UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 

Date of Report (Date of earliest event reported)  March 31, 2015
 
 
General Electric Company
 
 
(Exact name of registrant as specified in its charter)
 
 
New York
 
001-00035
 
14-0689340
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
 
 
 
3135 Easton Turnpike, Fairfield, Connecticut
 
 
 
06828-0001
(Address of principal executive offices)
 
 
 
(Zip Code)
 
 
 
 
 
Registrant's telephone number, including area code   (203) 373-2211
 
 
 
 
(Former name or former address, if changed since last report)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 

Item 1.01. Entry into a Material Definitive Agreement.

On April 10, 2015, General Electric Company (the "Company") announced a plan to reduce the size of its financial services businesses through the sale of most of the assets of its wholly owned subsidiary, General Electric Capital Corporation ("GECC") over the next 24 months, and to focus on continued investment and growth in the Company's industrial businesses.  Under the new plan, which was approved on April 2, 2015 and aspects of which were approved on March 31, 2015, the Company will retain certain GECC businesses, principally its vertical financing businesses—GE Capital Aviation Services, Energy Financial Services and Healthcare Equipment Finance—that directly relate to the Company's core industrial businesses.  The assets planned for disposition, in addition to Real Estate (as described under Item 8.01 below), include most of Commercial Lending and Leasing and all Consumer platforms (including all U.S. banking assets).  The Company will execute this strategy using an efficient approach for exiting non-vertical assets that works for the Company's and GECC's debt holders and the Company's shareowners.  An element of this approach involves a merger of GECC into the Company to assure compliance with debt covenants as GECC exits non-vertical assets, and the creation of a new intermediate holding company to hold GECC's businesses after the merger.   The Company has discussed the plan, aspects of which are subject to regulatory review and approval, with its regulators and staff of the Financial Stability Oversight Council ("FSOC") and will work closely with these bodies to take the actions necessary over time to terminate the FSOC's designation of GECC (and the new intermediate holding company, as applicable) as a systemically important financial institution ("SIFI").

As part of the Company's plan described above, on April 10, 2015, the Company and GECC entered into an amendment to their existing financial support agreement.  Under this amendment (the "Amendment"), the Company has provided a full and unconditional guarantee (the "Guarantee") of the payment of principal and interest on all tradable senior and subordinated outstanding long-term debt securities and all commercial paper issued or guaranteed by GECC identified in the Amendment. In the aggregate, the Guarantee applies to approximately $210 billion of GECC debt.  The Guarantee replaces the requirement that the Company make certain income maintenance payments to GECC in certain circumstances.  GECC's U.S. public indentures are concurrently being amended to provide the full and unconditional guarantee by the Company set forth in the Guarantee.

The description of the Amendment (including the Guarantee) is qualified in its entirety by reference to the full text of the Amendment, which is being filed as Exhibit 10 and is incorporated herein by reference.

Item 2.02. Results of Operations and Financial Condition.

On April 10, 2015, the Company issued a press release announcing the Company's plan described above to dispose of most of its financial services assets.  A copy of the Company's press release is being furnished as Exhibit 99.

The information furnished pursuant to this Item 2.02, including Exhibit 99, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information included under Item 1.01 is incorporated herein by reference.

Item 2.05. Costs Associated with Exit or Disposal Activities.

In connection with the Company's plan to dispose of most of its financial services assets as described under Item 1.01 above (and incorporated herein by reference), the Company estimates it will incur approximately $23 billion in after-tax charges through 2016, approximately $6 billion of which are expected to result in future net cash expenditures.  These charges are expected to relate to: business dispositions, including goodwill allocations (approximately $13 billion), tax expense related to repatriation of earnings and deferred tax assets (approximately
(2)
$7 billion), and restructuring and other charges (approximately $3 billion).  Approximately $16 billion of after-tax charges are expected to be recorded in the first quarter of 2015 in connection with the plan, which includes tax expense related to repatriation of earnings and deferred tax assets, asset impairments due to shortened hold periods, and charges on businesses held for sale, including goodwill allocation.

