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Ge r e v enue world po pulation annaal report


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Ge r e v enue world po pulation annaal report

  1. 1. GE R E vEnuE WoRld Po PulationGROWTH S TaRTS Here.GE 2010 Annual Report18922010155182172151 1502007 2006 2008 2009 2010CONSOLIDATED REVENUES(In $ billions)10.918.022.419.312.62007 2006 2008 2009 2010EARNINGS FROM CONTINUING OPERATIONSATTRIBUTABLE TO GE(In $ billions)16.816.013.92007 2006
  2. 2. GECSDividend*IndustrialCFOA2008 2009 201023.323.819.116.414.7CASH FLOW FROM OPERATING ACTIVITIES(In $ billions)*No GECS dividend paid in 2009 and 2010.15%RETURN TO GROWTHDisciplined execution drovea 15% rise in GE earningsfrom continuing operations20%INVESTING IN INNOVATIONGE boosted company-funded R&D spendingby 20% in 2010$
  3. 3. 79BFINANCIAL FLEXIBILITYGE had $79 billion in consolidatedcash and equivalents atyear-end 2010, with $19 billionin cash at the parent$175BRECORD INDUSTRIALBACKLOGStrong equipment and servicesorders growth resulted ina record $175 billion backlog6,30 0U.S. MANUFACTURING JOBSIn the past two years, GE hasannounced creation of more than6,300 new U.S. manufacturingjobs, many in regions hardest hitby the economic recession24%TOTAL SHAREHOLDER RETURNGE total shareholder return (TSR)appreciated 24% in 2010, ninepercentage points better than
  4. 4. the S&P 500 TSR40%DELIVERING FORSHAREOWNERSTwo dividend increases in2010 provided a total40% improvement versus thebeginning of the yearOn the coverGE’s product and services offerings arealigned with human needs and growthopportunities around the world. As globalpopulation has grown over the past118 years, GE’s revenue has grown atan even faster rate.$17BU.S. EXPORTSInternational sales of American-made products totaled$17 billion in 2010, more thandouble the level of companyU.S. exports in 2001 CONTENTS 1 Letter to Shareowners9 Business Overview
  5. 5. 28 Board of Directors29 Financial Section136 Corporate InformationNote: Financial results from continuing operations unless otherwise noted.(20)% 16% 11% GE (39)%(40)% (7)% 14% S&P 500 15%2006 2007 2008 200915%47%2010EARNINGS GROWTH RATES(In $ billions) financial and strategic highlightsge 2010 annual report 1growth starts hereIn the 2008 letter to shareowners, as we grappled withthe worst economy since the Great Depression, wetalked about a global economic reset. In 2009, we talkedabout GE’s renewal as we established our priorities forthe company in an improving global economy.In 2010, growth resumed and our earnings expanded by15%. GE Capital’s earnings rebounded sharply. We raisedthe dividend twice, for a combined 40% increase. Ourstock price responded well, up 21% for the year. Our aimin 2011 and beyond is to continue the progress.
  6. 6. pictured left to right(*seate d )Jeffrey r . immeltChairman of the Board &Chief Executive OfficerMichael a . Neal*Vice Chairman, GE andChairman & Chief ExecutiveOfficer, GE Capital Services, Inc.Keith s . sherinVice Chairman, GE andChief Financial OfficerJohn g. rice*Vice Chairman, GE andPresident & Chief ExecutiveOfficer, Global OperationsJohn Krenicki, Jr.Vice Chairman, GE andPresident & Chief ExecutiveOfficer, Energyletter to shareowNers2 GE 2010 ANNUAL REPORTTwo years ago, in the depths of the global economic collapse,I promised that GE would emerge from the recession a bettercompany. We have. Our financial performance is accelerating.
  7. 7. We have extended our competitive advantage, while investingin growth. We fortified our leadership and culture. The world we face in 2011 is getting better. We see signsof economic strength every day. It doesn’t always “feel great,”because we have entered a new economic era. Growth aroundthe world is happening at multiple speeds. Developing marketslike Brazil and India are experiencing fast growth, while muchof the developed world is dealing with sluggish growth and fiscalconstraints. Globally, governments are more active, as theygrapple with problems ranging from high unemployment tohealthcare inflation to crumbling infrastructure. Volatility has become a way of life. Commodity costs areincreasing as the economy recovers. Geopolitical risk is alsoon the rise. Disruption in countries like Egypt and Greece cannow shake the global markets. Classic economic cycles will be shorter and moresegmented. Long-term growth will be interrupted by short-termvolatility. In this environment, companies must invest to grow,while staying fast and productive. We made good decisions during the crisis that arebenefiting investors. We invested in GE Capital to weather thecrisis and retain a strong business model. This required toughcalls, like raising equity in 2008 and cutting the GE dividend in2009. But today, we have a competitively advantaged financialservices business that is rewarding investors with strong
  8. 8. earnings growth.LETTER TO SHAREOWNERSGE’s value is more than the sumof its parts. GE is an innovative,advanced technology infrastructureand financial services companywith the scale, resources and expertiseto solve tough global problemsfor customers and society. We area competitive force for change. We invested more in R&D each year, despite the tougheconomy. Our R&D spending will have grown 54% from 2008to 2011. We invested for the long term, while cutting cost inless-essential areas. We face the future with a stronger productpipeline than at any time in our history. We simplified the GE portfolio. We sold our Securitybusiness, completed the joint venture of NBCU with Comcast andsold some non-core assets in GE Capital. These moves generatedsubstantial cash for GE. They give us significant financial flexibilityin the global economic recovery. Because of these actions, GE is positioned for success.A COMPETITIVE ENTERPRISEIn the 21st century companies must serve two roles. They mustdeliver positive returns for investors, and they must be a positiveforce for change. GE does both.
  9. 9. GE’s value is more than the sum of its parts. GE is aninnovative, advanced technology infrastructure and financialservices company with the scale, resources and expertise to solvetough global problems for customers and society. We are acompetitive force for change.GE has financial strength and resilience. We ended the yearwith $79 billion of cash. We have kept the company safe throughvolatile times. Our business model allows us to invest in growthand generate free cash flow at the same time.We innovate on a large scale. More than half the planes inthe w orld have GE engines. Jet engines are a technical andmanufacturing masterpiece. We have invested more than$10 billion in R&D over the past decade to serve our military andcommercial aviation customers. Our new engines aresubstantially more fuel-efficient than the ones they replace.We track thousands of engine performance parameters whilethey are in service and use that information to improveour customers’ performance. Our ability to execute large-scaleinnovation is based on GE’s technical depth and scale.This capability is unmatched and creates customer satisfaction,employee pride and financial performance. There are veryfew companies on earth who do what we do.We make globalization “work” for employees, customers,governments and investors. Nearly 60% of our revenue willcome from sales outside the U.S. in 2011 and this will grow over
  10. 10. time. GE is a reliable partner and global investor, with a culture ofcompliance. We are a leading American exporter. Last year, wecreated major ventures in China and Russia that will accelerateGE 2010 ANNUAL REPORT 3our growth in Energy, Aviation, Healthcare and Transportationand supply important infrastructure in those countries. GE’sunique breadth and compliant culture are massive advantagesin globalization.We know how to compete, manufacture and execute. Wehave a strong culture of productivity and risk management.We constantly share ideas across GE on processes to improveperformance. We have reduced our manufacturing cycletime and boosted productivity. We have been able to invest inthe United States even as we have globalized. Since 2009,we have announced 6,300 new American manufacturing jobs.At the same time, we are building capability around the world.We are prepared for a future fueled by human innovation,not cheap labor.We are a catalyst for change—change that benefits ourcustomers and society. We have had a long-term focus onclean energy through our ecomagination initiative. Last year,when it was clear that U.S. energy policy would remain uncertain,we continued to invest. One focus was to lead in Smart Griddevelopment. To that end, we announced plans to order25,000 electric vehicles (EVs)—the largest such purchase in
  11. 11. history. By so doing, we took a large step toward buildingEV infrastructure based on GE technology. In addition, we hosteda “Smart Grid Challenge,” where we solicited ideas for clean-energy solutions. More than 4,000 ideaswere submitted, andwe funded 20 startup companies and entrepreneurs whowill extend our leadership in energy efficiency.LETTER TO SHAREOWNERS Some people remain cynical about business. And we livein an era where anger often trumps optimism. Despite this,GE has remained a competitive growth company; a positive forcefor change.FINANCIAL PERFORMANCE IS ACCELERATINGOur earnings growth should exceed the growth in the S&P 500.We are committed to a dividend yield that is attractive relative toour peers and other investments. We have more cash and lowerleverage than our historical average. We will improve our earningsquality, which is associated with above-market valuation.Earnings growth resumed in 2010 and should continue in 2011.As we predicted last year, GE Capital’s earnings are reboundingrapidly. It earned $3.3 billion, more than twice than in 2009.And that positive course should continue in 2011. We remaincommitted to a smaller, more focused GE Capital. We look forsignificant earnings growth over the next few years. The landscape for financial services has changed.GE Capital—like others in financial services—will be more highlyregulated. We have been preparing for this outcome for the
