1. The accompanying condensed quarterly financial statements represent the consolidation of General Electric Company and all companies which it directly or indirectly controls, either through majority ownership or otherwise. Reference is made to note 1 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. That note discusses consolidation and financial statement presentation. As used in this Report and in the Report on Form 10-K, "GE" represents the adding together of all affiliated companies except General Electric Capital Services, Inc. ("GECS"), which is presented on a one-line basis; GECS consists of General Electric Capital Services, Inc. and all of its affiliates; and "consolidated" represents the adding together of GE and GECS with the effects of transactions between the two eliminated.

          2. The condensed consolidated quarterly financial statements are unaudited. These statements include all adjustments (consisting of normal recurring accruals) considered necessary by management to present a fair statement of the results of operations, financial position and cash flows. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year.

          3. A summary of changes in share owners' equity that do not result directly from transactions with share owners is provided below.

          4. The Financial Accounting Standards Board (FASB) issued, then subsequently amended, Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (Statement 133), effective for GE and GECS on January 1, 2001. Upon adoption, all derivative instruments (including certain derivative instruments embedded in other contracts) will be recognized in balance sheets at fair value, and changes in such fair values must be recognized in earnings unless specific hedging criteria are met. Changes in the values of derivatives meeting these hedging criteria will ultimately offset related earnings effects of the hedged items; effects of qualifying changes in fair value are recorded in equity pending recognition in earnings. Management has not determined the total probable effects on its financial statements of adopting Statement 133, as amended, and does not believe that an estimate of such effects would be meaningful at this time.

          5. Inventories consisted of the following:

         6. Property, plant and equipment (including equipment leased to others) - net, consisted of the following: 

         7. GE's authorized common stock consisted of 13,200,000,000 shares, having a par value of $0.06 each. Information related to the calculation of earnings per share follows.

         General Electric Company's earnings for the second quarter of 2000 were $3.378 billion, the highest for any quarter in the Company's history, an increase of 20% over the same period in 1999. Earnings per share increased 21% to $0.34, up from last year's $0.28. Both earnings per share and earnings were records for the quarter.

         Consolidated revenues rose to a record $32.9 billion, 20% higher than last year's quarter, reflecting continued growth from globalization and product services. GE's industrial businesses achieved revenue growth of 17% over the second quarter of 1999. Operating profit for all seven operating segments increased by double digits -- led by Power Systems, Technical Products and Services, Aircraft Engines, and NBC.

         GE's second-quarter operating margin was 20.4% of sales, up from last year's 19.3%, and a record for the quarter. The second-quarter margin growth reflects the increasing benefits from GE's focus on product services, Six Sigma quality and e-Business initiatives.

         GE Capital Services' second-quarter earnings rose to $1.277 billion, 17% over last year's $1.092 billion. These record results reflect the globalization and diversity of GE Capital's businesses, with strong double-digit increases in its Specialized Financing, Consumer Services and Mid-Market Financing activities.

         Cash generated from GE's operating activities during the first half was a record $5.9 billion, up 25% from last year's $4.7 billion. As part of the $22 billion share repurchase program, GE purchased $523 million of its stock during the second quarter to reach $16.5 billion -- 934 million shares -- purchased since December 1994.

         The comments that follow compare revenues and segment profit by operating segment for the second quarters of 2000 and 1999.

• Aircraft Engines revenues increased 4% over the second quarter of 1999, reflecting higher volume in military engines and continued growth in product services. Operating profit was 20% higher as productivity and volume growth more than offset higher costs.
   
• Appliances operating profit increased 10% on revenues that were 7% higher than last year. The increase in revenues was primarily attributable to higher volume, the result of both market share gains and industry growth, which more than offset declines in selling prices. The improvement in operating profit resulted from productivity and the increase in volume which more than offset lower selling prices and increased spending on new products.
   
• GE Capital Services second-quarter earnings rose to $1.277 billion, up 17% from last year's $1.092 billion, reflecting strong double-digit increases in its Specialized Financing, Consumer Services and Mid-Market Financing activities. The overall improvement in earnings was largely attributable to the effects of continued asset growth, principally from acquisitions of businesses and portfolios, and a higher level of asset gains.
   
• Industrial Products and Systems operating profit increased by 12% on revenues that were 5% higher than a year ago. The growth in revenues reflected volume increases across most businesses in the segment which more than offset lower selling prices. The improvement in operating profit was primarily attributable to productivity, partially offset by lower selling prices.
   
• NBC reported a 10% increase in revenues, reflecting growth across the business and particularly strong results in cable operations. Operating profit was 17% higher than a year ago primarily reflecting a strong marketplace, improved results in network operations, cable, and stations, which more than offset higher license fees associated with renewal of certain sports and prime-time programs.
   
• Plastics revenues were 16% higher than a year ago, primarily as a result of double-digit volume increases across all segments of the business. Operating profit increased by 11% as the growth in volume and higher selling prices were partially offset by higher raw material costs.
   
• Power Systems revenues increased 60%, reflecting sharply higher volume in gas turbines and continued growth in product services. Operating profit rose 46%, primarily as a result of the growth in volume and higher selling prices.
   
