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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 0-14804
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GENERAL ELECTRIC CAPITAL SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 06-1109503
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
260 LONG RIDGE ROAD, STAMFORD, CONNECTICUT 06927 (203) 357-4000
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (REGISTRANT'S TELEPHONE NUMBER,
INCLUDING AREA CODE)
</TABLE>
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SECURITIES REGISTERED PURSUANT
TO SECTION 12(B) OF THE ACT:
NONE.
SECURITIES REGISTERED PURSUANT
TO SECTION 12(G) OF THE ACT:
TITLE OF EACH CLASS
COMMON STOCK, PAR VALUE $10,000 PER SHARE
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/
AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NONAFFILIATES OF THE
REGISTRANT AT MARCH 21, 1994. NONE.
AT MARCH 21, 1994, 101 SHARES OF COMMON STOCK WITH A PAR VALUE OF $10,000 WERE
OUTSTANDING.
DOCUMENTS INCORPORATED BY REFERENCE
NONE.
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J(1)(A) AND (B)
OF FORM 10-K AND IS THEREFORE FILING THIS FORM 10-K WITH THE REDUCED DISCLOSURE
FORMAT.
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TABLE OF CONTENTS
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PAGE
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PART I
Item 1. Business............................................................ 1
Item 2. Properties.......................................................... 2
Item 3. Legal Proceedings................................................... 2
Item 4. Submission of Matters to a Vote of Security Holders................. 2
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters............................................... 3
Item 6. Selected Financial Data............................................. 3
Item 7. Management's Discussion and Analysis of Results of Operations....... 3
Item 8. Financial Statements and Supplementary Data......................... 8
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.............................................. 28
PART III
Item 10. Directors and Executive Officers of the Registrant.................. 29
Item 11. Executive Compensation.............................................. 29
Item 12. Security Ownership of Certain Beneficial Owners and Management...... 29
Item 13. Certain Relationships and Related Transactions...................... 29
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.... 30
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PART I
ITEM 1. BUSINESS.
General Electric Capital Services, Inc. (herein together with its
consolidated subsidiaries called "GE Capital Services" or the "Corporation,"
unless the context otherwise requires) was incorporated in 1984 in the State of
Delaware. Until February 1993, the name of the Corporation was General Electric
Financial Services, Inc. All outstanding capital stock of GE Capital Services is
owned by General Electric Company, a New York corporation ("GE Company"). The
business of GE Capital Services consists of ownership of three principal
subsidiaries which, together with their subsidiaries and affiliates, constitute
GE Company's principal financial services businesses. GE Capital Services is the
sole owner of the common stock of General Electric Capital Corporation ("GE
Capital"), Employers Reinsurance Corporation ("Employers Reinsurance") and
Kidder, Peabody Group Inc. ("Kidder, Peabody"). GE Capital Services' principal
executive offices are located at 260 Long Ridge Road, Stamford, Connecticut
06927 (Telephone number (203) 357-4000).
GENERAL ELECTRIC CAPITAL CORPORATION
GE Capital was incorporated in 1943 in the State of New York, under the
provisions of the New York Banking Law relating to investment companies, as
successor to General Electric Contracts Corporation, formed in 1932. The capital
stock of GE Capital was contributed to GE Capital Services by GE Company in June
1984. Until November 1987, the name of the corporation was General Electric
Credit Corporation. The business of GE Capital originally related principally to
financing the distribution and sale of consumer and other products of GE
Company. Currently, however, the type and brand of products financed and the
financial services offered are significantly more diversified. Very little of
the financing provided by GE Capital involves products that are manufactured by
GE Company.
GE Capital operates in four finance industry segments and in a specialty
insurance industry segment. GE Capital's financing activities include a full
range of leasing, loan, equipment management services and annuities. GE
Capital's specialty insurance activities include providing private mortgage
insurance, financial (primarily municipal) guarantee insurance, creditor
insurance, reinsurance and, for financing customers, credit life and property
and casualty insurance. GE Capital is an equity investor in a retail
organization and certain other financial services organizations. GE Capital's
operations are subject to a variety of regulations in their respective
jurisdictions.
Services of GE Capital are offered primarily throughout the United States,
Canada and Europe. Computerized accounting and service centers, including those
located in Connecticut, Ohio, Georgia and England, provide financing offices and
other service locations with data processing, accounting, collection, reporting
and other administrative support. GE Capital's principal executive offices are
located at 260 Long Ridge Road, Stamford, Connecticut 06927. At December 31,
1993 GE Capital employed approximately 27,000 persons.
EMPLOYERS REINSURANCE CORPORATION
Employers Reinsurance Corporation (ERC), together with its subsidiaries,
writes all lines of reinsurance other than title and annuities. ERC reinsures
property and casualty risks written by more than 1,000 domestic and foreign
insurers, and also writes certain specialty lines of insurance on a direct
basis, principally excess workers' compensation for self-insurers, errors and
omissions coverage for insurance and real estate agents and brokers, excess
indemnity for self-insurers of medical benefits, and libel and allied torts.
Domestic subsidiaries write property and casualty reinsurance through brokers,
excess and surplus lines insurance, and provide reinsurance brokerage services.
Subsidiaries in Denmark and the United Kingdom write property and casualty and
life reinsurance, principally in Europe, Asia and the Middle East.
Employers Reinsurance is licensed in all of the states of the United
States, the District of Columbia, certain provinces of Canada and in certain
other jurisdictions. Insurance and reinsurance operations are subject to
regulation by various insurance regulatory agencies. ERC and its subsidiaries
conduct business through 16 domestic offices and 9 foreign offices. Principal
offices of ERC are located at 5200 Metcalf Avenue, Overland Park, Kansas 66201.
At December 31, 1993 ERC employed approximately 1,000 persons.
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ITEM 1. BUSINESS (CONTINUED).
KIDDER, PEABODY GROUP INC.
Kidder, Peabody, a successor to a partnership founded in Boston in 1865, is
incorporated in Delaware. Its principal subsidiary, Kidder, Peabody and Co.
Incorporated ("Kidder"), is a member of the principal domestic securities and
commodities exchanges and is a primary dealer in United States government
securities. Kidder is a full-service international investment bank and
securities broker. Its principal businesses include securities underwriting,
sales and trading of equity and fixed income securities, financial futures
activities, advisory services for mergers, acquisitions, and other corporate
finance matters, research services and asset management. These services are
provided to domestic and foreign business entities, governments, government
agencies, and individual and institutional investors.
Kidder is subject to the rules and regulations of various Federal and state
regulatory agencies, exchanges and industry self-regulatory organizations that
apply to securities broker-dealers and futures commission merchants, including
the U.S. Securities and Exchange Commission, U.S. Commodity Futures Trading
Commission, New York Stock Exchange, National Association of Securities Dealers,
Chicago Mercantile Exchange and the Chicago Board of Trade.
Kidder, Peabody conducts business in 42 domestic and 8 foreign branch
offices. Principal offices of Kidder, Peabody are located at 10 Hanover Square,
New York, New York 10005 and 100 Federal Street, Boston, Massachusetts 02110. At
December 31, 1993 Kidder, Peabody employed approximately 5,650 persons.
INDUSTRY SEGMENTS
The Corporation provides a wide variety of financing, insurance, investment
banking and securities brokerage products and services, which are organized into
the following industry segments:
o Specialty Insurance -- U.S. and international multiple-line property and
casualty reinsurance and certain directly written specialty insurance
(ERC), financial guaranty insurance, principally on municipal bonds and
structured finance issues; private mortgage insurance; creditor insurance
covering international customer loan repayments; and property, casualty
and life insurance.
o Consumer Services -- private label and bank credit card loans, time sales
and revolving credit and inventory financing for retail merchants, auto
leasing, inventory financing, mortgage servicing and annuities.
o Mid-Market Financing -- loans and financing and operating leases for
middle-market customers including manufacturers, distributors and
end-users, for a variety of equipment, including data processing
equipment, medical and diagnostic equipment, and equipment used in
construction, manufacturing, office applications and telecommunications
activities.
o 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, ocean-going containers and satellites.
o Securities Broker-Dealer -- Kidder, Peabody, a full-service international
investment bank and securities broker, member of the principal stock and
commodities exchanges and a primary dealer in U.S. government securities.
Offers services such as underwriting, sales and trading, advisory services
on acquisitions and financing, research and asset management.
o Specialized Financing -- loans and leases for major capital assets
including aircraft, industrial facilities and equipment and energy-related
facilities; commercial and residential real estate loans and investments;
and loans to and investments in corporate enterprises.
Refer to Item 7 "Management's Discussion and Analysis of Results of
Operations" in this Form 10-K for discussion of the Corporation's Portfolio
Quality.
ITEM 2. PROPERTIES.
GE Capital Services and its subsidiaries conduct their businesses from
various facilities, most of which are leased.
ITEM 3. LEGAL PROCEEDINGS.
The Corporation is not involved in any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Omitted
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
See Note 13 of Notes to Financial Statements. The common stock of the
Corporation is owned entirely by GE Company and therefore there is no trading
market in such stock.
ITEM 6. SELECTED FINANCIAL DATA.
The following selected financial data should be read in conjunction with
the financial statements of GE Capital Services and consolidated affiliates and
the related Notes to Financial Statements.
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YEAR ENDED DECEMBER 31,
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1993 1992 1991 1990 1989
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(Dollar amounts in millions)
For the Year:
Financing volume...................................... $ 57,094 $ 51,186 $ 45,965 $ 42,853 $38,681
Insurance premiums written............................ 3,956 2,900 2,155 1,981 1,819
Securities broker-dealer earned income................ 4,861 4,022 3,346 2,923 2,897
-------- -------- -------- -------- -------
-------- -------- -------- -------- -------
Earned income......................................... $ 22,137 $ 18,440 $ 16,399 $ 14,774 $12,945
-------- -------- -------- -------- -------
Interest and discount expense......................... 6,473 6,122 6,536 6,474 5,912
Operating and administrative expense (including
minority interest).................................. 7,227 5,935 4,256 3,644 3,022
Insurance losses and policyholder and annuity
benefits............................................ 3,172 1,957 1,623 1,599 1,614
Provision for losses on financing receivables......... 987 1,056 1,102 688 527
Depreciation and amortization of buildings and
equipment and equipment on operating leases......... 1,630 1,335 1,225 974 732
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Earnings before income taxes and cumulative effect of
change in accounting principle...................... 2,648 2,035 1,657 1,395 1,138
Income tax provision from operations.................. 841 536 382 301 211
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Earnings before cumulative effect of change in
accounting principle................................ 1,807 1,499 1,275 1,094 927
Cumulative effect of change in accounting principle... -- -- 19 -- --
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Net earnings..................................... $ 1,807 $ 1,499 $ 1,256 $ 1,094 $ 927
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Ratio of earnings to fixed charges.................... 1.42 1.33 1.25 1.21 1.19
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At Year End:
Financing receivables:
Time sales and loans, net of deferred income..... $ 40,748 $ 37,070 $ 36,849 $ 35,085 $30,142
Investment in financing leases, net of deferred
income......................................... 24,930 23,925 20,411 16,530 12,764
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Total financing receivables.................. 65,678 60,995 57,260 51,615 42,906
Allowance for losses on financing receivables.... (1,730) (1,607) (1,508) (1,360) (1,127)
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Financing receivables--net................... $ 63,948 $ 59,388 $ 55,752 $ 50,255 $41,779
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Percent of allowance for losses on financing
receivables to total financing receivables.......... 2.63% 2.63% 2.63% 2.63% 2.63%
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Equipment on operating leases--net.................... $ 10,650 $ 9,395 $ 7,552 $ 5,557 $ 5,095
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Total assets.......................................... $211,730 $154,524 $127,814 $115,095 $90,928
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Capitalization:
Notes payable within one year.................... $ 60,003 $ 53,183 $ 48,070 $ 40,403 $35,740
Long-term senior debt............................ 25,126 21,197 17,964 16,748 11,878
Long-term subordinated debt...................... 759 760 386 249 287
Equity........................................... 10,809 8,884 7,758 6,833 6,069
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The Corporation adopted Statement of Financial Accounting Standards (SFAS)
No. 115, "Accounting for Certain Investments in Debt and Equity Securities," on
December 31, 1993 resulting in the inclusion of $812 million of net unrealized
gains on investment securities in equity at the end of the year.
SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions," was implemented in 1991 using the immediate recognition transition
option. The cumulative effect to January 1 of adopting SFAS No. 106 was $19
million, net of $12 million tax credit.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS.
OVERVIEW
The Corporation's earnings were $1,807 million in 1993, 21% more than
1992's earnings of $1,499 million, which were 18% more than the comparable 1991
earnings of $1,275 million. The 1993 increase reflected strong performance in
the Corporation's financing businesses, mainly as a result of a favorable
interest rate environment, asset growth and improved asset quality. Earnings of
the Corporation's Securities Broker-Dealer and Specialty Insurance segments were
substantially higher in 1993. The 1992
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
(CONTINUED).
increase reflected sharp improvement in the earnings of both the Specialty
Insurance and Securities Broker-Dealer Segments.
OPERATING RESULTS
EARNED INCOME from all sources increased 20% to $22.1 billion in 1993,
following a 12% increase to $18.4 billion in 1992. Asset growth in each of the
Corporation's financing segments, through acquisitions of businesses and
portfolios as well as origination volume, was the primary reason for increased
income from time sales, loans, financing leases and operating lease rentals in
both 1993 and 1992. Yields on related assets were essentially flat in 1993
compared with 1992, following a decline from 1991. Earned income in 1993 from
the Corporation's annuity business, formed through two current year
acquisitions, was $571 million.
Specialty Insurance revenues increased 26% in 1993, compared with a 29%
increase in 1992, due to higher premium and investment income as well as the
impact of the creditor insurance business, which was consolidated at the end of
the second quarter of 1992 when an existing equity position was converted to a
controlling interest. Securities Broker-Dealer revenues increased 21% and 20% in
1993 and 1992, respectively, reflecting higher investment income and investment
banking activity.
INTEREST AND DISCOUNT EXPENSE on borrowings is the Corporation's principal
cost. Interest and discount expense in 1993 totaled $6.5 billion, 6% higher than
in 1992, which was 6% lower than in 1991. The 1993 increase was a result of
funding increased security positions in the Securities Broker-Dealer segment,
partially offset by substantially lower rates on higher average borrowings
supporting financing operations. The 1992 decrease reflected substantially lower
interest rates, which more than offset higher average borrowings and the cost of
funding higher levels of security positions in the Securities Broker-Dealer
segment. Composite interest rates on the Corporation's borrowings were 4.96% in
1993 compared with 5.78% in 1992 and 7.46% in 1991.
OPERATING AND ADMINISTRATIVE EXPENSES increased to $7.1 billion in 1993, a
20% increase over 1992, which was 40% higher than 1991, primarily reflecting
operating costs associated with businesses and portfolios acquired during the
past two years. Overall, provisions for losses on investments charged to
operating and administrative expense decreased in 1993, following an increase in
1992. These provisions principally related to the Commercial Real Estate and
highly leveraged transaction (HLT) portfolios, and in 1993, to commercial
aircraft as well.
INSURANCE LOSSES AND POLICYHOLDER AND ANNUITY BENEFITS increased 62% to
$3.2 billion in 1993, compared with a 21% increase to $2.0 billion in 1992. The
1993 increase principally reflected annuity benefits credited to customers
following the current year annuity business acquisitions, as well as higher
losses on increased volume in the property and casualty reinsurance and life
reinsurance businesses. In 1992, higher losses on increased volume in the
property and casualty reinsurance and the private mortgage insurance businesses,
and the effects of the creditor insurance business for the second half of the
year, were partially offset by lower losses in the life reinsurance business.
PROVISION FOR LOSSES ON FINANCING RECEIVABLES decreased $69 million to $987
million in 1993 compared with a $46 million decrease to $1,056 million in 1992.
These provisions principally related to the Consumer Services, Commercial Real
Estate and HLT portfolios discussed below.
DEPRECIATION AND AMORTIZATION OF BUILDINGS AND EQUIPMENT AND EQUIPMENT ON
OPERATING LEASES increased to $1.6 billion in 1993, a 22% increase over 1992,
which was 9% higher than 1991, primarily as a result of additions to equipment
on operating leases through business and portfolio acquisitions.
INCOME TAX PROVISION was $841 million in 1993 (an effective tax rate of
32%), compared with $536 million in 1992 (26%) and $382 million (23%) in 1991.
