Form 10-K 2015 Summary

10-K Introduction
& Summary
This section provides an overview of General
Electric. It does not contain all of the information
you should consider. Please read the entire Annual
Report on Form 10-K carefully before voting or
making an investment decision.
IN PARTICULAR, PLEASE SEE THE FOLLOWING SECTIONS
Forward-Looking
Statements
page
Legal
Proceedings
19
page
Management’s
Discussion & Analysis
page
Risk
Factors
121
page
Financial
Resources &
Liquidity
23
page
116
Financial
Statements
page
79
127
Index of frequently requested
10-K information
Five-Year Financial Performance Graph
page 28
Segment Operations
page 35
Corporate Items and Eliminations
page 65
Pension Costs
page 71
Income Taxes
page 72
Share Repurchase Program
page 109
Financial Statement Footnotes page 136
WE WANT YOUR FEEDBACK
This year, we have simplified the presentation of some of our financial
statement footnotes (Postretirement Benefits – Note 12, Stock-Based
Compensation - Note 16 & Financial Instruments – Note 20). Let us know
what you think at www.ge.com/annualreport.
Many of the GE–specific terms & acronyms used
in this section are explained in Presentation on
page 23 and Other Terms Used by GE on page 24.
Some of the information we provide in this section
is forward-looking and, therefore, could change
over time to reflect changes in the environment in
which GE competes.
Certain measures that exclude Alstom are non-GAAP financial measures. For more information, see
Financial Measures That Supplement U.S. Generally Accepted Accounting Principles Measures (Non-GAAP
Financial Measures) on page 95.
Throughout the Annual Report on Form 10-K, we use the following icons:
POWER
RENEWABLE ENERGY
APPLIANCES & LIGHTING
4 GE 2015 FORM 10-K
OIL & GAS
CAPITAL
ENERGY MANAGEMENT APPLIANCES
GE DIGITAL
AVIATION PREDIX TM
HEALTHCARE
TRANSPORTATION
INDUSTRIAL APP ECONOMY
in 2015
Revenues
Industrial Operating +
GE Capital Verticals EPS1
$117.4B
$1.31
Countries in
Which We Compete
Employees
~180
333K
GAAP EPS
$0.17
Reflects certain GE Capital
exit-related charges
(see Supplemental
Information on page 95)
Major Portfolio Changes
M&A
Dispositions
Alstom acquisition
GE Capital exits
Organic Investment
Appliances sale agreed upon
Launched Current, powered by GE
Launched GE Digital
Synchrony split-off
How We Performed
Against Our 2015 Operating Goals
How We Tie
Pay to Performance
Target ActualYear-over-year
OPERATING EARNINGS PER SHARE1
Industrial
$1.10–1.20$1.14
19%
GE Capital Verticals
~$0.15
6%
$0.17
Goals Included
in 2015 Bonus Program

OPERATING PROFIT MARGINS1, 2
80bps
Industrial segments (without Corporate) 17.0% 17.0% by 2016
in 2015
(1 year ahead
of plan)
110bps
Industrial (with Corporate)
+
15.3%3 GE CAPITAL EXIT PLAN
Asset sales (ending net investment
(ENI) excluding liquidity)
~$90B
$104B
N/A
CASH
Free cash flow + dispositions1
$12–15B$15.2B
23%
Cash returned to investors
$10–30B
$22B
$33.0B



For more information on our
pay vs. performance alignment, see
our 2016 proxy statement.
GE Cash From Operating Activities (CFOA) ($16.4B)
– Net Plant & Equipment ($2.8B)
+ Disposition Proceeds ($1.7B)
=$15.2B
8%
Dividends ($9.3B)
+ Buyback ($3.3B)
+ Synchrony Exchange ($20.4B)
=$33.0B
1. Non-GAAP Financial Measure. See Financial Measures
That Supplement U.S. Generally Accepted Accounting
Principles Measures (Non-GAAP Financial Measures)
on page 95.
2. Excluding Alstom.
3. Excluding restructuring and other & gains.
GE 2015 FORM 10-K 5
Digital Industrial Company
What Defines the “New GE”
Unmatched
Digital Capabilities
(2016 targets)
Digital
Thread
PredixTM
Connecting 200K machines
through our installed base & digitizing
our engineering, commercial, sourcing
& services functions
Creating a common language
through our cloud-based Industrial
Internet operating platform with
~20K developers & ~50 partners
Industrial
Driving customer outcomes
App Economy through 100+ innovative Industrial
Internet apps
With a Portfolio
of Businesses Connected
Through the GE Store
POWER
RENEWABLE
ENERGY
CAPITAL
APPLIANCES &
LIGHTING
Global
Culture
Digital
Technology
OIL & GAS
ENERGY
MANAGEMENT
TRANSPORTATION
HEALTHCARE
And the Largest,
Most Global Scale
AVIATION
+
REVENUES
~$120B
BACKLOG
$315B
OPERATING
FOOTPRINT
~180
Countries
6 GE 2015 FORM 10-K
The GE Store
The GE Store is the transfer of technology, talent, expertise, and connections through
GE’s massive, diverse network of businesses and markets. GE’s businesses give and take from
the Store, and in 2015, the company made some great progress.
Value of scale and diversity
←→
↑
↑
SPREADING
LEVERAGING
SCALE
CREATING
SOLUTIONS
IDEAS AND CONNECTING
SOLUTIONS
POWER
RENEWABLE
ENERGY
CAPITAL
APPLIANCES &
LIGHTING
GLOBAL
SCALE
CULTURE &
SIMPLIFICATION
DIGITAL
TECHNOLOGY
OIL & GAS
ENERGY
MANAGEMENT
TRANSPORTATION
HEALTHCARE
AVIATION
Outcomes
↑
FASTER
GROWTH
↑
EXPANDING
MARGINS
↑
DEVELOPING
LEADERS
GE 2015 FORM 10-K 7
2010
2014
2015
$27B
2013
2014
2015
$43B
$43B
How We Use the GE Store to Win
Key Differentiators for GE
NEW 2015
Digital
“GE undertook a major reorganization
to create a unified digital business
within the company called GE Digital.”
Bill Ruh
SVP, Chief Digital Officer,
appointed September 2015
DIGITAL REVENUES1
DIGITAL REVENUES1
2014
2015
2016
(goal)
$4B
DIGITAL THREAD
COST PRODUCTIVITY
$5B
++
$500M
(2016 goal)
1. For an explanation of GE Digital’s reporting,
see Other Terms Used by GE on page 24.
Reshaping GE as a Digital Industrial Company
A UNIFIED
CORPORATE
ORGANIZATION
DEDICATED DIGITAL
RESOURCES AT
EACH BUSINESS
PRODUCT
MANAGEMENT
Consolidating existing
digital functions into a
new organization
Appointing Chief Digital
Officers in each business
who report jointly to the
business CEO & to GE’s
Chief Digital Officer
and who have digital
resources focused on
each phase of the
product life cycle
COMMERCIAL
GE
Digital
SOFTWARE
ENGINEERING
HEADQUARTERED IN
SAN RAMON, CA
INFORMATION
TECHNOLOGY
OPERATING
PLANS
CORPORATE &
BUSINESSES
ACCOUNTABLE TO
SHARED METRICS
TO DRIVE DIGITAL
SALES
INCENTIVE
COMPENSATION
PLANS
CUSTOMER
+
+
GROWTH
+
UPTIME
+
SAFETY
8 GE 2015 FORM 10-K
SHAREOWNER
EFFICIENCY
+
CAPACITY
CREATE
CUSTOMER & SHAREOWNER
VALUE
“We plan to grow
GE Digital from $5B
revenues in 2015 to
~$15B revenues by 2020”
— Jeff Immelt
+
+
REVENUES
MARGINS
+
RETURNS
GLOBAL SCALE
CULTURE & SIMPLIFICATION
SHARED SERVICES
“GE’s acquisition of Alstom further
strengthens our global footprint by
adding more in-country capabilities.”
“At the start of Year 3 of our shared services
initiative, you can see costs coming down
with the same or higher quality.”
John Rice
Vice Chairman & CEO,
Global Growth Organization
Industrial segment
segment revenues
revenues from
from growth
growth markets
markets
Industrial
Industrial segment revenues from growth markets1
2010
2010
2014
2014
2015
2015
$27B
$27B
GLOBAL GROWTH ORGANIZATION SNAPSHOT
20
countries with
$1B+ orders
Industrial selling, general & administrative (SG&A)
expenses as a % of sales
15.9%
15.9%
14.0%
14.0%
13.9%22
13.9%
2013
2013
2014
2014
2015
2015
$43B
$43B
$43B
$43B
12% average annual growth rate
Shane Fitzsimons
Industrial selling,
selling, general
general
& administrative
administrative
(SG&A)
Industrial
&
SVP, Global
Operations (SG&A)
expenses as
as a
a%
% of
of sales
sales
expenses
$67B
SHARED SERVICES SNAPSHOT2
24,000+
non-US
infrastructure orders
GE leaders &
commercial/services
employees localized in
growth markets
1.GE launched the Global Growth Organization in 2010.
Working at the core of the GE Store to leverage scale & identify innovative
solutions to deliver better outcomes at a lower cost for our customers
43%
of Industrial
functions
2014
2014
2015
2015
2016
2016
(goal)
(goal)
10,000
employees
(up from ~6,000 in 2014)
2. Excluding Alstom.
TECHNOLOGY
DIGITAL REVENUES
REVENUES11
DIGITAL
6
global
functions
LEADERSHIP
“Technology sharing across businesses
provides a higher return on capital
compared
$4B to single-use technologies.”
$4B
$5B
$5B
Vic Abate
“Our new Performance Development approach
emphasizes day-to-day development —
driving accountability, better customer
outcomes, and faster, continuous growth.”
++
SVP, Chief Technology Officer
Susan Peters
SVP, Human Resources
GLOBAL RESEARCH SNAPSHOT
10
Research
Centers
GLOBAL LEARNING SNAPSHOT
~3,000
3,100+
PhDs, engineers
& scientists
new patents
filed in 2015
$1B
50,000
participants
annual
investment
5,000
customers
50
200
countries
SELECTED RECENT PRODUCT LAUNCHES
locations
PROGRESS: RISING HIGHER
GE Is the World’s Best Company for Global Leaders
#1
LEAP3 Engine
HA-Turbine
Showcases unique technology
developments in additive
manufacturing & advanced materials
2015 orders &
commitments = 1,399 units
World’s largest, most
efficient gas turbine
2015 technical
selections = 82 units
(including 33 units in backlog)
GE ranked #1 in the world on the 2014 Aon
Hewitt Top Companies for Leaders list.
Crotonville, our global leadership
institute, is at the forefront of thinking
in leadership, culture, strategy &
innovation. Some of GE’s best-known
initiatives — ​Lean Six Sigma, WorkOut,
Simplification & FastWorks — ​took
shape here.
3.LEAP is a trademark of CFM International, a 50-50 joint venture between Snecma (Safran) and GE.
