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We provide cutting edge technology and service solutions throughout the value chain UPSTREAM MIDSTREAM DOWNSTREAM - Subsea - Offshore - Onshore - LNG - Pipeline & Storage Digital solutions - Refinery - Petrochemical ~40,000 EMPLOYEES ~$16.5B REVENUES 15 Improving the health & productivity of your operations from extraction to end of use. 2
Industry outlook 0 2 4 6 8 10 12 14 16 18 20 22 24 Months after peak Subsea tree awards 247 Forecast 153 172 85 Quest Base case May 16 15 16 Onshore U.S. well count 28 21 Forecast Spears 000s Near-term cycle unfolding Brent price indexed peak = 100 120 100 80 60 40 20 14 to date 13 17 17 18 RoW 11 18 13 97-00 85-88 07-11 15 Longer-term growth themes endure Gas gaining share Subsea & Offshore needed to meet demand NAM unconventionals key to supply Total LNG Supply growth 15-25 CAGR -a) ~1.5% ~5% ~2% ~5% 15 16 17 18 15 16 17 18 Industry driving to better project execution, lower total cost of ownership & increased productivity (a- GE O&G analysis based on Rystad, IEA, IHS 3
Capitalizing on the GE Store at Oil & Gas SOFTWARE CENTER Smart BOP and advanced controls POWER Water injection and processing DIGITAL SOLUTIONS Leak detection and multiphase flow measurement AVIATION Valve coatings and advanced materials TURBO MACHINERY Pumps and compressor technology ENERGY CONNECTIONS Power transmission and distribution SUBSEA SYSTEMS Subsea production equipment and services HEALTHCARE Diagnostic software imaging GLOBAL RESEARCH CENTER Flow assurance and advanced riser technology Continuously using the entire company toolkit solutions for customers 4
Leading the digital revolution from reservoir to refinery OPERATING SYSTEM PREDIX Asset Performance Management SECURITY APPS Production Optimization Operators EPCs System Integrators DEVELOPERS ~11,000 PARTNERS Consultants Data Providers DESIGN BUILD OPERATE See tutorial regarding confidentiality disclosures. Delete Title or Job Number XX Month 201X if not needed. 5 5
Outcome-based digital ecosystem Partnering across the value chain and providing transformative solutions on Predix PRODUCTION OPTIMIZATION Optimize production operations, maximize production levels, minimize costs System 1 OPERATE: ASSET PEFORMANCE MANAGEMENT PREDIX Partnership for reservoir driven production optimization Drive reliability & availability of equipment, minimize total cost of ownership, and reduce operational risks Optimized plant operations & condition driven maintenance Field Vantage TRANSFORM LNG Equipment Reliability Analysis TRANSPORT Offshore Reliability & Availability PRODUCE Intelligent Pipeline Solutions DRILL DESIGN & BUILD Build digital into the engineering, procurement & construction process Reservoir engineering modeling & capital planning EXPLORE 6
Cost execution in down cycle Global supply chain optimization Product cost-out Onshore product example Cost & optimization enhancing through Digital Thread 100% +10% (30)% (19)% â 20% (12)% ~50% 2014 2016 Rooftops Prior standard Cost Volume under absorption Sourcing base Design Changes Specs Logistics Commonality New standard cost Consolidating capability investing in multi-modal facilities to leverage GE footprint Brilliant Factories, Talamona, Italy: Automated robotics line, 30% reduction in lead times, predictive approach with data collection & software Driving savings through global supply base Cross-functional teams driving design optimization Deep catalog simplification as part of process Sustainable cost-out actions through down cycle gross margin drivers 7
Product & projects cost-out embedded in operating processes Cost as a process enablers Measure, Control & adjust Launch, Measure, Learn, Iterate Define Top Products/projects Customer input Forecasts Evaluate market position Benchmark Win-Loss Teardowns ü Redesigned workspace crossfunctional teams in collaboration zones ü Deployed broad tools & training Lean, FastWorks ü Rigorous tracking Cross-functional Roadmaps Design-to-Cost Workout 3P Assess Gap and build Target Share & Margin Should Cost ü Strong engagement with suppliers ü Customer collaboration RealTrack Clear targets aligned to market needs & should cost mindset ü GE Store support expertise Yielding results helping customer lower cost/bbl 8
Broad services portfolio ($ in billions) Services backlog Key wins $11.9 $13.8 +16% Subsea Systems & Drilling Industry first performance based CSA 10 years GE Energy Financial Services support Turbomachinery Solutions 20+ year service agreement Follow-up to Sabine Pass $1B 4Q14 1Q15 1Q16 Turbomachinery Solutions SapuraKencana GE Oil & Gas Services Floating LNG long term maintenance agreement Continued backlog growth in down cycle more in pipeline 9
Product spot light Composite flexible risers SeaPrime TM Subsea MUX BOP Control System 20% savings on total installed cost 30% lighter, deeper Water & Higher Pressures FHC in 3000m water depth FastWorks & Aviation technology 3x higher availability than existing systems Increased reliability through controls & data Simplified maintenance hours to minutes Prevent costly stack pulls Continuing to invest in new technology 10
Focused on what we can control 2016 outlook ~(15)-(20)% ~(30)% Strong partnership with customers through any cycle Power of GE Store product & services offerings + global supply chain Driving cost-out $1B+ 15 & 16 protecting future growth areas Revenue Op profit Gross margin improvement systematic product/project cost-out programs Continuing to execute with flexibility disciplined capital allocation 11