XML 49 R21.htm IDEA: XBRL DOCUMENT v3.8.0.1
SHAREOWNERS’ EQUITY
3 Months Ended
Mar. 31, 2018
Equity [Abstract]  
SHAREOWNERS’ EQUITY
NOTE 15. SHAREOWNERS’ EQUITY
 
Three months ended March 31
(In millions)
2018

2017

 
 
 
Preferred stock issued
$
6

$
6

Common stock issued
$
702

$
702

Accumulated other comprehensive income (loss)
 
 
Balance at January 1
$
(14,404
)
$
(18,588
)
Other comprehensive income (loss) before reclassifications
 
 
Investment securities - net of deferred taxes of $65 and $13(a)
109

18
Currency translation adjustments (CTA) - net of deferred taxes of $(149) and $(33)
832

258
Cash flow hedges - net of deferred taxes of $31 and $5
105

20
Benefit plans - net of deferred taxes of $(1) and $101
(58
)
474
Total
$
988

$
770

Reclassifications from other comprehensive income
 
 
Investment securities - net of deferred taxes of $(2) and $(36)(b)
(10
)
(69
)
Currency translation gains (losses) on dispositions - net of deferred taxes of zero and $(540)(b)
(2
)
554

Cash flow hedges - net of deferred taxes of $(15) and $1(c)
(50
)

Benefit plans - net of deferred taxes of $218 and $288(d)
775

574

Total
$
713

$
1,059

Other comprehensive income (loss)
1,702

1,828

Less other comprehensive income (loss) attributable to noncontrolling interests
160

6

Other comprehensive income (loss), net, attributable to GE
$
1,542

$
1,822

Ending Balance
$
(12,862
)
$
(16,766
)
Other capital
 
 
Balance at January 1
$
37,384

$
37,224

Gains (losses) on treasury stock dispositions and other
(45
)
224

Ending Balance
$
37,339

$
37,448

Retained earnings
 
 
Balance at January 1(e)
$
117,245

$
133,856

Net earnings (loss) attributable to the Company
(1,147
)
(83
)
Dividends and other transactions with shareowners
(1,078
)
(2,128
)
Redemption value adjustment on redeemable noncontrolling interests(f)
(44
)
(101
)
Other changes(g)
500


Ending Balance
$
115,477

$
131,544

Common stock held in treasury
 
 
Balance at January 1
$
(84,902
)
$
(83,038
)
Purchases
(85
)
(2,359
)
Dispositions
290

564

Ending Balance
$
(84,697
)
$
(84,833
)
Total equity
 
 
GE shareowners' equity balance
$
55,965

$
68,100

Noncontrolling interests balance
17,228

1,639

Total equity balance at March 31
$
73,193

$
69,740


(a)
Included adjustments of $938 million and $(99) million for the three months ended March 31, 2018 and 2017, respectively, to investment contracts, insurance liabilities and annuity benefits in our run-off insurance operations to reflect the effects that would have been recognized had the related unrealized investment securities holding gains been realized. See Note 12 for further information.
(b)
Recorded in total revenues and other income and income taxes in benefit (provision) for income taxes in the Statement of Earnings (Loss). Currency translation gains (losses) on dispositions included zero and $510 million million for the three months ended March 31, 2018 and 2017, respectively, in earnings (loss) from discontinued operations, net of taxes.
(c)
Cash flow hedges primarily includes impact of foreign exchange contracts and gains (losses) on interest rate derivatives, primarily recorded in GE Capital revenue from services, interest and other financial charges and other costs and expenses. See Note 17 for further information.
(d)
Primarily includes amortization of actuarial gains (losses), amortization of prior service cost and curtailment gain (loss). These components are included in the computation of net periodic pension cost. See Note 13 for further information.
(e)
Amount has been adjusted to reflect retrospective adoption of ASC 606 ($8,061 million) and preferable accounting change from LIFO to FIFO ($377 million).
(f)
Amount of redemption value adjustment on redeemable noncontrolling interest shown net of deferred taxes.
(g)
On January 1, 2018, we adopted several new accounting standards on a modified retrospective basis. Cumulative impact of these changes was recorded in the opening retained earnings and it increased our retained earnings by $500 million, primarily due to an increase of $464 million related to ASU 2016-16. See Note 1 for further information.
SHARES OF GE PREFERRED STOCK

On January 20, 2016, we issued $5,694 million of GE Series D preferred stock following an exchange offer for existing GE series A, B and C. The Series D preferred stock bear a fixed interest rate of 5.00% through January 21, 2021 and floating rate equal to three-month LIBOR plus 3.33% thereafter. The Series D preferred stock are callable on January 21, 2021. Following the exchange offer, $250 million of GE Series A, B and C preferred stock still remain outstanding with an initial average fixed dividend rate of 4.07%. The total carrying value of GE preferred stock at March 31, 2018 was $5,461 million and will increase to $5,944 million through periodic accretion. Dividends on GE preferred stock are payable semi-annually, in June and December and accretion is recorded on a quarterly basis. Dividends on GE preferred stock for accretion totaled $37 million and $34 million for the three months ended March 31, 2018 and 2017, respectively.

