Skip to content
AnalystLens

GENERAL ELECTRIC CO Annual Report, Year Ended Dec 31, 2013

Filing Date
Filed February 27, 2014
Period End
December 31, 2013
Security
GE
In the record · 2016–202610-K1110-Q348-K179

GE filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 179 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Deal closed8-K · Apr ’20Apr ’20
  3. Leadership change8-K · Dec ’21Dec ’21
  4. Leadership change8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed February 27, 2014. Cited figures are marked; the original filing is the authoritative source.

General Electric's FY2013 Form 10-K (filed February 27, 2014) shows a company in transition: industrial earnings growing while GE Capital is deliberately shrinking.

Consolidated earnings from continuing operations attributable to GE rose 4% to $15.2 billiona, and diluted EPS from continuing operations rose 7% to $1.47. Net earnings attributable to GE fell 4% to $13.1 billion because of $2.1 billion in losses from discontinued operations, driven mainly by a $1.6 billion after-tax charge to extinguish a loss-sharing obligation tied to the 2008 sale of GE Money Japan. Industrial segment profit grew, Aviation and Oil & Gas led, and GE reported a record $244 billion infrastructure backlog entering 2014.

GE Capital is the central focus of the filing. Its ending net investment (ENI), excluding cash, fell to $380 billionb, against a stated target of $300–350 billion, and management acknowledges that exiting non-core assets will reduce future net earnings in the short term. GE Capital earnings rose 12% to $8.3 billion, helped by dispositions such as the partial IPO of Swiss bank Cembra and the sale of its Bay Ayudhya stake, though these gains were partly offset by higher impairments.

The company also disclosed a staged exit from North American Retail Finance, beginning with a 2014 IPO of up to 20% and a planned split-off in 2015, along with a $6.4 billionc MetLife Bank deposit acquisition and a 2013 designation of GECC as a nonbank systemically important financial institution. Balance-sheet and shareholder items point to a strengthened position. Consolidated cash reached $88.6 billion, and the company returned capital through $8.1 billion in dividends and buybacks under a $35 billion authorization.

The quarterly dividend was raised to $0.22d. Credit ratings were held at AA+ (S&P) and Aa3/A1 (Moody's, GE/GECC). Key risks include the expiration of a U.S. tax provision on active financial services income, which management expects to raise the effective tax rate after 2014, continuing WMC mortgage repurchase litigation with roughly $5.6 billion in pending claims, and a GE Pension Plan that was $4.7 billion underfunded at year-end, down from $13.3 billion.

02—Key points

Key Highlights

  1. Earnings from continuing operations attributable to GE rose 4% to $15.2 billion; diluted EPS from continuing operations rose 7% to $1.47, and operating EPS rose 9% to $1.64.
  2. Net earnings attributable to GE fell 4% to $13.1 billion, pressured by a $2.1 billion loss from discontinued operations, including a $1.6 billion after-tax charge to extinguish the GE Money Japan excess-interest obligation.
  3. GE Capital ending net investment fell to $380 billion (excluding cash), progressing toward a $300–350 billion target, while GECC segment profit rose 12% to $8.3 billion on dispositions and gains.
  4. Industrial backlog reached a record $244 billion, with Aviation at $125 billion, Power & Water at $65 billion, and Oil & Gas up 27% to $19 billion.
  5. Shareholder returns were strong: $8.1 billion in dividends declared, $10.4 billion in share repurchases in 2013, and the quarterly dividend raised to $0.22 for 2014.
  6. A staged exit from North American Retail Finance was announced, starting with an IPO of up to 20% in 2014 and a planned 2015 split-off to GE stockholders.
  7. Key risks include the expected rise in the effective tax rate after 2014 if the U.S. deferral of tax on active financial services income is not extended, and continuing WMC mortgage-repurchase litigation with $5.6 billion in pending claims.

03—One dollar

Follow one dollar

Of each $1.00 of revenue in FY2013, General Electric Co kept $0.12.

