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3Q ’09 Highlights (Continuing Operations attributable to GE)
· EPS of $0.22 (down 51%) with $0.05 restructuring and other charges; earnings of $2.5 billion
· Strong Industrial cash flow of $11.5 billion YTD, on pace for greater than $15 billion for full year; $61 billion consolidated cash and equivalents at quarter-end
· Company revenues of $37.8 billion, down 20%, primarily due to GE Capital reduction, Industrial organic sales decline, no counterpart to 3Q ’08 Olympics and effects of currency exchange rates
· Total company orders of $18.4 billion, down 18%; equipment orders up $0.7 billion from 2Q ’09; total backlog of $174 billion, a record high
· Industrial operating profit rate solid at 16.3%, up 260 bps from 3Q ’08
· Capital Finance earned $263 million in the quarter, $2 billion YTD; reserves increased $0.8 billion; favorable tax credits as expected; on track for profitable ’09
· GE Capital completed 2009 long-term debt funding plan; pre-funded >90% of 2010 plan to date; balance sheet reduction ahead of plan

FAIRFIELD, Conn. – Oct. 16, 2009 – GE announced today third-quarter 2009 earnings from continuing operations (attributable to GE) of $2.5 billion, or .22 per share, including the effect of .05 in restructuring and other charges, down 51% from the third quarter of 2008.  Industrial segment profit grew 4% in the quarter compared to the year-ago period.  Cash generated from GE Industrial operating activities totaled $4.4 billion in the quarter and $11.5 billion year to date, up 1%.  Total company backlog of equipment and services grew 2% to $174 billion over the prior quarter.

“In a global economic environment that is beginning to slowly recover, GE delivered solid third-quarter business results,” GE Chairman and CEO Jeff Immelt said.  “We continue to execute on our plan at Capital Finance, perform well in a slow-growth industrial environment and strengthen the balance sheet with strong cash generation.  We are aggressively controlling costs, increasing our industrial backlog while expanding margins, and capitalizing on strong services performance.”

Industrial segment profit grew 4% versus the third quarter of last year.  An 11% increase in Energy Infrastructure earnings and NBC Universal’s 13% earnings growth more than offset an 8% decrease in Technology Infrastructure’s earnings.  These, combined with 149% growth in Consumer & Industrial earnings, partially offset continued pressure at Capital Finance, where profit decreased 87% for the quarter compared to a year ago. 

Revenues were $37.8 billion, in line with our expectations.  Industrial sales were down 13%.  Industrial organic sales, which exclude the impact of FX and the 2008 Olympics, were down 8%.  GE Capital Services (GECS) revenues declined 31%, driven by Capital Finance ending net investment reduction ahead of plan and the Penske Truck Leasing Co., L.P. deconsolidation.

GE generated $18.4 billion in Infrastructure orders, a decline of 18% year-over-year, and an increase of .5 billion over the previous quarter.  High-margin service orders continued to provide counter-cyclical balance and support future growth, increasing 3% year-over-year.  Total backlog was $174 billion, reaching an all-time high.  Equipment and service order cancellations remain insignificant.

“I am particularly proud of the team’s execution on Industrial cash flow,” Immelt said.  “This strong performance, despite the tough environment, has us on pace to generate more than $15 billion in cash this year.” 

In adiition, GE continued aggressive cost reductions in the quarter.  Restructuring and other items totaled .6 billion after tax, or .05 per share, bringing year-to-date restructuring and other charges to $1.3 billion after tax, or .12 per share.

“We continue to execute our plan of creating a more focused financial services company,” Immelt said.  “Capital Finance earned $263 million in the quarter and $2 billion year to date.  At the same time, we have reduced the Capital Finance ending net investment ahead of plan and increased reserves by .8 billion in the quarter. 

“While it remains a tough environment for GE Capital, we are seeing signs of stabilization,” Immelt said.  “Every segment at GE Capital was profitable with the exception of Real Estate, which is experiencing a tough environment but where we believe the risks are well understood and manageable.

“This is another quarter where the company executed on our commitments,” Immelt said.  “Our Industrial segment earnings growth was positive, while we built backlog.  We are well positioned in the markets and geographies that will grow in the future.  We have successfully navigated through the financial crisis and are preparing GE Capital to be a smaller, more focused franchise.  GE is well positioned in this reset economy.”

Third Quarter 2009 Financial Highlights:

Earnings from continuing operations attributable to GE were $2.5 billion, down 45% from $4.5 billion in the third quarter of 2008. EPS from continuing operations was .22, down 51% from last year. Segment profit fell 26% compared with the third quarter of 2008, as 11% growth at Energy Infrastructure, 13% growth at NBC Universal and 149% growth at Consumer & Industrial were more than offset by an 87% earnings decline at Capital Finance and an 8% earnings decline at Technology Infrastructure.

Including the effects of discontinued operations, third quarter net earnings attributable to GE were $2.5 billion (.23 per share) in 2009 compared with $4.3 billion (.43 per share) in the third quarter of 2008.

Revenues fell 20% to $37.8 billion. GECS revenues fell 31% versus last year to $12.7 billion. Industrial sales were $25.1 billion, down 13% from the third quarter of 2008.

Cash generated from GE Industrial operating activities in the first nine months of 2009 totaled $11.5 billion, up 1% from $11.3 billion last year.

The accompanying tables include information integral to assessing the company’s financial position, operating performance and cash flow.

GE will discuss preliminary third-quarter results on a Webcast at 8:30 a.m. ET today, available at www.ge.com/investor.  Related charts will be posted there prior to the call.

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GE (NYSE: GE) is a diversified infrastructure, finance and media company taking on the world’s toughest challenges. From aircraft engines and power generation to financial services, medical imaging, and television programming, GE operates in more than 100 countries and employs about 300,000 people worldwide. For more information, visit the company's Web site at www.ge.com.

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: 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 forward-looking statements.