GE 2005 Annual Report Download - page 53

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(53)
December 31 (In billions) 2005 2004 2003
Operating cash collections $89.9 $81.6 $68.4
Operating cash payments (76.1) (69.5 ) (58.9)
Cash dividends from GECS 7.8 3.1 3.4
GE cash from operating activities $21.6 $15.2 $12.9
The most significant source of cash in CFOA is customer-related activities, the largest of which is collecting cash
following a product or services sale. GE operating cash collections increased by $8.3 billion during 2005 and by
$13.2 billion during 2004. These increases are consistent with the changes in comparable GE operating segment
revenues, comprising Healthcare, NBC Universal and the industrial businesses of the Industrial and Infrastructure
segments, and which also reflect the effects of the second quarter 2004 acquisition of Amersham and combination of
NBC and VUE. Analyses of operating segment revenues discussed in the preceding Segment Operations section is
the best way of understanding their customer-related CFOA.
The most significant operating use of cash is to pay our suppliers, employees, tax authorities and others for
the wide range of material and services necessary in a diversified global organization. GE operating cash payments
increased in 2005 by $6.6 billion and by $10.6 billion in 2004, comparable to the increases in GE total costs and
expenses, and also reflect the second quarter 2004 acquisition of Amersham and combination of NBC and VUE.
Dividends from GECS represented distribution of a portion of GECS retained earnings, including proceeds
from certain business sales, and are distinct from cash from continuing operating activities within the financial
services businesses, which increased in 2005 by $0.8 billion to $20.9 billion and in 2004 by $6.1 billion to $20.1
billion. The amount we show in CFOA is the total dividend, including the normal dividend as well as any special
dividends from excess capital primarily resulting from GECS business sales. Financial services cash is not
necessarily freely available for alternative uses. For example, use of cash generated by our regulated activities is
often restricted by such regulations. Further, any reinvestment in financing receivables is shown in cash used for
investing activities, not operating activities. Therefore, maintaining or growing financial services assets requires that
we invest much of the cash they generate from operating activities in their earning assets.
Based on past performance and current expectations, in combination with the financial flexibility that
comes with a strong balance sheet and the highest credit ratings, we believe that we are in a sound position to grow
dividends, continue to execute our $25 billion share repurchase program, which is an expansion of the $15 billion
share repurchase program announced in 2004, and continue making selective investments for long-term growth.