General Electric Company (NYSE:GE)

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Closed 25.14
52 week 21.11 - 28.09
Div.yield 3.50%
Payout ratio of 59%

Insider buys and guru buys makes this an interesting giant to keep an eye on.

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GE CEO Immelt buys $2.6 mln in company stock

March 4 (Reuters) - General Electric Co Chief Executive Officer Jeff Immelt purchased $2.6 million of the U.S. conglomerate's shares, according to a filing on Tuesday, following a rough start for the company's stock price in 2014.

Immelt, GE's leader since 2001, purchased 104,900 shares at $25.19 per share, according to the filing. Immelt had earlier this year purchased 40,000 shares, according to a January filing, for a total of $3.6 million in 2014 stock purchases.

"I am investing right alongside of you. I have invested my entire bonus in GE stock," Immelt said in a statement provided by the company from his forthcoming annual letter to shareholders. "Like the rest of our leaders, I believe in GE."

The company has not yet provided Immelt's compensation for 2013, which is expected to be revealed in its proxy filing later this year.

All told, Immelt holds 1.96 million of GE shares, according to the latest filing. The CEO is the largest insider stakeholder, according to Thomson Reuters data, though his stake trails far behind those of the large institutional holders of GE stock.

After a strong 2013, GE shares have declined 8.5 percent in 2014, underperforming those of industrial manufacturing rivals and the broader U.S. market.

GE's fourth-quarter earnings report in January disappointed investors, as the company's 2013 profit margins did not improve quite as much as the company had targeted.

Shares of GE rose 2.1 percent to $25.64 in morning trading on the New York Stock Exchange, outperforming an increase of 1.2 percent for the S&P 500 index.

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GE ends freebie on executives unvested shares

By Tim McLaughlin

BOSTON (Reuters) - General Electric Co said on Thursday it will stop paying its senior executives dividends on stock awards that have not yet vested, after investors urged the company to end the long-held perk.

The move, which affects only new stock awards and not old ones, comes amid growing scrutiny by shareholders of senior executive pay, which has been on the rise for years even as average Americans' salaries plateau. The dividends can add up to millions of dollars for executives with long tenure.

"The change is in response to investor feedback," GE spokesman Seth Martin said. He declined to elaborate.

GE's policy change affects only stock awards granted this year and beyond, the company disclosed this week in its annual proxy statement. That means some executives will continue to receive big dividend checks on stock awarded in previous years, but which has not vested.

Vice Chairman Keith Sherin, for example, will continue to receive dividends over the next decade on 191,250 shares of restricted stock that he doesn't own, or which is unvested, until his 65th birthday in 2023, according to GE disclosures.

GE had been paying dividends on unvested restricted stock for years. But the company was not able to say when the practice began.

While GE and other companies move away from paying dividends on unvested stock, Apple Inc is picking up where they left off, but with a twist. Executives at Apple accrue dividends on restricted stock, but don't get the payouts until shares vest, according to its latest proxy.

SERIOUS MONEY

Four senior GE executives - Chief Financial Officer Jeffrey Bornstein and Vice Chairmen Daniel Heintzelman, John Rice and Keith Sherin - have a combined 1.04 million shares of unvested restricted stock, according to GE's latest proxy.

At GE's annual dividend payout of 88 cents a share, those executives in 2014 are in line to receive a combined $914,000 on stock they don't own.

"It's like you or me getting paid a dividend on GE stock that we're just thinking about buying," said Paul Hodgson, a corporate governance expert and a partner in BHJ Partners, in Camden, Maine.

Vesting or ownership of restricted stock is typically tied to time in service and meeting performance goals. U.S. companies use restricted stock to retain executives and to motivate them to do well.

The dividend payouts have not received as much attention as other forms of executive compensation. They pale in comparison to some of the big-ticket bonus and stock option awards that grab headlines.

Still, the dividends can amount to a handsome annuity that can extend over decades.

Just ask GE's Sherin.

In September 2003, for example, Sherin received 125,000 shares of restricted stock. A quarter of that award, or 31,250 shares, won't vest until Sherin turns 65 on November 15, 2023, according to U.S. regulatory filings.

That means Sherin is set to receive dividends for a total of about 20 years on stock he doesn't actually own. Since the initial award, he has received about $270,000 in dividend equivalents on those 31,250 shares of unvested stock, according to GE disclosures.

(Reporting by Tim McLaughlin; Editing by Richard Valdmanis and Jan Paschal)

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3/13/2014 @ 3:50PM
Why GE Is Getting Rid Of Its Profitable Credit Card Biz

Banks aren’t the only big companies shedding assets these days. GE is getting in on the action too by spinning off its credit card business.

