EXHIBIT H
[GE LOGO]
- --------------------------------------------------------------------------------
GE UPDATE &
NEW GROWTH PLATFORMS
Keith Sherin
CFO
June 20, 2003
THIS PRESENTATION INCLUDES CERTAIN "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE
STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT EXPECTATIONS AND ARE SUBJECT TO
UNCERTAINTY AND CHANGES IN CIRCUMSTANCES. ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THESE EXPECTATIONS DUE TO CHANGES IN GLOBAL POLITICAL, ECONOMIC, BUSINESS,
COMPETITIVE, MARKET AND REGULATORY FACTORS. MORE DETAILED INFORMATION ABOUT
THESE FACTORS IS CONTAINED IN GE'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
[GE LOGO]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MEETING OVERVIEW
- --------------------------------------------------------------------------------
o SECOND QUARTER HIGHLIGHTS
- Economic Environment
- Orders / Asset Quality / Key Wins
- NBC Upfront and Olympics
- Labor
o REAFFIRM EARNINGS GUIDANCE
- Second Quarter at 37-39(cents) EPS
- Total Year EPS Within $1.55 - 1.70 Range, +3-13%
- Tighten Total Year Outlook at 2Q Earnings Call
o GE EXECUTING CLEAR GROWTH AGENDA
X Technology X Globalization
X Services X Portfolio Transformation
o TODAY'S FOCUS: NEW GROWTH PLATFORMS
- Water - Security - Healthcare IT
-------------
GE PERFORMING
-------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
ENVIRONMENT
- --------------------------------------------------------------------------------
CHALLENGES
[CLIP ART] CONTINUED SLOW ECONOMIC GROWTH
- Europe/Japan Remain Sluggish
[CLIP ART] SARS IMPACT ... DIMINISHING
[CLIP ART] UNEMPLOYMENT GROWING
- More in System
[CLIP ART] EXCESS CAPACITY
- Price [DOWN ARROW] and Weak Investment
[CLIP ART] ENERGY COST INFLATION
- Oil & Natural Gas
[CLIP ART] PLASTICS CYCLE
- Volume Soft
- Inflation Stubborn
MOMENTUM
[CLIP ART] GREAT NBC UPFRONT
- Leading Indicator
- Broad-Based Strength
[CLIP ART] SERVICE + TECHNOLOGY STRONG
- Winning Big Campaigns
[CLIP ART] STRONG DEAL PIPELINE
- U.S. & Global
[CLIP ART] CAPITAL MARKETS STRONG
- Low Interest Rates
[CLIP ART] AIRLINES STABILIZING
[CLIP ART] U.S. STIMULUS PACKAGE
- Helps Consumers
---------------------------------
X ENVIRONMENT REMAINS CHALLENGING
---------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECOND QUARTER 2003 - OPERATIONS
- --------------------------------------------------------------------------------
NO CHANGE TO
Q2 GUIDANCE
[BAR CHART]
Net Income 37-39(cents)
o SEGMENT PERFORMANCE LARGELY CONSISTENT WITH Q1 OUTLOOK
+ NBC & Power Systems Better
- Plastics (Volume) & Equipment Mgt. (Utilization) Worse
o MAKING PROGRESS ON TRANSACTIONS ... RANGE CONSIDERS POTENTIAL IMPACT OF
PORTFOLIO TRANSFORMATION ACTIONS
------------------
SOLID GE EXECUTION
------------------
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
ORDER TRENDS
- --------------------------------------------------------------------------------
TOTAL SHORT CYCLE V%
[BAR CHART]
2002 2003
-------------------------- -----------
1Q 2Q 3Q 4Q 1Q 2QE
1% 9% 14% 14% 7% 0-5%
+ Growth Platforms Continue Double-Digit V%
+ Services Performances Solid
o +15-20% Ex. GEAE
o GEAE Spares ADOR ~ $10MM, +3-5%
NBC SCATTER PRICING STRONG
[LINE CHART]
2002 2003 QTD
------------------ -------------------
2Q 3Q 4Q 1Q 2QE 3QE
8% 12% 18% 37% 25% 24%
- --------------------------------------------------------------------------------
PLASTICS V% (EX. FX)
o 2Q Volume ~350 MMT
o Price & Cost Stabilizing
[BAR CHART]
2002 2003
-------------------------- -----------
1Q 2Q 3Q 4Q 1Q 2QE
~FLAT SEQUENTIALLY
9 14 6 10 (2) ~(15)
[CLIP ART]
OTHER SHORT CYCLE V% (EX. FX)
[BAR CHART]
2002 2003
-------------------------- -----------
1Q 2Q 3Q 4Q 1Q 2QE
(1) 9 13 13 7 5-10
EX. ACQ'N (4) 4 (1) -- (4) ~FLAT
& FX
-----------------------------------
GE CREATING GROWTH IN TOUGH ECONOMY
-----------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - ASSET QUALITY
- --------------------------------------------------------------------------------
% 30+ DAYS PAST DUE
EQUIPMENT FINANCE $85B
[BAR CHART]
2002 2003
- ------------------------------------------------------------ ------------------------------------
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
2.37 2.36 2.33 2.33 2.33 2.03 1.93 1.71 1.87 2.05 1.92 1.92 1.90
CONSUMER $75B
[BAR CHART]
2002 2003
- ------------------------------------------------------------ ------------------------------------
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
5.27 5.37 5.50 5.56 5.56 5.72 5.61 5.58 5.75 5.86 5.84 5.81 5.82
DRIVERS
o BROAD SPREAD OF RISK ... DIVERSE ASSET BASE
o DISCIPLINED UNDERWRITING & UNIQUE REMARKETING SKILLS
o STRONG RISK MANAGEMENT
- Intense Collection Effort
- 3,500 Risk Professionals, 7,000 Collectors
o AIRLINE CREDITS STABILIZING
- <10 Aircraft on Ground
o US IMPROVING ... INTERNATIONAL FLAT
---------------------------
ASSET QUALITY REMAINS SOLID
---------------------------
- --------------------------------------------------------------------------------
3
- --------------------------------------------------------------------------------
Q2 "WINS"
- --------------------------------------------------------------------------------
o GE CONSUMER FINANCE ... LOWE'S Seven-Year Private Label Credit Card
Extension & GAP Five-Year Extension
o GE OIL & GAS ... $94MM OMAN LNG Plant Expansion
o GE TRANSPORTATION ... $600MM BNSF: 415 Units ('03-'08) Including 300
Evolution Series; KAZAKHSTAN $40MM Kits & Spares in '03 (Option for
$150MM More)
o AIRCRAFT ENGINES ... EMIRATES AIRLINES Leasing 26 (14 from GECAS) Boeing
777-3000ER Aircraft with GE90-115B Engines & 12 Year Service Agreement
Valued at $1B+
o JET BLUE ... 100 Embraer 190 Regional Jets Powered by GE CF34-10 Engines
(Option for 100 More)
o OSi SPECIALTIES Acquisition and GE Specialty Chemicals Disposition
o LABOR ... Reached Tentative Four-Year Agreement with Unions (IUE-CWA & UE)
o NBC ... Great Up-front; OLYMPICS U.S. Rights to 2010 Winter & 2012 Summer
Games
--------------------------------------
GE CONTINUES TO WIN IN THE MARKETPLACE
--------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NBC UPFRONT
TRADITIONAL STRENGTH
[GRAPHIC]
[GRAPHIC]
[GRAPHIC]
[GRAPHIC]
03/04 UPFRONT HIGHLIGHTS
X RECORD NBC VOLUME ($4.8B)
[UP ARROW] [UP ARROW] [UP ARROW]
+13% +15% +22%
PRIME TIME NON-PRIME TIME TV CABLE
X STRONG PERFORMANCE VS. OTHER NETWORKS (% SHARE OF TOTAL $)
[UP ARROW] [UP ARROW] [UP ARROW]
32% 50%+ 50%+
PRIME TIME LATE NIGHT EARLY AM
X THIRD-HIGHEST PRICING IN NBC HISTORY
[UP ARROW] [UP ARROW]
15% 10%
PRIME TIME FOUR DAYPARTS
NEW PROGRAMS
[GRAPHIC]
LAS VEGAS
[GRAPHIC]
LYON'S DEN
[GRAPHIC]
MISS MATCH
[GRAPHIC]
WHOOPI
[GRAPHIC]
COUPLING
[GRAPHIC]
HAPPY FAMILY
----------------------
NBC STRENGTH CONTINUES
----------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
NBC OLYMPICS [NBC LOGO]
- --------------------------------------------------------------------------------
WON US BROADCAST RIGHTS TO 2010 WINTER & 2012 SUMMER OLYMPICS ... CEMENTS NBC AS
"OFFICIAL" OLYMPICS NETWORK
TV RIGHTS
X $2B for Rights
X GE Can Leverage Multiple "Owned" Distribution Platforms
- Network - Cable
- Stations - Hispanic Media
X Real Upside Opportunity on New Media Platforms
EXISTING NEW
- Free TV - Closed Circuit
- Basic Cable - Pay/On Demand TV
- Satellite - Wireless
- Video - Streaming/Downloading
- Radio - Theatrical
GE TOP SPONSORSHIP IN THE WORKS
o $160-$200MM for Worldwide TOP Sponsor
- 4 Games '06-'12
- Great Infrastructure Play for GE
o Global Sponsorship & Marketing of IOC
- 200 National Olympic Teams
o Preferred Supplier to Host Cities
- Power Systems - Commercial Finance
- Security - Logistics Mgmt.
