Exhibit 99
PRESS RELEASE
GE Reports Record Fourth-Quarter and Full-Year Results for 2007;
4Q EPS up 17%; 18% for the Year
4Q Orders of $27 billion, up 18%; 4Q Revenues of $48.6 billion, up 18%;
Infrastructure Segment Profit up 26%; Global Revenues up 27%
Reaffirms Total Year 2008 Guidance
4Q and FY 2007 Highlights (Continuing Operations)
| § | 4Q earnings per share (EPS) of $.68, up 17%; 4Q earnings of $6.8 billion, up 15% |
| § | Full-year (FY) EPS of $2.20, up 18%; FY earnings of $22.5 billion, up 16% |
| § | 4Q revenues of $48.6 billion, up 18%; organic revenue growth of 10%; global revenue growth of 27% |
| § | FY revenues of $173 billion, up 14%; organic revenue growth of 9% |
| § | 4Q total orders of $27 billion, up 18%; major equipment orders of $14.1 billion, up 33%; |
| services orders of $9.7 billion, up 5% |
| § | Return on average total capital (ROTC) expanding to 18.9% |
| § | FY Industrial cash flow from operating activities (CFOA) growth of 15% |
| § | Reaffirmed 2008 FY EPS guidance of $2.42+, up 10%+ |
Fairfield, Conn., Jan. 18, 2008- GE announced today fourth-quarter 2007 earnings from continuing operations of $6.8 billion or $.68 per share, up 15% and 17%, respectively, from fourth-quarter 2006. Fourth-quarter revenues from continuing operations were $48.6 billion, up 18%, increasing 10% organically. Full-year 2007 earnings from continuing operations were $22.5 billion or $2.20 per share, up 16% and 18%, respectively, from 2006. Full-year 2007 revenues from continuing operations were $173 billion, up 14%, increasing 9% organically.
“We have built the company to outperform in this environment,” GE Chairman and CEO Jeff Immelt said. “We have strengthened the portfolio for growth, restructured to lower our cost, maintained our Triple A credit rating and stayed true to our risk management principles. We are also more global, with more than 50% of our revenues now coming from outside the U.S. At the same time, we have been disciplined with capital allocation, returning $58 billion over the last three years to our shareowners in the form of dividends and buyback.
“Our record performance in such a tough environment validates the strength of our strategy and the talent of our team,” Immelt said. “Infrastructure led the fourth quarter delivering 26% profit growth, with 20% or more profit growth from Energy, Aviation, Oil & Gas, Transportation and Water,” Immelt said. “Industrial margins increased with better pricing and productivity. Global demand for our technology continued, driving highly visible growth in orders and backlog. Our growing installed base of Infrastructure products has led to long-term service contracts that are strengthening
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customer relationships around the world. Infrastructure, which is 40% of our earnings, is well positioned for growth in 2008 and beyond.
“Our financial services businesses performed well in an extremely volatile market,” Immelt said. “Commercial Finance grew segment profit 9% with good asset growth and stable portfolio quality. GE Money had 7% earnings growth with excellent global performance offsetting challenges in the U.S. market. These results included a $400 million increase in the loss provision in the quarter.
“Overall our financial services earnings growth was 37% globally, driven by excellent origination and strong risk management,” Immelt said. “The high mix of global earnings resulted in a lower than expected financial services tax rate.
“NBC Universal delivered 10% segment profit growth in the quarter for its fifth straight quarter of profit growth,” Immelt said. “Film had its best year ever, with strong global growth. Entertainment and Information Cable had record ratings and solid earnings growth. The network continues to improve its programming and cost position.
“Industrial posted solid segment profit growth of 7%, overcoming a difficult U.S. housing market with a good performance from Enterprise Solutions,” Immelt said. “Healthcare’s segment profit was down 4% with the continued challenge from its OEC business and the effects of the Deficit Reduction Act. The balance of the business is in good shape. We expect Healthcare to improve in ’08,” Immelt said.
“Our company-wide initiatives focused on organic growth, services, global expansion and ecomaginationsm are delivering positive results,” Immelt said. “We achieved our twelfth straight quarter of organic revenue growth of 2-3 times global GDP. Services revenues were up 10% and global revenues grew 27% in the quarter. Ecomaginationsm, our environmental technologies initiative, delivered $14 billion in revenues for the year, an increase of 17%,” Immelt said.
