SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 1-35
GENERAL ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
NEW YORK 14-0689340
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3135 EASTON TURNPIKE, FAIRFIELD, CT 06431-0001
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (203) 373-2211
-------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
There were 1,651,254,916 shares with a par value of $0.32 per share
outstanding at June 30, 1996.
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Condensed Statement of Earnings
General Electric Company and consolidated affiliates
(Dollars, except per-share amounts, in millions)
<TABLE>
<CAPTION>
Second quarter ended June 30 (Unaudited)
---------------------------------------------------------------------
Consolidated GE GECS
---------------------- ---------------------- ---------------------
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sales of goods $8,551 $8,572 $8,557 $8,578 $ - $ -
Sales of services 2,929 2,633 2,963 2,659 - -
Earnings of GECS - - 683 572 - -
GECS revenues from operations 7,421 6,425 - - 7,457 6,415
Other income 165 179 164 179 - -
---------- ---------- ---------- ---------- ---------- ----------
Total revenues 19,066 17,809 12,367 11,988 7,457 6,415
---------- ---------- ---------- ---------- ---------- ----------
Cost of goods sold 6,034 6,192 6,040 6,199 - -
Cost of services sold 1,970 1,793 2,005 1,819 - -
Interest and other financial charges 1,920 1,830 137 158 1,789 1,677
Insurance losses and policyholder and annuity benefits 1,558 1,223 - - 1,558 1,223
Provision for losses on financing receivables 228 279 - - 228 279
Other costs and expenses 4,460 3,856 1,595 1,448 2,893 2,392
Minority interest in net earnings of
consolidated affiliates 61 46 23 20 38 26
---------- ---------- ---------- ---------- ---------- ----------
Total costs and expenses 16,231 15,219 9,800 9,644 6,506 5,597
---------- ---------- ---------- ---------- ---------- ----------
Earnings before income taxes 2,835 2,590 2,567 2,344 951 818
Provision for income taxes (927) (864) (659) (618) (268) (246)
---------- ---------- ---------- ---------- ---------- ----------
Net earnings $1,908 $1,726 $1,908 $1,726 $683 $572
========== ========== ========== ========== ========== ==========
Net earnings per share $1.15 $1.02
Dividends declared per share $0.46 $0.41
<FN>
See notes to Condensed Consolidated Financial Statements. Consolidating data are shown for "GE" and "GECS." Transactions
between GE and GECS have been eliminated from the "consolidated" columns.
</TABLE>
<PAGE>
Condensed Statement of Earnings
General Electric Company and consolidated affiliates
<TABLE>
<CAPTION>
(Dollars, except per-share amounts, in millions) Six months ended June 30 (Unaudited)
---------------------------------------------------------------------
Consolidated GE GECS
---------------------- ---------------------- ---------------------
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sales of goods $15,792 $15,668 $15,801 $15,676 $ - $ -
Sales of services 5,402 4,792 5,461 4,839 - -
Earnings of GECS - - 1,333 1,131 - -
GECS revenues from operations 14,638 12,118 - - 14,702 12,169
Other income 332 357 330 359 - -
---------- ---------- ---------- ---------- ---------- ----------
Total revenues 36,164 32,935 22,925 22,005 14,702 12,169
---------- ---------- ---------- ---------- ---------- ----------
Cost of goods sold 11,244 11,349 11,253 11,357 - -
Cost of services sold 3,693 3,325 3,753 3,372 - -
Interest and other financial charges 3,795 3,492 280 284 3,524 3,220
Insurance losses and policyholder and annuity benefits 3,160 2,314 - - 3,160 2,314
Provision for losses on financing receivables 441 358 - - 441 358
Other costs and expenses 8,557 7,340 3,038 2,801 5,571 4,580
Minority interest in net earnings of consolidated
affiliates 121 85 39 32 82 53
---------- ---------- ---------- ---------- ---------- ----------
Total costs and expenses 31,011 28,263 18,363 17,846 12,778 10,525
---------- ---------- ---------- ---------- ---------- ----------
Earnings before income taxes 5,153 4,672 4,562 4,159 1,924 1,644
Provision for income taxes (1,728) (1,574) (1,137) (1,061) (591) (513)
---------- ---------- ---------- ---------- ---------- ----------
Net earnings $3,425 $3,098 $3,425 $3,098 $1,333 $1,131
========== ========== ========== ========== ========== ==========
Net earnings per share $2.06 $1.83
Dividends declared per share $0.92 $0.82
<FN>
See notes to Condensed Consolidated Financial Statements. Consolidating data are shown for "GE" and "GECS." Transactions
between GE and GECS have been eliminated from the "consolidated" columns.
