Scott Davis (Morgan Stanley): Any detail on the Santander swap?
Jeff Immelt:You have got to get regulatory approvals in the countries and my sense is that still will likely happen in the fourth quarter.
Deane Dray (Goldman Sachs): Could you discuss what you were saying today on the implications of the credit market conditions on the Industrial businesses?
Keith Sherin: If you look across the Infrastructure businesses we had a total of less than $30 million of cancellations in the quarter. We have not seen anything in the Energy business. We had less than $30 million, some of that was in Oil & Gas.
We have no cancellations basically in Aviation. We have had no CSA termination. In the Healthcare business certainly hospitals are talking about funding and whether they will continue with some of the projects that they may have had on the drawing board or delay them based on their ability to get funding.
In the long cycle infrastructure businesses we have not seen any yet. You have seen it on the Financial Services side clearly on ability for people to finance asset sales and that’s obviously in the run rate.
A lot of them are driven by global governments and sovereigns who are going to finish these projects based on need to get more energy extraction or oil and gas distribution. In the near term you feel pretty good about that backlog.
Christopher Glynn (Oppenheimer): On the funding, talk about the backup capacity for the Commercial Paper?
Keith Sherin: When you look our liquidity plan one of the objectives we had was to get to the fourth quarter, end of the fourth quarter and have our cash plus our bank lines be greater than our CP.
Obviously with the equity raise we build that cash cushion so we could say that we have that today. If you look at steps that are available to you number one we have got our great broad CP market we have not had any trouble funding ourselves.
We feel like the actions we have taken and the actions the Fed put in place actually give the CP market even more confidence about us and that we have seen that. We continue to fund ourselves at very low rates without any issues.
We do not plan on using any of those but if we were to do it in order I would say that that Fed facility is a great liquidity facility for our customers. I think it’s a very big positive and we are working to make sure we know how it works and have access to it and could use it if we wanted to.
Jeff Immelt: The first thing is Triple A, and even with all this volatility we have never had issues in the CP market rolling our paper. We have got a lot of investor support so that’s phase one.
Phase two was getting more cash inside the company so that we accelerated our liquidity plan and just took that off the table with cash plus bank lines being greater than CP.
Phase three has been the work that the Fed did that really protects the whole market and so far as GE is a part of that market I think that’s another great signal. Our investors have to feel really great about those lines of defense.
Nicole Parent (Credit Suisse): In oil and gas, could you give us a sense of as you look at this business how you put your arms around cancellations versus push outs?
Keith Sherin: We have not seen any cancellations yet. We had about six deals in the oil and gas business that they had originally put in their forecast. The average deal was about $45 million slipped into the fourth quarter. We had one order of about $150 million slipped into the fourth quarter from a national oil company and we think we’re going to get that in the fourth quarter.
Nicole Parent (Credit Suisse): How do you think we should think about what kind of company GE is over the next three years?
Jeff Immelt: We remain committed to being an infrastructure media and financial service company. As we come through this it will be more global than inside the United States probably 70% of our industrial earnings will be in services, long cycle services protected by technology.
In Financial Services we kind of consolidate around the places where we have the most obvious competitive advantage and that is commercial finance everywhere, verticals everywhere and in emerging market consumer and commercial business. Infrastructure, media, financial services, global, high tech, very focused on services and financially strong.
|