GE’s total orders were up 18% to $27 billion for the quarter and up 18% to $98 billion for the year. Total backlog grew $19 billion year-over-year, an increase of 42%. Major equipment orders were $14.1 billion, up 33% for the quarter and up 29% to $50 billion for the year. Services orders were up 5% for the quarter and 7% for the year. Contractual Service Agreement (CSA) backlog stood at $109 billion, up 17%.
“We sustained our focus on margins,” Immelt said. “Our industrial profit margins expanded 70 basis points for the year, driven by pricing and productivity. ROTC increased to 18.9% for the year.”
The company bought back $13.9 billion worth of its common shares during the year, completing its expanded $27 billion share repurchase program one year ahead of schedule. In December 2007, the company announced a new, three-year share repurchase program of $15 billion and increased its dividend, for the 32nd straight year, by 11%. In addition, the company said that it remains committed to the portfolio action it outlined in December, including the disposition of some of the consumer finance platforms.
GE’s full-year consolidated effective tax rate was 16%, which was slightly below the company’s full-year 2007 expectations of 17% due to the higher proportion of lower taxed, global earnings in financial services. The full-year industrial effective tax rate was 22%, in line with the company’s expectations.
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The company also filed a Form 8-K today describing and quantifying additional adjustments to historic financial statements arising from the ongoing review of its accounting policies and procedures. These revenue recognition adjustments had an insignificant effect on 2007 and 2006 results of operations.
Full-Year and Fourth-Quarter Financial Highlights:
Full-year earnings from continuing operations were $22.5 billion, up 16% from $19.4 billion in 2006. EPS from continuing operations were $2.20, up 18% from last year’s $1.86.
Full-year continuing revenues grew 14% to $173 billion reflecting core growth and the net effects of acquisitions.
Fourth-quarter earnings from continuing operations were $6.8 billion, up 15% from $5.9 billion in fourth quarter 2006. EPS from continuing operations were $.68 per share, up 17% from last year’s $.58.
Fourth-quarter continuing revenues were $48.6 billion, up 18% from $41.3 billion in fourth quarter 2006, reflecting organic growth of 10%.
Cash generated from GE’s operating activities in 2007 totaled $23.3 billion, down 2% from $23.8 billion last year, reflecting an increase of 15% from the Industrial businesses which was more than offset by a decrease in GE Capital Services’ dividends which in 2006 included greater proceeds from sales of insurance businesses.
“We want investors to see GE as a reliable growth company even in tough times. We will sustain our growth in 2008 led by Infrastructure and focus on hitting our financial goals of at least 10% EPS growth, 20% ROTC and organic revenue growth of 2-3 times GDP,” Immelt said. “Our portfolio is strong, our initiatives are delivering and we are positioned to win in the mega themes of this era. We see full-year 2008 continuing EPS of at least $2.42, an increase of 10%+ over comparable 2007 earnings. For 1Q’08, we expect to achieve continuing EPS of $.50-.53, up 4-10%, consistent with previous guidance, and net EPS of $.49-.52, up 11-18%.”
GE will discuss preliminary fourth-quarter and full-year results on a conference call and Webcast at 8:30 a.m. ET today. Call information is available at www.ge.com/investor, and related charts will be posted there prior to the call.
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GE (NYSE: GE) is Imagination at Work -- a diversified technology, media and financial services company focused on solving some of the world’s toughest problems. With products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, and media content, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company's Web site at www.ge.com.
