GE

Nuovo Pignone S.p.A. via F. Matteucci, 2 50127 Florence - Italy www.ge.com/oilandgas

GE Oil & Gas

Annual Report and Financial Statements of Nuovo Pignone Holding S.p.A. - Consolidated Annual Report and Financial Statemenmts of Nuovo Pignone Group - at December 31, 2008

Annual Report and Financial Statements of Nuovo Pignone Holding S.p.A. Consolidated Annual Report and Financial Statements of Nuovo Pignone Group at December 31, 2008

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GE Oil & Gas Via Felice Matteucci, 2 50127 Florence - Italy Nuovo Pignone Holding S.p.A. Company limited by share with registered office in Florence Paid-up share capital Euro 74,880,000 VAT and Fiscal Code no. 00395360480 Entered in the Florence Register of Companies under no. 00395360480

Table of Contents I

I

I

I

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

3

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

73

Introduction

3

Structure of the Group

74

Activities performed

5

Introduction

75

Financial position and results

6

Economic situation and outllok

76

Reclassified Income Statement

7

Performance of the business sectors

77

Reclassified Balance Sheet

7

Elements of risk and uncertainty

80

Transactions with the parent company, with General Electric Group companies and with subsidiaries and associates

Research and development

80

8

Tangible fixed assets

81

Activities carried out by the subsidiaries during the year

10

Intangible fixed assets

81

Nuovo Pignone S.p.A.

10

Quality “Lean Six Sigma”

82

GE Medical Systems Italia S.p.A.

16

National tax consolidation scheme

82

GE Healthcare S.r.l. (formerly Amersham)

16

Personnel

83

GE Healthcare Clinical Systems S.r.l.

16

Financial position and results

83

GE Transportation Systems S.p.A.

18

Reclassified Income Statement

84

Jenbacher S.r.l.

18

Reclassified Balance Sheet

85

GE Sensing & Inspection Technologies S.r.l.

18

Nuovo Pignone International S.à r.l.

20

Transactions with parent companies and with General Electric Group companies

85

GE Industrial Financing Ireland Ltd.

20

Treasury shares and shares of parent companies

85

GE Capital Funding Services S.r.l.

20

Outlook

86

Tragaz Consortium

22

Significant post balance sheet events

86

Elements of risk and uncertainty

22

Treasury shares and shares of parent companies

26

Management and coordination activities

28

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

89

Consolidated Balance Sheet

90

Branch offices

28

Significant post balance sheet events

28

Outlook

28

Proposals to shareholders

28

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

29

Balance Sheet

30

Income Statement

32

I

I

I

Consolidated Income Statement

92

Notes to the Consolidated Financial Statements

93

Consolidated statement of cash flows

137

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

157

193 196

Notes to the Financial Statements

33

Statutory Auditor's Report for the Consolidated Financial Statements as at and for the year ended December 31, 2007

Statement of Cash Flows

58

Independent Auditor's Report

Statutory Auditor's Report for the Financial Statements as at and for the year ended December 31, 2008

67

Independent Auditor's Report

70

Resolutions from Shareholders' meeting

71

1

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

BOARD OF DIRECTORS Chairman Piero Salvadori Vice Chairman Stefano Giuliano Managing Director Claudio Santiago Ponsa Directors Anna Maria Varsellona Giovanni Bucaneve Alberto Cerruti Ugo Draetta Claudio Materazzi Claudio Santiago Ponsa Paola Pulidori Michele Stangarone

STATUTORY AUDITORS Chairman Cosimo Imbrioscia Standing Auditors Angelo Ciavarella Antonio Angelo Manzoni

Substitute Auditors Luca Bonanno Filippo Pasquini

GENERAL MANAGERS Michael Bellamy Fernando Bertoni Harke Siebe Elsinga Claudio Materazzi Joseph Mastrangelo Andrew Way Mohammad Ehteshami Kenneth Resnick Alan Kocsi Jeffrey Nagel Frederic Ribieras

INDEPENDENT AUDITORS KPMG S.p.A. N.B.: The aforesaid individuals are those holding office at the time of approving these Financial Statements

2

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Dear Shareholders, We submit for your attention the Financial Statements as at and for the year ended 31 December 2008, together with the Report on Operations, drawn up in accordance with Article 2428 of the Italian Civil Code. In compliance with the obligation set forth by Legislative Decree 127/91, in addition to these financial statements, consolidated financial statements have also been drawn up for the Nuovo Pignone Group, of which Nuovo Pignone Holding S.p.A. is the parent company. Pursuant to Article 2364 of the Italian Civil Code, recourse to the extended term of 180 days for approval of the financial statements is justified by the fact that some companies in which the Company holds investments approve their respective financial statements after 180 days. With reference to the provisions set forth by Legislative Decree 231/01, we mention that the Supervisory Body met regularly on a quarterly basis, as required by its Articles of Association, and carried out its monitoring activity over its subsidiaries. We furthermore report that, following the changes introduced by Law 123 in August 2007, the Supervisory Body is proceeding to evaluate the Organisational, Management and Control Models of its subsidiaries insofar as concerns their revision to take account of Articles 25 septies and octies, which extended the list of offences assumed as necessary condition (“reati presupposto”) for application of Law 231 to include the crime of manslaughter and causing serious and very serious bodily harm through breach of accident prevention and occupational health and safety regulations, in addition to crimes relating to the receiving of stolen goods, money laundering and the utilisation of money originating from illicit activities. During the year no cases were reported such as might be of relevance for the purposes of Legislative Decree 231/01. Regarding the financial instruments disclosure required pursuant to Article 2428, paragraph 3, point 6-bis of the Italian Civil Code, the Company does not consider that there are any risk elements to be reported.

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Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Antisurge Valve

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Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Activities performed Nuovo Pignone Holding S.p.A. performs financial and holding activities and operates a professional training facility (Florence Learning Center), whose services are offered both to employees of the Nuovo Pignone and General Electric Groups and to third-party customers and suppliers. During the current period the size and nature of investments held by the Company changed as a result of the transactions mentioned below. On 10 January 2008 Nuovo Pignone Holding S.p.A. sold its investment in Thermodyn S.A.S. to GE Energy Holding S.A.S.; the sale price, amounting to 71.3 million Euro, was supported by an appropriate appraisal report and generated a capital gain of 10.4 million Euro. March 2008 saw the completion of the GE Healthcare IVD Italia S.r.l. liquidation process; the overall profit that emerged on liquidation, amounting to 1.3 million Euro, primarily concerns the interest accrued on the capital invested. On 29 August 2008, the subsidiary Nuovo Pignone S.p.A. resolved a share capital increase (of 129 thousand Euro, with an overall share premium of 910 thousand Euro) reserved for the contribution by IRMA Service S.p.A. of its business unit concerned with engineering and technical support activities on plant and machinery in the Oil & Gas sector.

Reciprocating Compressor

5

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

The contribution was carried out on 24 September 2008 based on the special appraisal drawn up by an expert appointed by the Florence Court. Again on 24 September 2008, Nuovo Pignone Holding S.p.A. transferred to IRMA Service S.p.A. its entire shareholding (corresponding to a 40% equity interest) in IRMA Service S.p.A., with purchase by the latter of treasury shares; the price paid, which amounted to 721 thousand Euro, generated a capital gain for the Company of 321 thousand Euro. Lastly, on 27 November 2008, IRMA Service S.p.A. sold to Nuovo Pignone Holding S.p.A. the shares in Nuovo Pignone S.p.A. assigned to IRMA at the time of contribution of the business unit; the price paid for the shares was 2.3 million Euro. On 30 October 2008, GE Sensing & Inspection Technologies S.r.l. acquired the entire investment in Everest VIT Italia S.r.l., a company active in the field of visual inspection equipment sale, service and rental. The merger of Everest VIT S.r.l. into GE Sensing & Inspection Technologies S.r.l., carried out with a view to streamlining the corporate structure of the businesses operating in the sector of measurement devices, was completed on 19 March 2009. The statutory and fiscal effects of the merger were made to start from 1 January 2009. On 4 December 2008, the subsidiary Nuovo Pignone International S.à r.l. sold its investment in Nuovo Pignone International Scotland (corresponding to 99.81%) to GE Holding Luxemburg S.à r.l.. The sale price, amounting to 1,247 million Euro, determined a loss of 211 million Euro for Nuovo Pignone International S.à r.l.. On the same date, the subsidiary approved a resolution for full repayment of the share premium reserve. Payment of the amount in question, totalling 1,299 million Euro, was made 1,202 million Euro in favour of GE Industrial Financing Ireland Ltd. (GEIFI) and 97 million Euro in favour of Nuovo Pignone Holding S.p.A.. Again

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on 4 December 2008, the subsidiary GE Industrial Financing Ireland Ltd. approved a resolution to repay to Nuovo Pignone Holding S.p.A. the capital injection carried out on 12 March 2007, for the amount of 1,199 million Euro. On the same date, Nuovo Pignone Holding S.p.A. then proceeded to pay dividends totalling 1,523 million Euro in favour of GE Energy Europe B.V., as per resolution adopted by the Shareholders' Meeting on 27 June 2008. Payment of dividends amounting to 77 million Euro in favour of GE Holding Luxembourg S.à r.l. is still pending, as shown in the Nuovo Pignone Holding S.p.A. financial statements at 31 December 2008.

Financial position and results The Company's financial statements at 31 December 2008 show a net profit for the year of 182 million Euro, compared with a net profit of 79 million Euro at 31 December 2007. The increase in net profit is mainly ascribable to the trend in income from investments, up from 19 million Euro at 31 December 2007 to 137 million Euro at 31 December 2008; at 31 December 2008 this item includes the dividends declared and paid by Nuovo Pignone International S.à r.l. (108 million Euro), GE Transportation Systems S.p.A. (15 million Euro), GEIFI (2 million Euro) and Bently Nevada Italia S.r.l. (one million Euro), as well as the capital gain arising from the sale of the investment in Thermodyn S.A.S. (10 million Euro); the balance pertaining to 2007 comprised the dividends declared and paid by the subsidiaries GE Transportation Systems S.p.A. (18 million Euro) and Bently Nevada Italia S.r.l. (one million Euro). We set out below the reclassified schedules of the Company’s income statement and balance sheet, relating to the financial year under review and the previous year.

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Reclassified income statement 2008 Thousands of Euro

Net revenues Other revenues and income Purchases, services and sundry costs Personnel and related charges Gross operating profit (EBITDA) Amortisation and depreciation Operating profit (EBIT) Adjustments to financial asset values Financial income (expenses) Income (expenses) on investments Exchange rate gains (losses) Profit from ordinary operations Extraordinary income (expenses) Profit before taxes Income taxes NET PROFIT FOR THE YEAR

88,238 72 (4,253) (495) 83,561 (7) 83,544 (1,665) (11,287) 136,627 9 207,238 61 207,299 (25,220) 182,079

2007 %

Thousands of Euro

%

100.0 0.1 -4.8 -0.6 94.7 0.0 94.7 -1.9 -12.8 154.8 0.0 234.9 0.1 234.9 -28.6 206.4

83,901 105 (4,161) (373) 79,472 (36) 79,435 0 (11,407) 19,436 (10) 87,454 18 87,471 (8,591) 78,880

100.0 0.1 -5.0 -0.4 94.7 0.0 94.7 0.0 -13.6 23.2 0.0 104.2 0.0 104.3 -10.2 94.0

Reclassified balance sheet 31 December 2008 Thousands of Euro

Intangible fixed assets Tangible fixed assets Investments, securities and treasury shares Fixed assets Current assets Current liabilities Provisions for risks and charges Net working capital NET INVESTED CAPITAL Shareholders’ equity M/L-term net fin. debt/(Net fin. position) Short-term net fin. debt/(Net fin. position) Net financial debt (Net financial position) COVERAGE

31 December 2007

%

Thousands of Euro

%

891 235

0.1 0.0

3 222

0.0 0.0

1,077,336 1,078,462 91,951 (25,685) (1,357) 64,909 1,143,371 775,093

94.3 94.4 8.0 -2.2 -0.1 5.7 100 67.8

2,373,996 2,374,221 146,344 (6,994) (2,446) 136,904 2,511,124 2,193,014

94.5 94.5 5.8 -0.3 -0.1 5.5 100 87.3

0

0.0

0

0.0

368,278

32.2

318,110

12.7

368,278 1,143,371

32.2 100.0

318,110 2,511,124

12.7 100.0

7

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Short-term net financial debt increased from 318 million Euro at 31 December 2007 to 368 million Euro at 31 December 2008. As per details shown in the statement of cash flows attached to these financial statements, the change compared to the previous year is mainly ascribable to the significant amount of dividends distributed during the year, which exceeded those posted by way of income from investments. The net financial position at 31 December 2008 comprises financial payables due to Nuovo Pignone S.p.A. (311 million Euro), GE Service Luxembourg S.à r.l. (117 million Euro), GE Holding Luxembourg S.à r.l. (77 million Euro), GE Energy Europe B.V. (56 million Euro), net of a loan granted to GE Holding Luxembourg S.à r.l. in the amount of 194 million Euro.

Transactions with the parent company, with General Electric Group companies and with subsidiaries and associates The Company carries out, with the parent company General Electric Energy Europe B.V. and with companies of the General Electric Group, transactions of a financial nature which are settled at rates in keeping with those of the market. Since October 1999 the Treasury operations pertaining to the Italian associates of all the General Electric Group manufacturing businesses have been centralised. The purpose of this operation, which provides for the bank accounts of the associates to be concentrated with just two banks, is to optimise the management of financial resources and reduce banking costs. In the course of its normal business activity, the Company in turn carries out commercial transactions with its subsidiaries, via appropriate agreements for the supply of services or granting the use of trademarks and patents, subject to normal market terms and conditions (except as described in the paragraph concerning the national tax consolidation scheme). Details of the financial transactions with these companies are provided in the notes to the financial statements. We report that, starting from 2004, the Company has exercised its option for consolidated taxation in

8

its capacity as parent, pursuant to Articles 117 et seq. of the Italian Consolidated Income Tax Act (T.U.I.R.). Adoption of the consolidated tax system allows Nuovo Pignone Holding S.p.A. to offset the company’s positive and negative taxable income for IRES (corporate tax) purposes against those of the subsidiaries having exercised the option, bearing in mind that the tax losses accrued during periods prior to introduction of group taxation can be used only by the companies that have generated them. Apart from the offsetting of positive and negative taxable income pertaining to individual companies exercising the option in question, the national tax consolidation scheme produces other positive effects, such as for example the removal of certain limitations on the deductibility of financial charges and the possibility to carry out transfers and contributions of individual assets within a regime of tax neutrality. The relationships arising from participation in the national tax consolidation scheme, as well as the reciprocal responsibilities and related formalities, obligations and benefits, are regulated via specific “National Tax Consolidation Rules”, subscribed to by all companies taking part in the national tax consolidation scheme, which set forth a common procedure for application of normative and regulatory provisions. With regard to the financial transactions, the Rules require the subsidiaries with

HE-S Reciprocating Compressor

9

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

positive taxable income to transfer to the parent company the financial resources proportionately corresponding to the higher tax due by the latter as a result of their participation in consolidated taxation; companies with negative taxable income transfer their losses to the parent company, without compensation, since they are not entitled to any indemnity. In the event that a subsidiary subsequently leaves the national tax consolidation scheme, the transferred losses remain with Nuovo Pignone Holding S.p.A.. The IRES tax related amounts shown in the balance sheet correspond to the transactions between the parent company Nuovo Pignone Holding S.p.A. and the consolidated companies. The following companies have elected to participate in the national tax consolidation scheme for 2008: Nuovo Pignone Holding S.p.A. (the parent), GE Transportation Systems S.p.A., GE Medical Systems Italia S.p.A., Bently Nevada Italia S.r.l., GE Capital Funding Services S.r.l, Jenbacher S.r.l, GE Sensing & Inspection Technologies S.r.l., GE Healthcare S.r.l. (formerly Amersham Health S.r.l.), GE Medical Systems Information Technologies S.r.l., GE Healthcare Clinical Systems S.r.l. (formerly DatexOmheda).

Activities carried out by the subsidiaries during the year The following is a summary of the activities carried out by individual subsidiaries during the year.

Nuovo Pignone S.p.A. Nuovo Pignone S.p.A., one of the foremost suppliers of goods and services in the Oil & Gas industry, is Nuovo Pignone Holding S.p.A.’s main subsidiary. In 2008, the subsidiary posted production revenues of 3,196 million Euro compared to 3,041 million Euro at 31 December 2007, with an increase in operating profit (EBIT) from 191 million Euro in 2007 to 218 million Euro in 2008. The growth in operating income was mainly ascribable to the rise in volumes and improvement in terms of marginality. Set out below is an analysis of the economic situation in which Nuovo Pignone S.p.A. operates; we will then

10

go on to describe the specific trend in the Company’s areas of operation.

Economic situation and outlook During 2008 the growth in the global economy slowed down to around 2.7% in real terms compared to 3.5% in 2007. The forecast for 2009 confirms a period of depression, with the world growth rate falling to below one percent. The explosion of the “sub-prime” mortgage crisis in the United States heavily impacted the financial industry, pushing the global economy towards one of the worst economic recessions. The industrialised countries posted a growth of just over one percent (United States 1.2%, Europe 1.1% and Japan 0.4%), compared to 2.5 percent in 2007. The developing countries also recorded a slowdown: Latin America, the Middle East and Africa showed a downturn compared to 2007, dropping to respectively around 4.6%, 6.1% and 5.1%. This decline is primarily connected with the falloff in commodity prices and the overall volume of exports and the reduction in direct foreign investments. The same trend was seen in the former Soviet Union area which, compared to 2007, slowed down by over one percent to approximately 7%. The Asian economies were also affected by the world economic crisis; China and India continued to post positive growth rates, at respectively 9.1% and 7.5%, but the forecasts for 2009 suggest a slowdown in the development of these countries too.

MS6000 Gas Turbine Rotor

11

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

The slowdown in world growth also determined a falloff in energy demand. More specifically, in 2008, the demand for oil fell to 85.8 Mbbl/d (million barrels per day), down by 0.3% compared to 2007 levels. The average oil trading price in 2008 was around 100 Dollars per barrel, 40% more than the 2007 average of 72 Dollars per barrel; however, if considered more closely, the price of crude rose sharply during the first six months of 2008, exceeding the threshold of 100 Dollars per barrel in January and reaching the record figure of almost 150 Dollars per barrel in July; then the impact of the financial and economic crisis started to have notable repercussions on the trend in the price of crude which, having constantly fallen during the last six months of 2008, during the month of December dropped to below the threshold of 40 dollars per barrel. Given the weak and uncertain price of oil and lack of financial stability, throughout the sector there was a general slowdown in the launch of new initiatives and the continuation of ongoing projects; a continued weakness in the price of oil undoubtedly constitutes a risk factor as regards the trend in the oil sector. On the other hand, we note that the current price of oil continues to guarantee the profitability of investments with a low break-even price; moreover, the demand as regards the developing countries helps to support performance in the sector which, therefore, despite the economic situation, continues to show positive signs. Against the diminishing demand for oil, the demand for natural gas, having dropped only slightly with respect to 2007 levels, continues to be sustained by energy requirements in developing countries. Environmental regulations, which impose ever more stringent limits on CO2 emissions, continue to push the consumption of natural gas as opposed to coal. Despite the general tendency towards gas price convergence (due to increased transportation in liquid form (LNG)), the price of natural gas continues to be affected by a wide variability based on the region of origin, fluctuating between a minimum of 6.90 USD/MMBtu as regards the California coast in the United States to a maximum of around 14 USD/MMBtu in Japan.

12

Performance of the business sectors The Company operates as main supplier in the Oil & Gas sector and comprises an Equipment division – which, in 2009, has taken the name of “Turbomachinery” division (new extraction, transportation and refining machinery and plant) – and a Global Services division (installation and start-up of the machines and a wide variety of after-sales services). The Equipment division operates in the following three segments: I

I I

Natural Gas & Processing, which includes the Refinery, Petrochemical and Industrial Power Generation sectors; Transportation, which includes the Liquified Natural Gas (LNG) and Pipeline applications; Turnkey facilities.

With reference to the Natural Gas & Processing segment, the global economic situation led to a slowdown in activities, with a consequent slide in the timing of some projects; both orders and revenues were affected by this trend, particularly as regards contracts scheduled for completion during the same year in which they were awarded. In the Transportation segment the falloff in orders recorded in 2007 for LNG projects translated to a decrease in 2008 revenues, whereas the projects for the construction of pipelines were only marginally affected by the world economic crisis, posting a slight falloff in revenues during 2008; as far as orders are concerned, while the result posted by pipelines was in line with the volumes recorded for 2007, LNG continued to show a slowdown with respect to the extraordinary performances of previous years. The Turnkey facilities segment also posted a downturn during the course of 2008 as regards both revenues and orders, the latter tending to slide towards 2009. Again in 2008, a year of positive results in terms of both orders and revenues, driven by the division’s numerous initiatives undertaken with a view to expanding the portfolio of services to customers in

2BCL 505 Centrifugal compressor

13

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

the Oil & Gas market, the Global Services division confirmed its role as an essential growth platform for the Company. The main growth driver was to be found in the long-term activities (technical assistance and maintenance and machinery upgrade contracts); excellent performances were also achieved by the more traditional sectors (sale of spare parts and servicing). The Company's 2008 financial trends are described in detail in the specific section of this report on operations entitled “Financial position and results”. In addition to being one of the leading suppliers in the Oil & Gas sector, through its subsidiary Fondazione Pignone the Company conducts promotional, cultural and social initiatives designed to spread and enhance the Company’s image and culture. During 2008, the third session of the “Oil & Gas Technologies” training course dedicated to oil and gas technologies, which commenced towards the end of 2007, was completed. The course was attended by 28 students from 19 oil and gas producing countries, selected from the best talents in their respective companies. October marked the beginning of the fourth session, with similar purposes. Again in 2008 the “Pier Luigi Ferrara” Scholarship was set up, addressed to graduates in Mechanical, Industrial, Energy and Nuclear Engineering from the University of Florence, with the first two winners receiving their prizes during the closing ceremony of the third “Oil & Gas Technologies” course.

Outlook Although the growth levels forecast for the economy and for energy demand in 2009 are lower than those posted in recent years, they nevertheless suggest that the coming periods will again see significant investments in the Oil & Gas sector. The investment areas of greatest interest continue to be the Middle East, Africa, Latin America, China and India. In particular, in Latin America and Africa (Brasil, Nigeria and Angola) the expansion is expected to concern above all the mining sector, while the largest investments in the petrochemicals and refining areas are expected to take place in Saudi Arabia, China and India. Moreover, some major gas and oil pipeline projects are anticipated 14

in the zone of Russian influence. To achieve the targeted growth objectives, the Company is pursuing numerous strategic initiatives, including: I

the carrying out of process and product standardisation programmes, with a view to reducing contract lead times and general production costs, and improving products and services offered to customers;

I

the commitment to technological innovation, with the intention of creating added value for customers by offering them a wide range of products and services. The Company benefits from the different technologies available within the ambit of the various General Electric businesses, which have supported the consolidation and expansion of the already considerable base of knowledge and experience;

I

the promotion of strategic alliances with local partners, designed to enable a greater proximity to customers;

I

the development of the Lean Six Sigma quality methodology, with a view to enhancing internal efficiency and all processes capable of developing added value for customers.

As regards the activity of Fondazione Pignone the latter is expected to carry on conducting various promotional, cultural and social initiatives. In particular, it will continue the “Oil & Gas University” teaching activity, and has already published the notice of competition for the 2009 "Pier Luigi Ferrara" scholarship.

Impeller

15

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

GE Medical Systems Italia S.p.A. GE Medical Systems Italia S.p.A. markets diagnostic imaging systems and services and related technical assistance services. In 2008, the Company posted a growth in sales of 8% with respect to the previous year (324 million Euro in 2008, compared with 300 million Euro in 2007), thereby consolidating its presence on the Italian market in a particularly difficult year, characterised by a general slowdown in demand following the public spending cutbacks approved by the government. Gross operating profit (EBITDA) was up by 3% over 2007 (39 million Euro in 2008 compared to 38 million Euro in 2007), mainly as a result of the upturn in sales. Insofar as concerns the equipment allocated to diagnostic imaging, the Company saw a 12% growth in orders compared with 2007; revenues were also up by 7%, allowing the Company to further consolidate its presence in the reference sector. The ultrasound and bone densitometry equipment business confirmed its excellent market position, with turnover increasing by 9% over 2007. Revenues posted by the Service business showed a growth of 10% over the previous year. The Company's future operations are expected to be positive and in line with the performances recorded in recent years.

managed to improve both its market share and price levels.

GE Healthcare Clinical Systems S.r.l. GE Healthcare Clinical Systems S.r.l. markets electromedical diagnostic devices and provides customers with related after-sales technical assistance services, developing its volumes primarily in Italy. Despite the unfavourable economic situation and the heavy cutbacks in public spending, the subsidiary was able to slightly increase its sales volumes, up from 46 million Euro in 2007 to 47 million Euro in 2008. Operating income in 2008 reached 1.4 million Euro compared to 0.7 million Euro a year earlier. Also for GE Healthcare Clinical Systems S.r.l., the curbing of public sector spending constitutes a critical factor as regards the development of the Company's turnover and expansion of its margins.

GE Healthcare S.r.l. (formerly Amersham) GE Healthcare S.r.l. operates, in Italy, in the manufacture and marketing of contrast media and radiopharmaceuticals used in diagnostic imaging. Despite the difficult market situation, we report that the Company closed 2008 with sales totalling 57 million Euro, posting a slight growth over the previous year, and operating income of 9 million Euro compared to 7 million Euro in 2007. Spending control measures on the part of hospital administrations continued to represent a curbing element as regards the expansion of the Company's volumes. Moreover, the general picture suggests a continuous price erosion in the sector of monomeric contrast media and that of magnetic resonance contrast media. Insofar as concerns nuclear medicine products, on the other hand, the Company 16

R-943-002 Hydrocracker Reactor

17

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

It is nevertheless considered that in the years to come the Company, both due to the cost containment policies put in place and in view of the tendency of its volumes towards stable growth, is capable of achieving an improvement in terms of both margins and results.

2008 amounted to 40 million Euro compared to 33 million Euro in 2007. During 2009 major negotiations are expected to be concluded regarding the distribution of products in both the domestic and overseas markets, with a tendency towards enhancing volumes at international level.

GE Transportation Systems S.p.A.

Jenbacher S.r.l.

During 2008 the Italian railway signalling market confirmed a downturn in the growth rate with respect to previous years. The railway signalling sector in any case saw a continuation of the Italian Railway Network's implementation of plans to modernise the network’s signalling systems and improve safety standards, as regards both the main domestic traffic lines and the regional lines. In particular, on major sections of the Italian railway infrastructure, installation continued of the automatic train control systems (sistemi di controllo di marcia del treno), the train driver support systems (sistemi di supporto alla condotta) and land subsystems (sottosistemi di terra), the latter developed entirely by the Company. The Company is currently implementing major orders in connection with these projects. Moreover, as part of an expansion strategy, which aims to enhance its presence in the main international markets, considered to have greatest development potential for the business sector, the Company is pursuing interesting negotiations for the distribution of its products and implementation of orders in important foreign markets. The results achieved during the year should be considered positive bearing in mind the current economic situation: 2008 production revenues, representing turnover, the change in inventories and the increase in contract work in progress, totalled 92 million Euro, compared to 90 million Euro in 2007, with a growth of 3% largely due to an arbitration award in the course of 2008 involving the Albanian Government. The difference between production revenues and cost amounted to 26 million Euro, up by 4% over 2007, as a result of the Company's operational efficiency. Investments in research and development at 31 December 2008 amounted to 3 million Euro. The Company's orders portfolio at 31 December

The Company operates in the manufacture of electrogen groups and cogeneration systems for the production of electricity, using fossil fuels (natural gas) as well as alternative and renewable fuels (biogas from biomass, waste, etc.). The Company's specific sector of operation moves in an anti-cyclical direction so that, notwithstanding the unfavourable economic situation at domestic and global level, 2008 was a year of growth; a good performance was recorded, particularly as regards the hospital supplies and district heating segments; the agricultural business also proved to be a driver for biogas applications. Revenues were up from 44 million Euro in 2007 to 56 million Euro in 2008 (+27%), with an operating profit of around 14%, basically in line with a year earlier, while the orders portfolio, at approximately 39 million Euro, was down on the previous year. With regard to the Company's prospective performance, generally difficult market conditions are anticipated: however, the commitments undertaken by our Government at EU level (20% increase in energy output using renewable energy sources and achievement of Kyoto objectives) should favour investments in the sector, with positive repercussions on the Company's potential results.

18

GE Sensing & Inspection Technologies S.r.l. The Company was created following the merger on 28 December 2007 between GE Inspection Technologies S.r.l. and GE Sensing Italia S.r.l. and is active in Italy in two distinct sectors: the Inspection business unit operates, in the capacity of agent, in the sector of chemical and industrial products and materials for the implementation of non destructive testing; the Sensing business unit operates in the

Steam Turbine Rotor

19

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

sale, maintenance and repair of equipment, electronic and computer products generally, as well as spare parts, with specialisation in pressure measurement instruments. The Company also performs the following services: setting, calibration and certification under domestic and international legislation, technical assistance, maintenance of installations and of the aforesaid equipment. During 2008 there was a falloff in volumes with respect to 2007, from 11 million Euro in 2007 to 9 million Euro in 2008, resulting in a negative impact also on operating income. More specifically, unlike the Inspection business unit, the Sensing business unit experienced a decline in sales, which was more pronounced during the second half of 2008. On the other hand, the trend in Inspection sales during 2008 was generally positive and featured a growth of about 8 points over the previous financial year, despite the slowdown in orders during the last four months of the year. On 30 October 2008, GE Sensing & Inspection Technologies S.r.l. acquired the entire investment in Everest VIT Italia S.r.l.. The merger of Everest VIT S.r.l. into GE Sensing & Inspection Technologies S.r.l., carried out in order to streamline the corporate and organisational structure of the business with a view to enhancing its commercial synergies, was completed on 19 March 2009.

Nuovo Pignone International S.à r.l. The Company, incorporated under the laws of Luxembourg, performs the role of financial holding for some of the Group Companies, owning certain investments and handling loans with Companies of the General Electric Group. At 31 December 2008 the investments owned were as follows:

Company

Location

Percentage of ownership %

Pignone Inc.

New York

100.00

Pignone Engineering

London

20

99.99

As mentioned earlier, on 4 December 2008 Nuovo Pignone International S.à r.l. sold its investment in Nuovo Pignone International Scotland (corresponding to 99.81%) to GE Holding Luxembourg S.à r.l.. The sale price, amounting to 1,247 million Euro, determined a loss of 211 million Euro for Nuovo Pignone International S.à r.l.. On the same date, the subsidiary approved a resolution for full repayment of the share premium reserve. Payment of the amount in question, totalling 1,299 million Euro, was made 1,202 million Euro in favour of GE Industrial Financing Ireland Ltd. (GEIFI) and 97 million Euro in favour of Nuovo Pignone Holding S.p.A.. The net result for the year went from a profit of 25 million Euro in 2007 to a loss of 55 million Euro in 2008, principally due to the loss arising from the sale of Nuovo Pignone International Scotland, net of the dividend distributed by the latter prior to the sale.

GE Industrial Financing Ireland Ltd. This Company, incorporated under Irish law, also performs the role of holding company. Up until December 2008 it held an interest in Nuovo Pignone International S.à r.l. which was fully liquidated on 4 December; the liquidation of Nuovo Pignone International S.à r.l. determined a loss of 60 million Dollars for the Irish subsidiary in the financial statements for the period ended 31 December 2008.

GE Capital Funding Services S.r.l. Nuovo Pignone S.p.A.'s subsidiaries include GE Capital Funding Services S.r.l., a company operating exclusively by acquiring the trade receivables of General Electric Group companies due from debtors outside the Group; in 2008 the subsidiary recorded a factoring turnover of 2,785 million Euro, compared with 2,839 million Euro generated during the previous year (-1.9%), of which 1,064 million Euro related to the domestic market (963 million Euro in 2007, +10.5%) and 1,721 million Euro concerned exports (1,876 million Euro in 2007, -8.3%). Despite the essentially stable trend in turnover, there was a sharp rise in the total income, from 18.1 million Euro in 2007 to 29.3 million Euro in 2008 (+61.9%),

3MCL 1405 Centrifugal Compressor Casing

21

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

with a 34% growth in interest income. This favourable result is mainly ascribable to the delay in revising investment rates with respect to funding rates in a market which, in 2008, featured a downturn in rates; in particular, against the very strong performance in terms of interest income which settled at 78.8 million Euro (compared to 62.1 million in 2007), interest expense amounted to 55.2 million Euro (compared to 50.5 million Euro in 2007). We report that starting from the end of 2007 the Company launched a “Maturity factoring” agreement with Mediofactoring S.p.A.. Under the agreement, the Company assigns invoices, previously acquired from GE Medical Systems Italia S.r.l. and GE Healthcare Clinical Service S.r.l., pertaining to public administration customers, transferring risks and benefits to Mediofactoring against payment of a commission.

Tragaz Consortium The Tragaz Consortium was created for the purpose of fulfilling the contractual obligations arising from the contract signed by Nuovo Pignone S.p.A. with the Russian gas company Gazprom in 1994. In December 2007, the Consortium’s Management Committee unanimously approved the closure of the Moscow office and liquidation of the Consortium. Following the conclusion of the liquidation phase, as per resolution of the Extraordinary Shareholders' Meeting dated 7 December 2007, the plan of allocation drawn up by the liquidator was approved on 23 December 2008. The final cancellation of the Consortium from the Register of Companies took place on 16 February 2009.

Elements of risk and uncertainty The Company holds investments in diversified sectors, characterised by different risk factors. In view of the volumes and nature of their business, it is considered that the Group's greatest risk factors reside in the investments in Nuovo Pignone S.p.A. and GE Capital Funding Service S.r.l..

22

Nuovo Pignone S.p.A. In the course of its business activity, the Company is exposed to a variety of risk factors which management identifies and controls by way of suitable business procedures; we describe below the most significant of these: Risks concerning the macroeconomic and sector outlook As expected, the global macroeconomic situation has led to a marked decline in gross domestic product, in both Western and developing countries; this has given rise to a falloff in energy demand which has driven down the price of oil. Given the uncertainty regarding the price of oil, customer companies tend, where possible, to reschedule their investments with a view to orienting their resources towards projects with profitability and risk characteristics suited to the lower prices of the outlet markets; another tendency noticed concerns the delaying of projects acquired, either with the intention of reviewing cost profiles or in anticipation of a downturn in production costs. The price of oil has to date settled at levels such as to guarantee the profitability of investments with a low break-even price: for these projects demand remains positive. On the other hand, it should be mentioned that a prolonged period of oil price weakness is a critical factor for the Company and for the sector as a whole. In view of the uncertainty regarding the trend in orders, the Company continues to focus on production efficiency and cost reduction, so as to enhance the competitiveness of products and minimise the impacts of this adverse seasonal pattern on margins and volumes. Moreover, the structure of the business model which has for some time been adopted by the Company, comprising an Equipment division and a Global Services division, constitutes a major shock absorber for the economic situation: the Global Services business, which operates as a support for customers' management of the plants (spare parts, maintenance services, long-term maintenance contracts), has

Reciprocating Compressor 12 PK frame for ethylene

23

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

been only marginally affected by the oil crisis, since, notwithstanding the unfavourable cycle, customers continue to focus first and foremost on preserving the maximum efficiency of their installations. Country risk Some of the countries in which the Company operates and where its products are destined are characterised by considerable political and economic instability. The potential changes in political balance, alongside economic uncertainty and social conflicts, are risk factors as regards both regulatory stability and continuity in contractual activities. The Company constantly monitors projects in the areas at risk, via various procedures for the periodic evaluation of specific risks (evaluation of unsold goods, monitoring of financial exposure, assessment of receivables) and by adopting appropriate contractual structures such as to contain financial exposure. Moreover, the Company has avoided concentrating its Operations within a limited number of countries and geopolitical areas, tending instead to operate in many locations; the significant diversification of the Company's areas of operation constitutes a strong factor in containing country risk. Regulatory risks Nuovo Pignone S.p.A. carries on a large part of its business abroad; the multifarious regulations that govern operations performed in a large number of countries represents a significant factor of risk for the Company. Failure to observe safety, environmental, employment, administrative and tax regulations in the various countries implies a risk of civil and criminal penalties, against either the Company itself or its legal representatives. In order to ensure optimum handling of regulatory risk, the Company has long since set up risk management procedures. Over the past few years, in view of the growing complexity of the business and the large number of countries where it operates, the Company has created a Localisation Team, exclusively concerned with the continuous evaluation of risks and the handling of procedures regulating the performance of activities in foreign countries; moreover, the Internal Audit team and the Compliance Team, with whom the localisation team collaborates on an ongoing basis, are further 24

confirmation of an organisational structure heavily focused on ensuring maximum regulatory compliance in the countries of operation. Currency risks A large portion of the contracts, whether for sale or purchase, is agreed in a currency other than Euro. In order to avoid variability with respect to the margins defined at the time of drawing up the contracts, owing to fluctuating exchange rates, and in accordance with the General Electric Group strategies, the Company enters into hedging agreements. The instruments most widely used are forward sales and purchases of foreign currency; just occasionally the Company enters into “put and call option” contracts. The corporate strategy is to hedge almost all machinery contracts and a significant percentage of services contracts, so as to minimise the risk of fluctuations in the exchange rates with respect to the functional currency. Credit risk and financial exposure The risk factor represented by financial exposure during the course of projects commissioned by customers, customer insolvency and failure to recover receivables for the supply of goods and services is mitigated by the Company via multifarious actions and procedures. As regards machinery contracts, almost all the agreements are structured based on milestone advances; in case of the customer's contractual default with regard to payments, the Company normally has the right to suspend contractual activities, in order to limit the financial exposure in carrying out its projects. Financial exposure is also contained by way of bank guarantees or letters of credit. For all machinery customers, a screening of the customer's solvency is also performed. As regards receivables arising from Global Services business, the screening is carried out in the case of sales or services for significant amounts; for sales or services involving small amounts a credit limit is established beyond which the Company stops supplies to its customers. Lastly, customers' financial performance is monitored by both Operations and the Finance function, which review their credit risk rating and the relative risk provision on a quarterly basis. On the other hand, in view of the nature of the

MS5002E Gas Turbine

25

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

customers with whom the Company operates and the stringent control on credit risks, we report that we have not historically incurred major losses on receivables. We lastly mention that a significant portion of the Company's receivables is assigned to the subsidiary GE Capital Funding Services S.r.l.; for a more detailed description of risk management on the part of GE Capital Funding Services S.r.l. reference is made to the specific section regarding the same.

GE Capital Funding Services S.r.l. With reference to the activity carried on by the subsidiary GE Capital Funding Services S.r.l. and the identification and management of related risks, we first of all report that the subsidiary's financial position is adequately sized for the needs arising from the business performed. Moreover, the main risks and uncertainties originating from the current financial market situation are not considered to represent particularly critical elements for the Company's financial equilibrium, in view of its full integration as part of the General Electric Group. As regards credit risk, it should be remembered that our subsidiary deals solely with assignors belonging to the General Electric Group. The corporate functions designated for credit risk management purposes are the Risk and Underwriting function and the Finance function. Since its services are carried on exclusively with companies belonging to the Group, the Company deemed it more efficient to organise its activities by customer rather than by process. This solution enables greater consideration to be given to the specific nature of the different trade sectors in which customer companies operate. Within the scope of the customer-based structure the process of granting and monitoring loans has been divided into the following three phases: a) evaluation and acceptance of the borrower; b) acquisition of the assigned invoices; c) management of the receivable, pre-litigation and litigation. The Company has furthermore adopted risk mitigation techniques, primarily through the definition of credit worthiness limits in respect of individual debtors assigned; in this connection and also in order to comply with Bank of Italy regulations concerning 26

major risks, the Company has entered into an agreement with GE Artesia Bank for the obtainment of an unconditional first demand guarantee to cover exposures towards some important customers of Nuovo Pignone S.p.A.. Insofar as concerns the other subsidiaries of Nuovo Pignone Holding S.p.A., the companies coming under GE Medical Systems Information Technology S.r.l. that operate in the medical sector perform their business primarily within Italy. The main risk factor as regards the achievement of satisfactory results concerns the trend in public spending and the expenditure policy implemented by the Italian Government, upon which the sector demand heavily depends. Furthermore, in view of the specific nature of the sector in which the subsidiaries operate, it is considered that any policy to reduce spending can only affect demand to the extent of a temporary weakness, without undermining on a permanent basis the financial stability and income generating ability of the Company in question. Also as regards GE Transportation Systems S.p.A., no particular elements of risk or uncertainty are identified. The latter operates more and more outside of Italy, in European countries and in the Mediterranean basin; the extent of activities carried out abroad is not however such as to constitute a risk factor. To the contrary, it is thought that the territorial diversification can mitigate the risk deriving from the connection between the Company's performances and the volume of public investments in Italy. We consider that none of the other Subsidiaries has additional risk factors that are worthy of note. More specifically, no exchange rate risks are identified for any of the Group's Companies. Liquidity risk is mitigated for all companies by access to General Electric Group funding. Credit risk is limited, due to the strong presence of customer relationships with public bodies, and is largely managed by GE Capital Funding Services S.r.l..

Treasury shares and shares of parent companies The company does not hold treasury shares or shares of parent companies, even through trustees or nominees. During the year no treasury shares or shares of parent companies were purchased or sold, even through trustees or nominees.

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Steam Turbine Rotor

27

Annual Report of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Management and coordination activities Articles 2497 - 2497 sexies of the Italian Civil Code require companies to indicate in their documents, correspondence, and through registration with a special section of the Companies’ Register, if their activities are subject to management and coordination by other parties. Article 2497 sexies of the Italian Civil Code establishes, on a presumptive basis and unless proved otherwise, that the management and coordination activity is exercised by the entity required to consolidate the company or which in any case controls it pursuant to Article 2359 of the Italian Civil Code. After careful thought and analysis and taking account of the relevant theoretical developments, in view of the ongoing relations with the ultimate parent General Electric Company, it is currently considered appropriate to indicate the latter as being the party exercising management and coordination activity. We particularly point out that the management and coordination activity exercised by General Electric Company consists in the indication of strategic and operational guidelines for the Nuovo Pignone Group, the definition of the internal control and governance models and corporate structures, the issuance of a Code of Ethics to be adopted at Group level (The Spirit & The Letter) and the elaboration of general policies for the management of human and financial resources. General Electric Company's financial statements at 31 December 2008 are set out in the Notes to the financial statements.

million Euro. In order to make better use of the Group's resources and with a view to increasing the funds available to Nuovo Pignone S.p.A. to support the outlays required for the subsidiary's development, again on 27 April the Nuovo Pignone Holding S.p.A and Nuovo Pignone S.p.A. Boards of Directors resolved to transfer the entire investment in GEMSIT from Nuovo Pignone Holding S.p.A. to Nuovo Pignone S.p.A.. The transfer took place via contribution to Nuovo Pignone S.p.A. of the GEMSIT investment. The Nuovo Pignone S.p.A. share capital increase, resolved by the Shareholders at their extraordinary Meeting on 12 June 2009, amounted to 226 million Euro, inclusive of share premium; the contribution was carried out at book values, supported by an appropriate appraisal report drawn up pursuant to and for the purposes of Article 2343-ter of the Italian Civil Code. The Florence Regional Tax Commission has rejected the appeal brought by the Tax Authorities against Nuovo Pignone S.p.A. in May 2008, which referred to the notices of assessment pertaining to the 1998 and 1999 tax periods, issuing on 29 April 2009 an appellate judgment in the Company's favour.

Outlook As in previous years, during the coming financial period the Company’s operations will again be directed towards the management of its investments and performance of financial activities with regard to the same.

Branch offices

Proposals to shareholders

The Company does not have any branch offices.

The financial statements at 31 December 2008, submitted here for your approval, close with a net profit of Euro 182,078,881 Euro, which we invite you to carry forward.