  12. 12. past two years and are ready for the new regulatory environment.For example, our Tier 1 capital, an important measureof financial strength, is close to 9%, already above the “wellcapitalized level” set currently by regulators at 6%.ENTERPRISE VALUEGE is an innovative, high-techinfrastructure and financial servicescompany that solves tough globalchallenges for customers & society, whiledelivering world-class performance.FINANCIAL STRENGTHLARGE-SCALE INNOVATIONSAFE GLOBAL INVESTORCOMPETITIVE CULTURECATALYST FOR CHANGEInfrastructureSpecialtyFinanceLEADERSHIP PORTFOLIO4 GE 2010 ANNUAL REPORTLETTER TO SHAREOWNERS Our Infrastructure earnings were about $14 billion in 2010.While flat with 2009, these earnings will grow in 2011 and beyondas the global economy strengthens. We outperformed ourcompetitors during the financial crisis, with earnings about flat
  13. 13. from 2008 to 2010, while theirs declined 15%. Our stabilitywas a function of a strong service model that performed forcustomers and investors. Our Infrastructure businesses are well positioned for long-term growth because we have leadershipfranchises and competein attractive markets. Global investment in infrastructure isexpected to be $4 trillion by 2015. GE has leadership franchisesin Energy, Oil & Gas, Water, Healthcare, Aviation, Transportationand Consumer products. Over time, we look to sustain organic growth in excessof the global economy, with high margins and returns. OurInfrastructure businesses are capital-efficient, and we generatea substantial amount of cash in excess of investment needs.In our key operating metrics, we are in the top quartile of ourindustrial peers. At nearly $100 billion in revenue, we areone of the biggest Infrastructure companies in the world, andwe are certainly the most profitable.Balanced and disciplined capital allocation is a keyresponsibility for the Board and your leadership team. Weended the year with $19 billion of cash at the GE parent. Maintainingan attractive dividend is the top priority. We believe that ahigh-yielding dividend appeals to the majority of our investors andis particularly attractive in a low interest rate environment. We have announced five acquisitions in the last sixmonths, totaling about $8 billion, that will accelerate our growthin Infrastructure. We will be disciplined in our acquisitions. They
  14. 14. will increase our competitiveness in industries we know well.We target investments in the $500 million- to $3 billion-range withreturns that exceed our cost of capital. In this way, we rewardGE investors as we scale up these investments. We will continue to buy back our shares, including thepreferred stock we issued during the financial crisis in 2008.We will be opportunistic about buying back our own stock basedon returns but plan to reduce our float over time.We have reduced GE’s risk profile, as we navigated throughthe crisis. We hold substantial cash on our balance sheet, havecut our commercial paper by 60% and have reduced ourleverage from 8:1 to 5:1. We believe the most difficult losses infinancial services are behind us. We recorded charges ofmore than $3 billion to address risk related to the environmentalcleanup of the Hudson River and the consumer “Grey Zone”claims for financial services in Japan. We have changed ouremployee healthcare and pension plans to be more competitiveover the long term. Looking forward, we have dramaticallyreduced GE’s vulnerability to “tail risk” events.GE’s earnings quality will continue to improve. Our goal isto maintain Infrastructure earnings between 60% and 70%of GE’s earnings. Our tax rate increased in 2010 and will growsubstantially in 2011. These elements should create amore valuable GE. There are a few things we are working on in 2011 that
  15. 15. should help build momentum for the future. Our financial strengthin GE Capital should put us in a position to pay a dividend tothe parent in 2012. We worry about inflation and have increasedresources on material productivity and pricing to offset thatthreat. We are in a particularly heavy period of R&D investmentin Aviation that will keep its earnings flat this year. However,Aviation has a record high backlog and its earnings growthshould return by 2012. The GE portfolio can perform for investors through thecycles: financial earnings surge back in the beginning of aneconomic cycle; service offers steady growth through the cycle;and infrastructure equipment grows later in the cycle. Nomatter what your investment thesis may be, the next few yearslook good for GE!We ended the year with $19 billionof cash at the GE parent. Maintainingan attractive dividend is the toppriority. We believe that a high-yieldingdividend appeals to the majority ofour investors and is particularly attractivein a low interest rate environment.GE 2010 ANNUAL REPORT 5LETTER TO SHAREOWNERSWE LEAD IN BIG GROWTH THEMESWe have positioned the company to capitalize on some of the
  16. 16. biggest external themes of the day, like emerging-market growth,affordable healthcare and clean energy. Internally, we treat“growth as a process” by focusing on innovation, customer needs,services and best-practice integration. We are executing sixgrowth imperatives:1Launch great new products. GE’s technical leadership isa function of increased investment, great people and a model forinnovation. Our innovation is focused on solving big customerproblems, partnerships that extend our capability and designingproducts across all price points. We are committed to sustainingtechnical investment ahead of the competition. Our Healthcare business is indicative of the work going onacross the company. We will launch 100 Healthcare innovationsthis year. These include important leadership products inmolecular imaging and low-dose CT. We will open new segmentswith our hand-held ultrasound and extremity MR products.We have focused on affordable innovation, launching high-marginproducts at lower price points, with dramatic growth potentialin the emerging markets. We have completed a Home Healthventure with Intel, featuring new proprietary products. And weare entering new markets like pathology, with automationand diagnostic tools. Long-term growth in Healthcare, like otherInfrastructure markets, is driven by a deep pipeline of
  17. 17. high-margin innovations.GE GROWTH IMPERATIVESLAUNCHGreatNew Products1GROWServices andSoftware2LEADin GrowthMarkets3EXPANDfromthe Core4CREATEValuein SpecialtyFinance5SOLVEProblems for
  18. 18. Customersand Society62Grow services and software. Services represent 70% of ourInfrastructure earnings. We have a $130 billion services backlogat high margins. In 2011, our services revenue should growbetween 5% and 10%. Through our contractual service agreements,we reduce our customers’ cost of ownership by providing newtechnology and productivity to their installed base. We have an opportunity to expand our service business.About 90% of our service revenue is focused on the GE installedbase. Meanwhile, our customers demand broader solutions. Weplan to expand our presence in software into new areasin workflow, analytics and systems integration. We believe thereis a $100 billion opportunity in software and services ininfrastructure markets we know well. Today, GE has $4 billion of revenue in infrastructure softwarein segments like healthcare information technology, Smart Grid,rail movement planners, engine monitoring and factory productivity.By investing in these platforms we can grow rapidly and movecloser to our customers.3
  19. 19. Lead in growth markets. GE has $30 billion of Industrialrevenue in key global growth markets, where revenue hasexpanded by more than 10% annually over the last decade. As commodity prices increase, the needs of our customersin what we segment as “resource-rich” regions grow as well.We continue to make long-term investments to drive growth acrossthe Middle East, Africa, Canada, Australia, Russia and LatinAmerica. In what we segment as “rising Asia,” markets like Chinaand India, there are over one billion people joining the middleclass. We plan to have an increasing number of products localizedin China and India in the next few years. This will give us theright technology to satisfy our customers’ needs.6 GE 2010 ANNUAL REPORTLETTER TO SHAREOWNERS We use the breadth of our portfolio to build strongrelationships in growth markets. We call it a “Company-Country”approach. A great example of this approach is Brazil.Last November, we announced the creation of our fifth GlobalResearch Center, located in Rio de Janeiro. On that day, wehighlighted manufacturing investments in Brazil across Energy,Oil & Gas, Healthcare, Transportation and Aviation. This broadcapability gives GE the ability to better serve our customersin Brazil, while allowing us to grow exports. In addition, we arecommitted to training our employees, customers and suppliers.This makes GE a leader in the economic development of
  20. 20. the country.4Expand from the core. In 2010, GE generated $20 billion ofrevenue from businesses in which we were not present in 2000.Investing and winning in Infrastructure adjacencies is a corecompetency for GE. We plan to generate another $20 billion ofrevenue in new markets over the next decade. To do this, we have launched more than 20 Infrastructureadjacencies and are in the process of growing them. Each can beat least $1 billion in revenue, while some will reach $10 billion ormore. By expanding our core, we accelerate growth while buildingstronger, more diverse business models. This year, for example, we will scale up organic investmentsin thin film solar energy technology. Through the efforts of ourGlobal Research Center, our panels are generating 12+% efficiency,a record for this technology. By utilizing our huge Energyfootprint, we expect to achieve a meaningful market share in thenext few years. This business could reach billions in revenue. Over time, we create large global leaders like Oil & Gas.Here we have built a $10 billion business in about a decade,through organic investment and focused acquisitions. Oil & Gashas leveraged technical capability and global distribution fromour Energy, Aviation and Healthcare businesses. Our bigOil & Gas customers know that they can count on GE to execute