Caution Concerning Forward-Looking Statements:
This document contains “forward-looking statements”- that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” or “will.” Forward-looking
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statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest and exchange rates and commodity and equity prices; the commercial and consumer credit environment; the impact of regulation and regulatory, investigative and legal actions; strategic actions, including acquisitions and dispositions; future integration of acquired businesses; future financial performance of major industries which we serve, including, without limitation, the air and rail transportation, energy generation, media, real estate and healthcare industries; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
Media Contact:
Russell Wilkerson, 203.373.3193 (office); 203.581.2114 (mobile)
russell.wilkerson@ge.com
Investor Contact:
Dan Janki, 203.373.2468 (office)
dan.janki@ge.com
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GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
| Consolidated | GE | Financial Services (GECS) | |||||||||||||||||||||||
| Years ended December 31 | 2007 | 2006 | V | % | 2007 | 2006 | V | % | 2007 | 2006 | V | % | |||||||||||||
| Revenues | |||||||||||||||||||||||||
| Sales of goods and services | $ | 99,526 | $ | 91,510 | $ | 99,796 | $ | 89,919 | $ | 718 | $ | 2,383 | |||||||||||||
| Other income | 3,019 | 2,154 | 3,371 | 2,307 | – | – | |||||||||||||||||||
| GECS earnings from continuing operations | – | – | 12,428 | 10,255 | – | – | |||||||||||||||||||
| GECS revenues from services | 70,193 | 58,179 | – | – | 71,468 | 59,243 | |||||||||||||||||||
| Total revenues | 172,738 | 151,843 | 14 | % | 115,595 | 102,481 | 13 | % | 72,186 | 61,626 | 17 | % | |||||||||||||
| Costs and expenses | |||||||||||||||||||||||||
| Cost of sales, operating and administrative | |||||||||||||||||||||||||
| expenses | 113,422 | 102,412 | 87,633 | 78,257 | 27,289 | 25,329 | |||||||||||||||||||
| Interest and other financial charges | 23,787 | 18,896 | 1,993 | 1,668 | 22,731 | 17,857 | |||||||||||||||||||
| Investment contracts, insurance losses and | |||||||||||||||||||||||||
| insurance annuity benefits | 3,469 | 3,213 | – | – | 3,647 | 3,419 | |||||||||||||||||||
| Provision for losses on financing receivables | 4,546 | 3,130 | – | – | 4,546 | 3,130 | |||||||||||||||||||
| Minority interest in net earnings of | |||||||||||||||||||||||||
| consolidated affiliates | 916 | 862 | 707 | 624 | 209 | 238 | |||||||||||||||||||
| Total costs and expenses | 146,140 | 128,513 | 14 | % | 90,333 | 80,549 | 12 | % | 58,422 | 49,973 | 17 | % | |||||||||||||
| Earnings from continuing operations | |||||||||||||||||||||||||
| before income taxes | 26,598 | 23,330 | 14 | % | 25,262 | 21,932 | 15 | % | 13,764 | 11,653 | 18 | % | |||||||||||||
| Provision for income taxes | (4,130 | ) | (3,950 | ) | (2,794 | ) | (2,552 | ) | (1,336 | ) | (1,398 | ) | |||||||||||||
| Earnings from continuing operations | 22,468 | 19,380 | 16 | % | 22,468 | 19,380 | 16 | % | 12,428 | 10,255 | 21 | % | |||||||||||||
| Earnings (loss) from discontinued | |||||||||||||||||||||||||
| operations, net of taxes | (260 | ) | 1,362 | (260 | ) | 1,362 | (2,127 | ) | 403 | ||||||||||||||||
| Net earnings | $ | 22,208 | $ | 20,742 | 7 | % | $ | 22,208 | $ | 20,742 | 7 | % | $ | 10,301 | $ | 10,658 | (3 | )% | |||||||
| Per-share amounts – earnings from | |||||||||||||||||||||||||
| continuing operations | |||||||||||||||||||||||||
| Diluted earnings per share | $ | 2.20 | $ | 1.86 | 18 | % | |||||||||||||||||||
| Basic earnings per share | $ | 2.21 | $ | 1.87 | 18 | % | |||||||||||||||||||
| Per-share amounts – net earnings | |||||||||||||||||||||||||
| Diluted earnings per share | $ | 2.17 | $ | 2.00 | 9 | % | |||||||||||||||||||
| Basic earnings per share | $ | 2.18 | $ | 2.00 | 9 | % | |||||||||||||||||||
| Total average equivalent shares | |||||||||||||||||||||||||
| Diluted shares | 10,218 | 10,394 | (2 | )% | |||||||||||||||||||||
| Basic shares | 10,182 | 10,359 | (2 | )% | |||||||||||||||||||||
| Dividends declared per share | $ | 1.15 | $ | 1.03 | 12 | % | |||||||||||||||||||
Dollar amounts and share amounts in millions; per-share amounts in dollars; unaudited. Supplemental consolidating data are shown for “GE” and “GECS.” Transactions between GE and GECS have been eliminated from the “Consolidated” columns. See note 1 to the 2006 consolidated financial statements at www.ge.com/annual06 for further information about consolidation matters.