GE 2015 FORM 10-K 9
Connected Multi-Business Portfolio
as a Competitive Advantage
How We Are Performing
Consolidated
Revenues
$113.2B
Earnings from
Continuing Operations
Attributable to GE
Common Shareowners
3% 0%
$117.2B $117.4B
25%
$7.6B
$9.5B
83%
$1.7B
2013 2014 2015
Great infrastructure
businesses built upon
technical & market
leadership critical scale
to take advantage of global
demographic trends
Year
Event
2001
9/11
attacks
Diversity provides
strength through
disruptive events &
commodity cycles
Each business contributes
to GE by providing unique
expertise to the GE Store &
leverages the GE Store to
compete more effectively
9%
$10.3B $11.3B
Businesses
Businesses Mitigating
Impacted Impact
GE
Response
2013 2014 2015
Outcome
Invested
in next-gen
aircraft
engines
GE 90, GEnx,
next-gen CFM
Invested
to diversify
energy
businesses
Stronger, more
diversified
energy
businesses
7
Industrial Operating +
Verticals Earnings1
16%
$2
$244B
$13.1B
2013 2014 2015
2013 20
GE CFOA
$14.3B
$15.2B
$12.2B
$16.4B
$12.1B
Most other
businesses saw
double-digit
growth
Financial
crisis
Supported
Industrial
GE Capital with
businesses
generated ~$17B cash infusions
of cash flow
(as originally
reported)
$6.0B
GE Capital
Dividend
U.S. gas
turbine cycle
bottom
Industrial CFOA 1
$8.3B
2004
2013
Oil price
drop
Restructured
Oil & Gas and
acquired Alstom
energy businesses
at attractive price
2015
Industrial
Backlog
$249B
$266B
$64B
$315B
$226B
$195B
$185B
50bps
50
16.2%
16
15.7%
15.7%
$89B
$71B
20132013
201420
2013
HOW CAPITAL VERTICALS CONNECT TO INDUSTRIAL
Financing infrastructure investments through
Energy Financial Services, GE Capital Aviation
Services & Industrial Finance, including
Healthcare Equipment Finance
2014
S ervices
2015
Smaller GE
Capital that
is stronger &
more focused
Equipment
2009
$4.3B
$3.0B
2014
Segment Gross
Margins2
80bps
80bps
80bps
80bps
27.4%
27.4%
27.4%27.4%
26.6%
26.6%
2015
Industrial Operating
Profit Margins1, 3
110bps
110bps
160bps
160bps
15.3%
15.3%
14.2%
14.2%
12.6%12.6%
1
1
20132013
20142014
20152015
20132013
20142014
20152015
1.Non-GAAP Financial Measure. See Financial Measures That
Supplement U.S. Generally Accepted Accounting Principles (Non-GAAP
Financial Measures) on page 95.
2. Excluding Alstom.
3. Including Corporate, excluding Alstom, restructuring and other & gains.
10 GE 2015 FORM 10-K
POWER
RENEWABLE ENERGY
OIL & GAS
MISSION: Leading globally in power
MISSION: Making renewable power
MISSION: Pushing the boundaries of
technology in oil & gas to bring energy to
the world
Major products: power generation services,
gas turbines, engines & generators, steam
turbines & generators, nuclear reactors,
water systems
Major products: onshore & offshore wind
turbines, hydropower plants, solar power
plants, geothermal power plants, biomass
power plants
Digital solutions: PowerOn Advantage™,
Operations Optimization, Asset
Performance Management
Digital solutions: Wind PowerUp™,
Wind Farm Wake Management,
Water & Process Insight
Major products: surface & subsea drilling
& production systems, floating production
platform equipment, mechanical drives &
compressors, high-pressure reactors,
artificial lift solutions, sensing & inspection
solutions
Digital solutions: Subsea Systems
Optimization, Intelligent Pipeline Solution,
Reliability Max, Field Vantage™
RevenuesProfits
RevenuesProfits
RevenuesProfits
generation & water technologies
sources affordable, accessible & reliable for
the benefit of people everywhere
2015 Ex.
7%7%
Revenues = $6.2B 3%
Profits = $0.5B 28%
4%4%
10%
10%
33%
33% 2%2%
$21.5B
$20.6B
$20.6B$21.5B
$19.3B
$19.3B
$19.1B
$19.1B 14%
14%
$17.3B
$17.3B
$16.5B
$16.5B
$6.4B
$6.4B$6.3B
$6.3B
$4.8B
$4.8B
4%4% 0%0%
2013
2013 2014
2014 2015
2015
POWER
POWER
&
WATER
& WATER
Other
2015
results
Margins: 20.9% 90bps Ex. Alstom 22.3% 50bps
Backlog: $77.1B 32% Ex. Alstom $61.6B 5%
# gas turbines shipped: 107 1
4%4% growth in natural gas
+ Positive:
3%3%
Continued
$7.6B
$7.6B
$7.6B
$7.3B
$7.3B $7.6B
supplemented
by Alstom acquisition
– Negative: Excess capacity in developed
markets and continued pressure on oil &
gas applications
Outlook: Improving global competitive position
despite intense competition & positioning the
10%
124%
124% 10%
business for growth with Alstom
2013
2013 2014
2014 2015
2015
ENERGY
ENERGY
MANAGEMENT
MANAGEMENT
contribution
to ge store
2013
2013 2014
2014 2015
2015
4%4% 5%5%
2013
2013 2014
2014 2015
2015
RENEWABLE
RENEWABLE
ENERGY
Other 2015ENERGY
results
Margins: 6.9% 390bps Ex. Alstom 8.1% 270bps
Backlog: $12.4B 123% Ex. Alstom $7.1B 27%
# wind turbines shipped: 2,869 10
3%
9%Fastest
9% 3%growing
+ Positive:
