GE Works Infrastructure Investor Meeting September 27, 2012
Caution Concerning Forward-Looking Statements: This document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; potential market disruptions or other impacts arising in the United States or Europe from developments in the European sovereign debt situation; the impact of conditions in the financial and credit markets on the availability and cost of General Electric Capital Corporation’s (GECC) funding and on our ability to reduce GECC’s asset levels as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; changes in Japanese consumer behavior that may affect our estimates of liability for excess interest refund claims (GE Money Japan); pending and future mortgage securitization claims and litigation in connection with WMC, which may affect our estimates of liability, including possible loss estimates; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level; GECC’s ability to pay dividends to GE at the planned level; the level of demand and financial performance of the major industries we serve, including, without limitation, air and rail transportation, energy generation, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation; strategic actions, including acquisitions, joint ventures and dispositions and our success in completing announced transactions and integrating acquired businesses; the impact of potential information technology or data security breaches; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
“This document may also contain non-GAAP financial information. Management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of our financial performance, identifying trends in our results and providing meaningful period-to-period comparisons. For a reconciliation of non-GAAP measures presented in this document, see the accompanying supplemental information posted to the investor relations section of our website at www.ge.com.”
“As previously announced, effective in the fourth quarter of 2012, Energy Infrastructure will be reorganized into three businesses – Power & Water, Energy Management, and Oil & Gas. Information related to these businesses is presented on this new basis and is preliminary and unaudited. Other information has not been revised.”
“In this document, “GE” refers to the Industrial businesses of the Company including GECC on an equity basis. “GE (ex. GECC)” and/or “Industrial” refer to GE excluding Financial Services.” GE Infrastructure Investor Meeting agenda
2:00pm Introduction Jeff Immelt, Chairman & CEO, General Electric
Aviation David Joyce, President & CEO, Aviation
Oil & Gas Dan Heintzelman, President & CEO, Oil & Gas
Healthcare John Dineen, President & CEO, Healthcare
Energy Management Dan Janki, President & CEO, Energy Management
H&BS Charlene Begley, President & CEO, Home & Business Solutions
Transportation Lorenzo Simonelli, President & CEO, Transportation
Power & Water Steve Bolze, President & CEO, Power & Water
Wrap up Jeff Immelt, Chairman & CEO, General Electric
4:00pm Q&A
5:00pm Cocktail reception
GE Infrastructure Investor Meeting 09-27-12 2 Global environment Developed Emerging
U.S.: slow recovery Asia: still strong continues + China five-year plan + Consumer confidence +/– Growth moderating but stable + Housing stabilizing + Room for policy actions … - Fiscal uncertainty China stimulus announced
Europe: uncertainty remains Resource rich: infrastructure + Pockets of growth build - Hard decisions yet to be made + Markets strong for GE - Long-term impact + Manageable inflation − Commodity capex slowing
Realistic about Much better portfolio + big backlog environment, but Early start on cost-out programs a few positives Strong growth initiatives … services & global in our control High level of discretionary cash
GE Infrastructure Investor Meeting 09-27-12 3 GE strategy More valuable portfolio + Strategic imperative 1 Leadership in technology Strength 2 Expand services analytics Premier Valuable Infrastructure Specialty company Finance 3 Invest in growth markets Cash 4 Simple + competitive cost structure + + Value-creating capital allocation Enablers ~$100B+ Organic investment Scale … breadth + depth Available Grow dividend Financial strength cash Reduce shares Embedded relationships/brand Bolt-on acquisitions Leadership in performance culture '12E-'16F
GE Infrastructure Investor Meeting 09-27-12 4 2012 operating framework Operating earnings 2012E 2012 drivers Industrial ++ Strong global organic growth Energy acquisitions performing Broad-based strength
GE Capital ++ Improved losses & impairments Real Estate improving
Corporate -a) ~Flat ’11 items: NBCU gain & restructuring Total cost ~$3B–a) in ’11 & ’12 Total operating ++ ~$.03 EPS NBCU related gain, offset by earnings restructuring/ other charges in 3Q’12
CFOA – Industrial $11-12B Industrial CFOA $12-13B before pension contribution $0.4B; minimal in ’13 Total CFOA $17-19B with GECC dividends
Total revenues ~5% Industrial organic ~10%, Capital ~(5)% (a- Excluding NBCU pretax gain $3.7B in 2011 NBCU gain ’11 impact 3Q update: Substantial gain in 3Q will offset restructuring Positive orders growth ex. Wind Outlook for Industrial organic growth raised to ~10% GE Infrastructure Investor Meeting 09-27-12 5 Industrial performance ($ in billions) Industrial revenue Positioned to sustain double-digit growth Exits: + Big backlog of equipment & services Plastics ++ Silicones NBCU $94 + Pipeline of NPI & new service offerings $48 + Positioned in growth markets
+ Expanding margins … momentum into 2013 '00 '11 '12E − Wind dynamics … ~$(.03) EPS impact in 2013 OP $8 $14 ++ − Developed market uncertainty OP (%) 16% 15% + Expect double-digit earnings growth in 2013
We like our businesses Capture growth tailwinds Diversified revenue streams Strong competitive position Transferable technology + practices Multiple scalable platforms Capital efficient
GE Infrastructure Investor Meeting 09-27-12 6 Portfolio transformation
1 Divestitures 1 Smaller GE Capital Sold 30% of GE linkage Capital Insurance earnings Competitive Lower risk Capital advantage 2 Acquisitions Generate cash Capital Reallocate to Oil Return > cost of & Gas capital Infrastructure 2 Grow Infrastructure Infrastructure adjacencies Build-out Infrastructure 3 Invest in organic Infrastructure adjacencies growth O&G accelerates R&D at 5-6% Organic growth Plastics/Media Global footprint
2000 Today Future Expanding returns + Improved GE Capital profile … earnings & size ++ ~12% + Solid performance for cash & working capital ROTC + Disciplined investing … leverage scale + Reduce shares … target below 10B shares 2012E Future
GE Infrastructure Investor Meeting 09-27-12 7 Improving Infrastructure portfolio ($ in billions) Adjacencies (revenue) Focused intent ++ + New Infrastructure markets (i.e., Oil & Gas) $41 $4 + Diversify & leverage core markets (i.e., Life Sciences, Aviation Systems) '01 '12E '15F + Add capability (i.e., electrification) 30% of GE’s earnings
Business building Value creation in Energy $11 1 Build on strength in markets we know Wood Group Wellstream Profit > pro forma Margin +50 bps. 2 Be the assembler … focus on pure plays Lineage Power Dresser vs. 1H’11 Converteam 3 Look for business model changes Investment 4 Drive organic pipeline + 70% of revenue is outside U.S. + Increase in service and margins 5 Maintain financial discipline ($1-3B) + Technical and supply chain strength
GE Infrastructure Investor Meeting 09-27-12 8 Technology leadership
Annual R&D Product Gaining share in big investment launches systems ~$5-6B ~880 820 More products & more price points
GRC business launches/organic '11 & '12E '11 '12E
