Edgar Filing: GENERAL ELECTRIC CO

frm10q.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file number 001-00035

GENERAL ELECTRIC COMPANY

(Exact name of registrant as specified in its charter)

New York		14-0689340
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3135 Easton Turnpike, Fairfield, CT		06828-0001
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number, including area code) (203) 373-2211 _______________________________________________ (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

There were 10,676,518,000 shares of common stock with a par value of $0.06 per share outstanding at March 26, 2010.

(1)

General Electric Company

				Page
Part I - Financial Information

Item 1. Financial Statements
Condensed Statement of Earnings				3
Condensed Statement of Financial Position				4
Condensed Statement of Cash Flows				5
Summary of Operating Segments				6
Notes to Condensed, Consolidated Financial Statements (Unaudited)				7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations				37
Item 3. Quantitative and Qualitative Disclosures About Market Risk				55
Item 4. Controls and Procedures				55

Part II - Other Information

Item 1. Legal Proceedings				55
Item 2. Purchases of Equity Securities by the Issuer and Affiliated Purchasers				56
Item 6. Exhibits				57
Signatures				58

Forward-Looking Statements

This document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: the severity and duration of current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; the impact of U.S. and foreign government programs to restore liquidity and stimulate national and global economies; the impact of conditions in the financial and credit markets on the availability and cost of General Electric Capital Corporation’s (GECC) funding and on our ability to reduce GECC’s asset levels as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the soundness of other financial institutions with which GECC does business; the adequacy of our cash flow and earnings and other conditions which may affect our ability to maintain our quarterly dividend at the current level; the level of demand and financial performance of the major industries we serve, including, without limitation, air and rail transportation, energy generation, network television, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of proposed financial services regulation; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

(2)

Part I. Financial Information

Item 1. Financial Statements.

General Electric Company and consolidated affiliates

Condensed Statement of Earnings

	Three months ended March 31 (Unaudited)
	Consolidated				GE(a)				Financial Services (GECS)
(In millions, except share amounts)	2010		2009		2010		2009		2010		2009

Revenues
Sales of goods	$	13,765	$	14,072	$	13,489	$	13,813	$	281	$	273
Sales of services		9,908		10,055		10,020		10,209		–		–
Other income		350		428		376		479		–		–
GECS earnings from continuing operations		–		–		539		979		–		–
GECS revenues from services		12,582		13,883		–		–		12,890		14,184
Total revenues		36,605		38,438		24,424		25,480		13,171		14,457

Costs and expenses
Cost of goods sold		10,572		11,433		10,311		11,222		265		224
Cost of services sold		6,940		6,633		7,052		6,787		–		–
Interest and other financial charges		4,161		5,327		343		376		3,938		5,121
Investment contracts, insurance losses and
insurance annuity benefits		747		746		–		–		787		773
Provision for losses on financing receivables		2,263		2,336		–		–		2,263		2,336
Other costs and expenses		9,095		9,337		3,537		3,364		5,733		6,129
Total costs and expenses		33,778		35,812		21,243		21,749		12,986		14,583

Earnings (loss) from continuing operations
before income taxes		2,827		2,626		3,181		3,731		185		(126)
Benefit (provision) for income taxes		(431)		309		(788)		(842)		357		1,151
Earnings from continuing operations		2,396		2,935		2,393		2,889		542		1,025
Loss from discontinued operations,
net of taxes		(390)		(21)		(390)		(21)		(387)		(4)
Net earnings		2,006		2,914		2,003		2,868		155		1,021
Less net earnings attributable to
noncontrolling interests		61		85		58		39		3		46
Net earnings attributable to the Company		1,945		2,829		1,945		2,829		152		975
Preferred stock dividends declared		(75)		(75)		(75)		(75)		–		–
Net earnings attributable to GE common
shareowners	$	1,870	$	2,754	$	1,870	$	2,754	$	152	$	975


Amounts attributable to the Company
Earnings from continuing operations	$	2,335	$	2,850	$	2,335	$	2,850	$	539	$	979
Loss from discontinued operations,
net of taxes		(390)		(21)		(390)		(21)		(387)		(4)
Net earnings attributable to the Company	$	1,945	$	2,829	$	1,945	$	2,829	$	152	$	975

Per-share amounts
Earnings from continuing operations
Diluted earnings per share	$	0.21	$	0.26
Basic earnings per share	$	0.21	$	0.26

Net earnings
Diluted earnings per share	$	0.17	$	0.26
Basic earnings per share	$	0.17	$	0.26

Dividends declared per common share	$	0.10	$	0.31

(a)	Represents the adding together of all affiliated companies except General Electric Capital Services, Inc. (GECS or financial services), which is presented on a one-line basis.

