RESULTS.As discussed in the Segment Operations section within ~~the~~ MD&A, certain amounts are not included in industrial ~~operating~~ segment results because they are excluded from measurement of their operating performance for internal and external purposes. ~~The amount of~~These costs relate primarily to goodwill impairment charges, restructuring and ~~gains (losses) not included in segment results follows.~~acquisition and disposition activities.



	Costs						Gains (Losses)
(In billions)	2019		2018		2017		2019		2018			2017

Power	$	0.4	$	20.5	$	2.0	$	—	$	1.0		$	1.9
Renewable Energy	1.7		3.3		0.3		—		—			—
Aviation	—		—		0.1		—		(0.1		)	(0.3		)
Healthcare	0.2		0.2		0.3		—		0.8			—
Total segments	$	2.2	$	24.0	$	2.7	$	—	$	1.7		$	1.6
Corporate Items and Eliminations	0.6		1.1		1.5		0.8		(0.3		)	(0.7		)
Total Industrial	$	2.8	$	25.1	$	4.2	$	0.8	$	1.4		$	0.9

COSTS

(In billions) 2016 2015 2014

Power $ 1.2 $ 0.3 $ 0.5
Renewable Energy 0.3 0.2 0.1
Oil & Gas 0.8 0.5 0.3
Aviation 0.1 - 0.3
Healthcare 0.5 0.3 0.5
Transportation 0.2 0.1 -
Energy Connections & Lighting 0.6 0.3 0.3
Total $ 3.7 $ 1.7 $ 2.1

GAINS (LOSSES)

(In billions) 2016 2015 2014

Power $ - $ - $ -
Renewable Energy - - -
Oil & Gas - - 0.1
Aviation (0.2) (a) - -
Healthcare - 0.1 (c) -
Transportation - 0.6 (d) -
Energy Connections & Lighting 3.1 (b) 0.1 (e) -
Total $ 3.0 $ 0.9 $ 0.1

*Non-GAAP Financial Measure

GE2019 FORM 10-K 21

~~(a)~~
	~~Largely due to impairment related to a potential sale of a non-strategic platform in our Aviation business.~~
MD&A	OTHER CONSOLIDATED INFORMATION

~~(b)~~

~~Related to the sale of our Appliances business in the second quarter of 2016.~~

~~(c)~~

~~Related to the Clarient business disposition in 2015.~~

~~(d)~~

~~Related to the Signaling business disposition in 2015.~~

~~(e)~~

~~Related to the Intelligent Platforms Embedded Systems Products business disposition in 2015.~~

~~GE 2016 FORM 10-K 67~~

~~DISCONTINUED OPERATIONS~~

Discontinued operations primarily relate to our financial services businesses as a result of the GE Capital Exit Plan and include our Consumer business, most of our CLL business, our Real Estate business and U.S. mortgage business (WMC). All of these operations were previously reported in the Capital segment.

We have entered into Transitional Service Agreements (TSA) with and provided certain indemnifications to buyers of GE Capital's assets. Under the TSAs, GE Capital provides various services for terms generally between 12 and 24 months and receives a level of cost reimbursement from the buyers.

At ~~December 31, 2016~~, we provided specific indemnifications to buyers of GE Capital's assets that amounted to $2.6 billion, for which we have recognized related liabilities of $0.3 billion. In addition, in connection with the 2015 public offering and sale of Synchrony Financial, GE Capital indemnified Synchrony Financial and its directors, officers, and employees against the liabilities of GECC's businesses other than historical liabilities of the businesses that are part of Synchrony Financial's ongoing operations.

As part of the GE Capital Exit Plan, we entered into hedges (on an after-tax basis) of our net investment in businesses that we plan to dispose. These derivatives are treated as standalone hedges and the mark-to-market valuation changes on the derivatives are recorded in earnings of discontinued operations.

~~Results of operations, financial position and cash flows for these businesses are separately reported as discontinued operations for all periods presented.~~

FINANCIAL INFORMATION FOR DISCONTINUED OPERATIONS

(In millions) 2016 2015 2014

Earnings (loss) from discontinued operations, net of taxes $ (954) $ (7,495) $ 5,855

~~The 2016 loss from discontinued operations, net of taxes, primarily reflected the following:~~

·	~~$1.1 billion after-tax loss at our CLL business (including $0.9 billion after-tax loss on planned disposals), and~~

·	~~$0.1 billion after-tax loss at our Consumer business (including $0.3 billion after-tax loss on planned disposals).~~

·	~~2016 losses were partially offset by a $0.2 billion tax benefit related to an IRS tax settlement in our discontinued insurance operations.~~

~~The 2015 loss from discontinued operations, net of taxes, primarily reflected the following:~~

·	~~$7.9 billion after-tax loss at our CLL business (including $8.7 billion after-tax loss on planned disposals),~~

·	~~$2.0 billion after-tax loss at our Real Estate business (including $2.0 billion after-tax loss on planned disposals), and~~

·	~~$0.1 billion after-tax effect of incremental reserves related to retained representation and warranty obligations to repurchase previously sold loans on the 2007 sale of WMC.~~

2015 losses were partially offset by $2.5 billion after-tax earnings at our Consumer business, primarily $3.4 billion after-tax gain on the split-off of Synchrony Financial, $0.5 billion after-tax gain on other transactions closed, partially offset by $0.8 billion after-tax loss on disposals and $0.6 billion after-tax loss from operations.

~~The 2014 earnings from discontinued operations, net of taxes, primarily reflected the following:~~

·	~~$3.2 billion of after-tax earnings from operations at our Consumer business,~~

·	~~$1.8 billion of after-tax earnings from operations at our CLL business,~~

·	~~$1.0 billion of after-tax earnings from operations at our Real Estate business, and~~

·	~~$0.1 billion tax benefit related to the extinguishment of our loss-sharing arrangement for excess interest claims associated with the 2008 sale of GE Money Japan.~~

·	2014 earnings were partially offset by a $0.2 billion after-tax loss on incremental reserves related to retained representation and warranty obligations to repurchase previously sold loans on the 2007 sale of WMC.

~~See Note 2 to the consolidated financial statements for additional information related to discontinued operations.~~

~~GE 2016 FORM 10-K 68~~

OTHER CONSOLIDATED INFORMATION

~~INTEREST AND OTHER FINANCIAL CHARGES~~



INTEREST AND OTHER FINANCIAL CHARGES (In billions)	2019		2018		2017

GE	$	2.1	$	2.4	$	2.5
GE Capital	2.5		3.0		3.1
Consolidated	$	4.2	$	4.8	$	4.7

~~Interest on borrowings~~The decrease in GE interest and other financial charges ~~amounted~~for the year ended December 31, 2019 was driven primarily by lower expenses on sales of GE current and long-term receivables as well as the reversal of $0.1 billion of accrued interest on tax liabilities due to ~~$5.0~~the completion of the 2012-2013 Internal Revenue Service (IRS) audit in June 2019, partially offset by the $0.3 billion ~~$3.5~~loss resulting from the completion of a tender offer to purchase GE senior notes (including fees and other costs associated with the tender). The primary components of GE interest and other financial charges are interest on short- and long-term borrowings and financing costs on sales of receivables. Total GE interest and other financial charges of $1.3 billion and ~~$2.7~~$1.5 billion ~~in 2016, 2015~~were recorded at Corporate and ~~2014, respectively. The majority of our borrowings are in Financial Services, where interest expense was $3.8 billion, $2.3~~$0.8 billion and ~~$1.6~~$0.9 billion were recorded by GE segments for the years ended December 31, 2019 and 2018, respectively.

The decrease in ~~2016, 2015~~GE Capital interest and ~~2014, respectively. Included~~other financial charges for the year ended December 31, 2019 were primarily due to lower average borrowings balances due to maturities and lower net interest on assumed debt resulting from an increase in intercompany loans to GE which bear the right of offset (see the Borrowings section of Capital Resources and Liquidity within MD&A for an explanation of assumed debt and right-of-offset loans), partially offset by an increase in average interest ~~expense were $0.6 billion, $0.2 billion and an insignificant amount of debt extinguishment costs~~rates due to changes in ~~2016, 2015 and 2014, respectively.~~market rates. GE Capital average borrowings were ~~$145.0~~$61.8 billion, ~~$216.8~~$78.7 billion and ~~$266.7~~$103.8 billion in ~~2016, 2015~~2019, 2018 and ~~2014,~~2017, respectively. The GE Capital average composite effective interest rate (including interest allocated to discontinued operations) was ~~3.0%~~4.2%, 3.9% and 3.1% in ~~2016, 2.6% in 2015~~2019, 2018 and 2.6% in 2014. The rate increase from 2015 to 2016 was primarily driven by debt extinguishment costs. Excluding the effect of debt extinguishment costs, the GE Capital average composite effective interest rate (including interest allocated to discontinued operations) was 2.6% in 2016, 2015 and 2014. In 2016, GE Capital average assets continued to decrease in line with the GE Capital Exit Plan. See the Liquidity and Borrowings section within the MD&A for a discussion of liquidity, borrowings and interest rate risk management.2017, respectively.

It is our policy to allocate Capital interest expense that is either directly attributable or related to discontinued operations. The allocation is based on a market based leverage ratio, taking into consideration the underlying characteristics of the assets for the specific discontinued operations. Interest expense that is associated with debt that is not assumed by the buyer or required to be repaid as a result of the disposal transaction is reflected in other continuing operations after the disposal occurs.

POSTRETIREMENT BENEFIT ~~PLANS~~

~~(Dollars in billions)~~

	~~PRINCIPAL PENSION PLANS~~
~~BENEFIT PLANS COST~~	~~DISCOUNT RATES~~ ~~(December 31)~~	~~EXPECTED RATE OF RETURN~~

~~2016 – 2015 COMMENTARY~~

·	Postretirement benefit plans cost decreased $0.9 billion, primarily because of the effects of higher discount rates, lower service cost resulting from fewer active principal pension plans participants and lower loss amortization related to our principal pension plans.

We updated our mortality assumptions at December 31, 2016 based on guidance issued by the Society of Actuaries to reflect updated rates and methodology for future mortality improvements. The new mortality assumptions decreased our principal pension plans obligations by $0.6 billion at year-end 2016.

~~2015 – 2014 COMMENTARY~~

·	Postretirement benefit plans cost increased $0.2 billion, primarily because of the effects of lower discount rates and new mortality assumptions, which were partially offset by lower loss amortization related to our principal pension plans and by changes to principal retiree benefit plans.

·	In 2015, we amended our principal retiree benefit plans affecting post-65 retiree health and retiree life insurance for certain production participants. These plan amendments reduced our principal postretirement benefit obligations by approximately $3.3 billion.

~~GE 2016 FORM 10-K 69~~

~~Looking forward, our key assumptions affecting 2017 postretirement benefits costs are as follows:~~

·	~~Discount rate at 4.11% for our principal pension plans, reflecting current long-term interest rates.~~

·	~~Assumed long-term return on our principal pension plan assets of 7.5%.~~

~~We expect 2017 postretirement benefit plans cost to be about the same as 2016.~~

~~PENSION COSTS~~

GAAP AND NON-GAAP PENSION COSTS

(In billions) 2016 2015 2014

GAAP principal pension plans' cost $ 3.6 $ 4.5 $ 3.6
Non-GAAP operating pension cost* 1.6 1.7 1.5

Our operating pension cost for our principal pension plans includes only those components that relate to benefits earned by active employees during the period (service cost, prior service cost amortization and curtailment loss). Non-operating pension cost elements such as interest cost, expected return on plan assets and non-cash amortization of actuarial gains and losses are excluded from this measure. We expect operating pension cost to be approximately $1.4 billion in 2017.

~~FUNDED STATUS OF PLANS~~

~~The table below presents the funded status of our benefit plans. The funded status represents the fair value of plan assets less benefit obligations.~~

FUNDED STATUS

(In billions) 2016 2015

GE Pension Plan $ (19.1) $ (16.9)
GE Supplementary Pension Plan (6.5) (6.1)
Other pension plans (5.5) (4.3)
Principal retiree benefit plans (5.7) (6.1)

~~2016 – 2015 COMMENTARY~~

·	The GE Pension Plan deficit increased in 2016 primarily due to the growth in pension liabilities and lower discount rates, partially offset by investment performance and changes in mortality assumptions.

·	The increase in the underfunding of our other pension plans was primarily attributable to lower discount rates and liability growth, partially offset by investment performance and employer contributions.

·	The decrease in principal retiree benefit plans deficit was primarily attributable to employer contributions and lower costs from new healthcare supplier contracts, partially offset by the growth in retiree benefit liabilities.

PLANS.The Employee Retirement Income Security Act (ERISA) determines minimum pension funding requirements in the U.S. We made ~~a $0.3~~$6.0 billion ~~contribution~~in contributions to the GE Pension Plan in ~~2016. We did not contribute to the GE Pension Plan in 2015.~~2018. On an ERISA basis, our preliminary estimate is that the GE Pension Plan was approximately ~~95%~~93% funded at January 1, ~~2017.~~2020. The ERISA funded status is higher than the GAAP funded status ~~(71%~~(81% funded) primarily because the ERISA prescribed interest rate is calculated using an average interest rate. As a result, the ERISA interest rate is higher than the year-end GAAP discount rate. The higher ERISA interest rate lowers pension liabilities for ERISA funding purposes. Our ~~current estimate projects $1.7~~2018 contributions satisfied our minimum ERISA funding requirement of $1.5 billion ~~of pension~~and the remaining $4.5 billion was a voluntary contribution to the plan. This voluntary contribution is sufficient to satisfy our minimum ERISA funding ~~contributions~~requirement for 2019 and 2020. In October 2019, we announced our intent to contribute approximately $4 to $5 billion to the GE Pension Plan in ~~2017 and~~2020. We expect this amount to equal our estimated future minimum ERISA funding requirements at least through 2022.

We expect 2020 postretirement benefit plans cost to be about $3.2 billion, which is a decrease of approximately ~~$1.6~~$0.6 billion ~~in 2018.~~from 2019.

*~~Non-GAAP Financial Measure~~

~~GE 2016 FORM 10-K 70~~

We expect to contribute ~~$0.9~~in 2020 approximately $0.5 billion and $0.4 billion to our other pension plans ~~in 2017, as compared to $0.8 billion in 2016~~ and $0.5 billion in 2015. GE Capital is a member of certain GE pension plans. As a result of the GE Capital Exit Plan, GE Capital will have additional funding obligations for these pension plans. These obligations do not relate to the Verticals and are recognized as an expense in GE Capital's other continuing operations when they become probable and estimable. See the Intercompany Transactions between GE and GE Capital section within the MD&A for further information.

~~We also expect to contribute $0.5 billion to our~~ principal retiree benefit plans, ~~in 2017 as compared to $0.4 billion in 2016 and $0.5 billion in 2015.~~respectively.

The funded status of our postretirement benefit plans and future effects on operating results depend on economic conditions, interest rates and investment performance. See the Critical Accounting Estimates section within ~~the~~ MD&A and ~~Notes 12 and 29~~Note 13 to the consolidated financial statements for further information about our benefit plans, pension actions and the effects of this activity on our financial statements.

INCOME TAXES



CONSOLIDATED (Dollars in billions)	2019			2018			2017

Effective tax rate (ETR)	63.2		%	(0.4		)%	24.8		%
Provision (benefit) for income taxes	$	0.7		$	0.1		$	(2.8	)
Cash income taxes paid(a)	2.2			1.9			2.4

(a) Included taxes paid related to discontinued operations.

For the year endedDecember 31, 2019, the consolidated income tax provision was $0.7 billion. The increase in the tax provision for 2019 was primarily due to tax expense associated with the preparatory internal restructuring for the planned BioPharma sale and the effect of higher pre-tax income excluding non-deductible impairment charges, partially offset by the benefit from the completion of the IRS audit of the 2012-2013 consolidated U.S. income tax returns.

In June 2019, the IRS completed the audit of our consolidated U.S. income tax returns for 2012-2013, which resulted in a decrease in our balance of unrecognized tax benefits (i.e., the aggregate tax effect of differences between tax return positions and the benefits recognized in our financial statements). The Company recognized a resulting non-cash continuing operations tax benefit of $0.4 billion plus an additional net interest benefit of $0.1 billion. Of these amounts, GE ~~pays the income taxes it owes in every country in which it does business. While GE~~recorded $0.4 billion of tax benefits and $0.1 billion of net interest benefits, and GE Capital ~~file~~recorded insignificant amounts of tax and net interest benefits. GE Capital also recorded a non-cash benefit in discontinued operations of $0.3 billion of tax benefits and an insignificant amount of net interest benefits. See Notes 2 and 15 to the consolidated ~~U.S. federal~~financial statements for further information.

GE2019 FORM 10-K 22



MD&A	OTHER CONSOLIDATED INFORMATION

For the year ended December 31, 2018, the consolidated income tax return, many factors impact our income tax expense and cash tax payments. The most significant factor is that we conduct business in approximately 180 countries and more than half of our revenue is earned outside the U.S., often in countries with lower tax rates than in the U.S. We reinvest most of our foreign earnings overseas to be able to fund our active non-U.S. business operations. Our tax liability is also affected by U.S. and foreign tax incentives designed to encourage certain investments, like research and development; and by acquisitions, dispositions and tax law changes. Finally, our tax returns are routinely audited, and settlements of issues raised in these audits sometimes affect our tax rates.

GE and GE Capital file a consolidated U.S. federal income tax return. This enables GE and GE Capital to use tax deductions and credits of one member of the group to reduce the tax that otherwise would have been payable by another member of the group.provision was $0.1 billion. The effective tax rate ~~reflects the benefit of these~~was negative for 2018 reflecting a tax ~~reductions~~expense on a consolidated pre-tax loss. The increase in the consolidated ~~return. GE makes cash payments~~provision for income taxes for 2018 was primarily attributable to ~~GE Capital~~the decrease in benefit from global operations including an increase in valuation allowances on non-U.S. deferred tax assets and the decrease in pre-tax loss (excluding non-deductible goodwill impairments) with a tax benefit above the average tax rate. Partially offsetting this increase was the decrease in the consolidated provision for income taxes attributable to an insignificant charge in 2018 to adjust the provisional estimate of the impact of the 2017 enactment of U.S. tax ~~reductions and GE Capital pays~~reform compared to the $4.5 billion charge in 2017 for ~~tax increases at~~ the ~~time GE's tax payments are due.~~estimated impact of enactment.

~~CONSOLIDATED~~

~~(Dollars in billions)~~

~~EFFECTIVE TAX RATE (ETR)~~		~~PROVISION (BENEFIT) FOR INCOME TAXES~~		~~CASH INCOME TAXES PAID(a)~~

~~(a)~~

~~Includes taxes paid related to discontinued operations.~~

~~GE 2016 FORM 10-K 71~~

~~2016 – 2015 COMMENTARY~~

The consolidated income tax rate for 2016 was (5.1)%. The effective tax rate was negative largely because of increased tax benefits from global operations including benefits from the repatriation of GE non-U.S. earnings, benefits of integrating our existing services business with Alstom's services business and foreign tax credit planning at GE Capital to reduce the tax cost of anticipated repatriations of foreign cash.

·	The decrease in the consolidated provision for income tax was attributable to the increased benefit from global operations and the non-repeat of the 2015 charges associated with the GE Capital Exit Plan.

·	As discussed in Note 14 to the consolidated financial statements, in 2015 in conjunction with the GE Capital Exit Plan, we incurred tax expense of $6.3 billion related to expected repatriation of foreign earnings and write-off of deferred tax assets.

·	~~The consolidated tax provision includes $1.5 billion and $1.0 billion for GE (excluding GE Capital) for 2015 and 2016, respectively.~~

~~2015 – 2014 COMMENTARY~~

·	~~The consolidated income tax rate for 2015 was greater than 35% due to charges associated with the GE Capital Exit Plan.~~

·	~~The increase in the income tax expense is primarily due to the tax expense incurred as part of the GE Capital Exit Plan.~~

·	~~The consolidated tax provision includes $1.6 billion and $1.5 billion for GE (excluding GE Capital) for 2014 and 2015, respectively.~~

~~BENEFITS FROM GLOBAL OPERATIONS~~

Absent the effects of ~~the GE Capital Exit Plan,~~U.S. tax reform and non-U.S. losses without a tax benefit, our consolidated income tax provision is ~~lower~~generally reduced because of the benefits of lower-taxed global operations. ~~There~~The benefit from non-U.S. rates below the U.S. statutory rate was significant prior to the decrease in the U.S. statutory rate to 21% beginning in 2018. While reduced, there is still generally a benefit ~~from global operations~~ as certain non-U.S. income is subject to local country tax rates that are ~~significantly~~ below the ~~35%~~new U.S. statutory tax rate. These non-U.S. earnings have been indefinitely reinvested outside the U.S. and are not subject to current U.S. income tax. Most of these earnings have been reinvested in active non-U.S. business operations and we do not intend to repatriate these earnings to fund U.S. operations.

The rate of tax on our ~~indefinitely reinvested~~profitable non-U.S. earnings is below the ~~35%~~ U.S. statutory tax rate because we have significant business operations subject to tax in countries where the tax on that income is lower than the U.S. statutory rate and because GE funds certain non-U.S. operations through foreign companies that are subject to low foreign taxes. Most of these earnings have been reinvested in active non-U.S. business operations and as of December 31, 2019, we have not decided to repatriate these earnings to the U.S. Given U.S. tax reform, substantially all of our prior unrepatriated earnings were subject to U.S. tax and accordingly we expect to have the ability to repatriate available non-U.S. cash without additional U.S. federal tax cost and any foreign withholding taxes on a repatriation to the U.S. would potentially be partially offset by a U.S. foreign tax credit.

A substantial portion of the benefit for lower-taxed non-U.S. earnings related to business operations subject to tax in countries where the tax on that income is lower than the U.S. statutory rate is derived from our GECAS aircraft leasing operations located in Ireland where the earnings are taxed at 12.5%, from our Power operations located in Switzerland where the earnings are taxed at between 9% and ~~Hungary,~~18.6%, and our Healthcare operations in ~~Europe.~~Europe where tax deductions are allowed for certain intangible assets and earnings are taxed below the historic U.S. statutory rate.

~~We expect our ability to~~The rate of tax on non-U.S. operations is increased, however, because we also incur losses in foreign jurisdictions where it is not likely that the losses can be utilized and no tax benefit ~~from non-U.S. income taxed at less than~~is provided for those losses and valuation allowances against loss carryforwards are provided when it is no longer likely that the losses can be utilized. In addition, as part of U.S. tax reform, the U.S. ~~rate~~has enacted a tax on “base eroding” payments from the U.S. We are continuing to ~~continue, subject~~undertake restructuring actions to ~~changes in~~mitigate the impact from this provision. The U.S. orhas also enacted a minimum tax on foreign ~~law. In addition, since this benefit depends on management's intention to indefinitely reinvest amounts~~earnings (global intangible low tax income). Because we have tangible assets outside the U.S., and pay significant foreign taxes, we generally do not expect a significant increase in tax liability from this new U.S. minimum tax. Overall, these newly enacted provisions increase the rate of tax on our non-U.S. operations.



BENEFIT/(EXPENSE) FROM GLOBAL OPERATIONS (In billions)	2019			2018			2017

Benefit/(expense) of foreign tax rate difference on non-U.S. earnings	$	—		$	(0.3	)	$	0.5
Benefit of audit resolutions	0.1			0.2			—
Other	(1.1		)	(0.9		)	2.9
Total benefit/(expense)	$	(1.0	)	$	(1.0	)	$	3.4

The amounts reported above exclude the impact of U.S. tax ~~provision will increase~~reform which is reported as a separate line in the reconciliation of the U.S. federal statutory income tax rate to the ~~extent we no longer indefinitely reinvest foreign earnings~~.actual tax rate in Note 15 to the consolidated financial statements.

BENEFITS FROM LOWER-TAXED GLOBAL OPERATIONS

(In billions) 2016 2015 2014

Benefit of lower foreign tax rate on indefinitely reinvested non-U.S. earnings $ 0.9 $ 1.1 $ 1.2
GE Capital Exit Plan - (6.1) -
Benefit of audit resolutions 0.1 0.2 0.1
Other 1.1 0.4 0.5
Total $ 2.1 $ (4.4) $ 1.8

~~2016 – 2015 COMMENTARY~~

~~Our benefit~~For the year ended December 31, 2019, the increase in expense from ~~lower-taxed~~ global operations increased in 2016 because of the non-repeat of the 2015 tax expense associated with the GE Capital Exit Plan and because of benefits from the repatriation of GE non-U.S. earnings, benefits of integrating our existing services business with Alstom's services business and foreign tax credit planning at GE Capital to reduce the tax cost of anticipated repatriations of foreign cash, all of which are included in "other" in the table above.

~~GE 2016 FORM 10-K 72~~

~~2015 – 2014 COMMENTARY~~

~~Our benefits from lower-taxed global operations decreased in 2015 because of~~reflects the tax expense associated with the ~~GE Capital Exit Plan.~~

~~OTHER INFORMATION~~

Topreparatory internal restructuring for the ~~extent~~planned BioPharma sale and an increase in valuation allowances on non-U.S. operating income increases, we would expect tax benefits to increase, subject to management's intention to indefinitely reinvest those earnings. Included in 2015 is a tax expense of $6.1 billion related to the expected repatriation of foreign earnings and write-off of deferred tax assets offset by a benefit from change in ~~conjunction with the GE Capital Exit Plan.~~

~~The~~foreign rate and by a tax benefit from ~~non-U.S. income taxed at a local country rate rather than~~additional guidance on provisions enacted as part of U.S. tax reform.

For the year ended December 31, 2018, the decrease in benefit from lower-taxed global operations reflects the lower U.S. statutory tax rate ~~is reported~~and losses without tax benefit. The decrease in other benefits reflects increases in incremental valuation allowances on non-U.S. deferred tax assets and for 2018 newly enacted taxes on non-U.S. earnings and the ~~caption "Tax on global activities including exports" in the effective tax rate reconciliation in Note 14 to the consolidated financial statements.~~nonrecurrence of 2017 benefits associated with repatriation of foreign earnings.

A more detailed analysis of differences between the U.S. federal statutory rate and the consolidated effective rate, as well as other information about our income tax provisions, is provided in the Critical Accounting Estimates section within ~~the~~ MD&A and Note 1415 to the consolidated financial statements. The nature of business activities and associated income taxes differ for GE and for GE Capital; therefore, a separate analysis of each is presented in the paragraphs that follow.

GE ~~EFFECTIVE TAX RATE (EXCLUDING GE CAPITAL EARNINGS)~~2019 FORM 10-K 23

~~(Dollars in billions)~~

We believe that the GE effective tax rate and provision for income taxes are best analyzed in relation to GE earnings before income taxes excluding the GE Capital net earnings from continuing operations, as GE tax expense does not include taxes on GE Capital earnings. For further information on this calculation, see the Supplemental Information section within the MD&A.

GE ETR, EXCLUDING GE CAPITAL EARNINGS*				~~GE PROVISION FOR INCOME TAXES~~

~~2016 – 2015 COMMENTARY~~

·MD&A

The GE provision for income taxes decreased in 2016 because of increased benefits from lower-taxed global operations ($0.3 billion), including benefits from the repatriation of GE non-U.S. earnings and benefits of integrating our existing services business with Alstom's services business.OTHER CONSOLIDATED INFORMATION

·	~~The GE provision for income taxes also decreased due to increases in the benefit from deductible stock losses ($0.4 billion).~~

·	~~Partially offsetting these decreases was a lower benefit of audit resolutions ($0.1 billion) shown below.~~

~~2015 – 2014 COMMENTARY~~

·	The GE provision for income taxes decreased in 2015 because of increased benefits from lower-taxed global operations ($0.2 billion), including benefits from integrating our existing services business with Alstom's services business.

·	~~The GE provision for income taxes also decreased due to increases in the benefit of audit resolutions ($0.2 billion) shown below and deductible stock losses ($0.2 billion).~~

·	~~Partially offsetting these decreases was an increase in income taxed at rates above the average tax rate ($0.5 billion).~~

~~GE 2016 FORM 10-K 73~~

~~Resolution of audit matters reduced~~



GE EFFECTIVE TAX RATE (EXCLUDING GE CAPITAL EARNINGS) (Dollars in billions)	2019			2018			2017

GE ETR, excluding GE Capital earnings*	72.7		%	(2.3		)%	271.0		%
GE provision for income taxes	$	1.3		$	0.5		$	3.5

For the year ended December 31, 2019, the GE provision for income taxes ~~by $0.2 billion, $0.3 billion and $0.1 billion in 2016, 2015 and 2014, respectively. The effects of such resolutions are included in the following captions in Note 14~~increased compared to ~~the consolidated financial statements.~~

AUDIT RESOLUTIONS - EFFECT ON GE TAX RATE, EXCLUDING GE CAPITAL EARNINGS

2016 2015 2014

Tax on global activities including exports (1.4) % (1.5) % (0.2) %
U.S. business credits - (0.5) -
All other - net (0.4) (0.3) (0.7)
Total (1.8) % (2.3) % (0.9) %

~~GE CAPITAL EFFECTIVE TAX RATE~~

~~(Dollars in billions)~~

~~GE CAPITAL ETR~~				~~GE CAPITAL PROVISION (BENEFIT) FOR~~ ~~INCOME TAXES~~

~~2016 – 2015 COMMENTARY~~

·	The decrease in the income tax expense for GE Capital from an expense of $5.0 billion to a benefit of $1.4 billion is primarily due to the non-recurrence of the $6.3 billion tax expense, discussed in Note 14 to the consolidated financial statements, related to the GE Capital Exit Plan.

·	The GE Capital tax expense also decreased in 2016 due to higher benefits from global operations including foreign tax credit planning to reduce the tax cost of anticipated repatriations of foreign cash.

~~2015 – 2014 COMMENTARY~~

·	The increase in the income tax expense from a benefit of $0.9 billion for 2014 to an expense of $5.0 billion for 2015 is primarily due to the tax expense, discussed in Note 14 to the consolidated financial statements, related to the GE Capital Exit Plan.

~~GEOGRAPHIC DATA~~

Our global activities span all geographic regions and primarily encompass manufacturing for local and export markets, import and sale of products produced in other regions, leasing of aircraft, sourcing for our plants domiciled in other global regions and provision of financial services within these regional economies. Thus, when countries or regions experience currency and/or economic stress, we often have increased exposure to certain risks, but also often have new opportunities that include, among other things, expansion of industrial activities through purchases of companies or assets at reduced prices and lower U.S. debt financing costs.

Financial results of our non-U.S. activities reported in U.S. dollars are affected by currency exchange. We use a number of techniques to manage the effects of currency exchange, including selective borrowings in local currencies and selective hedging of significant cross-currency transactions. Such principal currencies are the euro, the pound sterling, the Brazilian real and the Chinese renminbi.

~~GE 2016 FORM 10-K 74~~

~~REVENUES~~

~~Revenues are classified according to the region to which products and services are sold. For purposes of this analysis, the U.S. is presented separately from the remainder of the Americas.~~

GEOGRAPHIC REVENUES
V%
(Dollars in billions) 2016 2015 2014 2016-2015 2015-2014

U.S. $ 53.3 $ 53.2 $ 51.1 -% 4 %
Non-U.S.
   Europe 21.6 16.8 18.4
   Asia 20.4 19.3 20.2
   Americas 10.5 12.0 11.8
   Middle East and Africa 17.8 16.0 15.6
   Total Non-U.S. 70.4 64.1 66.0 10 % (3)%
Total $ 123.7 $ 117.4 $ 117.2 5 % -%

Non-U.S. Revenues as a % of Consolidated Revenues 57% 55% 56%

~~NON-U.S. REVENUES AND EARNINGS~~

~~The increase in non-US. revenues in 2016 was~~2018 primarily due to ~~increases~~tax expense associated with the preparatory internal restructuring for the planned BioPharma sale and the effect of ~~32% in Europe (primarily due to Alstom), 12% in Middle East, North Africa and Turkey (MENAT) and 35% in India,~~higher pre-tax income excluding non-deductible impairment charges, partially offset by ~~a decrease of 10% in Latin America.~~

The decrease in non-U.S. revenues in 2015 was primarily due to decreases in growth markets of 11% in Canada and 29% in Australia & New Zealand (ANZ), partially offset by an increase of 2% in Middle East, North Africa and Turkey (MENAT) and 1% in China.

~~The effects of currency fluctuations on reported results were as follows:~~

·	~~Decreased revenues by $1.3 billion in 2016, primarily driven by the Brazilian real ($0.2 billion), pound sterling ($0.2 billion), euro ($0.1 billion) and the Chinese renminbi ($0.1 billion).~~

·	~~Decreased revenues by $4.9 billion in 2015, primarily driven by the euro ($2.6 billion), the Brazilian real ($0.9 billion) and the Canadian dollar ($0.2 billion).~~

~~The effects of foreign currency fluctuations decreased earnings by $0.3 billion in 2016. The effects of foreign currency fluctuations decreased earnings in 2015 by $0.7 billion.~~

~~ASSETS~~

~~We classify certain assets that cannot meaningfully be associated with specific geographic areas as "Other Global" for this purpose.~~

TOTAL ASSETS (CONTINUING OPERATIONS)

December 31 (In billions) 2016 2015

U.S. $ 179.0 $ 176.7
Non-U.S.
   Europe 110.8 141.9
   Asia 24.0 22.0
   Americas 20.6 17.5
   Other Global 15.8 14.0
Total Non-U.S. 171.4 195.4
Total $ 350.4 $ 372.1

~~The decrease in total assets of non-U.S. operations on a continuing basis reflected a decrease primarily in Europe driven by~~ the ~~strengthening~~benefit from the completion of the ~~U.S. dollar against the euro and pound sterling, coupled with a decrease in time deposits in line with debt maturities at GE Capital.~~

~~GE 2016 FORM 10-K 75~~

~~FOREIGN CURRENCY EXPOSURE~~

~~As a result of our global operations, we generate and incur a significant portion of our revenues and expenses in currencies other than the U.S. dollar.~~ ~~Such principal currencies are the euro, the pound sterling, the Brazilian real and the Chinese renminbi.~~ ~~The results of operating entities reported in currencies other than U.S. dollar are translated to the U.S. dollar at the applicable exchange rate for inclusion in the financial statements.~~ ~~We use a number of techniques to manage the effects of currency exchange, including selective borrowings in local currencies and selective hedging of significant cross-currency transactions.~~ ~~The foreign currency effect arising from operating activities outside~~IRS audit of the 2012-2013 consolidated U.S., including the remeasurement of derivatives, can result in significant transactional foreign currency fluctuations at points in time, but will generally be offset as the underlying hedged item is recognized in earnings. The effects of foreign currency fluctuations, excluding the earnings impact of the underlying hedged item, decreased net earnings for income tax returns.

For the year ended December 31, ~~2016~~2018, the GE provision for income taxes decreased compared to 2017 because of the nonrecurrence of the $4.9 billion charge for the provisional charge associated with the enactment of U.S. tax reform. Excluding the 2017 charge associated with U.S. tax reform, the GE tax provision increased by ~~$0.3~~$1.9 billion. The increase was primarily due to the decrease in benefit from global operations including an increase in valuation allowances on non-U.S. deferred tax assets partially offset by the effect of lower pretax income excluding non-deductible impairment charges.

~~On June 23, 2016, a referendum~~



GE CAPITAL EFFECTIVE TAX RATE (Dollars in billions)	2019			2018			2017

GE Capital ETR	89.3		%	99.7		%	49.9		%
GE Capital provision (benefit) for income taxes	$	(0.6	)	$	(0.4	)	$	(6.3	)

For the year ended December 31, 2019,the increase in the ~~United Kingdom (U.K.) was approved to withdraw~~tax benefit at GE Capital from ~~the European Union. The referendum was advisory and the terms~~a benefit of ~~any withdrawal are subject~~$0.4 billion in 2018 to a ~~negotiation period that could last for two years after~~benefit of $0.6 billion in 2019 is primarily due to a benefit from additional guidance on the ~~U.K. government initiates~~transition tax on historic foreign earnings enacted as part of U.S. tax reform, compared to a charge associated with the ~~withdrawal process. The approval~~enactment of U.S. tax reform during 2018.

For the year ended December 31, 2018, the decrease in the tax benefit at GE Capital from a benefit of $6.3 billion in 2017 to a benefit of $0.4 billion in 2018 is primarily due to the decrease in the pre-tax loss with a tax benefit above the average tax rate including the nonrecurrence of the ~~referendum had,~~one-time charge to revalue insurance reserves.

RESEARCH AND DEVELOPMENT.We conduct research and ~~may continue~~development (R&D) activities to ~~have,~~continually enhance our existing products and services, develop new products and services to meet our customers’ changing needs and requirements, and address new market opportunities. R&D expenses are classified in cost of goods and services sold in our consolidated Statement of Earnings (Loss). In addition, R&D funding from customers, principally the U.S. government, is recorded as an ~~impact on foreign currency exchange rates, among other things. We actively manage~~offset to such costs.



	GE funded						Customer and Partner funded(b)						Total R&D
(In millions)	2019		2018		2017		2019		2018		2017		2019		2018		2017

Power	$	310	$	407	$	641	$	16	$	7	$	35	$	327	$	414	$	676
Renewable Energy	522		413		448		9		11		3		531		424		451
Aviation	906		950		907		911		564		586		1,817		1,514		1,492
Healthcare	994		968		908		25		23		26		1,019		991		934
Corporate(a)	382		675		1,271		89		48		65		471		722		1,336
Total	$	3,115	$	3,414	$	4,175	$	1,049	$	652	$	715	$	4,164	$	4,065	$	4,890

(a) Includes Global Research Center and Digital.

(b) Customer funded is principally U.S. Government funded in our ~~exposure~~Aviation segment. R&D funded through consolidated partnerships was immaterial for all periods presented.

DISCONTINUED OPERATIONS.Discontinued operations primarily include our Baker Hughes and Transportation segments, our mortgage portfolio in Poland, residual assets and liabilities related to our exited U.S. mortgage business (WMC), as discussed in Notes 2 and 23 to the ~~U.K.~~consolidated financial statements, and ~~do not anticipate~~trailing liabilities associated with the sale of our GE Capital businesses.

In September 2019, we sold a ~~material economic impact~~total of 144.1 million shares in Baker Hughes for $3.0 billion in cash (net of certain deal related costs) which reduced our ownership interest from 50.2% to 36.8%. As a result, we have deconsolidated our ~~currency exposure~~Baker Hughes segment and reclassified its results to discontinued operations for all periods presented. In addition, as disclosed in prior filings, including our 2018 Form 10-K, we expected to record a significant loss upon deconsolidation. In 2019, we recorded a loss of $8.7 billion ($8.2 billion after-tax) in discontinued operations.

In February 2019, as a result of the ~~recent decision~~spin-off and subsequent merger of our Transportation business with Wabtec, we reclassified our Transportation segment to discontinued operations for all periods presented. In the first quarter of 2019, we recorded a gain of $3.5 billion ($2.5 billion after-tax) in discontinued operations. See Notes 2 and 3 to the consolidated financial statements for further information.

*Non-GAAP Financial Measure

GE2019 FORM 10-K 24



MD&A	OTHER CONSOLIDATED INFORMATION

In June 2019, GE Capital recorded $0.3 billion of tax benefits and an insignificant amount of net interest benefits due to a decrease in our balance of unrecognized tax benefits. See the Consolidated Income Tax section above and Note 15 to the consolidated financial statements for further information.

In January 2019, we announced an agreement in principle with the United States to settle the investigation by the ~~U.K.~~U.S. Department of Justice (DOJ) regarding potential violations of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) by WMC and GE Capital, and in April 2019, the parties entered into a definitive settlement agreement. Under the agreement, which concludes this investigation, GE, without admitting liability or wrongdoing, paid the United States a civil penalty of $1.5 billion. See Note 23 to ~~exit~~ the ~~European Union.~~consolidated financial statements for further information.

The mortgage portfolio in Poland (Bank BPH) comprises floating rate residential mortgages, with approximately 86% of the portfolio indexed to or denominated in foreign currencies (primarily Swiss francs) and the remaining 14% denominated in the local currency in Poland. At December 31, 2019, the total portfolio had a carrying value of $2.5 billion with a 1.4% 90-day delinquency rate and an average loan to value ratio of approximately 65%. The portfolio is recorded at fair value less cost to sell and includes a $0.3 billion impairment, which reflects our best estimate of the effects of potential legislative relief to borrowers and of ongoing litigation in Poland related to foreign currency-denominated mortgages. Future adverse developments in the potential for legislative relief or in litigation across the Polish banking industry could result in further impairment or other losses related to these loans in future reporting periods. See Note 23 to the consolidated financial statements for further information.



FINANCIAL INFORMATION FOR DISCONTINUED OPERATIONS (In billions)	2019			2018			2017

Earnings (loss) of discontinued operations, net of taxes	$	0.3		$	(1.4	)	$	(0.4	)
Gain (loss) on disposal, net of taxes	(5.7		)	—			0.1
Earnings (loss) from discontinued operations, net of taxes	$	(5.3	)	$	(1.4	)	$	(0.3	)

See ~~Notes 20 and 29~~Note 2 to the consolidated financial statements for further information ~~about~~for our ~~risk exposures,~~businesses in discontinued operations.

CAPITAL RESOURCES AND LIQUIDITY

FINANCIAL POLICY.We intend to maintain a disciplined financial policy, targeting a sustainable long-term credit rating in the Single-A range with a GE Industrial net debt*-to-EBITDA ratio of less than 2.5x and a dividend in line with our ~~use of derivatives, and the effects of this activity on our financial statements.~~

peers over time, as well as a less than 4-to-1 debt-to-equity ratio for GE ~~2016 FORM 10-K 76~~

~~STATEMENT OF FINANCIAL POSITION~~

~~Because~~Capital. Both GE and GE Capital ~~share certain significant elements~~are on track to meet their respective leverage goals in 2020. In addition to net debt*-to-EBITDA, we also evaluate other measures, including gross debt-to-EBITDA, and we will ultimately size our deleveraging actions across a range of ~~their Statements of Financial Position,~~measures to ensure we are operating the ~~following discussion addresses significant captions in the consolidated statement. Within the following discussions, however, we distinguish between GE~~Company based on a strong balance sheet. We will evaluate additional potential actions based on deleveraging impact, economics, risk mitigation and ~~GE Capital activities in order to permit meaningful analysis of each individual consolidating statement.~~target capital structure while also monitoring key risks.

~~MAJOR CHANGES IN OUR FINANCIAL POSITION DURING 2016~~

~~Cash and equivalents decreased $22.4 billion~~. GE Cash and equivalents increased $0.2 billion due to continuing cash flows from operating activities of $30.0 billion (including common dividends from GE Capital of $20.1 billion), proceeds from the sale of our Appliances business of $4.8 billion and a short-term loan from GE Capital of $1.3 billion. This is partially offset by treasury stock net purchases of $21.4 billion (cash basis), including $11.4 billion paid under ASR agreements, common dividends of $8.5 billion, net PP&E additions of $2.7 billion, business acquisitions of $2.3 billion and software spend of $0.7 billion. GE Capital Cash and equivalents decreased $22.5 billion primarily driven by $58.8 billion net repayments of debt, $20.4 billion in payments of dividends to shareowners and a short-term loan to GE of $1.3 billion, partially offset by $59.9 billion in proceeds from business dispositions and $0.8 billion in proceeds from the sale of receivables originated in our Appliances business and sold to Haier. See the Statement of Cash Flows section of MD&A for additional information.

·	~~Investment securities increased $12.3 billion,~~ ~~primarily driven by investing excess cash in longer term investments to achieve higher yield at GE Capital. See Note 3 to the consolidated financial statements for additional information.~~

·	~~All other assets decreased $9.6 billion, primarily due to maturities of time deposits in line with debt maturities at GE Capital. See Note 9 to the consolidated financial statements for additional information.~~

·	~~Assets of discontinued operations decreased $106.1 billion, primarily due to the disposition of CLL businesses of $89.2 billion at GE Capital. See Note 2 to the consolidated financial statements for additional information.~~

·	~~Borrowings decreased $61.4 billion, primarily due to net repayment of debt at GE Capital. See Note 10 to the consolidated financial statements for additional information.~~

·	~~Liabilities of discontinued operations decreased $42.3 billion, primarily driven by the disposition of CLL businesses of $34.7 billion at GE Capital. See Note 2 to the consolidated financial statements for additional information.~~

~~Common stock held in treasury increased $19.5 billion~~, primarily due to treasury stock purchases of $22.0 billion (book basis), including $11.4 billion repurchased under ASR agreements. This was partially offset by treasury stock issuances of $2.6 billion. See Note 15 to the consolidated financial statements for additional information.

~~GE 2016 FORM 10-K 77~~

~~FINANCIAL RESOURCES AND LIQUIDITY~~

LIQUIDITY ~~AND BORROWINGS~~

POLICY.We maintain a strong focus on ~~liquidity.~~liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our obligations under both normal and stressed conditions. At both GE and GE Capital, we manage our liquidity to ~~help~~ provide access to sufficient funding to meet our business needs and financial obligations, ~~throughout business cycles.~~

Our liquidity and borrowing plans for GE and GE Capital are established within the context of our annual financial and strategic planning processes. At GE, our liquidity and funding plans take into account the liquidity necessary to fund our operating commitments, which include primarily purchase obligations for inventory and equipment, payroll and general expenses (including pension funding). We also take into account ouras well as capital allocation and growth objectives, ~~including paying dividends, repurchasing shares, investing~~throughout business cycles.

CONSOLIDATED LIQUIDITY.Following is a summary of cash, cash equivalents and restricted cash at December 31, 2019.



(In billions)	December 31, 2019			December 31, 2019

GE	$	17.6	U.S.	$	14.9
GE Capital	18.8		Non-U.S.	21.4
Consolidated	$	36.4	Consolidated	$	36.4

Cash held in ~~research~~non-U.S. entities has generally been reinvested in active foreign business operations; however, substantially all of our unrepatriated earnings were subject to U.S. federal tax and, ~~development~~if there is a change in reinvestment, we would expect to be able to repatriate available cash (excluding amounts held in countries with currency controls) without additional federal tax cost. Any foreign withholding tax on a repatriation to the U.S. would potentially be partially offset by a U.S. foreign tax credit.

Following is an overview of the primary sources of liquidity for GE and ~~acquiring industrial businesses. At~~ GE ~~we rely primarily on~~Capital. See the Statement of Cash Flows section within MD&A for information regarding GE and GE Capital cash ~~generated through~~flow results.

GE LIQUIDITY.GE's primary sources of liquidity consist of cash and cash equivalents, free cash flows from our operating ~~activities, any dividend~~businesses, monetization of receivables, proceeds from announced dispositions, and short-term borrowing facilities. Cash generation can be subject to variability based on many factors, including seasonality, receipt of down payments ~~from~~ on large equipment orders, timing of billings on long-term contracts, the effects of changes in end markets and our ability to execute dispositions.

GE ~~Capital, and~~ also ~~have historically maintained~~has available short-term borrowing facilities to fund its operations, including a commercial paper program, ~~that we regularly use to fund operations in the U.S., principally~~revolving credit facilities and short-term intercompany loans from GE Capital, which are generally repaid within the ~~quarters.~~same quarter. See the Borrowings section for details of our credit facilities and borrowing activity in our external short-term borrowing facilities.

*Non-GAAP Financial Measure

~~During 2017,~~

GE2019 FORM 10-K 25



MD&A	CAPITAL RESOURCES AND LIQUIDITY

GE ~~plans to incur new long-term debt to refinance existing unsecured term debt, finance the Baker Hughes transaction,~~cash, cash equivalents and for other corporate purposes. This new debt may consist of new unsecured term debt issued by GE or intercompany arrangements between GE and GE Capital utilizing GE Capital's excess unsecured term debt. GE maintains a commercial paper program with a balance of $1.5restricted cash totaled $17.6 billion at December 31, ~~2016.~~2019, including $2.6 billion of cash held in countries with currency control restrictions and $0.5 billion of restricted use cash. Cash held in countries with currency controls represents amounts held in countries which may restrict the transfer of funds to the U.S. or limit our ability to transfer funds to the U.S. without incurring substantial costs. Restricted use cash represents amounts that are not available to fund operations, and primarily comprised collateral for receivables sold and funds restricted in connection with certain ongoing litigation matters.

GE realized a total of approximately $10.3 billion of disposition proceeds for the year ended December 31, 2019, comprising $4.7 billion in the third quarter of 2019, primarily from the sale of a portion of our stake in Baker Hughes and our remaining stake in Wabtec, $2.2 billion in the second quarter of 2019 primarily from the sale of a portion of our stake in Wabtec, and $3.4 billion in the first quarter of 2019 primarily from the completion of the merger of our Transportation business with Wabtec and the sale of our Digital ServiceMax business.

In the first quarter of 2020, GE expects to receive approximately $20 billion of proceeds from the sale of our BioPharma business within our Healthcare segment, subject to regulatory approval. GE expects to use these proceeds as well as existing liquidity to repay the remaining $12.2 billion of intercompany loans from GE Capital, to contribute approximately $4 to $5 billion to the GE Pension Plan, which will equal our future minimum ERISA funding requirements through at least 2022, and to execute additional deleveraging actions of approximately $5 billion. Additionally, GE expects to receive proceeds from an orderly sale of our remaining stake in Baker Hughes.

GE CAPITAL LIQUIDITY.GE Capital’s primary sources of liquidity consist of cash and cash equivalents, cash generated from asset sales and cash flows from our businesses. Based on asset and liability management actions we have taken, GE Capital does not plan to issue any incremental GE Capital senior unsecured term debt until ~~2019. GE Capital's global commercial paper issuances total $5.0 billion~~ at December 31, 2016. GE Capital mainly relies on excess cash positions, cash generated through dispositions, and the cash flow from our Verticals to fund our debt maturities, including current portion of long-term debt ($18.2 billion at December 31, 2016), and our operating and interest costs. GE Capital's liquidity position is targeted to meet its obligations under both normal and stressed conditions.least 2021. We expect to maintain an ~~elevated~~adequate liquidity position to fund our insurance obligations and debt maturities primarily as ~~we generate~~a result of cash flows from our businesses, GE repayments of intercompany loans and capital contributions from GE. See the Segment Operations - Capital section within MD&A for further information regarding allocation of GE Capital interest expense to the GE Capital businesses.

GE Capital cash, cash equivalents and restricted cash totaled $18.8 billion at December 31, 2019, including $0.9 billion which was subject to regulatory restrictions, primarily in insurance entities.

GE Capital generated proceeds of approximately $12 billion from asset ~~sales, returning~~reductions for the year ended December 31, 2019, including $3.6 billion from the sale of a substantial portion of the assets and liabilities of PK AirFinance in the fourth quarter of 2019, exceeding our plan to ~~more normalized~~execute total asset reductions of approximately $10 billion in 2019 and our overall $25 billion target, and completing our asset reduction plan. GE Capital also received an additional capital contribution of $2.5 billion from GE in the fourth quarter of 2019, totaling $4.0 billion for 2019.

GE Capital provided capital contributions to its insurance subsidiaries of $2.0 billion, $1.9 billion and $3.5 billion in the first quarters of 2020, 2019 and 2018, respectively, and expects to provide further capital contributions of approximately $7 billion through 2024. These contributions are subject to ongoing monitoring by KID, and the total amount to be contributed could increase or decrease, or the timing could be accelerated, based upon the results of reserve adequacy testing or a decision by KID to modify the schedule of contributions set forth in January 2018. GE maintains specified capital levels ~~in 2019. During this period~~at these insurance subsidiaries under capital maintenance agreements. Going forward, we ~~expect to continue to have excess interest costs as~~anticipate funding any capital needs for insurance through a combination of GE Capital liquidity, GE Capital asset sales, ~~have outpaced our~~GE Capital future earnings and capital contributions from GE.

BORROWINGS.Consolidated total borrowings were $90.9 billion and $103.6 billion at December 31, 2019 and December 31, 2018, respectively. The reduction was driven primarily by completion of a tender offer to purchase GE long-term debt ~~maturities. While we maintain elevated liquidity levels, we may engage in liability management actions, such as buying back~~of $4.8 billion and net repayments of GE Capital debt ~~based on market and economic conditions in order to reduce our excess interest costs. In 2016, we repurchased $6.7~~of $9.5 billion (including $9.3 billion of long-term ~~unsecured~~ debt ~~and $5.8~~maturities), partially offset by an increase of $0.8 billion ~~of subordinated debentures, resulting~~ in ~~a pre-tax loss of $0.6 billion.~~

~~We maintain a detailed liquidity policy~~fair value adjustments for GE Capital ~~that defines~~ debt in fair value hedge relationships as a result of lower interest rates.

GE ~~Capital's liquidity risk tolerance under stress based on its liquidity sources,~~Industrial net debt* was $47.9 billion and $55.1 billion at December 31, 2019 and 2018, respectively. The reduction was driven primarily by the completion of a ~~comprehensive framework for managing liquidity risk including metrics~~tender offer to ~~identify~~purchase GE long-term debt of $4.8 billion in the third quarter of 2019 and ~~monitor liquidity risk and procedures to escalate and address potential issues.~~

~~On December 2, 2015, $87.7~~total repayments of $1.5 billion of intercompany loans from GE Capital, as well as a higher ending cash balance.

In 2015, senior unsecured notes and ~~$4.9 billion of~~ commercial paper ~~was~~were assumed by GE upon its merger with GE Capital. OnUnder the ~~GE balance sheet,~~conditions of the 2015 assumed debt ~~is presented~~agreement, GE Capital agreed to continue making required principal and interest payments on behalf of GE, resulting in ~~borrowings with~~the establishment of an ~~offsetting~~intercompany receivable ~~from~~and payable between GE and GE Capital. ~~On the~~In addition, GE Capital ~~balance sheet,~~has periodically made intercompany loans to GE with maturity terms that mirror the assumed debt. As these loans qualify for right-of-offset presentation, they reduce the assumed debt ~~is reflected~~intercompany receivable and payable between GE and GE Capital, as annoted in the table below.

*Non-GAAP Financial Measure

GE2019 FORM 10-K 26



MD&A	CAPITAL RESOURCES AND LIQUIDITY

The following table provides a reconciliation of total short- and long-term borrowings as reported on the respective GE and GE Capital Statements of Financial Position to borrowings adjusted for assumed debt and intercompany ~~payable~~loans:



December 31, 2019 (In billions)	GE			GE Capital			Consolidated(a)

Total short- and long-term borrowings	$	52.1		$	39.9		$	90.9

Debt assumed by GE from GE Capital	(31.4		)	31.4			—
Intercompany loans with right of offset	12.2			(12.2		)	—
Total intercompany payable (receivable) between GE and GE Capital	(19.1		)	19.1			—

Total borrowings adjusted for assumed debt and intercompany loans	$	32.9		$	59.0		$	90.9


(a)	Included elimination of other GE borrowings from GE Capital, primarily related to timing of cash settlements associated with GE receivables monetization programs.

When measuring the individual financial positions of GE ~~presented in borrowings (see Note 10 for additional information).~~and GE Capital, assumed debt should be considered a GE Capital debt obligation, and the intercompany loans with the right of offset mentioned above should be considered a GE debt obligation and a reduction of GE Capital’s total debt obligations. The following table illustrates ~~total~~the primary components of GE and GE Capital ~~external~~borrowings, adjusted for assumed debt and ~~debt assumed by GE as of December 31, 2016.~~intercompany loans.



GE (In billions)	December 31, 2019		December 31, 2018		GE Capital (In billions)	December 31, 2019			December 31, 2018
Commercial paper	$	3.0	$	3.0	Commercial paper	$	—		$	—
GE senior notes	15.5		20.4		Senior and subordinated notes	36.5			39.1
Intercompany loans from GE Capital	12.2		13.7		Senior and subordinated notes assumed by GE	31.4			36.3
Other GE borrowings	2.2		2.6		Intercompany loans to GE	(12.2		)	(13.7		)
					Other GE Capital borrowings(a)	3.4			3.9
					Total GE Capital
Total GE adjusted borrowings	$	32.9	$	39.7	adjusted borrowings	$	59.0		$	65.5

December 31, 2016 (In billions) GE GE Capital Consolidated(a)

External debt $ 79.3 $ 58.5 $ 136.2
Debt assumed by GE from GE Capital (58.8) 58.8 -
Debt adjusted for assumed debt 20.5 117.3 136.2

(a)~~Includes $1.6~~ Included $1.7 billion ~~elimination of intercompany borrowings between GE~~ and ~~GE Capital.~~

~~GE 2016 FORM 10-K 78~~

~~LIQUIDITY SOURCES~~

~~In addition to GE cash of $10.5~~$1.9 billion at December 31, ~~2016,~~2019 and December 31, 2018, respectively, of non-recourse borrowings of consolidated securitization entities where GE Capital ~~maintained liquidity sources~~has securitized financial assets as an alternative source of ~~$50.5 billion that consisted~~funding.

The intercompany loans from GE Capital to GE bear the right of ~~cash~~offset against amounts owed by GE Capital to GE under the assumed debt agreement and ~~equivalents~~can be prepaid by GE at any time, in whole or in part, without premium or penalty. These loans are priced at market terms and have a collective weighted average interest rate of ~~$37.6 billion, high-quality investments~~3.5% and term of ~~$11.5 billion and cash and equivalents of $1.4 billion classified as discontinued operations. Additionally,~~approximately 11.7 years at December 31, ~~2016, we have~~2019. In 2019, GE repaid a total of $1.5 billion of intercompany loans from GE Capital.

GE has in place committed credit lines which it may use from time to time to meet its short-term liquidity needs. The following table provides a summary of committed and available credit lines.



GE COMMITTED AND AVAILABLE CREDIT FACILITIES (In billions)	December 31, 2019		December 31, 2018

Unused back-up revolving credit facility	$	20.0	$	20.0
Revolving credit facilities (exceeding one year)	18.9		23.9
Bilateral revolving credit facilities (364-day)	3.1		3.6
Total committed credit facilities	$	42.0	$	47.5
Less offset provisions	6.7		6.7
Total net available credit facilities	$	35.3	$	40.8

Included in our credit facilities is an unused $20.0 billion ~~of committed unused~~back-up revolving syndicated credit ~~lines~~facility extended by 36 banks, expiring in a2021, and an unused $14.8 billion revolving syndicated credit facility ~~agreement.~~extended by six banks, expiring on December 31, 2020. The commitments under these syndicated credit facilities may be reduced by up to $6.7 billion due to offset provisions for any bank that holds a commitment to lend under both facilities.

GE2019 FORM 10-K 27



MD&A	CAPITAL RESOURCES AND LIQUIDITY

The amount committed and available under the syndicated credit facility expiring on December 31, 2020 will periodically be reduced by the greater of specified contractual commitment reductions or calculated commitment reductions, which is determined based on any potential specified issuances of equity and incurrences of incremental debt by GE or its subsidiaries, as well as a portion of industrial business disposition proceeds. In the first quarter of 2019, the amount committed and available under this facility was reduced by the calculated commitment reduction of $5.0 billion to $14.8 billion. Pursuant to an amendment entered into in the first quarter 2019, further commitment reductions (other than those related to incremental debt issuances or equity issuances) are deferred until the earlier of the closing of the BioPharma transaction or September 30, 2020. If the BioPharma transaction closes prior to June 30, 2020, the commitments under the facility are reduced by the greater of $7.4 billion or the calculated commitment reductions through the BioPharma closing date (including all deferred reductions). If the BioPharma transaction closes on or after June 30, 2020, the commitments under the facility are reduced by the greater of $9.9 billion or the calculated commitment reductions through the BioPharma closing date (including all deferred reductions). The $20.0 billion syndicated back-up revolving credit facility expiring in 2021 does not contain any contractual commitment reduction features.

Under the terms of an agreement between GE Capital and GE, GE Capital has the right to compel GE to borrow under ~~such~~all credit ~~lines~~facilities except the syndicated facility expiring on December 31, 2020 and transfer the proceeds ~~as loans~~ to GE ~~Capital.~~

CASH AND EQUIVALENTS

(In billions) December 31, 2016 December 31, 2016

GE(a) $ 10.5 U.S. $ 9.6
GE Capital(b) 37.6 Non-U.S.(c) 38.6

~~(a)~~

At December 31, 2016, $3.5 billion of GE cash and equivalents was held in countries with currency controls that may restrict the transfer of funds to the U.S. or limit our ability to transfer funds to the U.S. without incurring substantial costs. These funds are available to fund operations and growth in these countries and we do not currently anticipate a need to transfer these funds to the U.S.

~~(b)~~

~~At December 31, 2016, GE Capital cash and equivalents of about $0.5 billion was primarily in insurance entities and was subject to regulatory restrictions.~~

~~(c)~~

Of this amount at December 31, 2016, $3.3 billion is held outside of the U.S. and is available to fund operations and other growth of non-U.S. subsidiaries; it is also available to fund our needs in the U.S. on a short-term basis through short-term loans, without being subject to U.S. tax. Under the Internal Revenue Code, these loans are permitted to be outstanding for 30 days or less and the total of all such loans is required to be outstanding for less than 60 days during the year. If we were to repatriate this cash, we would be subject to additional U.S. income taxes and foreign withholding taxes.

~~There were no new senior unsecured debt issuances in 2016.~~

COMMERCIAL PAPER

(In billions) GE GE Capital

Average commercial paper borrowings during the fourth quarter of 2016 $ 13.9 $ 5.0
Maximum commercial paper borrowings outstanding during the fourth quarter of 2016 19.5 5.1

Capital as intercompany loans, which would be subject to the same terms and conditions as those between GE and the lending banks. GE Capital commercial paper maturities have historically been funded principally through new commercial paper issuances and at GE are substantially repaid before quarter-end using indefinitely reinvested overseas cash, which as discussed above, is available for usehas not exercised this right.

The following table provides a summary of the activity in the ~~U.S. on a~~primary external sources of short-term ~~basis without being subject to U.S. tax.~~

~~We securitize financial assets as an alternative source of funding. At December 31, 2016, consolidated non-recourse securitization~~ borrowings ~~were $0.4 billion.~~

We have two deposit-taking banks outside of the U.S., which are classified as discontinued operations, and neither deposit-taking platform will be retained after the planned completion of the remainingfor GE ~~Capital Exit Plan dispositions in Europe in 2017. On April 18, 2016, we completed the sale of the deposit-taking bank~~ in the ~~U.S., GE Capital Bank, an industrial bank.~~fourth quarters of 2019 and 2018.

~~EXCHANGE RATE AND INTEREST RATE RISKS~~



(In billions)	GE Commercial Paper		Revolving Credit Facilities		Total

2019
Average borrowings during the fourth quarter	$	3.0	$	1.3	$	4.3
Maximum borrowings outstanding during the fourth quarter	3.2		1.5		4.7
Ending balance at December 31	3.0		—		3.0

2018
Average borrowings during the fourth quarter	$	7.9	$	2.5	$	10.4
Maximum borrowings outstanding during the fourth quarter	10.7		5.1		14.8
Ending balance at December 31	3.0		—		3.0

~~Exchange rate~~Total average and ~~interest rate risks~~maximum borrowings in the table above are managed with a variety of techniques, including match funding and selective use of derivatives. We use derivatives to mitigate or eliminate certain financial and market risks because we conduct business in diverse markets around the world and local funding is not always efficient. In addition, we use derivatives to adjust the debt we are issuing to match the fixed or floating nature of the assets we are originating. We apply strict policies to manage each of these risks, including prohibitions on speculative activities. Following is an analysis of the potential effects of changes in interest rates and currency exchange rates using so-called "shock" tests that seek to model the effects of shifts in rates. Such tests are inherently limitedcalculated based on the ~~assumptions used (described further below) and should not be viewed as a forecast; actual effects would depend on many variables, including market factors and the composition~~daily outstanding balance of the ~~Company's assets~~sum of commercial paper and ~~liabilities at that time.~~revolving credit facilities.

The reduction in total GE ~~2016 FORM 10-K 79~~average and maximum short-term borrowings during the fourth quarter of 2019 compared to the fourth quarter of 2018 was driven by holding higher cash balances and improvements in our global funding and cash management operations.

It is our policy to minimize exposure to interest rate changes. We fund our financial investments using debt or a combination of debt and hedging instruments so that the interest rates of our borrowings match the expected interest rate profile on our assets. To test the effectiveness of our hedging actions, we assumed that, on January 1, 2016, interest rates decreased by 100 basis points across the yield curve (a "parallel shift" in that curve) and further assumed that the decrease remained in place for the next 12 months. Based on the year-end 2016 portfolio and holding all other assumptions constant, we estimated that our consolidated net earnings for the next 12 months, starting in January 2016, would decline by less than $0.1 billion as a result of this parallel shift in the yield curve.

In addition to its external liquidity sources, GE may from time to time enter into short-term intercompany loans from GE Capital to utilize GE Capital’s excess cash as an efficient source of liquidity. These loans are repaid within the same quarter. No such loans were made in 2019. GE Capital did not issue any commercial paper or draw on any revolving credit facilities in 2019.

It is our policy to minimize currency exposures and to conduct operations either within functional currencies or using the protection of hedge strategies. We analyzed year-end 2016 consolidated currency exposures, including derivatives designated and effective as hedges, to identify assets and liabilities denominated in other than their relevant functional currencies. For such assets and liabilities, we then evaluated the effects of a 10% shift in exchange rates between those currencies and the U.S. dollar, holding all other assumptions constant. This analysis indicated that our 2016 consolidated net earnings would decline by less than $0.3 billion as a result of such a shift in exchange rates. This analysis excludes any translation impact from changes in exchange rates on our financial results and any offsetting effect from the forecasted future transactions that are economically hedged.

~~DEBT AND DERIVATIVE INSTRUMENTS, GUARANTEES AND COVENANTS~~

CREDIT RATINGS

AND CONDITIONS.We have relied, and may continue to rely, on the ~~short-term~~short- and long-term debt capital markets to fund, among other things, a significant portion of our ~~operations and significant acquisitions.~~operations. The cost and availability of debt financing is influenced by our credit ratings.

~~On September 23, 2016,~~ Moody’s Investors Service (Moody’s), Standard and ~~Poor's~~Poor’s Global Ratings (S&P) lowered GE's and GE Capital's long-term unsecured debt ratings to AA- from AA+. The A-1+ short-term funding rating from S&P remained unchanged. On October 31, 2016, GE announced an agreement with Baker Hughes as previously discussed in the Consolidated Results section of MD&A. Moody's, S&P, and Fitch Ratings (Fitch) ~~affirmed GE's credit~~currently issue ratings ~~following the announcement. Fitch has published credit ratings for~~on GE and GE Capital ~~since August 2, 2016.~~short- and long-term debt. The credit ratings of GE and GE Capital as of the date of this filing are set forth in the table below.



	Moody's	S&P	Fitch

GE
Outlook	Stable	Stable	Negative
Short term	P-2	A-2	F2
Long term	Baa1	BBB+	BBB+
GE Capital
Outlook	Stable	Stable	Negative
Short term	P-2	A-2	F2
Long term	Baa1	BBB+	BBB+

There were no changes in GE or GE Capital ratings from the end of the first quarter of 2019 through the date of this filing.

We are disclosing our credit ratings and any current quarter updates to these ratings to enhance understanding of our sources of liquidity and the effects of our ratings on our costs of funds. ~~Although we currently do not expect a downgrade in the credit ratings, our~~Our ratings may be subject to a revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. For a description of some of the potential consequences of a reduction in our credit ratings, see ~~"Risk Factors –~~the Financial Risks ~~- Funding access/costs - Failure~~section of Risk Factors in this report.

GE2019 FORM 10-K 28



MD&A	CAPITAL RESOURCES AND LIQUIDITY

The following table provides a summary of the estimated potential liquidity impact in the event of further downgrades with regards to ~~maintain our~~the most significant contractual credit ratings or conditions of the Company based on their proximity to our current ratings.



(In billions)	Triggers Below	At December 31, 2019

Derivatives
Terminations	BBB/Baa2	$	(0.2	)
Cash margin posting	BBB/Baa2	(0.5		)
Receivables Sales Programs
Loss of cash commingling	A-2/P-2/F2	$	(0.3	)
Alternative funding sources	A-2/P-2/F2	(1.1		)

The timing within the quarter of the potential liquidity impact of these areas may differ, as described in the ~~financial and~~following sections which provide additional details regarding the significant credit ~~markets, could adversely affect~~rating conditions of the Company.

DEBT CONDITIONS.Substantially all of our debt agreements do not contain material credit rating covenants. If our short-term credit ratings were to fall below A-2/P-2/F2, it is possible that we would lose all or part of our access to ~~capital~~the tier-2 commercial paper markets, ~~funding costs and related margins, liquidity and competitive position."~~

~~GE's and GE Capital's ratings are set forth~~which would reduce our borrowing capacity in ~~the table below.~~

	~~Moody's~~	~~S&P~~	~~Fitch~~

GE
~~Outlook~~	~~Stable~~	~~Stable~~	~~Stable~~
~~Short term~~	~~P-1~~	~~A-1+~~	~~F1+~~
~~Long term~~	A1	~~AA-~~	~~AA-~~

~~GE Capital~~
~~Outlook~~	~~Stable~~	~~Stable~~	~~Stable~~
~~Commercial paper~~	~~P-1~~	~~A-1+~~	~~F1+~~
~~Senior notes~~	A1	~~AA-~~	~~AA-~~

~~GE 2016 FORM 10-K 80~~

~~PRINCIPAL DEBT AND DERIVATIVE CONDITIONS~~

~~Certain~~those markets. This may result in increased utilization of our ~~derivative instruments can be terminated if specified~~revolving credit ~~ratings are not maintained and certain debt and derivatives agreements of other consolidated entities have provisions that are affected by these credit ratings.~~facilities to fund our intra-quarter operations.

Fair values of our derivatives can change significantly from period to period based on, among other factors, market movements and changes in our positions. We manage counterparty credit risk (the risk that counterparties will default and not make payments to us according to the terms of our standard master agreements) on an individual counterparty basis. Where we have agreed to netting of derivative exposures with a counterparty, we offset our exposures with that counterparty and apply the value of collateral posted to us to determine the net exposure. We actively monitor these net exposures against defined limits and take appropriate actions in response, including requiring additional collateral.

DERIVATIVE CONDITIONS.Swap, forward and option contracts are executed under standard master agreements that typically contain mutual downgrade provisions that provide the ability of the counterparty to require termination if the ~~long-term~~ credit ratings of the applicable GE entity were to fall below ~~A-/A3 or other~~specified ratings levels agreed upon with the ~~counterparty.~~ counterparty, primarily BBB/Baa2. Our master agreements also typically contain provisions that provide termination rights upon the occurrence of certain other events, such as a bankruptcy or events of default by one of the parties. If an agreement was terminated under any of these circumstances, the termination amount payable would be determined on a net basis and could also take into account any collateral posted. The net amount of our derivative liability subject to such termination provisions, after consideration of collateral posted by us and outstanding interest payments was $0.2 billion at December 31, 2019. This excludes exposure related to embedded derivatives, which are not subject to these provisions.

In addition, certain of ~~these master agreements, the counterparty also has the ability~~our derivatives, primarily interest rate swaps, are subject to ~~require termination~~additional cash margin posting requirements if ~~the short-term~~our credit ratings ~~of the applicable GE entity~~ were to fall below ~~A-1/P-1.~~BBB/Baa2. The ~~net derivative liability after consideration~~amount of ~~netting arrangements, outstanding interest payments~~additional margin will vary based on, among other factors, market movements and ~~collateral posted by us under these master agreements was estimated to be $0.4 billion at~~changes in our positions. At December 31, ~~2016.~~

2019, the amount of additional margin that we could be required to post if we fell below these ratings levels was approximately $0.5 billion.

See ~~Notes 20 and 29~~Note 21 to the consolidated financial statements for further information about our risk exposures, our use of derivatives, and the effects of this activity on our financial statements.

OTHER CONDITIONS.Where we provide servicing for third-party investors under certain of our receivable sales programs, GE ~~GUARANTEE OF CERTAIN GE CAPITAL DEBT~~

~~GE provides implicit~~is contractually permitted to commingle cash collected from customers on financing receivables sold to third-party investors with our own cash prior to payment to third-party investors, provided our short-term credit rating does not fall below A-2/P-2/F2. In the event any of our ratings were to fall below such levels, we may be required to segregate certain of these cash collections owed to third-party investors into restricted bank accounts and ~~explicit support~~would lose the short-term liquidity benefit of commingling with respect to such collections. The financial impact to our intra-quarter liquidity would vary based on collections activity for a given quarter and may result in increased utilization of our revolving credit facilities. The loss of cash commingling would have resulted in an estimated maximum reduction of approximately $0.3 billion to GE ~~Capital through commitments, capital contributions~~intra-quarter liquidity during the fourth quarter of 2019.

In addition, we have relied, and ~~operating support.~~ Atmay continue to rely, on securitization programs to provide alternative funding for sales of GE receivables to third-party investors. If any of our short-term credit ratings were to fall below A-2/P-2/F2, the timing or amount of liquidity generated by these programs could be adversely impacted. In the fourth quarter of 2019, the estimated maximum reduction to our ending liquidity had our credit ratings fallen below these levels was approximately $1.1 billion.

FOREIGN EXCHANGE AND INTEREST RATE RISKS.As a result of our global operations, we generate and incur a significant portion of our revenues and expenses in currencies other than the U.S. dollar. Such principal currencies include the euro, the Australian dollar, the Brazilian real and the Chinese renminbi, among others. The effects of foreign currency fluctuations on earnings, excluding the earnings impact of the underlying hedged item, was less than $0.1 billion, $0.3 billion, and $0.1 billion for the years ended December 31, ~~2016, GE debt assumed~~ 2019, 2018 and 2017, respectively. This analysis excludes any offsetting effect from the forecasted future transactions that are economically hedged.

GE ~~Capital~~2019 FORM 10-K 29



MD&A	CAPITAL RESOURCES AND LIQUIDITY

Exchange rate and interest rate risks are managed with a variety of techniques, including selective use of derivatives. We apply policies to manage each of these risks, including prohibitions on speculative activities. Following is an analysis of the potential effects of changes in interest rates and currency exchange rates.

•

It is our policy to minimize exposure to interest rate changes and their impact to interest and other financial charges. We fund our financial investments using a combination of debt and hedging instruments so that the interest rates of our borrowings match the expected interest rate profile on our assets. It is our policy to minimize currency exposures and to conduct operations either within functional currencies or using the protection of hedge strategies. To test the effectiveness of our hedging actions, for interest rate risk we assumed that, on January 1, 2020, interest rates decreased by 100 basis points and the decrease remained in place for the next 12 months and for currency risk of assets and liabilities denominated in other than their functional currencies, we evaluated the effect of a 10% shift in exchange rates against the U.S. dollar. The analyses indicated that our 2019 consolidated net earnings would decline by less than $0.1 billion for interest rate risk and approximately $0.1 billion for foreign exchange risk.

LIBOR REFORM.In connection with the ~~merger~~potential transition away from the use of the London interbank offered rate (LIBOR) as an interest rate benchmark, we are currently in the process of identifying and managing the potential impact to the Company. The majority of the Company’s exposure to LIBOR relates to debt securities issued by GE Capital, ~~into~~for which contractual fallback language exists, as well as preferred stock issued by GE, ~~was~~ ~~$58.8 billion,~~substantially all of which converts to LIBOR in January 2021. Additionally, with respect to our derivatives portfolio, we will review industry-wide LIBOR reform efforts and expect that such efforts will provide guidance on how to manage the transition from LIBOR for derivatives.

STATEMENT OF CASH FLOWS – OVERVIEW FROM 2017 THROUGH 2019. We manage the cash flow performance of our industrial and financial services businesses separately. We therefore believe it is useful to report separate GE and GE ~~guaranteed $47.5 billion~~Capital columns in our Statement of Cash Flows because it enables us and our investors to evaluate the cash from operating activities of our industrial businesses (the principal source of cash generation for our industrial businesses) separately from the cash flows of our financial services business, as well as to evaluate the cash flows between our industrial businesses and GE ~~Capital debt.~~Capital.

In preparing our Statement of Cash Flows, we make certain adjustments to reflect cash flows that cannot otherwise be calculated by changes in our Statement of Financial Position. These adjustments may include, but are not limited to, the effects of currency exchange, acquisitions and dispositions of businesses, businesses classified as held for sale, the timing of settlements to suppliers for property, plant and equipment, non-cash gains/losses and other balance sheet reclassifications.

All other operating activities reflect cash sources and uses as well as non-cash adjustments to net earnings (loss). See Note 2824 to the consolidated financial statements for further information onregarding All other operating activities, All other investing activities and All other financing activities for both GE and GE Capital.

The following investing and financing activities affected recognized assets or liabilities but did not result in cash receipts or payments in 2019: the ~~guarantor~~ ownership interest received and tax benefits receivable as a result of the spin-off and subsequent merger of our Transportation segment with Wabtec; our retained ownership interest in Baker Hughes; additional non-cash deferred purchase price received by GE Capital related to sales of current receivables; and right-of-use assets obtained in operating leases. See Notes 2, 4 and 7, respectively, to the consolidated financial statements.

~~ACCELERATED SHARE REPURCHASE AGREEMENT~~

~~During 2016, we repurchased $22.0 billion of our common stock, including $11.4 billion repurchased under accelerated share repurchase (ASR) agreements.~~

~~In December 2016, we entered into an ASR agreement with a financial institution that allowed us to repurchase~~See the Intercompany Transactions between GE common stock at a price below its volume weighted-average price during a given period. During the fourth quarter, we paid $2.2 billion and received and classified as treasury shares an initial delivery of 59,177,215 shares based on then-current market prices. The payment was recorded as a reduction to shareowners' equity, consisting of a $1.9 billion increase in treasury stock, which reflects the value of the shares received upon initial delivery, and a $0.3 billion decrease in other capital, which reflects the value of the stock held back pending final delivery.