</TABLE>
<PAGE>
Condensed Statement of Financial Position
General Electric Company and consolidated affiliates
<TABLE>
<CAPTION>
(Dollars in millions) Consolidated GE GECS
---------------------- ---------------------- ---------------------
6/30/96 12/31/95 6/30/96 12/31/95 6/30/96 12/31/95
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Cash and equivalents $3,271 $2,823 $871 $874 $2,400 $1,949
Investment securities 46,687 41,067 33 4 46,654 41,063
Current receivables 8,312 8,735 8,386 8,891 - -
Inventories 5,051 4,395 5,051 4,395 - -
GECS financing receivables - net 93,514 93,272 - - 93,514 93,272
Other GECS receivables 12,174 12,417 - - 12,664 12,897
Property, plant and equipment (including equipment
leased to others) - net 27,028 25,679 10,216 10,234 16,812 15,445
Investment in GECS - - 12,915 12,774 - -
Intangible assets 13,192 11,654 6,948 6,643 6,244 5,011
Other assets 32,852 27,993 12,793 11,901 20,069 16,092
---------- ---------- ---------- ---------- ---------- ----------
Total assets $242,081 $228,035 $57,213 $55,716 $198,357 $185,729
========== ========== ========== ========== ========== ==========
Short-term borrowings $71,425 $64,463 $2,926 $1,666 $68,511 $62,808
Accounts payable 8,453 9,061 3,649 3,968 5,627 5,952
Other GE current liabilities 9,516 8,477 9,339 8,326 - -
Long-term borrowings 49,775 51,027 1,859 2,277 47,955 48,790
Insurance reserves and annuity benefits 48,228 39,699 - - 48,228 39,699
Other liabilities 15,151 15,363 9,092 8,928 5,936 6,312
Deferred income taxes 7,290 7,380 582 508 6,708 6,872
---------- ---------- ---------- ---------- ---------- ----------
Total liabilities 209,838 195,470 27,447 25,673 182,965 170,433
---------- ---------- ---------- ---------- ---------- ----------
Minority interest in equity of consolidated
affiliates 2,947 2,956 470 434 2,477 2,522
---------- ---------- ---------- ---------- ---------- ----------
Common stock (1,857,013,000 shares issued) 594 594 594 594 1 1
Unrealized gains on investment securities 293 1,000 293 1,000 288 989
Other capital 1,979 1,663 1,979 1,663 2,239 2,266
Retained earnings 36,429 34,528 36,429 34,528 10,387 9,518
Less common stock held in treasury (9,999) (8,176) (9,999) (8,176) - -
---------- ---------- ---------- ---------- ---------- ----------
Total share owners' equity 29,296 29,609 29,296 29,609 12,915 12,774
---------- ---------- ---------- ---------- ---------- ----------
Total liabilities and equity $242,081 $228,035 $57,213 $55,716 $198,357 $185,729
========== ========== ========== ========== ========== ==========
<FN>
See notes to Condensed Consolidated Financial Statements. Consolidating data are shown for "GE" and "GECS." June data
are unaudited. Transactions between GE and GECS have been eliminated from the "consolidated" columns.
</TABLE>
<PAGE>
Condensed Statement of Cash Flows
General Electric Company and consolidated affiliates
<TABLE>
<CAPTION>
(Dollars in millions) Six months ended June 30 (Unaudited)
---------------------------------------------------------------------
Consolidated GE GECS
---------------------- ---------------------- ---------------------
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities
- ------------------------------------
Net earnings $3,425 $3,098 $3,425 $3,098 $1,333 $1,131
Adjustments to reconcile net earnings to cash
provided from operating activities
Depreciation, depletion and amortization 1,824 1,757 804 814 1,020 943
Earnings retained by GECS - - (869) (733) - -
Deferred income taxes 261 327 64 154 197 173
Decrease (increase) in GE current receivables 448 11 520 (27) - -
Increase in GE inventories (724) (804) (724) (804) - -
Increase (decrease) in accounts payable (637) (638) (320) 35 (452) (424)
Increase in insurance reserves 1,714 1,116 - - 1,714 1,116
Provision for losses on financing
receivables 441 358 - - 441 358
All other operating activities (935) (333) 553 (1,014) (1,366) 465
---------- ---------- ---------- ---------- ---------- ----------
Cash from operating activities 5,817 4,892 3,453 1,523 2,887 3,762
---------- ---------- ---------- ---------- ---------- ----------
Cash flows from investing activities
- ------------------------------------
Property, plant and equipment (including
equipment leased to others) - additions (3,599) (3,724) (941) (674) (2,658) (3,050)
Net increase in GECS financing receivables (9) (4,835) - - (9) (4,835)
Payments for principal businesses purchased (2,117) (2,010) (409) (130) (1,708) (1,880)
All other investing activities (1,496) 224 118 105 (1,673) 87
---------- ---------- ---------- ---------- ---------- ----------
Cash used for investing activities (7,221) (10,345) (1,232) (699) (6,048) (9,678)
---------- ---------- ---------- ---------- ---------- ----------
Cash flows from financing activities
- ------------------------------------
Net change in borrowings (maturities 90 days or less) 4,937 (2,530) 1,556 2,270 3,381 (4,763)
Newly issued debt (maturities more than 90 days) 13,457 20,382 75 437 13,382 19,945
Repayments and other reductions (maturities
