November 6, 2009

November 6, 2009
Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

David Abrameto • david.abrameto@bernstein.com • +1-212-823-3983
Laura Parke • laura.parke@bernstein.com • +1-212-823-3741
GE: "Valumagination" - Upgrading to Outperform on Reduced

Risk, Portfolio, Capital, and Infrastructure Upside; $19 Target
Rating Change / Target Price Change / Estimate Change in Bold
11/4/2009 YTD EPS P/E
Closing Target Rel.
Ticker Rating CUR Price Price Perf. 2008A 2009E 2010E 2008A 2009E 2010E Yield
GE O USD 14.19 19.00 -28.3% 1.78 1.01 0.97 8.0 14.0 14.6 2.8%
OLD M 18.00 1.00 1.04
SPX 1046.50 65.47 60.96 76.85 16.0 17.2 13.6 2.4%
O – Outperform, M – Market-Perform, U – Underperform, N – Not Rated
Highlights
We are upgrading GE to outperform. Why now? In our view, the risk/reward balance has improved enough
to warrant a more positive stance. We believe the risk GE Capital poses is reduced, 2010 earnings
achievability is high, and there is more upside across the company into 2011. We think the potential for
dilution is limited and despite the potential for higher capital requirements, believe that resolution of the
current regulatory discussions will remove on-going over hangs for the stock. In this note, we revisit the
risk/reward balance for GE in light of the Q3 10Q which was released this week, GE Capital developments
and our expectations for the impact of the global economic recovery. We also provide an update to both our
GE industrial and GECS earnings models.
We are upgrading our rating on GE to outperform and raising our target price to $19 for 6 reasons:
• 1) We believe 2010 Earnings of 97 cents is achievable with limited downside and unlikely to
experience significant downward revisions (excluding M&A). We are 5 cents above consensus in
2010 and 10 cents above consensus in 2011. The 97 cents in 2010 is made up of 82 cents from the
industrial businesses, down 4 cents from 2009 and 15 cents from GE Capital, down 1 cent from 2009.
Why do we think this is conservative?
− On the industrial side of the business, we take infrastructure equipment revenues (with ~8-9%
margins) down 10-15% and service revenues (with ~27% margins) up 5%, resulting in $77B of
revenue and $13.4B of segment profit in 2010 (down $2B and $400M respectively).
U.S. Multi-Industry
− GECS total assets decline 10% in 2010 and net charge offs increase to 2.95% of receivables in 2010
but fall to 2.47% in 2011, driving provisions, based partially on NTM losses, from 2.9% in 2009 to
2.7% in 2011. GECS ROE for 2010 is just 2.2% and ROA 0.2%. We also increase the tax rate from a
beneficial (negative) 6% in 2009 to a more normal 14% in 2010 and corporate expenses up to $3.6B
with pension up to $1.3B.
• 2) We forecast impairments of just $1.2B in 2010 and see reduced risk of large scale write-downs
and major equity dilution due to GE Capital. While we fully acknowledge GE Capital is going to be a
highly regulated NBFI, we see reduced risk in GE Capital's businesses emerging from current regulatory
discussions and the company's ability to manage through commercial real estate and other financial crises
over the next two years – this means while there are still going to be write downs, they will be contained.
GECS lower level of leverage also reduces the need for significant further equity injections.
See Disclosure Appendix of this publication for important disclosures and analyst certifications.
November 6, 2009
• 3) GE Capital earnings growth from $1.5B in 2010 to $3.7B in 2011. In concert with reduced risks,
we also see earnings tailwind in store for GE Capital based on "new normal" ROA (0.7% in 2011) that
are below historical levels but better than today. These come from a) $2B of provisions tailwind as net
charge offs peak in 2010; b) headcount and other cost reductions executed in 2008-10; c) lower cost of
funds due to government backed TLGP; and d) pricing improvement on new originations. Even with
these changes, we target relatively conservative ROE and ROA that don't hit "new" normal levels until
mid 2011.
• 4) An infrastructure rebound in 2011/12, fueled by an industrial recovery and increasing emerging
markets exposure, should drive 6-7% revenue and 8-10% earnings growth. We believe that focus is
continuing to shift to GE's "industrial" businesses. We expect to see steady earnings growth in the
industrial businesses, increasing from $8.8B in 2010 to $11.2B by 2012. Our industrial growth in EPS
from a trough of $0.82 in 2010 to $1.09 by 2012 is driven by 1) 6.7% revenue CAGR; 2) 130 bp of
segment margin expansion after corporate expenses (restructuring, pension); 3) stable industrials tax rate
in the 25% range and 4% fewer shares. This level of industrial profitability before tax pegs 2010 at
roughly levels a bit above 2004, 2011 levels are between 2006 and '07 and 2012 levels above the 2008
peak.
• 5) We see GE shedding businesses with some $25-30B of revenue over the next 2-3 years and the
portfolio changing for the better. Much of GE's intent with the portfolio is clear - to invest in core and
adjacent infrastructure businesses – the challenge is execution. But this becomes more practical in a
recovery as buyers and sellers close valuation gaps.
− What's out on the Industrial side? Most of Consumer & Industrial, Enterprise Solutions and even NBC
Universal – that is somewhere north of $28-30B in revenue and $3-4B of segment profit. What about
on the Capital side? Much of Consumer and selective pieces of the other businesses – or at least
reductions in originations.
− We think this means that much of the bet on GE is a bet on the company's ability to re-invest
proceeds in enterprises that add value for shareholders. We anticipate increasing dividends and
share repurchases of course. But acquisitions will be key. We think staying closer to what they do best
(scale, technology, service) will have a higher chance of success than some prior efforts. The track
record is clearly mixed – Enron wind was a great story. Interlogix and Edwards were not. And there
are many more examples. Going forward, we have more confidence in GE picking the right
core/adjacent strategic properties and integrating them successfully – we point to the recent bid for
Areva's Transmission and Distribution business, even if they don't win it.
• 6) More than 2:1 upside/downside valuation trade-off is compelling. Even with just a 15x multiple on
2011/12 earnings from the industrial businesses and 8x normalized earnings from GE Capital in the same
U.S. Multi-Industry
time-frame, we get to nearly $15 for GE's industrial businesses and $4 for GE Capital. For context, this
would place GE at roughly 50% of its peak historical market capitalization. Our current downside
scenario is still 30% off of 2011/12 EPS in a plausible scenario which would reduce valuation to $12-13
vs. our target price of $19. On current stock price of $14, this suggests more than 2:1 upside/downside.
Investment Conclusion
We are upgrading GE from market-perform to outperform and raising the target price from $18 to $19. In
our view, the risk/reward balance has improved enough (>2:1 upside/downside) to warrant upgrading the
stock from the current $14 range. We believe the risk GE Capital poses is reduced, the consensus 2010
earnings achievability is high and there is significantly more upside across the company into 2011. We
think the potential for dilution is limited and despite the potential for higher capital requirements, believe
that resolution of the current regulatory discussions will remove on-going over hangs for the stock. We do
2
November 6, 2009
anticipate the dilutive impact of de-consolidating NBCU in the next year or so and management's ability to
invest in accretive core acquisitions over a longer time period.
Details
We're upgrading GE for 6 reasons:

1) We believe 2010 Earnings of 97 cents is achievable with limited downside and unlikely to
experience significant downward revisions (excluding M&A).
We are 5 cents above consensus in 2010 and 10 cents above consensus in 2011. The 97 cents in 2010 is
made up of 82 cents from the industrial businesses, down 2 cents from 2009 and 15 cents from GE Capital,
down 1 cent from 2009 (Exhibit 3). Why do we think this is conservative?
− On the industrial side of the business, we take infrastructure equipment revenues (with ~8-9%
margins) down 10-15% and service revenues (with ~27% margins) up 5%, resulting in $77B of
revenue and $13.4B of segment profit in 2010 (down $2B and $400M respectively) (Exhibit 5).
− GECS total assets decline 10% in 2010 and net charge offs increase to 2.95% of receivables in 2010
but fall to 2.47% in 2011, driving provisions, based partially on NTM losses, from 2.9% in 2009 to
2.7% in 2011 (Exhibit 6). GECS ROE for 2010 is just 2.2% and ROA 0.2% (Exhibit 7). We also
increase the tax rate from a beneficial (negative) 6% in 2009 to a more normal 14% in 2010 and
corporate expenses up to $3.6B with pension up to $1.3B.
Exhibit 1 Exhibit 2
Revenue Estimates: SCB vs. Consensus EPS Estimates: SCB vs. Consensus
GE Revenue GE EPS
160 159.1 158.9 1.40 1.30

1.20
158 1.20
155.7 154.9 1.01 0.99
156 1.00 0.97 0.92
154 153.3 0.80

$B
152 151.2 0.60

150 0.40
148 0.20
146 0.00
2009E 2010E 2011E 2009E 2010E 2011E
U.S. Multi-Industry
SCB Consensus SCB Consensus
Source: Thomson One Analytics and Bernstein analysis Source: Thomson One Analytics and Bernstein analysis
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November 6, 2009
Exhibit 3
Annual EPS Forecast Breakout Between Industrial and GE Capital
EPS, Forecast, annual

2.50
2.00
1.22 0.73
1.50
$/share
0.98 0.77 0.62

0.84
0.35
1.00 0.16 0.15
1.09 1.20
0.50 0.88 0.98 1.01 0.95
0.79 0.86 0.82
-
2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
GE Industrial GE Capital
Source: Company reports and Bernstein estimates
Exhibit 4
GE Consolidated Revenue Forecast
GE Consolidated Revenue
200,000
182,515
180,000 172,488 172,184
165,747
155,721 159,133
160,000 151,568 151,167
140,000
120,000
100,000
80,000
60,000
U.S. Multi-Industry
40,000
20,000
-
2006 2007 2008 2009E 2010E 2011E 2012E 2013E
4
November 6, 2009
Exhibit 5
Although equipment volume declines will hurt equipment margins, product mix shift towards services should actually
improve margins in 2010E
Revenue and margin walk for Technology and Energy Infrastructure Segments, 2009E to 2010E
2010E equipment revenue and profit 2010E services revenue and profit 2010E total revenue and profit
$47B '09E equipment backlog $36B '09E services revenue $77B total equip & svcs revenue
-$8B 2/3 converts to revenue in '10E 5% 10E services revenue growth $13.4B Total equip & svcs profit
$31B '10E revenue from backlog $38B '10E services revenue 17.4% Total equip & svcs margin
+$8B '10E revenue from in-year orders
$39B '10E equipment revenue 27.0% '10E services margin (no change YoY)
9.0% '09E equipment margin $10.3B '10E services profit

-1.0% '10E margin degredation
8.0% '10E equipment margin
$3.1B '10E equipment profit
Source: Bernstein estimates
Exhibit 6
Provision rate and NTM NCO rate forecast
% of avg gross financing receivables
Provision rate vs NTM NCO rate

3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
98
99
00
01
02
03
04
05
06
07
08
E
09
10
11
12
13
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
NTM NCO rate Provision rate

U.S. Multi-Industry
5
November 6, 2009
Exhibit 7
GECS ROE and ROA
GECS ROE and ROA
3% 25%
2% 20%
2% 15%
ROA
ROE
1% 10%
1% 5%
0% 0%
2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
GECS ROA (left axis) GECS ROE (right axis)

U.S. Multi-Industry
6
November 6, 2009
Exhibit 8
Earnings walk, from segment profit to earnings for GE Industrial and GE Capital
$M per share
GE Industrial
2008 2009E 2010E 2011E 2012E 2012E
Aviation 3,684 3,993 3,939 4,374 4,746 0.46
Segment profit
Healthcare 2,851 2,273 2,360 2,540 2,772 0.27

Transportation 962 805 729 830 915 0.09
Enterprise Solutions & other 655 402 372 411 460 0.04
Energy Infrastructure 6,080 6,340 5,958 6,380 6,809 0.66
NBCU 3,131 2,437 2,734 3,119 3,417 0.33
Consumer & Industrial 365 363 446 564 650 0.06
Total Industrial segment profit 17,728 16,614 16,536 18,218 19,767 1.93
Industrial corp items & elims (1,833) (2,861) (2,871) (2,970) (2,752) (0.27)
Industrial interest expense (2,153) (1,438) (1,485) (1,523) (1,563) (0.15)
Industrial minority interest 410 29 255 330 384 0.04
Industrial EBT 14,152 12,344 12,435 14,055 15,836 1.54
Industrial tax expense (3,427) (2,893) (3,109) (3,514) (3,959) (0.39)
Industrial minority interest (410) (29) (255) (330) (384) (0.04)
Preferred dividends (75) (300) (300) (300) (300) (0.03)
Industrial earnings to common 10,240 9,122 8,771 9,911 11,193 1.09
$M per share
GE Capital
2008 2009E 2010E 2011E 2012E 2012E
Segment profit
CLL 1,805 706 543 1,142 2,059 0.20

Consumer 3,664 1,903 2,388 2,083 2,560 0.25
Real Estate 1,144 (1,490) (1,705) (441) 503 0.05
GECAS 1,194 950 792 1,007 1,305 0.13
Energy Financial Services 825 221 259 327 583 0.06
Total GECS segment profit 8,632 2,290 2,276 4,117 7,009 0.68
GECS corp items & elims (858) (648) (729) (430) (548) (0.05)
GECS earnings, cont ops 7,774 1,643 1,547 3,688 6,461 0.63
Consolidated GE earnings 18,014 10,765 10,319 13,599 17,654 1.72

Source: Company reports, Bernstein estimates
2) We forecast impairments of just $1.2B in 2010 and see reduced risk of large scale write-
downs and major equity dilution due to GE Capital.
While we fully acknowledge GE Capital is going to be a highly regulated NBFI, we see reduced risk in GE
U.S. Multi-Industry
Capital's businesses emerging from current regulatory discussions and the company's ability to manage
through commercial real estate and other financial crises over the next two years – this means while there
are still going to be write downs, they will be contained. GECS smaller scale and lower level of leverage
also reduces the need for significant further equity injections.
Increasing regulation whatever compromise legislation passes but we do not anticipate a forced split
As stated previously, we view the likelihood of a legislatively forced split extremely remote. The latest
points of difference in Washington across the House and Administration versus Senate versions of the
legislation appears to be centered on the role of a mega-regulator compared with existing regulators.
Although the Senate draft has not been released, we understand that it similarly calls for increased
regulation but does not intend to drive a forced split of financial companies from industrial companies.
The House/Administration's Discussion Draft of the "Financial Stability Improvement Act of 2009"(FSIA)
drives significantly more regulation and scrutiny for GE Capital (assuming it is marked a systemically risky
7
November 6, 2009
financial institution) but stops short of forcing any kind of separation or regulation of the industrial parent
company. As far as additional equity requirements, the Act lays out guidelines, but the ultimate capital
requirement decisions will rest with the regulatory authorities under the new regime.
GE Capital is likely to be identified as a "financial company for heightened prudential standards for
financial stability purposes." Although the document dispenses with language regarding "tier 1" financial
institutions that we had heard in prior versions, including the mid-summer, Bank Holding Company
Modernization Act, it sets out criteria for companies that are affected by this legislation.
• The Financial Services Oversight Council would subject financial companies where "material financial
distress could pose a threat to financial stability or the economy"
• The criteria include 1) the amount/nature of company's financial assets; 2) liabilities / reliance on short
term funding; 3) extent and nature of off balance sheet exposures; 4) transactions/relationships with other
financial companies; 5) importance as source of credit for households, businesses, governments, liquidity
for the financial system; 6) nature/scope/mix of company's activities and 7) "any other factors that the
Council deems appropriate." GE Capital meets most of these but certainly 1, 2, and 5.
Under this draft of the FSIA, GE Capital will be the regulated company and not GE the parent
company. Pages 105 – 114 lay out "Section 6" Special Purpose (Intermediate) Holding Companies that we
believe would define the holding structure similar to GE Capital Services. There is no implied or explicit
mention of forcing a separation between financial holding companies and industrial parents. In fact, the
FSIA defines within Section 6 the "Limitations on Authority of Commercial Parent" that appears to clearly
distinguish between regulation of the financial holding company and the commercial parent.
• (The commercial parent) "shall (A) not be deemed to be, or treated as, a bank holding company, solely
because of its ownership or control of a section six holding company; and, (B) not be subject to this Act,
except for such provisions as are explicitly made applicable in this section."
• The FSIA also requires "independence of a Section 6 Holding Company" where "no less than 25% of the
members of the board of directors…shall be independent of the parent company."
• In addition, the FSIA appears partially to grandfather companies that were unitary savings and loan
holding companies prior to May 1999 (pages 98-101) but subject to significant regulatory discretion with
regard to loss of that exemption
GE Capital's current regulator, The Office of Thrift Supervision, will be "Abolished" in the Act and
replaced by other regulators, including the Office of the Comptroller of the Currency within the Department
of the Treasury for Federal savings associations, the FDIC for State savings associations, and the Fed for
banks and financial holding companies. Although GE has its savings and loan subsidiaries, we suspect
U.S. Multi-Industry
the Fed will play the primary regulatory role in the legislation as it stands. This topic of who has power over
what is likely to be one that changes significantly before final legislation.
The FSIA requires the Fed to heighten standards for financial holding companies with regard to 1) risk
based capital requirements; 2) leverage limits; 3) liquidity requirements; 4) concentration requirements; 5)
prompt corrective action requirements; 6) resolution plan requirements and 7) overall risk management
requirements. In addition, the Fed is free to impose any other standards they deem advisable to mitigate
systemic risk. Section 1107 also provides for the "regulation of identified activities for financial stability
purposes" which provides significant discretion to regulators. There is also a provision for "restricting
transactions with affiliates" which could impact GECAS, EFS and the other verticals from financing GE
equipment but we understand that is not the intention (imagine CAT finance not being able to finance CAT
equipment – very unlikely!) and to the extent that the language persists, exceptions will be added.
8
November 6, 2009
Specific quantified capital requirements are still to come, if at all, in the legislation. The Fed is given
wide latitude to "specify for each relevant capital measure the levels at which an identified financial holding
company is well capitalized, undercapitalized, and significantly undercapitalized." The draft legislation
does describe the ratio of tangible equity to total assets at which a company is "critically undercapitalized"
as TCE "not less than 2% of total assets" (GE is roughly 6% as of 3Q09) but the other limits and measures
are not yet defined (pages 26-27).
• The FSIA goes into detail about what happens to companies who fall below these thresholds, including
capital restoration plans, restricted asset growth, capital distributions, acquisitions, compensation etc. It
would seem that as long as regulators are satisfied with GECS' minimum capital then they could
distribute dividends to GE.
• This is the next big regulatory question in our view for GE Capital – how will GE Capital's new
regulators view their minimum capital requirements – and it is entirely possible that this will not be
disclosed, if at all, until after the bill passes into law and agencies execute their review process.
There is a minimum 3 year transition period in the FSIA with regard to implementing concentration
limits on credit exposures set by the Fed. The Fed also can extend the transition period by 2 additional years
"to promote financial stability."
Although it is early stages in the legislative process, the FSIA in its 1st draft removes some uncertainty
about the future for GE Capital. While we do not yet know what the minimum capital requirements and
leverage limits are going to be, it is clear that GE and GE Capital can co-exist with the Section Six holding
company structure. It is also clear that GE Capital is going to be regulated very closely by new regulators
under much heightened standards, whatever compromise legislation passes. This may slow down the "new
normal" growth but on balance, we anticipate this will be positive for the long term health of GE Capital –
it will create more transparency and perhaps reduce uncertainty with regard to large scale risks in the
business.
Smaller Scale, Smaller Risk
GE Capital has been actively shrinking its balance sheet in response to the global credit crisis and recession
since 3Q08, after gross financing receivables reached a peak of $428B in 2Q08. Since then, the company
has pledged to run a smaller and safer business that will ultimately constitute 1/3rd of GE's earnings power.
So far, they seem to be on that path, with receivables falling 17% since 2Q08 to $356B. We estimate
receivables to will continue to fall at an 8% CAGR until they reach about $260B, a level we believe the
company is roughly targeting. See Exhibit 9 for a receivables forecast.
U.S. Multi-Industry
9
November 6, 2009
Exhibit 9
Financing receivables, forecast
450
383 CAGR: -8.2%
400 360 363
333
350 312 301
290
300 271 272 258
250 229
$B
191
200 163
131 143
150 116
100
50
-
98
99
00
01
02
03
04
05
06
07
08
E
09
10
11
12
13
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Similarly, debt outstanding is also expected to fall over the next few years. Following the commercial paper
market crisis in late 2008, GE Capital has aggressively reduced its reliance on the short-term issuance,
down from 16% of total borrowings in 3Q08 to 10% in 3Q09. Given management's target of about $50B in
CP outstanding going forward, we believe their reliance on CP has reached a equilibrium by now. We
expect total debt to decline at a 9% CAGR over the next few years, after 2009's debt issuance binge on
FDIC-guaranteed debt. See Exhibit 10 for a debt outstanding forecast.
The smaller scale of GE Capital will enhance the safety of the business by making it smaller relative to GE
the parent, an important point given that the parent company implicitly acts as an equity backstop for the
company through its income maintenance agreement. The parent will be more capable of supporting GE
Capital through credit cycles when the size of the company shrinks.
Exhibit 10
GECS debt, forecast
600
500 CAGR: -8.8%
400
U.S. Multi-Industry
$B
300 366 421 449

