Good day ladies and gentlemen, and welcome to the General Electric Fourth Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. My name is Larissa and I will be your conference coordinator today. [Operator instructions] As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today’s conference, Matt Cribbins, Vice President of Investor Communications. Please proceed.

Great, thank you. Good morning, and welcome everyone. We are pleased to host today’s fourth quarter webcast. Regarding the materials for this webcast, we issued the press release, presentation and GE Supplemental earlier this morning on our website at www.ge.com/investor. As always, elements of this presentation are forward-looking and are based on our best view of the world and our businesses as we see them today. Those elements can change as the world changes. Please interpret them in that light. For today’s webcast, we have our Chairman and CEO, Jeff Immelt; our Senior Vice President and CFO, Jeff Bornstein. Now I’d like to turn it over to our Chairman and CEO, Jeff Immelt.

Hey thanks, Matt. Good morning everybody. Look, we still see the global environment as generally positive with a lot of volatility. GE had a strong fourth quarter with some elements better than we indicated in December. Operating EPS was $0.56, up 6%, led by industrial EPS which grew by 23%. Orders grew by 3%, which was 5% organically and our backlog expanded to a new record. Industrial organic growth was up 9% and margins expanded by 50 basis points. Our initiatives continued to deliver results. Industrial CFOA was $7.2 billion, up 64% reported in the quarter or 30% ex the 2013 NBCU taxes. Capital’s quarter was consistent with our expectations. The US continued to strengthen as in Asia. Some businesses are seeing more momentum like aviation, healthcare. Our oil and gas team executed well despite volatility. Their underlying performance was revenue flat and earnings up 6%. And we believe that our diverse and integrated model worked for investors in the quarter as it will in 2015. We delivered on our key commitments for the year. Industrial segment profits grew by 10%, driven by 7% organic growth and 50 basis points of margin expansion. GE Capital reduced ENI by $17 billion in the hit to earnings plan. CFOA was in the middle of the range at $15.2 billion. Free cash flow was $11.2 billion, up 6% for the year. Our capital allocation choices were in line with expectations. On the M&A front, Alstom should be a financial and strategic driver. Appliances were well priced and done a good point of cycle, and the Synchrony spin will result in a substantial reduction in GE shares. We are executing a valuable pivot at GE, one that improves our business mix while delivering EPS growth and expanding returns. Now for orders, total orders grew…

Thanks Jeff. I will start with the fourth quarter summary. We had revenues of $42 billion, up 4% a quarter. Industrial sales of $31 billion were up 8%. And GE Capital revenues of $11.5 billion were up 4%. Operating earnings of $5.6 billion were higher by 4%. Operating earnings-per-share of $0.56 were up 6% with industrial EPS up 23% and GE Capital EPS down 17%. Continuing EPS of $0.52 includes the impact of non-operating pension. The net EPS includes the impact of discontinued operations. We had $0.01 impact in discontinued operations this quarter associated with WMC. This was driven by reserve increase of $142 million to reflect WMC’s current assessment of its loan-loss exposure based on recent settlement activity and negotiation. WMC ended the quarter with $809 million of reserves, flat with fourth quarter of ’13. As Jeff said, CFOA for the year was $15.2 billion. We had industrial CFOA of $12.2 billion and received $3 billion of dividends from GE Capital. In the quarter, industrial generated $7.2 billion of CFOA, up 64% on a reported basis and up 30%, excluding the impact of NBCU taxes from last year. The GE tax rate for the quarter was 13%, bringing the year-to-date rate to 17%. In the quarter we benefited from the passage of the extenders bill and deductions from higher restructuring and impairments. The GE Capital tax rate was 5% for the quarter and 2% for the year, consistent with the low single digits estimate that we previously communicated. On the right side, you can see the segment results. Industrial segment revenues were up 6% reported and up 9% organically, reflecting about two points of headwind from foreign exchange and one point from acquisitions and dispositions. Foreign exchange was approximately $600 million drag on industrial segment revenue and about a…

