Good day, ladies and gentlemen and welcome to the General Electric Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. My name is Brandon, and I'll be your conference coordinator today. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Steve Winoker, Vice President of Investor Communications. Please proceed.

Thanks, Brandon. Good morning and welcome to GE's third quarter 2019 earnings call. I'm joined by our Chairman and CEO, Larry Culp; and CFO, Jamie Miller. Before we start, I'd like to remind you that the press release presentation and 10-Q are available on our website. Note that some of the statements we're making are forward-looking and are based on our best view of the world and our businesses as we see them today. As described in our SEC filings and on our website, those elements can change as the world changes. Please note that we'll be hosting a Healthcare Investor Day on Monday December 2 in conjunction with the RSNA conference in Chicago. Additionally, we provided the upcoming earnings dates in the appendix. With that, I'll hand the call over to Larry.

Steve, thanks. Good morning, everyone, and thank you for joining us. I'll start off with some thoughts on our performance and our strategic priorities, then Jamie will cover the quarter in detail before I wrap with our updated outlook. Overall, our third quarter results reflect one more quarter's worth of progress in our multi-year transformation of GE. Orders were down 1% organically year-over-year due to tough comps at Power and lower LEAP orders at Aviation in part due to the 737 MAX grounding. We ended with backlog of $386 billion, up 14% year-over-year. This comprises equipment of $80 billion, up 4%; and services of $306 billion, up 17%. We delivered strong Industrial segment organic revenue growth of 7%, with growth across all businesses, except Power, where Gas Power was up but Power portfolio was down. We also delivered adjusted Industrial operating margin expansion of 130 basis points, driven by Healthcare and better controls at Power relative to last year. While margins are down 130 basis points organically year-to-date, we continue to expect to hit our full year margin expansion target. Industrial free cash flow turned positive, generating $650 million in the quarter, though down $500 million from a year ago. This is ahead of our expectations, largely driven by continued Power stabilization and better-than-expected progress on the supply chain finance transition. We're raising our Industrial free cash flow outlook again today, which I'll cover in more detail later. There were a few significant developments in the quarter, including a number of deleveraging actions that I'll talk to shortly. We ceded majority control of Baker Hughes, which resulted in a pre-tax loss of $8.7 billion. We completed our annual insurance premium deficiency test, resulting in a pre-tax charge of $1 billion, mostly driven by the low interest rate environment. And finally,…

Thank you, Larry. Starting with the third quarter summary, orders were $22.5 billion, down 5% reported and down 1% organically, with strength in Renewable Energy offset by declines in Power and Aviation. Equipment orders were down 4% organically, while services were up 3%. Consolidated revenue was $23.4 billion flat to prior year, with Industrial segment revenues up 3% reported and 7% organically. The biggest drivers of growth were once again the Renewable Energy onshore wind ramp along with Aviation equipment. Year-to-date, Industrial segment revenues are up 6% organically. Adjusted Industrial profit margins were 10% in the quarter, up 150 basis points reported and 130 basis points organically. The majority of margin accretion was driven by the non-repeat of about $800 million of charges we took in Gas Power last year. We saw organic expansion in Healthcare, but declines in Renewable Energy and Aviation due to negative mix. Net earnings per share was $1.08 loss. As Larry mentioned, we sold 144 million shares of Baker Hughes. And as a result, we no longer hold a majority stake in the company. Beginning this quarter, its historical results are now reported in discontinued operations for all periods. Upon deconsolidations, we recognize an after-tax loss of $8.2 billion or $0.94. We also elected to measure our remaining Baker Hughes investment at fair value, which is recognized in earnings. Continuing EPS was negative $0.15 and adjusted EPS was positive $0.15. Walking from continuing EPS, we had $0.02 of losses, primarily from the unrealized mark-to-market of our remaining Baker Hughes investment and our Wabtec stake exit. On restructuring and other items, we incurred $0.03 of charges related to restructuring and M&A costs across our segments principally at corporate. And next, we incurred a $0.02 charge for the $5 billion debt tender, which reduces pre-tax interest expense…

