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To: Paul Senior who wrote (24467)	7/27/2006 6:56:40 PM
From: bruwin	Respond to of 78772

It seems to me that you and CrazyPete just don’t get the point I’m trying to make. GE may be doing very well with its Capital arm, but whatever Revenue it makes, from whatever source, be it from selling bonds or aircraft engines, the fact of the matter is that ALL that Revenue and ALL that expense appears in its Income Statement. And the Interest Expense component is draining away an overly large amount of Revenue. If you want to do some simple arithmetic you will find that if GE’s last Total Annual Revenue of $148bil. was reduced by over 15% to $125bil., and you pro-rata’d the deductions of CoS, SG&A etc.., and still deducted $5bil. for Interest Expense, GE’s Bottom Line would be about $19.7bil. That is still 20% GREATER than the $16.3bil. it achieves with the incorporation of its Capital Arm. Therefore, if as you say, GE cannot achieve the same amount of Turnover from its traditional "electrical" activities, and therefore needs some other source of Revenue such as GECapital, then I’m saying that by reducing that Revenue target by over 15% GE’s Shareholders will still be 20% better off than they are at present. And one of the "prime movers" in this regard was the drastic reduction in Interest Expense, which still, however, enabled GE to borrow some $75bil. to enhance its business. Now if you still want to see it your way, or any other way, then I suggest we just agree to differ.