Question

Non-GAAP Disclosures General Electric (GE) disclosed the following non-GAAP reconciliation for its Industrial segment from its 2018 Form 10-K. 2018 2017 2016 $ millions GE Industrial earnings (loss) Less: Nonoperating pension benefit costs (net of tax) Less: Gains and impairments for disposed or held for sale businesses (net of tax) Less: Restructuring and other (net of tax) Less: Goodwill impairments (net of tax) Less: GE Industrial U.S. tax reform enactment adjustment Adjusted GE Industrial earnings (loss) (Non-GAAP) $(18,322) $(1,841) $8,053 (1,944) (1,550) (1,359) 867 864 2,113 (2,948) (2,778) (2,483) (19,910) (1,029) (34) (4,905) $5,647 $7,557 $9,782 Required a. Explain how the non-GAAP items (in total) affected adjusted earnings each year. Net effect of non-GAAP adjustments in 2016: Increase adjusted net earnings Net effect of non-GAAP adjustments in 2017: Increase adjusted net earnings Net effect of non-GAAP adjustments in 2018: Increase adjusted net earnings - b. Calculate net non-GAAP items as a percentage of net earnings for each year presented. Note: Round your answers to the nearest whole percentage point. Note: Do not use negative sign Screenshot swers
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Answer 1

Non-GAAP Disclosure Related Ratios:

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b. Total of Net Non-GAAP Adjustment Items as percentage of Net Earnings:

b. Non-GAAP Adjustment/Net earnings 2018 131% 2017 510% 2016 21%

Calculation:

Non-GAAP Adjustments Nonoperating Pension benefit Costs $ Gains and Impairments on Disposed or $ Restructuring and other $ Goodwill impairments $ GE Industrial US Tax reform enactment $ Net Non-GAAP Adjustments (A) $ Net eanings (B) $ Non-GAAP Adjustment/Net earnings (4 2018 (1,944.00) $ 867.00 $ (2,948.00) $ (19,910.00) $ (34.00) $ (23,969.00) $ (18,322.00) $ 131% 2017 2016 (1,550.00) $ (1,359.00) 864.00 $ 2,113.00 (2,778.00) $ (2,483.00) (1,029.00) $ (4,905.00) $ (9,398.00) $ (1,729.00) (1,841.00) $ 8,053.00 510% -21%

As per instruction, Negative sign is not used in last answer for percentage of 2016.

c. Year over year changes in percentage

Net earnings Non-GAAP income 2018 YoY % Change 2017 YoY % Change -895% -123% -25% -23%

Calculation:

2016 8,053.00 Year Over Year Change Net earnings Year over year Change (Current year Less Previous year) (A) Y-0-Y in % (A/ Previous year earnings) $ $ 2018 (18,322.00) $ (16,481.00) $ -895% 2017 (1,841.00) $ (9,894.00) -123% - 9,782.00 Non-GAAP Net Income (From Explanation of b.) Year over year Change (Current year Less Previous year) (A) Y-O-Y in % (A/ Previous year) $ $ 5,647.00 $ (1,910.00) $ -25% 7,557.00 $ (2,225.00) -23%