GE 2011 Annual Report Download - page 6

tested. We are restructuring our
European operations to sustain our
profi tability at lower levels of growth.
We accelerated global and technical
investments, ahead of competition,
during the downturn to ensure growth
in a choppy environment. We redeployed
capital from NBCU to support $11 billion
of Energy acquisitions, which should
provide an earnings boost in 2012. We
fi nished 2011 with $200 billion of product
and service backlog, more than at any
time in our history.
We also have a talented and committed
team. In December, I had dinner with
our Aviation supply chain leaders from
around the world. I do this regularly
with different operating teams. It allows
me to “go deep” and understand chal-
lenges through their eyes. My dinner
partners are the ones who have to
meet record engine demand with high
quality and low cost. They are also the
leaders of our fi ne frontline workforce,
the best in the world. They understand
technology, globalization, innovation
and lean manufacturing. Their tough-
minded, competitive attitude inspires
me. I know that with our team, we will
succeed in this environment.
GE Works for investors, and you should
benefi t from our people and our prep-
aration. As business leaders, we cannot
create the environment, but we can
shape our own destiny. Today, GE has
a stronger portfolio, large-scale
competitive advantage, product and
technology leadership, and strength in
the growth markets. We are ready
to compete. We are positioned to win
right now.
WE HAVE BUILT A
STRONGER PORTFOLIO
We have our strongest portfolio in
recent history. This year, we expect to
have organic growth of 5 to 10% with
expanding margins. GE Capital is
smaller and focused on specialty
fi nance, particularly in mid-market
segments. We expect GE Capital’s
earnings rebound to continue in 2012.
Together, this portfolio is built to grow
earnings and return cash to investors.
Our top strategic priority has been to
build a strong, competitively advan-
taged infrastructure business that
grows ahead of our peers and faster
than the global GDP. Over the last
decade, we have refashioned GE from
an “industrial conglomerate” to an
“infrastructure leader.” This has been
disruptive at times, but it has several
advantages. Infrastructure businesses
use GE’s core strengths in technology,
globalization and services. Infra struc-
ture is also positioned to benefi t from
several long-term tailwinds, especially
growth in emerging markets. Infra-
structure requires scale and fi nancial
strength. Deep customer relationships,
built on long-term thinking, really count.
We have diversifi ed and strengthened
our core businesses, like Energy.
Historically, this business was based
largely on selling one product—heavy
duty gas turbines—in one market—the
U.S. That kind of concentration creates
volatility as markets rise and fall.
Today, we have a broad Energy portfolio,
including a range of gas power
generation products, oil and gas tech-
nology, renewables, smart grid
services, energy management tech-
nologies and controls; these products
and services are sold around the world.
As an energy leader, our earnings are
more diversifi ed, less volatile and
should grow through the cycles. This is
the same model we are using in the
rest of our businesses.
We have boosted the growth rate
of our infrastructure portfolio by
investing in adjacencies, promising
opportunities that are outside of, but
closely related to, our core businesses.
PORTFOLIO STRATEGY
Improved portfolio positioned for a variety of outcomes
Revenue ~$150B
+ $100B of cash: 2012–2016
+ Fund growth and reward investors
EARLY DECADE
Transformation
Begins
MID-DECADE
Reposition, Simplify
and Invest
GOING FORWARD
Growth and Value
Creation
GE Capital
24%
Insurance
15%
Plastics, Media
20%
Infrastructure
41%
36%
Focused Leader
Simple and Safe
64%
High Tech
Global Leader
High Margin/
Returns
15%
8%
43%
34%
4 GE 2011 ANNUAL REPORT