Significant post balance sheet events On 27 April 2009 the Company's Board of Directors approved a resolution to acquire the remaining 13.25% stake in GE Medical Systems Information Technology S.r.l. (GEMSIT), thereby enabling 100% consolidation of the medical segment results within the Nuovo Pignone Group; the acquisition was completed on 22 May 2009 for the overall price of 43 28

FOR THE BOARD OF DIRECTORS The Chairman (signed on the original) Piero Salvadori

GE Oil & Gas

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

g

GE imagination at work

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

BALANCE SHEET Assets (values in Euro) 31.12.2008

31.12.2007

A) Share capital proceeds to be received B) Fixed assets I - Intangible fixed assets 1) Start-up and capital costs 6) Assets under development and payments on account 7) Other

-

-

889.656 1.836

2.755

Total

891.492

2.755

II - Tangible fixed assets 1) Land and buildings 4) Other assets 5) Assets under construction and payments on account Total III - Financial fixed assets 1) Investments in: a) subsidiaries b) associates d) other companies Total

Total fixed assets (B) C) Assets forming part of working capital II - Receivables: 1) Trade receivables - amounts due within one year

30

(values in Euro)

198.740 36.166

218.074 3.467

0

-

234.906

221.541

31.12.2008 4-bis) Tax receivables - amounts due within one year - amounts due after more than one year

4-ter) Deferred tax assets - amounts due within one year 5) Other receivables - amounts due within one year - amounts due after more than one year

Total 1.077.310.161 25.565

2.373.570.025 400.000 25.565

1.077.335.726

2.373.995.590

1.078.462.124

2.374.219.886

III - Financial assets not of a fixed nature 1) Investments in: a) subsidiaries

IV - Liquid funds: 1) Bank and postal accounts Total assets forming part of working capital (C)

14.435

20.831

D) Prepayments and accrued income TOTAL ASSETS

2) Subsidiaries - amounts due within one year

90.045.495

82.010.329

4) Parent companies - amounts due within one year

414.042

2.397

31.12.2007

1.247.239

2.863.901

30.044

30.044

1.277.283

2.893.945

86.334

489.600

194.127.640

7.356

2.981

2.981

194.130.621

10.337

285.968.210

85.427.439

-

60.916.334

-

60.916.334

-

38.859

285.968.209

146.382.632

-

-

1.364.430.334

2.520.602.516

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

BALANCE SHEET Liabilities (values in Euro) 31.12.2008

31.12.2007

I - Share capital

74.880.000

74.880.000

II - Share premium reserve

41.632.676

41.632.676

III - Revaluation reserves: law 413 of 30.12.91

16.476.045

16.476.045

IV - Legal reserve

6)

A) Shareholders' equity

14.976.000

14.976.000

V - Statutory reserves

-

-

VI - Reserve for purchase of treasury shares

-

-

Provision for lump-sum grants pursuant to Art. 55 D.P.R. 917/86

382.525

382.525

Reserve for lump-sum grants pursuant to Art. 55 D.P.R. 917/86

3.356.643

3.356.643

1.605.305

1.605.305

5.344.473

5.344.473

VIII - Retained earnings

439.704.732

1.960.824.903

IX - Net Profit (Loss) for the year

182.078.881

78.879.829

775.092.809

2.193.013.928

Total

3) Other provisions Total

-

4) Due to banks - amounts due within one year 5) Sums due to other financial institution - amounts due within one year - amounts due after more than one year

9) Amounts payable to subsidiaries - amounts due within one year

12) Tax payables - amounts due within one year - amounts due after more than one year

1.357.238

2.445.719

1.357.238

2.445.719

56.402.528

53.578.905

-

117.444.990

-

-

-

117.444.990

-

31.12.2007

-

-

580.550

324.170

315.034.975

270.967.201

-

-

20.954.798

-

-

-

287.861

210.416

77.273.821

62.177

77.561.682

272.593

587.980.287

325.142.869

-

-

TOTAL LIABILITIES

1.364.430.334

2.520.602.516

GUARANTEES AND OTHER MEMORANDUM ACCOUNTS

1.165.217.209

1.153.754.209

- amounts due after more than one year

Total

E) Accrued expenses and deferred income

763

31.12.2008

20.954.798

-

D) Payables 3) Due to shareholders for loans

7) Trade payables - amounts due within one year

14) Other payables - amounts due within one year

B) Provisions for risks and charges 2) tax provision including deferred tax liabilities

ayments on account

11) Amounts payable to parent companies - mounts due within one year

VII - Other reserves

Negative goodwill

(values in Euro)

31

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

INCOME STATEMENT (values in Euro) 2008 A) Production revenues 1) Turnover - goods and services 5) Other revenues and income - grants for operating expenses - other

(values in Euro)

2007

88.237.799

83.900.580

72.121

105.461

72.121

105.461

88.309.920

84.006.041

2008

2007

(7.903.860) (2.823.623) (579.298)

(10.672.715) (2.481.198) (2.854)

(11.306.782)

(13.156.767)

8.979

(10.497)

125.349.186

8.018.097

-

-

-

-

(1.664.741)

-

(1.664.741)

-

(1.664.741)

-

62.226 62.226

23.874 23.874

(1.660) (1.660) 60.566

(1.054) (5.140) (6.194) 17.679

Profit before taxes (A - B +/- C +/- D +/- E) 22) Taxation on profit for the year

207.298.985 (25.220.104)

87.471.218 (8.591.389)

26) Net profit (loss) for the year

182.078.881

78.879.829

17) Interest and other financial expenses - subsidiaries - parent companies - other

17-bis) Exchange rate gains and losses Total

Total (15 + 16 - 17 +/- 17bis) B) Production cost 6) Raw materials, consumables and supplies 7) Services 8) Use of third party assets 10) Amortisation, depreciation and write-downs a) amortisation of intangible fixed assets b) depreciation of tangible fixed assets

(206.963) (3.208.105) (378.385)

(294.561) (2.897.166) (380.926)

19) Write-downs: a) of investments (918)

(31.516)

(6.473)

(4.903)

(7.391)

(36.419)

(123.619) (831.484)

(29.416) (447.048) (485.063)

Total

(4.755.946)

(4.570.599)

Difference between production revenues and cost (A-B)

83.553.974

79.435.442

d) write-down of receivables included under assets forming part of working capital 12) Provisions for risks 14) Other operating costs

C) Financial income and expenses 15) Income from investments: - subsidiaries - other companies

16) Other financial income: a) from other receivables included under fixed assets d) other financial income - subsidiaries - parent companies - other

32

D) Adjustments to financial asset values 18) Revaluations: a) of investments

136.594.737 32.175

19.435.627 -

136.626.912

19.435.627

2.080

-

17.729 268 17.997

1.278.109 471.625 1.749.734

Total adjustments (18 - 19) E) Extraordinary income and expenses 20) Income: - profit on sale of assets - other income 21) Expenses - taxes relating to prior years - other expenses Total extraordinary items (20 - 21)

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

NOTES TO THE FINANCIAL STATEMENTS Basis of presentation Dear Shareholders, The financial statements as at and for the year ended 31 December 2008, comprising the balance sheet, income statement and these notes, were drawn up based on the provisions of the Italian Civil Code and are supplemented for completeness of information by the statement of cash flows and by the reclassified balance sheet and income statement included, in condensed form, in the report on operations. In compliance with the obligation set forth by Legislative Decree 127/91, together with these financial statements, consolidated financial statements have also been drawn up for the Nuovo Pignone Group, of which Nuovo Pignone Holding S.p.A. is the parent company. Hence, for the purpose of these financial statements, we attach group consolidated financial statements at 31 December 2008. Said financial statements are intended to supplement the company’s financial statements with a view to providing adequate information on the financial position and results of both the Company and the Group. These financial statements have been audited by KPMG S.p.A., in accordance with Article 2409-bis of the Italian Civil Code, as per the attached report. Application of the requirements set forth by Articles 2423-bis et seq. of the Italian Civil Code presented no incompatibility with the principle of a true and fair view of the company’s financial position and results and, therefore, recourse to the waivers permitted by Article 2423, fourth paragraph, of the Italian Civil Code has not been necessary. The balance sheet and income statement include the items set forth by the Italian Civil Code, except for the omission of those Arabic numerals and lower-case letters with zero balances in the current and prior years. The notes on the various balance sheet and income statement items are expressed in thousands of Euro, considering the magnitude of the amounts within the general framework of the financial statements. Regarding the significant post balance sheet events, transactions with related parties and other information required by law, express reference is made to the detailed description provided in the report on operations, as attached to the annual financial statements in accordance with Article 2428 of the Italian Civil Code.

Management and Coordination Articles 2497 - 2497 sexies of the Italian Civil Code require companies to indicate in their documents, correspondence, and through registration with a special section of the Companies’ Register, if their activities are subject to management and coordination by other parties. Article 2497 sexies establishes, on a presumptive basis and unless proved otherwise, that the management and coordination activity is exercised by the entity required to consolidate the company or which in any case controls it pursuant to Article 2359 of the Italian Civil Code. After careful thought and analysis and taking account of the relevant theoretical developments, in view of the ongoing relations with the ultimate parent General Electric Company, it is currently considered appropriate to indicate the latter as being the party exercising management and coordination activity. We particularly point out that the management and coordination activity exercised by 33

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

General Electric Company consists in the indication of strategic and operational guidelines for the Group, the definition of the internal control and governance models and corporate structures, the issuance of a Code of Ethics to be adopted at Group level (The Spirit & The Letter) and the elaboration of general policies for the management of human and financial resources. General Electric Company's 2008 financial statements are set out below: (amounts in Millions of Dollars)

STATEMENT OF FINANCIAL POSITION Assets: Cash and equivalent Investment securities Current receivables Inventories Financing receivables - net Other GECS receivables Property, plant and equipment - net Investment in GECS Goodwill Other intangible assets - net All other assets Assets of businesses held for sale Assets of discontinued operations Total Assets

31/12/2008 48,187 41,446 21,411 13,674 365,168 13,439 78,530 81,759 14,977 106,899 10,556 1,723 797,769

Liabilities and equity Short-term borrowings Accounts payable, principally trade accounts Progress collections and price adjustments accrued Dividends payable Other GE current liabilities Long-term borrowings Investment contracts, insurance liabilities and insurance annuity benefits All other liabilities Deferred income taxes Liabilities of businesses held for sale Liabilities of discontinued operations Total Liabilities Minority interest in equity of consolidated affiliates Preferred stock Common stock Accumulated gains (losses) - net Investment securities Currency translation adjustment Cash flow hedges Benefit plans Other capital Retained earnings Less common stock held in treasury Total equity

(3,094) (299) (3,332) (15,128) 40,390 122,123 (36,697) 104,665

Total Liabilities and equity

797,769

STATEMENT OF EARNINGS Revenues Costs and earnings Earnings from continuing operations before Income Statement Provision for income taxes Earnings from continuing operations Earnings (loss) from discontinued operations, net of taxes Net earnings Preferred stock dividends declared Net earnings attributable to common shareowners

34

193,695 20,819 12,536 3,340 18,220 330,067 34,032 64,796 4,584 636 1,432 684,157 8,947 0 702

31/12/2008 182,515 163,374 19,141 (1,052) 18,089 (679) 17,410 (75) 17,335

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

National tax consolidation scheme Starting from 2004, the Company has exercised its option for tax consolidation in its capacity as parent, pursuant to Articles 117 et seq. of the Italian Consolidated Income Tax Act (T.U.I.R.). Adoption of the consolidated tax system allows Nuovo Pignone Holding S.p.A. to offset the company’s positive and negative taxable income for IRES (corporate tax) purposes against those of the subsidiaries having exercised the option, bearing in mind that the tax losses accrued during periods prior to introduction of group taxation can be used only by the companies that have generated them. Apart from the offsetting of positive and negative taxable income pertaining to individual companies exercising the option in question, the national tax consolidation scheme produces other positive effects, such as for example, the removal of certain limitations on the deductibility of financial charges, and the possibility to carry out transfers and contributions of individual assets within a regime of tax neutrality. The relationships arising from participation in the national tax consolidation scheme, as well as the reciprocal responsibilities and related formalities, obligations and benefits, are regulated via specific “National Tax Consolidation Rules”, subscribed to by all companies taking part in the national tax consolidation scheme, which set forth a common procedure for application of normative and regulatory provisions. With regard to the financial transactions, the Rules require the subsidiaries with positive taxable income to transfer to the parent company the financial resources proportionately corresponding to the higher tax due by the latter as a result of their participation in the national tax consolidation scheme; companies with negative taxable income transfer their losses to the parent company, without offsetting, since they are not entitled to any indemnity. In the event that a subsidiary subsequently leaves the national tax consolidation scheme, the transferred losses remain with Nuovo Pignone Holding S.p.A.. The IRES tax related balances correspond to the transactions between the parent company Nuovo Pignone Holding S.p.A. and the consolidated companies. The following companies have elected to participate in the national tax consolidation scheme for 2008: Nuovo Pignone Holding S.p.A. (the parent), GE Transportation Systems S.p.A., GE Medical Systems Italia S.p.A., Bently Nevada Italia S.r.l., GE Capital Funding Services S.r.l, Jenbacher S.r.l, GE Sensing & Inspection Technologies S.r.l., GE Healthcare S.r.l. (formerly Amersham Health S.r.l.), GE Medical Systems Information Technologies S.r.l., GE Healthcare Clinical Systems S.r.l. (formerly Datex- Omheda).

Accounting policies The accounting policies to which reference has been made in drawing up the financial statements are those laid down by the current legal provisions for annual financial statements, taking into consideration the new company law regulations introduced by Legislative Decree no. 6 of 17 January 2003 and subsequent amendments or supplements thereto. Such accounting policies have been interpreted and supplemented by the accounting principles of the Italian Accounting Profession (Consiglio Nazionale dei Dottori Commercialisti e dei Ragionieri), as modified by the Italian Accounting Standard Setter (OIC - Organismo Italiano di Contabilità) in connection with the company law reform, and by the documents issued by the OIC. Individual items have been measured in accordance with to the principle of prudence and on a going concern assumption, taking into account the economic function of the asset and liability components (so-called “substance over form principle”). 35

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

The accounting policies adopted, the most significant of which are described below, have not changed with respect to those used to draw up the annual financial statements at 31 December 2007. Said criteria have been agreed with the Board of Statutory Auditors wherever required by law.

Intangible fixed assets Intangible fixed assets are recorded at acquisition or production cost, including directly attributable ancillary charges. Amortisation, charged directly against the specific items, is systematically calculated on a straight-line basis according to the residual useful life of the fixed assets or the duration of the relative contracts and more specifically: Start-up and capital costs

five years

Industrial patents

twenty years

Leasehold improvements

remaining term of lease or useful life, whichever is shorter

If at the balance sheet date the recoverable amount of individual intangible fixed assets is permanently lower than their net book value, the latter is reduced and the adjustment charged to the income statement as a write-down. In the year during which the reasons for the write-downs carried out cease to apply, the assets are reinstated to the cost value previously recorded and the adjustment is taken to the income statement as a revaluation.

Tangible fixed assets Tangible fixed assets – including grants received from third parties – are recorded at acquisition or production cost, adjusted to reflect revaluations carried out pursuant to law as described below, and comprise related ancillary costs directly attributable to the same. The fixed assets are shown in the financial statements net of accumulated depreciation, calculated by applying the ordinary fiscal rates, which are considered adequate to reduce the value of assets to reflect their remaining useful life; these rates are reduced by 50% for assets purchased during the financial year since their average participation in the production process amounts to half of the year. As regards non-industrial buildings, depreciation is calculated at the rate of 3%, in consideration of the fact that recoverability of the investment is not assured by routine maintenance. The rate applied for the “Other assets” category is 20%. The amounts set aside for depreciation, as described in the section of the notes analysing “Tangible fixed assets”, are charged to the Income Statement under the item “Depreciation of tangible fixed assets”, with a corresponding entry against the relevant balance sheet asset items. Ordinary maintenance and repair expenses are charged to the income statement for the year during which they are incurred, whereas maintenance expenses of an incremental nature are charged to balance sheet assets and depreciated in relation to the residual useful life of the assets to which they refer.

36

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

If at year end the book value of a tangible fixed asset, net of depreciation, is higher than the recoverable amount taking into account its residual useful life, the fixed asset in question is written down and the adjustment is charged to the income statement as a write-down. In the year during which the reasons for such write-down cease to apply, the value of the fixed asset is reinstated and the adjustment is taken to the income statement as a revaluation.

Financial fixed assets Financial fixed assets, consisting of investments, are recorded at acquisition or subscription cost, including any directly ascribable ancillary charges, and are adjusted in the case of impairment losses. In the year during which the reasons for the write-downs cease to apply, the financial fixed assets are revalued and the adjustment is taken to the income statement as a revaluation. The risk, if any, arising from losses in excess of shareholders’ equity is recorded as a liability in a special provision to cover losses of investments under the item “Provision for risks and charges – other provisions”, insofar as future participation in the cover for such losses is anticipated. Investments held for trading are shown in the Balance Sheet as part of working capital.

Receivables and payables Receivables are stated at their estimated realisable value by way of appropriate “bad debt provisions” charged directly against the receivables in question. Payables are shown in the financial statements at their nominal value.

Financial assets not of a fixed nature Securities other than long-term are valued at the lower of cost or realisable value based on the trend in the market.

Foreign currency transactions Foreign currency transactions are recorded using the exchange rate prevailing on the relevant transaction date. Receivables and payables expressed in foreign currency, where not specifically hedged for currency risk purposes, are shown in the financial statements at the exchange rate prevailing at year end.

Liquid funds Liquid funds are recorded at nominal value or estimated realisable value where doubts exist as to the solvency of the debtor or in case of currency restrictions on the part of such debtor’s country of residence.

37

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Prepayment and accrued income, accrued expenses and deferred income Prepayments and accrued income, accrued expenses and deferred income are calculated in order to allocate to the year the relevant portion of costs and income spanning two or more years.

Lump sums granted Lump-sum grants related to plant are recorded in the year in which they are authorised by the relevant granting body, when all the conditions indicated in such authorisation have been satisfied.

Provisions for risks and charges The provisions for risks and charges include specific certain or probable costs and charges, the amount or date of occurrence of which was impossible to determine at the balance sheet date. The provisions in question have been calculated, on an accruals basis, based on a realistic estimate of the charge to be incurred. The following accounting treatment is adopted for utilisation of the provisions for risks and charges: I

in the case of utilisation to cover charges, by recording in the income statement as a reduction against the charges incurred;

I

in the case of unused funds, by release to the income statement item “Other revenues and income”.

Revenues and income, costs and charges Revenues and costs are recorded in the income statement on an accruals basis and in observance of the principle of prudence. Revenues and income, costs and charges are shown net of returns, discounts and rebates and premiums. Dividends are recorded in the income statement in the year during which they are declared by the investee company. The relevant tax credit is recorded in the year during which the dividends are received under the item “Income from investments”. Transactions with companies of the Nuovo Pignone Group and General Electric Group took place at normal market conditions, except as described in the paragraph concerning the “National Tax Consolidation Scheme”.

38

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Memorandum accounts The memorandum accounts include commitments and guarantees granted by the Company directly or indirectly in favour of third parties.

Income taxes Income taxes are calculated based on a realistic forecast of taxable income; the expected payable is recorded under the item “Tax payables” net of advance payments made, tax withholdings pursuant to law and dividend tax credits. Following participation in the national tax consolidation scheme, current IRES (corporate tax) is calculated based on the taxable income of Nuovo Pignone Holding S.p.A., net of any negative taxable income pertaining to the subsidiaries, which is transferred to the parent company without payment of any indemnity. Deferred tax assets and liabilities are calculated on the temporary differences between the carrying value of assets and liabilities recorded in the balance sheet and the corresponding amounts recognised for tax purposes by applying the tax rates for the periods when such temporary differences will reverse. Deferred tax assets are only recorded insofar as there is reasonable certainty that it will be possible to recover them. In accordance with the criterion of loss transfer as part of the national tax consolidation scheme, no provision is made for deferred tax assets on tax losses generated subsequent to participation in the national tax consolidation scheme, insofar as they have been assigned to the national tax consolidation scheme.

39

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

NOTES TO THE FINANCIAL STATEMENTS BALANCE SHEET – ASSETS Share capital proceeds to be received (Item A) The subscribed share capital is fully paid up; hence, there are no share capital proceeds to be received.

Fixed assets (Item B) Intangible fixed assets (Item B. I) These amount to 891 thousand Euro, net of accumulated amortisation of 3,047 thousand Euro, and refer to the capitalisation of costs incurred in connection with the leased premises, owned by the Municipality of Florence, used by the Company as a professional training facility (Florence Learning Center). The following table sets out the changes during 2008. (thousands of Euro) Historical cost A

Amortisation

Total

B

C=A+B

Assets under development and payments on account Opening balance

0

0

0

890

-

890

890

-

890

3,049

(3,046)

3

Changes during the year - Increases - Decreases Closing balance Other – Ancillary costs for lease of office premises Opening balance Changes during the year - Increases

-

- Amortisation

-

-

(1)

(1)

Closing balance

3,049

(3,047)

2

General total

3,938

(3,047)

891

More specifically, the item “Assets under development and payments on account”, amounting to 890 thousand Euro, refers to the capitalisation of costs incurred for the construction of an auditorium at the Florence Learning Center.

40

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Tangible fixed assets (Item B. II) Tangible fixed assets total 235 thousand Euro and comprise the following: (thousands of Euro)

Historical A

Cost Revaluations B

Total C=A+B

Depreciation

Total

D

E=C+D

Item: Land and buildings Opening balance

125

116

241

(23)

218

(1)

(1)

Changes during the year - Depreciation - Disposals Closing balance

(7)

(11)

(18)

118

105

223

(24)

199

(18)

374

0

374

(371)

3

Item: Other assets Opening balance Changes during the year - Purchases

38

38

- Depreciation

38 (5)

(5)

Closing balance

412

0

412

(376)

36

General total

530

105

635

(400)

235

The carrying amount of tangible fixed assets includes monetary revaluations carried out in prior years as indicated below: (thousands of Euro) Revaluation amount Land and buildings

105

Accumulated depreciation - buildings

30

Total

75

At 31 December 2008 there are no mortgages on tangible fixed assets.

Financial fixed assets (Item B. III) Investments (Item B. III. 1) These amount to 1,077,336 thousand Euro (2,373,996 thousand Euro at 31 December 2007), showing a decrease of 1,296,660 thousand Euro compared with the previous year, and are broken down as follows:

41

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Name/ Company name

Registered office

Currency

Nuovo Pignone S.p.A.

Florence

Euro

Corporacion Nuovo Pignone de Venezuela S.A.

Caracas

Nuovo Pignone International S.à r.l.

Nom. val of sh./quotas

Number of shares or quotas

Share/ quota capital

Number of shares or quotas held

Percentage of ownership %

Carrying value (Euro)

2008 net profit/ (loss) (Euro)

Shareholders’ Relevant equity portion of in 2008 shareholders’s (Euro) equity in ‘08 (Euro)

Subsidiaries 0.52

189,614,962

98,599,780

189,614,962

100

735,627,895

211,456,474

1,003,289,152

1,003,289,152

Bs.

1

5,384,432

5,384,432

5,384,432

100

1,860,471

420,271

2,645,101

2,645,101

Luxembourg

Euro

25

3,803,287

95,082,175

3,803,285

99.99

97,384,955

(55,193,219)

98,366,213

98,356,376

GE Transportation Systems S.p.A.

Florence

Euro

0.52

3,000,000

1,560,000

3,000,000

100

32,010,000

16,690,429

23,266,409

23,266,409

GE Medical Systems Information Technologies S.r.l.

Milan (MI)

Euro

4

1,736,137

1

86.75

183,355,573

(14,253,125)

206,225,160

178,900,326

1

80,000

80,000

80,000

100

1,284,267

1,096,583

1,194,081

1,194,081

Bently Nevada Italia S.r.l.

Agrate Brianza (MI) Euro

GE Sensing & Inspection Techn. S.r.l.

Milan

Euro

10,000

1

10,000

1

100

6,206,000

(181,707)

3,887,773

3,887,773

Jenbacher S.r.l.

Bolzano

Euro

129,000

2

258,000

2

100

19,581,000

5,766,907

15,651,760

15,651,760

GE Industrial Financing Ireland Ltd.

Dublin

Usd

1

100

100

100

100

0

(40,614,897)

(54,894)

(54,894)

3,829,736

10,399,019

51,995

Total

1,077,310,161

Other companies Acqua Campania S.p.A.

Naples

Euro

1

4,950,000

4,950,000

24,750

0.5

25,565

Total

25.565

Total

1.077.335.726

Indirect investments Through Nuovo Pignone S.p.A. GE Capital Funding Services S.r.l.

Milan

Euro

1

35,120,000

35,120,000

100

102,000,000

8,152,291

113,000,543

113,000,543

Fondazione Pignone

Florence

Euro

-

-

100,000

100

0

(102,106)

162,303

162,303

Consorzio Tragaz

S. Donato Mil. (MI)

Euro

-

-

51,646

50

25,823

0

51,646

25,823

Total

102,025,823

Through Nuovo Pignone International S. à r.l. Pignone Engineering

London

Lst.

1

70,001

70,001

70,000

99.99

7,403

268,100

9,660,728

9,659,762

Pignone Inc.

New York

Usd

10

200

2,000

200

100

811

-

2,135,906

2,135,906

Total

8,214

Through GE Medical Systems Information Technologies S.r.l. GE Medical Systems Italia S.p.A.

Milan (MI)

Euro

1

5,000,000

5,000,000

5,000,000

100

155,586,504

18,052,639

198,629,567

198,629,567

GE Healthcare Clinical Systems S.r.l. (formerly Datex- Omheda)

Milan (MI)

Euro

1

5,200,000

5,200,000

5,200,000

100

15,983,471

(1,192,210)

14,791,261

14,791,261

GE Healthcare S.r.l. (formerly Amersham Health S.r.l.)

Milan (MI)

Euro

1

5,164,568

5,164,568

5,164,568

100

8,700,000

3,302,525

8,759,135

8,759,135

(55,193,219)

98,366,212

9,837

570,193

976,342

976,342

Total

180,269,975

Through GE Industrial Financing Ireland Ltd. Nuovo Pignone International S.à r.l.

Luxembourg

Euro

25

3,803,287

95,082,175

1

0.01

Total

25 25

Through GE Sensing & Inspection Technologies S.r.l. Everest VIT Italia S.r.l. Total

42

Agrate Brianza (MI) Euro

1

15,000

15,000

15,000

100

1,251,882 1,251,882

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

On 10 January 2008 the Company sold its investment in Thermodyn S.A.S. to GE Energy Holding S.A.S. for the price of 71,300 thousand Euro defined by way of appropriate appraisal, generating a capital gain of 10,383 thousand Euro, which was recorded under the item “Income from investments”. In the financial statements at 31 December 2007, considering the change in the investment’s economic function, the amount in question was reclassified under the item of assets forming part of working capital “Financial assets not of a fixed nature”. On 29 August 2008, the subsidiary Nuovo Pignone S.p.A. resolved a share capital increase (of 129,460 thousand Euro, with an overall share premium of 910,209 thousand Euro) reserved for the contribution by IRMA Service S.p.A. of its business unit concerned with engineering and technical support activities on plant and machinery in the Oil & Gas sector. The contribution was carried out on 24 September 2008 based on the special appraisal drawn up by an expert appointed by the Florence Court. Again on 24 September 2008, Nuovo Pignone Holding S.p.A. sold to IRMA Service S.p.A. its entire shareholding in IRMA Service S.p.A., with purchase by the latter of treasury shares; the price paid, amounting to 721 thousand Euro, generated a capital gain of 321 thousand Euro, which was recorded by Nuovo Pignone Holding S.p.A. under the item "Income from investments". On 27 November 2008, IRMA Service S.p.A. sold to Nuovo Pignone Holding S.p.A. the shares in Nuovo Pignone S.p.A. assigned to IRMA at the time of contribution of the business unit; the price paid for the shares was 2,324 thousand Euro. On 4 December 2008, Nuovo Pignone International S.à r.l. sold its investment in Nuovo Pignone International Scotland (corresponding to 99.81%) to GE Holding Luxemburg S.à r.l.. The sale price (1,246,533 thousand Euro), which was less than the investment's carrying value (1,457,375 thousand Euro), determined a loss of 210,842 thousand Euro for Nuovo Pignone International S.à r.l.. On the same date, Nuovo Pignone International S.à r.l. approved a resolution for full repayement of the share premium reserve. The amount in question, totalling 1,298,547 thousand Euro, was paid as indicated below: I

1,201,613 thousand Euro in favour of GE Industrial Financing Ireland Ltd. (GEIFI), in repayement of the share premium that originated following subscription of the share capital increase approved on 12 March 2007;

I

96,933 thousand Euro in favour of Nuovo Pignone Holding S.p.A., in repayment of the share premium that originated in 1996 at the time of conversion from Dollars to Lire of the share capital pertaining to the company incorporated under Luxembourg law and the increase in share capital fully subscribed by Nuovo Pignone Holding S.p.A..

Again on 4 December 2008, the subsidiary GEIFI, having drawn up interim financial statements, approved a resolution to repay to Nuovo Pignone Holding S.p.A. the capital injection carried out on 12 March 2007, for the amount of 1,199,985 thousand Euro. Summarised below are the changes in investments recorded during the year:

43

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

(thousands of Euro) Historical cost

Subsidiaries Nuovo Pignone S.p.A. Corporacion Nuovo Pignone de Venezuela S.A. Nuovo Pignone International S.à r.l. GE Transportation Systems S.p.A. GE Medical Systems Information Technologies S.r.l. Bently Nevada Italia S.r.l. Jenbacher S.r.l. GE Sensing & Inspection Technologies S.r.l. GE Ind. Financing Ireland Ltd. Total Associates Irma Services S.r.l. Total Other companies EniAcqua Campania S.p.A. Total General total

Write-downs

Net carrying amount

Increases

Decreases

-

Historical cost

Write-downs

Net carrying amount

735,628

-

735,628

1,861 97,384 32,010

-

1,861 97,384 32,010

183,356 1,284 19,581

-

183,356 1,284 19,581

733,304

-

733,304

2,324

1,861 194,318 32,010

-

1,861 194,318 32,010

-

183,356 1,284 19,581

-

183,356 1,284 19,581

-

6,206 1,201,650

-

6,206 1,201,650

-

(1,199,985)

6,206 1,665

(1,665)

6,206

2,373,570

-

2,373,570

2,324

(1,296,919)

1,078,975

(1,665)

1,077,310

400

-

400

-

(400)

-

-

-

400

-

400

-

(400)

-

-

-

26

-

26

-

-

26

-

26

26

-

26

-

-

26

-

26

2,373,996

-

2,373,996

2,324

1,079,001

(1,665)

1,077,336

(96,934) -

(1,297,319)

At 31 December 2007, no write-downs were carried out in respect of investments recorded at such date, since no impairment loss was recognised on any subsidiary. Had the investments in directly controlled companies, at 31 December 2008, been measured using the equity method, the values obtained would have been lower than the carrying amounts, as indicated below. Regarding the investment in Nuovo Pignone S.p.A. the value of the latter, by applying the equity method at 31 December 2008, would have been 595,657 thousand Euro lower (809,660 thousand Euro as at 31 December 2007) with respect to cost. The difference between purchase cost and the value determined using the equity method is mainly due to the reversal of capital gains recognised in the assets – including goodwill – and liabilities contributed by Nuovo Pignone Holding S.p.A. to Nuovo Pignone S.p.A. on 1 July 1998, as confirmed by the sworn appraisals drawn up by an expert appointed by the Chairman of the Florence Court in accordance with Article 2343 of the Italian Civil Code. This difference is deemed recoverable by way of the subsidiary’s expected future profitability. The Report on Operations describes the trend in the subsidiary’s business. With regard to the investment in GE Medical Systems Information Technologies S.r.l. we report that the value at 31 December 2008 obtained by using the equity method would have been 6,246 thousand Euro lower with respect to cost. This difference is not considered to be of a permanent nature since, from the expected cash flow breakdown, as per recent 2009 appraisal, the investment's value above the cost of acquisition. Insofar as concerns the investment in Nuovo Pignone International S.à r.l., the value at 31 December 2008 determined using the equity method would have been 3,871 thousand Euro lower with respect to cost. The difference is due to the translation at end-of-period exchange rates of the currency loans outstanding at the balance sheet date. It is not, however, expected to continue in the long term. The financial statements of the subsidiary GE Industrial Financing Ireland Ltd. (GEIFI) at 31 44

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

December 2008 reported a loss of 40,614 thousand Euro, giving rise to a net deficit of 55 thousand Euro. Bearing in mind the subsidiary's performance and the permanent nature of the losses incurred, the investment's residual carrying value (1,665 thousand Euro) has been written off by appropriating the same amount to a specific provision for the write-down of investments and the sum of 55 thousand Euro has been recognised in the provision for risks and charges, as future cover for the net deficit arising from the loss for the year. As regards the other companies, by applying the equity method a higher valuation is obtained with respect to the carrying value at 31 December 2008.

Receivables (Item C. II) Receivables recorded under assets forming part of working capital, all due within 5 years, amount to 285,968 thousand Euro (85,427 thousand Euro at 31 December 2007) and are broken down as follows: (thousands of Euro) Opening balance

Trade receivables

Original value

Bad debt provision

269

(248)

Changes during the year Net value

Original value

Bad debt provision

Closing balance Original value

Bad debt provision (248)

Net value

21

(7)

262

14

82,010

82,010

8,035

90,045

90,045

-

-

-

-

-

90,045

90,045

Receivables from subsidiaries - commercial - financial Total Receivables from parent companies

82,010

-

82,010

8,035

-

2

-

2

412

414

414

2,864

-

2,864

(1,617)

1,247

1,247

238

(208)

30

-

238

(208)

30

3,102

(208)

2,894

(1,617)

1,485

(208)

1,277

490

-

490

(403)

86

86

7

194,120

194,127

194,127

Tax receivables - within one year - after more than one year Total Deferred tax assets Other receivables - within one year - after more than one year Total TOTAL

7

3

-

3

3

10

3 -

10

194,120

194,130

194,130

85,883

(456)

85,427

200,541

-

285,424

(456)

285,968

Trade receivables (Item C. II. 1) Trade receivables total 14 thousand Euro and refer to receivables connected with training courses organised at the professional training facility.

Receivables from subsidiaries (Item C. II. 2) These total 90,045 thousand Euro (82,010 thousand Euro at 31 December 2007). Receivables from subsidiaries are broken down as follows: 45

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

I

83,490 thousand Euro relates to royalties due from the subsidiary Nuovo Pignone S.p.A. for the licence to use trademarks;

I

35 thousand Euro refers to the chargeback to Nuovo Pignone S.p.A. of an expense incurred on its behalf during 2008;

I

6,499 thousand Euro concerns receivables due from Group Companies participating in the consolidated tax system, broken down by company as follows: (thousands of Euro)

GE Transportation Systems S.p.A.

2,231

GE Capital Funding Services S.r.l.

1,635

GE Healthcare S.r.l.

1,168

GE Clinical System S.r.l.

790

Jenbacher S.r.l.

385

GE Medical Systems Italia S.p.A.

290

Total

I

6,499

21 thousand Euro refers to commercial receivables arising in connection with the chargeback to the following group companies of costs relating to training courses: (thousands of Euro)

Fondazione Pignone

15

GE Medical Systems Italia S.p.A.

3

GE Transportation Systems S.p.A.

3

Total

21

Receivables from parent companies (Item C. II. 4) These amount to 414 thousand Euro and concern receivables from the parent company GE Energy Europe B.V..

Tax receivables (Item C. II. 4-bis) Tax receivables total 1,277 thousand Euro and comprise the following:

46

I

VAT credit resulting from the December monthly settlement (704 thousand Euro);

I

IRAP (regional production tax) receivable (543 thousand Euro) determined based on the Modello Unico 2008 tax return (2007 taxable income);

I

IRPEG (corporate tax) receivable resulting from 1988 tax return (208 thousand Euro), stated in the financial statements net of bad debt provision for the same amount;

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

I

ILOR (local income tax) receivables (principal of 15 thousand Euro plus interest amounting to an additional 15 thousand Euro) resulting from the 1987 tax return of the merged company Turbotecnica S.p.A., reimbursement of which, by way of transfer of government securities, has been requested pursuant to Decree Laws 252/93 and 307/94.

Deferred tax assets (Item C. II. 4-ter) Deferred tax assets (86 thousand Euro) are calculated on the temporary differences between the carrying value of assets and liabilities and the corresponding amounts recognised for tax purposes, by applying the tax rates which are expected to apply in the periods when such temporary differences will reverse. This receivable is recorded insofar as there is reasonable certainty that it will be recoverable in view of expected income prospects. Set out below is the schedule of temporary differences that gave rise to the recording of deferred tax assets: (thousands of Euro) Temporary differences Provision for risks and charges Others Total temporary difference Deferred tax assets

2008

2007

263

1.427

11

146

274

1.573

86

490

Other receivables (Item C. II. 5) These total 194,130 thousand Euro (10 thousand Euro at 31 December 2007) and comprise the following: I

194,018 thousand Euro refers to a loan granted to GE Holding Luxembourg S.à r.l., earning interest at 3.29% and repayable on 4 February 2009; said amount includes both the principal of 194,000 thousand Euro and the portion of interest accrued during the year amounting to 18 thousand Euro;

I

92 thousand Euro refers to the receivable due from the Bari department of the State Provincial Treasury (Tesoreria Provinciale dello Stato) for compensation pertaining to the expropriation of certain pieces of land situated adjacent to the Bari plant;

I

20 thousand Euro mostly refers to payments on account to suppliers and guarantee deposits.

Prepayments and accrued income (Item D) There are no prepayments or accrued income pertaining to 2008.

47

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

BALANCE SHEET - LIABILITIES Shareholders' equity (Item A) This item, standing at 775,093 thousand Euro, shows an overall decrease of 1,417,921 thousand Euro from the previous year, as a result of dividends distributed amounting to 1,600,000 thousand Euro, less the 2008 net profit of 182,079 thousand Euro. (thousands of Euro) Share capital

Balance at 31 December 2006

Reserves*

Retained earnings

78,429

74,880

Allocation of 2006 net profit**

Net profit/(loss) for the year

Total

1,851,387

109,438

2,114,134

109,438

-109,438

-

78,880

78,880

78,880

2,193,014

-78,880

-78,880

2007 net profit for the year Balance at 31 December 2007

74,880

78,429

1,960,825

Distribution of 2007 net profit*** Distribution of retained earnings***

-1,521,120

2008 net profit for the year Balance at 31 December 2008

74,880

78,429

439,705

-1,521,120 182,079

182,079

182,079

775,093

* The reserves, as shown in the Balance Sheet, are made up of the following: - Share premium reserve

Euro 41,633

- Revaluation reserve: Law 413 of 30.12.91

Euro 16,476

- Legal reserve

Euro 14,976

- Other reserves

Euro

- Total

Euro 78,429

5,344

** Shareholders' Meeting dated 29 June 2007 *** Shareholders' Meeting dated 27 June 2008

Regarding the components of shareholders' equity, we report as follows:

Share capital (Item A. I) The share capital consisting of 144 million ordinary shares, each with a nominal value of Euro 0.52, is fully paid up. Shares are registered and carry equal voting rights. At 31 December 2008 the Company's shareholders were as follows:

Euro

GE Energy Europe B.V. GE Financing Luxembourg S.à r.l. Other shareholders Total

48

Shares

Nominal value Euro

%

71,266,495

137,050,952

0.52

95.18

3,595,800

6,915,000

0.52

4.80

14,705

34,048

0.52

74,880,000

144,000.000

0.02 100.00

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Nature/Description

Amount

I - Share capital

74,880

II - Share premium reserve

41,633

Possibility of use (*)

Available portion

Utilisation in 3 prior years to cover losses

Utilisation in 3 prior years for other reasons

-

0

0

A, B, C

41,633

0

0

III - Revaluation reserve: Law 413 of 30.12.91

16,476

A, B, C

16,476

0

0

IV - Legal reserve

14,976

A, B, C

-

0

0

382

A, B, C

382

0

0

VII - Other reserves Pursuant to Art. 55 D.P.R. 917/86 Pursuant to Art. 55 D.P.R. 917/86

3,357

A, B, C

3,357

0

0

Negative goodwill

1,605

A, B, C

1,605

0

0

VIII - Retained earnings

439,705

A, B, C

439,705

0

1,600,000

IX - Net profit for the year

182,079

A, B, C

182,079

Total

775,093

685,237

1,600,000

(*) A: for share capital increases; B: to cover losses; C: for dividends

Share premium reserve (Item A. II) The share premium reserve stands at 41,633 thousand Euro and refers to the share premium paid by shareholders, in connection with the share capital increase carried out during 1990. This reserve is distributable, pursuant to Article 2431 of the Italian Civil Code, since the legal reserve has reached the minimum of one fifth of share capital as required by Article 2430 of the Italian Civil Code.

Revaluation reserve: Law 413 of 30.12.1991 (Item A. III) The revaluation reserve stands at 16,476 thousand Euro and includes the revaluation carried out in accordance with Law 413/1991, net of substitute tax payable on the revaluation in question amounting to 3,139 thousand Euro. It should be mentioned that during 1995 - in accordance with Article 22, second paragraph, of Decree Law 41/95 converted into Law 85/95 - the Company released this reserve.

Legal reserve (Item A. IV) This stands at 14,976 thousand Euro and corresponds to one fifth of share capital as laid down by Article 2430 of the Italian Civil Code.

Other reserves (Item A. VII) Other reserves comprise the following: Provision for lump-sum grants pursuant to Article 55 D.P.R. 917/86 This stands at 382 thousand Euro and refers to the lump-sum grants obtained by the Company prior to 1 January 1993 (under Article 18, Law 675 of 12.8.1977). In case of distribution, this provision forms part of the Company’s taxable income. 49

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Reserve for lump-sum grants pursuant to Article 55 D.P.R. 917/86 This stands at 3,357 thousand Euro and concerns 50% of the capital grants obtained on or after 1.1.1993. In case of distribution, this reserve forms part of the Company’s taxable income. Negative goodwill This amounts to 1,605 thousand Euro and concerns the negative goodwill arising from the Turbotecnica S.p.A. merger carried out in 1997.

Retained earnings (Item A. VIII) Retained earnings stand at 439,705 thousand Euro, with a decrease of 1,521,120 thousand Euro following the distribution of dividends approved by the Ordinary Shareholders' Meeting on 27 June 2008. The item includes earnings generated by the “elimination of fiscally-driven entries” (disinquinamento fiscale) with regard to the investment in Nuovo Pignone S.p.A., amounting to 383,082 thousand Euro; it should be remembered that, in case of distribution to shareholders, these earnings will form part of the Company’s taxable income. No provision has been made for deferred taxes since the Company does not intend to distribute dividends to shareholders beyond the reserves already freely available.

Provisions for risks and charges (Item B) This item, amounting to 1,357 thousand Euro, comprises the provision for charges connected with litigation (1,302 thousand Euro) and the provision to cover subsidiaries' losses (55 thousand Euro). Changes in the provision during the year were as follows: (thousands of Euro) Opening balance

Utilisation for charges

Release of unused provision

Sundry utilisations

Allocations during the year

Closing balance

2,446

(1,267)

-

123 55

55

(1,267)

-

178

1,357

Provision for risks and charges - for litigation - to cover losses on investments Total

2,446

1,302

Other provisions (Item B. 3) The provision for litigation, which stands at 1,302 thousand Euro, is made up of the following: I

50

1,040 thousand Euro relating to potential charges connected with the preliminary assessment report drawn up on 29 September 2000 by the Florence Tax Police Regional Headquarters (Comando del Nucleo Regionale di Polizia Tributaria) upon completion of a general inspection for VAT, direct taxation and other tax purposes, initiated on 23 February 2000 in respect of the 1995, 1996, 1997 and 1998 tax years. The three notices of assessment relating to the periods 1995, 1996 and 1997, served on 15 October 2001 as a result of the aforesaid inspection, were settled in May 2003,

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

in accordance with Articles 15 and 16 of Law 289 of 27 December 2002 (2003 Finance Act). The notice of assessment relating to 1998 was served on 13 December 2005 and against such notice the Company filed an appeal with the Florence Provincial Tax Commission, which accepted the appeal and on 21 March 2007 issued a first level judgment in favour of the Company. On 26 May 2008, the Fiscal Revenues Agency appealed against this judgment. The Florence Regional Tax Commission rejected this appeal, issuing on 29 April 2009 an appellate judgment in the Company's favour. The sums corresponding to the observations that emerged, which are not covered by such provision, refer to liabilities that, whilst of a not insignificant nature, are nevertheless considered remote. I

262 thousand Euro relating to potential risks associated with disputes initiated by former employees and third parties.

The utilisation for charges, in the amount of 1,267 thousand Euro, deducted from the item “Other operating costs”, was carried out following settlement, during the course of the year, of a dispute with INSO S.p.A., a company previously controlled by Nuovo Pignone Holding S.p.A.. The amount of 123 thousand Euro was set aside to adjust the provision for ongoing risks in connection with disputes initiated by third parties. The provision to cover losses on investments was accrued to cover the net deficit resulting from losses for the year recognised at 31 December 2008 in the financial statements of the subsidiary GE Industrial Financing Ireland Ltd..

Payables (Item D) Payables, all of which are due within 5 years, amount to 587,980 thousand Euro and comprise the following: (thousands of Euro) Payables at 31 December 2007 Due to shareholders for loans Due to banks

53,579 0

Amounts payable to subsidiaries Tax payables Other payables Total

2,823

Payables at 31 December 2008 56,402

1

1

117,445

117,445

324

257

581

270,967

44,068

315,035

Sums due to other financial institutions Trade payables

Changes during the year

0

20.954

20,954

273

77,289

77,562

325,143

262,837

587,980

Due to shareholders for loans (Item D. 3) This item refers to a loan of 56,403 thousand Euro received from General Electric Energy Europe B.V., repayable on 22 June 2009 and bearing interest at the rate of 4.19%. The amount stated in the balance sheet includes the principal of 56,338 thousand Euro and the interest accrued for the period amounting to 65 thousand Euro. 51

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Due to banks (Item D. 4) These are amounts payable to Banca Unicredito for charges pertaining to the fourth quarter of 2008.

Sums due to other financial institutions (Item D. 5) These total 117,445 thousand Euro and refer to a loan received from GE Service Luxembourg, repayable on 4 June 2009 and bearing interest at the rate of 4.89%. The amount stated in the balance sheet includes the principal of 117,000 thousand Euro and the interest accrued for the period amounting to 445 thousand Euro.

Trade payables (Item D. 7) These total 581 thousand Euro and mainly refer to the Florence Learning Center operating costs.

Amounts payable to subsidiaries (Item D. 9) This item amounts to 315,035 thousand Euro and comprises the following: I

Financial payables totalling 311,647 thousand Euro due to the subsidiary Nuovo Pignone S.p.A., relating to the centralisation of treasury operations (cash-pool), namely the concentration of participating company current accounts so as to optimise the management of financial resources within the General Electric Group. This figure includes both the current account balance in favour of Nuovo Pignone S.p.A. amounting to 310,152 thousand Euro, and the sum set aside to cover the related interest expense amounting to 1,495 thousand Euro;

I

2,261 thousand Euro for payables due to the Group companies participating in the consolidated tax system, broken down between the following group companies: (thousands of Euro)

GE Medical Systems Italia S.p.A. Bently Nevada Italia S.r.l. GE Sensing & Inspection Technologies S.r.l. Total

52

1,865 339 57 2,261

I

Commercial payables totalling 1,125 thousand Euro due to the subsidiary Nuovo Pignone S.p.A., of which 890 thousand Euro refers to the chargeback of costs incurred for the construction of an auditorium at the Florence Learning Center and 235 thousand Euro concerns the chargeback of costs connected with staff seconded to Nuovo Pignone Holding;

I

2 thousand Euro referring to the amount payable to Bently Nevada Italia S.r.l. for reimbursement of part of the dividends declared in 2008 and overpaid by the latter.

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

The transactions with companies of the General Electric group and the Nuovo Pignone Group are settled at normal market conditions, with the exception of those described in the section relating to the national tax consolidation scheme.

Tax payables (Item D. 12) This item, totalling 20,954 thousand Euro, primarily concerns the tax burden pertaining to the year.

Other payables (Item D. 14) These total 77,562 thousand Euro and are broken down as follows: I

76,833 thousand Euro referring to the sum due to GE Holding Luxembourg S.à r.l. for dividends approved by the Shareholders' Meeting on 27 June 2008 and not yet paid to the shareholder;

I

441 thousand Euro referring to amounts due to minority shareholders for dividends approved by the Shareholders' Meeting during the years 2004-2005 and 2008 (after more than one year);

I

288 thousand Euro primarily comprising amounts payable to consultants and professionals and fees due to the Board of Statutory Auditors (after more than one year).

Accrued expenses and deferred income (Item E) There are no accrued expenses or deferred income pertaining to 2008.

Memorandum accounts The memorandum accounts report the Company's guarantees and commitments and are broken down as follows: Bank guarantees granted at 31 December 2008: I

Letter of comfort for 1,082,612 thousand Euro in favour of Nuovo Pignone S.p.A.;

I

Letter of comfort for 25,000 thousand Euro in favour of GE Medical Systems Italia S.p.A.;

I

Letter of comfort for 50,000 thousand Euro in favour of GE Transportation Systems S.p.A.;

I

Letter of comfort for 4,000 thousand Euro in favour of GE Healthcare S.r.l.;

I

Letter of comfort for 3,605 thousand Euro in favour of Nuovo Pignone S.p.A. on behalf of the company Inso S.p.A..

At 31 December 2008 the following bank guarantee is reported in favour of the Company: I

Letter of comfort for 11,565 thousand Euro on behalf of the company Inso S.p.A.. 53

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

INCOME STATEMENT Prior to proceeding with our examination of individual items, we mention that, in accordance with Article 2428, first paragraph, of the Italian Civil Code, our notes to the general trend in costs and revenues are set forth in the Report on Operations. Owing to the detailed description of positive and negative income components provided in the income statement and to the above notes on the items of the balance sheet, it is possible to limit the comments set out below to just the main items.

Production revenues (Item A) Production revenues amount to 88,310 thousand Euro, made up of the following:

Turnover – goods and services (Item A. 1)

88,238 thousand Euro

This item essentially comprises: I

royalties received from the subsidiary Nuovo Pignone S.p.A. in relation to the use of trademarks (83,490 thousand Euro), covered by a specific agreement based on appropriate appraisal report;

I

revenues connected with professional training courses (3,490 thousand Euro);

I

revenues deriving from the rental of classrooms at the Florence Learning Center (1,258 thousand Euro).

Other revenues and income (Item A. 5)

72 thousand Euro

This item refers to the capital gain deriving from the expropriation of some land in Bari.

Production cost (Item B) Production cost totalling 4,756 thousand Euro is summarised as follows:

Raw materials, consumables and supplies (Item B. 6)

207 thousand Euro

This item includes the general materials purchased during the year.

Services (Item B. 7)

3,208 thousand Euro

These comprise the costs incurred for consulting and professional services, costs relating to staff on secondment and costs pertaining to the operation and maintenance of the Florence Learning Center. The costs for consulting and professional services include Statutory Auditors’ fees amounting to 61 thousand Euro. No fees are envisaged for the Directors of the Company. 54

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Use of third party assets (Item B. 8)

378 thousand Euro

This item includes the costs relating to the Florence Learning Center lease payments and the rental of hardware, software and office machinery.