- Water - Modular Space
- Plastics - Appliances
- Lighting & Electrical
----------------------
A TERRIFIC DEAL FOR GE
----------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LABOR UPDATE
- --------------------------------------------------------------------------------
o TENTATIVE AGREEMENTS REACHED JUNE 15
- UE 3,500 Employees (Erie/Transportation, Ontario/Engines)
- IUE-CWA 13,000 Employees (Louisville/Appliances, Lynn/Engines,
Schenectady/Power Systems)
- IAM 2,600 Employees (Milwaukee/Medical, Evendale/Engines)
- Other Local GE Unions ~4,000 Employees (IBEW, UAW, IFPTE, etc.)
o RATIFICATION VOTES WEEK OF JUNE 23
o HIGHLIGHTS
- Historic 4-Year Deal
- Compromises Reached on Key Terms
- Wages (3%, 2.5%, 2.5%, 3%)
- Affordable Healthcare
- Pensions ... Attractive Increases
--------------------------------
OPTIMISTIC WILL WIN RATIFICATION
--------------------------------
- --------------------------------------------------------------------------------
5
- --------------------------------------------------------------------------------
2003 FOCUS
- --------------------------------------------------------------------------------
HIT FINANCIAL
COMMITMENTS
[BAR CHART]
'03 EPS $1.55-1.70
X Manage Environment
X Manage Dispositions
X Broad Based Growth
DELIVERING ON "CONTROLLABLES"
+ Service Growth in Great Shape
+ New Platforms with Build Out Potential
+ Strong Financial Services ... Asset Growth with Risk Management
+ Power Systems "Normalizing"
+ Positioned for Economic Rebound ... Strong Leverage
+ Strong Cash Generation + Portfolio Action ...
... Expand Capacity
----------------------------------
GOOD EXECUTION ON CLEAR PRIORITIES
----------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GE STRATEGY
- --------------------------------------------------------------------------------
CONSISTENT + RELIABLE GROWTH
THROUGH THE CYCLES
[UP ARROW] [UP ARROW]
GE S&P 500
TARGETS:
X Organic Growth 2x GDP
X Earnings Growth 10%+
X ROTC 20%+
STRATEGIC IMPERATIVES
1 SUSTAIN A STRONG BUSINESS MODEL
- Consistent Cash Generation
- Leaner + Faster + High Integrity Culture
- World's Best Team
2 ACCELERATE ORGANIC GROWTH
- Achieve Technical Excellence
- Accelerate Service Growth
- Build Enduring Customer Relationships
- Win Globally
3 STRENGTHEN GE BUSINESSES
- Improve Technology, Services, Financial Core
-----------------------------------
- BUILD STRONG GROWTH PLATFORMS
-----------------------------------
- Generate Cash from Low Return Businesses
----------------------------------------------------
NEW GROWTH PLATFORMS KEY ELEMENT OF FOCUSED STRATEGY
----------------------------------------------------
- --------------------------------------------------------------------------------
6
- --------------------------------------------------------------------------------
GROWTH PLATFORMS
- --------------------------------------------------------------------------------
USED COMPREHENSIVE PROCESS TO IDENTIFY NEW GROWTH PLATFORMS
SENIOR TEAM
X CEO + Vice Chairmen
X Senior Staff
X Corporate Audit
X GE BD Team
X Ouside Consultants
X GE Board
SCREENED AGAINST
GENERIC ATTRIBUTES
X High Growth Rates & Large Markets
X Capital Efficient
X "Infrastructure" Industries
X Opp'y for Competitive Advantage
--------------------------------
GE SPECIFIC STRENGTHS + CAPABILITY
X Global Reach
X Financing Expertise
X Healthcare, Energy & Media Domain Knowledge
X Customer Synergy
X Near-Neighbor Technology
X Strong Distribution
X Service Models
X Cost & Risk Management
--------------------------------
BEST IDEAS
WATER ... SECURITY & SENSORS ... HEALTHCARE IT ... HISPANIC MEDIA ... OIL & GAS
... US CONSUMER FINANCE
------------------------------------------------
HIGH RETURN GROWTH FRANCHISES THAT FIT GE SKILLS
------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH PLATFORMS
- --------------------------------------------------------------------------------
NEW MARKETS GROWING @ 3X GDP
($B)
[BAR CHART]
~$175B
~10% AAGR
SIZE GROWTH DEMOGRAPHIC
HEALTHCARE IT ~$60 ~10% o 2-5000 New Hospitals Over 15
Years
o Information = Quality + Cost
WATER TECHNOLOGY ~40 ~8 o Outsourcing Trend
o Shortage
EXPLORATION TECHNOLOGY ~40 ~8 o Fast LNG Growth
o Exploration Tougher
SECURITY & SENSORS ~32 ~10 o Technology
o 9/11 Impact
HISPANIC TV ~$3 ~15% o Demographics
GE REVENUE TODAY
<4% PENETRATED
[BAR CHART]
~$7B
X TECHNOLOGY
X SERVICES
X GLOBAL
X MULTIPLE REVENUE STREAMS
X CAPITAL EFFICIENT
-------------------------------------------------------
X FOCUS ON GLOBAL INFRASTRUCTURE MARKETS + GE SKILL SET
... IMPROVING GE'S GROWTH RATE AND RETURNS
-------------------------------------------------------
- --------------------------------------------------------------------------------
7
- --------------------------------------------------------------------------------
INDUSTRIAL GROWTH PLATFORMS
- --------------------------------------------------------------------------------
SALES
[BAR CHART]
'03 ~$7B
'06 >$12B
~20% CAGR
MARGINS ~20+%
DRIVERS
o Strong Underlying Demand
o Share Gains Through Global Distribution & New Products
o Product Leadership with GE Technology
o Expand Service Offerings
o Consolidated Acquisitions in Fragmented Industries
---------------------------------------
GE BUILD OUT PROCESS
X STEP #1 ... DEFINE MARKET & LAUNCH
X STEP #2 ... RESHAPE THE GE WAY
X STEP #3 ... DISCIPLINED BUILD OUT
---------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH PLATFORMS
- --------------------------------------------------------------------------------
TODAY'S AGENDA
WATER - BILL WOODBURN
TECHNOLOGIES - GEORGE OLIVER
SECURITY - LLOYD TROTTER
- KEN BOYDA
HEALTHCARE IT - JOE HOGAN
---------------------------------
THREE GREAT NEW GROWTH BUSINESSES
---------------------------------
- --------------------------------------------------------------------------------
8
- --------------------------------------------------------------------------------
[GE LOGO]
- --------------------------------------------------------------------------------
GE WATER TECHNOLOGIES
Bill Woodburn
CEO, GE Specialty Materials
George Oliver
CEO, GE Water Technologies
June 20, 2003
THIS PRESENTATION INCLUDES CERTAIN "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE
STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT EXPECTATIONS AND ARE SUBJECT TO
UNCERTAINTY AND CHANGES IN CIRCUMSTANCES. ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THESE EXPECTATIONS DUE TO CHANGES IN GLOBAL POLITICAL, ECONOMIC, BUSINESS,
COMPETITIVE, MARKET AND REGULATORY FACTORS. MORE DETAILED INFORMATION ABOUT
THOSE FACTORS IS CONTAINED IN GE'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
[GE LOGO]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GE SPECIALTY MATERIALS
- --------------------------------------------------------------------------------
WHERE WE STARTED
2001 / 2
- ----------------
- ----------------
SILICONES
- ---------------- REDEFINE FOR GROWTH
QUARTZ
- ----------------
SUPER-
ABRASIVES
- ---------------- LIMIT INVESTMENT
SPECIALTY
CHEMICALS
- ----------------
REVENUE $1.8B
GROWTH RATE ~FLAT
OP PROFIT ~10%
TRANSFORMING THE BUSINESS
o Focus on Business Driven by Technology and Services
o Create Platforms That Own Customer Interface
o Globalize Winning Business Models
o Divest Under-performing Businesses
o Improve Cash Performance and ROTC
----------------------------------
REORGANIZED FOR CLEAR GROWTH FOCUS
----------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
GE SPECIALTY MATERIALS
- --------------------------------------------------------------------------------
WHERE WE STARTED WHAT WE'VE DONE
2001 / 2
----------------
---------------- ACQUIRED BETZ &
SILICONES OSMONICS
---------------- ----------------
QUARTZ
---------------- ----------------
SUPER- ACQUIRING OSi
ABRASIVES ----------------
---------------- ACQUIRED ADV.
SPECIALTY CERAMICS
CHEMICALS ----------------
----------------
-- Divesting --
REVENUE $1.8B
GROWTH RATE ~FLAT
OP PROFIT ~10%
[CLIP ART]
WHERE WE'RE GOING
------------------
WATER TECHNOLOGIES
------------------
------------------
ADVANCED MATERIALS
------------------
REVENUE $3.0+B
GROWTH RATE 5-10%
OP PROFIT 15-20%
CASH >1.5XNI
X TECHNOLOGY
X SERVICES
X CUSTOMER CENTRIC
X GLOBAL
X BIG, GROWING MARKETS
------------------------------------------------
CREATING 2 MULTI-BILLION DOLLAR GROWTH PLATFORMS
------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SILICONES & OSi
- --------------------------------------------------------------------------------
PURCHASE OF OSi SPECIALTIES ANNOUNCED IN APRIL... EXPECT 3Q'03 CLOSE
[BAR CHART]
'03 '04
SILICONES WITH FULL
TODAY YEAR OF OSi
REVENUE ~$1.3 $1.8 ~$2.0
0.5
[BAR CHART]
SILICONES WITH FULL
TODAY YEAR OF OSi
W/ SYNERGIES
OP PROFIT ~$125 $250 ~$300
125
OP % ~10% 15+%
X STRONG OSi TECHNOLOGY PORTFOLIO
o Leader in Organofunctional Silanes
o 80% Specialty Applications
o ~300 Patents
o Application Expertise
X SIGNIFICANTLY EXPANDED OFFERINGS
o Higher Margins: 2x Commodities
X SIGNIFICANT SYNERGIES
o Cost-Out Straight-Forward
o Sourcing Benefits
X CONSISTENT WITH STRATEGY
o Fix Silicones Returns & Growth
o Monetize Specialty Chemical Unit
----------------------------------------
LOW-RISK BOLT-ON WITH POWERFUL SYNERGIES
----------------------------------------
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
BUSINESS SYNERGIES
- --------------------------------------------------------------------------------
TWO GROWTH PLATFORMS ACROSS MATERIALS AND FLUID TECHNOLOGIES
------------------ ------------------
WATER TECHNOLOGIES ADVANCED MATERIALS
------------------ ------------------
- ------------------------------------ --------------------------------------
END MARKET EXAMPLE PRODUCT EXAMPLE
Electronics PERSONAL CARE
[GRAPHIC]
$3B ELECTRONIC MAT'LS GROWING 10+% [GRAPHIC]
- SILICONE GROWING 17% AAGR
LEADING COMPETENCY IN 4 OF 6
ULTRAPURE WATER SECTOR INGREDIENTS CATEGORIES
[GRAPHIC] $1B AND GROWING AT
12% PER YEAR
- ------------------------------------ --------------------------------------
---------------------------------------------------
COMPLEMENTARY TECHNOLOGY, CHANNELS, AND END MARKETS
---------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WHY WATER?
- --------------------------------------------------------------------------------
o Water Integral to Virtually $360B MARKET
Every industrial Process
[GRAPHIC]
o Very Fragmented Industry
o Increasing Demand
o Decreasing Supply
o Increasing Regulatory Requirements
o Application Intensity and Process Rigor
Driving Higher Purity Needs
o Attractive Segments Growing 2-3X GDP... Technology
and Recurring Services
--------------------------------------------------
DYNAMICS PLAY TO GE TECHNOLOGY & SERVICE STRENGTHS
--------------------------------------------------
- --------------------------------------------------------------------------------
3
- --------------------------------------------------------------------------------
BUILDING GE WATER TECHNOLOGIES
- --------------------------------------------------------------------------------
DEFINE & --> RESHAPE --> BUILD-OUT
LAUNCH
o DEFINE THE SEGMENTS ... $40B, 2-3X GDP Growth, High ROTC
o LAUNCH THE PLATFORM ... BetzDearborn Aquisition
o RESHAPE THE GE WAY ... Integrate Efficiently, Transfer GE Technology,
Transform Service Model
o DISCIPLINED BUILD-OUT ... Organic and Inorganic
---------------------------------------------
PROVEN GE APPROACH TO BUILD GROWTH BUSINESSES
---------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DEFINE &
WATER & PROCESS MARKET LAUNCH
- --------------------------------------------------------------------------------
MODALITIES
----------
Waste Services $ 1B
[PIE CHART]
Total Market: $360B Environmental Services $ 1
Smart Services $ 1
Priority Segments $40B Contractual Services $ 3
Chemicals & Services $11
Filtration Consumables $ 9
Modular Equipment $ 8
DISCIPLINED CRITERIA
-------------------- Custom Equipment $ 5
+ Technology + Low EHS Maintenance $ 1
+ Value Service + High ROTC ---
+ High Application + 2-3x GDP Growth $40B
---------------------------------------------
DISCIPLINED FOCUS ON $40B ATTRACTIVE SEGMENTS
---------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
Define &
WATER & PROCESS PLAYING FIELD Launch
- --------------------------------------------------------------------------------
Waste Services [LOGO] ChemTreat, Inc. [LOGO] BWT
Best Water Technology
Environmental Services
[LOGO] ONDEO [LOGO] PALL
Smart Services Nalco
Contractual Services [LOGO] IONICS [LOGO] USFilter
Chemicals & Services [LOGO] ASHLAND [LOGO] DOW
ASHLAND SPECIALTY FILMTEC(SM) Membranes
Filtration Consumables CHEMICAL COMPANY
Modular Equipment [LOGO] BAKER [LOGO] CUNO
HUGHES
Custom Equipment
Maintenance
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define &
LAUNCH -- PLATFORM ACQUISITIONS Launch
- --------------------------------------------------------------------------------
[BAR CHART]
THE THE
PLATFORM MODALITIES
$1.4B Chemicals &
------------ Services
GE Betz Filtration
$1.1B Sales Consumables
2Q '02
------------ Modular
Osmonics Equipment
$0.3B Sales
1Q '03 Custom
------------ Equipment
~15% OP
THE OPPORTUNITY...
o World-class Industrial Channel
- 2,200+ Sales and Service Engineers
- Application Expertise
- Very Broad Served Industries...
Tremendous Alignment with GE
o GE "Value-Add" Matters ... 1 + 1 > 2
- Six Sigma
- HR Processes
- Operating Rhythm & Practices
- Sourcing & Productivity Initiatives
- Technology Transfer / Enhancements
----------------------------------------------------------
TERRIFIC OPERATING PLATFORM... SOLID FOUNDATION FOR GROWTH
----------------------------------------------------------
- --------------------------------------------------------------------------------
5
- --------------------------------------------------------------------------------
Define &
INDUSTRIES THAT WE SERVE Launch
- --------------------------------------------------------------------------------
[GRAPHIC] [GRAPHIC] [GRAPHIC] [GRAPHIC]
Food and Primary Metals Power Transportation
Beverage
---------------------------------
[GRAPHIC] Providing Solutions To The Entire [GRAPHIC]
Pharmaceuticals GE Customer Base ...And Beyond C&I/Health Care
---------------------------------
[GRAPHIC] [GRAPHIC] [GRAPHIC]
Mining Hydrocarbon Processing Chemical Processing
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define &
WHAT WE DO TODAY Launch
- --------------------------------------------------------------------------------
"Pure Water" Systems Process Additives Cooling Treatment
[GRAPHIC] [GRAPHIC] [GRAPHIC]
[GRAPHIC]
Clarification & Filtration Wastewater Treatment Boiler Treatment
[GRAPHIC] [GRAPHIC] [GRAPHIC]
-------------------------------------------------------------
CARING FOR "INDUSTRY'S LIFEBLOOD" WITH TECHNOLOGY AND SERVICE
-------------------------------------------------------------
- --------------------------------------------------------------------------------
6
- --------------------------------------------------------------------------------
Define &
WHAT WE DO TODAY Launch
- --------------------------------------------------------------------------------
Corn Milling Plant, Nebraska X City Water Capacity Constraint Avoided
RO System for Feed Water Pretreatment --> X Chemicals Usage [DOWN ARROW], Savings $300K
X Water Usage [DOWN ARROW] 42 million gallons
Petrochemical Plant, Texas X Sludge Reduction [DOWN ARROW] 475 tons
Automated Feed System for Lime Softening --> X Chemicals Usage [DOWN ARROW], Savings $300K
X Water Usage [DOWN ARROW] 2+ million gallons
Pharmaceuticals Plant, New Jersey X Chemicals Usage [DOWN ARROW]
Automated Cooling Tower Treatment --> X Savings $50K
X Water Usage [DOWN ARROW] 3+ million gallons
Steel Mill, Brazil X Solid Waste [DOWN ARROW] 38 tons
Central Manufacturing Cooling System --> X Maintenance/Downtime [DOWN ARROW], Savings $1MM
X Water Usage [DOWN ARROW] 46 million gallons
Auto Assembly Plant, Missouri X Natural Gas Consumption [DOWN ARROW] $1MM
Boiler Operations Improvement Program --> X Chemicals Usage [DOWN ARROW] $150K
X Water Usage [DOWN ARROW] 4 million gallons
------------------------------------------------------
GOOD FOR CUSTOMERS, THE ENVIRONMENT, AND PROFITABILITY
------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define &
THE "COST OF FAILURE"... Launch
- --------------------------------------------------------------------------------
CUSTOMER PROBLEM: GE SOLUTION:
SITUATION ACTIONS
o Refinery Treated By a o Refinery Solutions Team Deployed
GEWT Competitor
o GE Metallurgical Experts Complete
o Catastrophic Failures in Key Analyses Overnight
Equipment System
o Chemical, Equipment, and Membrane
o Incumbent Suppliers Incorrectly Solution to Refinery Management
Diagnose the Root Cause
[DOWN ARROW] [DOWN ARROW]
CUSTOMER IMPACT RESULTS
o $20MM Lost Production o New GE Customer
... $200K Per Day
o Filtration Membranes Upgrades
o $1MM Fixed Asset Repair
o Working New Services Contracts
---------------------------------------------------------------
WATER IS "MISSION CRITICAL"... NEED HIGH-CONFIDENCE RELIABILITY
---------------------------------------------------------------
- --------------------------------------------------------------------------------
7
Define &
HOW WE DO IT TODAY Launch
- --------------------------------------------------------------------------------
WHAT OUR 2,200 SERVICE REPS DO...
o Perform Field Analytics
o Troubleshoot Plant Systems
o Prescribe Treatment Solutions
o Live on the Customer Site
WHAT OUR CUSTOMERS GET...
