Positioning GE for long-term
growth

Jeff Immelt, Chairman and CEO
Keith Sherin, Vice Chairman and CFO
GE Shareowners Meet...
Presentation


    Keith Sherin (CFO):   Operating GE in a
                          challenging environment



    Jeff I...
Operating in a challenging
      environment



                       20090196-1/3
                          4/22/2009
Global economic recession
                                   U.S. housing                 U.S. unemployment        Global ...
Financial system in crisis
                                                       Peak
Cumulative bank losses to date     ...
Capital markets not functioning
                                                                Gov. equity   Bank holding...
GE Capital impact                         What we don’t do
                                 +   Originate risky debt (CLO,...
Dividend
GE had communicated flat dividend         S&P 500 dividend reductions
 in 2008 … what changed in 2009?        sig...
GE earnings performance
                                   2008 actuals                                     2009
         ...
Global markets 43% over last year
               World equity index             April 2008 – April 2009 returns

1,800
   ...
GE stock



                                                                     (50)% Ind. peers
                        ...
Safe and secure in summary
($ in billions)
                   GE cash                              GE borrowings
         ...
Final thoughts
  GE is a big company … impacted when the system
   collapsed

  GE Capital is a good business … must be ...
Positioning GE for
long-term growth


                     20090196-1/14
                         4/22/2009
A new era

        Cycle                       Reset
        Housing         Financial services restructuring
    Unemploy...
How we plan to win

   1   Build strong businesses

   2   Invest in innovation, services and globalization

   3   Positi...
1   Strong businesses
                GE has leadership franchises

         Segment /                        15-year grow...
1   Strong businesses
     Must create a smaller + more focused GE Capital
       Reduce assets ($B)

                    ...
1   Strong businesses
             Portfolio has been rebuilt for growth

       Businesses we sold            Businesses ...
2   Invest in growth

               Lead in technology and content

    +
                  2000-09          Leadership ...
2   Invest in growth: Smart grid
                                   GE story
                     Marriage of IT with elec...
2   Invest in growth: sodium battery
                                   GE story

                        Increasing dema...
2   Invest in growth: hulu
                                    GE story

                      #2 online video site in th...
2   Invest in growth: molecular imaging
                                     GE story
       Brain imaging
       L       ...
2     Invest in growth: cleaner coal
                                                           GE story

                ...
2    Invest in growth: services
     $120B



                 ~$40B


                              28%


               ...
2    Invest in growth: global
($ in billions)                                      Iraq turbine order

       Industrial g...
3    Position in essential themes
             Stimulus                                   GE impact
                     T...
3     Position in essential themes
($ in billions)
                              ecomaginationsm
                  Revenue...
4   Drive competitiveness
    2008 industrial organic
       revenue growth                                        2008 ma...
4   Drive competitiveness
                       2009 actions
       Cost out                              Cash
         $...
5   Commit to people

        Employees                            Retirees
 $1B training investment            You are ...
Through cycles, GE performs
($ in billions)
    1970-79               1980-89             1990-99              2000-09
   ...
Winning in the reset world
  1 Build financial services around GE core

  2 Invest more in R&D … products at all price poi...
There will be a future
           +
    GE will lead

                     20090196-1/35
                         4/22/2009
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GE- 2009 Annual Meeting of Shareowners

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GE- 2009 Annual Meeting of Shareowners