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GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
| Consolidated | GE | Financial Services (GECS) | |||||||||||||||||||||||
| Fourth quarter ended December 31 | 2007 | 2006 | V | % | 2007 | 2006 | V | % | 2007 | 2006 | V | % | |||||||||||||
| Revenues | |||||||||||||||||||||||||
| Sales of goods and services | $ | 29,307 | $ | 24,988 | $ | 29,149 | $ | 24,555 | $ | 381 | $ | 597 | |||||||||||||
| Other income | 700 | 492 | 821 | 536 | – | – | |||||||||||||||||||
| GECS earnings from continuing operations | – | – | 3,369 | 2,912 | – | – | |||||||||||||||||||
| GECS revenues from services | 18,581 | 15,797 | – | – | 18,965 | 16,112 | |||||||||||||||||||
| Total revenues | 48,588 | 41,277 | 18 | % | 33,339 | 28,003 | 19 | % | 19,346 | 16,709 | 16 | % | |||||||||||||
| Costs and expenses | |||||||||||||||||||||||||
| Cost of sales, operating and administrative | |||||||||||||||||||||||||
| expenses | 31,986 | 27,096 | 24,904 | 20,732 | 7,465 | 6,642 | |||||||||||||||||||
| Interest and other financial charges | 6,487 | 5,170 | 565 | 413 | 6,232 | 4,935 | |||||||||||||||||||
| Investment contracts, insurance losses and | �� | ||||||||||||||||||||||||
| insurance annuity benefits | 868 | 849 | – | – | 903 | 916 | |||||||||||||||||||
| Provision for losses on financing receivables | 1,330 | 930 | – | – | 1,330 | 930 | |||||||||||||||||||
| Minority interest in net earnings of consolidated | |||||||||||||||||||||||||
| affiliates | 282 | 227 | 262 | 170 | 20 | 57 | |||||||||||||||||||
| Total costs and expenses | 40,953 | 34,272 | 19 | % | 25,731 | 21,315 | 21 | % | 15,950 | 13,480 | 18 | % | |||||||||||||
| Earnings from continuing operations before | |||||||||||||||||||||||||
| income taxes | 7,635 | 7,005 | 9 | % | 7,608 | 6,688 | 14 | % | 3,396 | 3,229 | 5 | % | |||||||||||||
| Provision for income taxes | (814 | ) | (1,060 | ) | (787 | ) | (743 | ) | (27 | ) | (317 | ) | |||||||||||||
| Earnings from continuing operations | 6,821 | 5,945 | 15 | % | 6,821 | 5,945 | 15 | % | 3,369 | 2,912 | 16 | % | |||||||||||||
| Earnings (loss) from discontinued operations, | |||||||||||||||||||||||||
| net of taxes | (125 | ) | 496 | (125 | ) | 496 | (124 | ) | (26 | ) | |||||||||||||||
| Net earnings | $ | 6,696 | $ | 6,441 | 4 | % | $ | 6,696 | $ | 6,441 | 4 | % | $ | 3,245 | $ | 2,886 | 12 | % | |||||||
| Per-share amounts – earnings from continuing | |||||||||||||||||||||||||
| operations | |||||||||||||||||||||||||
| Diluted earnings per share | $ | 0.68 | $ | 0.58 | 17 | % | |||||||||||||||||||
| Basic earnings per share | $ | 0.68 | $ | 0.58 | 17 | % | |||||||||||||||||||
| Per-share amounts – net earnings | |||||||||||||||||||||||||
| Diluted earnings per share | $ | 0.66 | $ | 0.62 | 6 | % | |||||||||||||||||||
| Basic earnings per share | $ | 0.67 | $ | 0.63 | 6 | % | |||||||||||||||||||
| Total average equivalent shares | |||||||||||||||||||||||||
| Diluted shares | 10,083 | 10,326 | (2 | )% | |||||||||||||||||||||
| Basic shares | 10,048 | 10,294 | (2 | )% | |||||||||||||||||||||
| Dividends declared per share | $ | 0.31 | $ | 0.28 | 11 | % | |||||||||||||||||||
Dollar amounts and share amounts in millions; per-share amounts in dollars; unaudited. Supplemental consolidating data are shown for “GE” and “GECS.” Transactions between GE and GECS have been eliminated from the “Consolidated” columns. See note 1 to the 2006 consolidated financial statements at www.ge.com/annual06 for further information about consolidation matters.