Item 8.01 Other Events.

As part of the Company's plan to dispose of most of its financial services assets as described under Item 1.01 above, the Company announced today that it has agreed to sell the substantial majority of GECC's Real Estate debt and equity portfolio to funds managed by The Blackstone Group (who, at closing, intends to sell a portion of this portfolio to Wells Fargo & Company), and also has letters of intent with other buyers for the majority of the remaining commercial real estate assets.  In total, these deals are valued at approximately $26.5 billion.

Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibit is being filed as part of this report:

10 Amended and Restated Agreement, between General Electric Company and General Electric Capital Corporation, dated April 10, 2015

The following exhibit is being furnished as part of this report:

99 Press release, dated April 10, 2015, issued by General Electric Company

T his document contains "forward-looking statements" – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," or "target." Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about our announced plan to reduce the size of our financial services businesses, including expected cash and non-cash charges associated with this plan; expected income; earnings per share; revenues; organic growth; margins; cost structure; restructuring charges; cash flows; return on capital; capital expenditures, capital allocation or capital structure; dividends; and the split between Industrial and GE Capital earnings. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: obtaining (or the timing of obtaining) any required regulatory reviews or approvals or any other consents or approvals associated with our announced plan to reduce the size of our financial services businesses; our ability to complete incremental asset sales as part of this plan in a timely manner (or at all) and at the prices we have assumed; changes in law, economic and financial conditions, including interest and exchange rate volatility, commodity and equity prices and the value of financial assets, including the impact of these conditions on our ability to sell or the value of incremental assets to be sold as part of this plan as well as other aspects of this plan; the impact of conditions in the financial and credit markets on the availability and cost of GECC's funding, and GECC's exposure to counterparties; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; pending and future mortgage loan repurchase claims and other litigation claims in connection with WMC, which may affect our estimates of liability, including possible loss estimates; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flows and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; GECC's ability to pay dividends to GE at the planned level, which may be affected by GECC's cash flows and earnings, financial services regulation and oversight, and other factors; our ability to convert pre-order commitments/wins into orders; the price we realize on orders since commitments/wins are stated at list prices; customer actions or developments such as early aircraft retirements or reduced energy demand and other factors that may affect the level of demand and financial performance of the major industries and customers we serve; the effectiveness of our risk management framework; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation and litigation; adverse
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market conditions, timing of and ability to obtain required bank regulatory approvals, or other factors relating to us or Synchrony Financial that could prevent us from completing the Synchrony Financial split-off as planned; our capital allocation plans, as such plans may change including with respect to the timing and size of share repurchases, acquisitions, joint ventures, dispositions and other strategic actions; our success in completing, including obtaining regulatory approvals for, announced transactions, such as the proposed transactions and alliances with Alstom, Appliances and Real Estate, and our ability to realize anticipated earnings and savings; our success in integrating acquired businesses and operating joint ventures; the impact of potential information technology or data security breaches; and the other factors that are described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2014. These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements.  We do not undertake to update our forward-looking statements.

This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.


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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
General Electric Company
 
 
 
(Registrant)
 
 
 
 
 
 
Date: April 10, 2015
 
/s/ Jeffrey S. Bornstein
 
 
 
Jeffrey S. Bornstein
Senior Vice President and Chief Financial Officer
 
 
 
 
 