  1. 1. Positioning GE for long-term growth Jeff Immelt, Chairman and CEO Keith Sherin, Vice Chairman and CFO GE Shareowners Meeting April 22, 2009
  2. 2. Presentation Keith Sherin (CFO): Operating GE in a challenging environment Jeff Immelt (CEO): Positioning GE for long- term growth 20090196-1/2 4/22/2009
  3. 3. Operating in a challenging environment 20090196-1/3 4/22/2009
  4. 4. Global economic recession U.S. housing U.S. unemployment Global GDP 210 1st time since ~30% decline Great Depression Average home prices ($) 200 in house 2% 8.5% global GDP prices from negative 190 peak 180 5.1% 1Q’09E 160 1Q’08 150 March ’08 March ‘09 2007 2008 2009 (2)% S&P/Case-Schiller Price Index Recession now affecting all pockets of global economy 20090196-1/4 4/22/2009
  5. 5. Financial system in crisis Peak Cumulative bank losses to date Founded valuation 1850 $46B Bankruptcy ~$1.5T 1879 $130B Sold for $15B 1889 $40B Sold for $2B 1920 $262B $4B market cap 1923 $20B Sold for $2B ~$500B 1938 $86B $1B market cap 1969 $26B Sold for $4B U.S. Global 1970 $51B $0.5B market cap Fundamental reset of financial services landscape 20090196-1/5 4/22/2009
  6. 6. Capital markets not functioning Gov. equity Bank holding co. Avg. debt issuance per month–a) $3B Converted ~$30B+ $10B Converted $10B Converted $25B Existing ~$2B $45B Existing $25B Existing Pre-crisis Today $45B Existing (a- excludes government guaranteed debt issuance  GE is paying the government to participate in loan programs  GE has not had to convert to a bank holding company  GE has received NO government equity 20090196-1/6 4/22/2009
  7. 7. GE Capital impact What we don’t do + Originate risky debt (CLO, CDO, SIV) Earnings + Sell credit default insurance + Trade securities ~$12B + Originate high-yield debt ~$8B What we do + Senior and secured leader + Diversified portfolio + Operate assets ‘07 ‘08 + Work out problems + Underwrite to hold + Conservative funding GE Capital earnings will be under pressure Expect GE Capital to be profitable in 2009 20090196-1/7 4/22/2009
  8. 8. Dividend GE had communicated flat dividend S&P 500 dividend reductions in 2008 … what changed in 2009? significantly increased in 2008 -  Unemployment spiked to 7.6% in 50 January already in ‘09  Capital markets deteriorated in Feb. 2009 62  Loss expectations at GE Capital  … government stress tests for banks  Moody’s and S&P ratings review 11 9 12 2005 2006 2007 2008  Sustained $0.31/share through 2Q’09 … $0.10 per share starting 3Q’09  Environment continued to deteriorate and GE was not immune 20090196-1/8 4/22/2009
  9. 9. GE earnings performance 2008 actuals 2009 +10% Industrial • 1Q ’09 … $0.26 EPS vs. $0.21 consensus  Infrastructure earnings +11%  Capital Finance earns $1.1B (1)% S&P GE–a) • Operating with intensity  Aggressive cost out (193)% (29)% Capital  $171B infrastructure backlog  Solid cash performance • Increase disclosure + transparency S&P GE–b) (a- GE Industrial excluding C&I (b- Capital Finance  Performance > peers in ’08 … but below expectations 20090196-1/9 4/22/2009
  10. 10. Global markets 43% over last year World equity index April 2008 – April 2009 returns 1,800 (52)% 1,600 1,400 (38)% (36)% 1,200 (39)% 1,000 (51)% 800 (48)% 600 2004 2005 2007 2009 ~$30 trillion in wealth destroyed 20090196-1/10 4/22/2009
  11. 11. GE stock (50)% Ind. peers (64)% GE (71)% Fin. peers April ’08 Aug ’08 Dec ’08 April ’09  Concerns on GE Capital weighing on stock … but significantly off March lows – Stock +15% since March 19 meeting on financial services – Continuing to proactively communicate 2009/2010 scenarios  Stock performance in 2008 and 2009 disappointing to all of us 20090196-1/11 4/22/2009
  12. 12. Safe and secure in summary ($ in billions) GE cash GE borrowings $45B less debt including $30B $31B more less commercial cash since paper September $549 $504 $47 $16 Commercial paper $88 $58 September Today September Today 2008 2008  Equity issuance provided $15B additional cash in hand  Dividend cut will provide ~$9B in cash annually  Retained strong, stable debt rating 20090196-1/12 4/22/2009
  13. 13. Final thoughts  GE is a big company … impacted when the system collapsed  GE Capital is a good business … must be smaller as the financial markets reset  Made difficult decisions to protect the company over the long term  Performance builds trust Focused on keeping GE safe and secure 20090196-1/13 4/22/2009
  14. 14. Positioning GE for long-term growth 20090196-1/14 4/22/2009
  15. 15. A new era Cycle Reset Housing Financial services restructuring Unemployment Role of government Credit Wealth reduction/transfer Capital investment Reputation + trust Happens once Happens once each decade each generation 20090196-1/15 4/22/2009
  16. 16. How we plan to win 1 Build strong businesses 2 Invest in innovation, services and globalization 3 Position in essential themes 4 Drive competitiveness through scale 5 Commit to people: strong leaders + loyal team 20090196-1/16 4/22/2009
  17. 17. 1 Strong businesses GE has leadership franchises Segment / 15-year growth Strength (’93-’08) Energy Infrastructure ~15% (Power Gen, Wind, O&G) Technology Infrastructure 10+ (Aviation, Trans., Healthcare) NBCU 15+ (Cable, Film) Capital Finance 10+ (Verticals, Mid-Market Finance) 20090196-1/17 4/22/2009
  18. 18. 1 Strong businesses Must create a smaller + more focused GE Capital Reduce assets ($B) + Connection with GE Exit product lines + High margin + Competitive advantage + Reliable lender Past Future GE Capital investor value 2000 Today Future $100B+ Low + 20090196-1/18 4/22/2009