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GENERAL ELECTRIC COMPANY
Summary of Operating Segments (unaudited)
Three Months Ended December 31 | Twelve Months Ended December 31 | |||||||||||||||||
| (Dollars in millions) | 2007 | 2006 | V | % | 2007 | 2006 | V | % | ||||||||||
| Revenues | ||||||||||||||||||
| Infrastructure | $ | 17,338 | $ | 13,387 | 30 | $ | 57,925 | $ | 46,965 | 23 | ||||||||
| Commercial Finance (a) | 9,320 | 8,557 | 9 | 34,288 | 30,853 | 11 | ||||||||||||
| GE Money | 6,578 | 5,375 | 22 | 25,019 | 19,783 | 26 | ||||||||||||
| Healthcare | 4,995 | 4,700 | 6 | 16,997 | 16,560 | 3 | ||||||||||||
| NBC Universal | 4,551 | 4,217 | 8 | 15,416 | 16,188 | (5 | ) | |||||||||||
| Industrial (a) | 4,709 | 4,306 | 9 | 17,725 | 17,741 | (0 | ) | |||||||||||
| Total segment revenues | 47,491 | 40,542 | 17 | 167,370 | 148,090 | 13 | ||||||||||||
| Corporate items and eliminations | 1,097 | 735 | 49 | 5,368 | 3,753 | 43 | ||||||||||||
| Consolidated revenues from continuing | ||||||||||||||||||
| operations | $ | 48,588 | $ | 41,277 | 18 | $ | 172,738 | $ | 151,843 | 14 | ||||||||
| Segment profit (b) | ||||||||||||||||||
| Infrastructure | $ | 3,424 | $ | 2,717 | 26 | $ | 10,810 | $ | 8,848 | 22 | ||||||||
| Commercial Finance (a) | 1,761 | 1,609 | 9 | 6,039 | 5,297 | 14 | ||||||||||||
| GE Money | 957 | 898 | 7 | 4,280 | 3,267 | 31 | ||||||||||||
| Healthcare | 1,035 | 1,083 | (4 | ) | 3,056 | 3,142 | (3 | ) | ||||||||||
| NBC Universal | 923 | 841 | 10 | 3,107 | 2,919 | 6 | ||||||||||||
| Industrial (a) | 497 | 463 | 7 | 1,743 | 1,602 | 9 | ||||||||||||
| Total segment profit | 8,597 | 7,611 | 13 | 29,035 | 25,075 | 16 | ||||||||||||
| Corporate items and eliminations | (424 | ) | (510 | ) | 17 | (1,780 | ) | (1,475 | ) | (21 | ) | |||||||
| GE interest and other financial charges | (565 | ) | (413 | ) | (37 | ) | (1,993 | ) | (1,668 | ) | (19 | ) | ||||||
| GE provision for income taxes | (787 | ) | (743 | ) | (6 | ) | (2,794 | ) | (2,552 | ) | (9 | ) | ||||||
| Earnings from continuing operations | $ | 6,821 | $ | 5,945 | 15 | $ | 22,468 | $ | 19,380 | 16 | ||||||||
| Earnings (loss) from discontinued operations | ||||||||||||||||||
| (net of taxes) | $ | (125 | ) | $ | 496 | U | $ | (260 | ) | $ | 1,362 | U | ||||||
| Consolidated net earnings | $ | 6,696 | $ | 6,441 | 4 | $ | 22,208 | $ | 20,742 | 7 | ||||||||
(a) | During the fourth quarter of 2007, we transferred the Equipment Services business from the Industrial segment to the Commercial Finance segment, where a portion of the business is reported in Capital Solutions. Prior period information has been reclassified to be consistent with the current organization. |
