Category Archives: GE – General Electric

ANOTHER POORLY TIMED LARGE GE ACQUISITION

Guest article by Ken Kinlock

One of the major problems for a US company having manufacturing in France and other European countries is that you can’t layoff people to conform to market and industry changes.

GE’s acquisition of Alstrom is an excellent example. The market is declining but you can’t reduce the workforce. “Positions in France won’t be affected due to stipulations in an agreement when GE bought Alstom SA’s energy business in 2015, the GE spokesperson said.” Even worse, GE Power will add 1000 jobs in France to meet the agreement they made when the French government approved the deal. So, every other location will reduce employment while France increases, even when the market is declining. Does this make sense?

This reinforces my previous note that “GE has made many poor LARGE acquisitions over the past fifty years and Altrom has many of the same problems that Machine Bull acquisition had for GE and why it lost the computer game against IBM.

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GE startup designs a less painful blood test

Schenectady Gazette

Scientists in Niskayuna developed crucial part of collection device

Getting blood drawn for medical testing may become quicker, less painful and more informal with new technology being developed by a General Electric startup.

The device developed by Drawbridge Health is usable by untrained personnel, takes a tiny amount of blood from a skin prick and stabilizes it so it will keep for days at room temperature until it can reach the testing lab. It’s a technology that could one day be available for in-home use by patients.

Today’s widely used blood-draw procedures require a trained phlebotomist to puncture the patient’s vein and draw one or more vials of blood in a clinical setting, before sending the vials, which must be kept cool, to a lab.

The new technology involves GE at a number of levels:

GE Ventures in Boston came up with the idea for the product, then created Drawbridge to make it a reality, with development help from engineers and scientists at GE Global Research and GE Healthcare. Drawbridge is now privately held and independent, but GE remains an investor.

The Drawbridge team designed the device to do the mechanical work of extracting blood.

Global Research scientists in Niskayuna developed the paperlike matrix that absorbs the blood and stabilizes it for the potentially lengthy wait for testing.

The device is undergoing review by the U.S. Food and Drug Administration.

“We expect to complete that process sometime next year,” said Risa Stack, who is managing director of new business creation for GE Ventures and also sits on Drawbridge’s board of directors.

Then the hard work begins: building market acceptance for the new device and capturing market share. Blood is drawn billions of times per year in the United States.

Drawbridge is talking to potential partners that already operate in the industry.

Stack has a long academic and professional background in the field but was born with one unique qualification for this project: a strong dislike of needles and a history of passing out during blood draws. She’ll often bring a book to distract herself when scheduled for a blood draw, and a candy bar to boost her blood sugar.

Drawbridge hasn’t named its device yet, nor released photos of it. But prototypes have been tested on volunteers including Stack, who found it noticeably less painful than the traditional venipuncture blood draw and also less painful than the fingertip-prick done for blood sugar monitoring.

The device withdraws less than a milliliter of blood. It can be used anywhere on the arm but is typically placed near the shoulder. Because it is not pulling blood from the vein, it does not require the skill of a phlebotomist, and it works well on patients with hard-to-find veins.

Making the blood tests easier, it is hoped, will allow for better tracking of medical conditions and response to therapy, saving time, money and even lives.

The Drawbridge device sends the blood into a cartridge, where the paperlike matrix stabilizes it within a few minutes. The cartridge is then removed for transport to a lab. The promise is that blood tests can be done on a more informal basis at more remote settings — and with less discomfort.

David Moore, a chemist who is the technology operations leader for the functional materials group at Global Research in Niskayuna, led the effort to develop the matrix.

It was essentially an adaptation of technology GE developed for the Life Sciences section of its Healthcare business. The collaborative nature of research efforts at Global Research allows for easy sharing of ideas and expertise across disciplines, technologies and businesses, Stack and Moore said.

Moore said the Drawbridge Health product gathers samples that can be tested in many ways, including for proteins, genetic material and biomarkers that would indicate a wide range of conditions and diseases.

“The possibilities are quite extensive,” he said, though the product is not envisioned as a forensic or substance-abuse test device at this point.

Stack said the device is part of a health care industry trend toward giving patients increased control over treatment and decreased time away from work or other activities for clinical settings.

Technology to allow quicker and/or easier blood tests has been in development and on the market for years. Many companies make finger-prick glucose testers for diabetes patients. Various apps allow smartphone-linked monitors to provide real-time blood-sugar data and, if needed, instructions or advice. Roche Diagnostics has a device that checks coagulents. CardioChek markets a cholesterol tester. Athelas is developing a device that does a 60-second check on cancer patients for an array of diseases. Silicon Valley startup Theranos has had a high-profile roller-coaster ride with its own finger-prick device that promised a battery of quick, inexpensive blood tests.

What makes Drawbridge different, GE Venutres said, is that the blood test is done in a traditional blood lab, with all the technology and infrastructure there, rather than in a portable consumer device.

Schenectady-based GE Power to cut 12,000 jobs, but it’s unclear where

From John Cropley at the Schenectady Gazette

GE Power on Thursday announced it will reduce its workforce by about 12,000 people as it strives to make the $1 billion in cost cuts mandated by General Electric CEO John Flannery.

GE Power did not say where the cuts will be made, but multiple media outlets reported they would mostly come in Europe, rather than in the United States. GE Power has already made a series of much smaller workforce reductions this year at its headquarters in Schenectady, where about 4,000 people work, most of them for GE Power.

GE Power spokeswoman Katie Jackson would not say where the personnel reductions would be made, nor what other cost cuts would be undertaken to reach the $1 billion savings target.

With Thursday’s cuts, General Electric took the lead in 2017 job cuts by U.S. companies: A total of 19,242, according to the calculations of Bloomberg News. With three weeks to go for the year, General Motors is No. 2 in job cuts and Macy’s No. 3.

A few round numbers are being floated for the 12,000 jobs GE Power plans to eliminate: Reuters reported that 1,600 jobs will be cut in Germany, 1,400 in Switzerland and 1,100 in Britain. Bloomberg reported that GE Power is not making job cuts at this point in France because of an agreement General Electric made with the French government when it purchased the power-generation business of Alstom.

In his Nov. 13 address to shareholders, Flannery noted that GE Power had 153 manufacturing, repair and service sites and suggested this was an area where efficiency could be increased.

In announcing the “global headcount reduction” Thursday, GE Power cited challenges in the electrical power generation market worldwide. Demand for fossil fuel power products has decreased, it said, as renewable energy has grown. GE Power said it is shrinking its footprint and structure to match this environment and is focusing on “improving operational excellence.”

“This decision was painful but necessary for GE Power to respond to the disruption in the power market, which is driving significantly lower volumes in products and services,” Russell Stokes, president and CEO of GE Power, said in a news release. “Power will remain a work in progress in 2018. We expect market challenges to continue, but this plan will position us for 2019 and beyond.

“At its core GE Power is a strong business,” he said. “We generate more than 30 percent of the world’s electricity and have equipped 90 percent of transmission utilities worldwide. Our backlog is $99 billion and we have a substantial global installed base. This plan will make us simpler and stronger so we can drive more value for our customers and investors.”

The plant at the foot of Erie Boulevard in Schenectady manufactures steam turbines and generators, and has a significant backlog of work.

