A. Results of Operations

General Electric Company's consolidated financial statements represent the combination of the industrial manufacturing and product services businesses of General Electric Company (GE) and the financial services businesses of General Electric Capital Services, Inc. (GECS or financial services).

In the accompanying analysis of financial information, we sometimes use information derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission (SEC) rules. For such measures, we have provided supplemental explanations and reconciliations in Exhibit 99(a) to this Form 10-Q Report.

Unless otherwise indicated, we refer to captions such as revenues and earnings from continuing operations attributable to the Company simply as "revenues" and "earnings" throughout this Management's Discussion and Analysis. Similarly, discussion of other matters in our condensed, consolidated financial statements relates to continuing operations unless otherwise indicated.

Overview

Earnings from continuing operations attributable to the Company decreased 35% to $2.832 billion in the first quarter of 2009 compared with $4.351 billion in 2008. Earnings per share (EPS) from continuing operations were $0.26 in the first quarter of 2009, down 40% compared with $0.43 in the first quarter of 2008.

Loss from discontinued operations, net of taxes, was an insignificant amount in both the first quarter of 2009 and 2008, and included the results of GE Money Japan (our Japanese personal loan business, Lake, and Japanese mortgage and card businesses, excluding our minority ownership in GE Nissen Credit Co., Ltd.), our U.S. mortgage business (WMC), Plastics, Advanced Materials, most of GE Insurance Solutions Corporation (GE Insurance Solutions), GE Life and Genworth Financial, Inc. (Genworth).

Net earnings attributable to GE common shareowners decreased 36% to $2.736 billion and EPS decreased 40% to $0.26 in the first quarter of 2009 compared with $4.304 billion and $0.43, respectively, in the first quarter of 2008.

Revenues of $38.4 billion in the first quarter of 2009 were 9% lower than in the first quarter of 2008, reflecting organic revenue declines and the stronger U.S. dollar, partially offset by the net effects of acquisitions and dispositions. Industrial sales decreased 1% to $24.0 billion, reflecting the stronger U.S. dollar, partially offset by the net effects of acquisitions and dispositions. Sales of product services (including sales of spare parts and related services) grew 5% to $8.4 billion in the first quarter of 2009. Financial services revenues decreased 20% over the comparable period of last year to $14.4 billion, reflecting organic revenue declines and the stronger U.S. dollar.

Overall, acquisitions contributed $1.2 billion and $2.3 billion to consolidated revenues in the first quarters of 2009 and 2008, respectively. Our consolidated earnings in the first quarters of 2009 and 2008 included approximately $0.4 billion and $0.1 billion, respectively, from acquired businesses. We integrate acquisitions as quickly as possible. Only revenues and earnings from the date we complete the acquisition through the end of the fourth following quarter are attributed to such businesses. Dispositions also affected our operations through lower revenues of $0.1 billion in the first quarter of 2009 and higher revenues of $0.3 billion in the first quarter of 2008. The effect of dispositions on earnings was an increase of $0.4 billion and $0.3 billion in the first quarters of 2009 and 2008, respectively.

The most significant acquisitions affecting results in the first quarter of 2009 were Airfoils Technologies International - Singapore Pte. Ltd. (ATI-Singapore) and Vital Signs, Inc. at Technology Infrastructure; Hydril Pressure Control at Energy Infrastructure; and CitiCapital, Bank BPH and Interbanca S.p.A. at Capital Finance.

Segment Operations

Operating segments comprise our five businesses focused on the broad markets they serve: Energy Infrastructure, Technology Infrastructure, NBC Universal, Capital Finance and Consumer & Industrial.

Segment profit is determined based on internal performance measures used by the Chief Executive Officer to assess the performance of each business in a given period. In connection with that assessment, the Chief Executive Officer may exclude matters such as charges for restructuring; rationalization and other similar expenses; in-process research and development and certain other acquisition-related charges and balances; technology and product development costs; certain gains and losses from acquisitions or dispositions; and litigation settlements or other charges, responsibility for which preceded the current management team.

Segment profit always excludes the effects of principal pension plans, results reported as discontinued operations, earnings attributable to noncontrolling interests and accounting changes. Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment's management is measured - excluded in determining segment profit, which we sometimes refer to as "operating profit," for Energy Infrastructure, Technology Infrastructure, NBC Universal and Consumer & Industrial; included in determining segment profit, which we sometimes refer to as "net earnings," for Capital Finance.

