What is the main purpose of this 8-K filing?

The primary purpose of this 8-K filing is to disclose changes in General Electric's segment reporting methodology, particularly for its financial services businesses, and an increase in the number of reportable segments. These changes are effective from January 1, 2003, and affect how segment profit is measured and reported.

How does the 'releveraging' of GE Capital affect its financial reporting?

The 'releveraging' involves applying business-specific, market-based leverage ratios to measure the performance of GE Capital's financial services businesses, replacing the previous standardized 8:1 consolidated leverage ratio. This reclassification means $12.5 billion of debt is now allocated to the 'All Other GECS' segment. Importantly, this change impacts the reporting of segment profit and does not restate or revise GE's overall financial position, results of operations, or cash flows.

Why is GE increasing the number of its reportable segments?

GE is increasing its reportable segments from twelve to fourteen to better align with how senior management evaluates and operates the company's industrial businesses. Specific changes include separating Plastics and Specialty Materials, disaggregating Transportation Systems, and adjusting the presentation of the Medical Systems business following the divestiture of Global eXchange Services (GXS).

GE 8-K SEC Disclosure — Apr 10, 2003

Q: Will these changes impact GE's overall financial statements?

No, the filing explicitly states that these changes affect only the disclosures related to segment results. They do not restate or revise the company's overall financial position, results of operations, or cash flows as presented in its consolidated financial statements. Future consolidated statements will reflect these modified segment classifications and data.

Summary

This 8-K filing by General Electric (GE) on April 10, 2003, primarily addresses changes in how the company reports its financial segment results, effective January 1, 2003. The most significant change involves a "releveraging" of GE Capital's financial services businesses. Historically, these businesses were assigned debt and interest costs based on an 8:1 leverage ratio. The company is now applying business-specific, market-based leverage ratios for performance measurement, which resulted in $12.5 billion of debt being reallocated to the 'All Other GECS' segment. This impacts the reported segment profit without restating the company's overall financial position, results of operations, or cash flows. Additionally, GE is increasing its number of reportable segments from twelve to fourteen. This includes separating Plastics and Specialty Materials into their own segments, disaggregating Transportation Systems, and presenting the former Technical Products and Services segment (now largely Medical Systems after the GXS divestiture) with Corporate items for better comparability. The filing provides reclassified historical segment data for 2002 to reflect these changes, which will be incorporated into future consolidated financial statements.

Key Highlights

1GE is changing its segment reporting methodology, particularly for financial services businesses, effective January 1, 2003.
2A 'releveraging' of GE Capital's financial services businesses is occurring, shifting from a consolidated 8:1 debt-to-equity ratio to business-specific, market-based leverage ratios for performance measurement.
3Approximately $12.5 billion of debt previously allocated to financial services segments has been reallocated to the 'All Other GECS' segment due to the releveraging.
4The number of GE's reportable segments will increase from twelve to fourteen.
5Plastics and Specialty Materials will now be reported as separate segments.
6Transportation Systems will be disaggregated from Industrial Products and Services.
7Prior period segment results are being reclassified to conform to the new segment structure and reporting changes.

GENERAL ELECTRIC CO 8-K Report (Apr 10, 2003)

Summary

Key Highlights

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