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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 Closing Price 14.19 1046.50 Target Price 19.00 18.00 YTD Rel. Perf. -28.3% EPS 2008A 1.78 65.47 2009E 1.01 1.00 60.96 2010E 0.97 1.04 76.85 2008A 8.0 16.0 P/E 2009E 14.0 17.2 2010E 14.6 13.6 Yield 2.8% 2.4%

Ticker GE OLD SPX

Rating O M

CUR USD

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). − 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.

U.S. Multi-Industry

November 6, 2009

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

• 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.

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• 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.
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

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November 6, 2009

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

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 Revenue Estimates: SCB vs. Consensus Exhibit 2 EPS Estimates: SCB vs. Consensus

GE Revenue
160 158 156 $B 154 152 150 148 146 2009E SCB 2010E Consensus 2011E 151.2 155.7 154.9 153.3 159.1 158.9

GE EPS
1.40 1.20 1.01 0.99 1.00 0.80 $ 0.60 0.40 0.20 0.00 2009E SCB 2010E Consensus 2011E 0.97 0.92 1.30

1.20

U.S. Multi-Industry

Source: Thomson One Analytics and Bernstein analysis

Source: Thomson One Analytics and Bernstein analysis

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November 6, 2009

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

Exhibit 3 Annual EPS Forecast Breakout Between Industrial and GE Capital

2.50 2.00 1.50 0.84 1.00 0.50 2005 2006 2007 0.98 1.22 0.98

EPS, Forecast, annual

$/share

0.73 0.77 0.35 0.16 0.15 0.82 0.95 1.09 1.20 0.62

0.79

0.88

1.01

0.86

2008 2009E GE Industrial

2010E GE Capital

2011E

2012E

2013E

Source: Company reports and Bernstein estimates

Exhibit 4 GE Consolidated Revenue Forecast

GE Consolidated Revenue
200,000 180,000 160,000 140,000 120,000 100,000 80,000 151,568 172,488 155,721 151,167 159,133 182,515 165,747 172,184

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60,000 40,000 20,000 2006 2007 2008 2009E 2010E 2011E 2012E 2013E

Source: Company reports and Bernstein estimates

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November 6, 2009

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

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 $47B -$8B $31B +$8B $39B '09E equipment backlog 2/3 converts to revenue in '10E '10E revenue from backlog '10E revenue from in-year orders '10E equipment revenue 2010E services revenue and profit $36B 5% $38B '09E services revenue 10E services revenue growth '10E services revenue 2010E total revenue and profit $77B total equip & svcs revenue $13.4B Total equip & svcs profit 17.4% Total equip & svcs margin

27.0% '10E services margin (no change YoY) $10.3B '10E services profit

9.0% '09E equipment margin -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%
20 03 20 04 20 06 20 02 20 07 20 00 19 98 19 99 20 01 20 08 20 05 20 09 E 20 10 E 20 11 E 20 12 E 20 13 E

NTM NCO rate
Source: Company reports and Bernstein estimates

Provision rate

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November 6, 2009

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

Exhibit 7 GECS ROE and ROA

GECS ROE and ROA
3% 25%

2%

20%

2%

15%

ROA

1%

10%

1%

5%

0% 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E

0%

GECS ROA (left axis)
Source: Company reports and Bernstein estimates

GECS ROE (right axis)

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ROE

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November 6, 2009

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

Exhibit 8 Earnings walk, from segment profit to earnings for GE Industrial and GE Capital
GE Industrial Aviation Healthcare Transportation Enterprise Solutions & other Energy Infrastructure NBCU Consumer & Industrial Total Industrial segment profit Industrial corp items & elims Industrial interest expense Industrial minority interest Industrial EBT Industrial tax expense Industrial minority interest Preferred dividends Industrial earnings to common GE Capital Segment profit CLL Consumer Real Estate GECAS Energy Financial Services Total GECS segment profit GECS corp items & elims GECS earnings, cont ops Consolidated GE earnings
Source: Company reports, Bernstein estimates

2008 3,684 2,851 962 655 6,080 3,131 365 17,728 (1,833) (2,153) 410 14,152 (3,427) (410) (75) 10,240

2009E 3,993 2,273 805 402 6,340 2,437 363 16,614 (2,861) (1,438) 29 12,344 (2,893) (29) (300) 9,122

$M 2010E 3,939 2,360 729 372 5,958 2,734 446 16,536 (2,871) (1,485) 255 12,435 (3,109) (255) (300) 8,771 $M 2010E 543 2,388 (1,705) 792 259 2,276 (729) 1,547 10,319

2011E 4,374 2,540 830 411 6,380 3,119 564 18,218 (2,970) (1,523) 330 14,055 (3,514) (330) (300) 9,911

2012E 4,746 2,772 915 460 6,809 3,417 650 19,767 (2,752) (1,563) 384 15,836 (3,959) (384) (300) 11,193

per share 2012E 0.46 0.27 0.09 0.04 0.66 0.33 0.06 1.93 (0.27) (0.15) 0.04 1.54 (0.39) (0.04) (0.03) 1.09 per share 2012E 0.20 0.25 0.05 0.13 0.06 0.68 (0.05) 0.63 1.72

Segment profit

2008 1,805 3,664 1,144 1,194 825 8,632 (858) 7,774 18,014

2009E 706 1,903 (1,490) 950 221 2,290 (648) 1,643 10,765

2011E 1,142 2,083 (441) 1,007 327 4,117 (430) 3,688 13,599

2012E 2,059 2,560 503 1,305 583 7,009 (548) 6,461 17,654

2) We forecast impairments of just $1.2B in 2010 and see reduced risk of large scale writedowns and major equity dilution due to GE Capital.

U.S. Multi-Industry

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 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

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November 6, 2009

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

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 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.

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November 6, 2009

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

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.

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November 6, 2009

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

Exhibit 9 Financing receivables, forecast

450 400 350 300 250 200 150 100 50 -

360 271 229 116 131 143 163 191 290 312

383

363

CAGR: -8.2% 333 301 272 258

$B

20 04

20 02

20 05

19 98

20 03

19 99

20 01

20 06

20 07

20 00

20 08

20 09 E

20 10 E

Source: Company reports, Bernstein estimates

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
600 500 400 CAGR: -8.8%

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$B

300 200 100 1998 1999 2000 2001 2002 2003 2004 2005 2006 78 79 94 92 107 96 117 106 150 101 207 255 273 303

366

421

449

428

20 11 E

374

20 12 E

326

20 13 E

307

82

82

86

91

97 2007

86

61

49

47

47

46

2008 2009E 2010E 2011E 2012E 2013E

Commercial Paper (avg)
Source: Company reports, Bernstein estimates

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

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November 6, 2009

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

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% 6% 5% 4% 3% 2% 1% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 2.1% 2.3% 2.4% 1.7% 3.0% 3.9% 4.3% 5.2% 5.2% 4.5% 3.8% 6.2% 6.5% 7.2% 7.4% 6.9%

Source: Company reports, Bernstein estimates

Exhibit 12 GECS (TCE + LLR) / Receivables forecast
16% 14% 12% 9.5% 10% 7.5% 8% 6.8% 8.2% 8.2% 10.5% 10.7% 10.7% 9.7% 8.2% 7.8% 13.2% 13.4% 14.3% 14.6% 13.6%

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6% 4% 2% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E

Source: Company reports, Bernstein estimates

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

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November 6, 2009

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

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% Revenue/assets 12% 10% 8% 6% 4% 2% 0% 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 4.7% 5.0% 11.7% 12.2% 11.5% 9.6% 8.4% 6.2% 10.0%

11.5%

Source: Company reports, Bernstein estimates

U.S. Multi-Industry

As of the 3rd quarter, GECS assets are broken down in the following exhibit.

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November 6, 2009

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

Exhibit 14 GECS Balance Sheet Asset Breakdown
As of 3Q'09 Cash Investments U.S. Corporate State and muni RMBS CMBS Other ABS Foreign corp Foreign govies U.S. govies Retained interests Equity securities Goodwill CLL Consumer Real Estate Energy Financial Services GECAS Other intangibles, net ** Estimated
Source: Company reports, Bernstein estimates

56.9 52.7 23.4 2.1 3.4 2.5 2.7 1.7 3.4 3.6 8.4 0.8 28.2 13.6 11.1 1.2 2.1 0.2 3.8

Financing receivables, gross CLL Americas Europe Asia Other Consumer Non-US resi mortgages Non-US install & revolve US install & revolve Non-US auto Other Real Estate Energy Financial Services GECAS Other (securitized) Allowance for losses Other receivables

348.5 147.5 92.3 40.4 14.1 0.8 136.4 61.3 25.2 22.3 14.4 13.2 45.5 8.3 15.0 3.1 (7.4) 18.6

PP&E GECS land, buildings, etc** Leased aircraft** Leased vehicles** Leased rolling stock** Leased other** Other assets Real Estate equity investments Associated companies** Other investments** Derivative instruments** Other assets** Assets held for sale Assets of discontinued ops Total assets

58.7 4.1 29.6 16.6 2.7 5.7 87.9 32.9 19.2 13.4 12.4 10.0 1.2 1.5 658.3

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.

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November 6, 2009

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

Exhibit 15 We forecast $0.37 of EPS tailwind from GE Capital earnings in 2011

GE Capital EPS, annual forecast
1.40 1.20 1.00 0.98 0.77 0.52 0.56 0.46 0.35 0.16 0.15 0.78 0.84 0.77 0.62 0.73 1.22

$/share

0.80 0.60 0.40 0.20 0.32 0.38 0.44

19 97

19 98

20 03

20 05

19 99

20 01

20 02

20 04

20 06

20 07

20 08

20 00

20 11 E 20 12 E

20 09 E 20 10 E

Source: Company reports, Bernstein estimates

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

20 13 E

14

November 6, 2009

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

Exhibit 16 Our ROE forecast well below historical average levels

GECS: ROE, annual
30% 25% 21% 20% 15% 10% 5% 5% 0%
19 97 19 98 20 06 20 07 19 99 20 00 20 03 20 04 20 05 20 08 20 01 20 02 20 11 E 20 12 E 20 09 E 20 10 E 20 13 E

24% 22% 19% 14% 22% 19% 16% 17% 14% 11% 9% 19% 22% 1997-2008 avg: 19.1%

3%

2%

Source: Company reports, Bernstein estimates

Exhibit 17 GE Capital's equity buffer is expected to get stronger…
TCE/TA

Exhibit 18 … as it lowers leverage below historic levels
Net debt / equity

8.0% 7.0% 6.0% 5.0% 4.0% 5.2% 5.2% 4.3% 3.9% 4.5%

7.4% 7.2% 6.9% 6.5% 6.2%

10 9.0 9 8 6.8 7 6 5 4
20 03 20 04 20 05 20 06 20 07 20 0 20 8 09 20 E 10 20 E 11 20 E 12 20 E 13 E
Source: Company reports, Bernstein estimates

8.5 7.6 7.0 6.5 6.1 5.8 5.3 5.0 5.1

3.8%

U.S. Multi-Industry

3.0% 2.0%
20 03 20 04 20 05 20 06 20 07 20 0 20 8 09 20 E 10 20 E 11 20 E 12 20 E 13 E
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.

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November 6, 2009

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

Exhibit 19 Our return on segment assets forecast is consistent with the historical average

GECS: Return on segment assets, annual
2.5% 2.0% 2.0% 1.5% 1.0% 0.5% 0.0%
19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 07 20 04 20 05 20 06 20 08 20 11 E 20 12 E 20 13 E 20 09 E 20 10 E

2.3% 2.3% 2.1% 1.8% 1.3% 1.5% 1.4% 1.4% 1.4% 1.0% 1.3%

1997-2008 avg: 1.64% 1.8% 1.5%

0.8% 0.3% 0.3%

Source: Company reports, Bernstein estimates

Exhibit 20 Our total ROA forecast is consistent with the historical average

GECS: Total ROA, annual
2.5% 2.0% 2.0% 1.5% 1.0% 0.7% 0.5% 0.0% 0.2% 0.2% 1.3% 1.5% 1.4% 1.4% 1.4% 1.0% 1.5% 1.4% 1.5% 1.2% 1.3% 1.8% 1.5% 1997-2008 avg: 1.45%

U.S. Multi-Industry

19 97

20 01

19 99

19 98

20 00

20 02

20 03

20 04

20 05

20 06

20 07

20 08

20 09 E 20 10 E

Source: Company reports, Bernstein estimates

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.

20 11 E 20 12 E

20 13 E

16

November 6, 2009

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

Exhibit 21 We believe provision expense will peak in 2009

Provisions expense
12 10 8
$B

10.6 8.9 7.5 6.8 4.4 3.2 3.1 3.6 2.8

6 4 2 19 99 20 00 20 03 19 98 20 04 20 05 20 07 19 97 20 02 20 06 20 08 20 01 20 09 E 20 10 E 20 11 E 20 12 E 20 11 E 20 12 E 20 13 E 20 13 E

1.4

1.6

1.7

2.0

2.5

3.1

3.8

3.9

Source: Company reports, Bernstein estimates

Exhibit 22 We model GECS' reserve rate to gradually decline from 2009 highs

LLR as % of receivables
2.5% 2.0% 1.5% 1.0% 0.5% 0.0%
19 98 19 97 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08

2.0% 1.6% 1.6% 1.7% 1.7% 1.7% 1.7% 1.5% 1.4% 1.2% 1.1% 1.4%

2.1% 1.8% 1.6% 1.6% 1.6%

U.S. Multi-Industry

Source: Company reports, Bernstein estimates Note: Pre-2005 LLR reserves are adjusted to reflect change in write-off policy for Consumer Finance in 2004

20 09 E 20 10 E

17

November 6, 2009

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

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 8
$B

10.6

9.8 8.9 7.4

7.5 7.6 5.4 3.1 3.7 4.4

6.8

6 4 2 2006

3.8

3.6 2.7 2.8 2.7

2007

2008 Provisions

2009E

2010E

2011E

2012E

2013E

NTM Net charge-offs

Source: Company reports, Bernstein estimates

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% 0.5% 0.0%
20 05 20 04 19 98 19 99 20 00 20 01 20 02 20 03 20 06 20 07 20 08 20 11 E 20 12 E 20 09 E 20 10 E 20 13 E

U.S. Multi-Industry

NTM NCO rate
Source: Company reports, Bernstein estimates

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

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November 6, 2009

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

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% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%

Last updated by Bernstein Bank Team, 9/11/09 GE CLL is 99.9% senior secured, vs. ~60% for the global commercial lending market

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008 2009E 2010E 2011E 2012E

GE CLL
Source: Company reports, FDIC, Bernstein Bank Team, Bernstein estimates

Bank C&I

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

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November 6, 2009

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

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% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2005 2006

Last updated by Bernstein Bank Team, 9/11/09

GE CRE has 1.5% exposure to construction and development, vs. 32% for U.S. banks

2007

2008 GE CRE

2009E Bank CRE

2010E

2011E

2012E

Source: Company reports, FDIC, Bernstein Bank Team, Bernstein estimates

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 Bank Team, 9/11/09

U.S. Multi-Industry

4.0% 2.0% 0.0% 2005 2006 2007 2008

2009E

2010E

2011E

2012E

GE U.S. install & revolve
Source: Company reports, FDIC, Bernstein Bank Team, Bernstein estimates

Bank Credit Card

20

November 6, 2009

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

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% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 3.88%

3.58% 2.79% 1.47% 1.53% 1.80% 2.12% 2.11%

1.41%

1.37%

1.42%

2.13%

2.42%

1.68% 1.13% 2Q07 1.10% 3Q07 1.02% 4Q07 1.25% 1Q08 1.08% 2Q08 1.14% 3Q08 4Q08

1.76%

1Q09

2Q09

3Q09

4Q09E

Nonearning receivables rate

Total NCO rate

Source: Company reports, FDIC, Bernstein Bank Team, Bernstein estimates

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% 26% 26% 23% 26% 27% 26% 26% 30% 25% 20% 15% 4.5 4.8 4.7 4.5 4.7 4.9 4.7 4.5 3.9 3.5 3.7 10% 5% 0% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09E
Operating & admin exp (% rev)

U.S. Multi-Industry

Operating & admin exp ($B)

6 5 4 3 2 1 -

28% 26% 26%

28%

29%

3.4

Source: Company reports, Bernstein estimates

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November 6, 2009

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

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

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

Exhibit 30 No business segment accounts for more than 14% of GE's revenues

Exhibit 31 GE sells into our most highly diversified set of end markets

GE Business Segments
Energy FS 2% GECAS 3% Real Estate 4% Money 13%
Corp 3% Transport Enterprise Solutions 3% 3%
Tech Infra 25%

Industrial Mfg 5% Other Constr & RE 7%

GE End Markets

Other (Transport Water) 5%

Healthcare 10% Aviation 11%

Energy & Process 22% Civil Aviation 9%

CLL 14%
Capital Finance 38%

Energy 15% C&I 6% NBCU 9%
Energy Infra 18%

Govt & Military Aero 4%

Media 9%

Coml Lending 15% Health care 10% Consum Lending 14%

Oil & Gas 5% 2008 Revenue = $183B
Source: Company reports and Bernstein analysis

2008 Revenue = $183B

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

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

Exhibit 32 We expect Capital to contribute about 32% of overall GE sales and 15% of profit in 2009

Exhibit 33 The infrastructure businesses will deliver most of the sales, growth and profitability outside of capital

GE Industrial vs. Capital Mix
140% 120% 100% 80% 60% 40% 20% 0% -23% -20% -40% Sales ('09) GE Industrial Profit ('09) GE Capital Corporate 67% 1% 32% 108%

GE Industrial Segment Mix
100% 0% 10% 21% Percentage of Total 80% 60% 40% 20% 0% Sales ('08) NBCU Growth ('04-'08) Profit ('08) Assets ('08) Capex ('08) 41% 44% 46% 45% 46% 15% 34% 26% 18% 26% 2% 4% 9% 4%

15%

34%

35%

40%

Technology Infrastructure

Energy Infrastructure 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 10 8 6 4 2 11.2 9.1 8.8 9.9 12.0

U.S. Multi-Industry

8.4

9.1

10.0

10.2

$B

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

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

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 Emerging market growth / natl airlines/OEMs Big OEM backlog (& urbanization/infrastructure) Pass growth, flight hours pressured Parking aging fleets; capacity reduction Airline bankruptcies, fuel costs & flight efficiency Aircraft intelligence, systems/solutions, noise Entering late part of cycle (new platforms) Defense budget pressures/growth (next gen) Aftermarket outsourcing; Financing challenges Energy & Water, O&G, Energy Finl Svcs Energy demand & emerging market growth Environmental impact (emissions, carbon taxes, fuel efficiency) Long term nuclear renaissance Renewable targets & investments (wind, solar, biomass) Water scarcity Aging infrastructure (gen, transmission, dist) O&G harder to find, refine leading to more drilling, more pipelines, more refineries and tech intensive Financing volatility Consumer & Industrial Deep and broad housing downturn Industrial investment cycling down Cost / energy efficiency focus Shift to LED lighting Globalization - sourcing, localization and emerging market / infrastructure growth Industry consolidation
Source: Company and industry reports, Bernstein research