  21. 21. complex projects.5Create value in specialty finance. In 2011, a key priority isto better define the connection between GE and GE Capital. Thestrategic value of GE Capital is obvious: robust earnings growth;strong risk management; and cash dividends to the GE parent. There are also key advantages that are shared by ourindustrial and financial capabilities. We have superior knowledgeof assets; this allows us to win in aircraft leasing. We havedeep and established relationships with mid-market customers,who desire better operations and best-practice sharing withGE’s Industrial businesses. We have strong operating advantagesversus banks in direct origination and asset management.This builds competitive advantage in businesses like Retail Finance.In other words, we can offer more than access to money. GE Capital is our primary window to serve small and medium-size businesses. We partner with themand invest in their growthand success. We are steadfastly committed to GE Capital. Duringthe crisis, our exposure to financial services was an investorconcern. In the future, leadership in specialty finance will providenew ways to grow and improve our competitiveness. As a smaller,more-focused competitor, GE Capital will return excess capital tothe GE parent over time.6
  22. 22. Solve problems for customers and society. We havebuilt the GE brand on solving tough problems like clean energyand affordable healthcare, while building deep customerrelationships. We know that we can solve big societal problemsand earn money at the same time. And our customers buyfrom GE because we help to make them more profitable. Through our healthymagination initiative, we are addressingthe cost , quality and access of healthcare. We are working withthe Ministry of Health (MOH) in Saudi Arabia to improve thatcountry’s system. For example, there are joint GE/MOH teamscompleting “lean” projects to improve operating-room capacityand lower patient waiting time. We are pioneering in “mobileclinics” that can take healthcare to remote areas. We are bringingtechnical innovation and process skills to improve healthcare inSaudi Arabia and around the world. In executing these six strategic growth imperatives,GE is leading in the capabilities that will create long-termshareholder value.We have launched more than20 Infrastructure adjacencies andare in the process of growing them.Each can be at least $1 billionin revenue, while some will reach$10 billion or more. By expandingour core, we accelerate growth while
  23. 23. building stronger, more diversebusiness models.GE 2010 ANNUAL REPORT 7LETTER TO SHAREOWNERSWE ARE DEVELOPING COMPETITIVE LEADERSThere are certain fundamentals of leadership at GE that neverchange: a commitment to integrity, a commitment toperformance and a commitment to innovation. Beyond this, asthe world changes, leadership must evolve as well. The GE leadership model has core pillars: domaincompetency, leadership development, team execution and globalrepositioning. We are constantly looking outside the companyfor new ideas on leadership. And we are investing more than everto train our team.We are developing careers that are deep first, broad second.GE has always been a training ground for general managers.But very little is “general” in the world today. It takes deep domainknowledge to drive results, so people will spend more timein a business or a job. In addition, jobs like chief engineer, senioraccount manager, chief compliance officer and global riskleader are respected and rewarded.We have modernized our leadership traits. We have built off thefoundation we have had in place for several years: ExternalFocus, Clear Thinking, Imagination & Courage, Inclusiveness andExpertise. Upon this foundation, we are training for attributes
  24. 24. that will thrive in the reset world.Leaders must execute in the face of change. Ourmarkets are less predictable, but our teams must still be accountable.We still expect our leaders to outperform the competition. Weare doing more scenario planning, and our leaders must be smartand disciplined risk takers. Leaders must be humble listeners. We will makebold investments and learn from our mistakes. We will stay opento inputs from all sources. We are here to work on teamsand serve our customers. Leaders must be systems thinkers. This involves theability to share ideas across silos inside and outside thecompany. Internally, we have always excelled at best-practicesharing. Outside the company, systems thinking requires“horizontal” innovation, connecting technology, public policy,social trends and people across multiple GE businesses. And we want our leaders to be scale-based entrepreneurs.They must have a gift for making size a facilitator of growth,not a source of bureaucracy. Our unique strength is that of a fast,big company.We have repositioned where decisions get made. Last yearI asked John Rice, our most senior Vice Chairman, to move toHong Kong and lead our global operations. Behind John,we will move more capability to the emerging markets. Great global companies will reposition decisions and
  25. 25. strengthen their culture. The biggest leaders—living in thegrowth regions—will make decisions more quickly with thebenefit of experience and market knowledge.We perform as a “connected meritocracy.” In other words, thebest performance wins. We want to expand this definitionof meritocracy to include a view that every job counts. Seniorleaders must have a better connection with front-line employees. We live in a time where unemployment is high in everycorner of the world. As a result, jobs are the real currency ofreputation. Without jobs, confidence—and growth—lags. GE mustbe cost-competitive. But at the same time, we must know howto create and value front-line jobs.We have a strong and unified culture. Let’s face it: all of the GEteam has persevered through the toughest times. It made usbetter. I have always said that I would not be CEO of GE if I hadn’tspent three years at GE Appliances in the late 1980s. This is notbecause it was fun, but because it was so hard. Perseverance isa source of confidence.LEADERSHIP MODELDomainCompetencyTeamExecutionLeadershipDevelopment
  26. 26. GlobalRepositioningGEVoted #1 in Developing Leadersin 2010 Hay Group/ BusinessWeek Poll8 ge 2010 annual reportletter to shareowners Our ability to develop leader s continues to be recognizedby the outside world. For 2010, GE was voted “number one”in developing leader s in a pr estigious poll conducted by the HayGr oup and BusinessWeek. One last element of leader ship is the responsibility to servebr oader inter ests. To that end, I was asked by Pr esident Obamaand hav e agreed to chair the Pr esident’s Council on Jobs andCompetitiveness. Rest assured, I will continue to work as hard asI ev er hav e for the success at GE. At the same time, I will workwith other CEOs and public leader s to impr ove Americancompetitiveness and innov ation. I r un a competitive enterpriseand remain an unapologetic globalist . GE is a “priv ate enterprise,”with only 4% of our revenue sold to the U.S. gov ernment.B ut t he w orld s till l ooks t o A merica f or l eadership, a nd I am
  27. 27. committed to do my best to help .LOOKING BACK AND LOOKING FORWARDI have begun my tenth year as CEO of GE. Looking back, no onecould have predicted the volatile events of the last decade:t wo recessions; t he 9 /11 t ragedy; H urricane K atrina; t he worldat war; the rise of the BRICS; the financial crisis; the Gulf oil spill,just to name a few. I took over a great company, but one where we had a lot ofwork to do to position GE to win in the 21st Century. Despite ourhigh valuation, we were in businesses where we could not sustaina competitive advantage, like plastics, media and insurance. Wemade a capital-allocation decision to reduce our exposure tomedia and invest in infrastructure. And we had to rebuild our Energybusiness, where most of our earnings in the late 1990s camefrom a “U.S. Power Bubble” that created significant excess capacity. Our team rolled up their sleeves. Ultimately, we exitedabout half of our portfolio. We invested in Infrastructure businesseslike oil & gas, life sciences, renewable energy, avionics, molecularmedicine and water. We restored our manufacturing muscle.And we focused and strengthened GE Capital. As a result of these
  28. 28. actions, we have our most competitive portfolio in decades. We m ade b ig b ets in t echnology, g lobalization a ndc ustomer s ervice. We d oubled o ur R &D s pend o ver t he p ast10 y ears a nd it n ow e quals 6 % of I ndustrial r evenue. Wer epositioned l eadership a nd c apability to w in in g lobal g rowthm arkets. We h ave g rown g lobal r evenue f rom 3 6% of G E’sr evenue to 5 5% in t he l ast d ecade. We h ave i nvested in s alesf orce e xcellence, m arketing, a nd c ustomer s upport.S ervices hav e gr own fr om 30% of GE’s industrial earnings to 70%in the last decade. And GE is the world’s fifth most valuable brand. We pr omoted a culture that demanded financialaccountability and long-term thinking. Leader s understand theirresponsibility to i nvest i n t he future o f t heir b usiness. B ut wes till c ompete h ard. O ur p roductivity, m easured by revenue p eremployee, has expanded by 50% since 2000. Our Industrialmarginsand returns exceed other great companies like Honeywell,Siemens and United Technologies. Despite all these changes, our cumulative earningsand cash flow over the last decade would rank in the top ten ofcompanies in the world. Being a CEO can be pretty humbling. I have made a few
  29. 29. mistakes and learned a lot over the last decade. I am moreresilient. To do this job well, you have to “burn” with a competitiveflame that demands daily improvement. My desire has neverbeen greater. Making these changes in volatile times has demandedpatience from our long-term investors. However, today, we earn moremoney than we did when the stock traded at an all-time high. The t oughest ye ars o f my l ife were 2 008 to 2 009.T hey were difficult for the company, investors, and the economyas well. B ut o ur t eam w orked h ard f or i nvestors a nd t hec ompany. We promised you we would come out of the crisis astronger company, and we have. There are many reasons to invest in GE. I have alwaysdescribed myself as a tough-minded optimist. I have never beenmore optimistic than I am today. GE’s best days are ahead!Jeffrey R. ImmeltChairman of the Boar dand Chief Executiv e OfficerFebruary 25, 2011GROW THSTARTS HERE.GE GROWTH IMPERATIVES
  30. 30. GE COMPETITIVE DIFFERENCEge 2010 annual report 9CAPITAL ALLOCATIONENTERPRISERISK MANAGEMENTCOMPETITIVENESSLEADERSHIPDEVELOPMENTCRE ATEValue inSpecialty FinanceEXPANDfrom the CoreSOLVEProblems forCustomers and SocietyL AUNCHGreat New ProductsGROWServices and SoftwareLEADin Growth Markets10 GE 2010 ANNUAL REPORTLAUNCHGreat
