GE Reports Strong Second-Quarter 2006 Financial Results with 15% EPS Growth, 9% Revenue Growth and Record Cash Flow.FAIRFIELD Fairfield. 1 City (1990 pop. 12,200), Jefferson co., N central Ala., an industrial suburb of Birmingham; inc. 1919. Founded (1910) by the United States Steel Corp., its steel industry has greatly declined, negatively affecting the city's economy. , Conn. -- Financial Highlights (Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the ): E[acute accent acute accent n. A mark (´) indicating: a. that a vowel is close or tense, as é in French été. b. that a vowel or syllable has a high or rising pitch, as in Chinese or Ancient Greek. c. ]--Revenues of $39.9 billion, up 9%; Organic revenue growth of 8% E[acute accent]--Earnings of $4.9 billion, up 11%; earnings per share (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) of $.47, up 15% E[acute accent]--Total orders up 17% E[acute accent]--Five of six businesses deliver double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. earnings growth E[acute accent]--First-half cash from operating activities (CFOA CFOA Chief Fire Officers’ Association (UK Office of the Deputy Prime Minister Fire and Rescue National Framework) CFOA Cash Flow from Operating Activities CFOA Chief Financial Officer's Act of 1990 ) up 78% to $14.3 billion; Industrial CFOA up 9% E[acute accent]--Return on average total capital (ROTC) increasing 2 points to 17.6% E[acute accent]GE announced today record second-quarter 2006 earnings from continuing operations of $4.9 billion or $.47 per share, up 11% and 15%, respectively, from second-quarter 2005. Revenues from continuing operations were also a record $39.9 billion, up 9% from last year's second quarter. First-half cash from GE's operating activities was a record $14.3 billion, up 78%. E[acute accent]"We continue to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution our strategy," said GE Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Jeff Immelt. "We are generating consistently strong earnings growth, with EPS up 15%. Our returns are expanding, with ROTC up 2 points. And we are improving our businesses by leveraging our growth initiatives. E[acute accent]"Our solid quarterly results were highlighted by strong top- top- pref. Variant of topo-. and bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. growth at Commercial Finance, demand for our products and services at Infrastructure and strong profitability at Healthcare, Consumer Finance and Industrial," said Immelt. "We are making good progress at NBC Universal NBC Universal is a media and entertainment company formed in May 2004 by the combination of General Electric's NBC with Vivendi Universal Entertainment (part of the French Media Group, Vivendi SA). GE owns 80% of NBC Universal with the remaining 20% owned by Vivendi SA. , which continues to improve with increasing ratings and a diversified diversified (di·verˑ·s business model of content leveraged across all delivery platforms. E[acute accent]"This is our sixth straight quarter of organic revenue growth that meets our goal of 2-3X GDP GDP (guanosine diphosphate): see guanine. . This consistent performance demonstrates the quality of our businesses and the excellence of our execution," added Immelt. "We see this string continuing. Total company orders were up 17% for the quarter, showing strong future demand for our products and services. Orders for equipment increased 33%, including a 59% surge See power surge. SURGE - Sorter, Updater, Report Generator, Etc. IBM 704, 1959. Sammet 1969, p.8. in Infrastructure orders, while services orders increased 13%," added Immelt. E[acute accent]"In addition, our businesses are producing healthy cash flows. For the first half, we generated $14.3 billion in CFOA, an increase of 78% over the same period of last year, with the inclusion of the $5.7 billion proceeds from the sale of Insurance Solutions and our final stake in Genworth. Industrial CFOA increased 9% to $6.7 billion. We used our cash to fund the businesses, pay our dividends and acquire 176 million shares of GE common stock. Through the first half of this year, we have funded $6 billion of the $7-9 billion stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. we have planned for 2006." E[acute accent]Second-Quarter 2006 Financial Highlights: E[acute accent]Earnings from continuing operations were $4.854 billion, up 11% from $4.376 billion in second quarter 2005. EPS from continuing operations were $.47, up 15% from last year's $.41. Five of six businesses contributed double-digit earnings growth for the quarter. E[acute accent]Continuing revenues of $39.9 billion were 9% higher than last year's $36.5 billion. Industrial sales increased 9% to $24.4 billion, reflecting core growth. Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. revenues grew 10% over last year to $15.3 billion, reflecting core growth and the effects of acquisitions. E[acute accent]Cash generated from GE's operating activities in the first six months of 2006 totaled $14.3 billion compared with $8.0 billion last year, reflecting a $5.8 billion increase in GE Capital Services' dividends, substantially all of which was proceeds from sales of insurance businesses, and a 9% increase from the industrial businesses. E[acute accent]Loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. was $2 million for the quarter and included the results of Genworth, the final transaction for GE Insurance Solutions, and GE Life, which is in the process of being sold. Accordingly second-quarter 2006 net EPS were $.47, up 7% from the second quarter of 2005. E[acute accent]"We are focused on sustained execution and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. performance. We have a strong set of businesses managed by great people in many of the best markets in the world. Our goals are to generate organic revenue growth of 2-3X GDP, deliver 10%+ earnings growth and expand ROTC to 20% by 2008. For the third quarter, we expect double-digit segment profit growth in five of our six businesses and EPS from continuing operations of $.48-.50, up 12-16%. We are reaffirming our full-year 2006 guidance of earnings from continuing operations increasing 13-17% to $1.94-2.02," said Immelt. E[acute accent]GE will discuss second quarter results on a conference call and Webcast at 8:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today. Call information is available at www.ge.com/investor, and related charts will be posted there prior to the call. E[acute accent]GE (NYSE NYSE See: New York Stock Exchange : 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, media content and advanced materials Advanced Materials is a leading peer-reviewed materials science journal published every two weeks. Advanced Materials includes Communications, Reviews, and Feature Articles from the cutting edge of materials science, including topics in chemistry, physics, , 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. E[acute accent]Caution Concerning Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. E[acute accent]Results are preliminary and unaudited. 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 "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties which could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest rates and commodity prices; strategic actions, including 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; unanticipated loss development in our insurance businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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.
GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
Consolidated
----------------------------
Three months ended June 30 2006 2005 V%
-------------------------------------- ----------- ---------- -----
Revenues
Sales of goods and services $24,897 $22,989
GECS earnings from continuing operations - -
GECS revenues from services 14,346 12,954
Other income 657 596
----------- ----------
Total revenues 39,900 36,539 9%
----------- ----------
Costs and expenses
Cost of sales, operating and
administrative expenses 27,549 25,337
Interest and other financial charges 4,533 3,786
Investment contracts, insurance losses and
insurance annuity benefits 793 799
Provision for losses on financing
receivables 896 958
Minority interest in net earnings of
consolidated affiliates 235 290
----------- ----------
Total costs and expenses 34,006 31,170 9%
----------- ----------
Earnings from continuing operations before
income taxes 5,894 5,369 10%
Provision for income taxes (1,040) (993)
----------- ----------