General Electric GE -0.91%, the Fairfield, CT-based conglomerate, filed for an IPO of its North American retail finance business.

The move wasn’t unexpected. Executives announced it would be selling the unit back in November in an effort to reduce its finance business (GE Capital), particularly its consumer finance segment.

What exactly is GE spinning off? Mostly credit cards. The portfolio has about $53 billion in receivables, and private label credit cards make up about $36 billion. Payment solutions and its recently troubled healthcare card make up the rest.

The unit, which lives inside GE Capital, is also very profitable. The North American retail fiance business brings in over $2 billion annually for GE. The company’s overall net income in 2013 was $13 billion.

However, GE and CEO Jeffrey R. Immelt, have been busy shifting the company away from its reliance on its financial arm, and instead are putting more effort into its industrial segments like energy, oil and gas and transportation. The strategy: cut GE Capital down so it represents 30% of earnings with industrials making the rest.

Why the push? GE Capital hurt the company big time in 2008 thanks to its exposure to the credit markets. The company was better known to most people for its appliances was being lumped in with Wall Street’s biggest banks because of its risky holdings and issuance of commercial paper. It was even named a systemically risky financial institution by the U.S. Financial Stability Oversight Council.

The sale of the retail business doesn’t mean it’s exiting everything financial, however. GE Capital still exists but is focusing more on specialty lending for middle market customers. Think aircraft lending & leasing, equipment finance, receivables and commercial real estate lending.

The retail finance business is expected to go public later this year under a new name, Synchrony Financial. GE plans to sell about 20% of it to get started.

Shares of GE were down roughly 2% Thursday afternoon.

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GE names ex-Vanguard chairman as lead board director • 6:31 PM

GE names former Vanguard mutual fund group chairman John Brennan as lead independent director on its board, a potential signal that the company is listening to shareholders as it seeks to restore its share price from its plunge during the financial crisis.

The elevation of an investor representative to a board leadership position puts GE "in the distinct minority" among large companies, said Ann Yerger, executive director of the Council of Institutional Investors, praising the move that "bring(s) a perspective that isn't always in abundance on boards."

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By Elizabeth Pineau and Benjamin Mallet

PARIS (Reuters) - General Electric boss Jeff Immelt is due in Paris on Sunday and is expected to meet France's economy minister as he closes in on a deal to buy the global power arm of struggling French engineer Alstom, sources close to the matter said.

Several sources close to talks between the companies said on Friday a transaction could be announced in days. Some put a $13 billion valuation on Alstom's turbines and power grid equipment business.

Sources close to the government who flagged the likely meeting between economy minister Arnaud Montebourg and Immelt said Prime Minister Manuel Valls might also meet the chief executive, who heads one of the 10 largest investor-controlled companies in the world, should the more senior politician return from a visit to Rome in time.

French media said a decisive Alstom board meeting, the second since Friday, would also take place on Sunday.

Socialist Montebourg has been a strong exponent of France's traditionally cautious approach to foreign takeovers of companies in flagship industries.

Last week he said he would protect the national interest and study "other solutions and scenarios" for Alstom, also the maker of TGV high-speed trains and one of France's top private-sector employers, which is struggling with heavy debt and weak demand.

However, one source close to the talks said the government had been looking for alternatives for months without success "so I don't see what they will find now".

Nevertheless, political sensitivities run deep.

"I ask you, prime minister, to please tell the shareholders and management of the groups concerned that this transfer of control is out of the question," former Socialist minister Jean-Pierre Chevenement said in an open letter to Valls published by Les Echos newspaper on Saturday.

Montebourg met Alstom chief executive Patrick Kron on Thursday and said on Friday he would meet "shortly" with Immelt.

An industry source close to the talks said GE would argue there was not much concern about job cuts in France, where Alstom employs 20 percent of its workforce, some 18,000 people. The source noted that in gas turbines, for example, GE has its own gas turbine making business in France while some of Alstom's is in Switzerland.

"The French state is asking for assurances from GE, all that is a game that implies a discussion around the disappearance of national champions," said the source. "Conversely, GE will try not to offer too much."

Sources have said a deal is backed by Alstom's main shareholder, French conglomerate Bouygues with 29 percent. Alstom's Kron told union officials on Friday he was discussing an "industrial operation" but did not name GE. Bouygues and GE have declined to comment.

TRANSFORMATION

A deal to sell Alstom's power assets, which account for about 70 percent of total group revenue, would effectively break up the engineering group and leave Alstom as a pure transport business building its well-known high-speed TGV trains, other rolling stock and transport industry equipment.

It could, however, be less politically sensitive than a full takeover offer for the company, talk of which caused Alstom shares to soar on Thursday.

Alstom was bailed out by the French state in 2004 and relies heavily on orders from national rail operator SNCF and utility EDF . It employs 93,000 worldwide, with about half of its French total of 18,000 in the power business.

Alstom's power assets include turbines for coal, gas and nuclear power plants, wind farms and systems for power transmission and distribution.

The trading of Alstom shares was suspended on Friday after a report GE planned a full takeover of the company. Before that Bloomberg report, Alstom shares had slumped 20 percent in 12 months on concerns over its cash flow, and its weakening prospects prompted Bouygues to take a $1.9 billion writedown on its stake in February.

Alstom is less than one-twentieth the size of GE and much smaller than its European archrival, German group Siemens AG , and its orders have slumped since the 2008 economic crisis depressed demand for power equipment.

In need of raising cash, Alstom reached out to GE, two industry sources said.

Industry sources said Alstom was strong in steam turbines used by the nuclear industry, while GE was a top player in gas turbines and not so strong in steam. A deal would also enable GE to expand into wind power and grid technology, they added.

The deal would let GE "materially strengthen its competitive position in the global power market," said Brian Langenberg, an analyst with Langenberg & Co.

GE, which already employs over 10,000 people in France, has said it wants to increase its earnings contribution from industrial operations relative to its financial activities.

Ten years ago, when France was negotiating a bailout for Alstom with European Competition Commissioner Mario Monti, Siemens was a potential buyer of its power arm. In the end, then French president Nicolas Sarkozy balked at the prospect of German ownership and Alstom remained intact.

French newspapers have reported a possible re-launch of attempts from that the time to engineer a swap of Alstom's power business with Siemens' rail business as an alternative to a GE deal. Siemens declined to comment.

(Potter)

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France and Germany do not see eye to eye because of past historical war and suffering then.

It would be interesting to see how the vote goes for the proud french.

WW I saw american and french together.

Lets see what happens next.

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Siemens and France weigh in as GE eyes Alstom deal
Sun Apr 27, 2014 11:58pm BST


PARIS/FRANKFURT (Reuters) - Siemens and the French government intervened in General Electric's plan to buy the power arm of Alstom on Sunday with an alternative European "champions" tie-up proposal and a pledge to act in France's national interest.

Though French trains-to-turbines maker Alstom is privately owned, firebrand Economy Minister Arnaud Montebourg issued a stark reminder of the influence the government holds over a company that relies heavily on orders from state rail operator SNCF and partly state-owned utility EDF.

"GE and Alstom have their calendar, which is that of shareholders, but the French government has its own, which is that of economic sovereignty," Montebourg said in a statement, providing the first official confirmation of GE's offer.

GE boss Jeff Immelt was in Paris on Sunday to thrash out a $13 billion (7 billion pounds) deal for struggling Alstom's power turbines and grid equipment. Montebourg had planned to meet him but the encounter was postponed until later in the week after the minister advertised an alternative proposal by German rival Siemens.

The Siemens proposal would create "two European and global champions in the energy and transport domains - one around Siemens, the other around Alstom", Montebourg said.

French President Francois Hollande gathered his top ministers on Sunday evening to discuss Alstom's case. The company said separately it would make an announcement no later than Wednesday morning and that it had asked for its shares to remain suspended from trading until then.

"Alstom continues and deepens its strategic reflection," it said in a three-line statement.

Montebourg said the government would not accept any hastily made decision, that it would seek to preserve France's jobs and industrial base and would in particular be "extremely vigilant" in ensuring the nation's nuclear industry remains independent.

The warning compels Alstom and GE to tread carefully. However, sources familiar with the talks said these were very advanced.

"Alstom has received a firm offer from GE and an expression of interest from Siemens. It's not at all the same kind of commitment," one of the sources said.

TRAINS PLUS CASH

Earlier in the day, Siemens entered the fray with an announcement that it had written a letter to "signal its willingness to discuss future strategic opportunities" with the French group. Siemens gave no further details.

A report on newspaper Le Figaro's website on Sunday said Siemens was offering Alstom half of its train-making business plus cash in exchange for its French rival's power turbines division.

Le Figaro said Siemens was proposing that Alstom take on the Siemens high-speed trains and locomotives arm, but not its metropolitan trains division. A report in Germany's Handelsblatt outlined a similar scenario and put the value of the proposed deal at 10-11 billion euros ($14-15 billion).

