GENERAL ELECTRIC CO — Proxy Solicitation & Information Statement 2019

Mar 18, 2019

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2019 Proxy Statement Supplemental Information

March 18, 2019

Imagination at work.

Non-GAAP Financial Measures Used in 2019 Proxy Statement

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Non-GAAP financial measures

The table below lists the non-GAAP financial measures used in the 2019 Proxy Statement and indicates where you can find more information, including how we calculate the measure and why we use it.

Non-GAAP financial measure	Proxy pages	Where you can find more info*
Adjusted earnings per share	9, 32	Page 74 of 2018 Form 10-K
Adjusted GE Industrial free cash flow	9, 32	Page 76 of 2018 Form 10-K
Earnings (for Aviation and Healthcare)	9, 32	Page 3 of this document
Free cash flow (for Aviation and Healthcare)	9, 32	Page 3 of this document
Total cash generation (2016-2018)	9, 34	Page 4 of this document
Adjusted GE Industrial Profit Margin	9, 34	Page 75 of 2018 Form 10-K
Industrial Return on Total Capital (ROTC)	9, 34	Page 5 of this document
Cash returned to investors	9, 34	Page 6 of this document

Our 2018 Annual Report and Form 10-K is available at https://www.ge.com/investor-relations/sites/default/files/GE_AR18.pdf

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*When referring to the 2018 Form 10-K, please see “Financial Measures that Supplement U.S. Generally Accepted Accounting Principles Measures (Non-GAAP Financial Measures)” beginning on page 70.

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Aviation & Healthcare - Earnings & Free Cash Flows

($ in millions)

Earnin s Free Cash Flows g Aviation 2018 Aviation 2018 Segment profit $6,466 Segment CFOA $5,373 Segment interest expense (303) Additions to PP&E (1,070) Segment earnings $6,163 Capitalized software (73) Segment Free Cash Flows $4,230 Healthcare 2018 Healthcare 2018 Segment profit $3,698 Segment CFOA $3,485 Segment interest expense (247) Additions to PP&E (378) Segment earnings $3,451 Capitalized software (90) Segment Free Cash Flows $3,018

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Total cash generation (2016-2018)

($ in millions)

$ in millions)
Cash from GE’s operating activities from continuing operations, as reported Plus GE proceeds from principal business dispositions Less BHGE CFOA Less BHGE proceeds from business dispositions Plus BHGE Class B dividend Total cash	$29,972 5,357 - - - $35,330 2016	2016		$11,033 3,106 (477) (5) 251 $14,871 2017		$2,258 6,507 1,763 453 495 $7,043 2018		’16-’18
								$43,263 14,970 1,286 448 746 $57,244

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We believe that total cash is a useful financial metric to assess our ability to pursue opportunities to enhance our growth as it focuses management on the cash we have available to execute on our capital allocation plans and position GE for long-term growth.

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Industrial Return on Total Capital (ROTC)

($ in millions)

Earnings (loss) from continuing operations (GAAP) Less: GE Capital earnings (loss) from continuing operations (GAAP) Plus: GE after-tax interest GE Adjusted Industrial return (non-GAAP) Average GE shareowners’ equity, excluding effects of discontinued operations Less: average GE Capital shareowners’ equity, excluding effects of discontinued operations Average GE Industrial shareowners’ equity, excluding effects of discontinued operations Plus: average debt Plus: other, net Adjusted GE Industrial capital (non-GAAP) GE Industrial ROTC (non-GAAP)	2018	2018
	$(20,717) (1) 2,139 (18,577) 42,435 8,523 33,912 43,453 19,749 97,113 (19)%
		(18,577) 42,435 8,523 33,912 43,453 19,749
		97,113
		(19)%

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Our GE Industrial ROTC calculation excludes earnings (losses) of discontinued operations from the numerator. We believe that this is a clearer way to measure the ongoing trend in return on GE Industrial capital for the continuing operations of the business to the extent that discontinued operations have affected our reported results. Our GE Industrial shareowners’ equity, excluding effects of discontinued operations used in the denominator is adjusted for debt, redeemable noncontrolling interests and noncontrolling interests.

