2015 General Electric Annual Report EK409 – Engineering Economy A.J. Callis, Rachel Kinoshi, Patrick Leach, Deeplata Nand, Frank Savoca, Michael Stephenson, Solomon Utain Spring 2016 1 Contents Letter ............................................................................................................................................................. 3 Introduction .................................................................................................................................................. 4 Change 1: Sales of Goods Increase by $4,400,000,000 ................................................................................ 5 Change 2: Cost of Goods Sold Decreased by $3,220,000,000 .................................................................... 10 Change 3: Inventories Decreased by $780,000,000 ................................................................................... 15 Change 4: Accounts Receivable Decreased by $3,111,000,000 ................................................................. 20 Change 5: Accounts Payable Increased by $2,625,000,000........................................................................ 25 Change 6: Depreciation Increased by $550,000,000 .................................................................................. 30 Change 7: Dividend (per share) Increased by $0.18 .................................................................................. 35 Summary (Combined Effect) ....................................................................................................................... 40 2 Letter 3 Introduction The following report provides information regarding adjustments made to General Electric’s 2015 Annual Report. The changes made are as follows: Category Change Sales of Goods $4,400,000,000 Cost of Goods Sold ($3,220,000,000) Inventories ($780,000,000) Accounts Receivable ($3,111,000,000) Accounts Payable $2,625,000,000 Depreciation $550,000,000 Dividends $0.18 The effects of those changes are highlighted in the reports for Statement of Earnings, Statement of Financial Position, and Consolidated Statement of Changes in Shareowners’ Equity. The combined effect of these changes are shown in the final summary report. 4 Change 1: Sales of Goods Increase by $4,400,000,000 The $4,400,000,000 increase in sales of goods increases the company’s profits. The actual products are being sold at a higher price, but the number of goods sold remains the same. This increase the amount of taxes paid and the earnings per share of stock. Additionally, the increase in revenue for goods sold increases the amount of money in accounts receivable by 23 percent. Because the tax rate and account receivable ratio sum to larger than 100 percent, cash and equivalents decreases. Retained earnings of the company increase in the liabilities section to match the increase in assets. 5 Statement Of Earnings For the years ended December 31 (in millions; per share amounts in dollars) Revenue and other Income Sales of goods Sales of services Other Income GE Capital earnings from continuing operations GE Capital revenues from services Total Revenues and other income Cost and Expenses Cost of goods sold Cost of services sold Selling, general and administrative expenses Interest and other financial charges Investment contracts, insurance losses and insurance annuity benefits Other costs and expenses Total costs and expenses Earnings from continuing operations before income taxes Benefit (provision for income taxes) Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings (loss) Less net earnings (loss) attributable to noncontrolling interests Net earnings (loss) attributable to the Company Preferred stock dividends Net earnings (loss) attributable to GE common shareowners Amounts attributable to GE common shareowners Earnings from continuing operations Less net earnings (loss) attributable to noncontrolling interests, continuing operations Earnings from continuing operations attributable to the Company Preferred stock Dividends Earnings from continuing operations attributable to GE common shareowners Earnings (loss) from discontinued operations, net of taxes Less net earnings (loss) attributable to noncontrolling interests, discontinued operations Net earnings (loss) attributable to GE common shareowners 6 Old (2015) $ $ $ $ Change New 74,510 $ 31,298 2,227 9,350 117,386 4,400 $ 4,400 78,910 31,298 2,227 9,350 121,786 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) $ 4,400 (3,486) 914 914 914 914 $ 59,905 22,788 17,831 3,463 2,605 2,608 109,200 12,586 (9,971) 2,614 (7,495) (4,881) 332 (5,212) (18) (5,231) 1,700 $ 19 1,681 (18) 1,663 (7,495) 312 (6,145) $ 914 $ 914 914 914 $ 2,614 19 2,595 (18) 2,577 (7,495) 312 (5,231) Per-share amounts Earnings from continuing operations Diluted earnings per share Basic earnings per share Net earnings (loss) Diluted earnings (loss) per share Basic earnings (loss) per share Dividends declared per common share $ $ 0.17 $ 0.17 $ $ $ $ (0.61) $ (0.62) $ 0.92 $ 0.09 0.09 $ $ 0.26 0.26 0.09 $ 0.09 $ - $ (0.52) (0.53) 0.92 General Electric Company and Consolidated Affiliates Consolidated Statement of Changes in Shareowners' Equity (in millions) GE shareowners' equity balance at January 1 Net earnings (loss) attributable to the Company Dividends and other transactions with shareowners Redemption value adjustment for redeemable noncontrolling interests Other comprehensive income (loss) attributable to the Company Net sales (purchases) of shares for treasury(a) Changes in other capital Ending balance at December 31 Noncontrolling interests Total Equity balance at December 31 Old (2015) $ 128,159 $ (6,126) (9,155) (25) 1,644 (20,946) 4,724 98,274 1,864 $ 100,138 $ 7 Change 914 914 914 New $ 128,159 (5,212) (9,155) (25) 1,644 (20,946) 4,724 99,188 1,864 $ 101,052 Statement of Financial Position Old (2015) At December 31 (in millions, except share amounts) Assets Cash and equivalents Investments securities Current receivables Inventories Financing Receivables - net Other GE Capital receivables Property, plant and equipment Receivable from GE Capital Investment in GE Capital Goodwill