Transportation Emerging market growth (global trade secular trend) Aging fleets Fuel costs, emissions focus Productivity, reliability Rail intelligence Truck headwinds (fuel, congest, labor)

Enterprise Solutions Emerging mkts, urbanization (non-res construction cycles) Regulation & codes Global safety & security concerns Energy demand, efficiency, green Productivity

Healthcare Aging population Emerging market growth (& rising incomes / quality of life) Prevalence of disease

NBCU Content, distribution proliferation Broadcast decline, cable growth (DVRs, on demand etc.) Film extension beyond box office

Increasing cost of healthcare Theme park licensing (pricing transparency, quality of care) Regulation (efficacy / efficiency) Reimbursement pressures Non-invasive technologies, information sharing, preventatives Intl / Digital / channel growth Targeted advertising Cost/productivity

Commercial Fin / Real Estate Credit crunch & capital mkt volatility Lack of asset liquidity Increasing spreads Industry consolidation Increasing regulation Global construction cycle down Industrials also reducing investment

GE Money

U.S. Multi-Industry

Deep and broad housing downturn (and auto / card pressures)

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

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November 6, 2009

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

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% 60% 40% 20% 0% -20% -40% -60% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 -2% -11% -21% -42% 2Q09 -32% 3Q09 33% 16% 35% 67% 54% 39% 33% 11% 4% 5%

Source: Company filings, Bernstein estimates

Exhibit 37 Services orders are relatively low but still positive

Total GE Services Orders Growth
25% 20% 20% 15% 10% 5% 0% 4% 5% 5% 2% 2% 3% 13% 10% 11% 11% 7% 18% 19% 16%

U.S. Multi-Industry

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

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

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

Exhibit 38 We expect the industrial businesses revenue to have a ~4% CAGR from 2009 through 2012

Industrial Revenue Forecast
140 120 100 11.7 17.0 38.6 46.3 2008 80 60 40 20 2009E 2010E 2011E Energy Infrastructure 2012E NBCU C&I 2013E 42.8 42.2 45.8 49.4 52.6 9.8 15.2 36.2 10.2 15.8 34.4 10.9 16.6 36.6 11.5 17.3 38.8 11.9 17.9 41.2

$B

Technology Infrastructure
Source: Company filings, Bernstein analysis and estimates

Exhibit 39 We forecast 2011 to be the rebound year for revenue growth for most of GE's businesses
Industrial Revenue Growth Technology Infrastructure: Aviation Enterprise Solutions Healthcare Transportation Energy Infrastructure NBCU C&I Total Industrial 2007 13.6% 29.2% 12.9% 2.6% 8.8% 21.7% -4.8% -4.1% 10.1% 2008 8.2% 14.4% 5.6% 2.3% 10.9% 25.6% 10.1% -7.3% 11.8% 2009E -7.7% -1.9% -20.9% -9.2% -12.1% -6.2% -10.2% -16.7% -8.5% 2010E -1.3% -0.5% -5.9% 0.5% -6.8% -4.8% 3.7% 4.3% -1.2% 2011E 8.5% 10.0% 7.0% 6.2% 12.0% 6.1% 5.0% 7.0% 7.0% 2012E 7.7% 8.0% 8.0% 7.0% 9.0% 6.1% 4.0% 5.0% 6.4% 2013E 6.5% 5.3% 6.0% 8.0% 7.0% 6.1% 3.5% 3.5% 5.6%

Source: Company filings, Bernstein analysis and estimates

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

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

Exhibit 40 U.S. industrial end market indicators have shown improvement in July and August

Industrial Segment Healthcare Energy Aviation Transportation C&I

Industrial production indicator Medical equipment & supplies Engines, turbines, power trans equip Aerospace products & parts Railroad eqip, ships & boats Household appliances

Apr 3.7%

May 3.8%

YoY growth Jun Jul 3.0% 2.6%

Aug 2.0%

Sep 2.2%

-30.0% -31.5% -33.1% -29.5% -32.8% -32.9% -3.5% -4.7% -6.7% -4.3% -4.2% 21.0% -9.9% -1.9%

-21.8% -19.9% -18.7% -13.3% -12.0% -8.8% -10.7% -18.5% -16.4% -10.5% MoM growth Jun Jul -1.1% -6.2% -0.3% 2.1% -8.7% 0.5% -1.0% 1.7% 1.4% 1.4%

Industrial Segment Healthcare Energy Aviation Transportation C&I

Industrial production indicator Medical equipment & supplies Engines, turbines, power trans equip Aerospace products & parts Railroad eqip, ships & boats Household appliances

Apr 1.4% -1.4% -1.7% -1.4% 7.6%

May 0.5% -3.2% -1.8% 1.0% -0.3%

Aug 2.6% 1.8% -0.3% 1.6% 2.9%

Sep -0.5% -1.9% 2.0% -1.0% 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

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

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 1.05

1960 1957 1953 1990 1969 2001

1.00

0.95

1981 1973 2008

0.90

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 85 80 75 70 70 65

U.S. Multi-Industry

Capacity Utilization (%)

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

Recession
Source: Global Insight and Bernstein analysis

Capacity Utilization

Jan-09

29

November 6, 2009

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

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
Source: Bernstein analysis, Company reports, and management discussions

Infrastructure % of Profit

U.S. Multi-Industry

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 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

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

Exhibit 44 Infrastructure Construction Spending Per City Across Countries Shows Wide Variation (Constant $ 2000)
# Cities with Populations > 750K in 2007 Cities W/Popln Country Infra. Spend per city > 750K Con. Spend ($B) ($B) 8 319 39.9 1 11 10.6 4 29 7.2 6 10 1.6 5 32 6.3 7 39 5.6 7 35 4.9 11 57 5.2 54 232 4.3 1 2 2.3 12 27 2.3 24 55 2.3 141 186 1.3 16 18 1.1 59 45 0.8 >300 341 >656 1,436

Exhibit 45 2007 Infrastructure Construction Opportunity Sensitivity at Increased Spending Levels is Significant (constant $ 2000)
Sensitivity At Increased Spending Levels

Japan UAE Germany Canada Australia France U.K. South Korea U.S. Singapore Indonesia Brazil China Russia India Other World

Current @ US Infra Con Spend Per City Spend Brazil 55 65 China 186 381 Russia 18 43 India 45 159 Indonesia 27 32 10% of Other 38 81 Sub-Total 368 761 % Increase 107% Countries 1,068 1,088 Total 1,436 1,850 % Increase 29%

@ UK Spend Per @ German City Spend Per City 130 175 761 1,029 86 117 319 431 65 88 162 219 1,523 2,059
313% 1,088 2,614 459% 1,088 3,151

82%

119%

Source: UN DESA, World Population Database, 2007 Revision, Global Insight and Bernstein Analysis

Source: UN DESA, Global Insight 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

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

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 400 Infrastructure Construction Spending (constant $B 2005) 350 300 250 200 150 100 50 0 Asian Crisis US, Japan Recession Europe Downturn Global Recession

Japan

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

19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 E
U.S. China South Korea U.K. Germany Australia

32

November 6, 2009

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

Exhibit 47 Infrastructure Construction Spending (constant 2005 billions $)
Global Recession 400 Infrastructure Construction Spending (constant $B 2005) 350 300 250 200 150 100 50 0 2008 2009E Japan South Korea Australia
Source: Global Insight and Bernstein analysis

2010E

2011E U.S. U.K. Singapore

2012E China Germany

2013E

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 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.

U.S. Multi-Industry

33

November 6, 2009

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

Exhibit 48 In 2008, >25% of GE Industrial's revenue came from emerging regions
GE Industrial Rev from Emerging Regions, 2008 India 2% E. Europe 2% Mid East/Africa 9% Lat Am 6% Other Emerg. Mkts 5%

Exhibit 49 We expect this to increase to >35% by 2011

GE Industrial Rev from Emerging Regions, 2011E China 7% India 3% E. Europe 4% Mid East/Africa 11%

China 4%

Other 72%

Other 61% Other Emerg. Mkts 7%

Lat Am 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.
Exhibit 50 At $17B, Healthcare is now less than half diagnostic imaging with clinical systems another 25%
GE Energy (ex O&G)
T&D 4% IGCC 2% Env Svcs 2%

Exhibit 51 We forecast declining revenues in 2009 and 10 before recovering in 2011 and growing faster thereafter

Energy Infra: Energy (ex-O&G)
35 30 25 19% 18% 17% 16% 15% 14% 13% 12% 11% 10%
2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E

U.S. Multi-Industry

Nuclear 4%
Wind 19% Gas Turbines 20%

Energy Services 41%

20 15 10

Opt & Control 4%

Revenue 2008 Revenue = $29B
Source: Company reports

Margin

Source: Company reports and Bernstein analysis

Segment Margin

Gas Engines 4% $B

34

November 6, 2009

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

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% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -20% -33% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09E 1Q10E 2Q10E 3Q10E 4Q10E
Source: Company reports, Bernstein estimates

56% 39% 30% 18% 6% 0% -5% -15% -25% 5% 15% 20%

36%

36%

Exhibit 53 We expect Energy sales to bottom in 4Q09, lagging orders by 2 quarters

Total Energy sales growth
50% 40% 35% 24% 15% 16% 9% 3% -1% -11% -20% -30% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09E 1Q10E 2Q10E 3Q10E 4Q10E -8% -15% -2% 5% 21% 38% 29%

U.S. Multi-Industry

30% 20% 10% 0% -10% -20%

Source: Company reports, Bernstein estimates

35

November 6, 2009

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

Exhibit 54 Total GE Energy
50% Sales growth (2 qtr lag)

Exhibit 55 GE Energy Equipment
70% Sales growth (2 qtr lag)

Exhibit 56 GE Energy Services
25% Sales growth (2 qtr lag) 20% 15% 10% 5% 0% -5% -10% -15% -10% 0% R = 30% 10% 20% 30%
2

40% 30% 20% 10% 0% -10% -20% R = 84%
2

60% 50% 40% 30% 20% 10% 0% R = 57%
2

-50%

0%

50%

100%

0%

50%

100%

150%

-20%

Orders growth
Source: Company reports, Bernstein analysis Note: orders 1Q07 to 1Q09, sales 3Q07 to 3Q09

Orders growth
Source: Company reports, Bernstein analysis Note: orders 2Q06 to 3Q07, sales 2Q07 to 3Q08

Orders growth
Source: Company reports, Bernstein analysis 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%

U.S. Multi-Industry

Source: McCoy, Global Insight, Bernstein estimates

19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 0 20 8 09 E 20 10 E 20 11 E 20 12 E 20 13 E
Actual Predicted

36

November 6, 2009

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

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 R Square Adjusted R Square Standard Error Observations ANOVA df Regression Residual Total Coefficients Intercept Sales of electricity to ultimate consumers Industrial production--Utilities
Source: McCoy, Global Insight, Bernstein estimates

0.61 0.38 0.30 0.30 20.00

SS 2.00 17.00 19.00 0.92 1.52 2.44 Standard Error 0.13 9.61 8.34

MS 0.46 0.09

F 5.14

Significance F 0.02

(0.10) 29.33 (17.32)

t Stat (0.77) 3.05 (2.08)

P-value 0.45 0.01 0.05

Lower 95% (0.37) 9.05 (34.91)

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

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

Exhibit 59 At $17B, Healthcare is now less than half diagnostic imaging with clinical systems another 25%
GE Healthcare
24% Americas DI 20% Intl DI OEC 3% DI

Exhibit 60 We forecast declining revenues in 2009 and 10 before recovering in 2011 and growing faster thereafter

GE Healthcare Forecast
20 19 18 17 $B 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Segment margin

Life Sciences 7%

HC IT 10% Med Diag 11%

Diagnostic Imaging 47%

16 15 14

~45% US ~34% EMEA ~18% AP ~3% LA

Clinical Systems 25%

13 12 11 10

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 growth 15-20% -3% 10% -7% Positive -21% Sales growth 10% 3% 5-7% 2%

2007 guidance (Dec '06) 2007 actual 2008 guidance (Dec '07) 2008 actual 2009 guidance (Dec '08) 2009YTD through Sep
Source: Company reports

Margin 20% 18% 19% 16%

U.S. Multi-Industry

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).

20 05 20 06 20 07 20 0 20 8 09 E 20 10 E 20 11 E 20 12 E 20 13 E
Revenue Margin

2008 Revenue = $17.4B

38

November 6, 2009

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

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% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% 28.6% 18.1% 13.9% 9.5% 3.2% 10.7% 9.6% 7.0% 4.0% 0.8%

Sales YoY growth

N/A

-3.4% -8.8% 3Q08 4Q08 GE Healthcare 1Q09 Philips Healthcare -11.7% 2Q09 Siemens Healthcare -9.3% 3Q09

Source: Capital IQ, Company reports

U.S. Multi-Industry

Growth is expected to be driven by 1) new products in core segments (especially lower price points); 2) 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

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

Exhibit 63 Equipment and services orders growth

Healthcare Equipment and Services Orders, YoY
15% 10% 5% 1% 0% -1% -5% -6% -10% -11% -15% -15% -20% 1Q08 2Q08 3Q08 4Q08 Equipment
Source: Company reports

13% 8% 8% 9% 8%

-2%

-1% -3%

-13%

1Q09 Services

2Q09

3Q09

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 healthcare expenditures to behave defensively during periods of low GDP growth (Exhibit 65).

U.S. Multi-Industry

40

November 6, 2009

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

Exhibit 64 Global aging and increased life expectancy requiring more care are two of the key secular trends
Aging World Population 18 % of World Popn 60 and Over 16 14 12 10 8 6 4 2 0
19 50 19 60 19 70 19 80 19 90 20 00 20 10 20 20 20 30

Exhibit 65 Health expenditures in aggregate tend to be more resilient to GDP downturns
U.S. Health Expenditures

80 Life Expectancy at Birth 70 60 50 40 30 20 10 0

18% 16% 14% YOY % Growth 12% 10% 8% 6% 4% 2% 0% GDP Growth National Health Expenditure Growth

% 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. 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.

U.S. Multi-Industry

1

Contiguous Body Parts Imaging technical fee reduction

19 63 19 68 19 73 19 78 19 83 19 88 19 93 19 98 20 0 20 3 08 20 E 13 E

41

November 6, 2009

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

Exhibit 66 Estimate of earnings impact of proposed $4B medical device tax
GE Healthcare 2010E total sales ($M) % of sales medical devices 2010E medical device sales ($M) % of sales equipment GE Healthcare 2010E medical device equipment sales ($M) % of sales in U.S. GE Healthcare 2010E medical device equip U.S. sales ($M) Total U.S. medical device market size ($M) GE Healthcare market share implied Proposed tax ($M) Implied tax per year ($M) GE shares, 2010E (M) GE EPS impact, 2010E
Source: Bernstein Medical Devices team, Company reports, Bernstein estimates

15,411 83% 12,791 60% 7,675 45% 3,454 114,000 3.0% 4,000 121 10,654 (0.01)

<< Excludes Healthcare IT and Life Sciences (17%)

<< Estimate of Class II and III medical device market at about 80% of $143B

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 Medicaid (State funding) Cobra Healthcare IT National Inst. Of Health Community health centers Comparative Effectiveness Research Prevention and Wellness Veteran's Health Admin $B 87.0 25.0 19.0 10.0 1.5 1.1 1.0 1.0 Impact for GE? More patient throughput More patient throughput EMR adoption Equipment sales Equipment sales

Equipment sales

U.S. Multi-Industry

Source: Philips Healthcare, Bernstein research

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 reorganized, 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

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

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

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

Exhibit 68 Services drive most of Aviation profitability

Exhibit 69 Aviation forecast pauses through the cycle then rebounds

GE Aviation
Other (B&GA, Unison) 4%

$B

Military 20%

Coml Engines 25%

1/2 Civil 1/2 Military

Systems 12%

Coml Engine Services 39%

25 23 21 19 17 15 13 11 9 7 5

GE Aviation Forecast

24% 22% 20% 18% 16% 14% 12% 10% Segment margin

2008 Revenue = $19.2B

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.
Exhibit 70 GE and CFM have taken share leadership from Pratt Exhibit 71 Management has focused on building its service base

Commercial Engines Installed Base
25 Commercial Engines (000s) 20 15 10 5 0 1996 GE CFM 2006 EA PW 2016E RR IAE
$B 90 80 70 60 50 40 30 20 10 0

U.S. Multi-Industry

20 05 20 06 20 07 20 0 20 8 09 20 E 10 20 E 11 20 E 12 20 E 13 E

Revenue

Margin

GE Coml Customized Svc Agr't Backlog
Coverage Increasing from 47% in 2006 by 2011

2001

2006

2008

2011E

Source: ACAS, company reports

Source: Company reports

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November 6, 2009

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

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 35,000,000 Engine Hours 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 1998 1999 0.7% 2000 4.1% 2001 -3.9% 2002 -0.3% 2003 1.3% 2004 9.0% 2005 5.4% 2006 4.3% 2007 10.3% Pratt & Whitney GE Rolls-Royce Intl. Aero Engines CFM

Overall Growth:

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

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

Exhibit 73 GE is better positioned given its more recent, fuel efficient aircraft.

Exhibit 74 This is a key reason why GE aircraft are faring better than the market.

GE and CFM % of World Fleet Based on Fleet Fuel Efficiency (PAS, 2009)
1500 Percentage of World Fleet 80% 70% 60% 50% 40% 30% 20% 10% 0% Retirement Candidates Redeployment Best In Class Candidates 1000 500 0 -500 -1000

World Fleet Deliveries/Removals (1/08-5/09)

GE and CFM Deliveries
Source: Ascend, GE Aviation

All Other Removals

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

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

Exhibit 75 International passenger traffic growth is getting less bad in recent months

International Revenue Passenger Kilometers, YoY change
4% 1.9% 2% 0% YoY Change -2% -4% -6% -8% -10% -10.1% -12% -9.3% -2.9% -4.6% -4.6% -5.6% -7.2% -1.3% -3.1% -2.9% -1.1% 1.3%

-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% 8% Int'l RPK growth, YoY 6% 4% 2% 0% -2% -4% -6% -8% -10%
06 08 08 06 06 06 05 07 07 07 07 08 08 09 09 2Q 3Q 1Q 4Q 2Q 4Q 1Q 2Q 3Q 4Q 1Q 3Q 4Q 1Q 2Q Ju l/A ug

50% 40% 30% 20% 10% 0% -10% correl = 55% -20% -30% -40% -50% GE Aviation sales growth, YoY

U.S. Multi-Industry

RPK growth
Source: IATA, Company reports, Bernstein analysis

GE Aviation growth

47

November 6, 2009

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

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).
Exhibit 77 GE commercial engine deliveries have been weak… Exhibit 78 … while military deliveries have been very strong

Comm'l engines deliveries, growth
20% 15% 10% YoY growth YoY growth 5% 0% -5% -10% -15% -20% -25% 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09E -14% -19% -9% -15% 11%

