Global Growth & Emerging Markets John Rice Vice Chairman President & CEO, GE Infrastructure 1 / Calhoun GE strategy Safe + reliable growth company GE advantage scale + breadth + depth 10%+ 20% Leadership business with unique technical + market positions 2-3 x GDP Revenue Earnings ROTC + CFOA + Margins Aggressive financial discipline driving high margins + returns Innovative corporate initiatives driving organic growth Vibrant talent + strong team This is the way we win
Focused on faster growth and higher return Faster growth Industrial 5% 8% 07+ 2-3X GDP Organic Growth rate Higher return Financial 21% 15% ROE '90-'03 '04-06 '00 '06E Strategic actions Launch growth platforms $12B+ Invest in healthcare, services, energy, infrastructure Grow with technology IGCC, NDT Focus long-term growth rate Exit slow growth businesses Strategic actions Global Consumer Finance Financial verticals Higher returning businesses Focus ROE enhancement Exit Insurance with a simplified structure ( 05 Revenue - $B) Infrastructure $42B Industrial $33B Healthcare $15B NBCU $15B Commercial Finance $21B Consumer Finance $19B Market leadership Domain knowledge Technology advantage Financial strength AAA
Clear process for growth Technology/ Services Growth Leaders Customers Innovation Execute for Growth Commercial Excellence Globalization Clear goal: organic growth of 2-3X GDP Globalization enablers GE competitive strengths Technology leadership product & service Domain expertise market perspective Fulfillment capability Lean & Six sigma Localized Partnerships customer, supplier & government Resources & decision making with accountability GE uniquely positioned to serve the global markets
Business model to deliver Differentiate with technology Win lifecycle service System optimization Everywhere in the world Installed base CSA / upgrades / inspections & repairs New growth platforms, customer productivity Global footprint for our customers and shareholders Clear results GE ($ in billions) International ~41% $107 Developing Revenue ~$163 International ~45% Developing Domestic Developed Domestic Developed 01 06 Developing countries doubled in 5 years
Why we feel good Strong environment Positioned to win Huge growth potential Already having success Environment Aviation Energy Rail Oil & Gas Environment Production limited +150 GW per year EVO demand strong CapEx up 30%+ Position GE Advantage Leading technology Lifetime service Water Emerging markets #2 Global footprint Healthcare 10%+ growth Strength across the board
Developing markets huge potential Investment ~$3T ~$900B 95-04 05-14 Needs Energy Transportation Clean Water Medical GE solutions Energy... Oil & Gas Aviation... Rail Water Healthcare Population growth and increased living standards fuels growth China Middle East India Russia Eastern Europe Latin America A priority everywhere Transformation Global trends Population growth GE Aviation China backlog at ~2.7B Resource scarcity & security Global trade flow Standard of living Energy 06 turbine shipments 85%+ int l Oil & Gas Downstream 41% of business Water developing markets ~35% Healthcare emerging markets 15% + Infrastructure needs Rail 44% of 06 equip orders are int l Long term infrastructure development cycle
Rail China 300 Mainline deal $454MM Distributed power $44MM 80 OHV AC drive systems $62MM Europe Signaling Phoenix deal in Italy $40M New energy BioFuel engine LOI $25M CIS Kazakhstan/Russia 150 Mods $113MM 310 EVO s $654MM New OHV OEM for 150T AC truck India Signaling & train control Pipeline $100M 10 Marine engines for ABG $10M Latin America 1st EVO s in Mexico + Svc $474M 30 M&S engines $12M 07 Loco s Colombia & MRS $50MM Africa / Mid East Shipping Sheltam Loco s (S. Africa) 10 Units 30 engines for Power Gen (Sakr) $12M Winning in global markets GE Hitachi Nuclear Dynamics Strategy Formalize partnership with longterm BWR strategic ally Hitachi Focus on BWR technology & services; selective PWR activities Political environment still uncertain Working with several pot l US partners Improve global position Japan Interest high India China E. Europe Evolving consolidation MHI & Areva Toshiba + Westinghouse Capitalize on favorable economics Strong participation & partnership approach 20060109-7 JRI BOD 11-03-06/2
Summary Tremendous Infrastructure needs created by changing global trends do not see a slowdown Capital there to fund growth $$ being spent GE possesses the enablers to global growth GE is winning in the global market will continue to GE uniquely suited to deliver in the global market Agenda Welcome & overview John Rice International landscape Nani Beccalli GE in China Andy Solem GE in India TP Chopra Energy Jim Suciu Oil & Gas Claudi Santiago Water Jeff Garwood Healthcare Reinaldo Garcia GE Money Dmitri Stockton Wrap-up/Q&A Oil & Gas Plant Tour Lunch Depart for Airport - Qatar Flight