303 428
273 374
200 255 326 307
150 207
107 117
94
100 78
79 92 96 106 101 82 82 86 91 97 86 61 49 47 47 46
-
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Commercial Paper (avg) Other Debt (avg)
GE Capital is also de-levering itself after a three year period of increasing leverage. GECS' TCE/TA ratio
fell to 3.8% in 2008 from a recent high of 5.2% in 2006. This smaller equity buffer was a significant
10
November 6, 2009
concern for investors and us in evaluating the company's ability to weather the crisis. Today, GECS has a
6.2% TCE/TA, a significantly stronger capital buffer. The company is actively de-leveraging itself by
hoarding cash collections (instead of re-deploying it) and halting dividend payments to the parent company.
We expect the slower originations will continue for some time as the company shrinks portfolio
(particularly Consumer), but we anticipate a return to dividend payments as the company again becomes
profitable, as early as mid-2010. We forecast GECS to have equity buffers in excess of previous highs (see
Exhibit 11 and Exhibit 12 for forecasts of equity buffer ratios).
Exhibit 11
GECS TCE/TA forecast
8% 7.2% 7.4%
6.9%
7% 6.5%
6.2%
6% 5.2% 5.2%
5% 4.3% 4.5%
3.9% 3.8%
4%
3.0%
3% 2.1% 2.3% 2.4%
1.7%
2%
1%
0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Exhibit 12
GECS (TCE + LLR) / Receivables forecast
16% 14.3% 14.6%

13.2% 13.4% 13.6%
14%
12% 10.5% 10.7% 10.7%

9.5% 9.7%
10% 8.2% 8.2% 8.2% 7.8%
7.5%
8% 6.8%
U.S. Multi-Industry
6%
4%
2%
0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Commercial Real Estate Risk
For the CRE equity portfolio ($33.4B in assets), we expect revenue to assets to stay depressed over the next
2-3 years (see Exhibit 13). A lack of profitable exit opportunities in the wake of the real estate bubble crash
11
November 6, 2009
means this business will not have the profit-making potential it once did in the near to medium term. The
business has unrealized losses of $5B as of 2Q09, and the company plans to mitigate these losses over time
through depreciation of its assets of about $1B per year. In addition, asset impairment charges $500M to
$1B per year are also reasonable to expect from this business over the next few years. Many investors have
suggested that GE's equity CRE portfolio has a market value well under the book value of $33.4B. This
may well be true, and if GE had to sell its portfolio immediately, the realized losses could be on the order of
$10B or more. But, in reality, this is a very unlikely scenario for several reasons: 1) GE has stated several
times its intent to hold its properties until a gain can be realized, 2) depreciation of $1B per year and
impairments of $500M per year will over time slowly realize the losses that are embedded in the assets, a
preferable way to realize losses from GE's perspective, and 3) accounting rules demand that GE assign book
values for its portfolio based on expected cash flow analysis, not market values, which are based on
occupancy and rental rates. The accounting treatment of the properties is key to the slow rate of
impairments for the portfolio, because many of the tenants GE keeps are on long contracts, and therefore
vacancies only form over time. It is the new vacancies and lower market rents that reduce the cash flow
valuations of the properties and since these are arising slowly (as opposed to all at once), the impairments
are realized slowly as well. Hence, risk of a large one-time marking to market of the portfolio is essentially
a non-issue.
Exhibit 13
We expect the CRE equity portfolio to generate much lower revenue/assets over the next 2-3 years
CRE Equity Book revenue/assets
14% 12.2%
11.7% 11.5% 11.5%
12%
10.0%
Revenue/assets
9.6%
10% 8.4%
8% 6.2%
6% 4.7% 5.0%
4%
2%
0%
2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
As of the 3rd quarter, GECS assets are broken down in the following exhibit.
U.S. Multi-Industry
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November 6, 2009
Exhibit 14
GECS Balance Sheet Asset Breakdown
As of 3Q'09
Cash 56.9 Financing receivables, gross 348.5 PP&E 58.7
CLL 147.5 GECS land, buildings, etc** 4.1
Investments 52.7 Americas 92.3 Leased aircraft** 29.6
U.S. Corporate 23.4 Europe 40.4 Leased vehicles** 16.6
State and muni 2.1 Asia 14.1 Leased rolling stock** 2.7
RMBS 3.4 Other 0.8 Leased other** 5.7
CMBS 2.5 Consumer 136.4
Other ABS 2.7 Non-US resi mortgages 61.3 Other assets 87.9
Foreign corp 1.7 Non-US install & revolve 25.2 Real Estate equity investments 32.9
Foreign govies 3.4 US install & revolve 22.3 Associated companies** 19.2
U.S. govies 3.6 Non-US auto 14.4 Other investments** 13.4
Retained interests 8.4 Other 13.2 Derivative instruments** 12.4
Equity securities 0.8 Real Estate 45.5 Other assets** 10.0
Energy Financial Services 8.3
Goodwill 28.2 GECAS 15.0 Assets held for sale 1.2
CLL 13.6 Other (securitized) 3.1 Assets of discontinued ops 1.5
Consumer 11.1 Allowance for losses (7.4)
Real Estate 1.2 Total assets 658.3
Energy Financial Services 2.1 Other receivables 18.6
GECAS 0.2
Other intangibles, net 3.8
** Estimated
3) GE Capital earnings growth from $1.5B in 2010 to $3.7B in 2011.
In concert with reduced risks, we also see earnings tailwind in store for GE Capital based on "new normal"
ROA (0.7% in 2011) that are below historical levels but better than today. These come from a) >$2B of
provisions tailwind as net charge offs peak in 2010; b) headcount and other cost reductions executed in
2008-10; c) lower cost of funds due to government backed TLGP; and d) pricing improvement on new
originations. Even with these changes, we target relatively conservative ROE and ROA that don't hit "new"
normal levels until mid 2011.
Our forecast for GE Capital model includes $0.20 of EPS tailwind in 2011 (see Exhibit 15). We expect
2010 to be essentially flat versus 2009, with $0.15 of EPS, and 2011 to be the earnings jump to $0.35.
U.S. Multi-Industry
13
November 6, 2009
Exhibit 15
We forecast $0.37 of EPS tailwind from GE Capital earnings in 2011
GE Capital EPS, annual forecast

1.40
1.22
1.20
0.98
1.00
0.84
0.77 0.78 0.77 0.73
$/share
0.80
0.62
0.52 0.56
0.60 0.46
0.44
0.38 0.35
0.40 0.32
0.16 0.15
0.20
-
97
98
99
00
01
02
03
04
05
06
07
08
E
09
10
11
12
13
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
We have confidence in our earnings forecast for GE Capital largely due to conservative assumptions around
ROE and ROA for the company going forward. From 1997 through 2008, GE Capital had averaged a 19%
ROE. In 2009 we expect a 3% ROE and we see it falling to 2% in 2010. In 2011, we forecast ROE rising to
5%, not reaching its "normal" potential of about 10-11% until 2013, due to lingering losses we expect to
plague commercial real estate (CRE) through 2010 in the form of reserve building-related expenses as well
as slower than typical reserve release due to anticipated regulatory scrutiny. The primary reason why the
new normal ROE is nearly half of the old is twofold: 1) lower leverage – we forecast a net debt/equity ratio
of 5.0x by 2012, down from a 7.9x average from 1997-2008 and the recent peak of 9.0x in 2008, and 2)
lower profitability due to more regulation, stricter and less flexible lending rules, lingering losses through
asset impairments (mainly CRE), exists from previously very profitable consumer lending, and potentially
higher tax rates. Our ROE forecast for GE Capital is shown in Exhibit 16. Leverage ratio (TCE/TA and Net
debt/equity) forecasts are shown in Exhibit 17 and Exhibit 18.
U.S. Multi-Industry
14
November 6, 2009
Exhibit 16
Our ROE forecast well below historical average levels
GECS: ROE, annual

30%
25% 24%
22% 22% 22%
21%
19% 19% 19% 1997-2008 avg: 19.1%
20%
16% 17%
14% 14%
15%
11%
9%
10%
5%
5% 3% 2%
0%
97
98
99
00
01
02
03
04
05
06
07
08
E
09
10
11
12
13
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Exhibit 17 Exhibit 18
GE Capital's equity buffer is expected to get stronger… … as it lowers leverage below historic levels
TCE/TA Net debt / equity

8.0% 7.4% 10
7.2%
6.9% 9.0
7.0% 6.5% 9 8.5
6.2%
7.6
6.0% 8
5.2%5.2%
6.8 7.0
5.0% 4.5% 7 6.5
4.3% 6.1
3.9% 3.8% 5.8
4.0% 6 5.3
5.0 5.1
3.0% 5
U.S. Multi-Industry
2.0% 4
03
04
05
06
07
20 8
03
04
05
06
07
20 8
20 E
20 E
20 E
20 E
E
20 E
20 E
20 E
20 E
E
0
0
09
10
11
12
13
09
10
11
12
13
20
20
20
20
20
20
20
20
20
20
20
20
Source: Company reports, Bernstein estimates Source: Company reports, Bernstein estimates
On an ROA basis, our forecast is more in-line with history. We believe that GE Capital should be able to
earn close to the historic average ROA of 1.4% in the years post 2012. Management said that new
originations were made at 3.3% ROI in 3Q09, citing an attractive underwriting environment. Should the
attractive pricing environment continue, there is potential for even higher ROA as the loan book rolls over
approximately the next three years. Our ROA forecasts are shown in Exhibit 19 and Exhibit 20.
15
November 6, 2009
Exhibit 19
Our return on segment assets forecast is consistent with the historical average
GECS: Return on segment assets, annual

2.5% 2.3% 2.3%
2.1% 1997-2008 avg: 1.64%
2.0%
2.0% 1.8% 1.8%
1.5% 1.4% 1.5%
1.5% 1.4% 1.4% 1.3%
1.3%
1.0%
1.0% 0.8%
0.5% 0.3% 0.3%
0.0%
97
98
99
00
01
02
03
04
05
06
07
08
E
09
10
11
12
13
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Exhibit 20
Our total ROA forecast is consistent with the historical average
GECS: Total ROA, annual

2.5%
2.0% 1997-2008 avg: 1.45%
2.0% 1.8%
1.5% 1.5% 1.5%

1.5% 1.4% 1.4%
1.5% 1.4% 1.4%
1.3% 1.3%
1.2%
1.0%
1.0%
0.7%
0.5% 0.2% 0.2%
0.0%
U.S. Multi-Industry
97
98
99
00
01
02
03
04
05
06
07
08
E
09
10
11
12
13
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
The large jump in GE Capital earnings we forecast for 2011 is largely due to tailwinds from lower provision
expense. We forecast provision expense to peak at $10.6B in 2009 (2.9% of receivables), then fall to $8.9B
in 2010 (2.7% of receivables), and then fall in 2011 to $6.8B (2.3% of receivables). See Exhibit 21 for our
provision expense forecast. We model provision expense to be anticipatory of net charge-offs (NCOs) by
about one year, hence we model provisions peaking in 2009 while NCOs peak in 2010. However, we
anticipate greater regulatory scrutiny of reserve release practices and hence keep reserve rates higher than
NTM NCOs would imply alone. See Exhibit 23 for a comparison of provision and NCOs forecast.
16
November 6, 2009
Exhibit 21
We believe provision expense will peak in 2009
Provisions expense
12
10.6
10 8.9
8 7.5
6.8
$B
6
4.4
3.8 3.9 3.6
4 3.1 3.2 3.1
2.5 2.8
1.7 2.0
1.4 1.6
2
-
97
98
99
00
01
02
03
04
05
06
07
08
E
09
10
11
12
13
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Exhibit 22
We model GECS' reserve rate to gradually decline from 2009 highs
LLR as % of receivables
2.5%
2.1%
2.0%
2.0% 1.8%
1.7% 1.7% 1.7% 1.7% 1.6% 1.6% 1.6%
1.6% 1.6%
1.5% 1.4% 1.4%
1.5%
1.2% 1.1%
1.0%
0.5%
0.0%
97
98
99
00
01
02
03
04
05
06
07
08
E
09
10
11
12
13
19
19
19
20
20
20
20
20
20
20
20
20
U.S. Multi-Industry
20
20
20
20
20
Note: Pre-2005 LLR reserves are adjusted to reflect change in write-off policy for Consumer Finance in 2004
17
November 6, 2009
Exhibit 23
We forecast provisions peaking ahead of NCOs, but remaining well ahead of NCOs through 2011
Provisions expense vs Next 12m net charge-offs

12
10.6
9.8
10 8.9
7.5 7.6 7.4
8 6.8
5.4
$B
6
4.4
3.7 3.8 3.6
4 3.1 2.7 2.8 2.7
-
2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Provisions NTM Net charge-offs
The long-term average NCO rate for GE Capital is 1.3%, and we model the company reaching that level
again by 2013, at 1.1%. This is not due to a more optimistic view of credit losses down the road, but rather
it is primarily due to the mix shift we anticipate for GE Capital, as the company shrinks its high loss-rate
Consumer loan book faster than other parts of the business. See Exhibit 24 for a comparison of provision
rate and NCO rate forecasts.
Exhibit 24
Provision and NCO rates track closely over time, with provisions leading by about 1 year
% of avg gross financing receivables
Provision rate vs NTM NCO rate