• Technical Products & Services revenues increased 17% from the second quarter of 1999, primarily as a result of growth at Medical Systems, which reported sharply higher equipment volume, including acquisitions, and continued growth in product services. Operating profit grew 26% in the second quarter, reflecting productivity and volume growth at Medical Systems, which more than offset lower results at Global Exchange Services.

B. Results of Operations – First Half of 2000 Compared With First Half of 1999

         Earnings for the six months ended June 30, 2000, were $5.970 billion, up 20% from $4.975 billion in 1999's first half. Earnings per share increased 18% to $0.59 from $0.50.

         Consolidated revenues for the first six months of 2000 aggregated $62.9 billion, up 22% from last year. GE's sales of goods and services were 19% higher, with improvements led by double-digit increases at Power Systems, Medical Systems, Plastics and NBC. Operating profit increased at all seven of GE's industrial operating segments; six segments had double-digit growth, led by Power Systems, Technical Products and Services, Industrial Products and Systems, and Aircraft Engines.

         Operating margin in the first half of 2000 was 18.9% of sales, compared with last year's 17.9%. The improvement in operating margin reflects the increasing benefits from GE's focus on product services, Six Sigma quality and e-Business initiatives.

Segment Analysis:

         The following comments compare revenues and segment profit by industry segment for the first half of 2000 with the same period of 1999.

• Aircraft Engines revenues increased 2% over the first half of 1999, reflecting volume growth in military engines and product services. Operating profit was 18% higher as productivity and the volume growth more than offset higher costs.
   
• Appliances revenues were 10% higher than in the first half of 1999, primarily as a result of volume growth, reflecting both market share gains and industry growth. Operating profit increased 2% as productivity and volume growth were largely offset by lower selling prices and increased spending on new products.
   
• GE Capital Services earnings for the first six months of 2000 rose to $2.487 billion, up 17% from last year's $2.124 billion, reflecting strong double-digit increases in Specialized Financing, Consumer Services, and Mid-Market Financing activities. The overall improvement in earnings was largely attributable to a higher level of asset gains and the effects of continued asset growth, principally from acquisitions of businesses and portfolios.
   
• Industrial Products and Systems revenues were 7% higher than a year ago, reflecting good volume increases across most businesses in the segment which more than offset lower selling prices. Operating profit increased 20% as strong productivity across the segment more than offset the effects of lower selling prices and higher costs.
   
• NBC reported a 17% increase in operating profit on revenues that were 13% higher than a year ago. The improvement in revenues and operating profit reflected growth in network operations, cable, and stations, with the effects on operating profit somewhat reduced by higher license fees associated with renewal of certain sports and prime-time programs.
   
• Plastics operating profit increased 11% on revenues that were 15% ahead of the first half of 1999. The increase in revenues resulted from good volume growth across all segments of the business. The increase in operating profit was primarily attributable to improved volume and higher selling prices, which were partially offset by higher raw material costs.
   
• Power Systems revenues increased 72%, reflecting sharply higher volume in gas turbines and continued growth in product services. Operating profit increased 70%, primarily as a result of the increase in volume coupled with higher selling prices.
   
• Technical Products & Services revenues increased 17% from the first half of 1999, principally as a result of sharply higher volume at Medical Systems, including the contribution of acquisitions. Operating profit grew 26% reflecting strong volume growth and productivity at Medical Systems which more than offset lower results at Global Exchange Services.

C. Financial Condition

         With respect to the Condensed Statement of Financial Position, consolidated assets of $424.0 billion at June 30, 2000, were $18.8 billion higher than at December 31, 1999.

         GE assets were $88.0 billion at June 30, 2000, an increase of $5.4 billion from December 31, 1999. The increase was primarily attributable to increases in cash ($1.7 billion) and all other assets ($1.5 billion). The change in all other assets resulted primarily from an increase in the prepaid pension asset.

         GECS assets increased by $16.2 billion from the end of 1999. The increase in assets was largely attributable to the acquisition of certain assets and liabilities of Toho Mutual Life Insurance of Japan (Toho), an entity that was insolvent. Under the terms of the acquisition, which was consummated in the first quarter, GECS acquired $13.2 billion in cash, as well as financing receivables and other assets in exchange for assuming Toho's existing insurance policyholder liabilities. The significant cash position of Toho at the date of acquisition reflected the liquidity needs of the business including policyholder redemptions that have occurred through June 30, 2000, and are expected to continue over the remainder of the six month period following the acquisition.

         GECS cash increased $3.6 billion, largely as a result of the addition of cash in connection with the Toho acquisition, partially offset by payments for policyholder redemptions and investment of funds at Toho. GE Capital's financing receivables, which, net of the allowance for losses, aggregated $143.4 billion at the end of the second quarter, increased $5.8 billion from year-end 1999. The increase resulted principally from the addition of financing receivables of Toho. Management believes that GE Capital's allowance for losses of $3.9 billion at June 30, 2000, is the best estimate of probable losses inherent in the portfolio given its strength and diversity and current economic circumstances. Other assets increased $3.6 billion, primarily reflecting growth in "separate accounts," which are investments controlled by policyholders, as well as acquired real estate ventures of Toho.

