GE Capital Commercial Distribution Finance

Sam Yourd May 7, 2013

GE Overview

3 GE Capital

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GE: Overview

We’ve been at work building, powering, moving and curing the world for a long time.

employees countries in GE’s global presence

best global brands (InterBrand, 2011)

world’s best company for leadership (Forbes / Hay Group, 2012)

world’s most admired companies (Fortune Magazine, 2012; #1 in electronics, #14 overall)

Building Powering Moving Curing

GE key messages

2012 revenues of $147.4B and $46.0B for GE and GE Capital

Corporate ratings of Aa3 / AA+ by Moody’s / S&P

~$77B of cash (@ 12/31/2012)

Market capitalization of $240+ billion (2/26/13)

GE Capital dividend to GE reinstated: $6.4B in 2012

2013 Operating Framework

• double-digit earnings growth for GE Industrial segments

• Significant cash returned to parent from GE Capital

• Planning to return ~$12B+ cash to shareholders

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GE: positioned for growth

~$147.4B Revenue * $14.7B Earnings From Cont. Ops. *

$12.1B Industrial CFOA *

GE Energy GE Capital

Home & Business Solutions, Media

Energy

Oil & Gas

Power & Water

Healthcare

Aviation

Transportation

GE Tech

*Source: Full year 2012, per 1/18/13 Earnings Release

Business

GE Capital

Businesses we know … deep domain … decades of performance

YE 2012 Assets ($B) Domain + Expertise

Commercial Lending & Leasing

Entered in the 60’s

~100% secured loans and leases

Support mid-market customers

$182

Entered in the 30’s

Store cards and sales finance for retailers

Broad spread of risk

Consumer - U.S. PLCC - Global

$139

Entered in the 70’s

Secured loans against diversified properties

Own/operate high quality properties

Real Estate - Debt - Equity

$46

Entered in the 60’s

GE domain in aircraft engine manufacturing

Broad product set with full life cycle mgmt.

Aviation Services

$49

Entered in the 80’s

GE domain in infrastructure manufacturing

Essential assets; secure cash flows

Energy Financial Services

$19

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Focused GE Capital

A great franchise

+ Help customers build better businesses through better capital

+ Deliver human, intellectual and financial capital

+ Provide access to GE expertise and industry experience

+ Deploy the largest sales direct originations team

+ Build on deep lending experience across industries and product lines

Builders, not just bankers

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Commercial Distribution Finance

Each year we fund over $31 billion

to over 40,000 small and mid-size

businesses in North America, so they can buy and sell their products.

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Value Add

Dealer Value:

Increase sales by ensuring inventory availability

Manufacturer Value:

Allow manufacturers to focus on their core business and improve balance sheet by transferring credit risk and management

CDF provides inventory financing solutions, service and intelligence through in-depth

industry expertise and commitment that is superior to alternative funding sources

Our business model allows for an efficient, uninterrupted flow of products from

manufacturers to dealers, enabling their growth and profitability

CDF business model

Dealer Manufacturer

Ships Inventory

Orders Inventory

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Inventory Management

Predictable cash flow

Reduced credit risk

Accelerated funding

Reduce capital investment

Manufacturer/Distributor Dealer

Ability to stock & quickly deliver better selections Improved cash flow & liquidity

E-commerce based account management

Larger credit facilities Reduced borrowing cost

Value proposition

CDF product line/manufacturer overview

Marine RecreationVehicles

Lawn and Garden Powersports Technology IndustrialEquipment

Transportation ConsumerElectronic and

Appliances

Motorcycles

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Factoring is…

A tool to monetize a portion of your client’s working capital

Client’s “Monetizable” Working Capital

CDF Product Factoring

CDF Product Floorplan

A/R

Inventory

14 / April 2013

Account Receivables Financing Benefits For the Manufacturer (“Seller”) & the Customer (“Debtor”)