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EXHIBIT 10
 
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES
 
AMENDED AND RESTATED AGREEMENT
 
AMENDED AND RESTATED AGREEMENT (the "Agreement"), dated April 10, 2015, by and between GENERAL ELECTRIC COMPANY, a New York corporation ("GE") and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation ("GE Capital").
WITNESSETH:
WHEREAS, GE owns all of the outstanding common stock of GE Capital;
WHEREAS, GE and GE Capital have approved a new plan announced on April 10, 2015 regarding GE Capital;
WHEREAS, GE and GE Capital consider it to be in their respective best interests that GE fully, irrevocably and unconditionally guarantee GE Capital's obligations under certain debt securities issued or guaranteed by GE Capital on the terms provided herein; and
WHEREAS, GE and GE Capital wish to amend and restate an agreement originally entered into on March 28, 1991 and previously amended and restated on October 29, 2009 and February 24, 2015 (the "Prior Agreement") on the terms provided herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual advantage and benefit of the parties hereto and other good and valuable consideration, the parties hereto hereby amend and restate the Prior Agreement in its entirety as follows:
1.
GE hereby fully, irrevocably and unconditionally guarantees, in accordance with the terms set forth in Appendix A hereto, the payment of the principal (including premium, if any) of and any interest (together with additional amounts, if any) on (A) any and all debt securities (with an original stated maturity in excess of 270 days) issued or guaranteed by GE Capital that are described on Annex I hereto, provided such debt securities are outstanding on the date of this Agreement ("Outstanding Debt Securities") and (B) any and all short-term debt securities outstanding and to be issued from time to time under the commercial paper programs described on Annex II hereto ("CP Securities").  Each party entitled to receive payments of principal (including premium, if any) and interest (together with additional amounts, if any) under the indentures, issuing and paying agency agreements, purchase agreements, program documents or other similar primary agreements or instruments related to the Outstanding Debt Securities or CP Securities (each, an "Applicable Instrument"), as determined thereunder, and no other party, is an intended third party beneficiary of the guarantee provided in this paragraph and in Appendix A.
 
2.
This Agreement may be amended without the consent of any party entitled to receive payments under the Outstanding Debt Securities or CP Securities (as determined by the Applicable Instrument) to add the holders of additional classes of debt as third party beneficiaries of this Agreement (including by adding additional debt securities to Annex I
(1)
 
or additional commercial paper programs to Annex II) or in a manner not adverse to any such party.  The parties hereto also reserve the right without the consent of any other party to amend the commercial paper programs described on Annex II hereto, provided that any amendment related to the guarantee provided by this Agreement that is not otherwise permitted, shall only be applied prospectively to CP Securities issued following the date of such amendment.
3.
This Agreement is not, and nothing herein contained and nothing done pursuant hereto by GE shall be deemed to constitute, a guarantee or assurance by GE of the payment of any indebtedness, obligation or liability of any kind or character whatsoever of GE Capital or any of GE Capital's direct or indirect subsidiaries, other than the Outstanding Debt Securities or CP Securities.
4.
This Agreement shall automatically terminate in the event: (a) GE assumes all obligations of GE Capital under, or as guarantor of, the Outstanding Debt Securities and CP Securities, whether by operation of law or otherwise or (b) as to each separate class of Outstanding Debt Securities or CP Securities program, the Applicable Instrument governing such Outstanding Debt Securities or CP Securities has been amended to include, or otherwise has the benefit of, a full and unconditional guarantee by GE substantially on the terms set forth in Appendix A hereto.
5.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
6.
This Agreement may be executed in counterparts, each of which when so executed and delivered shall be deemed an original, but such counterparts together shall constitute one and the same instrument. 
(2)
 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed the day and year first above written.

GENERAL ELECTRIC COMPANY

By: / s/ Jeffrey S. Bornstein ­­­­­­­­­­­­­­­­­­­­_______________________
Name: Jeffrey S. Bornstein
Title: Senior Vice President and Chief Financial Officer


GENERAL ELECTRIC CAPITAL CORPORATION

By: / s/ Keith S. Sherin___ ­­­­­­­­­­­­­­­­­­­­_______________________
Name:  Keith S. Sherin
Title:  Chairman, Chief Executive Officer and President
 
 
 
