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GE 2012 second quarter
performance
July 20, 2012
– Financial results & Company highlights
Caution Concerning Forward-Looking Statements:
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: current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets;
potential market disruptions or other impacts arising in the United States or Europe from developments in the European sovereign debt situation; the impact of conditions in the financial and
credit markets on the availability and cost of General Electric Capital Corporation’s (GECC) funding and on our ability to reduce GECC’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; changes in Japanese consumer behavior that may affect our estimates of liability for excess
interest refund claims (GE Money Japan); pending and future mortgage securitization claims and litigation with WMC, which may affect our estimates of liability, including possible loss estimates;
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 adequacy of our cash flow and earnings and other conditions
which may affect our ability to pay our quarterly dividend at the planned level; GECC’s ability to pay dividends to GE at the planned level; the level of demand and financial performance of the
major industries we serve, including, without limitation, air and rail transportation, energy generation, real estate and healthcare; the impact of regulation and regulatory, investigative and legal
proceedings and legal compliance risks, including the impact of financial services regulation; strategic actions, including acquisitions, joint ventures and dispositions and our success in
completing announced transactions and integrating acquired businesses; the impact of potential information technology or data security breaches; 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. We do not undertake to update our forward-looking statements.
“This document may also contain non-GAAP financial information. Management uses this information in its internal analysis of results and believes that this information may be informative to
investors in gauging the quality of our financial performance, identifying trends in our results and providing meaningful period-to-period comparisons. For a reconciliation of non-GAAP measures
presented in this document, see the accompanying supplemental information posted to the investor relations section of our website at www.ge.com.”
“In this document, “GE” refers to the Industrial businesses of the Company including GECC on an equity basis. “GE (ex. GECC)” and/or “Industrial” refer to GE excluding Financial Services.”
Overview
 Company positioned to deliver 2012 double-digit earnings growth in both Financial &
Industrial segments
 Environment continues to be challenging
• U.S. stable but mixed
• Growth in emerging markets
• Europe tough … Healthcare and Aviation
 Strong top-line performance … +10% Industrial segment organic revenue growth
• Industrial segment revenue +9%, Energy +19%, Transportation +27%
• Infrastructure orders up 1% ex. FX & 3% ex. Wind
• Positive orders price index … 1.2%
 Good earnings growth … operating EPS +12%
• Industrial segment profit +7% ... Energy +15%, Oil & Gas +11%, Transportation +58%
• GE Capital earnings +31% … driven by Real Estate improvement
 Solid execution
• Restarted GECC dividend … $3B to parent
• $0.9B stock buyback in 1H … expect $3.5-4.5B in 2H
• Industrial margins at 15% … on track for 30-50 bps. improvement in 2012
• Targeting ~$2B cost out 2012-2014
Preliminary 2012 second quarter results 2
2Q’12 orders $23.1B (1)%
($ in billions)
Strong backlog ($B)
Equipment
$
V%
Energy
$4.4
O&G
2.0
Energy Infra.
6.2
Aviation
3.0
Healthcare
2.7
Transportation
0.8
Total
$12.6
(5)%
(8 )
(6 )
12
4
(3 )
(1)%
Services
$
V%
$3.4
2.1
5.4
2.6
2.0
0.6
$10.5
(8)%
Equip. 51
11
(3 )
(3 ) Services 121
(2 )
10
'08
(2)%
+1.8%
$201
$204
53
53
52
148
152
$175
$175
46
46
129
129
147
'09
'10
'11
1Q'12 2Q'12
Highlights
2Q orders price profile +1.2%
+1.9%
$172
$200
 Total +3% ex. Wind & ex. FX
+2.2%
+1.1%
(1.5)%
 Energy equipment (5)%, +9% ex. Wind
 Equipment book-to-bill 1.03 …
equipment backlog flat ex. FX
 Growth regions +14%
Energy
O&G
Aviation
Healthcare Transportation
 1H orders $46.2B, +8%
Orders 2Q YTD +8% … backlog growth continues
Preliminary 2012 second quarter results 3
Growth dynamics
($ in billions)
Growth markets
Services
Industrial revenue
Revenue
$8.1
$9.4
+17%
$10.6
Technical progress
+2%
$10.8
+ GE & JV partners announced $17B new
commitments at Farnborough Airshow
in July
+ Investing to double production capacity
of advanced battery plant … 450 jobs
+ WattStation Connect software
completes integrated charging system
2Q'11
2Q'12
 Strength in Aviation,
Transportation, Energy and
Oil & Gas
 7/9 regions 10%+ ... ANZ +21%,
Canada +16%, China +24%,
LA +50%, MENAT +17%,
ASEAN +24%, Russia +10%
2Q'11
2Q'12
 Continued growth in Energy
& Transportation
 Europe impacting Healthcare
& Aviation spares
 Margin growth continues &
backlog  $13B vs. 2Q’11
+ Oil & Gas MaxLift 1800 pump system
increases drilling efficiency
+ Optima NM/CT640 … optimizes balance
between image quality, dose efficiency
& cost of ownership
+ Successful launch of bottom freezer
refrigerator … two launches in 2H
Macro trends holding ... executing growth strategy
Preliminary 2012 second quarter results 4
Operating profit margins
Second quarter
15.2%
15.0%
Sustained momentum
(20) bps.
