GE 2005 Annual Report Download - page 65

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(65)
December 31 (In millions)
2005
(Restated)
2004
(Restated)
2003
(Restated)
2002
(Restated)
2001
(Restated)
Average total shareowners’ equity(b) – as restated $111,706 $ 95,711 $ 71,342 $ 59,154 $ 52,678
Less:
Cumulative effect of losses from
discontinued operations(c)
3,094 2,980 925 1,007 226
Average net investment in discontinued
operations(d)
4,620
–
–
Average total shareowners’ equity,
excluding effects of discontinued
operations(a)– as restated $103,992 $ 92,731 $ 70,417 $ 58,147 $ 52,452
(a) Used for computing return on average shareowners’ equity and return on average total capital invested shown on pages 26 and 27.
(b) On an annual basis, calculated using a five-point average.
(c) Represented the average cumulative net earnings effects of discontinued operations from 2001 to 2005 (on an annual basis, calculated
using a five-point average).
(d) Represented the average net investment in discontinued operations for the second half of 2005 only-see below.
U.S. GAAP requires earnings of discontinued operations to be displayed separately in the Statement of Earnings.
Accordingly, the numerators used in our calculations of returns on average shareowners’ equity and average total
capital invested presented in Selected Financial Data on pages 26 and 27 exclude those earnings (losses). Further we
believe it is appropriate to exclude from the denominators, specifically the average total shareowners’ equity
component, the cumulative effect of those earnings (losses) since 2000 for each of the five years for which such
returns are presented, as well as our average net investment in discontinued operations for the second half of 2005
only. Had we disposed of these operations before mid-2005, proceeds would have been applied to reduce parent-
supported debt at GE Capital; however since parent-supported debt at GE Capital was retired in the first half of
2005, we have assumed that any proceeds after that time would have been distributed to shareowners by means of
share repurchases, thus reducing average total shareowners’ equity.
Definitions indicating how the above-named ratios are calculated using average total shareowners’ equity,
excluding effects of discontinued operations, can be found on page 27.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
See pages 51 and 52.
Item 8. Financial Statements and Supplementary Data
Report of Independent Registered Public Accounting Firm
To Shareowners and Board of Directors of General Electric Company
We have audited the accompanying statement of financial position of General Electric Company and consolidated
affiliates (“GE”) as of December 31, 2005 and 2004, and the related statements of earnings, changes in shareowners’
equity and cash flows for each of the years in the three-year period ended December 31, 2005. These consolidated
financial statements are the responsibility of GE management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.