The job reductions made there this year have affected salaried managers and professional workers, not the hourly wage workers who do the manufacturing work.

GE Power said the 12,000 job cuts announced Thursday will affect both professional and production workers.

General Electric is working to cut costs by $3.5 billion companywide, increase profitability and boost stock value. The cuts GE Power announced Thursday didn’t yield much progress toward that third goal: GE’s share price rose only 5 cents, closing at $17.71, still near its 52-week low. As a percentage, that was a hair less than the Dow Jones Industrial Average increase. GE stock has plunged 44 percent this year even as the Dow as a whole has risen 22 percent.

In another cost-cutting move, General Electric cut its stock dividend in half last month, only the second such reduction since the Great Depression.

General Electric has about 300,000 employees in more than 100 nations around the world. GE Power was the conglomerate’s biggest component business in 2016, with sales of $26.8 billion, Bloomberg reported. The total would have been $36.8 billion after accounting for the effects of a reorganization this year in which General Electric added some energy businesses to the unit, Bloomberg said.

SO WHAT HAPPENED TO GENERAL ELECTRIC? PART 9 (YEARS 2013-2017)

Special Guest Blog By Ken Kinlock

For those of you who have been following this special blog series through the previous eight, we started out in Part 1 describing the General Electric Company that Reg Jones turned over to Jack Welch. It was a strong company, well diversified and a delight to shareowners.

For Part 9, lets look at the Company from the 2016 Annual Report until current state with a new CEO John Flannery. (Pictured Above)

General Electric delivered in a year of sluggish growth and geopolitical surprise. There is deep skepticism toward the ideas that powered economic expansion for a generation, with concepts like innovation, productivity, and globalization being challenged and protectionism on the rise. We’re in an era when some very basic assumptions about the global economy are being tested – an era when trust in big institutions is so low that the most valued “strategy” is simply change in any form. For an American company, our country is diverging from the rest of the world. We will be less of a leader in trade. Meanwhile, we are stripping away years of bad regulatory and economic practices to promote competitiveness.

Over the last decade, GE transformed their portfolio, increasing the portion of earnings from industrial businesses from about 45% to 90%. GE strengthened competitiveness through investments in technology, globalization, and efficiency. In the past year, GE sold most of GE Capital assets at good prices, integrated Alstom – the largest industrial acquisition – and announced plans to merge our Oil & Gas business with Baker Hughes, creating a broad industry leader. These are “once-in-a-lifetime” deals for most companies.

A Simpler, More Powerful Portfolio
In recent years, GE has been making the $125 billion company simpler by focusing on core industrial businesses and deeper by means of building new capabilities. GE creates value through technology, delivering essential systems like engines, scanners, and turbines. GE has a diversified model: product and service, multiple geographies, industry balance, creating demand through data, and financing. It is important that all GE businesses achieve a competitive cost position and superior organic growth.

The GE Capital transformation has generated cash and growth. GE has exited about $190 billion of business platforms in 2015 and 2016, yielding some $45 billion in dividends that have applied to maximize returns. With smaller size and balance sheet strength, GE is no longer federally regulated as a systemic institution.

This has been an important strategic pivot as well. The “old GE Capital” was connected to the industrial balance sheet, but not really engaged with industrial growth. The “new GE Capital” has tighter alignment and broader objectives. Last year, it enabled $13 billion of industrial orders, earned $1.9 billion, paid a $20 billion dividend, and arranged $50 billion in export credit capacity outside of the U.S.

Every organization is being impacted by two macro themes: changing views on globalization and the role that digitization plays in disrupting industry. No company can escape these waves of change.

GE is a global company today and in the future. It has never considered itself to be a “stateless multinational.” GE is a proud American company that is winning in every corner of the world.

The GE Store

The GE Store is the global exchange of technology, talent, and expertise across GE’s diverse businesses and markets. GE businesses give and take from the Store.

What is the makeup of GE now.
The chart below provides four years of data, consistent with the timeframe for which we have reported the results of the businesses we expect to retain after completion of the GE Capital Exit Plan
(which we call Verticals).

Compound
annual
2013 2014 2015 2016 growth rate
Industrial revenues $101.9B $107.9B $106.9B $111.5B 3%
Industrial operating
profit + Verticals $14.3B $17.0B $17.5B $17.5B 7%
Industrial operating +
Verticals EPS $1.00 1.12 1.31 $1.49 14%

OUR INDUSTRIAL OPERATING SEGMENTS
Power
Aviation
Energy Connections & Lighting(a)
Renewable Energy
Healthcare
Oil & Gas
Transportation

Power
MISSION: Leading globally in power generation technologies
Major products: power generation
services, gas turbines, engines
& generators, steam turbines &
generators, nuclear reactors
Margins: 18.6% 230bps
Backlog: $84.7B 10%
2016 Ex. Alstom
Revenues: $20.6B1
Profits: $4.4B1
Margins: 21.5%1
Positive: Significant efficiencies from Alstom
in supply chain, service infrastructure, new
product development and selling, general &
administrative (SG&A) costs; strong services
growth; H-class gas turbine launch
– Negative: Excess capacity in developed
markets; continued pressure in oil & gas sector
Outlook: Improving global competitive
position; positioning the business for growth
with Alstom

RENEWABLE ENERGY

MISSION: Making renewable power sources affordable, accessible & reliable for the benefit of people everywhere
Major products: onshore & offshore wind turbines, hydropower solutions
Margins: 6.4% 50bps
Backlog: $13.1B 5%
Revenues: $7.9B1
Profits: $0.5B1
2016 Ex. Alstom
Margins: 6.9%1
Revenues: $7.9B1
Profits: $0.5B1
+ Positive: Strong revenue & orders
growth from new product introductions &
digital capability
– Negative: Increasing pricing pressure & need
for innovation from continued competitive
pressure from other wind turbine producers
& energy sources
Outlook: Positioning the onshore & offshore
wind businesses to drive value for customers
by in-sourcing blade production through the
acquisition of LM Wind Power

MISSION: Pushing the boundaries of
technology in oil & gas to bring energy
to the world
Major products: turbomachinery,
subsea & drilling systems, digital
solutions, surface products & services,
downstream technology
Margins: 10.8% 400bps
Backlog: $20.8B 9%
+ Positive: Positive equipment orders growth
in the fourth quarter; significant cost
reduction actions
– Negative: Continued market pressure
from lower oil prices & customers’ capital
expenditures that are lower than forecasted;
volatility in currency exchange rates
Outlook: Improving competitive position
through Baker Hughes combination to create
a fullstream oil & gas business

AVIATION

MISSION: Providing our aviation
customers with the most technologically
advanced & productive engines,
systems & services for their success
Major products: commercial & military
engines & services, aviation systems,
additive manufacturing machines

Margins: 23.3% 100bps
Backlog: $154.5B 2%

Positive: New product launches (e.g.,
LEAP) fueling growth in installed base;
digital solutions driving customer value
– Negative: Current geopolitical
environment driving uncertainty in military
engines & services
Outlook: Positioning the business for
continued growth & manufacturing
efficiency through additive manufacturing
investments