We accounted for the ASR as two separate transactions: (i) 59,177,215 shares of common stock initially delivered to GE and $1.9 billion was accounted for as a treasury stock transaction and (ii) the unsettled contract of $0.3 billion was determined to be a forward contract indexed to GE's own common stock. The initial delivery of 59,177,215 shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. GE has determined that the forward contract, indexed to its own common stock, met all the criteria for equity classification.

~~In the first quarter of 2017, we received the remaining 10,773,050 shares based on the final volume weighted-average price less the negotiated discount.~~

~~GE 2016 FORM 10-K 81~~

~~STATEMENT OF CASH FLOWS – OVERVIEW FROM 2014 THROUGH 2016~~

~~CONSOLIDATED CASH FLOWS~~

~~We evaluate our cash flows performance by reviewing our industrial (non-GE Capital) businesses~~ and GE Capital ~~businesses separately. Cash from operating activities (CFOA) is~~section within MD&A and Notes 4 and 25 to the ~~principal source of cash generation~~consolidated financial statements for further information regarding certain transactions affecting our ~~industrial businesses.~~

~~GE CASH FLOWS~~

~~(Dollars in billions)~~

OPERATING CASH FLOWS INVESTING CASH FLOWS FINANCING CASH FLOWS

2014 2015 2016 2014 2015 2016 2014 2015 2016

~~With respect to GE CFOA, we believe that it is useful to supplement our GE~~consolidated Statement of Cash ~~Flows and to examine in a broader context the business activities that provide and require cash.~~Flows.

GE CASH FLOWS FROM CONTINUING OPERATIONS.The most significant source of cash in GE CFOA is customer-related activities, the largest of which is collecting cash resulting from product or services sales. The most significant operating use of cash is to pay our suppliers, employees, tax authorities, contribute to post retirement plans and pay others for a wide range of material, services and ~~services. Dividends~~taxes.

GE measures itself on a GE Industrial free cash flows* basis. This metric includes GE CFOA plus investments in property, plant and equipment and additions to internal-use software; this metric excludes any dividends received from GE Capital ~~represent~~and any cash received from dispositions of property, plant and equipment. We believe that investors may also find it useful to compare GE's Industrial free cash flows* performance without the effects of cash used for taxes related to business sales and contributions to the GE Pension Plan. We believe that this measure better allows management and investors to evaluate the capacity of our industrial operations to generate free cash flows.

*Non-GAAP Financial Measure

GE2019 FORM 10-K 30



MD&A	CAPITAL RESOURCES AND LIQUIDITY



2019 CFOA (GAAP) AND FREE CASH FLOWS (FCF) BY SEGMENT (NON-GAAP)
(In millions)	Power			Renewable Energy			Aviation			Healthcare			Corporate & Eliminations			GE Industrial

CFOA (GAAP)	$	(1,200	)	$	(512	)	$	5,552		$	3,024		$	(2,250	)	$	4,614
Add: gross additions to property, plant and equipment	(277		)	(455		)	(1,031		)	(395		)	(59		)	(2,216		)
Add: gross additions to internal-use software	(46		)	(14		)	(107		)	(79		)	(28		)	(274		)
Less: GE Pension Plan funding	—			—			—			—			—			—
Less: taxes related to business sales	—			—			—			—			(198		)	(198		)
Free cash flows (Non-GAAP)	$	(1,523	)	$	(980	)	$	4,415		$	2,550		$	(2,139	)	$	2,322



2018 CFOA (GAAP) AND FREE CASH FLOWS (FCF) BY SEGMENT (NON-GAAP)
(In millions)	Power			Renewable Energy			Aviation			Healthcare			Corporate & Eliminations			GE Industrial

CFOA (GAAP)	$	(1,849	)	$	406		$	5,373		$	3,485		$	(6,714	)	$	701
Add: gross additions to property, plant and equipment	(358		)	(297		)	(1,070		)	(378		)	(131		)	(2,234		)
Add: gross additions to internal-use software	(66		)	(11		)	(73		)	(90		)	(67		)	(306		)
Less: GE Pension Plan funding	—			—			—			—			(6,000		)	(6,000		)
Less: taxes related to business sales	—			—			—			—			(180		)	(180		)
Free cash flows (Non-GAAP)	$	(2,273	)	$	98		$	4,230		$	3,018		$	(731	)	$	4,341

GE cash from operating activitieswas $4.6 billion in 2019 compared with $0.7 billion in 2018 (including $0.3 billion and $0.5 billion cash received for Baker Hughes Class B shareholder dividends in 2019 and 2018, respectively). The $3.9 billion increase was primarily due to: the nonrecurrence of GE Pension Plan contributions of $6.0 billion in 2018 (which are excluded from GE Industrial free cash flows*); a decrease in payments of equipment project cost accruals of $0.6 billion; a net decrease in payments of Aviation-related customer allowance accruals of $0.4 billion; and an increase in cash generated from contract & other deferred assets of $0.1 billion, primarily due to higher billings on our long-term service agreements, partially offset by lower liquidations of deferred inventory.

These increases in cash were partially offset by: an increase in cash used for working capital of $2.6 billion; and an increase in cash paid for income taxes of $0.6 billion.

The increase in cash used for working capital was due to: an increase in cash used for current receivables of $2.9 billion, primarily driven by lower sales of receivables and receivables growth resulting from the 737 MAX grounding; a decrease in cash from accounts payable of $0.9 billion; and higher inventory build of $0.5 billion, mainly as a result of the expected timing of deliveries in 2020. These increases in cash used for working capital were partially offset by higher progress collections of $1.8 billion, mainly as a result of higher utilization of collections in 2018, including the impact of the timing of progress collections received in the fourth quarter of 2017.

As discussed in the Aviation and GECAS 737 MAX section within the Consolidated Results section of MD&A, the 737 MAX grounding had an adverse net effect on GE CFOA of approximately $1.4 billion in 2019. Within Aviation, this effect was more than offset by: higher commercial aftermarket earnings and higher long-term service agreement billings of $0.6 billion; cash receipts from contract modifications of $0.3 billion; a new spare parts distribution deal for a legacy engine program of $0.3 billion; and lower customer allowance payments of $0.4 billion as discussed above. Other Aviation working capital cash flows, excluding the impact of the 737 MAX grounding, largely offset.

GE cash from investing activities was $4.1 billion in 2019 compared with $3.1 billion in 2018. The $0.9 billion increase was primarily due to: proceeds from the spin-off of our Transportation business of $6.2 billion (including the secondary offerings of Wabtec common stock shares in the second and third quarters of 2019), the sale of a portion of our stake in Baker Hughes of $3.0 billion and from other business dispositions in Aviation, Corporate and Power (net of cash transferred) of $1.1 billion in 2019, compared with total proceeds of $6.0 billion in 2018, primarily from the sale of businesses at Power and Healthcare; a decrease in net cash paid for settlements of derivative hedges of $0.9 billion; the nonrecurrence of the purchase of an aviation technology joint venture of $0.6 billion in 2018; partially offset by the 2019 capital contribution to GE Capital ~~retained earnings,~~of $4.0 billion; business acquisitions of $0.4 billion, primarily related to the transfer of the HEF business from GE Capital to our Healthcare segment in 2019; and ~~are distinct from~~an increase in cash ~~from~~used related to net settlements between our continuing operations ~~within the~~and discontinued operations of $0.4 billion. Cash used for additions to property, plant and equipment and internal-use software, which is a component of GE ~~Capital businesses.~~Industrial free cash flows*, was $2.5 billion in both 2019 and 2018.

All other operating activities reflect cash sources and uses as well as non-cash adjustments to net income including those related to taxes, interest, pension, contract assets and gains (losses) on principal business dispositions. See Note 26 to the consolidated financial statements for further information.

See the Intercompany Transactions between GE and GE Capital section within the MD&A and Notes 4, 22 and 24 to the consolidated financial statements for further information regarding certain transactions affecting our consolidated Statement of Cash Flows.

*Non-GAAP Financial Measure

GE ~~2016~~2019 FORM 10-K 82 31

~~2016 – 2015 COMMENTARY – CONTINUING OPERATIONS:~~

~~GE cash from operating activities-continuing operations increased $13.6 billion, primarily due to the following:~~

·
	~~GE Capital paid common dividends totaling $20.1 billion and $4.3 billion to GE in 2016 and 2015, respectively.~~
MD&A	CAPITAL RESOURCES AND LIQUIDITY

·	~~Improvement of working capital of $3.6 billion, primarily due to increases in progress collections and accounts payable, partially offset by an increase in inventory build.~~

·	~~These increases were partially offset by the following decreases:~~

·	~~$1.0 billion increase in income tax payments, including $1.4 billion in taxes related to the 2016 sale of our Appliances business to Haier.~~

·	~~Higher restructuring and interest payments of $0.6 billion and $0.4 billion, respectively, when compared to 2015.~~

·	~~$0.5 billion of 2016 incentive compensation payments due to long-term performance awards. No such payments were made in 2015.~~

·	~~2016 GE Pension Trust funding of $0.3 billion representing net sale proceeds associated with the July 1, 2016 sale of GE Asset Management (GEAM) to State Street Corporation.~~

·	~~The nonrecurrence of settlements related to the NBCU transaction of $0.5 billion and an Electrolux break-up fee of $0.2 billion received in 2015.~~

·	~~See Note 26 to the consolidated financial statements for further information regarding cash sources and uses as well as non-cash adjustments to net income reported as All other operating activities.~~

~~GE cash used for investing activities-continuing operations decreased $10.8 billion, primarily due to the following:~~

Higher proceeds from principal business dispositions of $3.6 billion, primarily driven by the sale of our Appliances business to Haier for proceeds of $4.8 billion and the sale of GEAM for proceeds of $0.4 billion in 2016, compared to $1.7 billion of total proceeds from principal business dispositions in 2015.

·	~~A decrease in business acquisition activity of $8.1 billion, primarily driven by the acquisition of Alstom for $10.1 billion in 2015.~~

·	~~These decreases were partially offset by the funding of joint ventures of $0.4 billion in 2016, principally related to our Aviation business (reflected in All other investing activities).~~

GE cash used for financing ~~activities-continuing operations increased $19.2~~activities was $7.7 billion in 2019 compared with cash from financing activities of $1.5 billion in 2018. The $9.1 billion increase in cash used was primarily due to: the nonrecurrence of intercompany loans from GE Capital to GE of $6.5 billion in 2018 (including $6.0 billion to fund contributions to the ~~following:~~GE Pension Plan); completion of a tender offer to purchase GE long-term debt of $4.8 billion in 2019; the nonrecurrence of dispositions of noncontrolling interests in Baker Hughes of $4.4 billion in 2018; the repayment of GE Capital intercompany loans by GE of $1.5 billion in 2019; partially offset by a decrease in common dividends paid to shareholders of $3.8 billion; and the nonrecurrence of the acquisition of Alstom's interest in grid technology, renewable energy, and global nuclear and French steam power joint ventures for $3.1 billion in 2018.

·	~~Net purchases of GE treasury shares of $21.4 billion, including $11.4 billion paid under ASR agreements compared to $1.1 billion in 2015.~~

·	~~This increase in cash usage was partially offset by the following decreases:~~

·	~~A net increase in borrowings of $0.8 billion, primarily driven by a short-term loan from GE Capital to GE with remaining principal of $1.3 billion in 2016 (the loan was fully repaid in January 2017).~~

·	~~Lower dividends paid to shareowners of $0.8 billion due to lower shares outstanding in 2016 because of on-going repurchases of GE treasury shares.~~

~~2015 – 2014 COMMENTARY – CONTINUING OPERATIONS:~~

GE cash from operating ~~activities-continuing operations increased~~activities was $0.7 billion in 2018 compared with $11.5 billion in 2017 (including $0.5 billion and $0.3 billion cash received for Baker Hughes Class B shareholder dividends in 2018 and 2017, respectively). The $10.8 billion decrease was primarily due to: an increase in GE Pension Plan contributions (which are excluded from GE Industrial free cash flows*) of $4.3 billion; the nonrecurrence of common dividends received from GE Capital (which are excluded from GE Industrial free cash flows*) of $4.0 billion in 2017; an increase in cash used for working capital of $3.4 billion; and an increase in payments of equipment project cost accruals of $0.7 billion.

These decreases in cash were partially offset by: a decrease in cash used for contract & other deferred assets of $1.2 billion, primarily due to the ~~following:~~timing of revenue recognized relative to the timing of billings and collections on our long-term equipment agreements and lower cash used for deferred inventory; and a decrease in cash paid for income taxes of $0.8 billion.

·	~~GE Capital paid common dividends totaling $4.3 billion and $3.0 billion to GE in 2015 and 2014, respectively.~~

·	~~Improvement of working capital of $0.6 billion, primarily related to increased collections on current receivables, partially offset by a decrease in accounts payable and progress collections.~~

The increase in cash used for working capital was due to: lower progress collections of $2.4 billion, mainly as a result of net utilization in 2018, including the impact of the timing of progress collections received in the fourth quarter of 2017; an increase in cash used for current receivables of $2.0 billion, primarily driven by lower sales of receivables; and higher inventory build of $0.7 billion, mainly as a result of expected deliveries in 2019. These increases in cash used for working capital were partially offset by an increase in cash from accounts payable of $1.6 billion, primarily driven by inventory build and improved payment terms.

·	~~Settlements related to the NBCU transaction of $0.5 billion and an Electrolux break-up fee of $0.2 billion received in 2015.~~

·	~~These increases were partially offset by a $0.3 billion increase in income tax payments.~~

GE cash from investing activities was $3.1 billion in 2018 compared with cash used for investing activities of $11.7 billion in 2017. The increase in cash of $14.9 billion was primarily due to: a decrease in cash used related to net settlements between our continuing operations and discontinued operations of $6.6 billion, primarily related to funding in the first half of 2017 in order to complete the Baker Hughes acquisition; an increase in proceeds from business dispositions (net of cash transferred) of $3.0 billion, primarily from the sale of businesses at Power and Healthcare; a decrease in cash used for business acquisitions (net of cash acquired) of $2.7 billion, primarily driven by the acquisitions of LM Wind Power and ServiceMax in 2017; lower cash used for additions to property, plant and equipment and internal-use software (which is a component of GE Industrial free cash flows*) of $1.3 billion; and the provision of a promissory note to Baker Hughes in the third quarter of 2017 of $1.1 billion; partially offset by the purchase of an aviation technology joint venture of $0.6 billion in 2018.

·	~~See Note 26 to the consolidated financial statements for further information regarding cash sources and uses as well as non-cash adjustments to net income reported as All other operating activities.~~

GE ~~2016 FORM 10-K 83~~cash from financing activities was $1.5 billion in 2018 compared with $1.9 billion in 2017. The $0.4 billion decrease was primarily due to: a decrease in net borrowings of $7.9 billion, mainly as a result of the issuance of long-term euro debt, primarily to fund acquisitions in 2017; and the acquisition of Alstom's interest in grid technology, renewable energy, and global nuclear and French steam power joint ventures for $3.1 billion in 2018. These decreases in cash were partially offset by: a decrease in common dividends paid to shareholders of $4.2 billion; an increase in dispositions of noncontrolling interests in Baker Hughes of $4.1 billion; and a decrease in net repurchases of GE treasury shares of $2.5 billion.

GE CASH FLOWS FROM DISCONTINUED OPERATIONS.GE cash used for operating activities of discontinued operations was an insignificant amount in 2019 compared with cash generated of $2.1 billion in 2018. The $2.1 billion decrease was primarily as a result of the dispositions of Baker Hughes in the third quarter of 2019 and our Transportation segment in the first quarter of 2019, due to the nonrecurrence of operating cash generated in 2018, primarily in the fourth quarter.

GE cash used for investing ~~activities-continuing~~activitiesof discontinued operations ~~increased $6.9~~ was $3.4 billion in 2019 compared with $0.7 billion in 2018. The $2.8 billion increase in cash used was primarily due to the ~~following:~~deconsolidation of Baker Hughes cash of $3.1 billion as a result of the reduction in our ownership interest in the third quarter of 2019.

Higher business acquisition activity of $8.3 billion primarily driven by the 2015 acquisition of Alstom for $10.1 billion. This compares to the 2014 acquisitions of certain Thermo Fisher Scientific Inc. life-sciences business for $1.1 billion, Cameron's Reciprocating Compression Division for $0.6 billion and API Healthcare (API) for $0.3 billion. Partially offset by;

·	Higher proceeds from principal business dispositions of $1.1 billion in 2015, primarily relating to Signaling of $0.8 billion and Intelligent Platforms Embedded Systems Products of $0.5 billion in 2015, compared to $0.6 billion of proceeds from principal business dispositions in 2014.

GE cash used for financing ~~activities-continuing~~activitiesof discontinued operations ~~increased $1.5~~ was $0.4 billion in 2019 compared with $4.5 billion in 2018. The $4.1 billion decrease of cash used was primarily due to: the nonrecurrence of Baker Hughes share repurchases of $2.5 billion in 2018; and an increase in Baker Hughes borrowings of $0.3 billion in 2019 compared with net repayments of Baker Hughes borrowings of $1.1 billion in 2018.

GE cash from operating activities of discontinued operations was $2.1 billion in 2018 compared with cash used of $0.2 billion in 2017. The $2.2 billion increase in cash was primarily as a result of better operating performance at Baker Hughes.

GE cash used for investing activitiesof discontinued operations was $0.7 billion in 2018 compared with cash generated of $2.3 billion in 2017. The $3.0 billion increase in cash used was primarily due to: a decrease in net cash received from continuing operations of $6.6 billion, primarily ~~due~~related to funding in the ~~following:~~first half of 2017 in order to complete the Baker Hughes acquisition; partially offset by the nonrecurrence of net cash paid for the Baker Hughes acquisition of $3.4 billion in 2017.

*Non-GAAP Financial Measure

GE2019 FORM 10-K 32

·
	~~The 2015 repayment of $2.0 billion of GE unsecured notes, partially offset by;~~
MD&A	CAPITAL RESOURCES AND LIQUIDITY

·	~~The 2015 issuance of unsecured notes of $3.4 billion compared to $3.0 billion in 2014.~~

GE cash used for financing activitiesof discontinued operations was $4.5 billion in 2018 compared with cash generated of $3.5 billion in 2017. The $8.0 billion increase in cash used was primarily due to: net repayments of Baker Hughes borrowings of $1.1 billion in 2018 compared with net new debt of $4.7 billion in 2017, including the issuance of long-term debt of $4.0 billion and a promissory note received from GE of $1.1 billion; and an increase in Baker Hughes share repurchases of $2.0 billion.

GE CAPITAL CASH FLOWS

~~(Dollars in billions)~~

OPERATING CASH FLOWS INVESTING CASH FLOWS FINANCING CASH FLOWS

2014 2015 2016 2014 2015 2016 2014 2015 2016

~~2016 – 2015 COMMENTARY~~

FROM CONTINUING OPERATIONS.GE Capital cash from operating activities ~~decreased $3.1~~ was $1.9 billion in 2019 compared with $1.6 billion in 2018. The increase of $0.3 billion was primarily due ~~to the following:~~to: a net increase in cash collateral received and settlements paid from counterparties on derivative contracts of $2.0 billion; partially offset by a general decrease in cash generated from earnings (loss) from continuing operations.

·	~~Higher net income tax payments of $2.6 billion.~~

·	~~Higher cash paid for interest reflecting excess interest expense, and costs associated with the February and May 2016 debt tenders.~~

·	~~These decreases were partially offset by a net increase in cash collateral received from counterparties on derivative contracts of $1.7 billion.~~

·	~~See Note 26 to the consolidated financial statements regarding All other operating activities.~~

~~GE 2016 FORM 10-K 84~~

GE Capital cash from investing activities ~~decreased $12.2~~ was $9.5 billion in 2019 compared with $11.8 billion in 2018. The decrease of $2.3 billion was primarily due to: lower collections of financing receivables of $6.6 billion; an increase of net purchases of investment securities of $4.2 billion; lower net sales of equity investments of $3.1 billion; and an increase in cash used related to net settlements between our continuing operations (primarily our Corporate function) and businesses in discontinued operations (primarily WMC) of $2.4 billion; partially offset by the ~~following:~~nonrecurrence of intercompany loans from GE Capital to GE of $6.5 billion in 2018; an increase in cash related to our current receivables and supply chain finance programs with GE of $4.4 billion; higher proceeds from business dispositions $1.9 billion; and the repayment of GE Capital intercompany loans by GE of $1.5 billion in 2019.

·	~~Net proceeds from the sales of our CLL, Consumer and Real Estate businesses of $59.9 billion compared to $79.6 billion in 2015.~~

·	~~Liquidity investments of $11.5 billion purchased in 2016.~~

·	~~Net cash received from derivative settlements of $0.4 billion compared to $4.4 billion in 2015.~~

·	An increase in net financing receivables of $1.5 billion, including $4.3 billion in additions, partially offset by $2.1 billion received from the refinancing of our Receivables Facility and proceeds from the sale of receivables purchased from our Appliances business of $0.8 billion in 2016.

·	~~A short-term loan from GE Capital to GE with remaining principal of $1.3 billion in 2016 (the loan was fully repaid in January 2017).~~

·	~~These decreases were partially offset by the following increases:~~

·	~~Investment and maturity of $20.8 billion related to high quality interest bearing deposits reflecting an investment of $10.4 billion in 2015 that matured in 2016.~~

·	~~Other investing activities of $3.9 billion, primarily due to a reduction in net additions to property, plant & equipment of $1.6 billion and an increase in aircraft deposits received of $1.5 billion.~~

·	~~The 2015 acquisition of Milestone Aviation Group resulting in net cash paid of $1.7 billion.~~

GE Capital cash used for financing activities ~~increased $15.0~~ was $7.0 billion in 2019 compared with $23.9 billion in 2018. The decrease of $16.9 billion was primarily due to ~~the following:~~lower net repayments of borrowings of $11.4 billion; a capital contribution from GE to GE Capital of $4.0 billion; and lower cash settlements on derivatives hedging foreign currency debt of $1.4 billion.

·	~~GE Capital paid common dividends to GE totaling $20.1 billion compared to $4.3 billion in 2015, partially offset by;~~

·	~~Lower net repayments of borrowings of $58.8 billion compared to $59.3 billion in 2015, reflecting $2.1 billion of repayments resulting from the refinancing of our Receivables Facility in 2016.~~

~~2015 – 2014 COMMENTARY~~

GE Capital cash from operating activities ~~decreased $4.7~~was $1.6 billion in 2018 compared with $2.4 billion in 2017. The decrease of $0.8 billion was primarily due to:a net increase in cash collateral and settlements paid to ~~the following:~~counterparties on derivative contracts of $1.5 billion; partially offset by a general increase in cash generated from earnings (loss) from continuing operations.

·	~~Net decrease in cash collateral received from counterparties on derivative contracts of $3.0 billion.~~

·	~~A decrease in accounts payable of $0.4 billion.~~

·	~~See Note 26 to the consolidated financial statements regarding All other operating activities.~~

GE Capital cash from investing activities ~~increased $49.1~~was $11.8 billion in 2018 compared with $8.2 billion in 2017. The increase of $3.5 billion was primarily due to: higher collections of financing receivables of $7.1 billion and proceeds from the sales of EFS' debt origination business and EFS equity investments of $6.1 billion in 2018; partially offset by a decrease in net investment securities of $4.6 billion: $2.5 billion in 2018 compared with $7.1 billion in 2017; an increase in net additions to ~~the following:~~property, plant and equipment of $1.6 billion; net proceeds from sales of discontinued operations of an insignificant amount in 2018 compared with $1.5 billion in 2017; an increase in net intercompany loans from GE Capital to GE of $6.5 billion in 2018 compared with $5.9 billion in 2017 and a general reduction in funding related to discontinued operations.

·	~~In 2015, we closed the sales of certain of our CLL, Real Estate and Consumer businesses for proceeds of $35.2 billion, $27.7 billion and $16.7 billion, respectively.~~

·	~~These increases were partially offset by the following decreases:~~

·	~~2015 investment of $10.4 billion in high quality interest bearing deposits (with a maturity date of April 2016).~~

·	~~Aircraft deposits received of $0.1 billion compared to $2.3 billion in 2014.~~

·	~~The net cash payment of $1.7 billion for the 2015 acquisition of Milestone Aviation Group.~~

·	~~Net activity from equity method investments of $1.4 billion compared to $0.3 billion in 2014.~~

GE Capital cash used for financing activities ~~increased $27.7~~was $23.9 billion in 2018 compared with $23.6 billion in 2017. The increase of $0.3 billion was primarily due ~~to the following:~~

·	~~Higher net repayments of borrowings of $25.7~~to: higher net repayments of borrowings of $21.1 billion ~~primarily driven by an increase in short-term and long-term debt maturities of $59.3 billion compared to $33.6 billion in 2014.~~

·	~~GE Capital paid higher common dividends to GE totaling $4.3 billion compared to $3.0 billion in 2014.~~

~~GE 2016 FORM 10-K 85~~

~~GE CAPITAL DISCONTINUED OPERATIONS CASH FLOWS~~

~~(Dollars~~ in ~~billions)~~

OPERATING CASH FLOWS

INVESTING CASH FLOWS

FINANCING CASH FLOWS

2014

2015

2016

2014

2015

2016

2014

2015

2016

~~2016 – 2015 COMMENTARY – DISCONTINUED OPERATIONS:~~

2018 compared with $19.0 billion in 2017 and a net increase in derivative cash settlements paid of $2.0 billion partially offset by no GE Capital ~~cash from operating activities-discontinued operations decreased $14.3~~common dividends paid to GE in 2018 compared with $4.0 billion ~~primarily due to the following:~~in 2017.

Lower cash generated as a result of certain dispositions in our CLL business of $9.9 billion and Consumer business of $5.9 billion (primarily resulting from the 2015 split-off of Synchrony Financial), partially offset by our Real Estate business of $2.4 billion. In connection with the GE Capital Exit Plan, we closed a vast majority of our Consumer business and substantially all of our CLL and Real Estate business dispositions in 2015 and 2016.

·	~~Lower cash paid for interest, partially offset by higher net income tax payments that are included in the above.~~

~~GE Capital cash used for investing activities-discontinued operations increased $11.4 billion, primarily due to the following:~~

·	~~The sale of bank deposits for $16.5 billion in net cash paid in conjunction with the sale of GE Capital Bank's U.S. online deposit platform during 2016.~~

·	~~The sale of bank deposits and other investments for $1.1 billion in net cash paid related to our Consumer platform during 2016.~~

These increases were partially offset by Other investing activities of $6.2 billion, primarily higher net cash received on investment securities of $3.5 billion (including the sale of investment securities resulting from the split-off of Synchrony Financial) and cash generated from 2015 collections of financing receivables and other investing assets prior to disposition of the underlying business.

~~GE Capital cash used for financing activities-discontinued operations decreased $7.3 billion, primarily due to the following:~~

·	Lower repayments of borrowings of $9.3 billion as a result of certain dispositions in our Consumer (including the 2015 split-off of Synchrony Financial), CLL and Real Estate businesses, partially offset by;

·	~~Other financing activities of $2.1 billion primarily newly issued debt of $1.5 billion in 2016.~~

~~2015 – 2014 COMMENTARY – DISCONTINUED OPERATIONS:~~

~~GE Capital cash from operating activities-discontinued operations decreased $3.6 billion, primarily due to the following:~~

Lower cash generated as a result of certain dispositions in our Consumer business of $2.4 billion, CLL business of $1.2 billion and our Real Estate business of $0.3 billion. In connection with the GE Capital Exit Plan, we closed a vast majority of our Real Estate business dispositions in 2015 and split-off of Synchrony Financial in 2015.

·	~~Included in the above were lower net income tax payments of $1.0 billion.~~

~~GE Capital cash used for investing activities-discontinued operations decreased $22.1 billion, primarily due to the following:~~

A decrease in net investing activities of $20.0 billion primarily related to decreased financing receivables, a reduction in net additions to property, plant and equipment and decreased investment in other assets (including the 2015 split-off of Synchrony Financial) as a result of certain dispositions in connection with the GE Capital Exit Plan in 2015.

·	~~Lower cash used for purchases of investment securities of $2.1 billion.~~

~~GE 2016 FORM 10-K 86~~

~~GE Capital cash from financing activities-discontinued operations decreased $30.4 billion, primarily due to the following:~~

·	Higher net repayments of borrowings of $17.5 billion as a result of certain 2015 dispositions in our Consumer (including the 2015 split-off of Synchrony Financial), CLL and Real Estate businesses in connection with the GE Capital Exit Plan.

·	~~Cash proceeds from bank deposits of $0.5 billion compared to $10.5 billion in 2014 (including the 2015 split-off of Synchrony Financial).~~

·	~~Proceeds from the initial public offering of Synchrony Financial in 2014 of $2.8 billion.~~

INTERCOMPANY TRANSACTIONS BETWEEN GE AND GE ~~CAPITAL~~

We are repositioning GE to be the world's best infrastructure and technology company, with a smaller financial services division. Our focus is on driving infrastructure leadership, investing in innovation and achieving a culture of simplification to better serve our customers around the world. Over the last decade, we have made significant strides in transforming our portfolio and focusing on our industrial leadership. We have grown our infrastructure platforms with major portfolio moves, investing in adjacencies and pursuing opportunities that are closelyCAPITAL.Transactions between related ~~to our core.~~

In parallel, we have made a concentrated effort to reduce the size of our GE Capital business and align its growth with Industrial earnings. As a result, GE Capital vertical businesses are now focused on investing financial, human and intellectual capital to promote growth for our industrial businesses and their customers. GE Capital accomplishes this in part through related party transactions with GE thatcompanies are made on ~~an arms-length basis~~arm's length terms and are reported in the GE and GE Capital columns of our financial statements, ~~but are eliminated in deriving~~which we believe provide useful supplemental information to our consolidated financial statements. ~~These transactions include, but are not limited~~See Note 25 to the ~~following:~~consolidated financial statements for further information.

·	~~GE Capital dividends to GE,~~

·	~~GE Capital working capital solutions to optimize GE cash management,~~

·	~~GE Capital enabled GE industrial orders, and~~

·	~~Aircraft engines, power equipment and healthcare equipment manufactured by GE that are installed on GE Capital investments, including leased equipment.~~

~~In addition to the above transactions that primarily enable growth for the GE businesses, there are routine related party transactions, which include, but are not limited to, the following:~~

·	~~Expenses related to parent-subsidiary pension plans,~~

·	~~Buildings and equipment leased between GE and GE Capital, including sale-leaseback transactions,~~

·	~~Information technology (IT) and other services sold to GE Capital by GE, and~~

·	~~Various investments, loans and allocations of GE corporate overhead costs.~~

~~CASH FLOWS~~

~~GE Capital paid $20.1 billion, $4.3 billion and $3.0 billion~~Sales of ~~common dividends to GE in the years ended December 31, 2016, 2015 and 2014, respectively. In January 2017, GE received an additional $2.0 billion of common dividends from GE Capital.~~

Receivables. In order to manage short-term liquidity and credit exposure, GE ~~sells~~may sell current receivables to GE Capital and other third parties in part to fund the growth of our industrial businesses. These transactions can result in cash generation or cash use. During any given period, GE receives cash from the sale ofcustomer receivables to GE Capital and other third parties. ~~GE also leverages GE Capital for its expertise in receivables collection services and sales of receivables to GE Capital~~These transactions are made on an arm's length ~~basis. The incremental amount~~terms and any discount related to time value of ~~cash received from sales of receivables represents~~money, is recognized within the ~~cash generated or used~~respective GE Industrial business in the period ~~relating to this activity. The incremental cash generated in GE CFOA from current~~these receivables were sold to GE Capital ~~including current receivables subsequently sold to~~or third ~~parties, increased GE's CFOA by $2.1 billion, $2.1 billion and $1.6 billion in 2016, 2015 and 2014, respectively.~~

As of December 31, 2016, GE Capital had approximately $12.3 billion recorded on its balance sheet related to current receivables purchased from GE. Of these amounts, approximately half had been sold by GE to GE Capital with recourse (i.e., the GE business retains the risk of default). The evaluation of whether recourse transactions qualify for accounting derecognition is based, in part, upon the legal jurisdiction of the sale; as such, the majority of recourse transactions outside the U.S. qualify for sale treatment. Claims by GE Capital on receivables sold with recourse to GE have not been significant for the years ended December 31, 2016, 2015 and 2014.

~~GE 2016 FORM 10-K 87~~

In December 2016, GE Capital entered into a Receivables Facility with members of a bank group, designed to provide extra liquidity to GE. The Receivables Facility allows us to sell eligible current receivables on a non-recourse basis for cash and a deferred purchase price to members of the bank group. The purchase commitment of the bank group at December 31, 2016 was $3.0 billion.parties. See Note 224 to the consolidated financial statements for further information.

~~ENABLED ORDERS~~Supply Chain Finance Programs. GE facilitates voluntary supply chain finance programs with third parties which provide participating GE suppliers the opportunity to sell their GE receivables to third parties at the sole discretion of both the suppliers and the third parties. The terms of these programs do not alter GE’s obligations to its suppliers which arise from independently negotiated contractual supply agreements. GE's obligation remains limited to making payment on its supplier invoices on the terms originally negotiated with its suppliers, regardless of whether the supplier sells its receivable to a third party. GE has guaranteed the program providers that its participating affiliates will pay their supplier invoices on the terms originally negotiated with their suppliers.

~~Enabled orders represent~~At December 31, 2019 and 2018, included in GE's accounts payable is $2.4 billion and $0.4 billion, respectively, of supplier invoices that are subject to the ~~act of introducing, elevating~~third-party programs. GE accounts for all payments made under the programs as reductions to CFOA. Total GE supplier invoices paid through these third-party programs were $1.4 billion and ~~influencing customers~~an insignificant amount for the years ended December 31, 2019 and ~~prospects~~2018, respectively.

GE2019 FORM 10-K 33



MD&A	CAPITAL RESOURCES AND LIQUIDITY

Previously, GE Capital operated a supply chain finance program for suppliers to GE’s industrial businesses. Under that ~~result~~program, GE Capital may settle GE’s industrial businesses supplier invoices early in ~~an industrial sale, potentially coupled~~return for early pay discounts. In turn, GE settled invoices with ~~programmatic captive financing or driving incremental products or services across~~GE Capital in accordance with the original supplier payment terms. On February 28, 2019, GE ~~Store. During~~Capital sold the program platform to MUFG Union Bank, N.A. (MUFG) and is transitioning GE’s suppliers to a MUFG supply chain finance program. Information for suppliers which have already transitioned from GE Capital to MUFG is included within the third-party supply chain finance program data presented above. For the year ended December 31, ~~2016,~~2019, there was not a significant effect on GE CFOA related to the MUFG transition.

The GE funded participation in the GE Capital ~~enabled $13.4~~program will continue to be settled following the original invoice payment terms with an expectation that the transition be completed by the end of 2020. The GE liability associated with the funded participation in the program is presented as accounts payable and amounted to $2.1 billion of and $4.4 billion at December 31, 2019 and 2018, respectively.

GE ~~industrial orders, primarily with our Power ($6.9 billion), Renewable Energy ($4.8 billion) and Healthcare ($0.9 billion) businesses.~~

~~AVIATION~~

Capital Finance Transactions. During the years ended December 31, ~~2016~~2019 and ~~2015,~~2018, GE Capital acquired 44from third parties 51 aircraft ~~(list price totaling $6.5 billion) and 56 aircraft (list~~with a list price totaling $6.4 ~~billion),~~billion and 64 aircraft with a list price totaling $7.8 billion, respectively, ~~from third parties~~ that will be leased to others ~~which~~and are powered by engines ~~that were~~ manufactured by GE Aviation and affiliates. GE Capital also made payments to GE Aviation and affiliates related to spare engines and engine parts of $0.7 billion and $0.4 billion, which included $0.6 billion and $0.2 billion to CFM International, during the years ended December 31, 2019 and 2018, respectively. Additionally, GE Capital had ~~$1.5~~$2.0 billion and ~~$1.1~~$1.2 billion of net book value of engines, originally manufactured by GE Aviation and affiliates and subsequently leased back to GE Aviation and affiliates at December 31, ~~2016~~2019 and ~~2015,~~2018, respectively.

~~PENSIONS~~

GE Capital is a member of certain GE Pension Plans. As a result of the GE Capital Exit Plan, GE Capital will have additional funding obligations for these pension plans. These obligations do not relate to the Verticals and are recognized as an expense in GE Capital's other continuing operations when they become probable and estimable. The additional funding obligations recognized by GE Capital were $0.6 billion and $0.2 billion forAlso, during the years ended December 31, ~~2016~~2019 and ~~2015, respectively.~~2018, GE recognized equipment revenues of $1.6 billion and $1.0 billion, respectively, from customers within our Power and Renewable Energy segments in which GE Capital has been an investee or is committed to be an investee in the underlying projects.

~~Certain of this additional funding is recorded as a contra expense for GE and GE's related future pension obligations will be paid by GE Capital.~~ For certain other pension plan funding obligations triggered by the GE Capital Exit Plan, GE agreed to assume the funding obligation that would have been triggered by GE Capital at the date of exit from the plan in exchange for an assumption fee that GE recorded as Other income. The total cash transferred to GE for the assumption of these ~~GE Capital funding obligations was $0.2 billion and $0.1 billion for the years ended December 31, 2016 and 2015, respectively.~~

On a consolidated basis, the additional required pension funding and any related assumption fees do not affect current period earnings. Any additional required pension funding will be reflected as a reduction of the pension liability when paid.

~~GE GUARANTEE OF GE CAPITAL THIRD-PARTY TRANSACTIONS~~

~~In certain instances, GE provides guarantees to GE Capital transactions with third parties primarily~~investments, in ~~connection with enabled orders. In~~ order to meet its underwriting criteria, GE Capital may obtain a direct guarantee from GE related to the performance of the third party. GE guarantees ~~can take many forms and may~~ include ~~but not be limited to,~~ direct performance or payment guarantees, return on investment guarantees and asset value ~~guarantees and loss pool arrangements.~~guarantees. As of December 31, ~~2016,~~2019, GE had outstanding guarantees to GE Capital on ~~$1.8~~$0.9 billion of funded exposure and ~~$0.5~~$1.0 billion of unfunded ~~commitments.~~commitments, which included guarantees issued by industrial businesses. The recorded ~~amount of~~contingent liability for these ~~contingent liabilities~~guarantees was ~~$0.1 billion~~insignificant as of December 31, ~~2016~~2019 and is ~~dependent upon~~based on individual transaction level defaults, losses and/or returns.

~~GE GUARANTEE OF CERTAIN GE CAPITAL DEBT~~

GE provides implicit and explicit support to GE Capital through commitments, capital contributions and operating support. As previously discussed, GE debt assumed from GE Capital in connection with the merger of GE Capital into GE was $58.8 billion, and GE guaranteed $47.5 billion of GE Capital debt at December 31, 2016. See Note 24 to the consolidated financial statements for additional information about the eliminations of intercompany transactions between GE and GE Capital.

~~GE 2016 FORM 10-K 88~~

CONTRACTUAL ~~OBLIGATIONS~~

OBLIGATIONS.As defined by reporting regulations, our contractual obligations for estimated future payments as of December 31, ~~2016,~~2019, follow.



(In billions)	Total		2020		2021-2022		2023-2024		Thereafter

Borrowings (Note 11)	$	90.9	$	23.6	$	15.9	$	8.4	$	42.9
Interest on borrowings	24.8		2.5		3.9		3.1		15.3
Purchase obligations(a)(b)	57.8		18.4		20.2		15.1		4.2
Insurance liabilities (Note 12)	39.7		2.4		4.1		4.1		29.0
Operating lease obligations (Note 7)	3.7		0.8		1.2		0.8		0.9
Other liabilities(c)	45.3		10.1		6.7		5.1		23.4
Contractual obligations of discontinued operations(d)	0.6		0.3		0.1		0.1		0.1

Payments due by period
2022 and
(In billions) Total 2017 2018-2019 2020-2021 thereafter

Borrowings (Note 10) $ 136.2 $ 32.6 $ 21.5 $ 24.9 $ 57.2
Interest on borrowings 42.5 3.7 5.9 4.8 28.1
Purchase obligations(a)(b) 56.8 21.3 12.8 13.5 9.2
Insurance liabilities (Note 11)(c) 11.1 1.3 1.9 1.5 6.4
Operating lease obligations (Note 27) 4.2 0.8 1.3 1.0 1.1
Other liabilities(d) 78.9 11.3 11.2 8.7 47.7
Contractual obligations of discontinued operations(e) 4.2 4.2 - - -


(a)	Included all take-or-pay arrangements, capital expenditures, contractual commitments to purchase equipment that will be leased to others, software acquisition/license commitments, ~~contractual minimum programming commitments~~ and ~~any contractually required cash payments for acquisitions.~~other purchase commitments.


(b)	Excluded funding commitments entered into in the ordinary course of business. See Notes ~~20 and~~ 23 to the consolidated financial statements for further information on these commitments and other guarantees.


(c)	Included contracts with reasonably determinable cash flows such as structured settlements, guaranteed investment contracts, and certain property and casualty contracts, and excluded long-term care, variable annuity and other life insurance contracts.

~~(d)~~

Included an estimate of future expected funding requirements related to our postretirement benefit plans and included liabilities for unrecognized tax benefits. Because their future cash outflows are uncertain, the following non-current liabilities are excluded from the table above: derivatives, deferred ~~revenue~~income and other sundry items. See Notes ~~14, 20~~13, 15 and 2921 to the consolidated financial statements for further information on certain of these items.

~~(e)~~
(d)	Included payments for other liabilities.

~~GE 2016 FORM 10-K 89~~

CRITICAL ACCOUNTING ~~ESTIMATES~~

ESTIMATES.Accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to an understanding of our financial statements because they involve significant judgments and uncertainties. Many of these estimates include determining fair value. All of these estimates reflect our best judgment about current, and for some estimates future, economic and market conditions and their potential effects based on information available as of the date of these financial statements. If these conditions change from those expected, it is reasonably possible that the judgments and estimates described below could change, which may result in future impairments of investment securities, goodwill, intangibles and long-lived assets, incremental losses on financing receivables, increases in reserves for contingencies, establishment of valuation allowances on deferred tax assets and increased tax liabilities, among other effects. Also seeSee Note 1 to the consolidated financial statements ~~which discusses~~for further information on our most significant accounting policies.

REVENUE RECOGNITION ON LONG-TERM ~~PRODUCT~~ SERVICES ~~AGREEMENTS~~

~~Revenue recognition~~AGREEMENTS.We have long-term service agreements with our customers predominately within our Power and Aviation segments that require us to maintain the customers’ assets over the contract terms, which generally range from 5 to 25 years. However, contract modifications that extend or revise contracts are not uncommon. We recognize revenue as we perform under the arrangements using the percentage of completion method which is based on ~~long-term product services agreements~~our costs incurred to date relative to our estimate of total expected costs. This requires us to make estimates of ~~profits~~customer payments expected to be received over the ~~multiple-year terms~~contract term as well as the costs to perform required maintenance services.

GE2019 FORM 10-K 34



MD&A	CRITICAL ACCOUNTING ESTIMATES

Customers generally pay us based on the utilization of ~~such agreements, considering factors~~the asset (per hour of usage for example) or upon the occurrence of a major event within the contract such as an overhaul. As a result, a significant estimate in determining expected revenues of a contract is estimating how customers will utilize their assets over the ~~frequency~~term of the agreement. The estimate of utilization, which can change over the contract life, impacts both the amount of customer payments we expect to receive and our estimate of future contract costs. Customers’ asset utilization will influence the timing and extent of overhauls and other service events over the life of the contract. We generally use a combination of both historical utilization trends as well as forward-looking information such as market conditions and potential asset retirements in developing our revenue estimates.

To develop our cost estimates, we consider the timing and extent of future ~~monitoring,~~ maintenance and overhaul ~~events;~~events, including the amount and cost of ~~personnel,~~labor, spare parts and other resources required to perform the ~~services;~~services. In developing our cost estimates, we utilize a combination of our historical cost experience and expected cost improvements. Cost improvements are only included in future ~~billing rate,~~ cost ~~changes and customers' utilization of assets.~~ estimates after savings have been observed in actual results or proven effective through an extensive regulatory or engineering approval process.

We routinely review estimates under ~~product~~long-term services agreements and regularly revise them to adjust for changes in outlook. These revisions are based on objectively verifiable information that is available at the time of the review. Contract modifications that change the rights and obligations, as well as the nature, timing and extent of future cash flows, are evaluated for potential price concessions, contract asset impairments and significant financing to determine if adjustments of earnings are required before effectively accounting for modified contract as a new contract.

We ~~also~~ regularly assess expected billings adjustments and customer credit risk inherent in the carrying amounts of receivables and contract ~~costs and estimated earnings,~~assets, including the risk that contractual penalties may not be sufficient to offset our accumulated investment in the event of customer termination. We gain insight into future utilization and cost trends, as well as credit risk, through our knowledge of the installed base of equipment and the close interaction with our customers that comes with supplying critical services and parts over extended periods. Revisions may affect a ~~product~~long-term services ~~agreement's~~agreement’s total estimated profitability resulting in an adjustment of ~~earnings; such adjustments increased earnings~~earnings.

On December 31, 2019, our net long-term service agreements balance of $5.1 billion represents approximately 2.9% of our total estimated life of contract billings of $176.7 billion. Our contracts (on average) are approximately 22.2% complete based on costs incurred to date and our estimate of future costs. Revisions to our estimates of future billings or costs that increase or decrease total estimated contract profitability by ~~$2.2 billion, $1.4~~one percentage point would increase or decrease the long-term service agreements balance by $0.4 billion. Cash billings collected on these contracts were $11.5 billion and ~~$1.0~~$10.2 billion ~~in 2016, 2015~~during the years ended December 31, 2019 and ~~2014,~~2018, respectively. ~~We provide for probable losses when they become evident.~~

See Notes 1 and 9 to the consolidated financial statements for further information.

~~ASSET~~ IMPAIRMENT

~~Asset impairment assessment involves various estimates and assumptions as follows:~~

~~INVESTMENTS~~

We regularly review investment securities for impairment using both quantitative and qualitative criteria. For debt securities, if we do not intend to sell the security and it is not more likely than not that we will be required to sell the security before recovery of our amortized cost, we evaluate other qualitative criteria to determine whether a credit loss exists, such as the financial health of and specific prospects for the issuer, including whether the issuer is in compliance with the terms and covenants of the security. Quantitative criteria include determining whether there has been an adverse change in expected future cash flows. For equity securities, our criteria include the length of time and magnitude of the amount that each security is in an unrealized loss position. Our other-than-temporary impairment reviews involve our finance, risk and asset management functions as well as the portfolio management and research capabilities of our internal and third-party asset managers. See Note 1 to the consolidated financial statements, which discusses the determination of fair value of investment securities.

~~See Notes 1 and 3 to the consolidated financial statements for further information about actual and potential impairment losses.~~

~~GE 2016 FORM 10-K 90~~

~~LONG-LIVED ASSETS~~

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment has occurred typically requires various estimates and assumptions, including determining which undiscounted cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount, and the asset's residual value, if any. In turn, measurement of an impairment loss requires a determination of fair value, which is based on the best information available. We derive the required undiscounted cash flow estimates from our historical experience and our internal business plans. To determine fair value, we use quoted market prices when available, our internal cash flow estimates discounted at an appropriate discount rate and independent appraisals, as appropriate.

Our operating lease portfolio of commercial aircraft is a significant concentration of assets in Capital, and is particularly subject to market fluctuations. Therefore, we test recoverability of each aircraft in our operating lease portfolio at least annually. Additionally, we perform quarterly evaluations in circumstances such as when aircraft are re-leased, current lease terms have changed or a specific lessee's credit standing changes. We consider market conditions, such as global demand for commercial aircraft. Estimates of future rentals and residual values are based on historical experience and information received routinely from independent appraisers. Estimated cash flows from future leases are reduced for expected downtime between leases and for estimated costs required to prepare aircraft to be redeployed. Fair value used to measure impairment is based on management's best estimates which are benchmarked against third-party appraiser current market values for aircraft of similar type and age.

~~See Notes 7 and 23 to the consolidated financial statements for further information on impairment losses and our exposure to the commercial aviation industry.~~

OF GOODWILL AND OTHER IDENTIFIED INTANGIBLE ASSETS

~~We test~~. During 2019, and in order to improve alignment of our annual goodwill ~~for~~ impairment ~~annually in~~testing and strategic planning process, we changed our annual testing date from the third quarter ~~of each year using data as of July 1 of that year. The impairment test consists of two steps: in step one,~~to the ~~carrying value of the reporting unit is compared with its fair value; in step two, which is applied when the carrying value is more than its~~fourth quarter. We determine fair value the amount of goodwill impairment, if any, is derived by deducting the fair value of the reporting unit's assets and liabilities from the fair value of its equity, and comparing that amount with the carrying amount of goodwill. We determined fair values for each of the reporting units using the market approach, when available and appropriate, or the income approach, or a combination of both. We assess the valuation methodology based upon the relevance and availability of the data at the time we perform the valuation. If multiple valuation methodologies are used, the results are weighted appropriately.

Valuations using the market approach are derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses is based on the markets in which the reporting units operate giving consideration to risk profiles, size, geography, and diversity of products and services. A market approach is limited to reporting units for which there are publicly traded companies that have the characteristics similar to our businesses.

Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We use our internal forecasts to estimate future cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlook for each business. Actual results may differ from those assumed in our forecasts. We derive our discount rates using a capital asset pricing model and analyzing published rates for industries relevant to our reporting units to estimate the cost of equity financing. We use discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. Discount rates used in our annual reporting unit valuations ranged from ~~9.5%~~8.9% to ~~16.5%~~22.0%.

Estimating the fair value of reporting units requires the use of ~~estimates and~~ significant judgments that are based on a number of factors including actual operating ~~results.~~results, internal forecasts, market observable pricing multiples of similar businesses and comparable transactions, possible control premiums, determining the appropriate discount rate and long-term growth rate assumptions, and, if multiple approaches are being used, determining the appropriate weighting applied to each approach. It is reasonably possible that the judgments and estimates described above could change in future periods.

During the third quarter of 2016, we performed our annual impairment test of goodwill for all of our reporting units. Based on the results of our step one testing, the fair values of each of the GE reporting units exceeded their carrying values; therefore, the second step of the impairment test was not required to be performed for any of our reporting units and no goodwill impairment was recognized.

~~GE 2016 FORM 10-K 91~~

We review identified intangible assets with defined useful lives and subject to amortization for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment loss has occurred requires ~~comparing~~ the ~~carrying amount~~use of our internal forecast to ~~the sum of undiscounted~~estimate future cash flows ~~expected to be generated by~~and the ~~asset. We test intangible assets with indefinite lives annually for impairment using a~~useful life over which these cash flows will occur. To determine fair value, ~~method such as~~we use our internal cash flow estimates discounted ~~cash flows. For our insurance activities remaining in continuing operations, we periodically test for impairment our deferred acquisition costs and present value of future profits.~~at an appropriate discount rate.

See Notes 1 and 8 to the consolidated financial statements for further information.

~~BUSINESSES~~

GE2019 FORM 10-K 35



MD&A	CRITICAL ACCOUNTING ESTIMATES

INSURANCE AND ~~ASSETS HELD FOR SALE~~

~~Businesses and assets held~~INVESTMENT CONTRACTS.Refer to the Other Items - Insurance section within MD&A for ~~sale represent components that meet~~further discussion of the accounting ~~requirements to be classified as held for sale~~estimates and ~~are presented as single asset and liability amounts~~assumptions in our insurance reserves and their sensitivity to change. Also see Notes 1 and 12 to the consolidated financial statements with a valuation allowance, if necessary, to recognize the net carrying amount at the lower of cost or fair value, less cost to sell. Financing receivables that no longer qualify to be presented as held for ~~investment must be classified as assets held~~further information.

PENSION ASSUMPTIONS. Our defined benefit pension plans are accounted for ~~sale and recognized in our financial statements at the lower of cost or fair value, less cost to sell, with that amount representing a new cost~~on an actuarial basis, ~~at the date of transfer.~~

The determination of fair value for businesses and assets held for sale involves significant judgments and assumptions. Development of estimates of fair values in this circumstance is complex and is dependent upon, among other factors, the nature of the potential sales transaction (for example, asset sale versus sale of legal entity), composition of assets and/or businesses in the disposal group, the comparability of the disposal group to market transactions, negotiations with third party purchasers, etc. Such factors bear directly on the range of potential fair values andwhich requires the selection of ~~the best estimates. Key~~various assumptions, ~~were developed based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in~~including a ~~hypothetical transaction.~~

~~We review all businesses and assets held for sale each reporting period to determine whether the existing carrying amounts are fully recoverable in comparison to estimated fair values.~~

~~PENSION ASSUMPTIONS~~

~~Pension assumptions are significant inputs to the actuarial models that measure pension benefit obligations and related effects on operations. Two assumptions –~~ discount rate, ~~and~~an expected return on assets, ~~– are important elements~~mortality rates of ~~plan expense~~participants and ~~asset/liability measurement.~~expectation of mortality improvement. We evaluate these critical assumptions at least annually on a plan and country-specific basis. We periodically evaluate other assumptions involving demographic factors such as retirement age ~~mortality~~ and turnover, and update them to reflect our experience and expectations for the future. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors.

Projected benefit obligations are measured as the present value of expected payments. We discount those cash payments using the weighted average of market-observed yields for high-quality fixed-income securities with maturities that correspond to the payment of benefits. Lower discount rates increase present values and generally increase subsequent-year pension expense; higher discount rates decrease present values and generally reduce subsequent-year pension expense.

Our discount rates for principal pension plans at December 31, ~~2016, 2015~~2019, 2018 and ~~2014~~2017 were ~~4.11%~~3.36%, ~~4.38%~~4.34% and ~~4.02%~~3.64%, respectively, reflecting market interest rates.

~~GE 2016 FORM 10-K 92~~

To determine the expected long-term rate of return on pension plan assets, we consider ~~current and target~~our asset ~~allocations,~~allocation, as well as historical and expected returns on various categories of plan assets. In developing future long-term return expectations for our principal benefit ~~plans'~~plans’ assets, we formulate views on the future economic environment, both in the U.S. and abroad. We evaluate general market trends and historical relationships among a number of key variables that impact asset class returns such as expected earnings growth, inflation, valuations, yields and spreads, using both internal and external sources. We also take into account expected volatility by asset class and diversification across classes to determine expected overall portfolio results given ~~current and target allocations.~~our asset allocation. Assets in our principal pension plans earned ~~6.5%~~17.8% in ~~2016,~~2019, and had ~~average annual~~annualized returns of ~~7.8%~~6.3%, ~~4.0%,~~7.7% and ~~8.0% per year~~8.2% in the 5-, 10- and 25-year periods ended December 31, ~~2016,~~2019, respectively. ~~The average historical 10- and 25- year returns were significantly affected by investment losses in 2008.~~ Based on our analysis of future expectations of asset performance, past return results, and our ~~current and target~~ asset ~~allocations,~~allocation, we have assumed a ~~7.5%~~6.25% long-term expected return on those assets for cost recognition in ~~2017~~2020, as compared to 6.75% in 2019 and 2018.

The Society of Actuaries issued new base and improvement mortality tables in 2019 and we updated mortality assumptions in the ~~same as 2016~~U.S. accordingly. These changes in assumptions decreased the December 31, 2019 U.S. pension and ~~2015.~~retiree benefit plans' obligations by $0.5 billion.

Changes in key assumptions for our principal pension plans would have the following effects.

Discount rate – A 25 basis point decrease in discount rate would increase pension cost in the following year by about $0.2 billion and would increase the pension benefit obligation at year-end by about $2.3 billion.

·	Discount rate – A 25 basis point increase in discount rate would decrease pension cost in the following year by $0.2 billion and would decrease the pension benefit obligation at year-end by about $2.2 billion.

Expected return on assets – A 50 basis point decrease in the expected return on assets would increase pension cost in the following year by about $0.3 billion.

·	~~Expected return on assets – A 50 basis point decrease in the expected return on assets would increase pension cost in the following year by $0.2 billion.~~

See Other Consolidated Information – Postretirement Benefit Plans section within ~~the~~ MD&A and ~~Notes 12 and 29~~Note 13 to the consolidated financial statements for further ~~information on our pension plans.~~information.

INCOME ~~TAXES~~

TAXES.Our annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining our tax expense and in evaluating our tax positions, including evaluating uncertainties. We review our tax positions quarterly and adjust the balances as new information becomes available. Our income tax rate is significantly affected by the tax rate on our global operations. In addition to local country tax laws and regulations, this rate ~~depends~~can depend on the extent earnings are indefinitely reinvested outside the ~~United States.~~U.S. Historically U.S. taxes were due upon repatriation of foreign earnings. Due to the enactment of U.S. tax reform, most repatriations of foreign earnings will be free of U.S. federal income tax but may incur withholding or state taxes. Indefinite reinvestment is determined by ~~management's~~management’s judgment about and intentions concerning the future operations of the Company. ~~At December 31, 2016 and 2015, approximately $82 billion and $104 billion of earnings, respectively, have been indefinitely reinvested outside the United States.~~ Most of these earnings have been reinvested in active non-U.S. business ~~operations, and~~operations. At December 31, 2019, we dohave not ~~intend to repatriate these earnings to fund U.S. operations.~~ ~~Because~~changed our indefinite reinvestment decision as a result of ~~the availability of U.S. foreign~~ tax ~~credits, it is not practicable to determine the U.S. federal income tax liability that would be payable if such earnings were not reinvested indefinitely outside the United States.~~reform but will reassess this on an ongoing basis.

GE2019 FORM 10-K 36



MD&A	CRITICAL ACCOUNTING ESTIMATES

Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating loss and tax credit carryforwards. We evaluate the recoverability of these future tax deductions and credits by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income rely heavily on estimates. We use our historical experience and our short- and long-range business forecasts to provide insight. Further, our global and diversified business portfolio gives us the opportunity to employ various prudent and feasible tax planning strategies to facilitate the recoverability of future deductions. Amounts recorded for deferred tax assets related to non-U.S. net operating losses, net of valuation allowances, were ~~$3.1~~$2.2 billion and ~~$5.1~~$3.1 billion at December 31, ~~2016~~2019 and ~~2015,~~2018, including ~~$0.3~~$0.2 billion related to held for sale assets at December 31, 2019 and $0.2 billion and ~~$0.8~~$0.5 billion at December 31, ~~2016~~2019 and ~~2015,~~2018, respectively, ~~of deferred tax assets, net of valuation allowances,~~ associated with losses reported in discontinued operations, primarily related to our ~~Real Estate and Consumer~~legacy financial services businesses and for 2018, our ~~loss on the sale of GE Money Japan.~~Baker Hughes segment. Such year-end ~~2016~~2019 amounts are expected to be fully recoverable within the applicable statutory expiration periods. To the extent we ~~do not~~ consider it more likely than not that a deferred tax asset will not be recovered, a valuation allowance is established.

See Other Consolidated Information – Income Taxes section within ~~the~~ MD&A and Note 1415 to the consolidated financial statements for further ~~information on income taxes.~~information.

~~GE 2016 FORM 10-K 93~~

~~DERIVATIVES AND HEDGING~~

We use derivatives to manage a variety of risks, including risks related to interest rates, foreign exchange and commodity prices. Accounting for derivatives as hedges requires that, at inception and over the term of the arrangement, the hedged item and related derivative meet the requirements for hedge accounting. The rules and interpretations related to derivatives accounting are complex. Failure to apply this complex guidance correctly will result in all changes in the fair value of the derivative being reported in earnings, without regard to the offsetting changes in the fair value of the hedged item.

In evaluating whether a particular relationship qualifies for hedge accounting, we test effectiveness at inception and each reporting period thereafter by determining whether changes in the fair value of the derivative offset, within a specified range, changes in the fair value of the hedged item. If fair value changes fail this test, we discontinue applying hedge accounting to that relationship prospectively. Fair values of both the derivative instrument and the hedged item are calculated using internal valuation models incorporating market-based assumptions, subject to third-party confirmation, as applicable.

~~See Notes 1, 9, 20 and 29~~ ~~to the consolidated financial statements~~ ~~for further information about our use of derivatives.~~

~~FAIR VALUE MEASUREMENTS~~

Assets and liabilities measured at fair value every reporting period include investments in debt and equity securities and derivatives. Other assets and liabilities are subject to fair value measurements only in certain circumstances, including purchase accounting applied to assets and liabilities acquired in a business combination, impaired loans that have been reduced based on the fair value of the underlying collateral, cost and equity method investments and long-lived assets that are written down to fair value when they are impaired. Upon closing an acquisition, we estimate the fair values of assets and liabilities acquired and integrate the acquisition as soon as practicable. The size, scope and complexity of an acquisition will affect the time it takes to obtain the necessary information to record the acquired assets and liabilities at fair value. It may take up to one year to finalize the initial fair value estimates used in the preliminary purchase accounting. Accordingly, it is reasonably likely that our initial estimates will be subsequently revised, which could affect carrying amounts of goodwill, intangibles and potentially other assets and liabilities in our financial statements. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

A fair value measurement is determined as the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. The determination of fair value often involves significant judgments about assumptions such as determining an appropriate discount rate that factors in both risk and liquidity premiums, identifying the similarities and differences in market transactions, weighting those differences accordingly and then making the appropriate adjustments to those market transactions to reflect the risks specific to our asset being valued.

~~See Notes 1, 3, 8, 19, 20 and 29~~ ~~to the consolidated financial statements for further information on fair value measurements and related matters.~~

~~GE 2016 FORM 10-K 94~~

~~OTHER~~ LOSS ~~CONTINGENCIES~~

~~Other loss~~CONTINGENCIES.Loss contingencies are uncertain and unresolved matters that arise in the ordinary course of business and result from events or actions by others that have the potential to result in a future loss. Such contingencies include, but are not limited to, environmental obligations, litigation, regulatory investigations and proceedings, product quality and losses resulting from other events and developments.

When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss. When there appears to be a range of possible costs with equal likelihood, liabilities are based on the low-end of such range. However, the likelihood of a loss with respect to a particular contingency is often difficult to predict and determining a meaningful estimate of the loss or a range of loss may not be practicable based on the information available and the potential effect of future events and negotiations with or decisions by third parties that will determine the ultimate resolution of the contingency. Moreover, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated to determine both the likelihood of potential loss and whether it is possible to reasonably estimate a range of possible loss. ~~When~~Disclosure is provided for material loss contingencies when a loss is probable but a reasonable estimate cannot be made, ~~disclosure is provided.~~

~~Disclosure also is provided~~and when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. We regularly review ~~all~~ contingencies to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made. As discussed above, development of a meaningful estimate of loss or a range of potential loss is complex when the outcome is directly dependent on negotiations with or decisions by third parties, such as regulatory agencies, the court system and other interested parties. Such factors bear directly on whether it is possible to reasonably estimate a range of potential loss and boundaries of high and low estimates.

See Note 23 to the consolidated financial statements for further information.

~~GE 2016 FORM 10-K 95~~

OTHER ITEMS

INSURANCE. The run-off insurance operations of North American Life and Health (NALH) primarily include Employers Reassurance Corporation (ERAC) and Union Fidelity Life Insurance Company (UFLIC). ERAC was formerly part of Employers Reinsurance Corporation (ERC) until the sale of ERC to Swiss Re in 2006. UFLIC was formerly part of Genworth Financial Inc. (Genworth) but was retained by GE after Genworth’s initial public offering in 2004.

ERAC primarily assumes long-term care insurance and life insurance from numerous cedents under various types of reinsurance

treaties and stopped accepting new policies after 2008. UFLIC primarily assumes long-term care insurance, structured settlement

annuities with and without life contingencies and variable annuities from Genworth and has been closed to new business since 2004.

The vast majority of NALH’s reinsurance exposures are long-duration arrangements that still involve substantial levels of premium

collections and benefit payments even though ERAC and UFLIC have not entered into new reinsurance treaties in about a decade. These long-duration arrangements involve a number of direct writers and contain a range of risk transfer provisions and other contractual elements. In many instances, these arrangements do not transfer to ERAC or to UFLIC 100 percent of the risk embodied in the encompassed underlying policies issued by the direct writers. Furthermore, we cede insurance risk to third-party reinsurers for a portion of our insurance contracts, primarily on long-term care insurance policies.

Our run-off insurance liabilities and annuity benefits primarily comprise a liability for future policy benefits for those insurance contract claims not yet incurred and claim reserves for claims that have been incurred or are estimated to have been incurred but not yet reported. The insurance liabilities and annuity benefits amounted to $39.8 billion and $35.6 billion and primarily relate to individual long-term care insurance reserves of $21.0 billion and $20.0 billion and structured settlement annuities and life insurance reserves of $11.1 billion and $11.2 billion, at December 31, 2019 and December 31, 2018, respectively. The increase in insurance liabilities and annuity benefits of $4.2 billion from December 31, 2018 to December 31, 2019, is primarily due to an adjustment of $3.4 billion resulting from an increase in unrealized gains on investment securities that would result in a premium deficiency should those gains be realized and a $1.0 billion adjustment arising from the annual premium deficiency testing completed in third quarter 2019, as discussed further below.

In addition to NALH, Electric Insurance Company (EIC) is a property and casualty insurance company primarily providing insurance to GE and its employees with net claim reserves of $0.3 billion at December 31, 2019.

GE2019 FORM 10-K 37



MD&A	OTHER ITEMS

We regularly monitor emerging experience in our run-off insurance operations and industry developments to identify trends that may help us refine our reserve assumptions and evaluate opportunities to reduce our insurance risk profile and improve the results of our run-off insurance operations. These opportunities may include the pursuit of future premium rate increases and benefit reductions on long-term care insurance contracts with our ceding companies; recapture and reinsurance transactions to reduce risk where economically justified; investment strategies to improve asset and liability matching and enhance investment portfolio yields; and managing our expense levels.

Key Portfolio Characteristics

Long-term care insurance contracts. The long-term care insurance contracts we reinsure provide coverage at varying levels of benefits to policyholders and may include attributes that could result in claimants being on claim for longer periods or at higher daily claim costs, or alternatively limiting the premium paying period, compared to contracts with a lower level of benefits. For example, policyholders with a lifetime benefit period could receive coverage up to the specified daily maximum as long as the policyholder is claim eligible and receives care for covered services; inflation protection options increase the daily maximums to protect the policyholder from the rising cost of care with some options providing automatic annual increases of 3% to 5% or policyholder elected inflation-indexed increases for increased premium; joint life policies provide coverage for two lives which permit either life under a single contract to receive benefits at the same time or separately; and premium payment options may limit the period over which the policyholder pays premiums while still receiving coverage after premium payments cease, which may limit the impact of our benefit from future premium rate increases.

The ERAC long-term care insurance portfolio comprises more than two-thirds of our total long-term care insurance reserves and is assumed from approximately 30 ceding companies through various types of reinsurance and retrocession contracts having complex terms and conditions. Compared to the overall long-term care insurance block, it has a lower average attained age with a larger number of policies (and covered lives, as over one-third of the policies are joint life policies), with lifetime benefit periods and/or with inflation protection options which may result in a higher potential for future claims.

The UFLIC long-term care insurance block comprises the remainder of our total long-term care insurance reserves and is more mature with policies that are more uniform, as it is assumed from a single ceding company, Genworth, and has fewer policies with lifetime benefit periods, no joint life policies and slightly more policies with inflation protection options.

Long-term care insurance policies allow the issuing insurance entity to increase premiums, or alternatively allow the policyholder the option to decrease benefits, with approval by state regulators, should actual experience emerge worse than what was projected when such policies were initially underwritten. As a reinsurer, we are unable to directly or unilaterally pursue long-term care insurance premium rate increases. However, we engage actively with our ceding company clients in pursuing allowed long-term care insurance premium rate increases. The amount of times that rate increases have occurred varies by ceding company.

As further described within the Premium Deficiency Testing section below, we reconstructed our future claim cost projections in 2017 utilizing trends observed in our emerging experience for older claimant ages and later duration policies. Also described within that section are key assumption changes in 2019.

Presented in the table below are GAAP and statutory reserve balances and key attributes of our long-term care insurance portfolio.



December 31, 2019 (Dollars in billions, except where noted)	ERAC			UFLIC			Total

Gross GAAP future policy benefit reserves and claim reserves	$	15.2		$	5.8		$	21.0
Gross statutory future policy benefit reserves and claim reserves(a)	23.7			7.1			30.8
Number of policies in force	196,000			67,000			263,000
Number of covered lives in force	261,000			67,000			328,000
Average policyholder attained age	75			83			77
Gross GAAP future policy benefit reserve per policy (in actual dollars)	$	66,500		$	56,000		$	64,000
Gross GAAP future policy benefit reserve per covered life (in actual dollars)	50,000			56,000			51,000
Gross statutory future policy benefit reserve per policy (in actual dollars)(a)	109,000			74,000			100,000
Gross statutory future policy benefit reserve per covered life (in actual dollars)(a)	81,000			74,000			80,000
Percentage of policies with:
Lifetime benefit period	70		%	35		%	61		%
Inflation protection option	81		%	91		%	84		%
Joint lives	34		%	—		%	25		%
Percentage of policies that are premium paying	73		%	82		%	75		%
Policies on claim	10,700			9,300			20,000


(a)	Statutory balances reflect recognition of the estimated remaining statutory increase in reserves of approximately $7 billion through 2023 under the permitted accounting practice discussed further below and in Note 12 to our consolidated financial statements.

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Structured settlement annuities and life insurance contracts.We reinsure approximately 31,000 structured settlement annuities with an average attained age of 52. These structured settlement annuities were primarily underwritten on impaired lives (i.e., shorter-than-average life expectancies) at origination and have projected payments extending decades into the future. Our primary risks associated with these contracts include mortality (i.e., life expectancy or longevity), mortality improvement (i.e., assumed rate that mortality is expected to reduce over time), which may extend the duration of payments on life contingent contracts beyond our estimates, and reinvestment risk (i.e., a low interest rate environment may reduce our ability to achieve our targeted investment margins). Unlike long-term care insurance, structured settlement annuities offer no ability to require additional premiums or reduce benefits.

Our life reinsurance business typically covers the mortality risk associated with various types of life insurance policies that we reinsure from approximately 150 ceding company relationships where we pay a benefit based on the death of a covered life. Across our U.S. and Canadian life insurance blocks, we reinsure approximately $100 billion of net amount at risk (i.e., difference between the death benefit and any accrued cash value) from approximately 2.2 million policies with an average attained age of 58. In 2019, our incurred claims were approximately $0.5 billion with an average individual claim of approximately $48,000. The largest product types covered are 20-year level term policies which represent approximately 40% of the net amount at risk and are anticipated to lapse (i.e., the length of time a policy will remain in force) over the next 2 to 4 years as the policies reach the end of their 20-year level premium period.

Investment portfolio and other adjustments. Our insurance liabilities and annuity benefits are primarily supported by investment securities of $38.0 billion and $32.9 billion and commercial mortgage loans of $1.9 billion and $1.7 billion at December 31, 2019 and 2018, respectively. Additionally, we expect to purchase approximately $9 billion of new assets through 2024 in conjunction with expected capital contributions from GE Capital to our insurance subsidiaries, of which $2.0 billion was received in the first quarter of 2020. Our investment securities are classified as available-for-sale and comprise mainly investment-grade debt securities. The portfolio includes $5.7 billion of net unrealized gains that are recorded within Other comprehensive income, net of applicable taxes and other adjustments.

In calculating our future policy benefit reserves, we are required to consider the impact of net unrealized gains and losses on our available-for-sale investment securities supporting our insurance contracts as if those unrealized amounts were realized. To the extent that the realization of gains would result in a premium deficiency, an adjustment is recorded to increase future policy benefit reserves with an after-tax offset to Other comprehensive income. At December 31, 2019, the entire $5.7 billion balance of net unrealized gains on our investment securities required a related increase to future policy benefit reserves. This adjustment increased from $2.2 billion in 2018 to $5.7 billion in 2019 primarily from higher unrealized gains within the investment security portfolio supporting our insurance contracts in response to decreased market yields. See Note 3 to our consolidated financial statements for further information about our investment securities.

We manage the investments in our run-off insurance operations under strict investment guidelines, including limitations on asset class concentration, single issuer exposures, asset-liability duration variances, and other factors to meet credit quality, yield, liquidity and diversification requirements associated with servicing our insurance liabilities under reasonable circumstances. Investing in these assets exposes us to both credit risk (i.e., debtor’s ability to make timely payments of principal and interest) and interest rate risk (i.e., market price, cash flow variability, and reinvestment risk due to changes in market interest rates). We regularly review investment securities for impairment using both quantitative and qualitative criteria.

Additionally, our run-off insurance operations have approximately $0.7 billion of assets held by states or other regulatory bodies in statutorily required deposit accounts, and approximately $28.6 billion of assets held in trust accounts associated with reinsurance contracts in place between either ERAC or UFLIC as the reinsuring entity and a number of ceding insurers. Assets in these reinsurance trusts are held by an independent trustee for the benefit of the ceding insurer, and are subject to various investment guidelines as set forth in the respective reinsurance contacts.

We have studied and analyzed various options, along with several external investment advisors, to improve our investment yield subject to maintaining our ability to satisfy insurance liabilities when due, as well as considering our risk-based capital requirements, regulatory constraints, and tolerance for surplus volatility. With the expected capital contributions from GE Capital through 2024, we intend to add new asset classes to further diversify our portfolio, including private equity, senior secured loans and infrastructure debt, among others. We also hired a new Chief Investment Officer in 2018 to oversee our entire investment process and will be adding further investment managers.

Critical Accounting Estimates. Our insurance reserves include the following key accounting estimates and assumptions described below.

Future policy benefit reserves. Future policy benefit reserves represent the present value of future policy benefits less the present value of future gross premiums based on actuarial assumptions including, but not limited to, morbidity (i.e., frequency and severity of claim, including claim termination rates and benefit utilization rates); morbidity improvement (i.e., assumed rate of improvement in morbidity in the future); mortality (i.e., life expectancy or longevity); mortality improvement (i.e., assumed rate that mortality is expected to reduce over time); policyholder persistency or lapses (i.e., the length of time a policy will remain in force); anticipated premium increases or benefit reductions associated with future in-force rate actions, including actions that are: (a) approved and not yet implemented, (b) filed but not yet approved, and (c) estimated on future filings through 2028, on long-term care insurance policies; and interest rates. Assumptions are locked-in throughout the remaining life of a contract unless a premium deficiency develops.

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Claim reserves. Claim reserves are established when a claim is incurred or is estimated to have been incurred and represents our best estimate of the present value of the ultimate obligations for future claim payments and claim adjustment expenses. Key inputs include actual known facts about the claim, such as the benefits available and cause of disability of the claimant, as well as assumptions derived from our actual historical experience and expected future changes in experience factors. Claim reserves are evaluated periodically for potential changes in loss estimates with the support of qualified actuaries, and any changes are recorded in earnings in the period in which they are determined.

Reinsurance recoverables. We cede insurance risk to third-party reinsurers for a portion of our insurance contracts, primarily on long-term care insurance policies, and record receivables as we are not relieved from our primary obligation to policyholders or cedents. These receivables are estimated in a manner consistent with the future policy benefit reserves and claim reserves. Reserves ceded to reinsurers, net of allowance, were $2.4 billion and $2.3 billion at December 31, 2019 and December 31, 2018, respectively, and are included in the caption “Other GE Capital receivables” on our consolidated Statement of Financial Position.

Premium Deficiency Testing. We annually perform premium deficiency testing in the third quarter in the aggregate across our run-off insurance portfolio. The premium deficiency testing assesses the adequacy of future policy benefit reserves, net of unamortized capitalized acquisition costs, using current assumptions without provision for adverse deviation. A comprehensive review of premium deficiency assumptions is a complex process and depends on a number of factors, many of which are interdependent and require evaluation individually and in the aggregate across all insurance products. The vast majority of our run-off insurance operations consists of reinsurance from multiple ceding insurance entities pursuant to treaties having complex terms and conditions. Premium deficiency testing relies on claim and policy information provided by these ceding entities and considers the reinsurance treaties and underlying policies. In order to utilize that information for purposes of completing experience studies covering all key assumptions, we perform detailed procedures to conform and validate the data received from the ceding entities. Our long-term care insurance business includes coverage where credible claim experience for higher attained ages is still emerging, and to the extent future experience deviates from current expectations, new projections of claim costs extending over the expected life of the policies may be required. Significant uncertainties exist in making projections for these long-term care insurance contracts, which requires that we consider a wide range of possible outcomes.

The primary assumptions used in the premium deficiency tests include:

Morbidity. Morbidity assumptions used in estimating future policy benefit reserves are based on estimates of expected incidences of disability among policyholders and the costs associated with these policyholders asserting claims under their contracts, and these estimates account for any expected future morbidity improvement. For long-term care exposures, estimating expected future costs includes assessments of incidence (probability of a claim), utilization (amount of available benefits expected to be incurred) and continuance (how long the claim will last). Prior to 2017, premium deficiency assumptions considered the risk of anti-selection by including issue age adjustments to morbidity based on an actuarial assumption that long-term care policies issued to younger individuals would exhibit lower expected incidences and claim costs than those issued to older policyholders. Recent claim experience and the development of reconstructed claim cost curves indicated issue age differences had minimal impact on claim cost projections, and, accordingly, beginning in 2017, issue age adjustments were eliminated in developing morbidity assumptions. Higher morbidity increases, while lower morbidity decreases, the present value of expected future benefit payments.

