GE 2010 Annual Report Download - page 107

GE 2010 ANNUAL REPORT 105
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SHARES OF GE PREFERRED STOCK
On October 16, 2008, we issued 30,000 shares of 10% cumulative
perpetual preferred stock (par value $1.00 per share) having an
aggregate liquidation value of $3.0 billion, and warrants to pur-
chase 134,831,460 shares of common stock (par value $0.06 per
share) for aggregate proceeds of $3.0 billion in cash. The proceeds
were allocated to the preferred shares ($2.5 billion) and the war-
rants ($0.5 billion) on a relative fair value basis and recorded in
other capital. The preferred stock is redeemable at our option
three years after issuance at a price of 110% of liquidation value
plus accrued and unpaid dividends. The warrants are exercisable
for five years at an exercise price of $22.25 per share of common
stock and are settled through physical share issuance. Upon
redemption of the preferred shares, the difference between
the redemption amount and the carrying amount of the preferred
stock will be recorded as a reduction of retained earnings and
considered a deemed dividend for purposes of computing earn-
ings per share.
SHARES OF GE COMMON STOCK
On September 25, 2008, we suspended our three-year, $15 billion
share repurchase program, which was initiated in December 2007.
On July 23, 2010, we extended the program, which would have
otherwise expired on December 31, 2010, through 2013 and we
resumed purchases under the program in the third quarter of
2010. Under this program, on a book basis, we repurchased
111.2 million shares for a total of $1,814 million during 2010.
On October 7, 2008, GE completed an offering of 547.8 million
shares of common stock at a price of $22.25 per share.
GE has 13.2 billion authorized shares of common stock
($0.06 par value).
Common shares issued and outstanding are summarized in
the following table.
December 31 (In thousands) 2010 2009 2008
Issued 11,693,841 11,693,833 11,693,829
In treasury (1,078,465) (1,030,758) (1,156,932)
Outstanding 10,615,376 10,663,075 10,536,897
NONCONTROLLING INTERESTS
Noncontrolling interests in equity of consolidated affiliates
includes common shares in consolidated affiliates and preferred
stock issued by affiliates of GECC. Preferred shares that we are
required to redeem at a specified or determinable date are classi-
fied as liabilities. The balance is summarized as follows:
December 31 (In millions) 2010 2009
Noncontrolling interests in consolidated affiliates
NBC Universal $3,040 $4,937
Others
(a)
1,945 2,631
Preferred stock
(b)
GECC affiliates 277 277
Total $5,262 $7,845
(a) Included noncontrolling interests in partnerships and common shares of
consolidated affiliates.
(b) The preferred stock pays cumulative dividends at an average rate of 6.81%.
Changes to noncontrolling interests are as follows.
Years ended December 31
(In millions) 2010 2009
Beginning balance $ 7,845 $8,947
Net earnings 535 200
Repurchase of NBCU shares
(a) (1,878) —
Dispositions (b) (979) (707)
Dividends (317) (548)
AOCI and other
(c) 56 (47)
Ending balance $ 5,262 $7,845
(a) On September 26, 2010, we acquired 7.7% of NBCU’s outstanding shares from
Vivendi for $2,000 million, of which $1,878 million was recorded as a reduction in
noncontrolling interests and $151 million was recorded as a reduction in additional
paid-in capital reflecting the amount paid in excess of the carrying value of the
noncontrolling interest.
(b) Includes the effects of deconsolidating both Regency $(979) million during the
second quarter of 2010 and PTL $(331) million during the first quarter of 2009.
(c) Changes to the individual components of AOCI attributable to noncontrolling
interests were insignificant.
Note 16.
Other Stock-Related Information
We grant stock options, restricted stock units (RSUs) and
performance share units (PSUs) to employees under the 2007
Long-Term Incentive Plan. This plan replaced the 1990 Long-Term
Incentive Plan. In addition, we grant options and RSUs in limited
circumstances to consultants, advisors and independent contrac-
tors (primarily non-employee talent at NBC Universal) under a
plan approved by our Board of Directors in 1997 (the consultants’
plan). There are outstanding grants under one shareowner-
approved option plan for non-employee directors. Share
requirements for all plans may be met from either unissued
or treasury shares. Stock options expire 10 years from the date
they are granted and vest over service periods that range from
one to five years. RSUs give the recipients the right to receive
shares of our stock upon the vesting of their related restrictions.
Restrictions on RSUs vest in various increments and at various
dates, beginning after one year from date of grant through
grantee retirement. Although the plan permits us to issue RSUs
settleable in cash, we have only issued RSUs settleable in shares
of our stock. PSUs give recipients the right to receive shares of
our stock upon the achievement of certain performance targets.
All grants of GE options under all plans must be approved by
the Management Development and Compensation Committee,
which consists entirely of independent directors.