GE AEROSPACE 
Record Industrial CFOA of $5.5B in 4Q;
FY'11 of $12.1B GE Positioned to Deliver Double-Digit
Earnings Growth in 2012
4Q and Full-Year 2011 Highlights
• Seventh consecutive quarter of strong earnings growth
4Q Operating EPS of $0.39, up 11%; Full-year 2011 Operating
EPS Excluding Effects of Preferred Redemption of $1.37, up
22%
4Q Continuing EPS of $0.37, up 3%; Full-year 2011 Continuing
EPS Including Effects of Preferred Redemption of $1.23, up
8%
Revenues of $38.0 billion for the quarter; $147.3 billion for
the year
• Leading indicators remain encouraging
Infrastructure orders of $28.6 billion up 15% for the
quarter; Equipment up 23%; Services up 7%
Industrial segment emerging market orders up 26% for the
quarter
Organic orders up 9%
•GE Capital earned $1.6 billion, up 58% for the quarter, with
pre-tax earnings of $1.8 billion, up 89%
GECC/GECS Tier 1 Common Ratios of 11.4%/9.9%
Volume of $49 billion, up 13% for the quarter; Margins were
5.4%
FAIRFIELD, Conn. - Jan. 20, 2012 - GE [NYSE: GE] announced
today fourth-quarter 2011 Operating Earnings of $4.1 billion,
or $0.39 per share, up 6% and 11% respectively from the
fourth-quarter of 2010. Revenues were $38.0 billion for the
quarter and $147.3 billion for the year. Record
Infrastructure orders of $28.6 billion in the fourth quarter
enabled GE to end the year with a backlog of $200 billion,
the largest in its history.
"GE's portfolio demonstrated strength and resilience,
delivering earnings growth for the seventh consecutive
quarter while also generating substantial operating cash flow
to support investment in our business and dividend growth,"
said GE Chairman and CEO Jeff Immelt. "We are confident in
our 2012 framework to realize double-digit earnings growth in
our Industrial and Capital segments, increase margins and
provide dividend growth to our shareholders in line with
earnings."
Immelt continued, "We expect continued volatility in 2012 and
have prepared for it by investing in new products and
technology, expanding our growth market footprint and taking
important steps to strengthen risk management. GE Capital is
safe and secure and rebounding sharply. We are restructuring
our businesses in Europe to reflect market conditions."
Infrastructure orders for the quarter were $28.6 billion, up
15% from the prior year. Organic orders grew 9% in the fourth
quarter, marking the seventh consecutive quarter of positive
growth, and Industrial emerging market orders were up 26%.
Equipment book-to-bill was 1.23 for the quarter and 1.14 for
the year. Strong Energy and Aviation orders led the growth.
Orders for the quarter included: Emirates ordering 50 Boeing
777-300ER aircraft powered by GE Aviation's GE90 engines
and signing a 12-year service agreement. GE also signed
contracts totaling almost $300 million with the Saudi
Electricity Company to supply 13 gas turbines and associated
services for the expansion of six power plants at various
locations across the country.
Total revenues for the quarter were $38.0 billion, up 4%
excluding the impact of NBCU. GE's fourth-quarter Industrial
segment revenues were $26.8 billion, up 10%. Industrial
segment organic revenue was up 5% for the quarter. Industrial
emerging market revenues were up 25%, driven by double-digit
growth in Brazil, Russia, China, India and the ASEAN region.
Revenues were negatively impacted by lower Ending Net
Investment (ENI) at GE Capital, FX and slower growth in
Europe.
Industrial segment profit was up 2% to $4.3 billion for the
fourth quarter. Segment operating profit margins showed
improvement from the prior quarter, increasing 2.5 points,
but were down from the fourth quarter of 2010. Cash generated
from Industrial operating activities for 2011 totaled $12.1
billion and was a record $5.5 billion for the quarter.
GE's investment in research and development (R&D) in 2011 was
16% higher than in 2010 and will help the company launch more
than 800 new products in 2012. GE's businesses are positioned
to capitalize on the investment the company has made in R&D
by enabling it to successfully launch technologically
advanced new products such as the LEAP-X engine, which allows
airlines to operate their planes more cost effectively and
with lower emissions. The engine, which is produced by CFM
International (a 50/50 joint venture between GE and Snecma),
recently garnered more than $4 billion in commitments at the
Dubai Air Show. GE's technological advances also include its
latest innovation in gas turbine technology, the
FlexEfficiency 50 Combined Cycle Power Plant. The
FlexEfficiency 50, which applies jet engine technology to a
gas turbine, significantly reduces the amount of fuel needed
to create power. Other new products GE has recently
introduced include the Discovery IGS 730, a new mobile and
robotic interventional X-Ray.
Immelt added, "GE Capital, like our Industrial businesses, is
stronger and competitively positioned to win. GE Capital is
poised to grow double-digit in 2012, while continuing to
shrink its balance sheet and strengthen its capital and
liquidity positions. GE Capital volume grew to $49 billion,
up 13% from the third quarter and margins remained healthy at
5.4%. Tier One common ratios are now at 11.4% and 9.9%, and
remain a source of strength. As we have previously stated, we
expect to restart the dividend from GE Capital to GE this
year, subject to Federal Reserve review."
