GE 2009 Annual Report Download - page 40

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38 GE 2009 ANNUAL REPORT
CONSUMER & INDUSTRIAL revenues of $9.7 billion decreased 17%,
or $2.0 billion, in 2009 compared with 2008, as lower volume
($2.2 billion) and the stronger U.S. dollar ($0.1 billion) were partially
offset by higher prices ($0.2 billion). The decrease in volume
primarily reflected tightened consumer spending in the European
and U.S. markets. Segment profit increased 10% in 2009 as higher
prices ($0.2 billion) and lower material and other costs ($0.2 bil-
lion) were partially offset by lower productivity ($0.3 billion) and
lower other income ($0.1 billion).
Consumer & Industrial revenues decreased 7%, or $0.9 billion,
to $11.7 billion in 2008 compared with 2007 as lower volume
($1.2 billion) was partially offset by higher prices ($0.2 billion) and
the effects of the weaker U.S. dollar ($0.1 billion). The decrease in
volume reflected tightened spending in the U.S. market. Segment
profit decreased 65%, or $0.7 billion, to $0.4 billion as higher
material and other costs ($0.4 billion), lower volume ($0.2 billion),
lower productivity ($0.1 billion) and the effects of the weaker U.S.
dollar on manufacturing costs ($0.1 billion) were partially offset by
higher prices ($0.2 billion). See Corporate Items and Eliminations
for a discussion of items not allocated to this segment.
CORPORATE ITEMS AND ELIMINATIONS
(In millions) 2009 2008 2007
REVENUES
Insurance activities $ 3,404 $ 3,335 $ 3,962
Eliminations and other (1,990) (1,421) 647
Total $ 1,414 $ 1,914 $ 4,609
OPERATING PROFIT (COST)
Insurance activities $ (93) $ (202) $ 145
Principal pension plans (547) (244) (755)
Underabsorbed corporate
overhead (360) (341) (437)
Other (2,904) (1,904) (793)
Total $(3,904) $(2,691) $(1,840)
Corporate Items and Eliminations include the effects of eliminat-
ing transactions between operating segments; results of our
insurance activities remaining in continuing operations; certain
items in our treasury operations; cost of, and cost reductions
from, our principal pension plans; underabsorbed corporate
overhead; certain non-allocated amounts described below; and a
variety of sundry items. Corporate Items and Eliminations is not
an operating segment. Rather, it is added to operating segment
totals to reconcile to consolidated totals on the financial
statements.
Certain amounts included in Corporate Items and Eliminations
cost are not allocated to GE operating segments because they are
excluded from the measurement of their operating performance
for internal purposes. In 2009, these included $0.4 billion at each
of Capital Finance and Technology Infrastructure, $0.2 billion at
Energy Infrastructure and $0.1 billion at Consumer & Industrial,
primarily for restructuring, rationalization and other charges and
$0.3 billion at NBC Universal, primarily for restructuring, rationaliza-
tion and other charges and technology and product development
costs. In 2008, amounts primarily related to restructuring, ratio-
nalization and other charges were $0.5 billion at each of Capital
Finance and NBC Universal, $0.4 billion at Technology Infrastructure
and $0.3 billion at each of Energy Infrastructure and Consumer
& Industrial. Included in these amounts in 2008 were technology
and product development costs of $0.2 billion at NBC Universal
and $0.1 billion at Technology Infrastructure and net losses on
business exits of $0.2 billion at Capital Finance. GECS amounts
are on an after-tax basis.
Corporate Items and Eliminations include the elimination of
transactions between our segments. In 2007, revenues, elimina-
tions and other included a $0.9 billion gain on sale of a business
interest to Hitachi by the Energy business and a $0.6 billion gain
on sale of Swiss Re common stock.
In 2009, other operating profit (cost) increased $1.0 billion,
primarily due to a $1.1 billion increase in restructuring and other
charges, which included a $0.6 billion increase in costs related
to environmental remediation matters.
In 2007, other operating profit (cost) reflected a $0.9 billion
gain on sale of a business interest to Hitachi by the Energy busi-
ness and a $0.3 billion (after-tax basis) gain on sale of Swiss Re
common stock.
DISCONTINUED OPERATIONS
(In millions) 2009 2008 2007
Loss from discontinued operations,
net of taxes $(193) $ (679) $(249)
Discontinued operations primarily comprised GE Money Japan,
WMC and Plastics. Results of these businesses are reported as
discontinued operations for all periods presented.
During the third quarter of 2007, we committed to a plan to
sell our Lake business and recorded an after-tax loss of $0.9 bil-
lion, which represents the difference between the net book value
of our Lake business and the projected sale price. During 2008,
we completed the sale of GE Money Japan, which included Lake,
along with our Japanese mortgage and card businesses, exclud-
ing our minority ownership interest in GE Nissen Credit Co., Ltd.
In connection with this sale, and primarily related to our Japanese
mortgage and card businesses, we recorded an incremental
$0.4 billion loss in 2008.
In December 2007, we completed the sale of our WMC
business 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 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 2009,
primarily reflected the incremental loss on disposal of GE Money
Japan ($0.1 billion).
Loss from discontinued operations, net of taxes, in 2008 was
$0.7 billion, primarily reflecting a loss from operations ($0.3 billion),
and the estimated incremental loss on disposal of GE Money Japan
($0.4 billion).