Alstom CEO Patrick Kron has said in the past he is against creating a Franco-German train manufacturer.

As well as the power turbines arm GE wants to buy, Alstom makes TGV high-speed trains and is one of France's top private-sector employers.

Though Alstom is struggling with heavy debt and weak demand, political sensitivities run deep in France.

Marine Le Pen, leader of the far-right National Front (FN) party that won widespread support in last month's local elections, said the government had "abandoned Alstom to be dismantled for American or German profit".

A Siemens tie-up may be no more palatable to some than a deal with GE. A decade ago, Alstom was rescued by a state-backed restructuring when Kron and France's then-president, Nicolas Sarkozy, both balked at the prospect of a Siemens acquisition.

OVERLAP

A deal to sell Alstom's power assets, which account for about 70 percent of total group revenue, would effectively break up the engineering group and leave Alstom as a pure transport business, building its TGV trains, other rolling stock and rail signalling equipment.

Alstom's power assets include turbines for coal, gas and nuclear plants, wind farms and systems for power transmission and distribution. They generated around 15 billion euros or 70 percent of Alstom's global revenue in the last fiscal year and are among the group's most profitable businesses.

Alstom is the world's top supplier of turbine generator sets for nuclear plants. The company estimates that its equipment, which is used to produce electricity but is not located inside nuclear reactors, is used in 40 percent of nuclear plants.

Alstom employs 18,000 people in France, about 20 percent of its total workforce, against GE's 10,000 French workers and Siemens' 7,000. A source familiar with the matter said there was lots of overlap between Siemens and Alstom's operations in France, more so than with GE.

Alstom and Siemens are direct rivals in steam turbines, offshore wind power, hydro power and grid. For its part, GE is absent from offshore wind and hydro power and could use the boost in steam turbines and grid.

Sources have said a deal with GE is backed by Alstom's main shareholder, French conglomerate Bouygues, which holds a 29 percent stake.

Before the news of an approach from GE, Alstom shares had slumped 20 percent in 12 months on concerns over its cash flow, prompting Bouygues to take a $1.9 billion writedown on its stake in February. Trading of Alstom shares was suspended on Friday at the request of market regulator AMF.

(Additional reporting by Andrew Callus, Matthieu Protard and Natalie Huet in Paris, Anjuli Davies in London and Soyoung Kim in New York; Editing by David Goodman and Gareth Jones)

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AirAsia X signs S$1.9 bln engine deal with GE Aviation


PUBLISHED: APRIL 28, 6:46 PM
KUALA LUMPUR – AirAsia X Bhd, the long-haul arm of Malaysian budget carrier AirAsia Bhd, has signed a US$1.5 billion (S$1.9 billion) deal with GE Aviation for the supply of engines on up to 28 new aircraft.

GE Aviation, a unit of General Electric, will supply CF6-80E1 engines for the airline’s order of 25 A330-300 aircraft from Airbus, AirAsia X said in a statement on Monday.

Malaysia’s Prime Minister Najib Razak, US President Barack Obama and AirAsia Chief Executive Tony Fernandes were present at the signing ceremony for the deal. REUTERS

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GE offers $13.5 billion enterprise value to acquire Alstom Thermal, Renewables, and Grid businesses

April 30, 2014
$13.5B enterprise value, all-cash transaction valued at 7.9x pro forma EBITDA (12 months ending September ’13)

Immediately accretive to GE earnings; incremental $.08-$.10 of earnings in 2016; expect approximately 75% of operating earnings from GE Industrial by 2016

Integration will yield efficiencies in supply chain, service infrastructure, commercial reach, and new product development to generate more than $1.2B in annual cost synergies by year five
Strong operating assets that bring complementary technology, global capability, a large installed base and talent to GE
Enhances GE’s long-term growth opportunities in growing global power market
Improves customer productivity through total power plant & integrated grid solutions
HQs & global COEs for steam turbines, hydro, offshore wind, and grid businesses in France; COE for 50Hz gas turbines in Belfort
Net growth in jobs in acquired businesses in France with remix to more engineering and manufacturing

PARIS, FRANCE, April 30, 2014 – GE (NYSE: GE) and Alstom announced here today that GE has submitted a binding offer to acquire the Thermal, Renewables (“Power”) and Grid businesses of Alstom (ALO.PA) consisting of $13.5 billion (€9.9 billion) enterprise value and $3.4 billion (€2.5 billion) of net cash, totaling $16.9 billion (€12.35 billion).

