United
States Securities and Exchange Commission
WASHINGTON,
D.C. 20549
FORM
10-K
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(Mark
One)
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þ Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the fiscal year ended December 31, 2009
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or
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¨ Transition
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the transition period from ___________to ___________
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Commission
file number 001-00035
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General
Electric Company
(Exact
name of registrant as specified in
charter)
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New
York
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14-0689340
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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3135
Easton Turnpike, Fairfield, CT
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06828-0001
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203/373-2211
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(Address
of principal executive offices)
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(Zip
Code)
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(Telephone
No.)
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Securities
Registered Pursuant to Section 12(b) of the Act:
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Title
of each class
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Name
of each exchange on which registered
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Common
stock, par value $0.06 per share
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New
York Stock Exchange
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Securities
Registered Pursuant to Section 12(g) of the Act:
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(Title
of class)
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Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes ¨ No þ
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes ¨ No þ
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes þ No ¨
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. þ
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes þ No ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large
accelerated filer þ
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Accelerated
filer ¨
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Non-accelerated
filer ¨
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Smaller
reporting company ¨
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes ¨ No þ
The
aggregate market value of the outstanding common equity of the registrant as of
the last business day of the registrant’s most recently completed second fiscal
quarter was $124.9 billion. Affiliates of the Company beneficially own, in the
aggregate, less than one-tenth of one percent of such shares. There were
10,669,821,000 shares of voting common stock with a par value of $0.06
outstanding at January 29, 2010.
DOCUMENTS
INCORPORATED BY REFERENCE
The
definitive proxy statement relating to the registrant’s Annual Meeting of
Shareowners, to be held April 28, 2010, is incorporated by reference in Part III
to the extent described therein.
(1)
Table
of Contents
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Page
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Part I
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Business
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3
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Risk
Factors
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14
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Unresolved
Staff Comments
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20
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Properties
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20
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Legal
Proceedings
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20
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Submission
of Matters to a Vote of Security Holders
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21
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Part II
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Market
for Registrant’s Common Equity, Related Stockholder Matters and
Issuer
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Purchases
of Equity Securities
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22
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Selected
Financial Data
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25
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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26
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Quantitative
and Qualitative Disclosures About Market Risk
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81
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Financial
Statements and Supplementary Data
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81
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Changes
in and Disagreements With Accountants on Accounting
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and
Financial Disclosure
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168
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Controls
and Procedures
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168
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Other
Information
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168
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Part III
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Directors,
Executive Officers and Corporate Governance
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168
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Executive
Compensation
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169
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Security
Ownership of Certain Beneficial Owners and Management and
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Related
Stockholder Matters
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169
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Certain
Relationships and Related Transactions, and Director
Independence
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169
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Principal
Accounting Fees and Services
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169
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Part IV
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Exhibits,
Financial Statement Schedules
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170
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175
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(2)
Part
I
General
Unless
otherwise indicated by the context, we use the terms “GE,” “GECS” and “GE
Capital” on the basis of consolidation described in Note 1 to the consolidated
financial statements in Part II, Item 8. “Financial Statements and Supplementary
Data” of this Form 10-K Report. Also, unless otherwise indicated by the context,
“General Electric” means the parent company, General Electric Company (the
Company).
General
Electric’s address is 1 River Road, Schenectady, NY 12345-6999; we also maintain
executive offices at 3135 Easton Turnpike, Fairfield, CT
06828-0001.
We are
one of the largest and most diversified technology, media, and financial
services corporations in the world. With products and services ranging from
aircraft engines, power generation, water processing, and household appliances
to medical imaging, business and consumer financing, media content and
industrial products, we serve customers in more than 100 countries and employ
about 300,000 people worldwide. Since our incorporation in 1892, we
have developed or acquired new technologies and services that have broadened and
changed considerably the scope of our activities.
In
virtually all of our global business activities, we encounter aggressive and
able competition. In many instances, the competitive climate is characterized by
changing technology that requires continuing research and development. With
respect to manufacturing operations, we believe that, in general, we are one of
the leading firms in most of the major industries in which we participate. The
NBC Television Network is a major U.S. commercial broadcast television network.
NBC Universal also competes with other film and television programming producers
and distributors, cable/satellite television networks and theme park operators.
The businesses in which GECS engages are subject to competition from various
types of financial institutions, including commercial banks, thrifts, investment
banks, broker-dealers, credit unions, leasing companies, consumer loan
companies, independent finance companies and finance companies associated with
manufacturers.
This
document contains “forward-looking statements” – that is, statements related to
future, not past, events. In this context, forward-looking statements often
address our expected future business and financial performance and financial
condition, and often contain words such as “expect,” “anticipate,” “intend,”
“plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their
nature address matters that are, to different degrees, uncertain. For us,
particular uncertainties that could cause our actual results to be materially
different than those expressed in our forward-looking statements include: the
severity and duration of current economic and financial conditions, including
volatility in interest and exchange rates, commodity and equity prices and the
value of financial assets; the impact of U.S. and foreign government programs to
restore liquidity and stimulate national and global economies; the impact of
conditions in the financial and credit markets on the availability and cost of
GE Capital’s funding and on our ability to reduce GE Capital’s asset levels as
planned; the impact of conditions in the housing market and unemployment rates
on the level of commercial and consumer credit defaults; our ability to maintain
our current credit rating and the impact on our funding costs and competitive
position if we do not do so; the soundness of other financial institutions with
which GE Capital does business; the adequacy of our cash flow and earnings and
other conditions which may affect our ability to maintain our quarterly dividend
at the current level; the level of demand and financial performance of the major
industries we serve, including, without limitation, air and rail transportation,
energy generation, network television, real estate and healthcare; the impact of
regulation and regulatory, investigative and legal proceedings and legal
compliance risks, including the impact of proposed financial services
regulation; strategic actions, including acquisitions and dispositions and our
success in integrating acquired businesses; and numerous other matters of
national, regional and global scale, including those of a political, economic,
business and competitive nature. These uncertainties may cause our actual future
results to be materially different than those expressed in our forward-looking
statements. These uncertainties are described in more detail in Part I, Item 1A.
"Risk Factors" of this Form 10-K Report. We do not undertake to update our
forward-looking statements.
(3)
Our
consolidated global revenues were $84.3 billion in 2009, compared with $97.2
billion in 2008 and $86.3 billion in 2007. For additional information about our
geographic operations, see the Geographic Operations section in Part II, Item 7.
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” of this Form 10-K Report.
Operating
Segments
Segment
revenue and profit information and additional financial data and commentary on
recent financial results for operating segments are provided in the Segment
Operations section in Part II, Item 7. “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and in Note 27 to the
consolidated financial statements in Part II, Item 8. “Financial Statements and
Supplementary Data” of this Form 10-K Report.
Operating
businesses that are reported as segments include Energy Infrastructure,
Technology Infrastructure, NBC Universal, Capital Finance and Consumer &
Industrial. Net earnings of GECS and the effect of transactions between segments
are eliminated to arrive at total consolidated data. A summary description of
each of our operating segments follows.
Results
for 2009 and prior periods in this section are reported on the basis under which
we managed our business in 2009 and do not reflect the January 2010
reorganization described in this section.
We also
continue our longstanding practice of providing supplemental information for
certain businesses within the segments.
Energy
Infrastructure
Energy
Infrastructure (23.7%, 21.1% and 17.8% of consolidated revenues in 2009, 2008
and 2007, respectively) is a leader in the field of development, implementation
and improvement of products and technologies that harness resources such as
wind, oil, gas and water.
Our
operations are located in North America, Europe, Asia, South America and
Africa.
Energy
Energy
serves power generation, industrial, government and other customers worldwide
with products and services related to energy production, distribution and
management. We offer wind turbines as part of our renewable energy portfolio,
which also includes solar technology. We also sell aircraft engine derivatives
for use as industrial power sources. We sell gas turbines and generators that
are used principally in power plants for generation of electricity and for
industrial cogeneration and mechanical drive applications. We are a leading
provider of Integrated Gasification Combined Cycle (IGCC) technology design and
development. IGCC systems convert coal and other hydrocarbons into synthetic gas
that, after cleanup, is used as the primary fuel for gas turbines in
combined-cycle systems. IGCC systems produce fewer air pollutants compared with
traditional pulverized coal power plants. We sell steam turbines and generators
to the electric utility industry and to private industrial customers for
cogeneration applications. Nuclear reactors, fuel and support services for both
new and installed boiling water reactors are offered through joint ventures with
Hitachi and Toshiba. In addition, we design and manufacture motors and control
systems used in industrial applications primarily for oil and gas extraction and
mining. We provide our customers with total solutions to meet their needs
through a complete portfolio of aftermarket services, including equipment
upgrades, long-term maintenance service agreements, repairs, equipment
installation, monitoring and diagnostics, asset management and performance
optimization tools, remote performance testing and Dry Low NOx (DLN) tuning. We
continue to invest in advanced technology development that will provide more
value to our customers and more efficient solutions that comply with today’s
strict environmental regulations.
In
addition, Energy offers water treatment solutions for industrial and municipal
water systems including the supply and related services of specialty chemicals,
water purification systems, pumps, valves, filters and fluid handling equipment
for improving the performance of water, wastewater and process systems,
including mobile treatment systems and desalination processes.
(4)
Energy
is party to revenue sharing programs that share the financial results of certain
aero-derivative lines. These businesses are controlled by Energy, but
counterparties have an agreed share of revenues as well as development and
component production responsibilities. At December 31, 2009, such counterparty
interests ranged from 5% to 49% of various programs; associated distributions to
such counterparties are accounted for as costs of production.
Worldwide
competition for power generation products and services is intense. Demand for
power generation is global and, as a result, is sensitive to the economic and
political environment of each country in which we do business. The balance of
regional growth and demand side management are important factors to evaluate as
we plan for future development.
Effective
January 1, 2010, the Sensing & Inspection Technologies and Digital Energy
businesses of the Enterprise Solutions business in the Technology Infrastructure
segment and the Industrial business in the Consumer & Industrial segment
became part of the Energy business.
Oil
& Gas
Our
technology helps oil and gas companies make more efficient and sustainable use
of the world's energy resources.
Oil
& Gas supplies mission critical equipment for the global oil and gas
industry, used in applications spanning the entire value chain from drilling and
completion through production, liquefied natural gas (LNG) and pipeline
compression, pipeline inspection, and including downstream processing in
refineries and petrochemical plants. The business designs and manufactures
surface and subsea drilling and production systems, equipment for floating
production platforms, compressors, turbines, turboexpanders, high pressure
reactors, industrial power generation and a broad portfolio of auxiliary
equipment.
To
ensure that the installed base is maintained at peak condition, our service
business has over 40 service centers and workshops in the world's main oil and
gas extraction and production regions. The business also provides upgrades to
customers’ machines, using the latest available technology, to extend production
capability and environmental performance.
For
information about orders and backlog, see the Segment Operations section in Part
II, Item 7. “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” of this Form 10-K Report.
Technology
Infrastructure
Technology
Infrastructure (27.1%, 25.4% and 24.8% of consolidated revenues in 2009, 2008
and 2007, respectively) is one of the world’s leading providers of essential
technologies to developed, developing and emerging countries. Around the world,
we are helping build healthcare, transportation and technology
infrastructure.
Our
operations are located in North America, Europe, Asia and South
America.
Aviation
Aviation
produces, sells and services jet engines, turboprop and turbo shaft engines, and
related replacement parts for use in military and commercial aircraft. Our
military engines are used in a wide variety of aircraft including fighters,
bombers, tankers, helicopters and surveillance aircraft, as well as marine
applications, and our commercial engines power aircraft in all categories of
range: short/medium, intermediate and long-range, as well as executive and
regional aircraft. We also produce and market engines through CFM International,
a company jointly owned by GE and Snecma, a subsidiary of SAFRAN of France, and
Engine Alliance, LLC, a company jointly owned by GE and the Pratt & Whitney
division of United Technologies Corporation. New engines are also being designed
and marketed in joint ventures with Rolls-Royce Group plc and Honda Aero, Inc.,
a division of Honda Motor Co., Ltd.
Aviation
is party to agreements in which the financial results, as well as production
responsibilities, of certain aircraft and marine engine lines are shared. These
agreements take the form of both joint ventures and revenue sharing
programs.
(5)
Joint
ventures market and sell particular aircraft engine lines, but require
negligible direct investment because the venture parties conduct essentially all
of the development, production, assembly and aftermarket support activities.
Under these agreements, Aviation supplies certain engine components and retains
related intellectual property rights. The CFM56 engine line is the product of
CFM International and the GP7000 engine line is the product of Engine Alliance,
LLC.
Revenue
sharing programs are a standard form of cooperation for specific product
programs in the aviation industry. These businesses are controlled by Aviation,
but counterparties have an agreed share of revenues as well as development and
component production responsibilities. At December 31, 2009, such counterparty
interests ranged from 2% to 49% of various programs; associated distributions to
such counterparties are accounted for as costs of production.
Aviation
also produces global aerospace systems and equipment, including airborne
platform computing systems, power generation and distribution products,
mechanical actuation products and landing gear, plus various engine components
for use in both military and commercial aircraft.
We
provide maintenance, component repair and overhaul services (MRO), including
sales of replacement parts for many models of engines and repair and overhaul of
engines manufactured by competitors. These MRO services are often provided under
long-term maintenance contracts.
The
worldwide competition in aircraft jet engines and MRO (including parts sales) is
intense. Both U.S. and export markets are important. Product development cycles
are long and product quality and efficiency are critical to success. Research
and development expenditures are important in this business, as are focused
intellectual property strategies and protection of key aircraft engine design,
manufacture, repair and product upgrade technologies. Our products and services
are subject to a number of regulatory standards.
Potential
sales for any engine are limited by, among other things, its technological
lifetime, which may vary considerably depending upon the rate of advance in
technology, the small number of potential customers and the limited number of
relevant airframe applications. Aircraft engine orders tend to follow military
and airline procurement cycles, although these cycles differ from each
other.
Enterprise
Solutions
Enterprise
Solutions offers integrated solutions using sensors for temperature, pressure,
moisture, gas and flow rate as well as non-destructive testing inspection
equipment, including radiographic, ultrasonic, remote visual and eddy current.
