GE 2014 Annual Report Download - page 5

We are creating a more valuable GE for you.
From 2014 to 2016, we are focused on
delivering an important fi nancial pivot. This
includes: growing EPS each year; achieving
75% of our earnings from industrial busi-
nesses; returning $50 billion to investors;
and growing margins and returns. In 2014,
our share performance trailed S&P 500
returns; over the past fi ve years, our total
returns grew by 96%. And, we are convinced
that this pivot will deliver a much higher
valuation over time.
Today, we offer you consistent growth in
a volatile world, with a strong dividend
yield. Our businesses are performing well.
We have a foundation of broad and deep
competitive advantage. Our best days are
ahead of us, and we are determined to
deliver for you.
A Year of Purposeful Portfolio Moves
In 2014 we continued to reshape the
Company.
In May, we announced an agreement for
the acquisition of Alstom’s Power & Grid busi-
ness, the largest in GE’s history. This highly
strategic investment brings complementary
products and services in power and greatly
strengthens GE’s position in the grid sector.
Alstom will benefi t from GE’s strength in
technology, service and in growth markets.
In July, we began the spinoff of Synchrony
Financial, our Retail Finance business. GE
still owns 85% of this new company, cur-
rently valued at $26 billion. By the end of
2015, we expect to spin this company to
GE investors in a capital-effi cient exchange
for about 8% of our shares outstanding.
In September, we announced the sale of
our Appliances business to Electrolux for
$3.3 billion, a good price which will generate
a pretax gain of more than $1 billion. Despite
our 100-year history in appliances, the
business did not fi t our core strengths, nor
was our competitive position favorable.
We believe that the capital can best be
deployed elsewhere.1
These portfolio moves cap a decade where
we repositioned GE as a more focused,
high-value industrial company. During this
time, we have completed more than
$100 billion of acquisitions and disposi-
tions. This includes major investments to
strengthen our infrastructure portfolio,
substantially reducing fi nancial services
and selling businesses where we lacked
competitive advantage. Going forward, GE
is built on businesses that fi t our strength
and purpose.
GE remains unique in the sense of combining
industrial strength with a signifi cant fi nan-
cial services capability. To be clear, GE is
an industrial company fi rst and foremost.
GE Capital must enhance our industrial
competitiveness, not detract from it. We
see a signifi cant advantage in our ability
to bring fi nancial solutions to industries
like aviation, energy and healthcare. But
make no mistake, the ultimate size of GE
Capital will be based on competitiveness,
returns and the impact of regulation on
the entire company.
The result of these moves is a strong, multi-
business industrial company, and proudly
so. Each of our businesses is a leader in
their industries. Our diversity gives GE the
fi nancial strength to capitalize on cycles
OUR STRATEGIC CHOICES
LETTER TO SHAREOWNERS
1. The Alstom, Synchrony and Appliances transactions are each subject to regulatory approval.
GE 2014 ANNUAL REPORT 3