August 2009 Investor Update

August 2009
Investor Update
August 5, 2009
To the Investment Community,
• On July 17, GE announced second quarter 2009 earnings. Here are the highlights:
Business highlights
aEarnings per share of $.26, down 52%; earnings of $2.9 billion, down 47%
aCompany revenues of $39.1 billion, down 17% (down 12% FX-adjusted); Industrial sales
down 7%; financial services revenues down 29%, reflecting shrinkage at GE Capital
GE Technology Infrastructure
page 2
aCash generated from operating activities totaled $7.1 billion in 1H ’09, ahead of plan;
$52 billion cash and equivalents at quarter-end
GE Energy Infrastructure
page 3
aEnergy Infrastructure earnings grew 13%; Technology Infrastructure earnings declined 11%
GE Capital Finance page 4
NBC Universal
page 5
Film release schedule page 5
Citizenship, ecomaginationsm and
healthymagination
page 6
GE Global Research page 6
Upcoming investor events
page 6
aIndustrial operating profit rate solid at 16.3%, down 10 bps from ’08, and up 200 bps from 1Q ’09
aCapital Finance earned $590 million ($149 million pre-tax); on track for profitable 2009; reserve
coverage increased by $0.9 billion, up 22 bps vs. prior quarter
aGE Capital completed 2009 long-term debt funding plan; pre-funded about a third of 2010 plan
You can find the press release and presentation material, as well as listen to and read the
transcript of the earnings webcast here.
• In a recent interview, Congressman Barney Frank mentioned “General Electric ... and
manufacturers with finance businesses should be allowed to keep them under a revision of
rules to govern banking.” GE supports systemic regulation and is already planning for increased
regulation. However, GE is opposed to a proposal that might force the separation of GE Capital
from GE. Full Text Here
• GE announced that, at the request of GE Capital Corporation (GECC), the Federal Deposit
Insurance Corporation has approved an application filed by GECC, which positions it to exit the
Temporary Liquidity Guarantee Program (TLGP). The “plan to exit from TLGP affirms the strength
of GE Capital’s funding and liquidity position, including reduced reliance on government funding
programs and our ability to access non-guaranteed debt markets,” said GE Senior Vice President
and Treasurer Kathryn Cassidy. Full Text Here
• On July 28, GE Vice Chairman & Chief Financial Officer Keith Sherin, GE Vice Chairman & GE
Capital Chairman and CEO Mike Neal and multiple members of the GE Capital leadership team
hosted the GE Capital Investor Webcast. Click here for materials related to the event.
• On August 3, GE filed its second quarter 2009 Form 10-Q. The filing can be found on our investor
website at http://www.ge.com/investors/financial_reporting/index.html.
• Consistent with our commitment to increase disclosure and provide more transparency
regarding our financial services businesses, please find a supplemental statistical summary
to our second quarter 2009 Form 10-Q filing here.
For presentations, news and other helpful information please visit our investor web site at
http://www.ge.com/investor.
Regards,
Contact
Trevor A. Schauenberg
Vice President
Corporate Investor Communications
3135 Easton Turnpike
Fairfield, CT 06828
USA
T 203 373 2424
F 203 373 2071
[email protected]
GE Technology Infrastructure
•
GE Transportation and PT Kereta Api (PTKA), Indonesia’s state-controlled
railway, announced that PTKA has confirmed an order for 20 C20-EMP
locomotives with deliveries scheduled for 2010 and 2011. The Companies
have also signed a Memorandum of Understanding that commits the
parties to developing a long-term plan for the purchase or lease of up to
150 additional locomotives that will be specifically designed for Indonesia.
Full Text Here
•
GE Transportation has announced the grand opening of a new locomotive
assembly plant in Astana, Kazakhstan. The 43,000 square meter plant is
scheduled to begin production of GE’s Evolution Series locomotives by the
end of 2009. At full capacity, the facility would be capable of assembling
approximately 100 locomotives per year while employing more than 600
people. Full Text Here
•
GE Healthcare, and global eHealth specialist InterComponentWare, Inc.
(ICW), announced that the companies have signed a strategic agreement
to integrate and co-develop their health information exchange solutions.