more than 90 days) (12,949) (9,351) (876) (705) (12,073) (8,646)
Net purchase of GE shares for treasury (1,447) (1,422) (1,447) (1,422) - -
Dividends paid to share owners (1,532) (1,395) (1,532) (1,395) (464) (398)
All other financing activities (614) 293 - - (614) 293
---------- ---------- ---------- ---------- ---------- ----------
Cash from (used for) financing activities 1,852 5,977 (2,224) (815) 3,612 6,431
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in cash and equivalents 448 524 (3) 9 451 515
Cash and cash equivalents at beginning of year 2,823 2,591 874 1,373 1,949 1,218
---------- ---------- ---------- ---------- ---------- ----------
Cash and equivalents at June 30 $3,271 $3,115 $871 $1,382 $2,400 $1,733
========== ========== ========== ========== ========== ==========
<FN>
See notes to Condensed Consolidated Financial Statements. Consolidating data are shown for "GE" and "GECS." Transactions
between GE and GECS have been eliminated from the "consolidated" columns.
</TABLE>
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying condensed quarterly financial statements represent
the consolidation of General Electric Company and all companies which it
directly or indirectly controls, either through majority ownership or otherwise.
Reference is made to note 1 to the consolidated financial statements included in
the Company's Annual Report on Form 10-K for the year ended December 31, 1995.
That note discusses consolidation and financial statement presentation. As used
in this Report and in the Report on Form 10-K, "GE" represents the adding
together of all affiliated companies except General Electric Capital Services,
Inc. ("GECS"), which is presented on a one-line basis; GECS consists of General
Electric Capital Services, Inc. and all of its affiliates; and "consolidated"
represents the adding together of GE and GECS with the effects of transactions
between the two eliminated. Certain prior-year amounts have been reclassified to
conform to the current year presentation.
2. Two newly issued accounting standards were adopted in the first
quarter of 1996 and did not have a material effect on the financial position or
results of operations of the Company. Statement of Financial Accounting
Standards (SFAS) No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of, requires that certain long-lived assets
be reviewed for impairment when events or circumstances indicate that the
carrying amounts of the assets may not be recoverable. If such review indicates
that the carrying amount of an asset exceeds the sum of its expected future cash
flows, the asset's carrying value is written down to fair value. Long-lived
assets to be disposed of are reported at the lower of carrying amount or fair
value less cost to sell. SFAS No. 122, Accounting for Mortgage Servicing Rights,
requires that capitalized rights to service mortgage loans be assessed for
impairment by individual risk stratum by comparing each stratum's carrying
amount with its fair value. Strata are based on the predominant risk
characteristics of the underlying loans, which include loan type and note rate.
Fair values are estimated based on discounted anticipated future net cash flows
considering market consensus for loan prepayment predictions and other economic
factors. To the extent that the carrying value of mortgage servicing rights
exceeds fair value by individual stratum, the resulting impairment is recognized
in earnings through a valuation allowance.
3. The condensed consolidated quarterly financial statements are
unaudited. These statements include all adjustments (consisting of normal
recurring accruals) considered necessary by management to present a fair
statement of the results of operations, financial position and cash flows. The
results reported in these condensed consolidated financial statements should not
be regarded as necessarily indicative of results that may be expected for the
entire year.
4. GE's inventories consisted of the following:
(Dollars in millions)
At
-----------------------------
6/30/96 12/31/95
------- -------
Raw materials and work in process $ 3,682 $ 3,205
Finished goods 2,438 2,277
Unbilled shipments 258 258
Revaluation to LIFO (1,327) (1,345)
------- -------
Total inventories $ 5,051 $ 4,395
======= =======
5. Property, plant and equipment, including equipment leased to others,
consisted of the following:
(Dollars in millions)
At
-----------------------------
6/30/96 12/31/95
------- -------
Original cost
-- GE $25,249 $24,867
-- GECS 22,946 21,079
------- -------
Total 48,195 45,946
------- -------
Accumulated depreciation, depletion
and amortization
-- GE 15,033 14,633
-- GECS 6,134 5,634
------ ------
Total 21,167 20,267
------- ------
Property, plant and equipment -- net
-- GE 10,216 10,234
-- GECS 16,812 15,445
------- -------
Total $27,028 $25,679
======= =======
6. GE's authorized common stock consisted of 2,200,000,000 shares
having a par value of $0.32 each. Average shares outstanding for the second
quarter of 1996 and 1995 were 1,655,505,063 and 1,688,152,513, respectively.
