GE 2005 Annual Report Download - page 46

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GECS global revenues were $29.7 billion, $25.2 billion and $21.3 billion in 2005, 2004 and 2003,
respectively. GECS revenues in the Pacific Basin increased 28% in 2005, primarily as a result of the acquisition of
AFIG at Consumer Finance and organic revenue growth at Consumer Finance and Commercial Finance. GECS
revenues increased 25% in Europe primarily as a result of higher investment income (largely offset by policyholder
dividends) at our insurance activities, and organic revenue growth and acquisitions at Consumer Finance and
Commercial Finance. Revenues in Other Global decreased 4% primarily as a result of the absence of a current-year
counterpart to the 2004 gain on the sale of a majority interest in Genpact, partially offset by organic revenue growth
at the financial services businesses in Infrastructure.
Global operating profit was $12.7 billion in 2005, an increase of 20% over 2004, which was 35% higher
than in 2003. GE global operating profit in 2005 rose 30% reflecting solid growth in Europe and Other Global,
mainly at Infrastructure.
Total assets of global operations on a continuing basis were $299.4 billion in 2005, an increase of $2.8
billion, or 1%, over 2004. GECS global assets on a continuing basis of $261.9 billion at the end of 2005 were 1%
higher than at the end of 2004, reflecting acquisitions and core growth, almost fully offset by the recently
strengthening U.S. dollar.
Financial results of our global activities reported in U.S. dollars are affected by currency exchange. We use
a number of techniques to manage the effects of currency exchange, including selective borrowings in local
currencies and selective hedging of significant cross-currency transactions. Such principal currencies are the pound
sterling, the euro, the Japanese yen and the Canadian dollar.
Environmental Matters
Our operations, like operations of other companies engaged in similar businesses, involve the use, disposal and
cleanup of substances regulated under environmental protection laws.
We are involved in a sizable number of remediation actions to clean up hazardous wastes as required by
federal and state laws. Such statutes require that responsible parties fund remediation actions regardless of fault,
legality of original disposal or ownership of a disposal site. Expenditures for site remediation actions amounted to
$0.1 billion in each of the last two years. We presently expect that such remediation actions will require average
annual expenditures in the range of $0.2 billion to $0.3 billion over the next two years.
The U.S. Environmental Protection Agency (EPA) ruled in February 2002 that approximately 150,000
pounds of polychlorinated biphenyls (PCBs) must be dredged from a 40-mile stretch of the upper Hudson River in
New York state. On October 6, 2005, GE and the EPA entered into and filed in the U.S. District Court for the
Northern District of New York a consent decree that, subject to approval of that court, represents a comprehensive
framework for implementation of the EPA’ s 2002 decision to dredge PCB-containing sediments in the upper
Hudson River. The dredging will be performed in two phases with an intervening peer review of performance after
phase 1. Under this consent decree, we have committed up to $0.1 billion to reimburse the EPA for its past and
future project oversight costs and agreed to perform the first phase of dredging. We further committed that, subject
to future agreement with the EPA about completion of dredging after completion of phase 1 and the peer review, we
will be responsible for further costs, including costs of phase 2 dredging. Our Statement of Financial Position as of
December 31, 2005 and 2004, included liabilities for the estimated costs of this remediation.