o Expert Technical Service, 24 X 7
o Continuous Performance Monitoring
o Detailed Performance Reporting
o Optimized Performance of Costly Fixed Assets
----------------------------------------------------
GE WATER TECHNOLOGIES
~$1.4B Revenue in 2003
[PIE CHART]
80% Recurring
[PIE CHART]
5% Contractual Services
35% Annual Purchase Agreement
Transactional
o Typical Contracts ~1 year
o Customer Pays on Chem Usage ... Average $60K/Year
o Limited Cross Sell Opportunity
----------------------------------------------------
-----------------------------------------------------
THE CROSS-MODALITY INDUSTRIAL WATER & PROCESS EXPERTS
-----------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & -> Reshape
AQUISITION INTEGRATION Launch
- --------------------------------------------------------------------------------
$MM
Integration Strategy Some Key Results
o Actions ... Day 1 CUSTOMER
- Launched New Organization CHURN
- Infused GE Leadership Talent 10%(X) 3% [BAR CHART]
- Huge Celebration
- Set Expectations ... GROWTH! SALES REP OP PROFIT
TURNOVER '02
10%(X) 2% '03E [UP ARROW] 15%
o Actions ... First 100 Days
- 25+ Global Road Shows GROWTH
- Re-energize Corporate Sales 4%(X) 5%+
- GE Operating Rigor
- Personnel Assessments
-----------------------------------------------
COMBINATION OF TACTICAL AND STRATEGIC EXECUTION
-----------------------------------------------
- --------------------------------------------------------------------------------
8
- --------------------------------------------------------------------------------
Define & -> Reshape
EXECUTE THE GE WAY Launch
- --------------------------------------------------------------------------------
Process Water
Outsourcing
One Company... Product &
One Solution Service
Offerings
Engineered 2,200 Sales Force Filtration
Chemical & GE Interlinkages Life Cycle
Mechanical Services and Consumables Management
Solutions
"Water by Integrated
the Gallon" Approach
Global Reach
KEY ENABLERS
o GE Verticals
o Globalization
o Contractual Services
o New Technologies
-----------------------------------------------
Strategy Enables 2,200 Field Force to Sell More
Products & Services With Greater Efficiency
-----------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & -> Reshape
GE VERTICALS Launch
- --------------------------------------------------------------------------------
Global Power Company
o Customer Problem: Scaling and Reduced Efficiency
in Cooling System
o Cost of Failure: $1MM per Hour
o General Electric Solution:
[LOGO] GE BETZ [LOGO] Power Systems [GRAPHIC]
o Water Treatment Services o Supplier of Turbines JOINT EFFORT AVERTED
Supplier COSTLY CUSTOMER
o On-site Blackbelts SHUTDOWN
o Coordinated Efforts of GE
Companies o Analyzed Key Variables,
Shared Global Energy
Expertise
---------------------------------
GROWTH FROM FOCUS ON GE VERTICALS
---------------------------------
- --------------------------------------------------------------------------------
9
- --------------------------------------------------------------------------------
Define & -> Reshape
GLOBALIZATION Launch
- --------------------------------------------------------------------------------
EASTERN EUROPEAN &
MIDDLE EAST GROWTH RATE
INVESTING IN FIELD RESOURCES [BAR CHART]
o Up 18% in Growth Regions
Base 5%
Current 15%
UPGRADING CHINA PRESENCE
o New Shanghai Plant ... On Line in 2004 [MAP]
o New Shanghai Research Center
ASIAN GROWTH RATE
RESULTS...GROWTH
o China Growing 30%+... Up 20 points [BAR CHART]
o E. Europe / ME Growing 15%... Up 10 points
o Mexico Growing 10%+... Up 5 points Base 10%
Current 25%+
------------------------------------------------
RESOURCING FOR GLOBAL GROWTH... AND ACHIEVING IT
------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & -> Reshape
CONTRACTUAL SERVICES Launch
- --------------------------------------------------------------------------------
GE AIRCRAFT ENGINES GE WATER TECHNOLOGIES
Sell Contractual Service Agreements to Sell Technology-Based Solutions
Drive Down the Total Cost of Operation Applied by On-site Engineers, Backed
Utilizing World Class Engine Technology By Performance Commitments
ENGINE
TECHNOLOGY FIELD ENGINEER
- $/Hr - $/Gallon
- Performance - Performance
- ----- ------- -------- ------- --------- --------- -------- -------
Parts Repairs Upgrades Service Membranes Chemicals Services Filters
& NDT
- ----- ------- -------- ------- --------- --------- -------- -------
-------------------------------------------------------
WE KNOW HOW TO CREATE DIFFERENTIATED SERVICE BUSINESSES
-------------------------------------------------------
- --------------------------------------------------------------------------------
10
- --------------------------------------------------------------------------------
Define & -> Reshape
CONTRACTUAL SERVICES Launch
- --------------------------------------------------------------------------------
PROCESS VARIABILITY SUCCESS FACTORS GE CAPABILITY
o Inexpert System Engineering o Water Chemistry Expertise X
o Inexpert Operation & Maintenance o Modular Equipment Design X
o Likely Performance Failures: --> o Field Reps X
- Boiler Derating ($20K/Hr) o Application Know-How X
- Contamination ($100K) o 24 x 7 Remote Monitoring X
REDUCE VARIATION ... AND COST PER GALLON
[line chart omitted reflecting system capability and cost per gallon]
-----------------------------------------------------
BUILDING CAPABILITY TO DELIVER FIXED-PRICE PURE WATER
-----------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & -> Reshape
CONTRACTUAL SERVICES -- EXAMPLE Launch
- --------------------------------------------------------------------------------
CUSTOMER: WHAT WE ARE SELLING...
o Reverse Osmosis Plant
(5 mm gallon/day) -----------
Smart o Membrane Monitoring
GEWT COVERAGE: Services
o Field Rep -----------
o Analytical Lab Services
o Technical Support Specialists -----------
o GE Global Research Chemists Contractual o Fixed Price - CSA
Services
HOW IT WORKS: -----------
o Fixed Fee
o Long-Term Agreement -----------
o Performance Commitments Chemicals & o Water Treatment
Services Chemicals
GEWT AND CUSTOMER ON ----------- o Membrane Treatments
THE SAME SIDE
-----------
Filtration o Cartridge Filters
Consumables o Depth filters
-----------
-----------
Modular o Reverse Osmosis
Equipment Equipment
-----------
-----------------------------------------
TRANSLATING THE GE SERVICE MODEL TO WATER
-----------------------------------------
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
Define & -> Reshape
NEW TECHNOLOGY Launch
- --------------------------------------------------------------------------------
REMOTE MONITORING & DIAGNOSTICS
AUTOMATION WITH OPTIMAL
PREDICTABILITY AND CONTROL
PROCESSES FOR CUSTOMERS
[GRAPHIC] ... HUGE PRODUCTIVITY
OPPORTUNITY FOR GEWT &
OUR CUSTOMERS
BETZ / OSMONICS SILICONES / OSi CORPORATE GE
o Process Sensors & o Electronics Packaging o GRC Combustion
Analytical Chemistry Chemistry
o Corrosion Science & o Electronics & Material
Monitoring Science Lab Capabilities
-------------------------------------------------------------
A UNIQUE CAPABILITY... LEARNING FROM OTHER SERVICE BUSINESSES
-------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & -> Reshape
NEW TECHNOLOGY Launch
- --------------------------------------------------------------------------------
NON-DESTRUCTIVE TESTING... AN ENTIRELY NEW SERVICE OPPORTUNITY
FINDING A PIPE READY TO FAIL GE DIGITAL RADIOGRAPHY OPPORTUNITY
Internal Pipe Corrosion Under
Corrosion Insulation
[GRAPHIC] --> [GRAPHIC] [GRAPHIC]
TODAY: POINT-BY POINT SEARCH
|X| Expensive
|X| Slow X QUANTUM DATA INCREASE
|X| High Labor X SPEED AND LOWER COST
|X| Low Data X SAFETY
--------------------------------------------------------
GEMS TECHNOLOGY PLAY... BASIS TO ENTER $1B+ NDT INDUSTRY
--------------------------------------------------------
- --------------------------------------------------------------------------------
12
- --------------------------------------------------------------------------------
Define & -> Reshape
"TO BE" SERVICES MODEL Launch
- --------------------------------------------------------------------------------
- -------------------------------- -----------------------------------
"Current" GE Water Technologies "To Be" GE Water Technologies
[PIE CHART] [PIE CHART]
80% Recurring 90% Recurring
[PIE CHART] [PIE CHART]
-->
5% Contractual Services 25% Contractual Services
35% Annual Purchase Agreement 50% Annual Purchase Agreement
Transactional Transactional
o TYPICAL CONTRACTS ~1 YEAR o TYPICAL CONTRACTS ~3-5 YEARS
o CUSTOMER PAYS ON CHEM USAGE o CUSTOMER PAYS A FIXED FEE
... AVERAGE $60K / YEAR ... AVERAGE $150K / YEAR
o Limited Cross Sell Opportunity o HIGH PENETRATION OF NEW SERVICES
- -------------------------------- -----------------------------------
-----------------------------------------------------
THE CROSS-MODALITY INDUSTRIAL WATER & PROCESS EXPERTS
-----------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & -> Reshape -> Build-Out
GROWTH PLAN Launch
- --------------------------------------------------------------------------------
REVENUE
[BAR CHART]
21%
CAGR
+ Acquisitions ~$3.0B
-------- --------
+ Market Growth +$0.8
--------- --------
+ GE Capability +$0.4
-------- ---------
+$0.4
~$1.4B --------
---------
--------------------------------------------------------------------
'03 o 2-3x GDP Organic Growth '06
o ROTC 15%+
~15% OP ... >50% EX-GOODWILL 20%+ OP
o Low Capital Intensity
o Cash >1.5X Net Income
------------------------------------------------------
CREATING A SCALABLE GLOBAL BUSINESS IN A GROWTH MARKET
------------------------------------------------------
- --------------------------------------------------------------------------------
13
- --------------------------------------------------------------------------------
[GE LOGO]
GE INDUSTRIAL SYSTEMS
- --------------------------------------------------------------------------------
GE INTERLOGIX
BUILDING A SECURITY GROWTH BUSINESS
Lloyd Trotter
CEO, GE Industrial Systems
Ken Boyda
CEO, GE Interlogix
June 20, 2003
THIS PRESENTATION INCLUDES CERTAIN "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE
STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT EXPECTATIONS AND ARE SUBJECT TO
UNCERTAINTY AND CHANGES IN CIRCUMSTANCES. ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THESE EXPECTATIONS DUE TO CHANGES IN GLOBAL POLITICAL, ECONOMIC, BUSINESS,
COMPETITIVE, MARKET AND REGULATORY FACTORS. MORE DETAILED INFORMATION ABOUT
THOSE FACTORS IS CONTAINED IN GE'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GE INDUSTRIAL SYSTEMS
- --------------------------------------------------------------------------------
Heritage Segment $5.3B
- ----------------- ----------------------------------------------------------
Electrical CHANNELS CUSTOMERS SERVED $B/GROWTH %
Distribution -------- ---------------- -----------
& [GRAPHIC] o Distribution o Industrial $29
Control o Direct o Commercial 2-3%
$2.2 o Residential
- ----------------- ----------------------------------------------------------
Process
Automation [GRAPHIC] o Distribution o Industrial $55
$1.9 o Direct o Utility 3-4%
- ----------------- ----------------------------------------------------------
Transmission
& [GRAPHIC] o Direct o Utility $18
Distribution o Distribution o Industrial 1-2%
$0.8
- ----------------- ----------------------------------------------------------
Reliable
Power [GRAPHIC] o Direct o Telecomm $19
$0.4 o VAR's o Datacomm 3-5%
o Reps o Commercial
- ----------------- ----------------------------------------------------------
o MARKET SIZE $100B, GDP GROWTH MODEL
o MATURE MARKET
o BROAD CHANNEL REACH
------------------------------------------------------
CONTINUED STEADY GROWTH FOR HERITAGE PRODUCT OFFERINGS
------------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
GE INDUSTRIAL SYSTEMS
- --------------------------------------------------------------------------------
New Business Segments $1B+
CHANNELS CUSTOMERS SERVED $B/GROWTH%
- ----------------- ----------------------------------------------------------
Security [GRAPHIC] o Installers o Commercial $29
$1.0 o VAR's o Residential ~10%
o Distribution o Industrial
- ----------------- ----------------------------------------------------------
Sensors [GRAPHIC] o Direct o Pharmaceuticals $19
$0.3 o OEM o Aerospace 8-10%
o Process Control
- ----------------- ----------------------------------------------------------
o Market Size $53B
o ~10% Growth
o Patentable Technologies
o High Contribution Margin - 55%
o Fragmented Markets
o Different Channels - Same End User
--------------------------------------------
CREATING NEW, PROFITABLE HIGH-TECH PLATFORMS
--------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WHY SECURITY?