See Note 3 for other-than-temporary impairment amounts.

See accompanying notes. Separate information is shown for "GE" and "Financial Services (GECS)." Transactions between GE and GECS have been eliminated from the "Consolidated" columns.

(3)

General Electric Company and consolidated affiliates

Condensed Statement of Financial Position

	Consolidated				GE(a)				Financial Services (GECS)
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
(In million, except share amounts)	2010		2009		2010		2009		2010		2009
	(Unaudited)				(Unaudited)				(Unaudited)
Assets
Cash and equivalents	$	69,628	$	72,260	$	10,238	$	8,654	$	60,039	$	64,356
Investment securities		41,549		51,941		28		30		41,523		51,913
Current receivables		17,729		16,458		9,380		9,818		–		–
Inventories		11,751		11,987		11,674		11,916		77		71
Financing receivables – net		346,939		329,232		–		–		356,185		336,926
Other GECS receivables		9,993		14,177		–		–		14,527		18,752
Property, plant and equipment – net		68,016		69,212		12,090		12,495		55,926		56,717
Investment in GECS		–		–		68,517		70,833		–		–
Goodwill		64,910		65,574		36,411		36,613		28,499		28,961
Other intangible assets – net		11,545		11,929		8,307		8,450		3,238		3,479
All other assets		100,475		103,417		17,511		17,097		84,145		87,471
Assets of businesses held for sale		33,735		34,111		32,786		33,986		949		125
Assets of discontinued operations		1,085		1,520		50		50		1,035		1,470
Total assets(b)	$	777,355	$	781,818	$	206,992	$	209,942	$	646,143	$	650,241

Liabilities and equity
Short-term borrowings	$	123,931	$	130,252	$	899	$	504	$	124,457	$	131,137
Accounts payable, principally trade accounts		14,498		19,703		10,013		10,373		8,261		13,275
Progress collections and price adjustments accrued		11,468		12,192		11,982		12,957		–		–
Other GE current liabilities		14,429		14,527		14,429		14,527		–		–
Non-recourse borrowings of consolidated
securitization entities		36,780		3,883		–		–		36,780		3,883
Bank deposits		38,310		38,923		–		–		38,310		38,923
Long-term borrowings		317,606		337,134		11,389		11,681		307,102		326,391
Investment contracts, insurance liabilities
and insurance annuity benefits		31,451		31,641		–		–		31,990		32,009
All other liabilities		55,652		58,861		35,210		35,232		20,566		23,756
Deferred income taxes		2,615		2,173		(4,285)		(4,620)		6,900		6,793
Liabilities of businesses held for sale		6,416		6,092		6,386		6,037		30		55
Liabilities of discontinued operations		1,248		1,301		176		163		1,072		1,138
Total liabilities(b)		654,404		656,682		86,199		86,854		575,468		577,360

Preferred stock (30,000 shares outstanding at
both March 31, 2010 and December 31, 2009)		–		–		–		–		–		–
Common stock (10,676,518,000 and 10,663,075,000
shares outstanding at March 31, 2010 and
December 31, 2009, respectively)		702		702		702		702		1		1
Accumulated other comprehensive income – net(c)
Investment securities		(342)		(435)		(342)		(435)		(343)		(436)
Currency translation adjustments		1,424		3,836		1,424		3,836		13		1,372
Cash flow hedges		(1,332)		(1,734)		(1,332)		(1,734)		(1,356)		(1,769)
Benefit plans		(16,534)		(16,932)		(16,534)		(16,932)		(392)		(434)
Other capital		37,588		37,729		37,588		37,729		27,588		27,591
Retained earnings		125,446		126,363		125,446		126,363		43,006		44,508
Less common stock held in treasury		(31,757)		(32,238)		(31,757)		(32,238)		–		–

Total GE shareowners’ equity		115,195		117,291		115,195		117,291		68,517		70,833
Noncontrolling interests(d)		7,756		7,845		5,598		5,797		2,158		2,048
Total equity		122,951		125,136		120,793		123,088		70,675		72,881

Total liabilities and equity	$	777,355	$	781,818	$	206,992	$	209,942	$	646,143	$	650,241

(a)	Represents the adding together of all affiliated companies except General Electric Capital Services, Inc. (GECS or financial services), which is presented on a one-line basis.

