GE 2009 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2009 GE annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

We were, however, far from perfect, and I want you to know that we also learned a few
lessons during the crisis that will help us run the Company better. Managing size and
complexity was a strength for GE during a generation of economic stability. The world
we live in today has more systemic risk. So GE must change.
For the last decade, we have run the Company with, at times, more
than half our earnings coming from financial services. As we grew, financial
services became too big and added too much volatility. GE must be an
industrial company first. We have increased our investment in industrial
growth. We will only grow strategically in financial services. We will
carefully monitor our size and return capital from our financial services
business as soon as possible.
Over time, we invested in areas like global mortgages, where we could
grow earnings, but that in the end did not fully leverage our competitive
advantage. We have taken strong actions to simplify and focus GE
around our core competitive advantages.
We applied a tighter focus on operations and liquidity during the crisis.
As a result, we weathered the recession with high margins and
strong cash flow. We have built stronger processes around enterprise
risk management and capital allocation. Similarly, we have improved
the productivity of our supply chain and lowered overhead cost.
Historically, we have run the Company with very little cash on hand. Now, we
have developed a more conservative cash profile to better prepare for volatility.
These practices will remain in place even as the economy improves.
It wasn’t always pretty, but we executed on our key priorities in 2009. GE Capital is
positioned to win in a reset financial services industry. Our industrial business will
continue to outperform. We have a healthier balance sheet and a strong brand. We have
put you through a lot of volatility during this crisis. But we never stopped learning and
making the Company better. We will perform for you in the future.
The GE Renewal
GE is an innovative technology and services company that can solve some of the world’s
most difficult problems, grow earnings and have substantial cash available to reinvest
in the Company or return to shareowners. And, in the markets we have chosen, we will
have a meaningful competitive advantage.
For the last decade, we have run the
Company with, at times, more than
half our earnings coming from financial
services. As we grew, financial services
became too big and added too much
volatility. GE must be an industrial
company first. We have increased our
investment in industrial growth. We will
only grow strategically in financial
services. We will carefully monitor our
size and return capital from our financial
services business as soon as possible.
GE Renewal Model
Simplified portfolio and key actions will create positive results
An Energized and
Accountable Team
Creating
Market Solutions to Tough
Societal Problems
Investing in
Profitable Growth
Attractive Growth
in Earnings, Cash
and Returns
Infrastructure
Technology
Financial
Services
GE 2009 ANNUAL REPORT 3