Enterprise Solutions also offers security and life safety technologies,
including intrusion and access control, video surveillance and sensor monitoring
equipment, fire detection and real estate and property control. In addition, it
provides protection and control, communications, power sensing and power quality
products and services that increase the reliability of electrical power networks
and critical equipment and offering wireless data transmission. Plant
automation, hardware, software and embedded computing systems including
controllers, embedded systems, advanced software, motion control, operator
interfaces and industrial computers are also provided by Enterprise Solutions.
Markets are extremely diverse. Products and services are sold to residential,
commercial and industrial end-users, including utilities, original equipment
manufacturers, electrical distributors, retail outlets, airports, railways, and
transit authorities. Increasingly, products and services are developed for and
sold in global markets.
During
2009, Enterprise Solutions sold an 81% interest in our safety screening and
detection business, GE Homeland Protection, Inc., to SAFRAN. GE also dissolved
its joint venture with FANUC Ltd. resulting in GE retaining the global software,
services, embedded systems and control systems businesses. In addition, during
2009 GE signed a definitive agreement with United Technologies Corporation to
sell our security and life safety solutions business, GE Security. The sale is
expected to close in early 2010.
(6)
Effective
January 1, 2010, the retained portion of the GE Fanuc Intelligent Platforms
business was included in our newly-created segment, Home & Business
Solutions. The Sensing & Inspection Technologies and Digital Energy
businesses became part of the Energy business within the Energy Infrastructure
segment. The Security business will be reported in Corporate Items and
Eliminations pending its expected sale.
Healthcare
Healthcare
has expertise in medical imaging and information technologies, medical
diagnostics, patient monitoring systems, disease research, drug discovery and
biopharmaceutical manufacturing technologies. We are dedicated to predicting and
detecting disease earlier, monitoring its progress and informing physicians, and
helping them to tailor treatment for patients. Healthcare manufactures, sells
and services a wide range of medical equipment that helps provide a fast,
non-invasive way for doctors to see broken bones, diagnose trauma cases in the
ER, view the heart and its function, and identify early stages of cancers or
brain disorders. With X-ray, digital mammography, Computed Tomography (CT),
Magnetic Resonance (MR) and Molecular Imaging technologies, Healthcare creates
industry-leading products that allow clinicians to see inside the human body
more clearly than ever. In addition, Healthcare manufactured technologies
include patient monitoring, diagnostic cardiology, ultrasound, bone
densitometry, anesthesiology and oxygen therapy, and neonatal and critical care
devices. Medical diagnostics and life sciences products include diagnostic
imaging agents used in medical scanning procedures, drug discovery,
biopharmaceutical manufacturing and the latest in cellular
technologies.
Our
product services include remote diagnostic and repair services for medical
equipment manufactured by GE and by others, as well as computerized data
management and customer productivity services.
We
compete with a variety of U.S. and non-U.S. manufacturers and services
operations. Technological competence and innovation, excellence in design, high
product performance, quality of services and competitive pricing are among the
key factors affecting competition for these products and services. Throughout
the world, we play a role in delivering new technology to improve patient
outcomes and productivity tools to help control healthcare costs.
Our
products are subject to regulation by numerous government agencies, including
the FDA, as well as various laws that apply to claims submitted under Medicare,
Medicaid or other government funded healthcare programs.
Transportation
Transportation
provides technology solutions for customers in a variety of industries including
railroad, transit, mining, oil and gas, power generation and marine. We serve
customers in more than 100 countries.
Transportation
manufactures high-horsepower diesel-electric locomotives, including the
Evolution Series™, the most technologically advanced and most fuel efficient
locomotive, which meets or exceeds the U.S. Environmental Protection Agency’s
Tier II requirements. We also offer leading drive technology solutions to the
mining, transit, marine and stationary, and drilling industries. Our motors
operate in thousands of applications, from electrical drive systems for large
haulage trucks used in the mining industry to transit cars and drilling rigs,
and our engines are used for marine power as well as stationary power generation
applications. We also provide gearing technology for critical applications such
as wind turbines.
Transportation
also provides a portfolio of service offerings designed to improve fleet
efficiency and reduce operating expenses, including repair services, locomotive
enhancements, modernizations, and information-based services like remote
monitoring and diagnostics. We provide train control products, railway
management services, and signaling systems to increase service levels, optimize
asset utilization, and streamline operations for railroad owners and operators.
We deliver leading edge tools that improve asset availability and reliability,
optimize network planning, and control network execution to plan.
For
information about orders and backlog, see the Segment Operations section in Part
II, Item 7. “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” of this Form 10-K Report.
(7)
NBC
Universal
NBC
Universal (NBCU) (9.8%, 9.3% and 8.9% of consolidated revenues in 2009, 2008 and
2007, respectively) is a diversified media and entertainment company focused on
the development, production and marketing of entertainment, news and information
to a global audience. NBCU, which is 80-percent owned by General Electric and
20-percent owned by Vivendi S.A., is engaged in the production and distribution
of film and television programming; the operation of cable/satellite television
networks around the world; the broadcast of network television through owned and
affiliated television stations within the United States; and investment and
programming activities in digital media and the Internet. Our film company,
Universal Pictures, is engaged in the production and world-wide distribution of
theatrical, home entertainment and television programming. We own the theme park
Universal Studios Hollywood, operate and hold an ownership interest in the
Universal Studios Florida theme parks and brand, design and develop
international theme parks under exclusive licenses. Our cable/satellite
television networks provide produced and acquired entertainment, news and
information programming to households world-wide. Our cable/satellite television
networks include USA, Bravo, CNBC, SYFY, MSNBC, Oxygen, UniHD, Chiller, Sleuth,
mun2 and branded channels across Europe, Asia and Latin America. The NBC
television network is a major U.S. commercial broadcast television network.
Together, the NBC television network and Telemundo, our U.S. Spanish-language
broadcast television network, serve 234 affiliated stations within the United
States. At December 31, 2009, we owned and operated 26 television stations each
subject to U.S. Federal Communications Commission regulation. We have exclusive
U.S. television rights to the 2010 and 2012 Olympic Games, National Football
League Sunday Night Football and the Super Bowl in 2012.
NBCU is
subject to a wide range of factors, which could adversely affect our operations.
Our broadcast networks, cable television networks and television stations are in
extremely competitive and dynamic markets and are subject to advertising
patterns and changes in viewer taste and preference that can be unpredictable or
unforeseen. In addition, future revenues in these properties are dependent upon
our ability to obtain, renew or renegotiate long-term programming contracts,
including event-based sports programming and contracts for the distribution of
our programming to cable/satellite operators. Our television and film production
and distribution businesses are affected by the timing and performance of
releases in the theatrical, home entertainment and television markets.
Technological advances like digital video recorders, Internet streaming and
electronic sell-through offer entertainment options through new media,
introducing uncertainty to our operations. Other technologies enable the
unauthorized copying and distribution of our film and television programming,
increasing the risk of piracy. We continue to devote substantial resources to
protect our intellectual property against unauthorized use.
On
December 3, 2009, we entered into an agreement with Comcast Corporation to
transfer the assets of the NBCU business to a newly formed entity, which will
consist of our NBCU businesses and Comcast Corporation's cable networks,
regional sports networks, certain digital properties and certain unconsolidated
investments. Pursuant to the transaction, we will receive cash and will own a
49% interest in the newly formed entity. As a result, we have classified NBCU
assets and liabilities as held for sale at December 31, 2009. The transaction is
subject to receipt of various regulatory approvals and is expected to close
within the next year.
NBC
Universal’s headquarters are in New York, New York, with operations throughout
North America, Europe, South America and Asia.
Capital
Finance
Capital
Finance (32.3%, 36.7% and 38.4% of consolidated revenues in 2009, 2008 and 2007,
respectively) offers a broad range of financial products and services worldwide.
Services include commercial loans and leases, fleet management, financial
programs, home loans, credit cards, personal loans and other financial
services.
During
2009, General Electric Capital Corporation (GE Capital) provided $72 billion of
new financings in the U.S. to various companies, infrastructure projects and
municipalities. Additionally, we extended $74 billion of credit to approximately
54 million U.S. consumers. GE Capital provided credit to approximately 14,200
new commercial customers and 40,000 new small businesses during 2009 in the U.S.
and ended the period with outstanding credit to more than 346,000 commercial
customers and 174,000 small businesses through retail programs in the
U.S.
(8)
Within
our Capital Finance operating segment, we operate the businesses described below
along product lines.
Our
operations are located in North America, South America, Europe, Australia and
Asia.
Capital
Finance has communicated its goal of reducing its ending net investment (ENI)
over the next three years. To achieve this goal, we are more aggressively
focusing our businesses on selective financial services products where we have
domain knowledge, broad distribution, and the ability to earn a consistent
return on capital, while managing our overall balance sheet size and risk. We
have a strategy of exiting those businesses where we are underperforming or that
are deemed to be non-strategic. We have completed a number of dispositions in
our businesses in the past and will continue to evaluate options going
forward.
Effective
January 1, 2010, the Capital Finance segment was renamed GE Capital and includes
all of the continuing operations of General Electric Capital Corporation. In
addition, the Transportation Financial Services business, previously reported in
GE Capital Aviation Services (GECAS), will be included in Commercial Lending and
Leasing (CLL) and our Consumer business in Italy, previously reported in
Consumer, will be included in CLL. Results for 2009 and prior periods are
reported on the basis under which we managed our business in 2009 and do not
reflect the January 2010 reorganization.
Commercial
Lending and Leasing
CLL
provides customers around the world with a broad range of financing solutions.
We have particular mid-market expertise, and offer loans, leases and other
financial services to customers, including manufacturers, distributors and
end-users for a variety of equipment and major capital assets. These assets
include industrial-related facilities and equipment; vehicles; corporate
aircraft; and equipment used in many industries, including the construction,
manufacturing, transportation, media, communications, entertainment and
healthcare industries. During 2009, we acquired a 100% ownership interest in
Interbanca S.p.A., an Italian corporate bank in exchange for the Consumer
businesses in Austria and Finland, the credit card and auto businesses in the
U.K. and the credit card business in Ireland.
Historically,
we have operated in a highly competitive environment. Our competitors include
commercial banks, investment banks, leasing companies, financing companies
associated with manufacturers, and independent finance companies. Competition
related to our lending and leasing operations is based on price, that is,
interest rates and fees, as well as deal structure and terms. More recently,
competition has been affected by disruption in the capital markets, access to
and availability of capital and a reduced number of competitors. Profitability
is affected not only by broad economic conditions that affect customer credit
quality and the availability and cost of capital, but also by successful
management of credit risk, operating risk and market risks such as interest rate
and currency exchange risks. Success requires high quality risk management
systems, customer and industry specific knowledge, diversification, service and
distribution channels, strong collateral and asset management knowledge, deal
structuring expertise and the ability to reduce costs through technology and
productivity.
In the
first quarter of 2009, we deconsolidated Penske Truck Leasing Co., L.P. (PTL)
following our sale of a partial interest in a limited partnership in
PTL.
Consumer
Consumer,
through consolidated entities and associated companies, is a leading provider of
financial services to consumers and retailers in over 40 countries around the
world. We offer a full range of innovative financial products to suit customers’
needs. These products include, on a global basis, private-label credit cards;
personal loans; bank cards; auto loans and leases; mortgages; debt
consolidation; home equity loans; deposit and other savings products; and small
and medium enterprise lending.
In
December 2007, we sold our U.S. mortgage business (WMC). In the third quarter of
2008, we completed the sale of GE Money Japan, which comprised our Japanese
personal loan business (Lake) and our Japanese mortgage and card businesses,
excluding our minority ownership in GE Nissen Credit Co., Ltd.
(9)
In
October 2008, we completed the sale of the Consumer business in Germany. In
early 2009, we completed the sale of our Consumer businesses in Austria and
Finland, the credit card and auto businesses in the U.K., and the credit card
business in Ireland in exchange for a 100% ownership in Interbanca S.p.A., which
were included in assets and liabilities of businesses held for sale on the
Statement of Financial Position at December 31, 2008.
In the
first quarter of 2009, we completed the sale of a portion of our Australian
residential mortgage business.
In June
2008, we acquired a controlling interest in Bank BPH. In June 2009, we acquired
a controlling interest in BAC Credomatic GECF Inc. (BAC).
Our
operations are subject to a variety of bank and consumer protection regulations.
Further, a number of countries have ceilings on rates chargeable to consumers in
financial service transactions. We are subject to competition from various types
of financial institutions including commercial banks, leasing companies,
consumer loan companies, independent finance companies, manufacturers’ captive
finance companies, and insurance companies. Industry participants compete on the
basis of price, servicing capability, promotional marketing, risk management,
and cross selling. The markets in which we operate are also subject to the risks
from fluctuations in retail sales, interest and currency exchange rates, and the
consumer’s capacity to repay debt.
Real
Estate
Real
Estate offers a comprehensive range of capital and investment solutions,
including equity capital for acquisition or development, as well as fixed and
floating rate mortgages for new acquisitions or re-capitalizations of commercial
real estate worldwide. Our business finances, with both equity and loan
structures, the acquisition, refinancing and renovation of office buildings,
apartment buildings, retail facilities, hotels, parking facilities and
industrial properties. Our typical real estate loans are intermediate term,
senior, fixed or floating-rate, and are secured by existing income-producing
commercial properties. We invest in, and provide restructuring financing for,
portfolios of commercial mortgage loans, limited partnerships and tax-exempt
bonds.
We own
and operate a global portfolio of real estate with the objective of maximizing
property cash flows and asset values. In the normal course of our business
operations, we sell certain real estate equity investments when it is
economically advantageous for us to do so. However, as real estate values are
affected by certain forces beyond our control (e.g., market fundamentals and
demographic conditions), it is difficult to predict with certainty the level of
future sales, sales prices, impairments or write-offs.
Our
competitors include banks, financial institutions, real estate companies, real
estate investment funds and other financial companies. Competition in our equity
investment business is primarily based on price, and competition in our lending
business is primarily based on interest rates and fees, as well as deal
structure and terms. As we compete globally, our success is sensitive to the
economic and political environment of each country in which we do
business.
Energy
Financial Services
Energy
Financial Services offers structured equity, debt, leasing, partnership
financing, project finance and broad-based commercial finance to the global
energy and water industries and invests in operating assets in these industries.
Energy Financial Services also owns a controlling interest in Regency Energy
Partners LP, a midstream master limited partnership engaged in the gathering,
processing, transporting and marketing of natural gas and gas
liquids.
