Good day, ladies and gentlemen, and welcome to the General Electric first quarter 2016 earnings conference call. At this time, all participants are in a listen-only mode. My name is Ellen, and I will be your conference coordinator today. 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.

Good morning and thanks for joining our first quarter 2016 webcast. I'm here with our Chairman and CEO, Jeff Immelt; our CFO, Jeff Bornstein; and our Vice President, Gas Power Systems, Joe Mestrangelo. Earlier today, we posted a press release, presentation and supplemental on our Investor website at www.ge.com/investor. As a reminder, 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. As described in our SEC filings and on our website, those elements can change as the world changes. Now with that, I'd like to turn it over to Jeff Immelt. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Thanks, Matt. GE had a good performance in a slow growth environment. EPS of $0.21 was up 5%. This includes $0.02 of headwind due through foreign exchange. Let me summarize some of the key achievements in the quarter. Industrial organic revenue was down slightly; and operating profit was about flat, despite a very challenging environment in Oil & Gas and tough comparisons in gas turbine shipments. This is in line with our expectations. Industrial margins grew by 30 basis points, up 110 basis points ex FX. And CFOA was $7.9 billion, a good start in the year. We're on track to close Appliances in the second quarter, and this will facilitate incremental restructuring and capital allocation optionality. We continue to execute our GE Capital strategy. We have $166 billion of capital deals signed. GE Capital sent a $7.5 billion dividend to the parent in the quarter. And GE Capital filed for SIFI de-designation in March. Alstom integration is on track for our $0.05 goal of 2016. We're more comfortable with the business and our ability to create value. We returned $8.3 billion to investors in…

Thanks, Jeff. And I'll ask the operator to open the lines up for questions.

Our first question is from Scott Davis with Barclays.

Hi. Good morning, guys. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey, Scott.

I know this might be tough to answer, and this if for Jeff Bornstein, but give us a sense at least of what is the feedback in the process on the SIFI de-designation? I mean do you just apply and then wait for a ruling or is there some sort of conversation through the process where you can get a sense of where you stand? Jeffrey S. Bornstein - Chief Financial Officer & Senior Vice President: Yes, Scott. So we're the first through the process, okay. So I wouldn't say there's a ton of definition around how the process should work, per se. We are in discussions with the FSOC. They've got our paper. We will walk them through the tenets of our paper. We're in the process of doing that over the next couple of weeks. And then we expect to get a response from the FSOC around the request, and we hope that happens sooner rather than later. Jeffrey R. Immelt - Chairman & Chief Executive Officer: I would only add to that, Scott, two things. One is, if you look at the reason for the designation. Our proposal aligns with that in terms of why we don't think we're systemic today; and the other one is just miming what's been said in public. I think people want to see the process work. In other words, I think they want to see that people can come out of SIFI designation just like they can come in, and that's really parroting what people on the FSOC have said.

The next question is from Julian Mitchell with Credit Suisse. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Hi. Good morning. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey, Julian. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Hey. Just a question on the segment's sort of margin bridge that you laid out. If you look last year as a whole, you take the cost productivity and gross margin, plus the SG&A simplification, that was about a 60 bps tailwind to margins all-in. This quarter it was a negative of 20 bps. So I wondered if there was just some timing on specific productivity measures or if there's something sort of largely going on that explains why the productivity contribution was so muted in Q1? Jeffrey S. Bornstein - Chief Financial Officer & Senior Vice President: I think the page that Jeff walked through which showed cost productivity and gross margins as a 40 basis point drag, I think what you've got to – I talked about the effect of remeasurement and marks in foreign exchange when I went through results. A lot of that finds itself in gross margins. If you adjust for that, cost productivity was actually up 40 basis points; and that's how you get the 80 basis points of gross margins, excluding the effects of that foreign exchange. And I didn't say it earlier, but when we look at how those marks and remeasurements peel off over the year against the contracts that they're hedging, about two-thirds of that, of those contracts, settle up in the form of cash in the year. So we would expect two-thirds of what we took as a charge here in the first quarter to come back within the year. So that's why the cost productivity line was a negative 40 basis points. Without foreign exchange, it would have been a plus 40 basis points.

