UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |||||||||||||||||||||||||||||
As of December 31, 2022 (in billions) | As Reported | GE HealthCare Separation (a) | GE HealthCare Debt Issuance (b) | Transaction Accounting Adjustments | Proforma | ||||||||||||||||||||||||
Cash, cash equivalents and restricted cash | $ | 17.3 | $ | (1.5) | $ | 2.0 | $ | (0.5) | (c) | $ | 17.3 | ||||||||||||||||||
Investment securities | 7.6 | — | — | 5.1 | (d) | 12.7 | |||||||||||||||||||||||
Current receivables | 18.0 | (3.4) | — | 0.2 | (e) | 14.8 | |||||||||||||||||||||||
Inventories, including deferred inventory costs | 17.4 | (2.5) | — | — | 14.9 | ||||||||||||||||||||||||
Current contract assets | 3.1 | (0.6) | — | — | 2.5 | ||||||||||||||||||||||||
All other current assets | 2.9 | (0.3) | — | 0.2 | (e) | 2.8 | |||||||||||||||||||||||
Current assets | 66.2 | (8.3) | 2.0 | 5.0 | 64.9 | ||||||||||||||||||||||||
Investment securities | 36.0 | — | — | — | 36.0 | ||||||||||||||||||||||||
Property, plant and equipment – net | 14.5 | (2.3) | — | — | 12.2 | ||||||||||||||||||||||||
Goodwill | 25.8 | (12.8) | — | — | 13.0 | ||||||||||||||||||||||||
Other intangible assets – net | 7.6 | (1.5) | — | — | 6.1 | ||||||||||||||||||||||||
Contract and other deferred assets | 6.0 | (0.2) | — | — | 5.8 | ||||||||||||||||||||||||
All other assets | 19.9 | (0.9) | — | (0.7) | (f) | 18.2 | |||||||||||||||||||||||
Deferred income taxes | 11.7 | (0.8) | — | (1.6) | (f)(g)(h) | 9.3 | |||||||||||||||||||||||
Total assets | $ | 187.8 | $ | (26.9) | $ | 2.0 | $ | 2.7 | $ | 165.6 | |||||||||||||||||||
Short-term borrowings | $ | 3.8 | $ | — | $ | — | $ | — | $ | 3.7 | |||||||||||||||||||
Accounts payable and equipment project payables | 18.6 | (3.3) | — | 0.1 | (e) | 15.4 | |||||||||||||||||||||||
Progress collections and deferred income | 18.1 | (1.9) | — | — | 16.2 | ||||||||||||||||||||||||
All other current liabilities | 16.4 | (2.0) | — | (0.1) | (e)(f)(h)(i)(j) | 14.4 | |||||||||||||||||||||||
Current liabilities | 56.9 | (7.2) | — | — | 49.7 | ||||||||||||||||||||||||
Deferred income | 2.0 | (0.6) | — | — | 1.4 | ||||||||||||||||||||||||
Long-term borrowings | 28.6 | (8.3) | 2.0 | (2.0) | (k) | 20.3 | |||||||||||||||||||||||
Insurance liabilities and annuity benefits | 33.3 | — | — | — | 33.3 | ||||||||||||||||||||||||
Non-current compensation and benefits | 16.0 | (0.5) | — | (5.1) | (f)(h) | 10.4 | |||||||||||||||||||||||
All other liabilities | 13.3 | (1.1) | — | — | 12.2 | ||||||||||||||||||||||||
Total liabilities | 150.2 | (17.7) | 2.0 | (7.1) | 127.4 | ||||||||||||||||||||||||
Preferred stock | — | — | — | — | — | ||||||||||||||||||||||||
Common stock | — | — | — | — | — | ||||||||||||||||||||||||
Accumulated other comprehensive income (loss) – net attributable to GE | (1.3) | 1.9 | — | (1.7) | (f)(h)(l) | (1.1) | |||||||||||||||||||||||
Other capital | 34.2 | 0.2 | — | — | 34.4 | ||||||||||||||||||||||||
Retained earnings | 84.7 | (11.3) | — | 11.5 | (m) | 84.9 | |||||||||||||||||||||||
Less common stock held in treasury | (81.2) | — | — | — | (81.2) | ||||||||||||||||||||||||
Total GE shareholders’ equity | 36.4 | (9.2) | — | 9.8 | 37.0 | ||||||||||||||||||||||||
Noncontrolling interests | 1.2 | — | — | — | 1.2 | ||||||||||||||||||||||||
Total equity | 37.6 | (9.2) | — | 9.8 | 38.2 | ||||||||||||||||||||||||
Total liabilities and equity | $ | 187.8 | $ | (26.9) | $ | 2.0 | $ | 2.7 | $ | 165.6 | |||||||||||||||||||
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS) | |||||||||||||||||||||||
For the year ended December 31, 2022 (In billions; per-share amounts in dollars) | As Reported | GE HealthCare Separation (n) | Transaction Accounting Adjustments | Proforma | |||||||||||||||||||
Revenues | |||||||||||||||||||||||
Sales of equipment | $ | 32.0 | $ | (9.6) | $ | — | $ | 22.3 | |||||||||||||||
Sales of services | 41.6 | (8.8) | — | 32.8 | |||||||||||||||||||
Insurance revenues | 3.0 | — | — | 3.0 | |||||||||||||||||||
Total revenues | 76.6 | (18.5) | — | 58.1 | |||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||
Cost of equipment sold | 30.4 | (6.7) | — | 23.7 | |||||||||||||||||||
Cost of services sold | 25.1 | (4.6) | — | 20.5 | |||||||||||||||||||
Selling, general and administrative expenses | 12.8 | (3.5) | (0.1) | (o) | 9.1 | ||||||||||||||||||
Separation costs | 1.0 | — | (0.3) | (p) | 0.7 | ||||||||||||||||||
Research and development | 2.8 | (1.0) | — | 1.8 | |||||||||||||||||||
Interest and other financial charges | 1.6 | (0.1) | (0.4) | (q) | 1.1 | ||||||||||||||||||
Debt extinguishment costs | 0.5 | — | — | 0.5 | |||||||||||||||||||
Insurance losses, annuity benefits and other costs | 2.7 | — | — | 2.7 | |||||||||||||||||||
Goodwill impairments | — | — | — | — | |||||||||||||||||||
Non-operating benefit costs (income) | (0.5) | — | 0.1 | (r) | (0.4) | ||||||||||||||||||
Total costs and expenses | 76.4 | (15.9) | (0.7) | 59.8 | |||||||||||||||||||
Other income | 1.2 | (0.1) | 3.8 | (s) | 4.9 | ||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | 1.4 | (2.6) | 4.4 | 3.2 | |||||||||||||||||||
Benefit (provision) for income taxes | (0.5) | 0.6 | (0.1) | (v) | (0.1) | ||||||||||||||||||
Earnings (loss) from continuing operations | 0.9 | (2.1) | 4.3 | 3.2 | |||||||||||||||||||
Less net earnings (loss) attributable to noncontrolling interests | 0.1 | (0.1) | — | — | |||||||||||||||||||
Preferred stock dividends | (0.3) | — | — | (0.3) | |||||||||||||||||||
Net earnings (loss) from continuing operations attributable to GE common shareowners | $ | 0.6 | $ | (2.0) | $ | 4.3 | $ | 2.8 | |||||||||||||||
Per-share amounts | |||||||||||||||||||||||
Earnings (loss) from continuing operations | |||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.53 | $ | 2.59 | |||||||||||||||||||
Basic earnings (loss) per share | $ | 0.53 | $ | 2.60 | |||||||||||||||||||
Average equivalent shares (in millions) | |||||||||||||||||||||||
Diluted | 1,101 | 1,101 | |||||||||||||||||||||
Basic | 1,096 | 1,096 |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS) | |||||||||||||||||||||||
For the year ended December 31, 2021 (In billions; per-share amounts in dollars) | As Reported | GE HealthCare Separation (n) | Transaction Accounting Adjustments | Proforma | |||||||||||||||||||
Revenues | |||||||||||||||||||||||
Sales of equipment | $ | 34.2 | $ | (9.1) | $ | — | $ | 25.1 | |||||||||||||||
Sales of services | 36.9 | (8.6) | — | 28.3 | |||||||||||||||||||
Insurance revenues | 3.1 | — | — | 3.1 | |||||||||||||||||||
Total revenues | 74.2 | (17.7) | — | 56.5 | |||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||
Cost of equipment sold | 31.4 | (6.2) | — | 25.2 | |||||||||||||||||||
Cost of services sold | 22.5 | (4.3) | — | 18.2 | |||||||||||||||||||
Selling, general and administrative expenses | 11.7 | (3.5) | — | 8.2 | |||||||||||||||||||
