GE Capital Investor Meeting December 8, 2009 "Results are preliminary and unaudited. 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. We do not undertake to update our forwardlooking 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 Capital” refers to GE Capital Finance, unless otherwise noted. “GE” refers to the Industrial businesses of the Company including GECS on an equity basis. “GE (ex. GECS)” and/or “Industrial” refer to GE excluding Financial Services.” Key messages 1 GE Capital has a strong and advantaged business model 2 Cautiously optimistic about the form and implications of regulatory reform 3 GE Capital’s long-term debt plan is fully funded through 2010. Cost of funds have significantly improved; liquidity position has strengthened 4 Balance sheet reduced by ~$40B 3Q’09 YTD … well ahead of plan 5 Real Estate risk is manageable within our framework 6 Expect losses and impairments to peak in 2010 7 Margins are improving 8 Earnings ~flat in 2010, should improve in 2011+ CFPA1478 Security Analysts_December 2009_TUES a.m. 2 GE Capital business model Advantage Today Pre-crisis 1• Substantial origination capability • Largest direct origination team • Still largest direct origination team 2• Deep domain expertise – Healthcare, Energy, Media, Aircraft • Advantaged in key verticals • Growing advantage 3• Experts at collateral/asset management • Strong residual realization • Strong collateral and residual realization 4• Experienced, disciplined risk management and capital allocation • On balance sheet underwriting – Spread of risk, secured • Core to business model 5• GE operational headset & tools • Scale focus • >25% lower costs 6• Match funded • Core value • Important differentiator Well positioned to compete CFPA1478 Security Analysts_December 2009_TUES a.m. 3 U.S. landscape 2008 2010 Banks, Fincos, Captives, Monolines, Other Primarily Banks Fewer players on the field CFPA1478 Security Analysts_December 2009_TUES a.m. 4 Regulatory update House Bill Senate Bill • No divestiture required • Grandfathers ILC/FSB • Restrictions by regulation TBD Activity restrictions • No divestiture required • Grandfathers ILC/FSB • Current non-finance activities grandfathered Oversight • Treasury-led Oversight Council • Fed would become GECC supervisor • New Agency for Financial Stability • Fed authority moves to new “super” bank regulator Affiliate transactions • “Captive financing” permitted • Some limits on other affiliate transactions • Restrictions by regulation TBD • Still early … • GE supportive of systemic regulation … engaged in legislative process • GE committed to GE Capital … preparing for heightened regulation CFPA1478 Security Analysts_December 2009_TUES a.m. 5 Lending environment has changed Non-banks and capital markets: ~2/3 of credit Focus shifting towards alternative sources Assets created since beginning of credit crunch – ’07 U.S. credit market debt outstanding Asset growth ’07-’09 Non-Banks & Capital Markets 66% 67% ~$600B 67% ~$500B ~$39T Banks 32% 31% 29% 2000 2006 2Q’09 ~$250B ~$180B Monetary Authority Source: Fed Reserve Flow of Funds Report NBFIs play larger role in small bus. lending Lease equip. finance credit supplied – by size, 2008 ~$35B Ins./ Retirement Capital Non-bank Markets Financial Inst. Source: Fed Reserve Flow of Funds Report ~$37B ~$39B 52% 58% NBFI share of lending to small businesses 5.1%, banks 4.2% ~20% of ’09 GE Capital commercial loans <$1MM Non-Banks 47% Banks 53% 48% 42% >$5MM $250,000$5MM <$250,000 Source: Equipment Leasing and Finance Association Banking Non-bank credit very important to U.S. economy CFPA1478 Security Analysts_December 2009_TUES a.m. 6 Attractive new business lending GE Capital total volume ($ in billions)a) Global Over 1.2MM small and medium business customers … committed credit over $60B $221B International Providing liquidity to critical areas of U.S. economy. Since 1/1/08: – $172B new U.S. commercial financing – $146B credit ~50MM U.S. consumers 116 Small and Medium Leading Sales Finance/PLCC franchise in the U.S. businesses b) Key wins/renewals: U.S. $31B 105 3Q’09YTD a) - Total volume = on-book plus flow; b) - Businesses with annual revenues <$50MM Volume 10%+ 2H vs. 1H … providing critical liquidity to customers in our markets CFPA1478 Security Analysts_December 2009_TUES a.m. 7 Volume and returns ($ in billions) 2009E on-book Volume/collections ~$191 2009E Commercial