This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

GE Reports 4Q’12 Operating EPS $0.44, +13% 4Q Revenues $39.3B +4%, Industrial Organic Growth +8% For Total Year Operating Margins Expand 120 Bps Over 4Q’11, Total Year Up 30 Bps Record Backlog Of $210B

Supplemental consolidating data are shown for "GE" and "GECC." Transactions between GE and GECC have been eliminated from the "Consolidated" columns. See Note 1 to the 2011 consolidated financial statements at www.ge.com/ar2011 for further information about consolidation matters.

 
 

GENERAL ELECTRIC COMPANY

Financial Measures That Supplement GAAP

 
We sometimes use information derived from consolidated financial information 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 U.S. Securities and Exchange Commission rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. We have referred to operating earnings, operating earnings per share (EPS), operating EPS excluding the effects of the third-quarter 2011 preferred stock redemption, total revenues excluding the effect of a pre-tax gain on the sale of NBC Universal (NBCU) in 2011, Industrial segment organic revenue growth, GE Capital ending net investment (ENI) excluding cash and equivalents and cash generated from GE Industrial operating activities (Industrial CFOA). The reconciliations of these measures to the most comparable GAAP measures follow.
 
Operating Earnings and Operating Earnings Per Share
           
(Dollars in millions; except earnings per share) Three Months Ended December 31
2012 2011 V%
 
Earnings from continuing operations attributable to GE $4,316 $3,970 9%
Adjustment (net of tax): non-operating pension costs/(income) 350 172
Operating earnings $4,666 $4,142 13%
 

Earnings per share – diluted(a)

Continuing earnings per share $0.41 $0.37 11%
Adjustment (net of tax): non-operating pension costs/(income) 0.03 0.02
Operating earnings per share $0.44 $0.39 13%
 
 
Twelve Months Ended December 31
(Dollars in millions; except earnings per share) 2012 2011 V%
 
Earnings from continuing operations attributable to GE $14,679 $14,227 3%
Adjustment (net of tax): non-operating pension costs/(income) 1,386 688
Operating earnings $16,065 $14,915 8%
 

Earnings per share – diluted(a)

Continuing earnings per share $1.39 $1.24 12%
Adjustment (net of tax): non-operating pension costs/(income) 0.13 0.06
Operating earnings per share 1.52 1.31 16%
 
Less: Effects of the third-quarter 2011 preferred stock redemption - 0.08
Operating EPS excluding the effects of the third-quarter 2011 preferred stock redemption $1.52 $1.38 10%
 

(a) Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.

Operating earnings excludes non-service related pension costs of our principal pension plans comprising interest cost, expected return on plan assets and amortization of actuarial gains/losses. The service cost and prior service cost components of our principal pension plans are included in operating earnings. We believe that these components of pension cost better reflect the ongoing service-related costs of providing pension benefits to our employees. As such, we believe that our measure of operating earnings provides management and investors with a useful measure of the operational results of our business. Other components of GAAP pension cost are mainly driven by market performance, and we manage these separately from the operational performance of our businesses. Neither GAAP nor operating pension costs are necessarily indicative of the current or future cash flow requirements related to our pension plan. We also believe that this measure, considered along with the corresponding GAAP measure, provides management and investors with additional information for comparison of our operating results to the operating results of other companies.

 
 
Total Revenues Excluding the Effect of a Pre-Tax Gain on the Sale of NBCU in 2011
             
(Dollars in millions) Twelve Months Ended December 31
2012 2011 V%
 
Total revenues and other income $ 147,359 $ 147,288 - %
 
Less the effect of a pre-tax gain on the sale of NBCU in 2011   -   3,705
 

Total revenues and other income less the effect a pre-tax gain on the sale of NBCU in 2011 (total revenues excluding the pre-tax gain on the sale of NBCU in 2011)

$ 147,359 $ 143,583 3 %
 

We believe that this measure provides management and investors with a more complete understanding of underlying operating results and revenue trends by excluding the effects of a gain related to the sale of a business, which can obscure underlying trends.