“Connectivity is one of the biggest challenges in healthcare today and it
directly impacts the quality and cost of patient care,” said Vishal Wanchoo,
President and Chief Executive Officer of GE Healthcare IT. “Our strategic
relationship with ICW enables GE Healthcare to accelerate our Centricity
connectivity solutions and further extend our global capabilities. With our
Centricity portfolio of electronic medical records, enterprise systems, clinical
repositories and patient solutions, GE Healthcare is now one of the only
companies to offer the full range of technology needs for global healthcare IT.”
Full Text Here
•
GE Fanuc Intelligent Platforms, announced the VPXcel3 SBC341 3U VPX
rugged single board computer. Taking advantage of the latest Penryn
processor technology from Intel® with its 2.26GHz SP9300 Core™2 Duo
processor and 25 watts thermal design power (TDP), the SBC341 responds
to the growing requirement for maximum throughput with minimum power
dissipation. The SBC341 processor features a 13% higher clock speed and
a 20% lower TDP than the SBC340 it supersedes: it also features 50% more
on-cache memory and a 50% faster front side bus for even more significant
performance gains. Full Text Here
•
GE Aviation successfully completed initial flight-testing of its ElectroOptical Grid Reference System for aerial refueling applications. This activity
demonstrates that GE’s grid navigation system is on target to support
automatic aerial refueling of both manned and unmanned aircraft using
either probe and drogue or boom and receptacle techniques. Full Text Here
August 2009 Investor Update
2
GE Energy Infrastructure
•
GE is working with the Maui Electric Company to utilize distributed energy
resources to help manage grid operations on the island of Maui. In partnership
with the Hawaiian Electric Company, Maui Electric Company (MECO), the Hawaii
Natural Energy Institute of the University of Hawaii and the U.S. Department of
Energy, GE has formally launched the Maui Smart Grid project which will develop
and demonstrate the use of smart grid technologies to help MECO control peak
circuit demand, maintain adequate circuit voltage levels, and integrate intermittent
renewable energy resources. Full Text Here
•
GE Energy and central Canterbury electricity network, Orion New Zealand Limited,
announced the implementation of the first phase of a sophisticated GE network
management system to help improve power reliability for customers. This
implementation is the first of its kind to go live in New Zealand. The system of smart
grid technologies will significantly improve the network company’s ability to manage
big network emergencies and help it to restore power faster when outages occur.
Full Text Here
•
Canadian government and business leaders gathered near Lake Erie in southern
Ontario for the grand opening of North America’s first GE-designed greenhouse
cogeneration plant installed to generate more reliable onsite power and heat
for commercial greenhouses and help the country reduce its emissions from
energy production. The high-efficiency onsite power plant, powered by four of GE
Energy’s Jenbacher gas engines cogeneration modules, was among seven natural
gas-fueled combined heat and power projects approved by the Ontario Power
Authority. Full Text Here
•
GE Oil & Gas has been selected by OMV Gas GmbH of Vienna, Austria to supply
integrated compressor line (ICL) technology for OMV’s Neustift compression station,
which is part of the extension of the Penta West Gas Pipeline, a key supplier of
natural gas for Austria and bordering states. With this construction, the capacity of
the Penta West Gas Pipeline will be doubled. Full Text Here
•
Egyptian Liquified Natural Gas (ELNG), Egypt’s largest LNG partnership sponsored
by EGAS, EGPC, BG Group, Petronas and Gaz de France, has announced its
completion of the first ever Health and Safety Partnership Program delivered
with GE Oil & Gas Global Services. Mr. Adnan Z. Abidin, CEO, ELNG, said, “We are
delighted with the outcomes of this highly successful Health and Safety Partnership
Program for ELNG. The impact has been a significant step-change improvement,
embedding the new program right across our business. The success is due to the
strong relationship we have developed with GE Oil & Gas over several years. We’re
now working to consolidate the results obtained and I’m confident that this phase
will also deliver great results.” Full Text Here
•
A leader in Smart Grid solutions, GE unveiled plans for a “Net Zero Energy
Home” project which combines GE’s most efficient appliances and lighting, the
company’s new energy management systems, and GE power generating and
storing technologies in new home construction. When applied together, the
system would enable a homeowner to achieve net zero energy costs by 2015.
