GE 2009 Annual Report Download - page 41

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GE 2009 ANNUAL REPORT 39
Loss from discontinued operations, net of taxes, in 2007 was
$0.2 billion, reflecting a loss from operations at WMC ($0.9 billion),
an estimated after-tax loss on the planned sale of Lake ($0.9 bil-
lion), a loss from operations at GE Money Japan ($0.3 billion), and
an after-tax loss on the 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).
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 financial 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 profit 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 financing costs and slowdown in established
financial services activities. New profit opportunities include, among
other things, more opportunities for lower cost outsourcing,
expansion of industrial and financial services activities through
purchases of companies or assets at reduced prices and lower
U.S. debt financing costs.
Revenues are classified 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 specific geographic areas as “Other Global” for
this purpose.
GEOGRAPHIC REVENUES
(In billions) 2009 2008 2007
U.S. $ 72.5 $ 85.3 $ 86.2
Europe 36.9 44.0 39.9
Pacific Basin 20.7 23.6 21.8
Americas 12.6 14.8 12.6
Middle East and Africa 10.0 10.1 8.0
Other Global 4.1 4.7 4.0
Total $156.8 $182.5 $ 172.5
Global revenues decreased 13% to $84.3 billion in 2009, compared
with $97.2 billion and $86.3 billion in 2008 and 2007, respectively.
Global revenues to external customers as a percentage of consoli-
dated revenues were 54% in 2009, compared with 53% and 50%
in 2008 and 2007, respectively. The effects of currency fluctuations
on reported results were to decrease revenues by $3.9 billion in
2009 and increase revenues by $2.0 billion and $4.0 billion in 2008
and 2007, respectively.
GE global revenues in 2009 were $56.4 billion, down 5% over
2008. Increases in emerging markets of 25% in Eastern Europe,
16% in China and 3% in Africa were more than offset by decreases
of 17% in the Americas and 7% in Western Europe. GE global
revenues as a percentage of total GE revenues were 55% in 2009,
compared with 53% and 50% in 2008 and 2007, respectively.
GE global revenues were $59.4 billion in 2008, up 19% over 2007,
with broad-based global growth.
GECS global revenues decreased 26% to $27.9 billion in 2009,
compared with $37.8 billion and $36.5 billion in 2008 and 2007,
respectively, primarily as a result of dispositions in Europe and the
Pacific Basin. GECS global revenues as a percentage of total GECS
revenues were 52% in 2009, compared with 53% and 51% in
2008 and 2007, respectively. The effects of currency fluctuations
on reported results were to decrease revenues by $2.5 billion in
2009 and increase revenues by $1.2 billion and $2.3 billion in 2008
and 2007, respectively.
TOTAL ASSETS (CONTINUING OPERATIONS)
December 31 (In billions) 2009 2008
U.S. $389.2 $395.6
Europe 219.0 228.0
Pacific Basin 65.8 75.0
Americas 50.0 40.9
Other Global 56.3 56.5
Total $780.3 $796.0
Total assets of global operations on a continuing basis were
$391.1 billion in 2009, a decrease of $9.3 billion, or 2%, from
2008. GECS global assets on a continuing basis of $319.1 billion
at the end of 2009 were 3% lower than at the end of 2008,
reflecting core declines in the Pacific Basin and Europe, partially
offset by acquisitions, and the effects of the weaker U.S. dollar,
primarily at Consumer and CLL.
Financial results of our global activities reported in U.S. dollars
are affected by currency exchange. We use a number of tech-
niques to manage the effects of currency exchange, including
selective borrowings in local currencies and selective hedging of
significant cross-currency transactions. Such principal currencies
are the pound sterling, the euro, the Japanese yen and the
Canadian dollar.
Environmental Matters
Our operations, like operations of other companies engaged in
similar businesses, involve the use, disposal and cleanup of
substances regulated under environmental protection laws.
We are involved in a sizeable number of remediation actions to
clean up hazardous wastes as required by federal and state laws.
Such statutes require that responsible parties fund remediation
actions regardless of fault, legality of original disposal or owner-
ship of a disposal site. Expenditures for site remediation actions
amounted to approximately $0.3 billion in both 2009 and 2008.
We presently expect that such remediation actions will require
average annual expenditures of about $0.4 billion over the next
two years.