FAIRFIELD, Conn.--(BUSINESS WIRE)--Oct. 8, 2004--GE's third
quarter 2004 earnings were $4.051 billion, 1% higher than last year's
third quarter before the effect of a required accounting change in
2003, the Company announced today.
"We continued our excellent operating performance in the third
quarter and built momentum for future growth," said GE Chairman and
CEO Jeff Immelt. "We delivered $.38 per share despite approximately
$300 million after tax of hurricane-related insurance losses.
Excluding the impact of our insurance portfolio repositioning and
earnings from our principal pension plans, earnings grew 13% and
earnings per share grew 6%.
"The economy we see continues to be very strong, with our total
orders for the quarter up 27%. Eight of our 11 businesses delivered at
least double-digit earnings growth with continued strong performance
on cash flow from operating activities. GE Energy performed as
expected, and we saw real earnings momentum at Transportation,
Commercial Finance, Consumer Finance and in services across our
businesses.
"Our cash performance was exceptional, with 32% growth
year-to-date. This reflects our continued focus on cash management and
larger dividends from our financial services businesses. We are also
ahead of our plan to reduce the 'parent-supported' debt of our
financial services businesses.
"NBC Universal and GE Healthcare both made excellent progress
integrating their respective major acquisitions. NBC Universal made
full use of its new cable networks and produced a terrific Olympics
broadcast watched by more than 200 million Americans. Healthcare
launched a new molecular diagnostics unit that combines the strengths
of Amersham and GE Medical Systems.
"We also continued to invest in our growth initiatives, with
launches of new technology such as Healthcare's Vivid i(TM) portable
ultrasound; global growth such as Consumer Finance's entry into Russia
and expansion in Korea; and significant customer wins for 600 of our
low-emission and fuel-efficient GE Evolution Series(TM) locomotives.
I'm proud of the GE team and its passion for imagination and growth."
"This continued performance," Immelt said, "further strengthens
our confidence in our outlook for double-digit earnings growth in the
fourth quarter of 2004 and in 2005."
GE will discuss third quarter results on a conference call and
Webcast at 8:30 a.m. EDT today. Call information and related charts
are available at www.ge.com/investor.
Third Quarter 2004 Financial Highlights
-- Earnings of $4.051 billion were up 1% from last year's $4.021
billion before the effect of a required accounting change in
2003. Eight of GE's 11 businesses -- Commercial Finance,
Consumer Finance, Consumer & Industrial, Equipment & Other
Services, Healthcare, Infrastructure, NBC Universal and
Transportation -- contributed at least double-digit earnings
growth. A decline in earnings from Insurance reflected the
exit from several businesses and hurricane losses.
Earnings per share (EPS) before the accounting change were
$.38, down from last year's $.40, reflecting dilution from
additional shares issued in connection with the Amersham and
Vivendi Universal Entertainment transactions.
-- Revenues were $38.3 billion, 15% higher than last year's $33.4
billion. Industrial sales increased 27% to $21.0 billion,
reflecting the combined impact of acquisitions, the stronger
economy and the Olympics broadcasts by NBC Universal. Organic
industrial sales grew 12%. Combined Commercial Finance and
Consumer Finance revenues grew 15% over last year to $10.0
billion, while total financial services revenues grew 3% to
$17.5 billion, principally reflecting the reduction in the
company's insurance businesses.
-- Cash generated from GE's operating activities (CFOA) in the
first nine months of 2004 was $9.7 billion, up 32% over last
year's $7.4 billion. Special dividends from GE Capital
Services, from proceeds of business dispositions, were up $.8
billion. Industrial CFOA in the first nine months increased
25% over last year. GE expects approximately 15% growth in
CFOA for the full year.
-- Net earnings were $4.051 billion in third quarter 2004, up 11%
from $3.649 billion in third quarter 2003, when the company
recorded a non-cash transition charge of $372 million ($.04
per share) upon adoption of FASB Interpretation No. 46, which
required the consolidation of certain entities by companies
that do not control those entities.
"We have strong momentum going into the fourth quarter, and we are
narrowing our earnings target for 2004 to $1.57-$1.60 per share, the
high end of our range," Immelt said. "We also remain confident that we
will achieve 10-15% earnings per share growth in 2005. We have a
terrific set of businesses, great people to lead them and excellent
prospects for the future."