Earnings from continuing operations 4,854 4,376 11%
Earnings (loss) from discontinued
operations, net of taxes (2) 271
----------- ----------
Net earnings $4,852 $4,647 4%
=========== ==========
Per-share amounts - earnings from
continuing operations
Diluted earnings per share $0.47 $0.41 15%
Total average equivalent shares 10,400 10,650 (2)%
Basic earnings per share $0.47 $0.41 15%
Total average equivalent shares 10,362 10,604 (2)%
Per-share amounts - net earnings
Diluted earnings per share $0.47 $0.44 7%
Total average equivalent shares 10,400 10,644 (2)%
Basic earnings per share $0.47 $0.44 7%
Total average equivalent shares 10,362 10,599 (2)%
Dividends declared per share $0.25 $0.22 14%
Financial Services
GE (GECS)
---------------------- -------------------
Three months ended June 30 2006 2005 V% 2006 2005 V%
-------------------------- --------- -------- --- ------- ------- ---
Revenues
Sales of goods and
services $24,448 $22,408 $712 $664
GECS earnings from
continuing operations 2,500 2,028 - -
GECS revenues from
services - - 14,595 13,297
Other income 695 624 - -
--------- -------- ------- -------
Total revenues 27,643 25,060 10% 15,307 13,961 10%
--------- -------- ------- -------
Costs and expenses
Cost of sales, operating
and administrative
expenses 21,394 19,316 6,512 6,271
Interest and other
financial charges 486 336 4,202 3,603
Investment contracts,
insurance losses and
insurance annuity benefits - - 831 850
Provision for losses on
financing receivables - - 896 958
Minority interest in net
earnings of consolidated
affiliates 186 249 49 41
--------- -------- ------- -------
Total costs and
expenses 22,066 19,901 11% 12,490 11,723 7%
--------- -------- ------- -------
Earnings from continuing
operations before income
taxes 5,577 5,159 8% 2,817 2,238 26%
Provision for income taxes (723) (783) (317) (210)
--------- -------- ------- -------
Earnings from continuing
operations 4,854 4,376 11% 2,500 2,028 23%
Earnings (loss) from
discontinued operations,
net of taxes (2) 271 (2) 271
--------- -------- ------- -------
Net earnings $4,852 $4,647 4% $2,498 $2,299 9%
========= ======== ======= =======
Per-share amounts -
earnings from continuing
operations
Diluted earnings per share
Total average equivalent
shares
Basic earnings per share
Total average equivalent
shares
Per-share amounts - net
earnings
Diluted earnings per share
Total average equivalent
shares
Basic earnings per share
Total average equivalent
shares
Dividends declared per
share
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 2005 consolidated
financial statements at www.ge.com/annual05 for further information
about consolidation matters.
GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
Consolidated
----------------------------
Six months ended June 30 2006 2005 V%
---------------------------------------- ----------- ---------- -----
Revenues
Sales of goods and services $48,381 $44,394
GECS earnings from continuing operations - -
GECS revenues from services 28,232 25,582
Other income 1,108 913
----------- ----------
Total revenues 77,721 70,889 10%
----------- ----------
Costs and expenses
Cost of sales, operating and
administrative expenses 54,247 49,727
Interest and other financial charges 8,894 7,457
Investment contracts, insurance losses and
insurance annuity benefits 1,542 1,626
Provision for losses on financing
receivables 1,718 1,860
Minority interest in net earnings of
consolidated affiliates 473 506
----------- ----------
Total costs and expenses 66,874 61,176 9%
----------- ----------
Earnings from continuing operations before
income taxes 10,847 9,713 12%
Provision for income taxes (1,951) (1,777)
----------- ----------
Earnings from continuing operations 8,896 7,936 12%
Earnings from discontinued operations, net
of taxes 261 676
----------- ----------
Net earnings $9,157 $8,612 6%
=========== ==========
Per-share amounts - earnings from
continuing operations
Diluted earnings per share $0.85 $0.75 13%
Total average equivalent shares 10,441 10,644 (2)%
Basic earnings per share $0.86 $0.75 15%
Total average equivalent shares 10,403 10,599 (2)%
Per-share amounts - net earnings
Diluted earnings per share $0.88 $0.81 9%
Total average equivalent shares 10,441 10,644 (2)%
Basic earnings per share $0.88 $0.81 9%
Total average equivalent shares 10,403 10,599 (2)%
