A. Results of Operations

General Electric Company's consolidated financial statements represent the combination of the industrial manufacturing and product services businesses of General Electric Company (GE) and the financial services businesses of General Electric Capital Services, Inc. (GECS or financial services).

In the accompanying analysis of financial information, we sometimes use information derived from consolidated financial information but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered "non-GAAP financial measures" under the U.S. Securities and Exchange Commission (SEC) rules. For such measures, we have provided supplemental explanations and reconciliations in Exhibit 99(a) to this Form 10-Q Report.

Unless otherwise indicated, we refer to captions such as revenues and earnings from continuing operations attributable to the Company simply as "revenues" and "earnings" throughout this Management's Discussion and Analysis. Similarly, discussion of other matters in our condensed, consolidated financial statements relates to continuing operations unless otherwise indicated.

Overview

Earnings from continuing operations attributable to the Company decreased 45% to $2.454 billion in the third quarter of 2009 compared with $4.477 billion in the third quarter of 2008. Earnings per share (EPS) from continuing operations were $0.22 in the third quarter of 2009, down 51% compared with $0.45 in the third quarter of 2008.

For the first nine months of 2009, earnings from continuing operations attributable to the Company decreased 42% to $8.187 billion compared with $14.222 billion for the same period in 2008. EPS from continuing operations were $0.75 in the first nine months of 2009, down 47% compared with $1.42 in the first nine months of 2008.

Earnings from discontinued operations, net of taxes, was an insignificant amount in the third quarter of 2009 compared with a loss of $0.2 billion in the third quarter of 2008, and included the results of GE Money Japan (our Japanese personal loan business, Lake, and Japanese mortgage and card businesses, excluding our investment in GE Nissen Credit Co., Ltd.), our U.S. mortgage business (WMC), Plastics, Advanced Materials, most of GE Insurance Solutions Corporation (GE Insurance Solutions), GE Life and Genworth Financial, Inc. (Genworth).

Loss from discontinued operations, net of taxes, was $0.2 billion for the first nine months of 2009 compared with $0.5 billion for the same period in 2008.

Net earnings attributable to GE common shareowners decreased 44% to $2.419 billion and EPS decreased 47% to $0.23 in the third quarter of 2009 compared with $4.312 billion and $0.43, respectively, in the third quarter of 2008.

For the first nine months of 2009, net earnings attributable to GE common shareowners decreased 43% to $7.787 billion, compared with $13.688 billion for the same period in 2008, and EPS decreased 47% to $0.73, compared with $1.37 in the first nine months of 2008.

Revenues of $37.8 billion in the third quarter of 2009 were 20% lower than in the third quarter of 2008, reflecting organic revenue declines, the stronger U.S. dollar, the lack of a current-year counterpart to the third quarter 2008 Olympics broadcasts and the net effects of acquisitions and dispositions, including the effect of the deconsolidation of Penske Truck Leasing Co., L.P. (PTL). Industrial sales decreased 13% to $25.1 billion, reflecting organic revenue declines, the lack of a current-year counterpart to the third quarter 2008 Olympics broadcasts and the stronger U.S. dollar. Sales of product services (including sales of spare parts and related services) of $8.5 billion in the third quarter of 2009 were about the same compared with the third quarter of 2008. Financial services revenues decreased 31% over the comparable period of last year to $12.7 billion, reflecting organic revenue declines, the net effects of acquisitions and dispositions and the stronger U.S. dollar.

Revenues of $115.3 billion for the first nine months of 2009 were 15% lower than revenues of $136.3 billion for the first nine months of 2008, reflecting organic revenue declines, the stronger U.S. dollar, the net effects of acquisitions and dispositions (including the effect of the deconsolidation of PTL) and the lack of a current-year counterpart to the third quarter 2008 Olympics broadcasts. Industrial sales of $75.2 billion were 7% lower than in 2008 reflecting organic revenue declines, the stronger U.S. dollar and the lack of a current-year counterpart to the 2008 Olympics broadcasts. Financial services revenues for the first nine months of 2009 decreased 27% to $40.7 billion as a result of organic revenue declines, the stronger U.S. dollar and the net effects of acquisitions and dispositions.

Overall, acquisitions contributed $0.9 billion and $1.7 billion to consolidated revenues in the third quarters of 2009 and 2008, respectively. Our consolidated earnings in the third quarters of 2009 and 2008 included approximately $0.1 billion and $0.2 billion, respectively, from acquired businesses. We integrate acquisitions as quickly as possible. Only revenues and earnings from the date we complete the acquisition through the end of the fourth following quarter are attributed to such businesses. Dispositions also affected our operations through lower revenues of $1.5 billion and $0.1 billion in the third quarters of 2009 and 2008, respectively. The effect of dispositions on earnings was an insignificant amount in both the third quarters of 2009 and 2008.

