GE (NYSE:GE) today announced a series of actions it took on December 7, 2020, as part of its plan to solidify its financial position, building on a series of transactions earlier this year:
- GE voluntarily pre-funded $2.5 billion of estimated minimum ERISA GE Pension Plan funding requirements for 2021, 2022, and into 2023.
- GE also repaid $1.5 billion of its intercompany loan to GE Capital.
GE Chairman and CEO H. Lawrence Culp, Jr., said, “With these balance sheet actions, along with the series of proactive actions we’ve taken this year, we continue to execute on our commitment to solidify GE’s financial position. With line of sight to at least $2.5 billion of Industrial free cash flow in the fourth quarter and positive free cash flow in 2021, these steps further reduce debt, de-risk our balance sheet, and put us on stronger financial footing to accelerate GE’s transformation. We remain committed to maintaining elevated liquidity amid an uncertain environment and achieving our leverage goals over time.”
These actions reduced GE’s pension deficit by $2.5 billion and reduced the intercompany balance, further simplifying GE. Including today’s announced actions and scheduled maturities in the fourth quarter, GE will reduce debt by approximately $14.5 billion in 2020—including $9.6 billion in GE Industrial debt and $4.9 billion in GE Capital debt—and by approximately $28 billion since the beginning of 2019.
GE had previously announced it would pre-fund approximately $4-5 billion in 2020 to meet its minimum ERISA pension funding requirements through at least 2022. Given better-than-expected pension asset performance in 2020, GE now pre-funded $2.5 billion for 2021, 2022, and into 2023.
Caution Concerning Forward-Looking Statements
This document contains forward-looking statements – that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see https://www.ge.com/investor-relations/important-forward-looking-statement-information, as well as our annual report on Form 10-K and other SEC reports. We do not undertake to update our forward-looking statements.
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