Jamie thanks. Moving on to Slide 11, I'll first refer back that the broader dynamics discussed in our original 2019 outlook. Top of mind is Power execution and returning the business to profitability while working through legacy items. At Renewable Energy we're focused on delivering through the PTC cycle while managing a number of legacy projects and nonoperational items. At Aviation and Healthcare, we see continued strength in both franchises, yet we're intensely focused on running them even better. Recall our raised outlook at the half for revenue EPS and free cash flow was largely due to better Power performance and lower restructuring and interest expense. As mentioned earlier, we've deconsolidated Baker Hughes. This lowers our EPS forecast by $0.05 and our restructuring expense forecast by about $200 million with no material change to our outlook for organic growth margin expansion or Industrial free cash flow. To help you digest the changes from our original guidance to our guidance today, we've included a detailed walk in the appendix. Reflecting on three quarters of results, many of the trends highlighted in the second quarter still hold. We see evidence of Power stabilizing, but we're working through a number of nonoperational headwinds there. Aviation is negatively impacted by the MAX grounding and that has largely been offset by timing-related items. Restructuring across our segments is running lower than anticipated. Healthcare is performing well. As it pertains to earnings, we're keeping our EPS outlook at $0.55 to $0.65 even after adjusting for Baker Hughes which is largely due to GE Capital earnings. For Industrial free cash flow, we're raising our full year outlook to breakeven to positive $2 billion. Compared to our original outlook, we've seen Power stabilize, lower restructuring, and interest expense, and better management of headwinds. Since the midyear point, we've…

Great. Before we open the line, we have a lot of people in the queue. So limit yourself one question. So we can get to as many as possible. Brandon, please open the line.

[Operator Instructions] And from Bank of America we have Andrew Obin. Please go ahead.

Yes. Larry, I'm going to - I know other people will ask different questions but you spent a lot of time talking about renewables. And why is renewables so important? And when are we going to see positive operating margin on renewables and what can you take from renewables for the rest of the business? Thanks.

Sure. Andrew, I don't think we tried to talk about renewables more or less than any of our four big Industrial segments. Obviously renewables is an important business. You saw earlier in the week the IEA come out with a forecast that would suggest the renewables space could be a $1 trillion business over the next couple of decades. Significant opportunity from a top line perspective, but as you point out we need to deliver better profitability amidst the growth we're enjoying today let alone growth that's down the road. When I look at the quarter in renewables we saw margins down a little over 2% down 500 basis points year-over-year. You break that down I think what we saw really was a fair bit of encouraging news in terms of the way the team was delivering the step up in volume particularly onshore here in the U.S. and some of the progress that we're making on our cost productivity programs. That said that was fundamentally offset by a number of the legacy issues that we referenced in the prepared remarks and the consolidation of the Alstom JVs. So from there we're really wrestling with the pricing headwinds which I think are again improving but not with today's shipments unfortunately. We saw 100 basis points of pressure due to tariffs and we continue frankly to have opportunities to execute on a number of projects better. So that's why those margins are down. But in terms of those things that we can control so that this can be a positive margin business in line with others in the renewables space particularly in wind I think we over the next several years should be able to demonstrate not only better margins but in turn better cash performance.

From JPMorgan we have Steve Tusa. Please go ahead.

Hey, guys. Good morning.

Good morning.

Hey, Steve. good morning.

Just on the corporate and related to Aviation. How much of that increase in corporate did come from spare engines to GECAS? And then would you expect this kind of headwind from MAX to basically flip positive kind of over the year following the MAX coming back to services?

Yeah. So Steve when we talk about the spare engines in the quarter specific as it relates to spares to GECAS the corporate elimination was just under $100 million this quarter and we are seeing spare engine shipments higher in the quarter about half of that now back on Aviation about half of that relates to LEAP. And what we've seen in the second half and we've seen it third quarter we'll continue to see it in the fourth quarter is an acceleration of the LEAP-1B shipments in anticipation of the MAX return to service. And overall, if you look at the levels we're seeing in 2019 for spare engine shipments they are up over 2018, but we expect them to be about flat as we go into 2020.

