GE May Break Apart, Here & #039;s Why

Breaking up is hard to do, as General Electric may soon find out. The company said it will take a $9.5 billion pretax charge related to GE Capital's North American Life & Health, an old portfolio of long-term care insurance. The after-tax impact of $6.2 billion will be $7.5 billion when adjusted to the new 21% U.S. tax rate, CEO John Flannery told investors on a conference call Tuesday, according to SeekingAlpha transcripts. GE Capital will make a $3 billion contribution to its insurance subsidiary in the first quarter of 2018 and roughly $2 billion a year from 2019 to 2024, for a total of roughly $15 billion, the company disclosed in a press release Tuesday. GE entered into insurance through a series of acquisitions in the 1980s and 1990s. GE North America Life & Health is comprised of the legacy reinsurance businesses that remained at GE following the 2004 and 2006 Genworth and ERC exits. After taking over as CEO last year, Flannery laid out a plan in late October for the conglomerate to shed $20 billion worth of assets over the next one to two years. "Needless to say, at a time when we are moving forward as a company, I'm deeply disappointed at the magnitude of the charge in this legacy portfolio," he said during Tuesday's investor call. "It's especially frustrating to have this type of development when we've been making progress on many of our key objectives. These include cost-out in corporate and our power business, improving our cash flow and continued strength...
Source: MDDI - Category: Medical Devices Authors: Tags: Medical Device Business Source Type: news