Other intangible assets - net Contract assets All other assets Deferred income taxes Assets of businesses held for sale Assets of discontinued operations Total assets(a) Liabilities and equity Short-term borrowings Accounts payable, principally trade accounts Progress collections and price adjustments accrued Dividends Payable Other GE current liabilities Non-recourse borrowings of consolidated securitization entities Long-term borrowings Investment contracts, insurance liabilities and insurance annuity benefits Non-current compensation and benefits Change $ 70,483 $ 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 $ 492,692 $ $ All other liabilities Liabilites of businesses held for sale Liabilities of discontinued operations Total liabilities 8 49,892 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 $ New (99) $ 70,384 31,973 1,013 28,035 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 914 $ 493,606 - $ - 49,892 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 22,558 - 22,558 861 - 861 46,487 - 46,487 389,582 - 389,582 Redeemable noncontrolling interests Preferred stock (5,944,250 shares outstanding at year-end 2015 and no shares outstanding at year-end 2014) GECC preferred stock (no shares outstanding at year-end 2015 and 50,000 shares outstanding at year-end 2014) Common stock (9,379,288,000 and 10,057,380,000 shares outstanding at year-end 2015 and 2014, respectively) 2,972 - 2,972 6 - 6 - - - 702 - 702 460 - 460 (5,499) - (5,499) (80) - (80) Benefit plans (11,410) - (11,410) Other capital 37,613 - 37,613 Retained earnings 140,020 914 140,934 Less common stock held in treasury (63,539) - (63,539) 98,274 914 k 1,864 - 1,864 914 914 101,052 $ 493,606 Accumulated other comprehensive income (loss) - net attributable to GE (b) Investment securities Currency translation adjustment Cash flow hedges Total GE shareowners' equity Noncontrolling interests Total equity Total liabilities, redeemable noncontrolling interests and equity 100,138 $ 492,692 $ 9 Change 2: Cost of Goods Sold Decreased by $3,220,000,000 The $3,220,000,000 decrease in cost of goods sold cause changes in the statements of earnings. The decrease in cost is the result of production processes becoming more efficient thus making goods cheaper to produce. This increases profits so the amount of taxes paid and the earnings per share of stock increase. The company’s cash and equivalents increases as a result of cheaper production. To balance the report, liabilities were increased by a matching amount by increasing the amount of retained earnings. 10 Statement of Earnings For the years ended December 31 (in millions; per share amounts in dollars) Revenue and other Income Sales of goods Sales of services Other Income GE Capital earnings from continuing operations GE Capital revenues from services Total Revenues and other income Cost and Expenses Cost of goods sold Cost of services sold Selling, general and administrative expenses Interest and other financial charges Investment contracts, insurance losses and insurance annuity benefits Other costs and expenses Total costs and expenses Earnings from continuing operations before income taxes Benefit (provision for income taxes) Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings (loss) Less net earnings (loss) attributable to noncontrolling interests Net earnings (loss) attributable to the Company Preferred stock dividends Net earnings (loss) attributable to GE common shareowners Amounts attributable to GE common shareowners Earnings from continuing operations Less net earnings (loss) attributable to noncontrolling interests, continuing operations Earnings from continuing operations attributable to the Company Preferred stock Dividends Earnings from continuing operations attributable to GE common shareowners Earnings (loss) from discontinued operations, net of taxes Less net earnings (loss) attributable to noncontrolling interests, discontinued operations Net earnings (loss) attributable to GE common shareowners 11 Old (2015) $ $ $ $ Change New 74,510 $ 31,298 2,227 9,350 117,386 - $ - 74,510 31,298 2,227 9,350 117,386 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) $ (3,220) (3,220) 3,220 (2,551) 669 669 669 669 $ 56,685 22,788 17,831 3,463 2,605 2,608 105,980 11,406 (9,036) 2,369 (7,495) (5,126) 332 (5,457) (18) (5,476) 1,700 $ 19 1,681 (18) 1,663 (7,495) 312 (6,145) $ 669 $ 669 669 669 $ 2,369 19 2,350 (18) 2,332 (7,495) 312 (5,476) Per-share amounts Earnings from continuing operations Diluted earnings per share Basic earnings per share Net earnings (loss) Diluted earnings (loss) per share Basic earnings (loss) per share Dividends declared per common share $ $ 0.17 0.17 $ $ 0.07 0.07 $ $ 0.24 0.24 $ $ $ (0.61) (0.62) 0.92 $ $ $ 0.07 $ 0.07 $ - $ (0.54) (0.55) 0.92 General Electric Company and Consolidated Affiliates Consolidated Statement of Changes in Shareowners' Equity (in millions) GE shareowners' equity balance at January 1 Net earnings (loss) attributable to the Company Dividends and other transactions with shareowners Redemption value adjustment for redeemable noncontrolling interests Other comprehensive income (loss) attributable to the Company Net sales (purchases) of shares for treasury(a) Changes in other capital Ending balance at December 31 Noncontrolling interests Total Equity balance at December 31 Old (2015) Change New $ 128,159 $ - $ 128,159 (6,126) 669 (5,457) (9,155) (9,155) (25) (25) 1,644 1,644 (20,946) (20,946) 4,724 4,724 98,274 669 98,943 1,864 1,864 $ 100,138 $ 669 $ 100,807 12 Statement of Financial Position At December 31 (in millions, except share amounts) Assets Cash and equivalents Investments securities Current receivables Inventories Financing Receivables - net Other GE Capital receivables Property, plant and equipment Receivable from GE Capital Investment in GE Capital Goodwill Other intangible assets - net Contract assets All other assets Deferred income taxes Assets of businesses held for sale Assets of discontinued operations Total assets(a) Liabilities and equity Short-term borrowings Accounts payable, principally trade accounts Progress collections and price adjustments accrued Dividends