• Accelerate cash flow – Reduce receivables - Exchanging receivables for cash - Enhance operational metrics (DSO) – Certainty of payment by GE prior to collection from your

customers

• Eliminate credit losses – CDF assumes credit risk. Seller remains responsible for commercial disputes

• Reduced open account administration costs – CDF performs account management (credit/ collections)

• Limited documentation process for the customers / debtors

• Drive incremental sales by expanding traditional open account terms - Providing up to 180 days

Manufacturer / Seller Customer / Debtor

• Enhanced repayment terms if the Seller supports the additional terms (financing fee)

• Limited documentation process for the customers / debtors

• One dedicated account manager to handle all account servicing issues – no call center

Underwriting &

Servicing

GE Policy Limits

Field Audits

Portfolio Control

Collateral Security / Repurchase

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Internal Credit

Experienced credit professionals

Underwriting guidelines

Consistent

policies/procedures

Standardized metrics

Financial & performance triggers

Risk Classification

Risk Ratings

AML/KYC

Collateral Control

200+ field service reps

Perform ~18,000 inspections monthly

Bank Deposit Review financial team of 20+

Compliance Exam Group

of ~16+

Risk based scoring model driving inspection cycle

Portfolio Control System

Systematic queuing (PCS)

38 deficiency rules

Assigned to PM

Credit line utilization monitoring

Portfolio performace monitoring (Non earning, delinquency)

Problem Loan Review

Special Asset Group

Maintain Value

Manufacturer repurchase

Discretionary facilities

Curtailments

Security by inventory

Personal Guarantees

Vendor recourse, loss pools, risk sharing

Multi-Layer Loss Protection

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Underwriting: Credit tools & systems

• Electronic Approval System (EAS): front-end credit system

Automated approval system for small credit lines

Statistically validated models / incorporates an individual obligor's

probability of default

• Regulatory Due Diligence: automated screening for government watch list, Politically

Exposed Persons (PEP), anti-money laundering, fraud detection, irregular business practices,

“Know Your Customer” requirements

• Moody’s Risk Analyst: financial spreading tool, detailed & robust cash flow & related ratio analysis, integrated projection capability

• Credit Bureaus: D&B/personal credit reporting agencies, public reporting agencies (S&P,

Moody’s, Fitch)

• Data Mart: gives access to dealer information from base operating systems. It is used for

portfolio reporting, identification of weaker accounts, aged inventory, portfolio trends,

exposures, etc.

• 240+ full time FSG employees strategically positioned in North America

• Coverage in 50 States and 10 Canadian Provinces, NW Territories & Yukon

• Headquartered in Chicago, IL and Toronto, Canada

• Highly tenured and expert leadership team and staff

Field Services Group

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Technology

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Mfr. Playbook

Easy Transactions & Actionable Analytics

COMS power analytics Analytics Online

Inventory Finance Technology Leader

• Interactive Analytical Tool • OEM’s (4) Metrics

• Outstandings, Liquidations • Aging, Credit Capacity

• Dealers (3) Metrics • Volume, Outstandings • Charges Billed

• Export Line Item Data • For Dealers & OEM’s

• Advanced Analytical Tool • 6 Detailed Dashboards • Powerful Search

• State, Region, Country • Customized G,Y,R Indicators • Customized Dealer Alerts • Email Notifications • For OEM Customers*

• Industry Benchmark Report • Key Performance Metrics • Financial Comparisons • Posted to COMS Monthly • For OEM Customers*

COMS

• Quick Transactions 24/7 • Actionable Work Queues • Easy Online Payments • Email Notifications • Customized Views • Quick Access to Interest Paid • Flexible Document

Downloads • For Dealers & OEM’s

* Selective OEM’s only

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Access GE Customer Portal

Connect to GE Experts Share Content

• Growth & Innovation

• Operational Effectiveness

• Leadership & Development

• Finance

• Globalization

• Best practices

• Whitepapers

• Primers

• Diagnostic Tools

• Video

21st century delivery channel

Network with Peers

• Social networking

• Private cohort communities

• Events