  31. 31. New ProductsIT STARTS WITHTECHNICAL DEPTHTechnical leadership requires sustained investment, great talentand a focus on risk-taking and innovation—traditional competitiveadvantages for GE. With nearly 40,000 talented engineers andscientists, four Global Research Centers and a fifth on the way,and about 6% of Infrastructure revenues spent on investmentin innovation, GE has a broader and deeper pipeline of newproducts than ever before. And with U.S. patent filings up 14%and issuances up 21% last year, it’s clear GE is investing—and innovating—for future growth.GE 2010 ANNUAL REPORT 11GE is the world’s leading producer of jet and turboprop engines forcommercial, military, business and general aviation customers. Ourtechnological expertise, supported by robust R&D investments, ensuresquality, efficient propulsion for aviation customers around the world.Innovation in HealthcareThe Discovery CT750 HDwith Veo is the world’s firsthigh-definition CT scanner.It delivers profound imagingdetail across the entirebody—revolutionizing howphysicians view CT scans
  32. 32. while dramatically reducingthe patient’s radiation dose.Leadership in EnergyGE’s next-generationFrame 7FA heavy-duty gasturbine delivers betteroutput, thermal efficiency,operability and life-cyclecosts for power pr oducers,while maintainingoperational flexibility—and helping suppliersmanage demand.New Products in LightingGE launched the industry’sfirst ENERGY STAR®qualified A-line LED bulb.This tech nical wonderreplaces a regular 40-wattincandescent but lastsmore than 20 years andcuts energy use 77%.Excellence in Rail
  33. 33. Once commercially available,the Evolution HybridLocomotive will captureenergy through dynamicbraking and reduce fuelconsumption and emissionsversus current engines.The energy recaptured fromone locomotive over oneyear is enough to power 8,900average U.S. households.12 GE 2010 ANNUAL REPORTGROWServices andSoftwareIT STARTS WITH SERVICE DELIVERYAND CUSTOMER PRODUCTIVITYServing more than 20 industries—including energy, water, oil & gas,transportation, food & beverage and manufacturing—GE serviceand software capabilities improve real-time decision making,enable more efficient operations, drive innovation and ensure qualityand regulatory compliance for customers around the world.They also help our customers make more money. GE’s unique domainexpertise, expansive installed base and world-class operationalacumen enable our customers to turn data into actionable
  34. 34. intelligence for mission-critical needs. On any given day, GE servicesare helping advance healthcare, expand commerce, powertransportation, innovate industry and improve quality of life.Services represent about 70% of GE’s Infrastructure earnings and areslated to grow significantly in the coming years. Helping customersimprove operations, cut costs and maximize profitability is an integralpart of the GE business model.GE 2010 ANNUAL REPORT 13Moving Freight FasterGE’s RailEdge®MovementPlanner is a breakthroughsoftware system that helpsrailroads run smarter andmove more freight faster,potentially saving millionsin capital and expensesand improving productivity.Helping HomeownersNucleusTMenergy managerwith GE BrillionTM
  35. 35. technology,when used with a smartmeter in conjunction witha utility, helps homeownersunderstand and managetheir residential energy use,a great step toward savingenergy and money.Conquering DiseaseGE Healthcare created Omnyxas an independent jointventure with the Universityof Pittsburgh Medical Center,with a focus on digitizingpathology, much like radiologywas digitized over the last20 years. Omnyx IntegratedDigital Pathology solutionsleverage GE’s innovation totransform the fieldof pathology worldwide.Smoother FlyingGE’s TrueCourseTMFlight
  36. 36. Management System cankeep planes on scheduleby using crowded airspacemore efficiently. It keepsaircraft to within feet oftheir optimized flight pathsand within seconds ofscheduled arrival times—saving passengers timeand airlines fuel.14 GE 2010 ANNUAL REPORTLEADin GrowthMarketsIT STARTS WITHBEING POSITIONED TO LEADGE’s breadth of operations, globally recognized brand and“recentralized” organizational structure are helping it succeed inmarkets around the world. In resource-rich regions like Russia,the Middle East and Latin America, and in emerging Asian countrieslike China and India—where growth is double that of the developedworld—GE has set a strategic course. We’ve localized research,technology, talent and operations to “go where the growth is.”GE 2010 ANNUAL REPORT 15Global Research Network
  37. 37. Localizing R&D capabilitiesis an important elementof GE’s strategy to strengthenour presence in key growthmarkets. Our newest GlobalResearch Center is set toopen in the next 12–18 monthsin Rio de Janeiro—part ofour $500 million commitmentin Brazil.Reverse InnovationGE continues to deepen itscommitment to developingcountries through productstailored to their specificmarket needs and thenenhancing these productsfor distribution globally.At facilities like this one inWuxi, GE doubled the numberof low-cost ultrasoundmachines manufactured inChina from 2006 to 2010.Resource-Rich Markets
  38. 38. GE technology is helping meetenergy demand by producingoil and gas from rich butunconventional reservoirsin Angola, Australia, Brazil,China, Iraq and beyond. Ourgoal is to find innovativeways to unlock strandedresources to secure energyfor t omorrow’s world.Regional PartnershipsPartnering with key globalplayers to access newmarkets, technology andideas is at the heart ofGE’s joint venture with AVICSystems to supply avionicsfor China’s new C919150-passenger jet, amongothers. S uch alliances placeGE squarely in an area ofexplosive growth in China.GE is committed to building and strengthening relationships with ouremerging-market customers by repositioning our intellect andresources to such fast-growth markets as India and China, where
  39. 39. a rising but largely underserved middle class is growing.16 GE 2010 ANNUAL REPORTEXPANDfromthe CoreIT STARTS WITHGROWTH FROM THE COREThe plan is simple: diversify in markets GE knows well—make multiple,scalable bets with disciplined organic and inorganic investments,and utilize our global sales, distribution, and research capabilitiesto grow brand-new billion-dollar businesses. Over the past decade,GE has grown its renewable energy, oil & gas, water treatmentand life sciences businesses from having virtually no presence togenerating $20 billion a year. We’re aiming to grow another20 projects in this way and keep GE’s return on total capital in thetop quartile of our peers.GE 2010 ANNUAL REPORT 17Scaling PlatformsWhether generatingelectricity from landfill gasesor methane produced frommanure, GE’s Jenbacherengine can provide anefficient and cost-effectiveway to generate energy from
  40. 40. waste. Since 2003, GE hasgrown Jenbacher revenue byfour times and profitabilityby 40 times.Better CareWe’re expanding intothe next realm of diagnostictechnology by acquiringClarient, whose laboratorytests help pathologistsidentify complex cancers.The technology detailsmolecular informationabout specific cancers,so that doctors can tailorprecise treatments.World-Record RaysWith solar energy poisedas the next big bet inrenewables, GE is partneringwith PrimeStar Solar, commercially develop acadmium telluride thinfilm product. The team justachieved a world record
  41. 41. for efficiency and plans toscale up the technology forcommercial production.Healthcare at HomeTogether with Intel, we’redeveloping new technology-based, at-home healthcaresolutions for the two billionpeople who will soon be overage 60. The goal is to helpolder people, and those withchronic conditions, liveindependently and with dignity.By leveraging our core strengths and moving into adjacent markets,GE has turned fledgling businesses into industry leaders fuelingfuture growth. Our Oil & Gas organization, for example, has grown froma $2 billion business to about a $10 billion business since 2000.18 GE 2010 ANNUAL REPORTCREATEValuein SpecialtyFinanceIT STARTS WITHSPECIALTY FINANCINGLinking GE’s industrial and financial businesses enables us toemploy our extensive industry expertise to address customer
  42. 42. needs. We can be an essential partner for our customers—manyof whom are small and medium-sized businesses—offeringthem not only the best products and services, but also access tocapital, a deep understanding of their sectors, and operatinginsight that other financial services firms can’t match. For ourshareowners, GE Capital is a valuable franchise providing goodearnings and cash flow to fuel investment in companywide growth.GE 2010 ANNUAL REPORT 19Industries We KnowWith a $49 billion portfolio—and 1,800 owned andmanaged aircraft in 75countries—GE CapitalAviation Services providescomprehensive fleet andfinancing solutions.Our knowledge and assetshelp customers acquireaircraft, engines and parts,and find ways to pay withless risk and better returns.Operating AdvantageGE Capital providesprivate-label and dual creditcard programs along
  43. 43. with financial services tomore than 40 millionaccount holders. This yearour programs will delivermore than $70 billionin retail sales throughoutthe United States.Value Across EnterpriseTo expand from one hospitalto eight, Ochsner HealthSystem turned to GE Capitalto balance equipmentneeds with managementof working capital. By leasingdiagnostic equipment atcompetitive rates, Ochsnergot the latest imagingtechnology quickly whilefreeing up working capital.Mid-Market ExpertiseMid-sized customers chooseGE Capital over traditionalbanks because we do morethan lend money—we helpbusinesses grow. For Bobcat,
  44. 44. inventory financing andonline accounting help dealersbetter manage customercredit. And GE’s industryknowledge helps Bobcatdealers get customers intoequipment they needto grow their businesses.GE Capital combines smart financing with operational know-how to helpbusinesses succeed in ways no bank can. With our financial support,process excellence and keen understanding of challenges mid-sizedfirms face, GE Capital helped Duckhorn Wine Company post its largestrevenue and volume ever, despite 2010’s economic downturn.20 GE 2010 ANNUAL REPORTSOLVEProblems forCustomersand SocietyIT STARTS WITHBIG SOLUTIONSCleaner energy. More affordable healthcare. Access to smartercapital. We take on some of the world’s most pressing needs withsolutions that deliver human progress, as well as sustainablegrowth for GE and our shareowners. This is the powerful premisebehind our ecomagination and healthymagination strategies.
