GE 2014 Annual Report Download - page 117

GE 2014 FORM 10-K 97
MD&A SUPPLEMENTAL INFORMATION
INDUSTRIAL CASH FLOWS FROM OPERATING ACTIVITIES (INDUSTRIAL CFOA) AND GE CFOA EXCLUDING THE
EFFECTS OF NBCU DEAL-RELATED TAXES
(In millions) 2014  2013 2012 2011 2010
Cash from GE's operating activities, as reported $ 15,171 $ 14,255 $ 17,826 $ 12,057 $ 14,746
Less dividends from GECC 3,000 5,985 6,426 - -
Cash from GE's operating activities, excluding dividends
from GECC (Industrial CFOA) $ 12,171 $ 8,270 $ 11,400 $ 12,057 $ 14,746
Cash from GE's operating activities, as reported $ 15,171 $ 14,255
Adjustment: effects of NBCU deal-related taxes - 3,184
GE CFOA excluding effects of NBCU deal-related taxes $ 15,171 $ 17,439
We refer to cash generated by our industrial businesses as "Industrial CFOA," which we define as GE’s cash from continuing
operating activities less the amount of dividends received by GE from GECC. This includes the effects of intercompany
transactions, including GE customer receivables sold to GECC; GECC services for trade receivables management and
material procurement; buildings and equipment (including automobiles) leased between GE and GECC; information
technology (IT) and other services sold to GECC by GE; aircraft engines manufactured by GE that are installed on aircraft
purchased by GECC from third-party producers for lease to others; and various investments, loans and allocations of GE
corporate overhead costs. We believe that investors may find it useful to compare GE’s operating cash flows without the effect
of GECC dividends, since these dividends are not representative of the operating cash flows of our industrial businesses and
can vary from period-to-period based upon the results of the financial services businesses. We also believe that investors may
find it useful to compare Industrial CFOA excluding the effects of taxes paid related to the NBCU transaction. Management
recognizes that these measures may not be comparable to cash flow results of companies that contain both industrial and
financial services businesses, but believes that this comparison is aided by the provision of additional information about the
amounts of dividends paid by our financial services business and the separate presentation in our financial statements of the
Financial Services (GECC) cash flows. We believe that our measures of Industrial CFOA and CFOA excluding NBCU deal-
related taxes provide management and investors with useful measures to compare the capacity of our industrial operations to
generate operating cash flows with the operating cash flows of other non-financial businesses and companies and as such
provide useful measures to supplement the reported GAAP CFOA measure.
FREE CASH FLOW
(Dollars in millions) 2014 2013 V%
Cash from GE's operating activities (continuing operations) $ 15,171 $ 14,255 6%
Less GE additions to property, plant and equipment 3,970 3,680
Free cash flow 11,201 10,575 6%
We define free cash flow as GE’s cash from operating activities (continuing operations) less GE additions to property, plant
and equipment, which are included in cash flows from investing activities. We believe that free cash flow is a useful financial
metric to assess our ability to pursue opportunities to enhance our growth. We also believe that presenting free cash flow
separately for our industrial businesses provides management and investors with useful information about the trends of our
industrial businesses and enables a more direct comparison to other non-financial businesses and companies. Management
recognizes that the term free cash flow may be interpreted differently by other companies and under different circumstances.
Although this may have an effect on comparability of absolute percentage growth from company to company, we believe that
these measures are useful in assessing trends of the respective businesses or companies and may therefore be a useful tool
in assessing period-to-period performance trends.