Thanks, Jeff. We remain comfortable with our framework for 2015. We expect the industrial EPS of between $1.10 and $1.20 behind solid organic growth and margin expansion. Corporate costs will be substantially lower. Remember we funded $0.11 of uncovered restructuring in 2014. In 2015 we will offset restructuring with gains. In addition, we should have the impact from six months of Alstom. Capital results are on track with Synchrony timing the main variable. Free cash flow and dispositions are on track for the $12 billion to $15 billion we spoke about in the year. And again cash return to investors depends on Synchrony timing but it would be substantial if we do the split this year. So closing the year and since the outlook meeting, the GE world remains balanced. There are always puts and takes in the global economy. For instance, the US is quite strong which has a positive impact in businesses like healthcare and aviation and the price of oil has declined even further since December. Our job is to manage the company through volatility and while we see the potential for risk to oil and gas based on current oil prices, we are aggressively working offsets through cost actions and positive opportunities elsewhere in GE. We are also seeing stronger momentum in several other businesses. In total this demonstrates the strength of our portfolio approach. Looking back in 2014, out of eight industrial businesses, three beat their plan, three met their plan and two missed their plan. But together we did what we set out to do growing core earnings by 10%. In addition, let me give you more insight to the plan I gave you in December. We have an internal plan that is above the midpoint of the range I gave you. The business results that delivered that plan are embedded in our team’s new incentive compensation for the year. In other words, our leaders achieved their IC when we hit an EPS that is above the midpoint of this range. Now I want you to have transparency on how we think about the world and manage our team. Our targets encompass a thoughtful approach to the environment in a broad range of macro dynamics. So let me reiterate. We feel comfortable with our framework. 2015 is an important year for the company and we plan to deliver for you. And now Matt, back to you and let’s take some questions.

All right. Thanks, Jeff. We will take your questions now.

[Operator Instructions] Our first question comes from Scott Davis with Barclays.

Hi, good morning, guys. Thanks for the color. This is a better presentation than we've seen in a while, so thanks for that. I know this is going to be really tough to answer, but it's going to be really important for us to try to ring-fence the oil and gas profit downside. Is there some sort of scenario analysis you could share with us or at least a sensitivity that -- hey, if we are off 35% on upstream, what kind of profit drop you'll see on that?

This is Jeff. Scott, the way we thought about it particularly when we went through it in December with you is we evaluated multiple scenarios, including a general expectation at that point that we’d be down 0 to 5% but we evaluated scenarios that we’re down beyond that, on lower oil prices. And when we talked about the range with you, of the $70, $80, in total dollar -- 20 industrially we included in that our view of what those downside scenarios are. So I think you got to step back and look at it – oil and gas is 15% of our segment earnings in industrial being down beyond 5% I think is manageable within the context of the industrial portfolio. And I think importantly Lorenzo and the team are like laser focused on driving the cost and the productivity in their business and the programs they launched were the programs needed to support a lower downside scenario than what we even talked about in December. So I think we feel reasonably comfortable -- as comfortable as you can be that within the context of what we've shared with you that we can manage it inside the portfolio, our industrial portfolio.

I think Scott, I would add to what Jeff said, just to say, I think any time in our world we have multiple hedges and we have the hedge inside the oil and gas business driven by the cost action they are taking, we have other upside of what lower oil prices mean inside the company. And there is businesses inside the company that are doing better as we close the year. And so I really -- I think we've envisioned different scenarios for oil and gas and we still feel quite comfortable on the way – the way we described the company in December.

Because there wasn't anything additional, I don't think, that was said on the call on Alstom, and there was a bit of a price adjustment we saw in the quarter; I think it was something like $700 million or something. Can you give us a sense -- and I know you are probably five months away from close here. But can you give us at least some sense of your confidence in the asset? And given the new world, that the offsets -- I mean, we've got a better euro environment for Alstom; but on the other hand you've got some North Sea oil headwind. So can you give just a better sense of your confidence of the puts and takes of that transaction, and maybe a little color around the $700 million adjustment?