Rate of Change in Morbidity. Our annual premium deficiency testing incorporates our best estimates of projected future changes in the morbidity rates reflected in our base cost curves. These estimates draw upon a number of inputs, some of which are subjective, and all of which are interpreted and applied in the exercise of professional actuarial judgment in the context of the characteristics specific to our portfolios. This exercise of judgment considers factors such as the work performed by internal and external independent actuarial experts engaged to advise us in our annual testing, the observed actual experience in our portfolios measured against our base projections, industry developments, and other trends, including advances in the state of medical care and health-care technology development. With respect to industry developments, we take into account that there are differences between and among industry peers in portfolio characteristics (such as demographic features of the insured populations), the aggregate effect of improvement or deterioration as applied to base claim cost projections, the extent to which such base cost projections reflect the most current experience, and the accepted diversity of practice in actuarial professional judgment. We assess the potential for any change in morbidity with reference to our existing base claim cost projections, reconstructed in 2017. Projected improvement or deterioration in morbidity can have a material impact on our future claim cost projections, both on a stand-alone basis and also by virtue of influencing other variables such as discount rate and premium rate increases.

Mortality. Mortality assumptions used in estimating future policy benefit reserves are based on published mortality tables as adjusted for the results of our experience studies and estimates of expected future mortality improvement. For life insurance products, higher mortality increases the present value of expected future benefit payments, while for annuity and long-term care insurance contracts, higher mortality decreases the present value of expected future benefit payments.

Discount rate. Interest rate assumptions used in estimating the present value of future policy benefit reserves are based on expected investment yields, net of related investment expenses and expected defaults. In estimating future yields, we consider the actual yields on our current investment securities held by our run-off insurance operations and the future rates at which we expect to reinvest any proceeds from investment security maturities, net of other operating cash flows, and the projected future capital contributions into our run-off insurance operations. Lower future yields result in a lower discount rate and a higher present value of future policy benefit reserves.

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Future long-term care premium rate increases. As a reinsurer, we rely upon the primary insurers that issued the underlying policies to file proposed premium rate increases on those policies with the relevant state insurance regulators, as we have no ability to seek or to institute such premium rate increases. We consider recent experience of rate increase filings made by our ceding companies along with state insurance regulatory processes and precedents in establishing our current expectations. Higher future premium rate increases lower the present value of future policy benefit reserves.

Terminations. Terminations refers to the rate at which the underlying policy is canceled due to either mortality, lapse (non-payment of premiums by a policyholder), or, in the case of long-term care insurance, benefit exhaustion. Termination rate assumptions used in estimating the present value of future policy benefit reserves are based on the results of our experience studies and reflect actuarial judgment. Lower termination rates increase, while higher termination rates decrease, the present value of expected future benefit payments.

In 2017, based on elevated claim experience for a portion of our long-term care insurance contracts, we initiated a comprehensive review of all premium deficiency testing assumptions across all insurance products, resulting in a reconstruction of our future claim cost projections for long-term care insurance products. Our internal claim experience has been consistent with those reconstructed projections, although the extent of actual experience since 2017 to date is limited in the context of a long-tailed, multi-decade portfolio.

2019 Premium Deficiency Testing. We annually perform premium deficiency testing in the aggregate across our run-off insurance portfolio. We performed this year’s testing in the third quarter of 2019, consistent with our historical practice prior to 2017 when we reconstructed our claim cost curves. These procedures included updating experience studies since our last test completed in the fourth quarter of 2018, independent actuarial analysis and review of industry benchmarks. As we experienced a premium deficiency in 2018, our 2019 premium deficiency testing started with a zero margin and, accordingly, any net adverse development would result in a future charge to earnings. Using our most recent future policy benefit reserve assumptions, including changes to our assumptions related to discount rate and future premium rate increases, we identified a premium deficiency resulting in a $1.0 billion pre-tax charge to earnings in the third quarter 2019. The increase to future policy benefit reserves resulting from our 2019 testing was primarily attributable to the significant decline in market interest rates we observed this year, which has resulted in a lower discount rate and adversely impacted our reserve margin by $1.3 billion, and higher levels of projected long-term care premium rate increases due to larger rate filings by some ceding companies than previously planned, which favorably impacted our reserve margin by $0.3 billion.

Our discount rate assumption for purposes of performing the premium deficiency assessment resulted in a weighted average rate of 5.74% compared to 6.04% in 2018. This decline in the discount rate from 2018 to 2019 reflected a lower reinvestment rate increasing to an expected long-term average investment yield over a longer period, lower prospective expected returns on higher yielding assets classes introduced with our 2018 strategic initiatives, and slightly lower actual yields on our investment security portfolio.

As noted above, our observed claim experience in the period since the 2017 reconstruction of our future long-term care claim cost projections has been consistent with those projections. Based on the application of professional actuarial judgment to the factors discussed above, we have made no substantial change to our assumptions concerning morbidity, morbidity improvement, mortality, mortality improvement, or terminations in 2019.

As with all assumptions underlying our premium deficiency testing, we will continue to monitor these factors, which may result in future changes in our assumptions. See Note 12 to the consolidated financial statements for further information on the results of our 2019 premium deficiency testing.

GAAP Reserve Sensitivities. The results of our premium deficiency testing are sensitive to the assumptions described above. Certain future adverse changes in our assumptions could result in the unlocking of reserves, resetting of actuarial assumptions to current assumptions, an increase to future policy benefit reserves and a charge to earnings. Considering the results of the 2019 premium deficiency test which reset our margin to zero, any future net adverse changes in our assumptions will result in an increase to future policy benefit reserves. For example, adverse changes in key assumptions to our future policy benefits reserves, holding all other assumptions constant, would have the following effects as presented in the table below. Any favorable changes to these assumptions could result in additional margin in our premium deficiency test and higher income over the remaining duration of the portfolio, including higher investment income. The assumptions within our future policy benefit reserves are subject to significant uncertainties, including those inherent in the complex nature of our reinsurance treaties. Many of our assumptions are interdependent and require evaluation individually and in the aggregate across all insurance products. Small changes in the amounts used in the sensitivities or the use of different factors could result in materially different outcomes from those reflected below.

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	2018 assumption	2019 assumption	Hypothetical change in 2019 assumption	Estimated increase to future policy benefit reserves (In billions, pre-tax)

Long-term care insurance morbidity improvement	1.25% per year over 12 to 20 years	1.25% per year over 12 to 20 years	25 basis point reduction No morbidity improvement	$0.7 $3.7
Long-term care insurance morbidity	Based on company experience	Based on company experience	5% increase in dollar amount of paid claims	$1.1
Long-term care insurance mortality improvement	0.5% per year for 10 years with annual improvement graded to 0% over next 10 years	0.5% per year for 10 years with annual improvement graded to 0% over next 10 years	1.0% per year for 10 years with annual improvement graded to 0% over next 10 years	$0.4
Total terminations:
Long-term care insurance mortality	Based on company experience	Based on company experience	Any change in termination assumptions that reduce total terminations by 10%	$1.0
Long-term care insurance lapse rate	Varies by block, attained age and benefit period; average 0.5 - 1.15%	Varies by block, attained age and benefit period; average 0.5 - 1.15%
Long-term care insurance benefit exhaustion	Based on company experience	Based on company experience
Long-term care insurance future premium rate increases	Varies by block based on filing experience	Varies by block based on filing experience	25% adverse change in premium rate increase success rate	$0.5
Discount rate:
Overall discount rate	6.04%	5.74%	25 basis point reduction	$1.0
Reinvestment rate	4.35%; grading to a long-term average investment yield of 6.0%	3.05%; grading to a long-term average investment yield of 5.9%	25 basis point reduction; grading to long-term investment yield of 5.9%	Less than $0.1
Structured settlement annuity mortality	Based on company experience	Based on company experience	5% decrease in mortality	$0.1
Life insurance mortality	Based on company experience	Based on company experience	5% increase in mortality	$0.3

Statutory Considerations. Our run-off insurance subsidiaries are required to prepare statutory financial statements in accordance with statutory accounting practices. Statutory accounting practices, not GAAP, determine the required statutory capital levels of our insurance legal entities.

Statutory accounting practices are set forth by the National Association of Insurance Commissioners (NAIC) as well as state laws, regulation and general administrative rules and differ in certain respects from GAAP. Under statutory accounting practices, base formulaic reserve assumptions typically do not change unless approved by our primary regulator, KID. In addition to base reserves, statutory accounting practices require additional actuarial reserves (AAR) be established based on results of asset adequacy testing reflecting moderately adverse conditions (i.e., assumptions include a provision for adverse deviation (PAD) rather than current assumptions without a PAD as required for premium deficiency testing under GAAP). As a result, our statutory asset adequacy testing assumptions reflect less long-term care insurance morbidity improvement and for shorter durations, restrictions on future long-term care insurance premium rate increases, no life insurance mortality improvement and a lower discount rate. As a result, several of the sensitivities described in the table above would be less impactful on our statutory reserves.

The adverse impact on our statutory AAR arising from our revised assumptions in 2017, including the collectability of reinsurance recoverables, is expected to require GE Capital to contribute approximately $14.5 billion additional capital, to its run-off insurance operations in 2018-2024. For statutory accounting purposes, KID approved our request for a permitted accounting practice to recognize the 2017 AAR increase over a seven-year period. GE Capital provided capital contributions to its insurance subsidiaries of $2.0 billion, $1.9 billion and $3.5 billion in the first quarter of 2020, 2019 and 2018, respectively. GE Capital expects to provide further capital contributions of approximately $7 billion through 2024, subject to ongoing monitoring by KID. GE is a party to capital maintenance agreements with ERAC and UFLIC whereby GE will maintain their minimum statutory capital levels at 300% of their year-end Authorized Control Level risk-based capital requirements as defined from time to time by the NAIC.

If our future policy benefit reserves established under GAAP are realized over the estimated remaining life of our run-off insurance obligations, we would expect the $14.5 billion of capital contributed to the run-off insurance operations over the 2018 to 2024 period to be considered statutory capital surplus at the end of the period with no additional charge to GAAP earnings. However, should the more conservative statutory assumptions be realized, we would be required to record the difference between GAAP assumptions and statutory assumptions as a charge to GAAP earnings in the future periods.

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See Other Items - New Accounting Standards within MD&A and Notes 1 and 12 to the consolidated financial statements for further information.

NEW ACCOUNTING ~~STANDARDS~~

~~ASU NO. 2016-16,~~ ~~ACCOUNTING FOR INCOME TAXES: INTRA-ENTITY ASSET TRANSFERS OF ASSETS OTHER THAN INVENTORY~~

STANDARDS.In ~~October 2016,~~August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. ~~2016-16,~~ 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for ~~Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory~~Long-Duration Contracts. ~~The ASU eliminates~~In October 2019, the ~~deferral of~~FASB affirmed its decision to defer the ~~tax effects of intra-entity asset transfers other than inventory. As a result,~~effective date to periods beginning after December 31, 2021, with an election to adopt early. We are evaluating the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes will be recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The effect of the standard on our consolidated financial statements and anticipate that its adoption will significantly change the accounting for measurements of our long-duration insurance liabilities. The ASU requires cash flow assumptions used in the measurement of various insurance liabilities to be reviewed at least annually and updated if actual experience or other evidence indicates previous assumptions need to be revised with any required changes recorded in earnings. Under the current accounting guidance, the discount rate is based on expected investment yields, while under the ASU the discount rate will be equivalent to the upper-medium grade (e.g., single A) fixed-income instrument yield reflecting the duration characteristics of the ~~standard will depend on~~liability and is required to be updated in each reporting period with changes recorded in other comprehensive income. In measuring the ~~nature and amount of future transactions.~~

~~ASU NO. 2016-02,~~ ~~LEASES~~

~~In February 2016,~~insurance liabilities under the ~~FASB issued ASU No. 2016-02,~~ ~~Leases. The~~ new standard, ~~establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will~~contracts shall not be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presentedgrouped together from different issue years. These changes result in the ~~financial statements, with certain practical expedients available.~~elimination of premium deficiency testing and shadow adjustments. While we continue to evaluate the effect of the standard on our ongoing financial reporting, we anticipate that the adoption of the ASU ~~may~~will materially affect our ~~Statement~~financial statements. As the ASU is only applicable to the measurements of ~~Financial Position.~~our long-duration insurance liabilities under GAAP, it will not affect the accounting for our insurance reserves or the levels of capital and surplus under statutory accounting practices.

~~ASU NO. 2014-09,~~ ~~REVENUE FROM CONTRACTS WITH CUSTOMERS~~

~~BACKGROUND~~

In ~~May 2014,~~June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU introduces a new ~~comprehensive set~~accounting model, the Current Expected Credit Losses model (CECL), which requires earlier recognition of ~~revenue~~credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition ~~principles (ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers~~)of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models in current GAAP, which generally require that ~~supersedes most existing U.S. GAAP revenue recognition guidance (including ASC 605-35,~~ ~~Revenue Recognition - Construction-Type and Production-Type Contracts~~).a loss be incurred before it is recognized. The new standard ~~will become~~also applies to receivables arising from revenue transactions such as contract assets and accounts receivables, as well as reinsurance recoverables at GE Capital's run-off insurance operations and is effective for ~~annual reporting periods~~fiscal years beginning after December 15, ~~2017. We~~2019. The standard will ~~adopt~~be applied prospectively with an adjustment to retained earnings. As we finalize our process, we expect the ~~standard on January 1, 2018, will apply it retrospectively to all periods presented and will elect the practical expedient for contract modifications. Since the issuance~~adoption of the ~~new standard by the FASB, we~~ASU to have engaged in a collaborative process with our industry peers and worked with standard setters on important interpretive matters with the objective of ensuring consistency in the application of the standard.

~~TRANSITION METHOD FOR APPLYING THE NEW STANDARD~~

Companies can use either a full retrospective or modified retrospective method to adopt the standard. Under the full retrospective method, all periods presented will be updated upon adoption to conform to the new standard and a cumulative adjustment for effects on periods prior to 2016 will be recorded to retained earnings as of January 1, 2016. Under the modified retrospective approach, prior periods are not updated to be presented on an accounting basis that is consistent with 2018. Rather, a cumulative adjustment for effects of applying the new standard to periods prior to 2018 is recorded to retained earnings as of January 1, 2018. Because only 2018 revenues reflect application of the new standard, incremental disclosures are required to present the 2018 revenues under the prior standard.

As noted above, we have elected to apply the full retrospective approach. We chose that approach because we believe that it is the most helpful to our investors. First and foremost, when we adopt the standard in 2018 we will provide investors with a consistent view of historical trends, as 2016 and 2017 will be on a basis consistent with 2018.

~~GE 2016 FORM 10-K 96~~

~~CHANGE IN TIMING AND PRESENTATION, NO IMPACT TO CASH OR ECONOMICS~~

The new standard requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time based on when control of goods and services transfer to a customer. As a result, we expect significant changes in the presentation of our financial statements, including: (1) timing of revenue recognition, and (2) changes in classification between revenue and costs. The new standard will have no cash impact and, as such, does not affect the economics of our underlying customer contracts. The effect of applying the new guidance to our existing book of contracts will result in lower reported earnings in 2018 (and comparative periods previously reported) and in the early years after adoption. However, we expect to experience an increase in reported earnings, on that existing book of contracts, as they mature. The new standard will provide for a better alignment of cash and earnings for the affected long-term customer contracts and we expect that it will enhance comparability across industry peers.

~~SPECIFIC EFFECT ON GE BUSINESSES~~

~~Power and Aviation Service Agreements~~ - For our long-term product service agreements, primarily in our Power and Aviation businesses, we expect to continue to recognize revenue based on costs incurred plus an estimated margin rate (over time model). However, the new standard provides prescriptive guidance tied to several factors for determining what constitutes the proper scope of a customer contract for accounting purposes. These factors include optional purchases, contract modifications, and termination clauses. For example, under the new standard contract modifications will be accounted for prospectively by recognizing the financial effect of the modification over the remaining life of the contract. Under existing accounting guidance revisions to estimated margin rates resulting from modifications were reflected as cumulative effect adjustments to earnings in the current period.

~~Aviation Commercial Engines~~ - Consistent with industry peers, the financial presentation of our Aviation Commercial engines business will be significantly affected as they will be accounted for as of a point in time, which is a change from our current long-term contract accounting process. Our current process applies contract-specific estimated margin rates, which include the effect of estimated cost improvements, to costs incurred. This change is required because our commercial engine contracts do not transfer control to the customer during the manufacturing process. Each install and spare engine will be accounted for as a separate performance obligation, reflecting the actual price and manufacturing costs of such engines. We expect that the most significant effect of this change will be reflected when we have new engine launches, where the cost of earlier production units is higher than the cost of later production units because of cost improvements.

~~All Other Large Equipment~~ - For the remainder of our equipment businesses, the new revenue standard requires emphasis on transfer of control rather than risks and rewards, which may accelerate timing of revenue recognition versus our current practices. For example, in our Renewable Energy business we wait for risk of loss to be assumed by the customer before recognizing revenue, which generally occurs later than when control is transferred.

~~CURRENT RANGE OF FINANCIAL STATEMENT EFFECT~~

We will adopt the new standard as of January 1, 2018. When we report our 2018 results, the comparative results for 2017 and 2016 will be updated to reflect the application of the requirements of the new standard to these periods. Based on our assessment and best estimates to date, we expect a non-cash charge to our January 1, 2016 retained earnings balance of approximately $4 billion. We estimate that the charge will comprise approximately $1 billion related to commercial aircraft engines and $3 billion related primarily to our Services businesses (predominately in Power and Aviation). Beyond those effects, we expect application of the new guidance will result in increases and decreases in revenue within our segments, which will largely offset overall and will be immaterial at a total company level. We estimate that our 2016 restated earnings per share will be lower by approximately $0.10. We anticipate that 2018 earnings per share will be lower by approximately $0.05 compared to what our results would be under existing revenue recognition guidance. These amounts include significant estimates and will remain subject to change as we complete our evaluation of the new standard and reflect actual activity for 2017.

To summarize, we will adopt the new standard in 2018, at which time we will update prior periods to be presented on a consistent basis. As discussed above, we anticipate the dilutive effect of the new standard in the year of adoption to be approximately $0.05 EPS and the effect will be less dilutive for years after initial adoption. However, this expectation is based on many variables, which are subject to change. Importantly, application of the new guidance has no effect on the cash we expect to receive nor the economics of these contracts. Rather, it will simply more closely align revenue with cash, which we believe will be helpful to our investors.

~~GE 2016 FORM 10-K 97~~

~~GE DIGITAL~~

In late 2015, we created GE Digital, whose activities are focused on assisting in the market development of our digital product offerings through software design, fulfillment and product management, while also interfacing with our customers. Digital revenues include internally developed software (including Predix) and associated hardware, and software solutions that improve our customers' asset performance. These revenues are largely generated from our operating businesses and are included in their segment results.

GE Digital revenues of $3.6 billion increased $0.5 billion, or 16%, in 2016 and were principally driven by expansion of our Digital offerings in GE's Power, Energy Connections & Lighting and Oil & Gas segments.

GE Digital orders of $4.0 billion increased $0.7 billion, or 22%, in 2016 principally driven by expansion of our Digital offerings in GE's Power, Energy Connections & Lighting, Oil & Gas segments and in Digital Core, partially offset by a market-driven slowdown in Transportation.

One aspect of our Digital transformation includes an initiative to digitize the operations of GE. These investments include applications and analytics that improve the productivity of our internal processes across engineering, services, sourcing, and commercial – collectively referred to as the Digital Thread. During 2016, we internally invested $0.4 billion through various digitally-driven productivity initiatives, yielding $0.7 billion of gross productivity, principally related to our services businesses. Costs associated with revenue-generating activities are recorded within the results of our segments and at Corporate and are reflected in their respective margin rates.

~~In addition, we made several acquisitions to further enhance and expand our digital capabilities:~~

On January 10, 2017, we completed the acquisition of ServiceMax, a leader in cloud-based field service management (FSM) solutions, for $0.9 billion. This acquisition is expected to provide enhanced capabilities to advance our Industrial Internet vision, enabling customers to immediately gain more value from their assets and find greater efficiency in their field service processes.

·	On November 9, 2016, we acquired the remaining 89% of Bit Stew, a software company specializing in gathering data from connected devices in complex industrial systems to help companies plan predictive maintenance and optimize productivity, for $0.1 billion.

·	On October 26, 2016, we acquired Wise.io, a leading machine learning and intelligent systems company, for less than $0.1 billion. This acquisition is expected to further accelerate development of advanced machine learning and data science offerings in the Predix platform.

·	On September 14, 2016, we acquired the remaining 74% of the software developer Meridium Inc. for $0.4 billion. The acquisition is expected to enhance and accelerate our Asset Performance Management capabilities across our industrial businesses.

~~GE 2016 FORM 10-K 98~~

~~IRAN THREAT REDUCTION AND SYRIA HUMAN RIGHTS ACT OF 2012~~

~~The Company is making the following disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934.~~

Under Section 13(r) of the Securities Exchange Act of 1934, enacted in 2012, GE is required to disclose in its periodic reports if it or any of its affiliates knowingly engaged in business activities relating to Iran, even if those activities are conducted in accordance with authorizations subsequently issued by the U.S. Government. Reportable activities include investments that significantly enhance Iran's ability to develop petroleum resources valued at $20 million or more in the aggregate during a twelve-month period. Reporting is also required for transactions related to Iran's domestic production of refined petroleum products or Iran's ability to import refined petroleum products valued at $5 million or more in the aggregate during a twelve-month period.

In January 2016, the U.S. Department of Treasury's Office of Foreign Assets Control (OFAC) issued General License H authorizing U.S.-owned or controlled foreign entities to engage in transactions with Iran if these entities meet the requirements of the general license. Pursuant to this authorization, a non-U.S. affiliate of GE's Power business received a purchase order during the third quarter of 2016 for the sale of spare parts to an Iranian entity to provide electricity and steam to an area of Iran that includes certain oil refineries. During the fourth quarter of 2016, the non-U.S. affiliate received purchase orders directly from one of the end users for €7.1 million ($7.9 million) of the work contemplated under the original purchase order. As a result, the original purchase order will be revised. As of December 31, 2016, gross revenues attributable to these purchase orders was €0.9 million ($1.0 million), and net profits attributable to these transactions was €0.5 million ($0.6 million). The non-U.S. affiliate intends to continue this activity.

Another non-U.S. affiliate of GE's Oil & Gas business received four purchase orders during the fourth quarter of 2016 for the sale of goods pursuant to General License H that could potentially enhance Iran's ability to develop petroleum resources. The purchase orders cover the sale of spare parts for gas turbine equipment for ultimate end use by an Iranian company in gas production projects in Iran and have a total value of €16.8 million ($17.6 million). The non-U.S. affiliate has also begun operational activities related to previously reported contracts. A second non-U.S. affiliate of GE's Oil & Gas business received a purchase order pursuant to General License H valued at €0.2 million ($0.2 million) during the fourth quarter of 2016 for the sale of services associated with the commissioning of gas compressors in Iran. As of December 31, 2016, these non-US affiliates have not recognized any revenue, but have incurred €2.7 million ($2.9 million) in costs. The non-U.S. affiliates intend to continue this activity.

~~For additional information on business activities related to Iran, please refer to the Other Items section within MD&A of our Form 10-Q for the quarter ended September 30, 2016.~~

~~GE 2016 FORM 10-K 99~~

~~ENVIRONMENTAL MATTERS~~

Our operations, like operations of other companies engaged in similar businesses, involve the use, disposal and cleanup of substances regulated under environmental protection laws. We are involved in a number of remediation actions to clean up hazardous wastes as required by federal and state laws. Such statutes require that responsible parties fund remediation actions regardless of fault, legality of original disposal or ownership of a disposal site. Expenditures for site remediation actions amounted to approximately $0.2 billion $0.3 billion and $0.4 billion for the years 2016, 2015 and 2014, respectively. We presently expect that such remediation actions will require average annual expenditures of about $0.2 billion in 2017 and about $0.1 billion in 2018.

to retained earnings.

As previously reported, in 2000, GE and the Environmental Protection Agency (EPA) entered into a consent decree relating to PCB cleanup of the Housatonic River in Massachusetts. Following EPA's release in September 2015 of an intended final remediation decision, GE and EPA engaged in mediation and the first step of the dispute resolution process contemplated by the consent decree. In October 2016, EPA issued its final remediation decision pursuant to the consent decree. GE and several other interested parties have appealed that decision to EPA's Environmental Appeals Board. A decision of the Board can ultimately be appealed to the United States Court of Appeals for the First Circuit. EPA may not implement any remedy until all appeals are exhausted. As of December 31, 2016, and based on its assessment of current facts and circumstances and its defenses, GE believes that it has recorded adequate reserves to cover future obligations associated with an expected final remedy.

~~RESEARCH AND DEVELOPMENT~~

(In millions) 2016 2015 2014

Total R&D $ 5,466 $ 5,278 $ 5,273
Less customer funded R&D (principally the U.S. Government) (611) (803) (721)
Less partner funded R&D (73) (226) (319)
GE funded R&D $ 4,782 $ 4,249 $ 4,233

Of the total Research and Development, the segments with the most significant expenditures for the years ended December 31, 2016, 2015 and 2014 were: Aviation $1,595 million, $1,893 million and $1,965 million, respectively; Healthcare $938 million, $905 million, and $817 million, respectively; and Power $695 million, $721 million and $641 million, respectively. The remaining segments and Corporate, including Global Research Center, had combined expenditures of $2,238 million, $1,759 million and $1,850 million, for the years ended December 31, 2016, 2015 and 2014 respectively.

~~OTHER~~

OTHER.We own, or hold licenses to use, numerous patents. New patents are continuously being obtained through our research and development activities as existing patents expire. Patented inventions are used both within the Company and are licensed to others.

GE is a trademark and service mark of General Electric Company.

Because of the diversity of our products and services, as well as the wide geographic dispersion of our production facilities, we use numerous sources for the wide variety of raw materials needed for our operations. We have not been adversely affected by our inability to obtain raw materials.

~~Sales of goods~~NON-GAAP FINANCIAL MEASURES. We believe that presenting non-GAAP financial measures provides management and ~~services~~investors useful measures to ~~agencies~~evaluate performance and trends of the ~~U.S. Government as a percentage of revenues follow.~~

total company and its businesses. This includes adjustments in recent periods to GAAP financial measures to increase period-to-period comparability following actions to strengthen our overall financial position and how we manage our business.

2016 2015 2014

Total sales to U.S. Government agencies 3 % 3 % 3 %
Aviation segment defense-related sales 2 2 3

~~GE 2016 FORM 10-K 100~~

~~SUPPLEMENTAL INFORMATION~~

~~FINANCIAL MEASURES THAT SUPPLEMENT U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES MEASURES (NON-GAAP FINANCIAL MEASURES)~~

We sometimes use information derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered "non-GAAP financial measures"In addition, management recognizes that certain non-GAAP terms may be interpreted differently by other companies under ~~U.S. Securities and Exchange Commission rules. Specifically, we have referred, in~~different circumstances. In various sections of this report ~~to:~~

·	~~Industrial segment organic revenues and industrial segment organic revenues excluding Oil & Gas~~

·	~~Industrial segment organic operating profit~~

·	~~Oil & Gas organic revenue and operating profit growth~~

·	~~Operating and non-operating pension cost~~

·	~~Adjusted corporate costs (operating)~~

·	GE pre-tax earnings from continuing operations, excluding GE Capital earnings (loss) from continuing operations and the corresponding effective tax rates, and the reconciliation of the U.S. federal statutory income tax rate to GE effective tax rate, excluding GE Capital earnings

·	~~Industrial operating earnings and GE Capital earnings (loss) from continuing operations and EPS~~

·	~~Industrial operating + Verticals earnings and EPS~~

·	~~Industrial operating profit and operating profit margin (excluding certain items)~~

·	~~Industrial operating profit + Verticals~~

·	~~Industrial segment gross margin (excluding Alstom)~~

·	~~Industrial segment operating profit and operating margin (excluding Alstom)~~

·	~~Average GE shareowners' equity, excluding effects of discontinued operations~~

·	~~Average GE Capital shareowners' equity, excluding effects of discontinued operations~~

·	~~Industrial return on total capital (Industrial ROTC)~~

·	~~Industrial cash flows from operating activities (Industrial CFOA) and Industrial CFOA excluding taxes related to business sales and principal pension plan funding~~

·	~~GE cash flows from operating activities (GE CFOA) excluding taxes related to business sales and principal pension plan funding~~

·	~~Free cash flow (FCF) and FCF plus dispositions~~

·	~~Ratio of adjusted debt to equity at GE Capital, net of liquidity~~

·	~~Capital ending net investment (ENI), excluding liquidity~~

·	~~2017 operating framework including 2017 Industrial operating + Verticals EPS target~~

we have made reference to the following non-GAAP financial measures in describing our (1) revenues, specifically GE Industrial segment organic revenues; and GE Industrial organic revenues, (2) profit, specifically GE Industrial segment organic profit; Adjusted GE Industrial profit and profit margin; Adjusted GE Industrial organic profit and profit margin; Adjusted earnings (loss); and Adjusted earnings (loss) per share (EPS), (3) taxes, specifically GE effective tax rates, excluding GE Capital earnings; and reconciliation of U.S. federal statutory income tax rate to GE effective tax rate excluding GE Capital earnings, (4) cash flows, specifically GE Industrial free cash flows (FCF), and (5) debt balances, specifically GE Industrial net debt. The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures follow.

GE ~~2016~~2019 FORM 10-K ~~101~~ 43

INDUSTRIAL SEGMENT ORGANIC REVENUES AND INDUSTRIAL SEGMENT ORGANIC REVENUES EXCLUDING OIL & GAS

(Dollars in millions) 2016 2015 V%

Industrial segment revenues (GAAP) $ 113,156 $ 108,796 4%
Adjustments:
   Acquisitions 13,207 1,961
   Business dispositions (other than dispositions of businesses acquired for investment) 1,256 6,838
   Currency exchange rates (808) -
Industrial segment organic revenues (Non-GAAP) $ 99,501 $ 99,997 -%
Adjustment: Plus Alstom November and December(a) 3,202 1,812
Industrial segment organic revenues including Alstom results for November and December
    of both 2015 and 2016 (Non-GAAP) $ 102,702 $ 101,809 1%

Oil & Gas revenues (GAAP) $ 12,898 $ 16,450 (22)%
Adjustments:
   Acquisitions 140 -
   Business dispositions (other than dispositions of businesses acquired for investment) - 57
   Currency exchange rates (290) -
Oil & Gas organic revenues (Non-GAAP) $ 13,048 $ 16,394 (20)%
Adjustment: Plus Alstom November and December(a) 28 -
Oil & Gas organic revenues including Alstom results for November and December
    of both 2015 and 2016 (Non-GAAP) $ 13,075 $ 16,394 (20)%
Industrial segment organic revenues including Alstom results for November and December
    of both 2015 and 2016 and excluding Oil & Gas (Non-GAAP) $ 89,627 $ 85,416 5%

(Dollars in millions) 2015 2014 V%

Industrial segment revenues (GAAP) $ 108,796 $ 109,727 (1)%
Adjustments:
   Acquisitions 2,204 46
   Business dispositions (other than dispositions of businesses acquired for investment) 108 1,224
   Currency exchange rates (4,791) -
Industrial segment organic revenues (Non-GAAP) $ 111,276 $ 108,457 3%

Oil & Gas revenues (GAAP) $ 16,450 $ 19,085 (14)%
Adjustments:
   Acquisitions 145 30
   Business dispositions (other than dispositions of businesses acquired for investment) 25 319 ��
   Currency exchange rates (1,597) -
Oil & Gas organic revenues (Non-GAAP) $ 17,878 $ 18,735 (5)%
Industrial segment organic revenues excluding Oil & Gas (Non-GAAP) $ 93,398 $ 89,723 4%

(Dollars in millions) 2014 2013 V%

Industrial segment revenues (GAAP) $ 109,727 $ 103,383 6%
Adjustments:
   Acquisitions 2,170 463
   Business dispositions (other than dispositions of businesses acquired for investment) 246 1,712
   Currency exchange rates (545) -
Industrial segment organic revenues (Non-GAAP) $ 107,856 $ 101,208 7%

Oil & Gas revenues (GAAP) $ 18,676 $ 16,975 10%
Adjustments:
   Acquisitions 1,221 319
   Business dispositions (other than dispositions of businesses acquired for investment) 109 726
   Currency exchange rates (67) -
Oil & Gas organic revenues (Non-GAAP) $ 17,413 $ 15,930 9%
Industrial segment organic revenues excluding Oil & Gas (Non-GAAP) $ 90,443 $ 85,279 6%

~~(a)~~
	Alstom was acquired in November 2015. This adjustment results in the inclusion of Alstom revenues from November and December of both 2015 and 2016 in the adjusted organic revenue growth measure as described below.
MD&A	NON-GAAP FINANCIAL MEASURES

~~GE 2016 FORM 10-K 102~~

Organic revenue growth measures revenue growth excluding the effects of acquisitions, business dispositions and currency exchange rates. We believe that this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and currency exchange, which activities are subject to volatility and can obscure underlying trends. We also believe that presenting organic revenue growth separately for our industrial businesses provides management and investors with useful information about the trends of our industrial businesses and enables a more direct comparison to other non-financial businesses and companies. Management recognizes that the term "organic revenue growth" may be interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the respective businesses or companies and may therefore be a useful tool in assessing period-to-period performance trends.



GE INDUSTRIAL ORGANIC REVENUES, PROFIT (LOSS) AND PROFIT MARGIN BY SEGMENT (NON-GAAP)
	Revenues							Segment profit (loss)								Profit margin
(Dollars in millions)	2019			2018		V%		2019			2018			V%		2019		2018		V pts

Power (GAAP)	$	18,625		$	22,150	(16	)%	$	386		$	(808	)	F		2.1	%	(3.6	)%	5.7pts
Less: acquisitions	25			—				(1		)	—
Less: business dispositions	10			2,805				(2		)	237
Less: foreign currency effect	(508		)	—				47			—
Power organic (Non-GAAP)	$	19,098		$	19,345	(1	)%	$	342		$	(1,046	)	F		1.8	%	(5.4	)%	7.2pts

Renewable Energy (GAAP)	$	15,337		$	14,288	7	%	$	(666	)	$	292		U		(4.3	)%	2.0	%	(6.3)pts
Less: acquisitions	3			—				6			—
Less: business dispositions	—			—				—			(2		)
Less: foreign currency effect	(532		)	—				60			—
Renewable Energy organic (Non-GAAP)	$	15,866		$	14,288	11	%	$	(731	)	$	294		U		(4.6	)%	2.1	%	(6.7)pts

Aviation (GAAP)	$	32,875		$	30,566	8	%	$	6,820		$	6,466		5	%	20.7	%	21.2	%	(0.5)pts
Less: acquisitions	—			—				—			—
Less: business dispositions	25			317				6			39
Less: foreign currency effect	(24		)	—				30			—
Aviation organic (Non-GAAP)	$	32,874		$	30,250	9	%	$	6,784		$	6,427		6	%	20.6	%	21.2	%	(0.6)pts

Healthcare (GAAP)	$	19,942		$	19,784	1	%	$	3,896		$	3,698		5	%	19.5	%	18.7	%	0.8pts
Less: acquisitions	83			—				(19		)	—
Less: business dispositions	2			235				(27		)	22
Less: foreign currency effect	(359		)	—				(1		)	—
Healthcare organic (Non-GAAP)	$	20,216		$	19,549	3	%	$	3,944		$	3,676		7	%	19.5	%	18.8	%	0.7pts

GE Industrial segment (GAAP)	$	86,778		$	86,789	—	%	$	10,436		$	9,647		8	%	12.0	%	11.1	%	0.9pts
Less: acquisitions	111			—				(15		)	—
Less: business dispositions(a)	38			3,357				(24		)	295
Less: foreign currency effect(b)	(1,424		)	—				136			—
GE Industrial segment organic (Non-GAAP)	$	88,053		$	83,432	5.5	%	$	10,338		$	9,351		11	%	11.7	%	11.2	%	0.5pts

(a) Dispositions impact in 2018 primarily related to our Industrial Solutions and Distributed Power businesses within our Power segment, with revenues of $1,257 million and $1,274 million, respectively, and Value-Based Care within our Healthcare segment, with revenues of $222 million.
(b) Primarily the euro, Japanese yen and Brazilian real.
We believe these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and foreign currency, as these activities can obscure underlying trends. We also believe presenting organic revenues* and organic profit* separately for our industrial businesses provides management and investors with useful information about the trends of our industrial businesses and enables a more direct comparison to other non-financial companies.
When comparing revenues and profit growth between periods excluding the effects of acquisitions, business dispositions and currency exchange rates, those effects are different when comparing results for different periods. Revenues and profit from acquisitions are considered inorganic from the date we complete an acquisition through the end of the fourth quarter following the acquisition and are therefore reflected as adjustments to reported revenues and profit to derive organic revenues* and organic profit* for the period following the acquisition. In subsequent periods, the revenues and profit from the acquisition become organic as these revenues and profit are included for all periods presented.

We integrate acquisitions as soon as possible. Revenues from the date we complete the acquisition through the end of the fourth quarter following the acquisition are considered the acquisition effect of such business for purposes of calculating organic revenue. As such, organic revenue excludes Alstom revenues from November 3, 2015 through December 31, 2016. However, because of the significance of Alstom to our results and the exclusion of Alstom revenues for more than 12 months in calculating organic revenue growth, we believe investors would also find it helpful to see the revenue growth of the industrial segments adjusted to include Alstom's November and December revenues in an organic measure. As a result, we have also presented an adjusted organic revenue growth measure on that basis.

We also believe that variability in the revenue of our Oil & Gas business may obscure underlying trends of our other industrial businesses. As a result, we have also presented our organic revenue growth measure excluding the revenues of our Oil & Gas business.

INDUSTRIAL SEGMENT ORGANIC OPERATING PROFIT

(Dollars in millions) 2016 2015 V%

Industrial segment profit (GAAP) $ 17,598 $ 17,966 (2)%
Adjustments:
   Acquisitions 739 (151)
   Business dispositions (other than dispositions of businesses acquired for investment) 181 649
   Currency exchange rates (33) -
Industrial segment organic operating profit (Non-GAAP) $ 16,712 $ 17,469 (4)%

(Dollars in millions) 2015 2014 V%

Industrial segment profit (GAAP) $ 17,966 $ 17,764 1%
Adjustments:
   Acquisitions (132) (1)
   Business dispositions (other than dispositions of businesses acquired for investment) 3 195
   Currency exchange rates (670) -
Industrial segment organic operating profit (Non-GAAP) $ 18,766 $ 17,570 7%

Industrial segment organic operating profit growth measures Industrial segment profit excluding the effects of acquisitions, business dispositions and currency exchange rates. We believe that this measure provides management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and currency exchange, which activities are subject to volatility and can obscure underlying trends. We also believe that presenting industrial segment organic operating profit growth separately for our industrial businesses provides management and investors with useful information about the trends of our industrial businesses and enables a more direct comparison to other non-financial businesses and companies. Management recognizes that the term "Industrial segment organic operating profit growth" may be interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the respective businesses or companies and may therefore be a useful tool in assessing period-to-period performance trends.

~~GE 2016 FORM 10-K 103~~

OIL & GAS ORGANIC REVENUE GROWTH

(Dollars in millions) 2015 2014 V%

Oil & Gas segment revenue (GAAP) $ 16,450 $ 19,085 (14)%
Adjustments:
   Acquisitions 145 30
   Business dispositions (other than dispositions of businesses acquired for investment) 25 319
   Currency exchange rates (1,597) -
Oil & Gas organic revenue (Non-GAAP) $ 17,878 $ 18,735 (5)%

OIL & GAS ORGANIC OPERATING PROFIT GROWTH

(Dollars in millions) 2015 2014 V%

Oil & Gas segment profit (GAAP) $ 2,427 $ 2,758 (12)%
Adjustments:
   Acquisitions 8 -
   Business dispositions (other than dispositions of businesses acquired for investment) 1 18
   Currency exchange rates (349) -
Oil & Gas organic profit (Non-GAAP) $ 2,768 $ 2,739 1%

Organic revenue and operating profit growth measure revenue and profit excluding the effects of acquisitions, business dispositions and currency exchange rates. We believe that these measures provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and currency exchange, which activities are subject to volatility and can obscure underlying trends. Management recognizes that the terms "organic revenue growth" and "organic operating profit growth" may be interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the Oil & Gas business and may therefore be a useful tool in assessing period-to-period performance trends.

OPERATING AND NON-OPERATING PENSION COST

(In millions) 2016 2015 2014 2013

Service cost for benefits earned $ 1,237 $ 1,424 $ 1,205 $ 1,535
Prior service cost amortization 303 205 214 246
Curtailment loss 31 105 65 -
Operating pension cost (Non-GAAP) 1,571 1,734 1,484 1,781

Expected return on plan assets (3,336) (3,302) (3,190) (3,500)
Interest cost on benefit obligations 2,939 2,778 2,745 2,460
Net actuarial loss amortization 2,449 3,288 2,565 3,664
Non-operating pension cost (Non-GAAP) 2,052 2,764 2,120 2,624
Total principal pension plans cost (GAAP) $ 3,623 $ 4,498 $ 3,604 $ 4,405

We have provided the operating and non-operating components of cost for our principal pension plans. Operating pension cost comprises the service cost of benefits earned, prior service cost amortization and curtailment loss for our principal pension plans. Non-operating pension cost comprises the expected return on plan assets, interest cost on benefit obligations and net actuarial loss amortization for our principal pension plans. We believe that the operating components of pension cost better reflect the ongoing service-related cost of providing pension benefits to our employees. We believe that the operating and non-operating components of cost for our principal pension plans, considered along with the corresponding GAAP measure, provide management and investors with additional information for comparison of our pension plan cost and operating results with the pension plan cost and operating results of other companies.

~~GE 2016 FORM 10-K 104~~

ADJUSTED CORPORATE COSTS (OPERATING)

(In millions) 2016 2015 2014 2013

Total Corporate Items and Eliminations (GAAP) $ (4,226) $ (5,108) $ (6,225) $ (6,002)
Less: non-operating pension cost (Non-GAAP) (2,052) (2,764) (2,120) (2,624)
Total Corporate costs (operating) (Non-GAAP) $ (2,175) $ (2,344) $ (4,105) $ (3,378)
Less: restructuring and other charges, gains (losses),
NBCU settlement and NBCU LLC (134) (237) (1,697) (17)
Adjusted total corporate costs (operating) (Non-GAAP) $ (2,040) $ (2,107) $ (2,408) $ (3,361)

Operating corporate costs exclude non-service-related pension costs of our principal pension plans, which comprise interest costs, expected return on plan assets and amortization of actuarial gains/losses. Service cost, prior service cost and curtailment loss components of our principal pension plans are included in operating corporate costs. We believe that these components of pension cost better reflect the ongoing service-related costs of providing pension benefits to our employees. Accordingly, we believe that our measure of operating corporate costs provides management and investors with a useful measure of the operational costs incurred outside of our businesses. We believe that this measure, considered along with the corresponding GAAP measure, provides management and investors with additional information for comparison of our operating corporate costs to the operating corporate costs of other companies.

We also believe that adjusting operating corporate costs to exclude the effects of items that are not closely associated with ongoing corporate operations, such as earnings of previously divested businesses, gains and losses on disposed and held for sale businesses, restructuring and other charges, a settlement and NBCU LLC provides management and investors with a meaningful measure that increases the period-to-period comparability of our ongoing corporate costs.

GE PRE-TAX EARNINGS FROM CONTINUING OPERATIONS, EXCLUDING GE CAPITAL EARNINGS (LOSS) FROM
CONTINUING OPERATIONS AND THE CORRESPONDING EFFECTIVE TAX RATES

(Dollars in millions) 2016 2015 2014

GE earnings from continuing operations before income taxes (GAAP) $ 9,815 $ 3,252 $ 11,119
Less: GE Capital earnings (loss) from continuing operations (1,251) (7,672) 1,532
Total $ 11,066 $ 10,924 $ 9,587

GE provision for income taxes (GAAP) $ 967 $ 1,506 $ 1,634
GE effective tax rate, excluding GE Capital earnings (Non-GAAP) 8.7 % 13.8 % 17.0 %

RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO GE EFFECTIVE TAX RATE,
EXCLUDING GE CAPITAL EARNINGS

2016 2015 2014

U.S. federal statutory income tax rate 35.0 % 35.0 % 35.0 %
Reduction in rate resulting from:
   Tax on global activities including exports
(18.5) (15.8) (13.9)
   U.S. business credits
(0.8) (1.2) (1.1)
   All other – net (7.0) (4.2) (3.0)
(26.3) (21.2) (18.0)
GE effective tax rate, excluding GE Capital earnings 8.7 % 13.8 % 17.0 %

We believe that the GE effective tax rate is best analyzed in relation to GE earnings before income taxes excluding the GE Capital net earnings from continuing operations, as GE tax expense does not include taxes on GE Capital earnings. Management believes that in addition to the Consolidated and GE Capital tax rates shown in Note 14 to the consolidated financial statements, this supplemental measure provides investors with useful information as it presents the GE effective tax rate that can be used in comparing the GE results to other non-financial services businesses.

~~GE 2016 FORM 10-K 105~~

INDUSTRIAL OPERATING EARNINGS AND GE CAPITAL EARNINGS (LOSS) FROM CONTINUING OPERATIONS AND EPS

(Dollars in millions; except per share amounts) 2016 2015 2014 2013

Consolidated earnings from continuing operations attributable
   to GE common shareowners (GAAP) $ 9,128 $ 1,663 $ 9,535 $ 7,618
     Non-operating pension cost (pre-tax) 2,052 2,764 2,120 2,624
     Tax effect on non-operating pension cost(a) (718) (967) (742) (919)
Adjustment: non-operating pension cost (net of tax) 1,334 1,797 1,378 1,705
Operating earnings (Non-GAAP) $ 10,462 $ 3,460 $ 10,913 $ 9,323

Adjustment: GE Capital earnings (loss) from continuing operations
   attributable to GE common shareowners (1,251) (7,983) 1,209 401
Industrial operating earnings (Non-GAAP) $ 11,713 $ 11,443 $ 9,705 $ 8,922

Earnings (loss) per share (EPS) - diluted(b)

Consolidated EPS from continuing operations
   attributable to GE common shareowners (GAAP) $ 1.00 $ 0.17 $ 0.94 $ 0.74
Adjustment: non-operating pension cost (net of tax) 0.15 0.18 0.14 0.17
Operating EPS (Non-GAAP) 1.14 0.35 1.08 0.90
GE Capital EPS from continuing operations
   attributable to GE common shareowners (GAAP) (0.14) (0.80) 0.12 0.04
Industrial operating EPS (Non-GAAP) $ 1.28 $ 1.14 $ 0.96 $ 0.87

~~(a)~~

~~The tax effect of non-operating pension costs was calculated using a 35% U.S. federal statutory tax rate, based on its applicability to such cost.~~

~~(b)~~

~~Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.~~

Operating earnings excludes non-service-related pension costs of our principal pension plans comprising interest cost, expected return on plan assets and amortization of actuarial gains/losses. The service cost, prior service cost and curtailment loss components of our principal pension plans are included in operating earnings. We believe that these components of pension cost better reflect the ongoing service-related costs of providing pension benefits to our employees. As such, we believe that our measure of operating earnings provides management and investors with a useful measure of the operational results of our business. Other components of GAAP pension cost are mainly driven by capital allocation decisions and market performance, and we manage these separately from the operational performance of our businesses. Neither GAAP nor operating pension costs are necessarily indicative of the current or future cash flow requirements related to our pension plans. We also believe that this measure, considered along with the corresponding GAAP measure, provides management and investors with additional information for comparison of our operating results to the operating results of other companies. We believe that presenting operating earnings separately for our industrial businesses also provides management and investors with useful information about the relative size of our industrial and financial services businesses in relation to the total company.

~~GE 2016 FORM 10-K 106~~

INDUSTRIAL OPERATING + VERTICALS EARNINGS AND EPS

(Dollars in millions; except per share amounts) 2016 2015 2014 2013

GE Capital earnings (loss) from continuing operations attributable
to GE common shareowners (GAAP) $ (1,251) $ (7,983) $ 1,209 $ 401
Adjustment: GE Capital other continuing earnings (loss) (Other Capital) (3,143) (9,649) (399) (1,009)
Verticals earnings(a) 1,892 1,666 1,608 1,410

Industrial operating earnings (Non-GAAP) $ 11,713 $ 11,443 $ 9,705 $ 8,922
Verticals earnings(a) 1,892 1,666 1,608 1,410
Industrial operating earnings + Verticals earnings (Non-GAAP) $ 13,605 $ 13,109 $ 11,313 $ 10,332
Adjustment: Non-operating pension cost and other Capital (4,477) (11,446) (1,777) (2,714)
Earnings (loss) from continuing operations
attributable to GE common shareowners (GAAP) $ 9,128 $ 1,663 $ 9,535 $ 7,618

Earnings (loss) per share - diluted(b)

Industrial operating EPS (Non-GAAP) $ 1.28 $ 1.14 $ 0.96 $ 0.87
Verticals EPS 0.21 0.17 0.16 0.14
Industrial operating + Verticals EPS (Non-GAAP) $ 1.49 $ 1.31 $ 1.12 $ 1.00
Adjustment: Non-operating pension cost and other Capital (0.49) (1.14) (0.18) (0.27)
EPS from continuing operations (GAAP) $ 1.00 $ 0.17 $ 0.94 $ 0.74

~~(a)~~

Verticals include businesses expected to be retained (GECAS, Energy Financial Services, Industrial Finance and run-off insurance activities), including allocated corporate costs of $100 million, $133 million, $233 million and $233 million after tax for the years ended December 31, 2016, 2015, 2014 and 2013, respectively.

~~(b)~~

~~Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.~~

As described above, Verticals represents the GE Capital businesses that we expect to retain. We believe that presenting Industrial operating + Verticals earnings-per-share amounts provides management and investors with a useful measure to evaluate the performance of the businesses we expect to retain after the disposition of most of our financial services business.

~~See below for a graphic presentation of the reconciliation between GAAP EPS from continuing operations to the Industrial operating + Verticals EPS.~~

~~GE 2016 FORM 10-K 107~~

INDUSTRIAL OPERATING + VERTICALS EARNINGS AND EPS(a)

Industrial operating & Verticals
$1.49

Non-operating pension & other Capital
$(0.49)

Industrial operating & Verticals
$1.31

Non-operating pension & other Capital
$(1.14)
GAAP Continuing EPS $1.00 $0.17

Industrial operating & Verticals
$1.12

Non-operating pension & other Capital
$(0.18)

Industrial operating & Verticals
$1.00

Non-operating pension & other Capital
$(0.27)
GAAP Continuing EPS $0.94 $0.74

~~(a)~~

~~Earnings-per~~-~~share amounts are computed independently. As a result, the sum of per share amounts may not equal the total.~~

~~GE 2016 FORM 10-K 108~~

INDUSTRIAL OPERATING PROFIT AND OPERATING PROFIT MARGIN (EXCLUDING CERTAIN ITEMS)

(Dollars in millions) 2016 2015 2014 2013 2012

Revenues
   GE total revenues and other income $ 113,676 $ 100,700 $ 109,546 $ 104,599 $ 104,900
     Less: GE Capital earnings (loss) from
     continuing operations (1,251) (7,672) 1,532 699 1,368
   GE revenues and other income excluding GE Capital
     earnings (loss) (Industrial revenues) (GAAP) $ 114,927 $ 108,371 $ 108,014 $ 103,900 $ 103,532

      Less: gains 3,444 1,497 91 453 186
      Less: NBCU - - - 1,528 1,615
   Adjusted Industrial revenues (Non-GAAP) $ 111,483 $ 106,874 $ 107,923 $ 101,919 $ 101,731
      Less: Alstom revenues 13,015 1,956 - - -
   Adjusted Industrial revenues ex. Alstom (Non-GAAP) $ 98,468 $ 104,918 $ 107,923 $ 101,919 $ 101,731

Costs
   GE total costs and expenses $ 103,860 $ 97,447 $ 98,427 $ 95,068 $ 94,081
     Less: GE interest and other financial charges 2,026 1,706 1,579 1,333 1,353
   Industrial costs excluding interest and other
     financial charges (GAAP) $ 101,834 $ 95,741 $ 96,848 $ 93,735 $ 92,728

      Less: gains (cost basis) - - - 6 -
      Less: non-operating pension cost (pre-tax) 2,052 2,764 2,120 2,624 2,132
      Less: restructuring and other charges 3,578 1,734 1,788 1,992 732
      Less: noncontrolling interests and 2015 GE Capital
       preferred stock dividends 279 229 372 53 (37)
   Adjusted Industrial costs (Non-GAAP) $ 95,925 $ 91,015 $ 92,567 $ 89,060 $ 89,901
      Less: Alstom costs and expenses 12,243 2,110 - - -
   Adjusted Industrial costs ex. Alstom (Non-GAAP) $ 83,682 $ 88,905 $ 92,567 $ 89,060 $ 89,901

   Industrial profit (GAAP) $ 13,093 $ 12,630 $ 11,166 $ 10,165 $ 10,804
   Industrial margins (GAAP) 11.4% 11.7% 10.3% 9.8% 10.4%

   Industrial operating profit (Non-GAAP) $ 15,558 $ 15,859 $ 15,356 $ 12,859 $ 11,831
   Industrial operating profit margins (Non-GAAP) 14.0% 14.8% 14.2% 12.6% 11.6%

   Industrial operating profit ex. Alstom (Non-GAAP) $ 14,786 $ 16,013 $ 15,356 $ 12,859 $ 11,830
   Industrial operating profit margins ex. Alstom (Non-GAAP) 15.0% 15.3% 14.2% 12.6% 11.6%
.

We have presented our Industrial operating profit and operating profit margin excluding gains, non-operating pension costs (pre-tax), restructuring and other, noncontrolling interests, GE Capital preferred stock dividends, as well as the results of Alstom. We believe that Industrial operating profit and operating profit margin adjusted for these items are meaningful measures because they increase the comparability of period-to-period results.

INDUSTRIAL OPERATING PROFIT + VERTICALS

(Dollars in millions) 2016 2015 2014 2013

Industrial operating profit (Non-GAAP)(a) $ 15,558 $ 15,859 $ 15,356 $ 12,859
Vertical earnings(b) 1,892 1,666 1,606 1,410
Industrial operating profit + Verticals (Non-GAAP) $ 17,450 $ 17,525 $ 16,962 $ 14,269

.

~~(a)~~

~~See Industrial Operating Profit and Operating Profit Margin reconciliation above for computation.~~

~~(b)~~

~~See Industrial Operating + Verticals earnings and EPS reconciliation above for computation.~~

We have presented our measure of Industrial operating profit and Vertical earnings, which is the sum of the Industrial operating profit used in measuring the operating margins of our industrial businesses and the net earnings of our Verticals businesses. See the reconciliations for these measures for additional information about the basis for the measures and explanation of why we believe these individual measures are helpful to management and our investors. We also believe that this measure, which combines an industrial business measure with the results of our Vertical financial services business provides management and investors with a measure that is aligned with the way in which we manage these businesses.

~~GE 2016 FORM 10-K 109~~

INDUSTRIAL SEGMENT GROSS MARGIN (EXCLUDING ALSTOM)

(Dollars in millions) 2016 2015

Industrial Sales $ 110,835 $ 106,206
Less: Corporate sales and eliminations (2,071) (1,858)
Industrial segment sales 112,906 108,064
Less: Alstom sales 13,096 1,953
Industrial segment sales excluding Alstom $ 99,810 $ 106,111

Industrial cost of sales $ 85,712 $ 80,828
Less: Corporate cost of sales and eliminations 3,315 2,026
Industrial segment cost of sales 82,397 78,802
Less: Alstom cost of sales 10,364 1,730
Industrial segment cost of sales excluding Alstom $ 72,033 $ 77,072

Industrial segment gross margin $ 30,509 $ 29,262
Industrial segment gross margin percentage 27.0% 27.1%

Industrial segment gross margin excluding Alstom $ 27,777 $ 29,039
Industrial segment gross margin percentage excluding Alstom 27.8% 27.4%

We have presented our segment gross margin excluding the results of our fourth quarter 2015 Alstom power and grid acquisition. We believe that industrial segment gross margin adjusted for the Alstom impacts is a meaningful measure because it increases the comparability of period-to-period results.

INDUSTRIAL SEGMENT OPERATING PROFIT AND OPERATING PROFIT MARGIN (EXCLUDING ALSTOM)

(Dollars in millions) 2016 2015 2014 2013 2012

Revenues
   Total industrial segment revenues (GAAP) $ 113,156 $ 108,796 $ 109,727 $ 103,383 $ 102,548
   Less: Alstom revenues 13,015 1,956 - - -
   Total industrial segment operating
      revenues excluding Alstom (Non-GAAP) $ 100,141 $ 106,840 $ 109,727 $ 103,383 $ 102,548

Segment profit (loss)
   Total industrial segment operating profit (GAAP) $ 17,598 $ 17,966 $ 17,764 $ 16,220 $ 15,487
   Total industrial segment operating profit margin (GAAP) 15.6% 16.5% 16.2% 15.7% 15.1%

   Less: Alstom profit (loss) $ 772 $ (154) $ - $ - $ -
   Total industrial segment operating profit
      excluding Alstom (Non-GAAP) $ 16,826 $ 18,120 $ 17,764 $ 16,220 $ 15,487
   Total industrial segment operating profit margin
     excluding Alstom (Non-GAAP) 16.8% 17.0% 16.2% 15.7% 15.1%
.

We have also presented results of our Power, Renewable Energy and Energy Connections & Lighting segments excluding the effects of the fourth quarter Alstom power and grid acquisition. These measurements included revenues, operating profit and margin excluding Alstom, the reconciliations for which are included in the segment sections within MD&A. We believe that metrics adjusted for the Alstom impacts are meaningful measures because they increase the comparability of period-to-period results.

~~GE 2016 FORM 10-K 110~~

AVERAGE GE SHAREOWNERS' EQUITY, EXCLUDING EFFECTS OF DISCONTINUED OPERATIONS(a)

(In millions) 2016 2015 2014 2013 2012

Average GE shareowners' equity(a) (GAAP) $ 86,412 $ 111,140 $ 131,914 $ 124,501 $ 120,401
Less the effects of the average net investment
in discontinued operations
2,854 27,910 45,455 44,948 41,399
Average GE shareowners' equity, excluding
effects of discontinued operations(b) (Non-GAAP)
$ 83,558 $ 83,230 $ 86,459 $ 79,553 $ 79,002

~~(a)~~

~~On an annual basis, calculated using a five-point average.~~

~~(b)~~

~~Used for computing Industrial return on total capital (ROTC).~~

Our Industrial ROTC calculation excludes earnings (losses) of discontinued operations from the numerator because GAAP requires us to display those earnings (losses) in the Statement of Earnings. Those earnings (losses) from discontinued operations include an allocation of interest expense either directly attributable or related to discontinued operations. Net investment in discontinued operations is calculated as assets of discontinued operations less liabilities of discontinued operations, including an allocation of GE Capital debt. Our calculation of average GE shareowners' equity may not be directly comparable to similarly titled measures reported by other companies. We believe that it is a clearer way to measure the ongoing trend in return on total capital for the continuing operations of our businesses given the extent that discontinued operations have affected our reported results. We believe that this results in a more relevant measure for management and investors to evaluate performance of our continuing operations, on a consistent basis, and to evaluate and compare the performance of our continuing operations with the ongoing operations of other businesses and companies.

Definitions indicating how the above-named ratios are calculated using average GE shareowners' equity, excluding effects of discontinued operations, can be found in the Other Items and Measures section within the MD&A.

AVERAGE GE CAPITAL SHAREOWNERS' EQUITY, EXCLUDING EFFECTS OF DISCONTINUED OPERATIONS(a)

(In millions) 2016 2015 2014 2013 2012

Average GE Capital shareowners' equity(a) (GAAP) $ 34,382 $ 67,930 $ 85,370 $ 83,358 $ 79,873
Less the effects of the average net
investment in discontinued operations 2,955 28,028 45,589 45,023 41,504

Average GE Capital shareowners' equity,
excluding effects of discontinued operations(b) (Non-GAAP) $ 31,427 $ 39,902 $ 39,781 $ 38,335 $ 38,369

~~(a)~~

~~On an annual basis, calculated using a five-point average.~~

~~(b)~~

~~Used for computing Industrial return on total capital (ROTC).~~

Our Industrial ROTC calculation excludes earnings (losses) of discontinued operations from the numerator because GAAP requires us to display those earnings (losses) in the Statement of Earnings. Our calculation of average GE Capital shareowners' equity may not be directly comparable to similarly titled measures reported by other companies. We believe that it is a clearer way to measure the ongoing trend in return on total capital for the continuing operations of our businesses given the extent that discontinued operations have affected our reported results. We believe that this results in a more relevant measure for management and investors to evaluate performance of our continuing operations, on a consistent basis, and to evaluate and compare the performance of our continuing operations with the ongoing operations of other businesses and companies.

~~GE 2016 FORM 10-K 111~~

INDUSTRIAL RETURN ON TOTAL CAPITAL (INDUSTRIAL ROTC)

(Dollars in millions) 2016 2015 2014 2013 2012

Earnings from continuing operations (GAAP) $ 9,494 $ 1,700 $ 9,490 $ 7,881 $ 8,816
Less: GE Capital earnings (loss) from continuing operations (606) (7,718) 1,537 716 1,378
Plus: GE after-tax interest 1,499 1,262 1,026 865 880
Adjusted Industrial return (Non-GAAP) $ 11,599 $ 10,680 $ 8,979 $ 8,030 $ 8,318

Average GE shareholders' equity, excluding effects
   of discontinued operations(a) $ 83,558 $ 83,230 $ 86,459 $ 79,553 $ 79,002
Less: average GE Capital's shareholders' equity,
   excluding effects of discontinued operations(a) 31,427 39,902 39,781 38,335 38,369
Average Industrial shareholders' equity, excluding
   effects of discontinued operations 52,131 43,328 46,678 41,218 40,633
Plus: average debt(a) 21,491 18,411 15,724 13,652 12,899
Plus: other, net(b) 1,924 1,486 1,743 1,367 (1,106)
Adjusted Industrial capital (Non-GAAP) $ 75,546 $ 63,225 $ 64,145 $ 56,237 $ 52,426

Industrial ROTC 15.4 % 16.9 % 14.0 % 14.3 % 15.9 %

~~(a)~~

~~On an annual basis, calculated using a five-point average.~~

~~(b)~~

~~Includes average noncontrolling interests, calculated using a five-point average partially offset by the estimated value of assets held by GE to support GE Capital.~~

Our Industrial ROTC calculation excludes earnings (losses) of discontinued operations from the numerator. We believe that this is a clearer way to measure the ongoing trend in return on Industrial capital for the continuing operations of the business to the extent that discontinued operations have affected our reported results. Our Industrial shareowners' equity used in the denominator is adjusted for debt, redeemable noncontrolling interests and noncontrolling interests. We believe that these adjustments provide a more meaningful denominator in measuring the return on our industrial businesses. Industrial ROTC was 15.4% in 2016 versus 16.9% in 2015 and 14.0% in 2014. In 2016, an 8.6% increase in the adjusted Industrial return was combined with a 19.5% increase in the adjusted Industrial capital. This increase in capital was principally driven by increased debt and effects from Alstom redeemable noncontrolling interests. Our calculation of the return on Industrial capital may not be directly comparable to similarly titled measures reported by other companies. We believe that the adjustments described above result in a more relevant measure for management and investors to evaluate performance of our Industrial continuing operations, on a consistent basis, and to evaluate and compare the performance of our Industrial continuing operations with the continuing operations of other businesses and companies.

~~GE 2016 FORM 10-K 112~~

INDUSTRIAL CASH FLOWS FROM OPERATING ACTIVITIES (INDUSTRIAL CFOA) AND INDUSTRIAL CFOA
EXCLUDING TAXES RELATED TO BUSINESS SALES AND PRINCIPAL PENSION PLAN FUNDING

(In millions) 2016 2015 2014 2013

Cash from GE's operating activities (continuing operations),
as reported (GAAP) $ 29,960 $ 16,354 $ 15,171 $ 14,255
Adjustment: dividends from GE Capital 20,095 4,300 3,000 5,985
Industrial CFOA (Non-GAAP) $ 9,865 $ 12,054 $ 12,171 $ 8,270
Adjustment: taxes related to business sales 1,398 184 - 3,184
Adjustment: Principal pension plan funding 347 - - -
Industrial CFOA excluding deal-related taxes and
Principal pension plan funding (Non-GAAP) $ 11,610 $ 12,238 $ 12,171 $ 11,454

GE CASH FLOWS FROM OPERATING ACTIVITIES (GE CFOA) EXCLUDING TAXES RELATED TO BUSINESS SALES
AND PRINCIPAL PENSION PLAN FUNDING

(In millions) 2016 2015 2014 2013

Cash from GE's operating activities (continuing operations),
as reported (GAAP) $ 29,960 $ 16,354 $ 15,171 $ 14,255
Adjustment: taxes related to business sales 1,398 184 - 3,184
Adjustment: Principal pension plan funding 347 - - -
GE CFOA excluding deal-related taxes and
Principal pension plan funding (Non-GAAP) $ 31,705 $ 16,538 $ 15,171 $ 17,439

We define "Industrial CFOA" as GE's cash from operating activities (continuing operations) less the amount of dividends received by GE from GE Capital. This reflects the effects of intercompany transactions, which include, but are not limited to, the following: GE Capital working capital solutions to optimize GE cash management; GE Capital enabled GE industrial orders; aircraft engines, power equipment and healthcare equipment manufactured by GE that are installed on GE Capital investments, including leased equipment; expenses related to parent-subsidiary pension plans; buildings and equipment leased between GE and GE Capital, including sale-leaseback transactions; information technology (IT) and other services sold to GE Capital by GE; and various investments, loans and allocations of GE corporate overhead costs.

We believe that investors may find it useful to compare GE's operating cash flows without the effect of GE Capital dividends, since these dividends are not representative of the operating cash flows of our industrial businesses and can vary from period to period based upon the results of the financial services businesses. We also believe that investors may find it useful to compare Industrial CFOA and GE CFOA excluding the effects of taxes paid related to the sales of the Appliances, Signaling and NBCU LLC businesses and contributions to our principal pension plans. Management recognizes that these measures may not be comparable to cash flow results of companies which contain both industrial and financial services businesses, but believes that this comparison is aided by the provision of additional information about the amounts of dividends paid by our financial services business and the separate presentation in our financial statements of the GE Capital cash flows. We believe that our measure of Industrial CFOA, and both Industrial CFOA and GE CFOA excluding such sale-related taxes and pension contributions (representing net sale proceeds associated with the July 1, 2016 sale of GEAM to State Street Corporation) provides management and investors with useful measures to compare the capacity of our industrial operations to generate operating cash flow with the operating cash flow of other non-financial businesses and companies and as such provides useful measures to supplement the reported GAAP CFOA measure.

~~GE 2016 FORM 10-K 113~~

FREE CASH FLOW (FCF) AND FCF PLUS DISPOSITIONS

(In millions) 2016 2015 2014

Cash from GE's operating activities (continuing operations) (GAAP) $ 29,960 $ 16,354 $ 15,171
Less: GE additions to property, plant and equipment 3,758 3,785 3,970
Plus: GE dispositions of property, plant and equipment 1,080 939 615
Free cash flow (Non-GAAP) 27,282 13,508 11,816
Plus: GE proceeds from principal business dispositions 5,357 1,725 602
Free cash flow plus dispositions (Non-GAAP) 32,639 15,233 12,418

We define free cash flow as GE's cash from operating activities (continuing operations) less GE additions to property, plant and equipment and plus GE dispositions of property, plant and equipment, which are included in cash flows from investing activities. We believe that free cash flow is a useful financial metric to assess our ability to pursue opportunities to enhance our growth. We also believe that presenting free cash flow plus proceeds from business dispositions provides investors with useful information about the company's actual performance against performance targets. Management recognizes that the term free cash flow may be interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the respective businesses or companies and may therefore be a useful tool in assessing period-to-period performance trends.

RATIO OF ADJUSTED DEBT TO EQUITY AT GE CAPITAL, NET OF LIQUIDITY

December 31 (Dollars in millions) 2016 2015 2014 2013 2012

GE Capital debt $ 117,303 $ 180,178 $ 245,252 $ 283,820 $ 315,172
Plus: debt of businesses held for sale
and discontinued operations 2,076 31,075 105,687 86,546 81,229
Adjusted GE Capital debt 119,379 211,253 350,939 370,366 396,401
Less: liquidity(a) 49,100 70,497 54,109 65,492 52,810
Less: cash of businesses held for
sale and discontinued operations 1,429 20,395 22,243 9,617 9,308
$ 68,849 $ 120,361 $ 274,587 $ 295,256 $ 334,283

GE Capital equity $ 24,677 $ 46,227 $ 87,499 $ 82,694 $ 81,889

Ratio 2.79:1 2.6:1 3.14:1 3.57:1 4.08:1

~~(a)~~

~~Liquidity includes cash and equivalents and $11.5 billion of high quality investments at December 31, 2016.~~

We have provided the GE Capital ratio of debt to equity on a basis that reflects the use of liquidity as a reduction of debt. For purposes of this ratio, we have also adjusted cash and debt balances to include amounts classified as assets and liabilities of businesses held for sale and discontinued operations. We believe that this is a useful comparison to a GAAP-based ratio of debt to equity because liquidity balances may be used to reduce debt. The usefulness of this supplemental measure may be limited, however, as the total amount of liquidity at any point in time may be different than the amount that could practically be applied to reduce outstanding debt. Despite this potential limitation, we believe that this measure, considered along with the corresponding GAAP measure, provides investors with additional information that may be more comparable to other financial institutions and businesses.

~~GE 2016 FORM 10-K 114~~

CAPITAL ENDING NET INVESTMENT (ENI), EXCLUDING LIQUIDITY

December 31 (In billions) 2016 2015 2014(a)

GE Capital total assets (GAAP) $ 183.0 $ 311.5 $ 500.2
   Less: assets of discontinued operations 14.8 120.9 1.2
   Less: non-interest bearing liabilities 37.4 38.8 60.5
Capital ENI (Non-GAAP) 130.7 151.8 438.5
   Less: liquidity(b) 49.1 70.5 75.5
Capital ENI, excluding liquidity (Non-GAAP) $ 81.6 $ 81.3 $ 363.0
   Plus: Discontinued operations ENI 11.2 84.9 (0.1)
Total ENI (excluding liquidity) including discontinued operations (Non-GAAP) $ 92.8 $ 166.2 $ 362.9

~~(a)~~

~~As originally reported.~~

~~(b)~~

~~Liquidity includes cash and equivalents and $11.5 billion of high quality investments at December 31, 2016.~~

We use ENI to measure the size of our Capital segment. We believe that this measure is a useful indicator of the capital (debt or equity) required to fund a business as it adjusts for non-interest bearing current liabilities generated in the normal course of business that do not require a capital outlay. We also believe that by excluding liquidity, we provide a meaningful measure of assets requiring capital to fund our Capital segment as a substantial amount of liquidity resulted from debt issuances to pre-fund future debt maturities and will not be used to fund additional assets. Liquidity consists of cash and equivalents and certain high quality investments. As a general matter, investments included in liquidity are expected to be highly liquid, giving us the ability to readily convert them to cash. Providing this measure will help investors measure how we are performing against our previously communicated goal to reduce the size of our financial services segment.

~~2017 OPERATING FRAMEWORK INCLUDING 2017 INDUSTRIAL OPERATING + VERTICALS EPS TARGET~~

~~2017 Industrial operating + Verticals EPS Target$1.60-1.70~~

~~Items not included in non-GAAP metric:~~

1)~~Non-operating pension cost, which we estimate to be approximately $(0.16) – (0.17) per share.~~

2)~~Capital Other continuing earnings (excluding Verticals), which we estimate to be approximately $(0.03) – (0.12) per share. This amount is affected by, among other things:~~

~~• The timing of when, and the amount by which, the Company pays down GE Capital's outstanding debt; and~~

~~• The timing and magnitude of the remaining costs associated with GE Capital's Exit Plan.~~

Note: The company cannot provide an equivalent GAAP EPS guidance range without unreasonable effort because of the uncertainty of the amount and timing of events affecting earnings as we execute the GE Capital Exit Plan. Although we have attempted to estimate GE Capital's Other continuing earnings for the purpose of explaining the probable significance of this component, as described under number 2, this calculation involves a number of unknown variables, resulting in a GAAP range that we believe is too large and variable to be meaningful.

It is also impractical to provide a reconciliation for our organic revenue, Industrial operating margin expansion and Free Cash Flow plus Dispositions targets as these involve a number of unknown variables including the effects of future acquisitions, dispositions, restructuring activities, property plant and equipment purchases and dispositions and currency exchange.

~~GE 2016 FORM 10-K 115~~

~~OTHER FINANCIAL DATA~~

~~SELECTED FINANCIAL DATA~~

(Dollars in millions; per-share amounts in dollars) 2016 2015 2014 2013 2012
General Electric Company and Consolidated Affiliates
   Revenues and other income
$ 123,693 $ 117,386 $ 117,184 $ 113,245 $ 112,588
      Earnings from continuing operations attributable to the Company 9,784 1,681 9,535 7,618 8,646
      Earnings (loss) from discontinued operations, net of taxes,

         attributable to the Company (952) (7,807) 5,698 5,439 4,995
   Net earnings (loss) attributable to the Company
8,831 (6,126) 15,233 13,057 13,641
   Dividends declared(a)
9,054 9,161 8,948 8,060 7,372
   Return on average GE shareowners' equity
10.9 % 1.6 % 10.8 % 9.5 % 10.9 %
   Per common share

      Earnings from continuing operations – diluted
$ 1.00 $ 0.17 $ 0.94 $ 0.74 $ 0.82
      Earnings (loss) from discontinued operations – diluted
(0.10) (0.78) 0.56 0.53 0.47
      Net earnings (loss) – diluted
0.89 (0.61) 1.50 1.27 1.29
      Earnings from continuing operations – basic
1.01 0.17 0.95 0.74 0.82
      Earnings (loss) from discontinued operations – basic
(0.11) (0.78) 0.57 0.53 0.47
      Net earnings (loss) – basic
0.90 (0.62) 1.51 1.28 1.29
      Dividends declared
0.93 0.92 0.89 0.79 0.70
      Stock price range
33.00 -27.10 31.49 -19.37 27.94-23.69 28.09-20.68 23.18-18.02
      Year-end closing stock price
31.60 31.15 25.27 28.03 20.99
   Cash and equivalents 48,129 70,483 70,025 79,175 68,225
   Total assets of continuing operations 350,368 372,120 330,637 332,998 338,675
   Total assets 365,183 493,071 653,931 662,202 690,415
   Long-term borrowings 105,080 144,659 185,832 216,640 228,443
   Common shares outstanding – average (in thousands) 9,025,479 9,944,179 10,044,995 10,222,198 10,522,922
   Common shareowner accounts – average 450,000 470,000 490,000 512,000 537,000
   Employees at year end
     United States 104,000 125,000 136,000 135,000 134,000
     Other countries 191,000 208,000 169,000 172,000 171,000
Total employees(c) 295,000 333,000 305,000 307,000 305,000
GE data
   Short-term borrowings(d)
$ 20,482 $ 19,792 $ 3,872 $ 1,841 $ 6,041
   Long-term borrowings(d)
58,810 83,309 12,421 11,484 11,393
   Redeemable noncontrolling interests 3,025 2,972 98 176 183
   Noncontrolling interests
1,378 1,378 825 835 777
   GE shareowners' equity
75,828 98,274 128,159 130,566 123,026
      Total capital invested
$ 159,523 $ 205,725 $ 145,375 $ 144,903 $ 141,420
   Industrial return on total capital(b)*
15.4 % 16.9 % 14.0 % 14.3 % 15.9 %
   Borrowings as a percentage of total capital invested(b)
49.7 % 50.1 % 11.2 % 9.2 % 12.3 %
GE Capital data
   Revenues
$ 10,905 $ 10,801 $ 11,320 $ 11,267 $ 11,268
      Earnings (loss) from continuing operations attributable to GE Capital (595) (7,654) 1,532 699 1,368
      Earnings (loss) from discontinued operations, net of taxes,
         attributable to GE Capital (954) (7,485) 5,860 5,540 4,901
      Less net earnings (loss) attributable to noncontrolling interests,
         discontinued operations (1) 312 157 36 53
   Net earnings (loss) attributable to GE Capital
(1,548) (15,450) 7,234 6,204 6,216
   Net earnings (loss) attributable to GE Capital common shareowner
(2,204) (15,780) 6,912 5,906 6,092
   GE Capital shareowners' equity
24,677 46,227 87,499 82,694 81,889
   Total borrowings(e)
117,303 180,178 245,252 283,820 315,172
   Ratio of debt to equity at GE Capital(f)
4.75:1 3.90:1 2.80:1 3.43:1 3.85:1
   Total assets(g)
$ 182,970 $ 311,508 $ 499,614 $ 517,717 $ 538,802

~~Transactions between GE and GE Capital have been eliminated from the consolidated information.~~

~~(a)~~

~~Included $656 million and $18 million of preferred stock dividends in 2016 and 2015, respectively.~~

~~(b)~~

~~Indicated terms are defined in the Other Terms used by GE section within the MD&A.~~

~~(c)~~

~~For 2015, includes 55,500 employees as a result of the Alstom acquisition.~~

~~(d)~~

~~Excluding assumed debt of GE Capital, GE total borrowings is $20,512 million at December 31, 2016.~~

~~(e)~~

~~Included $58,780 million of GE Capital debt assumed by GE and maintained as intercompany payable to GE at December 31, 2016.~~

~~(f)~~

Ratios of 2.79:1, 2.6:1, 3.14:1, 3.57:1, and 4.08:1 for 2016, 2015, 2014, 2013 and 2012, respectively, net of liquidity*. For purposes of these ratios, cash and debt balances have been adjusted to include amounts classified as assets and liabilities of businesses held for sale and discontinued operations.

