<PAGE>
SECTIONS
Business 2
Properties 18
Legal Proceedings 19
Submission of Matters to a Vote of Security Holders 23
Market for Stock 23
Selected Financial Data 24
Management's Discussion 24
Financial Statements 24
Disagreements 24
Directors and Executive Officers 25
Executive Compensation 26
Security Ownership 26
Certain Relationships 26
Exhibits, Financial Statement Schedules 27
Signatures 32
Differences Letter F-41
<PAGE>
1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
(x) Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1995 Commission file number 1-35
or
( ) Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
--------- --------
GENERAL ELECTRIC COMPANY
(Exact name of registrant as specified in charter)
New York 14-0689340
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3135 Easton Turnpike, Fairfield, CT 06431-0001 203/373-2211
(Address of principal executive offices) (Zip Code) (Telephone No.)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class Name of each exchange on
which registered
Common stock, par value $0.32 per share New York Stock Exchange
Boston Stock Exchange
There were 1,662,526,982 shares of common stock with a par value of
$0.32 outstanding at March 3, 1996. These shares, which constitute all of
the voting stock of the registrant, had an aggregate market value on
March 3, 1996, of $127.8 billion. Affiliates of the Company beneficially
own, in the aggregate, less than one-tenth of one percent of such shares.
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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. x
---
DOCUMENTS INCORPORATED BY REFERENCE
The definitive proxy statement relating to the registrant's Annual
Meeting of Share Owners, to be held April 24, 1996, is incorporated by
reference in Part III to the extent described therein.
<PAGE>
2
PART I
ITEM 1. BUSINESS
GENERAL
Unless otherwise indicated by the context, the terms "GE," "GECS" and
"GE Capital Services" are used on the basis of consolidation described in
note 1 to the consolidated financial statements on page 45 of the 1995
Annual Report to Share Owners of General Electric Company. The financial
section of such Annual Report to Share Owners (pages 25 through 64 of that
document) is set forth in Part IV Item 14(a)(1) of this 10-K Report and is
an integral part hereof. References in Parts I and II of this 10-K Report
are to the page numbers of the 1995 Annual Report to Share Owners included
in Part IV of this 10-K Report. Also, unless otherwise indicated by the
context, "General Electric" means the parent company, General Electric
Company.
General Electric's address is 1 River Road, Schenectady, NY 12345-
6999; the Company also maintains executive offices at 3135 Easton Turnpike,
Fairfield, CT 06431-0001.
The "Company" (General Electric Company and consolidated affiliates)
is one of the largest and most diversified industrial corporations in the
world. From the time of General Electric's incorporation in 1892, the
Company has engaged in developing, manufacturing and marketing a wide
variety of products for the generation, transmission, distribution, control
and utilization of electricity. Over the years, development and
application of related and new technologies have broadened considerably the
scope of activities of the Company and its affiliates. The Company's
products include, but are not limited to, lamps and other lighting
products; major appliances for the home; industrial automation products and
components; motors; electrical distribution and control equipment;
locomotives; power generation and delivery products; nuclear reactors,
nuclear power support services and fuel assemblies; commercial and military
aircraft jet engines; materials, including plastics, silicones and
superabrasives; and a wide variety of high-technology products, including
products used in medical diagnostic applications.
The Company also offers a wide variety of services, including product
support services; electrical product supply houses; electrical apparatus
installation, engineering, repair and rebuilding services; and computer-
related information services. The National Broadcasting Company, Inc.
(NBC), a wholly-owned subsidiary, is engaged principally in furnishing
network television services, in operating television stations, and in
<PAGE>
3
providing cable programming and distribution services in the United States,
Europe, Asia and Latin America. Through another wholly-owned subsidiary,
General Electric Capital Services, Inc. (GECS), and its two principal
subsidiaries, the Company offers a broad array of financial services
including consumer financing, commercial and industrial financing, real
estate financing, asset management and leasing, mortgage services, annuity
and mutual fund sales, specialty insurance and reinsurance. Other services
offered by GECS include satellite communications furnished by its
subsidiary, GE Americom, Inc. The Company also licenses patents and
provides technical services related to products it has developed, but such
activities are not material to the Company.
In November 1994, GE elected to terminate the operations of Kidder,
Peabody Group Inc. (Kidder, Peabody), the GECS securities broker-dealer, by
initiating an orderly liquidation of its assets and liabilities. As part of
the liquidation plan, GE received securities of Paine Webber Group Inc. in
exchange for certain broker-dealer assets and operations. Principal
activities that were discontinued included securities underwriting; sales
and trading of equity and fixed income securities; financial futures
activities; advisory services for mergers, acquisitions and other corporate
finance matters; merchant banking; research services; and asset management.
This liquidation was substantially complete as of December 31, 1995. GE's
Aerospace business segment, its subsidiary GE Government Services, Inc.,
and a component of GE that operated Knolls Atomic Power Laboratory under
contract with the U.S. Department of Energy (together, GE Aerospace) were
transferred on April 2, 1993, to a new company controlled by the
shareholders of Martin Marietta Corporation (a predecessor company of
Lockheed Martin Corporation). The businesses transferred provided high-
technology products and services, such as automated test systems,
electronics, avionic systems, computer software, armament systems, military
vehicle equipment, missile system components, simulation systems,
spacecraft, communication systems, radar, sonar, systems integration, and a
variety of specialized services for government customers. Kidder, Peabody
and GE Aerospace have been classified as discontinued operations in the
1995 Annual Report to Share Owners and throughout this report.
Aggressive and able competition is encountered worldwide in virtually
all of the Company's business activities. In many instances, the
competitive climate is characterized by changing technology that requires
continuing research and development commitments, and by capital-intensive
needs to meet customer requirements. With respect to manufacturing
operations, it is believed that, in general, GE has a leadership position
(i.e., number one or number two) in most major markets served. The NBC
Television Network is one of four major national commercial broadcast
television networks. It also competes with two newly launched commercial
broadcast networks, syndicated broadcast television programming and cable
and satellite television programming activities. The businesses in which
<PAGE>
4
GE Capital Services engages are subject to vigorous competition from
various types of financial institutions, including commercial banks,
thrifts, investment banks, credit unions, leasing companies, consumer loan
companies, independent finance companies, finance companies associated with
manufacturers, and insurance and reinsurance companies.
GE has substantial export sales from the United States. In addition,
the Company has majority, minority or other joint venture interests in a
number of non-U.S. companies engaged primarily in manufacturing and
distributing products and providing nonfinancial services similar to those
sold within the United States. GECS' financial services operations outside
the United States have expanded considerably over the past several years.
INDUSTRY SEGMENTS
The Company's operations are highly decentralized. The basic
organization of the Company's continuing operations consists of 12 key
businesses, which contain management units of differing sizes. For
industry segment reporting purposes, the businesses are aggregated by the
principal industries in which the Company participates. This aggregation
is on a worldwide basis, which means that the operations of multi-industry
non-U.S. affiliates' are classified by appropriate industry segment.
Financial information on consolidated industry segments is presented
on page 35 of the 1995 Annual Report to Share Owners in two parts: one for
GE that includes GECS in the All Other segment on a one-line basis in
accordance with the equity method of accounting, and one for GECS as a
separate entity. For GE, five of the 12 key businesses (Aircraft Engines,
Appliances, Power Systems, Plastics and NBC) represent individual segments
(namely, Aircraft Engines, Appliances, Power Generation, Materials and
Broadcasting, respectively). Except for "All Other," the remaining
businesses are aggregated by the two industry segments in which they
participate (Industrial Products and Systems, and Technical Products and
Services). The All Other segment consists primarily of GECS' earnings,
discussed above, and revenues derived from licensing use of GE technology
to others. For GECS, revenues and operating profit are presented
separately by the two industry segments in which it conducts its business
(Financing and Specialty Insurance). There is appropriate elimination of
the net earnings of GECS and the immaterial effect of transactions between
GE and GECS segments to arrive at total consolidated data.
Additional financial data and commentary on recent operating results
for industry segments are reported on pages 34-37 of the 1995 Annual Report
to Share Owners. Further details can be found in note 27 (pages 60 and 61
of that Report) to the consolidated financial statements. These data and
<PAGE>
5
comments are for General Electric Company's continuing operations, except
as otherwise indicated, and should be referred to in conjunction with the
summary description of each of the industry segments which follows.
AIRCRAFT ENGINES
Aircraft Engines (8.7%, 9.5% and 11.8% of consolidated revenues in
1995, 1994 and 1993, respectively) produces, sells and services jet engines
and related replacement parts for use in military and commercial aircraft.
GE's military engines are used in a wide variety of aircraft that includes
fighters, bombers, tankers, helicopters and surveillance aircraft. The
CFM56, produced jointly by GE and Snecma of France, and GE's CF6 engines
power aircraft in all categories of large commercial aircraft:
short/medium, intermediate and long-range. Applications for the CFM56
engine include: Boeing's 737-300/-400/-500 series and the new 737-600X/-
700/-800 series; Airbus Industrie's A319, A320, A321 and A340 series; and
military aircraft such as the KC-135R, E/KE-3 and E-6. The CF6 family of
engines powers intermediate and long-range aircraft such as Boeing's 747
and 767 series, Airbus Industrie's A300, A310 and A330 series, and
McDonnell Douglas' DC-10 and MD-11 series. The GE90 engine, which was
certified by the Federal Aviation Administration in February 1995, is used
to power Boeing's new 777 series twin-engine aircraft. The Company also
produces jet engines for executive aircraft and regional commuter aircraft,
and aircraft engine derivatives used for marine propulsion, mechanical
drives and industrial power generation sources. The Company also provides
maintenance and repair services for many models of engines, including
engines manufactured by competitors.
The worldwide competition in aircraft jet engines is intense. Both
U.S. and export markets are important. Product development cycles are long
and product quality and efficiency are critical to success. Research and
development expenditures, both customer-financed and internally funded, are
also important in this segment. Potential sales for any engine are limited
by, among other things, its technological lifetime, which may vary
considerably depending upon the rate of advance in the state of the art, by
the small number of potential customers and by the limited number of
airframes. Sales of replacement parts and services are an important part
of the business. Aircraft engine orders tend to follow military and
airline procurement cycles, although cycles for military and commercial
engine procurements are different. U.S. procurements of military jet
engines are affected by the government's response to changes in the global
political and economic outlook. New aircraft and engines are also sold to
commercial leasing enterprises, which invest in and provide such equipment
to airlines.
<PAGE>
6
In line with industry practice, sales of commercial jet aircraft
engines often involve long-term financing commitments to customers. In
making such commitments, it is GE's general practice to require that it
have, or be able to establish, a secured position in the aircraft being
financed. Under such airline financing programs, GE had issued loans and
guaranties (principally guaranties) amounting to $1.4 billion at year-end
1995, and had entered into commitments totaling $1.5 billion to provide
financial assistance on future aircraft engine sales. Estimated fair
values of the aircraft securing these receivables and associated guaranties
exceeded the related account balances or guarantied amounts at December 31,
1995.
For current information about Aircraft Engines orders and backlog,
see page 34 of the 1995 Annual Report to Share Owners.
APPLIANCES
Appliances (8.5%, 9.9% and 10.0% of consolidated revenues in 1995,
1994 and 1993, respectively) manufactures and/or markets a single class of
product - major appliances - that includes refrigerators, electric and gas
ranges, microwave ovens, freezers, dishwashers, clothes washers and dryers,
and room air conditioning equipment. These are sold under GE, Hotpoint,
RCA, Monogram and Profile brands as well as under private brands for
retailers. GE microwave ovens and room air conditioners are mainly sourced
from Asian suppliers while investment in Company-owned U.S. facilities is
focused on refrigerators, dishwashers, ranges (primarily electric, but some
gas) and home laundry equipment. A large portion of appliance sales is for
the replacement market. Such sales are through a variety of retail
outlets. The other principal market consists of residential building
contractors who install appliances in new dwellings. GE has an extensive
U.S. service network that supports its appliance business.
Appliances continues to increase its operating presence in the global
business arena and participates in numerous manufacturing and distribution
joint ventures around the world. In 1995, an agreement was reached with
Kojima, Japan's second largest electronics retailer, to sell GE appliances
directly into the retail market in Japan at a lower ultimate cost to
consumers. In 1993, a joint venture, Godrej-GE, was formed with India's
largest appliance manufacturer, Godrej & Boyce Ltd. Also in 1993, Mabe, a
joint venture in Mexico that produces high-quality gas ranges for the
Mexican and U.S. markets, completed a new top-mount refrigerator facility
and opened a new technology center.
<PAGE>
7
Markets for appliances are influenced by economic trends such as
increases or decreases in consumer disposable income, availability of
credit and housing construction. Competition is very active in all
products and comes from a number of principal manufacturers and suppliers.
An important factor is cost; considerable competitive emphasis is placed on
minimizing manufacturing and distribution costs and on reducing cycle time
from order to product delivery. Other significant factors include brand
recognition, quality, features offered, innovation, customer responsiveness
and appliance service capability. A number of processes, such as Quick
Response, New Product Introduction and Quick Market Intelligence, have been
implemented to improve GE's competitiveness in these areas. An example of
a significant initiative is "Save the Park," a joint initiative between
management and unions, which was implemented during 1993 at Appliance Park
in Louisville, Ky., to streamline processes, improve quality, realize
significant savings and, ultimately, prevent relocation to alternative
sites. In 1995, two major investment projects related to that initiative
were completed: a $70 million upgrade of the large top-mount refrigeration
plant and a $100 million redesign of the home laundry plant.
BROADCASTING
Broadcasting (5.6% of consolidated revenues in 1995, 1994 and 1993)
consists primarily of the National Broadcasting Company (NBC). NBC's
principal businesses are the furnishing within the United States of network
television services to affiliated television stations, the production of
live and recorded television programs, the operation, under licenses from
the Federal Communications Commission (FCC), of television broadcasting
stations, the operation of five cable/satellite networks around the world,
and investment and programming activities in multimedia and cable
television. The NBC Television Network is one of four major U.S.
commercial broadcast television networks and serves more than 200
affiliated stations within the United States. At December 31, 1995, NBC
owned and operated six television stations located in Chicago; Los Angeles;
Miami; New York; Philadelphia; and Washington, D.C. In 1995, NBC announced
the purchase of Outlet Communications, Inc. and its three television
stations serving Columbus, Ohio; Providence, R.I.; and Raleigh, N.C. That
acquisition was completed in February 1996. Broadcasting operations,
including the NBC Television Network and owned stations, are subject to FCC
regulation. NBC's operations include investment and programming activities
in cable television, principally through its ownership of CNBC, America's
Talking, NBC Super Channel, Canal de Noticias NBC and CNBC Asia, as well as
equity investments in Arts and Entertainment, Court TV, American Movie
Classics, Bravo, Prime Network and regional Sports Channels across the
United States. In 1995, NBC launched NBC Digital Publishing, which
publishes CD-ROMs, and NBC Online Ventures, which establishes news, sports
<PAGE>
8
and entertainment sites on the World Wide Web and Microsoft Network.
Internationally, NBC launched CNBC Asia, the first 24-hour business news
channel to be broadcast live from three continents. Also in 1995, NBC
secured United States television rights to the 2000, 2002, 2004, 2006 and
2008 Olympics. Further, NBC completed a transaction with CBS, Inc. (CBS)
that involved an exchange of the assets of NBC's Denver station for the
assets of the CBS station in Philadelphia, as well as an exchange of
signals and transmitters in Miami. The transaction also involved the sale
to CBS of NBC's station in Salt Lake City. In addition, NBC and Microsoft
Corporation announced their intent to create two joint ventures, a 24-hour
news and information cable channel and a comprehensive interactive on-line
news and information service. NBC will contribute the assets of America's
Talking and NBC Desktop, and Microsoft will contribute in excess of $200
million to the joint ventures.
INDUSTRIAL PRODUCTS AND SYSTEMS
Industrial Products and Systems (14.6%, 15.6% and 15.4% of
consolidated revenues in 1995, 1994 and 1993, respectively) encompasses
lighting products, electrical distribution and control equipment,
transportation systems, motors, industrial automation products and GE
Supply. No "similar" class of products or services within the segment
approached 10% of any year's consolidated revenues during the three years
ended December 31, 1995. Customers for many of these products and services
include electrical distributors, original equipment manufacturers and
industrial end users.
Lighting includes a wide variety of lamps - incandescent,
fluorescent, high intensity discharge, halogen and specialty - as well as
outdoor lighting fixtures, wiring devices and quartz products. Markets and
customers are global. In 1995, the Lighting business acquired the remaining
interest in P.T. GE Angkasa Lighting in Indonesia, a joint venture that was
formed the previous year. In 1994, Lighting purchased Focos S.A. in Mexico
and Lindner Licht GmbH in Germany. The business also has strengthened its
position in Asia with the formation of two joint ventures, GE Jiabao
Lighting Company, Ltd. in China, completed in 1994, and Hitachi GE Lighting
Ltd. in Japan, completed in 1993. Another Lighting venture, GE Apar
Lighting Private Ltd., continued to expand with investments in new
facilities and capacity in India. Markets for lighting products are
extremely varied, ranging from household consumers to commercial and
industrial end users and original equipment manufacturers.
Electrical Distribution and Control includes power delivery and
control products such as transformers, electricity meters, relays,
capacitors and arresters sold for installation in commercial, industrial
and residential facilities. In 1995, to bolster European market share and
<PAGE>
9
global competitiveness, Electrical Distribution and Control (ED&C) acquired
a majority interest in the low voltage business of AEG, a European
manufacturer. Also in 1995, GE acquired the remaining interest in the GE
Power Controls joint venture in Europe and Multilin, a leading manufacturer
of electronics in Canada.
Transportation Systems includes locomotives, transit propulsion
equipment, motors for drilling devices and motorized wheels for off-highway
vehicles such as those used in mining operations. Locomotives are sold
worldwide, principally to railroads, while markets for other products
include state and urban transit authorities and industrial users. In 1995,
Transportation Systems formed a joint venture with Harris Corporation, GE-
Harris Railway Electronics, that will expand its market focus to include
communications and logistics systems for locomotive, train and fleet
control. In 1994, the business began production of its alternating current
(AC) locomotives. More than 600 of the 4,400 horsepower units are now in
service on four railroads. A new 6,000 horsepower unit is under
development and pre-production models are expected to be available to
customers in 1996. For further information about Transportation Systems
orders and backlog, see page 34 of the 1995 Annual Report to Share Owners.
Motors and Industrial Systems includes electric motors and related
products, installation, engineering and repair services for the appliance,
commercial, industrial, heating, air conditioning, automotive and utility
markets. Electrical and electronic industrial automation products,
including drive systems, are customized controls and drives for metal and
paper processing, mining, utilities and marine applications. Installation,
engineering and repair services include management and technical expertise
for power plants and other large projects; maintenance, inspection, repair
and rebuilding of electrical apparatus produced by GE and others; and on-
site engineering and upgrading of already installed products sold by GE and
others. Motor products are used within GE and also are sold externally.
In 1995, GE formed a joint venture with Fuji Electric of Japan to jointly
pursue global sales of standard drives. Industrial automation products
cover a broad range of electrical and electronic products with emphasis on
manufacturing and advanced engineering automation applications. Through a
50-50 joint venture (GE Fanuc Automation Corporation) which has two
operating subsidiaries (one in North America and the other in Europe), GE
offers a wide range of high-technology industrial automation systems and
equipment, including computer numerical controls and programmable logic
controls.
GE Supply operates a U.S. network of electrical supply houses and
through its subsidiary, GE Supply Mexico, operates three supply houses in
Mexico. GE Supply offers products of General Electric and other
manufacturers to electrical contractors and to industrial, commercial and
utility customers.
<PAGE>
10
Markets for industrial products generally lag overall economic
slowdowns as well as subsequent recoveries. U.S. industrial markets are
undergoing significant structural changes reflecting, among other factors,
international competition and pressures to modernize productive capacity.
Additional information about certain of GE's industrial businesses follows.
Competition for lighting products comes from a number of global firms
as well as from smaller regional competitors and is based principally on
brand awareness, price, distribution and product innovation. The nature of
lighting products and market diversity make the lighting business somewhat
less sensitive to economic cycles than other businesses in this segment.
Electrical distribution and control equipment is sold to
distributors, electrical contractors, large industrial users and original
equipment manufacturers. Markets are affected principally by levels of
(and cycles in) residential and non-residential construction as well as
domestic industrial plant and equipment expenditures. Competitors include
other large manufacturers, with international competition in U.S. markets
increasing.
In transportation systems, demand is historically cyclical. There is
strong worldwide competition from major firms engaged in the sale of
transportation equipment.
External sales of motors and related products are principally to
manufacturers of original equipment, distributors and industrial users.
Competition includes other motor and component producers, integrated
manufacturers and customers' own in-house capability. Markets for these
products are price competitive, putting emphasis on economies of scale and
manufacturing technology. Other market factors include energy-driven
technological changes and the cyclical nature of the consumer end-user
market. Competition in industrial automation is intense and comes from a
number of U.S. and international sources.
MATERIALS
Materials (9.5%, 9.5% and 9.1% of consolidated revenues in 1995, 1994
and 1993, respectively) includes high-performance plastics used by
compounders, molders and major original equipment manufacturers for use in
a variety of applications, including fabrication of automotive parts,
computer enclosures, major appliance parts and construction materials.
Products also include ABS resins, silicones, superabrasives and laminates.
Market opportunities for many of these products are created by substituting
resins for other materials, which provides customers with productivity
through improved material performance at lower cost. These materials are
<PAGE>
11
sold to a diverse worldwide customer base, mainly manufacturers. The
business has a significant operating presence around the world and
participates in numerous manufacturing and distribution joint ventures.
The business environment is characterized by technological innovation
and heavy capital investment. Being competitive requires emphasis on
efficient manufacturing process implementation and significant resources
devoted to market and application development. Competitors include large,
technology-driven suppliers of the same, as well as other functionally
equivalent, materials. The business is cyclical and is subject to
variations in price and in the availability of raw materials, such as
cumene, benzene and methanol. Adequate capacity to satisfy growing demand
and anticipation of new product or material performance requirements are
key factors affecting competition. In 1995, the business continued
development of a new polycarbonate manufacturing facility in Spain that
will add capacity of 130,000 tons per year and will utilized a new
manufacturing process co-developed with our manufacturing partner, Mitsui
Petrochemicals of Japan.
POWER GENERATION
Power Generation (9.3%, 9.9% and 9.9% of consolidated revenues in
1995, 1994 and 1993, respectively) serves utility, industrial and
governmental customers worldwide with products for the generation of
electricity, with related installation, engineering and repair services and
with environmental systems. Worldwide competition continues to be intense.
For information about orders and backlog, see page 36 of the 1995 Annual
Report to Share Owners. Gas turbines, which for the past several years have
been the fastest growing part of this segment, are used principally as
packaged power plants for electric utilities and for industrial
cogeneration and mechanical drive applications. Through a licensing
arrangement with GEC Alsthom of France, GE has access to the European gas
turbine market. Centrifugal compressors are sold for application in gas
reinjection, pipeline services and such process applications as refineries
and ammonia plants. Steam turbine-generators are sold to the electric
utility industry, to the U.S. Navy and, for cogeneration, to private
industrial customers. Marine steam turbines also are sold to the U.S.
Navy. In 1994, the business acquired an 81% interest in Nuovo Pignone, an
Italian energy equipment manufacturer, further strengthening its position
in Europe, North Africa, the Middle East and Asia. There have been no
nuclear power plant orders in the United States since the mid-1970s. GE is
currently participating in the construction of nuclear power plants in
Japan. GE continues to invest in advanced technology development and to
focus its resources on refueling and servicing its installed boiling-water
reactors.
<PAGE>
12
As discussed in the previous paragraph, there is intense worldwide
competition for power generation products and services. The markets for
most power generation products and services are worldwide and as a result
are sensitive to the economic and political environment of each country in
which the business participates. In the United States, many power
generation markets are sensitive to the financial condition of the electric
utility industry as well as the electric power conservation efforts by
power users. Internationally, the influence of petroleum and related
prices has a large impact on power generation markets.
TECHNICAL PRODUCTS AND SERVICES
Technical Products and Services (6.3%, 7.1% and 7.5% of consolidated
revenues in 1995, 1994 and 1993, respectively) consists of technology
operations providing products, systems and services to a variety of
customers. Principal businesses included in this segment are Medical
Systems and Information Services.
Medical Systems include magnetic resonance (MR) scanners, computed
tomography (CT) scanners, x-ray, nuclear imaging, ultrasound, and other
diagnostic and therapy equipment and supporting services sold to hospitals
and medical facilities worldwide. GE Medical Systems has a significant
operating presence in Europe and Asia, including the operations of its
affiliates, GE Medical Systems S.A. (France), GE Yokogawa Medical Systems
(Japan) and WIPRO GE Medical Systems (India). Acquisitions and joint
ventures continue to expand GE Medical Systems' global activities. In
1995, the business expanded its service offerings by entering into an
agreement with Columbia/HCA, the largest multi-hospital system in the
United States, to manage all of its diagnostic imaging equipment service.
In 1993, GE Medical Systems' increased its presence in Asia through the
purchase of an x-ray manufacturer in Japan, the addition of manufacturing
capacity in China, and the formation of new sales and service joint
ventures in Taiwan and Thailand. Also during 1993, the business opened new
facilities in Argentina, Brazil and Mexico.
Information services are provided to over 40,000 customers around the
world and to internal customers by GE Information Services (GEIS). GEIS is
a leading supplier of business productivity solutions, through the
combination of electronic commerce services, inter-business process
consulting and trading community management. Such solutions assist
customers in lowering their costs, reducing cycle times, and improving
quality in purchasing, logistics, and supplier and distribution channel
management. In May 1994, Ameritech Corporation, a leading
telecommunications company, invested $472 million in GEIS that is intended
to convert to a 30% equity position in that business in the near future.
<PAGE>
13
In 1993, GEIS exercised an option to purchase the remaining shares of
International Network Services, Ltd., a leading European supplier of
electronic data interchange services and software.
Serving a diversity of customers with special needs (which are
rapidly changing in areas such as medical and information systems),
businesses in this segment compete against a variety of both U.S. and non-
U.S. manufacturers or service operations including, in certain cases,
customer in-house capabilities. Technological competence and innovation,
excellence in design, high product performance, quality of service and
competitive pricing are among the key factors affecting competition in the
markets for these products and services. Throughout the world, demands on
health care providers to control costs have become much more important.
Medical Systems is responding with cost-effective technologies that improve
operating efficiency and clinical productivity. See page 36 of the 1995
Annual Report to Share Owners for information about orders and backlog of
GE Medical Systems' products.
ALL OTHER GE
All Other GE consists mostly of earnings of and investment in GECS, a
wholly owned consolidated affiliate, which is accounted for on a one-line
basis in accordance with the equity method of accounting. Other ongoing
operations (0.4% of consolidated revenues in 1995, 1994 and 1993) mainly
involve licensing the use of GE's know-how and patents to others. A
separate discussion of segments within GECS appears below.
GECS SEGMENTS
GECS consists of the ownership of two principal affiliates that,
together with their affiliates and other investments, constitute General
Electric Company's principal financial services activities. GECS owns all
of the common stock of General Electric Capital Corporation (GE Capital or
GECC) and GE Global Insurance Holding Corporation (GE Global Insurance or
GIH), the principal subsidiary of which is Employers Reinsurance
Corporation (ERC).
For industry segment purposes, Financing (27.2%, 24.8% and 22.3% of
consolidated revenues in 1995, 1994 and 1993, respectively) consists solely
of noninsurance activities of GE Capital; Specialty Insurance (10.6%, 8.2%
and 8.7% of consolidated revenues in 1995, 1994 and 1993, respectively)
consists of the activities of ERC as well as the activities of insurance
entities discussed on page 15; and All Other is GECS corporate activities
not identifiable with specific industry segments.
<PAGE>
14
ADDITIONAL INFORMATION FOLLOWS.
Financing activities of GE Capital, none of which individually
constitutes as much as 10% of consolidated revenues, are summarized below.
Very little of the financing provided by GE Capital involves products that
are manufactured by GE.
* Consumer services -- private-label and bank credit card loans,
personal loans, time sales and revolving credit and inventory
financing for retail merchants, auto leasing and inventory
financing, mortgage servicing, and annuity and mutual fund
sales.
* Specialized financing -- loans and financing leases for major
capital assets, including industrial facilities and equipment
and energy-related facilities; commercial and residential real
estate loans and investments; and loans to and investments in
management buyouts, including those with high leverage, and
corporate recapitalizations.
* Equipment management -- leases, loans and asset management
services for portfolios of commercial and transportation
equipment, including aircraft, trailers, auto fleets, modular
space units, railroad rolling stock, data processing equipment,
oceangoing containers and satellites.
