99(a) to this Form 10-Q Report. Non-GAAP financial measures referred to in this Form 10-Q Report are designated with an asterisk (*).

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OUR OPERATING SEGMENTS

We are one of the largest and most diversified infrastructure and financial services corporations in the world. With products and services ranging from aircraft engines, power generation, oil and gas production equipment, and household appliances to medical imaging, business and consumer financing and industrial products.

OUR INDUSTRIAL OPERATING SEGMENTS

OUR FINANCIAL SERVICES OPERATING SEGMENT

Operational and financial overview for our operating segment are provided in the "Segment Operations" section within this MD&A.

THE GE CAPITAL EXIT PLAN

On April 10, 2015, the Company announced its plan (the GE Capital Exit Plan) to reduce the size of its financial services businesses through the sale of most of the assets of GECC over the following 24 months and to focus on continued investment and growth in the Company's industrial businesses. Under the GE Capital Exit Plan, which was approved on April 2, 2015 and aspects of which were approved on March 31, 2015, the Company will retain certain GECC businesses, principally its vertical financing businesses—GE Capital Aviation Services (GECAS), Energy Financial Services and Healthcare Equipment Finance—that directly relate to the Company's core industrial domain and other operations, including Working Capital Solutions and our run-off insurance activities (together referred to as GE Capital Verticals or Verticals). The assets planned for disposition include Real Estate, most of Commercial Lending and Leasing (CLL) and all Consumer platforms (including all U.S. banking assets). The Company expects to execute this strategy using an efficient approach for exiting non-vertical assets that works for the Company's and GECC's debt holders and the Company's shareowners. An element of this approach involves a merger of GECC into the Company to assure compliance with debt covenants as GECC exits non-vertical assets, and the creation of a new intermediate holding company to hold GECC's businesses after the merger. The Company has discussed the GE Capital Exit Plan, aspects of which are subject to regulatory review and approval, with its regulators and staff of the Financial Stability Oversight Council (FSOC) and will work closely with these bodies to take the actions necessary over time to terminate the FSOC's designation of GECC (and the new intermediate holding company, as applicable) as a nonbank systemically important financial institution (nonbank SIFI).

SALES AGREEMENTS

During the first half of 2015, GE signed agreements to sell approximately $68 billion of ENI, excluding liquidity (as originally reported at December 31, 2014) of which $32 billion and $23 billion related to the Real Estate and CLL businesses, respectively. Of these signed agreements, approximately $20 billion of Real Estate transactions have closed, including the majority of GECC's Real Estate debt and equity portfolio sold to funds managed by The Blackstone Group (which, in turn, sold a portion of this portfolio to Wells Fargo & Company). In connection with The Blackstone Group transactions, GECC will provide approximately $3.5 billion of seller financing to The Blackstone Group, which GECC intends to syndicate by 2016. The signed CLL transactions include approximately $11.2 billion related to its U.S. Sponsor Finance business with Canada Pension Plan Investment Board, approximately $8.8 billion related to its Global Fleet Services business with Element Financial Corporation and Arval and approximately $2.5 billion related to its European Sponsor Finance business with Sumitomo Mitsui Banking Corporation.

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AFTER-TAX CHARGES RELATED TO THE GE CAPITAL EXIT PLAN

In connection with the GE Capital Exit Plan announced on April 10, the Company estimated that it would incur approximately $23 billion in after-tax charges through 2016, approximately $6 billion of which are expected to result in future net cash expenditures. These charges relate to: business dispositions, including goodwill allocations (approximately $13 billion), tax expense related to expected repatriation of foreign earnings and write-off of deferred tax assets (approximately $7 billion), and restructuring and other charges (approximately $3 billion).

In the first and second quarters of 2015, GE recorded $16.1 billion and $4.6 billion, respectively, of after-tax charges related to the GE Capital Exit Plan. As a result of certain businesses meeting discontinued operations criteria, $6.7 billion of first quarter after-tax charges and $4.4 billion of second quarter after-tax charges (including $4.3 billion related to CLL) were reported in discontinued operations.

GUARANTEE

As part of the GE Capital Exit Plan, on April 10, 2015, the Company and GECC entered into an amendment to their existing financial support agreement. Under this amendment (the Amendment), the Company has provided a full and unconditional guarantee (the Guarantee) of the payment of principal and interest on all tradable senior and subordinated outstanding long-term debt securities and all commercial paper issued or guaranteed by GECC identified in the Amendment. In the aggregate, the Guarantee applied to approximately $207 billion of GECC debt as of June 30, 2015. The Guarantee replaced the requirement that the Company make certain income maintenance payments to GECC in certain circumstances. GECC's U.S. public indentures were concurrently amended to provide the full and unconditional guarantee by the Company set forth in the Guarantee.

OUR EMPLOYEES AND EMPLOYEE RELATIONS

In June 2015, we negotiated new four-year collective bargaining agreements with most of our U.S. unions. These agreements will continue to provide employees with good wages and benefits while addressing competitive realities facing the Company.

PRESENTATION

The consolidated financial statements of General Electric Company (the Company) combine the industrial manufacturing and services businesses of General Electric Company (GE) with the financial services businesses of General Electric Capital Corporation (GECC or financial services).

We integrate acquisitions as quickly as possible. Revenues and earnings from the date we complete the acquisition through the end of the following fourth quarter are considered the acquisition effect of such businesses.

Amounts reported in billions in graphs and tables within this Form 10-Q report are computed based on the amounts in millions. As a result, the sum of the components reported in billions may not equal the total amount reported in billions due to rounding.

Discussions throughout this MD&A are based on continuing operations unless otherwise noted.

REFERENCES

The MD&A should be read in conjunction with the Financial Statements and Notes to the consolidated financial statements.

For additional information related to the GE Capital Exit Plan, GE Capital segment operations and the credit quality of financing receivables, refer to the General Electric Capital Corporation quarterly report on Form 10-Q for the three months ended June 30, 2015.

CORPORATE INFORMATION

GE's Investor Relations website at www.ge.com/investor-relations and our corporate blog at www.gereports.com, as well as GE's Facebook page and Twitter accounts, including @GE_Reports, 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.

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CONSOLIDATED RESULTS

THREE AND SIX MONTHS ENDED JUNE 30

(Dollars in billions)

*Non-GAAP Financial Measure

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THREE AND SIX MONTHS ENDED JUNE 30

(Dollars in billions)

See the "Other Consolidated Information" section within the MD&A of this Form 10-Q for a discussion of income taxes.

*Non-GAAP Financial Measure

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SEGMENT OPERATIONS

SEGMENT REVENUES AND PROFIT

Segment revenues include revenues and other income related to the segment.

Segment profit is determined based on internal performance measures used by the Chief Executive Officer (CEO) to assess the performance of each business in a given period. In connection with that assessment, the CEO may exclude matters such as charges for restructuring; rationalization and other similar expenses; acquisition costs and other related charges; technology and product development costs; certain gains and losses from acquisitions or dispositions; and litigation settlements or other charges, for which responsibility preceded the current management team.

Segment profit excludes results reported as discontinued operations and accounting changes. Segment profit also excludes the portion of earnings or loss attributable to noncontrolling interests of consolidated subsidiaries, and as such only includes the portion of earnings or loss attributable to our share of the consolidated earnings or loss of consolidated subsidiaries.

Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment's management is measured:

	Interest and other financial charges and income taxes are excluded in determining segment profit (which we sometimes refer to as "operating profit") for the industrial segments.

	Interest and other financial charges and income taxes are included in determining segment profit (which we sometimes refer to as "net earnings") for the GE Capital segment.

Certain corporate costs, such as shared services, employee benefits and information technology are allocated to our segments based on usage. A portion of the remaining corporate costs is allocated based on each segment's relative net cost of operations.

PLANNED ACQUISITION OF ALSTOM IMPACTS MULTIPLE SEGMENTS

During the second quarter of 2014, GE's offer to acquire the Thermal, Renewables and Grid businesses of Alstom for approximately €12.4 billion (to be adjusted for the assumed net cash or liability at closing) was positively recommended by Alstom's board of directors. As part of the transaction, Alstom and the French Government signed a memorandum of understanding for the formation of three joint ventures in grid technology, renewable energy, and global nuclear and French steam power. Alstom will invest approximately €2.6 billion in these joint ventures at the closing of the proposed transaction.

In the fourth quarter of 2014, Alstom completed its review of the proposed transaction with the works council and obtained approval from its shareholders. Also in the fourth quarter of 2014, GE and Alstom entered into an amendment to the original agreement where GE has agreed to pay Alstom a net amount of approximately €0.3 billion of additional consideration at closing. In exchange for this funding, Alstom has agreed to extend the trademark licensing of the Alstom name from 5 years to 25 years as well as other contractual amendments.

In the second quarter of 2015, the European Commission indicated that it had competition concerns with the proposed transaction. In response, and while GE continues to believe that the transaction is pro-competitive, GE has proposed remedies to address the Commission's concerns while preserving the strategic and economic rationale of the proposed transaction. In addition, Alstom has agreed to contribute financially to the remedies being offered by GE through a €300 million reduction in the purchase price of the transaction. The transaction continues to remain subject to regulatory approvals and is still targeted to close in 2015.