Yeah. And Steve, I think just step back right you all know early in the life of a new engine program we're going to see spares represent roughly 10% of sales. We'll see that at the tail end of the program. I'd say everyone is focused on a safe return to service which puts a little bit more focus there. So that's why you see the step up here in the back half relative to the sales of spares to GECAS and others. Obviously, the benefit we take in Aviation is eliminated at the corporate level so it effectively washes. But that's really what you're seeing. As we think about 2020, I think we're going to try to follow Boeing's lead here when we talk about the full year cash headwinds this year due to MAX that obviously assumes that we don't see a return to service this year. That's just I think a conservative financial planning assumption we took on the last quarterly update. But as you can well appreciate, we're working very closely with Boeing, very closely with our carrier customers to prepare for that safe return to service not only with respect to the planes and the engines that have been delivered, but those that are in inventory or on the production line today.

From Wolfe Research, we have Nigel Coe. Please go ahead.

Yeah. Thanks. Good morning. Just wanted to turn to free cash flow and you talked -- you've disclosed $4.4 billion of working capital headwinds in your free cash year-to-date. How does that reverse into 4Q? We normally see obviously a pickup in shipments so therefore working capital draws down. So how much of that $4.4 billion reverses in 4Q? And then within renewables progress collections that's $0.5 billion down year-to-date and backlog is up materially. So I'm just curious on that dynamic. Why is progress down versus the backlog up?

So the $4.4 billion of working capital this year, let me just talk about a little bit of the background on it, and then as I go I'll talk about what we see really reversing in the fourth quarter. First, we had inventory build year-to-date of $2 billion. That's across renewables, Aviation and Healthcare. That largely shifts and reverses as we head into the fourth quarter with heavy fourth quarter shipment profile. We also in receivables had a $2.4 billion headwind year-to-date in working capital consumption for receivables. Big chunk of that is the 737 MAX. We also have factoring programs coming down for the year too both through the continued runoff of our long-term accounts receivable, some decisions we've made to exit or discontinue higher-cost programs. And some of that is just volume seasonality mix sort of as we've gone through three quarters, which will reverse in the fourth quarter as well. When you look at progress, we are seeing some mixing in progress between renewables and Power. Backlog is up on new orders, but progress upfront is a lower percentage. So, some of that moves around a little bit in the progress line.

From RBC Capital Markets, we have Deane Dray. Please go ahead.

Thank you. Good morning everyone.

Good morning, Deane.

Hey, would love to get an update on the Power portfolio, the work-outs on the individual businesses. Looked like steam had a tough quarter. And can you also clarify on hydro? GE was in hydro at one time. They got out of it. You're back in it with Alstom. Is that considered to be core to the renewables portfolio and that would be helpful. Thanks.

Sure, sure. Well, let me take those in reverse order, Deane. As you know when we talk about renewables, the bulk of our revenue today comes from our onshore wind business. I think we like the renewables space broadly, and we're really trying to fortify the position we have both in offshore wind, you see that with the step up in R&D the introduction of the Haliade-X, but also other aspects, including hydro where frankly the businesses isn't operating to its full potential today. So it's more of a project-oriented business. It's a small $1 billion [-ish] [ph] P&L within renewables today, where we clearly are paying off those inheritance taxes, which we've referenced through the course of the year. We think hydro can perform in line, if not better than competitors there. But there's work to do. We've got new leadership in place and when we were with the team several weeks ago, reviewing the strategic outlook for the business in Paris, I think they see hydro as an important business relative to our overall renewables offering particularly in certain parts of the world, where hydropower is and/or -- is and will be a part of the energy transition. With respect to the Power portfolio, Deane as you know, we really have three businesses there. We have our steam business, our nuclear business and Power Conversion. Clearly, when you look at the quarter both from an equipment and a services perspective, we saw pressure. I think Jenny went through that in her prepared remarks. Clearly a tough comp in equipment both in steam and nuclear and we are seeing some service pressure both -- in both of those businesses. Some of that is timing-related, some of that it's just where those businesses that hit again in the energy transition. I think we're encouraged by what we see in Power Conversion. I give Russell Stokes here a ton of credit. Russell has jumped in. He's running that business himself in addition to looking after the rest of the portfolio, brought in a new CFO from the outside, Glen Ferguson. There's a lot that's underway as they look to manage that business closer to the customer while taking a good bit of cost out. So there's a lot of work to do here, Deane, in nuclear given the challenges there particularly in places like Japan. We talked about steam power conversion, but I think the team is making good progress. You don't see it so much in these equipment and service numbers, but I think as we go into 2020, you're going to see improved margin and cash performance from these businesses ex the legacy Alstom-related issues.