3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
U.S. Multi-Industry
0.5%
0.0%
98
99
00
01
02
03
04
05
06
07
08
E
09
10
11
12
13
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
NTM NCO rate Provision rate
For the Commercial Lending and Leasing (CLL) segment at GE Capital, we forecast peak NCOs of 1.85%
in 2010, up from 0.70% in 2008 and 0.95% in 2009. Consistent with history and CLL's lending and
portfolio strategy, we expect CLL losses to fall well below the U.S. bank average for Commercial and
Industrial (C&I) loans, which our Banks team forecasts will reach peak NCOs of 3.81% in 2010. This is
due to CLL's relatively high exposure to senior secured tranches, willingness to pursue work-outs in favor
18
November 6, 2009
of distressed selling, and focus on higher quality credit. 99.9% of GE Capital's CLL portfolio consists of
senior secured positions, compared with ~60% in the global commercial lending market. See Exhibit 25 for
a comparison of CLL and C&I loss forecasts.
Exhibit 25
We expect CLL NCOs to peak in 2010 but at a much lower level than our Bank team forecasts for U.S. C&I loans
4.5%
Last updated by Bernstein Bank Team, 9/11/09
4.0%
3.5%
GE CLL is 99.9% senior secured, vs. ~60%
3.0%
for the global commercial lending market
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E
GE CLL Bank C&I
Source: Company reports, FDIC, Bernstein Bank Team, Bernstein estimates
For GE's Commercial Real Estate debt (CRE) segment, we forecast peak NCOs of 2.57% in 2011, up from
0.03% in 2008, 0.72% in 2009, and 2.06% in 2010. NCOs for CRE (and the industry as a whole) are
coming off of historic and unsustainable lows enabled by real estate pricing bubbles around the world.
Historically, GE CRE has had significantly lower nonperforming loans, delinquencies and NCOs than the
U.S. bank CRE in general. This was due to GE's smaller relative exposure to riskier properties such as
resorts, single family residential developments, construction projects, high yield, malls, and 2nd mortgages.
Construction and development loans make up just 1.5% of GE CRE's portfolio, vs. 32% for U.S. banks.
That said, we have some concerns about recent trends in nonearning assets, with nonearnings as a % of
receivables rising from 1.2% in 1Q09 to 2.9% in 3Q09. We model GE CRE NCOs to follow a similar path
as the U.S. banks CRE loss forecast from the Bernstein Banks team, with slightly lower loss rates. See
Exhibit 26.
U.S. Multi-Industry
19
November 6, 2009
Exhibit 26
We expect GE CRE NCOs to peak in 2011 at a slightly lower level than our Bank team forecasts for U.S. CRE loans
3.5%
Last updated by Bernstein Bank Team, 9/11/09
3.0%
2.5%
GE CRE has 1.5% exposure to construction
2.0% and development, vs. 32% for U.S. banks
1.5%
1.0%
0.5%
0.0%
2005 2006 2007 2008 2009E 2010E 2011E 2012E
GE CRE Bank CRE
For GE's Consumer U.S. Installment & Revolving sub-segment, which largely consists of U.S. private-label
credit card debt and personal loans, we forecast peak NCOs of 13.0% in 2010, up from 6.8% in 2008 and
10.9% in 2009. We expect NCOs to track slightly higher than the U.S. bank average for credit card loans
due to the potential for distressed consumers to be more likely to default on their private-label store cards
rather than their general purpose cards. See Exhibit 27 for a comparison of GE's NCOs with the Bernstein
U.S. Bank team's forecast for credit card losses.
Exhibit 27
We expect GE U.S. installment & revolving NCOs to peak in 2010, but at a slightly higher level than our Bank team
forecasts for U.S. credit card loans
14.0%
12.0%
10.0%
8.0%
6.0%
Last updated by Bernstein
4.0%
Bank Team, 9/11/09
U.S. Multi-Industry
2.0%
0.0%
2005 2006 2007 2008 2009E 2010E 2011E 2012E
GE U.S. install & revolve Bank Credit Card
20
November 6, 2009
Exhibit 28
The gap between the nonearning receivables rate and total NCO rates widened in 3Q09
NCO rate and Nonearning receivables rate (% of receivables)
4.5% 3.88%
4.0% 3.58%
3.5% 2.79%
3.0%
2.12%
2.5% 1.80%
2.0% 1.41% 1.37% 1.42% 1.47% 1.53%
2.42%
1.5% 2.11% 2.13%
1.0% 1.68% 1.76%
0.5% 1.13% 1.10% 1.25% 1.08% 1.14%
1.02%
0.0%
2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09E
Nonearning receivables rate Total NCO rate
In terms of other expense control efforts, GE Capital has been fairly successful in lowering their operating
and administrative costs as total revenue has fallen over the last 2 years. Operating and admin expense has
fallen by ~30% since mid-2008 and has stayed at about 26% of sales consistently over time, except for an
increase to 29% in 3Q09. We forecast GE continuing to maintain the mid-20% cost to sales ratio going
forward. We forecast operating and admin expense of $13.1B in 2012, or 26.7% of sales, which compares
with $18.8B in 2008, or 26.3% of sales. See Exhibit 29 for a recent history of operating and admin
expense.
Exhibit 29
GE Capital has reduced its operating and admin expense by ~30% since mid-2008, keeping pace with revenue
declines
Operating & admin expense has come down with revenue

7 35%
28% 28% 29%

Operating & admin exp (% rev)
6 27% 30%
U.S. Multi-Industry
Operating & admin exp ($B)
26% 26% 26% 26% 26% 26% 26%
5 23% 25%
4 20%
3 15%
4.5 4.8 4.7 4.7 4.9 4.7
4.5 4.5
2 3.9 3.7 10%
3.5 3.4
1 5%
- 0%
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09E
21
November 6, 2009
Other notes on GE Capital: In 3Q09, GE amended its income maintenance agreement with GE Capital to
strengthen the bond between the parent and subsidiary by extending the notice period for termination from
three to five years and requiring any future potentially adverse (for GE Capital) amendments to require the
consent of GE Capital debt holders. The income maintenance agreement calls for GE the parent to make
good on any shortfall GE Capital should have regarding maintaining a 1.1 to 1 ratio of earnings to fixed
charges. Roughly, the ratio consists of: (GE Capital pre-tax earnings + interest expense) / interest expense.
We estimate the fixed charge ratio will be 0.9 to 1 in 2009, falling short of the minimum by about $3.6B.
GE the parent made a $9.5B capital contribution in to GECS in 1Q09, which more than covers the $3.6B
estimated short-fall for the year. In 2010, we estimate the fixed charge ratio will be 1.03 to 1, falling short
of the minimum by about $1.1B. We model GE the parent making another capital contribution to GECS of
$1.3B in 1Q11 to cover this estimated short-fall. The company guided to capital contributions ranging from
$2B in the "fed base case" to $7B in the "fed adverse case" back in July 2009.
In 1Q10, GE Capital will have about $37B in off-balance sheet assets brought back onto the books. We
estimate that the hit to retained earnings will be approximately $2B in the quarter, which we include in our
model.
4) An infrastructure rebound in 2011/12, fueled by an industrial recovery and increasing

emerging markets exposure, should drive 6-7% revenue and 8-10% earnings growth.
Before diving into some of the key industrial segments, recall that no business segment accounts for more
than 14% of GE's revenues (Exhibit 30). Of course, within each of these reporting segments, there are
numerous, very different P&Ls serving very different buyers with different technologies, economics and
competitive dynamics.
GE serves end markets across many different industries, including energy, finance, health care, media and
entertainment, construction, and industrial manufacturing (Exhibit 31). Of these end markets, energy and
process and commercial and consumer lending contribute the most revenue. It is important to note that each
these buckets cover many underlying end markets; for instance, "Energy & Process" spans oil and gas,
power, utilities, refining, and other process industries.
U.S. Multi-Industry
22
November 6, 2009
No business segment accounts for more than 14% of GE sells into our most highly diversified set of end
GE's revenues markets
GE Business Segments GE End Markets Other

Industrial (Transport
Energy FS
2% Transport Enterprise Mfg Water)
GECAS Corp 3% Solutions 5%
3% 5%
3%Real 3%
Estate Other
Healthcare Tech
Constr & Energy &
4% 10%
Infra
25% RE Process
7% 22%
Aviation
Money 11%
13%
Civil
Aviation Coml
9% Lending
CLL 15%
Govt & Media
14% Energy Consum
Military 9%
15% Health Lending
Capital Aero
C&I care 14%
Finance Energy 4%
6% NBCU 10%
38% Infra
9% 18%
2008 Revenue = $183B
Oil & Gas
2008 Revenue = $183B 5%
Source: Company reports and Bernstein analysis Source: Company reports and Bernstein analysis
While management is shrinking the business (Exhibit 32), capital still represents at least one-third of the
business in 2009. Exhibit 33 breaks out the first-level reporting segments within GE's "industrial"
businesses. The infrastructure businesses are the largest contributors, particularly Tech.
U.S. Multi-Industry
23
November 6, 2009
We expect Capital to contribute about 32% of overall GE The infrastructure businesses will deliver most of the
sales and 15% of profit in 2009 sales, growth and profitability outside of capital
GE Industrial vs. Capital Mix GE Industrial Segment Mix

140% 0% 2% 4%
100%
120% 10% 9%
15% 21% 18%
1% 4%
100% 15% 26%
80%
Percentage of Total
80% 32%
40%
35% 34%
60% 34% 26%
60%
108%
40%
67% 40%
20%
41% 44% 46% 45% 46%
0% 20%
-23%
-20%
0%
-40% Sales Growth Profit Assets Capex
Sales ('09) Profit ('09) ('08) ('04-'08) ('08) ('08) ('08)
Technology Infrastructure Energy Infrastructure
GE Industrial GE Capital Corporate
NBCU Consumer & Industrial
Source: Company reports and Bernstein analysis Source: Company reports and Bernstein analysis
We believe that focus is continuing to shift to GE's "industrial" businesses, in light of reduced uncertainty at
other financial institutions, other industrials' earnings beats (despite top line and order weakness) and the
discussion of more positive leading economic indicators. We expect to see solid earnings growth in the
industrial businesses, increasing from $8.8B in 2010 to $11.2B by 2012 (see Exhibit 34).
Exhibit 34
We forecast GE's Industrial businesses to return to 2008 earnings by 2012
GE Industrial earnings from continuing ops, forecast

14 12.0
11.2
12 10.0 10.2 9.9
10 9.1 9.1 8.8
8.4
U.S. Multi-Industry
8
$B
6
4
2
-
2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Source: Company filings, Bernstein analysis and estimates
How do we expect to get to these earnings figures? Our industrial growth in EPS from $0.82 in 2010 to
$1.09 by 2012 is driven by 1) 6.7% revenue CAGR; 2) 130 bp of segment margin expansion after corporate
expenses (restructuring, pension); and 3) stable industrials tax rate in the 25% range.
Despite the severe recession, secular end-market growth trends will provide substantial tailwind to GE's
businesses over coming years. This ranges from longer term urbanization, emerging market growth and
24
November 6, 2009
energy demand to increasing energy and environmental regulation, aging populations and the proliferation
of media content and distribution (Exhibit 35).
Exhibit 35
GE has bought into long term secular growth trends across its portfolio with near term pressures.
Aviation & GECAS Transportation Enterprise Solutions
Emerging market growth / natl airlines/OEMs Emerging market growth Emerging mkts, urbanization
Big OEM backlog (& urbanization/infrastructure) (global trade secular trend) (non-res construction cycles)
Pass growth, flight hours pressured Aging fleets Regulation & codes
Parking aging fleets; capacity reduction Fuel costs, emissions focus Global safety & security concerns
Airline bankruptcies, fuel costs & flight efficiency Productivity, reliability Energy demand, efficiency, green
Aircraft intelligence, systems/solutions, noise Rail intelligence Productivity
Entering late part of cycle (new platforms) Truck headwinds (fuel, congest, labor)
Defense budget pressures/growth (next gen)
Aftermarket outsourcing; Financing challenges
Energy & Water, O&G, Energy Finl Svcs Healthcare NBCU
Energy demand & emerging market growth Aging population Content, distribution proliferation
Environmental impact Emerging market growth Broadcast decline, cable growth

(emissions, carbon taxes, fuel efficiency) (& rising incomes / quality of life) (DVRs, on demand etc.)
Long term nuclear renaissance Prevalence of disease Film extension beyond box office
Renewable targets & investments Increasing cost of healthcare Theme park licensing
(wind, solar, biomass) (pricing transparency, quality of care)
Water scarcity Regulation (efficacy / efficiency) Intl / Digital / channel growth
Aging infrastructure (gen, transmission, dist) Reimbursement pressures Targeted advertising
O&G harder to find, refine leading to more drilling, Non-invasive technologies, Cost/productivity
more pipelines, more refineries and tech intensive information sharing, preventatives
Financing volatility
Consumer & Industrial Commercial Fin / Real Estate GE Money
Deep and broad housing downturn Credit crunch & capital mkt volatility
Industrial investment cycling down Lack of asset liquidity
Cost / energy efficiency focus Increasing spreads
Shift to LED lighting Industry consolidation
Globalization - sourcing, localization and Increasing regulation
emerging market / infrastructure growth Global construction cycle down Deep and broad housing downturn
Industry consolidation Industrials also reducing investment (and auto / card pressures)
U.S. Multi-Industry
Source: Company and industry reports, Bernstein research
Infrastructure Related Revenue Growth
In general, we expect Technology and Energy Infrastructure revenues and segment profits will bottom in
2010 before rebounding strongly in 2011 and 2012. We think Aviation, Healthcare and Energy matter the
most on the rebound and like GE's presence in emerging markets such as China and India.
One indicator of how revenue will fare are trends in orders. Total Infrastructure orders were reported down
15% in 3Q09 (vs. down 25% in 2Q09) and down 17% YTD. Equipment orders declined a steep 32%,
although the decline was slightly less bad than the 42% drop in 2Q09. In addition, service orders, which
drive most of the company's earnings, continued to increase in all 3 quarters (with 3% growth in 3Q09).
The increase in the CSA backlog drove a total backlog increase of $4B to $174B in 3Q09. Management's
25
November 6, 2009
disclosure that equipment backlog converts to revenue over longer time periods (usually 2/3 over next year)
and current order level trends suggest equipment declines of 10-15%. See Exhibit 36 and Exhibit 37 for
more detail on historic equipment and services order rates for GE.
Exhibit 36
Equipment orders plummeted in recent quarters but improved slightly in 3Q09
Total GE Equipment Orders Growth

80% 67%
54%
60%
35% 39%
40% 33% 33%
16% 11%
20% 4% 5%
0%
-2%
-20% -11%
-21%
-40% -32%
-42%
-60%
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Source: Company filings, Bernstein estimates
Exhibit 37
Services orders are relatively low but still positive
Total GE Services Orders Growth

25%
20%
18% 19%
20%
16%
15% 13%
11% 11%
10%
10% 7%
5% 5%
4%
5% 2% 2% 3%
0%
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
U.S. Multi-Industry
Source: Company filings, Bernstein estimates
We forecast industrial revenues shrinking 8% in 2009, down another 1% in 2010, and then growing 7% in
2011 and 6% in 2012. In 2011-12, continued service strength, macro-economic stabilization/recovery and
benefits from global fiscal stimulus programs should partially offset weakness driven by current order
trends. See Exhibit 38-Exhibit 39 for more detailed industrial revenue and growth forecasts.
26
November 6, 2009
Exhibit 38
We expect the industrial businesses revenue to have a ~4% CAGR from 2009 through 2012
Industrial Revenue Forecast

140
120 11.9
11.7 11.5
100 9.8 10.9 17.9
17.0 10.2 17.3
15.2 15.8 16.6
80
41.2
$B
38.6 36.6 38.8

60 36.2 34.4
40
46.3 42.8 42.2 45.8 49.4 52.6
20
-
2008 2009E 2010E 2011E 2012E 2013E
Technology Infrastructure Energy Infrastructure NBCU C&I
Exhibit 39
We forecast 2011 to be the rebound year for revenue growth for most of GE's businesses
Industrial Revenue Growth 2007 2008 2009E 2010E 2011E 2012E 2013E
Technology Infrastructure: 13.6% 8.2% -7.7% -1.3% 8.5% 7.7% 6.5%
Aviation 29.2% 14.4% -1.9% -0.5% 10.0% 8.0% 5.3%
Enterprise Solutions 12.9% 5.6% -20.9% -5.9% 7.0% 8.0% 6.0%
Healthcare 2.6% 2.3% -9.2% 0.5% 6.2% 7.0% 8.0%
Transportation 8.8% 10.9% -12.1% -6.8% 12.0% 9.0% 7.0%
Energy Infrastructure 21.7% 25.6% -6.2% -4.8% 6.1% 6.1% 6.1%
NBCU -4.8% 10.1% -10.2% 3.7% 5.0% 4.0% 3.5%
C&I -4.1% -7.3% -16.7% 4.3% 7.0% 5.0% 3.5%
Total Industrial 10.1% 11.8% -8.5% -1.2% 7.0% 6.4% 5.6%
What is going to drive this high revenue growth? As industrial production picks up, the excess capacity that
we've seen throughout 2009 should clear. In addition, GE is increasing its exposure to growth in emerging
markets, which are particularly levered to infrastructure investment. The combination of these trends should
benefit revenue growth at GE relatively more than at some of the other companies in our coverage.
U.S. Multi-Industry
A look at near term trends is helpful to see the sequential pickup across a number of segments in the U.S.
(Exhibit 40).
27
November 6, 2009
Exhibit 40
U.S. industrial end market indicators have shown improvement in July and August
YoY growth
Industrial Segment Industrial production indicator Apr May Jun Jul Aug Sep
Healthcare Medical equipment & supplies 3.7% 3.8% 3.0% 2.6% 2.0% 2.2%
Energy Engines, turbines, power trans equip -30.0% -31.5% -33.1% -29.5% -32.8% -32.9%
Aviation Aerospace products & parts -3.5% -4.7% -6.7% -4.3% -4.2% 21.0%
Transportation Railroad eqip, ships & boats -21.8% -19.9% -18.7% -13.3% -12.0% -9.9%
C&I Household appliances -8.8% -10.7% -18.5% -16.4% -10.5% -1.9%
MoM growth
Industrial Segment Industrial production indicator Apr May Jun Jul Aug Sep
Healthcare Medical equipment & supplies 1.4% 0.5% -1.1% 0.5% 2.6% -0.5%
Energy Engines, turbines, power trans equip -1.4% -3.2% -6.2% -1.0% 1.8% -1.9%
Aviation Aerospace products & parts -1.7% -1.8% -0.3% 1.7% -0.3% 2.0%
Transportation Railroad eqip, ships & boats -1.4% 1.0% 2.1% 1.4% 1.6% -1.0%
C&I Household appliances 7.6% -0.3% -8.7% 1.4% 2.9% 1.2%

Source: Federal Reserve, Global Insight, Bernstein analysis
Industrial production recovery

We believe that much of the rebound in the infrastructure businesses will be related to a recovery in
industrial production, and the resulting decline in excess capacity. As we have demonstrated in past
research, the decline in industrial production in the current recession has been worse than in any recession
since the 1950s. In addition, it has taken longer to bottom than in any of the recessions shown in Exhibit
41. However, we have talked about the bottom forming and indeed now see some improvement.
U.S. Multi-Industry
28
November 6, 2009
Exhibit 41
Industrial Production, normalized to the first month of the recession
1.10
IPI Normalized to First Month of Recession
IPI in previous recessions 1960