The acquisition and alliances with Alstom will impact our Power & Water and Energy Management segments. The impact of acquired businesses on individual segments will be affected by a number of variables, including operating performance, purchase accounting impacts and expected synergies. In addition, due to the amount of time between signing and closing, the operations of the businesses may fluctuate and impact the overall valuation of the acquired businesses at the time of close and, accordingly, may affect the amounts assigned to the assets and liabilities recorded in purchase accounting.

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PLANNED SALE OF APPLIANCES

In the third quarter of 2014, we signed an agreement to sell our Appliances business to Electrolux for approximately $3.3 billion. On July 1, 2015, we were notified that the Department of Justice had initiated court proceedings seeking to enjoin the sale of Appliances to Electrolux.  Electrolux and GE intend to defend the proposed transaction and GE is targeting to close the deal in 2015.

SEGMENT RESULTS

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POWER & WATER

OPERATIONAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)

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FINANCIAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)

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OIL & GAS

OPERATIONAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)

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FINANCIAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)

*Non-GAAP Financial Measure

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ENERGY MANAGEMENT

OPERATIONAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)

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FINANCIAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)

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OPERATIONAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

(Dollars in billions)

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FINANCIAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)

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HEALTHCARE

OPERATIONAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

(Dollars in billions)

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FINANCIAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)

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OPERATIONAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)

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FINANCIAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

(Dollars in billions)

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OPERATIONAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollar in billions)

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GE CAPITAL

OPERATIONAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)



The GE Capital Exit Plan - As previously discussed, on April 10, 2015, the Company announced its plan to reduce the size of the financial services businesses through the sale of most of the assets of GECC over the following 24 months. It is expected that as a result of the GE Capital Exit Plan, the GE Capital businesses that will remain with GE will account for about $90 billion in ending net investment (ENI), excluding liquidity, including about $40 billion in the U.S. ENI is a metric used to measure the total capital invested in the financial services businesses. GE Capital's ENI, excluding liquidity* was $179 billion at June 30, 2015.

During the first half of 2015, GE signed agreements to sell approximately $68 billion of ENI, excluding liquidity (as originally reported at December 31, 2014) of which $32 billion and $23 billion related to the Real Estate and CLL businesses, respectively. Of these signed agreements, approximately $20 billion of Real Estate transactions have closed, including the majority of GECC's Real Estate debt and equity portfolio sold to funds managed by The Blackstone Group (which, in turn, sold a portion of this portfolio to Wells Fargo & Company). In connection with The Blackstone Group transactions, GECC will provide approximately $3.5 billion of seller financing to The Blackstone Group, which GECC intends to syndicate by 2016. The signed CLL transactions include approximately $11.2 billion related to its U.S. Sponsor Finance business with Canada Pension Plan Investment Board, approximately $8.8 billion related to its Global Fleet Services business with Element Financial Corporation and Arval and approximately $2.5 billion related to its European Sponsor Finance business with Sumitomo Mitsui Banking Corporation

In the first and second quarters of 2015, GE recorded $16.1 billion and $4.6 billion, respectively, of after-tax charges related to the GE Capital Exit Plan. As a result of certain businesses meeting discontinued operations criteria, $6.7 billion of first quarter after-tax charges and $4.4 billion of second quarter after-tax charges (including $4.3 billion related to CLL) were reported in discontinued operations.

	Budapest Bank – On June 29, 2015 we closed the sale of Budapest Bank to Hungary's government.

* Non-GAAP Financial Measure

 

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Australia and New Zealand (ANZ) Consumer Lending - During the first quarter of 2015, we signed an agreement to sell our consumer finance business in Australia and New Zealand to a consortium including KKR, Varde Partners and Deutsche Bank for approximately 6.0 billion Australian dollars and 1.4 billion New Zealand dollars, respectively.

	Milestone Aviation Group – On January 30, 2015, GECAS acquired Milestone Aviation Group, a helicopter leasing business, for approximately $1.8 billion.



Synchrony Financial – In connection with Synchrony Financial's planned separation from GE, Synchrony Financial filed the related application to the Federal Reserve Board on April 30, 2015. For a further discussion of the Synchrony Financial transaction, see the Synchrony Financial annual report on Form 10-K for the year ended December 31, 2014 and the 2015 quarterly reports on Forms 10-Q.

	Dividends - GECC paid no quarterly dividends and $0.5 billion of quarterly dividends to GE in the three and six months ended June 30, 2015, respectively.

