July 25, Michael R. Bellora Deputy Treasurer, Fixed Income Investor Relations and Banking. GE 201 High Ridge Road Stamford, CT USA

Transcription

1 Michael R. Bellora Deputy Treasurer, Fixed Income Investor Relations and Banking GE 201 High Ridge Road Stamford, CT USA July 25, 2011 T Michael.bellora@ge.com Below is our fixed income investor relations update for the second quarter We had a strong quarter with the fifth consecutive quarter of double digit earnings growth. GE Capital continued to deliver strong performance, earning $1.7B after tax and pre-tax of $2.1B. GE Capital s portfolio transformation is ahead of schedule. Consumer and Commercial Lending and Leasing (CLL) led with earnings growth of 57% and more than 100%, respectively. We continue to see strong demand for credit with CLL new volume originations at 10.8B for the quarter, up 33% from prior year. Margins remain strong at 5.3%. We further strengthened our capital and liquidity positions. GECC Tier 1 common ratio ended the quarter at ~10.4% and our leverage ended the quarter at 4.3:1. GECC ended the quarter with $77B in cash and equivalents and is on track for solid earnings growth for GE Company (continuing operations) Revenues of $35.6B down 4% from 2Q 10; up 7% excluding impact of NBCU industrial organic revenue up 3% Operating earnings of $3.7B - up 18% from 2Q 10 Operating EPS of $0.34 up 17% from 2Q 10 Cash generated from GE Industrial operating activities for the first six months totaled $4.4B ; down 31% from 2Q 10 (impacted by NBCU), but remains on track for $12-13B for total year. Total consolidated cash of $91B at year end GE Capital (continuing operations) Revenues of $11.6B down 1% from 2Q 10 Net earnings of $1.7B up $0.9B from 2Q 10 with pre-tax earnings of $2.1B, up $1.4B vs. 2Q 10 GE Capital ending net investment (excluding cash) was $457B, down $5B from 1Q 11 excluding the impact of foreign exchange Continue to strengthen GECC s liquidity and capital position $77B in cash and equivalents at quarter end Issued ~$9B in long term debt for the quarter; $20B year to date Commercial paper balance at $41B at quarter end, Committed credit lines were $54B at quarter end; up $2B from 4Q 10; cash plus credit lines >3X CP outstanding Estimated Tier 1 common ratio at 10.4% for GECC; up from 9.8%% at 1Q 11 GECS leverage was down to 4.3:1 from 4.9:1 at 4Q 10 Improved portfolio quality Losses and impairments for 2Q 11 were $1.4B; down $0.4B vs. 1Q 11. Non-earnings down $0.8B from 1Q 11 CLL: 30+ delinquency at 1.94%, down 9bps from 1Q 11 Consumer: Total 30+ delinquency at 7.59%, down 30bps from 1Q 11. Mortgage delinquency up 37bps from 1Q 11 due primarily to portfolio shrinkage Commercial Real Estate: delinquencies up 4bps to 4.12%; dollars down $0.1B within expected range non-earnings down $0.1B Reserve coverage ratio down 16bps from 1Q 11 to 2.29% reflecting improving portfolio quality. Total reserves down $0.5B to $7.1B. Page 1 of 5

2 GE Capital Business Highlights GE Capital announced plans to expand its operations in Chicago by bringing 1,000 jobs to the City, building on its already strong presence in the region. Currently, GE Capital has more than 1,000 employees in Chicago and GE has over 4,000 overall in the State of Illinois. This decision reflects GE Capital s commitment to the region and its desire to support future growth in its business. GE Capital, Corporate Finance announced it is co-collateral agent on a $115 million senior secured credit facility for Grede Holdings LLC, a diversified iron casting supplier. The financing will be used for acquisitions and working capital needs. GE Capital Markets is co-lead arranger GE Capital Retail Finance, a consumer lending unit of General Electric Company, announced an agreement to continue providing the U.S. consumer credit card program for Men s Wearhouse for another seven years, building on their relationship that began in Founded in 1973, Men s Wearhouse is one of North America s largest specialty retailers of men s apparel and tuxedo rentals with over 1,100 stores in North America. GE Capital Aviation Services (GECAS), the commercial aircraft leasing and financing arm of General Electric, announced a firm order for 60 Airbus 320neo Family aircraft at the 49th LeBourget airshow. GECAS has selected CFM s LEAP-X engine for all 60 A320neo aircraft. This new order brings the total number of A320 Family aircraft ordered by GECAS to 390. GE Capital, Franchise Finance has provided a $26.5 million credit facility to Frauenshuh Hospitality Group, a major Dairy Queen franchisee. The facility includes a $24 million term loan and a $2.5 million development line of credit, and will be used to finance the acquisition of 58 additional Dairy Queen units. A portion of the funding was provided through GE Capital s bank affiliate, GE Capital Financial Inc. In the first quarter of 2011, we entered into an agreement to sell our Consumer Singapore business for approximately $700 million. The sale was completed in the second quarter. GE Capital Australia and New Zealand announced it reached an agreement to sell $5 billion of mortgages to mortgage lender Pepper Australia. The sale includes home loans from the original Wizard Home Loans mortgage book and GE Money home loans originated through third parties including brokers and aggregators. The deal is expected to be completed in the coming months. Expected to close in the third quarter. For presentations, news and additional information, please visit our investor website at Best regards, Page 2 of 5

3 GECS segment results continuing operations: ($ in millions net earnings) GECS asset performance: ($ in millions ) Page 3 of 5

4 Portfolio quality and reserve coverage Asset quality continues to improve 30+ delinquencies 15.27% 14.57% 13.68% 13.21% 13.58% 8.95% 8.58% 8.09% 7.89% 7.59% 5.40% 5.74% 4.41% 4.08% 4.12% 2.58% 2.40% 2.14% 2.03% 1.94% Mortgage Consumer Real Estate CLL Allowance for losses Commercial $ Reserves ($B) $7.6 $ Q'10 3Q'10 4Q'10 1Q'11 2Q'11 WO s > new $(0.41)B Balance sheet provisions Release/ (0.15) P&L recoveries FX/other 0.01 Balance sheet Δ in reserves Reserve walk $(0.55)B Consumer Q'10 1Q'11 2Q'11 Coverage: Reserves 2.72% 2.45% 2.29% Non-earnings 72% 69% 69% Environment continues to improve GECS Funding ($ in billions): Page 4 of 5

5 Bond performance (vs. peers, indices) (USD): Page 5 of 5