• Investment spend will continue to grow, Acquisition value with R&D/Industrial revenue ~5% creation • World-class Global Research Centers driving cross-business synergies Manufacturing • Software & analytics COE helping to technology transform services model Investments in technology are working GE Infrastructure Investor Meeting 09-27-12 9 Winning in growth markets ($ in billions) International Industrial Growth regions segment revenue Resource rich ++ $53B MENAT +% Russia/CIS ++%
Growth 33 ++ Latin ++% Sub-Saharan ++% America Africa
Canada ++% Australia & ++% Developed 20 + New Zealand
'11 '12E Rising Asia GE global strength China ++% India -% Brand … company-country relationship Local partnerships with best players ASEAN ++% Scale … supply chain + backrooms Global R&D … right products for markets 1) Sustain China growth + capability Financing & risk management 2) Localize and win in resource rich
GE Infrastructure Investor Meeting 09-27-12 10 Accelerating services growth ($ in billions) Business momentum continues Driving customer value
+5-10% $50-60 $150B Fuel efficiency $42 IB growth +3-4% Throughput $/IB growth +3-4% Asset utilization Revenue Margin + Safety Efficiency Uptime '11 '15F Industry waste Profit $12 ++ (energy, O&G, rail, Backlog $147 ~$175 airlines, hospitals) “Service 2.0” 1 Lead in materials and analytics 4 Structured analytical offerings 2 Big pipeline of upgrades 5 More value in CSA (customer + GE) 3 Intelligent assets performance 6 Incremental software sales enhancement (sensors + controls)
GE Infrastructure Investor Meeting 09-27-12 11 Enterprise relationships Global accounts Company-to-country Collaboration across the value chain Kingdom of Partnership with Ministry of Health Saudi Arabia + Technology development … 2X Healthcare revenue + Alternative energy Local manufacturing & development + Multi-year upstream gas turbine Energy partnership agreement Opportunity to double revenue Solving tough problems together
Industry verticals Enterprise selling Unconventional fuels Joint technology development Delivering results in Healthcare Calgary innovation center + $1B+ in enterprise deals + Capitalizes on GE breadth Oil & Gas Power & Water + Win-win customer & GE CNG vehicle infrastructure Membranes, evaporators Artificial lift … enhanced Distributed power Imaging Operations optimization recovery Life Sciences
Demonstrating the breadth of GE Improving customer economics
GE Infrastructure Investor Meeting 09-27-12 12 Margin expansion
Goal Hitting 100 bps. by ’13 (Total segment OP%) ’13F +50-70 bps. +30-50 bps. Mix: equipment/service + 14.9% Value gap + Deflation … 1.5% DM + 3% indirects Price stability in Energy; increase in Aviation, O&G & services
Product cost + Momentum in Healthcare & '11 '12E '13F Aviation; best practices Drivers ’11 ’12E Simplification + Equipment/service mix + – $0.7-1.0B cost out in SG&A Value gap – + Service margins + Cost productivity – + Progress continues … improved Service margins + + analytics
GE Infrastructure Investor Meeting 09-27-12 13 Simplification ($ in billions) SG&A cost out Key initiatives Reduce & consolidate structure $0.8-1.0 P&Ls $1.0-1.3 • Progress with Energy HQ ~$0.2 • Healthcare ~$0.2-0.3 $0.7-1.0 Layers Europe footprint
Improve scale leverage … shared services $0.6-0.8 & process improvement
Drive indirect sourcing & usage $0.5-0.7
GE Capital further cost reductions $0.4+ '13F '14F
$2B+ cost reduction through 2014 … without impacting growth engine
GE Infrastructure Investor Meeting 09-27-12 14 Supply chain excellence Disruptive cost workouts (Evolution Series) Lean manufacturing (Greenville)
Deep dives on 7 sub-systems Leveraging scale & expertise ~$50MM annual savings Cycle & lead time reduction PowerHaul & C-Series next Continuous process improvement
Accelerated learning curve (GEnx) Mission One (Appliances)
GE’s fastest wide-body ramp Integrated development team Expansive supply chain Production & assembly time Cost 30% in first 2 years Cycle time
Localization (services)
Access to growth markets Multi-modal facilities
Dammam, KSA Increased customer responsiveness Luanda, Angola
GE Infrastructure Investor Meeting 09-27-12 15 Capital allocation Available cash Capital allocation Principles + priorities
~$100B+ ~$100B+ 1 Organic investment in Industrial NBCU profit growth
GECC Buyback/ 2 Grow dividends in line with dividends M&A earnings
3 Use special GE Capital dividends to reduce shares … GE shares to
Dividend below 10B Industrial CFOA/other 4 M&A deals between $1-3B … focus on infrastructure adjacencies Operating needs 5 Continue to reduce size of GE Parent Capital and diversify funding ’12E-’16F ’12E-’16F Capital allocation creates shareholder value
GE Infrastructure Investor Meeting 09-27-12 16 Our businesses Business/’11 revenue Today Future Power & Water: Leadership franchise … investing in more & + Will succeed in “inevitable” gas $26B better products & services in more markets; turbine market growth preparing for gas conversion
Aviation: Generational wins in engine platforms; + Execution … supply chain & service $19B significant opportunity to expand adjacencies + Broader footprint … $10B+ adjacency (mainly organic)
Healthcare: Diagnostic leader positioning for changing + Long-term winner in industry going $18B market; momentum in growth markets & through change; bigger presence in adjacencies services; #1 in growth markets
Oil & Gas: Leading equipment & service provider + Clear technical & service leadership $14B in high-growth industry + Bigger footprint with global accounts
H&BS: Stronger product offerings + Positioned for earnings expansion $8B as housing improves
Energy Management: Attractive business segments with significant + Massive room for improved position; $6B growth + margin opportunity; builds critical become a meaningful competitor GE capability
Transportation: Leadership franchise … growing in new + Win big in global markets; incremental $5B geographies & adjacencies growth in services & mining GE Infrastructure Investor Meeting 09-27-12 17 Presentation
Market & GE positioning
Strategic execution − Technology − Global growth − Service & analytics − Adjacencies − Margins
Outlook & drivers
GE Infrastructure Investor Meeting 09-27-12 18 Aviation GE Aviation portfolio … $19B
Commercial engines Commercial engine Military engines $4.9–a) services $7.2–a) and services $3.7–a)
Business and general Systems $2.7 Largest provider of jet aviation/other $0.4 engines in the world 40,000 employees 83 sites globally
(a- Includes GE’s share of revenue from CFM and EA engines GE Infrastructure Investor Meeting 09-27-12 20 CFM is a 50/50 JV between GE and Snecma EA is a 50/50 JV between GE and Pratt & Whitney Environment Market drivers Selected competitors
Passenger 6.0 4.9 demand % change YoY 2012 YTD ’13F
5.8 Freight Strategic imperatives (2.4) demand % change YoY 2012 YTD ’13F Win with the next generation of competitive platforms $35 $29 Oil & crack Execute margin growth in supply chain $96 $93 spread price Expand adjacencies … Systems and WTI Crack spread $/bbl Business & General Aviation 2012 2013F Grow aftermarket through installed base & new service value U.S. Defense budget 553 525 Position for change in military forecast President’s budget request, $B investment 2012 2013F Win in key growth markets
GE Infrastructure Investor Meeting 09-27-12 21
Source: IATA, WTI, US Gov OMG GE Aviation today … commercial Commercial fleet in service (# of GE & JV engines) Powering the world’s regional fleet 30,000 … 85M flight hours, 7,400 delivered CF34 18,000 14,000 Powering the world’s single aisles … 590M flight hours, 22,000 delivered 9,000 12,000 CFM56 5,000 2000 2012 Best selling wide-body engine ever … 362M flight hours, 7,000 delivered 2Q’12 commercial backlog ($ billions) CF6 74 * Most successful large twin in history … 32M flight hours, 1,500 delivered GE90 19 * Fastest selling wide-body engine … 1,050 on order Equipment Services GEnx