FINANCIAL OVERVIEW - THREE AND SIX MONTHS ENDED JUNE 30

 (Dollars in billions)

Segment revenues decreased 1% in the three months ended June 30, 2015 as a result of the effects of dispositions, the effects of currency exchange and organic revenue declines, partially offset by higher gains and the effects of acquisitions. Net earnings decreased 78% primarily due to core decreases, including charges associated with the GE Capital Exit Plan, partially offset by higher gains and the effects of dispositions.

Segment revenues decreased 13% and net earnings decreased significantly in the six months ended June 30, 2015, primarily due to the effects of the GE Capital Exit Plan.

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CONSUMER

(a)

Included non-operating pension cost* of $0.7 billion and $0.5 billion in the three months ended June 30, 2015 and 2014, respectively, and $1.4 billion and $1.1 billion in the six months ended June 30, 2015 and 2014, respectively, which includes expected return on plan assets, interest costs and non-cash amortization of actuarial gains and losses.

2015 – 2014 COMMENTARY: THREE MONTHS ENDED JUNE 30

Revenues and other income increased $0.6 billion, primarily a result of:

	$0.5 billion higher other income from a settlement related to the NBCU transaction, and

	$0.1 billion of lower inter-segment eliminations.

Operating costs decreased $0.3 billion, primarily as a result of:

	$0.5 billion higher income from a settlement related to the NBCU transaction, partially offset by $0.1 billion higher costs associated with our principal retirement plans including the effects of lower discount rates and updated mortality assumptions.

2015 – 2014 COMMENTARY: SIX MONTHS ENDED JUNE 30

Revenues and other income increased $0.5 billion, primarily a result of:

	$0.5 billion higher other income from a settlement related to the NBCU transaction.

Operating costs decreased $0.1 billion, primarily as a result of:

	$0.5 billion higher income from the NBCU transaction, partially offset by $0.3 billion higher costs associated with our principal retirement plans including the effects of lower discount rates and updated mortality assumptions.

*Non-GAAP Financial Measure

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COSTS NOT INCLUDED IN SEGMENT RESULTS

Certain amounts are not included in industrial operating segment results because they are excluded from measurement of their operating performance for internal and external purposes. These amounts are included in GE Corporate Items & Eliminations and may include matters such as charges for restructuring; rationalization and other similar expenses; acquisition costs and related charges; technology and product development cost; certain gains and losses from acquisitions or dispositions; and litigation settlements or other charges, for which responsibility preceded the current management team. The amount of costs and gains not included in segment results follows.

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DISCONTINUED OPERATIONS

Results of operations, financial position and cash flows for these businesses are separately reported as discontinued operations for all periods presented.

2015 – 2014 COMMENTARY: THREE MONTHS ENDED JUNE 30

The second quarter 2015 loss from discontinued operations, net of taxes, primarily reflected the following:

	$3.7 billion after-tax loss at our CLL business (including a $4.3 billion loss on the planned disposal).

The second quarter 2014 earnings from discontinued operations, net of taxes, primarily reflected the following:

	$0.4 billion of earnings from operations at our CLL business and

	$0.3 billion of earnings from operations at our Real Estate business.

2015 – 2014 COMMENTARY: SIX MONTHS ENDED JUNE 30

The 2015 loss from discontinued operations, net of taxes, primarily reflected the following:

	$7.7 billion after-tax loss at our CLL business (including a $7.2 billion loss on the planned disposal) and

	$2.3 billion after-tax loss at our Real Estate business (including a $2.4 billion loss on the planned disposal).

The 2014 earnings from discontinued operations, net of taxes, primarily reflected the following:

	$0.9 billion of earnings from operations at our CLL business and

	$0.5 billion of earnings from operations at our Real Estate business.

For additional information related to discontinued operations, see Note 2 to the consolidated financial statements.

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OTHER CONSOLIDATED INFORMATION

INCOME TAXES

Income taxes have a significant effect on our net earnings. As a global commercial enterprise, our tax rates are affected by many factors, including our global mix of earnings, the extent to which those global earnings are indefinitely reinvested outside the United States, legislation, acquisitions, dispositions and tax characteristics of our income. Our tax rates are also affected by tax incentives introduced in the U.S. and other countries in furtherance of policies to encourage and support certain types of activity. Our tax returns are routinely audited and settlements of issues raised in these audits sometimes affect our tax provisions.

GE and GECC file a consolidated U.S. federal income tax return. This enables GE to use GECC tax deductions and credits to reduce the tax that otherwise would have been payable by GE. The GECC effective tax rate for each period reflects the benefit of these tax reductions in the consolidated return. GE makes cash payments to GECC for these tax reductions at the time GE's tax payments are due.

