Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

General Electric Co. (NYSE:GE)

Analysis of Income Taxes

Advanced level

Income Tax Expense (Benefit)

General Electric Co., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Current tax expense (benefit) 2,452  1,830  3,047  1,802  (1,278)
Deferred tax expense (benefit) from temporary differences (2,926) (1,104) (2,464) (4,845) 814 
Provision (benefit) for income taxes (474) 726  583  (3,043) (464)

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).

Item Description The company
Current tax expense (benefit) Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. General Electric Co.’s current tax expense (benefit) decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.
Deferred tax expense (benefit) from temporary differences Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. General Electric Co.’s deferred tax expense (benefit) from temporary differences increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.
Provision (benefit) for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. General Electric Co.’s provision (benefit) for income taxes increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.

Effective Income Tax Rate (EITR)

General Electric Co., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
U.S. federal statutory income tax rate 21.00% 21.00% 21.00% 35.00% 35.00%
Tax on global activities including exports -28.50% 91.00% -6.60% 41.20% -23.70%
U.S. business credits -3.30% -22.50% 2.70% 5.70% -4.50%
Goodwill impairments 6.90% 26.00% -22.40% 0.00% 0.00%
All other, net -6.10% -52.50% 2.60% -9.50% -11.90%
Actual income tax rate, before Tax Cuts and Jobs Act enactment -10.00% 63.00% -2.70% 72.40% -5.10%
Tax Cuts and Jobs Act enactment 0.90% 0.20% -0.20% -37.80% 0.00%
Actual income tax rate -9.10% 63.20% -2.90% 34.60% -5.10%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).

Item Description The company
Actual income tax rate, before Tax Cuts and Jobs Act enactment Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. General Electric Co.’s actual income tax rate, before Tax Cuts and Jobs Act enactment increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.

Components of Deferred Tax Assets and Liabilities

General Electric Co., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Principal pension plans 3,666  4,016  3,883  3,911  8,963 
Provision for expenses 2,258  1,990  2,480  2,499  2,633 
Other compensation and benefits 1,968  2,206  2,553  2,780  4,230 
Principal retiree benefit plans 1,026  1,023  1,006  1,152  2,000 
Capitalized expenditures 993  860  —  —  — 
Non-U.S. loss carryforwards 814  602  1,568  2,078  1,444 
Intangible assets 486  1,315  1,303  (2,033) (2,962)
Baker Hughes investment (973) (1,256) —  —  — 
Depreciation (676) (823) (720) (1,022) (1,755)
Contract assets (460) (1,232) (1,874) (5,051) (6,677)
Other, net 248  (512) 292  890  (1,210)
GE Industrial 9,350  8,189  10,491  5,204  6,666 
Insurance company loss reserves 1,684  1,715  1,386  1,373  (819)
Non-U.S. loss carryforwards 1,194  1,274  1,231  1,271  1,323 
Capitalized expenditures 799  742  —  —  — 
Operating leases (1,900) (2,218) (2,690) (2,689) (3,582)
Financing leases (393) (477) (599) (877) (1,632)
Other, net 1,347  664  2,608  1,921  (123)
GE Capital 2,731  1,700  1,936  999  (4,833)
Eliminations —  —  — 
Net deferred income tax asset (liability) 12,081  9,889  12,432  6,207  1,833 

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).

Item Description The company
Net deferred income tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. General Electric Co.’s net deferred income tax asset (liability) decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.

Deferred Tax Assets and Liabilities, Classification

General Electric Co., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Deferred income tax assets 12,081  9,889  12,432  6,207  1,833 

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).

Item Description The company
Deferred income tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. General Electric Co.’s deferred income tax assets decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.

Adjustments to Financial Statements: Removal of Deferred Taxes

General Electric Co., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Adjustment to Total Assets
Total assets (as reported) 253,452  266,048  309,129  377,945  365,183 
Less: Noncurrent deferred tax assets, net 12,081  9,889  12,432  6,207  1,833 
Total assets (adjusted) 241,371  256,159  296,697  371,738  363,350 
Adjustment to Total GE Shareholders’ Equity
Total GE shareholders’ equity (as reported) 35,552  28,316  30,981  64,263  75,828 
Less: Net deferred tax assets (liabilities) 12,081  9,889  12,432  6,207  1,833 
Total GE shareholders’ equity (adjusted) 23,471  18,427  18,549  58,056  73,995 
Adjustment to Net Earnings (loss) Attributable To The Company
Net earnings (loss) attributable to the Company (as reported) 5,704  (4,979) (22,355) (5,786) 8,831 
Add: Deferred income tax expense (benefit) (2,926) (1,104) (2,464) (4,845) 814 
Net earnings (loss) attributable to the Company (adjusted) 2,778  (6,083) (24,819) (10,631) 9,645 

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).