Yes, why don’t I start with the adjustment and then Jeff can give you some color on the company. So effectively what we -- there were several points within the contract that we are open to negotiate post the signing. We made a couple of adjustments, it's about €250 more that we will pay at closing. Part of that was a payment we’re making at our request. We wanted to strike the legal entities -- we want to restructure it and buy into, we wanted to change a bit for our benefit long-term in terms of taxes and otherwise. And so part of that €250 million was a payment to ask them to close differently from a legal entity perspective than what was originally contemplated. The second was we originally agreed to about a five year use of the Alstom brand, we extended that in this agreement to 25 years, that was about $85 million associated with that, and there were other very small items. I think you will hear Alstom talk about €400 million, they are counting about a $100 million of interest that they contemplated owing us on cash that they used over the course of the year. We never modeled that, we never counted that. So we see it is about a $250 million euro adjustment to the purchase price but we get a lot of long-term value as a result of that legal entity restructure.

So I would say Scott, there are always puts and takes, their grid business is reasonably strong, I’d say the renewables business is consistent with -- and also reasonably strong, I'd say the power business is in a flat market kind of the same market we see. Clearly the euro devaluation helps the purchase price and other than that the puts and takes are pretty consistent with how we kind of underwrote the business going in. So their year-end is in March and we don't expect -- we don't really have a change in closing date. We still expect -- we still for the purpose of the plan, plan on July first for everything more or less.

Thank you. The next question comes from Nigel Coe from Morgan Stanley.

So, Jeff, you talked about a pretty limited impact from the dollar on your plan. But I'm just wondering maybe if you could just address how the strong dollar and the weak oil price could impact the broader emerging market demand for infrastructure. I wonder are you seeing any backlog or project deferrals as a result of that?

So I will start. There is multiple dimensions of those obviously. My comment was at about 1.50 and 1.60, we’ve opened up softer than that this morning. It’s about a penny a share. I mean we do hedges – we are not a 100% hedged, we hedge all our transactional exposure to the extent we can, we do -- we are subject to some translation and we do very short-term hedging around earnings in a quarter. So there will be some volatility associated with currency but I think my point was that in the context of the company we're not at a point yet where we think it's something that's not manageable across our portfolio. We do have natural hedging, we have the ability in some of our businesses to move our manufacturing base globally which allows us to take advantage of changes in currency and in a couple of our businesses where that matters we are actively looking at our build plan for the year to make sure we take as much advantage of that as possible. I would in the short run here we've seen very little that I am aware of, very little impact on our order performance as a result of currency. That may play out more in 2015 but through fourth quarter of this year we've seen very little of that.

And I would say on – you had a multi – both currency and oil price, I think if you took a tour around the world, look, our biggest market is still the US. The US had orders of 25% in the third quarter and 18% in the fourth quarter. So I would always start by reminding people that actually the US is the best we've seen since the financial crisis and then what we call rising Asia, Nigel, which is really China, India, ASEAN, stuff like that, those are actually quite positive for us right now from a order standpoint. And then the resource rich countries I think are going to be mixed, depending on what your cost position is and things like that. So we still I would say on an underlying basis see pretty good underlying demand in the Middle East but clearly places that are marginal producers like Iraq or Venezuela things like that. Those are going to be places that we’re not counting on much business in 2015. So it’s kind of a mixed bag. And in Europe – Europe for us is flattish, I’d say if you look at the organic and if the stimulus increases European demand, that’s a good thing for us.

And then just switching to the mix in 2015, and obviously tremendous margin expansion on services in 4Q, how does the 150 bps look between service and OE in ‘15? And how does the mix shake out on the 2% to 5% between OE and service?

I think if you look at in the 2014 I would say product margins were flattish and service margins were up. And look, we described to you guys -- we described to our investors in December kind of an extremely intense focus on gross margins and product costs. And so our expectation is that delivers in 2015, so we’re looking to get some OE margin enhancement in ’15 along with the continued service enhancement, and then Jeff, do you know on the revenue mix?

Well I will just say on the revenue mix, equipment service would be a little less impactful next year than it was in ’14. That's our plan. I think the gross margin focus that we have going, which is particularly centered on product service cost is driving at the OE market –

Thank you. The next question comes from Deane Dray with RBC Capital Markets.