Third Quarter 2004 Business Highlights
Healthcare
-- Increased total orders 42% over third quarter 2003 to $3.4
billion; excluding Amersham, orders grew 15% to $2.8 billion
driven by 41% growth in PET (positron emission tomography)
orders and 7% services growth.
-- Launched the revolutionary LightSpeed VCT(TM), an ultra-high
speed CT (computed tomography) scanner that can capture images
of the heart and coronary arteries in less than five
heartbeats.
-- Announced the development of the Vivid i(TM), the world's
first miniaturized cardiovascular ultrasound system, which
offers the functionality and performance of full-featured,
larger-scale ultrasound devices in a portable "stethoscope of
the future."
-- Helped open Saint Francis Heart Hospital in Tulsa, Oklahoma,
the world's most advanced all-digital heart hospital, which
integrates GE's leading cardiac imaging, picture archiving and
communications systems into a comprehensive, seamless
workflow.
-- In conjunction with The University of Illinois at Chicago,
announced the world's most powerful MRI (magnetic resonance
imaging) machine for human studies, ushering in a new age of
metabolic imaging that will help researchers understand the
workings of the human brain, detect diseases before their
clinical signs appear and develop targeted drug therapies for
illnesses such as stroke.
Transportation
-- Received aircraft engine, locomotive and services orders in
the quarter totaling $4.1 billion, up 40% over third quarter
last year.
-- Selected to provide 108 CF34(TM) regional jet engines to Air
Nostrum, Finnair and Chautauqua Airlines, and eight
extended-range GE90-115B(TM) engines to Emirates Airlines.
-- Through CFMI, a 50/50 joint company of GE and Snecma Moteurs
of France, selected to provide engines to airlines including
CEBU Pacific, Royal Air Maroc and AZAL (Azerbaijan Hava
Yollari).
-- Received new orders in the quarter for 600 GE Evolution Series
locomotives, the world's cleanest diesel-electric locomotives,
and 37 other locomotives for international customers.
-- Certified the CF6-80C2 engine for the U.S. Air Force's C-5
heavy aircraft modernization program, worth $2.6 billion of
potential total revenues for GE Transportation.
-- Selected to provide Canada's Maritime Helicopter Program with
the CT7 engine.
Energy
-- Announced on Oct. 4 the largest single award for new wind
generation capacity in the history of the global wind energy
industry, with a request from Hydro-Quebec to supply up to 660
wind turbines, totaling 990 megawatts of wind-generated
electricity, for eight Canadian projects to be placed on line
from 2006 to 2012.
-- Announced on Oct. 4 the intent to establish an alliance with
Bechtel Corp. to develop a standard commercial offering for
"cleaner coal" projects in North America.
-- Signed new contractual service agreements totaling $1.4
billion, increasing the number of gas turbines covered by 7%
over the same period last year and the number of sites by 8%.
-- Installed the 2,500th 1.5-megawatt GE wind turbine during the
quarter and shipped 49 1.5-megawatt wind turbines.
-- Completed the acquisition of BHA Group Holdings, Inc., an
environmental services leader in particulate matter control
systems, and the acquisition of three business units from S.D.
Myers, Inc., a leader in transformer and substation
maintenance services.
-- Received global equipment orders from Mexico, Turkey and
China; in China, received orders for eight gas turbines, and
turbine-generators for the Pubugou Hydropower plant.
-- Shipped 29 heavy-duty gas turbines from Greenville, S.C., and
Belfort, France, compared with 44 in third quarter 2003.
Commercial Finance
-- Increased the volume of financing for mid-market customers
(businesses with $50 million-$1 billion in annual revenues) by
22% over third quarter 2003 to $13.3 billion.
-- Arranged $1.4 billion of financing for healthcare
organizations in the quarter, 84% more than in third quarter
2003, including a $165 million credit facility to Beth Israel
Medical Center and a $25 million revolving credit facility to
Mount Sinai Hospital, both in New York City.
-- Through a joint venture with Southern Union, submitted the
winning bid for CrossCountry Energy, the holding company
formed from Enron's remaining U.S. gas pipelines.
-- Completed the $1.2 billion acquisition of Benchmark, PLC, a
U.K.-listed real estate property company, adding 41 assets in
London's West End to Commercial Finance's U.K. real estate
portfolio.