Payable Other GE current liabilities Non-recourse borrowings of consolidated securitization entities Long-term borrowings Investment contracts, insurance liabilities and insurance annuity benefits Non-current compensation and benefits Old (2015) Change $ 70,483 $ 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 $ 492,692 $ $ All other liabilities Liabilites of businesses held for sale Liabilities of discontinued operations Total liabilities 13 49,892 $ 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 New 669 $ 71,152 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 669 $ 493,361 - $ - 49,892 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 22,558 - 22,558 861 - 861 46,487 - 46,487 389,582 - 389,582 Redeemable noncontrolling interests Preferred stock (5,944,250 shares outstanding at year-end 2015 and no shares outstanding at year-end 2014) GECC preferred stock (no shares outstanding at year-end 2015 and 50,000 shares outstanding at year-end 2014) Common stock (9,379,288,000 and 10,057,380,000 shares outstanding at year-end 2015 and 2014, respectively) Accumulated other comprehensive income (loss) - net attributable to GE (b) 2,972 - 2,972 6 - 6 - - - 702 - 702 460 - 460 (5,499) - (5,499) (80) - (80) Benefit plans (11,410) - (11,410) Other capital 37,613 - 37,613 Retained earnings 140,020 669 140,689 Less common stock held in treasury (63,539) - (63,539) 98,274 669 98,943 1,864 - 1,864 100,138 $ 492,692 669 669 100,807 $ 493,361 Investment securities Currency translation adjustment Cash flow hedges Total GE shareowners' equity Noncontrolling interests Total equity Total liabilities, redeemable noncontrolling interests and equity 14 $ Change 3: Inventories Decreased by $780,000,000 The $780,000,000 decrease in inventories is a result of the company purchasing less inventory. This results in an increase in cash and equivalents and a decrease in inventory (finished goods). The company will purchase less inventory, and therefore still have $780,000,000 not spent on finished good in the form of cash and equivalents. 15 Statement Of Earnings For the years ended December 31 (in millions; per share amounts in dollars) Revenue and other Income Sales of goods Sales of services Other Income GE Capital earnings from continuing operations GE Capital revenues from services Total Revenues and other income Cost and Expenses Cost of goods sold Cost of services sold Selling, general and administrative expenses Interest and other financial charges Investment contracts, insurance losses and insurance annuity benefits Other costs and expenses Total costs and expenses Earnings from continuing operations before income taxes Benefit (provision for income taxes) Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings (loss) Less net earnings (loss) attributable to noncontrolling interests Net earnings (loss) attributable to the Company Preferred stock dividends Net earnings (loss) attributable to GE common shareowners Amounts attributable to GE common shareowners Earnings from continuing operations Less net earnings (loss) attributable to noncontrolling interests, continuing operations Earnings from continuing operations attributable to the Company Preferred stock Dividends Earnings from continuing operations attributable to GE common shareowners Earnings (loss) from discontinued operations, net of taxes Less net earnings (loss) attributable to noncontrolling interests, discontinued operations Net earnings (loss) attributable to GE common shareowners 16 Old (2015) $ $ $ $ 74,510 31,298 2,227 9,350 117,386 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) 1,700 19 1,681 (18) 1,663 (7,495) 312 (6,145) Change $ New - $ - - $ 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) - $ - $ 1,700 19 1,681 (18) 1,663 (7,495) 312 (6,145) - $ $ $ 74,510 31,298 2,227 9,350 117,386 Per-share amounts Earnings from continuing operations Diluted earnings per share Basic earnings per share Net earnings (loss) Diluted earnings (loss) per share Basic earnings (loss) per share Dividends declared per common share $ $ 0.17 0.17 $ $ - $ - $ 0.17 0.17 $ $ $ (0.61) (0.62) 0.92 $ $ $ - $ - $ - $ (0.61) (0.62) 0.92 General Electric Company and Consolidated Affiliates Consolidated Statement of Changes in Shareowners' Equity (in millions) GE shareowners' equity balance at January 1 Net earnings (loss) attributable to the Company Dividends and other transactions with shareowners Redemption value adjustment for redeemable noncontrolling interests Other comprehensive income (loss) attributable to the Company Net sales (purchases) of shares for treasury(a) Changes in other capital Ending balance at December 31 Noncontrolling interests Total Equity balance at December 31 Change Old (2015) $ 128,159 $ (6,126) (9,155) (25) 1,644 (20,946) 4,724 98,274 1,864 $ 100,138 $ 17 New - $ 128,159 (6,126) (9,155) (25) 1,644 (20,946) 4,724 98,274 1,864 - $ 100,138 Statement of Financial Position At December 31 (in millions, except share amounts) Assets Cash and equivalents Investments securities Current receivables Inventories Financing Receivables - net Other GE Capital receivables Property, plant and equipment Receivable from GE Capital Investment in GE Capital Goodwill Other intangible assets - net Contract assets All other assets Deferred income taxes Assets of businesses held for sale Assets of discontinued operations Total assets(a) Liabilities and equity Short-term borrowings Accounts payable, principally trade accounts Progress collections and price adjustments accrued Dividends Payable Other GE current liabilities Non-recourse borrowings of consolidated securitization entities Long-term borrowings Investment contracts, insurance liabilities and insurance annuity benefits Non-current compensation and benefits All other liabilities Liabilites of businesses held for sale Liabilities of discontinued operations Total liabilities Old (2015) $ $ $ 18 Change 70,483 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 492,692 $ 49,892 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 22,558 861 46487 389,582 $ $ New 780 $ 71,263 31,973 27,022 (780) 21,735 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 - $ 492,692 - $ 49,892 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 22,558 861 46,487 389,582 Redeemable noncontrolling interests Preferred stock (5,944,250 shares outstanding at year-end 2015 and no shares outstanding at year-end 2014) GECC preferred stock (no shares outstanding at year-end 2015 and 50,000 shares outstanding at year-end 2014) Common stock (9,379,288,000 and 10,057,380,000 shares outstanding at year-end 2015 and 2014, respectively) Accumulated other comprehensive income (loss) - net attributable to GE (b) Investment securities Currency translation adjustment Cash flow hedges Benefit plans Other capital Retained earnings Less common stock held in treasury Total GE shareowners' equity Noncontrolling interests Total equity Total liabilities, redeemable noncontrolling interests and equity $ 19 2,972 - 2,972 6 - 6 - - 702 - 460 (5,499) (80) (11,410) 37,613 140,020 (63,539) 98,274 1,864 100,138 492,692 $ - $ 702 460 (5,499) (80) (11,410) 37,613 140,020 (63,539) 98,274 1,864 100,138 492,692 Change 4: Accounts Receivable Decreased by $3,111,000,000 A decrease in accounts receivable means that the company was paid for more of the goods it sold, instead of waiting to be paid for them. Therefore, the 3.111 billion dollar decrease in accounts receivable was matched by a 3.111 billion dollar increase in cash and equivalents. This did not affect the profits or equity of the company so only the assets of statement of financial position section were altered. The net change in assets was zero dollars. 20 Statement Of Earnings For the years ended December 31 (in millions; per share amounts in dollars) Revenue and other Income Sales of goods Sales of services Other Income GE Capital earnings from continuing operations GE Capital revenues from services Total Revenues and other income Cost and Expenses Cost of goods sold Cost of services sold Selling, general and administrative expenses Interest and other financial charges Investment contracts, insurance losses and insurance annuity benefits Other costs and expenses Total costs and expenses Earnings from continuing operations before income taxes Benefit (provision for income taxes) Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings (loss) Less net earnings (loss) attributable to noncontrolling interests Net earnings (loss) attributable to the Company Preferred stock dividends Net earnings (loss) attributable to GE common shareowners Amounts attributable to GE common shareowners Earnings from continuing operations Less net earnings (loss) attributable to noncontrolling interests, continuing operations Earnings from continuing operations attributable to the Company Preferred stock Dividends Earnings from continuing operations attributable to GE common shareowners Earnings (loss) from discontinued operations, net of taxes Less net earnings (loss) attributable to noncontrolling interests, discontinued operations Net earnings (loss) attributable to GE common shareowners 21 Old (2015) $ $ $ $ Change New 74,510 $ 31,298 2,227 9,350 117,386 - 74,510 31,298 2,227 9,350 117,386 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) $ - 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) $ 74,510 1,700 $ 19 1,681 (18) 1,663 (7,495) 312 (6,145) $ $ - $ - $ 1,700 19 1,681 (18) 1,663 (7,495) 312 (6,145) Per-share amounts Earnings from continuing operations Diluted earnings per share Basic earnings per share Net earnings (loss) Diluted earnings (loss) per share Basic earnings (loss) per share Dividends declared per common share $0.17 $0.17 $ $ - $0.17 $0.17 ($0.61) ($0.62) $0.92 $ $ $ - ($0.61) ($0.62) $0.92 General Electric Company and Consolidated Affiliates Consolidated Statement of Changes in Shareowners' Equity (in millions) GE shareowners' equity balance at January 1 Net earnings (loss) attributable to the Company Dividends and other transactions with shareowners Redemption value adjustment for redeemable noncontrolling interests Other comprehensive income (loss) attributable to the Company Net sales (purchases) of shares for treasury(a) Changes in other capital Ending balance at December 31 Noncontrolling interests Total Equity balance at December 31 Old (2015) Change $ 128,159 $ (6,126) (9,155) (25) 1,644 (20,946) 4,724 98,274 1,864 $ 100,138 $ 22 New - $ 128,159 (6,126) (9,155) (25) 1,644 (20,946) 4,724 98,274 1,864 - $ 100,138 Statement of Financial Position At December 31 (in millions, except share amounts) Assets Cash and equivalents Investments securities Current receivables Inventories Financing Receivables - net Other GE Capital receivables Property, plant and equipment Receivable from GE Capital Investment in GE Capital Goodwill Other intangible assets - net Contract assets All other assets Deferred income taxes Assets of businesses held for sale Assets of discontinued operations Total assets(a) Liabilities and equity Short-term borrowings Accounts payable, principally trade accounts Progress collections and price adjustments accrued Dividends Payable Other GE current liabilities Non-recourse borrowings of consolidated securitization entities Long-term borrowings Investment contracts, insurance liabilities and insurance annuity benefits Non-current compensation and benefits Old (2015) Change $ 70,483 $ 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 $ 492,692 $ $ All other liabilities Liabilites of businesses held for sale Liabilities of discontinued operations Total liabilities 23 49,892 $ 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 New 3,111 $ 73,594 31,973 (3,111) 23,911 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 - $ 492,692 - $ 49,892 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 22,558 - 22,558 861 - 861 46,487 - 46,487 389,582 - 389,582 Redeemable noncontrolling interests Preferred stock (5,944,250 shares outstanding at year-end 2015 and nopreferred shares outstanding at year-end 2014) at year-end GECC stock (no shares outstanding 2,972 - 2,972 6 - 6 - - - 702 - 702 460 - 460 (5,499) - (5,499) (80) - (80) Benefit plans (11,410) - (11,410) Other capital 37,613 - 37,613 Retained earnings 140,020 - 140,020 Less common stock held in treasury (63,539) - (63,539) 