UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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| X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 25, 1999
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
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Commission file number 1-6461
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GENERAL ELECTRIC CAPITAL CORPORATION
------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 13-1500700
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
260 LONG RIDGE ROAD,
STAMFORD, CONNECTICUT 06927
(Address of principal executive offices) (Zip Code)
(203) 357-4000
(Registrant's telephone number, including area code)
------------------------------------
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 | |
At October 26, 1999, 3,837,825 shares of common stock with a par value of $200
were outstanding.
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b)
OF FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED DISCLOSURE
FORMAT.
<PAGE>
TABLE OF CONTENTS
PAGE
--------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements .............................. 1
Item 2. Management's Discussion and Analysis of Results
of Operations ..................................... 6
Exhibit 12. Computation of Ratio of Earnings to Fixed Charges
and Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends ....... 10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K .................. 11
Signatures ...................................................... 12
Index to Exhibits................................................ 13
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES
CONDENSED STATEMENT OF CURRENT AND RETAINED EARNINGS
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------- --------------------
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
25, 26, 25, 26,
(In millions) 1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES
Revenues from services ......................................... $ 9,401 $ 8,529 $ 27,119 $ 24,495
Sales of goods ................................................. 2,352 1,806 5,953 5,325
-------- -------- -------- --------
11,753 10,335 33,072 29,820
-------- -------- -------- --------
EXPENSES
Interest ....................................................... 2,189 2,076 6,342 6,129
Operating and administrative ................................... 3,398 2,817 9,573 8,167
Cost of goods sold ............................................. 2,124 1,681 5,441 4,891
Insurance losses and policyholder and annuity benefits ......... 1,419 1,418 4,156 4,127
Provision for losses on financing receivables .................. 225 304 1,044 1,044
Depreciation and amortization of buildings and
equipment and equipment on operating leases ................... 786 663 2,279 1,913
Minority interest in net earnings of consolidated affiliates ... 16 14 49 35
-------- -------- -------- --------
10,157 8,973 28,884 26,306
-------- -------- -------- --------
EARNINGS
Earnings before income taxes ................................... 1,596 1,362 4,188 3,514
Provision for income taxes ..................................... (435) (432) (1,090) (991)
-------- -------- -------- --------
NET EARNINGS ................................................... 1,161 930 3,098 2,523
Dividends ...................................................... (505) (341) (1,350) (867)
Retained earnings at beginning of period ....................... 15,432 12,928 14,340 11,861
-------- -------- -------- --------
RETAINED EARNINGS AT END OF PERIOD ............................. $ 16,088 $ 13,517 $ 16,088 $ 13,517
======== ======== ======== ========
</TABLE>
See Notes to Condensed, Consolidated Financial Statements.
1
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES
CONDENSED STATEMENT OF FINANCIAL POSITION
SEPTEMBER DECEMBER
25, 31,
(In millions) 1999 1998
-------- --------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and equivalents ................................................................... $ 4,676 $ 3,080
Investment securities .................................................................. 56,671 57,275
Financing receivables:
Time sales and loans, net of deferred income ......................................... 84,105 76,794
Investment in financing leases, net of deferred income ............................... 46,099 47,536
-------- --------
130,204 124,330
Allowance for losses on financing receivables ........................................ (3,429) (3,272)
-------- --------
Financing receivables - net ...................................................... 126,775 121,058
Other receivables - net ................................................................ 20,015 17,837
Inventories ............................................................................ 1,376 744
Equipment on operating leases (at cost), less accumulated amortization of
$7,700 and $7,021 ..................................................................... 22,226 20,941
Intangible assets ...................................................................... 12,762 12,033
Other assets ........................................................................... 42,281 36,082
-------- --------
TOTAL ASSETS ..................................................................... $286,782 $269,050
======== ========
LIABILITIES AND SHARE OWNER'S EQUITY
Short-term borrowings .................................................................. $112,722 $107,419
Long-term borrowings:
Senior ............................................................................... 63,663 57,486
Subordinated ......................................................................... 697 697
Insurance liabilities, reserves and annuity benefits ................................... 58,147 54,435
Other liabilities ...................................................................... 20,833 17,908
Deferred income taxes .................................................................. 7,366 8,899
-------- --------
Total liabilities ................................................................ 263,428 246,844
-------- --------
Minority interest in equity of consolidated affiliates ................................. 1,734 1,137
-------- --------
Accumulated unrealized gains (losses) on investment securities - net ................... (447) 1,167
Accumulated foreign currency translation adjustments ................................... (197) (141)
-------- --------
Accumulated non-owner changes in share owner's equity .................................. (644) 1,026
Capital stock .......................................................................... 771 770
Additional paid-in capital ............................................................. 5,405 4,933
Retained earnings ...................................................................... 16,088 14,340
-------- --------
Total share owner's equity ....................................................... 21,620 21,069
-------- --------
TOTAL LIABILITIES AND SHARE OWNER'S EQUITY ....................................... $286,782 $269,050
======== ========
</TABLE>
See Notes to Condensed, Consolidated Financial Statements.