(b)	Assets and liabilities of consolidated variable interest entities (VIEs) were $57,571 million and $49,056 million, respectively, at March 31, 2010. Substantially all of the assets of the VIEs can only be used to settle obligations of those VIEs. See Note 16.

(c)	The sum of accumulated other comprehensive income - net was $(16,784) million and $(15,265) million at March 31, 2010 and December 31, 2009, respectively.

(d)	Included accumulated other comprehensive income - net attributable to noncontrolling interests of $(187) million and $(188) million at March 31, 2010 and December 31, 2009, respectively.

See accompanying notes. Separate information is shown for "GE" and "Financial Services (GECS)." Transactions between GE and GECS have been eliminated from the "Consolidated" columns.

(4)

General Electric Company and consolidated affiliates

Condensed Statement of Cash Flows

	Three months ended March 31 (Unaudited)
	Consolidated				GE(a)				Financial Services (GECS)
(In millions)	2010		2009		2010		2009		2010		2009

Cash flows – operating activities
Net earnings	$	2,006	$	2,914	$	2,003	$	2,868	$	155	$	1,021
Less net earnings attributable to noncontrolling interests		61		85		58		39		3		46
Net earnings attributable to the Company		1,945		2,829		1,945		2,829		152		975
Loss from discontinued operations		390		21		390		21		387		4
Adjustments to reconcile net earnings attributable to the
Company to cash provided from operating activities
Depreciation and amortization of property,
plant and equipment		2,475		2,731		550		550		1,925		2,181
Earnings from continuing operations retained by GECS		–		–		(539)		(979)		–		–
Deferred income taxes		320		(528)		40		74		280		(602)
Decrease (increase) in GE current receivables		514		1,952		319		2,225		–		–
Decrease (increase) in inventories		186		(158)		213		(170)		(6)		12
Increase (decrease) in accounts payable		679		(1,672)		188		(555)		322		(1,655)
Increase (decrease) in GE progress collections		(743)		(724)		(994)		(755)		–		–
Provision for losses on GECS financing receivables		2,263		2,336		–		–		2,263		2,336
All other operating activities		(866)		(6,943)		439		(165)		(1,168)		(6,698)
Cash from (used for) operating activities – continuing
operations		7,163		(156)		2,551		3,075		4,155		(3,447)
Cash from (used for) operating activities – discontinued
operations		(69)		(45)		–		–		(69)		(45)
Cash from (used for) operating activities		7,094		(201)		2,551		3,075		4,086		(3,492)

Cash flows – investing activities
Additions to property, plant and equipment		(1,302)		(2,560)		(522)		(756)		(857)		(1,896)
Dispositions of property, plant and equipment		1,597		1,183		–		–		1,597		1,183
Net decrease (increase) in GECS financing receivables		10,880		18,004		–		–		11,340		17,962
Proceeds from principal business dispositions		1,842		9,021		1,672		175		–		8,846
Payments for principal businesses purchased		(18)		(7,128)		(18)		(306)		–		(6,822)
Capital contribution from GE to GECS		–		–		–		(9,500)		–		–
All other investing activities		6,001		(2,524)		(20)		54		6,181		(1,935)
Cash from (used for) investing activities – continuing
operations		19,000		15,996		1,112		(10,333)		18,261		17,338
Cash from (used for) investing activities – discontinued
operations		9		47		–		–		9		47
Cash from (used for) investing activities		19,009		16,043		1,112		(10,333)		18,270		17,385

Cash flows – financing activities
Net increase (decrease) in borrowings (maturities of
90 days or less)		(1,824)		(13,620)		(151)		990		(1,637)		(15,852)
Net increase (decrease) in bank deposits		(613)		(3,336)		–		–		(613)		(3,336)
Newly issued debt (maturities longer than 90 days)		16,087		31,164		120		1,226		15,914		30,035
Repayments and other reductions (maturities longer
than 90 days)		(40,032)		(27,313)		(523)		(1,580)		(39,509)		(25,733)
Net dispositions (purchases) of GE shares for treasury		80		245		80		245		–		–
Dividends paid to shareowners		(1,143)		(3,350)		(1,143)		(3,350)		–		–
Capital contribution from GE to GECS		–		–		–		–		–		9,500
All other financing activities		(594)		(798)		(203)		(194)		(391)		(604)
Cash from (used for) financing activities – continuing
operations		(28,039)		(17,008)		(1,820)		(2,663)		(26,236)		(5,990)
Cash from (used for) financing activities – discontinued
operations		–		–		–		–		–		–
Cash from (used for) financing activities		(28,039)		(17,008)		(1,820)		(2,663)		(26,236)		(5,990)
Effect of currency exchange rate changes on cash
and equivalents		(756)		(189)		(259)		(42)		(497)		(147)
Increase (decrease) in cash and equivalents		(2,692)		(1,355)		1,584		(9,963)		(4,377)		7,756
Cash and equivalents at beginning of year		72,444		48,367		8,654		12,090		64,540		37,666
Cash and equivalents at March 31		69,752		47,012		10,238		2,127		60,163		45,422
Less cash and equivalents of discontinued operations
at March 31		124		182		–		–		124		182
Cash and equivalents of continuing operations
at March 31	$	69,628	$	46,830	$	10,238	$	2,127	$	60,039	$	45,240

