GE Plans to Reduce Quarterly Dividend in Conjunction with Revised Capital Allocation Framework
November 13 2017 - 6:30AM
Business Wire
GE (NYSE:GE) today announced that its Board of Directors has
determined to set the Company’s quarterly dividend to a projected
payout of $.12 per outstanding share of the Company's stock. This
represents a 50% reduction from the current quarterly dividend of
$.24. This change will be effective beginning with the Board’s next
dividend declaration, which is expected to occur in December.
“We understand the importance of this decision to our
shareowners and we have not made it lightly. We are focused on
driving total shareholder return and believe this is the right
decision to align our dividend payout to cash flow generation,"
said John Flannery, Chairman and CEO of GE.
Mr. Flannery added, "The dividend remains an important component
of GE’s capital allocation framework. With this action and others
that we will be discussing this morning, we are acting with urgency
to make GE simpler and stronger to drive growth and create more
value for our shareowners.”
The Company will discuss additional business and strategy
updates at the GE Investor Update, which will begin at 9:00AM EST
today, November 13, 2017.
About GE
GE (NYSE:GE) is the world’s Digital Industrial Company,
transforming industry with software-defined machines and solutions
that are connected, responsive and predictive. GE is organized
around a global exchange of knowledge, the "GE Store," through
which each business shares and accesses the same technology,
markets, structure and intellect. Each invention further fuels
innovation and application across our industrial sectors. With
people, services, technology and scale, GE delivers better outcomes
for customers by speaking the language of
industry. www.ge.com
GE’s Investor Relations website at www.ge.com/investor and our
corporate blog at www.gereports.com and @GE_Reports on Twitter, as
well as GE’s Facebook page and Twitter accounts, contain a
significant amount of information about GE, including financial and
other information for investors. GE encourages investors to visit
these websites from time to time, as information is updated and new
information is posted.
Caution Concerning Forward-Looking Statements
This document contains "forward-looking statements" – that is,
statements related to future, not past, events. In this context,
forward-looking statements often address our expected future
business and financial performance and financial condition, and
often contain words such as "expect," "anticipate," "intend,"
"plan," "believe," "seek," "see," "will," "would," “estimate,”
“forecast,” "target," “preliminary,” or “range.”
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements about our
announced plan to exit $20 billion or more of assets in 2018 and
2019, the completion of our announced plan to reduce the size of
our financial services businesses, including earnings per share of
GE Capital Global Holdings, LLC’s (GE Capital) retained businesses
(Verticals); expected income and Industrial operating profit;
earnings per share, including the impact of the new revenue
recognition accounting standard; revenues; organic growth; growth
and productivity associated with our Digital and Additive
businesses; margins; cost structure and plans to reduce costs;
restructuring, impairment or other financial charges; tax rates;
transaction-related synergies, proceeds and gains; cash flows and
cash flow conversion, including the impact of working capital,
contract assets and pension funding contributions; returns on
capital and investment; capital expenditures; capital allocation,
including dividends, share repurchases, acquisitions and liquidity;
or capital structure, including credit ratings, debt-to-earnings
ratios and leverage.
For us, particular uncertainties that could cause our actual
results to be materially different than those expressed in our
forward-looking statements include:
- the ongoing portfolio review being
undertaken by our new chief executive officer;
- our ability to convert Industrial
earnings into cash and the amount and timing of our cash flows and
earnings, which may be impacted by long-term services agreement
dynamics, the amount and timing of dividends from GE Capital and
other conditions, all of which may affect our ability to pay our
quarterly dividend at the planned level or to repurchase shares at
planned levels;
- our ability to maintain our current
credit rating and the impact on our funding costs and competitive
position if we do not do so;
- changes in law, economic and financial
conditions, including interest and exchange rate volatility,
commodity and equity prices and the value of financial assets;
- the impact of conditions in the
financial and credit markets on the availability and cost of GE
Capital funding, and GE Capital’s exposure to counterparties;
- pending and future mortgage loan
repurchase claims, other litigation claims and the U.S. Department
of Justice’s investigation under the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 and other investigations in
connection with WMC, which may affect our estimates of liability,
including possible loss estimates;
- GE Capital’s ability to pay dividends
to GE at the planned level, which may be affected by GE Capital’s
cash flows and earnings, claims and investigations relating to WMC,
charges that may be required in connection with GE Capital’s
run-off insurance operations, credit ratings and other
factors;
- our ability to launch new products in a
cost-effective manner;
- our ability to increase margins through
restructuring and other cost reduction measures;
- our ability to convert pre-order
commitments/wins into orders/bookings;
- the price we realize on orders/bookings
since commitments/wins are stated at list prices;
- customer actions or market developments
such as early aircraft retirements, reduced demand for equipment
and services in the energy markets in which we operate or shifts in
the competitive landscape for our products and services, changes in
economic conditions, including oil prices, and other factors that
may affect the level of demand and financial performance of the
major industries and customers we serve;
- the impact of regulation and
regulatory, investigative and legal proceedings and legal
compliance risks, including the impact of Alstom investigative and
legal proceedings;
- our capital allocation plans, as such
plans may change including with respect to the timing and size of
dividends, dividend yield, share repurchases, acquisitions, joint
ventures, dispositions, pension funding contributions, organic
investments, including research and development, investment in
Digital and other capital expenditures, and other strategic
actions;
- our success in completing, including
obtaining regulatory approvals and satisfying other closing
conditions for, announced transactions, such as our announced plan
to sell our Industrial Solutions business or other dispositions
that we may pursue;
- our success in integrating acquired
businesses and operating joint ventures, including Baker Hughes, a
GE company;
- our ability to realize revenue and cost
synergies from announced transactions, acquired businesses and
joint ventures, including Alstom and Baker Hughes, a GE
company;
- the impact of potential information
technology or data security breaches;
- the other factors that are described in
“Forward-Looking Statements” in Baker Hughes, a GE company’s, most
recent earnings release or SEC filing; and
- the other factors that are described in
“Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2016.
These or other uncertainties may cause our actual future results
to be materially different than those expressed in our
forward-looking statements. We do not undertake to update our
forward-looking statements.
This document also includes certain forward-looking projected
financial information that is based on current estimates and
forecasts. Actual results could differ materially.
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version on businesswire.com: http://www.businesswire.com/news/home/20171113005581/en/
Investor Contact:Matt Cribbins,
617.443.3400matthewg.cribbins@ge.com
Media Contact:Jennifer Erickson,
646.682.5620jennifer.erickson@ge.com
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