The increased provision for income taxes in both 1993 and 1992 reflected the
effects of additional income before taxes and, in 1993, the 1% increase in the
U. S. Federal income tax rate. The higher rate in 1993, compared with 1992,
primarily reflected the 1% increase in the U.S. Federal income tax rate and a
lower proportion of tax-exempt income. These items were partially offset by the
effects of certain unrelated financing transactions that will result in future
cash savings and reduced the Corporation's obligation for previously accrued
deferred taxes. The higher rate in 1992, compared with 1991, reflected a
relatively lower proportion of tax-exempt income and a 1991 adjustment for
tax-deductible claims reserves of the property reinsurance affiliates, for which
there was no 1992 counterpart.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
(CONTINUED).
OPERATING PROFIT BY INDUSTRY SEGMENT
Operating profit (pre-tax income) of the Corporation, by industry segment,
is summarized in Note 19 and discussed below:
SPECIALTY INSURANCE operating profit of $770 million in 1993 was 20% higher
than the $641 million recorded in 1992, which was 28% higher than in 1991. The
1993 increase reflected higher premium volume from bond refunding in the
financial guaranty insurance business as well as reduced claims expense in the
creditor insurance business. The 1992 gains primarily reflected higher premium
volume and investment income at GE Capital's private mortgage and financial
guaranty insurance businesses.
CONSUMER SERVICES operating profit of $695 million in 1993, was 32% higher
than that of 1992. This increase reflected lower provisions for receivable
losses in Retailer Financial Services resulting from declines in consumer
delinquency as well as strong asset growth and interest rate favorability in
both Auto Financial Services and Retailer Financial Services. Operating profit
of $525 million in 1992 was 53% higher than that of 1991 (excluding the impact
in 1991 of the $134 million gain on the disposition of a significant portion of
GE Capital's auto auction affiliate). This increase reflected higher financing
spreads in Retailer Financial Services and increased asset levels in Auto
Financial Services.
EQUIPMENT MANAGEMENT operating profit increased $9 million to $377 million
in 1993. This increase reflected higher volume in most businesses, largely the
result of portfolio and business acquisitions, and improved trailer and railcar
utilization, offset by lower average rental rates in Fleet Services and Computer
Services, coupled with the effects of lower utilization and pricing pressures at
Genstar Container. Operating profit decreased $13 million to $368 million in
1992 due to lower utilization in the Railcar Services and Genstar Container
businesses, partially offset by operating profit generated as a result of Fleet
Services' 1992 acquisition of the fleet leasing operations of Avis-Europe.
MID-MARKET FINANCING operating profit of $454 million in 1993 was 29%
higher than that of 1992 and reflected higher spreads and higher levels of
invested assets, primarily as a result of business and portfolio acquisitions.
Operating profit increased $104 million to $352 million in 1992 compared with
1991. Operating profit for 1992 reflected higher levels of invested assets,
primarily as a result of asset portfolio acquisitions.
SECURITIES BROKER-DEALER (Kidder, Peabody) operating profit was $439
million in 1993, up 46% from 1992's record $300 million, which was $181 million
higher than in 1991. Strong performances in both years reflected higher
investment income from trading and investment banking activities. Favorable
market conditions were an important factor in both years. Higher interest
expense in both years reflected costs associated with funding increased security
positions. Operating and administrative expenses increased in both years,
primarily because of the revenue growth and, in 1992, because of costs
associated with certain litigation settlements.
SPECIALIZED FINANCING operating profit was $201 million in 1993, compared
with $121 million in 1992, and $220 million in 1991. The increase in 1993
principally reflected much lower provisions for losses on Corporate Finance
Group HLT investments and higher gains from sales of Commercial Real Estate
assets partially offset by higher loss provisions for Commercial Real Estate
assets and expenses associated with redeployment and refurbishment of owned
aircraft. The decline in 1992 principally reflected higher loss provisions,
particularly reserves for Corporate Finance Group in-substance and owned
investments, partially offset by higher gains on the sale of assets in both
Commercial Real Estate and Corporate Finance Group. Further details concerning
loss provisions relating to both the Commercial Real Estate portfolio and
Corporate Finance Group HLT investments are discussed below.
CAPITAL RESOURCES AND LIQUIDITY
The Corporation's principal source of cash is financing activities that
involve continuing rollover of short-term borrowings and appropriate addition of
long-term borrowings, with a reasonable balance of maturities. Over the past
three years, the Corporation's borrowings with maturities of 90 days or less
have increased by $14.0 billion. New borrowings of $40.2 billion having
maturities longer than 90 days were added during those years, while $25.6
billion of such longer-term borrowings were paid off. The Corporation has also
generated significant cash from operating activities, $14.8 billion during the
last three years.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
(CONTINUED).
The Corporation's principal use of cash has been investing in assets to
grow the business. Of $40.9 billion that the Corporation invested over the past
three years, $16.1 billion was used for additions to financing receivables, $9.3
billion for new equipment, primarily for lease to others and $6.9 billion to
acquire new businesses.
GE Company has agreed to make payments to GE Capital, constituting
additions to pre-tax income, to the extent necessary to cause GE Capital's
consolidated ratio of earnings to fixed charges to be not less than 1.10 for
each fiscal year commencing with fiscal year 1991. Three years advance written
notice is required to terminate this agreement. No payments have been required
under this agreement. GE Capital's ratios of earnings to fixed charges for the
years 1993, 1992 and 1991, were 1.62, 1.44 and 1.34, respectively.
The Corporation's total borrowings were $85.9 billion at December 31, 1993,
of which $60.0 billion was due in 1994 and $25.9 billion was due in subsequent
years. Comparable amounts at the end of 1992 were: $75.1 billion in total; $53.2
billion due within one year; and $21.9 billion due thereafter. Composite
interest rates are discussed on page 4. Individual borrowings are structured
within overall asset/liability interest rate and currency risk management
strategies. Interest rate and currency swaps form an integral part of the
Corporation's goal of achieving the lowest borrowing costs for particular
funding strategies. Counterparty credit risk is closely
monitored -- approximately 90% of the notional amount of swaps outstanding at
December 31, 1993 was with counterparties having credit ratings of Aa/AA or
better.
With the financial flexibility that comes with excellent credit ratings,
management believes the Corporation is well positioned to meet the global needs
of its customers for capital and continue growing its diverse asset base.
PORTFOLIO QUALITY
THE PORTFOLIO OF FINANCING RECEIVABLES, $63.9 billion and $59.4 billion at
year-ends 1993 and 1992, respectively, is the Corporation's largest asset and
its primary source of revenues. Related allowances for losses aggregated $1.7
billion at the end of 1993 (2.63% of receivables -- the same level as 1992) and
are, in management's judgment, appropriate given the risk profile of the
portfolio.
A discussion about the quality of certain elements of the portfolio of
financing receivables and investments follows. Further details are included in
Notes 5 and 10.
CONSUMER LOANS RECEIVABLE, primarily retailer and auto receivables, were
$17.3 billion and $14.8 billion at the end of 1993 and 1992, respectively. The
Corporation's investment in consumer auto finance lease receivables was $5.6
billion and $4.8 billion at the end of 1993 and 1992, respectively. Non-earning
receivables, 1.7% of total loans and leases (2.1% at the end of 1992), amounted
to $391 million at the end of 1993. The provision for losses on retailer and
auto financing receivables was $469 million in 1993, a 19% decrease from $578
million in 1992, reflecting reduced consumer delinquencies and intensified
collection efforts, particularly in Europe. Most non-earning receivables were
private label credit card receivables, the majority of which were subject to
various loss sharing arrangements that provide full or partial recourse to the
originating retailer.
COMMERCIAL REAL ESTATE LOANS classified as finance receivables by the
Commercial Real Estate business, a part of the Specialized Financing segment,
were $10.9 billion at December 31, 1993, up $0.4 billion from the end of 1992.
In addition, the investment portfolio of the Corporation's annuity business,
acquired during 1993, included $1.1 billion of commercial property loans.
Commercial real estate loans are generally secured by first mortgages. In
addition to loans, Commercial Real Estate's portfolio also included in other
assets $2.2 billion of assets that were purchased for resale from the Resolution
Trust Corporation (RTC) and other institutions and $1.4 billion of investments
in real estate joint ventures. In recent years, the Corporation has been one of
the largest purchasers of assets from RTC and other institutions, growing its
portfolio of properties acquired for resale by $1.1 billion in 1993. To date,
values realized on these assets have met or exceeded expectations at the time of
purchase. Investments in real estate joint ventures have been made as part of
original financings and in conjunction with loan restructurings where management
believes that such investments will enhance economic returns.
Commercial Real Estate's foreclosed properties at the end of 1993 declined
to $110 million from $187 million at the end of 1992.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
(CONTINUED).
At December 31, 1993, Commercial Real Estate's portfolio included loans
secured by and investments in a variety of property types that were well
dispersed geographically. Property types included apartments (36%), office
buildings (32%), shopping centers (14%), mixed use (8%), industrial and other
(10%). These properties were located, principally across the United States, as
follows: Mid-Atlantic (21%), Northeast (20%), Southwest (19%), West (15%),
Southeast (12%), Central (8%), with the remainder (5%) across Canada and Europe.
Reduced and non-earning receivables declined to $272 million in 1993 from $361
million in 1992, reflecting proactive management of delinquent receivables as
well as write-offs. Loss provisions for Commercial Real Estate's investments
were $387 million in 1993 ($248 million related to receivables and $139 million
to other assets), compared with $299 million and $213 million in 1992 and 1991,
respectively, as the portfolio continued to be adversely affected by the
weakened commercial real estate market.
HLT PORTFOLIO is included in the Specialized Financing segment and
represents financing provided for highly leveraged management buyouts and
corporate recapitalizations. The portion of those investments classified as
financing receivables was $3.3 billion at the end of 1993 compared with $5.3
billion at the end of 1992, as substantial repayments reduced this liquidating
portfolio. The year-end balance of amounts that had been written down to
estimated fair value and carried in other assets as a result of restructuring or
in-substance repossession aggregated $544 million at the end of 1993 and $513
million at the end of 1992 (net of allowances of $244 million and $224 million,
respectively).
Non-earning and reduced earning receivables declined to $139 million at the
end of 1993 from $429 million the prior year. Loss provisions for HLT
investments were $181 million in 1993 ($80 million related to receivables and
$101 million to other assets), compared with $573 million in 1992 and $328
million in 1991. Non-earning and reduced earning receivables as well as loss
provisions were favorably affected by the stronger economic climate during 1993
as well as by the successful restructurings implemented during the past few
years.
OTHER FINANCING RECEIVABLES, approximately $26 billion, consisted primarily
of a diverse commercial, industrial and equipment loan and lease portfolio. This
portfolio grew approximately $2 billion during 1993, while non-earning and
reduced earning receivables decreased $46 million to $98 million at year end.
The Corporation has loans and leases to commercial airlines that aggregated
about $6.8 billion at the end of 1993, up from $6 billion at the end of 1992. At
year-end 1993, commercial aircraft positions included conditional commitments to
purchase aircraft at a cost of $865 million and financial guarantees and funding
commitments amounting to $450 million. These purchase commitments are subject to
the aircraft having been placed on lease under agreements, and with carriers,
acceptable to the Corporation prior to delivery. Expenses associated with
redeployment and refurbishment of owned aircraft totaled $112 million in 1993,
compared with nominal amounts in prior years. The Corporation's increasing
investment demonstrates its continued long-term commitment to the airline
industry.
ENTERING 1994, management believes that the diversity and strength of the
Corporation's assets, along with vigilant attention to risk management, position
it to deal effectively with a global and changing competitive and economic
landscape.
NEW ACCOUNTING STANDARDS
SFAS No. 114, "Accounting by Creditors for Impairment of a Loan," modifies
the accounting that applies when it is probable that all amounts due under
contractual terms of a loan will not be collected. Management does not believe
that this Statement, required to be adopted no later than the first quarter of
1995, will have a material effect on the Corporation's financial position or
results of operations, although such effect will depend on the facts at the time
of adoption.
Page 7
<PAGE> 10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
General Electric Capital Services, Inc.
We have audited the financial statements of General Electric Capital
Services, Inc. and consolidated affiliates as listed in Item 14. In connection
with our audits of the consolidated financial statements, we also have audited
the financial statement schedules as listed in Item 14. These consolidated
financial statements and financial statement schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedules 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of General
Electric Capital Services, Inc. and consolidated affiliates at December 31, 1993
and 1992, and the results of their operations and their cash flows for each of
the years in the three-year period ended December 31, 1993 in conformity with
generally accepted accounting principles. Also in our opinion, the related
financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
As discussed in Note 1 to the consolidated financial statements, the
Company adopted Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," effective December 31,
1993.
/s/ KPMG PEAT MARWICK
Stamford, Connecticut
February 11, 1994
Page 8
<PAGE> 11
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
STATEMENT OF CURRENT AND RETAINED EARNINGS
<TABLE>
<CAPTION>
For the years ended December 31 (In millions) 1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
EARNED INCOME
Time sales, loan, investment and other income (Note 15)............ $ 11,999 $ 10,464 $ 9,790
Financing leases (Note 15)......................................... 2,315 2,151 1,836
Operating lease rentals (Note 15).................................. 3,267 2,444 2,205
Premium and commission income of insurance affiliates (Note 12).... 3,697 2,687 2,008
Commissions and fees of securities broker-dealer affiliate......... 859 694 560
-------- -------- --------
Total earned income........................................... 22,137 18,440 16,399
-------- -------- --------
EXPENSES
Interest and discount (Notes 11 & 16).............................. 6,473 6,122 6,536
Operating and administrative (Note 17)............................. 7,093 5,895 4,223
Insurance losses and policyholder and annuity benefits (Note 12)... 3,172 1,957 1,623
Provision for losses on financing receivables (Note 6)............. 987 1,056 1,102
Depreciation and amortization of buildings and equipment and equip-
ment on operating leases (Notes 8 & 9)........................... 1,630 1,335 1,225
Minority interest in net earnings of consolidated affiliates....... 134 40 33
-------- -------- --------
Total expenses................................................ 19,489 16,405 14,742
-------- -------- --------
Earnings before income taxes and cumulative effect of change in
accounting principle............................................. 2,648 2,035 1,657
Income tax provision from operations (Note 18)..................... 841 536 382
-------- -------- --------
Earnings before cumulative effect of change in accounting
principle........................................................ 1,807 1,499 1,275
Cumulative effect to January 1, 1991 of change in accounting
principle for postretirement benefits other than pensions, net... -- -- 19
-------- -------- --------
NET EARNINGS....................................................... 1,807 1,499 1,256
Cash dividends paid (Note 13)...................................... (610) (500) (350)
Retained earnings at January 1..................................... 7,015 6,016 5,110
-------- -------- --------
RETAINED EARNINGS AT DECEMBER 31................................... $ 8,212 $ 7,015 $ 6,016
-------- -------- --------
-------- -------- --------
</TABLE>
See Notes to Consolidated Financial Statements.
Page 9
<PAGE> 12
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
STATEMENT OF FINANCIAL POSITION
<TABLE>
<CAPTION>
At December 31 (In millions) 1993 1992
-------- --------
<S> <C> <C>
ASSETS
Cash and equivalents..................................................... $ 1,682 $ 1,940
Trading securities (Note 3).............................................. 30,165 24,154
Investment securities (Note 4)........................................... 26,792 11,224
Securities purchased under agreements to resell.......................... 43,463 26,788
Financing receivables (Note 5):
Time sales and loans, net of deferred income........................ 40,748 37,070
Investment in financing leases, net of deferred income.............. 24,930 23,925
-------- --------
65,678 60,995
Allowance for losses on financing receivables (Note 6).............. (1,730) (1,607)
-------- --------
Financing receivables -- net................................... 63,948 59,388
Other receivables -- net (Note 7)........................................ 15,799 8,476
Equipment on operating leases (at cost), less accumulated amortization of
$3,238 and $2,549 (Note 8)............................................. 10,650 9,395
Buildings and equipment (at cost), less accumulated depreciation of $814
and $673 (Note 9)...................................................... 1,036 1,060
Other assets (Note 10)................................................... 18,195 12,099
-------- --------
TOTAL ASSETS............................................................. $211,730 $154,524
-------- --------
-------- --------
LIABILITIES AND EQUITY
Notes payable within one year (Note 11).................................. $ 60,003 $ 53,183
Notes payable after one year (Note 11)................................... 25,885 21,957
-------- --------
Total notes payable................................................. 85,888 75,140
Accounts and drafts payable (Note 7)..................................... 9,885 6,624
Securities sold under agreements to repurchase........................... 56,669 36,014
Securities sold but not yet purchased -- at market (Note 3).............. 15,332 11,413
Insurance reserves and annuity benefits (Note 12)........................ 22,909 7,948
Other liabilities........................................................ 3,529 2,638
Deferred income taxes (Note 18).......................................... 5,408 4,869
-------- --------
Total liabilities................................................... 199,620 144,646
-------- --------
Minority interest in equity of consolidated affiliates (Note 14)......... 1,301 994
-------- --------
Cumulative preferred stock, $10,000 par value (80,000 shares authorized;
51,000 shares issued and held by consolidated affiliates at December
31, 1993 and December 31, 1992)........................................ -- --
Common stock, $10,000 par value (101 shares authorized and
outstanding)........................................................... 1 1
Additional paid-in capital............................................... 1,877 1,877
Retained earnings........................................................ 8,212 7,015
Other.................................................................... 719 (9)
-------- --------
Total equity (Note 13).............................................. 10,809 8,884
-------- --------
TOTAL LIABILITIES AND EQUITY............................................. $211,730 $154,524
-------- --------
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements.
