GE 2014 Annual Report Download - page 142

122 GE 2014 FORM 10-K
GLOSSARY
Option The right, not the obligation, to execute a transaction at a designated price, generally involving equity interests, interest
rates, currencies or commodities. See “Hedge.”
Other Comprehensive Income Changes in assets and liabilities that do not result from transactions with shareowners and
are not included in net income but are recognized in a separate component of shareowners’ equity. Other Comprehensive
Income includes the following components:
- Investment securities – Unrealized gains and losses on securities classified as available-for-sale.
- Currency translation adjustments – The result of translating into U.S. dollars those amounts denominated or
measured in a different currency.
- Cash flow hedges – The effective portion of the fair value of cash flow hedges. Such hedges relate to an exposure
to variability in the cash flows of recognized assets, liabilities or forecasted transactions that are attributable to a
specific risk.
- Benefit plans – Unamortized prior service costs and net actuarial losses (gains) related to pension and retiree health
and life benefits.
- Reclassification adjustments – Amounts previously recognized in Other Comprehensive Income that are included
in net income in the current period.
Product services For purposes of the financial statement display of sales and costs of sales in our Statement of Earnings,
“goods” is required by U.S. Securities and Exchange Commission regulations to include all sales of tangible products, and
“services” must include all other sales, including other services activities. In our Management’s Discussion and Analysis of
Operations section of this Form 10-K, we refer to sales under product services agreements and sales of both goods (such as
spare parts and equipment upgrades) and related services (such as monitoring, maintenance and repairs) as sales of “product
services,” which is an important part of our operations.
Product services agreements Contractual commitments, with multiple-year terms, to provide specified services for products
in our Power & Water, Oil & Gas, Aviation and Transportation installed base – for example, monitoring, maintenance, service
and spare parts for a gas turbine/generator set installed in a customer’s power plant.
Productivity The rate of increased output for a given level of input, with both output and input measured in constant currency.
Progress collections Billings and payments received on customer contracts before the related revenue is recognized.
Retained interest A portion of a transferred financial asset retained by the transferor that provides rights to receive portions of
the cash inflows from that asset.
Return on average GE shareowners’ equity Earnings from continuing operations before accounting changes divided by
average GE shareowners’ equity, excluding effects of discontinued operations (on an annual basis, calculated using a five-
point average). Average GE shareowners’ equity, excluding effects of discontinued operations, as of the end of each of the
years in the five-year period ended December 31 of the year for which the ratio is calculated is described in the Supplemental
Information section.
Return on average total capital invested For GE, earnings from continuing operations before accounting changes plus the
sum of after-tax interest and other financial charges and noncontrolling interests, divided by the sum of the averages of total
shareowners’ equity (excluding effects of discontinued operations), borrowings, mandatorily redeemable preferred stock and
noncontrolling interests (on an annual basis, calculated using a five-point average). Average total shareowners’ equity,
excluding effects of discontinued operations as of the end of each of the years in the five-year period ended December 31 of
the year for which the ratio is calculated is described in the Supplemental Information section.