GE 2013 Annual Report Download - page 144
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142 GE 2013 ANNUAL REPORT
GE Capital Ending Net Investment (ENI), Excluding Cash and
Equivalents
(In billions)
December 31,
2013
Financial Services (GECC) total assets $ 512.0
Adjustment: deferred income taxes 4.8
GECC total assets 516.8
Less assets of discontinued operations 2.3
Less non-interest-bearing liabilities 59.3
GE Capital ENI 455.2
Less cash and equivalents 74.9
GE Capital ENI, excluding cash and equivalents $ 380.3
We use ENI to measure the size of our GE Capital segment. We
believe that this measure is a useful indicator of the capital
(debt or equity) required to fund a business as it adjusts for non-
interest-bearing current liabilities generated in the normal course
of business that do not require a capital outlay. We also believe
that by excluding cash and equivalents, we provide a meaning-
ful measure of assets requiring capital to fund our GE Capital
segment, as a substantial amount of this cash and equivalents
resulted from debt issuances to pre-fund future debt maturi-
ties and will not be used to fund additional assets. Providing this
measure will help investors measure how we are performing
against our previously communicated goal to reduce the size of
our fi nancial services segment.
GE Pre-Tax Earnings from Continuing Operations,
Excluding GECC Earnings from Continuing Operations
and the Corresponding Effective Tax Rates
(Dollars in millions) 2013 2012 2011
GE earnings from continuing
operations before income taxes $ 17,090 $ 16,797 $ 19,126
Less GECC earnings from
continuing operations 8,258 7,345 6,480
Total $ 8,832 $ 9,452 $ 12,646
GE provision for income taxes $ 1,668 $ 2,013 $ 4,839
GE effective tax rate, excluding
GECC earnings 18.9% 21.3% 38.3%
Reconciliation of U.S. Federal Statutory Income Tax Rate to
GE Effective Tax Rate, Excluding GECC Earnings
2013 2012 2011
U.S. federal statutory income
tax rate 35.0% 35.0% 35.0%
Reduction in rate resulting from
Tax on global activities
including exports (7.9) (7.6) (7.9)
U.S. business credits (2.8) (1.2) (2.3)
NBCU gain (1.3) — 14.9
All other—net (4.1) (4.9) (1.4)
(16.1) (13.7) 3.3
GE effective tax rate, excluding
GECC earnings 18.9% 21.3% 38.3%
We believe that the GE effective tax rate is best analyzed in rela-
tion to GE earnings before income taxes excluding the GECC
net earnings from continuing operations, as GE tax expense
does not include taxes on GECC earnings. Management believes
that in addition to the Consolidated and GECC tax rates shown
in Note 14, this supplemental measure provides investors with
useful information as it presents the GE effective tax rate that
can be used in comparing the GE results to other non-fi nancial
services businesses.