10-KPeriod: FY2020

GENERAL ELECTRIC CO Annual Report, Year Ended Dec 31, 2020

Filed February 12, 2021For Securities:GE

Summary

General Electric Company (GE) reported its 2020 fiscal year results, marked by significant impacts from the COVID-19 pandemic, particularly on its Aviation segment. Despite a substantial year-over-year revenue decline, GE demonstrated resilience through cost-saving measures and a notable reduction in borrowings, enhancing its liquidity position with $36.6 billion in cash and cash equivalents. The company completed the divestiture of its BioPharma business for $21.1 billion, contributing to a significant pre-tax gain. However, it also recorded substantial non-cash impairment charges related to goodwill and assets across its Aviation, Power, and Capital segments, largely driven by the pandemic's impact and strategic business exits. GE is actively managing its portfolio and de-leveraging its balance sheet, with consolidated borrowings reduced by $15.8 billion. Looking ahead, GE continues to navigate economic uncertainties while focusing on operational execution and strategic priorities, including advancements in its Renewable Energy and Healthcare segments. The company's ability to manage costs and cash flow, alongside its deleveraging efforts, will be critical for investor confidence in the near to medium term.

Financial Highlights

53 data points
Beta

Revenue

$75.83B

20.3% Gross Margin

Net Income

$5.70B

7.5% Net Margin

EPS (Diluted)

$4.63

Total Assets

$256.21B

Cash & Equivalents

$36.53B

Free Cash Flow

$1.99B

Financial Statements
Beta
Revenue$75.83B
Cost of Revenue$60.42B
Gross Profit$15.41B
R&D Expenses$2.56B
SG&A Expenses$12.63B
Operating Expenses$81.26B
Operating Income-$6.11B
Net Income$5.70B
EPS (Basic)$4.63
EPS (Diluted)$4.63
Shares Outstanding (Basic)1.09B
Shares Outstanding (Diluted)1.09B

Key Highlights

  • 1Total revenues decreased by 16% to $79.6 billion, heavily impacted by COVID-19, especially in the Aviation segment.
  • 2GE Industrial net debt decreased by $15.6 billion to $32.3 billion due to debt repayments and increased cash balance.
  • 3Completed the sale of BioPharma business for $21.1 billion, recognizing a $12.4 billion pre-tax gain.
  • 4Recognized significant non-cash impairment charges totaling $2.5 billion across various segments (Aviation, Capital, Power) due to the pandemic and strategic decisions.
  • 5Aviation segment experienced a severe revenue decline of 33% and an 82% drop in profit due to reduced commercial air traffic.
  • 6Healthcare segment saw increased demand for certain products like ventilators, partially offsetting declines in other areas.
  • 7Ended the year with $36.6 billion in consolidated cash, cash equivalents, and restricted cash, with $20.2 billion in available credit lines, indicating a strong liquidity position.

Frequently Asked Questions

The COVID-19 pandemic had a material adverse impact on GE's operations and financial performance, particularly in its Aviation segment due to reduced global air travel. This led to decreased demand for commercial engines and services, lower shop visits, and a significant drop in revenue and profit for the segment. While Healthcare saw increased demand for certain products like ventilators, overall business performance was affected by varying degrees across segments due to operational and supply chain disruptions, and reduced customer spending.

GE significantly reduced its consolidated borrowings by $15.8 billion in 2020. This was achieved through debt tenders at GE Industrial ($4.2 billion) and GE Capital ($11.9 billion), repayment of GE Industrial commercial paper ($3.0 billion), and debt maturities at GE Capital ($10.5 billion), partially offset by new debt issuances. GE Industrial's net debt decreased by $15.5 billion.

GE recognized substantial non-cash pre-tax impairment charges totaling $2.5 billion in 2020. These included goodwill impairments in Aviation ($0.9 billion) and Capital ($0.8 billion), as well as impairments of property, plant, and equipment and intangible assets in Power ($0.4 billion) and impairments on the GECAS leasing portfolio ($0.5 billion). These were driven by the pandemic's impact and strategic shifts, such as exiting the new build coal power market. The company also completed the sale of its BioPharma business for $21.1 billion, which resulted in a significant pre-tax gain of $12.4 billion.

GE ended 2020 with a strong liquidity position, holding $36.6 billion in consolidated cash, cash equivalents, and restricted cash. In addition to this cash balance, the company had access to $20.2 billion in available credit lines. GE Industrial's cash, cash equivalents, and restricted cash totaled $23.2 billion, while GE Capital held $13.4 billion.