marginb) ~4.7% $42 ~2.9% ~$149 Portfolio margin trendb) 5.7% Run-off a) Collections/others Volume • Repositioning portfolio to higher yielding core businesses: Business Americas Asia Europe Banking Retail Finance Aviation Energy ’09E new bus. ROI ~3.3% ~3.6% ~2.2% ~2.5% ~3.3% ~4.0% ~6.0% New volume 5.4% ~5.0% 2009E Consumer marginb) 4.8% ~4.6% ~12.5% ~9.1% 2006 Run-off 2007 2008 2009E 2010F New volume b) - CV ex-gains; ex-Restructuring operations a) - ex-FX Portfolio margins expand in 2010 CFPA1478 Security Analysts_December 2009_TUES a.m. 8 Funding & liquidity ($ in billions) Long-term debt funding Actions $84 2009 funding completed in June $45a) ’08 ’09E $38b) 2010 long-term debt plan fully funded ’10F Plan to pre-fund $20-25B of ’11 in 2010 (a - Includes $13B pre-funded in 2008 (b - 2009 YTD as of Dec. 4 GECS commercial paper $72 CP reduced to $50B as committed $50 $50 Cash and back-up bank lines >2x CP 2010 cash planned at ~$40B+ 4Q’08 2Q’09 3Q’09 Funding in good shape CFPA1478 Security Analysts_December 2009_TUES a.m. 9 Capital and investment ($ in billions) Ending net investment–a) $525 4Q’08 Dynamics $501 $485 $475-485 2Q’09 3Q’09 4Q’09E Balance sheet down $40B+ Shrinking in the right places: (a - Capital Finance excluding effects of FX Leverage–b) GECS Tier 1 common ratio 7.5% ~7.7% 7.7:1 5.7:1 ~5.6:1 GECC 7.1:1 5.4:1 5.4:1 4Q’08 3Q’09 4Q’09E GECC – “Red” assets, Real Estate ~$30B – Mortgage originations ~91% 5.7% GECS 4.7 4Q’08 GECC equity $58 GECC TCE c) $30 6.5 6.6 Ratios strong and improving 3Q’09 4Q’09E $73 $42 ~$73 ~$42 (b - Net of cash & equivalents with hybrid debt as equity ex-non-controlling interests (c - Shareholder’s equity less goodwill & intangibles Strengthened fixed charge coverage agreement Balance sheet on track: ratios strong CFPA1478 Security Analysts_December 2009_TUES a.m. 10 Losses and impairments ($ in billions) ~$16.9 ~$13.0 2009 estimated Fed base case Dynamics ~$12.0-13.0 2009 estimated Fed adverse case 2009 estimate Strong work out, collections and collateral capabilities Better • U.S. Consumer • U.K. Mortgage ~Base case • Commercial loans and leases • Global Banking Still challenging • Commercial Real Estate Total losses running in line with Fed base case or better CFPA1478 Security Analysts_December 2009_TUES a.m. 11 2009 execution Dynamics Goal Liquidity Status Complete Funding Complete 2010 LTD plan 100% pre-funded Executed on alternative funding Balance sheet Ahead of plan ENI down $40B+ (ex-FX 3Q’09 YTD) Cost Ahead of plan $3.4B cost out Capital On track 5.4:1 leverage (GECC), 7.5% Tier 1 common ratio (GECC) Earnings On track $2.0B 3Q YTD $50B CP outstanding $57B GECS cash and equivalents at 3Q’09 Well positioned for 2010 CFPA1478 Security Analysts_December 2009_TUES a.m. 12 Agenda Funding & Liquidity Kathy Cassidy – Treasurer Financial Update Jeff Bornstein – CFO Portfolio Update Jim Colica – CRO Real Estate Ron Pressman – Real Estate CEO CLL Americas Dan Henson – CLL Americas CEO Operations Update Bill Cary – COO Summary Mike Neal Q&A CFPA1478 Security Analysts_December 2009_TUES a.m. 13 Funding & Liquidity CFPA1478 Security Analysts_December 2009_TUES a.m. 14 GECS funding ($ in billions) Securitization (FAS 167/FIN 46) TLGP - LT debt Non-g’teed - LT debt Highlights $515 6 $509 13 ~$505a) ~$500a) ~4 ~$501 59 30-40 $460-$470 53 368 334 285-295 • ’09 issuances included $47B TLGP & $23B un-guaranteed debt to complete ’09 & ’10 LTD plan • Spreads significantly better … recent issuances below TLGP allin levels • Plan to issue ~$20-$25B LT debt in ’10 to pre-fund 50%+ ’11 LTD plan • Strong GECC capital ratios with declining leverage Alternative funding/others 56 Comm’l paper 72 50 65-75 40-50 4Q'08 4Q'09E 4Q'10F • Will continue to maintain strong cash & liquidity position ~$57 ~$40+ • Funding cost remains competitive Cash & equivalents $37 55-60 (a - Includes ~$15B 3Q’09 YTD FX impact … excludes future FX changes CFPA1478 Security Analysts_December 2009_TUES a.m. 15 Alternative funding plan ($ in billions) $65-$75B ex-securitization $100-$110 30-40 $62 6 ~$59-64 ~4 Others 19 ~20 Intl. deposits 12 Securitization (FAS 167/FIN 46) 20-25 25 4Q’08 15-18 4Q’09E • U.S. bank deposits (ILC/FSB) : Lower assets in U.S. banks driving lower deposits … ramping up direct origination of assets in banks … launching retail deposits • International deposits : Continue growth in emerging markets (CEE & Central