(2)
Part
I
Item
1. Business.
General
Unless
otherwise indicated by the context, we use the terms “GE,” “GECS” and “GE
Capital” on the basis of consolidation described in Note 1 to the consolidated
financial statements in Part II, Item 8. “Financial Statements and Supplementary
Data” of this Form 10-K Report. Also, unless otherwise indicated by the context,
“General Electric” means the parent company, General Electric Company (the
Company).
General
Electric’s address is 1 River Road, Schenectady, NY 12345-6999; we also maintain
executive offices at 3135 Easton Turnpike, Fairfield, CT
06828-0001.
We are
one of the largest and most diversified technology, media, and financial
services corporations in the world. With products and services ranging from
aircraft engines, power generation, water processing, and household appliances
to medical imaging, business and consumer financing, media content and
industrial products, we serve customers in more than 100 countries and employ
about 300,000 people worldwide. Since our incorporation in 1892, we
have developed or acquired new technologies and services that have broadened and
changed considerably the scope of our activities.
In
virtually all of our global business activities, we encounter aggressive and
able competition. In many instances, the competitive climate is characterized by
changing technology that requires continuing research and development. With
respect to manufacturing operations, we believe that, in general, we are one of
the leading firms in most of the major industries in which we participate. The
NBC Television Network is a major U.S. commercial broadcast television network.
NBC Universal also competes with other film and television programming producers
and distributors, cable/satellite television networks and theme park operators.
The businesses in which GECS engages are subject to competition from various
types of financial institutions, including commercial banks, thrifts, investment
banks, broker-dealers, credit unions, leasing companies, consumer loan
companies, independent finance companies and finance companies associated with
manufacturers.
This
document contains “forward-looking statements” – that is, statements related to
future, not past, events. In this context, forward-looking statements often
address our expected future business and financial performance and financial
condition, and often contain words such as “expect,” “anticipate,” “intend,”
“plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their
nature address matters that are, to different degrees, uncertain. For us,
particular uncertainties that could cause our actual results to be materially
different than those expressed in our forward-looking statements include: the
severity and duration of current economic and financial conditions, including
volatility in interest and exchange rates, commodity and equity prices and the
value of financial assets; the impact of U.S. and foreign government programs to
restore liquidity and stimulate national and global economies; the impact of
conditions in the financial and credit markets on the availability and cost of
GE Capital’s funding and on our ability to reduce GE Capital’s asset levels as
planned; the impact of conditions in the housing market and unemployment rates
on the level of commercial and consumer credit defaults; our ability to maintain
our current credit rating and the impact on our funding costs and competitive
position if we do not do so; the soundness of other financial institutions with
which GE Capital does business; the adequacy of our cash flow and earnings and
other conditions which may affect our ability to maintain our quarterly dividend
at the current level; the level of demand and financial performance of the major
industries we serve, including, without limitation, air and rail transportation,
energy generation, network television, real estate and healthcare; the impact of
regulation and regulatory, investigative and legal proceedings and legal
compliance risks, including the impact of proposed financial services
regulation; strategic actions, including acquisitions and dispositions and our
success in integrating acquired businesses; and numerous other matters of
national, regional and global scale, including those of a political, economic,
business and competitive nature. These uncertainties may cause our actual future
results to be materially different than those expressed in our forward-looking
statements. These uncertainties are described in more detail in Part I, Item 1A.
"Risk Factors" of this Form 10-K Report. We do not undertake to update our
forward-looking statements.
(3)
Our
consolidated global revenues were $84.3 billion in 2009, compared with $97.2
billion in 2008 and $86.3 billion in 2007. For additional information about our
geographic operations, see the Geographic Operations section in Part II, Item 7.
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” of this Form 10-K Report.
Operating
Segments
Segment
revenue and profit information and additional financial data and commentary on
recent financial results for operating segments are provided in the Segment
Operations section in Part II, Item 7. “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and in Note 27 to the
consolidated financial statements in Part II, Item 8. “Financial Statements and
Supplementary Data” of this Form 10-K Report.
Operating
businesses that are reported as segments include Energy Infrastructure,
Technology Infrastructure, NBC Universal, Capital Finance and Consumer &
Industrial. Net earnings of GECS and the effect of transactions between segments
are eliminated to arrive at total consolidated data. A summary description of
each of our operating segments follows.
Results
for 2009 and prior periods in this section are reported on the basis under which
we managed our business in 2009 and do not reflect the January 2010
reorganization described in this section.
We also
continue our longstanding practice of providing supplemental information for
certain businesses within the segments.
Energy
Infrastructure
Energy
Infrastructure (23.7%, 21.1% and 17.8% of consolidated revenues in 2009, 2008
and 2007, respectively) is a leader in the field of development, implementation
and improvement of products and technologies that harness resources such as
wind, oil, gas and water.
Our
operations are located in North America, Europe, Asia, South America and
Africa.
Energy
serves power generation, industrial, government and other customers worldwide
with products and services related to energy production, distribution and
management. We offer wind turbines as part of our renewable energy portfolio,
which also includes solar technology. We also sell aircraft engine derivatives
for use as industrial power sources. We sell gas turbines and generators that
are used principally in power plants for generation of electricity and for
industrial cogeneration and mechanical drive applications. We are a leading
provider of Integrated Gasification Combined Cycle (IGCC) technology design and
development. IGCC systems convert coal and other hydrocarbons into synthetic gas
that, after cleanup, is used as the primary fuel for gas turbines in
combined-cycle systems. IGCC systems produce fewer air pollutants compared with
traditional pulverized coal power plants. We sell steam turbines and generators
to the electric utility industry and to private industrial customers for
cogeneration applications. Nuclear reactors, fuel and support services for both
new and installed boiling water reactors are offered through joint ventures with
Hitachi and Toshiba. In addition, we design and manufacture motors and control
systems used in industrial applications primarily for oil and gas extraction and
mining. We provide our customers with total solutions to meet their needs
through a complete portfolio of aftermarket services, including equipment
upgrades, long-term maintenance service agreements, repairs, equipment
installation, monitoring and diagnostics, asset management and performance
optimization tools, remote performance testing and Dry Low NOx (DLN) tuning. We
continue to invest in advanced technology development that will provide more
value to our customers and more efficient solutions that comply with today’s
strict environmental regulations.
In
addition, Energy offers water treatment solutions for industrial and municipal
water systems including the supply and related services of specialty chemicals,
water purification systems, pumps, valves, filters and fluid handling equipment
for improving the performance of water, wastewater and process systems,
including mobile treatment systems and desalination processes.
(4)
Energy
is party to revenue sharing programs that share the financial results of certain
aero-derivative lines. These businesses are controlled by Energy, but
counterparties have an agreed share of revenues as well as development and
component production responsibilities. At December 31, 2009, such counterparty
interests ranged from 5% to 49% of various programs; associated distributions to
such counterparties are accounted for as costs of production.
Worldwide
competition for power generation products and services is intense. Demand for
power generation is global and, as a result, is sensitive to the economic and
political environment of each country in which we do business. The balance of
regional growth and demand side management are important factors to evaluate as
we plan for future development.
Effective
January 1, 2010, the Sensing & Inspection Technologies and Digital Energy
businesses of the Enterprise Solutions business in the Technology Infrastructure
segment and the Industrial business in the Consumer & Industrial segment
became part of the Energy business.
Oil
& Gas
Our
technology helps oil and gas companies make more efficient and sustainable use
of the world's energy resources.
Oil
& Gas supplies mission critical equipment for the global oil and gas
industry, used in applications spanning the entire value chain from drilling and
completion through production, liquefied natural gas (LNG) and pipeline
compression, pipeline inspection, and including downstream processing in
refineries and petrochemical plants. The business designs and manufactures
surface and subsea drilling and production systems, equipment for floating
production platforms, compressors, turbines, turboexpanders, high pressure
reactors, industrial power generation and a broad portfolio of auxiliary
equipment.
To
ensure that the installed base is maintained at peak condition, our service
business has over 40 service centers and workshops in the world's main oil and
gas extraction and production regions. The business also provides upgrades to
customers’ machines, using the latest available technology, to extend production
capability and environmental performance.
For
information about orders and backlog, see the Segment Operations section in Part
II, Item 7. “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” of this Form 10-K Report.
Technology
Infrastructure
Technology
Infrastructure (27.1%, 25.4% and 24.8% of consolidated revenues in 2009, 2008
and 2007, respectively) is one of the world’s leading providers of essential
technologies to developed, developing and emerging countries. Around the world,
we are helping build healthcare, transportation and technology
infrastructure.
Our
operations are located in North America, Europe, Asia and South
America.
Aviation
Aviation
produces, sells and services jet engines, turboprop and turbo shaft engines, and
related replacement parts for use in military and commercial aircraft. Our
military engines are used in a wide variety of aircraft including fighters,
bombers, tankers, helicopters and surveillance aircraft, as well as marine
applications, and our commercial engines power aircraft in all categories of
range: short/medium, intermediate and long-range, as well as executive and
regional aircraft. We also produce and market engines through CFM International,
a company jointly owned by GE and Snecma, a subsidiary of SAFRAN of France, and
Engine Alliance, LLC, a company jointly owned by GE and the Pratt & Whitney
division of United Technologies Corporation. New engines are also being designed
and marketed in joint ventures with Rolls-Royce Group plc and Honda Aero, Inc.,
a division of Honda Motor Co., Ltd.