GE 2010 Annual Report Download - page 44

management’s discussion and analsis
42 GE 2010 ANNUAL REPORT
GE Capital revenues decreased 26% and net earnings
decreased 82% in 2009 as compared with 2008. Revenues in 2009
and 2008 included $2.1 billion and $0.4 billion of revenue from
acquisitions, respectively, and in 2009 were reduced by $4.8 bil-
lion as a result of dispositions, including the effect of the
deconsolidation of PTL. Revenues in 2009 also decreased
$14.8 billion compared with 2008 as a result of organic revenue
declines, primarily driven by a lower asset base and a lower inter-
est rate environment, and the stronger U.S. dollar. Net earnings
decreased by $6.6 billion in 2009 compared with 2008, primarily
due to higher provisions for losses on financing receivables asso-
ciated with the challenging economic environment, partially
offset by lower selling, general and administrative costs and the
decision to indefinitely reinvest prior-year earnings outside the
U.S. Net earnings also included restructuring and other charges
for 2009 of $0.4 billion and net losses of $0.1 billion related to
our Treasury operations.
Additional information about certain GE Capital busi-
nesses follows.
CLL 2010 revenues decreased 11% and net earnings increased
61% compared with 2009. Revenues in 2010 and 2009 included
$0.2 billion and $0.1 billion, respectively, from acquisitions,
and in 2010 were reduced by $1.2 billion from dispositions, pri-
marily related to the deconsolidation of PTL, which included
$0.3 billion related to a gain on the sale of a partial interest in a
limited partnership in PTL and remeasurement of our retained
investment. Revenues in 2010 also decreased $1.2 billion
compared with 2009 as a result of organic revenue declines
($1.4 bil lion), partially offset by the weaker U.S. dollar ($0.2 billion).
Net earnings increased by $0.6 billion in 2010, reflecting lower
provisions for losses on financing receivables ($0.6 billion), higher
gains ($0.2 billion) and lower selling, general and administrative
costs ($0.1 billion). These increases were partially offset by
the absence of the gain on the PTL sale and remeasurement
($0.3 billion) and declines in lower-taxed earnings from global
operations ($0.1 billion).
CLL 2009 revenues decreased 23% and net earnings
decreased 48% compared with 2008. Revenues in 2009 and
2008 included $1.9 billion and $0.3 billion from acquisitions,
respectively, and were reduced by $3.2 billion from dispositions,
primarily related to the deconsolidation of PTL. Revenues in 2009
also included $0.3 billion related to a gain on the sale of a partial
interest in a limited partnership in PTL and remeasurement of our
retained investment. Revenues in 2009 decreased $4.7 billion
compared with 2008 as a result of organic revenue declines
($4.0 billion) and the stronger U.S. dollar ($0.7 billion). Net earnings
decreased by $0.9 billion in 2009, reflecting higher provisions for
losses on financing receivables ($0.5 billion), lower gains ($0.5 bil-
lion) and declines in lower-taxed earnings from global operations
($0.4 billion), partially offset by acquisitions ($0.4 billion), higher
investment income ($0.3 billion) and the stronger U.S. dollar
($0.1 billion). Net earnings also included the gain on PTL sale and
remeasurement ($0.3 billion) and higher Genpact gains ($0.1 bil-
lion), partially offset by mark-to-market losses and other-than-
temporary impairments ($0.1 billion).
Consumer 2010 revenues increased 1% and net earnings
increased 85% compared with 2009. Revenues in 2010 were
reduced by $0.3 billion as a result of dispositions. Revenues in
2010 increased $0.5 billion compared with 2009 as a result of the
weaker U.S. dollar ($0.5 billion). The increase in net earnings
resulted primarily from core growth ($1.2 billion) and the weaker
U.S. dollar ($0.1 billion), partially offset by the effects of disposi-
tions ($0.1 billion). Core growth included lower provisions for
losses on financing receivables across most platforms ($1.5 bil-
lion) and lower selling, general and administrative costs
($0.2 billion), partially offset by declines in lower-taxed earnings
from global operations ($0.7 billion) including the absence of the
first quarter 2009 tax benefit ($0.5 billion) from the decision to
indefinitely reinvest prior-year earnings outside the U.S. and an
increase in the valuation allowance associated with Japan
($0.2 billion).
Consumer 2009 revenues decreased 27% and net earnings
decreased 61% compared with 2008. Revenues in 2009 included
$0.2 billion from acquisitions and were reduced by $1.7 billion as a
result of dispositions, and the lack of a current-year counterpart to
the 2008 gain on sale of our Corporate Payment Services (CPS)
business ($0.4 billion). Revenues in 2009 decreased $4.7 billion
compared with 2008 as a result of organic revenue declines
($3.1 billion) and the stronger U.S. dollar ($1.6 billion). The decrease
in net earnings resulted primarily from core declines ($2.4 billion)
and the lack of a current-year counterpart to the 2008 gain on sale
of our CPS business ($0.2 billion). These decreases were partially
offset by higher securitization income ($0.3 billion) and the stron-
ger U.S. dollar ($0.1 billion). Core declines primarily resulted from
lower results in the U.S., U.K., and our banks in Eastern Europe,
reflecting higher provisions for losses on financing receivables
($1.3 billion) and declines in lower-taxed earnings from global
operations ($0.7 billion). The benefit from lower-taxed earnings
from global operations included $0.5 billion from the decision to
indefinitely reinvest prior-year earnings outside the U.S.
Real Estate 2010 revenues decreased 7% and net earn-
ings decreased 13% compared with 2009. Revenues for 2010
decreased $0.3 billion compared with 2009 as a result of organic
revenue declines and a decrease in property sales, partially offset
by the weaker U.S. dollar. Real Estate net earnings decreased
$0.2 billion compared with 2009, primarily from an increase in
impairments related to equity properties and investments
($0.9 billion), partially offset by a decrease in provisions for losses
on financing receivables ($0.4 billion), and core increases ($0.3 bil-
lion). Depreciation expense on real estate equity investments
totaled $1.0 billion and $1.2 billion for 2010 and 2009, respectively.
Real Estate 2009 revenues decreased 40% and net earn-
ings decreased $2.7 billion compared with 2008. Revenues in
2009 decreased $2.6 billion compared with 2008 as a result of
organic revenue declines ($2.4 billion), primarily as a result of a
decrease in sales of properties, and the stronger U.S. dollar
($0.2 billion). Real Estate net earnings decreased $2.7 billion com-
pared with 2008, primarily from an increase in provisions for
losses on financing receivables and impairments ($1.2 billion) and
a decrease in gains on sales of properties as compared to the
prior period ($1.1 billion). In the normal course of our business