Dividends declared per share $0.50 $0.44 14%
Financial Services
GE (GECS)
---------------------- -------------------
Six months ended June 30 2006 2005 V% 2006 2005 V%
-------------------------- --------- -------- --- ------- ------- ---
Revenues
Sales of goods and
services $47,534 $43,241 $1,267 $1,338
GECS earnings from
continuing operations 4,770 3,891 - -
GECS revenues from
services - - 28,721 26,228
Other income 1,174 954 - -
--------- -------- ------- -------
Total revenues 53,478 48,086 11% 29,988 27,566 9%
--------- -------- ------- -------
Costs and expenses
Cost of sales, operating and
administrative expenses 42,095 37,636 12,748 12,596
Interest and other
financial charges 870 717 8,309 7,017
Investment contracts,
insurance losses and
insurance annuity benefits - - 1,636 1,716
Provision for losses on
financing receivables - - 1,718 1,860
Minority interest in net
earnings of consolidated
affiliates 349 435 124 71
--------- -------- ------- -------
Total costs and
expenses 43,314 38,788 12% 24,535 23,260 5%
--------- -------- ------- -------
Earnings from continuing
operations before income
taxes 10,164 9,298 9% 5,453 4,306 27%
Provision for income taxes (1,268) (1,362) (683) (415)
--------- -------- ------- -------
Earnings from continuing
operations 8,896 7,936 12% 4,770 3,891 23%
Earnings from discontinued
operations, net of taxes 261 676 261 676
--------- -------- ------- -------
Net earnings $9,157 $8,612 6% $5,031 $4,567 10%
========= ======== ======= =======
Per-share amounts -
earnings from continuing
operations
Diluted earnings per share
Total average equivalent
shares
Basic earnings per share
Total average equivalent
shares
Per-share amounts - net
earnings
Diluted earnings per share
Total average equivalent
shares
Basic earnings per share
Total average equivalent
shares
Dividends declared per
share
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 2005 consolidated
financial statements at www.ge.com/annual05 for further information
about consolidation matters.
GENERAL ELECTRIC COMPANY
Summary of Operating Segments (unaudited)
Three Months Six Months
Ended June 30 Ended June 30
---------------------- ----------------------
(Dollars in millions) 2006 2005 V% 2006 2005 V%
---------------------- ----------------------
Revenues
Infrastructure $11,332 $10,221 11 $21,484 $19,595 10
Industrial 8,788 8,253 6 16,928 15,921 6
Healthcare 4,156 3,768 10 7,815 7,089 10
NBC Universal 3,858 3,858 - 8,340 7,459 12
Commercial Finance 5,527 4,929 12 11,011 10,001 10
Consumer Finance 5,268 4,928 7 10,358 9,617 8
----------------- -----------------
Total segment
revenues 38,929 35,957 8 75,936 69,682 9
Corporate items and
eliminations 971 582 67 1,785 1,207 48
----------------- -----------------
Consolidated revenues
from continuing
operations $39,900 $36,539 9 $77,721 $70,889 10
================= =================
Segment profit (a)
Infrastructure $2,107 $1,916 10 $3,810 $3,456 10
Industrial 729 635 15 1,329 1,161 14
Healthcare 795 672 18 1,291 1,081 19
NBC Universal 882 979 (10) 1,536 1,688 (9)
Commercial Finance 1,057 872 21 2,231 1,798 24
Consumer Finance 880 735 20 1,716 1,470 17
----------------- -----------------
Total segment profit 6,450 5,809 11 11,913 10,654 12
Corporate items and
eliminations (387) (314) (23) (879) (639) (38)
GE interest and other
financial charges (486) (336) (45) (870) (717) (21)
GE provision for income
taxes (723) (783) 8 (1,268) (1,362) 7
----------------- -----------------
Earnings from continuing
operations $4,854 $4,376 11 $8,896 $7,936 12
----------------- -----------------
Earnings (loss) from
discontinued operations,
net of taxes $(2) $271 U $261 $676 (61)
----------------- -----------------
Consolidated net earnings $4,852 $4,647 4 $9,157 $8,612 6
================= =================
(a) 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 refer to as
"operating profit," for Healthcare, NBC Universal, and the
industrial businesses of the Industrial and Infrastructure
segments; included in determining segment profit, which we refer
to as "net earnings," for Commercial Finance, Consumer Finance,
and the financial services businesses of the Industrial segment
(Equipment Services) and Infrastructure segment (Aviation
Financial Services, Energy Financial Services and Transportation
Finance).