We have reclassified certain prior-period amounts to conform to the current-period's presentation. In addition to providing information on segments in their entirety, we have also provided supplemental information for certain businesses within the segments.

Energy Infrastructure

                   Three months ended March 31
(In millions)             2009                2008

Revenues       $         8,239     $         7,724

Segment profit $         1,273     $         1,070

Revenues
Energy(a)      $         6,941     $         6,356
Oil & Gas                1,543               1,535

Segment profit
Energy(a)      $         1,150     $           937
Oil & Gas                  179                 161

(a) Effective January 1, 2009, our Water business has been combined with Energy. Prior-period amounts were reclassified to conform to the current period's presentation.

Energy Infrastructure revenues rose 7%, or $0.5 billion, in the first quarter of 2009 on higher volume ($0.6 billion) and higher prices ($0.3 billion), partially offset by the stronger U.S. dollar ($0.4 billion). The increase in volume reflected increased sales of thermal equipment at Energy, and the effects of acquisitions at Oil & Gas. The increase in price was primarily at Energy, while the effects of the stronger U.S. dollar were at both Oil & Gas and Energy.

Segment profit rose 19%, or $0.2 billion, as higher prices ($0.3 billion) and higher volume ($0.1 billion) more than offset higher material and other costs ($0.1 billion). The increase in volume primarily related to Energy. Higher material and other costs were at both Energy and Oil & Gas. Included in segment results was a decrease of $0.2 billion to revenues and $0.1 billion to segment profit related to a change in estimate of measuring progress towards long-term contract completion at Vetco Gray.

Technology Infrastructure

                       Three months ended March 31
(In millions)                  2009              2008

Revenues             $       10,436    $       10,460

Segment profit       $        1,803    $        1,701

Revenues
Aviation             $        4,817    $        4,320
Enterprise Solutions            913             1,105
Healthcare                    3,545             3,887
Transportation                1,171             1,148

Segment profit
Aviation             $        1,080    $          775
Enterprise Solutions            102               154
Healthcare                      411               528
Transportation                  217               254

Technology Infrastructure revenues in the first quarter of 2009 were flat compared with the first quarter of 2008, as the stronger U.S. dollar ($0.2 billion) and lower volume ($0.1 billion) were offset by the net effects of acquisitions and dispositions ($0.2 billion), including gains related to the ATI-Singapore acquisition and the Times Microwave Systems disposition, and higher prices ($0.1 billion). The effects of the stronger U.S. dollar were primarily at Healthcare. The decrease in volume at Healthcare and Enterprise Solutions was partially offset by an increase in volume at Aviation. Higher prices were primarily at Aviation.

Segment profit rose 6% primarily from the net effects of acquisitions and dispositions ($0.2 billion), including gains related to the ATI-Singapore acquisition and the Times Microwave Systems disposition, and higher prices ($0.1 billion), partially offset by higher labor and other costs ($0.1 billion) and lower productivity ($0.1 billion). The increase in labor and other costs primarily related to Aviation. The effects of productivity related to Transportation, Healthcare and Enterprise Solutions, partially offset by Aviation.

NBC Universal revenues of $3.5 billion decreased 2% in the first quarter of 2009 as lower revenues in film ($0.1 billion) and lower earnings and impairments related to associated companies and investment securities ($0.1 billion) were partially offset by higher revenues in our television and cable businesses ($0.1 billion). Television and cable businesses revenues rose as increased revenues from the 2009 Super Bowl broadcast more than offset lower advertising revenues. Segment profit of $0.4 billion decreased 45% as lower earnings from our television business, including the effects of costs related to the Super Bowl broadcast and lower advertising revenues ($0.2 billion), lower earnings in film ($0.1 billion) and lower earnings and impairments related to associated companies and investment securities ($0.1 billion) were partially offset by higher earnings in cable ($0.1 billion).

