General Electric Company
Supplemental Financial Information
A. Financial Measures That Supplement Generally Accepted Accounting Principles
We sometimes use information derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. Specifically, we have referred to:
· | organic revenue growth in the third quarter of 2007 |
· | delinquency rates on certain financing receivables of the Commercial Finance and GE Money segments |
The reasons we use these non-GAAP financial measures and their reconciliation to their most directly comparable GAAP financial measures follow.
Organic Revenue Growth
Three months ended September 30 | |||||||||
(In millions) | 2007 | 2006 | % change | ||||||
GE consolidated continuing revenues as reported | $ | 42,534 | $ | 37,874 | 12% | ||||
Less the effects of | |||||||||
Acquisitions, business dispositions (other than dispositions | |||||||||
of businesses acquired for investment) and currency | |||||||||
exchange rates | 3,026 | 1,253 | |||||||
GE consolidated revenues excluding the effects of acquisitions, | |||||||||
business dispositions (other than dispositions of businesses | |||||||||
acquired for investment) and currency exchange rates | |||||||||
(organic revenues) | $ | 39,508 | $ | 36,621 | 8% |
We believe that meaningful analysis of our financial performance requires an understanding of the factors underlying that performance and our judgments about the likelihood that particular factors will repeat. In some cases, short-term patterns and long-term trends may be obscured by large factors or events. For example, events or trends in a particular segment may be so significant as to obscure patterns and trends of our industrial or financial services businesses in total. For this reason, we believe that investors may find it useful to see our third quarter 2007 revenue growth without the effects of acquisitions, business dispositions and currency exchange rates.
(1)
Delinquency Rates on Certain Financing Receivables
Commercial Finance
At | ||||||||||||
9/30/07 | (a) | 12/31/06 | 9/30/06 | |||||||||
Managed | 1.35 | % | 1.22 | % | 1.33 | % | ||||||
Off-book | 0.72 | 0.52 | 0.59 | |||||||||
On-book | 1.50 | 1.42 | 1.55 |
GE Money
At | ||||||||||||
9/30/07 | (a) | 12/31/06 | 9/30/06 | |||||||||
Managed | 5.24 | % | 5.21 | % | 5.33 | % | ||||||
Off-book | 5.87 | 5.49 | 5.50 | |||||||||
On-book | 5.16 | 5.19 | 5.32 | |||||||||
(a) | Subject to update. |
We believe that delinquency rates on managed financing receivables provide a useful perspective of our portfolio quality and are key indicators of financial performance. Further, investors use such information, including the results of both the on-book and off-book securitized portfolios, which are relevant to our overall performance.
(2)
B. Selected Quarterly Information
(In millions; per-share amounts in dollars) | 2007 | ||||||||
GE Consolidated | First quarter | Second quarter | Third quarter | ||||||
Revenues | $ | 39,250 | $ | 42,378 | $ | 42,534 | |||
Earnings from continuing operations before income taxes | $ | 6,211 | $ | 7,062 | $ | 5,705 | |||
Earnings from continuing operations | $ | 4,960 | $ | 5,610 | $ | 5,086 | |||
Earnings (loss) from discontinued operations | (357 | ) | (231 | ) | 453 | ||||
Net earnings | $ | 4,603 | $ | 5,379 | $ | 5,539 | |||
Per-share amounts - earnings from continuing operations | |||||||||
Diluted | $ | 0.48 | $ | 0.54 | $ | 0.50 | |||
Basic | 0.48 | 0.55 | 0.50 | ||||||
Per-share amounts - earnings (loss) from discontinued operations | |||||||||
Diluted | (0.03 | ) | (0.02 | ) | 0.04 | ||||
Basic | (0.03 | ) | (0.02 | ) | 0.04 | ||||
Per-share amounts - net earnings | |||||||||
Diluted | 0.45 | 0.52 | 0.54 | ||||||
Basic | 0.45 | 0.52 | 0.54 | ||||||
Earnings-per-share amounts are computed independently for earnings from continuing operations, earnings (loss) from discontinued operations and net earnings. As a result, the sum of per-share amounts from continuing operations and discontinued operations may not equal the total per-share amounts for net earnings. |