energy market &
$24.7B
$24.7B
$24.0B
$24.0B
continued
push
towards carbon-free energy
$21.9B
$21.9B
– Negative: Challenging new product
transitions in onshore wind
Outlook: Positioning the business to deliver
high returns
11%
14%
14% 11%
$5.5B
$5.0B$5.5B
$4.3B
$4.3B $5.0B
2013
2013 2014
2014 2015
2015
contribution
to ge store
2013
2013 2014
2014 2015
2015
AVIATION
AVIATION
Sustainable power
systems & storage
Advanced
manufacturing,
combustion science
& services installed
base
$5.9B
$5.9B
$5.9B $5.7B
$5.7B$5.9B
$2.8B$2.4B
$2.4B
$2.4B $2.8B
$2.4B
$0.7B $0.4B
$0.5B
$0.5B$0.7B
$0.4B
$0.3B
$0.2B $0.3B
$0.1B
$0.1B$0.2B
2013
2013 2014
2014 2015
2015
17%
17% 12%
12%
43%
43% 38%
38%
$4.5B $4.5B
$4.5B
$4.3B
$4.3B$4.5B
2013
2013 2014
2014 2015
2015
2015 Ex.
Revenues = $20.6B 0%
Profits = $4.6B 2%
2013
2013 2014
2014 2015
2015
2014 2015
2013
2013 2014
2015
OILOIL
&2015
GAS
& GAS
Other
results
Margins: 14.8%
30bps Backlog: $22.9B
9%
1%1%
+ Positive:
4%4% for technical & valueDemand
$18.3B
$18.3B
$18.2B
$18.2B
$17.6B
$17.6B
focused
solutions
– Negative: Continued pressure from oil
prices, excess capacity & lower customer
capital expenditures
Outlook: Improving competitive position in a
0%0%
5%5%
tough environment through cost reductions,
$3.0B $2.9B
$3.0B
$3.0B $3.0B
$2.9B
value-focused solutions & strategic
investments
2013
2013 2014
2014 2015
2015
2013
2013 2014
2014 2015
2015
HEALTHCARE
HEALTHCARE
contribution
to ge store
Services, technology
& first-mover in
growth markets
201%
201%
$1.2B$(8.0)B
$0.4B
$0.4B$1.2B
$(8.0)B
1%1%
4%4%
$8.8B
$8.4B $8.8B
$8.3B
$8.3B$8.4B
0%0% 5%5%
GE 2015 FORM 10-K 11
$11.3B
$11.3B$11.3B
$11.3B$10.8B
$10.8B
2013
2013 2014
2014 2015
2015
ENERGY MANAGEMENT
MISSION: Being a global technology
leader for the transmission, distribution &
conversion of electrical power
7%
7%
7%
4%
4%
4%
$21.5B
$21.5B
$20.6B$21.5B
$20.6B
$20.6B
$19.3Bproducts: electrical distribution &
$19.3B
$19.3B
Major
control products & services, lighting &
power panels, grid management products
& grid modernization services, industrial
4%
0%
automation & software solutions,
advanced
4%
4%
0%
0%
$4.5B $4.5B
$4.5B
$4.3B $4.5B
$4.5B
$4.5B
$4.3B
$4.3B
motor, drive & control technologies
Digital solutions: Grid IQ™, Proficy
Monitoring & Analysis™, SmallWorld™
2013 2014
2014 2015
2015
2013
2013
2014
2015
2013 2014
2014 2015
2015
2013
2013
2014
2015
POWER&&&WATER
WATER
POWER
POWER
WATER
RevenuesProfits
AVIATION
HEALTHCARE
MISSION: Providing our aviation
customers with the most technologically
advanced & productive engines,
systems & services for their success
33%
33%
33%
medical technologies & services that are
shaping a new age of patient care
10%
10%
10%
2%
2%
2%
$6.4B $6.3B
$6.4B
$6.4B
$6.3B
$6.3B
Major products: jet & turboprop engines,
$4.8B
$4.8B
$4.8B
components
& integrated systems for
commercial, military, business & general
aviation aircraft & ship propulsion
applications, global service network
43% 38%
43%
43%
38%
38%
$0.7B $0.4B
$0.7B
$0.5B $0.7B
$0.5B
$0.5B
$0.4B
$0.4B
Digital solutions: Flight Efficiency Services,
Fuel Management, Fleet Management
2013 2014
2014 2015
2015
2013
2013
2014
2015
MISSION: Developing transformational
2013 2014
2014 2015
2015
2013
2013
2014
2015
$19.1B 14%
14%
$19.1B
$19.1B
14%
$17.3Bproducts:
$17.3B
$17.3B
Major
diagnostic imaging systems
$16.5B
$16.5B
$16.5B
(MRI, CT, nuclear & molecular imaging, digital
mammography), surgical imaging products,
ultrasound, pharmaceutical research &
production tools
17%
17%
17%
12%
12%
12%
$2.8B $2.4B
$2.8B
$2.4B $2.8B
$2.4B
$2.4B
$2.4B
$2.4B
Digital solutions: Centricity™, Dose
Management, Workforce Optimization,
Asset
Cloud
2014 2015
2013Optimization,
2014 2015
2015Health
2013
2015
2014
2014
2013
2013
2014
2014
2015
2013
2013
2015
OIL&&&GAS
GAS
OIL
OIL
GAS
RENEWABLEENERGY
ENERGY
RENEWABLE
RENEWABLE
ENERGY
RevenuesProfits
RevenuesProfits
2015 Ex.
3%
3%
3%
4%
4%
4%
$7.6B $7.3B
$7.6B
$7.6B
$7.6B
$7.6B
$7.3B $7.6B
$7.3B
Revenues = $6.6B 9%
Profits = $0.3B 12%
9%
9%
9%
1%
1%
1%
3%
3%
3%
4%
4%
4%
$18.3B$17.6B
$18.3B
$18.2B$18.3B
$18.2B
$18.2B
$17.6B
$17.6B
$24.7B
$24.7B
$24.0B$24.7B
$24.0B
$24.0B
$21.9B
$21.9B
$21.9B
11%
11%
14% 11%
14%
14%
$0.3B
$0.3B
$0.2B $0.3B
$0.2B
$0.1B $0.2B
$0.1B
$0.1B
2013 2014
2014 2015
2015
2013
2013
2014
2015
2013 2014
2014 2015
2015
2013
2013
2014
2015
2013 2014
2014 2015
2015
2013
2013
2014
2015
2013 2014
2014 2015
2015
2013
2013
2014
2015
ENERGY
MANAGEMENT
ENERGY
ENERGY
MANAGEMENT
OtherMANAGEMENT
2015 results
AVIATION
AVIATION
OtherAVIATION
2015
results
Margins: 3.6% 20bps Ex. Alstom 4.1% 70bps
Backlog: $11.7B 134% Ex. Alstom $3.4B 33%
(flat organically)