98,274 - 98,274 1,864 - 1,864 2015 and stock 50,000 shares outstanding at year-end 2014) Common (9,379,288,000 and 10,057,380,000 shares outstanding at year-end 2015 and 2014, respectively) Accumulated other comprehensive income (loss) - net attributable to GE (b) Investment securities Currency translation adjustment Cash flow hedges Total GE shareowners' equity Noncontrolling interests Total equity Total liabilities, redeemable noncontrolling interests and equity 100,138 $ 492,692 $ 24 100,138 - $ 492,692 Change 5: Accounts Payable Increased by $2,625,000,000 The $2,625,000,000 increase in accounts payable is a result of the company taking longer to pay its creditors for goods. This increase in accounts payable is matched by an increase in cash equivalents because the company has more money sitting around that it has not paid out yet. This change did not affect the statement of earnings or the statement of equity. The increases in assets and liabilities match each other. 25 Statement Of Earnings For the years ended December 31 (in millions; per share amounts in dollars) Revenue and other Income Sales of goods Sales of services Other Income GE Capital earnings from continuing operations GE Capital revenues from services Total Revenues and other income Cost and Expenses Cost of goods sold Cost of services sold Selling, general and administrative expenses Interest and other financial charges Investment contracts, insurance losses and insurance annuity benefits Other costs and expenses Total costs and expenses Earnings from continuing operations before income taxes Benefit (provision for income taxes) Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings (loss) Less net earnings (loss) attributable to noncontrolling interests Net earnings (loss) attributable to the Company Preferred stock dividends Net earnings (loss) attributable to GE common shareowners Amounts attributable to GE common shareowners Earnings from continuing operations Less net earnings (loss) attributable to noncontrolling interests, continuing operations Earnings from continuing operations attributable to the Company Preferred stock Dividends Earnings from continuing operations attributable to GE common shareowners Earnings (loss) from discontinued operations, net of taxes Less net earnings (loss) attributable to noncontrolling interests, discontinued operations Net earnings (loss) attributable to GE common shareowners 26 Old (2015) $ $ $ $ Change New 74,510 $ 31,298 2,227 9,350 117,386 - $ - 74,510 31,298 2,227 9,350 117,386 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) $ - $ 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) 1,700 $ 19 1,681 (18) 1,663 (7,495) 312 (6,145) $ - $ - $ 1,700 19 1,681 (18) 1,663 (7,495) 312 (6,145) Per-share amounts Earnings from continuing operations Diluted earnings per share Basic earnings per share Net earnings (loss) Diluted earnings (loss) per share Basic earnings (loss) per share Dividends declared per common share $0.17 $0.17 $ $ - $0.17 $0.17 ($0.61) ($0.62) $0.92 $ $ $ - ($0.61) ($0.62) $0.92 General Electric Company and Consolidated Affiliates Consolidated Statement of Changes in Shareowners' Equity (in millions) GE shareowners' equity balance at January 1 Net earnings (loss) attributable to the Company Dividends and other transactions with shareowners Redemption value adjustment for redeemable noncontrolling interests Other comprehensive income (loss) attributable to the Company Net sales (purchases) of shares for treasury(a) Changes in other capital Ending balance at December 31 Noncontrolling interests Total Equity balance at December 31 Old (2015) Change $ 128,159 $ (6,126) (9,155) (25) 1,644 (20,946) 4,724 98,274 1,864 $ 100,138 $ 27 New - $ 128,159 (6,126) (9,155) (25) 1,644 (20,946) 4,724 98,274 1,864 - $ 100,138 Statement of Financial Position At December 31 (in millions, except share amounts) Assets Cash and equivalents Investments securities Current receivables Inventories Financing Receivables - net Other GE Capital receivables Property, plant and equipment Receivable from GE Capital Investment in GE Capital Goodwill Other intangible assets - net Contract assets All other assets Deferred income taxes Assets of businesses held for sale Assets of discontinued operations Total assets(a) Liabilities and equity Short-term borrowings Accounts payable, principally trade accounts Progress collections and price adjustments accrued Dividends Payable Other GE current liabilities Non-recourse borrowings of consolidated securitization entities Long-term borrowings Investment contracts, insurance liabilities and insurance annuity benefits Non-current compensation and benefits Old (2015) Change $ All other liabilities Liabilites of businesses held for sale Liabilities of discontinued operations Total liabilities 28 New 70,483 $ 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 $ 492,692 $ 2,625 $ 2,625 $ 73,108 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 495,317 $ - $ 2,625 - 49,892 16,305 15,776 2,167 23,597 3,083 145,301 25,692 40,487 49,892 $ 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 22,558 - 22,558 861 - 861 46,487 - 46,487 389,582 2,625 392,207 Redeemable noncontrolling interests Preferred stock (5,944,250 shares outstanding at year-end 2015 and no shares outstanding at year-end 2014) at year-end 2015 GECC preferred stock (no shares outstanding and 50,000 shares outstanding at 2014) shares outstanding Common stock (9,379,288,000 andyear-end 10,057,380,000 at year-end 2015 and 2014, respectively) 2,972 - 2,972 6 - 6 - - - 702 - 702 460 - 460 (5,499) - (5,499) Accumulated other comprehensive income (loss) - net attributable to GE (b) Investment securities Currency translation adjustment Cash flow hedges (80) - (80) Benefit plans (11,410) - (11,410) Other capital 37,613 - 37,613 Retained earnings 140,020 - 140,020 Less common stock held in treasury (63,539) - (63,539) 98,274 - 98,274 1,864 - 1,864 Total GE shareowners' equity Noncontrolling interests Total equity Total liabilities, redeemable noncontrolling interests and equity 100,138 $ 492,692 $ 29 2,625 $ 100,138 495,317 Change 6: Depreciation Increased by $550,000,000 The $550,000,000 increase in depreciation increases the cost of goods sold. This reduces the tax provision of the company. Depreciation reduces the book value of capital thus decreasing the equity of the company. The cash and equivalents for the company increases, but the value of property, plant and equipment for the company decreases. Retained earnings of the company decrease to match the decrease in total assets. 