+ Value gap
+ Acquisitions
+ Services
+ GE Advantage
’12–’14 simplification target ~$2B
2Q'11
Energy
Oil & Gas
Aviation
Healthcare
Transportation
H&BS
2Q'12
OP %
V pts.
15.0%
14.6
19.0
15.4
18.0
4.1
(0.5) pts.
0.7
(1.3 )
(0.4 )
3.5
(0.8 )
 Business restructuring … P&Ls , layers 
• Energy announced today, effective October
− Organized for speed & focus
− Will drive lower cost
− Three segments
 Power & Water
 Oil & Gas
 Energy Management
 More cost actions underway
 Expect margin rate expansion in 3Q
 On track for 100 bps. margin improvement 2012-2013
Preliminary 2012 second quarter results 5
Generating cash
Consolidated
cash $74B
($ in billions)
2Q YTD CFOA
GECC
dividend
$6.8
GE cash balance walk
V%
Total
+55%
Beginning balance 1/1/12
$4.4
3.0
3.8
Industrial
2011
(13)%
2012
 GECC dividend restarted
 Funded pension $0.2
 Managing Energy inventory needs to fulfill
strong backlog
 Continuing investment for organic growth
$8.4
CFOA
6.8
Dividends
(3.6)
P&E
(2.0)
Acquisitions
(0.4)
Buyback
(0.9)
Change in debt/FX/other
0.3
June 2012
$8.6
 Restarted GECC dividend in 2Q … $3B
 Pension funding requirements reduced by ~$2.5B in ’12 & ’13
Preliminary 2012 second quarter results 6
2Q’12 consolidated results
($ in billions – except EPS)
($ in millions)
Continuing operations
2Q’12
Revenues
– Industrial sales
– GE Capital revenue
Operating earnings
Operating EPS
Continuing EPS
Net EPS
CFOA
– Industrial CFOA
Tax rate
– GE (ex. GECC)
– GECC
$36.5
25.1
11.5
V%
2%
9
(8 )
4.0
0.38
0.34
0.29
7
12
3
(17)
6.8
3.8
55
(13 )
2Q’12
2Q’11
12%
20
5
20%
21
17
Memo: includes NBCU JV pretax profit of $242MM
Energy Infra.
Revenues
Segment
profit
$
V%
$
V%
$11,919
15%
$1,755
13%
Aviation
4,855
3
922
(4 )
Healthcare
4,500
0
694
(2 )
Transportation
1,565
27
282
58
H&BS
2,204
2
91
(14)
Industrial
25,043
9
3,744
7
GE Capital
11,458
(8 )
2,122
31
$36,501
3%
$5,866
15%
Strong performance in a tough environment
Preliminary 2012 second quarter results 7
2Q’12 other items
EPS impact
Category
One-time benefits
$.02
 BP transaction tax benefit
One-time costs
(.02)
 Restructuring, BD & other costs
Discontinued
operations
(.05)
 GE Money Japan $(.03)
− Claim reduction slower than expected
− Severity/claim continues to improve
 WMC $(.02)
− $2.2B of incremental claims received
− Reserve based on historical WMC
experience & estimate for future claims
Monitoring, but exposure is manageable
Preliminary 2012 second quarter results 8
Energy Infrastructure
($ in millions)
2Q dynamics
$
2Q’12
Revenues
Segment profit
V%
$11,919
$1,755
15%
13%
$
Energy
Oil & Gas
V%
$8,559
19%
3,658
5
Segment
profit
$
V%
$1,282
15%
535
• $7.8B orders, (6)% … equipment backlog $13.3B,
+8%, CSA backlog $50.1B
• Revenue … equipment +34%, services +4% …
higher equipment volume & acquisitions
• Segment profit, +15% … volume partially offset
by Thermal pricing
Key 2Q business results
Revenues
Energy
11
Oil & Gas
• $4.1B orders, +1% … equipment backlog $9.1B,
+6% ... CSA backlog $4.3B
• Revenue … equipment flat, service +10%
• Segment profit, +11% … strong volume & price
Energy continuing profit growth … strong 2H outlook
Preliminary 2012 second quarter results 9
Industrial segments
($ in millions)
Aviation
2Q’12
Revenues
Segment profit
Transportation
$
V%
2Q’12
$4,855
3%
Revenues
$922
(4)%
2Q dynamics
Segment profit
$
V%
$1,565
27%
$282
58%
2Q dynamics
• $5.6B orders, +5% … equipment backlog