Average shares outstanding for the first six months of 1996 and 1995 were
1,659,174,019 and 1,694,090,647, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
A. RESULTS OF OPERATIONS -- SECOND QUARTER OF 1996 COMPARED WITH SECOND QUARTER
OF 1995
General Electric Company's earnings for the second quarter of 1996 were
$1.908 billion, the highest for any quarter in the Company's history, an
increase of 11% over the same period in 1995. Earnings per share increased 13%
to $1.15, up from last year's $1.02. Earnings per share grew faster than
earnings, reflecting the impact of shares repurchased under a three-year, $9
billion share repurchase program initiated in December 1994.
Revenues, including acquisitions, rose to a record $19.1 billion for
the quarter, 7% over 1995, primarily because of increased global activities and
higher sales of spare parts and services by GE's equipment businesses.
International revenues were much higher during the quarter, reflecting excellent
growth in operations located in Europe and the Far East as well as much higher
U.S. exports. Eight of GE's 12 businesses increased revenues, led by GE Capital
Services, NBC, Appliances and Aircraft Engines.
Operating margin for the second quarter rose to a record 16.3% of
sales, up from last year's 15.8%.
Eight businesses reported improved operating profit, with four -- NBC,
Medical Systems, Transportation and Motors -- achieving double-digit increases.
GE Capital Services' earnings increased 19% to $683 million, benefiting
from globalization and the diversity of its 26 businesses. The record results
were led by strong double-digit increases in its Consumer Services, Specialty
Insurance and Specialized Financing activities.
Cash generated from GE's operating activities during the second quarter
reached $3.5 billion, up sharply from last year's $1.5 billion, primarily from
improvements in earnings and working capital and, to a lesser extent, timing. As
part of the $9 billion share repurchase program, GE purchased $0.8 billion of
its stock during the second quarter to reach $4.9 billion of shares purchased
during the last 19 months.
SEGMENT ANALYSIS:
The comments that follow compare revenues and operating profit by
industry segment for the second quarters of 1996 and 1995.
o AIRCRAFT ENGINES revenues were somewhat higher than in last year's
second quarter reflecting higher volume in services, including spare parts, and
military engines. Operating profit increased somewhat as the higher volume and
productivity improvements more than offset higher costs.
o APPLIANCES reported a good increase in second quarter revenues
compared with a year ago reflecting volume improvements in all core domestic
product lines and strong international growth, partially offset by lower selling
prices. Operating profit was slightly higher for the quarter, as higher volume
and productivity more than offset the effects of lower selling prices.
o BROADCASTING operating profit was sharply higher on revenues that
were much improved over last year's second quarter. The increase in operating
profit was attributable primarily to improved price performance at both network
and owned-and-operated stations, reflecting a strong overall advertising market
in combination with excellent performance in prime-time.
o GECS' earnings were $683 million, a 19% improvement from $572 million
in 1995. The increase was largely attributable to strong double-digit increases
in Consumer Services, Specialty Insurance and Specialized Financing activities.
o INDUSTRIAL PRODUCTS AND SYSTEMS reported slightly higher operating
profit on a modest increase in revenues. The revenue increase resulted
principally from higher volume at Lighting and Electrical Distribution and
Control. The operating profit increase was primarily attributable to
productivity improvements across the segment which more than offset continued
cost inflation.
o MATERIALS revenues and operating profit were somewhat lower than a
year ago largely as a result of lower selling prices for petrochemicals and, to
a lesser extent, ABS resins.
o POWER GENERATION revenues were somewhat lower than in 1995's second
quarter, primarily because of lower gas turbine volume. Operating profit was
somewhat higher, reflecting favorable product mix, strong results in services,
including spare parts, and the absence of modification costs related to the "F"
turbine that adversely affected the prior year's second quarter results.
o TECHNICAL PRODUCTS AND SERVICES operating profit was somewhat higher
compared with a year ago on a modest increase in revenues. Medical Systems
operating profit was much higher, reflecting productivity gains and volume
growth, particularly in services, which more than offset price declines in all
geographic regions. Information Services operating profit declined sharply on
revenues that were about the same as a year ago, reflecting the combined effects
of considerably higher costs related to network expansion and lower selling
prices.
o ALL OTHER operating profit was much higher on a good increase in
revenues, reflecting higher levels of licensing income compared with the second
quarter of 1995.
B. RESULTS OF OPERATIONS -- FIRST HALF OF 1996 COMPARED WITH FIRST HALF OF 1995
Earnings for the six months ended June 30, 1996, were $3.425 billion,
up 11% from $3.098 billion in 1995's first half. Earnings per share increased
13% to $2.06 from $1.83. Earnings per share grew faster than earnings,
reflecting the impact of shares repurchased under a three-year, $9 billion share
repurchase program initiated in December 1994.
