EX-99 6 ex99.htm EXHIBIT 99 Exhibit 99

Exhibit 99
 
Financial Measures That Supplement Generally Accepted Accounting Principles
General Electric Company and consolidated affiliates
 
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 SEC rules. Specifically, we have referred to:
 
organic revenue growth in the third quarter of 2005
 
Industrial sales growth excluding the effects of the 2004 Olympics broadcasts
 
net revenues (revenues from services less interest expense) of the Commercial Finance and Consumer Finance segments
 
delinquency rates on managed financing receivables of the Commercial Finance and Consumer Finance 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)
2005
 
2004
 
% change
 
                   
Revenues as reported
$
41,927
 
$
38,336
   
9%
 
Less:
                 
Effects of acquisitions, business dispositions (other than
                 
dispositions of businesses acquired for investment) and
                 
currency exchange rates
 
1,368
   
526
       
Insurance business
 
6,776
   
5,544
       
Effects of the 2004 Olympics broadcasts
 
-
   
927
       
Revenues excluding the effects of acquisitions, business
                 
dispositions (other than dispositions of businesses acquired
                 
for investment), currency exchange rates, the Insurance business
                 
and the 2004 Olympics broadcasts (organic revenues)
$
33,783
 
$
31,339
   
8%
 

 

(1)


Industrial sales growth excluding the effects of the 2004 Olympics broadcasts
 
 
Three months
ended September 30
 
(In millions)
2005
 
2004
 
% change
 
                   
Industrial sales as reported
$
21,567
 
$
20,967
   
3%
 
Less:
                 
Effects of the 2004 Olympics broadcasts
 
-
   
927
       
Industrial sales excluding the effects of 2004 Olympics broadcasts
$
21,567
 
$
20,040
   
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 2005 revenue growth without the effects of acquisitions, dispositions and currency exchange rates, without the effects of the Insurance business, whose revenues were adversely affected by the changing economic environment and other factors in the third quarter of 2004, and without the effects of the 2004 Olympics broadcasts which effects have no counterpart in 2005 and, if included would overshadow trends in ongoing, non-Olympics-related broadcast revenues. Similarly, we believe that investors may find it useful to see our third quarter 2005 Industrial sales growth without the effects of the 2004 Olympics broadcasts, which effects have no counterpart in 2005.
 
Net Revenues
 
We provided reconciliations of net revenues to reported revenues for these segments in the Segment Analysis section of Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition of the Form 10-Q. Because net revenues is a common industry measure of margin, these disclosures enable investors to compare the results of our businesses with results of others in the same industry.
 

(2)


Delinquency Rates on Managed Financing Receivables
 
Commercial Finance
 
 
At
 
 
9/30/05(a)
 
12/31/04
 
9/30/04
 
                         
Managed
 
1.24
%
   
1.40
%
   
1.62
%
 
Off-book
 
0.78
     
0.90
     
1.34
   
On-book
 
1.43
     
1.58
     
1.70
   

 
Consumer Finance
 
 
At
 
 
9/30/05(a)
 
12/31/04
 
9/30/04
 
                         
Managed
 
5.23
%
   
4.85
%
   
5.56
%
 
Off-book
 
5.10
     
5.09
     
5.16
   
On-book
 
5.23
     
4.84
     
5.59
   
                         

(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 securitized portfolios, which are relevant to our overall performance.
 
(3)