In conjunction with the 2016 exchange of the GE Capital preferred stock into GE preferred stock and the exchange of Series A, B and C preferred stock into Series D preferred stock, GE Capital issued preferred stock to GE for which the amount and terms mirror the GE preferred stock held by external investors ($5,461 million carrying value at March 31, 2018).

NONCONTROLLING INTERESTS

Noncontrolling interests in equity of consolidated affiliates include common shares in consolidated affiliates and preferred stock issued by our affiliates.
CHANGES TO NONCONTROLLING INTERESTS
 
Three months ended March 31
(In millions)
2018

2017


 
 
Balance at January 1
$
17,468

$
1,663

Net earnings (loss)
67

5

Dividends
(83
)
(9
)
Other(a)
(224
)
(20
)
Ending balance at March 31
$
17,228

$
1,639

(a)
Includes impact of AOCI, acquisitions, dispositions and BHGE stock repurchases.

REDEEMABLE NONCONTROLLING INTERESTS

Redeemable noncontrolling interests presented in our Statement of Financial Position include common shares issued by our affiliates that are redeemable at the option of the holder of those interests.

As part of the Alstom acquisition in 2015, we formed three joint ventures in grid technology, renewable energy, and global nuclear and French steam power. Noncontrolling interests in these joint ventures hold certain redemption rights. Our retained earnings is adjusted for subsequent changes in the redemption value of the noncontrolling interest in these entities to the extent that the redemption value exceeds the carrying amount of the noncontrolling interest.

Alstom holds redemption rights with respect to its interest in the grid technology and renewable energy joint ventures, which, if exercised, would require us to purchase all of their interest during September 2018 or September 2019. Alstom also holds similar redemption rights for the global nuclear and French steam power joint venture that are exercisable during the first quarter of 2021 or the first quarter of 2022. The redemption price would generally be equal to Alstom's initial investment plus annual accretion of 3% for the grid technology and renewable energy joint ventures and plus annual accretion of 2% for the nuclear and French steam power joint venture, with potential upside sharing based on an EBITDA multiple. Alstom also holds additional redemption rights in other limited circumstances as well as a call option to require GE to sell all of its interests in the renewable energy joint venture at the higher of fair value or Alstom's initial investment plus annual accretion of 3% during the month of May in the years 2017 through 2019 and also upon a decision to IPO the joint venture.

In January 2018, Alstom informed us that they intend to exercise their redemption rights with respect to the grid technology and renewable energy joint ventures in September 2018. The minimum price that GE would be required to pay, pursuant to the agreements, to purchase Alstom’s interest at that time would be a net amount of €1,828 million for the grid technology joint venture and €636 million for the renewable energy joint venture. Alstom has also informed us that they intend to exercise their redemption rights with respect to the global nuclear and French steam power joint venture in the first quarter of 2021.

GE holds a call option on Alstom's interest in the global nuclear and French steam power joint venture at the same amount as Alstom's redemption price in the event that Alstom exercises its put option in the grid technology or renewable energy joint ventures. GE also has call options on Alstom's interest in the three joint ventures in other limited circumstances. In addition, the French Government holds a preferred interest in the global nuclear and French steam power joint venture, giving it certain protective rights.
CHANGES TO REDEEMABLE NONCONTROLLING INTERESTS
 
 
Three months ended March 31
(In millions)
2018

2017

 
 
 
Balance at January 1
$
3,391

$
3,017

Net earnings (loss)
(33
)
(109
)
Dividends
(13
)
(10
)
Redemption value adjustment
65

101

Other
139

47

Balance at March 31(a)
$
3,549

$
3,046


(a)
Included $3,208 million and $2,760 million related to the Alstom joint ventures at March 31, 2018 and 2017, respectively.

OTHER

Common dividends from GE Capital to GE were zero and $2,000 million in the three months ended March 31, 2018 and 2017, respectively.