1.05 1957
1953
1990
1.00 1969
2001
0.95 1981
1973
0.90
2008
0.85
Latest data,
Sep-09
0.80
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Months from Recession Beginning
Source: Global Insight and Bernstein analysis
The seizure in industrial production drove a sharp decline in industrial capacity utilization, with the June
reading of 68.3 being the lowest in over 40 years (Exhibit 42). The current reading has ticked up to 70.5,
and we expect it to increase as industrial production returns.
Exhibit 42
Industrial Capacity Utilization
Total Industrial Capacity Utilization

95
90
Capacity Utilization (%)
85
U.S. Multi-Industry
80
75
70
70
65
Jan-67
Jan-69
Jan-71
Jan-73
Jan-75
Jan-77
Jan-79
Jan-81
Jan-83
Jan-85
Jan-87
Jan-89
Jan-91
Jan-93
Jan-95
Jan-97
Jan-99
Jan-01
Jan-03
Jan-05
Jan-07
Jan-09
Recession Capacity Utilization
29
November 6, 2009
Infrastructure-fueled growth
Among all of the companies in our coverage, GE has the most exposure to infrastructure, at 26% of
industrials revenue and 27% of industrials profit (Exhibit 43). Approximately 80% of energy and water,
60% of oil & gas, 15% of transportation, and 15% of enterprise solutions are exposed to infrastructure. In
addition, another 5-10% of GECAS and EFS revenues are driven by infrastructure. We believe GE's
business mix will become even more weighted to infrastructure and especially to energy over the next 4-5
years.
Exhibit 43
GE has the highest exposure to infrastructure in our coverage
Infrastructure Exposure Across MI Companies

30%
25%
% of 2008 Company Total
Avg Profit = 19%

20%
15% Avg Rev = 17%
10%
5%
0%
GE Ind EMR TYC HON MMM DHR
Infrastructure % of Total Revenue Infrastructure % of Profit
Source: Bernstein analysis, Company reports, and management discussions
Generally speaking, businesses with exposure to infrastructure post higher historical growth rates than the
other businesses or the company overall. GE's infrastructure growth was above 20% between 2005-2008,
compared to ~11% total growth and 8% growth at other businesses. Infrastructure related growth made up
>40% of GE's industrial growth in the last three years and while we expect a decline in 2010 and slower
U.S. Multi-Industry
growth thereafter, we still expect it to comprise almost half of GE's overall growth through 2013.
In 2007, 19 "megacities" had populations greater than 10MM but accounted for only 9% of the planet's
urban population. There are 30 "megacities in waiting" between 1M and 5M and 75% of these are in
developing countries. Approximately 23% of the world population lives in cities between 1 and 5M. An
average of total infrastructure spending across the number of cities with populations greater than 750,000 in
Exhibit 44 begins to show the potential growth in place like Brazil, China, Russia and India among others.
A quick sensitivity in Exhibit 45 shows the order of magnitude opportunity as more cities receive needed
infrastructure in larger developing countries. If the per city spending in these 5 countries (BRIC +
Indonesia) and just 10% of the remaining world's cities reached the levels of the US (one of the lower
spends for a developed country), then their total spending would double and the world's would increase by
30%. We are not suggesting spending at levels of the UAE or Tokyo, but over time the increase is still
dramatic. We estimate that the total global market for infrastructure-related spending is ~$2.3 trillion in
2009.
30
November 6, 2009
Infrastructure Construction Spending Per City Across 2007 Infrastructure Construction Opportunity Sensitivity
Countries Shows Wide Variation (Constant $ 2000) at Increased Spending Levels is Significant (constant $
2000)
# Cities with Populations > 750K in 2007 Sensitivity At Increased Spending Levels
Current @ US @ UK
Cities W/Popln Country Infra. Spend per city Infra Con Spend Per Spend Per @ German
> 750K Con. Spend ($B) ($B) Spend City City Spend Per City
Japan 8 319 39.9 Brazil 55 65 130 175
UAE 1 11 10.6 China 186 381 761 1,029
Germany 4 29 7.2
Russia 18 43 86 117
India 45 159 319 431
Canada 6 10 1.6
Indonesia 27 32 65 88
Australia 5 32 6.3
10% of Other 38 81 162 219
France 7 39 5.6
Sub-Total 368 761 1,523 2,059
U.K. 7 35 4.9 % Increase 107% 313% 459%
South Korea 11 57 5.2 Countries 1,068 1,088 1,088 1,088
U.S. 54 232 4.3 Total 1,436 1,850 2,614 3,151
Singapore 1 2 2.3 % Increase 29% 82% 119%
Indonesia 12 27 2.3
Brazil 24 55 2.3
China 141 186 1.3
Russia 16 18 1.1
India 59 45 0.8
Other >300 341
World >656 1,436
Source: UN DESA, World Population Database, 2007 Revision, Global Insight Source: UN DESA, Global Insight and Bernstein Analysis
and Bernstein Analysis
We believe that infrastructure investment growth is driven largely by the will and means of governments to
invest. This government commitment creates more of a buffer to the volatility of economic cycles.
Governments such as those in China are likely to maintain their investments and ride out short term
economic cycles, resulting in temporary declines in export manufacturing. It would likely take the
expectation of a prolonged global recession over many years to change government policy and reduce the
commitment to investment so long as the government has the reserves, tax base and/or debt capacity to fund
it.
We also point to commodity-led growth and GDP diversification in oil rich countries and infrastructure
lifecycle "reinvestment" in mature economies. While most of the growth means new jobs with people
needing electricity, water and transportation, some of this growth is well ahead of real demand, as
evidenced by investment in places such as Dubai. Even in these cases, governments often respond with
more infrastructure investment and continue to spend through recessions (Exhibit 46).
U.S. Multi-Industry
31
November 6, 2009
Exhibit 46
Infrastructure Construction Spending has not been sensitive to recessions in the US, Europe and most of Asia but
decreased in Japan in the years following the crisis of the late 90s
US Recession Asian Crisis US, Japan Recession Global Recession

400
Europe Downturn
Infrastructure Construction Spending
350
300
(constant $B 2005)
250
200
150
100
50
0
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
E
09
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
Japan U.S. China South Korea U.K. Germany Australia
Source: Global Insight and Bernstein Analysis
This has been the case in the current recession, and we expect infrastructure spending to remain robust
growing forward. Growth in China in particular should continue to be strong (Exhibit 47). For more detail,
please see our piece from August 19, 2009: "Bernstein Industrials: Global Infrastructure Round 2 (When
Will We Get Back to the Boom?)"
U.S. Multi-Industry
32
November 6, 2009
Exhibit 47
Infrastructure Construction Spending (constant 2005 billions $)
Global Recession
400
Infrastructure Construction Spending
350
300
(constant $B 2005)
250
200
150
100
50
0
2008 2009E 2010E 2011E 2012E 2013E
Japan U.S. China
South Korea U.K. Germany
Australia Singapore
Emerging Markets Exposure

GE also has significant exposure to emerging markets, where we expect the rate of growth to continue to be
higher than growth in developed areas. GE's exposure to these fast growing areas should increase going
forward, both as a function of the higher growth in these areas and intentional positioning of the business to
capitalize on growth opportunities. In 2008, emerging regions contributed approximately 28% of GE
Industrial revenue. By 2012, we expect that this will increase to ~39% - over one third - of Industrial
revenue) (Exhibit 48-Exhibit 49).
Despite the global downturn, GE's revenue in China is expected to grow more than 20% in 2009. We expect
this growth to accelerate to the 20% to 25% range through 2011 from demand in the health care, water,
energy, and aviation end markets. Revenue in India is on track to grow over 12% this year, and we expect
that to increase to 15% in 2010 and approximately 20% in 2011. This region should also benefit from health
U.S. Multi-Industry
care, locomotive, aviation, and energy demand, as well as nuclear reactor projects. The revenue base in
Eastern Europe is roughly split 44% from industrials, and 56% from GE Capital. We expect the industrials
portion to increase ~18% in 2009, whereas the GE Capital portion will decline. We expect overall revenue
in this region to decelerate in 2010 and 2012 to the 10% to 12% range. In the Middle East and Africa,
revenue is on track to grow 5% to 10% this year, as well for the next 2 years. Finally, revenue in Latin
America will be down high single digits this year due to FX dynamics, but should increase to ~10% in 2010
and ~12% in 2011 due to a pick up in oil and gas, as well as energy, health care, and locomotive activity.
33
November 6, 2009
In 2008, >25% of GE Industrial's revenue came from We expect this to increase to >35% by 2011
emerging regions
GE Industrial Rev from Emerging Regions, GE Industrial Rev from Emerging Regions,
2008 2011E
India China India

China 2% E. Europe 7% 3%
4% 2% Mid E. Europe
East/Africa 4%
9%
Mid
Lat Am East/Africa
6% 11%
Other
Emerg. Other Lat Am
Other Mkts 61% 7%
72% 5%
Other
Emerg.
Mkts
7%
Source: Company reports and interviews, and Bernstein estimates and analysis Source: Company reports and interviews, and Bernstein estimates and analysis
Focus on Energy Segment Revenue Growth
We think it is helpful to briefly focus on the energy business within Energy Infrastructure.
At $17B, Healthcare is now less than half diagnostic We forecast declining revenues in 2009 and 10 before
imaging with clinical systems another 25% recovering in 2011 and growing faster thereafter
GE Energy (ex O&G)

Energy Infra: Energy (ex-O&G)
T&D IGCC Env Svcs
4% 2% 2% 35 19%
Gas 18%
Engines 30 17%
Segment Margin
U.S. Multi-Industry
4%
16%
25
15%
$B
Nuclear
Energy 14%
4% 20
Services 13%
41% 12%
Wind
15
19% 11%
Opt & 10 10%
Control
2005
2006
2007
2008
2009E
2010E
2011E
2012E
2013E
Gas Turbines
4% 20%
Revenue Margin
2008 Revenue = $29B
Source: Company reports Source: Company reports and Bernstein analysis
34
November 6, 2009
Total energy order rates, including equipment and CSA, bottomed in the 2nd quarter and we forecast them
improving over coming quarters based on government stimulus funding and global demand for wind and
smart grid investments as well as macro-driven recovery driving increasing needs for power generation and
services. Over the much longer term, we think GE stands to benefit from technology programs across
nuclear, turbines, renewables and transmission / distribution. In total, GE's key energy program investments
(across the larger segment including O&G) have increased from $1.3B in 2006 to $1.9B in 2009 and are
expected to reach $2.1B in 2012.
Exhibit 52
We estimate Energy order rates to continue to improve after bottoming in 2Q09
Total Energy orders growth

70%
60% 56%
50%
39%
40% 36% 36%
30%
30%
18% 20%
20% 15%
10% 6% 5%
0%
0%
-10% -5%
-20% -15%
-20%
-30% -25%
-40% -33%
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09E 1Q10E 2Q10E 3Q10E 4Q10E
Exhibit 53
We expect Energy sales to bottom in 4Q09, lagging orders by 2 quarters
Total Energy sales growth

50%
38%
40% 35%
29%
U.S. Multi-Industry
30% 24%
21%
20% 15% 16%
9%
10% 3% 5%
0%
-1% -2%
-10%
-8%
-11%
-20% -15%
-20%
-30%
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09E 1Q10E 2Q10E 3Q10E 4Q10E
35
November 6, 2009
Exhibit 54 Exhibit 55 Exhibit 56

Total GE Energy GE Energy Equipment GE Energy Services
50% 70% 25%
40% 60% 20%

Sales growth (2 qtr lag)

15%
30% 50%
10%
20% 40%
2
R = 57% 5%
2
10% R = 84% 30%
0%
0% 20%
-5%
-10% 10% -10% 2
R = 30%
-20% 0% -15%
-50% 0% 50% 100% 0% 50% 100% 150% -20% -10% 0% 10% 20% 30%
Orders growth Orders growth Orders growth
Source: Company reports, Bernstein analysis Source: Company reports, Bernstein analysis Source: Company reports, Bernstein analysis
Note: orders 1Q07 to 1Q09, sales 3Q07 to 3Q09 Note: orders 2Q06 to 3Q07, sales 2Q07 to 3Q08 Note: orders and sales 2Q07 to 3Q09
Exhibit 57
Our regression model forecasts global electrical capacity shipments to be down 21% in 2010 and up 75% in 2011
Total Global Shipments - Gas-related capacity (GW)

140%
120%
100%
80%
60%
40%
20%
0%
-20%
-40%
-60%
-80%
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
20 8
E
E
0
09
10
11
12
13
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
U.S. Multi-Industry
Actual Predicted
Source: McCoy, Global Insight, Bernstein estimates
36
November 6, 2009
Exhibit 58
Our global electrical shipment model is based on Global Insight forecasts of U.S. electricity sales and Utilities
industrial production
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.61
R Square 0.38
Adjusted R Square 0.30
Standard Error 0.30
Observations 20.00
ANOVA
df SS MS F Significance F
Regression 2.00 0.92 0.46 5.14 0.02
Residual 17.00 1.52 0.09
Total 19.00 2.44
Coefficients Standard Error t Stat P-value Lower 95%

Intercept (0.10) 0.13 (0.77) 0.45 (0.37)
Sales of electricity to ultimate consumers 29.33 9.61 3.05 0.01 9.05
Industrial production--Utilities (17.32) 8.34 (2.08) 0.05 (34.91)
Source: McCoy, Global Insight, Bernstein estimates
Focus on Healthcare Segment Growth
While we believe Healthcare is an attractive business long-term and generally defensive during down
cycles, GE's exposure is primarily to high-cost equipment, which we believe will continue to be more
vulnerable as hospitals cut capital expenditures. In 2009 we expect Healthcare revenue to decline 10%, and
down another 2% in 2010 before rebounding in 2011 with >6% growth.
This segment has experienced difficult operational periods in the past and will benefit from improved
execution in the future. However, the segment will be operating in a more challenging near term
environment wherein hospitals are cutting capital expenditures due to both a weak economic environment
and the reduced government reimbursements for procedures. We believe diagnostic imaging is the business
at most risk of continued reduced revenues, as these purchases are lower priority for hospital executives in
budget planning.
U.S. Multi-Industry
37
November 6, 2009
At $17B, Healthcare is now less than half diagnostic We forecast declining revenues in 2009 and 10 before
imaging with clinical systems another 25% recovering in 2011 and growing faster thereafter
GE Healthcare
GE Healthcare Forecast
24% Americas DI 20 20%
20% Intl DI
Life OEC 3% DI 19 18%
HC IT
Sciences 10% 18 16%
7%
Segment margin
17 14%
Med Diag Diagnostic 16 12%
11% Imaging
$B
47% 15 10%
14 8%
Clinical 13 6%
Systems
25% 12 4%
~45% US
~34% EMEA 11 2%
~18% AP 10 0%
~3% LA
2008 Revenue = $17.4B
05
06
07
20 8
E
E
0
09
10
11
12
13
20
20
20
20
20
20
20
20
Revenue Margin
Source: Company reports Source: Company reports and Bernstein analysis
This is a business with seemingly great potential that has been plagued by regulatory, operational and
structural issues resulting in many guidance disappointments in recent years. See Exhibit 61 for a
summary of recent GE Healthcare guidance vs. actual results.
Exhibit 61
GE Healthcare has missed every guidance target in the two prior years and is likely to miss again in 2009
Segment
profit Sales
growth growth Margin
2007 guidance (Dec '06) 15-20% 10% 20%
2007 actual -3% 3% 18%
2008 guidance (Dec '07) 10% 5-7% 19%

