GE 2005 Annual Report Download - page 32

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We reported both the portions of GE Insurance Solutions described above and Genworth as discontinued operations
for all periods presented. Unless otherwise indicated, we refer to captions such as revenues and earnings from
continuing operations simply as “revenues” and “earnings” throughout this Management’ s Discussion and Analysis.
Similarly, discussion of other matters in our consolidated financial statements relates to continuing operations unless
otherwise indicated.
WE DECLARED $9.6 BILLION IN DIVIDENDS IN 2005. Per-share dividends of $0.91 were up 11% from
2004, following a 6% increase from the preceding year. In December 2005, our Board of Directors raised our
quarterly dividend 14% to $0.25 per share. We have rewarded our shareowners with over 100 consecutive years of
dividends, with 30 consecutive years of dividend growth, and our dividend growth for the past five years has
significantly outpaced that of companies in the Standard & Poor’ s (S&P) 500 stock index.
Except as otherwise noted, the analysis in the remainder of this section presents the results of GE (with
GECS included on a one-line basis) and GECS. See the Segment Operations section for a more detailed discussion
of the businesses within GE and GECS.
GE SALES OF PRODUCT SERVICES were $27.4 billion in 2005, a 9% increase over 2004. Increases in product
services in 2005 and 2004 were widespread, led by continued strong growth at Infrastructure and Healthcare.
Operating profit from product services was approximately $7.0 billion in 2005, up 14% from 2004, reflecting
ongoing improvements at Infrastructure and Healthcare.
POSTRETIREMENT BENEFIT PLANS reduced pre-tax earnings by $1.7 billion, $1.2 billion and $0.2 billion in
2005, 2004 and 2003, respectively. Costs of our principal pension plans increased over the last three years primarily
because of the effects of:
• Prior years investment losses which reduced pre-tax earnings by $0.5 billion, $0.6 billion and $0.4 billion in
2005, 2004 and 2003, respectively, and
• Lowering pension discount rates which reduced pre-tax earnings by $0.1 billion, $0.4 billion and $0.2 billion in
2005, 2004 and 2003, respectively.
Considering current and expected asset allocations, as well as historical and expected returns on various categories
of assets in which our plans are invested, we have assumed that long-term returns on our principal pension plan
assets would be 8.5% throughout this period and in 2006. U.S. generally accepted accounting principles provide for
recognition of differences between assumed and actual returns over a period no longer than the average future
service of employees.
We believe that our postretirement benefit costs will increase again in 2006 for a number of reasons,
including further reduction in discount rates at December 31, 2005, and continued recognition of prior years
investment losses relating to our principal pension plans.