| (b) | Segment profit always excludes the effects of principal pension plans, results reported as discontinued operations and accounting changes, and may exclude matters such as charges for restructuring; rationalization and other similar expenses; in-process research and development and certain other acquisition-related charges and balances; technology and product development costs; certain gains and losses from dispositions; and litigation settlements or other charges, responsibility for which preceded the current management team. Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment’s management is measured – excluded in determining segment profit, which we also refer to as “operating profit,” for Healthcare, NBC Universal, Industrial and the industrial businesses of the Infrastructure segment; included in determining segment profit, which we also refer to as “net earnings,” for Commercial Finance, GE Money, and the financial services businesses of the Infrastructure segment (Aviation Financial Services, Energy Financial Services and Transportation Finance). |
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GENERAL ELECTRIC COMPANY
Summary of Operating Segments (unaudited)
Additional Information
Three Months Ended December 31 | Twelve Months Ended December 31 | |||||||||||||||||
| (Dollars in millions) | 2007 | 2006 | V | % | 2007 | 2006 | V | % | ||||||||||
| Infrastructure | ||||||||||||||||||
| Revenues | $ | 17,338 | $ | 13,387 | 30 | $ | 57,925 | $ | 46,965 | 23 | ||||||||
| Segment profit | $ | 3,424 | $ | 2,717 | 26 | $ | 10,810 | $ | 8,848 | 22 | ||||||||
| Revenues | ||||||||||||||||||
| Aviation | $ | 5,049 | $ | 3,587 | 41 | $ | 16,819 | $ | 13,017 | 29 | ||||||||
| Aviation Financial Services | 1,134 | 1,187 | (4 | ) | 4,605 | 4,177 | 10 | |||||||||||
| Energy | 6,758 | 5,433 | 24 | 21,825 | 18,793 | 16 | ||||||||||||
| Energy Financial Services | 832 | 475 | 75 | 2,405 | 1,664 | 45 | ||||||||||||
| Oil & Gas | 2,181 | 1,439 | 52 | 6,849 | 4,340 | 58 | ||||||||||||
| Transportation | 1,179 | 1,118 | 5 | 4,523 | 4,159 | 9 | ||||||||||||
| Segment profit | ||||||||||||||||||
| Aviation | $ | 959 | $ | 758 | 27 | $ | 3,222 | $ | 2,802 | 15 | ||||||||
| Aviation Financial Services | 245 | 331 | (26 | ) | 1,155 | 1,108 | 4 | |||||||||||
| Energy | 1,417 | 1,029 | 38 | 3,824 | 2,906 | 32 | ||||||||||||
| Energy Financial Services | 188 | 198 | (5 | ) | 724 | 695 | 4 | |||||||||||
| Oil & Gas | 332 | 221 | 50 | 860 | 548 | 57 | ||||||||||||
| Transportation | 252 | 209 | 21 | 936 | 774 | 21 | ||||||||||||
| Commercial Finance | ||||||||||||||||||
| Revenues | $ | 9,320 | $ | 8,557 | 9 | $ | 34,288 | $ | 30,853 | 11 | ||||||||
| Segment profit | $ | 1,761 | $ | 1,609 | 9 | $ | 6,039 | $ | 5,297 | 14 | ||||||||
| Revenues | ||||||||||||||||||
| Capital Solutions | $ | 3,983 | $ | 3,848 | 4 | $ | 14,354 | $ | 14,169 | 1 | ||||||||
| Real Estate | 1,912 | 1,570 | 22 | 7,021 | 5,020 | 40 | ||||||||||||
| Segment profit | ||||||||||||||||||
| Capital Solutions | $ | 587 | $ | 472 | 24 | $ | 1,889 | $ | 1,789 | 6 | ||||||||
| Real Estate | 605 | 626 | (3 | ) | 2,285 | 1,841 | 24 | |||||||||||
| Industrial | ||||||||||||||||||
| Revenues | $ | 4,709 | $ | 4,306 | 9 | $ | 17,725 | $ | 17,741 | (0 | ) | |||||||
| Segment profit | $ | 497 | $ | 463 | 7 | $ | 1,743 | $ | 1,602 | 9 | ||||||||
| Revenues | ||||||||||||||||||
| Consumer & Industrial | $ | 3,507 | $ | 3,204 | 9 | $ | 13,332 | $ | 13,790 | (3 | ) | |||||||
| Enterprise Solutions | 1,270 | 1,102 | 15 | 4,462 | 3,951 | 13 | ||||||||||||
| Segment profit | ||||||||||||||||||