Acquisitions contributed $3.5 billion and $6.1 billion to consolidated revenues in the first nine months of 2009 and 2008, respectively. Our consolidated net earnings in the first nine months of 2009 and 2008 included approximately $0.9 billion and $0.6 billion, respectively, from acquired businesses. Dispositions also affected our operations through lower revenues of $3.6 billion in the first nine months of 2009 and higher revenues of $0.3 billion in the first nine months of 2008. The effect of dispositions on earnings was an increase of $0.4 billion in both the first nine months of 2009 and 2008.

The most significant acquisitions affecting results in 2009 were CitiCapital, BAC Credomatic (BAC), Interbanca S.p.A. and Bank BPH at Capital Finance; Airfoils Technologies International - Singapore Pte. Ltd. (ATI-Singapore) and Vital Signs, Inc. at Technology Infrastructure; and Hydril Pressure Control at Energy Infrastructure.

Segment Operations

Operating segments comprise our five businesses focused on the broad markets they serve: Energy Infrastructure, Technology Infrastructure, NBC Universal, Capital Finance and Consumer & Industrial.

Segment profit is determined based on internal performance measures used by the Chief Executive Officer to assess the performance of each business in a given period. In connection with that assessment, the Chief Executive Officer may exclude matters such as charges for restructuring; rationalization and other similar expenses; in-process research and development and certain other acquisition-related charges and balances; technology and product development costs; certain gains and losses from acquisitions or dispositions; and litigation settlements or other charges, responsibility for which preceded the current management team.

Segment profit always excludes the effects of principal pension plans, results reported as discontinued operations, earnings attributable to noncontrolling interests of consolidated subsidiaries and accounting changes. Segment profit excludes or includes interest and other financial charges and income taxes according to how a particular segment's management is measured - excluded in determining segment profit, which we sometimes refer to as "operating profit," for Energy Infrastructure, Technology Infrastructure, NBC Universal and Consumer & Industrial; included in determining segment profit, which we sometimes refer to as "net earnings," for Capital Finance.

We have reclassified certain prior-period amounts to conform to the current-period's presentation. In addition to providing information on segments in their entirety, we have also provided supplemental information for certain businesses within the segments.

Energy Infrastructure
                                Three months ended           Nine months ended
                                   September 30                 September 30
(In millions)                     2009           2008          2009          2008

Revenues                     $   8,917      $   9,769     $  26,733     $  27,164

Segment profit               $   1,582      $   1,425     $   4,646     $   4,074

Revenues
  Energy(a)                  $   7,128      $   8,015     $  21,872     $  22,283
  Oil & Gas                      1,953          1,891         5,444         5,321

Segment profit
  Energy(a)                  $   1,273      $   1,143     $   3,965     $   3,426
  Oil & Gas                        338            305           800           721

(a) Effective January 1, 2009, our Water business was combined with Energy. Prior-period amounts were reclassified to conform to the current-period's presentation.

Energy Infrastructure revenues decreased 9%, or $0.9 billion, in the third quarter of 2009 as lower volume ($0.8 billion), the stronger U.S. dollar ($0.2 billion) and lower other income ($0.1 billion), primarily related to the lack of a current-year counterpart to transaction gains, were partially offset by higher prices ($0.3 billion). Lower volume at Energy related to decreases in equipment sales was partially offset by higher volume at Oil & Gas, primarily related to increases in equipment sales. The effects of the stronger U.S. dollar were at both Oil & Gas and Energy. Higher prices were primarily at Energy.

Segment profit increased 11%, or $0.2 billion, as higher prices ($0.3 billion) and lower material and other costs ($0.1 billion) were partially offset by lower other income ($0.2 billion), primarily related to the lack of a current-year counterpart to transaction gains, and lower volume ($0.1 billion). Lower material and other costs were primarily at Energy. The decrease in volume was at Energy.

Energy Infrastructure revenues decreased 2%, or $0.4 billion, in the first nine months of 2009 as higher prices ($1.0 billion) and higher volume ($0.1 billion), including customer contract termination fees, were more than offset by the stronger U.S. dollar ($1.0 billion) and lower other income ($0.5 billion), primarily related to marks on foreign currency contracts and the lack of a current-year counterpart to transaction gains. The increase in price was primarily at Energy. The increase in volume reflected increased equipment sales at Oil & Gas, partially offset by decreased equipment sales at Energy. The effects of the stronger U.S. dollar were at both Oil & Gas and Energy.