Military engines deliveries, growth
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09E 16% 10% 67% 50% 49% 78%

15%

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% 20% YoY growth 15% 10% 10% 5% 0% -5% 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 -2% 4Q08 1Q09 -1% 2Q09 3Q09E 6% 3% 0% 22% 22% 18% 11% 22% 23%

U.S. Multi-Industry

Source: Company reports, Bernstein analysis

48

November 6, 2009

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

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 Technology Infrastructure: Aviation Enterprise Solutions Healthcare Transportation Energy Infrastructure NBCU C&I Total Industrial Total Industrial after Corp 2007 18.4% 19.2% 15.6% 18.0% 20.7% 15.7% 20.2% 8.2% 16.6% 14.6% 2008 17.6% 19.1% 14.7% 16.4% 19.2% 15.8% 18.5% 3.1% 15.6% 14.0% 2009E 17.5% 21.2% 11.6% 14.4% 18.3% 17.5% 16.0% 3.7% 16.0% 13.2% 2010E 17.5% 21.0% 11.5% 14.9% 17.7% 17.3% 17.3% 4.4% 16.1% 13.3% 2011E 17.8% 21.2% 11.8% 15.1% 18.0% 17.4% 18.8% 5.2% 16.6% 13.9% 2012E 18.0% 21.3% 12.1% 15.4% 18.2% 17.5% 19.8% 5.7% 16.9% 14.6% 2013E 18.1% 21.2% 12.4% 15.7% 18.4% 17.4% 19.7% 5.8% 16.9% 14.7%

Source: Company filings, Bernstein analysis and estimates

U.S. Multi-Industry

49

November 6, 2009

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

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 3.5 3.0 2.5 $B 2.0 1.5 1.0 0.5 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 1.5 includes ~$2B in planned restructuring charges 1.8 3.5 2.7 3.6 3.4 3.3 3.3

Source: Company filings, Bernstein analysis and estimates

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 2.0 1.5 $B 1.0 0.5 (0.5) -0.12 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 0.33 0.88 0.76 0.24 0.76 1.28 1.89 2.17

U.S. Multi-Industry

Source: Company filings, Bernstein analysis and estimates

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

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

Exhibit 83 GE Infrastructure backlog
GE Industrial Backlog
200 180 160 140 120 100 80 60 40 20 -

172 B

171 B

170 B

174 B

$ Billion

121

121

122

127

51 4Q08

50 1Q09 equipment total

48 2Q09 csa total

47 3Q09

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 $47B -$8B $31B +$8B $39B '09E equipment backlog 2/3 converts to revenue in '10E '10E revenue from backlog '10E revenue from in-year orders '10E equipment revenue 2010E services revenue and profit $36B 5% $38B '09E services revenue 10E services revenue growth '10E services revenue 2010E total revenue and profit $77B total equip & svcs revenue $13.4B Total equip & svcs profit 17.4% Total equip & svcs margin

U.S. Multi-Industry

27.0% '10E services margin (no change YoY) $10.3B '10E services profit

9.0% '09E equipment margin -1.0% '10E margin degredation 8.0% '10E equipment margin $3.1B '10E equipment profit
Source: Bernstein estimates

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

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

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% 25% 20% 15% 10% 5% 0% -5% -10% 21% 16% 24% 21% 15% 5% 23% 25% 14% 25% 22% 25% 22%

-6% 2006 2007 2008 GE Industrial 2009E 2010E 2011E 2012E

GE Consolidated

Source: Company filings, Bernstein analysis and estimates

Exhibit 86 We forecast GECS to return to having positive tax expense in 2011+

Tax Expense, Forecast, annual
6 5 4 3 2 $B 1 (1) (2) (3) (4) 2005 2006 2007 2008 GECS
Source: Company filings, Bernstein analysis and estimates

2.7 1.2

2.6 1.4

2.8 3.4 1.4 (2.4) (1.3) (3.5) 2.9 3.1

4.0 3.5 0.6 1.1

4.2 Expense 1.3

U.S. Multi-Industry

Benefit 2009E 2010E 2011E 2012E 2013E

GE Industrial

52

November 6, 2009

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

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 2001: General Electric $126B revenue Acquisitions
2003: GE Medical ($1.3B revenue) 2004: Amersham ($2.5B revenue) 2004-05: Vivendi Universal ($7.1B revenue) 2006: IDX ($0.6B revenue) 2007: Smith Aero ($2.4B revenue)

Divestitures
2005: Genworth ($10B revenue) 2005: Insurance Solutions ($6B revenue)

+

-

2006: Momentive ($2.5B revenue) 2007: GE Plastics ($6.6B revenue)

2007: General Electric $173B revenue Size of GE in 2001 Total organic growth
Source: Company reports and Bernstein estimates

~$50B revenue

FX $4B

~$60+ B revenue FX in 2007

Revenue from acquisitions Key acquisitions

Revenue from divestitures 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:

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November 6, 2009

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

• 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 $0.51/share.
Exhibit 88 GE Enterprise Solutions valuation
GE Enterprise Year Solutions EBIT ($B) 2007 0.7 2008 0.7 2009E 0.5 2010E 0.4 2011E 0.5 2012E 0.5 Average GE shares (bil.) Value ($/share) Median peer Price/EBIT 7.4 6.5 10.4 9.6 8.8 7.8 Implied value ($B) 5.1 4.5 4.9 4.3 4.2 4.0 4.5 10.6 0.42

Exhibit 89 GE Consumer & Industrial valuation
GE C&I Year EBIT ($B) 2007 1.0 2008 0.4 2009E 0.4 2010E 0.4 2011E 0.6 2012E 0.6 Average GE shares (bil.) Value ($/share) Median peer Price/EBIT 9.1 9.7 13.4 10.6 8.2 8.1 Implied value ($B) 9.4 3.6 4.9 4.7 4.6 5.2 5.4 10.6 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.

U.S. Multi-Industry

For each of the twelve valuation estimates, we used the median multiple on current market prices for the 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 3

We do not cover ROK. ETN is covered by Dan Dowd's U.S. Machinery & Capital Goods team. Exposures are based on 2007 sales breakdowns

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November 6, 2009

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

Exhibit 90 NBCU Valuation Excluding Acquisition Premium

NBCU Valuation (EXCLUDING ACQUISITION PREMIUM)
EV/EBITDA

2009E

EV/EBIT EV/sales P/E EV/EBITDA

valuation multiple used

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

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

Exhibit 91 Potential cash from divestitures
Implied Value / Value 2010 share ($) ($B) P/EBIT 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 Consumer & Industrial 0.41 4.3 9.7 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

Adjustments

Decrease 20%, below average player Decrease 20%, below average player, share loss

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

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November 6, 2009

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

Exhibit 92 Total revenue by segment in 2008

Exhibit 93 Expected revenue by segment in 2012E

GE Rev by Segment, 2008
NBCU 9% C&I 6% Tech Infra 26%
NBCU 11%

GE Rev by Segment, 2012E
C&I 7% Ent Solns 2% Tech Infra 28%

Capital Finance 38%

Energy Infra 21%

Capital Finance 28%

Energy Infra 24%

Total = $180.6B
Source: Company reports and Bernstein estimates

Total = $163.7B
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 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.

U.S. Multi-Industry

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November 6, 2009

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

Exhibit 94 Our valuation multiple for GE Capital is conservative relative to peer large banks

Bank BofA Citi Wells Fargo JPMorgan Average GE Capital

First Call Avg Target Price 20.55 4.95 32.03 52.94

EPS 2011 2.20 0.39 2.91 4.82

EPS 2012 2.95 0.58 3.69 6.14

2011/12 EPS Implied target 2011/12 avg P/E 2.58 8.0 0.49 10.2 3.30 9.7 5.48 9.7 9.4 8.0