Amortisation, depreciation and write-downs (Item B. 10)

7 thousand Euro

For a more detailed description of this item, reference is made to the indications given in the notes on the balance sheet asset items “Intangible fixed assets”, “Tangible fixed assets” and “Trade receivables”.

Provision for risks (Item B. 12)

124 thousand Euro

For a description of this item, reference is made to the indications given in the notes on the balance sheet liability item “Provisions for risks and charges”.

Other operating costs (Item B. 14)

831 thousand Euro

The item “Other operating costs” includes settlements and lawsuits (1,352 thousand Euro) net of the provision utilised (1,267 thousand Euro), the amount charged by the subsidiary Nuovo Pignone S.p.A. for the handling of centralised group services (442 thousand Euro), non-deductible VAT (274 thousand Euro), indirect taxes and dues (20 thousand Euro) and municipal property tax (10 thousand Euro).

Financial income and expenses (Item C) This item totals 125,349 thousand Euro and is broken down as follows:

Income from investments (Item C. 15)

136,627 thousand Euro

Income from investments comprises the amount of 125,922 thousand Euro pertaining to dividends declared and paid by the following companies: (thousands of Euro) Nuovo Pignone International S.à r.l.

108,000

GE Transportation Systems S.p.A.

15,057

GE Industrial Financing Ireland Ltd.

1,628

Bently Nevada Italia S.r.l.

1,204

ENI Acqua Campania Total

33 125,922

The item also includes capital gains from disposals amounting to 10,705 thousand Euro, of which 10,383 thousand Euro concerned the sale of the investment in Thermodyn S.A.S. and 321 thousand Euro related to the sale of the investment in IRMA Service S.r.l.. 55

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Other financial income (Item C. 16)

20 thousand Euro

This item comprises interest income from General Electric Group Companies deriving from the portion of interest on the loan granted to GE Holding Luxembourg S.à r.l. (18 thousand Euro) and interest income accrued on the compensation received by the Company following the expropriation of land (2 thousand Euro).

Interest and other financial expenses (Item C. 17)

11,307 thousand Euro

This item includes the following interest expenses and financial charges: (thousands of Euro) Subsidiaries Interest expense on payables to Nuovo Pignone S.p.A. for cash-pool transactions

7,904

Total

7,904

Parent companies Interest expense on loan from GE Energy Europe B.V.

2,824

Total

2,824

Others Interest expense on loan from GE Service Luxembourg S.à r.l.

445

Interest expense on loan from Thermodyn S.A.S.

72

Accrual to the provision to cover of GE Industrial Financing Ireland Ltd. losses

55

Interest expense on payables to others Total

Exchange rate gains and losses (Item C. 17-bis)

7 579

9 thousand Euro

The net exchange rate gain is made up of the following: (thousands of Euro) Exchange rate gains

55

Exchange rate losses

(46)

Total

9

Adjustments to financial asset values (Item D) These amount to 1,665 thousand Euro and comprise the following:

Write-downs of investments (Item D. 19)

1,665 thousand Euro

The item includes the write-down of the investment in GE Industrial Financing Ireland Ltd. as already commented under the item “Investments”.

56

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

Extraordinary income and expenses (Item E) This item totals 61 thousand Euro and is made up of the following:

Extraordinary income (Item E. 20)

62 thousand Euro

The amount mainly refers to tax reimbursements received during the year.

Extraordinary expenses (Item E. 21)

1 thousand Euro

These refer to charges for accounting adjustments.

Taxation on profit for the year (Item E. 22) Income taxes amount to 25,220 thousand Euro and comprise the following: Current taxes

24,817

Deferred taxes

403

Total

25,220

Set out below is a breakdown of the difference between the theoretical tax rate and the effective tax rate: (thousands of Euro) IRES

Profit before taxes as per financial statements

207,299

Temporary differences deductible in future years

Permanent differences Taxable income

Total

207,299 (123.745) (a)

Adjustment of taxable income for IRAP purposes Reversal of temporary differences recorded in prior years

IRAP

124

124

(1,387)

(1,285)

(128,244) (b) 77,792

957 83,350

Tax loss carryforwards Taxable income net of loss carryforwards

77,792

Theoretical tax rate

27.50%

3.90%

21,393

3,251

Current taxes

10,32%

1.57%

Deferred taxes

Effective tax rate

357

46

Foreign taxes

173

Total taxes for the year as per the income statement

21,923

24,643 403 173

3,297

25,220

(a) Includes extraordinary income and expenses, financial income and expenses and adjustments to financial asset values (b) Includes reduction of 125,907 thousand Euro connected with intra-community dividends

FOR THE BOARD OF DIRECTORS The Chairman (signed on the original) Piero Salvadori 57

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

STATEMENT OF CASH FLOWS (values in Euro)

Net profit (loss) for the year Ordinary amortisation and depreciation Utilisation of lump-sum grants Changes in provisions for risks and charges Changes in bad debt provision Write-down of investments Capital losses/(gains) on divestments

2008

2007

182.079 7 0 -1.088 0 1.665 -72

78.880 36 0 -620 29 0 0

Opening Changes during balance the year

Closing balance

Analysis of net financial debt (net available funds Short-term financial payables

(318.148)

(244.148)

(562.296)

Short-term financial receivables

0

194.018

194.018

Financial receivables relating to distribution of share premium

0

0

0

39

(39)

0

(318.109)

(50.169)

(368.278)

Internally generated cash flow from operations (self-financing) (a)

182.590

78.326

Trade and other receivables Trade and other payables Financial assets not of a fixed nature

-6.523 18.690 60.916

21.109 -11.392 -60.916

Net short-term available funds (debt)

Cash flow relating to working capital (b)

73.082

-51.199

Medium/long-term financial payables

0

Net medium/long-term available funds (debt)

0

0

0

(318.109)

(50.169)

(368.278)

Liquid funds

Cash flow from operating activities (c=a+b)

255.673

27.127

Investments : Intangible fixed assets Tangible fixed assets Investments

-890 -38 -2.324

0 0 -1.146.784

Cash flow used in investing activities (d)

-3.252

-1.146.784

Disinvestments: Intangible fixed assets Tangible fixed assets Investments

0 90 1.297.319

0 0 0

Cash flow from disinvestments (e)

1.297.409

0

Cash flow used in investing activities (f=d+e)

1.294.158

-1.146.784

0

0

Distribution of dividends

-1.600.000

0

Equity related cash flow (g)

-1.600.000

0

-50.169

-1.119.657

-318.109

801.548

-50.169

-1.119.657

-368.278

-318.109

Reimbursement of reserve for lump-sum grants

Net cash flow for the year (h=c+f+g) Net available funds (net financial debt) at beginning of year Net cash flow for the year Net available funds (net financial debt) at year end

58

Total

0

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Assets Reg. code Trade receivables Bently Nevada (UK) Ltd. Bently Nevada Llc Computacenter Ag &Co Ohg GE Capital Bank Ltd. GE Capital Services Ltd. GE Aircraft Engine Services Ltd. GE Appliances GE Betz (Holdings) Ltd. GE Betz Gmbh GE Capital Assurances GE Capital Bank Danmark GE Capital Bilfinans Ab GE Capital Equipment Finance Ab GE Capital Equipment Finance S.p.A. GE Capital Finance S.p.A. GE Capital Gmbh GE Capital Services GE Capital Services Europe GE Capital Services Inc. GE Capital Woodchester Ltd. GE El Seif Medical Services Limited GE Energy Germany Gmbh GE Energy Products France Snc. GE Energy Products Germany Gmbh & Co. GE Energy Services (Uk) Ltd. GE Factofrance GE Health Care GE Healthcare Bio Sciences S.A. GE Hungary Zrt GE Indusrial Systems GE Industrial Systems GE Information Services GE Information Services S.p.A. GE International Inc. GE International Inc. Dubai GE International Power Systems GE Jenbacher Aktiengesellschaft GE Jenbacher Gmbh & Co Ohg GE Lighting S.r.l. GE Medical Systems Israel GE Medical Systems GE Medical Systems Asia GE Medical Systems Information Techn GE Medical Systems It GE Medical Systems Ltd. GE Medical Systems Sa GE Money Bank GE Plastics Ltd. GE Power Controls

038037 038030 040169 040002 040009 036765 042846 042029 042077 042043 042053 040003 040223 039003 039021 040018 040185 040282 040258 040207 042138 042079 038199 038253 038288 042116 042067 042157 038066 042854 042862 042404 041017 042000 042006 038393 038045 038089 041068 042059 042008 042803 042781 042026 042722 042234 040047 038002 042838

Amount

945,37 8.690,02 2.764,88 24.164,06 2.768,36 7.424,52 2.899,56 980,00 300,00 2.438,00 1.629,60 336,86 2.910,02 394,87 840,00 5.160,00 2.782,73 2.899,56 8.581,85 608,38 600,00 750,00 2.765,49 2.111,44 3.487,97 1.064,40 2.540,00 1.198,00 2.780,00 4.554,46 2.764,88 603,69 2.507,53 2.825,00 258,22 608,38 1.100,00 5.400,00 18.034,68 4.444,00 2.237,53 1.747,44 1.665,30 3.181,48 6.387,51 14.018,27 997,17 1.395,40 2.899,56

59

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Assets

GE Power Controls Belgium Bvba GE Power Systems GE Real Estate France GE Smallworld Spain S.r.l. GE Specialty Chemicals GE Trading Company General Electric Company General Electric Company General Electric International Inc. General Electric Meelsa Service Cent General Electric Plastics B.V. General Electric Services (Bermuda) International General Electric Usa Nbc Universal Global Networks Espana Nbc Universal Global Networks Limite Panametrics Gmbh Picl Egypt Corporation Ltd. - Egypt B Renta Inmobiliairia S.A. Tip Services BV. VetcoGray Uk Ltd. Woodward Governor Nederland B.V. Algesco S.p.A. Branch Of Ge Vietnam Limited In Haip GE Rus Llc Ste Martiniquaise De Financement Domenia Credit Ifn S.A. Gen Nigeria Limited GE Capital Services S.r.l. GE Money Bank Ab GE Money Bank General Electric International Opera Algesco S.p.A. GE Healthcare Finland Oy

Reg. code

Amount

042114 038491 040134 042069 042200 042251 036757 038059 041003 038032 042692 042271 038458 042278 042183 042103 038190 040021 042050 038168 993069 038127 038224 042274 042334 042336 042561 039004 040042 040047 034004 034009 042124

467,20 2.522,38 2.828,37 540,00 4.423,81 595,46 7.354,16 3.097,21 4.488,00 2.118,00 557,01 10.967,47 3.224,06 750,00 5.772,00 900,00 1.100,00 1.390,00 1.600,00 7.252,20 1.741,96 2.750,00 1.600,00 2.520,00 2.760,00 2.520,00 2.200,00 1.620,00 6.560,00 750,00 6.400,00 3.900,00 2.710,00 274.425,73

Receivables from subsidiaries Nuovo Pignone S.p.A. GE Transportation Systems S.p.A. GE Capital Funding Services S.r.l. GE Healthcare S.r.l. GE Healthcare Clinical Systems S.r.l. Jenbacher S.r.l. GE Medical Systems Information Technologies S.r.l. Fondazione Pignone GE Medical Systems Italia S.p.A.

030023 041190 041012 042178 041015 035001 041025

83.525.313,88 2.233.614,03 1.635.356,03 1.167.898,02 790.000,21 384.889,77 290.025,12 15.494,40 2.904,00 90.045.495,44

Receivables from parent companies GE Energy Europe B.V.

038300

414.041,64 414.041,64

60

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Liabilities Reg. code Due to shareholders for loans GE Energy Europe B.V.

038300

Amount

(56.402.527,96) -56.402.527,96

Sums due to other financial institutions GE Service Luxembourg S. à r.l.

(117.444.990,00) -117.444.990,00

Trade payables GE Energy Services

038474

(4.316,74) -4.316,74

Amounts payable to subsidiaries Nuovo Pignone S.p.A. GE Medical Systems Italia S.p.A. Bently Nevada Italia S.r.l. GE Sensing & Inspection Technologies S.r.l.

030023 037003

(312.772.116,80) (1.865.375,93) (340.319,07) (57.163,00) -315.034.974,80

Other Payables GE Financing Luxembourg S. à r.l. GE Energy Europe B.V.

038300

(76.833.333,33) (411.644,44) -77.244.977,78

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

Production revenues Nuovo Pignone S.p.A. Algesco S.p.A. Altair Filter Technology Ltd. Ambassador Medical Llc Amersham Biosciences Ab Amersham Health As B H A Group Inc. Bently Nevada Llc Bently Nevada S. à r.l. Bently Nevada Saudi Arabia Ltd. Bha Group Gmbh Bha Purfilter Sl Branch Of Ge Vietnam Limited In Haiphong Budapest Hitel- Es Fejlesztesi Bank Nyilvanosan Mu Business News (Europe) Datex-Ohmeda B.V. Disko Leasing Gesellschaft Mit Beschränkter Haftu Domenia Credit Ifn S.A. GE Capital Administrative Services, Inc. GE Capital Global Consumer Finance Ltd. GE Healthcare Holding Me Sa (Dubai Branch) GE Aircraft Engine Services Ltd. GE Aircraft Engines Holdings, Inc.

Reg. code

Amount

030023 034009 038125 042254 042128 042181 038194 038030 038088 038064 038152 038115 038224 040033 042213 042187 040075 042336 042322 040073 042297 036765 042256

86.512.849,36 6.650,00 3.170,00 17.740,00 4.320,00 6.420,00 3.950,00 2.600,00 900,00 7.900,00 2.370,00 5.555,00 1.600,00 7.864,00 3.770,00 2.070,00 6.050,00 2.520,00 1.200,00 750,00 25.460,00 10.400,00 6.930,00

61

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

GE Asset Management Ltd. GE Aviation Systems Ltd. GE Betz (Holdings) Ltd. GE Betz B.V. GE Betz Gmbh GE Betz Italia S.r.l. GE Betz South Africa (Pty) Ltd. GE Betz S.r.l. GE Business Services Gmbh GE Capital Bank Ltd. GE Capital Bank S.A. GE Capital B.V. GE Capital Corporation (Bittern Gp) Ltd. GE Capital Corporation (Funding) Ltd. GE Capital Equipement Finance GE Capital Equipment Finance Ab GE Capital Equipment Finance Holdings GE Capital Europe Ltd. GE Capital Finance B.V. GE Capital Finance S.p.A. GE Capital Funding Services S.r.l. GE Capital Largo Plazo, S.L. GE Capital Services GE Capital Services S.r.l. GE Capital Servizi Finanziari S.p.A. GE Capital Woodchester Ltd. GE Commercial Aviation Services Ltd. GE Commercial Finance Fleet Services Ltd. GE Commercial Finance Ltd. GE Commercial Finance Real Estate GE Commercial Financial Services Real Estate Prope GE Corporate GE Deutschland Holding Gmbh GE Druck Holdings Ltd. GE El Seif Medical Services Limited GE Energy & Environmental Research Corporation GE Energy (Norway) As GE Energy (Switzerland) Ag GE Energy Europe B.V. GE Energy Germany Gmbh GE Energy Optimization Controls GE Energy Parts, Inc. GE Energy Power Systems Espana S.A. GE Energy Product France S.n.c. GE Energy Services GE Europe Nv GE European Equipment Finance Ltd. GE Factofrance GE Fanuc Automation Solutions GE Fanuc Automation Solutions Europe S.A. GE Fanuc Automation Solutions Europe Sa Zweigniede GE Fanuc Intelligent Platforms Europe S.A. GE Financial Markets GE Gas Turbines Llc

62

Reg. code

Amount

042327 038217 042029 042078 042077 041001 042311 041002 042230 040051 040048 040063 040043 040057 040023 040223 040067 040035 040049 039021 039012 042117 040185 039004 039000 040207 040050 040100 040034 040081 042261 042003 042307 042220 042138 042330 038326 038118 038300 042079 038209 038440 038046 038199 038474 042084 042020 042116 041019 042013 042288 042282 040072 038555

2.650,00 9.040,00 5.400,00 2.770,00 1.654,56 600,00 3.550,00 3.882,50 300,00 19.530,00 13.190,00 1.100,00 10.335,00 1.100,00 21.000,00 1.165,00 800,00 13.387,10 2.520,00 1.466,00 966,00 2.250,00 5.656,00 3.115,00 2.770,00 16.620,00 4.550,00 750,00 4.320,00 2.770,00 16.590,00 18.950,00 600,00 9.260,00 8.200,00 750,00 1.500,00 1.500,00 11.570,00 1.950,00 750,00 1.600,00 2.050,00 7.850,00 37.520,00 10.280,00 22.390,00 2.650,00 600,00 2.150,00 800,00 735,00 3.670,00 2.200,00

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement Reg. code GE Global Research Zn Ge Deutschland Holding Gmbh GE Healthcare Bio Sciences S.A. GE Healthcare B.V. GE Healthcare Clinical Systems GE Healthcare Clinical Systems Sl GE Healthcare Europe Gmbh GE Healthcare Finland Oy GE Healthcare Ltd. GE Healthcare S.r.l. GE Holdings Magyarorszag Vagyonkezelo Es Szolgalta GE Hungary Co.Ltd. GE Hungary Zrt GE India Exports Private Limited GE Industrial Belgium Bvba GE Inspection & Repair Services Ltd. GE Inspection Technologies Ahrensburg Gmbh & Co Kg GE Inspection Technologies Gmbh GE Inspection Technologies Scs GE International Holdings Inc. GE International Inc. GE International Inc. GE International Inc. Dubai GE Ionics, Inc. GE Jenbacher Gmbh & Co Ohg GE Leasing Italia S.p.A. GE Lighting Hungary Co. GE Lighting S.r.l. GE Lisca Ag GE Marmara Technology Center Muhendislik Hizmetler GE Med Syst Ultras & Primary Care Diag GE Medical Systems Deutschland Gmbh & Co Kg GE Medical Systems Information Technologies Gmbh GE Medical Systems Information Technologies Sw Gmb GE Medical Systems Italia S.p.A. GE Medical Systems Ltd. GE Medical Systems Middle East GE Medical Systems Polska Sp Z O O GE Medical Systems S.A. GE Money Bank GE Money Bank Ab GE Money Nordic Holding Ab GE Money Servicing Ltd. GE Nuclear Energy GE Oil & Gas GE Oil And Gas Inc. GE Oil And Gas Operations, Llc GE Pacific Pte Ltd. GE Packaged Power, Inc. GE Power Controls Italia S.r.l. GE Power Systems University GE Real Estate France GE Real Estate Italia S.r.l. GE Real Estate Poland Sp Z O O GE Real Estate Sweden Ab

042104 042157 042185 042249 042296 042326 042124 042177 041012 042227 038547 038066 038192 042325 038058 038220 042197 042223 040080 042217 042139 042006 038218 038089 039006 042773 041068 042171 038210 042339 042324 042781 042075 041025 042722 042052 042236 042234 040044 040042 040079 040055 038166 042229 038036 038001 042149 038229 041050 038334 040134 039008 040078 042093

Amount

2.380,00 7.310,00 3.770,00 7.110,00 900,00 13.835,00 6.240,00 20.565,00 15.235,00 750,00 3.385,00 18.105,00 1.600,00 6.400,00 2.650,00 6.560,00 15.640,00 6.400,00 1.470,00 21.091,00 24.200,00 3.000,00 300,00 46.240,00 2.770,00 16.900,00 900,00 7.140,00 3.600,00 2.770,00 6.400,00 6.740,00 2.200,00 17.530,00 4.300,00 1.100,00 600,00 70.600,00 44.930,00 8.690,00 735,00 13.852,00 (1.705,00) 15.005,00 4.510,00 300,00 2.810,37 300,00 1.200,00 2.650,00 7.560,00 300,00 300,00 670,00

63

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

GE Rus Llc GE Security Emea Bvba GE Sensing & Inspection S.r.l. GE Sensing Emea GE Shenyang Turbomachinery Technology Co. Ltd. GE Smallworld (Uk) Ltd. GE Transportation Systems GE Transportation Systems Global Signaling Llc GE Transportation Systems S.p.A GE Water & Process Tech. Bvba GE Water & Process Technologies Austria Gmbh GE Water & Process Technologies Middle East Fze GE Water And Process Technologies France GE Wind Energy, S.L. GEII - Aberdeen Service Centre GEII -Gh Contractual Services Gems Pet Systems Ab GEN Nigeria Limited General Electric Austria Gmbh General Electric Capital Corp General Electric Capital Corporation General Electric Capital Fleet Services General Electric Company General Electric Company Polska Sp.Zo.O. General Electric Do Brasil Ltda General Electric Equipment Services Sl General Electric Healthcare Espana S.A. General Electric International General Electric International Inc. General Electric International Inc. Filialas General Electric International Inc. Sucursal En Esp General Electric International Operations Co Inc. General Electric International Operations Company, General Electric International Operations Nigeria General Electric International, Inc General Electric International, Inc. General Electric International, S.A. General Electric Railcar Services Corporation (Del General Electric Wind Energy Gmbh Geref Investment Management Gulf Turbine Services Llc, Mussafah GE Energy Services (Uk) Ltd. Imv Invertomatic Victron Uk Ltd. International General Electric Ab International Marketing Systems Ltd. Ionics (Uk) Ltd. Ionics Italba S.p.A. Ionics Italba S.r.l. Nbc Universal Global Networks Limited Nuovo Pignone S.p.A. Nutronik Gmbh Picl Egypt Corporation Ltd - Egypt Branch Pignone Engineering Pignone Espanola Global Services S.A. PII Mexico, Sa De Cv 64

Reg. code

Amount

042274 042920 041010 038195 038047 038123 042100 042303 041190 042098 042335 038159 038178 038033 034007 042212 042054 042561 038120 040022 040037 042115 038059 042095 038109 042148 042455 042195 041003 038208 038156 042204 042244 034004 038083 038102 038023 038219 038048 042333 038013 038164 042338 042189 038174 042294 425575 037011 042183 030023 038221 038190 034622 034614 038215

2.520,00 10.570,00 600,00 1.600,00 1.280,00 14.965,00 2.095,00 15.755,00 7.180,00 750,00 300,00 8.300,00 5.377,40 37.890,00 1.280,00 750,00 2.520,00 2.200,00 11.486,00 25.096,00 42.785,00 8.170,00 145.901,18 7.850,00 1.280,00 4.400,00 21.250,00 18.245,00 37.970,00 1.100,00 19.020,00 1.950,00 2.050,00 7.000,00 2.187,49 45.450,00 4.230,00 11.680,00 40.490,00 13.800,00 600,00 19.675,00 2.570,00 1.100,00 1.900,00 600,00 500,00 2.200,00 (2.575,00) 13.970,00 6.560,00 1.100,00 750,00 10.900,00 1.280,00

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

PII North America, Inc. PII Pipetronix Gmbh PII Sudamerica S.A. Pressure Control Systems Nigeria Ltd. Renta Inmobiliairia S.A. Sabic Innovative Plastics Espana Scpa Satis - Radioisotopos E Proteccoes Saudi American General Electric Sci Fi Channel Europe Sime S.r.l. Ste Martiniquaise De Financement Tecnel S.r.l. Thermodyn S.A.S. Turbine Blading Ltd. VetcoGray Angola VetcoGray Inc. VetcoGray Italia S.r.l. VetcoGray Pte Ltd. VetcoGray Scandinavia As VetcoGray Uk Ltd. Visiowave S.à r.l. Zenon Environmental Systems Inc. Fondazione Pignone Banque Artesia Nederland N.V. Bently Nevada Italia S.r.l. Bureau Veritas Italia S.p.A. GE Consumer Finance Europe GE Global Research Center GE Money Bank A.S. General Electric Canada International Inc. Granite Services International Inc. Thermodyn S.A.S. - Rappresentanza Iva

Reg. code

Amount

038065 038027 038112 038189 040021 042316 042304 038191 042262 731919 042334 760013 034037 038011 034017 034016 030000 038173 034015 038168 042264 038212 035001 042337 037003 197726 042108 042391 040118 038086 037005 030066

1.165,00 2.450,00 1.280,00 3.270,00 600,00 900,00 1.500,00 300,00 2.575,00 3.000,00 2.760,00 200,00 62.775,42 2.400,00 2.200,00 1.050,00 900,00 450,00 3.900,00 20.873,59 2.050,00 5.820,00 31.125,00 732,00 22.175,00 250,00 2.196,00 5.873,50 1.062,00 160,00 7.128,00 225,00 88.292.952,47

Costs for services General Electric International Inc. GE (China) Co Ltd. GE Caledonian Ltd. GE Corporate GE Energy Services GE Healthcare Clinical Systems Sl GE International Inc. GE Leadership Development Europe GE Smallworld (Uk) Ltd. GE Wind Energy, S.L. General Electric Company General Electric International Inc. General Electric International Inc Sucursal En Esp General Electric International Operations Co Inc. GE Energy Services (Uk) Ltd. Pignone Espanola Global Services VetcoGray Pte Ltd. VetcoGray Scandinavia As Nuovo Pignone S.p.A.

041003 042366 042498 042003 038474 042296 042134 042480 038123 038033 036757 042143 038156 042204 038164 034614 038173 034015 030023

(36.000,00) (1.060,30) (508,81) (228.627,86) (56.806,99) (429,62) (246,76) (632.181,20) (555,75) (2.091,91) (6.953,04) (469,28) (3.572,71) (2.379,72) (327,54) (1.716,73) (244.941,70) (900,00) (408.187,16) -1.627.957,08

65

Financial Statements of Nuovo Pignone Holding S.p.A. as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

Income from investments in subsidiaries Bently Nevada Italia S.r.l. Nuovo Pignone International S. à r.l. GE Transportation Systems S.p.A. GE Industrial Financing Ireland Ltd. GE Energy Holding Snc. Irma Service S.p.A.

Reg. code

Amount

037003

1.204.921,00 107.999.972,00 15.057.335,20 1.627.947,70 10.383.665,60 320.895,00

042100

136.594.736,50 Income from other investments Eni Acqua Campania S.p.A.

32.175,00 32.175,00

Other financial income from parent companies GE Holding Luxembourg S. à r.l.

17.729,44 17.729,44

Interest and financial expenses from subsidiaries Nuovo Pignone S.p.A.

30023

-7.903.860,27 -7.903.860,27

Interest and financial expenses from parent companies GE Energy Europe BV..

-2.823.623,13 -2.823.623,13

Interest and financial expenses from others GE Industrial Financing Ireland Ltd. GE Service Luxemburg Thermodyn S.A.S.

034037

-54.900,00 -444.990,00 -71.964,02 -571.854,02

66

GE Oil & Gas

Statutory Auditor’s Report for the Financial Statements at December 31, 2008 (in compliance with Article 2429 ter of the Italian Civil Code)

g

GE imagination at work

Statutory Auditor’s Report for the Financial Statements at December 31, 2008

Dear Shareholders, The financial statements at 31 December 2008, submitted here by the Board of Directors for your approval, show a profit of Euro 182,078,881, as summarised below:

BALANCE SHEET ASSETS

Euro 1,364,430,334

LIABILITIES Shareholders' equity - Share capital and reserves

153,309,194

- Retained earnings

439,704,732

- Net profit for the year

182,078,881 775,092,809

Provisions for risks and charges Payables and other liabilities

1,357,238 587,980,287

Accrued expenses and deferred income

0 1,364,430,334

INCOME STATEMENT Difference between production revenues and cost Financial income and expenses Adjustments to financial asset values Extraordinary income and expenses

Euro 83,553,974 125,349,186 -1,664,741 60,566

Income taxes for the year

(25,220,104)

Net profit for the year

182,078,881

Guarantees and memorandum accounts, shown at the foot of the balance sheet, amount to 1,625,217,209 Euro. The financial statements, comprising the balance sheet, income statement and notes, drawn up in accordance with Articles 2423 et seq. of the Italian Civil Code, were prepared by your Board of Directors on 8 June 2009 and made available to the Board of Statutory Auditors, together with the supporting documentation, the extension of deadlines allowed under Article 2429 of the Italian Civil Code having been waived. The Board of Statutory Auditors has a supervisory role, since KPMG S.p.A. has been appointed to perform the legally-required audit (Article 2409-bis of the Italian Civil Code). The Report on Operations presented by the Board of Directors also describes the Company’s condition and performance as regards its financial position and results, investments, relations with its ultimate parent entity, General Electric Company, and parent entity, General Electric Energy Europe B.V., also for the purposes of Article 2497-sexies of the Italian Civil Code, with its subsidiaries and associates, as well as significant post balance sheet events and the foreseeable trend in the Company’s operations. During the course of the year we monitored compliance with legal requirements, the memorandum of association and the principles of proper administration, applying as part of our effort the guidelines contained in the “Principles of conduct for Statutory Auditors set by the Consigli Nazionali dei Dottori Commercialisti e dei Ragionieri (the Italian Accounting Profession)”. 68

Statutory Auditor’s Report for the Financial Statements at December 31, 2008

Our activities are summarised below. We attended the meetings of the Board of Directors and the Shareholders, which were held in compliance with the articles of association and the legal and regulatory requirements that govern such meetings. We also obtained information from the Board of Directors on the general results of operations and likely future developments, as well as on the Company's principal transactions, selected based on their nature and scale. In this regard, we can provide reasonable assurance that the actions approved and transactions carried out were in compliance with legal requirements and the articles of association, and were not clearly imprudent, risky, subject to conflicts of interest or counter to shareholders' resolutions such as to jeopardise the Company’s assets. We have received the report of the independent auditors, KPMG S.p.A., which does not contain any significant information or data that should be highlighted in this report. We do not have any particular observations regarding the organisation or the administrative and accounting systems adopted by the Company. No complaints have been received pursuant to Article 2408 of the Italian Civil Code. Regarding the annual financial statements, in addition to the above, we confirm that we monitored their preparation, their general compliance with the laws that govern their form and layout, and their consistency with the facts and information that came to our attention during the course of our activities. We have also checked compliance with the regulations governing the preparation of the report on operations, which includes extensive information regarding business risks. To the best of our knowledge, the Board of Directors did not depart from the requirements of Article 2423, fourth paragraph, of the Italian Civil Code when preparing the financial statements. In view of the above and considering that no significant matters or qualifications regarding the annual financial statements emerged from the information received from the independent auditors, KPMG S.p.A., we recommend that the shareholders approve the annual financial statements for the period ended 31 December 2008 as presented by the Board of Directors. We furthermore remind you that the mandates conferred upon the Board of Statutory Auditors and the Board of Directors expire with the approval of the financial statements for the period ended 31 December 2008. You are therefore invited to proceed with their renewal. We thank you for the confidence placed in us.

THE BOARD OF STATUTORY AUDITORS DR. COSIMO IMBRIOSCIA DR. ANGELO CIAVARELLA DR. ANTONIO ANGELO MANZONI

69

Independent Auditor’s Report

70

Resolutions from Shareholder’s meeting

The Nuovo Pignone Holding S.p.A. shareholders' meeting was chaired by the Chairman Ing. Piero Salvadori and Dr. Stefania Castagni acted as secretary. Also present was Avv. Alberto Dasmi, representing shareholders GE Energy Europe B.V. and GE International Luxembourg S.à r.l., as well as some minority shareholders. The shareholders'meeting, which was held on 23 June 2009, approved the report on operations prepared by the Board of Directors and the Financial Statements as at and for the year ended 31 December 2008. It also resolved to carry forward the net profit for the year, in the amount of 182.078.881 Euro.

71

GE Oil & Gas

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

g

GE imagination at work

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

Structure of the Group

Nuovo Pignone Holding S.p.A.

Nuovo Pignone S.p.A. 100%

Corporacion Nuovo Pignone de Venezuela S.A. 100%

GE Capital Funding Services S.r.l. 100%

Nuovo Pignone International S. à r.l. 99,99%

Fondazione Pignone 100%

Pignone Engineering 99,99%

Consorzio Tragaz 50%

Pignone Inc. 100%

GE Sensing & Inspection Technologies S.r.l. 100%

Everest VIT Italia S.r.l. 100%

GE Medical Systems Information Technologies 86,75%

GE Transportation Systems S.p.A. 100%

GE Healthcare S.r.l. 100%

Bently Nevada Italia S.r.l. 100%

GE Medical Systems Italia S.p.A. 100%

Jenbacher S.r.l. 100%

GE Healthcare Clinical Systems S.r.l. 100%

GE Industrial Financing Ireland Ltd 100%

Acqua Campania S.p.A. 0,5%

Nuovo Pignone International S. à r.l. 0,01%

Company direct Società controllate controlled dirette Company indirect Società controllate controlled indirette

74

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

Dear Shareholders, We submit for your attention the consolidated financial statements of the Nuovo Pignone Group as at and for the year ended 31 December 2008, together with the Report on Operations. 2008 has been a positive year for the Nuovo Pignone Group: the Group is a leading supplier of goods and services in the Oil & Gas industry, where satisfactory goals were achieved. Likewise, generally positive results were posted by the healthcare sector, with a growth over the previous period and indicating a tendentially positive trend also as regards the coming years. The Group has maintained its commitment to technological innovation, with a view to creating added value for customers, via its products and the range of services offered; in terms of innovation, it was able to benefit from the different technologies available within the framework of the various General Electric businesses, which support the consolidation and expansion of its already substantial wealth of knowledge and experience. Set out below are the main operations which, during the year, modified the size and nature of the Group’s investments. On 10 January 2008 Nuovo Pignone Holding S.p.A. sold its investment in Thermodyn S.A.S. to GE Energy Holding S.A.S.; the sale price, amounting to 71.3 million Euro, was supported by an appropriate appraisal report and generated a capital gain of 11 million Euro in the consolidated financial statements. March 2008 saw the completion of the GE Healthcare IVD Italia S.r.l. liquidation process; the overall profit that emerged on liquidation, amounting to 1.3 million Euro, primarily concerned the interest accrued on the capital invested. On 29 August 2008, subsidiary Nuovo Pignone S.p.A. resolved a share capital increase (of 129 thousand Euro, with an overall share premium of 910 thousand Euro) reserved for the contribution by IRMA Service S.p.A. of its business line concerned with engineering and technical support activities on plant and machinery in the Oil & Gas sector. The contribution was carried out on 24 September 2008 based on the special appraisal drawn up by an expert appointed by the Florence Court. Again on 24 September 2008, Nuovo Pignone Holding S.p.A. transferred to IRMA Service S.p.A. its entire shareholding (corresponding to a 40% equity interest) in IRMA Service S.p.A., with purchase by the latter of treasury shares; the price paid, which amounted to 721 thousand Euro, generated a capital gain for the Company of 321 thousand Euro. Lastly, on 27 November 2008, IRMA Service S.p.A. sold to Nuovo Pignone Holding S.p.A. the shares in Nuovo Pignone S.p.A. assigned to IRMA at the time of contribution of the business line; the price paid for the shares was 2.3 million Euro. On 30 October 2008, GE Sensing & Inspection Technologies S.r.l. acquired the entire investment in Everest VIT Italia S.r.l.. The incorporation of Everest VIT S.r.l. into GE Sensing & Inspection Technologies S.r.l. was completed on 19 March 2009. The statutory and fiscal effects of the merger were made to start from 1 January 2009. On 4 December 2008, subsidiary Nuovo Pignone International S.à r.l. sold its investment in Nuovo Pignone International Scotland (corresponding to 99.81%) to GE Holding Luxembourg S.à r.l.. The sale price, amounting to 1,247 million Euro, determined a loss of 211 million Euro for Nuovo Pignone International S.à r.l.. On the same date, the subsidiary approved a resolution for full restitution of the share premium reserve. Payment of the amount in question, totalling 1,299 million Euro, was made in favour of GE Industrial Financing Ireland Ltd. (GEIFI) (1,202 million Euro) and in favour of Nuovo Pignone Holding S.p.A. (97 million Euro).

75

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

Again on 4 December 2008, subsidiary GE Industrial Financing Ireland Ltd. approved a resolution to repay to Nuovo Pignone Holding S.p.A. the capital contribution carried out on 12 March 2007, for the amount of 1,199 million Euro. On the same date, Nuovo Pignone Holding S.p.A. then proceeded to pay dividends totalling 1,523 million Euro in favour of GE Energy Europe B.V., as per resolution adopted at the Shareholders' Meeting on 27 June 2008. Payment of dividends amounting to 77 million Euro in favour of GE Holding Luxembourg S.à r.l. is still pending, as shown in the Nuovo Pignone Holding S.p.A. financial statements at 31 December 2008. With regard to the financial instruments disclosure required by Article 2428, paragraph 2.6 bis of the Italian Civil Code, reference is made to the account given in the sections “Transactions in foreign currency” and “Memorandum accounts” of the Notes to the Financial Statements.

Economic situation and outlook During 2008 the growth in the global economy slowed down to around 2.7% in real terms compared to 3.5% in 2007. The forecast for 2009 confirms a period of depression, with the world growth rate falling to below one percent. The explosion of the “sub-prime” mortgage crisis in the United States heavily impacted the financial industry, pushing the global economy towards one of the worst economic recessions. The industrialised countries posted a growth of just over one percent (United States 1.2%, Europe 1.1% and Japan 0.4%), compared to 2.5 percent in 2007. The developing countries also recorded a slowdown: Latin America, the Middle East and Africa showed a downturn compared to 2007, dropping to respectively around 4.6%, 6.1% and 5.1%. This decline is primarily connected with the falloff in commodity prices and the overall volume of exports and the reduction in direct foreign investments. The same trend was seen in the former Soviet Union area which, compared to 2007, slowed down by over one percent to approximately 7%. The Asian economies were also affected by the world economic crisis; China and India continued to post positive growth rates, at respectively 9.1% and 7.5%, but the forecasts for 2009 suggest a slowdown in the development of these countries too. The slowdown in world growth also determined a falloff in energy demand. More specifically, in 2008, the demand for oil fell to 85.8 Mbbl/d (million barrels per day), down by 0.3% compared to 2007 levels. The average oil trading price in 2008 was around 100 Dollars per barrel, 40% more than the 2007 average of 72 Dollars per barrel; however, if considered more closely, the price of crude rose sharply during the first six months of 2008, exceeding the threshold of 100 Dollars per barrel in January and reaching the record figure of almost 150 Dollars per barrel in July; then the impact of the financial and economic crisis started to have notable repercussions on the trend in the price of crude which, having constantly fallen during the last six months of 2008, during the month of December dropped to below the threshold of 40 dollars per barrel. Given the weak and uncertain price of oil and lack of financial stability, throughout the sector there was a general slowdown in the launch of new initiatives and the continuation of ongoing projects; a continued weakness in the price of oil undoubtedly constitutes a risk factor as regards the trend in the oil sector. On the other hand, we note that the current price of oil continues to guarantee the profitability of investments with a low break-even price; moreover, the demand as regards the developing countries helps to support

76

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

performance in the sector which, therefore, despite the economic situation, continues to show positive signs. Against the diminishing demand for oil, the demand for natural gas, having dropped only slightly with respect to 2007 levels, continues to be sustained by energy requirements in developing countries. Environmental regulations, which impose ever more stringent limits on CO2 emissions, continue to push the consumption of natural gas as opposed to coal. Despite the general tendency towards gas price convergence (due to increased transportation in liquid form (LNG)), the price of natural gas continues to be affected by a wide variability based on the region of origin, fluctuating between a minimum of 6.90 USD/MMBtu as regards the California coast in the United States to a maximum of around 14 USD/MMBtu in Japan. Regarding the outlook and prospects for the non-Oil & Gas areas of operation, we mention that the Group's companies are active, above all in Italy, in the following sectors: I

production and marketing of medical systems and diagnostic imaging services and related technical assistance and with marketing of radiopharmaceuticals and contrast media (healthcare solutions);

I

manufacture and marketing of railway signalling products;

I

manufacture and marketing of natural gas and biogas electrogen groups for the combined production of electricity and heat;

I

marketing of sensors, control instruments and chemical and industrial products and materials for the implementation of Non destructive testing;

I

factoring services primarily offered to General Electric Group companies.

GDP in Italy dropped 1% during 2008. The economic crisis, which worsened progressively during the latter part of the year, led to a decline in corporate investments, a falloff in exports and stagnation as regards household consumption; the deficit-to-GDP ratio also deteriorated, settling at around 2.7%. The economic situation highlights more than ever the need to reduce public spending. The Group's Companies, whilst they operate to a significant extent with the public administration, nevertheless continue to show a good capacity for resistance in the markets: the technological leadership of products and the quality of services offered remain decisive factors as regards the performance of subsidiaries, particularly in the medical, railway and energy sectors.

Performance of the business sectors In recent years the Nuovo Pignone Group has diversified its portfolio, integrating the traditional supply of goods and services pertaining to the Oil & Gas business with operations in a wide variety of businesses. Performance as regards the main sectors of activity is reported below.

77

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

Oil & Gas The Group's operations in the Oil & Gas business are carried out above all through Nuovo Pignone S.p.A.. The Company operates as main supplier in the Oil & Gas sector and comprises an Equipment division – which, in 2009, has taken the name of “Turbomachinery” division (new extraction, transportation and refining machinery and plant) – and a Global Services division (installation and start-up of the machines and a wide variety of after-sales services). The Equipment division operates in the following three segments: I

Natural Gas & Processing, which includes the Refinery, Petrochemical and Industrial Power Generation sectors;

I

Transportation, which includes the Liquified Natural Gas (LNG) and Pipeline applications;

I

Turnkey facilities.

With reference to the Natural Gas & Processing segment, the global economic situation led to a slowdown in activities, with a consequent slide in the timing of some projects; both orders and revenues were affected by this trend, particularly as regards contracts scheduled for completion during the same year in which they were awarded. In the Transportation segment the falloff in orders recorded in 2007 for LNG projects translated to a decrease in 2008 revenues, whereas the projects for the construction of pipelines were only marginally affected by the world economic crisis, posting a slight falloff in revenues during 2008; as far as orders are concerned, while the result posted by pipelines was in line with the volumes recorded for 2007, LNG continued to show a slowdown with respect to the extraordinary performances of previous years. The Turnkey facilities segment also posted a downturn during the course of 2008 as regards both revenues and orders, the latter tending to slide towards 2009. Again in 2008, a year of positive results in terms of both orders and revenues, driven by the division’s numerous initiatives undertaken with a view to expanding the portfolio of services to customers in the Oil & Gas market, the Global Services division confirmed its role as an essential growth platform for the Company. The main growth driver was to be found in the long-term activities (technical assistance and maintenance and machinery upgrade contracts); excellent performances were also achieved by the more traditional sectors (sale of spare parts and servicing). In 2008, the Oil & Gas business posted production revenues of 3,203 million Euro compared to 3,045 million Euro as at 31 December 2007, with an increase in operating profit from 302 million Euro in 2007 to 328 million Euro in 2008 (net of amortisation of goodwill and the effect deriving from deconsolidation of Thermodyn S.A.S.). The growth in operating income was mainly ascribable to the rise in volumes and improvement in terms of marginality.

Healthcare Solutions As regards the Healthcare Solutions business, in 2008 the Group, operating through GE Medical Systems Italia S.r.l., GE Healthcare S.r.l. and GE Healthcare Clinical Systems S.r.l., 78

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

posted an overall 6% increase in sales with respect to the previous year (aggregate 2007 sales amounted to 403 million Euro compared with 428 million Euro in 2008), despite the general slowdown in sector demand as a result of the cutback in public spending decided by the Italian Government. In particular, GE Medical Systems Italia S.p.A., which operates in the marketing of diagnostic imaging systems and services and related technical assistance, in 2008 posted a growth in sales of 8% with respect to the previous year, thereby consolidating its presence on the reference market. The rise in volumes was accompanied by a satisfactory increase in marginality, as well as a 9% upturn in aggregate operating margin compared to a year earlier. During the course of 2009 an appraisal report was drawn up for the Companies operating in the Healthcare business (as more particularly described in the section entitled "Outlook"); based on the findings of this appraisal the consolidation difference pertaining to GE Healthcare Clinical Systems S.r.l. was written down by 14 million Euro: the estimates concerning said Company's future performance, whilst positive, in fact proved less optimistic than those made in previous years.

Railway signalling During 2008 the Italian railway signalling market confirmed a downturn in the growth rate with respect to previous years. The railway signalling sector in any case saw a continuation of the Italian Railway Network's implementation of plans to modernise the network’s signalling systems and improve safety standards, as regards both the main domestic traffic lines and the regional lines. In particular, on major sections of the Italian railway infrastructure, installation continued of the automatic train control systems (sistemi di controllo di marcia del treno), the train driver support systems (sistemi di supporto alla condotta) and the land subsystems (sottosistemi di terra), the latter developed entirely by GE Transportation Systems S.r.l., the company through which the Nuovo Pignone Group operates in the sector in question. The Company is currently implementing major orders in connection with these projects. Moreover, as part of an expansion strategy, which aims to enhance its presence in the main international markets, considered to have greatest development potential for the business sector, the Company is pursuing interesting negotiations for the distribution of its products and the implementation of orders in important foreign markets. The results achieved during the year should be considered positive bearing in mind the current economic situation: 2008 production revenues, representing turnover, the change in inventories and the increase in contract work in progress, totalled 92 million Euro, compared to 90 million Euro in 2007, with a growth of 3% largely due to an arbitral award in the course of 2008 involving the Albanian Government. The difference between production revenues and cost amounted to 26 million Euro, up by 4% over 2007, as a result of the Company's operational efficiency. Investments in research and development at 31 December 2008 amounted to 3 million Euro. The Company's orders portfolio at 31 December 2008 amounted to 40 million Euro compared to 33 million Euro in 2007. During 2009 major negotiations are expected to be concluded regarding the distribution of products in both the domestic and overseas markets, with a tendency towards enhancing volumes at international level.

79

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

Biogas electrogen groups The Group operates through Jenbacher S.r.l. in the business of manufacturing electrogen groups and cogeneration systems for the production of electricity, using fossil fuels (natural gas) as well as alternative and renewable fuels (biogas from biomass, waste, etc.). The Company's specific sector of operation moves in an anti-cyclical direction so that, notwithstanding the unfavourable economic situation at domestic and global level, 2008 was a year of growth; a good performance was recorded, particularly as regards the hospital supplies and district heating segments; the agricultural business also proved to be a driver for biogas applications. Revenues were up from 44 million Euro in 2007 to 56 million Euro in 2008 (+27%), with an operating profit of around 14%, basically in line with a year earlier, while the orders portfolio, at approximately 39 million Euro, was down on the previous year. With regard to the Company's prospective performance, generally difficult market conditions are anticipated: however, the commitments undertaken by our Government at EU level (20% increase in energy output using renewable energy sources and achievement of Kyoto objectives) should favour investments in the sector, with positive repercussions on the Company's potential results.

Factoring services The Group is active in the financial sector through its subsidiary GE Capital Funding Services S.r.l., which operates primarily by acquiring the trade receivables of General Electric Group companies due from debtors outside the Group by way of factoring agreements.

Elements of risk and uncertainty For an analysis of the Group's elements of risk and uncertainty reference is made to the account already given in the annual report of the parent company Nuovo Pignone Holding S.p.A..

Research and development Research and development activities are carried out above all within the scope of the Oil & Gas business, which in 2008 maintained its commitment to technological innovation, with a view to creating added value for customers, through continuous enhancement of products and by increasing the range of services offered. Much of the research effort was dedicated to compressors (both alternative and centrifugal), steam turbines and to upgrading the existing gas turbine fleet, by injecting new technologies, so as to maintain the required level of technical competitiveness for our products and services. Moreover, research was carried out within the ambit of electrically-driven compressors with a view to developing a new application trend for the Oil & Gas market. In particular, the Company's efforts were focused on the following areas:

80

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

I

Compressors: efficiency enhancement as regards centrifugal and alternative compressors; treatment of acid gases, by raising safety levels, and testing materials that are more resistent to same;

I

Turbines: use of alternate fuels and enhancement of gas turbine efficiency; development of a new line of large-scale steam turbines;

I

Subsea: development and implementation of new subsea technologies (subsea compressors, multiphase pumps and risers);

I

“After market” services: technological adjustment for the purpose of upgrading the fleet installed at customer premises.

