Management’s Discussion and Analysis Operations: Segment Operations

Commercial Finance

(In millions) 2006 2005 2004
REVENUES  
$ 23,792
   
$ 20,646
   
$ 19,524
 
SEGMENT PROFIT  
$ 5,028
   
$ 4,290
   
$ 3,570
 
 
December 31 (In millions)   2006     2005        
TOTAL ASSETS  
$ 233,536
   
$ 190,546
       
 
(In millions) 2006 2005 2004
REVENUES                  
Capital Solutions  
$ 12,356
   
$ 11,476
   
$ 11,503
 
Real Estate   5,020     3,492     3,084  
SEGMENT PROFIT                  
Capital Solutions  
$ 1,727
   
$ 1,515
   
$ 1,325
 
Real Estate   1,841     1,282     1,124  
 
December 31 (In millions)   2006     2005        
ASSETS                  
Capital Solutions  
$ 94,523
   
$ 87,306
       
Real Estate   53,786     35,323        

Commercial Finance revenues and net earnings increased 15% and 17% in 2006, respectively, compared with 2005. Revenues during 2006 and 2005 included $1.0 billion and $0.1 billion from acquisitions, respectively, and in 2006 were reduced by $0.1 billion as a result of dispositions. Revenues for 2006 also increased as a result of organic revenue growth ($2.5 billion). The increase in net earnings resulted primarily from core growth ($0.6 billion), including growth in lower-taxed earnings from global operations, and acquisitions ($0.1 billion).

Real Estate assets increased $18.5 billion (52%), of which $12.4 billion was real estate investments, up 76%. Real Estate net earnings increased 44% compared with 2005, primarily as a result of a $0.6 billion increase in net earnings from real estate investments.

Commercial Finance revenues and net earnings increased 6% and 20% in 2005, respectively, compared with 2004. Revenues during 2005 and 2004 included $1.0 billion and $0.3 billion from acquisitions, respectively, and in 2005 were reduced by $0.7 billion as a result of dispositions. Revenues during 2005 also increased $1.1 billion as a result of organic revenue growth ($0.8 billion) and the weaker U.S. dollar ($0.3 billion). The increase in net earnings resulted primarily from core growth ($0.6 billion), including growth in lower-taxed earnings from global operations, acquisitions ($0.2 billion) and the weaker U.S. dollar ($0.1 billion), partially offset by lower securitizations ($0.1 billion).

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