We
operate in a highly competitive environment. Our competitors include banks,
financial institutions, energy and water companies, and other finance and
leasing companies. Competition is primarily based on price, that is, interest
rates and fees, as well as deal structure and terms. As we compete globally, our
success is sensitive to the economic and political environment of each country
in which we do business.
(10)
GE
Capital Aviation Services
GECAS
engages in commercial aircraft leasing and finance, delivering fleet and
financing solutions to companies across the spectrum of the aviation industry.
Our product offerings include leases and secured loans on commercial passenger
aircraft, freighters and regional jets; engine leasing and financing solutions;
aircraft parts solutions; and airport equity and debt financing. We also
co-sponsor an infrastructure private equity fund, which invests in large
infrastructure projects including gateway airports. GECAS also has in its
portfolio a wide array of products including leases, debt and equity investments
to the global transportation industry (marine, rail and
intermodal).
We
operate in a highly competitive environment. Our competitors include aircraft
manufacturers, banks, financial institutions, equity investors, and other
finance and leasing companies. Competition is based on lease rate financing
terms, aircraft delivery dates, condition and availability, as well as available
capital demand for financing.
Consumer
& Industrial
Consumer
& Industrial (6.2%, 6.4% and 7.3% of consolidated revenues in 2009, 2008 and
2007, respectively) sells products that share several characteristics −
competitive design, efficient manufacturing and effective distribution and
service. Cost control, including productivity, is key in the highly competitive
markets in which we compete. We also invest in the development of
differentiated, premium products that are more profitable such as energy
efficient solutions for both consumers and businesses. While some Consumer &
Industrial products such as major appliances are primarily directed to consumer
applications, and some primarily to industrial applications such as switchgear,
others, such as lighting, are directed to both markets.
We sell
and service major home appliances including refrigerators, freezers, electric
and gas ranges, cooktops, dishwashers, clothes washers and dryers, microwave
ovens, room air conditioners, and residential water systems for filtration,
softening and heating. Brands are GE Monogram®, GE Profile™, GE®, Hotpoint® and
GE Café™.
We
manufacture certain products and also source finished product and component
parts from third-party global manufacturers. A large portion of our appliances
sales are through a variety of retail outlets for replacement of installed
units. Residential building contractors installing units in new construction is
our second major U.S. channel. We offer one of the largest original equipment
manufacturer (OEM) service organizations in the appliances industry, providing
in-home repair and aftermarket parts. We also manufacture, source and sell a
variety of lamp products for commercial, industrial and consumer markets,
including full lines of incandescent, halogen, fluorescent, high-intensity
discharge, light-emitting diode, automotive and miniature products.
Consumer
& Industrial also provides integrated electrical equipment and systems used
to distribute, protect and control energy and equipment. We manufacture and
distribute electrical distribution and control products, lighting and power
panels, switchgear and circuit breakers that are used to distribute and manage
power in a variety of residential, commercial, consumer and industrial
applications. We also provide customer-focused solutions centered on the
delivery and control of electric power, and market a wide variety of commercial
lighting systems.
Effective
January 1, 2010, the Industrial business became part of the Energy business
within the Energy Infrastructure segment and the Appliances and Lighting portion
of the Consumer and Industrial business became part of our newly-created
segment, Home & Business Solutions.
Our
headquarters are in Louisville, Kentucky and our operations are located in North
America, Europe, Asia and Latin America.
Discontinued
Operations
Discontinued
operations primarily comprised GE Money Japan, WMC and Plastics.
For
further information about discontinued operations, see Part II, Item 7.
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and Note 2 to the consolidated financial statements in Part II, Item
8. “Financial Statements and Supplementary Data” of this Form 10-K
Report.
(11)
Geographic
Data
Geographic
data are reported in Note 27 to the consolidated financial statements in Part
II, Item 8. “Financial Statements and Supplementary Data” of this Form 10-K
Report.
Additional
financial data about our geographic operations is provided in the Geographic
Operations section in Part II, Item 7. “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” of this Form 10-K
Report.
Orders
Backlog
Research
and Development
GE-funded
research and development expenditures were $3.3 billion, $3.1 billion and $3.0
billion in 2009, 2008 and 2007, respectively. In addition, research and
development funding from customers, principally the U.S. government, totaled
$1.1 billion, $1.3 billion and $1.1 billion in 2009, 2008 and 2007,
respectively. Technology Infrastructure’s Aviation business accounts for the
largest share of GE’s research and development expenditures with funding from
both GE and customer funds. Energy Infrastructure’s Energy business and
Technology Infrastructure’s Healthcare business also made significant
expenditures funded primarily by GE.
Expenditures
reported above reflect the definition of research and development required by
U.S. generally accepted accounting principles. For operating and management
purposes, we also measure amounts spent on product and services technology.
These technology expenditures were $5.2 billion in 2009 and included our
reported research and development expenditures as well as the amount spent to
improve our existing products and services, and to improve productivity of our
plants, equipment and processes.
Environmental
Matters
Our
operations, like operations of other companies engaged in similar businesses,
involve the use, disposal and cleanup of substances regulated under
environmental protection laws. We are involved in a sizeable number of
remediation actions to clean up hazardous wastes as required by federal and
state laws. Such statutes require that responsible parties fund remediation
actions regardless of fault, legality of original disposal or ownership of a
disposal site. Expenditures for site remediation actions amounted to
approximately $0.3 billion in both 2009 and 2008. We presently expect that such
remediation actions will require average annual expenditures of about $0.4
billion over the next two years.
(12)
In
November 2006, the United States Federal District Court approved a consent
decree, which had been agreed to by GE and the United States Environmental
Protection Agency (EPA), that represents a comprehensive framework for
implementation of EPA's 2002 Record of Decision to dredge polychlorinated
biphenyl (PCB)-containing sediments in the upper Hudson River. Under the consent
degree, the dredging is to be performed in two phases and Phase I was completed
in May through November of 2009. Between Phase I and Phase II there will be an
intervening peer review by an independent panel of national experts. The panel
will evaluate the performance of Phase I dredging operations with respect to
Phase I Engineering Performance Standards, evaluate experience gained from Phase
I and may set forth proposed changes to the standards. This evaluation is
expected to conclude in the summer of 2010 after which EPA, considering the peer
review panel's recommendations, GE's proposed changes, and its own analysis,
will issue its regulatory decision setting forth any changes to the scope of, or
performance standards for, Phase II. Following EPA's decision, GE has 90 days to
either elect to perform Phase II or to opt out of the project, at which point GE
may be responsible for further costs. Our statement of financial position as of
December 31, 2009, included liabilities for the probable and estimable costs of
the project under the consent decree.
Employee
Relations
At
year-end 2009, General Electric Company and consolidated affiliates employed
approximately 304,000 persons, of whom approximately 134,000 were employed in
the United States. For further information about employees, see Part II, Item 6.
“Selected Financial Data” of this Form 10-K Report.
Approximately
15,600 GE manufacturing and service employees in the United States are
represented for collective bargaining purposes by a total of approximately 110
different union locals. A majority of such employees are represented by union
locals that are affiliated with, and bargain in coordination with, the IUE-CWA,
The Industrial Division of the Communication Workers of America, AFL-CIO, CLC.
During 2007, General Electric Company negotiated four-year contracts with unions
representing a substantial majority of the unionized employees in the United
States. Most of these contracts will terminate in June 2011.
Approximately
3,500 staff employees (and a large number of freelance employees) in the United
States are covered by about 175 labor agreements to which NBC Universal is a
party. These agreements are with various labor unions, expire at various dates
and are generally for a term ranging from three to five years. Other GE
affiliates are parties to labor contracts with various labor unions, also with
varying terms and expiration dates, that cover approximately 2,400
employees.
Executive
Officers
See Part
III, Item 10. “Directors, Executive Officers and Corporate Governance” of this
Form 10-K Report for information about Executive Officers of the
Registrant.
Other
Because
of the diversity of our products and services, as well as the wide geographic
dispersion of our production facilities, we use numerous sources for the wide
variety of raw materials needed for our operations. We have not been adversely
affected by the inability to obtain raw materials.
We own,
or hold licenses to use, numerous patents. New patents are continuously being
obtained through our research and development activities as existing patents
expire. Patented inventions are used both within the Company and are licensed to
others, but no operating segment is substantially dependent on any single patent
or group of related patents.
(13)
Sales of
goods and services to agencies of the U.S. Government as a percentage of
revenues follow.
|
|
%
of Consolidated Revenues
|
|
%
of GE Revenues
|
|
||||||||||||||
|
|
2009
|
|
2008
|
|
2007
|
|
2009
|
|
2008
|
|
2007
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
sales to U.S. Government Agencies
|
|
4
|
%
|
|
3
|
%
|
|
2
|
%
|
|
6
|
%
|
|
4
|
%
|
|
3
|
%
|
|
Technology
Infrastructure segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
defense-related
sales
|
|
3
|
|
|
2
|
|
|
2
|
|
|
5
|
|
|
3
|
|
|
3
|
|
GE is a
trademark and service mark of General Electric Company.
The
Company’s Internet address is www.ge.com. Our annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments
to those reports are available, without charge, on our website,
www.ge.com/en/company/investor/secfilings.htm, as soon as reasonably practicable
after they are filed electronically with the U.S. Securities and Exchange
Commission (SEC). Copies are also available, without charge, from GE Corporate
Investor Communications, 3135 Easton Turnpike, Fairfield, CT 06828. Reports
filed with the SEC may be viewed at www.sec.gov or obtained at the SEC Public
Reference Room in Washington, D.C. Information regarding the operation of the
Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.
References to our website addressed in this report are provided as a convenience
and do not constitute, and should not be viewed as, an incorporation by
reference of the information contained on, or available through, the website.
Therefore, such information should not be considered part of this
report.
The
following discussion of risk factors contains “forward-looking statements,” as
discussed in Item 1. “Business”. These risk factors may be important to
understanding any statement in this Annual Report on Form 10-K or elsewhere. The
following information should be read in conjunction with Part II, Item 7.
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” (MD&A), and the consolidated financial statements and related
notes in Part II, Item 8. “Financial Statements and Supplementary Data” of this
Form 10-K Report.
Our
businesses routinely encounter and address risks, some of which will cause our
future results to be different – sometimes materially different – than we
presently anticipate. Discussion about important operational risks that our
businesses encounter can be found in the MD&A section and in the business
descriptions in Item 1. “Business” of this Form 10-K Report. Below, we describe
certain important operational and strategic risks. Our reactions to material
future developments as well as our competitors’ reactions to those developments
will affect our future results.
Our
global growth is subject to economic and political risks.
We
conduct our operations in virtually every part of the world. In 2009,
approximately 54% of our revenues was attributable to activities outside the
United States. Our operations are subject to the effects of global competition.
They are also affected by local economic environments, including inflation,
recession and currency volatility. Political changes, some of which may be
disruptive, can interfere with our supply chain, our customers and all of our
activities in a particular location. While some of these risks can be hedged
using derivatives or other financial instruments and some are insurable, such
attempts to mitigate these risks are costly and not always successful, and our
ability to engage in such mitigation has decreased or become even more costly as
a result of current market conditions.
We
are subject to a wide variety of laws and regulations that may change in
significant ways.
Our
businesses are subject to regulation under a wide variety of U.S. federal and
state and non-U.S. laws, regulations and policies.
(14)
There
can be no assurance that laws and regulations will not be changed in ways that
will require us to modify our business models and objectives or affect our
returns on investments by making existing practices more restricted, subject to
escalating costs or prohibited outright. In particular, U.S. and non-U.S.
governments are undertaking a substantial review and revision of the regulation
and supervision of bank and non-bank financial institutions, consumer lending,
the over-the-counter derivatives market and tax laws and regulations, which may
have a significant effect on GE Capital’s structure, operations, liquidity and
performance. We are also subject to a number of trade control laws and
regulations that may affect our ability to sell our products in global markets.
In addition, we are subject to regulatory risks from laws that reduce the
allowable lending rate or limit consumer borrowing, local capital requirements
that may increase the risk of not being able to retrieve assets, and changes to
tax law that may affect our return on investments. For example, GE’s effective
tax rate is reduced because active business income earned and indefinitely
reinvested outside the United States is taxed at less than the U.S. rate. A
significant portion of this reduction depends upon a provision of U.S. tax law
that defers the imposition of U.S. tax on certain active financial services
income until that income is repatriated to the United States as a dividend. This
provision is consistent with international tax norms and permits U.S. financial
services companies to compete more effectively with non-U.S. banks and other
non-U.S. financial institutions in global markets. This provision, which expired
at the end of 2009, has been scheduled to expire and has been extended by
Congress on five previous occasions, including in October of 2008. A one-year
extension was passed by the House of Representatives in 2009 and the Senate
Finance Committee Chairman and Ranking Member have indicated an intention to
extend the provision for one year retroactive to the beginning of 2010, but
there can be no assurance that it will be extended. In the event the provision
is not extended after 2009, the current U.S. tax imposed on active financial
services income earned outside the United States would increase, making it more
difficult for U.S. financial services companies to compete in global markets. If
this provision is not extended, we expect our effective tax rate to increase
significantly after 2010. The executive branch of the U.S. government recently
proposed the Financial Responsibility Crisis Fee, which would require us to pay
a fee at an annual rate of 15 basis points based on the amount of covered
liabilities (defined as assets less the sum of Tier 1 capital and Federal
Deposit Insurance Corporation (FDIC)-assessed deposits). This proposal is at an
early stage, and its impact on the company, if any, will depend on a number of
factors that are subject to congressional review and approval. If adopted, this
fee could result in a reduction of our earnings going forward. In addition, the
U.S. government is currently considering broad-based legislation to change
healthcare coverage, that includes provisions for a fee on medical devices,
which could adversely affect the profitability of our Healthcare business and
increase the costs of providing healthcare to our employees. Furthermore, we
have been, and expect to continue, participating in U.S. and international
economic stimulus programs, which require us to comply with strict governmental
regulations. Inability to comply with these regulations could adversely affect
our status in these projects and adversely affect our results of operations,
financial position and cash flows.