Page 10
<PAGE> 13
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the years ended December 31 (In millions) 1993 1992 1991
------- ------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings..................................................... $ 1,807 $ 1,499 $ 1,256
Adjustments to reconcile net earnings to cash provided by
operating activities:
Cumulative effect of change in accounting principle......... -- -- 19
Provision for losses on financing receivables............... 987 1,056 1,102
Increase in insurance reserves and annuity benefits......... 1,479 703 725
Increase in deferred income taxes........................... 341 32 555
Depreciation and amortization of buildings and equipment and
equipment on operating leases............................. 1,630 1,335 1,225
Increase in trading securities of broker-dealer............. (7,517) (5,966) (5,463)
(Increase) decrease in securities purchased under agreements
to resell................................................. (16,675) (7,386) 4,006
Increase in securities sold under agreements to
repurchase................................................ 20,655 7,841 349
Increase (decrease) in securities sold but not yet
purchased................................................. 3,919 6,529 (440)
Amortization of premium and discount on debt................ 99 197 222
Increase in accounts and drafts payable..................... 3,246 139 1,391
Gain on principal business dispositions..................... -- (65) (134)
Other -- net................................................ (4,518) (571) (842)
------- ------- -------
Cash provided by operating activities.................. 5,453 5,343 3,971
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in loans to customers................................... (30,002) (27,069) (25,030)
Principal collections from customers............................. 27,571 25,136 25,289
Investment in assets on financing leases......................... (7,204) (7,758) (8,829)
Principal collections on financing leases........................ 6,812 5,338 3,726
Net increase in credit card receivables.......................... (1,341) (330) (2,410)
Buildings and equipment and equipment on
operating leases -- additions.................................. (3,151) (3,379) (2,744)
-- dispositions............................... 1,100 1,747 1,029
Payments for principal businesses purchased, net of cash
acquired....................................................... (2,090) (2,013) (2,836)
Proceeds from principal business dispositions.................... -- -- 277
Purchases of investment securities by insurance affiliates and
annuity businesses............................................. (10,488) (6,865) (6,002)
Dispositions of investment securities by insurance affiliates and
annuity businesses............................................. 7,698 6,200 5,415
Other............................................................ (4,124) (3,003) (1,538)
------- ------- -------
Cash used by investing activities...................... (15,219) (11,996) (13,653)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in borrowings (less than 90-day maturities)........... 4,462 3,895 5,641
Newly issued debt -- short-term (91-365 days).................... 4,315 4,456 4,863
-- long-term senior............................ 10,885 6,699 6,317
-- long-term subordinated...................... -- 450 250
Proceeds -- non-recourse, leveraged lease debt................... 53 148 1,808
Repayments and other reductions -- short-term (91-365 days)...... (9,008) (6,474) (6,504)
-- long-term senior.............. (208) (658) (1,769)
-- long-term subordinated........ -- (76) (32)
Principal payments -- non-recourse, leveraged lease debt......... (312) (272) (280)
Proceeds from sales of investment and annuity contracts.......... 509 -- --
Redemption of investment and annuity contracts................... (578) -- --
Dividend paid to share owner..................................... (610) (500) (350)
------- ------- -------
Cash provided by financing activities.................. 9,508 7,668 9,944
------- ------- -------
(DECREASE) INCREASE IN CASH AND EQUIVALENTS DURING THE YEAR...... (258) 1,015 262
CASH AND EQUIVALENTS AT BEGINNING OF YEAR........................ 1,940 925 663
------- ------- -------
CASH AND EQUIVALENTS AT END OF YEAR.............................. $ 1,682 $ 1,940 $ 925
------- ------- -------
------- ------- -------
</TABLE>
See Notes to Consolidated Financial Statements.
Page 11
<PAGE> 14
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION -- The consolidated financial statements represent a consolidation
of GE Capital Services and all majority-owned and controlled affiliates
("consolidated affiliates"), including General Electric Capital Corporation ("GE
Capital"), Employers Reinsurance Corporation ("Employers Reinsurance") and
Kidder, Peabody Group Inc. ("Kidder, Peabody"). GE Capital Services owns all of
the common stock of GE Capital, Employers Reinsurance and Kidder, Peabody.
All significant transactions among the parent and consolidated affiliates
have been eliminated. Other affiliates in which the Corporation owns 20 percent
to 50 percent of the voting rights ("nonconsolidated affiliates") are included
in other assets, valued at the appropriate share of equity plus loans and
advances.
CASH FLOWS -- For purposes of the Statement of Cash Flows, certificates and
other time deposits are treated as cash equivalents.
METHODS OF RECORDING EARNED INCOME -- Income on all loans is recognized on
the interest method. Accrual of interest income is suspended when collection of
an account becomes doubtful, generally after the account becomes 90 days
delinquent.
Financing lease income, which includes related investment tax credits and
residual values, is recorded on the interest method so as to produce a level
yield on funds not yet recovered. Unguaranteed residual values included in lease
income are based principally on 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 term
of the 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 the related services are performed unless significant contingencies exist.
Kidder, Peabody's proprietary securities and commodities transactions,
unrealized gains and losses on open contractual commitments (principally
financial futures), forward contracts on U.S. government and federal agency
securities, and when-issued securities are recorded on a trade-date basis.
Customer transactions and related revenues and expenses, investment banking
revenues from management fees, sales concessions and underwriting fees are
recorded on a settlement-date basis. Advisory fees are recorded as revenues when
services are substantially completed and the revenue is reasonably determinable.
See "Insurance and Annuity Businesses" below for information with respect
to earned income of these businesses.
ALLOWANCE FOR LOSSES ON FINANCING RECEIVABLES AND INVESTMENTS -- The
Corporation maintains an allowance for losses on financing receivables at an
amount which it believes is sufficient to provide adequate protection against
future losses in the portfolio. For small-balance receivables the allowance for
losses is determined principally on the basis of actual experience during the
preceding three years. Further allowances are also 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.
All accounts or portions thereof deemed to be uncollectible or to require
an excessive collection cost are written off to the allowance for losses.
Small-balance accounts are progressively written down (from 10% when more than
three months delinquent to 100% when nine to twelve months delinquent) to record
the balances at estimated realizable value. However, 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. Larger-balance accounts
are reviewed at least quarterly, and those accounts which are more than three
months delinquent are written down, if necessary, to record the balances at
estimated realizable value.
When collateral is formally or substantively repossessed in satisfaction of
a loan, the receivable is written down against the allowance for losses to
estimated fair value and is transferred to other assets.
Page 12
<PAGE> 15
Subsequent to such transfer, these assets are carried at the lower of cost or
estimated current fair value. This accounting has been employed principally for
highly leveraged transactions (HLT) and real estate loans.
INCOME TAXES -- Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes," was adopted effective January 1, 1992. The effect
of adopting SFAS No. 109 was not material. Deferred tax balances are stated at
tax rates expected to be in effect when taxes are actually paid or recovered.
INVESTMENT AND TRADING SECURITIES -- On December 31, 1993, the Corporation
adopted SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," which requires that investments in debt securities and marketable
equity securities be designated as trading, held-to-maturity or
available-for-sale. Trading securities are reported at fair value, with changes
in fair value included in earnings. Investment securities include both
available-for-sale and held-to-maturity securities. Available-for-sale
securities are reported at fair value, with net unrealized gains and losses
included in equity. Held-to-maturity debt securities are reported at amortized
cost. See notes 3 and 4 for a discussion of the classification and reporting of
these securities at December 31, 1992. For all investment securities, unrealized
losses that are other than temporary are recognized in earnings.
SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL (REVERSE REPURCHASE
AGREEMENTS) AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (REPURCHASE
AGREEMENTS) -- Such items are treated as financing transactions and are carried
at the contract amount at which the securities subsequently will be resold or
reacquired. Repurchase agreements relate either to marketable securities, which
are carried at market value, or to securities obtained pursuant to reverse
repurchase agreements. It is the Corporation's policy to take possession of
securities that are subject to reverse repurchase agreements. The Corporation
monitors the market value of the underlying securities in relation to the
related receivable, including accrued interest, and requests additional
collateral when appropriate.
EQUIPMENT ON OPERATING LEASES -- Equipment is amortized, principally on a
straight-line basis, to estimated net salvage value over the lease term or the
estimated economic life of the equipment.
BUILDINGS AND EQUIPMENT -- The Corporation records depreciation on a
sum-of-the-years' digits basis or a straight-line basis over the lives of the
assets.
OTHER ASSETS -- Goodwill is amortized on a straight-line basis over periods
not exceeding 30 years.
FOREIGN OPERATIONS -- Assets and liabilities of foreign affiliates are
translated into U.S. dollars at the year-end exchange rates while operating
results are translated at rates prevailing during the year. Such adjustments are
accumulated and reported as a separate component of equity.
INSURANCE AND ANNUITY BUSINESSES -- Premiums on short-duration 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 assumed reinsurance
contracts are recorded based on estimated losses and loss expenses, including
both case and incurred-but-not-reported reserves. Premiums on long-duration
insurance products are recognized as earned when due. Premiums received under
annuity contracts are not reported as revenues but as annuity benefits -- a
liability -- and are adjusted according to the terms of the respective policies.
The estimated liability for insurance losses and loss expenses consist of
both case and incurred-but-not-reported reserves. Where experience is not
sufficient, industry averages are used. Estimated amounts of salvage and
subrogation recoverable on paid and unpaid losses are deducted from outstanding
losses.
The liability for future policyholder 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.
Deferred insurance acquisition costs for the property and casualty
businesses 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
Page 13
<PAGE> 16
reviewed for recoverability; for short-duration contracts, anticipated
investment income is considered in making recoverability evaluations.
NOTE 2. ACQUISITIONS
The Corporation has acquired two individually non-significant entities
(collectively "the Acquisitions"). The acquisition of GNA Corporation ("GNA")
from Weyerhaeuser Company and Weyerhaeuser Financial Services, Inc. occurred on
April 1, 1993, while the acquisition of United Pacific Life Insurance Company
("UPL") from Reliance Insurance Company and its parent company, Reliance Group
Holdings, Inc. occurred on July 14, 1993.
The acquisitions, accounted for as purchases, have been reflected in the
accompanying consolidated financial statements of the Corporation since the
respective acquisition dates. The acquired companies had assets of approximately
$12.8 billion, principally investment securities. The aggregate estimated
purchase price was $1,113 million and is subject to certain post-closing
adjustments.
Unaudited pro forma condensed results of operations of the Corporation for
each of the years ended December 31, 1993 and 1992 as if the Acquisitions had
occurred on January 1, 1993 and January 1, 1992, respectively, are as follows:
<TABLE>
<CAPTION>
(In millions) 1993 1992
------- -------
<S> <C> <C>
Earned income...................................................... $22,541 $19,565
Net earnings....................................................... 1,836 1,547
</TABLE>
The pro forma data have been prepared based on assumptions management deems
appropriate and the results are not necessarily indicative of those that might
have occurred had the transactions become effective at the beginning of the
respective years, primarily due to changes in investment and other business
strategies of the acquired companies. The aggregate effect of several other
business acquisitions completed during 1993 was not material.
NOTE 3. TRADING SECURITIES AND SECURITIES SOLD BUT NOT YET PURCHASED
Trading securities are shown in the following table as of December 31, 1993 and
1992:
<TABLE>
<CAPTION>
(In millions) 1993 1992
------- -------
<S> <C> <C>
U.S. Government and federal agency................................. $19,543 $16,172
Corporate stocks, bonds and non-U.S................................ 8,969 5,960
Mortgage loans..................................................... 1,292 974
State and municipal................................................ 361 1,048
------- -------
$30,165 $24,154
------- -------
------- -------
</TABLE>
The balance of trading securities at December 31, 1992, included
investments in equity securities held by insurance affiliates at a fair value of
$1,505 million, with unrealized pretax gains of $94 million (net of unrealized
pretax losses of $37 million) included in equity. At December 31, 1993, equity
securities held by insurance affiliates were classified as investment securities
(see note 4).
A significant portion of the Corporation's trading securities at December
31, 1993, was pledged as collateral for bank loans and repurchase agreements in
connection with securities broker-dealer operations.
Market value of securities sold but not yet purchased at December 31, 1993
and 1992 are shown in the following table:
<TABLE>
<CAPTION>
(In millions) 1993 1992
------- -------
<S> <C> <C>
U.S. Government.................................................... $12,789 $ 9,570
Corporate stocks, bonds and non-U.S................................ 2,528 1,802
State and municipal................................................ 15 41
------- -------
$15,332 $11,413
------- -------
------- -------
</TABLE>
Page 14
<PAGE> 17
NOTE 4. INVESTMENT SECURITIES
At December 31, 1993, investment securities were classified as
available-for-sale and reported at fair value, including net unrealized gains of
$1,261 million before taxes. At December 31, 1992, investment securities of
$9,033 million were classified as available-for-sale and were reported at the
lower of aggregate amortized cost or fair value. The balance of the 1992
investment securities portfolio was carried at amortized cost.
A summary of investment securities follows.
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
(In millions) AMORTIZED UNREALIZED UNREALIZED FAIR
DECEMBER 31, 1993 COST GAINS(A) LOSSES(A) VALUE
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Corporate, non-U.S. and other.................... $11,448 $ 206 $ (59) $11,595
State and municipal.............................. 8,859 786 (9) 9,636
Mortgage-backed.................................. 2,487 31 (11) 2,507
Equity........................................... 1,517 393 (84) 1,826
U.S. government and federal agency............... 1,220 15 (7) 1,228
--------- ---------- ---------- ---------
$25,531 $1,431 $ (170) $26,792
--------- ---------- ---------- ---------
--------- ---------- ---------- ---------
DECEMBER 31, 1992
Corporate, non-U.S. and other.................... $ 4,097 $ 70 $ -- $ 4,167
State and municipal.............................. 6,626 339 (14) 6,951
Mortgage-backed.................................. 246 7 (1) 252
U.S. government and federal agency............... 255 10 (1) 264
--------- ---------- ---------- ---------
$11,224 $ 426 $ (16) $11,634
--------- ---------- ---------- ---------
--------- ---------- ---------- ---------
</TABLE>
- ---------------
(a) December 31, 1992 amounts include gross unrealized gains and losses of $32
million and $5 million, respectively, on investment securities carried at
amortized cost.
Contractual maturities of debt securities, other than mortgage-backed
securities, at December 31, 1993, are shown below.
<TABLE>
<CAPTION>
ESTIMATED
AMORTIZED FAIR
(In millions) COST VALUE
--------- ---------
<S> <C> <C>
Due in 1994.......................................................... $ 2,665 $ 2,696
1995-1998.......................................................... 4,326 4,476
1999-2003.......................................................... 4,316 4,429
2004 and later..................................................... 10,220 10,858
</TABLE>
It is expected that actual maturities will differ from contractual
maturities because some borrowers have the right to call or prepay obligations
with or without call or prepayment penalties. Proceeds from sales of debt
securities in 1993, 1992 and 1991 amounted to $6,112 million, $3,514 million and
$2,814 million, respectively; gross realized gains were $173 million, $171
million and $106 million, respectively, and realized losses were $34 million, $4
million and $9 million, respectively.
NOTE 5. FINANCING RECEIVABLES
Financing receivables at December 31, 1993 and 1992 by principal category are
shown below.
