10-Q/APeriod: Q3 FY2016

GENERAL ELECTRIC CO Quarterly Report (Amendment) for Q3 Ended Sep 30, 2016

Filed November 9, 2016For Securities:GE

Summary

This Form 10-Q/A filing for General Electric Company (GE) for the period ending September 30, 2016, primarily serves to correct an omission in the original filing concerning guarantor financial information. The company's financial performance shows a significant reduction in GE Capital's assets and liabilities, largely due to the ongoing GE Capital Exit Plan. Consolidated revenues increased year-over-year, driven by strong performance in the Power and Aviation segments, while the Oil & Gas segment experienced a notable decline. The company continued its strategic focus on divesting non-core financial assets and investing in its industrial businesses, including the announced combination of its Oil & Gas business with Baker Hughes and the acquisition of LM Wind Power. Shareholder returns remained a priority, with substantial amounts returned through share repurchases and dividends.

Financial Highlights

45 data points
Beta

Revenue

$29.27B

21.8% Gross Margin

Net Income

$2.03B

6.9% Net Margin

EPS (Diluted)

$1.76

Total Assets

$387.69B

Free Cash Flow

-$1.09B

Financial Statements
Beta
Revenue$29.27B
Cost of Revenue$15.26B
Gross Profit$6.39B
SG&A Expenses$4.34B
Operating Expenses$27.19B
Operating Income$5.64B
Net Income$2.03B
EPS (Basic)$1.76
EPS (Diluted)$1.76
Shares Outstanding (Basic)1.11B
Shares Outstanding (Diluted)1.13B

Key Highlights

  • 1Consolidated revenues increased by 4% to $29.3 billion for the third quarter of 2016 compared to the prior year, primarily driven by growth in the Power and Renewable Energy segments, bolstered by the Alstom acquisition.
  • 2The GE Capital Exit Plan is progressing, with GE Capital's total assets reduced by 59% from December 31, 2014, to $203 billion as of September 30, 2016.
  • 3GE announced a significant agreement to combine its Oil & Gas business with Baker Hughes, forming a new partnership where GE will hold a 62.5% interest.
  • 4Shareholder returns were robust, with $24.5 billion returned through buybacks and dividends in the first nine months of 2016.
  • 5The Power segment saw a 37% revenue increase in the third quarter, largely due to the Alstom acquisition and increased gas turbine shipments.
  • 6The Oil & Gas segment experienced a 25% revenue decrease in the third quarter due to challenging market conditions, impacting equipment and services volume.
  • 7GE successfully completed the sale of its Appliances business to Haier for $5.6 billion, recognizing a $1.9 billion after-tax gain.

Frequently Asked Questions

This amended filing (Form 10-Q/A) is for the sole purpose of including a table in Note 18 - Guarantor Financial Information that was inadvertently omitted from the original Form 10-Q due to an Edgarization process error. No other changes have been made to the original filing.

The GE Capital Exit Plan is significantly reducing the size of GE's financial services businesses. As of September 30, 2016, GE Capital's total assets were reduced by 59% from December 31, 2014, to $203 billion. The company expects to largely complete this plan by the end of 2016. This plan involves divesting most of GE Capital's assets and focusing on industrial businesses. GE Capital's designation as a nonbank Systemically Important Financial Institution (SIFI) was also rescinded.

Key strategic developments include the agreement to combine GE's Oil & Gas business with Baker Hughes, creating a new partnership. GE also announced plans to acquire LM Wind Power, a Danish wind turbine blade manufacturer, and acquired the remaining stake in the software developer Meridium Inc. to enhance asset performance management capabilities.

The acquisition of Alstom's Thermal, Renewables and Grid businesses significantly impacted GE's results, particularly in the Power, Energy Connections & Lighting, and Renewable Energy segments. For the nine months ended September 30, 2016, Alstom contributed $9.2 billion in revenues. While the acquisition contributed to revenue growth, it also introduced purchase accounting effects and acquisition-related charges that impacted earnings and segment profit margins.