GE 2007 Annual Report Download - page 48

46 ge 2007 annual report
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fi nancial risk with derivative fi nancial instruments must do so using
our centrally managed Treasury function, providing assurance
that the business strategy complies with our corporate policies
and achieves economies of scale. We review risks periodically
with business-level risk managers, senior management and our
Board of Directors.
GECS employs about 19,000 dedicated risk professionals,
including 11,500 involved in collection activities and 500 special-
ized asset managers who evaluate leased asset residuals and
remarket off-lease equipment.
GE and GECS manage a variety of risks including liquidity,
credit and market risks.
• Liquidity risk is the risk of being unable to accommodate
liability maturities, fund asset growth and meet contractual
obligations through access to funding at reasonable market
rates. Additional information about our liquidity and how we
manage this risk can be found in the Financial Resources
and Liquidity section and in notes 17 and 26.
• Credit risk is the risk of fi nancial loss arising from a customer
or counterparty failure to meet its contractual obligations.
We face credit risk in our investing, lending and leasing activ-
ities (see the Financial Resources and Liquidity and Critical
Accounting Estimates sections and notes 1, 9, 12, 13 and 28)
and derivative fi nancial instruments activities (see note 26).
• Market risk is the potential loss in value of investment and other
asset and liability portfolios, including fi nancial instruments
and residual values of leased assets. This risk is caused by
changes in market variables, such as interest and currency
exchange rates and equity and commodity prices. We are
exposed to market risk in the normal course of our business
operations as a result of our ongoing investing and funding
activities. Additional information can be found in the Financial
Resources and Liquidity section and in notes 9, 12, 14 and 26.
Other risks include natural disasters, availability of necessary
materials, guarantees of product performance and business
interruption. These types of risks are often insurable, and success
in managing these risks is ultimately determined by the balance
between the level of risk retained or assumed and the cost of
transferring risk to others.
Segment Operations
Operating segments comprise our six businesses focused on the
broad markets they serve: Infrastructure, Commercial Finance,
GE Money, Healthcare, NBC Universal and Industrial. For segment
reporting purposes, certain GECS businesses including Aviation
Financial Services, Energy Financial Services and Transportation
Finance are reported in the Infrastructure segment because
Infrastructure actively manages such businesses and reports
their results for internal performance measurement purposes.
148
133
120
100
2003 2004 2005 2006 2007
167
SEGMENT REVENUES
(In $ billions)
A. Infrastructure
B. Commercial Finance
C. GE Money
D. Healthcare
E. NBC Universal
F. Industrial
Segment profi t is determined based on internal performance
measures used by the Chief Executive Offi cer to assess the
performance of each business in a given period. In connection
with that assessment, the Chief Executive Offi cer may exclude
matters such as charges for restructuring; rationalization and
other similar expenses; in-process research and development
and certain other acquisition-related charges and balances;
technology and product development costs; certain gains and
losses from dispositions; and litigation settlements or other
charges, responsibility for which preceded the current manage-
ment team.
25
22
18
16
2003 2004 2005 2006 2007
29
SEGMENT PROFIT
(In $ billions)
A. Infrastructure
B. Commercial Finance
C. GE Money
D. Healthcare
E. NBC Universal
F. Industrial