From Melius Research, we have Scott Davis. Please go ahead.

Good morning. I know everyone wants to talk about Power and Aerospace since they're the most topical, but I look at Healthcare and just curious through your eyes Larry, you're used to running some businesses with these characteristics of razor-razorblade characteristics. In Healthcare, once you take out Life Sciences, the margin isn't all that exciting really. Historically been kind of a mid-teens margin business that requires a fair amount of capital and R&D etcetera. I mean is there a view yet that you have that, where that margin ought to be and how you get there? And maybe just comments about how historically this is a business that really spent away a lot of the upside, so you'd get fits and starts and operating leverage, but it never really stuck? Is there a focus being placed on getting this business to more sustainable higher profitable levels?

You better believe it, Scott. And I think the team understands that we're going to have a different profile in Healthcare when we are on the other side of the biopharma transaction. But that said I think there's a lot of conviction on Kieran and the team's part, myself as well with what we'll have on a go-forward basis, right? Here we have a $17 billion revenue business, smack in the middle of most of that matters in healthcare delivery today. As you point out mid-teens margins; good, I think routines there with respect to driving productivity to offset price; good cash conversion. But there is no way in which this business is optimized right? There's a lot we can do from a lean perspective here. That's why referenced the Florence facility event a few weeks ago. I think that is going to help us improve quality, improve delivery. We should see not only expense, but frankly cash come out of that business and drive better conversion. I think if we can be smarter about where we invest, we don't have to see all that savings be spent away. Clearly, over time you're going to see us remix this business more toward the digital that's why referenced the AI progress with the FDA around the critical care offering. Services is an area where I think we see opportunity as well. So going forward, I think the teams will be very focused on making sure that this is as good a business as any GE business. And given what I know about the space Scott, I seen no reason why this can't be a much stronger more vibrant part of our company. And I hope you'll see that in Chicago, when we have the Investor Day that Steve referenced in conjunction with RSNA.

From Vertical Research, we have Jeff Sprague. Please go ahead.

Thank you. Good morning everyone. I wonder if you could just help us with kind of the timing dynamics that were at play here. In other words, thinking about the restructuring numbers coming down, how much of that is kind of a permanent reduction of costs you expected to incur versus kind of stuff shifting to next year? And same for kind of the receivable supply chain program and aero allowances and all that sort of stuff, is there a meaningful year-to-year timing difference there?

Jeff I would say on restructuring -- what you're really seeing is sort of three things: One, the timing dynamic that you referenced, I think we are in a number of places foregoing severance in light of some attrition which gives us an opportunity to reduce the spend, maintain the return. And than just a host of other restructuring projects where whether we plan conservatively or delivering more effectively, we're getting a better return for our dollar. So I'm encouraged by that. With respect to timing, what that refers to specifically are the ongoing conversations and discussions that we're having in Europe with the various constituencies involved in Power. And more broadly, I think we set ourselves up to work through that during the course of the year. I think at this point, you may see some of that expense this year. It clearly will be a cash pull in 2020 and beyond. I'm not sure we're in a position to quantify that specifically today for you as those conversations are ongoing, but that's really what's happening. We're going to continue to restructure. We'll see that. I think the quantum fade over time. But we want to make sure as we go through the 2020 budget process here in November that every good opportunity, every good project gets a full hearing because we really want to play the long game here and set ourselves up for better margins and better cash.