The Alstom board of directors has positively received GE’s offer and has appointed a committee of independent directors led by Jean-Martin Folz to review the transaction by June 2. If this review concludes positively, an exclusivity period beginning no later than June 2 will be granted and the next steps will include Works Councils consultation, Alstom shareholder approval in a shareholder meeting, and customary regulatory approvals. Bouygues S.A., a 29% non-controlling shareholder of Alstom, supports the transaction. Although the transaction involves the acquisition of Alstom’s Power and Grid businesses, GE’s offer, typical of a public company transaction, permits the board of Alstom to consider unsolicited alternative proposals for the acquisition of Alstom, or of the Power and Grid businesses. The deal is expected to close in 2015.

Transaction details

The all-cash transaction is valued at 7.9 times pro forma earnings before interest, taxes, depreciation and amortization (EBITDA) of Alstom’s Thermal, Renewables, and Grid business units. GE expects the acquisition to be accretive to earnings in the first year; it is expected to add $.08-$.10 of earnings in 2016; and approximately 75% of operating earnings is expected to come from GE Industrial by 2016.

Creating investor value

Jeff Immelt, GE Chairman and CEO, said, “This is a strategic transaction that furthers GE’s portfolio strategy. Power & Water is one of our higher growth and margin industrial segments and is core to the future of GE. Alstom, like GE, is a company built on engineering, innovation and technology. We respect and value the deep industry and technology expertise of Alstom employees and expect them to add to our proven track record of developing talent and leadership in France and globally.”

Immelt continued, “Alstom not only advances our strategic priorities and industrial growth, but is also expected to provide an excellent return on capital. Alstom’s businesses are very complementary in technology, operations, and geography to our power and grid businesses. We expect a collaborative and prompt integration that will yield efficiencies in supply chain, service infrastructure, commercial reach, and new product development. We expect these actions will generate more than $1.2B in annual cost synergies by year five and the transaction will be immediately accretive for GE shareholders.”

Immelt concluded, “GE has an excellent track record of creating shareholder value from investments in Europe. In France, this includes our longstanding CFM aircraft engine joint venture with Snecma (Safran); our acquisition of Thomson-CGR, a healthcare center of excellence for GE; and our 1999 acquisition of Alstom’s gas turbine business in Belfort, which today is GE’s technology center of excellence for 50 Hz gas turbines. Across Europe, we have built strong global competitors from European champions in Oil & Gas, Aviation and Healthcare.”

Patrick Kron, Chairman and CEO of Alstom, commented: “The combination of the very complementary energy businesses of Alstom and GE would create a more competitive entity to better service customer needs. Alstom’s employees would join a well-known, major global player, with the means to invest in people and technology to support worldwide energy customers over the long term. The proposed transaction would allow Alstom to develop its Transport business as a standalone company, with a strong balance sheet to capitalize on opportunities in the dynamic rail transport market.”

Creating customer value

Alstom’s Power business provides equipment and services for integrated power plant solutions for a variety of energy sources, including steam, hydro, coal, gas, nuclear steam, wind, and other forms of renewable energy. In fiscal year 2013, the business had €11 billion ($15 billion) in sales and €1.05 billion ($1.4 billion) in income from operations, and 46,000 employees.

Steve Bolze, CEO of GE Power & Water, said, “As we continue to benefit from rising global demand for power generation in key growth regions, we see power generation customers increasingly buying total power plant solutions, maximizing their efficiency. By combining our complementary gas and steam turbine technologies, GE will help customers achieve better performance from their existing and new power plants, enabling more accessible, affordable and sustainable power for people everywhere.”

Alstom’s Grid business offers Transmission & Distribution solutions to support the build-out of the power grid in emerging economies and replacement of aging electrical infrastructure. Alstom’s Grid business generated €3.8 billion ($5.2 billion) in sales and €0.2 billion ($0.3 billion) in income from operations in fiscal year 2013, with 18,000 employees.

Investing in France

GE said today that France will be the center of its European power business with headquarters and centers of excellence here for its steam turbine, hydro, offshore wind and grid businesses. GE plans that its Belfort site would remain the center of excellence for 50 Hz gas turbines. GE also anticipates net growth in jobs in acquired businesses in France, with the employee mix moving toward high-value manufacturing and engineering jobs.

GE will discuss the transaction on a webcast at 8:30 am ET on April 30, 2014, available at www.ge.com/investor. Related charts will be posted prior to the call.

About GE
GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. For more information, visit the company's website at www.ge.com.