$21.9B, services backlog $75.6B … up $8.3B
• $1.4B orders, +2% … equipment (3)%, services
+10% … equipment backlog $3.6B
• Revenues … equipment +12%, commercial
& military service (6)%
• Revenues … equipment +42%, NA locos &
mining; services +8%
• Segment profit (4)% ... lower spares rate &
increased GEnx deliveries
• Segment profit, +58% ... strong global volume
& services growth
 Aviation challenged by soft European aftermarket
 Transportation ... strong 2Q performance
Preliminary 2012 second quarter results 10
Industrial segments
($ in millions)
Healthcare
2Q’12
Revenues
Segment profit
Home & Business Solutions
$
V%
2Q’12
$4,500
0%
$694
(2)%
Revenues
Segment profit
2Q dynamics
$
V%
$2,204
$91
2%
(14)%
2Q dynamics
• $4.7B orders, +1% … equipment +4%,
service (2)% … equipment backlog $4.2B
• New products driving 1 pt. share gain in a
~flat appliances industry
• Revenues ... Europe (8)%, U.S. +1%, growth
regions +6%
• Slow consumer channel & Europe decline
challenging global lighting market
• Segment profit, (2)% ... pressured by
execution misses in Latin America
• Maintaining product refresh focus … programs
up +43% … more NPI launches in 2H
 Healthcare pressure in developed markets … emerging remain strong
 H&BS maintaining focus on refreshing appliance product line
Preliminary 2012 second quarter results 11
GE Capital
($ in millions)
30+ delinquency %
2Q’12
$
Revenue
$11,458
Pretax earnings
2,238
Net income
2,122
ENI (ex. cash)
433B
Net interest margin
4.9%
Tier 1 common ratio
10.1%
Assets ($B)
$
V%
CLL
Consumer
Real Estate
GECAS
EFS
$185
135
58
50
20
(7)%
(7 )
(14 )
2
8
V%
(8)%
13
31
(5)
47 bps.
1 pt.
Segment
profit ($MM)
$
V%
$626
907
221
308
122
(11)%
(13)
F
(4)
(12)
12.55%
12.64%
12.64%
12.35%
12.01%
7.23%
7.22%
6.93%
6.67%
6.74%
4.12%
4.18%
2.76%
3.08%
2.81%
1.94%
1.99%
1.99%
2.05%
1.90%
2Q'11
3Q'11
4Q'11
1Q'12
2Q'12
Mortgage
Consumer
Real Estate
CLL
2Q dynamics
•
•
•
•
•
Real Estate recovery continues, +$0.6B
U.S. Consumer earnings +9%
Volume +8%, new business ROIs ~3%
Raised $22B of long-term funding year-to-date
Europe continues to be challenging but
manageable
Restarted dividend … $3B paid to parent
Preliminary 2012 second quarter results 12
2012 operating framework
Operating
earnings
2012F
Industrial
++
 Strong global organic growth
 Energy acquisitions performing
 Broad-based strength
GE Capital
++
 Improved losses & impairments
 Real Estate improving
Corporate -a)
~Flat
Total operating
earnings
++
CFOA – Industrial
$11-12B
Total revenues
~5%
(a- Excluding NBCU pretax gain $3.7B in 2011
2012 drivers
 ’11 items: NBCU gain & restructuring
 Total cost ~$3B–a) in ’11 & ’12
 Industrial CFOA $12-13B before pension
contribution ~$0.4B; minimal in ’13
 Total CFOA $17-19B with GECC dividends
 Industrial organic 5-10%, Capital (5)%
 NBCU gain ’11 impact
Strong growth in both Industrial & Capital
Preliminary 2012 second quarter results 13
GE Works
1 Strong Industrial outlook
2 On track for margin enhancement over 2012-2013
3 Getting cash from GE Capital
4 Making GE Capital smaller
5 Balanced capital allocation ... short term plan to use GECC
special dividends ($4.5B) to buyback stock
+ Expect to continue growing dividend in line with earnings
Positioned for double-digit EPS growth in a volatile environment
Preliminary 2012 second quarter results 14
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