General Electric Co. (GE)

Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Analyst Adjustments: Removal of Deferred Taxes
Adjusted Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

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

USD $ in millions

	12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Current tax expense (benefit)
	Deferred tax expense (benefit) from temporary differences
	Provision (benefit) for income taxes

Source: Based on data from General Electric Co. Annual Reports

Item	Description	The company
Current tax expense (benefit)	The component of income tax expense for the period representing amounts of income taxes paid or payable (or refundable) for the period for all income tax obligations as determined by applying the provisions of relevant enacted tax laws to relevant amounts of taxable income (loss) from continuing operations.	General Electric Co.'s current tax expense (benefit) declined from 2015 to 2016 but then slightly increased from 2016 to 2017.
Deferred tax expense (benefit) from temporary differences	The component of income tax expense for the period representing the net change in the entity's deferred tax assets and liabilities pertaining to continuing operations.	General Electric Co.'s deferred tax expense (benefit) from temporary differences increased from 2015 to 2016 but then declined significantly from 2016 to 2017.
Provision (benefit) for income taxes	The sum of the current income tax expense (benefit) and the deferred income tax expense (benefit) pertaining to pretax income (loss) from continuing operations; income tax expense (benefit) may include interest and penalties on tax uncertainties based on the entity's accounting policy.	General Electric Co.'s provision (benefit) for income taxes declined from 2015 to 2016 and from 2016 to 2017.

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

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
U.S. federal statutory income tax rate	%	%	%	%	%
Tax on global activities including exports	%	%	%	%	%
U.S. business credits	%	%	%	%	%
Tax Cuts and Jobs Act enactment	%	%	%	%	%
All other, net	%	%	%	%	%
Actual income tax rate	%	%	%	%	%

Source: Based on data from General Electric Co. Annual Reports

Item	Description	The company
Actual income tax rate	A ratio calculated by dividing the reported amount of income tax expense attributable to continuing operations for the period by GAAP-basis pretax income from continuing operations.	General Electric Co.'s actual income tax rate declined from 2015 to 2016 but then slightly increased from 2016 to 2017.

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

USD $ in millions

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Principal pension plans
	Other non-current compensation and benefits
	Provision for expenses
	Retiree insurance plans
	Non-U.S. loss carryforwards
	U.S. credit carryforwards
	Contract assets
	Intangible assets
	Depreciation
	Other, net
	GE
	Operating leases
	Financing leases
	Energy investments
	Intangible assets
	U.S. credit carryforwards
	Insurance company loss reserves
	Non-U.S. loss carryforwards
	Other, net
	GE Capital
	Eliminations
	Net deferred income tax asset (liability)

Source: Based on data from General Electric Co. Annual Reports

Item	Description	The company
Net deferred income tax asset (liability)	For entities that net deferred tax assets and tax liabilities, represents the unclassified net amount of deferred tax assets and liabilities as of the balance sheet date, which result from applying the applicable enacted tax rate to net temporary differences and carryforwards pertaining to assets or liabilities. A temporary difference is a difference between the tax basis of an asset or liability and its carrying amount in the financial statements prepared in accordance with generally accepted accounting principles that will reverse in ensuing periods.	General Electric Co.'s net deferred income tax asset (liability) declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

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

USD $ in millions

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Deferred income tax assets

Source: Based on data from General Electric Co. Annual Reports

Item	Description	The company
Deferred income tax assets	The noncurrent portion as of the balance sheet date of the aggregate carrying amount of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; after the valuation allowance, if any, to reduce such amount to net realizable value. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference.	General Electric Co.'s deferred income tax assets declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

General Electric Co., adjustments to financial data

USD $ in millions

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Total GE Shareowners' Equity
	Total GE shareowners' equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Total GE shareowners' 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)

General Electric Co., adjusted ratios

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
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	%	%	%	%	%

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 improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	General Electric Co.'s adjusted total asset turnover improved from 2015 to 2016 and from 2016 to 2017.
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 declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity.	General Electric Co.'s adjusted ROE improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	General Electric Co.'s adjusted ROA improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
As Reported
Net earnings (loss) attributable to the Company (USD $ in millions)
Sales of goods and services (USD $ in millions)

Net profit margin¹	%	%	%	%	%
Adjusted for Deferred Taxes
Adjusted net earnings (loss) attributable to the Company (USD $ in millions)

Adjusted net profit margin²	%	%	%	%	%

2017 Calculations

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

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

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 improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Sales of goods and services (USD $ in millions)
	Total assets (USD $ in millions)

	Total asset turnover¹
	Adjusted for Deferred Taxes
	Adjusted total assets (USD $ in millions)

	Adjusted total asset turnover²

2017 Calculations

¹ Total asset turnover = Sales of goods and services ÷ Total assets
= hidden ÷ hidden = hidden

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

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 improved from 2015 to 2016 and from 2016 to 2017.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Total assets (USD $ in millions)
	Total GE shareowners' equity (USD $ in millions)

	Financial leverage¹
	Adjusted for Deferred Taxes
	Adjusted total assets (USD $ in millions)
	Adjusted total GE shareowners' equity (USD $ in millions)

	Adjusted financial leverage²

2017 Calculations

¹ Financial leverage = Total assets ÷ Total GE shareowners' equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total GE shareowners' equity
= hidden ÷ hidden = hidden

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 declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
As Reported
Net earnings (loss) attributable to the Company (USD $ in millions)
Total GE shareowners' equity (USD $ in millions)

ROE¹	%	%	%	%	%
Adjusted for Deferred Taxes
Adjusted net earnings (loss) attributable to the Company (USD $ in millions)
Adjusted total GE shareowners' equity (USD $ in millions)

Adjusted ROE²	%	%	%	%	%

2017 Calculations

¹ ROE = 100 × Net earnings (loss) attributable to the Company ÷ Total GE shareowners' equity
= 100 × hidden ÷ hidden = hidden %

² Adjusted ROE = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Adjusted total GE shareowners' equity
= 100 × hidden ÷ hidden = hidden %

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 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
As Reported
Net earnings (loss) attributable to the Company (USD $ in millions)
Total assets (USD $ in millions)

ROA¹	%	%	%	%	%
Adjusted for Deferred Taxes
Adjusted net earnings (loss) attributable to the Company (USD $ in millions)
Adjusted total assets (USD $ in millions)

Adjusted ROA²	%	%	%	%	%

2017 Calculations

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

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

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 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

	General Electric Co.	Other companies (not purchased previously)
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Relative Valuation
Discounted Cash Flow (DCF) Valuation
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Long-term Trends
Analysis
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Analysis
Financial Reporting Quality

General Electric Co. (GE)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Analyst Adjustments: Removal of Deferred Taxes

Adjusted Ratios: Removal of Deferred Taxes (Summary)

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)