Embed Size (px)
Citation preview
October 22, 2012
To the Investment Community,
On September 27, Chairman and CEO, Jeff Immelt, and the Infrastructure leadership team hosted an Investor Meeting to discuss GE’s Industrial businesses. Mr. Immelt highlighted GE’s strength as a premier infrastructure company and emphasized four aspects of GE’s strategic imperative: leadership in technology, service expansion, investment in growth markets, and competitive cost structure. The president and CEOs of each business unit followed with remarks on performance and outlook.
David Joyce, president and CEO, GE Aviation, remarked on Aviation’s positive outlook underscoring the need for strategic execution in technology, service growth, and simplification. Dan Heintzelman, president and CEO, GE Oil & Gas, stressed that Oil & Gas is well positioned in resource-rich and emerging countries as a technology leader. John Dineen, president and CEO, GE Healthcare, highlighted GE Healthcare’s standing as a broad diagnostics leader and a long-term winner in a changing industry. Dan Janki, president and CEO, GE Energy Management, described Energy Management’s roadmap to profitability through Power Conversion, product cost, simplification, and services growth. Charlene Begley, president and CEO, GE H&BS, spoke of positive signs in the housing market and future margin improvement with continued investment. Lorenzo Simonelli, president and CEO, GE Transportation, remarked on Transportation’s attractive financial outlook driven by a strong platform with global and adjacency tailwinds. Steve Bolze, president and CEO, GE Power & Water, emphasized that Power & Water is positioned for growth with leading technology and diverse solutions. Please click here to access the event.
September 2012 Investor Update
Business HighlightsIndustrial Businesses page 3
GE Capital page 6
Other Company News page 7
Investor Events page 7
ContactTrevor A. Schauenberg Vice President Corporate Investor Communications
3135 Easton Turnpike Fairfield, CT 06828 USA
T 203 373 2424 F 203 373 2071 [email protected]
On September 5, Bill Ruh, vice president, Global Software Center, presented at the Vertical Research Partners Industrial Conference 2012. Mr. Ruh spoke about the value of data and analytics in driving customer efficiency, increasing productivity, and growing value-added services. He highlighted GE-specific solutions such as Agile Trac and Expert-On-Alert. Please click here to access the presentation.
On September 13, Mark Little, senior vice president of GE Global Research, presented at the Morgan Stanley Industrials & Autos Conference. Mr. Little described technology as an enterprise advantage at GE. He spoke about the need to innovate differently in a global environment and to infuse technology into manufacturing. Please click here to access the presentation.
On September 19, Dan Henson, president and CEO, GE Capital Americas, presented at the Citi Global Industrials Conference. Mr. Henson provided an overview of GE Capital and CLL Americas and focused on the transformation of the business into a specialty finance company. Please click here to access the presentation.
As always, for all presentations, news and other helpful information please visit our investor website at http://www.ge.com/investors.
Please see “GE Reports” to keep informed about the latest company developments. We will update it daily to share information and our perspectives on GE activities around the world. Please visit our website at http://www.gereports.com/.
Regards,
Investor Update continued
Results are preliminary and unaudited.
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 our US mortgage business, 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.”
“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.”
ENERGY INFRASTRUCTURE
• On September 26, GE Power & Water unveiled its new FlexEfficiency 60 power generation portfolio engineered to harness natural gas and enable greater use of renewable energy. The FlexEfficiency 60 portfolio combines record-breaking efficiency, which will reduce emissions and save money, along with unprecedented flexibility, which will enable utilities to deliver power quickly when it is needed and to ramp down when it is not, balancing the grid cost-effectively. GE also announced that the Company has secured nearly $1.2 billion in commitments for FlexEfficiency 60 technology for projects in the United States, Saudi Arabia and Japan, demonstrating strong international demand for technology that can provide highly efficient baseload power and pair natural gas with renewables. Read the press release.
• On September 18 at the 2012 Rio Oil & Gas, GE Oil & Gas and Brazilian energy company Petrobras signed the world’s largest subsea wellhead production contract, worth nearly $1.1 billion. “This new agreement between two of the world’s largest companies shows our commitment to collaborate in the development of the oil and gas sector in Brazil,” said João Geraldo Ferreira, president and CEO of GE Oil & Gas for Latin America. “In recent years our investments and efforts have been focused on preparing our company to support market growth and to be ready for contracts of this size, developing the entire supply chain. We want to grow with the country.” Read the press release.
• On September 4, GE announced it will supply five Frame 6FA gas turbine-generators for three power plants in China’s Zhejiang Province that will help to meet the province’s strong power needs. Designed for high efficiency and low emissions, all three projects support the provincial government’s initiative to develop gas turbine cogeneration plants to replace less efficient coal-fired boilers in order to reduce environmental impact and increase energy efficiency in the region. Read the press release.
• GE Power Conversion announced it was selected by Keppel Offshore & Marine Ltd, a leading designer and builder of high-performance mobile offshore rigs, to supply the electrical power generation, thruster and drilling drive technology for six new semisubmersible drilling rigs for Brazil. The contract, in excess of $120 million, supports Brazil’s national oil company, Petrobras’, pre-salt drilling program with its advanced power and propulsion technology. Read the press release.
• On September 20, GE Digital Energy announced it will work with Electric Transmission Texas, LLC (ETT) on the largest series compensation project in the United States. ETT, a joint venture between subsidiaries of American Electric Power and MidAmerican Energy Holdings Company, is a regulated transmission-only utility which builds, owns and operates transmission assets as a regulated utility in Texas. Under the terms of the multi-million dollar contract, GE will be installing eight series compensation banks at four different facilities owned by ETT in West and Central Texas. The project will employ hundreds of U.S. workers in engineering, manufacturing (U.S. factories), project management and construction. Read the press release.
• GE Energy announced the completion of its acquisition of Naxys, a Norway-based supplier of leak detection and condition monitoring sensors for the subsea sector. The acquisition further expands GE’s portfolio of monitoring and sensing solutions and will be part of the Company’s Measurement & Control business. “In addition to increasing our subsea portfolio, the acquisition further builds our presence in Norway and the North Sea region,” said Brian Palmer, president and CEO of GE Measurement & Control and vice president of GE Energy. “Naxys, which shares our commitment to innovation, has developed world-class sensor expertise and technology for subsea applications.” Read the press release.
Industrial Businesses
September 2012 Investor Update 3
AVIATION• The United States Air Force (USAF) has selected GE Aviation for negotiations to mature a suite
of technologies to include variable cycle technology for the Adaptive Engine Technology Development (AETD) program. AETD will enable GE to address the USAFs propulsion needs for improved fuel burn to provide combat aircraft in the beyond-2020 timeframe with significantly enhanced range, performance and thermal management capabilities. Development work will be conducted at GE Aviation’s headquarters in Evendale, Ohio. Once negotiations are complete and the contract is awarded, GE will share the costs of the program with the Air Force. Read the press release.
• GE Aviation was awarded a three-year, $105 million Performance Based Logistics (PBL) contract by the U.S. Navy to provide support for T700 helicopter engines. This is the third T700 PBL with Naval Supply Systems Command to support the Navy’s T700-401/-401C compressor rotors and GG rotors. “The PBL concept and the partnership between GE and the Navy have proven to be very successful,” said Barry Burke, GE Turboshaft/Turboprop services director. “This new deal will allow us to continue to demonstrate top-quality parts availability to ensure T700 engines have optimum performance and readiness.” Read the press release.
HEALTHCARE• GE Healthcare introduced KUBioTM, an innovative off-the-shelf, modular factory designed
to save manufacturers of biopharmaceuticals both time and money. KUBio’s pre-made modules, which are assembled at a customer’s chosen site to make a fully functional ready-to-run bioprocessing facility, are significantly faster to install than constructing a traditional factory. The modules are equipped with GE Healthcare’s world-class technologies for the start-to-finish manufacture of biopharmaceuticals. Read the press release.
• Advocate Health Care, one of the nation’s top health systems and the largest integrated health care system in the state of Illinois, and GE Healthcare, a national leader in low dose, high performance imaging, today announced a joint effort to help further reduce radiation dose in Computed Tomography (CT). The goal is to optimize care for patients needing imaging procedures and reduce radiation where possible without adversely impacting image quality. Read the press release.
TRANSPORTATION• GE Transportation unveiled its newest business unit, GE Mining, that will be headquartered
in Brisbane, Australia. The announcement came at MINExpo 2012 by Geoff Knox, CEO of GE Mining. GE recently acquired Fairchild International, which manufactures underground mining equipment, and is finalizing the acquisition of Australian-based Industrea Limited, a provider of safety and productivity-enhancing mining equipment and services. GE will reach a global customer base with enhanced products based on its clean propulsion systems, energy storage offering and world-class system integration capabilities. GE’s portfolio of products and services are uniquely positioned to maximize resources, drive efficiencies and help make the world work better, allowing mines to generate, distribute and convert power more efficiently and at a lower cost; manage water quality, usage and wastewater runoff more effectively; and improve productivity through more efficient transportation of materials and deployment of advanced software monitoring systems. Read the press release.
September 2012 Investor Update 4
Industrial Businesses continued
• GE and Kazakhstan Temir Zholy (KTZ) announced they have signed a new landmark agreement to extend their partnership in Kazakhstan to produce passenger locomotives at the assembly plant in Astana, Kazakhstan. GE will deliver 110 of its EvolutionTM Series locomotive kits manufactured in Grove City and Erie, Pennsylvania, USA. In addition to GE’s Evolution locomotives for railroad customers, they will now produce GE’s Evolution passenger locomotives, the most technologically advanced diesel electric, heavy-haul locomotive modified for higher speed passenger service. Read the press release.
• GE Transportation’s Energy Storage business announced today $63 million in new Durathon battery orders since the business launched in July. In its first weeks of operation, the business secured 10 new telecom customer orders across several regions, including Africa, Asia, India and the U.S. – powering a total of more than 3,500 cell towers. The breakthrough battery provides reliable and cost-effective energy storage options for a broad range of global customers and is being produced at GE’s advanced manufacturing factory in Schenectady, New York. Read the press release.
HOME & BUSINESS SOLUTIONS• GE Lighting announced the Company will provide more than $200,000 in energy- and maintenance-
cost saving LED lighting systems for two Cleveland landmarks—the historic West Side Market and Cleveland’s Public Square—as part of a day-long GE Works celebration of its employees, heritage of innovation and Cleveland roots. Read the press release.
• GE Intelligent Platforms announced its HPEC Application Ready Platforms (HARP) product family at the IEEE HPEC Conference in Waltham, Massachusetts. These new systems respond to government and defense organization demands to acquire and deploy high performance, open architecture, embedded computing solutions at lower cost in shorter timeframes. They deliver application-ready, COTS (commercial off-the-shelf) platforms that can reduce development time from months to weeks or days. Read the press release.
September 2012 Investor Update 5
Industrial Businesses continued
• GE Capital, Corporate Retail Finance announced it is co-collateral agent on a $1.65 billion asset-based credit facility for SUPERVALU INC., a leading national grocery and pharmacy retailer based in Eden Prairie, Minnesota. The loan will be used for working capital needs and to refinance existing debt. Read the press release.
• GE Capital, Corporate Finance announced it is administrative agent on a $75 million asset-based credit facility for Acme Lift Company, LLC, a leading wholesale rental company for aerial work platform equipment based in Arizona. The loan will be used to refinance existing debt and support future growth. Read the press release.
• GE Capital, Canada’s Franchise Finance business announced that it has provided Imvescor Restaurant Group Inc. (IRG) with a $37.1 million term loan. IRG will use the funds to refinance all of its outstanding secured debt facilities, including senior loans from GE Capital. The new debt structure also provides IRG with additional flexibility to pay down its outstanding subordinated debt. Headquartered in Moncton, New Brunswick, IRG owns franchised and corporate restaurants throughout Canada under four brands: Pizza Delight®, Mikes®, Scores®, and Bâton Rouge®. Read the press release.
• GE Capital, Canada’s Franchise Finance business announced that it has provided a $20 million senior term loan facility to Temple Real Estate Investment Trust to support the acquisition of the Hilton Garden Inn located in West Edmonton, Alberta. The six-story, 160-room hotel is located near Edmonton’s West End Business District as well as the West Edmonton Mall, the city’s top tourist destination. Read the press release.
• GE Capital, Franchise Finance recently provided $15 million to Summit Hotel Properties, Inc. The funding provides $9.75 million for a Courtyard® by Marriott and $5.25 million for a Springhill Suites® by Marriott to refinance existing debt on the two hotels. Read the press release.
• GE Capital Aviation Services (GECAS) announced it has signed agreements to lease nine Airbus A319 aircraft to Allegiant Air to expand the carrier’s current fleet. All nine aircraft are powered with CFM56-5B engines. The first aircraft is scheduled for delivery to Allegiant in November 2012, with the remaining scheduled for delivery through 2015. Read the press release.
• GE Capital Fleet Services announced it has identified $1 billion in customer cost savings over the past four years. Through its cost savings identification program, GE Capital Fleet Services analyzes customers’ fleets to help maximize efficiency and determine opportunities for cost savings. Read the press release.
• GE Capital Aviation Services Limited (GECAS) announced that it has delivered a new leased ATR 72-600 aircraft to Azul Linhas Aéreas Brasileiras S/A as part of a purchase and leaseback transaction. The aircraft is the first of five new ATR72-600s GECAS will lease to Azul to expand the airline’s fleet. The remaining four deliveries are scheduled through April 2013. Read the press release.
September 2012 Investor Update 6
GE Capital
CITIZENSHIP, ECOMAGINATIONSM, HEALTHYMAGINATION • Teaming up with WaterStep, a Louisville, Kentucky-based organization that works to provide solutions to the root causes
of waterborne illness through training and readily-available technology, and Louisville Water Company, GE employees and retirees have been volunteering their time to help design a water purification system that is more affordable, more compact and easier to install in developing countries, while being manufactured with components and tools typically available at any hardware store. Read the press release.
• GE, in collaboration with Appliance Recycling Centers of America (ARCA), recently reached a milestone of 100,000 refrigerators and freezers recycled through North America’s only UNTHA Recycling Technology System. ARCA’s machine, a unique 40-foot-tall engineering marvel, recovers approximately 95 percent of the insulating foam in refrigerators and freezers, reducing landfill waste and greenhouse gas and ozone depleting substance emissions. Read the press release.
• GE‘s ecomagination-qualified SG Series Uninterruptable Power Supply (UPS) with eBoost technology received the Environmental Protection Agency’s ENERGY STARTM certification. The certification includes the SG Series 300-750 kVA modules and is the first three-phase UPS in the industry to receive this recognition. The SG Series UPS provides reliable back-up power to mission critical facilities like data centers, hospitals and financial institutions. eBoost, GE’s patented multi-mode operation, offers users energy efficiency up to 99%. Read the press release.
• First-year medical students at Mount Sinai School of Medicine will be introduced to GE Healthcare’s digital-age ultrasound device that can visualize inside the body, and fit directly into the pockets of their brand new white coats. The visualization tool is a handheld ultrasound device called Vscan, and is roughly the footprint of a smartphone. A total of 72 pocket-sized devices will be provided for use in a research study and distributed to teams of first year medical school students that make up the 140-member Class of 2016. The objective of the study is to demonstrate that handheld imaging technology can contribute to medical education at all levels of instruction and learning. Read the press release.
September 2012 Investor Update 7
Other Company News
RECENT INVESTOR EVENTSVisit the Events & Presentations section of our investor website to view the presentations.- September 5, 2012: Vertical Research Partners Industrial Conference 2012.
Bill Ruh, Vice President, Global Software Center, presented - September 13, 2012*: Morgan Stanley Industrials & Autos Conference.
Mark Little, Senior Vice President of GE Global Research, presented- September 20, 2012*: Citi Global Industrials Conference
Dan Henson, President and CEO, GE Capital Americas, presented- September 27, 2012*: GE Infrastructure Investor Meeting
Jeff Immelt, Chairman and CEO-GE, and the Infrastructure leadership team presented - October 19, 2012*: GE 3rd Quarter 2012 Earnings Webcast
UPCOMING INVESTOR EVENTS (SUBJECT TO CHANGE)- December 17, 2012**: GE Annual Outlook Investor Meeting
Jeff Immelt, Chairman and CEO-GE, will present* Webcast replays are retained on our website for a limited period of time.
**Meeting will be webcast.