CONSOLIDATED – THREE AND SIX MONTHS ENDED JUNE 30

(Dollars in billions)

2015 – 2014 COMMENTARY: THREE MONTHS ENDED JUNE 30

	The consolidated income tax provision increased due to additional tax expense associated with the GE Capital Exit Plan, a smaller benefit from the adjustment to the projected full-year effective tax rate and an increase in pre-tax income taxed at above the average tax rate.

	The consolidated tax provision includes $0.4 billion and $0.6 billion for GE (excluding GECC) for the second quarters of 2014 and 2015, respectively. The increase related primarily to higher pre-tax income taxed at above the average tax rate.

2015 – 2014 COMMENTARY: SIX MONTHS ENDED JUNE 30

	The consolidated income tax rate for the six months ended June 30, 2015 was greater than 100% as the positive tax expense of $7.1 billion exceeded pre-tax income of $2.3 billion due to charges associated with GE Capital Exit Plan.

	As discussed in Note 10 to the consolidated financial statements, during the first six months ended June 30, 2015 in conjunction with the GE Capital Exit Plan, we incurred tax expense of $6.3 billion related to expected repatriation of foreign earnings and write-off of deferred tax assets.

	The increase in the income tax expense is primarily due to the tax expense incurred as part of the GE Capital Exit Plan.

	The consolidated tax provision includes $0.7 billion and $0.9 billion for GE (excluding GECC) for the first six months of 2014 and 2015, respectively. The increase is related primarily to higher pre-tax income taxed at above the average tax rate.

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BENEFITS FROM GLOBAL OPERATIONS

Absent the effects of the GE Capital Exit Plan, our consolidated income tax rate is lower than the U.S. statutory rate primarily because of benefits from lower-taxed global operations, including the use of global funding structures. There is a benefit from global operations as non-U.S. income is subject to local country tax rates that are significantly below the 35% U.S. statutory rate. These non-U.S. earnings have been indefinitely reinvested outside the U.S. and are not subject to current U.S. income tax. The rate of tax on our indefinitely reinvested non-U.S. earnings is below the 35% U.S. statutory rate because we have significant business operations subject to tax in countries where the tax on that income is lower than the U.S. statutory rate and because GE funds certain of its non-U.S. operations through foreign companies that are subject to low foreign taxes.

Historically, the most significant portion of these benefits depends on the provision of U.S. law deferring the tax on active financial services income, which, as discussed below, is subject to expiration. A substantial portion of the remaining benefit related to business operations subject to tax in countries where the tax on that income is lower than the U.S. statutory rate is derived from our GECAS aircraft leasing operations located in Ireland. No other operation in any one country accounts for a material portion of the remaining balance of the benefit.

We expect our ability to benefit from non-U.S. income taxed at less than the U.S. rate to continue, subject to changes in our earnings profile due to the GE Capital Exit Plan and changes in U.S. or foreign law, including the expiration of the U.S. tax law provision deferring tax on active financial services income. In addition, since this benefit depends on management's intention to indefinitely reinvest amounts outside the U.S., our tax provision will increase to the extent we no longer intend to indefinitely reinvest foreign earnings.

STATEMENT OF FINANCIAL POSITION

Because GE and GECC share certain significant elements of their Statements of Financial Position, the following discussion addresses significant captions in the consolidated statement. Within the following discussions, however, we distinguish between GE and GECC activities in order to permit meaningful analysis of each individual consolidating statement.

MAJOR CHANGES IN OUR FINANCIAL POSITION FOR THE SIX MONTHS ENDED JUNE 30, 2015

	GECC Financing receivables-net decreased $41.4 billion. See the following GECC Financing Receivables section for additional information.

	GECC Financing receivables held for sale increased $27.2 billion. See the following GECC Financing Receivables Held for Sale section for additional information.

	Assets of discontinued operations decreased $32.1 billion, primarily due to Real Estate of $19.3 billion and the CLL businesses of $12.6 billion. See Note 2 for additional information.

	Borrowings decreased $19.1 billion, primarily due to net repayments on GECC borrowings of $16.0 billion, along with a $6.2 billion reduction in the balances driven by the strengthening of the U.S. dollar against all major currencies, partially offset by new debt issuances by GE of $3.5 billion.

	Deferred income taxes increased $5.4 billion primarily due to deferred tax asset write-offs resulting from the GE Capital Exit Plan, along with the remeasurement of postretirement benefit plans.

