GE 2005 Annual Report Download - page 47

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(47)
Financial Resources and Liquidity
This discussion of financial resources and liquidity addresses the Statement of Financial Position, the Statement of
Changes in Shareowners’ Equity, the Statement of Cash Flows, Contractual Obligations, Off-Balance Sheet
Arrangements, and Debt Instruments, Guarantees and Covenants.
The fundamental differences between GE and GECS are reflected in the measurements commonly used by
investors, rating agencies and financial analysts. These differences will become clearer in the discussion that follows
with respect to the more significant items in the financial statements.
Overview of Financial Position
Major changes in our financial position resulted from the following:
• In the fourth quarter of 2005, we announced the planned sale of most of GE Insurance Solutions and completed
a Genworth secondary public offering, which reduced our ownership in Genworth from 27% to 18%. We have
separately reported the assets and liabilities related to these discontinued operations for all periods presented.
• Our discontinued operations assets and liabilities decreased by $83.4 billion on September 27, 2005, when we
reduced our ownership of Genworth to 27%, a level of investment that is reported as an associated company. As
an associated company, our ongoing interest in Genworth operating results were presented on a one-line basis.
This deconsolidation had a significant effect on our assets and liabilities of discontinued operations.
• During 2005, we completed the acquisitions of Edwards Systems Technology at Industrial and Ionics, Inc. at
Infrastructure. GECS completed acquisitions of the Transportation Financial Services Group of CitiCapital, the
Inventory Finance division of Bombardier Capital, Antares Capital Corp., a unit of Massachusetts Mutual Life
Insurance Co., and ING’ s portion of Heller AG.
• The U.S. dollar was stronger at December 31, 2005, than it was at December 31, 2004, reducing the translated
levels of our non-U.S. dollar assets and liabilities. However, on average, the U.S. dollar in 2005 has been
weaker than during the comparable 2004 period, resulting in increases in reported levels of non-U.S. dollar
operations as noted in the preceding Operations section.
• Minority interest in equity of consolidated affiliates decreased $4.5 billion during 2005 principally from
settlement of the VUE preferred interests and our acquisition of the previously outstanding minority interest in
VUE common stock (together $1.9 billion), and redemption of preferred stock at General Electric Capital
Corporation (GE Capital) ($2.5 billion). See notes 16 and 22.
Statement of Financial Position
Because GE and GECS share certain significant elements of their Statements of Financial Position-property, plant
and equipment and borrowings, for example-the following discussion addresses significant captions in the
“consolidated” statement. Within the following discussions, however, we distinguish between GE and GECS
activities in order to permit meaningful analysis of each individual consolidating statement.