GE 2012 Annual Report Download - page 144

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Industrial Segment Organic Revenues
(Dollars in millions) 2012 2011 V%
Consolidated revenues $147,359 $147,288
Less GE Capital revenues 46,039 49,068
Less Corporate items and
eliminations (1,491) 2,995
Industrial segment revenues 102,811 95,225
Less the effects of:
Acquisitions, business
dispositions (other than
dispositions of businesses
acquired for investment) and
currency exchange rates 972 1,112
Industrial revenues excluding the
effects of acquisitions, business
dispositions (other than
dispositions of businesses
acquired for investment)
and currency exchange
rates (industrial segment
organic revenues) $101,839 $ 94,113 8%
Organic revenue growth measures revenue excluding the effects
of acquisitions, business dispositions and currency exchange
rates. We believe that this measure provides management and
investors with a more complete understanding of underlying
operating results and trends of established, ongoing opera-
tions by excluding the effect of acquisitions, dispositions and
currency exchange, which activities are subject to volatility and
can obscure underlying trends. We also believe that presenting
organic revenue growth separately for our industrial segments
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 com-
panies. 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 use-
ful in assessing trends of the respective business or companies
and may therefore be a useful tool in assessing period-to-period
performance trends.
Average GE Shareowners’ Equity, Excluding Effects of Discontinued Operations (a)
December 31 (In millions) 2012 2011 2010 2009 2008
Average GE shareowners’ equity (b) $120,411 $122,289 $116,179 $110,535 $113,387
Less the effects of the average net investment in
discontinued operations (478) 4,924 13,819 17,432 9,248
Average GE shareowners’ equity, excluding effects of
discontinued operations
(a) $120,889 $117,365 $102,360 $ 93,103 $104,139
(a) Used for computing return on average GE shareowners’ equity and return on average total capital invested (ROTC).
(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.
Our calculation of average GE 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 perfor-
mance 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 GE shareowners’ equity, excluding effects of
discontinued operations, can be found in the Glossary.
Ratio of Debt to Equity at GECC, Net of Cash and Equivalents
and with Classification of Hybrid Debt as Equity
December 31 (Dollars in millions) 2012 2011 2010
GECC debt $397,300 $443,097 $470,520
Less cash and equivalents 61,941 76,702 60,257
Less hybrid debt 7,725 7,725 7,725
$327,634 $358,670 $402,538
GECC equity $ 81,890 $ 77,110 $ 68,984
Plus hybrid debt 7,725 7,725 7,725
$ 89,615 $ 84,835 $ 76,709
Ratio 3.66:1 4.23:1 5.25:1
We have provided the GECC ratio of debt to equity on a basis
that reflects the use of cash and equivalents to reduce debt, and
with long-term debt due in 2066 and 2067 classified as equity.
We believe that this is a useful comparison to a GAAP-based ratio
142 GE 2012 ANNUAL REPORT
supplemental information