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GECC FINANCING RECEIVABLES

For purposes of the discussion that follows, "delinquent" receivables are those that are 30 days or more past due based on their contractual terms. Loans purchased at a discount are initially recorded at fair value and accrete interest income over their estimated lives based on reasonably estimable cash flows even if the underlying loans are contractually delinquent at acquisition. "Nonaccrual" financing receivables are those on which we have stopped accruing interest. We stop accruing interest at the earlier of the time at which collection of an account becomes doubtful or the account becomes 90 days past due, with the exception of consumer credit card accounts, for which we continue to accrue interest until the accounts are written off in the period that the account becomes 180 days past due. Recently restructured financing receivables are not considered delinquent when payments are brought current according to the restructured terms, but may remain classified as nonaccrual until there has been a period of satisfactory payment performance by the borrower and future payments are reasonably assured of collection.

(a)	For additional information related to the portfolio of financing receivables, refer to the GECC quarterly report on Form 10-Q for the period ended June 30, 2015.

(b)	Substantially all of our $0.4 billion of nonaccrual loans at June 30, 2015, are currently paying in accordance with the contractual terms. We continue to accrue interest on consumer credit cards until the accounts are written off in the period the account becomes 180 days past due.

(c)	Not meaningful.

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FINANCIAL RESOURCES AND LIQUIDITY

Our 2015 GECC funding plan anticipates repayment of principal on outstanding short-term borrowings, including the current portion of long-term debt ($37.0 billion at December 31, 2014), principally through dispositions, asset sales and cash on hand. Long-term maturities and early redemptions were $8.1 billion in the second quarter of 2015.

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LIQUIDITY SOURCES

In addition to GE cash of $17.0 billion at June 30, 2015, GECC maintained liquidity sources of $84.6 billion that consisted of cash and equivalents of $74.6 billion, high-quality, liquid investments of $3.3 billion and cash and equivalents of $6.7 billion classified as discontinued operations and businesses held for sale. Additionally, we have $45.9 billion of committed unused credit lines.

(a)

At June 30, 2015, $2.7 billion of GE cash and equivalents was held in countries with currency controls that may restrict the transfer of funds to the U.S. or limit our ability to transfer funds to the U.S. without incurring substantial costs. These funds are available to fund operations and growth in these countries and we do not currently anticipate a need to transfer these funds to the U.S.

(b)	At June 30, 2015, GECC cash and equivalents of about $19.8 billion were in regulated banks and insurance entities and were subject to regulatory restrictions.

(c)

Of this amount at June 30, 2015, $10.4 billion was considered indefinitely reinvested. Indefinitely reinvested cash held outside of the U.S. is available to fund operations and other growth of non-U.S. subsidiaries; it is also available to fund our needs in the U.S. on a short-term basis through short-term loans, without being subject to U.S. tax. Under the Internal Revenue Code, these loans are permitted to be outstanding for 30 days or less and the total of all such loans is required to be outstanding for less than 60 days during the year. If we were to repatriate indefinitely reinvested cash held outside the U.S., we would be subject to additional U.S. income taxes and foreign withholding taxes.

(a)	Included $20.6 billion that contains a term-out feature that allows us to extend borrowings for two years from the date on which such borrowings would otherwise be due.

(b)	Total committed unused credit lines were extended to us by 48 financial institutions. GECC can borrow up to $45.1 billion under these credit lines. GE can borrow up to $15.5 billion under certain of these credit lines.

FUNDING PLAN

GECC commercial paper maturities have historically been funded principally through new commercial paper issuances and at GE are substantially repaid before quarter-end using indefinitely reinvested overseas cash, which as discussed above, is available for use in the U.S. on a short-term basis without being subject to U.S. tax. As announced on April 10, 2015, GECC is targeting to reduce the outstanding commercial paper to approximately $5 billion by the end of 2015.

We have nine deposit-taking banks outside of the U.S. and two deposit-taking banks in the U.S. – Synchrony Bank (formerly GE Capital Retail Bank), a Federal Savings Bank (FSB), and GE Capital Bank, an industrial bank (IB). The FSB and IB currently issue certificates of deposit (CDs) in maturity terms up to 10 years. GE Capital Bank is classified as discontinued operations.

As a matter of general practice, we routinely evaluate the economic impact of calling debt instruments where GECC has the right to exercise a call. In determining whether to call debt, we consider the economic benefit to GECC of calling debt, the effect of calling debt on GECC's liquidity profile and other factors. During the first six months of 2015, we did not call any long-term debt.