GENERAL ELECTRIC COMPANY
Summary of Operating Segments (unaudited)
Additional Information
Three Months Six Months
Ended June 30 Ended June 30
---------------------- ---------------------
(Dollars in millions) 2006 2005 V% 2006 2005 V%
---------------------- ---------------------
Infrastructure
Revenues $11,332 $10,221 11 $21,484 $19,595 10
================= =================
Segment profit $2,107 $1,916 10 $3,810 $3,456 10
================= =================
Revenues
Aviation $3,291 $2,971 11 $6,332 $5,561 14
Aviation Financial
Services 981 819 20 1,915 1,636 17
Energy 4,442 3,884 14 8,277 7,835 6
Energy Financial
Services 364 382 (5) 665 610 9
Oil & Gas 1,094 763 43 1,866 1,404 33
Transportation 1,002 892 12 2,025 1,648 23
Segment profit
Aviation $728 $690 6 $1,373 $1,217 13
Aviation Financial
Services 310 185 68 516 348 48
Energy 689 625 10 1,125 1,202 (6)
Energy Financial
Services 146 179 (18) 263 273 (4)
Oil & Gas 108 75 44 163 102 60
Transportation 165 101 63 369 183 F
Industrial
Revenues $8,788 $8,253 6 $16,928 $15,921 6
================= =================
Segment profit $729 $635 15 $1,329 $1,161 14
================= =================
Revenues
Consumer & Industrial $3,852 $3,576 8 $7,386 $6,837 8
Equipment Services 1,797 1,652 9 3,431 3,226 6
Plastics 1,684 1,640 3 3,328 3,288 1
Segment profit
Consumer & Industrial $318 $227 40 $538 $392 37
Equipment Services 60 36 67 76 46 65
Plastics 183 208 (12) 408 448 (9)
Commercial Finance
Revenues $5,527 $4,929 12 $11,011 $10,001 10
================= =================
Segment profit $1,057 $872 21 $2,231 $1,798 24
================= =================
Revenues
Capital Solutions $3,047 $2,856 7 $5,867 $5,745 2
Real Estate 1,047 744 41 2,122 1,642 29
Segment profit
Capital Solutions $433 $325 33 $772 $611 26
Real Estate 334 240 39 775 550 41
GENERAL ELECTRIC COMPANY
Condensed Statement of Financial Position
(Dollars in billions)
Consolidated
--------------------
Assets 06/30/06 12/31/05
--------------------
Cash & marketable securities $56.1 $51.0
Receivables 12.0 14.9
Inventories 11.7 10.5
GECS financing receivables - net 303.9 287.6
Property, plant & equipment - net 71.0 67.5
Investment in GECS - -
Goodwill & intangible assets 85.6 81.6
Other assets 107.0 99.1
Assets of discontinued operations 15.1 61.1
--------- ---------
Total assets $662.4 $673.3
========= =========
Liabilities and equity
Borrowings $394.4 $370.4
Insurance reserves 34.5 33.1
Other liabilities & minority interest 109.7 110.9
Liabilities of discontinued operations 15.0 49.5
Shareowners' equity 108.8 109.4
--------- ---------
Total liabilities and equity $662.4 $673.3
========= =========
(Dollars in billions)
Financial Services
GE (GECS)
----------------- -------------------
Assets 06/30/06 12/31/05 06/30/06 12/31/05
-------- -------- --------- ---------
Cash & marketable securities $2.2 $2.5 $54.0 $48.8
Receivables 12.3 15.1 - -
Inventories 11.6 10.3 0.2 0.2
GECS financing receivables -
net - - 303.9 287.6
Property, plant & equipment -
net 16.7 16.5 54.3 51.0
Investment in GECS 48.6 50.8 - -
Goodwill & intangible assets 60.7 57.8 24.9 23.8
Other assets 36.6 36.8 75.9 68.1
Assets of discontinued
operations - - 15.1 61.1
-------- ------- --------- ---------
Total assets $188.7 $189.8 $528.3 $540.6
======== ======= ========= =========
Liabilities and equity
Borrowings $10.6 $10.2 $385.4 $362.1
Insurance reserves - - 34.9 33.4
Other liabilities & minority
interest 69.3 70.2 44.4 44.5
Liabilities of discontinued
operations - - 15.0 49.8
Shareowners' equity 108.8 109.4 48.6 50.8
-------- ------- --------- ---------
Total liabilities and equity $188.7 $189.8 $528.3 $540.6
======== ======= ========= =========
June 30, 2006 information is unaudited. Supplemental consolidating
data are shown for "GE" and "Financial Services (GECS)." Transactions
between GE and GECS have been eliminated from the "consolidated"
columns. See note 1 to the 2005 consolidated financial statements at
www.ge.com/annual05 for further information about consolidation
matters.