America) … launching new programs in large/developed markets 20-25 • Others: Continue to expand asset based funding, Euro covered bonds, Sukuk funding, GE Interest Plus growth, etc. 20-25 • Securitization : Increase primarily driven by consolidation of securitization debt per FAS 167 20-22 U.S. deposits (ILC/FSB) Comments 4Q’10F CFPA1478 Security Analysts_December 2009_TUES a.m. 16 GECC cost of funds 5-year bond spreads OAS (bps.) Libor spreads (bps.) Funding sources ’09A avg. Today 900 800 CP w/fees ~0 (5)-(10) 700 CD’s ( 2 yrs.) ~100 ~90 TLGP debt w/fees (3 yrs.) ~150 None Non-TLGP debt (5 yrs.) ~240 ~130 Securitization (3 yrs.) ~165 ~125 1100 1000 600 500 400 300 200 FinCo Index C Bank Index GECC JPM 100 Sep-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Jul-09 Sep-09 Nov-09 (Credit cards) FinCo Index Bank Index GECC 5yr spreads C 5yr JPM 5yr • TLGP + CPFF fees of $2.42B paid ’08/’09 • Spreads tightened significantly from crisis highs • Portfolio downsizing reducing impact of new higher cost debt … Avg. spread on ~$83B LT debt issued is L+ ~180 bps., including $5B 30 yr. LT debt raised at L+~400 in 1Q’09 • Positioned competitively for 2010 Spreads continue to tighten ... only a portion of LT debt portfolio re-priced in 2009 … offset by better pricing on new volume CFPA1478 Security Analysts_December 2009_TUES a.m. 17 Financial Update CFPA1478 Security Analysts_December 2009_TUES a.m. 18 Capital Finance Total year: 2009 and 2010 Earnings ENIa) 2009E 2010F $2.0-2.5B ~Flat, more pre-tax ~$475-485B ~$445-455B Fed base case or better ~Flat Costs ~$3.4B Lower by ~$0.5B (ex-FX, acq.) Volume (on-book, ex-flow) ~$150B +15-20% Margins ~4.6% + Cost of funds ~3.8% Spreads improving Reserve Coverage ~2.25% ~2.85%-3.00% Losses/impairments (a – 2009: ex-FX, 2010: ex-FX and FAS 167 Solid foundation for 2011+ CFPA1478 Security Analysts_December 2009_TUES a.m. 19 Delinquencies Commercial 30+ delinquency Consumer 4.69% 4.03% 4.19% 30+ delinquency a) Mortgage 13.23% 13.38% 13.21% 11.80% Equipmenta) 2.84% 2.78% 3.01% 10.56% 3.01% 9.21% 2.17% 7.43% 2.24% 1.61% 8.20% Total 8.80% 8.73% 8.76% 6.38% Real Estate b) 0.62% 1.15% 4.71% 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 Oct '09 Drivers 3Q'08 5.62% 6.02% 5.95% 5.92% Non-mortgage 6.02% 4Q'08 1Q'09 2Q'09 Oct '09 3Q'09 Drivers Equipment showing signs of stabilization – Improvement in Americas and EMEA North America up 31 bps. from 2Q to 7.27% in 3Q, up 13 bps. in October Real Estate increase driven by accounts paying current beyond maturity – Excluding these loans, rate stable at ~3.5% U.K. Home Lending down 9 bps. in 3Q from 2Q, down 40 bps. in October ‒ Up from seasonal low as expected (a - managed assets; (b - on book ‒ Continued improvement in HPI (5 consecutive months) ‒ Net gains on REO sales vs. marks in all 3 quarters Global Banking delinquencies flat Tough environment … but some signs of stabilization CFPA1478 Security Analysts_December 2009_TUES a.m. 20 Non-earnings ($ in billions) Capital Finance 3.60% Non-earnings % financing receivables Commercial $7.2 (1.5) (2.3) 2.13% 1.73% $13.0 $13.7 Loans in recovery/ workout 6.5 Expect full recovery/ cure 6.6 $10.0 $7.3 $5.4 $6.1 4.8 6.4 $6.5 1.9 1.9 1Q'08 2Q'08 Commercial 1.7 3Q'08 Nonmortgage 1Q'09 2Q'09 3Q'09 78% 71% (2.8) $3.3 nonmortgage reserves Cure 4Q 1Q 2Q 3Q 186% coverage Non-earnings coverage % Total 69% 63% 67% 173% 2Q’09 coverage (1.4) 4.8 3.2 4Q'08 3Q’09 reserves (1.8) 4.5 2.5 Est. loss exposure Consumer 7.2 4.7 $3.1 1.6 Collateral value on remaining exposure 3Q’09 non-earning 5.5 4.6 4.2 Consumer 3.7 4Q'07 $6.5 $8.0 173% 189% coverage 100% recovery 2.80% 1.41% 1.47% 1.53% 2Q’09 coverage (1.8) 3.89% 57% 50% 53% 3Q’09 non-earning Mortgage non-earnings 206% coverage ~98% payment rate 30% 33% 32% 29% Est. collateral value (0.1) 0.5 Est. MI Est. loss exposure $1.0 3Q’09 reserves CFPA1478 Security Analysts_December 2009_TUES a.m. 21 Commercial non-earnings roll-forward ($ in billions) 4Q’08 non-earnings roll-forward 100% recovery Loans in recovery/ workout Collateral on remaining exp. Est. loss exposure 1Q’09 non-earnings roll-forward Balance Remaining @ 4Q’08 @ 3Q’09 ∆ $1.0 $0.4 ($0.6) 0.4 0.2 (0.2) 1.1 0.7 $3.2 0.6 0.4 $1.6 (0.5) (0.3) ($1.6) 100% recovery Loans in recovery/ workout Collateral on remaining exp. Est. loss exposure 3Q’09 remaining balance composition Bankruptcy proceedings Negotiation/restructure In process of liquidating collateral All other, net Customer paying 0.4 0.2 (0.2) 0.7 0.4 $1.8 0.2 0.1 $0.7 (0.6) (0.2) ($1.1) 3Q’09 remaining balance composition Bankruptcy proceedings Negotiation/restructure In process of liquidating collateral All other, net $0.5 0.2 0.3 0.2 $1.3 0.3 $1.6 New Remaining @ 1Q’09 @ 3Q’09 ∆ $0.3 $0.2 ($0.1) Real Estate EFS GECAS CLL 3Q $0.1 0.2 0.1 1.1 $0.2 0.3 0.1 0.1 $0.7 Real Estate EFS GECAS CLL 3Q $0.1 – – 0.6 Performing largely as expected CFPA1478 Security Analysts_December 2009_TUES a.m. 22 Reserve coverage ($ in billions) Commercial $7.3 $6.6 Allowance for losses $5.3 1.7 Comm’l. Consumer Reserve coverage $5.7 3.1 2.5 19 mos. write-offs in reservesa) 2.0 4.2 3.6 3.7 4.1 4Q'08 1Q'09 2Q'09 3Q'09 1.42% 1.59% 1.81% 2.08% 9 mos. write-offs in reservesa) Reserves increased by $0.6B in 3Q’09 … coverage rate to 1.43% Real Estate – 77% of impaired loans with specific reserves are current Consumer Coverage at 3.11% U.S. Card & Sales Finance – Coverage rate up 45 bps. to 7.02% – Reserves/non-earnings 209% Mortgage – Coverage rate up 26 bps. to 1.59% – U.K. REO sales realization at 115% a) - 3Q’09 write-offs annualized/3Q’09 allowance Reserves +$757MM, coverage +27 bps. vs. prior quarter CFPA1478 Security Analysts_December 2009_TUES a.m. 23 Securitization accounting change (FAS 167) ($ in billions) Impact Accounting change – 1/1/10 • Substantially all securitization or conduit sale of receivables through a QSPE must be consolidated • Consolidation results in ~$1.5-2.0B charge to retained earnings, not P&L … “earned back” over time • Prospectively, new securitizations will likely be on balance sheet alternative funding • Receivables , reserves , 3rd party debt , retained interest , retained earnings , TCE/TA • ENI , but no incremental GE debt required Proforma impact Estimated balance sheet Receivables Reserves Other assets Assets 3rd party debt Other liabilities (net) Equity ~$42 (~2) (~10) Estimated income impact Retained earnings charge “earn back” ~$1.7 ~$1.3 “Top up” ~$30 ~$37 ~$1.2 YoY NI impact ~$0.3 ~$1.3 Earn back ~(1.2) “Foregone” gains ~$0.1 ~$0.9 (~5) (~2) Liabilities & equity ~$30 Securitization gains offset ~$0.1 ~$0.3 ’11F NI ’12+F NI $0 Day 1 charge to retained earnings ’10F NI 2009E gains ’10F gains YoY impact … “new earnings” offset by no securitization gains CFPA1478 Security Analysts_December 2009_TUES a.m. 24 Losses and impairments vs. stress ($ in billions) 2009 Estimated Estimated adverse base case case Commercial portfolio - Real Estate Credit costs $0.9 Impairments 0.7 - Aviation and Energy 0.4 - Mid-market lease/lend 2.0 - Other commercial 0.5 Consumer portfolio - U.S. 5.1 - Non-U.S. mortgage 1.2 - Other consumer 2.2 Total ~$13.0 2010 Estimated Estimated base adverse case case Estimate $1.0 1.1 0.7 2.6 1.5 ~$1.3 ~0.8 ~0.4 ~2.7 – $0.5 1.4 0.2 2.0 0.5 $1.4 1.5 1.0 3.1 1.0 5.7 1.6 2.7 ~$16.9 ~3.5 ~1.1 ~2.5 ~$12.0-13.0 4.8 0.7 2.1 ~$12.1 FAS 167 1.5 $13.6 5.0 1.3 3.2 ~$17.5 1.5 $19.0 2011 Fixed CC ~$2B ~$7B Current 2010 total loss expectations equal to or less than base case CFPA1478 Security Analysts_December 2009_TUES a.m. 25 SG&A ($ in billions) $13.1 Drivers • Delivering cost out: $3.4 Mar 19 Now ($1.0) ($1.4) +$0.4 Org. structures/HC ~$9.7a) 5%b) V Indirect spend (1.0) (1.3) +0.3 Dispositions (0.7) (0.7) – Total cost out ($2.7B) ($3.4B) +$0.7B • $500MM Restructurings across 40+ platforms TY’08 TY’09 estimate TY’10 outlook • Investing in growth platforms and portfolio management $3.4B cost-out in ’09 … more in 2010 a) - Excludes Penske which was deconsolidated 1Q’09, acquisitions and corporate assessments b) - ex-FX CFPA1478 Security Analysts_December 2009_TUES a.m. 26 Summary Losses and impairments running at to below Fed base case Equipment and Consumer delinquency flattening, Real Estate continues to be pressured Non-earnings coverage strong … managing portfolio Reserves coverage up to 2.08%, +66 bps. 3Q YTD 2010 similar to 2009, higher pre-tax earnings … improved margins, lower costs CFPA1478 Security Analysts_December 2009_TUES a.m. 27 Portfolio Update CFPA1478 Security Analysts_December 2009_TUES a.m. 28 GE Capital credit costs 2010 outlook Key factors U.S. Consumer • Unemployment key variable, historically low entry rate Losses stable Non-U.S. Consumer • U.K. Home Lending - HPI improving, loss severity stable … unemployment, HPI key variables • Spain & Ireland pressure losses Losses peak Equipment