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JP Morgan Conference
Lloyd G. TrotterVice Chairman, GEPresident & CEO, GE Industrial
June 11, 2007
““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 often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties which could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest rates and commodity prices; strategic actions, including dispositions; future integration of acquired businesses; future financial performance of major industries which we serve, including, without limitation, the air and rail transportation, energy generation, media, real estate and healthcare industries; unanticipated loss development in our insurance businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory 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.””
JRI Security Analyst 12-12-06/2
Agenda
• GE Strategy: Invest and Deliver
• GE Industrial: Positioned to Win
• Delivering Profitable Growth
• Summary
Invest & Deliver
JRI Security Analyst 12-12-06/4
Invest & deliver
Revenue Earnings Returns
2-3XGDP
10%+
20%
Invest in leadership businesses
Growthas a
process
Reliable execution &
financial discipline
Great people &
team
Safe & reliable growth company
“Built for the future”
+ Infrastructure technology + Demographics+ Developing markets + Value from liquidity+ Digital connections + Scarcity/environmental
JRI Security Analyst 12-12-06/5
Leadership businesses
IndustrialHealthcare NBCUInfrastructureCommercial
FinanceConsumer Finance
35% 20% 15% 10% 10% 10%
~$163B revenue
~$20-21Bnet income
~$25B cash from operations
~320K employees
% of earnings
Revenue $B $47.4 $23.8 $21.8 $16.6 $33.5 $16.2
OP $B $9.1 $5.0 $3.5 $3.1 $2.7 $2.9
’06 Growth 13% 15% 12% 9% 3% 10%
ROTC / ROE 29% 25% 28% 13% 13% 10%
GE Industrial: Repositioned to Win
JRI Security Analyst 12-12-06/7
Infrastructure
Commercial FinancialServices
NBCUniversal Healthcare
ConsumerFinanceIndustrial
GE Industrial
Consumer & Industrial … lighting / appliances / industrial products
Plastics … engineered thermoplastics
Security … commercial / industrial protection technology
Equipment Services … full service transportation equipmentleasing & rental
Sensing / Inspection Technologies … sensors / non-destructive testing & inspection technology
GE Fanuc … automation systems / devices
JRI Security Analyst 12-12-06/8
GE Industrial: Repositioned to win
• Product / Brand leadership
• Consistent performance
• Strong Cash generation
• Capitalize on Brand• Invest in Technology• Invest in Growth Areas
Microwave Data SystemsGELCore
• Dispose Non-CoreGE Supply InstrumentationMV ANSI Switchgear
• Lower Growth, lower margins
• Results volatile, cyclical• Stronger synergies with external buyers
Sold
BusinessAttributes
Strategy
• Growth Industries• High Tech Content• High Margins
• Invest in Technology• Invest in Growth Areas
Embedded• Partner with key players
HomelandCommerceguard
SecuritySensing & Inspection
GE Fanuc
PlasticsAdvanced Materials
Consumer & Industrial
Equipment Services
• Domain expertise• Solutions Oriented• Potential for high ROEs
• Leverage Domain expertise
Terion• Improve Asset Quality / Defleet
• Divest Non-CoreMod US
Brand Technology Domain
JRI Security Analyst 12-12-06/9
PlasticsTransaction
� Sell to SABIC
� Price: $11.6B … 10.3X ’07 EBITDA
� Targeted close: 3Q’07
Creates a modern plastics leader
� Gain $1.5B � restructuring� Cash $9B � buyback� Expand relationships in
Saudi Arabia/Middle East
Great deal: investors & customers & GE team
GEP
SABIC
Global technology+
Marketing/distribution
Supply chain+
Cost/availability
Win: customers & employees
� Accounted as Discontinued Operations 2Q’07
� No change to earnings guidance
Benefits Going forward
JRI Security Analyst 12-12-06/10
Smiths-GE Detection JV
• CT and trace detection products• Primarily focused on aviation
applications (USG)
• Integrated provider of detection solutions
… broad offering with global reach
• Service platform synergies
• X-ray, trace, and bio-detection products• Focus on aviation, commercial, first
responder, military, and cargo applications
Trace22%
X-ray21%Cargo
7%
Chem-bio20%
CT9%
Service21%
($ billions)
� Stronger & more diversified business� Significant synergies� GE committed to Security business long term
GE benefits
$1.1
Revenues
$B
GE
Smiths
+
=
$0.3
$0.8
JRI Security Analyst 12-12-06/11
GE Fanuc
Radstone(11/’06)
Condor
(3/’06)
SBS
(6/’06)
Automation: Embedded Platform($ in millions) Market
Revenue US/Global Segment Growth
$120 80%/20% Military 6%Commercial 8%
$25 80/20 Aviation 6%
Military 6%$180 55/45 Communication 9%
Commercial 8%
$120 55/45 Military 6%Aero 6%
+
+
+
Transformed GE Automation Business
JRI Security Analyst 12-12-06/12
Equipment Services
Yesterday
Reposition Core Acquire/ grow
Asset quality
• Defleeting old assets
• Expanded maintenance capability
• Further strengthened risk process
Business sale
•Mod US
• Other non core business sales in North America and Europe
Build
• Terion – 1Q’07
• Security
• Cold Chain
• Logistics
• Port equipment management
• IM hub services
Emerging Markets
• India & China railcar supply
New Capex
• Service products @ 40%+ margin
• Lease products @ ~20% ROE
Equipment leasing
Transportsolutionsprovider
JRI Security Analyst 12-12-06/13
Consumer & Industrial
’06 Portfolio Actions:
+ Acquired - Microwave Data Systems
/Invested in: - GELcore / Lumination
- Sold: - Instrumentation Services
- MV ANSI Switchgear
- GE Supply
Repositioned Portfolio Delivers
• Experiencing some challenging industry dynamics
• Continuing to invest in new products with focus on energy leadership
• Driving localization/growth in emerging markets
• Focused on minimizing inflation impact through pricing and cost-out
• On track to deliver double-digit performance through ‘07
Comments
Revenues
Segmentprofit
$1.1
$14~$15
$1.4
’06A ’07EOP% 8% 10%ROTC 32% 35%
($B)
JRI Security Analyst 12-12-06/14
'06 '07E
Industrial – ex. dispositions & Plastics($ in billions)
Revenues
Segmentprofit
$1.8
25-30%$23
~$25
Segment 8% ~9%profit %ROTC +2 pts
Focus on growth, returns& redeployment
Businesses in good shape
C&I Brand 20+% + High-end NPI
+ Global factory
Security/ Technology 15-20 + High-end NPI
Sensing/ + Global growth
Controls
Equipment Domain 20+ + High utilization
Services expertise + Asset mgmt.
V%Value
Delivering Profitable Growth
JRI Security Analyst 12-12-06/16
Profitable Organic Growth
• Technology Leadership
• Brand Management
• Capitalizing on GE / One GE
• Commercial Excellence
• Ecomagination
• Global Growth
Revenue
’07E ’10E
~$30
~$25
Equipment
Security
S&I
Automation
’06 Act
$23
C&I
Org’06-’10
’10 RevCAGR
$1.3 9%
1.4 9%
1.8 8%
9.6 8%
$15.8 3%
Drivers
2~3x GDP Across the Business
JRI Security Analyst 12-12-06/17
Technology … Devices to Solutions
Breakthrough Best in Class Designs from• Multi-modality Instruments
…best in class, ease of use
• Applications focused
…simple, easy, and accurate
• Platform standardization
…modular designs, CUIs
• Platform rationalization
…low cost design and build
Measure
Analyze
Inspect
Control
Optimize
Best in Class Instrumentationand Identification
Data Acquisition and Imaging
Automatic Defect Reorganization , Situational Awareness, Report & Archive
Leverage Data to Improve Process
Discrete & Continuous Process
Sensing & Inspection
Fanuc EquipmentServices
Security
Tire PSI
location
Temp
ID
JRI Security Analyst 12-12-06/18
Investing for leadership in Appliances
2007 MY Celaya
MonogramDD Cooktop
Dual CavityRange
Monogram Upgrade
Bottom Freezer
Comm. Kitchen
Wall-oven Upgrade
FSE Upgrade
40% increase in spending since ‘04
JRI Security Analyst 12-12-06/19
13%savings
Brand management & Global Sourcing
Profile ASP $687 $705 $727
Monogram ASP $1,321 $1,343 $1,364
OP% 9.8 10.3 12.2
ROTC% 40 61 92
’04 ‘05
High-end sales ($B)
China sourcing
$1.8$1.6
'04 '05
$400
U.S. ChinaCost to produce
$460
’06
$2.0
'06
JRI Security Analyst 12-12-06/20
The Monogram Experience Center
JRI Security Analyst 12-12-06/21
ecomaginationsm
Global industry sales (’05-’09)
CFL+16%
INC(5)%
35% AAG
R
GE CFL sales growth (’04-’06)
‘04 ‘06
Lighting Consumers want long life, energy savings, eco benefits…GE Industrial delivers
JRI Security Analyst 12-12-06/22
Fencing Gymnasium, National Conference CenterIBC, MPCElectrical DistributionSecurity
National StadiumAthletics, Football, Opening & Closing CeremoniesElectrical DistributionLightingSecurity
National Aquatics CenterSwimming, Diving, Water Polo, Synch SwimmingLighting
Laoshan VelodromeCycling (track)Electrical DistributionSecurity
Beijing Shooting Range Hall10-meter, 25-meter, 50-meter Electrical DistributionLighting
National Indoor StadiumGymnastics, Trampoline, HandballLightingSecurity
Olympic Sports Center StadiumFootball,Modern Pentathlon (running and equestrian)Lighting
Workers' StadiumFootballElectrical ComponentsSecurity
Capital Indoor StadiumIndoor VolleyballLightingSecurity
National Tennis CenterLightingSecurity
Global Growth :Olympics StadiumsTop Ten Results
JRI Security Analyst 12-12-06/23
Integrating & rationalizing cost …
� Simplifying P&Ls, organization,
legal entities… Security, C&I
� Driving Integration… Fanuc,
Sensing & Inspection
� Establishing COEs… Equipment
Services
� Driving total G&A% to lowest
cost model … C&I, Security,
Sensing & Inspection
5.3%
'06
60 bps reduction in G&A %
‘07E
4.7%
IndustrialG&A % of Revenue
JRI Security Analyst 12-12-06/24
Leveraging emerging market growth
• $700Bn in investments ’08-’12
• Construction industry continuing to drive momentum
Saadiyat Island $27B
Middle East
• India and China double-digit GDP growth
• Mega projects dominating industrial growth
Asia
• Panama Canal and adjacent opportunities
• Strong residential and commercial growth fueling IEC opportunities
Latin America
Macau Casinos $750MM Panama Canal $75MM
Summary
JRI Security Analyst 12-12-06/26
'06 '07E
Industrial – ex. dispositions & Plastics($ in billions)
Revenues
Segmentprofit
$1.8
25-30%$23
~$25
Focus on growth, returns& redeployment
Businesses in good shape
C&I Brand 20+% + High-end NPI
+ Global factory
Security/ Technology 15-20 + High-end NPI
Sensing/ + Global growth
Controls
Equipment Domain 20+ + High utilization
Services expertise + Asset mgmt.
V%Value
Segment 8% ~9%profit %ROTC +2 pts
JRI Security Analyst 12-12-06/27
'07E
'07E
'06 '07E '06 '07E
GE Key performance metrics:’07 outlook
Orders Revenues Assets
10+%~8%
+14%
Growth (V%) EPS (V%)
Returns Margins Cash
~$24B18.4% ~19.0% Ind’l.+10% V
G
G G
15.5% ~16.5%
Segment op. profit %ROTC CFOA
Solid performance
+10-12%
(Continuing operations)
G
+1 pt.
� Dividend $12B
� Buyback $7-8B
G
Tax ratein line
with ’06