<TABLE>
<CAPTION>
AMOUNT
-------------------
(In millions) 1993 1992
------- -------
<S> <C> <C>
Time sales and loans:
Retailer and auto financing........................................... $17,242 $14,847
Commercial real estate financing...................................... 11,887 10,526
Commercial and industrial loans....................................... 6,781 8,270
Equipment sales financing............................................. 5,514 3,951
Other................................................................. 398 421
------- -------
41,822 38,015
Deferred income....................................................... (1,074) (945)
------- -------
Time sales and loans -- net of deferred income........................ 40,748 37,070
------- -------
</TABLE>
Page 15
<PAGE> 18
<TABLE>
<CAPTION>
AMOUNT
-------------------
(In millions) 1993 1992
------- -------
<S> <C> <C>
Investment in financing leases:
Direct financing leases............................................... 22,063 20,890
Leveraged leases...................................................... 2,867 3,035
------- -------
24,930 23,925
------- -------
Total financing receivables................................................ $65,678 $60,995
------- -------
------- -------
</TABLE>
Financing receivables classified as time sales and loans represent
transactions with customers 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 acquired on a discount basis
carried at gross book value, which includes finance charges. At year-ends 1993
and 1992 commercial and industrial loans included $3,293 million and $5,262
million, respectively, for highly leveraged transactions. Note 8 contains
information on commercial airline loans and leases.
The financing lease operations consist of direct financing and leveraged
leases of aircraft, railroad rolling stock, automobiles and other transportation
equipment, data processing equipment, medical equipment, and 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, the Corporation 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. The
Corporation is also entitled generally to any investment tax credit on leased
equipment and to any residual value of leased assets.
Investments in direct financing and leveraged leases represent unpaid
rentals and estimated unguaranteed residual values of leased equipment, less
related deferred income. Because the Corporation has no general obligation 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. The
Corporation's share of rentals receivable is subordinate to the share of the
other participants who also have a security interest in the leased equipment.
The Corporation's investment in financing leases at December 31, 1993 and
1992 is shown below.
<TABLE>
<CAPTION>
DIRECT TOTAL
FINANCING LEASES LEVERAGED LEASES FINANCING LEASES
------------------- ------------------- -------------------
(In millions) 1993 1992 1993 1992 1993 1992
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Total minimum lease payments receivable....... $26,584 $25,390 $11,496 $12,782 $38,080 $38,172
Less principal and interest on third-party
nonrecourse debt............................ -- -- (8,398) (9,446) (8,398) (9,446)
------- ------- ------- ------- ------- -------
Rentals receivable........................ 26,584 25,390 3,098 3,336 29,682 28,726
Estimated unguaranteed residual value of
leased assets............................... 3,323 3,115 1,167 1,237 4,490 4,352
Less: Deferred income(a)...................... (7,844) (7,615) (1,398) (1,538) (9,242) (9,153)
------- ------- ------- ------- ------- -------
Investment in financing leases.......... 22,063 20,890 2,867 3,035 24,930 23,925
Less: Allowance for losses.................... (464) (481) (74) (79) (538) (560)
Deferred taxes arising from financing
leases.................................. (2,157) (1,986) (2,760) (2,567) (4,917) (4,553)
------- ------- ------- ------- ------- -------
Net investment in financing leases............ $19,442 $18,423 $ 33 $ 389 $19,475 $18,812
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
</TABLE>
- ---------------
(a) Total financing lease deferred income is net of deferred initial direct
costs of $83 million and $73 million for 1993 and 1992, respectively.
At December 31, 1993, contractual maturities for time sales and loans over
the next five years and after are: $16,287 million in 1994; $6,286 million in
1995; $4,350 million in 1996; $4,104 million in 1997; $3,112 million in 1998;
and $7,683 million in 1999 and later -- aggregating $41,822 million. At December
31, 1993, contractual maturities for finance lease rentals receivable over the
next five years and after are: $6,417 million in 1994; $5,426 million in 1995;
$3,919 million in 1996; $2,570 million in 1997; $1,720 million in 1998; and
$9,630 million in 1999 and later -- aggregating $29,682 million.
Page 16
<PAGE> 19
Experience of the Corporation has shown that a portion of receivables will
be paid prior to contractual maturity. Accordingly, the contractual maturities
of time sales and loans and of rentals receivable shown above are not to be
regarded as forecasts of future cash collections.
GE Capital is a party to financial instruments with off-balance sheet risk
in the normal course of business to meet the financing needs of its customers.
These financial instruments include financial guarantees and letters of credit.
GE Capital's exposure to credit loss in the event of nonperformance by the other
party to financial guarantees is represented by the contractual amount of those
instruments. GE Capital uses the same credit policies and the same collateral
requirements in making commitments and conditional obligations as it does for
financing transactions. In addition, GE Capital is involved with sales of
receivables for which it is contingently liable for credit losses for a
percentage of the initial face amount sold. At December 31, 1993 and 1992, the
aggregate amount of such financial guarantees were $1,863 million and $1,693
million, respectively, excluding those related to commercial aircraft (see note
8). In connection with the sales of financing receivables, GE Capital received
proceeds of $1,105 million in 1993, $1,097 million in 1992 and $2,316 million in
1991. At December 31, 1993 and 1992, $3,045 million and $3,473 million,
respectively, of such receivables were outstanding.
Under arrangements with customers, GE Capital had committed to lend funds
of $2,131 million and $1,794 million at December 31, 1993 and 1992,
respectively, excluding those related to commercial aircraft (see note 8).
Additionally, at December 31, 1993 and 1992, GE Capital was conditionally
obligated to advance $2,244 million and $2,236 million, respectively,
principally under performance-based standby lending commitments. GE Capital also
was obligated for $2,946 million and $2,147 million at year-ends 1993 and 1992,
respectively, under standby liquidity facilities related to third-party
commercial paper programs, although management believes that the prospects of
being required to fund under such standby facilities are remote. Note 12
discusses financial guarantees of insurance affiliates.
Non-earning consumer time sales and loans, primarily private-label credit
card receivables, amounted to $391 million and $444 million at December 31, 1993
and 1992, respectively. A majority of these receivables was subject to various
loss-sharing arrangements that provide full or partial recourse to the
originating private-label entity. Non-earning and reduced earning receivables
other than consumer time sales and loans were $509 million and $934 million at
year-ends 1993 and 1992, respectively. Earnings of $11 million and $30 million
realized in 1993 and 1992, respectively, were $41 million and $75 million lower
than would have been reported had these receivables earned income in accordance
with their original terms.
Additional information regarding financing receivables is included in
Management's Discussion of the Corporation's Portfolio Quality on Page 6.
NOTE 6. ALLOWANCE FOR LOSSES ON FINANCING RECEIVABLES
The allowance for losses on financing receivables represented 2.63% of total
financing receivables at both year-ends 1993 and 1992. The table below shows the
activity in the allowance for losses on financing receivables during 1991
through 1993:
<TABLE>
<CAPTION>
(In millions) 1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Balance at January 1........................................ $1,607 $1,508 $1,360
Additions charged to operations............................. 987 1,056 1,102
Net transfers related to companies acquired and sold........ 126 52 135
Amounts written off -- net.................................. (990) (1,009) (1,089)
------ ------ ------
Balance at December 31...................................... $1,730 $1,607 $1,508
------ ------ ------
------ ------ ------
</TABLE>
Amounts written off in 1993 were approximately 1.46% of average financing
receivables outstanding during the year, compared with 1.58% and 1.87% of
average financing receivables outstanding during 1992 and 1991, respectively.
Page 17
<PAGE> 20
NOTE 7. BROKER -- DEALER POSITIONS
Other receivables and accounts payable include amounts receivable from and
payable to brokers and dealers in connection with Kidder, Peabody's normal
trading, lending and borrowing of securities. At December 31, 1993 and 1992,
amounts consisted of the following:
<TABLE>
<CAPTION>
(In millions) 1993 1992
------ ------
<S> <C> <C>
Included in other receivables:
Securities failed to deliver....................................... $2,315 $ 218
Deposits paid for securities borrowed.............................. 1,944 1,976
Other, principally clearing organizations.......................... 3,207 930
------ ------
$7,466 $3,124
------ ------
------ ------
Included in accounts payable:
Securities failed to receive....................................... $1,701 $ 193
Deposits received for securities loaned............................ 1,390 1,051
Other, principally clearing organizations.......................... 275 100
------ ------
$3,366 $1,344
------ ------
------ ------
</TABLE>
Kidder, Peabody, in conducting its normal operations, invests in a wide
variety of financial instruments in order to balance its investment positions.
Management believes that the most meaningful measure of these positions for a
broker-dealer is market value, the value at which the positions are presented in
the Statement of Financial Position in accordance with securities industry
practices. The following required supplemental disclosures are indicators of the
nature and extent of broker-dealer positions and are not intended to portray the
much smaller credit or economic risk.
At December 31, 1993, open commitments to sell mortgage-backed securities
amounted to $18,539 million ($17,191 million in 1992); open commitments to
purchase mortgage-backed securities amounted to $14,637 million ($13,131 million
in 1992); interest rate swap agreements were open for interest on $4,084 million
($6,038 million in 1992); commitments amounting to $10,837 million ($6,711
million in 1992) were open under options written to cover price changes in
securities; the face amount of open interest rate futures and forward contracts
for currencies as well as money market and other instruments amounted to $30,506
million ($10,936 million in 1992); contracts establishing limits on counterparty
exposure to interest rates were outstanding for interest on $1,610 million
($2,722 million in 1992); and firm underwriting commitments for the purchase of
stock or debt amounted to $3,311 million ($4,094 million in 1992).
At December 31, 1993 and 1992, Kidder, Peabody had obtained irrevocable
letters of credit of $592 million and $314 million, respectively, from third
parties, written in favor of clearing associations to satisfy margin
requirements. Kidder, Peabody seeks to control the risks associated with its
customer activities by requiring customers to maintain margin collateral in
compliance with various regulations and internal policies. Kidder, Peabody
monitors customer credit exposure and collateral values on a daily basis and
requires additional collateral to be deposited with Kidder, Peabody or returned,
when deemed necessary.
Page 18
<PAGE> 21
NOTE 8. EQUIPMENT ON OPERATING LEASES
Equipment on operating leases by type of equipment and accumulated amortization
at December 31, 1993 and 1992 are shown in the following table:
<TABLE>
<CAPTION>
(In millions) 1993 1992
------- -------
<S> <C> <C>
Cost -- aircraft................................................... $ 3,677 $ 2,850
-- vehicles................................................... 3,568 2,274
-- marine shipping containers................................. 2,985 2,584
-- railroad rolling stock..................................... 1,498 1,478
-- other...................................................... 2,160 2,758
------- -------
13,888 11,944
Accumulated amortization........................................... (3,238) (2,549)
------- -------
$10,650 $ 9,395
------- -------
------- -------
</TABLE>
Amortization of equipment on operating leases was $1,395 million in 1993,
$1,133 million in 1992 and $1,055 million in 1991.
The Corporation acts as a lender and lessor to commercial enterprises in
the airline industry; at December 31, 1993 and 1992, the aggregate amount of
such loans, leases and equipment leased to others were $6,776 million and $5,978
million, respectively. In addition, the Corporation had issued financial
guarantees and funding commitments of $450 million at December 31, 1993 ($645
million at year-end 1992) and had conditional commitments to purchase aircraft
at a cost of $865 million. These purchase commitments are subject to the
aircraft having been placed on lease under agreements, and with carriers,
acceptable to the Corporation prior to delivery. Included in the Corporation's
equipment leased to others at year-end 1993 is $244 million of commercial
aircraft off-lease ($94 million in 1992).
NOTE 9. BUILDINGS AND EQUIPMENT
Buildings and equipment include office buildings, satellite communications
equipment, data processing equipment, vehicles, furniture and office equipment
used at the Corporation's offices throughout the world. Depreciation expense was
$235 million for 1993, $202 million for 1992 and $170 million for 1991.
NOTE 10. OTHER ASSETS
Other assets at December 31, 1993 and 1992 are shown in the table below.
<TABLE>
<CAPTION>
(In millions) 1993 1992
------- -------
<S> <C> <C>
Assets acquired for resale......................................... $ 8,141 $ 3,388
Goodwill........................................................... 2,133 1,841
Investments in and advances to nonconsolidated affiliates, at
equity........................................................... 2,079 1,720
Other intangibles.................................................. 1,765 1,062
Miscellaneous investments.......................................... 1,756 2,216
Deferred insurance acquisition costs............................... 987 720
Foreclosed real estate properties.................................. 213 304
Other.............................................................. 1,121 848
------- -------
$18,195 $12,099
------- -------
------- -------
</TABLE>
Accumulated amortization of goodwill and other intangibles was $496 million
and $382 million, respectively, at December 31, 1993 and $415 million and $231
million, respectively, at December 31, 1992.
Miscellaneous investments included $75 million and $275 million at December
31, 1993 and 1992, respectively, of in-substance repossessions at the lower of
cost or estimated fair value previously included in financing receivables.
Investments in and advances to nonconsolidated affiliates include advances of
$1,159 million and $687 million at December 31, 1993 and 1992, respectively.
The Corporation's mortgage servicing activities include the purchase and
resale of mortgages. At December 31, 1993 and 1992, it had open commitments to
purchase mortgages totaling $5,935 million and $2,963 million, respectively.
Additionally, the Corporation had open commitments to sell mortgages totalling
$6,426 million and $1,777 million, at year-ends 1993 and 1992, respectively. At
December 31, 1993
Page 19
<PAGE> 22
and 1992, mortgages sold with full or partial recourse to the Corporation
aggregated $2,526 million and $3,876 million, respectively.
NOTE 11. NOTES PAYABLE
Notes payable at December 31, 1993 totaled $85,888 million, consisting of
$85,129 million of senior debt and $759 million of subordinated debt. The
composite interest rate for the Corporation's finance activities during 1993 was
4.96% compared with 5.78% for 1992 and 7.46% for 1991. Total short-term notes
payable at December 31, 1993 and 1992 consisted of the following:
<TABLE>
<CAPTION>
(In millions) 1993 1992
------- -------
<S> <C> <C>
Commercial paper................................................... $46,298 $42,168
Current portion of long-term debt.................................. 6,421 4,300
Banks.............................................................. 4,957 4,516
Notes with trust departments of banks.............................. 1,882 1,659
Other.............................................................. 445 540
------- -------
$60,003 $53,183
------- -------
------- -------
</TABLE>
The average daily balance of short-term debt, excluding the current portion
of long-term debt, during 1993 was $47,357 million compared with $43,817 million
for 1992 and $40,513 million for 1991. The December 31, 1993 balance of $60,003
million was the maximum balance during 1993. The December 31, 1992 balance of
$53,183 million was the maximum balance during 1992. The December 27, 1991
balance of $49,604 million was the maximum balance during 1991. The average
short-term interest rate, excluding the current portion of long-term debt, for
the year 1993 was 3.29%, representing short-term interest expense divided by the
average daily balance, compared with 3.93% for 1992 and 6.36% for 1991. On
December 31, 1993, 1992 and 1991, average interest rates were 3.59%, 4.20% and
5.20%, respectively, for bank borrowings, 3.39%, 3.57% and 5.12%, respectively,
for commercial paper, and 3.10%, 3.54% and 4.90%, respectively, for notes with
trust departments of banks.
Outstanding balances in notes payable after one year at December 31, 1993
and 1992 are as follows.
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE 1993 1992
(Dollars in millions) INTEREST RATE MATURITIES AMOUNT AMOUNT
------------- ---------- ------- -------
<S> <C> <C> <C> <C>
Senior notes
Notes(a)(b)................................ 6.03% 1995-2012 $22,042 $18,087
Zero coupon/deep discount notes............ 13.72 1995-2001 1,407 1,578
Reset or remarketed notes(c)............... 8.39 2007-2018 1,500 1,500
Floating rate notes(d)..................... 1995-2053 521 496
Less unamortized discount/premium.......... (344) (464)
------ ------
Total senior notes................. 25,126 21,197
------ ------
Subordinated notes(e)........................ 8.12 2006-2012 759 760
------ ------
$25,885 $21,957
------ -------
------ -------
</TABLE>
- ---------------
(a) At December 31, 1993 and 1992, the Corporation had agreed to exchange
currencies and related interest payments on principal amounts equivalent to
U.S. $8,101 million and $6,499 million, respectively. At December 31, 1993
and 1992, the Corporation also had entered into interest rate swaps related
to interest on $13,224 million and $8,549 million, respectively. To minimize
borrowing costs, the Corporation has entered into multiple currency and
interest rate agreements for certain notes.