-- Ended the quarter with one aircraft on the ground out of a
fleet of more than 1,300 owned aircraft.
-- Introduced a new aircraft component management service that
helps airlines finance and manage their spare parts
inventories, reduce capital investment, lower costs and
improve operational efficiency.
Consumer Finance
-- Entered into a strategic joint venture with Hyundai Capital
Services, Korea's leading consumer finance company, purchasing
a 38% stake and acquiring immediate scale in one of the
world's largest economies.
-- Developed a new program with Dillard's and agreed to purchase
its private label credit card business, comprising the
sixth-largest in-house private label credit card program in
the U.S. and adding 5.5 million active card members to
Consumer Finance's customer base.
-- Teamed with SAM'S CLUB to launch the new Premier Line of
Credit(SM), which offers small business owners a credit line
of up to $100,000 and interest rates as low as prime to help
them start and grow their businesses with the same level of
financial flexibility typically afforded to mid- to
large-sized companies.
-- Agreed to acquire DeltaBank in Russia, entering one of the
world's fastest-growing consumer markets through GE's largest
single investment in Russia to date.
-- Agreed to purchase the credit card receivables of Target
Corporation's Mervyn's retail subsidiary (with 257 stores in
13 states, primarily in the West and South), reinforcing GE's
commitment to the retail card segment and building on Consumer
Finance's strategy to grow in the United States market.
NBC Universal
-- Attracted 203 million total U.S. viewers -- 86% of all U.S.
television households -- with unprecedented, 24-hour-a-day
coverage of the 2004 Summer Games in Athens on the networks of
NBC Universal, making the Games the third-most watched event
in the history of television.
-- Led primetime broadcast TV viewing for the quarter in the key
demographic of adults 18-49.
-- Drove double-digit ratings growth on every NBCU Cable
entertainment network -- Bravo, USA Networks and SciFi -- with
the group's ratings growing faster in the quarter than those
of any other cable group.
-- Increased Telemundo's Monday-Friday prime-time ratings among
adults 18-49 by 70% compared to the year-ago quarter.
-- Completed the 2003-04 season of Today with the largest total
viewers in the program's history, and continued NBC's
late-night leadership, with Jay Leno and Conan O'Brien leading
their respective competitors in ratings by 29% and 67%
respectively; NBC also extended Leno's contract through 2009
and named O'Brien his successor.
-- Completed the quarter with The Bourne Supremacy having
garnered a worldwide theatrical gross of more than $230
million since its July 23 release.
-- Shipped more than 1.5 million units in the first week of
release of the DVD of Eternal Sunshine of the Spotless Mind.
-- Increased MSNBC's primetime viewership in the quarter by 55%
over third quarter 2003, which represents faster growth than
any other cable channel in the quarter and almost three times
the growth of CNN.
Infrastructure
-- Provided EntryScan(TM) and Itemiser(TM) explosives detection
devices to protect attendees of the Olympic Games, the
Democratic and Republican national conventions and the
re-opened Statue of Liberty.
-- Concluded successful trials for the U.S. Transportation
Security Administration (TSA) of GE's walk-through EntryScan
at four U.S. airports, with the TSA choosing to make the
installations permanent.
-- Entered the global cargo security industry with
CommerceGuard(TM), a palm-sized security device that helps
detect unauthorized access to a container and monitors the
container in transit for signs of intrusion; also was selected
for a new TSA pilot program to screen air cargo for
explosives.
-- Signed new water and process technologies contracts,
generating a customized services backlog of more than $50
million while driving new growth in pure water outsourcing,
emergency mobile water and equipment, with customers in the
transportation, chemical, power, hydro-carbon processing,
energy and microprocessing industries.
Advanced Materials
-- Introduced new LNP(TM) resin additives used to manufacture
self-lubricating, wear-resistant gears for sectors as diverse
as consumer electronics, automotive, power tools and
appliances.
-- Introduced a tough, custom-colorable thermoplastic compound
for the electronics industry with permanent antistatic and
electrostatic-dissipative properties.
Consumer & Industrial
-- Named The Home Depot's 2004 "Partner of the Year" in the
Kitchen and Bath Department for consistently outstanding
performance.