Hey, a couple questions. First for you, Jeff Immelt, a macro strategic question regarding balancing your framework priorities. And then I've got one for Jeff Bornstein about truing up on tax and restructuring benefits. So, to start on the macro question, you're pretty clear you're in a volatile environment. But I'd love to get an update on how you are balancing the framework priorities. You've got longer-term big mix changes and could be near-term disruptive to the organization; and then meanwhile you're on an EPS framework with a cadence of earnings, quarterly earnings. And I've always called it a bit like trying to change a car tire going down the highway at 55 miles an hour. So how are you balancing these big mix changes versus earnings expectations for 2015?

The best way I can describe it, Deane, is since I would say -- since 2013 inside the company or even longer we've been kind of talking about it executing around this kind of mix shift that we’ve described to investors. I think Jeff earlier in the presentation talked about the investments we've made in restructuring in 2014 to kind of set us up for 2015 and beyond which again everybody in the leadership team is on. So the way I’d look at this, Deane, is on the industrial side I think the teams – their world is in front of them, their incentives are in, they know exactly what they need to do. We’ve got Alstom coming in, appliances going out and that is that team is laserlike focused between Dave Joyce and Lorenzo and Steve Bolze and those guys know exactly what they need to do in this environment. At GE Capital, look, we’re just going to make it smaller if we can as time goes on. We’re going to execute on Synchrony and that’s what the Capital team is doing. And so I think you got to look at it in terms of every team knows exactly what they're pieced of how we need to execute here. There is no – absolutely no confusion on industrial side and financial services we’re just going to look for opportunities to continue to make it smaller. We talked about 75:25 as a goal but we’ve really run the place, with that as an output function and an input function. We run the place to execute well on our businesses and we think 75:25 is the output.

And then for Jeff Bornstein, maybe you can true us up on the tax outlook for 2015 and restructuring benefits that should carry in, and anything unique about the first-quarter tax?

Sure. So industrial tax, we think is going to be the core rate, it will be what it has been which is high teens. We will do the appliance transaction, that will be a high tax transaction which will bump the rate up to low 20s for next year. And I think that's consistent with what we’ve communicated. The plan will probably be higher in the early part of the year, lower in the latter part of the year on industrial tax. On restructuring, same discussion, that we’re going to do restructuring next year. It is critical to delivering on everything we’ve talked about. We've assumed the gains, the appliances of signalling transaction happen midyear, we will do restructuring in the first half of the year before those gains manifest themselves. But we still believe that for the total year our restructuring and gains, and to some degree the impact of mortality are all going to offset, we’re not going to be doing today anyway naked restructuring.

What's the carryforward of restructuring benefits in 2015 from actions in 2014?

What we’ve got to now make up in our cost roll is about $500 million. We will get an incremental benefit for new restructuring we do in ’15, as you know we’ll get partially depending on where we execute those projects. But the carry through from, I would say both ’13 and ‘14 is about $500 million for 2015.

Thank you. The next question comes from Steven Winoker with Bernstein.

Hey, could you just give us a better sense of the detail around the gains that happened within GE Capital in the quarter? Just the major gains including -- as well as the real estate side, but across the whole business. And did the Norges thing come through all that?

So I will start with Norges. So we did close Norges. The impact in the quarter was just over $300 million. The headline impact in the segment reporting in retail was a full 600 million, and that’s partly because we did the tax accounting earlier in the year that recognized the tax benefits for about half the gain. We reversed that in the fourth quarter and the full effect of the disposition took place in the fourth quarter in the retail segment. So within the fourth quarter about $300 million, $600 million for the year. In addition, I talked about we sold the nonperforming loan portfolio in our UK home lending business about a half billion dollars at a very small gain associated with that about $20 million but a big deal for our UK portfolio. I talked about $2.1 billion of real estate sales in the quarter that led by Japan multifamily that we sold, that specifically was about 229 million, and the total real estate gains for quarter were closer to $330 million. And that made the bulk of where GE Capital gains were in the quarter.