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED
--------------------
SEPTEMBER SEPTEMBER
25, 26,
(In millions) 1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings ........................................................................... $ 3,098 $ 2,523
Adjustments to reconcile net earnings to cash provided from operating
activities:
Provision for losses on financing receivables ........................................ 1,044 1,044
Depreciation and amortization of buildings and equipment and equipment
on operating leases ................................................................. 2,279 1,913
Other - net .......................................................................... 4,585 2,749
-------- --------
Cash from operating activities ................................................... 11,006 8,229
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in loans to customers ......................................................... (66,557) (48,057)
Principal collections from customers - loans ........................................... 57,230 43,711
Investment in equipment for financing leases ........................................... (12,503) (13,886)
Principal collections from customers - financing leases ................................ 12,998 11,911
Net change in credit card receivables .................................................. 2,156 3,307
Buildings and equipment and equipment on operating leases:
- additions .......................................................................... (7,536) (4,010)
- dispositions ....................................................................... 4,399 2,021
Payments for principal businesses purchased, net of cash acquired ...................... (6,437) (8,294)
Purchases of securities by insurance and annuity businesses ............................ (12,609) (11,845)
Dispositions and maturities of securities by insurance and annuity businesses .......... 10,967 8,669
Other - net ............................................................................ (2,554) (4,868)
-------- --------
Cash used for investing activities ............................................... (20,446) (21,341)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in borrowings (maturities 90 days or less) .................................. (5,268) 5,718
Newly issued debt - short-term (maturities 91-365 days) ............................... 3,515 4,126
- long-term (longer than one year) .................................. 22,674 26,158
Proceeds - non-recourse, leveraged lease debt .......................................... 559 971
Repayments and other reductions:
- short-term (maturities 91-365 days) ............................... (8,205) (17,992)
- long-term (longer than one year) .................................. (1,302) (4,298)
Principal payments - non-recourse, leveraged lease debt ................................ (248) (333)
Proceeds from sales of investment contracts ............................................ 5,664 3,284
Redemption of investment contracts ..................................................... (5,403) (3,765)
Dividends paid ......................................................................... (1,350) (867)
Issuance of preferred stock in excess of par value ..................................... 300 70
Issuance of variable cumulative preferred stock by consolidated affiliate .............. 100 100
-------- --------
Cash from financing activities ................................................... 11,036 13,172
-------- --------
INCREASE IN CASH AND EQUIVALENTS ....................................................... 1,596 60
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD ............................................ 3,080 4,648
-------- --------
CASH AND EQUIVALENTS AT END OF PERIOD .................................................. $ 4,676 $ 4,708
======== ========
</TABLE>
See Notes to Condensed, Consolidated Financial Statements.
3
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (Continued)
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES
NOTES TO CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying condensed quarterly financial statements represent the
adding together of General Electric Capital Corporation and all
majority-owned and controlled affiliates (collectively called "the
Corporation" or "GECC"). All significant transactions among the parent
and consolidated affiliates have been eliminated. Certain prior period
data have been reclassified to conform to the current period
presentation.
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. In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities (the "Statement"). The
Statement requires that, upon adoption, all derivative instruments
(including certain derivative instruments embedded in other contracts) be
recognized in the balance sheet at fair value, and that changes in such
fair values be recognized in earnings unless specific hedging criteria
are met. Changes in the values of derivatives that meet these hedging
criteria will ultimately offset related earnings effects of the hedged
items; effects of certain changes in fair value are recorded in equity
pending recognition in earnings. In June 1999, the FASB delayed the
required effective date of the new standard to January 1, 2001. The
impact of adoption will be determined by several factors, including
the specific hedging instruments in place and their relationships to
hedged items, as well as market conditions. Management has not estimated
the effect of adoption as it believes that such determination will
not be meaningful until closer to the adoption date.