-- Began rolling out a lighting products program for all of The
Home Depot's 1,500-plus U.S.-based stores.
-- Increased margins on high-end Monogram(R) and Profile(TM)
appliances by 39% and 24% respectively over third quarter
2003.
-- Increased margins through several new product launches
including the new Profile 42" Built-In Refrigerator, Monogram
Integrated Dishwasher, Transformore(TM) Transformer and
several stainless steel appliance upgrades.
-- Completed the disposition of the Commercial AC motor business
to Regal-Beloit Corporation.
GE (NYSE: GE) is a diversified technology, media and financial
services company dedicated to creating products that make life better.
>From aircraft engines and power generation to financial services,
medical imaging, television programming, and plastics, GE operates in
more than 100 countries and employs more than 300,000 people
worldwide. For more information, visit the company's Web site at
http://www.ge.com.
Caution Concerning Forward-Looking Statements
This document contains "forward-looking statements" - that is,
statements related to future, not past, events. In this context,
forward-looking statements often address our expected future business
and financial performance, and often contain words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," or "will."
Forward-looking statements by their nature address matters that are,
to different degrees, uncertain. For us, particular uncertainties
arise from the behavior of financial markets, including fluctuations
in interest rates and commodity prices, from future integration of
acquired businesses, from future financial performance of major
industries which we serve, including, without limitation, the air and
rail transportation, energy generation and healthcare industries, from
unanticipated loss development in our insurance businesses, and from
numerous other matters of national, regional and global scale,
including those of a political, economic, business, competitive or
regulatory nature. These uncertainties may cause our actual future
results to be materially different than those expressed in our
forward-looking statements. We do not undertake to update our
forward-looking statements.
GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
Consolidated
-----------------------------------
Three months ended September 30 2004 2003 V%
------------------------------- -----------------------------------
Revenues
Sales of goods and services $21,607 $16,925
Earnings of GECS before
accounting change - -
GECS revenues from services 16,476 16,263
Other income 189 206
-------------------------
Total revenues 38,272 33,394 15%
-------------------------
Costs and expenses
Cost of sales, operating and
administrative expenses 25,328 20,245
Interest and other financial
charges 2,943 2,723
Insurance losses and
policyholder and annuity
benefits 3,858 4,168
Provision for losses on
financing receivables 785 1,061
Minority interest in net
earnings of consolidated
affiliates 269 77
-------------------------
Total costs and
expenses 33,183 28,274 17%
-------------------------
Earnings before income taxes
and accounting change 5,089 5,120
Provision for income taxes (1,038) (1,099)
-------------------------
Earnings before accounting
change $4,051 $4,021 1%
Cumulative effect of accounting
change - (372)
-------------------------
Net earnings $4,051 $3,649 11%
=========================
Per-share amounts before
accounting change
Diluted earnings per share $0.38 $0.40 (5)%
Total average equivalent
shares 10,610 10,085 5%
Basic earnings per share $0.38 $0.40 (5)%
Total average equivalent
shares 10,566 10,031 5%
Per-share amounts after
accounting change
Diluted earnings per share $0.38 $0.36 6%
Total average equivalent
shares 10,610 10,085 5%
Basic earnings per share $0.38 $0.36 6%
Total average equivalent
shares 10,566 10,031 5%
Dividends declared per share $0.20 $0.19
GE Financial Services
(GECS)
--------------------------------- -------------------
Three months ended
September 30 2004 2003 V% 2004 2003 V%
-------------------- -------- -------- --- ------- ------- ---
Revenues
Sales of
goods and
services $20,967 $16,463 $706 $527
Earnings of
GECS before
accounting
change 2,233 2,207 - -
GECS
revenues
from
services - - 16,843 16,480
Other income 193 235 - -
-------- -------- ------- -------
Total
revenues 23,393 18,905 24% 17,549 17,007 3%
-------- -------- ------- -------