HEALTHCARE

MISSION: Developing transformational
outcome-based solutions through
the combination of leading medical
technologies, services & digital
platforms
Major products: healthcare diagnostic
imaging & clinical systems, life sciences
products & services, digital solutions

Margins: 17.3% 100bps
Backlog: $16.8B 2%

+ Positive: Technology innovation & demand
for productivity-based technology, services
& IT/cloud-based solutions; growth in China
– Negative: Uncertain U.S. market as a result
of potential healthcare reform
Outlook: Positioned for continued
growth in core imaging business through
technology leadership & digital platforms/
solutions, and in Life Sciences business
through expansion of bioprocess solutions;
continued growth in emerging markets &
China

TRANSPORTATION

MISSION: Being a global technology
leader & supplier to the railroad,
mining, marine, stationary power &
drilling industries
Major products: locomotives, rail
services, digital solutions, mining
equipment, diesel engines

Margins: 22.6% 110bps
Backlog: $20.1B 11%

Positive: Significant restructuring actions
to position the business for future growth
– Negative: Continued declines in North
American rail carload volumes; continued
low demand for natural resources negatively
impacting the mining industry
Outlook: Challenging market, but focusing
on transforming the business to align to a
more global/digital future

ENERGY CONNECTIONS &
LIGHTING

MISSION: Being a global technology
leader for the transmission, distribution
& conversion of electrical power &
leading an energy efficiency revolution
to deliver innovative solutions that
change the way people light & interact
with their environments
Major products: grid management
solutions, power conversion
technologies, lighting & energy
efficiency solutions

Margins: 2.1% 370bps
Backlog: $11.1B 5%

2016 Ex. Alstom
& Appliances
Revenues: $7.1B2
Profits: $(0.1)B2
Margins: (1.6)%

+ Positive: Increasing demand for Grid
automation/software as a result of
digitization & modernization of grid
infrastructure; LED opportunities from
technological shift away from traditional
lighting products
– Negative: Challenging oil & gas environment;
soft demand in the North American &
European electrical distribution market
Outlook: Continuing to integrate Alstom
& restructure the Energy Connections
business; strategically reorganizing Lighting
to reduce costs, focus on key markets &
simplify the business

(a) Beginning in the third quarter of 2016, the former Energy Connections and Appliances & Lighting segments are presented as one reporting segment called Energy Connections & Lighting. This segment includes historical results of the Appliances business prior to its sale in June 2016.

CAPITAL

MISSION: Investing financial, human &
intellectual capital to help our industrial
businesses & their customers grow
Major products: GE industry-focused
financial services verticals, including
GE Capital Aviation Services, Energy
Financial Services & Industrial Finance

Ending net investment2, 3: $93B 44%
Exit plan sales closed (ENI): $190B4 Margins:

Positive: Substantial progress on the GE
Capital Exit Plan4
; strong performance from
the Verticals (those GE Capital businesses
that will remain after completion of
the exit plan and that are aligned to our
industrial businesses)
– Negative: Declining excess interest costs
on borrowing, restructuring & headquarter
costs resulting from execution of the GE
Capital Exit Plan
Outlook: Positioning the business to
support growth in our industrial businesses

Manufacturing operations are carried out at 184 manufacturing plants located in 38 states in the United States and Puerto Rico and at 325 manufacturing plants located in 40 other countries.

General Electric’s address is 1 River Road, Schenectady, NY 12345-6999; we also maintain executive offices at 41 Farnsworth Street,
Boston, MA 02210.

GE’s Internet address at http://www.ge.com, Investor Relations website at http://www.ge.com/investor-relations and our corporate blog at
http://www.gereports.com, as well as GE’s Facebook page,

GE confirms layoffs at Schenectady

General Electric on Thursday confirmed a round of jobs cuts at its Schenectady/Rotterdam campus, the site of several earlier layoffs in 2017.

As in the previous layoffs, GE would not say how many employees are affected or what they do for the company. It indicated only that those affected are salaried employees, not the hourly workers who do production work.

GE employs about 4,000 in the sprawling complex at the foot of Erie Boulevard. A source there said the latest round targets about 75 of them.

The company has been struggling for years to increase profitability and reverse a long slide in stock value. The tempo and urgency of GE’s efforts have increased in recent months, with the arrival of a new CEO who indicated in November that Schenectady-based GE Power will need to cut $1 billion in expenses.

GE Power issued a statement Thursday about the layoffs in Schenectady:

“Based on the current challenges in the power industry and a significant decline in orders, GE Power continues to transform our new, combined business to better meet the needs of our customers. As we have said, we are working to reduce costs and simplify our structure to better align our product solutions, and these steps will include layoffs. These are difficult decisions, which does not reflect on our employees’ performance, dedication and hard work. GE will be providing a comprehensive severance package to impacted employees, including outplacement and transition support to new employment.”

By “combined business,” General Electric meant GE Power and GE Energy Connections, two businesses that were combined to form GE Power when GE Energy Connections President Russell Stokes took over as president of GE Power this past summer.

The publicly acknowledged rounds of job cuts earlier this year in Schenectady have been smaller than the one confirmed Thursday:
In September, a source within GE said 15 to 25 low-level management employees were laid off. The company would say only that a “small number” of jobs were eliminated.
In March, a “very small number” of jobs were cut, the company said, but again it would not identify them.
The only clearly defined round of Schenectady job cuts was in January, when another GE business — Current Powered by GE — reported 35 layoffs to the state Department of Labor as required by the state’s Worker Adjustment and Retraining Notification process. The other GE layoffs in Schenectady apparently did not meet the requirements of mandatory WARN reporting.

Bio blood GE Ventures theranos GE Ventures unveils new blood collection startup Drawbridge Health

Drawbridge Health wants to make it easier for doctor’s offices and clinics to collect small samples of your blood for testing on site with a handheld device.

The device uses proprietary technology to collect and stabilize just a few drops of blood for various tests like hormone levels, genetic testing, monitoring disease and other things patients normally have to get done at an outside lab like Quest Diagnostics or Lab Corp.

Instead, the device can stay in the clinic and the proprietary Drawbridge cartridge holding your blood would be shipped out to the third-party lab for results.

Of course, any blood diagnostics startup claiming to collect just a few drops of blood for testing on a small device is going to get compared to Theranos, which first promised to deliver results for hundreds of diseases on a single drop of blood. It’s an understatement to say things didn’t go so well for that startup and it seems it may now be running out of cash.

However, GE Ventures partner Risa Stack, who was instrumental in guiding the idea for Drawbridge says, unlike Theranos, Drawbridge only collects the blood. It doesn’t do the testing.

“Partners are going to run the tests on our stabilized samples. Our responsibility is to give them a quality sample,” Stack told TechCrunch.

GE Ventures started the company through an old school VC method of first coming up with the idea in house, with the promise of launching and funding the startup as it progresses.

The idea probably sounds fantastic to anyone who hates going to the doctor and then going out to a lab for blood work. The device also promises minimal discomfort for those who hate needles as it takes just a few drops from your upper arm. I’m told it feels like less than a pinch.

But first Drawbridge needs to get through a few hurdles. It’s early days for Drawbridge and it is just now exploring partnerships with clinics and doctor’s offices.

It will also need to go through FDA approval, which it has applied for as a medical device.