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Cash returned to investors (2016-2018)

($ in millions)

	2016	2017	2018	’16-’18
GE dividends paid to	$8,474	$8,355	$4,179	$21,008
shareowners
Buyback (book basis)	22,005	3,782	245	26,032
Total cash returned to investors	$30,479	$12,138	$4,424	$47,041

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Incentive compensation metrics

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2018 bonus pool funding metrics

Adjusted earnings per share (EPS)

Represents industrial earnings, excluding non-operating benefit costs, gains (losses) and impairments for disposed or held for sale businesses, restructuring and other, goodwill impairments, after-tax, excluding the effects of U.S. tax reform enactment adjustment, divided by the average number of diluted common shares. See page 74 of the 2018 10-K.

Adjusted GE Industrial free cash flows

Represents cash from operating activities plus investments in property, plant and equipment and additions to internal-use software; this metric excludes any dividends received from GE Capital and any cash received from dispositions of property, plant and equipment, without the effects of cash used for taxes related to business sales and contributions to the GE Pension Plan. See page 76 of the 2018 10-K.

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2016-2018 LTPA and 2016 PSU metrics

• Industrial Operating + Verticals EPS (2016-

2018) (LTPA)

Represents Industrial operating + Verticals earnings divided by the average number of diluted common shares. During the 2016-2018 performance period the threshold performance level was not met. The company no longer reports this metric.

• Total Cash Generation (2016-2018) (LTPA & PSUs)

Represents GE cash from operating activities (including from the Industrial continuing operations of the company and dividends from GE Capital) plus after-tax proceeds from Industrial principal business dispositions, with BHGE on a dividend basis from the second half of 2017. See page 4 for how this metric is calculated.

• Adjusted GE Industrial Profit Margin (2018) (LTPA & PSUs)

Represents segment profit from GE’s industrial segments and adjusted corporate operating costs as a percentage of revenue from these segments and corporate. See page 75 of the 2018 Form 10-K.

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• Industrial ROTC (2018) (LTPA)

Represents Industrial 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 Industrial equity (excluding effects of discontinued operations and the estimated value of assets held to support GE Capital), borrowings, mandatorily redeemable preferred stock and

noncontrolling interests (on an annual basis, calculated using a five-point average). See page 5 for how this metric is calculated.

• Cash Returned to Investors (2016-2018) (LTPA) Represents dividends paid plus share repurchases. See page 6 for how this metric is calculated.

• Relative Total Shareholder Return (2016-2018) (PSUs)

Represents GE’s change in stock price plus returns, assuming the reinvestment of dividends into additional GE stock, vs. the S&P 500. This metric is only applied in the event of a payout on the 2016 PSUs (and no payout was made).

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Reconciliation of Proxy Tables to SEC-Required Tables

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Reconciliation of proxy tables to SEC-required tables*

We have simplified certain compensation table column headers in GE’s 2019 Proxy Statement to provide, what we believe, is clearer, more transparent disclosure for investors. The table below explains how these column headers line up with the SEC labels.

SEC-required Summary Compensation Table GE’s Summary Compensation Table (p. 38)	SEC-required Summary Compensation Table GE’s Summary Compensation Table (p. 38)
Stock Awards	PSUs & RSUs
Option Awards	Stock Options
Non-Equity Incentive Plan Compensation	LTPAs
Change in Pension Value and Nonqualified Deferred Compensation Earnings	Pension & Deferred Comp.
SEC-required Grants of Plan-Based Awards Table	GE’s Long-Term Incentive Compensation Table (p. 40)
Estimated Future Payouts Under Equity Incentive Plan Awards	Estimated Future Payouts Under Performance Share Units (#)
All Other Stock Awards: Number of Shares of Stock or Units	Restricted Stock Units (#)
All Other Option Awards: Number of Securities Underlying Options	Stock Options (#)
Exercise Price of Option Awards	Stock Option Exercise Price
Grant Date Fair Value of Stock and Option Awards	Grant Date Fair Value of Awards
SEC-required Outstanding Equity Awards at Fiscal Year-End Table	GE’s Outstanding Equity Awards Table (p. 41)
Number of Securities Underlying Unexercised Options (Exercisable)	Portion Exercisable
Number of Securities Underlying Unexercised Options (Unexercisable)	Subtract Portion Exercisable from Number Outstanding
Number of Shares or Units of Stock That Have Not Vested	Number Outstanding
Market Value of Shares or Units of Stock That Have Not Vested	Market Value
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested	Number Outstanding
Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested	Market Value

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*Page numbers refer to the company’s 2019 Proxy Statement, as filed with the SEC.

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