4. A summary of changes in share owner's equity that do not result directly
from transactions with share owners is provided below.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------
SEPTEMBER SEPTEMBER
25, 26,
(In millions) 1999 1998
-------- --------
<S> <C> <C>
Net earnings ........................................................................... $ 1,161 $ 930
Unrealized gains (losses) on investment securities - net ............................... (150) 130
Foreign currency translation adjustments ............................................... 6 26
-------- --------
Total ................................................................................ $ 1,017 $ 1,086
======== ========
NINE MONTHS ENDED
--------------------
SEPTEMBER SEPTEMBER
25, 26,
1999 1998
-------- --------
Net earnings ........................................................................... $ 3,098 $ 2,523
Unrealized gains (losses) on investment securities - net ............................... (1,614) 290
Foreign currency translation adjustments ............................................... (56) (7)
-------- --------
Total ................................................................................ $ 1,428 $ 2,806
======== ========
</TABLE>
4
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (Continued)
5. Revenues and net earnings of the Corporation, by operating segment, for
the three months and nine months ended September 25, 1999 and
September 26, 1998 were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------- --------------------
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
25, 26, 25, 26,
(IN MILLIONS) 1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES
Consumer Services .............................................. $ 4,850 $ 4,049 $ 12,920 $ 11,525
Equipment Management ........................................... 3,820 3,625 11,406 10,609
Mid-Market Financing ........................................... 1,164 988 3,319 2,630
Specialized Financing .......................................... 1,018 905 2,783 2,409
Specialty Insurance ............................................ 884 840 2,540 2,588
All other ...................................................... 17 (72) 104 59
-------- -------- -------- --------
Total revenues ............................................... $ 11,753 $ 10,335 $ 33,072 $ 29,820
======== ======== ======== ========
NET EARNINGS
Consumer Services .............................................. $ 397 $ 250 $ 820 $ 551
Equipment Management ........................................... 171 172 605 519
Mid-Market Financing ........................................... 167 132 413 330
Specialized Financing .......................................... 251 227 725 633
Specialty Insurance ............................................ 163 123 468 389
All other ...................................................... 12 26 67 101
-------- -------- -------- --------
Total net earnings ........................................... $ 1,161 $ 930 $ 3,098 $ 2,523
======== ======== ======== ========
</TABLE>
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
OVERVIEW
Net earnings for the first nine months of 1999 were $3,098 million, a $575
million (23%) increase over the first nine months of 1998. The results reflected
the globalization and diversity of the Corporation's businesses and were led by
double-digit increases in each of its five segments. The improvement in earnings
was largely attributable to the effects of continued asset growth, principally
from acquisitions of businesses and portfolios and higher origination volume.
OPERATING RESULTS
TOTAL REVENUES from all sources increased $3,252 million (11%) to $33,072
million for the first nine months of 1999, compared with $29,820 million for the
first nine months of 1998. This increase primarily reflected acquisition-related
growth in the Mid-Market Financing and Consumer Services segments and a
combination of core and acquisition growth in the Equipment Management and
Specialized Financing segments.
INTEREST EXPENSE for the first nine months of 1999 was $6,342 million, 3% higher
than for the first nine months of 1998. The increase reflected the effects of
higher average borrowings used to finance asset growth, partially offset by the
effects of lower average interest rates. The composite interest rate on the
Corporation's borrowings for the first nine months of 1999 was 5.13% compared
with 5.95% in the first nine months of 1998.
OPERATING AND ADMINISTRATIVE EXPENSES were $9,573 million for the first nine
months of 1999, a 17% increase over the first nine months of 1998. The increase
primarily reflected costs associated with businesses and portfolios acquired
over the past year, and higher investment levels.
COST OF GOODS SOLD is associated with activities of the Corporation's computer
equipment distribution and retail businesses. This cost amounted to $5,441
million for the first nine months of 1999, compared with $4,891 million for the
first nine months of 1998. The increase primarily reflected the consolidation of
the retail operations.
INSURANCE LOSSES AND POLICYHOLDER AND ANNUITY BENEFITS increased $29 million to
$4,156 million for the first nine months of 1999, compared with the first nine
months of 1998. The increase primarily reflected the effects of business
acquisitions and growth in premium volume throughout the period, partially
offset by improved market conditions in the mortgage insurance business.
PROVISION FOR LOSSES ON FINANCING RECEIVABLES remained constant at $1,044 for
the first nine months of 1999 compared to the first nine months of 1998. These
provisions principally related to credit cards, personal loans and auto loans
and auto leases in the Consumer Services segment, which are discussed below
under Portfolio Quality.
