GE POWERDecember 1st, 2016
Caution Concerning Forward-Looking Statements:This document contains "forward-looking statements" – that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see http://www.ge.com/investor-relations/disclaimer-caution-concerning-forward-looking-statements as well as our annual reports on Form 10-K and quarterly reports on Form 10-Q. We do not undertake to update our forward-looking statements. This document also includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
© 2016 General Electric Company - All rights reserved
© 2016 General Electric Company - All rights reserved
FUNCTIONAL EXPERTISE
OPERATIONALEXCELLENCE
DIGITALCAPABILITY
GAS POWER SYSTEMS
POWER SERVICES
STEAM POWER SYSTEMS
WATER &DISTRIBUTED
POWER
GE HITACHI NUCLEAR ENERGY
POWERDIGITAL
SOLUTIONS
Schenectady,NY, USA
Baden, Switzerland
Baden, Switzerland
Trevose, PA, USA
Wilmington, NC, USA
San Ramon,CA, USA
~$28B* revenue ~58,000 employees >150 countries
*2016 Estimate
GE Power
© 2016 General Electric Company - All rights reserved
2
© 2016 General Electric Company - All rights reserved
GLOBALPresence/Talent
DIFFERENTIATEDProducts & Services
DIGITALCapability
© 2016 General Electric Company - All rights reserved
Adding value for our customers
3
A more valuable business … well positioned to lead
Alstom executionü Strong customer acceptanceü Global capabilities/footprintü Integration & synergies on track
Expanded capabilityü Extended scope/á $/Kwü Steam (equipment + services)ü Services upgrades/oOEM
Margin enhancementü Global sourcing w/scaleü Vertical integration/insourceü Brilliant factory
© 2016 General Electric Company - All rights reserved
Global Power outlook
2015 2025
Renewables
Nuclear
Oil
Coal
Gas
~31K
~24K
Source: GE Power Marketing
5
31
5
9
7
31
11
7
~3% CAGR
World electrical generation by fuel(TWh in ‘000s)
© 2016 General Electric Company - All rights reserved
4
ü Slow growth, volatile world … Pockets of growth, localization wins
ü Energy demand ~2-3% …1.2B people without power
ü Majority still centralized power …Gas/Coal-Steam/Efficiency big role
ü Services & DigitalNew offerings, more productivity
ü Industry in transition …COP21 positioning, diverse technology required
© 2016 General Electric Company - All rights reserved
Industry dynamics
Overall gas segment expected to be flatIndustry shifting to H class
Gas outlook
How GE wins
50%+ less cost/kw than all other energy sources
Best power density/land use of all technologies
Operating flexibility offsets renewables variability
World record efficiency … 62.2%
1 Gas Turbine powers 750,000 homes
1,100mw Combined Cycle Plant requires
17 acres of land
Full Gas Turbine output in less than 10 minutes
~1pt. Combined Cycle Advantage investing for 65% By 2023
1
2
3
4
© 2016 General Electric Company - All rights reserved
Source – GE Power Marketing
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Intermediate <100MW E Class F Class H-Class
Gas Turbines >40MW
H-Class
Intermediate 40-100MW
E-Class
F-Class 46%
16%
27%
11%
32%
17%
45%
12%
5
© 2016 General Electric Company - All rights reserved
Integrated Gas Power Systems
Alstom value creation
á Combined cycle performance• +0.5 pts CC efficiency improvement• Bottoming cycle enhancements
â Cycle time for quicker power• ~$2.5B extended scope orders• 20% faster with virtual plant and
modularityâ Product cost + á volume• Cost â ~$350MM and performance á• $25MM+ CM from insourcing initiatives
Expanded offering + improved performance = better outcomes
Steam Turbine Generator
Gas Turbine
Gas Turbine Generator
Grid Solutions
Steam Turbine
Heat Recovery Steam Generator
GEContributions
Alstom
6
ü Synergies on track
© 2016 General Electric Company - All rights reserved
Integrated solutions … Turnkey with partner
HA platform launch on-trackDIFFERENTIATED
TECHNOLOGY
Flawless validation: zero fault testing (7HA.02)
WORLD-CLASSEXECUTION