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APPENDIX A
GE GUARANTEE
 
FOR VALUE RECEIVED, GENERAL ELECTRIC COMPANY, a New York corporation (the "Guarantor") hereby fully, irrevocably and unconditionally guarantees (this "Guarantee") the payment of the principal (including premium, if any) of and any interest (together with any additional amounts payable in respect of withholding for or on account of taxes and other governmental charges, to the same extent, and subject to the same limitations and requirements under, the Applicable Instrument that would be required under the Applicable Instrument if the payment were being made by GE Capital or the applicable issuer)  on each Outstanding Debt Security and each CP Security (each, a "Security" and collectively the "Securities"), as the same shall become due and payable after any applicable grace period (whether at maturity or upon redemption, declaration or otherwise), to each party entitled to receive such payments under the Securities (as determined by the Applicable Instrument).  Defined terms used in this Guarantee and not otherwise defined herein shall have the meanings given to such terms in the Agreement to which this Appendix A is a part.
The Guarantor hereby agrees that its obligations hereunder shall be irrevocable and unconditional, irrespective of the validity, legality or enforceability of the Security to which this Guarantee applies, the absence of any action to enforce such Security, the recovery of any judgment against GE Capital (or the issuer of such Security guaranteed by GE Capital (such issuer, a "Guaranteed Issuer")) or any action to enforce the same or any insolvency, bankruptcy, reorganization or similar proceeding of or with respect to GE Capital (or, as applicable, the Guaranteed Issuer) or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby expressly waives, to the fullest extent permitted by applicable law, all rights of setoff, recoupment and counterclaim (provided that nothing herein shall prevent the assertions of such claims by separate suit or compulsory counterclaim), the benefit of any statute of limitations affecting Guarantor's liability hereunder, diligence, presentment, demand of payment, filing of claims with a court in the event of merger or insolvency bankruptcy, reorganization or similar proceeding of or with respect to GE Capital (or, as applicable, the Guaranteed Issuer), any right to require a proceeding first against GE Capital (or, as applicable, the Guaranteed Issuer), protest or notice with respect to said Security or the indebtedness evidenced thereby and all demands whatsoever and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in this Guarantee.   The Guarantor hereby further expressly waives all other defenses or benefits with respect to this Guarantee that may be afforded by applicable law limiting the liability of or exonerating guarantors as sureties.
An event of default under, non-payment of or acceleration of any series of the Securities shall entitle the holders thereof to exercise their rights and remedies against the Guarantor under this Guarantee in the same manner and to the same extent as they have the right to do so against GE Capital (or, as applicable, the Guaranteed Issuer) under the terms of the Applicable Instrument governing such Securities (or the guarantee of GE Capital related thereto) as originally issued (or as amended pursuant to its terms).  If any principal or interest on any Security is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, reorganization or
(4)
similar proceeding of or with respect to GE Capital (or, as applicable, the Guaranteed Issuer), the Guarantor's obligations hereunder with respect to such payment will be reinstated as though such payment has been due but not made at such time.
Until the holder of said Security has received, from GE Capital (or, as applicable, the Guaranteed Issuer) or out of its or their assets, or from the Guarantor or out of its assets, moneys which such holder is entitled to retain for its own account, equal in the aggregate to the unpaid principal amount of (including premium, if any, on) said Security plus all accrued and unpaid interest (together with additional amounts, if any) thereon, the Guarantor will remain liable on this Guarantee.
The Guarantor shall be subrogated to all rights of the holder of the Security to which this Guarantee applies against GE Capital (or, as applicable, the Guaranteed Issuer) in respect of any amounts paid by the Guarantor pursuant to the provisions of this Guarantee; provided that the Guarantor shall not be entitled to enforce or receive any payment arising out of, or based upon, such right of subrogation until all amounts due on or to become due on or in respect of all the Securities to which this Guarantee relates shall have been paid in full or duly provided for.
This Guarantee constitutes a guarantee of payment and not collection and is unsecured and ranks equally and ratably with all other unsecured obligations of the Guarantor; provided such Guarantee with respect to any subordinated class of Securities (each Applicable Instrument governing such class of Securities, a "Subordinated Instrument") will be subordinated to the other obligations of the Guarantor to the same extent that GE Capital's (or, as applicable, the Guaranteed Issuer's) obligations under such Subordinated Instrument are subordinated to other obligations of GE Capital (or, as applicable, the Guaranteed Issuer), it being understood that (i) the relevant subordination provisions and related enforcement provisions set forth in each such Subordinated Instrument shall apply mutatis mutandis to this Guarantee and the Guarantor in respect of this Guarantee and (ii) this Guarantee is not intended, and shall not be construed, to change the relative payment priorities of such Subordinated Instruments as against other obligations of GE Capital (or, as applicable, the Guaranteed Issuer).