In terms of innovation, the Group was able to benefit from the various technologies available within the framework of the different General Electric businesses, which supported the consolidation and expansion of the already substantial wealth of experience. Spending in research and development during 2008 totalled 39 million Euro and was entirely charged to the year's income statement.

Tangible fixed assets The investments made during the year were directed towards increasing the Group's production efficiency and capacity. The most important initiatives were concentrated on the Florence and Massa plants. As regards the Florence plant, we report the upgrade of the rotor part production line and the expansion of the test bed production capacity. Of the most important activities at the Massa plant we mention the investment for the upgrade of the stator assembly line and the large centrifugal compressors. At the Bari plant, the capacity of the large-scale pump test beds was increased. Lastly, at the Talamona plant, two new machine tools were installed for the production of turbine blades and compressor blades. The Group's other sectors of operation also went ahead with activities for the renewal of plant and equipment, with particular regard to the implementation of maintenance and repair works at customer premises.

Intangible fixed assets In recent years, the Group has continued work on the key programme for the renewal and expansion of IT platforms, with the introduction of the Oracle Application ERP (Enterprise Resource Planning) package. Insofar as concerns the Oil & Gas sector, Oracle Application was introduced firstly in the Finance and Sourcing area and subsequently in the production cycle (MRP/BoM, “Manufacturing Resource Planning / Bill of Material Redesign”). Implementation of the Global Services portion involved the phases pertaining to the management of staff located at customer premises (Field Service Engineers), with a view to supporting the installation, monitoring and maintenance carried out on customers’ machines (Enterprise Asset Management).

81

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

As regards optimisation of the Supply Chain, in 2008, the ERP system was introduced also at the Massa, Vibo and Bari plants; at all plants, a logistics management system was added. The Group pays constant attention to enhancing the security of IT systems, as well as to their compliance with current legislation.

Quality - ‘Lean Six Sigma’ The quality programme, Lean Six Sigma, integrated in recent years with the principles of Lean Management, confirmed its role as one of the Group’s strategic initiatives. Lean Six Sigma is an entrepreneurial strategy for continuous improvement that focuses on product quality and business process speed. This methodology, extensively applied in all corporate areas, continues to make a significant contribution towards simplifying the processes, reducing their costs and improving their efficiency, thereby confirming its role as fundamental element for the achievement of growth objectives.

National tax consolidation scheme We report that, starting from 2004, Nuovo Pignone Holding S.p.A. has exercised its option for consolidated taxation in its capacity as consolidator, pursuant to Articles 117 et seq. of the Italian Consolidated Income Tax Act (T.U.I.R.). Adoption of the consolidated tax system allows Nuovo Pignone Holding S.p.A. to offset the company’s positive and negative taxable income for IRES (corporate tax) purposes against those of the subsidiaries having exercised the option, bearing in mind that the tax losses accrued during periods prior to introduction of group taxation can be used only by the companies that have generated them. Apart from the offsetting of positive and negative taxable incomes pertaining to individual companies exercising the option in question, the national tax consolidation scheme produces other positive effects, such as for example the removal of certain limitations on the deductibility of financial charges and the possibility to carry out transfers and contributions of individual assets within a regime of tax neutrality. The relationships arising from participation in the national tax consolidation scheme, as well as the reciprocal responsibilities and related formalities, obligations and benefits, are regulated via specific “National Tax Consolidation Rules”, subscribed to by all companies taking part in the national tax consolidation scheme, which set forth a common procedure for application of normative and regulatory provisions. With regard to the financial transactions, the Rules require the subsidiaries with positive taxable income to transfer to the parent company the financial resources proportionately corresponding to the higher tax due by the latter as a result of their participation in consolidated taxation; companies with negative taxable income transfer their losses to the parent company, without

82

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

compensation, since they are not entitled to any indemnity. In the event that a subsidiary subsequently leaves the national tax consolidation scheme, the transferred losses remain with Nuovo Pignone Holding S.p.A. The IRES tax related amounts shown in the balance sheet correspond to the transactions between the parent company Nuovo Pignone Holding S.p.A. and the consolidated companies. The following companies have elected to participate in the national tax consolidation scheme for 2008: Nuovo Pignone Holding S.p.A. (consolidator), GE Transportation Systems S.p.A., GE Medical Systems Italia S.p.A., Bently Nevada Italia S.r.l., GE Capital Funding Services S.r.l., Jenbacher S.r.l., GE Sensing & Inspection Technologies S.r.l., GE Healthcare S.r.l. (formerly Amersham Health S.r.l.), GE Medical Systems Information Technologies S.r.l., GE Healthcare Clinical Systems S.r.l. (formerly Datex- Omheda).

Personnel At 31 December 2008 the Group had a headcount of 5,343 employees, comprising 254 executives, 4,198 managers/white collars and 891 blue collar workers.

Financial position and results The Group closed 2008 with a net profit of 194 million Euro, compared with a net profit of 402 million Euro at 31 December 2007. Net revenues, amounting to 3,722 million Euro, were down by 20 million Euro, while gross operating profit (EBITDA), at 554 million Euro, showed an increase of 16 million Euro over 2007; said net revenues and EBITDA, if normalised for the effect of the sale of Thermodyn S.A.S. which took place in January 2008, were up respectively by 166 and 26 million Euro compared to the previous year: the current year's results are primarily ascribable to the trend in the Oil & Gas and Healthcare businesses, both of which showed a growth in terms of volumes and marginality. The item “financial income (expenses)", reflects a decrease of 71 million Euro due above all to the sale and deconsolidation of Nuovo Pignone Scotland in the 2008 accounts. Foreign currency operations, which were affected by the Group's policy to hedge exchange rate risks by way of “forward/option” transactions, posted a gain of 25 million Euro; the decrease of 17 million Euro with respect to 2007 is primarily due to the Euro/Dollar exchange rate which, following the upward trend in 2007, showed a decline in 2008. Expenses from investments include a consolidated capital loss of 104 million Euro arising from the sale of Nuovo Pignone Scotland, the 14 million Euro write-down of goodwill arising on consolidation pertaining to GE Healthcare Clinical System S.r.l. (as previously mentioned in the section on the Healthcare business) and a capital gain of 11 million Euro from the sale of Thermodyn S.A.S..

83

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

Reclassified income statement 2008 Thousands of Euro

Net revenues *

2007 %

Thousands of Euro

%

3,721,635

100.00

3,741,481

100.00

98,127

2.64

57,892

1.55

-2,863,513

-76.94

-2,853,764

-76.27

-402,126

-10.81

-407,244

-10.88

Gross operating profit (EBITDA)

554,123

14.89

538,365

14.39

Amortisation and depreciation **

-69,126

-1.86

-73,524

-1.97

Operating profit (EBIT)

484,997

13.03

464,841

12.42

Financial income (expenses)

-46,075

-1.24

25,319

0.68

Other revenues and income Purchases, services and sundry costs Personnel and related charges

Exchange rate gains (losses)

24,895

0.67

41,848

1.12

-106,937

-2.87

-2,914

-0.08

Profit from ordinary operations

356,880

9.59

529,094

14.14

Extraordinary income (expenses)

12,199

0.33

101,725

2.72

Income (expenses) from investments

Profit before taxes Income taxes Net profit for the year Net profit for the year pertaining to minority interests Net profit for the year

369,079

9.92

630,819

16.86

-174,467

-4.69

-227,756

-6.09

194,612

5.23

403,063

10.77

-849

-0.02

-696

-0.02

193,763

5.21

402,367

10.75

* Net revenues typically include revenues from sales and services and changes in contract work in progress. ** Amortisation and depreciation include the portion pertaining to the year of plant-related lump-sum grants.

The Group shows a net capital requirement (net invested capital) of 921 million Euro, of which 307 million Euro covered by own funds and the remainder using short and long-term loans. In 2008 the Group recorded a negative variance in net financial position, posting a debit balance of 614 million Euro (compared to a credit balance of 709 million Euro at 31 December 2007) as a result of the distribution of dividends carried out in 2008. The cash flow for the year, amounting to 293 million Euro, was generated above all by the positive performance of ordinary operations, against which there were investments made to support growth and technological renewal (67 million Euro) and divestments (55 million Euro), primarily concerning the liquidation of GE Healthcare IVD Italia S.r.l.. In this connection, it should be noted that the statement of cash flows attached to these financial statements describes in detail the sources and applications of cash flows for 2008.

84

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

Reclassified Balance Sheet 31/12/2008 Thousands of Euro

Intangible fixed assets Tangible fixed assets Investments, securities and treasury shares

31/12/2007 %

Thousands of Euro

%

87,790

9.5

147,716

14.6

241,675

26.2

236,582

23.5

2,310

0.3

52,997

5.3

331,775

36.0

437,295

43.4

Current assets

3,671,048

398.5

3,293,873

326.6

Current liabilities

(2,677,950)

-290.7

(2,272,023)

-225.3

Provisions for risks and charges

(332,992)

-36.1

(376,126)

-37.3

Net working capital

660,106

71.7

645,723

64.0

Employees' severance entitlement

(70,650)

-7.7

(74,605)

-7.4

NET INVESTED CAPITAL

921,231

100

1,008,413

100

Shareholders' equity

Fixed assets

269,714

29.3

1,678,679

166.5

Capital and reserves – minority interests

37,221

4.0

39,207

3.9

Medium/long-term financial debt (position)

875,631

95.1

(1,288,881)

-127.8

Short-term financial debt (position)

(261,336)

-28.4

579,408

57.5

Net financial debt/(Net financial position)

614,295

66.7

(709,473)

-70.4

Coverage

921,230

100.0

1,008,413

100.0

Transactions with parent companies and with General Electric Group companies The Group carries out, with its parent company General Electric Energy Europe B.V. and with the companies of the General Electric Group, transactions of a financial nature which are settled at rates in keeping with those of the market. Since October 1999 the treasury operations pertaining to the Italian associates of most of the General Electric Group manufacturing businesses have been centralised. The purpose of this transaction, which provides for the bank accounts of the associates to be concentrated in just two banks, is to optimise the management of financial resources and reduce banking costs. The Group's Companies engage in commercial transactions, which are covered by appropriate agreements for the supply of services or granting the use of trademarks and patents, subject to normal market terms and conditions (except as described in the section concerning the national tax consolidation scheme).

Treasury shares and shares of parent companies The Parent Company does not hold treasury shares or shares of parent companies, even through trustees or nominees. During the year no treasury shares or shares of parent companies were purchased or sold, even through trustees or nominees.

85

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

Outlook Although the growth levels forecast for the economy and for energy demand in 2009 are lower than those posted in recent years, they nevertheless suggest that the coming periods will again see significant investments in the Oil & Gas sector. The investment areas of greatest interest continue to be the Middle East, Africa, Latin America, China and India. In particular, in Latin America and Africa (Brasil, Nigeria and Angola) the expansion is expected to concern above all the mining sector, while the largest investments in the petrochemicals and refining areas are expected to take place in Saudi Arabia, China and India. Moreover, some major gas and oil pipeline projects are anticipated in the zone of Russian influence. To achieve the targeted growth objectives, the Company is pursuing numerous strategic initiatives, including: I

the carrying out of process and product standardisation programmes, with a view to reducing contract lead times and general production costs, and improving products and services offered to customers;

I

the commitment to technological innovation, with the intention of creating added value for customers by offering them a wide range of products and services. The Company benefits from the different technologies available within the ambit of the various General Electric businesses, which have supported the consolidation and expansion of the already considerable base of knowledge and experience;

I

the promotion of strategic alliances with local partners, designed to enable a greater proximity to customers;

I

the development of the Lean Six Sigma quality methodology, with a view to enhancing internal efficiency and all processes capable of developing added value for customers.

Within the ambit of the Healthcare business, the first quarter of 2009 featured a strong growth in sales of diagnostics equipment over the corresponding period a year earlier (+34%). A positive trend is also confirmed as regards technical assistance revenues (+3% compared to the same period of the previous year). Insofar as concerns the other business areas, the prospective trend for 2009 is expected to remain basically in line with current performance.

Significant post balance sheet events On 27 April 2009 the Company's Board of Directors approved a resolution to acquire the remaining 13.25% stake in GE Medical Systems Information Technology S.r.l. (GEMSIT), thereby enabling 100% consolidation of the medical segment results within the Nuovo Pignone Group; the acquisition was completed on 22 May 2009 for the overall price of 43 million Euro.

86

Consolidated Annual Report of the Nuovo Pignone Group as at and for the year ended December 31, 2008

In order to make better use of the Group's resources and with a view to increasing the funds available to Nuovo Pignone S.p.A. to support the investments required for the subsidiary's development, again on 27 April the Nuovo Pignone Holding S.p.A and Nuovo Pignone S.p.A Boards of Directors resolved to transfer the entire investment in GEMSIT from Nuovo Pignone Holding S.p.A. to Nuovo Pignone S.p.A.. The transfer took place via contribution to Nuovo Pignone S.p.A. of the GEMSIT investment. The Nuovo Pignone S.p.A. capital increase, resolved by the Extraordinary Shareholders' Meeting on 13 June 2009, amounted to 226 million Euro, inclusive of share premium; the contribution was carried out at book values, supported by appropriate appraisal report drawn up pursuant to and for the purposes of Article 2343-ter of the Italian Civil Code. The Florence Regional Tax Commission has rejected the appeal brought by the Revenues Agency against the Parent Company and subsidiary Nuovo Pignone S.p.A. in May 2008, which referred to the notices of assessment pertaining to the 1998 and 1999 tax periods, issuing on 29 April 2009 an appellate judgment in the Companies' favour.

FOR THE BOARD OF DIRECTORS The Chairman (signed on the original) Piero Salvadori

87

GE Oil & Gas

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year endede December 31, 2008

g

GE imagination at work

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

CONSOLIDATED BALANCE SHEET Assets (thousands of Euro) 31.12.2008 A) Share capital proceeds to be received B) Fixed assets I - Intangible fixed assets 1) Start-up and capital costs 3) Industrial patents and intellectual property rights 4) Concessions and licences 5) Goodwill 6) Assets under development and payments on account 7) Other assets 8) Goodwill arising on consolidation Total II - Tangible fixed assets 1) Land and buildings 2) Plant and machinery 3) Industrial and commercial equipment 4) Other assets 5) Assets under construction and payments on account

(thousands of Euro)

31.12.2007

34

48

19.506 0 199

25.930 0 800

3.057 1.029 63.965

1.526 1.180 118.232

87.790

147.716

83.785 125.332

75.922 127.965

8.186 8.089

8.886 10.618

16.283

13.191

241.675

236.582

31.12.2008

31.12.2007

1.505.661

1.532.395

0

0

1.505.661

1.532.395

0

508

0

508

-

-

-

-

-

-

331.383

191

21.248

45.310

4-ter) Deferred tax assets

137.124

138.869

5) Other receivables - amounts due within one year - amounts due after more than one year

451.289

501.118

514

1.730.671

Total

451.803

2.231.789

Total

2.447.219

3.949.062

0

50.000

0

50.000

13.295 0 29

17.280 0 54

13.324

17.334

4.993.365

6.055.996

181.866

124.373

5.507.006

6.567.664

II - Receivables: 1) Trade receivables - amounts due within one year - amounts due after more than one year

2) Subsidiaries - amounts due within one year - amounts due after more than one year

3) Associates - amounts due within one year - amounts due after more than one year

4) Parent companies - amounts due within one year 4-bis) Tax receivables

Total III - Financial fixed assets 1) Investments in: a) subsidiaries b) associates d) other companies Total 2) Amounts receivable: d) oher amounts receivable 3) Other securities Total

Total fixed assets (B) C) Assets forming part of working capital I - Inventories: 1) Raw materials, consumables and supplies 2) Work in progress and semi-finished products 3) Contract work in progress 4) Finished goods 5) Payments on account Total

2.283 0 27

2.285 685 27

2.310

2.997

0 0

0 0

2.310

2.997

331.775

387.295

73.816

103.815

140.337 2.175.204 22.199 121.266 2.532.822

153.365 1.605.515 21.378 155.527 2.039.600

III - Financial assets not of a fixed nature: 1) Investments in: a) subsidiaries Total IV - Liquid funds: 1) Bank and postal accounts 2) Cheques in hand 3) Cash-in-hand and cash equivalents Total Total assets forming part of working capital (C) D) Prepayments and accrued income TOTAL ASSETS

90

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

CONSOLIDATED BALANCE SHEET Liabilities (thousands of Euro) 31.12.2008

31.12.2007

74.880 41.633

74.880 41.633

16.476 14.977

16.476 14.977

(thousands of Euro)

- amounts due after more than one year

A) Shareholders' equity I - Share capital II - Share premium reserve III - Revaluation reserves: law 413 of 30.12.91 IV - Legal reserve V - Reserve for purchase of treasury shares VI - Statutory reserves VII - Other reserves Provision for lump-sum grants pursuant to Art. 55 Presidential Decree 917/86 Reserve for lump-sum grants pursuant to Art. 55 Presidential Decree 917/86 Negative goodwill Consolidation reserve Total VIII - Retained earnings (losses carried forward) IX - Net Profit for the year Total Group Shareholders' Equity Net Profit pertaining to minority interests Shareholders' equity pertaining to minority interests

10) Amounts payable to associates - amounts due within one year 383

383

3.356 1.606 127.077 132.422

3.356 1.606 129.806 135.151

(204.439) 193.763

993.195 402.367

269.714

1.678.679

849

696

36.372

38.511

Total Shareholders' equity minority interests

37.221

39.207

Total Shareholders' equity Group and minority interests

306.935

1.717.886

2.934

1.899

B) Provisions for risks and charges 1) Provisions for pensions and similar obligations 2) Tax provision including deferred tax liabilities 3) Other provisions Total C) Employees' severance entitlement D) Payables 3) Due to shareholders for loans 4) Due to banks - amounts due within one year - amounts due after more than one year 5) Sums due to other financial institutions - amounts due within one year - amounts due after more than one year 6) Payments on account 7) Trade payables - amounts due within one year

8) Amounts payable to subsidiaries - amounts due within one year - amounts due after more than one year

11) Amounts payable to parent companies - amounts due within one year - iamounts due after more than one year 12) Tax payables - amounts due within one year - amounts due after more than one year 13) Social security charges payable - amounts due within one year - amounts due after more than one year 14) Other payables - amounts due within one year - amounts due after more than one year

Total E) Accrued expenses and deferred income TOTAL LIABILITIES

6.977 323.081 332.992

12.662 361.565 376.126

70.650

74.605

56.403

53.579

3.340

3.957

9.411 12.751

12.491 16.448

481.411

1.163.925

759.398 1.240.809 2.337.853

281.189 1.445.114 1.910.453

760.422

738.892

31.12.2008

31.12.2007

0 760.422

0 738.892

0

0

0 0

0 0

0

0

0

19.742

0 0

0 19.742

146.003

93.612

1.246 147.249

2.784 96.396

25.432

27.968

64 25.496

92 28.060

103.614

75.223

77.392 181.006

119 75.342

4.761.989

4.384.026

34.440

15.021

5.507.006

6.567.664

0 1.231.348 1.231.348

0 1.383.511 1.383.511

141.744 141.744

225.058 225.058

5.367.779 622

5.384.764 439

883.938 227.324 217.938 7.921 6.705.522

1.108.090 289.043 254.414 9.517 7.046.267

GUARANTEES AND OTHER MEMORANDUM ACCOUNTS Guarantees given by the Group - Collateral guarantees - Personal guarantees Total guarantees Guarantees received by the Group - Collateral guarantees - Personal guarantees Total guarantees Other memorandum accounts - Commitments: - for sale of goods and services - other commitments - Currency risk hedging contracts: - on sale of foreign currency - on purchase of foreign currency - Third party assets - Group assets held by third parties Total other memorandum accounts

91

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

CONSOLIDATED INCOME STATEMENT (thousands of Euro) 2008 A) Production revenues 1) Turnover - goods and services 2) Variation in work in progress, semi-finished products and finished goods 3) Changes in contract work in progress 4) Increases in internal work capitalised under fixed assets 5) Other revenues and income - grants for operating expenses - other

Total B) Production cost 6) Raw materials, consumables and supplies 7) Services 8) Use of third party assets 9) Personnel expenses a) salaries and wages b) oneri sociali c) employees' severance entitlement e) other costs 10) Amortisation, depreciation and write-downs a) amortisation of intangible fixed assets b) depreciation of tangible fixed assets d) write-down of receivables included under assets forming part of working capital 11) Changes in inventories of raw materials, consumables and supplies 12) Provisions for risks 13) Other provisions 14) Other operating costs Total Difference between production revenues and cost (A - B) C) Financial income and expenses 15) Income from investments: - subsidiaries - other companies 16) Other financial income: a) from receivables included under fixed assets - parent companies - subsidiaries - others

92

2007

3.117.039

3.053.062

-8.588

-6.352

604.596

688.419

3.068

2.570

436 97.691

515 57.377

98.127

57.892

3.814.242

3.795.591

-1.648.672 -864.877 -90.608

-1.735.972 -781.598 -106.256

-296.584 -79.255 -17.850 -8.437 -402.126

-295.303 -87.082 -17.388 -7.471 -407.244

-30.808

-35.668

-38.318

-37.856

-28.653 -97.779

-7.353 -80.877

-30.639

-616

-18.987 -116.964 -58.593

-35.614 -151.175 -31.398

-3.329.245

-3.330.750

484.997

0 32 32

(thousands of Euro)

464.841

0 0 0

2

2

2

2

2008 d) other financial income - parent companies - subsidiaries - others 17) Interest and other financial expenses - parent companies - subsidiaries - others

17-bis) Exchange rate gains and losses Total (15 + 16 - 17) D) Adjustments to financial asset values 18) Revaluations: a) of investments b) of financial fixed assets other than investments 19) Write-downs: a) of investments b) of financial fixed assets other than investments c) of securities other than investments included under assets forming part of working capital d) other

Total adjustments (18 - 19) E) Extraordinary income and expenses 20) Income: - profit on sale of assets - other income 21) Expenses: - loss on sale of assets - taxes relating to prior years - other expenses

Total extraordinary items (20 -21) Profit (loss) before taxes (A - B +/- C +/- D +/- E) 22) Taxation on profit for the year Net profit for the year Minority Interests Group net profit for the year

2007

3.547 0 70.632 74.179

221 0 116.324 116.545

-2.824 -104.113 -105.614 -212.551

-2.482 -1.534 -87.212 -91.228

24.895

41.848

-113.443

67.167

0

272

0 0

0 272

0

0

0

0

0 -14.674 -14.674

0 -3.186 -3.186

-14.674

-2.914

116 10.077 10.193

71 113.699 113.770

-52 5.653 -3.595 2.006

-17 -1 -12.027 -12.045

12.199

101.725

369.079

630.819

-174.467

-227.756

194.612 -849 193.763

403.063 -696 402.367

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Basis of presentation The consolidated financial statements, drawn up based on the provisions of Legislative Decree no. 127/91, which implemented in Italy the European Union’s VII directive, comprise the consolidated balance sheet (prepared in accordance with the layout set forth by Articles 2424 and 2424 bis of the Italian Civil Code), the consolidated income statement (drawn up in accordance with the layout as per Articles 2425 and 2425 bis of the Italian Civil Code) and these notes. The financial statement schedules have been supplemented, for completeness of information, by the statement of cash flows, which analyses the cash flows generated during the year, and by the reclassified balance sheet and income statement included, in condensed form, in the Financial Position and Results section of the Report on Operations. Considering the magnitude of the amounts, the consolidated Balance Sheet and consolidated Income Statement have been drawn up in thousands of Euro; likewise the explanatory information contained in the notes and the data set out in the statement of cash flows are expressed in thousands of Euro. The consolidated financial statements at 31 December 2008 include the financial statements of the Parent Company, Nuovo Pignone Holding S.p.A., and of the companies directly or indirectly controlled by same at such date, as included in the scope of consolidation. The consolidated financial statements have been drawn up based on the financial statements approved by each company’s Management Body, as well as, where appropriate, also by the Shareholders of the individual companies included in the scope of consolidation; these financial statements have been reclassified in order to bring them into line with the layouts set forth by Articles 2424 and 2425 of the Italian Civil Code and adjusted where necessary to bring the accounting policies into line with those of the Group. The accounting policies used by the Group are those contemplated by Article 2426 of the Italian Civil Code, interpreted and supplemented by the accounting principles of the Italian Accounting Profession (Consiglio Nazionale dei Dottori Commercialisti), as modified by the Italian Accounting Standard Setter (OIC - Organismo Italiano di Contabilità) in connection with the company law reform. These consolidation financial statements have been audited by the firm KPMG S.p.A..

Scope of consolidation The scope of consolidation includes the financial statements of the Parent Company and of the Italian and foreign companies over which the Parent Company directly or indirectly exercises control pursuant to Article 26 of Legislative Decree 127/91, with the exception of some subsidiaries considered immaterial which have been measured using the equity method. The Group’s organisation as at 31 December 2008 comprises the following: I

Direct control by Nuovo Pignone Holding S.p.A. over the companies: Nuovo Pignone S.p.A., GE Trasportation Systems S.p.A., Bently Nevada Italia S.r.l., Corporacion Nuovo Pignone de Venezuela S.A., Jenbacher S.r.l., GE Industrial Financing Ireland Ltd., GE Sensing & Inspection Technologies S.r.l., all wholly-owned; Nuovo Pignone International S.à r.l., 99.99% owned and GE Medical Systems Information Technologies S.r.l., 86.75% owned;

I

Indirect control by Nuovo Pignone Holding S.p.A. over the companies: GE Capital Funding Services S.r.l.., Fondazione Pignone (100% owned through Nuovo Pignone S.p.A.), Nuovo Pignone International S.à r.l. (0.01% owned through GE Industrial Financing Ireland), 93

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Pignone Engineering (99.99%, owned through Nuovo Pignone International S.à r.l.), Pignone Inc. (100% owned through Nuovo Pignone International S.à r.l.); GE Medical Systems Italia S.p.A., GE Healthcare Clinical Systems S.r.l. (formerly Datex Ohmeda S.r.l.), GE Healthcare (formerly Amersham Health S.r.l.) 100% owned by GE Medical Systems Information Technologies S.r.l., and Consorzio Tragaz (50% owned). On 10 January 2008 the Parent Company sold its investment in Thermodyn S.A.S. to GE Energy Holding S.A.S. for the price of 71,300 thousand Euro as defined by way of appropriate appraisal report, achieving a capital gain of 11,814 thousand Euro, which was recorded under the Income Statement item “C.16 Other financial income”. On 29 August 2008, the subsidiary Nuovo Pignone S.p.A. resolved a share capital increase (of 129 thousand Euro, with an overall share premium of 910 thousand Euro) reserved for the contribution by IRMA Service S.p.A. of its business line concerned with engineering and technical support activities on plant and machinery in the Oil & Gas sector. The contribution was carried out on 24 September 2008 based on the special appraisal drawn up by an expert appointed by the Florence Court. Again on 24 September 2008, Nuovo Pignone Holding S.p.A. sold to IRMA Service S.p.A. its entire shareholding in IRMA Service S.p.A., with purchase by the latter of treasury shares; the price paid, amounting to 721 thousand Euro, generated a capital gain of 36 thousand Euro, which was recorded under the Income Statement item “C.16 Other financial income”. On 27 November 2008, IRMA Service S.p.A. sold to Nuovo Pignone Holding S.p.A. the shares in Nuovo Pignone S.p.A. assigned to IRMA at the time of contribution of the business line; the price paid for the shares was 2,324 thousand Euro. On 4 December 2008 the subsidiary Nuovo Pignone International Scotland approved the distribution of a dividend of 160,508 thousand Euro to its parent company Nuovo Pignone International S.à r.l.. At the same time, Nuovo Pignone International S.à r.l. sold its investment in Nuovo Pignone International Scotland (corresponding to 99.81%) to GE Holding Luxembourg S.à r.l.. The sale price (1,246,533 thousand Euro), which was less than the investment's carrying value (1,457,375 thousand Euro), determined a loss of 104,113 thousand Euro - net of the consolidation reserve existing at the time of sale - which was recorded under the Income Statement item “Financial expenses - subsidiaries”. On the same date, Nuovo Pignone International S.à r.l. approved a resolution for full restitution of the share premium reserve. The amount in question, totalling 1,298,547 thousand Euro, was paid as indicated below: I

1,201,613 thousand Euro in favour of GE Industrial Financing Ireland Ltd. (GEIFI), in restitution of the share premium that originated following subscription of the share capital increase approved on 12 March 2007;

I

96,933 thousand Euro in favour of Nuovo Pignone Holding S.p.A., in restitution of the share premium that originated in 1996 at the time of translation from Dollars to Lire of the share capital pertaining to the company incorporated under Luxembourg law and the increase in share capital fully subscribed by Nuovo Pignone Holding S.p.A..

Again on 4 December 2008, subsidiary GEIFI, having drawn up an interim accounting statement, approved a resolution to repay to Nuovo Pignone Holding S.p.A. the capital contribution carried out on 12 March 2007, for the amount of 1,199,985 thousand Euro.

94

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Management and Coordination Articles 2497 - 2497 sexies of the Italian Civil Code require Parent Companies to indicate in their documents, correspondence, and through registration with a special section of the Companies’ Register, if their activities are subject to management and coordination by other parties. Article 2497 sexies establishes, on a presumptive basis and unless proved otherwise, that the management and coordination activity is exercised by the entity required to consolidate the company or which in any case controls it pursuant to Article 2359 of the Italian Civil Code. After careful thought and analysis and taking account of the relevant theoretical developments, in view of the ongoing relations with the ultimate parent General Electric Company, it is currently considered appropriate to indicate the latter as being the party exercising management and coordination activity. We particularly point out that the management and coordination activity exercised by General Electric Company consists in the indication of strategic and operational guidelines for the Group, the definition of the internal control and governance models and corporate structures, the issuance of a Code of Ethics to be adopted at Group level (The Spirit & The Letter) and the elaboration of general policies for the management of human and financial resources. General Electric Company's 2008 financial statements are set out in the notes to the financial statements of the Parent Company at 31 December 2008.

Companies excluded from the scope of consolidation In view of its ongoing liquidation proceedings, which were completed in 2009, GE Healthcare IVD S.r.l. was excluded from the scope of consolidation. Other subsidiaries, deemed immaterial, are measured using the equity method, as indicated below.

Companies consolidated using the line-by-line method

Company

Direct subsidiaries Nuovo Pignone S.p.A. Nuovo Pignone International S.à r.l. GE Transportation Systems S.p.A. GE Medical Systems Information Technologies S.r.l. Jenbacher S.r.l. Corporacion Nuovo Pignone de Venezuela S.A. Bently Nevada Italia S.r.l. GE Industrial Financing Ireland Ltd. GE Sensing & Inspection Technologies S.r.l. Indirect subsidiaries Pignone Engineering Ltd. GE Capital Funding Services S.r.l. GE Healthcare S.r.l. (ex Amersham Health S.r.l.) GE Healthcare Clinical Systems S.r.l. (ex Datex Ohmeda S.r.l.) GE Medical Systems Italia S.p.A. Everest Vit Italia S.r.l. Fondazione Pignone Consorzio TRAGAZ

Registered office

Currency

Share/quota capital

% of ownership

Florence Luxembourg Florence Milan Bolzano Caracas Milan Dublin Milan

Euro Euro Euro Euro Euro Bs Euro Usd Euro

98,599,780 95,082,175 1,560,000 1,736,137 258,000 5,384,432 80,000 100 10,000

100.00 100.00 100.00 86.75 100.00 100.00 100.00 100.00 100.00

London Milan Milan

Gbp Euro Euro

70,001 35,120,000 5,164,568

100.00 100.00 86.75

Milan Milan Milan Florence Milan

Euro Euro Euro Euro Euro

5,200,000 5,000,000 15,000 100,000 51,646

86.75 86.75 100.00 100.00 50.00

95

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Companies consolidated using the equity method Company

Registered office

Currency

Share/quota capital

% of ownership

Indirect subsidiaries Pignone Inc.

New York

Usd

2,000

100.00

Subsidiary GE Capital Funding Services S.r.l. is consolidated using the line-by-line method, even though it operates in the financial rather than the industrial sector, since it carries out its activity exclusively vis-à-vis companies of the General Electric Group, and the Nuovo Pignone Group in particular.

Consolidation principles The principles applied in drawing up these financial statements, which have not changed with respect to those used for the previous year, were as follows:

96

I

the book value of investments consolidated based on the line-by-line method is eliminated against the shareholders’ equity of the investee companies. The difference between the cost of acquiring the investments and the relative portion of shareholders’ equity at the time of acquisition is charged to the specific asset and liability items based on the evaluation at replacement cost carried out at the time of purchase. The residual negative differences, if any, are recorded under shareholders’ equity as a “Consolidation reserve”; positive differences, if any, that are not attributable to specific asset and liability items of the balance sheet, are recorded under assets as “Goodwill arising on consolidation” or, where there is no future usefulness, are deducted against the “Consolidation reserve” up to the full amount of same;

I

the assets, liabilities, costs, charges, revenues and income of the companies included within the scope of consolidation using the line-by-line method, with the exception of the foregoing as regards recent acquisitions, are reported in the consolidated financial statements (costs and revenues in proportion to the period of ownership of the investment), regardless of the percentage held by the parent company;

I

the dividends, revaluations and write-downs of investments in companies included within the scope of consolidation as well as the capital gains and losses arising from disposals of such investments at infragroup level are eliminated;

I

when calculating Group shareholders’ equity and profit or loss for the year, the minority interests, if any, are shown in appropriate items of the balance sheet and income statement;

I

receivables and payables as well as costs, charges, revenues and income between the companies included within the scope of consolidation are eliminated, as are the guarantees, commitments and risks relating to the companies in question;

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

I

the profits and losses arising from transactions carried out between the companies included within the scope of consolidation and not yet realised as at the balance sheet date are eliminated. Elimination does not take place where the amount of such profits and losses is not significant.

Criteria for the translation of financial statements drawn up in currencies other than Euro The translation to Euro of the various currencies in which the financial statements of foreign companies are expressed is carried out at the prevailing year-end exchange rates for balance sheet items and at the average exchange rate for the year as regards income statement items. Exchange rate differences arising from the use of different exchange rates for the balance sheet and income statement and the differences arising from translation of the initial shareholders’ equity at an exchange rate other than the one used in the previous year are charged to the item “Consolidation reserve”. The following exchange rates were used for the translation to Euro of financial statements:

Currency

Exchange rate at 31.12.2008

Average exchange rate for 2008

Exchange rate at 31.12.2007

Average exchange rate for 2007

US Dollar

1.4708

1.3918

1.4721

1.3705

British Pound

0.7963

0.9524

0.7334

0.6848

Venezuelan Bolivar

2.9886

3.1585

3,161.04

2,942.83

On 6 March 2007 the Republic of Venezuela, by way of Currency Redenomination Decree Law no. 38,638, established that starting from 1 January 2008 the unit of account for the monetary system of the Republic of Venezuela was to be expressed as the equivalent of 1,000 current Bolivars; the Bolivars resulting from such translation, represented by the symbol Bsf, will be divisible in 100 cents. Accordingly, any amount expressed in Bolivars as at 1 January 2008 has been translated to the new currency unit by dividing by 1,000 and rounding to the nearest cent.

National tax consolidation scheme Starting from 2004, the Parent Company has exercised its option for the national tax consolidation scheme in its capacity as parent, pursuant to Articles 117 et seq. of the Italian Consolidated Income Tax Act (T.U.I.R.). Adoption of the consolidated tax system allows Nuovo Pignone Holding S.p.A. to offset the company’s positive and negative taxable income for IRES (corporate tax) purposes against those of the subsidiaries having exercised the option, bearing in mind that the tax losses accrued during periods prior to introduction of group taxation can be used only by the companies that have generated them. Apart from the offsetting of positive and negative taxable income pertaining to individual companies exercising the option in question, the national tax consolidation scheme produces other positive effects, such as for example the removal of certain limitations on the deductibility

97

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

of financial charges and the possibility to carry out transfers and contributions of individual assets within a regime of tax neutrality. The relationships arising from participation in the national tax consolidation scheme, as well as the reciprocal responsibilities and related formalities, obligations and benefits, are regulated via specific “National Tax Consolidation Rules”, subscribed to by all companies taking part in the national tax consolidation scheme, which set forth a common procedure for application of normative and regulatory provisions. With regard to the financial transactions, the Rules require the subsidiaries with positive taxable income to transfer to the parent company the financial resources proportionately corresponding to the higher tax due by the latter as a result of their participation in the national tax consolidation scheme; companies with negative taxable income transfer their losses to the parent company, without compensation, since they are not entitled to any indemnity. In the event that a subsidiary subsequently leaves the national tax consolidation scheme, the transferred losses remain with Nuovo Pignone Holding S.p.A.. The IRES tax related balances correspond to the transactions between the parent company Nuovo Pignone Holding S.p.A. and the consolidated companies. The following companies have elected to participate in the national tax consolidation scheme for 2008: Nuovo Pignone Holding S.p.A. (parent), GE Transportation Systems S.p.A., GE Medical Systems Italia S.p.A., Bently Nevada Italia S.r.l., GE Capital Funding Services S.r.l., Jenbacher S.r.l, GE Inspection Technologies S.r.l., GE Healthcare S.r.l. (formerly Amersham Health S.r.l.), GE Medical Systems Information Technologies S.r.l., GE Healthcare Clinical Systems S.r.l. (formerly Datex- Omheda), GE Sensing & Inspection Technologies S.r.l..

Accounting policies The accounting policies to which reference has been made in drawing up the consolidated financial statements are those laid down by current statutory provisions, taking into consideration the new company law regulations introduced by Legislative Decree no. 6 of 17 January 2003 and subsequent amendments or supplements thereto. Such accounting policies have been interpreted and supplemented by the accounting principles of the Italian Accounting Profession (Consiglio Nazionale dei Dottori Commercialisti e dei Ragionieri), as modified by the Italian Accounting Standard Setter (OIC - Organismo Italiano di Contabilità) and, in the absence thereof, by those of the International Accounting Standards Board (IASB). These policies have been agreed with the Board of Statutory Auditors wherever required by law. With a view to applying standardised accounting policies, where effects are significant, the financial statements of foreign companies governed by rules other than those set forth by the Italian Civil Code have been appropriately adjusted. For the purpose of these consolidated accounts, the financial statements of GE Capital Funding Services S.r.l. have been reclassified in accordance with Articles 2423-bis et seq. of the Italian Civil Code.

Intangible fixed assets Intangible fixed assets are recorded at acquisition or production cost, including directly attributable ancillary charges. Amortisation, charged directly against the specific items, is

98

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

systematically calculated on a straight-line basis according to the residual useful life of the fixed assets and more specifically: Start-up and capital costs

Five years

Industrial patents

Twenty years

Intellectual property rights

Five years

Concessions and licences

Five years

Goodwill

Ten years

Leasehold improvements

Remaining term of lease or useful life, whichever is shorter

Goodwill arising on consolidation

Ten years

Goodwill arising on consolidation is amortised according to the periods considered to represent useful life based on the market observations and expectations as regards business duration and development, which have led to the recognition of such higher value at the time of acquiring individual investee companies. Where the recoverable amount, at the balance sheet date, is permanently lower than the net book value of the fixed assets based on the abovementioned criteria, their value is reduced and the adjustment charged to the income statement as a write-down. In the year during which the reasons for the write-downs carried out cease to apply, the value of the intangible fixed assets is reinstated and the adjustment is taken to the income statement as a revaluation.

Tangible fixed assets Tangible fixed assets – including grants received from third parties – are recorded at acquisition or production cost, adjusted, in the case of Italian companies, to reflect revaluations carried out pursuant to law, and comprise related ancillary costs directly attributable to same. Depreciation, charged directly against cost, is calculated on a straight-line basis over the estimated useful life. The depreciation rates used are as indicated in the comment on the item “Tangible fixed assets”. Ordinary maintenance and repair expenses are charged to the income statement, whereas maintenance expenses of an incremental nature are charged to balance sheet assets and depreciated in relation to the residual useful life of the assets to which they refer. Equipment having a per unit cost of up to 516.46 Euro is not capitalised bearing in mind that its useful life will not normally last beyond one year and in view of its scarce significance in relation to the group’s assets. Assets under construction are stated at cost and depreciated as from the year during which they become available and ready for use. In the case of tangible fixed assets where the recoverable amount, at balance sheet date, is permanently lower than their net book value based on the abovementioned criteria, the value is reduced to the extent of such recoverable amount and the adjustment charged to the income statement as a write-down. In the year during which the reasons for the writedowns carried out cease to apply, the value of the tangible fixed assets is reinstated and the adjustment is taken to the income statement as a revaluation. The Group has not acquired any significant tangible assets under finance leases.

99

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Financial fixed assets Investments in companies not consolidated on a line-by-line basis are measured as follows: I

subsidiaries that are considered immaterial have been measured using the equity method. The risk, if any, deriving from losses in excess of shareholders’ equity (capital deficit) is recorded under the liability item “Provisions for risks and charges – other provisions”;

I

associates and other companies have been measured at acquisition cost, including directly attributable ancillary charges, adjusted to reflect impairment losses determined by way of reference to shareholders’ equity as shown in the latest available financial statements or balance sheet.

Other securities are stated at cost, adjusted where necessary in case of impairment. In the year when the reasons for write-downs carried out cease to apply, the financial fixed assets are revalued and the adjustment is taken to the income statement as a revaluation. Investments held for trading or destined for sale are shown in the balance sheet as part of working capital.

Inventories Inventories are measured in accordance with the following criteria: I

raw materials, consumables, supplies and finished goods are recorded at the lower of purchase or production cost, determined on a weighted average cost basis, or their estimated realisable value, determined by market conditions. In case of obsolete or slow-moving materials, if significant, these are written down in consideration of their likely usage or their estimated realisable value. In the year during which the reasons for write-downs cease to apply, inventories are revalued and the adjustment is taken to the income statement as a revaluation;

I

materials in transit or held by third parties are recorded at their actual purchase cost;

I

work in progress and semi-finished products are recorded based on accumulated production costs.

Long-term (beyond twelve months) contract work in progress is valued based on the costs accrued with reasonable certainty in accordance with the percentage-of-completion method. On the basis of such criterion, the costs, revenues and contractual margin are recognised according to the status of production activity, determined in reference to the ratio between the costs incurred at the date of evaluation and the total estimated cost of the contract (cost-tocost ratio). Contract work in progress is valued on the basis of a best estimate of costs, revenues and contractual margin, carried out as at the reporting date. If completion of a contract is expected to give rise to a potential loss at contractual margin level, this loss is fully recognised during the year in which it is reasonably foreseeable. Such loss, up to an amount corresponding to the contract's status, is reflected in the evaluation of work in progress and, for the remaining portion, by way of appropriate entry to the item 100

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

“Provisions for risks and charges” under Balance Sheet liabilities. Contract work in progress is stated net of revenues settled on a definitive basis.

Receivables and payables Receivables are stated net of the “bad debt provision” in order to report their estimated realisable value. Payables are shown in the financial statements at their nominal value.

Financial assets not of a fixed nature Securities other than long-term are valued at the lower of cost and realisable value based on the trend in the market.

Foreign currency receivables and payables Foreign currency receivables and payables, unless covered by specific exchange rate risk hedges, are stated in the balance sheet at the year-end exchange rates. The gains and losses arising from this translation are recognised in the income statement.

Liquid funds Liquid funds are recorded at nominal value or estimated realisable value where doubts exist as to the solvency of the debtor or in the case of currency restrictions on the part of such debtor’s country of residence. Foreign currency deposits are recorded using the exchange rate prevailing at year end.

Prepayments and accrued income, accrued expenses and deferred income Prepayments and accrued income, accrued expenses and deferred income are calculated in order to match costs and revenues spanning two or more years to the period to which they relate. Accruals relating to foreign currency transactions are recorded at the exchange rate prevailing at year-end. In particular, prepayments include the portion of substitute tax pertaining to the capital gain that emerged at the time of contribution of the industrial business unit to Nuovo Pignone S.p.A. on the part of the Parent Company; the capital gain was fully reversed in the consolidated accounts during 1998, whereas the substitute tax was considered to pertain to subsequent years. This tax is charged to the consolidated income statement on a straight-line basis, over the amortisation period of the activities revalued following the contribution transaction, with special regard to assets and goodwill, in order to match from a temporal perspective the substitute tax charge with the future benefit in terms of the tax saving deriving from the fiscal relevance of amortisation of the contributed operations on the part of the transferor company. In this connection, it is worth mentioning that as from 2004, the transferor Nuovo Pignone S.p.A. 101

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

modified the fiscally driven amortisation rate for the goodwill recognised in 1998, changing it from 1/10 to 1/20 of the cost originally recorded in 1998; starting from 2006, the amortisation rate was again modified to 1/18 of the cost originally recorded; the substitute tax prepayment was therefore also determined taking account of the new amortisation period. During the course of 2008 subsidiary Nuovo Pignone S.p.A. decided to take advantage of the option provided by Law 244/2007 (2008 Finance Act) which allows the realignment of fiscal values to their higher statutory values, via the application of substitute tax to existing differences, if any. The option was exercised, at the time of submitting the 2007 tax return, with regard to the difference existing between the fiscally-driven and statutory value of goodwill, amounting to 531 million Euro. The resulting substitute tax, in the amount of 85 million Euro, was deferred in the consolidated accounts and will be charged to the income statement on a straight-line basis to match the tax deduction of amortisation pertaining to the goodwill released.

Lump sums granted Plant-related grants are recorded in the year during which they are authorised by the relevant granting body, when all the required conditions have been satisfied. Grants for operating expenses are taken to the income statement on an accruals basis.

Provisions for risks and charges The provisions for risks and charges include specific certain or probable costs and charges, the amount or date of occurrence of which was impossible to determine at the balance sheet date. The provisions in question have been calculated, on an accruals basis, based on a realistic estimate of the charge to be incurred. With respect to ongoing long-term maintenance contracts, by way of suitable accruals for future risks and charges, the Group aims to provide for the risks, if any, pertaining to the future management of the contracts in question. The following accounting treatment is adopted for utilisation of the provisions for risks and charges: I

in the case of utilisation to cover charges, by recording in the income statement as a reduction against the charges incurred;

I

in the case of unused funds, by release to the income statement under the item “Other revenues and income”.

Employees' severance entitlement Law 296 of 27 December 2006 (“2007 Finance Act”) and subsequent Decrees and Regulations issued during 2007, within the scope of the pension system reform, introduced major changes regarding the allocation of amounts accruing in the provision for Employees’

102

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Severance Entitlement (TFR). More specifically, the new TFR flows can be allocated by employees to supplementary pension schemes or may be maintained within the company (for companies with less than 50 employees), or transferred to the Italian State Social Security Institution INPS (in the case of companies with more than 50 employees). Based on these rules and by way of reference to the generally accepted interpretation, the Group decided to adopt the following accounting criteria: I

for TFR quotas accrued at 31 December 2006, the related provision is affected exclusively as a result of transfers to social security institutions, disbursements in favour of personnel (including by way of advance) or revaluation as required by current legislation.

I

for TFR quotas maturing subsequently, the cost is recorded on an accruals basis over the employment relationship, in accordance with legislation and labour contracts, whereas the related payable is eliminated from the balance sheet upon payment to the supplementary pension scheme or to the Treasury fund at INPS.

Memorandum accounts The memorandum accounts comprise: I

endorsements, sureties and other forms of guarantee given as collateral for third-party obligations, recorded at the amount corresponding to the Group’s actual commitment at the balance sheet date;

I

collateral given by the Group, stated at nominal value, less the amount shown in “Payables” under balance sheet liabilities;

I

outstanding bills discounted or sent for collection, for which recourse action is pending at the balance sheet date, stated at nominal value;

I

commitments for the sale of goods and services recorded based on the contractual agreements outstanding at the balance sheet date;

I

third party assets held by the Group, stated at their market value.

Memorandum accounts expressed in foreign currency are aligned to year-end exchange rates or to the negotiated forward rate, where defined in the contract. The memorandum accounts also include derivative financial instruments, recorded at the time the contract was signed based on the nominal value of the contract. In order to hedge the risk of exchange rate and price variations, the Group enters into derivative contracts to cover specific transactions, or net exposures. More specifically, forward contracts are entered into for the purpose of hedging exchange risks in respect of both assets and liabilities shown in the balance sheet and future commitments.

103

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Revenues and income, costs and charges Revenues and costs are recorded in the income statement on an accruals basis and in observance of the principle of prudence. Revenues and income, costs and charges are shown net of returns, discounts and rebates and premiums. With regard to contract work, the Group records under revenues the amount paid for individual supplies at the time of definitive transfer to the customer, based on the applicable contractual terms, which normally coincides with the delivery of the individual supply or its final acceptance, where required by the contract, whereas the value of individual supplies that are completed, but not yet delivered or accepted, continues to be shown under inventories of contract work in progress. Revenues from the provision of services are recorded on completion of such services. Ongoing maintenance agreements are considered as long-term contracts and the related revenues are recorded on an accruals basis according to the fees payable, whereas related costs are recognised in the income statement for the period during which they are incurred. The sales of medical equipment made by GE Medical Systems S.p.A. through lease companies are recorded at the time of the asset’s transfer to the lease company; the supplier invoices received from the lease company (lease back) and the customer invoices (release) issued to the end customer are then subsequently recorded. Factoring commission income, which remunerates the various services provided by GE Capital Funding Service S.r.l., is recorded on an accruals basis and matched to the duration of the service provided, taking account of both the contractual maturity of the receivables acquired and related average collection times. This commission is recorded under the item “Other revenues”. The gains and losses deriving from exchange rate risk hedging contracts (forwards or options) against specific contractual commitments (orders) for the sale and purchase of goods and services in foreign currency are charged to the income statement at the date of closure of the relative contract. Transactions with companies of the Nuovo Pignone Group and the General Electric Group took place at normal market conditions.

Income taxes Income taxes are calculated based on a realistic forecast of taxable income; the expected payable is recorded under the item “Tax payables” net of advance payments made, tax withholdings pursuant to law and dividend tax credits. Following participation in the national tax consolidation scheme, current IRES (corporate tax) is calculated based on the taxable income of Nuovo Pignone Holding S.p.A. and its subsidiaries. Deferred tax assets and liabilities are calculated on the temporary differences between the carrying value of assets and liabilities recorded in the balance sheet and the related fiscal values, as well as on consolidation entries, where necessary. Their calculation is performed by applying the tax rates for the periods during which such temporary differences are expected to reverse. Both deferred tax assets and the anticipated future benefits of tax loss carryforwards are recorded wherever there is reasonable certainty that it will be possible to recover them.

104

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

CONSOLIDATED BALANCE SHEET - ASSETS Intangible fixed assets (Item B. I) These amount to 87,790 thousand Euro and comprise the following: (thousands of Euro) Historical cost Start-up and capital costs Opening balance - Changes in scope of consolidation - Purchases - Disposals - Transfers - Amortisation - Adjustments Total Industrial patent and intellectual property rights Opening balance - Changes in scope of consolidation - Purchases - Disposals - Transfers - Amortisation Total Concessions and licences Opening balance - Changes in scope of consolidation - Disposals - Purchases - Transfers - Amortisation Total Goodwill Opening balance - Changes in scope of consolidation - Purchases - Transfers - Disposals - Amortisation Total Assets under development and payments on account Opening balance - Changes in scope of consolidation - Purchases - Amortisation - Transfers Total Other assets Opening balance - Changes in scope of consolidation - Purchases - Disposals - Transfers - Amortisation - Adjustments Total Consolidation differences Opening balance - Changes in scope of consolidation - Write-downs - Purchases - Transfers - Amortisation Total Closing balance

Amortisation

810

(762)

(109)

109 (14)

701

(667)

113,061 (3,513) 6,744 (2,691) 675

(87,131) 822 2,691

114,276

(11,152) (94,770)

126

(126)

126

(126)

8,089

(7,289)

8,089

(601) (7,890)

1,526

0

2,206 (675) 3,057 6,525 21 278 (161)

0 (5,345) (20) 63 (332)

6,663

(5,634)

243,574 (33,953) (14,659)

(125,342) 13,054

194,962 327,874

(18,709) (130,997) (240,084)

Total

48 0 0 0 0 (14) 0 34

25,930 (2,691) 6,744 0 675 (11,152) 19,506 0 0 0 0 0 0 0 800 0 0 0 0 (601) 199

1,526 0 2,206 0 (675) 3,057 1,180 1 278 (98) 0 (332) 0 1,029 118,232 (20,899) (14,659) 0 0 (18,709) 63,965 87,790 105

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Start-up and capital costs (Item B. I. 1) These total 34 thousand Euro net of accumulated amortisation (667 thousand Euro) and essentially refer to the costs incurred in connection with subsidiaries' incorporation and expansion expenses.

Industrial patents and intellectual property rights (Item B. I. 3) These amount to 19,506 thousand Euro net of accumulated amortisation (94,770 thousand Euro) and refer to costs incurred to purchase and implement software applications and integrated information systems. The changes in the scope of consolidation, corresponding to a net book value of 2,691 thousand Euro, concern the sale of the investment in Thermodyn S.A.S., previously consolidated using the line-by-line method. The purchases and transfers during the year refer to charges incurred to upgrade the Group's IT platforms; more specifically, there were implementations and/or upgrades of Oracle Application carried out by subsidiaries Nuovo Pignone S.p.A. and GE Transportation Systems S.p.A., in addition to the new licences purchased by Jenbacher S.r.l. for the use of operational and accounting software.

Goodwill (Item B. I. 5) This item stands at 199 thousand Euro net of accumulated amortisation (7,890 thousand Euro). The sum in question refers to goodwill arising from the acquisition, in previous years, of the companies Elscint Italia S.r.l., Medical Device Services S.r.l. and Sonotron Vingmed S.p.A. by GE Medical Systems Italia S.p.A..

Assets under development and payments on account (Item B. I. 6) This item amounts to 3,057 thousand Euro and mainly includes the costs incurred for the implementation of various software applications.

Other assets (Item B. I. 7) Other assets, totalling 1,029 thousand Euro net of accumulated amortisation (5,634 thousand Euro), primarily refer to the costs incurred for improvements carried out on premises leased by the Group’s companies. The increase of 278 thousand Euro refers to the expenses incurred by GE Medical Systems Italia S.p.A. to refurbish the premises of some branches and the costs pertaining to alterations carried out on a new Bently Nevada Italia S.r.l. showroom.

106

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Goodwill arising on consolidation (Item B. I. 8) This item amounts to 63,965 thousand Euro net of accumulated amortisation (130,997 thousand Euro) and write-downs (14,659 thousand Euro). The goodwill arising on consolidation may be broken down as follows: (thousands of Euro) Goodwill arising on consolidation breakdown

Amortisation period (years)

Historical cost

Accumulated amortisation 2007

GE Medical Systems Italia S.p.A.

10

128,323

(76,992)

Variation in scope of consolidation

Writedowns

Amortisation Accumulated for amortisation 2008 2008

Residual value

(12,833)

(89,825)

38,498

(3,110)

(21,764)

9,326

0

0

0

GE Transportation Systems S.p.A.

10

31,090

(18,654)

Thermodyn S.A.S.

20

34,799

(13,054)

Jenbacher S.r.l.

10

16,156

(6,460)

(1,617)

(8,077)

8,079

GE Capital Funding Services S.r.l.

10

2,757

(1,104)

(277)

(1,381)

1,376

GE Healthcare S.r.l. (ex Amersham Health S.r.l.)

10

21,306

(6,393)

(36)

(6,429)

218

GE Healthcare Clinical Systems S.r.l. (ex Datex Omeda S.r.l.)

10

3,360

(1,008)

(336)

(1,344)

2,016

GE Medical Systems Information Technologies S.r.l.

10

2,734

(1,374)

(195)

(1,569)

1,165

GE Sensing & Inspection Technologies S.r.l.

10

3,050

(304)

(305)

(609)

2,441

EVEREST VIT Italia S.r.l.

10

0

846

243,575

(125,343)

(18,709)

(130.997)

63,965

Total

(21,745)

(14,659)

846 (20,899)

(14,659)

The 14,659 thousand Euro write-down of the consolidation difference pertaining to the subsidiary GE Healthcare S.r.l. reflects the need to bring the higher value attributed at the time of acquisition into line with the value determined based on the appraisal report drawn up at the time of acquiring full ownership of the Healthcare business unit, in which the Group holds an 86.75% controlling stake; in this connection, reference is made to the "Outlook" section of the report on operations. The remaining goodwill arising on consolidation is considered recoverable in 10 years based on the future income prospects of the investee companies.

107

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Tangible fixed assets (Item B. II) These total 241,657 thousand Euro and comprise the following: (thousands of Euro) Historical cost Land and buildings Opening balance - Changes in scope of consolidation - Purchases - Transfers - Disposals - Depreciation - Adjustments Closing balance Plant and machinery Opening balance - Changes in scope of consolidation - Purchases - Transfers - Disposals - Depreciation - Adjustments Closing balance Industrial and commercial equipment Opening balance - Changes in scope of consolidation - Purchases - Transfers - Disposals - Exchange rate gains (losses) - Adjustments - Rettifiche Other assets Altri beni Opening balance - Changes in scope of consolidation - Purchases - Transfers - Disposals - Exchange rate gains (losses) - Depreciation - Adjustments Closing balance Assets under construction and payments on account Opening balance - Changes in scope of consolidation - Purchases - Transfers Closing balance Total

108

Depreciation

Total

120,275 (2,517) 7,269 7,574 (114)

(44,353) 1,270

132.487

(48,702)

75,922 (1,247) 7,269 7,574 (104) (5,629) 0 83,785

391,865 (16,219) 31,138 2,102 (4,487)

(263,900) 8,793

404,399

(279,067)

109,484

(100,598)

3,482 1,293 (2,335) 535

10 (5,629)

1,013 (24,973)

1,255 (401) (4,529)

112,459

(104,273)

72,525 (2,492) 2,099 (139) (3,263) (43)

(61,907) 1,268

68,687

(60,598)

13,191

0

3,216 12 (3,187)

127,965 (7,426) 31,138 2,102 (3,474) (24,973) 0 125,332 8,886 0 3,482 1,293 (1,080) 134 (4.529) 0 8,186 10,618 (1,224) 2,099 (139) (47) (31) (3,187) 0 8,089

13,922 (10,830) 16,283

0

13,191 0 13,922 (10,830) 16,283

734,315

(492,640)

241,675

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

The item “Other assets” comprises furniture, furnishings and office machines, personal computers, servers, printers and terminals; the item "Assets under construction and payments on account" includes the costs incurred for investments not yet completed at the end of the year. The variation in the scope of consolidation refers to the sale of the investment in Thermodyn S.A.S., previously consolidated using the line-by-line method, which determined an overall decrease of 9,906 thousand Euro in the book value of tangible fixed assets, and, for the residual amount, to the inclusion in the Group of Everest Vit Italia S.r.l.. Depreciation for the year, amounting to 38,318 thousand Euro, was calculated on a straightline basis applying the ordinary rates set out below over the remaining useful life of the assets. Land and buildings

3 : 10 %

Plant and machinery

10 : 20 %

Industrial and commercial equipment

20 : 40 %

Other assets

12 : 20 %

Financial fixed assets (Item B. III) The breakdown of investments and changes that occurred during the year is as follows:

(thousands of Euro) Registered office

Currency

Nominal value of shares/quotas

Number of shares or quotas

Share/quota capital

Number of shares/ quotas held

Percentage of ownership

Carrying amount

Subsidiaries – measured using the equity method Pignone Inc.

New York

USD

10

200

2

200

100

Total

2,283 2,283

Other companies – measured using the cost method EniAcqua Campania S.p.A.

Naples

Euro

1

Consorzio Technoeastital

Rome

Euro

Consorzio Finoper Firenze S.r.l.

Florence

Euro

Consorzio S.T.I Nord Est COGEI

Rome

Euro

Total

4,950,000

4,950,000

24.75

13,169.65

1

139,443.36

0

511.29

100

51,129.23

0

5,164.57

10

51,645.69

0

0.5

27

27

109

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

The change in investments during 2008 is detailed below:

(thousands of Euro) Balance at 31/12/2007 Company name

Historical (Write-downs)/ cost revaluations

Net value

Purchases/ Variation in Exchange rate Carrying disposals consolidation gains amount as method (losses) at 31/12/2008

Subsidiaries Pignone Inc.

1

2,285

2,286

(3)

2,283

Total

1

2,285

2,286

(3)

2,283

IRMA Services S.r.l.

436

249

685

Total

436

249

685

EniAcqua Campania S.p.A.

27

0

27

Consorzio Technoeastital

13

-13

0

Consorzio Finoper Firenze S.r.l

2

-2

0

Consorzio S.T.I Nord Est COGEI

5

-5

0

47

-20

27

Associates

0

-685

-

-685

0

Other companies

Total

27

0

0

0

27

We point out the contribution of the business unit to Nuovo Pignone S.p.A. on the part of subsidiary IRMA Service S.r.l., which took place on 24 September 2008, as previously described. The liquidation process concerning subsidiary GE Healthcare IVD Italia S.r.l. was completed in March 2008, with a profit of 1.3 million Euro.

Inventories (Item C. I) The breakdown and changes are as follows:

(thousands of Euro) Opening balance Original Write-down value provision A B Raw materials, consumables and supplies Work in progress and semi-finished products Contract work in progress Finished goods Payments on account Total

153,404 154,208

-49,589

25,852

2,094,506

-54,906

Original Write-down value provision D E

Closing balance Original value F=A+D 128,883

Write-down Closing provision value G=C+E H=F-G

- 24,521

-5,478

153,365

-12,843

-185

141,365

-1,028

140,337

-

1,605,515

569,689

-

2,175,204

-

2,175,204

21,378

922

-101

26,774

- 4,575

22,199

-

155,527

-34,261

-

121,266

-

121,266

2,039,600

498,986.00

-5,764.00

2,593,492

- 60,670

2,532,822

-4,474

155,527

Opening value C 103,815

-843

1,605,515

Accounting variations during the year

- 55,067

73,816

Inventories at 31 December 2008 - comprising raw materials, consumables, supplies and finished goods – are measured by applying the weighted average cost method. At the end of the year the Group wrote down the aforesaid inventories by recording 110

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

appropriate provisions for the items “Raw materials” (55,067 thousand Euro) and “Finished goods” (4,575 thousand Euro), with special reference to inventories that can no longer be utilised in the production process. Contract work in progress, both long-term (2,080,689 thousand Euro) and with a duration of less than twelve months (94,515 thousand Euro), is stated inclusive of progress billings issued to customers for contracts not yet completed at 31 December 2008. These payments, amounting to 695,518 thousand Euro, are recorded under the balance sheet liability item "Payments on account". An adjustment has been made to semi-finished products by way of an appropriate writedown provision amounting to 1,028 thousand Euro to take account of losses to be incurred for the completion of some jobs.

Receivables (Item C. II) Receivables recorded under assets forming part of working capital amount to 2,447,219 thousand Euro and comprise the following: (thousands of Euro) Opening balance

Trade receivables Receivables due from subsidiaries - commercial - financial Total Receivables due from associates Receivables due from parent companies - commercial - financial Total Tax receivables Deferred tax assets Other receivables - other - financial Total Total

Variation in scope of consolidation

Original value A

Bad debt provision B

Net value C=A-B

1,605,798

-73,403

1,532,395

508

0

508

508 0

0 0

508 0

191 0 191 45,310 138,869

0 0 0 0

191 0 191 45,310 138,869

24,399 2,207,391 2,231,790 4,022,466

0 0 0 -73,403

24,398 2,207,391 2,231,789 3,949,062

Original value D

Bad debt provision E

-49,405

747

Changes during the year Original value F 26,012

Bad debt provision G

Original value H=A+D+F

-4,088

1,582,405

-76,744

1,505,661

0

0

0

0 0

0 0

0 0

614 330,769 331,383 21,248 137,124

0 0 0 0

614 330,769 331,383 21,248 137,124

22,552 429,251 451,803 2,523,963

0 0 0 -76,744

22,552 429,251 451,803 2,447,219

-508 0

-13,005 -779

-63,189

0

-508

-

423 330,769 331,192 -11,057 -966

747

-1,846 -1,778,140 -1,779,986 -1,435,313

Closing balance

0

-

0 -4,088

Bad debt provision I=B+E+G

Net value L=H-I

Trade receivables Trade receivables, all due within 5 years, are stated net of the relevant bad debt provision amounting to 76,744 thousand Euro. Trade receivables have declined with respect to the previous year, from 1,532,395 thousand Euro to 1,505,661 thousand Euro, above all following the sale of the investment in Thermodyn S.A.S. which involved a net decrease of 50,119 thousand Euro, partly offset by the inclusion in the group of Everest Vit Italia S.r.l. with a contribution of 1,461 thousand Euro, and by the growth in balances relating to the other subsidiaries. 111

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Receivables from parent companies This item stands at 331,383 thousand Euro (191 thousand Euro in 2007) and comprises the following: (thousands of Euro) General Electric Company

330,960

GE Energy Europe B.V.

423

Total

331,383

The amount due from parent company General Electric Company refers to a receivable of 300 thousand Euro relating to commercial transactions and short-term financial loans granted by subsidiary Nuovo Pignone S.p.A.; more specifically: I

125,023 thousand Euro, comprising loan principal of 125,000 thousand Euro and 23 thousand Euro in interest pertaining to the year, repayable on 2 March 2009, bearing interest at the rate of 3.29%;

I

205,637 thousand Euro, comprising loan principal of 205,000 thousand Euro and 637 thousand Euro in interest pertaining to the year, repayable on 29 January 2009, bearing interest at the rate of 3.29%.

Tax receivables The item “Tax receivables” is broken down as follows: (thousands of Euro) Amounts due within one year

Amounts due after more that one year

Total

VAT receivables

12,499

-

12,499

Tax authorities

3,794

30

3,825

Foreign tax receivables

2,776

-

2,776

4

976

979

1,169

-

1,169

20,242

1,006

21,248

Tax advance on employees' severance indemnities (Law 662/96) Income tax receivables Total

Deferred tax assets Deferred tax assets, totalling 137,124 thousand Euro (138,869 thousand Euro a year earlier), are calculated based on prevailing tax rates; they derive from the following temporary differences:

112

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

(thousands of Euro) Temporary differences

2008

2007

194,605

153,895

Taxed bad debt provision

70,039

49,249

Provision for write-down of inventories and work in progress

60,670

53,642

Provision for product warranties

44,599

59,996

Provision for litigation

15,773

15,125

Provision for reorganisation

Provision for future charges on completed contracts and other contractual risks

13,796

14,702

Provision for charges on orders showing a loss

8,949

44,644

Provision for penalties

5,199

20,051

Provision for agents' termination indemnity

2,633

2,196

Provision for maintenance contracts

500

500

25,515

19,458

6,131

16,195

Total temporary differences

448,409

449,653

Deferred tax assets

137,076

138,840

48

29

137,124

138,869

Tax write-back of Goodwill amortisation Others

Foreign deferred tax assets Total deferred tax assets

Other receivables Other receivables total 451,803 thousand Euro (2,231,789 thousand Euro at 31 December 2007), comprising 429,251 thousand Euro of a financial nature (2,207,392 thousand Euro at 31 December 2007) and 22,552 thousand Euro (24,397 thousand Euro at 31 December 2007) in trade receivables.

(thousands of Euro) Amounts due within one year Financial receivables

429,251

Amounts due after more that one

Total

-

429,251

Advance payments to suppliers

4,971

Due from foreign branches

4,704

-

4,704

4,971

Due from employees

4,084

-

4,084

Options

2,870

-

2,870

Guarantee deposits

2,264

227

2,493

Due from suppliers for penalties 1,521

-

1,521

Receivables from other entities

and backcharges

887

-

887

Due from insurance institutions

303

-

303

-

287

287

Due from SACE Other sundry debtors Total

434

-

434

451,289

514

451,803

113

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Financial receivables, inclusive of interest accrued for 2008, comprise loans granted to General Electric Group companies (263,453 thousand Euro), as well as receivables arising from the cash pooling (165,798 thousand Euro). The financial receivables, which are all repayable within one year and are settled at normal market conditions, include the following loans to companies of the General Electric Group: I

the sum of 194,275 thousand Euro corresponding to two loans granted to GE Holding Luxembourg S.à r.l. by the parent company and by Nuovo Pignone International S.à r.l., amounting respectively to 194,018 thousand Euro, earning interest at the rate of 3.29% and repayable on 4 February 2009, and to 257 thousand Euro, earning interest at the rate of 2.36% and repayable on 5 February 2009. These sums include the principal amount of loans totalling 194,166 thousand Euro and the portion of interest accrued during the year in the amount of 86 thousand Euro;

I

the sum of 69,178 thousand Euro concerning a loan granted by Nuovo Pignone International S.à r.l. to Vetco Gray Scandinavia A.S. earning interest at the rate of 6.58% and repayable on 19 March 2009;

The remaining amount concerns the centralised management of treasury operations at Nuovo Pignone S.p.A., and is broken down as follows: (thousands of Euro) Amersham Bioscience Gmbh GE Capital European Treasury Services Ltd.

117,165 32,452

GE Betz S.r.l.

8,143

GE Fanuc Automation Solution Europe S.A.

5,933

Inonics Italba

1,058

GE Oncura Italy

933

Vetco Gray Italia

101

GE Power Controls Italia S.p.A. GE Lighting S.r.l. Total

10 3 165,798

The decrease in other financial receivables stems from the sale of the investment in Nuovo Pignone International Scotland Ltd., which took place on 4 December 2008. The item “Advance payments to suppliers” comprises charges to suppliers covered by written agreements entered into with such suppliers as well as advance payments made during the last part of the year in respect of orders for machinery and medical equipment. Receivables from employees (4,084 thousand Euro) mainly refer to the payment on account made to its employees by Nuovo Pignone S.p.A. in respect of the performance bonus and end-of-year bonuses, and to amounts receivable as regards taxes to be paid back to the Company by employees on international secondment. These amounts are advanced by the Group, on behalf of employees, in the foreign countries where they perform their work and reimbursement thereof can be requested by such employees from the Italian tax authorities, in order to avoid double taxation on wages and salaries. The item “Options” (2,870 thousand Euro) includes the valuation at the lower of cost or market value of the premium paid for options on foreign currency purchases that are still outstanding at

114

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

year end; more specifically, the nominal value of the premium (4,524 thousand Euro) has been reduced to its fair value by way of an adjustment recorded in the "provision for the write-down of options" (1,654 thousand Euro) which is deducted directly from the receivable in question. Receivables from suppliers for penalties and backcharges include amounts charged to suppliers with whom agreements have been entered into. The item “other sundry debtors” includes a receivable to the subsidiary GE Transportation Systems S.r.l. for an award instigated against the Albanian Ministry of Transport. The Arbitration, concluded in 2008, awarded the subsidiary the amount of 11,167 thousand Euro, for loss of earnings and reimbursement of costs; in view of the Albanian Government's appeal against the award, as a precautionary measure the subsidiary has appropriated a risk provision to cover the full amount awarded by the Board of Arbitration.

Financial assets not of a fixed nature (Item C. III) This item was reduced to zero in 2008, following the liquidation of GE Healthcare IVD Italia S.r.l. owned by subsidiary GE Medical Systems Italia S.p.A., as described previously.

Liquid funds (Item C. IV) Liquid funds, amounting to 13,324 thousand Euro (17,334 thousand Euro in 2007), comprise the following: (thousands of Euro) Bank and postal accounts

13,295

Cash-in-hand and cash equivalents

29

Total

13,324

Prepayments and accrued income (Item D) These total 181,866 thousand Euro and are made up of the following: (thousands of Euro) 31/12/2008

31/12/2007

174,649

117,620

6,796

6,399

181,445

124,019

421

354

181,866

124,373

Prepayments: - Substitute tax deferral - Other Total Accrued income General total

These amounts represent the adjustments made in order to match the year’s revenues and costs to the financial period to which they relate.

115

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

The line “substitute tax deferral” includes: I

substitute tax (Legislative Decree 358/1997), which originally amounted to 551,415 thousand Euro, calculated in relation to capital gains arising from the contribution of industrial activities by the Parent Company to Nuovo Pignone S.p.A., has been deferred and is charged to the Consolidated Income Statement on a straight-line basis according to the depreciation or amortisation of the contributed assets (10 years for assets and 18 years for goodwill), in order to achieve the objectives described in the accounting policies with regard to “prepayments and accrued income, accrued expenses and deferred income”.

I

substitute tax (Law 2/2009) amounting to 85 million Euro arising from the exercise by subsidiary Nuovo Pignone S.p.A. of the option provided by Law 244/2007 (2008 Finance Act) which allows the realignment of fiscal values to their higher statutory values. The option was exercised with regard to the value of goodwill. The resulting substitute tax was deferred in the consolidated accounts and will be charged to the income statement on a straight-line basis to match the tax deduction of amortisation pertaining to the goodwill released.

Other prepayments mainly concern portions of charges for insurance premiums, rental fees, commission on sureties and other costs, paid in advance and deferred on an accruals basis. The item “Other accrued income” essentially comprises income accrued in connection with fees due and not yet billed to customers on lease agreements and contracts for the rental of medical equipment; the item also includes the accrued interest income on loans pursuant to the Sabatini Law.

116

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

CONSOLIDATED BALANCE SHEET - LIABILITIES Shareholders' equity (Item A) The Parent Company’s share capital, amounting to 74,880,000 Euro, consists of 144,000,000 ordinary shares, each with a nominal value of 0.52 Euro, and is fully paid up. Set out below are the changes that occurred during the year in the consolidated shareholders’ equity items and the reconciliation between the shareholders’ equity and net profit for the year of Nuovo Pignone Holding S.p.A. and consolidated data:

Changes in consolidated shareholders' equity items (thousands of Euro)

Balance at 31/12/2006

Share capital

Legal reserve

Share premium reserve

Negative goodwill

74,880

14,977

41,633

1,606

Other reserves (*)

Net profit for the year

Total

1,057,752

189,534

1,380,382

189,534

(189,534)

0

- Allocation of 2006 net profit to reserves - Dividend distribution - Changes resulting from translation of foreign currency financial statements - Changes resulting from variations in the method of consolidation

0

0

(106,984)

(106,984)

2,914

2,914

- Net profit for 2007 Balance at 31/12/2007

74,880

14,977

41,633

1,606

402,367

402,367

1,143,215

402,367

1,678,679

402,367

(402,367)

0

- Allocation of 2006 net profit to reserves - Dividend distribution

(1,600,000)

(1,600,000)

(2,999)

(2,999)

- Changes resulting from translation of foreign currency financial statements - Net profit for 2008 Balance at 31/12/2008

74,880

(*) Other reserves are made up of the following:

14,977

41,633

2008

1,606

(57,146)

Delta

2007

· Retained earnings

(204,439)

(1,197,633)

993,194

· Consolidation reserve

127,077

(2,729)

129,806

· Revaluation reserves: Law 413 of 30.12.91

16,476

16,476

· Provision for lump-sum grants pursuant to Art. 55 Presidential Decree 917/86

383

383

· Reserve for lump-sum grants pursuant to Art. 55 Presidential Decree 917/86 Total

3,356 (57,146)

0 (1,200,361)

193,763

193,764

193,763

269,714

3,356 1,143,215

117

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Reconciliation between shareholders’ equity and net profit for the year of Nuovo Pignone Holding S.p.A. and consolidated data (thousands of Euro) 2008 Shareholders' Net profit equity for the year

2007 Shareholders' equity

Net profit for the year

Per annual financial statements of Nuovo Pignone Holding S.p.A.

775,093

182,079

2,193,014

78,880

Difference between the book value of consolidated investments and measurement using the equity method *

(533,654)

119,794

(526,258)

337,614

25,992

16,726

9,266

5,016

2,283

(286)

2,569

250

Elimination of intra-group profits

0

(88)

88

41

Alignment of Thermodyn S.A.S.

0

1,416

0

0

Elimination of write-down of investments Adjustment to measurement of Parent Company’s investments in non-consolidated associates and subsidiaries using the equity method

Elimination of intra-group dividends

0

(125,876)

0

(19,434)

Total consolidation adjustments

(505,379)

11,686

(514,335)

323,488

Per group consolidated financial statements

269,714

193,765

1,678,679

402,367

(*) This item is broken down as follows: (thousands of Euro) 2008

2007

Difference between the book value of consolidated investments and measurement using the equity method

Sh. equity

Net profit/ (loss)

Sh. equity

Nuovo Pignone S.p.A. GE Transportation Systems S.p.A. Thermodyn S.A.S. Nuovo Pignone International S.à r.l. GE Medical Systems Italia S.p.A. Bently Nevada Italia S.r.l. Pignone Engineering Ltd. Jenbacher S.r.l. GE Capital Funding Services S.r.l. Corporacion Nuovo Pignone de Venezuela S.A. GE Medical Systems Information Technologies S.r.l. GE Healthcare Clinical Systems S.r.l. GE Healthcare S.r.l. Fondazione Pignone Consorzio Tragaz GE Industrial Financing Ireland Ltd. GE Sensing & Inspection Technologies S.r.l. Everest Vit Italia S.r.l. Total

(595,657) 583 0 (3,871) 15,910 (90) 9,665 4,149 65,649

215,548 13,581 0 (118,700) 15,219 1,097 1,571 4,151 7,900

(809,666) 2,059 (1,416) 217,709 691 18 10,587 (2) 57,749

178,595 56,777 7,417 81,908 9,538 1,197 887 2,067 9,688

640

356

(434)

(110)

(6,246) (4,040) (19,116) 62 26 (1,705)

(12,122) (1,533) (11,702) (102) 0 4,865

5,877 (2,507) (7,414) 164 (0) 169

(7,411) (2,103) (1,081) 137 (26) (17)

(184) 570 (533,654)

(335) 0 119,794

151 0 (526,263)

151 0 337,614

118

Net profit/ (loss)

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

The difference between the book value of the investment in Nuovo Pignone S.p.A. and the value obtained by applying the equity method is due above all to elimination of the intragroup capital gain of 950 million Euro (1,062 million Euro in 2007) and deferral of the substitute tax charge of 90 million Euro (118 million Euro in 2007) as regards the contribution transaction and of the substitute tax charge of 85 million Euro arising from the release of goodwill. The variations in the measurement of shareholders’ equity pertaining to 2008 with respect to the values calculated the previous year, apart from the net profit for the year and the dividends paid to the Group, also concern the differential arising on translation of foreign currency financial statements at the year-end exchange rate compared with the historical reference exchange rates. (thousands of Euro) Adjustment to measurement of Parent Company’s investments in non-consolidated associate and subsidiaries using the equity method IRMA Services S.r.l.

31/12/2007

Changes

Sh. equity

(Net profit)/ loss

285

250

Pignone Inc.

2,285

0

Total

2,570

250

Net profit for the year

Exchange rate gains (losses)

31/12/2008 Scope of consolid.

Sh. equity

-285

0 2,283

0

-285

2,283

0

-2 0

-2

(Net profit)/ loss 0

The variation in Shareholders' Equity as regards subsidiary Pignone Inc. refers exclusively to the valuation of reserves based on the year-end exchange rate, since the subsidiary draws up its financial statements in dollars. The investment in IRMA Service S.r.l. has been sold and the related business line contributed to Nuovo Pignone S.p.A., as previously described.

Provisions for pensions and similar obligations (Item B. 1) These amount to 2,934 thousand Euro (1,899 thousand Euro at 31 December 2007) and include the charges that the Group would incur in the case of cancellation of agency agreements underway at the balance sheet date.

Tax provision, including deferred tax liabilities (Item B. 2) This item stands at 6,977 thousand Euro (12,662 thousand Euro at 31 December 2007) and includes deferred tax liabilities calculated by the various consolidated companies, adjusted and supplemented with the taxes pertaining to consolidation operations. (thousands of Euro) Temporary differences Bad debt provision for factored receivables Provision for depreciation/amortisation of fixed assets Deferred capital gains Unrealised exchange rate gains/losses Total temporary differences Deferred tax liabilities

2008

2007

16,603 5,829 63 6 22,501 6,977

29,881 7,702 127 29 37,740 12,662

119

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

The “Bad debt provision for factored receivables” concerns write-downs of receivables carried out by GE Capital Funding Services S.r.l. within the limits allowed by tax legislation and in excess of the amount stated in the financial statements.

Other provisions (Item B. 3) (thousands of Euro) Opening balance

Utilisations

Accruals

Change in scope of consolidation

-5,023

Reclassification

Exchange rate differences

Closing balance

Provision for risks Litigation

42,452

-6,194

17,740

Penalties

20,050

-11,174

1,199

0

0

2,487

-1,462

333

-3,299

4,875

64,989

-18,830

19,272

-8,322

0

56,453

-20,693

11,751

-2,912

925

-684

801

1,042

Employee incentives

4,427

-4,427

2,478

2,478

Performance bonus

1,296

-1,296

14,253

-2,114

1,657

148,160

-52,113

98,558

70,841

-40,855

221

-3,198

Total provisions for charges

296,576

-125,380

115,245

General total

361,565

-144,210

134,517

Provision for exchange rate risks Other provisions Total provisions for risks

48,975 -4,875

-1

5,199 0 2,934

-1

57,108

Provisions for charges Product warranties Maintenance contracts

Corporate reorganisation Future charges to be incurred on completed contracts and other contractual risks Provisions for charges in respect of contracts showing a loss Other risk provisions

44,599

0 0

194,605 -17,412

-3,625

8,949

2,899

582

504

-20,324

-726

582

265,973

-28,646

-726

581

323,081

Litigation This provision covers the estimated future charges which are deemed probable to occur in connection with legal disputes brought against the Group by third parties. The amount of 6,194 thousand Euro having been used following the settlement of disputes during the year, the provision was brought into line with current requirements via an appropriation of 17,740 thousand Euro; it decreased by 5,023 thousand Euro following the sale of the investment in Thermodyn S.A.S., which in the previous year was consolidated on a line-by-line basis. More specifically, the provision includes inter alia:

120

13,796

I

27,160 thousand Euro set aside to cover risks that could potentially emerge in connection with contracts in foreign countries;

I

accrual of 6,144 thousand Euro, made based on a prudent estimate of the results of the preliminary assessment report drawn up in 2000 by the Florence Tax Police

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Regional Headquarters upon completion of a general inspection for VAT, direct taxation and other tax purposes involving the companies Nuovo Pignone Holding S.p.A. and Nuovo Pignone S.p.A.. As a result of the aforesaid inspection, notices of assessment were successively served in relation to the tax years from 1995 to 1999. The notices of assessment relating to 1995, 1996 and 1997 were settled in May 2003 in accordance with Articles 15 and 16 of the Law dated 27 December 2002 (2003 Finance Act). Against the notices of assessment relating to the 1998 and 1999 tax years, the two companies filed an appeal with the Florence Provincial Tax Commission, which accepted the appeal and in 2007 issued a first level judgment in favour of the Companies. On 26 May 2008 the Tax Authorities appealed against this judgment. The Florence Regional Tax Commission rejected the appeal, issuing on 29 April 2009 an appellate judgment in the Companies' favour. The amounts corresponding to the observations that emerged, which are not covered by the said provision, refer to liabilities that, whilst of a not insignificant nature, are nevertheless considered remote. I

accrual of 15,180 thousand Euro to cover legal disputes, which are deemed probable to occur, brought against Nuovo Pignone S.p.A. by third parties

I

accrual of 491 thousand Euro as reasonable estimate of risks arising from commercial transactions carried out with hospital trusts of subsidiary GE Medical Systems S.p.A.

Penalties This covers possible penalties that the Group may incur in connection with customer supplies. The penalties already claimed by customers are recorded in Other payables under balance sheet liabilities and amount to 39,253 thousand Euro (10,410 thousand Euro at 31 December 2007). Product warranties This covers the estimated costs to be incurred under contractual warranty commitments relating to goods already invoiced at the balance sheet date. Maintenance contracts This is the provision accrued to cover future risks and charges relating to the management of long-term ongoing maintenance contracts over their term. Performance bonus and incentives for certain employee categories This is the amount set up to cover the performance bonus payable to staff and the incentive to be paid to certain employee categories for the year 2008, including the related social security contributions. Future charges to be incurred on completed contracts and other contractual risks This is the provision set up to cover future charges and other contractual risks in connection with contract work in progress and completed contracts. Future charges in respect of contracts showing a loss This is the provision set up to cover losses generally anticipated for the completion of some contracts.

121

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Corporate reorganisation This provision has been set up to cover the social security charges on leaving incentives, which the Group will be required to pay to the Italian Social Security Institution (INPS) within the scope of corporate reorganisation plans implemented in previous years and during the current year.

Employees' severance entitlement (Item C) Employees’ severance entitlement exclusively concerns the Group’s Italian companies. Law 296 dated 27 December 2006 and the subsequent decrees and regulations issued during the first few months of 2007 within the scope of the supplementary pension reform significantly changed the working of employees’ severance entitlement (TFR), providing for the transfer of TFR accruing after the date of the reform to supplementary pension schemes or to the treasury fund managed by INPS. The amount of the provision – stated gross of the advance payment of 1,553 thousand Euro as per Law 662/96 and of the relative annual revaluation - represents the Group’s liability to its employees at 31 December 2008, determined in accordance with the related labour contracts and agreements in force. The change in the provision during 2008 is detailed below: (thousands of Euro) Opening balance

74,605

- Accrual for the year

17,850

- Indemnities and advances paid during the year

-5,195

- Transfer to supplementary pension schemes and INPS treasury fund

-16,709

- Changes in scope of consolidation

99

Closing balance

70,650

Payables (Item D) Payables total 4,761,989 thousand Euro and comprise the following: (thousands of Euro) Opening balance

Changes during the year

Closing balance

Due to shareholders for loans

53,579

2,824

56,403

Due to banks

16,448

- 3,697

12,751

Sums due to other financial institutions

1,445,114

-204,305

1,240,809

Payments on account

1,910,453

427,400

2,337,853

Trade payables

738,892

21,530

760,422

Amounts payable to parent companies

19,742

-19,742

-

Tax payables

96,396

50,853

147,249

Social security charges payable

28,060

-2,564

25,496

Other payables Total

122

75,342

105,664

181,006

4,384,026

377,963

4,761,989

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Payables to shareholders for loans This item includes a loan of 56,403 thousand Euro granted by General Electric Energy Europe B.V. in favour of the Parent Company, repayable on 22 June 2009, bearing interest at the rate of 4.19%. The amount shown in the financial statements includes the loan principal of 56,338 thousand Euro and the portion of interest pertaining to the year, in the amount of 65 thousand Euro.

Due to banks These amount to 12,751 thousand Euro (16,448 thousand Euro at 31 December 2007) and comprise the following: (thousands of Euro) Year payable

2009

2010

2011

2012

2013

10

0

0

0

0 1,021

Ordinary current accounts Other financial payables

3,330

2,906

1,840

1,011

Total

3,340

2,906

1,840

1,011

1,021

2014 and beyond

Total

0

10

2,633

12,741

2,633

12,751

The amount relating to the short-term overdraft on current accounts mainly refers to credit lines granted by the Italian banking system. Other financial payables comprise medium/long-term loans for applied research granted by San Paolo IMI S.p.A. pursuant to Law 1089 of 25.10.1968 and Law 346 of 5.8.1988.

Sums due to other financial institutions These amount to 1,240,809 thousand Euro (1,445,114 thousand Euro at 31.12.2007) and refer to the following loans from GE Group companies, settled at normal market conditions: (thousands of Euro) Amounts due within one year GE Central Europe Sourcing & Service Ltd.

Amounts due after more than one year 471,923

Total

471,923

GE Hungary ZRT

260,386

260,386

GE Service Luxemburg

117,445

117,445

Mediofactoring S.p.A.

50,145

50,145

Heller SGPS Lda GE Holding Luxembourg & Co S.à r.l. Regional subsidised loans

26,791 1,424 89

Cash-pool

312,309

Total

741,798

26,791 1,424

297

386 312,309

499,011

1,240,809

123

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Long-term financial payables to General Electric Group companies comprise two loans for the amounts of 26,791 thousand Euro and 471,923 thousand Euro, granted to subsidiary GE Capital Funding Services S.r.l. respectively by Heller SGPS Lta (repayable on 19 July 2010) and by GE Central Europe Sourcing & Services Ltd. (repayable on 19 December 2010), both remunerated at 3-month Euribor plus spreads of, respectively, 200 bps and 215 bps. Short-term financial payables to General Electric Group companies include: I

a loan of 117,445 thousand Euro granted by GE Service Luxembourg to the Parent Company, repayable on 4 June 2009 and bearing interest at 4.89%. The amount shown in the financial statements includes the loan principal of 117,000 thousand Euro and the portion of interest pertaining to the year, in the amount of 445 thousand Euro;

I

a loan of 260,386 thousand Euro, granted by GE Hungary ZRT to GE Capital funding Services S.r.l., repayable on 18 February 2009 and remunerated at 3-month Euribor plus a spread of 200 bps;

I

a short-term loan of 50,145 thousand Euro granted by Mediofactoring S.p.A., settled at market conditions, following a “Maturity factoring” agreement launched with subsidiary GE Capital Funding Services S.r.l.. Under the agreement, the Company assigns invoices, previously paid off, pertaining to public administration customers operating in the health segment of GE Medical Systems Italia S.r.l. and GE Healthcare Clinical Service S.r.l. portfolios, transferring risks and benefits to Mediofactoring against payment of a commission;

I

a loan of 1,424 thousand Euro, granted on 15 November 2008 by GE Holdings Luxembourg S.à r.l. to subsidiary GE Capital Funding Services S.r.l., remunerated at normal market conditions.

The remaining short-term financial payables mainly concern the cash pooling at Nuovo Pignone S.p.A. and comprise the following: (thousands of Euro) GE Capital European Treasury Services Ltd.

129,858

Amersham Biosciences GMBH tax rep.

119,053

GE Power Controls Italia S.p.A.

40,440

GE Power Controls Holding Italia S.p.A.

11,214

Italba Service S.r.l.

5,103

GE Lighting Systems S.p.A.

2,783

GE Zenon Environmental S.r.l.

2,186

GE Lighting S.r.l.

1,527

Instrumentatium Imaging Italia S.r.l.

85

Ionics Italba S.p.A.

37

IMV Italia S.r.l.

23

Total

124

312,309

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

The item “regional subsidised loans” represents the balance of funding granted to GE Healthcare S.r.l. by the Region of Lombardy in 2002, at the subsidised rate of 1.5%, following interventions scheduled by Law 365/2000 in favour of areas affected by flooding.

Payments on account These amount to 2,337,853 thousand Euro (1,910,453 thousand Euro in 2007) and include payments on account received from customers under ongoing contracts (1,638,924 thousand Euro), interim invoices issued to customers under contracts in progress at 31 December 2008 (695,524 thousand Euro) and advance payments in respect of services and supplies pending completion (3,405 thousand Euro).

Trade payables These total 760,422 thousand Euro (738,892 thousand Euro in 2007) and concern the supply of goods and services.

Tax payables Tax payables amount to 147,249 thousand Euro (96,396 thousand Euro at 31.12.2007) and comprise the following: (thousands of Euro) Amounts due within one year

Amounts due after more than one year

Total

Substitute tax payable

59,968

0

59,968

Income tax

43,035

0

43,035

VAT payable

27,351

0

27,351

Personal income tax (IRPEF) withheld from employees' wages and salaries

12,740

0

12,740

2,015

1,246

3,261

894

0

894

146,003

1,246

147,249

Foreign direct taxes Tax withholdings on self-employment income Total

The substitute tax payable corresponds to the amount, still pending settlement with the Tax Authorities, relating to the substitute tax previously described in the section concerning Prepayments. The item “VAT payable” includes VAT due on sales of medical equipment to Public Bodies (27,351 thousand Euro) pertaining to the subsidiaries GE Medical Systems Italia S.p.A. and GE Healthcare S.r.l..

125

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Social security charges payable These amount to 25,496 thousand Euro (28,060 thousand Euro at 31.12.2007) and comprise the following: (thousands of Euro)

Payables to INPS Contributions payable on unused holiday entitlements Payables to other pension organisations Payables to foreign social security institutions Other payables Total

Amounts due within one year

Amounts due after more than one year

Total

22,929

0

22,929

1,036

0

1,036

699

0

699

3

0

3

765

65

830

25,432

65

25,496

Amounts due to social security institutions, entirely payable within one year, primarily concern sums payable to pension, welfare and industrial accident organisations and comprise the social security contributions due on wages and salaries and on fees paid to contract workers.

Other payables Other payables total 181,006 thousand Euro (75,342 thousand Euro at 31.12.2007) and concern: (thousands of Euro) Amounts due within one year

Amounts due after more than one year

Total

Payables to employees

43,822

0

43,822

Payables to customers for penalties

39,253

0

39,253

Commissions

9,061

0

9,061

Payables to consultants and agents

2,833

0

2,833

Payables to supplementary pension funds

2,758

0

2,758

Guarantee deposits received from Customers

1,920

0

1,920

Branch payables

1,204

0

1,204

176

0

176

11

0

11

Payables to Factoring companies Advance payments on sundry receivables Other sundry payables Total

2,576

77,392

79,968

103,614

77,392

181,006

It should be noted that the payables due after more than one year primarily concern the amount of 76,833 thousand Euro due to GE Holding Luxembourg S.à r.l. for dividends declared by the shareholders at the meeting held on 27 June 2008 and not yet paid to the shareholder, as well as 441 thousand Euro relating to amounts payable to minority shareholders for dividends declared by the Shareholders at their Meetings during the years 2004-2005 and 2008 (after more than one year). 126

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Accrued expenses and deferred income (Item E) This item amounts to 34,440 thousand Euro and is made up of the following: (thousands of Euro) 31/12/2008 Accrued expenses

2,200

31/12/2007 2,475

Deferred income Obligations under guarantees

15,718

726

Factoring commission income

1,371

566

693

10,571

Lump-sum grants Other deferred income

14,460

683

Total deferred income

32,240

12,545

Total

34,440

15,021

Other deferred income includes revenues totalling 12,891 thousand Euro pertaining to future periods in connection with a licence agreement of subsidiary Nuovo Pignone S.p.A..

Memorandum accounts (thousands of Euro) 31/12/2008

31/12/2007

Guarantees given by the Group Collateral guarantees

-

-

Personal guarantees

1,231,348

1,383,511

Total guarantees

1,231,348

1,383,511

2008

2007

141,744

225,058

2008

2007

Guarantees received

Commitments for the sale of goods and services - towards parent companies - towards subsidiaries

-

-

- towards GE Group companies - towards others

121,779 5,246,000

67,181 5,317,583

Total

5,367,779

5,384,764

622

439

778,334

1,048,338

219,600 7,723 105,604 -

289,043 59,752 -

1,111,261

1,397,133

Other commitments Currency risk hedging contracts - sale of foreign currency - purchase of foreign currency - foreign currency purchase options - foreign currency sale options - natural gas Total Third party assets - towards GE Group companies - towards others

870

1,011

217,068

253,403

Total

217,938

254,414

Group assets held by third parties - towards others

7,921

9,517

Total

7,921

9,517 127

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

CONSOLIDATED INCOME STATEMENT Prior to proceeding with our examination of individual items, it should be mentioned that, in accordance with Article 2428, first paragraph, of the Italian Civil Code, our notes on the general trend in costs and revenues are provided in the Report on Operations. Moreover, owing to the detailed description of positive and negative income components given in the income statement and to the above notes to the balance sheet items, it is possible to limit the comments set out below to just the main items.

