01—Abstract
Summary
Summary of the 10-K filed February 19, 2010. Cited figures are marked; the original filing is the authoritative source.
General Electric Company (GE) in 2009 navigated a challenging economic landscape, reporting consolidated revenues of $84.3 billiona, a decrease from $97.2 billion in 2008.
The company's diversified business segments, including Energy Infrastructure, Technology Infrastructure, NBC Universal, Capital Finance, and Consumer & Industrial, all experienced impacts from the weakened global economy. GE Capital, the financial services arm, saw a significant decline in earnings, down 80%b in 2009, reflecting broader financial market disruptions, increased loan loss provisions, and a strategic initiative to reduce its ending net investment. Despite these challenges, GE maintained its focus on core industrial businesses and initiated strategic actions such as the planned sale of NBC Universal to Comcast, which would result in GE owning a 49% stake in the new entity.
GE continued to invest in research and development, totaling $3.3 billionc in 2009, with a significant portion allocated to its Technology Infrastructure segment, particularly in Aviation. The company also took steps to strengthen its liquidity position, including reducing its dividend and managing its commercial paper borrowings. While facing headwinds, GE expressed optimism about a potential stabilization in the global economy and a strong backlog positioning it for future growth.
02—Key points
Key Highlights
- Consolidated revenues for 2009 were $84.3 billion, down from $97.2 billion in 2008, reflecting challenging economic conditions.
- GE Capital's earnings declined significantly (down 80% in 2009), attributed to financial market disruptions and a strategic reduction in its investment base.
- The company announced a significant strategic move to sell NBC Universal assets to Comcast, retaining a 49% interest in the new entity.
- GE invested $3.3 billion in research and development, with a substantial portion directed towards the Technology Infrastructure segment, particularly Aviation.
- GE took actions to bolster liquidity, including a 68% reduction in its quarterly common stock dividend, saving approximately $9 billion annually.
- The company maintained a strong backlog, entering 2010 with a positive outlook for growth in 2011 and 2012, indicating confidence in its industrial segments.
- GE's credit ratings were downgraded by S&P and Moody's in March 2009 but maintained stable outlooks, with short-term ratings affirmed at the highest levels.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, General Electric Co kept $0.07.
- Revenue$154.40B100.0%
- Cost of revenue−$50.58B32.8%
- Gross profit$103.82B67.2%
- Operating costs−$88.21B57.1%
- Operating income$15.61B10.1%
- Interest, other & tax−$4.58B3.0%
- Net income$11.03B7.1%
Where FY2009 revenue went
$154.40B- Other operating costs: $70.08B, 45% of revenue
- Cost of revenue: $50.58B, 33% of revenue
- Net income: $11.03B, 7.1% of revenue
- R&D: $3.29B, 2.1% of revenue
- SG&A: $14.84B, 9.6% of revenue
- Interest, other & tax: $4.58B, 3.0% of revenue
Kept 7.1% as net incomeNet income $11.03B · 7.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 19, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $154.40B$179.77B | −14.1% |
| Cost of Revenue | $50.58B$54.60B | −7.4% |
| Gross Profit | $103.82B$125.17B | −17.1% |
| R&D Expenses | $3.29B$3.11B | +5.6% |
| SG&A Expenses | $14.84B$14.40B | +3.1% |
| Operating Expenses | $144.57B$161.81B | −10.7% |
| Operating Income | $15.61B$21.85B | −28.6% |
| Interest Expense | $17.70B— | — |
| Net Income | $11.03B$17.41B | −36.7% |
| EPS (Basic) | $8.08$13.76 | −41.3% |
| EPS (Diluted) | $8.08$13.76 | −41.3% |
05—Questions
Frequently Asked Questions
What was GE's overall financial performance in 2009?
In 2009, GE reported consolidated revenues of $84.3 billion, a decrease from $97.2 billion in 2008. Net earnings attributable to the Company were $11.0 billion, down from $17.4 billion in 2008, largely impacted by a significant decline in earnings from GE Capital.
How did the financial services segment (GE Capital) perform?
GE Capital experienced a substantial downturn, with earnings attributable to the Company falling 80% in 2009. This was primarily due to challenging economic conditions, disruptions in capital and credit markets, and higher provisions for losses on financing receivables. GE Capital also undertook a strategic initiative to reduce its ending net investment by approximately $53 billion in 2009.
What were GE's major strategic initiatives during 2009?
Key strategic initiatives included the planned sale of NBC Universal assets to a new entity in partnership with Comcast, whereby GE would retain a 49% interest. GE also focused on reducing the size of GE Capital and strengthening its liquidity position. Furthermore, the company continued its investment in R&D, totaling $3.3 billion for the year.
How did GE manage its liquidity and capital position?
GE took several actions to enhance liquidity and capital, including reducing its quarterly common stock dividend by 68% to $0.10 per share, which saved approximately $9 billion annually. The company also managed its commercial paper borrowings and maintained significant cash and equivalents ($72.3 billion at year-end 2009) and committed credit lines.
06—Continue