GE 2005 Annual Report Download - page 20

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Our operations are subject to a variety of bank and consumer protection regulations, including regulations
controlling data privacy. Further, a number of countries have ceilings on rates chargeable to consumers in financial
service transactions. We are subject to competition from various types of financial institutions including commercial
banks, leasing companies, consumer loan companies, independent finance companies, manufacturers’ captive
finance companies, and insurance companies. Industry participants compete on the basis of price, servicing
capability, promotional marketing, risk management, and cross selling. The markets in which we operate are also
subject to the risks from fluctuations in retail sales, interest and currency exchange rates, and the consumer’ s
capacity to repay debt.
Our headquarters are in Stamford, Connecticut and our operations are located in North America, South
America, Europe, Australia and Asia.
Discontinued Operations
On November 18, 2005, we announced that we had entered into an agreement with Swiss Reinsurance Company
(Swiss Re) to sell the property and casualty insurance and reinsurance businesses and the European life and health
operations of GE Insurance Solutions. The transaction is expected to close in the second quarter of 2006, subject to
regulatory approvals and customary closing conditions.
In May 2004, we completed the initial public offering of Genworth, our formerly wholly-owned subsidiary
that conducted most of our consumer insurance business, including life and mortgage insurance operations.
Throughout 2005, we continued to reduce our ownership in Genworth, currently at 18%. We intend to continue to
dispose of our remaining shares in 2006, subject to market conditions.
We reported both the portions of GE Insurance Solutions described above and Genworth as discontinued
operations for all periods presented.
Geographic Data, Exports from the U.S. and Total Global Operations
Geographic data (based on the location of the Company operation supplying goods or services and including exports
from the U.S. to unaffiliated customers) are reported in note 26 to the consolidated financial statements on page 127.
Additional financial data about our exports from the U.S. and total global operations are provided on
pages 45 and 46.
Orders Backlog
See pages 40, 41 and 58 for information about our backlog of unfilled orders.
Research and Development
Total expenditures for research and development were $3,425 million in 2005. Total expenditures were $3,091
million in 2004 and $2,656 million in 2003. Of these amounts, $2,741 million in 2005 was GE-funded ($2,443
million in 2004 and $2,103 million in 2003); and $684 million in 2005 was funded by customers ($648 million in
2004 and $553 million in 2003), principally the U.S. government. Infrastructure’ s Aviation business accounts for the
largest share of GE’ s research and development expenditures from both GE and customer funds. Healthcare and
Infrastructure’ s Energy business also made significant expenditures of GE and customer research and development
funds.