This summer GE Ventures hired on Lee McCracken to run the ship as CEO at Drawbridge and the startup intends on a commercial launch next year, pending that FDA approval.

Of course, there are other approaches to cutting out the blood collection middleman — both One Medical and Forward have in-house labs where patients can get blood work done.

There are also other blood prick diagnostics out in the medical field but, as McCracken points out, those, like Theranos, come with potential risk.

“The current sample testing process is inconvenient and challenging for patients and medical providers, alike,” McCracken said in a statement. “It requires clinical processing equipment, often a technician specifically trained to draw blood, plus a trip to the doctor’s office or hospital. By combining world class technology developed by GE Healthcare and a talented founding team to address an important market need, Drawbridge Health is well positioned to transform diagnostic testing for healthcare stakeholders, testing laboratories, patients and consumers.”

SO WHAT HAPPENED TO GENERAL ELECTRIC? PART 8 (YEARS 2010-2012)

Special Guest Blog By Ken Kinlock


Shale Gas Revolution
To make compressed natural gas (CNG) more accessible as a transportation fuel, GE Oil & Gas and Chesapeake Energy created a compact refueling solution, the CNG In A Box™ system. The benefits are impressive: For every fleet vehicle filled with CNG instead of gasoline, carbon dioxide emissions equivalents are reduced about 24%.

GE_AR12 Dividend History

Summary of Operating Segments

General Electric Company and consolidated affiliates
(In millions) 2012 2011 2010 2009 2008
REVENUES (a)
Power & Water $ 28,299 $ 25,675 $ 24,779 $ 27,389 $ 28,537
Oil & Gas 15,241 13,608 9,433 9,683 9,886
Energy Management 7,412 6,422 5,161 5,223 6,427
Aviation 19,994 18,859 17,619 18,728 19,239
Healthcare 18,290 18,083 16,897 16,015 17,392
Transportation 5,608 4,885 3,370 3,827 5,016
Home & Business
Solutions 7,967 7,693 7,957 7,816 9,304
Total industrial
segment revenues 102,811 95,225 85,216 88,681 95,801
GE Capital 46,039 49,068 49,856 51,776 68,541
Total segment
revenues 148,850 144,293 135,072 140,457 164,342
Corporate items
and eliminations (b)(1,491) 2,995 14,495 13,939 15,427
CONSOLIDATED
REVENUES $147,359 $147,288 $149,567 $154,396 $179,769

SEGMENT PROFIT
Power & Water $ 5,422 $ 5,021 $ 5,804 $ 5,592 $ 4,563
Oil & Gas 1,924 1,660 1,406 1,440 1,555
Energy Management 131 78 156 144 478
Aviation 3,747 3,512 3,304 3,923 3,684
Healthcare 2,920 2,803 2,741 2,420 2,851
Transportation 1,031 757 315 473 962
Home & Business
Solutions 311 237 404 360 287
Total industrial
segment profit 15,486 14,068 14,130 14,352 14,380
GE Capital 7,401 6,584 3,120 1,253 7,470
Total
segment profit 22,887 20,652 17,250 15,605 21,850
Corporate items and
eliminations (b) (4,842) (287) (1,013) (507) 1,516
GE interest
and other financial
charges (1,353) (1,299) (1,600) (1,478) (2,153)
GE provision for
income taxes (2,013) (4,839) (2,024) (2,739) (3,427)
Earnings from continuing operations attributable
to the Company 14,679 14,227 12,613 10,881 17,786
Earnings (loss) from discontinued operations,
net of taxes (1,038) (76) (969) 144 (376)
CONSOLIDATED NET EARNINGS ATTRIBUTABLE
TO THE COMPANY $ 13,641 $ 14,151 $ 11,644 $ 11,025 $ 17,410

POWER & WATER revenues of $28.3 billion increased $2.6 billion, or
10%, in 2012 as higher volume ($3.4 billion), driven by an increase
in sales of equipment at Wind, and an increase in other income
($0.2 billion) were partially offset by the effects of the stronger
U.S. dollar ($0.6 billion) and lower prices ($0.4 billion).
Segment profit of $5.4 billion increased $0.4 billion, or 8%,
in 2012 as higher volume ($0.7 billion), increased other income
($0.2 billion) and the impacts of deflation ($0.1 billion), were
partially offset by lower prices ($0.4 billion), lower productivity
($0.1 billion) and the effects of the stronger U.S. dollar
($0.1 billion).
Power & Water revenues of $25.7 billion increased $0.9 billion
(including $0.3 billion from acquisitions), or 4%, in 2011 as higher
volume ($0.9 billion) and the effects of the weaker U.S. dollar
($0.4 billion) were partially offset by lower prices ($0.5 billion).
Segment profit of $5.0 billion decreased $0.8 billion, or 13%, in
2011 as lower productivity ($0.7 billion), and lower prices ($0.5 billion), driven primarily by Wind, were partially offset by higher
volume ($0.2 billion) and the effects of deflation ($0.1 billion).
Power & Water segment orders decreased 10% to $24.2 billion
in 2012. Total Power & Water backlog increased 1% to $58.8 billion
at December 31, 2012, composed of equipment backlog of
$8.6 billion and services backlog of $50.2 billion. Comparable
December 31, 2011 equipment and service order backlogs
were $12.0 billion and $45.9 billion, respectively. See Corporate
Items and Eliminations for a discussion of items not allocated to
this segment.

OIL & GAS revenues of $15.2 billion increased $1.6 billion (including
$0.7 billion from acquisitions), or 12%, in 2012 as higher
volume ($2.3 billion) driven by acquisitions and an increase in
sales of both equipment and services was partially offset by the
effects of the stronger U.S. dollar ($0.7 billion).
Segment profit of $1.9 billion increased $0.3 billion, or 16%, in
2012 as higher volume ($0.3 billion) and increased productivity
($0.1 billion), reflecting increased equipment margins, were partially
offset by the effects of the stronger U.S. dollar ($0.1 billion).
Oil & Gas revenues of $13.6 billion increased $4.2 billion
(including $2.9 billion from acquisitions), or 44%, in 2011 as higher
volume ($3.8 billion) and the effects of the weaker U.S. dollar
($0.4 billion) were partially offset by lower prices ($0.1 billion).
Segment profit of $1.7 billion increased $0.3 billion, or 18%,
in 2011 as higher volume ($0.6 billion) was partially offset by
lower productivity ($0.3 billion) and lower prices ($0.1 billion).
Oil & Gas segment orders increased 16% to $18.2 billion
in 2012. Total Oil & Gas backlog increased 24% to $14.8 billion
at December 31, 2012, composed of equipment backlog of
$10.2 billion and services backlog of $4.5 billion. Comparable
December 31, 2011 equipment and service order backlogs
were $8.5 billion and $3.5 billion, respectively. See Corporate
Items and Eliminations for a discussion of items not allocated to
this segment.