U.S. Multi-Industry
2008 actual -7% 2% 16%
2009 guidance (Dec '08) Positive

2009YTD through Sep -21%
Source: Company reports
At last month's investor event, management issued what they consider "conservative" guidance for 2009-11
of 3-5% revenue growth, 5-10% operating profit growth and +15% ROTC, implying slower growth in 2010
and accelerating into 2011 and beyond. They indicated their outlook and visibility has improved, reflecting
"stronger markets, better portfolio and better cost-structure." Our earnings model shows health care
revenues up 2% over the same time frame (down 9% in 2009, up half a percent in 2010 and then up more
than 6% in 2011).
38
November 6, 2009
Real concerns around diagnostic imaging reimbursement and hospital capex trends persist. Recent
comments from industry players suggest hospital spending will continue to lag signs of broader economic
recovery.
− "Hospitals [are] limiting capital spending and slowing adoption of new technology" – Bruce Barett,
CEO of Somanetics, 9/17/09
− "Capital spending for big-ticket durable equipment, from beds to MRI's, has not thawed and probably
will not for at least another year and a half" – Chris Begley, CEO of Hospira, 9/17/09
− "The economy has to recover for a while for philanthropy and investments to recover" – Tim
Birkenstock, CFO of Children's Hospital of Wisconsin, 9/21/09
GE's overweight exposure to imaging technology has meant that it has lagged healthcare capital equipment
competitors, Philips and Siemens, in terms of sales growth (see Exhibit 62) in recent quarters. One estimate
of the size of the imaging equipment market in the U.S. puts it at $4.6B in 2009, or down 28% since 2006.
Exhibit 62
GE Healthcare sales growth has lagged competitors in recent quarters due to higher exposure to imaging equip
Sales growth: GE Healthcare, Philips Healthcare, Siemens Healthcare
35%
28.6%
30%
25%
Sales YoY growth
18.1%
20%
13.9%
15% 10.7% 9.6%
9.5%
10% 7.0%
3.2% 4.0%
5% 0.8% N/A
0%
-5%
-3.4%
-10%
-8.8% -9.3%
-15% -11.7%
3Q08 4Q08 1Q09 2Q09 3Q09
GE Healthcare Philips Healthcare Siemens Healthcare
Source: Capital IQ, Company reports
Growth is expected to be driven by 1) new products in core segments (especially lower price points); 2)
U.S. Multi-Industry
global expansion, - China, India, etc. with localized investment; 3) service/solution investments (EMR,
asset mgmt etc.); 4) adjacent segment investments (life sciences etc.); 5) operational excellence (base cost
down 8% versus prior year, 7% workforce restructured, 4% deflation, CFOA 1.8x NI)
Equipment orders have been down for the last 4 quarters and services orders down for the last 3. More than
one member of the management team indicated that the pace of de-stocking appeared to be slowing and
they anticipated positive order growth in the coming quarters, for example from academic institutions. We
expect this negative trend to continue, as hospitals' appetite for equipment purchases continues to weaken.
Secondly, negative equipment order rates did not start until 4Q08, so the fourth quarter could still be a
difficult comp for new orders. The equipment backlog was $3.4B as of Q3, and hasn't changed much. See
Exhibit 63 for new order growth rate trends.
39
November 6, 2009
Exhibit 63
Equipment and services orders growth
Healthcare Equipment and Services Orders, YoY
15% 13%
9%
10% 8% 8% 8%
5%
1%
0%
-1% -1%
-5% -2%
-3%
-6%
-10%
-11%
-15% -13%
-15%
-20%
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Equipment Services
Source: Company reports
Overall pricing has been negative in three of the last four quarters and we expect that to continue in light of
global competition, excess equipment capacity and reimbursement pressure. We do expect some margin
relief not just from cost reductions but from services growing faster than equipment.
Management indicated more tailwinds than headwinds coming from healthcare reforms globally. Despite
acknowledging increasing equipment utilization mandates being discussed, they expect volume to increase
both in the U.S. and globally as a result of increased access and number of procedures. Other tailwinds cited
include stimulus dollars, hospital productivity and outsourcing needs, IT standard setting and adoption, and
research equipment support. The headwinds mentioned include tax on equipment (although they discussed
mitigating factors), lower reimbursement rates in life sciences and delayed drug development.
The combination of an aging global population and increasing life expectancy will demand much of the
healthcare system in the future. This benefits GE's Healthcare business, as the influx in demand necessitates
advanced technologies and support systems (Exhibit 64). Another positive is the historical tendency for
U.S. Multi-Industry
healthcare expenditures to behave defensively during periods of low GDP growth (Exhibit 65).
40
November 6, 2009
Global aging and increased life expectancy requiring Health expenditures in aggregate tend to be more
more care are two of the key secular trends resilient to GDP downturns
Aging World Population U.S. Health Expenditures

18 80 18%
% of World Popn 60 and Over
16 70 16%
Life Expectancy at Birth

14 National Health
60 14%
Expenditure
12
YOY % Growth
50 12% Growth
10
40 10%
8
30 8%
6
20 6%
4
2 10 4%
0 0 2% GDP Growth
0%
50
60
70
80
90
00
10
20
30
19
19
19
19
19
20
20
20
20
63
68
73
78
83
88
93
98
20 3
20 E
E
0
08
13
19
19
19
19
19
19
19
19
20
% over 60 Life expectancy
Source: United Nations Population Database, Medium Variant Source: CMS, Global Insight, Bernstein analysis
Long-term, U.S. health care expenditures are expected to stabilize at lower rates than historically. There are
several secular trends providing tailwinds for the sector, however. Specific diseases, such as obesity and
diabetes, are becoming both more prevalent and more resistant to treatment, necessitating more advanced
treatment. Rising middle classes in developing regions such as China are driving demand for better health
care, and heightened regulatory scrutiny and preventative programs call for evolving treatment programs
and patient care.
We do believe that the tax impact on medical products as shown in the senate finance bill is a negative, but
limited. U.S. healthcare overhaul legislation includes cuts in Medicare reimbursement for diagnostic
imaging. Approximately 60%, or $10B, of GE Healthcare consists of imaging-related products and
services. GE is reportedly in active negotiation with legislators in lobbying for a minimally harmful
outcome. So far, proposals look to be a positive for healthcare IT, a negative for imaging and fairly neutral
for diagnostics. Proposals include: 1) reimburse first scan at full rate, 50% for subsequent scans1, 2) Excise
Tax on medical device industry based on market shares, 3) $19B incentive payments for adoption of
healthcare IT, 4) 11-19% payment reductions impacting radiology, radiation therapy, cardiology, 5) CMS
imaging use rate change from 50% to 90% - impacts MR, CT, PET and others.
U.S. Multi-Industry
GE Healthcare also faces the prospect of an excise tax proposed in the health care bill. The tax would seek
to raise $4B in total per year from medical device manufacturers with sales >$500M annually. The potential
impact on GE's earnings is not yet clear (it will depend on a determination of GE's market share), but we
estimate could be about $120M in 2010, or about a $0.01 hit to EPS. See Exhibit 66 for details on our
estimate of the tax impact on GE.
1
Contiguous Body Parts Imaging technical fee reduction
41
November 6, 2009
Exhibit 66
Estimate of earnings impact of proposed $4B medical device tax
GE Healthcare 2010E total sales ($M) 15,411
% of sales medical devices 83% << Excludes Healthcare IT and Life Sciences (17%)
2010E medical device sales ($M) 12,791
% of sales equipment 60%
GE Healthcare 2010E medical device equipment sales ($M) 7,675
% of sales in U.S. 45%
GE Healthcare 2010E medical device equip U.S. sales ($M) 3,454
Total U.S. medical device market size ($M) 114,000 << Estimate of Class II and III medical device market
GE Healthcare market share implied 3.0% at about 80% of $143B
Proposed tax ($M) 4,000
Implied tax per year ($M) 121
GE shares, 2010E (M) 10,654
GE EPS impact, 2010E (0.01)
Source: Bernstein Medical Devices team, Company reports, Bernstein estimates
While we accept that US equipment is only 10-15% of GE healthcare operating profit, we are still skeptical
of management's dismissal of equipment penetration declines resulting from mandatory utilization increases
from 50% to 65% over the next four years.
We believe it is likely that GE will benefit from stimulus dollars in 2011 given the ARRA's $19B of
spending in healthcare IT and $12.5B in healthcare equipment support. Healthcare-related stimulus
spending from the U.S. has potential to drive greater patient throughput and benefit GE through greater
service and equipment orders. See Exhibit 67.
Exhibit 67
Healthcare-related stimulus spending could potentially help GE Healthcare largely through greater patient throughput
American Recovery & Reinvestment Act (ARRA)
Key Healthcare Components of Stimulus
Healthcare Components of ARRA $B Impact for GE?

Medicaid (State funding) 87.0 More patient throughput
Cobra 25.0 More patient throughput
Healthcare IT 19.0 EMR adoption
National Inst. Of Health 10.0 Equipment sales
Community health centers 1.5 Equipment sales
Comparative Effectiveness Research 1.1
Prevention and Wellness 1.0
Veteran's Health Admin 1.0 Equipment sales
Source: Philips Healthcare, Bernstein research
U.S. Multi-Industry
We also think the Healthcare business is being managed differently today. John Dineen took over about two
years ago and has applied a more cost and process oriented approach across the business, having re-
organized, restructured and driven down operating costs.
The former Diagnostic Imaging and Clinical Systems P&Ls have been merged, with widespread and
significant organizational changes. We also understand six sigma, lean and other tools are being applied
more rigorously across the business along side more targeted investments.
While revenues are down 10% year to date and operating profit down 21%, cash flow from operations is up
36%. 7% of the workforce has been restructured to date while they talked about adding 1000+ rural China
sales force by 2011 and 500+ in rural India.
R&D investments appear more targeted and to leverage GE's scale positions. The company asserts that
R&D spending levels have not declined although the mix of R&D investments has shifted to more big
42
November 6, 2009
organic growth bets versus many smaller bets. The equipment debate used to center on technology driven
"slice wars" year after year – but this appears to have abated, at least from GE's perspective as they focus
more on driving improved customer economics.
• Portability – Handheld ultrasound, compact point of care ultrasound, and portable low-cost ECG are
products being developed to meet growing demand for access to care in remote regions. GE estimates
contribution margin improvements from these new products of 10-12% pts and sizes the opportunity at
$1B.
• Low cost procedures – 1) A low cost MR machine that provides 1.5 Tesla strength magnets is possible
through engineering improvements and low-cost local manufacturing. 2) The MAC 400 portable
electrocardiography device with one touch operation is 70% lower cost than tradition ECG and is
targeted for the Indian market. 3) Ultrasound fusion combines CT and MR, freeing up CT capacity and
lowers cost of biopsy.
• More precise diagnostics – Innovation by GE in the area of molecular imaging has led to procedures
that allow doctors to diagnose cancers and heart disease earlier than before. GE sees this serving the
valuable need for earlier diagnosis that both improves quality of patient life and lowers total treatment
cost.
• Enable home care – Smart monitoring technology will enable home care, which could reduce patient
care costs by 20% and free up crowded hospitals.
Financing from GE Capital for GE healthcare equipment customers appears to have been smaller in total
and at higher price points over the last year and we would expect this to continue into next year.
It appears that GE Healthcare will continue to pursue "small, adjacent M&A" until the parent's balance
sheet has the strength to support larger acquisitions. For example, GE's total sales in research instruments
and consumables (mostly from acquisition) was $700M in 2008 and the company cites a $7B opportunity in
2010, which we think will imply a more acquisitive approach in a target-rich sector.
Focus on Aviation Segment Growth
Aviation is a strong business within Tech Infrastructure, providing aircraft engines and services. The
subsegment produces jet engines, systems and equipment, and replacement parts for commercial aircraft,
military aircraft, business jets, and marine applications.
U.S. Multi-Industry
43
November 6, 2009
Services drive most of Aviation profitability Aviation forecast pauses through the cycle then
rebounds
GE Aviation GE Aviation Forecast

25 24%
Other 23
(B&GA, 22%
21
Unison)
Segment margin
19 20%
4% Coml
Military
Engines 17 18%
20%
$B
25% 15
13 16%
Systems 11 14%
1/2 Civil
12% Coml 9
1/2 Military 12%
Engine 7
Services 5 10%
39%
05
06
07
20 8
20 E
20 E
20 E
20 E
E
0
09
10
11
12
13
20
20
20
20
2008 Revenue = $19.2B
Revenue Margin
Source: Company reports and Bernstein Estimates Source: Company reports and Bernstein Estimates
The commercial side of Aviation has strengthened in recent years. As seen in Exhibit 70, between 1996
and 2006, GE and CFM took commercial engine leadership from Pratt & Whitney. We expect this trend to
continue, with CFM leading the pack by 2016, followed by GE and then Rolls Royce in a distant third. To
provide stable support for the original equipment business, management has made a concerted effort to
grow the service base through customized service agreements (CSA). GE projects a CSA backlog of around
$80 billion by 2011.
GE and CFM have taken share leadership from Pratt Management has focused on building its service base
Commercial Engines Installed Base GE Coml Customized Svc Agr't

25 90 Backlog
Commercial Engines (000s)
80
20 Coverage Increasing from
U.S. Multi-Industry
70
47% in 2006 by 2011
60
15
50
$B
10 40
30
5
20
0 10
1996 2006 2016E 0

GE CFM EA PW RR IAE 2001 2006 2008 2011E
Source: ACAS, company reports Source: Company reports
44
November 6, 2009
GE and CFM have also taken share from Pratt in terms of engine hours, rather than just the installed base.
Defined as the number of flight hours multiplied by the total number of engines, engine hours for GE and
CFM were 40 million and 19 million in 2007, respectively, versus 24 million for Pratt. This gives GE and
CFM combined about 2.5 times Pratt's engine hours (Exhibit 72).
Exhibit 72
GE and CFM have also taken share from Pratt in terms of engine hours
Annual Engine Hours by OEM

45,000,000
40,000,000 CFM
35,000,000
30,000,000
Engine Hours
25,000,000 Pratt & Whitney

20,000,000 GE
15,000,000
Rolls-Royce
10,000,000 Intl. Aero Engines
5,000,000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Overall Growth: 0.7% 4.1% -3.9% -0.3% 1.3% 9.0% 5.4% 4.3% 10.3%
Source: Airbus, Boeing, Lockheed, McDonnell-Douglas, Bernstein Aerospace and Defense Team
GE has still been sustaining new product spend, citing GEnx, GP7200, ARJ, 787/A380 actuation systems
(~$1.1B for R&D spend. They are leveraging existing platforms across multiple applications.
Exhibit 73and Exhibit 74 lay out GE's reckoning of their positioning and delivery/removal performance. In
May alone, they described 64 redeployments. In 2009, they indicated expectations for 1,930 commercial
engine deliveries across GE, CFM and EA (down 5-8% YOY) and 910 for military (up 22%). Lead time on
engines is now 6 months to 1 year.
U.S. Multi-Industry
45
November 6, 2009
GE is better positioned given its more recent, fuel This is a key reason why GE aircraft are faring better
efficient aircraft. than the market.
GE and CFM % of World Fleet World Fleet Deliveries/Removals

Based on Fleet Fuel Efficiency (1/08-5/09)
(PAS, 2009)
1500
Percentage of World Fleet
80%
1000
70%
60% 500
50%
40% 0
30%
-500
20%
10% -1000
0% GE and CFM All Other
Retirement Redeployment Best In Class
Candidates Candidates Deliveries Removals
Source: Ascend, GE Aviation Source: Ascend, GE Aviation
GECAS mentioned that they are fully placed to 2011 and only have 50 slots left for 2012/2013. They also
mentioned funding about $8B in transactions last year vs. planning for $7B this year. Lease rates are off
about 15% for newer aircraft and 20% + for older, larger aircraft. Some of the risks going forward are
competitors discounting even more sharply as demand stays soft. GECAS believes (and this is supported by
many of our interviews) the market is experiencing a demand gap more than a financing gap. 2009
financing is already in place and even in 2010, OEMs have additional financing capacity.
Strong military engine deliveries have bolstered slowing commercial deliveries so far, while services
growth has slowed somewhat. A hefty $21B equipment backlog and $55B in CSA backlog have helped
sustain Aviation during the recession. International traffic passenger growth (RPKs) through August was
down less severely than the previous nine months (see Exhibit 75), a sign that overall passenger traffic is
on the mend, according to data from IATA. Total traffic (i.e., including domestic and carriers not included
in IATA's database) was likely even better, as many smaller non-U.S. carriers that are not included in the
data have had fairly good traffic trends.
U.S. Multi-Industry
46
November 6, 2009
Exhibit 75
International passenger traffic growth is getting less bad in recent months
International Revenue Passenger Kilometers, YoY change

4%
1.9%
2% 1.3%
0%
YoY Change
-2% -1.3% -1.1%
-4% -2.9% -3.1% -2.9%

-4.6% -4.6%
-6%
-5.6%
-8% -7.2%
-10% -9.3%
-10.1%
-12% -11.1%
Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May- Jun-09 Jul-09 Aug-09
09
3Q08 4Q08 1Q09 2Q09 3Q09
Source: IATA, Bernstein analysis
Exhibit 76
GE Aviation sales growth is loosely correlated with international traffic
GE Aviation vs. International RPK

10% 50%
GE Aviation sales growth, YoY

8% 40%
6% 30%
Int'l RPK growth, YoY
4% 20%
2% 10%
0% 0%
-2% -10%
U.S. Multi-Industry
-4% -20%
correl = 55%
-6% -30%
-8% -40%
-10% -50%
05
06
06
06
06
07
07
07
07
08
08
08
08
09
09
ug
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
l/A
Ju
RPK growth GE Aviation growth
Source: IATA, Company reports, Bernstein analysis
47
November 6, 2009
Deliveries of commercial engines have had negative growth for three consecutive quarters, while deliveries
of military engines has been extremely strong for at least six quarters, helping to offset weakness on the
commercial side (see Exhibit 77 and Exhibit 78).
GE commercial engine deliveries have been weak… … while military deliveries have been very strong
Comm'l engines deliveries, growth Military engines deliveries, growth
20% 90%
15% 78%
15% 11% 80%
67%
10% 70%
5% 60%
YoY growth
YoY growth
50% 49%
0% 50%
-5% 40%
-10% 30%
-9%
-15% 20% 16%
-14% -15% 10%
-20% 10%
-19%
-25% 0%
2Q08 3Q08 4Q08 1Q09 2Q09 3Q09E 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09E
Source: Company reports, Bernstein analysis Source: Company reports, Bernstein analysis
Aviation services sales has held up relatively well, despite the declines in flight hours worldwide. Growth
rates have fallen from the 20%+ levels of 2007, but have largely stayed positive through the recession.
Exhibit 79
GE Aviation services sales growth has slowed significantly in recent quarters, but has largely stayed positive
Aviation services sales growth
25% 22% 22% 22% 23%
20% 18%
YoY growth
15%
10% 11%
10%
6%
U.S. Multi-Industry
5% 3%
0%
0%
-2% -1%
-5%
4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09E
Source: Company reports, Bernstein analysis
48
November 6, 2009
Margins and Corporate Expense
We forecast segment margins (before corporate) across industrials to increase ~130 bp from 15.6% in 2008
to 16.9% in 2012, above the peak of 16.6% in 2007. This represents approximately 40 bp in Technology
Infrastructure, 180 bp in Energy Infrastructure, 130 bp at NBCU and 260 bp at Consumer & Industrial. See
Exhibit 80 for more detailed industrial margin forecasts.
Much of our modeled margin expansion is due to base cost reduction from restructuring activities. GE
announced "$2B+" in additional restructuring funding (across all of GE) for the 2nd half of 2009 and 2010
with "2 years" payback. Through 3Q09, GE funded about $1.2B of restructuring activities in the industrial
businesses, and we expect another $400B in 4Q09. On top of $1B in corporate restructuring, GE spent
~$1.2B in both 2008 and 2007 on the industrial segments (excl. losses on exits, R&D impairment, quality
costs). "Base" costs for the whole company were reduced 2% by ~$1B, 60% industrial, to $44B in 2008 and
the company is targeting 9% reduction to $40B in 2009. Base costs declined 14% in 2Q09 and 10% in
3Q09. We expect restructuring savings on the order of $1.1B in 2009, and another $1.1B in 2010. After
corporate expenses such as restructuring and pension expense, we forecast margins to increase from 13.2%
in 2009 to 14.3% by 2012. See Exhibit 81 for more detail on our corporate expense forecast, and Exhibit
82 for our expected principal pension plan expense forecast.
Exhibit 80
We expect industrial margins to begin to improve in 2011
Industrial Segment Margin 2007 2008 2009E 2010E 2011E 2012E 2013E
Technology Infrastructure: 18.4% 17.6% 17.5% 17.5% 17.8% 18.0% 18.1%
Aviation 19.2% 19.1% 21.2% 21.0% 21.2% 21.3% 21.2%
Enterprise Solutions 15.6% 14.7% 11.6% 11.5% 11.8% 12.1% 12.4%
Healthcare 18.0% 16.4% 14.4% 14.9% 15.1% 15.4% 15.7%
Transportation 20.7% 19.2% 18.3% 17.7% 18.0% 18.2% 18.4%
Energy Infrastructure 15.7% 15.8% 17.5% 17.3% 17.4% 17.5% 17.4%
NBCU 20.2% 18.5% 16.0% 17.3% 18.8% 19.8% 19.7%
C&I 8.2% 3.1% 3.7% 4.4% 5.2% 5.7% 5.8%
Total Industrial 16.6% 15.6% 16.0% 16.1% 16.6% 16.9% 16.9%
Total Industrial after Corp 14.6% 14.0% 13.2% 13.3% 13.9% 14.6% 14.7%
U.S. Multi-Industry
49
November 6, 2009
Exhibit 81
We expect corporate expense to rise in 2009 mainly due to restructuring spend, while pension headwinds increase
corporate expense in 2010+
GE Corporate expense, forecast