The next question is from Andrew Kaplowitz with Citigroup.

Good morning, guys. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey, Andrew.

So service was up 4% year-over-year, which is a modest improvement from last quarter's 3%. It looks like your momentum in Power Services and Aviation's increasing. Is there any way to parse out how much of the relatively strong growth is coming from your digital initiative? Jeff, you said in the past that you're expecting to get an additional couple points from digital on service over time. Can you talk about the sustainability of the services momentum, especially as you just rolled out Predix? Jeffrey R. Immelt - Chairman & Chief Executive Officer: Again, I still expect, in backlog, that you're going to start seeing this flow through. AGPs will be up year-over-year. And we had some good wins in both the Rail business and the Transportation business for the year. I think when you look at orders growing by 29%, we think some of that is going to start echoing through into the run rate of the service business in the second half of this year, into 2017 and 2018. So I still fully expect, along with the service leaders in the business, to have organic services growth at 5% or greater as we look at 2016 and beyond.

The next question is from Joe Ritchie with Goldman Sachs. Joseph Alfred Ritchie - Goldman Sachs & Co.: Thanks. Good morning, guys. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey, Joe. Joseph Alfred Ritchie - Goldman Sachs & Co.: So maybe my one question on Oil & Gas. Clearly, the environment is not great. I felt Lorenzo [Simonelli] did a great job last year of maintaining margins in a very difficult environment, but you seemed to step down in decrementals in the first quarter. I guess maybe can you parse some of that out? How much of it is FX oriented? How much is it the pieces of your business like turbo and the offshore business not doing well enough? Can you parse out what really is driving the decrementals? Jeffrey S. Bornstein - Chief Financial Officer & Senior Vice President: So a couple thoughts here. Let's start with the results in the quarter. They reported $308 million of operating margin in the quarter. That included roughly about $90 million of negative FX. And again, as I said earlier, a big part of that FX we do expect to come back during the year. When you think about the step-down 30%, we're seeing it tougher across all our segments, but it tends to be very concentrated in our Surface business in North America. We got a big step-down there versus our original expectation, and a bit in our Subsea business. The rest of the business, whether it's turbo machinery, downstream, or the old M&C business, we call digital today, those businesses are not that far off the framework we've built when we guided you to 10% to 15%. It's really around Subsea and Surface.

The next question is from Steven Winoker with Bernstein. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Thanks and good morning all. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Hey. Since we have a special guest today as well, it would be helpful to get a better sense on the Alstom backlog. When we also look to the additional risk in the 10-K on engineering and construction risk and all of that, to what extent is that backlog now something – you've gone over every single project in excruciating detail, have very high levels of conviction on the risk front. How should we think about that playing out going forward? Jeffrey S. Bornstein - Chief Financial Officer & Senior Vice President: Steve, I'll start and then Joe can weigh in on the piece of the backlog that he knows. So we have been going through those contracts in extraordinarily amount of detail. We're deeply through it. We're not completely done. I told the team we want to be completely wrapped here in the second quarter so we can lock down purchase accounting. As you would expect, there are some challenges in those contracts around the timing of cash flows and how we forecast revenue to go, how we forecast costs to go, and you've seen some of that in the purchase accounting. But I would say generally speaking, we are very close to done. And I think in the Power business that Joe can talk to, I think we're in very good shape and we have a deep and good understanding of where we are. Joe? Joseph Alfred Ritchie - Goldman Sachs & Co.: Thanks, Jeff. The only thing I would add more on the…

The next question is from Deane Dray with RBC Capital Markets.

Thank you, good morning. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey, Deane.