The Net Zero Energy Home project was introduced at GE’s smart grid symposium
at its Global Research Center in upstate New York. Full Text Here
August 2009 Investor Update
3
GE Capital Finance
•
GE Money Retail Consumer Finance announced a multi-year renewal of the
Walmart credit card program for Walmart stores in the United States and Puerto
Rico, and on walmart.com. Since 1999, GE Money has been Walmart’s credit
partner. The partnership started with one product – a Walmart store card – and
has since grown to include multiple programs, including store and co-branded
consumer credit cards and commercial and community cards. Full Text Here
•
A milestone in a strategically important new water supply that will help alleviate a
severe water shortage in Jordan’s capital and surrounding area has been reached
with funding of construction of a pipeline project by GAMA Energy A.S., a joint
venture between GAMA Holding A.S. and GE Energy Financial Services. The US$1
billion Disi Water Conveyance Project includes construction of a 325-kilometer
pipeline that will pump water from the Disi aquifer in Mudawarra to Jordan’s most
populous city, the capital of Amman. The investment will create jobs and promote
private sector participation in Jordan’s development. Full Text Here
•
GE Capital announced it acted as co-agent on an $800 million exit financing for
the U.S. and Canadian businesses of Quebecor World Inc., a worldwide leader in
commercial printing. GE Capital Markets and GE Capital Markets (Canada) Ltd.
acted as joint-lead arrangers. The loan will be used to support the company’s
exit from bankruptcy protection under both a Plan of Reorganization (under
Chapter 11 of the US Bankruptcy Code) and a Plan of Arrangement (under
Canada’s Companies’ Creditors Arrangement Act) by refinancing the company’s
existing debtor in possession (DIP) loans and by providing liquidity to support the
company’s operations going forward. Full Text Here
•
GE Capital, Corporate Retail Finance announced it committed $290 million of new
money to a $1 billion asset-based revolving line of credit for Rite Aid Corporation,
a leading national drugstore retailer. The loan, which was previously announced
by the company, will be used for working capital purposes. GE Capital Markets
served as joint lead arranger. Full Text Here
•
GE Capital, Healthcare Financial Services, one of America’s leading healthcare
financiers, announced it served as administrative agent on a $97.5 million senior
credit facility for Univita Health Inc., a portfolio company of Genstar Capital. The
loan will be used to refinance a portion of Univita’s existing indebtedness and for
general corporate purposes. GE Capital Markets, Inc. arranged the transaction as
sole bookrunner and co-lead arranger. Full Text Here
•
GE Capital, Franchise Finance completed a $12 million loan to Tribox LLC for the
purchase of 14 Jack in the Box units and to refinance some existing debt. Tribox
currently owns and operates seven Jack in the Box franchise units in the Dallas
area. Full Text Here
•
flydubai, Dubai’s first low cost airline, has signed a deal to finance four Boeing
B737-800 aircraft with GE Capital Aviation Services. The sale and leaseback
agreement covers the aircraft due to be delivered to flydubai from Boeing in
2009, with two expected in July, one in October and one in December.
Full Text Here
August 2009 Investor Update
4
NBC Universal
•
The Academy of Television Arts & Sciences announced nominations for its 61st Annual Primetime
Emmy Awards during which NBC’s record-setting comedy “30 Rock” — winner for the past two
years as Outstanding Comedy Series — again set a new, single awards year record for a comedy
series with 22 nominations, surpassing its own record of 17 set last year. NBC earned a total of 67
nominations that rank the Peacock Network as the top-nominated broadcast network and stands
as the second-highest number of nominations for any broadcast service. Full Text Here
•
Bravo was recognized with a record-breaking 12 Primetime Emmy Nominations from the
Academy of Television Arts & Science for the 61st Annual Primetime Emmy Awards. This marks
the network’s third consecutive year to dominate the Outstanding Reality Competition program
category garnering nominations for both “Top Chef” — the No. 1 food show on cable — and
“Project Runway.” The series’ hosts were also honored with nominations for Outstanding Host for a
Reality Competition Program. Bravo continues as the only cable network to ever receive an Emmy
nomination in both these categories, and the only network, including broadcast, to have two shows
nominated in the Competition category. Full Text Here
•
The National Hockey League and NBC Sports announced an extension through the 2010-11 season
of their successful revenue-sharing partnership — one that has achieved viewership milestones,
programming and production innovations, awards and critical acclaim. “The NHL/NBC partnership
has been terrific. Our association has led to such technical innovations as the ‘Inside the Glass’
reporting and to such programming advancements as the extremely popular Winter Classic,” NHL
Commissioner Gary Bettman said. “Game 7 of the Stanley Cup Final was broadcast television’s
most-watched hockey game in 36 years, which makes clear the NHL and NBC are building an
audience, are building momentum and are perfectly positioned to continue growing the game.”