  1. Revenue$113.25B100.0%
  2. Cost of revenue−$57.87B51.1%
  3. Gross profit$55.38B48.9%
  4. Operating costs−$47.76B42.2%
  5. Operating income$7.62B6.7%
  6. Interest, other & tax$5.44B4.8%
  7. Net income$13.06B11.5%
Computed from 10-KFY2013filed February 27, 2014Computed from this filing’s revenue, gross profit, operating income and net income · right columngrey figure: share of revenue

Where FY2013 revenue went

$113.25B
  • Cost of revenue: $57.87B, 51% of revenue
  • Other operating costs: $24.35B, 22% of revenue
  • SG&A: $17.95B, 16% of revenue
  • Operating income: $7.62B, 6.7% of revenue
  • R&D: $5.46B, 4.8% of revenue

Kept 6.7% as operating incomeOperating income $7.62B · 6.7%

Full revenue history →

04—Financials

Financial Highlights

Figures from 10-KFY2013filed February 27, 2014
Revenue$113.25B48.9% Gross MarginNet Income$13.06B11.5% Net MarginEPS (Diluted)$10.16Total Assets$663.25BFree Cash Flow$21.76B

Financial Statements

FY2013 against FY2012

Line itemFY2013FY2012Change
Revenue$113.25B$112.59B+0.6%
Cost of Revenue$57.87B$56.78B+1.9%
Gross Profit$55.38B$55.80B−0.8%
R&D Expenses$5.46B$5.20B+5.0%
SG&A Expenses$17.95B——
Operating Expenses$104.14B$129.30B−19.5%
Operating Income$7.62B$22.89B−66.7%
Net Income$13.06B$13.64B−4.3%
EPS (Basic)$10.24$10.32−0.8%
EPS (Diluted)$10.16$10.32−1.6%
Shares Outstanding (Basic)1.28B1.32B−2.9%
Shares Outstanding (Diluted)1.29B1.32B−2.6%

05—Questions

Frequently Asked Questions

  1. Why did net earnings decline even though earnings from continuing operations grew?

    Losses from discontinued operations rose to $2.1 billion in 2013, versus $1.0 billion in 2012. The largest driver was a $1.6 billion after-tax reserve increase tied to an agreement to extinguish GE's loss-sharing obligation on the 2008 sale of GE Money Japan, which GE agreed to on February 26, 2014 for about $1.7 billion. Continuing operations grew 4%, but that gain was more than offset by these discontinued-operations charges.

  2. How is GE Capital's shrinking balance sheet expected to affect future earnings?

    Management states that reducing ENI through exits from non-core businesses may lower future net earnings in the short term. The company argues that over the longer term the strategy should produce higher returns on a concentrated core portfolio, reduce reliance on commercial paper, and lower capital requirements. Investors should therefore expect near-term earnings pressure from the GE Capital downsizing even as the industrial businesses grow.

  3. What were the main drivers of the 2013 tax rate, and what risk does it carry?

    The consolidated effective tax rate fell to 4.2% in 2013 from 14.6% in 2012, mainly due to benefits from lower-taxed global operations, including the Cembra IPO, and audit resolutions. The key forward risk is the U.S. provision deferring tax on active financial services income, which was reinstated only through 2013. If Congress does not extend it, management expects the effective tax rate to rise significantly after 2014.

  4. How significant is the WMC mortgage litigation, and how has it been reserved?

    WMC, the U.S. mortgage business sold in 2007, had $5.6 billion of pending repurchase claims and a reserve of $800 million at December 31, 2013. Separately, 14 lawsuits are pending, and in 12 of them plaintiffs seek relief on about $6.2 billion of loans beyond the pending claims. WMC believes these Litigation Claims conflict with governing agreements and holds no reserve for them, but it acknowledges that an adverse court decision could increase its exposure materially.

06—Continue

← View all 10-K filings