* Mid-market financing -- loans and financing and operating
leases for middle-market customers, including manufacturers,
distributors and end users, of a variety of equipment,
including data processing equipment, medical and diagnostic
equipment, and equipment used in construction, manufacturing,
office applications and telecommunications activities.
GE Capital continues to experience broad growth from both internal
sources and through acquisitions. In 1995, GE Capital's consumer services
operations continued to expand its global presence through the acquisitions
of SOVAC SA and Credit de l'Est (France), the Australian Retail Financial
Network (Australia), the Pallas Group (United Kingdom), and the purchase of
the remaining interest in United Merchants Finance Ltd. (Hong Kong). In
1994, it expanded into Japan with the acquisition of the consumer financing
business of Minebea Co., Ltd., which provides a variety of consumer
financial products and services, including consumer credit cards, home
improvement loans, educational loans and collections. Consumer services
operations also acquired Harcourt General's insurance businesses, which
underwrite individual life, health, accident and credit insurance
annuities. Mid-market financing acquired Northern Telecom Finance
<PAGE>
15
Corporation, which provides financing to Northern Telecom's customers and
dealers. In 1993, Consumer Services operations acquired GNA Corporation
from Weyerhauser Company and Weyerhauser Financial Services, Inc. and
United Pacific Life Insurance Company from Reliance Insurance Company and
its parent, Reliance Group Holdings, Inc. Together, these two acquisitions
constitute GECS' annuity business, a business that writes and markets tax-
deferred annuities and sells proprietary and third-party mutual funds
through independent agents and financial institutions. Other 1993
acquisitions expanded GECS' financial services activities in Europe,
Scandinavia and Canada.
GE Capital's activities are subject to a variety of federal and state
regulations including, at the federal level, the Consumer Credit Protection
Act, the Equal Credit Opportunity Act and certain regulations issued by the
Federal Trade Commission. A majority of states have ceilings on rates
chargeable to customers in retail time sales transactions, installment
loans and revolving credit financing. Certain GECS consolidated affiliates
are restricted from remitting funds to GECS in the form of dividends or
loans by a variety of regulations, the purpose of which is to protect
affected insurance policyholders, depositors or investors. GECS'
international operations are also subject to regulation in their respective
jurisdictions. To date, such regulations have not had a material adverse
effect on GE Capital's volume of financing operations or profitability.
Common carrier services of GE Americom are subject to regulation by the
Federal Communications Commission.
On March 28, 1991, GE entered into an agreement to make payments to
GE Capital, constituting additions to pre-tax income, to the extent
necessary to cause the ratio of earnings to fixed charges of GE Capital and
consolidated affiliates (determined on a consolidated basis) to be not less
than 1.10 for the period, as a single aggregation, of each GE Capital
fiscal year commencing with fiscal year 1991. The agreement can only be
terminated by written notice and termination is not effective until the
third anniversary of the date of such notice. GE Capital's ratios of
earnings to fixed charges for the years 1995, 1994 and 1993, respectively,
were 1.51, 1.63 and 1.62, substantially above the level at which payments
would be required. Under a separate agreement, GE has committed to make a
capital contribution to GE Capital in the event certain GE Capital
preferred stock is redeemed and such redemption were to cause the GE
Capital debt-to-equity ratio, excluding from equity all net unrealized
gains and losses on investment securities, to exceed 8 to 1.
Specialty Insurance includes ERC, a multiple-line property and
casualty reinsurer that writes all lines of reinsurance other than title
and annuities, and other insurance activities of GE Capital. ERC reinsures
property and casualty risks written by more than 1,000 U.S. and non-U.S.
insurers, and has subsidiaries located in the United Kingdom, Denmark and,
<PAGE>
16
beginning in 1995, Germany. By means of other subsidiaries, ERC writes
property and casualty reinsurance through brokers and provides reinsurance
brokerage services. ERC also writes certain specialty lines of insurance
on a direct basis, principally excess workers' compensation for self-
insurers, libel and allied torts, and errors and omissions coverage for
insurance and real estate agents and brokers. In 1995, ERC expanded its
European presence through the acquisitions of Frankona Reinsurance and
Aachen Reinsurance in Germany. In December 1994, certain life and property
and casualty affiliates of GE Capital were transferred to ERC. These
affiliates had been managed by ERC since 1986. ERC is licensed in all
states of the United States, the District of Columbia, certain provinces of
Canada and in other jurisdictions. The other insurance activities of GECS
consist of GE Capital affiliates that provide various forms of insurance.
Financial Guaranty Insurance Company provides financial guaranty insurance,
principally on municipal bonds and structured finance issues. GE Capital's
mortgage insurance operations are engaged in providing primary and, on a
limited basis, pooled private mortgage insurance. Other affiliates provide
creditor insurance for international retail borrowers and, for GE Capital
customers, credit life and certain types of property and casualty
insurance. Businesses in the Specialty Insurance segment are generally
subject to regulation by various insurance regulatory agencies.
GEOGRAPHIC SEGMENTS, EXPORTS FROM THE U.S. AND TOTAL INTERNATIONAL
OPERATIONS
Financial data for geographic segments (based on the location of the
Company operation supplying goods or services and including exports from
the U.S. to unaffiliated customers) are reported in note 28 to consolidated
financial statements on page 62 of the 1995 Annual Report to Share Owners.
Additional financial data about GE's exports from the U.S. and total
international operations are on page 38 of the 1995 Annual Report to Share
Owners.
ORDERS BACKLOG
See pages 34, 36, 42 and 43 of the 1995 Annual Report to Share Owners
for information about GE's backlog of unfilled orders.
RESEARCH AND DEVELOPMENT
Total expenditures for research and development were $1,892 million
in 1995. Total expenditures had been $1,741 million in 1994 and $1,955
million in 1993. Of these amounts, $1,299 million in 1995 was GE-funded
<PAGE>
17
($1,176 million in 1994 and $1,297 million in 1993); and $593 million in
1995 was funded by customers ($565 million in 1994 and $658 million in
1993), principally the U.S. government. Aircraft Engines accounts for the
largest share of GE's R&D expenditures from both Company and customer
funds. Other significant expenditures of Company and customer research and
development funds were for Power Systems, Medical Systems and Plastics.
Approximately 7,900 person-years of scientist and engineering effort
were devoted to research and development activities in 1995, with about 79%
of the time involved primarily in GE-funded activities.
ENVIRONMENTAL MATTERS
See page 42 of GE's 1995 Annual Report to Share Owners for a
discussion of environmental matters.
EMPLOYEE RELATIONS
At year-end 1995, General Electric Company and consolidated
affiliates employed 222,000 persons, of whom approximately 150,000 were in
the United States. For further information about employees, see page 43 of
the 1995 Annual Report to Share Owners.
Approximately 40,700 GE manufacturing, engineering and service
employees in the United States are represented for collective bargaining
purposes by a total of approximately 170 different local collective
bargaining groups. A majority of such employees is represented by union
locals that are affiliated with, and bargain in conjunction with, the
International Union of Electronic, Electrical, Salaried, Machine and
Furniture Workers (IUE-AFL-CIO). During 1994, General Electric Company
negotiated three-year contracts with unions representing a substantial
majority of those United States employees who are represented by unions.
Most of these contracts will terminate in June 1997. NBC is party to
approximately 100 labor agreements covering about 2,000 staff employees
(and a large number of freelance employees) in the United States. These
agreements are with various labor unions, expire at various dates and are
generally for a term of three to four years. Contracts covering
approximately one fourth of NBC's staff employees have expired and are
currently under negotiation.
<PAGE>
18
EXECUTIVE OFFICERS
See Part III, Item 10 of this 10-K Report for information about
Executive Officers of the Registrant.
OTHER
Because of the diversity of the Company's products and services, as
well as the wide geographic dispersion of its production facilities, the
Company uses numerous sources for the wide variety of raw materials needed
for its operations. The Company has not been adversely affected by
inability to obtain raw materials.
The Company owns, or holds licenses to use, numerous patents. New
patents are continuously being obtained through the Company's research and
development activities as existing patents expire. Patented inventions are
used both within the Company and licensed to others, but no industry
segment is substantially dependent on any single patent or group of related
patents.
About 3% of consolidated revenues in 1995 (4% of GE revenues) were
from sales of goods and services to agencies of the U.S. government, which
is the Company's largest single customer. About 2% of consolidated
revenues in 1995 (3% of GE revenues) were defense-related sales of aircraft
engine goods and services.
About 4% of consolidated revenues in 1994 (5% of GE revenues) were
from sales of goods and services to agencies of the U.S. government. About
3% of consolidated revenues in 1994 (4% of GE revenues) were defense-
related sales of aircraft engine goods and services.
In 1993 about 5% of consolidated revenues (7% of GE revenues) were
from sales of goods and services to agencies of the U.S. government. About
4% of consolidated revenues in 1993 (6% of GE revenues) were defense-
related sales of aircraft engine goods and services.
ITEM 2. PROPERTIES
Manufacturing operations are carried on at approximately 136
manufacturing plants located in 30 states in the United States and Puerto
Rico and at some 122 manufacturing plants located in 25 other countries.
<PAGE>
19
ITEM 3. LEGAL PROCEEDINGS
GENERAL
As previously reported, the directors (other than Messrs. Calloway,
Gonzalez, Opie, Penske and Warner) and certain officers are defendants in a
civil suit purportedly brought on behalf of the Company as a shareholder
derivative action by Leslie McNeil, Harold Sachs, Arun Shingala and Paul
and Harriet Luts (the McNeil action) in New York State Supreme Court on
November 19, 1991. The suit alleges the Company was negligent and engaged
in fraud in connection with the design and construction of containment
systems for nuclear power plants and contends that, as a result, GE has
incurred significant financial liabilities and is potentially exposed to
additional liabilities from claims brought by the Company's customers. The
suit alleges breach of fiduciary duty by the defendants and seeks
unspecified compensatory damages and other relief. On March 31, 1992, the
defendants filed motions to dismiss the suit. On September 28, 1992, the
court denied the motions as premature but ruled that they may be renewed
after the completion of limited discovery. Defendants moved for
reconsideration of that order, and on April 3, 1993, the court granted
defendants' motion for reconsideration and directed that discovery be
stayed pending the filing of an amended complaint. Plaintiffs filed an
amended complaint on March 18, 1994, alleging breach of fiduciary duty,
waste and indemnification claims. The defendants' time for responding to
the amended complaint has been extended until 30 days following the
completion of discovery. The defendants believe the plaintiffs' claims are
without merit.
As previously reported, on September 15, 1992, Evelyn Benfield filed
a shareholder derivative action in United States District Court in
Cincinnati, Ohio, purportedly on behalf of the Company, seeking
compensatory damages and equitable relief arising out of the alleged
failure to implement effective internal controls to prevent government
contract fraud. The complaint names as defendants all of the current
directors (except Messrs. Dammerman, Gonzalez, Opie, Penske and Warner),
certain former directors, a former officer, and a former employee of the
Company. Plaintiff claimed, in substance, that various defendants breached
their fiduciary duties to the Company under state law by either
participating in or failing to prevent government contract fraud.
Plaintiff's claims were based primarily upon the fact that, in July 1992,
the Company pled guilty to four federal felony counts and settled a related
federal False Claims Act civil suit, all of which were related to
diversions of funds in connection with the Company's sale of military
aircraft engines to Israel. The Company paid a fine of $9.5 million and
simultaneously agreed to pay $59.5 million to settle the False Claims Act
<PAGE>
20
suit. On December 3, 1993, the court approved a settlement of the
derivative action. Under the terms of the settlement, the Company received
a payment of $19.5 million from an insurance policy that it maintains to
cover officers' liability, less plaintiff's counsel fees and expenses
awarded by the court. The defendants denied all allegations of wrongdoing,
and all parties to the action agreed that the settlement was premised upon
the litigation risks associated with the claims that a single former
officer non-willfully failed to implement effectively the Company's
compliance policies and procedures. In agreeing to resolve this matter,
plaintiff did not contest the director-defendants' position that they had
lawfully discharged their duties to GE and that the Company, at all
relevant times, had in existence detailed plans and procedures designed to
promote and enforce compliance with relevant laws. One share owner appealed
the United States District Court's order approving the settlement. The
United States Court of Appeals for the Sixth Circuit dismissed the appeal
on November 10, 1994, and on January 12, 1995, denied the share owner's
petition for rehearing. The case was concluded on June 25, 1995, when the
United States Supreme Court denied the shareowner's petition for a writ of
certiorari.
As previously reported, the directors (except Messrs. Dammerman, Opie
and Penske) and certain former directors were defendants in a civil suit
purportedly brought on behalf of the Company as a share owner derivative
action (the Bildstein action) which was commenced in New York State Supreme
Court in January 1994. The suit sought compensatory damages arising out of
the purported failure of the defendants to prevent alleged government
contract fraud and alleged violations of the Foreign Corrupt Practices Act
in connection with U.S. government-funded sales of military equipment to
Egypt by a unit of the Company's former GE Aerospace component. The GE
Aerospace businesses were transferred to a new company controlled by the
shareholders of Martin Marietta Corporation (a predecessor company of
Lockheed Martin Corporation) in 1993. The suit claimed that the risk of
litigation arising from the alleged wrongdoing caused the Company to
receive less than it would have otherwise received in connection with the
transfer of GE Aerospace. On April 6, 1994, the Company and all other
defendants moved to dismiss the complaint based on the plaintiff's failure
to make a pre-litigation demand, among other reasons. On September 30,
1994, the court dismissed the complaint. On December 18, 1995, the
Appellate Division of the Supreme Court of New York affirmed the dismissal.
As previously reported, on March 12, 1993, a complaint was filed in
United States District Court for the District of Connecticut by ten
employees of the Company's Aerospace business, purportedly on behalf of all
GE Aerospace employees whose GE employment status is or was affected by the
then planned transfer of GE Aerospace to a new company controlled by the
<PAGE>
21
stockholders of Martin Marietta. The complaint sought to clarify and
enforce the plaintiffs' claimed rights to pension benefits in accordance
with, and rights to assets then held in, the GE Pension Plan (the "Plan").
The complaint names the Company, the trustees of the GE Pension Trust
("Trust"), and Martin Marietta Corporation and one of its former plan
administrators as defendants. The complaint alleged that the Company's
planned transfer of certain assets of the Trust to a Martin Marietta
pension trust, in connection with the transfer of the Aerospace business,
violated the rights of the plaintiffs under the Plan and applicable
provisions of the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code. The complaint sought equitable and declaratory
relief, including an injunction against transfer of the Plan assets except
under circumstances and protections, if any, approved by the court, an
order that the Company disgorge all profits allegedly received by it as a
result of any such transfer and the making of restitution to the Trust for
alleged investment losses resulting from the Company's treatment of Plan
assets in connection with the transaction or alternatively the transfer of
additional assets from the Trust to a new Martin Marietta pension trust,
and an order requiring Martin Marietta to continue to offer transferred
employees all accrued pension-related benefits for which they were eligible
under the Plan as of the closing date of the transfer of the GE Aerospace
business to Martin Marietta. On March 23, 1993, the Company and Martin
Marietta Corporation filed motions to dismiss the complaint on the basis
that the complaint does not state any claim upon which relief can be
granted as a matter of law. This motion remains pending. On April 2,
1993, the transfer of the Aerospace business occurred, and on June 7, 1993,
the court issued an order denying plaintiffs' request for injunctive
relief.
As previously reported, following the Company's announcement on April 17,
1994, of a $210 million charge to net earnings based upon its discovery of
false trading profits at its indirect subsidiary, Kidder, Peabody & Co.,
Incorporated ("Kidder"), the United States Securities and Exchange
Commission ("SEC"), the United States Attorney for the Southern District of
New York, and the New York Stock Exchange initiated investigations relating
to the false trading profits. On January 9, 1996, the SEC initiated
administrative enforcement proceedings against the former head of Kidder's
government securities trading desk, Joseph Jett, alleging that he engaged
in securities fraud and other violations and against two of his former
supervisors for failure to supervise. Also, two civil suits purportedly
brought on behalf of the Company as shareholder derivative actions were
filed in New York State Supreme Court in New York County. Both suits claim
that the Company's directors breached their fiduciary duties to the Company
by failing to adequately supervise and control the Kidder employee
responsible for the irregular trading. One suit, claiming damages of over
<PAGE>
22
$350 million, was filed on May 10, 1994, by the Teachers' Retirement System
of Louisiana against the Company, its directors (other than Messrs.
Dammerman, Opie and Penske), Kidder, its parent, Kidder, Peabody Group
Inc., and certain of Kidder's former officers and directors. The other
suit was filed on June 3, 1994, by William Schrank and others against the
Company's directors claiming unspecified damages and other relief. On May
19, 1995, the Company and the director defendants moved to dismiss the
amended consolidated complaint for failure to make a pre-litigation demand,
among other reasons. In addition, various shareholders of the Company have
filed two purported class action suits claiming that the Company and
Kidder, and certain of Kidder's former officers and employees, allegedly
violated federal securities laws by issuing statements concerning the
Company's financial condition that included the false trading profits at
Kidder, and seeking compensatory damages for shareholders who purchased the
Company's stock beginning as early as January 1993. The defendants filed
motions to dismiss these purported class action suits. On October 4, 1995,
the court dismissed the complaint against the Company, but denied the
motion to dismiss the complaint against Kidder. On November 3, 1995, the
plaintiffs in the case against the Company appealed the trial court's
dismissal of their complaint to the Second Circuit Court of Appeals.
ENVIRONMENTAL
As previously reported, in September of 1993, the Environmental
Protection Agency notified the Company that it was seeking at least
$600,000 in penalties for alleged violations of the Clean Air Act at its
Lynn, Massachusetts, Aircraft Engines facility. The allegations include
the failure to undergo required permit reviews. The Company has
tentatively agreed to settle the matter for $400,000.
In January 1995, the Louisiana Department of Environmental Quality
announced that it was seeking a penalty of $101,884 for alleged violations
of its groundwater protection act. The Company has requested a hearing and
settlement discussions are underway.
In August of 1995, the Georgia Department of Natural Resources issued
a draft Corrective Action Consent Order seeking $100,000 in penalties for
violations of the Georgia Hazardous Waste Rules at the Company's Rome,
Georgia facility. Settlement negotiations are underway.
___________________________________
<PAGE>
23
It is the view of management that none of the above described
proceedings will have a material effect on the Company's consolidated
earnings, liquidity or competitive position.
For further information regarding environmental matters, see page 42
of GE's 1995 Annual Report to Share Owners.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
With respect to "Stock Exchange Information", in the United States,
GE common stock is listed on the New York Stock Exchange (its principal
market) and on the Boston Stock Exchange. GE common stock also is listed
on certain foreign exchanges, including The Stock Exchange, London.
Trading, as reported on the New York Stock Exchange, Inc., Composite
Transactions Tape, and dividend information follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Common stock market price
------------------------- Dividends
(In dollars) High Low declared
- ------------------------------------------------------------------------
<S> <C> <C> <C>
1995
Fourth quarter $ 73 1/8 $ 61 $ .46
Third quarter 64 5/8 56 3/8 .41
Second quarter 59 1/4 53 3/8 .41
First quarter 56 49 7/8 .41
1994
Fourth quarter 51 7/8 45 3/8 .41
Third quarter 51 3/8 46 1/4 .36
Second quarter 50 3/8 45 .36
First quarter 54 7/8 48 1/4 .36
- ------------------------------------------------------------------------
</TABLE>
<PAGE>
24
As of December 31, 1995, there were about 459,000 share owner
accounts of record.
ITEM 6. SELECTED FINANCIAL DATA
Reported as data for revenues; earnings from continuing operations;
earnings from continuing operations per share; earnings (loss) from
discontinued operations; earnings before accounting changes; net earnings;
net earnings per share; dividends declared; dividends declared per share;
long-term borrowings; and total assets of continuing operations appearing
on page 43 of the Annual Report to Share Owners for the fiscal year ended
December 31, 1995.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Reported on pages 32-34 and 36-43 (and graphs on pages 32, 33, 37,
38, 39, 40, 41 and 42) of the Annual Report to Share Owners for the fiscal
year ended December 31, 1995.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See index under item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
<PAGE>
25
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Executive Officers of the Registrant (As of March 20, 1996)
<TABLE>
<CAPTION>
Date assumed
Executive Officer
Name Position Age position
- ---- -------- --- ----------------
<S> <C> <C> <C>
John F. Welch, Jr. Chairman of the Board and Chief
Executive Officer 60 April 1981
Philip D. Ameen Vice President and Comptroller 47 April 1994
James R. Bunt Vice President and Treasurer 54 January 1993
David L. Calhoun Vice President, GE Transportation Systems 38 June 1995
William J. Conaty Senior Vice President, Human Resources 50 October 1993
Dennis D. Dammerman Senior Vice President, Finance 50 March 1984
Lewis S. Edelheit Senior Vice President, Research and
Development 53 November 1992
Paolo Fresco Vice Chairman and Executive Officer 62 October 1987
Dale F. Frey Vice President and President, GE Investment
Corporation 63 March 1986
Benjamin W. Heineman, Jr. Senior Vice President, General Counsel
and Secretary 52 September 1987
W. James McNerney, Jr. Senior Vice President, GE Lighting 46 January 1992
Eugene F. Murphy Senior Vice President, GE Aircraft Engines 60 October 1986
Robert L. Nardelli Senior Vice President, GE Power Systems 47 February 1992
Robert W. Nelson Vice President, Financial Planning
and Analysis 55 September 1991
John D. Opie Vice Chairman of the Board and Executive
Officer 58 August 1986
Gary M. Reiner Vice President, Business Development 41 January 1991
Gary L. Rogers Senior Vice President, GE Plastics 51 December 1989
James W. Rogers Vice President, GE Motors and
Industrial Systems 45 May 1991
J. Richard Stonesifer Senior Vice President, GE Appliances 59 January 1992
John M. Trani Senior Vice President, GE Medical Systems 51 September 1986
Lloyd G. Trotter Vice President, GE Electrical Distribution
and Control 50 November 1992
</TABLE>
All Executive Officers are elected by the Board of Directors for an
initial term which continues until the first Board meeting following the
next annual statutory meeting of share owners and thereafter are elected
for one-year terms or until their successors have been elected.
<PAGE>
26
All Executive Officers have been executives of GE for the last five
years except Robert L. Nardelli and Lewis S. Edelheit. Mr. Nardelli, who
was an employee of GE from June 1971 through June 1988, was Executive Vice
President and General Manager of J. I. Case, a manufacturer of construction
equipment and farm machinery, from July 1988 to May 1991, and thereafter
President of Camco, a Canadian subsidiary of GE that manufactures,
distributes, sells and services appliances, until February 1992. Dr.
Edelheit, who was an employee of GE from 1969 through 1985, was President
and CEO of Quantum Medical Systems, Inc. (Quantum) from 1986 to August
1991, and thereafter Manager - Electronic Systems Research Center, GE
Corporate Research and Development Laboratory, until November 1992.
Quantum is a venture capital-backed medical ultrasound company that was
acquired by Siemens A.G. in July 1990.
The remaining information called for by this item is incorporated by
reference to "Election of Directors" in the definitive proxy statement
relating to the registrant's Annual Meeting of Share Owners to be held
April 24, 1996.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference to "Board of Directors and Committees,"
"Summary Compensation Table," "Stock Appreciation Rights and Stock Options"
and "Retirement Benefits" in the definitive proxy statement relating to the
registrant's Annual Meeting of Share Owners to be held April 24, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference to "Information relating to Directors,
Nominees and Executive Officers" in the registrant's definitive proxy
statement relating to its Annual Meeting of Share Owners to be held April
24, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference to "Certain Transactions" in the
registrant's definitive proxy statement relating to its Annual Meeting of
Share Owners to be held April 24, 1996.
<PAGE>
27
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)1. Financial statements applicable to General Electric Company and
consolidated affiliates and contained on the page(s) indicated
in the GE Annual Report to Share Owners for the fiscal year
ended December 31, 1995.
<TABLE>
<CAPTION>
Annual 10-K
Report Report
Page(s) Page(s)
------- -------
<S> <C> <C>
Statement of earnings for the years
ended December 31, 1995, 1994 and 1993 26 F-2
Statement of financial position at
December 31, 1995 and 1994 28 F-4
Statement of cash flows for the years
ended December 31, 1995, 1994 and 1993 30 F-6
Independent Auditors' Report 44 F-20
Other financial information:
Notes to consolidated financial
statements 45-64 F-21 to F-40
Industry segment information 35 F-11
60-61 F-36 to F-37
Geographic segment information 62 F-38
Operations by quarter (unaudited) 64 F-40
</TABLE>
(a)2. Financial Statement Schedule for General Electric Company and
consolidated affiliates.
<TABLE>
<CAPTION>
Schedule Page
-------- ----
<S> <C> <C>
II Valuation and Qualifying Accounts F-41
</TABLE>
The schedules listed in Reg. 210.5-04, except those listed above,
have been omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes
thereto.
<PAGE>
28
(a)3. Exhibit Index
(3) Restated Certificate of Incorporation, as amended, and By-laws,
as amended, of General Electric Company. (Incorporated by
reference to Exhibit of the same number to General Electric
Form 8-K (Commission file number 1-35) filed with the
Commission April 28, 1994.)
(4) Agreement to furnish to the Securities and Exchange Commission
upon request a copy of instruments defining the rights of
holders of certain long-term debt of the registrant and
consolidated subsidiaries. (Incorporated by reference to
Exhibit of the same number to General Electric Annual Report on
Form 10-K (Commission file number 1-35) for the fiscal year
ended December 31, 1994.)
(10) All of the following exhibits consist of Executive Compensation
Plans or Arrangements:
(a) General Electric Incentive Compensation Plan, as amended
effective July 1, 1991. (Incorporated by reference to
Exhibit of the same number to General Electric Annual
Report on Form 10-K (Commission file number 1-35) for the
fiscal year ended December 31, 1991.)
(b) General Electric 1983 Stock Option-Performance Unit Plan.
(Incorporated by reference to Exhibit of the same number
to General Electric Annual Report on Form 10-K
(Commission file number 1-35) for the fiscal year ended
December 31, 1988.)
(c) General Electric Supplementary Pension Plan, as amended
effective July 1, 1991.(Incorporated by reference to
Exhibit 10(e) to General Electric Annual Report on Form
10-K (Commission file number 1-35) for the fiscal year
ended December 31, 1991.)
(d) Amendment to General Electric Supplementary Pension Plan
dated May 22, 1992.(Incorporated by reference to Exhibit
10(d) to General Electric Annual Report on Form 10-K
(Commission file number 1-35) for the fiscal year ended
December 31, 1992.)
(e) Amendment to General Electric Supplementary Pension Plan,
dated September 10, 1993.(Incorporated by reference to
Exhibit 10(e) to General Electric Annual Report on Form
10-K (Commission file number 1-35) for the fiscal year
ended December 31, 1993.)
<PAGE>
29
(f) Amendment to General Electric Supplementary Pension Plan,
dated July 1, 1994. (Incorporate by reference to Exhibit
of the same number to General Electric Annual Report on
Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1994.)
(g) General Electric Deferred Compensation Plan for
Directors, as amended May 25, 1990.(Incorporated by
reference to Exhibit 10(f) to General Electric Annual
Report on Form 10-K (Commission file number 1-35) for the
fiscal year ended December 31, 1990.)
(h) General Electric Insurance Plan for Directors.
(Incorporated by reference to Exhibit 10(i) to General
Electric Annual Report on Form 10-K (Commission file
number 1-35) for the fiscal year ended December 31,
1980.)
(i) General Electric Financial Planning Program, as amended
through September 1993. (Incorporated by reference to
Exhibit 10(h) to General Electric Annual Report on Form
10-K (Commission file number 1-35) for the fiscal year
ended December 31, 1993.)
(j) General Electric Supplemental Life Insurance Program, as
amended February 8, 1991.(Incorporated by reference to
Exhibit 10(i) to General Electric Annual Report on Form
10-K (Commission file number 1-35) for the fiscal year
ended December 31, 1990.)
(k) General Electric Directors' Retirement and Optional Life
Insurance Plan.(Incorporated by reference to Exhibit
10(j) to General Electric Annual Report on Form 10-K
(Commission file number 1-35) for the fiscal year ended
December 31, 1986.)
(l) General Electric 1987 Executive Deferred Salary Plan.
(Incorporated by reference to Exhibit 10(k) to General
Electric Annual Report on Form 10-K (Commission file
number 1-35) for the fiscal year ended December 31,
1987.)
(m) General Electric 1989 Stock Option Plan for Non-Employee
Directors.(Incorporated by reference to Exhibit A to the
General Electric Proxy Statement for its Annual Meeting
of Share Owners held on April 26, 1989.)