Margins: 22.3% 160bps Backlog: $151.2B 13%
# commercial engines shipped: 2,588 17
# GEnx engines shipped: 260 27
# military engines shipped: 766 302
Commercial spares rate: $37.1 million/day $6.9M
+ Positive: Grid Solutions growth through
5%
5%
4% 5%
4%
Alstom,4%
strength
in electrification & more
$5.9B
$5.9B
$5.9B
$5.9B
$5.9B
$5.7B $5.9B
$5.7B
$5.7B
renewables
on
the grid
– Negative: Continued pressure from oil prices
& excess capacity
Outlook: Positioning the business for long-term
growth & margin expansion with3%
Alstom
13%
13%
3% 13%
3%
2013 2014
2014 2015
2015
2013
2013
2014
2015
contribution
to ge store
TRANSPORTATION
TRANSPORTATION
TRANSPORTATION
Electrification,
controls &
power conversion technology
12 GE 2015 FORM 10-K
2013 2014
2014 2015
2015
2013
2013
2014
2015
2013 2014
2014 2015
2015
2013
2013
2014
2015
Other 2015 results
4%
4%
4%
1%
strength1%
in1%
air passenger
traffic
$8.8B
$8.8B
$8.8B
$8.4B
$8.4B
$8.3B $8.4B
$8.3B
Negative:
Military spending uncertain
– $8.3B
Outlook: Delivering through commercial
product transition
56%
56%
13% 56%
13%
13%
Margins: 16.3% 40bps Backlog: $17.2B 4%
U.S. orders: $8.7B 1%
Europe orders: $3.5B 8%
Growth region orders: $5.3B 6%
201%
201%
201%
$1.2B $(8.0)B
$1.2B
$0.4B $1.2B
$0.4B
$0.4B
$(8.0)B
$(8.0)B
+ Positive: Continued growth in developed
0% 5%
0%
0%
5%for IT/analytics5%
markets,
demand
$11.3B
$11.3B
$11.3B
$11.3B
$11.3B
$11.3B
$10.8B
$10.8B
$10.8B
based solutions, biopharmaceutical
market expansion
2013 2014
2014 2015
2015
2013
2013
2014
2015
– Negative: Pressure in emerging markets
Outlook: Positioning the business for longterm growth
4%
4%
14% 4%
14%
14%
$1.7B
$1.7B
$1.6B $1.7B
$1.6B
$1.4B $1.6B
$1.4B
$1.4B
$0.7B
$0.7B
$0.4B $0.7B
$0.4B $0.4B
$0.4B
$0.4B
$0.4B
2013 2014
2014 2015
2015
2013
2013
2014
2015
5%
5%
5%
$3.0B $2.9B
$3.0B $3.0B
$3.0B
$3.0B
$3.0B
$2.9B
$2.9B
HEALTHCARE
HEALTHCARE
HEALTHCARE
+ Positive: Lower fuel costs & continued
$1.3B
$1.3B
$1.2B $1.1B
$1.2B
$1.2B
$1.1B $1.3B
$1.1B
2013 2014
2014 2015
2015
2013
2013
2014
2015
0%
0%
0%
$5.5B
$5.5B
$5.0B $5.5B
$5.0B
$4.3B $5.0B
$4.3B
$4.3B
10%
10%
124% 10%
124%
124%
2013 2014
2014 2015
2015
2013
2013
2014
2015
contribution
to ge store
APPLIANCES & LIGHTING
APPLIANCES
APPLIANCES&&LIGHTING
LIGHTING
Advanced materials/
manufacturing &
engineering
productivity
2013 2014
2014 2015
2015
2013
2013
2014
2015
2013 2014
2014 2015
2015
2013
2013
2014
2015
contribution
to ge store CAPITAL
CAPITAL
CAPITAL
Diagnostics
technology &
first-mover in
growth markets
4%
4%
4%
7%
7%
7%
$19.3B
$19.3B
$19.3B
33%
33%
33%
$21.5B
$20.6B
$20.6B $21.5B
$17.3B
$17.3B
$17.3B
$19.1B
$19.1B
$19.1B
$4.8B
$4.8B
4%
4%
4%
0%
0%
0%
43%
43%
43%
$4.5B $4.5B
$4.5B
$4.3B
$4.3B $4.5B
$4.5B
$4.3B
2013
2013
2013
10%
10%
10%
2%
2%
2%
$6.4B
$6.4B $6.3B
$6.3B
$6.4B
$6.3B
2014
2014
2014
2015
2015
2013
2013
2015
2013
TRANSPORTATION
2014
2014
2014
2015
2015
2015
17%
17%
17%
38%
38%
38%
2013
2013
2013
2014
2014 2015
2015
2013
2013 2014
2014
2014
2015
2013
2014
APPLIANCES
& LIGHTING
2015
2015
2015
2013
2013
2013
2014
2014
2014
MISSION: Leading a global lighting
revolution to deliver innovative solutions
that change the way people light & think
3%
3%
9%
9%
about their9%
world 3%
$7.6B
$7.6B $7.3B
$7.6B
$7.6B
$7.6B
$7.3B $7.6B
$7.3B
$21.9B
$21.9B
2015
2015
2015
2013
2013
2013
CAPITAL
2014
2014
2014
2015
2015
2015
OIL
OIL&&
&GAS
GAS
OIL
GAS
RENEWABLE
RENEWABLE ENERGY
ENERGY
leader & supplier to the railroad, mining,
marine, stationary power & drilling
4%
4%
4%
3%
industries3%
3%
12%
12%
12%
$2.8B $2.4B
$2.8B
$2.4B
$2.4B $2.8B
$2.4B
$2.4B
$2.4B
$0.7B $0.4B
$0.7B
$0.5B
$0.4B
$0.5B $0.7B
$0.4B
POWER
POWER&&
&WATER
WATER
POWER
WATER
MISSION: Being a global technology
14%
14%
14%
$16.5B
$16.5B
$16.5B
$24.7B
$24.7B
$24.0B
$24.0B $24.7B
$24.0B
MISSION: Investing financial, human &
intellectual capital to help our industrial
businesses and their customers build
1%
1%
1%
4%
4%
their businesses
4%
$18.3B $17.6B
$18.2B
$18.2B $18.3B
$18.3B
$18.2B
$17.6B
$17.6B
RECENT DEVELOPMENTS
Major products: locomotives, diesel
engines, drilling motors, mining equipment
& propulsion systems, motorized drive
systems, software & analytics solutions
to
10%
124%
124% 10%
10%
124%
optimize rail & mining operations
$0.3B
$0.3B
$0.2B
$0.2B $0.3B
• Announced Appliances sale. See 2015 Portfolio
Changes on page 141
• Launched Current, powered by GE. A new energy 11%
11%
11%
14%
14%
14%
efficiency platform combining LEDs, solar,
storage,
$5.5B
$5.5B
$5.5B
$5.0B
$5.0B
$5.0B
$4.3B
$4.3B
onsite power & electrical vehicle
charging
stations
$4.3B
$0.1B
$0.1B $0.2B
$0.1B
Digital
solutions:
Trip Optimizer™,
Locotrol™