Source: First Call, Bernstein estimates

Financial Statements
Exhibit 95 GE Consolidated Income Statement
GE Income Statement $M except EPS Goods and Services Financial Revenue Other/corporate Total Revenue Industrial COGS Provisions for losses GECS Interest Expense Insurance segment expense Consolidated COGS Gross Profit SG&A and Other Op Exp. EBIT Depreciation & Amortization EBITDA Non-financial interest exp EBT Taxes Tax Rate Minority Interest Earnings, cont ops Preferred dividend Earnings, cont ops to common Earnings, discont ops Net Income Net Income to common Average shares GE Industrial EPS, cont. ops GECS EPS, cont. ops Total EPS, cont ops to common EPS to common Dividends Per Share Dividend Payout Ratio Year-over-Year Growth Total Revenue EBIT Earnings, cont ops to common EPS, cont ops to common 13.8% 13.5% 16.1% 18.1% 5.8% -27.0% -19.8% -18.8% -9.0% -50.7% -36.6% -40.0% -16.6% -52.2% -48.3% -51.3% -20.0% -59.9% -46.9% -50.2% -12.5% 6.5% -25.1% -26.4% -14.7% -45.6% -40.2% -43.2% -2.9% 19.3% -4.1% -4.6% 5.3% 41.6% 31.8% 34.0% 4.2% 27.2% 29.8% 32.8% 3.9% 8.9% 9.6% 12.3% FY07 101,578 66,301 4,609 172,488 (73,125) (4,431) (22,706) (3,469) (103,731) 68,757 (40,173) 28,584 10,275 38,859 (1,056) 27,528 (4,155) 15.1% (916) 22,457 22,457 (249) 22,208 22,208 10,218 0.98 1.22 2.20 2.17 1.12 52% FY08 113,593 67,008 1,914 182,515 (83,772) (7,518) (25,116) (3,213) (119,619) 62,896 (42,021) 20,875 11,492 32,367 (1,093) 19,782 (1,052) 5.3% (641) 18,089 (75) 18,014 (679) 17,335 17,260 10,098 1.01 0.77 1.78 1.72 1.23 72% 1Q09 24,420 13,088 903 38,411 (18,066) (2,336) (5,121) (746) (26,269) 12,142 (9,337) 2,805 2,731 5,536 (206) 2,599 318 -12.2% (85) 2,832 (75) 2,757 (21) 2,736 2,661 10,564 0.17 0.09 0.26 0.26 0.32 122% 2Q09 26,204 12,797 81 39,082 (18,804) (2,817) (4,468) (779) (26,868) 12,214 (8,933) 3,281 2,504 5,785 (185) 3,096 (219) 7.1% (12) 2,865 (75) 2,790 (194) 2,596 2,521 10,609 0.23 0.03 0.26 0.24 0.32 129% 3Q09 25,643 12,161 (5) 37,799 (18,548) (2,868) (4,128) (732) (26,276) 11,523 (9,354) 2,169 2,658 4,827 (194) 1,975 484 -24.5% (5) 2,454 (75) 2,379 40 2,419 2,344 10,638 0.21 0.01 0.22 0.23 0.11 47% 4Q09E 27,684 12,356 390 40,429 (20,370) (2,533) (4,249) (809) (27,961) 12,468 (9,359) 3,109 2,624 5,733 (187) 2,922 0.0% (8) 2,914 (75) 2,839 2,839 2,764 10,652 0.25 0.02 0.27 0.27 0.10 38% FY09E 103,951 50,402 1,369 155,721 (75,788) (10,554) (17,966) (3,066) (107,374) 48,347 (36,983) 11,364 10,517 21,881 (772) 10,592 583 -5.5% (110) 11,065 (300) 10,765 (175) 10,590 10,290 10,616 0.86 0.16 1.01 1.00 0.84 84% FY10E 102,675 47,330 1,162 151,167 (74,855) (8,920) (15,388) (3,175) (102,338) 48,829 (35,275) 13,554 10,418 23,972 (819) 12,735 (1,790) 14.1% (327) 10,619 (300) 10,319 10,319 10,019 10,662 0.82 0.15 0.97 0.97 0.51 53% FY11E 109,895 48,014 1,223 159,133 (80,118) (6,776) (13,858) (3,135) (103,887) 55,245 (36,054) 19,192 10,464 29,655 (725) 18,466 (4,117) 22.3% (450) 13,899 (300) 13,599 13,599 13,299 10,485 0.95 0.35 1.30 1.30 0.67 51% FY12E 116,892 46,811 2,044 165,747 (85,220) (3,633) (12,588) (3,092) (104,532) 61,215 (36,805) 24,410 10,564 34,974 (853) 23,557 (5,099) 21.6% (504) 17,954 (300) 17,654 17,654 17,354 10,251 1.09 0.62 1.72 1.72 0.83 48% FY13E 123,493 47,072 1,618 172,184 (90,032) (2,760) (12,535) (3,051) (108,378) 63,806 (37,231) 26,575 10,717 37,292 (883) 25,691 (5,528) 21.5% (511) 19,653 (300) 19,353 19,353 19,053 10,006 1.20 0.73 1.93 1.93 0.96 50% -8.6% -8.8% -1.4% 7.5% -11.5% -2.1% -7.3% 10.7% 19% 16.3% 16.7% -1.5% 8.7% 47.1% 17.5% 18.0% 3.3% -12% -3.5% 15.8% -13.8% -3.3% 46.7% 15.4% CAGR '06/08 10.9% 9.0% -18.6% 9.7% 12.0% 56.7% 18.7% 0.0% 14.7% 1.8% 8.8% -9.0% 16.6% -1.9% 2.6% -9.5% -48.4% CAGR '09/13E 4.4% -1.7% 4.3% 2.5% 4.4% -28.5% -8.6% -0.1% 0.2% 7.2% 0.2% 23.7% 0.5% 14.3% 3.4% 24.8%

U.S. Multi-Industry

Source: Company reports and Bernstein estimates and analysis

58

November 6, 2009

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

Exhibit 96 GE Industrial Segment Forecast
GE Segment Detail $M Segment Revenue Technology Infrastructure Aviation Enterprise Solutions Healthcare Transportation Energy Infrastructure NBCU C&I Total GE Industrial Segment Revenue Growth Technology Infrastructure Aviation Enterprise Solutions Healthcare Transportation Energy Infrastructure NBCU C&I Total GE Industrial Segment Profit Technology Infrastructure Aviation Enterprise Solutions Healthcare Transportation Energy Infrastructure NBCU C&I Total GE Industrial Segment Profit Growth Technology Infrastructure Aviation Enterprise Solutions Healthcare Transportation Energy Infrastructure NBCU C&I Total GE Industrial Segment Margin Technology Infrastructure Aviation Enterprise Solutions 18.4% 19.2% 15.6% 18.0% 20.7% 15.7% 20.2% 8.2% 16.6% 17.6% 19.1% 14.7% 16.4% 19.2% 15.8% 18.5% 3.1% 15.6% 17.3% 22.4% 11.2% 11.6% 18.5% 15.5% 11.1% 1.6% 14.3% 17.4% 20.0% 9.8% 14.9% 22.1% 18.7% 15.1% 4.4% 16.3% 17.1% 21.4% 11.4% 13.4% 18.2% 17.7% 17.9% 4.8% 16.3% 18.1% 20.8% 14.0% 17.0% 14.6% 17.9% 19.0% 3.8% 16.8% 17.5% 21.2% 11.6% 14.4% 18.3% 17.5% 16.0% 3.7% 16.0% 17.5% 21.0% 11.5% 14.9% 17.7% 17.3% 17.3% 4.4% 16.1% 17.8% 21.2% 11.8% 15.1% 18.0% 17.4% 18.8% 5.2% 16.6% 18.0% 21.3% 12.1% 15.4% 18.2% 17.5% 19.8% 5.7% 16.9% 18.1% 21.2% 12.4% 15.7% 18.4% 17.4% 19.7% 5.8% 16.9% 7.9% 15.0% 12.4% -2.7% 20.9% 36.9% 6.4% 6.6% 14.4% 3.4% 14.3% -0.9% -6.7% 2.8% 26.2% 0.8% -64.7% 5.3% 6.0% 39.4% -33.8% -22.2% -14.6% 19.0% -45.1% -75.0% -3.4% -10.8% 1.0% -44.4% -21.0% -2.1% 13.5% -40.7% -19.6% -8.7% -8.0% 16.3% -44.9% -19.9% -30.6% 11.0% 13.5% 148.9% 4.0% -16.3% -12.2% -26.5% -18.9% -17.3% -15.6% -10.4% 176.2% -13.8% -8.3% 8.4% -37.3% -20.3% -16.3% 4.3% -22.2% -0.4% -6.3% -1.0% -1.3% -6.6% 3.8% -9.5% -6.0% 12.2% 22.6% -0.5% 10.2% 11.0% 9.8% 7.6% 13.9% 7.1% 14.1% 26.6% 10.2% 9.0% 8.5% 10.7% 9.1% 10.2% 6.7% 9.5% 15.2% 8.5% 7.0% 4.8% 8.6% 10.1% 8.2% 5.5% 3.0% 5.3% 5.7% 7,883 3,222 697 3,056 936 4,817 3,107 1,034 16,841 8,152 3,684 691 2,851 962 6,080 3,131 365 17,728 1,803 1,080 102 411 217 1,273 391 36 3,503 1,833 923 90 590 236 1,792 539 111 4,275 1,748 970 103 508 177 1,582 732 117 4,179 2,089 1,020 138 764 175 1,693 775 99 4,657 7,473 3,993 433 2,273 805 6,340 2,437 363 16,614 7,399 3,939 404 2,360 729 5,958 2,734 446 16,536 8,155 4,374 444 2,540 830 6,380 3,119 564 18,218 8,892 4,746 492 2,772 915 6,809 3,417 650 19,767 9,517 4,974 534 3,052 990 7,181 3,518 684 20,901 5.6% 14.7% 5.6% -4.7% 11.5% 31.5% 3.6% -38.7% 9.8% 6.2% 5.6% 5.4% 7.6% 5.3% 3.2% 9.6% 17.1% 5.9% 13.6% 29.2% 12.9% 2.6% 8.8% 21.7% -4.8% -4.1% 10.1% 8.2% 14.4% 5.6% 2.3% 10.9% 25.6% 10.1% -7.3% 11.8% -0.2% 11.5% -17.4% -8.8% 2.0% 6.7% -1.7% -22.4% -0.9% -10.9% -6.2% -25.7% -11.7% -11.1% -1.0% -8.2% -20.1% -8.2% -10.8% -6.2% -24.2% -9.3% -22.8% -8.7% -19.6% -18.4% -12.4% -7.9% -5.0% -16.0% -7.0% -15.0% -17.3% -8.0% -5.0% -11.1% -7.7% -1.9% -20.9% -9.2% -12.1% -6.2% -10.2% -16.7% -8.5% -1.3% -0.5% -5.9% 0.5% -6.8% -4.8% 3.7% 4.3% -1.2% 8.5% 10.0% 7.0% 6.2% 12.0% 6.1% 5.0% 7.0% 7.0% 7.7% 8.0% 8.0% 7.0% 9.0% 6.1% 4.0% 5.0% 6.4% 6.5% 5.3% 6.0% 8.0% 7.0% 6.1% 3.5% 3.5% 5.6% FY07 42,801 16,819 4,462 16,997 4,523 30,698 15,416 12,663 101,578 FY08 46,316 19,239 4,710 17,392 5,016 38,571 16,969 11,737 113,593 1Q09 10,436 4,817 913 3,545 1,171 8,239 3,524 2,221 24,420 2Q09 10,555 4,619 918 3,964 1,069 9,577 3,565 2,507 26,204 3Q09 10,209 4,542 904 3,801 970 8,917 4,079 2,438 25,643 4Q09E 11,560 4,897 990 4,485 1,199 9,439 4,076 2,610 27,684 FY09E 42,760 18,875 3,725 15,795 4,409 36,172 15,244 9,776 103,951 FY10E 42,223 18,783 3,504 15,869 4,110 34,448 15,805 10,199 102,675 FY11E 45,824 20,661 3,749 16,853 4,603 36,563 16,596 10,913 109,895 FY12E 49,370 22,314 4,049 18,033 5,017 38,804 17,260 11,458 116,892 FY13E 52,590 23,496 4,292 19,476 5,369 41,181 17,864 11,859 123,493 CAGR '06/08 10.9% 21.6% 9.2% 2.5% 9.8% 23.7% 2.4% -5.7% 10.9% CAGR '09/13E 5.3% 5.6% 3.6% 5.4% 5.0% 3.3% 4.0% 4.9% 4.4%