General Electric Co., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

General Electric Co., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net Profit Margin
Reported net profit margin 7.81% -5.69% -19.69% -5.11% 8.00%
Adjusted net profit margin 3.80% -6.95% -21.86% -9.39% 8.74%
Total Asset Turnover
Reported total asset turnover 0.29 0.33 0.37 0.30 0.30
Adjusted total asset turnover 0.30 0.34 0.38 0.30 0.30
Financial Leverage
Reported financial leverage 7.13 9.40 9.98 5.88 4.82
Adjusted financial leverage 10.28 13.90 16.00 6.40 4.91
Return on Equity (ROE)
Reported ROE 16.04% -17.58% -72.16% -9.00% 11.65%
Adjusted ROE 11.84% -33.01% -133.80% -18.31% 13.03%
Return on Assets (ROA)
Reported ROA 2.25% -1.87% -7.23% -1.53% 2.42%
Adjusted ROA 1.15% -2.37% -8.37% -2.86% 2.65%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. General Electric Co.’s adjusted net profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. General Electric Co.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
General Electric Co.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. General Electric Co.’s adjusted ROE improved from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. General Electric Co.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.

General Electric Co., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company 5,704  (4,979) (22,355) (5,786) 8,831 
Sales of goods and services 73,022  87,487  113,544  113,192  110,390 
Profitability Ratio
Net profit margin1 7.81% -5.69% -19.69% -5.11% 8.00%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company 2,778  (6,083) (24,819) (10,631) 9,645 
Sales of goods and services 73,022  87,487  113,544  113,192  110,390 
Profitability Ratio
Adjusted net profit margin2 3.80% -6.95% -21.86% -9.39% 8.74%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).

2020 Calculations

1 Net profit margin = 100 × Net earnings (loss) attributable to the Company ÷ Sales of goods and services
= 100 × 5,704 ÷ 73,022 = 7.81%

2 Adjusted net profit margin = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Sales of goods and services
= 100 × 2,778 ÷ 73,022 = 3.80%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. General Electric Co.’s adjusted net profit margin ratio improved from 2018 to 2019 and from 2019 to 2020.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Sales of goods and services 73,022  87,487  113,544  113,192  110,390 
Total assets 253,452  266,048  309,129  377,945  365,183 
Activity Ratio
Total asset turnover1 0.29 0.33 0.37 0.30 0.30
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Sales of goods and services 73,022  87,487  113,544  113,192  110,390 
Adjusted total assets 241,371  256,159  296,697  371,738  363,350 
Activity Ratio
Adjusted total asset turnover2 0.30 0.34 0.38 0.30 0.30

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).

2020 Calculations

1 Total asset turnover = Sales of goods and services ÷ Total assets
= 73,022 ÷ 253,452 = 0.29

2 Adjusted total asset turnover = Sales of goods and services ÷ Adjusted total assets
= 73,022 ÷ 241,371 = 0.30

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. General Electric Co.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets 253,452  266,048  309,129  377,945  365,183 
Total GE shareholders’ equity 35,552  28,316  30,981  64,263  75,828 
Solvency Ratio
Financial leverage1 7.13 9.40 9.98 5.88 4.82
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 241,371  256,159  296,697  371,738  363,350 
Adjusted total GE shareholders’ equity 23,471  18,427  18,549  58,056  73,995 
Solvency Ratio
Adjusted financial leverage2 10.28 13.90 16.00 6.40 4.91

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).

2020 Calculations

1 Financial leverage = Total assets ÷ Total GE shareholders’ equity
= 253,452 ÷ 35,552 = 7.13

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total GE shareholders’ equity
= 241,371 ÷ 23,471 = 10.28

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
General Electric Co.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company 5,704  (4,979) (22,355) (5,786) 8,831 
Total GE shareholders’ equity 35,552  28,316  30,981  64,263  75,828 
Profitability Ratio
ROE1 16.04% -17.58% -72.16% -9.00% 11.65%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company 2,778  (6,083) (24,819) (10,631) 9,645 
Adjusted total GE shareholders’ equity 23,471  18,427  18,549  58,056  73,995 
Profitability Ratio
Adjusted ROE2 11.84% -33.01% -133.80% -18.31% 13.03%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).

2020 Calculations

1 ROE = 100 × Net earnings (loss) attributable to the Company ÷ Total GE shareholders’ equity
= 100 × 5,704 ÷ 35,552 = 16.04%

2 Adjusted ROE = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Adjusted total GE shareholders’ equity
= 100 × 2,778 ÷ 23,471 = 11.84%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. General Electric Co.’s adjusted ROE improved from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company 5,704  (4,979) (22,355) (5,786) 8,831 
Total assets 253,452  266,048  309,129  377,945  365,183 
Profitability Ratio
ROA1 2.25% -1.87% -7.23% -1.53% 2.42%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company 2,778  (6,083) (24,819) (10,631) 9,645 
Adjusted total assets 241,371  256,159  296,697  371,738  363,350 
Profitability Ratio
Adjusted ROA2 1.15% -2.37% -8.37% -2.86% 2.65%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-24), 10-K (filing date: 2019-02-26), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-24).

2020 Calculations

1 ROA = 100 × Net earnings (loss) attributable to the Company ÷ Total assets
= 100 × 5,704 ÷ 253,452 = 2.25%

2 Adjusted ROA = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Adjusted total assets
= 100 × 2,778 ÷ 241,371 = 1.15%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. General Electric Co.’s adjusted ROA improved from 2018 to 2019 and from 2019 to 2020.