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ge 2008 annual report 103
supplemental information
Organic Revenue Growth in 2006
(In millions) 2006 2005 % change
GE consolidated revenues as reported $151,568 $136,262
Less the effects of
Acquisitions, business dispositions (other than dispositions of businesses acquired for investment)
and currency exchange rates 5,213 2,750
The 2006 Olympics broadcasts 684 —
Restatement and immaterial adjustments (219) 398
Reclassifications of discontinued operations (11,407) (11,552)
GE consolidated revenues excluding the effects of acquisitions, business dispositions (other than dispositions
of businesses acquired for investment), currency exchange rates, the 2006 Olympics broadcasts,
restatement and immaterial adjustments and reclassifications of discontinued operations (organic revenues) $157,297 $144,666 9%
Three-year average 6%
Organic revenue growth measures revenue excluding the effects of acquisitions, business dispositions and currency exchange rates,
and without the effects of the 2008 and 2006 Olympics broadcasts, the restatement and immaterial adjustments and reclassifications
of discontinued operations. We believe that this measure provides management and investors with a more complete understanding
of underlying operating results and trends of established, ongoing operations by excluding the effect of acquisitions, dispositions and
currency exchange, which activities are subject to volatility and can obscure underlying trends, and the 2008 and 2006 Olympics
broadcasts, the restatement and immaterial adjustments and reclassification of discontinued operations, which if included would over-
shadow trends in ongoing revenues. We also believe that presenting organic revenue growth separately for our industrial businesses
provides management and investors with useful information about the trends of our industrial businesses and enables a more direct
comparison to other non-financial businesses and companies. Management recognizes that the term “organic revenue growth” may be
interpreted differently by other companies and under different circumstances. Although this may have an effect on comparability of
absolute percentage growth from company to company, we believe that these measures are useful in assessing trends of the respec-
tive businesses or companies and may therefore be a useful tool in assessing period-to-period performance trends.
Average Total Shareowners’ Equity, Excluding Effects of Discontinued Operations(a)
December 31 (In millions) 2008 2007 2006 2005 2004
Average total shareowners’ equity(b) $113,387 $113,842 $109,174 $110,998 $94,521
Less the effects of
Cumulative earnings from discontinued operations —— — 2,094 2,985
Average net investment in discontinued operations (590) 3,640 11,658 13,298 8,743
Average total shareowners’ equity, excluding effects of
discontinued operations (a) $113,977 $110,202 $ 97,516 $ 95,606 $82,793
(a) Used for computing return on average shareowners’ equity and return on average total capital invested shown in the Selected Financial Data section.
(b) On an annual basis, calculated using a five-point average.
Our ROTC calculation excludes earnings (losses) of discontinued
operations from the numerator because U.S. GAAP requires us
to display those earnings (losses) in the Statement of Earnings.
We exclude the cumulative effect of earnings (losses) of discon-
tinued operations from the denominator in our ROTC calculation
(1) for each of the periods for which related discontinued opera-
tions were presented, and (2) for our average net investment in
discontinued operations since July 1, 2005. Had we disposed of
these operations before July 1, 2005, we would have applied
the proceeds to reduce parent-supported debt at GE Capital.
However, since parent-supported debt at GE Capital was retired by
June 30, 2005, we have assumed that we would have distributed
the proceeds after that time to shareowners through share
repurchases, thus reducing average total shareowners’ equity.
Our calculation of average total shareowners’ equity may not be
directly comparable to similarly titled measures reported by
other companies. We believe that it is a clearer way to measure
the ongoing trend in return on total capital for the continuing
operations of our businesses given the extent that discontinued
operations have affected our reported results. We believe that
this results in a more relevant measure for management and
investors to evaluate performance of our continuing operations, on
a consistent basis, and to evaluate and compare the performance
of our continuing operations with the ongoing operations of
other businesses and companies.
Definitions indicating how the above-named ratios are calcu-
lated using average total shareowners’ equity, excluding effects
of discontinued operations, can be found in the Glossary.