  19. 19. 1 Strong businesses Portfolio has been rebuilt for growth Businesses we sold Businesses we acquired – Reinsurance + Renewable energy – Financial Assurance + Oil & Gas/Water – Plastics/Silicones + Healthcare IT/Life sciences – Industrial supply + Avionics – TV stations + Cable media Underperformed Made billions post-GE for GE 20090196-1/19 4/22/2009
  20. 20. 2 Invest in growth Lead in technology and content + 2000-09  Leadership in sciences $50B in technology  Continuous innovation 20,000 patents  Positioned in important industries $40B in content Energy/Water Media Healthcare Oil & Gas Global deployment Transportation Consumer Investment GE has scale advantage 20090196-1/20 4/22/2009
  21. 21. 2 Invest in growth: Smart grid GE story Marriage of IT with electrical infrastructure to support 21st century energy needs … drives efficiency and renewables use Only GE …  Technology to integrate systems  Domain knowledge from generation through end use  Innovating for the future at our Global Research Centers Could be a $5B+ new business 20090196-1/21 4/22/2009
  22. 22. 2 Invest in growth: sodium battery GE story  Increasing demand across GE industries + new markets  Unique technology…patented  $150 million in investments  Novel chemistry + materials + intelligent controls  Major investment planned Could be $1B+ new business Energy storage 20090196-1/22 4/22/2009
  23. 23. 2 Invest in growth: hulu GE story  #2 online video site in the U.S.  Nearly 200 advertisers  More than 140 content providers  “50 Most Innovative Companies of 2009,” Fast Company  “The Best New Way to Watch TV,” BusinessWeek $100M revenue within first 24 months 20090196-1/23 4/22/2009
  24. 24. 2 Invest in growth: molecular imaging GE story Brain imaging L R  GE leading in neuro imaging agents  Compounds being developed for early diagnosis for Alzheimer’s & Parkinson's  Therapy being developed with pharma companies Marker development  Lowers cost + improves patient + outcomes Imaging tools Commercialized by 2015 Could be $500M+ new product 20090196-1/24 4/22/2009
  25. 25. 2 Invest in growth: cleaner coal GE story  Coal with a cleaner footprint  Capable of carbon capture  GE + Duke Energy building the largest commercial IGCC plant  Gives coal a future in a carbon constrained world  GE a leader … expect more business globally Duke Energy Could be $5B+ Edwardsport site construction, January 2009 new business 20090196-1/25 4/22/2009
  26. 26. 2 Invest in growth: services $120B ~$40B 28% GE-Southwest story Backlog ’09 revenue Margins  Largest operator of our CFM56 engine…1,120 in Southwest fleet Business growth even  Big engine services customers … in a recession ~ $5B+ under contract through 2018  GE services help Southwest to be competitive 20090196-1/26 4/22/2009
  27. 27. 2 Invest in growth: global ($ in billions) Iraq turbine order Industrial global revenues ~15% $61 CAGR $43 $26 2009 priorities '03 '06 '09F  Win major infrastructure orders % int’l. 41% 48% 53%  Establish strategic partnerships  Build capability in service, technology and manufacturing 20090196-1/27 4/22/2009
  28. 28. 3 Position in essential themes Stimulus GE impact Target countries  Drive renewables $2T U.S.  Accelerate green energy Canada infrastructure China  Increase global infrastructure projects Japan  Accelerate targeted healthcare Brazil spending U.K.  Encourage innovation investment France  Aggressive export finance support Germany Announced Middle East  Governments targeting infrastructure, GE well-positioned energy, healthcare, jobs 20090196-1/28 4/22/2009
  29. 29. 3 Position in essential themes ($ in billions) ecomaginationsm Revenues  72+ products $25  Big pipeline  R&D leadership $17  Reputation/brand $6  Saved $500M by reducing carbon footprint  Customer partnerships '04 '08 '10F GE the leader in clean energy 20090196-1/29 4/22/2009
  30. 30. 4 Drive competitiveness 2008 industrial organic revenue growth 2008 margins 8 15.6 (in %) 2X (in %) 14.6 +100 bps. 4 GE GE Peers Peers 2008 return 2008 revenue on capital per employee 14.8 +270 bps. (in $K) 566 2X (in %) 12.1 294 GE GE Peers Peers Peers include Whirlpool, Disney, News Corp., United Technologies, Honeywell, Siemens, Philips, ABB, Rolls Royce, Alstom 20090196-1/30 4/22/2009
  31. 31. 4 Drive competitiveness 2009 actions Cost out Cash $5B+ $2B+ Working capital reduced, freeing up cash Base cost  Inventory Indirect cost  Receivables Material cost  Payables Can weather the cycle 20090196-1/31 4/22/2009
  32. 32. 5 Commit to people Employees Retirees  $1B training investment  You are GE  Deep expertise  Pension safe  Retention high  Good healthcare benefits  Fiercely loyal team Market-tested leaders in challenging times 20090196-1/32 4/22/2009
  33. 33. Through cycles, GE performs ($ in billions) 1970-79 1980-89 1990-99 2000-09 ~165 ~90 65 29 12 8 10 4 Dividend Earnings Dividend Earnings Dividend Earnings Dividend Earnings From 2000-09, GE generated more earnings and paid more dividends than the past 30 years combined 20090196-1/33 4/22/2009
  34. 34. Winning in the reset world 1 Build financial services around GE core 2 Invest more in R&D … products at all price points 3 Lead in essential themes … ecomagination  Next target is healthcare 4 Excellence in manufacturing … for the U.S. and the world 5 Retain a team that is competitive and loyal and has a long term view 20090196-1/34 4/22/2009
  35. 35. There will be a future + GE will lead 20090196-1/35 4/22/2009

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