Capital Finance

                 Three months ended March 31
(In millions)            2009              2008

Revenues       $       13,088    $       16,969

Segment profit $        1,119    $        2,679




                                 At
              March 31,    March 31,     December 31,
(In millions)    2009         2008           2008

Total assets  $  542,250   $  620,038   $      572,903




                                            Three months ended March 31
(In millions)                                      2009                2008

Revenues
Commercial Lending and Leasing (CLL)(a) $         5,578     $         6,606
Consumer (formerly GE Money)(a)                   4,747               6,440
Real Estate                                         975               1,883
Energy Financial Services                           644                 770
GE Commercial Aviation Services (GECAS)           1,144               1,270

Segment profit
CLL(a)                                  $           222     $           688
Consumer(a)                                         727                 991
Real Estate                                        (173 )               476
Energy Financial Services                            75                 133
GECAS                                               268                 391




                                             At
                          March 31,    March 31,     December 31,
(In millions)                2009         2008           2008

Assets
CLL(a)                    $  222,878   $  243,928   $      228,176
Consumer(a)                  164,617      221,184          187,927
Real Estate                   81,858       86,605           85,266
Energy Financial Services     22,596       20,837           22,079
GECAS                         50,301       47,484           49,455

(a) During the first quarter of 2009, we transferred Banque Artesia Nederland N.V. (Artesia) from CLL to Consumer. Prior-period amounts were reclassified to conform to the current period's presentation.

Capital Finance revenues decreased 23% and net earnings decreased 58% compared with the first quarter of 2008. Revenues for the first quarters of 2009 and 2008 included $0.7 billion and $0.2 billion of revenue from acquisitions, respectively, and in 2009 were reduced by $0.5 billion as a result of dispositions. Revenues for the quarter also decreased $3.9 billion compared with the first quarter of 2008 as a result of organic revenue declines and the stronger U.S. dollar. Net earnings decreased by $1.6 billion in the first quarter of 2009 compared with the first quarter of 2008.

Additional information about certain Capital Finance businesses follows.

CLL revenues decreased 16% and net earnings decreased 68% compared with the first quarter of 2008. Revenues for the first quarters of 2009 and 2008 included $0.5 billion and $0.1 billion from acquisitions, respectively. Revenues for the first quarter of 2009 also included $0.3 billion related to the partial sale of our limited partnership interest in Penske Truck leasing Co., L.P. (PTL) and remeasurement of our retained investment. Revenues for the quarter decreased $1.7 billion compared with the first quarter of 2008 as a result of organic revenue declines ($1.4 billion) and the stronger U.S. dollar ($0.3 billion). Net earnings decreased by $0.5 billion in the first quarter of 2009, resulting from core declines related to the weakened economic environment ($0.8 billion), which included an increase of $0.2 billion in the provision for losses on financing receivables, and lower investment income of $0.1 billion, partially offset by acquisitions ($0.1 billion). Net earnings included the effects of higher mark-to-market losses and other-than-temporary impairments ($0.2 billion) and the absence of the 2008 Genpact gain ($0.3 billion), partially offset by a gain related to the partial sale of a limited partnership interest in PTL ($0.3 billion) and remeasurement of our retained investment.

Consumer revenues decreased 26% and net earnings decreased 27% compared with the first quarter of 2008. Revenues for the first quarter of 2009 included $0.1 billion from acquisitions and were reduced by $0.5 billion as a result of dispositions, and the lack of a current-year counterpart to the 2008 gain on sale of our Corporate Payment Services (CPS) business ($0.4 billion). Revenues for the quarter also decreased $1.0 billion compared with the first quarter of 2008 as a result of the stronger U.S. dollar ($0.7 billion) and organic revenue declines ($0.3 billion). The decrease in net earnings resulted primarily from core declines ($0.2 billion) and the lack of a current-year counterpart to the 2008 gain on sale of our CPS business ($0.2 billion). The decreases were partially offset by higher securitization income ($0.1 billion). Core declines primarily resulted from lower results in the U.S., reflecting the effects of higher delinquencies ($0.6 billion), partially offset by growth in lower-taxed earnings from global operations ($0.4 billion). The first quarter of 2009 benefit from lower-taxed earnings from global operations included $0.5 billion from the decision to indefinitely reinvest prior-year earnings outside the U.S.

Real Estate revenues decreased 48% and net earnings decreased 136% compared with the first quarter of 2008. Revenues for the quarter decreased $0.9 billion compared with the first quarter of 2008 as a result of organic revenue declines ($0.8 billion), primarily as a result of a decrease in sales of properties, and the stronger U.S. dollar ($0.1 billion). Real Estate net earnings decreased $0.6 billion compared with the first quarter of 2008, primarily from a decrease in gains on sales of properties as compared to the prior period ($0.5 billion) and a decline in real estate lending net earnings ($0.1 billion). Depreciation expense on real estate properties totaled $0.2 billion in both the first quarter of 2009 and 2008.

In the normal course of our business operations, we sell certain real estate equity investments when it is economically advantageous for us to do so. However, as real estate values are affected by certain forces beyond our control (e.g. market fundamentals and demographic conditions), it is difficult to predict with certainty the level of future sales or sale prices.