I do want to follow up on the Oil & Gas question because there's certainly been some speculation regarding your potential interest in adding more Oil & Gas assets at this point. And then a quick one for Jeff Bornstein to update on the cadence of buybacks at $18 billion, how does that sequence out for the balance of the year? Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey, Deane. I'll take the first part of that one. Look, we like for the long-term the Oil & Gas segment. We're going to look at adding to it if it makes sense. We think there's a bunch of different segments in the Oil & Gas business that are attractive as we look at it today, but it's got to make sense in the context of the world we see today and not the rosiest of projections as it pertains to the future. So we're going to be a disciplined buyer when we look at the assets in the Oil & Gas segment. Jeff, how about the second part of the question? Jeffrey S. Bornstein - Chief Financial Officer & Senior Vice President: So the way we planned it out, as you saw in the cash flow walk that Jeff took you through, we bought $6.1 billion worth of stock back through the first quarter. Our plan is to buy back roughly 50% in the first half, 50% in the second half, and that's how we're still planning for the dividends to flow from GE Capital, no change versus what we suggested we would do.

The next question is from Jeffrey Sprague with Vertical Research Partners.

Thank you. Good morning, everyone. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey, Jeff.

Hey. I just wanted to make sure I have my arms around the all-in Industrial OP. I assume the $19 billion-plus for the year is still a decent number given that the overall framework hasn't changed? So I guess if you could, address that. But given all the moving parts, anything we should be aware of here in Q2? I'm just making sure we've got this dialed correctly, the H launch, LEAP is coming up. I know you don't want to get into precise Q2 guidance, but a little bit of help there would be good, I think. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Again, I think, Jeff, I would consider the remixing in the Industrial segments to more or less washout as you go through the puts and takes. on 2Q, Jeff, I don't know, do you want to speak to anything in particular? Jeffrey S. Bornstein - Chief Financial Officer & Senior Vice President: We have a few things. We expect to close Appliances in June, so you'll see the gain associated with Appliances, let's say, roughly $0.20 a share. We expect to do about $0.11 of restructuring in the second quarter as we stand here today. And I think the margin rate in the second quarter, based on LEAP, both launch and initial shipments and H, will get better sequentially every quarter on H cost. I think the margin rate will be a little bit of a challenge in the second quarter, no change on how we think about it for the year. We talked about 50 basis points of improvement in the core business or the ex-Alstom business, I should say, no change in view on that. But the second quarter could be a little bit challenged with what we've got going on with the LEAP, the H and the wind launch on 2.X and 3.X.

The next question is from Andrew Obin with Bank of America.

Good morning. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey, Andrew.

Hey. As we think about your organic guidance for the year of 2% to 4%, what would it take to get to 2% versus 4%? And is 4% achievable in this environment? Thank you. Jeffrey R. Immelt - Chairman & Chief Executive Officer: I think the hypotheticals are always stuff to stay away from. I think the reason why we had Joe here today is in many ways this is the answer to your question. I mean, I think you got the right product at the right time, well executed, tough comps in the first half, strong comps in the second. And I think if we run the play in gas turbines, it's going to lead us to an organic revenue for the company that's 5%, let's say, in the second half and a range that's 2% to 4% for the year. So I think that was the reason really why we had – Andrew, why we had Joe here today is that this really is the plus and the minus, if you will, on the year; and I feel good about how we're executing in the Power business.

The next question is from Shannon O'Callaghan with UBS.

Good morning. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey, Shannon.

