GE's Annual Report 2009

GE's Annual Report 2009 - Reset Reimagine Reinvest Rethink...

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Reset Reimagine Reinvest Rethink Research Relationships Responsibility Renew 2009 Annual Report
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CONTENTS 1 Letter to Investors 10 Business Overview 24 Board of Directors 25 Financial Section 120 Corporate Information 2009 Summary financial and strategic highlights Strong execution at GE Capital while keeping the Company safe and secure. Earned $2.3 billion at Capital Finance, profitable every quarter; earned about $11 billion in 2008–09 Increased Tier 1 common ratio to 7.7%; reduced leverage 25% Increased liquidity; fulfilled all 2010 long-term funding needs and reduced dependence on commercial paper and long-term debt Reduced Capital Finance ending net investment by $53 billion, excluding the impact of foreign exchange Solid industrial performance despite tough economy. Industrial earnings, excluding NBC Universal, grew 1%; industrial margins of 16.2%, up 60 basis points Total backlog growth of 1% to $175 billion Product services profit growth of 7% U.S. exports of $18 billion Increased financial flexibility. Strong industrial cash flow from operating activities (CFOA) of $16.6 billion; consolidated cash at year-end totaled $72 billion Announced divestitures that, when completed, will add another $10 billion of cash at the parent Protected the GE brand and reputation. Increased company-funded R&D spend by 7%; expanded product lines; made dynamic global investments Maintained position as 4 th most valuable brand with a valuation of nearly $50 billion according to one survey Encouraging signs at year-end, including declining nonearning assets and stabilizing consumer delinquencies from third quarter 2009, sequential orders increase and strengthening advertising revenue. Note: Financial results from continuing operations unless otherwise noted. 183 172 152 136 157 2006 2005 2007 2008 2009 CONSOLIDATED REVENUES (In $ billions) 19.1 23.3 23.8 19.9 16.6 2006 2005 2007 2008 2009 CASH FLOW FROM OPERATING ACTIVITIES (In $ billions) 18.1 22.5 19.3 17.3 11.2 2006 2005 2007 2008 2009 EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO GE (In $ billions) (19)% 12% 11% GE (38)% 16% (30)% 14% 10% S&P 500 16% (7)% 2006 2005 2007 2008 2009 EARNINGS GROWTH RATES Note: GE 2008 Earnings Growth Rate of -19% corrected from error in printed 2009 annual report.
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Dear Fellow Owners, Time magazine called this era “The Decade From Hell,” and “when you are going through hell,” Winston Churchill advised, “keep going.” We suffered one of the worst global economic downturns in history. The banking system teetered on the abyss. The financial sector suffered losses that will exceed $3 trillion. Unemployment surpassed 10% in the United States and rose even higher in many parts of the world. Asset prices across key segments plummeted. People lost faith in the principles of free markets and their power to create wealth and opportunities. Yet, in 2008 – 09, a period many considered the most difficult economic crisis since the Great Depression, GE earned about $30 billion and generated $36 billion of cash. And we finished this period much stronger than we started.
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