Separation costs | — | — | — | — | |||||||||||||||||||
Research and development | 2.5 | (0.8) | — | 1.7 | |||||||||||||||||||
Interest and other financial charges | 1.9 | (0.1) | — | 1.8 | |||||||||||||||||||
Debt extinguishment costs | 6.5 | — | — | 6.5 | |||||||||||||||||||
Insurance losses, annuity benefits and other costs | 2.4 | — | — | 2.4 | |||||||||||||||||||
Goodwill impairments | — | — | — | — | |||||||||||||||||||
Non-operating benefit costs (income) | 1.8 | — | (0.6) | (r) | 1.1 | ||||||||||||||||||
Total costs and expenses | 80.7 | (15.0) | (0.6) | 65.1 | |||||||||||||||||||
Other income | 2.8 | (0.1) | — | 2.7 | |||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | (3.7) | (2.9) | 0.7 | (5.9) | |||||||||||||||||||
Benefit (provision) for income taxes | 0.3 | 0.6 | (0.1) | (v) | 0.8 | ||||||||||||||||||
Earnings (loss) from continuing operations | (3.4) | (2.3) | 0.6 | (5.1) | |||||||||||||||||||
Less net earnings (loss) attributable to noncontrolling interests | (0.1) | — | — | (0.1) | |||||||||||||||||||
Preferred stock dividends | (0.2) | — | — | (0.2) | |||||||||||||||||||
Net earnings (loss) from continuing operations attributable to GE common shareowners | $ | (3.6) | $ | (2.3) | $ | 0.6 | $ | (5.2) | |||||||||||||||
Per-share amounts | |||||||||||||||||||||||
Earnings (loss) from continuing operations | |||||||||||||||||||||||
Diluted earnings (loss) per share | $ | (3.25) | $ | (4.78) | |||||||||||||||||||
Basic earnings (loss) per share | $ | (3.25) | $ | (4.78) | |||||||||||||||||||
Average equivalent shares (in millions) | |||||||||||||||||||||||
Diluted | 1,098 | 1,098 | |||||||||||||||||||||
Basic | 1,098 | 1,098 |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (LOSS) | |||||||||||||||||||||||
For the year ended December 31, 2020 (In billions; per-share amounts in dollars) | As Reported | GE HealthCare Separation (n) | Transaction Accounting Adjustments | Proforma | |||||||||||||||||||
Revenues | |||||||||||||||||||||||
Sales of equipment | $ | 37.6 | $ | (10.0) | $ | — | $ | 27.6 | |||||||||||||||
Sales of services | 35.4 | (8.0) | 0.2 | (u) | 27.6 | ||||||||||||||||||
Insurance revenues | 2.9 | — | — | 2.9 | |||||||||||||||||||
Total revenues | 75.8 | (18.0) | 0.2 | 58.0 | |||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||
Cost of equipment sold | 35.2 | (6.6) | — | 28.7 | |||||||||||||||||||
Cost of services sold | 22.6 | (4.1) | 0.2 | (u) | 18.7 | ||||||||||||||||||
Selling, general and administrative expenses | 12.6 | (3.4) | — | 9.2 | |||||||||||||||||||
Separation costs | — | — | — | — | |||||||||||||||||||
Research and development | 2.6 | (0.8) | — | 1.7 | |||||||||||||||||||
Interest and other financial charges | 2.1 | (0.1) | — | 2.0 | |||||||||||||||||||
Debt extinguishment costs | 0.3 | — | — | 0.3 | |||||||||||||||||||
Insurance losses and annuity benefits | 2.5 | — | — | 2.5 | |||||||||||||||||||
Goodwill impairments | 0.9 | — | — | 0.9 | |||||||||||||||||||
Non-operating benefit costs (income) | 2.4 | — | (0.8) | (r) | 1.6 | ||||||||||||||||||
Total costs and expenses | 81.3 | (15.1) | (0.6) | 65.6 | |||||||||||||||||||
Other income | 11.4 | — | (12.3) | (t)(u) | (0.9) | ||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | 6.0 | (3.0) | (11.5) | (8.5) | |||||||||||||||||||
Benefit (provision) for income taxes | 0.5 | 0.6 | 1.0 | (v) | 2.2 | ||||||||||||||||||
Earnings (loss) from continuing operations | 6.5 | (2.3) | (10.4) | (6.3) | |||||||||||||||||||
Less net earnings (loss) attributable to noncontrolling interests | (0.2) | (0.1) | — | (0.2) | |||||||||||||||||||
Preferred stock dividends | (0.5) | — | — | (0.5) | |||||||||||||||||||
Net earnings (loss) from continuing operations attributable to GE common shareowners | $ | 6.1 | $ | (2.3) | $ | (10.4) | $ | (6.6) | |||||||||||||||
Per-share amounts | |||||||||||||||||||||||
Earnings (loss) from continuing operations | |||||||||||||||||||||||
Diluted earnings (loss) per share | $ | 5.46 | $ | (6.16) | |||||||||||||||||||
Basic earnings (loss) per share | $ | 5.46 | $ | (6.16) | |||||||||||||||||||
Average equivalent shares (in millions) | |||||||||||||||||||||||
Diluted | 1,095 | 1,094 | |||||||||||||||||||||
Basic | 1,094 | 1,094 |
(a) | Adjustments represent the elimination of assets and liabilities attributable to GE HealthCare. | |||||||||||||||||||
(b) | Adjustments represent GE HealthCare's long-term debt issuance of $2.0 billion, incurred on January 3, 2023 in connection with the Separation. | |||||||||||||||||||
(c) | Adjustment represents cash proceeds retained by GE HealthCare of $0.5 billion, which included proceeds from GE HealthCare's long-term debt issuance of $2.0 billion, partially offset by a cash distribution to GE of $1.5 billion. | |||||||||||||||||||
(d) | Adjustment represents approximately 90.3 million shares or 19.9% ownership interest in GE HealthCare retained by GE at an opening price per share of $56.00 on January 4, 2023, totaling $5.1 billion. | |||||||||||||||||||
(e) | Balance sheet adjustments primarily relating to reversal of intercompany eliminations for shared services and hedging arrangements between GE and GE HealthCare as follows: | |||||||||||||||||||
($ in billions) | As of Dec. 31, 2022 | |||||||||||||||||||
Current receivables | $ | 0.2 | ||||||||||||||||||
All other current assets | $ | 0.2 | ||||||||||||||||||
Accounts payable and equipment project accruals | $ | 0.2 | ||||||||||||||||||
All other current liabilities | $ | 0.2 | ||||||||||||||||||
(f) | In connection with the Separation and as a result of the legal split of certain plans, a portion of GE’s postretirement benefit plans, including a portion of the principal pension plans, the principal retiree benefit plans and other pension plans, were transferred to GE HealthCare. The pro forma adjustments reflect plan assets and obligations primarily associated with GE HealthCare’s active, retired, and other former GE employees in certain jurisdictions. The adjustments in the unaudited pro forma condensed combined statement of financial position as of December 31, 2022 are as follows: | |||||||||||||||||||
($ in billions) | As of Dec. 31, 2022 | |||||||||||||||||||
All other assets | $ | (0.7) | ||||||||||||||||||
Deferred income taxes | $ | (0.9) | ||||||||||||||||||
All other current liabilities | $ | (0.3) | ||||||||||||||||||
Non-current compensation and benefits | $ | (4.5) | ||||||||||||||||||
Accumulated other comprehensive income (loss) – net | $ | (2.0) | ||||||||||||||||||
(g) | Adjustments reflect the transfer of deferred tax assets of $0.5 billion to GE HealthCare. | |||||||||||||||||||