- --------------------------------------------------------------------------------
o Environment Driving Long Term $127B Market
Market Growth and Innovation
[GRAPHIC]
o Insurance/Liability Risk
Accelerating Penetration
o Very Fragmented Industry
o Security Becoming an Enterprise Challenge...not just "Facilities"
...Information AND Physical Security
o Technology Revolution Coming... e.g. Digital Video ...Lots of Room to
Change the Game
o Huge Opportunities in New Detection Modalities
----------------------------------------------------
DYNAMICS PLAY TO GE TECHNOLOGY AND SERVICE STRENGTHS
----------------------------------------------------
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
GLOBAL SECURITY INDUSTRY
- --------------------------------------------------------------------------------
$127B GLOBAL
SECURITY INDUSTRY
$74B SERVICE FOCUS $53B PRODUCT FOCUS
$24B $50B
MONITORING GUARD/PROTECTION $29B ELECTRONICS $24B MECHANICAL
SERVICES PRODUCTS PRODUCTS
Growth 7-8% 2-3% 10+% 2-3%
Profitability ~15% 0-5% ~15+% 5-10%
----------------------------------------
FOCUS ON HIGH GROWTH ELECTRONIC PRODUCTS
...AND DEVELOP NEW SERVICES MODEL
----------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define &
BUILDING GE SECURITY BUSINESS Launch
- --------------------------------------------------------------------------------
DEFINE &
LAUNCH --> RESHAPE --> BUILD-OUT
o DEFINE THE SEGMENTS ... $29B, 2-3X GDP Growth, High ROTC
o LAUNCH THE PLATFORM ... Interlogix and Ion Track Acquisitions
o RESHAPE THE GE WAY ... Integrate Efficiently, Transfer GE Technology, Lead
Key Industry Shifts, Develop Profitable Service Model
o DISCIPLINED BUILD-OUT ... Organic and Inorganic
---------------------------------------------
PROVEN GE APPROACH TO BUILD GROWTH BUSINESSES
---------------------------------------------
- --------------------------------------------------------------------------------
3
ELECTRONIC SECURITY MARKET Define &
Launch
- --------------------------------------------------------------------------------
MARKET
($ Billion/Growth Rate)
$53B Access Control [GRAPHIC] Controlled Access for
- ----------- $4B/+11% Workplace Safety
Equipment Growth
$29 Rates
- ----------- 10-20% Intrusion [GRAPHIC] Property Protection
Monitoring $9/+6% and Family Safety
$24
- -----------
INDUSTRY Fire Services [GRAPHIC] Fire Protection and
SALES -5% $5/+4% Prevention
Video [GRAPHIC] Equipment for
$4/+14% Surveillance and
Intelligent Sensing
Trace Detection/ [GRAPHIC] Explosive and Drug
X-Ray/High Risk Detection
$7/+20%
------------------------------------------------------------
AN INDUSTRY UP FOR GRABS ... FAST GROWTH AND VERY FRAGMENTED
...10,000+ COMPANIES PROVIDE/INTEGRATE EQUIPMENT
------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define &
ELECTRONIC SECURITY MARKET Launch
- --------------------------------------------------------------------------------
MARKET
($ Billion/Growth Rate)
$53B Access Control
- ----------- $4B/+11%
Equipment Growth
$29 Rates OP 10-15%
- ----------- 10-20% Intrusion
Monitoring $9/+6%
$24
- -----------
INDUSTRY Fire Services
SALES -5% $5/+4%
OP 20-25%
Video
$4/+14%
Trace Detection/
X-Ray/High Risk
$7/+20%
----------------------------------------------------------------
ATTRACTIVE, PROFITABLE GROWTH WHERE TECHNOLOGY CAN DIFFERENTIATE
----------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
Define &
LAUNCH - PLATFORM ACQUISITIONS Launch
- --------------------------------------------------------------------------------
THE PLATFORM THE MODALITIES INTERLOGIX AND ION TRACK BRING:
$1B+ Access Control o Broad Customer Offerings
- -----------
Ion Track
4Q'02
Interlogix Intrusion o Strong Technology Portfolio
1Q'02 X Digital Video & Wireless
X Trace Detection
Video
o Product Innovation Cultures
X 38 new launches in '02
Trace X 52 scheduled launches '03
Detection
o Geographic and End-market Balance
o Strong Customer Relationships,
Including 75% of Fortune 100
-------------------------------------------------------------
GE ALREADY A MEANINGFUL PLAYER -- PRODUCT, BRAND + REPUTATION
-------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define &
LAUNCH -- PLATFORM ACQUISITIONS Launch
- --------------------------------------------------------------------------------
ADDED KEY TECHNOLOGIES
Organic Growth
--------------
~$160
--------------
Acquisitions ----------------
------------ ~$1B Run Rate
~$100 ----------------
------------
Interlogix X Kilsen - Fire
& Ion Track X Infographics - Access Systems
- ------------ X Fiber Solutions - Networking
~$740 X MAS - Monitoring, Productivity
- ------------
- --------------------------------------------------------------------------------
'02 '03E
--------------------------------------------
FROM CONCEPTION TO $1B BUSINESS IN 18 MONTHS
--------------------------------------------
- --------------------------------------------------------------------------------
5
- --------------------------------------------------------------------------------
Define & --> Reshape
ACQUISITION INTEGRATION Launch
- --------------------------------------------------------------------------------
o Integration Leader Appointed to GE BRINGS:
each acquisition o Resources / People
X Sourcing, Technology, BD, etc.
