GE 2005 Annual Report Download - page 44

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(44)
The caption “GECS commercial paper interest rate swap adjustment” consists of fair value
changes associated with interest rate swaps that were designated as hedges of our commercial paper program. As
more fully described beginning on page 28, the correction of our financial statements to eliminate the effects of
hedge accounting for these swaps results in recognition in earnings of such fair value changes immediately rather
than over the remaining term of the hedging relationship. Certain amounts included in the line “Other” above are
not allocated to GE operating segments because they are excluded from the measurement of their operating
performance for internal purposes. In 2004, these comprised $0.4 billion of Healthcare charges, principally related to
the write-off of in-process research and development projects and other transitional costs associated with
Amersham; and a $0.1 billion charge at Industrial as the gain on sale of the motors business was more than offset by
costs for inventory obsolescence and other charges. In 2003, amounts not allocated to GE operating segments
included charges of $0.2 billion for settlement of litigation, restructuring and other charges at Healthcare; and $0.1
billion for restructuring and other charges at Industrial.
Changes in Other operating profit (cost) also reflect gains of $0.1 billion and $0.3 billion from partial sales
of an interest in Genpact, in 2005 and 2004, respectively.
DISCONTINUED INSURANCE OPERATIONS
(In millions) 2005 2004 2003
Earnings (loss) from discontinued
operations, net of taxes $(1,922) $ 534 $ 2,057
Discontinued operations comprise the property and casualty insurance and reinsurance businesses and the European
life and health operations of GE Insurance Solutions and most of its affiliates, that we agreed to sell in the fourth
quarter of 2005; and Genworth, our formerly wholly-owned subsidiary that conducted most of our consumer
insurance business, including life and mortgage insurance operations. Results of these businesses are reported as
discontinued operations for all periods presented.
Loss from discontinued operations in 2005 reflected losses from the portions of GE Insurance Solutions
described above ($2.8 billion), partially offset by Genworth earnings ($0.9 billion). GE Insurance Solutions results
will be included in our 2006 discontinued operations to the date of closing, which is expected to be in the second
quarter. Dividends we receive from Genworth and any gains or losses on sales of our remaining 18% position in
Genworth common stock will also be reported in discontinued operations.
Earnings from discontinued operations in 2004 reflected earnings of Genworth ($0.4 billion), including our
share of 2004 earnings from operations ($0.8 billion), partially offset by the loss on the Genworth initial public
offering in May 2004 ($0.3 billion), and GE Insurance Solutions ($0.1 billion), primarily 2004 operations.
For additional information related to discontinued operations see note 2.