Leasing • Construction, auto, transportation & manufacturing sectors stabilizing Losses lower Corporate Lending • Pressure in media, manufacturing and run off portfolios … Europe LBO book stabilizing • Defaults peaking … higher non-earnings but loss severity remains <20% Losses peak Real Estate • Most pressure in U.S. market (multi-family, office) • Driven by 2006-’08 vintages • Key dynamics: unemployment, lack of liquidity Losses higher Expect total losses to peak in 2010 CFPA1478 Security Analysts_December 2009_TUES a.m. 29 Commercial portfolio Core Leasing ($64B) Corporate Lending ($81B) Credit losses Credit losses Loss rate Credit costs ’09E 1.4% ~$1.1B ’10 Fed base/adverse 1.2%/1.9% $0.9/$1.4B Key indicators stabilizing – Delinquency and non-earnings flattening – Loss severity within base case estimates Strong underwriting and asset remarketing – Residual recovery >100% Loss rate Credit costs ’09E 1.2% ~$1.0B ’10 Fed base/adverse 1.2%/1.9% $1.1/$1.7B Leveraged finance trends improving – Defaults peaking, non-earnings growth slowing – Loss severity remains <20% estimate … despite workouts taking up to 9 months Reduced exposure to auto, publishing and media Corporate aircraft values stabilizing Retail exposure – all asset based loans Increased collections focus – ~100 additional collectors in EU – 500+ U.S. collectors now managed centrally – Front-end moved into loss mitigation Resources switched to portfolio mgt./work-outs – 55+ work-out team in Americas – 8 additional in EMEA; 36 in Asia – Daily/weekly reviews Losses should improve in ’10 Losses should peak in ’10 CFPA1478 Security Analysts_December 2009_TUES a.m. 30 Consumer portfolio U.S. Consumer Finance ($26B)a) Loss rate Credit costs ’09E 14.5% ~$3.7B ’10 Fed base/adverse 16.6%/17.3% ~$4.8/$5.0B • All time low entry rate of 9.4% • Early actions paying off ... improving sensitivity to U/E – $240B of line thru the cycle … avg. line size $1.1K a) - ’09 average assets on book Rest of world: Consumer Finance ($52B) Loss rate Credit costs ’09E 4.6% ~$2.3B ’10 base/adverse 4.7%/7.0% $2.1/$3.2B U.K. Mortgage ($22B) Loss rate Credit costs ’09E 3.5% ~$0.8B ’10 base/adverse 3.1%/4.6% $0.5/$0.8B • REO @1,495 @ Nov ’09 ... 8 asset managers with ~56% of stock under offer • ’09 YTD loss severity for 80+ LTV ~13% (pre-MI 30%) • Continued focus on collections and hardship solutions Rest of world: Mortgage ($39B) Loss rate Credit costs ’09E 0.7% ~$0.3B ’10 base/adverse 0.5%/1.6% $0.2/$0.5B • CEE 30+ DQ 5.10% … FX pressures stabilized • Top 3 portfolios: Australia in runoff; France & Poland stable • Australia unsecured portfolios stable … 30+ DQ 4.89% • Global avg. LTV ~71% … non-earnings ~$1.2B (3.06%) … REO conversion slow due to longer legal procedures – Losses reflect mark to market – U/E & BKO pressures offset by timely portfolio actions • Global Auto 30+ DQ steady at ~3.3% Trends stabilizing going into 2010 CFPA1478 Security Analysts_December 2009_TUES a.m. 31 Commercial Real Estate CFPA1478 Security Analysts_December 2009_TUES a.m. 32 3Q’09 YTD performance 3Q’09 YTD dynamics Financials $88.7 Assets ($B) $83.7 Net income ($MM) $1,204 Original outlook Actuals Status Levers ($MM) NOI $1,104 $1,199 $618 $500 $124 $88 $1,377 $2,392 Occupancy 80% 79% Leasing 18.0 19.1 (pre-tax) Gains 1,202 Debt margin (net) ($948) 88 533 777 Core Depreciation/ losses (776) (1,570) Gains (net) Depreciation/ losses (pre-tax) Volume ($B) 3Q’08 YTD 3Q’09 YTD $19.3 $1.3 (MM sq. ft.) Team is executing … losses are challenge CFPA1478 Security Analysts_December 2009_TUES a.m. 33 Equity portfolio @ 3Q’09: $33B 87% wholly-owned Property income Yield JV 10% Owned RE 87% Other 3% • 97% existing properties NOI 5.4% 5.6% $1.5 $1.6 3/19 3Qa) 3/19 3Qa) • 3% development • $11MM average investment • Each asset a small business with multiple performance levers a) - 3Q’09 annualized Occupancy b) 80% 2Q’09 79% 3Q’09 • Leased 19.1MM sq. ft. YTD (13.1MM renewals; 6.0MM new leases) vs. 18.0MM sq. ft. plan b) - Excludes multifamily, hotel, parking & Mexico JV assets Leasing outlook (MM sq. ft.) GE lease roll ’08A ’09E ’10F ’11F 22 32 23 22 • Market will remain challenging • GE portfolio roll reduces in ’10/’11 • Team targeting strong out-performance - Outperformed in 8 of 11 major markets YTD • Availability of capex/tenant improvement $ is a critical differentiator • Limited debt on properties … increases speed on leasing decisions