The Guarantor hereby represents and warrants that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this Guarantee, and to constitute the same the legal, valid and binding obligation of the Guarantor enforceable in accordance with its terms, except that enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization and other laws of general application relating to or affecting the rights of creditors or by general principles of equity, including the limitation that specific performance, being an equitable remedy, is discretionary and may not be ordered, have been done and performed and have happened in compliance with all applicable laws.
No recourse for the payment on this Guarantee, or for any claim based hereon or otherwise in respect hereof, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Guarantor or of any successor corporation, either directly or through the Guarantor or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.
(5)
The Guarantor shall not consolidate with or merge into any other person or convey, transfer or lease its properties and assets substantially as an entirety to any person, unless in case the Guarantor shall consolidate with or merge into another person or convey, transfer or lease its properties and assets substantially as an entirety to any person, the person formed by such consolidation or into which the Guarantor is merged or the person which acquires by conveyance or transfer, or which leases, the properties and assets of the Guarantor substantially as an entirety shall be a corporation, partnership, limited liability company, trust or other entity, and shall expressly assume all obligations under this Guarantee.
Upon any consolidation of the Guarantor with, or merger of the Guarantor into, any other person or any conveyance, transfer or lease of the properties and assets of the Guarantor substantially as an entirety, the successor person formed by such consolidation or into which the Guarantor is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Guarantor under this Guarantee with the same effect as if such successor person had been named as the Guarantor herein; and in the event of any such conveyance or transfer (other than a lease) the Guarantor shall be discharged from all obligations and covenants under this Guarantee and may be dissolved and liquidated.
The foregoing Guarantee shall automatically terminate in the event: (a) GE assumes all obligations of GE Capital under, or as a guarantor of, the Securities, whether by operation of law or otherwise or (b) as to each separate class of Outstanding Debt Securities or CP Securities program, the Applicable Instrument governing such Securities has been amended to include, or otherwise has the benefit of, a full and unconditional guarantee by GE substantially on the terms set forth in this Guarantee, with such appropriate changes as GE and GE Capital may agree solely to conform to the Applicable Instrument governing the Securities of such class (including any applicab le subordination provision and making the amendment, enforcement and remedial provisions thereunder applicable to this Guarantee to the same extent they are applicable to the relevant underlying Securities of such class or any GE Capital guarantee thereof).
This Guarantee may be amended without the consent of any party entitled to receive payments under the Securities (as determined by the Applicable Instrument) to add the holders of additional classes of debt as third party beneficiaries of this Guarantee (including by adding additional debt securities to Annex I or additional commercial paper programs to Annex II) or in a manner not adverse to any such party. The parties hereto also reserve the right without the consent of any other party to amend the commercial paper programs described on Annex II hereto, provided that any amendment related to this Guarantee that is not otherwise permitted, shall only be applied prospectively to CP Securities issued following the date of such amendment.
This Guarantee shall be governed by, and construed in accordance with, the laws of the State of New York.
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ANNEX I
DEBT SECURITIES GUARANTEED
1.              Debt securities issued by GE Capital pursuant to a registration statement filed under the United States Securities Act of 1933, including senior unsecured, subordinated and senior secured notes issued under the GE Capital medium term note programs, debt securities issued under the GE Capital InterNotes program and the floating rate notes issued by GE Capital, but excluding the GE Interest Plus notes and GE Capital Select notes.*
2.                USD, Euro and GBP-denominated fixed to floating rate subordinated debentures issued by GE Capital (including those underlying trust preferred securities (TruPS) issued by any trust owning such debentures; however, the Guarantee does not extend to such trust preferred securities themselves or any guarantee thereof).
3.              Debt securities issued or guaranteed by GE Capital under the GE Capital European programmes (including the standalone Namensschuldverschreibung issuance) for the issuance of medium-term notes by GE Capital, GE Capital European Funding, GE Capital UK Funding and/or GE Capital Australia Funding Pty Ltd.
4.              Debt securities issued by GE Capital Canada Funding Company that are guaranteed by GE Capital under the GE Capital Canada Funding Company medium term note program.
5.              Debt securities issued by GE Capital Australia Funding Pty Ltd. that are guaranteed by GE Capital under the GE Capital Australia Funding Pty Ltd. medium term note program.
6.              Swiss Franc fixed rate bonds issued by GE Capital.
7.              Japanese Yen fixed and floating rate bonds issued by GE Capital.
8.              Debt securities issued by Security Capital Group Incorporated (Notes due 2028), Susa Partnership, L.P. (Notes due 2017, 2018 and 2027), Diamond Senior Living, LLC (Notes due 2016) and GE Capital Franchise Finance Corporation (Notes due 2026), in each case, that are guaranteed by GE Capital.
9.              Debt securities issued by GE Capital that were originally co-issued with LJ VP Holdings LLC (Notes due 2019).
_____________________
* The foregoing securities do not include GE Capital subordinated debt securities (originally issued by General Electric Capital Services, Inc.) guaranteed by GE, as such securities already benefit from a full and unconditional GE guarantee.