(h) | In connection with the Separation, current compensation and benefits obligations with respect to additional employee-related obligations of active, retired, and other former employees along with non-current benefits obligations pertaining to deferred compensation arrangements and severance liabilities were transferred from GE to GE HealthCare. The adjustments in the unaudited pro forma condensed combined statement of financial position as of December 31, 2022 are as follows: | |||||||||||||||||||
($ in billions) | As of Dec. 31, 2022 | |||||||||||||||||||
Deferred income taxes | $ | (0.2) | ||||||||||||||||||
All other current liabilities | $ | (0.2) | ||||||||||||||||||
Non-current compensation and benefits | $ | (0.6) | ||||||||||||||||||
Accumulated other comprehensive income (loss) – net | $ | (0.1) | ||||||||||||||||||
(i) | Subsequent to the Separation, GE anticipates it will incur additional one-time costs of approximately $0.1 billion for the development of technological infrastructure on behalf of GE HealthCare. These costs are expected to be incurred within one year of the Separation and have been reflected as an adjustment to retained earnings. | |||||||||||||||||||
(j) | Adjustment reflects additional tax liabilities of $0.2 billion recorded by GE as a result of the Separation. | |||||||||||||||||||
(k) | Adjustment reflects removal of GE HealthCare's additional long-term debt of $2.0 billion incurred on January 3, 2023 as a result of the Separation. | |||||||||||||||||||
(l) | Adjustment includes currency translation loss of $0.4 billion attributable to the GE HealthCare business transferred to retained earnings. | |||||||||||||||||||
(m) | Represents the effect of adjustments described in notes (c) through (l) on stockholders' equity. |
(n) | Adjustments reflect the elimination of revenues and costs and expenses of GE HealthCare. | |||||||||||||||||||
(o) | Adjustment primarily reflects restructuring costs incurred by GE on behalf of GE HealthCare. | |||||||||||||||||||
(p) | Adjustment reflects separation costs incurred by GE that were directly attributable to GE HealthCare. | |||||||||||||||||||
(q) | Adjustment reflects the reduction of interest expense of $0.4 billion to give effect to the estimated repayment of debt for the year ended December 31, 2022. | |||||||||||||||||||
(r) | Adjustment primarily reflects non-operating costs for pension and retirement benefit plans and costs for employee related obligations transferred to GE HealthCare in connection with the Separation. | |||||||||||||||||||
(s) | Adjustment primarily represents the difference between the value of our approximately 19.9% ownership interest in GE HealthCare based on the opening price per share of $56.00 and carrying value on January 4, 2023. | |||||||||||||||||||
(t) | Adjustment reflects the pre-tax gain on the sale of $12.4 billion related to GE HealthCare’s BioPharma business in March of 2020. | |||||||||||||||||||
(u) | Income statement adjustments to reverse intercompany eliminations, primarily related to services provided from GE HealthCare to GE and vice versa, are as follows: | |||||||||||||||||||
($ in billions) | Year ended Dec. 31, 2020 | |||||||||||||||||||
Sales of services | $ | 0.2 | ||||||||||||||||||
Cost of services sold | $ | 0.2 | ||||||||||||||||||
Interest and other financial charges | $ | — | ||||||||||||||||||
Other income | $ | 0.1 | ||||||||||||||||||
(v) | Adjustment reflects the estimated income tax impact of the pro forma transaction accounting adjustments at the applicable statutory income tax rates in effect within the respective tax jurisdictions during the periods presented. |