General Electric Company

Transcription

1 General Electric Company Financial Services - Overview/Strategy "This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of Forward-looking statements may be identified by words such as "expects", "anticipates","intends", "plans", "believes", "seeks", "estimates", "will" or words of similar meaning and include, but are not limited to, statements about the expected future business and financial performance of GE. Forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from these expectations and assumptions due to changes in global political, economic, business, competitive, market, regulatory and other factors. We undertake no obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise." As of 9/30/2005

2 Reorganized into six GE businesses as of July 5 Infrastructure Commercial Financial Svcs. Industrial NBCU Healthcare Consumer Finance Revenue + segment profit reported at this level of detail in addition to six business units above Energy Energy Fin. Svcs. Aircraft Engines Aviation Fin. Svcs. Oil & Gas Rail Real Estate Lending & Leasing Insurance Cons. & Industrial Plastics Equipment Svcs. NBCU Healthcare Consumer Finance New organization drives significant benefits Expands growth capability Leverages key talent Positions for seamless transitions Sustains strong risk disciplines Improves pipeline of leadership development Simplifies organization speed cost Italics = In GECS financial reporting No change to GECS/GECC financial assets / 10K 2/

3 Legal structure & ratings commitment Explicit support GE support to ensure GECC 1.1x fixedcharge coverage ratio Guarantee of up to $1B subordinated debt Implicit support examples Acquisition capital Heller (~$2.5B) General Electric Company AAA/Aaa 100% General Electric Capital Services, Inc. 100% Primary GE Issuer/Guarantor General Electric Capital Corporation AAA/Aaa Global Insurance Holdings ERC 3/

4 Local funding entities Commitment to local markets GECC unconditional guarantee Parent rated Triple-A Proceeds used primarily to fund local assets Access to deeper investor base General Electric Capital Corporation 100% Primary GE Issuer/Guarantor AAA/Aaa GE Japan Funding KK GE Capital Canada Funding GE Capital European Funding GE Capital Auto Lease Public Company (Thailand) GE Capital Australia Funding GE Capital UK Funding General Electric Capital Canada Inc 4/

5 Self funding growth ($ in Billions) For example in 2004: 03 Net Income 04 Net Income ROE Required to support 15% growth 04 Income Available For Div Payout Ratio Commercial Finance % % Consumer Finance % % Subtotal $7.0 $4.0 $3.0 Blended Dividend Payout = 43% + Income and Sales Proceeds from Insurance/Other = 40% Dividend X-parent support paydown, GECS can self fund growth & pay 40% dividend 5/

6 GECS segment results -a) ($ in millions net earnings) 3Q 05 3Q 04 3QYTD 05 3QYTD 04 Commercial Finance $1,451 $1,135 $3,916 $3,072 Capital Solutions , Real Estate Insurance Consumer Finance $810 $681 $2,280 $1,883 Infrastructure b) $383 $251 $1,044 $723 Industrial b) $66 $30 $112 $27 Corp. items & elims. b) $(25) $156 $(100) $42 (a- On an after-tax basis (b- Includes only portions of the segment that are Financial Services businesses 6/

7 GE s Financial Services Businesses Performance history ($ in billions) Net Income 19.5% CAGR ~$9.8 $5.2 ERC $1.1 $0.1 $ E Delivered double digit earnings growth over the last 25 years KP $2.4 7/

8 Insurance strategy progress ($ in billions) $25 $(6) $(6) Edison FGIC GNW IPO GNW secondary March 05 September 05 MedPro ~$(3) Complete GNW ~$10 12/31/2002 Investment to date 4Q Remaining Investment Releasing capital for higher-returning opportunities Intensifying focus on exit from Insurance Solutions 8/

9 Growth through cycles Use same Risk Management rigor in all interest rate environments Match funding is a mandatory and centralized discipline Disciplined Capital Allocation process focused on Returns ~$ Interest Rates (%) Net Income Fed Funds $ $2.4 $0.4 $ E x-kidder, 02 ERC reserve strengthening Positioned to grow in any environment 9/

10 Higher-returning Financial Services ($ in billions) Business mix (assets) 100% 100% 100% ROE Commercial & Consumer Finance E 10F ~20% ~23% ++ Insurance & Equipment ~(3)% ~5% Low E 2010F Expanded capabilities: Dual Card Finance Full supply chain financing Inventory Finance Global mortgage Verticals GE Money branding U.S. large-cap lending 10 /

11 Commercial Finance Real Estate Capital Solutions Corporate Financial Services Healthcare Financial Services Insurance Provider of global commercial real estate capital and services Global provider of Innovative financial solutions across the entire supply chain Financing for working capital & capital expansion Provider of equipment, real estate and working capital financing to the global Healthcare Industry Global provider of Insurance and Reinsurance solutions Financing Global Energy, industrial and infrastructure development 1,300+ Commercial Aircraft owned Group of businesses with small share in big markets delivering through the cycles Energy Financial Services Aviation Services 11 /

12 Strong net income and asset growth ($ in billions) Assets Commercial Finance Net Income ~$193B ~$4.2B ~22% ROE 14% CAGR 17% CAGR $59 $1.0 '96 '05E '96 '05E Insurance $32B ~$100B $0.8B ~$1B Consistent growth through good and bad economic times 12 /

13 Diversified portfolio Excluding GECAS and EFS Collateral 2Q 05 FF&E/ Other Equip 15% Other 11% 13% A/R + Inv 10% Cash Flow Business Services 9% Industry Specialty Retail 8% 7% Healthcare Hotels 5% Auto 5% Machinery 4% equip 12% Real Estate 4% Trucking 4% Corp. Jets 5% Trans. Equip 5% 4% Healthcare 6% Eqpt. Franchise Fleet Vehicles 11% Dealer Inv 15% Real Estate Other (48) 1% or Less 24% 4% Tech. Hardware 3% Diversified Fin. 2% 2% Chemical 2% Food & Beverage 2% 2% Building Products 2% 2% Construction Consumer Services Steel Construction Material Senior secured positions broad spread of risk 13 /

14 Delinquency / Non Earnings (As a % of Financing Receivables) Equipment delinquency Non Earnings '00 '01 '02 '03 '04 '05 E '00 '01 '02 '03 '04 '05 E Sustained low delinquency rates Consistent broad based portfolio improvement 14 /

15 Consumer Finance Overview Largest Provider Of Retailer Finance Programs In The World 180,000 locations worldwide Only Global Independent Auto Finance Company 45 relationships / 3MM cars A Fast Growing Personal Loan Company 3,400 locations; 225,000 cash access points An Emerging Global Mortgage Provider In 25 countries today and expanding A Growing Global Consumer Finance Company 15 /

16 Consumer Finance ($ in billions) Assets $151 $2.5 ~$175 ~$3.0+ ~15% ~20% Dynamics Less than 2% penetrated globally Expand direct to consumer personal loans, deposits Net Income '04 '05E ROE ~31% ~31% Drive core growth through global IBs Re-brand to GE Money 2004 was a solid BD year announced BAC (Cent Am) and Garanti Bank (Turkey) deals in 05 Continued risk management excellence Consistent, double-digit earnings growth 16 /

17 Business Overview 05E Assets Net Income Geographic Split Australia Japan 11% 15% 5% Asia Australia Japan 17% 8% 5% Asia Americas 27% 42% Europe Americas 23% Net Income By Product 47% Personal Loans 29% 16% Sales Finance Europe Auto 13% 2% SME 12% Mortgages 28% Cards A Global GE Business 17 /

18 Consumer Asset Quality 7% 6% 30+ Delinquencies 5% 4% 3% 5.06% 4.98% 5.02% 5.02% GECF 30+% Delinquency 4.85% 5.18% 5.15% 5.23% 2% Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep U.S. Loss Rate % International '02 '03 '04 '05E Stable Asset Quality, Loss Trends Improving 18 /

19 Consumer Finance Regions Europe Americas Asia Demonstrated success in Eastern Europe Czech, Hungary, Poland Leverage model to expand to new geographies Russia, Latvia in 04 Developing Europe, Turkey in 05+ Expand Mortgage in UK, France high growth Leverage CAMGE partnership in Spain access to market Expand dual card penetration ~$5.5B in assets by 06 Expanding to Central America- BAC Leverage WMC for cross-sell Continue to acquire customers QVC, IKEA Broad based global strategy Mortgage roll-out continues AFIG (Australia), Japan, Thailand Expanding HCS joint venture in Korea Continue expansion in India Evaluate new markets: Malaysia, Viet Nam Philippines 19 /

20 GE credit ratings Moody s Rating Short Term Long Term Short Term S&P Rating Long Term General Electric Company P-1 Aaa A-1+ AAA General Electric Capital Services P-1 Aa1 A-1+ AAA General Electric Capital Corporation P-1 Aaa A-1+ AAA GE Capital Australia Funding* P-1 Aaa A-1+ AAA GE Capital Canada Funding* P-1 Aaa A-1+ AAA GE Capital European Funding* P-1 Aaa A-1+ AAA GE Japan Funding* P-1 Aaa A-1+ AAA GE Capital UK Funding* P-1 Aaa A-1+ AAA General Electric Capital Canada Inc.* P-1 Aaa A-1+ AAA * Guaranteed by General Electric Capital Corporation 20 /