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ANNEX II
COMMERCIAL PAPER PROGRAMS
1.
US commercial paper program existing on the date hereof and providing for issuances by GE Capital.
2.
Euro-commercial paper programme existing on the date hereof and providing for issuances by GE Capital, GE Capital European Funding and GE Capital UK Funding.


 

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EXHIBIT 99


PRESS RELEASE

GE TO CREATE SIMPLER, MORE VALUABLE INDUSTRIAL COMPANY
BY SELLING MOST GE CAPITAL ASSETS; POTENTIAL TO RETURN MORE THAN $90 BILLION
TO INVESTORS THROUGH 2018 IN DIVIDENDS, BUYBACK & SYNCHRONY EXCHANGE

•
High-value industrials to comprise more than 90% of GE earnings by 2018
•
Plans to retain financing "verticals" that relate to GE's industrial businesses
•
Announces sale of GE Capital Real Estate assets for approximately $26.5 billion
•
Will work with regulators to terminate GE Capital's SIFI designation
•
GE to take approximately $16 billion after-tax charge in 1Q'15, $12 billion non-cash
•
Industrial businesses remain on track for operating earnings per share of $1.10-$1.20 in 2015, in line with expectations
•
GE expects to get approximately $35 billion in dividends from GE Capital from this plan
•
Board authorizes new buyback program of up to $50 billion

FAIRFIELD, Conn. – April 10, 2015 – GE [NYSE:GE] today announced that it will create a simpler, more valuable company by reducing the size of its financial businesses through the sale of most GE Capital assets and by focusing on continued investment and growth in its world-class industrial businesses.

GE and its Board of Directors have determined that market conditions are favorable to pursue disposition of most GE Capital assets over the next 24 months except the financing "verticals" that relate to GE's industrial businesses.  Under the plan, the GE Capital businesses that will remain with GE will account for about $90 billion in ending net investments (ENI) excluding liquidity – about $40 billion in the U.S. – with expected returns in excess of their cost of capital.

"This is a major step in our strategy to focus GE around its competitive advantages," GE Chairman and CEO Jeff Immelt said.  "GE today is a premier industrial and technology company with businesses in essential infrastructure industries.  These businesses are leaders in technology, the Industrial Internet and advanced manufacturing.  They are well-positioned in growth markets and are delivering superior customer outcomes, while achieving higher margins.  They will be paired with a smaller GE Capital, whose businesses are aligned with GE's industrial growth."