Segment profit for the first nine months of 2009 increased 14%, or $0.6 billion, as higher prices ($1.0 billion), lower material and other costs ($0.2 billion) and the effects of productivity ($0.1 billion) were partially offset by lower other income ($0.6 billion), primarily related to marks on foreign currency contracts and the lack of a current-year counterpart to transaction gains, and the stronger U.S. dollar ($0.1 billion). Lower material and other costs were primarily at Energy, while the effects of productivity were primarily at Oil & Gas. The effects of the stronger U.S. dollar were at Oil & Gas. Included in segment results was a decrease of $0.2 billion to revenues and $0.1 billion to segment profit related to a change in estimate of measuring progress towards long-term contract completion at Vetco Gray.

Technology Infrastructure
                                Three months ended          Nine months ended
                                   September 30                September 30
(In millions)                     2009          2008          2009          2008

Revenues                     $  10,209     $  11,450     $  31,200     $  33,761

Segment profit               $   1,748     $   1,900     $   5,384     $   5,657

Revenues
  Aviation                   $   4,542     $   4,841     $  13,978     $  14,084
  Enterprise Solutions             904         1,192         2,735         3,532
  Healthcare                     3,801         4,191        11,310        12,569
  Transportation                   970         1,256         3,210         3,606

Segment profit
  Aviation                   $     970     $     834     $   2,973     $   2,523
  Enterprise Solutions             103           187           295           503
  Healthcare                       508           634         1,509         1,909
  Transportation                   177           255           630           750

Technology Infrastructure revenues decreased 11%, or $1.2 billion, in the third quarter of 2009 as lower volume ($1.2 billion), the stronger U.S. dollar ($0.1 billion) and lower other income ($0.1 billion) were partially offset by higher prices ($0.1 billion). The decrease in volume was across all businesses in the segment. The effects of the stronger U.S. dollar were primarily at Healthcare. Higher prices were primarily at Aviation.

Segment profit decreased 8%, or $0.2 billion, primarily from lower volume ($0.2 billion) and lower other income ($0.1 billion), partially offset by higher prices ($0.1 billion). The decrease in volume was across all businesses in the segment.

Technology Infrastructure revenues decreased 8%, or $2.6 billion, in the first nine months of 2009 as lower volume ($2.5 billion) and the stronger U.S. dollar ($0.7 billion) were partially offset by higher prices ($0.4 billion) and gains related to acquisitions and dispositions ($0.4 billion), including the ATI-Singapore acquisition and the Times Microwave Systems disposition. The decrease in volume was across all businesses in the segment. The effects of the stronger U.S. dollar were at Healthcare, Enterprise Solutions and Aviation. Higher prices, primarily at Aviation, were partially offset by lower prices at Healthcare.

Segment profit for the first nine months of 2009 decreased 5%, or $0.3 billion, primarily from lower volume ($0.6 billion), lower productivity ($0.1 billion), higher labor and other costs ($0.1 billion) and the stronger U.S. dollar ($0.1 billion), partially offset by higher prices ($0.4 billion) and gains related to acquisitions and dispositions ($0.4 billion), including the ATI-Singapore acquisition and the Times Microwave Systems disposition. The decrease in volume was across all businesses in the segment. The effects of productivity at Transportation, Healthcare and Enterprise Solutions were partially offset by Aviation.

NBC Universal revenues of $4.1 billion decreased 20%, or $1.0 billion, in the third quarter of 2009 as lower revenues in our broadcast television business ($1.0 billion), reflecting the lack of a current-year counterpart to the 2008 Olympics broadcasts and the effects of lower advertising revenues, lower revenues in film ($0.3 billion) and lower earnings and higher impairments related to associated companies ($0.3 billion) were partially offset by a gain relating to A&E Television Network (AETN) ($0.6 billion) and higher revenues in cable ($0.1 billion). During the third quarter of 2009, Lifetime Entertainment Services was contributed by third parties to AETN (in which we hold an equity method investment). As a result, our ownership in AETN was diluted from 25.0% to 15.8%, resulting in a pre-tax gain of $0.6 billion which is reported in other income. Segment profit of $0.7 billion increased 13%, or $0.1 billion, as the gain related to AETN ($0.6 billion) and higher earnings in our broadcast television business ($0.2 billion), reflecting the lack of a current-year counterpart to losses from the 2008 Olympics broadcasts which more than offset the effects of lower advertising revenues, were partially offset by lower earnings and higher impairments related to associated companies ($0.3 billion), lower earnings in film ($0.2 billion) and lack of current-year counterpart to 2008 proceeds from insurance claims ($0.1 billion).