| Consumer & Industrial | $ | 262 | $ | 261 | 0 | $ | 1,046 | $ | 981 | 7 | ||||||||
| Enterprise Solutions | 235 | 201 | 17 | 697 | 620 | 12 | ||||||||||||
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GENERAL ELECTRIC COMPANY
Condensed Statement of Financial Position
| Consolidated | GE | Financial Services (GECS) | ||||||||||||||||
| (Dollars in billions) | 12/31/07 | 12/31/06 | 12/31/07 | 12/31/06 | 12/31/07 | 12/31/06 | ||||||||||||
| Assets | ||||||||||||||||||
| Cash & marketable securities | 61.2 | 61.9 | 7.0 | 4.8 | 54.5 | 59.9 | ||||||||||||
| Receivables | 22.3 | 19.6 | 15.1 | 13.8 | – | – | ||||||||||||
| Inventories | 12.9 | 10.0 | 12.8 | 10.0 | 0.1 | 0.1 | ||||||||||||
| GECS financing receivables - net | 377.7 | 321.7 | – | – | 385.6 | 328.6 | ||||||||||||
| Property, plant & equipment - net | 77.9 | 70.7 | 14.1 | 12.7 | 63.8 | 58.0 | ||||||||||||
| Investment in GECS | – | – | 57.7 | 54.1 | – | – | ||||||||||||
| Goodwill & intangible assets | 97.3 | 84.3 | 67.3 | 58.4 | 30.0 | 25.9 | ||||||||||||
| Other assets | 139.3 | 108.6 | 40.8 | 33.3 | 105.4 | 81.1 | ||||||||||||
| Assets of discontinued operations | 6.8 | 19.9 | 0.1 | 8.8 | 6.7 | 11.1 | ||||||||||||
| Total assets | $ | 795.4 | $ | 696.7 | $ | 214.9 | $ | 195.9 | $ | 646.1 | $ | 564.7 | ||||||
| Liabilities and equity | ||||||||||||||||||
| Borrowings | 514.1 | 432.8 | 15.8 | 11.1 | 500.9 | 426.3 | ||||||||||||
| Insurance contracts, insurance liabilities and | ||||||||||||||||||
| insurance annuity benefits | 34.1 | 34.5 | – | – | 34.4 | 34.8 | ||||||||||||
| Other liabilities & minority interest | 129.8 | 115.2 | 83.2 | 71.1 | 51.6 | 49.0 | ||||||||||||
| Liabilities of discontinued operations | 1.8 | 2.7 | 0.3 | 2.2 | 1.5 | 0.5 | ||||||||||||
| Shareowners’ equity | 115.6 | 111.5 | 115.6 | 111.5 | 57.7 | 54.1 | ||||||||||||
| Total liabilities and equity | $ | 795.4 | $ | 696.7 | $ | 214.9 | $ | 195.9 | $ | 646.1 | $ | 564.7 | ||||||
December 31, 2007, information is unaudited. Supplemental consolidating data are shown for “GE” and “GECS.” Transactions between GE and GECS have been eliminated from the “Consolidated” columns. See note 1 to the 2006 consolidated financial statements at www.ge.com/annual06 for further information about consolidation matters.
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GENERAL ELECTRIC COMPANY
Financial Measures That Supplement GAAP
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 for the three and twelve months ended December 31, 2007, compared with the three and twelve months ended December 31, 2006; return on average total capital (ROTC), which is calculated using average total shareowners’ equity, excluding effects of discontinued operations; growth in industrial cash from operating activities (Industrial CFOA) for the twelve months of 2007 compared to the twelve months of 2006; and GE industrial segment operating profit margin excluding the effects of the GE industrial portion of Corporate items and eliminations (segment profit margin). The reasons we use these non-GAAP financial measures and their reconciliation to the most directly comparable GAAP financial measures follow.