"The successful IPO of GE's retail finance business, Synchrony Financial, and other recent business exits have demonstrated that our financial services assets can be more valuable to others," said GE Capital Chairman and CEO Keith Sherin.  "GE Capital's businesses are excellent, and this is a great market for selling financial assets. Our people are world-class.  We are confident these businesses will thrive elsewhere."

As part of the execution of this new plan, GE announced today an agreement to sell the bulk of the assets of GE Capital Real Estate to funds managed by Blackstone.  Wells Fargo will acquire a portion of the performing loans at closing.  The Company also has letters of intent with other buyers for an additional $4 billion of commercial real estate assets.  In total, these transactions are valued at approximately $26.5 billion.
Under the plan, GE expects that by 2018 more than 90 percent of its earnings will be generated by its high-return industrial businesses, up from 58% in 2014.
(1)

In 2015, GE's industrial businesses remain on track for operating earnings per share of $1.10-$1.20, up solid double digits, in line with expectations.  "With sustainable growth, investments in competitive advantage, productivity programs and the addition of Alstom, we expect this performance to continue in the future," Immelt said.  "We will focus our efforts on these businesses."

Immelt added, "We are completing another definitive and important move to reshape GE for the future. GE is a fast-growth, high-tech industrial company, built on the capabilities of the GE Store. The team is executing a detailed plan to boost margins and returns. We are allocating capital to grow the Company and benefit investors. Our best days are ahead."

Creating Value in GE Capital
GE Capital has been an important part of the history of GE.  However, the business model for large, wholesale-funded financial companies has changed, making it increasingly difficult to generate acceptable returns going forward.

GE will retain its "vertical" financing businesses – GE Capital Aviation Services, Energy Financial Services and Healthcare Equipment Finance – that directly relate to its core industrial businesses.  The assets targeted for disposition, in addition to Real Estate, are most of the Commercial Lending and Leasing segment, and all Consumer platforms, including all U.S. and international banking assets.

These businesses represent roughly $200 billion in ENI.  Since 2008, GE has reduced GE Capital's ENI from $538 billion to $363 billion at the end of 2014.  The separation of Synchrony Financial, which is targeted by the end of 2015, and other recently announced dispositions, account for another $75 billion in ENI reduction (the Synchrony separation is subject to regulatory approval).

There is potential to return more than $90 billion to investors in dividends, buyback and the Synchrony exchange through 2018.  The exits of the targeted GE Capital businesses should release approximately $35 billion in dividends to GE (subject to regulatory approval), which, under GE's base plan, are expected to be allocated to buyback; this is in addition to the impact of the Synchrony exchange and ongoing dividends.  The GE Board has authorized a new repurchase program of up to $50 billion in common stock, excluding the Synchrony exchange.  GE expects to reduce its share count to 8-8.5 billion by 2018.  These actions would still allow room for opportunistic "bolt on" acquisitions in GE's core markets.  GE also said it plans to maintain its dividend at the current level in 2016 and grow it thereafter.

Working with Regulators
GE has discussed this plan, aspects of which are subject to regulatory review and approval, with its regulators and staff of the Financial Stability Oversight Council (FSOC).  GE will work closely with these bodies to take the actions necessary to de-designate GE Capital as a Systemically Important Financial Institution (SIFI).  "We have a constructive relationship with our regulators and will continue to work with them as we go through this process," Immelt said.

Financial Details
Approximately $16 billion of after-tax charges are expected to be recorded in the first quarter of 2015 in connection with the plan – of which about $12 billion are non-cash.  The charges include taxes on repatriated earnings, asset impairments due to shortened hold periods, and charges on businesses held for sale, including goodwill allocation.

GE expects that the earnings impact of the GE Capital exits will be offset by the buyback over the exit period.

GE will execute this strategy using an efficient approach for exiting non-vertical assets that works for GE and for GE Capital Corporation (GECC) debtholders and GE shareholders.  An element of this approach involves a merger of GECC into GE and the creation of a new intermediate holding company for GECC businesses.

