Balance Sheet and Cash Flow

The Company continues to maintain a strong cash position. Cash and marketable securities was $124.1 billion with shareowner’s equity of $115.5 billion. Borrowings and bank deposits amounted to $494.8 billion at the end of the quarter.

Cash flow from operating activities in the quarter was $3.8 billion. The Company expects to generate cash flow from operating activities of $14 billion to $15 billion in FY10.

Dividend

On July 23, 2010, the Board of Directors of GE raised the Company’s quarterly dividend by 20% from $0.10 to $0.12 per outstanding share of the Company's common stock. The dividend was paid on October 25, 2010 to shareowners of record at the close of business on September 20, 2010.

Share Repurchase

The board has extended its share-repurchase plan, which would have otherwise expired on December 31, 2010, through 2013. Repurchases under the existing $15 billion repurchase plan were suspended on September 25, 2008. The plan currently has approximately $11.6 billion in remaining authorization. General Electric has about $900 million of stock buyback in 3Q10.

Liquidity

GE Capital participated in the Temporary Liquidity Guarantee Program (TLGP), under which the government would back up to $126 billion of the finance unit’s debt. This allowed the Company to refinance debt at rates lower than it otherwise would have. GE issued $23 billion in non-guaranteed debt in 2009 out of its $45 billion in total 2009 financing. GE has completed its 2010 refinancing of $38 billion and $20 billion in early funding of 2011 maturities. Ultimately, with fewer borrowings and recent capital infusions into GE Capital, the parent company is targeting reduced leverage ratios for the financial unit.

Acquisitions

General Electric also made a couple of value creating acquisitions:

On October 22, 2010, GE Healthcare and Clarient Inc. (CLRT) announced that they have entered into a definitive agreement for GE Healthcare to acquire Clarient, a leading player in the fast-growing molecular diagnostics sector. Clarient’s technologies, combined with GE Healthcare’s strengths in diagnostic imaging, are expected to accelerate the development of new integrated tools for the diagnosis and characterization of cancer. A subsidiary of GE will commence a tender offer for all outstanding common and preferred shares of Clarient at $5.00 per common share and $20.00 per preferred share, payable in cash in each case.

On October 14, 2010, GE expanded its smart grid software portfolio with the acquisition of data migration and SCADA simulation specialists Opal Software. The acquisition allows GE’s Digital Energy business to deliver greater operational and network productivity to utility customers and increase the development speed and delivery of new solutions—securing GE as a smart grid technology leader. In addition, the Australia-based Opal Software team will improve GE’s ability to support growth in the Asia Pacific region by providing increased local workforce and technology.

On October 6, 2010, General Electric announced that it agreed to acquire privately held Dresser Inc., which makes oil-field equipment worth approximately $3 billion. Dresser is owned by private-equity funds Riverstone Holdings and First Reserve Corporation. General Electric said the acquisition is expected to add to its earnings next year. The equipments that Dresser makes provide solutions for gas and fuel distribution. GE said Dresser’s diverse portfolio will complement many of GE’s product offerings. Dresser, which generates 85% of its revenue from energy customers, had revenues of $2 billion in 2009.

General Electric also announced that it had bought retail finance loans worth $1.6 billion from Citigroup (C).

Meanwhile, GE also announced that U.K.-based oilfield services company Wellstream had rejected the largest U.S. conglomerate’s $1.2 billion takeover offer. General Electric indicated it would not go ahead and make a revised offer.

• Difficult Economy:  A deterioration in current economic trends would make a rebound in earnings growth.

• Integration Risks:  Sizeable acquisitions of companies in various industries require the integration of diverse corporate cultures, which may not always be successful.

• Business Risks:  For a Company as large as GE, the additional revenue needed for growth is quite large, posing a challenge to develop businesses on such a vast scale.

• Weak Financial Market:  Continued weakness or disruption in the financial markets could impact the Company’s financial unit.