GE Capital Solutions

Paul BossidyPresident & CEOGE Capital Solutions

CFPA1147 Oct SA_Bossidy / 2

World class front-end– 4,000 global sales /

marketing team

Ultra low cost

Customer satisfaction

Faster growth + More aggressive cost efficiencies= Consistent earnings for GE

Growth

Cost

Capital Solutions… a GE business aligned for growth

CFPA1147 Oct SA_Bossidy / 3

'01 '06E

23%CAGR23%CAGR

$0.7

($ in billions)Capital Solutions 5 year history

~$1.8

History of consistent earnings… with huge opportunities to grow

• Integrated solutions

• Reliable and flexible

• World class risk management

• Asset management and underwriting expertise

• Deep industry expertise and global reach

CFPA1147 Oct SA_Bossidy / 4

Products Customers Collaterals

• Leases & loans secured by fixed assets

• Dealers – Inventory Financing

• End users

• 1.2MM+ customers

• Middle market…with $10MM—$1B revenues

40+ major collaterals:– Machinery & equip.– Corporate jets– Franchise restaurants– Office imaging– Transportation

Asset typeswe understand

Who we are

13,000 associates worldwide…4,000 global sales/marketing

CFPA1147 Oct SA_Bossidy / 5

Integrated solutions

Reliable & flexible

Deep industry expertise

• Dealer & end user financing

• Financing our customer’s customers

• Deal size from $20K to $40MM

• Multiple lease & loan structures

• Disciplined underwriting approach

• Consistent appetite throughout business cycles

• Quick decisions

• 14+ industries• 40+ collateral

groups• Global asset

management… extensive remarketing capabilities

Our competitive advantage

Plus, global reach… serve customers in 30+ countries

CFPA1147 Oct SA_Bossidy / 6

2Q’06

Technology Fleetcars

Other

IndustrialPP&E

Construction & mining

Franchisereal estate

Office equip

Inventory finance

Disciplined underwriting & processes

By collateral

15%

7%

11%

11%

16%

5%3%

9%

Well diversified global portfolio

Rest Of Asia

Japan

U.S.

AustraliaLatin Am

Europe

Canada

By geography

62%15%

3%

10%

4%

2%

4%

Rigorous portfolio monitoring

Broad spread of risk secured by assets we know

Trucks

13%

9%

Strength in diversification… portfolio performing well

(~$91B) (~$91B)

Corporateaircraft

Capital Solutions…

Moreaggressive

costefficiencies

Moreaggressive

costefficiencies

Faster growthFaster growth

Growth playbookGrowth playbook Fund sales growth Fund sales growth with G&A reductionswith G&A reductions

+

Capital Solutions…

Moreaggressive

costefficiencies

Fund sales growth with G&A reductions

+Faster growthFaster growth

Growth playbookGrowth playbook

CFPA1147 Oct SA_Bossidy / 9

Large market, low penetration

• Global footprint• World class 3,800 sales force• Positioned for cross-selling

opportunities

• 200+ marketing team• Triple A balance sheet• Industry leading low cost

structure

Go-to-market strengths

Penetration

Served

Unserved

Plenty of room to grow

Total $3.9T market

opportunity

CFPA1147 Oct SA_Bossidy / 10

~$33~$24

’06E ’09F

12%CAGR12%CAGR

Americas<2% penetration

~$12~$8

’06E ’09F

15%CAGR15%CAGR

Europe<1% penetration

~$9~$5

’06E ’09F

24%CAGR24%CAGR

Asia<1% penetration

Global business growth

Volume$B

• Moderate GDP & capex growth

• Large customer base for cross-sell

• Industry specialization

• Organizing around customers

• Products to industry verticals

• Channel to country model

• Large, rapidly growing market

• Regulatory environment improving

• Tripling sales force by 2009

Well positioned for global growth

CFPA1147 Oct SA_Bossidy / 11

Growth formula

Give customers differentiated offering

Driving better sales & marketing– More “feet on the street”– Commercial excellence– Cross-selling