INCOME MAINTENANCE AGREEMENT AND GE GUARANTEE OF CERTAIN GECC DEBT

CONSOLIDATED CASH FLOWS

We evaluate our cash flow performance by reviewing our industrial (non-financial services) businesses and financial services businesses separately. Cash from operating activities (CFOA) is the principal source of cash generation for our industrial businesses. The industrial businesses also have liquidity available via the public capital markets. Our financial services businesses use a variety of financial resources to meet our capital needs. Cash for financial services businesses is primarily provided from the issuance of term debt and commercial paper in the public and private markets and deposits, as well as financing receivables collections, sales and securitizations.

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GE CASH FLOWS – SIX MONTHS ENDED JUNE 30

With respect to GE CFOA, we believe that it is useful to supplement our GE Statement of Cash Flows and to examine in a broader context the business activities that provide and require cash.

The most significant source of cash in GE CFOA is customer-related activities, the largest of which is collecting cash resulting from product or services sales. See the Intercompany Transactions and Eliminations section for information related to transactions between GE and GECC. The most significant operating use of cash is to pay our suppliers, employees, tax authorities and others for a wide range of material and services. Dividends from GECC, including special dividends, represent the distribution of a portion of GECC retained earnings, and are distinct from cash from continuing operations within the financial services businesses. The amounts included in GE CFOA are the total dividends, including special dividends from excess capital.

2015 – 2014 COMMENTARY

GE cash from operating activities increased $0.5 billion primarily due to the following:



An increase of operating cash collections of $0.5 billion to $51.0 billion in 2015. This increase is primarily driven by a $0.5 billion payment from a settlement related to the NBCU transaction, prepayments on service contracts of $0.2 billion and higher collections of current receivables of $0.3 billion. These increases were partially offset by lower progress collections of $0.6 billion.

	A decrease of operating cash payments of $0.9 billion to $47.6 billion in 2015. This decrease is primarily driven by decreased spend on inventory in the six months ended June 30, 2015 compared with that of 2014.

	Further, GECC paid quarterly dividends of $0.5 billion and no special dividends to GE in the six months ended June 30, 2015. GECC paid quarterly dividends of $1.1 billion and special dividends of $0.3 billion to GE in the six months ended June 30, 2014.

GE cash used for investing activities decreased $1.5 billion primarily due to the following:

	Lower business acquisition activity of $2.0 billion primarily driven by the 2014 acquisitions of certain Thermo Fisher Scientific Inc. life-science businesses for $1.1 billion, Cameron's Reciprocating Compression Division for $0.6 billion and API Healthcare (API) for $0.3 billion.

	This is partially offset by $0.3 billion lower proceeds from principal business dispositions.

GE cash used for financing activities decreased $3.1 billion primarily due to the following:

	A decrease in net repurchases of GE shares for treasury in accordance with our share repurchase program of $1.9 billion.

	A decrease in net change in borrowings (maturities of 90 days or less) of $0.7 billion.

	Further, GE issued $3.4 billion and $3.0 billion of unsecured notes in the six months ended June 30, 2015 and 2014.

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GECC CASH FLOWS – SIX MONTHS ENDED JUNE 30

2015 – 2014 COMMENTARY:

GECC cash from operating activities decreased $3.0 billion primarily due to the following:

	A decrease in net cash collateral activity with counterparties on derivative contracts of $2.5 billion.

GECC cash from investing activities increased $17.6 billion primarily due to the following:

	In 2015, we closed the sale of certain of our Real Estate businesses for proceeds of $15.6 billion.

	A net increase in financing receivables activity of $2.4 billion driven by higher net collections (which includes sales) of financing receivables.

	The 2014 payment of our obligation to the buyer of GE Money Japan for $1.7 billion.

	These increases were partially offset by the 2015 acquisition of Milestone Aviation Group, resulting in net cash paid of $1.7 billion.

GECC cash used for financing activities increased $5.4 billion primarily due to the following:

	Higher net repayments of borrowings of $4.2 billion driven primarily by an increase in long-term debt maturities and a decrease in issuances of senior unsecured notes.

	A decrease in deposits at our banks of $2.0 billion.

	These increases were partially offset by GECC paying quarterly dividends of $0.5 billion and no special dividends to GE in the six months ended June 30, 2015. GECC paid quarterly dividends of $1.1 billion and special dividends of $0.3 billion to GE in the six months ended June 30, 2014.

