GE 2008 Annual Report Download - page 107

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ge 2008 annual report 105
supplemental information
Delinquency Rates on Certain Financing Receivables
Delinquency rates on managed equipment financing loans and
leases and managed consumer financing receivables follow.
Equipment Financing
December 31 2008 2007 2006
Managed 2.17% 1.21% 1.22%
Off-book 1.20 0.71 0.52
On-book 2.34 1.33 1.42
Consumer
December 31 2008 2007 2006
Managed 7.47% 5.38% 5.22%
U.S. 7.14 5.52 4.93
Non-U.S. 7.64 5.32 5.34
Off-book 8.24 6.64 5.49
U.S. 8.24 6.64 5.49
Non-U.S. (a) (a) (a)
On-book 7.35 5.22 5.20
U.S. 6.39 4.78 4.70
Non-U.S. 7.64 5.32 5.34
(a) Not applicable.
Delinquency rates on on-book and off-book equipment financ-
ing loans and leases increased from December 31, 2007 to
December 31, 2008, as a result of continuing weakness in the
economic and credit environment. In addition, delinquency rates
on on-book equipment financing loans and leases increased
from December 31, 2007 to December 31, 2008, as a result of
the inclusion of the CitiCapital acquisition and Sanyo acquisition
in Japan, which contributed an additional 12 and 9 basis points,
respectively, at December 31, 2008.
The increases in off-book and on-book delinquencies for
consumer financing receivables in the U.S. from December 31,
2007 to December 31, 2008, reflect the continued rise in delin-
quencies across the U.S. credit card receivables platforms. The
increase in on-book delinquency for consumer financing receiv-
ables outside of the U.S. reflects the effects of the declining U.K.
housing market. The increase in off-book delinquencies for
consumer financing receivables in the U.S. from December 31,
2006 to December 31, 2007, reflected both a change in the mix
of the receivables securitized during 2007— for example, our Care
Credit receivables which generally have a higher delinquency
rate than our core private label card portfolio —as well as the risk
in the delinquencies across the broader portfolio of U.S. credit
card receivables.
We believe that delinquency rates on managed financing
receivables provide a useful perspective of our portfolio quality
and are key indicators of financial performance. We use this non-
GAAP financial measure because it provides information that
enables management and investors to understand the underlying
operational performance and trends of certain financing receiv-
ables and facilitates a comparison with the performance of our
competitors. The same underwriting standards and ongoing risk
monitoring are used for both on-book and off-book portfolios as
the customer’s credit performance will affect both loans retained
on the Statement of Financial Position and securitized loans. We
believe that managed basis information is useful to management
and investors, enabling them to understand both the credit risks
associated with the loans reported on the Statement of Financial
Position and our retained interests in securitized loans.
Five-Year Financial Performance Graph: 2004 – 2008
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN AMONG GE, S&P 500
AND DOW JONES INDUSTRIAL AVERAGE
The annual changes for the five-year period shown in the graph
on this page are based on the assumption that $100 had been
invested in GE stock, the Standard & Poor’s 500 Stock Index and
the Dow Jones Industrial Average on December 31, 2003, and
that all quarterly dividends were reinvested. The total cumulative
dollar returns shown on the graph represent the value that such
investments would have had on December 31, 2008.
2007
2006
200520042003 2008
FIVE-YEAR FINANCIAL
PERFORMANCE
(In dollars)
GE
S&P 500
DJIA
134
130
119
121
100
61
2003 2004 2005 2006 2007 2008
GE $100 $121 $119 $130 $134 $61
S&P 500 100 111 116 135 142 89
DJIA 100 106 107 128 139 95