2013
2013 2014
2014 2015
2015
2013 2014
2014 2015
2015
2013
2013
2014
2015
2013
2014
2015
Distributed Power, GoLINC™, Railconnect™,
ShipperConnect™,
Movement
Planner™,
Yard
ENERGY
ENERGYMANAGEMENT
MANAGEMENT
ENERGY
MANAGEMENT
Planner, Smart Intermodal and Automotive
Terminal, Customer Performance Analytics
Major products: major home appliances
2013 2014
2014 2015
2015
2013 2014
2014 2015
2015
2013
2013
2013
2014
2015
2013
2014
2015
& lighting
products/services,
including
industrial-scale lighting solutions
AVIATION
AVIATION
AVIATION
Digital solutions: Intelligent Cities,
Intelligent Enterprises
RevenuesProfits
RevenuesProfits
Major products: GE industry-focused
financial services verticals, including
GE Capital Aviation Services, Energy
0%
0%
5%
5%
0%
5%
Financial Services and $3.0B
Industrial
Finance
$3.0B
$3.0B $3.0B
$2.9B
$2.9B
$3.0B
$3.0B
$2.9B
(including Healthcare Equipment Finance)
2013
2013
2013
2014
2014
2014
2015
2015
2015
2013
2013
2013
2014
2014
2014
2015
2015
2015
HEALTHCARE
HEALTHCARE
HEALTHCARE
RevenuesProfits
201%
201%
201%
$1.2B $(8.0)B
$1.2B
$0.4B
$0.4B $1.2B
$0.4B
$(8.0)B
$(8.0)B
5%
5%
5%
4%
4%
4%
0%
0%
0%
5%
5%
5%
$11.3B
$11.3B $11.3B
$11.3B $10.8B
$11.3B
$11.3B
$10.8B
$10.8B
4%
4%
4%
1%
1%
1%
$8.8B
$8.8B
$8.4B $8.8B
$8.3B
$8.3B $8.4B
$8.4B
$8.3B
$5.9B
$5.9B
$5.9B $5.7B
$5.9B
$5.9B
$5.7B $5.9B
$5.7B
2013
2013
2013
3%
3%
3%
2014
2014
2014
2015
2015
2015
2013
2013
2013
2014
2014
2014
2015
2015
2015
13%
13%
13%
4%
14%
4%
14% 4%
$1.7B
$1.7B
$1.6B $1.7B
$1.4B
$1.4B $1.6B
$1.4B
56%
56%
56%
$0.7B
$0.4B $0.7B
$0.4B
$0.4B $0.4B
$0.4B
$0.4B
2013
2013
2013
2014
2014
2014
TRANSPORTATION
TRANSPORTATION
TRANSPORTATION
Other 2015 results
Margins: 21.5% 150bps Backlog: $22.4B
# locomotives shipped: 985 189
# Tier 4 locomotives shipped: 756
2015
2015
2015
2013
2013
2013
2014
2014
2014
2015
2015
2015
2013
2013
2013
2014
2014
2014
Margins: 7.7%
2015
2015
2015
2013
2013
2013
2014
2014
2014
2015
2015
2015
CAPITAL
CAPITAL
CAPITAL
Other
2015 results
APPLIANCES
APPLIANCES
LIGHTING
LIGHTING
APPLIANCES
LIGHTING
Other 2015&&&results
6%
2015
2015
2015
Verticals Earnings
13%
13%
13%
$1.3B
$1.2B
$1.2B $1.1B
$1.2B
$1.1B $1.3B
2013
2013
2013
2014
2014
2014
ENI (ex. liquidity) 2, 3: $167B 54% Exit plan sales closed (ENI): $104B Tier 1 Common Ratio (Basel 3) (estimated)2: 14.5% 150bps
260bps
+ Positive: Digital & global expansion
+ Positive: LED market momentum & robust
+ Positive: Market receptivity to GE Capital
– Negative: Decreased North America locomo-
– Negative: Continued decline in traditional
– Negative: Continued pressure from oil &
opportunities
tive usage & global commodity price pressure
Outlook: Navigating a highly dynamic industry environment by launching new products
& transforming business to align to a more
global/digital future
contribution
to ge store
appliances market
lighting
Outlook: Continuing to grow LED while
investing in Current, powered by GE; expect
to close Appliances deal by mid-20161
contribution
to ge store
Engine technology
& growth market
localization
1.Subject to customary closing conditions.
2. Non-GAAP Financial Measure. See Financial Measures That Supplement U.S. Generally Accepted
Accounting Principles (Non-GAAP Financial Measures) on page 95.
3. Including assets of discontinued operations.
dispositions & strong commercial air traffic
gas prices
Outlook: Stable Verticals earnings profile
& focus on enhancing the GE Store through
launch of Industrial Finance
contribution
to ge store
LED is gateway
to energy efficiency
Financing for
infrastructure
investments
GE 2015 FORM 10-K 13
2015 Portfolio Changes: the biggest portfolio shift in GE’s history
Alstom Aquisition Closed
On November 2, 2015, GE closed its aquisition of Alstom’s Thermal, Renewables & Grid businesses for approximately $10.1B.
GE Segments Impacted
Alstom’s Strategic Fit with GE
• GE CONTRIBUTION
• Complementary technologies
• Global presence
• Ability to compete for “rest of the power plant”
• Installed base • ALSTOM CONTRIBUTION
GAS
TURBINE
HEAT
RECOVERY
STEAM
GENERATOR
Targeted Targeted POWER SERVICES INSTALLED BASE
60%
EPS Impact
2015$0
2016 ~$0.05
2018
~$0.15–0.20
2020 Targeted Synergy Benefits
increase
15K units
COST
SYNERGIES
9K units
GRID
SOLUTION
GAS TURBINE
GENERATOR
STEAM TURBINE
GENERATOR
~$3B
STEAM
TURBINE
GROWTH
SYNERGIES
$0.6B+
GE Capital Exit Plan Ahead of Schedule
Capital
On April 10, 2015, GE announced a plan to sell most of the assets of GE Capital (targeting ~$200B ENI in total sales), in addition
to the Synchrony split-off, retaining those financial assets that support our industrial businesses (which we call Verticals).