CFPA1478 Security Analysts_December 2009_TUES a.m. 34 Equity unrealized loss update ($ in billions, pre-tax) Unrealized gain/(loss) movement Y/E ’09 estimate: ~$7B b) $3 ($4) (~$7) Owned RE ~81% JV/other ~19% ($7) (~$3) YE’07 ’08 changes YE’08 ’09 changes YE’09E 34% value drop since peak a) Pole ∆ value Structure ∆ value Asia Pacific (33%) Owned RE (30%) Europe (25%) JV/other (72%) Americas (44%) • For owned properties, per U.S. GAAP we must state at depreciated cost, subject to impairment testing NEA $B $3 Unrealized loss by vintage b) ~7% ’08+ ~56% 14 ’07 10 ’06 6 <=’05 ~33% ~4% a) - Change in values since YE ’07 as % of GE book value b) - Percentages of total ~$7B unrealized loss CFPA1478 Security Analysts_December 2009_TUES a.m. 35 Working through equity unrealized loss ($ in billions, pre-tax) Unrealized equity loss over time (est.) Depreciation/potential impairment ~$0 ~$4 Leasing wins are creating value a) O’Connor St., Ottawa • Tenant occupied 96% but vacated 105k sq. ft. in 2H’09 (~$7) ~$3 YE’09 loss estimate ’10F • Leased 104k sq. ft. to federal government • Increase NOI by 80% to $3.5MM ’11-’13F Static 2013 YE view • Goal to outperform Fed adverse losses through strong property level execution • Highly experienced global team focused on maximizing asset values a) - Fed adverse case Old Broad St., London • 337k sq ft office asset • Leased 88k sq ft in ’09 … current occupancy of 74% • Agreed-upon leases push projected occupancy to 88% CFPA1478 Security Analysts_December 2009_TUES a.m. 36 Debt portfolio @ 3Q’09: $45B Debt structure Owneroccupied Sub-debt 19% 5% Delinquency trends (% o/s) >90% LTV + <1.0x DSC a) 5.6% $3.3B Singles 25% Delinquent 26% 74% Crossed portfolios 51% • 95% senior secured • 83% current LTV; 2.6x DSCa) 4.1% Current pay • 38% matures 2011+ a) - Excludes $8.4B owner occupied and $1.2B other debt balances, includes specific reserves 2.0% 4.0% 4.2% 3.5% 3.4% 2Q’09 4.1% 8.4% Banksb) 4.7% Banksb) (ex-const.) 3.7% 2.2% 0.6% 2Q'08 3Q'08 Credit costs ($MM) Reserve % Non-earnings % 2.8% 4.2% GE 4.0% 1.2% 2.2% 4Q'08 1Q'09 2Q'09 3Q'09 $87 0.64% 0.41% $110 0.87% 1.22% $234 1.24% 2.88% $559 2.26% 2.90% b) - Source: FFIEC (all commercial banks) Reserve components Delinquency by class Delinquent 4.7% 0.3% 3Q delinquency at $1.9B Performing beyond maturity 7.7% 7.0% • Apartment 10.1% • Hotel/retail • Other 3.4% 2.8% 3Q’09 $1.0B $0.2B $0.8B • 77% current paying with 1.5x DSC 3Q’09 General Specific CFPA1478 Security Analysts_December 2009_TUES a.m. 37 Debt maturities ($ in billions) ’09 maturities update ’10 maturities outlook Estimated result Collect 12/8 $2.2 $4.1 68% Extend/restructure $7.8 14% Foreclose $0.6 Total $10.6 12/8 $1.1 Collect Extend/restructure $3.5 Foreclose $0.8 $0.8 Total $6.0 $6.0 a) Estimated result % of total 18% 7/28 $1.7 a) a) - Includes $3.0B of contractual extensions Safety and margins: • Cross loans with same borrower • Structure partial pay-down • Prepare if necessary for foreclosure • Enhance pricing/terms and conditions 74% 6% b) - Includes $4.5B of contractual extensions Extensions/modifications Security: • Borrower is a strong operator for property • Collateral well positioned to meet/ out-perform market occupancy/rent b) % of total 20% Modifications Modified Total 3Q YTD $4.4B Pay down $0.5B Incremental life-time income $120MM 4Q’09E $1.6 – 2.8 $0.0 – 0.1 $90 – 170 Total ’09 $6.0 – 7.2 $0.5 – 0.6 $210 – 290 CFPA1478 Security Analysts_December 2009_TUES a.m. 38 Loss outlook ($ in billions, pre-tax) Loss views a) Dynamics Stress cases • Tough environment … real estate recovery will lag rest of economy ~$1.9-2.9 ~$2.1 ~$1.6-2.1 $1.4 Equity 0.5 Debt 0.9 ~0.8 ~1.3 3Q’09 YTD ’09 estimate ~1.4-1.5 ~0.5-1.4 • Get ahead of debt collateral values Restructure loans Maximize collections Create value in foreclosure ’10 base/ adverse • Maintain equity cash flows Outperform leasing market Control property expenses ~0.7-1.1 ~0.9-1.0 ’09 base/ adverse a) - Owner occupied reported separately in ’09 (~$0.1B) CFPA1478 Security Analysts_December 2009_TUES a.m. 39 Executing through a challenging environment + Realistic about valuations … assuming additional 13% value decline + Managing debt maturities Restructured 10% of portfolio in ’09 YTD $0.5B pay downs, reducing LTV ~200 bps. estimated margin improvement + Executing NOI/leasing plans 19MM sq.ft. leased … ahead of plan 84% of ’10 NOI already in place + Working