GE 2006 Annual Report Download - page 56

’   
Infrastructure revenues rose 12%, or $4.4 billion, in 2005
as higher volume ($4.3 billion) was partially offset by lower
prices ($0.6 billion) at the industrial businesses in the segment.
The increase in volume was primarily at Energy, Aviation and
Transportation. The decrease in prices was primarily at Energy
and was partially offset by increased prices at Transportation
and Aviation. Revenues also increased as a result of organic
revenue growth at Energy Financial Services ($0.4 billion) and
Aviation Financial Services ($0.3 billion).
Segment profit rose 14% to $7.8 billion in 2005, compared with
$6.8 billion in 2004, as higher volume ($1.0 billion) and productiv-
ity ($0.2 billion including customer settlements and contract
terminations) more than offset lower prices ($0.6 billion) and the
effects of higher material and other costs ($0.3 billion) at the
industrial businesses in the segment. The increase in volume
primarily related to Energy, Aviation and Transportation. Segment
profit also increased as a result of increased net earnings at the
financial services businesses. This increase refl ected core growth
at Energy Financial Services ($0.3 billion) and core growth at
Aviation Financial Services ($0.2 billion), including growth in lower-
taxed earnings from global operations related to a reorganization
of our aircraft leasing operations.
Infrastructure orders were $51.1 billion in 2006, up from
$38.4 billion in 2005. The $39.2 billion total backlog at year-end
2006 comprised unfilled product orders of $27.0 billion (of which
59% was scheduled for delivery in 2007) and product services
orders of $12.2 billion scheduled for 2007 delivery. Comparable
December 31, 2005, total backlog was $29.2 billion, of which
$18.8 billion was for unfilled product orders and $10.4 billion for
product services orders.
COMMERCIAL FINANCE
(In millions) 2006 2005 2004
REVENUES
SEGMENT PROFIT
$23,792
$ 5,028
$20,646
$ 4,290
$19,524
$ 3,570
December 31 (In millions)
TOTAL ASSETS
2006
$233,536
2005
$190,546
(In millions)
REVENUES
Capital Solutions
Real Estate
SEGMENT PROFIT
Capital Solutions
Real Estate
2006
$12,356
5,020
$ 1,727
1,841
2005
$11,476
3,492
$ 1,515
1,282
2004
$11,503
3,084
$ 1,325
1,124
December 31 (In millions)
ASSETS
Capital Solutions
Real Estate
2006
$94,523
53,786
2005
$87,306
35,323
Commercial Finance revenues and net earnings increased 15%
and 17% in 2006, respectively, compared with 2005. Revenues
during 2006 and 2005 included $1.0 billion and $0.1 billion from
acquisitions, respectively, and in 2006 were reduced by $0.1 billion
as a result of dispositions. Revenues for 2006 also increased as a
result of organic revenue growth ($2.5 billion). The increase in
net earnings resulted primarily from core growth ($0.6 billion),
including growth in lower-taxed earnings from global operations,
and acquisitions ($0.1 billion).
Real Estate assets increased $18.5 billion (52%), of which
$12.4 billion was real estate investments, up 76%. Real Estate
net earnings increased 44% compared with 2005, primarily as a
result of a $0.6 billion increase in net earnings from real estate
investments.
Commercial Finance revenues and net earnings increased 6%
and 20% in 2005, respectively, compared with 2004. Revenues
during 2005 and 2004 included $1.0 billion and $0.3 billion from
acquisitions, respectively, and in 2005 were reduced by $0.7 billion
as a result of dispositions. Revenues during 2005 also increased
$1.1 billion as a result of organic revenue growth ($0.8 billion) and
the weaker U.S. dollar ($0.3 billion). The increase in net earnings
resulted primarily from core growth ($0.6 billion), including growth
in lower-taxed earnings from global operations, acquisitions
($0.2 billion) and the weaker U.S. dollar ($0.1 billion), partially offset
by lower securitizations ($0.1 billion).
GE MONEY
(In millions) 2006 2005 2004
REVENUES
SEGMENT PROFIT
$21,759
$ 3,507
$19,416
$ 3,050
$15,734
$ 2,520
December 31 (In millions)
TOTAL ASSETS
2006
$190,403
2005
$158,829
GE Money revenues and net earnings increased 12% and 15%
in 2006, respectively, compared with 2005. Revenues for 2006
included $0.9 billion from acquisitions. Revenues in 2006 also
increased as a result of organic revenue growth ($1.6 billion),
partially offset by the overall strengthening U.S. dollar ($0.2 billion).
The increase in net earnings resulted primarily from core growth
($0.4 billion), including growth in lower-taxed earnings from
global operations, acquisitions ($0.2 billion) and higher securitiza-
tions ($0.1 billion), partially offset by reduced earnings from our
Japanese business ($0.2 billion), primarily related to higher
customer claims for partial interest refunds under Japanese
law. In 2006 and 2005, charges related to these claims totaled
$0.4 billion and $0.2 billion after tax, respectively.
On December 13, 2006, a new lending law was passed in
Japan. This law will significantly affect the operating environment
for the entire consumer lending industry in Japan. This law will
be phased in over three years and will reduce the maximum
allowable lending rate and limit individual consumer borrowing
by 2010. Our future revenues and provisions for losses in Japan
continue to be affected by both this legislation and the volume
and amounts of claims. We are taking appropriate strategic
actions to address these matters.
GE Money revenues and net earnings increased 23% and
21% in 2005, respectively, compared with 2004. Revenues for
2005 included $1.9 billion from acquisitions. Revenues during
2005 also increased $1.8 billion as a result of organic revenue
54 ge 2006 annual report