ENERGY MANAGEMENT revenues of $7.4 billion increased $1.0 billion
(including $1.0 billion from acquisitions), or 15%, in 2012 as
higher volume ($1.1 billion) primarily driven by acquisitions, higher
prices ($0.1 billion) and increased other income ($0.1 billion)
were partially offset by the effects of the stronger U.S. dollar
($0.2 billion).
Segment profit of $0.1 billion increased $0.1 billion, or 68%, in
2012 as a result of higher prices ($0.1 billion) and increased other
income ($0.1 billion).
Energy Management revenues of $6.4 billion increased $1.3 billion
(including $0.8 billion from acquisitions), or 24%, in 2011 as
higher volume ($1.2 billion), mainly driven by acquisitions, the effects
of the weaker U.S. dollar ($0.1 billion) and higher prices ($0.1 billion)
were partially offset by decreased other income ($0.1 billion).
Segment profit of $0.1 billion decreased $0.1 billion, or 50%,
in 2011 as the effects of inflation ($0.1 billion) and decreased
other income ($0.1 billion) were partially offset by higher prices
($0.1 billion).
Energy Management segment orders increased 16% to
$7.9 billion in 2012. Total Energy Management backlog increased
6% to $3.8 billion at December 31, 2012, composed of equipment
backlog of $3.2 billion and services backlog of $0.6 billion.
Comparable December 31, 2011 equipment and service order
backlogs were $2.8 billion and $0.8 billion, respectively. See
Corporate Items and Eliminations for a discussion of items not
allocated to this segment.

AVIATION revenues of $20.0 billion increased $1.1 billion, or 6%, in
2012 due primarily to higher prices ($0.8 billion) and higher volume
($0.4 billion), which were driven by increased commercial
and military engine sales.
Segment profit of $3.7 billion increased $0.2 billion, or 7%, in
2012 due primarily to higher prices ($0.8 billion) and higher volume
($0.1 billion), partially offset by higher inflation ($0.3 billion)
and lower productivity ($0.3 billion).
Aviation revenues of $18.9 billion increased $1.2 billion, or
7%, in 2011 due primarily to higher volume ($1.1 billion) and
higher prices ($0.2 billion), partially offset by lower other income
($0.1 billion). Higher volume and higher prices were driven by
increased services ($0.9 billion) and equipment sales ($0.4 billion).
The increase in services revenue was primarily due to higher
commercial spares sales while the increase in equipment revenue
was primarily due to commercial engines.
Segment profit of $3.5 billion increased $0.2 billion, or 6%,
in 2011 due primarily to higher volume ($0.2 billion) and higher
prices ($0.2 billion), partially offset by higher inflation, primarily
non-material related ($0.1 billion), and lower other income
($0.1 billion). Incremental research and development and GEnx
product launch costs offset higher productivity.
Aviation equipment orders increased 8% to $13.0 billion
in 2012. Total Aviation backlog increased 3% to $102.4 billion
at December 31, 2012, composed of equipment backlog of
$22.9 billion and services backlog of $79.5 billion. Comparable
December 31, 2011 equipment and service order backlogs
were $22.5 billion and $76.5 billion, respectively. See Corporate
Items and Eliminations for a discussion of items not allocated to
this segment.

HEALTHCARE revenues of $18.3 billion increased $0.2 billion, or
1%, in 2012 due to higher volume ($0.8 billion) and other income
($0.1 billion), partially offset by the stronger U.S. dollar ($0.4 billion) and lower prices ($0.3 billion). The revenue increase, driven
by higher equipment sales, is attributable to international markets,
with the strongest growth in emerging markets.
Segment profit of $2.9 billion increased $0.1 billion, or 4%, in
2012 reflecting increased productivity ($0.4 billion), higher volume
($0.1 billion) and other income ($0.1 billion), partially offset by
lower prices ($0.3 billion) and higher inflation ($0.2 billion), primarily non-material related.
Healthcare revenues of $18.1 billion increased $1.2 billion, or
7%, in 2011 due to higher volume ($1.0 billion) and the weaker
U.S. dollar ($0.4 billion), partially offset by lower prices ($0.3 billion).
The revenue increase was split between equipment sales
($0.7 billion) and services ($0.5 billion). Revenue increased in the
U.S. and international markets, with the strongest growth in
emerging markets.
Segment profit of $2.8 billion increased 2%, or $0.1 billion, in
2011 reflecting increased productivity ($0.3 billion), higher volume
($0.2 billion) and the weaker U.S. dollar ($0.1 billion), partially
offset by lower prices ($0.3 billion) and higher inflation ($0.1 billion),primarily non-material related.

Healthcare equipment orders increased 5% to $11.1 billion
in 2012. Total Healthcare backlog increased 15% to $15.4 billion
at December 31, 2012, composed of equipment backlog of
$4.5 billion and services backlog of $10.9 billion. Comparable
December 31, 2011 equipment and service order backlogs
were $3.9 billion and $9.6 billion, respectively. See Corporate
Items and Eliminations for a discussion of items not allocated to
this segment.

TRANSPORTATION revenues of $5.6 billion increased $0.7 billion, or
15%, in 2012 due to higher volume ($0.6 billion) and higher prices
($0.1 billion). The revenue increase was split between equipment
sales ($0.4 billion) and services ($0.3 billion). The increase in
equipment revenue was primarily driven by an increase in U.S.
locomotive sales and growth in our global mining equipment
business. The increase in service revenue was due to higher
overhauls and increased service productivity.
Segment profit of $1.0 billion increased $0.3 billion, or 36%,
in 2012 as a result of higher volume ($0.1 billion), higher prices
($0.1 billion) and increased productivity ($0.1 billion), reflecting
improved service margins.
Transportation revenues of $4.9 billion increased $1.5 billion,
or 45%, in 2011 due to higher volume ($1.5 billion) related
to increased equipment sales ($0.9 billion) and services ($0.6 billion).
The increase in equipment revenue was primarily driven
by an increase in U.S. and international locomotive sales and
growth in our global mining equipment business. The increase
in service revenue was due to higher overhauls and increased
service productivity.
Segment profit of $0.8 billion increased $0.4 billion, or over
100%, in 2011 as a result of increased productivity ($0.4 billion),
reflecting improved service margins, and higher volume ($0.1 billion),
partially offset by higher inflation ($0.1 billion).
Transportation equipment orders increased 35% to $3.0 billion
in 2012. Total Transportation backlog decreased 5% to $14.4 billion
at December 31, 2012, composed of equipment backlog of
$3.3 billion and services.

AVIATION revenues of $20.0 billion increased $1.1 billion, or 6%, in
2012 due primarily to higher prices ($0.8 billion) and higher volume
($0.4 billion), which were driven by increased commercial
and military engine sales.
Segment profit of $3.7 billion increased $0.2 billion, or 7%, in
2012 due primarily to higher prices ($0.8 billion) and higher volume
($0.1 billion), partially offset by higher inflation ($0.3 billion)
and lower productivity ($0.3 billion).
Aviation revenues of $18.9 billion increased $1.2 billion, or
7%, in 2011 due primarily to higher volume ($1.1 billion) and
higher prices ($0.2 billion), partially offset by lower other income
($0.1 billion). Higher volume and higher prices were driven by
increased services ($0.9 billion) and equipment sales ($0.4 billion).
The increase in services revenue was primarily due to higher
commercial spares sales while the increase in equipment revenue
was primarily due to commercial engines.
Segment profit of $3.5 billion increased $0.2 billion, or 6%,
in 2011 due primarily to higher volume ($0.2 billion) and higher
prices ($0.2 billion), partially offset by higher inflation, primarily
non-material related ($0.1 billion), and lower other income
($0.1 billion). Incremental research and development and GEnx
product launch costs offset higher productivity.
Aviation equipment orders increased 8% to $13.0 billion
in 2012. Total Aviation backlog increased 3% to $102.4 billion
at December 31, 2012, composed of equipment backlog of
$22.9 billion and services backlog of $79.5 billion. Comparable
December 31, 2011 equipment and service order backlogs
were $22.5 billion and $76.5 billion, respectively. See Corporate
Items and Eliminations for a discussion of items not allocated to
this segment.
management’s discussion and analysis