Attacking new markets– IT specialization

Improving customer-facing processes– Net Promoter Score– LEAN

CFPA1147 Oct SA_Bossidy / 12

$ Volumeper rep

# Reps 1,800 900 1,100

$14MM $9MM $6MM

Americas Europe Asia

~3,800 sales reps deployed globally

Adding more sales reps to drive organic growth

CFPA1147 Oct SA_Bossidy / 13

Commercial excellence driving resultsSales deployment

Leveraging technology

Sales training

Cross-sell Sales compensation

Volume

’05 ’06E

$32B~$37B

16%

Marketing excellence

– Customer segmentation

One customer view… Make our sales reps smarter in front of customers

We’re using a more scientific approach and more technology

CFPA1147 Oct SA_Bossidy / 14

Re-prioritized 27,000 customers &

prospects

US Equipment Finance segmentation & deployment

Mainly manual effort to prioritize prospects &

deploy sales force

100,000+ prospects

BeforeDatabase

prioritization

Developed proprietary data

driven model

Salesdeployment

–Defined calling rigor–Realigned 128 sales

territories

Volume up 58%

Q1 ’05

$370

Q1 ’06

$234

CFPA1147 Oct SA_Bossidy / 15

Cross-sell… optimizing our opportunity

Seeing results…

• “Best-in-class market reach”

• Huge customer base• Strong sales force• Prospecting machine

Fleet Equipment Finance

$200MM incremental

volume

• “Differentiated offering”• Strong value proposition…

financing + services

…BUT, small sales force, ‘farmer’ orientation

Extend reachof great product offering!

Extend reachof great product offering!

• Dedicated cross-sell leader• Sales teams regionally aligned• Equipment Finance repbrings in Fleet to

sell value prop to customer / prospect

CFPA1147 Oct SA_Bossidy / 16

Large global market…plenty of room to grow

Total end user spend

Financed

~$425B

~$65B

Growth drivers…

Executing strategy to “go big” in IT

End user coverage • Services industry deployment• Leverage regional infrastructure

Build IT collateral COE

Product excellence

Reseller connection• Lease routing optimization• One Capital Solutions face to

customer

• Soft cost bundling• Global asset management

strategy

• COE drives product excellence & sales collaboration

Volume

~$2.0B

~$0.9

’06E ’09F

31%CAGR31%CAGR

CFPA1147 Oct SA_Bossidy / 17

Net Promoter ScoreFranchise Finance‘time to decision’

example

Cycle time from28 to 7 days

NPS to 77% from 52%

Volume $85MM

High NPS scoreslead to growth

NPS identifiescustomer-facing processes to be

improved

Accelerating LEAN everywhere to drive process

improvements

Yields growth

ACFC+

CFPA1147 Oct SA_Bossidy / 18

LEAN “Inquiry To Order” showcasesVendor FinanceAustralia

Customers love it! …actual improvements exceeding targets

• Eliminated proposal requirement for deals <$3MM

• Consolidated document & settlement teams

• Consolidated 6 processes into 1

• Reduced # application versions from 38 to 1

• Consolidated application entry process… improved accuracy 300%

• Consolidated 4 processes into 1

Goal:1 day

“Fastcash”

Cycle time from150 to 44 days

$125MM volume target $100MM volume target

Cycle time from127 to 50 days

Capital Solutions…

Moreaggressive

costefficiencies

Moreaggressive

costefficiencies

Faster growth

Growth playbook Fund sales growth Fund sales growth with G&A reductionswith G&A reductions

+

CFPA1147 Oct SA_Bossidy / 20

Cost efficiencies

Productivity roadmap• Rationalize redundant HQs• Acquisition integrations• Improve & integrate business

processes• Initiated Global Productivity

Council

• Create/ leverage centers of excellence (COEs) for key operating processes

• Drive efficiencies across indirect sourcing spend

• Focus on Asia and Europe

($ in millions)

'04 '05 '06E

G&A % of average served assets

1.8%

~1.3%

1.5%

~$2,400

’05 spend

Front-end

G&A

~800

~1,600

Opportunity

Volume persales rep

G&A peravg. served

asset

2.0%

1.5%

1.0%

0.5%

~$130MM+ cost out

~$130MM+ cost out

CFPA1147 Oct SA_Bossidy / 21

~20%+ • Huge markets… a lot of opportunity to grow

• Differentiating our offering thru customer-centric approach– Growth priorities– Net Promoter Score (NPS) / LEAN

• Diverse, high quality portfolio

• Cost synergies… funding sales growth with G&A reductions

’05 ’06E

$1.5B

~$1.8B

Net income

Summary

ROE 22% ~24%

($ in billions)