Full Text Here
•
Telemundo Communications Group announced it will broadcast the August 12th Rumbo Al Mundial
World Cup qualifier Mexico vs. USA simultaneously on the Telemundo network in Spanish and on its
Latino youth cable network mun2 in English. This will be the first-ever live sporting event to air on
Telemundo and mun2 simultaneously and the first time mun2 broadcasts a major sporting event.
Full Text Here
•
Telemundo Communications Group announced it has partnered with driverTV, a leading provider of
automobile related video content for consumers, and MSN Latino to launch www.drivertvlatino.com.
Drivertvlatino.com is the first video-based Spanish-language virtual automobile showroom destination.
Full Text Here
Ratings highlights:
•
USA won the second quarter of 2009 with the highest ever second quarter delivery among adults
25-54, adults 18-49 and total viewers for a cable network. This follows its delivery of the best
first quarter ever in Q1`09 and best fourth quarter ever in Q4`08. It continues USA’s streak of 12
consecutive quarterly wins adults 25-54, adults 18-49, and total viewers.
•
NBC Sports’ “Breakfast at Wimbledon” coverage of the five-set classic between Roger Federer and
Andy Roddick was the most-viewed Gentlemen’s Final in 10 years.
•
cnbc.com posted its 19th straight month of year-over-year growth in unique visitors. The site is also
the fastest growing business news website in total audience in its category with at least 1 million
visitors or more.
Upcoming films
•
September 18: Love Happens (Aaron Eckhart, Jennifer Aniston)
August 2009 Investor Update
5
Citizenship, ecomagination and
healthymagination
•
As part of NBC Universal’s ongoing commitment to improving public secondary
education in underserved communities, the NBC Universal Foundation, the
company’s philanthropic organization, announced that it will direct $1.25 million
in grants to non-profits in six cities across the U.S. Full Text Here
•
GE Transportation announced that it has been awarded a contract by Canadian
Pacific Railway Limited to equip 200 locomotives with its Trip Optimizer fuel
savings product. “Results measured by CP on intermodal freight of various train
lengths have shown a fuel savings ranging from 6% to more than 10% depending
on territory,” said Pierre Comte, President GE Transportation Intelligent Control
Systems. “After years of research and a considerable investment, we’re proud to
work with CP to launch this groundbreaking product. Trip Optimizer is proving to
be the future of fuel conservation and resulting emissions reductions for railroads
around the world.” Full Text Here
•
GE released its fifth annual Citizenship Report, entitled Resetting Responsibilities,
which includes an in-depth discussion on the relationship between business and
society during the global recession, and reflects the importance of corporate
responsibility as an integral part of GE’s business strategy. Please click here for
the full report.
GE Global Research
•
GE Global Research and the Technical University of Munich (TUM), signed a
Memorandum of Understanding to establish a world-class carbon composites
manufacturing Center of Excellence on the TUM campus in Garching, near Munich,
Germany. The Center of Excellence will focus on automated manufacturing of
complex composite structures for use in wind turbines, jet engines, and oil &
gas applications. “With this initiative we will be able to leverage the expertise
and resources of both GE and the Technical University of Munich to further
develop automated manufacturing of composites to improve commercial
products,” said Carlos Härtel, Managing Director of GE Global Research Europe.
“This announcement also emphasizes GE’s strong commitment to developing
technology in Europe and marks five years of collaboration between the TUM and
GE Global Research. The carbon composites Center of Excellence is a key project
in GE’s focus on advanced manufacturing technologies.” Full Text Here
Upcoming investor events (subject to changes)
•
Sept 17:
GE Global Research Security Analyst Meeting
•
Oct 16*:
GE 3rd Quarter 2009 Earnings Webcast
*Meeting will be webcast. Webcast replays are retained on our web site for 14 days.
Podcasts are also available by accessing the following link: http://www.ge.com/rss/
investor.xml
August 2009 Investor Update
6