Costs and
expenses
Cost of sales,
operating and
administrative
expenses 18,394 14,136 7,204 6,303
Interest and
other
financial
charges 355 282 2,703 2,558
Insurance
losses and
policyholder
and annuity
benefits - - 3,910 4,168
Provision for
losses on
financing
receivables - - 785 1,061
Minority
interest in
net earnings
of
consolidated
affiliates 143 44 126 33
-------- -------- ------- -------
Total
costs
and
expenses 18,892 14,462 31% 14,728 14,123 4%
-------- -------- ------- -------
Earnings before
income taxes and
accounting change 4,501 4,443 2,821 2,884
Provision for
income taxes (450) (422) (588) (677)
-------- -------- ------- -------
Earnings before
accounting
change $4,051 $4,021 1% $2,233 $2,207 1%
Cumulative effect of
accounting change - (372) - (339)
-------- -------- ------- -------
Net earnings $4,051 $3,649 11% $2,233 $1,868 20%
======== ======== ======= =======
Consolidated
----------------------------------
Nine months ended September 30 2004 2003 V%
----------------------------------------------------------------------
Revenues
Sales of
goods and
services $59,372 $51,210
Earnings of GECS before
accounting change - -
GECS revenues from services 48,635 45,604
Other income 650 409
---------------------
Total
revenues 108,657 97,223 12%
---------------------
Costs and
expenses
Cost of sales, operating and
administrative expenses 71,630 59,415
Interest and other financial
charges 8,503 8,002
Insurance losses and
policyholder and annuity
benefits 11,190 12,409
Provision for losses on
financing receivables 2,744 2,799
Minority interest in net
earnings of consolidated
affiliates 539 219
---------------------
Total
costs
and
expenses 94,606 82,844 14%
---------------------
Earnings before income taxes and
accounting changes 14,051 14,379
Provision for
income taxes (2,836) (3,350)
---------------------
Earnings before accounting changes $11,215 $11,029 2%
Cumulative effect of accounting
changes - (587)
---------------------
Net earnings $11,215 $10,442 7%
=====================
Per-share amounts before accounting changes
Diluted
earnings
per share $1.08 $1.10 (2)%
Total average equivalent shares 10,398 10,065 3%
Basic
earnings
per share $1.08 $1.10 (2)%
Total average equivalent shares 10,353 10,007 3%
Per-share amounts after accounting changes
Diluted
earnings
per share $1.08 $1.04 4%
Total average equivalent shares 10,398 10,065 3%
Basic
earnings
per share $1.08 $1.04 4%
Total average equivalent shares 10,353 10,007 3%
Dividends
declared per
share $0.60 $0.57
GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
Financial
Services
GE (GECS)
------------------------------ -------------------
Nine months ended
September 30 2004 2003 V% 2004 2003 V%
------------------ -------- -------- --- ------- ------- ---
Revenues
Sales of goods
and services $57,642 $49,861 $2,010 $1,582
Earnings of GECS
before accounting
change 5,774 5,479 - -
GECS revenues
from services - - 49,615 46,179
Other income 660 458 - -
-------- -------- ------- -------
Total
revenues 64,076 55,798 15% 51,625 47,761 8%
-------- -------- ------- -------
Costs and
expenses
Cost of sales,
operating and
administrative
expenses 50,555 41,885 21,861 18,130
Interest and
other
financial
charges 643 705 8,192 7,554
Insurance
losses and
policyholder
and annuity
benefits - - 11,342 12,409
Provision for
losses on
financing
receivables - - 2,744 2,799
Minority
interest in
net earnings
of
consolidated
affiliates 291 123 248 96
-------- -------- ------- -------
Total
costs
and
expenses 51,489 42,713 21% 44,387 40,988 8%
-------- -------- ------- -------
Earnings before
income taxes and
accounting changes 12,587 13,085 7,238 6,773
Provision for
income taxes (1,372) (2,056) (1,464) (1,294)
-------- -------- ------- -------
Earnings before
accounting changes $11,215 $11,029 2% $5,774 $5,479 5%
Cumulative effect of
accounting changes - (587) - (339)
----------------- ---------------
Net earnings $11,215 $10,442 7% $5,774 $5,140 12%
================= ===============
Dollar amounts and share amounts in millions; per-share amounts in
dollars; unaudited. Supplemental consolidating data are shown for "GE"
and "Financial Services (GECS)." Transactions between GE and GECS have
been eliminated from the "consolidated" columns. See note 1 to the
consolidated financial statements in the 2003 Annual Report to
Shareowners for further information about consolidation matters.