DEPRECIATION AND AMORTIZATION OF BUILDINGS AND EQUIPMENT AND EQUIPMENT ON
OPERATING LEASES increased $366 million to $2,279 million for the first nine
months of 1999 compared with $1,913 million for the first nine months of 1998.
The increase was principally the result of higher levels of equipment on
operating leases, primarily reflecting acquisition growth.
PROVISION FOR INCOME TAXES was $1,090 million for the first nine months of 1999
(an effective tax rate of 26.0%), compared with $991 million for the first nine
months of 1998 (an effective tax rate of 28.2%). The higher provision for income
taxes primarily reflected increased pre-tax earnings subject to statutory rates
partially offset by the lower effective tax rate caused by decreased taxes on
non-U.S. earnings.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS (Continued)
OPERATING SEGMENTS
Revenues and net earnings of the Corporation, by operating segment, for the nine
months ended September 25, 1999 and September 26, 1998 are summarized and
discussed below.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
--------------------
SEPTEMBER SEPTEMBER
25, 26,
(In millions) 1999 1998
-------- --------
<S> <C> <C>
REVENUES
Consumer Services ...................................................................... $ 12,920 $ 11,525
Equipment Management ................................................................... 11,406 10,609
Mid-Market Financing ................................................................... 3,319 2,630
Specialized Financing .................................................................. 2,783 2,409
Specialty Insurance .................................................................... 2,540 2,588
All other .............................................................................. 104 59
-------- --------
Total revenues ....................................................................... $ 33,072 $ 29,820
======== ========
NET EARNINGS
Consumer Services ...................................................................... $ 820 $ 551
Equipment Management ................................................................... 605 519
Mid-Market Financing ................................................................... 413 330
Specialized Financing .................................................................. 725 633
Specialty Insurance .................................................................... 468 389
All other .............................................................................. 67 101
-------- --------
Total net earnings ................................................................... $ 3,098 $ 2,523
======== ========
</TABLE>
Consumer Services revenues increased 12% and net earnings increased 49% for the
first nine months of 1999, compared to the first nine months of 1998. The
increase in revenues was led by acquisition-related and core growth in the
non-U.S. consumer finance business and the consumer savings and insurance
business, partially offset by the effects of asset reductions in U.S. consumer
credit card and automobile financing activities. The increase in net earnings
was led by a combination of acquisition-related and core growth in the non-U.S.
consumer finance activities.
Equipment Management revenues grew 8% and net earnings grew 17% for the first
nine months of 1999, compared to the corresponding period in 1998. The increase
in revenues and net earnings was primarily attributable to operational
improvements in the information technology products and services business,
acquisition-related growth in fleet services and structured sales of aircraft
and core growth in aviation services.
Mid-Market Financing revenues grew 26% and net earnings increased 25% for the
first nine months of 1999, compared to the corresponding period in 1998,
primarily as a result of acquisition-related growth.
Specialized Financing revenues rose 16% and net earnings increased 15% in the
first nine months of 1999, compared to the first nine months of 1998. The
increases in revenues and net earnings principally reflected asset growth as
well as the effects of asset gains, including securitizations.
Specialty Insurance revenues decreased 2% in the first nine months of 1999,
compared to the corresponding period in 1998, principally resulting from
decreased premium volume in the U.K. credit insurance business. Net earnings
increased 20% in the same period, primarily reflecting improved loss experience
in the mortgage insurance business.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS (Continued)
PORTFOLIO QUALITY
FINANCING RECEIVABLES are the financing businesses largest asset and their
primary source of revenues. The portfolio of financing receivables, before
allowance for losses, increased to $130.2 billion at September 25, 1999, from
$124.3 billion at the end of 1998, primarily reflecting the effects of higher
origination volume and acquisition growth, partially offset by foreign currency
translation on European financing receivables. The related allowances for losses
at September 25, 1999 amounted to $3.4 billion ($3.3 billion at the end of 1998)
and, in management's judgment, are appropriate given the risk profile of the
portfolio. A discussion about the quality of certain elements of the portfolio
of financing receivables follows. "Nonearning" receivables are those that are 90
days or more delinquent (or for which collection has otherwise become doubtful)
and "reduced-earning" receivables are commercial receivables whose terms have
been restructured to a below-market yield.
CONSUMER FINANCING RECEIVABLES, primarily credit card and personal loans and
auto loans and leases, were $49.0 billion at September 25, 1999, a decrease of
$2.6 billion from the end of 1998. Nonearning receivables were $0.9 billion at
September 25, 1999, 1.8% of total consumer financing receivables, compared with
$1.3 billion, 2.4% of total consumer receivables, at December 31, 1998.
Write-offs of consumer receivables decreased to $0.9 billion for the first nine
months of 1999, compared with $1.1 billion for the first nine months of 1998.
This decrease was primarily attributable to the effects of lower delinquencies
during the first nine months of 1999 as well as the effects of lower average
receivable balances resulting from securitization and other sales of portfolios.
OTHER FINANCING RECEIVABLES, totaling $81.2 billion at September 25, 1999 ($72.7
billion at December 31, 1998), consisted of a diverse commercial, industrial and
equipment loan and lease portfolio. Related nonearning and reduced-earning
receivables were less than 1% of total other financing receivables at September
25, 1999 and December 31, 1998.
As discussed in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998, Montgomery Ward Holding Corp. ("MWHC") filed a bankruptcy
petition for reorganization in 1997. On August 2, 1999, MWHC emerged from
bankruptcy under a plan of reorganization that was approved on July 15, 1999. As
part of the restructuring, the Corporation acquired the Signature group
("Signature"), which was not in bankruptcy, for cash, $285 million of which was
collected on loans to MWHC. The Corporation also acquired the equity of the
reorganized retailer, Montgomery Ward, LLC ("Wards"), in exchange for the
Corporation's remaining loans to MWHC. After these transactions, the
Corporation's net investment in Wards and MWHC was $327 million. The financial
condition at September 25, 1999, and the results of operations from August 2,
1999 to September 25, 1999, of Signature and Wards are included in the Consumer
Services segment, and the increases in Sales of Goods and Cost of Goods Sold for
the first nine months of 1999 as compared to the corresponding period in 1998
were substantially the result of the consolidation of Wards.
The Corporation held loans and leases to commercial airlines amounting to $10.8
billion at September 25, 1999, up from $10.2 billion at the end of 1998.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS (Continued)
OTHER MATTERS
YEAR 2000
As discussed in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998, the Corporation is applying a Six Sigma quality approach to
identify and mitigate Year 2000 issues in its information systems, products and
services, facilities and suppliers. Each business has a Year 2000 leader who
oversees a multi-functional project team responsible for remediation and
contingency planning, applying a Six Sigma quality approach in four phases: (1)
define/measure- identify and inventory possible sources of Year 2000 issues; (2)
analyze- determine the nature and extent of Year 2000 issues and develop project
plans to address those issues; (3) improve- execute project plans and perform a
majority of the testing; and (4) control- complete testing, continue monitoring
readiness and complete necessary contingency plans. As of the end of June 1999,
virtually all significant information systems, products and services,
facilities, and suppliers were in the control phase. As a final step in the
control phase, the Corporation has developed, tested and is prepared to
implement contingency plans to minimize disruption of critical business
processes. The specific actions identified in such contingency plans differ
depending on circumstances, but most often include manual work-arounds,
deployment of backup or secondary technologies, rearranging work schedules, and
substitution of suppliers, as appropriate. While management does not expect
significant disruptions of critical business processes caused by internal Year
2000 issues, the likelihood of externally-caused disruptions and the ability of
the contingency plans to minimize such externally-caused disruptions is not
determinable. The total estimate of Year 2000 expenditures, adjusted for
increases related to acquired companies, is in line with previous projections.
The activities related to Year 2000 efforts necessarily involve estimates and
projections of activities and resources that will be required in the future.
These estimates and projections could change as work progresses.
9
<PAGE>
EXHIBIT 12
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
NINE MONTHS ENDED SEPTEMBER 25, 1999
(Unaudited)
RATIO OF
EARNINGS
TO
COMBINED
FIXED
RATIO OF CHARGES
EARNINGS AND
TO PREFERRED
FIXED STOCK
(Dollar amounts in millions) CHARGES DIVIDENDS
-------- --------
<S> <C> <C>
Net earnings ........................................... $ 3,098 $ 3,098
Provision for income taxes ............................. 1,090 1,090
Minority interest in net earnings of consolidated
affiliates ............................................ 49 49
-------- --------
Earnings before provision for income taxes and
minority interest ..................................... 4,237 4,237
-------- --------
Fixed charges:
Interest ............................................. 6,504 6,504
One-third of rentals ................................. 249 249
-------- --------
Total fixed charges .................................... 6,753 6,753
-------- --------
Less interest capitalized, net of amortization ......... (64) (64)
-------- --------
Earnings before provision for income taxes and minority
interest, plus fixed charges .......................... $ 10,926 $ 10,926
======== ========
Ratio of earnings to fixed charges ..................... 1.62
========
Preferred stock dividend requirements .................. $ 82
Ratio of earnings before provision for income taxes
to net earnings ....................................... 1.35
--------
Preferred stock dividend factor on pre-tax basis ....... 111
Fixed charges .......................................... 6,753
--------
Total fixed charges and preferred stock dividend
requirements .......................................... $ 6,864
========
Ratio of earnings to combined fixed charges and
preferred stock dividends ............................. 1.59
========
</TABLE>
For purposes of computing the ratios, fixed charges consist of interest on all
indebtedness and one-third of rentals, which management believes is a reasonable
approximation of the interest factor of such rentals.