Consolidated revenues for the first six months of 1996 aggregated $36.2
billion, up 10% from the comparable $32.9 billion in 1995's first half. GE's
sales of goods and services were 4% higher, with improvements led by NBC,
Appliances and Aircraft Engines.
Operating margin in the first half of 1996 was 15.1% of sales, with the
improvement over last year's 14.5% led by NBC, Power Systems, Medical Systems
and Transportation.
SEGMENT ANALYSIS:
The following comments compare revenues and operating profit by
industry segment for the first half of 1996 with the same period of 1995.
o AIRCRAFT ENGINES reported somewhat higher revenues and operating
profit compared with the first half of 1995. The increase in revenues was
primarily attributable to higher volume in services, including spare parts, and
military engines. The improvement in operating profit reflected the effects of
productivity and the higher volume.
o APPLIANCES revenues were somewhat higher than a year ago, reflecting
higher volume which was largely offset by lower selling prices. Operating profit
was slightly lower primarily as a result of cost inflation and lower selling
prices, which more than offset productivity and the higher volume.
o BROADCASTING operating profit increased sharply over last year on
much higher revenues, primarily because of strong performances in both
prime-time entertainment and owned-and-operated stations.
o GECS' earnings from continuing operations were up 18% to $1,333
million. The earnings increase was led by strong results in Consumer Services,
Specialty Insurance and Specialized Financing.
o INDUSTRIAL PRODUCTS AND SYSTEMS revenues and operating profit
increased slightly over 1995's first half. The revenue increase was principally
attributable to higher volume at Lighting, Electrical Distribution and Control,
and Motors. The improvement in operating profit reflected primarily productivity
improvements across the segment, which more than offset higher costs.
o MATERIALS operating profit was about the same as last year on
somewhat lower revenues as lower prices, principally in petrochemicals and ABS
resins, and slightly lower volume offset reductions in certain material costs.
o POWER GENERATION operating profit was somewhat higher on revenues
that were about the same as a year ago. The improvement in operating profit
reflected strong results in services, including spare parts, and the absence of
modification costs related to the "F" turbine that adversely affected prior year
results.
o TECHNICAL PRODUCTS AND SERVICES reported higher operating profit on
flat revenues. Medical Systems had a good increase in operating profit on flat
revenues as productivity and higher volume more than offset continuing pricing
pressures. Information Services operating profit declined substantially on
revenues that were about the same as a year ago, reflecting considerably higher
costs related to network expansion and continued price declines.
o ALL OTHER operating profit was higher on modest increase in revenues.
C. FINANCIAL CONDITION
With respect to the Condensed Statement of Financial Position,
consolidated assets of $242.1 billion at June 30, 1996, were $14.1 billion
higher than the $228.0 billion at December 31, 1995.
GE's assets were $57.2 billion at June 30, 1996, an increase of $1.5
billion from December 31, 1995. The increase was principally attributable to
normal seasonal increases in inventories ($0.7 billion), and numerous changes in
the other assets category, none of which exceeded $0.5 billion.
GECS' assets increased by $12.6 billion from the end of 1995,
principally as a result of higher levels of investment in investment securities
as well as increases in all other assets, both of which are described below.
GECS investment securities increased by $5.6 billion, reflecting the addition of
securities held by insurance companies acquired and new investments by various
GE Capital businesses, partially offset by decreases in fair value resulting
from higher interest rates at June 30, 1996. Other assets increased $4.0
billion, principally as a result of two factors: the addition of
investor-directed fund accounts associated with the Life Insurance Company of
Virginia acquisition and increased investment in nonconsolidated affiliates. GE
Capital's financing receivables, which aggregated $93.5 billion, net of
reserves, at the end of the second quarter, were approximately the same as at
year-end 1995. Management believes that GE Capital's reserves of $2.5 billion
(2.63% of the receivables balance at June 30, 1996 -- the same as year-end 1995)
are appropriate given the strength and diversity of the portfolio and current
economic circumstances. Property, plant and equipment, principally equipment
leased to others, increased by $1.4 billion primarily as a result of higher auto
lease volume, including a shift in the nature of certain new auto lease volume
from financing leases in 1995 to operating leases in 1996, and new aircraft
volume.
Consolidated liabilities of $209.8 billion at June 30, 1996, were $14.3
billion higher than the year-end 1995 balance of $195.5 billion. GE's
liabilities were up $1.8 billion; GECS' liabilities increased $12.5 billion.
GE's total borrowings were $4.8 billion ($2.9 billion short-term and
$1.9 billion long-term) at June 30, 1996, an increase of $0.8 billion from
December 31, 1995. GE's ratio of debt to total capital at the end of June 1996
was 13.8% compared with 11.6% at the end of last year and 16.3% at June 30,
1995. Other current liabilities increased $1.0 billion, principally as a result
of higher federal taxes accrued and progress collections.
GECS' liabilities increased to $183.0 billion, compared with $170.4
billion at the end of 1995, principally because of higher insurance reserves and
annuity benefits, which increased by $8.5 billion, primarily as a result of the
acquisitions of Life Insurance Company of Virginia and Union Fidelity Life
Insurance Company. Short-term borrowings increased by $5.7 billion to $68.5
billion and long-term borrowings decreased by $0.8 billion to $48.0 billion.
With respect to cash flows, consolidated cash and equivalents were $3.3
billion at June 30, 1996, an increase of $0.4 billion during the first half.
Cash and equivalents were $3.1 billion at June 30, 1995, an increase of $0.5
billion during last year's first half.
GE's cash and equivalents were $0.9 billion at June 30, 1996, and at
December 31, 1995. During the first half of 1996, cash provided from
operating activities increased to $3.5 billion, up from $1.5 billion during
the first six months of last year. The increase resulted from improvements
in earnings, working capital -- principally in trade receivables and
progress collections related to large power generation orders -- and
collection of sundry receivables. Cash used for investing activities ($1.2
billion) represented principally investments in new plant and equipment for
a wide variety of projects to reduce costs and improve efficiencies. Cash
used for financing activities ($2.2 billion) included $1.7 billion for
repurchases of the Company's common stock under the share repurchase
program and $1.5 billion for dividends paid to share owners, a 12% increase
in the per-share dividend rate compared with the first half of last year.
The dividends and share repurchases were partially offset by funds provided
from a combination of higher borrowings ($0.8 billion) and disposition of
GE shares from treasury ($0.4 billion).
GE's cash and equivalents were $1.4 billion at June 30, 1995, and at
December 31, 1994. During the first half of 1995, cash from operating activities
totaled $1.5 billion, despite the use of (a) $1.0 billion for "all other
activities," which consisted of the net result of numerous changes (none of
which was significant) in all other assets and other current and noncurrent
liabilities, and (b) $0.8 billion for normal seasonal increases in inventories.
Cash used for investing activities ($0.7 billion) represented principally
investments in new plant and equipment for a wide variety of projects to reduce
costs and improve efficiencies. Cash used for financing activities ($0.8
billion) included $1.6 billion for repurchases of the Company's common stock
under the share repurchase program and $1.4 billion for dividends paid to share
owners, representing a 14% increase in the per-share dividend rate compared with
the first half of 1994. The dividends and share repurchases were partially
offset by funds provided from a combination of higher borrowings ($2.0 billion)
and disposition of GE shares from treasury ($0.6 billion).
GECS' cash and equivalents increased $0.5 billion during the first half
of 1996. Cash was used primarily to fund additions to property, plant and
equipment ($2.7 billion), principally equipment that is provided to third
parties on operating leases, for acquisitions of businesses ($1.7 billion), the
largest of which were Life Insurance Company of Virginia and Union Fidelity Life
Insurance Company, and increased investments in nonconsolidated affiliates ($1.4
billion). Cash provided from operating activities totaled $2.9 billion. Cash
provided from financing activities resulted primarily from increased borrowings
($4.7 billion) during the first six months of 1996.
GECS' cash and equivalents increased $0.5 billion during the first half
of 1995. Cash was used primarily to fund GE Capital's growth in financing
receivables ($4.8 billion), for additions to property, plant and equipment ($3.1
billion), principally equipment that is provided to third parties on operating
leases, and for acquisitions of businesses ($1.9 billion), the largest of which
were certain businesses of ITT Financial, Credit De L'Est (France), Pallas Group
(United Kingdom) and the remaining 50% interest in United Merchants Financing
(Hong Kong). Cash provided from operating activities totaled $3.8 billion. Cash
provided from financing activities resulted from increased borrowings during the
first six months of 1995, which aggregated $6.5 billion.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As previously reported, in April 1996, the Environmental Protection
Agency filed an action and stated that it was seeking $300,000 in penalties for
the Company's failure to adequately respond to an Agency information request in
1994. The Company has tentatively agreed to settle the matter for $95,000.
As previously reported, in March 1995, the Environmental Protection
Agency stated that it was seeking $300,000 in penalties for alleged violations
of the Clean Air Act at the Company's Waterford, New York facility. The company
has tentatively agreed to settle the matter for $60,684.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of Share Owners of General Electric Company
was held on April 24, 1996.
(b) All director nominees were elected.
