EX-99 2 ex99.htm ex99.htm
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
 
1
 
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.
 
2

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.

* * *

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
 
 
3
 
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


4

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.

 
 
 
 
5
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.

 
 
6
 
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).

 
 
 
7
 
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
  

 
8
 
 
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.
 
 
9
 
 
 
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.
 
 
10