       
 
Industrial Segment Organic Revenue Growth
Three Months Ended December 31
(Dollars in millions) 2012     2011     V%
 
Segment revenues:
Power & Water $ 7,652 $ 7,538
Oil & Gas 4,548 4,083
Energy Management 1,934 1,954
Aviation 5,467 4,924
Healthcare 5,183 5,163
Transportation 1,364 1,464
Home & Business Solutions   2,068     2,019
Industrial segment revenues 28,216 27,145 4 %
Less the effects of:

Acquisitions, business dispositions (other than dispositions of businesses acquired for investment) and currency exchange rates

  (24 )   40

Industrial segment revenues excluding effects of acquisitions, business dispositions (other than dispositions of businesses acquired for investment) and currency exchange rates (Industrial segment organic revenues)

$ 28,240   $ 27,105 4 %
 
 
 
Twelve Months Ended December 31
(Dollars in millions) 2012 2011 V%
 
Segment revenues:
Power & Water $ 28,299 $ 25,675
Oil & Gas 15,241 13,608
Energy Management 7,412 6,422
Aviation 19,994 18,859
Healthcare 18,290 18,083
Transportation 5,608 4,885
Home & Business Solutions   7,967     7,693
Industrial segment revenues 102,811 95,225 8 %
Less the effects of:

Acquisitions, business dispositions (other than dispositions of businesses acquired for investment) and currency exchange rates

  972     1,112

Industrial segment revenues excluding effects of acquisitions, business dispositions (other than dispositions of businesses acquired for investment) and currency exchange rates (Industrial segment organic revenues)

$ 101,839   $ 94,113 8 %
 

Organic revenue growth measures revenue excluding the effects of acquisitions, business dispositions and currency exchange rates. We believe that this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and currency exchange, which activities are subject to volatility and can obscure underlying trends. We also believe that presenting organic revenue growth separately for our industrial businesses provides management and investors with useful information about the trends of our industrial businesses and enables a more direct comparison to other non-financial businesses and companies. Management recognizes that the term "organic revenue growth" may be interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the respective businesses or companies and may therefore be a useful tool in assessing period-to-period performance trends.

             
 
GE Capital Ending Net Investment (ENI), Excluding Cash and Equivalents
 
December 31,
(In billions) 2012
GECC total assets $ 539.2
Less assets of discontinued operations (1.1 )
Less non-interest bearing liabilities   (57.6 )
GE Capital ENI 480.5
Less cash and equivalents   (61.9 )
GE Capital ENI, excluding cash and equivalents $ 418.6  
 

We use ENI to measure the size of our GE Capital segment. We believe that this measure is a useful indicator of the capital (debt or equity) required to fund a business as it adjusts for non-interest bearing current liabilities generated in the normal course of business that do not require a capital outlay. We also believe that by excluding cash and equivalents, we provide a meaningful measure of assets requiring capital to fund our GE Capital segment as a substantial amount of this cash resulted from debt issuances to pre-fund future debt maturities and will not be used to fund additional assets. Providing this measure will help investors measure how we are performing against our previously communicated goal to reduce the size of our financial services segment.

 
 
Industrial CFOA
        Three Months Ended December 31
(Dollars in millions) 2012     2011     V%
 
Cash from GE's operating activities as reported $ 7,174 $ 5,513 30 %
Less dividends from GECC   980  

Cash from GE's operating activities excluding dividends from GECC (Industrial CFOA)

$ 6,194 $ 5,513 12 %
 
 
Twelve Months Ended December 31
(Dollars in millions) 2012 2011 V%
 
Cash from GE's operating activities as reported $ 17,826 $ 12,057 48 %
Less dividends from GECC   6,426  

Cash from GE's operating activities excluding dividends from GECC (Industrial CFOA)

$ 11,400 $ 12,057 (5 )%
 

We define “Industrial CFOA” as GE’s cash from operating activities less the amount of dividends received by GE from GECC. This includes the effects of intercompany transactions, including GE customer receivables sold to GECC; GECC services for trade receivables management and material procurement; buildings and equipment (including automobiles) leased by GE from GECC; information technology (IT) and other services sold to GECC by GE; aircraft engines manufactured by GE that are installed on aircraft purchased by GECC from third-party producers for lease to others; and various investments, loans and allocations of GE corporate overhead costs. We believe that investors may find it useful to compare GE’s operating cash flows without the effect of GECC dividends, since these dividends are not representative of the operating cash flows of our industrial businesses and can vary from period to period based upon the results of the financial services businesses. Management recognizes that this measure may not be comparable to cash flow results of companies which contain both industrial and financial services businesses, but believes that this comparison is aided by the provision of additional information about the amounts of dividends paid by our financial services business and the separate presentation in our financial statements of the GECC cash flows. We believe that our measure of Industrial CFOA provides management and investors with a useful measure to compare the capacity of our industrial operations to generate operating cash flow with the operating cash flow of other non-financial businesses and companies and as such provides a useful measure to supplement the reported GAAP CFOA measure.

8 of 9

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,071.35 -50.66 -0.30%
S&P 500 1,996.42 -3.70 -0.18%
NASDAQ 4,560.3920 -9.2290 -0.20%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs