GE 2009 Annual Report Download - page 6

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A simplified portfolio focused on infrastructure.
We are the world’s best infrastructure company. We’ve built leadership franchises in
Energy, Oil & Gas, Healthcare, Aviation, Transportation, Water and Consumer Products.
Investors value our infrastructure business model. We have grown our earnings by
almost 10% annually for two decades with high returns and strong cash flow. We have
great technical and geographic diversity, which reduces volatility.
Infrastructure can fully leverage GE enterprise advantages. Much of our technology is
common to multiple businesses, so we can spread innovations across our portfolio. We
share a common approach to servicing our installed base. We enjoy deep relationships
across our businesses with emerging-market governments who look at infrastructure
in its totality. Our businesses require big investments and financing that only a strong
company like ours can provide. We should be able to offer more customer value at a
lower cost than any of our competitors.
Infrastructure offers GE dynamic, long-term growth through building out adjacencies.
We built several new adjacencies over the past decade, like renewable energy, oil & gas,
water treatment and life sciences. In 2000, these businesses were virtually zero; today
they generate around $20 billion in revenue. We are currently launching new adjacencies
in batteries, avionics and services.
We are repositioning GE Capital as a smaller and more focused specialty finance
franchise. Our competitive advantage is in value-added origination and risk management.
We will continue to be a significant lender for assets we know, and in markets where we
are a recognized leader. We are preparing for a more highly regulated financial services
market. GE Capital can still generate solid returns in this more focused form.
Our ability to finance improves our understanding of how our
customers work and make money. Outside the United States, govern-
ments like to partner with companies that bring complete technical
and financial solutions. To small businesses, GE Capital can add
more value than banks because we offer industrial practices that help
them grow.
Reducing our ownership stake in NBC Universal (NBCU) was a
difficult decision, but it offers important benefits to the Company.
Presuming the deal is approved, we expect to receive an attractive
valuation and a lowered risk profile.
GE owned NBCU for more than 20 years, during which average
growth and return both were 11%, above the industry average.
We were the ratings leader for most of those years. We have been a
consistent investor in content, people and platforms. More recently,
we had disappointments in primetime for our broadcast network.
But we got the big things right. When we merged with Universal
in 2004, we enhanced shareowner value by diversifying our broadcast
business model. Subsequently, we built one of the industry’s most
successful cable platforms, broadened our content, made investments
in Hispanic media, globalized our distribution and positioned the
business for a digital future.
Investors in GE expect us to make smart capital-allocation decisions. This is what the
NBCU/Comcast partnership will be. The transaction will generate cash that we can invest
in infrastructure growth. At the same time, we will own a large stake of a media enter-
prise, better positioned to compete.
Our leadership in infrastructure and financial services positions GE for long-term growth.
There will be more than $10 trillion invested in infrastructure by 2015, with a significant
portion in emerging markets. Our simplified, powerful portfolio is aligned with global
growth opportunities well into the next decade.
Infrastructure can fully leverage GE
enterprise advantages. Much
of our technology is common to
multiple businesses, so we can
spread innovations across our
portfolio. We share a common
approach to servicing our installed
base. We enjoy deep relationships
across our businesses with
emerging-market governments
who look at infrastructure in
its totality.
4 GE 2009 ANNUAL REPORT