Record output: 432MW simple cycle and 603MW plant
Fulfillment on-track: 17 shipments with 8 to go
2016 PROGRAM OVERVIEW
ü 25 unit shipmentsüTY margin positive
ü50/60Hz models fully validated
ü2017 returns improving
ESTIMATED HA BACKLOG 1/1/17
30Gas
turbines
21Steam
turbines
40Generators
22HRSG
62.2% efficiency
1st 7HA.02 Shipment
Extended scope ~$550MM
7
2 modelsin 1 year
© 2016 General Electric Company - All rights reserved
What is our Steam business
30%of the world’ssteam turbine
capacity
30%of the
world’sboilers
50%of steam turbines
for nuclearpower plants
Integrated offeringsü Integrated packages (EP)ü Power Block/Turbine Island (EPC)ü Full turnkey (EPC)
AQCS• Flue Gas
Desulphurization • Particulate Control• Mercury Control
Boiler island• Boilers for all fuels: Coal, Oil, Gas• Two-Pass, Tower and CFB
technology• Coal Mills• NOx control: SCR Systems
Turbine island• Steam turbine• Generator• Condensers/heaters
Digital • Performance Optimization• Boiler Optimization • FlexiLoad• Fuel Analyser
8
© 2016 General Electric Company - All rights reserved
© 2016 General Electric Company - All rights reserved
How we win in Steam
HASSYAN (DUBAI)Customer: ACWA
4x66OMW USC Integrated Power Package (i.PP)
HUBCO 2 (PAKISTAN)Customer: NWEPDI
2x66OMW Steam Turbines, Generators, Boilers
HINKLEY POINT (UK)Customer: EDF Energy
Two conventional power islands / ARABELLE™
TELANGANA (INDIA)Customer: NTPC
2x800MW USC Steam Turbine Generator Islands
TANJUNG BIN 4 (MALAYSIA) Customer: Malakoff
Full Turnkey Plant (EPC)
RDK8 (GERMANY) Customer: EnBW
Full Turnkey Plant (EPC)
World’s most efficient coal plant Leader in project execution and
risk management
$1.1B+0.8B USD
$800MUSD
$165MUSD
$220MUSD
47.5% Efficiency
2 AWARDS:EPC of the Year &
Coal Plant of the Year
9
© 2016 General Electric Company - All rights reserved
TOTAL PLANT
BOILER
CROSS-FLEET (oOEM) GAS
Alstom
SOFTWARE ANDCONTROLS
GAS
GE
CORE STRENGTH
Alstom capability enables Fleet360* total plant service solutions
Integrated service offerings
GENERATOR
STEAM
OPERATIONS AND MAINTENANCE
* Trademark
© 2016 General Electric Company - All rights reserved
10
© 2016 General Electric Company - All rights reserved
Better Together
Winning with services technologyUpgrades growth
2015 2016E 2017F
500+++
AGPs 104 135-150 +/++
Upgrades 275
Clear customer value proposition
ü Output, efficiency, flexibility, reliability, emissions
ü Sustain gas growth … continued investment in NPI
ü Expand upgrades to rotors, steam, total plant
11
Steam upgradesü GE IB, combined technologiesü 2%+ efficiency, lower product cost
Analytics: Lifing, M&D, Digitalü Advanced analytics for plantü Improved productivity on full plant
Gas upgradesü Alstom IB, combined technologiesü 2%+ efficiency, extended life
Total plant solutionsü Plant outcomes incl. GT/ST/Boilerü Improved performance/economics
© 2016 General Electric Company - All rights reserved
GE IB~15,800 units
13%
5%
82%
GEIB
Services expansionGE GE + Alstom
ü Largest installed base
ü New capabilities beyond gas turbines
ü Fleet360* total plant service solutions
ü Stronger local presence and footprint
GE + Alstom: a more capableservice business
OEM
Alstom IB~11,900 units
Cross-Fleet(oOEM)
Cross-Fleet IB~56,000 units
Gas
Steam
Generator
Gas
Generator
Boiler
Steam
(% of segment served)
12
Source – GE Power Marketing
15%
12%
6%67%
GE+Alstom
~$25B ~$27B
GE$18
OEM Cross Fleet
© 2016 General Electric Company - All rights reserved
Product cost savings
ü Cross-functional COEs enable should cost
ü Simplified features & material selection
ü Multi-platform component strategy
ü ~$460 MM cost out over last 5 years
ü Consolidate structure, functional cost, shared services
ü Big part of Alstom synergies
(% of sales)
7HA.02 Heavy Duty GT
Start lower
kWpivots
kWpivots$/
kW
Time
1stunit cost
10%
30%
$/kw
vs. 7F.05 launch
© 2016, General Electric Company. All Rights Reserved.
