GE 2014 Annual Report Download - page 115

GE 2014 FORM 10-K 95
MD&A SUPPLEMENTAL INFORMATION
OPERATING EARNINGS, OPERATING EPS AND OPERATING EPS EXCLUDING THE EFFECTS OF THE
2011 PREFERRED STOCK REDEMPTION
(In millions; except earnings per share) 2014 2013 2012 2011 2010
Earnings from continuing operations attributable to GE $ 15,345 $ 15,177 $ 14,624 $ 14,122 $ 12,577
Adjustment (net of tax): non-operating pension costs (income) 1,378 1,705 1,386 688 (204)
Operating earnings $ 16,723 $ 16,882 $ 16,010 $ 14,810 $ 12,373
Earnings per share – diluted(a)
Continuing earnings per share $ 1.51 $ 1.47 $ 1.38 $ 1.23 $ 1.15
Adjustment (net of tax): non-operating pension costs (income) 0.14 0.16 0.13 0.06 (0.02)
Operating earnings per share 1.65 1.64 1.51 1.30 1.13
Adjustment: effects of the 2011 preferred stock redemption - - - 0.08 -
Operating EPS excluding the effects of the 2011
preferred stock redemption $ 1.65 $ 1.64 $ 1.51 $ 1.37 $ 1.13
(a) Earnings-per-share amounts are computed independently. As a result, the sum of per-share amounts may not equal the total.
INDUSTRIAL OPERATING EARNINGS
(Dollars in millions) 2014
2013
Earnings from continuing operations attributable to GE $ 15,345 $ 15,177
Adjustments (net of tax): non-operating pension costs (income) 1,378 1,705
Operating earnings 16,723 16,882
Less GECC earnings from continuing operations attributable to the Company 7,341 8,258
Less effect of GECC preferred stock dividends (322) (298)
Operating earnings excluding GECC earnings from continuing operations
and the effect of GECC preferred stock dividends (Industrial operating earnings) $ 9,704 $ 8,922
Industrial operating earnings as a percentage of operating earnings 58% 53%
Operating earnings excludes non-service-related pension costs of our principal pension plans comprising interest cost,
expected return on plan assets and amortization of actuarial gains/losses. The service cost, prior service cost and curtailment
loss components of our principal pension plans are included in operating earnings. We believe that these components of
pension cost better reflect the ongoing service-related costs of providing pension benefits to our employees. As such, we
believe that our measure of operating earnings provides management and investors with a useful measure of the operational
results of our business. Other components of GAAP pension cost are mainly driven by capital allocation decisions and market
performance, and we manage these separately from the operational performance of our businesses. Neither GAAP nor
operating pension costs are necessarily indicative of the current or future cash flow requirements related to our pension plan.
We also believe that this measure, considered along with the corresponding GAAP measure, provides management and
investors with additional information for comparison of our operating results to the operating results of other companies. We
believe that presenting operating earnings separately for our industrial businesses also provides management and investors
with useful information about the relative size of our industrial and financial services businesses in relation to the total
company. We also believe that operating EPS excluding the effects of the $0.8 billion preferred dividend related to the
redemption of our preferred stock (calculated as the difference between the carrying value and the redemption value of the
preferred stock) is a meaningful measure because it increases the comparability of period-to-period results.