~~(g)~~

~~GE Capital's total assets includes deferred income tax liabilities, which are presented within assets for purposes of our consolidating balance sheet presentation.~~

*Non-GAAP Financial Measure

GE ~~2016~~2019 FORM 10-K ~~116~~ 44

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Approximate
dollar value
Total number of shares that
of shares may yet be
purchased purchased
as part of under our
Total number Average our share share
of shares price paid repurchase repurchase
Period purchased(a) per share program(b) program(b)
(Shares in thousands)

2016
October 32,338 $ 27.39 32,265
November 20,805 30.16 20,791
December(c) 74,390 31.60 74,390
Total 127,533 $ 30.30 127,446 $ 24.7 billion

~~(a)~~
	~~This category included 87 thousand shares repurchased from our various benefit plans.~~
MD&A	NON-GAAP FINANCIAL MEASURES

The following discussion of risk factors contains "forward-looking statements," as discussed in the Forward-Looking Statements section. These risk factors may be important to understanding any statement in this ~~Annual Report on~~ Form 10-K report or elsewhere. The risks described below should not be considered a complete list of potential risks that we may face. The following information should be read in conjunction with the ~~Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)~~MD&A section and the consolidated financial statements and related notes.

~~We leverage the risk framework~~ The risks we describe in ~~each~~this Form 10-K report or in our other SEC filings could have a material adverse effect on our business, reputation, financial position and results of ~~our businesses, which have adopted approaches that correspond to the Company's overall risk policies, guidelines~~operations, and ~~review mechanisms. Our risk framework operates at the business and functional levels and is designed to identify, evaluate and mitigate risks within each of the risk categories below.~~

~~Our businesses routinely encounter and address risks, some of which will~~they could cause our future results to be ~~different – sometimes~~ materially different – than we presently anticipate. Below, we describe certain important strategic, operational, financial, and legal and compliance risks. Our reactions to material future developments as well as our competitors' reactions to those developments will affect our future results.

STRATEGIC ~~RISKS~~

RISKS. Strategic risk relates to the Company's future business plans and strategies, including the risks associated with: the global ~~macro-environment in which we operate; mergers~~macro-environment; our portfolio of businesses and capital allocation decisions; dispositions, acquisitions, joint ventures and restructuring activity; ~~intellectual property; and other risks, including~~competitive threats, the demand for our products and services ~~competitive threats,~~and the success of our investments in ~~our Digital business,~~ technology and innovation; intellectual property; and other ~~product and service innovations, and public policy.~~risks.

Global macro-environment - Our growth is subject to global economic, political and ~~political~~geopolitical risks.

We operate in virtually every part of the world, ~~and~~ serve customers in ~~approximately 180 countries. In 2016, 57%~~over 170 countries and received 59% of our ~~revenue was attributable to activities~~revenues for 2019 from outside the United States. Our operations and the execution of our business plans and strategies are subject to the effects of global economic trends, competition and geopolitical ~~risks.~~risks and demand or supply shocks from war, natural disaster, a health pandemic or other events. They are also affected by local and regional economic environments and policies in the U.S. and other markets that we serve, including ~~low~~ interest rates, monetary policy, inflation, economic growth, recession, commodity prices, currency volatility, currency controls or other limitations on the ability to expatriate cash, debt levels and actual or anticipated ~~default~~defaults on sovereign debt. For example, changes in local economic conditions or outlooks, such as lower rates of investment or economic growth in China, Europe or other key markets, affect the demand for or profitability of our products and services outside the U.S., and the impact on the Company could be significant given the extent of our activities outside the United States. Political changes and trends such as populism, protectionism, economic nationalism and sentiment toward multinational companies and resulting changes to trade, tax or other laws and policies (including tariffs) have been and may continue to be disruptive and costly to our businesses, and can interfere with our global operating model, ~~our~~ supply chain, production costs, customer relationships and competitive position. Further escalation of specific trade tensions, such as those between the U.S. and China, or in global trade conflict more broadly could lead to a significant deterioration of global growth, and related decreases in confidence or investment activity in the global markets would adversely affect our ~~customers~~business performance. We also do business in many emerging market jurisdictions where economic, political and ~~all of our activities in a particular location.~~legal risks are heightened. While some ~~global~~types of these economic ~~and political~~ risks can be hedged using derivatives or other financial instruments and some are insurable, such attempts to mitigate these risks are costly and not always successful ~~and our ability to engage in such mitigation may decrease or become even more costly as a result of more volatile market conditions.~~.

GE2019 FORM 10-K 50



RISK FACTORS

~~GE 2016 FORM 10-K 120~~

~~M&A/restructuring~~Portfolio strategy execution - ~~The~~Our success ~~of our business~~ depends on achieving our strategic and financial objectives, including through ~~acquisitions~~dispositions. We are pursuing a variety of dispositions, including the planned sale of our BioPharma business within our Healthcare segment and exiting our remaining equity ownership position in Baker Hughes. The proceeds that we expect to receive from such actions are an important source of cash flow for the Company as part of our strategic and financial planning. As we seek to sell certain businesses, equity interests or assets, we may encounter difficulty in finding buyers, managing interdependencies across multiple transactions and other Company initiatives or implementing separation plans, which could delay or prevent the accomplishment of our strategic and financial objectives, including our goal of reducing the Company’s leverage to targeted levels over time. In particular, some of the disposition strategies that we are considering or may consider depend on favorable conditions in the capital markets or private acquisition financing markets for execution, and declines in the values of equity interests (such as our remaining interest in Baker Hughes) or other assets that we sell can diminish the cash proceeds that we realize. We may dispose of businesses or assets at a price or on terms that are less favorable than we had anticipated, or with purchase price adjustments or the exclusion of assets or liabilities that must be divested, managed or run off separately. We are also subject to limitations in the form of regulatory or governmental approvals that may prevent certain prospective purchasers from completing transactions with us or delay us from executing transactions on our preferred timeline, or arising from our debt or other contractual obligations that limit our ability to complete certain business ~~integrations, joint ventures,~~or asset dispositions. Moreover, recent and planned dispositions have the effects of reducing the Company’s cash flow and ~~restructurings.~~earnings capacity, resulting in a less diversified portfolio of businesses and increasing our dependency on remaining businesses for our financial results from ongoing operations. Executing on these transactions can divert senior management time and resources from other pursuits. Dispositions or other business separations also often involve continued financial involvement in the divested business, such as through continuing equity ownership, retained assets or liabilities, transition services agreements, commercial agreements, guarantees, indemnities or other current or contingent financial obligations or liabilities. Under these arrangements, performance by the divested businesses or other conditions outside our control could materially affect our future financial results.

With respect to acquisitions, joint ventures and ~~restructuring actions,~~business integrations, we may not achieve expected returns and other benefits as a result of ~~various factors, including~~ changes in strategy or separation/integration ~~and collaboration~~ challenges ~~such as~~related to personnel, ~~and technology. Restructuring actions~~IT systems or other factors. In addition, in connection with acquisitions ~~or otherwise may also give rise~~over time, we have recorded significant goodwill and other intangible assets on our balance sheet, and if we are not able to ~~reputational risk, or such actions may not achieve anticipated cost savings and may result in lower margin rates. For example, our anticipated returns from mergers and acquisitions such as~~realize the ~~Alstom acquisition in 2015 or the combination~~value of ~~our Oil & Gas business with Baker Hughes that was announced in October 2016 include cost and growth synergy benefits over a multi-year period that~~these assets, we may ~~not fully realize.~~be required to incur charges relating to the impairment of these assets. We also participate in a number of joint ventures with other companies or government enterprises in various markets around the world, including joint ventures where we ~~may~~ have a lesser degree of control over the business operations, which may expose us to additional operational, financial, legal or compliance ~~risks.~~risks.

Competitive environment - We are dependent on the maintenance of existing product lines and service relationships, market acceptance of new product and service introductions and technology and innovation leadership for revenue and earnings growth. The markets in which we operate are highly competitive in terms of pricing, product and service quality, product development and introduction time, customer service, financing terms and shifts in market demand, and competitors are increasingly offering services for our installed base. Our long-term operating results and competitive position depend substantially upon our ability to continually develop, introduce, and market new and innovative products, services and platforms, to modify existing products and services, to customize products and services, to increase our productivity as we perform on long-term service agreements, and to anticipate and respond to market and technological changes driven by trends such as increased digitization or automation or by developments such as climate change that present both risks and opportunities for our businesses. A failure to appropriately plan for future customer demand and industry trends may adversely affect our delivery of products, services and outcomes in line with our projected financial performance or cost estimates, and ultimately may result in excess costs, build-up of inventory that becomes obsolete, lower profit margins and an erosion of our competitive position. For example, the significant decreases in recent years in the levelized cost of renewable sources of power generation (such as wind and solar), along with ongoing changes in investor and consumer preferences and considerations related to climate change, affect the demand for and the competitiveness of our products and services related to fossil fuel-based power generation and further changes over time could have a material adverse effect on the performance of those businesses and our consolidated results. These trends and the relative competitiveness of different types of product and service offerings will continue to be impacted in ways that are uncertain by factors such as the pace of technological developments and related cost considerations, the levels of economic growth in different markets around the world and the adoption of climate change-related policies (such as carbon taxes, cap and trade regimes, increased efficiency standards or incentives or mandates for particular types of energy) at the national and sub-national levels or by private actors.

Our businesses are also subject to technological change and require us to continually attract and retain skilled talent. The introduction of innovative and disruptive technologies in the markets in which we operate also poses risks in the form of new competitors (including new entrants from outside our traditional industries), market consolidation, substitutions of existing products, services or solutions, niche players, new business models and competitors that are faster to market with new or more cost-effective products or services. Because the research and development cycle involved in bringing products in our businesses to market is often lengthy, it is inherently difficult to predict the economic conditions and competitive dynamics that will exist when any new product is complete, and our investments may generate weaker returns than we anticipated at the outset. Our capacity to invest in research and development efforts to pursue advancement in a wide range of technologies, products and services also depends on the financial resources that we have available for such investment relative to other capital allocation priorities, and under-investment could lead to the loss of sales of our products and services. The amounts that we do invest in research and development divert resources from other potential investments in our businesses, and our efforts may not lead to the development of new technologies or products on a timely basis or meet the needs of our customers as fully as competitive offerings.

GE2019 FORM 10-K 51



RISK FACTORS

Restructuring & personnel - We have been ~~selling~~undertaking extensive cost reduction and restructuring efforts; these efforts may have adverse effects on our operations, employee retention, results and reputation and may not achieve the expected benefits. We continue undertaking restructuring actions that include workforce reductions, global facility consolidations and other cost reduction initiatives. These actions are a central component of our ongoing efforts to improve operational and financial ~~assets~~performance. The extent of change across our organizational structure, senior leadership, culture, functional alignment, outsourcing and ~~businesses~~other areas poses risks in ~~numerous transactions in connection~~the form of personnel capacity constraints and institutional knowledge loss that could lead to missed performance or financial targets, loss of key personnel and harm to our reputation. The risk of capacity constraints is also heightened with the ~~GE Capital Exit Plan,~~number of interdependent and transformational business portfolio and internal actions that we ~~also continue~~have been undertaking during a period of significant restructuring and cost reduction across the Company. Moreover, if we do not successfully manage our restructuring and other transformational activities, the anticipated operational improvements, efficiencies and other benefits might be delayed or not realized, and our operations and business could be disrupted. Risks associated with these actions include unforeseen delays in implementation of workforce reductions, additional unexpected costs, adverse effects on employee morale, loss of key employees or other retention issues, inability to ~~evaluate~~attract and hire talented professionals or the ~~potential disposition~~failure to meet operational targets due to the loss of ~~other assets and businesses that may no longer help us meet our objectives. When we decide to sell assets~~employees or ~~a business, we may encounter difficulty in finding buyers or executing alternative exit strategies on acceptable terms in a timely manner, which could delay the accomplishment~~work stoppages, any of our strategic objectives. Alternatively, we may dispose of a business at a price or on terms that are less favorable than we had anticipated, or with the exclusion of assets that must be divested or run off separately. After reaching an agreement with a buyer or seller for the acquisition or disposition of a business, such as the proposed combination of our Oil & Gas business with Baker Hughes, the transaction remains subject to necessary regulatory and governmental approvals on acceptable terms as well as the satisfaction of pre-closing conditions, which may ~~prevent us from completing the transaction. Dispositions~~impair our ability to achieve anticipated cost reductions or may ~~also involve continued~~otherwise harm our business or reputation and have an adverse effect on our competitive position or financial involvement in the divested business, such as through continuing equity ownership, transition service agreements, guarantees, indemnities or other current or contingent financial obligations. Under these arrangements, performance ~~by the divested businesses or other conditions outside our control could affect our future financial results.~~.

Intellectual property - Our intellectual property portfolio may not prevent competitors from independently developing products and services similar to or duplicative to ours, and the value of our intellectual property may be negatively impacted by external dependencies.

Our patents and other intellectual property may not prevent competitors from independently developing or selling products and services similar to or duplicative of ours, and there can be no assurance that the resources invested by us to protect our intellectual property will be sufficient or that our intellectual property portfolio will adequately deter misappropriation or improper use of our technology. Trademark licenses of the GE brand in connection with dispositions may negatively impact the overall value of the brand in the future. As a result of increased numbers of employee exits due to restructuring activities or otherwise, we also face heightened risks related to the loss or unauthorized use of the Company’s intellectual property or other protected data. We ~~could~~ also face competition in some countries where we have not invested in an intellectual property portfolio. If we are not able to protect our intellectual property, the value of our brand and other intangible assets may be diminished, and our business may be adversely affected. We also face attempts to gain unauthorized access to our IT systems or products for the purpose of improperly acquiring our trade secrets or confidential business information. The theft or unauthorized use or publication of our trade secrets and other confidential business information as a result of such an incident could adversely affect our competitive position and the value of our investment in research and development. In addition, we ~~may be~~are subject to the ~~target of~~ enforcement of patents or other intellectual property by third parties, including aggressive and opportunistic enforcement claims by non-practicing entities. Regardless of the merit of such claims, responding to infringement claims can be expensive and time-consuming. If GE is found to infringe any third-party rights, we could be required to pay substantial damages or we could be enjoined from offering some of our products and services. The value of, or our ability to use, our intellectual property may also be negatively impacted by dependencies on third parties, such as our ability to obtain or renew on reasonable terms licenses that we need in the future, or our ability to secure or retain ownership or rights to use data in certain software analytics or services ~~offerings.~~offerings.

~~GE 2016 FORM 10-K 121~~

OPERATIONAL ~~RISKS~~

RISKS. Operational risk relates to risks arising from systems, processes, people and external events that affect the operation of our businesses. It includes risks related to product ~~life cycle~~and service lifecycle and execution; product safety and performance; information management and data protection and security, including cybersecurity; and supply chain and business ~~disruption; and other risks, including human resources and reputation.~~disruption.

~~Operations~~Operational execution - ~~We may face operational~~Operational challenges ~~that~~ could have a material adverse effect on our business, reputation, financial position and results of ~~operations, and we are dependent~~operations. The Company’s financial results depend on the ~~maintenance~~successful execution of ~~existing product lines, market acceptance~~our businesses’ operating plans across all steps of ~~new~~the product and service ~~introductions~~lifecycle. For example, we continue working to improve the operations and execution of our Power and Renewable Energy businesses, and our ability to effect the desired operational turnarounds will be a significant factor in determining the financial performance of the Company as a whole. In addition, we have dependency on the continued strength and successful operating plan execution of our other businesses, particularly Aviation, during this period of operational improvement. Operational failures that result in quality problems or potential product, environmental, health or safety risks, could have a material adverse effect on our business, reputation, financial position and ~~service innovations~~results of operations. In addition, a portion of our business, particularly within our Power and Renewable Energy businesses, involves large projects where we take on, or are members of a consortium responsible for, ~~continued revenue~~the full scope of engineering, procurement, construction or other services. These types of projects often pose unique risks related to their location, scale, complexity, duration and ~~earnings growth.~~pricing or payment structure. Performance issues or schedule delays can arise due to inadequate technical expertise, unanticipated project modifications, developments at project sites, environmental, health and safety issues, execution by or coordination with suppliers, subcontractors or consortium partners, financial difficulties of our customers or significant partners or compliance with government regulations, and these can lead to cost overruns, contractual penalties, liquidated damages and other adverse consequences. Where GE is a member of a consortium, we are typically subject to claims based on joint and several liability, and claims can extend to aspects of the project or costs that are not directly related or limited to GE’s scope of work. Operational, quality or other issues at large projects, or across our projects portfolio more broadly, can adversely affect GE’s business, reputation or results of operations.

GE2019 FORM 10-K 52



RISK FACTORS

Product safety - Our products and services are highly sophisticated and specialized, and a major failure or similar event affecting our products or third-party products with which our products are integrated can adversely affect our business, reputation, financial position and results of operations. We produce highly sophisticated products and provide specialized services for both our own and third-party products that incorporate or use complex or leading-edge technology, including both hardware and software. Many of our products and services involve complex industrial machinery or infrastructure projects, such as commercial jet engines, gas turbines, onshore and offshore ~~oil and gas drilling~~wind turbines or nuclear power generation, and accordingly the impact of a catastrophic product failure or similar event could be significant. In particular, actual or perceived design or production issues related to new product introductions or relatively new product lines can result in significant reputational harm to our businesses, in addition to direct warranty, maintenance and other costs that may arise. A significant product issue resulting in injuries or death, widespread outages, a fleet grounding or similar systemic consequences could have a material adverse effect on our business, reputation, financial position and results of operations. We may also incur increased costs, delayed payments or lost equipment or services revenue in connection with a significant issue with a third party’s product with which our products are integrated. For example, the LEAP-1B engine that our Aviation business develops, produces and sells through CFM is the exclusive engine for the Boeing 737 MAX, which has been subject to a global fleet grounding since March 2019 following two fatal crashes that were unrelated to the LEAP engine. The 737 MAX grounding had an adverse effect on GE CFOA in 2019, and uncertainties related to the timing for the 737 MAX return to service and future engine production rates pose material risk for our Aviation business and GE’s overall financial outlook and results. For further information regarding the effect of the 737 MAX grounding on GE CFOA, see the Aviation and GECAS 737 MAX section in Consolidated Results within MD&A. While we have built ~~extensive~~ operational processes to ensure that our product design, manufacture, performance and servicing ~~and other services that we provide,~~ meet ~~the most~~ rigorous quality standards, there can be no assurance that we or our customers or other third parties will not experience operational process or product failures orand other problems, including through ~~cyber attacks and~~manufacturing or design defects, process or other failures of contractors or third-party suppliers, cyber-attacks or other intentional acts, that could result in potential product, safety, quality, regulatory or environmental risks. Despite the existence of crisis management or business continuity plans, operational failures or quality issues, including as a result of organizational changes, attrition or labor relations, could have a material adverse effect on our business, reputation, financial position and results of operations. For projects where we take on the full scope of engineering, procurement, construction or other services, the potential risk is greater that operational, quality or other issues at particular projects could adversely affect GE's results of operations. The markets in which we operate are also subject to technological change and require skilled talent. Our long-term operating results and competitive position depend substantially upon our ability to continually develop, introduce, and market new and innovative products and services, to modify existing products and services, to customize products and services, to anticipate and respond to market and technological changes driven by emerging risks and opportunities such as increased digitization or climate change and to deliver products, services and outcomes in line with our projected performance and/or cost estimates.

Cybersecurity - Increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted computer crime ~~could~~ pose a risk to our systems, networks, products, solutions, services and data.

Increased global cybersecurity vulnerabilities, threats, computer viruses and more sophisticated and targeted cyber-related attacks, as well as cybersecurity failures resulting from human error and technological errors, pose a risk to the security of GE's and its customers', partners', suppliers' and third-party service providers' infrastructure, products, systems and networks and the confidentiality, availability and integrity of GE's and its customers' data. As the perpetrators of such attacks become more capable (including sophisticated state or state-affiliated actors), and as critical infrastructure is increasingly becoming digitized, the risks in this area continue to grow. While we attempt to mitigate these risks by employing a number of measures, including employee training, monitoring and testing, and maintenance of protective systems and contingency plans, we remain ~~potentially~~ vulnerable to ~~additional~~ known or unknown ~~threats.~~threats, and there is no assurance that the impact from such threats will not be material. In addition to existing risks, the adoption of new technologies in the future may also increase our exposure to cybersecurity breaches and failures. We also ~~may~~ have access to sensitive, confidential or personal data or information in certain of our businesses that is subject to privacy and security laws, regulations or customer-imposed controls. Despite our ~~efforts~~use of reasonable and appropriate controls to protect our systems and sensitive, confidential or personal data or information, we ~~may be vulnerable~~have vulnerability to ~~material~~ security breaches, theft, misplaced, lost or ~~lost~~corrupted data, programming errors, employee errors and/or malfeasance (including misappropriation by departing employees) that could potentially lead to ~~the~~material compromising of sensitive, confidential or personal data or information, improper use of our systems, software solutions or networks, unauthorized access, use, disclosure, modification or destruction of information, defective products, production downtimes and operational disruptions. Data privacy and protection laws are evolving, can vary significantly by country and present increasing compliance challenges, which increase our costs, affect our competitiveness and can expose us to substantial fines or other penalties. In addition, a significant cyber-related attack could result in other negative consequences, including damage to our reputation or competitiveness, remediation or increased protection costs, litigation or regulatory action.

Supply chain - Significant raw material shortages, supplier capacity constraints, supplier or customer production disruptions, supplier quality and sourcing issues or price increases ~~could~~can increase our operating costs and adversely impact the competitive positions of our products.

Our reliance on third-party suppliers, contract manufacturers and service providers, and commodity markets to secure raw materials, parts, components and sub-systems used in our products exposes us to volatility in the prices and availability of these materials, parts, components, systems and services. ~~Some~~As our supply chains extend into many different countries and regions around the world, we are also subject to global economic and geopolitical dynamics and risks associated with exporting components manufactured in particular countries for incorporation into finished products completed in other countries. In addition, some of ~~these~~our suppliers or their sub-suppliers are limited- or sole-source suppliers. ~~A disruption~~We also have internal dependencies on certain key GE manufacturing or other facilities. Disruptions in deliveries from a key GE facility or from our third-party suppliers, contract manufacturers or outsourced or other service providers, capacity constraints, production disruptions up- or down-stream, price increases, or decreased availability of raw materials or commodities, including as a result of ~~catastrophic~~war, natural disaster, health pandemic or other business continuity events, ~~could have an adverse effect~~adversely affect our operations and, depending on the length and severity of the disruption, can limit our ability to meet our commitments to customers or ~~increase~~significantly impact our operating ~~costs.~~profit or cash flows. For example, we are monitoring the impact across our businesses of the recent coronavirus outbreak, which has already caused disruption to production facilities and activities in China, and the severity of the operational and financial impact will depend on how long and widespread the disruption proves to be. Quality, capability, compliance and sourcing issues experienced by third-party providers can also adversely affect our costs, margin rates and the quality and effectiveness of our products and services and result in liability and reputational harm. In addition, while we require our suppliers to implement and maintain reasonable and appropriate controls to protect information we provide to them, they may be the victim of a cyber-related attack that could lead to the compromise of the Company’s intellectual property, personal data or other confidential information, or to production downtimes and operational disruptions that could have an adverse effect on our ability to meet our commitments to customers.

GE ~~2016~~2019 FORM 10-K ~~122~~ 53



RISK FACTORS

FINANCIAL ~~RISKS~~

RISKS. Financial risk relates to our ability to meet financial obligations and mitigate exposure to broad market risks, including ~~volatility in foreign currency exchange rates and interest rates and commodity prices; credit risk;~~funding and liquidity ~~risk, including~~risks, such as risk related to our credit ratings and our availability and cost of ~~funding. Credit risk is the risk of financial loss arising from a customer or counterparty failure to meet its contractual obligations. We face~~funding; credit ~~risk~~risk; and volatility in ~~our industrial businesses, as well as in our GE Capital investing, lending~~foreign currency exchange rates, interest rates and ~~leasing activities and derivative financial instruments activities.~~commodity prices. Liquidity risk refers to the potential inability to meet contractual or contingent financial obligations (whether on- or off-balance sheet) as they arise, and could potentially impact an institution's financial condition or overall safety and soundness. Credit risk is the risk of financial loss arising from a customer or counterparty failure to meet its contractual obligations, and we face credit risk arising from both our industrial businesses and from GE Capital.

~~Economy/~~Leverage & borrowings - Our indebtedness levels could limit the flexibility of our businesses, and we could face further constraints as a result of failing to decrease our leverage over time, further downgrades of our credit ratings or adverse market conditions. Our ability to decrease our leverage as planned is dependent on the proceeds that we generate from business and asset dispositions, as well as our cash flows from operations. De-leveraging and servicing our debt will require a significant amount of cash, and if we are unable to generate cash flows in accordance with our plans we may be required to adopt one or more alternatives such as increasing borrowing under credit lines, further reducing or delaying investments or capital expenditures, selling other businesses or assets, refinancing debt or raising additional equity capital. In particular, we have significant pension and run-off insurance liabilities that are sensitive to numerous factors and assumptions that we use in our pension liability, GAAP insurance reserve and insurance statutory calculations. For example, the impact of low or declining market interest rates on the discount rates that we use to calculate these long-term liabilities (holding other variables constant) can adversely affect our earnings and cash flows, as well as the pace of progress toward our leverage goals for GE and for GE Capital. Lower than expected disposition proceeds or cash generation by our businesses over time could also adversely affect our progress toward our leverage goals. Our indebtedness could put us at a competitive disadvantage compared to competitors with lower debt levels that may have greater financial flexibility to secure additional funding for their operations, pursue strategic acquisitions, finance long-term projects or take other actions. Continuing to have substantial indebtedness could also have the consequence of increasing our vulnerability to general economic conditions, such as slowing economic growth or recession. It could also increase our vulnerability to adverse industry-specific conditions or to increases in the capital or liquidity needs at the GE or GE Capital levels, and it could limit our flexibility in planning for, or reacting to, changes in the economy and the industries in which we compete.

In addition, our existing levels of indebtedness may impair our ability to obtain additional debt financing on favorable terms in the future, particularly if coupled with further downgrades of our credit ratings or a deterioration of capital markets conditions more generally. External conditions in the financial and credit markets may limit the availability of funding at particular times or increase the cost of funding, which could adversely affect our business, financial position and results of operations. Factors that may affect the availability of funding or cause an increase in our funding costs include market disruptions arising in the United States, Europe, China, emerging markets or other markets, currency movements or other factors.

Liquidity - Failure to meet our cash flow targets, or additional credit downgrades, could adversely affect our liquidity, funding costs and related margins. We rely on cash from operations and proceeds from business and asset dispositions, as well as access to the short- and long-term debt markets, to fund our operations, maintain a contingency buffer of liquidity and meet our financial obligations and capital allocation priorities. If we do not meet our cash flow objectives, through both improved cash performance in our businesses or successful execution of business and asset dispositions, our financial condition could be adversely affected. Our access to the debt markets, and to the commercial paper markets in particular, depends on our credit ratings. As a result of ratings actions by Moody’s, S&P and Fitch in 2018, GE transitioned to a tier-2 commercial paper issuer, which reduced our borrowing capacity in the commercial paper markets that we historically relied on significantly to fund our operations on an intra-quarter basis. To accommodate GE’s short-term liquidity needs, we have been increasing utilization of our revolving credit facilities as a substitute for commercial paper borrowings, which results in an overall increase to our cost of funds.

GE2019 FORM 10-K 54



RISK FACTORS

There can also be no assurance that we will not face additional credit downgrades as a result of factors such as our progress in decreasing our leverage, the performance of our businesses, the failure to execute on dispositions or changes in rating application or methodology. Future downgrades could further adversely affect our cost of funds and related margins, liquidity, competitive position and access to capital markets, and a significant downgrade could have an adverse commercial impact on our industrial businesses. For example, if our short-term credit ratings were to fall below A-2/P-2/F2, it is possible that we would lose all or part of our access to the tier-2 commercial paper markets, and therefore our borrowing capacity in the commercial paper markets would likely be further reduced. Further, we have relied, and may continue to rely, on securitization programs to provide alternative funding for sales of GE receivables to third-party investors. If any of our short-term credit ratings were to fall below A-2/P-2/F2, the timing or amount of liquidity generated by these programs could be adversely affected. In addition, in certain securitization transactions where we provide servicing for third-party investors, we are contractually permitted to commingle cash collected from customers on financing receivables sold or pledged to third-party investors with our own cash prior to making required payments to third-party investors, provided our short-term credit rating does not fall below A-2/P-2/F2. In the event our ratings were to fall below such levels, we would be required to segregate certain of these cash collections owed to third-party investors into restricted bank accounts and would lose the short-term liquidity benefit of commingling with respect to such collections. In addition, under various debt and derivative instruments, guarantees and covenants, we could be required to post additional capital or collateral in the event of a ratings downgrade, which would increase the impact of a ratings downgrade on our liquidity and capital position. Swap, forward and option contracts are executed under standard master agreements that typically contain mutual downgrade provisions that provide the ability of the counterparty to require termination if the credit ratings of the applicable GE entity were to fall below specified ratings levels agreed upon with the counterparty, primarily BBB/Baa2. For additional discussion about our current credit ratings and related considerations, refer to the Capital Resources and Liquidity - Credit Ratings and Conditions section within MD&A.

Economy, customers & counterparties - ~~A deterioration of~~Deterioration in conditions in the global economy, the major industries we serve or the financial markets, or in the soundness of financial institutions, ~~and~~ governments or customers we deal with, ~~may~~can adversely affect our business and results of operations.

The business and operating results of our industrial businesses have been, and will continue to be, affected by worldwide economic conditions, including conditions in the air ~~and rail~~ transportation, power generation, ~~oil and gas, renewables,~~renewable energy, healthcare and other ~~major~~ industries we serve. Existing or potential customers may delay or cancel plans to purchase our products and services, including large infrastructure projects, and may not be able to fulfill their obligations to us in a timely fashion as a result of business deterioration, cash flow shortages ~~low oil prices~~ or difficulty obtaining financing for particular projects or due to ~~slow global economic growth and~~macroeconomic conditions, geopolitical disruptions, changes in law or other challenges affecting the strength of the global economy. The airline industry, for example, is highly cyclical, and the level of demand for air travel is correlated to the strength of the U.S. and international economies. An extended ~~period~~disruption of ~~slow growth~~regional or international travel, such as a disruption in ~~the U.S.~~connection with a terrorist incident, health pandemic or ~~internationally~~recessionary economic environment that results in the loss of business and leisure traffic, could have a material adverse effect on our airline customers, ~~and~~ the viability of their ~~business. Service contract cancellations or customer dynamics~~business and their demand for our products and services. Such effects would be particularly significant for GE in the current environment, in which we have dependency on the continued strength of our Aviation business as we execute on planned dispositions and continue working to improve the operations and execution of other GE businesses. Secular, cyclical and competitive pressures facing customers across our energy businesses can also have a significant impact on the operating results and outlooks for our businesses. These include pressures such as ~~early aircraft retirements, reduced electricity~~lower demand in our Power business than in the past as a result of increased cost competitiveness and ~~Renewable Energy businesses~~market penetration by renewable sources of power generation; the effects of changes in production or ~~declines~~other tax credits for wind energy projects, and significant price competition among wind equipment manufacturers and consolidation in ~~orders, project commencement delays~~the industry; and ~~pricing pressures on our Oil & Gas business from low oil prices could affect~~shifts in the availability of financing for certain types of projects as investors, governments, regulators and other market participants develop plans for addressing climate change. In particular, our ability to ~~fully recover~~effect an operational turnaround in our ~~contract costs~~Power business will be more challenging to the extent that markets for our products and ~~estimated earnings.~~services remain lower for longer than expected. Further, our vendors may ~~be experiencing~~experience similar conditions, which may impact their ability to fulfill their obligations to us. We ~~may~~ also at times face greater challenges collecting on receivables with customers that are sovereign governments or located in emerging markets. If ~~slow growth in the global economy continues for a significant period or~~ there is significant deterioration in the global economy, our results of operations, financial position and cash flows could be materially adversely ~~affected.~~affected.

GE2019 FORM 10-K 55



RISK FACTORS

GE Capital - A smaller GE Capital continues to have exposure to insurance, credit and other risks and, in the event of future adverse developments, may not be able to meet its business and financial objectives without further actions at GE Capital or additional capital contributions by GE.To fund the statutory capital contributions that it expects to make to its insurance subsidiaries over the next several years, as well as to meet its debt maturities and other obligations, GE Capital expects to rely on its existing liquidity, cash generated from asset reductions, cash flows from its businesses, GE repayments of intercompany loans and capital contributions from GE. However, as GE Capital’s excess liquidity from past disposition proceeds runs off, and as its future earnings are reduced as a result of business and asset sales, there is a risk that future adverse developments could cause liquidity or funding stress for GE Capital. For example, it is possible that future requirements for capital contributions to the insurance subsidiaries will be greater than currently estimated or could be accelerated by regulators. Our annual testing of insurance reserves is subject to a variety of assumptions, including assumptions about the discount rate (which is sensitive to changes in market interest rates), morbidity, mortality and future long-term care premium increases. Any future adverse changes to these assumptions (to the extent not offset by any favorable changes to these assumptions) could result in an increase to future policy benefit reserves and, potentially, to the amount of capital we are required to contribute to the insurance subsidiaries (as discussed in the Other Items - Insurance section within MD&A). We also anticipate that the new insurance accounting standard scheduled to be effective after 2021 (as discussed in the Other Items - New Accounting Standards section within MD&A) will significantly change the accounting for measurements of our long-duration insurance liabilities under GAAP and will materially affect our financial statements. In addition, we continue to evaluate strategic options to accelerate the further reduction in the size of GE Capital. Some of these options could have a material financial charge depending on the timing, negotiated terms and conditions of any ultimate arrangements. It is also possible that contingent liabilities and loss estimates from GE Capital’s continuing or discontinued operations (see the Other Consolidated Information - Discontinued Operations section within MD&A) will need to be recognized or increase in the future and will become payable. If GE Capital's credit ratings are downgraded because of inadequate increases in its capital levels over time, changes in rating application or methodology or other factors, GE Capital may also face increased interest costs and limitations on its ability to access external funding in the future.

GE Capital also has exposure to many different industries and counterparties, including sovereign governments, and routinely executes transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks and other institutional clients. Many of these transactions expose GE Capital to credit risk in the event of default of its counterparty or client. If conditions in the financial markets deteriorate, they may adversely affect the business and results of operations of GE Capital, as well as the soundness of financial institutions, governments and other counterparties we deal with. In addition, GE Capital's credit risk may be increased when the value of collateral held cannot be realized through sale or is liquidated at prices insufficient to recover the full amount of the loan or derivative exposure due to it. GE Capital also has exposure to these financial institutions in the form of cash on deposit and unsecured debt instruments held in its investment portfolios. GE Capital has policies relating to credit rating requirements and to exposure limits to counterparties (as described in Notes 20 and 29 to the consolidated financial statements), which are designed to limit credit and liquidity risk. There can be no assurance ~~however,~~ that ~~any~~future liabilities, losses or impairments to the carrying value of financial assets would not materially and adversely affect GE Capital's business, financial position, results of operations orand capacity to provide financing to support orders from GE's industrial ~~businesses.~~

businesses, or that factors causing sufficiently severe stress at GE ~~2016 FORM 10-K 123~~

~~Funding access/costs - Failure~~Capital would not require GE to ~~maintain our credit ratings, or conditions~~make larger than expected capital contributions to GE Capital in the ~~financial and credit markets, could adversely affect our access to capital markets, funding costs and related margins, liquidity and competitive position.~~future.

The major debt rating agencies routinely evaluate our debt. This evaluation is based on a number of factors, which include financial strength as well as transparency with rating agencies and timeliness of financial reporting. As of December 31, 2016, GE and GE Capital's long-term unsecured debt credit rating from both Standard and Poor's Ratings Service (S&P) and from Fitch Ratings Service (Fitch) was AA- (the fourth highest of 22 rating categories) with a stable outlook. The long-term unsecured debt credit rating from Moody's Investors Service (Moody's) for GE and for GE Capital was A1 (the fifth highest of 21 credit ratings), both with stable outlooks. As of December 31, 2016, GE and GE Capital's short-term credit rating from S&P was A-1+ (the highest rating category of six categories), from Fitch was F1+ (the highest rating category of six categories) and from Moody's was P-1 (the highest rating category of four categories). There can be no assurance that we will be able to maintain our credit ratings and failure to do so could adversely affect our cost of funds and related margins, liquidity, competitive position and access to capital markets. In addition, various debt and derivative instruments, guarantees and covenants would require posting additional capital or collateral in the event of a ratings downgrade, which, depending on the extent of the downgrade, could have a material adverse effect on our liquidity and capital position.

Furthermore, to the extent that we rely on the availability of the unsecured debt markets to access funding for term and commercial paper maturities for 2017 and beyond, external conditions in the financial and credit markets may limit the availability of funding at particular times or increase the cost of funding, which could affect our overall profitability. Factors that may affect the availability of funding or cause an increase in our funding costs include decreased capacity and increased competition among commercial paper issuers, and potential impacts arising in the United States, Europe or China from developments in sovereign debt situations, currency movements or other potential market disruptions. If GE or GE Capital's cost of funding were to increase, it may adversely affect our competitive position and result in lower net interest margins, earnings and cash flows as well as lower returns on shareowners' equity and invested capital.

~~Social costs~~Postretirement benefit plans - ~~Sustained increases~~Increases in pension and healthcare benefits obligations and costs ~~may reduce~~can adversely affect our ~~profitability.~~

earnings, cash flows and progress toward our leverage goals.Our results of operations may be positively or negatively affected by the amount of income or expense we record for our defined benefit pension plans. GAAP requires that we calculate income or expense for the plans using actuarial ~~valuations. These~~ valuations, which reflect assumptions about financial ~~market~~markets, interest rates and other economic conditions ~~which may change based on changes in key economic indicators. The most significant year-end assumptions we use to estimate pension expense for 2017 are~~such as the discount rate and the expected long-term rate of return on ~~the~~ plan assets. ~~In addition, we~~We are also required to make an annual measurement of plan assets and liabilities, which may result in a significant reduction or increase to equity. AtThe factors that impact our pension calculations are subject to changes in key economic indicators, and future decreases in the ~~end of 2016, the GE Pension Plan was underfunded,~~discount rate or low returns on ~~a GAAP basis, by $19.1 billion,~~plan assets can increase our funding obligations and ~~the GE Supplementary Pension Plan, an unfunded plan, had a projected benefit obligation of $6.5 billion. Although~~adversely impact our financial results. In addition, although GAAP expense and pension funding contributions are not directly related, key economic factors that affect GAAP expense would also likely affect the amount of cash we would be required to contribute to pension plans ~~as required~~ under ~~the Employee Retirement Income Security Act (ERISA).~~ERISA. Failure to achieve expected returns on plan assets driven by various factors, which could include a continued environment of low interest rates or sustained market volatility, could also result in an increase to the amount of cash we would be required to contribute to pension plans. In addition, there may be upward pressure on the cost of providing healthcare benefits to current employees and retirees. Although we have actively sought to control increases in these costs, there can be no assurance that we will succeed in limiting cost increases, and continued upward pressure could reduce our profitability. For a discussion regarding how our financial statements have been and can be affected by our pension and healthcare benefit obligations, see the Other Consolidated Information –- Postretirement Benefit Plans ~~section~~ and ~~Notes 12~~the Critical Accounting Estimates - Pension Assumptions sections within MD&A and 29Note 13 to the consolidated financial ~~statements. See also the Critical Accounting Estimates – Pension Assumptions section for a discussion regarding how our financial~~ statements ~~can be affected by our pension plan accounting policies.~~.

GE2019 FORM 10-K 56



RISK FACTORS

~~GE 2016 FORM 10-K 124~~

LEGAL & COMPLIANCE ~~RISKS~~

RISKS. Legal and compliance risk relates to risks arising from the government and regulatory environment and action and from legal proceedings and compliance with integrity policies and procedures, including those relating to financial reporting and environmental, health and ~~safety.~~safety matters. Government and regulatory risk includes the risk that the government or regulatory actions will impose additional cost on us or require us to make adverse changes to our business models or practices.

Regulatory - We are subject to a wide variety of laws, regulations and government policies that may change in significant ways.

Our businesses are subject to regulation under a wide variety of U.S. federal and state and non-U.S. laws, regulations and policies. There can be no assurance that laws, regulations and policies will not be changed in ways that will require us to modify our business models and objectives or affect our returns on investments by restricting existing activities and products, subjecting them to escalating costs or prohibiting them outright. In particular, recent trends globally toward increased protectionism, import and export controls and the use of tariffs and other trade barriers can result in actions by governments around the world that have been and may continue to be disruptive and costly to our businesses, and can interfere with our global operating model and weaken our competitive position. Other legislative and regulatory ~~or other actions~~areas of significance for our businesses that U.S. and non-U.S. governments have ~~undertaken or are considering in areas such~~focused and continue to focus on include cybersecurity, data privacy and sovereignty, improper payments, competition law, compliance with complex economic sanctions, climate change and greenhouse gas emissions, foreign exchange intervention in response to currency volatility and currency controls that could restrict the movement of liquidity from particular ~~jurisdictions, trade controls or tariffs on imports and exports in~~jurisdictions. Potential further changes to tax laws, including additional guidance concerning the enactment of the recent U.S. ~~or other countries, complex economic sanctions and~~ tax reform, may have an effect on GE's, GE Capital's or other regulated subsidiaries' structure, operations, sales, liquidity, capital requirements, effective tax rate and performance. For example, legislative or regulatory measures by states or non-U.S. governments in response to the recent U.S. federal tax reform or otherwise, or rules, interpretations or audits under the new or existing tax laws, could increase our costs or tax rate. In addition, efforts by public and private sectors to control ~~the growth of~~ healthcare costs may lead to lower reimbursements and increased utilization controls related to the use of our products by healthcare providers. ~~Continued~~Regulation or government scrutiny ~~including reviews of the U.S. Food and Drug Administration (U.S. FDA) medical device pre-market authorization and post-market surveillance processes,~~ may impact the requirements for marketing our products and slow our ability to introduce new products, resulting in an adverse impact on our business. Furthermore, we have been, and expect to continue, participating in U.S. and international governmental programs, which require us to comply with strict governmental regulations. Inability to comply with these regulations could adversely affect our status in these projects and could have collateral consequences such as debarment. Debarment, depending on the entity involved and length of time, can limit our ability to participate in other projects involving multilateral development banks and adversely affect our results of operations, financial position and cash ~~flows.~~flows.

Legal proceedings - We are subject to legal proceedings, investigations and legal compliance ~~risks.~~

risks, including trailing liabilities from businesses that we dispose of or that are inactive. We are subject to a variety of legal proceedings, legal compliance risks and ~~legal~~environmental, health and safety compliance risks in virtually every part of the ~~world, including the matters described in the Legal Proceedings section.~~world. We, our representatives, and the industries in which we operate are subject to continuing scrutiny by regulators, ~~and~~ other governmental authorities and private sector entities or individuals in the U.S., the European Union, China and other jurisdictions, which have led or may, in certain circumstances, lead to enforcement actions, adverse changes to our business practices, fines and penalties, required remedial actions such as contaminated site clean-up or the assertion of private litigation claims, and damages that could be material. For example, ~~in connection with~~following our acquisition of Alstom's Thermal, Renewables and Grid businesses in ~~November~~ 2015, we are subject to legacy legal proceedings and legal compliance risks that relate to claimed anti-competitive conduct or improper payments by Alstom in the pre-acquisition ~~period.~~period, and payments for settlements, judgments, penalties or other liabilities in connection with those matters will result in cash outflows. In addition, since late 2017 we have been subject to a range of shareholder lawsuits and inquiries from governmental authorities related to the Company's financial performance, accounting and disclosure practices and related matters. We have observed that these proceedings related to claims about past financial performance and reporting pose particular reputational risks for the Company that can cause new allegations about past or current misconduct, even if unfounded, to have a more significant impact on our ~~discontinued U.S. mortgage business, WMC, is a defendant in 11 civil lawsuits arising out of its origination~~reputation and ~~sale of mortgages from 2005 through 2007,~~how we are viewed by investors, customers and we learned in December 2015 that, as part of continuing industry-wide investigation of subprime mortgages, the Civil Division of the U.S. Department of Justice is investigating potential violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) by WMC and its affiliates.others than they otherwise would. We have established reserves for ~~these and other~~ legal matters when and as appropriate; however, the estimation of legal reserves or possible losses involves significant judgment and may not reflect the full range of uncertainties and unpredictable outcomes inherent in litigation and investigations, and the actual losses arising from particular matters may exceed our current estimates and adversely affect our results of operations. Additionally, we and our subsidiaries are subject to remedial actions to clean up contaminated sites as required by federal and state laws, such as the anticipated remediation for a stretch of the Housatonic River in Massachusetts, as described in the Environmental Matters section. While we believe that we have adopted appropriate risk management and compliance programs, the global and diverse nature of our operations and the current enforcement environment mean that legal and compliance risks will continue to exist with respect to our ~~continuing~~operations, and ~~discontinued operations, and~~we are also subject to material trailing legal liabilities from businesses that we dispose of or that are inactive. We also expect that additional legal proceedings and other contingencies ~~the outcome of which cannot be predicted with certainty,~~ will arise from time to time. Moreover, we ~~are increasingly selling~~sell products and services in growth markets where claims arising from ~~a catastrophic product failure,~~ alleged violations of law, product failures or other incidents involving our products and services ~~may be~~are adjudicated within legal systems that are less developed and less reliable than those of the U.S. or other more developed markets, and this can create additional uncertainty about the outcome of proceedings before courts or other governmental bodies in such markets. See ~~the Legal Proceedings section and~~ Note 23 to the consolidated financial statements for ~~additional~~further information about legal proceedings and other loss ~~contingencies.~~

contingencies.

~~GE 2016 FORM 10-K 125~~

LEGAL PROCEEDINGS

~~WMC~~. ~~There are 11 lawsuits~~Refer to Legal Matters and Environmental, Health and Safety Matters in which our discontinued U.S. mortgage business, WMC, is a party. The adverse parties in 10 of these cases are securitization trustees or parties claiming to act on their behalf. While the alleged claims for relief vary from case to case, the complaints and counterclaims in these actions generally assert claims for breach of contract, indemnification, and/or declaratory judgment, and seek specific performance (repurchase) and/or monetary damages. Beginning in the fourth quarter 2013, WMC entered into settlements that reduced its exposure on claims asserted in certain securitizations, and the claim amounts reported herein reflect the effect of these settlements.

Five WMC cases are pending in the United States District Court for the District of Connecticut. Four of these cases were initiated in 2012, and one was initiated in the third quarter 2013. Deutsche Bank National Trust Company (Deutsche Bank) is the adverse party in four cases, and Law Debenture Trust Company of New York (Law Debenture) is the adverse party in one case. The Deutsche Bank complaints assert claims on approximately $4,300 million of mortgage loans and seek to recover damages in excess of approximately $1,800 million. The Law Debenture complaint asserts claims on approximately $800 million of mortgage loans, and alleges losses on these loans in excess of approximately $425 million. In September, WMC and Deutsche Bank agreed to settle all claims arising out of the four securitizations at issue in the Connecticut lawsuits, subject to judicial approvals. In October, Deutsche Bank filed petitions for instruction in California state court seeking judicial instructions that Deutsche Bank's entry into the settlement agreements was a reasonable exercise of its discretion and approving the distribution of settlement proceeds pursuant to the terms of each trust's governing documents.

Four cases are pending against WMC in New York State Supreme Court, all of which were initiated by securitization trustees or securities administrators. These cases involve, in the aggregate, claims involving approximately $4,559 million of mortgage loans. One of these lawsuits was initiated by Deutsche Bank in the second quarter 2013 and names as defendants WMC and Barclays Bank PLC. It involves claims against WMC on approximately $1,000 million of mortgage loans and does not specify the amount of damages sought. In September 2016, WMC and Deutsche Bank agreed to settle all claims arising out of the two securitizations at issue in this lawsuit, subject to judicial approvals. In October 2016, Deutsche Bank filed petitions for instruction in California state court seeking judicial instructions that Deutsche Bank's entry into the settlement agreements was a reasonable exercise of its discretion and approving the distribution of settlement proceeds pursuant to the terms of each trust's governing documents. The second case, in which the plaintiff is The Bank of New York Mellon (BNY), was initiated in the fourth quarter 2012 and names as defendants WMC, J.P. Morgan Mortgage Acquisition Corporation and JPMorgan Chase Bank, N.A. BNY asserts claims on approximately $1,300 million of mortgage loans, and seeks to recover damages in excess of $650 million. The third case was initiated by BNY in November 2013 and names as defendants WMC, J.P. Morgan Mortgage Acquisition Corporation and JPMorgan Chase Bank, N.A. In this case, BNY asserts claims on approximately $1,300 million of mortgage loans, and seeks to recover damages in excess of $600 million. On September 18, 2015, the court granted defendants' motion to dismiss this case on statute of limitations grounds, and the plaintiff filed a notice of appeal on October 21, 2015. The fourth case was filed in October 2014 and names as defendants WMC, J.P. Morgan Mortgage Acquisition Corporation and JPMorgan Chase Bank, N.A. The plaintiff, BNY, asserts claims on approximately $959 million of mortgage loans and seeks to recover damages in excess of $475 million.

One case is pending against WMC in the United States District Court for the Southern District of New York. The case was initiated by the Federal Housing Finance Agency (FHFA) in the fourth quarter 2012. In the second quarter 2013, Deutsche Bank, in its role as securitization trustee, intervened as a plaintiff and filed a complaint relating to approximately $1,300 million of loans and alleging losses in excess of approximately $100 million. In December 2013, the District Court issued an order denying WMC's motion to dismiss but, on its own motion, ordered re-briefing on several issues raised by WMC's motion to dismiss in February 2015. On July 10, 2015, the District Court entered an order dismissing the lawsuit as time-barred under the applicable statute of limitations. Deutsche Bank filed a notice of appeal from this order of dismissal on August 13, 2015, and the United States Court of Appeals for the Second Circuit heard oral argument on June 10, 2016. In September 2016, WMC and Deutsche Bank agreed to settle all claims arising out of the securitization at issue in this lawsuit, subject to judicial approval. In October 2016, Deutsche Bank filed a petition for instruction in California state court seeking judicial instructions that Deutsche Bank's entry into the settlement agreement was a reasonable exercise of its discretion and approving the distribution of settlement proceeds pursuant to the terms of the trust's governing documents. The court has scheduled the initial hearing on this petition, and the other petitions filed by Deutsche Bank referenced above, for April 2017.

~~GE 2016 FORM 10-K 126~~

The amounts of the claims at issue in these cases (discussed above) reflect the purchase price or unpaid principal balances of the mortgage loans at issue at the time of purchase and do not give effect to pay downs, accrued interest or fees, or potential recoveries based upon the underlying collateral. All of the mortgage loans involved in these lawsuits are included in WMC's reported claims at December 31, 2016. See Note 23 to the consolidated financial statements for ~~additional information.~~information relating to legal proceedings.

GE2019 FORM 10-K 57

~~On January 23, 2017, the ResCap Liquidating Trust, as successor to Residential Funding Company, LLC (RFC), filed a lawsuit seeking unspecified damages against WMC in the United States District Court~~



REPORTS

MANAGEMENT AND AUDITOR’S REPORTS

MANAGEMENT’S DISCUSSION OF FINANCIAL RESPONSIBILITY.Management is responsible for the ~~District~~preparation of Minnesota arising from alleged breaches in representations and warranties made by WMC in connection with the sale of approximately $840 million in loans to RFC over a period of time preceding RFC's filing for bankruptcy protection in May 2012.

In December 2015, we learned that, as part of continuing industry-wide investigation of subprime mortgages, the Civil Division of the U.S. Department of Justice is investigating potential violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) by WMC and its affiliates arising out of the origination, purchase or sale of residential mortgage loans between January 1, 2005 and December 31, 2007. The Justice Department subsequently issued subpoenas to WMC and GE Capital, and we are cooperating with the Justice Department's investigation.

~~Alstom legacy matters~~. In connection with our acquisition of Alstom's Thermal, Renewables and Grid businesses in November 2015, we are subject to legacy legal proceedings and legal compliance risks that relate to claimed anti-competitive conduct or improper payments by Alstom in the pre-acquisition period. See Note 23 to the consolidated financial statements ~~for additional information. As previously reported, in September 2013 the Israeli Antitrust Authority issued a decision whereby Alstom, Siemens AG~~ and ABB Ltd. were held liable for an alleged anti-competitive arrangement in the gas-insulated switchgears market in Israel. While there was no fine in connection with that decision, claimants brought civil actions in 2013 seeking damages of approximately $950 million and $600 million, respectively, related ~~to the alleged conduct underlying the decision~~information that are ~~pending before the Central District Court~~presented in ~~Israel. In December 2016, all parties agreed in principle to participate in a formal mediation in 2017 with the goal of reaching a global settlement of the two civil actions.~~

~~Environmental matters~~. As previously reported, in 2000, GE and the Environmental Protection Agency (EPA) entered into a consent decree relating to PCB cleanup of the Housatonic River in Massachusetts. Following EPA's release in September 2015 of an intended final remediation decision, GE and EPA engaged in mediation and the first step of the dispute resolution process contemplated by the consent decree. In October 2016, EPA issued its final remediation decision pursuant to the consent decree. GE and several other interested parties have appealed that decision to EPA's Environmental Appeals Board. A decision of the Environmental Appeals Board can ultimately be appealed to the United States Court of Appeals for the First Circuit. EPA may not implement any remedy until all appeals are exhausted. As of December 31, 2016, andthis report. The consolidated financial statements, which include amounts based on ~~its assessment~~management’s estimates and judgments, have been prepared in conformity with U.S generally accepted accounting principles.

The Company designs and maintains accounting and internal control systems to provide reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing consolidated financial statements and maintaining accountability for assets. These systems are enhanced by policies and procedures, an organizational structure providing division of ~~current facts~~responsibilities, careful selection and ~~circumstances~~training of qualified personnel, and ~~its defenses, GE believes that it has recorded adequate reserves~~a program of internal audits.

The Company engaged KPMG LLP, an independent registered public accounting firm, to ~~cover future obligations associated with~~audit and render an ~~expected final remedy.~~ ~~See Note 23 to~~opinion on the consolidated financial statements ~~for additional information.~~

~~GE 2016 FORM 10-K 127~~

~~MANAGEMENT AND AUDITOR'S REPORTS~~

~~MANAGEMENT'S DISCUSSION OF FINANCIAL RESPONSIBILITY~~

~~We believe that great companies are built on a foundation of reliable~~and internal control over financial ~~information and compliance~~reporting in accordance with the ~~spirit and letter~~standards of the ~~law. For General Electric~~Public Company Accounting Oversight Board (PCAOB). In March 2019, the PCAOB announced the effectiveness of a new requirement for auditors to communicate critical audit matters (CAMs) in the audit opinion, and the KPMG audit opinion that ~~foundation~~follows includes ~~rigorous management oversight~~this discussion of ~~and~~CAMs. In December 2018, we announced our intention to conduct an unyielding dedication to, controllership. The financial disclosures in this report are one product of our commitment to high-quality financial reporting. In addition, we make every effort to adopt appropriate accounting policies, we devote our full resources to ensuring that those policies are applied properly and consistently and we do our best to fairly present our financial results in a manner thatauditor tender process, which is ~~complete and understandable.~~currently underway.

Members of our corporate leadership team review each of our businesses routinely on matters that range from overall strategy and financial performance to staffing and compliance. Our business leaders monitor financial and operating systems, enabling us to identify potential opportunities and concerns at an early stage and positioning us to respond rapidly. OurThe Board of Directors, ~~oversees management's business conduct, and our~~through its Audit Committee, which consists entirely of independent directors, ~~oversees our~~meets periodically with management, internal ~~control over financial reporting. We continually examine our governance practices in an effort to enhance investor trust~~auditors, and improve the Board's overall effectiveness. The Board and its committees annually conduct a performance self-evaluation and recommend improvements. Our lead director chaired four meetings of our independent directors this year, helping us sharpen our full Board meetings to better cover significant topics. Compensation policies for our executives are aligned with the long-term interests of GE investors.

We strive to maintain a dynamic system of internal controls and procedures—including internal control over financial reporting—designed to ensure reliable financial recordkeeping, transparent financial reporting and disclosure, and protection of physical and intellectual property. We recruit, develop and retain a world-class financial team. Our internal audit function, including members of our Corporate Audit Staff, conducts thousands of financial, compliance and process improvement audits each year. Our Audit Committee oversees the scope and evaluates the overall results of these audits, and in 2016, members of that Committee regularly attended GE Capital Board of Directors, Corporate Audit Staff and Controllership Council meetings. Our global integrity policies—"The Spirit & The Letter"—require compliance with law and policy, and pertain to such vital issues as upholding financial integrity and avoiding conflicts of interest. These integrity policies are available in 35 languages, and are provided to all of our employees, holding each of them accountable for compliance. Our strong compliance culture reinforces these efforts by requiring employees to raise any compliance concerns and by prohibiting retribution for doing so. To facilitate open and candid communication, we have designated ombudspersons throughout the Company to act as independent resources for reporting integrity or compliance concerns. We hold our directors, consultants, agents and independent contractors to the same integrity standards.

We are keenly aware of the importance of full and open presentation of our financial position and operating results, and rely for this purpose on our disclosure controls and procedures, including our Disclosure Committee, which comprises senior executives with detailed knowledge of our businesses and the related needs of our investors. We ask this committee to review our compliance with accounting and disclosure requirements, to evaluate the fairness of our financial and non-financial disclosures, and to report their findings to us. In 2016, we further ensured strong disclosure by holding approximately 140 analyst and investor meetings with GE leadership present.

~~We welcome the strong oversight of our financial reporting activities by~~ our independent registered public accounting firm to ensure that each is meeting its responsibilities and to discuss matters concerning internal controls and financial reporting. KPMG LLP ~~engaged by~~ and ~~reporting directly~~the internal auditors each have full and free access to the Audit Committee. ~~U.S. legislation requires management to report on internal control over financial reporting and for auditors to render an opinion on such controls. Our report and the KPMG LLP report for 2016 follow.~~

~~GE 2016 FORM 10-K 128~~

~~MANAGEMENT'S~~MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL ~~REPORTING~~

REPORTING.Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. With our participation, an evaluation of the effectiveness of our internal control over financial reporting was conducted as of December 31, ~~2016,~~2019, based on the framework and criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, ~~2016~~.2019.

Our independent registered public accounting firm has issued an audit report on our internal control over financial reporting. Their report follows.



/s/ ~~Jeffrey R. Immelt~~H. Lawrence Culp, Jr.		/s/ ~~Jeffrey~~Jamie S. ~~Bornstein~~Miller
~~Jeffrey R. Immelt~~ H. Lawrence Culp, Jr.		~~Jeffrey~~Jamie S. ~~Bornstein~~Miller
Chairman of the Board and Chief Executive Officer ~~February 24, 2017~~		Senior Vice President and Chief Financial Officer
February 24, 2020

DISCLOSURE ~~CONTROLS~~

CONTROLS.Under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that our disclosure controls and procedures were effective as of December 31, ~~2016.~~

~~Other than as explained below, there~~2019. There have been no changes in the ~~Company's~~Company’s internal control over financial reporting during the quarter ended December 31, ~~2016,~~2019, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

On November 2, 2015, we closed the acquisition of Alstom's Thermal, Renewable, and Grid businesses. During 2016, we completed our purchase price allocations and transitioned the acquired businesses to our accounting and reporting policies. We also commenced integrating their systems and processes into our framework of internal controls over financial reporting. As part of this process, we have enhanced and augmented the internal controls of the acquired businesses to raise them to a level that meets U.S. requirements. Efforts to further improve those controls are continuing.

GE2019 FORM 10-K 58



REPORTS

~~GE 2016 FORM 10-K 129~~


(b)	~~Substantially all unpaid claims~~ Other contracts included claim reserves of $342 million and ~~claims adjustment expenses~~$346 million related to short-duration contracts at Electric Insurance Company, net of eliminations, at December 31, 2019 and ~~unearned premiums.~~December 31, 2018, respectively.


(c)	Investment contracts are contracts without significant mortality or morbidity risks.

We annually perform premium deficiency testing in the aggregate across our run-off insurance portfolio. We performed this year’s testing in the third quarter of 2019, consistent with our historical practice prior to 2017 when we reconstructed our claim cost curves. These procedures included updating experience studies since our last test completed in the fourth quarter of 2018, independent actuarial analysis and review of industry benchmarks. As we experienced a premium deficiency in 2018, our 2019 premium deficiency testing started with a zero margin and, accordingly, any net adverse development would result in a future charge to earnings. Using our most recent future policy benefit reserve assumptions, including changes to our assumptions related to discount rate and future premium rate increases, as described below, we identified a premium deficiency resulting in a $972 million non-cash pre-tax charge to earnings in the third quarter 2019.

GE2019 FORM 10-K 87



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The increase to future policy benefit reserves resulting from our 2019 testing was primarily attributable to the following key assumption changes:

•

We have observed a significant decline in market interest rates this year, which has resulted in a lower discount rate and adversely impacted our reserve margin by $1,344 million. As noted above, our discount rate is based upon the actual yields on our investment portfolio and our forecasted reinvestment rates, which comprise the future rates at which we expect to invest proceeds from investment maturities, net of operating cash flows, and projected future capital contributions. Market interest rates have declined by approximately 130 basis points since our 2018 premium deficiency test, with 60 basis points of this reduction occurring since the second quarter 2019. Although the movement in market rates impacts the reinvestment rate, it does not materially impact the actual yield on our existing investments. Furthermore, our assumed reinvestment rate on future fixed income investments is based both on current expected long-term average rates and market interest rates. Thus, a decline in market interest rates will not result in an equivalent decline in our discount rate assumption. Our discount rate assumption for purposes of performing the premium deficiency assessment resulted in weighted average rate of 5.74% compared to 6.04% in 2018. This decline in the discount rate from 2018 to 2019 reflected a lower reinvestment rate increasing to an expected long-term average investment yield over a longer period, lower prospective expected returns on higher yielding assets classes introduced with our 2018 strategic initiatives, and slightly lower actual yields on our investment security portfolio.

•

Higher levels of projected long-term care premium rate increases due to larger rate filings by some ceding companies than previously planned, which favorably impacted our reserve margin by $263 million. Since our premium deficiency testing performed in 2018, we have implemented approximately $200 million of previously approved rate increase actions. Our 2019 premium deficiency test includes approximately $2,000 million of anticipated future premium increases or benefit reductions associated with future in-force rate actions. This represents an increase of $300 million from our 2018 premium deficiency test to account for actions that are: (a) approved and not yet implemented, (b) filed but not yet approved, and (c) estimated on future filings through 2028, and includes the effect of the lower discount rate mentioned above.

Certain future adverse changes in our assumptions could result in the unlocking of reserves, resetting of actuarial assumptions to current assumptions, an increase to future policy benefit reserves and a charge to earnings. Any favorable changes to these assumptions could result in additional margin in our premium deficiency test and higher income over the remaining duration of the portfolio, including higher investment income.

Claim reserve activity included incurred claims of $1,873 million, $2,106 million and $2,020 million, of which $(36) million, $(46) million and $135 million related to the recognition of adjustments to prior year claim reserves arising from our periodic reserve evaluation in the years ended December 31, 2019, 2018 and 2017, respectively. Paid claims were $1,626 million, $1,937 million and $1,670 million in the years ended December 31, 2019, 2018 and 2017, respectively. The vast majority of paid claims relate to prior year insured events primarily as a result of the length of time long-term care policyholders remain on claim.

When insurance ~~affiliates~~companies cede insurance risk to third parties, such as reinsurers, they are not relieved of their primary obligation to ~~policyholders.~~policyholders and cedents. When losses on ceded risks give rise to claims for recovery, we establish allowances for probable losses on such receivables from reinsurers as required. The vast majority of our remaining net reinsurance recoverables are secured by assets held in a trust for which we are the beneficiary. Reinsurance recoverables, net of allowances of $1,355 million and $1,090 million, are included in ~~the caption "Other receivables" on~~Other GE Capital receivables in our ~~Consolidated~~consolidated Statement of Financial Position, and amounted to ~~$2,038~~$2,416 million and ~~$1,880~~$2,271 million at December 31, ~~2016~~2019 and ~~2015,~~December 31, 2018, respectively.

We recognize reinsurance recoveries as a reduction of ~~the Consolidated~~Insurance losses and annuity benefits in our consolidated Statement of Earnings ~~caption "Investment contracts, insurance losses and insurance annuity benefits."~~(Loss). Reinsurance recoveries were ~~$370~~$362 million, ~~$351~~$324 million and ~~$228~~$454 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Statutory accounting practices, not GAAP, determine the required statutory capital levels of our insurance legal entities and, therefore, may affect the amount or timing of capital contributions that may be required from GE Capital to its insurance legal entities. Statutory accounting practices are set forth by the National Association of Insurance Commissioners (NAIC) as well as state laws, regulation and general administrative rules and differ in certain respects from GAAP. The 2018 and 2019 premium deficiency results described above were recorded on a GAAP basis. The adverse impact on our statutory additional actuarial reserves (AAR) arising from our revised assumptions in 2017, including the collectability of reinsurance recoverables, is expected to require GE Capital to contribute approximately $14,500 million additional capital to its run-off insurance operations in 2018-2024. For statutory accounting purposes, the Kansas Insurance Department (KID), approved our request for a permitted accounting practice to recognize the 2017 AAR increase over a seven-year period. GE Capital provided capital contributions to its insurance subsidiaries of $2,000 million, $1,900 million and $3,500 million in ~~2016, 2015~~the first quarters of 2020, 2019 and ~~2014,~~2018, respectively. GE Capital expects to provide further capital contributions of approximately $7,000 million through 2024 subject to ongoing monitoring by KID. GE is a party to capital maintenance agreements with its run-off insurance subsidiaries whereby GE will maintain their statutory capital levels at 300% of their year-end Authorized Control Level risk-based capital requirements as defined from time to time by the NAIC.

GE2019 FORM 10-K 88



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE ~~12.~~13. POSTRETIREMENT BENEFIT PLANS

~~ABOUT OUR PLANS~~

PENSION BENEFITS AND RETIREE HEALTH AND LIFE BENEFITS.

We sponsor a number of pension and retiree health and life insurance benefit plans ~~including our two~~that we present in 3 categories, principal pension plans, ~~for certain U.S. employees as well as~~ other ~~affiliate pension plans. Our principal~~ pension plans and principal retiree benefit plans. Smaller pension plans with pension assets or obligations less than $50 million and other retiree benefit plans are not presented. We use a December 31 measurement date for these plans.

Principal pension plans represent the GE Pension Plan and the GE Supplementary Pension ~~Plan, are discussed below. A summary of other postretirement plans is also provided.~~

Plan. The GE Pension Plan is a defined benefit plan that covers ~~238,000~~approximately 245,500 retirees and beneficiaries, ~~168,000~~approximately 97,000 vested former employees and ~~61,000~~approximately 31,500 active employees. This plan ishas been closed to new ~~participants.~~ participants since 2012.

The GE Supplementary Pension Plan is an unfunded plan that provides supplementary benefits to higher-level, longer-service employees. The GE Supplementary Pension Plan annuity benefit ishas been closed to new participants since 2011 and has been replaced by an installment benefit. ~~We use~~

Other pension plans in 2019 included 44 U.S. and non-U.S. pension plans with pension assets or obligations greater than $50 million which cover approximately 57,000 retirees and beneficiaries, approximately 54,000 vested former employees and approximately 22,000 active employees. Principal retiree benefit plans provide health and life insurance benefits to certain eligible participants, and these participants share in the cost of the healthcare benefits. Principal retiree benefit plans cover approximately 176,000 retirees and dependents.

In October 2019, we approved changes to our principal pension plans. The GE Pension Plan benefits for approximately 20,000 employees with salaried benefits will be frozen effective January 1, 2021, and thereafter these employees will receive increased company contributions in the company sponsored defined contribution plan in lieu of participation in a defined benefit plan. As a result, we recognized a non-cash pre-tax curtailment loss of $298 million in the fourth quarter of 2019 as non-operating benefit costs. In addition, the GE Supplementary Pension Plan benefits for approximately 700 employees who became executives before 2011 will be frozen effective January 1, 2021, and thereafter these employees will accrue the installment benefit currently offered to new executives since 2011. The change in the GE Supplementary Pension Plan reduced the projected benefit obligation by $297 million and has been treated as a plan amendment that is being amortized over future periods.

As result, we remeasured the pension assets and obligations for the principal pension plans as of October 1, 2019, which resulted in a net actuarial loss of $4,735 million, which was recorded in Accumulated other comprehensive income. The net actuarial loss was primarily due to a reduction in the discount rate since December 31, ~~measurement~~2018, offset by our asset performance up to the remeasurement date ~~for these plans.~~

~~On our balance sheet, we measure our plan assets at fair value~~ and the ~~obligations at the present value~~impact of the ~~estimated payments~~freeze for the GE Pension Plan.

Finally, we offered approximately 100,000 former U.S. employees with a vested benefit in the GE Pension Plan a limited-time option to ~~plan participants. Participants earn benefits based on their service and pay. Those estimated payment amounts are determined based on assumptions. Differences between~~take a lump sum distribution in lieu of future monthly payments. In December 2019, lump sum distributions of $2,657 million were made from the GE Pension Trust.

At December 31, 2019, we completed our ~~actual results and what we assumed are~~annual year-end measurement of the funded status of the principal pension plans which resulted in a net actuarial gain of $3,898 million which was recorded in ~~a separate component~~Accumulated Other Comprehensive Income. The net actuarial gain was primarily due to the impact of ~~equity each period. These differences are amortized into earnings over~~ the ~~remaining average future service of active employees or the expected life of participants, as applicable, who participate~~lump-sum distributions, an increase in the ~~plan.~~discount rate since the remeasurement date, asset performance in the fourth quarter and updated mortality assumptions.

For the year ended December 31, 2019, we recognized a net actuarial loss of $837 million which is a result of a $4,735 million net actuarial loss from remeasurement as of October 1, 2019 and a $3,898 million net actuarial gain from our annual year-end measurement.

GE2019 FORM 10-K 89



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~GE 2016 FORM 10-K 167~~



COST OF OUR BENEFITS PLANS AND ASSUMPTIONS
	2019										2018									2017
(Dollars in millions)	Principal pension			Other pension			Principal retiree benefit				Principal pension			Other pension			Principal retiree benefit			Principal pension			Other pension			Principal retiree benefit

Components of expense (income)										��
Service cost - operating	$	654		$	246		$	58			$	888		$	323		$	63		$	1,055		$	542		$	94
Interest cost	2,780			542			202				2,658			548			196			2,856			561			224
Expected return on plan assets	(3,428		)	(1,144		)	(21		)		(3,248		)	(1,285		)	(29		)	(3,390		)	(1,176		)	(36		)
Amortization of net actuarial loss (gain)	3,439			319			(118		)		3,785			312			(79		)	2,812			418			(80		)
Amortization of prior service cost (credit)	135			3			(232		)		143			(9		)	(230		)	290			(5		)	(171		)
Curtailment / settlement loss (gain)(a)	349			13			(38		)		34			1			—			64			24			4
Non-operating	3,275			(267		)	(207		)		3,372			(433		)	(142		)	2,632			(178		)	(59		)
Net periodic expense (income)	$	3,929		$	(21	)	$	(149	)		$	4,260		$	(110	)	$	(79	)	$	3,687		$	364		$	35
Weighted-average assumptions used to determine benefit obligations
Discount rate	3.36		%	1.97		%	3.05		%		4.34		%	2.75		%	4.12		%	3.64		%	2.41		%	3.43		%
Compensation increases	2.95			3.16			3.75				3.60			3.16			3.60			3.55			3.09			3.55
Initial healthcare trend rate(b)	N/A			N/A			5.90				N/A			N/A			6.00			N/A			N/A			6.00
Weighted-average assumptions used to determine benefit cost
Discount rate(c)	4.07			2.75			4.12				3.64			2.41			3.43			4.11			2.55			3.75
Expected rate of return on plan assets	6.75			6.76			7.00				6.75			6.75			7.00			7.50			6.75			7.00

~~THE COST OF OUR PLANS~~(a) For 2019, principal pension principally the curtailment loss due to GE Pension Plan freeze announced in October 2019.

(b) For 2019, ultimately declining to 5% for 2030 and thereafter.

(c) Weighted average 2019 discount rate for principal pension was 4.07%. Discount rate was 4.34% for January 1, 2019 through September 30, 2019 and then changed to 3.24% for the remainder of 2019 due to the remeasurement of the plans for the U.S. pension changes announced in October 2019.

The ~~amount we report~~components of net periodic benefit costs, other than the service cost component, are included in Non-operating benefit costs in our ~~earnings as pension cost consists~~consolidated Statement of ~~the following components:~~Earnings (Loss).

GE2019 FORM 10-K 90

·
	~~Service cost – the cost of benefits earned by active employees who participate in the plan.~~
FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



PLAN FUNDED STATUS AND AMOUNTS RECORDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
	2019												2018
(in millions)	Principal pension				Other pension				Principal retiree benefit				Principal pension				Other pension				Principal retiree benefit
Change in benefit obligations
Balance at January 1	$	68,500			$	21,091			$	5,153			$	74,985			$	23,066			$	6,006
Service cost	654				246				58				888				323				63
Interest cost	2,780				542				202				2,658				548				196
Participant contributions	77				29				61				90				37				60
Plan amendments	(42		)	(a)	(17		)		(23		)		—				82				—
Actuarial loss (gain)	7,073			(b)	2,422			(e)	275			(e)	(6,263		)	(e)	(879		)	(e)	(593		)	(f)
Benefits paid	(3,788		)		(1,043		)		(533		)		(3,729		)		(1,002		)		(569		)
Curtailments	(838		)		(32		)		(33		)		—				(11		)		—
Settlements	(2,657		)	(c)	—				—				—				—				—
Acquisitions (dispositions) / other - net	(3		)		(1,030		)		—				(129		)		(90		)		(10		)
Exchange rate adjustments	—				713				—				—				(983		)		—
Balance at December 31	$	71,756		(d)	$	22,921			$	5,160		(g)	$	68,500		(d)	$	21,091			$	5,153		(g)
Change in plan assets
Balance at January 1	50,009				17,537				362				50,361				19,306				518
Actual gain (loss) on plan assets	8,694				2,229				57				(2,996		)		(245		)		(17		)
Employer contributions	298				716				342				6,283				475				370
Participant contributions	77				29				61				90				37				60
Benefits paid	(3,788		)		(1,043		)		(533		)		(3,729		)		(1,002		)		(569		)
Settlements	(2,657		)	(c)	—				—				—				—				—
Acquisitions (dispositions) / other - net	—				(1,030		)		—				—				(185		)		—
Exchange rate adjustments	—				704				—				—				(849		)		—
Balance at December 31	$	52,633			$	19,142			$	289			$	50,009			$	17,537			$	362
Funded status - deficit(h)	$	19,123			$	3,779			$	4,871			$	18,491			$	3,554			$	4,791
Amounts recorded in the consolidated Statement of Financial Position
Non-current assets - other	—				475				—				—				746				—
Current liabilities - other	(296		)		(123		)		(355		)		(280		)		(117		)		(378		)
Non-current liabilities - compensation and benefits	(18,827		)		(4,131		)		(4,516		)		(18,211		)		(4,183		)		(4,413		)
Net amount recorded	$	(19,123	)		$	(3,779	)		$	(4,871	)		$	(18,491	)		$	(3,554	)		$	(4,791	)
Amounts recorded in Accumulated other comprehensive income (loss)
Prior service cost (credit)	67				(16		)		(2,376		)		596				7				(2,584		)
Actuarial loss (gain)	7,961				4,665				(833		)		10,430				3,740				(1,196		)
Total recorded in Accumulated other comprehensive income (loss)	$	8,028			$	4,649			$	(3,209	)		$	11,026			$	3,747			$	(3,780	)


(a)	GE Supplementary Pension Plan amendment for the U.S. pension changes announced in October 2019 offset by other plan amendments adopted in 2019.


(b)	Principally associated with discount rate changes offset by impact of the one-time lump sum payments.


(c)	Payments made to former employees from the GE Pension Trust for the one-time lump sum payments.


(d)	The PBO for the GE Supplementary Pension Plan, which is an unfunded plan, was $6,691 million and $6,110 million at year-end 2019 and 2018, respectively.


(e)	Principally associated with discount rate changes.


(f)	Principally due to discount rate changes and favorable cost trends.


(g)	The benefit obligation for retiree health plans was $3,306 million and $3,425 million at December 31, 2019 and 2018, respectively.

(h)

Total unfunded status for principal pension plan, other pension plans and principal retiree benefit plans was $27,773 million and $26,836 million at December 31, 2019 and 2018, respectively. Of these amounts, $14,340 million and $13,292 million at December 31, 2019 and 2018, respectively, related to plans that are not subject to regulatory funding requirements and the benefits for these plans are funded as they become due.

GE2019 FORM 10-K 91

·
	~~Prior service cost amortization – the cost of changes to our benefits plans (plan amendments) related to prior service performed.~~
FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

·	~~Expected return on plan assets – the return we expect to earn on plan investments used to pay future benefits.~~

·	~~Interest cost – the accrual of interest on the pension obligations due to the passage of time.~~

·	Net actuarial loss (gain) amortization – differences between our estimates, (for example, discount rate, expected return on plan assets) and our actual experience which are initially recorded in equity and amortized into earnings.

·	Curtailment loss – earnings effects of amounts previously deferred which have been accelerated because of an event that shortens future service or eliminates benefits (for example, a sale of a business).