Yeah. And Jeff, I'll jump in on the supply chain finance, some of the factoring shifts as well. And maybe I'll talk about it in the context of our guide. We moved our guide from negative 1 to 1 to 0 to 2, and I think the important thing to know kind of foundationally is that the first half trends we've seen are holding. So Power, continued stabilization. We see the benefit from interest. Larry talked about restructuring. But then when you start to think about the $1 billion this quarter, we are seeing a lower impact of the supply chain finance transition than we expected. So more than half of that $1 billion was really due to the absence of that, which is a real positive for us. When you look into 2020, that is something that largely does not repeat or we don't expect it to repeat in terms of the planning cycle. Secondly, we're seeing better performance across a couple of our businesses; so strength in aviation services, coupled with some incrementally better Healthcare performance. And really when you look at the construct, that plus a little bit of the restructuring side, which Larry talked about, that really makes up sort of the bulk of how we think about the 2019 shifting, but you can glean some of the pieces going into 2020.

Thanks, Jeff.

From Citi we have Andrew Kaplowitz. Please go ahead.

Good morning, guys.

Good morning.

Hi, Andy.

Hi, Andy. Good morning.

Larry, intra-quarter you had said that you were watching Healthcare in China and potential impacts there of the trade war. It seems like the overall business was able to absorb the impact relatively well, with the exception maybe being China imaging. But can you give us more color regarding what you're seeing in China and Healthcare Systems specifically and the outlook for that business?

Yes. No, we certainly saw some softness there in the third quarter, Andy. Interestingly, it was more on private side than the public side of the marketplace. I think, we are in turn planning conservatively here for the fourth quarter, just given those trends and some of the uncertainty in China right now around the relatively more short-cycle nature of Healthcare broadly, certainly in our business. We have new leadership on the ground in China that is going. And Yihao Zhang is going through a number of changes in both the organization and some of our go-to-market activities. That'll take a little bit of time, I think, to put us on better competitive footing in country as well. So as we get into 2020, I'm hopeful that regardless of the macro there, we'll see better performance from the imaging business there.

From Barclays we have Julian Mitchell. Please go ahead.

Hi. Good morning.

Good morning, Julian.

Good morning. Just my question on the Power business. It looked like Gas Power lost about $100 million of EBIT in Q3. Just looking at that business in particular on the service piece perhaps, I think Jamie you'd called out Power Services productivity being an issue. So maybe give more color there and how quickly you think you can improve that productivity on the service piece? And following up on Power Portfolio, maybe Larry, is there any kind of time frame around which you think about just an outright exit from pieces of it versus continuously trying to improve what you have?

So, Julian, I'll talk a little bit about Power Services and maybe I'll touch on some of the top line as well as some of the margin elements of it, and I'll break it into the three pieces. So Gas Power services, in the contractual book we actually have been seeing factored fired hours up. So the fleet is running. We're seeing good utilization. But we were impacted in the quarter, both by outage counts being down as well as by different mix of outages. And so the major inspection outages were down as well, which really impacts how we think about what flows through. In this book, we're really focused on cost to serve, meaning outage execution, how do we think about working capital management related to that. And that all brings it down to how do we continue to work closely with our customers, but accrete margin over time. The second piece, the transactional book, we are seeing revenue down. But that is remixing to higher margin. And we see that coming through, as we've refocused the team on price, higher-margin work. In transactional, what is gaining revenue a bit here is some fulfillment issues and operations and we've mentioned some of the operational issues we've had earlier in the year. They continue and that's something that Scott and his team and Larry have really been deep diving and focused on how that execution path really shifts up. Upgrades, we see good demand. The quarter was impacted by deal timing. We do expect some of that to flip in the fourth quarter. But if you pull back on services in total, expect a more positive profile in the fourth quarter. But we still see full year as slightly down which is a little bit different than what we were seeing maybe a couple of quarters ago.