* Includes GE’s share of revenue from CFM and EA engines GE Infrastructure Investor Meeting 09-27-12 22 CFM is a 50/50 JV between GE and Snecma EA is a 50/50 JV between GE and Pratt & Whitney Source: Ascend, Company reports GEnx ... most advanced engine in service % % Boeing 787 15 40 LOWER LOWER fuel consumption* NOx emissions 407 ~1,700 257 aircraft “… engine overall is perfect, powerful and good response” 239 – Japan Airlines Captain remaining No engine selection “Engines are very good. No problems. Burned 2 tons below plan” – Cathay Flight Crew Captain
Boeing 787 Boeing 747-8
GE Infrastructure Investor Meeting 09-27-12 23
*Compared to today’s generation LEAP … positioned for 9,000+ aircraft opportunity Sole source
% COMAC C919 15 330 aircraft announced LOWER 13 customers fuel consumption* Sole source Dual source
Boeing 737 MAX Airbus A320neo 1,100+ AC announced 596 LEAP aircraft to date 15 launch customers 51% of announced wins GE Infrastructure Investor Meeting 09-27-12 24
*Compared to today’s generation CFM, CFM56, LEAP and the CFM logo are trademarks of CFM International, a 50/50 joint company between Snecma and GE Leveraging technology investment 2011 2016 2019
• Scale & design • Scale & design for higher cycle for higher utilization temperatures
GEnx LEAP GE9X
GEnx: engines/flight hours ~1,000/14MM ~1,600/30MM LEAP: engines/flight hours ~4,000/30MM Annual investment Enabling … (including customer funded) + Engineering productivity 10%+ ~$1.5B
Manufacturing technology readiness
Supply chain efficiencies '11-'12E '13F Delivering for GE and the customer
GE Infrastructure Investor Meeting 09-27-12 25 Military … positioned for realities 2011 military installed fleet GE imperatives … diversify portfolio (# engines) • Upgrades as cost-effective alternatives 14,200 • International sales to sustain production 22,000 • Marine growth … military and commercial 14,100 • Science and technology readiness for NextGen
Sequestration GE in-service fleet (# engines) 32,800 Least impacted 28,500 25,900 1,000 1,100 Army helicopters Other800 Tanker/Transport Navy aircraft Combat Science & technology Rotorcraft programs
2012E 2015F 2020F Source: Flight Global, GE Analysis
*CFM ~2,300 installed base CFM is a 50-50 JV between GE and Snecma GE Infrastructure Investor Meeting 09-27-12 26 RR includes JVs Turbo-Union (~900) and Eurojet (~600) Includes only Western-built, OEM engine manufacturers with an installed base of over 10,000 engines Excludes 17,000 engines produced by other manufacturers Positioned for services growth 44% of fleet In-service fleet Departures Shop visits without first # engines (000) Millions of departures shop visit
46 30 5,600 100 35 23 4,600 20 4,100 30 27 2,800 20 2,500 21 16 2,200 18 13
2,100 2,700 18 1,900 12 14 9 7 8
’12E ’15F ’20F '12E '15F '20F ’12E ’15F ’20F Winning installed base Drives record Delivers services utilization growth
Expect double-digit growth GE Infrastructure Investor Meeting 09-27-12 27
CFM is a 50/50 JV between GE and Snecma EA is a 50/50 JV between GE and Pratt & Whitney Driving productivity through analytics
Fuel & carbon/ IVHM Digital workscope Austin Digital Integrated Vehicle Health Management
• Optimize time • Flight operations • Advanced prognostics & data analysis enterprise integration on-wing • Operations insights for fuel savings
Improving productivity of our Improving utilization of Improving service of customers assets our customers airplanes our engines
1% fuel burn reduction–a) 1 hour increase in aircraft 5% annual productivity = $10MM savings utilization per day = $50MM cost savings = $100MM+ annual benefit–c) per year
Our competitive advantage … • Fuel efficiency over 25,000–b) engines monitored • Asset utilization … and growing • Operations efficiency
(a- Assumes a typical 70 aircraft, $1B fuel bill, fuel cost is $3.25 per gallon (b- Includes CFM, GE & EA engines GE Infrastructure Investor Meeting 09-27-12 28 (c- Assumes fleet > 50 aircraft Winning in China
Strong installed base and backlog Well positioned on C919
3,800 Other 33% 2,150 Integrated avionics 31% Integrated propulsion 59% 51% + 8% 18% Installed Backlog fleet
GE-AVIC joint venture operational Growing Business & General Aviation 1Q’12 • Power indigenous and imported aircraft • Expand AVIC with BGA engines and systems
OEM Program Product Fully integrated, open architecture Hongdu N5B M601 commercial avionics and services
GE Infrastructure Investor Meeting 09-27-12 29
CFM is a 50/50 JV between GE and Snecma EA is a 50/50 JV between GE and Pratt & Whitney Adjacency growth … business & general aviation Turboprops Light jets Mid-size jets Large cabin
H80 Family GE Honda Systems Passport 20 focus Engines in service M601/H80 family HF120 Passport/CF34/CFM56 5,500 2,000 3,5004,600 1,200
500 Distributed power
2012 2020F 2012 2020F 2012 2020F $10B+ opportunity over 10 years GE Infrastructure Investor Meeting 09-27-12 30
CFM is a 50/50 JV between GE and Snecma Systems growth … $17B commitments
Avionics Mechanical Power Unison
Invest Invest Invest Invest • Next-gen avionics • Integrated • SiC electrical power • Ignition systems • Integrated Vehicle propulsion systems components • Adjacent markets Health Management • Integrated turboprop • Advanced generation • Digital data services system
787 C919 A320neo $2.0MM/aircraft $1.0MM/aircraft $3.0MM/aircraft
F-35 A380 G650 $1.6-1.8MM/aircraft $1.5MM/aircraft $0.4MM/aircraft
GE Infrastructure Investor Meeting 09-27-12 31 Driving margin Key drivers
+ Simplification • Strategic divestitures + • Global shared services entitlement 18.6% Value gap • Price realization with new technology • Deflation … 2X in low-cost countries
Product cost • GEnx learning curve • Supply chain productivity
Service margins '11 '12E '13F • Growth through installed base & analytics
Driving cost out with technology
GE Infrastructure Investor Meeting 09-27-12 32 Aviation outlook ($ in billions)
+ Summary + $18.9 Industry fundamentals remain strong Revenue Strategic execution +/++ + • Next-gen technology leadership … execute on new engine launches $3.5 • Double-digit services growth • Expanding global customer base Op. profit • Simplification efforts to drive margin expansion > 50 bps. • Profitable expansion beyond the '11 '12E '13F engine
A great GE business
GE Infrastructure Investor Meeting 09-27-12 33 Oil & Gas $16 GE Oil & Gas foundation Well support • Pressure control (Orders in $ billions) • Electrical submersible pumps • Logging services ~35,000 employees in 100+ countries delivering advanced technology & aftermarket services
$10
$4 2007 $2 $1
1994 1997 2004 2008 2011 A turbomachinery Developed Expanded in Entered the drilling & The “new” company a service model inspection technologies production segment GE Oil & Gas Invested ~$11B since 2007 to position for future growth GE Infrastructure Investor Meeting 09-27-12 35 GE Oil & Gas benefits from growth across the sector Industry capex ’12-’15: ~$3T GE Oil & Gas revenue ’11: $14B Drilling & surface ~$2.0B Turbomachinery equipment & services ~$5.6B Subsea equipment & services ~$2.1B Measurement & control ~$3.9B Cutting-edge technology solutions across the value chain
GE Infrastructure Investor Meeting 09-27-12 36 Environment Industry environment Selected competitors
~90 5x mmboe increase of new production in capex per barrel of new capacity needed by 2020 capacity ’08-’16
Strategic imperatives 72% ~50% Lead in technology with global accounts of pipelines of IOC employees Unconventionals … unlocking potential > 25 years old aged 45+ Subsea … leading growth with technology Industrial Internet … data and software 11% 12% enabling value growth growth in unconventionals in Subsea Turbomachinery … advancing technology industry spend ’12-’15 industry spend ’12-’15 Services … lifecycle reliability and efficiency
GE Infrastructure Investor Meeting 09-27-12 37 Sources: GE Oil & Gas analysis based on IEA, CERA, Rystad, Quest, Schlumberger Our differentiation through technology Technology spend Developing breakthrough technologies
++ 1st subsea compressor … Statoil Validated a 12MW subsea compressor for Ormen Lange
$1.1B st 1 high pressure CO2 pump … Petrobras Installed a 560 bar CO2 pump for enhanced oil recovery, highest pressure ever
$370M 1st drilling mud lift pump Innovative product enabling to reach deeper reservoir
Deepwater BOP Blind Shear Rams '03-'05 '10-'12E '13F-'15F Cuts & seals industry leader, patent-pending technology
Invest 3-4% of revenue Subsea digital inspection Developing with customers monitoring tools for Capitalize on Energy + Aviation corrosion inspection + Healthcare technology
Investing to bring GE technology to the O&G industry
GE Infrastructure Investor Meeting 09-27-12 38 Winning in Subsea Global execution Subsea industry spend (in $ billions) 1 Raising industry standards • Supply chain ... on-time delivery $92 • Project management and planning $66 • Delivering to quoted margins
2 Developing next-gen technology • Structured next-gen equipment 2012 2015 • Power & processing … power conversion
Tree awards • 1H’12 ~280 … 2X 1H’11 3 Expanding services capabilities • GE ~30% share • Localization in Brazil and Angola Flexible Pipe awards • Reliable intervention solutions • FPSO backlog at 2008 levels • 2X growth in flexibles ’12-’15 • Frame agreements with end-users
GE Infrastructure Investor Meeting 09-27-12 39
Sources: Rystad, Quest Unconventional fuels Industry spend on North Three ways to win … American unconventionals (in $ billions) 1 North American LNG Exports $10B+ 2-3 projects likely to move forward customer spend ’13-’15 Further projects dependent on $155 policy and gas pricing $114 2 Enhance upstream production $10B+ Wellheads and flow control customer spend ’13-’15 2012 2015 Integrated power and artificial lift + Tomorrow’s growth 3 Enable new sources of demand • Early exploration phase China CNG in a Box $1B+ • Policy & infrastructure to come new potential Micro LNG opportunities Argentina ’13-’15
GE Infrastructure Investor Meeting 09-27-12 40
Sources: Rystad, GE Oil & Gas analysis Injecting GE technology into acquisitions … artificial lift
Industry spend on Innovative GE solutions artificial lift (in $ billions)
$14 $10
performance temperature durability for wells with higher for deeper enhanced gas-oil ratio applications reliability for high 2012 2015 sand content
GE Infrastructure Investor Meeting 09-27-12 41
Sources: Spears, GE Oil & Gas analysis BOP differentiation Reach industry highest Increase operating BOP system reliability safety
GE proven Remote industrial controls monitoring and diagnostics
Early kick Develop deeper and more detection challenging reservoirs
Max Lift dual gradient mud pump Unmatched shearing capabilities
Developing deeper reservoirs with safer & more reliable BOP systems GE Infrastructure Investor Meeting 09-27-12 42 Global growth … localization & capability Russia Partnering to develop local Industry spend Customers visiting Moscow manufacturing application center capabilities people
South East Industry spend Asia investment
Sub-Saharan people Africa Industry spend Brazil Investing to Investing in research Industry spend expand Subsea & manufacturing manufacturing Australia planned investment capabilities capabilities Supporting development of the Industry spend planned investment people world’s largest LNG exporter by 2020
people investment
people GE Infrastructure Investor Meeting 09-27-12 43 Services + software
After market services Installed base & & installed base data acquisition … • 100,000+ machinery control & protection the foundation systems + • 10,000+ compressors • 5,000 turbines Experience & insight … • 1,200 subsea systems industry expertise • 7,000 engineers • Deep OEM domain knowledge & service expertise + • Integrated software architecture
Connectivity & big data … software & ++ analytics Services ‘12-’15
Applying GE services experience to the total portfolio
GE Infrastructure Investor Meeting 09-27-12 44 Analytics & asset management Growth in subsea Services & software instrumentation opportunities Secondary/chemical Broad leak injection detection and Vibration equipment monitor monitoring (Naxys)
Pressure & Distributed temperature fiber sensing for multiple parameters
Robotic and ROV- Actuator control Multiphase flow radiography Value to customers … portfolio and solutions integration Recent acquisitions Reservoir production & integrity surveillance Flow assurance & integrity Potential to expand geographically and into adjacencies
GE Infrastructure Investor Meeting 09-27-12 45 Driving margin
Key drivers ++ Simplification ++ • Optimizing cost structure 12% • Product & regional alignment
Value gap • Utilize GE supply base • Technology-driven value pricing
Product cost • Globalized supply chain • Invest in cost-out design programs
'11 '12E '13F Services margin • Grow organic penetration • Bring model to acquisitions
Strong execution … positive margin trend
GE Infrastructure Investor Meeting 09-27-12 46 Oil & Gas outlook ($ in billions)
++ Summary ++ $14 High-growth segment Revenue ++ ++ Strategic execution $1.7 • Technology leader … solving industry challenges • Expanding installed base & service revenues Op. profit • Well-positioned in resource rich and emerging economies • High service mix & products with higher margins '11 '12E '13F • Continued growth in strong sectors
Invested for double-digit growth in ’12 & beyond
GE Infrastructure Investor Meeting 09-27-12 47 Healthcare $18B broad technology portfolio
Diagnostic & clinical Information Molecular medicine equipment tech. and services
Clinical and Diagnostic administrative Bio-process imaging Protein & Departmentals cell sciences Clinical products Connectivity Contrast & knowledge media/PET solutions tracers Molecular Equipment Molecular imaging service solutions pathology
$8.3B $6.1B $3.7B
Leading healthcare solutions provider
GE Infrastructure Investor Meeting 09-27-12 49 Environment Market environment Selected competitors
Consumer demographics driving demand up Equipment IT & services Molecular medicine • Aging, obesity & complex chronic diseases
Multi-speed world … with premium and value demands • U.S./EU slow, but IB needs technology upgrade • Emerging markets in multi-year build-out
Technology-driven, highly-regulated markets with limited protectionism Strategic imperatives • Healthcare domain key to play • Leading product portfolios with clinical & Providers driving for efficiency & quality economic relevance • Profitability pressures driving quality and • Invest in emerging market footprint workflow focus • Drive software enabled service growth Precision medicine becoming mainstream • Molecular diagnostics & therapies expanding • Broaden molecular medicine portfolio Overall trends favorable … demands shifting dynamically
GE Infrastructure Investor Meeting 09-27-12 50 Technology = competitive advantage Leader in ultrasound Leading in molecular imaging
Discovery™ Vscan™ LOGIQ™ E9 Hdlive™ Ventri™ FASTlab™ PET/CT610 • Vscan™ expanding users in primary care & rural segments • Ventri™: compact cardiology device w/ optimized ergonomics • LOGIQTM E9: technological edge reflecting customer needs • 610 MotionFree addresses clinical challenges of motion • HDlive: medical 4D photo … leadership in women’s health • FASTlab™ delivers efficiency & economy in tracer production
Achieved global leadership in CT Closing the gap in MR
Discovery™ Optima™ MR430s InSightec™ Discovery™ MR750w Brivo™ CT325 Optima™ CT660 CT750 HD FREEdom extremity scanner MRgFUS • 325: developed/made in China for global value segment • 430s: specialty MSK system, enhanced patient experience • 660: offering affordable performance in mid-tier • 750: exceptional speed, resolution and coverage • 750: “lower dose by design” … leadership with ASiR/Veo™ • MRgFUS provides non-invasive, non-ionizing treatment
Winning with technology GE Infrastructure Investor Meeting 09-27-12 51 Hardware + wetware + software
Optimize radiation Integrated breast Improve quality in & contrast dose cancer workflow AD Dx & monitoring
Hardware
Discovery™ PET/CT600 Discovery™ CT750 HD Senographe™ Essential
Wetware
Omnipaque™/Visipaque™ Clarient Mammostrat™ Flutemetamol
Software
ASiR/Veo™ DoseWatch™ Mammography workstation NeuroMarQ
Connecting portfolio to deliver complete solutions
GE Infrastructure Investor Meeting 09-27-12 52
* Flutemetamol is not approved for use by the FDA or any other health regulatory agency Geographical diversity ($ in billions) HCS equipment Growth Expect slow growth in developed $8.7 markets • Aligned sales force to win with the 30% ++ winning customers • Focus on cross selling & solutions $7.5 • Rightsizing enabling functions Emerging 20% Emerging markets continue to show strength 70% =/+ • Expand coverage Developed 80% • More locally developed products … increased price points • Opportunity to partner with governments 2009 2011
Leadership in emerging markets key driver of growth
GE Infrastructure Investor Meeting 09-27-12 53 Winning in emerging markets Investing in local footprint Delivering growth
’09 ’12E CAGR 23% Building a $5B business • Local capabilities on par w/ U.S. & EU China • Global COE for value products Headcount 9,500 14,500 15% ’09 ’12E Company-to-country focus 17% Engineers 1,700 2,800 18% • Aligned with MOH priorities EAGM • Select localization in key regions Mfg. plants 12 16 10% ’09 ’12E Solid path to growth 18% ICFC products 3 17 78% • Expand coverage & service • Mfg. localization in Brazil LATAM ’09 ’12E Introducing disruptive NPI 20% • Private driven … low govt. funding India ’09 ’12E • Local R&D teams drive innovation
Accelerate growth in strong market 17% • Countries investing in HC systems • Expand coverage & svc. capability Global Research Center ASEAN ’09 ’12E Manufacturing/engineering $4.5B business growing 20%
GE Infrastructure Investor Meeting 09-27-12 54 Services + software + analytics Services + IT Proof points $6.1B DoseWatch™: measure and optimize dose • Antwerp University Hospital: 41% dose reduction
mGy.cm Total DLP Median • Proactive dose management … educate, plan,
784 mGy.cm replace, optimize 464 mGy.cm • Launch events at NSLIJ, Intermountain, Advocate DEC JAN FEB MAR APR MAY JUN ’11 ’12 ’12 ’12 ’12 ’12 ’12 ’11 Key growth drivers: AgileTrac™: analytics enabling safe & efficient ops. Strong customer relationships • Mount Sinai Hospital: safely increase patient globally throughput … Surgery +41%, Emergency +11% Powerful analytics focused on productivity and safety Caradigm™: data-backed clinical decision support Expanding Performance Solutions • New York-Presbyterian: 15% CHF readmission team reduction driving $1.5MM of annual savings Increasing emphasis on customer • Increase adherence to protocols cost, workflow & quality • Improved patient outcomes & decreased cost
Strong customer engagement driving growth
GE Infrastructure Investor Meeting 09-27-12 55 Life Sciences Investing along the value chain Grow cells Extract protein Purify them
Cell culture Filtration Chromatography Cell and media membranes media & systems and systems
Equipment and consumables Bioprocess production facility
GE used in 90% of MAb therapies Life Sciences sales growth Major customers 10% ++ CAGR $1.8B $1.1B
’06 ’11 ’15 Leading in a valuable industry GE Infrastructure Investor Meeting 09-27-12 56 Driving margin
Key drivers
+ Simplification • P&L consolidation … 8 HCS P&Ls to 6 + • Exit low-margin, non-core products 15.5%
Value gap • Dedicated focus on variable cost out • Optimizing global supply chain footprint
Product cost • Launch NPIs with lower cost positions • Accelerate best-cost-country plays
Services margins '11 '12E '13F • Grow value-added SW enabled offerings • Increase VCP through material cost improvement and footprint reduction
Achieve margin accretion through VCP & simplification GE Infrastructure Investor Meeting 09-27-12 57 Healthcare outlook ($ in billions) Summary + + $18.1 healthymagination™ - technologies that Revenue address today’s healthcare challenges
+/++ Strategic execution + • Developing products with clinical & $2.8 economic relevance • Adding software enabled growth Op. profit platforms • Investing in emerging market footprint • Reducing costs through simplification • Investing to broaden molecular '11 '12E '13F medicine portfolio
Leading healthcare solutions provider GE Infrastructure Investor Meeting 09-27-12 58 Energy Management Business overview ($ in billions)
Power Oil & gas Marine Industrial Technology & commercial 2012E $2.1 $0.7 $0.7 $2.2 $1.8 orders Electrical products, solutions and services
Grid Distribution Power Critical automation & protection conversion power GE electrification business GE Infrastructure Investor Meeting 09-27-12 60 Environment ’12-’15 $150B+ annual growth Selected competitors Power 6%
Oil & Gas 12%
Marine 6%
Industrial 8% Technology & 6% commercial Strategic imperatives Market segment
Long-term growth drivers 1 Grow Power Conversion Oil and gas demand 2 Build a global T&D business Global data processing boom 3 Improve cost competitiveness Renewable and distributed generation growth 4 Grow services business Aging infrastructure 5 Add value to GE market presence
GE Infrastructure Investor Meeting 09-27-12 61 Power Conversion update
Oil & gas Marine Energy Industrial Growth & operational focus Orders 1 Vertical and global build out ~$2.0B 30%
$1.5B 2 Product and technology leadership
3 Strengthen operational execution
4 GE connections … buy and sell
'11 '12E Integration on track 5 Expand services business On pro forma … synergy outlook better than expected Great fit … a game changer for GE
GE Infrastructure Investor Meeting 09-27-12 62 Growing a global Marine business $12B served market segment growing at 6% Merchant Capability Electrical propulsion Integrated electrical solutions Efficient electric solutions with optimized Automation and dynamic positioning cargo capability Global services provider Offshore Recent wins $ millions Broad portfolio High operational efficiency Offshore - Hornbeck $46 and availability Offshore – Swire $37 Naval Naval – Mars fleet $22 Differentiated technology Integrated low-noise full-electric solutions Merchant - Dynacom $21
World-class marine partner GE Infrastructure Investor Meeting 09-27-12 63 Delivering efficiency and reliability Offshore offering
Customer benefits Electrical motors & generators • Efficient electric system … operating cost 10-20%
Variable speed drives • High accuracy control for enhanced ship positioning
• Podded propulsion … 10% efficiency gain Dynamic positioning
• Integrated system … significant risk reduction
Inovelis POD Leading product and service capability
GE Infrastructure Investor Meeting 09-27-12 64 Building an electrical oil and gas business $8B served market segment growing at 12%
Offshore GE connection Drilling & production Commercial Product development Refining LNG Project execution Services Recent wins Pipeline $MM Offshore - Ichtys $26
Subsea LNG - Petronas $8
Market dynamics Subsea - Giri $6 • Offshore growth … going deeper • LNG strong … eLNG on the rise Pipeline - CH12 $6 • U.S. shale gas opportunities Driving global electrical technology leadership
GE Infrastructure Investor Meeting 09-27-12 65 Oil and gas Electrical and mechanical integration
Frequency converters (Power Conversion) Energy Management System Customer benefits (Power Conversion) • Higher efficiency ( 2 pts.) … full shaft line optimization
Medium voltage motors & • Compactness: 15% generators (Power Conversion) weight and footprint
• Flexibility with variable speed drive … less power installed
Gas compressor (Oil & Gas) • Reduced exhaust emissions One GE Electrical grid/torsional analysis Complete system approach to customer value
GE Infrastructure Investor Meeting 09-27-12 66 Creating GE system value ($ in billions) Power & Water GE buy & $.01 $1.0 sell synergies Today Future Gas Engines Oil & Gas Transportation
Aero Renewables Turbomachinery Mining
PC H&BS Subsea
MCS Motors Digital Energy Intelligent Platforms Industrial Solutions Energy Management Synergy outlook ahead of pro forma GE Infrastructure Investor Meeting 09-27-12 67 Focused global T&D business Today … Partnership–a) … $2B grid automation business adds primary equipment Generation • Optimization, protection and control • Grid automation provider • Strong position in America and Europe Transmission • Automated substation + • Protection, control and monitoring • High voltage primary equipment provider Distribution • Big player in China • Diagnostics and visualization 1 GE to distribute XD primary equipment • Detection and restoration and pull through grid automation
Consumption 2 Automation JV in China for China XD: 59%, GE: 41% • Metering, asset monitoring and protection 3 Equity investment XD: 85%, GE: 15% Integrated grid solutions … generation to consumption GE Infrastructure Investor Meeting 09-27-12 68 (a- Transaction subject to regulatory approvals Margin improvement
GE Peers Closing the gap
1 Power Conversion ~2% • Growth and synergy 10-15% execution 10%+ 2 Product cost ~2% • Reduced footprint • SKU reduction • Module design
3 Simplification ~2% 2% • Structure, ERPs Operating profit % • Shared operations
'12E Future 4 Services growth ~2% • 15% of sales
Roadmap to 10%+ profitability
GE Infrastructure Investor Meeting 09-27-12 69 Energy Management outlook ($ in billions) Summary ++ ++ $6 Attractive markets … strong long- Revenue term fundamentals Strategic execution • Grow Power Conversion ++ ++ • Build a global T&D business Op. profit • Improve cost competitiveness • Grow services business • Add value to GE market presence '11 '12E '13F
Building a competitive electrical franchise
GE Infrastructure Investor Meeting 09-27-12 70 H&BS H&BS environment Intelligent Housing starts (MM) Appliances Lighting Platforms 1.8 +28% 0.9 0.8 0.6 Rev. ($B) $5.0 $2.7 $0.8
‘06 ‘08 ‘10 ‘12 Value of a normal cycle Strategic imperatives 1.0+ 32.8 margin Appliances product transformation … share gain and higher margins Normal cycle +2-3% pts. Lighting transition to efficient lamps & LED Improved share +2 -3% pts. Sustaining price ahead of inflation /margins Doubling margin rate by 2015 Housing Core retail starts units Solid cash performance
GE Infrastructure Investor Meeting 09-27-12 72 Portfolio transformation 2012-2013 product launches $1B investment to insource manufacturing – Growing operating profit % 2x by ‘15 Hybrid water Bottom Top-load heater freezer Dishwasher washer Focused on producing differentiated products – Industry-first features and performance – Drive share growth with consumer driven demand Mar. ’12 May ’12 Sep. ’12 Oct. ’12
Lean manufacturing … production, prep, Stainless Front load Wall process dishwasher washer/dryer oven – Focus on optimizing hours per unit – Quality and enhance GE brand
GE Works … investing in U.S. manufacturing – Established design & manufacturing COEs April ’13 April ’13 July ’13
Delivering +1 pt. share gain & margin increase in ’12 with leadership products … enter next cycle with share & margin
GE Infrastructure Investor Meeting 09-27-12 73 Lighting profit drivers
Dynamics Actions
Incandescent phase out Restructuring initiative • 100 watt in 2012, 75 watt in 2013 • Supply chain footprint down (30)% • 40 & 60 watt scheduled for 2014 • Right-sizing SG&A functions
Rare earth inflation Price increases • Up 2,000% since 2010 • Multiple price actions in 2011 + 2012 • Rate of acceleration has stabilized • Strategic supply process
LED opportunity Winning globally • Global market 5x current by 2020 • Growing footprint & product portfolio • Shift to systems focus • Scalable platforms
Managing through a tough environment
GE Infrastructure Investor Meeting 09-27-12 74 Growing a $1B LED franchise ($ in millions) GE Lighting LED revenue Trusted advisor
++% CAGR ~3-4X
Hospitality
Office
Retail • Winning infrastructure projects globally $0.3B … best-in-class scalable platform • 50-75% energy savings with 1-3 year paybacks Roadway • Enhanced safety and security – integrated LED systems and controls 2012E 2015F • Productivity and annual maintenance savings GE Infrastructure Investor Meeting 09-27-12 75 Driving margins
6% +2x 7%+
3.5%
2007/2008 2011 Normal cycle Current Normal cycle • Housing market ~40% of peak level • Stabilized product investment • Increased product investment … • Growing share and margins Mission 1 & LED • Strong cash generation and volume • Productivity/cost out offsets volume leverage pressure Driving Lighting to 10% & Appliances to 6% Generate CFOA 2X+ net income
GE Infrastructure Investor Meeting 09-27-12 76 H&BS outlook ($ in billions) Summary ++ + Some positive signs in housing market $8.5 Revenue Strategic execution ++ • Appliances product transformation ++ • Grow Intelligent Platforms Proficy $0.3 Software
Op. profit • GE Works … invest in U.S. manufacturing • Utilize Lean and drive value gap for margin expansion • Build $1B LED business with strong '11 '12E '13F margins and high share
Growing in a tough environment
GE Infrastructure Investor Meeting 09-27-12 77 Transportation Business overview
Locomotive & services Mining • Leading diesel locomotive • Newly established GE vertical producer • Wheel drive systems • Engine, propulsion & controls • Parts & upgrades • Parts & services • Underground equipment • Diagnostics and monitoring ~$3.5B/~72% ~$0.7B/~15%
Train management & optimization Adjacent technologies
• Fuel & velocity efficiency • DurathonTM battery
• Railroad safety & compliance • Medium-speed diesel engines
• Transportation management • 1.2-3MW diesel generators
• Planning optimization • AC & DC drill motors
~$0.5B/~10% ~$0.1B/~3%
GE Infrastructure Investor Meeting 09-27-12 79 Environment Market environment Selected competitors
Strategic imperatives
1 Globalize locomotive platform … differentiate with technology
2 Grow services business with data & software
3 Capitalize on energy storage technology & wins
4 Grow GE Mining platform
5 Drive margin accretion … simplification & productivity
GE Infrastructure Investor Meeting 09-27-12 80 Tier 4 locomotive rollout
Tier 4 required >75% emissions reduction • GE solution does not require urea • Fuel efficiency will be maintained
1st prototype unveiled in August • Engine tests continue to show positive results • Begin road testing later this year
On track for 1/1/2015 production • 6 prototypes to run in 2013 • 30 to sell for customer tests in 2014
Creating value for our customers with innovative technology
GE Infrastructure Investor Meeting 09-27-12 81 The next BIG thing … liquid natural gas Why LNG is important GE strategy
Diesel/LNG price Class 1’s spend ~$11B gap widening-a) per year on diesel fuel-a)
(a- Source: BCG study for GE
• Turns Tier 4 emissions change to a positive • Invest in parallel with Tier 4
• Applicable to new locomotives & installed fleet • Balance replacement ratio with flexibility
• Large cost savings opportunity … at 25% • Partner with Oil & Gas to provide utilization up to $3B for Class 1 railroads infrastructure solutions for the industry
~$1-$2B GE opportunity GE Infrastructure Investor Meeting 09-27-12 82 Expanding global partnerships 2005 2012
34% 48% 66% 52%
% of revenues Domestic Int’l. Strong partnerships in key regions
• Shifting from North American “rail” Kazakhstan Russia –TMD/KTZ • Long history … EVO MSA • EVO Engine JV in Astana business to a global transportation • Local Assembly equipment & solutions provider Korea Indo - Java • New relationship • 100 locos PT Inka
• Utilizing strategic in-country partnerships as platform for growth South Africa Australia • 143 locos • 40 year relationship
• Local assembly • Increasing local content, service Turkey/Euro Brazil/GETF capability and distribution networks • Euro platform • 60%+ local by mid ’13 • Strong customer alliances
GE Infrastructure Investor Meeting 09-27-12 83 Using data & software to create value
Asset optimization Operations optimization
On board … hundreds of sensors Transportation Fuel optimization & management operations planning
Off board … millions of fleet records
Yard planning Intermodal operations
Using big data analytics to … Using software and SaaS capability to …
Unscheduled and repeater shoppings Velocity and capacity In mission failures and train delay hours Operating costs … less fuel and dwell time
5 pts. in asset efficiency = ~$100MM opportunity
GE Infrastructure Investor Meeting 09-27-12 84 GE Mining Well positioned in mining today Why we like underground mining Total GE revenue ++ Diesel powered ~$2B scoop
Battery powered shield hauler
2011 2015F Direct to mine Off-highway vehicles Acquired-a) product portfolio well positioned to compete globally … GE brings instant value • Bringing together the • A leader in propulsion capabilities of “One GE” systems technology Transform with existing GE technology
System + Motors integration Advanced drives Energy storage Expand geographically … new service models Great fit with GE capabilities … expect to grow over time through organic development & niche acquisitions GE Infrastructure Investor Meeting 09-27-12 85 (a- Fairchild closed; Industrea expected to close 4Q’12 Energy storage, reinvented DurathonTM technology advantages Growth opportunity
High-energy Long life density
Telecom Grid Renewables Off-grid cell towers Application Integration & building Energy management Reduced demand 30-60% diesel fuel Value Charges, grid reduction stabilization Temperature Eco independent friendly $570M space Opportunity $1B+ space
Lower total cost of ownership vs. lead acid Signed LOI for ~200k cells • ~10x life cycle ... no maintenance required … • Increasing backlog … ramping cell production 50% footprint & weight … ~4x energy density capacity in 2013 Potential for a $1B business by 2020 GE Infrastructure Investor Meeting 09-27-12 86 Driving margin Key drivers
+ Simplification • Simplify organizational structure ++ • Support international growth efficiently 15.5% Value gap • Execute material deflation • Commodity & labor based escalation
Product cost • Factory productivity improvements • Sourcing rigor … reduce sole suppliers
Services margins • Improving services productivity '11 '12E '13F • Driving analytics & optimization – Services 2.0 Growing margins while investing in new technology and capacity GE Infrastructure Investor Meeting 09-27-12 87 Transportation outlook ($ in billions) Summary + ++ $4.9 Long-term macro trends remain favorable Revenue for locomotives & global mining ++ Strategic execution ++ • Developing next-generation $0.8 technology • Creating value for our customers with Op. profit software & optimization • Expanding global footprint • Driving cost out • Investing in mining, energy storage & '11 '12E '13F fuel efficiency
Attractive financial outlook
GE Infrastructure Investor Meeting 09-27-12 88 Power & Water Announced yesterday… Launched FlexEfficiency* portfolio for 60Hz The broadest portfolio of advanced gas turbines in the industry
Example: 7F 7-series
Technology positioning for the next decade
GE Infrastructure Investor Meeting 09-27-12 90
*Trademark of General Electric Company Diverse technology & service solutions From power generation To broad portfolio of solutions 2001 2011
Products Gas PG services CC steam Aero Nuclear Gas PG CC Aero Nuclear Water Renew. Gas services steam engines Revenue $18B $26B
% outside U.S. ~40% ~65%
% services ~20% ~50%
% of world’s electricity ~25%
Expanded offerings to address diverse segments
GE Infrastructure Investor Meeting 09-27-12 91 Environment Selected competitors More Renewables Distributed gas shift power
Strategic imperatives Increasing Data-driven Water globalization services reuse Manage through wind cycle Product vitality … +15 pts. over last 2 years Services growth … ~70,000 installed base Productivity … execute cost actions Build out adjacencies Global growth Shifting environment … outperforming competition
GE Infrastructure Investor Meeting 09-27-12 92 Gas power Global gas power Themes GW 1,600 Gas pricing and accessibility 1,300 Power generation shift 1,100 Increased utilization Growth will be in developing regions 425 Differing customer needs … size, flexibility, baseload Short-cycle installation 2000 Today 2015 2020 % total GW Implications - World 12% 20% 21% ~22% - Ex. China 13% 24% 25% ~28% Gas GW growth shipped from GE
Est. GE 40-50% 40-50% 40-50% 40-50% Service business growth … installed base HDGT share + NPI Upside potential … China, U.S., Africa
GE Infrastructure Investor Meeting 09-27-12 93 Technology investment Programs spend 300 new launches worth $16B in the last 3 years 3X new $1.4B patents Advanced Hot FlexEfficiencyTM 1.6-100 Gas Path 50 $0.9B $2.6B $700MM $400MM Sales Commitments Commitments
'07 '11 World’s most World-class World record efficient efficiency, for flexible wind turbine* efficiency Equipment product vitality … 49% in ’11 flexibility & maintenance interval
Increased R&D investment paying off
* Capacity factor @ 7.5 m/s GE Infrastructure Investor Meeting 09-27-12 94 Positioned for gas generation “Large block” >300MW B/E-class 7F/9F 9-series Under development
Aero
7F/9F 7-series “FlexEfficiency*” 1MW 7F/9F 5-series
Portfolio differentiators
6F-class Broadest range … 1-300MW+ Most efficient … >61%* PG 5/10 Most flexible … >100MW/min** Recip engines Most fuel-diverse† Low emissions††
Largest land-based gas turbine installed base … broadest portfolio in industry
* At baseload with high partload efficiency … 7F 7-series in 2x1 combined cycle configuration with SCR and CO catalyst ** 7F 7-series in 2x1 combined cycle configuration with SCR and CO catalyst † Natural gas/distillate/HFO/low BTU gas GE Infrastructure Investor Meeting 09-27-12 95 † † 2 ppm NOx & CO down to 14% plant load Source: McCoy Power Reports (MW basis)
*Trademark of General Electric Company Managing through the wind cycle
Executing on ’12 … PTC expires in ’13 GE Wind strategy Units sold ++ Right business model … Lean cost structure
Technology leadership … ~2,000 1.6-100 world’s most efficient* ~2,000 -- -- Accelerating services growth … 30GW+ fleet (21,000+ units installed)
Diversifying globally … ’11 ’12E ’13F ~70% of ’12 deals outside U.S.
~$40B GE revenue since ’03 … differentiated GE technology High-return business, PTC expiration driving $(.03) EPS in ’13
GE Infrastructure Investor Meeting 09-27-12 96
* Capacity factor @ 7.5 m/s Growing globally Demographics … natural resources … modernization Russia Latin America Africa (Orders) $2.7B $1.1B $1.2B $0.6B $0.5B
$0.1B
'09 '11 '09 '11 '09 '11 ~50% of electricity from gas Large new gas/oil reserves Population growth … adding 20-30GW by ’20 & urbanization 18% of electricity from gas & Modernization of installed wind by ’15 … +5 pts. vs. ’09 Emergency power … base … district heating Algeria/Angola Growth from wind/GT/ Government push for gas engines 10GW Nigerian MOU efficiency
Capturing pockets of growth … building local capability
GE Infrastructure Investor Meeting 09-27-12 97 Services growth CSA backlog ($ in billions) Imperatives +/= 6% ~$51 CAGR Expanded CSA offerings for more customer value $34 Technology upgrades … output, efficiency, lower emissions Customer-focused productivity … extended intervals
'06 '12E '13E Enhancing local capability … ~$250MM investment Gas turbine utilization W. Europe … Spain/Italy driven E. Europe … CIS & Turkey United States … low NG price, ROW … Asia & Middle East growing Saudi Arabia Brazil Singapore
Long-term growth engine GE Infrastructure Investor Meeting 09-27-12 98 Services 2.0 (Revenue $’s) Gas Wind
Output Material Material … blade extensions and flexibility enhancements • 7m blade inserts, 7FA energy ~20% • Low wind speeds Enhanced Upgrades compressors
$260MM opportunity Asset Enabled through the Enterprise optimization Industrial Internet optimization Software … utilizing controls to value • WindBOOST: U.S. utility example 1.5 1.6MW, AGP.04 upgrades ~$500MM opportunity energy ~4% Flex combustor = • Turbine Enhanced output ~$2B customer value optimization: energy ~3% $110MM opportunity
Growth through material and analytics
GE Infrastructure Investor Meeting 09-27-12 99 Distributed energy Power generated at the point of use Growth drivers Cogeneration … gas engines • Energy efficiency • 10 MW for London Olympics • GDP growth in weak grid • Temporary power to avoid • Reducing emissions by blackouts $40B ~13,000 tons CO2/yr. opportunity Technology Emergency power … Aero ~$300MM • Meeting the urgent power needs for Algeria, Angola & Bolivia Waukesha • 300 MW ... 13x TM2500, power Jenbacher up in 90 days GE Aeroderivative Energy China … ~$110MM • 275MW in China • GE – Huadian JV signed Aeroderivatives • Energy efficiency for industrial customers
Capturing growth beyond the grid GE Infrastructure Investor Meeting 09-27-12 100 Industrial water reuse Drivers Wins
• Water scarcity and regulation driving reuse Coal seam/shale gas QGC projects • Major operators looking to: Maximize sustainability $170MM Stay ahead of potential regulations sales Current disposal options - finite/limited
GE technology Heavy oils Leader in water evaporators LEAPmbr: 30% energy cost savings Won last 6 awarded Boosts productivity 15% $150MM orders Mobile evaporator Relocatable water treatment plant Drives logistics productivity Refining Ultrafiltration & MBR AcquaSel applications excellence Reduces wastewater 10x-50x $50MM Reduces energy consumption orders
Gaining momentum to form a more valuable Water business
GE Infrastructure Investor Meeting 09-27-12 101 Driving margin
Key drivers Simplification 20% + - • Lowering cost structure … fewer layers • Driving SG&A % of sales
Product cost • Product cost through material productivity • Multi-modal manufacturing in low-cost countries
Value gap • Price stabilizing in Thermal & Wind • Driving deflation … fewer sole suppliers
'11 '12E '13F Service margins • Drive customer value through technology & analytics • Execute on services fundamentals
High-return business … margin expansion in ’13
GE Infrastructure Investor Meeting 09-27-12 102 Power & Water outlook ($ in billions) ++ - Summary $26 Revenue ++ ex. Wind Positioning for growth in dynamic $5.0 + = environment Strategic execution • A leading technology and products Op. profit manufacturer • Diverse solutions … broad and deep • Globalization … world-class and ’11 ’12E ’13E flexible supply chain ’13E op. profit dynamics • Strong services business … Renewables – PG services + large installed base Thermal – Distributed power + (Price in backlog) Cost out + • Simplification for speed & cost
Delivering through the cycles GE Infrastructure Investor Meeting 09-27-12 103 Summary Thoughts on future Operating EPS growth Environment Priorities Cost out ++ -a) ++ 1.38 1 Hit cost targets 1.13 2 Disciplined capital allocation
3 Execute on NPI '10 '11 '12E '13F
Investor interests Update 4 Sustain strong 1) Improving margins Solid momentum/restructure momentum in growth markets 2) Low natural gas price Service … well positioned 3) Manage risk/Europe Lots of cash/restructure 5 Services expansion 4) Size of GE Capital Smaller; 30-40% of earnings 6 Grow Industrial > Capital 5) Capital allocation Balanced
(a- Excluding the impact of the preferred shares redemption
GE Infrastructure Investor Meeting 09-27-12 105 Leading GE
Good businesses + Enterprise strength
Aviation Winning in the market with Substantial cash superior execution opportunity
Oil & Gas A fast growth GE franchise in the market “sweet spots” Very valuable portfolio
Healthcare Broad diagnostics leader & Growth engines > peers a long-term winner − Technology Energy Potential upside & important − Services Management technology − Growth markets
H&BS Wins with housing growth Positioned for margin Transportation Very strong platform with expansion global & adjacency tailwinds Safer investment in Power & Water Diversified portfolio with volatile world winning technology
GE Infrastructure Investor Meeting 09-27-12 106 Q&A
GE Infrastructure Investor Meeting 09-27-12 107