U.S. Multi-Industry

Healthcare Transportation Energy Infrastructure NBCU C&I Total GE Industrial

Source: Company reports and Bernstein estimates and analysis

59

November 6, 2009

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

Exhibit 97 GE Industrial Income Statement
GE Industrial Income Statement $M Sales of goods and services Other income GECS earnings, cont ops Total Revenue COGS Interest and other financial SG&A Total Costs EBT, cont ops Taxes Earnings, cont ops less: GECS earnings, cont. ops Industrial earnings, cont. ops Preferred dividends Minority interest Industrial earnings, to common GE shares GE Industrial EPS, cont. ops Gross profit Gross margin SG&A as % of sales Operating profit Operating profit margin FY07 99,796 3,371 12,417 115,584 73,485 1,993 14,148 89,626 25,958 (2,794) 23,164 (12,417) 10,747 (707) 10,040 10,218 0.98 26,311 26.4% 14.2% 12,163 12.2% FY08 112,014 1,965 7,774 121,753 83,273 2,153 14,401 99,827 21,926 (3,427) 18,499 (7,774) 10,725 (75) (410) 10,240 10,098 1.01 28,741 25.7% 12.9% 14,340 12.8% 1Q09 24,022 479 961 25,462 18,009 376 3,364 21,749 3,713 (842) 2,871 (961) 1,910 (75) (39) 1,796 10,564 0.17 6,013 25.0% 14.0% 2,649 11.0% 2Q09 26,012 80 349 26,441 18,780 348 3,556 22,684 3,757 (897) 2,860 (349) 2,511 (75) 5 2,441 10,609 0.23 7,232 27.8% 13.7% 3,676 14.1% 3Q09 25,125 476 133 25,734 18,563 352 3,714 22,629 3,105 (654) 2,451 (133) 2,318 (75) 3 2,246 10,638 0.21 6,562 26.1% 14.8% 2,848 11.3% 4Q09E 27,534 150 190 27,873 20,370 362 3,739 24,471 3,402 (500) 2,902 (190) 2,712 (75) 2 2,639 10,652 0.25 7,163 26.0% 13.6% 3,424 12.4% FY09E 102,766 1,185 1,562 105,512 75,788 1,438 14,380 91,606 13,906 (2,893) 11,013 (1,562) 9,451 (300) (29) 9,122 10,616 0.86 26,977 26.3% 14.0% 12,597 12.3% FY10E 101,625 1,050 1,475 104,150 74,855 1,485 13,900 90,240 13,910 (3,109) 10,801 (1,475) 9,326 (300) (255) 8,771 10,662 0.82 26,770 26.3% 13.7% 12,870 12.7% FY11E 108,740 1,155 3,568 113,462 80,118 1,523 14,198 95,840 17,623 (3,514) 14,109 (3,568) 10,541 (300) (330) 9,911 10,485 0.95 28,621 26.3% 13.1% 14,423 13.3% FY12E 115,656 1,236 6,341 123,233 85,220 1,563 14,274 101,056 22,177 (3,959) 18,218 (6,341) 11,877 (300) (384) 11,193 10,251 1.09 30,437 26.3% 12.3% 16,163 14.0% FY13E 122,171 1,322 7,232 130,725 90,032 1,608 14,931 106,572 24,154 (4,230) 19,924 (7,232) 12,691 (300) (391) 12,000 10,006 1.20 32,139 26.3% 12.2% 17,208 14.1% 10.9% 8.1% 5.9% -1.4% 7.5% 8.2% 7.1% -1.5% 8.7% 4.5% 4.9% 7.6% -3.7% 16.0% CAGR 11.6% -7.7% -12.8% 9.0% 12.9% 13.6% 5.7% 11.8% -1.3% CAGR 4.4% 2.8% 46.7% 5.5% 4.4% 2.8% 0.9% 3.9% 14.8% '06/08E '09/13E

Source: Company reports and Bernstein estimates and analysis

U.S. Multi-Industry

60

November 6, 2009

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

Exhibit 98 GECS Income Statement
GE Capital Services Income Statement $M Revenue CLL Real Estate GE Money GECAS EFS Corporate items and elims Total Revenue Costs and Expenses Interest Operating and admin Costs of goods sold Contracts, insur & annuity Provision for losses Impairments D&A Minority interest Total Costs Earnings EBT Tax benefit (expense) Earnings, continuing ops Gain (loss), discont ops Net Earnings Dividend to GE Payout ratio GE common shares Implied EPS Implied EPS, cont. ops Pre-provn earnings, pre-tax Pre-provn earnings, after-tax Year-over-Year Growth Total Revenue Net Earnings 13,778 (1,361) 12,417 (2,116) 10,301 7,291 71% 10,218 1.01 1.22 18,209 16,848 5,399 2,375 7,774 (719) 7,055 2,351 33% 10,098 0.70 0.77 12,917 15,292 (199) 1,160 961 (4) 957 0% 10,564 0.09 0.09 2,137 3,297 (329) 678 349 (193) 156 0% 10,609 0.01 0.03 2,488 3,166 (1,005) 1,138 133 40 173 0% 10,638 0.02 0.01 1,863 3,001 (300) 500 200 32 232 0% 10,652 0.02 0.02 2,233 2,733 (1,833) 3,476 1,643 (125) 1,518 0% 10,616 0.14 0.16 8,721 12,197 228 1,319 1,547 76 1,623 1,263 78% 10,662 0.15 0.15 9,148 10,467 4,291 (604) 3,688 31 3,719 4,834 130% 10,485 0.35 0.35 11,067 10,464 7,601 (1,140) 6,461 13 6,474 8,416 130% 10,251 0.62 0.62 11,234 10,094 8,650 (1,297) 7,352 5 7,357 8,829 120% 10,006 0.73 0.73 11,410 10,112 -1.4% -17.5% -11.5% -6.2% 7.3% -1.5% 50.0% 47.1% 7.0% -4.6% -18.6% 48.4% -12.8% 45.5% 22,706 18,311 628 3,647 4,431 100 8,126 209 58,158 25,116 17,352 1,517 3,421 7,518 1,403 9,330 231 65,888 5,121 3,648 224 773 2,336 300 2,181 46 14,629 4,468 3,324 164 823 2,817 200 1,947 17 13,760 4,128 3,137 181 785 2,868 575 2,069 8 13,751 4,249 3,031 186 809 2,533 350 2,039 10 13,206 17,966 13,140 755 3,190 10,554 1,425 8,236 81 55,346 15,388 11,864 736 3,175 8,920 1,200 8,111 72 49,466 13,858 12,540 777 3,135 6,776 700 8,146 120 46,052 12,588 12,836 831 3,092 3,633 300 8,198 120 41,598 12,535 13,081 866 3,051 2,760 200 8,294 120 40,907 19.8% -1.5% 15.1% 0.2% 10.3% -7.3% 18.7% 2.6% -17.0% 0.0% 56.7% -8.6% -0.1% 3.5% -1.1% -28.5% FY07 27,267 7,021 24,769 4,839 2,405 5,635 71,936 FY08 26,742 6,646 25,012 4,901 3,707 4,279 71,287 1Q09 5,578 975 4,747 1,144 644 1,342 14,430 2Q09 5,219 1,013 4,883 1,192 490 634 13,431 3Q09 4,668 982 4,878 1,150 483 585 12,746 4Q09E 4,670 986 4,993 1,202 505 550 12,906 FY09E 20,135 3,956 19,501 4,688 2,122 3,111 53,513 FY10E 18,096 3,905 18,496 4,772 2,062 2,364 49,694 FY11E 19,030 4,412 17,358 5,035 2,179 2,329 50,343 FY12E 18,717 5,031 15,514 5,219 2,330 2,388 49,199 FY13E 19,069 5,512 14,687 5,376 2,429 2,484 49,556 CAGR '06/08E 1.7% 15.1% 13.2% 6.1% 49.3% -7.2% 7.8% CAGR '09/13E -1.4% 8.6% -6.8% 3.5% 3.4% -5.5% -1.9%