(b) At December 31, 1993 and 1992, counterparties held options under which the
Corporation can be caused to execute interest rate swaps associated with
interest payments through 1999 on $500 million and $625 million,
respectively.
(c) The Corporation will reset interest rates at the end of the initial and each
subsequent interest period. At each interest rate-reset date, the
Corporation may redeem notes in whole or in part at its option. Current
interest periods range from March 1994 to May 1996.
(d) The rate of interest payable on each note is a variable rate based on the
commercial paper rate each month. Interest is payable, at the option of the
Corporation, either monthly or semiannually.
Page 20
<PAGE> 23
(e) At December 31, 1993 and 1992, subordinated notes in the amount of $700
million principal were guaranteed by GE Company.
Long-term borrowing maturities during the next five years, including the
current portion of notes payable after one year, are: 1994 -- $6,421 million;
1995 -- $6,204 million; 1996 -- $4,868 million; 1997 -- $2,971 million; and
1998 -- $3,566 million.
At December 31, 1993 GE Capital had committed lines of credit aggregating
$19,045 million with 134 banks, including $6,005 million of revolving credit
agreements with 69 banks pursuant to which GE Capital has the right to borrow
funds for periods exceeding one year. A total of $4,627 million of these lines
were also available for use by GE Capital Services. In addition, at December 31,
1993, approximately $105 million of committed lines of credit were directly
available to a foreign affiliate of GE Capital. Also, at December 31, 1993,
approximately $3,045 million of GE Company's credit lines were available for use
by GE Capital or the Corporation. During 1993 the Corporation did not borrow
under any of these credit lines.
At December 31, 1993 Kidder, Peabody had established lines of credit
aggregating $6,058 million of which $3,110 million was available on an unsecured
basis. Borrowings from banks were primarily unsecured demand obligations, at
interest rates approximating broker call loan rates, to finance inventories of
securities and to facilitate the securities settlement process.
The Corporation compensates banks for credit facilities in the form of fees
which were immaterial for the past three years.
NOTE 12. INSURANCE RESERVES AND ANNUITY BENEFITS
The Corporation adopted SFAS No. 113, "Accounting and Reporting for Reinsurance
of Short-Duration and Long-Duration Contracts," during 1993. The principal
effect of this Statement was to report reinsurance receivables and prepaid
reinsurance premiums, a total of $1,818 million at December 31, 1993, as assets.
Such amounts were reported as reductions of insurance reserves at the end of
1992.
Insurance reserves and annuity benefits represents policyholders' benefits,
unearned premiums and provisions for policy losses and benefits relating to
insurance and annuity businesses. The related balances at December 31, 1993 and
1992 are as follows:
<TABLE>
<CAPTION>
(In millions) 1993 1992
------- ------
<S> <C> <C>
Insurance reserves and annuity benefits:
Annuity benefits.................................................. $ 8,894 $ --
Other policyholder benefits....................................... 5,862 2,061
Property and casualty reserves.................................... 5,798 3,881
Financial and mortgage guarantee reserves......................... 607 412
Unearned premiums................................................. 1,748 1,594
------- ------
$22,909 $7,948
------- ------
------- ------
</TABLE>
Financial guarantees, principally FGIC's guarantees on municipal bonds and
structured debt issues, amounted to approximately $101.4 billion and $81.3
billion at year-end 1993 and 1992, respectively, before reinsurance of $17.3
billion and $13.7 billion, respectively. Related unearned premiums amounted to
$803 million and $571 million at December 31, 1993 and 1992, respectively. As of
December 31, 1993 and 1992, reserves for losses and loss adjustment expenses
were $96 million and $40 million, respectively.
The Corporation's mortgage insurance operations underwrite residential
mortgage guarantee insurance. Total risk in force aggregated $27.0 billion and
$21.3 billion at December 31, 1993 and 1992, respectively; related unearned
premiums amounted to $276 million at December 31, 1993 and $236 million at
December 31, 1992. Case basis loss reserves and loss adjustment expense reserves
are provided in an amount sufficient to pay all estimated losses in the
portfolio, including those incurred but not reported. As of December 31, 1993
and 1992, reserves for losses and loss adjustment expenses were $511 million and
$372 million, respectively.
Interest rates credited to annuity contracts in 1993 ranged from 3.7% to
9.7%. For most annuities, interest rates to be credited are redetermined by
management on an annual basis.
Page 21
<PAGE> 24
The Corporation's Specialty Insurance businesses are involved significantly
in the reinsurance business, ceding reinsurance on both a pro-rata and an excess
basis. The maximum amount of individual life insurance retained on any one life
is $740,000.
When the Corporation cedes business to third parties, it is not relieved of
its primary obligation to policyholders and reinsureds. Consequently, the
Corporation establishes allowances for amounts deemed uncollectible due to the
failure of reinsurers to honor their obligations. The Corporation monitors both
the financial condition of individual reinsurers and risk concentrations arising
from similar geographic regions, activities and economic characteristics of
reinsurers.
The effects of reinsurance on premiums written and earned during 1993, 1992
and 1991 were as follows:
<TABLE>
<CAPTION>
WRITTEN PREMIUMS EARNED PREMIUMS
---------------------------- ----------------------------
1993 1992 1991 1993 1992 1991
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Direct......................... $1,639 $1,323 $ 797 $1,480 $1,154 $ 700
Assumed........................ 2,540 2,030 1,794 2,424 1,989 1,739
Ceded.......................... (223) (453) (436) (207) (456) (431)
------ ------ ------ ------ ------ ------
Net Premiums................... $3,956 $2,900 $2,155 $3,697 $2,687 $2,008
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
</TABLE>
Reinsurance recoveries recognized as a reduction of insurance losses and
policyholder and annuity benefits amounted to $304 million, $525 million and
$478 million for the periods ended December 31, 1993, 1992 and 1991,
respectively.
NOTE 13. EQUITY CAPITAL
Equity capital is owned entirely by GE Company. Cash dividends paid were $610
million in 1993 and $500 million in 1992 and $350 million in 1991. In 1992, GE
Company contributed to the Corporation the assets of GE Computer Services and
the minority interest in Financial Insurance Group. These contributions were
reflected as a $155 million ($134 million and $21 million, respectively)
addition to the Corporation's additional paid-in capital. Total GE Capital
Services preferred stock at both December 31, 1993 and 1992 was $510 million. In
the accompanying financial statements, such preferred shares are shown as issued
to and held by consolidated affiliates.
At December 31, 1993 and 1992, the statutory capital and surplus of the
Corporation's insurance affiliates totaled $4,829 million and $3,416 million,
respectively; amounts available for the payment of dividends without the
approval of the insurance regulators totaled $382 million and $322 million,
respectively.
As a securities broker-dealer, Kidder, Peabody is required to maintain a
minimum net capital level by the Securities and Exchange Commission. At December
31, 1993, Kidder, Peabody had net capital of $625 million, $583 million in
excess of the minimum net capital requirement.
Other equity at December 31, 1993 and 1992 consisted of:
<TABLE>
<CAPTION>
(In millions) 1993 1992
---- ----
<S> <C> <C>
Foreign currency translation adjustments.............................. $(92) $(45)
Unrealized gains on investment securities--net........................ 811 36
---- ----
$719 $ (9)
---- ----
---- ----
</TABLE>
NOTE 14. MINORITY INTEREST IN EQUITY OF CONSOLIDATED AFFILIATES
Minority interest in equity of consolidated affiliates includes 8,750 shares of
$100 par value variable cumulative preferred stock issued by GE Capital with a
liquidation preference value of $875 million. Dividend rates on this preferred
stock ranged from 2.33% to 2.79% during 1993 and from 2.44% to 3.49% during
1992.
NOTE 15. EARNED INCOME
Included in earned income from financing leases were gains on the sale of
equipment at lease completion of $145 million in 1993, $126 million in 1992 and
$147 million in 1991.
Page 22
<PAGE> 25
Noncancelable future rentals due from customers for equipment on operating
leases as of December 31, 1993 totaled $6,133 million and are due as follows:
1994, $2,036 million; 1995, $1,455 million; 1996, $879 million; 1997, $458
million; 1998, $316 million and $989 million thereafter.
Amortization of deferred investment tax credit was $29 million, $26 million
and $25 million in 1993, 1992 and 1991, respectively.
Time sales, loan and investment and other income includes the Corporation's
share of earnings from equity investees of $106 million, $72 million and $84
million for 1993, 1992 and 1991, respectively.
NOTE 16. INTEREST AND DISCOUNT EXPENSES
Interest and discount expenses reported in the Statement of Current and Retained
Earnings are net of interest income on temporary investments of excess funds of
$42 million for 1993, $48 million for 1992, and $54 million for 1991, and net of
capitalized interest of $5 million for 1993, $6 million for 1992 and $8 million
for 1991.
For purposes of computing the ratio of earnings to fixed charges (the
"ratio") in accordance with applicable Securities and Exchange Commission
instructions, earnings consist of net earnings adjusted for cumulative effect of
change in accounting principle, the provision for income taxes, minority
interest and fixed charges. Fixed charges consist of interest on all
indebtedness and one-third of annual rentals, which the Corporation believes is
a reasonable approximation of the interest factor of such rentals. The ratio was
1.42 for 1993, compared with 1.33 for 1992 and 1.25 for 1991.
NOTE 17. OPERATING AND ADMINISTRATIVE EXPENSES
Employees and retirees of the Corporation and its affiliates are covered under a
number of pension, health and life insurance plans. The principal pension plan
is the GE Company pension plan, a defined benefit plan, while employees of
certain affiliates, including Employers Reinsurance and Kidder, Peabody, are
covered under separate plans. The Corporation provides health and life insurance
benefits to certain of its retired employees, principally through GE Company's
benefit program, as well as through plans sponsored by Employers Reinsurance and
Kidder, Peabody and other affiliates. The annual cost to the Corporation of
providing these benefits is not material and the net transition obligation
arising from the 1991 adoption of the new accounting standard, SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pension," was not
separately determinable, except for the Employers Reinsurance and Kidder,
Peabody plans, where the charge to operations aggregated $19 million after a
deferred tax benefit of $12 million.
GE Company adopted SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," in the second quarter of 1993. The Corporation adopted this standard
in conjunction with its parent. This Statement requires that employers expense
the costs of postemployment benefits (as distinct from postretirement pension,
medical and life insurance benefits) over the working lives of their employees.
This change principally affects the Corporation's accounting for severance
benefits, which previously were expensed when the severance event occurred. The
net transition obligation related to the Corporation's employees covered under
GE Company postemployment benefit plans is not separately determinable from the
GE Company plans as a whole; accordingly, there is no financial statement impact
on the Corporation. The net transition obligation for employees covered under
separate plans is not material.
Rental expense for 1993 aggregating $498 million, compared with $331
million for 1992 and $169 million for 1991, was principally for the rental of
office space, data processing equipment and railcars. Minimum future rental
commitments under noncancelable leases are: 1994, $404 million; 1995, $364
million; 1996, $340 million; 1997, $319 million; 1998, $296 million and $1,856
million thereafter. The Corporation, as a lessee, has no material lease
agreements classified as capital leases.
Amortization of deferred insurance acquisition costs charged to operations
in 1993, 1992 and 1991 was $817 million, $624 million and $377 million,
respectively.
Page 23
<PAGE> 26
NOTE 18. INCOME TAXES
Income tax provision from operations is summarized in the following table:
<TABLE>
<CAPTION>
(In millions) 1993 1992 1991
---- ---- -----
<S> <C> <C> <C>
Estimated taxes payable (recoverable)....................... $507 $374 $(192)
Effect of temporary differences............................. 341 167 555
Investment tax credit deferred (amortized) -- net........... (7) (5) 19
---- ---- -----
$841 $536 $ 382
---- ---- -----
---- ---- -----
</TABLE>
GE Company files a consolidated Federal income tax return which includes GE
Capital Services. The provisions for estimated taxes payable (recoverable)
include the effect of the Corporation and its affiliates on the consolidated
tax. Estimated income taxes payable were $144 million and $73 million at
December 31, 1993 and 1992, respectively.
A reconciliation of the Corporation's actual income tax rate to the U.S.
Federal statutory rate is shown in the following table:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- -----
<S> <C> <C> <C>
Statutory U.S. Federal income tax rate........................ 35.0% 34.0% 34.0%
Increase (reduction) in rate resulting from:
Rate increase -- deferred taxes............................... 4.3 -- --
Tax-exempt income............................................. (6.8) (8.1) (10.1)
Change in tax-rate assumptions for leveraged leases........... (1.3) (2.1) (2.4)
State and local taxes......................................... 1.9 1.6 0.9
Other -- net.................................................. (1.3) 0.9 0.7
---- ---- -----
Actual income tax rate........................................ 31.8% 26.3% 23.1%
---- ---- -----
---- ---- -----
</TABLE>
The tax effects of principal temporary differences are shown in the
following table:
<TABLE>
<CAPTION>
(In millions) 1993 1992
------- -------
<S> <C> <C>
Assets
Provision for losses........................................ $ (831) $ (715)
Insurance reserves.......................................... (370) (344)
AMT credit carry forwards................................... -- (200)
Other....................................................... (1,003) (551)
------- -------
Total deferred tax assets........................................ (2,204) (1,810)
------- -------
Liabilities
Financing leases............................................ 4,917 4,553
Operating leases............................................ 966 811
Net unrealized gains on securities.......................... 437 19
Tax transfer leases......................................... 340 329
Other....................................................... 952 967
------- -------
Total deferred tax liability..................................... 7,612 6,679
------- -------
Net deferred tax liability....................................... $ 5,408 $ 4,869
------- -------
------- -------
</TABLE>
Page 24
<PAGE> 27
NOTE 19. INDUSTRY SEGMENT DATA
Industry segment operating data and identifiable assets for the years 1993, 1992
and 1991 are shown below. Corporate level expenses principally include interest
expense related to acquisition debt.
<TABLE>
<CAPTION>
(In millions) 1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Earned income:
Specialty Insurance......................................... $ 4,862 $ 3,863 $ 2,989
Consumer Services........................................... 4,062 3,315 3,373
Equipment Management........................................ 3,601 2,756 2,331
Mid-Market Financing........................................ 1,652 1,499 1,440
Securities Broker-Dealer.................................... 4,861 4,022 3,346
Specialized Financing....................................... 3,084 2,974 2,925
-------- -------- --------
22,122 18,429 16,404
Corporate................................................ 15 11 (5)
-------- -------- --------
Total earned income........................................... $ 22,137 $ 18,440 $ 16,399
-------- -------- --------
-------- -------- --------
Segment operating profit:
Specialty Insurance......................................... $ 770 $ 641 $ 501
Consumer Services........................................... 695 525 478
Equipment Management........................................ 377 368 381
Mid-Market Financing........................................ 454 352 248
Securities Broker-Dealer.................................... 439 300 119
Specialized Financing....................................... 201 121 220
-------- -------- --------
Total segment operating profit................................ 2,936 2,307 1,947
Corporate................................................... (288) (272) (290)
-------- -------- --------
Earnings before taxes......................................... 2,648 2,035 1,657
Income tax provision.......................................... 841 536 382
-------- -------- --------
Net earnings from operations.................................. $ 1,807 $ 1,499 $ 1,275
-------- -------- --------
-------- -------- --------
Identifiable assets at December 31:
Specialty Insurance......................................... $ 18,915 $ 14,624 $ 11,812
Consumer Services........................................... 45,747 24,185 21,913
Equipment Management........................................ 14,277 12,464 9,658
Mid-Market Financing........................................ 14,879 13,647 11,386
Securities Broker-Dealer.................................... 85,009 55,455 41,218
Specialized Financing....................................... 31,951 31,911 31,597
Corporate................................................... 952 2,238 230
-------- -------- --------
Total Assets.................................................. $211,730 $154,524 $127,814
-------- -------- --------
-------- -------- --------
</TABLE>
Page 25
<PAGE> 28
NOTE 20. QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial data for 1993 and 1992 are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------------------------------
MARCH JUNE SEPTEMBER DECEMBER
--------------- --------------- --------------- ---------------
(In millions) 1993 1992 1993 1992 1993 1992 1993 1992
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earned income.......................... $4,763 $4,301 $5,129 $4,493 $5,919 $4,761 $6,326 $4,885
------ ------ ------ ------ ------ ------ ------ ------
Expenses:
Interest and discount................ 1,422 1,478 1,585 1,527 1,896 1,521 1,570 1,596
Operating and administrative
(including minority interest)...... 1,547 1,313 1,601 1,372 1,799 1,583 2,280 1,667
Insurance losses and policyholder and
annuity benefits................... 545 443 692 544 809 551 1,126 419
Provision for losses on financing
receivables........................ 255 251 292 313 200 176 240 316
Depreciation and amortization of
buildings and equipment and
equipment on operating leases...... 350 299 376 253 382 388 522 395
------ ------ ------ ------ ------ ------ ------ ------
Earnings before income taxes........... 644 517 583 484 833 542 588 492
Provision for income taxes............. 193 146 169 137 340 135 139 118
------ ------ ------ ------ ------ ------ ------ ------
Net earnings........................... $ 451 $ 371 $ 414 $ 347 $ 493 $ 407 $ 449 $ 374
------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------
</TABLE>
NOTE 21. RESTRICTED NET ASSETS OF AFFILIATES
Various state and foreign regulations require that the Corporation's investment
in certain affiliates, without regard to net unrealized after-tax gains on
investment securities which were $663 million at December 31, 1993, be
maintained at specified minimum levels to provide additional protection for
insurance customers, investment certificate holders and passbook savings
depositors. At December 31, 1993, such minimum investment levels aggregated
approximately $5,700 million.
NOTE 22. SUPPLEMENTAL CASH FLOW INFORMATION
Cash used or provided in 1993, 1992 and 1991 included interest paid by the
Corporation of $6,216 million, $5,907 million and $6,384 million, respectively
and income taxes (paid) recovered by the Corporation of $(189) million, $(97)
million and $99 million, respectively.
NOTE 23. FAIR VALUES OF FINANCIAL INSTRUMENTS
As required under generally accepted accounting principles, financial
instruments are presented in the accompanying financial statements -- generally
at either cost or fair value, based on both the characteristics of and
management intentions regarding the instruments. Management believes that the
financial statement presentation is the most useful for displaying the
Corporation's results. However, SFAS No. 107, "Disclosure About Fair Value of
Financial Instruments," requires disclosure of an estimate of the fair value of
certain financial instruments. These disclosures disregard management intentions
regarding the instruments, and therefore, management believes that this
information may be of limited usefulness.
Apart from the Corporation's own borrowings, certain marketable securities
and financial instruments of Kidder, Peabody, relatively few of the
Corporation's financial 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 nature, difficult and highly judgmental, for a limited number
of instruments, alternative valuation techniques indicate values sufficiently
diverse that the only practicable disclosure is a range of values. Users of the
following data are cautioned that limitations in the estimation techniques may
have produced disclosed values different from those that could have been
realized at December 31, 1993 or 1992. Moreover, the disclosed values are
representative of fair values only as of the dates indicated, inasmuch as
interest rates, performance of the economy, tax policies and other variables
significantly impact fair valuations. Cash and equivalents, trading securities,
reverse repurchase agreements, repurchase agreements and other receivables have
been excluded as their carrying amounts and fair values are the same, or
approximately the same.
Page 26
<PAGE> 29
Values were estimated as follows:
INVESTMENT SECURITIES. Based on quoted market prices or dealer quotes for
actively traded securities. Value of other such securities was estimated using
quoted market prices for similar securities.
TIME SALES, LOANS AND RELATED PARTICIPATIONS. Based on quoted market prices,
recent transactions, market comparables and/or discounted future cash flows,
using rates at which similar loans would have been made to similar borrowers.
INVESTMENTS IN AND ADVANCES TO NON-CONSOLIDATED AFFILIATES. Based on market
comparables, recent transactions and/or discounted future cash flows. These
equity interests were generally acquired in connection with financing
transactions and, for purposes of this disclosure, fair values were estimated.
OTHER FINANCIAL INSTRUMENTS. Based on recent 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.
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.
ANNUITY BENEFITS. Based on expected future cash flows, discounted at currently
offered discount rates for immediate annuity contracts or cash surrender value
for single premium deferred annuities.
FINANCIAL GUARANTIES OF INSURANCE AFFILIATES. Based on future cash flows,
considering expected renewal premiums, claims, refunds and servicing costs,
discounted at a market rate.
The carrying amounts and estimated fair values of the Corporation's
financial instruments at December 31, 1993 and 1992 are as follows:
<TABLE>
<CAPTION>
1993 1992
---------------------------- ----------------------------
CARRYING ESTIMATED CARRYING ESTIMATED
ASSETS (LIABILITIES) AMOUNT FAIR VALUE AMOUNT FAIR VALUE
- -------------------- -------- --------------- -------- ---------------
(In millions)
<S> <C> <C> <C> <C>
Investment securities................... $ 26,792 $26,792 $ 11,224 $11,634
Time sales, loans and related
participations........................ 39,678 41,410-40,685 36,131 37,420-36,240
Investments in and advances to non-
consolidated affiliates............... 2,079 2,830-2,635 1,720 2,295-2,180
Other financial instruments............. 6,045 6,085-5,960 2,430 2,545-2,405
Annuity benefits........................ (8,894) (8,660) -- --
Borrowings(a) (b)....................... (85,888) (87,020) (75,140) (76,400)
Financial guaranties of insurance
affiliates............................ (1,312) (135)-(220) (1,036) 200-55
</TABLE>
- ---------------
(a) Swap contracts are integral to the Corporation's goal of achieving the
lowest borrowing costs for particular funding strategies. The above fair
values of borrowings include fair values of associated interest rate and
currency swaps. At December 31, 1993, the approximate settlement values of
the Corporation's swaps were $340 million. Without such swaps, estimated
fair values of the Corporation's borrowings would have been $86,680 million.
Approximately 90% of the notional amount of swaps outstanding at December
31, 1993, was with counterparties having credit ratings of Aa/AA or better.
(b) Proceeds from borrowings are invested in a variety of activities, including
both financial instruments, shown in the preceding table, as well as leases,
for which fair value disclosures are not required. When evaluating the
extent to which estimated fair value of borrowings exceeds the related
carrying amount, users should consider that the fair value of the fixed
payment stream for long-term leases would increase as well.
Page 27
<PAGE> 30
NOTE 24. GEOGRAPHIC SEGMENT INFORMATION
Geographic segment operating data and total assets for the years 1993,
1992, and 1991 are as follows:
<TABLE>
<CAPTION>
EARNED INCOME OPERATING PROFIT
------------------------------ ------------------------
(In millions) 1993 1992 1991 1993 1992 1991
-------- -------- -------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
United States............................ $ 19,290 $ 16,233 $ 14,973 $2,359 $1,790 $1,500
Other areas of the world................. 2,847 2,207 1,426 289 245 157
-------- -------- -------- ------ ------ ------
Total.................................. $ 22,137 $ 18,440 $ 16,399 $2,648 $2,035 $1,657
-------- -------- -------- ------ ------ ------
-------- -------- -------- ------ ------ ------
</TABLE>
<TABLE>
<CAPTION>
TOTAL ASSETS
------------------------------
(In millions) 1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
United States............................ $189,758 $140,483 $119,129
Other areas of the world................. 21,972 14,041 8,685
-------- -------- --------
Total.................................. $211,730 $154,524 $127,814
-------- -------- --------
-------- -------- --------
</TABLE>
U.S. amounts were derived from the Corporation's operations located in the
U.S. The Corporation manages its exposure to currency movements by committing to
future exchanges of currencies at specified prices and dates. Commitments
outstanding at December 31, 1993 and 1992, were $1,833 million and $2,084
million, respectively, excluding Kidder, Peabody.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable
Page 28
<PAGE> 31
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Omitted
ITEM 11. EXECUTIVE COMPENSATION.
Omitted
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Omitted
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Omitted
Page 29
<PAGE> 32
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. FINANCIAL STATEMENTS
Included in Part II of this report:
Independent Auditors' Report
Statement of Current and Retained Earnings for each of the years in
the three-year period ended December 31, 1993
Statement of Financial Position at December 31, 1993 and 1992
Statement of Cash Flows for each of the years in the three-year
period ended December 31, 1993
Notes to Financial Statements
(a) 2. FINANCIAL STATEMENT SCHEDULES
III. Condensed financial information of registrant.
All other schedules are omitted because of the absence of conditions
under which they are required or because the required information is
shown in the financial statements or notes thereto.
(a) 3. EXHIBIT INDEX
The exhibits listed below, as part of Form 10-K, are numbered in conformity
with the numbering used in Item 601 of Regulation S-K of the Securities and
Exchange Commission.
EXHIBIT
NUMBER DESCRIPTION
3 (i) A complete copy of the Certificate of Incorporation of
the Corporation as last amended on February 10, 1993
and currently in effect.
3 (ii) A complete copy of the By-Laws of the Corporation as
last amended on January 4, 1994 and currently in
effect.
4 (iii) 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 all subsidiaries for which
consolidated or unconsolidated financial statements
are required to be filed.
12 Computation of ratio of earnings to fixed charges.
23(ii) Consent of KPMG Peat Marwick.
24 Power of Attorney
99 Income Maintenance Agreement dated March 28, 1991 be-
tween General Electric Company and General Electric
Capital Corporation. (Incorporated by reference to
Exhibit 28 of the Corporation's Form 10-K Report for
the year ended December 31, 1992).
(b) REPORTS ON FORM 8-K
None.
Page 30
<PAGE> 33
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
SCHEDULE III -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
GENERAL ELECTRIC CAPITAL SERVICES, INC.
CONDENSED STATEMENT OF FINANCIAL POSITION
<TABLE>
<CAPTION>
(In millions) DECEMBER 31,
--------------------
1993 1992
------- -------
<S> <C> <C>
ASSETS
Cash and equivalents..................................................... $ 100 $ 3
Investment securities.................................................... 100 --
Receivables -- net....................................................... -- 26
Investment in and advances to consolidated affiliates.................... 13,748 11,646
------- -------
Total assets............................................................. $13,948 $11,675
------- -------
------- -------
LIABILITIES AND EQUITY
Notes payable within one year............................................ $ 2,340 $ 1,989
Accounts and drafts payable.............................................. 211 238
Other liabilities........................................................ 78 54
------- -------
Total liabilities................................................... 2,629 2,281
------- -------
Cumulative preferred stock, $10,000 par value (80,000 shares authorized;
51,000 shares issued and held by consolidated affiliates at December
31, 1993 and 1992)..................................................... 510 510
Common stock, $10,000 par value (101 shares authorized and
outstanding)........................................................... 1 1
Additional paid-in capital............................................... 1,877 1,877
Retained earnings........................................................ 8,212 7,015
Other.................................................................... 719 (9)
------- -------
Total equity........................................................ 11,319 9,394
------- -------
Total liabilities and equity............................................. $13,948 $11,675
------- -------
------- -------
</TABLE>
See Notes to Condensed Financial Statements.
Page 31
<PAGE> 34
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
SCHEDULE III -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT -- (CONTINUED)
GENERAL ELECTRIC CAPITAL SERVICES, INC.
CONDENSED STATEMENT OF CURRENT AND RETAINED EARNINGS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
(In millions) 1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Earned income.................................................. $ -- $ -- $ --
------ ------ ------
Expenses
Interest and discount........................................ 91 77 133
Operating and administrative................................. 211 185 122
------ ------ ------
Loss before equity in earnings from operations of consolidated
affiliates, income taxes and cumulative effect of change in
accounting principle......................................... (302) (262) (255)
Income tax benefit............................................. 87 67 71
Cumulative effect to January 1, 1991 of change in accounting
principle for postretirement benefits other than pensions.... -- -- (19)
Net earnings from operations of consolidated affiliates........ 2,022 1,694 1,459
------ ------ ------
Net earnings................................................... 1,807 1,499 1,256
Cash dividends paid............................................ (610) (500) (350)
Retained earnings at January 1................................. 7,015 6,016 5,110
------ ------ ------
Retained earnings at December 31............................... $8,212 $7,015 $6,016
------ ------ ------
------ ------ ------
</TABLE>
See Notes to Condensed Financial Statements.
Page 32
<PAGE> 35
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
SCHEDULE III -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT -- (CONTINUED)
GENERAL ELECTRIC CAPITAL SERVICES, INC.
CONDENSED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
(In millions) 1993 1992 1991
----- ----- -----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES................................. $ 412 $ 387 $ 433
CASH FLOWS FROM INVESTING ACTIVITIES
Change in investment in and advances to consolidated affiliates.... 18 -- (236)
Net change in investment securities................................ (100) 41 34
Net change in other receivables.................................... 26 (25) 12
----- ----- -----
Cash provided by (used by) investing activities.................... (56) 16 (190)
----- ----- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in borrowings (less than 90-day maturities)............. 351 99 43
Preferred stock issued............................................. -- -- 50
Cash dividends paid................................................ (610) (500) (350)
----- ----- -----
Cash used by financing activities.................................. (259) (401) (257)
INCREASE (DECREASE) IN CASH AND EQUIVALENTS DURING THE YEAR.......... 97 2 (14)
CASH AND EQUIVALENTS AT BEGINNING OF YEAR............................ 3 1 15
----- ----- -----
CASH AND EQUIVALENTS AT END OF YEAR.................................. $ 100 $ 3 $ 1
----- ----- -----
----- ----- -----
</TABLE>
See Notes to Condensed Financial Statements.
Page 33
<PAGE> 36
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
SCHEDULE III -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT -- (CONCLUDED)
GENERAL ELECTRIC CAPITAL SERVICES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
INCOME TAX BENEFIT
GE Company files a consolidated Federal income tax return which includes GE
Capital Services. Income tax benefit includes the effect of the Corporation on
the consolidated income tax.
DIVIDENDS FROM AFFILIATES
In 1993 and 1992, GE Capital Services received dividends of $150 million
and $200 million, respectively, from Employers Reinsurance and $460 million and
$300 million, respectively, from GE Capital.
Page 34
<PAGE> 37
EXHIBIT 4(iii)
March 22, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Subject: General Electric Capital Services, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 1993 -- File No. 0-14804
Dear Sirs:
Neither General Electric Capital Services, Inc. (the "Corporation") nor any
of its subsidiaries has outstanding any instrument with respect to its long-term
debt under which the total amount of securities authorized exceeds 10% of the
total assets of the registrant and its subsidiaries on a consolidated basis. In
accordance with paragraph (b)(4)(iii) of Item 601 of Regulation S-K (17 CFR
sec. 229.601), the Corporation hereby agrees to furnish to the Securities and
Exchange Commission, upon request, a copy of each instrument which defines the
rights of holders of such long-term debt.
Very truly yours,
GENERAL ELECTRIC CAPITAL SERVICES, INC.
By: /s/ J. A. PARKE
---------------------------------------
J. A. Parke,
Senior Vice President, Finance
Page 35
<PAGE> 38
EXHIBIT 12
GENERAL ELECTRIC CAPITAL SERVICES, INC.
AND CONSOLIDATED AFFILIATES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------
(Dollar amounts in millions) 1993 1992 1991 1990 1989
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net earnings........................................ $1,807 $1,499 $1,256 $1,094 $ 927
Provision for income taxes.......................... 841 536 382 301 211
Minority interest................................... 134 40 33 41 46
Cumulative effect to January 1, 1991 of change in
accounting principle for postretirement benefits
other
than pensions..................................... -- -- 19 -- --
------ ------ ------ ------ ------
Earnings before income taxes, minority interest and
cumulative effect of change in accounting
principle......................................... 2,782 2,075 1,690 1,436 1,184
------ ------ ------ ------ ------
Fixed charges:
Interest and discount............................. 6,519 6,176 6,598 6,598 6,085
One-third of rentals.............................. 166 110 56 53 45
------ ------ ------ ------ ------
Total fixed charges................................. 6,685 6,286 6,654 6,651 6,130
------ ------ ------ ------ ------
Less interest capitalized, net of amortization...... 4 6 7 19 11
------ ------ ------ ------ ------
Earnings before income taxes, minority interest and
cumulative effect of change in accounting
principle, plus fixed charges..................... $9,463 $8,355 $8,337 $8,068 $7,303
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of earnings to fixed charges.................. 1.42 1.33 1.25 1.21 1.19
------ ------ ------ ------ ------
------ ------ ------ ------ ------
</TABLE>
Page 36
<PAGE> 39
EXHIBIT 23(ii)
To the Board of Directors
General Electric Capital Services, Inc.
We consent to incorporation by reference in the Registration Statement on
Form S-3 (No. 33-7348) of General Electric Capital Services, Inc. of our report
dated February 11, 1994, relating to the statement of financial position of
General Electric Capital Services, Inc. and consolidated affiliates as of
December 31, 1993 and 1992 and the related statements of current and retained
earnings and cash flows and related schedules for each of the years in the
three-year period ended December 31, 1993, which report appears in the December
31, 1993 annual report on Form 10-K of General Electric Capital Services, Inc.