4.0 includes ~$2B in 3.5 3.6
3.4 3.3 3.3
3.5 planned
3.0 restructuring 2.7
charges
2.5
1.8
$B
2.0 1.5
1.5
1.0
0.5
-
2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Exhibit 82
We forecast the principal pension plan expense to rise significantly in 2010+
Principal Pension Plan Expense, Forecast

3.0
2.46
2.5 2.17
1.89
2.0
1.5 1.28
$B
0.88
1.0 0.76 0.76
0.5 0.33 0.24
-
-0.12
(0.5)
U.S. Multi-Industry
2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
We expect the higher margin Services businesses to help offset the lower margin and declining Equipment
business volume. Infrastructure equipment backlog now stands at $47B and CSA backlog at $127B for a
total of $174B, exceeding both 2007's $158B and 2008's $172B of backlog (Exhibit 83). The $47B in
equipment backlog represents a lower percentage of total percentage than in 2008, indicating positive mix
dynamics for margins in 2010.
50
November 6, 2009
Exhibit 83
GE Infrastructure backlog
GE Industrial Backlog
200
180 172 B 171 B 170 B 174 B
160
140
$ Billion
120
121 121 122 127
100
80
60
40
20 51 50 48 47
-
4Q08 1Q09 2Q09 3Q09
equipment total csa total
Source: Company reports and Bernstein analysis
We forecast that 2/3 of the equipment backlog converts into revenue within the following calendar year and
the remaining equipment revenue comes from current "in year" orders. This translates to about ~$31B from
backlog and then we estimate another ~$8B in-in year equipment orders for about $39B in equipment
revenue, or down roughly 10-12% versus prior year. We estimate services related revenue increases 5% to
$38B in 2010. We estimate average segment margins on equipment decline by 100 bp from 2009 to 2010 to
~8% and service margins hold at ~27% which actually drives a 20-30 bp increase in average segment
margin to 17.4% due to mix shift. See Exhibit 84 for a detailed walk from 2009E to 2010E equipment and
services revenue and margins.
Exhibit 84
Although equipment volume declines will hurt equipment margins, product mix shift towards services should actually
improve margins in 2010E
Revenue and margin walk for Technology and Energy Infrastructure Segments, 2009E to 2010E
2010E equipment revenue and profit 2010E services revenue and profit 2010E total revenue and profit
$47B '09E equipment backlog $36B '09E services revenue $77B total equip & svcs revenue
U.S. Multi-Industry
-$8B 2/3 converts to revenue in '10E 5% 10E services revenue growth $13.4B Total equip & svcs profit
$31B '10E revenue from backlog $38B '10E services revenue 17.4% Total equip & svcs margin
+$8B '10E revenue from in-year orders
$39B '10E equipment revenue 27.0% '10E services margin (no change YoY)
9.0% '09E equipment margin $10.3B '10E services profit

-1.0% '10E margin degredation
8.0% '10E equipment margin
$3.1B '10E equipment profit
Tax Rate
GE Industrial's tax rate was 22% in the quarter and is approximately 26% year-to-date. The company
guided to a full year tax rate in the low to mid-20's, implying a ~16% tax rate in the fourth quarter. We
51
November 6, 2009
expect an Industrials tax rate of 23% in 2009, followed by 25% going forward. This assumes that current
political discussions on tax do not dramatically affect the Industrial rate. The Consolidated rate is shaping
up to be slightly negative in 2009 thanks to large tax benefits from GECS. We expect that GECS will return
to pre-tax profitability in 2010, but will not have positive effective rates until 2011+, when pre-tax earnings
become more significant. Once we reach this point, we expect that the consolidated rate will rise to the low
20% range. See Exhibit 85 for our tax rate forecast for GE Industrial and GE Consolidated. See Exhibit 86
for the breakout view of tax expense contribution from Industrials and GECS.
Exhibit 85
We expect the GE Consolidated tax rate to rise to the low 20% in 2011 range after two years of very low effective rates
Tax Rate, Forecast
30% 24% 25% 25% 25%

23% 22% 22%
25% 21% 21%
20% 16% 15% 14%
15%
10% 5%
5%
0%
-5%
-10% -6%
2006 2007 2008 2009E 2010E 2011E 2012E
GE Industrial GE Consolidated
Exhibit 86
We forecast GECS to return to having positive tax expense in 2011+
Tax Expense, Forecast, annual

6
5
4
4.0 4.2
3 2.8
2.7 2.6 3.5
2 Expense
3.4 2.9 3.1
$B
1 1.4 1.4 1.3

U.S. Multi-Industry
1.2 0.6 1.1

-
(1) (1.3)
(2.4)
(2) (3.5)
(3)
(4) Benefit
2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
GECS GE Industrial
52
November 6, 2009
5) We see GE shedding businesses with some $25-30B of revenue over the next 2-3 years and
the portfolio changing for the better.
Much of GE's intent with the portfolio is clear - to invest in core and adjacent infrastructure businesses – the
challenge is execution. But this becomes more practical in a recovery as buyers and sellers close valuation
gaps. What's out on the Industrial side? Most of Consumer & Industrial, Enterprise Solutions and even
NBC Universal – producing $28-29B in revenue and $3-4B of segment profit in 2009. What about on the
Capital side? GE may divest much of Consumer and selective pieces of the other businesses – or at least
reduce originations. We think this means that much of the bet on GE is a bet on the company's ability
to re-invest proceeds in enterprises that add value for shareholders. We anticipate increasing dividends
and share repurchases of course. But acquisitions will be key. The track record is clearly mixed at best –
Enron wind was a great story. Interlogix and Edwards were not. And there are many more examples. Going
forward, we have more confidence in GE picking the right core/adjacent strategic properties and integrating
them successfully – we point to the recent bid for Areva's Transmission and Distribution business, even if
they don't win it.
Exhibit 87 summarizes the various pieces of GE's growth since 2001.
Exhibit 87
GE Growth since 2001
Time Acquisitions Divestitures
2001: General Electric 2003: GE Medical
($1.3B revenue) 2005: Genworth
$126B revenue ($10B revenue)
2004: Amersham
($2.5B revenue)
2005: Insurance
2004-05:
Solutions
Vivendi Universal
($6B revenue)
($7.1B revenue)
+ 2006: IDX
($0.6B revenue)
- 2006: Momentive
($2.5B revenue)
2007: Smith Aero
2007: GE Plastics
($2.4B revenue)
($6.6B revenue)
FX
2007: General Electric ~$50B $4B ~$60+ B
$173B revenue revenue revenue
Size of GE in 2001 Revenue from acquisitions Revenue from divestitures FX in 2007
Total organic growth Key acquisitions Key divestitures
U.S. Multi-Industry
C&I, Enterprise Solutions, NBCU
In 2008 GE announced plans to spin off C&I, but later decided to hold onto the businesses until acquisition
markets improved. GE reportedly put up its Security business (within Enterprise Solutions) for sale in 2009.
We view it as likely that GE will sell both the C&I and Enterprise Solutions businesses over the next couple
of years. Neither C&I nor Enterprise Solutions were in the 3Q09 earnings presentation, despite a strong
quarter from C&I.
Further, we expect 2009 to be the year that Vivendi exercises its exit rights with respect to its 20% stake in
NBCU, and it seems likely that Comcast and NBCU will then establish a joint venture. We estimate the
implied valuation for legacy NBCU to be ~$24B, before the contribution of Comcast's programming assets.
Please see our October 13, 2009 piece, "Comcast and NBCU: The Meaning of It All [Conference Call
Transcript]" for more detail.
To approximate potential deal values for Enterprise Solutions and C&I, we ran a sum-of-the-parts analysis:
53
November 6, 2009
• Enterprise Solutions, a $4.7B business in '08, consists of a collection of businesses focused on

technologies for sensing, safety and power systems. 40% of the business is GE Security, 24% is Sensing
& Inspection Tech, 22% is GE Fanuc, a JV between GE and Fanuc of Japan that will dissolve by the end
of this year (GE is expected to retain the software, services, embedded systems and control systems
businesses), and the remaining 15% is GE Digital Energy. For our sum of the parts analysis of Enterprise
Solutions, we chose peer companies2 which have significant exposure3 to security, sensing & inspection,
GE Fanuc and Digital Energy end markets. These include Honeywell (HON), Tyco (TYC), Rockwell
Automation (ROK), Emerson (EMR), and Eaton (ETN). Our valuation of GE Enterprise Solutions is
detailed in Exhibit 88. The median price / EBIT of the five peer companies from 2007-12E suggests GE
Enterprise Solutions is worth approximately $4.5B, or $0.42/share.
• Consumer & Industrial is an $11.5B business offering products for both consumer and industrial
applications. Appliances is 53% of the business, Lighting is 21%, and Industrial is 26%. For our sum of
the parts analysis of GE C&I, we chose primarily major appliance makers. These include Whirlpool Corp
(WHR), Electrolux AB, Black & Decker (BDK), Quingdao Haier Co, and Koninklijke Philips
Electronics (PHIA@NA). Our valuation of GE C&I is detailed in Exhibit 89. The median price / EBIT
of the five peer companies from 2007-12E suggests C&I is worth approximately $5.4B, or $0.51/share.
GE Enterprise Solutions valuation GE Consumer & Industrial valuation
GE Enterprise Median peer Implied GE C&I Median peer Implied
Year Solutions EBIT ($B) Price/EBIT value ($B) Year EBIT ($B) Price/EBIT value ($B)
2007 0.7 7.4 5.1 2007 1.0 9.1 9.4
2008 0.7 6.5 4.5 2008 0.4 9.7 3.6
2009E 0.5 10.4 4.9 2009E 0.4 13.4 4.9
2010E 0.4 9.6 4.3 2010E 0.4 10.6 4.7
2011E 0.5 8.8 4.2 2011E 0.6 8.2 4.6
2012E 0.5 7.8 4.0 2012E 0.6 8.1 5.2
Average 4.5 Average 5.4
GE shares (bil.) 10.6 GE shares (bil.) 10.6
Value ($/share) 0.42 Value ($/share) 0.51
Source: First Call, Bernstein analysis and estimates Source: First Call, Bernstein analysis
With regards to the potential NBCU, we arrive at a value in the mid-$20B range using the average of four
different trading multiples (EV/EBITDA, EV/EBIT, EV/sales, P/E) on consensus estimates for peer
companies in 2009-11E and our own estimates for NBCU's segment profit. See Exhibit 90 for more detail
on the valuations by multiple and year used.
For each of the twelve valuation estimates, we used the median multiple on current market prices for the
U.S. Multi-Industry
three large media conglomerates that most resemble NBCU's mix of business: News Corp (NWSA), Time
Warner (TWX) and Walt Disney Co (DIS). We do not add a transaction premium on top of the market
multiple-based valuation; we expect that including the premium, the value would range between $24B and
$28B. Note that we use EV as our valuation numerator so as to be consistent in terms of comparing NBCU
to other media conglomerates with varying degrees of financial leverage.
2
We do not cover ROK. ETN is covered by Dan Dowd's U.S. Machinery & Capital Goods team.
3
Exposures are based on 2007 sales breakdowns
54
November 6, 2009
Exhibit 90
NBCU Valuation Excluding Acquisition Premium
NBCU Valuation (EXCLUDING ACQUISITION PREMIUM)
EV/EBITDA
2009E
EV/EBIT
EV/sales
valuation multiple used
P/E
EV/EBITDA
2010E
EV/EBIT
EV/sales
P/E
EV/EBITDA
2011E
EV/EBIT
EV/sales
P/E
5 10 15 20 25 30 35 40
Implied value of NBCU ($B)
Source: Bernstein analysis
Note: Grey bars indicate base case valuations +/- 10%
We then combined our NBCU valuation with the C&I and Enterprise Solutions valuations. We adjusted the
C&I and Enterprise Solutions figures based on competitive positioning of the businesses. Applying a 10%
to 20% premium on these businesses and including our estimate of the potential NBCU deal valuation, we
believe GE could get between $32B and $38B, which the company could then direct into the existing
infrastructure businesses (Exhibit 91).
U.S. Multi-Industry
55
November 6, 2009
Exhibit 91
Potential cash from divestitures
Implied
Value / Value 2010
share ($) ($B) P/EBIT Adjustments
Sum of the Parts Base Case (median peer multiples)
Enterprise Solutions 0.42 4.5 10.1
Consumer & Industrial 0.51 5.4 12.1
Sum of the Parts Adjusted Scenario
Enterprise Solutions 0.34 3.6 8.1 Decrease 20%, below average player
Consumer & Industrial 0.41 4.3 9.7 Decrease 20%, below average player, share loss
Adjusted Scenario including NBCU
Enterprise Solutions 3.6
Consumer & Industrial 4.3
NBCU 24-28
Total value 32-36
Assuming 10% Premium on Enterprise Solns and C&I:
NBCU 4.0
Total value 4.8
NBCU 24-28
Total value 33-37
Assuming 20% Premium on Enterprise Solns and C&I:
NBCU 4.3
Total value 5.2
NBCU 24-28
Total value 34-38
Source: Thomson One Analytics and Bernstein estimates
Where the $$ Should Go
We expect that GE will execute some, if not all, of the divestiture activity mentioned above. We expect that
armed with somewhere on the order of $32B-$38B, management invest in the infrastructure businesses, in
line with previously announced strategies. In 2008, Tech and Energy Infrastructure combined constituted
just under half of the entire portfolio (47%) (Exhibit 92). We expect that even if NBCU, C&I, and
Enterprise Solutions remain part of the portfolio, this percentage will grow to 53% by 2012 (Exhibit 93). It
is likely that this percentage will be even larger, given the removal of NBCU and C&I and the build out of
existing and new infrastructure businesses.
U.S. Multi-Industry
56
November 6, 2009
Total revenue by segment in 2008 Expected revenue by segment in 2012E
GE Rev by Segment, 2008 GE Rev by Segment, 2012E

