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So Jeff I think I want to keep this relatively open but maybe a great way to start since you are reasonably new in the role. Let’s talk about what your mandate is and what you think you can -- what your boss and what the Board wants from you and the role and how it might be evolving and maybe some of your early observations from the role too on positive surprises and negative surprises?

Jeff Bornstein

First of all, congratulations on the conference, the attendance is pretty impressive now I think if you actually pulled this off in Lake Placid New York I'd be really impressed, but not withstanding that it’s -- you got a good turnout here which is great. I am very focused operationally in the Company on simplification, cash flow and ultimately margins. And that is how I'm spending the bulk of my time. In addition to that capital allocation obviously is a big issue in making sure we are putting that capital, deploying that capital in an investor friendly way is critically important.

And that is how I’m spending the bulk of my time. Unfortunate to the moment anyway that you know Keith had to deal with a lot of crisis, one thing after another. And right now I think we're in a pretty stable place, and so I'm principally focused on us delivering operationally on the commitments that we've made.

Scott Davis - Barclays Capital

Let’s talk about cost side opportunity we will start with the fun stuff because this is such a critical component of whether GE stock is a winner or a loser over the next couple of years in our opinion at least -- and you had a bit of a sell off after the quarter and we can talk about that next. But gives us a sense of your confidence and ability to take out structural cost and where some of the low hanging fruit is and at what point does maybe some examples, some tangible examples so that at least the audience can understand because one of the feedback -- pieces of feedback I get from investors when I'm out on the road talking about GE is that, hey you know -- their comment would be I thought GE was a well oiled machine, how could there be cost to take out in a Company that’s been so well run for the last 20 years. And that’s the piece of feedback we get. But then clearly the cost out in the last 12 months was very good and your goals for the next 12 are fairly admirable as well. So maybe you can address that.

Jeff Bornstein

Yes, so I'd start with simplification is really about competitiveness. I think we live in a world today where the pace of change is just phenomenal, globalization exacerbates that. And I think long-term you can’t win just on technology, you got to win on technology and cost and the cost position, simplification for us is a way of getting -- reducing the friction, increasing the speed of the Company and I think fundamentally what it means is how do you get $150 billion Company to run with a sense of urgency and customer focus that a much smaller company would operate at. And a byproduct of that is we have the opportunity to change the cost structure of the Company, which I think competitively is paramount. And an outcropping of that is the margin improvement, so it all more or less fits together. Now I get the question a lot about I thought GE was a well run Company how can you have all this opportunity?

I think GE historically has been a well run Company, that certainly doesn’t mean in any way, shape or form that we’ve enjoyed all the benefits that we are capable of enjoying in terms of scale. And it’s much more than an SG&A discussion, we tend to focus on that a bit because it’s an easy external cost, people can compare our performance with other companies. For us simplification is about the entire cost structure of the Company. It’s direct material, it’s manufacturing footprint, it’s supply opportunity, and it is SG&A, it’s engineering cost. So there’s no part of our cost structure that we’re not thinking about and not focused on.

Speed, cost, technology is the output that we need to deliver on if we’re going to deliver the impacts that we’ve committed to investors over the next two or three years, and how we have described success in 2016. So I’ll give you a few examples, shared services, so everyone of your companies have this same thing, you have all these processes in your backroom whether you recognize or not that are not between you and what you might be learning from, a company that you’re evaluating for investment or actually making the investment or monitoring your portfolio. But behind the scenes you’ve got people that are running your healthcare, making payroll, doing accounts payable, writing the applications that support whatever systems you’re using.

We have an enormous opportunity to leverage that across the company and when I talk about shared service, that’s what I’m talking about. World class companies basically run that backroom, 60%-65%-70% shared, today at GE we’re about 35% and we’re like in the first inning. So there was an enormous amount of scale that we can garner by consolidating those processes and activities across the world. Doing two-three-four times in hubs versus doing them 100s of times in individual P&Ls, across 160 different countries.

On the supply chain side if you take our industrial systems business within energy management, now we started there on a simplification in about a year and a half ago. It’s an old GE business with a big supply chain manufacturing footprint. Now we reduced the factory footprint, supply chain footprint in that business 30% in the last 18 months. And that business has gone in 2013, that business grew earnings 30%, this is an old state GE business where 2% or 3% top-line.

So we see it over and over again, reducing complexity around structure, faster decision making more authority at the point where the action is actually taking place, reducing the overall cost structure and competitive as a Company we end up with better businesses. The last example I’ll give you is services, one big asset that we have is, we have this enormous services backlog, where for the most part we have sold this service into the future at a price and in many cases we’ve escalation clauses on top of that, based on indices, so, every single dollar cost we find a delivery against that service is a dollar margin, sometimes if that includes investment less the cost of, to get that dollar cost down.

We are hugely focused on that, that is an enormous opportunity for us to deliver more margin and more value overtime, and so simplification we tend to talk about SG&A, it is much more pervasive than that, it’s a different way to think about running the Company, it’s a different behavioral set for the leadership team and the folks in the businesses do. You know we’re early innings but I think we feel pretty good with the momentum that we have.

Scott Davis - Barclays Capital

That’s helpful, let’s, and I want to go to ARS question too because I may forget, and I think this is my 15th session here in two days and those bright lights are brutal aren’t they?

Jeff Bornstein

Yes, that’s why I’m looking at you.

Scott Davis - Barclays Capital

Yes it’s, I am wondering when the headache’s going to go away but, let’s talk about earnings quality and one of the things that, when I first started covering GE a dozen years ago, GE always made its numbers, it was fairly opaque and there was real estate gains and private equity gains and there was always a lot of moving parts but people are relatively forgiving because the underlying businesses were measurable and generally good.

Over the years I think what we’ve seen is almost a, I’m not sure this is statistically true but at least the perception is, is that the volatility and the standard deviation around earnings quality and the results has widened. You have a couple of quarters that are really that are tangibly measurably good and then a quarter like this most recent quarter where it’s a little bit of a head scratcher and people say I don’t understand how 20% of the earnings could come from tax and things like that.

That may or may not be fair, but it’s those perception issues find a way into your multiple, right. So how do you particularly as the new CFO address that variability and those issues within legal limits, obviously, but how do you address that and make investors comfortable that what they see is -- what they get out of buying GE is a fairly to the high executing predictable high quality earning stream company?

Jeff Bornstein

I almost, I think there is two questions. The first one, transparency, I think in the fourth quarter we try to be very transparent. I mean we -- I told folks that we were going to have some gains in the quarter from industrial sales and that we would book those in corporate. We did that. We laid out the impact of that. They weren’t buried down in the segments. GE Capital had a very messy quarter between the Swiss IPO and impairments et cetera. And we try to walk through the bigger pieces of that and explained to people how that was. And that the tax benefit you’re referring was largely driven by this the Swiss IPO and what the source of it was. And then I try to give you a sense of from an ongoing perspective how you might really think about what the continuing performance of GE Capital ex all that noise was in the quarter.

So, I think we’re trying to be transparent with people on how we go from A to B on the margin point, right. I didn’t say 70 hard round, right. We said we ended at 66 and 66 is not 70 and it’s how the 66 came together. We have tried to be clear with folks on the call about how we thought about the relative performance of individual businesses. When we have head businesses, and we don’t think it performed up to snuff I think we’ve said and we have tried to describe why we think that is and whether we think it’s a lingering issue or something we got our arms around. So, I can really only talk about two or three quarters here the ones that I have really participated in this level and we try to increase with transparency. We are issuing the -- we’re giving you guys a picture with the press release as opposed to waiting to see it on the call and we will be doing other changes and enhancements going forward to kind of help the investment community understand where we are.

The second part of your question on how do you make the Company more predicable per se. I mean I think, we have operating rhythms in the Company obviously that we performed it that we try to stay to ahead of what’s going on in the businesses and that we feel good about in the short-term that we understand what performance is going look like. It’s easier over the longer term or multiple quarters to understand exactly where we are. You do have things that happened in an individual quarter and I think our responsibility is when those things have to be transparent with investors about what those are and why they are what they are and our responsibility to make sure that we set our plans with the businesses and we have communicated with investors around expectations what’s going to happen. That is reasonably within a role of apples of what we expect.

Scott Davis - Barclays Capital

What about some of the noise around discontinued ops below the line items that we finished off 2013 and maybe some sense of guidance around 2014 and how you think about that going forward?

Jeff Bornstein

Yes, so the discontinued operations are associated with particularly dispositions at GE Capital. Those are going to happen all the time as we continue to pair that portfolio down. We try to be pretty transparent with people on what those impacts are. I think we’ve detailed them out when they have occurred. The really the two big items are the WMC and Grey Zone have been the bigger items in discontinued ops, as most of you know, we’ve got this opportunity in the first quarter as part of the contract with Shinsei to evaluate a buyout of liability with Shinsei.

We are actively with Shinsei on that now. And when we have got something to share with folks, we will in fact do that. And then WMC, we’re continuing to make progress. And I am hopeful that overtime this will resolve itself within the financial construct that we’ve communicated to people and this won’t be lingering. So I understand pressure point on those two items and we would like to get those off the table if we can.

Scott Davis - Barclays Capital

Okay let’s go to the audience response system and then I want to open up questions to the audience as well. But let’s make sure we work our way through these and get a sense of the audience and ownership profile here, do you currently own the stock? Let’s vote please. And I will give you a little color on this when we see the results versus other companies.

Okay, 61%, no, the average has been 75%. So, you’re the lowest we’ve had. So that’s probably market cap related. Only 9% underweight I think that’s better than I would have expected. Okay let’s go the next question. What is you general bias towards the stock right now? A positive, negative, or neutral, let’s vote on that.

There may be a selection bias of people who have stayed at the conference. Okay 33% negative is on the higher side of what we’ve seen, so clearly you have some skeptics out there. And let’s take question three. In your opinion through cycle EPS growth for GE will be above peers, in line with peers or below peers? And to be clear that’s the multi-industry peer group, the industrial companies that are here at this conference for the last 2 days, 50 or so companies, let’s vote on this.

Okay below 70% below peers that’s substantially higher than what we’ve seen. So again there is a -- that's consistent with the level of skepticism that I’ve seen out there on the road for sure. Alright, let’s open up the questions to the audience then.

Earnings Call Part 2:

• Q&A with General Electric Company CEO