30 Statement Of Earnings For the years ended December 31 (in millions; per share amounts in dollars) Revenue and other Income Sales of goods Sales of services Other Income GE Capital earnings from continuing operations GE Capital revenues from services Total Revenues and other income Cost and Expenses Cost of goods sold Cost of services sold Selling, general and administrative expenses Interest and other financial charges Investment contracts, insurance losses and insurance annuity benefits Other costs and expenses Total costs and expenses Earnings from continuing operations before income taxes Benefit (provision for income taxes) Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings (loss) Less net earnings (loss) attributable to noncontrolling interests Net earnings (loss) attributable to the Company Preferred stock dividends Net earnings (loss) attributable to GE common shareowners Amounts attributable to GE common shareowners Earnings from continuing operations Less net earnings (loss) attributable to noncontrolling interests, continuing operations Earnings from continuing operations attributable to the Company Preferred stock Dividends Earnings from continuing operations attributable to GE common shareowners Earnings (loss) from discontinued operations, net of taxes Less net earnings (loss) attributable to noncontrolling interests, discontinued operations Net earnings (loss) attributable to GE common shareowners 31 Old (2015) $ $ $ $ Change New 74,510 $ 31,298 2,227 9,350 117,386 - $ - 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) $ 550 550 (550) 436 (114) (114) (114) (114) $ 1,700 $ 19 1,681 (18) 1,663 (7,495) 312 (6,145) $ (114) $ (114) (114) (114) $ - 74,510 31,298 2,227 9,350 117,386 60,455 22,788 17,831 3,463 2,605 2,608 109,750 7,636 (6,049) 1,586 (7,495) (5,909) 332 (6,240) (18) (6,259) 1,586 19 1,567 (18) 1,549 (7,495) 312 (6,259) Per-share amounts Earnings from continuing operations Diluted earnings per share Basic earnings per share Net earnings (loss) Diluted earnings (loss) per share Basic earnings (loss) per share Dividends declared per common share $0.17 $0.17 ($0.61) ($0.62) $0.92 $ ($0.01) ($0.02) $0.16 $0.15 ($0.01) ($0.02) - ($0.62) ($0.64) $0.92 General Electric Company and Consolidated Affiliates Consolidated Statement of Changes in Shareowners' Equity (in millions) GE shareowners' equity balance at January 1 Net earnings (loss) attributable to the Company Dividends and other transactions with shareowners Redemption value adjustment for redeemable noncontrolling interests Other comprehensive income (loss) attributable to the Company Net sales (purchases) of shares for treasury(a) Changes in other capital Ending balance at December 31 Noncontrolling interests Total Equity balance at December 31 Old (2015) Change New $ 128,159 $ - $ (6,126) 436 (9,155) (25) 1,644 (20,946) 4,724 (550) 98,274 (114) 1,864 $ 100,138 $ (114) $ 32 128,159 (5,690) (9,155) (25) 1,644 (20,946) 4,174 98,160 1,864 100,024 Statement of Financial Position At December 31 (in millions, except share amounts) Assets Cash and equivalents Investments securities Current receivables Inventories Financing Receivables - net Other GE Capital receivables Property, plant and equipment Receivable from GE Capital Investment in GE Capital Goodwill Other intangible assets - net Contract assets All other assets Deferred income taxes Assets of businesses held for sale Assets of discontinued operations Total assets(a) Liabilities and equity Short-term borrowings Accounts payable, principally trade accounts Progress collections and price adjustments accrued Dividends Payable Other GE current liabilities Non-recourse borrowings of consolidated securitization entities Long-term borrowings Investment contracts, insurance liabilities and insurance annuity benefits Non-current compensation and benefits Old (2015) $ $ $ All other liabilities Liabilites of businesses held for sale Liabilities of discontinued operations Total liabilities 33 Change 70,483 $ 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 492,692 $ 49,892 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 $ New 436 $ (550) 70,919 31,973 27,022 22,515 12,052 6,782 53,545 (114) $ 65,526 16,744 21,156 37,471 3,105 2,818 120,951 492,578 - $ - 49,892 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 22,558 - 22,558 861 - 861 46,487 - 46,487 389,582 - 389,582 Redeemable noncontrolling interests Preferred stock (5,944,250 shares outstanding at year-end 2015 and nopreferred shares outstanding at year-end 2014) at year-end 2015 GECC stock (no shares outstanding 2,972 - 2,972 6 - 6 702 - 702 460 - 460 (5,499) - (5,499) (80) - (80) Benefit plans (11,410) - (11,410) Other capital 37,613 (114) 37,499 and 50,000 shares outstanding at 2014) shares outstanding Common stock (9,379,288,000 andyear-end 10,057,380,000 at year-end 2015 and 2014, respectively) - Accumulated other comprehensive income (loss) - net attributable to GE (b) Investment securities Currency translation adjustment Cash flow hedges Retained earnings 140,020 Less common stock held in treasury (63,539) - (63,539) 98,274 (114) 98,160 1,864 - 1,864 100,138 492,692 $ (114) (114) $ Total GE shareowners' equity Noncontrolling interests Total equity Total liabilities, redeemable noncontrolling interests and equity $ 34 140,020 100,024 492,578 Change 7: Dividend (per share) Increased by $0.18 An 18 cent increase in dividends per share increases total dividends paid out by 1.688 billion dollars. The company arrived at this number by multiplying the shares of common stock held by the increase in dividends given. This increased payout increased dividends payable. The money for increased dividends resulted in a decrease of cash equivalents and retained earnings. 