         Consolidated liabilities of $373.2 billion at June 30, 2000, were $15.8 billion higher than the year-end 1999 balance of $357.4 billion. GE liabilities increased $1.9 billion; GECS liabilities increased $16.0 billion.

         GE total borrowings were $2.0 billion ($1.3 billion short-term and $0.7 billion long-term) at June 30, 2000, a decrease of $1.0 billion from December 31, 1999. GE's ratio of debt to total capital at the end of June 2000 was 4.0% compared with 6.4% at the end of last year and 6.7% at June 30, 1999.

         GECS liabilities increased to $336.3 billion compared with $320.3 billion at the end of 1999. The increase was principally attributable to additions to insurance liabilities of $19.9 billion from year-end 1999, primarily the assumption of policyholder liabilities of Toho, as well as increases in separate accounts and additions to reserves related to core growth. Short-term borrowings decreased $7.9 billion from year-end 1999, while long-term borrowings increased by $6.1 billion.

         With respect to cash flows, consolidated cash and equivalents were $12.1 billion at June 30, 2000, an increase of $3.5 billion during the first half. Cash and equivalents were $5.1 billion at June 30, 1999, an increase of $0.8 billion during last year's first half.

         GE's cash and equivalents increased $1.7 billion during the first half of 2000 to $3.7 billion at June 30, 2000. Cash provided from operating activities was $5.9 billion during the first six months of 2000, compared with $4.7 billion in the first half of 1999, reflecting continuing improvements in earnings as well as higher progress collections and accounts payable during the period. Cash used for investing activities ($1.4 billion) principally resulted from business acquisitions and investments in new plant and equipment for a diverse number of projects to lower costs and improve efficiencies. Cash used for financing activities ($2.8 billion) included $1.1 billion for net reduction of debt, $1.1 billion for repurchases of the Company's common stock under the share repurchase program and $2.7 billion for dividends paid to share owners, a 17% increase in the per-share dividend rate compared with the first half of last year.

         GE's cash and equivalents increased $0.2 billion during the first half of 1999 to $1.3 billion at June 30, 1999. Cash provided from operating activities was $4.7 billion during the first six months of 1999, compared with $3.5 billion in the first half of 1998, reflecting continuing improvements in earnings and higher progress collections during the period. Cash used for investing activities ($1.0 billion) principally resulted from business acquisitions and investments in new plant and equipment for a diverse number of projects to lower costs and improve efficiencies. Cash used for financing activities ($3.5 billion) included $1.3 billion for net reduction of debt, $0.9 billion for repurchases of the Company's common stock under the share repurchase program and $2.3 billion for dividends paid to share owners, a 17% increase in the per-share dividend rate compared with the first half of 1998.

         GECS cash and equivalents increased by $3.6 billion during the first half of 2000 to $10.6 billion, principally as a result of cash acquired in connection with the Toho acquisition. Cash provided from operating activities was $0.8 billion during the first six months of 2000, compared with $6.9 billion during the first half of 1999. The decrease in cash from operating activities compared with last year was largely attributable to insurance policyholder redemptions associated with the Toho acquisition and a smaller decrease in mortgages held for resale. Cash from financing activities totaled $13.4 billion, primarily as a result of insurance policyholder liabilities assumed in the Toho acquisition, the effect of which was partially offset by net reductions in debt. The principal use of GECS cash during the period was for investing activities ($10.6 billion), a majority of which was attributable to investments in securities, financing receivables and property, plant and equipment.

         GECS cash and equivalents increased $0.8 billion during the first half of 1999. Cash was used primarily to fund additions to property, plant and equipment ($4.2 billion), principally equipment that is provided to third parties on operating leases; to fund additions to financing receivables ($5.6 billion); and to fund acquisitions of businesses ($6.0 billion). Cash provided from operating activities totaled $6.9 billion. Cash provided from financing activities resulted primarily from increased net borrowings ($9.3 billion) during the first six months of 1999.

Subsequent Event

         On July 12, 2000, Union Bank of Switzerland (UBS) and Paine Webber Group, Inc. (PaineWebber) announced that they had entered into a definitive merger agreement (the UBS merger agreement). GE Capital Services holds 31,523,600 shares of PaineWebber common stock and would realize a pretax gain of about $1.4 billion if the merger is completed under the terms of the UBS merger agreement. GE Capital Services has agreed with UBS to vote in favor of the merger. Fifty percent of the GE Capital Services holdings of PaineWebber securities is classified as trading securities; changes in the share price of those securities will be recognized in earnings prior to consummation. Thus, for example, an increase in the share price of PaineWebber from June 30, 2000, to the price in the UBS merger agreement would result in recognition of approximately $0.4 billion of the total pretax gain. The UBS merger agreement is subject to a number of conditions that are not within the control of GE, resolution of which will affect the amount and timing of proceeds, if any, realized from the transaction. At this time, management is unable to predict the outcome of these matters.

Part II. Other Information

Item 4. Submission of Matters to a Vote of Security Holders

Election of Directors

Item 6. Exhibits and Reports on Form 8-K