GE 2015 Annual Report Download - page 5

GE Capital Deal Team
In 2015, the team signed $157B in GE Capital dispositions—
a historic accomplishment and a critical piece of our transformation.
The essence of GE is the unique ability to cre-
ate value from the intersection of horizontal
capability with vertical expertise. Competing
across multiple businesses and regions—“the
horizontal”—requires strategic agility and cul-
ture, but it is increasingly valuable. This is how
we create competitive advantage from size
and diversity. A digital world facilitates more
horizontal solutions for customer productiv-
ity and internal speed. A volatile world puts
more of a premium on reducing risk through
diversity, another horizontal skill. At the same
time, companies must be deeper to drive low
cost, achieving customer outcomes with high
share—“the vertical.” New innovation will re-
quire deep science and, many times, new
manufacturing techniques. There are not
many companies on Earth that can develop
high-tech infrastructure systems at scale, a
vertical strength. Maximizing the valuable
interface between horizontal and vertical is
institutional, part of our leadership capability
and embedded in our culture.
In the midst of our transformation, we de-
livered good results. In 2015, we grew our
Industrial earnings per share by 19%, ex-
panded our segment margins by 80 basis
points, and returned $33 billion of cash to our
investors. Our Industrial return on total capital
expanded 290 basis points to 16.9%. We won
in the marketplace, finishing the year with
$315 billion in backlog. Strong execution was
reflected in our share price. GE’s total stock
return was +28% in 2015, above the perfor-
mance of the S&P 500, which grew by 1%,
and the industrial index, which declined by
4%. We have solidly outperformed the broad-
er indices over the past three years, when we
grew by 64%, and five years, when we grew
by 101%. GE ended the year as the eighth
most valuable company in the world.
To sustain this performance, we will have
to win in challenging global markets. Some
say we are in an “industrial recession,” but
I don’t really know what that means. I learn
Pictured left to right: Jim Waterbury, Joe Nellis,
Matt Vaughan, Sarah Hedger, Duncan Berry,
Aneek Mamik, Keith Sherin, Jonas Svedlund,
Aris Kekedjian, Evelyn McAdam, Mark Landis,
Ephraim Rudman.
GE 2015 ANNUAL REPORT 3