8-KOther EventsExhibits & Filings

GENERAL ELECTRIC CO 8-K Report, Corporate Update (May 8, 2015)

Filed May 8, 2015For Securities:GE

Summary

General Electric Company (GE) is filing an 8-K to update its 2014 Form 10-K with revised financial information. The primary change is the reclassification of its Real Estate business to discontinued operations as part of a larger strategic initiative known as the GE Capital Exit Plan. This plan aims to significantly reduce the size of GE's financial services businesses over the next 24 months, with a focus on reinvesting and growing its industrial segments. The company is selling the substantial majority of GE Capital's Real Estate debt and equity portfolio for approximately $26.5 billion. This strategic shift involves retaining only GE Capital businesses that directly align with GE's core industrial domain, such as aviation, energy financial services, and healthcare equipment finance. The company anticipates substantial after-tax charges, estimated at $23 billion through 2016, related to these dispositions, tax implications from repatriating foreign earnings, and restructuring efforts.

Key Highlights

  • 1Reclassification of GE's Real Estate business to discontinued operations in the 2014 Form 10-K financial statements.
  • 2Announcement of the GE Capital Exit Plan, aiming to reduce the size of financial services businesses over 24 months.
  • 3Sale of the majority of GE Capital's Real Estate portfolio to The Blackstone Group for approximately $26.5 billion.
  • 4Strategic retention of GE Capital businesses directly supporting core industrial segments (e.g., GECAS, Energy Financial Services, Healthcare Equipment Finance).
  • 5GE has provided an unconditional guarantee for approximately $210 billion of GE Capital's outstanding debt as of April 10, 2015.
  • 6Estimated $23 billion in after-tax charges through 2016 related to business dispositions, repatriation of foreign earnings, and restructuring.
  • 7Recorded $16.1 billion in after-tax charges in Q1 2015 related to the GE Capital Exit Plan.

Frequently Asked Questions

This 8-K is filed to revise certain financial information in GE's 2014 Form 10-K, specifically to reclassify its Real Estate business as discontinued operations. This is part of GE's broader strategy to exit large portions of its financial services business, known as the GE Capital Exit Plan.

The GE Capital Exit Plan is a strategic initiative to significantly reduce the size of GE's financial services businesses by selling most of General Electric Capital Corporation (GECC) assets over the next 24 months. The goal is to focus GE's investments and growth on its core industrial businesses.

GE estimates it will incur approximately $23 billion in after-tax charges through 2016. This includes charges for business dispositions, tax expenses related to repatriating foreign earnings, and restructuring costs. GE has already recorded $16.1 billion in after-tax charges in the first quarter of 2015 related to this plan.

GE has issued a full and unconditional guarantee for approximately $210 billion of GECC's outstanding long-term debt and commercial paper. This ensures that GECC's debt holders are protected as GE divests these assets, but it also means GE remains financially responsible for this significant debt load.