GE 2015 Annual Report Download - page 7

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This gives us the ability to create value: buy
back stock, bolster your dividends or acquire
distressed industrial assets. We have the
ability to finance our industrial products, a
huge advantage to support our customers.
We can move production to the lowest-cost
regions and capitalize on currency or excess
capacity. And, we are continuing to invest.
Our long-term commitments for R&D, global-
ization and investments like Alstom have built
a valuable backlog. I encourage the GE team
to just focus on what we can control to stay
resilient and agile.
As uncertainty unfolds in front of you, this is
what I want you to remember about GE: we
have a great set of businesses. We are lead-
ing in this era’s biggest driver of industrial
growth and productivity. We have operating
momentum and cash flexibility due to sus-
tained execution of our enterprise strengths.
And we have a tested team who gets reward-
ed only when they deliver for you. GE should
be a safe investment in a sea of volatility.
Transformation:
A Focused
Industrial Leader
Going forward, we are competing as a
$130 billion high-tech industrial leader, filled
with strong franchises collectively gener-
ating consistent growth with high margins
and high returns. Every GE business feeds
off enterprise strength in technology, brand,
globalization and services. In a slow-growth
world, there is no case for an unfocused
conglomerate. Can anyone see GE acquiring
NBC or Insurance today, businesses with no
tangible fit? Yet, decades ago, this was ap-
plauded, and in the 1980’s and 90’s, it worked.
We are exiting most of our financial services
platforms. This was not an easy decision. GE
Capital was an important business for GE.
It generated 60% of GE’s earnings growth
from 1990–2005, at one point generating
half of our earnings. Despite the volatility of
the financial crisis, GE Capital emerged with
its franchises intact. However, the business
model for a large, wholesale-funded FinCo
like GE Capital changed dramatically, and it
was impossible to generate acceptable re-
turns. I knew that meeting the requirements
for Capital could not be contained and would
hurt our industrial competitiveness. We de-
termined that our financial businesses were
more valuable outside GE.
We decided to exit all of the financing plat-
forms not related to GE industrial businesses.
We completed the split-off of Synchrony, a
leader in retail finance. Synchrony as a public
company is valued 30% higher than it was
in GE. We returned $20 billion to investors
in the form of a share buyback. We are sell-
ing $200 billion of assets in 18 months, with
80% already signed. We are about one year
ahead of our original plan. As we exit these
Movement Planner
SmartOutage Clarity with
Pitney Bowes
GE Health Cloud
GE Power’s SmartOutage
eliminates 70+ applications and
unites outage tasks and processes
into a single mobile-friendly platform
for a powerful productivity boost.
• Drove $150M of productivity in
2015; expected to drive $100M more
in 2016
• 50% reduction in customer report
delivery cycle time
The GE Health Cloud is designed to
be a scalable, secure ecosystem
connecting software, hardware and
medical devices.
• Will connect to hundreds of thousands
of medical devices and machines from
multiple vendors, including 500,000+
GE Healthcare imaging devices
A sophisticated rail traffic control system
and logistics planner all-in-one, Movement
Planner intelligently analyzes and optimizes
traffic, allowing more locomotives to run
on the same infrastructure at faster speeds,
without laying new track.
• Significant improvement in on-time
performance
• Comprehensive view of the network
resulting in ~10% increase in network veloc-
ity and ~50% reduction in expired crews
• Orders from two Class 1 railroads
mers
Aviation Analytics
With Predix, GE Aviation developed
analytics to segment commercial fleets
and provide in-depth asset condition
and operational insights.
• More than $175M in customer benefits in
2015 via Predix-optimized maintenance
• Improved fault detection accuracy
by 10 percentage points, eliminating
unnecessary disruption to more than
1,000 commercial flights
Pitney Bowes uses Predix to power
their new Industrial Internet software
solution, Clarity. Clarity improves
inserting and mail-finishing opera-
tions, and has helped Pitney Bowes
lower costs and optimize machine
performance.
• Machine efficiency improvement
from 2–10% over time
• Increased mail throughput produc-
tivity by up to 20%
GE 2015 ANNUAL REPORT 5