The New GE Capital
smaller, simpler, safer
Executing Faster than Plan
valuable industrial finance company
ENI1
$363B
Closed deals
$90B
Target for completing asset sales: 2017
Aviation Services
$167B
Energy Financial Services
Industrial Finance, including Healthcare
Equipment Finance , Industrial Finance
Solutions, Working Capital Solutions,
Trade Payables Solutions
≤$90B
Other (including our run-off insurance
portfolio)
Original 2015 Plan:
Enhancing the competitiveness
of our industrial businesses
(targeted)
Actual 2015 Progress (on a fourth-quarter 2014 basis):
Closed deals
$104B
Signed deals
Target for completing asset sales: 2016
(1 year ahead of plan)
$157B
Plan to apply for de-designation as a non-bank
systemically important financial institution (SIFI)
early 2016
On track to return ~$35B to
investors by 2018
Retaining GE Capital businesses that directly relate to,
and support the growth of, our core industrial businesses
Synchrony Split-Off Complete
On November 17, 2015, GE completed its exchange offer for Synchrony Financial (our North American credit card business).
Share buyback $20.4B
Appliances
GE shares retired
671M
ENI reduction
$65B
Offer oversubscribed
Appliances Sale to Haier Expected to Close in 20162
On January 15, 2016, GE entered into an agreement to sell its Appliances business to Haier following GE’s termination
of its agreement with Electrolux on December 7, 2015.
ORIGINAL DEAL
Buyer: Electrolux
Purchase price: $3.3B
Expected gain: ~$0.05–0.07/share
GE terminated agreement & received $175M
breakup fee
NEW DEAL
Buyer: Haier
Purchase price: $5.4B
Expected gain: ~$0.20/share
1. Excluding liquidity and including assets of discontinued operations. Non-GAAP Financial Measure. See Financial Measures That Supplement U.S. Generally Accepted Accounting Principles Measures
(Non-GAAP Financial Measures) on page 95.
2. Subject to customary closing conditions.
14 GE 2015 FORM 10-K
3.2X
How We Allocate Your Capital
Jeff Bornstein
SVP & Chief Financial Officer
“Our financial services exits are unlocking significant capital that we are reallocating to generate
higher returns. This year, we retired 6.6% of GE’s public float through the Synchrony Financial
split-off and plan to use the dividends from the GE Capital exits to fund our buyback program.”
GENERATING CAPITAL
ALLOCATING CAPITAL
$145B+
+ Cash from operating activities
+ GE Capital Exit Plan
+ Synchrony Financial split-off
1 Return ~$55B from GE Capital to investors
via buyback
2 Sustain attractive dividend of $35B (yield > peers)
3 Reinvest in organic growth (plant & equipment,
technology, global scale, digital)
4 Disciplined M&A (see framework below)
capital to allocate
from 2015–2018
+
Other
dispositions
(plus potential leverage
opportunity)
Potential for incremental debt to optimize
capital structure
HOW WE BALANCE CAPITAL ALLOCATION
• 2013 • 2014 • 2015
ALLOCATION /AMOUNTS
GOALS
Dividends
Sustain attractive dividend
(currently at $.23/share) with a
dividend yield higher than peers
$8.9B $9.3B
$7.8B $8.9B $9.3B
$7.8B
Buyback
Reduce share count to 8-8.5B shares
outstanding through GE Capital Exit
Plan & Synchrony Financial split-off
(reported on a book basis)
Restructuring &
Other Charges
$2.0B $1.8B
$2.0B $1.8B $1.7B
$1.7B
GOALS
GROWTH FUNDING
Research & Development, Plant & Equipment, Information Technology
$5.5B $5.3B $5.3B
$5.5B $5.3B
$11.5B
$11.2B $11.5B$5.3B
Priorities
• Expanding software & analytics
capabilities and investing in the
digital thread
• Supporting new product launches
• Localizing operations in key
growth markets
these
these 22 charts
charts are
are smaller
smaller
toto fitfit the
space
the space
$0.8B $1.0B $1.0B
$0.8B $1.0B $1.0B
$3.8B
$3.7B $4.0B
$3.7B $4.0B $3.8B
Synchrony split-off reduced
GE public float by 6.6%
Synchrony
split-off
$20.4B
$23.7B
$23.7B
$10.4B
$10.4B
$1.9B
$1.9B
ALLOCATION /AMOUNTS
Targeting world-class Industrial
cost structure & margins: ~12.8%
Industrial SG&A expenses as a %
of sales in 2016 (excluding Alstom)
Acquisitions
$10.4B
$10.4B
$9.0B
$9.0B
M&A framework
+ Bolt-on to existing businesses
+ No growth synergies assumed
+ Market upside GE
+ Feeds GE strategic momentum
+ Additive to EPS goals
$2.1B
$2.1B
TARGET 15%+ RETURNS
HOW CAPITAL ALLOCATION DRIVES RESULTS
Organic Revenue Growth
(Industrial segments)
1
7%
Free Cash Flow1
(GE CFOA – Net P&E)
$11.0B $11.8B
Operating Profit Margins1, 2
(Industrial with Corporate)
$13.5B
12.6%
14.2%
15.3%
Returns1
(Industrial ROTC)
14.3% 14.0%
16.9%
3%
0%
2013 2014 2015
2013 2014 2015
2013 2014 2015
2013 2014 2015
Above-peer revenue
growth in a slower
growth environment
Strong GE Capital
dividend &
Industrial CFOA
Segment margin
expansion & lower
corporate costs
Higher industrial
earnings &
lower capital
Key Year-Over-Year Drivers
1. Non-GAAP Financial Measure. See Financial Measures That Supplement U.S. Generally Accepted Accounting Principles Measures (Non-GAAP Financial Measures) on page 95.