I would just say, with respect to the strategic question around Power Portfolio, it's important to remember that when you hear us talk about driving a lean transformation of these businesses, better upfront discipline around which projects we take on, how we price them, how we framed risk, let alone how we execute and how we support them in the aftermarket. But that is not necessarily a strategic call once and for all time, right? I think our view is, we wanted to make sure we had an integrated steam business, both in equipment and services. That integration is underway, let alone the improvements that we've referenced. Our nuclear business is a business where we see the opportunity to expand margins, admittedly in a relatively flattish space. And Power Conversion is a turnaround I'm excited about, given the traction I see and our monthly reviews with Russell in the business. I think over time, those operational improvements will frankly expand the strategic optionality we have in and around each of those businesses, let alone the Power Portfolio as a whole. If and when we do something we'll have that discussion internally before we have it publicly. But in the near term, this team's focused on making sure, we deliver better performance, we have more options, long term. And again, I'm encouraged by the progress that I see.

From Deutsche Bank, we have Nicole DeBlase. Please go ahead.

Yes, thanks. Good morning.

Good morning, Nicole.

So I just want to talk a little bit about Industrial margins. No change to the full year guidance from zero to 100 bps expansion. Year-to-date we have 130 bps decline. Can we just maybe bridge how you guys get there with respect to the implied 4Q guidance? Thanks.

Yes. So Nicole, I'll just walk through maybe the macro themes on this one. And probably the most important to really look at is the second half non-repeat of the Power charges. So we took well over $1 billion of charges in the second half last year. You saw this in the third quarter performance. We expect it to continue in the fourth quarter, but largely a non-repeat of that, which is a big lift. The second is continued strength in aviation services and the aftermarket there. Military helps but both of those two things really help us. We are seeing the LEAP/Passport impact in the transition but still largely very healthy at Aviation. At Healthcare, we've got biopharma growth and continued cost control at HCS. So that's favorable as well. And then, as you mentioned, we do see renewables negatively impacting our own MAX. And when you start to think about that it's the renewable volume ramp that Larry mentioned and talked about coupled with the Grid and Hydro project execution. But net-net it's really the Power non-repeat and largely Aviation.

From Gordon Haskett we have John Inch. Please go ahead.

Thank you.

Hey, John. Good morning.

Hey, Just a question. Rough calculations, Larry, Jamie for Aviation suggesting maybe sitting on a pretty sizable cash advance built up over the years. First does that create kind of future cash headwind? And when will that start? And then second just thinking out loud. If customers start to cancel the MAX not all of them but maybe some, considering you've received sort of large cash advances I think it's like half the final bill for engine production, do you have to give the money back? Or how exactly does that work? Thank you.

Yes. So let me talk a little bit about MAX first and then I'll talk about allowances and discounts on the payable that's built up there. So first on the MAX, we still expect this year to be impacted to the tune of about negative $1.4 billion. When we think about how that comes through in future periods it is really difficult to predict. A lot of this is going to depend on exactly how the reentry into service works. And specifically, logistics, production, scheduling there's just multiple variables here around the ultimate delivery schedule of Boeing planes to customers. So that's maybe -- as you think about 2020 there's multiple scenarios that could play out there. When I really pivot to looking at Aviation free cash flow specifically, for 2019 negative one, four [ph] for the 737, we have seen that in our planning cycle largely offset by two things: One is accrued allowances and discounts, which is basically a situation where when we sell engines we've got contracts with both air framers and airlines and when the discounts are offered on these engines, the payment for the engine can be from the airframer but the payment for the discount can be paid separately to the airline. And they have a lot of timing variability depending on how programs are launching and different production schedules. We have seen accrued allowances and discounts build this year and we had expected at the half for that to largely reverse this year. Now based on where we are right now, we're expecting a little more than half of that 737 MAX deficit to be made up by this build in payables that then will push into 2020 and shift back down to your point. The other part where we're seeing strength in Aviation free cash flow is as I mentioned before, just the Aviation aftermarket and services side of things. Just nice cash flow continuing to come through there better than we expected. So hopefully that gives you the sense for 2019. And again, 2020, MAX a little bit TBD and we do expect that accrued discounts and allowances to also shift downward, which we'll see some pressure there but some goodness from MAX, hopefully.

John, I think that obviously, we didn't come into this year expecting what has played out in that regard. Again our primary focus is to support Boeing and our carrier customers with respect to what they return to service. But with respect to the cash flows in this business, we had over $4 billion last year despite some of the MAX dynamics, as Jamie just outlined. I think we are encouraged by the work the team has done this year. And going forward, given our market leadership position, the installed base, the new engines we have coming online not only commercially, but frankly the growing military business that we have, the opportunities to drive lean at Aviation, particularly with respect to improving inventory turnover and on-time delivery, I just think there's a lot of potential here given the secular tailwinds in Aviation, our position in the space to build off this cash flow base that we delivered last year. And hopefully, we'll deliver this year for many years to come.

From Morgan Stanley, we have Josh Pokrzywinski. Please go ahead.

Hi, good morning everyone.

Good morning.

Hey Josh, good morning.

Just want to follow up on the Power order comment Jamie that you expect a lot of that to flip into the fourth quarter. If I recall, there was a pretty big order from Ohio that came out. Is that in the 3Q number, which I guess would imply kind of maybe the smaller order sizes are pretty small in the quarter? So, maybe just size that for us? And then Larry, following up on your comment earlier about an uncertain macro environment, where do you think you're really seeing that in the business? I mean, I think by and large, it's not really apparent in Aviation and Healthcare where maybe you would see a bit more. And Power kind of has its own issues. So maybe talk about how the macro is kind of informing your thinking right now.

Josh your -- if we just take those in reverse order, I would say that you're right. With the long-cycle nature of our business right, I think the installed base, the backlog, half the business in the -- half the revenue in the aftermarket, we don't have a tremendous amount of near and short-cycle exposure. But clearly, whether -- pick the business right, pick the newspaper. There's clearly a lot of concern out there as to where the economy is globally and what are we going to be dealing with in 2020. That said, as we look at our position in Aviation, absent the issues we talked about, I think we like a lot of what we see. Clearly both at Power and at renewables, I think what's most relevant is where we are and how we play through the energy transition much more so than any economic pressure. And while there are some dynamics in and around Healthcare that I mentioned earlier say in China, I think by and large, again given the nature of Healthcare, while we have some short-cycle exposure to a degree, it's far less than most businesses. And as we go forward, I think we look at that 7% organic growth in the quarter, the 6% over the last four is evidence that even amidst the economic and political uncertainty that's out, this is a portfolio with secular dynamics around it that on balance should help us weather any storm that may come.

Yes. And Josh on the Power Services and Power overall orders, when I was talking before about some better profile in the fourth quarter, I was talking specifically about services revenues in Power. If I really look at the Gas Power orders, we year-to-date have booked 12.8 gigawatts versus 7.2 gigawatts in the third quarter year-to-date 2018, so really pretty healthy for the year this year already. The Ohio order yes was in 3Q.

And remember Josh that we -- I think we said even on the first quarter call, that one of the pleasant surprises is that the order book that we were anticipating, materializing in Power, particularly Gas Power this year looked like it was coming in earlier. So, I think what you see a little bit relative to the year-on-year comp is just that a strong first half, good year-to-date numbers and I think -- we think a year that on balance will come in as anticipated.

Thank you. And we will now turn it back to Mr. Winoker for closing remarks.

Great. Thanks everybody for joining the call this morning and we will be available for your questions following. Take care.

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