HEALTHCARE revenues of $18.3 billion increased $0.2 billion, or
1%, in 2012 due to higher volume ($0.8 billion) and other income
($0.1 billion), partially offset by the stronger U.S. dollar ($0.4 billion)
and lower prices ($0.3 billion). The revenue increase, driven
by higher equipment sales, is attributable to international markets,
with the strongest growth in emerging markets.
Segment profit of $2.9 billion increased $0.1 billion, or 4%, in
2012 reflecting increased productivity ($0.4 billion), higher volume
($0.1 billion) and other income ($0.1 billion), partially offset by
lower prices ($0.3 billion) and higher inflation ($0.2 billion), primarily
non-material related.
Healthcare revenues of $18.1 billion increased $1.2 billion, or
7%, in 2011 due to higher volume ($1.0 billion) and the weaker
U.S. dollar ($0.4 billion), partially offset by lower prices ($0.3 billion).
The revenue increase was split between equipment sales
($0.7 billion) and services ($0.5 billion). Revenue increased in the
U.S. and international markets, with the strongest growth in
emerging markets.
Segment profit of $2.8 billion increased 2%, or $0.1 billion, in
2011 reflecting increased productivity ($0.3 billion), higher volume
($0.2 billion) and the weaker U.S. dollar ($0.1 billion), partially
offset by lower prices ($0.3 billion) and higher inflation ($0.1 billion),
primarily non-material related.
Healthcare equipment orders increased 5% to $11.1 billion
in 2012. Total Healthcare backlog increased 15% to $15.4 billion
at December 31, 2012, composed of equipment backlog of
$4.5 billion and services backlog of $10.9 billion. Comparable
December 31, 2011 equipment and service order backlogs
were $3.9 billion and $9.6 billion, respectively. See Corporate
Items and Eliminations for a discussion of items not allocated to
this segment.
TRANSPORTATION revenues of $5.6 billion increased $0.7 billion, or
15%, in 2012 due to higher volume ($0.6 billion) and higher prices
($0.1 billion). The revenue increase was split between equipment
sales ($0.4 billion) and services ($0.3 billion). The increase in
equipment revenue was primarily driven by an increase in U.S.
locomotive sales and growth in our global mining equipment
business. The increase in service revenue was due to higher
overhauls and increased service productivity.
Segment profit of $1.0 billion increased $0.3 billion, or 36%,
in 2012 as a result of higher volume ($0.1 billion), higher prices
($0.1 billion) and increased productivity ($0.1 billion), reflecting
improved service margins.
Transportation revenues of $4.9 billion increased $1.5 billion,
or 45%, in 2011 due to higher volume ($1.5 billion) related
to increased equipment sales ($0.9 billion) and services ($0.6 billion).
The increase in equipment revenue was primarily driven
by an increase in U.S. and international locomotive sales and
growth in our global mining equipment business. The increase
in service revenue was due to higher overhauls and increased
service productivity.
Segment profit of $0.8 billion increased $0.4 billion, or over
100%, in 2011 as a result of increased productivity ($0.4 billion),
reflecting improved service margins, and higher volume ($0.1 billion),
partially offset by higher inflation ($0.1 billion).
Transportation equipment orders increased 35% to $3.0 billion
in 2012. Total Transportation backlog decreased 5% to $14.4 billion
at December 31, 2012, composed of equipment backlog of
$3.3 billion and services.

Home & Business Solutions revenues of $7.7 billion decreased
$0.3 billion, or 3%, in 2011 reflecting a decrease at Appliances
partially offset by higher revenues at Lighting. Overall, revenues
decreased primarily as a result of lower volume ($0.4 billion) principally
at Appliances, partially offset by the weaker U.S. dollar
($0.1 billion) and higher prices.
Segment profit of $0.2 billion decreased 41%, or $0.2 billion,
in 2011 as the effects of inflation ($0.3 billion) were partially offset
by the effects of the weaker U.S. dollar, increased productivity
and higher prices. See Corporate Items and Elimination for a discussion
of items not allocated to this segment.

Geographic Operations
Our global activities span all geographic regions and primarily
encompass manufacturing for local and export markets, import
and sale of products produced in other regions, leasing of aircraft,
sourcing for our plants domiciled in other global regions
and provision of financial services within these regional economies.
Thus, when countries or regions experience currency and/
or economic stress, we often have increased exposure to certain
risks, but also often have new opportunities that include, among
other things, more opportunities for expansion of industrial and
financial services activities through purchases of companies or
assets at reduced prices and lower U.S. debt financing costs.

Revenues are classified according to the region to which products
and services are sold. For purposes of this analysis, the U.S.
is presented separately from the remainder of the Americas.
GEOGRAPHIC REVENUES
(In billions) 2012 2011 2010
U.S. $ 70.4 $ 69.8 $ 75.1
Europe 27.4 29.0 30.9
Pacific Basin 24.5 23.2 20.8
Americas 13.2 13.3 11.7
Middle East and Africa 11.9 12.0 11.1
Total $147.4 $147.3 $149.6
Global revenues were $76.9 billion in 2012, compared with
$77.5 billion and $74.5 billion in 2011 and 2010, respectively. Global
revenues to external customers as a percentage of consolidated
revenues were 52% in 2012, compared with 53% in 2011 and 50%
in 2010. The effects of currency fluctuations on reported results
decreased revenues by $2.6 billion in 2012 and increased revenues
by $2.5 billion and $0.5 billion in 2011 and 2010, respectively.

Global revenues were $76.9 billion in 2012, compared with
$77.5 billion and $74.5 billion in 2011 and 2010, respectively. Global
revenues to external customers as a percentage of consolidated
revenues were 52% in 2012, compared with 53% in 2011 and 50%
in 2010. The effects of currency fluctuations on reported results
decreased revenues by $2.6 billion in 2012 and increased revenues
by $2.5 billion and $0.5 billion in 2011 and 2010, respectively.
GE global revenues, excluding GECC, in 2012 were $57.3 billion,
up 5% over 2011. Increases in growth markets of 20% in
China, 22% in Australia and New Zealand and 8% in Latin America
more than offset a decrease of 36% in India. These revenues as
a percentage of GE total revenues, excluding GECC, were 57%
in 2012, compared with 55% and 50% in 2011 and 2010, respectively.
GE global revenues, excluding GECC, were $54.3 billion in
2011, up 9% from 2010, primarily resulting from increases in Latin
America, China and Australia and New Zealand, partially offset by
a decrease in Europe.
GECC global revenues decreased 15% to $19.7 billion in 2012,
compared with $23.2 billion and $24.7 billion in 2011 and 2010,
respectively, primarily as a result of decreases in Europe. GECC
global revenues as a percentage of total GECC revenues were
43% in 2012, compared with 47% and 50% in 2011 and 2010,
respectively. GECC global revenue decreased by 6% in 2011 from
$24.7 billion in 2010, primarily as a result of decreases in Europe.
TOTAL ASSETS (CONTINUING OPERATIONS)
December 31 (In billions) 2012 2011
U.S. $346.6 $336.6
Europe 192.8 212.5
Pacific Basin 56.4 62.3
Americas 33.6 46.7
Middle East and Africa 54.8 58.4
Total $684.2 $716.5