~~Pension cost components follow.~~

COST OF PENSION PLANS

Principal pension plans
(In millions) 2016 2015 2014

Service cost for benefits earned $ 1,237 $ 1,424 $ 1,205
Prior service cost amortization 303 205 214
Expected return on plan assets (3,336) (3,302) (3,190)
Interest cost on benefit obligations 2,939 2,778 2,745
Net actuarial loss amortization 2,449 3,288 2,565
Curtailment loss 31 105 65
Pension cost $ 3,623 $ 4,498 $ 3,604

ASSUMPTIONS USED IN ~~PENSION CALCULATIONS~~

Accounting requirements necessitate the use of assumptions to reflect the uncertainties and the length of time over which the pension obligations will be paid. The actual amount of future benefit payments will depend upon when participants retire, the amount of their benefit at retirement and how long they live. To reflect the obligations in today's dollars, we discount the future payments using a rate that matches the time frame over which the payments will be made. We also need to assume a long-term rate of return that will be earned on investments used to fund these payments.

~~The assumptions used to measure our pension benefit obligations follow~~.

ASSUMPTIONS USED TO MEASURE PENSION BENEFIT OBLIGATIONS
Principal pension plans
December 31 2016 2015 2014

Discount rate 4.11 % 4.38 % 4.02 %
Compensation increases 3.80 3.80 4.10

~~The discount rate used to measure the pension obligations at the end of the year is also used to measure pension cost in the following year. The assumptions used to measure pension cost follow~~.

ASSUMPTIONS USED TO MEASURE PENSION COST
Principal pension plans
December 31 2016 2015 2014

Discount rate 4.38 % 4.02 % 4.85 %
Expected return on assets 7.50 7.50 7.50

~~GE 2016 FORM 10-K 168~~

CALCULATIONS. We determine the discount rate using the weighted-average yields on high-quality fixed-income securities that have maturities consistent with the timing of benefit payments. Lower discount rates increase the size of the benefit obligation and generally increase pension expense in the following year; higher discount rates reduce the size of the benefit obligation and generally reduce subsequent-year pension expense.

The expected return on plan assets is the estimated long-term rate of return that will be earned on the investments used to fund the pension obligations. To determine this rate, we consider the current and target composition of plan investments, our historical returns earned, and our expectations about the future.

The compensation assumption is used to estimate the annual rate at which pay of plan participants will grow. If the rate of growth assumed increases, the size of the pension obligations will increase, as will the amount recorded in ~~shareowners' equity~~Accumulated other comprehensive income (loss) in our consolidated Statement of Financial Position and amortized tointo earnings in subsequent periods.

~~Further information~~The expected return on plan assets is the estimated long-term rate of return that will be earned on the investments used to fund the pension obligations. To determine this rate, we consider the composition of our plan investments, our historical returns earned, and our expectations about the future. Based on our ~~pension~~analysis, we have assumed a 6.75% long-term expected return on GE Pension Plan assets for cost recognition in 2019 and 2018. This is a reduction from the 7.50% we assumed in 2017.

The healthcare trend assumptions ~~including~~apply to our pre-65 retiree medical plans. Our post-65 retiree plan has a ~~sensitivity analysis~~fixed subsidy and therefore is not subject to healthcare inflation.

We evaluate these assumptions annually. We evaluate other assumptions periodically, such as retirement age, mortality and turnover, and update them as necessary to reflect our actual experience and expectations for the future. Differences between our actual results and what we assumed are recorded in Accumulated other comprehensive income each period. These differences are amortized into earnings over the remaining average future service of ~~certain assumptions, can be found in~~active participating employees or the ~~Critical Accounting Estimates~~ – ~~Pension Assumptions within Management's Discussion and Analysis~~expected life of ~~Financial Condition and Results of Operations (MD&A)~~.

inactive participants, as applicable.

FUNDED STATUS

Principal pension plans
December 31 (in millions) 2016 2015

Projected benefit obligations $ 71,501 $ 68,722
Fair value of plan assets 45,893 45,720
Underfunded $ 25,608 $ 23,002

PROJECTED BENEFIT OBLIGATIONS (PBO)

Principal pension plans
(In millions) 2016 2015

Balance at January 1 $ 68,722 $ 70,735
Service cost for benefits earned 1,237 1,424
Interest cost on benefit obligations 2,939 2,778
Participant contributions 115 155
Plan amendments - 902
Actuarial loss (gain) 1,874 (a) (4,017) (b)
Benefits paid (3,386) (3,255)
Balance at December 31(c) $ 71,501 $ 68,722

~~(a)~~

~~Principally associated with discount rate and mortality assumption changes.~~

~~(b)~~

~~Principally associated with discount rate changes.~~

~~(c)~~

~~The PBO for the GE Supplementary Pension Plan, which is an unfunded plan, was $6,531 million and $6,099 million at year-end 2016 and 2015, respectively.~~

~~GE 2016 FORM 10-K 169~~

THE COMPOSITION OF OUR PLAN ~~ASSETS~~

ASSETS. The fair value of our pension plans' investments is presented below. The inputs and valuation techniques used to measure the fair value of these assets are described in Note 1 and have been applied consistently.

Principal pension plans
December 31 (in millions) 2016 2015

Equity securities
   U.S. equity securities(a)
$ 12,130 $ 12,447
   Non-U.S. equity securities(a)
9,029 9,088
Debt securities
   Fixed income and cash investment funds
4,897 3,252
   U.S. corporate(b)
5,252 5,529
   Other debt securities(c)
5,066 5,131
Private equities(a) 4,492 4,885
Real estate(a) 3,244 3,186
Other investments(d) 1,783 2,202
Total plan assets $ 45,893 $ 45,720



	2019				2018
(In millions)	Principal pension		Other pension		Principal pension		Other pension

Global equity	$	6,826	$	3,484	$	6,015	$	4,323
Debt securities
Fixed income and cash investment funds	4,398		8,089		2,069		6,320
U.S. corporate(a)	8,025		365		8,734		397
Other debt securities(b)	6,076		424		5,264		472
Real estate	2,309		140		2,218		175
Private equities and other investments	23		452		557		369
Total	27,657		12,954		24,857		12,056
Plan assets measured at net asset value
Global equity	14,616		1,450		12,558		1,228
Debt securities	3,744		914		6,400		883
Real estate	1,167		1,930		1,261		1,704
Private equities and other investments	5,449		1,894		4,933		1,666
Total plan assets at fair value	$	52,633	$	19,142	$	50,009	$	17,537

~~(a)~~

~~Included direct investments and investment funds.~~

~~(b)~~(a)

Primarily represented investment-grade bonds of U.S. issuers from diverse industries.

~~(c)~~
(b)	Primarily represented investments in residential and commercial mortgage-backed securities, non-U.S. corporate and government bonds and U.S. government, federal agency, state and municipal debt.

~~(d)Substantially all represented hedge fund investments and net unsettled transaction-related investment activity.~~

GE Pension Plan assets valued using NAV as a practical expedient amounted to $16,894 million and $15,430 million as of December 31, 2016 and 2015, respectively. The percentages of plan assets valued using NAV by investment fund type for equity securities, fixed income and cash, and alternative investments were 12%, 8% and 17% as of December 31, 2016, respectively, and 10%, 7% and 17% as of December 31, 2015, respectively.

~~Those investments that were measured at fair value using practical expedient were excluded from the fair value hierarchy. The practical expedient was not applied for~~ investments with a fair value of ~~$2,504~~$2,838 million and ~~$2,492~~$2,990 million in ~~2016~~2019 and ~~2015,~~2018, respectively, ~~and those investments~~ were classified within Level 3.3 and primarily relate to real estate. The remaining investments were substantially all considered Level 1 and 2.

FAIR VALUE OF PLAN ASSETS

Principal pension plans
(In millions) 2016 2015

Balance at January 1 $ 45,720 $ 48,280
Actual gain on plan assets 2,892 307
Employer contributions 552 233
Participant contributions 115 155
Benefits paid (3,386) (3,255)
Balance at December 31 $ 45,893 $ 45,720

~~AMOUNTS INCLUDED IN SHAREOWNERS' EQUITY~~

~~Amounts included in shareowners' equity that will be amortized in future reporting periods follow.~~

Principal pension plans
December 31 (in millions) 2016 2015

Prior service cost $ 1,138 $ 1,473
Net actuarial loss 16,664 16,795
Total $ 17,802 $ 18,268

In 2017, we estimate that we will amortize $295 million of prior service cost and $2,840 million of net actuarial loss from shareowners' equity into pension cost. Comparable amounts amortized in 2016 were $303 million and $2,449 million, respectively.

~~GE 2016 FORM 10-K 170~~

~~OTHER PENSION AND POSTRETIREMENT PLANS~~

~~We also administer other pension plans, including legacy plans that were part of acquisitions.~~ Other pension plans investments with a fair value of $105 million and $116 million in ~~2016 included 49~~2019 and 2018, respectively, were classified within Level 3. Principal retiree benefit plan investments with a fair value of $289 million and $362 million at December 31, 2019 and 2018, respectively, comprised global equity and debt securities which are considered Level 1 and 2. There were no Level 3 principal retiree benefit plan investments held in 2019 and 2018. Plan assets that were measured at fair value using NAV as practical expedient were excluded from the fair value hierarchy.



ASSET ALLOCATION OF PENSION PLANS	2019 Target allocation				2019 Actual allocation
	Principal Pension		Other Pension (weighted average)		Principal Pension		Other Pension (weighted average)

Global equity	30.0 - 47.0	%	23	%	41	%	27	%
Debt securities (including cash equivalents)	21.0 - 65.0		55		42		51
Real estate	3.5 - 13.5		9		7		11
Private equities & other investments	6.0 - 16.0		13		10		11

GE2019 FORM 10-K 92



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Plan fiduciaries of the GE Pension Plan set investment policies and strategies for the GE Pension Trust and oversee its investment allocation, which includes selecting investment managers and setting long-term strategic targets. The primary strategic investment objectives are balancing investment risk and return and monitoring the plan’s liquidity position in order to meet the near-term benefit payment and other cash needs. Target allocation percentages are established at an asset class level by plan fiduciaries. Target allocation ranges are guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range.

GE securities represented 0.6% and 0.5% of the GE Pension Trust assets at December 31, 2019 and 2018, respectively. The GE Pension Plan has a broadly diversified portfolio of investments in equities, fixed income, private equities and real estate; these investments are both U.S. and non-U.S. ~~pension plans with~~in nature. The plan utilizes derivatives to implement investment strategies as well as for hedging asset and liability risks. As of December 31, 2019, no sector concentration of assets ~~or obligations greater than $50 million. These other pension plans cover 60,000 retirees and beneficiaries, 59,000 vested former employees and 33,000 active employees. We also sponsor a number~~exceeded 15% of ~~postretirement health and life insurance benefit plans (retiree benefit plans). Principal retiree benefit plans cover approximately 187,000 retirees and dependents.~~total GE Pension Plan assets.

~~Summarized information about these plans follows.~~

COST OF BENEFIT PLANS

Other pension plans Principal retiree benefit plans
(In millions) 2016 2015 2014 2016 2015 2014

Benefit plan cost $ 374 $ 373 $ 412 $ 115 $ 174 $ 789

FUNDED STATUS

Principal retiree
Other pension plans benefit plans
December 31 (In millions) 2016 2015 2016 2015

Benefit obligations $ 22,543 $ 21,618 $ 6,289 $ 6,757
Fair value of plan assets 17,091 17,368 575 695
Underfunded $ 5,452 $ 4,250 $ 5,714 $ 6,062

~~AMOUNTS INCLUDED IN SHAREOWNERS' EQUITY~~

~~Amounts included in shareowners' equity that will be amortized in future reporting periods follow.~~

Principal retiree
Other pension plans benefit plans
December 31 (In millions) 2016 2015 2016 2015

Prior service credit $ (88) $ (29) $ (2,975) $ (3,132)
Net actuarial loss (gain) 4,800 3,080 (682) (464)
Total $ 4,712 $ 3,051 $ (3,657) $ (3,596)

In 2017, we estimate that we will amortize $5 million of prior service credit and $520 million of net actuarial loss for the other pension plans from shareowners' equity into pension cost. For principal retiree benefit plans, the estimated prior service credit and net actuarial gain to be amortized in 2017 will be $170 million and $80 million, respectively. Comparable amounts amortized in 2016, respectively, were $1 million of prior service credit and $256 million of net actuarial loss for the other pension plans and $164 million of prior service credit and $50 million of net actuarial gain for the principal retiree benefit plans.

OUR FUNDING ~~POLICY~~

POLICY. Our policy for funding the GE Pension Plan is to contribute amounts sufficient to meet minimum funding requirements under employee benefit and tax laws. We may decide to contribute additional amounts beyond this level. We made ~~a contribution~~contributions of ~~$330~~$6,000 million to the GE Pension Plan in ~~2016. We did not make any~~2018. Our 2018 contributions satisfied our minimum ERISA funding requirement of $1,500 million and the remaining $4,500 million was a voluntary contribution to the ~~GE Pension Plan in 2015. We expect~~plan. This voluntary contribution was sufficient to satisfy our minimum ERISA funding requirement for 2019 and 2020. In October 2019, we announced our intent to contribute approximately ~~$1,720~~$4,000 million to $5,000 million to the GE Pension Plan in ~~2017.~~2020. We expect this amount to equal our estimated future minimum ERISA funding requirements at least through 2022.

We expect to pay approximately ~~$250~~$305 million for benefit payments under our GE Supplementary Pension Plan and administrative expenses of our principal pension plans and expect to contribute approximately ~~$910~~$500 million to other pension plans in ~~2017. In 2016, comparative amounts were $222 million and $795 million, respectively.~~

2020. We fund retiree health benefits on a pay-as-you-go basis and the retiree life insurance trust at our discretion. We expect to contribute approximately ~~$460~~$360 million in ~~2017~~2020 to fund such benefits. ~~In 2016, we contributed~~



EXPECTED FUTURE BENEFIT PAYMENTS OF OUR BENEFIT PLANS (In millions)	Principal pension		Other pension		Principal retiree benefit

2020	$	3,795	$	1,030	$	495
2021	3,875		1,005		475
2022	3,930		1,015		455
2023	3,965		1,035		435
2024	3,980		1,050		415
2025 - 2029	19,965		5,550		1,775

DEFINED CONTRIBUTION PLAN. We have a defined contribution plan for eligible U.S. employees that provides discretionary contributions. Defined contribution costs were $355 million, $410 million and $460 million for ~~these plans.~~the years ended December 31, 2019, 2018, and 2017, respectively.



COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME
For the years ended December 31	2019									2018									2017
(In millions, pre-tax)	Principal pension			Other pension			Principal retiree benefit			Principal pension			Other pension			Principal retiree benefit			Principal pension			Other pension			Principal retiree benefit

Cost (income) of postretirement benefit plans	$	3,929		$	(21	)	$	(149	)	$	4,260		$	(110	)	$	(79	)	$	3,687		$	364		$	35
Changes in other comprehensive income
Prior service cost (credit) - current year	(42		)	(17		)	(23		)	—			82			—			—			—			(8		)
Actuarial loss (gain) - current year	971			1,252			240			(111		)	464			(543		)	474			(639		)	(128		)
Reclassifications out of AOCI
Curtailment / settlement gain (loss)	(353		)	(12		)	4			(45		)	(2		)	—			(64		)	(20		)	(4		)
Amortization of net actuarial gain (loss)	(3,439		)	(319		)	118			(3,785		)	(312		)	79			(2,812		)	(418		)	80
Amortization of prior service credit (cost)	(135		)	(3		)	232			(143		)	9			230			(290		)	5			171
Total changes in other comprehensive income	(2,998		)	901			571			(4,084		)	241			(234		)	(2,692		)	(1,072		)	111
Cost of postretirement benefit plans and changes in other comprehensive income	$	931		$	880		$	422		$	176		$	131		$	(313	)	$	995		$	(708	)	$	146

GE2019 FORM 10-K 93

~~See Note 29 for further information about our pension plans and principal retiree benefit plans.~~



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~GE 2016 FORM 10-K 171~~

NOTE ~~13.~~14. CURRENT AND ALL OTHER LIABILITIES



December 31 (In millions)	2019			2018

Sales allowances, equipment projects and other commercial liabilities	$	5,203		$	5,255
Product warranties (Note 23)	1,371			1,346
Employee compensation and benefit liabilities	5,114			5,138
Taxes payable	1,349			503
Environmental, health and safety liabilities (Note 23)	330			204
Due to GE Capital	1,080			1,578
Other	2,385			2,422
Other GE current liabilities	16,833			16,444
Eliminations	(1,080		)	(1,578		)
Consolidated other GE current liabilities	$	15,753		$	14,866

Sales allowances, equipment projects and other commercial liabilities	4,422			5,136
Product warranties (Note 23)	793			846
Uncertain tax positions and related liabilities	2,585			3,404
Alstom legacy legal matters (Note 23)	875			889
Environmental, health and safety liabilities (Note 23)	2,154			1,968
Redeemable noncontrolling interests (Note 16)	439			378
Derivative instruments (Note 21)	171			328
Other	1,349			1,931
GE all other liabilities	$	12,787		$	14,881

Aircraft maintenance reserve, sales deposits and other commercial liabilities	2,900			2,585
Interest payable	1,189			1,458
Uncertain tax positions and other taxes payable	394			1,646
Derivative instruments (Note 21)	31			258
Other	525			1,615
GE Capital other liabilities	$	5,040		$	7,562
Eliminations	(1,244		)	(1,605		)
Consolidated all other liabilities	$	16,583		$	20,839
Total	$	32,336		$	35,705

This caption includes liabilities for various items including deferred income, interest on tax liabilities, unrecognized tax benefits, environmental remediation, legal reserves, asset retirement obligations, derivative instruments, product warranties and a variety of sundry items.

See Note 14 for further information on interest on tax liabilities and unrecognized tax benefits. See Notes 20 and 29 for further information on derivative instruments. See Note 23 for further information on environmental matters, legal reserves and product warranties.

NOTE ~~14.~~15. INCOME TAXES

Our businesses are subject to regulation under a wide variety of U.S. federal, state and foreign tax laws, regulations and policies. Changes to these laws or regulations may affect our tax liability, return on investments and business operations.

~~THE GE CAPITAL EXIT PLAN~~



(BENEFIT) PROVISION FOR INCOME TAXES (In millions)	2019			2018			2017

Current tax expense (benefit)	$	2,551		$	1,743		$	2,405
Deferred tax expense (benefit) from temporary differences	(1,242		)	(1,276		)	1,088
Total GE	1,309			467			3,493
Current tax expense (benefit)	(720		)	596			(1,008		)
Deferred tax expense (benefit) from temporary differences	138			(970		)	(5,294		)
Total GE Capital	(582		)	(374		)	(6,302		)
Current tax expense (benefit)	1,831			2,339			1,397
Deferred tax expense (benefit) from temporary differences	(1,104		)	(2,245		)	(4,205		)
Total consolidated	$	726		$	93		$	(2,808	)



CONSOLIDATED EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (In millions)	2019		2018			2017

U.S. earnings	$	506	$	(9,861	)	$	(17,918	)
Non-U.S. earnings	643		(11,126		)	6,573
Total	$	1,149	$	(20,987	)	$	(11,345	)

GE2019 FORM 10-K 94



CONSOLIDATED (BENEFIT) PROVISION FOR INCOME TAXES (In millions)	2019			2018			2017

U.S. Federal
Current	$	146		$	1,019		$	(734	)
Deferred	(1,266		)	(3,144		)	(3,625		)
Non - U.S.
Current	2,008			1,132			1,820
Deferred	106			1,197			(429		)
Other	(267		)	(111		)	160
Total	$	726		$	93		$	(2,808	)



INCOME TAXES PAID (RECOVERED) (In millions)	2019		2018		2017

GE	$	2,183	$	1,803	$	2,700
GE Capital	45		65		(264		)
Total(a)	$	2,228	$	1,868	$	2,436

In conjunction with the GE Capital Exit Plan, GE Capital significantly reduced its non-U.S. assets while continuing to operate appropriately capitalized non-U.S. businesses with substantial assets related to GE Capital's vertical financing businesses, including Energy Financial Services, GECAS and Healthcare Equipment Finance. As a result of the GE Capital Exit Plan, GE Capital recognized a(a) Includes tax expense of $6,327 million in continuing operations during 2015. This primarily consisted of $3,548 million of tax expense related to the repatriation of excess foreign cash and the write-off of deferred tax assets of $2,779 million that will no longer be supported under this plan.

The repatriation of cash included approximately $10 billion of foreign earnings that, prior to the approval of the GE Capital Exit Plan, were indefinitely reinvested in GE Capital's international operations. GE Capital's indefinitely reinvested earnings were also reduced by charges recognized in connection with the disposition of international assets. The remainder of the indefinitely reinvested earnings will continue to be reinvested in the significant international base of assets that will remain after the GE Capital Exit Plan is fully executed. The write-off of deferred tax assets largely related to our Treasury operations in Ireland where it was no longer apparent that the tax benefits would be realized upon implementation of the GE Capital Exit Plan. These charges, which increased the 2015 Consolidated effective tax rate by 77.3 percentage points, arepayments reported in ~~the lines "Tax on global activities including exports", and "All other-net" in the Reconciliation of U.S. federal statutory income tax rate to actual income tax rate."~~discontinued operations.



RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO ACTUAL INCOME TAX RATE	Consolidated						GE						GE Capital
	2019		2018		2017		2019		2018		2017		2019		2018		2017

U.S. federal statutory income tax rate	21.0	%	21.0	%	35.0	%	21.0	%	21.0	%	35.0	%	21.0	%	21.0	%	35.0	%
Increase (reduction) in rate resulting from inclusion of after-tax earnings of GE Capital in before-tax earnings of GE	—		—		—		8.8		(0.5	)	(43.2	)	—		—		—
Tax on global activities including exports	91.0		(5.0	)	30.3		86.5		(5.0	)	34.6		8.1		3.2		12.2
U.S. business credits(a)	(22.5	)	2.6		4.3		(9.1	)	0.4		1.5		21.9		120.0		3.2
Goodwill impairments	26.0		(21.5	)	(7.8	)	23.5		(21.4	)	(7.3	)	—		—		(3.8	)
Tax Cuts and Jobs Act enactment	0.2		(0.2	)	(39.8	)	7.9		0.5		(89.6	)	15.2		(36.5	)	3.1
All other – net(b)(c)(d)	(52.5	)	2.7		2.8		(35.6	)	2.8		5.2		23.1		(8.0	)	0.2
	42.2		(21.4	)	(10.2	)	82.0		(23.2	)	(98.8	)	68.3		78.7		14.9
Actual income tax rate	63.2	%	(0.4	)%	24.8	%	103.0	%	(2.2	)%	(63.8	)%	89.3	%	99.7	%	49.9	%

(BENEFIT) PROVISION FOR INCOME TAXES

(In millions) 2016 2015 2014

GE
Current tax expense (benefit) $ (140) $ 3,307 $ 2,110
Deferred tax expense (benefit) from temporary differences 1,107 (1,800) (476)
967 1,506 1,634
GE Capital
Current tax expense (benefit) (1,138) 2,796 (455)
Deferred tax expense (benefit) from temporary differences (293) 2,183 (406)
(1,431) 4,979 (861)
Consolidated
Current tax expense (benefit) (1,278) 6,103 1,655
Deferred tax expense (benefit) from temporary differences 814 383 (882)
Total $ (464) $ 6,485 $ 773

~~GE 2016 FORM 10-K 172~~

CONSOLIDATED EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

(In millions) 2016 2015 2014

U.S. earnings $ 2,145 $ (309) $ 3,176
Non-U.S. earnings 6,885 8,495 7,087
Total $ 9,030 $ 8,186 $ 10,263

CONSOLIDATED (BENEFIT) PROVISION FOR INCOME TAXES

(In millions) 2016 2015 2014

U.S. Federal
Current $ (2,646) $ 1,549 $ (122)
Deferred (754) 492 261
Non - U.S.
Current 1,730 4,867 2,035
Deferred 1,239 (121) (982)
Other (33) (302) (419)
Total $ (464) $ 6,485 $ 773

RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO ACTUAL INCOME TAX RATE

Consolidated GE GE Capital
2016 2015 2014 2016 2015 2014 2016 2015 2014

U.S. federal statutory income tax rate 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % 35.0 %
   Increase (reduction) in rate resulting from
    inclusion of after-tax earnings of GE Capital in
         before-tax earnings of GE - - - 4.5 82.4 (4.8) - - -
   Tax on global activities including exports (23.7) 54.1 (17.7) (20.8) (52.8) (12.0) 4.9 (224.5) (72.0)
   U.S. business credits(a) (4.5) (4.7) (3.3) (0.9) (4.1) (1.0) 15.7 9.2 (34.5)
   All other – net(b)
(11.9) (5.2) (6.5) (7.9) (14.2) (2.5) 14.7 (1.5) (55.9)
(40.1) 44.2 (27.5) (25.1) 11.3 (20.3) 35.3 (216.8) (162.4)
Actual income tax rate (5.1) % 79.2 % 7.5 % 9.9 % 46.3 % 14.7 % 70.3 % (181.8) % (127.4) %


(a)	U.S. general business credits, primarily the credit for energy produced from renewable sources ~~the advanced energy project credit~~ and the credit for research performed in the U.S.

(b)

Included, (7.7)% and (7.1)% in consolidated and GE, respectively, related to deductible stock losses in 2016. Included (4.2)% and (10.6)% in consolidated and GE, respectively, related to deductible stock losses in 2015. Also includes, for each period, the expense or ~~(benefit)~~benefit for ~~"Other"~~Other taxes reported above in the consolidated (benefit) provision for income taxes, net of ~~35%~~21.0% federal ~~effect.~~effect for the years ended December 31, 2019 and 2018 and 35.0% federal effect for the year ended December 31, 2017.

(c)

For the year ended December 31, 2019, included (12.5)% and (11.3)% in consolidated and GE, respectively, related to the disposition of the Digital ServiceMax business. For the year ended December 31, 2018, included 2.8% and 2.8% in consolidated and GE, respectively, related to deductible stock losses. Included in 2017 is 5.6% and 11.7% in consolidated and GE, respectively, related to the disposition of the Water business. Also included in 2017 is (3.1)% and (6.4)% in consolidated and GE, respectively, related to losses on planned dispositions.


(d)	For the year ended December 31, 2019, included (32.9)%, (27.9)% and 3.5% in consolidated, GE and GE Capital, respectively for the resolution of the IRS audit of our consolidated U.S. income tax returns for 2012-2013.

U.S. TAX REFORM.On December 22, 2017, the U.S. enacted legislation commonly known as the Tax Cuts and Jobs Act (U.S. tax reform) that lowered the statutory tax rate on U.S. earnings to 21%, taxes historic foreign earnings at a reduced rate of tax, establishes a territorial tax system and enacts new taxes associated with global operations.

The impact of enactment of U.S. tax reform was recorded in 2017 on a provisional basis as the legislation provided for additional guidance to be issued by the U.S. Department of the Treasury on several provisions including the computation of the transition tax. This amount was adjusted in both 2018 and 2019 based on guidance issued during each of these years. Additional guidance may be issued after 2019 and any resulting effects will be recorded in the quarter of issuance. Additionally, as part of U.S. tax reform, the U.S. has enacted a minimum tax on foreign earnings (global intangible low tax income). We have not made an accrual for the deferred tax aspects of this provision.

GE2019 FORM 10-K 95

With the enactment of U.S. tax reform, we recorded, for the year ended December 31, 2017, tax expense of $4,512 million to reflect our provisional estimate of both the transition tax on historic foreign earnings ($1,155 million including $2,925 million at GE and $(1,770) million at GE Capital) and the revaluation of deferred taxes ($3,357 million including $1,980 million at GE and $1,377 million at GE Capital). For the year ended December 31, 2018, we finalized our provisional estimate of the enactment of U.S. tax reform and recorded an additional tax expense of $41 million. For the year ended December 31, 2019, we recorded an additional tax expense of $2 million based on the issuance in January 2019 of final regulations on the transition tax on historic foreign earnings. The cash impact of the transition tax on historic foreign earnings was largely offset by accelerated use of deductions and tax credits and was substantially incurred with the filing of the 2017 tax return with no amount subject to the deferred payment provision provided under law.

UNRECOGNIZED TAX ~~POSITIONS~~

POSITIONS.Annually, we file over ~~6,000~~4,100 income tax returns in ~~over~~almost 300 global taxing jurisdictions. We are under examination or engaged in tax litigation in many of these jurisdictions. The Internal Revenue Service (IRS) is currently auditing our consolidated U.S. income tax returns for ~~2012-2013.~~2014-2015. In ~~addition, certain other~~June 2019, the IRS completed the audit of our consolidated U.S. income tax ~~deficiency issues and refund claims~~returns for ~~previous years are still unresolved. It is reasonably possible that a portion of the unresolved items could be resolved during the next 12 months,~~2012-2013, which ~~could result~~resulted in a decrease in our balance of ~~"unrecognized~~unrecognized tax ~~benefits" – that is,~~benefits (i.e., the aggregate tax effect of differences between tax return positions and the benefits recognized in our financial ~~statements.~~statements). The ~~IRS had disallowed the~~Company recognized a resulting non-cash continuing operations tax ~~loss on our 2003 disposition~~benefit of ~~ERC Life Reinsurance Corporation. We contested the disallowance~~$378 million plus an additional net interest benefit of ~~this loss. In August 2016, the government approved a final settlement~~$107 million. Of these amounts, GE recorded $355 million of ~~the case and the balance of unrecognized~~ tax benefits and ~~associated~~$98 million of net interest ~~was adjusted~~benefits and GE Capital recorded $23 million of tax benefits and $9 million of net interest benefits. GE Capital recorded an additional non-cash benefit in discontinued operations of $332 million of tax benefits and $46 million of net interest benefits. See Note 2 for further information. As previously disclosed, the United Kingdom tax authorities disallowed interest deductions claimed by GE Capital for the years 2007-2015 that could result in a potential impact of approximately $1 billion, which includes a possible assessment of tax and reduction of deferred tax assets, not including interest and penalties. We are contesting the disallowance. We comply with all applicable tax laws and judicial doctrines of the United Kingdom and believe that the entire benefit is more likely than not to ~~reflect the agreed settlement. During 2015, the IRS completed the audit of our consolidated U.S. income tax returns for 2010-2011, except for certain issues that were completed in 2016.~~be sustained on its technical merits. We believe that there are no other jurisdictions in which the outcome of unresolved issues or claims is likely to be material to our results of operations, financial position or cash flows. We further believe that we have made adequate provision for all income tax uncertainties. Resolution of audit matters, including the IRS audit of our consolidated U.S. income tax returns for 2010-2011 and the resolution of the ERC Life Reinsurance Corporation case, reduced our 2016 consolidated income tax rate by 5.3 percentage points. Resolution of audit matters, including the IRS audit of our consolidated U.S. income tax returns for 2010-2011, reduced our 2015 consolidated income tax rate by 4.4 percentage points.

~~GE 2016 FORM 10-K 173~~

The balance of unrecognized tax benefits, the amount of related interest and penalties we have provided and what we believe to be the range of reasonably possible changes in the next 12 months were:



UNRECOGNIZED TAX BENEFITS December 31 (Dollars in millions)	2019		2018

Unrecognized tax benefits	$	4,169	$	5,563
Portion that, if recognized, would reduce tax expense and effective tax rate(a)	2,701		4,265
Accrued interest on unrecognized tax benefits	722		934
Accrued penalties on unrecognized tax benefits	195		182
Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months	0-700		0-1,300
Portion that, if recognized, would reduce tax expense and effective tax rate(a)	0-650		0-1,200

UNRECOGNIZED TAX BENEFITS

December 31, (In millions) 2016 2015

Unrecognized tax benefits $ 4,692 $ 6,778
Portion that, if recognized, would reduce tax expense and effective tax rate(a) 2,886 4,723
Accrued interest on unrecognized tax benefits 615 805
Accrued penalties on unrecognized tax benefits 118 98
Reasonably possible reduction to the balance of unrecognized tax benefits
in succeeding 12 months 0-600 0-700
Portion that, if recognized, would reduce tax expense and effective tax rate(a) 0-500 0-200

(a) Some portion of such reduction may be reported as discontinued operations.



UNRECOGNIZED TAX BENEFITS RECONCILIATION (In millions)	2019			2018

Balance at January 1	$	5,563		$	5,449
Additions for tax positions of the current year	403			300
Additions for tax positions of prior years	500			945
Reductions for tax positions of prior years(a)	(1,927		)	(905		)
Settlements with tax authorities	(155		)	(64		)
Expiration of the statute of limitations	(214		)	(162		)
Balance at December 31	$	4,169		$	5,563

~~(a)~~

~~Some portion of such reduction may be reported as discontinued operations.~~

UNRECOGNIZED TAX BENEFITS RECONCILIATION

(In millions) 2016 2015

Balance at January 1 $ 6,778 $ 5,619
Additions for tax positions of the current year 248 720
Additions for tax positions of prior years(a) 521 1,296
Reductions for tax positions of prior years (2,016) (754)
Settlements with tax authorities (823) (70)
Expiration of the statute of limitations (16) (33)
Balance at December 31 $ 4,692 $ 6,778

(a)

For ~~2015, the amount shown as "additions for tax positions of prior years" relates primarily ($1,054 million)~~2019, reductions included $710 million related to the ~~preliminary estimate~~completion of ~~uncertain tax liabilities for acquired Alstom businesses. Of~~ the ~~total 2015 additions for tax positions~~2012-2013 IRS audit and $442 million related to the deconsolidation of ~~prior years, $445 million relates to amounts that would not affect tax expense if recognized.~~Baker Hughes.

We classify interest on tax deficiencies as interest expense; we classify income tax penalties as provision for income taxes. For the years ended December 31, ~~2016, 2015~~2019, 2018 and ~~2014, $(105)~~2017, $(93) million, ~~$48~~$127 million and ~~$(68)~~$143 million of interest expense (income), respectively, and ~~$(4)~~$20 million, ~~$(4)~~$(7) million and ~~(45)~~$7 million of tax expense (income) related to penalties, respectively, were recognized in ~~the~~our consolidated Statement of ~~Earnings.~~Earnings (Loss).

DEFERRED INCOME ~~TAXES~~

Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as from net operating loss and tax credit carryforwards, and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. We evaluate the recoverability of these future tax deductions and credits by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. To the extent we do not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established.

TAXES.We have not provided ~~U.S.~~ deferred taxes on cumulative net earnings of non-U.S. affiliates and associated companies of approximately $40 billion that have been reinvested indefinitely. ~~These~~Given U.S. tax reform, substantially all of our prior unrepatriated earnings ~~relate~~were subject to ~~ongoing operations~~U.S. tax and ~~at December 31, 2016~~accordingly we expect to have the ability to repatriate available non-U.S. cash without additional federal tax cost, and ~~2015, were approximately $82 billion and $104 billion, respectively. Most~~any foreign withholding tax on a repatriation to the U.S. would potentially be partially offset by a U.S. foreign tax credit. However, because most of these earnings have been reinvested in active non-U.S. business operations, ~~and~~as of December 31, 2019, we dohave not ~~intend~~decided to repatriate these earnings to ~~fund~~the U.S. ~~operations. Because of the availability of U.S. foreign tax credits, it~~It is not practicable to determine the ~~U.S. federal~~ income tax liability that would be payable if such earnings were not reinvested indefinitely. ~~Deferred taxes are provided for earnings of non-U.S. affiliates and associated companies when we plan to remit those earnings.~~

GE2019 FORM 10-K 96



DEFERRED INCOME TAXES December 31 (In millions)	2019			2018

GE	$	12,807		$	14,479
GE Capital	5,124			6,214
Total assets	17,931			20,693
GE	(4,618		)	(4,302		)
GE Capital	(3,424		)	(4,278		)
Eliminations	—			4
Total liabilities	(8,042		)	(8,576		)
Net deferred income tax asset (liability)	$	9,889		$	12,117

~~GE 2016 FORM 10-K 174~~



COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY) December 31 (In millions)	2019			2018

Principal pension plans	$	4,016		$	3,883
Other non-current compensation and benefits	2,206			2,431
Provision for expenses	1,990			2,208
Intangible assets	1,315			820
Retiree insurance plans	1,023			1,006
Non-U.S. loss carryforwards(a)	602			1,362
U.S. credit carryforwards(b)	74			74
Baker Hughes investment	(1,256		)	721
Contract assets	(1,232		)	(1,781		)
Depreciation	(823		)	(855		)
Other – net(c)	274			307
GE	8,189			10,176
Operating leases	(2,218		)	(2,690		)
Financing leases	(477		)	(599		)
Intangible assets	(10		)	(16		)
Insurance company loss reserves	1,715			1,386
Non-U.S. loss carryforwards(a)	1,274			1,231
U.S. credit carryforwards(b)	785			2,491
Other – net(c)	631			133
GE Capital	1,700			1,936
Eliminations	—			4
Net deferred income tax asset (liability)	$	9,889		$	12,117

~~Aggregated deferred income tax amounts are summarized below.~~

December 31 (In millions) 2016 2015

Assets
GE $ 21,106 $ 20,539
GE Capital 5,093 4,643
26,199 25,182
Liabilities
GE (14,440) (12,873)
GE Capital (9,926) (9,204)
(24,366) (22,077)
Net deferred income tax asset (liability) $ 1,833 $ 3,105

COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY)

December 31 (In millions) 2016 2015

GE
Principal pension plans $ 8,963 $ 8,051
Other non-current compensation and benefits 4,230 4,133
Provision for expenses 2,633 2,827
Retiree insurance plans 2,000 2,122
Non-U.S. loss carryforwards(a) 1,444 1,940
Contract assets (6,677) (5,143)
Intangible assets (2,962) (3,192)
Depreciation (1,755) (1,688)
Investment in global subsidiaries (899) (915)
Other – net (311) (469)
6,666 7,666
GE Capital
Operating leases (3,582) (3,863)
Financing leases (1,632) (1,665)
Energy investments (1,410) (1,276)
Investment in global subsidiaries (343) 5
Intangible assets (125) (103)
Non-U.S. loss carryforwards(a) 1,323 2,262
Other – net 936 79
(4,833) (4,561)
Net deferred income tax asset (liability) $ 1,833 $ 3,105

(a)

Net of valuation allowances of ~~$2,450~~$4,801 million and ~~$2,184~~$3,799 million for GE and ~~$391~~$201 million and ~~$109~~$767 million for GE Capital ~~for 2016~~as of December 31, 2019 and ~~2015,~~2018, respectively. Of the net deferred tax asset as of December 31, ~~2016,~~2019 of ~~$2,767~~$1,876 million, $6$3 million relates to net operating loss carryforwards that expire in various years ending from December 31, ~~2016~~2020 through December 31, ~~2018; $472~~2022; $193 million relates to net operating losses that expire in various years ending from December 31, ~~2020~~2023 through December 31, ~~2036~~2039 and ~~$2,289~~$1,680 million relates to net operating loss carryforwards that may be carried forward indefinitely.

~~GE 2016 FORM 10-K 175~~

~~NOTE 15. SHAREOWNERS' EQUITY~~

(In millions) 2016 2015 2014

Preferred stock issued $ 6 $ 6 $ -
Common stock issued $ 702 $ 702 $ 702
Accumulated other comprehensive income (loss)
Balance at January 1 $ (16,529) $ (18,172) $ (9,119)
Other comprehensive income (loss) before reclassifications (4,602) (3,312) (12,088)
Reclassifications from other comprehensive income 2,533 4,956 3,035
Other comprehensive income (loss), net, attributable to GE (2,069) 1,644 (9,053)
Balance at December 31 $ (18,598) $ (16,529) $ (18,172)
Other capital
Balance at January 1 $ 37,613 $ 32,889 $ 32,494
Gains (losses) on treasury stock dispositions and other(a)(b) (389) 4,724 396
Balance at December 31 $ 37,224 $ 37,613 $ 32,889
Retained earnings
Balance at January 1 $ 140,020 $ 155,333 $ 149,051
Net earnings (loss) attributable to the Company 8,831 (6,126) 15,233
Dividends and other transactions with shareowners (9,054) (9,161) (8,948)
Redemption value adjustment on redeemable noncontrolling interests (266) (25) (2)
Balance at December 31 $ 139,532 $ 140,020 $ 155,333
Common stock held in treasury
Balance at January 1 $ (63,539) $ (42,593) $ (42,561)
Purchases(c)(d) (22,073) (23,762) (1,950)
Dispositions 2,574 2,816 1,917
Balance at December 31 $ (83,038) $ (63,539) $ (42,593)
Total equity
GE shareowners' equity balance at December 31 $ 75,828 $ 98,274 $ 128,159
Noncontrolling interests balance at December 31 1,663 1,864 8,674
Total equity balance at December 31 $ 77,491 $ 100,138 $ 136,833

~~(a)~~

~~Included $440 million related to the excess of the net proceeds from the Synchrony Financial IPO over the carrying value of the interest sold in 2014.~~

(b)

~~Included $4,949~~Of the net deferred tax asset as of December 31, 2019 of $859 million ~~related to issuance of new preferred stock~~for U.S. credit carryforwards, $74 million expires in ~~exchange for existing GE Capital preferred stock~~the years ending December 31, 2030 through 2032 and $785 million expires in ~~2015.~~various years ending from December 31, 2036 through December 31, 2039.

(c) Included valuation allowances related to assets other than non-U.S. loss carryforwards of $1,897 million and $1,002 million for GE and $248 million and $131 million for GE Capital as of December 31, 2019 and 2018, respectively.

GE2019 FORM 10-K 97



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~(c)~~

~~Included $(20,383) million related to the split-off of Synchrony Financial from GE, where GE shares were exchanged for shares of Synchrony Financial in 2015.~~

~~(d)~~

~~Included $(11,370) million of GE shares purchased under accelerated share repurchase (ASR) agreements in 2016.~~

NOTE 16. SHAREHOLDERS’ EQUITY



ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (In millions)	2019			2018			2017

Beginning balance	$	(39	)	$	(102	)	$	674
Other comprehensive income (loss) (OCI) before reclassifications – net of deferred taxes of $32, $41 and $(335)(a)	141			87			(627		)
Reclassifications from OCI – net of deferred taxes of $(11), $(6) and $(81)	(42		)	(23		)	(149		)
Other comprehensive income (loss)	100			64			(776		)
Less OCI attributable to noncontrolling interests	—			—			1
Investment securities ending balance	$	61		$	(39	)	$	(102	)

Beginning balance	$	(6,134	)	$	(4,661	)	$	(6,806	)
OCI before reclassifications – net of deferred taxes of $(98), $29 and $(537)	41			(2,076		)	846
Reclassifications from OCI – net of deferred taxes of $(9), $89 and $(543)(b)	1,234			412			1,333
Other comprehensive income (loss)	1,275			(1,664		)	2,179
Less OCI attributable to noncontrolling interests	(40		)	(192		)	35
Currency translation adjustments ending balance	$	(4,818	)	$	(6,134	)	$	(4,661	)

Beginning balance	$	13		$	62		$	12
OCI before reclassifications – net of deferred taxes of $6, $(26) and $31	(21		)	(149		)	171
Reclassifications from OCI – net of deferred taxes of $2, $4 and $(28)	58			98			(120		)
Other comprehensive income (loss)	37			(51		)	51
Less OCI attributable to noncontrolling interests	2			(2		)	1
Cash flow hedges ending balance	$	49		$	13		$	62

Beginning balance	$	(8,254	)	$	(9,702	)	$	(12,469	)
OCI before reclassifications – net of deferred taxes of $(355), $115 and $32	(1,820		)	71			550
Reclassifications from OCI – net of deferred taxes of $852, $2,610 and $1,111	3,048			1,345			2,232
Other comprehensive income (loss)	1,228			1,416			2,782
Less OCI attributable to noncontrolling interests	(2		)	(32		)	15
Benefit plans ending balance	$	(7,024	)	$	(8,254	)	$	(9,702	)

Accumulated other comprehensive income (loss) at December 31	$	(11,732	)	$	(14,414	)	$	(14,404	)

(a) Included adjustments of $(2,693) million, $1,825 million and $(1,259) million in 2019, 2018 and 2017, respectively, related to 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 security gains been realized. See Note 12 for further information.

(b) Currency translation gains and losses included $1,066 million, 0 and $483 million in 2019, 2018 and 2017, respectively, in earnings (loss) from discontinued operations, net of taxes.

In 2016, we issued $5,694 million of GE ~~2016 FORM 10-K 176~~

~~SHARES OF GE PREFERRED STOCK~~

~~At December 31, 2014, GECC had outstanding 50,000 shares of non-cumulative A, B and C~~ Series ~~perpetual~~D preferred stock, ~~at an average dividend rate~~which are callable on January 21, 2021. In addition to Series D, $250 million of ~~6.44% with a face value of $5,000 million. In connection with the~~existing GE Capital Exit Plan, on December 3, 2015, these shares were converted into a corresponding Series A, B, and C of fixed-to-floating rate non-cumulative perpetual preferred stock issued by GE with face value of $2,778 million, $2,073 million, and $1,094 million, respectively, for a cumulative face value of $5,944 million and an initial average fixed dividend rate of 4.07%. The incremental shares were issued in order to compensate preferred holders for the lower dividend rate. Subsequent to the issuance of the preferred stock on December 3, 2015, in response to investor feedback, GE launched an exchange offer on December 18, 2015 that allowed GE preferred stock investors to exchange their existing Series A, B and C preferred stock into a Series D GE preferred stock. These Series D instruments bear an initial fixed interest rate of 5.00% through January 21, 2021, will bear a floating rate equal to three-month LIBOR plus 3.33% thereafter and are callable on January 21, 2021. On January 20, 2016, $2,687 million of Series A, $2,008 million of Series B and $999 million of Series C were exchanged into $5,694 million Series D GE preferred stock. In addition to interim dividends and accretion of $129 million, a deemed dividend of $232 million was recorded in the year ended December 31, 2016. The deemed dividend included $195 million for the amount by which the fair value of the Series D GE preferred stock exceeded the fair value of the original GECC Series A, B and C preferred stock, and a cash payment of $37 million to the GE Series A and B preferred stockholders who exchanged into the Series D GE preferred stock. Post exchange, $91 million of Series A, $64 million of Series B and $95 million of Series C GE preferred stock remainalso outstanding. The total carrying value of ~~the~~ GE preferred stock at December 31, ~~2016~~2019 was ~~$5,283~~$5,738 million and will increase to $5,944 million ~~through periodic accretion to~~by the respective call dates ~~of each series. Principal and accretion for the preferred stock is recorded in other capital in the consolidated Statement of Financial Position and~~ ~~dividends and accretion are presented under the caption "Preferred stock dividends" in the Statement of Earnings (Loss).~~ 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 totaled $460 million, including cash dividends of $295 million, $447 million, including cash dividends of $295 million, and $436 million, including cash dividends of $295 million, for the years ended December 31, 2019, 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~~mirrored the GE external preferred stock. In 2018, GE Capital and GE exchanged the existing Series D preferred stock ~~held by external investors~~ (~~$5,283~~issued to GE for new Series D preferred stock, which is mandatorily convertible into GE Capital Common stock on January 21, 2021. After this conversion, GE Capital will no longer pay preferred dividends to GE. The exchange of GE Capital Series D preferred stock has no impact on the GE Series D preferred stock, which remains callable for $5,694 million ~~carrying value at December 31, 2016).~~on January 21, 2021 or thereafter on dividend payment dates. Additionally, there were no changes to the existing Series A, B or C preferred stock issued to GE.

GE has 50.0 million authorized shares of preferred stock ($1.00 par value)~~. 5,944,250~~, of which 5,939,875, 5,939,875 and 5,939,875 shares ~~were issued and~~are outstanding as of December 31, ~~2016~~2019, 2018 and ~~2015,~~2017, respectively. ~~No shares were issued and outstanding as of December 31, 2014.~~

~~SHARES OF GE COMMON STOCK~~

On April 10, 2015, the GE Board has authorized a new repurchase program of up to $50.0 billion in common stock, excluding the Synchrony Financial exchange we completed in 2015. Under our share purchase programs, on a book basis, we repurchased shares of 725.8 million, 109.8 million and 73.6 million for a total of $22,005 million, $3,320 million and $1,901 million for the years ended 2016, 2015, and 2014, respectively. During 2016, we repurchased $11,370 million of our common stock under the accelerated share repurchase (ASR) agreements.

In December 2016, we entered into an ASR agreement with a financial institution which allowed us to repurchase GE common stock at a price below its volume weighted-average price during a given period. During the fourth quarter, we paid $2,200 million and received and classified as treasury shares an initial delivery of 59,177,215 shares based on then-current market prices. The payment was recorded as a reduction to shareowners' equity, consisting of a $1,870 million increase in treasury stock, which reflects the value of the shares received upon initial delivery, and a $330 million decrease in other capital, which reflects the value of the stock held back pending final delivery.

We accounted for the ASR as two separate transactions: (i) 59,177,215 shares of common stock initially delivered to GE and $1,870 million was accounted for as a treasury stock transaction and (ii) the unsettled contract of $330 million was determined to be a forward contract indexed to GE's own common stock. The initial delivery of 59,177,215 shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. GE has determined that the forward contract, indexed to its own common stock, met all the criteria for equity classification.

~~In the first quarter of 2017, we received the remaining 10,773,050 shares based on the final volume weighted-average price less the negotiated discount.~~

~~GE 2016 FORM 10-K 177~~

On November 17, 2015, we completed the split-off of Synchrony Financial through which we acquired 671,366,809 shares of GE common stock from our shareholders in exchange for 705,270,833 shares of Synchrony Financial stock we held.

~~GE's~~GE’s authorized common stock consists of ~~13,200,000,000~~13,200 million shares having a par value of $0.06 ~~each.~~each, with 11,694 million shares issued. Under our share purchase programs we repurchased shares of 1.1 million, and 19.5 million, for a total of $10 million and $235 million for the years ended 2019 and 2018, respectively.

~~Common shares issued and outstanding are summarized in the following table.~~

December 31 (In thousands) 2016 2015 2014

Issued 11,693,841 11,693,841 11,693,841
In treasury(a)(b) (2,951,227) (2,314,553) (1,636,461)
Outstanding 8,742,614 9,379,288 10,057,380

~~(a)~~

~~Included (671,367) thousand shares related to the split-off of Synchrony Financial from GE, where GE shares were exchanged for shares of Synchrony Financial in 2015.~~

~~(b)~~

~~Included (370,824) thousand GE shares purchased under accelerated share repurchase agreements in 2016.~~

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

(In millions) 2016 2015 2014

Investment securities
Balance at January 1 $ 460 $ 1,013 $ 307
Other comprehensive income (loss) (OCI) before reclassifications –
net of deferred taxes of $84, $(270) and $352(a) 170 (486) 562
Reclassifications from OCI – net of deferred taxes of $30, $(36) and $85 34 (67) 146
Other comprehensive income (loss)(b) 203 (553) 708
Less OCI attributable to noncontrolling interests (11) (1) 2
Balance at December 31 $ 674 $ 460 $ 1,013

Currency translation adjustments (CTA)
Balance at January 1 $ (5,499) $ (2,428) $ 283
OCI before reclassifications – net of deferred taxes of $719, $1,348 and $(129) (1,606) (4,932) (2,600)
Reclassifications from OCI – net of deferred taxes of $241, $(1,489) and $213 294 1,794 (129)
Other comprehensive income (loss)(b) (1,311) (3,137) (2,730)
Less OCI attributable to noncontrolling interests 6 (66) (19)
Balance at December 31 $ (6,816) $ (5,499) $ (2,428)

Cash flow hedges
Balance at January 1 $ (80) $ (180) $ (414)
OCI before reclassifications – net of deferred taxes of $(41), $(21) and $22 (234) (732) (609)
Reclassifications from OCI – net of deferred taxes of $37, $86 and $34 327 831 844
Other comprehensive income (loss)(b) 93 99 234
Less OCI attributable to noncontrolling interests - - -
Balance at December 31 $ 12 $ (80) $ (180)

Benefit plans
Balance at January 1 $ (11,410) $ (16,578) $ (9,296)
Prior service credit (costs) - net of deferred taxes of $46, $859 and $219 128 1,541 396
Net actuarial gain (loss) – net of deferred taxes of $(1,062), $647 and $(5,332) (3,074) 1,227 (9,849)
Net curtailment/settlement - net of deferred taxes of $12, $(42) and $41 19 (76) 72
Prior service cost amortization – net of deferred taxes of $84, $103 and $241 62 100 349
Net actuarial loss amortization – net of deferred taxes of $870, $1,199 and $859 1,797 2,373 1,753
Other comprehensive income (loss)(b) (1,068) 5,165 (7,278)
Less OCI attributable to noncontrolling interests (9) (3) 3
Balance at December 31 $ (12,469) $ (11,410) $ (16,578)

Accumulated other comprehensive income (loss) at December 31 $ (18,598) $ (16,529) $ (18,172)

~~(a)~~

Included adjustments of $57 million, $(611) million and $960 million in 2016, 2015 and 2014, respectively, to deferred acquisition costs, present value of future profits, and investment contracts, insurance liabilities and insurance 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 and losses actually been realized.

~~(b)~~

~~Total other comprehensive income (loss) was $(2,083) million, $1,575 million and $(9,066) million in 2016, 2015 and 2014, respectively.~~

~~GE 2016 FORM 10-K 178~~

RECLASSIFICATION OUT OF AOCI

(In millions) 2016 2015 2014 Statement of earnings caption

Available-for-sale securities
   Realized gains (losses) on
      sale/impairment of securities $ (63) $ 103 $ (231) Total revenues and other income(a)
   Income taxes 30 (36) 85 Benefit (provision) for income taxes(b)
   Net of tax $ (34) $ 67 $ (146)
Currency translation adjustments
   Gains (losses) on dispositions $ (535) $ (305) $ (85) Total revenues and other income(c)
   Income taxes 241 (1,489) 213 Benefit (provision) for income taxes(d)
   Net of tax $ (294) $ (1,794) $ 129
Cash flow hedges
  Gains (losses) on interest rate
     derivatives
$ (79) $ (130) $ (234) Interest and other financial charges
  Foreign exchange contracts (247) (801) (666) (e)
  Other (38) 13 22 (f)
   Total before tax (364) (918) (878)
   Income taxes 37 86 34 Benefit (provision) for income taxes
   Net of tax $ (327) $ (831) $ (844)
Benefit plan items
  Curtailment gain (loss) $ (31) $ 118 $ (113) (g)
  Amortization of prior service costs (146) (203) (590) (g)
  Amortization of actuarial gains (losses) (2,667) (3,572) (2,612) (g)
   Total before tax (2,844) (3,657) (3,315)
   Income taxes 966 1,260 1,141 Benefit (provision) for income taxes
   Net of tax $ (1,878) $ (2,397) $ (2,174)

Total reclassification adjustments (net of tax) $ (2,533) $ (4,956) $ (3,035)

~~(a)~~

~~Included $(70) million, $61 million and an insignificant amount in 2016, 2015 and 2014, respectively, in earnings (loss) from discontinued operations, net of taxes.~~

~~(b)~~

~~Included $32 million, $(30) million and $3 million in 2016, 2015 and 2014, respectively, in earnings (loss) from discontinued operations, net of taxes.~~

~~(c)~~

~~Included $(453) million, $(224) million and $(51) million in 2016, 2015 and 2014, respectively, in earnings (loss) from discontinued operations, net of taxes.~~

~~(d)~~

~~Included $241 million, $(1,506) million and $213 million in 2016, 2015 and 2014, respectively, in earnings (loss) from discontinued operations, net of taxes.~~

~~(e)~~

Included $(182) million, $(758) million and $(607) million in GE Capital revenues from services and $(65) million, $(43) million and $(59) million in interest and other financial charges in 2016, 2015 and 2014, respectively.

~~(f)~~

~~Primarily recorded in costs and expenses.~~

~~(g)~~

Curtailment gain (loss), amortization of prior service costs and actuarial gains and losses reclassified out of AOCI are included in the computation of net periodic pension costs. See Notes 12 and 29 for further information.

~~NONCONTROLLING INTERESTS~~

Noncontrolling interests in equity of consolidated affiliates ~~includes common shares in consolidated affiliates~~amounted to $1,545 million and ~~preferred stock issued by our affiliates.~~

~~Prior~~$20,500 million, including 0 and $19,239 million attributable to Baker Hughes Class A shareholders at December 31, 2019 and 2018, respectively. See Note 2 for further information related to the ~~fourth quarter of 2015, the preferred stock issued by GECC was classified as~~Baker Hughes transaction. Net earnings (loss) attributable to noncontrolling interests were $33 million, $203 million and $(47) million in 2019, 2018 and 2017, respectively. Dividends attributable to noncontrolling interests were $(331) million, $(362) million and $(222) million in 2019, 2018 and 2017, respectively.

GE2019 FORM 10-K 98



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Redeemable noncontrolling interests presented in All other liabilities in our consolidated Statement of Financial Position with dividends presented as noncontrolling interest in our consolidated Statement of Earnings. As discussed previously in this note, this preferred stock was converted to a corresponding series of preferred stock issued by GE and on January 20, 2016 a substantial majority of those shares were exchanged into GE Series D preferred stock. Effective with these changes, the preferred stock issued by GE is reflected in our shareowners' equity and dividends are presented as a reduction of net earnings attributable to GE in the statement of earnings (under the caption "Preferred stock dividends") for the year ended December 31, 2015 and subsequently.

~~GE 2016 FORM 10-K 179~~

CHANGES TO NONCONTROLLING INTERESTS

(In millions) 2016 2015 2014

Balance at January 1 $ 1,864 $ 8,674 $ 6,217
Net earnings (loss) (46) 377 183
GECC preferred stock(a) - (4,949) -
GECC preferred stock dividend - (311) (322)
Dividends (72) (43) (74)
Dispositions (232) 189 (81)
Synchrony Financial(b) - (2,840) 2,393
Other (including AOCI)(c)(d)(e)(f) 150 767 358
Balance at December 31 $ 1,663 $ 1,864 $ 8,674

~~(a)~~

Included $(4,949) million related to the issuance of GE preferred stock in exchange for existing GECC preferred stock in 2015. GE preferred stock is reflected in shareowners' equity in the consolidated Statement of Financial Position.

~~(b)~~

~~Related to the split-off of Synchrony Financial from GE in 2015, where GE shares were exchanged for shares of Synchrony Financial; related to the Synchrony Financial IPO in 2014.~~

~~(c)~~

~~Included $695 million related to the Alstom acquisition in 2015.~~

~~(d)~~

~~Included $155 million related to Arcam AB acquisition in our Aviation segment in 2016.~~

~~(e)~~

~~Included $(123) million for deconsolidation of investment funds managed by GE Asset Management (GEAM) upon the adoption of ASU 2015-2,~~ ~~Amendments to the Consolidation Analysis~~ ~~in 2016. See Note 1.~~

~~(f)~~

~~Includes research & development partner funding arrangements, acquisitions and eliminations.~~

~~REDEEMABLE NONCONTROLLING INTERESTS~~

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

~~As part~~interests and amounted to $439 million and $378 million as of December 31, 2019 and 2018, respectively. Net earnings (loss) attributable to redeemable noncontrolling interests was $33 million, $(291) million and $(320) million for the ~~Alstom acquisition,~~years ended December 31, 2019, 2018 and 2017, respectively. On October 2, 2018, we ~~formed three~~ settled the redeemable noncontrolling interest balance associated with3joint ventures ~~in which the noncontrolling interests hold certain redemption rights. These joint ventures and the associated redemption rights are discussed in Note 8. Our retained earnings will be adjusted~~with Alstom for ~~subsequent changes in the redemption value of the noncontrolling interest in these entities to the extent that the redemption value exceeds the carrying~~a payment amount of ~~the noncontrolling interest.~~

$3,105 million in accordance with contractual payment terms.

CHANGES TO REDEEMABLE NONCONTROLLING INTERESTS

(In millions) 2016 2015 2014

Balance at January 1 $ 2,972 $ 98 $ 178
Net (loss) (244) (46) (71)
Dividends (17) (11) (12)
Redemption value adjustment 266 25 2
Other(a)(b) 49 2,906 1
Balance at December 31 $ 3,025 $ 2,972 $ 98

~~(a)~~

~~Included $2,875 million related to joint ventures formed by GE and Alstom as part of the Alstom acquisition in 2015.~~

~~(b)~~

~~Included $204 million related to the Concept Laser GmbH acquisition in our Aviation segment in 2016.~~

~~OTHER~~

Common dividends from GE Capital to GE totaled ~~$20,118~~0, 0 and $4,105 million ~~$4,311 million and $3,000 million~~(including cash dividends of $4,016 million) for the years ended ~~2016, 2015~~December 31, 2019, 2018 and ~~2014,~~2017, respectively. Dividends on GE preferred stock totaled $656 million and $18 million, including cash dividends of $332 million and $8 million for the years ended 2016 and 2015, respectively. There were no dividends on GE preferred stock in 2014.

~~GE 2016 FORM 10-K 180~~

NOTE ~~16. OTHER STOCK-RELATED INFORMATION~~

17. SHARE-BASED COMPENSATION

We grant stock options, restricted stock units and performance share units to employees under the 2007 Long-Term Incentive Plan. Grants made under all plans must be approved by the Management Development and Compensation Committee of ~~GE's~~GE’s Board of Directors, which is composed entirely of independent directors. We record compensation expense for awards expected to vest over the vesting period. We estimate forfeitures based on experience and adjust expense to reflect actual forfeitures. When options are exercised and restricted stock units vest, we issue shares from treasury stock.

~~STOCK OPTIONS~~

~~Under our stock option program, an employee receives an award that provides~~Stock options provide employees the opportunity ~~in the future~~ to purchase GE shares in the future at the market price of our stock on the date the award is granted (the strike price). The options become exercisable ~~in equal amounts~~ over ~~a five-year~~the vesting period (typically three or five years) and expire 10 years from the grant date if ~~they are~~ not exercised. Stock options have no financial statement effect on the date they are granted but rather are reflected over time through recording compensation expense and increasing shareowners' equity. We record compensation expense based on the estimated fair value of the awards expected to vest, and that amount is amortized as compensation expense on a straight-line basis over the five-year vesting period. Accordingly, total expense related to the award is reduced by the fair value of options that are expected to be forfeited by employees that leave GE prior to vesting. We estimate forfeitures based on our experience and adjust the expense to reflect actual forfeitures over the vesting period. The offset to the expense we record is reflected as an increase in the "Other capital" component of shareowners' equity.

(In millions, after tax) 2016 2015 2014

Compensation expense $ 207 $ 234 $ 215

~~We estimate the fair value of each~~Restricted stock option award on the date of grant using a Black-Scholes option pricing model. The table below provides the weighted-average grant-date fair values, key assumptions and other inputs into the pricing model. With the exception of the dividend yield assumption, an increase in any individual assumption will increase the estimated fair value of the option, all other things being equal.

2016 2015 2014

Weighted-average grant-date fair value of stock options $ 3.61 $ 4.64 $ 5.26

Stock Option Valuation Assumptions:
   Risk-free interest rate 1.4 % 2.0 % 2.3 %
   Dividend yield 3.4 % 3.4 % 3.1 %
   Expected volatility 20.0 % 25.0 % 26.0 %
   Expected option life (in years) 6.5 6.8 7.3

Other pricing model inputs:
   Weighted-average grant-date market price of GE stock (strike price) $ 29.63 $ 25.79 $ 26.11

~~GE 2016 FORM 10-K 181~~

~~The table below shows the amount and weighted-average strike price of options granted during 2016, as well as those outstanding and exercisable at year-end 2016.~~

As of December 31, 2016 unless, otherwise stated (in thousands, except per-share data)

Stock options granted during 2016 30,948
Weighted-average strike price of awards granted in 2016 $ 29.63
Stock options outstanding 420,303
Weighted-average strike price of stock options outstanding $ 22.29
Stock options exercisable 301,952
Weighted-average strike price of stock options exercisable $ 20.73

~~When an employee exercises an option, we issue treasury shares to satisfy the requirements of the option.~~

2016 2015 2014

Stock options exercised (in thousands) 56,973 65,764 30,433
Cash received from stock options exercised (in millions) $ 1,037 $ 1,098 $ 439

Outstanding stock option awards may be dilutive to earnings per share when they are in the money (the market price of GE stock is greater than the strike price of the option). When an option is dilutive, it increases the number of shares used in the diluted earnings per share calculation, which will decrease earnings per share. However, the effect stock options have on the number of shares added to the diluted earnings per share calculation is not one-for-one. The average amount of unrecognized compensation expense (the portion of the fair value of these option awards not yet amortized) and the market price of GE stock during the reporting period affect how many of these potential shares are included in the calculation. The calculation assumes that the proceeds received from the exercise and the unrecognized compensation expense are used to buy back shares, which reduces the dilutive impact.

As of December 31, 2016, there was $427 million of unrecognized compensation expense related to unvested options, which will be amortized over the remaining vesting period (the weighted-average period is approximately 2 years). Of that total, approximately $118 million, after tax, is estimated to be recorded as compensation expense in 2017.

The dilutive effect of in-the-money options on our earnings per share from continuing operations has been $0.01 or less per share (1% or less) for the last three years. See Note 18 for additional information about earnings per share.

~~RESTRICTED STOCK~~

~~A restricted stock award provides~~units (RSU) provide an employee with the right to receive shares of GE stock when the restrictions lapse ~~which occurs in equal amounts~~ over the vesting period. Upon vesting, each ~~unit of restricted stock~~RSU is converted into GE common stock on a ~~one-for~~-~~one basis using treasury~~1-for-one basis. Performance share units (PSU) provide an employee with the right to receive shares of GE stock ~~shares. The expense to be recognized~~based upon achievement of certain performance or market metrics. Upon vesting (if applicable), each PSU is converted into GE common stock on a ~~restricted~~one-for-one basis. We value stock ~~unit is based upon the~~options using a Black-Scholes option pricing model, RSUs using market price on ~~the~~ grant date, ~~(which is its fair value) multiplied by~~and PSUs using both market price on grant date and a Monte Carlo simulation as needed based on performance metrics.



WEIGHTED AVERAGE GRANT DATE FAIR VALUE	2019		2018		2017

Stock Options	$	3.48	$	3.00	$	3.81
RSUs	10.12		13.96		24.89
PSUs	10.73		4.80		N/A

Key assumptions used in the ~~number~~Black Scholes valuation for stock options include: risk free rates of ~~units~~2.5%, 2.8%, and 2.3%, dividend yields of 0.4%, 2.3%, and 3.3%, expected ~~to vest. Accordingly, total expense related to the award is reduced by~~volatility of 33%, 32%, and 28%, expected lives of 6.0 years, 5.9 years, and 6.3 years, and strike prices of $10.00, $12.13, and $18.97 for 2019, 2018, and 2017, respectively.



STOCK-BASED COMPENSATION ACTIVITY	Stock Options							RSUs
STOCK-BASED COMPENSATION ACTIVITY	Shares (in millions)		Weighted average exercise price		Weighted average contractual term (in years)	Intrinsic value (in millions)		Shares (in millions)		Weighted average grant date fair value		Weighted average contractual term (in years)	Intrinsic value (in millions)

Outstanding at January 1, 2019	466		$	19.59				29		$	18.07
Spin-off adjustment (a)	17		N/A					1		N/A
Granted	34		10.00					16		10.12
Exercised	(7	)	9.36					(15	)	17.04
Forfeited	(11	)	13.66					(3	)	15.40
Expired	(41	)	17.24					N/A		N/A
Outstanding at December 31, 2019	458		$	18.66	4.6	$	185	28		$	13.29	1.4	$	315
Exercisable at December 31, 2019	335		$	21.03	3.1	$	—	N/A		N/A		N/A	N/A
Expected to vest	113		$	12.36	8.5	$	165	26		$	13.45	1.3	$	285


(a)	In connection with the spin-off of GE Transportation and pursuant to the anti-dilution provisions of the 2007 Long Term Incentive Plan, the Company made adjustments to exercise price and the number of shares to preserve the intrinsic value of the awards prior to the separation. The adjustments to the stock-based compensation awards did not result in additional compensation expense.

Total outstanding PSUs at December 31, 2019 were 12 million shares with a weighted average fair value of ~~restricted stock units that are expected to be forfeited by employees that leave GE prior to lapse~~$7.39. The intrinsic value and weighted average contractual term of ~~the restrictions. That amount is amortized as compensation expense on a straight-line basis over a five-year vesting period. We estimate forfeitures based on our experience~~PSUs outstanding were $128 million and ~~adjust the expense to reflect actual forfeitures over the vesting period. The offset to compensation expense is an increase in the "Other capital" component of shareowners' equity.~~2.3 years, respectively.

GE2019 FORM 10-K 99



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, after tax) 2016 2015 2014

Compensation expense(a) $ 90 $ 72 $ 56

~~(a)Included $11 million of compensation expense related to performance share units in 2016~~.

~~GE 2016 FORM 10-K 182~~



(In millions)	2019		2018		2017

Compensation expense (after-tax)(a)(b)	$	400	$	336	$	241
Cash received from stock options exercised	69		24		528
Intrinsic value of stock options exercised and RSUs vested	154		83		493

~~The fair value of a restricted stock unit at the grant date is equal to the market price of our stock on the grant date.~~

2016 2015 2014

Weighted-average grant-date fair value of restricted stock awards $ 30.20 $ 26.74 $ 26.08

As of December 31, 2016, unless otherwise stated (in thousands, except per-share data)

Restricted stock units granted during 2016 8,933
Non-vested restricted stock units outstanding 17,859
Weighted-average fair value at grant date of non-vested stock $ 27.72

~~The table below provides information about the units of restricted stock that vested for each of the years presented.~~

(In thousands) 2016 2015 2014

Restricted stock units vested during the year ended 4,427 3,899 3,305

As of December 31, 2016, there was $346 million of total unrecognized compensation expense related to unvested restricted stock units, which will be amortized over the remaining vesting period (the weighted-average period is approximately 2 years). Of that total, approximately $75 million, after tax, is estimated to be recorded as compensation expense in 2017.

~~OTHER INFORMATION~~

~~When options are exercised and restricted stock units vest, we issue shares from treasury stock~~, which increases shares outstanding. The "Other capital" component of shareowners' equity is adjusted for differences between the strike price of GE stock and the average cost of our treasury stock. We also record the difference between the tax benefits assumed (based on the fair value of the award on the grant date) and the actual tax benefit in our provision for income taxes. Any excess tax benefit is recorded as cash flows from operating activities in our Statement of Cash Flows. The table below provides information about tax benefits related to all share-based compensation arrangements.

(In millions) 2016 2015 2014

Income tax benefit recognized in earnings $ 274 $ 148 $ 147
Excess of actual tax deductions over amounts assumed recognized in equity(a) - 167 86

(a)

We adopted ASU 2016-09 in September 2016. The primary effects of adoption were the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital and the reclassification of cash flowsUnrecognized compensation cost related to ~~excess tax benefits from~~unvested equity awards as of December 31, 2019 was $515 million, which will be amortized over a ~~financing activity to an operating activity for the periods beginning January 1, 2016. See Note 1 for further information.~~weighted average period of 1.1 years.


(b)	Income tax benefit recognized in earnings was $20 million, $40 million and $138 million in 2019, 2018, and 2017, respectively.

Share-based compensation programs serve as a means to attract and retain talented employees and are an important element of their total compensation. The intrinsic value of a stock option award is the amount by which the award is in the money and represents the potential value to the employee upon exercise of the option. The intrinsic value of restricted stock units is the value of the shares awarded at the current market price. The table below provides information about the intrinsic value of option and restricted stock awards.

Aggregate
intrinsic
As of December 31, 2016, unless otherwise stated (in millions) value

Stock options outstanding $ 3,984
Stock options exercised in 2016 723
Non-vested restricted stock units outstanding 564
Restricted stock units vested in 2016 137

~~GE 2016 FORM 10-K 183~~

~~NOTE 17. OTHER INCOME~~

(In millions) 2016 2015 2014

GE
Purchases and sales of business interests(a) $ 3,701 $ 1,020 $ 188
Licensing and royalty income 175 168 288
Associated companies 76 45 176
Net interest and investment income(b) 167 65 (77)
Other items(c) (27) 868 132
4,092 2,165 707
Eliminations (87) 62 71
Total $ 4,005 $ 2,227 $ 778

~~(a)~~

Included a pre-tax gain of $3,136 million on the sale of our Appliances business and $398 million on the sale of GE Asset Management in 2016. Included a pre-tax gain of $623 million on the sale of our Signaling business in 2015. See Note 2.

~~(b)Included other-than-temporary impairments on investment securities of $(217) million in 2014.~~

~~(c)~~

In 2015, included a $450 million NBCU tax settlement and a $175 million break-up fee from Electrolux. Included net gains on asset sales of $101 million, $90 million and $127 million in 2016, 2015 and 2014, respectively.

NOTE 18. EARNINGS PER SHARE INFORMATION



	2019						2018						2017
(In millions; per-share amounts in dollars)	Diluted			Basic			Diluted			Basic			Diluted			Basic

Earnings (loss) from continuing operations for per-share calculation	$	416		$	416		$	(20,997	)	$	(20,997	)	$	(8,270	)	$	(8,270	)
Preferred stock dividends	(460		)	(460		)	(447		)	(447		)	(436		)	(436		)
Earnings (loss) from continuing operations attributable to common shareholders for per-share calculation	$	(45	)	$	(45	)	$	(21,445	)	$	(21,445	)	$	(8,706	)	$	(8,706	)
Earnings (loss) from discontinued operations for per-share calculation	(5,396		)	(5,396		)	(1,372		)	(1,372		)	(251		)	(251		)
Net earnings (loss) attributable to GE common shareholders for per-share calculation	(5,440		)	(5,440		)	(22,809		)	(22,809		)	(8,944		)	(8,944		)

Shares of GE common stock outstanding	8,724			8,724			8,691			8,691			8,687			8,687
Employee compensation-related shares (including stock options) and warrants(a)	—			—			—			—			—			—
Total average equivalent shares	8,724			8,724			8,691			8,691			8,687			8,687

Earnings (loss) from continuing operations	$	(0.01	)	$	(0.01	)	$	(2.47	)	$	(2.47	)	$	(1.00	)	$	(1.00	)
Earnings (loss) from discontinued operations	(0.62		)	(0.62		)	(0.16		)	(0.16		)	(0.03		)	(0.03		)
Net earnings (loss)	(0.62		)	(0.62		)	(2.62		)	(2.62		)	(1.03		)	(1.03		)

Potentially dilutive securities(a)				450						420						119

2016 2015 2014
(In millions; per-share amounts in dollars) Diluted Basic Diluted Basic Diluted Basic

Amounts attributable to the Company:
Consolidated
Earnings (loss) from continuing operations for
   per-share calculation(a)(b)
$ 9,764 $ 9,769 $ 1,680 $ 1,679 $ 9,523 $ 9,523
Preferred stock dividends declared (656) (656) (18) (18) - -
Earnings (loss) from continuing operations attributable to
   common shareowners for per-share calculation(a)(b) $ 9,108 $ 9,113 $ 1,662 $ 1,661 $ 9,523 $ 9,523
Earnings (loss) from discontinued operations
   for per-share calculation(a)(b)
(955) (950) (7,795) (7,795) 5,691 5,691
Net earnings (loss) attributable to GE common
   shareowners for per-share calculation(a)(b)
$ 8,157 $ 8,163 $ (6,135) $ (6,135) $ 15,213 $ 15,212

Average equivalent shares
Shares of GE common stock outstanding 9,025 9,025 9,944 9,944 10,045 10,045
Employee compensation-related shares (including
   stock options) and warrants
105 - 72 - 78 -
Total average equivalent shares 9,130 9,025 10,016 9,944 10,123 10,045

Per-share amounts
Earnings (loss) from continuing operations $ 1.00 $ 1.01 $ 0.17 $ 0.17 $ 0.94 $ 0.95
Earnings (loss) from discontinued operations (0.10) (0.11) (0.78) (0.78) 0.56 0.57
Net earnings (loss) 0.89 0.90 (0.61) (0.62) 1.50 1.51

(a) All outstanding stock awards are not included in the computation of diluted earnings per share because their effect was antidilutive due to the loss from continuing operations.

Our unvested restricted stock unit awards that contain non-forfeitable rights to dividends or dividend equivalents are considered participating securities and, therefore, are included in the computation of earnings per share pursuant to the two-class method. ~~Application of this treatment had an insignificant effect.~~

~~(a)~~

~~Included a dilutive adjustment of an insignificant amount of dividend equivalents in each of the three years presented.~~

~~(b)~~

~~Included in 2016 is a dilutive adjustment for the change in income for forward purchase contracts that may be settled in stock.~~

For the years ended December 31, ~~2016, 2015~~2019, 2018 and ~~2014, there were approximately 22 million, 97 million and 98 million, respectively,~~2017, as a result of ~~outstanding stock awards that~~excess dividends in respect to the current period earnings, losses were not ~~included in the computation of diluted earnings per share because their effect was antidilutive.~~

In December 2016, we entered into an ASR agreement to repurchase shares of GE common stock. See Note 15 for additional information. The initial delivery of 59,177,215 shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. GE has determined that the forward contract, indexed to its own common stock, met all the criteria for equity classification. There was no dilutive impact on earnings per share relatedallocated to the ~~forward contract.~~participating securities.

~~GE 2016 FORM 10-K 184~~

Earnings-per-share amounts are computed independently for earnings (loss) from continuing operations, earnings (loss) from discontinued operations and net earnings (loss). As a result, the sum of per-share amounts from continuing operations and discontinued operations may not equal the total per-share amounts for net earnings.

NOTE 19. OTHER INCOME



(In millions)	2019		2018		2017

Purchases and sales of business interests(a)	$	3	$	1,234	$	1,024
Licensing and royalty income	256		218		188
Associated companies	206		21		208
Net interest and investment income(b)	1,220		562		358
Other items	515		282		115
GE	2,200		2,317		1,893
Eliminations	22		4		189
Total	$	2,222	$	2,321	$	2,083

(a)

Included a pre-tax gain of $224 million on the sale of ServiceMax partially offset by charges to the valuation allowance on businesses classified as held for sale of $245 million in 2019. Included pre-tax gains of $737 million on the sale of Distributed Power, $681 million on the sale of Value-Based Care and $267 million on the sale of Industrial Solutions, partially offset by charges to the valuation allowance on businesses classified as held for sale of $554 million in 2018. Included a pre-tax gain of $1,931 million on the sale of our Water business, partially offset by charges to the valuation allowance on businesses classified as held for sale of $1,000 million in 2017. See Note 2 for further information.