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 months ended
June 30, 2006, compared with the three months ended June 30, 2005, the
increase in cash from operating activities from our industrial
businesses (or Industrial CFOA) for the six months ended June 30,
2006, compared with the six months ended June 30, 2005 and return on
average total capital invested (ROTC), which is calculated using
average total shareowners' equity, excluding effects of discontinued
operations. The reasons we use these non-GAAP financial measures and
their reconciliation to their most directly comparable GAAP financial
measures follow.
(Dollars in millions)
Three months
ended June 30
----------------------
Organic Revenue Growth 2006 2005 V%
---------------------- -------- -------- ---
GE consolidated continuing revenues as reported $39,900 $36,539 9%
Less the effects of:
Acquisitions, business dispositions (other
than dispositions of businesses acquired for
investment) and currency exchange rates 679 329
GE consolidated revenues excluding the effects
of acquisitions, business dispositions (other
than dispositions of businesses acquired for
investment) and currency exchange rates -----------------
(organic revenues) $39,221 $36,210 8%
=================
Six months
ended June 30
----------------------
Growth in Industrial CFOA 2006 2005 V%
------------------------- -------- -------- ---
Cash from GE's operating activities as reported $14,323 $8,027 78%
Less: GECS dividends 7,590 1,839
-----------------
Cash from GE's operating activities excluding
dividends from GECS (Industrial CFOA) $6,733 $6,188 9%
=================
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 2006 growth in revenues without the effects of acquisitions,
business dispositions and currency exchange rates. We also believe
that investors would find it useful to compare our operating cash flow
for the six months ended June 30, 2006, to the operating cash flow for
the six months ended June 30, 2005, without the effect of GECS
dividends, which can vary from period-to-period.
Three months
ended June 30
Average Total Shareowners' Equity, Excluding -------------------
Effects of Discontinued Operations (a) 2006 2005
-------------------------------------------- --------- ---------
Average total shareowners' equity (b) $110,196 $107,367
Less:
Cumulative effect of earnings from discontinued
operations (c) 761 3,344
Average net investment in discontinued
operations (d) 7,001 -
-------------------
Average total shareowners' equity, excluding
effect of discontinued operations (a) $102,434 $104,023
===================
(a) Used for computing return on average total capital invested
(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
twelve-month basis, calculated using a five-point average).
(b) On a twelve-month basis, calculated using a five-point average.
(c) Represented the average cumulative net earnings effect of
discontinued operations from 2001 through the first half of 2005 (on a
twelve-month basis, calculated using a five-point average).
(d) Represented the average net investment in discontinued operations
since the second half of 2005.
U.S. GAAP requires earnings of discontinued operations to be displayed
separately in the Statement of Earnings. Accordingly, the numerator
used in our calculation of return on average total capital invested
excludes those earnings (losses). Further we believe it is appropriate
to exclude from the average shareowners' equity component of the
denominator the cumulative effect of those earnings (losses) since
2000 (reclassifications for discontinued operations began in 2001), 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.
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion