Remedial Responsibilities

GE was formed in 1890 and now has facilities across the globe. GE began operating many of those facilities at a time when scientific understanding of chemical use and regulatory requirements was far different from now. Changing laws, regulations and standards require that these “legacy” issues involving environmental contamination be addressed. Currently, GE has some involvement in 89 active sites on the U.S. Environmental Protection Agency’s (EPA) Superfund National Priorities List (this figure includes active sites for which expenditures are being, or are likely to be, incurred). However, at the vast majority of these sites, such as old commercial and municipal landfills, GE’s responsibility is limited, and many other parties are involved.

It is our approach to work cooperatively with government agencies to address remedial issues at sites where GE has responsibility. GE actively engages in discussions and negotiations, where possible, to resolve historic liabilities in a proactive and collaborative fashion. GE has reached agreements with federal and/or state regulators at almost every site about the right way to proceed and has a record of successfully meeting its commitments.

GE’s most significant sites are related to our historical use of polychlorinated biphenyls (PCBs) in the manufacturing of electrical equipment. The three largest of these sites are the Hudson River in New York, the Housatonic River in Massachusetts and Connecticut, and a former transformer facility in Rome, Georgia. These three sites represent approximately 85% of GE PCB-related expenditures during the 1990 to 2009 period. GE PCB expenditures during this period were more than $1.7 billion.

PCB Expenditures Report

In response to a shareholder request for information relating to GE’s expenditures on PCB sites from 1990 to 2005, we are providing the following unaudited financial information for the years 1990 through 2005.

Hudson River Program

Beginning in the late 1940s, GE operated electrical equipment manufacturing facilities along the upper Hudson River. PCBs were discharged into the river and made their way into the sediments on the river bottom. In 1976, PCB use was banned and GE ceased using PCBs at these facilities. In 2002, reversing its 1984 decision not to dredge the river, the U.S. Environmental Protection Agency selected dredging of PCB-containing sediments from the upper Hudson River in New York as the remedy under the federal Superfund program.

Importantly, this decision recognized the concerns over the potential negative consequences of dredging, particularly that during dredging, river currents might spread PCBs downstream. As a result, dredging was split into two phases, with an intervening review by independent scientists and engineers. Phase 1 was a one-season test to determine if modern dredging technology could meet the unprecedented performance standards set by the U.S. Environmental Protection Agency. Phase 2 is the remainder of the project.

When the EPA issued its remedy decision, GE committed to cooperating with the EPA in implementing it. Since that time, GE has completed Phase 1 of dredging, and after advocating changes to the standards and design has now committed to undertake Phase 2 of the dredging project. Dredging will resume in May 2011, and is currently estimated to take 5–7 years to complete. All of the work is paid for by GE and is done under the constant oversight of the EPA.

Housatonic River, Massachusetts and Connecticut

GE, the EPA, the State of Connecticut and the Commonwealth of Massachusetts are working cooperatively under a comprehensive settlement agreement reached in 2000. Under the agreement, GE completed dredging of PCB-containing sediments from the half-mile of the Housatonic River adjacent to our former transformer manufacturing plant in Pittsfield, Massachusetts. In 2008, the EPA completed removing sediments in the next 1.5 miles of river, a project funded through a GE-EPA cost-sharing arrangement. GE is also continuing the cleanup of the former plant area and will transfer 52 acres of land to PEDA (Pittsfield Economic Development Authority) for development in one of the largest brownfields projects to date. Currently GE is working with government agencies and NGOs to determine what additional work is necessary for the rest of the river. GE is developing a remedy that will remove PCBs from the Housatonic, while also ensuring the protection of the sensitive wildlife habitats that exist in and adjacent to the river.

Rome, Georgia

GE is working cooperatively with the Georgia Environmental Protection Division (EPD) to remediate PCBs at GE’s former Rome transformer manufacturing plant. The former Rome facility is regulated under a state permit, which addresses investigation and cleanup of PCBs both on the plant site and outside the plant. GE recently completed soil cleanup along a portion of a creek where small amounts of PCBs, flowed from storm water runoff from the plant. Since 1990, GE has spent more than $85 million on the Rome project. GE and Georgia EPD will continue to work cooperatively to complete the remediation of the Rome site.