GE 2013 Annual Report Download - page 121

GE 2013 ANNUAL REPORT 119
    
average period of two years, of which approximately $180 million
after tax is expected to be recognized in 2014.
Stock option expense recognized in net earnings during
2013, 2012 and 2011 amounted to $231 million, $220 million and
$230 million, respectively. Cash received from option exercises
during 2013, 2012 and 2011 was $490 million, $355 million and
$89 million, respectively. The tax benefi t realized from stock
options exercised during 2013, 2012 and 2011 was $128 million,
$88 million and $21 million, respectively.
OTHER STOCK-BASED COMPENSATION
Shares
(In thousands)
Weighted
average
grant date
fair value
Weighted
average
remaining
contractual
term (In years)
Aggregate
intrinsic value
(In millions)
RSUs outstanding at
January 1, 2013 14,878 $ 22.45
Granted 3,951 24.54
Vested (4,583) 24.35
Forfeited (674) 21.25
RSUs outstanding at
December 31, 2013 13,572 $ 22.58 2.8 $ 380
RSUs expected
to vest 12,352 $ 22.32 2.7 $ 346
The fair value of each restricted stock unit is the market price
of our stock on the date of grant. The weighted average grant
date fair value of RSUs granted during 2013, 2012 and 2011 was
$24.54, $20.79 and $16.74, respectively. The total intrinsic value of
RSUs vested during 2013, 2012 and 2011 amounted to $109 mil-
lion, $116 million and $154 million, respectively. As of December
31, 2013, there was $190 million of total unrecognized compensa-
tion cost related to nonvested RSUs. That cost is expected to be
recognized over a weighted average period of two years, of which
approximately $42 million after tax is expected to be recognized
in 2014. As of December 31, 2013, 1 million PSUs, with a weighted
average remaining contractual term of two years, an aggregate
intrinsic value of $27 million and $8 million of unrecognized
compensation cost, were outstanding. Other share-based com-
pensation expense for RSUs and PSUs recognized in net earnings
amounted to $62 million, $79 million and $84 million in 2013, 2012
and 2011, respectively.
The income tax benefi t recognized in earnings based on the
compensation expense recognized for all share-based compen-
sation arrangements amounted to $145 million, $153 million and
$163 million in 2013, 2012 and 2011, respectively. The excess of
actual tax deductions over amounts assumed, which are recog-
nized in shareowners’ equity, were $86 million, $53 million and
$12 million in 2013, 2012 and 2011, respectively.
When stock options are exercised and restricted stock vests,
the difference between the assumed tax benefi t and the actual
tax benefi t must be recognized in our fi nancial statements. In
circumstances in which the actual tax benefi t is lower than the
estimated tax benefi t, that difference is recorded in equity, to
the extent there are suffi cient accumulated excess tax benefi ts.
At December 31, 2013, our accumulated excess tax benefi ts
are suffi cient to absorb any future differences between actual
and estimated tax benefi ts for all of our outstanding option and
restricted stock grants.
Note 17.
Other Income
(In millions) 2013 2012 2011
GE
Purchases and sales of business
interests (a) $ 1,777 $ 574 $ 3,804
Licensing and royalty income 320 290 304
Marketable securities and bank deposits 54 38 52
Associated companies (b) 40 1,545 894
Interest income from GECC 21 114 206
Other items (c) 674 96 8
2,886 2,657 5,268
ELIMINATIONS 222 (94) (205)
Total $ 3,108 $ 2,563 $ 5,063
(a) Included a pre-tax gain of $1,096 million on the sale of our 49% common equity
interest in NBCU LLC and $3,705 million related to the formation of NBCU LLC, in
2013 and 2011, respectively. See Note 2.
(b) Included income of $1,416 million and $789 million from our former equity
method investment in NBCU LLC, in 2012 and 2011, respectively.
(c) Included net gains on asset sales of $330 million in 2013.
Note 18.
GECC Revenues from Services
(In millions) 2013 2012 2011
Interest on loans $ 17,951 $ 18,843 $ 19,818
Equipment leased to others 9,804 10,456 10,879
Fees 4,720 4,709 4,669
Investment income (a) 1,809 2,630 2,500
Financing leases 1,667 1,888 2,378
Associated companies (b) 1,809 1,538 2,337
Premiums earned by insurance
activities 1,573 1,715 1,905
Real estate investments (c) 2,528 1,709 1,625
Other items (a) (d) 2,080 1,757 2,065
43,941 45,245 48,176
ELIMINATIONS (1,546) (1,273) (1,219)
Total $ 42,395 $ 43,972 $ 46,957
(a) Included net other-than-temporary impairments on investment securities of
$747 million, $140 million and $387 million in 2013, 2012 and 2011, respectively,
of which $96 million related to the impairment of an investment in a Brazilian
company that was fully offset by the benefit of a guarantee provided by GE as a
component of other items for 2013. See Note 3.
(b) During 2013, we sold our remaining equity interest in the Bank of Ayudhya (Bay
Bank) and recorded a pre-tax gain of $641 million. During 2012, we sold our
remaining equity interest in Garanti Bank, which was classified as an available-
for-sale security. During 2011, we sold an 18.6% equity interest in Garanti Bank
and recorded a pre-tax gain of $690 million.
(c) During 2013, we sold real estate comprising certain floors located at 30
Rockefeller Center, New York for a pre-tax gain of $902 million.
(d) During 2013, we sold a portion of Cembra through an initial public offering and
recorded a pre-tax gain of $351 million.