Stock Analysis on Net

General Electric Co. (NYSE:GE)

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Analysis of Income Taxes

Microsoft Excel LibreOffice Calc

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Income Tax Expense (Benefit)

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

US$ in millions

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
U.S. Federal
Non - U.S.
U.S. State
Current
U.S. Federal
Non - U.S.
U.S. State
Deferred
Provision (benefit) for income taxes

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. General Electric Co. current increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. General Electric Co. deferred decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
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. provision (benefit) for income taxes decreased from 2019 to 2020 but then slightly increased from 2020 to 2021.

Effective Income Tax Rate (EITR)

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

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
U.S. federal statutory income tax rate
Tax on global activities including exports
U.S. business credits
Debt tender and related valuation allowances
Deductible stock and restructuring losses
Sale of Biopharma business
Goodwill impairments
All other, net
Actual income tax rate, before Tax Cuts and Jobs Act enactment
Tax Cuts and Jobs Act enactment
Actual income tax rate

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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. actual income tax rate, before Tax Cuts and Jobs Act enactment decreased from 2019 to 2020 but then slightly increased from 2020 to 2021.

Components of Deferred Tax Assets and Liabilities

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

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Accrued expenses and reserves
Principal pension plans
Progress collections and deferred income
Insurance company loss reserves
Deferred expenses
Other compensation and benefits
Non-U.S. loss carryforwards
Principal retiree benefit plans
Capital losses
Contract assets
Other
Deferred tax assets
Investment in global operations
Investment securities
Depreciation
Other
Deferred tax liabilities
Net deferred income tax asset (liability) (legacy)
Net deferred income tax asset (liability)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Item Description The company
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.
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. net deferred income tax asset (liability) increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.

Deferred Tax Assets and Liabilities, Classification

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

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Deferred income tax assets

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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. deferred income tax assets increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.

Adjustments to Financial Statements: Removal of Deferred Taxes

General Electric Co., adjustments to financial statements

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)
Less: Noncurrent deferred tax assets, net
Total assets (adjusted)
Adjustment to Total GE Shareholders’ Equity
Total GE shareholders’ equity (as reported)
Less: Net deferred tax assets (liabilities)
Total GE shareholders’ equity (adjusted)
Adjustment to Net Earnings (loss) Attributable To The Company
Net earnings (loss) attributable to the Company (as reported)
Add: Deferred income tax expense (benefit)
Net earnings (loss) attributable to the Company (adjusted)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).


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


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

General Electric Co., adjusted financial ratios

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net Profit Margin
Reported net profit margin
Adjusted net profit margin
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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. adjusted net profit margin ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. General Electric Co. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
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. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. General Electric Co. adjusted ROE improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. General Electric Co. adjusted ROA improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

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


Adjusted Net Profit Margin

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company
Sales of equipment and services
Profitability Ratio
Net profit margin1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company
Sales of equipment and services
Profitability Ratio
Adjusted net profit margin2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Net profit margin = 100 × Net earnings (loss) attributable to the Company ÷ Sales of equipment and services
= 100 × ÷ =

2 Adjusted net profit margin = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Sales of equipment and services
= 100 × ÷ =

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. adjusted net profit margin ratio improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Adjusted Total Asset Turnover

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Sales of equipment and services
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Sales of equipment and services
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Total asset turnover = Sales of equipment and services ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Sales of equipment and services ÷ Adjusted total assets
= ÷ =

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. General Electric Co. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Adjusted Financial Leverage

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets
Total GE shareholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted total GE shareholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Financial leverage = Total assets ÷ Total GE shareholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total GE shareholders’ equity
= ÷ =

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. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.

Adjusted Return on Equity (ROE)

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company
Total GE shareholders’ equity
Profitability Ratio
ROE1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company
Adjusted total GE shareholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROE = 100 × Net earnings (loss) attributable to the Company ÷ Total GE shareholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Adjusted total GE shareholders’ equity
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. General Electric Co. adjusted ROE improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.

Adjusted Return on Assets (ROA)

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company
Total assets
Profitability Ratio
ROA1
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 ROA = 100 × Net earnings (loss) attributable to the Company ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Adjusted total assets
= 100 × ÷ =

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. General Electric Co. adjusted ROA improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.