(b)	Included unrealized gain of $793 million related to our interest in Baker Hughes in 2019. Included interest income associated with customer advances of $143 million, $136 million and $105 million in 2019, 2018 and 2017, respectively. See Notes 1, 3 and 9.

GE2019 FORM 10-K 100



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20. FAIR VALUE MEASUREMENTS

RECURRING FAIR VALUE ~~MEASUREMENTS~~

MEASUREMENTS.Our assets and liabilities measured at fair value on a recurring basis include investment securities mainly supporting obligations to annuitants and policyholders in our run-off insurance operations, derivatives, and ~~derivatives.~~our remaining equity interest in Baker Hughes.

ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

Netting
(In millions) Level 1 (a) Level 2 (a) Level 3 adjustment (b) Net balance
December 31, 2016
Assets
Investment securities
   Debt

      U.S. corporate
$ - $ 19,647 $ 3,399 $ - $ 23,046
      State and municipal
- 4,163 73 - 4,236
      Mortgage and asset-backed
- 2,852 9 - 2,861
      Corporate – non-U.S.
- 11,299 688 - 11,987
      Government – non-U.S.
- 1,262 - - 1,262
      U.S. government and federal agency
- 482 232 - 714
   Equity
188 14 6 - 208
Derivatives(c) - 5,444 23 (5,121) 345
Total $ 188 $ 45,163 $ 4,429 $ (5,121) $ 44,658

Liabilities
Derivatives $ - $ 4,880 $ 2 $ (4,449) $ 434
Other(e) - 1,143 - - 1,143
Total $ - $ 6,024 $ 2 $ (4,449) $ 1,577

December 31, 2015
Assets
Investment securities
   Debt

      U.S. corporate
$ - $ 19,351 $ 3,006 $ - $ 22,358
      State and municipal
- 4,215 30 - 4,245
      Mortgage and asset-backed
- 3,084 32 - 3,116
      Corporate – non-U.S.
12 544 290 - 847
      Government – non-U.S.
5 410 - - 415
      U.S. government and federal agency
49 404 323 - 776
   Equity
194 9 13 - 216
Derivatives(c) - 7,312 79 (6,110) 1,281
Other(d) - - 259 - 259
Total $ 260 $ 35,331 $ 4,033 $ (6,110) $ 33,512
Liabilities
Derivatives $ - $ 5,677 $ 4 $ (4,968) $ 713
Other(e) - 1,182 - - 1,182
Total $ - $ 6,860 $ 4 $ (4,968) $ 1,895



ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS December 31 (In millions)
	Level 1				Level 2				Level 3(a)				Netting adjustment(d)						Net balance(b)
	2019		2018		2019		2018		2019		2018		2019			2018			2019		2018

Investment securities	$	9,704	$	88	$	33,606	$	29,408	$	5,210	$	4,013	$	—		$	—		$	48,521	$	33,508
Derivatives	—		—		2,561		2,197		11		8		(1,832		)	(2,001		)	740		205
Total assets	$	9,704	$	88	$	36,167	$	31,605	$	5,221	$	4,021	$	(1,832	)	$	(2,001	)	$	49,261	$	33,713

Derivatives	$	—	$	—	$	834	$	1,814	$	19	$	6	$	(651	)	$	(1,234	)	$	202	$	586
Other(c)	—		—		807		722		—		—		—			—			807		722
Total liabilities	$	—	$	—	$	1,641	$	2,535	$	19	$	6	$	(651	)	$	(1,234	)	$	1,009	$	1,308

~~(a)~~

~~There were $12 million~~

(a)

Included debt securities classified within Level 3 of ~~Corporate – non-U.S. securities and $50~~$3,977 million of U.S. ~~government~~corporate and ~~federal agency~~$330 million of Government and agencies securities ~~transferred from Level 1 to Level 2 in the twelve months ended~~at December 31, ~~2016 primarily attributable to changes in valuation approach. There were no~~2019, and $3,498 million of U.S. corporate and $292 million of Government and agencies securities ~~transferred between Level 1 and Level 2 in the year ended~~at December 31, ~~2015.~~2018.


(b)	~~The netting of derivative receivables and payables (including the effects of any collateral posted or received) is permitted when a legally enforceable master netting agreement exists.~~

~~(c)~~

The fair value of derivatives includes an adjustment for non-performance risk. At December 31, 2016 and December 31, 2015, the cumulative adjustment for non-performance risk was $(3) million and insignificant, respectively. See Notes 203 and 2921 for ~~additional~~further information on the composition of our investment securities and derivative ~~portfolio.~~portfolios.

~~(d)~~

~~Includes private equity investments.~~

~~(e)~~(c)

Primarily represents the liabilities associated with certain of our deferred incentive compensation plans.


(d)	The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts include fair value adjustments related to our own and counterparty non-performance risk.

~~GE 2016 FORM 10-K 185~~

LEVEL 3 ~~INSTRUMENTS~~

INSTRUMENTS.The majority of our Level 3 balances ~~consist of investment~~comprised debt securities classified as available-for-sale with changes in fair value recorded in ~~shareowners' equity.~~

CHANGES IN LEVEL 3 INSTRUMENTS FOR THE YEARS ENDED DECEMBER 31
Net
change in
Net Net unrealized
realized/ realized/ gains
unrealized unrealized (losses)
gains gains relating to
(losses) (losses) Transfers Transfers instruments
Balance at included in included into out of Balance at still held at
(In millions) January 1 earnings(a) in AOCI Purchases Sales Settlements Level 3(b) Level 3(b) December 31 December 31(c)
2016
Investment securities
  Debt

    U.S. corporate
$ 3,006 $ 9 $ 137 $ 468 $ (70) $ (155) $ 32 $ (29) $ 3,399 $ -
    State and municipal
30 - 1 43 - (1) - - 73 -
    Mortgage and

       asset-backed
32 (19) 1 - - (6) - - 9 -
    Corporate – non-U.S.
290 28 - 461 (82) (1) 2 (10) 688 -
    U.S. government and

       federal agency
323 - (90) - - (1) - - 232 -
  Equity
13 (7) 2 - (1) (2) - - 6 -
Derivatives(d)(e) 88 (18) - 1 - (59) - 8 21 (21)
Other 259 - - - - - - (259) - -
Total $ 4,042 $ (7) $ 51 $ 974 $ (152) $ (226) $ 35 $ (290) $ 4,427 $ (21)
2015
Investment securities
  Debt

    U.S. corporate
$ 3,053 $ 3 $ (165) $ 362 $ (80) $ (137) $ - $ (30) $ 3,006 $ -
    State and municipal
58 - (2) - - (9) - (17) 30 -
    Mortgage and

       asset-backed
146 (19) (9) - (32) (4) - (49) 32 -
    Corporate – non-U.S. 337 - (6) 9 (49) (1) - - 290 -
    Government – non-U.S. 2 - - - - - - (2) - -
    U.S. government and

       federal agency
266 - 58 - - (1) - - 323 -
  Equity
9 2 (5) - - (4) 10 - 13 -
Derivatives(d)(e) 29 25 - - - (6) 40 - 88 22
Other 277 8 - - (26) - - - 259 5
Total $ 4,175 $ 19 $ (128) $ 370 $ (187) $ (161) $ 51 $ (98) $ 4,042 $ 27

~~(a)~~

~~Earnings effects are primarily included in the "GE Capital revenues from services" and "Interest and other financial charges" captions in the Statement of Earnings.~~

~~(b)~~

Transfers in and out of Level 3 are considered to occur at the beginning of the period. Transfers out of Level 3 for the twelve months ended December 31, 2016 were primarily a result of the adoption of ASU 2015-02, ~~Amendments to the Consolidation Analysis. See Note 1.~~

~~(c)~~

~~Represents the amount of unrealized gains or losses for the period included in earnings.~~

~~(d)~~

Represents derivative assets net of derivative liabilities and includes cash accruals of none and $13 million not reflected in the fair value hierarchy table for the twelve months ended December 31, 2016 and 2015, respectively.

~~(e)~~

~~Gains (losses) included in net realized/unrealized gains (losses) included in earnings were offset by the earnings effects from the underlying items that were economically hedged. See Notes 20 and 29~~.

other comprehensive income.

~~GE 2016 FORM 10-K 186~~



(In millions)	Balance at January 1		Net realized/unrealized gains(losses)(a)			Purchases(b)		Sales & Settlements			Transfers into Level 3		Transfers out of Level 3			Balance at December 31

2019
Investment securities	$	4,013	$	399		$	2,159	$	(1,308	)	$	—	$	(53	)	$	5,210
2018
Investment securities	$	4,109	$	(231	)	$	729	$	(333	)	$	2	$	(262	)	$	4,013


(a)	Primarily included net unrealized gains (losses) of $404 million and $(231) million in other comprehensive income for the years ended December 31, 2019 and December 31, 2018, respectively.


(b)	Included $975 million and $615 million of U.S. corporate debt securities for the years ended December 31, 2019 and 2018, respectively.

NONRECURRING FAIR VALUE MEASUREMENTS. The following table represents ~~non-recurring~~ fair ~~value amounts~~values (as measured at the time of the adjustment) for those assets remeasured to fair value on a ~~non-recurring~~nonrecurring basis during the fiscal year and were still held at December 31, ~~2016~~2019 and ~~December 31, 2015.~~

Remeasured during the years ended December 31
2016 2015
(In millions) Level 2 Level 3 Level 2 Level 3

Financing receivables and financing receivables held for sale $ - $ 30 $ - $ 154
Cost and equity method investments - 103 1 436
Long-lived assets 17 1,055 2 882
Total $ 17 $ 1,189 $ 3 $ 1,471

~~The following table represents the fair value adjustments to assets measured at fair value on a non-recurring basis and still held at December 31, 2016 and 2015~~.

December 31 (In millions) 2016 2015

Financing receivables and financing receivables held for sale $ (14) $ (69)
Cost and equity method investments (44) (506)
Long-lived assets (196) (1,603)
Total $ (254) $ (2,177)

2018.



	Remeasured during the years ended December 31
	2019				2018
(In millions)	Level 2		Level 3		Level 2		Level 3

Financing receivables and financing receivables held for sale	$	—	$	21	$	—	$	47
Equity securities without readily determinable fair value and equity method investments	—		306		479		874
Long-lived assets	12		412		152		422
Goodwill	—		—		—		2,440
Total	$	12	$	739	$	631	$	3,783

GE ~~2016~~2019 FORM 10-K ~~187~~

101

LEVEL 3 MEASUREMENTS - SIGNIFICANT UNOBSERVABLE INPUTS

Range
(Dollars in millions) Fair value Valuation technique Unobservable inputs (weighted-average)

December 31, 2016
Recurring fair value measurements
Investment securities – Debt
      U.S. corporate $ 809 Income approach Discount rate(a) 1.4%-17.4% (8.1%)
      State and municipal 20 Income approach Discount rate(a) 3.7%-3.7% (3.7%)
      Mortgage and asset-backed 1 Income approach Discount rate(a) 2.7%-6.9% (4.3%)

Non-recurring fair value measurements
Financing receivables and
   financing receivables held for sale $ 30 Income approach Discount rate(a) 2.5%-30.0% (20.3%)

Cost and equity method investments 94 Income approach Discount rate(a) 9.0%-30.0% (11.8%)

Long-lived assets 683 Income approach Discount rate(a) 2.5%-20.0% (10.4%)

December 31, 2015
Recurring fair value measurements
Investment securities – Debt
      U.S. corporate $ 834 Income approach Discount rate(a) 1.7%-14.1% (8.6%)
      Mortgage and asset-backed 31 Income approach Discount rate(a) 5.0%-12.0% (10.5%)
      Corporate – non-U.S. 236 Income approach Discount rate(a) 6.5%-14.0% (7.5%)
Other financial assets 259 Income approach, EBITDA multiple 6.1X-15.0X (9.9X)
   Market comparables Capitalization rate 7.8%-7.8% (7.8%)

Non-recurring fair value measurements
Financing receivables and
   financing receivables held for sale $ 146 Income approach Discount rate(a) 6.5%-30.0% (10.7%)

Cost and equity method investments 293 Income approach Discount rate(a) 9.5%-35.0% (14.4%)

Long-lived assets 830 Income approach Discount rate(a) 1.8%-11.7% (10.5%)

~~(a)~~
	Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value.
FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At December 31, ~~2016~~2019 and ~~December 31, 2015, other~~2018, certain Level 3 assets with recurring fair value measurements of ~~$3,598~~$4,933 million and ~~$2,637~~$3,893 million, respectively, and ~~non-recurring~~nonrecurring measurements of ~~$379~~$377 million and ~~$122~~$483 million, respectively, ~~are~~were valued using non-binding broker quotes or other third-party sources. ~~At December 31, 2016 and December 31, 2015, other recurring~~These fair value measurements ~~of an insignificant amount and $32 million, respectively, and non-recurring fair value measurements of $2 million and $80 million, respectively, were individually insignificant and~~ utilize a number of different unobservable inputs not subject to meaningful aggregation. In addition, certain equity securities without readily determinable fair value and equity method investments with a fair value totaling $36 million and $572 million at December 31, 2019 and 2018, respectively, were valued using the income approach, for which discount rates were determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rates would result in a decrease in the fair values. The range of discount rates used to price these investments was 12%-16%, with a weighted average of 15% and 6.5%-35%, with a weighted average of 8.9% at December 31, 2019 and 2018, respectively. Other Level 3 assets with recurring and nonrecurring fair value measurements are not material individually or in the aggregate.

~~GE 2016 FORM 10-K 188~~

NOTE ~~20.~~21. FINANCIAL INSTRUMENTS

The following table provides information about assets and liabilities not carried at fair ~~value. The table~~value and excludes finance leases, equity securities without readily determinable fair value and non-financial assets and liabilities. Substantially all of ~~the~~these assets ~~discussed below~~ are considered to be Level ~~3. The~~3 and the vast majority of our ~~liabilities'~~liabilities’ fair ~~values can be determined based on significant observable inputs and thus~~value are considered Level 2. ~~Few of~~



	December 31, 2019				December 31, 2018
(In millions)	Carrying amount (net)		Estimated fair value		Carrying amount (net)		Estimated fair value

Assets
Loans and other receivables	$	4,113	$	4,208	$	8,811	$	8,829
Liabilities
Borrowings (Note 11)	$	90,882	$	97,754	$	103,599	$	100,492
Investment contracts (Note 12)	2,191		2,588		2,388		2,630

Unlike the ~~instruments are actively traded and their fair values must often be determined using financial models. Realization of the~~carrying amount, estimated fair value of ~~these instruments depends upon market forces beyond our control, including marketplace liquidity.~~

2016 2015
Carrying Carrying
amount Estimated amount Estimated
December 31 (In millions) (net) fair value (net) fair value

GE
Assets
   Investments and notes receivable
$ 1,526 $ 1,595 $ 1,104 $ 1,174
Liabilities
   Borrowings(a)(b)
19,184 19,923 18,397 18,954
   Borrowings (debt assumed)(a)(c) 60,109 66,998 84,704 92,231

GE Capital
Assets
   Loans
21,060 20,830 20,061 19,774
   Time deposits(d) - - 10,386 10,386
   Other commercial mortgages
1,410 1,472 1,381 1,447
   Loans held for sale
473 473 342 342
   Other financial instruments(e)
121 150 94 110
Liabilities
   Borrowings(a)(f)(g)(h)
58,523 62,024 95,474 99,396
   Investment contracts
2,813 3,277 2,955 3,441

~~(a)~~ ~~See Note 10.~~

~~(b) Included $115~~borrowings included $1,106 million and ~~$116~~$1,324 million of accrued interest ~~in estimated fair value~~ at

December 31, ~~2016~~2019 and ~~December 31, 2015,~~2018, respectively.

~~(c)~~

~~Included $803 million and $1,006 million of accrued interest in estimated fair value at December 31, 2016 and December 31, 2015, respectively.~~

~~(d)~~

~~Balances at December 31, 2015 comprised high quality interest bearing deposits with European branches of global banks, predominantly in the U.K., that matured in April 2016.~~

~~(e)~~

~~Principally comprises cost method investments.~~

~~(f)~~

Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of borrowings at December 31, 2016 and December 31, 2015 would have been reduced by $2,397 million and $3,001 million, respectively.

~~(g)~~

~~Included $775 million and $1,103 million of accrued interest in estimated fair value at December 31, 2016 and December 31, 2015, respectively.~~

~~(h)~~

Excluded $58,780 million and $84,704 million of intercompany payable to GE at December 31, 2016 and December 31, 2015 respectively, which includes a reduction in the short-term intercompany payable to GE for a $(1,329) million loan to GE, which bears the right of offset against amounts owed under the assumed debt agreement. The remaining short-term loan balance was paid in January 2017.

~~A description of how we estimate fair values follows:~~

~~Loans.~~ ~~Based on a discounted future cash flows methodology, using current market interest rate data adjusted for inherent credit risk or quoted market prices and recent transactions, if available.~~

~~Borrowings.~~ ~~Based on valuation methodologies using current market interest rate data that are comparable to market quotes adjusted for our non-performance risk.~~

~~Investment contracts.~~ ~~Based on expected future cash flows, discounted at currently offered rates for immediate annuity contracts or the income approach for single premium deferred annuities.~~

~~Time deposits.~~ ~~Carrying value approximates fair value as these financial instruments have limited credit risk, short-term maturities and interest rates that approximate market.~~

~~GE 2016 FORM 10-K 189~~

~~All other instruments.~~ ~~Based on observable market transactions and/or valuation methodologies using current market interest rate data adjusted for inherent credit risk.~~

Assets and liabilities that are reflected in the accompanying financial statements at fair value are not included in the above disclosures; such items include cash and equivalents, investment securities and derivative financial instruments.

~~Additional information about~~DERIVATIVES AND HEDGING. Our policy requires that derivatives are used solely for managing risks and not for speculative purposes. Total gross notional ~~amounts~~was $98,018 million ($55,704 million in GE Capital and $42,314 million in GE) and $117,104 million ($79,082 million in GE Capital and $38,022 million in GE) at December 31, 2019 and 2018, respectively. GE Capital notional relates primarily to managing interest rate and currency risk between financial assets and liabilities, and GE notional relates primarily to managing currency risk.

GE and GE Capital use cash flow hedges primarily to reduce or eliminate the effects of ~~loan commitments follows.~~

NOTIONAL AMOUNTS OF LOAN COMMITMENTS

December 31 (In millions) 2016 2015

Ordinary course of business lending commitments(a) $ 687 $ 531
Unused revolving credit lines 238 279

~~(a)~~

~~Excluded investment commitments of $522 million and $782 million at December 31, 2016 and December 31, 2015, respectively.~~

~~SECURITIES REPURCHASE AND REVERSE REPURCHASE ARRANGEMENTS~~

~~Our issuances~~foreign exchange rate changes. In addition, GE Capital uses fair value hedges to hedge the effects of ~~securities repurchase agreements are insignificant. No repurchase agreements were accounted for~~interest rate and currency changes on debt it has issued as ~~off-book financing~~well as net investment hedges to hedge investments in foreign operations. Both GE and GE Capital also use derivatives not designated as hedges from an accounting standpoint (and therefore we do not ~~engage~~apply hedge accounting to the relationship) but otherwise serve the same economic purpose as other hedging arrangements. We use economic hedges when we have exposures to currency exchange risk for which we are unable to meet the requirements for hedge accounting or when changes in ~~securities lending transactions. At December 31, 2016, we were party to no repurchase agreements.~~

We also enter into reverse securities repurchase agreements, primarily for short-term investment with maturities of 90 days or less. At December 31, 2016, we were party to reverse repurchase agreements totaling $6.9 billion, which were reported in cash and equivalents on the financial statements. Under these reverse securities repurchase agreements, we typically lend available cash at a specified rate of interest and hold U.S. or highly-rated European government securities as collateral during the termcarrying amount of the ~~agreement. Collateral value~~hedged item are already recorded in earnings in the same period as the derivative making hedge accounting unnecessary. Even though the derivative is an effective economic hedge, there may be a net effect on earnings in ~~excess~~each period due to differences in the timing of ~~amounts loaned under~~earnings recognition between the ~~agreements.~~derivative and the hedged item.

GE2019 FORM 10-K 102



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~DERIVATIVES AND HEDGING~~

~~In this section, we explain~~The table below provides additional information about how ~~we use~~ derivatives ~~to manage our risks and how these financial instruments~~ are reflected in our financial statements. ~~Our use~~Derivative assets and liabilities are recorded at fair value exclusive of interest earned or owed on interest rate derivatives, which is presented separately in our consolidated Statement of Financial Position. Cash collateral and securities held as collateral represent assets that have been provided by our derivative counterparties as security for amounts they owe us (derivatives that are in an asset position).



	December 31, 2019								December 31, 2018
(In millions)	Gross Notional		All other assets			All other liabilities			Gross Notional		All other assets			All other liabilities

Interest rate contracts	$	23,918	$	1,636		$	11		$	22,904	$	1,335		$	23
Currency exchange contracts	7,044		99			46			7,854		175			114
Derivatives accounted for as hedges	$	30,961	$	1,734		$	57		$	30,758	$	1,511		$	138

Interest rate contracts	$	3,185	$	18		$	12		$	6,198	$	28		$	2
Currency exchange contracts	62,165		697			744			77,544		653			1,472
Other contracts	1,706		123			40			2,604		13			209
Derivatives not accounted for as hedges	$	67,056	$	838		$	796		$	86,346	$	695		$	1,682

Gross derivatives	$	98,018	$	2,572		$	853		$	117,104	$	2,205		$	1,820

Netting and credit adjustments			$	(546	)	$	(546	)			$	(959	)	$	(967	)
Cash collateral adjustments			(1,286		)	(105		)			(1,042		)	(267		)
Net derivatives recognized in Statement of Financial Position			$	740		$	202				$	205		$	586

Net accrued interest			$	182		$	1				$	205		$	1
Securities held as collateral			(469		)	—					(235		)	—
Net amount			$	452		$	203				$	174		$	587

Fair value of derivatives relates solely to risk management; we do not use derivatives for speculation. As discussed elsewhere in this report, we are executing a plan to reduce the size and scope of our financial services business, with the intention of principally retaining those activities that support our industrial businesses. The affected businesses have either been sold or are held for sale and are presented as discontinued operations in our ~~financial statements as~~consolidated Statement of Financial Position excluded accrued interest. Cash collateral adjustments excluded excess collateral received and posted of $104 million and $603 million at December 31, ~~2016. As~~2019, respectively, and $3 million and $439 million at December 31, 2018, respectively. Securities held as collateral excluded excess collateral received with a ~~result~~fair value of ~~these actions, the significance of financial services hedging activity will diminish significantly in the future.~~$27 million and 0 at December 31, 2019 and 2018, respectively.

~~RISK MANAGEMENT STRATEGY~~

In our industrial businesses, we buy, manufacture and sell components and products across global markets. These activities expose us to changes in foreign currency exchange rates and commodity prices, which can adversely affect revenues earned and costs of operating our industrial businesses. When the currency in which we sell equipment differs from the primary currency of one of our industrial businesses (known as its functional currency) and the exchange rate fluctuates, it will affect the revenue we earn on the sale. These sales and purchase transactions also create receivables and payables denominated in foreign currencies, which expose us to foreign currency gains and losses based on changes in exchange rates. Changes in the price of a raw material that we use in manufacturing can affect the cost of manufacturing. FAIR VALUE HEDGES. We use derivatives to ~~mitigate or eliminate these exposures.~~

~~With respect to our ongoing financial services activities, our key exposures relate to~~hedge the effects of interest rate and currency ~~risk. To~~exchange rate changes on our borrowings. At December 31, 2019, the ~~extent feasible, we seek to ensure that~~cumulative amount of hedging adjustments of $4,234 million (including $2,458 million on discontinued hedging relationships) was included in the ~~characteristics~~carrying amount of the ~~debt we have issued align with~~hedged liability of $54,723 million. At December 31, 2018, the ~~assets being funded. The form (fixed rate or floating rate) and currency denomination~~cumulative amount of hedging adjustments of $3,255 million (including $2,731 million on discontinued hedging relationships) was included in the carrying amount of the ~~debt we issue depends on a number~~hedged liability of ~~considerations, the most important~~$59,651 million. The cumulative amount of which are market factors (demand, pricing, etc.) that affect the economics of the issuance. If the form and currency denomination of the debt does not match the assets being funded, we typically execute derivatives to meet this objective within defined limits.hedging adjustments was primarily recorded in long-term borrowings.

~~GE 2016 FORM 10-K 190~~

~~FORMS OF HEDGING~~

~~In this section we explain the hedging methods we use and their effects on our financial statements.~~

~~Cash flow hedges~~ – CASH FLOW HEDGES. We use cash flow hedging primarily to reduce or eliminate the effects of foreign exchange rate changes on purchase and sale contracts in our industrial businesses and to convert foreign currency debt that we have issued in our financial services business back to our functional currency. ~~Accordingly,~~Changes in the ~~vast majority~~fair value of ~~our derivative activity~~cash flow hedges are recorded in ~~this category consists of currency exchange contracts. As a result of acquisitions~~Accumulated other comprehensive income (AOCI) in our industrial businesses, we expect to significantly expand our foreign currency hedging activity related to long-term contracts. We also use commodity derivatives to reduce or eliminate price risk on raw materials purchased for use in manufacturing.

~~Under hedge accounting, the derivative carrying amount is measured at fair value each period~~consolidated Statement of Financial Position and ~~any resulting gain or loss is~~ recorded in ~~a separate component of shareowners' equity. Differences between~~earnings in the ~~derivative and the hedged item may cause changes~~period in ~~their fair values to not offset completely,~~ which ~~is referred to as ineffectiveness. When~~ the hedged transaction ~~occurs, these~~occurs. The gain (loss) recognized in AOCI was $25 million, $(154) million and $199 million for the years ended December 31, 2019, 2018 and 2017, respectively. The gain (loss) reclassified from AOCI to earnings was $(60) million, $(102) million and $149 million for the years ended December 31, 2019, 2018 and 2017, respectively. These amounts ~~are released from shareowners' equity,~~were primarily related to currency exchange and interest rate contracts.

The total amount in ~~order that the transaction will be reflected in~~AOCI related to cash flow hedges of forecasted transactions was a $110 million gain at December 31, 2019. We expect to reclassify $16 million of gain to earnings ~~at the rate locked in by the derivative. The effect of the hedge is reported~~ in the ~~same financial statement line item as~~next 12 months contemporaneously with the earnings effects of the related forecasted transactions. For the years ended December 31, 2019, 2018 and 2017, we recognized insignificant gains and losses related to hedged ~~transaction. The table below summarizes how~~forecasted transactions and firm commitments that did not occur by the ~~derivative is reflected in the balance sheet and in earnings under hedge accounting. The effect~~end of the ~~hedged~~originally specified period. At December 31, 2019, 2018 and 2017, the maximum term of derivative instruments that hedge forecasted ~~transaction is not presented in this table but offsets the earnings effect of the derivative.~~transactions was 13 years, 14 years and 15 years, respectively.

As part of our ongoing effort to reduce borrowings, we may repurchase debt that was in a cash flow hedge accounting relationship. At the time of determining that the debt cash flows are probable of not occurring, any related OCI will be released to earnings.

FINANCIAL STATEMENT EFFECTS - CASH FLOW HEDGES

(In millions) 2016 2015

Balance sheet changes
Fair value of derivatives increase (decrease) $ (274) $ (911)
Shareowners' equity (increase) decrease 274 913

Earnings (loss) related to ineffectiveness 1 2
Earnings (loss) effect of derivatives(a) (364) (918)

(a) Offsets earnings effect of the hedged forecasted transaction

~~The following table explains the effect of changes in market rates on the fair value of derivatives we use most commonly in cash flow hedging arrangements.~~

~~Interest rate forwards/swaps~~	~~Interest rate increases~~	~~Interest rate decreases~~
~~Pay fixed rate/receive floating rate~~	~~Fair value increases~~	~~Fair value decreases~~

~~Currency forwards/swaps~~	~~U.S. dollar strengthens~~	~~U.S. dollar weakens~~
~~Pay U.S. dollars/receive foreign currency~~	~~Fair value decreases~~	~~Fair value increases~~

~~Commodity derivatives~~	~~Price increases~~	~~Price decreases~~
~~Receive commodity/ pay fixed price~~	~~Fair value increases~~	~~Fair value decreases~~

~~Fair value hedges~~ – These derivatives are used to hedge the effects of interest rate and currency exchange rate changes on debt that we have issued. We have issued mostly fixed rate debt that is used to fund both fixed and floating rate assets. In instances where fixed rate debt is funding floating rate assets, we have an exposure to changes in interest rates. We enter into interest rate swaps that receive a fixed rate and pay a floating rate of interest to align with that portion of our debt which funds floating rate assets. These swaps typically match the maturity of the associated debt being hedged.

~~GE 2016 FORM 10-K 191~~

Under hedge accounting, the derivative is measured at fair value and the carrying amount of the hedged debt is adjusted for the change in value related to the exposure being hedged, with both adjustments offset to earnings as interest expense. For example, the earnings effect of an increase in the fair value of the derivative will be largely offset by the earnings effect of an increase in the carrying amount of the hedged debt. Differences between the terms of the derivative and the hedged debt may cause changes in their fair values to not offset completely, which is referred to as ineffectiveness. The table below summarizes how the derivative and the hedged debt are reflected in the balance sheet and in earnings under hedge accounting. The effect on interest expense of changing from the fixed rate on the debt to the floating rate on the swap is not shown in this table.

FINANCIAL STATEMENT EFFECTS - FAIR VALUE HEDGES

(In millions) 2016 2015

Balance sheet changes
Fair value of derivative increase (decrease) $ 170 $ (151)
Adjustment to carrying amount of hedged debt (increase) decrease (433) 75

Earnings (loss) related to hedge ineffectiveness (263) (75)

~~The effect of changes in market interest rates on the fair value of derivatives we use most commonly in fair value hedging arrangements is presented below.~~

~~Interest rate forwards/swaps~~	~~Interest rate increases~~	~~Interest rate decreases~~
~~Pay floating rate/receive fixed rate~~	~~Fair value decreases~~	~~Fair value increases~~

~~Net investment hedges~~ – NET INVESTMENT HEDGES. We invest in foreign operations that conduct their financial services activities in currencies other than the U.S. dollar. We hedge the currency risk associated with those investments primarily using non-derivative instruments such as debt denominated in a foreign currency and short-term currency exchange contracts under which we receive U.S. dollars and pay foreign ~~currency and non-derivatives instruments such as debt denominated in a foreign~~ currency.

~~Under hedge accounting,~~For these hedges, the portion of the fair value ~~change~~changes of the ~~derivative~~derivatives or debt ~~instrument~~instruments that relates to changes in spot currency exchange rates is ~~offset~~recorded in a separate component of shareowners' equity. For example, an increase in the fair value of the derivative related to changes in spot exchange rates will be offset by a corresponding increase in the currency translation component of shareowners' equity.AOCI. The portion of the fair value ~~change~~changes of the ~~derivative~~derivatives related to differences between spot and forward rates ~~which primarily relates to the interest component,~~ is recorded in earnings each ~~period as interest expense. As a result of this hedging strategy, the investments in foreign operations of our financial services business are largely unaffected by changes in currency exchange rates.~~period. The amounts recorded in ~~shareowners' equity only~~AOCI affect earnings if the hedged investment is sold, substantially liquidated, or control is lost.

FINANCIAL STATEMENT EFFECTS - NET INVESTMENT HEDGES

(In millions) 2016 2015

Balance sheet changes
   Fair value of derivatives increase (decrease) $ 639 $ 4,871
   Fair value of non-derivatives (increase) decrease 1,819 (849)
   Shareowners' equity (increase) decrease (2,376) (4,131)

Earnings (loss) related to spot-forward differences 82 (109)
Earnings (loss) related to reclassification upon sale or liquidation(a) (528) 4,547

GE2019 FORM 10-K 103

~~(a)~~
	~~Included $(529) million and $4,549 million recorded in discontinued operations in the twelve months ended December 31, 2016 and 2015, respectively.~~
FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The ~~effect of changes~~total gain (loss) recognized in AOCI on hedging instruments for the years ended December 31, 2019, 2018 and 2017 was $120 million, $646 million and $(1,852) million, respectively, comprising $(36) million, $162 million and $(277) million on currency exchange ~~rates~~contracts and $156 million, $484 million and $(1,575) million on ~~the fair value of derivatives we use in net investment hedging arrangements is presented below~~.

~~Currency forwards/swaps~~		~~U.S. dollar strengthens~~		~~U.S. dollar weakens~~
~~Receive U.S. dollars/pay foreign currency~~		~~Fair value increases~~		~~Fair value decreases~~

~~GE 2016 FORM 10-K 192~~

~~Economic Hedges~~ - These derivatives are not designated as hedges from an accounting standpoint (and therefore we do not apply hedge accounting to the relationship) but otherwise serve the same economic purpose as other hedging arrangements. Economic hedges are used when changes in the carrying amount of the hedged item are already recorded in earnings in the same period as the derivative, making hedge accounting unnecessary. For example, in our industrial businesses we record the effects of spot exchange rate changes on our foreign currency ~~payables~~debt, respectively. The total gain (loss) excluded from assessment and receivables in earnings each period along with the fair value changes on the foreign currency forward contracts used as economic hedges. In these cases, the earnings effects of the derivative and hedged item largely offset. We also use economic hedges when we have exposures to currency exchange risk for which we are unable to meet the requirements for hedge accounting. For example, we use currency forwards as an economic hedge of forecasted foreign currency cash flows under long-term contracts. In this case, the forecast period is so long that it is difficult to meet the hedge accounting requirement that the occurrence of the hedged transactions is probable. For these types of economic hedges, changes in the fair value of the derivative are recorded in earnings currently but changes in the value of the forecasted foreign currency cash flows are only recognized in earnings ~~when they occur. As a result, even though~~was $27 million, $23 million and $19 million for the ~~derivative is an effective economic hedge, there is a net effect on earnings in each period due to differences in the timing of earnings recognition between the derivative~~years ended December 31, 2019, 2018 and ~~the hedged item.~~2017, respectively.

The table below provides information about the earnings effects of all derivatives that serve as economic hedges. These derivatives are marked to fair value through earnings each period. For our financial services business, these gains and losses are reported in "GE Capital revenues from services". For our industrial businesses, the effects are reported in "Other income" or "Other costs and expenses". The offsetting earnings effects associated with hedged assets and liabilities are also displayed in the table below. In general, the earnings effects of the hedged item are recorded in the same financial statement line as the derivative. The earnings effect of economic hedges, after considering offsets related to earnings effects of hedged assets and liabilities, is substantially offset by changes in the faircarrying value of ~~forecasted transactions that have not yet affected earnings.~~

foreign currency debt designated as net investment hedges was $9,190 million, $12,458 million and $13,028 at

FINANCIAL STATEMENT EFFECTS - ECONOMIC HEDGES

(In millions) 2016 2015

Balance sheet changes
Change in fair value of economic hedge increase (decrease) $ (2,456) $ (2,720)
Change in carrying amount of item being hedged increase (decrease) 2,107 2,543

Earnings (loss) effect of economic hedges(a) (348) (177)

~~(a)Offset by the future earnings effects of economically hedged item.~~

~~The table below explains the effects of market rate changes on the fair value of derivatives we use most commonly as economic hedges.~~

~~Interest rate forwards/swaps interest rate~~	~~Interest rate increases~~	~~Interest rate decreases~~
~~Pay floating rate/receive fixed rate~~	~~Fair value decreases~~	~~Fair value increases~~

~~Currency forwards/swaps~~	~~U.S. dollar strengthens~~	~~U.S. dollar weakens~~
~~Pay U.S. dollars/receive foreign currency~~	~~Fair value decreases~~	~~Fair value increases~~
~~Receive U.S. dollars/pay foreign currency~~	~~Fair value increases~~	~~Fair value decreases~~

~~Commodity derivatives~~	~~Price increases~~	~~Price decreases~~
~~Receive commodity/ pay fixed price~~	~~Fair value increases~~	~~Fair value decreases~~

~~NOTIONAL AMOUNT OF DERIVATIVES~~

The notional amount of a derivative is the number of units of the underlying (for example, the notional principal amount of the debt in an interest rate swap). The notional amount is used to compute interest or other payment streams to be made under the contract and is a measure of our level of activity. We generally disclose derivative notional amounts on a gross basis. A substantial majority of the outstanding notional amount of $181 billion at December 31, ~~2016 is related to managing interest rate~~2019, 2018 and ~~currency risk between financial assets~~2017 respectively. The total reclassified from AOCI into earnings was $7 million, $(1) million and ~~liabilities in our financial services business. The remaining derivative notional amount primarily relates to hedges of anticipated sales~~$125 million for the years ended December 31, 2019, 2018 and ~~purchases in foreign currency, commodity purchases and contractual terms in contracts that are considered embedded derivatives.~~2017, respectively.

~~GE 2016 FORM 10-K 193~~

The table below provides additional information about how derivatives are reflected in our financial statements. Derivative assets and liabilities are recorded at fair value exclusive of interest earned or owed on interest rate derivatives, which is presented separately on our Statement of Financial Position. Cash collateral and securities held as collateral represent assets that have been provided by our derivative counterparties as security for amounts they owe us (derivatives that are in an asset position).

CARRYING AMOUNTS RELATED TO DERIVATIVES

December 31 (In millions) 2016 2015

Derivative assets $ 5,467 $ 7,391
Derivative liabilities (4,883) (5,681)
Accrued interest 792 1,014
Cash collateral & credit valuation adjustment (672) (1,141)
Net Derivatives 703 1,583
Securities held as collateral (442) (1,277)
Net amount $ 262 $ 306

EFFECTS OF DERIVATIVES ON ~~EARNINGS~~

EARNINGS. All derivatives are marked to fair value on our balance sheet, whether they are designated in a hedging relationship for accounting purposes or are used as economic hedges. ~~As discussed in the previous sections, each type of hedge affects the financial statements differently. In fair value and economic hedges, both the hedged item and the~~For derivatives not designated as hedging derivative largely offset in earnings each period. In cash flow and net investment hedges, the effective portion of the hedging derivative is offset in separate components of shareowners' equity and ineffectiveness is recognized in earnings. The table below summarizes these offsets and the net effect on pre-tax earnings.

(In millions) Effect on hedging instrument Effect on underlying Effect on earnings

2016
Cash flow hedges $ (274) $ 274 $ 1
Fair value hedges 170 (433) (263)
Net investment hedges(a) 2,458 (2,376) 82
Economic hedges(b) (2,456) 2,107 (348)
Total $ (528)

2015
Cash flow hedges $ (911) $ 913 $ 2
Fair value hedges (151) 75 (75)
Net investment hedges(a) 4,022 (4,131) (109)
Economic hedges(b) (2,720) 2,543 (177)
Total $ (359)

~~The amounts in the table above generally do not include associated derivative accruals in income or expense.~~

~~(a) Both derivatives and non-derivatives hedging~~ instruments, ~~are included.~~

~~(b) Net effect is substantially offset by the change in fair value of the hedged item that will affect earnings in future periods.~~

See Note 15 for additional information about changes in shareowners' equity related to hedging and amounts released to earnings. See Note 29 for other supplemental information about derivatives and hedging.

~~GE 2016 FORM 10-K 194~~

~~NOTE 21. VARIABLE INTEREST ENTITIES (VIE)~~

A VIE is an entity that has one of three characteristics: (1) it is controlled by someone other than its shareowners or partners, (2) its shareowners or partners are not economically exposed to the entity's earnings (for example, they are protected against losses), or (3) it was thinly capitalized when it was formed.

In the normal course of our business we become involved with VIEs either because we help create them or we invest in them. Our VIEs either provide goods and services to customers or provide financing to third parties for the purchase of GE goods and services. If we control the VIE, we consolidate it and provide disclosures below. However, if the VIE is a business and use of its assets is not limited to settling its liabilities, ongoing disclosures are not required.

~~CONSOLIDATED VARIABLE INTEREST ENTITIES~~

Our most significant consolidated VIEs are the three joint ventures that were formed as part of the Alstom acquisition. These joint ventures include grid technology, renewable energy, and global nuclear and French steam power and have combined assets, liabilities and redeemable noncontrolling interest as of December 31, 2016 and 2015 of $14,460 million, $9,922 million and $2,709 million and $11,536 million, $8,739 million and $2,859 million, respectively. These joint ventures are considered VIEs because the equity held by Alstom does not participate fully in the earnings of the ventures due to the contractual features allowing Alstom to sell their interests back to GE. We consolidate these ventures because we control all their significant activities. These joint ventures are in all other respects regular businesses and are therefore exempt from ongoing disclosure requirements for VIEs provided below.

The table below provides information about VIEs that are subject to ongoing disclosure requirements. Substantially all of these entities were created to help our customers finance the purchase of GE goods and services or to purchase GE current and customer notes receivable originating from sales of goods and services. These entities have no features that could expose us to losses that would significantly exceed the difference between the consolidated assets and liabilities.

~~GE 2016 FORM 10-K 195~~

ASSETS AND LIABILITIES OF CONSOLIDATED VIEs

GE Capital
Current Customer
(In millions) GE receivables(a) Notes receivables(b) Other Total

December 31, 2016
Assets
Financing receivables, net $ - $ - $ - $ 1,035 $ 1,035
Current receivables 57 - 670 - 727
Investment securities - - - 982 982
Other assets 492 (c) - 1,122 1,747 3,361
Total $ 549 $ - $ 1,792 $ 3,764 $ 6,105

Liabilities
Borrowings $ 1 $ - $ - $ 818 $ 819
Non-recourse borrowings - - 401 16 417
Other liabilities 457 (c) - 1,378 1,482 3,317
Total $ 458 $ - $ 1,779 $ 2,316 $ 4,553

December 31, 2015
Assets
Financing receivables, net $ - $ - $ - $ 882 $ 882
Current receivables 385 3,506 - - 3,891
Investment securities - - - 1,404 1,404
Other assets 2,482 24 - 1,068 3,574
Total $ 2,867 $ 3,530 $ - $ 3,354 $ 9,751

Liabilities
Borrowings $ 221 $ - $ - $ 960 $ 1,181
Non-recourse borrowings - 3,022 - 61 3,083
Other liabilities 2,289 34 - 1,234 3,557
Total $ 2,510 $ 3,056 $ - $ 2,255 $ 7,821

~~(a)~~

In the second quarter of 2016, we completed the sale of our Appliances business to Haier and sold all of the Appliances current receivables purchased by the securitization trust to Haier for $773 million. At December 31, 2015, the current receivables securitization included $737 million of current receivables purchased from Appliances.

~~In the fourth quarter of 2016, we completed the restructure of our Receivables Facility described in Note 22. The restructured facility does not use a consolidated VIE.~~

~~(b)~~

~~In the first quarter of 2016, two funding vehicles were established to purchase customer notes receivable from GE, one of which is partially funded by third-party debt.~~

~~(c)~~

In the first quarter of 2016, we purchased the minority interest in an Oil & Gas joint venture and as a result the entity is no longer a VIE. Consolidated VIE assets and liabilities were reduced by $1,240 million and $1,284 million, respectively.

Total revenues from our consolidated VIEs were $1,141 million, $1,638 million and $1,457 million for the years ended December 31, 2016, 2015 and 2014, respectively. Related expenses consisted primarily of cost of goods and services of $692 million, $1,232 million and $823 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Where we provide servicing for third-party investors, we are contractually permitted to commingle cash collected from customers on financing receivables sold to third-party investors with our own cash prior to payment to third-party investors, provided our short-term credit rating does not fall below A-1/P1. These third-party investors also owe us amounts for purchased financial assets and scheduled interest and principal payments. At December 31, 2016 and 2015, the amounts of commingled cash owed to the third-party investors were $1,117 million and $1,093 million, respectively, and the amounts owed to us by third-party investors were $5 million and $7 million, respectively.

~~UNCONSOLIDATED VARIABLE INTEREST ENTITIES~~

We become involved with unconsolidated VIEs primarily through assisting in the formation and financing of the entity. We do not consolidate these entities because we do not have power over decisions that significantly affect their economic performance. Our investments in unconsolidated VIEs, at December 31, 2016 and 2015 were $6,346 million and $787 million, respectively. Obligations to make additional investments in these entities are not significant.

~~GE 2016 FORM 10-K 196~~

~~Our investments in long-lived, capital-intensive energy limited partnerships through Energy Financial Services became non-consolidated VIEs in accordance with our January 2016 adoption of ASU 2015-2,~~ ~~Amendments to the Consolidated Analysis~~ (see Note 1). In these partnerships we are the sole limited partner and had no participating rights or substantive removal rights over the general partners. The general partners of these entities, who possess the technical and industry expertise necessary to operate and manage their activities, continue to control these limited partnerships. As a result of this accounting change, our disclosed investments in unconsolidated VIEs increased by $6,077 million, without additional funds being advanced to these entities.

~~NOTE 22. RECEIVABLES FACILITY~~

Since 2002, the Company, as part of its working capital management, has sold current receivables to trusts in which third-party investors invest (the Receivables Facility). We use the cash generated from those sales to fund GE working capital earlier than we would otherwise receive payment from our customers and to manage credit exposures.

In 2010, we consolidated the trust that existed at that time pursuant to a change in the accounting guidance and subsequently reported both current receivables owned by the trust and the associated non-recourse third-party debt of the trust as assets and liabilities of a consolidated VIE on the Statement of Financial Position. Our economic exposure to the sold receivables remained the same before and after we consolidated the trust.

In the fourth quarter of 2016, we completed a refinancing of the Receivables Facility. The total facility size remained at $3,000 million. As a result of this refinancing, the current receivables are now purchased directly by third-party investors, who make their own arrangements to fund the purchase, and we no longer use the trust we used prior to the refinancing. Upon sale of the receivables, we receive proceeds of cash and a deferred purchase price (DPP). The DPP is an interest in specified assets of the purchasers (the receivables sold by GE Capital) that entitles GE Capital to the residual cash flows of those specified assets. The third-party purchasers have no recourse to other assets of GE Capital in the event of non-payment by the debtors. Where the purchasing entity is a bank multi-seller commercial paper conduit, assets transferred by other parties to that entity form a majority of the entity's assets.

The amount of customer receivables sold and outstanding under the Receivables Facility at December 31, 2016 was $2,575 million, and the consolidated customer receivables financed by third-party investors at December 31, 2015 was $3,506 million.

The amount of DPP due to GE Capital was $483 million at December 31, 2016, and is classified as "Current receivables" in the consolidated column of the Statement of Financial Position and as "Financing receivables" in the GE Capital column of the Statement of Financial Position.

Because of the refinancing, GE Capital's financing receivables decreased by approximately $2,092 million as of December 31, 2016 when compared to December 31, 2015. The Company's economic exposure under the Receivables Facility, represented by the DPP, remained the same before and after we completed the refinancing of the Receivables Facility.

Given the short-term nature of the underlying receivables, discount rates and prepayments are not factors in determining the value of the DPP. Collections on the DPP are presented within Cash flows from operating activities in the consolidated column in the Statement of Cash Flows. As the performance of the transferred current receivables is similar to the performance of our other current receivables, delinquencies are not expected to be significant.

~~GE 2016 FORM 10-K 197~~

~~NOTE 23. COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES AND OTHER LOSS CONTINGENCIES~~

~~COMMITMENTS~~

The GE Capital Aviation Services (GECAS) business in GE Capital had placed multiple-year orders for various Boeing, Airbus and other aircraft manufacturers with list prices approximating $32,958 million and secondary orders with airlines for used aircraft of approximately $1,275 million at December 31, 2016. In our Aviation segment, we had committed to provide financing assistance of $2,230 million of future customer acquisitions of aircraft equipped with our engines.

~~GUARANTEES~~

Our guarantees are provided in the ordinary course of business. We underwrite these guarantees considering economic, liquidity and credit risk of the counterparty. We believe that the likelihood is remote that any such arrangements could have a significant adverse effect on our financial position, results of operations or liquidity. We record liabilities for guarantees at estimated fair value, generally the amount of the premium received, or if we do not receive a premium, the amount based on appraisal, observed market values or discounted cash flows. Any associated expected recoveries from third parties are recorded as other receivables, not netted against the liabilities.

~~At December 31, 2016, we were committed under the following guarantee arrangements beyond those provided on behalf of VIEs. See Note 21~~.

~~Credit Support.~~ We have provided $1,352 million of credit support on behalf of certain customers or associated companies, predominantly joint ventures and partnerships, using arrangements such as standby letters of credit and performance guarantees. These arrangements enable these customers and associated companies to execute transactions or obtain desired financing arrangements with third parties. Should the customer or associated company fail to perform under the terms of the transaction or financing arrangement, we would be required to perform on their behalf. Under most such arrangements, our guarantee is secured, usually by the asset being purchased or financed, or possibly by certain other assets of the customer or associated company. The length of these credit support arrangements parallels the length of the related financing arrangements or transactions. The liability for such credit support was $44 million at December 31, 2016.

~~Indemnification Agreements – Continuing Operations~~. We have agreements that require us to fund up to $222 million at December 31, 2016 under residual value guarantees on a variety of leased equipment. Under most of our residual value guarantees, our commitment is secured by the leased asset. The liability for these indemnification agreements was $7 million at December 31, 2016.

~~At December 31, 2016, we also had $973 million of other indemnification commitments,~~ substantially all of ~~which relate to representations and warranties~~the gain or loss recognized in ~~sales of businesses or assets. The liability for these indemnification commitments was $228 million at December 31, 2016~~.

~~Indemnification Agreements – Discontinued Operations.~~At ~~December 31, 2016~~, we provided specific indemnifications to buyers of GE Capital's assets that amounted to $2,638 million, for which we have recognized related liabilities of $285 million. In addition, in connection with the 2015 public offering and sale of Synchrony Financial, GE Capital indemnified Synchrony Financial and its directors, officers, and employees against the liabilities of GECC's businesses other than historical liabilities of the businesses that are part of Synchrony Financial's ongoing operations.

~~Contingent Consideration.~~ These are agreements to provide additional consideration to a buyer or seller in a business combination if contractually specified conditions related to the acquisition or disposition are achieved. Amount of contingent consideration was insignificant at December 31, 2016.

~~GE 2016 FORM 10-K 198~~

~~PRODUCT WARRANTIES~~

We provide for estimated product warranty expenses when we sell the related products. Because warranty estimates are forecasts that are based on the best available information – mostly historical claims experience – claims costs may differ from amounts provided. An analysis of changes in the liability for product warranties follows.

(In millions) 2016 2015 2014

Balance at January 1 $ 1,723 $ 1,199 $ 1,370
Current-year provisions 791 649 593
Expenditures (729) (718) (714)
Other changes(a) 135 593 (50)
Balance at December 31 $ 1,920 $ 1,723 $ 1,199

~~(a)Included $634 million related to Alstom acquisition in 2015~~.

~~OTHER LOSS CONTINGENCIES~~

~~LEGAL MATTERS~~

~~WMC.~~ ~~During the fourth quarter of 2007, we completed the sale of WMC, our U.S. mortgage business. WMC substantially discontinued all new loan originations by the second quarter of 2007, and~~earnings is not a loan servicer. In connection with the sale, WMC retained certain representation and warranty obligations related to loans sold to third parties prior to the disposal of the business and contractual obligations to repurchase previously sold loans that had an early payment default. All claims received by WMC for early payment default have either been resolved or are no longer being pursued.

The remaining active claims have been brought by securitization trustees or administrators seeking recovery from WMC for alleged breaches of representations and warranties on mortgage loans that serve as collateral for residential mortgage-backed securities (RMBS). At December 31, 2016, such claims consisted of $1,060 million of individual claims generally submitted before the filing of a lawsuit (compared to $2,887 million at December 31, 2015) and $5,456 million of additional claims asserted against WMC in litigation without making a prior claim (Litigation Claims) (compared to $8,047 million at December 31, 2015). The total amount of these claims, $6,516 million, reflects the purchase price or unpaid principal balances of the loans at the time of purchase and does not give effect to pay downs or potential recoveries based upon the underlying collateral, which in many cases are substantial, nor to accrued interest or fees. WMC believes that repurchase claims brought based upon representations and warranties made more than six years before WMC was notified of the claim would be disallowed in legal proceedings under applicable law and the June 11, 2015 decision of the New York Court of Appeals in ACE Securities Corp. v. DB Structured Products, Inc., on the statute of limitations period governing such claims.

Reserves related to repurchase claims made against WMC were $626 million at December 31, 2016, reflecting a net decrease to reserves in the year ended December 31, 2016 of $249 million due to settlements partially offset by ~~incremental provisions. The reserve estimate takes into account recent settlement activity and is based upon WMC's evaluation of~~either the ~~remaining exposures as a percentage of estimated lifetime mortgage loan losses within the pool of loans supporting each securitization for which timely claims have been asserted~~current period change in ~~litigation against WMC. Settlements in prior periods reduced WMC's exposure on claims asserted in certain securitizations and the claim amounts reported above give effect to these settlements~~.

ROLLFORWARD OF THE RESERVE

(In millions) 2016 2015

Balance at January 1 $ 875 $ 809
Provision 91 212
Claim resolutions / rescissions (340) (146)
Balance at December 31 $ 626 $ 875

~~GE 2016 FORM 10-K 199~~

Given the significant litigation activity and WMC's continuing efforts to resolve the lawsuits involving claims made against WMC, it is difficult to assess whether future losses will be consistent with WMC's past experience. Adverse changes to WMC's assumptions supporting the reserve may result in an increase to these reserves. WMC estimates a range of reasonably possible loss from $0 to approximately $500 million over its recorded reserve at December 31, 2016. This estimate involves significant judgment and may not reflect the range of uncertainties and unpredictable outcomes inherent in litigation, including the matters discussed in Legal Proceedings and potential changes in WMC's legal strategy. This estimate excludes any possible loss associated with an adverse court decision on the applicable statute of limitations or an adverse outcome in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) investigation discussed in Legal Proceedings, as WMC is unable at this time to develop such a meaningful estimate.

At December 31, 2016, there were 10 lawsuits involving claims made against WMC arising from alleged breaches of representations and warranties on mortgage loans included in 11 securitizations. The adverse parties in these cases are securitization trustees or parties claiming to act on their behalf. On January 23, 2017, the ResCap Liquidating Trust, as successor to Residential Funding Company, LLC (RFC), filed a lawsuit against WMC in the United States District Court for the District of Minnesota arising from alleged breaches in representations and warranties made by WMC in connection with the sale of approximately $840 million in loans to RFC over a period of time preceding RFC's filing for bankruptcy protection in May 2012. Although the alleged claims for relief vary from case to case, the complaints and counterclaims in these actions generally assert claims for breach of contract, indemnification, and/or declaratory judgment, and seek specific performance (repurchase of defective mortgage loan) and/or money damages. Adverse court decisions, including in cases not involving WMC, could result in new claims and lawsuits on additional loans. However, WMC continues to believe that it has defenses to the claims asserted in litigation, including, for example, based on causation and materiality requirements and applicable statutes of limitations. It is not possible to predict the outcome or impact of these defenses and other factors, any of which could materially affect the amount of any loss ultimately incurred by WMC on these claims.

WMC has also received indemnification demands, nearly all of which are unspecified, from depositors/underwriters/sponsors of RMBS in connection with lawsuits brought by RMBS investors concerning alleged misrepresentations in the securitization offering documents to which WMC is not a party or, in two cases, involving mortgage loan repurchase claims made against RMBS sponsors. WMC believes that it has defenses to these demands.

~~To the extent WMC is required to repurchase loans, WMC's loss also would be affected by several factors, including pay downs, accrued interest and fees, and the~~ value of ~~the~~ underlying collateral. The reserve and estimate of possible loss reflect judgment, based on currently available information, and a number of assumptions, including economic conditions, claim and settlement activity, pending and threatened litigation, court decisions regarding WMC's legal defenses, indemnification demands, government activity, and other variables in the mortgage industry. Actual losses arising from claims against WMC could exceed these amounts and additional claims and lawsuits could result if actual claim rates, governmental actions, litigation and indemnification activity, adverse court decisions, actual settlement rates or losses WMC incurs on repurchased loans differ from its assumptions.

FINANCIAL INFORMATION FOR WMC

(In millions) 2016 2015 2014

Total revenues and other income (loss) $ (8) $ (184) $ (291)

Earnings (loss) from discontinued operations, net of taxes $ (52) $ (146) $ (199)

~~Alstom legacy matters~~. On November 2, 2015, we acquired the Thermal, Renewables and Grid businesses from Alstom. Prior to the acquisition, the seller was the subject of two significant cases involving anti-competitive activities and improper payments: (1) in January 2007, Alstom was fined €65 million by the European Commission for participating in a gas insulated switchgear cartel that operated from 1988 to 2004 (that fine was later reduced to €59 million), and (2) in December 2014, Alstom pled guilty in the United States to multiple violations of the Foreign Corrupt Practices Act and paid a criminal penalty of $772 million. As part of GE's accounting for the acquisition, we established a reserve amounting to $858 million for legal and compliance matters related to the legacy business practices that were the subject of these and related cases in various jurisdictions.

~~GE 2016 FORM 10-K 200~~

Regardless of jurisdiction, the allegations relate to claimed anti-competitive conduct or improper payments in the pre-acquisition period as the source of legal violations and/or damages. Given the significant litigation and compliance activity related to these matters and our ongoing efforts to resolve them, itexposures which is difficult to assess whether the disbursements will ultimately be consistent with the reserve established. The estimation of this reserve involved significant judgment and may not reflect the full range of uncertainties and unpredictable outcomes inherent in litigation and investigations of this nature. Damages sought may include disgorgement of profits on the underlying business transactions, fines and/or penalties, interest, or other forms of resolution. Factors that can affect the ultimate amount of losses associated with these matters include the way cooperation is assessed and valued, prosecutorial discretion in the determination of damages, formulas for determining fines and penalties, the duration and amount of legal and investigative resources applied, and political and social influences within each jurisdiction, among other considerations. Actual losses arising from claims in these matters could exceed the amount provided. At this time, we are unable to develop a meaningful estimate of the range of reasonably possible additional losses for this exposure.

~~ENVIRONMENTAL MATTERS~~

Our operations, like operations of other companies engaged in similar businesses, involve the use, disposal and cleanup of substances regulated under environmental protection laws. We are involved in numerous remediation actions to clean up hazardous wastes as required by federal and state laws. Liabilities for remediation costs exclude possible insurance recoveries and, when dates and amounts of such costs are not known, are not discounted. When there appears to be a range of possible costs with equal likelihood, liabilities are based on the low end of such range. It is reasonably possible that our environmental remediation exposure will exceed amounts accrued. However, due to uncertainties about the status of laws, regulations, technology and information related to individual sites, such amounts are not reasonably estimable. Total reserves related to environmental remediation and asbestos claims, were $1,767 million at December 31, 2016.

~~GE 2016 FORM 10-K 201~~

~~NOTE 24. INTERCOMPANY TRANSACTIONS~~

~~Transactions between related companies are made on~~ an arms-length basis and are reported in the GE and GE Capital columns of our financial statements, but are eliminated in deriving our consolidated financial statements. These transactions include, but are not limited to, the following:

·	~~GE Capital dividends to GE,~~

·	~~GE Capital working capital solutions to optimize GE cash management,~~

·	~~GE Capital enabled GE industrial orders, and~~

·	~~Aircraft engines, power equipment and healthcare equipment manufactured by GE that are installed on GE Capital investments, including leased equipment.~~

~~In addition to the above transactions that primarily enable growth for the GE businesses, there are routine related party transactions, which include, but are not limited to, the following:~~

·	~~Expenses related to parent-subsidiary pension plans,~~

·	~~Buildings and equipment leased between GE and GE Capital, including sale-leaseback transactions,~~

·	~~Information technology (IT) and other services sold to GE Capital by GE, and~~

·	~~Various investments, loans and allocations of GE corporate overhead costs.~~

~~Presented below is a walk of intercompany eliminations from the unconsolidated GE and GE Capital totals to the consolidated cash flows~~.

(In millions) 2016 2015 2014

Cash from (used for) operating activities-continuing operations
Combined $ 28,408 $ 17,891 $ 21,434
   GE current receivables sold to GE Capital 697 (856) (1,882)
   GE Capital dividends to GE (20,095) (4,300) (3,000)
   Other reclassifications and eliminations(a) (2,911) (879) (519)
Total cash from (used for) operating activities-continuing operations $ 6,099 $ 11,856 $ 16,033
Cash from (used for) investing activities-continuing operations
Combined $ 58,134 $ 59,516 $ 17,252
   GE current receivables sold to GE Capital (230) 1,261 1,730
   GE Capital short-term loan to GE 1,329 - -
   Other reclassifications and eliminations(a) 3,380 836 247
Total cash from (used for) investing activities-continuing operations $ 62,613 $ 61,613 $ 19,229
Cash from (used for) financing activities-continuing operations
Combined $ (107,750) $ (73,484) $ (44,340)
   GE current receivables sold to GE Capital (467) (405) 152
   GE Capital dividends to GE 20,095 4,300 3,000
   GE Capital short-term loan to GE (1,329) - -
   Other reclassifications and eliminations(a) (469) 42 276
Total cash from (used for) financing activities-continuing operations $ (89,920) $ (69,547) $ (40,912)

~~(a)~~

~~Includes eliminations of other cash flows activities including those related to GE Capital enabled GE industrial orders, various investments, loans and allocations of GE corporate overhead costs.~~

~~GE 2016 FORM 10-K 202~~

~~NOTE 25. OPERATING SEGMENTS~~

~~BASIS FOR PRESENTATION~~

Our operating businesses are organized based on the nature of markets and customers. Segment accounting policies are the same as described and referenced in Note 1. Segment results for our financial services businesses reflect the discrete tax effect of transactions.

A description of our operating segments as of December 31, 2016, can be found below, and details of segment profit by operating segment can be found in the Summary of Operating Segments table in "Management's Discussion and Analysis of Financial Condition and Results of Operations" section in this Form 10-K Report.

~~POWER~~

Power plant products and services, including design, installation, operation and maintenance services are sold into global markets. Gas, steam and aeroderivative turbines, nuclear reactors, generators, combined cycle systems, controls and related services, including total asset optimization solutions, equipment upgrades and long-term maintenance service agreements are sold to power generation and other industrial customers. Water treatment services and equipment include specialty chemical treatment programs, water purification equipment, mobile treatment systems and desalination processes.

~~RENEWABLE ENERGY~~

Renewable Energy makes power from renewable sources affordable, accessible, and reliable for the benefit of people everywhere. With one of the broadest technology portfolios in the industry, Renewable Energy creates value for customers by providing technology and services in the Onshore Wind Power industry, high-yield offshore wind turbines as well as a full range of solutions, products and services to serve the hydropower industry, ~~from initial design to final commissioning~~.

~~OIL & GAS~~

Oil & Gas supplies mission critical equipment for the global oil and gas industry, used in applications spanning the entire value chain from drilling and completion through production, liquefied natural gas (LNG) and pipeline compression, pipeline inspection, and including downstream processing in refineries and petrochemical plants. The business designs and manufactures surface and subsea drilling and production systems, equipment for floating production platforms, compressors, turbines, turboexpanders, high pressure reactors, industrial power generation and a broad portfolio of auxiliary equipment.

~~AVIATION~~

Aviation products and services include jet engines, aerospace systems and equipment, replacement parts and repair and maintenance services for all categories of commercial aircraft; for a wide variety of military aircraft, including fighters, bombers, tankers and helicopters; for marine applications; and for executive and regional aircraft. Products and services are sold worldwide to airframe manufacturers, airlines and government agencies.

~~HEALTHCARE~~

Healthcare products include diagnostic imaging systems such as magnetic resonance (MR), computed tomography (CT) and positron emission tomography (PET) scanners, X-ray, surgical & interventional imaging, nuclear imaging, digital mammography and molecular imaging technologies. Healthcare-manufactured technologies include patient and resident monitoring, diagnostic cardiology, ultrasound, bone densitometry, anesthesiology and oxygen therapy, and neonatal and critical care devices. Related services include equipment monitoring and repair, digital technologies and customer productivity services. Products also include diagnostic imaging agents used in medical scanning procedures, drug discovery, biopharmaceutical manufacturing and purification, and tools for protein and cellular analysis for pharmaceutical and academic research, including a pipeline of precision molecular diagnostics in development for neurology, cardiology and oncology applications. Products and services are sold worldwide to hospitals, medical facilities, pharmaceutical and biotechnology companies, and to the life science research market.

~~GE 2016 FORM 10-K 203~~

~~TRANSPORTATION~~

Transportation is a global technology leader and supplier to the railroad, mining, marine and drilling industries. GE provides freight and passenger locomotives, diesel engines for rail, marine and stationary power applications, railway signaling and communications systems, underground mining equipment, motorized drive systems for mining trucks, information technology solutions, high-quality replacement parts and value added services.

~~ENERGY CONNECTIONS & LIGHTING~~

Energy Connections is GE's electrification business. Global teams design leading technology solutions for the delivery, management, conversion and optimization of electrical power for customers across multiple energy-intensive industries. GE has invested in our Energy Connections capabilities, with strategic acquisitions and joint ventures that enable GE to increase its offerings to the utility, industrial, renewable energy, oil and gas, marine, metals and mining industries. Plant automation hardware, software and embedded computing systems including controllers, embedded systems, advanced software, motion control, operator interfaces and industrial computers are also provided by Energy Connections.

Lighting includes the GE Lighting and Current, powered by GE (Current) businesses. GE Lighting is focused on driving innovation and growth in light emitting diode (LED) and connected home technology in the U.S. Lighting offers LEDs in a variety of shapes, sizes, wattages and color temperatures. It's also investing in the growing smart home category, building a suite of connected lighting products with simple connection points that offer new opportunities to do more at home. Current delivers energy efficiency and productivity solutions for commercial and industrial customers. We combine infrastructure technology like LED and solar with new sensor-enabled data networks and Predix-based digital applications to help our customers reduce energy costs, better predict spend and gain business productivity insights. We partner with a wide variety of digital companies to help expand our app catalog, and we offer flexible financing solutions that help our customers achieve faster payback periods and better long-term value.

~~CAPITAL~~

Capital is the financial services division of GE focused on customers and markets aligned with GE's industrial businesses, whether in developed economies or emerging markets. We provide financial products and services around the globe, that are geared to utilize GE's industry specific expertise in aviation, energy, infrastructure, and healthcare to capitalize on market-specific opportunities. In addition, we continue to operate our run-off insurance activities as part of our continuing operations.

REVENUES

Total revenues(a) Intersegment revenues(b) External revenues
(In millions) 2016 2015 2014 2016 2015 2014 2016 2015 2014

Power $ 26,827 $ 21,490 $ 20,580 $ 640 $ 762 $ 778 $ 26,187 $ 20,728 $ 19,802
Renewable Energy 9,033 6,273 6,399 11 12 14 9,022 6,261 6,386
Oil & Gas 12,898 16,450 19,085 383 387 402 12,515 16,063 18,683
Aviation 26,261 24,660 23,990 730 418 692 25,530 24,242 23,298
Healthcare 18,291 17,639 18,299 15 7 6 18,276 17,633 18,293
Transportation 4,713 5,933 5,650 1 1 (2) 4,713 5,932 5,652
Energy Connections & Lighting 15,133 16,351 15,724 1,059 1,021 912 14,074 15,329 14,812
Total industrial
113,156 108,796 109,727 2,839 2,608 2,801 110,316 106,188 106,926
Capital 10,905 10,801 11,320 1,288 1,151 1,037 9,617 9,650 10,283
Corporate items
and eliminations
(368) (2,211) (3,863) (4,127) (3,759) (3,838) 3,760 1,548 (25)
Total $ 123,693 $ 117,386 $ 117,184 $ - $ - $ - $ 123,693 $ 117,386 $ 117,184

~~(a)~~

~~Revenues of GE businesses include income from sales of goods and services to customers and other income.~~

~~(b)~~

~~Sales from one component to another generally are priced at equivalent commercial selling prices.~~

Revenues from customers located in the United States were $53,317 million, $53,238 million and $51,147 million in 2016, 2015 and 2014, respectively. Revenues from customers located outside the United States were $70,376 million, $64,148 million and $66,038 million in 2016, 2015 and 2014, respectively.

~~GE 2016 FORM 10-K 204~~

Property, plant and
Assets(a) equipment additions(b) Depreciation and amortization
At December 31 For the years ended December 31 For the years ended December 31
(In millions) 2016 2015 2014 2016 2015 2014 2016 2015 2014

Power $ 55,474 $ 51,908 $ 26,698 $ 769 $ 2,122 $ 578 $ 1,130 $ 712 $ 563
Renewable Energy 8,794 9,468 3,572 166 999 41 37 116 113
Oil & Gas 24,615 26,126 27,329 284 422 656 529 596 585
Aviation 38,899 34,524 33,716 1,328 1,260 1,197 900 855 824
Healthcare 28,639 28,162 29,227 432 284 405 785 799 843
Transportation 4,288 4,368 4,449 108 202 128 159 179 169
Energy Connections & Lighting 17,858 21,587 15,536 354 1,348 535 441 426 548
Capital(c) 187,804 316,069 502,204 3,769 7,570 3,818 2,515 2,584 2,612
Corporate items
and eliminations(d)
(1,187) 858 11,201 94 (297) (111) 341 231 164
Total $ 365,183 $ 493,071 $ 653,931 $ 7,305 $ 13,911 $ 7,247 $ 6,836 $ 6,499 $ 6,421

~~(a)~~

Total assets of Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation, Energy Connections & Lighting and Capital operating segments at December 31, 2016, include investments in and advances to associated companies of $405 million, $9 million, $88 million, ~~$1,779~~ ~~million, $366 million, $6 million,~~ ~~$752~~ million and $7,673 million, respectively. Investments in and advances to associated companies contributed approximately $(17) million, $(4) million, $4 million, $75 million, $19 million, $46 million and $363 million to segment pre-tax income of Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Energy Connections & Lighting and Capital operating segments, respectively, and Transportation an insignificant amount, for the year ended December 31, 2016.

~~(b)~~

~~Additions to property, plant and equipment include amounts relating to principal businesses purchased.~~

~~(c)~~

~~Includes Capital discontinued operations~~

~~(d)~~

~~Includes deferred income taxes that are presented as assets for purposes of our consolidating balance sheet presentation.~~

Interest and other financial charges Provision (benefit) for income taxes
(In millions) 2016 2015 2014 2016 2015 2014

Capital $ 3,790 $ 2,301 $ 1,638 $ (1,431) $ 4,979 $ (861)
Corporate items and eliminations(a) 1,234 1,162 1,085 967 1,506 1,634
Total $ 5,025 $ 3,463 $ 2,723 $ (464) $ 6,485 $ 773

~~(a)~~

Included amounts for Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation and Energy Connections & Lighting, for which our measure of segment profit excludes interest and other financial charges and income taxes.

Property, plant and equipment – net associated with operations based in the United States were $14,987 million, $14,273 million and $9,868 million at December 31, 2016, 2015 and 2014, respectively. Property, plant and equipment – net associated with operations based outside the United States were $35,531 million, $39,822 million and $38,201 million at December 31, 2016, 2015 and 2014, respectively.

~~NOTE 26. CASH FLOWS INFORMATION~~

~~Changes in operating assets and liabilities are net of acquisitions and dispositions of principal businesses.~~

Amounts reported in the "Proceeds from sales of discontinued operations" and "Proceeds from principal business dispositions" lines in the Statement of Cash Flows are net of cash disposed and included certain deal-related costs. Amounts reported in the "Net cash from (payments for) principal businesses purchased" line is net of cash acquired and included certain deal-related costs and debt assumed and immediately repaid in acquisitions.

~~GE 2016 FORM 10-K 205~~

Amounts reported in the "All other operating activities" line in the Statement of Cash Flows consist primarily of adjustments to current and noncurrent accruals, deferrals of costs and expenses and adjustments to assets. Certain supplemental information related to our cash flows is shown below.

For the years ended December 31 (In millions) 2016 2015 2014

GE
All other operating activities
  (Gains) losses on purchases and sales of business interests(a) $ (3,701) $ (1,020) $ (188)
   Contract assets (net)(b) (3,929) (1,919) (1,572)
   Income taxes(c) (2,752) 1,671 773
   Interest charges 275 380 332
   Principal pension plans(d) 3,071 4,265 3,368
   Other (402) (1,294) 260
$ (7,438) $ 2,083 $ 2,973
Net dispositions (purchases) of GE shares for treasury
   Open market purchases under share repurchase program(e)
$ (22,581) $ (2,709) $ (2,211)
   Other purchases
(399) (58) (49)
   Dispositions
1,550 1,668 1,042
$ (21,429) $ (1,099) $ (1,218)
GE Capital
All other operating activities
   Cash collateral on derivative contracts (428) (1,936) 738
   Increase (decrease) in other liabilities (2,616) 4,860 (3,331)
   Other (10) 2,163 5,073
$ (3,054) $ 5,087 $ 2,480
Net decrease (increase) in GE Capital financing receivables
   Increase in loans to customers $ (65,055) $ (65,306) $ (64,843)
   Principal collections from customers - loans 60,375 60,292 60,764
   Investment in equipment for financing leases (690) (417) (535)
   Principal collections from customers - financing leases 856 734 841
   Sales of financing receivables 3,235 4,923 3,612
$ (1,279) $ 226 $ (161)
All other investing activities
   Purchases of investment securities $ (18,588) $ (7,790) $ (2,008)
   Dispositions and maturities of investment securities 7,343 9,587 2,723
   Decrease (increase) in other assets - investments 9,202 (1,439) (287)
   Other(f) 3,682 (5,048) 24,146
$ 1,639 $ (4,690) $ 24,574
Repayments and other reductions (maturities longer than 90 days)
   Short-term (91 to 365 days) $ (44,519) $ (42,110) $ (36,919)
   Long-term (longer than one year) (13,418) (2,455) (864)
   Principal payments - non-recourse, leveraged leases (348) (283) (304)
$ (58,285) $ (44,848) $ (38,087)
All other financing activities
   Proceeds from sales of investment contracts $ 19 $ 163 $ 322
   Redemption of investment contracts (346) (1,235) (1,113)
   Other (800) (290) 112
$ (1,127) $ (1,362) $ (679)

~~(a)~~

Included pre-tax gains on sales of businesses reclassified to Proceeds from principal business dispositions within Cash flows from investing activities of $(3,136) million for Appliances and $(398) million for GE Asset Management in 2016 and $(623) million for Signaling in 2015. See Note 17.

~~(b)~~

~~Contract assets are presented net of related billings in excess of revenues on our long-term product service agreements. See Note 9.~~

~~(c)~~

Reflected the effects of current tax expense (benefit) of $(140) million, $3,307 million and $2,110 million and net cash paid during the year for income taxes of $(2,612) million, $(1,636) million and $(1,337) million for the years ended December 31, 2016, 2015 and 2014, respectively. Cash flows effects of deferred tax provisions (benefits) are shown separately within cash flows from operating activities. See Note 14.

~~(d)~~

Reflected the effects of pension costs of $3,623 million, $4,498 million and $3,604 million and employer contributions of $(552) million, $(233) million and $(236) million for the years ended December 31, 2016, 2015 and 2014, respectively. 2016 employer contributions included GE Pension Trust funding of $(330) million representing net sale proceeds associated with the sale of GE Asset Management. See Notes 2 and 12.

~~(e)~~

~~Included $(11,370) million paid under ASR agreements in 2016.~~

~~(f)~~

~~Other primarily included net activity related to settlements between our continuing operations (primarily our treasury operations) and businesses in discontinued operations.~~

~~GE 2016 FORM 10-K 206~~

~~NOTE 27. COST INFORMATION~~

~~RESEARCH & DEVELOPMENT~~

We conduct research and development (R&D) activities to continually enhance our existing products and services, develop new product and services to meet our customers' changing needs and requirements, and address new market opportunities.

Research and development expenses are classified in cost of goods and services sold in the Statement of Earnings. In addition, research and development funding from customers, principally the U.S. government, is recorded as an offset to such costs. We also enter into research and development arrangements with unrelated investors, which are generally formed through partnerships and consolidated within GE's financial statements. Research and development funded through consolidated partnerships is classified within net earnings/loss attributable to noncontrolling interests.

Of total Research and Development, the segments with the most significant expenditures for the years ended December 31, 2016, 2015 and 2014 were: Aviation $1,595 million, $1,893 million and $1,965 million, respectively; Healthcare $938 million, $905 million, and $817 million, respectively; and Power $695 million, $721 million and $641 million, respectively. The remaining segments and Corporate, including Global Research Center, had combined expenditures of $2,238 million, $1,759 million and $1,850 million, for the years ended December 31, 2016, 2015 and 2014, respectively.

~~COLLABORATIVE ARRANGEMENTS~~

Our businesses enter into collaborative arrangements primarily with manufacturers and suppliers of components used to build and maintain certain engines, under which GE and these participants share in the risks and rewards of these product programs. GE's payments to participants are recorded as cost of services sold ($1,080 million, $788 million and $873 million for the years 2016, 2015 and 2014, respectively) or as cost of goods sold ($2,482 million, $2,736 million and $2,660 million for the years 2016, 2015 and 2014, respectively).

~~RENTAL EXPENSE~~

~~Rental expense under operating leases is shown below.~~

(In millions) 2016 2015 2014

GE $ 1,528 $ 1,258 $ 1,356
GE Capital 91 107 123
1,619 1,365 1,479
Eliminations (126) (169) (223)
Total $ 1,493 $ 1,196 $ 1,256

At December 31, 2016, minimum rental commitments under noncancellable operating leases aggregated $5,172 million and $302 million for GE and GE Capital, respectively. Amounts payable over the next five years follow.

(In millions) 2017 2018 2019 2020 2021

GE $ 942 $ 854 $ 742 $ 640 $ 537
GE Capital 27 23 22 21 20
969 877 763 661 557
Eliminations (171) (155) (143) (138) (130)
Total $ 798 $ 722 $ 621 $ 524 $ 427

~~GE 2016 FORM 10-K 207~~

~~NOTE 28. GUARANTOR FINANCIAL INFORMATION~~

~~GUARANTOR AND NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL INFORMATION~~

On October 26, 2015, GE Capital International Funding Company Unlimited Company, formerly GE Capital International Funding Company (the Issuer), then a finance subsidiary of General Electric Capital Corporation, settled its previously announced private offers to exchange (the Exchange Offers) the Issuer's new senior unsecured notes for certain outstanding debt securities of General Electric Capital Corporation.

The new notes that were issued were composed of $15.3 billion of 0.964% six month notes due April 2016 (which have subsequently been repaid upon maturity), £0.8 billion of 1.363% six month notes due April 2016 (which have subsequently been repaid upon maturity), $6.1 billion of 2.342% notes due 2020, $2.0 billion of 3.373% notes due 2025 and $11.5 billion of 4.418% notes due 2035. These notes were fully and unconditionally, jointly and severally guaranteed by both the Company and GE Capital International Holdings Limited (GECIHL) (each a Guarantor, and together, the Guarantors).

Under the terms of a registration rights agreement entered into in connection with the Exchange Offers, the Issuer and the Company agreed to file a registration statement with the U.S. Securities and Exchange Commission (SEC) for an offer to exchange new senior notes of the Issuer registered with the SEC and guaranteed by the Guarantors for certain of the Issuer's outstanding unregistered senior notes. This exchange was completed in July 2016.

~~PRESENTATION~~

In connection with the registration of the senior notes, the Company is required to provide certain financial information regarding the Issuer and the Guarantors of the registered securities. Included are the Condensed Consolidating Statements of Earnings and Comprehensive Income for the years ended December 31, 2016, 2015 and 2014, Condensed Consolidating Statements of Financial Position as of December 31, 2016 and December 31, 2015 and Condensed Consolidating Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014 for:

~~General Electric Company (the Parent Company Guarantor)~~ - prepared with investments in subsidiaries accounted for under the equity method of accounting and excluding any inter-segment eliminations. The equity basis earnings (losses) of subsidiaries are reflected in the captions "Equity in earnings (losses) of affiliates" and "Earnings (loss) from discontinued operations, net of taxes";

·	~~GE Capital International Funding Company Unlimited Company (the Subsidiary Issuer)~~ ~~– incorporated in May 2015 as a finance subsidiary for debt and reflects activity subsequent to the issuance of new notes on October 26, 2015;~~

~~GE Capital International Holdings Limited (GECIHL) (the Subsidiary Guarantor)~~ - prepared with investments in non-guarantor subsidiaries accounted for under the equity method of accounting and reflects activity subsequent to the GE Capital Reorganization on December 3, 2015. The equity basis earnings (losses) of subsidiaries are reflected in the captions "Equity in earnings (losses) of affiliates" and "Earnings (loss) from discontinued operations, net of taxes";

·	~~Non-Guarantor Subsidiaries~~ ~~- prepared on an aggregated basis excluding any elimination or consolidation adjustments and includes predominantly all non-cash adjustments for cash flows;~~

·	~~Consolidating Adjustments~~ ~~- adjusting entries necessary to consolidate the Parent Company Guarantor with the Subsidiary Issuer, the Subsidiary Guarantor and Non-Guarantor Subsidiaries; and~~

·	~~Consolidated~~ ~~- prepared on a consolidated basis~~.

~~GE 2016 FORM 10-K 208~~

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2016

Parent Non-
Company Subsidiary Subsidiary Guarantor Consolidating
(in millions) Guarantor Issuer Guarantor Subsidiaries Adjustments Consolidated

Revenues and other income
Sales of goods and services $ 40,315 $ - $ - $ 152,047 $ (81,971) $ 110,391
Other income 10,949 - - 63,363 (70,308) 4,005
Equity in earnings (loss) of affiliates 1,397 - 1,542 116,897 (119,836) -
GE Capital revenues from services - 897 1,419 12,994 (6,012) 9,297
   Total revenues and other income
52,661 897 2,961 345,301 (278,127) 123,693

Costs and expenses
Interest and other financial charges 3,505 831 2,567 5,429 (7,308) 5,025
Investment contracts, insurance losses and
   insurance annuity benefits
- - - 2,863 (67) 2,797
Other costs and expenses 41,972 - 143 165,382 (100,656) 106,842
   Total costs and expenses
45,478 831 2,711 173,674 (108,030) 114,663
Earnings (loss) from continuing
    operations before income taxes 7,183 66 250 171,627 (170,097) 9,030
Benefit (provision) for income taxes 2,539 (10) (105) (1,911) (49) 464
Earnings (loss) from continuing operations 9,723 56 145 169,717 (170,146) 9,494
Earnings (loss) from discontinued
    operations, net of taxes (891) - (1,927) 351 1,514 (954)
Net earnings (loss) 8,831 56 (1,782) 170,067 (168,632) 8,540
Less net earnings (loss) attributable to
    noncontrolling interests - - - (149) (142) (291)
Net earnings (loss) attributable to
   the Company 8,831 56 (1,782) 170,216 (168,490) 8,831
Other comprehensive income (2,069) (12) 1,126 (3,393) 2,279 (2,069)
Comprehensive income (loss) attributable
   to the Company $ 6,762 $ 44 $ (657) $ 166,823 $ (166,211) $ 6,762

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2015

Parent Non-
Company Subsidiary Subsidiary Guarantor Consolidating
(in millions) Guarantor Issuer Guarantor Subsidiaries Adjustments Consolidated

Revenues and other income
Sales of goods and services $ 43,945 $ - $ - $ 139,158 $ (77,294) $ 105,809
Other income 2,725 - - 31,146 (31,644) 2,227
Equity in earnings (loss) of affiliates 1,815 - 437 389,796 (392,048) -
GE Capital revenues from services - 250 (460) 36,909 (27,349) 9,350
   Total revenues and other income
48,485 250 (23) 597,009 (528,335) 117,386
4
Costs and expenses
Interest and other financial charges 3,127 232 284 9,037 (9,216) 3,463
Investment contracts, insurance losses and
   insurance annuity benefits
- - - 2,748 (143) 2,605
Other costs and expenses 45,308 - 3 160,472 (102,651) 103,132
   Total costs and expenses
48,435 232 287 172,257 (112,011) 109,200
Earnings (loss) from continuing
    operations before income taxes 50 18 (310) 424,752 (416,324) 8,186
Benefit (provision) for income taxes 1,314 (2) (9) (11,426) 3,639 (6,485)
Earnings (loss) from continuing operations 1,364 15 (319) 413,326 (412,686) 1,700
Earnings (loss) from discontinued
    operations, net of taxes (7,490) - 483 (738) 250 (7,495)
Net earnings (loss) (6,126) 15 164 412,588 (412,436) (5,795)
Less net earnings (loss) attributable to
    noncontrolling interests - - - 249 82 332
Net earnings (loss) attributable to
   the Company (6,126) 15 164 412,339 (412,518) (6,126)
Other comprehensive income (loss) 1,644 12 1,377 (4,843) 3,454 1,644
Comprehensive income (loss) attributable
  to the Company $ (4,483) $ 27 $ 1,542 $ 407,496 $ (409,065) $ (4,483)

~~GE 2016 FORM 10-K 209~~

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2014

Parent Non-
Company Subsidiary Subsidiary Guarantor Consolidating
(in millions) Guarantor Issuer Guarantor Subsidiaries Adjustments Consolidated

Revenues and other income
Sales of goods and services $ 44,511 $ - $ - $ 137,034 $ (74,786) $ 106,758
Other income 1,722 - - 22,416 (23,360) 778
Equity in earnings (loss) of affiliates 10,510 - - 53,841 (64,351) -
GE Capital revenues from services - - - 50,749 (41,101) 9,648
   Total revenues and other income
56,743 - - 264,040 (203,598) 117,184

Costs and expenses
Interest and other financial charges 3,014 - - 11,395 (11,686) 2,723
Investment contracts, insurance losses and
   insurance annuity benefits
- - - 2,678 (148) 2,530
Other costs and expenses 46,128 - - 155,133 (99,593) 101,668
   Total costs and expenses
49,142 - - 169,206 (111,427) 106,921
Earnings (loss) from continuing
    operations before income taxes 7,601 - - 94,833 (92,171) 10,263
Benefit (provision) for income taxes 1,777 - - (4,181) 1,631 (773)
Earnings (loss) from continuing operations 9,378 - - 90,652 (90,540) 9,490
Earnings (loss) from discontinued
    operations, net of taxes 5,855 - - (27) 27 5,855
Net earnings (loss) 15,233 - - 90,625 (90,513) 15,345
Less net earnings (loss) attributable to
    noncontrolling interests - - - 2,893 (2,781) 112
Net earnings (loss) attributable to
   the Company 15,233 - - 87,733 (87,733) 15,233
Other comprehensive income (loss) (9,053) - - (2,787) 2,787 (9,053)
Comprehensive income (loss) attributable
  to the Company $ 6,180 $ - $ - $ 84,946 $ (84,946) $ 6,180

~~GE 2016 FORM 10-K 210~~

CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2016

Parent Non-
Company Subsidiary Subsidiary Guarantor Consolidating
(In millions) Guarantor Issuer Guarantor Subsidiaries Adjustments Consolidated

Assets
Cash and equivalents $ 2,558 $ - $ 3 $ 46,994 $ (1,426) $ 48,129
Investment securities 1 - - 47,394 (3,082) 44,313
Receivables - net 63,620 17,157 30,470 79,401 (148,385) 42,263
Inventories 4,654 - - 21,076 (3,377) 22,354
Property, plant and equipment - net 5,768 - - 46,366 (1,615) 50,518
Investment in subsidiaries(a) 272,685 - 80,481 492,674 (845,840) -
Goodwill and intangible assets 8,128 - - 42,074 36,673 86,875
All other assets 14,692 44 39 201,276 (160,134) 55,917
Assets of discontinued operations - - - - 14,815 14,815
Total assets $ 372,107 $ 17,202 $ 110,992 $ 977,255 $ (1,112,372) $ 365,183

Liabilities and equity
Short-term borrowings $ 167,089 $ 1 $ 46,432 $ 25,919 $ (208,727) $ 30,714
Accounts payable 5,412 - - 47,366 (38,343) 14,435
Other current liabilities 11,072 33 117 25,095 114 36,431
Long-term and non-recourse borrowings 68,983 16,486 34,389 68,912 (83,273) 105,496
All other liabilities 43,722 511 481 58,376 (9,656) 93,434
Liabilities of discontinued operations - - - - 4,158 4,158
Total Liabilities 296,279 17,030 81,419 225,667 (335,727) 284,668

Redeemable noncontrolling interests - - - 2,223 802 3,025

GE shareowners' equity 75,828 171 29,573 747,719 (777,463) 75,828
Noncontrolling interests - - - 1,647 16 1,663
Total equity 75,828 171 29,573 749,366 (777,447) 77,491
Total liabilities, redeemable
noncontrolling interests and equity $ 372,107 $ 17,202 $ 110,992 $ 977,255 $ (1,112,372) $ 365,183

~~(a)~~

~~Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of $28.5 billion and net assets of discontinued operations of $6.0 billion.~~

~~GE 2016 FORM 10-K 211~~

CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2015

Parent Non-
Company Subsidiary Subsidiary Guarantor Consolidating
(In millions) Guarantor Issuer Guarantor Subsidiaries Adjustments Consolidated

Assets
Cash and equivalents $ 4,137 $ - $ - $ 86,955 $ (20,609) $ 70,483
Investment securities 14 - - 40,886 (8,927) 31,973
Receivables - net 88,696 33,232 69,306 75,909 (221,286) 45,856
Inventories 5,447 - - 19,762 (2,694) 22,515
Property, plant and equipment - net 6,540 - - 56,808 (9,253) 54,095
Investment in subsidiaries(a) 274,471 - 78,505 405,686 (758,662) -
Goodwill and intangible assets 7,793 - - 61,412 14,118 83,323
All other assets 15,732 11 915 247,611 (200,392) 63,876
Assets of discontinued operations - - - - 120,951 120,951
Total assets $ 402,828 $ 33,242 $ 148,725 $ 995,029 $ (1,086,754) $ 493,071

Liabilities and equity
Short-term borrowings $ 145,051 $ 16,204 $ 71,862 $ 60,601 $ (243,858) $ 49,860
Accounts payable 6,096 - - 37,636 (30,052) 13,680
Other current liabilities 14,482 - 17 34,903 (7,861) 41,540
Long-term and non-recourse borrowings 97,471 16,423 46,392 105,801 (118,345) 147,742
All other liabilities 41,455 488 224 57,996 (9,513) 90,651
Liabilities of discontinued operations - - - - 46,487 46,487
Total Liabilities 304,555 33,115 118,495 296,937 (363,141) 389,961

Redeemable noncontrolling interests - - - 2,888 84 2,972

GE shareowners' equity 98,274 127 30,230 693,589 (723,946) 98,274
Noncontrolling interests - - - 1,616 248 1,864
Total equity 98,274 127 30,230 695,204 (723,697) 100,138
Total liabilities, redeemable
noncontrolling interests and equity $ 402,828 $ 33,242 $ 148,725 $ 995,029 $ (1,086,754) $ 493,071

~~(a)~~

~~Included within the subsidiaries of the Subsidiary Guarantor are cash and cash equivalent balances of $40.1 billion and net assets of discontinued operations of $58.6 billion.~~

~~GE 2016 FORM 10-K 212~~

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2016

Parent Non-
Company Subsidiary Subsidiary Guarantor Consolidating
(In millions) Guarantor Issuer Guarantor Subsidiaries adjustments Consolidated

Cash flows – operating activities
Cash from (used for) operating activities -
   continuing operations $ (4,966) $ (10) $ (52) $ 162,918 $ (151,791) $ 6,099
Cash from (used for) operating activities -
   discontinued operations (891) - - (5,039) (413) (6,343)
Cash from (used for) operating activities (5,858) (10) (52) 157,880 (152,204) (244)

Cash flows – investing activities
Cash from (used for) investing activities –
   continuing operations 14,158 16,384 35,443 72,205 (75,577) 62,613
Cash from (used for) investing activities –
   discontinued operations - - - (13,412) - (13,412)
Cash from (used for) investing activities 14,158 16,384 35,443 58,794 (75,577) 49,202

Cash flows – financing activities
Cash from (used for) financing activities –
   continuing operations (9,879) (16,374) (35,388) (275,243) 246,964 (89,920)
Cash from (used for) financing activities –
   discontinued operations - - - 789 - 789
Cash from (used for) financing activities (9,879) (16,374) (35,388) (274,454) 246,964 (89,131)
Effect of currency exchange rate changes
   on cash and equivalents - - - (1,146) - (1,146)
Increase (decrease) in cash and equivalents (1,578) - 3 (58,927) 19,183 (41,319)
     Cash and equivalents at beginning of year 4,137 - - 107,351 (20,609) 90,879
Cash and equivalents at end of year 2,558 - 3 48,423 (1,426) 49,558
Less cash and equivalents of discontinued
     operations at end of year - - - 1,429 - 1,429
Cash and equivalents of continuing operations
   at end of year $ 2,558 $ - $ 3 $ 46,994 $ (1,426) $ 48,129

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2015

Parent Non-
Company Subsidiary Subsidiary Guarantor Consolidating
(In millions) Guarantor Issuer Guarantor Subsidiaries adjustments Consolidated

Cash flows – operating activities
Cash from (used for) operating activities -
   continuing operations $ 13,587 $ 68 $ 631 $ 433,479 $ (435,909) $ 11,856
Cash from (used for) operating activities -
   discontinued operations (7,490) - (30) 27,533 (11,979) 8,034
Cash from (used for) operating activities 6,097 68 601 461,013 (447,888) 19,891

Cash flows – investing activities
Cash from (used for) investing activities –
   continuing operations 7,106 (248) (601) (493,933) 549,289 61,613
Cash from (used for) investing activities –
   discontinued operations - - - 5,854 (7,979) (2,125)
Cash from (used for) investing activities 7,106 (248) (601) (488,079) 541,310 59,488

Cash flows – financing activities
Cash from (used for) financing activities –
   continuing operations (13,886) 180 - 67,063 (122,904) (69,547)
Cash from (used for) financing activities –
   discontinued operations - - - (37,582) 31,075 (6,507)
Cash from (used for) financing activities (13,886) 180 - 29,481 (91,829) (76,054)
Effect of currency exchange rate changes
   on cash and equivalents - - - (3,464) - (3,464)
Increase (decrease) in cash and equivalents (683) - - (1,049) 1,594 (138)
     Cash and equivalents at beginning of year 4,820 - - 108,400 (22,203) 91,017
Cash and equivalents at end of year 4,137 - - 107,351 (20,609) 90,879
Less cash and equivalents of discontinued
     operations at end of year - - - 20,395 - 20,395
Cash and equivalents of continuing operations
   at end of year $ 4,137 $ - $ - $ 86,955 $ (20,609) $ 70,483

~~GE 2016 FORM 10-K 213~~

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2014

Parent Non-
Company Subsidiary Subsidiary Guarantor Consolidating
(In millions) Guarantor Issuer Guarantor Subsidiaries adjustments Consolidated

Cash flows – operating activities
Cash from (used for) operating activities -
   continuing operations $ (2,483) $ - $ - $ 147,449 $ (128,933) $ 16,033
Cash from (used for) operating activities -
   discontinued operations 5,855 - - 5,794 27 11,676
Cash from (used for) operating activities 3,372 - - 153,243 (128,906) 27,709

Cash flows – investing activities
Cash from (used for) investing activities –
   continuing operations (1,410) - - (403,870) 424,509 19,229
Cash from (used for) investing activities –
   discontinued operations - - - (24,263) - (24,263)
Cash from (used for) investing activities (1,410) - - (428,133) 424,509 (5,034)

Cash flows – financing activities
Cash from (used for) financing activities –
   continuing operations (5,641) - - 272,150 (307,421) (40,912)
Cash from (used for) financing activities –
   discontinued operations - - - 23,956 - 23,956
Cash from (used for) financing activities (5,641) - - 296,106 (307,421) (16,956)
Effect of currency exchange rate changes
   on cash and equivalents - - - (3,492) - (3,492)
Increase (decrease) in cash and equivalents (3,679) - - 17,721 (11,818) 2,224
     Cash and equivalents at beginning of year 8,499 - - 90,678 (10,385) 88,792
Cash and equivalents at end of year 4,820 - - 108,400 (22,203) 91,017
Less cash and equivalents of discontinued
     operations at end of year - - - 20,991 - 20,991
Cash and equivalents of continuing operations
   at end of year $ 4,820 $ - $ - $ 87,408 $ (22,203) $ 70,025

~~GE 2016 FORM 10-K 214~~

~~NOTE 29. SUPPLEMENTAL INFORMATION~~

~~POSTRETIREMENT BENEFIT PLANS~~

As discussed in Note 12, we sponsor a number of pension plans which consist of the two principal pension plans for certain U.S. employees as well as other affiliate pension plans. In addition, we sponsor a number of postretirement health and life insurance benefit plans (retiree benefit plans).

~~The accounting requirements and concepts discussed in Note 12 Postretirement Benefit Plans are the same for other pension plans and principal retiree benefit plans and are consistently applied.~~

~~The following disclosures provide additional information with respect to our pension plans and principal retiree benefit plans.~~

~~Other pension plans~~ ~~in 2016 included 49 U.S. and non-U.S. pension plans with pension assets or obligations greater than $50 million.~~

~~Principal Retiree Benefit Plans~~ ~~provide health and life insurance benefits to eligible participants and these participants share in the cost of healthcare benefits.~~

COST OF BENEFIT PLANS

Other pension plans Principal retiree benefit plans
(In millions) 2016 2015 2014 2016 2015 2014

Service cost for benefits earned $ 462 $ 416 $ 403 $ 123 $ 145 $ 164
Prior service cost (credit) amortization 1 - 6 (164) (8) 353
Expected return on plan assets (1,034) (881) (789) (43) (48) (50)
Interest cost on benefit obligations 670 555 587 249 335 424
Net actuarial loss (gain) amortization 256 289 205 (50) (25) (150)
Curtailment loss (gain) 19 (6) - - (225) (a) 48
Benefit plans cost $ 374 $ 373 $ 412 $ 115 $ 174 $ 789

~~(a)Gain principally resulting from life insurance amendment.~~

~~ASSUMPTIONS USED IN BENEFIT CALCULATIONS~~

~~The accounting assumptions in the table below are those that are significant to the measurement of our benefit obligations.~~

ASSUMPTIONS USED TO MEASURE BENEFIT OBLIGATIONS

Other pension plans (weighted average) Principal retiree benefit plans
December 31 2016 2015 2014 2016 2015 2014

Discount rate 2.58 % 3.33 % 3.53 % 3.75 % 3.93 % 3.89 %
Compensation increases 3.48 3.32 3.60 3.80 3.80 4.10
Initial healthcare trend rate N/A N/A N/A 6.00 (a) 6.00 6.00

~~(a)For 2016, ultimately declining to 5% for 2030 and thereafter.~~

~~The healthcare trend assumptions for 2015 and 2016 apply to our pre-65 retiree medical plans. Our post-65 retiree plan has a fixed subsidy and therefore is not subject to healthcare inflation.~~

~~The discount rate used to measure the benefit obligation at the end of the year is also used to measure benefit cost in the following year. The assumptions used to measure benefit cost follow.~~

~~GE 2016 FORM 10-K 215~~

ASSUMPTIONS USED TO MEASURE BENEFIT COST

Other pension plans (weighted average) Principal retiree benefit plans
December 31 2016 2015 2014 2016 2015 2014

Discount rate 3.33 % 3.53 % 4.39 % 3.93 % (a) 3.89 % (a) 4.61 % (a)
Expected return on assets 6.36 6.95 6.92 7.00 7.00 7.00

~~(a)~~

~~Weighted average discount rates of 3.86%, 3.92% and 4.47% were used for determination of costs in 2016, 2015 and 2014, respectively.~~

BENEFIT OBLIGATIONS

Other pension plans Principal retiree benefit plans
(In millions) 2016 2015 2016 2015

Balance at January 1 $ 21,618 $ 15,589 $ 6,757 $ 10,703
Service cost for benefits earned 462 416 123 145
Interest cost on benefit obligations 670 555 249 335
Participant contributions 43 15 51 50
Plan amendments (54) (12) (7) (3,291) (a)
Actuarial loss (gain) 2,993 (b) (406) (b) (291) (c) (444) (b)
Benefits paid (842) (576) (603) (691)
Acquisitions (dispositions)/ other - net (98) 6,859 (d) 10 (50)
Exchange rate adjustments (2,249) (822) - -
Balance at December 31(e) $ 22,543 $ 21,618 $ 6,289 $ 6,757

~~(a)~~

~~Principally related to plan amendments affecting post-65 retiree health and retiree life insurance for certain production participants.~~

~~(b)~~

~~Primarily associated with discount rate changes.~~

~~(c)~~

~~Primarily associated with lower costs from new healthcare supplier contracts.~~

~~(d)~~

~~Substantially all related to Alstom acquisition.~~

~~(e)~~

~~The benefit obligation for retiree health plans was $4,366 million and $4,838 million at December 31, 2016 and 2015, respectively.~~

~~THE COMPOSITION OF OUR PLAN ASSETS~~

The fair value of other pension plans' and principal retiree benefit plans' investments is presented below. The inputs and valuation techniques used to measure the fair value of the assets are consistently applied and described in Note 1.

Other pension plans Principal retiree benefit plans
December 31 (in millions) 2016 2015 2016 2015

Equity securities
   U.S. equity securities
$ 666 $ 667 $ 187 $ 203
   Non-U.S. equity securities
6,337 6,323 152 162
Debt securities
   Fixed income and cash investment funds
6,049 6,258 30 84
   U.S. corporate
319 242 38 52
   Other debt securities
577 551 82 93
Private equities 627 703 61 75
Real estate 1,449 1,358 4 6
Other investments 1,067 1,266 21 20
Total plan assets $ 17,091 $ 17,368 $ 575 $ 695

Other Pension Plans assets valued using NAV for practical expedient amounted to $4,669 million and $4,213 million as of December 31, 2016 and 2015, respectively. The percentages of other pension plans assets valued using NAV by investment fund type for equity securities, fixed income and cash, and alternative investments were 7%, 4% and 16% as of December 31, 2016, respectively, and 6%, 3% and 15% as of December 31, 2015, respectively.

The practical expedient was not applied for investments with a fair value of $135 million and $169 million in 2016 and 2015, respectively and those investments were classified within Level 3. The remaining investments were substantially all considered Level 1 and 2.

~~GE 2016 FORM 10-K 216~~

Principal retiree benefit plan assets valued using NAV for practical expedient amounted to $133 million and $160 million as of December 31, 2016 and 2015. There were no Level 3 investments held in 2016 and 2015. The remaining investments were considered Level 1 or Level 2.

FAIR VALUE OF PLAN ASSETS

Other pension plans Principal retiree benefit plans
(In millions) 2016 2015 2016 2015

Balance at January 1 $ 17,368 $ 12,386 $ 695 $ 813
Actual gain on plan assets 1,743 381 22 22
Employer contributions 795 549 410 501
Participant contributions 43 15 51 50
Benefits paid (842) (576) (603) (691)
Acquisitions (dispositions) / other - net (81) 5,207 (a) - -
Exchange rate adjustments (1,935) (594) - -
Balance at December 31 $ 17,091 $ 17,368 $ 575 $ 695

~~(a)Substantially all related to Alstom acquisition.~~

ASSET ALLOCATION

Other pension plans Principal retiree
Principal pension plans (weighted average) benefit plans
2016 2016 2016 2016 2016 2016
Target Actual Target Actual Target Actual
December 31 allocation allocation allocation allocation allocation allocation

Equity securities 18 - 58 % 46 % 39 % 41 % 35 - 75 % 59 %
Debt securities (including cash equivalents) 11 - 61 33 30 41 11 - 46 26
Private equities 6 - 16 10 3 4 0 - 25 11
Real estate 3 - 13 7 9 8 0 - 12 1
Other investments 3 - 13 4 19 6 0 - 10 3

Plan fiduciaries of the GE Pension Plan set investment policies and strategies for the GE Pension Trust and oversee its investment allocation, which includes selecting investment managers and setting long-term strategic targets. The primary strategic investment objectives are balancing investment risk and return and monitoring the plan's liquidity position in order to meet the near-term benefit payment and other cash needs. Target allocation percentages are established at an asset class level by plan fiduciaries. Target allocation ranges are guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range.

According to statute, the aggregate holdings of all qualifying employer securities (e.g., GE common stock) and qualifying employer real property may not exceed 10% of the fair value of trust assets at the time of purchase. GE securities represented 2.1% and 3.7% of the GE Pension Trust assets at year end 2016 and 2015, respectively.

The GE Pension Plan has a broadly diversified portfolio of investments in equities, fixed income, private equities, real estate and hedge funds; these investments are both U.S. and non-U.S. in nature. As of December 31, 2016, no sector concentration of assets exceeded 15% of total GE Pension Plan assets.

ESTIMATED FUTURE BENEFIT PAYMENTS
2022 -
(In millions) 2017 2018 2019 2020 2021 2026

Principal pension plans $ 3,450 $ 3,595 $ 3,695 $ 3,790 $ 3,865 $ 20,455
Other pension plans 785 795 805 815 830 4,400
Principal retiree benefit plans 600 580 560 535 520 2,245

~~GE 2016 FORM 10-K 217~~

2016 COST OF POSTRETIREMENT BENEFIT PLANS AND CHANGES IN OTHER COMPREHENSIVE INCOME

Principal
Total Principal Other retiree
postretirement pension pension benefit
(In millions) benefit plans plans plans plans

Cost of postretirement benefit plans $ 4,112 $ 3,623 $ 374 $ 115
Changes in other comprehensive income
      Prior service cost (credit) – current year
(61) - (54) (7)
      Net actuarial loss (gain) – current year
4,038 2,317 1,989 (268)
      Net curtailment/gain (loss) (50) (31) (19) -
      Prior service credit (cost) amortization
(140) (303) (1) 164
      Net actuarial gain (loss) amortization
(2,655) (2,449) (256) 50
Total changes in other comprehensive income 1,132 (466) 1,659 (61)
Cost of postretirement benefit plans and
    changes in other comprehensive income
$ 5,244 $ 3,157 $ 2,033 $ 54

~~DERIVATIVES AND HEDGING~~

~~See Note 20 for the primary information related to our derivatives and hedging activity. This section provides certain supplemental information about this topic.~~

~~Changes in the fair value of derivatives are recorded in a separate component of equity (referred to below as Accumulated Other Comprehensive Income, or AOCI) and are~~ recorded in earnings in the current period ~~in which~~or a future period when the ~~hedged transaction occurs.~~ recording of the exposures occur.

The table below ~~summarizes this activity by hedging instrument.~~

~~GE 2016 FORM 10-K 218~~

FAIR VALUE OF DERIVATIVES

2016 2015
December 31 (in millions) Assets Liabilities Assets Liabilities

Derivatives accounted for as hedges
     Interest rate contracts
$ 3,106 $ 210 $ 4,132 $ 158
     Currency exchange contracts
402 624 1,109 1,383
     Other contracts
- - - -
3,508 834 5,241 1,541

Derivatives not accounted for as hedges
     Interest rate contracts
62 20 119 44
     Currency exchange contracts
1,778 4,011 1,715 4,048
     Other contracts
119 17 315 49
1,958 4,048 2,149 4,141

Gross derivatives recognized in statement of
  financial position
     Gross derivatives 5,467 4,883 7,391 5,681
     Gross accrued interest 768 (24) 1,001 (13)
6,234 4,859 8,392 5,668

Amounts offset in statement of financial position
     Netting adjustments(a) (3,097) (3,094) (4,326) (4,326)
     Cash collateral(b) (2,025) (1,355) (1,784) (642)
(5,121) (4,449) (6,110) (4,968)

Net derivatives recognized in statement of
  financial position
     Net derivatives 1,113 410 2,282 700

Amounts not offset in statement of
  financial position
     Securities held as collateral(c) (442) - (1,277) -

Net amount $ 671 $ 410 $ 1,005 $ 700

~~Derivatives are classified~~presents the effect of our derivative financial instruments in the ~~captions "All other assets" and "All other liabilities" and the related accrued interest is classified in "Other GE Capital receivables" and "All other liabilities" in our~~consolidated Statement of ~~Financial Position.~~

Earnings (Loss):

~~(a) The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts~~ ~~include~~ fair value adjustments related to our own and counterparty non-performance risk. At December 31, 2016 and December 31, 2015, the cumulative adjustment for non-performance risk was $(3) million and insignificant, respectively.



	2019															2018
(In millions)	Revenues			Cost of sales			Interest Expense			SG&A			Other Income			Revenues			Cost of sales			Interest Expense			SG&A		Other Income

Total amounts presented in the consolidated Statement of Earnings (Loss)	$	95,214		$	70,029		$	4,227		$	13,949		$	2,222		$	97,012		$	72,818		$	4,766		$	14,643	$	2,321

Total effect of cash flow hedges	$	5		$	(24	)	$	(37	)	$	(3	)	$	—		$	(53	)	$	(10	)	$	(39	)	$	—	$	—

Hedged items							$	(1,276	)													$	617
Derivatives designated as hedging instruments							1,229															(724		)
Total effect of fair value hedges							$	(48	)													$	(107	)

Interest rate contracts	$	(24	)	$	—		$	(50	)	$	—		$	—		$	(72	)	$	—		$	(4	)	$	—	$	—
Currency exchange contracts	180			(35		)	—			(6		)	(59		)	(1,303		)	(520		)	—			—		(47		)
Other	(2		)	—			195			—			1			(1		)	—			(95		)	—		(10		)
Total effect of derivatives not designated as hedges	$	154		$	(35	)	$	145		$	(6	)	$	(58	)	$	(1,375	)	$	(520	)	$	(99	)	$	—	$	(56	)

(b) Excluded excess cash collateral received and posted of $6 million and $177 million at December 31, 2016, respectively, and $48 million and $379 million at December 31, 2015, respectively.

~~(c) Excluded excess securities collateral received of zero and $107 million at December 31, 2016 and December 31, 2015, respectively.~~

CASH FLOW HEDGE ACTIVITY
Gain (loss) reclassified
Gain (loss) recognized in AOCI from AOCI into earnings
(In millions) 2016 2015 2016 2015

Interest rate contracts $ 6 $ (1) $ (79) $ (130)
Currency exchange contracts (281) (907) (282) (784)
Commodity contracts - (5) (2) (4)
Total(a) $ (274) $ (913) $ (364) $ (918)

~~(a)~~

~~Gain (loss) is recorded in "GE Capital revenues from services", "Interest and other financial charges", and "Other costs and expenses" in our Statement of Earnings when reclassified.~~

The total pre-tax amount in AOCI related to cash flow hedges of forecasted transactions was a $40 million gain at December 31, 2016. We expect to transfer $83 million loss to earnings as an expense in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions. In both the twelve months ended 2016 and 2015, we recognized insignificant gains and losses related to hedged forecasted transactions and firm commitments that did not occur by the end of the originally specified period. At December 31, 2016 and 2015, the maximum term of derivative instruments that hedge forecasted transactions was 16 years and 17 years, respectively. See Note 15 for additional information about reclassifications out of AOCI.

~~GE 2016 FORM 10-K 219~~

For cash flow hedges, the amount of ineffectiveness in the hedging relationship and amount of the changes in fair value of the derivatives that are not included in the measurement of ineffectiveness were insignificant for each reporting period.

COUNTERPARTY CREDIT ~~RISK~~

RISK. Fair values of our derivatives can change significantly from period to period based on, among other factors, market movements and changes in our positions. We manage counterparty credit risk (the risk that counterparties will default and not make payments to us according to the terms of our agreements) on an individual counterparty basis. Where we have agreed to netting of derivative exposures with a counterparty, we net our exposures with that counterparty and apply the value of collateral posted to us to determine the exposure. We actively monitor these net exposures against defined limits and take appropriate actions in response, including requiring additional collateral.

As discussed above, we have provisions in certain of our master agreements that require counterparties to post collateral (typically, cash or U.S. Treasury securities) when our receivables due from the counterparties, measured at current market value, exceeds specified limits. The fair value of such collateral was $2,466 million at December 31, 2016, of which $2,025 million was cash and $442 million was in the form of securities held by a custodian for our benefit. Under certain of these same agreements, we post collateral to our counterparties for our derivative obligations, the fair value of which was $1,355 million at December 31, 2016. At December 31, 2016, our exposure Our exposures to counterparties (including accrued interest), net of collateral we ~~hold,~~held, was ~~$496 million. This excludes~~$368 million and $95 million at December 31, 2019 and 2018, respectively. Counterparties' exposures ~~related~~ to ~~embedded derivatives.~~

Additionally, our master agreements typically contain mutual downgrade provisions that provide the ability of each party to require termination if the long-term credit rating of the counterparty were to fall below A-/A3 or other ratings levels agreed upon with the counterparty. In certain of these master agreements, each party also has the ability to require termination if the short-term rating of the counterparty were to fall below A-1/P-1. Our master agreements also typically contain provisions that provide termination rights upon the occurrence of certain other events, such as a bankruptcy or events of default by one of the parties. If an agreement was terminated under any of these circumstances, the termination amount payable would be determined on a net basis and could also take into account any collateral posted. The net amount of our derivative liability ~~after consideration~~(including accrued interest), net of collateral posted by us, was $159 million and ~~outstanding interest payments was $385~~$571 million at December 31, ~~2016. This excludes~~2019 and 2018, respectively.

NOTE 22. VARIABLE INTEREST ENTITIES

In addition to the 3 VIEs detailed in Note 4, we have other consolidated VIEs with assets of $2,663 million and $2,321 million, and liabilities of $1,137 million and $1,611 million at December 31 2019 and 2018, respectively. The increase in consolidated VIE assets is primarily due to the formation of the aeroderivative JV described in Note 2. These entities have no features that could expose us to losses that would significantly exceed the difference between the consolidated assets and liabilities. Substantially all the assets of our consolidated VIEs at December 31, 2019 can only be used to settle the liabilities of those VIEs.

Our investments in unconsolidated VIEs were $1,937 million and $2,346 million, at December 31, 2019 and 2018, respectively. These investments are primarily owned by GE Capital businesses, $621 million and $1,670 million of which were owned by EFS, comprised of equity method investments, and $896 million and 0 of which were owned by our run-off insurance operations, primarily comprising investment securities, at December 31, 2019 and 2018, respectively. The increase in investments in unconsolidated VIEs in our run-off insurance operations reflects implementation of our revised reinvestment plan which incorporates the introduction of strategic initiatives to invest in higher-yielding asset classes. Our maximum exposure to loss in respect of unconsolidated VIEs is increased by our commitments to make additional investments in these entities described in Note 23.

GE2019 FORM 10-K 104



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 23. COMMITMENTS, GUARANTEES, PRODUCT WARRANTIES AND OTHER LOSS CONTINGENCIES

COMMITMENTS. The GECAS business within our Capital segment has placed multiple-year orders for various Boeing, Airbus and other aircraft manufacturers with list prices approximating $36,313 million, excluding pre-delivery payments made in advance, (including 366 new aircraft with delivery dates of 16% in 2020, 19% in 2021 and 65% in 2022 through 2026) and secondary orders with airlines for used aircraft of approximately $2,419 million (including 55 used aircraft with delivery dates of 71% in 2020, 20% in 2021 and 9% in 2022) at December 31, 2019. When we purchase aircraft, it is at a contractual price, which is usually less than the aircraft manufacturer’s list price. As of December 31, 2019, we have made $2,934 million of pre-delivery payments to aircraft manufacturers.

GE Capital had total investment commitments of $2,648 million at December 31, 2019. The commitments primarily comprise project financing investments in thermal and wind energy projects of $1,225 million and investments by our run-off insurance operations in investment securities and other assets of $1,394 million, included within these commitments are obligations to make additional investments in unconsolidated VIEs of $217 million and $996 million, respectively. See Note 22 for further information.

As of December 31, 2019, in our Aviation segment, we have committed to provide financing assistance of $2,269 million of future customer acquisitions of aircraft equipped with our engines.

GUARANTEES. At December 31, 2019, we were committed under the following guarantee arrangements:

Credit Support. At December 31, 2019, we have provided $1,565 million of credit support on behalf of certain customers or associated companies, predominantly joint ventures and partnerships, using arrangements such as standby letters of credit and performance guarantees. The liability for such credit support was $35 million at December 31, 2019.

Indemnification Agreements – Continuing Operations. At December 31, 2019, we have $1,611 million of other indemnification commitments, including representations and warranties in sales of businesses or assets, for which we recorded a liability of $192 million.

Indemnification Agreements – Discontinued Operations. At December 31, 2019, we have provided specific indemnities to buyers of GE Capital’s assets that, in the aggregate, represent a maximum potential claim of $1,032 million with the related reserves of $142 million, which incorporates our evaluation of risk and the likelihood of making payments under the indemnities. The recognized liabilities represent the estimated fair value of the indemnities when issued as adjusted for any subsequent probable and estimable losses. Approximately 44% of these exposures are expected to be resolved within the next year, while substantially all indemnifications are expected to be resolved within the next ten years.

PRODUCT WARRANTIES. We provide for estimated product warranty expenses when we sell the related products. Because warranty estimates are forecasts that are based on the best available information, mostly historical claims experience, claims costs may differ from amounts provided. An analysis of changes in the liability for product warranties follows.



(In millions)	2019			2018			2017

Balance at January 1	$	2,192		$	2,103		$	1,743
Current-year provisions	713			945			929
Expenditures	(715		)	(788		)	(708		)
Other changes	(26		)	(69		)	139
Balance at December 31	$	2,165		$	2,192		$	2,103

GE2019 FORM 10-K 105



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LEGAL MATTERS. In the normal course of our business, we are involved from time to time in various arbitrations, class actions, commercial litigation, investigations and other legal, regulatory or governmental actions, including the significant matters described below that could have a material impact on our results of operations. In many proceedings, including the specific matters described below, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the size or range of the possible loss, and accruals for legal matters are not recorded until a loss for a particular matter is considered probable and reasonably estimable. Given the nature of legal matters and the complexities involved, it is often difficult to predict and determine a meaningful estimate of loss or range of loss until we know, among other factors, the particular claims involved, the likelihood of success of our defenses to those claims, the damages or other relief sought, how discovery or other procedural considerations will affect the outcome, the settlement posture of other parties and other factors that may have a material effect on the outcome. For these matters, unless otherwise specified, we do not believe it is possible to provide a meaningful estimate of loss at this time. Moreover, it is not uncommon for legal matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated.

WMC.During the fourth quarter of 2007, we completed the sale of WMC, our U.S. mortgage business. WMC substantially discontinued all new loan originations by the second quarter of 2007, and was never a loan servicer. In connection with the sale, WMC retained certain representation and warranty obligations related to ~~embedded derivatives.~~loans sold to third parties prior to the disposal of the business and contractual obligations to repurchase previously sold loans that had an early payment default. All claims received by WMC for early payment default have either been resolved or are no longer being pursued. The remaining claims that were active during 2019 were brought by securitization trustees or administrators seeking recovery from WMC for alleged breaches of representations and warranties on mortgage loans that serve as collateral for residential mortgage-backed securities (RMBS). These claims were resolved as part of the Chapter 11 bankruptcy case described below.

In January 2019, we announced an agreement in principle with the United States to settle the investigation by the U.S. Department of Justice (DOJ) regarding potential violations of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) by WMC and GE Capital, and in April 2019, the parties entered into a definitive settlement agreement. Under the agreement, which concludes this investigation, GE, without admitting liability or wrongdoing, paid the United States a civil penalty of $1,500 million.

In April 2019, WMC commenced a case under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. WMC subsequently filed a Chapter 11 plan seeking an efficient and orderly resolution of all claims, demands, rights, and/or liabilities to be asserted by or against WMC as the debtor. GE Capital provided approximately $14 million of debtor-in-possession financing to fund administrative expenses associated with the Chapter 11 proceeding. In August 2019, we reached a settlement with WMC to resolve potential claims that WMC may have had against certain GE entities. This settlement was incorporated into and approved as part of the Chapter 11 plan that the Bankruptcy Court approved in November 2019. The Chapter 11 plan also incorporated the resolution of the claims at issue in the previously reported lawsuit that the TMI Trust Company (TMI), as successor to Law Debenture Trust Company of New York, brought against WMC in the United States District Court for the District of Connecticut with respect to approximately $800 million of mortgage loans. The Chapter 11 plan became effective in December 2019, and GE Capital’s membership interests in WMC were extinguished pursuant to the plan. In total, we paid approximately $207 million to WMC in connection with the settlement of potential claims that WMC may have had against us, as discussed above. As of December 31, 2019, we had no further liabilities to WMC. As a condition to the settlement agreement described above, GE Capital provided WMC $39.5 million of exit financing that is secured by other remaining assets of WMC.

Alstom legacy legal matters. On November 2, 2015, we acquired the Thermal, Renewables and Grid businesses from Alstom. Prior to the acquisition, the seller was the subject of 2 significant cases involving anti-competitive activities and improper payments: (1) in January 2007, Alstom was fined €65 million by the European Commission for participating in a gas insulated switchgear cartel that operated from 1988 to 2004 (that fine was later reduced to €59 million), and (2) in December 2014, Alstom pled guilty in the United States to multiple violations of the Foreign Corrupt Practices Act and paid a criminal penalty of $772 million. As part of GE’s accounting for the acquisition, we established a reserve amounting to $858 million for legal and compliance matters related to the legacy business practices that were the subject of these and related cases in various jurisdictions, including the previously reported legal proceedings in Israel and Slovenia that are described below. The reserve balance was $875 million and $889 million at December 31, 2019 and 2018, respectively.

Regardless of jurisdiction, the allegations relate to claimed anti-competitive conduct or improper payments in the pre-acquisition period as the source of legal violations and/or damages. Given the significant litigation and compliance activity related to these matters and our ongoing efforts to resolve them, it is difficult to assess whether the disbursements will ultimately be consistent with the reserve established. The estimation of this reserve involved significant judgment and may not reflect the full range of uncertainties and unpredictable outcomes inherent in litigation and investigations of this nature, and at this time we are unable to develop a meaningful estimate of the range of reasonably possible additional losses beyond the amount of this reserve. Damages sought may include disgorgement of profits on the underlying business transactions, fines and/or penalties, interest, or other forms of resolution. Factors that can affect the ultimate amount of losses associated with these and related matters include the way cooperation is assessed and valued, prosecutorial discretion in the determination of damages, formulas for determining fines and penalties, the duration and amount of legal and investigative resources applied, political and social influences within each jurisdiction, and tax consequences of any settlements or previous deductions, among other considerations. Actual losses arising from claims in these and related matters could exceed the amount provided.

GE2019 FORM 10-K 106



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In September 2013, the Israeli Antitrust Authority issued a decision whereby Alstom, Siemens AG and ABB Ltd. were held liable for an alleged anti-competitive arrangement in the gas-insulated switchgears market in Israel. While there was no fine in connection with that decision, claimants brought civil actions in 2013 seeking damages of approximately $950 million and $600 million, respectively, related to the alleged conduct underlying the decision that are pending before the Central District Court in Israel. The parties have been working to finalize a settlement, which is subject to court approval, and we anticipate a decision from the court in the first half of 2020.

In connection with alleged improper payments by Alstom relating to contracts won in 2006 and 2008 for work on a state-owned power plant in Šoštanj, Slovenia, the power plant owner in January 2017 filed an arbitration claim for damages of approximately $430 million before the International Chamber of Commerce Court of Arbitration in Vienna, Austria. In February 2017, a government investigation in Slovenia of the same underlying conduct proceeded to an investigative phase overseen by a judge of the Celje District Court.

Shareholder and related lawsuits. Since November 2017, several putative shareholder class actions under the federal securities laws have been filed against GE and certain affiliated individuals and consolidated into a single action currently pending in the U.S. District Court for the Southern District of New York (the Hachem case). In October 2019, the lead plaintiff filed a fifth amended consolidated class action complaint naming as defendants GE and current and former GE executive officers. It alleges violations of Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934 related to insurance reserves and accounting for long-term service agreements and seeks damages on behalf of shareholders who acquired GE stock between February 27, 2013 and January 23, 2018. GE filed a motion to dismiss in December 2019.

Since February 2018, multiple shareholder derivative lawsuits have also been filed against current and former GE executive officers and members of GE’s Board of Directors and GE (as nominal defendant). NaN shareholder derivative lawsuits are currently pending: the Bennett case, which was filed in Massachusetts state court, and the Cuker case, which was filed in New York state court. These lawsuits have alleged violations of securities laws, breaches of fiduciary duties, unjust enrichment, waste of corporate assets, abuse of control and gross mismanagement, although the specific matters underlying the allegations in the lawsuits have varied. The allegations in the Bennett case relate to substantially the same facts as those underlying the securities class action described above, and the allegations in the Cuker case relate to alleged corruption in China. The Bennett complaint also includes a claim for professional negligence and accounting malpractice against GE’s auditor, KPMG. The plaintiffs seek unspecified damages and improvements in GE’s corporate governance and internal procedures. The Bennett case has been stayed pending final resolution of another shareholder derivative lawsuit (the Gammel case) that was previously dismissed. In August 2019, the Cuker plaintiffs filed an amended complaint. In September 2019, GE filed a motion to dismiss the amended complaint.

In June 2018, a lawsuit (the Bezio case) was filed in New York state court derivatively on behalf of participants in GE’s 401(k) plan (the GE Retirement Savings Plan (RSP)), and alternatively as a class action on behalf of shareholders who acquired GE stock between February 26, 2013 and January 24, 2018, alleging violations of Section 11 of the Securities Act of 1933 based on alleged misstatements and omissions related to insurance reserves and performance of GE’s business segments in a GE RSP registration statement and documents incorporated therein by reference. In November 2018, the plaintiffs filed an amended derivative complaint naming as defendants GE, former GE executive officers and Fidelity Management Trust Company, as trustee for the GE RSP. In January 2019, GE filed a motion to dismiss, and in November 2019, the court dismissed the remaining claims and the plaintiffs filed a notice of appeal. In December 2019, the plaintiffs filed a second amended derivative complaint, and in January 2020, GE filed a motion to dismiss.

In July 2018, a putative class action (the Mahar case) was filed in New York state court naming as defendants GE, former GE executive officers, a former member of GE’s Board of Directors and KPMG. It alleged violations of Sections 11, 12 and 15 of the Securities Act of 1933 based on alleged misstatements related to insurance reserves and performance of GE’s business segments in GE Stock Direct Plan registration statements and documents incorporated therein by reference and seeks damages on behalf of shareholders who acquired GE stock between July 20, 2015 and July 19, 2018 through the GE Stock Direct Plan. In February 2019, this case was dismissed. In March 2019, plaintiffs filed an amended derivative complaint naming the same defendants. In April 2019, GE filed a motion to dismiss the amended complaint. In October 2019, the court denied GE's motion to dismiss and stayed the case pending the outcome of the Hachem case. In November 2019, the plaintiffs moved to re-argue to challenge the stay, and GE cross-moved to re-argue the denial of the motion to dismiss and filed a notice of appeal.

In October 2018, a putative class action (the Houston case) was filed in New York state court naming as defendants GE, certain GE subsidiaries and current and former GE executive officers and employees. It alleges violations of Sections 11, 12 and 15 of the Securities Act of 1933 and seeks damages on behalf of purchasers of senior notes issued in 2016 and rescission of transactions involving those notes. This case has been stayed pending resolution of the motion to dismiss the Hachem case.

In December 2018, a putative class action (the Varga case) was filed in the U.S. District Court for the Northern District of New York naming GE and a former GE executive officer as defendants in connection with the oversight of the GE RSP. It alleges that the defendants breached fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) by failing to advise GE RSP participants that GE Capital insurance subsidiaries were allegedly under-reserved and continued to retain a GE stock fund as an investment option in the GE RSP. The plaintiffs seek unspecified damages on behalf of a class of GE RSP participants and beneficiaries from January 1, 2010 through January 19, 2018 or later. In April 2019, GE filed a motion to dismiss.

GE2019 FORM 10-K 107



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In February 2019, 2 putative class actions (the Birnbaum case and the Sheet Metal Workers Local 17 Trust Funds case) were filed in the U.S. District Court for the Southern District of New York naming as defendants GE and current and former GE executive officers. In April 2019, the court issued an order consolidating these two actions. In June 2019, the lead plaintiff filed an amended consolidated complaint. It alleges violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 based on alleged misstatements regarding GE's H-class turbines and goodwill related to GE's Power business. The lawsuit seeks damages on behalf of shareholders who acquired GE stock between December 4, 2017 and December 6, 2018. In August 2019, the lead plaintiff filed a second amended complaint. In September 2019, GE filed a motion to dismiss the second amended complaint.

In February 2019, a securities action (the Touchstone case) was filed in the U.S. District Court for the Southern District of New York naming as defendants GE and current and former GE executive officers. It alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Section 1707.43 of the Ohio Securities Act and common law fraud based on alleged misstatements regarding insurance reserves, GE Power’s revenue recognition practices related to long term service agreements, GE’s acquisition of Alstom, and the goodwill recognized in connection with that transaction. The lawsuit seeks damages on behalf of 6 institutional investors who purchased GE common stock between August 1, 2014 and October 30, 2018 and rescission of those purchases. This case has been stayed pending resolution of the motion to dismiss the Hachem case.

As previously reported by Baker Hughes, in March 2019, 2 derivative lawsuits were filed in the Delaware Court of Chancery naming as defendants GE, directors of Baker Hughes (including former members of GE’s Board of Directors and current and former GE executive officers) and Baker Hughes (as nominal defendant), and the court issued an order consolidating these two actions (the Schippnick case). The complaint as amended in May 2019 alleges, among other things, that GE and the Baker Hughes directors breached their fiduciary duties and that GE was unjustly enriched by entering into transactions and agreements related to GE's sales of approximately 12% of its ownership interest in Baker Hughes in November 2018. The complaint seeks declaratory relief, disgorgement of profits, an award of damages, pre- and post-judgment interest and attorneys’ fees and costs. In May 2019, the plaintiffs voluntarily dismissed their claims against the directors who were members of the Baker Hughes Conflicts Committee and a former Baker Hughes director. In October 2019, the Court denied the remaining defendants’ motions to dismiss, except with respect to the unjust enrichment claim against GE, which has been dismissed. In November 2019, the defendants filed their answer to the complaint, and a special litigation committee of the Baker Hughes Board of Directors moved for an order staying all proceedings in this action pending completion of the committee's investigation of the allegations and claims asserted in the complaint. In December 2019, the court granted a six-month stay.

In August 2019, a putative class action (the Tri-State case) was filed in the Delaware Court of Chancery naming as defendants GE and the former Board of Directors of Baker Hughes Incorporated (BHI). It alleges fraud, aiding and abetting breaches of fiduciary duty, and aiding and abetting breaches of duty of disclosure by GE based on allegations regarding financial statements that GE provided the former BHI board, management and shareholders in connection with BHI’s merger with GE’s Oil and Gas Business in July 2017. The plaintiff seeks damages on behalf of BHI shareholders during the period between October 7, 2016 and July 5, 2017. In October 2019, the City of Providence filed a complaint containing allegations substantially similar to those in the Tri-State complaint. The cases were consolidated in November 2019, and in December 2019, the plaintiffs filed an amended consolidated complaint which is similar to the prior complaints but does not include fraud claims against GE.

These cases are at an early stage; we believe we have defenses to the claims and are responding accordingly.

SEC investigation.In late November 2017, staff of the Boston office of the U.S. Securities & Exchange Commission (SEC) notified us that they are conducting an investigation of GE’s revenue recognition practices and internal controls over financial reporting related to long-term service agreements. Following our investor update in January 2018 about the increase in future policy benefit reserves for GE Capital’s run-off insurance operations, the SEC staff expanded the scope of its investigation to encompass the reserve increase and the process leading to the reserve increase. Following our announcement in October 2018 about the expected non-cash goodwill impairment charge related to GE’s Power business, the SEC expanded the scope of its investigation to include that charge as well. We are providing documents and other information requested by the SEC staff, and we are cooperating with the ongoing investigation. Staff from the DOJ are also investigating these matters, and we are providing them with requested documents and information as well.

Other GE Retirement Savings Plan class actions.NaN putative class action lawsuits have been filed regarding the oversight of the GE RSP, and those class actions have been consolidated into a single action in the U.S. District Court for the District of Massachusetts. The consolidated complaint names as defendants GE, GE Asset Management, current and former GE and GE Asset Management executive officers and employees who served on fiduciary bodies responsible for aspects of the GE RSP during the class period. Like similar lawsuits that have been brought against other companies in recent years, this action alleges that the defendants breached their fiduciary duties under ERISA in their oversight of the GE RSP, principally by retaining 5 proprietary funds that plaintiffs allege were underperforming as investment options for plan participants and by charging higher management fees than some alternative funds. The plaintiffs seek unspecified damages on behalf of a class of GE RSP participants and beneficiaries from September 26, 2011 through the date of any judgment. In August and December 2018, the court issued orders dismissing 1 count of the complaint and denying GE's motion to dismiss the remaining counts. We believe we have defenses to the claims and are responding accordingly.

GE2019 FORM 10-K 108



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Bank BPH. As previously reported, GE Capital’s subsidiary Bank BPH, along with other Polish banks, has been subject to ongoing litigation in Poland related to its portfolio of floating rate residential mortgages, with cases brought by individual borrowers seeking relief related to their foreign currency-denominated mortgages in various courts throughout Poland. Approximately 86% of the Bank BPH portfolio is indexed to or denominated in foreign currencies (primarily Swiss francs), and the total portfolio had a carrying value of $2.5 billion at December 31, 2019. In October 2019, the European Court of Justice (ECJ) issued a decision about the approach to remedy in a case involving another Polish bank’s foreign currency loans, and in January 2020, a pending case involving a Bank BPH loan was referred to the ECJ. While there remains significant uncertainty as to how the prior ECJ decision, or a future decision on the Bank BPH case, will influence the Polish courts as they consider individual cases, we are observing an increase in the number of lawsuits brought against Bank BPH and other banks in Poland with similar portfolios that may continue in future reporting periods. We also believe there is a potential for unifying rules of decision to emerge regarding both the finding of liability and approach to remedy that could change our estimate of the potential effects of borrower litigation. Future adverse developments in the potential for legislative relief or in litigation across the Polish banking industry as a result of ECJ decisions or otherwise could result in losses related to these loans in future reporting periods.

ENVIRONMENTAL, HEALTH AND SAFETY MATTERS.Our operations, like operations of other companies engaged in similar businesses, involve the use, disposal and cleanup of substances regulated under environmental protection laws and nuclear decommissioning regulations. Additionally, like many other industrial companies, we and our subsidiaries are defendants in various lawsuits related to alleged worker exposure to asbestos or other hazardous materials. Liabilities for environmental remediation, nuclear decommissioning and worker exposure claims exclude possible insurance recoveries. It is reasonably possible that our exposure will exceed amounts accrued. However, due to uncertainties about the status of laws, regulations, technology and information related to individual sites and lawsuits, such amounts are not reasonably estimable. Total reserves related to environmental remediation, nuclear decommissioning and worker exposure claims were $2,484 million and $2,172 million at December 31, 2019 and 2018, respectively.

As previously reported, in 2000, GE and the Environmental Protection Agency (EPA) entered into a consent decree relating to PCB cleanup of the Housatonic River in Massachusetts. Following EPA’s release in September 2015 of an intended final remediation decision, GE and EPA engaged in mediation and the first step of the dispute resolution process contemplated by the consent decree. In October 2016, the EPA issued its final decision pursuant to the consent decree, which GE and several other interested parties appealed to EPA’s Environmental Appeals Board (EAB). The EAB issued its decision in January 2018, affirming parts of EPA’s decision and granting relief to GE on certain significant elements of its challenge. The EAB remanded the decision back to EPA to address those elements and reissue a revised final remedy, and EPA convened a mediation process with GE and interested stakeholders. In February 2020, EPA announced an agreement between EPA and many of the mediation stakeholders, including GE, concerning a revised Housatonic River remedy. EPA will next propose this remedy for public comment and then finalize a revised remedy. As of December 31, 2019, and based on its assessment of current facts and circumstances and its defenses, GE believes that it has recorded adequate reserves to cover future obligations associated with the proposed final remedy.

Expenditures for site remediation, nuclear decommissioning and worker exposure claims amounted to approximately $236 million, $214 million, and $227 million for the years ended December 31, 2019, 2018, and 2017, respectively. We presently expect that such expenditures will be approximately $350 million and $250 million in 2020 and 2021, respectively.

GE2019 FORM 10-K 109



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 24. CASH FLOWS INFORMATION

Changes in operating assets and liabilities are net of acquisitions and dispositions of principal businesses.

Amounts reported in the Proceeds from sales of discontinued operations and Proceeds from principal business dispositions captions in our consolidated Statement of Cash Flows are net of cash transferred and included certain deal-related costs. Amounts reported in the Net cash from (payments for) principal businesses purchased caption are net of cash acquired and included certain deal-related costs and debt assumed and immediately repaid in acquisitions.



GE For the years ended December 31 (In millions)	2019			2018			2017

Increase (decrease) in employee benefit liabilities(a)	$	227		$	587		$	(68	)
Other gains on investing activities	(723		)	(378		)	(138		)
Restructuring and other charges(b)	1,144			2,244			2,781
Restructuring and other cash expenditures	(1,157		)	(1,474		)	(1,484		)
Increase (decrease) in equipment project accruals	(314		)	(939		)	(212		)
Baker Hughes Class B dividends received	282			494			251
Other(c)	613			142			374
All other operating activities	$	72		$	676		$	1,504

Derivative settlements (net)	$	(14	)	$	(947	)	$	(1,016	)
Investments in intangible assets (net)	(30		)	(496		)	(321		)
Other investments (net)(d)	791			726			(1,404		)
Sales of retained ownership interests in Wabtec	3,383			—			—
Other(e)	(455		)	77			(6,698		)
All other investing activities	$	3,675		$	(640	)	$	(9,439	)

Disposition of Baker Hughes noncontrolling interests	$	—		$	4,373		$	308
Acquisition of noncontrolling interests(f)	(28		)	(3,345		)	(135		)
Other(g)	(284		)	79			117
All other financing activities	$	(312	)	$	1,107		$	290

Open market purchases under share repurchase program	$	(10	)	$	(245	)	$	(3,506	)
Other purchases	(47		)	(23		)	(67		)
Dispositions	84			250			1,021
Net dispositions (purchases) of GE shares for treasury	$	29		$	(17	)	$	(2,550	)


(a)	Included non-cash adjustments for stock-based compensation expenses.


(b)	Excluded non-cash adjustments reflected as Depreciation and amortization of property, plant and equipment or Amortization of intangible assets in our consolidated Statement of Cash Flows.


(c)	Included other adjustments to net income, such as write-downs of assets and the impacts of acquisition accounting and changes in other assets and other liabilities classified as operating activities, such as the timing of payments of customer allowances.


(d)	Included the provision of a promissory note to Baker Hughes in 2017 and subsequent principal collections in 2018 and 2019. See Note 2.


(e)	Included net activity related to settlements between our continuing operations and discontinued operations. In 2017, this was primarily driven by funding in order to complete the Baker Hughes acquisition.


(f)	Primarily included the acquisition of Alstom's interest in the grid technology, renewable energy, and global nuclear and French steam power joint ventures for $(3,105) million in the fourth quarter of 2018. See Note 16.


(g)	Primarily included debt tender expenditures of $(255) million incurred to purchase GE long-term debt in 2019.

GE ~~2016~~2019 FORM 10-K ~~220~~ 110



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



GE CAPITAL For the years ended December 31 (In millions)	2019			2018			2017

Cash collateral and settlements received (paid) on derivative contracts	$	1,263		$	(708	)	$	836
Increase (decrease) in other liabilities	(1,470		)	240			(798		)
Other(a)	811			627			11,076
All other operating activities	$	605		$	158		$	11,114

Increase in loans to customers	$	(15,022	)	$	(30,207	)	$	(45,251	)
Principal collections from customers - loans	18,083			37,237			47,471
Investment in equipment for financing leases	(18		)	(306		)	(585		)
Principal collections from customers - financing leases(b)	—			802			1,011
Sales of financing receivables	345			2,458			251
Net decrease (increase) in GE Capital financing receivables	$	3,389		$	9,986		$	2,897

Purchases of investment securities	$	(6,205	)	$	(5,775	)	$	(2,867	)
Dispositions and maturities of investment securities	4,589			8,309			10,001
Decrease (increase) in other assets - investments	1,347			(4,516		)	(8,497		)
Other(c)	2,886			2,464			4,375
All other investing activities	$	2,617		$	482		$	3,013

Short-term (91 to 365 days)	$	(10,515	)	$	(14,251	)	$	(18,591	)
Long-term (longer than one year)	(991		)	(5,460		)	(2,054		)
Principal payments - non-recourse, leveraged leases	(126		)	(125		)	(362		)
Repayments and other reductions (maturities longer than 90 days)	$	(11,632	)	$	(19,836	)	$	(21,007	)

Redemption of investment contracts	$	(279	)	$	(268	)	$	(344	)
Settlements paid on derivative contracts	(864		)	(2,235		)	(212		)
Other	324			95			276
All other financing activities	$	(819	)	$	(2,408	)	$	(280	)


(a)	Primarily included non-cash adjustments for insurance-related charges recorded in 2019 and 2017.


(b)	In 2019, per ASU No. 2016-02, Leases, principal collections from customers on financing leases is classified as cash from operating activities.


(c)	Primarily included cash related to our current receivables and supply chain finance programs and net activity related to settlements between our continuing operations (primarily our treasury operations) and businesses in discontinued operations.

GE2019 FORM 10-K 111



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 25. INTERCOMPANY TRANSACTIONS

Transactions between related companies may include, but are not limited to, the following: GE Capital working capital services to GE, including current receivables and supply chain finance programs; GE Capital finance transactions, including related GE guarantees to GE Capital; GE Capital financing of GE long-term receivables; and aircraft engines, power equipment and renewable energy equipment manufactured by GE that are installed on GE Capital investments, including leased equipment.

In addition to the above transactions that primarily enable growth for the GE businesses, there are routine related party transactions, which include, but are not limited to, the following: expenses related to parent-subsidiary pension plans; buildings and equipment leased between GE and GE Capital, including sale-leaseback transactions; information technology (IT) and other services sold to GE Capital by GE; settlements of tax liabilities; and various investments, loans and allocations of GE corporate overhead costs.

Presented below is a walk of intercompany eliminations from the combined GE and GE Capital totals to the consolidated cash flows.



(In millions)	2019			2018			2017

Combined GE and GE Capital cash from (used for) operating activities - continuing operations	$	6,495		$	2,282		$	13,853
GE current receivables sold to GE Capital	1,081			5			(4,435		)
GE long-term receivables sold to GE Capital	468			1,079			(250		)
Supply chain finance programs(a)	2,289			(18		)	302
GE Capital common dividends to GE	—			—			(4,016		)
Other reclassifications and eliminations	86			(138		)	387
Consolidated cash from (used for) operating activities-continuing operations	$	10,419		$	3,210		$	5,840

Combined GE and GE Capital cash from (used for) investing activities - continuing operations	$	13,509		$	14,915		$	(3,473	)
GE current receivables sold to GE Capital	(1,677		)	(839		)	4,561
GE long-term receivables sold to GE Capital	(468		)	(1,079		)	250
Supply chain finance programs(a)	(2,289		)	18			(302		)
GE Capital loans to GE	—			6,479			7,271
Repayment of GE Capital loans by GE	(1,523		)	—			(1,329		)
Capital contribution from GE to GE Capital	4,000			—			—
Other reclassifications and eliminations	(868		)	(570		)	(251		)
Consolidated cash from (used for) investing activities-continuing operations	$	10,684		$	18,925		$	6,728

Combined GE and GE Capital cash from (used for) financing activities - continuing operations	$	(14,665	)	$	(22,408	)	$	(21,738	)
GE current receivables sold to GE Capital	596			835			(127		)
GE Capital common dividends to GE	—			—			4,016
GE Capital loans to GE	—			(6,479		)	(7,271		)
Repayment of GE Capital loans by GE	1,523			—			1,329
Capital contribution from GE to GE Capital	(4,000		)	—			—
Other reclassifications and eliminations	782			706			(136		)
Consolidated cash from (used for) financing activities-continuing operations	$	(15,764	)	$	(27,345	)	$	(23,927	)


(a)	Represents the reduction of the GE liability associated with the funded participation in a supply chain finance program with GE Capital, primarily as a result of GE Capital's sale of the program platform to MUFG Union Bank, N.A. (MUFG) in 2019.

GE current receivables sold to GE Capital excludes $303 million, $5,192 million and $4,411 million related to cash payments received on the Receivable facility deferred purchase price in the years ended December 31, 2019, 2018 and 2017, respectively, which are reflected as Cash from investing activities in the GE Capital and Consolidated columns of our consolidated Statement of Cash Flows. Sales of current and long-term receivables from GE to GE Capital are classified as Cash from operating activities in the GE column of our Statement of Cash Flows. See Note 4 for further information.

GE2019 FORM 10-K 112



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 26. OPERATING SEGMENTS

BASIS FOR PRESENTATION.Our operating businesses are organized based on the nature of markets and customers. Segment accounting policies are the same as described and referenced in Note 1. Segment results for our financial services businesses reflect the discrete tax effect of transactions.

A description of our operating segments as of December 31, 2019, can be found in the Summary of Operating Segments section within MD&A.



	Years ended December 31
	Total revenues(a)							Intersegment revenues(b)									External revenues
REVENUES (In millions)	2019			2018		2017		2019			2018			2017			2019		2018		2017

Power	$	18,625		$	22,150	$	29,426	$	357		$	152		$	326		$	18,267	$	21,997	$	29,100
Renewable Energy	15,337			14,288		14,321		139			186			242			15,198		14,102		14,080
Aviation	32,875			30,566		27,013		758			375			459			32,117		30,191		26,554
Healthcare	19,942			19,784		19,017		—			—			—			19,942		19,784		19,017
Total industrial segment revenues	86,778			86,789		89,776		1,254			714			1,027			85,524		86,075		88,749
Capital	8,741			9,551		9,070		971			1,384			1,558			7,770		8,167		7,512
Corporate items and eliminations	(305		)	673		433		(2,225		)	(2,097		)	(2,585		)	1,920		2,770		3,018
Total	$	95,214		$	97,012	$	99,279	$	—		$	—		$	—		$	95,214	$	97,012	$	99,279


(a)	Revenues of GE businesses include income from sales of goods and services to customers.


(b)	Sales from one component to another generally are priced at equivalent commercial selling prices.

The equipment and services revenues classification in the table below is consistent with our segment MD&A presentation.



	Years ended December 31
	2019						2018						2017
(In millions)	Equipment		Services		Total		Equipment		Services		Total		Equipment		Services		Total

Power	$	6,247	$	12,378	$	18,625	$	8,077	$	14,073	$	22,150	$	12,909	$	16,517	$	29,426

Renewable Energy	12,267		3,069		15,337		11,419		2,870		14,288		13,969		352		14,321

Aviation	12,804		20,071		32,875		11,499		19,067		30,566		10,215		16,797		27,013

Healthcare	11,585		8,357		19,942		11,422		8,363		19,784		10,771		8,246		19,017

Total industrial segment revenues	$	42,904	$	43,875	$	86,778	$	42,416	$	44,372	$	86,789	$	47,864	$	41,913	$	89,776



SEGMENT REVENUES	Years ended December 31
(In millions)	2019			2018		2017

Gas Power	$	13,122		$	13,296	$17,100
Power Portfolio	5,503			8,853		12,326
Power	$	18,625		$	22,150	$	29,426

Onshore Wind	$	10,421		$	8,220	$	8,055
Grid Solutions equipment and services	4,062			4,772		5,117
Other	855			1,296		1,149
Renewable Energy	$	15,337		$	14,288	$	14,321

Commercial	$	24,217		$	22,724	$	19,709
Military	4,389			4,103		3,991
Systems & Other	4,269			3,740		3,314
Aviation	$	32,875		$	30,566	$	27,013

Healthcare Systems	$	14,648		$	14,886	$	14,460
Life Sciences	5,294			4,898		4,557
Healthcare	$	19,942		$	19,784	$	19,017

Total industrial segment revenues	$	86,778		$	86,789	$	89,776
Capital(a)	8,741			9,551		9,070
Corporate items and eliminations	(305		)	673		433
Consolidated revenues	$	95,214		$	97,012	$	99,279

(a) Substantially all of our revenues at GE Capital are outside of the scope of ASC 606.

Revenues from customers located in the United States were $39,372 million, $39,876 million and $41,468 million for the years ended December 31, 2019, 2018 and 2017, respectively. Revenues from customers located outside the United States were $55,843 million, $57,136 million and $57,811 million for the years ended December 31, 2019, 2018 and 2017, respectively.

GE2019 FORM 10-K 113



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REMAINING PERFORMANCE OBLIGATION. As of December 31, 2019, the aggregate amount of the contracted revenues allocated to our unsatisfied (or partially unsatisfied) performance obligations was $245,434 million. We expect to recognize revenue as we satisfy our remaining performance obligations as follows: 1) equipment-related remaining performance obligation of $48,487 million of which 58%, 76% and 88% is expected to be recognized within 1, 2 and 5 years, respectively, and the remaining thereafter; and 2) services-related remaining performance obligations of $196,947 million of which 14%, 46%, 72% and 83% is expected to be recognized within 1, 5, 10 and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations.

Total sales of goods and services to agencies of the U.S. Government were 5%, 5% and 4% of GE revenues for the years ended December 31, 2019, 2018 and 2017, respectively. Within our Aviation segment, defense-related sales were 5%, 4% and 4% of GE revenues for the years ended December 31, 2019, 2018 and 2017, respectively.



PROFIT AND EARNINGS For the years ended December 31 (In millions)	2019			2018			2017

Power	$	386		$	(808	)	$	1,894
Renewable Energy	(666		)	292			728
Aviation	6,820			6,466			5,370
Healthcare	3,896			3,698			3,488
Total industrial segment profit	10,436			9,647			11,479
Capital	(530		)	(489		)	(6,765		)
Total segment profit	9,906			9,158			4,714
Corporate items and eliminations	(2,212		)	(2,837		)	(3,798		)
GE goodwill impairments	(1,486		)	(22,136		)	(1,165		)
GE interest and other financial charges	(2,115		)	(2,415		)	(2,538		)
GE non-operating benefit costs	(2,828		)	(2,740		)	(2,409		)
GE provision for income taxes	(1,309		)	(467		)	(3,493		)
Earnings (loss) from continuing operations attributable to GE common shareholders	(44		)	(21,438		)	(8,689		)
Earnings (loss) from discontinued operations, net of taxes	(5,335		)	(1,363		)	(312		)
Less net earnings (loss) attributable to noncontrolling interests, discontinued operations	60			1			(81		)
Earnings (loss) from discontinued operations, net of taxes and noncontrolling interests	(5,395		)	(1,364		)	(231		)
Consolidated net earnings (loss) attributable to GE common shareholders	$	(5,439	)	$	(22,802	)	$	(8,920	)



	Interest and other financial charges						Benefit (provision) for income taxes
For the years ended December 31 (In millions)	2019		2018		2017		2019			2018			2017

Capital	$	2,532	$	2,982	$	3,145	$	582		$	374		$	6,302
Corporate items and eliminations(a)	1,695		1,784		1,510		(1,309		)	(467		)	(3,493		)
Total	$	4,227	$	4,766	$	4,655	$	(726	)	$	(93	)	$	2,808


(a)	Included amounts for Power, Renewable Energy, Aviation and Healthcare, for which our measure of segment profit excludes interest and other financial charges and income taxes.



	Assets						Property, plant and equipment additions(a)									Depreciation and amortization(b)
	At December 31						For the years ended December 31									For the years ended December 31
(In millions)	2019		2018		2017		2019			2018			2017			2019		2018		2017

Power	$	26,731	$	27,389	$	55,827	$	277		$	358		$	1,018		$	880	$	1,307	$	1,228
Renewable Energy	15,935		16,400		18,466		455			303			677			425		474		382
Aviation	41,647		38,021		37,473		1,031			1,070			1,426			1,150		1,042		979
Healthcare	30,514		28,048		28,408		395			378			393			702		832		806
Capital(c)	117,546		119,329		150,805		3,830			4,569			3,680			2,083		2,163		2,342
Corporate items and eliminations(d)	29,565		18,032		10,758		(175		)	(46		)	(64		)	355		763		456
Total continuing	$	261,939	$	247,219	$	301,737	$	5,813		$	6,632		$	7,130		$	5,595	$	6,582	$	6,193


(a)	Additions to property, plant and equipment include amounts relating to principal businesses purchased.


(b)	Included amortization expense related to intangible assets.


(c)	Included Capital deferred income taxes that are presented as assets for purposes of our balance sheet presentation.


(d)	Included GE deferred income taxes that are presented as assets for purposes of our balance sheet presentation.

GE2019 FORM 10-K 114



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total assets of Power, Renewable Energy, Aviation, Healthcare, Capital and Corporate at December 31, 2019, include investments in and advances to associated companies of $565 million, $630 million, $2,073 million, $245 million, $2,159 million and $45 million, respectively. Investments in and advances to associated companies contributed approximately $(4) million, $(2) million, $204 million, $19 million, $324 million and $(11) million to pre-tax income for the year ended December 31, 2019 of Power, Renewable Energy, Aviation, Healthcare, Capital and Corporate, respectively.

We classify certain assets that cannot meaningfully be associated with specific geographic areas as “Other Global” for this purpose.



December 31 (In millions)	2019		2018

U.S.	$	144,405	$	126,566
Non-U.S.
Europe	70,565		70,007
Asia	22,089		22,355
Americas	13,435		12,871
Other Global	11,445		15,420
Total Non-U.S.	$	117,534	$	120,653
Total assets (Continuing Operations)	$	261,939	$	247,219

The increase in total continuing assets from December 31, 2018 to December 31, 2019 is primarily due to the deconsolidation of our Baker Hughes segment and classification of our retained interest in Baker Hughes within investment securities, as well as lower sales of receivables and the effect of adopting new leasing standards.

Property, plant and equipment – net associated with operations based in the United States were $11,992 million, $11,868 million and $12,393 million at December 31, 2019, 2018 and 2017, respectively. Property, plant and equipment – net associated with operations based outside the United States were $31,298 million, $31,743 million and $33,576 million at December 31, 2019, 2018 and 2017, respectively.

NOTE ~~30.~~27. GUARANTOR FINANCIAL INFORMATION

GE Capital International Funding Company Unlimited Company (the Issuer) previously issued senior unsecured registered notes that are fully and unconditionally, jointly and severally guaranteed by both the Company and GE Capital International Holdings Limited (each a Guarantor, and together, the Guarantors). The Company is required to provide certain financial information regarding the Issuer and the Guarantors of the registered securities, specifically Condensed Consolidating Statements of Earnings and Comprehensive Income, Condensed Consolidating Statements of Financial Position and Condensed Consolidating Statements of Cash Flows for:


•	General Electric Company (the Parent Company Guarantor) – prepared with investments in subsidiaries accounted for under the equity method of accounting and excluding any inter-segment eliminations;


•	GE Capital International Funding Company Unlimited Company (the Subsidiary Issuer) – finance subsidiary that issued the guaranteed notes for debt;


•	GE Capital International Holdings Limited (GECIHL)(the Subsidiary Guarantor) – prepared with investments in non-guarantor subsidiaries accounted for under the equity method of accounting;


•	Non-Guarantor Subsidiaries – prepared on an aggregated basis excluding any elimination or consolidation adjustments and includes predominantly all non-cash adjustments for cash flows;


•	Consolidating Adjustments – adjusting entries necessary to consolidate the Parent Company Guarantor with the Subsidiary Issuer, the Subsidiary Guarantor and Non-Guarantor Subsidiaries and in the comparative periods, this category includes the impact of new accounting policies adopted as described in Note 1; and


•	Consolidated – prepared on a consolidated basis.