GE has amended its income maintenance agreement to guarantee all tradable senior and subordinated debt securities and all commercial paper issued or guaranteed by GECC.  The guarantee will replace the current income maintenance covenant.  GE will maintain substantial liquidity and capital through the transition and does not expect
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to issue incremental GE Capital long-term debt for at least five years.  Commercial paper will be further reduced to approximately $5 billion by the end of 2015.

"We are proud of the GE Capital team, the outstanding businesses that GE Capital employees have built, and how they have delivered for customers and shareholders over many years," said Immelt.  "The GE Capital team has displayed great resiliency, facing tough cycles and driving strong results."

J.P. Morgan and Centerview Partners have provided financial advice to GE, and Bank of America provided advisory services.  Weil, Gotshal & Manges, Davis Polk, and Sullivan & Cromwell provided legal advice.  For the Real Estate deal, Bank of America and Kimberlite Advisors provided financial advice and Hogan Lovells provided legal advice.

GE will discuss this announcement on a webcast at 8:30 a.m. ET today, available at www.ge.com/investor .  Related charts will be posted on our website for your review prior to the call.

About GE
GE (NYSE: GE) imagines things others don't, builds things others can't and delivers outcomes that make the world work better. GE brings together the physical and digital worlds in ways no other company can. In its labs and factories and on the ground with customers, GE is inventing the next industrial era to move, power, build and cure the world. www.ge.com


GE's Investor Relations website at www.ge.com/investor and our corporate blog at www.gereports.com, as well as GE's Facebook page and Twitter accounts, including @GE_Reports, contain a significant amount of information about GE, including financial and other information for investors.  GE encourages investors to visit these websites from time to time, as information is updated and new information is posted.

Caution Concerning Forward-Looking Statements:

This document contains "forward-looking statements" – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," or "target." Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about our announced plan to reduce the size of our financial services businesses, including expected cash and non-cash charges associated with this plan; expected income; earnings per share; revenues; organic growth; margins; cost structure; restructuring charges; cash flows; return on capital; capital expenditures, capital allocation or capital structure; dividends; and the split between Industrial and GE Capital earnings. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: obtaining (or the timing of obtaining) any required regulatory reviews or approvals or any other consents or approvals associated with our announced plan to reduce the size of our financial services businesses; our ability to complete incremental asset sales as part of this plan in a timely manner (or at all) and at the prices we have assumed; changes in law, economic and financial conditions, including interest and exchange rate volatility, commodity and equity prices and the value of financial assets, including the impact of these conditions on our ability to sell or the value of incremental assets to be sold as part of this plan as well as other aspects of this plan; the impact of conditions in the financial and credit markets on the availability and cost of GECC's funding, and GECC's exposure to counterparties; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; pending and future mortgage loan repurchase claims and other litigation claims in connection with WMC, which may affect our estimates of liability, including possible loss estimates; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flows and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; GECC's ability to pay dividends to GE at the planned level, which may be affected by GECC's cash flows and earnings, financial services regulation and oversight, and other factors; our ability to convert pre-order commitments/wins into orders; the price we realize on orders since commitments/wins are stated at list prices; customer actions or developments such as early aircraft retirements or reduced energy demand and other factors that may affect the level of demand and financial performance of the major industries and customers we serve; the effectiveness of our risk management framework;
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the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation and litigation; adverse market conditions, timing of and ability to obtain required bank regulatory approvals, or other factors relating to us or Synchrony Financial that could prevent us from completing the Synchrony Financial split-off as planned; our capital allocation plans, as such plans may change including with respect to the timing and size of share repurchases, acquisitions, joint ventures, dispositions and other strategic actions; our success in completing, including obtaining regulatory approvals for, announced transactions, such as the proposed transactions and alliances with Alstom, Appliances and Real Estate, and our ability to realize anticipated earnings and savings; our success in integrating acquired businesses and operating joint ventures; the impact of potential information technology or data security breaches; and the other factors that are described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2014. These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

Investor Contact:
Matt Cribbins, 203.373.2424
matthewg.cribbins@ge.com

Media Contact:
Seth Martin, 203.572.3567
seth.martin@ge.com



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