GE 2014 Annual Report Download - page 8

power-starved country over the next
few years by linking gas exploration, project
fi nance and power generation. In 2015,
Ghana will join 22 other countries where
GE sells at least $1 billion of products
and services.
We are deep. The markets where we com-
pete have technical risk. As a result, deep
domain expertise is required. In addition,
achieving low cost requires capturing supply
chain value. GE has decades of experience
that is necessary to develop complex techni-
cal systems and build customer trust.
We constantly improve. The healthcare
industry is 10% of global GDP and going
through change. It is an area where we’ve
been repositioning our business to succeed
in a market that is demanding more tech-
nology, more fl exibility and more tailored
solutions. We are confi dent that all the inno-
vations we are developing—from portable
diagnostic tools to analytical offerings and
next-gen imaging—are going to be critical
growth drivers for the future.
We innovate with new business models. Our
customers want more fl exibility, converting
capital investments to operating expenses.
We can apply our expertise in GE Capital to
enhance the value of our industrial offer-
ings. By packaging fi nancing with high-tech
products, we can deliver customer value
in markets like healthcare, oil and gas and
distributed power.
We expand our capability. Markets are
constantly in motion. And, we must pivot to
stay in the lead. Over the past 10 years,
we have invested $20 billion to establish
positions in businesses such as Life Sciences,
Water, Aviation Systems and Renewable
Energy. In Life Sciences, GE has a leadership
position in bioprocess manufacturing and
diagnostics for drug discovery. In Water, we
are a leader in industrial reuse; in 2014, we
were rated the industry’s most innovative
company. In Aviation Systems, GE captured
the valuable Common Core Avionics Systems
for the new Boeing 777, establishing us as
a tier one avionics company.
We create value through cycles. Our
fi nancial strength allows GE to invest when
others walk away. For instance, Europe is
a big economy, but it’s stuck in neutral, and
EU consensus and governance are proving
challenging. But in Europe, we can develop
infrastructure innovation for global markets.
We export $15 billion from that region. We
see capability in Europe and will invest there
today for long-term benefi t.
Since becoming CEO, I have seen cycles.
In each case, GE improved its share. We
experienced strong headwinds at the end
of the U.S. power bubble in 2002. But, in
subsequent years, we made operational
improvement, and broadened our reach.
We invested in renewable energy and
distributed power. Today, our business is
bigger and stronger. Most memorably,
our Aviation business experienced signifi -
cant downdrafts after the 9/11 tragedy,
SARS and fi nancial crisis. But, we made
billions in investment decisions at the bot-
tom of the cycle that today you know as
the GEnx, LEAP and GE9X engines. We have
$134 billion in backlog and expanding stra-
tegic leadership within the entire sector.
In down years, other businesses funded
Power and Aviation competitiveness.
Yes, today, we are facing a 50% drop in
the price of oil, and the industry is in
turmoil. But a growing population creates
long-term resource demand and, over
time, prices will recover. We view this
cycle as an opportunity. GE plans to be
a stable partner to our oil and gas custom-
ers during good times and bad; and a
very tough competitor. Similar to Aviation
cycles, we will offer solutions to our cus-
tomers’ effi ciency challenges. The oil and
gas industry should be able to compete
at current oil pricing. GE will lead.
We compete. Each of our businesses lead
in their industries. Each has the potential
for high margins and returns. Each has
suffi cient scale and capability to deliver for
customers and capitalize on growth themes.
Enterprise Strength: The GE Store
We drive enterprise advantages that benefi t
the entire company, through what we call
the “GE Store.” It means that every business
in GE can share and access the same tech-
nology, markets, structure and intellect. The
value of the GE Store is captured by faster
LETTER TO SHAREOWNERS
GE WATER TEAM
GE Water & Process Technologies has posi-
tioned itself as an industry leader for water
treatment and reuse across all main industrial
verticals. Over the last four years, GE’s Water
business has grown revenues by $400 million,
increased profi t margins more than 4x, and
delivered nearly $700 million in cash. The unit
has also reduced its SG&A costs by 10% while
improving on-time delivery to its customers.
GE Water was named Water Company of
the Year 2014 by Global Water Intelligence,
Supplier of the Year by multiple customers,
and is the preferred provider for tough-to-
treat water solutions.
In back (left to right): Bart Reekmans, Kevin
Cassidy, John Kochavatr, Nancy White, Yuvbir
Singh, Brian Davies, Patricia Garofalo, Mauro Cruz
and Ralph Exton. In front (left to right): Ashim
Gupta, Deborah Lloyd, Jon Freedman, Heiner
Markhoff and David Wu.
6 GE 2014 ANNUAL REPORT