C&I Ent Solns
6% C&I
NBCU 2%
Tech Infra 7%
9%
26% NBCU Tech Infra
11% 28%
Capital Capital
Energy
Finance Finance Energy
Infra
38% 28% Infra
21%
24%
Total = $180.6B Total = $163.7B
Source: Company reports and Bernstein estimates Source: Company reports and Bernstein estimates
6) More than 2:1 upside/downside valuation trade-off is compelling.
Even with just a 15x multiple on 2011/12 earnings from the industrial businesses and 8x normalized
earnings from GE Capital in the same time-frame, we get to nearly $15 for GE's industrial businesses and
$4 for GE Capital. For context, this would place GE at roughly 50% of its peak historical market
capitalization. Our current downside scenario is still 30% off of 2011/12 EPS in a plausible scenario which
would reduce valuation to $12-13 vs. our target price of $19. On current stock price of $14, this suggests
more than 2:1 upside/downside.
We estimate ~30% downside to $0.70 in 2012 industrial EPS in a plausible scenario where the industrials
business experiences another year of -5% or so revenue declines similar to 2009, with increased margin
pressure. In this case, the stabilization/recovery takes longer than expected, pushed out one more year. This
might stem from a more negative macro economic scenario which would result in even more bearish
equipment backlog conversion and similarly negative order rates as well as services growth not
materializing. In this case, the impact of fiscal stimulus programs would also take longer to be realized. We
U.S. Multi-Industry
assume here that low capacity utilization would persist with commensurate pressure on pricing. In this
environment, we would expect to see the biggest weakness across equipment businesses such as Enterprise
Solutions, Imaging and Transportation as rail contracts expire. NBCU would continue to face a weak
advertising market and pressure on affiliate fees.
57
November 6, 2009
Exhibit 94
Our valuation multiple for GE Capital is conservative relative to peer large banks
2011/12
First Call Avg EPS EPS EPS Implied target
Bank Target Price 2011 2012 2011/12 avg P/E
BofA 20.55 2.20 2.95 2.58 8.0
Citi 4.95 0.39 0.58 0.49 10.2
Wells Fargo 32.03 2.91 3.69 3.30 9.7
JPMorgan 52.94 4.82 6.14 5.48 9.7
Average 9.4
GE Capital 8.0
Source: First Call, Bernstein estimates
Financial Statements
Exhibit 95
GE Consolidated Income Statement
GE Income Statement CAGR CAGR
$M except EPS FY07 FY08 1Q09 2Q09 3Q09 4Q09E FY09E FY10E FY11E FY12E FY13E '06/08 '09/13E
Goods and Services 101,578 113,593 24,420 26,204 25,643 27,684 103,951 102,675 109,895 116,892 123,493 10.9% 4.4%
Financial Revenue 66,301 67,008 13,088 12,797 12,161 12,356 50,402 47,330 48,014 46,811 47,072 9.0% -1.7%
Other/corporate 4,609 1,914 903 81 (5) 390 1,369 1,162 1,223 2,044 1,618 -18.6% 4.3%
Total Revenue 172,488 182,515 38,411 39,082 37,799 40,429 155,721 151,167 159,133 165,747 172,184 9.7% 2.5%
Industrial COGS (73,125) (83,772) (18,066) (18,804) (18,548) (20,370) (75,788) (74,855) (80,118) (85,220) (90,032) 12.0% 4.4%
Provisions for losses (4,431) (7,518) (2,336) (2,817) (2,868) (2,533) (10,554) (8,920) (6,776) (3,633) (2,760) 56.7% -28.5%
GECS Interest Expense (22,706) (25,116) (5,121) (4,468) (4,128) (4,249) (17,966) (15,388) (13,858) (12,588) (12,535) 18.7% -8.6%
Insurance segment expense (3,469) (3,213) (746) (779) (732) (809) (3,066) (3,175) (3,135) (3,092) (3,051) 0.0% -0.1%
Consolidated COGS (103,731) (119,619) (26,269) (26,868) (26,276) (27,961) (107,374) (102,338) (103,887) (104,532) (108,378) 14.7% 0.2%
Gross Profit 68,757 62,896 12,142 12,214 11,523 12,468 48,347 48,829 55,245 61,215 63,806 1.8% 7.2%
SG&A and Other Op Exp. (40,173) (42,021) (9,337) (8,933) (9,354) (9,359) (36,983) (35,275) (36,054) (36,805) (37,231) 8.8% 0.2%
EBIT 28,584 20,875 2,805 3,281 2,169 3,109 11,364 13,554 19,192 24,410 26,575 -9.0% 23.7%
Depreciation & Amortization 10,275 11,492 2,731 2,504 2,658 2,624 10,517 10,418 10,464 10,564 10,717 16.6% 0.5%
EBITDA 38,859 32,367 5,536 5,785 4,827 5,733 21,881 23,972 29,655 34,974 37,292 -1.9% 14.3%
Non-financial interest exp (1,056) (1,093) (206) (185) (194) (187) (772) (819) (725) (853) (883) 2.6% 3.4%
EBT 27,528 19,782 2,599 3,096 1,975 2,922 10,592 12,735 18,466 23,557 25,691 -9.5% 24.8%
Taxes (4,155) (1,052) 318 (219) 484 - 583 (1,790) (4,117) (5,099) (5,528) -48.4%
Tax Rate 15.1% 5.3% -12.2% 7.1% -24.5% 0.0% -5.5% 14.1% 22.3% 21.6% 21.5%
Minority Interest (916) (641) (85) (12) (5) (8) (110) (327) (450) (504) (511) -13.8% 46.7%
Earnings, cont ops 22,457 18,089 2,832 2,865 2,454 2,914 11,065 10,619 13,899 17,954 19,653 -3.3% 15.4%
Preferred dividend - (75) (75) (75) (75) (75) (300) (300) (300) (300) (300)
U.S. Multi-Industry
Earnings, cont ops to common 22,457 18,014 2,757 2,790 2,379 2,839 10,765 10,319 13,599 17,654 19,353 -3.5% 15.8%
Earnings, discont ops (249) (679) (21) (194) 40 - (175) - - - -
Net Income 22,208 17,335 2,736 2,596 2,419 2,839 10,590 10,319 13,599 17,654 19,353 -8.6% 16.3%
Net Income to common 22,208 17,260 2,661 2,521 2,344 2,764 10,290 10,019 13,299 17,354 19,053 -8.8% 16.7%
Average shares 10,218 10,098 10,564 10,609 10,638 10,652 10,616 10,662 10,485 10,251 10,006 -1.4% -1.5%
GE Industrial EPS, cont. ops 0.98 1.01 0.17 0.23 0.21 0.25 0.86 0.82 0.95 1.09 1.20 7.5% 8.7%
GECS EPS, cont. ops 1.22 0.77 0.09 0.03 0.01 0.02 0.16 0.15 0.35 0.62 0.73 -11.5% 47.1%
Total EPS, cont ops to common 2.20 1.78 0.26 0.26 0.22 0.27 1.01 0.97 1.30 1.72 1.93 -2.1% 17.5%
EPS to common 2.17 1.72 0.26 0.24 0.23 0.27 1.00 0.97 1.30 1.72 1.93 -7.3% 18.0%
Dividends Per Share 1.12 1.23 0.32 0.32 0.11 0.10 0.84 0.51 0.67 0.83 0.96 10.7% 3.3%
Dividend Payout Ratio 52% 72% 122% 129% 47% 38% 84% 53% 51% 48% 50% 19% -12%
Year-over-Year Growth
Total Revenue 13.8% 5.8% -9.0% -16.6% -20.0% -12.5% -14.7% -2.9% 5.3% 4.2% 3.9%
EBIT 13.5% -27.0% -50.7% -52.2% -59.9% 6.5% -45.6% 19.3% 41.6% 27.2% 8.9%
Earnings, cont ops to common 16.1% -19.8% -36.6% -48.3% -46.9% -25.1% -40.2% -4.1% 31.8% 29.8% 9.6%
EPS, cont ops to common 18.1% -18.8% -40.0% -51.3% -50.2% -26.4% -43.2% -4.6% 34.0% 32.8% 12.3%
Source: Company reports and Bernstein estimates and analysis
58
November 6, 2009
Exhibit 96
GE Industrial Segment Forecast
GE Segment Detail CAGR CAGR
$M FY07 FY08 1Q09 2Q09 3Q09 4Q09E FY09E FY10E FY11E FY12E FY13E '06/08 '09/13E
Segment Revenue
Technology Infrastructure 42,801 46,316 10,436 10,555 10,209 11,560 42,760 42,223 45,824 49,370 52,590 10.9% 5.3%
Aviation 16,819 19,239 4,817 4,619 4,542 4,897 18,875 18,783 20,661 22,314 23,496 21.6% 5.6%
Enterprise Solutions 4,462 4,710 913 918 904 990 3,725 3,504 3,749 4,049 4,292 9.2% 3.6%
Healthcare 16,997 17,392 3,545 3,964 3,801 4,485 15,795 15,869 16,853 18,033 19,476 2.5% 5.4%
Transportation 4,523 5,016 1,171 1,069 970 1,199 4,409 4,110 4,603 5,017 5,369 9.8% 5.0%
Energy Infrastructure 30,698 38,571 8,239 9,577 8,917 9,439 36,172 34,448 36,563 38,804 41,181 23.7% 3.3%
NBCU 15,416 16,969 3,524 3,565 4,079 4,076 15,244 15,805 16,596 17,260 17,864 2.4% 4.0%
C&I 12,663 11,737 2,221 2,507 2,438 2,610 9,776 10,199 10,913 11,458 11,859 -5.7% 4.9%
Total GE Industrial 101,578 113,593 24,420 26,204 25,643 27,684 103,951 102,675 109,895 116,892 123,493 10.9% 4.4%
Segment Revenue Growth
Technology Infrastructure 13.6% 8.2% -0.2% -10.9% -10.8% -7.9% -7.7% -1.3% 8.5% 7.7% 6.5%
Aviation 29.2% 14.4% 11.5% -6.2% -6.2% -5.0% -1.9% -0.5% 10.0% 8.0% 5.3%
Enterprise Solutions 12.9% 5.6% -17.4% -25.7% -24.2% -16.0% -20.9% -5.9% 7.0% 8.0% 6.0%
Healthcare 2.6% 2.3% -8.8% -11.7% -9.3% -7.0% -9.2% 0.5% 6.2% 7.0% 8.0%
Transportation 8.8% 10.9% 2.0% -11.1% -22.8% -15.0% -12.1% -6.8% 12.0% 9.0% 7.0%
Energy Infrastructure 21.7% 25.6% 6.7% -1.0% -8.7% -17.3% -6.2% -4.8% 6.1% 6.1% 6.1%
NBCU -4.8% 10.1% -1.7% -8.2% -19.6% -8.0% -10.2% 3.7% 5.0% 4.0% 3.5%
C&I -4.1% -7.3% -22.4% -20.1% -18.4% -5.0% -16.7% 4.3% 7.0% 5.0% 3.5%
Total GE Industrial 10.1% 11.8% -0.9% -8.2% -12.4% -11.1% -8.5% -1.2% 7.0% 6.4% 5.6%
Segment Profit
Technology Infrastructure 7,883 8,152 1,803 1,833 1,748 2,089 7,473 7,399 8,155 8,892 9,517 5.6% 6.2%
Aviation 3,222 3,684 1,080 923 970 1,020 3,993 3,939 4,374 4,746 4,974 14.7% 5.6%
Enterprise Solutions 697 691 102 90 103 138 433 404 444 492 534 5.6% 5.4%
Healthcare 3,056 2,851 411 590 508 764 2,273 2,360 2,540 2,772 3,052 -4.7% 7.6%
Transportation 936 962 217 236 177 175 805 729 830 915 990 11.5% 5.3%
Energy Infrastructure 4,817 6,080 1,273 1,792 1,582 1,693 6,340 5,958 6,380 6,809 7,181 31.5% 3.2%
NBCU 3,107 3,131 391 539 732 775 2,437 2,734 3,119 3,417 3,518 3.6% 9.6%
C&I 1,034 365 36 111 117 99 363 446 564 650 684 -38.7% 17.1%
Total GE Industrial 16,841 17,728 3,503 4,275 4,179 4,657 16,614 16,536 18,218 19,767 20,901 9.8% 5.9%
Segment Profit Growth
Technology Infrastructure 7.9% 3.4% 6.0% -10.8% -8.0% -16.3% -8.3% -1.0% 10.2% 9.0% 7.0%
Aviation 15.0% 14.3% 39.4% 1.0% 16.3% -12.2% 8.4% -1.3% 11.0% 8.5% 4.8%
Enterprise Solutions 12.4% -0.9% -33.8% -44.4% -44.9% -26.5% -37.3% -6.6% 9.8% 10.7% 8.6%
Healthcare -2.7% -6.7% -22.2% -21.0% -19.9% -18.9% -20.3% 3.8% 7.6% 9.1% 10.1%
Transportation 20.9% 2.8% -14.6% -2.1% -30.6% -17.3% -16.3% -9.5% 13.9% 10.2% 8.2%
Energy Infrastructure 36.9% 26.2% 19.0% 13.5% 11.0% -15.6% 4.3% -6.0% 7.1% 6.7% 5.5%
NBCU 6.4% 0.8% -45.1% -40.7% 13.5% -10.4% -22.2% 12.2% 14.1% 9.5% 3.0%
C&I 6.6% -64.7% -75.0% -19.6% 148.9% 176.2% -0.4% 22.6% 26.6% 15.2% 5.3%
Total GE Industrial 14.4% 5.3% -3.4% -8.7% 4.0% -13.8% -6.3% -0.5% 10.2% 8.5% 5.7%
Segment Margin
Technology Infrastructure 18.4% 17.6% 17.3% 17.4% 17.1% 18.1% 17.5% 17.5% 17.8% 18.0% 18.1%
Aviation 19.2% 19.1% 22.4% 20.0% 21.4% 20.8% 21.2% 21.0% 21.2% 21.3% 21.2%
Enterprise Solutions 15.6% 14.7% 11.2% 9.8% 11.4% 14.0% 11.6% 11.5% 11.8% 12.1% 12.4%
Healthcare 18.0% 16.4% 11.6% 14.9% 13.4% 17.0% 14.4% 14.9% 15.1% 15.4% 15.7%
U.S. Multi-Industry
Transportation 20.7% 19.2% 18.5% 22.1% 18.2% 14.6% 18.3% 17.7% 18.0% 18.2% 18.4%
Energy Infrastructure 15.7% 15.8% 15.5% 18.7% 17.7% 17.9% 17.5% 17.3% 17.4% 17.5% 17.4%
NBCU 20.2% 18.5% 11.1% 15.1% 17.9% 19.0% 16.0% 17.3% 18.8% 19.8% 19.7%
C&I 8.2% 3.1% 1.6% 4.4% 4.8% 3.8% 3.7% 4.4% 5.2% 5.7% 5.8%
Total GE Industrial 16.6% 15.6% 14.3% 16.3% 16.3% 16.8% 16.0% 16.1% 16.6% 16.9% 16.9%
59
November 6, 2009
Exhibit 97
GE Industrial Income Statement
GE Industrial Income Statement CAGR CAGR
$M FY07 FY08 1Q09 2Q09 3Q09 4Q09E FY09E FY10E FY11E FY12E FY13E '06/08E '09/13E
Sales of goods and services 99,796 112,014 24,022 26,012 25,125 27,534 102,766 101,625 108,740 115,656 122,171 11.6% 4.4%
Other income 3,371 1,965 479 80 476 150 1,185 1,050 1,155 1,236 1,322 -7.7% 2.8%
GECS earnings, cont ops 12,417 7,774 961 349 133 190 1,562 1,475 3,568 6,341 7,232 -12.8% 46.7%
Total Revenue 115,584 121,753 25,462 26,441 25,734 27,873 105,512 104,150 113,462 123,233 130,725 9.0% 5.5%
COGS 73,485 83,273 18,009 18,780 18,563 20,370 75,788 74,855 80,118 85,220 90,032 12.9% 4.4%
Interest and other financial 1,993 2,153 376 348 352 362 1,438 1,485 1,523 1,563 1,608 13.6% 2.8%
SG&A 14,148 14,401 3,364 3,556 3,714 3,739 14,380 13,900 14,198 14,274 14,931 5.7% 0.9%
Total Costs 89,626 99,827 21,749 22,684 22,629 24,471 91,606 90,240 95,840 101,056 106,572 11.8% 3.9%
EBT, cont ops 25,958 21,926 3,713 3,757 3,105 3,402 13,906 13,910 17,623 22,177 24,154 -1.3% 14.8%
Taxes (2,794) (3,427) (842) (897) (654) (500) (2,893) (3,109) (3,514) (3,959) (4,230)
Earnings, cont ops 23,164 18,499 2,871 2,860 2,451 2,902 11,013 10,801 14,109 18,218 19,924 -3.7% 16.0%
less: GECS earnings, cont. ops (12,417) (7,774) (961) (349) (133) (190) (1,562) (1,475) (3,568) (6,341) (7,232)
Industrial earnings, cont. ops 10,747 10,725 1,910 2,511 2,318 2,712 9,451 9,326 10,541 11,877 12,691 4.9% 7.6%
Preferred dividends - (75) (75) (75) (75) (75) (300) (300) (300) (300) (300)
Minority interest (707) (410) (39) 5 3 2 (29) (255) (330) (384) (391)
Industrial earnings, to common 10,040 10,240 1,796 2,441 2,246 2,639 9,122 8,771 9,911 11,193 12,000 5.9% 7.1%
GE shares 10,218 10,098 10,564 10,609 10,638 10,652 10,616 10,662 10,485 10,251 10,006 -1.4% -1.5%
GE Industrial EPS, cont. ops 0.98 1.01 0.17 0.23 0.21 0.25 0.86 0.82 0.95 1.09 1.20 7.5% 8.7%
Gross profit 26,311 28,741 6,013 7,232 6,562 7,163 26,977 26,770 28,621 30,437 32,139 8.2% 4.5%
Gross margin 26.4% 25.7% 25.0% 27.8% 26.1% 26.0% 26.3% 26.3% 26.3% 26.3% 26.3%
SG&A as % of sales 14.2% 12.9% 14.0% 13.7% 14.8% 13.6% 14.0% 13.7% 13.1% 12.3% 12.2%
Operating profit 12,163 14,340 2,649 3,676 2,848 3,424 12,597 12,870 14,423 16,163 17,208 10.9% 8.1%
Operating profit margin 12.2% 12.8% 11.0% 14.1% 11.3% 12.4% 12.3% 12.7% 13.3% 14.0% 14.1%

U.S. Multi-Industry
60
November 6, 2009
Exhibit 98
GECS Income Statement
GE Capital Services Income Statement CAGR CAGR
Revenue
CLL 27,267 26,742 5,578 5,219 4,668 4,670 20,135 18,096 19,030 18,717 19,069 1.7% -1.4%
Real Estate 7,021 6,646 975 1,013 982 986 3,956 3,905 4,412 5,031 5,512 15.1% 8.6%
GE Money 24,769 25,012 4,747 4,883 4,878 4,993 19,501 18,496 17,358 15,514 14,687 13.2% -6.8%
GECAS 4,839 4,901 1,144 1,192 1,150 1,202 4,688 4,772 5,035 5,219 5,376 6.1% 3.5%
EFS 2,405 3,707 644 490 483 505 2,122 2,062 2,179 2,330 2,429 49.3% 3.4%
Corporate items and elims 5,635 4,279 1,342 634 585 550 3,111 2,364 2,329 2,388 2,484 -7.2% -5.5%
Total Revenue 71,936 71,287 14,430 13,431 12,746 12,906 53,513 49,694 50,343 49,199 49,556 7.8% -1.9%
Costs and Expenses