Energy Financial Services revenues decreased 16% and net earnings decreased 44% compared with the first quarter of 2008. Revenues for the first quarter of 2009 included $0.1 billion of gains from dispositions. Revenues for the quarter also decreased $0.2 billion compared with the first quarter of 2008 as a result of organic declines ($0.2 billion), primarily as a result of the effects of lower energy commodity prices and a decrease in gains on sales of assets. The decrease in net earnings resulted primarily from core declines, including a decrease in gains on sales of assets as compared to the prior period and the effects of lower energy commodity prices.

GECAS revenues and net earnings decreased 10% and 31%, respectively, compared with the first quarter of 2008. The decrease in revenues resulted primarily from organic revenue declines ($0.1 billion) due to lower asset sales. The decrease in net earnings resulted primarily from core declines due to lower asset sales.

Consumer & Industrial revenues of $2.2 billion decreased 22%, or $0.6 billion, in the first quarter of 2009 compared with the first quarter of 2008, as lower volume ($0.7 billion) and the stronger U.S. dollar ($0.1 billion) were partially offset by higher prices ($0.1 billion). The decrease in volume primarily reflected tightened consumer spending in the U.S. domestic market. Segment profit decreased 75%, or $0.1 billion, in the first quarter of 2009 as lower productivity ($0.1 billion) and lower volume ($0.1 billion) were partially offset by higher prices ($0.1 billion).

Discontinued Operations

                                     Three months ended March 31
(In millions)                               2009              2008

Loss from discontinued operations,
net of taxes                       $         (21 )   $         (47 )

Discontinued operations comprised GE Money Japan, WMC, Plastics, Advanced Materials, GE Insurance Solutions, GE Life, and Genworth. Results of these businesses are reported as discontinued operations for all periods presented.

For additional information related to discontinued operations, see Note 3 to the condensed, consolidated financial statements.

Corporate items and eliminations revenues in the first quarter of 2009 increased by $0.3 billion as a result of net gains on hedging activity ($0.6 billion), partially offset by lower revenues from insurance activities ($0.1 billion) and lower income from guaranteed investment contracts ($0.1 billion). Corporate items and eliminations costs were flat compared to first quarter 2008 as an increase in restructuring, rationalization and other charges ($0.2 billion) was offset by lower incentive compensation costs ($0.1 billion) and net gains on hedging activity ($0.1 billion).

Certain amounts included in Corporate items and eliminations cost are not allocated to GE operating segments because they are excluded from the measurement of their operating performance for internal purposes. In the first quarter of 2009, these included $0.1 billion at each of Technology Infrastructure, Energy Infrastructure and Capital Finance, primarily for restructuring, rationalization and other charges, and $0.1 billion at NBC Universal, primarily for restructuring, rationalization and other charges and technology and product development costs. (GECS amounts on an after-tax basis).

B. Statement of Financial Position

Overview of Financial Position

Major changes in our financial position in the first quarter of 2009 resulted from the following:

· We completed the exchange of our Consumer businesses in Austria and Finland, the credit card and auto businesses in the U.K., and the credit card business in Ireland for a 100% ownership interest in Interbanca S.p.A., an Italian corporate bank;

· In order to improve tangible capital and reduce leverage, GE contributed $9.5 billion to GECS, of which $8.8 billion was subsequently contributed to GECC;

· The U.S. dollar was stronger at March 31, 2009 than at December 31, 2008, decreasing the translated levels of our non-U.S. dollar assets and liabilities;

· We deconsolidated PTL following our partial sale during the first quarter of 2009; and

· Collections on financing receivables exceeded originations at GECS.

Consolidated assets were $760.8 billion at March 31, 2009, a decrease of $37.0 billion from December 31, 2008. GE assets decreased $5.7 billion, and financial services assets decreased $25.4 billion.

GE assets were $193.3 billion at March 31, 2009, a $5.7 billion decrease from December 31, 2008. The decrease reflects a $10.0 billion decrease in cash and equivalents (primarily related to a $9.5 billion capital contribution to GECS during the quarter), a $2.5 billion decrease in current receivables and a $0.4 billion decrease in property, plant and equipment - net, partially offset by a $7.5 billion increase in investment in GECS.