through JV 3rd party debt maturities 70% of ’09 maturities resolved/agreement in concept Minimal fundings … limited write-offs + Controlling costs Reduced SG&A by 33% YTD vs. ’08 … continue to invest in asset management CFPA1478 Security Analysts_December 2009_TUES a.m. 40 CLL Americas CFPA1478 Security Analysts_December 2009_TUES a.m. 41 Commercial lending & leasing overview Portfolio mix ($214B) – 3Q’09 Equipment leases & loans 45% Americas 64% Asia 10% EMEA 26% Leveraged loans 19% • Leasing and lending against hard, foreclosable assets for 25+ years Factoring & ABL 17% • Operations across 30+ countries Other 11% 8% Other senior-secured • Organized by product & industry Healthcare Inventory Finance • Disciplined underwrite to hold approach Equip Finance Sponsor Leading provider of senior secured financing to middle market companies Bank Loan Group Franchise Fleet Services Corp Finance • Spread of risk: 1B+ transactions annually for 1MM+ customers globally • 21,400 employees with over 25% dedicated to risk management CFPA1478 Security Analysts_December 2009_TUES a.m. 42 What we do in the U.S. ($ in billions) 3Q’09 assets Product Focus Approach Equipment leases & loans $49 Collateral: hard, foreclosable assets • Essential use equipment • Inv. grade & mid-market customers • Remarketing expertise ABL & factoring $10 Collateral: inventory & receivables • Working capital for mid-market • Advance rate on eligible assets • Monitoring, audits, cash control Leveraged loans $32 Collateral: enterprise & assets • Mid-market LBO & acq. finance • Limited hold sizes & multiples • Predetermined exit strategies Franchise finance $12 Collateral: equipment & enterprise • Top tier and larger operators • Secured by assets & real estate • Avoid start-ups & locals Inventory finance $4 Collateral: dealer floor inventory • Equipment & OEMs we know • 1st lien on inventory • Manufacturer support Originate to hold … dedicated industry teams … foreclosable assets CFPA1478 Security Analysts_December 2009_TUES a.m. 43 Americas portfolio residual analysis Residual realization ratea) Dynamics (U.S. based collateral) • 3Q’09 YTD selected segments realization rates (~70% coverage): 128% 128% 122% 122% 124% 120% 119% 119% – Corporate Aircraft – 97% – Copiers – 121% – Transportation – 120% 100% – Healthcare – 137% • Lower return rates (69% 3Q’09 YTD “stick rate”), higher lease extension income helping offset softer equipment price levels 4Q'07 $B Residual $0.6 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 $0.4 $0.4 $0.4 $0.4 $0.3 $0.3 $0.2 a) - Realization rate includes early termination income, automatic renewals income + equipment sales proceeds • Corporate air exposure lessened by contractual early termination provisions (>~90% early term) Realization rates holding up well CFPA1478 Security Analysts_December 2009_TUES a.m. 44 How we go to market Equipment Lending • Equipment leases & loans • Franchise finance • Inventory finance Our products + • Leverage loans • Asset based loans Leases & loans secured by hard foreclosable assets Total volumea) ROI Value proposition Direct Lending Recognized leader in key segments with deep domain expertise Experienced sales force, highly structured ABL, DIP & restructuring Sponsor #1 leader – mid-market, deep relationships, strong sales coverage ~$2B ~4.3% Healthcare Strong healthcare expertise & capital markets capabilities, dedicated sales force ~$3B ~3.1% Equipment Strong industry & collateral knowledge, structuring expertise Speed … constant focus on cycle time, touchless originations ~$29B ~2.4% Dealer Finance Domain expertise & 50+ years of industry experience Best in class systems infrastructure & service applications ~$27B ~2.8% Franchise Restaurant industry expertise, product breadth, structuring flexibility ~$10B ~5.6% ~$1B Mid-market ($30-500MM) player Best-in-class service … over 300,000 customers ~2.6% a) - Total 2009 volume estimate CFPA1478 Security Analysts_December 2009_TUES a.m. 45 Americas margins 6.09 6.01 ~5.75 5.48 ~5.25 ~5.00 Portfolio Margin%a) New business margin% ~5.00 3.94 3.64 3.58 3.59 3.54 3.30 3.56 3.61 3.61 2.87 3.36 '07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 ~3.92 ~4.00 4Q'09E 1Q'10F ~4.15 ~4.26 ~5.00 ~4.43 3.70 3.47 2Q'09 3Q'09 2Q'10F 3Q'10F 4Q'10F a) - CV ex-gains • Disciplined capital allocation • Runoff $49B ’09-’10 @ 2.5% • Significantly accretive new originations • New on-book