Interest 22,706 25,116 5,121 4,468 4,128 4,249 17,966 15,388 13,858 12,588 12,535 18.7% -8.6%
Operating and admin 18,311 17,352 3,648 3,324 3,137 3,031 13,140 11,864 12,540 12,836 13,081 2.6% -0.1%
Costs of goods sold 628 1,517 224 164 181 186 755 736 777 831 866 -17.0% 3.5%
Contracts, insur & annuity 3,647 3,421 773 823 785 809 3,190 3,175 3,135 3,092 3,051 0.0% -1.1%
Provision for losses 4,431 7,518 2,336 2,817 2,868 2,533 10,554 8,920 6,776 3,633 2,760 56.7% -28.5%
Impairments 100 1,403 300 200 575 350 1,425 1,200 700 300 200
D&A 8,126 9,330 2,181 1,947 2,069 2,039 8,236 8,111 8,146 8,198 8,294 19.8% 0.2%
Minority interest 209 231 46 17 8 10 81 72 120 120 120 -1.5% 10.3%
Total Costs 58,158 65,888 14,629 13,760 13,751 13,206 55,346 49,466 46,052 41,598 40,907 15.1% -7.3%
Earnings
EBT 13,778 5,399 (199) (329) (1,005) (300) (1,833) 228 4,291 7,601 8,650
Tax benefit (expense) (1,361) 2,375 1,160 678 1,138 500 3,476 1,319 (604) (1,140) (1,297)
Earnings, continuing ops 12,417 7,774 961 349 133 200 1,643 1,547 3,688 6,461 7,352 -12.8% 45.5%
Gain (loss), discont ops (2,116) (719) (4) (193) 40 32 (125) 76 31 13 5
Net Earnings 10,301 7,055 957 156 173 232 1,518 1,623 3,719 6,474 7,357 -18.6% 48.4%
Dividend to GE 7,291 2,351 - - - - - 1,263 4,834 8,416 8,829

Payout ratio 71% 33% 0% 0% 0% 0% 0% 78% 130% 130% 120%
GE common shares 10,218 10,098 10,564 10,609 10,638 10,652 10,616 10,662 10,485 10,251 10,006 -1.4% -1.5%
Implied EPS 1.01 0.70 0.09 0.01 0.02 0.02 0.14 0.15 0.35 0.62 0.73 -17.5% 50.0%
Implied EPS, cont. ops 1.22 0.77 0.09 0.03 0.01 0.02 0.16 0.15 0.35 0.62 0.73 -11.5% 47.1%
Pre-provn earnings, pre-tax 18,209 12,917 2,137 2,488 1,863 2,233 8,721 9,148 11,067 11,234 11,410 -6.2% 7.0%
Pre-provn earnings, after-tax 16,848 15,292 3,297 3,166 3,001 2,733 12,197 10,467 10,464 10,094 10,112 7.3% -4.6%
Year-over-Year Growth
Total Revenue 17.3% -0.9% -20.0% -29.4% -30.8% -18.2% -24.9% -7.1% 1.3% -2.3% 0.7%
Net Earnings -3.3% -31.5% -60.0% -93.6% -90.6% -39.5% -78.5% 6.9% 129.1% 74.1% 13.6%

U.S. Multi-Industry
61
November 6, 2009
Exhibit 99
GECS Balance Sheet
GECS Balance Sheet CAGR CAGR
Cash and equivalents 9,439 37,486 45,240 50,017 56,898 69,455 69,455 46,460 28,408 15,665 15,301 73.6% -31.5%
Investment securities 44,941 41,236 41,783 45,168 52,723 51,932 51,932 48,886 46,018 43,318 40,777 -6.8% -5.9%
Inventories 63 77 65 73 79 83 83 91 89 97 102 19.4% 5.5%
Financing receivables - net 384,067 372,456 355,036 359,478 348,518 341,548 341,548 310,360 280,474 253,632 254,594 6.7% -7.1%
Other receivables 22,078 18,636 17,728 18,719 18,625 13,311 13,311 16,411 14,605 14,586 15,299 -7.3% 3.5%
PP&E, net 63,746 64,097 58,190 58,649 58,712 58,376 58,376 57,529 57,806 57,985 58,980 5.2% 0.3%
Goodwill 25,427 25,365 24,437 27,315 28,184 28,325 28,325 28,896 29,478 30,072 30,678 5.6% 2.0%
Other intangibles - net 4,509 3,613 3,416 4,009 3,838 3,857 3,857 3,935 4,014 4,095 4,178 7.3% 2.0%
Other assets 83,392 85,721 88,180 85,646 87,941 86,311 86,311 79,229 72,369 66,232 66,400 20.2% -6.3%
Assets of discont ops 8,823 1,659 1,464 1,462 1,533 1,380 1,380 905 594 390 256
Businesses held for sale - 10,556 - 232 1,263 632 632 39 2 0 0
Total assets 646,485 660,902 635,539 650,768 658,314 655,210 655,210 592,742 533,858 486,072 486,565 8.1% -7.2%
Short-term borrowings 192,420 193,533 175,676 173,458 160,938 164,014 164,014 156,067 150,239 146,903 149,252 5.7% -2.3%
Accounts payable 14,714 13,882 11,718 12,401 12,501 10,732 10,732 10,676 10,172 9,883 10,268 0.4% -1.1%
Long-term borrowings 308,502 321,068 317,412 329,129 347,415 340,467 340,467 292,442 243,250 204,457 205,276
Contracts, insur losses & annuity 34,359 34,369 33,946 32,831 32,948 32,586 32,586 31,175 29,826 28,535 27,300 -0.6% -4.3%
Other liabilities 26,522 32,090 23,846 24,886 21,021 23,948 23,948 21,224 19,602 17,968 18,051 24.6% -6.8%
Deferred income taxes 9,099 8,533 9,051 6,773 9,434 9,534 9,534 9,798 9,677 9,449 9,190 -18.6% -0.9%
Businesses held for sale - 636 - 196 143 129 129 84 55 36 24
Liabilities of discon ops 1,692 1,243 1,165 1,305 1,279 1,023 1,023 419 172 70 29
Total liabilities 587,308 605,354 572,814 580,979 585,679 582,432 582,432 521,886 462,993 417,302 419,390 9.0% -7.9%
Minority interest 1,501 2,269 1,969 1,921 1,977 1,888 1,888 1,606 1,419 1,267 1,143 7.9% -11.8%
Capital stock 11 11 11 11 11 11 11 11 11 11 11
Investment securities 110 (3,097) (3,733) (2,176) (478) (478) (478) (478) (478) (478) (478)
Currency translation adj 7,472 (1,258) (4,307) 494 1,409 1,409 1,409 1,409 1,409 1,409 1,409
Cash flow hedges (727) (3,134) (2,438) (1,884) (1,894) (1,894) (1,894) (1,894) (1,894) (1,894) (1,894)
Benefit plans (105) (367) (359) (376) (374) (374) (374) (374) (374) (374) (374)
Total accumulated gains - net 6,750 (7,856) (10,837) (3,942) (1,337) (1,337) (1,337) (1,337) (1,337) (1,337) (1,337)
Additional paid-in capital 12,564 18,069 27,570 27,569 27,568 27,568 27,568 27,568 28,879 28,879 28,879 20.1% 1.2%
Retained earnings 38,351 43,055 44,012 44,230 44,416 44,648 44,648 43,008 41,892 39,950 38,479 10.0% -3.6%
Total shareowners' equity 57,676 53,279 60,756 67,868 70,658 70,890 70,890 69,250 69,445 67,503 66,031 -0.8% -1.8%
Total liabilities and equity 646,485 660,902 635,539 650,768 658,314 655,210 655,210 592,742 533,858 486,072 486,565 8.1% -7.2%
Balance Sheet Metrics
Total Debt 500,922 514,601 493,088 502,587 508,353 504,480 504,480 448,509 393,489 351,360 354,529 9.9% -8.4%
Net Debt 491,483 477,115 447,848 452,570 451,455 435,025 435,025 402,049 365,081 335,696 339,228 7.4% -6.0%
Total Capital 549,159 530,394 508,604 520,438 522,113 505,915 505,915 471,299 434,526 403,199 405,259 6.5% -5.4%
Gross Receivables 388,305 377,781 360,743 366,078 355,871 348,976 348,976 316,176 285,160 257,853 258,658 6.9% -7.2%
Avg Gross Receivables 359,570 383,043 369,266 363,418 360,982 352,427 363,379 332,576 300,668 271,507 258,255
TCE 27,740 24,301 32,903 36,544 38,636 38,708 38,708 36,419 35,953 33,336 31,176
Net Charge-offs 3,698 5,358 1,569 1,914 1,918 2,223 7,624 9,809 7,435 3,793 2,721
Loan Loss Reserve 4,238 5,325 5,707 6,600 7,353 7,428 7,428 5,816 4,686 4,221 4,064
Total Debt to Capital 91% 97% 97% 97% 97% 100% 100% 95% 91% 87% 87%
Net Debt to Capital 89% 90% 88% 87% 86% 86% 86% 85% 84% 83% 84%
Net Debt to Equity 8.5 9.0 7.4 6.7 6.4 6.1 6.1 5.8 5.3 5.0 5.1
U.S. Multi-Industry
TCE/TA 4.5% 3.8% 5.4% 5.9% 6.2% 6.2% 6.2% 6.5% 7.2% 7.4% 6.9%
TCE + LLR / TA 5.2% 4.7% 6.4% 7.0% 7.3% 7.4% 7.4% 7.5% 8.1% 8.3% 7.8%
LLR rate % 1.09% 1.41% 1.58% 1.80% 2.07% 2.13% 2.13% 1.84% 1.64% 1.64% 1.57%
NCO rate % 1.03% 1.40% 1.76% 2.11% 2.13% 2.42% 2.10% 2.95% 2.47% 1.40% 1.05%
Effective interest rate 4.9% 4.9% 4.2% 3.6% 3.3% 3.2% 3.5% 3.2% 3.3% 3.4% 3.6%
Book value / share 5.64 5.28 5.75 6.40 6.64 6.66 6.68 6.50 6.62 6.59 6.60
Tangible book value / share 2.71 2.41 3.11 3.44 3.63 3.63 3.65 3.42 3.43 3.25 3.12
ROA pre-tax 2.1% 0.8% -0.1% -0.2% -0.6% -0.2% -0.3% 0.0% 0.8% 1.6% 1.8%
ROA 2.0% 1.2% 0.6% 0.2% 0.1% 0.1% 0.2% 0.2% 0.7% 1.3% 1.5%
ROE pre-tax 23.9% 10.1% -1.4% -1.9% -5.7% -1.6% -2.6% 0.3% 6.2% 11.3% 13.1%
ROE 21.5% 14.6% 6.6% 2.1% 0.8% 1.1% 2.3% 2.2% 5.3% 9.6% 11.1%
ROTCE 44.8% 32.0% 12.1% 3.8% 1.4% 2.0% 4.2% 4.2% 10.3% 19.4% 23.6%
62
November 6, 2009
Exhibit 100
Industrial segments YoY growth rates, quarterly
1Q09 2Q09 3Q09 4Q09E 1Q10E 2Q10 3Q10E 4Q10E
Tech Infrastructure -0.2% -10.9% -10.8% -7.9% -5.5% -2.6% 0.3% 2.4%
Energy Infrastructure 6.7% -1.0% -8.7% -17.3% -12.8% -8.0% -2.5% 3.4%
C&I -22.4% -20.1% -18.4% -5.0% 2.0% 4.0% 5.0% 6.0%
NBCU -1.7% -8.2% -19.6% -8.0% -3.0% 5.0% 6.0% 6.0%
Total Industrial segments -0.9% -8.2% -12.4% -11.1% -6.9% -2.9% 0.7% 3.6%
Disclosure Appendix
Valuation Methodology
We prefer Price to Forward Earnings relative to the S&P500 (rel P/FE) due to its predictive NTM results in
quintile analysis across companies and time periods and its long-term stability for mature businesses.
We believe it is appropriate for investors to consider fair value for multi-industry companies on the basis of
longer term "recovering" earnings—for our companies we believe an average of 2011 and 2012 EPS should
represent recovering early to mid-cycle earnings potential. This essentially represents EPS from mid-2011
to mid-2012. We discount the earnings 1 year back to mid-2010 so that our target price represents our view
of expected stock price 12-months hence. Our target prices are derived with the following formula: [EPS x
long-term rel P/FE x S&P500 long-term P/FE + 0.75 yr x dividend ] / (1 + cost of equity)^0.75 yr.
See Exhibit 101 for a summary of the walk from our EPS estimates to target prices.
Exhibit 101
Valuation summary
2011E/12E Rel SPX Abs undisc. Cost of discounted Mkt price Implied
Ticker EPS P/FE P/FE P/FE target price equity Div target price 11/4/2009 Upside Rating
GE Industrial 1.02 1.05 15.00 15.75 16 8.9% 0.40 15.40
GE Capital 0.49 nm nm 8.00 4 8.9% - 3.65
GE Total 1.51 19 14 34.2% O

U.S. Multi-Industry
Risks
For GE Industrials: Besides generally deteriorating macro conditions, key risks for GE's Industrial
businesses include order cancellations and order rate declines, aero and energy cycle weakness, healthcare
reform, falling government/municipal spending on infrastructure, depressed advertising spending (for
NBCU), and falling energy investment due to low commodity prices. Excess capacity and low utilization
may drive additional pricing pressure.
For GE Capital: Key risks include rising net charge-off rates, rising asset impairment write-downs, lowered
ability to generate tax benefits, and the potential for increasing government regulation of financial
institutions which may constrict asset and leverage levels.
63
SRO REQUIRED DISCLOSURES
• References to "Bernstein" relate to Sanford C. Bernstein & Co., LLC, Sanford C. Bernstein Limited, and Sanford C. Bernstein, a unit of
AllianceBernstein Hong Kong Limited, collectively.
• Bernstein analysts are compensated based on aggregate contributions to the research franchise as measured by account penetration,
productivity and proactivity of investment ideas. No analysts are compensated based on performance in, or contributions to, generating
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• Bernstein rates stocks based on forecasts of relative performance for the next 6-12 months versus the S&P 500 for stocks listed on the
U.S. and Canadian exchanges, versus the MSCI Pan Europe Index for stocks listed on the European exchanges (except for Russian
companies), versus the MSCI Emerging Markets Index for Russian companies and stocks listed on emerging markets exchanges outside
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otherwise specified. We have three categories of ratings:
Outperform: Stock will outpace the market index by more than 15 pp in the year ahead.
Market-Perform: Stock will perform in line with the market index to within +/-15 pp in the year ahead.
Underperform: Stock will trail the performance of the market index by more than 15 pp in the year ahead.
Not Rated: The stock Rating, Target Price and estimates (if any) have been suspended temporarily.
• As of 11/04/2009, Bernstein's ratings were distributed as follows: Outperform - 45.3% (0.0% banking clients); Market-Perform - 46.7%
(0.0% banking clients); Underperform - 8.0% (0.0% banking clients); Not Rated - .0% (0.0% banking clients). The numbers in parentheses
represent the percentage of companies in each category to whom Bernstein provided investment banking services within the last twelve
(12) months.
• Accounts over which Bernstein and/or their affiliates exercise investment discretion own more than 1% of the outstanding common stock of
the following companies GE / General Electric Co.
• The following companies are or during the past twelve (12) months were clients of Bernstein, which provided non-investment banking-
securities related services and received compensation for such services GE / General Electric Co.
• An affiliate of Bernstein received compensation for non-investment banking-securities related services from the following companies GE /
General Electric Co.
12-Month Rating History as of 11/04/2009
Ticker Rating Changes
GE M (IC) 02/05/09 O (DC) 07/21/04
Rating Guide: O - Outperform, M - Market-Perform, U - Underperform, N - Not Rated

Rating Actions: IC - Initiated Coverage, DC - Dropped Coverage, RC - Rating Change
OTHER DISCLOSURES
A price movement of a security which may be temporary will not necessarily trigger a recommendation change. Bernstein will advise as and
when coverage of securities commences and ceases. Bernstein has no policy or standard as to the frequency of any updates or changes to its
coverage policies. Although the definition and application of these methods are based on generally accepted industry practices and models,
please note that there is a range of reasonable variations within these models. The application of models typically depends on forecasts of a
range of economic variables, which may include, but not limited to, interest rates, exchange rates, earnings, cash flows and risk factors that are
subject to uncertainty and also may change over time. Any valuation is dependent upon the subjective opinion of the analysts carrying out this
valuation.
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November 6, 2009

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

GE: "Valumagination" - Upgrading to Outperform on Reduced

O – Outperform, M – Market-Perform, U – Underperform, N – Not Rated

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

We're upgrading GE for 6 reasons:

160 159.1 158.9 1.40 1.30

154 153.3 0.80

152 151.2 0.60

SCB Consensus SCB Consensus

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

EPS, Forecast, annual

0.98 0.77 0.62

Source: Company reports and Bernstein estimates

Source: Company reports and Bernstein estimates

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

9.0% '09E equipment margin $10.3B '10E services profit

$3.1B '10E equipment profit

Source: Bernstein estimates

Provision rate vs NTM NCO rate

Source: Company reports and Bernstein estimates

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

GECS ROE and ROA

GECS ROA (left axis) GECS ROE (right axis)

Source: Company reports and Bernstein estimates

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

Healthcare 2,851 2,273 2,360 2,540 2,772 0.27

CLL 1,805 706 543 1,142 2,059 0.20

Consolidated GE earnings 18,014 10,765 10,319 13,599 17,654 1.72

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

500 CAGR: -8.8%

300 366 421 449

Commercial Paper (avg) Other Debt (avg)

Source: Company reports, Bernstein estimates

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

Source: Company reports, Bernstein estimates

16% 14.3% 14.6%

12% 10.5% 10.7% 10.7%

Source: Company reports, Bernstein estimates

Commercial Real Estate Risk

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

CRE Equity Book revenue/assets

Source: Company reports, Bernstein estimates

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

Other intangibles, net 3.8

3) GE Capital earnings growth from $1.5B in 2010 to $3.7B in 2011.

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

GE Capital EPS, annual forecast

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

GECS: ROE, annual

TCE/TA Net debt / equity

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

GECS: Return on segment assets, annual

0.5% 0.3% 0.3%

GECS: Total ROA, annual

1.5% 1.5% 1.5%

0.5% 0.2% 0.2%

Source: Company reports, Bernstein estimates

Steven E. Winoker (Senior Analyst) • steven.winoker@bernstein.com • +1-212-756-4294

Source: Company reports, Bernstein estimates