We are
subject to a variety of legal proceedings and legal compliance risks. We and our
subsidiaries, our businesses and the industries in which we operate are at times
being reviewed or investigated by regulators, which could lead to enforcement
actions, fines and penalties or the assertion of private litigation claims and
damages. Additionally, we and our subsidiaries are involved in a sizable number
of remediation actions to clean up hazardous wastes as required by federal and
state laws. These include the dredging of polychlorinated biphenyls from a
40-mile stretch of the upper Hudson River in New York State, as described in
Item 1. “Business” of this Form 10-K Report. We are also subject to certain
other legal proceedings described in Item 3. “Legal Proceedings” of this Form
10-K Report. While we believe that we have adopted appropriate risk management
and compliance programs, the global and diverse nature of our operations means
that legal and compliance risks will continue to exist and additional legal
proceedings and other contingencies, the outcome of which cannot be predicted
with certainty, will arise from time to time.
(15)
The
success of our business depends on achieving our objectives for strategic
acquisitions and dispositions.
With
respect to acquisitions and mergers, we may not be able to identify suitable
candidates at terms acceptable to us or may not achieve expected returns and
other benefits as a result of various factors, including integration challenges,
such as personnel and technology. We will continue to evaluate the potential
disposition of assets and businesses that may no longer help us meet our
objectives. When we decide to sell assets or a business, we may encounter
difficulty in finding buyers or alternative exit strategies on acceptable terms
in a timely manner, which could delay the accomplishment of our strategic
objectives. Alternatively, we may dispose of a business at a price or on terms
that are less than we had anticipated. Even upon reaching an agreement with a
buyer or seller for the acquisition or disposition of a business, we are subject
to necessary regulatory and governmental approvals on acceptable terms, which
may prevent us from completing the transaction. For example, we recently entered
into an agreement with Comcast Corporation to transfer the assets of the NBCU
business to a newly formed entity, pursuant to which we will receive cash and
will own a 49% interest in the newly formed entity. The transaction is subject
to receipt of various regulatory approvals. In addition, there is a risk that we
may sell a business whose subsequent performance exceeds our expectations, in
which case our decision would have potentially sacrificed enterprise
value.
Sustained
increases in costs of pension and healthcare benefits may reduce our
profitability.
Our
results of operations may be positively or negatively affected by the amount of
income or expense we record for our defined benefit pension plans. U.S.
generally accepted accounting principles (GAAP) require that we calculate income
or expense for the plans using actuarial valuations. These valuations reflect
assumptions about financial market and other economic conditions, which may
change based on changes in key economic indicators. The most significant
year-end assumptions we used to estimate pension income or expense for 2010 are
the discount rate and the expected long-term rate of return on plans assets. In
addition, we are required to make an annual measurement of plan assets and
liabilities, which may result in a significant change to equity through a
reduction or increase to Accumulated gains (losses) – net, Benefit plans. At the
end of 2009, the projected benefit obligation of our U.S. principal pension
plans was $48.1 billion and assets were $42.1 billion. For a discussion
regarding how our financial statements can be affected by pension plan
accounting policies, see Critical Accounting Estimates – Pension Assumptions in
Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and Note 12 to the consolidated financial statements
in Part II, Item 8. “Financial Statements and Supplementary Data” of this Form
10-K Report. Although GAAP expense and pension funding contributions are not
directly related, key economic factors that affect GAAP expense would also
likely affect the amount of cash we would contribute to pension plans as
required under the Employee Retirement Income Security Act (ERISA). Failure to
achieve expected returns on plan assets could also result in an increase to the
amount of cash we would be required to contribute to pension plans. In addition,
upward pressure on the cost of providing healthcare benefits to current
employees and retirees may increase future funding obligations. Although we have
actively sought to control increases in these costs, there can be no assurance
that we will succeed in limiting cost increases, and continued upward pressure
could reduce our profitability.
(16)
Conditions
in the financial and credit markets may affect the availability and cost of GE
Capital’s funding.
A large
portion of GE Capital’s borrowings is in the form of commercial paper and
long-term debt. GE Capital’s outstanding commercial paper and long-term debt was
$42 billion and $399 billion as of December 31, 2009, respectively. While we
have fully prefunded our planned 2010 long-term debt requirements, we continue
to rely on the availability of the unsecured debt markets to access funding for
term maturities beyond 2010. In addition, we rely on the availability of the
commercial paper markets to refinance maturing short-term commercial paper debt
throughout the year. In order to further diversify our funding sources, we also
plan to expand our reliance on alternative sources of funding, including bank
deposits, securitizations and other asset-based funding. There can be no
assurance that we will succeed in diversifying our funding sources or that the
short and long-term credit markets will be available or, if available, that the
cost of funding will not substantially increase and affect the overall
profitability of GE Capital. Factors that may cause an increase in our funding
costs include: a decreased reliance on short-term funding, such as commercial
paper, in favor of longer-term funding arrangements; refinancing of funding that
we have obtained under the FDIC Temporary Liquidity Guarantee Program (TLGP) at
market rates at the time such funding matures; decreased capacity and increased
competition among debt issuers; and our credit ratings in effect at the time of
refinancing. If GE Capital’s cost of funding were to increase, it may adversely
affect its competitive position and result in lower lending margins, earnings
and cash flows as well as lower returns on its shareowner’s equity and invested
capital. While we currently do not anticipate any equity offerings, other
sources of funding that involve the issuance of additional equity securities
would be dilutive to our existing shareowners.
Difficult
conditions in the financial services markets have materially and adversely
affected the business and results of operations of GE Capital and these
conditions may persist.
Declines
in the real estate markets, increased payment defaults and foreclosures and
sustained levels of high unemployment have resulted in significant write-downs
of asset values by financial institutions, including GE Capital. If these
conditions continue or worsen, there can be no assurance that we will be able to
recover fully the value of certain assets, including goodwill, intangibles and
tax assets. In addition, although we have established
allowances for losses in GE Capital’s portfolio of financing receivables that we
believe are adequate, further deterioration in the economy and in default and
recovery rates could require us to increase these allowances and write-offs,
which, depending on the amount of the increase, could have a material adverse
effect on our business, financial position and
results of operations. To reduce GE’s exposure to volatile conditions in the
financial markets and rebalance the relative size of its financial and
industrial businesses, we have decided to reduce the size of GE Capital, as
measured by its ending net investment. There can be no assurance that we will be
able to timely execute on our reduction targets and failure to do so would
result in greater exposure to financial markets than contemplated under our
strategic funding plan or may result in the need for us to make additional
contributions to GE Capital.
The
soundness of other financial institutions could adversely affect GE
Capital.
GE
Capital has exposure to many different industries and counterparties, and
routinely executes transactions with counterparties in the financial services
industry, including brokers and dealers, commercial banks, investment banks and
other institutional clients. Many of these transactions expose GE Capital to
credit risk in the event of default of its counterparty or client. In addition,
GE Capital’s credit risk may be increased when the collateral held cannot be
realized upon sale or is liquidated at prices not sufficient to recover the full
amount of the loan or derivative exposure due to it. GE Capital also has
exposure to these financial institutions in the form of unsecured debt
instruments held in its investment portfolios. GE Capital has policies relating
to initial credit rating requirements and to exposure limits to counterparties
(as described in Note 22 to the consolidated financial statements in Part II,
Item 8. “Financial Statements and Supplementary Data” of this Form 10-K Report),
which are designed to limit credit and liquidity risk. There can be no
assurance, however, that any losses or impairments to the carrying value of
financial assets would not materially and adversely affect GE Capital’s
business, financial position and results of operations.
(17)
The
real estate markets in which GE Capital participates are highly
uncertain.
GE
Capital participates in the commercial real estate market in two ways: it
provides financing for the acquisition, refinancing and renovation of various
types of properties, and it also acquires equity positions in various types of
properties. The profitability of real estate investments is largely dependent
upon the economic conditions in specific geographic markets in which the
properties are located and the perceived value of those markets at the time of
sale. The level of transactions for real estate assets may vary significantly
from one year to the next. Continued high levels of unemployment, slowdown in
business activity, excess inventory capacity and limited availability of credit
are expected to continue to adversely affect the value of real estate assets and
collateral to real estate loans GE Capital holds. Under current market and
credit conditions, there can be no assurance as to the level of sales GE Capital
will complete or the net sales proceeds it will realize. Also, occupancy rates
and market rentals may worsen, which may result in impairments to the carrying
value of equity investments or increases in the allowance for loan losses on
commercial real estate loans.
GE
Capital is also a residential mortgage lender in certain geographic markets
outside the United States that have been, and may continue to be, adversely
affected by declines in real estate values and home sale volumes, job losses,
consumer bankruptcies and other factors that may negatively impact the credit
performance of our mortgage loans. Our allowance for loan losses on these
mortgage loans is based on our analysis of current and historical delinquency
and loan performance, as well as other management assumptions that may be
inaccurate predictions of credit performance in this environment. There can be
no assurance that, in this environment, credit performance will not be
materially worse than anticipated and, as a result, materially and adversely
affect GE Capital’s business, financial position and results of
operations.
Failure
to maintain our credit ratings could adversely affect our cost of funds and
related margins, liquidity, competitive position and access to capital
markets.
The
major debt rating agencies routinely evaluate our debt. This evaluation is based
on a number of factors, which include financial strength as well as transparency
with rating agencies and timeliness of financial reporting. In March 2009,
Standard & Poor’s (S&P) downgraded GE and GE Capital’s long-term rating
by one notch from “AAA” to “AA+” and, at the same time, revised the outlook from
negative to stable. In addition, Moody’s Investors Service (Moody’s) downgraded
GE and GE Capital’s long-term rating by two notches from “Aaa” to “Aa2” with a
stable outlook. The short-term ratings of “A-1+/P-1” were affirmed by both
rating agencies at the same time with respect to GE, GE Capital Services and GE
Capital. There can be no assurance that we will be able to maintain our credit
ratings and failure to do so could adversely affect our cost of funds and
related margins, liquidity, competitive position and access to capital markets.
Various debt instruments, guarantees and covenants would require posting
additional capital or collateral in the event of a ratings downgrade, which,
depending on the extent of the downgrade, could have a material adverse effect
on our liquidity and capital position.
(18)
Current
conditions in the global economy and the major industries we serve also may
materially and adversely affect the business and results of operations of our
non-financial businesses.
The
business and operating results of our technology infrastructure, energy
infrastructure, consumer and industrial and media businesses have been, and will
continue to be, affected by worldwide economic conditions, including conditions
in the air and rail transportation, energy generation, healthcare, media and
other major industries we serve. As a result of slowing global economic growth,
the credit market crisis, declining consumer and business confidence, increased
unemployment, reduced levels of capital expenditures, fluctuating commodity
prices, bankruptcies and other challenges currently affecting the global
economy, some of our customers have experienced deterioration of their
businesses, cash flow shortages, and difficulty obtaining financing. As a
result, existing or potential customers may delay or cancel plans to purchase
our products and services, including large infrastructure projects, and may not
be able to fulfill their obligations to us in a timely fashion. In particular,
the airline industry is highly cyclical, and the level of demand for air travel
is correlated to the strength of the U.S. and international economies. A
prolonged economic downturn in the U.S. or internationally that continues to
result in the loss of business and leisure traffic could have a material adverse
effect on our airline customers and the viability of their business. Service
contract cancellations could affect our ability to fully recover our contract
costs and estimated earnings. Further, our vendors may be experiencing similar
conditions, which may impact their ability to fulfill their obligations to us.
If the global economic slowdown continues for a significant period or there is
significant further deterioration in the global economy, our results of
operations, financial position and cash flows could be materially adversely
affected.
We
are dependent on market acceptance of new product introductions and product
innovations for continued revenue growth.
The
markets in which we operate are subject to technological change. Our long-term
operating results depend substantially upon our ability to continually develop,
introduce, and market new and innovative products, to modify existing products,
to respond to technological change, and to customize certain products to meet
customer requirements. There are numerous risks inherent in this process,
including the risks that we will be unable to anticipate the direction of
technological change or that we will be unable to develop and market new
products and applications in a timely fashion to satisfy customer
demands.
Our
Intellectual property portfolio may not prevent competitors from independently
developing products and services similar to or duplicative to ours, and we may
not be able to obtain necessary licenses.
Our
patents and other intellectual property may not prevent competitors from
independently developing products and services similar to or duplicative of
ours, and there can be no assurance that the resources invested by us to protect
our intellectual property will be sufficient or that our intellectual property
portfolio will adequately deter misappropriation or improper use of our
technology. In addition, we may be the target of aggressive and opportunistic
enforcement of patents by third parties, including non-practicing entities.
Regardless of the merit of such claims, responding to infringement claims can be
expensive and time-consuming. If GE is found to infringe any third-party rights,
we could be required to pay substantial damages or we could be enjoined from
offering some of our products and services. Also, there can be no assurances
that we will be able to obtain or re-new from third parties the licenses we need
in the future, and there is no assurance that such licenses can be obtained on
reasonable terms.
Significant
raw material shortages, supplier capacity constraints, supplier production
disruptions, supplier quality issues or price increases could increase our
operating costs and adversely impact the competitive positions of our
products.
Our
reliance on third-party suppliers, contract manufacturers and service providers
and commodity markets to secure raw materials, parts, components and sub-systems
used in our products exposes us to volatility in the prices and availability of
these materials, parts, components, systems and services. A disruption in
deliveries from our third-party suppliers, contract manufacturers or service
providers, capacity constraints, production disruptions, price increases, or
decreased availability of raw materials or commodities, could have an adverse
effect on our ability to meet our commitments to customers or increase our
operating costs. Quality issues experienced by third-party providers can also
adversely affect the quality and effectiveness of our products and services and
result in liability and reputational harm.
(19)
There
are risks inherent in owning our common stock.
The
market price and volume of our common stock have been, and may continue to be,
subject to significant fluctuations. These may arise from general stock market
conditions, the impact of the risk factors described above on our financial
condition and results of operations, a change in sentiment in the market
regarding us or our business prospects or from other factors. Changes in the
amounts and frequency of share repurchases or dividends could adversely affect
the value of our common stock.
Not
applicable.
Item
2. Properties.
Manufacturing
operations are carried out at approximately 235 manufacturing plants located in
40 states in the United States and Puerto Rico and at approximately 240
manufacturing plants located in 41 other countries.
Item
3. Legal Proceedings.
As
previously reported, in July and September 2008, shareholders filed two
purported class actions under the federal securities laws in the United States
District Court for the District of Connecticut naming us as defendant, as well
as our chief executive officer and chief financial officer. These two actions
have been consolidated, and in January 2009, a consolidated complaint was filed
alleging that we and our chief executive officer made false and misleading
statements that artificially inflated our stock price between March 12, 2008 and
April 10, 2008, when we announced that our results for the first quarter of 2008
would not meet our previous guidance and we also lowered our full year guidance
for 2008. The case seeks unspecified damages. Our motion to dismiss the
consolidated complaint was filed in March 2009 and is currently under
consideration by the court. We intend to defend ourselves
vigorously.
