GE 2011 Annual Report Download - page 113

GE 2011 ANNUAL REPORT 111
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SHARES OF GE PREFERRED STOCK
On October 16, 2008, we issued 30,000 shares of 10% cumulative
perpetual preferred stock (par value $1.00 per share) having an
aggregate liquidation value of $3,000 million, and warrants to
purchase 134,831,460 shares of common stock (par value $0.06
per share) to Berkshire Hathaway Inc. (Berkshire Hathaway) for
net proceeds of $2,965 million in cash. The proceeds were allo-
cated to the preferred shares ($2,494 million) and the warrants
($471 million) on a relative fair value basis and recorded in other
capital. The warrants are exercisable for fi ve years at an exercise
price of $22.25 per share of common stock and settled through
physical share issuance.
The preferred stock was redeemable at our option three years
after issuance at a price of 110% of liquidation value plus accrued
and unpaid dividends. On September 13, 2011, we provided notice
to Berkshire Hathaway that we would redeem the shares for the
stated redemption price of $3,300 million, plus accrued and unpaid
dividends. In connection with this notice, we recognized a preferred
dividend of $806 million (calculated as the difference between the
carrying value and redemption value of the preferred stock), which
was recorded as a reduction to our third quarter earnings attribut-
able to common shareowners and common shareowners’ equity.
The preferred shares were redeemed on October 17, 2011.
SHARES OF GE COMMON STOCK
On July 23, 2010, we extended our $15 billion share repurchase
program (which would have otherwise expired on December 31,
2010) through 2013 and we resumed purchases under the program
in the third quarter of 2010. Under this program, on a book basis, we
repurchased 111.3 million shares for a total of $1,968 million during
2011 and 111.2 million shares for a total of $1,814 million during 2010.
GE has 13.2 billion authorized shares of common stock ($0.06
par value).
Common shares issued and outstanding are summarized in
the following table.
December 31 (In thousands) 2011 2010 2009
Issued 11,693,841 11,693,841 11,693,833
In treasury (1,120,824) (1,078,465) (1,030,758)
Outstanding 10,573,017 10,615,376 10,663,075
NONCONTROLLING INTERESTS
Noncontrolling interests in equity of consolidated affi liates
includes common shares in consolidated affi liates and preferred
stock issued by affi liates of GECC. Preferred shares that we are
required to redeem at a specifi ed or determinable date are classi-
fi ed as liabilities. The balance is summarized as follows:
December 31 (In millions) 2011 2010
Noncontrolling interests in consolidated affiliates
NBC Universal $ — $3,040
Others (a) 1,696 1,947
Preferred stock (b)
GECC affiliates —275
Total $1,696 $5,262
(a) Consisted of a number of individually insignificant noncontrolling interests in
partnerships and consolidated affiliates.
(b) The preferred stock paid cumulative dividends at an average rate of 6.81% in
2010 and was retired in 2011.
Changes to noncontrolling interests are as follows.
Years ended December 31
(In millions) 2011 2010 2009
Beginning balance $5,262 $7,845 $8,947
Net earnings 292 535 200
Repurchase of NBCU shares (a) (3,070) (1,878) —
Dispositions (b) (609) (979) (707)
Dividends (34) (317) (548)
AOCI and other (c) (145) 56 (47)
Ending balance $1,696 $5,262 $7,845
(a) In January 2011 and prior to the transaction with Comcast, we acquired 12.3% of
NBCU’s outstanding shares from Vivendi for $3,673 million and made an
additional payment of $222 million related to previously purchased shares. Of
these amounts, $3,070 million reflects a reduction in carrying value of
noncontrolling interests. The remaining amount of $825 million represents the
amount paid in excess of our carrying value, which was recorded as an increase
in our basis in NBCU.
(b) Includes noncontrolling interests related to the sale of GE SeaCo of $(311) million
and the redemption of Heller Financial preferred stock of $(275) million in 2011,
as well as the deconsolidation of Regency of $(979) million in 2010 and Penske
Truck Leasing Co., L.P. (PTL) of $(331) million in 2009.
(c) Changes to the individual components of AOCI attributable to noncontrolling
interests were insignificant.
Note 16.
Other Stock-Related Information
We grant stock options, restricted stock units (RSUs) and perfor-
mance share units (PSUs) to employees under the 2007
Long-Term Incentive Plan. This plan replaced the 1990 Long-Term
Incentive Plan. In addition, we grant options and RSUs in limited
circumstances to consultants, advisors and independent contrac-
tors under a plan approved by our Board of Directors in 1997 (the
Consultants’ Plan). There are outstanding grants under one share-
owner-approved option plan for non-employee directors. Share
requirements for all plans may be met from either unissued or
treasury shares. Stock options expire 10 years from the date they
are granted and vest over service periods that range from one to
fi ve years. RSUs give the recipients the right to receive shares of
our stock upon the vesting of their related restrictions.
Restrictions on RSUs vest in various increments and at various
dates, beginning after one year from date of grant through
grantee retirement. Although the plan permits us to issue RSUs
settleable in cash, we have only issued RSUs settleable in shares
of our stock. PSUs give recipients the right to receive shares of
our stock upon the achievement of certain performance targets.
All grants of GE options under all plans must be approved by
the Management Development and Compensation Committee,
which consists entirely of independent directors.