GE2019 FORM 10-K 115



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2019

(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Sales of goods and services	$	28,078		$	—		$	—		$	154,927		$	(95,518	)	$	87,487
GE Capital revenues from services	—			964			64			9,949			(3,250		)	7,728
Total revenues	28,078			964			64			164,876			(98,768		)	95,214

Interest and other financial charges	1,612			980			1,405			1,975			(1,745		)	4,227
Other costs and expenses	32,563			1			—			166,371			(106,876		)	92,059
Total costs and expenses	34,175			981			1,406			168,346			(108,622		)	96,287
Other income	(3,853		)	—			—			30,453			(24,378		)	2,222
Equity in earnings (loss) of affiliates	5,923			—			1,290			75,445			(82,658		)	—
Earnings (loss) from continuing operations before income taxes	(4,028		)	(17		)	(52		)	102,427			(97,182		)	1,149
Benefit (provision) for income taxes	(1,143		)	1			—			(228		)	643			(726		)
Earnings (loss) from continuing operations	(5,170		)	(16		)	(52		)	102,200			(96,539		)	423
Earnings (loss) from discontinued operations, net of taxes	192			—			59			—			(5,585		)	(5,335		)
Net earnings (loss)	(4,979		)	(16		)	7			102,200			(102,124		)	(4,912		)
Less net earnings (loss) attributable to noncontrolling interests	—			—			—			7			59			66
Net earnings (loss) attributable to the Company	(4,979		)	(16		)	7			102,192			(102,184		)	(4,979		)
Other comprehensive income	2,681			—			(1,022		)	2,280			(1,258		)	2,681
Comprehensive income (loss) attributable to the Company	$	(2,297	)	$	(16	)	$	(1,015	)	$	104,472		$	(103,441	)	$	(2,297	)



CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2018

(In millions)	Parent Company Guarantor			Subsidiary Issuer		Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Sales of goods and services	$	34,972		$	—	$	—		$	164,691		$	(110,723	)	$	88,940
GE Capital revenues from services	—			917		1,038			9,531			(3,414		)	8,072
Total revenues	34,972			917		1,038			174,222			(114,136		)	97,012

Interest and other financial charges	1,728			911		2,560			2,459			(2,893		)	4,766
Other costs and expenses	47,471			—		1			186,262			(118,180		)	115,554
Total costs and expenses	49,199			911		2,561			188,721			(121,073		)	120,320
Other income	3,910			—		—			29,268			(30,857		)	2,321
Equity in earnings (loss) of affiliates	(11,404		)	—		1,554			240,036			(230,186		)	—
Earnings (loss) from continuing operations before income taxes	(21,721		)	6		31			254,803			(254,106		)	(20,987		)
Benefit (provision) for income taxes	1,092			5		—			(2,381		)	1,191			(93		)
Earnings (loss) from continuing operations	(20,629		)	11		31			252,422			(252,915		)	(21,080		)
Earnings (loss) from discontinued operations, net of taxes	(1,726		)	—		(39		)	—			401			(1,363		)
Net earnings (loss)	(22,355		)	11		(8		)	252,422			(252,514		)	(22,443		)
Less net earnings (loss) attributable to noncontrolling interests	—			—		—			(204		)	116			(89		)
Net earnings (loss) attributable to the Company	(22,355		)	11		(8		)	252,627			(252,629		)	(22,355		)
Other comprehensive income	(10		)	—		(82		)	(2,840		)	2,922			(10		)
Comprehensive income (loss) attributable to the Company	$	(22,364	)	$	11	$	(90	)	$	249,786		$	(249,707	)	$	(22,364	)

GE2019 FORM 10-K 116



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 2017

(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor		Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Sales of goods and services	$	35,551		$	—		$	—	$	161,172		$	(104,782	)	$	91,942
GE Capital revenues from services	—			703			800		9,888			(4,053		)	7,337
Total revenues	35,551			703			800		171,060			(108,835		)	99,279

Interest and other financial charges	1,644			652			2,006		3,343			(2,990		)	4,655
Other costs and expenses	38,765			—			18		177,223			(107,954		)	108,052
Total costs and expenses	40,409			653			2,023		180,566			(110,943		)	112,707
Other income	(959		)	—			—		75,291			(72,249		)	2,083
Equity in earnings (loss) of affiliates	553			—			1,938		109,521			(112,012		)	—
Earnings (loss) from continuing operations before income taxes	(5,263		)	50			714		175,307			(182,152		)	(11,345		)
Benefit (provision) for income taxes	(2,896		)	(5		)	115		5,877			(282		)	2,808
Earnings (loss) from continuing operations	(8,159		)	45			829		181,184			(182,435		)	(8,536		)
Earnings (loss) from discontinued operations, net of taxes	(325		)	—			41		4			(32		)	(312		)
Net earnings (loss)	(8,484		)	45			870		181,187			(182,467		)	(8,849		)
Less net earnings (loss) attributable to noncontrolling interests	—			—			—		(137		)	(228		)	(365		)
Net earnings (loss) attributable to the Company	(8,484		)	45			870		181,324			(182,239		)	(8,484		)
Other comprehensive income	4,184			—			567		(7,552		)	6,985			4,184
Comprehensive income (loss) attributable to the Company	$	(4,300	)	$	45		$	1,436	$	173,773		$	(175,254	)	$	(4,300	)



CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2019

(In millions)	Parent Company Guarantor		Subsidiary Issuer		Subsidiary Guarantor		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated

Cash, cash equivalents and restricted cash	$	10,591	$	—	$	—	$	26,438	$	(636	)	$	36,394
Receivables - net	47,170		17,726		230		61,026		(99,104		)	27,047
Investment in subsidiaries	147,397		—		40,408		421,613		(609,418		)	—
All other assets	28,377		236		—		291,995		(118,000		)	202,607
Total assets	$	233,535	$	17,961	$	40,638	$	801,071	$	(827,158	)	$	266,048

Short-term borrowings	$	135,172	$	—	$	2,981	$	9,712	$	(125,792	)	$	22,072
Long-term and non-recourse borrowings	40,660		16,771		24,417		34,262		(47,301		)	68,809
All other liabilities	66,808		161		70		146,972		(68,705		)	145,306
Total liabilities	242,640		16,932		27,468		190,946		(241,799		)	236,187

Total liabilities and equity	$	233,535	$	17,961	$	40,638	$	801,071	$	(827,158	)	$	266,048

GE2019 FORM 10-K 117



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



CONDENSED CONSOLIDATING STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2018

(In millions)	Parent Company Guarantor		Subsidiary Issuer		Subsidiary Guarantor		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated

Cash, cash equivalents and restricted cash	$	9,561	$	—	$	—	$	25,975	$	(4,412	)	$	31,124
Receivables - net	30,466		17,467		2,792		69,268		(90,504		)	29,488
Investment in subsidiaries	176,239		—		45,832		733,535		(955,605		)	—
All other assets	29,615		12		—		359,063		(138,230		)	250,460
Total assets	$	245,881	$	17,479	$	48,623	$	1,187,841	$	(1,188,751	)	$	311,072

Short-term borrowings	$	150,426	$	—	$	9,854	$	9,649	$	(157,153	)	$	12,776
Long-term and non-recourse borrowings	59,800		16,115		24,341		41,066		(50,498		)	90,824
All other liabilities	43,872		336		245		153,160		(41,622		)	155,992
Total liabilities	254,098		16,452		34,439		203,875		(249,273		)	259,591

Total liabilities and equity	$	245,881	$	17,479	$	48,623	$	1,187,841	$	(1,188,751	)	$	311,072



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2019

(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Cash from (used for) operating activities(a)	$	5,526		$	137		$	(1,685	)	$	33,515		$	(28,721	)	$	8,772

Cash from (used for) investing activities	32,210			(137		)	6,223			400,190			(429,548		)	8,939

Cash from (used for) financing activities	(36,706		)	—			(4,538		)	(436,933		)	462,045			(16,133		)
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	—			—			—			(50		)	—			(50		)
Increase (decrease) in cash, cash equivalents and restricted cash	1,030			—			—			(3,277		)	3,776			1,529
Cash, cash equivalents and restricted cash at beginning of year	9,561			—			—			30,399			(4,412		)	35,548
Cash, cash equivalents and restricted cash at end of year	10,591			—			—			27,121			(636		)	37,077
Less cash, cash equivalents and restricted cash of discontinued operations at end of year	—			—			—			638			—			638
Cash, cash equivalents and restricted cash of continuing operations at end of year	$	10,591		$	—		$	—		$	26,484		$	(636	)	$	36,439


(a)	Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $(1,282) million.

GE2019 FORM 10-K 118



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2018

(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Cash from (used for) operating activities(a)	$	42,950		$	(387	)	$	34,361		$	328,029		$	(399,976	)	$	4,978

Cash from (used for) investing activities	1,292			457			27,415			(297,621		)	286,736			18,280

Cash from (used for) financing activities	(38,154		)	(70		)	(61,779		)	(48,782		)	116,979			(31,807		)
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	—			—			—			(628		)	—			(628		)
Increase (decrease) in cash, cash equivalents and restricted cash	6,089			—			(3		)	(19,002		)	3,739			(9,176		)
Cash, cash equivalents and restricted cash at beginning of year	3,472			—			3			49,400			(8,151		)	44,724
Cash, cash equivalents and restricted cash at end of year	9,561			—			—			30,399			(4,412		)	35,548
Less cash, cash equivalents and restricted cash of discontinued operations at end of year	—			—			—			4,424			—			4,424
Cash, cash equivalents and restricted cash of continuing operations at end of year	$	9,561		$	—		$	—		$	25,975		$	(4,412	)	$	31,124


(a)	Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $1,991 million.



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2017

(In millions)	Parent Company Guarantor			Subsidiary Issuer			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated

Cash from (used for) operating activities(a)	$	(29,441	)	$	52		$	4,305		$	149,385		$	(117,747	)	$	6,554

Cash from (used for) investing activities	(4,432		)	(52		)	(1,871		)	(222,298		)	234,032			5,379

Cash from (used for) financing activities	34,616			—			(2,473		)	70,782			(121,410		)	(18,484		)
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	—			—			—			891			—			891
Increase (decrease) in cash, cash equivalents and restricted cash	743			—			(39		)	(1,239		)	(5,125		)	(5,659		)
Cash, cash equivalents and restricted cash at beginning of year	2,729			—			41			50,640			(3,026		)	50,384
Cash, cash equivalents and restricted cash at end of year	3,472			—			3			49,400			(8,151		)	44,724
Less cash, cash equivalents and restricted cash of discontinued operations at end of year	—			—			—			7,901			—			7,901
Cash, cash equivalents and restricted cash of continuing operations at end of year	$	3,472		$	—		$	3		$	41,499		$	(8,151	)	$	36,823


(a)	Parent Company Guarantor cash flows included cash from (used for) operating activities of discontinued operations of $239 million.

NOTE 28. BAKER HUGHES SUMMARIZED FINANCIAL INFORMATION

In September 2019, we deconsolidated our Baker Hughes segment and elected to account for our remaining interest in Baker Hughes (comprising 377.4 million shares and a promissory note receivable) at fair value. At December 31, 2019, the fair value of our interest in Baker Hughes was $9,888 million. Since the date of deconsolidation, we have not sold any shares of Baker Hughes and recognized an unrealized gain of $793 million for the period ended December 31, 2019 based on a share price of $25.63. See Notes 2 and 3 for further information.

GE2019 FORM 10-K 119



FINANCIAL STATEMENTS	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summarized financial information of Baker Hughes from the date of deconsolidation is as follows.



From September 16 to December 31, 2019 (In millions)

Revenues	$	7,751
Gross Profit	1,558
Net income (loss)	120
Net income (loss) attributable to the entity	60



December 31, 2019 (In millions)

Current	$	15,222
Noncurrent	38,147
Total assets	$	53,369

Current	$	10,014
Noncurrent	8,857
Total liabilities	$	18,871
Noncontrolling interests	$	12,570

Baker Hughes is a SEC registrant with separate filing requirements, and its financial information can be obtained from www.sec.gov or www.bakerhughes.com.

NOTE 29. QUARTERLY INFORMATION (UNAUDITED)



	First quarter					Second quarter						Third quarter						Fourth quarter
(In millions; per-share amounts in dollars)	2019		2018			2019			2018			2019			2018			2019			2018

Consolidated operations
Earnings (loss) from continuing operations	$	983	$	446		$	(115	)	$	791		$	(1,290	)	$	(23,014	)	$	845		$	697
Earnings (loss) from discontinued operations	2,663		(1,559		)	219			(122		)	(8,093		)	155			(123		)	163
Net earnings (loss)	3,645		(1,113		)	104			669			(9,383		)	(22,859		)	721			860
Less net earnings (loss) attributable to noncontrolling interests	57		34			(23		)	(132		)	40			(90		)	(7		)	99
Net earnings (loss) attributable to the Company	$	3,588	$	(1,147	)	$	127		$	800		$	(9,423	)	$	(22,769	)	$	728		$	761
Per-share amounts – earnings (loss) from continuing operations
Diluted earnings (loss) per share	$	0.10	$	0.03		$	(0.03	)	$	0.08		$	(0.15	)	$	(2.64	)	$	0.07		$	0.06
Basic earnings (loss) per share	0.10		0.03			(0.03		)	0.08			(0.15		)	(2.64		)	0.08			0.06
Per-share amounts – earnings (loss) from discontinued operations
Diluted earnings (loss) per share	0.30		(0.17		)	0.03			(0.01		)	(0.93		)	0.02			(0.02		)	0.01
Basic earnings (loss) per share	0.30		(0.17		)	0.03			(0.01		)	(0.93		)	0.02			(0.01		)	0.01
Per-share amounts – net earnings (loss)
Diluted earnings (loss) per share	0.40		(0.14		)	(0.01		)	0.07			(1.08		)	(2.62		)	0.06			0.07
Basic earnings (loss) per share	0.41		(0.14		)	(0.01		)	0.07			(1.08		)	(2.62		)	0.06			0.07
Dividends declared	0.01		0.12			0.01			0.12			0.01			0.12			0.01			0.01

Selected data
GE
Sales of goods and services	$	20,324	$	21,138		$	21,416		$	22,190		$	21,519		$	21,273		$	24,460		$	24,437
Gross profit from sales	4,494		4,879			4,500			5,100			4,660			3,924			5,780			4,261
GE Capital
Total revenues	2,227		2,173			2,321			2,429			2,097			2,473			2,096			2,476
Earnings (loss) from continuing operations attributable to the Company	175		(179		)	99			(22		)	(603		)	58			259			101

First quarter Second quarter Third quarter Fourth quarter
(In millions; per-share amounts in dollars) 2016 2015 2016 2015 2016 2015 2016 2015

Consolidated operations
Earnings (loss) from continuing operations $ 415 $ (4,673) $ 3,363 $ 1,813 $ 2,056 $ 1,915 $ 3,659 $ 2,645
Earnings (loss) from discontinued
   operations
(308) (8,936) (541) (2,947) (105) 629 - 3,758
Net earnings (loss) 107 (13,608) 2,823 (1,134) 1,951 2,545 3,659 6,403
Less net earnings (loss) attributable to
   noncontrolling interests
(121) (35) (86) 225 (76) 39 (8) 103
Net earnings (loss) attributable to
   the Company
$ 228 $ (13,573) $ 2,908 $ (1,360) $ 2,027 $ 2,506 $ 3,667 $ 6,301
Per-share amounts – earnings (loss) from
   continuing operations

      Diluted earnings (loss) per share
$ 0.03 $ (0.45) $ 0.36 $ 0.17 $ 0.23 $ 0.19 $ 0.39 $ 0.26
      Basic earnings (loss) per share
0.03 (0.45) 0.36
0.17
0.24 0.19 0.40 0.26
Per-share amounts – earnings (loss)
   from discontinued operations

      Diluted earnings (loss) per share
(0.03) (0.90) (0.06) (0.30) (0.01) 0.05 - 0.38
      Basic earnings (loss) per share
(0.03) (0.90) (0.06) (0.30) (0.01) 0.05 - 0.38
Per-share amounts – net earnings (loss)
      Diluted earnings (loss) per share
(0.01) (1.35) 0.30 (0.13) 0.22 0.25 0.39 0.64
      Basic earnings (loss) per share
(0.01) (1.35) 0.30 (0.13) 0.22 0.25 0.40 0.64

Selected data
GE
   Sales of goods and services
$ 25,407 $ 23,839 $ 28,150 $ 26,141 $ 26,934 $ 25,612 $ 30,345 $ 30,614
   Gross profit from sales
5,516 5,514 6,192 6,033 6,388 6,275 7,027 7,556
GE Capital
   Total revenues
2,885 2,866 2,771 2,690 2,600 2,660 2,649 2,585
   Earnings (loss) from continuing operations

      attributable to the Company (603) (5,721) (448) (332) 59 (154) 397 (1,447)

For GE, gross profit from sales is sales of goods and services less costs of goods and services sold.

Earnings-per-share amounts are computed independently each quarter for earnings (loss) from continuing operations, earnings (loss) from discontinued operations and net ~~earnings.~~earnings (loss). As a result, the sum of each ~~quarter's~~quarter’s per-share amount may not equal the total per-share amount for the respective year; and the sum of per-share amounts from continuing operations and discontinued operations may not equal the total per-share amounts for net earnings (loss) for the respective quarters.

GE2019 FORM 10-K 120



FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS

Our public communications and SEC filings may contain statements related to future, not past, events. These forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "estimate," "forecast," "target," "preliminary," or "range." Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about our expected financial performance, including cash flows, revenues, organic growth, margins, earnings and earnings per share; macroeconomic and market conditions; planned and potential business or asset dispositions; our de-leveraging plans, including leverage ratios and targets, the timing and nature of actions to reduce indebtedness and our credit ratings and outlooks; GE's and GE ~~2016~~Capital's funding and liquidity; our businesses’ cost structures and plans to reduce costs; restructuring, goodwill impairment or other financial charges; or tax rates.

For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include:

our success in executing and completing, including obtaining regulatory approvals and satisfying other closing conditions for, announced GE Industrial and GE Capital business or asset dispositions or other transactions, including the planned sale of our BioPharma business within our Healthcare segment and plan to exit our equity ownership position in Baker Hughes, the timing of closing for those transactions and the expected proceeds and benefits to GE;

our de-leveraging and capital allocation plans, including with respect to actions to reduce our indebtedness, the timing and amount of GE dividends, organic investments, and other priorities;

further downgrades of our current short- and long-term credit ratings or ratings outlooks, or changes in rating application or methodology, and the related impact on our liquidity, funding profile, costs and competitive position;

GE’s liquidity and the amount and timing of our GE Industrial cash flows and earnings, which may be impacted by customer, competitive, contractual and other dynamics and conditions;

GE Capital's capital and liquidity needs, including in connection with GE Capital’s run-off insurance operations and discontinued operations; the amount and timing of required capital contributions to the insurance operations and strategic actions that we may pursue; the impact of conditions in the financial and credit markets on GE Capital's ability to sell financial assets; the availability and cost of funding; and GE Capital's exposure to particular counterparties and markets;

global economic trends, competition and geopolitical risks, including changes in the rates of investment or economic growth in key markets we serve, or an escalation of trade tensions such as those between the U.S. and China;

changes in macroeconomic and market conditions, particularly interest rates as it relates to our pension and run-off insurance liabilities, as well as the value of stocks and other financial assets (including our equity ownership positions in Baker Hughes), oil and other commodity prices and exchange rates;

market developments or customer actions that may affect levels of demand and the financial performance of the major industries and customers we serve, such as secular, cyclical and competitive pressures in our Power business, pricing and other pressures in the renewable energy market, levels of demand for air travel and other customer dynamics such as early aircraft retirements, conditions in key geographic markets and other shifts in the competitive landscape for our products and services;

the length and severity of the recent coronavirus outbreak, including its impacts across our businesses on demand, operations in China and our global supply chains;

operational execution by our businesses, including our ability to improve the operations and execution of our Power and Renewable Energy businesses, and the continued strength of our Aviation business;

changes in law, regulation or policy that may affect our businesses, such as trade policy and tariffs, regulation related to climate change and the effects of U.S. tax reform and other tax law changes;

our decisions about investments in new products, services and platforms, and our ability to launch new products in a cost-effective manner;

our ability to increase margins through implementation of operational changes, restructuring and other cost reduction measures;

the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of Alstom, SEC and other investigative and legal proceedings;

the impact of actual or potential failures of our products or third-party products with which our products are integrated, such as the fleet grounding of the Boeing 737 MAX and the timing of its return to service, and related reputational effects;

the impact of potential information technology, cybersecurity or data security breaches; and

the other factors that are described in "Risk Factors" in this form 10-K report.

These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.

GE2019 FORM 10-K ~~221~~ 121



OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information about our Executive Officers ~~of the Registrant~~ (As of February 1, ~~2017)~~2020)



			Date assumed
			Executive
Name	Position	Age	Officer Position

~~Jeffrey R. Immelt~~H. Lawrence Culp, Jr.	Chairman of the Board & Chief Executive Officer	6056	~~January 1997~~October 2018
~~Jeffrey~~Jamie S. ~~Bornstein~~Miller	Senior Vice President & Chief Financial Officer	51	~~July 2013~~November 2017
~~Elizabeth~~Michael J. ~~Comstock~~	~~Vice Chairman, Business Innovations~~	56	~~April 2013~~
~~Alexander Dimitrief~~Holston	Senior Vice President, General Counsel & Secretary	58	~~November 2015~~
~~Jan R. Hauser~~	~~Vice President, Controller & Chief Accounting Officer~~	57	April ~~2013~~2018
David L. Joyce	Vice Chairman of General Electric Company;	6063	September 2016
	President & CEO, GE Aviation
~~Susan P. Peters~~L. Kevin Cox	Senior Vice President, Chief Human Resources Officer	6356	~~August 2013~~February 2019
~~John G. Rice~~Kieran P. Murphy	Senior Vice ~~Chairman~~President of General Electric Company;	6056	September ~~1997~~2018
	President & CEO, ~~Global Growth Organization~~ GE Healthcare
Jérôme X. Pécresse	Senior Vice President of General Electric Company;	52	September 2018
	President & CEO, GE Renewable Energy
Russell Stokes	Senior Vice President of General Electric Company;	48	September 2018
	President & CEO, GE Power Portfolio
Scott L. Strazik	Senior Vice President of General Electric Company;	41	January 2019
	CEO, GE Gas Power
Thomas S. Timko	Vice President, Controller & Chief Accounting Officer	51	September 2018

All Executive Officers are elected by the Board of Directors for an initial term that continues until the Board meeting immediately preceding the next annual statutory meeting of ~~shareowners,~~shareholders, and thereafter are elected for one-year terms or until their successors have been elected. All Executive Officers have been executives of General Electric Company for the last five years except for ~~Ms. Hauser.~~ Messrs. Culp, Cox, Holston, Pécresse and Timko.

Prior to joining GE in April ~~2013, Ms. Hauser~~2018 as an independent director and being elected to the position of Chairman and CEO in October 2018, Mr. Culp served as CEO at Danaher Corp. (2001-2014); as a ~~partner,~~senior advisor at Danaher Corp. (2014-2016); as a senior lecturer at Harvard Business School (2015-2018); and as a senior adviser at Bain Capital Private Equity, LP (2017-2018).

Prior to joining GE in February 2019, Mr. Cox had been Chief Human Resources Officer at American Express since 2005.

Prior to joining GE in April 2018, Mr. Holston had been general counsel at Merck since 2015, after joining the drugmaker as chief ethics and compliance officer in 2012.

Prior to joining GE in November 2015 with the acquisition of Alstom, Mr. Pécresse was an Executive Vice President of Alstom since June 2011.

Prior to joining GE in September 2018, Mr. Timko was Vice President, Controller and Chief Accounting ~~Services, National Professional Services Group~~Officer at ~~PricewaterhouseCoopers LLP.~~General Motors since 2013.

The remaining information called for by this item is incorporated by reference to ~~"Election~~“Election of Directors,~~" "Section 16(a) Beneficial Ownership Reporting Compliance," "Other~~” “Other Governance Policies & Practices” and ~~Practices" and "Board Committees"~~“Board Operations” in our definitive proxy statement for our ~~2017~~2020 Annual Meeting of ~~Shareowners~~Shareholders to be held ~~April 26, 2017,~~May 5, 2020, which will be filed within 120 days of the end of our fiscal year ended December 31, ~~2016~~2019 (the ~~2017~~2020 Proxy Statement).

GE2019 FORM 10-K 122



OTHER INFORMATION

~~GE 2016 FORM 10-K 222~~

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)1. Financial Statements

Included in the ~~"Financial~~“Financial Statements and Supplementary ~~Data"~~Data” section of this report:

~~Management's~~Management’s Annual Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm

Statement of Earnings (Loss) for the years ended December 31, ~~2016, 2015~~2019, 2018 and ~~2014~~2017

~~Consolidated Statement of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014~~

~~Consolidated Statement of Changes in Shareowners' Equity for the years ended December 31, 2016, 2015 and 2014~~

Statement of Financial Position at December 31, ~~2016~~2019 and ~~2015~~2018

Statement of Cash Flows for the years ended December 31, ~~2016, 2015~~2019, 2018 and ~~2014~~2017

Statement of Comprehensive Income (Loss) for the years ended December 31, 2019, 2018 and 2017

Statement of Changes in Shareholders' Equity for the years ended December 31, 2019, 2018 and 2017

Notes to consolidated financial statements

~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations - Summary of Operating Segments

(a)2. Financial Statement Schedules

The schedules listed in Reg. 210.5-04 have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

(a)3. Exhibit Index



Exhibit Number		Description
2(a)		Transaction Agreement and Plan of Merger dated as of October 30, 2016 among General Electric, Baker Hughes Incorporated, Bear Mergersub, Inc. and Bear Newco, Inc. (Incorporated by reference to Exhibit 2.1 to ~~GE's~~GE’s Current Report on Form 8-K, dated November 3, 2016 (Commission file number 001-00035)).
2(b)		Amendment to Transaction Agreement and Plan of Merger dated March 27, 2017 between General Electric Company, Baker Hughes Incorporated, Bear Newco, Inc., Bear MergerSub, Inc., BHI Newco, Inc., and Bear MergerSub 2, Inc. (Incorporated by reference to Bear Newco, Inc.'s Registration Statement on Form S-4, pages A-II-I through G-16, filed pursuant to Rule 424(b)(3) on May 30, 2017 (Commission file number 333-216991)).
3(i)		The Restated Certificate of Incorporation of General Electric Company ~~(Incorporated~~(Incorporated by reference to Exhibit 3(i) to ~~GE's~~GE’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2013)~~2013), as amended by the Certificate of Amendment, dated December 2, 2015 ~~(Incorporated~~(Incorporated by reference to Exhibit 3.1 to ~~GE's~~GE’s Current Report on Form 8-K, dated December 3, ~~2015)~~2015), as further amended by the Certificate of Amendment, dated January 19, 2016 ~~(Incorporated~~(Incorporated by reference to Exhibit 3.1 to ~~GE's~~GE’s Current Report on Form 8-K, dated January 20, ~~2016)~~2016), as further amended by the Certificate of Change of General Electric Company (Incorporated by reference to Exhibit 3(1) to GE’s Current Report on Form 8-K, dated September 1, 2016, as further amended by the Certificate of Amendment, dated May 13, 2019 (Incorporated by reference to Exhibit 3.1 to GE’s Current Report on Form 8-K, dated May 13, 2019), and as further amended by the Certificate of Change of General Electric Company (Incorporated by reference to Exhibit ~~3(1)~~3.1 to ~~GE's~~GE’s Current Report on Form 8-K, dated ~~September 1, 2016~~December 9, 2019) (in each case, under Commission file number 001-00035).

3(ii)		The By-Laws ~~as amended,~~ of General Electric Company, as amended on May 13, 2019 (Incorporated by reference to Exhibit ~~3(ii)~~3.2 to ~~GE's~~GE’s Current Report on Form 8-K dated ~~February 11, 2015~~May 13, 2019) (Commission file number 001-00035)).

4(a)		Amended and Restated General Electric Capital Corporation Standard Global Multiple Series Indenture Provisions dated as of February 27, 1997 (Incorporated by reference to Exhibit 4(a) to General Electric Capital ~~Corporation's~~Corporation’s Registration Statement on Form S-3, File No. 333-59707 (Commission file number 001-06461)).

4(b)		Third Amended and Restated Indenture dated as of February 27, 1997, between General Electric Capital Corporation and The Bank of New York Mellon, as successor trustee (Incorporated by reference to Exhibit 4(c) to General Electric Capital ~~Corporation's~~Corporation’s Registration Statement on Form S-3, File No. 333-59707 (Commission file number 001-06461)).

4(c)		First Supplemental Indenture dated as of May 3, 1999, supplemental to Third Amended and Restated Indenture dated as of February 27, 1997 (Incorporated by reference to Exhibit 4(dd) to General Electric Capital ~~Corporation's~~Corporation’s Post-Effective Amendment No. 1 to Registration Statement on Form S-3, File No. 333-76479 (Commission file number 001-06461)).

4(d)		Second Supplemental Indenture dated as of July 2, 2001, supplemental to Third Amended and Restated Indenture dated as of February 27, 1997 (Incorporated by reference to Exhibit 4(f) to General Electric Capital ~~Corporation's~~Corporation’s Post-Effective Amendment No.1 to Registration Statement on Form S-3, File No. 333-40880 (Commission file number 001-06461)).

~~GE 2016 FORM 10-K 223~~


4(e)		Third Supplemental Indenture dated as of November 22, 2002, supplemental to Third Amended and Restated Indenture dated as of February 27, 1997 (Incorporated by reference to Exhibit 4(cc) to General Electric Capital ~~Corporation's~~Corporation’s Post-Effective Amendment No. 1 to the Registration Statement on Form S-3, File No. 333‑100527 (Commission file number 001-06461)).

4(f)		Fourth Supplemental Indenture dated as of August 24, 2007, supplemental to Third Amended and Restated Indenture dated as of February 27, 1997 (Incorporated by reference to Exhibit 4(g) to General Electric Capital ~~Corporation's~~Corporation’s Registration Statement on Form S-3, File number 333-156929 (Commission file number 001-06461)).

4(g)		~~Letter from~~ Senior Note Indenture, dated October 9, 2012, by and between the ~~Senior Vice President~~Company and Chief Financial Officer of General Electric to General Electric Capital Corporation dated September 15, 2006, with respect to returning dividends, distributions or other payments to General Electric Capital Corporation in certain circumstances described in the Indenture for Subordinated Debentures dated September 1, 2006, between General Electric Capital Corporation and theThe Bank of New York Mellon, as ~~successor~~ trustee (Incorporated by reference to Exhibit ~~4(c) to General Electric Capital Corporation's Post-Effective Amendment No. 2 to Registration Statement~~4.1 of GE’s Current Report on Form ~~S-3, File No. 333-132807~~8-K dated October 9, 2012 (Commission file number ~~001-06461)~~001-00035)).

GE2019 FORM 10-K 123



OTHER INFORMATION



4(h)	Indenture dated as of October 26, 2015, among GE Capital International Funding Company, as issuer, General Electric Company and General Electric Capital Corporation, as guarantors and The Bank of New York Mellon, as trustee (Incorporated by reference to Exhibit 99 to General ~~Electric's~~Electric’s Current Report on Form 8-K filed on October 26, 2015 (Commission file number 001-00035)).

4(i)	Global Supplemental Indenture dated as of April 10, 2015, among General Electric Capital Corporation, General Electric Company and The Bank of New York Mellon, as trustee. (Incorporated by reference to Exhibit 4(i) to ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2015).

4(j)	Second Global Supplemental Indenture dated as of December 2, 2015, among General Electric Capital Corporation, General Electric Company and The Bank of New York Mellon, as successor trustee (Incorporated by reference to Exhibit 4.2 to General ~~Electric's~~Electric’s Current Report on Form 8-K filed on December 3, 2015 (Commission file number 001-00035)).

4(k)	Agreement to furnish to the Securities and Exchange Commission upon request a copy of instruments defining the rights of holders of certain long-term debt of the registrant and consolidated subsidiaries.*
4(l)	Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.*
(10)	Except for ~~10(t)~~10(aa) and (bb) below, all of the following exhibits consist of Executive Compensation Plans or Arrangements:

	(a)	General Electric Incentive Compensation Plan, as amended effective July 1, 1991 (Incorporated by reference to Exhibit 10(a) to ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 1991).

	(b)	General Electric Financial Planning Program, as amended through September 1993 (Incorporated by reference to Exhibit 10(h) to ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 1993).

	(c)	General Electric Supplemental Life Insurance Program, as amended February 8, 1991 (Incorporated by reference to Exhibit 10(i) to ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 1990).

	(d)	General Electric ~~Directors'~~Directors’ Charitable Gift Plan, as amended through December 2002 (Incorporated by reference to Exhibit 10(i) to GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2002).
	(e)	General Electric Leadership Life Insurance Program, effective January 1, 1994 (Incorporated by reference to Exhibit 10(r) to GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 1993).
	(f)	General Electric Supplementary Pension Plan, as amended effective July 1, 2015. (Incorporated by reference to Exhibit 10(f) to GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2015).
	(g)	General Electric 2003 Non-Employee Director Compensation Plan, Amended and Restated as of December 7, 2018 (Incorporated by reference to Exhibit 10(g) to GE's Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, ~~2002)~~2018).

	~~(e)~~(h)	~~General Electric Leadership Life Insurance Program, effective January 1, 1994~~ Form of Director Indemnification Agreement (Incorporated by reference to Exhibit ~~10(r)~~10(cc) to ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, ~~1993)~~2018).

	~~(f)~~	General Electric Supplementary Pension Plan, as amended effective July 1, 2015. (Incorporated by reference to Exhibit 10(f) to GE's Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2015).
	~~(g)~~(i)	General Electric 2003 Non-Employee Director Compensation Plan, Amended and Restated as of September 9, 2016 (Incorporated by reference to Exhibit 10(a) to GE's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (Commission file number 000-00035)).

~~GE 2016 FORM 10-K 224~~


		~~(h)~~	Amendment to Nonqualified Deferred Compensation Plans, dated as of December 14, 2004 (Incorporated by reference to Exhibit 10(w) to the ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2004).

		~~(i)~~(j)	GE Retirement for the Good of the Company Program, as amended effective January 1, 2009 (Incorporated by reference to Exhibit 10(j) to ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2008).

		~~(j)~~(k)	GE Excess Benefits Plan, effective January 1, 2009 (Incorporated by reference to Exhibit 10(k) to ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2008).

		~~(k)~~(l)	General Electric 2006 Executive Deferred Salary Plan, as amended January 1, 2009 (Incorporated by reference to Exhibit 10(l) to ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2008).

		~~(l)~~	General Electric Company 2007 Long-Term Incentive Plan (as amended and restated April 25, 2012) (Incorporated by reference to Exhibit 99.1 to GE's Registration Statement on Form S-8, dated May 4, 2012, File number 333-181177 (Commission file number 001-00035)).

		(m)	GE 2007 Long-Term Incentive Plan as amended and restated April 26, 2017, and as further amended and restated February 15, 2019 (Incorporated by reference to Exhibit 10(l) to GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2018).
		(n)	Form of Agreement for Stock Option Grants to Executive Officers under the General Electric Company 2007 Long-Term Incentive Plan, as amended January 1, 2009 (Incorporated by reference to Exhibit 10(n) to ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2008).

		~~(n)~~(o)	Form of Agreement for Annual Restricted Stock Unit Grants to Executive Officers under the General Electric Company 2007 Long-Term Incentive Plan, as amended February 7, 2014 (Incorporated by reference to Exhibit 10(a) to ~~GE's~~GE’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (Commission file number 001-00035)).

		~~(o)~~(p)	Form of Agreement for Periodic Restricted Stock Unit Grants to Executive Officers under the General Electric Company 2007 Long-Term Incentive Plan, as amended February 7, 2014 (Incorporated by reference to Exhibit 10(b) to ~~GE's~~GE’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (Commission file number 001-00035)).

		~~(p)~~	Form of Agreement for Long Term Performance Award Grants to Executive Officers under the General Electric Company 2007 Long-Term Incentive Plan (as amended and restated April 25, 2012) (Incorporated by reference to Exhibit 10(a) to GE's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (Commission file number 001-00035)).

		(q)	Form of Agreement for Performance Stock Unit Grants to Executive Officers in 2018 under the General Electric Company 2007 Long-Term Incentive Plan (Incorporated by reference to Exhibit ~~10 (a)~~10(r) to ~~GE's~~GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2018).

GE2019 FORM 10-K 124



OTHER INFORMATION



	(r)	Form of Agreement for Performance Stock Unit Grants to Executive Officers in 2019 under the General Electric Company 2007 Long-Term Incentive Plan.*
	(s)	General Electric International Employee Stock Purchase Plan, as amended and restated on April 25, 2018 (Incorporated by reference to Exhibit 99.1 to GE’s Registration Statement on Form S-8, dated May 1, 2018, File No. 333-224587 (Commission file number 001-00035)).
	(t)	General Electric Company Annual Executive Incentive Plan, effective January 1, 2018 (Incorporated by reference to Exhibit 10(a) to GE’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 (Commission file number 001-00035)).
	(u)	Employment Agreement between Henry Lawrence Culp, Jr. and General Electric Company, effective October 1, 2018 (Incorporated by reference to Exhibit 10(z) to GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2018).
	(v)	GE Performance Stock Unit Grant Agreement for H. Lawrence Culp, Jr. (Incorporated by reference to Exhibit 10(aa) to GE’s Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 2018).
	(w)	Employment Agreement between Michael Holston and General Electric Company, effective April 9, 2018 (Incorporated by reference to Exhibit 10(a) to GE’s Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2015~~2018 (Commission file number 001-00035)).

	~~(r)~~	First Restatement of the General Electric International Employee Stock Purchase Plan effective May 1, 2002 (Incorporated by reference to Exhibit 4.1 to GE's Registration Statement on Form S-8, dated November 13, 2009, File No. 333-163106 (Commission file number 001-00035)).

	~~(s)~~	~~Time Sharing Agreement dated November 22, 2010 between General Electric Company and Jeffrey R. Immelt (Incorporated by reference to Exhibit 10(z) to~~ ~~GE's~~ ~~Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (Commission file number 001-00035)).~~
	~~(t)~~(x)	Employment Agreement between L. Kevin Cox and General Electric Company, effective January 22, 2019.*
	(y)	GE Performance Stock Unit Grant Agreement for David Joyce, effective December 23, 2019.*
	(z)	Employment Agreement between Carolina Dybeck Happe and General Electric Company, effective November 24, 2019.*
	(aa)	Amended and Restated Agreement, dated April 10, 2015, between General Electric Company and General Electric Capital Corporation (Incorporated by reference to Exhibit 10 to ~~GE's~~GE’s Current Report on Form 8-K, dated April 10, 2015 (Commission file number 001-00035)).
	~~(u)~~(bb)	~~Early Retirement~~ Credit Agreement ~~& Release between~~dated as of June 22, 2018 among General Electric Company, as the borrower, JPMorgan Chase Bank, N.A. and Keith Sherin effective January 8, 2017.*
Citibank, N.A., as co-administrative agents, and the lenders party thereto (Incorporated by reference to Exhibit 10(b) to GE’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018) and Amendment No. 1 to Credit Agreement dated March 12, 2019 (Incorporated by reference to Exhibit 10(b) to GE’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019) (Commission file number 001-00035)).
(11)	Statement re Computation of Per Share Earnings.**

~~12(a)~~	Computation of Ratio of Earnings to Fixed Charges.*

~~12(b)~~	Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.*

(21)	Subsidiaries of Registrant.*

~~GE 2016 FORM 10-K 225~~

(23)		Consent of Independent Registered Public Accounting Firm.*

(24)		Power of Attorney.*

31(a)		Certification Pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.*

31(b)		Certification Pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.*

(32)		Certification Pursuant to 18 U.S.C. Section 1350.*

99(a)		Undertaking for Inclusion in Registration Statements on Form S-8 of General Electric Company (Incorporated by reference to Exhibit 99(b) to General Electric Annual Report on Form 10-K (Commission file number 001-00035) for the fiscal year ended December 31, 1992).
99(b)
~~99(b)~~		Computation of Ratio of Earnings to Fixed Charges (Incorporated by reference to Exhibit 12(a) to GE ~~Capital's~~Capital’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (Commission file number 001-06461)).
99(c)
~~99(c)~~		Supplement to Present Required Information in Searchable Format*
		Format.*
(101)		The following materials from General Electric Company's Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2018, formatted inas Inline XBRL (eXtensible Business Reporting Language); (i) Statement of Earnings (Loss) for the years ended December 31, ~~2016, 2015~~2019, 2018 and ~~2014,~~2017, (ii) Consolidated Statement of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014, (iii) Consolidated Statement of Changes in Shareowners' Equity for the years ended December 31, 2016, 2015 and 2014, (iv) Statement of Financial Position at December 31, ~~2016~~2019 and ~~2015, (v)~~2018, (iii) Statement of Cash Flows for the years ended December 31, ~~2016, 2015~~2019, 2018 and ~~2014,~~2017, (iv) Statement of Comprehensive Income (Loss) for the years ended December 31, 2019, 2018 and 2017, (v) Statement of Changes in Shareholders' Equity for the years ended December 31, 2019, 2018 and 2017, and (vi) the Notes to Consolidated Financial Statements.*
(104)	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*	Filed electronically herewith.
**	Information required to be presented in Exhibit 11 is provided in Note 18 to the consolidated financial statements in this Form 10-K Report in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification 260, Earnings Per Share.

GE2019 FORM 10-K 125



OTHER INFORMATION

~~GE 2016 FORM 10-K 226~~

FORM 10-K CROSS REFERENCE INDEX



Item Number		Page(s)
Part I
Item 1.	Business	~~18-19, 33-63, 74-75, 98-99~~3, 7, 9-20

Item 1A.	Risk Factors	~~120-125~~50-57
Item 1B.	Unresolved Staff Comments	Not applicable

Item 2.	Properties	193

Item 3.	Legal Proceedings	~~126-127~~106-109

Item 4.	Mine Safety Disclosures	Not applicable

Part II
Item 5.	Market for ~~Registrant's~~Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	~~26, 117~~50

Item 6.	Selected Financial Data	~~116~~49

Item 7.	~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~20-115~~4-49

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	~~80-81, 118-119~~28-30, 102-104

Item 8.	Financial Statements and Supplementary Data	~~131-221~~62-120

Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	Not applicable

Item 9A.	Controls and Procedures	~~129~~58

Item 9B.	Other Information	Not applicable
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	~~222~~122

Item 11.	Executive Compensation	(a)

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	(b), ~~Note 16~~99-100

Item 13.	Certain Relationships and Related Transactions, and Director Independence	(c)

Item 14.	Principal ~~Accounting~~Accountant Fees and Services	(d)
Part IV
Item 15.	Exhibits and Financial Statement Schedules	~~223-226~~123-125
Item 16.	Form 10-K Summary	~~3-16, (e)~~Not applicable

Signatures		~~228~~127


(a)	Incorporated by reference to ~~"Compensation"~~“Compensation” in the ~~2017~~2020 Proxy Statement.


(b)	Incorporated by reference to ~~"Stock~~“Stock Ownership ~~Information" and "Key Data About Our Grant Practices"~~Information” in the ~~2017~~2020 Proxy Statement.


(c)	Incorporated by reference to ~~"Related~~“Related Person ~~Transactions"~~Transactions” and ~~"How~~“How We Assess Director ~~Independence"~~Independence” in the ~~2017~~2020 Proxy Statement.


(d)	Incorporated by reference to ~~"Independent~~“Independent Auditor ~~Information"~~Information” in the ~~2017~~2020 Proxy Statement.

~~(e)~~

~~The Introduction & Summary does not include Part III information because it will be incorporated by reference to the 2017 Proxy Statement.~~

GE ~~2016~~2019 FORM 10-K ~~227~~ 126

~~OTHER INFORMATION~~

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this annual report on Form 10-K for the fiscal year ended December 31, ~~2016,~~2019, to be signed on its behalf by the undersigned, and in the capacities indicated, thereunto duly authorized in the City of Boston and Commonwealth of Massachusetts on the 24^th day of February ~~2017.~~2020.

General Electric Company

(Registrant)



By	/s/ Jamie S. Miller
	Jamie S. Miller Senior Vice President and Chief Financial Officer (Principal Financial Officer)

By ~~/s/ Jeffrey S. Bornstein~~

~~Jeffrey S. Bornstein~~

~~Senior Vice President and~~

~~Chief Financial Officer~~

~~(Principal Financial Officer)~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



	Signer	Title	Date

	/s/ ~~Jeffrey~~Jamie S. ~~Bornstein~~Miller	Principal Financial Officer	February 24, ~~2017~~2020
	~~Jeffrey~~Jamie S. ~~Bornstein~~ Miller Senior Vice President and Chief Financial Officer

	/s/ ~~Jan R. Hauser~~Thomas S. Timko	Principal Accounting Officer	February 24, ~~2017~~2020
	~~Jan R. Hauser~~ Thomas S. Timko Vice President, Chief Accounting Officer and Controller

	/s/ ~~Jeffrey R. Immelt~~ H. Lawrence Culp, Jr.	Principal Executive Officer	February 24, 2020
	Jeffrey R. ImmeltH. Lawrence Culp, Jr. Chairman of the Board of Directors	~~Principal Executive Officer~~	~~February 24, 2017~~

	Sébastien M. Bazin*	Director
	W. Geoffrey Beattie*	~~Director~~
	John J. Brennan*	~~Director~~
	Francisco D'Souza*	Director
	Marijn E. DekkersEdward P. Garden	Director
	Peter B. HenryThomas W. Horton	Director
	Susan HockfieldRisa Lavizzo-Mourey	Director
	Andrea JungCatherine A. Lesjak	Director
	Robert W. LanePaula Rosput Reynolds	Director
	Rochelle B. Lazarus*	~~Director~~
	Lowell C. McAdam*	~~Director~~
	Steven M. Mollenkopf*	~~Director~~
	James J. Mulva*	~~Director~~
	James E. Rohr*	~~Director~~
	Mary L. SchapiroLeslie F. Seidman	Director
	James S. Tisch*	Director


	A majority of the Board of Directors


*By	/s/ Christoph A. Pereira
	Christoph A. Pereira Attorney-in-fact
	February 24, ~~2017~~2020

GE ~~2016~~2019 FORM 10-K ~~228~~ 127

~~(Mark One)~~
☑ ~~Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934~~

~~For the fiscal year ended December 31, 2016~~
or
☐ ~~Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934~~

~~For the transition period from ___________to ___________~~

~~Commission file number 001-00035~~

~~General Electric Company~~ ~~(Exact name of registrant as specified in charter)~~

New York				14-0689340
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)

~~41 Farnsworth~~5 Necco Street,	Boston	MA	02210	~~(617) 443-3000~~
(Address of principal executive offices)			(Zip Code)	~~(Telephone No.)~~



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.06 per share	GE	New York Stock Exchange
Floating Rate Notes due 2020	GE 20E	New York Stock Exchange
0.375% Notes due 2022	GE 22A	New York Stock Exchange
1.250% Notes due 2023	GE 23E	New York Stock Exchange
0.875% Notes due 2025	GE 25	New York Stock Exchange
1.875% Notes due 2027	GE 27E	New York Stock Exchange
1.500% Notes due 2029	GE 29	New York Stock Exchange
7 1/2% Guaranteed Subordinated Notes due 2035	GE /35	New York Stock Exchange
2.125% Notes due 2037	GE 37	New York Stock Exchange



Large accelerated filer☑	☑	Accelerated filer	☐
Non-accelerated filer ☐	☐	Smaller reporting company	☐
Emerging growth company	☐

~~REVENUES PERFORMANCE~~		~~GE CFOA~~
			~~GE Capital Dividend~~ Industrial CFOA*
~~(a) Including the results of Alstom for November and December of both 2015 and 2016~~		~~(a) Industrial CFOA was $12.2 billion excluding deal taxes of $(0.2) billion related to the sale of our Signaling business~~ ~~(b) Industrial CFOA was $11.6 billion excluding deal taxes of $(1.4) billion related to the sale of our Appliances business and $(0.3) billion of pension funding~~ ~~(c) Included $(0.3) billion related to Alstom in both 2015 and 2016~~
~~INDUSTRIAL ORDERS~~		~~INDUSTRIAL BACKLOG~~
	~~Equipment~~ ~~Services~~		~~Equipment~~ ~~Services~~
~~(a) Included $2.5 billion related to Alstom~~ ~~(b) Included $17.4 billion related to Alstom~~		~~(a) Included $29.2 billion related to Alstom~~ ~~(b) Included $31.2 billion related to Alstom~~
~~INDUSTRIAL MARGINS~~		~~INDUSTRIAL OPERATING PROFIT MARGINS (NON-GAAP)~~^(a)

(a) 12.0%, excluding (7.9)% related to Alstom* (b) 12.1%, excluding 5.9% related to Alstom*		~~(a) Excluded gains, non-operating pension costs, restructuring and other, noncontrolling interests, GE Capital preferred stock dividends, as well as the results of Alstom~~

	~~Power~~	~~Aviation~~	~~Energy Connections & Lighting~~^(a)
	~~Renewable Energy~~
TABLE OF CONTENTS
	~~Healthcare~~Page

About General Electric	3
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)	~~Oil~~ 4
Consolidated Results	4
Segment Operations	8
Corporate Items and Eliminations	20
Other Consolidated Information	22
Capital Resources and Liquidity	25
Critical Accounting Estimates	34
Other Items	37
Non-GAAP Financial Measures	43
Other Financial Data	49
Risk Factors	50
Legal Proceedings	57
Management and Auditor's Reports	58
Audited Financial Statements and Notes	62
Statement of Earnings (Loss)	62
Statement of Financial Position	64
Statement of Cash Flows	66
Statement of Comprehensive Income (Loss)	68
Statement of Changes in Shareholders' Equity	68
Note 1 Basis of Presentation and Summary of Significant Accounting Policies	69
Note 2 Businesses Held for Sale and Discontinued Operations	74
Note 3 Investment Securities	77
Note 4 Current and Long-term Receivables	78
Note 5 Financing Receivables and Allowances	80
Note 6 Inventories	81
Note 7 Property, Plant and Equipment and Operating Leases	81
Note 8 Goodwill and Other Intangible Assets	82
Note 9 Contract and Other Deferred Assets & ~~Gas~~Progress Collections and Deferred Income	84
Note 10 All Other Assets	85
Note 11 Borrowings	86
Note 12 Insurance Liabilities and Annuity Benefits	87
Note 13 Postretirement Benefit Plans	89
Note 14 Current and All Other Liabilities	94
Note 15 Income Taxes	94
Note 16 Shareholders’ Equity	98
Note 17 Share-Based Compensation	99
Note 18 Earnings Per Share Information	100
Note 19 Other Income	100
Note 20 Fair Value Measurements	101
Note 21 Financial Instruments	102
Note 22 Variable Interest Entities	104
Note 23 Commitments, Guarantees, Product Warranties and Other Loss Contingencies	105
Note 24 Cash Flows Information	110
Note 25 Intercompany Transactions	112
Note 26 Operating Segments	113
Note 27 Guarantor Financial Information	115
Note 28 Baker Hughes Summarized Financial Information	119
Note 29 Quarterly Information (unaudited)	120
Forward-Looking Statements	121
Directors, Executive Officers and Corporate Governance	122
Exhibits and Financial Statement Schedules	~~Transportation~~ 123
Form 10-K Cross Reference Index	126
Signatures	127

·
•	~~General Electric or the Company~~Consolidated – the ~~parent company, General Electric Company.~~adding together of GE and GE Capital, giving effect to the elimination of transactions between the two. We present consolidated results in the left-side column of our consolidated Statements of Earnings (Loss), Financial Position and Cash Flows.

·
•	~~General Electric Capital Corporation or GECC~~ ~~– predecessor to~~ GE Capital ~~Global Holdings, LLC.~~

·
•	GE ~~consolidated~~ – the adding together of GE and GE Capital, giving effect to the elimination of transactions between the two. We present the results of GE consolidated in the left-side column of our consolidated statements of earnings, financial position and cash flows.

~~NET EARNINGS (LOSS)~~		~~NET EARNINGS (LOSS) PER SHARE~~

~~OPERATING EARNINGS (NON-GAAP)~~		~~OPERATING EARNINGS PER SHARE (NON-GAAP)~~

~~INDUSTRIAL OPERATING +~~ ~~VERTICALS EARNINGS (NON-GAAP)~~		~~INDUSTRIAL OPERATING +~~ ~~VERTICALS EPS (NON-GAAP)~~

~~SHAREHOLDER INFORMATION~~
~~RETURNED $30.5 BILLION TO~~ ~~SHAREOWNERS IN 2016~~ ~~Dividends $8.5 billion~~ ~~Stock buyback $22.0 billion~~	~~ANNUAL MEETING~~ ~~General Electric's 2017 Annual Meeting of~~ ~~Shareowners will be held on April 26, 2017,~~ ~~in Asheville, NC~~
~~FIVE-YEAR PERFORMANCE GRAPH~~

~~2016 GEOGRAPHIC REVENUES~~		~~2016 SEGMENT REVENUES~~

~~REVENUES~~	~~INDUSTRIAL REVENUES~~		~~FINANCIAL SERVICES REVENUES~~

~~(a)Includes $2.0 billion related to Alstom~~ ~~(b)Includes $13.0 billion related to Alstom~~	~~(a)Includes $2.0 billion related to Alstom~~ ~~(b)Includes $13.0 billion related to Alstom~~
~~CONTINUING EARNINGS(a)~~	~~CONTINUING EARNINGS~~ ~~PER SHARE(a)~~

~~(a)Attributable to GE common shareowners~~

~~REVENUE COMMENTARY: 2016 – 2015~~		~~EARNINGS COMMENTARY: 2016 – 2015~~
Consolidated revenues increased $6.3 billion, or 5%, primarily driven by increased Industrial revenues of $6.6 billion and increased Financial Services revenues of $0.1 billion, partially offset by an increase in eliminations between Industrial and Financial Services of $0.4 billion. The overall foreign currency impact on consolidated revenues was a decrease of $1.3 billion. ·~~Industrial revenues increased $6.6 billion, or 6%~~ due to increased industrial segment revenues of $4.4 billion, or 4%, as increases at Power, Renewable Energy, Aviation and Healthcare were partially offset by decreases at Oil & Gas, Transportation and Energy Connections & Lighting. This increase in industrial segment revenues was primarily driven by the net effects of acquisitions of $11.2 billion, offset by the net effects of dispositions of $5.6 billion and the effects of a stronger U.S. dollar of $0.8 billion. Excluding the effects of acquisitions, dispositions and translational currency exchange, industrial segment organic revenues* decreased $0.5 billion. ~~Industrial revenues increased an additional $2.2 billion at Corporate as current year gains were $1.9 billion higher than 2015 gains.~~ ·~~Financial Services revenues increased $0.1 billion, or 1%~~, primarily due to lower impairments, higher gains and the effects of acquisitions, partially offset by organic revenue declines, the effects of dispositions and the effects of translational currency exchange.		Consolidated continuing earnings increased $7.5 billion, primarily driven by decreased Financial Services losses of $6.7 billion, increased Industrial continuing earnings of $0.5 billion and a net decrease of $0.2 billion resulting from income taxes, and interest and other financial charges. The overall foreign currency impact on consolidated earnings was a decrease of $0.3 billion. ·~~Industrial earnings increased $0.5 billion~~ due to increased earnings at Corporate of $0.8 billion, or 17%, as current year gains were $1.9 billion higher and pension costs were $0.7 billion lower than 2015. These increases to earnings were partially offset by $1.8 billion of higher restructuring and other charges. Industrial earnings decreased due to decreased industrial segment earnings of $0.4 billion, or 2%, as decreases at Oil & Gas, Energy Connections & Lighting, and Transportation were partially offset by increases at Aviation, Power, Healthcare and Renewable Energy. This decrease in industrial segment earnings, was primarily driven by decreases in organic operating profit* of $0.8 billion and the net effect of dispositions of $0.5 billion, partially offset by the net effect of acquisitions of $0.9 billion. ·~~Financial Services losses decreased $6.7 billion, or 84%, primarily due to the absence of the 2015 charges associated with the GE Capital Exit Plan.~~ ·In addition to the effects on net earnings described above, earnings per share amounts were also positively impacted by the reduction in number of outstanding common shares compared to 2015. The average number of shares outstanding used to calculate 2016 earnings per share amounts was 9% lower than 2015, primarily due to the 2015 Synchrony Financial share exchange and ongoing share buyback activities funded in large part by dividends from GE Capital.

~~REVENUE COMMENTARY: 2015 – 2014~~			~~EARNINGS COMMENTARY: 2015 – 2014~~
Consolidated revenues increased $0.2 billion, primarily driven by increased Industrial revenues of $0.4 billion and a decrease in eliminations between Industrial and Financial Services of $0.4 billion, partially offset by decreased Financial Services revenues of $0.5 billion. The overall foreign currency impact on consolidated revenues was a decrease of $4.9 billion. ·~~Industrial revenues increased $0.4 billion~~ ~~due an increase at Corporate of $1.3 billion, or 75%, as 2015 gains were $1.4 billion higher than 2014 year gains.~~ This was offset by decreases in industrial segment revenues of $0.9 billion, or 1%, as decreases at Oil & Gas, Healthcare and Renewable Energy were partially offset by increases at Power, Aviation, Energy Connections & Lighting and Transportation. The $0.9 billion decrease in industrial segment revenues was primarily driven by the translational effects of a stronger U.S. dollar of $4.8 billion and the net effects of dispositions of $1.1 billion, partially offset by the net effects of acquisitions of $2.2 billion. Excluding the effects of acquisitions, dispositions and currency exchange, industrial segment organic revenues* increased by $2.8 billion, or 3%. ·~~Financial Services revenues decreased $0.5 billion, or 5%~~, primarily due to organic revenue declines, primarily resulting from lower ending net investment (ENI), lower gains and higher impairments, partially offset by the effects of acquisitions and dispositions.		Consolidated continuing earnings decreased $7.9 billion, or 83%, primarily driven by decreased Financial Services net earnings of $9.2 billion, partially offset by an increase in Industrial continuing earnings of $1.3 billion. The overall foreign currency impact on consolidated earnings was a decrease of $0.6 billion. ·~~Industrial earnings increased 1.3 billion, or 11%,~~ due to increased industrial segment earnings of $0.2 billion, or 1%, as increases at Aviation, Energy Connections & Lighting, Transportation and Power were partially offset by decreases at Oil & Gas, Renewable Energy and Healthcare. This increase in industrial segment earnings was primarily driven by increases in organic operating profit* of $1.2 billion, partially offset by the translational currency exchange effects of a stronger U.S. dollar of $0.7 billion, net acquisitions of $0.1 billion and net dispositions of $0.2 billion. Industrial earnings at Corporate increased an additional $1.1 billion, or 18%, as 2015 gains were $1.4 billion higher than 2014 gains, partially offset by $0.5 billion of higher Principal retirement plan costs in 2015. ·~~Financial Services net earnings decreased $9.2 billion, primarily due to 2015 charges associated with the GE Capital Exit Plan.~~
MD&A	CONSOLIDATED RESULTS



Equipment	$	45.0	$	49.3	$	48.8
Services	45.3		45.5		46.5
Total orders	$	90.3	$	94.8	$	95.3



ABOUT GENERAL ELECTRIC



(In billions; per-share amounts in dollars and diluted)	2019			2018			2017

Continuing earnings (loss) attributable to GE common shareholders	$	—		$	(21.4	)	$	(8.7	)
Continuing earnings (loss) per share	$	(0.01	)	$	(2.47	)	$	(1.00	)



										V%
(Dollars in billions)	2019			2018			2017			2019-2018		2018-2017

U.S.	$	39.4		$	40.0		$	41.5		(2)	%	(4)	%
Non-U.S.
Europe	19.1			19.8			18.7
Asia	20.2			19.3			18.3
Americas	6.3			7.9			7.8
Middle East and Africa	10.3			10.1			13.0
Total Non-U.S.	$	55.8		$	57.1		$	57.8		(2)	%	(1)	%
Total geographic revenues	$	95.2		$	97.0		$	99.3		(2)	%	(2)	%
Non-U.S. revenues as a % of consolidated revenues	59		%	59		%	58		%

·
	~~The translational foreign exchange impact is included within Foreign Exchange.~~
MD&A	SEGMENT OPERATIONS



SUMMARY OF REPORTABLE SEGMENTS (In millions)	2019			2018			2017

Power	$	18,625		$	22,150		$	29,426
Renewable Energy	15,337			14,288			14,321
Aviation	32,875			30,566			27,013
Healthcare	19,942			19,784			19,017
Total industrial segment revenues	86,778			86,789			89,776
Capital	8,741			9,551			9,070
Total segment revenues	95,519			96,339			98,847
Corporate items and eliminations	(305		)	673			433
Consolidated revenues	$	95,214		$	97,012		$	99,279

Power	$	386		$	(808	)	$	1,894
Renewable Energy	(666		)	292			728
Aviation	6,820			6,466			5,370
Healthcare	3,896			3,698			3,488
Total industrial segment profit	10,436			9,647			11,479
Capital	(530		)	(489		)	(6,765		)
Total segment profit	9,906			9,158			4,714
Corporate items and eliminations	(2,212		)	(2,837		)	(3,798		)
GE goodwill impairments	(1,486		)	(22,136		)	(1,165		)
GE interest and other financial charges	(2,115		)	(2,415		)	(2,538		)
GE non-operating benefit costs	(2,828		)	(2,740		)	(2,409		)
GE benefit (provision) for income taxes	(1,309		)	(467		)	(3,493		)
Earnings (loss) from continuing operations attributable to GE common shareholders	(44		)	(21,438		)	(8,689		)
Earnings (loss) from discontinued operations, net of taxes	(5,335		)	(1,363		)	(312		)
Less net earnings (loss) attributable to noncontrolling interests, discontinued operations	60			1			(81		)
Earnings (loss) from discontinued operations, net of taxes and noncontrolling interests	(5,395		)	(1,364		)	(231		)
Consolidated net earnings (loss) attributable to GE common shareholders	$	(5,439	)	$	(22,802	)	$	(8,920	)

SUMMARY OF OPERATING SEGMENTS

	General Electric Company and consolidated affiliates
(In millions)		2016		2015		2014		2013		2012

Revenues
Power	$	26,827	$	21,490	$	20,580	$	19,315	$	20,364
Renewable Energy		9,033		6,273		6,399		4,824		7,373
Oil & Gas		12,898		16,450		19,085		17,341		15,539
Aviation		26,261		24,660		23,990		21,911		19,994
Healthcare		18,291		17,639		18,299		18,200		18,290
Transportation		4,713		5,933		5,650		5,885		5,608
Energy Connections & Lighting		15,133		16,351		15,724		15,907		15,379
Total industrial segment revenues		113,156		108,796		109,727		103,383		102,548
Capital		10,905		10,801		11,320		11,267		11,268
Total segment revenues		124,061		119,597		121,047		114,650		113,816
Corporate items and eliminations		(368)		(2,211)		(3,863)		(1,405)		(1,228)
Consolidated revenues	$	123,693	$	117,386	$	117,184	$	113,245	$	112,588

Segment profit
Power	$	4,979	$	4,502	$	4,486	$	4,328	$	4,368
Renewable Energy		576		431		694		485		914
Oil & Gas		1,392		2,427		2,758		2,357		2,064
Aviation		6,115		5,507		4,973		4,345		3,747
Healthcare		3,161		2,882		3,047		3,048		2,920
Transportation		1,064		1,273		1,130		1,166		1,031
Energy Connections & Lighting		311		944		677		491		442
Total industrial segment profit		17,598		17,966		17,764		16,220		15,487
Capital		(1,251)		(7,983)		1,209		401		1,245
Total segment profit		16,347		9,983		18,973		16,621		16,731
Corporate items and eliminations		(4,226)		(5,108)		(6,225)		(6,002)		(4,719)
GE interest and other financial charges		(2,026)		(1,706)		(1,579)		(1,333)		(1,353)
GE provision for income taxes		(967)		(1,506)		(1,634)		(1,667)		(2,013)
Earnings from continuing operations
attributable to GE common shareowners		9,128		1,663		9,535		7,618		8,646
Earnings (loss) from discontinued
operations, net of taxes		(954)		(7,495)		5,855		5,475		5,047
Less net earnings (loss) attributable to
noncontrolling interests, discontinued operations		(1)		312		157		36		53
Earnings (loss) from discontinued operations,
net of taxes and noncontrolling interests		(952)		(7,807)		5,698		5,439		4,995
Consolidated net earnings (loss)
attributable to GE common shareowners	$	8,176	$	(6,145)	$	15,233	$	13,057	$	13,641

~~INDUSTRIAL SEGMENT EQUIPMENT~~ ~~& SERVICES REVENUES~~		~~INDUSTRIAL SEGMENT PROFIT~~
	~~Equipment(a)~~ ~~Services(b)~~
~~(a)~~In 2015, $59.8 billion, excluding $1.1 billion related to Alstom.* In 2016, $52.7 billion, excluding $8.1 billion related to Alstom* ~~(b)~~In 2015, $47.1 billion, excluding $0.8 billion related to Alstom.* In 2016, $47.5 billion, excluding $4.9 billion related to Alstom*		~~(a)~~$18.1 billion, excluding $(0.2) billion related to Alstom* ~~(b)~~$16.8 billion, excluding $0.8 billion related to Alstom*
~~2016 – 2015 COMMENTARY~~
·Industrial segment revenues increased $4.4 billion, or 4%, primarily driven by increases at Power and Renewable Energy, mainly due to the effects of the Alstom acquisition, and an organic increase at Renewable Energy. This increase in industrial segment revenues was partially offset by lower revenues at Oil & Gas and Transportation, including the effects of foreign currency exchange of $0.3 billion at Oil & Gas. ·Industrial segment acquisition revenues, driven by Alstom, also positively affected Energy Connections & Lighting, however, this was mostly offset by the effects of disposition revenues related to the sale of Appliances in the second quarter of 2016 and sales of Meters, Intelligent Platforms Embedded Systems Products and Signaling businesses in 2015. ·Industrial segment profit decreased $0.4 billion, or 2%, mainly driven by lower earnings organically at Oil & Gas and Energy Connections & Lighting, as well as an unfavorable impact of foreign exchange, partially offset by higher earnings at Aviation, Power, Healthcare and Renewable Energy. ·Industrial segment operating profit margin decreased 90 bps to 15.6%, primarily driven by the effects of Alstom results. Excluding Alstom*, industrial segment operating profit margin was 16.8%, compared with 17.0% in 2015, reflecting core decreases at Power, Oil & Gas and Energy Connections & Lighting, that more than offset increases at Aviation, Healthcare and Transportation.

~~2015 – 2014 COMMENTARY~~
·Industrial segment revenues decreased $0.9 billion, or 1%, primarily driven by decreases at Oil & Gas, mainly related to the effects of foreign currency exchange and a decrease at Oil & Gas organically. This decrease was partially offset by higher revenues at Power, Energy Connections & Lighting, and Aviation, mainly as a result of organic increases, as well as the effects of the Alstom acquisition at Power and Energy Connections & Lighting, partially offset by the effects of dispositions related to the sale of Intelligent Platforms Embedded Systems Products and Wayne in 2015. ·Industrial segment profit increased $0.2 billion, or 1%, mainly driven by higher earnings at Aviation, Energy Connections & Lighting and Transportation, partially offset by lower earnings at Oil & Gas and Renewable Energy, as well as an unfavorable impact of foreign exchange. · Industrial segment operating profit margin increased 30 bps to 16.5% primarily driven by Aviation and Transportation, partially offset by the effects of the Alstom acquisition. Excluding Alstom*, industrial segment operating profit margin was 17.0%, compared with 16.2% in 2014, reflecting core increases at Power and Energy Connections & Lighting.

~~Leader: Steve Bolze~~		~~Headquarters & Operations~~
	·~~Senior Vice President, GE and President & CEO, GE Power~~ ·~~Over 20 years of service with General Electric~~		·~~22% of segment revenues~~ ·~~24% of industrial segment revenues~~ ·~~28% of industrial segment profit~~ ·~~Headquarters: Schenectady, NY~~ ·~~Serving customers in 140+ countries~~ ·~~Employees: approximately 57,000~~
~~Products & Services~~
	Power serves power generation, industrial, government and other customers worldwide with products and services related to energy production and water reuse. Our products and technologies harness resources such as oil, gas, coal, diesel, nuclear and water to produce electric power and include gas and steam turbines, full balance of plant, upgrade and service solutions, as well as data-leveraging software.

		~~2016 GEOGRAPHIC REVENUES: $ 26.8 BILLION~~		~~ORDERS~~
			~~Equipment~~ ~~Services~~
MD&A	~~(a) Includes $1.0 billion related to Alstom~~ ~~(b) Includes $10.0 billion related to Alstom~~
	~~2016 SUB-SEGMENT REVENUES~~	~~BACKLOG~~
	~~(a) Includes Water & Process Technologies, Distributed Power and GE Hitachi Nuclear~~		~~Equipment~~ ~~Services~~
		~~(a) Includes $15.5 billion related to Alstom~~ ~~(b) Includes $18.3 billion related to Alstom~~
	~~EQUIPMENT/SERVICES REVENUES~~	~~UNIT SALES~~

	~~Services Equipment~~
~~SIGNIFICANT TRENDS & DEVELOPMENTS~~SEGMENT OPERATIONS



	Orders		Sales
(In units)	2019	2018	2019	2018

GE Gas Turbines	74	52	53	59
Heavy-Duty Gas Turbines(a)	63	43	38	42
HA-Turbines(b)	18	10	11	12
Aeroderivatives(a)	11	9	15	17
GE Gas Turbine Gigawatts(c)	13.6	8.0
(a) Heavy-Duty Gas Turbines and Aeroderivatives are subsets of GE Gas Turbines. (b) HA-Turbines are a subset of Heavy-Duty Gas Turbines. (c) Gigawatts reported associated with financial orders in the periods presented.



Gas Power	$	13.1	$	13.3	$	17.1
Power Portfolio	5.5		8.9		12.3
Total segment revenues	$	18.6	$	22.1	$	29.4



Equipment	$	6.2		$	8.1		$	12.9
Services	12.4			14.1			16.5
Total segment revenues(a)	$	18.6		$	22.1		$	29.4

Segment profit(b)	$	0.4		$	(0.8	)	$	1.9
Segment profit margin	2.1		%	(3.6		)%	6.4		%

·
	~~The integration of Alstom's Thermal business has yielded significant efficiencies in supply chain, service infrastructure, new product development and SG~~
MD&A ~~costs.~~	SEGMENT OPERATIONS

~~SEGMENT REVENUES~~		~~SEGMENT PROFIT~~		~~SEGMENT PROFIT MARGIN~~
For the year ended December 31, 2018, segment orders were down $7.4 billion (25%), segment revenues were down $7.3 billion (25%) and segment profit was down $2.7 billion. Backlog as of December 31, 2018 decreased $4.7 billion (5%) primarily due to a reduction in services backlog of $4.2 billion attributable to Gas Power and due to the absence of our Distributed Power and Industrial Solutions businesses in Power Portfolio. Orders decreased $4.0 billion (15%) organically mainly due to Gas Power lower gas turbine and services orders. Revenues decreased $4.5 billion (17%) organically. Equipment revenues decreased primarily at Gas Power, due to lower unit sales, including 60 fewer gas turbines, 26 fewer Heat Recovery Steam Generators and 23 fewer aeroderivative units. Services revenues also decreased primarily due to 27 fewer AGP upgrades. Profit decreased $2.4 billion organically due to negative variable cost productivity driven by warranty, project cost updates as well as liquidated damages, and various assumption updates for unfavorable pricing, lower utilization, and cost updates on our long-term service agreements recognized by Gas Power. (a) $20.6 billion, excluding $0.9 billion related to Alstom* (b) $20.6 billion, excluding $6.3 billion related to Alstom*	~~Equipment~~ ~~Services~~	(a) $4.6 billion, excluding $(0.1) billion related to Alstom* (b) $4.4 billion, excluding $0.6 billion related to Alstom*		(a) 22.3%, excluding (8.7)% related to Alstom* (b) 21.5%, excluding 9.0% related to Alstom*

SEGMENT REVENUES & PROFIT WALK:					COMMENTARY:
2016 – 2015					2016 – 2015
					Segment revenues up $5.3 billion (25%); Segment profit up $0.5 billion (11%) as a result of: · The increase in revenues was driven primarily by the effects of the Alstom acquisition, including higher sales at Steam Power Systems, as well as higher volume at Power Services, partially offset by the impact of a stronger U.S. dollar and lower other income. Core revenues were flat. · The increase in profit was mainly driven by the effects of the Alstom acquisition, as well as material deflation, partially offset by lower cost productivity and an unfavorable business mix, driven by HA-Turbine shipments in the current year.
	Revenues		Profit
2015	$	21.5	$	4.5
Volume		0.1		-
Price		-		-
Foreign Exchange		(0.1)		-
(Inflation)/Deflation		N/A		0.1
Mix		N/A		(0.1)
Productivity		N/A		(0.1)
Other		(0.1)		(0.1)
Alstom		5.3		0.6
2016	$	26.8	$	5.0


2015 – 2014					2015 – 2014
					Segment revenues up $0.9 billion (4%); Segment profit was flat as a result of: · The increase in revenues was mainly driven by higher volume, primarily at Power Services, as well as the effects of the Alstom acquisition, partially offset by the impact of a stronger U.S. dollar. · Profit was flat as higher volume, the effects of deflation, higher prices, and favorable business mix were offset by lower productivity, including an increase in SG&A cost, the impact of a stronger U.S. dollar, and the effects of the Alstom acquisition.
	Revenues		Profit
2014	$	20.6	$	4.5
Volume		0.8		0.2
Price		0.1		0.1
Foreign Exchange		(0.8)		(0.1)
(Inflation)/Deflation		N/A		0.2
Mix		N/A		0.1
Productivity		N/A		(0.4)
Other		-		-
Alstom		0.9		(0.1)
2015	$	21.5	$	4.5

~~Leader: Jérôme Pécresse~~		~~Headquarters & Operations~~
	·~~Senior Vice President, GE and President & CEO, GE Renewable Energy~~ ·~~Former Alstom Renewable Power Executive Vice President~~		·~~7% of segment revenues~~ ·~~8% of industrial segment revenues~~ ·~~3% of industrial segment profit~~ ·~~Headquarters: Paris, France~~ ·~~Serving customers in 80+ countries~~ ·~~Employees: approximately 12,000~~
~~Products & Services~~
	GE Renewable Energy makes renewable power sources affordable, accessible, and reliable for the benefit of people everywhere. With one of the broadest technology portfolios in the industry, Renewable Energy creates value for customers with solutions from onshore and offshore wind, hydro, and emerging low carbon technologies. With operations in 40+ countries around the world, Renewable Energy can deliver solutions to where its customers need them most.

	~~2016 GEOGRAPHIC REVENUES: $ 9.0 BILLION~~	~~ORDERS~~
			~~Equipment~~ ~~Services~~
		~~(a) Includes $0.5 billion related to Alstom~~ ~~(b) Includes $1.8 billion related to Alstom~~
	~~2016 SUB-SEGMENT REVENUES~~	~~BACKLOG~~
			~~Equipment~~ ~~Services~~
		~~(a) Includes $5.3 billion related to Alstom~~ ~~(b) Includes $5.5 billion related to Alstom~~
	~~EQUIPMENT/SERVICES REVENUES~~	~~UNIT SALES~~

	~~Services Equipment~~
~~SIGNIFICANT TRENDS & DEVELOPMENTS~~

	~~Leader: Lorenzo Simonelli~~		~~Headquarters & Operations~~
(a)		·~~Senior Vice President, GE and President & CEO, GE Oil & Gas~~ ·~~Over 20 years of service with General Electric~~			·~~10% of~~Renewable Energy segment revenues ·~~11%~~ represent 18% and 16% of total industrial segment revenues ·8% and total segment revenues, respectively, for the year ended December 31, 2019.


(b)	Renewable Energy segment profit represents (6)% of total industrial segment profit ·~~Headquarters: London, UK~~ ·~~Serving customers in 140+ countries~~ ·~~Employees: approximately 34,000~~
~~Products & Services~~
		~~Oil & Gas serves all segments of~~ for the oil and gas industry, from drilling, completion, production and oil field operations, to transportation via liquefied natural gas (LNG) and pipelines. In addition, Oil & Gas provides industrial power generation and compression solutions to the refining and petrochemicals segments. Oil & Gas also delivers pipeline integrity solutions and a wide range of sensing, inspection and monitoring technologies. Oil & Gas exploits technological innovation from other GE segments, such as Aviation and Healthcare, to continuously improve oil and gas industry performance, output and productivity.year ended December 31, 2019.

	~~2016 GEOGRAPHIC REVENUES: $ 12.9 BILLION~~	~~ORDERS~~
			~~Equipment~~ ~~Services~~
		~~(a) Includes $0.1 billion related to Alstom~~
	~~2016 SUB-SEGMENT REVENUES~~	~~BACKLOG~~
			~~Equipment~~ ~~Services~~
	(a~~) Previously referred to as Measurement & Controls (M&C)~~	~~(a) Includes $0.1 billion related to Alstom~~
	~~EQUIPMENT/SERVICES REVENUES~~

	~~ServicesEquipment~~
~~SIGNIFICANT TRENDS & DEVELOPMENTS~~