<PAGE>
30
(n) General Electric 1990 Long-Term Incentive Plan.
(Incorporated by reference to Exhibit A to the General
Electric Proxy Statement for its Annual Meeting of Share
Owners held April 25, 1990.)
(o) General Electric 1991 Executive Deferred Salary Plan.
(Incorporated by reference to Exhibit 10(n) to General
Electric Annual Report on Form 10-K (Commission file
number 1-35) for the fiscal year ended December 31,
1990.)
(p) General Electric 1994 Executive Deferred Salary Plan.
(Incorporated by reference to Exhibit 10(o) to General
Electric Annual Report on Form 10-K (Commission file
number 1-35) for the fiscal year ended December 31,
1993.)
(q) General Electric Directors' Charitable Gift Plan, as
amended through May 1993. (Incorporated by reference to
Exhibit 10(p) to General Electric Annual Report on Form
10-K (Commission file number 1-35) for the fiscal year
ended December 31, 1993.)
(r) Restated Employment Agreement, dated January 2, 1992, and
Restated U.K. Employment Agreement, dated January 3,
1992, in each case between the registrant and P. Fresco,
an Executive Officer and Director of the registrant.
(Incorporated by reference to Exhibit 10(o) to General
Electric Annual Report on Form 10-K (Commission file
number 1-35) for the fiscal year ended December 31,
1992.)
(s) General Electric Leadership Life Insurance Program,
effective January 1, 1994. (Incorporated by reference to
Exhibit 10(r) to General Electric Annual Report on Form
10-K (Commission file number 1-35) for the fiscal year
ended December 31, 1993.)
(t) General Electric 1995 Executive Deferred Salary Plan.*
(11) Statement re Compilation of Per Share Earnings.*
(12) Computation of Ratio of Earnings to Fixed Charges.*
(21) Subsidiaries of Registrant.*
<PAGE>
31
(23) Consent of independent auditors incorporated by reference in
each Prospectus constituting part of the Registration
Statements on Form S-3 (Registration Nos. 33-29024, 33-3908,
2-82072, 33-37106, 33-35922, 33-44593, 33-39596, 33-39596-01,
33-47181, 33-47085, 33-50639, 33-61029 and 33-61029-01) and on
Form S-8 (Registration Nos. 33-4239, 33-23441, 33-24679, 2-
84145, 33-47500 and
33-49053).*
(24) Power of Attorney.*
(27) Financial Data Schedule.*
(99)(a) Income Maintenance Agreement, dated March 28, 1991, between
the registrant and General Electric Capital Corporation.
(Incorporated by reference to Exhibit 28(a) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for
the fiscal year ended December 31, 1990.)
(99)(b) Undertaking for Inclusion in Registration Statements on Form
S-8 of General Electric Company. (Incorporated by reference to
Exhibit 99(b) to General Electric Annual Report on Form 10-K
(Commission file number 1-35) for the fiscal year ended
December 31, 1992.)
* Filed electronically herewith.
(b) Reports on Form 8-K during the quarter ended December 31, 1995.
There were no reports on Form 8-K filed by the registrant
during the fourth quarter of 1995.
<PAGE>
32
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities and
Exchange Act of 1934, the registrant has duly caused this annual report on
Form 10-K for the fiscal year ended December 31, 1995, to be signed on its
behalf by the undersigned, and in the capacities indicated, thereunto duly
authorized in the Town of Fairfield and State of Connecticut on the 20th
day of March 1996.
General Electric Company
(Registrant)
By Dennis D. Dammerman
-----------------------------
Senior Vice President-Finance
(Principal Financial Officer)
<PAGE>
33
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signer Title Date
------ ----- ----
Dennis D. Dammerman
- -------------------------------
Senior Vice President - Finance Principal Financial March 20, 1996
Officer
Philip D. Ameen
- ------------------------------
Vice President and Comptroller Principal Accounting March 20, 1996
Officer
John F. Welch, Jr.* Chairman of the Board of Directors
(Principal Executive Officer)
D. Wayne Calloway* Director
Silas S. Cathcart* Director
Dennis D. Dammerman* Director
Paolo Fresco* Director
Claudio X. Gonzalez* Director
Robert E. Mercer* Director
Gertrude G. Michelson* Director
John D. Opie* Director
Barbara Scott Preiskel* Director
Andrew C. Sigler* Director
Douglas A. Warner III* Director
A majority of the Board of Directors
*By Benjamin W. Heineman, Jr.
--------------------------------
Attorney-in-fact
March 20, 1996
<PAGE>
F-1
(Annual Report Pages)
Annual Report Page No. 25
FINANCIAL SECTION
CONTENTS
44 INDEPENDENT AUDITORS' REPORT
AUDITED FINANCIAL STATEMENTS
26 Earnings
28 Financial Position
30 Cash Flows
45 Notes to Consolidated Financial Statements
MANAGEMENT'S DISCUSSION
32 Operations
32 Consolidated Operations
33 GE Continuing Operations
34 Industry Segments
36 GECS Continuing Operations
38 International Operations
39 Financial Resources and Liquidity
42 Selected Financial Data
44 Financial Responsibility
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
REVENUES
(In billions) 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$51.283 $53.051 $55.701 $60.109 $70.028
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
EARNINGS PER SHARE FROM
CONTINUING OPERATIONS
BEFORE ACCOUNTING CHANGES
(In dollars) 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$2.27 $2.41 $2.45 $3.46 $3.90
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
DIVIDENDS PER SHARE
(In dollars) 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$1.04 $1.16 $1.305 $1.49 $1.69
- -----------------------------------------------------------------------------
</TABLE>
<PAGE>
F-2
Annual Report Page No. 26
<TABLE>
STATEMENT OF EARNINGS
<CAPTION>
General Electric Company
and consolidated affiliates
-----------------------------------
For the years ended December 31 (In millions) 1995 1994 1993
- -------------------------------------------------------------- -----------------------------------
<S> <C> <C> <C>
REVENUES
Sales of goods $33,157 $30,740 $29,509
Sales of services 9,733 8,803 8,268
Other income (note 3) 752 793 735
Earnings of GECS from continuing operations - - -
GECS revenues from operations (note 4) 26,386 19,773 17,189
------- ------- -------
Total revenues 70,028 60,109 55,701
------- ------- -------
COSTS AND EXPENSES (note 5)
Cost of goods sold 24,288 22,748 22,606
Cost of services sold 6,682 6,214 6,308
Interest and other financial charges 7,286 4,949 4,054
Insurance losses and policyholder and annuity benefits 5,285 3,507 3,172
Provision for losses on financing receivables (note 8) 1,117 873 987
Other costs and expenses 15,429 12,987 12,287
Minority interest in net earnings of consolidated
affiliates 204 170 151
------- ------- -------
Total costs and expenses 60,291 51,448 49,565
------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
ACCOUNTING CHANGE 9,737 8,661 6,136
Provision for income taxes (note 9) (3,164) (2,746) (1,952)
------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS BEFORE ACCOUNTING CHANGE 6,573 5,915 4,184
EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS (note 2) - (1,189) 993
------- ------- -------
EARNINGS BEFORE ACCOUNTING CHANGE 6,573 4,726 5,177
Cumulative effect of accounting change (note 20) - - (862)
------- ------- -------
NET EARNINGS $ 6,573 $ 4,726 $ 4,315
======= ======= =======
- ---------------------------------------------------------------------------------------------------------
NET EARNINGS PER SHARE (in dollars)
Continuing operations before accounting change $ 3.90 $ 3.46 $ 2.45
Discontinued operations before accounting change - (0.69) 0.58
------- ------- -------
Earnings before accounting change 3.90 2.77 3.03
Cumulative effect of accounting change - - (0.51)
------- ------- -------
Net earnings per share $ 3.90 $ 2.77 $ 2.52
======= ======= =======
- ---------------------------------------------------------------------------------------------------------
DIVIDENDS DECLARED PER SHARE (in dollars) $ 1.69 $ 1.49 $ 1.305
- ---------------------------------------------------------------------------------------------------------
<FN>
The notes to consolidated financial statements on pages 45-64 are an integral
part of this statement.
</TABLE>
<PAGE>
F-3
Annual Report Page No. 27
<TABLE>
STATEMENT OF EARNINGS
<CAPTION>
GE GECS
-------------------------------- --------------------------------
For the years ended December 31 (In millions) 1995 1994 1993 1995 1994 1993
- ---------------------------------------------------------- -------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Sales of goods $33,177 $30,767 $29,533 $ - $ - $ -
Sales of services 9,836 8,863 8,289 - - -
Other income (note 3) 753 783 730 - - -
Earnings of GECS from continuing operations 2,415 2,085 1,567 - - -
GECS revenues from operations (note 4) - - - 26,492 19,875 17,276
------- ------- ------- ------- ------- -------
Total revenues 46,181 42,498 40,119 26,492 19,875 17,276
------- ------- ------- ------- ------- -------
COSTS AND EXPENSES (note 5)
Cost of goods sold 24,308 22,775 22,630 - - -
Cost of services sold 6,785 6,274 6,329 - - -
Interest and other financial charges 649 410 525 6,661 4,545 3,538
Insurance losses and policyholder and annuity benefits - - - 5,285 3,507 3,172
Provision for losses on financing receivables (note 8) - - - 1,117 873 987
Other costs and expenses 5,743 5,211 5,124 9,769 7,862 7,236
Minority interest in net earnings of consolidated
affiliates 64 31 17 140 139 134
------- ------- ------- ------- ------- -------
Total costs and expenses 37,549 34,701 34,625 22,972 16,926 15,067
------- ------- ------- ------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
ACCOUNTING CHANGE 8,632 7,797 5,494 3,520 2,949 2,209
Provision for income taxes (note 9) (2,059) (1,882) (1,310) (1,105) (864) (642)
------- ------- ------- ------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS BEFORE ACCOUNTING CHANGE 6,573 5,915 4,184 2,415 2,085 1,567
EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS (note 2) - (1,189) 993 - (1,189) 240
------- ------- ------- ------- ------- -------
EARNINGS BEFORE ACCOUNTING CHANGE 6,573 4,726 5,177 2,415 896 1,807
Cumulative effect of accounting change (note 20) - - (862) - - -
------- ------- ------- ------- ------- -------
NET EARNINGS $ 6,573 $ 4,726 $ 4,315 $ 2,415 $ 896 $ 1,807
======= ======= ======= ======= ======= =======
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
In the consolidating data on this page, "GE" means the basis of consolidation as described in note 1 to the consolidated financial
statements; "GECS" means General Electric Capital Services, Inc. and all of its affiliates and associated companies. Transactions
between GE and GECS have been eliminated from the "General Electric Company and consolidated affiliates" columns on page 26.
</TABLE>
<PAGE>
F-4
Annual Report Page No. 28
<TABLE>
STATEMENT OF FINANCIAL POSITION
<CAPTION>
General Electric Company
and consolidated affiliates
-------------------------------
At December 31 (In millions) 1995 1994
- -------------------------------------------------------------- -------------------------------
<S> <C> <C>
ASSETS
Cash and equivalents $ 2,823 $ 2,591
Investment securities (note 10) 41,067 30,965
Current receivables (note 11) 8,735 7,527
Inventories (note 12) 4,395 3,880
GECS financing receivables (investment in time sales, loans and
financing leases) - net (notes 8 and 13) 93,272 76,357
Other GECS receivables 12,417 5,763
Property, plant and equipment (including equipment leased
to others) - net (note 14) 25,679 23,465
Investment in GECS - -
Intangible assets (note 15) 13,342 11,373
All other assets (note 16) 26,305 23,950
-------- --------
TOTAL ASSETS $228,035 $185,871
======== ========
- ------------------------------------------------------------------------------------------------------------
LIABILITIES AND EQUITY
Short-term borrowings (note 18) $64,463 $57,781
Accounts payable, principally trade accounts 9,061 6,766
Progress collections and price adjustments accrued 1,812 2,065
Dividends payable 767 699
All other GE current costs and expenses accrued (note 17) 5,898 5,543
Long-term borrowings (note 18) 51,027 36,979
Insurance liabilities, reserves and annuity benefits (note 19) 39,699 29,438
All other liabilities (note 20) 15,363 13,161
Deferred income taxes (note 22) 7,380 5,205
-------- --------
Total liabilities 195,470 157,637
-------- --------
Minority interest in equity of consolidated affiliates (note 23) 2,956 1,847
-------- --------
Common stock (1,857,013,000 shares issued) 594 594
Unrealized gains (losses) on investment securities 1,000 (810)
Other capital 1,663 1,122
Retained earnings 34,528 30,793
Less common stock held in treasury (8,176) (5,312)
-------- --------
Total share owners' equity (notes 24 and 25) 29,609 26,387
-------- --------
TOTAL LIABILITIES AND EQUITY $228,035 $185,871
======== ========
- ------------------------------------------------------------------------------------------------------------
<FN>
The notes to consolidated financial statements on pages 45-64 are an integral part of this statement. Year-
end 1994 assets and liabilities of Kidder, Peabody Group Inc., the discontinued securities broker-dealer of
GECS, have been reclassified to "All other liabilities."
</TABLE>
<PAGE>
F-5
Annual Report Page No. 29
<TABLE>
STATEMENT OF FINANCIAL POSITION
<CAPTION>
GE GECS
------------------- --------------------
At December 31 (In millions) 1995 1994 1995 1994
- -------------------------------------------------------------- ------------------- --------------------
<S> <C> <C> <C> <C>
ASSETS
Cash and equivalents $ 874 $ 1,373 $ 1,949 $ 1,218
Investment securities (note 10) 4 93 41,063 30,872
Current receivables (note 11) 8,891 7,807 - -
Inventories (note 12) 4,395 3,880 - -
GECS financing receivables (investment in time sales, loans and
financing leases) - net (notes 8 and 13) - - 93,272 76,357
Other GECS receivables - - 12,897 6,012
Property, plant and equipment (including equipment leased
to others) - net (note 14) 10,234 9,525 15,445 13,940
Investment in GECS 12,774 9,380 - -
Intangible assets (note 15) 6,643 6,336 6,699 5,037
All other assets (note 16) 11,901 12,419 14,404 11,531
------- ------- -------- --------
TOTAL ASSETS $55,716 $50,813 $185,729 $144,967
======= ======= ======== ========
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND EQUITY
Short-term borrowings (note 18) $1,666 $906 $62,808 $57,087
Accounts payable, principally trade accounts 3,968 3,141 5,952 3,777
Progress collections and price adjustments accrued 1,812 2,065 - -
Dividends payable 767 699 - -
All other GE current costs and expenses accrued (note 17) 5,747 5,798 - -
Long-term borrowings (note 18) 2,277 2,699 48,790 34,312
Insurance liabilities, reserves and annuity benefits (note 19) - - 39,699 29,438
All other liabilities (note 20) 8,928 8,468 6,312 4,571
Deferred income taxes (note 22) 508 268 6,872 4,937
------- ------- -------- --------
Total liabilities 25,673 24,044 170,433 134,122
------- ------- -------- --------
Minority interest in equity of consolidated affiliates (note 23) 434 382 2,522 1,465
------- ------- -------- --------
Common stock (1,857,013,000 shares issued) 594 594 1 1
Unrealized gains (losses) on investment securities 1,000 (810) 989 (821)
Other capital 1,663 1,122 2,266 2,006
Retained earnings 34,528 30,793 9,518 8,194
Less common stock held in treasury (8,176) (5,312) - -
------- ------- -------- --------
Total share owners' equity (notes 24 and 25) 29,609 26,387 12,774 9,380
------- ------- -------- --------
TOTAL LIABILITIES AND EQUITY $55,716 $50,813 $185,729 $144,967
======= ======= ======== ========
- ------------------------------------------------------------------------------------------------------------------------
<FN>
In the consolidating data on this page, "GE" means the basis of consolidation as described in note 1 to the consolidated
financial statements; "GECS" means General Electric Capital Services, Inc. and all of its affiliates and associated
companies. Transactions between GE and GECS have been eliminated from the "General Electric Company and consolidated
affiliates" columns on page 28.
</TABLE>
<PAGE>
F-6
Annual Report Page No. 30
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
General Electric Company
and consolidated affiliates
-----------------------------------
For the years ended December 31 (In millions) 1995 1994 1993
- -------------------------------------------------------------- -----------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 6,573 $ 4,726 $ 4,315
Adjustments for discontinued operations - 1,189 (993)
Adjustments to reconcile net earnings to cash provided
from operating activities
Cumulative effect of accounting change - - 862
Depreciation, depletion and amortization 3,594 3,207 3,223
Earnings retained by GECS - continuing operations - - -
Deferred income taxes 1,047 1,228 548
Decrease (increase) in GE current receivables (632) 668 (571)
Decrease (increase) in GE inventories 55 (56) 750
Increase (decrease) in accounts payable 244 697 639
Increase in insurance liabilities, reserves
and annuity benefits 2,490 1,624 1,479
Provision for losses on financing receivables 1,117 873 987
All other operating activities 458 (2,399) 782
-------- -------- --------
CASH FROM OPERATING ACTIVITIES 14,946 11,757 12,021
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (6,447) (7,492) (4,727)
Dispositions of property, plant and equipment 1,542 2,506 1,139
Net increase in GECS financing receivables (11,309) (9,525) (4,164)
Payments for principal businesses purchased (5,641) (2,606) (2,090)
All other investing activities (3,362) 372 (6,518)
-------- -------- --------
CASH USED FOR INVESTING ACTIVITIES (25,217) (16,745) (16,360)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in borrowings (maturities of 90 days or less) (3,487) (2,784) 2,406
Newly issued debt (maturities longer than 90 days) 37,604 23,239 15,468
Repayments and other reductions (maturities longer than 90 days) (18,580) (13,098) (11,851)
Net purchase of GE shares for treasury (2,523) (353) (364)
Dividends paid to share owners (2,770) (2,462) (2,153)
All other financing activities 259 181 (69)
-------- -------- --------
CASH FROM (USED FOR) FINANCING ACTIVITIES 10,503 4,723 3,437
-------- -------- --------
CASH FROM (USED FOR) DISCONTINUED OPERATIONS - (200) 962
-------- -------- --------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS DURING YEAR 232 (465) 60
Cash and equivalents at beginning of year 2,591 3,056 2,996
-------- -------- --------
Cash and equivalents at end of year $ 2,823 $ 2,591 $ 3,056
======== ======== ========
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
Cash paid during the year for interest $ (6,645) $ (4,524) $ (3,754)
Cash recovered (paid) during the year for income taxes (1,483) (1,777) (1,644)
- ---------------------------------------------------------------------------------------------------------
<FN>
The notes to consolidated financial statements on pages 45-64 are an integral part of this statement.
Data for 1994 and 1993 have been reclassified to combine cash flows of discontinued operations.
</TABLE>
<PAGE>
F-7
Annual Report Page No. 31
<TABLE>
STATEMENT OF CASH FLOWS
<CAPTION>
For the years ended December 31 (in millions) GE GECS
-------------------------------- --------------------------------
1995 1994 1993 1995 1994 1993
- -------------------------------------------------------- -------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 6,573 $ 4,726 $ 4,315 $ 2,415 $ 896 $ 1,807
Adjustments for discontinued operations - 1,189 (993) - 1,189 (240)
Adjustments to reconcile net earnings to cash provided
from operating activities
Cumulative effect of accounting change - - 862 - - -
Depreciation, depletion and amortization 1,581 1,545 1,631 2,013 1,662 1,592
Earnings retained by GECS - continuing operations (1,324) (1,181) (957) - - -
Deferred income taxes 369 575 120 678 653 428
Decrease (increase) in GE current receivables (739) 754 (625) - - -
Decrease (increase) in GE inventories 55 (56) 750 - - -
Increase (decrease) in accounts payable 462 810 114 418 (222) 540
Increase in insurance liabilities, reserves
and annuity benefits - - - 2,490 1,624 1,479
Provision for losses on financing receivables - - - 1,117 873 987
All other operating activities (912) (2,291) (16) 946 140 770
------- ------- ------- -------- -------- --------
CASH FROM OPERATING ACTIVITIES 6,065 6,071 5,201 10,077 6,815 7,363
------- ------- ------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (1,831) (1,743) (1,588) (4,616) (5,749) (3,139)
Dispositions of property, plant and equipment 38 86 55 1,504 2,420 1,084
Net increase in GECS financing receivables - - - (11,309) (9,525) (4,164)
Payments for principal businesses purchased (238) (575) - (5,403) (2,031) (2,090)
All other investing activities 408 14 298 (3,913) 176 (6,793)
------- ------- ------- -------- -------- --------
CASH USED FOR INVESTING ACTIVITIES (1,623) (2,218) (1,235) (23,737) (14,709) (15,102)
------- ------- ------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in borrowings (maturities of 90 days or less) 1,061 (566) 46 (4,510) (2,261) 2,404
Newly issued debt (maturities longer than 90 days) 826 766 215 36,778 22,473 15,253
Repayments and other reductions (maturities longer
than 90 days) (1,535) (1,399) (2,325) (17,045) (11,699) (9,526)
Net purchase of GE shares for treasury (2,523) (353) (364) - - -
Dividends paid to share owners (2,770) (2,462) (2,153) (1,091) (904) (610)
All other financing activities - (2) - 259 183 (69)
------- ------- ------- -------- -------- --------
CASH FROM (USED FOR) FINANCING ACTIVITIES (4,941) (4,016) (4,581) 14,391 7,792 7,452
------- ------- ------- -------- -------- --------
CASH FROM (USED FOR) DISCONTINUED OPERATIONS - - 962 - (200) -
------- ------- ------- -------- -------- --------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS DURING YEAR (499) (163) 347 731 (302) (287)
Cash and equivalents at beginning of year 1,373 1,536 1,189 1,218 1,520 1,807
------- ------- ------- -------- -------- --------
Cash and equivalents at end of year $ 874 $ 1,373 $ 1,536 $ 1,949 $ 1,218 $ 1,520
======= ======= ======= ======== ======== ========
- ------------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
Cash paid during the year for interest $ (468) $ (374) $ (473) $ (6,177) $ (4,150) $ (3,281)
Cash recovered (paid) during the year for income taxes (1,651) (1,456) (1,455) 168 (321) (189)
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
In the consolidating data on this page, "GE" means the basis of consolidation as described in note 1 to the consolidated financial
statements; "GECS" means General Electric Capital Services, Inc. and all of its affiliates and associated companies. Transactions
between GE and GECS have been eliminated from the "General Electric Company and consolidated affiliates" columns on page 30.
</TABLE>
<PAGE>
F-8
Annual Report Page No. 32
MANAGEMENT'S DISCUSSION OF OPERATIONS
OVERVIEW
General Electric Company's consolidated financial statements represent the
combination of the Company's manufacturing and nonfinancial services
businesses ("GE") and the accounts of General Electric Capital Services,
Inc. ("GECS"). See note 1 to the consolidated financial statements, which
explains how the various financial data are presented.
Management's Discussion of Operations is presented in four parts:
Consolidated Operations, GE Continuing Operations, GECS Continuing Operations
and International Operations.
CONSOLIDATED OPERATIONS
GE achieved record revenues and earnings in 1995, as broad strength across
its businesses, coupled with continued emphasis on globalization,
productivity and effective asset management, produced top-line growth,
higher margins and strong cash generation. Consolidated revenues, including
acquisitions, rose to a record $70.0 billion, a 17% increase that was
attributable primarily to the Company's increasing international activities.
Eleven of twelve businesses increased revenues, with six businesses - led by
GE Capital Services, Plastics and NBC - achieving double-digit increases.
Consolidated earnings per share from continuing operations increased to
$3.90, up 13% from last year's $3.46 from continuing operations, and earnings
increased 11% to $6.573 billion. Earnings per share grew faster than earnings,
reflecting the cumulative impact of $3.2 billion of shares purchased under a
three-year, $9 billion share repurchase program initiated in December 1994.
Net earnings in 1995 were 39% higher than 1994's $4.726 billion ($2.77
per share), which were 10% higher than 1993's $4.315 billion ($2.52 per
share). Three factors affecting 1994 and 1993 are important to these
comparisons: discontinued operations of the GECS securities broker-dealer and
the GE Aerospace businesses; 1993 restructuring provisions; and the effect of
an accounting change in 1993. Each is discussed separately below. Excluding
the effects of these items, 1994 earnings would have been $5.915 billion, up
22% from $4.862 billion in 1993.
* DISCONTINUED OPERATIONS reflected the results of the GECS securities
broker-dealer, Kidder, Peabody Group Inc. (Kidder, Peabody) in 1994 and 1993,
and the results of the discontinued GE Aerospace businesses in 1993. Note 2
provides additional information about these discontinued operations. The 1994
loss from discontinued operations included a provision of $868 million after
taxes for exit costs related to the liquidation of Kidder, Peabody. This
liquidation was substantially complete as of December 31, 1995.
* RESTRUCTURING PROVISIONS in 1993, amounting to $678 million after
taxes, covered costs of actions that have reduced GE's cost structure.
Essentially all restructuring expenditures were completed by the end of 1994.
Savings arising from these restructuring programs can best be observed in the
growth in operating margin seen in the chart at the bottom of the page and in
the productivity measurements discussed on page 33.
* THE 1993 ACCOUNTING CHANGE represented effects of adopting Statement
of Financial Accounting Standards (SFAS) No. 112, Employers' Accounting for
Postemployment Benefits (see note 20). The transition effect of the accounting
change decreased net earnings by $862 million ($0.51 per share), with a
corresponding decrease in share owners' equity.
TWO NEWLY ISSUED ACCOUNTING STANDARDS will be adopted in the first quarter
of 1996 and are not expected to have a material effect on financial position
or results of operations of GE or GECS. A summary of these standards
follows.
* 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 must be written down to fair
value.
* 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. Impairment, if any, would be recognized in earnings.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
GE OPERATING MARGIN AS
A PERCENTAGE OF SALES
1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
As reported 11.2% 11.1% 9.9% 13.6% 14.4%
Restructuring charges 0.3 0.4 2.6 - -
- -----------------------------------------------------------------------------
</TABLE>
<PAGE>
F-9
Annual Report Page No. 33
DIVIDENDS DECLARED totaled $2.838 billion in 1995. Per-share dividends of
$1.69 were up 13% from the previous year, following a 14% increase from the
year before. The 1995 increase marks the 20th consecutive year of dividend
growth. The chart at right compares GE's dividend growth for the last five
years with dividend growth of companies in the Standard and Poor's 500 stock
index.
GE CONTINUING OPERATIONS
GE total revenues were $46.2 billion in 1995, compared with $42.5 billion in
1994 and $40.1 billion in 1993.
* GE's sales of goods and services were $43.0 billion in 1995, an
increase of 9% from 1994, which in turn was 5% higher than in 1993. The
improvement was led by Plastics and NBC. Volume was about 8% higher in 1995,
reflecting growth in most businesses and the effect of consolidating Nuovo
Pignone, a European energy equipment manufacturer. The effects of selling
prices on sales differed markedly among businesses during the year. Overall,
selling prices were essentially flat in 1995, while the effect of currency
exchange rates on the translation of sales denominated in other than U.S.
dollars contributed modestly to the sales increase. Volume in 1994 was about
6% higher than in 1993, but was partially offset by the effects of lower
selling prices. Currency exchange rates had a minor negative effect on 1994
sales.
* GE's other income, earned from a wide variety of sources, was $753
million in 1995, $783 million in 1994 and $730 million in 1993. Details of
GE's other income are provided in note 3.
* Earnings of GECS from continuing operations were up 16% in 1995,
following a 33% increase the year before. See page 36 for an analysis of these
earnings.
PRINCIPAL COSTS AND EXPENSES FOR GE are those classified as costs of goods
and services sold, and selling, general and administrative expenses.
OPERATING MARGIN is sales of goods and services less the costs of goods and
services sold, and selling, general and administrative expenses. In 1995,
GE's operating margin rose to a record 14.4% of sales, an improvement of 0.8
percentage points from 1994. The operating margin increase was led by strong
improvements in Plastics, Aircraft Engines and NBC. Operating margin was
13.6% of sales in 1994, compared with 12.5% (before restructuring
provisions) in 1993. Including restructuring provisions, 1993 operating
margin was 9.9% of sales. The improved performance in 1994 was attributable
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
GE/S&P DIVIDEND GROWTH
SINCE 1990 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GE 7.22% 18.39% 32.91% 51.63% 68.00%
S&P 500 0.83 2.31 3.97 8.93 14.05
- -----------------------------------------------------------------------------
</TABLE>
to Appliances, NBC, Power Systems and Transportation Systems, which
increased their margin rates by one percentage point or more.
TOTAL COST PRODUCTIVITY (sales in relation to costs, both on a constant
dollar basis) has been a major source of improvements in operating margin,
accounting for more than $1 billion of the increases in margin in each of
the last three years. The productivity rate was 3.7% in 1995, reflecting the
sharp improvement at Aircraft Engines and improvements at Plastics and
Medical Systems, largely offset by adverse productivity performance by Power
Systems, the result of its lower 1995 capacity utilization. While the
productivity rate in 1994 was reasonably strong throughout most businesses,
at 3.2% overall, it reflected adverse results of Aircraft Engines' lower
volume. Cost savings provided by productivity improvements more than offset
the impact of inflation in each of the last three years.
GE INTEREST EXPENSE in 1995 was $649 million, up from $410 million in 1994,
which was down from $525 million in 1993. The increase in interest expense
was attributable to a number of factors, including higher interest rates and
average borrowing levels. The decrease in interest expense in 1994 was
primarily the result of lower borrowings partially offset by the effects of
higher interest rates.
ENTERING 1996 with excellent cash flows and a strong balance sheet, the
Company continues to be well positioned to deliver strong performance in the
current global economic environment.
<PAGE>
F-10
Annual Report Page No. 34
GE INDUSTRY SEGMENT REVENUES AND OPERATING PROFIT for the past five years
are shown in the table on page 35. For additional information, including a
description of the products and services included in each segment, see note
27.
* AIRCRAFT ENGINES revenues increased 7% from 1994, which was down 13%
from 1993. The revenue increase was primarily attributable to higher volume in
commercial and military spares and related services, partially offset by
effects of lower selling prices. Operating profit increased 26% from 1994, as
significant productivity gains and, to a lesser degree, higher volume more
than offset the effects of lower prices. Operating profit increased 17% during
1994, principally because there was no counterpart to 1993 restructuring
provisions ($267 million). Excluding 1993 restructuring provisions, operating
profit decreased 12% in 1994, largely as a result of lower volume.
In 1995, $1.7 billion of revenues were from sales to the U.S.
government, down $0.1 billion from 1994, which was $0.6 billion lower than in
1993. The lower 1994 revenues were primarily attributable to declines in sales
for the F110 and T700 engine programs.
Firm orders received during 1995 totaled $5.9 billion, up 7% from $5.5
billion in 1994. The firm orders backlog at year-end 1995 was $7.7 billion
($7.6 billion at the end of 1994), about 38% of which was scheduled for
delivery in 1996.
* APPLIANCES revenues were about the same as in 1994, as softening North
American sales offset strong growth in Europe and Asia. Operating profit
increased 2% despite higher material costs, primarily as a result of
productivity. Operating profit rose 84% in 1994 on a 7% increase in revenues,
in part because there was no counterpart to restructuring provisions of $136
million in 1993. Excluding 1993 restructuring provisions, operating profit
increased 34% in 1994, primarily as a result of strong productivity and higher
volume.
* BROADCASTING revenues increased 17% in 1995, following an 8% increase
in 1994. The revenue increase in both years was principally attributable to
sharply stronger prime-time ratings and improved cable and owned-and-operated
station performance, resulting in improved advertising prices throughout the
period. Operating profit was up 48% in 1995, as a result of the stronger
advertising revenues. Operating profit also increased sharply in 1994, in part
because of restructuring provisions of $81 million in 1993. Excluding the
effect of those provisions, operating profit improved 45% from 1993,
reflecting the impact of stronger advertising, improved ratings performance
and substantially improved cable operations.
* INDUSTRIAL PRODUCTS AND SYSTEMS revenues rose 8% in 1995, following a
10% increase in 1994. The improvements in revenues in both years were largely
attributable to increased volume in Transportation Systems, Lighting, and
Motors and Industrial Systems (Motors). Operating profit increased 14% in
1995, after a 47% increase in 1994. The improvement in 1995 resulted from the
combination of productivity across the segment and the volume increases, which
more than offset higher material costs. The 1994 increase in operating profit
reflected primarily the effect of $253 million of restructuring provisions in
1993. Absent restructuring provisions, operating profit increased 15% in 1994,
principally because of improved European operations in Lighting and the
combination of higher volume and productivity in Motors and Transportation
Systems.
Transportation Systems received orders of $1.6 billion in 1995, down
$1.2 billion from 1994's record level. The backlog at year-end 1995 was $3.4
billion ($3.5 billion at the end of 1994), about 29% of which was scheduled
for shipment in 1996.
* MATERIALS revenues increased 17% in 1995, reflecting principally the
effects of higher selling prices and the consolidation of Toshiba Silicones.
Operating profit increased 51%, primarily because of higher prices,
productivity and volume growth, the combination of which more than offset
increases in material costs. Revenues were up 13% in 1994, primarily because
of increased volume across all major product groups. Operating profit rose 16%
in 1994, in part because there was no counterpart to $52 million of
restructuring provisions in 1993. Excluding 1993 restructuring provisions,
operating profit increased 9%, as ongoing productivity and improved volume
more than offset the impact of lower selling prices and much higher material
costs.
* POWER GENERATION revenues were 10% higher in 1995, following a 7%
increase in 1994. The current-year revenue increase was more than accounted
for by the 1995 consolidation of Nuovo Pignone ($1.5 billion in revenues).
Excluding Nuovo Pignone, the revenue decrease in 1995 resulted from lower
volume in both gas and steam turbines. Operating profit decreased 38% in 1995,
as the profit contribution of Nuovo Pignone was more than offset by the
effects of difficult market conditions on volume and prices, cost inflation,
and modification costs related to series "F" gas turbines. Operating profit in
1994 increased 21%, reflecting the effect of 1993 restructuring provisions of
$82 million. Adjusting for 1993 restructuring provisions, operating profit
increased 12%, primarily as a result of lower material costs and volume
improvements that more than offset lower selling prices.
<PAGE>
F-11
Annual Report Page No. 35
<TABLE>
<CAPTION>
SUMMARY OF INDUSTRY SEGMENTS
<CAPTION>
General Electric Company and consolidated affiliates
-------------------------------------------------------
For the years ended December 31 (In millions) 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES
GE
Aircraft Engines $ 6,098 $ 5,714 $ 6,580 $ 7,368 $ 7,777
Appliances 5,933 5,965 5,555 5,330 5,225
Broadcasting 3,919 3,361 3,102 3,363 3,121
Industrial Products and Systems 10,194 9,406 8,575 8,210 8,248
Materials 6,647 5,681 5,042 4,853 4,736
Power Generation 6,545 5,933 5,530 5,106 4,813
Technical Products and Services 4,424 4,285 4,174 4,674 4,686
All Other 2,707 2,348 1,803 1,581 1,485
Corporate items and eliminations (286) (195) (242) (399) (538)
------- ------- ------- ------- -------
Total GE 46,181 42,498 40,119 40,086 39,553
------- ------- ------- ------- -------
GECS
Financing 19,042 14,932 12,399 10,544 10,069
Specialty Insurance 7,444 4,926 4,862 3,863 2,989
All Other 6 17 15 11 (5)
------- ------- ------- ------- -------
Total GECS 26,492 19,875 17,276 14,418 13,053
------- ------- ------- ------- -------
Eliminations (2,645) (2,264) (1,694) (1,453) (1,323)
------- ------- ------- ------- -------
CONSOLIDATED REVENUES $70,028 $60,109 $55,701 $53,051 $51,283
======= ======= ======= ======= =======
- ------------------------------------------------------------------------------------------------------------------------
OPERATING PROFIT
GE
Aircraft Engines $ 1,176 $ 935 $ 798 $ 1,274 $ 1,390
Appliances 697 683 372 386 400
Broadcasting 738 500 264 204 209
Industrial Products and Systems 1,519 1,328 901 1,071 1,088
Materials 1,465 967 834 740 800
Power Generation 769 1,238 1,024 854 679
Technical Products and Services 801 787 706 912 693
All Other 2,683 2,309 1,725 1,495 1,405
------- ------- ------- ------- -------
Total GE 9,848 8,747 6,624 6,936 6,664
------- ------- ------- ------- -------
GECS
Financing 3,045 2,662 1,727 1,366 1,327
Specialty Insurance 1,020 589 770 641 501
All Other (545) (302) (288) (272) (290)
------- ------- ------- ------- -------
Total GECS 3,520 2,949 2,209 1,735 1,538
------- ------- ------- ------- -------
Eliminations (2,396) (2,072) (1,554) (1,317) (1,199)
------- ------- ------- ------- -------
CONSOLIDATED OPERATING PROFIT 10,972 9,624 7,279 7,354 7,003
GE interest and financial charges, net of eliminations (644) (417) (529) (752) (881)
GE items not traceable to segments (591) (546) (614) (629) (515)
------- ------- ------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
AND ACCOUNTING CHANGES $ 9,737 $ 8,661 $ 6,136 $ 5,973 $ 5,607
======= ======= ======= ======= =======
- ------------------------------------------------------------------------------------------------------------------------
<FN>
The notes to consolidated financial statements on pages 45-64 are an integral part of this statement. "GE" means the
basis of consolidation as described in note 1 to the consolidated financial statements; "GECS" means General Electric
Capital Services, Inc. and all of its affiliates and associated companies. Operating profit of GE segments excludes
interest and other financial charges; operating profit of GECS includes interest and discount expense, which is the
largest element of GECS' operating costs.
</TABLE>
<PAGE>
F-12
Annual Report Page No. 36
Power Generation orders were $6.7 billion for 1995, compared with $5.7
billion in 1994. The backlog of unfilled orders at year-end 1995 was $10.2
billion ($9.4 billion at the end of 1994), about 43% of which was scheduled to
be shipped in 1996. The increases in orders and backlog were more than
accounted for by the consolidation of Nuovo Pignone in 1995.
* TECHNICAL PRODUCTS AND SERVICES revenues were up 3% in 1995, following
a similar increase in 1994, as higher volume was partially offset by lower
selling prices in both Medical Systems and Information Services. Medical
Systems achieved strong volume growth in Asia and Europe, but the U.S. market
was weak throughout both years. Information Services revenues increased in
1995 and 1994, reflecting continued worldwide growth in services associated
with electronic commerce. Segment operating profit increased 2% in 1995,
primarily a result of productivity gains. The 1994 increase in operating
profit of 11% was partially attributable to 1993 restructuring provisions of
$60 million. Excluding such provisions, 1994 operating profit was 3% ahead of
1993, reflecting productivity and volume improvements that were partially
offset by weaker pricing at both Medical Systems and Information Services.
Orders received by Medical Systems in 1995 were $3.7 billion, up 12%
from 1994. The backlog of unfilled orders at year-end 1995 was $1.6 billion
($1.5 billion at the end of 1994), about 94% of which was scheduled to be
shipped in 1996.
* ALL OTHER consists primarily of GECS' earnings, which are discussed in
the next section. Also included are revenues derived from licensing the use of
GE technology to others.
GECS CONTINUING OPERATIONS
GECS conducts its operations in two segments: Financing and Specialty
Insurance. The Financing segment includes financing operations of General
Electric Capital Corporation (GE Capital). The Specialty Insurance segment
includes operations of GE Global Insurance Holding Corporation (GE Global
Insurance), the principal subsidiary of which is Employers Reinsurance
Corporation (ERC), and the other insurance businesses described on page 61.
IMPROVED OPERATING RESULTS for 1995 and 1994 reflect the effects of asset
growth with approximately equal contributions from origination volume and
from acquisitions of businesses and portfolios.
* GECS revenues from operations were $26.5 billion in 1995, up 33% from
1994, which was up 15% from 1993.
* GECS earnings from continuing operations were $2.4 billion in 1995, up
16% from 1994, which was up 33% from 1993. The 1995 increase reflected asset
growth partially offset by a decrease in financing spreads (the excess of
yields over interest rates on borrowings). The 1994 increase resulted
primarily from asset growth, increased financing spreads and improved asset
quality, which were partially offset by higher insurance losses.
* GECS interest on borrowings in 1995 was $6.7 billion, 47% higher than
in 1994, which was 28% higher than in 1993. Increases in 1995 and 1994
reflected the effects of higher average borrowings used to finance asset
growth as well as the effects of higher interest rates. Part of the 1995
increase resulted from a shift during the year to longer-term funding. The
composite interest rate on GECS' borrowings was 6.76% in 1995, compared with
5.47% in 1994 and 4.96% in 1993.
* GECS insurance losses and policyholder and annuity benefits increased
to $5.3 billion during 1995, compared with $3.5 billion in 1994 and $3.2
billion in 1993, primarily because of business acquisitions and growth in
originations throughout the period.
* GECS other costs and expenses increased to $9.8 billion in 1995 from
$7.9 billion in 1994 and $7.2 billion in 1993, reflecting costs associated
with acquired businesses and portfolios, and higher investment levels.
GECS industry segment revenues and operating profit for the past five
years are shown in the table on page 35. Revenues from operations (earned
income) are detailed in note 4.
* FINANCING SEGMENT revenues from operations were $19.0 billion in 1995,
up 28% from 1994, which was up 20% from 1993. Asset growth and increased
yields were significant factors in both years.
Operating profit was $3.0 billion in 1995, up 14% from 1994, as the
effects of the asset growth were partially offset by declining financing
spreads and losses from adverse market conditions in the Mortgage Services
business. Financing spreads declined during 1995, as the increase in borrowing
rates outpaced the improvements in yields. Operating profit increased 54% in
1994 over 1993, the result of asset growth of 14%, increased financing spreads
and improved asset quality. The provision for losses on financing receivables
increased in 1995, principally reflecting portfolio growth, following a
decline in 1994 that was attributable to improved quality of the portfolio.
Other costs and expenses increased in both years, primarily as a result of
asset growth.
The portfolio of financing receivables, before allowance for losses,
increased to $95.8 billion at the end of 1995 from $78.4 billion at the end of
1994. Financing receivables are the Financing segment's largest asset and its
primary source of revenues. The related allowance for losses at the end of
<PAGE>
F-13
Annual Report Page No. 37
1995 amounted to $2.5 billion (2.63% of receivables - the same as for 1994
and 1993) and, in management's judgment, is appropriate given the risk
profile of the portfolio. Amounts written off in 1995 were approximately
1.01% of the year's average financing receivables, compared with 1.04% and
1.59% during 1994 and 1993, respectively. A discussion of the quality of
certain elements of the Financing segment portfolio follows. Nonearning
receivables are those that are 90 days or more delinquent and reduced-
earning receivables are receivables whose terms have been restructured to a
below-market yield.
Consumer receivables at year-end 1995 and 1994 are shown in the
following table:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
Credit card and personal loans $23,937 $19,124
Auto loans 5,555 3,991
Auto finance leases 12,461 7,473
------- -------
Total consumer $41,953 $30,588
======= =======
Nonearning and reduced-earning $671 $422
- As percentage of total 1.6% 1.4%
Receivable write-offs for the year $644 $482
- -------------------------------------------------------------------------
</TABLE>
Most of the nonearning consumer receivables were U.S. private-label
credit card loans, the majority of which were subject to various loss-sharing
agreements that provide full or partial recourse to the originating retailer.
Delinquencies in the consumer portfolio were slightly higher at the end of
1995 than for 1994, consistent with overall industry experience.
Commercial real estate portfolio at year-end 1995 and 1994 amounted to
$17.4 billion and $16.9 billion, respectively, as shown in the following
table:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
Commercial real estate loans $13,405 $13,282
Nonearning and reduced-earning loans 179 179
Receivable write-offs for the year 147 209
Assets acquired for resale 2,335 2,103
Other (primarily ventures) 1,651 1,508
- -------------------------------------------------------------------------
</TABLE>
Commercial real estate loans are generally secured by first mortgages.
Assets are acquired for resale from various financial institutions. Values
realized during 1995 and 1994 on disposition of assets acquired for resale
have met or exceeded expectations at the time of purchase.
The commercial real estate portfolio includes investments in a variety
of property types and continues to be well dispersed geographically,
principally in the continental United States. Write-offs in the commercial
real estate portfolio declined during 1995, as markets continued to stabilize.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
GECS EARNINGS FROM
CONTINUING OPERATIONS
(In billions) 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$1.221 $1.331 $1.567 $2.085 $2.415
- -----------------------------------------------------------------------------
</TABLE>
Other financing receivables, totaling $40.4 billion at December 31,
1995, consisted of a diverse commercial, industrial and equipment loan and
lease portfolio. This portfolio increased $5.9 billion during 1995, primarily
because of acquisitions. The related nonearning and reduced-earning
receivables increased to $285 million at year-end 1995 from $165 million at
year-end 1994.
GECS held loans and leases to commercial airlines, as discussed in note
16, amounting to $8.3 billion at the end of 1995, up from $7.6 billion at the
end of 1994, reflecting purchases of aircraft. At year-end 1995, GECS'
commercial aircraft positions included financial guaranties and funding
commitments amounting to $409 million ($506 million at year-end 1994) and
conditional commitments to purchase aircraft at a cost of $141 million ($81
million at year-end 1994). On January 22, 1996, GECS announced that it had
placed a multi-year order for various Boeing aircraft with list prices
approximating $4 billion.
* SPECIALTY INSURANCE SEGMENT revenues from operations were $7.4 billion
in 1995, an increase of 51% from 1994, which was essentially the same as 1993.
The increase in 1995 reflected growth, primarily associated with business
acquisitions, in the property and casualty reinsurance business. Operating
profit increased to $1,020 million in 1995 from $589 million in 1994,
principally because there was no current-year counterpart to the 1994 adverse
loss development in the private mortgage pool insurance, the result of poor
economic conditions and housing value declines in southern California.
Operating profit in 1995 also was enhanced by improved returns on investment
securities and effects of acquisitions. For 1994, private mortgage pool
insurance losses more than offset operating profit increases in other parts of
the segment, including primary mortgage insurance.
<PAGE>
F-14
Annual Report Page No. 38
INTERNATIONAL OPERATIONS
Estimated results of international operations include all exports from the
United States plus the results of GE's and GECS' operations located outside
the United States. International revenues in 1995 were $26.9 billion (38% of
consolidated revenues), compared with $20.0 billion in 1994 and $18.2
billion in 1993. In 1995, about 46% of GE's sales of goods and services were
international, compared with about 40% in the previous two years. The chart
below left depicts the growth in international revenues in relation to total
revenues over the past five years. International operating profit was $3.0
billion (27% of consolidated operating profit) in 1995, compared with $2.6
billion in 1994 and $2.3 billion in 1993.
GE's international revenues were $20.2 billion in 1995, an increase of
24% from 1994, reflecting strong growth in Europe and the Pacific Basin.
European revenues increased by $2.5 billion, largely because of the 1995
consolidation of Nuovo Pignone's $1.5 billion of sales. Additionally, many GE
businesses, especially Aircraft Engines and Plastics, achieved strong revenue
performance in Europe during the year. GE's Pacific Basin revenues were up
$0.9 billion in 1995, the result of consolidating Toshiba Silicones in the
Plastics business, as well as growth across many other businesses,
particularly Medical Systems and Lighting.
GECS' international revenues were $6.7 billion in 1995 and year-end
assets were about $43.3 billion. These revenues, which were derived primarily
from operations in Europe, Canada and the Pacific Basin, were up sharply from
$3.7 billion in 1994; year-end assets more than doubled during the year from
approximately $21.5 billion at the end of 1994. The increase is attributable
to expansion of GECS' operations into the international marketplace -
expansion that management expects to continue.
The accompanying financial results reported in U.S. dollars are
unavoidably affected by currency exchange. A number of techniques are used to
manage the effects of currency exchange, including selective borrowings in
local currencies and selective hedging of significant cross-currency
transactions. International activity is diverse, as shown for revenues in the
chart at the bottom right of this page. Principal currencies include those of
countries in the European Monetary Union, as well as the Japanese yen and the
Canadian dollar.
GE's export sales by major world areas follow.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
GE'S TOTAL EXPORTS FROM THE UNITED STATES
(In millions) 1995 1994 1993
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Pacific Basin $3,397 $3,260 $2,645
Europe 1,701 1,319 2,320
Americas 1,023 1,027 981
Other 964 821 1,039
------ ------ ------
Exports to external customers 7,085 6,427 6,985
Exports to affiliates 2,123 1,683 1,513
------ ------ ------
Total exports $9,208 $8,110 $8,498
====== ====== ======
- ---------------------------------------------------------------------------
</TABLE><
GE made a positive 1995 contribution of approximately $5.2 billion to
the U.S. balance of trade. Total exports in 1995 were $9.2 billion; direct
imports from external suppliers were $2.8 billion; and imports from GE
affiliates were $1.2 billion.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
CONSOLIDATED REVENUES
(In billions) 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States $34.631 $35.228 $37.471 $40.064 $43.164
International 16.652 17.823 18.230 20.045 26.864
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
CONSOLIDATED INTERNATIONAL
REVENUES
(In billions) 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Europe $7.972 $8.721 $9.042 $9.116 $14.117
Pacific Basin 4.030 4.349 4.531 5.997 7.136
Americas 3.194 3.315 3.215 3.763 4.105
Other 1.456 1.438 1.442 1.169 1.506
- -----------------------------------------------------------------------------
</TABLE>
<PAGE>
F-15
Annual Report Page No. 39
MANAGEMENT'S DISCUSSION OF FINANCIAL RESOURCES AND LIQUIDITY
OVERVIEW
This discussion of financial resources and liquidity focuses on the
Statement of Financial Position (page 28) and the Statement of Cash Flows
(page 30).
Throughout the discussion, it is important to understand the differences
between the businesses of GE and GECS. Although GE's manufacturing and
nonfinancial services activities involve a variety of different businesses,
their underlying characteristics are development, preparation for market and
delivery of tangible goods and services. Risks and rewards are directly
related to the ability to manage and finance those activities.
GECS' principal businesses provide financing, asset management,
insurance and other financial services to third parties. The underlying
characteristics of these businesses involve the management of financial risk.
GECS' risks and rewards stem from the abilities of its businesses to continue
to design and provide a wide range of financial services in a competitive
marketplace and to receive adequate compensation for such services. GECS is
not a "captive finance company" nor a vehicle for "off-balance-sheet
financing" for GE; very little of GECS' business is directly related to other
GE operations.
Despite the different business profiles of GE and GECS, the global
commercial airline industry is one significant example of an important source
of business for both. GE assumes financing positions primarily in support of
engine sales, whereas GECS is a significant source of lease and loan financing
for the industry (see details in note 16). Management believes that,
particularly as the industry regains financial strength, these financing
positions are reasonably protected by collateral values and by its ability to
control assets, either by ownership or security interests.
The fundamental differences between GE and GECS are reflected in the
measurements commonly used by investors, rating agencies and financial
analysts. These differences will become clearer in the discussion that follows
with respect to the more significant items in the financial statements.
STATEMENT OF FINANCIAL POSITION
* INVESTMENT SECURITIES for each of the past two years comprised mainly
investment-grade debt securities held by GECS' specialty insurance and annuity
businesses in support of obligations to policyholders and annuitants. The
increase of $10.2 billion at GECS during 1995 was principally related to
acquisitions, increases in fair value resulting from lower year-end interest
rates and investment of premiums.
* GE'S CURRENT RECEIVABLES were $8.9 billion and $7.8 billion at the end
of 1995 and 1994, respectively, and included $6.6 billion and $5.7 billion due
from customers at the end of 1995 and 1994, respectively. As a measure of
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
GE ANNUAL INVENTORY
TURNOVER 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4.71 5.26 5.97 6.86 6.90
- -----------------------------------------------------------------------------
</TABLE>
asset utilization, customer receivables turnover was 6.7 in 1995, compared
with 6.9 in 1994, a decline solely attributable to consolidation of Nuovo
Pignone. Current receivables other than amounts owed by customers are
primarily amounts that did not originate from sales of GE goods or services,
such as advances to suppliers in connection with large contracts.
* INVENTORIES were $4.4 billion at December 31, 1995, up $0.5 billion
from the end of 1994. As a measure of inventory utilization, turnover was 6.9
in 1995, about the same as in 1994. Absent the consolidation of Nuovo Pignone,
inventory turnover would have been 7.2 in 1995, continuing the improvements
achieved over the past five years. Last-in, first-out (LIFO) revaluations
decreased $87 million in 1995, compared with decreases of $197 million in 1994
and $179 million in 1993. Included in these changes were decreases of $88
million, $72 million and $101 million (1995, 1994 and 1993, respectively) that
resulted from lower LIFO inventory levels. There was no cost change in 1995
and net cost decreases in 1994 and 1993.
* GECS FINANCING RECEIVABLES were $93.3 billion at year-end 1995, net of
allowance for doubtful accounts, up $16.9 billion over 1994. These receivables
are discussed on page 36 and in notes 8 and 13.
* GECS OTHER RECEIVABLES were $12.9 billion and $6.0 billion at December
31, 1995 and 1994, respectively. The 1995 increase was almost entirely
attributable to premiums receivable and reinsurance recoverables, reflecting
acquired businesses and a general increase in underwriting activity.
* PROPERTY, PLANT AND EQUIPMENT (including equipment leased to others)
was $25.7 billion at December 31, 1995, up $2.2 billion from 1994. GE's
property, plant and equipment consists of investments for its own productive
use, whereas the largest element of GECS' investment is in equipment provided
to third parties on operating leases. Details by category of investment can be
found in note 14.
<PAGE>
F-16
Annual Report Page No. 40
GE's total expenditures for new plant and equipment during 1995 totaled
$1.8 billion, up slightly from $1.7 billion in 1994. Total expenditures for
the past five years were $8.8 billion, of which 36% was investment in
productivity, through new equipment and process improvements; 35% was
investment for growth, through new capacity and product development; and 29%
was investment for such other purposes as improvement of research and
development facilities and safety and environmental protection.
GECS' additions to its equipment leased to others were $4.5 billion
during 1995 ($5.6 billion during 1994).
* INTANGIBLE ASSETS were $13.3 billion at year-end 1995, up from $11.4
billion at year-end 1994. GE's intangibles increased to $6.6 billion from $6.3
billion at the end of 1994. The $1.7 billion increase in GECS' intangibles was
primarily goodwill attributable to various acquisitions, none of which was
individually material.
* ALL OTHER ASSETS totaled $26.3 billion at year-end 1995, an increase
of $2.4 billion from the end of 1994. GE's other assets decreased $0.5
billion, reflecting the 1995 consolidation of Nuovo Pignone, which was
classified in other assets in 1994, and an increase in the prepaid pension
asset. GECS' increase of $2.9 billion related principally to acquisitions.
* INSURANCE LIABILITIES, RESERVES AND ANNUITY BENEFITS were $39.7
billion, $10.3 billion higher than in 1994. The increase was primarily
attributable to acquisitions.
* CONSOLIDATED BORROWINGS aggregated $115.5 billion at December 31,
1995, compared with $94.8 billion at the end of 1994. The major debt-rating
agencies evaluate the financial condition of GE and of GE Capital (GECS' major
public borrowing entity) differently because of their distinct business
characteristics. Using criteria appropriate to each and considering their
combined strength, those major rating agencies continue to give the highest
ratings to debt of both GE and GE Capital.
GE has committed to contribute capital to GE Capital in the event of
either a significant, specified decrease in the ratio of GE Capital's earnings
to fixed charges or a failure to maintain a specified debt-to-equity ratio in
the event certain GE Capital preferred stock is redeemed. GE also has
guarantied subordinated debt of GECS with a face amount of $1,000 million and
$700 million at December 31, 1995 and 1994, respectively. Management believes
the likelihood that GE will be required to contribute capital under either the
commitments or the guaranties is remote.
GE's total borrowings were $3.9 billion at year-end 1995 ($1.6 billion
short-term, $2.3 billion long-term), an increase of about $0.3 billion from
year-end 1994. GE's total debt at the end of 1995 equaled 11.6% of total
capital, down from 11.9% at the end of 1994.
GECS' total borrowings were $111.6 billion at December 31, 1995, of
which $62.8 billion is due in 1996 and $48.8 billion is due in subsequent
years. Comparable amounts at the end of 1994 were $91.4 billion total, $57.1
billion due within one year and $34.3 billion due thereafter. GECS' composite
interest rates are discussed on page 36. A large portion of GECS' borrowings
($41.2 billion and $43.7 billion at the end of 1995 and 1994, respectively)
was issued in active commercial paper markets that management believes will
continue to be a reliable source of short-term financing. Most of this
commercial paper is issued by GE Capital. The average remaining terms and
interest rates of GE Capital's commercial paper were 41 days and 5.88%,
respectively, at the end of 1995, compared with 45 days and 5.90% at the end
of 1994. GE Capital's leverage (ratio of debt to equity, excluding from equity
all net unrealized gains and losses on investment securities) was 7.89 to 1 at
the end of 1995, compared with 7.94 to 1 at the end of 1994. By comparison,
including in equity all net unrealized gains and losses on investment
securities, GE Capital's ratio of debt to equity was 7.59 to 1 at the end of
1995, compared with 8.43 to 1 at the end of 1994.
INTEREST RATE AND CURRENCY RISK MANAGEMENT
Both GE and GECS are exposed to various types of risk, although the nature
of their activities means that the respective risks are different. The
multinational nature of GE's operations and the relatively low level of GE's
borrowings means that currency management is more important than managing
exposure to changes in interest rates.
On the other hand, changes in interest rates are the more significant
exposure for GECS because of the potential effects of such changes on
financing spreads.
The correlation between interest rate changes and financing spreads is
subject to many factors and cannot be forecast with reliability. Although not
necessarily relevant to future effects, management estimates that, all
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
GE BORROWINGS AS A PERCENTAGE
OF TOTAL CAPITAL INVESTED
1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
26.18% 22.39% 15.51% 11.87% 11.60%
- -----------------------------------------------------------------------------
</TABLE>
<PAGE>
F-17
Annual Report Page No. 41
else constant, an increase of 100 basis points in interest rates for all of
1995 would have reduced GECS net earnings by approximately $65 million.
GE and GECS use various financial instruments, particularly interest
rate, currency and basis swaps, but also options and currency forwards, to
manage their respective risks. GE and GECS are exclusively end users of these
instruments, which are commonly referred to as derivatives; neither GE nor
GECS engages in trading, market-making or other speculative activities in the
derivatives markets. Established practices require that derivative financial
instruments relate to specific asset, liability or equity transactions or to
currency exposures. The total exposure of GE and GECS to credit risk
associated with in-the-money derivatives at December 31, 1995, was $50 million
and $680 million, respectively. Management does not anticipate any loss from
this exposure.
More detailed information regarding these financial instruments, as well
as the strategies and policies for their use, is contained in notes 1, 18 and
29.
STATEMENT OF CASH FLOWS
Because cash management activities of GE and GECS are separate and distinct,
it is more useful to review their cash flows statements separately.
GE
GE's cash and equivalents aggregated $0.9 billion at the end of 1995, about
$0.5 billion lower than at the end of 1994. During 1995, GE generated $6.1
billion in cash from operating activities, about the same as in 1994. The
1995 cash generation provided most of the resources to repurchase $3.1
billion of GE common stock under share repurchase programs, to pay $2.8
billion in dividends to share owners, and to invest $1.8 billion in new
plant and equipment.
Operating activities are the principal source of GE's cash flows from
continuing operations. Over the past three years, operating activities have
provided more than $17.3 billion of cash. Principal applications were payment
of dividends to share owners ($7.4 billion), investment in new plant and
equipment ($5.2 billion) and reduction of debt ($2.9 billion). In addition,
the Company repurchased and placed into treasury $3.4 billion of its common
stock during the past three years under share repurchase programs.
In December 1994, GE's Board of Directors authorized the repurchase of
up to $5 billion of the Company's common stock over the following two years.
In December 1995, the Board increased the authorized amount of the repurchase
to $9 billion and extended the program through 1997. This program is a direct
result of GE's solid financial condition and cash-generating capability, and
it was authorized after evaluating various alternatives to enhance long-term
share owner value.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
GE CUMULATIVE CASH FLOWS
(In billions) 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities $3.626 $8.199 $13.400 $19.471 $25.536
Dividends paid 1.780 3.705 5.858 8.320 11.090
Shares repurchased 1.043 2.175 2.882 3.955 7.057
- -----------------------------------------------------------------------------
</TABLE>
Based on past performance and current expectations, in combination with
the financial flexibility that comes with a strong balance sheet and the
highest credit ratings, management believes that GE is in a sound position to
complete the share repurchase program, to grow dividends in line with
earnings, and to continue making long-term investments for future growth,
including selective acquisitions and investments in joint ventures.
Expenditures for new plant and equipment in 1996 are expected to be about 20%
higher than in 1995, principally for productivity and growth.
GECS
GECS' primary source of cash is financing activities involving the continued
rollover of short-term borrowings and appropriate addition of borrowings
with a reasonable balance of maturities. Over the past three years, GECS'
borrowings with maturities of 90 days or less have decreased by $4.4
billion. New borrowings of $74.5 billion having maturities longer than 90
days were added during those years, while $38.3 billion of such longer-term
borrowings were retired. GECS also generated $24.3 billion from continuing
operating activities.
GECS' principal use of cash has been investing in assets to grow its
businesses. Of the $53.5 billion that GECS invested over the past three years,
$25.0 billion was used for additions to financing receivables, $13.5 billion
was used to invest in new equipment, principally for lease to others, and $9.5
billion was used for acquisitions of new businesses.
With the financial flexibility that comes with excellent credit ratings,
management believes that GECS should be well positioned to meet the global
needs of its customers for capital and to continue providing GE share owners
with good returns.
<PAGE>
F-18
Annual Report Page No. 42
MANAGEMENT'S DISCUSSION OF SELECTED FINANCIAL DATA
SELECTED FINANCIAL DATA summarizes on the opposite page some data frequently
requested about General Electric Company. The data are divided into three
sections: upper portion - consolidated data; middle portion - GE data that
reflect various conventional measurements for industrial enterprises; and
lower portion - GECS data that reflect key information pertinent to
financial services.
GE'S TOTAL RESEARCH AND DEVELOPMENT expenditures were $1,892 million in
1995, up $151 million (or 9%) from 1994. In 1995, expenditures of $1,299
million were from GE's own funds, up 10% from 1994. Expenditures reflected
continuing research and development work related to new product programs,
including the next generation of gas turbines, a more powerful version of
the recently introduced AC locomotive and, in Aircraft Engines, introduction
of the new GE90 and development of more fuel-efficient versions of the best-
selling CFM56. Expenditures from funds provided by customers (mainly the
U.S. government) were $593 million in 1995, up $28 million from 1994,
primarily reflecting additional research efforts in advanced propulsion
technologies at Aircraft Engines.
GE'S TOTAL BACKLOG of firm unfilled orders at the end of 1995 was $25.5
billion, up $1.2 billion from the 1994 level. The increase was more than
accounted for by the 1995 consolidation of Nuovo Pignone. Orders
constituting this backlog may be canceled or deferred by customers, subject
in certain cases to cancellation penalties. See Industry Segments beginning
on page 34 for further discussion on unfilled orders of relatively long-
cycle manufacturing businesses. About 46% of total unfilled orders at the
end of 1995 was scheduled to be shipped in 1996, with most of the remainder
to be shipped in the two years after that. For comparison, about 50% of the
1994 backlog was expected to be shipped in 1995.
REGARDING ENVIRONMENTAL MATTERS, the Company's operations, like operations
of other companies engaged in similar businesses, involve the use, disposal
and cleanup of substances regulated under environmental protection laws.
In 1995, GE had capital expenditures of about $75 million for projects
related to the environment. The comparable amount in 1994 was $63 million.
These amounts exclude expenditures for remediation actions, which are
principally expensed and are discussed below. Capital expenditures for
environmental purposes have included pollution control devices - such as
wastewater treatment plants, groundwater monitoring devices, air strippers or
separators, and incinerators - at new and existing facilities constructed or
upgraded in the normal course of business. Consistent with policies stressing
environmental responsibility, average annual capital expenditures other than
for remediation projects are presently expected to be about $85 million over
the next two years. This level is in line with existing levels for new or
expanded programs to build facilities or modify manufacturing processes to
minimize waste and reduce emissions.
GE also is involved in a sizable number of remediation actions to clean
up hazardous wastes as required by federal and state laws. Such statutes
require that responsible parties fund remediation actions regardless of fault,
legality of original disposal or ownership of a disposal site. Expenditures
for site remediation actions amounted to approximately $76 million in 1995,
compared with $98 million in 1994. It is presently expected that remediation
actions will require average annual expenditures in the range of $80 million
to $110 million over the next two years. Liabilities for remediation costs are
based on management's best estimate of future costs; when there appears to be
a range of possible costs with equal likelihood, liabilities are based on the
lower end of such range. Possible insurance recoveries are not considered in
estimating liabilities.
It is difficult to estimate with any meaning the annual level of future
remediation expenditures because of the many uncertainties, including
uncertainties about the status of laws, regulations, technology and
information related to individual sites. Subject to the foregoing, management
believes that capital expenditures and remediation actions to comply with the
present laws governing environmental protection will not have a material
effect on consolidated earnings, liquidity or competitive position. In making
this determination, management considered the fact that, if remediation
expenditures were to continue at the 1995 level, liabilities recorded at the
end of 1995 would be sufficient to cover expenditures through the end of 2001,
and that the probability of incurring more than nominal expenditures beyond
2015 is remote. Of course, lower annual expenditures could be incurred over a
longer period without increasing the total expenditures.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
GE SHARE PRICE ACTIVITY
1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
High $39.00 $43.75 $53.50 $54.875 $73.125
Low 26.50 36.375 40.375 45.00 49.875
Close 38.25 42.75 52.44 51.00 72.00
- -----------------------------------------------------------------------------
</TABLE>
<PAGE>
F-19
Annual Report Page No. 43
<TABLE>
SELECTED FINANCIAL DATA
<CAPTION>
-----------------------------------------------------------------
(Dollar amounts in millions;
per-share amounts in dollars) 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES
Revenues $ 70,028 $60,109 $55,701 $53,051 $51,283
Earnings from continuing operations 6,573 5,915 4,184 4,137 3,943
Earnings (loss) from discontinued operations - (1,189) 993 588 492
Earnings before accounting changes 6,573 4,726 5,177 4,725 4,435
Net earnings 6,573 4,726 4,315 4,725 2,636
Dividends declared 2,838 2,546 2,229 1,985 1,808
Earned on average share owners' equity 23.5% 18.1% 17.5% 20.9% 12.2%
Per share
Earnings from continuing operations $ 3.90 $ 3.46 $ 2.45 $ 2.41 $ 2.27
Earnings (loss) from discontinued operations - (0.69) 0.58 0.34 0.28
Earnings before accounting changes 3.90 2.77 3.03 2.75 2.55
Net earnings 3.90 2.77 2.52 2.75 1.51
Dividends declared 1.69 1.49 1.305 1.16 1.04
Stock price range 73 1/8-49 7/8 54 7/8-45 53 1/2-40 3/8 43 3/4-36 3/8 39-26 1/2
Total assets of continuing operations 228,035 185,871 166,413 135,472 123,115
Long-term borrowings 51,027 36,979 28,194 25,298 22,602
Shares outstanding - average (in thousands) 1,683,812 1,708,738 1,707,979 1,714,396 1,737,863
Share owner accounts - average 460,000 458,000 464,000 481,000 495,000
Employees at year end
United States 150,000 156,000 157,000 168,000 173,000
Other countries 72,000 60,000 59,000 58,000 62,000
Discontinued operations (primarily U.S.) - 5,000 6,000 42,000 49,000
-------- ------- ------- ------- -------
Total employees 222,000 221,000 222,000 268,000 284,000
======== ======= ======= ======= =======
- -----------------------------------------------------------------------------------------------------------------------
GE DATA
Short-term borrowings $ 1,666 $ 906 $ 2,391 $ 3,448 $ 3,482
Long-term borrowings 2,277 2,699 2,413 3,420 4,332
Minority interest 434 382 355 350 353
Share owners' equity 29,609 26,387 25,824 23,459 21,683
-------- ------- ------- ------- -------
Total capital invested $ 33,986 $30,374 $30,983 $30,677 $29,850
======== ======= ======= ======= =======
Return on average total capital invested 21.3% 15.9% 15.2% 16.9% 11.1%
Borrowings as a percentage of total capital invested 11.6% 11.9% 15.5% 22.4% 26.2%
Working capital $ 204 $ 544 $ (419) $ (822) $ (231)
Property, plant and equipment additions 1,831 1,743 1,588 1,445 2,164
Year-end orders backlog 25,507 24,324 22,861 25,434 26,049
- -----------------------------------------------------------------------------------------------------------------------
GECS DATA
Revenues $ 26,492 $19,875 $17,276 $14,418 $13,053
Earnings from continuing operations 2,415 2,085 1,567 1,331 1,221
Earnings (losses) from discontinued operations - (1,189) 240 168 54
Net earnings 2,415 896 1,807 1,499 1,256
Share owner's equity 12,774 9,380 10,809 8,884 7,758
Minority interest 2,522 1,465 1,301 994 865
Borrowings from others 111,598 91,399 81,052 72,360 63,313
Ratio of debt to equity at GE Capital <F1> 7.89:1 7.94:1 7.96:1 7.91:1 7.80:1
Total assets of GE Capital $160,825 $130,904 $117,939 $92,632 $80,528
Reserve coverage on financing receivables 2.63% 2.63% 2.63% 2.63% 2.63%
Insurance premiums written $ 6,158 $ 3,962 $ 3,956 $ 2,900 $ 2,155
- ------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> Equity excludes unrealized gains and losses on investment securities.
See note 20 to the consolidated financial statements for information about the 1993 accounting change. The 1991
accounting change represented the adoption of SFAS No. 106, Employers' Accounting for Postretirement Benefits Other Than
Pensions. "GE" means the basis of consolidation as described in note 1 to the consolidated financial statements; "GECS"
means General Electric Capital Services, Inc. and all of its affiliates and associated companies. Transactions between
GE and GECS have been eliminated from the "consolidated information."
</TABLE>
<PAGE>
F-20
Annual Report Page No. 44
MANAGEMENT'S DISCUSSION OF FINANCIAL RESPONSIBILITY
The financial data in this report, including the audited financial
statements, have been prepared by management using the best available
information and applying judgment. Accounting principles used in preparing
the financial statements are those that are generally accepted in the United
States.
Management believes that a sound, dynamic system of internal financial
controls that balances benefits and costs provides the best safeguard for
Company assets. Professional financial managers are responsible for
implementing and overseeing the financial control system, reporting on
management's stewardship of the assets entrusted to it by share owners and
maintaining accurate records.
GE is dedicated to the highest standards of integrity, ethics and social
responsibility. This dedication is reflected in written policy statements
covering, among other subjects, environmental protection, potentially
conflicting outside interests of employees, compliance with antitrust laws,
proper business practices and adherence to the highest standards of conduct
and practices in transactions with the U.S. government. Management continually
emphasizes to all employees that even the appearance of impropriety can erode
public confidence in the Company. Ongoing education and communication programs
and review activities, such as those conducted by the Company's Policy
Compliance Review Board, are designed to create a strong compliance culture -
one that encourages employees to raise their policy questions and concerns and
that prohibits retribution for doing so.
KPMG Peat Marwick LLP provides an objective, independent review of
management's discharge of its obligations relating to the fairness of
reporting operating results and financial condition. Their report for 1995
appears below.
The Audit Committee of the Board (consisting solely of Directors from
outside GE) maintains an ongoing appraisal - on behalf of share owners - of
the activities and independence of the Company's independent auditors, the
activities of its internal audit staff, financial reporting process, internal
financial controls and compliance with key Company policies.
/s/ John F. Welch, Jr. /s/ Dennis D. Dammerman
- ---------------------------- ---------------------------
John F. Welch, Jr. Dennis D. Dammerman
Chairman of the Board and Senior Vice President
Chief Executive Officer Finance
February 9, 1996
Independent Auditors' Report
To Share Owners and Board of Directors of
General Electric Company
We have audited the financial statements of General Electric Company and
consolidated affiliates as listed in Item 14 (a)(1) on page 27. In
connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedule as listed in Item 14 (a)(2) on
page 27. These consolidated financial statements and financial statement
schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the aforementioned financial statements present fairly, in
all material respects, the financial position of General Electric Company
and consolidated affiliates at December 31, 1995 and 1994, and the results
of their operations and their cash flows for each of the years in the three-
year period ended December 31, 1995, in conformity with generally accepted
accounting principles. Also in our opinion, the related financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.
As discussed in note 20 to the consolidated financial statements, the
Company in 1993 adopted a required change in its method of accounting for
postemployment benefits.
/s/ KPMG Peat Marwick LLP
- ----------------------------------------
KPMG Peat Marwick LLP
Stamford, Connecticut
February 9, 1996
<PAGE>
F-21
Annual Report Page No. 45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION. The consolidated financial statements represent the adding
together of all affiliates - companies that General Electric directly or
indirectly controls, either through majority ownership or otherwise. Results
of associated companies - generally companies that are 20% to 50% owned and
over which GE, directly or indirectly, has significant influence - are
included in the financial statements on a "one-line" basis.
FINANCIAL STATEMENT PRESENTATION. Financial data and related measurements
are presented in the following categories.
* GE. This represents the adding together of all affiliates other than
General Electric Capital Services, Inc. ("GECS"), whose continuing operations
are presented on a one-line basis.
* GECS. This affiliate owns all of the common stock of General Electric
Capital Corporation (GE Capital) and GE Global Insurance Holding Corporation
(GE Global Insurance). GE Capital, GE Global Insurance and their respective
affiliates are consolidated in the GECS columns and constitute its business.
* CONSOLIDATED. These data represent the adding together of GE and GECS.
The effects of transactions among related companies within and between
each of the above-mentioned groups are eliminated. Transactions between GE and
GECS are not material.
Certain prior-year amounts have been reclassified to conform to the 1995
presentation.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts and related disclosures. Actual
results could differ from those estimates.
SALES OF GOODS AND SERVICES. A sale is recorded when title passes to the
customer or when services are performed in accordance with contracts.
GECS REVENUES FROM OPERATIONS ("EARNED INCOME"). Income on all loans is
recognized on the interest method. Accrual of interest income is suspended
at the earlier of the time at which collection of an account becomes
doubtful or the account becomes 90 days delinquent. Interest income on
impaired loans is recognized either as cash is collected or on a cost-
recovery basis as conditions warrant.
Financing lease income is recorded on the interest method so as to
produce a level yield on funds not yet recovered. Estimated unguarantied
residual values of leased assets are based primarily on periodic independent
appraisals of the values of leased assets remaining at expiration of the lease
terms.
Operating lease income is recognized on a straight-line basis over the
terms of underlying leases.
Origination, commitment and other nonrefundable fees related to fundings
are deferred and recorded in earned income on the interest method. Commitment
fees related to loans not expected to be funded and line-of-credit fees are
deferred and recorded in earned income on a straight-line basis over the
period to which the fees relate. Syndication fees are recorded in earned
income at the time related services are performed unless significant
contingencies exist.
Premiums on insurance contracts are reported as earned income over the
terms of the related reinsurance treaties or insurance policies. In general,
earned premiums are calculated on a pro rata basis or are determined based on
reports received from reinsureds. Premium adjustments under retrospectively
rated reinsurance contracts are recorded based on estimated losses and loss
expenses, including both case and incurred-but-not-reported reserves. Premiums
received under annuity contracts that do not have significant mortality or
morbidity risk are not reported as revenues but as annuity benefits - a
liability - and are adjusted according to terms of the respective policies.
DEPRECIATION AND AMORTIZATION. The cost of most of GE's manufacturing plant
and equipment is depreciated using an accelerated method based primarily on
a sum-of-the-years digits formula. If manufacturing plant and equipment is
subject to abnormal economic conditions or obsolescence, additional
depreciation is provided.
The cost of GECS' equipment leased to others on operating leases is
amortized, principally on a straight-line basis, to estimated net salvage
value over the lease term or over the estimated economic life of the
equipment. Depreciation of property and equipment for GECS' own use is
recorded on either a sum-of-the-years digits formula or a straight-line basis
over the lives of the assets.
RECOGNITION OF LOSSES ON FINANCING RECEIVABLES AND INVESTMENTS. GECS
maintains an allowance for losses on financing receivables at an amount that
it believes is sufficient to provide adequate protection against future
losses in the portfolio. When collateral is repossessed in satisfaction of a
loan, the receivable is written down against the allowance for losses to
estimated fair value less costs to sell, transferred to other assets and
subsequently carried at the lower of cost or estimated fair value less costs
to sell. This accounting method has been employed principally for
specialized financing transactions.
See note 8 for further information on GECS' allowance for losses on
financing receivables.
<PAGE>
F-22
Annual Report Page No. 46
CASH EQUIVALENTS. Marketable securities with original maturities of three
months or less are included in cash equivalents.
INVESTMENT SECURITIES. The Company has designated its investments in debt
securities and marketable equity securities as available-for-sale. Those
securities are reported at fair value, with net unrealized gains and losses
included in equity, net of applicable taxes. Unrealized losses that are
other than temporary are recognized in earnings.
INVENTORIES. All inventories are stated at the lower of cost or realizable
values. Cost for virtually all of GE's U.S. inventories is stated on a last-
in, first-out (LIFO) basis; cost of other inventories is primarily
determined on a first-in, first-out (FIFO) basis.
INTANGIBLE ASSETS. Goodwill is amortized over its estimated period of
benefit on a straight-line basis; other intangible assets are amortized on
appropriate bases over their estimated lives. No amortization period exceeds
40 years. Goodwill in excess of associated expected operating cash flows is
considered to be impaired and is written down to fair value.
DEFERRED INSURANCE ACQUISITION COSTS. For the property and casualty
business, deferred insurance acquisition costs are amortized pro rata over
the contract periods in which the related premiums are earned. For the life
insurance business, these costs are amortized over the premium-paying
periods of the contracts in proportion either to anticipated premium income
or to gross profit, as appropriate. For certain annuity contracts, such
costs are amortized on the basis of anticipated gross profits. For other
lines of business, acquisition costs are amortized over the life of the
related insurance contracts. Deferred insurance acquisition costs are
reviewed for recoverability; anticipated investment income is considered in
making recoverability evaluations.
INTEREST RATE AND CURRENCY RISK MANAGEMENT. As a matter of policy, neither
GE nor GECS engages in derivatives trading, market-making or other
speculative activities. Any instrument designated but ineffective as a hedge
is marked to market and recognized in operations immediately.
GE and GECS use swaps primarily to optimize funding costs. To a lesser
degree, and in combination with options and limit contracts, GECS uses swaps
to stabilize cash flows from mortgage-related assets.
Interest rate and currency swaps that modify borrowings or designated
assets, including swaps associated with forecasted commercial paper renewals,
are accounted for on an accrual basis. Both GE and GECS require all other
swaps, as well as options and forwards, to be designated and accounted for as
hedges of specific assets, liabilities or committed transactions; resulting
payments and receipts are recognized contemporaneously with effects of hedged
transactions. A payment or receipt arising from early termination of an
effective hedge is accounted for as an adjustment to the basis of the hedged
transaction.
2. DISCONTINUED OPERATIONS
A summary of discontinued operations follows.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C>
Earnings (loss) from GECS securities
broker-dealer $(1,189) $240
Earnings from GE Aerospace - 753
------- ----
Earnings (loss) from discontinued operations $(1,189) $993
======= ====
- -------------------------------------------------------------------------
</TABLE>
GECS SECURITIES BROKER-DEALER. In November 1994, GE elected to terminate the
operations of Kidder, Peabody Group Inc. (Kidder, Peabody), the GECS
securities broker-dealer, by initiating an orderly liquidation of its assets
and liabilities. As part of the liquidation plan, GE received securities of
Paine Webber Group Inc. valued at $657 million in exchange for certain
broker-dealer assets and operations. Summary operating results of the
discontinued broker-dealer operations follow.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C>
Revenues $ 4,578 $4,861
======= ======
Earnings (loss) before income taxes $(551) $ 439
Income tax benefit (provision) 230 (199)
------- ------
Earnings (loss) from discontinued operations (321) 240
Provision for loss, net of income tax
benefit of $266 (868) -
------- -----
Earnings (loss) from GECS securities
broker-dealer $(1,189) $ 240
======= ======
- -------------------------------------------------------------------------
</TABLE>
The 1994 provision of $868 million after taxes, shown in the summary
above, related to exit costs associated with liquidation of Kidder, Peabody.
This liquidation was substantially complete as of December 31, 1995.
GE AEROSPACE. In April 1993, General Electric Company transferred GE's
Aerospace business segment, GE Government Services, Inc., and a component of
GE that operated Knolls Atomic Power Laboratory under a contract with the
U.S. Department of Energy to a new company controlled by the shareholders of
Martin Marietta Corporation in a transaction valued at $3.3 billion. Summary
operating results of discontinued aerospace operations follow.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1993
- -------------------------------------------------------------------------
<S> <C>
Revenues $996
====
Earnings before income taxes $119
Provision for income taxes (44)
----
Earnings from discontinued operations 75
Gain on transfer, net of income taxes of $752 678
----
Earnings from GE Aerospace $753
====
- -------------------------------------------------------------------------
</TABLE>
<PAGE>
F-23
Annual Report Page No. 47
3. GE OTHER INCOME
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1995 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Royalty and technical agreements $453 $395 $371
Associated companies 111 115 65
Marketable securities and bank deposits 70 77 75
Customer financing 26 28 29
Other investments
Dividends 62 62 50
Interest 18 21 21
Other items 13 85 119
---- ---- ----
$753 $783 $730
==== ==== ====
- -------------------------------------------------------------------------
</TABLE>
4. GECS REVENUES FROM OPERATIONS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1995 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Time sales, loan, investment
and other income $13,004 $9,709 $7,997
Financing leases 3,176 2,539 2,315
Operating lease rentals 4,080 3,802 3,267
Premium and commission income of
insurance affiliates 6,232 3,825 3,697
------- ------- -------
$26,492 $19,875 $17,276
======= ======= =======
- -------------------------------------------------------------------------
</TABLE>
Included in earned income from financing leases were pretax gains on the
sale of equipment at lease completion of $191 million in 1995, $180 million in
1994 and $145 million in 1993.
5. SUPPLEMENTAL COST DETAILS
Total expenditures for research and development were $1,892 million, $1,741
million and $1,955 million in 1995, 1994 and 1993, respectively. The Company-
funded portion aggregated $1,299 million in 1995, $1,176 million in 1994 and
$1,297 million in 1993.
Rental expense under operating leases is shown below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1995 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C> <C>
GE $523 $514 $635
GECS 524 468 413
- -------------------------------------------------------------------------
</TABLE>
At December 31, 1995, minimum rental commitments under noncancelable
operating leases aggregated $2,705 million and $3,119 million for GE and GECS,
respectively. Amounts payable over the next five years are shown below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1996 1997 1998 1999 2000
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GE $358 $324 $275 $216 $164
GECS 434 384 345 320 288
- -------------------------------------------------------------------------
</TABLE>
GE's selling, general and administrative expense totaled $5,743 million
in 1995, $5,211 million in 1994 and $5,124 million in 1993. Insignificant
amounts of interest were capitalized by GE and GECS in 1995, 1994 and 1993.
6. PENSION BENEFITS
GE and its affiliates sponsor a number of pension plans. Principal pension
plans are discussed below; other pension plans are not significant
individually or in the aggregate.
PRINCIPAL PENSION PLANS are the GE Pension Plan and the GE Supplementary
Pension Plan.
The GE Pension Plan covers substantially all GE employees and 65% of
GECS employees in the United States. Generally, benefits are based on the
greater of a formula recognizing career earnings or a formula recognizing
length of service and final average earnings. Benefit provisions are subject
to collective bargaining. At the end of 1995, the GE Pension Plan covered
approximately 462,000 participants, including 134,000 employees, 147,000
former employees with vested rights to future benefits, and 181,000 retirees
and beneficiaries receiving benefits.
The GE Supplementary Pension Plan is an unfunded plan providing
supplementary retirement benefits primarily to higher-level, longer-service
U.S. employees.
Details of income for principal pension plans follow.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
PENSION PLAN INCOME
(In millions) 1995 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Actual return on plan assets $ 5,439 $ 316 $ 3,221
Unrecognized portion of return (3,087) 1,951 (1,066)
Service cost for benefits earned <F1> (469) (496) (452)
Interest cost on benefit obligation (1,580) (1,491) (1,486)
Amortization 394 294 352
------- ------- -------
Total pension plan income $ 697 $ 574 $ 569
======= ======= =======
- -------------------------------------------------------------------------
<FN>
<F1> Net of employee contributions.
- -------------------------------------------------------------------------
</TABLE>
Actual return on trust assets in 1995 was 21.2%, compared with the 9.5%
assumed return on such assets. The effect of this higher return will be
recognized in future years.
The 1993 gain on transfer of discontinued Aerospace operations included
a pretax pension plan curtailment/settlement loss of $125 million.
<PAGE>
F-24
Annual Report Page No. 48
FUNDING POLICY for the GE Pension Plan is to contribute amounts sufficient
to meet minimum funding requirements as set forth in employee benefit and
tax laws plus such additional amounts as GE may determine to be appropriate.
GE has not made contributions since 1987 because the fully funded status of
the GE Pension Plan precludes current tax deduction and because any Company
contribution would require payment of annual excise taxes.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
FUNDED STATUS OF PENSION PLANS
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
Market-related value of assets $27,795 $25,441
Projected benefit obligation 23,119 19,334
- -------------------------------------------------------------------------
</TABLE>
The market-related value of pension assets recognizes market
appreciation or depreciation in the portfolio over five years, a method that
reduces the short-term impact of market fluctuations.
Plan assets are held in trust and consist mainly of common stock and
fixed-income investments. GE common stock represents about 3% of trust assets.
An analysis of amounts shown in the Statement of Financial Position is
shown below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
PREPAID PENSION ASSET
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
Fair value of trust assets $30,200 $26,166
Projected benefit obligation (23,119) (19,334)
------- -------
Assets in excess of obligation 7,081 6,832
Add (deduct) unamortized balances
SFAS No. 87 transition gain (769) (923)
Experience gains (2,127) (2,548)
Plan amendments 523 602
Pension liability 564 526
------- -------
PREPAID PENSION ASSET $5,272 $4,489
======= =======
- -------------------------------------------------------------------------
</TABLE>
The accumulated benefit obligation was $22,052 million and $18,430
million at year-end 1995 and 1994, respectively; the vested benefit obligation
was approximately equal to the accumulated benefit obligation at the end of
both years.
ACTUARIAL ASSUMPTIONS AND TECHNIQUES used to determine costs and benefit
obligations for principal pension plans follow.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
ACTUARIAL ASSUMPTIONS
December 31 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
Discount rate 7.0% 8.5%
Compensation increases 4.0 5.5
Return on assets for the year 9.5 9.5
- -------------------------------------------------------------------------
</TABLE>
Experience gains and losses, as well as the effects of changes in
actuarial assumptions and plan provisions, are amortized over employees'
average future service period.
7. RETIREE HEALTH AND LIFE BENEFITS
GE and its affiliates sponsor a number of retiree health and life insurance
benefit plans. Principal retiree benefit plans are discussed below; other
such plans are not significant individually or in the aggregate.
PRINCIPAL RETIREE BENEFIT PLANS generally provide health and life insurance
benefits to employees who retire under the GE Pension Plan with 10 or more
years of service. Retirees share in the cost of their health care benefits.
Benefit provisions are subject to collective bargaining. At the end of 1995,
these plans covered approximately 252,000 retirees and dependents.
Details of cost for principal retiree benefit plans follow.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
COST OF RETIREE BENEFIT PLANS
(In millions) 1995 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C> <C>
RETIREE HEALTH PLANS
Service cost for benefits earned $73 $78 $49
Interest cost on benefit obligation 189 191 192
Actual return on plan assets - - (3)
Unrecognized portion of return - (1) 1
Amortization (12) (3) (26)
------- ------- -------
Retiree health plan cost 250 265 213
------- ------- -------
RETIREE LIFE PLANS
Service cost for benefits earned 13 24 21
Interest cost on benefit obligation 108 105 111
Actual return on plan assets (329) (2) (152)
Unrecognized portion of return 206 (120) 42
Amortization 1 8 7
------- ------- -------
Retiree life plan cost (income) (1) 15 29
------- ------- -------
TOTAL COST $249 $280 $242
======= ======= =======
- -------------------------------------------------------------------------
</TABLE>
The 1993 gain on transfer of discontinued Aerospace operations included
a pretax retiree health and life plan curtailment/settlement gain of $245
million.
FUNDING POLICY for retiree health benefits is generally to pay covered
expenses as they are incurred. GE funds retiree life insurance benefits at
its discretion and within limits imposed by tax laws.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
FUNDED STATUS OF RETIREE BENEFIT PLANS
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> c> <C>
Market-related value of assets $1,430 $1,346
Accumulated postretirement benefit obligation 4,089 3,701
- -------------------------------------------------------------------------
</TABLE>
The market-related value of assets of retiree life plans recognizes
market appreciation or depreciation in the portfolio over five years, a method
that reduces the short-term impact of market fluctuations.
Plan assets are held in trust and consist mainly of common stock and
fixed-income investments. GE common stock represents about 2% of trust assets.
<PAGE>
F-25
Annual Report Page No. 49
An analysis of amounts shown in the Statement of Financial Position is
shown below.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
RETIREE BENEFIT LIABILITY/ASSET
Retiree health plans Retiree life plans
-------------------- -------------------
December 31 (In millions) 1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Accumulated postretirement benefit obligation
Retirees and dependents $1,984 $1,858 $1,314 $1,099
Employees eligible to retire 95 101 53 55
Other employees 451 427 192 161
------ ------ ------ ------
2,530 2,386 1,559 1,315
Less fair value of trust assets - - (1,556) (1,323)
------ ------ ------ ------
Obligation over (under) assets 2,530 2,386 3 (8)
Add (deduct) unamortized balances
Experience losses (292) (112) (199) (198)
Plan amendments 177 188 119 130
------ ------ ------ ------
RETIREE BENEFIT LIABILITY (PREPAID ASSET) $2,415 $2,462 $(77) $(76)
====== ====== ====== ======
- -----------------------------------------------------------------------------------------------
</TABLE>
ACTUARIAL ASSUMPTIONS AND TECHNIQUES used to determine costs and benefit
obligations for principal retiree benefit plans are shown below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
ACTUARIAL ASSUMPTIONS
December 31 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
Discount rate 7.0% 8.5%
Compensation increases 4.0 5.5
Health care cost trend 8.5 <F1> 9.0 <F2>
Return on assets for the year 9.5 9.5
- -------------------------------------------------------------------------
<FN>
<F1> Gradually declining to 5.0% after 2002.
<F2> Gradually declining to 5.0% after 2022.
- -------------------------------------------------------------------------
</TABLE>
Increasing the health care cost trend rates by one percentage point
would not have had a material effect on the December 31, 1995, accumulated
postretirement benefit obligation or the annual cost of retiree health plans.
Experience gains and losses, as well as the effects of changes in
actuarial assumptions and plan provisions, are amortized over employees'
average future service period.
8. GECS ALLOWANCE FOR LOSSES ON FINANCING RECEIVABLES
GECS allowance for losses on financing receivables represented 2.63% of
total financing receivables at year-end 1995 and 1994. The allowance for
small-balance receivables is determined principally on the basis of actual
experience during the preceding three years. Further allowances are provided
to reflect management's judgment of additional loss potential. For other
receivables, principally the larger loans and leases, the allowance for
losses is determined primarily on the basis of management's judgment of net
loss potential, including specific allowances for known troubled accounts.
The table below shows the activity in the allowance for losses on financing
receivables during each of the past three years.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1995 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at January 1 $2,062 $1,730 $1,607
Provisions charged to operations 1,117 873 987
Net transfers related to companies
acquired or sold 217 199 126
Amounts written off - net (877) (740) (990)
------ ------ ------
Balance at December 31 $2,519 $2,062 $1,730
====== ====== ======
- -------------------------------------------------------------------------
</TABLE>
All accounts or portions thereof deemed to be uncollectible or to
require an excessive collection cost are written off to the allowance for
losses. Generally, small-balance accounts are progressively written down (from
10% when more than three months delinquent to 100% when 9 to 12 months
delinquent) to record the balances at estimated realizable value. If at any
time during that period an account is judged to be uncollectible, such as in
the case of a bankruptcy, the uncollectible balance is written off. Large-
balance accounts are reviewed at least quarterly, and those accounts with
amounts that are judged to be uncollectible are written down to estimated
realizable value.
<PAGE>
F-26
Annual Report Page No. 50
9. PROVISION FOR INCOME TAXES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
(In millions) 1995 1994 1993
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GE
Estimated amounts payable $1,696 $1,305 $1,207
Deferred tax expense from temporary differences 373 592 120
Investment credit amortized - net (10) (15) (17)
------ ------ ------
2,059 1,882 1,310
------ ------ ------
GECS
Estimated amounts payable 434 447 221
Deferred tax expense from temporary differences 678 431 428
Investment credit amortized - net (7) (14) (7)
------ ------ ------
1,105 864 642
------ ------ ------
CONSOLIDATED
Estimated amounts payable 2,130 1,752 1,428
Deferred tax expense from temporary differences 1,051 1,023 548
Investment credit amortized - net (17) (29) (24)
------ ------ ------
$3,164 $2,746 $1,952
====== ====== ======
- ------------------------------------------------------------------------------------------
</TABLE>
GE includes GECS in filing a consolidated U.S. federal income tax
return. GECS' provision for estimated taxes payable includes its effect on the
consolidated return.
Estimated consolidated amounts payable includes amounts applicable to
non-U.S. jurisdictions of $721 million, $453 million and $302 million in 1995,
1994 and 1993, respectively.
Deferred income tax balances reflect the impact of temporary differences
between the carrying amounts of assets and liabilities and their tax bases and
are stated at enacted tax rates expected to be in effect when taxes are
actually paid or recovered. See note 22 for details.
Except for certain earnings that GE intends to reinvest indefinitely,
provision has been made for the estimated U.S. federal income tax liabilities
applicable to undistributed earnings of affiliates and associated companies.
Based on location (not tax jurisdiction) of the business providing goods
and services, consolidated U.S. income before taxes was $8.1 billion in 1995,
$7.5 billion in 1994 and $5.6 billion in 1993. The corresponding amounts for
non-U.S. based operations were $1.6 billion in 1995, $1.2 billion in 1994 and
$0.5 billion in 1993.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
RECONCILIATION OF U.S. FEDERAL Consolidated GE GECS
STATUTORY TAX RATE TO ACTUAL RATE ------------------------- ------------------------- --------------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Statutory U.S. federal income tax rate 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%
---- ---- ---- ---- ---- ---- ---- ---- ----
Increase (reduction) in rate resulting from:
Inclusion of after-tax earnings of
GECS in before-tax earnings of GE - - - (9.8) (9.4) (10.0) - - -
Rate increase - deferred taxes - - 1.6 - - (0.2) - - 5.2
Amortization of goodwill 1.1 1.1 1.5 0.8 0.8 1.2 1.1 1.0 1.2
Tax-exempt income (2.1) (2.4) (2.9) - - - (5.8) (6.9) (8.3)
Foreign Sales Corporation tax
benefits (0.9) (1.1) (1.3) (1.1) (1.2) (1.5) - - -
Dividends received, not fully
taxable (0.5) (0.5) (0.7) (0.2) (0.3) (0.3) (0.8) (0.8) (1.2)
All other - net (0.1) (0.4) (1.4) (0.8) (0.8) (0.4) 1.9 1.0 (2.8)
---- ---- ---- ---- ---- ---- ---- ---- ----
(2.5) (3.3) (3.2) (11.1) (10.9) (11.2) (3.6) (5.7) (5.9)
---- ---- ---- ---- ---- ---- ---- ---- ----
Actual income tax rate 32.5% 31.7% 31.8% 23.9% 24.1% 23.8% 31.4% 29.3% 29.1%
==== ==== ==== ==== ==== ==== ==== ==== ====
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
F-27
Annual Report Page No. 51
10. GECS INVESTMENT SECURITIES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Gross Gross
Amortized unrealized unrealized Estimated
(In millions) cost gains losses fair value
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1995
Corporate and other $12,313 $ 463 $ (63) $12,713
State and municipal 9,460 570 (11) 10,019
Mortgage-backed 5,991 255 (65) 6,181
Non-U.S. 6,887 213 (37) 7,063
Equity 2,843 412 (59) 3,196
U.S. government and federal agency 1,817 77 (3) 1,891
------- ------- ------- -------
$39,311 $ 1,990 $ (238) $41,063
======= ======= ======= =======
DECEMBER 31, 1994
Corporate and other $10,883 $4 $(763) $10,124
State and municipal 9,193 146 (392) 8,947
Mortgage-backed 4,927 82 (220) 4,789
Non-U.S. 3,892 20 (76) 3,836
Equity 2,147 201 (180) 2,168
U.S. government and federal agency 1,185 - (177) 1,008
------- ------- ------- -------
$32,227 $453 $(1,808) $30,872
======= ======= ======= =======
- -----------------------------------------------------------------------------------------------
</TABLE>
At December 31, 1995, contractual maturities of debt securities, other
than mortgage-backed securities, were as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
GECS CONTRACTUAL MATURITIES
(EXCLUDING MORTGAGE-BACKED SECURITIES)
Amortized Estimated
(In millions) cost fair value
- -------------------------------------------------------------------------
<S> <C> <C>
Due in
1996 $2,359 $2,386
1997-2000 9,753 9,982
2001-2005 6,821 7,129
2006 and later 11,544 12,189
- -------------------------------------------------------------------------
</TABLE>
It is expected that actual maturities will differ from contractual
maturities because borrowers have the right to call or prepay certain
obligations, sometimes without call or prepayment penalties. Proceeds from
sales of investment securities in 1995 were $11,017 million ($5,821 million in
1994 and $6,112 million in 1993). Gross realized gains were $503 million in
1995 ($281 million in 1994 and $173 million in 1993). Gross realized losses
were $157 million in 1995 ($112 million in 1994 and $34 million in 1993).
11. GE CURRENT RECEIVABLES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
Aircraft Engines $1,373 $1,183
Appliances 595 499
Broadcasting 556 493
Industrial Products and Systems 1,525 1,503
Materials 1,322 1,256
Power Generation 2,334 1,925
Technical Products and Services 692 603
All Other 94 282
Corporate 631 268
------ ------
9,122 8,012
Less allowance for losses (231) (205)
------ ------
$8,891 $7,807
====== ======
- -------------------------------------------------------------------------
</TABLE>
Of receivables balances at December 31, 1995 and 1994 before allowance
for losses, $6,582 million and $5,668 million, respectively, were from sales
of goods and services to customers, and $293 million and $196 million,
respectively, were from transactions with associated companies.
Current receivables of $322 million at year-end 1995 and $387 million at
year-end 1994 arose from sales, principally of aircraft engine goods and
services, on open account to various agencies of the U.S. government, which is
GE's largest single customer. About 5%, 6% and 8% of GE's sales of goods and
services were to the U.S. government in 1995, 1994 and 1993, respectively.
12. GE INVENTORIES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
Raw materials and work in process $ 3,205 $ 2,933
Finished goods 2,277 2,165
Unbilled shipments 258 214
------- -------
5,740 5,312
Less revaluation to LIFO (1,345) (1,432)
------- -------
$ 4,395 $ 3,880
======= =======
- -------------------------------------------------------------------------
</TABLE>
LIFO revaluations decreased $87 million in 1995, compared with decreases
of $197 million in 1994 and $179 million in 1993. Included in these changes
were decreases of $88 million, $72 million and $101 million in 1995, 1994 and
1993, respectively, that resulted from lower LIFO inventory levels. There was
no cost change in 1995 and net cost decreases in 1994 and 1993. As of December
31, 1995, GE is obligated to acquire raw materials at market prices through
the year 2000 under various take-or-pay or similar arrangements. Annual
minimum commitments under these arrangements are insignificant.
<PAGE>
F-28
Annual Report Page No. 52
13. GECS FINANCING RECEIVABLES (INVESTMENT IN TIME SALES, LOANS AND
FINANCING LEASES)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
TIME SALES AND LOANS
Consumer services $33,430 $25,906
Specialized financing 18,230 17,988
Mid-market financing 8,795 5,916
Equipment management 1,371 1,516
Specialty insurance 189 -
------- -------
62,015 51,326
Deferred income (2,424) (1,305)
------- -------
Time sales and loans - net 59,591 50,021
------- -------
INVESTMENT IN FINANCING LEASES
Direct financing leases 33,291 25,916
Leveraged leases 2,909 2,482
------- -------
Investment in financing leases 36,200 28,398
------- -------
95,791 78,419
Less allowance for losses (2,519) (2,062)
------- -------
$93,272 $76,357
======= =======
- -------------------------------------------------------------------------
</TABLE>
Time sales and loans represents transactions in a variety of forms,
including time sales, revolving charge and credit, mortgages, installment
loans, intermediate-term loans and revolving loans secured by business assets.
The portfolio includes time sales and loans carried at the principal amount on
which finance charges are billed periodically, and time sales and loans
carried at gross book value, which includes finance charges. At year-end 1995
and 1994, specialized financing and consumer services loans included $13,405
million and $13,282 million, respectively, for commercial real estate loans.
Note 16 contains information on airline loans and leases.
At December 31, 1995, contractual maturities for time sales and loans
were $24,543 million in 1996; $11,933 million in 1997; $6,635 million in 1998;
$5,052 million in 1999; $4,424 million in 2000; and $9,428 million thereafter
- - aggregating $62,015 million. Experience has shown that a substantial portion
of receivables will be paid prior to contractual maturity. Accordingly, the
maturities of time sales and loans are not to be regarded as forecasts of
future cash collections.
Investment in financing leases consists of direct financing and
leveraged leases of aircraft, railroad rolling stock, autos, other
transportation equipment, data processing equipment and medical equipment, as
well as other manufacturing, power generation, mining and commercial equipment
and facilities.
As the sole owner of assets under direct financing leases and as the
equity participant in leveraged leases, GECS is taxed on total lease payments
received and is entitled to tax deductions based on the cost of leased assets
and tax deductions for interest paid to third-party participants. GECS
generally is entitled to any residual value of leased assets.
Investment in direct financing and leveraged leases represents unpaid
rentals and estimated unguarantied residual values of leased equipment, less
related deferred income. GECS has no general obligation for principal and
interest on notes and other instruments representing third-party participation
related to leveraged leases; such notes and other instruments have not been
included in liabilities but have been offset against the related rentals
receivable. GECS' share of rentals receivable on leveraged leases is
subordinate to the share of other participants who also have security
interests in the leased equipment.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Total Direct
NET INVESTMENT IN FINANCING LEASES financing leases financing leases Leveraged leases
---------------- ---------------- ----------------
December 31 (In millions) 1995 1994 1995 1994 1995 1994
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total minimum lease payments receivable $50,059 $39,968 $37,434 $30,338 $12,625 $ 9,630
Less principal and interest on third-party
nonrecourse debt (9,329) (7,103) - - (9,329) (7,103)
------- ------- ------- ------- ------- -------
Net rentals receivable 40,730 32,865 37,434 30,338 3,296 2,527
Estimated unguarantied residual value of leased assets 5,768 4,889 4,630 3,767 1,138 1,122
Less deferred income (10,298) (9,356) (8,773) (8,189) (1,525) (1,167)
------- ------- ------- ------- ------- -------
INVESTMENT IN FINANCING LEASES (as shown above) 36,200 28,398 33,291 25,916 2,909 2,482
Less amounts to arrive at net investment
Allowance for losses (745) (570) (669) (471) (76) (99)
Deferred taxes arising from financing leases (5,746) (5,075) (2,959) (2,470) (2,787) (2,605)
------- ------- ------- ------- ------- -------
NET INVESTMENT IN FINANCING LEASES $29,709 $22,753 $29,663 $22,975 $ 46 $ (222)
======= ======= ======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
F-29
Annual Report Page No. 53
At December 31, 1995, contractual maturities for rentals receivable
under financing leases were $8,780 million in 1996; $10,418 million in 1997;
$6,837 million in 1998; $3,631 million in 1999; $2,126 million in 2000; and
$8,938 million thereafter - aggregating $40,730 million. As with time sales
and loans, experience has shown that a portion of receivables will be paid
prior to contractual maturity, and these amounts should not be regarded as
forecasts of future cash flows.
Nonearning consumer receivables, primarily private-label credit card
receivables, amounted to $671 million and $422 million at December 31, 1995
and 1994, respectively. A majority of these receivables were subject to
various loss-sharing arrangements that provide full or partial recourse to the
originating private-label entity. Nonearning and reduced-earning receivables
other than consumer receivables were $464 million and $346 million at year-end
1995 and 1994, respectively.
On January 1, 1995, GE adopted Statement of Financial Accounting
Standards (SFAS) No. 114, Accounting by Creditors for Impairment of a Loan,
and the related SFAS No. 118, Accounting by Creditors for Impairment of a Loan
- - Income Recognition and Disclosures. These Statements do not apply to, among
other things, leases or large groups of smaller-balance, homogeneous loans,
and therefore are principally relevant to GECS' commercial loans. There was no
effect of adopting the Statements on 1995 results of operations or financial
position because the allowance for losses established under the previous
accounting policy continued to be appropriate following the accounting change.
The Statements require disclosures of impaired loans - loans for which it is
probable that the lender will be unable to collect all amounts due according
to original contractual terms of the loan agreement, based on current
information and events. At December 31, 1995, loans that required disclosure
as impaired amounted to $867 million, principally commercial real estate
loans. For $647 million of such loans, the required allowance for losses was
$285 million. The remaining $220 million of loans represents the recorded
investment in loans that are fully recoverable, but only because the recorded
investment had been reduced through charge-offs or deferral of income
recognition. These loans must be disclosed under the Statements' technical
definition of "impaired" because GECS will be unable to collect all amounts
due according to original contractual terms of the loan agreement. Under the
Statements, such loans do not require an allowance for losses. GECS' average
investment in impaired loans requiring disclosure under the Statements was
$1,037 million during 1995, with revenue of $49 million recognized,
principally on the cash basis.
14. PROPERTY, PLANT AND EQUIPMENT (INCLUDING EQUIPMENT LEASED TO OTHERS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
ORIGINAL COST
GE
Land and improvements $ 496 $ 416
Buildings, structures and related equipment 6,063 5,547
Machinery and equipment 17,184 15,847
Leasehold costs and manufacturing
plant under construction 1,100 1,073
Other 24 24
------- -------
24,867 22,907
------- -------
GECS
Buildings and equipment 2,616 1,875
Equipment leased to others
Aircraft <F1> 5,682 4,601
Vehicles 4,948 4,542
Marine shipping containers 3,253 3,333
Railroad rolling stock 1,811 1,605
Other 2,769 2,807
------- -------
21,079 18,763
------- -------
$45,946 $41,670
======= =======
ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION
GE $14,633 $13,382
GECS
Buildings and equipment 964 794
Equipment leased to others 4,670 4,029
------- -------
$20,267 $18,205
======= =======
- -------------------------------------------------------------------------
<FN>
<F1> Includes $101 million and $226 million of commercial aircraft off-
lease in 1995 and 1994, respectively.
- -------------------------------------------------------------------------
</TABLE>
Amortization of GECS' equipment leased to others was $1,702 million, $1,435
million and $1,395 million in 1995, 1994 and 1993, respectively.
Noncancelable future rentals due from customers for equipment on operating
leases at year-end 1995 totaled $8,412 million and are due as follows:
$2,501 million in 1996; $1,657 million in 1997; $1,119 million in 1998; $732
million in 1999; $450 million in 2000; and $1,953 million thereafter.
<PAGE>
F-30
Annual Report Page No. 54
15. INTANGIBLE ASSETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
GE
Goodwill $ 5,901 $ 5,605
Other intangibles 742 731
------- -------
6,643 6,336
------- -------
GECS
Goodwill 3,984 2,513
Mortgage servicing rights 1,688 1,351
Other intangibles 1,027 1,173
------- -------
6,699 5,037
------- -------
$13,342 $11,373
======= =======
- -------------------------------------------------------------------------
</TABLE>
GE's intangible assets are shown net of accumulated amortization of
$2,347 million in 1995 and $2,049 million in 1994. GECS' intangible assets are
net of accumulated amortization of $1,494 million in 1995 and $988 million in
1994.
16. ALL OTHER ASSETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
GE
Investments
Associated companies <F1> $ 1,201 $ 1,945
Government and government-guarantied
securities 100 273
Other 1,572 1,713
------- -------
2,873 3,931
Prepaid pension asset 5,272 4,489
Other 3,756 3,999
------- -------
11,901 12,419
------- -------
GECS
Investments
Assets acquired for resale 3,998 3,867
Associated companies <F1> 3,566 2,098
Real estate ventures 1,564 1,400
Other 2,072 1,652
------- -------
11,200 9,017
Deferred insurance acquisition costs 1,336 1,290
Other 1,868 1,224
------- -------
14,404 11,531
------- -------
$26,305 $23,950
======= =======
- -------------------------------------------------------------------------
<FN>
<F1> Includes advances.
- -------------------------------------------------------------------------
</TABLE>
In line with industry practice, sales of commercial jet aircraft engines
often involve long-term customer financing commitments. In making such
commitments, it is GE's general practice to require that it have or be able to
establish a secured position in the aircraft being financed. Under such
airline financing programs, GE had issued loans and guaranties (principally
guaranties) amounting to $1,433 million at year-end 1995 and $1,260 million at
year-end 1994; and it had entered into commitments totaling $1,505 million and
$1,136 million at year-end 1995 and 1994, respectively, to provide financial
assistance on future aircraft engine sales. Estimated fair values of the
aircraft securing these receivables and associated guaranties exceeded the
related account balances and guarantied amounts at December 31, 1995. GE sells
certain long-term receivables from the airline industry with recourse.
Proceeds from such sales amounted to $297 million in 1995 and $137 million in
1993. No receivables were sold in 1994. Balances outstanding were $487 million
and $269 million at December 31, 1995 and 1994, respectively. GECS acts as a
lender and lessor to the commercial airline industry. At December 31, 1995 and
1994, the balance of such GECS loans, leases and equipment leased to others
was $8,337 million and $7,571 million, respectively. In addition, GECS had
issued financial guaranties and funding commitments of $409 million at
December 31, 1995 ($506 million at year-end 1994) and had conditional
commitments to purchase aircraft at a cost of $141 million ($81 million at
year-end 1994).
At year-end 1995, the National Broadcasting Company had $7,953 million
of commitments to acquire broadcast material or the rights to broadcast
television programs, including U.S. television rights to future Olympic games,
and commitments under long-term television station affiliation agreements that
require payments through the year 2008.
In connection with numerous projects, primarily power generation bids
and contracts, GE had issued various bid and performance bonds and guaranties
totaling $2,462 million at year-end 1995 and $2,229 million at year-end 1994.
17. GE ALL OTHER CURRENT COSTS AND EXPENSES ACCRUED
At year-end 1995 and 1994, this account included taxes accrued of $1,598
million and $1,238 million, respectively, and compensation and benefit
accruals of $1,233 million and $1,191 million, respectively. Also included
are amounts for product warranties, estimated costs on shipments billed to
customers and a variety of sundry items.
<PAGE>
F-31
Annual Report Page No. 55
18. BORROWINGS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
SHORT-TERM BORROWINGS 1995 1994
---------------------- --------------------
December 31 Average Average
(In millions) Amount rate Amount rate
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GE
Payable to banks $ 266 8.18% $ 353 8.21%
Commercial paper (U.S.) 403 5.72 -
Current portion of long-term debt 697 243
Other 300 310
------- -------
1,666 906
------- -------
GECS
Commercial paper
U.S. 37,432 5.82 41,759 5.88
Non-U.S. 3,796 6.33 1,938 6.27
Current portion of long-term debt 15,719 9,695
Other 5,861 3,695
------- -------
62,808 57,087
------- -------
ELIMINATIONS (11) (212)
------- -------
$64,463 $57,781
======= =======
- -----------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------
LONG-TERM BORROWINGS Weighted
December 31 average interest
(In millions) rate <F1> Maturities 1995 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GE
Senior notes 7.16% 1997-2000 $ 988 $ 1,480
Payable to banks 6.11 1997-2003 482 283
Industrial development/pollution
control bonds 3.90 1997-2019 260 261
Other <F2> 547 675
------- -------
2,277 2,699
------- -------
GECS
Senior notes 6.56 1997-2055 47,794 33,615
Subordinated notes <F3> 7.88 2006-2035 996 697
------- -------
48,790 34,312
------- -------
ELIMINATIONS (40) (32)
------- -------
$51,027 $36,979
======= =======
- -----------------------------------------------------------------------------------------------
<FN>
<F1> Includes the effects of associated interest rate and currency swaps.
<F2> Includes a variety of obligations having various interest rates and maturities, including
certain borrowings by parent operating components and affiliates.
<F3> Guarantied by GE.
- -----------------------------------------------------------------------------------------------
</TABLE>
INTEREST RATE AND CURRENCY SWAPS are employed by GE and GECS to achieve the
lowest cost of funds for a particular funding strategy. GECS enters into
interest rate swaps and currency swaps (including non-U.S. currency and
cross-currency interest rate swaps) to modify interest rates and/ or
currencies of specific debt instruments. For example, to fund U.S.
operations, GE Capital may issue fixed-rate debt denominated in a currency
other than the U.S. dollar and simultaneously enter into a currency swap to
create synthetic fixed-rate U.S. dollar debt with a lower yield than could
be achieved directly. Such interest rate and currency swaps have been
designated as modifying interest rates, currencies, or both. Neither GE nor
GECS engages in derivatives trading, market-making or other speculative
activities.
GECS used a portion of this interest rate swap portfolio to convert
interest rate exposure on short-term and floating rate long-term borrowings to
interest rates that are fixed over the terms of the related swaps; interest
rate basis swaps also are employed to manage short-term financing factors -
for example, to convert commercial paper-based interest costs to prime rate-
based costs. At December 31, 1995 and 1994, such swaps were outstanding for
principal amounts equivalent to $11,451 million and $9,301 million with
maturities from 1996 to 2029 and weighted average interest rates of 6.86% and
6.80%, respectively.
Aggregate amounts of long-term borrowings that mature during the next
five years are as follows.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1996 1997 1998 1999 2000
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GE $ 697 $ 527 $ 1,011 $ 28 $ 276
GECS 15,719 14,012 11,517 5,480 4,494
- -------------------------------------------------------------------------
</TABLE>
Additional information about GE and GECS borrowings, as well as
associated swaps, is provided in note 29.
CONFIRMED CREDIT LINES of approximately $3.1 billion had been extended to GE
by 32 banks at year-end 1995. Substantially all of GE's credit lines are
available to GECS and its affiliates in addition to their own credit lines.
At year-end 1995, GECS and its affiliates had committed lines of credit
aggregating $20.4 billion with 128 banks, including $9.5 billion of revolving
credit agreements pursuant to which it has the right to borrow funds for
periods exceeding one year. A total of $1.5 billion of GE Capital's credit
lines is available for use by GE.
During 1995, neither GE nor GECS borrowed under any of these credit
lines. Both GE and GECS compensate banks for credit facilities in the form of
fees, which were insignificant in each of the past three years.
<PAGE>
F-32
Annual Report Page No. 56
19. INSURANCE LIABILITIES, RESERVES AND ANNUITY BENEFITS
Insurance liabilities, reserves and annuity benefits comprises
policyholders' benefits, unearned premiums and reserves for policy losses in
GECS' insurance and annuity businesses. The estimated liability for
insurance losses and loss expenses consists of both case and incurred-but-
not-reported reserves. Where GECS' experience is not sufficient to determine
reserves, industry averages are used. Estimated amounts of salvage and
subrogation recoverable on paid and unpaid losses are deducted from
outstanding losses. The insurance subsidiaries of GECS have no significant
permitted statutory accounting practices that differ from either
statutorially prescribed or generally accepted accounting principles.
Activity in the liability for unpaid claims and claims adjustment
expenses is summarized below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
(In millions) 1995 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at January 1 - gross $ 7,032 $ 6,405 $ 5,484
Less reinsurance recoverables (1,084) (1,142) (1,191)
------- ------- -------
Balance at January 1 - net 5,948 5,263 4,293
Claims and expenses incurred
Current year 3,268 2,016 2,051
Prior years 492 558 359
Claims and expenses paid
Current year (706) (543) (378)
Prior years (1,908) (1,432) (1,048)
Claim reserves related to
acquired companies 3,696 49 -
Other 19 37 (14)
------- ------- -------
Balance at December 31 - net 10,809 5,948 5,263
Add reinsurance recoverables 1,853 1,084 1,142
------- ------- -------
Balance at December 31 - gross $12,662 $ 7,032 $ 6,405
======= ======= =======
- -------------------------------------------------------------------------
</TABLE>
The liability for future policy benefits of the life insurance
affiliates has been computed mainly by a net-level-premium method based on
assumptions for investment yields, mortality and terminations that were
appropriate at date of purchase or at the time the policies were developed,
including provisions for adverse deviations. Average yields used in these
computations ranged from 2.0% to 9.0% in 1995 and 4.0% to 9.1% in 1994.
Financial guaranties and credit life risk of insurance affiliates are
summarized below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
Guaranties, principally on municipal
bonds and structured finance issues $119,406 $106,726
Mortgage insurance risk in force 32,599 31,463
Credit life insurance risk in force 13,670 13,713
Other 110 147
Less reinsurance (21,749) (19,426)
-------- --------
$144,036 $132,623
======== ========
- -------------------------------------------------------------------------
</TABLE>
20. GE ALL OTHER LIABILITIES
This account includes noncurrent compensation and benefit accruals at year-
end 1995 and 1994 of $4,858 million and $4,632 million, respectively. Also
included are amounts for deferred incentive compensation, deferred income,
product warranties and a variety of sundry items.
SFAS No. 112, Employers' Accounting for Postemployment Benefits, was
adopted as of January 1, 1993. This Statement requires that employers
recognize over the service lives of employees the costs of postemployment
benefits if certain conditions are met. The principal effect for GE was to
change the method of accounting for severance benefits. Under the previous
accounting policy, the total cost of severance benefits was expensed when the
severance event occurred. The cumulative effect of the accounting change as of
January 1, 1993, amounted to $1,306 million before taxes ($862 million, or
$0.51 per share, after taxes).
21. RESTRICTED NET ASSETS OF AFFILIATES
Certain GECS consolidated affiliates are restricted from remitting funds to
GECS in the form of dividends or loans by a variety of regulations, the
purpose of which is to protect affected insurance policyholders, depositors
or investors. At year-end 1995, net assets of GECS' regulated affiliates
amounted to $14.7 billion, of which $12.5 billion was restricted.
<PAGE>
F-33
Annual Report Page No. 57
22. DEFERRED INCOME TAXES
Aggregate deferred tax amounts are summarized below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
ASSETS
GE $3,851 $ 3,720
GECS 2,183 2,642
------ -------
6,034 6,362
------ -------
LIABILITIES
GE 4,359 3,988
GECS 9,055 7,579
------ -------
13,414 11,567
------ -------
NET DEFERRED TAX LIABILITY $7,380 $5,205
====== =======
- -------------------------------------------------------------------------
</TABLE>
Principal components of the net deferred tax liability balances for GE
and GECS are as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
GE
Provisions for expenses $(2,539) $(2,422)
Retiree insurance plans (818) (835)
Prepaid pension asset 1,845 1,571
Depreciation 928 860
Other - net 1,092 1,094
------- -------
508 268
------- -------
GECS
Financing leases 5,746 5,075
Operating leases 1,367 1,234
Net unrealized gains (losses) on securities 608 (468)
Allowance for losses (852) (876)
Insurance reserves (497) (460)
Other - net 500 432
------- -------
6,872 4,937
------- -------
NET DEFERRED TAX LIABILITY $ 7,380 $ 5,205
======= =======
- -------------------------------------------------------------------------
</TABLE>
23. MINORITY INTEREST IN EQUITY OF CONSOLIDATED AFFILIATES
Minority interest in equity of consolidated GECS affiliates includes
preferred stock issued by GE Capital and by a subsidiary of GE Capital. The
preferred stock pays cumulative dividends at variable rates. The liquidation
preference of the preferred shares is summarized below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
December 31 (In millions) 1995 1994
- -------------------------------------------------------------------------
<S> <C> <C>
GE Capital $1,800 $875
GE Capital subsidiary 360 240
- -------------------------------------------------------------------------
</TABLE>
Dividend rates on the preferred stock ranged from 4.2% to 5.2% during
1995, from 2.3% to 4.9% during 1994 and from 2.3% to 2.8% during 1993.
24. SHARE OWNERS' EQUITY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
(In millions) 1995 1994 1993
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK ISSUED
Balance at January 1 $ 594 $ 584 $ 584
Adjustment for stock split - 9 -
Newly issued stock - 1 -
------- ------- -------
Balance at December 31 $ 594 $ 594 $ 584
======= ======= =======
UNREALIZED GAINS (LOSSES) ON INVESTMENT SECURITIES $ 1,000 $ (810) $ 848
======= ======= =======
OTHER CAPITAL
Balance at January 1 $ 1,122 $ 550 $ 719
Currency translation adjustments 127 180 (279)
Gains on treasury stock dispositions 414 215 110
Newly issued stock - 186 -
Adjustment for stock split - (9) -
------- ------- -------
Balance at December 31 $ 1,663 $ 1,122 $ 550
======= ======= =======
RETAINED EARNINGS
Balance at January 1 $30,793 $28,613 $26,527
Net earnings 6,573 4,726 4,315
Dividends declared (2,838) (2,546) (2,229)
------- ------- -------
Balance at December 31 $34,528 $30,793 $28,613
======= ======= =======
COMMON STOCK HELD IN TREASURY
Balance at January 1 $ 5,312 $ 4,771 $ 4,407
Purchases 4,016 1,124 770
Dispositions (1,152) (583) (406)
------- ------- -------
Balance at December 31 $ 8,176 $ 5,312 $ 4,771
======= ======= =======
- ------------------------------------------------------------------------------------------
</TABLE>
In December 1994, GE's Board of Directors authorized the repurchase of
up to $5 billion of Company common stock over a two-year period with funds
generated largely from free cash flow. In December 1995, the Board increased
the authorized amount of the repurchase to $9 billion, which will allow the
program to continue through 1997. A total of 54.7 million shares having an
aggregate cost of $3.2 billion had been repurchased under this program and
placed into treasury as of December 31, 1995.
Common shares issued and outstanding are summarized in the table below.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
SHARES OF GE COMMON STOCK
December 31 (In thousands) 1995 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Issued 1,857,013 1,857,013 1,853,128
In treasury (190,501) (151,046) (145,826)
--------- --------- ---------
Outstanding 1,666,512 1,705,967 1,707,302
========= ========= =========
- -------------------------------------------------------------------------
</TABLE>
GE has 50 million authorized shares of preferred stock ($1.00 par
value), but no such shares have been issued.
The effects of translating to U.S. dollars the financial statements of
non-U.S. affiliates whose functional currency is the local currency are
included in other capital. Asset and liability accounts are translated at year-
end exchange rates, while revenues and expenses are translated at average
rates for the period. The cumulative currency translation adjustment was an
addition to other capital of $61 million at year-end 1995 and a reduction of
other capital of $66 million and $246 million at December 31, 1994 and 1993,
respectively.
<PAGE>
F-34
Annual Report Page No. 58
25. OTHER STOCK-RELATED INFORMATION
Stock option plans, stock appreciation rights (SARs), restricted stock and
restricted stock units are described in GE's current Proxy Statement. More
than 20,000 individuals, nearly one third of all exempt professionals at GE
and GECS, hold stock options. With certain restrictions, requirements for
stock option shares can be met from either unissued or treasury shares.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
STOCK OPTION ACTIVITY Average per share
Shares subject Exercise Market
(Shares in thousands) to option price price
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at January 1, 1993 48,164 $32.19 $42.75
Options granted 17,580 45.90 45.90
Replacement options 882 28.60 28.60
Options exercised (6,072) 28.33 47.57
Options terminated (1,200) 36.84 -
------
Balance at December 31, 1993 59,354 36.50 52.44
Options granted 15,134 50.66 50.66
Replacement options 340 36.44 36.44
Options exercised (4,163) 30.35 50.58
Options terminated (1,167) 44.04 -
------
Balance at December 31, 1994 69,498 39.82 51.00
Options granted 12,089 55.88 55.88
Replacement options 753 41.82 41.82
Options exercised (7,784) 31.44 59.21
Options terminated (2,119) 47.33 -
------
Balance at December 31, 1995 72,437 43.20 72.00
======
- -------------------------------------------------------------------------
</TABLE>
Options granted have been adjusted for the April 1994 2-for-1 stock
split. Without giving effect to that adjustment, options granted (in
thousands) were 12,089 in 1995; 10,117 in 1994; and 8,790 in 1993.
The replacement options replaced canceled SARs and have identical terms
thereto. At year-end 1995, there were 8.3 million SARs outstanding at an
average exercise price of $45.55. There were 4.4 million restricted stock
shares and restricted stock units outstanding at year-end 1995.
There were 20.8 million and 16.1 million shares available for grants of
options, SARs, restricted stock and restricted stock units at December 31,
1995 and 1994, respectively. Under the 1990 Long-Term Incentive Plan, 0.95% of
the Company's issued common stock (including treasury shares) as of the first
day of each calendar year during which the Plan is in effect becomes available
for granting awards in such year. Any unused portion, in addition to shares
allocated to awards that are canceled or forfeited, is available for later
years.
Outstanding options and SARs expire on various dates through December
14, 2005. Restricted stock grants vest on various dates up to normal
retirement of grantees.
GE adopted the disclosure-only option under SFAS No. 123, Accounting for
Stock-Based Compensation, as of December 31, 1995. If the accounting
provisions of the new Statement had been adopted as of the beginning of 1995,
the effect on 1995 net earnings would have been immaterial. Further, based on
current and anticipated use of stock options, it is not envisioned that the
impact of the Statement's accounting provisions would be material in any
future period.
The following table summarizes information about stock options
outstanding at December 31, 1995.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
STOCK OPTIONS OUTSTANDING
(Shares in thousands)
Outstanding Exercisable
------------------------------------- -------------------
Average Average
Exercise Average exercise exercise
price range Shares life <F1> price Shares price
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$19 3/4-$33 15/16 14,705 4.2 $29.25 14,705 $29.25
$34 5/16-$43 1/16 16,539 6.1 37.39 15,644 37.23
$43 1/4-$51 20,087 7.8 47.02 6,383 43.94
$51 1/16-$72 3/8 21,106 8.8 53.84 55 51.69
------ ------
Total 72,437 7.0 43.20 36,787 35.23
====== ======
- -----------------------------------------------------------------------------------------
<FN>
<F1> Average contractual life remaining in years.
At December 31, 1994, there were approximately 38 million options
exercisable at an average exercise price of $33.43.
- -----------------------------------------------------------------------------------------
</TABLE>
Stock options expire in 10 years from the date they are granted; options
vest over service periods that range from one to five years.
<PAGE>
F-35
Annual Report Page No. 59
26. SUPPLEMENTAL CASH FLOWS INFORMATION
Changes in operating assets and liabilities are net of acquisitions and
dispositions of businesses.
"Payments for principal businesses purchased" in the Statement of Cash
Flows is net of cash acquired and includes debt assumed and immediately repaid
in acquisitions.
"All other operating activities" in the Statement of Cash Flows consists
principally of adjustments to current and noncurrent accruals of costs and
expenses, amortization of premium and discount on debt, and adjustments to
assets such as amortization of goodwill and intangibles.
The Statement of Cash Flows excludes certain noncash transactions that
had no significant effects on the investing or financing activities of GE or
GECS.
Certain supplemental information related to GE and GECS cash flows is
shown below.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
For the years ended December 31 (In millions) 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GE
NET PURCHASE OF GE SHARES FOR TREASURY
Open market purchases under share repurchase programs $ (3,101) $ (69) $ (217)
Other purchases (915) (1,055) (553)
Dispositions (mainly to employee and dividend reinvestment plans) 1,493 771 406
-------- -------- --------
$ (2,523) $ (353) $ (364)
======== ======== ========
GECS
FINANCING RECEIVABLES
Increase in loans to customers $(46,154) $(37,059) $(30,002)
Principal collections from customers 44,840 31,264 27,571
Investment in equipment for financing leases (17,182) (10,528) (7,204)
Principal collections on financing leases 8,821 8,461 6,011
Net change in credit card receivables (3,773) (2,902) (1,645)
Sales of financing receivables with recourse 2,139 1,239 1,105
-------- -------- --------
$(11,309) $ (9,525) $ (4,164)
======== ======== ========
ALL OTHER INVESTING ACTIVITIES
Purchases of securities by insurance and annuity businesses $(14,452) $(8,663) $(10,488)
Dispositions and maturities of securities by insurance and annuity businesses 12,460 6,338 7,698
Proceeds from principal business dispositions 575 - -
Other (2,496) 2,501 (4,003)
-------- -------- --------
$ (3,913) $ 176 $ (6,793)
======== ======== ========
NEWLY ISSUED DEBT HAVING MATURITIES LONGER THAN 90 DAYS
Short-term (91 to 365 days) $2,545 $3,214 $4,315
Long-term (longer than one year) 32,507 19,228 10,885
Long-term subordinated 298 - -
Proceeds - nonrecourse, leveraged lease debt 1,428 31 53
-------- -------- --------
$ 36,778 $ 22,473 $ 15,253
======== ======== ========
REPAYMENTS AND OTHER REDUCTIONS OF DEBT HAVING MATURITIES LONGER THAN 90 DAYS
Short-term (91 to 365 days) $(16,075) $(10,460) $(9,008)
Long-term (longer than one year) (678) (930) (206)
Principal payments - nonrecourse, leveraged lease debt (292) (309) (312)
-------- -------- --------
$(17,045) $(11,699) $ (9,526)
======== ======== ========
ALL OTHER FINANCING ACTIVITIES
Proceeds from sales of investment and annuity contracts $ 1,754 $ 1,207 $ 509
Preferred stock issued by GE Capital 1,045 240 -
Redemption of investment and annuity contracts (2,540) (1,264) (578)
-------- -------- --------
$ 259 $ 183 $ (69)
======== ======== ========
OTHER
CASH FROM (USED FOR) DISCONTINUED OPERATIONS
Cash from GE Aerospace operating activities $ - $ - $ 76
Cash from GE Aerospace investing activities - - 886
Cash from (used for) GECS securities broker-dealer operating activities 1,414 1,635 (1,910)
Cash from (used for) GECS securities broker-dealer investing activities 92 334 (107)
Cash from (used for) GECS securities broker-dealer financing activities (1,506) (2,169) 2,017
-------- -------- --------
$ - $ (200) $ 962
======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
F-36
Annual Report Page No. 60
27. INDUSTRY SEGMENTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
REVENUES
(In millions) For the years ended December 31
- ---------------------------------------------------------------------------------------------------------------------------------
Total revenues Intersegment revenues External revenues
--------------------------- -------------------------- ----------------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GE
Aircraft Engines $ 6,098 $ 5,714 $ 6,580 $ 115 $ 43 $ 59 $ 5,983 $ 5,671 $ 6,521
Appliances 5,933 5,965 5,555 4 3 3 5,929 5,962 5,552
Broadcasting 3,919 3,361 3,102 - - - 3,919 3,361 3,102
Industrial Products and Systems 10,194 9,406 8,575 436 368 409 9,758 9,038 8,166
Materials 6,647 5,681 5,042 19 43 50 6,628 5,638 4,992
Power Generation 6,545 5,933 5,530 57 44 135 6,488 5,889 5,395
Technical Products and Services 4,424 4,285 4,174 19 18 18 4,405 4,267 4,156
All Other 2,707 2,348 1,803 - - - 2,707 2,348 1,803
Corporate items and eliminations (286) (195) (242) (650) (519) (674) 364 324 432
------- ------- ------- ----- ----- ----- ------- ------- -------
Total GE 46,181 42,498 40,119 - - - 46,181 42,498 40,119
------- ------- ------- ----- ----- ----- ------- ------- -------
GECS
Financing 19,042 14,932 12,399 - - - 19,042 14,932 12,399
Specialty Insurance 7,444 4,926 4,862 - - - 7,444 4,926 4,862
All Other 6 17 15 - - - 6 17 15
------- ------- ------- ----- ----- ----- ------- ------- -------
Total GECS 26,492 19,875 17,276 - - - 26,492 19,875 17,276
------- ------- ------- ----- ----- ----- ------- ------- -------
Eliminations (2,645) (2,264) (1,694) - - - (2,645) (2,264) (1,694)
------- ------- ------- ----- ----- ----- ------- ------- -------
CONSOLIDATED REVENUES $70,028 $60,109 $55,701 $ - $ - $ - $70,028 $60,109 $55,701
======= ======= ======= ===== ===== ===== ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
GE revenues include income from sales of goods and services to customers and other income. Sales from one Company component to
another generally are priced at equivalent commercial selling prices. "All Other" GE revenues consists primarily of GECS'
earnings.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS PROPERTY, PLANT AND EQUIPMENT
(INCLUDING EQUIPMENT LEASED TO OTHERS)
(In millions) At December 31 For the years ended December 31
- ---------------------------------------------------------------------------------------------------------------------------------
Depreciation, depletion
Additions and amortization
--------------------------- -------------------------- ----------------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
GE
Aircraft Engines $ 4,890 $ 4,751 $ 5,329 $ 266 $ 254 $ 207 $ 273 $ 261 $ 333
Appliances 2,304 2,309 2,193 143 159 129 93 84 125
Broadcasting 3,915 3,881 3,742 97 86 56 64 67 98
Industrial Products and Systems 6,117 5,862 5,442 425 400 397 308 363 332
Materials 9,095 8,628 8,181 521 417 374 478 443 413
Power Generation 5,679 4,887 3,875 155 176 212 166 143 143
Technical Products and Services 2,200 2,362 2,179 110 154 124 109 95 88
All Other 13,113 9,768 11,604 1 - 1 1 2 3
Corporate items and eliminations 8,403 8,365 8,589 113 97 88 89 87 96
-------- -------- -------- ------ ------ ------ ------ ------ ------
Total GE 55,716 50,813 51,134 1,831 1,743 1,588 1,581 1,545 1,631
-------- -------- -------- ------ ------ ------ ------ ------ ------
GECS
Financing 150,062 121,966 106,854 5,144 5,889 3,352 1,962 1,607 1,545
Specialty Insurance 34,795 22,058 18,915 132 62 15 24 16 9
All Other 872 943 868 36 44 59 27 39 38
-------- -------- -------- ------ ------ ------ ------ ------ ------
Total GECS 185,729 144,967 126,637 5,312 5,995 3,426 2,013 1,662 1,592
-------- -------- -------- ------ ------ ------ ------ ------ ------
Eliminations (13,410) (9,909) (11,358) - - - - - -
-------- -------- -------- ------ ------ ------ ------ ------ ------
CONSOLIDATED TOTALS $228,035 $185,871 $166,413 $7,143 $7,738 $5,014 $3,594 $3,207 $3,223
======== ======== ======== ====== ====== ====== ====== ====== ======
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
"All Other" GE assets consists primarily of investment in GECS.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
F-37
Annual Report Page No. 61
Details of operating profit by industry segment can be found on page 35 of
this report. A description of industry segments for General Electric Company
and consolidated affiliates follows.
* AIRCRAFT ENGINES. Jet engines and replacement parts and repair
services for all categories of commercial aircraft (short/medium, intermediate
and long-range); for a wide variety of military aircraft, including fighters,
bombers, tankers and helicopters; and for executive and commuter aircraft.
Sold worldwide to airframe manufacturers, airlines and government agencies.
Also, aircraft engine derivatives used as marine propulsion and industrial
power sources.
* APPLIANCES. Major appliances and related services for products such as
refrigerators, freezers, electric and gas ranges, dishwashers, clothes washers
and dryers, microwave ovens and room air conditioning equipment. Sold in North
America and in global markets under various GE and private-label brands.
Distributed to retail outlets, mainly for the replacement market, and to
building contractors and distributors for new installations.
* BROADCASTING. Primarily the National Broadcasting Company (NBC).
Principal businesses are the furnishing of U.S. network television services to
more than 200 affiliated stations, production of television programs,
operation of six VHF television broadcasting stations, operation of five
cable/satellite networks around the world, and investment and programming
activities in multimedia and cable television.
* INDUSTRIAL PRODUCTS AND SYSTEMS. Lighting products (including a wide
variety of lamps, lighting fixtures, wiring devices and quartz products);
electrical distribution and control equipment (including power delivery and
control products such as transformers, meters, relays, capacitors and
arresters); transportation systems products (including diesel-electric
locomotives, transit propulsion equipment and motorized wheels for off-highway
vehicles); electric motors and related products; a broad range of electrical
and electronic industrial automation products, including drive systems;
installation, engineering and repair services, which includes management and
technical expertise for large projects such as process control systems; and GE
Supply, a network of electrical supply houses. Markets are extremely diverse.
Products are sold to commercial and industrial end users, including utilities,
to original equipment manufacturers, to electrical distributors, to retail
outlets, to railways and to transit authorities. Increasingly, products are
developed for and sold in global markets.
* MATERIALS. High-performance engineered plastics used in applications
such as automobiles and housings for computers and other business equipment;
ABS resins; silicones; superabrasives such as man-made diamonds; and
laminates. Sold worldwide to a diverse customer base consisting mainly of
manufacturers.
* POWER GENERATION. Products and related maintenance services, mainly
for the generation of electricity. Markets and competition are global. Gas
turbines are sold principally as packaged power plants for electric utilities
and for industrial cogeneration and mechanical drive applications. Steam
turbine-generators are sold to electric utilities, to the U.S. Navy and, for
cogeneration, to industrial and other power customers. Marine steam turbines
are sold to the U.S. Navy. Power Generation also includes nuclear reactors and
fuel and support services for GE's installed boiling water reactors.
* TECHNICAL PRODUCTS AND SERVICES. Medical systems such as magnetic
resonance (MR) and computed tomography (CT) scanners, x-ray, nuclear imaging,
ultrasound, other diagnostic equipment and related services sold worldwide to
hospitals and medical facilities. This segment also includes a full range of
computer-based information and data interchange services for internal use and
external commercial and industrial customers.
* GECS FINANCING. Operations of GE Capital, as follows:
Consumer services - private-label and bank credit card loans, time sales
and revolving credit and inventory financing for retail merchants, auto
leasing and inventory financing, mortgage servicing, and annuity and mutual
fund sales.
Specialized financing - loans and financing leases for major capital
assets, including industrial facilities and equipment, and energy-related
facilities; commercial and residential real estate loans and investments; and
loans to and investments in management buyouts, including those with high
leverage, and corporate recapitalizations.
Equipment management - leases, loans and asset management services for
portfolios of commercial and transportation equipment, including aircraft,
trailers, auto fleets, modular space units, railroad rolling stock, data
processing equipment, oceangoing containers and satellites.
Mid-market financing - loans and financing and operating leases for
middle-market customers, including manufacturers, distributors and end users,
for a variety of equipment that includes data processing equipment, medical
and diagnostic equipment, and equipment used in construction, manufacturing,
office applications and telecommunications activities.
Very few of the products financed by GE Capital are manufactured by
other GE segments.
* GECS SPECIALTY INSURANCE. U.S. and international multiple-line
property and casualty reinsurance, certain directly written specialty
insurance and life reinsurance; financial guaranty insurance, principally on
municipal bonds and structured finance issues; private mortgage insurance; and
creditor insurance covering international customer loan repayments.
<PAGE>
F-38
Annual Report Page No. 62
28. GEOGRAPHIC SEGMENT INFORMATION (CONSOLIDATED)
Revenues and operating profit shown below are classified according to their
country of origin (including exports from such areas). Revenues and
operating profit classified under the caption "United States" include
royalty and licensing income from non-U.S. sources. U.S. exports to
international customers by major areas of the world are shown on page 38.
At year-end 1995, net assets of operations classified under the captions
"Europe" and "Other areas of the world" were $20,793 million and $6,942
million, respectively.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
REVENUES
(In millions) For the years ended December 31
- --------------------------------------------------------------------------------------------------------------------------------
Total revenues Intersegment revenues External revenues
---------------------------- --------------------------- -----------------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
United States $54,319 $49,920 $47,495 $ 2,123 $ 1,683 $ 1,513 $52,196 $48,237 $45,982
Europe 12,417 7,797 6,722 656 579 525 11,761 7,218 6,197
Other areas of the world 6,967 5,493 4,171 896 839 649 6,071 4,654 3,522
Intercompany eliminations (3,675) (3,101) (2,687) (3,675) (3,101) (2,687) - - -
------- ------- ------- ------- ------- ------- ------- ------- -------
Total $70,028 $60,109 $55,701 $ - $ - $ - $70,028 $60,109 $55,701
======= ======= ======= ======= ======= ======= ======= ======= =======
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
OPERATING PROFIT ASSETS
(In millions) For the years ended December 31 At December 31
- -------------------------------------------------------------------------------------------------------
1995 1994 1993 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
United States $ 9,175 $8,351 $6,635 $168,878 $152,151 $145,390
Europe 1,063 673 360 45,167 22,464 14,257
Other areas of the world 725 595 307 14,164 11,439 6,954
Intercompany eliminations 9 5 (23) (174) (183) (188)
------- ------ ------ -------- -------- --------
Total $10,972 $9,624 $7,279 $228,035 $185,871 $166,413
======= ====== ====== ======== ======== ========
- -------------------------------------------------------------------------------------------------------
</TABLE>
29. ADDITIONAL INFORMATION ABOUT FINANCIAL INSTRUMENTS
This note contains estimated fair values of certain financial instruments to
which GE and GECS are parties. Apart from GE's and GECS' own borrowings and
certain marketable securities, relatively few of these instruments are
actively traded. Thus, fair values must often be determined by using one or
more models that indicate value based on estimates of quantifiable
characteristics as of a particular date. Because this undertaking is, by its
nature, difficult and highly judgmental, for a limited number of
instruments, alternative valuation techniques may have produced disclosed
values different from those that could have been realized at December 31,
1995 or 1994. Moreover, the disclosed values are representative of fair
values only as of the dates indicated. Assets that, as a matter of
accounting policy, are reflected in the accompanying financial statements at
fair value are not included in the following disclosures; such assets
include cash and equivalents and investment securities.
Values are estimated as follows:
BORROWINGS. Based on quoted market prices or market comparables. Fair values
of interest rate and currency swaps on borrowings are based on quoted market
prices and include the effects of counterparty creditworthiness.
TIME SALES AND LOANS. Based on quoted market prices, recent transactions
and/or discounted future cash flows, using rates at which similar loans
would have been made to similar borrowers.
ANNUITY BENEFITS. Based on expected future cash flows, discounted at
currently offered discount rates for immediate annuity contracts or cash
surrender values for single premium deferred annuities.
FINANCIAL GUARANTIES. Based on future cash flows, considering expected
renewal premiums, claims, refunds and servicing costs, discounted at a
market rate.
ALL OTHER INSTRUMENTS. Based on comparable transactions, market comparables,
discounted future cash flows, quoted market prices, and/or estimates of the
cost to terminate or otherwise settle obligations to counterparties.
<PAGE>
F-39
Annual Report Page No. 63
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
FINANCIAL INSTRUMENTS 1995 1994
--------------------------------------- -----------------------------------------
Assets (liabilities) Assets (liabilities)
----------------------------- ----------------------
Estimated Estimated
Carrying fair value Carrying fair value
Notional amount ------------------ Notional amount ---------------------
At December 31 (In millions) amount (net) High Low amount (net) High Low
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GE
Investments $ <F1> $ 1,796 $ 2,886 $ 2,886 $ <F1> $ 2,128 $ 2,289 $ 2,269
Borrowings and related instruments
Borrowings <F2><F3> <F1> (3,943) (3,981) (3,981) <F1> (3,605) (3,530) (3,530)
Interest rate swaps 89 - (16) (16) 89 - 2 2
Currency swaps 180 - 50 50 393 - 26 26
Financial guaranties 1,722 - - - 1,520 - - -
Other firm commitments
Currency forwards and options 3,774 - 131 131 3,195 - - -
Financing commitments 1,505 - - - 1,153 - - -
GECS
Assets
Time sales and loans <F1> 57,817 59,188 58,299 <F1> 48,529 49,496 48,840
Integrated interest rate swaps 1,703 - (93) (93) 1,183 - 64 64
Purchased options 1,213 24 11 11 103 2 2 2
Mortgage-related positions
Mortgage purchase commitments 1,360 - 17 17 205 - (2) (2)
Mortgage sale commitments 1,334 - (11) (11) 1,792 - 2 2
Memo: mortgages held for sale <F4> <F1> 1,663 1,663 1,663 <F1> 1,764 1,764 1,764
Options, including "floors" 18,522 67 144 144 - - - -
Interest rate swaps 1,990 - 31 31 950 - (127) (127)
Other cash financial instruments <F1> 1,514 1,967 1,705 <F1> 1,897 2,026 1,924
Liabilities
Borrowings and related instruments
Borrowings <F2><F3> <F1> (111,598) (113,105) (113,105) <F1> (91,399) (89,797) (89,797)
Interest rate swaps 43,681 - (630) (630) 21,996 - 198 195
Currency swaps 22,342 - 937 937 11,695 - 86 86
Purchased options 2,751 26 12 11 130 12 11 12
Other 515 - (65) (65) - - - -
Annuity benefits <F1> (11,994) (11,728) (11,728) <F1> (13,186) (12,788) (12,788)
Insurance - financial guaranties
and credit life 144,036 (1,570) (832) (922) 132,623 (1,562) (663) (806)
Credit and liquidity support
- securitizations 7,035 (58) (65) (65) 5,808 (22) (22) (22)
Performance guaranties - principally
letters of credit 2,920 (48) (78) (78) 2,227 (18) (98) (101)
Other - principally liquidity
commitments 3,556 1 (36) (45) 3,166 - 42 38
Other firm commitments
Currency forwards and options 7,657 - 69 69 3,372 - 12 12
Currency swaps 280 - (22) (22) 488 - (3) (3)
Ordinary course of business
lending commitments 6,929 - (60) (60) 6,687 - (50) (50)
Unused revolving credit lines
Commercial 3,223 - - - 2,580 - - -
Consumer - principally credit cards 118,710 - - - 101,582 - - -
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> Not applicable.
<F2> Includes interest rate and currency swaps.
<F3> See note 18.
<F4> Included in other cash financial instruments.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Additional information about certain financial instruments in the above
table follows.
CURRENCY FORWARDS AND OPTIONS are employed by GE and GECS to manage
exposures to changes in currency exchange rates associated with commercial
purchase and sale transactions. These financial instruments generally are
used to fix the local currency cost of purchased goods or services or
selling prices denominated in currencies other than the functional currency.
Currency exposures that result from net investments in affiliates are
managed principally by funding assets denominated in local currency with
debt denominated in those same currencies. In certain circumstances, net
investment exposures are managed using currency forwards and currency swaps.
OPTIONS OTHER THAN CURRENCY OPTIONS. GECS is exposed to prepayment risk in
certain of its business activities, such as in its mortgage servicing and
<PAGE>
F-40
Annual Report Page No. 64
annuities activities. In order to hedge those exposures, GECS uses one-sided
financial instruments containing option features. These instruments
generally behave based on limits ("caps," "floors" or "collars") on interest
rate movement.
INTEREST RATE AND CURRENCY SWAPS are used by both GE and GECS to optimize
borrowing costs for a particular funding strategy (see note 18) and by GECS
to establish specific hedges of mortgage-related assets and to manage net
investment exposures. Such swaps are evaluated by management under the
credit criteria set forth below. In addition, as part of its ongoing
customer activities, GECS may enter into swaps that are integrated with
investments in or loans to particular customers and do not involve
assumption of third-party credit risk. Such integrated swaps are evaluated
and monitored like their associated investments or loans, and are not
therefore subject to the same credit criteria that would apply to a stand-
alone swap.
COUNTERPARTY CREDIT RISK. Given the ways in which GE and GECS each use
swaps, purchased options and forwards, the principal risk is credit risk -
risk that counterparties will be financially unable to make payments in
accordance with the agreements. Associated market risk is meaningful only as
it relates to how changes in market value affect credit exposure to
individual counterparties. Except as noted above for positions that are
integrated into financings, all swaps, purchased options and forwards are
carried out within the following credit policy constraints:
* Once a counterparty exceeds credit exposure limits (see table below),
no additional transactions are permitted until the exposure with that
counterparty is reduced to an amount that is within the established limit.
Open contracts remain in force.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
COUNTERPARTY CREDIT CRITERIA Credit rating
--------------------------------
Moody's Standard & Poor's
- --------------------------------------------------------------------------
<S> <C> <C>
Term of transaction
Between one and five years Aa3 AA-
Greater than five years Aaa AAA
Credit exposure limits
Up to $50 million Aa3 AA-
Up to $75 million Aaa AAA
- --------------------------------------------------------------------------
</TABLE>
* All swaps are executed under master swap agreements containing mutual
credit downgrade provisions that provide the ability to require assignment or
termination in the event either party is downgraded below A3 or A-.
More credit latitude is permitted for transactions having original
maturities shorter than one year because of their lower risk.
30. QUARTERLY INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
First quarter Second quarter Third quarter Fourth quarter
(Dollar amounts in millions; ----------------- ------------------ ----------------- -----------------
per-share amounts in dollars) 1995 1994 1995 1994 1995 1994 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED OPERATIONS
Earnings from continuing operations $1,372 $1,219 $ 1,726 $1,554 $1,610 $1,457 $ 1,865 $ 1,685
Losses from discontinued operations - (151) - (32) - (89) - (49)
Provision for loss on discontinued securities
broker-dealer operations - - - - - - - (868)
------ ------ ------- ------ ------ ------ ------- -------
Net earnings $1,372 $1,068 $ 1,726 $1,522 $1,610 $1,368 $ 1,865 $ 768
====== ====== ======= ====== ====== ====== ======= =======
Per share
Earnings from continuing operations $ 0.81 $ 0.71 $ 1.02 $ 0.91 $ 0.96 $ 0.85 $ 1.12 $ 0.99
Losses from discontinued operations - (0.09) - (0.02) - (0.05) - (0.54)
------ ------ ------- ------ ------ ------ ------- -------
Net earnings $ 0.81 $ 0.62 $ 1.02 $ 0.89 $ 0.96 $ 0.80 $ 1.12 $ 0.45
====== ====== ======= ====== ====== ====== ======= =======
SELECTED DATA
GE
Sales of goods and services $9,278 $8,264 $11,237 $10,038 $10,106 $9,384 $12,392 $11,944
Gross profit from sales 2,567 2,282 3,219 2,743 2,794 2,441 3,340 3,115
GECS
Revenues from operations 5,754 4,393 6,415 4,730 7,099 5,097 7,224 5,655
Operating profit 826 668 818 684 1,048 857 828 740
- ---------------------------------------------------------------------------------------------------------------------------------
For GE, gross profit from sales is sales of goods and services less
costs of goods and services sold. For GECS, operating profit is income before
taxes.
First-quarter 1994 discontinued operations included a $210 million ($350
million before tax) charge resulting from the discovery of false trading
profits created by the then head U.S. government securities trader in the
discontinued securities broker-dealer. Approximately $143 million ($238
million before tax) of the charge related to periods prior to 1994.
Earnings-per-share amounts for each quarter are required to be computed
independently and, as a result, their sums do not equal the total year
earnings-per-share amounts.
<PAGE>
F-41
GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
</TABLE>
<TABLE>
<CAPTION>
(Amounts in millions)
GE allowance for losses
deducted from assets
-----------------------
Accounts
and notes
receivable Investments
---------- -----------
<S> <C> <C>
Balance, January 1, 1993 $196 $ 57
Provisions charged to operations 51 57
Write-offs (49) (5)
---- ----
Balance, December 31, 1993 198 <F1> 109
Provisions charged to operations 55 11
Write-offs (10) (56)
---- ----
Balance, December 31, 1994 $243 <F1> $64
Provisions charged to operations 57 27
Write-offs (39) (3)
---- ----
Balance, December 31, 1995 $261 <F1> $ 88
==== ====
_____________________________________
<FN>
<F1> The year-end balance is segregated on the Statement of Financial Position as
follows:
</TABLE>
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Current receivables $231 $205 $170
All other assets (long-term receivables,
customer financing, etc.) 30 38 28
---- ---- ----
$261 $243 $198
==== ==== ====
<FN>
Reference is made to note 8 in Notes to Consolidated Financial Statements
appearing in the 1995 Annual Report to Share Owners, which contains information with
respect to GECS allowance for losses on financing receivables for 1995, 1994 and
1993.
</TABLE>
<PAGE>
F-42
Appendix
Differences between the Circulated
Material and the Material
in Electronic Format
The financial information included on pages F-0 through F-00 represents
the financial information that appears in the 1995 General Electric Annual
Report to Share Owners. That information was prepared on typesetting
software for purposes of printing the Annual Report. The typesetting
format was then converted electronically into a word processing format that
can be accepted by the EDGAR system. Certain minor differences of
graphics, layout and appearance, as set forth below, exist between the
information as it is presented here and as it is presented in the Annual
Report to Share Owners.
1. The Annual Report is printed on cream-colored colored recycled paper
in a two column per page layout.
2. For ease of reference, Annual Report page numbers have been retained
and are indicated in the upper left hand corner of the pages in electronic
format as "Annual Report page ---." The designation does not appear in the
circulated Annual Report where page numbers are indicated by arabic
numerals at the bottom of each page.
3. On page F-1 (Annual Report page 00) the parenthetical "(Annual
Report Pages)" was added to the electronic format for the sake of clarity,
and these words do not appear in the circulated Annual Report.
4. Pages 26-27, 28-29, and 30-31 of the Annual Report are "spreads,"
with the page on the left representing line-by-line account descriptions
and numbered columns for General Electric Company and consolidated
affiliates, and with the page on the right continuing with numbered columns
for GE and GECS. For ease of reading in this electronic filing, line-by-
line descriptions have been repeated on the equivalent right side pages,
i.e., F-3, F-5 and F-7.
5. On pages F-1, F-9, F-13, F-14, F-15, F-16, F-17 and F-18 (Annual
Report pages 25, 32, 33, 37, 38, 39, 40, 41 and 42) of the electronic
format the word "Chart:" appears in a number of instances toward the left
hand margin next to a description of the chart. This formulation indicates
that in the circulated Annual Report there appears a colored bar graph at
these locations. The numbers that are presented at these places in the
electronic format represent the plot points that were used to construct the
bar graphs.
6. Many headings in the circulated Annual Report are in bold face or in
enlarged type or type of a special style. These have been converted to
block capitals in the electronic format. The numbers of the Notes to
Consolidated Financial Statements appear as large contrasting red numerals
on grey tint blocks in the circulated Annual Report.
7. The solid black bullet character that is used in the circulated
Annual Report has been replaced by an asterisk in the electronic format.
8. On Annual Report page 44 (F-20) there are facsimile signatures of
Messrs. Welch and Dammerman of GE in the circulated version.
9. The Accountants' Report (KPMG Peat Marwick LLP) on page F-20 of this
10-K Report refers specifically to this Report on Form 10-K, including one
financial statement schedule included herein. KPMG Peat Marwick LLP's
Report appearing in the circulated Annual Report to Share Owners on page
44, signed by facsimile, does not refer to the schedule identified solely
with the 10-K.
Exhibit 10(t)
GENERAL ELECTRIC COMPANY
1995 EXECUTIVE OFFICER DEFERRED SALARY PLAN
I. ELIGIBILITY
-----------
To maximize the ability of General Electric Company ("Company") to
obtain a federal tax deduction for compensation to be paid to its Executive
Officers in 1995, each Executive Officer of the Company who is expected to
be paid more than $1 million in base salary compensation in 1995 shall be
eligible to participate in this Plan.
II. DEFERRAL OF SALARY
------------------
1. Each Executive Officer eligible to participate in this
Plan ("Participant") shall be given an opportunity to
irrevocably elect, prior to any deferral hereunder:
(a) the portion (minimum of 10%, maximum of 100%) of the
Participant's 1995 base salary to be deferred, and
(b) the form of payout alternative as set forth in
Section V.
2. Commencing with base salary earned for January 1995, the
Participant's total base salary elected to be deferred under
this Plan will be deferred in ratable installments through the
month of December 1995, and will be credited to the
Participant's deferred salary cash account ("Deferred Account")
as of the end of the month of deferral ("Deferral Date").
III. SPECIAL ONE-TIME MATCHING MAKE-UP CREDIT
----------------------------------------
As of December 31, 1995, a special one-time credit shall
be made to the Deferred Account of each Participant who is
actively employed by the Company on such date to make up for
the matching Company payment that would otherwise have been
available under the Company's Savings and Security Program.
The amount of such credit shall equal 3.5% of the total 1995
base salary deferred under this Plan by the Participant
(excluding interest). Such credit shall not be provided for
any Participant who has terminated employment with the Company
for any reason prior to December 31, 1995, or is not actively
employed on such date.
IV. MANNER OF ACCOUNTING
--------------------
1. Each Deferred Account shall be unfunded, unsecured and
nonassignable, and shall not be a trust for the benefit of any
Participant.
2. Except as may be otherwise provided in Section V or VIII,
the Participant's Deferred Account will be credited with (a)
the amount of base salary deferred on each Deferral Date as set
forth in Section II. 2., the special one-time matching make-up
credit as set forth in Section III, and (c) interest at the
annual rate of 14% compounded annually on each December 31.
V. PAYMENT OF DEFERRED ACCOUNT
---------------------------
1. Payment of a Participant's Deferred Account will be made
only after termination of employment of the Participant.
2. If no manner of payment election is made, the Deferred
Account will be paid in 10 annual installments commencing on
March 1 (or as soon thereafter as practical) following the year
of termination of employment.
3. At the time of election to defer base salary, a
Participant may irrevocably elect: (a) the number of annual
payout installments (minimum of 10, maximum of 20) of the
Deferred Account commencing on March 1 (or as soon thereafter
as practical) following the year of termination of employment,
unless (b) a lump sum payment of the Deferred Account is
elected in which case the lump sum payment will be made on
March 1 (or as soon thereafter as practical) following the year
of termination of employment.
4. Participants who terminate their employment on or after
December 31, 1995 because of retirement, death or disability,
or Participants who terminate their employment on or after
December 31, 1999 for any reason, will receive payouts based on
Deferred Account accumulations at the 14% interest rate.
Payments will be made pursuant to Section V.2 or V.3 above
beginning on March 1 (or as soon thereafter as practical)
following the year of termination of employment.
5. Unless waived by the Management Development and
Compensation Committee of the Board of Directors ("MDCC"), if
the Participant terminates employment prior to December 31,
1995 for any reason, or prior to December 31, 1999 for any
reason other than retirement, death, or disability, the
Participant's Deferred Account will be paid in a lump sum as
soon as practical following the date of termination, along with
simple interest credited at an annual rate of 3% rather than
the rate specified in Section IV.
VI. DEATH BENEFITS
--------------
In the event of a Participant's death prior to receiving any or all
payments to which the Participant is entitled, the remaining Deferred
Account shall be paid at the time and in the manner provided in Section V
to the beneficiary or beneficiaries designated by the Participant on a
beneficiary designation form properly file by the Participant with the
Company in accordance with established administrative procedures. If no
such designated beneficiary survives the Participant, such remaining
benefits shall be paid as set forth above to the Participant's estate.
VII. ADMINISTRATION AND INTERPRETATION
---------------------------------
This Plan shall be administered by the MDCC, which shall have full
power and authority on behalf of the Company to administer and interpret
the Plan in its sole discretion. All MDCC decisions with respect to the
administration and interpretation of the Plan shall be final and binding
upon all persons.
VIII. AMENDMENT OF THE PLAN
---------------------
This Plan may be amended, suspended or terminated at any time by the
MDCC. In addition, the MDCC may alter or amend the payout schedule of any
or all of the accrued benefits of a Participant at any time.
IX. EFFECTIVE DATE
--------------
The effective date of this Plan shall be January 1, 1995.
<PAGE>
1
Exhibit 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
(Dollars in millions, shares in thousands, Fully
earnings per share in dollars) Earnings Primary diluted
per common earnings earnings
share per share per share
---------- --------- ---------
<S> <C> <C> <C>
1995
----
Net earnings applicable to common stock $ 6,573 $ 6,573 $ 6,573
Dividend equivalents (net of tax)
applicable to deferred incentive
compensation shares - 9 9
------- ------- -------
Earnings for per-share calculations $ 6,573 $ 6,582 $ 6,582
------- ------- -------
Average number of shares outstanding 1,683,812 1,683,812 1,683,812
Average number of deferred incentive
compensation shares - 8,188 8,188
Average stock option shares - 13,572 19,759
Average number of restricted stock units - 1,303 1,574
------- ------- -------
Shares for earnings calculation 1,683,812 1,706,875 1,713,333
------- ------- -------
Earnings per share $3.90 $3.86 $3.84
- ------------------ ===== ===== =====
1994
----
Net earnings applicable to common stock $ 4,726 $ 4,726 $ 4,726
Dividend equivalents (net of tax)
applicable to deferred incentive
compensation shares - 8 8
------- ------- -------
Earnings for per-share calculations $ 4,726 $ 4,734 $ 4,734
------- ------- -------
Average number of shares outstanding 1,708,738 1,708,738 1,708,738
Average number of deferred incentive
compensation shares - 8,555 8,555
Average stock option shares - 9,605 10,452
Average number of restricted stock units - 1,126 1,163
------- ------- -------
Shares for earnings calculation 1,708,738 1,728,024 1,728,908
------- ------- -------
Earnings per share $2.77 $2.74 $2.74
- ------------------ ===== ===== =====
<FN>
Data have been adjusted to reflect 2-for-1 stock split in April 1994.
</TABLE>
<PAGE>
2
<TABLE>
<CAPTION>
(Dollars in millions, shares in thousands, Fully
earnings per share in dollars) Earnings Primary diluted
per common earnings earnings
share per share per share
---------- --------- ---------
<S> <C> <C> <C>
1993
----
Net earnings applicable to common stock $ 4,315 $ 4,315 $ 4,315
Dividend equivalents (net of tax)
applicable to deferred incentive
compensation shares - 7 7
------- ------- -------
Earnings for per-share calculations $ 4,315 $ 4,322 $ 4,322
------- ------- -------
Average number of shares outstanding 1,707,979 1,707,979 1,707,979
Average number of deferred incentive
compensation shares - 8,507 8,507
Average stock option shares - 9,234 12,048
------- ------- -------
Shares for earnings calculation 1,707,979 1,725,720 1,728,534
------- ------- -------
Earnings per share $2.52 <F1> $2.50 $2.50
- ------------------ ===== ===== =====
<FN>
Data have been adjusted to reflect 2-for-1 stock split in April 1994.
<F1> Rounded to $2.52 as a result of the 2-for-1 stock split in April 1994.
</TABLE>
<PAGE>
<TABLE>
Exhibit 12
GENERAL ELECTRIC COMPANY
RATIO OF EARNINGS TO FIXED CHARGES
<CAPTION>
Year ended December 31
(Dollars in millions) -----------------------------------------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
GE except GECS
- --------------
"Earnings" <F1> $ 5,329 $ 5,582 $ 5,511 $ 7,828 $ 8,696
Less: Equity in undistributed earnings
of General Electric Capital
Services, Inc. <F2> (871) (831) (957) (1,181) (1,324)
Plus: Interest and other financial
charges included in expense 893 768 525 410 649
One-third of rental expense <F3> 225 228 212 171 174
------- ------- ------- ------- -------
Adjusted "earnings" $ 5,576 $ 5,747 $ 5,291 $ 7,228 $8,195
======= ======= ======= ======= =======
Fixed Charges:
Interest and other financial charges $ 893 $ 768 $ 525 $ 410 $ 649
Interest capitalized 33 29 21 21 13
One-third of rental expense <F3> 225 228 212 171 174
------- ------- ------- ------- -------
Total fixed charges $ 1,151 $ 1,025 $ 758 $ 602 $ 836
======= ======= ======= ======= =======
Ratio of earnings to fixed charges 4.84 5.61 6.98 12.01 9.80
======= ======= ======= ======= =======
General Electric Company and consolidated
affiliates
- -----------------------------------------
"Earnings" <F1> $ 5,679 $ 6,026 $ 6,287 $ 8,831 $ 9,941
Plus: Interest and other financial
charges included in expense 5,270 4,512 4,096 4,994 7,336
One-third of rental expense <F3> 261 320 349 327 349
------- ------- ------- ------- -------
Adjusted "earnings" $11,210 $10,858 $10,732 $14,152 $17,626
======= ======= ======= ======= =======
Fixed Charges:
Interest and other financial charges $ 5,270 $ 4,512 $ 4,096 $ 4,994 $ 7,336
Interest capitalized 41 35 26 30 34
One-third of rental expense <F3> 261 320 349 327 349
------- ------- ------- ------- -------
Total fixed charges $ 5,572 $ 4,867 $ 4,471 $ 5,351 $ 7,719
======= ======= ======= ======= =======
Ratio of earnings to fixed charges 2.01 2.23 2.40 2.64 2.28
======= ======= ======= ======= =======
<FN>
<F1> Earnings for all years consist of earnings from continuing operations before income taxes and
minority interest. For 1991 and 1993, earnings are before cumulative effects of changes in
accounting principle.
<F2> Earnings for all years consist of earnings from continuing operations after income taxes, net of
dividends. For 1991, earnings are before cumulative effect of change in accounting principle.
<F3> Considered to be representative of interest factor in rental expense.
</TABLE>
<PAGE>
Exhibit 21
Subsidiaries of Registrant
General Electric's principal affiliates as of December 31, 1995,
are listed below. All other affiliates, if considered in the aggregate
as a single affiliate, would not constitute a significant affiliate.
Affiliates of Registrant included in Registrant's Financial Statements.
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Percentage of
voting securities State or
owned by the country of
immediate incorporation or
parent (1) organization
----------------- ----------------
<S> <C> <C>
Caribe General Electric Products, Inc. 100 Delaware
General Electric Canadian Holdings Limited 100 Canada
General Electric Capital Services, Inc. 100 Delaware
General Electric Capital Corporation 100 New York
Global Insurance Holding Corporation 100 Missouri
General Electric Plastics B.V. 100 Netherlands
General Electric International, Inc. 100 Delaware
GE Petrochemicals Inc. 100 Delaware
National Broadcasting Company, Inc. 100 Delaware
Nuovo Pignone SpA 81 Italy
GE Yokogawa Medical Systems, Ltd. 75 Japan
<FN>
Notes
(1) With respect to certain companies, shares in names of nominees and
qualifying shares in names of directors are included in above
percentages.
</TABLE>
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
General Electric Company:
We consent to incorporation by reference in the registration statements
Nos. 33-29024, 33-3908, 2-82072, 33-37106, 33-35922, 33-44593, 33-39596, 33-
39596-01, 33-47181, 33-47085, 33-50639, 33-61029 and 33-61029-01 on Form S-
3 and Nos. 33-4239, 33-23441, 33-24679, 2-84145, 33-47500 and 33-49053 on
Form S-8 of General Electric Company of our report dated February 9, 1996,
relating to the consolidated statement of financial position of General
Electric Company and consolidated affiliates as of December 31, 1995 and
1994, and the related consolidated statements of earnings, and cash flows
for each of the years in the three-year period ended December 31, 1995, and
the related schedule, which report appears in the December 31, 1995, annual
report on Form 10-K of General Electric Company. Our report refers to
changes in 1993 in the Company's method of accounting for postemployment
benefits.
KPMG Peat Marwick LLP
Stamford, Connecticut
March 20, 1996
<PAGE>
1
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned,
being a director or officer of General Electric Company, a New York
corporation (the "Company"), hereby constitutes and appoints John F.
Welch, Jr., Benjamin W. Heineman, Jr., Dennis D. Dammerman, and Philip
D. Ameen and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him
or her and in his or her name, place and stead in any and all
capacities, to sign one or more Annual Reports for the Company's fiscal
year ended December 31, 1995, on Form 10-K under the Securities Exchange
Act of 1934, as amended, or such other form as any such attorney-in-fact
may deem necessary or desirable, any amendments thereto, and all
additional amendments thereto, each in such form as they or any one of
them may approve, and to file the same with all exhibits thereto and
other documents in connection therewith with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done so that such Annual Report
shall comply with the Securities Exchange Act of 1934, as amended, and
the applicable Rules and Regulations adopted or issued pursuant thereto,
as fully and to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or any of them or their substitute or resubstitute, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his
or her hand this 15th day of March, 1996.
/s/ John F. Welch, Jr. /s/ Dennis D. Dammerman
Chairman of the Board Senior Vice President -
(Principal Executive Finance (Principal
Officer and Director) Financial Officer and
Director)
/s/ Philip D. Ameen
Vice President and Comptroller
(Principal Accounting Officer)
<PAGE>
2
/s/ D. Wayne Calloway /s/ John D. Opie
Director Director
/s/ Silas S. Cathcart /s/ Barbara S. Preiskel
Director Director
/s/ Paolo Fresco /s/ Andrew C. Sigler
Director Director
/s/ Claudio X. Gonzalez /s/ Douglas A. Warner III
Director Director
/s/ Robert E. Mercer
Director
/s/ Gertrude G. Michelson
Director
A MAJORITY OF THE BOARD OF DIRECTORS
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements for the period ended December 31, 1995,
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> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 2,823
<SECURITIES> 41,067
<RECEIVABLES> 6,582
<ALLOWANCES> 231
<INVENTORY> 4,395
<CURRENT-ASSETS> 0<F1>
<PP&E> 45,946
<DEPRECIATION> 20,267
<TOTAL-ASSETS> 228,035
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 51,027
0
0
<COMMON> 594
<OTHER-SE> 29,015
<TOTAL-LIABILITY-AND-EQUITY> 228,035
<SALES> 33,157
<TOTAL-REVENUES> 42,890<F2>
<CGS> 24,288
<TOTAL-COSTS> 30,970<F3>
<OTHER-EXPENSES> 15,429
<LOSS-PROVISION> 57
<INTEREST-EXPENSE> 7,286
<INCOME-PRETAX> 9,737
<INCOME-TAX> 3,164
<INCOME-CONTINUING> 6,573
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,573
<EPS-PRIMARY> 3.86
<EPS-DILUTED> 3.84
<FN>
<F1>Not applicable to consolidated GE.
<F2>GE sales of goods ($33,157) and services ($9,733).
<F3>GE costs of goods ($24,288) and services ($6,682) sold.
</FN>
</TABLE>
