GE Update fom FIIG Conclusion The GE business model, one of a...

GE Update fom FIIG

Conclusion
The GE business model, one of a diversified conglomerate, continues to deliver during troubled times. Strong
growth in emerging markets India and China and large new business volumes on the back of global stimulus
spending, particularly on energy infrastructure, are testament to that business and geographic diversity.
Revenues and earnings are lower but GE remains profitable as does its financial services arm GECS. Non-
performing loans and delinquencies at GECS may rise further, but these are countered by growing reserve
coverage of $6.6bn and good liquidity with $52bn cash and equivalents on the balance sheet at 30 June 2009.

GE has somewhat lost its darling equity market status with lower share prices, a cut dividend and stalled growth.
Negative newspaper reports concentrate on equity decline but many of the company/government measures
support bondholders and consequently bond spreads have contracted over the past four to five months and this
trend is expected to continue, albeit at a slower rate.

Interim results do not alter FIIG Research’s favourable assessment of GE. Management continue to meet goals
and objectives and have a clear vision for the Company. While tough times ensue, it’s well placed to win tenders
for government stimulus spending. A change in economic conditions should see it thrive with fewer competitors.

So the cash from GE to SLX looks sound moving forward.