{ "docId": "019dd923-622b-71dc-a6db-548937484e86", "docSlug": "67e30c6378be", "documentTitle": "General Electric (GE)", "authorId": "06_Trian_Partners", "authorName": "Trian Partners", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2015-10-05 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 8, "pageCount": 81, "prevPage": 7, "nextPage": 9, "slideType": "propose_solution", "function": "propose_solution", "density": "dense", "nDataPoints": 6, "notes": "This is a classic activist 'value creation plan' slide.", "elementsJson": [ "headline_text", "bullet_list", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6db-548937484e86/8", "deckHref": "/decks/019dd923-622b-71dc-a6db-548937484e86", "deckJsonHref": "/decks/019dd923-622b-71dc-a6db-548937484e86.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6db-548937484e86#slide-8", "components": [ { "bbox": null, "kind": "callout", "text": "Trian recommends that management explore share repurchases beyond GE’s initial guidance; we believe there is an opportunity to return over 40% of the current market cap to shareholders by the end of 2018", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0935-737e-8db9-4fca3c1aa94f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.82 }, "kind": "disclaimer", "text": "Note: EBITDA is defined as earnings before interest, taxes, depreciation & amortization. IRR is defined as internal rate of return. The estimates, projections, pro forma information and potential impact of the opportunities identified by Trian Partners herein are based on assumptions that Trian Partners believes to be reasonable as of the date of this presentation, but there can be no assurance or guarantee that actual results or performance will not differ, and such differences may be material. Unless otherwise indicated, the figures set forth in this presentation have not been calculated using generally accepted accounting principles (GAAP) and have not been audited by independent accountants. Such figures may vary from GAAP accounting in material respects and there can be no assurance that the unrealized values reflected in this presentation will be realized. This presentation does not recommend the purchase or sale of any security.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4d76e357-f5a8-496d-9ac4-8739df285550", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.9, "x": 0.05, "y": 0.61 }, "kind": "list", "text": "3. Disciplined Capital Allocation\n- Trian recommends that management explore share repurchases beyond GE's initial guidance; we believe there is an opportunity to return over 40% of the current market cap to shareholders by the end of 2018\n- Set parameters around M&A (IRR, accretion, leverages GE “Store”)", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "27ddafdf-5173-477a-ab72-d6e7ae39fce7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.9, "x": 0.05, "y": 0.09 }, "kind": "list", "text": "1. Expand Operating Margins to at least 16.0% by 2018 and Target Further Expansion Thereafter(2)\n- Continue progress on cost reductions to grow operating margins ~50bps per year through 2018 and maintain similar cadence thereafter\n- Target margins net of corporate expense, not excluding it", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2c0976f3-73e9-4f84-9d3f-5186005a8a71", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.3, "w": 0.9, "x": 0.05, "y": 0.3 }, "kind": "list", "text": "2. Efficient Capital Structure\n- Commit to ~$20 billion of incremental net leverage (~1x EBITDA) at GE Industrial by 2018...return cash to shareholders through buybacks\n- Moderate leverage can alleviate pressure on the income statement and allow management to reinvest in the business\n- Consider alternative structures (e.g. JVs, IPOs) to continue to reduce the size of GE Capital's balance sheet over time", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "810fdb94-bb9a-4316-84a6-5f41b16f8d8b", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "operating margin: $40-$45", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-0935-737e-8db9-52dd79e17735", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.9, "x": 0.05, "y": 0.04 }, "kind": "title", "text": "Trian's Path to ~$40-$45 of Implied Value per Share by the End of 2017(1)", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "70ed28fe-7cd0-421e-9bf9-5eb8c67540e8", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Capital Allocation Framework", "slug": "capital-allocation-framework", "agent": null, "layer": "slide", "matchId": "12d899ff-7c56-4987-b569-c3cc575052ad", "evidence": "The slide discusses efficient capital structure and disciplined capital allocation.", "confidence": 0.7 } ], "frameworks": [ { "name": "capital-allocation-framework", "slug": null, "matchId": "b1e5a527-b5b4-46f0-aaec-951287e8ad49", "evidence": "The slide explicitly outlines a plan for margin expansion, leverage, and capital return (buybacks/M&A).", "confidence": 0.9 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }