Winning in the Essential Themes

How do big companies grow? We must invest in trends that are essential in the development of the global economy.

In the future, there will be billions of people with the spending power that Americans have today. The pace of technical innovation, government regulation, and digital connections will accelerate. This will require more of GE’s products and services than at any other time in our history.

The future will be shaped by six essential themes: A massive investment in infrastructure technology, the rise of emerging markets, a demand for environmental solutions, expanding demographics, the transforming power of digital connections, and opportunities in origination.

GE is already winning in these themes. Each requires the scale, breadth, and depth that only GE can bring. We will be a part of creating the future.

THEME 1

Everywhere in the world, the demand for infrastructure technology is rising — even in some of the most unexpected places.

Investment in global infrastructure technology is projected to be $10–$15 trillion by 2015 to support major energy, water, transportation, and healthcare projects. While renewable energy technologies will continue to grow, oil and gas will remain a significant source of energy. In 2008, the world will use a projected 90 million barrels of oil a day with over 35% of production coming from subsea sources.

GE’s acquisition of Vetco Gray positions us to capitalize on nearly $50 billion of new oil opportunities in the next few years, accelerating an already fast-growth business. By combining Vetco Gray’s subsea expertise with GE’s technology and financial resources, we are now positioned to bid on much bigger and more complex production opportunities — both on land and off-shore. In deepwater environments, GE provides vital technology including subsea valves and controls, electrical power distribution, and compression equipment.

A Vetco Gray valve system

With the flow

A Vetco Gray valve system operates on a deepwater platform, directing and controlling the flow of fluids from the well to the platform.

GE's technology on an ExxonMobil-affiliated platform off the coast of Angola ADDITIONAL OIL PRODUCTION (Growth from 2005–2010) A. On-shore 32% B. Off-shore shallow water 32% C. Off-shore deepwater 25% D. Oil 11%

Operating profit
is up 58%

in GE’s Oil & Gas business year over year. The business’s projected revenue goal is $10 billion by 2010.

THEME 2

Opportunity is calling from the emerging
markets — waiting for the right partner to
unleash its potential.

Emerging markets are growing at four times the growth rate of the U.S. gross domestic product. Driven by surging economies and capital available to invest, emerging markets are in need of new infrastructure, energy, water, healthcare, and financing.

One of GE’s fastest-growing emerging markets is Latin America. By 2010 there will be over 100 million new consumers needing access to water, energy, entertainment, transportation, and healthcare. GE’s multi-business portfolio is aligned to meet the expected demand for over 1,600 aircraft, access to improved healthcare, consumer financing, and solutions for water scarcity issues over the next 20 years.

Even as GE is poised to meet the surge of consumer demands driven by the region’s economic growth, we are also uniquely positioned to help drive that growth. GE’s mining vertical — consisting of our Transportation, Commercial Finance, Energy Financial Services, Water, and Security businesses — gives us a competitive advantage in pursuing an expected $3 billion opportunity over the next several years. GE is winning in emerging markets around the world.

A GE-9 locomotive at Vale's Carajas, Brazil mine EMERGING MARKETS REVENUES (In $ billions) - 2001: 33, 2007: 11, 2010 (forecast) ~50

Vertical success story

Brazil-based Vale is the world’s largest iron ore producer. Since 1972 GE has provided Vale with products and services ranging from transportation to water processing to plant automation. In 2007 we signed a strategic alliance with Vale to continue this relationship and help drive the region’s explosive growth.

THEME 3

Now there’s a GE environmental solution for even the most personal of environments — yours.

In the next 25 years, five billion people will lack access to clean water, global energy demand will grow 50%, and CO2 emissions will be more highly regulated. The world’s environmental challenges present an opportunity for GE to do what it does best: imagine and build innovative solutions that benefit our customers, society, and investors.

GE’s ecomagination initiative provides customers with a portfolio of over 60 products across all of GE’s businesses to reduce their environmental impact. The GE ecomagination Homebuilder Program is just one such offering. As energy costs continue to rise, developers, builders, and consumers are looking to integrate environmental technologies into new home construction. A home built under the GE ecomagination Homebuilder Program is designed to save 20% annually in energy and indoor water consumption, with 20% fewer emissions of CO2 compared to an industry-accepted average new home. For a 2,500 square foot home, this could save homeowners $600 to $1,500 on energy and water bills every year. All homes will also be designed according to Masco Contractor Services Environments for Living® Certified Green program standards to ensure greater efficiency.

86% of recent homebuyers

said they would choose an energy-efficient home over one that was not energy-efficient. (Energy Pulse, March 2006)

GE's energy and water monitoring dashboard, a product of the ecomagination Homebuilder Program, provides current and historical feedback on electricity and water consumption ENVIRONMENTAL SOLUTIONS REVENUES (In $ billions) - 2004: 14, 2007: 6, 2010 (Forecast): ~25

THEME 4

We’re serving the demographics of nations — one village at a time.

There will be approximately one billion new people living on the planet in the next decade, the large majority born in developing countries, and all with needs for basic infrastructure, healthcare, and consumer finance. Growing populations around the world, emerging middle classes, aging baby boomers in the U.S. — these are all changes in demographics that create opportunities for GE’s businesses.

Global healthcare spending is $5 trillion per year. To capitalize on this market, GE Healthcare is designing, engineering, and building medical diagnostic products tailored to the local market in places such as India. The MAC 400 electrocardiograph (ECG) is targeted to physicians and practitioners in rural areas, where nearly two-thirds of India’s population lives. The efficiency of the portable MAC 400 is critical: it can complete 100 ECGs on a single three-hour charge. This enables it to reach people even in villages where availability of electricity is limited.

GE designed the MAC 400 at the John F. Welch Technology Centre in Bangalore, India after soliciting customer feedback on key requirements, including reliability, portability, ease of use, accuracy, and flexibility in reporting capability.

The GE MAC 400 in use in a remote village in Karnataka, India

Follow the lead

The MAC 400 is designed to assist the physician in diagnosing patients at risk of heart disease. Its portability means our vision to transform healthcare can reach wherever demographics lead.

THEME 5

The power of digital connections is revolutionizing entire industries — while delivering a little fun along the way.

Just as digitization has transformed the way we work and communicate as individuals and businesses, digital connections will drive even greater transformation across industries such as entertainment and healthcare. Online advertising spending is projected to increase to $38 billion by 2010, while the healthcare IT market is expected to grow to $27 billion.

Hulu.com, NBC Universal’s joint-venture Web service with News Corp. for ad-supported distribution of premium content, is just one example. The site offers a vast selection of free content including TV shows, movies, and film clips, with an emphasis on providing greater flexibility in the availability and format of content.

Digitizing Healthcare

GE is leading the way in technology that will help accelerate digital adoption rates within healthcare. We’re focusing on clinical IT systems, such as Picture Archive & Communication Systems (PACS) and Electronic Medical Records (EMR), and addressing new markets such as digital pathology, utilizing clinical data to facilitate clinical trials.

Hulu.com streaming NBC Universal's award-winning '30 Rock'

THEME 6

Even as the world gets smaller — the opportunities for origination grow larger.

In a more interdependent global economy, new funding opportunities emerge every day. As the amount of global trade has increased four-fold in the last ten years, the number of countries with excess capital available for investment has grown. With an estimated $10–$15 trillion in excess funds, countries in the Middle East, Asia, Europe, and Russia are all looking for new investment opportunities to help diversify their sovereign wealth funds. These new capital instruments are actively used in the financial sector and are also fueling investments in infrastructure, energy, and transportation.

GE is a unique partner, with both industrial and financial strengths. Our multi-business portfolio presents a natural investment opportunity for many of these funds and the potential for strategic joint-venture opportunities. One example is our partnership with Abu Dhabi-based Mubadala Development Company PSJC and Credit Suisse to invest in infrastructure projects in the Middle East, Turkey, and North Africa. GE will continue to look for strategic investments, co-investment opportunities, and new funding sources to help fuel growth.

An aerial view of Abu Dhabi, where GE is forming strategic partnerships

Investments to top $300 billion

It is expected that over the next five to ten years, $300 billion of infrastructure investments will be required to accommodate growing economic and population demands in the Middle East region.

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