Three months ended December 31 | Twelve months ended December 31 | |||||||||||||||||
| (Dollars in millions) | 2007 | 2006 | V | % | 2007 | 2006 | V | % | ||||||||||
| Organic Revenue Growth – Continuing Operations | ||||||||||||||||||
| Revenues as reported | $ | 48,588 | $ | 41,277 | 18 | % | $ | 172,738 | $ | 151,843 | 14 | % | ||||||
| Less the effects of | ||||||||||||||||||
| Acquisitions, business dispositions (other than | ||||||||||||||||||
| dispositions of businesses acquired for investment) | ||||||||||||||||||
| and currency exchange rates | 4,140 | 953 | 12,803 | 4,992 | ||||||||||||||
| The 2006 Olympics broadcasts | – | – | – | 684 | ||||||||||||||
| Revenues excluding the effects of acquisitions, | ||||||||||||||||||
| business dispositions (other than dispositions of | ||||||||||||||||||
| businesses acquired for investment), currency | ||||||||||||||||||
| exchange rates and the 2006 Olympics | ||||||||||||||||||
| broadcasts (organic revenues) | $ | 44,448 | $ | 40,324 | 10 | % | $ | 159,935 | $ | 146,167 | 9 | % | ||||||
Three months ended December 31 | |||||||||
| 2007 | 2006 | ||||||||
| Average Total Shareowners’ Equity, Excluding | |||||||||
Effects of Discontinued Operations (a) | |||||||||
Average total shareowners’ equity (b) | $ | 113,842 | $ | 109,174 | |||||
| Less the effects of | |||||||||
| Cumulative earnings from discontinued operations | – | – | |||||||
| Average net investment in discontinued operations | 3,640 | 11,658 | |||||||
| Average total shareowners’ equity, excluding effects | |||||||||
of discontinued operations (a) | $ | 110,202 | $ | 97,516 | |||||
(a) | Used for computing ROTC. For GE, ROTC is earnings from continuing operations plus the sum of after-tax interest and other financial charges and minority interest, divided by the sum of the averages of total shareowners’ equity (excluding effects of discontinued operations), borrowings, mandatorily redeemable preferred stock and minority interest (on a 12-month basis, calculated using a five-point average). |
| (b) | On a 12-month basis, calculated using a five-point average. |
U.S. GAAP requires earnings of discontinued operations to be displayed separately in the Statement of Earnings. Accordingly, the numerators used in our calculations of ROTC exclude those earnings (losses). Further, we believe that it is appropriate to exclude from the denominators, specifically the average total shareowners’ equity component, the cumulative effect of those earnings for each of the years for which related discontinued operations were presented, as well as our average net investment in discontinued operations since the second half of 2005. Had we disposed of these operations before mid-2005, proceeds would have been applied to reduce parent-supported debt at GE Capital; however, since parent-supported debt at GE Capital was retired in the first half of 2005, we have assumed that any proceeds after that time would have been distributed to shareowners by means of share repurchases, thus reducing average total shareowners’ equity.
| (Dollars in millions) | Twelve months ended December 31 | ||||||||
| 2007 | 2006 | V | % | ||||||
| Growth in Industrial CFOA | |||||||||
| Cash from GE’s operating activities as reported | $ | 23,301 | $ | 23,772 | -2 | % | |||
| Less dividends from GECS | 7,291 | 9,847 | |||||||
| Cash from GE’s operating activities excluding | |||||||||
| dividends from GECS (Industrial CFOA) | $ | 16,010 | $ | 13,925 | 15 | % | |||
Twelve months ended December 31, 2007 | Twelve months ended December 31, 2006 | ||||||||||||||||||||
| GE Industrial Segment Operating Profit Margin | Revenues | Op profit | Op profit | % | Revenues | Op profit | Op profit | % | V pts. | ||||||||||||
| As reported | |||||||||||||||||||||
| Infrastructure | $ | 57,925 | $ | 10,810 | $ | 46,965 | $ | 8,848 | |||||||||||||
| Industrial | 17,725 | 1,743 | 17,741 | 1,602 | |||||||||||||||||
| Healthcare | 16,997 | 3,056 | 16,560 | 3,142 | |||||||||||||||||
| NBC Universal | 15,416 | 3,107 | 16,188 | 2,919 | |||||||||||||||||
| 108,063 | 18,716 | 97,454 | 16,511 | ||||||||||||||||||
| Less the effects of | |||||||||||||||||||||
| Financial services components reported | |||||||||||||||||||||
| in Infrastructure | 7,244 | 1,935 | 6,017 | 1,869 | |||||||||||||||||
| Inter-company transactions | |||||||||||||||||||||
| between GE industrial and financial | |||||||||||||||||||||
| services components | (555 | ) | – | (542 | ) | – | |||||||||||||||
| GE industrial segment operating profit margin | |||||||||||||||||||||
| excluding the effects of the GE industrial | |||||||||||||||||||||
| portion of Corporate items and | |||||||||||||||||||||
| eliminations (segment profit margin) | $ | 101,374 | $ | 16,781 | 16.6 | % | $ | 91,979 | $ | 14,642 | 15.9 | % | 0.7 | ||||||||
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 revenue growth without the effects of acquisitions, dispositions, currency exchange rates and the 2006 Olympics broadcasts; average total shareowners’ equity, excluding effects of discontinued operations; our operating cash flow without the effects of GECS dividends which can also vary from period to period; and GE industrial segment operating profit margin excluding the effects of the GE industrial portion of Corporate items and eliminations.
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