Our report refers to a change in 1993 in the method of accounting for certain
investments in securities.
/s/ KPMG PEAT MARWICK
Stamford, Connecticut
March 23, 1994
Page 37
<PAGE> 40
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, being
directors and/or officers of General Electric Capital Services, Inc., a Delaware
corporation (the "Corporation"), hereby constitutes and appoints Gary C. Wendt,
James A. Parke, John P. Malfettone and Burton J. Kloster, Jr., and each of them,
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and in his name, place and stead in any and all
capacities, to sign one or more Annual Reports for the Corporation's fiscal year
ended December 31, 1993, on Form 10-K under the Securities Exchange Act of 1934,
as amended, or such other form as such attorney-in-fact may deem necessary or
desirable, any amendments thereto, and all additional amendments thereto 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 to the end that such Annual Report or
Annual Reports shall comply with the Securities Exchange Act of 1934, as
amended, and the applicable Rules and Regulations of the Securities and Exchange
Commission adopted or issued pursuant thereto, as fully and to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them or their or his
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 hand this
23rd day of March, 1994.
/s/ GARY C. WENDT /s/ JAMES A. PARKE
- ---------------------------------------- ---------------------------------
Gary C. Wendt, James A. Parke,
Chairman of the Board, Senior Vice President, Finance
President and Chief Executive Officer (Principal Financial Officer)
(Principal Executive Officer)
/s/ JOHN P. MALFETTONE
----------------------------------
John P. Malfettone
Vice President and Comptroller
(Principal Accounting Officer)
<TABLE>
<S> <C>
/s/ KAJ AHLMANN /s/ BENJAMIN W. HEINEMAN, JR.
- ---------------------------------------- --------------------------------------
Kaj Ahlmann, Director Benjamin W. Heineman, Jr., Director
/s/ NIGEL D. T. ANDREWS /s/ MICHAEL D. LOCKHART
- ---------------------------------------- --------------------------------------
Nigel D. T. Andrews, Director Michael D. Lockhart, Direcotr
/s/ JAMES R. BUNT /s/ HUGH J. MURPHY
- ---------------------------------------- --------------------------------------
James R. Bunt, Director Hugh J. Murphy, Director
/s/ DENIS J. NAYDEN
- ---------------------------------------- --------------------------------------
Michael A. Carpenter, Director Denis J. Nayden, Director
/s/ DENNIS D. DAMMERMAN /s/ JOHN M. SAMUELS
- ---------------------------------------- --------------------------------------
Dennis D. Dammerman, Director John M. Samuels, Director
/s/ PAOLO FRESCO /s/ EDWARD D. STEWART
- ---------------------------------------- --------------------------------------
Paolo Fresco, Director Edward D. Stewart, Director
/s/ DALE F. FREY /s/ JOHN F. WELCH, JR.
- ---------------------------------------- --------------------------------------
Dale F. Frey, Director John F. Welch, Jr., Director
</TABLE>
A MAJORITY OF THE BOARD OF DIRECTORS
Page 38
<PAGE> 41
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 SERVICES, INC.
March 23, 1994 By: /s/ GARY C. WENDT
-------------------------------------------
(GARY C. WENDT)
President
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 date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ GARY C. WENDT Chairman of the Board, March 23, 1994
- ---------------------------------------- President and Chief Executive
(GARY C. WENDT) Officer (Principal Executive Of-
ficer)
/s/ JAMES A. PARKE Senior Vice President, Finance March 23, 1994
- ---------------------------------------- (Principal Financial Officer)
(JAMES A. PARKE)
/s/ JOHN P. MALFETTONE Vice President and Comptroller March 23, 1994
- ---------------------------------------- (Principal Accounting Officer)
(JOHN P. MALFETTONE)
KAJ AHLMANN Director
NIGEL D. T. ANDREWS Director
JAMES R. BUNT Director
DENNIS D. DAMMERMAN Director
PAOLO FRESCO Director
DALE F. FREY Director
BENJAMIN W. HEINEMAN, JR. Director /s/ JOHN P. MALFETTONE
-----------------------------
(JOHN P. MALFETTONE)
MICHAEL D. LOCKHART Director Attorney-in-fact
HUGH J. MURPHY Director
March 23, 1994
DENIS J. NAYDEN Director
JOHN M. SAMUELS Director
EDWARD D. STEWART Director
JOHN F. WELCH, JR. Director
</TABLE>
A majority of the Board of Directors
Page 39
<PAGE> 42
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
-------- ----------- ----------
<S> <C> <C>
3 (i) A complete copy of the Certificate of Incorporation of the
Corporation as last amended on February 10, 1993 and currently in
effect.
3 (ii) A complete copy of the By-Laws of the Corporation as last amended on
January 4, 1994 and currently in effect.
4 (iii) 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 all subsidiaries for
which consolidated or unconsolidated financial statements are
required to be filed.
12 Computation of ratio of earnings to fixed charges.
23 (ii) Consent of KPMG Peat Marwick.
24 Power of Attorney
99 Income Maintenance Agreement dated March 28, 1991 between General
Electric Company and General Electric Capital Corporation.
(Incorporated by reference to Exhibit 28 of the Corporation's Form
10-K Report for the year ended December 31, 1992).
</TABLE>
<PAGE> 1
State of Delaware
Office of Secretary of State
I, GLENN C. KENTON, SECRETARY OF STATE OF THE STATE OF DELAWARE
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE
OF INCORPORATION OF GENERAL ELECTRIC FINANCIAL SERVICES, INC. FILED IN
THIS OFFICE ON THE FIFTEENTH DAY OF MAY, A.D. 1984, AT 2 O'CLOCK P.M.
/s/ GLENN C. KENTON
___________________________________
Glenn C. Kenton, Secretary of State
AUTHENTICATION:
DATE: 05/15/1984
<PAGE> 2
CERTIFICATE OF INCORPORATION
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
1. The name of the corporation is
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
2. The address of its registered office in the State
of Delaware is No. 100 West Tenth Street, in the City of
Wilmington, County of New Castle. The name of its registered
agent at such address is The Corporation Trust Company.
3. The nature of the business or purposes to be
conducted or promoted is to engage in any lawful act or activity
for which corporations may be organized under the General
Corporation Law of Delaware.
4. The total number of shares of stock which the
corporation shall have authority to issue is one hundred (100)
and the par value of each of such shares is Ten Thousand Dollars
($10,000.00), amounting in the aggregate to One Million Dollars
($1,000,000.00).
5. The name and mailing address of each incorporator
is as follows:
<PAGE> 3
NAME MAILING ADDRESS
[S] [C]
D. A. Hampton 100 West Tenth Street
Wilmington, Delaware 19801
S. M. Fraticelli 100 West Tenth Street
Wilmington, Delaware 19801
S. K. Zimmerman 100 West Tenth Street
Wilmington, Delaware 19801
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers
conferred by statute, the board of directors is expressly autho-
rized:
A. To make, alter or repeal the by-laws of the corpo-
ration.
B. To exercise all such powers and to do all such acts
and things as may be exercised or done by the corporation;
subject, nevertheless, to the provisions of the statutes of the
State of Delaware, of this certificate of incorporation and of
any by-laws from time to time made by the stockholders which
expressly provide that they may not be altered, amended or
repealed by the board of directors.
8. Elections of directors need not be by written
ballot unless the by-laws of the corporation shall so provide.
9. Meetings of stockholders may be held within or
without the State of Delaware, as the by-laws may provide.
books of the corporation may be kept (subject to any provision
contained in the statutes) outside the State of Delaware at such
place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation.
<PAGE> 4
10. The corporation reserves the right to amend,
alter, change or repeal any provision contained in this certifi-
cate of incorporation in the manner now or hereafter prescribed
by statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
WE, THE UNDERSIGNED, being all of the incorporators
hereinbefore named, for the purpose of forming a corporation
pursuant to the General Corporation Law of the State of Delaware,
do make this certificate, hereby declaring and certifying that
this is our act and deed and the facts herein stated are true,
and accordingly have hereunto set our hands this 15th day of
May , 1984.
D. A. Hampton
______________
D. A. Hampton
S. M. Fraticelli
_______________
S. M. Fraticelli
S. K. Zimmerman
_______________
S. K. Zimmerman
<PAGE> 5
Page 1
State of Delaware
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF GENERAL ELECTRIC
FINANCIAL SERVICES, INC. FILED IN THIS OFFICE ON THE TWENTIETH
DAY OF NOVEMBER, A.D. 1986, AT 10 O'CLOCK A.M.
/s/ MICHAEL HARKINS
___________________________________
Michael Harkins, Secretary of State
AUTHENTICATION: 1014323
DATE: 11/20/1986
[STATE
OF
DELAWARE
OFFICE OF THE
SECRETARY OF STATE
SEAL]
<PAGE> 6
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a corporation organized
and existing under and by virtue of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY:
FIRST: that at a meeting of the Board of Directors of General
Electric Financial Services, Inc. resolutions were duly adopted setting
forth a proposed amendment to the Certificate of Incorporation of said
corporation, declaring said amendment to be advisable and calling a
special meeting of the stockholders of said corporation for consideration
thereof. The resolutions setting forth the proposed amendment and
calling for a special meeting of the stockholders are as follows:
RESOLVED, that the Board of Directors of General Electric Financial
Services, Inc. (hereinafter referred to as the "Corporation") deems
it advisable, and recommends to the shareholders of the Corporation,
that "Article 4." of the Certificate of Incorporation of the
Corporation be amended to read in its entirety as follows:
"4. The aggregate amount of the capital stock which the
corporation is authorized to issue is Six Hundred One Million
Dollars ($601,000,000) consisting of 60,100 shares, of which One
Hundred shares, $10,000 par value, shall be Common Stock and Sixty
Thousand shares, $10,000 par value, shall be Preferred Stock.
"The Board of Directors of the corporation, in accordance with
Section 151 of the General Corporation Law of the State of
Delaware, is hereby empowered to authorize the issuance from time
to time of the Preferred Stock in such class, classes or series, in
such number of shares of any class or series, with such voting
powers, and with such designations, preferences, and relative,
<PAGE> 7
participating, optional, or other rights, qualifications,
limitations or restrictions thereof, including, without
limitation, dividend rights, dissolution rights, conversion rights,
exchange rights, and redemption rights, as shall be stated and
expressed in the resolution or resolutions adopted by the Board of
Directors providing for the issuance of such class, classes, or
series of the Preferred Stock.
"Except as otherwise provided by law or in any certificate of
designations respecting a particular series of Preferred Stock,
full rights to vote on all matters shall be vested in the holders
of the Common Stock, and the holders of the Preferred Stock shall
not be entitled to vote.
"Neither a consolidation or merger of the corporation with or
into any other corporation, nor a merger of any other corporation
into the corporation, nor a reorganization of the corporation, nor
the purchase or redemption of all or part of the outstanding shares
of any class or classes of stock of the corporation, nor a sale or
transfer of the property and business of the corporation as or
substantially as an entirety, shall be considered a liquidation,
dissolution or winding-up of the corporation."; and
FURTHER RESOLVED, that a special meeting of the shareholders of the
Corporation be held within thirty days hereof, pursuant to notice given by
the Secretary of the Corporation, for the purpose of acting upon the
recommendation of the Board respecting amendment of "Article 4." of the
Certificate of Incorporation of the Corporation as set forth in the
preceding Resolution.
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of General Electric Financial
Services, Inc. was duly called and held, upon written notice given on November
17, 1986, at which meeting the necessary number of shares as required by
statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
<PAGE> 8
IN WITNESS WHEREOF, said General Electric Financial Services. Inc. has
caused this certificate to be signed by Burton J. Kloster, Jr., its Vice
President and attested by John J. Leibell, its Assistant Secretary, this 19th
day of November, 1986.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
By _____________________________________
Vice President
[SEAL]
ATTEST:
/s/ JOHN J. LEIBELL
By _______________________________
Assistant Secretary
<PAGE> 9
State of Delaware
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF STOCK DESIGNATION OF GENERAL ELECTRIC
FINANCIAL SERVICES, INC. FILED IN THIS OFFICE ON THE EIGHTEENTH
DAY OF DECEMBER, A.D. 1986, AT 12:30 O'CLOCK P.M.
/s/ MICHAEL HARKINS
__________________________________
Michael Harkins, Secretary of State
AUTHENTICATION: 1052283
DATE: 12/18/1986
[STATE
OF
DELAWARE
OFFICE OF THE
SECRETARY OF STATE
SEAL]
<PAGE> 10
CERTIFICATE OF DESIGNATIONS
OF PREFERENCES
OF SERIES A CUMULATIVE PREFERRED STOCK
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a corporation organized
and existing under and by virtue of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of General
Electric Financial Services, Inc. held on December 17, 1986, at which a
quorum was present and acting throughout, resolutions, pursuant to
Section 151 of the General Corporation Law of the State of Delaware and
Article 4., as amended, of the Certificate of Incorporation, were duly
adopted fixing the designations, number of shares, and the voting powers,
preferences and relative, participating, optional or other special rights
of the Series A Cumulative Preferred Stock and the qualifications,
limitations or restrictions of such preferences and/or rights, such
resolutions reading as follows:
RESOLVED, that a series of the Preferred Stock of General
Electric Financial Services, Inc. (hereafter called the
"corporation") is hereby created and established out of the
authorized and unissued shares of the Preferred Stock, par value
$10,000, of the corporation, such series to consist of 15,000 shares;
RESOLVED, that such series is hereby designated the Series A
Cumulative Preferred Stock (hereafter called the "Series A Preferred
Stock");
RESOLVED, that the powers, designations, preferences and
relative, participating, optional or other special rights of the
Series A Preferred Stock and the qualifications, limitations or
restrictions of such preferences and/or rights are hereby fixed as
follows:
"The Series A Preferred Stock of the corporation shall accrue
preferential and cumulative dividends at the rate of 7% per annum on
the par value thereof, and no more, from the day following the date of
issuance thereof. All dividends accrued on the Series A Preferred
Stock shall be paid to the holders of record thereof annually when and
as declared and on the date fixed therefor by the Board of Directors
out of funds legally available therefor and shall be preferential and
cumulative in that all current year dividends and all arrearages in the
payment of any prior year(s) dividends accrued on the Series A
Preferred Stock shall be paid or set apart for payment to the holders
of record thereof before any dividends shall be paid or set apart for
payment to the holders of record of the Common Stock of the corporation.
<PAGE> 11
"The corporation may, as and when determined by the Board of
Directors, pay or set apart for payment dividends on the Common Stock
out of funds legally available therefor, provided that the corporation
has theretofore paid or set apart for payment to the holders of record
of the Series A Preferred Stock all dividends accrued thereon, and,
under such circumstances, the holders of record of the Series A
Preferred Stock shall not, as such, share in any dividends so paid or
set apart for payment to the holders of record of the Common Stock.
"In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation: (i) the holders of record
of the Series A Preferred Stock shall be paid the par value of the
Series A Preferred Stock and all dividends accrued thereon, whether or
not declared, before any distribution of the corporation's assets shall
be made to the holders of record of the Common Stock, and, upon the
receipt thereof, the holders of record of the Series A Preferred Stock
shall not be entitled to participate in any distribution of the
corporation's assets to the holders of record of the Common Stock; (ii)
under circumstances in which the assets of the corporation are
insufficient to pay the holders of record of the Series A Preferred
Stock the par value thereof and all dividends accrued thereon, the
assets of the corporation shall be distributed pro rata among the
holders of record of the Series A Preferred Stock; and (iii) the assets
of the corporation, if any, remaining, after payment to the holders of
record of the Series A Preferred Stock of the par value thereof and all
dividends accrued thereon, shall be distributed pro rata among the
holders of record of the Common Stock.
"The corporation may, as and when determined by the Board of
Directors, redeem the Series A Preferred Stock, in whole or in part,
upon 30 days' notice by mail and payment to the holders of record
thereof of 100% of the par value thereof plus all dividends accrued
thereon to the date of redemption.
"The holders of record of the Series A Preferred Stock shall not
have any voting power whatsoever, except as required by law. The
holders of record of the Common Stock shall have the entire voting
power on all matters to the exclusion of all other stockholders, except
as required by law.";
RESOLVED, that the corporation is hereby authorized to issue and sell
the 15,000 shares of Series A Preferred Stock to Employers Reinsurance
Corporation, in consideration of the payment to the corporation of the par
value thereof aggregating $150,000,000; and
FURTHER RESOLVED, that any of the President, the Vice President-
Finance, the Vice President and Treasurer, the Vice President and
Comptroller, the Secretary, and the Assistant Secretary of the corporation
is hereby authorized and directed to do or cause to be done all such acts
<PAGE> 12
and things and to make, execute and deliver, or cause to be made, executed and
delivered, in the name and on behalf of the corporation, all such documents and
instruments as such officers, or any one or more of them, may deem necessary or
advisable in order fully to effectuate the purpose and intention of the
foregoing resolutions.
