GEInfrastructure

2

GE Infrastructure

Business objectives

• Capitalize on strong markets

• Invest/win with great technology

• Globalize … emerging markets

• Growing services/adjacencies

• Operating excellence … lean

• Creating business synergies

Environment

• Aviation … industry strong … traffic �

• Energy … riding international strength

• Oil & Gas … � fuel price, � capex

• Transportation … int’l & mining �

• Water … Demand everywhere

Great markets … GE advantages … strong financials

3

Great markets … O&G “Visible” opportunities

~$50B+ “visible” opportunities

~$14B Middle East opportunities

� Saudi: $200B spend, up and downstream

� India: $60B plan in oil & gas projects

Opportunity geography Key opportunities

~$11B European opportunities

�North sea: strong sub-sea activity

� Russia: Artic LNG and new gas pipelines

N. America

MEA + India

~$15B Americas opportunities

�NA: focus on drilling and downstream

� Brazil: Petrobras to spend $87B

Latin America

Europe

Asia

15%

34%

22%

19%10%

4Global expansion driven by emerging

mkts, commodities growth

17

25 25 26 27

N. Am China Russia/CIS India L. Am

• RR’s critical in developing countries

• Coal & commodity growth

• Freight corridors, land bridges & mining

• Emphasis on reliability, life cycle, & emissions

Approx.Fleet Size

27,700 11,400 13,600 4,900 3,600

2003 2004 2005 2006 2007e

Global backlog (locos)

Key Wins:• Kaz/Russia/CIS (Loco’s, Mods, OHV) $1.0B+• China (Locos, Signaling, OHV, O&G, M&S) $800MM+• Middle East/Africa (Loco’s, M&S, Parts) $350MM+• SEA/ANZ (Loco’s, M&S) $130MM• Europe (Loco’s, Mods, Signaling, M&S) $150MM+• S. America (Loco’s, OH’s) $100MM

30110 120

640

760

Targets:• MEA (Loco’s, Mods, Signaling, MSA) $1.5B+• S. America (Loco’s, Signaling, MSA) $1.0B+• Europe/Russia/CIS (Loco’s, Mods, Signaling, MSA) $1.0B+• China/SEA/ANZ (Loco’s, Mods, Signaling, MSA) $1.0B+

Age of fleet (years)

Great markets … Transportation global growth

5

Great markets … unprecedented water challenges

Increasing water scarcity

Threat of waterborne illness

“Developing” growth

Rising energy costs New regulations Infrastructure demands

6

+$20MM annual operating

improvements

+$100MM asset value increase

Partner with GE Energy

• Win where others don’t see value …

GE Energy support in due diligence

• Improve EBITDA of investments …

efficiencies, expansions, O&M

optimization, NPI

• Identify under-valued opportunities

early

GE’s investments

� Variable frequency transformer, Linden 7 upgrade

� Capacity / Heat rate improvements

� Contract restructuring

Creating value

Linden, NJ: expansion & efficiency

� 30+ operating locations� Gas, coal & wind generation

7

GE advantage … adjacency growth in Wind

• Clear product strategy …technology differentiation

• Price > inflation• Operational rigor …global supply chain/logistics

Drivers

• 2.5 MW platform• Services execution

Beyond ‘08

$3.5

$2.3

'05 '06 '07E '08E

$4.3

’09E

~20%Sales($ in billions)

~25%

ROTC % U ~50 F

8

14,600

8,2004,300

21,900

4,600

12,600

Commercial engines Commercial installed base

GE advantage … Commercial Engines

EA‘96 ‘06 ‘16F

GE

CFM

Fleet in active commercial serviceSource: ACAS, GE internal studies

GP7000 developed by GE/P&W Engine AllianceCFM is a 50/50 joint company between GE and Snecma

• Best-selling on regionals … 800 engine backlog

• Best-selling on single-aisle … 4,500 engine backlog

• Best-selling on Boeing 787 … 630 engine backlog

• Best-selling on wide-bodies … 2,250 engine backlog

9

Strong financials … Energy business evolution

Invest + deliver

GE business model

+ ESBWR launch

GE ref plant

+ GE global footprint

Reinvestment & grid intelligence

Bently operational excellence

GT

Wind

Nuclear

Gasification

Gas engines

Environmental

T+D

Controls

Solar

Emissions operating efficiency

Differentiate with IP … business model / value prop

Engineering commitment

‘05 ’07E

5,100

~7,600

+50%

10

Strong financials … lean capacity at Aviation

GE90 Assembly and Test

CFM56 Turbine Blade

3730

19

'05 '06 '07 YTD

Cycle Time (days)

• Material kitting

• Standard blocks of work

• Automated test setup

• Single piece flow lines

• Quick change tooling

• Robotics

42

29

'06 '07 YTD

Cycle Time (days)

11

31 days

Sub-assemblies Paint Test

10days

AssemblyComponents

20 days

15 days

07

08

09

“Lean” to build capacity EVO Cost-Out

Reliability Remanufacturing

Launch 2007e

11% reduction

0

6

12

D-9

AC4400

AC6000

EVO '05

EVO '06

80% reduction

Failures / Loco Year (F/LY) 2005 2007e

Transportation CM%

+6 pts

•~10,000 loco’s under Service… ~$12B+ backlog

•Reman parts 30-40% less cost w/no adverse impact to performance

•$500MM+ life-cycle-cost oppt’y

Strong financials … expanding Transportation margins

12

Infrastructure: investor perspective

Great Markets … should be for a long time

• Three “macro tailwinds” … oil/gas, environmental, energy demand

• 2B+ people need what we sell

Unique GE advantage … “horizontal leverage”

• Technical breadth and execution

• Resources to invest in next-gen technologies and adjacencies

Strong financials … many products, many markets (vs. power bubble)

• Services mix should improve

• Supply chain excellence

40% of GE … in great shape

GEInfrastructure