GE Capital's fourth-quarter earnings were $1.6 billion, up
58% from the prior year. GE Capital made significant strides
during the fourth-quarter in achieving its strategic
objectives of generating attractive returns, diversifying its
funding base and positioning the business for long-term
growth. In December, GE Capital announced that its
wholly-owned bank susidiary, GE Capital Financial, would
acquire MetLife's U.S. retail deposit business that consists
of approximately $7.5 billion in U.S. deposits and an
established online banking platform. This acquisition,
subject to regulatory approval, will accelerate GE Capital's
plans to launch a U.S. deposit platform, helps build a
stronger and more cost-efficient funding base and allows GE
Capital to better serve its middle-market commercial
customers. GE Capital's ENI, net of cash, was $445 billion at
quarter-end, almost one year ahead of previousy planned
reductions. By continuing to focus on high-return segments,
GE Capital targets further reducing ENI to a range of $425 -
$440 billion in 2012, while still growing earnings
double-digits.
At year-end, GE had $85 billion of cash and cash equivalents.
GE's strong cash position enabled the Company to repurchase
$5.4 billion of stock during the year, including $3.3 billion
for the preferred stock held by Berkshire Hathaway, and has
supported $7.1 billion in stock repurchases since the buyback
was restarted in 2010.
In addition, GE has taken a number of steps to increase
shareholder value over the past year. In December, GE's Board
of Directors raised the Company's quarterly dividend $0.02 to
$0.17 per outstanding share of the Company's common stock.
This increase represented the Company's fourth increase in
two years.
Immelt concluded, "We finish 2011 with momentum and are
positioned for a strong 2012. Our Industrial businesses are
positioned for growth. GE Capital is strong and profitable.
We have substantial cash available to improve shareholder
returns. The Company is positioned to perform for
investors."
Fourth-quarter and Full-year 2011 Financial Highlights:
Fourth-quarter Operating Earnings were $4.1 billion, up 6%
from $3.9 billion in the fourth-quarter of 2010 and Operating
EPS was $0.39, up 11% from the fourth quarter of last year.
GAAP earnings from continuing operations (attributable to GE)
were $3.9 billion, or $0.37 per share, up 1% and 3%
respectively from the prior year quarter.
Including the effects of discontinued operations,
fourth-quarter net earnings attributable to GE were $3.7
billion in 2011 ($0.35 per share attributable to common
shareowners), compared with $4.5 billion in the fourth
quarter of 2010 ($0.42 per share attributable to common
shareowners), down 18%. This decrease was driven by
discontinued operations which included $0.06 per share of
gains related to dispositions in 2010 and a ($0.02) per share
adjustment to reserves in 2011.
Positive items related to tax audit resolutions in the
quarter were offset by restructuring and other one-time
charges.
Fourth-quarter Revenues were $38.0 billion for the quarter,
up 4% excluding the impact of NBCU and down 8% compared to
revenues of $41.2 billion from the fourth quarter of 2010.
Industrial sales of $26.7 billion increased 11% excluding the
impact of NBCU and were down 7% compared to the fourth
quarter of 2010. GE Capital Services revenues of $11.6
billion were down 9% from the fourth quarter of 2010.
Full-year Operating Earnings were $14.8 billion, up 20% from
$12.3 billion in 2010, and Operating EPS excluding effects of
the preferred redemption was $1.37, up 22%. Including effects
of the preferred redemption, Operating EPS was $1.29, up 15%
from last year. GAAP earnings from continuing operations
(attributable to GE) were $14.1 billion, or $1.23 per share,
up 12% and 8% respectively from the prior year.
Including the effects of discontinued operations, full-year
net earnings attributable to GE were $14.2 billion in 2011
($1.23 per share attributable to common shareowners),
compared with $11.6 billion in 2010 ($1.06 per share
attributable to common shareowners), up 22%.
Full-year Revenues were $147.3 billion, up 7% excluding the
impact of NBCU, and were down 2% compared to revenues of
$149.6 billion from the prior year. Industrial sales of $95.0
billion increased 12% excluding the impact of NBCU and were
down 5% compared to 2010. GE Capital Services revenues of
$49.1 billion were down 2% from 2010.
Cash generated from GE Industrial operating activities was a
record $5.5 billion for the quarter and totaled $12.1 billion
for 2011.
The accompanying tables include information integral to
assessing the Company's financial position, operating
performance and cash flow.
. Related charts will be posted there prior to the call.
* * *
About GE
GE (NYSE: GE) works on things that matter. The best people
and the best technologies taking on the toughest challenges.
Finding solutions in energy, health and home, transportation
and finance. Building, powering, moving and curing the world.
Not just imagining. Doing. GE works. For more information,
visit the company's website at .
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 (Grey Zone); 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; our ability to convert
customer wins (which represent pre-order commitments) into
orders; 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.
GE Corporate, VP Investor Communications
+1 203 373 2424
trevor.a.schauenberg@ge.com
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