o Team of functional experts X Global Research Center
assigned full time X Acquisition Integration
Expertise
o Formal documented Integration o Transferable Technologies
progress begins "Day 1"... X Video and Data Management
X Advanced Sensors and Detection
Science
o Progress routinely pulsed by X Global Research Center Programs
global leadership team and CFO o Brand, Channel Strength, Global Reach
X Traditional GEA and GEIS Channels
[GRAPHIC] X GE "Verticals"
X Global Presence
o Market-Back Customer Focus
---------------------------
GE "SPRINGBOARD FOR GROWTH"
---------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & --> Reshape
EXECUTE THE GE WAY Launch
- --------------------------------------------------------------------------------
KEY PRIORITIES
o Customer Alignment
- -----------------------------
THRIVE IN CHANGING o Globalization
ENVIRONMENT
X Transform the Enterprise o Advance Digital Video Position
... HUGE INNOVATION OPPORTUNITY
X From Devices to Knowledge --> ... LEARN FROM GE MEDICAL EXPERIENCE
X Convergence of Data o Lead the Enterprise Security Shift
... Build Systems and o New Technologies for High Risk Detection
Service Franchise ...BUILD "MEDICAL-LIKE" SYSTEMS BUSINESS
- -----------------------------
o Build-Out the Product Portfolio
-------------------------------------------------------
HUGE GROWTH OPPORTUNITY ... SOLVING INDUSTRY CHALLENGES
-------------------------------------------------------
- --------------------------------------------------------------------------------
6
- --------------------------------------------------------------------------------
Define & --> Reshape
CUSTOMER ALIGNMENT Launch
- --------------------------------------------------------------------------------
------------------- ------------------- -------------------- ------------------
Residential Commercial Enterprise & Government
Home Owner Small Business Corporate
------------------- ------------------- -------------------- ------------------
------------------- ------------------- -------------------- ------------------
Customer Comfort, Property Protection Safety, Information Homeland Security,
Requirements Safety Employee/Customer Integration Safety
Safety
------------------- ------------------- -------------------- ------------------
------------------- ------------------- -------------------- ------------------
Global Controls & Wireless Intrusion Detection Access & Full Inspection &
Technology Web Enabled Video System Detection
Centers Services Integration
------------------- ------------------- -------------------- ------------------
------------------- ------------------- -------------------- ------------------
Vertical Home Assurance Retail, Gaming Banking/Automotive Homeland Security
Segments Premise Mgt. Education Corporate 500 Cargo/Ports
Healthcare Building Mgt. Cos. Airports/Utilities
------------------- ------------------- -------------------- ------------------
------------------- ------------------- -------------------- ------------------
Channels to National Companies National Systems Integrators Contractors
Market Mega Merchandisers [ILLEGIBLE] National Installers
Local Dealers
------------------- ------------------- -------------------- ------------------
------------------------------------------------------------
SATISFY DISTINCT REQUIREMENTS FOR MULTIPLE CUSTOMER SEGMENTS
------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & --> Reshape
VERTICAL INDUSTRY INITIATIVES Launch
- --------------------------------------------------------------------------------
WATER / WASTEWATER
[GRAPHIC] ENERGY
[GRAPHIC] [GRAPHIC] OIL & GAS
[GRAPHIC] HEALTHCARE
------------------------------------------------------------------------
DRIVING PARTNERSHIP OPPORTUNITIES ACROSS GE BUSINESSES... KEY INDUSTRIES
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7
- --------------------------------------------------------------------------------
Define & --> Reshape
VERTICAL INDUSTRY INITIATIVES Launch
- --------------------------------------------------------------------------------
GE HEALTHCARE IT: FUTURE OF HEALTHCARE
X Better Patient Care
X Better Caregiver Productivity
Diagnostic Monitoring
Images [GRAPHIC] Devices
GE INTERLOGIX DIGITAL
VIDEO
Clinical IT Real Time Supervision
------------------------------------------
BRINGING TECHNOLOGY TO OTHER GE BUSINESSES
------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & --> Reshape
GLOBALIZATION Launch
- --------------------------------------------------------------------------------
$29B Global Market GE INTERLOGIX $1B(X) REVENUES $4B
[PIE CHART] [BAR GRAPHS]
Asia - 4% Americas '03 '06
U.S. - 30% $8.7 $.6B $2.4B
Europe - 35% $10.2
Asia - 20% $5.7 Americas '03 '06
Other - 15% $4.4 - $0.1B
Europe '03 '06
~$1B GE '03 Sales $.3B $1.0B
[PIE CHART]
Asia/Row 5% Europe '03 '06
U.S. 67% - $0.2B
W. Europe 28%
Asia '03 '06
$.1B $0.3B
Asia '03 '06
- $0.1B
---------------------------------------------
BUILD ON GE GLOBAL DISTRIBUTION CAPABILITIES
---------------------------------------------
- --------------------------------------------------------------------------------
8
- --------------------------------------------------------------------------------
Define & --> Reshape
TECHNOLOGY REVOLUTION Launch
- --------------------------------------------------------------------------------
o Environment Driving Accelerated Security Deployment
o Video Systems Fastest Growing Technology
o Digital Video Conversion is Inevitable
- Only Viable Solution to Acquisition, Transmission, Review,
Archiving Challenges
- Represents an Explosion of "Data" to Be Reviewed
o Intelligent Video Tools Critical to Effectiveness... Performance and Cost
- More Guards Staring at More Screens Not the Answer
- Enterprise Systems
o Integration of Detection Technologies
- Multiple Detection Systems within an Enterprise
- Multiple Detection Technologies within an Integrated System
-----------------------------------------------------------
TECHNOLOGY LEADERSHIP "UP FOR GRABS" ... GE WELL POSITIONED
-----------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & --> Reshape
WHY DIGITAL VIDEO? Launch
- --------------------------------------------------------------------------------
MEDICAL SYSTEMS EXPERIENCE
o Digital Imaging Modalities Provide Better o Rapid Digital Growth; Analog Shrinks
Capabilities and Diagnostic Information vs.
Film / Analog (VCR) --> [GRAPHIC] DIGITAL +40% AAGR
ANALOG (8)% AAGR
o Customers Drive Innovation and New --> o Software / Upgrades Aftermarket Grows
Software / Visualization Capabilities
[GRAPHIC]
o Massive Amount of Data Challenges User o Smart Tools Improve User Performance
(Physician) Effectiveness --> o Detection Rate Improved 25% DIGITAL X-RAY AND
o Esp. in High Volume / Low "Findings" o 20 sec vs. 30 min Review CAD IN LUNG /
Applications o 2nd Set of Eyes ... Never Gets Tired BREAST SCREENING
o Expansion of Capabilities Drives --> o Fast Growing Healthcare IT Business
Investment for Data Mgt. and Archiving o $2B business in 2003 from $0 in 1998
------------------------------------------------------
COMPELLING PRECEDENT ... LOTS OF GE WINNING EXPERIENCE
------------------------------------------------------
- --------------------------------------------------------------------------------
9
- --------------------------------------------------------------------------------
Define & --> Reshape
WHY DIGITAL VIDEO? Launch
- --------------------------------------------------------------------------------
ONLY VIABLE SOLUTION TO ACQUISITION, ------------------------------
TRANSMISSION, REVIEW, ARCHIVING CHALLENGES VIDEO -- ~$18 B INSTALLED BASE
------------------------------
1 DSR ARCHIVES > A MONTH OF FULLY [PIE CHART] [PIE CHART]
SEARCHABLE 24x7 SURVEILLANCE VIDEO
'03 '06E
[GRAPHIC] Digital $ .5B $3.8B
Analog 3.2B $2.5B
Total $3.7B $6.3B
NETWORKED VIDEO DELIVERS GREAT SUCCESS FACTORS
MONITORING RESOURCE PRODUCTIVITY
X Video Compression
[GRAPHIC] X Smart Tools - Intelligence
and Alerts
X Networked -- Accessible
"Open" Design
------------------------------------------
BUILD ON GE'S DIGITAL TECHNOLOGY STRENGTHS
------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & --> Reshape
COMPRESSION TECHNOLOGY Launch
- --------------------------------------------------------------------------------
ETREPPID(TM) VIDEO COMPRESSION -- GE EXCLUSIVE
- ----- ------
TODAY FUTURE
- ----- ------
o Video storage requires lots of data o eTreppid storage requirements are
space 1/10TH THE SIZE, when compared to
current compression technology,
[GRAPHIC] while improving video quality
o Transmitting video requires lots of [GRAPHIC]
data bandwidth
o eTreppid reduces bandwidth
[GRAPHIC] requirements to 1/10 THE SIZE,
making it compatible with existing
networks
[GRAPHIC]
-----------------------------
KEY ENABLER TO DIGITAL GROWTH
-----------------------------
- --------------------------------------------------------------------------------
10
- --------------------------------------------------------------------------------
INTELLIGENT VIDEO
- --------------------------------------------------------------------------------
----------------------------------------------------------------
VIDEOIQ(TM)--RECOGNIZING EVENTS FROM VIDEO
PROBLEM: [GRAPHIC]
o Number of guards scales linearly with number of cameras.
o Each guard can only watch a limited number of screens.
o Most video shows nothing of significance.
----------------------------------------------------------------
RESULT:
o Delivers better security - always watching
o Instructs guard on what to look for [GRAPHIC]
o Fewer false alarms and more intelligent alerts
o Guard productivity - can monitor more cameras
-----------------------------------------
IMPROVE USER PRODUCTIVITY AND PERFORMANCE
-----------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NETWORKED VIDEO
- --------------------------------------------------------------------------------
----------------------------------------------------------------
LINKING SITES TO REMOTE MONITORING
PROBLEM: [GRAPHIC]
o Cameras tied by cables to local monitors
o Switching hardware scales with cameras
o Monitoring must be done locally
----------------------------------------------------------------
RESULT:
o Retrieve video from web world wide
o Controls 1000's of cameras and users [GRAPHIC]
o Saves equipment and installation costs
o Based on open standards
--------------------------
LOWERS INFRASTRUCTURE COST
--------------------------
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
INTEGRATION PLATFORM
- --------------------------------------------------------------------------------
Facility Commander ... Bringing It All Together
[GRAHIC] Industry Requires Full System Software Integration
Platform
o Open Platform - Freedom to choose best
technologies
o Single command and control console
o Improved situational awareness and response
o IT friendly based on industry standards
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HIGH RISK DETECTION
- --------------------------------------------------------------------------------
Existing Focus Future
[GRAPHIC] TRACE DETECTION "MEDICAL-LIKE" SYSTEMS BUSINESS
COORDINATED PASSENGER/
o ~$1B market BAGGAGE SECURITY CHECK POINT
o 13-15% growth [GRAPHIC]
o Ion Track --> INTEGRATED
SYSTEMS - VIDEO
Next Generation DETECTION &
SCREENING
[GRAPHIC] EDS/BULK DETECTION FROM GE GRC
o New $1-2B market
o 15% growth
o TSA Contract
-------------------------------------------------------
X MEDICAL/POWER SYSTEMS SENSOR TECHNOLOGY
X GEC RESEARCH IN ADVANCED RECOGNITION TECHNOLOGIES
-------------------------------------------------------
- --------------------------------------------------------------------------------
12
- --------------------------------------------------------------------------------
HIGH RISK DETECTION - NEXT GENERATION
- --------------------------------------------------------------------------------
COORDINATED PASSENGER / BAGGAGE SECURITY CHECK POINT
[GRAPHIC]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & -> Reshape -> Build-Out
BUILD OUT Launch
- --------------------------------------------------------------------------------
MARKET
($ BILLION/GROWTH RATE) PIPELINE - DEALS UNDER REVIEW
$53B
- ----------
ACCESS CONTROL 6 FOCUS
EQUIPMENT $4B/+11%
$29 X ADVANCED SENSORS
INTRUSION
$9/+6% X FIRE POSITION
GROWTH
RATES FIRE SERVICES 4 X DIGITAL VIDEO
$5/+4%
10-20% X HIGH RISK DETECTION
VIDEO 7
$4/+14%
TRACE DETECTION/ 3
X-RAY/HIGH RISK
$7/+20%
- ----------
MONITORING
$24
-5%
- ----------
INDUSTRY
SALES
----------------------------------------------------------------
ATTRACTIVE, PROFITABLE GROWTH WHERE TECHNOLOGY CAN DIFFERENTIATE
----------------------------------------------------------------
- --------------------------------------------------------------------------------
13
- --------------------------------------------------------------------------------
Define & -> Reshape -> Build-Out
GE SECURITY Launch
- --------------------------------------------------------------------------------
REVENUE
[BAR CHART]
MARKET GROWTH + GE CAPABILITIES + ACQUISITIONS $3-4B+
$1B ~$0.5 ~$0.5 $1-2B >20% MARGINS
>15+% ROTC
'03 '06
16% OP PROFIT >20% OP PROFIT
-------------------------------------------------
GREAT GROWTH MARKET IN EARLY STAGES OF DEFINITION
... LOT'S OF OPPORTUNITY - TECHNOLOGY MATTERS
-------------------------------------------------
- --------------------------------------------------------------------------------
14
[LOGO]
- --------------------------------------------------------------------------------
GE HEALTHCARE IT
BUILDING A HEALTHCARE GROWTH BUSINESS
Joe Hogan
CEO, GE Medical Systems
June 20, 2003
THIS PRESENTATION INCLUDES CERTAIN "FORWARD LOOKING STATEMENTS" WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE
STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT EXPECTATIONS AND ARE SUBJECT TO
UNCERTAINTY AND CHANGES IN CIRCUMSTANCES. ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THESE EXPECTATIONS DUE TO CHANGES IN GLOBAL POLITICAL, ECONOMIC, BUSINESS,
COMPETITIVE, MARKET AND REGULATORY FACTORS. MORE DETAILED INFORMATION ABOUT
THOSE FACTORS IS CONTAINED IN GE'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
[LOGO]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HEALTHCARE INDUSTRY
- --------------------------------------------------------------------------------
($ in Billions)
INCREDIBLE CHALLENGES
... GREAT CUSTOMERS
[BAR CHART]
$4T $1.5T $500B
GLOBAL SPEND U.S. SPEND CUSTOMER REVENUE
HOSPITAL CEO FOCUS...
PATIENT ACCESS
COMPETITIVE EXPANDING
MARKETING SERVICES
HOSPITAL PATIENT
CAPACITY THROUGHPUT
HOSPITAL CEO
STAFF INCREASING
RETENTION REIMBURSE
PATIENT MAXIMIZING
SAFETY REVENUE
STAFF SECURING
PRODUCTIVITY CAPITAL
-----------------------------------------------------
HUGE GROWTH OPPORTUNITY ... SOLVING CUSTOMER PROBLEMS
-----------------------------------------------------
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
GEMS TODAY
- --------------------------------------------------------------------------------
IMAGING SERVICES INFORMATION
10% 5-YR CAGR 15% 5-YR CAGR 20% 5-YR CAGR
- ------------------------- ----------------- ----------------------
FOCUS FOCUS FOCUS
o LEADING TECHNOLOGY o PARTNERSHIP o PHYSICIAN WORKFLOW
o RAPID GLOBALIZATION o WHOLE HOSPITAL o CLINICAL BENCHMARKS
o CLINICAL & PRODUCTIVITY o PERFORMANCE ROI o PAPERLESS, FILMLESS,
WIRELESS
- ------------------------- ----------------- ----------------------
FUNCTIONAL HOSPITAL CIS
PRODUCTIVITY
^ ^ ^
| [GRAPHICS] | [GRAPHICS] | [GRAPHICS]
| | |
ANATOMICAL MAINTENANCE PACS
---------------------------------------------------
HEALTHCARE GROWTH ENGINE... UNLIMITED OPPORTUNITIES
---------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WHY HCIT? ... HOSPITAL TRANSFORMATION
[GRAPHIC] [GRAPHIC] INDUSTRY DRIVERS GE FOCUS
->
PAPER PAPERLESS o MAKE DATA MOVE X DEVICES/IT
AS FAST AS PATIENT CONVERGENCE
o INTEGRATE AT POC X RAPIDLY
CREATING
INTEGRATED
ENTERPRISE
SYSTEM
- --------------------------------------------------------------------------------
[GRAPHIC] [GRAPHIC]
->
FILM FILMLESS o MODALITY DATA X ADVANCED PACS
EXPLOSION PROVIDER
o RISE OF X LEADER IN
TELERADIOLOGY WORKFLOW
INTEGRATION
(3D, RIS, HIS)
- --------------------------------------------------------------------------------
[GRAPHIC] [GRAPHIC]
->
WIRED WIRELESS o MOBILE CAREGIVING X TELEMETRY
o NETWORKS X CAREGIVER
CONVERGING COMMUNICATIONS
-------------------------------------------------------------
GEMS TECHNOLOGY & SIX SIGMA DRIVE CARE QUALITY AND EFFICIENCY
-------------------------------------------------------------
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
GE HEALTHCARE IT
- --------------------------------------------------------------------------------
WHAT GE ADDS GE HCIT OFFERING
o Integrated Products o Clinical Information
Systems
o Best Services Platform
o Cardiology Information
o Financing Portfolio Systems
o Six Sigma Workflow o Radiology Information
Systems
o Leadership Training -> [GRAPHIC] <-
o Patient Monitoring
GE "DNA" Systems
o Six Sigma o Diagnostic Cardiology
Systems
o Globalization
o Clinical IT Networks
o Process Rigor
o Clinical IT
o Digitization Implementation
o Imaging Quality o Data Mining
o Clinical Expertise o Industry Benchmarking
& Credibility
o Training/education
IMPROVE HOSPITAL VITALITY BETTER CLINICAL OUTCOMES
o JUST 4% PROFIT MARGINS o MEDICAL ERRORS #8 KILLER
o REIMBURSEMENT [DOWN ARROW]; o LIMITED CARE QUALITY METRICS
COSTS [UP ARROW] ... NO STANDARDS
-------------------------------------------------------
TECHNOLOGY + GE "DNA" = IMPROVED HEALTHCARE PERFORMANCE
-------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WHERE TO FOCUS?
- --------------------------------------------------------------------------------
COMPOSITE OF SURGICAL PATIENT IN 2000
[Bar graph omitted regarding composite of surgical patient in 2000 which
reflects cost and opportunity for error.]
IDEAL OPPORTUNITY TO LEVERAGE SIX SIGMA
-------------------------------------------------------------
OPPORTUNITY IS IN THE CLINICAL TRENCHES ... GE'S "SWEET SPOT"
-------------------------------------------------------------
- --------------------------------------------------------------------------------
3
- --------------------------------------------------------------------------------
BUILDING GE HEALTHCARE IT
- --------------------------------------------------------------------------------
Define & -> Reshape -> Build-Out
Launch
o DEFINE THE SEGMENTS ... $25B, 2-3X GDP Growth
o LAUNCH THE PLATFORM ... PACS and Marquette
o RESHAPE THE GE WAY ... Integrate Efficiently, Build on GE Clinical
Expertise, Drive Technology Evolution
o DISPLINED BUILD-OUT ... Organic and Inorganic
---------------------------------------------
PROVEN GE APPROACH TO BUILD GROWTH BUSINESSES
---------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & -->
HEALTHCARE IT Launch
- --------------------------------------------------------------------------------
THE MARKET
$80B GROWTH RATES EMR INTEGRATION WHY WE LIKE THIS BUSINESS
- ------ 10-15% OM
X FAST GROWING
$25 5-10% CARE-GIVER
PRODUCTIVITY X GOOD MARGINS, ROTC
10% OM
---------------- X FRAGMENTED
STRIKE ZONE
X ESSENTIAL
CLINICAL
ELECTRONICS X IN THE GE "SWEET SPOT"
10-15% 25% OM
- Customers
CLINICAL
NON-NEAR PATIENT - Products
20% OM
- Clinical Expertise
5-10% CLINICAL
NEAR PATIENT - Process & Digitization
25% OM
- ------ ----------------
$55 HOSPITAL ADMIN
15% OM
- ------
GROWING
10-15%
------------------------
GREAT GROWTH OPPORTUNITY
------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
Define & -->
CUSTOMER DIGITIZATION Launch
- --------------------------------------------------------------------------------
GE PACS SOLUTION HELPS MANAGE CLINICAL DATA EXPLOSION
BEST CLINICAL EFFICIENCY [GRAPHIC] --> [GRAPHIC]
FILM FILMLESS
o Workflow Integration (3D, RIS, HIS)
o First Mammo PACS.
o Integrated Radiology-Cardiology
Systems...
-----------------------------------
BEST IN IT INFRASTRUCTURE REVENUE
($MM)
o Designed for 100% Uptime [BAR CHART]
o Off Site Enterprise Repository
Total $300 $415 ~$530
EXPERIENCED BUYERS CHOOSE GE Service 35 ~50 ~65
PACS Equipment 265 365 465
o Brigham & Woman's, Baylor -----------------------------------
University, UCLA, Loyola of Chicago, '01 '02 '03
Duke University, Stanford U
o Tenet Healthcare, HCA <10%
ADOPTION
--------------------------------------------------------
RAPID GROWTH ... BUT EVEN BIGGER OPPORTUNITY BEYOND PACS
--------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & --> Reshape
IT/DEVICE CONVERGENCE STRATEGY Launch
- --------------------------------------------------------------------------------
[GRAPHIC] INTELLIGENCE IN THE BOX
o Traditional Best-in-Breed Approach ... Parameters,
Intelligence Algorithms, User-Interface, Platform
In Box o Information Convergence at the Point of Care
Network Infrastucture NETWORK INFRASTRUCTURE ... MOVE DATA ...