10
<PAGE>
PART II--OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. EXHIBITS.
Exhibit 12. Computation of ratio of earnings to fixed charges and
computation of ratio of earnings to combined fixed charges
and preferred stock dividends.
Exhibit 27. Financial Data Schedule (filed electronically only).
b. REPORTS ON FORM 8-K.
None.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENERAL ELECTRIC CAPITAL CORPORATION
(Registrant)
Date: October 26, 1999 By: /s/ J.A. Parke
---------------------------------
J.A. Parke,
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
Date: October 26, 1999 By: /s/ J.C. Amble
---------------------------------
J.C. Amble,
Vice President and Controller
(Principal Accounting Officer)
12
<PAGE>
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES
INDEX TO EXHIBITS
EXHIBIT NO. PAGE
- ----------- --------
12 Computation of ratio of earnings to fixed charges and
computation of ratio of earnings to combined fixed
charges and preferred stock dividends ................ 16
27 Financial Data Schedule (filed electronically only)
13
<PAGE>
<PAGE>
EXHIBIT 12
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
NINE MONTHS ENDED SEPTEMBER 25, 1999
(Unaudited)
RATIO OF
EARNINGS
TO
COMBINED
FIXED
RATIO OF CHARGES
EARNINGS AND
TO PREFERRED
FIXED STOCK
(Dollar amounts in millions) CHARGES DIVIDENDS
-------- --------
<S> <C> <C>
Net earnings ........................................... $ 3,098 $ 3,098
Provision for income taxes ............................. 1,090 1,090
Minority interest in net earnings of consolidated
affiliates ............................................ 49 49
-------- --------
Earnings before provision for income taxes and
minority interest ..................................... 4,237 4,237
-------- --------
Fixed charges:
Interest ............................................. 6,504 6,504
One-third of rentals ................................. 249 249
-------- --------
Total fixed charges .................................... 6,753 6,753
-------- --------
Less interest capitalized, net of amortization ......... (64) (64)
-------- --------
Earnings before provision for income taxes and minority
interest, plus fixed charges .......................... $ 10,926 $ 10,926
======== ========
Ratio of earnings to fixed charges ..................... 1.62
========
Preferred stock dividend requirements .................. $ 82
Ratio of earnings before provision for income taxes
to net earnings ....................................... 1.35
--------
Preferred stock dividend factor on pre-tax basis ....... 111
Fixed charges .......................................... 6,753
--------
Total fixed charges and preferred stock dividend
requirements .......................................... $ 6,864
========
Ratio of earnings to combined fixed charges and
preferred stock dividends ............................. 1.59
========
</TABLE>
For purposes of computing the ratios, fixed charges consist of interest on all
indebtedness and one-third of rentals, which management believes is a reasonable
approximation of the interest factor of such rentals.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 25, 1999, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000040554
<NAME> GENERAL ELECTRIC CAPITAL CORPORATION
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-25-1999
<CASH> 4,676
<SECURITIES> 56,671
<RECEIVABLES> 130,204
<ALLOWANCES> 3,429
<INVENTORY> 1,376
<CURRENT-ASSETS> 0
<PP&E> 36,601
<DEPRECIATION> 10,216
<TOTAL-ASSETS> 286,782
<CURRENT-LIABILITIES> 0
<BONDS> 64,360
0
3
<COMMON> 768
<OTHER-SE> 20,849
<TOTAL-LIABILITY-AND-EQUITY> 286,782
<SALES> 5,953
<TOTAL-REVENUES> 33,072
<CGS> 5,441
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,573
<LOSS-PROVISION> 1,044
<INTEREST-EXPENSE> 6,342
<INCOME-PRETAX> 4,188
<INCOME-TAX> 1,090
<INCOME-CONTINUING> 3,098
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,098
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
