Brigid Tobin
Manager, Investor Relations
GE
201 High Ridge Road
Stamford, CT 06927
USA
T 203 357 4732
brigid.m.tobin@ge.com
July 17, 2015
Below is our fixed income investor relations update for the second quarter of 2015.
GE Chairman and CEO Jeff Immelt said “GE had a strong second quarter, with good industrial organic
growth and exceptional cash generation. The environment remains one of slow growth and volatility,
particularly in growth markets, while the U.S. is gradually improving. Our industrial businesses had another
quarter of strong EPS growth of 18% and orders up 8%. We continue to execute on our plan to exit GE
Capital, with $68B in dispositions announced this year, well more than halfway to our goal for 2015. We
are raising our 2015 industrial operating EPS guidance to $1.13-1.20, and are confirming GE Capital
verticals are on track for EPS of $0.15.”
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2Q Highlights – GE
2Q EPS for GE Industrials and verticals $0.31, +19%
Industrial segment profit +5%, organic +11% with 5 of 7 segments growing earnings (all segments up
organically)
Industrial segment revenue $26.9 billion, 0%, +5% organic
Industrial CFOA YTD $3.5B, +79%
Record backlog of $272B, +8% vs. 2Q’14
Orders +8%, +13% organic, with strong equipment orders in Aviation +37% and Power and Water +29%
Industrial segment operating profit margin 16.2%, +70bps from 2Q’14
2Q Highlights – GECC
• Net earnings for the Verticals $0.5B up 19% from 2Q’14 , performing well, on track for ~$0.15 EPS in 2015
• CLL held-for-sale charge of $4.3B included in expected $23B total GE Capital exit impact disclosed on
April 10th … CLL timing accelerated versus original plan
• Signed $68B of GE Capital dispositions, on track for goal of closing ~$100B by year-end
• Synchrony separation efforts on track , targeting share exchange for year end
• Ending net investment (continuing operations, excluding liquidity) was $179B at quarter end
• Estimated GECC Tier 1 common 11.4%-a) up from 10.6% at 1Q’15
• Solid liquidity and capital position
 $85B in liquid assets at quarter end (including $14B attributable to Synchrony)
 Commercial paper at $25B, down to $5B by year end.
See the charts on the following pages for additional details about our 2Q’15 earnings
(a- Basel 3 Tier 1 Common ratio estimated based on U.S. standardized transitional basis
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GE Capital Business Highlights
Milestone Aviation Group, a GE Capital Aviation Services company and the global leader in
helicopter leasing, and Airbus Helicopters, a division of Airbus Group, announced that
Milestone has increased its combined orders and options to a total of 28 H175s, the largest
order for Airbus’ new super-medium-lift twin-engine rotorcraft.
Renewable Energy Systems ("RES"), together with GE and Downer, announced a major contract
for the supply of 75 wind turbines to the 240MW Ararat Wind Farm in south-west Victoria. In
what will be the third largest wind farm in Australia, the $450 million project will be financed by
shareholders Partners Group, RES, OPTrust and GE.
GE Capital Aviation Services (GECAS), the aviation leasing and financing arm of GE,
announced at the 2015 Paris Air Show plans for continued growth with the launch of a new
freighter conversion program and sizeable orders for new aircraft and helicopters. These
announcements reflect a strategic move forward for GECAS as it continues to build upon its
diverse portfolio of aircraft, offering the widest range of aviation solutions in the industry to
meet market demands. GECAS’ presence at the Paris Air Show demonstrates a commitment to
acquiring the most innovative commercial aviation technologies to offer the best solutions to
customers.
GE Capital, Commercial Distribution Finance (CDF) announced that it has extended its
inventory financing agreement with the American Boat Builders Association (ABA), a major
buying group for independent boat builders in the U.S., through 2018. CDF has been a
preferred lender to ABA’s members since the organization’s inception in 1992.
GE Capital, Corporate Finance announced it is serving as administrative and collateral agent
on $1.335 billion in senior credit facilities for auction house Sotheby’s (NYSE: BID). The new
facilities include a $485 million credit line increase that will be used for growth in Sotheby’s
finance business. GE Capital Markets served as joint lead arranger and joint book runner on
the facilities.
Upcoming events:
October 16, 2015 – 3Q’15 Earnings
For presentations, news and additional information, please visit our investor website at
http://www.ge.com/investor-relations
Best regards,
2
Asset sales:
GE Company 2Q’15 overview:
Environment
Execution versus goals
 Slow growth and volatile
environment continues
2015 Goals
 GE Capital exits ahead of plan …
$68B dispositions signed YTD
GE executing well:
 Industrial operating+Verticals-a) EPS
$.31, +19% … Industrial EPS +18%
 Industrial segment OP margins +70
bps. with gross margins +60 bps.
 Industrial CFOA YTD $3.5B, +79% …
GE CFOA $3.9B, +17%
Ind. segments
Orders
Revenue
Op Profit
Reported
Organic
8%
0%
5%
13%
5%
11%
Grow Industrial segments
Organic growth (2-5%)
Margin expansion
1H’15
+11%
6% organic
4%
100 bps.
GECC Verticals-a) EPS ~$.15
$.09
GECC cash to parent
$0.5B dividend
Disciplined/balanced capital allocation
CFOA $14-16B-b)
$3.9B
FCF + disp. $12-15B
$2.4B
Cash to investors $10-30B
$4.8B
Portfolio actions
$68B GECC signed YTD
Synchrony on track
Appliances/Alstom regulatory review
(a- Verticals include businesses expected to be retained including allocated corporate costs
(b- Taxes associated with dispositions included in net disposition proceeds
3
GE total company 2Q’15 results:
2Q’15 consolidated results
($ in millions)
($ in billions – except EPS)
Industrial + Verticals EPS .31
Operating EPS
.28
Continuing EPS
.24
Net EPS
(.13)
CFOA YTD
– Industrial
Consolidated tax rate
– GE (ex-GECC)
– GECC
Segment
profit
Revenues
V%
2%
1
3
(4)
2Q’15
Revenues
$32.8
– Industrial revenue
26.9
– Verticals-a) revenue
2.8
– Other GECC-b) revenue 3.4
$
Power & Water
19
(13)
(14)
U
3.9
17
3.5
79
2Q’15 2Q’14
27%
6%
21
19
45
(23)
$6,801
$
V%
V%
8% $1,221
8%
Oil & Gas
4,062
(15)
583
(12)
Energy Mgmt.
1,768
(5)
82
19
Aviation
6,252
3
1,269
6
Healthcare
4,337
(3)
705
(3)
Transportation
1,420
9
331
23
Appliances & Lighting
2,235
5
165
Industrial Segments
GE Capital
Ind. Seg. + Verticals
Industrial + Verticals EPS
Industrial operating
GE Capital Verticals-a)
26,875
0/5
2,788
3
531
$29,663
-%
$4,887
Verticals-a)
2Q’15
$.26
$.05
$.31
62
Organic
Organic
4,356 5/11
19
6%
V%
18%
25%
19%
(a- Verticals include businesses expected to be retained including allocated corporate costs
(b- Other GE Capital includes the Consumer segment, GE Capital HQ run-off, & exit-related items
Earnings dynamics
(after tax, $ in millions – except EPS)
Earnings walk
2Q’15
Net income
2Q’15 EPS
EPS V%
$2,620
$0.26
18%
531
0.05
25%
$3,151
$0.31
19%
459
0.05
(3)%
(772)
(0.08)
U
$2,838
$0.28
(13)%
(448)
(0.04)
(33)%
Continuing earnings
$2,390
$0.24
(14)%
Less CLL disc. ops. charge
(4,329)
(0.43)
U
579
0.06
(14)%
$(1,360)
$(0.13)
Industrial operating
Verticals-a)
Industrial + Verticals earnings
Consumer
Other GE
Capital-b)
Operating earnings
Non-op pension
CRE/CLL earnings/other disc. ops.
Net earnings
U
 Industrial + Verticals EPS $.31, +19% … strong Industrial growth, +18%
 CLL held-for-sale charge of $4.3B included in expected $23B total GE Capital exit impact
disclosed in April … CLL timing accelerated versus original plan
(a- Verticals include businesses expected to be retained including allocated corporate costs
(b- Other GE Capital includes costs associated with preferred dividends, tax and restructuring charges, and HQ operating expenses
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GE Capital 2Q’15 results:
2015 operating framework
Operating EPS
1 Industrial
$1.10-1.20
$1.13-1.20
+
+
+
+
Industrial operating EPS up double digits
Segment organic growth of 2-5% & margin expansion
Corporate ~$2.3-2.5B
BD … still expect deals to close in 2H15-a)
2 GE Capital retained ~$.15
businesses (Verticals)
+ Verticals on track
+ Synchrony split-off 1/1/16-a)
3 Capital asset sales
~$90B
~$100B
+ Impact from GE Capital exit … targeting ~$100B closed
in 2015
4 Free Cash Flow
+ Dispositions
$12-15B
+ CFOA of $14-16B-b); will update based on GECC progress …
$0.5B 1H GE Capital dividend, will review potential for
additional dividend in 2H-a)
+ P&E of ~$4-4.5B
+ Dispositions of $2-4B … Appliances-a) ~$2B
5 Cash Returned
to Investors
$10-30B
+ Dividend of ~$9B; buyback based on GE Capital progress
+ Synchrony split-off-a) estimate ~$18-20B
(a- Subject to regulatory approval
(b- Taxes associated with dispositions included in net disposition proceeds
5
GE Capital Funding ($B):
Unsecured term issuances
Debt composition–a)
Non-recourse
Securitization
LT debt
$333
19
18
226
Deposits/CDs
Alternative
funding/other
Comm’l. paper
Bank lines
CP coverage
Liquidity-d)
LT debt <1yr.
$304
198
$32
$296
-b) -c)
17
193
42
21
25
43
20
25
46
15
25
2Q'14
1Q'15
2Q'15
$46
100%+
$77
$38
$45
100%+
$78
$35
$45
100%+
$85
$36
'13
$10
$8–e)
'14
'15
• Completed $8B of LT debt issuance in 1Q’15 in
3 currencies
• No incremental LT debt issuance currently
expected in line with April 10th announcement
• Deposits/CDs and other alternative funding
~21% of total debt, securitization ~6%
• Liquidity position remains strong
(a - Continuing operations (excludes obligations issued to third parties that we reported in Discontinued operations or Held-for-Sale)
(b - Includes ~$(7.0)B YTD FX impact and ~$(1.1)B YTD FAS 133
(c - Includes ~$61B of Synchrony borrowings
(d - Liquidity includes cash & equivalents (including discontinued operations and held for sale balances) and ~$3.3B of debt obligations of the U.S. Treasury
(e - Excludes ~$1.0B of unsecured Synchrony issuance
Bond performance (vs. peers, indices) (USD 5yr):
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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," "will," "would," or "target." Forward-looking statements by their
nature address matters that are, to different degrees, uncertain, such as statements about our announced
plan to reduce the size of our financial services businesses, including expected cash and non-cash charges
associated with this plan; expected income; earnings per share; revenues; organic growth; margins; cost
structure; restructuring charges; cash flows; return on capital; capital expenditures, capital allocation or
capital structure; dividends; and the split between Industrial and GE Capital earnings. For us, particular
uncertainties that could cause our actual results to be materially different than those expressed in our
forward-looking statements include: obtaining (or the timing of obtaining) any required regulatory reviews
or approvals or any other consents or approvals associated with our announced plan to reduce the size of
our financial services businesses; our ability to complete incremental asset sales as part of that plan in a
timely manner (or at all) and at the prices we have assumed; changes in law, economic and financial
conditions, including interest and exchange rate volatility, commodity and equity prices and the value of
financial assets, including the impact of these conditions on our ability to sell or the value of incremental
assets to be sold as part of our announced plan to reduce the size of our financial services businesses as
well as other aspects of that plan; the impact of conditions in the financial and credit markets on the
availability and cost of GECC's funding, and GECC's exposure to counterparties; the impact of conditions in
the housing market and unemployment rates on the level of commercial and consumer credit defaults;
pending and future mortgage loan repurchase claims and other litigation claims 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 flows and earnings and other conditions which may affect our ability to pay our
quarterly dividend at the planned level or to repurchase shares at planned levels; GECC's ability to pay
dividends to GE at the planned level, which may be affected by GECC's cash flows and earnings, financial
services regulation and oversight, and other factors; our ability to convert pre-order commitments/wins
into orders; the price we realize on orders since commitments/wins are stated at list prices; customer
actions or developments such as early aircraft retirements or reduced energy demand and other factors
that may affect the level of demand and financial performance of the major industries and customers we
serve; the effectiveness of our risk management framework; the impact of regulation and regulatory,
investigative and legal proceedings and legal compliance risks, including the impact of financial services
regulation and litigation; adverse market conditions, timing of and ability to obtain required bank
regulatory approvals, or other factors relating to us or Synchrony Financial that could prevent us from
completing the Synchrony Financial split-off as planned; our capital allocation plans, as such plans may
change including with respect to the timing and size of share repurchases, acquisitions, joint ventures,
dispositions and other strategic actions; our success in completing, including obtaining regulatory
approvals for, announced transactions, such as the proposed transactions and alliances with Alstom,
Appliances and our announced plan to reduce the size of our financial services businesses, and our ability
to realize anticipated earnings and savings; our success in integrating acquired businesses and operating
joint ventures; the impact of potential information technology or data security breaches; and the other
factors that are described in "Risk Factors" in our Annual Report on Form 10-K for the year ended
December 31, 2014. These or other 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 includes certain forward-looking projected financial information that is based on current
estimates and forecasts. Actual results could differ materially.
This document also contains 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 periodto-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.
GE’s Investor Relations website at www.ge.com/investor and our corporate blog at www.gereports.com, as
well as GE’s Facebook page and Twitter accounts, contain a significant amount of information about GE,
including financial and other information for investors. GE encourages investors to visit these websites
from time to time, as information is updated and new information is posted.
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