Stock Analysis on Net

GE Aerospace (NYSE:GE)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

GE Aerospace, income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
U.S. Federal (423) 62 (1,346) 939 146
Non-U.S. 823 1,041 1,154 1,331 2,008
U.S. State 140 4 (85) 182 (324)
Current 540 1,107 (277) 2,452 1,830
U.S. Federal 49 (956) (567) (2,032) (1,266)
Non-U.S. 590 466 608 (793) 106
U.S. State (17) (141) (50) (101) 56
Deferred 622 (631) (9) (2,926) (1,104)
Provision (benefit) for income taxes 1,162 476 (286) (474) 726

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. GE Aerospace current increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. GE Aerospace deferred decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Provision (benefit) for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. GE Aerospace provision (benefit) for income taxes increased from 2021 to 2022 and from 2022 to 2023.

Effective Income Tax Rate (EITR)

GE Aerospace, effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
U.S. federal statutory income tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
Tax on global activities including exports 4.50% 24.20% -4.20% -28.50% 91.00%
U.S. general business credits -2.70% -17.40% 5.10% -3.30% -22.50%
Debt tender and related valuation allowances 0.00% 2.10% -25.50% 0.00% 0.00%
Deductible stock and restructuring losses 0.00% 0.00% 15.80% 0.00% 0.00%
Retained and sold ownership interests -11.90% -0.90% 0.10% 0.00% 0.00%
Goodwill impairments 0.00% 0.00% 0.00% 6.90% 26.00%
All other, net 0.50% 4.70% -4.50% -6.10% -52.50%
Actual income tax rate, before Tax Cuts and Jobs Act enactment 11.40% 33.70% 7.80% -10.00% 63.00%
Tax Cuts and Jobs Act enactment 0.00% 0.00% 0.00% 0.90% 0.20%
Actual income tax rate 11.40% 33.70% 7.80% -9.10% 63.20%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Actual income tax rate, before Tax Cuts and Jobs Act enactment Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. GE Aerospace actual income tax rate, before Tax Cuts and Jobs Act enactment increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Components of Deferred Tax Assets and Liabilities

GE Aerospace, components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Insurance company loss reserves 3,185 1,782 1,700
Progress collections, contract assets and deferred items 2,753 2,520 2,093
Accrued expenses and reserves 2,197 2,538 2,635
Deferred expenses 1,317 1,925 1,597
Other compensation and benefits 1,143 975 1,397
Principal pension plans 1,359 1,806 2,375
Non-U.S. loss carryforwards 972 1,240 1,354
Investment securities 516 (1,278)
Principal retiree benefit plans 692 896
Other 843 703 1,329
Deferred tax assets 13,769 14,697 14,098
Depreciation (702)
Global investments, partnerships, join ventures and non-consolidated entities (1,389) (1,011) (1,775)
Other (1,103) (1,981) (1,468)
Deferred tax liabilities (3,194) (2,992) (3,243)
Net deferred income tax asset (liability) (legacy) 12,081 9,889
Net deferred income tax asset (liability) 10,575 11,705 10,855 12,081 9,889

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. GE Aerospace deferred tax assets increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Net deferred income tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. GE Aerospace net deferred income tax asset (liability) increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Deferred Tax Assets and Liabilities, Classification

GE Aerospace, deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Deferred income tax assets 10,575 11,705 10,855 12,081 9,889

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Deferred income tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. GE Aerospace deferred income tax assets increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Adjustments to Financial Statements: Removal of Deferred Taxes

GE Aerospace, adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 163,045 187,788 198,874 253,452 266,048
Less: Noncurrent deferred tax assets, net 10,575 11,705 10,855 12,081 9,889
Total assets (adjusted) 152,470 176,083 188,019 241,371 256,159
Adjustment to Total GE Shareholders’ Equity
Total GE shareholders’ equity (as reported) 27,378 36,366 40,310 35,552 28,316
Less: Net deferred tax assets (liabilities) 10,575 11,705 10,855 12,081 9,889
Total GE shareholders’ equity (adjusted) 16,803 24,661 29,455 23,471 18,427
Adjustment to Net Earnings (loss) Attributable To The Company
Net earnings (loss) attributable to the Company (as reported) 9,481 225 (6,520) 5,704 (4,979)
Add: Deferred income tax expense (benefit) 622 (631) (9) (2,926) (1,104)
Net earnings (loss) attributable to the Company (adjusted) 10,103 (406) (6,529) 2,778 (6,083)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).


GE Aerospace, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

GE Aerospace, adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 14.68% 0.31% -9.17% 7.81% -5.69%
Adjusted net profit margin 15.65% -0.55% -9.18% 3.80% -6.95%
Total Asset Turnover
Reported total asset turnover 0.40 0.39 0.36 0.29 0.33
Adjusted total asset turnover 0.42 0.42 0.38 0.30 0.34
Financial Leverage
Reported financial leverage 5.96 5.16 4.93 7.13 9.40
Adjusted financial leverage 9.07 7.14 6.38 10.28 13.90
Return on Equity (ROE)
Reported ROE 34.63% 0.62% -16.17% 16.04% -17.58%
Adjusted ROE 60.13% -1.65% -22.17% 11.84% -33.01%
Return on Assets (ROA)
Reported ROA 5.81% 0.12% -3.28% 2.25% -1.87%
Adjusted ROA 6.63% -0.23% -3.47% 1.15% -2.37%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. GE Aerospace adjusted net profit margin ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. GE Aerospace adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
GE Aerospace adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. GE Aerospace adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. GE Aerospace adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.

GE Aerospace, Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company 9,481 225 (6,520) 5,704 (4,979)
Sales of equipment and services 64,565 73,602 71,090 73,022 87,487
Profitability Ratio
Net profit margin1 14.68% 0.31% -9.17% 7.81% -5.69%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company 10,103 (406) (6,529) 2,778 (6,083)
Sales of equipment and services 64,565 73,602 71,090 73,022 87,487
Profitability Ratio
Adjusted net profit margin2 15.65% -0.55% -9.18% 3.80% -6.95%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Net earnings (loss) attributable to the Company ÷ Sales of equipment and services
= 100 × 9,481 ÷ 64,565 = 14.68%

2 Adjusted net profit margin = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Sales of equipment and services
= 100 × 10,103 ÷ 64,565 = 15.65%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. GE Aerospace adjusted net profit margin ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Sales of equipment and services 64,565 73,602 71,090 73,022 87,487
Total assets 163,045 187,788 198,874 253,452 266,048
Activity Ratio
Total asset turnover1 0.40 0.39 0.36 0.29 0.33
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Sales of equipment and services 64,565 73,602 71,090 73,022 87,487
Adjusted total assets 152,470 176,083 188,019 241,371 256,159
Activity Ratio
Adjusted total asset turnover2 0.42 0.42 0.38 0.30 0.34

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Sales of equipment and services ÷ Total assets
= 64,565 ÷ 163,045 = 0.40

2 Adjusted total asset turnover = Sales of equipment and services ÷ Adjusted total assets
= 64,565 ÷ 152,470 = 0.42

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. GE Aerospace adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 163,045 187,788 198,874 253,452 266,048
Total GE shareholders’ equity 27,378 36,366 40,310 35,552 28,316
Solvency Ratio
Financial leverage1 5.96 5.16 4.93 7.13 9.40
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 152,470 176,083 188,019 241,371 256,159
Adjusted total GE shareholders’ equity 16,803 24,661 29,455 23,471 18,427
Solvency Ratio
Adjusted financial leverage2 9.07 7.14 6.38 10.28 13.90

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Total GE shareholders’ equity
= 163,045 ÷ 27,378 = 5.96

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total GE shareholders’ equity
= 152,470 ÷ 16,803 = 9.07

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
GE Aerospace adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company 9,481 225 (6,520) 5,704 (4,979)
Total GE shareholders’ equity 27,378 36,366 40,310 35,552 28,316
Profitability Ratio
ROE1 34.63% 0.62% -16.17% 16.04% -17.58%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company 10,103 (406) (6,529) 2,778 (6,083)
Adjusted total GE shareholders’ equity 16,803 24,661 29,455 23,471 18,427
Profitability Ratio
Adjusted ROE2 60.13% -1.65% -22.17% 11.84% -33.01%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net earnings (loss) attributable to the Company ÷ Total GE shareholders’ equity
= 100 × 9,481 ÷ 27,378 = 34.63%

2 Adjusted ROE = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Adjusted total GE shareholders’ equity
= 100 × 10,103 ÷ 16,803 = 60.13%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. GE Aerospace adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net earnings (loss) attributable to the Company 9,481 225 (6,520) 5,704 (4,979)
Total assets 163,045 187,788 198,874 253,452 266,048
Profitability Ratio
ROA1 5.81% 0.12% -3.28% 2.25% -1.87%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings (loss) attributable to the Company 10,103 (406) (6,529) 2,778 (6,083)
Adjusted total assets 152,470 176,083 188,019 241,371 256,159
Profitability Ratio
Adjusted ROA2 6.63% -0.23% -3.47% 1.15% -2.37%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net earnings (loss) attributable to the Company ÷ Total assets
= 100 × 9,481 ÷ 163,045 = 5.81%

2 Adjusted ROA = 100 × Adjusted net earnings (loss) attributable to the Company ÷ Adjusted total assets
= 100 × 10,103 ÷ 152,470 = 6.63%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. GE Aerospace adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.