2. Excluding Alstom, restructuring and other & gains.
GE 2015 FORM 10-K 15
How We Attack Industrial Margins
WHAT IS
OUR COST
BREAKDOWN
OUR
HISTORICAL
MARGIN
TRENDS
WITHOUT
CORPORATE
WITH
CORPORATE3
15% SG&A
70% Products & Services
OPERATING PROFIT MARGIN1, 2
15% Alstom
SEGMENT GROSS MARGIN1
17.0%
14.8%
12.0%
2011
15.1%
15.7%
11.6%
12.6%
16.2%
14.2%
27.7%
2011
2012 2013 20142015
HISTORICAL &
ONGOING FOCUS
Leaner Structure
~12.8%
27.4%
INTEGRATION
FOCUS
Lower Product Costs
• Investing in advanced
manufacturing & digitized factories
• Capturing supply chain value
through deflation, sourcing &
backward integration
• Designing for value through
FastWorks
<2%
Cost Synergies
• Manufacturing
& services
• Sourcing
• SG&A expenses
• Engineering &
technology
+50
~$3B
bps
gross margins
annually
Corporate
operating costs
as % of Industrial
revenues3
SG&A
expenses as
% of sales1
26.6%
RECENT
FOCUS
• 460bps reduction in Industrial SG&A
expenses as a % of sales from 18.5%
to 13.9%1 (2011-2015)
• 65% of processes moving to
shared services
• 77% reduction in enterprise resource
planning systems (2010-2015)
• $1B+ reduction in Corporate
operating costs (2013-2015)3
WHAT WE
ARE DRIVING
TOWARDS
27.4%
15.3%
2012 2013 20142015
HOW
WE DRIVE
MARGINS
28.0%
We are segregating
Alstom’s costs
from our SG&A and
Products & Services
costs as we focus on
integrating Alstom
and achieving
our targeted cost
synergies
target cost
synergies by
2020
2016 INITIATIVES TO DRIVE PRODUCT MARGIN EXPANSION
INTEGRATING GE-WIDE COUNCILS
LAUNCHING NEW PRODUCT COST LABS
Product Management, Supply Chain & Engineering
Leaders councils integrated to prioritize shared
margin goals across functions
Launching Product Management & Variable
Cost Productivity labs within Global Research solely
focused on product management & costs
HOW WE ARE DEFINING OPERATING PROFIT MARGIN GOING FORWARD3
PRODUCTIVITY
IMPROVEMENTS &
LOWER CORPORATE
COSTS
17%
1,2
+50 BPS
WITHOUT
CORPORATE
(in the past, our
margin targets
excluded Corporate)
1.Excluding Alstom.
2. Non-GAAP Financial Measure. See Financial
Measures That Supplement U.S. Generally Accepted
Accounting Principles Measures (Non-GAAP Financial
Measures) on page 95.
3. Excluding restructuring and other & gains.
15.3%
WITH
CORPORATE
2015
16 GE 2015 FORM 10-K
1,2
EXCLUDING
ALSTOM
ALSTOM IMPACT
(100–150) BPS
COST
SYNERGIES,
PRODUCTIVITY
IMPROVEMENTS
& LOWER
CORPORATE
COSTS
16%+
14–14.5%
INCLUDING
ALSTOM
INCLUDING
ALSTOM
2016 (FORECAST)
2018 (TARGET)
How We Focus on the Most Critical Enterprise Risks
“I have asked GE’s leaders to go deep on what I believe are the four most
critical risks facing the Company: product quality, cybersecurity, liquidity
and global compliance. Over the years, we have built lines of defense around
these core risk focus areas.”
Jeff Immelt
Chairman & Chief Executive Officer
CORE RISK FOCUS AREAS
PRODUCT
QUALITY
CYBERSECURITY
LIQUIDITY
(THROUGH A CRISIS)
GLOBAL
COMPLIANCE
DEEP
DOMAIN
EXPERTISE
• 58,000+ engineers
• 11,000+ IT & cyber
professionals
• 750+ Treasury
professionals
• ~700 compliance
professionals
DISCIPLINED
BUSINESS
PROCESSES &
CHALLENGE
CULTURE
• Integrated GE-wide council
on product management,
supply chain & engineering
• Product Safety Boards
• Services Council
• Product/system
design for security
• Installed base
remediation
• Cybersecurity Task Force
• Product Security Incident
Response Team
• Risk oversight & stress
testing
• Cash flow metrics
in compensation plans
• Policy Compliance Review
Board…8 compliance
operating reviews in 2015
• Global Ombuds System
• Deep culture of integrity
(Spirit & Letter)…our
leaders own it
• Ethisphere Magazine…
GE named one of the world’s
most ethical companies
10 years in a row
STRONG AUDIT
& THIRD-PARTY
OVERSIGHT
• Regulators…e.g.,
FAA, FDA, NRC
• Internal audit…
Corporate Audit Staff
• Red team…penetration
testing challenges
• Wurldtech…industrial
product design
• Credit rating agencies
• Regulators…e.g., FRB, PRA
• Internal audit…GE Capital
Audit
• External audit…KPMG
(~300 partners & 500K+ audit
hours annually)
• Internal audit…
Corporate Audit Staff &
GE Capital Audit
LINES OF DEFENSE
1
2
3
4
• Global Research Centers
BOARD
TRANSPARENCY &
MANAGEMENT
OVERSIGHT
• ~600 ombuds
GE Board
AUDIT
COMMITTEE
GOVERNANCE &
PUBLIC AFFAIRS
COMMITTEE
MANAGEMENT
DEVELOPMENT &
COMPENSATION
COMMITTEE
RISK
COMMITTEE
SCIENCE &
TECHNOLOGY
COMMITTEE
CORPORATE
AUDIT STAFF &
GE CAPITAL AUDIT
POLICY
COMPLIANCE
REVIEW BOARD
GE
BLUEPRINT
REVIEWS
GE CAPITAL ENTERPRISE
RISK MANAGEMENT
COMMITTEE
MANAGEMENT
OVERSIGHT
GE CAPITAL BOARD
BOARD
OVERSIGHT
Each committee
oversees risk in its area
of expertise & reports
to the full Board
• IT Security Operations Center
• Increased investment
3X+ since 2009
GE 2015 FORM 10-K 17