Ørsted is planning to build two wind farms on the East Coast and they will be powered GE Renewable Energy’s Haliade-X 12 MW. At 107 meters, LM Wind Energy’s blades for the Haliade-X 12 MW are the world’s longest. Image credit: GE Renewable Energy.For important information about our forward-looking statements, please see here.
We have made several significant announcements at GE since my last note in early September, and I thought it might be helpful to summarize some of them in one place for you. As I continue to remind investors, we still have a lot of work to do at GE, but these meaningful actions highlight our commitment to improve our financial position and strengthen our businesses.
On a separate note, while management is focused on meeting near-term commitments, we have been conducting our annual strategy reviews across our business units over the last month. We’ll talk more about this over the coming year, but so far it has been striking to me how many attractive reinvestment opportunities there are in our core markets over the next decade. The teams are clearly passionate about facing challenges head-on while delivering the best possible experience for our customers and driving a range of positive but realistic financial outcomes as a result.
I’m also pleased to also announce that leaders from our Healthcare business will host a GE Healthcare Investor Day on Monday, December 2 at 9 AM ET in conjunction with the RSNA annual meeting in Chicago, IL. Materials and webcast information will be posted to GE’s investor website ahead of the event.
Finally, a reminder that GE will report third-quarter earnings on Wednesday, October 30 at 8 AM ET.
As always, I welcome your feedback. Thank you for your interest in GE.
Steve Winoker
VP Investor Communications
GE Chairman & CEO Larry Culp speaks at Morgan Stanley Laguna Conference
Earlier this month, GE Chairman and CEO Larry Culp appeared onstage at the Morgan Stanley Laguna Conference in a webcast fireside chat with analyst Josh Pokrzywinski. He covered a range of topics, including progress against GE’s deleveraging plan, the importance of gas power in meeting global energy demand, and how GE is navigating the broader macroeconomic environment.
“We're doing what we said we would do in 2019,” Culp said. “I think the reset year thus far here in early September is playing out fundamentally in line with what we anticipated. But we know we have a lot more to do both with respect to the balance sheet and the way we run the business to make sure that GE is not only a good investment for you but for the company that we all want it to be.”
You can listen to a replay of the event or read the transcript here.
Improving our financial position: GE sells down a portion of our stake in Baker Hughes, a GE company (BHGE)
Last week, GE and BHGE closed a secondary offering and a BHGE buyback of a portion of GE’s shares in BHGE, resulting in roughly $3 billion of proceeds to GE. As a result of these transactions, GE no longer holds a majority ownership of BHGE for the first time, which means we will deconsolidate their results in our financial reporting going forward. GE maintains a 36.8% interest in BHGE, which we intend to exit in an orderly fashion over time.
This action follows a series of recent steps to improve our financial position, including selling down the remainder of our stake in Wabtec and announcing an agreement to sell our PK AirFinance aviation lending platform and receivables to Apollo and Athene.
Improving our financial position: GE announces $5 billion debt tender
We began to put these cash sources to work on September 12 with the announcement of a $5 billion debt tender split evenly between USD and EUR bonds, and today we released the results and the pricing. The tender was oversubscribed and will be reflected in our third-quarter results.
Strengthening the balance sheet and achieving our leverage targets at GE and GE Capital remain a key priority, and this tender is an important step towards achieving a Net Debt / EBITDA ratio of less than 2.5x at GE. We will continue to evaluate further actions going forward, including but not limited to paying down the intercompany loan between GE and GE Capital (in turn used to pay down external debt) as well as pension funding.
Innovating for customers: GE Renewable Energy and Ørsted sign first supply agreement for Haliade-X
Last week, GE Renewable Energy announced that Ørsted, the world-leading offshore wind farm developer, has selected GE Renewable Energy as the preferred turbine supplier for two of its US offshore wind farms.
Subject to final agreed upon and signed contracts and all required project approvals, Ørsted will deploy Haliade-X 12 MW wind turbines on two offshore wind farms: Skipjack, a 120 MW wind farm off the coast of Maryland that is expected come online in 2022, and Ocean Wind, a 1,100 MW wind farm off the coast of New Jersey that is expected to come online in 2024. This is the first commercial deployment of GE’s Haliade-X 12 MW offshore wind turbine and it represents continued progress to commercialize an important investment for GE Renewable Energy in a rapidly growing global offshore wind market.
Innovating for customers: GE Healthcare receives FDA clearance for Critical Care Suite
Original image acquired on GE Healthcare’s Optima XR240amx system with Critical Care Suite, an industry-first collection of artificial intelligence (AI) algorithms embedded on a mobile X-ray device. Image credit: GE HealthcareFinally, GE Healthcare announced on September 12 that it received the industry’s first FDA clearance to embed AI apps on a medical device for triage. GE Healthcare’s Critical Care Suite solution helps radiologists prioritize cases and to provide tools for technologists to improve exam quality. These next-gen AI algorithms automatically and almost instantaneously scan chest X-rays and flag a suspected pneumothorax, or collapsed lung, with impressive accuracy. The AI then flags the exam for the radiologists, which can escalate the review of high-priority images and could help expedite treatment.
“GE Healthcare is leading the way in the creation of AI applications for diagnostic imaging and taking what was once a promise and turning it into a reality,” said Kieran Murphy, President & CEO, GE Healthcare. “By integrating AI into every aspect of care, we will ultimately improve patient outcomes, reduce waste and inefficiencies, and eliminate costly errors. Critical Care Suite is just the beginning.”
This marks an important milestone for our Healthcare team, who are continuing to invest in new tech to lead precision health and smarter diagnostics.