17.3% -3.3%

-0.9% -31.5%

-20.0% -60.0%

-29.4% -93.6%

-30.8% -90.6%

-18.2% -39.5%

-24.9% -78.5%

-7.1% 6.9%

1.3% 129.1%

-2.3% 74.1%

0.7% 13.6%

Source: Company reports and Bernstein estimates and analysis

U.S. Multi-Industry

61

November 6, 2009

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

Exhibit 99 GECS Balance Sheet
GECS Balance Sheet $M Cash and equivalents Investment securities Inventories Financing receivables - net Other receivables PP&E, net Goodwill Other intangibles - net Other assets Assets of discont ops Businesses held for sale Total assets Short-term borrowings Accounts payable Long-term borrowings Contracts, insur losses & annuity Other liabilities Deferred income taxes Businesses held for sale Liabilities of discon ops Total liabilities Minority interest Capital stock Investment securities Currency translation adj Cash flow hedges Benefit plans Total accumulated gains - net Additional paid-in capital Retained earnings Total shareowners' equity Total liabilities and equity Balance Sheet Metrics Total Debt Net Debt Total Capital Gross Receivables Avg Gross Receivables TCE Net Charge-offs Loan Loss Reserve Total Debt to Capital Net Debt to Capital Net Debt to Equity TCE/TA TCE + LLR / TA LLR rate % NCO rate % Effective interest rate Book value / share Tangible book value / share ROA pre-tax ROA ROE pre-tax ROE ROTCE FY07 9,439 44,941 63 384,067 22,078 63,746 25,427 4,509 83,392 8,823 646,485 192,420 14,714 308,502 34,359 26,522 9,099 1,692 587,308 1,501 11 110 7,472 (727) (105) 6,750 12,564 38,351 57,676 646,485 500,922 491,483 549,159 388,305 359,570 27,740 3,698 4,238 91% 89% 8.5 4.5% 5.2% 1.09% 1.03% 4.9% 5.64 2.71 2.1% 2.0% 23.9% 21.5% 44.8% FY08 37,486 41,236 77 372,456 18,636 64,097 25,365 3,613 85,721 1,659 10,556 660,902 193,533 13,882 321,068 34,369 32,090 8,533 636 1,243 605,354 2,269 11 (3,097) (1,258) (3,134) (367) (7,856) 18,069 43,055 53,279 660,902 514,601 477,115 530,394 377,781 383,043 24,301 5,358 5,325 97% 90% 9.0 3.8% 4.7% 1.41% 1.40% 4.9% 5.28 2.41 0.8% 1.2% 10.1% 14.6% 32.0% 1Q09 45,240 41,783 65 355,036 17,728 58,190 24,437 3,416 88,180 1,464 635,539 175,676 11,718 317,412 33,946 23,846 9,051 1,165 572,814 1,969 11 (3,733) (4,307) (2,438) (359) (10,837) 27,570 44,012 60,756 635,539 493,088 447,848 508,604 360,743 369,266 32,903 1,569 5,707 97% 88% 7.4 5.4% 6.4% 1.58% 1.76% 4.2% 5.75 3.11 -0.1% 0.6% -1.4% 6.6% 12.1% 2Q09 50,017 45,168 73 359,478 18,719 58,649 27,315 4,009 85,646 1,462 232 650,768 173,458 12,401 329,129 32,831 24,886 6,773 196 1,305 580,979 1,921 11 (2,176) 494 (1,884) (376) (3,942) 27,569 44,230 67,868 650,768 502,587 452,570 520,438 366,078 363,418 36,544 1,914 6,600 97% 87% 6.7 5.9% 7.0% 1.80% 2.11% 3.6% 6.40 3.44 -0.2% 0.2% -1.9% 2.1% 3.8% 3Q09 56,898 52,723 79 348,518 18,625 58,712 28,184 3,838 87,941 1,533 1,263 658,314 160,938 12,501 347,415 32,948 21,021 9,434 143 1,279 585,679 1,977 11 (478) 1,409 (1,894) (374) (1,337) 27,568 44,416 70,658 658,314 508,353 451,455 522,113 355,871 360,982 38,636 1,918 7,353 97% 86% 6.4 6.2% 7.3% 2.07% 2.13% 3.3% 6.64 3.63 -0.6% 0.1% -5.7% 0.8% 1.4% 4Q09E 69,455 51,932 83 341,548 13,311 58,376 28,325 3,857 86,311 1,380 632 655,210 164,014 10,732 340,467 32,586 23,948 9,534 129 1,023 582,432 1,888 11 (478) 1,409 (1,894) (374) (1,337) 27,568 44,648 70,890 655,210 504,480 435,025 505,915 348,976 352,427 38,708 2,223 7,428 100% 86% 6.1 6.2% 7.4% 2.13% 2.42% 3.2% 6.66 3.63 -0.2% 0.1% -1.6% 1.1% 2.0% FY09E 69,455 51,932 83 341,548 13,311 58,376 28,325 3,857 86,311 1,380 632 655,210 164,014 10,732 340,467 32,586 23,948 9,534 129 1,023 582,432 1,888 11 (478) 1,409 (1,894) (374) (1,337) 27,568 44,648 70,890 655,210 504,480 435,025 505,915 348,976 363,379 38,708 7,624 7,428 100% 86% 6.1 6.2% 7.4% 2.13% 2.10% 3.5% 6.68 3.65 -0.3% 0.2% -2.6% 2.3% 4.2% FY10E 46,460 48,886 91 310,360 16,411 57,529 28,896 3,935 79,229 905 39 592,742 156,067 10,676 292,442 31,175 21,224 9,798 84 419 521,886 1,606 11 (478) 1,409 (1,894) (374) (1,337) 27,568 43,008 69,250 592,742 448,509 402,049 471,299 316,176 332,576 36,419 9,809 5,816 95% 85% 5.8 6.5% 7.5% 1.84% 2.95% 3.2% 6.50 3.42 0.0% 0.2% 0.3% 2.2% 4.2% FY11E 28,408 46,018 89 280,474 14,605 57,806 29,478 4,014 72,369 594 2 533,858 150,239 10,172 243,250 29,826 19,602 9,677 55 172 462,993 1,419 11 (478) 1,409 (1,894) (374) (1,337) 28,879 41,892 69,445 533,858 393,489 365,081 434,526 285,160 300,668 35,953 7,435 4,686 91% 84% 5.3 7.2% 8.1% 1.64% 2.47% 3.3% 6.62 3.43 0.8% 0.7% 6.2% 5.3% 10.3% FY12E 15,665 43,318 97 253,632 14,586 57,985 30,072 4,095 66,232 390 0 486,072 146,903 9,883 204,457 28,535 17,968 9,449 36 70 417,302 1,267 11 (478) 1,409 (1,894) (374) (1,337) 28,879 39,950 67,503 486,072 351,360 335,696 403,199 257,853 271,507 33,336 3,793 4,221 87% 83% 5.0 7.4% 8.3% 1.64% 1.40% 3.4% 6.59 3.25 1.6% 1.3% 11.3% 9.6% 19.4% FY13E 15,301 40,777 102 254,594 15,299 58,980 30,678 4,178 66,400 256 0 486,565 149,252 10,268 205,276 27,300 18,051 9,190 24 29 419,390 1,143 11 (478) 1,409 (1,894) (374) (1,337) 28,879 38,479 66,031 486,565 354,529 339,228 405,259 258,658 258,255 31,176 2,721 4,064 87% 84% 5.1 6.9% 7.8% 1.57% 1.05% 3.6% 6.60 3.12 1.8% 1.5% 13.1% 11.1% 23.6% 20.1% 10.0% -0.8% 8.1% 9.9% 7.4% 6.5% 6.9% 1.2% -3.6% -1.8% -7.2% -8.4% -6.0% -5.4% -7.2% 9.0% 7.9% -7.9% -11.8% -0.6% 24.6% -18.6% -4.3% -6.8% -0.9% 8.1% 5.7% 0.4% -7.2% -2.3% -1.1% CAGR 73.6% -6.8% 19.4% 6.7% -7.3% 5.2% 5.6% 7.3% 20.2% CAGR -31.5% -5.9% 5.5% -7.1% 3.5% 0.3% 2.0% 2.0% -6.3% '06/08E '09/13E

U.S. Multi-Industry

Source: Company reports and Bernstein estimates and analysis

62

November 6, 2009

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

Exhibit 100 Industrial segments YoY growth rates, quarterly
Tech Infrastructure Energy Infrastructure C&I NBCU Total Industrial segments
Source: Company reports, Bernstein estimates

1Q09 -0.2% 6.7% -22.4% -1.7% -0.9%

2Q09 -10.9% -1.0% -20.1% -8.2% -8.2%

3Q09 -10.8% -8.7% -18.4% -19.6% -12.4%

4Q09E -7.9% -17.3% -5.0% -8.0% -11.1%

1Q10E -5.5% -12.8% 2.0% -3.0% -6.9%

2Q10 -2.6% -8.0% 4.0% 5.0% -2.9%

3Q10E 0.3% -2.5% 5.0% 6.0% 0.7%

4Q10E 2.4% 3.4% 6.0% 6.0% 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
Ticker GE Industrial GE Capital GE Total 2011E/12E EPS 1.02 0.49 1.51 Rel P/FE 1.05 nm SPX P/FE 15.00 nm Abs P/FE 15.75 8.00 undisc. target price 16 4 Cost of equity 8.9% 8.9% Div 0.40 discounted target price 15.40 3.65 19 Mkt price 11/4/2009 Implied Upside Rating

14

34.2%

O

U.S. Multi-Industry

Source: Bernstein estimates

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 investment banking revenues. 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 of the Asia Pacific region, and versus the MSCI Asia Pacific ex-Japan Index for stocks listed on the Asian (ex-Japan) exchanges – unless 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 bankingsecurities 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

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CERTIFICATIONS
• I/(we), Steven E. Winoker, Senior Analyst(s), certify that all of the views expressed in this publication accurately reflect my/(our) personal views about any and all of the subject securities or issuers and that no part of my/(our) compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views in this publication.

Approved By: DSB
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