(c) Certain matters voted upon at the meeting and the votes cast
with respect to such matters are as follows:
<TABLE>
<CAPTION>
PROPOSALS AND VOTE TABULATIONS
VOTES CAST
------------------------
FOR AGAINST ABSTAIN NON-VOTES
--- ------- ------- ---------
<S> <C> <C> <C> <C>
MANAGEMENT PROPOSALS
Approval of the appointment
of independent
auditors for 1996 1,376,566,149 5,678,526 5,281,801 0
Approval of the proposed 1996
Stock Option Plan for
Non-Employee Directors 1,257,472,349 110,554,546 19,499,581 0
SHARE OWNER PROPOSALS
(1) Relating to Prior Government service 33,373,429 1,138,687,716 31,930,765 183,534,567
(2) Relating to GE's nuclear power business 39,270,453 1,085,497,160 79,224,299 183,534,565
(3) Relating to radioactive waste and
decommissioning 44,426,675 1,080,221,163 79,344,073 183,534,566
(4) Relating to Maquiladoras 79,754,886 1,007,665,765 116,571,261 183,534,565
(5) Relating to global corporate standards 66,125,653 1,031,724,356 106,141,901 183,534,567
(6) Relating to NBC Programming 88,966,411 1,022,142,227 92,883,273 183,534,566
(7) Relating to Retirement Plan for Non-
Employee Directors 323,319,008 855,192,309 25,480,594 183,534,566
(8) Relating to Equal Credit Opportunity 72,129,433 1,031,450,110 100,412,368 183,534,566
</TABLE>
ELECTION OF DIRECTORS
DIRECTOR VOTES RECEIVED VOTES WITHHELD
- -------- -------------- --------------
D. Wayne Calloway 1,373,712,215 7,784,629
Silas S. Cathcart 1,372,259,118 9,237,726
Dennis D. Dammerman 1,372,842,950 8,653,894
Paolo Fresco 1,372,505,736 8,991,108
Claudio X. Gonzalez 1,373,537,421 7,959,423
Robert E. Mercer 1,371,895,787 9,601,057
Gertrude G. Michelson 1,371,866,226 9,630,618
John D. Opie 1,372,902,184 8,594,660
Roger S. Penske 1,372,614,384 8,882,460
Barbara Scott Preiskel 1,371,591,876 9,904,968
Frank H. T. Rhodes 1,372,181,707 9,315,137
Andrew C. Sigler 1,373,515,102 7,981,742
Douglas A. Warner III 1,373,840,637 7,656,207
John F. Welch, Jr. 1,371,729,707 9,767,137
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit 11. Computation of Per Share Earnings.
Exhibit 12. Computation of Ratio of Earnings to Fixed Charges.
Exhibit 27. Financial Data Schedule
b. Reports on Form 8-K during the quarter ended June 30, 1996.
No reports on Form 8-K were filed during the quarter ended June
30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
General Electric Company
(Registrant)
AUGUST 14, 1996 PHILIP D. AMEEN
Date Vice President and Comptroller
Duly Authorized Officer and Principal
Accounting Officer
<PAGE>
<TABLE>
Exhibit 11
GENERAL ELECTRIC COMPANY
COMPUTATION OF PER SHARE EARNINGS
(Shares in thousands; dollar amounts, except
earnings per share, in millions)
<CAPTION>
Fully
Earnings Primary diluted
Second quarter ended June 30, 1996 per common earnings earnings
- ---------------------------------- share per share per share
---------- ---------- ----------
<S> <C> <C> <C>
Net earnings applicable to common stock $1,908 $1,908 $1,908
Dividend equivalents (net of tax) applicable
to deferred incentive compensation shares - - -
-------- -------- --------
Earnings for per-share calculations $1,908 $1,908 $1,908
-------- -------- --------
Average number of shares outstanding 1,655,505 1,655,505 1,655,505
Average number of deferred incentive
compensation shares - 7,864 7,864
Average stock option shares - 21,444 23,037
Average number of restricted stock units - 1,996 2,090
---------- ---------- ----------
Shares for earnings calculation 1,655,505 1,686,809 1,688,496
---------- ---------- ----------
Earnings per share $1.15 $1.13 $1.13
- ------------------ ======== ======== ========
Fully
Earnings Primary diluted
Second quarter ended June 30, 1995 per common earnings earnings
- ---------------------------------- share per share per share
---------- ---------- ----------
<S> <C> <C> <C>
Net earnings applicable to common stock $1,726 $1,726 $1,726
Dividend equivalents (net of tax) applicable
to deferred incentive compensation shares - - -
-------- -------- --------
Earnings for per-share calculations $1,726 $1,726 $1,726
-------- -------- --------
Average number of shares outstanding 1,688,153 1,688,153 1,688,153
Average number of deferred incentive
compensation shares - 8,314 8,314
Average stock option shares - 13,113 13,113
Average number of restricted stock units - 1,322 1,322
---------- ---------- ----------
Shares for earnings calculation 1,688,153 1,710,902 1,710,902
---------- ---------- ----------
Earnings per share $1.02 $1.01 $1.01
- ------------------ ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
Exhibit 11
GENERAL ELECTRIC COMPANY
COMPUTATION OF PER SHARE EARNINGS
(Shares in thousands; dollar amounts, except
earnings per share, in millions)
<CAPTION>
Fully
Earnings Primary diluted
Six months ended June 30, 1996 per common earnings earnings
- ------------------------------ share per share per share
---------- ---------- ----------
<S> <C> <C> <C>
Net earnings applicable to common stock $3,425 $3,425 $3,425
Dividend equivalents (net of tax) applicable
to deferred incentive compensation shares - 2 2
-------- -------- --------
Earnings for per-share calculations $3,425 $3,427 $3,427
-------- -------- --------
Average number of shares outstanding 1,659,174 1,659,174 1,659,174
Average number of deferred incentive
compensation shares - 7,861 7,861
Average stock option shares - 20,663 23,151
Average number of restricted stock units - 1,872 2,019
---------- ---------- ----------
Shares for earnings calculation 1,659,174 1,689,570 1,692,205
---------- ---------- ----------
Earnings per share $2.06 $2.03 $2.03
- ------------------ ======== ======== ========
Fully
Earnings Primary diluted
Six months ended June 30, 1995 per common earnings earnings
- ------------------------------ share per share per share
---------- ---------- ----------
<S> <C> <C> <C>
Net earnings applicable to common stock $3,098 $3,098 $3,098
Dividend equivalents (net of tax) applicable
to deferred incentive compensation shares - 2 2
-------- -------- --------
Earnings for per-share calculations $3,098 $3,100 $3,100
-------- -------- --------
Average number of shares outstanding 1,694,091 1,694,091 1,694,091
Average number of deferred incentive
compensation shares - 8,404 8,404
Average stock option shares - 11,810 12,834
Average number of restricted stock units - 1,321 1,346
---------- ---------- ----------
Shares for earnings calculation 1,694,091 1,715,626 1,716,675
---------- ---------- ----------
Earnings per share $1.83 $1.81 $1.81
- ------------------ ======== ======== ========
</TABLE>
EXHIBIT 12
GENERAL ELECTRIC COMPANY
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
(Dollars in millions) Six months ended
June 30, 1996
----------------
<S> <C>
GE except GECS
"Earnings" <F1> $4,601
Less: Equity in undistributed earnings
of General Electric Capital
Services, Inc. <F2> (869)
Plus: Interest and other financial
charges included in expense 280
One-third of rental expense <F3> 88
------
Adjusted "earnings" $4,100
======
Fixed Charges:
Interest and other financial charges $280
Interest capitalized 7
One-third of rental expense <F3> 88
------
Total fixed charges $375
======
Ratio of earnings to fixed charges 10.93
======
General Electric Company and consolidated affiliates
"Earnings" <F1> $5,274
Plus: Interest and other financial
charges included in expense 3,810
One-third of rental expense <F3> 172
------
Adjusted "earnings" $9,256
======
Fixed Charges:
Interest and other financial charges $3,810
Interest capitalized 22
One-third of rental expense <F3> 172
------
Total fixed charges $4,004
======
Ratio of earnings to fixed charges 2.31
======
<FN>
<F1> Earnings before income taxes and minority interest.
<F2> Earnings after income taxes, net of dividends.
<F3> Considered to be representative of interest factor in rental expense.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
consolidated financial statements for the period ended June 30, 1996,
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000040545
<NAME> GENERAL ELECTRIC COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,271
<SECURITIES> 46,687
<RECEIVABLES> 0<F1>
<ALLOWANCES> 0<F1>
<INVENTORY> 5,051
<CURRENT-ASSETS> 0<F2>
<PP&E> 48,195
<DEPRECIATION> 21,167
<TOTAL-ASSETS> 242,081
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 49,775
0
0
<COMMON> 594
<OTHER-SE> 28,702
<TOTAL-LIABILITY-AND-EQUITY> 242,081
<SALES> 15,792
<TOTAL-REVENUES> 21,194<F3>
<CGS> 11,244
<TOTAL-COSTS> 14,937<F4>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 3,795
<INCOME-PRETAX> 5,153
<INCOME-TAX> 1,728
<INCOME-CONTINUING> 3,425
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,425
<EPS-PRIMARY> 2.03
<EPS-DILUTED> 2.03
<FN>
<F1>Not disclosed in interim periods.
<F2>Not applicable to consolidated GE.
<F3>GE sales of goods ($15,792) and services ($5,402).
<F4>GE cost of goods ($11,244) and services ($3,693) sold.
</FN>
</TABLE>