Hey. Can we maybe try to quantify a little bit more what the total margin impact is this year from these development programs, I mean from the – or the launch programs, call them I guess the H, the 2.X, 3.X and the LEAP. What's the total kind of margin impact in 2016 and how should we think about that in 2017? At least some kind of ballpark idea of that? Jeffrey S. Bornstein - Chief Financial Officer & Senior Vice President: I don't think we've gone through that. Here's what we've said, Shannon, is notwithstanding the challenge that those present to us from a margin perspective, where despite that through all the investment we've made around restructuring, SG&A costs, the focus on supply chain that we're going to overcome those costs and grow margins roughly 50 basis points in the year ex-Alstom. As we move through to 2017, we expect to be in a very different place on H costs. We think H will be really accretive in 2017 versus 2016. We expect to get deeper down the curve on the LEAP engine, as volume ramps in 2017 versus 2016. And we expect to be in a better spot certainly around wind, both the 2.X – 2.X is the most important product in 2017 versus 2016. So we haven't detailed out by product exactly what that is. But everything else we're doing around trying to change the cost footprint of this company and around product and service costs within gross margins and running a better supply chain is going to provide us enough headwind to grow margins notwithstanding those incremental costs on those products. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Shannon, we have a product cost counsel that's led by Jeff and Vic Abate and Philippe Cochet. We're tracking all our products as they go through the system. There's a lot because, for instance, as LEAP comes in, GEnx keeps going down the learning curve. So we have a flow of products that are going on inside the company, and I think we just have the line of sight to how, in totality, we're going to generate improvement year-over-year.

The next question is from Nigel Coe with Morgan Stanley. Nigel Coe - Morgan Stanley & Co. LLC: Thanks. Good morning. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hi, Nigel. Nigel Coe - Morgan Stanley & Co. LLC: So my initial question was whether the mix of the guidance for the full year is unchanged. And it sounds like that's not the case, it sounds like it's very much in line despite the Oil & Gas down. Maybe, if you could, just confirm that. But I did want to ask Joe a question on the H as well. Clearly, similar efficiency for the H compared to Siemens and (59:03) is one to two points better, which is huge. How do you maintain that advantage going forward? What is the development path for the H from here and how do you think about the price, the market share dynamic here? Are you planning to monetize this at price, or at this point do you want to drive market share? Joseph R. Mastrangelo - President & CEO, Gas Power Systems, GE Power, General Electric Co.: So, Nigel, where I'd start off is that in two years we've gone from single-digit to 40% share of the space. So the technology we have today plays well in the marketplace because the customers get the incremental valuable from the output and the efficiency side. As I talked about on my last page, the key for us and everything that we're doing around digital, industrial, fast works, we now can develop technology on these gas turbines on a continuous basis. Where this was discrete in the past and you would do a move every five years or 10 years, we're doing this continuously. We've already done four models on the gas turbine today and…

And our final question comes from Robert McCarthy with Stifel. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Good morning, everyone. Thanks for fitting me in. Jeffrey R. Immelt - Chairman & Chief Executive Officer: Hey, Rob. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Hey. It looks like overnight you did about $100 million deal for Daintree Networks in Australia and basically in the network lighting space. And part of the rationale, at least from Daintree's standpoint, they're very excited about the Predix opportunity for lighting controls. Maybe you could talk a little bit about is this the change in the margin in terms of how you're thinking about investing in that business? Jeffrey R. Immelt - Chairman & Chief Executive Officer: I think the way I would look at this, Rob, is this was a system deal that allows us in kind of the LED space to do a better job with controls. So I would view this as kind of a one-off from the standpoint of this was just a very unique technology that had a very good fit with doing these systems. Now kind of what Jeff said in the past, so what Beth and the rest of the team has said, we're going to get this year some very big LED orders from commercial real estate people and things like that. So we're going to be at a run rate that's substantially over $1 billion. But the Daintree control fit has really allowed us to build a system, and this was a classic make-versus-buy call that just allows us to accelerate... Jeffrey S. Bornstein - Chief Financial Officer & Senior Vice President: It was absolutely a critical component to making these things work, no question.

Okay. A couple of quick announcements. The replay of our webcast will be available this afternoon on our Investor website. Our 2016 Shareowners Meeting will be next Wednesday in Jacksonville, Florida. Jeff, you're going to present at the EPG Conference on May 18. And we're also going to hold the GE Digital Investor Day on June 23 out in San Ramon, California. Thanks for joining today's webcast.

This concludes your conference call. Thank you for your participation today. You may now disconnect.