GE 2007 Annual Report Download - page 53

ge 2007 annual report 51
’   
and Eliminations is not an operating segment. Rather, it is added
to operating segment totals to reconcile to consolidated totals
on the fi nancial statements.
Certain amounts included in the line “Other” above are not
allocated to segment results for internal measurement purposes.
In 2007, amounts primarily related to restructuring, rationaliza-
tion and other charges were $0.5 billion at Industrial (including
$0.1 billion of product quality issues), $0.4 billion at Healthcare,
$0.3 billion at each of NBC Universal, Commercial Finance and
Infrastructure and $0.1 billion at GE Money. Amounts in 2007
also included technology and product development costs of
$0.1 billion at NBC Universal. GECS amounts are on an after-tax
basis. In 2006, amounts related principally to technology and
product development and restructuring costs of $0.2 billion at
NBC Universal, restructuring and other charges of $0.2 billion at
Industrial and principally for acquisition-related restructuring and
other charges of $0.1 billion at Healthcare.
Other operating profi t (cost) also refl ects a $0.9 billion gain on
sale of a business interest to Hitachi by the Energy business and
a $0.3 billion (after-tax) gain on sale of Swiss Re common stock.
Other operating profi t (cost) also refl ects gains from sales of
business interests of $0.4 billion in 2006, principally GE Supply, and
$0.1 billion from the partial sale of an interest in Genpact in 2005.
DISCONTINUED OPERATIONS
(In millions) 2007 2006 2005
Earnings (loss) from discontinued
operations, net of taxes $(260) $1,362 $(634)
Discontinued operations comprised Lake; WMC; Plastics; Advanced
Materials; the property and casualty insurance and reinsurance
businesses and the European life and health operations of GE
Insurance Solutions and most of its affi liates; GE Life, our U.K.-
based life insurance operation; and Genworth, our formerly
wholly-owned subsidiary that conducted most of our consumer
insurance business, including life and mortgage insurance oper-
ations. Results of these businesses were reported as discontinued
operations for all periods presented.
In December 2007, we completed the sale of our WMC busi-
ness for $0.1 billion in cash, recognizing an after-tax loss of
$0.1 billion. In connection with the transaction, certain contractual
obligations and potential liabilities related to previously sold loans
were retained.
In September 2007, we committed to a plan to sell our Lake
business. In connection with this exit, we recorded an after-tax
loss of $0.9 billion, which represents the difference between the
net book value of our Lake business and the projected sale price.
In August 2007, we completed the sale of our Plastics business
to Saudi Basic Industries Corporation for $11.6 billion in cash. As a
result, we recognized an after-tax gain of $1.6 billion.
Loss from discontinued operations, net of taxes, in 2007 was
$0.3 billion, refl ecting a loss from operations at WMC ($0.9 billion),
an estimated after-tax loss on the planned sale of Lake ($0.9 billion),
a loss from operations at Lake ($0.3 billion), and an after-tax loss
on sale of our WMC business ($0.1 billion), partially offset by a tax
adjustment related to the 2004 initial public offering of Genworth
($0.1 billion). This was partially offset by an after-tax gain on sale
of our Plastics business ($1.6 billion) and earnings from Plastics
operations ($0.3 billion).
Earnings from discontinued operations, net of taxes, in 2006
were $1.4 billion, refl ecting earnings at our Plastics and Advanced
Materials businesses ($1.0 billion). Also included in these earnings
were earnings at Lake and WMC ($0.2 billion), Genworth ($0.2 billion)
and GE Insurance Solutions ($0.1 billion), partially offset by a loss
at GE Life ($0.2 billion).
Loss from discontinued operations, net of taxes, in 2005 was
$0.6 billion, refl ecting a loss at GE Insurance Solutions ($2.8 billion),
partially offset by earnings at Genworth ($0.9 billion), Plastics and
Advanced Materials ($0.8 billion), and Lake and WMC ($0.5 billion).
For additional information related to discontinued operations,
see note 2.
Geographic Operations
Our global activities span all geographic regions and primarily
encompass manufacturing for local and export markets, import
and sale of products produced in other regions, leasing of aircraft,
sourcing for our plants domiciled in other global regions and
provision of fi nancial services within these regional economies.
Thus, when countries or regions experience currency and/or
economic stress, we often have increased exposure to certain
risks, but also often have new profi t opportunities. Potential
increased risks include, among other things, higher receivable
delinquencies and bad debts, delays or cancellations of sales
and orders principally related to power and aircraft equipment,
higher local currency fi nancing costs and slowdown in established
fi nancial services activities. New profi t opportunities include,
among other things, more opportunities for lower cost outsourcing,
expansion of industrial and fi nancial services activities through
purchases of companies or assets at reduced prices and lower
U.S. debt fi nancing costs.
Revenues are classifi ed according to the region to which
products and services are sold. For purposes of this analysis, U.S.
is presented separately from the remainder of the Americas. We
classify certain operations that cannot meaningfully be associated
with specifi c geographic areas as “Other Global” for this purpose.
GEOGRAPHIC REVENUES
(In billions) 2007 2006 2005
U.S. $ 86.2 $ 81.1 $ 75.7
Europe 39.9 32.6 29.1
Pacific Basin 22.0 17.9 15.7
Americas 12.6 11.5 9.6
Middle East and Africa 8.0 5.5 4.2
Other Global 4.0 3.2 2.3
Total
$172.7 $151.8 $136.6