(3)
(In millions; per-share amounts in dollars) | 2006 | ||||||||||||||
GE Consolidated | First quarter | Second quarter | Third quarter | Fourth quarter | Total | ||||||||||
Revenues | $ | 35,569 | $ | 37,096 | $ | 37,874 | $ | 41,243 | $ | 151,782 | |||||
Earnings from continuing operations | |||||||||||||||
before income taxes | $ | 4,974 | $ | 5,700 | $ | 5,624 | $ | 6,971 | $ | 23,269 | |||||
Earnings from continuing operations | $ | 3,993 | $ | 4,676 | $ | 4,749 | $ | 5,924 | $ | 19,342 | |||||
Earnings from discontinued | |||||||||||||||
operations | 513 | 236 | 117 | 496 | 1,362 | ||||||||||
Net earnings | $ | 4,506 | $ | 4,912 | $ | 4,866 | $ | 6,420 | $ | 20,704 | |||||
Per-share amounts - earnings from | |||||||||||||||
continuing operations | |||||||||||||||
Diluted | $ | 0.38 | $ | 0.45 | $ | 0.46 | $ | 0.57 | $ | 1.86 | |||||
Basic | 0.38 | 0.45 | 0.46 | 0.58 | 1.87 | ||||||||||
Per-share amounts - earnings | |||||||||||||||
from discontinued operations | |||||||||||||||
Diluted | 0.05 | 0.02 | 0.01 | 0.05 | 0.13 | ||||||||||
Basic | 0.05 | 0.02 | 0.01 | 0.05 | 0.13 | ||||||||||
Per-share amounts - net earnings | |||||||||||||||
Diluted | 0.43 | 0.47 | 0.47 | 0.62 | 1.99 | ||||||||||
Basic | 0.43 | 0.47 | 0.47 | 0.62 | 2.00 | ||||||||||
Earnings-per-share amounts are computed independently for each quarter. As a result, the sum of the per-share amounts for each quarter may not equal the total year amount. Additionally, earnings-per-share amounts are computed independently for earnings from continuing operations, earnings from discontinued operations and net earnings. As a result, the sum of per-share amounts from continuing operations and discontinued operations may not equal the total per-share amounts for net earnings. |
(4)
(In millions; per-share amounts in dollars) | 2005 | ||||||||||||||
GE Consolidated | First quarter | Second quarter | Third quarter | Fourth quarter | Total | ||||||||||
Revenues | $ | 32,090 | $ | 33,210 | $ | 33,748 | $ | 37,369 | $ | 136,417 | |||||
Earnings from continuing operations | |||||||||||||||
before income taxes | $ | 4,371 | $ | 4,633 | $ | 5,567 | $ | 6,443 | $ | 21,014 | |||||
Earnings from continuing operations | $ | 3,489 | $ | 3,832 | $ | 4,422 | $ | 5,509 | $ | 17,252 | |||||
Earnings (loss) from discontinued | |||||||||||||||
operations | 746 | 599 | 410 | (2,389 | ) | (634 | ) | ||||||||
Net earnings | $ | 4,235 | $ | 4,431 | $ | 4,832 | $ | 3,120 | $ | 16,618 | |||||
Per-share amounts - earnings from | |||||||||||||||
continuing operations | |||||||||||||||
Diluted | $ | 0.33 | $ | 0.36 | $ | 0.42 | $ | 0.52 | $ | 1.63 | |||||
Basic | 0.33 | 0.36 | 0.42 | 0.52 | 1.63 | ||||||||||
Per-share amounts - earnings (loss) | |||||||||||||||
from discontinued operations | |||||||||||||||
Diluted | 0.07 | 0.06 | 0.04 | (0.23 | ) | (0.06 | ) | ||||||||
Basic | 0.07 | 0.06 | 0.04 | (0.23 | ) | (0.06 | ) | ||||||||
Per-share amounts - net earnings | |||||||||||||||
Diluted | 0.40 | 0.42 | 0.45 | 0.30 | 1.57 | ||||||||||
Basic | 0.40 | 0.42 | 0.46 | 0.30 | 1.57 | ||||||||||
Earnings-per-share amounts are computed independently for each quarter. As a result, the sum of the per-share amounts for each quarter may not equal the total year amount. Additionally, earnings-per-share amounts are computed independently for earnings from continuing operations, earnings (loss) from discontinued operations and net earnings. As a result, the sum of per-share amounts from continuing operations and discontinued operations may not equal the total per-share amounts for net earnings. |
(5)
C. Selected 2005 Quarterly Information
Increase (decrease); (in millions; per-share amounts in dollars) | 2005 | ||||||||||||||
GE Consolidated (a) | First quarter | Second quarter | Third quarter | Fourth quarter | Total | ||||||||||
Revenues | |||||||||||||||
As reported | $ | 31,930 | $ | 33,482 | $ | 33,798 | $ | 37,512 | $ | 136,722 | |||||
Cut-off | 173 | (260 | ) | (24 | ) | (116 | ) | (227 | ) | ||||||
Contract cost | (13 | ) | (12 | ) | (26 | ) | (27 | ) | (78 | ) | |||||
Adjusted | $ | 32,090 | $ | 33,210 | $ | 33,748 | $ | 37,369 | $ | 136,417 | |||||
Earnings from continuing operations before income taxes | |||||||||||||||
As reported | $ | 4,310 | $ | 4,748 | $ | 5,589 | $ | 6,509 | $ | 21,156 | |||||
Cut-off | 67 | (110 | ) | (4 | ) | (47 | ) | (94 | ) | ||||||
Contract cost | (6 | ) | (5 | ) | (18 | ) | (19 | ) | (48 | ) | |||||
Adjusted | $ | 4,371 | $ | 4,633 | $ | 5,567 | $ | 6,443 | $ | 21,014 | |||||
Earnings from continuing operations | |||||||||||||||
As reported | $ | 3,447 | $ | 3,908 | $ | 4,436 | $ | 5,552 | $ | 17,343 | |||||
Cut-off | 46 | (73 | ) | (3 | ) | (31 | ) | (61 | ) | ||||||
Contract cost | (4 | ) | (3 | ) | (11 | ) | (12 | ) | (30 | ) | |||||
Adjusted | $ | 3,489 | $ | 3,832 | $ | 4,422 | $ | 5,509 | $ | 17,252 | |||||
Earnings (loss) from discontinued operations | |||||||||||||||
As reported | $ | 743 | $ | 600 | $ | 414 | $ | (2,389 | ) | $ | (632 | ) | |||
Cut-off | 3 | (1 | ) | (4 | ) | - | (2 | ) | |||||||
Adjusted | $ | 746 | $ | 599 | $ | 410 | $ | (2,389 | ) | $ | (634 | ) | |||
Net earnings | |||||||||||||||
As reported | $ | 4,190 | $ | 4,508 | $ | 4,850 | $ | 3,163 | $ | 16,711 | |||||
Cut-off | 49 | (74 | ) | (7 | ) | (31 | ) | (63 | ) | ||||||
Contract cost | (4 | ) | (3 | ) | (11 | ) | (12 | ) | (30 | ) | |||||
Adjusted | $ | 4,235 | $ | 4,431 | $ | 4,832 | $ | 3,120 | $ | 16,618 | |||||
Per-share amounts - earnings from continuing operations | |||||||||||||||
Diluted, as reported | $ | 0.32 | $ | 0.37 | $ | 0.42 | $ | 0.53 | $ | 1.64 | |||||
Adjustment | - | (0.01 | ) | - | - | (0.01 | ) | ||||||||
Diluted, as adjusted | $ | 0.33 | $ | 0.36 | $ | 0.42 | $ | 0.52 | $ | 1.63 | |||||
Basic, as reported | $ | 0.33 | $ | 0.37 | $ | 0.42 | $ | 0.53 | $ | 1.64 | |||||
Adjustment | - | (0.01 | ) | - | - | (0.01 | ) | ||||||||
Basic, as adjusted | $ | 0.33 | $ | 0.36 | $ | 0.42 | $ | 0.52 | $ | 1.63 | |||||
Per-share amounts - earnings (loss) from discontinued operations | |||||||||||||||
Diluted, as reported | $ | 0.07 | $ | 0.06 | $ | 0.04 | $ | (0.23 | ) | $ | (0.06 | ) | |||
Adjustment | - | - | - | - | - | ||||||||||
Diluted, as adjusted | $ | 0.07 | $ | 0.06 | $ | 0.04 | $ | (0.23 | ) | $ | (0.06 | ) | |||
Basic, as reported | $ | 0.07 | $ | 0.06 | $ | 0.04 | $ | (0.23 | ) | $ | (0.06 | ) | |||
Adjustment | - | - | - | - | - | ||||||||||
Basic, as adjusted | $ | 0.07 | $ | 0.06 | $ | 0.04 | $ | (0.23 | ) | $ | (0.06 | ) | |||
Per-share amounts - net earnings | |||||||||||||||
Diluted, as reported | $ | 0.39 | $ | 0.42 | $ | 0.46 | $ | 0.30 | $ | 1.57 | |||||
Adjustment | - | (0.01 | ) | - | - | (0.01 | ) | ||||||||
Diluted, as adjusted | $ | 0.40 | $ | 0.42 | $ | 0.45 | $ | 0.30 | $ | 1.57 | |||||
Basic, as reported | $ | 0.40 | $ | 0.43 | $ | 0.46 | $ | 0.30 | $ | 1.58 | |||||
Adjustment | - | (0.01 | ) | - | - | (0.01 | ) | ||||||||
Basic, as adjusted | $ | 0.40 | $ | 0.42 | $ | 0.46 | $ | 0.30 | $ | 1.57 | |||||
Earnings-per-share amounts are computed independently for each quarter. As a result, the sum of the per-share amounts for each quarter may not equal the total year amount. Earnings-per-share amounts are computed independently for earnings from continuing operations, earnings (loss) from discontinued operations and net earnings. As a result, the sum of per-share amounts from continuing operations and discontinued operations may not equal the total per-share amounts for net earnings. Additionally, earnings-per-share amounts for the adjustment are computed independently. As a result, the sum of the as reported and adjustment per-share amounts may not equal the total adjusted amount. | |
(a) | As reported amounts reflect the Plastics, Advanced Materials, Lake and WMC businesses as discontinued operations. |
(6)