  45. 45. They bring together imagination, investment and technology toenable GE and our customers to generate revenue, whilereducing emissions and providing healthcare to more people.GE 2010 ANNUAL REPORT 21EV InfrastructureGE has created intelligentplug-in electric vehiclecharging devices for U.S. andglobal markets to helpconsumers charge their carsduring low-demand, lower-cost time periods. As a result,smart chargers will makeplug-in cars more attractiveto utilities and consumers,helping to lower our carbonfootprint and oil dependence.Expanding AccessRoughly the size of a smartphone, the Vscan housespowerful ultrasoundtechnology, so doctors canquickly and accuratelymake diagnoses beyond basicvital signs. Vscans couldone day redefine the
  46. 46. physical exam, becomingas indispensable as thetraditional stethoscope.Unconventional FuelAs the world seeks energysolutions in the face ofenvironmental, regulatoryand financial pressures,unconventional gas sourcesgain importance. GE providesinnovative chemical andequipment technology thattreats and supplies millionsof gallons of water neededfor shale and tight gasproduction while protectingthe environment.Lowering Healthcare CostHealthcare IT tools aretransforming medicineby giving doctors new waysto improve efficiency,standardize care and reduceerrors. GE Healthcare’sCentricity Advance is a web-based Electronic Medical
  47. 47. Record and patient portalthat helps small andindependent practices focusmore on patients and lesson paperwork.Ideas that drive human progress vary dramatically. GE’s WattStation™makes charging electric cars fast and cost effective. And in rural Indiawhere infant care technology is scarce, GE Healthcare helps distribute$200 infant warmers, which can heat for hours with a simple pouch of wax.22 ge 2010 annual reportEXECUTING IN THE FACE OF CHANGEmedicaldiagnostics team(from left)Jeff thomasBusiness Development Directordave HaugenFinance Director,Business Development,GE HealthcareRonnie andrewsCEO, Clarientger BrophyVP, Strategic Planning & LicensingBill lacey
  48. 48. CFOPascale WitzPresident & CEOmike PelliniPresident & COORobert dannOncology Marketing Leadermaking strategic acquisitionsA team of GE Healthcare employees coordinated our acquisitionof an important new partner—Clarient, a California-based,400-person leading player in the fast-growing moleculardiagnostics sector. Combining the skills of the two companieswill allow us to help pathologists and oncologists make moreconfident clinical decisions, bringing improvements in the qualityof patient care and lowering costs. The partnership will bringGE into the next realm of diagnostic technology, acceleratingour presence in cancer diagnostics, where demand is expectedto grow from $15 billion today to $47 billion by 2015.I t S ta rt S WI t HPutting imagination to WorkWorking across our global enterprise,ge people did remarkable thingsin 2010. our passion, professionalismand perseverance working withcustomers, partners and each other
  49. 49. returned g e to positive growthand an exceptional future outlook.With over $1 billion a year invested in employeetraining, development facilities around the globeand 90% of leaders promoted from within, geis proud of its legacy of leadership development.From competitive manufacturing, groundbreakingtechnical innovations and world-class qualityassurance, to finding valuable portfolio additions,opening markets and bringing new productsonline, the extended g e team is working for you.Here are some of our 2010 annual report 23CONNECTING All l E vEls OF l EAdErsHI plynnmanuFactuRingoPeRations(from left)larry mayMaterial HandlerWayne murrayHand-Jig WelderFrancisco moralesMilling Machine Operator
  50. 50. Bob schererAdvanced AircraftEngine MechanicHelen HughesProduction MachinistPatty BartlettSheet Metal Workers teve KellyHand-Jig WelderPatricia merandoMaterial HandlerBill RobertsonCarpenterm aria deaconArea Executive &General Managerg reg PhelanPlumberd iane scoppettuoloAdvanced AircraftEngine Mechanicsteve mulveyMaterial Handlera l Bennett
  51. 51. Machinist—Special Programsm ike shonyoAdvanced AircraftEngine MechanicBob drennanElectriciangro Wing Factory jobsGE has been a long-standing supporter of American manufacturing.The team at our Lynn, Massachusetts, facility representssome of the more than 45,000 GE employees who work in U.S.manufacturing. The Lynn plant produces helicopter enginesfor the Sikorsky Black Hawk troop transport and jet enginesfor the Boeing F/A-18E/F Super Hornet fighter, among otheraviation products that GE sells around the world as part of our$17 billion-per-year in U.S. exports.24 ge 2010 annual reportengineering break -tHroug H soLutionsTechnologists at GE GlobalResearch Centers helpsolve tough challenges. DaveVernooy is developingsolar thin films for renewablepower generation. KristenBrosnan is researching solid
  52. 52. oxide fuel cells for cleanerenergy solutions. Wole Akinyemiis working to optimizeemissions and performance ofdiesel engines for locomotives.And Prameela Susarla isdeveloping cell manufacturingtools for medical applications.oVerseeingProDuct saFetyAs Chief Engineer forGE Aviation, Jan Schilling helpsensure the safety of someof GE’s most relied-uponproducts. A 41-year companyveteran, Jan overseesproduct integrity, safety andairworthiness, andcertification efforts at theworld’s leading manufacturerof jet engines for civil andmilitary aircraft.managing an Dmitigating riskGE Capital’s business
  53. 53. model is defined by strongrisk management and aconservative approachto financial services. As ChiefRisk Officer at GE Capital,Ryan Zanin ensures thecompany and our customersstay “safe and secure.”With 25 years in the financialservices industry specializingin risk management, Ryanhelps ensure GE Capital isin full compliance withregulations while anticipating,monitoring and mitigatingnew risks as they emerge.ensuring tHe Hig HeststanDarDs oF quaLityQuality in healthcare beginswith patient safety. At GEHealthcare, we continue tobuild and strengthen a cultureof compliance, where everyemployee is trained to bevigilant and dedicated to
  54. 54. the very highest standards ofquality and safety. GE’sDan Eagar, Quality AssuranceDirector for GE Healthcare,Surgery, is a leader in thiseffort and one of our manyoutstanding examples of GE’scommitment to supportingdoctors and their patients.lEAdING F r OM THE dOMAINge gloBal ReseaR cHniskayuna, new york(from left)dave Vernooy, Ph.d.PhysicistKristen Brosnan, Ph. d.Senior Scientistomowoleola akinyemi, Ph.d.Mechanical EngineerPrameela s usarla, Ph. d.Senior Scientist(from left)Jan schillingChief Engineer,GE Aviation
  55. 55. Ryan ZaninChief Risk Officer,GE Capitaldan eagarQuality AssuranceDirector, GE Healthcare,Surgeryge 2010 annual report 25exPanDing access to HeaLtHcareWith the healthcare needs in China growing rapidly, GE isworking to provide the types of products that millions in Chinaneed. In our Beijing facilities, GE employees—includingJinlei Chen, Wayne Zhang and Zhanfeng Xing—are developingand marketing customized products to expand access, lowercost and improve the quality of healthcare in China, especiallyin rural areas. Similar efforts were underscored in 2010 whenthe GE Healthcare factory in Wuxi doubled its manufacturingof low-cost ultrasound machines from just four years earlier.unLocking energy suPPL ies in tHe mi DDL e eastGE’s Advanced Technology and Research Center in Qatarprovides the innovation necessary to access strandednatural resources that are needed to fuel our future. In Qatar,our team is working on ways to create fuel flexibility byimproving combustion systems so they can handle whatevertype of fuel is available. Also, our Oil & Gas team, pictured
  56. 56. here, has partnered with Qatar Petroleum and ExxonMobil todevelop the world’s largest liquefied natural gas facility.andrea grandiGlobal Servicesantonio saurinoProject ManagerBill alashqarGlobal AccountExecutive for GEPaolo BattagliEngineering Manageralexander FerrariEngineeringManagerayman KhattabMiddle East RegionHub LeadercHinaHealtHcaRe team(from left)Jinlei chenModality General Manager,GE Healthcare ChinaWayne ZhangProduct Marketing Manager,
  57. 57. GE Healthcare ChinaZhanfeng XingArchitect/Engineer,GE Healthcare ChinaqataR oil & gas team(from left)rEp OsITIONING l EAdErsHI p26 ge 2010 annual reportcaRe innoVations team(from left)louis BurnsCEO of Care Innovations(formerly known asGE Intel JV)lauren salataVice President,Chief Financial Officer andChief Compliance Officerdouglas BuschSenior Vice President,Chief Operating Officerchip BlankenshipVice President andGeneral Manager, CommercialEngines, GE Aviation
  58. 58. Bill FitzgeraldVice President and GeneralManager, GEnx Program,GE Aviationelizabeth lundVice President and GeneralManager, 747 Program,Boeing Commercial AirplanesPat shanahanVice President and GeneralManager, Airplane Programs,Boeing Commercial AirplanesPartnering Wit H customersAn outstanding example of the power of partnerships is thecollaboration between GE Aviation and Boeing, two companieswith a long tradition of aerospace leadership. For the new747-8 wide-body, Boeing and GE have combined their technicalexpertise and commitment to safety and quality in a singlepursuit—to bring the new 747-8 Intercontinental jetliner to market.Leading the team’s efforts are Boeing’s Elizabeth Lund andPat Shanahan and GE’s Chip Blankenship and Bill Fitzgerald.Partnering to D e VeLoP neW marketsWhen GE and Intel announced a joint healthcare venture—thatwe believe will bring about new models of care for millionsof people—a strong and passionate team willing to lead the way
  59. 59. was needed. The new company, called Care Innovations, willdevelop technologies for the aging population that will reducehealthcare costs by supporting healthy, independent living athome and in senior-housing communities.“sY sTEM s THINKE rs” drIvING G r OWTHge aViation-Bo eing team(from left)ge 2010 annual report 27GE takes a long-term view of governance. We consider it to bethe foundation upon which we build our leadership culture andreputation for integrity, which in turn provides investors withcompetitive returns over the long term. We believe that the Boardis best positioned to oversee management, and that investorsshould have fair means to propose directors and elect them bya majority vote, and use other appropriate tools to hold usaccountable for company performance. Fourteen of our 16 directors are independent ofmanagement . We seek director candidates with diversebackgrounds, demonstrated leadership qualities, sound judgment,and domain expertise in fields relevant to GE’s businesses.For example, last year we added Loews CEO Jim Tisch, an expertin global finance and leader of one of the largest diversifiedcorporations in the United States. The Chairman and theindependent Presiding Director provide Board leadership. Thismodel recognizes that in most instances the Chairman speaks
  60. 60. for the Company and the Board, but still provides the benefits ofindependent Board oversight . As GE’s Presiding Director,I work with the Chairman and all of GE’s independent directorsto shape and monitor strategy and set the Board’s agenda.I coordinate with the chairpersons of the Board’s committees toensure that committees and the Board are functioning toour collective expectations, and that directors are receiving theinformation they require. Successful governance depends first on the skill, dedicationand integrity of the Company’s leaders and the strength of internalmanagement processes. The Board reviews the performanceof senior executives each year and has succession plans in placefor key positions to ensure continuity of leadership. GE hassound practices for developing management talent , developingand executing strategy, managing risk and complying withthe spirit and letter of laws and regulations. Compensation is a critical element in leadershipdevelopment. We reward long-term performance. Our approachis not formula-driven but instead depends on our view ofan executive’s performance and potential over many years. Wedesign compensation to encourage balanced risk-taking witha mix of cash and equity and long- and short-term incentives. Strategy and risk oversight also are core Boardfunctions. Each July we conduct a comprehensive review of GEstrategy and monitor and discuss progress throughout the year.