NBC Universal revenues of $11.2 billion for the first nine months of 2009 decreased 11%, or $1.4 billion, compared to the comparable period of 2008 as lower revenues in our broadcast television business ($1.1 billion), reflecting the lack of a current-year counterpart to the 2008 Olympics broadcasts and the effects of lower advertising revenues, lower earnings and higher impairments related to associated companies and investment securities ($0.6 billion) and lower revenues in film ($0.4 billion) were partially offset by the gain relating to AETN ($0.6 billion) and higher revenues in cable ($0.2 billion). Segment profit of $1.7 billion decreased 27%, or $0.6 billion, as lower earnings and higher impairments related to associated companies and investment securities ($0.6 billion), lower earnings in film ($0.4 billion), lack of current-year counterpart to 2008 proceeds from insurance claims ($0.1 billion) and lower earnings in our broadcast television business ($0.1 billion) were partially offset by the gain related to AETN ($0.6 billion) and higher earnings in cable ($0.1 billion).

Capital Finance
                                 Three months ended
                                    September 30              Nine months ended September 30
(In millions)                      2009           2008                2009                2008

Revenues                     $   12,161     $   17,292     $        38,100     $        52,242

Segment profit               $      263     $    2,020     $         2,008     $         7,602




                                      At
               September 30,     September 30,     December 31,
(In millions)      2009              2008             2008

Total assets  $      550,744    $      622,135    $     572,903




                                Three months ended
                                   September 30             Nine months ended September 30
(In millions)                     2009          2008                2009                2008

Revenues
  Commercial Lending and     $             $             $                   $
Leasing (CLL)(a)                 4,668         6,474              15,519              20,297
  Consumer (formerly GE
Money)(a)                        4,878         6,613              14,508              19,709
  Real Estate                      982         1,679               2,970               5,526
  Energy Financial Services        483         1,261               1,617               3,020
  GE Capital Aviation
Services (GECAS)                 1,150         1,265               3,486               3,690

Segment profit
  CLL(a)                     $     135     $     389     $           625     $         1,985
  Consumer(a)                      434           796               1,404               2,852
  Real Estate                     (538)          244                (948)              1,204
  Energy Financial Services         41           306                 181                 606
  GECAS                            191           285                 746                 955

                                                    At
                             September 30,     September 30,     December 31,
(In millions)                    2009              2008             2008

Assets
  CLL(a)                    $      213,979    $      247,810    $     228,176
  Consumer(a)                      180,070           213,889          187,927
  Real Estate                       83,684            88,739           85,266
  Energy Financial Services         22,598            21,856           22,079
  GECAS                             50,413            49,841           49,455

(a) During the first quarter of 2009, we transferred Banque Artesia Nederland N.V. (Artesia) from CLL to Consumer. Prior-period amounts were reclassified to conform to the current-period's presentation.

Capital Finance revenues decreased 30% and net earnings decreased 87% compared with the third quarter of 2008. Revenues for the third quarters of 2009 and 2008 included $0.7 billion and $0.2 billion of revenue from acquisitions, respectively, and in 2009 were reduced by $1.5 billion as a result of dispositions, including the effect of the deconsolidation of PTL. Revenues for the quarter also decreased $4.2 billion compared with the third quarter of 2008 as a result of organic revenue declines, driven by a lower asset base and a lower interest rate environment, and the stronger U.S. dollar. Net earnings decreased by $1.8 billion in the third quarter of 2009 compared with the third quarter of 2008, primarily due to higher provisions for losses on financing receivables associated with the challenging economic environment, partially offset by lower selling, general and administrative costs.

Capital Finance revenues decreased 27% and net earnings decreased 74% compared with the first nine months of 2008. Revenues for the first nine months of 2009 and 2008 included $2.6 billion and $0.4 billion of revenue from acquisitions, respectively, and in 2009 were reduced by $3.5 billion as a result of dispositions, including the effect of the deconsolidation of PTL. Revenues for the first nine months also decreased $12.8 billion compared with the first nine months of 2008 as a result of organic revenue declines, primarily driven by a lower asset base and a lower interest rate environment, and the stronger U.S. dollar. Net earnings decreased by $5.6 billion in the first nine months of 2009 compared with the first nine months of 2008, primarily due to higher provisions for losses on financing receivables associated with the challenging economic environment, partially offset by lower selling, general and administrative costs.