Financial Services assets were $635.5 billion at March 31, 2009. The $25.4 billion decrease from December 31, 2008, was primarily attributable to decreases in net financing receivables of $17.4 billion, assets held for sale of $10.6 billion, net property, plant and equipment (including equipment leased to others) of $5.9 billion, goodwill of $0.9 billion and other GECS receivables of $0.9 billion, partially offset by increases in cash and equivalents of $7.8 billion and all other assets of $2.5 billion.

Consolidated liabilities of $651.3 billion at March 31, 2009, were $32.8 billion lower than the year-end 2008 balance. GE liabilities decreased $1.8 billion, while financial services liabilities decreased $32.5 billion.

GE liabilities were $85.8 billion at March 31, 2009. During 2009, short-term borrowings decreased $0.8 billion to $1.6 billion and long-term borrowings increased $1.3 billion to $11.2 billion. The ratio of borrowings to total capital invested for GE at the end of the first quarter was 10.6% compared with 9.9% at the end of last year and 10.2% at March 31, 2008.

Financial Services liabilities decreased $32.5 billion from year-end 2008 to $572.8.billion reflecting decreases in total borrowings of $21.5 billion, all other liabilities of $8.2 billion, accounts payable of $2.2 billion and liabilities of businesses held for sale of $0.6 billion.

Cash Flows

Consolidated cash and equivalents were $46.8 billion at March 31, 2009, a decrease of $1.4 billion during the first quarter of 2009. Cash and equivalents totaled $15.3 billion at March 31, 2008, a decrease of $0.5 billion from December 31, 2007.

We evaluate our cash flow performance by reviewing our industrial (non-financial services) businesses and financial services businesses separately. Cash from operating activities (CFOA) is the principal source of cash generation for our industrial businesses. The industrial businesses also have liquidity available via the public capital markets. Our financial services businesses use a variety of financial resources to meet our capital needs. Cash for financial services businesses is primarily provided from the issuance of term debt and commercial paper in the public and private markets, time deposits, as well as financing receivables collections, sales and securitizations.

GE Cash Flow

GE cash and equivalents aggregated $2.1 billion at March 31, 2009, compared with
$5.1 billion at March 31, 2008. GE CFOA totaled $2.8 billion for the first
quarter of 2009 compared with $4.9 billion for the first quarter of 2008. With
respect to GE CFOA, we believe that it is useful to supplement our GE Condensed
Statement of Cash Flows and to examine in a broader context the business
activities that provide and require cash.

                                                   Three months ended March 31
(In billions)                                             2009                2008

Operating cash collections(a)                  $          25.2     $          26.4
Operating cash payments                                  (22.4 )             (22.6 )
Cash dividends from GECS to GE                               -                 1.1
GE cash from operating activities (GE CFOA)(a) $           2.8     $           4.9

(a) GE sells customer receivables to GECS in part to fund the growth of our industrial businesses. These transactions can result in cash generation or cash use. During any given period, GE receives cash from the sale of receivables to GECS. It also foregoes collection of cash on receivables sold. The incremental amount of cash received from sale of receivables in excess of the cash GE would have otherwise collected had those receivables not been sold, represents the cash generated or used in the period relating to this activity. The incremental cash generated in GE CFOA from selling these receivables to GECS increased GE CFOA by an insignificant amount and $0.6 billion in the three months ended March 31, 2009 and 2008, respectively. See Note 19 to the condensed, consolidated financial statements for additional information about the elimination of intercompany transactions between GE and GECS.

The most significant source of cash in GE CFOA is customer-related activities, the largest of which is collecting cash following a product or services sale. GE operating cash collections decreased by $1.2 billion during the first three months of 2009. This decrease is consistent with the changes in comparable GE operating segment revenues. Analyses of operating segment revenues discussed in the preceding Segment Operations section are the best way of understanding their customer-related CFOA.

The most significant operating use of cash is to pay our suppliers, employees, tax authorities and others for the wide range of material and services necessary in a diversified global organization. GE operating cash payments decreased in the first three months of 2009 by $0.2 billion, comparable to the decrease in GE total costs and expenses.

GE CFOA decreased $2.0 billion compared with the first quarter of 2008, reflecting the lack of a current-year dividend from GECS ($1.1 billion), a decrease in progress collections ($2.3 billion) and other activities ($1.0 billion), partially offset by other working capital improvements ($2.4 billion).

Dividends from GECS represented the distribution of a portion of GECS retained earnings and are distinct from cash from continuing operating activities within the financial services businesses. The amounts we show in GE CFOA are the total dividends, including normal dividends as well as any special dividends from . . .