GE filing in 2020, mini thesis
https://www.ge.com/investor-relations/sites/default/files/ge_webcast_10Q_07312019.pdf
Page 16, Paragraph 1, With respect to this announcement, we completed $15 billion of asset reductions during 2018 and $1.6 billion of asset reductions during the first half of 2019, including approximately $0.5 billion during the second quarter of 2019, We expect to execute total asset reductions of approximately $10 billion by the end of 2019. 8.4 Billion for H2 2019.
Paragraph 5, As previously disclosed within the GAAP Reserve Sensitivities included in “Other Items” in our Annual Report on Form 10-K for the year ended December 31, 2018, a 25 basis point reduction in our discount rate, holding all other assumptions within our 2018 premium deficiency test constant, could increase our future policy benefit reserves on a GAAP basis by up to $1.0 billion (pre-tax).
Our discount rate is based upon the actual yields on our investment security portfolio and our forecasted reinvestment rate, which comprises the future rates at which we expect to invest proceeds from investment maturities and projected future capital contributions. While the movement in market rates impacts the reinvestment rate, it does not typically impact the actual yield on our existing investments. Furthermore, our assumed reinvestment rate on future fixed income investments is based both on expected long-term average rates and current market interest rates.
Page 22, Paragraph 3, GE cash, cash equivalents and restricted cash totaled $20.1 billion at June 30, 2019, including $3.1 billion in BHGE, $2.7 billion of cash held in countries with currency control restrictions, and $0.6 billion of restricted use cash. Excluding these items, total GE cash and cash equivalents was $13.6 billion at June 30, 2019.
GE Capital cash, cash equivalents and restricted cash totaled $11.9 billion at June 30, 2019 (excluding $0.6 billion classified within discontinued operations), including $0.9 billion which was subject to regulatory restrictions, primarily in insurance entities.
32 Billion Total, 13.1 Billion in the US and 18.8 held outside of the US minus the 6.4 Billion that isn’t retrievable, GE has 25.5 Billion Cash and Cash equivalents at end Q2 2019 with the majority outside of the US, GE has 106 Billion in Total Debt ( Page 23 )
Page 22, Paragraph 6&7, GE Indicates Net Available Credit of 35.3 Billion which is positive, 7.4 Billion in commitment reductions in Q4 2019 will bring it down to 28 Billion, still given it a healthy emergency line
Page 24, We have relied, and may continue to rely, on the short- and long-term debt capital markets to fund, among other things, a significant portion of our operations. The cost and availability of debt financing is influenced by our credit ratings. Moody’s Investors Service (Moody’s), Standard and Poor’s Global Ratings (S&P), and Fitch Ratings (Fitch) currently issue ratings on GE and GE Capital short- and long-term debt. Rest of page indicates Credit Conditions.
I believe that it’s loss estimate to derivatives on further downgrades is lower then reality would prove, especially if it were to BB+ or lower. Total debt impact would be substantial given the size of debt
If our short-term credit ratings were to fall below A-2/P-2/F2, it is possible that we would lose all or part of our access to the tier-2 commercial paper markets, which would reduce our borrowing capacity in those markets. This may result in increased utilization of our revolving credit facilities to fund our intra-quarter operation
https://www.ge.com/investor-relations/sites/default/files/ge_webcast_10Q_07312019.pdf
Page 16, Paragraph 1, With respect to this announcement, we completed $15 billion of asset reductions during 2018 and $1.6 billion of asset reductions during the first half of 2019, including approximately $0.5 billion during the second quarter of 2019, We expect to execute total asset reductions of approximately $10 billion by the end of 2019. 8.4 Billion for H2 2019.
Paragraph 5, As previously disclosed within the GAAP Reserve Sensitivities included in “Other Items” in our Annual Report on Form 10-K for the year ended December 31, 2018, a 25 basis point reduction in our discount rate, holding all other assumptions within our 2018 premium deficiency test constant, could increase our future policy benefit reserves on a GAAP basis by up to $1.0 billion (pre-tax).
Our discount rate is based upon the actual yields on our investment security portfolio and our forecasted reinvestment rate, which comprises the future rates at which we expect to invest proceeds from investment maturities and projected future capital contributions. While the movement in market rates impacts the reinvestment rate, it does not typically impact the actual yield on our existing investments. Furthermore, our assumed reinvestment rate on future fixed income investments is based both on expected long-term average rates and current market interest rates.
Page 22, Paragraph 3, GE cash, cash equivalents and restricted cash totaled $20.1 billion at June 30, 2019, including $3.1 billion in BHGE, $2.7 billion of cash held in countries with currency control restrictions, and $0.6 billion of restricted use cash. Excluding these items, total GE cash and cash equivalents was $13.6 billion at June 30, 2019.
GE Capital cash, cash equivalents and restricted cash totaled $11.9 billion at June 30, 2019 (excluding $0.6 billion classified within discontinued operations), including $0.9 billion which was subject to regulatory restrictions, primarily in insurance entities.
32 Billion Total, 13.1 Billion in the US and 18.8 held outside of the US minus the 6.4 Billion that isn’t retrievable, GE has 25.5 Billion Cash and Cash equivalents at end Q2 2019 with the majority outside of the US, GE has 106 Billion in Total Debt ( Page 23 )
Page 22, Paragraph 6&7, GE Indicates Net Available Credit of 35.3 Billion which is positive, 7.4 Billion in commitment reductions in Q4 2019 will bring it down to 28 Billion, still given it a healthy emergency line
Page 24, We have relied, and may continue to rely, on the short- and long-term debt capital markets to fund, among other things, a significant portion of our operations. The cost and availability of debt financing is influenced by our credit ratings. Moody’s Investors Service (Moody’s), Standard and Poor’s Global Ratings (S&P), and Fitch Ratings (Fitch) currently issue ratings on GE and GE Capital short- and long-term debt. Rest of page indicates Credit Conditions.
I believe that it’s loss estimate to derivatives on further downgrades is lower then reality would prove, especially if it were to BB+ or lower. Total debt impact would be substantial given the size of debt
If our short-term credit ratings were to fall below A-2/P-2/F2, it is possible that we would lose all or part of our access to the tier-2 commercial paper markets, which would reduce our borrowing capacity in those markets. This may result in increased utilization of our revolving credit facilities to fund our intra-quarter operation