NOT PATIENTS
Clinical Decision o Enterprise Monitoring ... New Information System
Support Offerings
o Next-Gen Wireless Infrastructure for Mobile
Devices
o Mission Criticial and Life Critical Networks
[GRAPHIC] CLINICAL DECISION SUPPORT
o Alerting Systems
o Diagnostic Assistance
o Therapy Critiquing and Planning
o Image Recognition and Interpretation
-------------------------------------------------------------
GE VISION ... BRINGING THE PIECES TOGETHER AROUND THE PATIENT
-------------------------------------------------------------
- --------------------------------------------------------------------------------
5
- --------------------------------------------------------------------------------
Define & --> Reshape
INTELLIGENT DEVICES Launch
- --------------------------------------------------------------------------------
OLD BOX TO "NEW" CLINICAL DEVICE
"EXECUTION"
[GRAPHIC] --> [GRAPHIC]
TRADITIONAL FUTURE
o Disparate Monitors o Enterprise Wide
o Unconnected o Networked
o Parameter Centric o Patient Centric
o One-Way Info. Flow o Bi-Directional
KEY ACTIONS
o Embed Clinical Intelligence at POC in Monitor
o Develop Specific Care Area Monitors
o Every Patient Monitored $350M
CONVERGENCE AT POINT OF CARE
"GROWTH"
[GRAPHIC] [GRAPHIC]
MONITORING DEFIBRILLATORS
$3.0B $0.7B
-------
PATIENT
-------
[GRAPHIC]
PUMPS [GRAPHIC]
$1.7B ANESTHESIA
[GRAPHIC] $0.8B
RESPIRATORY
$2.9B
KEY ACTIONS
o Integrate for Real-Time Clinical Decision Support
o Acquire/Partner Next Devices
$7B
MARKET
---------------------------------------------------
GE CLINICAL EXPERTISE ADVANTAGE VS. PURE IT PLAYERS
---------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENTERPRISE WIRELESS Define & --> Reshape
Launch
- --------------------------------------------------------------------------------
GEMS WIRELESS GROWTH
[BAR CHART]
60% AGR
'00 $25
'03 $165
'06 $400
DRIVERS MARKET
o Miniaturization o Clinical Data Moves as Fast as Patient
o Wireless/Telemetry --> o Clinical Data Capture and Transfer
o Network Reliability 24x7... Anywhere in Enterprise
o Clinician Shortage o Continuous and Remote
o Caregiver Productivity Monitoring
o Workflow Flexibility and Design
- --------------------------------------------------------------------------------
KEY PRODUCTS
[GRAPHIC]
WMTS 802.11g KEY ACTIONS
[GRAPHIC] o Best Wireless Position
[GRAPHIC] o Six Sigma Workflow
Wearable o Monitor & Device Integration
Monitors [GRAPHIC] [GRAPHIC]
Voice over IP Mobile / Central
and Waveforms Station Tablet
------------------------------------------------------------
SEAMLESS AVAILABILITY OF LIFE & MISSION CRITICAL INFORMATION
------------------------------------------------------------
- --------------------------------------------------------------------------------
6
- --------------------------------------------------------------------------------
Define & --> Reshape
SOLUTIONS PROVIDER Launch
- --------------------------------------------------------------------------------
FIRST ALL-DIGITAL HEART HOSPITAL... [GRAPHIC]
o Free-standing, 88-Beds, Brand New
o Digitization for Better Patient Care $14M
o No Nursing Stations GE REVENUE
o No Medical Records Department
IMPROVING QUALITY PEDIATRIC CARE...
[GRAPHIC] o 373-Beds, $150MM Expansion
o Digitizing the OR ... Tracking
$25M Surgeries
GE REVENUE o 500+ GE Patient Monitors
GE DELIVERING:
o Info Anytime, Anywhere... GE DELIVERING:
o Lab Tests ... 3 Days -> 3 Secs [GRAPHIC] o OR "Mission Control"...
o Medical Errors... [DOWN ARROW] 45% Paperless, Filmless
o Report Turnaround... o More Certainty, Less Errors
Hours to Secs o 25% [UP ARROW] Utilization
-------------------------------------------------
TOTAL GE SOLUTION... "THE HOSPITAL OF THE FUTURE"
-------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & --> Reshape --> Build-Out
BUILD OUT - HEALTHCARE IT Launch
- --------------------------------------------------------------------------------
WHERE WE WERE WHAT WE DID WHERE WE ARE
MARKET '98 --------------- '03 ESTIMATE
INORGANIC
[BAR CHART] [BAR CHART]
Multiple
~$18B Acquisitions REV. ~$1.7B
--------------- OP ~$300MM
X Fast Growing --> + -->
X High Margins ---------------
X Fragmented ORGANIC
X Essential
------------------ Globalization
X GE POSITION = $0 Services
------------------ Cost
Integrated
Growing 10-15% ---------------
----------------------------------------------------
DISCIPLINED BLEND OF ACQUISITIONS AND ORGANIC GROWTH
----------------------------------------------------
- --------------------------------------------------------------------------------
7
- --------------------------------------------------------------------------------
Define & --> Reshape --> Build-Out
BUILD OUT - HEALTHCARE IT Launch
- --------------------------------------------------------------------------------
IT MARKET DATA ACQUISITION MARKET
$15B... 15% AAGR $10B... 10% AAGR
- -------------------------------- ------------------------------------ |_| Loral
Hospital Administration/Clinic EMR Integration
- -------------------------------- ------------------------------------ |_| Marquette
Finance Admin Decision Support Web Data Real-Time
- -------------------------------- Integration Model Information |_| MicroMedical
Billing ADT ------------------------------------
- -------------------------------- ------------------------------------ |_| Prucka
- -------------------------------- Caregiver Productivity
Clinical Non-Near Patient ------------------------------------ |_| SEC
- -------------------------------- Phone Pager Tablet 802.11B
Pharmacy Lab ------------------------------------ |_| Critikon
- -------------------------------- Clinical Electronics
Clinical Near Patient ------------------------------------ |_| DataCritical
- -------------------------------- Parameter Technology
Scheduling MPI Charge Cap ------------------------------------ |_| iPath
- -------------------------------- E A C P O C R
Order Entry/Results D m r e B a a |_| Medicalogic
- -------------------------------- b i r / r d
E A C P O C R u t l N d i |_| Millbrook
D m r e B a a l i o I i o
b i r / r d a c p C o l |_| BDM
u t l N d i t a U l o
l i o I i o o l o g
a c p C o l r g y
t a U l o y C y
o l o g a
r g y r
y C y e
a ------------------------------------
r
e
- --------------------------------
------------------------------
$25B MARKET GROWING AT ~10-15%
------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Define & --> Reshape --> Build-Out
ACQUISITION INTEGRATION Launch
Milwaukee SUCCESS FACTORS
[GRAPHIC] o Guild on GE Distribution ... Deep Sales
Cross-Training
Barrington
o Drive Product Integration ... Retain
[GRAPHIC] Engineering Talent
o Reduce Variable Costs ... LCC Mfg and
- ----------------------------- Sourcing Crunch
CONSOLIDATION INTO
"HCIT CAMPUS" o Back Office Cost Out ... IT Integration
- -----------------------------
------------------------------------------
BENEFITS SHOW IN SOLID YEAR 1 RESULTS
Rev Growth Profitability
Loral 30% 2X
iPath 45% (62%) -> 24%
MedicaLogic 69% (150%) -> 11%
Marquette QS 25% 1.5X
------------------------------------------
--------------------------------------------------
REPEATABLE PROCESS EXECUTED BY EXPERIENCED LEADERS
--------------------------------------------------
- --------------------------------------------------------------------------------
8
- --------------------------------------------------------------------------------
Define & --> Reshape --> Build-Out
GROWTH PLAN Launch
- --------------------------------------------------------------------------------
REVENUE
+ GE Capability ~$4.0B
-------- --------
+ Market Growth +$0.5
--------- -------- 30+%
+ Acquisitions +$1.0 AAGR
-------- ---------
+$1.0
~$1.7B --------
---------
--------------------------------------------------------------------
'03 SOLID FINANCIAL PERFORMANCE '06
EMBRACED GLOBALIZATION
~18% OP o 15% Growth in Europe; China Up 100% ~25%+ OP
BUILT CLINICAL IT PLATFORM
o Centricity(TM) and Mercury Architecture
o Best Image Management (Radiology & Cardio)
EXPANDED DEVICES CAPABILITY
-----------------------------------------------
GREAT PROGRESS SO FAR ... AN EVEN BETTER FUTURE
-----------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INDUSTRIAL GROWTH PLATFORMS
- --------------------------------------------------------------------------------
SALES DRIVERS
[BAR CHART] o Strong Underlying Demand
~20% o Share Gains Through Global Distribution
~$7B >$12B CAGR & New Products
'03 '06 Margins o Product Leadership with GE Technology
~20+%
o Expand Service Offerings
o Consolidating Acquisitions in Fragmented
Industries
------------------------------------
GE BUILD OUT PROCESS
X STEP #1 ... DEFINE MARKET & LAUNCH
X STEP #2 ... RESHAPE THE GE WAY
X STEP #3 ... DISCIPLINED BUILD OUT
------------------------------------
- --------------------------------------------------------------------------------
9