management’s discussion and analysis ($0.1 billion), partially offset by the effects of the 2004 disposition of IT Solutions ($0.4 billion). Segment profit rose 35%, or $0.6 billion, at the industrial businesses in the segment in 2005 as price increases ($1.5 billion) and higher volume ($0.1 billion) more than offset higher material and other costs ($0.8 billion), primarily from commodities such as benzene and natural gas at Plastics, and lower productivity ($0.2 billion). Segment profi t at Equipment Services also increased as a result of improved operating performance, reflecting core growth ($0.1 billion). See Corporate Items and Eliminations for a discussion of items not allocated to this segment. CORPORATE ITEMS AND ELIMINATIONS (In millions) 2006 2005 2004 REVENUES Insurance activities $ 3,692 $ 4,183 $4,003 GECS commercial paper interest rate swap adjustment 197 540 518 Eliminations and other 278 (1,105) 75 Total $ 4,167 $ 3,618 $4,596 OPERATING PROFIT (COST) Insurance activities $ 57 $ 159 $ 5 Principal pension plans (877) (329) 124 Underabsorbed corporate overhead (269) (464) (498) GECS commercial paper interest rate swap adjustment 130 358 341 Other (292) (306) 17 Total $(1,251) $ (582) $ (11) Corporate Items and Eliminations include the effects of eliminating transactions between operating segments results of our insurance activities remaining in continuing operations cost of, and cost reductions from, our principal pension plans results of liquidating businesses such as consolidated, liquidating securitization entities underabsorbed corporate overhead certain non-allocated amounts described below and a variety of sundry items. Corporate Items and Eliminations is not an operating segment. Rather, it is added to operating segment totals to reconcile to consolidated totals on the fi nancial statements. Certain amounts included in the line “Other” above are not allocated to GE operating segments because they are excluded from the measurement of their operating performance for internal purposes. In 2006, amounts not allocated to GE operating segments included $0.2 billion at NBC Universal, principally for technology and product development costs and restructuring charges $0.2 billion at Industrial for restructuring and other charges and $0.1 billion at Healthcare, principally for acquisition-related, restructuring and other charges. In 2004, these comprised $0.4 billion of Healthcare charges, principally related to the write- off of in-process research and development projects and other transitional costs associated with Amersham and a $0.1 billion charge at Industrial as the gain on sale of the motors business was more than offset by costs for inventory obsolescence and other charges. Other operating profit (cost) also reflects gains of $0.7 billion in 2006 from sales of business interests, principally Advanced Materials and GE Supply, as well as $0.1 billion and $0.3 billion from partial sales of an interest in Genpact in 2005 and 2004, respectively. We have ongoing commercial and fi nancial relation- ships with these former affi liates. DISCONTINUED INSURANCE OPERATIONS (In millions) 2006 2005 2004 Earnings (loss) from discontinued operations, net of taxes $163 $(1,950) $559 Discontinued operations comprise GE Life, our U.K.-based life insurance operation the property and casualty insurance and reinsurance businesses and the European life and health opera- tions of GE Insurance Solutions and most of its affi liates and Genworth, our formerly wholly-owned subsidiary that conducted most of our consumer insurance business, including life and mortgage insurance operations. Results of these businesses are reported as discontinued operations for all periods presented. In December 2006, we completed the sale of GE Life to Swiss Re for $0.9 billion. As a result, we recognized a loss of $0.3 billion after tax during 2006. In June 2006, we completed the sale of the property and casualty insurance and reinsurance businesses and the European life and health operations of GE Insurance Solutions to Swiss Re for $9.3 billion, including the assumption of $1.7 billion of debt. We received $5.4 billion in cash and $2.2 billion of newly issued Swiss Re common stock, representing a 9% interest in Swiss Re. In May 2004, we completed the initial public offering of Genworth. Throughout 2005, we continued to reduce our owner- ship in Genworth. In March 2006, we completed the sale of our remaining 18% investment, through a secondary public offering of 71 million shares of Class A Common Stock and direct sale to Genworth of 15 million shares of Class B Common Stock. Earnings from discontinued operations, net of taxes, in 2006 were $0.2 billion, reflecting earnings from GE Insurance Solutions through the date of disposal ($0.3 billion), the gain on the sale of our remaining 18% investment in Genworth ($0.2 billion) and earnings from GE Life through the date of disposal ($0.1 billion), partially offset by the losses on disposal of GE Life ($0.3 billion) and GE Insurance Solutions ($0.1 billion). Loss from discontinued operations, net of taxes, in 2005 was $1.9 billion, reflecting losses from the portions of GE Insurance Solutions described above ($2.8 billion), partially offset by earnings from, and gains on the sale of, Genworth ($0.9 billion). Earnings from discontinued operations, net of taxes, in 2004 were $0.6 billion, reflecting earnings of Genworth ($0.4 billion), including our share of 2004 earnings from operations ($0.8 billion), partially offset by the loss on the Genworth initial public offering in May 2004 ($0.3 billion), and earnings from GE Insurance Solutions ($0.1 billion), primarily 2004 operations. For additional information related to discontinued operations, see note 2. 56 ge 2006 annual report

management’s discussion and analysis Global 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 outsourc- ing, expansion of industrial and financial services activities through purchases of companies or assets at reduced prices and lower U.S. debt fi nancing costs. Estimated results of global activities include the results of our operations located outside the United States plus all U.S. exports. We classify certain GECS operations that cannot meaningfully be associated with specific geographic areas as “Other Global” for this purpose. GLOBAL REVENUES BY REGION (In millions) 2006 2005 2004 Europe $39,700 $34,600 $31,700 Pacific Basin 18,000 16,000 13,000 Americas 9,600 7,500 7,000 Other Global 7,000 6,100 5,700 74,300 64,200 57,400 Exports from the U.S. to external customers 13,100 11,400 8,800 Total(a) $87,400 $75,600 $66,200 (a) Included $7.7 billion, $6.6 billion and $5.8 billion of intercompany revenues in 2006, 2005 and 2004, respectively. Global revenues rose 16% to $87.4 billion in 2006, compared with $75.6 billion and $66.2 billion in 2005 and 2004, respec- tively. Global revenues to external customers as a percentage of consolidated revenues were 49% in 2006, compared with 47% and 45% in 2005 and 2004, respectively. The effects of currency fluctuations on reported results were to decrease revenues by $0.1 billion in 2006 and increase revenues by $0.9 billion and $4.1 billion in 2005 and 2004, respectively and to increase earn- ings by $0.1 billion in both 2005 and 2004, compared with an inconsequential effect on earnings in 2006. GE global revenues in 2006 were $56.5 billion, up 17% over 2005, led by increases at Infrastructure, primarily in Europe and the Americas. U.S. exports grew 14% in 2006 on strong growth led by Infrastructure, again showing strength in Europe and the Americas. GE global revenues were $48.2 billion in 2005, up 15% over 2004, led by increases at Infrastructure and NBC Universal, mainly in Europe and the Pacific Basin. Exports from the U.S. were up 30%, led by Infrastructure, again showing strength in Europe and the Pacifi c Basin. 2006 GLOBAL REVENUES BY REGION A. Europe 54% B. Pacific Basin 24% C. Americas 13% D. Other Global 9% GECS global revenues rose 12% to $30.9 billion in 2006, compared with $27.4 billion and $24.5 billion in 2005 and 2004, respectively. GECS revenues in Other Global increased 21% in 2006, primarily as a result of organic revenue growth at the Aviation Financial Services business of Infrastructure. GECS revenues increased 19% in the Americas, primarily as a result of organic revenue growth and acquisitions at Commercial Finance and GE Money, partially offset by dispositions at Commercial Finance. GECS revenues increased 10% in Europe, primarily as a result of organic revenue growth and acquisitions at Commercial Finance and GE Money, partially offset by results of our remaining insurance activities. Global operating profit was $15.2 billion in 2006, an increase of 20% over 2005, which was 20% higher than in 2004. GE global operating profit in 2006 rose 18%, primarily from gains on the sale of Advanced Materials in the Pacific Basin and core growth in Europe, primarily at Infrastructure. 2006 GLOBAL ASSETS BY REGION A. Europe 53% B. Pacific Basin 22% C. Americas 10% D. Other Global 15% Total assets of global operations on a continuing basis were $344.9 billion in 2006, an increase of $59.9 billion, or 21%, over 2005. GECS global assets on a continuing basis of $305.9 billion at the end of 2006 were 24% higher than at the end of 2005, reflecting core growth and acquisitions in Europe, the Pacifi c Basin and the Americas, primarily at Commercial Finance and GE Money. Financial results of our global activities reported in U.S. dollars are affected by currency exchange. We use a number of techniques 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. ge 2006 annual report 57