Summary of Operating Segments (unaudited)
General Electric Company and Consolidated Affiliates
Three Months Ended Nine Months Ended
September 30 September 30
---------------------- -----------------------
(Dollars in millions) 2004 2003 V% 2004 2003 V%
------- ------- ---- -------- ------- ----
Revenues
Advanced Materials $ 2,035 $ 1,739 17 $ 5,968 $ 5,158 16
Commercial Finance 6,028 5,205 16 17,151 15,161 13
Consumer Finance 4,011 3,499 15 11,430 9,304 23
Consumer &
Industrial 3,423 3,212 7 10,010 9,386 7
Energy 4,113 4,343 (5) 12,096 13,374 (10)
Equipment & Other
Services 1,966 1,479 33 5,993 3,312 81
Healthcare 3,330 2,336 43 9,197 6,878 34
Infrastructure 857 797 8 2,495 2,233 12
Insurance 5,544 6,824 (19) 17,051 19,984 (15)
NBC Universal 4,096 1,517 F 8,545 4,943 73
Transportation 3,777 3,156 20 11,085 9,524 16
Corporate items and
eliminations (908) (713) (27) (2,364) (2,034) (16)
------- ------- -------- -------
Consolidated revenues $38,272 $33,394 15 $108,657 $97,223 12
======= ======= ======== =======
Segment profit (a)
Advanced Materials $ 131 $ 159 (18) $ 463 $ 415 12
Commercial Finance 1,246 1,060 18 3,176 2,762 15
Consumer Finance 681 595 14 1,883 1,655 14
Consumer & Industrial 163 124 31 516 425 21
Energy 639 986 (35) 1,923 2,941 (35)
Equipment & Other
Services 186 (52) F 132 (562) F
Healthcare 503 383 31 1,426 1,129 26
Infrastructure 146 132 11 393 331 19
Insurance 120 604 (80) 583 1,624 (64)
NBC Universal 536 431 24 1,698 1,462 16
Transportation 773 604 28 2,220 1,846 20
------- ------- -------- -------
Total segment
profit 5,124 5,026 2 14,413 14,028 3
GE corporate items and
eliminations (268) (301) 11 (1,183) (238) U
GE interest and other
financial charges (355) (282) (26) (643) (705) 9
GE provision for
income taxes (450) (422) (7) (1,372) (2,056) 33
------- ------- -------- -------
Earnings before
accounting change 4,051 4,021 1 11,215 11,029 2
Cumulative effect of
accounting change - (372) - (587)
------- ------- -------- -------
Consolidated net
earnings $ 4,051 $ 3,649 11 $ 11,215 $10,442 7
======= ======= ======== =======
(a) Segment profit always excludes the effects of principal pension
plans and accounting changes, and may exclude matters such as
charges for restructuring; rationalization and other similar
expenses; in-process research and development and certain other
acquisition-related charges; certain gains/losses from
dispositions; and litigation settlements or other charges,
responsibility for which precedes the current management team.
Segment profit excludes or includes interest and other financial
charges and segment income taxes according to how a particular
segment management is measured - excluded in determining operating
profit for Advanced Materials, Consumer & Industrial, Energy,
Healthcare, Infrastructure, NBC Universal, and Transportation, but
included in determining net earnings for Commercial Finance,
Consumer Finance, Equipment & Other Services, and Insurance.
Condensed Statement of Financial Position
General Electric Company and consolidated affiliates
(Dollars in billions)
Consolidated GE Financial Services
(GECS)
------------------- ------------------ ------------------
Assets 9/30/04 12/31/03 9/30/04 12/31/03 9/30/04 12/31/03
--------- --------- -------- --------- -------- ---------
Cash &
marketable
securities $135.4 $135.0 $1.8 $2.0 $133.7 $133.2
Receivables 12.5 10.7 12.7 11.0 - -
Inventories 9.7 8.8 9.5 8.6 0.2 0.2
GECS
financing
receivables
- net 253.3 247.9 - - 253.3 247.9
Plant &
equipment -
net 61.4 53.4 16.1 14.6 45.3 38.8
Investment in
GECS - - 49.0 45.3 - -
Goodwill &
intangible
assets 81.4 55.0 54.0 30.2 27.4 24.8
Other assets 150.9 136.7 38.1 30.4 117.5 109.6
--------- --------- -------- -------- --------- ---------
Total assets $704.6 $647.5 $181.2 $142.1 $577.4 $554.5
========= ========= ======== ======== ========= =========
Liabilities
and equity
Borrowings $339.5 $329.7 $11.3 $10.9 $329.5 $320.3
Insurance
reserves 138.2 136.3 - - 138.5 136.3
Other
liabilities
& minority
interest 125.1 102.3 68.1 52.0 60.4 52.6
Shareowners'
equity 101.8 79.2 101.8 79.2 49.0 45.3
--------- --------- -------- -------- --------- ---------
Total
liabilities
and equity $704.6 $647.5 $181.2 $142.1 $577.4 $554.5
========= ========= ======== ======== ========= =========
September 30, 2004 information is unaudited. Supplemental
consolidating data are shown for "GE" and "Financial Services (GECS)."
Transactions between GE and GECS have been eliminated from the
"consolidated" columns. See note 1 to the consolidated financial
statements in the 2003 Annual Report to Shareowners for further
information about consolidation matters.
Financial Measures That Supplement GAAP
----------------------------------------------------------------------
General Electric Company and Consolidated Affiliates
We sometimes refer to data derived from consolidated financial
information but not required by GAAP to be presented in financial
statements. Certain of these data are considered "non-GAAP financial
measures" under SEC regulations. Specifically, we have referred to:
-- Earnings and earnings per share growth excluding the impact of
GE's insurance portfolio repositioning and earnings from GE's
principal pension plans;
-- Organic Industrial sales growth; and
-- Increase in Industrial CFOA in the first nine months of 2004.
Reconciliation of these non-GAAP financial measures to their most
directly comparable GAAP financial measures - reported earnings before
accounting change, earnings per share, Industrial sales growth and
cash from operating activities - follow.
(Dollars in millions; per-share amounts in dollars)
THREE MONTHS ENDED
SEPTEMBER 30
----------------------
2004 2003 V%
-------- -------- ---
Earnings before accounting change $4,051 $4,021
-------- --------
Less: Impact of insurance portfolio
repositioning
Total Insurance segment 120 604
Less: Insurance Solutions (Formerly
ERC) (39) 120
-------- --------
Impact of insurance portfolio
repositioning 159 484
Less: Earnings from GE's principal pension
plans 25 102
-------- --------
Earnings excluding impact of insurance
portfolio repositioning and earnings from GE's
principal pension plans $3,867 $3,435 13%
======== ========
EPS excluding impact of insurance portfolio
repositioning and earnings from GE's principal
pension plans $0.36 $0.34 6%
THREE MONTHS ENDED
SEPTEMBER 30
----------------------
2004 2003 V%
-------- -------- ---
Industrial sales as reported $20,967 $16,463
Less: Effects of acquisitions/dispositions and
currency exchange on Industrial sales 2,727 180
-----------------
Industrial sales excluding the effects of
acquisitions/dispositions and currency
exchange (Organic Industrial Sales) $18,240 $16,283 12%
=================
NINE MONTHS ENDED
SEPTEMBER 30
----------------------
2004 2003 V%
-------- -------- ---
Cash from GE's operating activities as reported $9,708 $7,378
Less: GECS dividends 2,064 1,252
-----------------
Cash from GE's operating activities excluding
dividends from GECS (Industrial CFOA) $7,644 $6,126 25%
=================
We believe that meaningful analysis of our financial performance
requires an understanding of the factors underlying that performance
and our judgments about the likelihood that particular factors will
repeat. In some cases, short-term patterns and long-term trends may be
obscured by large factors or events. For example, events or trends in
a particular segment may be so significant as to obscure patterns and
trends of our industrial or financial services businesses in total.
For this reason, we believe that investors may find it useful to see
our third quarter 2004 earnings and earnings per share without the
impact of insurance portfolio repositioning and the decline in
earnings from our principal pension plans. Similarly, we believe
presentation of third quarter 2004 growth in Industrial sales without
the effects of acquisitions, dispositions, and currency exchange is
useful to investors. We also believe that investors would find it
useful to compare our cash flow from operating activities for the
first nine months of 2004 against the comparable period of 2003
without the impact of GECS dividends, principally proceeds from the
Genworth initial public offering in 2004 and other business
dispositions in 2003.
CONTACT: General Electric, Fairfield
David Frail, 203-373-3387
david.frail@ge.com