During the first nine months of 2009, General Electric Capital Corporation (GE Capital) provided $51 billion of new financings in the U.S. to various companies, infrastructure projects and municipalities. Additionally, we extended $54 billion of credit to approximately 49 million U.S. consumers. GE Capital provided credit to approximately 19,700 new commercial customers and 26,000 new small businesses during the first nine months of 2009 in the U.S. and ended the period with outstanding credit to more than 350,000 commercial customers and 147,000 small businesses through retail programs in the U.S.

Additional information about certain Capital Finance businesses follows.

CLL revenues decreased 28% and net earnings decreased 65% compared with the third quarter of 2008. Revenues for the third quarters of 2009 and 2008 included $0.5 billion and $0.2 billion, respectively, from acquisitions, and were reduced by $1.1 billion from dispositions, primarily related to the deconsolidation of PTL. Revenues for the quarter also decreased $1.0 billion compared with the third quarter of 2008 as a result of organic revenue declines ($0.8 billion) and the stronger U.S. dollar ($0.2 billion). Net earnings decreased by $0.3 billion in the third quarter of 2009, reflecting higher provisions for losses on financing receivables ($0.1 billion) and declines in lower-taxed earnings from global operations ($0.1 billion), partially offset by higher investment income ($0.1 billion) and acquisitions ($0.1 billion). Net earnings also included mark-to-market losses and other-than-temporary impairments ($0.2 billion), partially offset by the absence of the 2008 Genpact loss ($0.2 billion).

CLL revenues decreased 24% and net earnings decreased 69% compared with the first nine months of 2008. Revenues for the first nine months of 2009 and 2008 included $1.7 billion and $0.3 billion from acquisitions, respectively, and were reduced by $2.0 billion from dispositions, primarily related to the deconsolidation of PTL. Revenues for the first nine months of 2009 also included $0.3 billion related to a gain on the partial sale of a limited partnership interest in PTL and remeasurement of our retained investment. Revenues for the first nine months decreased $4.2 billion compared with the first nine months of 2008 as a result of organic revenue declines ($3.3 billion) and the stronger U.S. dollar ($0.9 billion). Net earnings decreased by $1.4 billion in the first nine months of 2009, reflecting higher provisions for losses on financing receivables ($0.6 billion), lower gains ($0.4 billion), declines in lower-taxed earnings from global operations ($0.3 billion) and the stronger U.S. dollar (0.1 billion), partially offset by acquisitions ($0.4 billion). Net earnings also included mark-to-market losses and other-than-temporary impairments ($0.3 billion) and the absence of the 2008 Genpact gain ($0.1 billion), partially offset by the gain on PTL sale and remeasurement ($0.3 billion).

Consumer revenues decreased 26% and net earnings decreased 45% compared with the third quarter of 2008. Revenues for the third quarter of 2009 included $0.3 billion from acquisitions and were reduced by $0.4 billion as a result of dispositions. Revenues for the quarter decreased $1.6 billion compared with the third quarter of 2008 as a result of organic revenue declines ($1.1 billion) and the stronger U.S. dollar ($0.5 billion). The decrease in net earnings resulted from core declines ($0.5 billion), partially offset by higher securitization income ($0.1 billion). Core declines primarily resulted from lower results in the U.S. and U.K., reflecting higher provisions for losses on financing receivables ($0.4 billion) and the effects of mark-to-market losses and other-than-temporary impairments ($0.1 billion).

Consumer revenues decreased 26% and net earnings decreased 51% compared with the first nine months of 2008. Revenues for the first nine months of 2009 included $0.8 billion from acquisitions (including a gain of $0.3 billion on the remeasurement of our previously held equity investment in BAC related to the acquisition of a controlling interest (BAC acquisition gain)) and were reduced by $1.3 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 for the first nine months decreased $4.3 billion compared with the first nine months of 2008 as a result of organic revenue declines ($2.5 billion) and the stronger U.S. dollar ($1.9 billion). The decrease in net earnings resulted primarily from core declines ($1.7 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 ($0.2 billion) and the BAC acquisition gain ($0.2 billion). Core declines primarily resulted from lower results in the U.S. & U.K., reflecting higher provisions for losses on financing receivables ($1.6 billion) and the effects of mark-to-market losses and other-than-temporary impairments ($0.2 billion), partially offset by growth in lower-taxed earnings from global operations ($0.1 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 revenues decreased 42% and net earnings decreased 320% compared with . . .