volume $40B @ 5.2% • Rigorous risk-based repricing effort • Repriced $22B, up 175 bps. Margins up strongly … additional $1B+ in ’10 vs. ’08 CFPA1478 Security Analysts_December 2009_TUES a.m. 46 CLL Americas summary ($ in millions) ’10 net income outlook Dynamics • Deep industry & product expertise Corporate ++ Sponsor + Equipment + Healthcare = Comm’l. Distribution = Franchise = • Leadership position across core mid-market financing products • Strong customer relationships with 1,300+ direct originators • Best-in-class credit & risk management • Experienced leadership team that’s weathered many cycles CFPA1478 Security Analysts_December 2009_TUES a.m. 47 Operations Update CFPA1478 Security Analysts_December 2009_TUES a.m. 48 U.K. Mortgage ($ in millions) Collections actions paying-off … DQs stabilizing 30% 7.9% U/E Est. 8% U/E % (RHS) 24% 25.9% $22.4B 7% 25.3% 5.2% 6% 18% 15.8% 30+ DQ (LHS) $21.6B 4% 3% 90+ DQ (LHS) 7.1% ($2.8B) ex-FX 5% 15.9% 15.1% 12% Shrinking assets 9% 8.0% 2% 6% 1% Jan '08 Apr '08 Jul '08 Oct '08 Jan '09 Apr '09 Jul '09 Oct '09 ’08A Real Estate owned … declining … 2,080 1,960 2Q’09 3Q’09 Out-performing stress loss scenarios 3Q sales 115% of carrying value 1,495 $995 Nov ’09 House prices stabilizing … up 4.2% YTD Halifax HPI (QoQ change) +2.8% (1.4%) (5.1%) (5.6%) (5.2%) (2.7%) (1.9%) 1Q’08 2Q’08 3Q’08 1Q’09 2Q’09 ’09E $1,125 ~$750 ’09 credit costs +3.7% ’09 Base ’09 Adverse 4Q’08 3Q’09 ’09E Nov’09 ’09 better than expected … earnings improve in 2010 CFPA1478 Security Analysts_December 2009_TUES a.m. 49 CEE Banks ($ in millions) Assets ($B) FX/Disp. Core $29.0 1.6 $28.2 Credit Grade A+ 50% A 20% B 16% C 7% D 7% 28.2 27.4 29.6 Stabilizing exchange rates and delinquencies 249.065 FX 22.826 183.818 (1.4) ’09E PLN 2.839 Dec ’08 Mar ’09 $1,043 90+% ~Base case losses ~$760 ’09E Sep ’09 Nov ’09 3.79% 4.17% 4.10% 4.11% 1.43% 1.63% 1.63% 1.64% 0.91% 3Q’08 4Q’08 1Q’09 4/’09 5/’09 6/’09 7/’09 8/’09 9/’09 10/’09 $724 Net income (3Q YTD) ’09 Adv. Jun ’09 Delinquency 2009 credit costs ’09 Base 17.624 2.547 30+% 2.50% $716 181.42 CZK 3.762 18.326 Oct ’08 ’08A HUF $331 ’08 ’09 2009 as expected, 2010 net income up CFPA1478 Security Analysts_December 2009_TUES a.m. 50 U.S. Consumer ($ in millions) Delinquency Served receivables ($B) (served) $56.3 Exits $49.8 $9.1 9.3% 8.1% Core $47.2 6.1% 5.8% ’08A 4.9% ’09E 2009 Credit costs 1Q'08 5.6% 7.3% $5,196 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 Oct '09 Net income (3Q YTD) $663 259 PY gains/Disp. Bus. ’09 Adverse 7.0% 7.4% 30+ DQ 6.2% $3,864 8.4% 6.9% 7.1% 5.4% Much lower losses $5,764 ’09 Base Unemployment 7.1% $43.3 Avg. U/E 10.2% 9.6% Risk actions have broken correlation $6.5 $404 $370 ’08 ’09 ’09E 8.9% 9.3% 2009 net income well ahead of expectations; earnings up in 2010 CFPA1478 Security Analysts_December 2009_TUES a.m. 51 Investment going forward ($ in billions) ENI ’09 dynamics 8%+ $525 $475-485 FX/FAS 167 “Green” businesses $445-455 345 ~$400 ~325335 • Managing volume: “green” platforms increasing as % of total book … ~69% at YE’09, up 3 points • “Red” assets/Real Estate volume limited to commitments – 3QYTD Mortgage originations ~91% – Real Estate volume ~87% “Red” businesses + Real Estate a) - ex-FX 180 ~150 ’08 ’09 outlooka) • ~$12B in dispositions ’10F ’12F • Includes Interbanca acquisition/ BAC step-up (~$17B) Positioning to grow “green” platforms CFPA1478 Security Analysts_December 2009_TUES a.m. 52 Summary/Q&A CFPA1478 Security Analysts_December 2009_TUES a.m. 53 2010 earnings outlook ($ in billions) 3Q’09 YTD 2010F CLL Dynamics + Lower losses + Improved margins + Lower SG&A $0.6 ++ Consumer 1.4 + + Improved margins + Stabilizing to lower losses + Lower SG&A Real Estate (0.9) – – Higher losses/impairments 0.9 = + Margin improvement = Manage aviation cycle Aviation/Energy Capital Finance $2.0 Solid foundation for 2011+ CFPA1478 Security Analysts_December 2009_TUES a.m. 54 GE Capital future ($ in billions) ++ Dynamics + $2.0+ Targeting $400B ENI ~Flat (ex-FAS 167 and FX) in 2012 2009E 2010F 2011F 2012F $475-485 $445-455 $415-425 ~$400 Losses – – + = + + ++ ++ SG&A + + + ++ Tax + – = = ENIa) Margins Margins improving Losses expected to peak in 2010 Estimated ~$2B capital contribution in 2011 under income maintenance agreement a) – 2009: ex-FX, 2010+: ex-FX and FAS 167 Higher pre-tax in 2010 … earnings growth in 2011 CFPA1478 Security Analysts_December 2009_TUES a.m. 55