INTERCOMPANY TRANSACTIONS AND ELIMINATIONS

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EXPOSURES

At June 30, 2015, we had $32.5 billion in financing receivables to consumer and commercial customers in Europe, including $26.6 billion classified as financing receivables held for sale, and $5.9 billion classified as assets held for investment. The GECC financing receivables portfolio in Europe is well diversified across European geographies and customers. Approximately 89% of the portfolio is secured by collateral. Several European countries, including Spain, Portugal, Ireland, Italy, Greece and Hungary (focus countries), have been subject to credit deterioration due to weaknesses in their economic and fiscal situations. The carrying value of GECC funded exposures in these focus countries and in the rest of Europe comprised the following at June 30, 2015.

(a)	Financing receivable amounts are classified based on the location or nature of the related obligor.

(b)	Investments and derivatives are classified based on the location of the parent of the obligor or issuer.

(c)	Included $0.4 billion related to financial institutions, $47.4 million related to non-financial institutions and $1.4 billion related to sovereign issuers. We held no investments issued by sovereign entities in the countries of focus.

(d)	Substantially all is non-sovereign.

(e)	Net of cash collateral; entire amount is non-sovereign.

(f)	These assets are held under long-term investment and operating strategies, and our ELTO strategies contemplate an ability to redeploy assets under lease should default by the lessee occur. The values of these assets could be subject to decline or impairment in the current environment.

(g)

Excluded $32.8 billion of cash and equivalents, which is composed of $22.3 billion of cash on short-term placement with highly rated global financial institutions based in Europe, sovereign central banks and agencies or supranational entities, of which $0.2 billion is in focus countries, and $10.6 billion of cash and equivalents placed with highly rated European financial institutions on a short-term basis, secured by U.S. Treasury securities ($5.9 billion) and sovereign bonds of non-focus countries ($4.7 billion), where the value of our collateral exceeds the amount of our cash exposure.

(h)	Rest of Europe included $1.6 billion and $0.1 billion of exposure for Russia and Ukraine, respectively, substantially all ELTO and financing receivables related to commercial aircraft in our GECAS portfolio.

(i)	Includes ordinary course of business lending commitments, commercial and consumer unused revolving credit lines, inventory financing arrangements and investment commitments.

We manage counterparty exposure, including credit risk, on an individual counterparty basis. We place defined risk limits around each obligor and review our risk exposure on the basis of both the primary and parent obligor, as well as the issuer of securities held as collateral. These limits are adjusted on an ongoing basis based on our continuing assessment of the credit risk of the obligor or issuer. In setting our counterparty risk limits, we focus on high-quality credits and diversification through spread of risk in an effort to actively manage our overall exposure. We actively monitor each exposure against these limits and take appropriate action when we believe that risk limits have been exceeded or there are excess risk concentrations. Our collateral position and ability to work out problem accounts have historically mitigated our actual loss experience. Delinquency experience has been relatively stable in our European commercial and consumer platforms in the aggregate, and we actively monitor and take action to reduce exposures where appropriate. Uncertainties surrounding European markets could have an impact on the judgments and estimates used in determining the carrying value of these assets.

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VENEZUELA

OIL & GAS INDUSTRY

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CRITICAL ACCOUNTING ESTIMATES

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OTHER ITEMS

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CONTROLS AND PROCEDURES

OTHER FINANCIAL DATA

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REGULATIONS AND SUPERVISION

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LEGAL PROCEEDINGS

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Two cases are pending against WMC in the United States District Court for the Southern District of New York. One case, in which the plaintiff is BNY, was filed in the third quarter 2012. In the second quarter 2013, BNY filed an amended complaint in which it asserts claims on approximately $900 million of mortgage loans, and seeks to recover damages in excess of $378 million. In September 2013, the District Court denied WMC's motion to dismiss. On September 18, 2014, the District Court issued an order directing the parties to participate in settlement discussions before a private mediator or the assigned magistrate judge. Following this mediation, the parties reached a settlement in principle on the claims arising from a portion of the loans held in the trust (the "Group1" loans), and, as a result, on February 9, 2015 the District Court stayed the case as to these claims. The District Court has scheduled a trial on the remaining claims in the case to begin on September 21, 2015. The second case was initiated by the Federal Housing Finance Agency (FHFA), which filed a summons with notice in the fourth quarter 2012. In the second quarter 2013, Deutsche Bank, in its role as securitization trustee of the trust at issue in the case, intervened as a plaintiff and filed a complaint relating to approximately $1,300 million of loans and alleging losses in excess of approximately $100 million. In December 2013, the District Court issued an order denying WMC's motion to dismiss. In February 2015, the District Court on its own motion requested that the parties re-brief several issues raised by WMC's motion to dismiss.  On July 10, 2015, the District Court entered an order dismissing the lawsuit as time-barred under the applicable statute of limitations.

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FINANCIAL STATEMENTS AND NOTES