  61. 61. While the full Board is responsible for risk oversight, we allocateresponsibility for various risk matters to Board committeeswith specific competence in those areas. To enhance riskoversight, in February 2011 we formed a Risk Committee of theGE Board that oversees GE’s and GE Capital’s risk assessmentand risk management structures and processes. We make certain our view stays current. At least oncea year we conduct a comprehensive review of governancetrends and evaluate GE’s framework for possible changes. Weask management to solicit the views of the Company’s largeshareholders on governance matters at least twice a year andreport to us on their findings. Directors also meet withshareholders to discuss governance matters. I met recentlywith large investors to discuss executive compensation andBoard structure issues. We have made changes to ourgovernance policies and practices based on investor input. While we strive to continually improve our governancepractices, we avoid making changes simply because they aredeemed fashionable or expedient . We base our decisions on ourcollective experience and judgment about what will work bestfor GE. We consider the interaction of all parts of our corporategovernance structures to ensure that they work together ina way that produces long-term value for you, our shareowners,without undesirable cost or bureaucracy. Finally, the independentdirectors of GE are committed to continue working on your
  62. 62. behalf and being transparent in explaining why we believe ourapproach works for our company. I would encourage you tolearn more on GE’s Web site at,Ralph s . larsenPresiding DirectorFebruary 25, 2011to our shareowners:As Presiding Director of the GE Board of Directors, I write to share our perspectiveon corporate governance and compensation. I will talk first about our overarching philosophy,and then I will focus on a few areas—independent Board oversight; talent development,performance and compensation; strategy and risk oversight—and I will finish with how weas a Board ensure that GE governance retains an important business-building advantage.28 ge 2010 annual reportBoard members focus on the areas that are important to share -owners—strategy, risk management,leadership developmentand regulatory matters. In 2010, they received briefings on avariety of issues including U.S. and global tax policy, environmentalrisk management and reserves, pension and healthcare plans,financial structure, liquidity, regulation and ratings, servicecontract performance, credit costs and real estate exposure,controllership and emerging rules, and managing brandvalue and reputation. At the end of the year, the Board and eachof its committees conducted a thorough self-evaluation.the ge Board held nine meetings in 2010. Each outside Board member is
  63. 63. expected to visit at least two GE businesses without the involvement of corporatemanagement in order to develop his or her own feel for the Company.D irectors (left to right)robert j. swieringa1Professor of Accounting and formerAnne and Elmer Lindseth Dean,Johnson Graduate School of Management,Cornell University, Ithaca, New York.Director since 2002.ralph s . Larsen2, 3, 6Former Chairman of the Board andChief Executive Officer, Johnson & Johnson,pharmaceutical, medical and consumerproducts, New Brunswick, New Jersey.Director since 2002.sam nunn2, 4Co-Chairman and Chief Executive Officer,Nuclear Threat Initiative, Washington, D.C.Director since 1997.W. geoffrey beattie1, 5President, The Woodbridge Company
  64. 64. Limited, Toronto, Canada.Director since 2009.rochelle b. Lazarus3, 4Chairman of the Board and formerChief Executive Officer, Ogilvy & MatherWorldwide, global marketingcommunications company, New York,New York. Director since 2000.andrea jung2, 3Chairman of the Board andChief Executive Officer, Avon Products, Inc.,beauty products, New York, New York.Director since 1998.j ames i. cash, jr.1, 2, 4Emeritus James E. Robison Professorof Business Administration, HarvardGraduate School of Business, Boston,Massachusetts. Director since 1997.robert W. Lane1, 2Former Chairman of the Board andChief Executive Officer, Deere & Company,
  65. 65. agricultural, construction andforestry equipment, Moline, Illinois.Director since 2005.j ames s . tisch5President and Chief Executive Officer,Loews Corporation, New York, New York.Director since 2010.s usan Hockfield3, 4President of the MassachusettsInstitute of Technology, Cambridge,Massachusetts. Director since 2006.alan g. ( a .g.) Lafley3, 5Former Chairman of the Boardand Chief Executive Officer, Procter &Gamble Company, personal andhousehold products, Cincinnati, Ohio.Director since 2002.ann m. Fudge4Former Chairman of the Board andChief Executive Officer, Young &Rubicam Brands, global marketing
  66. 66. communications network, New York,New York. Director since 1999.Douglas a . Warner iii1, 2, 3Former Chairman of the Board,J.P. Morgan Chase & Co., The ChaseManhattan Bank, and MorganGuaranty Trust Company, investmentbanking, New York, New York.Director since 1992.roger s . Penske4Chairman of the Board, Penske Corporationand Penske Truck Leasing Corporation,Chairman of the Board and Chief ExecutiveOfficer, Penske Automotive Group, Inc.,diversified transportation company, Detroit,Michigan. Director since 1994.j ames j. mulva1, 4Chairman of the Board, President andChief Executive Officer, ConocoPhillips,international integrated energy company,Houston, Texas. Director since 2008.jeffrey r . immelt
  67. 67. 4Chairman of the Board and ChiefExecutive Officer, General Electric Company.Director since 2000.(pictured on page 1)1 audit committee2 m anagement Developmentand compensation committee3 n ominating and corporategovernance committee4 Public responsibilities committee5 risk committee6 Presiding DirectorGE 2010 ANNUAL REPORT 29financial sectionContents30 Management’s Discussion of Financial Responsibility ............................ We begin with a letter fromour Chief Executive and Financial Officersdiscussing our unyielding commitment to rigorous oversight, control-lership, informative disclosure andvisibility to investors.30 Management’s Annual Report on Internal Control Over Financial Reporting ...................................................................................... In this report our ChiefExecutive and Financial Officers providetheir assessment of the effectiveness of our internal control overfinancial reporting.31 Report of Independent Registered Public Accounting Firm .................. Our independent auditors,KPMG LLP, express their opinions on our
  68. 68. financial statements and our internal control over financial reporting.32 Management’s Discussion and Analysis (MD&A) 32 Operations ........................................................................................................... We begin the Operations section of MD&A with an overview of ourearnings, including a perspective on how the global economicenvironment has affected our businesses over the last three years.We then discuss various key operating results for GE industrial (GE)and financial services (GECS). Because of the fundamental differencesin these businesses, reviewing certain information separately forGE and GECS offers a more meaningful analysis. Next we provide adescription of our global risk management process. Our discussionof segment results includes quantitative and qualitative disclosureabout the factors affecting segment revenues and profits, and theeffects of recent acquisitions, dispositions and significant trans-actions. We conclude the Operationssection with an overview ofour operations from a geographic perspective and a discussionof environmental matters. 45 Financial Resources and Liquidity .......................................................... In the Financial Resources andLiquidity section of MD&A, we provid ean overview of the major factors that affected our consolidatedfinancial position and insight into the liquidity and cash flow activitiesof GE and GECS.59 Critical Accounting Estimates .................................................................. Critical Accounting Estimatesare necessary for us to prepareour financial statements. In this section, we discuss what theseestimates are, why they are important, how they are developedand uncertainties to which they are subject.
  69. 69. 64 Other Information .......................................................................................... We conclude MD&Awith a brief discu ssion of new accountingstandards that will become effective for us beginning in 2011.65 Selected Financial Data ............................................................................... Selected Financial Dataprovides five years of financial informationfor GE and GECS. This table includes commonly used metrics thatfacilitate comparison with other companies.66 Audited Financial Statements and Notes66 Statement of Earnings 66 Consolidated Statement of Changes in Shareowners’ Equity 68 Statement of Financial Position 70 Statement of Cash Flows 72 Notes to Consolidated Financial Statements131 Supplemental Information ................................................................................... We provideSupplemental Information to reconcile certain “non-GAAPfinancial measures” referred to in our report to the most closelyassociated GAAP financial measures. We also provide informationabout our stock performance over the last five years.134 Glossary ....................................................................................................................... For yourconvenience, we also provide a Glossary of key terms used inour financial statements. We also present our financial information electronically GE 2010 ANNUAL REPORTManagement’s Discussion of Financial ResponsibilityWe believe that great companies are built on a foundation ofreliable financial information and compliance with the spirit and
  70. 70. letter of the law. For General Electric Company, that foundationincludes rigorous management oversight of, and an unyieldingdedication to, controllership. The financial disclosures in thisreport are one product of our commitment to high-qualityfinancial reporting. In addition, we make every effort to adoptappropriate accounting policies, we devote our full resourcesto ensuring that those policies are applied properly and consis-tently and we do our best to fairlypresent our financial resultsin a manner that is complete and understandable.Members of our corporate leadership team review each ofour businesses routinely on matters that range from overall strat-egy and financial performance tostaffing and compliance. Ourbusiness leaders monitor financial and operating systems,enabling us to identify potential opportunities and concerns atan early stage and positioning us to respond rapidly. Our Boardof Directors oversees management’s business conduct, and ourAudit Committee, which consists entirely of independent directors,oversees our internal control over financial reporting. We continu-ally examine our governancepractices in an effort to enhanceinvestor trust and improve the Board’s overall effectiveness. TheBoard and its committees annually conduct a performance self-evaluation and recommendimprovements. Our Presiding Directorled three meetings of non-management directors this year, help-ing us sharpen our full Board meetingsto better cover significanttopics. Compensation policies for our executives are aligned withthe long-term interests of GE investors.We strive to maintain a dynamic system of internal controls
  71. 71. and procedures—including internal control over financialreporting—designed to ensure reliable financial recordkeeping,transparent financial reporting and disclosure, and protection ofphysical and intellectual property. We recruit, develop and retaina world-class financial team. Our in ternal audit function, includingmembers of our Corporate Audit Staff, conducts thousands offinancial, compliance and process improvement audits each year.Our Audit Committee oversees the scope and evaluates theoverall results of these audits, and members of that Committeeregularly attend GE Capital Services Board of Directors, CorporateAudit Staff and Controllership Council meetings. Our global integ-rity policies—“The Spirit & TheLetter”—require compliance withlaw and policy, and pertain to such vital issues as upholding finan-cial integrity and avoiding conflicts ofinterest. These integritypolicies are available in 31 languages, and are provided to allof our employees, holding each of them accountable for compli-ance. Our strong compliance culturereinforces these efforts byrequiring employees to raise any compliance concerns and byprohibiting retribution for doing so. To facilitate open and candidcommunication, we have designated ombudspersons through-out the Company to act as independentresources for reportingintegrity or compliance concerns. We hold our directors, con-sultants, agents and independentcontractors to the sameintegrity standards.We are keenly aware of the importance of full and openpresentation of our financial position and operating results, andrely for this purpose on our disclosure controls and procedures,
  72. 72. including our Disclosure Committee, which comprises seniorexecutives with detailed knowle dge of our businesses and therelated needs of our investors. We ask this committee to reviewour compliance with accounting and disclosure requirements,to evaluate the fairness of our financial and non-financial dis-closures, and to report their findings to us. We further ensurestrong disclosure by holding more than 300 analyst and investormeetings annually.We welcome the strong oversight of our financial reportingactivities by our independent registered public accountingfirm, KPMG LLP, engaged by and reporting directly to the AuditCommittee. U.S. legislation requires management to report oninternal control over financial reporting and fo r auditors torender an opinion on such controls. Our report follows and theKPMG LLP report for 2010 appears on the following page.Management’s Annual Report on Internal ControlOver Financial ReportingManagement is responsible for establishing and maintainingadequate internal control over financial reporting for theCompany. With our participation, an evaluation of the effective-ness of our internal control overfinancial reporting wasconducted as of December 31, 2010, based on the frameworkand criteria established in Internal Control—Integrated Framework,issued by the Committee of Sponsoring Organizations of theTreadway Commission.Based on this evaluation, ou r management has concluded
  73. 73. that our internal control over financial reporting was effective asof December 31, 2010.Our independent registered public accounting firm has issuedan audit report on our internal control over financial reporting.Their report follows.JEFFREY R. IMMELT KEITH S. SHERINChairman of the Board and Vice Chairman andChief Executive Officer Chief Financial OfficerFebruary 25, 2011GE 2010 ANNUAL REPORT 31Report of Independent RegisteredPublic Accounting FirmTo Shareowners and Board of Directorsof General Electric Company:We have audited the accompanying statement of financialposition of General Electric Company and consolidated affiliates(“GE”) as of December 31, 2010 and 2009, and the related state-ments of earnings, changes inshareowners’ equity and cashflows for each of the years in the three-year period endedDecember 31, 2010. We also have audited GE’s internal controlover financial reporting as of December 31, 2010, based oncriteria established in Internal Control—Integrated Frameworkissued by the Committee of Sponsoring Organizations of theTreadway Commission (“COSO”). GE management is responsiblefor these consolidated financial statements, for maintainingeffective internal control over financial reporting, and for its
  74. 74. assessment of the effectiveness of internal control over financialreporting. Our responsibility is to express an opinion on theseconsolidated financial statements and an opinion on GE’s inter-nal control over financial reporting basedon our audits.We conducted our audits in accordance with the standards ofthe Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audits toobtain reasonable assurance about whether the financial state-ments are free of material misstatementand whether effectiveinternal control over financial reporting was maintained in allmaterial respects. Our audits of the consolidated financial state-ments included examining, on a testbasis, evidence supportingthe amounts and disclosures in the financial statements, assess-ing the accounting principles used andsignificant estimates madeby management, and evaluating the overall financial statementpresentation. Our audit of internal control over financial reportingincluded obtaining an understanding of internal control overfinancial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effec-tiveness of internal control based onthe assessed risk. Our auditsalso included performing such other procedures as we consid-ered necessary in the circumstances. Webelieve that our auditsprovide a reasonable basis for our opinions.A company’s internal control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted account-ing principles. A company’s internalcontrol over financial reporting
  75. 75. includes those policies and procedures that (1) pertain to the main-tenance of records that, inreasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the com-pany; (2) provide reasonable assurancethat transactions arerecorded as necessary to permit preparation of financial statementsin accordance with generally accepted accounting principles, andthat receipts and expenditures of the company are being made onlyin accordance with authorizations of management and directors ofthe company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, ordisposition of the company’s assets that could have a material effecton the financial statements.Because of its inherent limitations, internal control over finan-cial reporting may not prevent or detectmisstatements. Also,projections of any evaluation of effectiveness to future periodsare subject to the risk that controls may become inadequatebecause of changes in conditions, or that the degree of compli-ance with the policies or procedures maydeteriorate.In our opinion, the consolidated financial statements appear-ing on pages 66, 68, 70, 72–130 and theSummary of OperatingSegments table on page 39 present fairly, in all material respects,the financial position of GE as of December 31, 2010 and 2009, andthe results of its operations and its cash flows for each of theyears in the three-year period ended December 31, 2010, in con-formity with U.S. generally acceptedaccounting principles. Also,in our opinion, GE maintained, in all material respects, effectiveinternal control over financial reporting as of December 31, 2010,based on criteria established in Internal Control—Integrated
  76. 76. Framework issued by COSO.As discussed in Note 1 to the consolidated financial statements,GE, in 2010, changed its method of accounting for consolidation ofvariable interest entities; in 2009, changed its method of account-ing for impairment of debt securities,business combinations andnoncontrolling interests; and, in 2008, changed its method ofaccounting for fair value measurements and adopted the fairvalue option for certain financial assets and financial liabilities.Our audits of GE’s consolidated financial statements weremade for the purpose of forming an opinion on the consolidatedfinancial statements taken as a whole. The accompanying consoli-dating information appearing on pages67, 69 and 71 is presentedfor purposes of additional analysis of the consolidated financialstatements rather than to present the financial position, results ofoperations and cash flows of the individual entities. The consoli-dating information has been subjectedto the auditing proceduresapplied in the audits of the consolidated financial statements and,in our opinion, is fairly stated in all material respects in relation tothe consolidated financial statements taken as a whole.KPMG LLPStamford, ConnecticutFebruary 25, 2011management’s discussion and analysis32 GE 2010 ANNUAL REPORTOperationsOur consolidated financial statements combine theindustrial manufacturing, services and media businesses of