(a)	Represents the adding together of all affiliated companies except General Electric Capital Services, Inc. (GECS or financial services), which is presented on a one-line basis.

See accompanying notes. Separate information is shown for "GE" and "Financial Services (GECS)." Transactions between GE and GECS have been eliminated from the "Consolidated" columns and are discussed in Note 17.

(5)

Summary of Operating Segments

General Electric Company and consolidated affiliates

	Three months ended March 31
	(Unaudited)
(In millions)	2010		2009

Revenues
Energy Infrastructure(a)	$	8,655	$	9,082
Technology Infrastructure(a)		8,659		9,523
NBC Universal		4,320		3,524
GE Capital(a)		12,331		13,775
Home & Business Solutions(a)		1,940		1,924
Total segment revenues		35,905		37,828
Corporate items and eliminations		700		610
Consolidated revenues	$	36,605	$	38,438

Segment profit(b)
Energy Infrastructure(a)	$	1,481	$	1,318
Technology Infrastructure(a)		1,403		1,702
NBC Universal		199		391
GE Capital(a)		607		1,029
Home & Business Solutions(a)		71		45
Total segment profit		3,761		4,485
Corporate items and eliminations		(295)		(417)
GE interest and other financial charges		(343)		(376)
GE provision for income taxes		(788)		(842)
Earnings from continuing operations attributable
to the Company		2,335		2,850
Loss from discontinued operations,
net of taxes, attributable to the Company		(390)		(21)
Consolidated net earnings attributable to
the Company	$	1,945	$	2,829

(a)	Effective January 1, 2010, we reorganized our segments. We have reclassified prior-period amounts to conform to the current-period presentation. See Note 1 for a description of the reorganization.

(b)

Segment profit always excludes the effects of principal pension plans, results reported as discontinued operations, earnings attributable to noncontrolling interests of consolidated subsidiaries and accounting changes, and may exclude matters such as charges for restructuring; rationalization and other similar expenses; in-process research and development and certain other acquisition-related charges and balances; technology and product development costs; certain gains and losses from acquisitions or dispositions; and litigation settlements or other charges, responsibility for which preceded the current management team. Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment’s management is measured – excluded in determining segment profit, which we sometimes refer to as “operating profit,” for Energy Infrastructure, Technology Infrastructure, NBC Universal and Home & Business Solutions; included in determining segment profit, which we sometimes refer to as “net earnings,” for GE Capital.

See accompanying notes to condensed, consolidated financial statements.

(6)

Notes to Condensed, Consolidated Financial Statements (Unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed, consolidated financial statements represent the consolidation of General Electric Company and all companies that we directly or indirectly control, either through majority ownership or otherwise. See Note 1 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2009 (2009 Form 10-K), which discusses our consolidation and financial statement presentation. As used in this report on Form 10-Q (Report) and in our Annual Report on Form 10-K, “GE” represents the adding together of all affiliated companies except General Electric Capital Services, Inc. (GECS or financial services), which is presented on a one-line basis; GECS consists of General Electric Capital Services, Inc. and all of its affiliates; and “Consolidated” represents the adding together of GE and GECS with the effects of transactions between the two eliminated.

Effective January 1, 2010, we reorganized our segments to better align our Consumer & Industrial and Energy businesses for growth. As a result of this reorganization, we created a new segment called Home & Business Solutions that includes the Appliances and Lighting businesses from our previous Consumer & Industrial segment and the retained portion of the GE Fanuc Intelligent Platforms business of our previous Enterprise Solutions business (formerly within our Technology Infrastructure segment). In addition, the Industrial business of our previous Consumer & Industrial segment and the Sensing & Inspection Technologies and Digital Energy businesses of our previous Enterprise Solutions business are now part of the Energy business within the Energy Infrastructure segment. The Security business of Enterprise Solutions is reported in Corporate Items and Eliminations for periods prior to its sale in the first quarter of 2010. Also, effective January 1, 2010, the Capital Finance segment was renamed GE Capital and includes all of the continuing operations of General Electric Capital Corporation (GECC). In addition, the Transportation Financial Services business, previously reported in GE Capital Aviation Services (GECAS), is now included in Commercial Lending and Leasing (CLL) and our Consumer business in Italy, previously reported in Consumer, is now included in CLL. GE includes Energy Infrastructure, Technology Infrastructure, NBC Universal and Home & Business Solutions. GECS includes GE Capital. We have reclassified certain prior-period amounts to conform to the current-period presentation. Unless otherwise indicated, information in these notes to condensed, consolidated financial statements relates to continuing operations.

In the first quarter of 2010, we have included a separate line on the statement of cash flows for the effect of currency exchange rate changes on cash and equivalents. We had previously included the effect of currency exchange rate changes on cash and equivalents in “All other operating activities” for GE and “All other investing activities” for GECS, as the effect was insignificant.

Accounting Changes

On January 1, 2010, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2009-16 and ASU 2009-17, amendments to Accounting Standards Codification (ASC) 860, Transfers and Servicing, and ASC 810, Consolidation, respectively (ASU 2009-16 & 17). ASU 2009-16 eliminates the Qualified Special Purpose Entity (QSPE) concept, and ASU 2009-17 requires that all such entities be evaluated for consolidation as Variable Interest Entities (VIEs). Adoption of these amendments resulted in the consolidation of all of our sponsored QSPEs. In addition, we consolidated assets of VIEs related to direct investments in entities that hold loans and fixed income securities, a media joint venture and a small number of companies to which we have extended loans in the ordinary course of business and subsequently were subject to a troubled debt restructuring (TDR).

We consolidated the assets and liabilities of these entities at amounts at which they would have been reported in our financial statements had we always consolidated them. We also deconsolidated certain entities where we did not meet the definition of the primary beneficiary under the revised guidance; however the effect was insignificant. The incremental effect on total assets and liabilities, net of our investment in these entities, was an increase of $31,097 million and $33,042 million, respectively. The net reduction of total equity (including noncontrolling interests) was $1,945 million, principally related to the reversal of previously recognized securitization gains as a cumulative effect adjustment to retained earnings. See Note 16 for additional information.

(7)

The amended guidance on ASC 860 changed existing derecognition criteria in a manner that significantly narrows the types of transactions that will qualify as sales. The revised criteria apply to transfers of financial assets occurring after December 31, 2009.

Interim Period Presentation

The condensed, consolidated financial statements and notes thereto are unaudited. These statements include all adjustments (consisting of normal recurring accruals) that we considered necessary to present a fair statement of our results of operations, financial position and cash flows. The results reported in these condensed, consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. It is suggested that these condensed, consolidated financial statements be read in conjunction with the financial statements and notes thereto included in our 2009 Form 10-K. We label our quarterly information using a calendar convention, that is, first quarter is labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is our longstanding practice to establish interim quarterly closing dates using a fiscal calendar, which requires our businesses to close their books on either a Saturday or Sunday, depending on the business. The effects of this practice are modest and only exist within a reporting year. The fiscal closing calendar from 1993 through 2013 is available on our website, www.ge.com/secreports.

2. ASSETS AND LIABILITIES OF BUSINESSES HELD FOR SALE AND DISCONTINUED OPERATIONS

Assets and Liabilities of Businesses Held for Sale

On December 3, 2009, we entered into an agreement with Comcast Corporation to transfer the assets of the NBCU business to a newly formed entity, which will consist of our NBCU businesses and Comcast Corporation's cable networks, regional sports networks, certain digital properties and certain unconsolidated investments. Pursuant to the transaction, we expect to receive $6,500 million in cash ($7.1 billion less certain adjustments based on various events between contract signing and closing) and will own a 49% interest in the newly formed entity. The transaction is subject to receipt of various regulatory approvals and is expected to close within the next year.

We also entered into an agreement whereby we will acquire approximately 38% of Vivendi’s interest in NBCU for $2,000 million on September 26, 2010, if the transaction described above has not yet closed. Provided the transaction subsequently closes, we will acquire the remaining Vivendi NBCU interest for $3,578 million and make an additional payment of $222 million related to the previously purchased shares. If the entity formation transaction closes before September 26, 2010, we will purchase Vivendi’s entire ownership interest in NBCU (20%) for $5,800 million.

Prior to the sale, NBCU will borrow approximately $9,100 million from third-p