Production revenues (Item A) Production revenues realised by the Group totalled 3,814,242 thousand and comprised the following:

Turnover – goods and services (Item A. 1) This item, amounting to 3,117,039 thousand Euro, is broken down by product type and by geographical area as follows:

Product category

2008 Thousands of Euro

%

2007 Thousands of Euro

%

Equipment

1,482,388

48

1,594,535

52

Technical services and assistance

1,159,086

38

1,041,851

34

426,115

14

402,573

13

0,3

10,995

0,3

Medical machinery and equipment Control sensors and equipment

8,557

Other

1,892

0,1

3,108

0,1

Total

3,117,039

100

3,053,062

100

Geographical areas*

2008 Thousands of Euro

%

2007 Thousands of Euro

%

Italy

787,526

25

626,811

24

Rest of Europe

303,261

10

528,002

12

Middle East

606,351

15

774,909

26

America

475,473

10

277,903

9

Rest of the world

944,427

30

845,438

29

3,117,039

100

3,053,062

100

Total

(*) Based on the final destination of the supply

128

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Variation in work in progress, semi-finished products (8,588) thousand Euro and finished goods (Item A. 2) Changes in contract work in progress (Item A. 3)

604,596 thousand Euro

Both of these items reflect the difference between the opening and closing inventory values stated under the asset item “Inventories”.

Increases in internal work capitalised under fixed assets (Item A. 4)

3,068 thousand Euro

These concern the capitalisation of internal construction costs incurred during the year.

Other revenues and income (Item A. 5)

98,127 thousand Euro

Other revenues and income include: Grants for operating expenses These totalled 436 thousand Euro, of which 403 thousand Euro concerned the grants for operating expenses paid by public bodies for research projects and staff training and 33 thousand Euro concerned the utilisation of plant-related lump-sum grants pertaining to Nuovo Pignone S.p.A.. Other revenues and income Other revenues and income amounted to 97,691 thousand Euro and comprised the following: (thousands of Euro) Release of unused provisions for risks and charges

42,514

Income from commercial deals

16,655

Arbitration against Albanian Government

11,167

Penalties and backcharges applied to suppliers

6,336

Seconded personnel

5,315

Income from learning centre activities

3,489

Recharge to GE companies of operating costs

2,824

Commissions and royalties

2,621

Recharge of operating costs

2,457

Rental income

1,785

Prior year income

1,067

Insurance compensation for damages

580

Utilisation of provision for write-down of options

435

Gains on disposal of fixed assets

205

Other

241

Total

97,691 129

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Production cost (Item B) Production cost, totalling 3,329,245 thousand Euro, comprised the following:

Raw materials, consumables and supplies (Item B. 6) The sum of 1,648,672 thousand Euro refers above all to the purchase of materials, machines and equipment, spare parts and sundry products and consumables.

Services (Item B. 7) Costs for services totalled 864,877 thousand Euro and correspond to the charges incurred for services of an operational nature (planning and management of works, construction, outsourced processing, transportation, maintenance, insurance, etc.), staff-related services, consultancy and professional services, advertising and promotion and other general services (such as postage, telephone, radio links and others). More specifically: (thousands of Euro) 2008 Construction and outsourced processing

473,422

Consultancy and professional services

105,912

Staff-related services

98,684

Transportation

82,329

Maintenance

41,934

Fees

27,862

Utilities

16,549

Advertising, promotion and sales expenses

8,815

Telecommunications

5,603

Bank commission and charges

2,436

Insurance

1,104

Other

226

Total

864,877

Regarding the fees payable to the Directors and Statutory Auditors of the parent company for the performance of these duties also in other companies within the scope of consolidation, we report the breakdown of such fees as follows: (thousands of Euro) Directors' fees

569

Statutory Auditors' fees

542

Total

130

1,111

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Use of third party assets (Item B. 8) This item amounted to 90,608 thousand Euro and refers to costs connected with fees for patents, licences, concessions, as well as lease and rental charges. (thousands of Euro) Medical equipment rental

32,207

GE Monogram trademark

21,798

Royalties for use of patents and licences

10,507

Lease charges

8,824

Rental of machinery

6,863

Rental of computer equipment

5,641

Rental of vehicles

4,240

Fees for patents, licences and concessions

528

Total

90,608

Personnel expenses (Item B. 9) Personnel expenses totalled 402,126 thousand Euro and include the cost of wages and salaries paid to employees and related social security contributions, the accruals for employees’ severance entitlement and other staff-related costs, such as welfare charges (canteens, recreational facilities) and leaving incentive charges other than extraordinary expenses associated with corporate reorganisation plans. Set out below is the average number of employees in 2007 and 2008, divided by category and by geographical area.

By category

2008

2007

268

260

4,206

4,663

891

901

Total

5,365

5,824

By geographical area

2008

2007

Italy

Executives Commercial and administrative staff Technical staff

5,299

5,222

United Kingdom

8

549

France

0

8

56

45

5,363

5,824

Rest of the world Total

131

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Amortisation, depreciation and write-downs (Item B. 10) Amortisation, depreciation and write-downs amounted to 97,779 thousand Euro, as mentioned in the comment on the asset items “Intangible fixed assets”, “Tangible fixed assets” and “Receivables”.

Changes in inventories of raw materials, consumables and supplies (Item B. 11) These show a negative balance of 30,639 thousand Euro and reflect the difference between opening and closing inventory values, as stated in the item “Inventories” under assets forming part of working capital.

Provisions for risks (Item B. 12) Provisions for risks, totalling 18,987 thousand Euro, reflect the accruals made in respect of potential penalties and litigation; they also include the amounts set aside to cover disputes brought against the Group by third parties, as already commented under the balance sheet liability item “provisions for risks and charges”.

Other provisions (Item B. 13) Other provisions comprise the following: (thousands of Euro) Provisions for charges to be incurred on completed contracts and other contractual risks

98,558

Product warranties

11,751

Emoluments payable to employees and performance bonuses

2,478

Corporate reorganisation

1,435

Adjustment of purchase cost of options to market value

1,654

Contractual risks

801

Risks concerning extraordinary installations

173

Other provisions

113

Total

116,964

Other operating costs (Item B. 14) These totalled 58,593 thousand Euro and included, inter alia, contractual penalties applied by customers (41,474 thousand Euro) and indirect taxes and dues (6,889 thousand Euro, of which 5,678 thousand Euro related to customs charges on purchases).

132

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Financial income and expenses (Item C) These show a negative balance of 113,443 thousand Euro and refer to:

Income from investments (Item C. 15) This item totalled 32 thousand Euro and refers to dividends paid by ENI Acqua Campania to the parent company, which owns a minority interest (0.50%).

Other financial income (Item C. 16) Other financial income from receivables included under fixed assets This amounted to 2 thousand Euro and refers to interest income accrued on compensation received by the Parent Company following the expropriation of land. Financial income from parent companies This amounted to 3,547 thousand Euro and exclusively refers to interest income on loans granted by Nuovo Pignone S.p.A. to General Electric Company. Financial income from others This totalled 70,632 thousand Euro, made up of the following: I

capital gains on the disposal of investments amounting to 11,850 thousand Euro, of which 11,814 thousand Euro concerns the sale of the investment in Thermodyn S.A.S. and 36 thousand Euro concerns the sale of the investment in Irma Service S.r.l.,

I

other financial income amounting to 58,782 thousand Euro, broken down as follows: (thousands of Euro)

Interest on loans to GE Group companies

41,619

Interest on bank current a/cs

8,023

Interest on commercial transactions

5,188

Options

1,951

Interest from financial institutions

1,841

Grants for interest Other financial income Total

150 10 58,782

The line “interest on loans to GE Group companies” refers to the interest earned on loans granted by the Group to General Electric companies outside the Nuovo Pignone Holding Group. More specifically, it concerns a loan granted by the subsidiary Nuovo Pignone International S.à r.l. (8,566 thousand Euro) and interest income arising from the centralised management of treasury operations in Italy and abroad (33,053 thousand Euro), as already described in the comment on the item “other receivables”.

133

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Interest and other financial expenses (Item C. 17) Paid to parent companies This amounted to 2,824 thousand Euro and refers entirely to the interest paid on the loan granted to the Parent Company by GE Energy Europe B.V., as already described in the comment on the item “Due to shareholders for loans”. Paid to subsidiaries This amounted to 104,113 thousand Euro and exclusively refers to the loss realised by the Group on the sale of the investment in the subsidiary Nuovo Pignone Scotland Ltd, which was held through Nuovo Pignone International S.à.r.l. as described at length in the Report on Operations. Paid to others This amounted to 105,614 thousand Euro: (thousands of Euro) Interest on loans from GE Group companies

94,118

Interest on other loans

5,005

Charges on factoring transactions

4,016

Charges on commercial transactions

786

Commissions for sureties

592

Interest on bank current a/cs Other financial expenses Total

86 1,011 105,614

Financial charges on factoring transactions refer to the commission paid by GE Capital Funding Services S.r.l. to Mediofactoring for the refinancing of ongoing factoring transactions (967 thousand Euro), as well as to commission paid by the subsidiary GE Healthcare S.r.l. to Farmafactoring for financing the receivable arising from commercial transactions carried out with hospital trusts (1,934 thousand Euro) and by GE Transportation System S.r.l. to a factoring company outside the General Electric Group (1,115 thousand Euro).

Exchange rate gains and losses (Item C. 17 bis)

24,895 thousand Euro

Exchange rate gains

101,255

Exchange rate losses

76,360

Total

24,895

Adjustments to financial asset values (Item D) Write-downs This item includes the write-down carried out of the goodwill arising on consolidation pertaining to GE Healthcare S.r.l. (14,674 thousand Euro) in order to bring the value shown 134

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

into line with the appraisal report, as more particularly described in the comment on the item "financial fixed assets". With a view to providing a clearer picture, the amount of the write-down is shown under "d) other"; the figure for 2007 has been reclassified under this item, to allow comparison with the previous year's data.

Extraordinary income and expenses (Item E) Income Extraordinary income amounting to 10,193 thousand Euro concerns positive adjustments relating to payables recorded against formal requests for penalties that were not claimed (2,402 thousand Euro), adjustment for royalties in respect of the previous year (609 thousand Euro), tax recoveries and adjustments relating to prior years (1,805 thousand Euro); the item also includes income amounting to 1,743 thousand Euro deriving from the tax credit for research and development activities indicated in tax return Unico 2008 (Section RU), the cost of which was incurred by the subsidiary Nuovo Pignone S.p.A. in 2007, as well as other reimbursements on the part of the tax administration (62 thousand Euro). Lastly the item includes capital gains realised on the disposal of assets (116 thousand Euro), the collection of receivables deemed uncollectible (37 thousand Euro), accounting entry and balance adjustments (1,609 thousand Euro) and other negative income components relating to prior years (1,810 thousand Euro). Expenses Extraordinary expenses amounted to 2,006 thousand Euro and mainly refer to expenses incurred by the Group for employee leaving incentives in connection with reorganisation policies (182 thousand Euro) and to prior year items connected with accounting adjustments (1,824 thousand Euro).

Taxation on profit for the year (Item 22) Income taxes, totalling 174,467 thousand Euro, therefore comprise the following: (thousands of Euro)

Direct taxes/IRAP Substitute tax Deferred tax expense Deferred tax income Foreign taxes Total

2008

2007

141,359

109,543

27,598

31,808

518

-31,469

-2,688

107,048

7,680

10,825

174,467

227,756

The item includes the substitute tax of 27,597 thousand Euro deriving from the contribution operation, which originally amounted to 551,415 thousand Euro and is charged to the income statement as indicated in the section on "Prepayments".

135

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

Set out below is a reconciliation of the tax rate at 31 December 2008:

IRES

IRAP

499,504

502,310

Adjustment of taxable income for IRAP purposes

-

286,047

Temporary differences deductible in future years

178,436

122,345

(3,298)

-

(145,402)

(135,573)

(19,300)

(2,560)

Profit before taxes as per financial statements (A)

Temporary differences on loss carryforwards Reversal of temporary differences recorded in prior years – taxed provisions Reversal of temporary differences recorded in prior years - Others Non-deductible depreciation/amortisation

528

431

Permanent differences

(104,726)

(28,590)

Taxable income before utilisation of loss carryforwards

405,741

744,089

-

-

Taxable income

405,741

744,089

Theoretical tax rate

27.50%

3.90%

Current taxes (B)

111,604

29,793

Effective tax rate (B)/(A)

22.34%

5.93%

(3,657)

567

-

-

872

4

7,681

5

Loss carryforwards utilised

Deferred tax income Taxes advanced on loss carryforwards Deferred tax expense Foreign taxes Substitute taxes Total taxes for the year per income statement

27,598

-

144,099

30,369

THE BOARD OF DIRECTORS The Chairman Piero Salvadori

136

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

CONSOLIDATED STATEMENT OF CASH FLOWS (thousands of Euro) changes during the year Opening balance

Borrowings repayments

Closing balance

Medium/long-term financial receivables

1.636.140

(1.665.570)

(29.430)

Medium/long-term financial payables

(293.680)

(552.521)

(846.201)

Net medium/long-term available funds

1.342.460

(2.218.091)

(875.631)

Due to shareholders for short-term loans

(53.579)

(2.824)

(56.403)

(1.167.882)

683.131

(484.751)

(113)

(62)

(175)

571.252

218.090

789.341

17.335

(4.011)

13.324

(632.987)

894.323

261.336

709.473

(1.323.767)

(614.295)

2008

2007

193.763 69.126

402.367 73.524

Analysis of net available funds (financial debt)

8.213

(82.339)

14.659

3.164

3 (43.134) (3.955)

22 4.391 (3.191)

(57.029) (1) 684

31.795 (54) 135

(102) 33.486

177 (902)

Internally-generated cash flow from operations (self-financing) (a)

215.713

429.089

Inventories Trade and other receivables Prepayments and accrued income Trade and other payables Accrued expenses and deferred income

(498.986) 177.126 (464) 380.472 19.419

(756.184) 299.907 (2.532) 496.185 (657)

77.568

36.719

Net profit for the year Amortisation and depreciation Write-down of assets forming part of working capital Write-down of goodwill arising on consolidation Impact of measuring consolidated investments using the equity method Changes in provisions for risks and charges Change in employees' severance entitlement Substitute tax suspended and charged to income statement Net gains (losses) on disinvestments Change in consolidation criteria Investment adjustments and exchange rate variation Additions to the scope of consolidation area

Cash flow relating to working capital (b) Cash flow from operating activities (c=a+b)

465.808

(9.228)

(9.623)

0 (57.909)

(3.052) (52.704) (50.000)

Cash flow from investments

(67.137)

(115.379)

Disinvestments: Intangible fixed assets Tangible fixed assets Financial fixed assets

98 4.705 50.000

(132) 1.343 0

Cash flow from disinvestments

54.803

1.211

Cash flow from investing activities (d)

(12.334)

(114.168)

Changes in shareholders' equity: Variation in shareholders' equity Dividends Minority interests

(2.728) (1.600.000) (1.986)

(104.070) 0 (859)

Equity related cash flow (e)

(1.604.714)

(104.929)

709.473

462.761

(1.323.767)

246.711

(614.295)

709.473

Net available funds at beginning of year Net cash flow for the year (f= c+d+e) Net financial position (debt)

Due to factoring companies Short-term financial receivables Liquid funds Short-term net financial debt Net available funds (financial debt)

293.281

Investments: Intangible fixed assets Companies included within the scope of consolidation Tangible fixed assets Investments

Short-term financial debts

137

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Assets

(thousands of Euro) Amount

Payments On Account GE Energy Europe B.V. Thermodyn S.A.S Gulf Turbine Services Llc, Mussafah Bently Nevada Llc General Electric Austria Gmbh GE Np Nigeria Limited General Electric International Inc. GE Inter.Oper.Inc Geioc-Fso GE Caledonian Ltd.

76 818 43 4 455 2.088 1 0 73

Receivables Due From Customers Algesco Algesco S.p.A. Bently Nevada (U K) Ltd. Bently Nevada Llc Bently Nevada Saudi Arabia Branch Of Ge Vietnam Limited In Haip Computacenter Ag &Co Ohg Domenia Credit Ifn Sa Druck Ltd. GE Capital Bank Ltd. GE Capital Services Ltd. GE Aircraft Engine Services Ltd. GE Appliances GE Betz (Holdings) Ltd. GE Betz Gmbh GE Canada Inc. GE Capital Assurances GE Capital Bank Danmark GE Capital Bilfinans Ab GE Capital Commercial Finance Bv. GE Capital Equipment Finance Ab GE Capital Equipment Finance S.p.A. GE Capital Europe Ltd. GE Capital Finance B.V. GE Capital Finance S.p.A. GE Capital Finance S.p.A. GE Capital Fleet Car GE Capital Gmbh GE Capital Services GE Capital Services Europe GE Capital Services Inc. GE Capital Services S.r.l. GE Capital Woodchester Ltd. GE Cimisa GE Clinical Systems Devices S.r.l. GE Commerce China GE Corporate GE Corporate Finance Bank – Italian Branch GE Corporate Staff Components GE Digital Energy Sa

8 3.038 1 150 2 2 3 3 17 24 3 7 3 1 1 842 2 2 1 135 3 1 122 210 1 2 1.463 5 3 3 9 2 1 4 6.840 67 65 19 5 -137

138

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Assets

(thousands of Euro) Amount

GE El Seif Medical Services Limited GE Energy Europe B.V. GE Energy Germany Gmbh GE Energy Parts Inc. GE Energy Products France Snc. GE Energy Products Germany Gmbh & Co GE Energy Products Inc. GE Energy Services GE Energy Services (Uk) Ltd. GE Factofrance GE Fanuc Automation Europe Sa GE Fanuc Automation Solutions Europe Sa GE Gas Turbines Llc GE Handels Gmbh GE Health Care GE Healthcare As GE Healthcare Bio Sciences GE Healthcare Bio Sciences Sa GE Healthcare Europe B.V. GE Healthcare Europe Gmbh - Germany GE Healthcare Europe Gmbh - Italian Branch GE Healthcare Finland Oy GE Healthcare Limited (Ireland)) GE Healthcare Limited (Uk) GE Hungary Co.Ltd. GE Hungary Zrt GE Industrial Systems GE Information Services GE Information Services S.p.A. GE Infrastructure Sensing, Inc. GE International Inc. GE International Inc. Dubai GE International Llc GE International Mexico S.A. De Cv GE International Operations Co.Inc. GE International Operations Co.Inc. GE International Power Systems GE It S.r.l. GE Jenbacher Aktiengesellschaft GE Jenbacher Gmbh & Co Ohg GE Leadership Development Europe GE Leasing Italia S.p.A. GE Lighting S.r.l. GE Medical System Israel GE Medical Systems Us GE Medical Systems Asia GE Medical Systems Information Techn GE Medical Systems It GE Medical Systems Ltd. GE Medical Systems Sa GE Money Bank GE Money Bank Ab

1 41 1 10 21.195 2 13 21 5 1 1 -25 19 1 3 1.486 20 1 440 275 71 3 1.305 1.282 12 2.975 8 1 3 6 469 71 256 2 51 300 1 546 1 5 1 2 18 4 2 2 2 3 6 14 2 7

139

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Assets

(thousands of Euro) Amount

GE Oil And Gas Products Services S GE Oil & Gas - Conmec Llc GE Oil & Gas - Odessa Llc GE Oil & Gas Op.Llc Tax Rep. GE Oil And Gas Inc. GE Oil & Gas Odessa Llc GE Oil & Gas Operations, Llc GE Oil & Gas Operations Llc GE Pacific Pte Ltd. GE Packaged Power, Inc. GE Packaged Power-Norway GE Plastics Ltd. GE Power Controls GE Power Controls Belgium Bvba GE Power Controls Italia S.p.A. GE Power Controls Italia S.p.A. - Interlogix Division GE Power Plant Systems Department GE Power Systems GE Power Systems (M) Sdn Bhd GE Power Systems Malaysia GE Preco GE Real Estate France GE Rus Infra Llc GE Rus Llc GE Sensing France Snc. GE Sensing Gmbh GE Sensing Nederland B.V. GE Shenyang Turbomachinery Technolog GE Smallworld Spain S.r.l. GE Specialty Chemicals GE Supply Company GE Support Services GE Trading Company GE Trasportation System India GE Turbinas Y Mecanica, C.A. GE Ultrasound Germany GE - Aberdeen Service Centre Gems (Milwaukee – Parent) Gems Denmark Gems Germany Gems Greece Gems Ireland Gems Medicor Hungary Gems Poland Gems Scs Gems Spain Gen Nigeria Limited General Electric Company General Electric Do Brasil Ltda General Electric International Inc. General Electric International Inc. K

140

6.267 2.482 7 3.262 1.327 8 503 190 4 58 100 4 3 1 44.877 2.548 1 36 1.025 931 6 3 1.282 3 1 1 1 54 1 4 72 11 1 228 7 12 113 5 2 1 8 9 5 1 626 4 2 6.229 1.046 4.136 15

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Assets

(thousands of Euro) Amount

General Electric International Opera General Electric Meelsa Service Cent General Electric Services (Bermuda) General Electric Wind Energy Gmbh Gevisa Brazil Hydrill GE Energy Services (Uk) Ltd. Gems United Kingdom International General Electric Usa International General Electric Usa Ionics Italba Kretztechnik A.G. Nbc Universal Global Networks Espana Nbc Universal Global Networks Limite Nuovo Pignone Int.Le Et Serv. S.à r.l. Panametrics Gmbh Picl Egypt Corporation Ltd - Egypt B Pignone Espanola Global Services, Pignone Textile Machinery Inc. PII Ltd. Pipeline Integrity International Del Venezuela Sa Pt Ge Operations Indonesia Renta Inmobiliairia Sa Satis Sld Ste Martiniquaise De Financement Thermodyn S.A.S. Tip Services B.V. Turbinas Y Mecanica, Ca Vetco Gray Inc Uk Vetco Gray Scandinavia As Vetco Gray Uk Ltd. Woodward Governor Nederland B.V.

15.393 3 11 21 771 42 92 121 33 12 1 1 6 8 1 1 40 70 1.934 39 998 1 2 3 34.382 2 181 3.169 181 74 2

Receivables due from Parent Companies General Electric Company GE Energy Europe B.V.

330.960 423

Receivables due from others Amersham Bioscience Gmbh GE Capital European Treasury Services Ltd. GE Betz S.r.l. GE Fanuc Automation Solution Europe S.A. Inonics Italba GE Oncura Italy Vetco Gray Italia GE Power Controls Italia S.p.A. GE Lighting S.r.l. GE Holding Luxembourg S.à r.l. Vetco Gray Scandinavia As

117.165 32.452 8.143 5.933 1.058 933 101 10 3 194.275 69.178

Prepayments And Accrued Income General Electric Company

536.234

141

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Liabilities

(thousands of Euro) Amount

Payables due to shareholders for loans GE Energy Europe B.V. Sums due to other financial institutions GE Central Europe Sourcing & Service Ltd. GE Hungary ZRT GE Service Luxemburg Heller SGPS Lda GE Holding Luxembourg & Co S.à r.l. GE Capital European Treasury Services Ltd. Amersham Biosciences GMBH Tax Rep. GE Power Controls Italia S.p.A. GE Power Controls Holding Italia S.p.A. Italba Service S.r.l. GE Lighting Systems S.p.A. GE Zenon Environmental S.r.l. GE Lighting S.r.l. Instrumentatium Imaging Italia S.r.l. Ionics Italba S.p.A. IMV Italia S.r.l.

56.403

471.923 260.385 117.445 26.791 1.424 129.858 119.053 40.440 11.214 5.103 2.783 2.186 1.527 85 37 23

Payments on account General Electric International Operations Nigeria General Electric Do Brasil Ltda General Electric Company GE Oil & Gas - Odessa Llc Bently Nevada Llc GE Oil And Gas Inc. General Electric Canada Inc. General Electric Canada International Inc. General Electric International Inc. GE Np Nigeria Limited GE Energy Services

981 2 83 5 2 19 1 1.692 19 952 110

Trade payables Algesco S.p.A. Altair Filter Technology Ltd. Bangalore Engineering Center Bently Nevada Llc Bently Nevada Llc Bently Nevada Slovakia, Sro Caribe Ge Int. Energy Service Inc. Corp Leadership Srvc Germany Druck Inc. Druck Limited Engineering Technology Center Everest Vit Gmbh GE Sensing & Inspection - China GE Aircraft Engine Services GE Aviation GE Betz S.r.l.

35 2.457 318 1.635 17 293 1 47 3 258 13 1.000 1 4 279 10

142

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Liabilities

(thousands of Euro) Amount

GE Caledonian Ltd. GE Canada Equipment Finance Gp GE Capital Bank Ltd – Italian Branch GE Capital Commercial Finance B.V. GE Capital Commercial Finance Bv Collection GE Capital Finance B.V. GE Capital Finance B.V. GE Capital Finance S.p.A. GE Capital Finance S.p.A. GE Capital Fleet Car Leasing GE Capital Funding Services North America GE Capital Funding Services Snc. GE Capital Services S.r.l. GE Central Europe Sourcing & Services Ltd. GE Commerce Ltd. GE Commerce Shangai Co. Ltd. GE Corporate GE Corporate Finanacial Services Europe Limited GE Corporate Financial Services Europe Limited GE Corporate per T&L GE Corporate Staff Components GE Energy & Industr. Services Inc. GE Energy (Norway) As GE Energy Bangor GE Energy Europe B.V. GE Energy Europe B.V. GE Energy Europe B.V. GE Energy Management Services Inc. GE Energy Parts Inc. GE Energy Parts International Llc GE Energy Power Systems Espana Sa GE Energy Product France Snc. GE Energy Products Germany Gmbh & Co Kg GE Energy Services GE Energy Services GE Engine Services Inc. GE Fanuc Automation Solutions GE Fanuc Automation Solutions Europe Sa GE Financing Luxembourg S.à r.l. GE Global Control Services GE Global Research Center GE Global Research Zn Ge Deutschla GE Hangwei China GE Healthcare Ag GE Healthcare Australia Pty Limited GE Healthcare B.V. GE Healthcare Europe GMBH (Germany) GE Healthcare Europe GMBH (Italy) GE Healthcare Global Parts Company, GE Healthcare Limited (UK) GE Holding Luxemburg & Co. S.à r.l.

57 6 7 2.190 4.485 3.459 154 675 253 155 316 8 2 443.504 39 506 336 6 73 82 32 798 11 5 56.403 412 46 19 53 10.674 58 417 3 4 248 1 24 109 76.833 26 1.407 13 108 52 9 7 3 1 19 87 1.358

143

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Liabilities

(thousands of Euro) Amount

GE HUNGARY CCO.LTD GE Hungary Rt GE Hungary ZRT GE India Exports Private Limited GE Industrial Controls Systems GE Industrial Sensing GE Inspection & Repair Services GE Inspection Technologies Gmbh GE Inspection Technologies Gmbh GE Inter.Oper.Inc Geioc-Fso GE International Del Venezuela Sa GE International Inc. GE International Inc Suc Argentina GE International Inc. GE International Operations (Nig) Limited GE International Operations (Nig) Ltd. GE Intl Operations Company Inc. GE Keppel Energy Services Pte Ltd. GE Medical Systems (France) GE Medical Systems (Germany) GE Noleggi S.p.A. GE Noleggi S.p.A. GE Np Nigeria Limited GE Oil & Gas GE Oil & Gas - Conmec Llc GE Oil And Gas Inc. GE Oil And Gas Inc. GE Oil Gas Operations Llc GE Packaged Power, Inc. GE Pc GE Power Controls Italia S.p.A. GE Power Controls Italia S.p.A. – Interlogix Division GE Power Controls Italia S.r.l. GE Power Management, S.A. Sociedad GE Power Systems Malaysia GE Saudi Arabia Ltd. GE Security S.r.l. GE Sensing Emea GE Service Luxembourg GE Structured Service Lp GE Trasportation System Global Singaling Llc GE Trasportation System India GE Ultrasound Germany Gecf Indonesia Pt Ge Finance Indo. GE Aberdeen GE-Aberdeen Service Centre Gems (Milwaukee – Parent) Gems France Gems Germany Gems Global Tec. Co Llc

144

2.092 54 255.837 68 1.301 2 17 103 2 576 36 3.660 13 379 12 7 238 197 7 27 7 1 1.841 1.733 82 243 2.484 167 185 56 953 433 2.344 1.269 78 21 46 100 117.445 115 55 33 1.461 18 7 471 386 1.718 3 11.668

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Liabilities

(thousands of Euro) Amount

Gems Greece Gems Hualun China Gems Israel Gems Medicor Hu Gems Spain Gems Switzerland Gems Ultrasound And Primary Care Diagnostics Llc GEMS Vingmed Betellingung Holding General Electric Austria Gmbh General Electric Company General Electric Do Brasil Ltda General Electric Illumincaciòn Sa Geisa General Electric Int. Inc. General Electric International Inc. General Electric International Inc – Branch – Ly (Libya) General Electric International Operation Company General Electric International, Inc. General Electric Meelsa Service Ce General Electric Rus Infra Llc – Russia Branch (Russia) General Electric Wind Energy Gmbh Geshenyangturbomachinerytechnology Co., Ltd. Gevisa Sa Granite Service Int. Yuzhno Granite Service Inter. Inc Brasil Granite Services Inter.Inc Mexico Granite Services Intern.Inc. Granite Services International Inc. Gulf Turbine Services Llc, Mussafah Ifo And Other Corporate Components Ige Energy Services (Uk) Ltd. Gems United Kingdom Instrumentarium Imaging Italy S.r.l. Jenbaker Ag Gmbh Kretztechnik A.G. Numeris Gie Oec Germany PII Limited PII Pipetronix Gmbh Sas Gas Turbine Technology Saudi Arabia General Electric Co GE Energy Services Thermodyn S.A.S. Turbinas Y Mecanica, Ca Usa Instruments Vetco Gray Vetco Gray Venezuela Ca Viewpoint Bildverarbeitung

1 345 195 5 7 193 341 36 455 800 731 1.519 9 1.110 11 63 49 1.607 19 126 1.427 286 921 54 28 17 5.044 869 2 44 9 2 6.316 829 977 40 22 144 19 1 599 2.849 89 1 10 1.318 59

145

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

Turnover - goods and services Vetco Angola Aero Energy Services Algesco S.p.A. Altair Filter Technology Ltd. Altair Filter Technology Ltd. Ambassador Medical Llc Amersham Biosciences Ab Amersham Health As B H A Group Inc. Banque Artesia Nederland N.V. Bently Nevada France Bently Nevada Llc Bently Nevada Llc Bently Nevada S.à r.l. Bently Nevada Saudi Arabia Ltd. Bently Nevada Slovakia, Sro Bha Group Gmbh Bha Purfilter Sl Branch Of GE Vietnam Limited In Haiphong Budapest Hitel- Es Fejlesztesi Bank Nyilvanosan Mu Business News (Europe) Corp.Nuovo Pignone De Venezuela Datex-Ohmeda B.V. Disko Leasing Gesellschaft Mit Beschränkter Haftu Domenia Credit Ifn Sa Fondazione Pignone GE Capital Administrative Services, Inc. GE Capital Global Consumer Finance Ltd. GE Healthcare Holding Me Sa (Dubai Branch) GE Aero Energy Products GE Aircraft Engine Services Ltd. GE Aircraft Engines Holdings, Inc. GE Asset Management Ltd. GE Aviation Systems Ltd. GE Betz (Holdings) Ltd. GE Betz B.V. GE Betz Gmbh GE Betz Italia S.r.l. GE Betz South Africa (Pty) Ltd GE Capital Bank Ltd. GE Capital Bank Sa GE Capital B.V. GE Capital Commercial Finance B.V. GE Capital Corporation (Bittern Gp) Ltd. GE Capital Corporation (Funding) Ltd. GE Capital Equipement Finance GE Capital Equipment Finance Ab GE Capital Equipment Finance Holdings GE Capital Europe Ltd. GE Capital Europe Ltd. GE Capital European Treasury Ltd. GE Capital Finance BV.

146

4 124 3.837 3 10 18 4 6 4 1 107 3 15 1 8 2 2 6 2 8 4 785 2 6 3 31 1 1 25 28 10 7 3 9 5 3 2 5 4 20 13 1 4 10 1 21 1 1 13 38 4.921 2.986

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

GE Capital Finance S.p.A. GE Capital Funding Services Gmbh & Co GE Capital Funding Services Snc. GE Capital Funding Services S.r.l. GE Capital Largo Plazo, S.L. GE Capital Services S.r.l. GE Capital Servizi Finanziari S.p.A. GE Capital Woodchester Ltd. GE Clinical Systems Devices S.r.l. GE Commercial Aviation Services Ltd. GE Commercial Finance Fleet Services Ltd. GE Commercial Finance Ltd. GE Commercial Finance Real Estate. GE Commercial Financial Services Real Estate Prope GE Consumer Finance Europe GE Corporate GE Corporate Financial Services Europe Limited GE Deutschland Holding Gmbh GE Digital Energy Sa GE Druck Holdings Ltd. GE El Seif Medical Services Limited GE Energy & Environmental Research Corporation GE Energy (Norway) As GE Energy (Sweden) Ab GE Energy (Switzerland) Ag GE Energy Europe B.V. GE Energy Germany Gmbh GE Energy Optimization Controls GE Energy Optimization Service GE Energy Parts, Inc. GE Energy Power Systems Espana Sa GE Energy Product France Snc. GE Energy Product France Snc. GE Energy Services GE Energy, Llc GE Europe Nv GE European Equipment Finance Ltd. GE Factofrance GE Fanuc Automation Solutions GE Fanuc Automation Solutions Europe Sa GE Fanuc Automation Solutions Europe Sa Zweigniede GE Fanuc Intelligent Platforms Europe Sa GE Financial Markets GE Gas Turbines Llc GE Global Research Center GE Global Research Zn Ge Deutschland Holding Gmbh GE Healthcare Ag GE Healthcare AS GE Healthcare BIO Sciences GE Healthcare Bio Sciences Sa GE Healthcare B.V. GE Healthcare Clinical Systems GE Healthcare Europe Gmbh

1 8 23 1 2 9 3 17 2.792 5 1 4 3 17 2 44 236 1 -89 9 8 1 2 19 2 1.292 2 1 3 49 2 21.162 93 342 73 10 22 3 1 2 1 1 4 2 6 2 70 88 202 7 369 8 14

147

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

GE Healthcare Europe GMBH (Germany) GE Healthcare Finland Oy GE Healthcare Limited (Uk) GE Healthcare Ltd. GE Healthcare Sa GE Holdings Magyarorszag Vagyonkezelo Es Szolgalta GE Hungary Zrt GE India Exports Private Limited GE Industrial Belgium Bvba GE Inspection & Repair Services Ltd. GE Inspection & Repair Services Ltd. GE Inspection Technologies Ahrensburg Gmbh & Co Kg GE Inspection Technologies Gmbh GE Inspection Technologies Scs GE International Holdings Inc. GE International Inc. GE International Inc. GE International Inc. Dubai GE International Llc GE International Operations (Nig) Ltd. GE International Operations Co.Inc. GE It S.r.l. GE Jenbacher Gmbh & Co Ohg GE Leasing Italia S.p.A. GE Lighting Hungary Co. GE Lighting S.r.l. GE Lighting System S.p.A. GE Lisca Ag GE Marmara Technology Center Muhendislik Hizmetler GE Med Syst Ultras & Primary Care Diag GE Medical Systems Deutschland Gmbh & Co Kg GE Medical Systems Information Technologies Gmbh GE Medical Systems Information Technologies Sw Gmb GE Medical Systems Ltd. GE Medical Systems Middle East GE Medical Systems Polska Sp Z O O GE Money Bank GE Money Bank A.S. GE Money Bank Ab GE Money Nordic Holding Ab GE Money Servicing Ltd. GE Nuclear Energy GE Numeris Gie GE Oil And Gas Products Services S De Rl De Cv GE Oil & Gas GE Oil & Gas - Conmec Llc GE Oil & Gas - Conmec Llc GE Oil & Gas - Odessa Llc GE Oil & Gas Op.Llc Tax Rep. GE Oil & Gas Inc. GE Oil & Gas Inc. GE Oil & Gas Odessa Llc GE Oil & Gas Operations, Llc

148

1.484 6 1.347 21 124 1 15.680 2 6 102 3 7 16 6 1 17 9.939 3 1.294 7 197 222 46 3 17 1 680 7 4 3 6 7 2 4 1 1 45 1 9 1 14 2 61 10.855 15 3.801 675 1.186 3.798 5 2.214 34 1.068

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

GE Pacific Pte Ltd. GE Packaged Power, Inc. GE Power Controls Italia S.p.A. GE Power Controls Italia S.p.A. - Interlogix Division GE Power Controls Italia S.r.l. GE Power Systems (M) Sdn Bhd GE Power Systems (M) Sdn Bhd GE Power Systems Malaysia GE Power Systems University GE Preco GE Real Estate France GE Real Estate Sweden Ab GE Rus Infra Llc GE Rus Llc GE Security Emea Bvba GE Sensing & Inspection S.r.l. GE Sensing Emea GE Sensing Emea - Shannon - Ireland GE Shenyang Turbomachinery Technology Co. Ltd. GE Shenyang Turbomachinery Technology Co. Ltd. GE Smallworld (Uk) Ltd. GE South Africa Ppt Ltd Ms GE Transportation Systems Global Signaling Llc GE Ultrasound Germany GE Water & Process Tech. Bvba GE Water & Process Technologies Middle East Fze GE Water And Process Technologies France GE Wind Energy, S.L. Geh Tecn Norway GE- Aberdeen Service Centre GE Aberdeen GE-Gh Contractual Services Gems (Milwaukee – Parent) Gems Benelux Nv Gems Denmark Gems Finland Branch Gems Germany Gems Greece Gems Hungary Gems Ireland Gems Israel Gems Ndl Gems Pet Systems Ab Gems Poland Gems Scs Gems Spain Gems Sweden Gems Turkey Gems Uk Gems ultrasound and primary care diagnostics S.à r.l. Gen Nigeria Limited General Electric Austria Gmbh General Electric Canada Inc

3 900 803 667 22 1.570 100 1.333 3 867 8 1 6.397 3 11 1 2 2.621 229 -40 15 5 16 115 1 8 5 38 2 267 7 1 683 18 43 19 188 36 85 34 13 64 3 82 10.738 262 21 30 224 65 2 11 6.924

149

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

General Electric Canada International Inc. General Electric Capital Corp General Electric Capital Corp. General Electric Capital Corporation General Electric Capital Fleet Services General Electric Company General Electric Company General Electric Company Polska Sp.Zo.O. General Electric Do Brasil Ltda General Electric Do Brasil Ltda General Electric Equipment Services Sl General Electric Healthcare Espana Sa General Electric International General Electric International Inc. General Electric International Inc. General Electric International Inc. General Electric International Inc. – Angola Branch (Angola) General Electric International Inc. – Branch – Ly (Libya) General Electric International Inc. (Brunei) General Electric International Inc. Filialas General Electric International Inc. Kazakhstan General Electric International Inc. Sucursal En Esp General Electric International Operations Co Inc. General Electric International Operations Co Inc. General Electric International Operations Company, General Electric International Operations Nigeria General Electric International Operations Nigeria General Electric International Operations Nigeria General Electric International, Inc. General Electric International, Sa General Electric Meelsa Service Centre General Electric Railcar Services Corporation (Del General Electric Rus Infra Llc – Russia Branch (Russia) General Electric Wind Energy Gmbh General Elektrik Ticaret Ve Servis As GE Np Nigeria Limited Ge Np Nigeria Geps Aereo Energy Products Geref Investment Management Granite Services International Inc. Granite Services International Inc. Gulf Turbine Services Llc, Mussafah Ige Energy Services (Uk)Ltd. Imv Invertomatic Victron Uk Ltd. International General Electric Ab International Marketing Systems Ltd. Ionics (Uk) Ltd. Ionics Italba S.p.A. Ionics Italba S.r.l. Kretztechnik A.G. Mds Ik Nbc Universal Global Networks Limited Nutronik Gmbh

150

1.626 25 76 43 8 11.494 26 8 1 992 4 21 18 11 3.677 25 7 11 23 1 96 19 2 105 2 7 8.046 111 1.980 4 13 12 19 40 49 300 -1 -3 14 7 2 1 709 3 1 2 1 1 2 1 2 3 7

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

Picl Egypt Corporation Ltd - Egypt Branch Pignone Espanola Global Services S.A. Pignone Espanola Global Services, PII Limited PII Ltd. PII Mexico, Sa De Cv PII North America, Inc. PII Pipetronix Gmbh PII Sudamerica Sa Pressure Control Systems Nigeria Ltd. Pt Ge Operations Indonesia Renta Inmobiliairia Sa Sabic Innovative Plastics Espana Scpa Satis - Radioisotopos E Proteccoes Satis SLD Sci Fi Channel Europe Sime S.R.L. Ste Martiniquaise De Financement Thermodyn S.A.S. Thermodyn S.A.S - Vat Representation Thermodyne Sa Turbinas Y Mecanica, Ca Turbine Blading Ltd. Turbine Blading Ltd. Uppsala Imanet Ab Vetco Gray Angola Vetco Gray Angola Vetco Gray Inc. Vetco Gray Inc. Vetco Gray Italia S.r.l. Vetco Gray Scandinavia As Vetco Gray Scandinavia As Vetcogray Uk Ltd. Vetcogray Uk Ltd. Visiowave S.à r.l. Zenon Environmental Systems Inc. Production cost Algesco S.p.A. Altair Filter Technology Ltd. Bangalore Engineering Center Bently Nevada Llc Bently Nevada Saudi Arabia Ltd. Bently Nevada Slovakia, Sro Copr Leadership Svc Uk Corp Leadership Srvc Germany Corp Leadership Svc Nl Tax Rep. Corporacion Nuovo Pignone De Venezuela, Sa Corporate Computer Services Ltd. Eni Acqua Campania S.p.A. Erio Benvenuti Fanuc Ge Cnc Italia S.r.l. GE Capital Europe Ltd.

1 11 1.378 22 1.586 1 1 2 1 3 3.431 1 1 2 58 3 3 3 100 3.725 16.622 7 2 40 15 2 303 1 1.688 1 34 224 667 58 2 6

617 7 4.452 17 17 42 4 296 61 1.539 9 32 22 4 60

151

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

GE (China) Co Ltd. GE (China) R&D Center Co., Ltd. GE Aircraft Engine Services GE Artesia Bank GE Artesia Bank Total GE Austria GE Aviation GE Betz Singapore Pte. Ltd. GE Betz S.r.l. GE Business Services Gmbh GE Caledonian Ltd. GE Canada Equipment Finance Gp GE Capital Bank Ltd. GE Capital Commercial Finance GE Capital European Treasury Ltd. GE Capital European Treasury Services Total GE Capital Finance Australasia Pty Ltd. GE Capital Finance B.v. GE Capital Finance S.p.A. GE Capital Fleet Serv. Norway As GE Capital Funding Services Gmbh & Co GE Capital Funding Services North America Total GE Capital International Services GE Capital Market Services GE Capital Services S.r.l. GE Capital Servizi Finanziari S.p.A. GE Capital Solution As GE Central Europe Sourcing & Services Ltd. GE Clinical Systems Devices S.r.l. GE Commerce Shangai Co. Ltd. GE Consumer & Industrial Sa GE Corporate GE Corporate Financial Services Europe Limited GE Corporate Leadership GE Corporate Staff Components GE Crotonville Center Total GE Druck Holdings Ltd. GE Energy (Norway) As GE Energy Europe B.V. GE Energy Learning Center GE Energy Management Services Inc. GE Energy Parts International Llc GE Energy Product France Snc. GE Energy Services GE Energy Uk GE Engine Services Inc. GE Engine Services-Tri-Remanufacturing, Inc. GE Europe Nv GE Europe NV GE Fanuc Automation Solutions GE Global Research Center GE Global Research Zn Ge Deutschla GE Hangwei Ms Co Ltd.

152

380 2 32 771 577 16 1.452 3 26 10 80 51 5 1 4.980 8.178 10 17.382 1.292 11 8 104 3 209 2.587 227 4 61.449 54 753 4 8.156 46 16 1.236 5 23 734 2.269 2 7 23 1.057 1.442 9 17 7 4 8 108 3.384 126 3.254

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

GE Healthcare – Usa GE Healthcare As GE Healthcare As GE Healthcare Australia Pty Limited GE Healthcare Buchler Gmbh & Co Kg GE Healthcare Bv. GE Healthcare Europe Gmbh (Germany) GE Healthcare Europe Gmbh (Italy) GE Healthcare Finalnd GE Healthcare Global Company Inc. GE Healthcare Gmbh & Co Kg GE Healthcare Limited GE Healthcare Ltd. GE Healthcare Ltd. GE Heller Sgps Lda GE Heller Sgps Lda Total GE Holding Luxembourg GE Holding Luxemburg & Co. S.à r.l. GE Hungary Cco.Ltd. GE Hungary Zrt GE India Biz Services Private Lim GE India Business Serv.Private Ltd. GE India Industrial Pvt Ltd. GE Industrial Controls Systems GE Infrastructure Technology International, Inc. GE Inspection & Repair Services Ltd. GE Inspection Technologies Gmbh GE Inspection Technologies Ltd. GE Inter.Oper.Inc Geioc-Fso GE Inter.Servicios Admini.Sa De Cv GE International Inc. GE International Inc. Ireland GE International Inc. Ppsd GE International Mexico S.A. De Cv GE International Operations (Nig) Limited GE Jenbacher Gmbh & Co Ohg GE Keppel Energy Services Pte Ltd. GE Leadership Development Europe GE Leadership Development Europe GE Leasing Italia S.p.A. GE Life Extension Services GE Medical Systems China GE Money Servicing Ltd. GE Monogram GE Noleggi S.p.A. GE Noleggi S.p.A. Total GE Np Nigeria Limited GE Numeris Accessories Gie GE Oec Medical System GE Oec Medical System GE Oil & Gas Products Services S De Rl De Cv GE Oil & Gas - Conmec Llc GE Oil & Gas - Odessa Llc

18 934 1 26 1 3.205 40 6 275 454 1.368 4.436 1 11.355 1.313 487 18 135 4 32.265 1 60 30 18 8.882 468 28 129 2.147 13 13.354 65 23 78 12 10 1.469 632 31 90 69 428 2 2.480 5 44 986 7.375 473 715 92 6 161

153

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

GE Oil & Gas Inc. GE Oil And Gas Operations, Llc GE Pacific Pte Ltd. GE Packaged Power, Inc. GE Pet Systems Ab GE Power Controls Italia S.r.l. GE Power Controls Italia Srl Div Security GE Power Management, S.A. Sociedad GE Power Systems Malaysia GE Power Systems University GE Preco GE Security Srl Total GE Service Luxemburg GE Shared Services GE Smallworld (Uk) Ltd. GE Structured Service Lp GE Ultraschall Deutschland Gmbh & Co Kg GE Vingmed GE Wind Energy, S.L. GE Yokogawa Medical Systems Ltd. GE Yokogawa Ms Ltd. Gecf Indonesia Pt Ge Finance Indo. GE- Doha Qatar GE-Aberdeen Service Centre GEMS (Milwaukee – Parent) GEMS Benelux Nv GEMS Canada GEMS Denmark GEMS Deutschlland GEMS Global Technology GEMS Greece GEMS Hualun China GEMS Hungary GEMS Ireland GEMS Israel GEMS Israel Functional Imagin GEMS limited GEMS NDT GEMS Poland GEMS SCS GEMS South Africa GEMS Sweden GEMS Switzerland GEMS Turkey Gems ultrasound and primary care diagnostics LLC Gems ultrasound and primary care diagnostics S.à r.l. General Electric Canada General Electric Capital Corp. General Electric Company General Electric Company Polska Sp General Electric Do Brasil Ltda General Electric Gesellschaft M.B.

154

2.731 204 3 3.114 1.695 614 12 1.708 290 283 679 21 445 64 1 149 8.118 3.492 39 26 5.332 18 250 49 28.048 335 111 2 280 11.668 2 485 1.276 34 1.422 3.357 182 64 73 47.572 6 117 308 65 1.486 3 897 4 6.758 956 4.095 17

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

General Electric Healthcare Espana Sa General Electric Int. Inc. General Electric International Inc Sucursal En Esp General Electric International Operations Co Inc. General Electric International, Inc. General Electric Meelsa Service Ce General Electric Phils. Inc. General Electric Wind Energy Gmbh Geshenyangturbomachinerytechnology Co., Ltd. Gevisa Sa Global Turbine Serv. India Pvt Ltd. Granite Ser. Int. Incorporated S.A. Granite Service Int. Yuzhno Granite Service Inter. Inc. Brazil Granite Service Inter. Inc. Nigeria Granite Service Inter.Inc Thailand Granite Service Intern. Inc Turkey Granite Service Internat. Inc Uk Granite Service International Inc. Granite Service International Inc. Granite Services Inter.Inc Germany Granite Services Inter.Inc Mexico Granite Services Intern. Inc Spain Granite Services Intern.Inc. GRANITE SERVICES INTERNATIONAL INC 5.318 Granite Services International, In Gtsi Tech.Cons.Beijing Co.Ltd. Gulf Turbine Services Llc, Mussafah Ifo & Other Components Ige Energy Services (Uk) Ltd. Imv Italia Srl Total Instrumentarium dental S.r.l. Items International UK Ltd. Kretztechnik A.G. Mepco Middleeast Power Company Monogram Licensing Internat.Inc. Pignone Espanola Global Services, Pignone Espanola Global Services, PII (Canada ) Limited PII Ltd. PII Sudamerica Sa Saudi Arabia General Electric Co Sdl Leasing (Singapore) Pte Ltd. Tge Energy Services Thermodyn S.A.S. Tip Services Bv. Turbinas Y Mecanica, Ca Usa Instruments Vetco Gray Pte Ltd. Vetco Gray Scandinavia As Viewpoint Bildverarbeitung

312 35.788 4 350 400 1.566 9 1.277 4.672 39 590 304 1.331 244 234 180 8 73 393 1.059 14 38 76 225

4.324 120 390 64 18 407 204 182 3.909 43 19.890 2 1.566 2 515 4 17 2 1.611 2.304 46 9 9 301 200 408

155

Consolidated Financial Statements of Nuovo Pignone Group as at and for the year ended December 31, 2008

SUMMARY OF INTERCOMPANY TRANSACTIONS Income Statement

(thousands of Euro) Amount

Other Financial Income Amersham Biosciences Gmbh Fil.Italiana C/C 5043460 (Z528) GE Betz GE Fanuc Automation Solut. Sa GE Holdings Luxembourg . Co. S.à r.l GE Lighting S.r.l. GE Power Controls Holding Italia S.p.A. Gecets Pool Leader General Electric Company Imv Italia S.r.l. Ionics Italba Irma S.r.l. Oncura Italy-Ct97 Thermodyne S.A.S Vetco Gr Ital Srl-Dl21

8 236 226 1.349 84 34 25.982 2.180 2 4 36 42 11.814 2

Financial Income from Parent Company GE Company Inc.

3.547

Financial Expenses from Parent Company GE Energy Europe BV.

2.824

Interest and other financial expenses Amersham Biosciences GMBH Fil.italiana GE Capital European Treasury Ltd cash pool GE Central Europe Sourcing and Services Ltd. GE Holdings Luxembourg & Co. S.à r.l GE Hungary Rzt GE Lighting S.p.A. GE Lighting S.r.l. GE Power Controls Holding Italia S.p.A. GE Power Controls Italia S.p.A. GE Services Luxembourg GE Zenon Gecets Pool Leader Gepc- Div. Interlogix Heller Sgps Imv Italia S.r.l. Instrumentation Imaging Italia S.r.l. Ionics Italba Italba Services Nuovo Pignone Scotland Ltd. Thermodyne S.A.S Vetco Gray Scandinavia AS

156

66 8.178 27.023 863 15.345 123 7 3 1.073 445 68 26.704 186 487 3 3 152 106 104.128 72 12.829

GE Oil & Gas

Financial Statements of Subsidiary Companies as at and for the year endede December 31, 2008

g

GE imagination at work

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Nuovo Pignone S.p.A. Headquarters: Florence STATO PATRIMONIALE (valori in Euro) Bilancio al 31.12.2008 A) Crediti verso soci per versamenti ancora dovuti B) Immobilizzazioni I - Immobilizzazioni immateriali 1) Costi di impianto e di ampliamento 3) Diritti di brevetto industriale e diritti di utilizzazione delle opere dell’ingegno 4) Concessioni e licenze 5) Avviamento 6) Immobilizzazioni in corso e acconti 7) Altre Totale II - Immobilizzazioni materiali 1) Terreni e fabbricati 2) Impianti e macchinario 3) Attrezzature industriali e commerciali 4) Altri beni 5) Immobilizzazioni in corso e acconti Totale III - Immobilizzazioni finanziarie 1) Partecipazioni in: a) imprese controllate d) altre imprese Totale Totale immobilizzazioni (B) C) Attivo circolante I - Rimanenze 1) Materie prime, sussidiarie e di consumo 2) Prodotti in corso di lavorazione e semilavorati 3) Lavori in corso su ordinazione 4) Prodotti finiti 5) Acconti Totale

158

-

-

68.488.547

76.924.056

885.473.115 1.017.536

992.676.462 1.526.408

954.979.198

1.071.126.927

142.774.989 123.777.201

134.723.531 122.265.971

8.457.960 6.261.886

7.436.606 7.384.946

16.283.421

12.903.589

297.555.457

284.714.643

102.025.823

(valori in Euro)

Bilancio al 31.12.2007

Bilancio al 31.12.2008

Bilancio al 31.12.2007

313.063.110

404.531.655

313.063.110

404.531.655

130.783

76.028

130.783

76.028

643.740.973

227.413.634

13.173.176

22.577.410

4-ter) Imposte Anticipate

115.163.519

117.889.372

5) Verso altri - importi esigibili entro l’esercizio successivo - importi esigibili oltre l’esercizio successivo

167.940.843

285.788.249

369.349

404.104

168.310.192

286.192.353

1.253.581.752

1.058.680.452

-

-

8.569.227

12.593.797

19.800

40.407

8.589.027

12.634.205

3.502.996.790

2.764.820.154

7.500.251

3.055.254

4.865.057.519

4.225.742.800

II - Crediti: 1) Verso clienti - importi esigibili entro l’esercizio successivo - importi esigibili oltre l’esercizio successivo

2) Verso controllate - importi esigibili entro l’esercizio successivo - importi esigibili oltre l’esercizio successivo

4) Verso controllanti - importi esigibili entro l’esercizio successivo 4-bis) Crediti Tributari

102.025.823 Totale

102.025.823 1.354.560.477

102.025.823

III - Attività finanziarie che non costituiscono immobilizzazioni

1.457.867.392 IV - Disponibilità liquide: 1) Depositi bancari e postali 2) Assegni 3) Danaro e valori in cassa

62.693.461

93.348.403

132.485.137 1.927.936.505

136.564.240 1.320.160.432

117.710.908

143.432.423

2.240.826.011

1.693.505.498

Totale Totale attivo circolante (C) D) Ratei e risconti TOTALE ATTIVO

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Nuovo Pignone S.p.A. Headquarters: Florence STATO PATRIMONIALE (valori in Euro) 31.12.2008

31.12.2007

A) Patrimonio netto I - Capitale II - Riserva da sovrapprezzo delle azioni

98.599.780

98.470.320

558.465.365

557.555.157

19.694.064

19.694.064

III - Riserve di rivalutazione IV - Riserva legale

(valori in Euro) 31.12.2008

31.12.2007

11) Debiti verso controllanti - importi esigibili entro l’esercizio successivo

83.525.314

99.648.710

12) Debiti tributari - importi esigibili entro l’esercizio successivo

90.608.941

40.047.198

13) Debiti verso istituti di previdenza e di sicurezza sociale - importi esigibili entro l’esercizio successivo

18.400.728

17.525.556

64.820 18.465.548

92.201 17.617.756

87.094.491

54.017.355

117.926 87.212.417

57.427 54.074.782

3.484.288.052

2.892.928.841

13.584.026

771.091

4.865.057.519

4.225.742.800

1.163.559.236

1.350.001.985

1.163.559.236

1.350.001.985

5.386.444.248

5.101.916.769

- Contratti derivati di copertura - di vendita di valuta - di acquisto di valuta - di acquisto opzioni di valuta - di vendita opzioni di valuta - di acquisto gas naturale

778.334.221 219.600.231 7.723.464 105.603.684

1.048.337.612 289.043.399

- Crediti ceduti a titolo non definitivo (pro solvendo)

313.794.562

218.482.146

- Beni di terzi

216.711.800

253.118.631

7.028.212.209

6.967.150.820

V - Riserve statutarie VI - Riserva per azioni proprie in portafoglio VII - Altre riserve

0

VIII - Utili (Perdite) portate a nuovo

115.073.469

(5.019.798)

IX - Utile (Perdita) dell'esercizio

211.456.474

120.093.267

1.003.289.152

790.793.009

Totale

B) Fondi per rischi ed oneri 1) Per imposte differite 3) Altri Totale

C) Trattamento di fine rapporto di lavoro subordinato

697.401

168.180.439

309.438.878

316.372.082

310.136.279

484.552.521

53.760.009

56.697.339

- importi esigibili oltre l’esercizio successivo

14) Altri debiti - importi esigibili entro l’esercizio successivo - importi esigibili oltre l’esercizio successivo Totale

E) Ratei e risconti D) Debiti 3) Debiti verso soci per finanziamenti

4) Debiti verso banche - importi esigibili entro l’esercizio successivo - importi esigibili oltre l’esercizio successivo

5) Debiti verso altri finanziatori - importi esigibili entro l’esercizio successivo - importi esigibili oltre l’esercizio successivo

6) Acconti

7) Debiti verso fornitori - importi esigibili entro l’esercizio successivo 9) Debiti verso controllate - importi esigibili entro l’esercizio successivo

0

0

TOTALE PASSIVO

GARANZIE E ALTRI CONTI D’ORDINE 3.285.075

3.946.869

9.410.840 12.695.915

12.491.008 16.437.878

424.278.874

412.007.569

Garanzie prestate dalla Società - Garanzie reali - Garanzie personali

Totale garanzie

0 424.278.874

412.007.569

2.110.250.241

1.603.551.652

653.916.379

3.334.422

610.762.401

Altri conti d’ordine - Impegni - di vendita beni e servizi

56.252.263

38.780.895 Totale altri conti d’ordine

159

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Nuovo Pignone S.p.A. Headquarters: Florence CONTO ECONOMICO (valori in Euro) 31.12.2008 A) Valore della produzione 1) Ricavi delle vendite e delle prestazioni 2) Variazioni delle rimanenze di prodotti in corso di lavorazione, semilavorati e finiti 3) Variazioni dei lavori in corso su ordinazione 4) Incrementi di immobilizzazioni per lavori interni 5) Altri ricavi e proventi - contributi in conto esercizio - altri

Totale B) Costi della produzione 6) Per materie prime, sussidiarie e di consumo 7) Per servizi 8) Per godimento di beni di terzi 9) Per il personale a) salari e stipendi b) oneri sociali c) trattamento di fine rapporto e) altri costi

10) Ammortamenti e svalutazioni a) ammortamento delle immobilizzazioni immateriali b) ammortamento delle immobilizzazioni materiali d) svalutazioni dei crediti compresi nell’attivo circolante

31.12.2007

2.523.975.546

2.374.212.221

(4.079.103)

(16.725.315)

607.525.245

639.935.964

3.068.307

2.356.628

436.375 65.413.532

495.617 40.958.482

65.849.907

41.454.099

3.196.339.902

3.041.233.596

(1.390.315.596) (743.662.479) (132.687.323)

(valori in Euro)

(1.393.717.245) (654.951.573) (142.666.463)

C) Proventi e oneri finanziari 16) Altri proventi finanziari: a) altri proventi fin. da crediti iscritti nelle immobilizzazioni - da controllate - da altri

d) proventi diversi dai precedenti - da controllanti - da controllate - da altri

17) Interessi e altri oneri finanziari - verso controllanti - verso controllate - verso altri

17-bis) Utili e perdite su cambi

Totale (16 +/- 17 +/- 17 bis) (237.667.660) (60.316.598) (13.971.361) (7.776.661)

(214.984.015) (57.170.125) (13.420.775) (6.079.448)

(319.732.280)

(291.654.364)

(122.794.851)

(122.741.172)

(40.408.987)

(39.018.933)

(12.981.157)

(4.779.000)

(176.184.995)

(166.539.105)

D) Rettifiche di valore di attività finanziarie E) Proventi e oneri straordinari 20) Proventi - plusvalenze da alienazioni - altri proventi

21) Oneri - minusvalenze da alienazioni - altri oneri - imposte relative ad esercizi precedenti Totale delle partite straordinarie

11) Variazioni delle rimanenze di materie prime, sussidiarie e di consumo 12) Accantonamenti per rischi 13) Altri accantonamenti 14) Oneri diversi di gestione Totale Differenza tra valore e costi della produzione (A - B)

160

Risultato prima delle imposte (A - B +/- C +/- D +/- E) (30.654.942) (18.574.163) (112.004.493) (54.706.511)

(1.501.328) (28.080.721) (145.863.735) (25.289.295)

(2.978.522.781)

(2.850.263.829)

217.817.120

190.969.767

22) Imposte sul reddito dell’esercizio 26) Utile (Perdita) dell'esercizio

31.12.2008

31.12.2007

2.138 2.138

0 2.291 2.291

11.433.038 0 34.083.954 45.516.992

9.169.284 5.981 20.960.798 30.136.063

(39.738.802) (43.312.314) (83.051.117)

(1.278.109) (36.331.195) (38.528.653) (76.137.958)

30.584.276

39.233.522

(6.947.711)

(6.766.082)

0

-

5.084.461 5.084.461

0 33.806.176 33.806.176

(2.145.148) 5.655.038 3.509.890 8.594.351

0 (9.930.369) 50.411 (9.879.958) 23.926.218

219.463.760

208.129.903

(8.007.286)

(88.036.636)

211.456.474

120.093.267

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Nuovo Pignone International S. à r.l. Headquarters: Luxemburg BALANCE SHEET (Expressed in Euro)

(Expressed in Euro)

31.12.2008

31.12.2008

ASSETS

LIABILITIES

Fixed Assets

Capital and reserves

Financial assets

Subscribed capital

Shares in affiliated undertakings

8.214

Loans to affiliated undertakings

95.769.600 95.777.814

3.095.978

Other debtors becoming due and payable within one year

783.437 3.879.415

Total Assets

Legal reserve

Net wealth tax reserve

Amount owed by affiliated undertakings becoming due and payable within one year

99.657.229

-

Reserves

Other reserves

Current Assets

Cash at bank and in hand

Share premium account

95.082.175

9.508.217 425.147 81.400

Result brought forward

48.462.492

Loss/Profit for the financial year

(55.193.219) 98.366.212

Provisions for liabilities and charges Provision for taxation

1.246.105

Creditors Amounts owed to credit institutions becoming due and payable within one year Amounts owed to affiliated undertakings becoming due and payable within one year Total liabilities

44.912 99.657.229

PROFIT AND LOSS ACCOUNT (Expressed in Euro)

(Expressed in Euro)

31.12.2008 Other operating income Income from participating interests derived from affiliated undertakings

483.708

Other operating charges 160.507.982

Income from loans forming part of the fixed assets derived from affiliated undertakings

5.490.230

Other interest receivable and similar income derived from affiliated undertakings other interests receivable and similar income

90.622 2.984.807

Loss for the financial year Total income

31.12.2008 Other external charges

Interest payable and similar charges concerning affiliated undertaking other interests payable and charges Tax on profit or loss

55.193.219

Other taxes Profit for the financial year Total charges

192.140 210.842.071 13.708.302 8.055 224.750.568

224.750.568

161

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Corporacion Nuovo Pignone de Venezuela S.A. Headquarters: Caracas BALANCES GENERALES Activos

(Expresado en miles de bolívares constantes)

Pasivos y Patrimonio

(Expresado en miles de bolívares constantes)

31.12.2008 Pasivos circulantes:

Activos circulantes: Efectivo

5.362.327

Cuentas por cobrar - Comerciales - Compañias relacionadas - Otras

2.333.010 4.605.558 30.410

Total cuentas por cobrar

6.968.978

Servicios por facturar Impuesto al valor agregado Impuesto sobre la renta diferido Gastos pagados por anticipado

1.749.688 5.846.462 115.059 795.261

Total activos circulantes

20.837.775

Vehículos, muebles y equipo Menos depreciación acumulada

2.168.722 1.742.852

Total vehículos, muebles y equipo Depósitos en garantia

131.716 9.113.521 7.791

Total cuentas por pagar

9.253.028

Gastos acumulados Apartado para indemnizaciones laborales

3.482.336 685.991

Total pasivos circulantes

13.421.355

Patrimonio: - Capital social actualizado - Déficit - Reserva legal - Décifit acumulado

174.911 (1.863.017)

Total déficit

(1.688.106)

Total patrimonio

7.905.263

9.593.369

425.870

21.326.618

ESTADOS DE GANANCIAS Y PÉRDIDAS (Expresado en miles de bolívares constantes) 31.12.2008 Ingresos por servicios Costo por servicios prestados Utilidad bruta Gastos de ventas, administración y generales Utilidad (Pérdida) en operaciones

17.968.168 7.631.224 10.336.944 9.969.928 367.016

Ingreso (costo) integral de financiamento: Diferencia en cambio, neta

191.450

Intereses, neto

(971.185)

Ganancia en venta de tìtulos valores

3.591.555

Resultado monetario del ejercicio

(1.760.975)

Total integral (costo) de financiamento

1.050.845

Otros ingresos: Ganancia en la venta y retiro de vehículos, muebles y equipo Otros, neto Total otros ingresos Utilidad (Pérdida) antes de impuesto sobre la renta

2.816 16.192 19.008 1.436.869

Impuesto sobre la renta: Corriente

240.781

Diferido

(129.689)

Total impuesto sobre la renta

111.092

162

Cuentas por pagar - Comerciales - Compañias relacionadas - Empleados

62.973

Total activos

Utilidad (Pérdida) neta

31.12.2008

1.325.777

Total pasivos y patrimonio

21.326.618

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Pignone Inc. Headquarters: New York CONSOLIDATED BALANCE SHEET (U.S. $) 31.12.2008 Balance Sheet Due from GE par. and cons. aff. W/n own bus. US Federal Income Capital stock - GE share Retained earnings at Jan.1 - GE share Profit/Loss

2.893.320,38 79.220,44 (2.000,00) (3.359.487,48) 388.946,66

PROFIT AND LOSS DETAILS (U.S. $) 31.12.2008 Net sales billed to external customer Sales of products and services to NP Group Provvigion income to NP Group Intercompany others w/n own echel. above gr. Intercompany others consolidated components All Other cost and expenses - direct materials sales - direct labor sales - other Vc Base cost line lex - Fx gain / loss - other BC OM Interest on bank loan notes and inst. payable Interest on other transactions Total Profit / Loss

(456.709,46) (1.021.227,15) 0,00 (6.226,93) 0,00 0,00 60.068,24 49.021,62 241.269,00 0,00 (128.675,15) 1.647.161,46 384.681,63 85,75 4.179,28 388.946,66

163

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Pignone Engineering Headquarters: London BALANCE SHEET

PROFIT AND LOSS ACCOUNT (Thousands £)

(Thousands £)

31.12.2008

31.12.2008

Fixed assets Intangible assets: Intangibles Goodwill Total Tangible assets: Investment property Land and buildings Plant & machinery Fixtures & fittings, office equipment Motor vehicles/other Finance leases Operating leases Total Investments: Shares in subsidiary companies Interests in associates Other investments Total

0 0 0 0 1,000,306 90,804 0 0 0 0 1,091,110 0 0 0 0

Current assets Stocks and work in progress Debtors(third party) Finance lease receivables Debtors intra-group Cash and bank balances Total

0 155,866 0 9,376,762 -1,210 9,531,418

Creditors (Third party) due within one year Creditors intra-group

-1,239,754 -183,118

Net current assets

8,108,546

Total

9,199,656

Creditors (Third party) due after more than one year Creditors intra-group Provisions for liabilities and charges Pension asset Pension liability Total net assets

0 0 0 0 0 9,199,656

(Turnover) Cost of sales (Gross Profit)

-952,534 0 -952,534

Selling and distribution costs Administrative expenses (Other operating income) / charges (Profit before exceptional items)

0 1,324,262 -418,148 -46,420

(Exceptional income) / expenses (Trading profit)

0 -46,420

(Investment income - include dividends from subsidiaries etc.) (Profit before interest)

0 -46,420

(Interest receivable) Interest payable (Profit on ordinary activities before tax)

-440,870 0 -487,290

Taxation on profit on ordinary activities (Profit on ordinary activities after tax)

273,806 -213,484

Minority interest (Profit for the financial year)

0 -213,484

Dividends payable (Retained profit for the financial year)

0 -213,484

BALANCE SHEET - CAPITAL EMPLOYED (Thousands £) 31.12.2008 Called up share capital Share premium account Retained earnings Revaluation reserve Other reserves Employee share based equity reserve Partnership accounts

-70.001 0 -9,129,655 0 0 0 0

Total

-9,199,656

Minority interest Total capital employed

164

0 -9,199,656

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Capital Funding Services S.r.l. Headquarters: Milan STATO PATRIMONIALE Attivo

(Valori in Euro)

Passivo

31.12.2008 Crediti Attività materiali

1.068.990.282 12.449

31.12.2008 Debiti Passività fiscali

2.242

a) correnti

Attività fiscali

169.532

b) differite

a) correnti

106.979

Altre passività

Attività immateriali

b) anticipate

62.553

Altre attività

1.975.204

Trattamento di fine rapporto del personale Capitale Sovrapprezzi di emissione

Totale dell’attivo

1.071.149.709

(Valori in Euro)

Riserve Utile (perdita) d’esercizio

Totale del passivo e del Patrimonio Netto

937.476.059 6.212.803 0 6.212.803 13.984.073 476.231 35.120.000 7.792.588 61.935.664 8.152.291

1.071.149.709

CONTO ECONOMICO (Valori in Euro) 31.12.2008 Interessi attivi e proventi assimilati

78.821.295

Interessi passivi e oneri assimilati

(55.215.866)

Margine di interesse

23.605.429

Commissioni attive Commissioni passive Commissioni nette Margine di intermediazione

6.670.006 (966.989) 5.703.017 29.308.446

Rettifiche / Riprese di valore nette per deterioramento di:

(829.860)

a) crediti

(829.860)

Spese amministrative: (a) spese per il personale (b) altre spese amministrative Rettifiche di valore nette su attività materiali Rettifiche di valore nette su attività immateriali Altri oneri di gestione Altri proventi di gestione

(17.184.083) (3.152.717) (14.031.366) (19.397) (2.986) 0 1.923.023

Risultato netto della gestione operativa

13.195.143

Utile (Perdite) della operatività corrente al lordo delle imposte

13.195.143

Imposte sul reddito dell’esercizio dell’operatività corrente

(5.042.852)

Utile (Perdita) della operatività corrente al netto delle imposte

8.152.291

Utile (Perdita) di esercizio

8.152.291

165

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Bently Nevada Italia S.r.l. Headquarters: Agrate Brianza (MI) STATO PATRIMONIALE Attivo

(Valori in Euro)

Passivo

31.12.2008 A) Crediti verso soci per versam. ancora dovuti (di cui già richiamati) B) Immobilizzazioni I - Immobilizzazioni immateriali 1) Costi di impianto e di ampliamento 7) Altre

0

625 23.925 24.550

31.12.2008 A) Patrimonio netto I - Capitale IV - Riserva legale VII - Altre riserve distintamente indicate: - Riserva non distribuibile ex art. 2426 IX - Utile (Perdita) dell’esercizio Totale patrimonio netto

II - Immobilizzazioni materiali 3) Attrezzature industriali e commerciali 4) Altri beni

III - Immobilizzazioni finanziarie Totale immobilizzazioni C) Attivo circolante I - Rimanenze II - Crediti 1) Verso clienti - entro 12 mesi 3bis) Verso imprese consociate - entro 12 mesi 4) Verso controllanti - entro 12 mesi 4bis) Per crediti tributari - entro 12 mesi 4ter) Per imposte anticipate - entro 12 mesi 5) Verso altri - entro 12 mesi

84.893

0

1.730.981 1.149.654 340.319 129.827 67.287 7.492 3.425.560 0

IV - Disponibilità liquide

0

D) Ratei e Risconti - vari Totale attivo

80.000 16.000 1.498 1.096.583 1.194.081

B) Fondi per rischi ed oneri 2) Per per imposte differite

1.478

Totale fondi per rischi e oneri

1.478

0

III - Attività finanziarie che non costituiscono immobilizzazioni

Totale attivo circolante

166

55.715 4.628 60.343

(Valori in Euro)

C) Trattamento di fine rapporto di lavoro subordinato D) Debiti 4) Debiti verso banche - entro 12 mesi 5) Debiti verso altri finanziatori - entro 12 mesi 7) Debiti verso fornitori - entro 12 mesi 10bis) Debiti verso imprese consociate - entro 12 mesi 11) Debiti verso controllanti - entro 12 mesi 12) Debiti tributari - entro 12 mesi 13) Debiti verso istituti di previdenza e di sicurezza sociale - entro 12 mesi 14) Altri debiti - entro 12 mesi Totale debiti

3.425.560

14.520 3.524.973

E) Ratei e risconti TOTALE PASSIVO Conti d’ordine

221.095

78 1.014.192 372.673 347.835 0 65.819

122.174 185.548 2.108.319 0 3.524.973 0

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Bently Nevada Italia S.r.l. Headquarters: Agrate Brianza (MI) CONTO ECONOMICO

A) Valore della produzione 1) Ricavi delle vendite e delle prestazioni 5) Altri ricavi e proventi - vari Totale valore della produzione B) Costi della produzione 6) Per materie prime, sussidiarie, di consumo e di merci 7) Per servizi 8) Per godimento di beni di terzi 9) Per il personale a) salari e stipendi b) oneri sociali c) trattamento di fine rapporto e) altri costi 10) Ammortamenti e svalutazioni a) ammortamento delle immobilizzazioni immateriali b) ammortamento delle immobilizzazioni materiali d) svalutazioni dei crediti compresi nell’attivo circolante e delle disponibilità liquide 14)

Oneri diversi di gestione

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

9.334.815 457.000 9.791.815

4.256.789 1.582.150 160.227

C) Proventi ed oneri finanziari 16) Altri proventi finanziari: d) da proventi diversi dai precedenti - da imprese consociate - altri 17)

Interessi ed altri oneri finanziari - da imprese consociate - altri

17bis) Utili e perdite su cambi Totale proventi e oneri finanziari

1.325.461 370.785 70.407 23.925 1.790.578

14.498 14.781 30.000 59.279 184.633

Totale costi della produzione

8.033.656

Differenza tra valore e costi della produzione (A - B)

1.758.159

1.908 2.403 4.311 22.712 28 22.740 29.772 11.343

D) Rettifiche di valore di attività finanziarie

0

E) Proventi ed oneri straordinari

0

Risultato prima delle imposte (A–B±C±D±E) 22) Imposte sul reddito dell’esercizio correnti, differite e anticipate a) Imposte correnti b) Imposte differite (anticipate)

26) Utile (perdita) dell’esercizio

1.769.502

602.907 70.012 672.919 1.096.583

167

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Transportation Systems S.p.A. Headquarters: Florence STATO PATRIMONIALE Attivo

(Valori in Euro)

Passivo

31.12.2008 A) Crediti verso soci per versamenti ancora dovuti con separata indicazione della parte già richiamata

0

II - Riserva da sopraprezzo delle azioni

IV - Riserva legale

3) Diritti di brevetto industriale e diritti di utilizzazione delle opere dell’ingegno

506.100

7) Altre

558.437 1.064.537

II - Immobilizzazioni materiali 2) Impianti e macchinario

227.730

3) Attrezzature industriali e commerciali

579.995

4) Altri beni

217.071 1.024.796

4) Prodotti finiti e merci

4 bis) Crediti tributari 4 ter) Imposte anticipate 5) Verso altri

VIII - Utili (Perdite) portati a nuovo

Per imposte, anche differite

14.331

3)

Altri

2.103.664

2.943.265

565.748 508.806 148.437 3.209.158 4.432.149 0 16.690.429 23.266.409

0 2.154.648

Totale fondi per rischi ed oneri

2.154.648

C) Trattamento di fine rapporto di lavoro subordinato

2.879.029

D) Debiti, con separata indicazione, per ciascuna voce, degli importi esigibili oltre l’esercizio successivo

4.699.700

4)

Debiti verso banche

27.811.889

6)

Acconti

659.040

7)

Debiti verso fornitori

15.219.861

11) Debiti verso controllanti

2.231.100

12) Debiti tributari

II - Crediti con separata indicazione, per ciascuna voce, degli importi esigibili entro l’esercizio successivo:

2) Verso controllanti

0

VII - Altre riserve, distintamente indicate: 1) Fondo sopravvenienze attive 2) Fondi da condono Legge 516/82 3) Fondo speciale Legge 46/82 4) Riserva straordinaria

2)

36.113.894

1) Verso clienti

334.300

VI - Riserve statutarie

14.331

I - Rimanenze

3) Lavori in corso su ordinazione

0

B) Fondi per rischi ed oneri

C) Attivo circolante

2) Prodotti in corso di lavoraz. e semilav.

249.531

0

Totale patrimonio netto

2) Crediti:

1) Materie prime, sussidiarie e di consumo

1.560.000

V - Riserva per azioni proprie in portafoglio

IX - Utile (Perdita) dell’esercizio

III - Immobilizzazioni finanziarie con separata indicazione, per ciascuna voce dei crediti, degli importi esigibili entro l’esercizio successivo:

Totale immobilizzazioni

A) Patrimonio netto

III - Riserve di rivalutazione

I - Immobilizzazioni immateriali

d) verso altri

31.12.2008

I - Capitale

B) Immobilizzazioni con separata indicazione di quelle concesse in locazione finanziaria:

(Valori in Euro)

6.159.482 0 302.581

0 7.465

629.108

13) Debiti verso istituti previdenziali e di sicurezza sociale

1.077.376

14) Altri debiti

1.521.099

Totale debiti

20.686.009

4.149.958 191.021

E) Ratei e risconti, con separata indicazione dell’aggio su prestiti

143.173

10.803.042 III - Attività finanziarie che non costituiscono immobilizzazioni

TOTALE PASSIVO 0

IV - Disponibilità liquide

Conti d’ordine Fidejussioni bancarie e assicurative

36.587.063

1) Depositi bancari e postali

32.064

Fidejussioni di terzi

286.661

3) Danaro e valori in cassa

6.870

Beni di terzi in conto deposito

355.834

38.934

Contratti derivati verso banche

Totale attivo circolante D) Ratei e risconti con separata indicazione del disaggio su prestiti Totale attivo

168

49.129.268

46.955.870

Beni in leasing Totale conti d'ordine

69.734 49.129.268

0 57.383 37.286.941

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Transportation Systems S.p.A. Headquarters: Florence CONTO ECONOMICO (Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008 C) Proventi ed oneri finanziari:

A) Valore della produzione 1)

Ricavi delle vendite e delle prestazioni

90.596.026

2)

Variazioni delle rimanenze di prodotti in corso di lavorazione, semilavorati e finiti

-6.574.366

3)

Variazioni dei lavori in corso su ordinazione

-2.928.857

5)

Altri ricavi e proventi, con separata indicazione dei contributi in conto esercizio

11.410.798

Totale valore produzione

92.503.601

B) Costi della produzione Acquisti di materie prime, sussidiarie, consumo e merci

15.777.167

7)

Per servizi

22.211.377

8)

Per godimento beni di terzi

9)

Per il personale:

b) oneri sociali c) trattamento di fine rapporto

1.209.221

17) Interessi e altri oneri finanziari, con separata indicazione di verso imprese controllate e collegate e verso controllanti 17 bis) Utili e perdite su cambi

132.035

1.176.776 -10.517

-1.055.258

D) Rettifiche di valore di attività finanziarie 19) Svalutazioni a) di partecipazioni

0

10.085.544 3.218.446 482.661 13.786.651

10) Ammortamenti e svalutazioni: a) ammortamento immobilizzazioni immateriali

354.809

b) ammortamento immobilizzazioni materiali

377.497

d) svalutazioni dei crediti compresi nell’attivo circolante e delle disponibilità liquide

d) proventi diversi dai precedenti, con separata indicazione di quelli da imprese controllate e collegate e di quelli da controllanti

Risultato della gestione finanziaria

6)

a) salari e stipendi

16) Altri proventi finanziari:

11.167.133 11.899.439

11) Variazioni delle rimanenze di materie prime, sussidiarie, di consumo e merci

121.641

12) Accantonamenti per rischi

426.448

14) Oneri diversi di gestione

791.254

Totale costi di produzione

66.223.198

Differenza tra valore e costi della produzione (A-B)

26.280.403

E) Proventi e oneri straordinari: 20) Proventi, con separata indicazione delle plusvalenze da alienazioni i cui ricavi non sono iscrivibili al n.5)

608.501

21) Oneri, con separata indicazione delle minusvalenze da alienazioni i cui effetti contabilii non sono iscrivibili al n. 14) e delle imposte relative ad esercizi precedenti - sopravvenienze passive

83.607

Totale partite straordinarie Risultato prima delle imposte (A-B+/-C+/-D+/-E) 22) Imposte sul reddito dell'esercizio, correnti, differite e anticipate

23) Utile (Perdita) d’esercizio

524.894

25.750.039

9.059.610

16.690.429

169

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Consorzio Tragaz Headquarters: Milan STATO PATRIMONIALE Attivo

(Valori in Euro)

Passivo

31.12.2008 Attivo circolante Crediti Verso Clienti - entro l’esercizio successivo Verso Altri - consorzio entro l’esercizio successivo Tributari - entro l’esercizio successivo Totale Disponibilità liquide Depositi bancari e postali Denaro e valori in cassa

0

A) Patrimonio netto Fondo consortile Utili/perdite dell’esercizio

51.646 0

Totale

51.646

25.020

0 0

25.020

Totale

0

Verso Altri - Fondo rischi

0

Totale

0

Banche

0

Tributari - entro l’esercizio successivo

0

26.626 0 26.626

Totale attivo circolante

51.646

Totale attivo

31.12.2008

Debiti Verso fornitori - Consorziate - entro l’esercizio successivo - Diversi - entro l’esercizio successivo

0

Totale

Risconti Altri

(Valori in Euro)

Totale 0 51.646

Totale passivo Conti d’ordine

0 51.646 0

CONTO ECONOMICO (Valori in Euro)

(Valori in Euro)

31.12.2008 A) Valore della produzione Ricavi delle vendite e delle prestazioni Altri ricavi e proventi

0 607.726

Totale

607.726

B) Costi della produzione Lavoro Acquisti per materie prime, sussidiarie, consumo e merci Costi per servizi Oneri diversi di gestione

0 0 25.988 600.618

Totale

626.606

Differenza tra valore e costi della produzione

-18.880

Accantonamenti

170

0

31.12.2008 Proventi ed oneri finanziari Proventi finanziari diversi Interessi ed altri oneri finanziari

20.909 -436

Totale

20.473

Proventi ed oneri straordinari Proventi straordinari Oneri straordinari Totale

0 404 -404

Risultato prima delle imposte

1.189

Imposte sul reddito Italia Imposte sul reddito Russia

-1.189 0

Totale

-1.189

Utile (perdita) dell’esercizio

0

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Jenbacher S.r.l. Headquarters: Bolzano STATO PATRIMONIALE Attivo

(Valori in Euro)

(Valori in Euro)

31.12.2008 A) Crediti verso soci per versamenti ancora dovuti B) Immobilizzazioni I - Immobilizzazioni immateriali 1) Costi di impianto e di ampliamento 2) Costi di ricerca, sviluppo e di pubblicità 3) Diritti di brevetto industriale e diritti di utilizzazione delle opere dell’ingegno 4) Concessioni, licenze, marchi e diritti simili 5) Avviamento 6) Immobilizzazioni in corso e acconti 7) Altre Totale immobilizzazioni immateriali II - Immobilizzazioni materiali 1) Terreni e fabbricati 2) Impianti e macchinario 3) Attrezzature industriali e commerciali 4) Altri beni 5) Immobilizzazioni in corso e acconti Totale immobilizzazioni materiali III - Immobilizzazioni finanziarie 1) Partecipazioni in: a) imprese controllate b)imprese collegate c) imprese controllanti d) altre imprese 2) Crediti: a) verso imprese controllate - entro esercizio - oltre esercizio b) verso imprese collegate esigibili - entro esercizio - oltre esercizio c) verso impresecontrollanti - entro esercizio - oltre esercizio d) verso altri - entro esercizio - oltre esercizio 3) Altri titoli 4) Azioni proprie - valore nominale complessivo Totale immobilizzazioni finanziarie

0

0 378 2.619 0 0 0 0 2.997

0 33.772 256.649 75.300 0 365.721

0 0 0 0

0 0 0 0 0 0 0 0 0

31.12.2008 II - Crediti 1) Crediti verso clienti esigibili entro l’esercizio esigibili oltre l’esercizio 2) Crediti verso imprese controllate esigibili entro l’esercizio esigibili oltre l’esercizio 3) Crediti verso imprese collegate esigibili entro l’esercizio esigibili oltre l’esercizio 4) Crediti verso controllanti esigibili entro l’esercizio esigibili oltre l’esercizio 4-bis) Crediti tributari entro l’esercizio oltre l’esercizio 4-ter) Imposte anticipate entro l’esercizio oltre l’esercizio 5) Crediti verso altri entro l’esercizio oltre l’esercizio Totale crediti III - Attività finanziarie che non costituiscono immobilizzazioni 1) Partecipazioni in imprese controllate 2) Partecipazioni in imprese collegate 3) Partecipazioni in imprese controllanti 4) Altre partecipazioni 5) Azioni proprie (valore nominale) 6) Altri titoli Totale attività finanziarie che non costituiscono immobilizzazioni IV - Disponibilità liquide 1) Depositi bancari e postali 2) Assegni 3) Danaro e valori in cassa Totale disponibilità liquide C) Totale attivo circolante D) Ratei e risconti 1) Disaggio su prestiti 2) Altri

0 0 Totale attivo

B) Totale Immobilizzazioni C) Attivo circolante I - Rimanenze 1) Materie prime, sussidiarie e di consumo 2) Prodotti in corso di lavoraz. e semilavorati 3) Lavori in corso su ordinazione 4) Prodotti finiti e merci 5) Acconti Totale rimanenze

22.031.493 22.031.493 0 0 0 0 0 0 0 8.416.332 8.416.332 0 340.391 340.391 0 172.209 172.209 0 18.066 18.066 0 30.978.491

0 0 0 0 0 0 0

0 0 373 373 32.583.903

0 53.808 53.808 33.006.429

368.718

0 0 0 836.665 768.374 1.605.039

171

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Jenbacher S.r.l. Headquarters: Bolzano STATO PATRIMONIALE Passivo

A) Patrimonio netto I - Capitale Sociale II - Riserva da sopraprezzo delle azioni III - Riserve di rivalutazione IV - Riserva legale V - Riserve statutarie VI - Riserva per azioni proprie in portafoglio VII - Altre riserve, distintamente indicate: - riserva straordinaria VIII - Utili (Perdite) portati a nuovo IX - Utile (Perdita) dell’esercizio Totale Patrimonio Netto

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

258.000 0 0 51.874 0 0 9.574.979 9.574.979 0 5.766.907 15.651.760

B) Fondi per rischi ed oneri 1) Per trattamento di quiescenza e obblighi simili 2) Per imposte, anche differite 3) Altri Totale fondi per rischi ed oneri

0 0 500.000 500.000

C) Trattamento di fine rapporto di lavoro subordinato

531.332

D) Debiti 1) Obbligazioni esigibili entro e oltre l’esercizio 2) Obbligazioni convertibili esigibili entro e oltre l’esercizio 3) Debiti verso soci per finanziamenti esigibili entro e oltre l’esercizio 4) Debiti verso banche esigibili entro l’esercizio esigibili oltre l’esercizio 5) Debiti verso altri finanziatori esigibili entro e oltre l’esercizio 6) Acconti esigibili entro l’esercizio esigibili oltre l’esercizio 7) Debiti verso fornitori esigibili entro l’esercizio esigibili oltre l’esercizio 8) Debiti rappresentati da titoli di credito esigibili entro e oltre l’esercizio 9) Debiti verso imprese controllate esigibili entro e oltre l’esercizio 10) Debiti verso imprese collegate esigibili entro e oltre l’esercizio 11) Debiti verso controllanti esigibili entro e oltre l’esercizio

172

0 0 0 7.212 0 0 5.747.717 0 9.560.703 0 0 0 0 384.890

12) Debiti tributari esigibili entro l’esercizio esigibili oltre l’esercizio 13) Debiti verso istituti di previdenza e sicurezza sociale esigibili entro l’esercizio esigibili oltre l’esercizio 14) Altri debiti esigibili entro l’esercizio esigibili oltre l’esercizio Totale debiti E) Ratei e Risconti - Aggio su prestiti - Altri Totale ratei e risconti TOTALE PASSIVO Conti d’ordine A) Conti d’ordine del sistema improprio dei beni altrui presso di noi B) Conti d’ordine del sistema improprio degli impegni C) Conti d’ordine del sistema improprio dei rischi:

128.755 0 121.839 0 371.478 0 16.322.594

0 743 743 33.006.429

622.155 300.267 145.664

Fidejussioni a favore di imprese controllate

0

Fidejussioni a favore di imprese collegate

0

Fidejussioni a favore di controllanti

0

Fidejussioni a favore di consociate

0

Altre Fidejussioni

145.664

Avalli a favore di imprese controllate

0

Avalli a favore di imprese collegate

0

Avalli a favore di controllanti

0

Avalli a favore di consociate

0

Altri avalli

0

Altre garanzie personali a favore di imprese controllate

0

Altre garanzie personali a favore di imprese collegate

0

Altre garanzie personali a favore di controllanti

0

Altre garanzie personali a favore di consociate

0

Altre garanzie personali

0

Altre garanzie reali a favore di imprese controllate

0

Altre garanzie reali a favore di imprese collegate

0

Altre garanzie reali a favore di controllanti

0

Altre garanzie reali a favore di consociate

0

Altre garanzie reali D) Conti d’ordine del sistema improprio dei nostri beni presso terzi E) Raccordo tra norme civili e fiscali Totale conti d’ordine

0 0 0 1.068.086

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Jenbacher S.r.l. Headquarters: Bolzano CONTO ECONOMICO

A) Valore della produzione 1) Ricavi delle vendite e delle prestazioni 2) Variazioni delle rimanenze di prodotti in corso di lavorazione, semilavorati e prodotti finiti 3) Variazioni dei lavori in corso su ordinazione 4) Incrementi di immobilizzazioni per lavori interni 5) Altri ricavi e proventi: - contributi in conto esercizio - altri Totale valore produzione (A) B) Costi della produzione 6) Per materie prime, sussidiarie, di consumo e di merci 7) Per servizi 8) Per godimento beni di terzi 9) Per il personale: a) salari e stipendi b) oneri sociali c) trattamento di fine rapporto d) trattamento di quiescenza e simili e) altri costi 10) Ammortamenti e svalutazioni: a) ammortamento immobilizzazioni immateriali b) ammortamento immobilizzazioni materiali c) altre svalutazioni delle immobilizzazioni d) svalutazione dei crediti compresi nell’attivo circolante e delle disponibilità liquide 11) Variazioni delle rimanenze di materie prime, sussidiarie, di consumo e merci 12) Accantonamenti per rischi 13) Altri accantonamenti 14) Oneri diversi di gestione Totale costi di produzione (B) Differenza tra valore e costi della produzione (A-B) C) Proventi ed oneri finanziari 15) Proventi da partecipazioni: a) in imprese controllate b) in imprese collegate c) in altre imprese 16) Altri proventi finanziari a) da crediti iscritti nelle immobilizzazioni: 1) in imprese controllate 2) in imprese collegate 3) in imprese controllanti 4) in altre imprese b) da titoli iscritti nelle immobilizzazioni che non costituiscono partecipazioni:

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

56.323.724 0 0 0 0 305.301

c) da titoli iscritti nell’attivo circolante che non costituiscono partecipazioni d) proventi diversi dai precedenti: 1) in imprese controllate 2) in imprese collegate 3) in imprese controllanti 4) altri

0 0 0 526.174 14.579 540.753

56.629.025

17) Interessi e altri oneri finanziari: 1) in imprese controllate 2) in imprese collegate 3) in imprese controllanti 4) altri

42.451.991 2.314.668 378.657

17-bis) Utili e perdite su cambi

0 0 0 14.807 14.807 -62

Totale proventi e oneri finanziari (C)

525.884

2.423.149 752.098 146.738 0 3.201 3.325.186

10.581 138.548 0 100,000 249.129 -19.430 0 0 19.846

D) Rettifiche di valore di attività finanziarie 18) Rivalutazioni a) di partecipazioni b) di immobilizzazioni finanziarie che non costituiscono partecipazioni c) di titoli iscritti nell’attivo circolante che non costituiscono partecipazioni 19) Svalutazioni a) di partecipazioni b) di immobilizzazioni finanziarie che non costituiscono partecipazioni c) di titoli iscritti nell’attivo circolante che non costituiscono partecipazioni Totale delle rettifiche di valore di attività finanziarie (D) E) Proventi e oneri straordinari 20) Proventi: a) plusvalenze da alienazioni b) altri proventi

48.720.047

7.908.978

0 0 0

0 0 0 0 0

21) Oneri: a) minusvalenze da alienazioni b) imposte relative ad esercizi precedenti c) altri oneri

Totale partite straordinarie (20-21) Risultato prima delle imposte (A-B+-C+-D+-E) 22) Imposte sul reddito dell'esercizio: a) imposte correnti b) imposte differite e anticipate

26) Utile (Perdita) d’esercizio

0 0 0 0 0 0

0

25.549 174.174 199.723 0 0 106.976 106.976 92.747 8.527.609

2.760.643 59 2.760.702 5.766.907 173

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Medical Systems Information Technologies S.r.l. Headquarters: Milan STATO PATRIMONIALE Attivo

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

A) Crediti verso soci per versamenti ancora dovuti B) Immobilizzazioni I - Immobilizzazioni immateriali 1) Costi di impianto e di ampliamento 2) Costi di ricerca, di sviluppo e di pubblic. 3) Diritti di brevetto industriale e diritti di utilizzazione delle opere dell’ingegno 4) Concessioni, licenze, marchi e diritti sim. 5) Avviamento 6) Immobilizzazioni in corso e acconti 7) Altre Totale immobilizzazioni immateriali II - Immobilizzazioni materiali 1) Terreni e fabbricati 2) Impianti e macchinario 3) Attrezzature industriali e commerciali 4) Altri beni 5) Immobilizzazioni in corso e acconti Totale immobilizzazioni materiali III - Immobilizzazioni finanziarie 1) Partecipazioni 2) Crediti: a) verso imprese controllate esigibili entro l’es. successivo verso imprese controllate esigibili oltre l’es. successivo b) verso imprese collegate esigibili entro l’es. successivo verso imprese collegate esigibili oltre l’es. successivo c) verso controllanti esigibili entro l’es. successivo verso controllanti esigibili oltre l’es. successivo d) verso altri esigibili entro l’es. successivo verso altri esigibili oltre l’es. successivo 3) Altri titoli 4) Azioni proprie Totale immobilizzazioni finanziarie Totale immobilizzazioni (B)

0

0

Totale crediti

0

0

180.270.007

174

III - Attività finanziarie che non costituiscono immobilizzazioni 1) Partecipazioni in imprese controllate 2) Partecipazioni in imprese collegate 3) Partecipazioni in imprese controllanti 4) Altre partecipazioni 5) Azioni proprie 6) Altri titoli 7) Crediti verso imprese consociate IV - Disponibilità liquide 1) Depositi bancari e postali 2) Assegni 3) Danaro e valori in cassa

0 180.270.007

0

344.726 0 0 0 0 175.316 67.401 1.270

588.713

25.995.407

0 207

Totale disponibilità liquide

207

Totale attivo circolante (C)

26.584.327

D) Ratei e Risconti: - Disaggio sui prestiti - Altri

0

Totale ratei e risconti attivi (D)

0

Totale attivo (A+B+C+D)

C) Attivo circolante I - Rimanenze 1) Materie prime, sussidiarie e di consumo 2) Prodotti in corso di lavoraz. e semilav. 3) Lavori in corso su ordinazione 4) Prodotti finiti e merci 5) Acconti Totale rimanenze

II - Crediti 1) Verso clienti esigibili entro l’es. successivo Verso clienti esigibili oltre l’es. successivo 2) Verso imprese controllate esigibili entro l’es. successivo Verso imprese controllate esigibili oltre l’es. successivo 3) Verso imprese collegate esigibili entro l’es. successivo Verso imprese collegate esigibili oltre l’es. successivo 3bis) Verso imprese consociate esigibili entro l’es. successivo Verso imprese consociate esigibili oltre l’es. successivo 4) Verso controllanti esigibili entro l’es. successivo Verso controllanti esigibili oltre l’es. successivo 4bis) Crediti tributari esigibili entro l’es. successivo Crediti tributari esigibili oltre l’es. successivo 4ter) Imposte anticipate esigibili entro l’es. successivo Imposte anticipate esigibili oltre l’es. successivo 5) Verso altri esigibili entro l’es. successivo Verso altri esigibili oltre l’es. successivo

206.854.334

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Medical Systems Information Technologies S.r.l. Headquarters: Milan STATO PATRIMONIALE Passivo

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008 8)

Debiti rappresentati da titoli di credito

1.736.137

9)

Debiti verso imprese controllate

202.679.436

10)

Debiti verso imprese collegate

A) Patrimonio netto I - Capitale Sociale II - Riserva da sopraprezzo delle azioni

10bis) Debiti verso imprese consociate

III - Riserve di rivalutazione IV - Riserva legale

1.146.501

- Esigibili entro l’esercizio successivo

0

- Esigibili oltre l’esercizio successivo

V - Riserva per azioni proprie in portafoglio

11) Debiti verso controllanti:

VI - Riserve statutarie

- Esigibili entro l’esercizio successivo

VII - Altre riserve - Riserva per avanzo di fusione

290.045

- Esigibili oltre l’esercizio successivo

VIII - Utili (Perdite) portati a nuovo

14.916.210

IX - Utile (Perdita) dell’esercizio

-14.253.145

12) Debiti tributari - Esigibili entro l’esercizio successivo

9.494

- Esigibili oltre l’esercizio successivo Totale patrimonio netto (A)

206.225.139

13) Debiti verso istituti di previdenza e sicurezza sociale - Esigibili entro l’esercizio successivo

B) Fondi per rischi ed oneri 1) Per trattam. di quiescenza e obblighi simili

14) Altri debiti

2) Per imposte 3) Altri Totale fondi per rischi ed oneri (B)

C) Trattamento di fine rapporto di lavoro subordinato

0

- Esigibili oltre l’esercizio successivo

- Esigibili entro l’esercizio successivo 149.480 149.480

0

58.480

- Esigibili oltre l’esercizio successivo Totale debiti (D)

451.089

E) Ratei e risconti - Aggio su prestiti - Altri

28.626

Totale ratei e risconti

28.626

D) Debiti 1) Obbligazioni 2) Obbligazioni convertibili

TOTALE PASSIVO (B+C+D+E)

629.195

3) Debiti verso soci per finanziamenti TOTALE PASSIVO E NETTO (A+B+C+D+E)

4) Debiti verso banche - Esigibili entro l’esercizio successivo

77 Conti d’ordine

- Esigibili oltre l’esercizio successivo

1) Sistema improprio dei beni altrui presso noi

5) Debiti verso altri finanziatori 6) Acconti

2) Sistema improprio degli impegni

- Esigibili oltre l’esercizio successivo

165.384

3) Sistema improprio dei rischi

7) Debiti verso fornitori - Esigibili entro l’esercizio successivo

206.854.334

92.993

4) Raccordo tra norme civili e fiscali Totale conti d’ordine

165.384

175

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Medical Systems Information Technologies S.r.l. Headquarters: Milan CONTO ECONOMICO

A) Valore della produzione 1) Ricavi delle vendite e delle prestazioni 2) Variazioni delle rimanenze di prodotti in corso di lavorazione, semilavorati e finiti 3) Variazioni dei lavori in corso su ordinazione 4) Incrementi di immobilizzazioni per lavori interni 5) Altri ricavi e proventi - vari - contributi in conto esercizio - contributi in conto capitale (quota esercizio) Totale valore della produzione (A)

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

-3.055 0

312.296

16) Interessi e altri proventi finanziari: d) proventi diversi da: - imprese collegate - imprese controllanti - altre 17) Interessi ed altri oneri finanziari da: - consociate - imprese controllanti - altri 17 bis) Utili e perdite su cambi

Totale costi della produzione (B) Differenza tra valore e costi della produzione (A - B) C) Proventi ed oneri finanziari 15) Proventi da partecipazioni - imprese controllate - imprese collegate - imprese controllanti - altre

176

0 0 0

309.241 Totale proventi e oneri finanziari (C)

B) Costi della produzione 6) Acquisti per materie prime, sussidiarie, consumo e merci 7) Costi per servizi 8) Costi per godimento di beni di terzi 9) Costi per il personale a) salari e stipendi b) oneri sociali c) trattamento di fine rapporto d) trattamento quiescenza e simili e) altri costi del personale 10) Ammortamenti e svalutazioni a) ammortamento delle immobilizzazioni immateriali b) ammortamento delle immobilizzazioni materiali c) altre svalutazioni delle immobilizzazioni d) svalutazioni dei crediti compresi nell’attivo circolante e delle disponib. liquide 11) Variazioni delle rimanenze di materie prime, sussidiarie e di consumo 12) Accantonamenti per rischi 13) Altri accantonamenti 14) Oneri diversi di gestione

1.041.679

930 119.365 6.044 0 0 0 0 0

0 0

1.041.679

D) Rettifiche di valore di attività finanziarie 18) Rivalutazioni 19) Svalutazioni

-15.021.069

Totale rettifiche valore att.fin. (D)

-15.021.069

E) Proventi ed oneri straordinari 20) Proventi: a) plusvalenze da alienazioni b) altri proventi straordinari 21) Oneri: a) minusvalenze da alienazioni b) imposte relative ad esercizi precedenti c) altri oneri straordinari Totale partire straordinarie (E)

0 36.805

0 86.070 -49.265

0 Risultato prima delle imposte (A-B+-D+-E) 79.343 1.485

22) Imposte sul reddito dell’esercizio: a) imposte correnti b) imposte differite

-13.926.581

290.045 36.519 326.564

207.167 26) Utile (perdita) dell’esercizio 102.074

0

-14.253.145

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Medical Systems Italia S.p.A. Headquarters: Milan STATO PATRIMONIALE Attivo

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008 C) Attivo circolante I - Rimanenze 1) Materie prime, sussidiarie, di consumo 2) Prodotti in corso lavor. e semilavorati 3) Lavori in corso su ordinazione 4) Prodotti finiti e merci 5) Acconti

A) Crediti verso soci per versamenti ancora dovuti B) Immobilizzazioni I - Immobilizzazioni immateriali 1) Costi di impianto e di ampliamento 2) Costi di ricerca, sviluppo, pubblicità 3) Diritti di brevetto industriale e diritti di utilizzazione delle opere dell’ingegno 4) Concessioni e licenze 5) Avviamento 6) Immobilizzazioni in corso e acconti 7) Altre immobilizzazioni Totale immobilizzazioni immateriali II - Immobilizzazioni materiali 1) Terreni e fabbricati 2) Impianti e macchinario 3) Attrezzature industriali e commerciali 4) Altri beni 5) Immobilizzazioni in corso e acconti Totale immobilizzazioni materiali III - Immobilizzazioni finanziarie 1) Partecipazioni in: a) imprese controllate b) imprese collegate d) altre imprese Totale partecipazioni 2) Crediti a) verso imprese controllate entro e oltre 12 mesi b) verso imprese collegate entro e oltre 12 mesi c) verso controllanti entro e oltre 12 mesi d) verso altri entro 12 mesi verso altri oltre 12 mesi e) verso consociate entro e oltre 12 mesi Totale crediti

Totale immobilizzazioni (B)

9.156.417

7.849 Totale rimanenze 53.169.934 48.096 53.225.879

285.021 409.968

694.989

0

0

II - Crediti 1) Verso clienti entro 12 mesi Verso clienti oltre 12 mesi 2) Verso imprese controllate entro e oltre 12 mesi 3) Verso imprese collegate entro e oltre 12 mesi 4) Verso controllanti entro 12 mesi Verso clienti oltre 12 mesi 4bis) Crediti tributari 4ter) Imposte anticipate 5) Crediti verso altri entro 12 mesi - Verso consociate - Altri Totale crediti III - Attività finanziarie che non costituiscono immobilizzazioni 1) Partecipazioni in imprese controllate 2) Partecipazioni in imprese collegate 3) Partecipazioni in imprese controllanti 4) Altre partecipazioni 5) Azioni proprie, con indicaz. valore compl. 6) Altri titoli 7) Crediti verso imprese controllanti Totale attività finanziarie

118.833

IV - Disponibilità liquide 1) Depositi bancari e postali 3) Danaro e valori in cassa

21.001.349

26.919.099

1.865.376 1.562.224 18.041.286 10.616.635 3.361.567 62.366.187

186.578.429 186.578.429

3.204 370

Totale disponibilità liquide

3.574

118.833

Totale attivo circolante (C)

269.949.539

118.833

D) Ratei e Risconti con separata indicazione del disaggio su prestiti - Ratei attivi - Risconti attivi - Disaggi

3) Altri titoli 4) Azioni proprie, con indicaz. valore sociale complessivo Totale immobilizzazioni finanziarie

7.337.186 4.507.746

54.039.701

Totale ratei e risconti attivi (D) Totale attivo

0 8.046.358

8.046.358 332.035.598

177

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Medical Systems Italia S.p.A. Headquarters: Milan STATO PATRIMONIALE Passivo

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008 11) Debiti verso controllanti

A) Patrimonio netto I - Capitale II - Riserva da sopraprezzo delle azioni

5.000.000 141.452.752

III - Riserve di rivalutazione IV - Riserva legale

1.000.000

V - Riserve statutarie VI - Riserva per azioni proprie in portafoglio VII - Altre riserve - Riserva per avanzo di fusione

3.466

VIII - Utili (Perdite) portati a nuovo

33.120.709

IX - Utile (Perdita) dell’esercizio

18.052.639

Totale patrimonio netto (A)

198.629.566

B) Fondi per rischi ed oneri 1)

Fondi trattam. quiescienza e obblighi sim.

2)

Fondi per imposte

3)

Altri accantonamenti

Totale fondi per rischi ed oneri (B) C) Trattamento di fine rapporto di lavoro subordinato

1.953.112

12.532.090 14.485.202 8.973.832

D) Debiti

178

1)

Obbligazioni

2)

Obbligazioni convertibili

3)

Debiti v/soci per finanziamenti

4)

Debiti verso banche

5)

Debiti verso altri finanziatori

6)

Acconti

7)

Debiti verso fornitori a) debiti verso consociate entro 12 mesi debiti verso consociate oltre 12 mesi b) altri entro 12 mesi altri oltre 12 mesi

8)

Debiti rappresentati da titolo di credito

9)

Debiti verso controllate

12) Debiti tributari - entro 12 mesi - oltre 12 mesi 13) Debiti verso istituti di previdenza e di sicurezza sociale - entro 12 mesi - oltre 12 mesi 14) Altri debiti - entro 12 mesi - oltre 12 mesi Totale debiti E) Ratei e risconti con separata indicazione dell’aggio su prestiti - Ratei passivi - Risconti passivi - Aggio su prestiti Totale ratei e risconti passivi (E) TOTALE PASSIVO E NETTO

3.405.205 21.290.884 28.431.792

4.014.098

8.091.753

92.547.183

2.030.629 15.369.186

17.399.815 332.035.598

Conti d’ordine 3) Rischi 6) Crediti ceduti pro-solvendo

97

27.313.354

5.622.148 77.728.308

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Medical Systems Italia S.p.A. Headquarters: Milan CONTO ECONOMICO

A) Valore della produzione 1) Ricavi delle vendite e delle prestazioni 2) Variazioni delle rimanenze di prodotti in corso di lavorazione, semilavorati e finiti 3) Variazioni dei lavori in corso su ordinaz. 4) Incrementi di immobiliz. per lavori interni 5) Altri ricavi e proventi Totale valore della produzione (A) B) Costi della produzione 6) Acquisti per materie prime, sussidiarie, consumo e merci 7) Costi per servizi 8) Costi per godimento di beni di terzi 9) Costi per il personale a) salari e stipendi b) oneri sociali c) trattamento di fine rapporto d) trattamento quiescenza e simili e) altri costi 10) Ammortamenti e svalutazioni a) ammortamento delle immobilizzazioni immateriali b) ammortamento delle immobilizzazioni materiali c) altre svalutazioni delle immobilizzazioni d) svalutazioni dei crediti compresi nell’attivo circolante e delle disponib. liquide 11) Variazioni delle rimanenze di materie prime, sussidiari, di consumo 12) Accantonamenti per rischi 13) Altri accantonamenti 14) Oneri diversi di gestione

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

324.112.202 1.650.394

5.082.194 330.844.790

140.004.696 58.863.402 32.172.307 27.607.485 9.003.577 1.995.527 2.398 428.667

13.842.596 210.083

243.488 -119.351 2.707.415 3.862.257 589.978

Totale costi della produzione (B)

291.414.525

Differenza tra valore e costi della produzione (A - B)

39.430.265

C) Proventi ed oneri finanziari 15) Proventi da partecipazioni 16) Altri proventi finanziari: a) proventi da crediti iscritti nelle immobilizzazioni b) proventi da titolo iscritti nelle immobilizzazioni c) proventi da titolo iscritti nell’attivo circolante d) proventi diversi dai precedenti - proventi finanziari diversi da controllate - proventi finanziari diversi da collegate - proventi finanziari diversi da controllanti - altri proventi finanziari

17) Interessi ed altri oneri finanziari: - interessi e altri oneri finanziari da controllate - interessi e altri oneri finanziari da collegate - interessi e altri oneri finanziari da controllanti - altri oneri finanziari 17 bis) Utili e perdite su cambi Totale prov. e oneri finanz

0 -19.004.476 -601.818 -12.320.900

D) Rettifiche di valore di attività finanziarie Totale rettifiche attività finanz. (D) E) Proventi ed oneri straordinari 20) Proventi con separata indicazione delle a) plusvalenze da alienazioni b) Altri proventi straordinari 21) Oneri, con separata indicazione delle a) minusvalenze da alienazioni b) imposte relative agli esercizi precedenti c)Altri oneri straordinari Totale partite straordinarie Risultato prima delle imposte (A-B+-C+-D+-E)

0

2.868.784

-874.321 1.994.463 29.103.828

22) Imposte sul reddito dell’esercizio: a) imposte correnti b) imposte anticipate c) imposte differite

13.856.127 -2.804.938

23) UTILE (PERDITA) D'ESERCIZIO

18.052.639

1.274.152

0 0 5.810.329 200.913

179

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Healthcare S.r.l. Headquarters: Milan STATO PATRIMONIALE Attivo

(Valori in Euro)

Passivo

31.12.2008 B) Immobilizzazioni I - Immobilizzazioni immateriali 3) Diritti di brevetto industriale e diritti di utilizzazione delle opere dell’ingegno 5) Avviamento 6) Immobilizzazioni in corso e acconti 7) Altre II - Immobilizzazioni materiali 2) Impianti e macchinario 3) Attrezzature industriali e commerciali 4) Altri beni III - Immobilizzazioni finanziarie 1) Partecipazioni in: d) altre imprese 2) Verso altri: - entro 12 mesi - oltre 12 mesi

Totale immobilizzazioni

31.12.2008 A) Patrimonio netto I - Capitale Sociale

2.000 0 348.151 350.151 853.681 959.853 441.191 2.254.725

IV - Riserva legale VII - Altre riserve VIII - Utili (Perdite) portati a nuovo IX - Utile (perdite) dell’esercizio Totale patrimonio netto

3)

Altri

C) Trattamento di fine rapporto di lavoro subordinato 260

II - Crediti entro 12 mesi: 1) Verso clienti 4) Verso la controllante 4 bis) Per Crediti tributari 4 ter) Per Imposte anticipate 5) Verso altri

IV - Disponibilità liquide 1) Depositi bancari 3) Danaro e valori in cassa

Totale attivo circolante D) Ratei e Risconti Totale attivo

180

5.164.568 293.144 0 (1.102) 3.302.525 8.759.135

B) Fondo per rischi e oneri 1.026.976 540.638

D) Debiti Debiti entro 12 mesi

25.000 5.450 30.710 2.635.585

4)

Debiti verso banche

5)

Debiti verso altri finanziatori

7) Debiti verso fornitori 12) Debiti tributari 13) Debiti verso istituti di previdenza e sicurezza sociale

C) Attivo circolante I - Rimanenze 1) Materie prime, sussidiarie e di consumo 4) Prodotti finiti e merci

(Valori in Euro)

14) Altri debiti

219 88.847 4.470.133 1.523.095 344.326 17.493.193 23.919.813

281.393 3.153.382 3.434775

Debiti oltre 12 mesi 15) Debiti verso altri finanziatori

298.807 298.807

21.205.227 48.100 1.046.690 5.722.450 28.022.467

0 0 31.457.242 453.984 34.546.811

Totale debiti E) Ratei e risconti

24.218.620 1.443

TOTALE PASSIVO

34.546.811

Conti d’ordine 3) Sistema improprio dei rischi

14.365.019

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Healthcare S.r.l. Headquarters: Milan CONTO ECONOMICO

A) Valore della produzione 1) Ricavi delle vendite e delle prestazioni 2) Variazioni delle rimanenze di prodotti in corso di lavorazione, semilavorati e finiti 4) Incrementi di immobilizzazioni per lavori interni 5) Altri ricavi e proventi - Vari - Contributi in conto esercizio

Totale valore della produzione B) Costi della produzione 6) Acquisti per materie prime, sussidiarie, consumo e merci 7) Costi per servizi 8) Costi per godimento di beni di terzi 9) Costi per il personale a) salari e stipendi b) oneri sociali c) trattamento di fine rapporto e) altri costi del personale 10) Ammortamenti e svalutazioni a) ammortamento delle immobilizzazioni immateriali b) ammortamento delle immobilizzazioni materiali d) svalutazioni dei crediti compresi nell’attivo circolante 11) Variazioni delle rimanenze di materie prime, sussidiarie e di consumo 13) Altri accantonamenti 14) Oneri diversi di gestione Totale costi della produzione Differenza tra valore e costi della produzione

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

2.477.078

C) Proventi ed oneri finanziari 16) Altri proventi finanziari: d) proventi diversi dai precedenti - altri 17) Interessi ed altri oneri finanziari: - altri 17 bis) Utili (perdite) su cambi

2.477.078

Totale proventi e oneri finanziari

57.171.662 (2.169.229) 0

57.479.511

24.955.303 14.057.299 1.026.472 4.378.672 1.187.818 277.634 1.540 5.845.664

142.824 2.953.692 50.619 (2.760.250)

E) Proventi ed oneri straordinari 20) Proventi: - varie 21) Oneri: - minusvalenze da alien. Beni - varie Totale partire straordinarie

0

Risultato prima delle imposte 22) Imposte sul reddito dell’esercizio: a) imposte correnti b) imposte anticipate

6.010.001

23) Utile (perdita) dell’esercizio

3.302.525

3.004.112 (296.636) 2.707.476

253.316 722.928 669.777 1.646.021 0 345.028 833.474 48.709.260

8.770.251

181

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Healthcare Clinical Systems S.r.l. Headquarters: Milan STATO PATRIMONIALE Attivo

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

A) Crediti verso soci per versamenti ancora dovuti B) Immobilizzazioni I - Immobilizzazioni immateriali 1) Costi di impianto e di ampliamento 2) Costi di ricerca, di sviluppo e di pubblic. 3) Diritti di brevetto industriale e diritti di utilizzazione delle opere dell’ingegno 4) Concessioni, licenze, marchi e diritti sim. 5) Avviamento 6) Immobilizzazioni in corso e acconti 7) Altre Totale immobilizzazioni immateriali II - Immobilizzazioni materiali 1) Terreni e fabbricati 2) Impianti e macchinario 3) Attrezzature industriali e commerciali 4) Altri beni 5) Immobilizzazioni in corso e acconti Totale immobilizzazioni materiali III - Immobilizzazioni finanziarie 1) Partecipazioni in: 2) Crediti: a) verso imprese controllate entro 12 mesi verso imprese controllate oltre 12 mesi b) verso imprese collegate entro 12 mesi verso imprese collegate oltre 12 mesi c) verso controllanti entro 12 mesi verso controllanti oltre 12 mesi d) verso altri entro 12 mesi verso altri oltre 12 mesi 3) Altri titoli 4) Azioni proprie Totale immobilizzazioni finanziarie Totale immobilizzazioni (B) C) Attivo circolante I - Rimanenze 1) Materie prime, sussidiarie e di consumo 2) Prodotti in corso di lavoraz. e semilav. 3) Lavori in corso su ordinazione 4) Prodotti finiti e merci 5) Acconti Totale rimanenze

182

0 2.891.754 47.119 2.938.873

3.848 101.389 211.204 316.441

II - Crediti 1) Verso clienti entro 12 mesi Verso clienti oltre 12 mesi 2) Verso imprese controllate entro 12 mesi Verso imprese controllate oltre 12 mesi 3) Verso imprese collegate entro 12 mesi Verso imprese collegate oltre 12 mesi 3 bis) Verso imprese consociate entro 12 mesi Verso imprese consociate oltre 12 mesi 4) Verso controllanti entro 12 mesi Verso controllanti oltre 12 mesi 4 bis) Per Crediti tributari entro 12 mesi Per Crediti tributari oltre 12 mesi 4 ter) Per Imposte anticipate entro 12 mesi Per Imposte anticipate oltre 12 mesi 5) Verso altri entro 12 mesi Verso altri oltre 12 mesi Totale crediti

1.028.166 656.504 335.780 37.335 20.066.612

III - Attività finanziarie che non costituiscono immobilizzazioni 1) Partecipazioni in imprese controllate 2) Partecipazioni in imprese collegate 3) Partecipazioni in imprese controllanti 4) Altre partecipazioni 5) Azioni propri 6) Altri titoli 7) Verso imprese consociate

10.305.950

IV - Disponibilità liquide 1) Depositi bancari e postali 2) Assegni 3) Danaro e valori in cassa Totale disponibilità liquide

16.125.759 0 0 1.829.742 0 53.326

4.841 1.096 5.937

0

Totale attivo circolante (C)

40.033.290

3.255.314

D) Ratei e Risconti - Disaggio su prestiti - Altri Totale ratei e risconti

1.882.817 1.882.817

Totale attivo (A+B+C+D) 0 6.867.719 2.787.072 9.654.791

45.171.421

Conti d’ordine 1) Sistema improprio dei beni altrui presso noi 2) Sistema improprio degli impegni 3) Sistema improprio dei rischi 4) Raccordo tra norme civili e fiscali Totale conti d’ordine

3.879.581

3.879.581

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Healthcare Clinical Systems S.r.l. Headquarters: Milan STATO PATRIMONIALE Passivo

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

A) Patrimonio netto I - Capitale Sociale

5.200.000

II - Riserva da soprapprezzo delle azioni III - Riserve di rivalutazione IV - Riserva legale

742.681

V - Riserve statutarie VI - Riserva per azioni proprie in portafoglio VII - Altre riserve - Riserva arrotondamento Euro - Riserva per avanzo di fusione

1 132.459

VIII - Utili (Perdite) portati a nuovo

9.908.331

IX - Utile (perdita) dell’esercizio

-1.192.210

Totale patrimonio netto (A)

14.791.262

B) Fondi per rischi ed oneri 1)

Per trattam. di quiescenza

2)

Per imposte

3)

Altri

Totale fondi per rischi ed oneri (B) C) Trattamento di fine rapporto di lavoro subordinato

74.819 0

Obbligazioni

2)

Obbligazioni convertibili

3)

Debiti verso soci per finanziamenti

4)

Debiti verso banche esigibili entro l’esercizio successivo Debiti verso banche esigibili oltre l’esercizio successivo

5)

Debiti verso altri finanziatori

6)

Acconti

7)

Debiti verso fornitori esigibili entro l’esercizio successivo Debiti verso fornitori esigibili oltre l’esercizio successivo

8)

Debiti rappresentati da titoli di credito

9)

Debiti verso imprese controllate

10)

Debiti verso imprese collegate

11) Debiti verso controllanti esigibili entro l’esercizio successivo Debiti verso controllanti esigibili oltre l’esercizio successivo 12) Debiti tributari esigibili entro l’esercizio successivo Debiti tributari esigibili oltre l’esercizio successivo 13) Debiti verso istituti di previdenza e sicurezza sociale esigibili entro l’esercizio successivo Debiti verso istituti di previdenza e sicurezza sociale esigibili oltre l’esercizio successivo 14) Altri debiti esigibili entro l’esercizio successivo Altri debiti esigibili oltre l’esercizio successivo Totale debiti (D) E) Ratei e risconti - Aggio su prestiti - Altri Totale ratei e risconti

13.348.097

790.000 3.082.311

1.049.582

2.434.709 25.363.354

1.905.944 1.905.944

756.193 TOTALE PASSIVO (B+C+D+E)

30.380.159

TOTALE PASSIVO (A+B+C+D+E)

45.171.421

831.012 2.279.849 Conti d’ordine 1) Sistema improprio dei beni altrui presso noi 2) Sistema improprio degli impegni 3) Sistema improprio dei rischi 4) Raccordo tra norme civili e fiscali

D) Debiti 1)

10 bis) Debiti verso imprese consociate esigibili entro l’esercizio successivo Debiti verso imprese consociate esigibili oltre l’esercizio successivo

381

Totale conti d’ordine

3.879.581

3.879.581

4.658.274

183

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Healthcare Clinical Systems S.r.l. Headquarters: Milan CONTO ECONOMICO

A) Valore della produzione 1) Ricavi delle vendite e delle prestazioni 2) Variazioni delle rimanenze di prodotti in corso di lavorazione, semilavorati e finiti 3) Variazioni dei lavori in corso su ordinazione 4) Incrementi di immobilizzazioni per lavori interni 5) Altri ricavi e proventi - Vari - Contributi in conto esercizio - Contributi in conto capitale (quota esercizio) Totale valore della produzione (A) B) Costi della produzione 6) Acquisti per materie prime, sussidiarie, consumo e merci 7) Costi per servizi 8) Costi per godimento di beni di terzi 9) Costi per il personale a) salari e stipendi b) oneri sociali c) trattamento di fine rapporto d) trattamento quiescenza e simili e) altri costi del personale

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

47.090.576 2.712.289 0 1.148.978

50.951.843

11) Variazioni delle rimanenze di materie prime, sussidiarie e di consumo 12) Accantonamenti per rischi 13) Altri accantonamenti 14) Oneri diversi di gestione

17) Interessi ed altri oneri finanziari: - da imprese controllate - da imprese collegate - da controllanti - altri 17 bis) Utili (perdite) su cambi

25.781.651 8.666.112 3.288.741 7.356.659 2.379.980 558.078

Totale proventi e oneri finanziari (C)

523.821 88.730

84.704 697.255

322.851 423.316 49.479.643

Differenza tra valore e costi della produzione (A - B)

1.477.200

E) Proventi ed oneri straordinari 20) Proventi: - plusvalenze da alienazioni - altri proventi straordinari

2.935.595 936 2.936.531 10.801 -2.301.848

0 0

21) Oneri: a) minusvalenze da alienazioni b) imposte relative ad esercizi precedenti c) altri oneri straordinari

Risultato prima delle imposte (A-B+-D+-E) 22) Imposte sul reddito dell’esercizio a) imposte correnti b) imposte differite (anticipate)

26) Utile (perdita) dell’esercizio

184

5.864 623.882

D) Rettifiche di valore di attività finanziarie 18) Rivalutazioni: 19) Svalutazioni:

Totale partire straordinarie (E)

Totale costi della produzione (B)

C) Proventi ed oneri finanziari 15) Proventi da partecipazioni - da imprese controllate - da imprese collegate - altri

618.018

Totale rettifiche valore att. fin. (D) 10.294.717

10) Ammortamenti e svalutazioni a) ammortamento delle immobilizzazioni immateriali b) ammortamento delle immobilizzazioni materiali c) altre svalutazioni delle immobilizzazioni d) svalutazioni dei crediti compresi nell’attivo circolante e delle disponib. liquide

16) Altri proventi finanziari: d) proventi diversi dai precedenti - da imprese controllate - da imprese collegate - da controllanti - altre

0 -824.648

1.192.200 -824.638 367.562 -1.192.210

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Sensing & Inspection Technologies S.r.l. Headquarters: Milan STATO PATRIMONIALE Attivo

(Valori in Euro)

Passivo

31.12.2008 A) Crediti verso soci per versamenti ancora dovuti

0

31.12.2008 A) Patrimonio netto I - Capitale Sociale

B) Immobilizzazioni I - Immobilizzazioni immateriali - (Ammortamenti)

II - Immobilizzazioni materiali - (Ammortamenti)

III - Immobilizzazioni finanziarie Totale immobilizzazioni

IV - Riserva legale 518.887 262.751 256.136 1.221.023 1.122.985 98.038 37.747 391.921

C) Attivo circolante I - Rimanenze II - Crediti 1) entro 12 mesi oltre 12 mesi III - Attività finanziarie che non costituiscono immobilizzazioni IV - Disponibilità liquide

1.251.882 3.852.438

Totale attivo circolante

6.668.754

D) Ratei e Risconti Totale attivo

561.595 1.002.839

165.563 7.226.238

(Valori in Euro)

VII - Altre riserve

10.000 2.000 146.785

VIII - Utili (Perdite) portati a nuovo

3.910.695

IX - Utile (perdita) dell’esercizio

(181.707)

Totale patrimonio netto

3.887.773

B) Fondi per rischi ed oneri

586.272

C) Trattamento di fine rapporto di lavoro subordinato

659.395

D) Debiti - entro 12 mesi - oltre 12 mesi

E) Ratei e risconti

2.086.571 2.086.571 6.227

TOTALE PASSIVO

7.226.238

Conti d’ordine 3) Sistema improprio dei rischi 4) Raccordo tra norme civili e fiscali

1.664.908

Totale conti d’ordine

1.664.908

185

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Sensing & Inspection Technologies S.r.l. Headquarters: Milan CONTO ECONOMICO

A) Valore della produzione 1) Ricavi delle vendite e delle prestazioni 2) Variazioni delle rimanenze di prodotti in corso di lavorazione, semilavorati e finiti 5) Altri ricavi e proventi - Vari Totale valore della produzione

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

8.556.734 (128.248) 2.723.134

C) Proventi ed oneri finanziari 16) Altri proventi finanziari: d) proventi diversi dai precedenti - da società del gruppo

191.107

17) Interessi ed altri oneri finanziari: - da società del gruppo

854.393

11.151.620 17 bis) Utili (perdite) su cambi

B) Costi della produzione 6) Acquisti per materie prime, sussidiarie, consumo e merci 7) Costi per servizi 8) Costi per godimento di beni di terzi 9) Costi per il personale a) salari e stipendi b) oneri sociali c) trattamento di fine rapporto d) trattamento quiescenza e simili e) altri costi del personale 10) Ammortamenti e svalutazioni a) ammortamento delle immobilizzazioni immateriali b) ammortamento delle immobilizzazioni materiali c) altre svalutazioni delle immobilizzazioni d) svalutazioni dei crediti compresi nell’attivo circolante e delle disponib. liquide 11) Variazioni delle rimanenze di materie prime, sussidiarie e di consumo 12) Accantonamenti per rischi 13) Altri accantonamenti 14) Oneri diversi di gestione Totale costi della produzione Differenza tra valore e costi della produzione (A - B)

186

5.561.029 1.117.003 307.927 2.017.203 658.819 159.915 65.465 2.901.402

61.207 37.792

Totale proventi e oneri finanziari

21) Oneri: a) minusvalenze da alienazioni b) imposte relative ad esercizi precedenti c) varie Totale partire straordinarie Risultato prima delle imposte (A-B+-D+-E)

3.000 101.999

505.154

26) Utile (perdita) dell’esercizio

10.518.560

633.060

(657.465)

E) Proventi ed oneri straordinari 20) Proventi: - plusvalenze da alienazioni - varie

22) Imposte sul reddito dell’esercizio a) imposte correnti b) imposte differite (anticipate)

24.046

5.821

6.221 (6.221) (30.626)

450.629 (299.548) 151.081 (181.707)

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

GE Industrial Financing Ireland Limited Headquarters: Dublin BALANCE SHEET ($)

($)

31.12.2008

31.12.2008

Financial Assets Investments Current assets Debtors Creditors: amounts folling due within one year Net current (liabilities) Total assets less current liabilities

Capital and reserves Called up share capital Other reserves Profit and loss account Shareholders’ funds

33

-

100 59,658,603 (59,735,104) (76,401)

(76,434) (76,434) (76,401)

PROFIT AND LOSS ACCOUNT ($) 31.12.2008 Administrative expenses

(59,735,139)

Operating loss

(59,735,139)

Income from fixed assets & dividends Interest receivable (Loss) / profit on ordinary activities before taxation Tax on loss on ordinary activities Loss for the financial year

35 (59,735,104) (59,735,104)

187

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Fondazione Pignone Headquarters: Florence STATO PATRIMONIALE Attivo

(Valori in Euro)

Passivo

31.12.2008 A) Crediti verso associati per versamento quote B) Immobilizzazioni I - Immobilizzazioni immateriali

-

II - Immobilizzazioni materiali

-

(Valori in Euro) 31.12.2008

A) Patrimonio netto I - Patrimonio libero 1) Risultato gestionale esercizio in corso 2) Risultato gestionale da esercizi precedenti 3) Riserve statutarie 4) Contributo in conto capitale liberamente utilizzabili

162.302,81 62.302,81 (102.106,44) 164.409,25

III - Immobilizzazioni finanziarie II - Fondo di dotazione dell’ente C) Attivo circolante

100.000,00

560.666,35 III - Patrimonio vincolato

I - Rimanenze II - Crediti 1) Crediti pverso socio fondatore 2) Crediti verso clienti 1) Crediti verso altri

453.901,00 450.000,00 3.901,00

III - Attività finanziarie che non costituiscono immobilizzazioni IV - Disponibilità liquide 1) Depositi bancari e postali 2) Assegni 3) Danaro e valori in cassa D) Ratei e Risconti 1) Ratei attivi 2) Risconti attivi Totale attivo

106.765,36 106.175,64 589,71 7.313,74 7.313,74 567.980,09

Conti d’ordine - Impegni di erogazione - Altri Totale generale

B) Fondi per rischi ed oneri 1) Per trattam. di quiescenza e obblighi simili 2) Altri C) Trattamento di fine rapporto di lavoro subordinato D) Debiti 1) Debiti per contributi ancora da erogare 2) Debiti verso banche 3) Debiti verso fornitori 4) Debiti tributari 5) Debiti verso istituti di previdenza e sicurezza sociale 6) Altri debiti

567.980,09

Conti d’ordine - Impegni di erogazione - Altri Totale generale

188

405.677,28 -

E) Ratei e risconti 1) Ratei passivi 2) Risconti passivi TOTALE PASSIVO

567.980,09

405.677,28

567.980,09

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Fondazione Pignone Headquarters: Florence CONTO ECONOMICO

ONERI 1) Oneri da attività tipiche 1.1) Materiali di consumo per i corsi 1.2) Costi per la organizzazione dei corsi 1.3) Assegni e rimborsi spese agli studenti 1.4) Salari e stipendi 1.5) Accantonamento TFR 1.6) Oneri sociali 1.7) Altri oneri per attività istituzionale 2) 2.1) 2.2) 2.3)

Oneri promozionali e di raccolta fondi Oneri per attività informazione Oneri per convegni e congressi Oneri promozionali

3)

Oneri da attività accessorie

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

682.679,36 3.565,68 163.467,27 109.228,26

406.418,15 99.263,52 13.875,69 85.387,83 -

4) Oneri finanziari e patrimoniali 4.1) Spese bancarie 4.2) Altri oneri finanziari

631,92 332,40 299,52

5)

319,30

Oneri straordinari

6) 6.1) 6.2) 6.3) 6.4) 6.5) 6.6)

Oneri di supporto generale Salari e stipendi Oneri sociali Accantonamento TFR Altri costi del personale Ammortamento beni materiali e immateriali Godimento di beni di terzi - Locazioni e noleggi automezzi - Locazioni e noleggi diversi 6.7) Costi per servizi - Compensi e rimborsi organi statutari - Oneri per consulenze e prestazioni di terzi - Altri costi per servizi 6.8) Oneri diversi di gestione - Personale distaccato - Rimborsi spese - Cancelleria - Alri beni e materiali di consumo - Altri oneri 6.9) Imposte e tasse - Imposte dell'esercizio - altre imposte

182.678,13

TOTALE ONERI

965.572,23

Risultato gestionale positivo/ (negativo)

(102.106,44)

PROVENTI 1) Proventi da attività tipiche 1.1) Da contributi su progetti 1.2) Da contratti con enti pubblici 1.3) Da soci e associati 1.4) Da non soci 1.5) Altri proventi

858.673,98

858.673,98

2)

Proventi da raccolta fondi

-

3)

Proventi da attività accessorie

-

4) Proventi finanziari e patrimoniali 4.1) Da depositi bancari 4.2) Altri proventi finanziari 5) Proventi straordinari TOTALE PROVENTI

4.791,81 4.791,81

863.465,79

9.872,05 2.860,62 7.011,43 23.320,23 7.124,00 16.196,23 140.141,85 137.799,27

2.342,58 9.344,00 9.344,00

189

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Everest Vit Italia S.r.l. Headquarters: Agrate Brianza (MI) STATO PATRIMONIALE Attivo

(Valori in Euro)

Passivo

31.12.2008

31.12.2008 A) Patrimonio netto

A) Crediti verso soci

I - Capitale Sociale B) Immobilizzazioni I - Immobilizzazioni immateriali - immobilizzazioni immateriali lorde - ammortamenti - svalutazioni Totale immobilizzazioni immateriali nette

(Valori in Euro)

20.954 (20.954) 0 0

IV - Riserva legale VIII - Utili (Perdite) portati a nuovo IX - Utile (perdite) dell’esercizio Totale patrimonio netto (A)

15.000 3.000 388.149 570.193 976.342

B) Fondi per rischi ed oneri II - Immobilizzazioni materiali - immobilizzazioni materiali lorde - ammortamenti - svalutazioni Totale immobilizzazioni immateriali nette III - Immobilizzazioni finanziarie Totale immobilizzazioni (B) C) Attivo circolante I - Rimanenze

56.995 (47.733) 0 9.262 0 9.262

C) Trattamento di fine rapporto di lavoro subordinato D) Debiti Debiti entro 12 mesi 6)

Debiti verso fornitori

10) Debiti verso società del gruppo 11) Debiti tributari

IV - Disponibilità liquide Totale attivo circolante (C)

12.511

13) Altri debiti

17.807

170.619

1.460.793 43.576 1.504.369 706.129 2.381.118

D) Ratei e Risconti attivi

2.621

Totale attivo (A+B+C+D)

2.393.001

190

79.221 1.048.370 158.953

12) Debiti verso istituti di previdenza e assistenza

Totale debiti (D) II - Crediti 1) Verso clienti 2) Verso altri

98.629

E) Ratei e risconti passivi TOTALE PASSIVO

1.316.862

1.168 2.393.001

Financial Statements of Subsidiary Companies as at and for the year ended December 31, 2008

Everest Vit Italia S.r.l. Headquarters: Agrate Brianza (MI) CONTO ECONOMICO

A) Valore della produzione 1) Ricavi delle vendite e delle prestazioni 2) Variazioni delle rimanenze di prodotti in corso di lavorazione, semilavorati e finiti 5) Altri ricavi e proventi Totale valore della produzione (A) B) Costi della produzione 6) Acquisti per materie prime, sussidiarie, consumo e merci 7) Costi per servizi 8) Costi per godimento di beni di terzi 9) Costi per il personale a) salari e stipendi b) oneri sociali c) trattamento di fine rapporto e) altri costi del personale 10) Ammortamenti e svalutazioni a) ammortamento delle immobilizzazioni immateriali b) ammortamento delle immobilizzazioni materiali c) altre svalutazioni delle immobilizzazioni d) svalutazioni dei crediti compresi nell’attivo circolante e delle disponib. liquide 11) Variazioni delle rimanenze di materie prime, sussidiarie e di consumo 12) Accantonamenti per rischi 13) Altri accantonamenti 14) Oneri diversi di gestione Totale costi della produzione (B) Differenza tra valore e costi della produzione (A - B)

(Valori in Euro)

(Valori in Euro)

31.12.2008

31.12.2008

3.614.630 94.020 30.038 3.738.688

2.275.287 238.147 51.537 196.721 80.520 18.586 10.911 306.738

234

C) Proventi ed oneri finanziari 16) Altri proventi finanziari: a) da crediti iscritti nelle immobilizzazioni b) da titolo iscritti nelle immobilizzazioni c) da titoli iscritti nell’attivo circolante che non costituiscono part.ni b) proventi diversi 17) Interessi ed altri oneri finanziari 17 bis) Utili (perdite) su cambi Totale proventi e oneri finanziari (C)

0 0 0 4.552 4.552 (1.205) (1.205) 5.757

E) Proventi ed oneri straordinari 20) Proventi 21) Oneri

0 0

Totale partire straordinarie (E)

0

Risultato prima delle imposte (A-B+-D+-E)

841.127

22) Imposte sul reddito dell’esercizio

270.934

26) Utile (perdita) dell’esercizio

570.193

4.993

7.000 12.227 0 0 0 19.382 2.903.318

835.369

191

GE Oil & Gas

Statutory Auditor’s Report for the Consolidated Financial Statements as at and for the year endede December 31, 2008 (in conformance with Article 2429 of the Italian Civil Code)

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GE imagination at work

Statutory Auditor’s Report for the Consolidated Financial Statements as at and for the year ended December 31, 2008

Dear Shareholders, The consolidated financial statements at 31 December 2008, submitted here by the Board of Directors for your approval, show a profit of 194,612 thousand Euro, of which 849 thousand Euro pertaining to minority interests and 193,763 thousand Euro pertaining to the group, and are summarised as follows (all figures are expressed in thousands of Euro): BALANCE SHEET Assets

Euro 5,507,006

Liabilities Shareholders' equity - Group - Minority interests

269,714 37,221 306,935

Provisions for risks and charges Employees' severance entitlement Payables and other liabilities Accrued expenses and deferred income

332,992 70,650 4,761,989 34,440 5,507,006

INCOME STATEMENT Difference between production revenues and cost Financial income and expenses

Euro 484.997 -113.443

Adjustments to financial asset values

-14.674

Extraordinary income and expenses

12.199

Income taxes for the year Net profit for the year Minority interests Group net profit for the year

-174.467 194.612 -849 193.763

The memorandum accounts, shown at the foot of the balance sheet, amount to 6,392,683 Euro. The Board of Statutory Auditors is called upon to convey its considerations also with regard to the said consolidated financial statements comprising, as legally required, the Balance Sheet, Income Statement and Notes. The Report on Operations presented by the Board of Directors provides, in summary form, a complete and exhaustive description of the Group’s business and financial transactions and position. It is the Board’s opinion that the Report on Operations is able to suitably ensure the requirement of consistency set forth by the relevant regulations in force. Having performed the necessary checks, the Board declares its approval of the accounting policies adopted and certifies that the information and data used for consolidation purposes refer to the financial statements at 31 December 2008 drawn up for approval by the respective Shareholders’ Meetings.

194

Statutory Auditor’s Report for the Consolidated Financial Statements as at and for the year ended December 31, 2008

The consolidation method, as described in the notes, has been correctly applied. The scope of consolidation includes the financial statements of the parent company and the Italian and foreign companies over which the parent company directly or indirectly exercises control pursuant to Article 23 of Legislative Decree 127, with the exception of some subsidiaries considered non-relevant, which have been measured using the equity method. It should be remembered that, starting from the year 2004, the Company has exercised its option for consolidated taxation in its capacity as consolidator, pursuant to Articles 117 et seq. of the Italian Consolidated Income Tax Act (T.U.I.R.). The following companies have elected to participate in the national tax consolidation scheme: Nuovo Pignone Holding S.p.A. (consolidator), GE Transportation Systems S.p.A., GE Medical Systems Italia S.p.A., Bently Nevada Italia S.r.l., GE Capital Funding Services S.r.l., Jenbacher S.r.l., GE Sensing & Inspection Technologies S.r.l., GE Healthcare S.r.l., GE Medical Systems Information Technologies S.r.l., GE Healthcare Clinical Systems S.r.l.. In view of the foregoing, we certify that the values shown under the various entries of the consolidated financial statements correspond to the accounting records of the parent company Nuovo Pignone Holding S.p.A. and the information provided by the investee companies. We thank you for the confidence placed in us.

THE BOARD OF STATUTORY AUDITORS DR. COSIMO IMBRIOSCIA DR. ANGELO CIAVARELLA DR. ANTONIO ANGELO MANZONI

195

Independent Auditor’s Report

196

COMK/MARK 11-2009 Designed by: Studio Tre Fasi Printed by: Sagraf ©2009 Nuovo Pignone S.p.A. All Rights Reserved

Nuovo Pignone S.p.A. via F. Matteucci, 2 50127 Florence - Italy www.ge.com/oilandgas

GE Oil & Gas

Annual Report and Financial Statements of Nuovo Pignone Holding S.p.A. - Consolidated Annual Report and Financial Statemenmts of Nuovo Pignone Group - at December 31, 2008

Annual Report and Financial Statements of Nuovo Pignone Holding S.p.A. Consolidated Annual Report and Financial Statements of Nuovo Pignone Group at December 31, 2008

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GE imagination at work

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