As
previously reported, in October 2008, shareholders filed a purported class
action under the federal securities laws in the United States District Court for
the Southern District of New York naming us as defendant, as well as our chief
executive officer and chief financial officer. The complaint alleges that during
a conference call with analysts on September 25, 2008, defendants made false and
misleading statements concerning (i) the state of GE’s funding, cash flows, and
liquidity and (ii) the question of issuing additional equity, which caused
economic loss to those shareholders who purchased GE stock between September 25,
2008 and October 2, 2008, when we announced the pricing of a common stock
offering. The case seeks unspecified damages. Our motion to dismiss the second
amended complaint was filed in January 2010 and is currently under consideration
by the court. We intend to defend ourselves vigorously.
As
previously reported, in March and April 2009, shareholders filed purported class
actions under the federal securities laws in the United States District Court
for the Southern District of New York naming as defendants GE, a number of GE
officers (including our chief executive officer and chief financial officer) and
our directors. The complaints, which have now been consolidated, seek
unspecified damages based on allegations related to statements regarding the GE
dividend and projected losses and earnings for GE Capital in 2009. Our motion to
dismiss the consolidated complaint was filed in November 2009 and is currently
under consideration by the court. A shareholder derivative action has been filed
in federal court in Connecticut in May 2009 making essentially the same
allegations as the New York actions. We have moved to consolidate the
Connecticut derivative action with the recently consolidated New York actions.
We intend to defend ourselves vigorously.
(20)
As
previously reported, the Antitrust Division of the Department of Justice (DOJ)
and the SEC are conducting an industry-wide investigation of marketing and sales
of guaranteed investment contracts, and other financial instruments, to
municipalities. In connection with this investigation, two subsidiaries of GE
Capital have received subpoenas and requests for information in connection with
the investigation: GE Funding CMS (Trinity Funding Co.) and GE Funding Capital
Market Services, Inc. (GE FCMS). GE Capital has cooperated and continues to
cooperate fully with the SEC and DOJ in this matter. In July 2008, GE FCMS
received a “Wells notice” advising that the SEC staff is considering
recommending that the SEC bring a civil injunctive action or institute an
administrative proceeding in connection with the bidding for various financial
instruments associated with municipal securities by certain former employees of
GE FCMS. GE FCMS is one of several industry participants that received Wells
notices during 2008. GE FCMS disagrees with the SEC staff regarding this
recommendation and has been in discussions with the staff, including discussion
of potential resolution of the matter. GE FCMS intends to continue these
discussions and understands that it will have the opportunity to address any
disagreements with the SEC staff with respect to its recommendation through the
Wells process with the full Commission. In March 2008, GE FCMS and Trinity
Funding Co., LLC (Trinity Funding) were served with a federal class action
complaint asserting antitrust violations. This action has been combined with
other related actions in a multidistrict litigation proceeding in the United
States District Court for the Southern District of New York. In addition, GE
FCMS and Trinity Funding also received subpoenas from the Attorneys General of
the State of Connecticut and Florida on behalf of a working group of State
Attorneys General in June 2008. GE FCMS and Trinity Funding are cooperating with
those investigations.
As
previously reported, and in compliance with SEC requirements to disclose
environmental proceedings potentially involving monetary sanctions of $100,000
or greater, in June 2008, the Environmental Protection Agency (EPA) issued a
notice of violation alleging non-compliance with the Clean Air Act at a power
cogeneration plant in Homer City, PA. The plant is operated exclusively by EME
Homer City Generation L.P., and is owned and leased to EME Homer City Generation
L.P. by subsidiaries of GE Capital. The notice of violation does not indicate a
specific penalty amount but makes reference to statutory fines. We believe that
we have meritorious defenses and that EME Homer City Generation L.P. is
obligated to indemnify GE Capital’s subsidiaries and pay all costs associated
with this matter.
Not
applicable.
(21)
Part
II
Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities.
With
respect to “Market Information,” in the United States, GE common stock is listed
on the New York Stock Exchange (its principal market). GE common stock is also
listed on the London Stock Exchange and on Euronext Paris. Trading prices, as
reported on the New York Stock Exchange, Inc., Composite Transactions Tape, and
dividend information follow:
|
|
Common
stock market price
|
|
Dividends
|
|||||
|
(In
dollars)
|
High
|
|
Low
|
|
declared
|
|||
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
Fourth
quarter
|
$
|
16.87
|
|
$
|
14.15
|
|
$
|
0.10
|
|
Third
quarter
|
|
17.52
|
|
|
10.50
|
|
|
0.10
|
|
Second
quarter
|
|
14.55
|
|
|
9.80
|
|
|
0.10
|
|
First
quarter
|
|
17.24
|
|
|
5.87
|
|
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
Fourth
quarter
|
$
|
25.75
|
|
$
|
12.58
|
|
$
|
0.31
|
|
Third
quarter
|
|
30.39
|
|
|
22.16
|
|
|
0.31
|
|
Second
quarter
|
|
38.52
|
|
|
26.15
|
|
|
0.31
|
|
First
quarter
|
|
37.74
|
|
|
31.65
|
|
|
0.31
|
As of
January 31, 2010, there were approximately 598,000 shareowner accounts of
record.
(22)
During
the fourth quarter of 2009, we purchased shares of our common stock as
follows.
|
|
|
|
|
|
|
|
|
Approximate
|
||||
|
|
|
|
|
|
|
|
|
dollar
value
|
||||
|
|
|
|
|
|
|
Total
number
|
|
of
shares that
|
||||
|
|
|
|
|
|
|
of
shares
|
|
may
yet be
|
||||
|
|
|
|
|
|
|
purchased
|
|
purchased
|
||||
|
|
|
|
|
|
|
as
part of
|
|
under
our
|
||||
|
|
|
Total
number
|
|
Average
|
|
of
our share
|
|
share
|
||||
|
|
|
of
shares
|
|
price
paid
|
|
repurchase
|
|
repurchase
|
||||
|
Period(a)
|
|
purchased
|
(a)(b)
|
per
share
|
|
program
|
(a)(c)
|
program
|
||||
|
(Shares
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
|
|
|
643
|
|
$
|
15.82
|
|
|
533
|
|
|
|
|
November
|
|
|
949
|
|
$
|
15.70
|
|
|
812
|
|
|
|
|
December
|
|
|
1,454
|
|
$
|
15.42
|
|
|
957
|
|
|
|
|
Total
|
|
|
3,046
|
|
$
|
15.59
|
|
|
2,302
|
$
|
11.7
|
billion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Information
is presented on a fiscal calendar basis, consistent with our quarterly
financial reporting.
|
|
(b)
|
This
category includes 744 thousand shares repurchased from our various benefit
plans, primarily the GE Savings and Security Program (the S&SP).
Through the S&SP, a defined contribution plan with Internal Revenue
Service Code 401(k) features, we repurchase shares resulting from changes
in investment options by plan
participants.
|
|
(c)
|
This
balance represents the number of shares that were repurchased from the GE
Stock Direct Plan, a direct stock purchase plan that is available to the
public. Repurchases from GE Stock Direct are part of the 2007 GE Share
Repurchase Program (the Program) under which we are authorized to
repurchase up to $15 billion of our common stock through 2010. The Program
is flexible and shares are acquired with a combination of borrowings and
free cash flow from the public markets and other sources, including GE
Stock Direct. Effective September 25, 2008, we suspended the Program for
purchases other than from GE Stock
Direct.
|
For
information regarding compensation plans under which equity securities are
authorized for issuance, see Note 16 to the consolidated financial statements in
Part II, Item 8. “Financial Statements and Supplementary Data” of this Form 10-K
Report.
(23)
Five-year
financial performance graph: 2005-2009
Comparison
of five-year cumulative return among GE, S&P 500 and Dow Jones Industrial
Average
The
annual changes for the five-year period shown in the graph on this page are
based on the assumption that $100 had been invested in GE stock, the Standard
& Poor’s 500 Stock Index (S&P 500) and the Dow Jones Industrial Average
(DJIA) on December 31, 2004, and that all quarterly dividends were reinvested.
The total cumulative dollar returns shown on the graph represent the value that
such investments would have had on December 31, 2009.
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GE
|
$
|
100
|
|
$
|
99
|
|
$
|
108
|
|
$
|
111
|
|
$
|
51
|
|
$
|
49
|
|
S&P
500
|
|
100
|
|
|
105
|
|
|
121
|
|
|
128
|
|
|
81
|
|
|
102
|
|
DJIA
|
|
100
|
|
|
102
|
|
|
121
|
|
|
132
|
|
|
90
|
|
|
110
|
(24)
Item
6. Selected Financial Data.
The
following table provides key information for Consolidated, GE and
GECS.
|
(Dollars
in millions; per-share amounts in dollars)
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
2005
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
Electric Company and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
156,783
|
|
$
|
182,515
|
|
$
|
172,488
|
$
|
151,568
|
$
|
136,262
|
|
||
|
Earnings
from continuing operations attributable to the Company
|
|
11,218
|
|
|
18,089
|
|
|
22,457
|
19,344
|
17,279
|
|
||||
|
Earnings
(loss) from discontinued operations, net of taxes,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
attributable
to the Company
|
|
(193)
|
|
|
(679)
|
|
|
(249)
|
|
1,398
|
(559)
|
|
|||
|
Net
earnings attributable to the Company
|
|
11,025
|
|
|
17,410
|
|
|
22,208
|
20,742
|
16,720
|
|
||||
|
Dividends
declared(a)
|
|
6,785
|
|
|
12,649
|
|
|
11,713
|
10,675
|
9,647
|
|
||||
|
Return
on average GE shareowners’ equity(b)
|
|
10.1
|
%
|
|
15.9
|
%
|
|
20.4
|
%
|
19.8
|
%
|
18.1
|
%
|
||
|
Per
common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
from continuing operations – diluted
|
$
|
1.03
|
|
$
|
1.78
|
|
$
|
2.20
|
$
|
1.86
|
$
|
1.63
|
|
||
|
Earnings
(loss) from discontinued operations – diluted
|
|
(0.02)
|
|
|
(0.07)
|
|
|
(0.02)
|
|
0.13
|
(0.05)
|
|
|||
|
Net
earnings – diluted
|
|
1.01
|
|
|
1.72
|
|
|
2.17
|
2.00
|
1.57
|
|
||||
|
Earnings
from continuing operations – basic
|
|
1.03
|
|
|
1.79
|
|
|
2.21
|
1.87
|
1.63
|
|
||||
|
Earnings
(loss) from discontinued operations – basic
|
|
(0.02)
|
|
|
(0.07)
|
|
|
(0.02)
|
|
0.14
|
(0.05)
|
|
|||
|
Net
earnings – basic
|
|
1.01
|
|
|
1.72
|
|
|
2.18
|
2.00
|
1.58
|
|
||||
|
Dividends
declared
|
|
0.61
|
|
|
1.24
|
|
|
1.15
|
1.03
|
0.91
|
|
||||
|
Stock
price range
|
17.52-5.87
|
|
38.52-12.58
|
|
42.15-33.90
|
|
38.49-32.06
|
|
37.34-32.67
|
|
|||||
|
Year-end
closing stock price
|
|
15.13
|
|
|
16.20
|
|
|
37.07
|
37.21
|
35.05
|
|||||
|
Cash
and equivalents
|
|
72,260
|
|
|
48,187
|
|
|
15,731
|
14,086
|
8,608
|
|||||
|
Total
assets of continuing operations
|
|
780,298
|
|
|
796,046
|
|
|
786,794
|
674,966
|
588,821
|
|||||
|
Total
assets
|
|
781,818
|
|
|
797,769
|
|
|
795,683
|
697,273
|
673,210
|
|||||
|
Long-term
borrowings
|
|
338,215
|
|
|
322,847
|
|
|
318,530
|
260,656
|
212,082
|
|||||
|
Common
shares outstanding – average (in thousands)
|
10,613,717
|
|
10,079,923
|
|
10,182,083
|
|
10,359,320
|
|
10,569,805
|
|
|||||
|
Common
shareowner accounts – average
|
|
605,000
|
|
|
604,000
|
|
|
608,000
|
624,000
|
634,000
|
|
||||
|
Employees
at year end
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
134,000
|
|
|
152,000
|
|
|
155,000
|
155,000
|
161,000
|
|
||||
|
Other
countries
|
|
154,000
|
|
|
171,000
|
|
|
172,000
|
164,000
|
155,000
|
|
||||
|
BAC
Credomatic GECF Inc.(c)
|
|
16,000
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
Total
employees
|
|
304,000
|
|
|
323,000
|
|
|
327,000
|
319,000
|
316,000
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GE
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
$
|
504
|
|
$
|
2,375
|
$
|
4,106
|
$
|
2,076
|
$
|
972
|
|
|||
|
Long-term
borrowings
|
|
11,681
|
|
|
9,827
|
11,656
|
9,043
|
8,986
|
|
||||||
|
Noncontrolling
interests
|
|
5,797
|
|
|
6,678
|
6,503
|
5,544
|
5,308
|
|
||||||
|
GE
shareowners’ equity
|
|
117,291
|
|
|
104,665
|
115,559
|
111,509
|
108,633
|
|
||||||
|
Total
capital invested
|
$
|
135,273
|
|
$
|
123,545
|
$
|
137,824
|
$
|
128,172
|
$
|
123,899
|
|
|||
|
Return
on average total capital invested(b)
|
|
9.5
|
%
|
|
14.8
|
%
|
18.9
|
%
|
18.5
|
%
|
16.7
|
%
|
|||
|
Borrowings
as a percentage of total capital invested(b)
|
|
9.0
|
%
|
|
9.9
|
%
|
11.4
|
%
|
8.7
|
%
|
8.0
|
%
|
|||
|
Working
capital(b)
|
$
|
(1,596)
|
|
$
|
3,904
|
$
|
6,433
|
$
|
7,527
|
$
|
7,853
|
|
|||
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GECS
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
54,163
|
|
$
|
71,287
|
$
|
71,936
|
$
|
61,351
|
$
|
54,889
|
|
|||
|
Earnings
from continuing operations attributable to GECS
|
|
1,590
|
|
|
7,774
|
12,417
|
10,219
|
8,929
|
|
||||||
|
Earnings
(loss) from discontinued operations, net of taxes,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
attributable
to GECS
|
|
(175)
|
|
|
(719)
|
|
(2,116)
|
|
439
|
(1,352)
|
|
||||
|
Net
earnings attributable to GECS
|
|
1,415
|
|
|
7,055
|
10,301
|
10,658
|
7,577
|
|
||||||
|
GECS
shareowner’s equity
|
|
70,833
|
|
|
53,279
|
57,676
|
54,097
|
50,812
|
|
||||||
|
Total
borrowings and bank deposits
|
|
500,334
|
|
|
514,601
|
500,922
|
426,262
|
362,042
|
|
||||||
|
Ratio
of debt to equity at GE Capital
|
|
6.74:1
|
(d)
|
|
8.76:1
|
(d)
|
8.10:1
|
7.52:1
|
7.09:1
|
|
|||||
|
Total
assets
|
$
|
650,241
|
|
$
|
660,902
|
$
|
646,485
|
$
|
565,258
|
$
|
540,584
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions
between GE and GECS have been eliminated from the consolidated
information.
|
|
(a)
|
Included
$300 million and $75 million of preferred stock dividends in 2009 and
2008, respectively.
|
|
(b)
|
Indicates
terms are defined in the Glossary.
|
|
(c)
|
In
2009, we consolidated BAC Credomatic GECF Inc. (BAC) as a result of an
increase in our ownership from 49.99% to
75%.
|
|
(d)
|
Ratios
of 5.22:1 and 7.07:1 for 2009 and 2008, respectively, net of cash and
equivalents and with classification of hybrid debt as
equity.
|
(25)
Operations
Our
consolidated financial statements 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).
In the
accompanying analysis of financial information, we sometimes use information
derived from consolidated financial information but not presented in our
financial statements prepared in accordance with U.S. generally accepted
accounting principles (GAAP). Certain of these data are considered “non-GAAP
financial measures” under the U.S. Securities and Exchange Commission (SEC)
rules. For such measures, we have provided supplemental explanations and
reconciliations in the Supplemental Information section.
We
present Management’s Discussion of Operations in five parts: Overview of Our
Earnings from 2007 through 2009, Global Risk Management, Segment Operations,
Geographic Operations and Environmental Matters. Unless otherwise indicated, we
refer to captions such as revenues and earnings from continuing operations
attributable to the company simply as “revenues” and “earnings” throughout this
Management’s Discussion and Analysis. Similarly, discussion of other matters in
our consolidated financial statements relates to continuing operations unless
otherwise indicated.
Effective
January 1, 2010, we reorganized our segments to better align our Consumer &
Industrial and Energy businesses for growth. As a result of this reorganization,
we created a new segment called Home & Business Solutions that includes the
Appliances and Lighting businesses from our previous Consumer & Industrial
segment and the retained portion of the GE Fanuc Intelligent Platforms business
of our previous Enterprise Solutions business (formerly within our Technology
Infrastructure segment). In addition, the Industrial business of our previous
Consumer & Industrial segment and the Sensing & Inspection Technologies
and Digital Energy businesses of our previous Enterprise Solutions business are
now part of the Energy business within the Energy Infrastructure segment. The
Security business of Enterprise Solutions will be reported in Corporate Items
and Eliminations pending its expected sale. Also, effective January 1, 2010, the
Capital Finance segment was renamed GE Capital and includes all of the
continuing operations of General Electric Capital Corporation. In addition, the
Transportation Financial Services business, previously reported in GE Capital
Aviation Services (GECAS), will be included in Commercial Lending and Leasing
(CLL) and our Consumer business in Italy, previously reported in Consumer, will
be included in CLL.
Results
for 2009 and prior periods are reported on the basis under which we managed our
business in 2009 and do not reflect the January 2010 reorganization described
above.
Overview
of Our Earnings from 2007 through 2009
Net
earnings attributable to the Company decreased 37% in 2009 and 22% in 2008,
reflecting the challenging economic conditions of the last two years and the
effect on both our industrial and financial services businesses. Our financial
services businesses were most significantly affected as GECS net earnings
attributable to the Company fell 80% in 2009 and 32% in 2008. Excluding the
financial services businesses, our net earnings attributable to the Company
decreased 7% in 2009 and 13% in 2008, reflecting the weakened global economy and
challenging market conditions. We believe that we are beginning to see signs of
stabilization in the global economy. We have a strong backlog entering 2010 and
are positioned for global growth in 2011 and 2012.
Energy
Infrastructure (21% and 24% of consolidated three-year revenues and total
segment profit, respectively) has grown significantly over the last several
years as the worldwide demand for energy, and for alternative sources of power,
such as wind and thermal, rose to new levels. Revenues decreased 4% in 2009
after increasing 26% in 2008, and segment profit increased 13% and 26% in 2009
and 2008, respectively. We continue to invest in market-leading technology and
services at Energy and Oil & Gas.
(26)
Technology
Infrastructure (26% and 31% of consolidated three-year revenues and total
segment profit, respectively) revenues and earnings both fell 8% in 2009 after
rising 8% and 3%, respectively, in 2008. We continue to invest in market-leading
technologies and services at Aviation, Healthcare and Transportation. Aviation
generated strong revenues and earnings as one of the world’s leading providers
of aircraft engines and services. Healthcare revenues and earnings trended down
in 2009, reflecting the generally weak global economic conditions and continued
uncertainty in the healthcare markets. Transportation revenues and earnings fell
24% and 51%, respectively, in 2009 after rising 11% and 3%, respectively, in
2008 as the weakened economy has driven overall reductions in U.S. freight
traffic and we updated our estimate of long-term product service
costs.
NBC
Universal (NBCU) (9% and 11% of consolidated three-year revenues and total
segment profit, respectively) is a diversified media and entertainment company
that has grown over the past several years through business and geographic
diversity. NBCU revenues fell 9% and earnings decreased 28% in 2009 compared
with a 10% increase in revenues and flat earnings in 2008. While the television
and film businesses continue to be challenged by the effects of a difficult
economy, our cable business continues to grow and become more profitable. In
2010, we expect to transfer the assets of the NBCU business to a newly formed
entity, which will consist of our NBCU businesses and Comcast Corporation's
cable networks, regional sports networks, certain digital properties and certain
unconsolidated investments. Pursuant to the transaction, we will receive cash
and will own a 49% interest in the newly formed entity. As a result, we have
classified NBCU assets and liabilities as held for sale in our Statement of
Financial Position.
Capital
Finance (36% and 31% of consolidated three-year revenues and total segment
profit, respectively) earnings declined to $2.3 billion and $8.6 billion in 2009
and 2008, respectively, in a challenging economic environment, including
disruptions in capital markets, challenging credit markets and rising
unemployment. Throughout 2008 and 2009, we tightened underwriting standards,
shifted teams from origination to collection and maintained a proactive risk
management focus. We also reduced our ending net investment (ENI), excluding the
effects of currency exchange rates, from $525 billion at December 31, 2008 to
$472 billion at December 31, 2009. The current credit cycle has begun to show
signs of stabilization and we expect further signs of stabilization as we enter
2010. Our focus is to continue to manage through the current challenging credit
environment and continue to reposition General Electric Capital Corporation (GE
Capital) as a diversely funded and smaller, more focused finance company with
strong positions in several mid-market, corporate and consumer financing
segments.
Consumer
& Industrial (7% and 2% of consolidated three-year revenues and total
segment profit, respectively) is also sensitive to changes in economic
conditions. Reflective of the downturn in the U.S. housing market, Consumer
& Industrial revenues have declined 17% in 2009 and 7% in 2008. Over the
past two years, Consumer & Industrial has worked to reposition its business
by eliminating capacity in its incandescent lighting manufacturing sites and
investing in energy efficient product manufacturing in locations such as
Louisville, Kentucky and Bloomington, Indiana. Segment profit increased 10% in
2009 on higher prices and lower material costs and reflects these cost reduction
efforts after declining 65% in 2008, primarily on higher material and other
costs.
Overall,
acquisitions contributed $3.4 billion, $7.4 billion and $7.7 billion to
consolidated revenues in 2009, 2008 and 2007, respectively, excluding the
effects of acquisition gains following our adoption of an amendment to Financial
Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810,
Consolidation. Our
consolidated net earnings included approximately $0.5 billion, $0.8 billion and
$0.5 billion in 2009, 2008 and 2007, respectively, from acquired businesses. We
integrate acquisitions as quickly as possible. Only revenues and earnings from
the date we complete the acquisition through the end of the fourth following
quarter are attributed to such businesses. Dispositions also affected our
ongoing results through lower revenues of $4.7 billion in 2009, higher revenues
of $0.1 billion in 2008 and lower revenues of $3.6 billion in 2007. The effects
of dispositions on net earnings were increases of $0.6 billion in 2009 and $0.4
billion in both 2008 and 2007.
Significant
matters relating to our Statement of Earnings are explained below.
(27)
Discontinued Operations. In
September 2007, we committed to a plan to sell our Japanese personal loan
business (Lake) upon determining that, despite restructuring, Japanese
regulatory limits for interest charges on unsecured personal loans did not
permit us to earn an acceptable return. During 2008, we completed the sale of GE
Money Japan, which included Lake, along with our Japanese mortgage and card
businesses, excluding our minority ownership in GE Nissen Credit Co., Ltd. In
December 2007, we completed the exit of WMC as a result of continued pressures
in the U.S. subprime mortgage industry. Both of these businesses were previously
reported in the Capital Finance segment.
In
August 2007, we completed the sale of our Plastics business. We sold this
business because of its cyclicality, rising costs of natural gas and raw
materials, and the decision to redeploy capital resources into higher-growth
businesses.
We
reported the businesses described above as discontinued operations for all
periods presented. For further information about discontinued operations, see
Note 2 to the consolidated financial statements in Part II, Item 8. “Financial
Statements and Supplementary Data” of this Form 10-K Report.
We declared $6.8 billion in dividends
in 2009. Common per-share dividends of $0.61 were down 51% from 2008,
following an 8% increase from the preceding year. In February 2009, we announced
the reduction of the quarterly GE stock dividend by 68% from $0.31 per share to
$0.10 per share, effective with the dividend approved by the Board in June 2009,
which was paid in the third quarter. This reduction had the effect of reducing
cash outflows of the company by approximately $4 billion in the second half of
2009 and will save approximately $9 billion annually thereafter. On February 12,
2010, our Board of Directors approved a regular quarterly dividend of $0.10 per
share of common stock, which is payable April 26, 2010, to shareowners of record
at close of business on March 1, 2010. In 2009, we declared $0.3 billion in
preferred stock dividends compared with $0.1 billion in 2008.
Except
as otherwise noted, the analysis in the remainder of this section presents the
results of GE (with GECS included on a one-line basis) and GECS. See the Segment
Operations section for a more detailed discussion of the businesses within GE
and GECS.
GE sales of product services
were $35.4 billion in 2009, about flat compared with 2008. Increases in product
services at Energy Infrastructure were offset by decreases at Technology
Infrastructure and Consumer & Industrial. Operating profit from product
services was $10.0 billion in 2009, up 7% from 2008.
Postretirement benefit plans
costs were $2.6 billion, $2.2 billion and $2.6 billion in 2009, 2008 and 2007,
respectively. Costs increased in 2009 primarily because of the effects of lower
discount rates (principal pension plans discount rate decreased from 6.34% at
December 31, 2007 to 6.11% at December 31, 2008) and increases in early
retirements resulting from restructuring activities and contractual
requirements, partially offset by amortization of prior-years' investment gains
and benefits from new healthcare supplier contracts. Costs decreased in 2008
primarily because of the effects of prior years' investment gains, higher
discount rates and benefits from new healthcare supplier contracts, partially
offset by additional costs of plan benefits resulting from union negotiations
and a pensioner increase in 2007.
Considering
the current and expected asset allocations, as well as historical and expected
returns on various categories of assets in which our plans are invested, we have
assumed that long-term returns on our principal pension plan assets will be 8.5%
for cost recognition in 2010, the same level as we assumed in 2009, 2008 and
2007. GAAP provides recognition of differences between assumed and actual
returns over a period no longer than the average future service of
employees.
We
expect the costs of our postretirement benefits, excluding the effects of 2009
restructuring activities, to increase in 2010 by approximately $1.0 billion as
compared to 2009, primarily because of the effects of prior-year investment
losses and lower discount rates.
(28)
Our
principal pension plans were underfunded by $6.0 billion at the end of 2009 as
compared to $4.4 billion at December 31, 2008. At December 31, 2009, the GE
Pension Plan was underfunded by $2.2 billion and the GE Supplementary Pension
Plan, which is an unfunded plan, had a projected benefit obligation of $3.8
billion. The increase in underfunding from year-end 2008 was primarily
attributable to lower discount rates (principal pension plans discount rate
decreased from 6.11% at December 31, 2008 to 5.78% at December 31, 2009, which
increased the pension benefit obligation at year-end 2009 by approximately $1.7
billion). Our principal pension plans’ assets increased from $40.7 billion at
the end of 2008 to $42.1 billion at December 31, 2009, a 10.0% increase in
investment values during the year, partially offset by benefit payments. Assets
of the GE Pension Plan are held in trust, solely for the benefit of Plan
participants, and are not available for general company operations.
On an
Employee Retirement Income Security Act (ERISA) basis, the GE Pension Plan
remains fully funded at January 1, 2010. We will not make any contributions to
the GE Pension Plan in 2010. Assuming our 2010 actual experience is consistent
with our current benefit assumptions (e.g., expected return on assets and
interest rates), we will not be required to make contributions to the GE Pension
Plan in 2011.
At
December 31, 2009, the fair value of assets for our other pension plans was $2.7
billion less than the respective projected benefit obligations. The comparable
amount at December 31, 2008, was $2.4 billion. We expect to contribute $0.6
billion to our other pension plans in 2010, compared with actual contributions
of $0.7 billion and $0.6 billion in 2009 and 2008, respectively. We fund our
retiree health benefits on a pay-as-you-go basis. The unfunded liability for our
principal retiree health and life plans was $11.6 billion and $10.8 billion at
December 31, 2009 and 2008, respectively. This increase was primarily
attributable to lower discount rates (retiree health and life plans discount
rate decreased from 6.15% at December 31, 2008 to 5.67% at December 31, 2009),
which increased the unfunded liability by approximately $0.6 billion. We expect
to contribute $0.7 billion to these plans in 2010 compared with actual
contributions of $0.6 billion in 2009 and 2008.
The
funded status of our postretirement benefits plans and future effects on
operating results depend on economic conditions and investment performance. See
Note 12 to the consolidated financial statements in Part II, Item 8. “Financial
Statements and Supplementary Data” of this Form 10-K Report for additional
information about funded status, components of earnings effects and actuarial
assumptions.
GE other costs and expenses
are selling, general and administrative expenses. These costs were 14.3%, 12.9%
and 14.2% of total GE sales in 2009, 2008 and 2007, respectively.
Interest on borrowings and other
financial charges amounted to $18.8 billion, $26.2 billion and $23.8
billion in 2009, 2008 and 2007, respectively. Substantially all of our
borrowings are in financial services, where interest expense was $17.9 billion,
$25.1 billion and $22.7 billion in 2009, 2008 and 2007, respectively. GECS
average borrowings declined from 2008 to 2009 after increasing from 2007 to
2008, in line with changes in average GECS assets. Interest rates have decreased
over the three-year period attributable to declining global benchmark interest
rates, partially offset by higher average credit spreads. GECS average
borrowings were $499.2 billion, $521.2 billion and $456.4 billion in 2009, 2008
and 2007, respectively. The GECS average composite effective interest rate was
3.6% in 2009, 4.8% in 2008 and 5.0% in 2007. In 2009, GECS average assets of
$649.6 billion were 3% lower than in 2008, which in turn were 13% higher than in
2007. We anticipate that GECS composite effective rates will begin to rise in
2010 as benchmark rates begin to rise globally. See the Liquidity and Borrowings
section for a discussion of liquidity, borrowings and interest rate risk
management.
Income taxes have a
significant effect on our net earnings. As a global commercial enterprise, our
tax rates are affected by many factors, including our global mix of earnings,
the extent to which those global earnings are indefinitely reinvested outside
the United States, legislation, acquisitions, dispositions and tax
characteristics of our income. Our tax returns are routinely audited and
settlements of issues raised in these audits sometimes affect our tax
provisions.
(29)
Income
taxes (benefit) on consolidated earnings from continuing operations were (10.5)%
in 2009 compared with 5.3% in 2008 and 15.1% in 2007. Our consolidated income
tax rate is lower than the U.S. statutory rate primarily because of benefits
from lower-taxed global operations, including the use of global funding
structures, and our 2009 and 2008 decisions to indefinitely reinvest prior-year
earnings outside the U.S.
Our
consolidated income tax rate decreased from 2008 to 2009 primarily because of a
reduction during 2009 of income in higher-taxed jurisdictions. This increased
the relative effect of our tax benefits from lower-taxed global operations,
including the decision, discussed below, to indefinitely reinvest prior-year
earnings outside the U.S. These effects were partially offset by a decrease from
2008 to 2009 in the benefit from lower-taxed earnings from global
operations.
Cash
taxes paid in 2009 were $2.5 billion, reflecting the effects of changes to
temporary differences between the carrying amount of assets and liabilities and
their tax bases, including the decision, discussed below, to indefinitely
reinvest prior-year earnings outside the U.S.
Our
consolidated income tax rate decreased from 2007 to 2008 primarily because of a
reduction during 2008 of income in higher-taxed jurisdictions. This increased
the relative effect of tax benefits from lower-taxed global operations on the
tax rate. In addition, earnings from lower-taxed global operations increased
from 2007 to 2008. The increase in the benefit from lower-taxed global
operations includes a benefit from the 2008 decision to indefinitely reinvest
prior-year earnings outside the U.S., because the use of foreign tax credits no
longer required the repatriation of those prior-year earnings.
A more
detailed analysis of differences between the U.S. federal statutory rate and the
consolidated rate, as well as other information about our income tax provisions,
is provided in Note 14 to the consolidated financial statements in Part II, Item
8. “Financial Statements and Supplementary Data” of this Form 10-K Report. The
nature of business activities and associated income taxes differ for GE and for
GECS and a separate analysis of each is presented in the paragraphs that
follow.
Because
GE tax expense does not include taxes on GECS earnings, the GE effective tax
rate is best analyzed in relation to GE earnings excluding GECS. GE pre-tax
earnings from continuing operations, excluding GECS earnings from continuing
operations, were $12.6 billion, $14.2 billion and $13.5 billion for 2009, 2008
and 2007, respectively. On this basis, GE’s effective tax rate was 21.8% in
2009, 24.2% in 2008 and 20.6% in 2007.
Resolution
of audit matters reduced the GE effective tax rate throughout this period. The
effects of such resolutions are included in the following captions in Note 14 to
the consolidated financial statements in Part II, Item 8. “Financial Statements
and Supplementary Data” of this Form 10-K Report.
|
|
Audit
resolutions –
|
|
|||||||
|
|
effect
on GE tax rate, excluding GECS earnings
|
|
|||||||
|
|
2009
|
|
2008
|
|
2007
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
Tax
on global activities including exports
|
|
(0.4)
|
%
|
|
–
|
%
|
|
(2.6)
|
%
|
|
All
other – net
|
|
(0.2)
|
|
|
(0.6)
|
|
|
(2.3)
|
|
|
|
|
(0.6)
|
%
|
|
(0.6)
|
%
|
|
(4.9)
|
%
|
The GE
effective tax rate decreased from 2008 to 2009 primarily because of the 3.6
percentage point increase in the benefit from lower-taxed earnings from global
operations, excluding audit resolutions.
The GE
effective tax rate increased from 2007 to 2008 because of the 4.3 percentage
point lower 2008 benefit from favorable audit resolutions, partially offset by a
1.2 percentage point increase in the benefit in lower-taxed earnings from global
operations, excluding audit resolutions.
The 2007
GE rate reflects the favorable audit resolutions shown above and the benefit of
lower-taxed earnings from global operations.
(30)
The GECS
effective tax rate was 173.4% in 2009, compared with (42.2)% in 2008 and 9.7% in
2007. GE and GECS file a consolidated U.S. federal income tax return that
enables GE to use GECS tax deductions and credits to reduce the tax that
otherwise would have been payable by GE. The GECS effective tax rate for each
period reflects the benefit of these tax reductions. GE makes cash payments to
GECS for these tax reductions at the time GE’s tax payments are
due.
Comparing
a tax benefit to pre-tax income resulted in a negative GECS tax rate in 2008 and
comparing a tax benefit to pre-tax loss results in the positive GECS tax rate in
2009. The GECS tax rate increased from 2008 to 2009 primarily because of a
reduction during 2009 of income in higher-taxed jurisdictions. This had the
effect of increasing the relative impact on the rate of tax benefits from
lower-taxed global operations, increasing the rate 253.2 percentage points. This
more than offset the decline in those benefits decreasing the rate 68.1
percentage points. The decline in tax benefits from lower-taxed global
operations includes an offset of 15.9 percentage points for increased benefits
from management’s decision (discussed below) in 2009 to indefinitely reinvest
prior-year earnings outside the U.S. that was larger than the 2008 decision to
indefinitely reinvest prior-year earnings outside the U.S.
During
2009, following the change in our external credit ratings, funding actions taken
and our continued review of our operations, liquidity and funding, we determined
that undistributed prior-year earnings of non-U.S. subsidiaries of GECS, on
which we had previously provided deferred U.S. taxes, would now be indefinitely
reinvested outside the U.S. This change increased the amount of prior-year
earnings indefinitely reinvested outside the U.S. by approximately $2 billion,
resulting in an income tax benefit of $0.7 billion in 2009.
The GECS
rate decreased from 2007 to 2008 primarily because of a reduction during 2008 of
income in higher-taxed jurisdictions. This increased the relative effect of tax
benefits from lower-taxed global operations on the tax rate, reducing the rate
30.8 percentage points. In addition, earnings from lower-taxed global operations
increased from 2007 to 2008, causing an additional 19.9 percentage point rate
reduction. The increase in the benefit from lower taxed global operations
includes 6.2 percentage points from the 2008 decision to indefinitely reinvest
prior-year earnings outside the U.S. because the use of foreign tax credits no
longer required the repatriation of those prior-year earnings.
Global
Risk Management
A
disciplined approach to risk is important in a diversified organization such as
ours in order to ensure that we are executing
according to our strategic objectives and that we only accept risk for which we
are adequately compensated.
We evaluate risk at the individual transaction level, and evaluate aggregate
risk at the customer, industry, geographic and collateral-type levels, where
appropriate.
The GE
Board of Directors (Board) has overall responsibility for risk oversight with a
focus on the most significant risks facing the company. At the end of each year,
management and the Board jointly develop a list of major risks that GE plans to
prioritize in the next year. Throughout the year, the Board and the committees
to which it has delegated responsibility dedicate a portion of their meetings to
review and discuss specific risk topics in greater detail. Strategic and
operational risks are presented and discussed in the context of the CEO’s report
on operations to the Board at regularly scheduled Board meetings and at
presentations to the Board and its committees by the vice chairmen, general
counsel and other officers. The Board has delegated responsibility for the
oversight of specific risks to Board committees as follows:
(31)
|
·
|
The
Audit Committee oversees GE’s risk policies and processes relating to the
financial statements and financial reporting processes, and key credit
risks, liquidity risks, markets risks, compliance and the guidelines,
policies and processes for monitoring and mitigating those risks. As part
of its risk oversight responsibilities for GE overall, the Audit Committee
also oversees risks related to GECS. At least two times a year, the Audit
Committee receives a risk update, which focuses on the principal risks
affecting GE as well as reporting on the company’s risk assessment and
risk management guidelines, policies and processes; and the Audit
Committee annually conducts an assessment of compliance issues and
programs.
|
|
|
|
|
·
|
The
Public Responsibilities Committee oversees risks related to GE’s public
policy initiatives, the environment and similar
matters.
|
|
|
|
|
·
|
The
Management Development and Compensation Committee monitors the risks
associated with management resources, structure, succession planning,
development and selection processes, including evaluating the effect
compensation structure may have on risk
decisions.
|
|
|
|
|
·
|
The
Nominating and Corporate Governance Committee oversees risks related to
the company’s governance structure and processes and risks arising from
related person transactions.
|
The GE
Board’s risk oversight process builds upon management’s risk assessment and
mitigation processes, which include standardized reviews of long-term strategic
and operational planning; executive development and evaluation; regulatory and
litigation compliance; health, safety and environmental compliance; financial
reporting and controllership; and information technology and security. In August
2009, GE appointed a chief risk officer (CRO) with responsibility for overseeing
and coordinating risk assessment and mitigation on an enterprise-wide basis. The
CRO leads the Corporate Risk Function and is responsible for the identification
of key business risks, ensuring appropriate management of these risks within
stated limits, and enforcement through policies and procedures. Management has
two committees to further assist it in assessing and mitigating risk. The Policy
Compliance Review Board (PCRB) meets between 12 and 14 times a year, is chaired
by the company’s general counsel and includes the chief financial officer and
other senior level functional leaders. It has principal responsibility for
monitoring compliance matters across the company. The Corporate Risk Committee
(CRC) meets at least four times a year, is chaired by the CRO and comprises the
Chairman and CEO and other senior level business and functional leaders. It has
principal responsibility for evaluating and addressing risks escalated to the
CRO and Corporate Risk Function and also reports to the Board on
risk.
GE's
Corporate Risk Function leverages the risk infrastructures in each of our
businesses, which have adopted an approach that corresponds to the company’s
overall risk policies, guidelines and review mechanisms. Our risk infrastructure
is designed to identify, evaluate and mitigate risks within each of the
following categories:
(32)
|
·
|
Strategic. Strategic
risk relates to the company’s future business plans and strategies,
including the risks associated with the markets and industries in which we
operate, demand for our products and services, competitive threats,
technology and product innovation, mergers and acquisitions and public
policy.
|
|
|
|
|
·
|
Operational. Operational
risk relates to the effectiveness of our people, integrity of our internal
systems and processes, as well as external events that affect the
operation of our businesses. It includes product life cycle and execution,
product performance, information management and data security, business
disruption, human resources and
reputation.
|
|
|
|
|
·
|
Financial. Financial
risk relates to our ability to meet financial obligations and mitigate
credit risk, liquidity risk and exposure to broad market risks, including
volatility in foreign currency exchange and interest rates and commodity
prices. Liquidity risk is the risk of being unable to accommodate
liability maturities, fund asset growth and meet contractual obligations
through access to funding at reasonable market rates and credit risk is
the risk of financial loss arising from a customer or counterparty failure
to meet its contractual obligations. We face credit risk in our industrial
businesses, as well as in our GECS investing, lending and leasing
activities and derivative financial instruments
activities.
|
|
|
|
|
·
|
Legal and Compliance.
Legal and compliance risk relates to changes in the government and
regulatory environment, compliance requirements with policies and
procedures, including those relating to financial reporting, environmental
health and safety, and intellectual property risks. Government and
regulatory risk is the risk that the government or regulatory actions will
cause us to have to change our business models or
practices.
|
Risks
identified through our risk management processes are prioritized and, depending
on the probability and severity of the risk, escalated to the CRO. The CRO, in
coordination with the CRC, assigns responsibility of the risks to the business
or functional leader most suited to manage the risk. Assigned owners are
required to continually monitor, evaluate and report on risks for which they
bear responsibility. We have general response strategies for managing risks,
which categorize risks according to whether the company will avoid, transfer,
reduce or accept the risk. These response strategies are tailored to ensure that
risks are within acceptable GE Board tolerance levels.
Depending
on the nature of the risk involved and the particular business or function
affected, we use a wide variety of risk mitigation strategies, including
hedging, standardized processes, approvals and operating reviews, insurance and
strategic planning reviews. As a matter of policy, we generally hedge the risk
of fluctuations in foreign currency exchange rates, interest rates and commodity
prices. Our service businesses employ a comprehensive tollgate process leading
up to and through the execution of a contractual service agreement to mitigate
legal, financial and operational risks. Furthermore, we centrally manage certain
risks through insurance determined by the balance between the level of risk
retained or assumed and the cost of transferring risk to others. We counteract
the risk of fluctuations in economic activity and customer demand by monitoring
industry dynamics and responding accordingly, including by adjusting capacity,
implementing cost reductions and engaging in mergers and
acquisitions.
GECS
Risk Management and Oversight
GECS has
developed a robust risk infrastructure and processes to manage risks related to
its businesses and the GE Corporate Risk Function relies upon them in
fulfillment of its mission. As discussed above, the GE Audit Committee oversees
GECS’ risk assessment and management processes.
At the
GECS level, the GECS Board of Directors oversees the GECS risk management
process, and approves all significant acquisitions and dispositions as well as
significant borrowings and investments. All participants in the GECS risk
management process must comply with approval limits established by the GECS
Board.
(33)
GE
Capital has established an Enterprise Risk Management Committee (ERMC),
comprising the most senior leaders in GE Capital, which has oversight
responsibility for identifying, assessing, mitigating and monitoring risk across
the entire GE Capital enterprise, including credit, market, operational, legal
& compliance, liquidity and funding risk. GE Capital, in coordination with
and under the oversight of the GE CRO, provides comprehensive risk reports to
the GE Audit Committee. At these meetings, which will occur at least four times
a year, GE Capital senior management will focus on the risk strategy and
financial services portfolio, including the risk oversight processes used to
manage all the elements of risk managed by the ERMC.
GE
Capital's risk management approach rests upon three major tenets: a broad spread
of risk based on managed exposure limits; senior, secured commercial financings;
and a hold to maturity model with transactions underwritten to “on-book”
standards.
Dedicated
risk professionals across the businesses include underwriters, portfolio
managers, collectors, environmental and engineering specialists, and specialized
asset managers who evaluate leased asset residuals and remarket off-lease
equipment. The senior risk officers have, on average, over 25 years of
experience.
Additional
information about our liquidity and how we manage this risk can be found in the
Financial Resources and Liquidity section of this Item and in Notes 10 and 22 to
the consolidated financial statements in Part II, Item 8. “Financial
Statements and Supplementary Data” of this Form 10-K Report. Additional
information about our credit risk and GECS portfolio can be found in the
Financial Resources and Liquidity and Critical Accounting Estimates sections of
this Item and Notes 1, 3, 6, 22 and 24 to the consolidated financial statements
in Part II, Item 8. “Financial Statements and Supplementary Data” of this Form
10-K Report.
Our five
segments are focused on the broad markets they serve: Energy Infrastructure,
Technology Infrastructure, NBC Universal, Capital Finance and Consumer &
Industrial. In addition to providing information on segments in their entirety,
we have also provided supplemental information for certain businesses within the
segments for greater clarity.
Segment
profit is determined based on internal performance measures used by the Chief
Executive Officer to assess the performance of each business in a given period.
In connection with that assessment, the Chief Executive Officer may exclude
matters such as charges for restructuring; rationalization and other similar
expenses; in-process research and development and certain other
acquisition-related charges and balances; technology and product development
costs; certain gains and losses from acquisitions or dispositions; and
litigation settlements or other charges, responsibility for which preceded the
current management team.
Segment
profit always excludes the effects of principal pension plans, results reported
as discontinued operations, earnings attributable to noncontrolling interests of
consolidated subsidiaries and accounting changes. Segment profit excludes or
includes interest and other financial charges and income taxes according to how
a particular segment’s management is measured – excluded in determining segment
profit, which we sometimes refer to as “operating profit,” for Energy
Infrastructure, Technology Infrastructure, NBC Universal and Consumer &
Industrial; included in determining segment profit, which we sometimes refer to
as “net earnings,” for Capital Finance.
We have
reclassified certain prior-period amounts to conform to the current period’s
presentation. For additional information about our segments, see Item 1.
"Business" in Part I and Note 27 to the consolidated financial statements in
Part II, Item 8. “Financial Statements and Supplementary Data” of this Form 10-K
Report.
(34)
|
Summary
of Operating Segments
|
||||||||||||||
|
|
General
Electric Company and consolidated affiliates
|
|||||||||||||
|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to consolidated financial
statements.
|
|
Energy
Infrastructure
|
||||||||
|
(In
millions)
|
2009
|
|
2008
|
|
2007
|
|||
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
37,134
|
|
$
|
38,571
|
|
$
|
30,698
|
|
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
$
|
6,842
|
|
$
|
6,080
|
|
$
|
4,817
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Energy(a)
|
$
|
30,185
|
|
$
|
31,833
|
|
$
|
24,788
|
|
Oil
& Gas
|
|
7,743
|
|
|
7,417
|
|
|
6,849
|
|
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
|
|
|
|
|
Energy(a)
|
$
|
5,782
|
|
$
|
5,067
|
|
$
|
4,057
|
|
Oil
& Gas
|
|
1,222
|
|
|
1,127
|
|
|
860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Effective
January 1, 2009, our Water business was combined with Energy. Prior-period
amounts were reclassified to conform to the current-period's
presentation.
|
Energy
Infrastructure segment revenues decreased 4%, or $1.4 billion, in 2009 as higher
prices ($1.3 billion) were more than offset by lower volume ($1.6 billion), the
stronger U.S. dollar ($0.7 billion) and lower other income ($0.5 billion),
primarily related to lower earnings from associated companies and marks on
foreign currency contracts. The increase in price was primarily at Energy. The
decrease in volume reflected decreased equipment sales at Energy, partially
offset by increased equipment sales at Oil & Gas. The effects of the
stronger U.S. dollar were at both Energy and Oil & Gas.
(35)
Segment
profit increased 13% to $6.8 billion, compared with $6.1 billion in 2008, as
higher prices ($1.3 billion) and lower material and other costs ($0.5 billion)
were partially offset by lower other income ($0.7 billion), primarily related to
lower earnings from associated companies and marks on foreign currency
contracts, and lower volume ($0.2 billion). Lower material and other costs were
primarily at Energy. Lower volume at Energy was partially offset by higher
volume at Oil & Gas.
Energy
Infrastructure segment revenues rose 26%, or $7.9 billion, in 2008 on higher
volume ($6.0 billion), higher prices ($1.4 billion) and the effects of the
weaker U.S. dollar ($0.5 billion). The increase in volume reflected increased
sales of thermal and wind equipment at Energy, and the effects of acquisitions
and increased sales of services at Oil & Gas. The increase in price was
primarily at Energy, while the effects of the weaker U.S. dollar were primarily
at Energy and Oil & Gas.
Segment
profit rose 26% to $6.1 billion in 2008, compared with $4.8 billion in 2007, as
higher prices ($1.4 billion), higher volume ($1.0 billion) and the effects of
the weaker U.S. dollar ($0.1 billion) more than offset the effects of higher
material and other costs ($0.7 billion) and lower productivity ($0.5 billion).
Volume and material and other costs increased across all businesses of the
segment. The effects of productivity were primarily at Energy.
Energy
Infrastructure segment orders were $36.0 billion in 2009, down from $43.2
billion in 2008. The $28.5 billion total backlog at year-end 2009 comprised
unfilled product orders of $19.3 billion (of which 84% was scheduled for
delivery in 2010) and product services orders of $9.1 billion scheduled for 2010
delivery. Comparable December 31, 2008, total backlog was $32.5 billion, of
which $23.0 billion was for unfilled product orders and $9.5 billion, for
product services orders. See Corporate Items and Eliminations for a discussion
of items not allocated to this segment.
|
Technology
Infrastructure
|
||||||||
|
(In
millions)
|
2009
|
|
2008
|
|
2007
|
|||
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
42,474
|
|
$
|
46,316
|
|
$
|
42,801
|
|
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
$
|
7,489
|
|
$
|
8,152
|
|
$
|
7,883
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Aviation
|
$
|
18,728
|
|
$
|
19,239
|
|
$
|
16,819
|
|
Enterprise
Solutions
|
|
3,957
|
|
|
4,710
|
|
|
4,462
|
|
Healthcare
|
|
16,015
|
|
|
17,392
|
|
|
16,997
|
|
Transportation
|
|
3,827
|
|
|
5,016
|
|
|
4,523
|
|
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
|
|
|
|
|
Aviation
|
$
|
3,923
|
|
$
|
3,684
|
|
$
|
3,222
|
|
Enterprise
Solutions
|
|
704
|
|
|
691
|
|
|
697
|
|
Healthcare
|
|
2,420
|
|
|
2,851
|
|
|
3,056
|
|
Transportation
|
|
473
|
|
|
962
|
|
|
936
|
Technology
Infrastructure revenues decreased 8%, or $3.8 billion, in 2009 as lower volume
($4.1 billion), the stronger U.S. dollar ($0.4 billion) and an update at
Transportation of our estimate of product service costs in maintenance service
agreements ($0.3 billion) were partially offset by higher prices ($0.5 billion)
and higher other income ($0.5 billion), primarily including gains on the
ATI-Singapore acquisition, dissolution of the joint venture with FANUC Ltd. and
the Times Microwave Systems disposition. The decrease in volume was across all
businesses in the segment. The effects of the stronger U.S. dollar were at
Healthcare, Enterprise Solutions and Aviation. Higher prices, primarily at
Aviation, were partially offset by lower prices at Healthcare.
Segment
profit decreased 8% to $7.5 billion in 2009, compared with $8.2 billion in 2008,
as the effects of lower volume ($1.0 billion) and lower productivity ($0.4
billion) were partially offset by higher prices ($0.5 billion) and higher other
income ($0.4 billion), primarily including gains on the ATI-Singapore
acquisition, dissolution of the joint venture with FANUC Ltd. and the Times
Microwave Systems disposition. The decrease in volume was across all businesses
in the segment. Lower productivity at Transportation and Enterprise Solutions
was partially offset by Aviation.
(36)
Technology
Infrastructure revenues rose 8%, or $3.5 billion, in 2008 on higher volume ($3.0
billion), the effects of the weaker U.S. dollar ($0.3 billion) and higher prices
($0.2 billion). The increase in volume reflected the effects of acquisitions and
increased sales of military and commercial engines and services at Aviation;
increased sales in the international diagnostic imaging, clinical systems and
life sciences businesses of Healthcare; increased equipment sales at
Transportation; and increases at Sensing and Inspection Technologies and Digital
Energy at Enterprise Solutions. The effects of the weaker U.S. dollar were
primarily at Healthcare and Enterprise Solutions. Higher prices were primarily
at Aviation and Transportation, partially offset by lower prices at
Healthcare.
Segment
profit rose 3% to $8.2 billion in 2008, compared with $7.9 billion in 2007, as
the effects of productivity ($0.5 billion), higher volume ($0.4 billion) and
higher prices ($0.2 billion) more than offset the effects of higher material and
other costs ($0.9 billion). The effects of productivity were primarily at
Healthcare and Aviation. Volume increases were primarily at Aviation and
Transportation. The increase in material costs was primarily at Aviation and
Transportation, partially offset by a decrease at Healthcare. Labor and other
costs increased across all businesses of the segment.
Technology
Infrastructure orders were $41.6 billion in 2009, down from $47.2 billion in
2008. The $38.6 billion total backlog at year-end 2009 comprised unfilled
product orders of $26.7 billion (of which 45% was scheduled for delivery in
2010) and product services orders of $11.9 billion scheduled for 2010 delivery.
Comparable December 31, 2008, total backlog was $37.6 billion, of which $28.4
billion was for unfilled product orders and $9.2 billion, for product services
orders. See Corporate Items and Eliminations for a discussion of items not
allocated to this segment.
NBC Universal revenues
decreased 9%, or $1.5 billion, in 2009 as lower revenues in our broadcast
television business ($1.1 billion), reflecting the lack of a current-year
counterpart to the 2008 Olympics broadcasts and the effects of lower advertising
revenues, lower revenues in film ($0.8 billion) and lower earnings and higher
impairments related to associated companies and investment securities ($0.4
billion) were partially offset by the gain relating to A&E Television
Network (AETN) ($0.6 billion) and higher revenues in cable ($0.3 billion).
Segment profit of $2.3 billion decreased 28%, or $0.9 billion, as lower earnings
in film ($0.6 billion), lower earnings and higher impairments related to
associated companies and investment securities ($0.4 billion), lack of
current-year counterpart to 2008 proceeds from insurance claims ($0.4 billion)
and lower earnings in our broadcast television business ($0.2 billion) were
partially offset by the gain related to AETN ($0.6 billion) and higher earnings
in cable ($0.2 billion).
NBC
Universal revenues increased $1.6 billion, or 10%, to $17.0 billion in 2008, as
revenues from the Olympics broadcasts ($1.0 billion) and higher revenues in
cable ($0.6 billion) and film ($0.4 billion) were partially offset by lower
earnings and higher impairments related to associated companies and investment
securities ($0.3 billion) and lower revenues from our television business ($0.1
billion). Segment profit of $3.1 billion in 2008 was flat compared with 2007, as
higher earnings from cable ($0.3 billion) and proceeds from insurance claims
($0.4 billion) were offset by lower earnings and impairments related to
associated companies and investment securities ($0.3 billion), losses from the
Olympics broadcasts ($0.2 billion), and lower earnings from our television
business ($0.1 billion) and film ($0.1 billion). See Corporate Items and
Eliminations for a discussion of items not allocated to this
segment.
As of
December 31, 2009, our NBC Universal business has been classified as held for
sale. For additional information, see Note 2 to the consolidated financial
statements in Part II, Item 8. “Financial Statements and Supplementary Data” of
this Form 10-K Report.
|
Capital
Finance
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
50,622
|
|
$
|
67,008
|
|
$
|
66,301
|
|
Segment
profit
|
$
|
2,344
|
|
$
|
8,632
|
|
$
|
12,243
|
(37)
|
December
31 (In millions)
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
537,060
|
|
$
|
572,903
|
|
|
|
(In
millions)
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
CLL(a)
|
$
|
20,523
|
|
$
|
26,443
|
|
$
|
26,982
|
|
Consumer(a)
|
|
19,268
|
|
|
25,311
|
|
|
25,054
|
|
Real
Estate
|
|
4,009
|
|
|
6,646
|
|
|
7,021
|
|
Energy
Financial Services
|
|
2,117
|
|
|
3,707
|
|
|
2,405
|
|
GECAS
|
|
4,705
|
|
|
4,901
|
|
|
4,839
|
|
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
|
|
|
|
|
CLL(a)
|
$
|
987
|
|
$
|
1,785
|
|
$
|
3,787
|
|
Consumer(a)
|
|
1,663
|
|
|
3,684
|
|
|
4,283
|
|
Real
Estate
|
|
(1,541)
|
|
|
1,144
|
|
|
2,285
|
|
Energy
Financial Services
|
|
212
|
|
|
825
|
|
|
677
|
|
GECAS
|
|
1,023
|
|
|