GE 2012 Annual Report Download - page 49

management’s discussion and analsis
GE 2012 ANNUAL REPORT 47
DISCONTINUED OPERATIONS
(In millions) 2012 2011 2010
Earnings (loss) from discontinued
operations, net of taxes $(1,038) $(76) $(969)
Discontinued operations primarily comprised GE Money Japan,
WMC, BAC, Consumer RV Marine, Consumer Mexico, Consumer
Singapore, Australian Home Lending and Consumer Ireland.
Associated results of operations, financial position and cash
flows are separately reported as discontinued operations for all
periods presented.
In 2012, loss from discontinued operations, net of taxes,
primarily reflected a $0.6 billion after-tax effect of incremental
reserves for excess interest claims related to our loss-sharing
arrangement on the 2008 sale of GE Money Japan, a $0.3 billion
after-tax effect of incremental reserves related to retained rep-
resentation and warranty obligations to repurchase previously
sold loans on the 2007 sale of WMC and a $0.2 billion loss (which
includes a $0.1 billion loss on disposal) related to Consumer
Ireland, partially offset by a $0.1 billion tax benefit related to the
resolution with the IRS regarding the tax treatment of the 2007
sale of our Plastics business.
In 2011, loss from discontinued operations, net of taxes,
included a $0.2 billion loss from operations at Consumer Ireland,
a $0.2 billion after-tax effect of incremental reserves for excess
interest claims related to our loss-sharing arrangement on the
2008 sale of GE Money Japan and a $0.1 billion loss on the sale
of Australian Home Lending, partially offset by a $0.3 billion gain
related to the sale of Consumer Singapore and $0.1 billion of
earnings from operations at Australian Home Lending.
In 2010, loss from discontinued operations, net of taxes, pri-
marily reflected the after-tax effect of incremental reserves for
excess interest claims related to our loss-sharing arrangement on
the 2008 sale of GE Money Japan of $1.7 billion, estimated after-
tax losses of $0.2 billion and $0.1 billion on the planned sales of
Consumer Mexico and Consumer RV Marine, respectively, and a
$0.1 billion loss from operations at Consumer Ireland, partially
offset by an after-tax gain on the sale of BAC of $0.8 billion and
earnings from operations at Consumer Mexico of $0.2 billion
and at BAC of $0.1 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 air-
craft, sourcing for our plants domiciled in other global regions
and provision of financial services within these regional econo-
mies. Thus, when countries or regions experience currency and/
or economic stress, we often have increased exposure to certain
risks, but also often have new opportunities that include, among
other things, more opportunities for 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 prod-
ucts and services are sold. For purposes of this analysis, the U.S.
is presented separately from the remainder of the Americas.
GEOGRAPHIC REVENUES
(In billions) 2012 2011 2010
U.S. $ 70.4 $ 69.8 $ 75.1
Europe 27.4 29.0 30.9
Pacific Basin 24.5 23.2 20.8
Americas 13.2 13.3 11.7
Middle East and Africa 11.9 12.0 11.1
Total $147.4 $147.3 $149.6
Global revenues were $76.9 billion in 2012, compared with
$77.5 billion and $74.5 billion in 2011 and 2010, respectively. Global
revenues to external customers as a percentage of consolidated
revenues were 52% in 2012, compared with 53% in 2011 and 50%
in 2010. The effects of currency fluctuations on reported results
decreased revenues by $2.6 billion in 2012 and increased revenues
by $2.5 billion and $0.5 billion in 2011 and 2010, respectively.
GE global revenues, excluding GECC, in 2012 were $57.3 bil-
lion, up 5% over 2011. Increases in growth markets of 20% in
China, 22% in Australia and New Zealand and 8% in Latin America
more than offset a decrease of 36% in India. These revenues as
a percentage of GE total revenues, excluding GECC, were 57%
in 2012, compared with 55% and 50% in 2011 and 2010, respec-
tively. GE global revenues, excluding GECC, were $54.3 billion in
2011, up 9% from 2010, primarily resulting from increases in Latin
America, China and Australia and New Zealand, partially offset by
a decrease in Europe.
GECC global revenues decreased 15% to $19.7 billion in 2012,
compared with $23.2 billion and $24.7 billion in 2011 and 2010,
respectively, primarily as a result of decreases in Europe. GECC
global revenues as a percentage of total GECC revenues were
43% in 2012, compared with 47% and 50% in 2011 and 2010,
respectively. GECC global revenue decreased by 6% in 2011 from
$24.7 billion in 2010, primarily as a result of decreases in Europe.
TOTAL ASSETS (CONTINUING OPERATIONS)
December 31 (In billions) 2012 2011
U.S. $346.6 $336.6
Europe 192.8 212.5
Pacific Basin 56.4 62.3
Americas 33.6 46.7
Middle East and Africa 54.8 58.4
Total $684.2 $716.5
Total assets of global operations on a continuing basis were
$337.6 billion in 2012, a decrease of $42.3 billion, or 11%, from
2011. GECC global assets on a continuing basis of $277.6 billion at
the end of 2012 were 13% lower than at the end of 2011, reflect-
ing declines in Europe, primarily due to repayment of long-term
debt, decreases in the fair value of derivative instruments and