GE 2005 Annual Report Download - page 31

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We have achieved strong growth in our Healthcare and NBC Universal segments with a combination of
organic growth and strategic acquisitions. Healthcare (10% and 11% of consolidated three-year revenues and total
segment profit, respectively) realized benefits of acquisitions of Amersham plc (Amersham) in 2004 and
Instrumentarium in 2003, expanding the breadth of our product and services offerings to the healthcare industry, and
positioning us well for continued growth. NBC Universal (9% and 13% of consolidated three-year revenues and
total segment profit, respectively) has developed into a diversified world-class media company over the last several
years as the combination of NBC with Vivendi Universal Entertainment LLLP (VUE) in 2004 followed successful
acquisitions of Telemundo and Bravo in 2002. NBC Universal revenues and segment profit rose 14% and 21%,
respectively, in 2005, and 88% and 28%, respectively, in 2004, largely on acquisitions. We expect the technology
and business model for the entertainment media industry to continue to evolve in the coming years and believe that
NBC Universal is well positioned to compete in this challenging environment.
Commercial Finance and Consumer Finance (together, 26% and 31% of consolidated three-year revenues
and total segment profit, respectively) are large, profitable growth businesses in which we continue to invest with
confidence. In a challenging economic environment, these businesses grew earnings by a combined $1.3 billion and
$1.0 billion in 2005 and 2004, respectively. Commercial Finance and Consumer Finance have delivered strong
results through solid core growth, disciplined risk management and successful acquisitions. The most significant
acquisitions affecting Commercial Finance and Consumer Finance results in 2005 were the commercial lending
business of Transamerica Finance Corporation; WMC Finance Co. (WMC), a U.S. wholesale mortgage lender;
Australian Financial Investments Group (AFIG), a residential mortgage lender in Australia; and the Transportation
Financial Services Group of CitiCapital. These acquisitions collectively contributed $1.9 billion and $0.2 billion to
2005 revenues and net earnings, respectively.
Overall, acquisitions contributed $9.6 billion, $12.3 billion and $5.4 billion to consolidated revenues in
2005, 2004 and 2003, respectively. Our consolidated net earnings in 2005, 2004 and 2003 included approximately
$0.9 billion, $1.2 billion and $0.5 billion, respectively, from acquired businesses. We integrate acquisitions as
quickly as possible. Only revenues and earnings from the date we complete the acquisition through the end of the
fourth following quarter are attributed to such businesses. Dispositions also affected our operations through lower
revenues of $2.0 billion, $3.0 billion and $2.3 billion in 2005, 2004 and 2003, respectively. This resulted in lower
earnings of $0.1 billion and $0.5 billion in 2005 and 2004, respectively, and higher earnings of $0.2 billion in 2003.
Significant matters relating to our Statement of Earnings are explained below.
INSURANCE EXIT. In 2005, we reduced our exposure to insurance in a disciplined fashion and our exit is now in
sight.
• 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 Financial, Inc. (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.