And then just maybe pausing on the order price profile for the quarter and the trend line in some of these. I know we've talked about oil and gas a little bit; it was down 20 basis points and power and water down 70. Are you seeing pressure in the existing backlog at all in terms of any kind of renegotiation activity happening? And also, currency, are you also feeling any pressure? We talked about currency a little bit, but are you feeling any pressure to use pricing to make up for any of the segments, whether it's power, healthcare, or lighting, where you might have broader international competition, any of that coming through? And then healthcare I guess as part of that same thing, which is -- I know this is the business model, to be down every quarter and take costs down by more. But that can't be a good thing for too long. So maybe some thoughts on that too.

Steve, here is what I would say. I would say most of the pricing impact that we see in the fourth quarter is more mix driven than anything else. For instance, in power you’ve got -- most of the heavy duty gas turbine action is in the edge, that really is not in the base yet but those are higher price bigger units, little more competitive scenarios but not a lot to talk about. Oil and gas, we really haven't seen it yet, nor have we seen – there are some initial letters and stuff like that on pricing but no real action. I think that's all -- again I don't think we’ve seen it in the fourth quarter. We haven't seen it yet but this is early days. So I think there is going to be – there’s still going to be chatter out there. So I don't really take all the stuff that's happened necessarily in the fourth quarter as what's going to happen throughout the rest of ’15. I just think we have to be ready on all fronts and I would say no conversation all around currency and anything along that yet. We will see how that plays out. In terms of healthcare, look, I think you’re right. This has been the historical business model but I also think kind of what we are doing with, Steve, with Jeff and Jamie, Dan Heintzelman is we’re ripping apart the critical axis is gross margins across each one of these businesses. And I think in healthcare managing the pricing is going to be a key part of how we get enhanced gross margin improvement in that specific business.

Thank you. The next question comes from Steve Tusa from JPMorgan.

Just to make one thing clear, what were the impairments in the fourth quarter? Total gains of $650 million in GE Capital, what were the impairments?

Hold on one sec, I will get it for you. What’s your next question, Steve and I will run that down?

My next question would be another detail question. Lufkin specifically in artificial lift, we've seen some varying reports on inventory destocking. I think PCP yesterday talked about their oil and gas business, implied down like 50% to 60% in some of their -- on a quarterly run rate basis, showed some destocking. Did you guys see destocking in your artificial lift business, the Lufkin business?

Not yet, Steve. Look, when you look at like revenues in the quarter were up mid single digits in Lufkin. Orders were kind of down mid-single digits. So not enough to read into. Again a lot of this I think is – and oil and gas is yet to play out. But I would say the fourth quarter was pretty much inside of our expectations for Lufkin.

And then just one last question just on cash. Jeff, just philosophically around the dividend, you guys are bumping up against an 80%-ish type of payout ratio on the free cash when it comes to the dividend. I mean, there is a pretty significant -- it's a big dividend relative to your free cash flow. Is that dividend viewed -- I mean, is there a fine line here given obviously the location of cash makes it a little bit complicated as far as moving things around and being able to pay that? Would you -- is there a fine line as a percentage of free cash flow that you don't mind going over industrial free cash flow and paying the dividend? I mean is it -- and as far as growth, do you view the dividend, it's a must-grow over time? I'm just trying to get my hands around how much you defend that dividend.

Look, Steve, you’ve got $16 billion of cash on the balance sheet right now. We’re going to do Alstom this year. You are still sitting on top of a substantial excess cash in GE Capital. Look, I view the dividend as being key. We have choice -- we have capital allocation choices we make. We’re going to continue to grow our free cash flow as time goes on and we’re comfortable with where we are right now.

I’d say listen, we’ve been running at slightly about a 50% payout ratio. I think long-term we expect to be slightly less or to about 50% payout ratio. So as we work through the pivot, through 2016 we’ve made a conscious decision that we are going to run a little harder to our target payout ratio but the dividend as Jeff said is certainly a priority for us and very important to our retail base.

And I would add, Steve, just one – just something that I just want to make sure people don't forget and that is, look, the Synchrony transaction is effectively going to be at $20 billion buyback that whenever we execute that, so that's a big – another big capital allocation choice, it's just going to be executed in a different way but that’s quite meaningful to our investors as well.

Sure, and the impairments?

Yes, impairment. So as you would expect impairments year-over-year were down substantially about $550 million. You recall in the fourth quarter of last year within CLL, we took the moment of charge and we took a little – we took the second charge on business aircraft and then the big item in the fourth quarter of last year was the GECAS aircraft impairment. So year-over-year impairments were better by $550 million pretax. But in the quarter we really didn't have a lot of big impairments, we had one big impairment on a real estate property domestically for just under $100 million pretax and that was really about it of consequence.

The next question comes from Jeff Sprague from Vertical Research Partners.

Hey, just a couple quick ones. I know we are running tight on time. Could you just reconcile the comment on Lufkin orders down mid single digit versus drilling orders down 72%? I know, obviously, there is a little bit more but that's a little bit of difference there. But that sounds like a fairly sizable disconnect.

Yes, look, I am just looking at fourth quarter orders, Jeff.

Yes, so we report Lufkin separately from drilling and surface. Drilling and surface orders were up 4% in the quarter. So identical to what you would expect in this environment and Lufkin was down 6% in the quarter. So I would say generally if you look at the – as I went through the script, if you look at the orders for oil and gas in the quarter, they are not necessarily what you would expect in this environment. The things you would be -- think would be stronger, including downstream and the surface related stuff, turbo machinery, were good to slightly down and the things you think would be most impact, the upstream stuff was a little stronger in the quarter year over year. So I think we’re way too early – you are not yet seeing an impact on behavior with our customer in the current order rate. That’s to come in 2015.

You did say drilling down 72%, is that right?

No.

Drilling was down, surface was up. So drilling POPs were down substantially but surface was up. We report it as drilling and surface.

And I know the H price is not in the index, but can you give some color on how that's pricing versus expectation?

Well, it’s not in the index, I would say without giving away any real competitive information I would say sequentially pricing is improving, order to order.

And then just one really quick one on FX. Is the $0.01 headwind or so that you are talking about for 2015 now incremental to what you were thinking previously? And the reason I ask is you had $0.02 in Q –

Yes, Jeff. So what I was trying to say was when we did the framework in December, if you look at that versus I did that math, 115 and 116, the move from December to 115 to 116 for us meant that we were working with a penny headwind that we would figure out.

But again I would come back to, there is other mitigants to a lot of those stuff.

I am not changing guidance in any way. I am not changing –

We’re trying to give you guys the pieces because I think that’s – we want you to know how we think about it but there's a lot of other things inside the company that we use – just like we did in Q4.

The next question comes from Andrew Obin of Bank of America

Hey, just a question, two questions. The first, part of the reason for creating oil and gas was actually to deliver to national oil companies in an environment like this. Could you share some of the conversations that you are having with these customers? And how are you guys positioning versus the competition? And are you seeing that your structure is actually making a difference? From the outside, how do we know that it does make a difference?

Well, look, I would say again there is not one-size-fits-all but I think clearly the national oil companies look differently at this cycle than some of the integrated oil companies do. So I would just say in the case of a company like Saudi Aramco they are going to continue to produce and there is a number of strategies that are associated with that, similarly to a company like Petronas and things like that. And then there's other places that are in more stress. So look, I would just echo back, Andrew, to some comment I made in December, we like the oil and gas business, we like how we are positioned in it and we think these cycles give us an opportunity to pick up market position similar to what we did in the aviation business and the power business and other businesses. But sort of going through private conversations with customers, I can just say that we still think with a lot of the NOCs, or a certain segment of the NOCs there’s still potentially going to be some good business to be done in 2015.

And just to follow up, what's the latest strategic thinking on energy management and the progress that they are making?

Look, I think we're in a pretty good – we’re in a pretty good strategic position. This is a business where Alstom adds some competitive capability and scale and our pathway has to be one that gets us to margins that are more competitive with the ABBs and the other players in this industry and that's -- and we can accept nothing less. So I think the way I look at it right now, Andrew, to win, we expect margin accretion and earnings growth year after year in this business and here's one where the ceiling is very high in terms of what we should be able to do in this business.

Thank you. Next question is from Shannon O'Callaghan with UBS.

Hey, maybe first for Jeff Bornstein. When you think about driving this thing from down 80 bps gross margin this year to up 50, how do you see that phasing through 2015 numerically? And also where are you and Dan and Jamie at in terms of what you're doing to drive that?

So right now, Shannon, we're doing very deep dives with each business and basically I hate to get too tactical but basically we’re starting with the outcome and building back the project decks from there. So on every element of product and service costs, direct material, inflation deflation direct material usage, warranties, scrap, operating cost per hour of our different facilities, every labor etc. building the project decks that support delivering at each of the segment levels, their share of gross margin improvement at the segment level. And that's where we are today. Jamie in parallel with that is continuing to drive and support the businesses with the ERP which is a big part of giving them visibility and driving our ability to consolidate etc. So we're in the process right now of building very detailed action oriented plans that have every dollar of cost between sales and the gross margin line owned by somebody with a plan. So that's where we are today. I would say this is going to accelerate throughout the year. We’re early in the process now but I am quite confident if we get out of the way we have programmatically around SG&A I think we can make a big difference here and I think there's a lot of opportunity, as Jeff said earlier particularly around original equipment margins.

And then in terms of just the US healthcare strength, can you give us a little more color there? What are you hearing from customers and where do you really think that market is and decision-making is at this point?

So Shannon, the only two data points I can give you is just kind of what we saw which was pretty good -- we don't have the market data yet, so we don't know share and things like that. But we have good products and good activity and we got to believe that we gained a little bit of share. And I would say the other data point I can give you is conversational which is – as I see hospital CEOs when I travel the circuit, you just get a lot more positive in terms of their ability to know what the next few years are going to be like to do their planning, to do their growth plans and things like that and that didn’t exist let’s say 24 months ago. So we’re guardedly optimistic but it's too early to call it a trend I would say.

Thank you. Our final question comes from Julian Mitchell with Credit Suisse.

Hi, thanks. Just on the healthcare business, you talked about how the Q4 performance was something of a blip. But I guess the profit drivers down, price and FX probably persist through the whole of this year. So maybe talk a little bit about why you're so confident that healthcare earnings are going to rebound.

Again I would say, Julian, on the comment you made this is – as Jeff went through in his presentation that there is always going to be concerned about FX and stuff like that in this business. Nonetheless the US is just a big powerful driver of healthcare profitability mix, things like that. And so when I look at 2015 that in addition to momentum we’ve got in life sciences and stuff like that, I think that offsets all the other let’s say headwinds we might see in terms of FX and otherwise.

Julian, I’d just add, I didn’t, if you took it that way, I apologize. I didn’t mean describe the healthcare performance as a blip. But what I meant to say was organically the performance was better than headline, when you think about the impacts of FX. So and I completely agree with Jeff, I mean when you – the developed markets feel like they are getting stronger for healthcare we’re going to have challenges and some – Russia or some of the emerging markets. But the bulk of our percentage wise -- the US is still the biggest single market we have in healthcare and we feel much better about the strength there than we have in the past.

And then just the gross margin up by 50 bps. What are you including for price or for value gap in there? Because I guess value gap was a decent tailwind in 2014. Do you think it's flattish this year?

I think in our working construct for the year, we expect value gap to be roughly what it was this year. So we ended this year at about $300 million net value gap and $300 million value gap. And our expectation is that that will likely be what 2015 look like. End of Q&A

There are no further questions at this time. Mr. Cribbins, do you have any additional remarks?

Yes, thank you. Before wrapping up, just a couple of quick announcements. The replay of today's webcast will be available this afternoon on our website. We will be distributing our quarterly supplement for GE Capital later today. On Friday, April 17 we will hold our first quarter 2015 earnings webcast.

Great. Matt, I just want to reiterate as we close. The framework we’ve got for ‘15 really has a ton of strength and thoughtfulness in it in terms of the scenarios that we’re seeing globally. So I would just echo that and just reiterate we talked about the new compensation plan that the leaders have inside the company, that really has each and every business aligned to deliver right in a very effective way for our investors as we go forward, Matt. So I would just make those two points in closing.

Thank you. And as always we will be available later today for questions.