35 Statement Of Earnings For the years ended December 31 (in millions; per share amounts in dollars) Revenue and other Income Sales of goods Sales of services Other Income GE Capital earnings from continuing operations GE Capital revenues from services Total Revenues and other income Cost and Expenses Cost of goods sold Cost of services sold Selling, general and administrative expenses Interest and other financial charges Investment contracts, insurance losses and insurance annuity benefits Other costs and expenses Total costs and expenses Earnings from continuing operations before income taxes Benefit (provision for income taxes) Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings (loss) Less net earnings (loss) attributable to noncontrolling interests Net earnings (loss) attributable to the Company Preferred stock dividends Net earnings (loss) attributable to GE common shareowners Amounts attributable to GE common shareowners Earnings from continuing operations Less net earnings (loss) attributable to noncontrolling interests, continuing operations Earnings from continuing operations attributable to the Company Preferred stock Dividends Earnings from continuing operations attributable to GE common shareowners Earnings (loss) from discontinued operations, net of taxes Less net earnings (loss) attributable to noncontrolling interests, discontinued operations Net earnings (loss) attributable to GE common shareowners 36 Old (2015) $ $ $ $ 74,510 31,298 2,227 9,350 117,386 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) 1,700 19 1,681 (18) 1,663 (7,495) 312 (6,145) Change $ $ $ $ New - $ - 74,510 31,298 2,227 - 9,350 117,386 - $ 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) - $ - $ 1,700 19 1,681 (18) 1,663 (7,495) 312 (6,145) Per-share amounts Earnings from continuing operations Diluted earnings per share Basic earnings per share Net earnings (loss) Diluted earnings (loss) per share Basic earnings (loss) per share Dividends declared per common share $0.17 $0.17 $ $ - $0.17 $0.17 ($0.61) $ ($0.62) $ $0.92 $ 0.18 ($0.61) ($0.62) $1.10 General Electric Company and Consolidated Affiliates Consolidated Statement of Changes in Shareowners' Equity (in millions) GE shareowners' equity balance at January 1 Net earnings (loss) attributable to the Company Dividends and other transactions with shareowners Redemption value adjustment for redeemable noncontrolling interests Other comprehensive income (loss) attributable to the Company Net sales (purchases) of shares for treasury(a) Changes in other capital Ending balance at December 31 Noncontrolling interests Total Equity balance at December 31 Old (2015) Change New $ 128,159 $ - $ 128,159 (6,126) (6,126) (9,155) (1,688) (10,843) (25) (25) 1,644 1,644 (20,946) (20,946) 4,724 4,724 98,274 (1,688) 96,586 1,864 1,864 $ 100,138 $ (1,688) $ 98,450 37 Statement of Financial Position At December 31 (in millions, except share amounts) Assets Cash and equivalents Investments securities Current receivables Inventories Financing Receivables - net Other GE Capital receivables Property, plant and equipment Receivable from GE Capital Investment in GE Capital Goodwill Other intangible assets - net Contract assets All other assets Deferred income taxes Assets of businesses held for sale Assets of discontinued operations Total assets(a) Liabilities and equity Short-term borrowings Accounts payable, principally trade accounts Progress collections and price adjustments accrued Dividends Payable Other GE current liabilities Non-recourse borrowings of consolidated securitization entities Long-term borrowings Investment contracts, insurance liabilities and insurance annuity benefits Non-current compensation and benefits Old (2015) Change $ 70,483 $ 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 $ 492,692 $ $ All other liabilities Liabilites of businesses held for sale Liabilities of discontinued operations Total liabilities 38 49,892 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 $ New (1,288) $ - (1,288) 69,195 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 $ 491,404 - $ 400 - 49,892 13,680 15,776 2,567 23,597 3,083 145,301 25,692 40,487 22,558 - 22,558 861 - 861 46,487 - 46,487 389,582 400 389,982 Redeemable noncontrolling interests Preferred stock (5,944,250 shares outstanding at year-end 2015 and no shares outstanding at year-end 2014) GECC preferred stock (no shares outstanding at year-end 2015 and 50,000 shares outstanding at year-end 2014) Common stock (9,379,288,000 and 10,057,380,000 shares outstanding at year-end 2015 and 2014, respectively) 2,972 - 2,972 6 - 6 702 - 702 460 - 460 (5,499) - (5,499) (80) - (80) Benefit plans (11,410) - (11,410) Other capital 37,613 - 37,613 Retained earnings 140,020 (1,688) 138,332 Less common stock held in treasury (63,539) - (63,539) 98,274 (1,688) 96,586 1,864 - 1,864 (1,688) (1,288) 98,450 $ 491,404 - Accumulated other comprehensive income (loss) - net attributable to GE (b) Investment securities Currency translation adjustment Cash flow hedges Total GE shareowners' equity Noncontrolling interests Total equity Total liabilities, redeemable noncontrolling interests and equity 100,138 $ 492,692 $ 39 Summary (Combined Effect) As seen in the introduction, the changes to the GE annual report in this assignment were increases in sales of goods, accounts payable, depreciation, and dividend per share and decreases in cost of goods, inventories, and accounts receivable. When combining these changes, there are several important effects seen in the annual report. First, from the Statement of Earnings, total revenues and other income increases due to the increase in sales of goods. Cost of goods sold decreases overall, which decreases total costs and expenses. The increase in total revenues and decrease in total costs leads to a large increase in earnings from continuing operations before income taxes, bringing the total earnings to $15,256,000,000 before taxes. The dividends declared per common share increased from $0.92 to $1.10 due to the increase in earnings. On the Statement of Financial Position, total assets increase due to a large increase in cash and equivalents. The increase in accounts payable leads to a matching increase in total liabilities. Due to these changes, the total liabilities, redeemable non-controlling interests and equity increase by $2,806,000,000. The Consolidated Statement of Changes in Shareowners’ Equity also reflects the increase in net earnings attributable to the company but a decrease in dividends and other transactions with shareowners, which lead to an overall decrease in total equity balance. The breakdown of these changes is seen in the table below. Changes: sales of goods $4,400,000,000 cost of goods ($3,220,000,000) inventories ($780,000,000) accounts receivable ($3,111,000,000) accounts payable $2,625,000,000 depreciation $550,000,000 dividend per share $0.18 40 Statement Of Earnings For the years ended December 31 (in millions; per share amounts in dollars) Revenue and other Income Sales of goods Sales of services Other Income GE Capital earnings from continuing operations GE Capital revenues from services Total Revenues and other income Cost and Expenses Cost of goods sold Cost of services sold Selling, general and administrative expenses Interest and other financial charges Investment contracts, insurance losses and insurance annuity benefits Other costs and expenses Total costs and expenses Earnings from continuing operations before income taxes Benefit (provision for income taxes) Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings (loss) Less net earnings (loss) attributable to noncontrolling interests Net earnings (loss) attributable to the Company Preferred stock dividends Net earnings (loss) attributable to GE common shareowners Amounts attributable to GE common shareowners Earnings from continuing operations Less net earnings (loss) attributable to noncontrolling interests, continuing operations Earnings from continuing operations attributable to the Company Preferred stock Dividends Earnings from continuing operations attributable to GE common shareowners Earnings (loss) from discontinued operations, net of taxes Less net earnings (loss) attributable to noncontrolling interests, discontinued operations Net earnings (loss) attributable to GE common shareowners 41 Old (2015) $ $ $ $ Change 74,510 31,298 2,227 9,350 117,386 59,905 22,788 17,831 3,463 2,605 2,608 109,200 8,186 (6,485) 1,700 (7,495) (5,795) 332 (6,126) (18) (6,145) $ 1,700 $ 19 1,681 (18) 1,663 (7,495) 312 (6,145) $ New 4400 $ 4,400 78,910 31,298 2,227 9,350 121,786 (2,670) (2,670) 7,070 (5,601) 1,469 1,469 1,469 1,469 57,235 22,788 17,831 3,463 2,605 2,608 106,530 15,256 (12,086) 3,169 (7,495) (4,326) 332 (4,657) (18) (4,676) 1,469 $ 1,469 1,469 1,469 $ 3,169 19 3,150 (18) 3,132 (7,495) 312 (6,145) Per-share amounts Earnings from continuing operations Diluted earnings per share Basic earnings per share Net earnings (loss) Diluted earnings (loss) per share Basic earnings (loss) per share Dividends declared per common share $0.17 $0.17 $0.15 $0.14 $0.32 $0.31 ($0.61) ($0.62) $0.92 $0.15 $0.14 $0.18 ($0.46) ($0.48) $1.10 General Electric Company and Consolidated Affiliates Consolidated Statement of Changes in Shareowners' Equity (in millions) GE shareowners' equity balance at January 1 Net earnings (loss) attributable to the Company Dividends and other transactions with shareowners Redemption value adjustment for redeemable noncontrolling interests Other comprehensive income (loss) attributable to the Company Net sales (purchases) of shares for treasury(a) Changes in other capital Ending balance at December 31 Noncontrolling interests Total Equity balance at December 31 Old (2015) Change New $ 128,159 $ - $ 128,159 (6,126) 2,019 (4,107) (9,155) (1,688) (10,843) (25) (25) 1,644 1,644 (20,946) (20,946) 4,724 (550) 4,174 98,274 (219) 98,055 1,864 1,864 $ 100,138 $ (219) $ 99,919 42 Statement of Financial Position At December 31 (in millions, except share amounts) Assets Cash and equivalents Investments securities Current receivables Inventories Financing Receivables - net Other GE Capital receivables Property, plant and equipment Receivable from GE Capital Investment in GE Capital Goodwill Other intangible assets - net Contract assets All other assets Deferred income taxes Assets of businesses held for sale Assets of discontinued operations Total assets(a) Liabilities and equity Short-term borrowings Accounts payable, principally trade accounts Progress collections and price adjustments accrued Dividends Payable Other GE current liabilities Non-recourse borrowings of consolidated securitization entities Long-term borrowings Investment contracts, insurance liabilities and insurance annuity benefits Non-current compensation and benefits All other liabilities Liabilites of businesses held for sale Liabilities of discontinued operations Total liabilities Old (2015) Change $ 70,483 $ 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 $ 492,692 $ $ 43 49,892 13,680 15,776 2,167 23,597 3,083 145,301 25,692 40,487 22,558 861 46,487 389,582 $ New 6,234 $ (2,098) (780) (550) 2,806 76,717 31,973 27,022 22,515 12,052 6,782 54,095 65,526 16,744 21,156 37,471 3,105 2,818 120,951 $ 495,498 - $ 2,625 400 3,025 49,892 16,305 15,776 2,567 23,597 3,083 145,301 25,692 40,487 22,558 861 46,487 392,607 Redeemable noncontrolling interests Preferred stock (5,944,250 shares outstanding at year-end 2015 and no shares outstanding at year-end 2014) GECC preferred stock (no shares outstanding at year-end 2015 and 50,000 shares outstanding at year-end 2014) Common stock (9,379,288,000 and 10,057,380,000 shares outstanding at year-end 2015 and 2014, respectively) Accumulated other comprehensive income (loss) - net attributable to GE (b) Investment securities Currency translation adjustment Cash flow hedges Benefit plans Other capital Retained earnings Less common stock held in treasury Total GE shareowners' equity Noncontrolling interests Total equity Total liabilities, redeemable noncontrolling interests and equity 2,972 - 2,972 6 - 6 - - - 702 - 702 (550) 331 (219) (219) 2,806 460 (5,499) (80) (11,410) 37,063 140,351 (63,539) 98,055 1,864 99,919 $ 495,498 460 (5,499) (80) (11,410) 37,613 140,020 (63,539) 98,274 1,864 100,138 $ 492,692 $ 44