Alstom11%
Cost competitivenessSG&A savings
13
Key drivers of margin accretion … enabled by digital thread
© 2016 General Electric Company - All rights reserved
Investing globally
Pune, India
Dammam, Saudi Arabia
Batna, AlgeriaSchenectady, New York, USA
Greenville, South Carolina, USA
Birr, Switzerland
Hangzhou, China
Belfort, France
Jenbacher, Austria
Seoul, Korea
14Global centers of excellence … local, high quality, cost competitive
© 2016 General Electric Company - All rights reserved
Investing for next generation productivity
15
Digital ThreadLeveraging Technology to drive efficiency
SIMPLIFYSYSTEMS CONNECT
MACHINES
OPTIMIZEWORKFORCE
17Factories
1ERP
1ITO
1PLM
$250MProductivity
900Machines
13Killer Apps
Advanced manufacturingLeveraging additive for performance, cost, & cycle
ü Simplifying IT with strategic ERP’sü Connecting the enterprise horizontally
ü 1st additive parts operational … enabling new volumeü H-class technologies developed & industrialized
Greenville, SC advanced manufacturing center
Technology investments enabling cultural transformation
© 2016 General Electric Company - All rights reserved
Generation Market OperationalTrading
DistributionTransmissionBehind
the Meter
Distributed Energy
Digital Transformation of Electricity$10 Trillion by 2060
© 2016 General Electric Company - All rights reserved
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© 2016 General Electric Company - All rights reserved
Power Digital builds services backlog
2016E
~$60B
2017F
+
+1%Efficiency
+1%Total plant availability
+5%Starting
reliability
-10%Startup
fuel
~$60B Power Services backlog … driving growth
Delivering outcomes by deploying digital solutions
Maximizing value by combining plant engineering & analytics
Total plant focus ... expanding coverage beyond our equipment
DIGITAL OUTCOMES DRIVE … … BACKLOG GROWTH
-10%Emissions
+3%Capacity
Digital backlog
Core services/additional sales
Services backlog
$0.7B
1
2
3
4
17
Average values, site-specific dependent
© 2016 General Electric Company - All rights reserved
4% efficiency driven by Digital Twin ... optimizing process and hardware at plant level
Process Engineering
Digital Power Plant
Optimal setting
Case study: HUBCO – selling outcome as a service
+Improving efficiency of aging installed base … outcome focus
18
P GE advantage: bringing physics based expertise and data analytics to deliver value for customer
P How we are executing:
P $240MM of additional value from existing installed base
P Gain share model
Predix-Powered Product
Efficiency 10 year value
APM 1% $30MM
Neuco … OO 1% $30MM
OO (Gas) 1.5% $45MM
Hardware/svc 0.5% $15MM
© 2016 General Electric Company - All rights reserved
Power Digital Momentum
19
50
350
1,500
130
300
500
2014 2015 2016E
n Pipelinen Software orders
Customer Implementation Underway($ in Millions)
1H$850
1H$223
© 2016 General Electric Company - All rights reserved
ü Great, high-return global Power business
ü Clear competitive advantages− Technology leadership− Globalization … world-class
& flexible supply chain− Strong services business …
large installed base − Digital competitiveness− Simplification & culture
ü Smart capital allocation in a dynamic environment
Adv
. Mfg
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orks
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mH
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© 2016, General Electric Company. All Rights Reserved.
Building a new GE Power business
$21.5++
'15 '16E
++
$4.5B
Revenue
Op profit
ex Alstom
+
+
OP% 20.9% -ex Alstom 22.3%
Alstom
20Positioning GE Power for long-term shareholder value