  77. 77. General Electric Company (GE) with the financial servicesbusinesses of General Electric Capital Services, Inc. (GECS orfinancial services).In the accompanying analysis of financial information, wesometimes use information derived from consolidated financialinformation but not presented in our financial statements pre-pared in accordance with U.S. generallyaccepted accountingprinciples (GAAP). Certain of these data are considered“non-GAAP financial measures” under the U.S. Securities andExchange Commission (SEC) rules. For such measures, we haveprovided supplemental explanations and reconciliations in theSupplemental Information section.We present Management’s Discussion of Operations infive parts: Overview of Our Earnings from 2008 through 2010,Global Risk Management, Segment Operations, GeographicOperations and Environmental Matters. Unless otherwise indi-cated, we refer to captions such asrevenues and earnings fromcontinuing operations attributable to the company simply as“revenues” and “earnings” throughout this Management’sDiscussion and Analysis. Similarly, discussion of other mattersin our consolidated financial statements relates to continuingoperations unless otherwise indicated.Effective January 1, 2010, we reorganized our segments tobetter align our Consumer & Industrial and Energy businessesfor growth. As a result of this reorganization, we created anew segment called Home & Business Solutions that includes
  78. 78. the Appliances and Lighting businesses from our previousConsumer & Industrial segment and the retained portion of theGE Fanuc Intelligent Platforms business of our previous EnterpriseSolutions business (formerly within our Technology Infrastructuresegment). In addition, the Industrial business of our previousConsumer & Industrial segment and the Sensing & InspectionTechnologies and Digital Energy businesses of our previousEnterprise Solutions business are now part of the Energy busi-ness within the Energy Infrastructure segment. The Securitybusiness of Enterprise Solutions was reported in Corporate Itemsand Eliminations until its sale in February 2010. Also, effectiveJanuary 1, 2010, the Capital Finance segment was renamedGE Capital and includes all of the continuing operations ofGeneral Electric Capital Corporation (GECC). In addition, theTransportation Financial Services business, previously reportedin GE Capital Aviation Services (GECAS), is included in CommercialLending and Leasing (CLL) and our Consumer business in Italy,previously reported in Consumer, is included in CLL.Effective January 1, 2011, we reorganized the TechnologyInfrastructure segment into three segments—Aviation, Healthcareand Transportation. The results of the Aviation, Healthcare andTransportation businesses are unaf fected by this reorganizationand we will begin reporting these as separate segments beginningwith our quarterly report on Form 10-Q for the period endedMarch 31, 2011. Results for 2010 and prior periods are reported on
  79. 79. the basis under which we managed our businesses in 2010 and donot reflect the January 2011 reorganization.Beginning in 2011, we will supplement our GAAP net earningsand earnings per share (EPS) reporting by also reporting an oper-ating earnings and EPS measure (non-GAAP). Operating earningsand EPS will include service cost and plan amendment amortiza-tion for our principal pension plans asthese costs representexpenses associated with employee benefits earned. Operatingearnings and EPS will exclude non-operating pension cost/income such as interest cost, expected return on plans assets andnon-cash amortization of actuarial gains and losses. We believethat this reporting will provide better transparency to theemployee benefit costs of our principal pension plans andCompany operating results.Overview of Our Earnings from 2008 through 2010Earnings from continuing operations attributable to theCompany increased 15% in 2010 after decreasing 39% in 2009,reflecting the stabilization of overall economic conditions during2010, following the challenging conditions of the last two yearsand the effect on both our industrial and financial servicesbusinesses. We believe that we are seeing signs of stabilizationin the global economy, including in financial services, as GECSearnings from continuing operations attributable to theCompany increased 138% in 2010 compared with a decreaseof 83% in 2009. Net earnings attributable to the Companyincreased 6% in 2010 after decreasing 37% in 2009, as losses
  80. 80. from discontinued operations in 2010 partially offset the 15%increase in earnings from continuing operations. We have astrong backlog entering 2011 and expect global economicconditions to continue to improve through 2012.Energy Infrastructure (25% and 33% of consolidated three-year revenues and total segment profit,respectively) revenuesdecreased 8% in 2010 and 6% in 2009 as the worldwide demandfor new sources of power, such as wind and thermal, declined withthe overall economic conditions. Segment profit increased 2% in2010 and 9% in 2009 primarily on higher prices and lower materialand other costs. We continue to invest in market-leading technol-ogy and services at Energy and Oil &Gas.Technology Infrastructure (24% and 33% of consolidatedthree-year revenues and total segment profit, respectively) rev-enues and segment profit fell 2% and7%, respectively, in 2010and 7% and 9%, respectively, in 2009. We continue to invest inmarket-leading technologies and services at Aviation, Healthcareand Transportation. Aviation revenues and earnings trendeddown over this period on lower equipment sales and services andthe costs of investment in new product launches, coupled withthe effects of the challenging global economic environment.Healthcare revenues and earnings improved in 2010 on higherequipment sales and services after trending down in 2009 dueto generally weak global economic conditions and uncertainty inthe healthcare markets. Transportation revenues and earningsdeclined 12% and 33%, respectively, in 2010, and 24% and 51%,respectively, in 2009 as the weakened economy has driven
  81. 81. overall reductions in U.S. freight traffic and we updated our esti-mates of long-term product servicecosts in our maintenanceservice’s discussion and analysisGE 2010 ANNUAL REPORT 33NBC Universal (NBCU) (10% and 12% of consolidated three-yearrevenues and total segment profit, respectively) is a diversifiedmedia and entertainment company. NBCU revenues increased 9%in 2010 after decreasing 9% in 2009 and segment profit was flat in2010 after decreasing 28% in 2009. The cable business continuesto grow and become more profitable, the television business hadmixed performance, and our parks and film businesses haveimproved as the U.S. economy has stabilized. On January 28, 2011,we transferred the assets of the NBCU business to a newly formedentity, which consists of our NBCU businesses and ComcastCorporation’s cable networks, regional sports networks, certaindigital properties and certain unconsolidated investments. Inconnection with the transaction, we received $6.2 billion in cashand a 49% interest in the newly formed entity, NBC Universal LLC,which we will account for under the equity method.GE Capital (34% and 20% of consolidated three-year revenuesand total segment profit, respectively) net earnings increased to$3.3 billion in 2010 due to stabilization in the overall economicenvironment after declining to $1.5 billion in 2009 from the effectsof the challenging economic environment and credit markets.Over the last several years, we tightened underwriting standards,
  82. 82. shifted teams from origination to collection and maintained aproactive risk management focus. This, along with recentincreased stability in the financial markets, contributed to lowerlosses and a return to pre-tax earnings and a significant increasein segment profit in 2010. We also reduced our ending net invest-ment (ENI), excluding cash andequivalents from $526 billion atJanuary 1, 2010 to $477 billion at December 31, 2010. The currentcredit cycle has begun to show signs of stabilization and weexpect further signs of stabilization as we enter 2011. Our focusis to reposition General Electric Capital Corporation (GECC) as adiversely funded and smaller, more focused finance company withstrong positions in several mid-market, corporate and consumerfinancing segments.Home & Business Solutions (6% and 2% of consolidated three-year revenues and total segment profit,respectively) revenues haveincreased 2% in 2010 after declini ng 17% in 2009. Home & BusinessSolutions continues to reposition its business by eliminating capac-ity in its incandescent lightingmanufacturing sites and investing inenergy efficient product manufacturing in locations such asLouisville, Kentucky and Bloomington, Indiana. Segment profitincreased 24% in 2010 primarily as a result of the effects of produc-tivity reflecting these cost reductionefforts and increased otherincome, partially offset by lower prices. Segment profit increased1% in 2009 on higher prices and lower material costs.Overall, acquisitions contributed $0.3 billion, $2.9 billion and$7.4 billion to consolidated revenues in 2010, 2009 and 2008,respectively, excluding the effect s of acquisition gains following
  83. 83. our adoption of an amendment to Financial Accounting StandardsBoard (FASB) Accounting Standards Codification (ASC) 810,Consolidation. Our consolidated net earnings included approxi-mately $0.1 billion, $0.5 billion and $0.8billion in 2010, 2009 and2008, respectively, from acquired businesses. We integrate acqui-sitions as quickly as possible. Onlyrevenues and earnings fromthe date we complete the acquisition through the end of thefourth following quarter are at tributed to such businesses.Dispositions also affected our ongoing results through lowerrevenues of $3.0 billion in 2010, lower revenues of $4.7 billion in2009 and higher revenues of $0.1 billion in 2008. The effects ofdispositions on net earnings were increases of $0.1 billion,$0.6 billion and $0.4 billion in 2010, 2009 and 2008, respectively.Significant matters relating to our Statement of Earnings areexplained below.DISCONTINUED OPERATIONS. Consistent with our goal of reduc-ing GECC ENI and focusing ourbusinesses on selective financialservices products where we have domain knowledge, broaddistribution, and the ability to earn a consistent return on capi-tal, while managing our overall balancesheet size and risk, inDecember 2010, we sold our Central American bank and cardbusiness, BAC Credomatic GECF Inc. (BAC). In September 2007,we committed to a plan to sell our Japanese personal loanbusiness (Lake) upon determining that, despite restructuring,Japanese regulatory limits for interest charges on unsecuredpersonal loans did not permit us to earn an acceptable return.During 2008, we completed the sale of GE Money Japan, which
  84. 84. included Lake, along with our Japanese mortgage and cardbusinesses, excluding our minority ownership in GE NissenCredit Co., Ltd. Discontinued operations also includes ourU.S. recreational vehicle and marine equipment finance business(Consumer RV Marine) and Consu mer Mexico. All of these busi-nesses were previously reported in theGE Capital segment.We reported the businesses described above as discontinuedoperations for all periods presented. For further informationabout discontinued operations, see Note 2.WE DECLARED $5.2 BILLION IN DIVIDENDS IN 2010. Common per-share dividends of $0.46 were down 25% from 2009, follow-ing a 51% decrease from the precedingyear. In February 2009,we announced the reduction of the quarterly GE stock dividendby 68% from $0.31 per share to $0.10 per share, effective withthe dividend approved by the Board in June 2009, which waspaid in the third quarter of 2009. As a result of strong cashgeneration, recovery of GE Capital and solid underlying perfor-mance in our industrial businesses during2010, in July 2010, ourBoard of Directors approved a 20% increase in our regularquarterly dividend from $0.10 per share to $0.12 per share andin December 2010, approved an additional 17% increase from$0.12 per share to $0.14 per share. On February 11, 2011, ourBoard of Directors approved a regular quarterly dividend of$0.14 per share of common stoc k, which is payable April 25,2011, to shareowners of record at close of business onFebruary 28, 2011. In 2010 and 2009, we declared $0.3 billion inpreferred stock dividends.