Total assets of global operations on a continuing basis were
$337.6 billion in 2012, a decrease of $42.3 billion, or 11%, from
2011. GECC global assets on a continuing basis of $277.6 billion at
the end of 2012 were 13% lower than at the end of 2011, reflecting
declines in Europe, primarily due to repayment of long-term
debt, decreases in the fair value of derivative instruments and
dispositions and portfolio run-off in various businesses at
Consumer. See GECC Selected European Exposures section.
Financial results of our global activities reported in U.S. dollars
are affected by currency exchange. We use a number of techniques
to manage the effects of currency exchange, including
selective borrowings in local currencies and selective hedging of
significant cross-currency transactions. Such principal currencies
are the pound sterling, the euro, the Japanese yen, the Canadian
dollar and the Australian dollar.

WORKING CAPITAL, representing GE current receivables and
inventories, less GE accounts payable and progress collections,
increased $1.0 billion at December 31, 2012, compared to
December 31, 2011 due to an increase in inventory and lower
progress collections, partially offset by decreased accounts receivable.
As Power & Water, Oil & Gas and Aviation deliver units out of their backlogs over the next few years, progress collections of
$10.9 billion at December 31, 2012, will be earned, which, along
with progress collections on new orders, will impact working
capital. We discuss current receivables and inventories, two important
elements of working capital, in the following paragraphs.
CURRENT RECEIVABLES for GE totaled to $10.9 billion at the end
of 2012 and $11.8 billion at the end of 2011, and included $7.9 billion
due from customers at the end of 2012 compared with
$9.0 billion at the end of 2011. GE current receivables turnover
was 8.8 in 2012, compared with 8.3 in 2011.
INVENTORIES for GE totaled to $15.3 billion at December 31, 2012,
up $1.6 billion from the end of 2011. This increase reflected higher
inventories across all industrial segments. GE inventory turnover
was 6.7 and 7.0 in 2012 and 2011, respectively.

SO WHAT HAPPENED TO GENERAL ELECTRIC? PART 7 (YEARS 2007-2009)

Special Guest Blog By Ken Kinlock

(Photo of Jeffrey Immelt from 2009 Annual Report)

Time magazine called this era “The Decade From Hell,” and “when you are going through hell,” Winston Churchill advised, “keep going.”

As we navigated these uncharted waters, we had several goals:
(1) keep GE safe and secure;
(2) execute and position our infrastructure businesses to perform through the cycle;
(3) create financial flexibility;
(4) and protect the GE franchise and brand.

GE built leadership franchises in Energy, Oil & Gas, Healthcare, Aviation, Transportation, Water and Consumer Products. GE has grown our earnings by almost 10% annually for two decades with high returns and strong cash flow.

GE is repositioning GE Capital as a smaller and more focused specialty finance franchise. GE’s competitive advantage is in value-added origination and risk management.

Reducing GE’s ownership stake in NBC Universal (NBCU) was a
difficult decision, but it offers important benefits to the Company.

GE expects 2010 earnings to be flat with 2009. In 2011 and beyond, we expect GE to generate solid earnings growth, even if the economic recovery is uneven. GE will achieve this growth while generating substantial “free cash” that could further enhance investor returns.

GE wants to help lead an American growth renewal. GE is investing
more in technology than at any time in company history. GE is rebuilding manufacturing capability. GE is one of the country’s biggest exporters, with $18 billion in export-related revenue.

(In millions) 2009 2008 2007 2006 2005
Revenues
Energy Infrastructure $ 37,134 $ 38,571 $ 30,698 $ 25,221 $ 21,921
Technology Infrastructure 42,474 46,316 42,801 37,687 33,873
NBC Universal 15,436 16,969 15,416 16,188 14,689
Capital Finance 50,622 67,008 66,301 56,378 49,071
Consumer & Industrial 9,703 11,737 12,663 13,202 13,040
Total segment revenues 155,369 180,601 167,879 148,676 132,594
Corporate items
and eliminations 1,414 1,914 4,609 2,892 3,668
Consolidated revenues $156,783 $182,515 $172,488 $151,568 $136,262

Segment profit
Energy Infrastructure $ 6,842 $ 6,080 $ 4,817 $ 3,518 $ 3,222
Technology Infrastructure 7,489 8,152 7,883 7,308 6,188
NBC Universal 2,264 3,131 3,107 2,919 3,092
Capital Finance 2,344 8,632 12,243 10,397 8,414
Consumer & Industrial 400 365 1,034 970 732
Total segment profit 19,339 26,360 29,084 25,112 21,648
Corporate items and
eliminations (3,904) (2,691) (1,840) (1,548) (372)
GE interest and
other financial charges (1,478) (2,153) (1,993) (1,668) (1,319)
GE provision for
income taxes (2,739) (3,427) (2,794) (2,552) (2,678)
Earnings from
continuing operations 11,218 18,089 22,457 19,344 17,279
Earnings (loss) from
discontinued operations,
net of taxes (193) (679) (249) 1,398 (559)
Consolidated net earnings
attributable
to the Company $ 11,025 $ 17,410 $ 22,208 $ 20,742 $ 16,720

The remainder of the 2009 Annual Report is available EASILY:
https://www.ge.com/ar2009/pdf/ge_ar_2009.pdf

SO WHAT HAPPENED TO GENERAL ELECTRIC? PART 6 (Years 2004-2006)

Special Guest Blog By Ken Kinlock

(Photo from a friend. Interior of Building 273 in Schenectady)

 

Years 2004-2006
When I review the annual reports of the General Electric Company, they combine the industrial manufacturing, services and media businesses of General Electric Company (GE) with the financial services businesses of General Electric Capital Services, Inc. (GECS or financial services).

I am going to not discuss the last category because it will DISAPPEAR soon. Nor will I discuss NBC. During these years GE invested in other lines of power generation, such as wind power, and developed product services. As a result, Energy revenues have grown signifiantly over these years and the business is positioned well for continued growth in 2007 and beyond. GE also continued to invest in market-leading technology and services at Aviation, Water and Transportation;

The Plastics business was hit particularly hard during these three
years because of additional pressure from significant inflation in
natural gas and certain raw materials such as benzene. As a result
of these factors and the 2006 sales of GE Supply and Advanced
Materials, we do not expect this segment to experience significant
growth in 2007.

Per-share dividends of $1.03 were up 13% from 2005, following an 11%
increase from the preceding year. In December 2006, the Board of Directors raised our quarterly dividend 12% to $0.28 per share. GE has rewarded shareowners with over 100 consecutive years of dividends, with 31 consecutive years of dividend growth.

Of interest to many of our readers, the principal pension plan had a surplus of $11.5 billion at December 31, 2006. GE will not make any contributions to the GE Pension Plan in 2007. To the best of our ability to forecast the next five years, GE does not anticipate making contributions to that plan as long as expected investment returns are achieved.

Selected Segment Operating Results (in millions)
2006 2005 2004
Infrastructure $47,429 $41,803 $37,373
Healthcare $16,562 $15,153 $13,456
Industrial $33,494 $32,631 $30,722

Selected Segment Profit (in millions)
2006 2005 2004
Infrastructure $9,040 $7,769 $6,797
Healthcare $3,143 $2,665 $2,286
Industrial $2,696 $2,559 $1,833

HHHmmmm Jeff has learned what the word “RECAST” means

Now to break it down

(In millions) 2006 2005 2004
REVENUES
Aviation $13,152 $11,904 $11,094
Aviation Financial Services 4,177 3,504 3,159
Energy 19,133 16,525 14,586
Energy Financial Services 1,664 1,349 972
Oil & Gas 4,340 3,598 3,135
Transportation 4,169 3,577 3,007
SEGMENT PROFIT
Aviation $ 2,909 $ 2,573 $ 2,238
Aviation Financial Services 1,108 764 520
Energy 3,000 2,665 2,543
Energy Financial Services 695 646 376
Oil & Gas 548 411 331
Transportation 781 524 516

GE’S TOTAL BACKLOG of firm unfilled orders at the end of 2006
was $46.5 billion, an increase of 29% from year-end 2005,
reflecting increased demand at Infrastructure. Of the total backlog,
$32.2 billion related to products, of which 63% was scheduled
for delivery in 2007. Product services orders, included in this
reported backlog for only the succeeding 12 months, were
$14.3 billion at the end of 2006. Orders constituting this backlog
may be cancelled or deferred by customers, subject in certain
cases to penalties.

SO WHAT HAPPENED TO GENERAL ELECTRIC? PART 5

Special Guest Blog By Ken Kinlock

(Featured photo is Burlington Northern locomotive made by GE Tansportation Systems)

2003:

GE Energy is one of the world’s leading suppliers of technology to the energy industry, providing a comprehensive range of solutions for oil and gas, traditional and renewable power generation and energy management.

GE Healthcare is a global leader in diagnostic and interventional medical imaging, information and services technology. The pending acquisition of
Amersham plc, a world leader in diagnostic imaging agents and life sciences, will transform GE Healthcare into the world’s most comprehensive
medical diagnostics company.

America’s first broadcast network, NBC is a diverse, international media company with the Number One-ranked U.S. television network, 29 owned and
operated stations, cable channels CNBC, MSNBC and Bravo, and Spanish-language broadcaster Telemundo. NBC and Vivendi Universal Entertainment have agreed to merge and form NBC Universal, creating one of the world’s fastest-growing media companies.

GE Transportation comprises Aircraft Engines and Rail, two industry-leading business units whose products and services span the aviation, rail, marine and off-highway industries with jet engines for military
and civil aircraft, freight and passenger locomotives, motorized systems for mining trucks and drills, and gas turbines for marine and industrial applications.

GE Infrastructure is a high-technology platform comprising some of GE’s fastest-growing businesses. They offer a set of protection and productivity solutions to some of the most pressing issues that industries face: pure water, safe facilities, plant automation and sensing applications for operating environments.

GE Advanced Materials is a world leader in providing customers in a wide range of industries with materials solutions through engineering thermoplastics, siliconbased products and technology platforms, and fused
quartz and ceramics.

GE Consumer & Industrial serves customers in more than 100 countries with appliances, lighting products and integrated industrial equipment, systems and services sold under the Monogram®, Profile™, GE®, Hotpoint®, SmartWater™ and Reveal® consumerbrands, and the Entellisys™ industrial brand.

The board and I are not selling insurance businesses out of frustration at their operating erformance. Insurance is simply not the right business for us in the future. It requires significant capital to grow, and it does not fully leverage GE’s capabilities.

We made great progress in energy efficiency. We introduced four leading products in 2003: the H System™ gas turbine; a 3.6-megawatt wind turbine; the GE Evolution™ Series locomotive engine; and the GE90-115B jet engine.

ON JANUARY 1, 2004, WE SIMPLIFIED OUR ORGANIZATION. With 11 operating
segments, we will achieve lower costs of operations in platforms
that will accommodate our future growth. The new segments
most affected by this change follow:
• Advanced Materials — plastics, silicones and quartz
• Infrastructure—water, security, sensors and Fanuc Automation
• Transportation — aircraft engines, rail and certain parts of
GE Supply
• Consumer and Industrial—appliances, lighting and industrial
• Commercial Finance — the combination of Commercial
Finance and the Fleet Services business that was previously
part of Equipment Management
• Equipment & Other Services—the combination of Equipment
Management (excluding Fleet Services) and the All Other
GECS segments

For the years ended December 31 (In millions) 2003 2002 2001 2000 1999
REVENUES
Advanced Materials $7,078 $6,963 $7,069 $8,020 $7,118
Commercial Finance 20,813 19,592 17,723 17,549 14,506
Consumer Finance 12,845 10,266 9,508 9,320 7,562
Consumer & Industrial 12,843 12,887 13,063 13,406 13,051
Energy 19,082 23,633 21,030 15,703 10,998
Equipment & Other Services 4,427 5,545 7,735 15,074 14,768
Healthcare 10,198 8,955 8,409 7,275 6,171
Infrastructure 3,078 1,901 392 486 421
Insurance 26,194 23,296 23,890 24,766 19,433
NBC 6,871 7,149 5,769 6,797 5,790
Transportation 13,515 13,685 13,885 13,285 13,293
Corporate items and eliminations (2,757) (1,662) (2,057) (1,296) (961)
CONSOLIDATED REVENUES $134,187 $132,210 $126,416 $130,385 $112,150

SEGMENT PROFIT
Advanced Materials ($616) $1,000 $1,433 $1,864 $1,588
Commercial Finance 3,910 3,310 2,879 2,528 1,940
Consumer Finance 2,161 1,799 1,602 1,295 848
Consumer & Industrial 577 567 894 1,270 1,330
Energy 4,109 6,294 4,897 2,598 1,583
Equipment & Other Services (419) (388) (222) (212) 25
Healthcare 1,701 1,546 1,498 1,321 1,107
Infrastructure 462 297 26 45 63
Insurance 2,102 (95) 1,879 2,201 2,142
NBC 1,998 1,658 1,408 1,609 1,427
Transportation 2,661 2,510 2,577 2,511 2,233
Total segment profit 19,878 18,498 18,871 17,030 14,286
GECS goodwill amortization — — (552) (620) (512)
GE corporate items and eliminations (491) 1,041 819 935 960
GE interest and other financial charges (941) (569) (817) (811) (810)
GE provision for income taxes (2,857) (3,837) (4,193) (3,799) (3,207)
Earnings before accounting changes 15,589 15,133 14,128 12,735 10,717
Cumulative effect of accounting changes (587) (1,015) (444) — —
CONSOLIDATED NET EARNINGS $÷15,002 $÷14,118 $÷13,684 $÷12,735 $÷10,717

Now let’s next see what Jeff ended up with in 2004!