SECOND: The foregoing resolutions apply to 15,000 shares of Series A
Cumulative Preferred Stock of General Electric Financial Services, Inc.
IN WITNESS WHEREOF, said General Electric Financial Services, Inc. has
caused this certificate to be signed by Burton J. Kloster, Jr., its Vice
President and attested by John J. Leibell, its Assistant Secretary, this 17th
day of December, 1986.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
BY: _______________________________________
Vice President
Burton J. Kloster, Jr.
[SEAL]
ATTEST:
/s/ JOHN J. LEIBELL
By: _________________________
Assistant Secretary
John J. Leibell
<PAGE> 13
State of Delaware
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF GENERAL ELECTRIC
FINANCIAL SERVICES, INC. FILED IN THIS OFFICE ON THE TENTH DAY OF
MARCH, A.D. 1987, AT 10 O'CLOCK A.M.
/s/ MICHAEL HARKINS
___________________________________
Michael Harkins, Secretary of State
AUTHENTICATION: 1164693
DATE: 03/12/1987
[STATE
OF
DELAWARE
OFFICE OF THE
SECRETARY OF STATE
SEAL]
<PAGE> 14
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a corporation organized
and existing under and by virtue of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of General
Electric Financial Services, Inc. resolutions were duly adopted setting
forth a proposed amendment to the Certificate of Incorporation of said
corporation, declaring said amendment to be advisable and directing that
the amendment proposed be considered at the next annual meeting of the
stockholders. The resolutions setting forth the proposed amendment and
directing that the amendment be considered at the next annual meeting of
the stockholders are as follows:
RESOLVED, that the Board of Directors of the Corporation hereby
recommends to the stockholders of the Corporation that at the next
annual meeting of the stockholders the Certificate of Incorporation
of the Corporation be amended by adding thereto a new Article "11."
reading as follows:
"11. No director of the corporation shall be liable to the
corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that the foregoing
shall not eliminate or limit liability of a director (i) for any
breach of such director's duty of loyalty to the corporation or
its stockholders, (ii) for acts or omissions by such director
not in good faith or which involve intentional misconduct or a
<PAGE> 15
knowing violation of law, (iii) under Section 174 of Title 8 of
the Delaware Code or (iv) for any transaction from which such
director derived an improper personal benefit."
SECOND: That thereafter the annual meeting of the stockholders was
duly called and held, upon written notice given on February 18, 1987, at
which meeting the necessary number of shares as required by statute were
voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said General Electric Financial Services, Inc.
has caused this certificate to be signed by Burton J. Kloster, Jr., its
Vice President, and attested by John J. Leibell, its Assistant Secretary,
this 9th day of March, 1987.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
By _____________________________________
Vice President
[SEAL]
ATTEST:
/s/ JOHN J. LEIBELL
By ________________________
Assistant Secretary
<PAGE> 16
PAGE 1
State of Delaware
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF GENERAL ELECTRIC
FINANCIAL SERVICES, INC. FILED IN THIS OFFICE ON THE TWENTY-NINTH
DAY OF DECEMBER, A.D. 1987, AT 9:15 O'CLOCK A.M.
/s/ MICHAEL HARKINS
__________________________________
Michael Harkins, Secretary of State
AUTHENTICATION: 1520382
DATE: 12/29/1987
[STATE
OF
DELAWARE
OFFICE OF THE
SECRETARY OF STATE
SEAL]
<PAGE> 17
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a
corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Direc-
tors of General Electric Financial Services, Inc. held on
December 16, 1987 resolutions were duly adopted setting
forth a proposed amendment to the Certificate of Incorpo-
ration of said corporation, declaring said amendment to
be advisable and directing that the amendment proposed be
considered by the stockholders pursuant to written consents
signed by the holders of all outstanding stock of the
corporation. The resolution setting forth the proposed
amendment and directing that the amendment be considered by
the stockholders is as follows:
RESOLVED, that the Board of Directors of the
corporation hereby declares it advisable and recommends
to the stockholders of the corporation that the Certif-
icate of Incorporation of the corporation be amended by
amending the Certificate of Designations of Preferences
of Series A Cumulative Preferred Stock by deleting the
resolution set forth therein fixing the powers,
designations, preferences and relative, participating,
optional or other special rights of such Preferred
Stock and substituting therefor the following
resolution:
RESOLVED, that the powers, designations, pre-
ferences and relative, participating, optional or other
special rights of the Series A Preferred Stock and the
qualifications, limitations or restrictions of such
preferences and/or rights are hereby fixed as follows:
The Series A Preferred Stock of the
corporation shall accrue preferential and
cumulative dividends at a rate per annum
which in each dividend year (the dividend
year being the period commencing on December
<PAGE> 18
20 and continuing through December 19 of the
following calendar year) is the average of
the yield on high grade industrial preferred
stock and the yield on medium grade
industrial preferred stock as of the close of
the week preceding the December 31 (or, if
not available, that of the close of the week
immediately preceding) that is within such
dividend year, as published by Moody's Inves-
tors Service, and no more, from and including
December 20, 1987. All dividends accrued on
the Series A Preferred Stock shall be paid to
the holders of record thereof annually when
and as declared and on the date fixed there-
for by the Board of Directors out of funds
legally available therefor and shall be
preferential and cumulative in that all
current year dividends and all arrearages in
the payment of any prior year(s) dividends
accrued on the Series A Preferred Stock shall
be paid or set apart for payment to the
holders of record thereof before any divi-
dends shall be paid or set apart for payment
to the holders of record of the Common Stock
of the corporation.
The corporation may, as and when deter-
mined by the Board of Directors, pay or set
apart for payment dividends on the Common
Stock out of funds legally available there-
for, provided that the corporation has
theretofore paid or set apart for payment to
the holders of record of the Series A Pre-
ferred Stock all dividends accrued thereon,
and, under such circumstances, the holders of
record of the Series A Preferred Stock shall
not, as such, share in any dividends so paid
or set apart for payment to the holders of
record of the Common Stock.
In the event of any voluntary or invol-
untary liquidation, dissolution or winding up
of the corporation: (i) the holders of record
of the Series A Preferred Stock shall be paid
the par value of the Series A Preferred Stock
and all dividends accrued thereon, whether or
not declared, before any distribution of the
corporation's assets shall be made to the
holders of record of the Common Stock, and,
-2-
<PAGE> 19
upon the receipt thereof, the holders of
record of the Series A Preferred Stock shall
not be entitled to participate in any distri-
bution of the corporation's assets to the
holders of record of the Common Stock; (ii)
under circumstances in which the assets of
the corporation are insufficient to pay the
holders of record of the Series A Preferred
Stock the par value thereof and all dividends
accrued thereon, the assets of the corpora-
tion shall be distributed pro rata among the
holders of record of the Series A Preferred
Stock; and (iii) the assets of the corpora-
tion, if any, remaining, after payment to the
holders of record of the Series A Preferred
Stock of the par value thereof and all divi-
dends accrued thereon, shall be distributed
pro rata among the holders of record of the
Common Stock.
The shares of Series A Preferred Stock
and of Series B Preferred Stock shall rank
pari passu in right of payment of dividends
and payment of amounts distributable upon any
voluntary or involuntary liquidation, dis-
solution or winding up of the corporation,
and in case the stated dividends (including
arrearages) or such distributable amounts are
not paid in full the shares of both series
shall share equally, share for share, in any
partial payment.
The corporation may, as and when deter-
mined by the Board of Directors, redeem the
Series A preferred Stock, in whole or in
part, upon 30 days' notice by mail and pay-
ment to the holders of record thereof of 100%
of the par value thereof plus all dividends
accrued thereon to the date of redemption.
The holders of record of the Series A
Preferred Stock shall not have any voting
power whatsoever, except as required by law.
The holders of record of the Common Stock
shall have the entire voting power on all
matters to the exclusion of all other stock-
holders, except as required by law.
-3-
<PAGE> 20
SECOND: That thereafter by written consents
signed and delivered pursuant to Section 228 of the General
Corporation Law the holder of all of the outstanding Common
Stock of the corporation and the holder of all of the
outstanding Preferred Stock of the corporation consented to
and authorized such amendment.
THIRD: That such amendment was duly adopted in
accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said General Electric
Financial Services, Inc. has caused this certificate to be
signed by Burton J. Kloster, Jr., its Vice President, and
attested by John J. Leibell, its Assistant Secretary, this
29th day of December, 1987.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
[SEAL] By______________________________________
Vice President
ATTEST:
/s/ JOHN J. LEIBELL
By ________________________
Assistant Secretary
-4-
<PAGE> 21
State of Delaware PAGE 1
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF STOCK DESIGNATION OF GENERAL ELECTRIC
FINANCIAL SERVICES, INC. FILED IN THIS OFFICE ON THE TWENTY-NINTH
DAY OF DECEMBER, A.D. 1987, AT 9:16 O'CLOCK A.M.
/s/ MICHAEL HARKINS
_______________________________________________
Michael Harkins, Secretary of State
AUTHENTICATION: 1520383
[STATE DATE: 12/29/1987
OF
DELAWARE
OFFICE OF THE
SECRETARY OF STATE
SEAL]
<PAGE> 22
CERTIFICATE OF DESIGNATIONS
OF PREFERENCES
OF SERIES B CUMULATIVE PREFERRED STOCK
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a
corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That at a meeting of the Board of
Directors of General Electric Financial Services, Inc. held
on December 16, 1987, at which a quorum was present and
acting throughout, resolutions, pursuant to Section 151 of
the General Corporation Law of the State of Delaware and
Article 4., as amended, of the Certificate of Incorporation,
were duly adopted fixing the designations, number of shares,
and the voting powers, preferences and relative, partici-
pating, optional or other special rights of the Series B
Cumulative Preferred Stock and the qualifications, limi-
tations or restrictions of such preferences and/or rights,
such resolutions reading as follows:
RESOLVED, that a series of the Preferred Stock of
General Electric Financial Services, Inc. (hereafter called
the "corporation") is hereby created and established out of
the authorized and unissued shares of the Preferred Stock,
par value of $10,000, of the corporation, such series to
consist of 10,000 shares;
RESOLVED, that such series is hereby designated
the Series B Cumulative Preferred Stock (hereafter called
the "Series B Preferred Stock");
RESOLVED, that the powers, designations, pre-
ferences and relative, participating, optional or other
special rights of the Series B Preferred Stock and the
qualifications, limitations or restrictions of such
preferences and/or rights are hereby fixed as follows:
The Series B Preferred Stock of the
corporation shall accrue preferential and
cumulative dividends at a rate per annum
which in each dividend year (the dividend
year being the period commencing on December
<PAGE> 23
20 and continuing through December 19 of the
following calendar year) is the average of
the yield on high grade industrial preferred
stock and the yield on medium grade
industrial preferred stock as of the close of
the week preceding the December 31 (or, if
not available, that of the close of the week
immediately preceding) that is within such
dividend year, as published by Moody's Inves-
tors Service, and no more, from the day
following the date of issuance thereof. All
dividends accrued on the Series B Preferred
Stock shall be paid to the holders of record
thereof annually when and as declared and on
the date fixed therefor by the Board of
Directors out of funds legally available
therefor and shall be preferential and
cumulative in that all current year dividends
and all arrearages in the payment of any
prior year(s) dividends accrued on the Series
B Preferred Stock shall be paid or set apart
for payment to the holders of record thereof
before any dividends shall be paid or set
apart for payment to the holders of record of
the Common Stock of the corporation.
The corporation may, as and when deter-
mined by the Board of Directors, pay or set
apart for payment dividends on the Common
Stock out of funds legally available there-
for, provided that the corporation has
theretofore paid or set apart for payment to
the holders of record of the Series B Pre-
ferred Stock all dividends accrued thereon,
and, under such circumstances, the holders of
record of the Series B Preferred Stock shall
not, as such, share in any dividends so paid
or set apart for payment to the holders of
record of the Common Stock.
In the event of any voluntary or invol-
untary liquidation, dissolution or winding up
of the corporation: (i) the holders of record
of the Series B Preferred Stock shall be paid
the par value of the Series B Preferred Stock
and all dividends accrued thereon, whether or
not declared, before any distribution of the
corporation's assets shall be made to the
holders of record of the Common Stock, and,
-2-
<PAGE> 24
upon the receipt thereof, the holders of
record of the Series B Preferred Stock shall
not be entitled to participate in any distri-
bution of the corporation's assets to the
holders of record of the Common Stock; (ii)
under circumstances in which the assets of
the corporation are insufficient to pay the
holders of record of the Series B Preferred
Stock the par value thereof and all dividends
accrued thereon, the assets of the corpora-
tion shall be distributed pro rata among the
holders of record of the Series B Preferred
Stock; and (iii) the assets of the corpora-
tion, if any, remaining, after payment to the
holders of record of the Series B Preferred
Stock of the par value thereof and all divi-
dends accrued thereon, shall be distributed
pro rata among the holders of record of the
Common Stock.
The shares of Series A Preferred Stock
and of Series B Preferred Stock shall rank
pari passu in right of payment of dividends
and payment of amounts distributable upon any
voluntary or involuntary liquidation, dis-
solution or winding up of the corporation,
and in case the stated dividends (including
arrearages) or such distributable amounts are
not paid in full the shares of both series
shall share equally, share for share, in any
partial payment.
The corporation may, as and when deter-
mined by the Board of Directors, redeem the
Series B Preferred Stock, in whole or in
part, upon 30 days' notice by mail and pay-
ment to the holders of record thereof of 100%
of the par value thereof plus all dividends
accrued thereon to the date of redemption.
The holders of record of the Series B
Preferred Stock shall not have any voting
power whatsoever, except as required by law.
The holders of record of the Common Stock
shall have the entire voting power on all
matters to the exclusion of all other stock-
holders, except as required by law.
-3-
<PAGE> 25
RESOLVED, that the corporation is hereby author-
ized to issue and sell to Employers Reinsurance Corporation
10,000 shares of Series B Preferred Stock in consideration
of the payment to the corporation of the par value thereof
aggregating $100,000,000; and
FURTHER RESOLVED, that any of the President, the
Vice President-Finance, the Vice President and Treasurer,
the Vice President and Comptroller, the Secretary, and the
Assistant Secretary of the corporation is hereby authorized
and directed to do or cause to be done all such acts and
things and to make, execute and deliver, or cause to be
made, executed and delivered, in the name and on behalf of
the corporation, all such documents and instruments as such
officers, or any one or more of them, may deem necessary or
advisable in order fully to effectuate the purpose and
intention of the foregoing resolutions.
SECOND: The foregoing resolutions apply to 10,000
shares of Series B Cumulative Preferred Stock of General
Electric Financial Services, Inc.
IN WITNESS WHEREOF, said General Electric
Financial Services, Inc. has caused this certificate to be
signed by Burton J. Kloster, Jr., its Vice President and
attested by John J. Leibell, its Assistant Secretary, this
29th day of December, 1987.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
By: ____________________________________
[SEAL] Vice President
ATTEST:
/s/ JOHN J. LEIBELL
By:_______________________
Assistant Secretary
-4-
<PAGE> 26
State of Delaware PAGE 1
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF GENERAL ELECTRIC
FINANCIAL SERVICES, INC. FILED IN THIS OFFICE ON THE TWENTY-SIXTH
DAY OF OCTOBER, A.D. 1988, AT 10 O'CLOCK A.M.
/s/ MICHAEL HARKINS
________________________________________
Michael Harkins, Secretary of State
AUTHENTICATION: 1905734
[STATE DATE: 10/26/1988
OF
DELAWARE
OFFICE OF THE
SECRETARY OF STATE
SEAL]
<PAGE> 27
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a corporation organized
and existing under and by virtue of the General Corporation Law of the State
of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of General
Electric Financial Services, Inc. held on October 26, 1988 a resolution was
duly adopted setting forth a proposed amendment to the Certificate of
Incorporation of said corporation, declaring said amendment to be advisable
and directing that the amendment proposed be considered by the Common
Stockholder pursuant to written consent signed by the holder of all
outstanding Common Stock of the corporation. The resolution setting forth the
proposed amendment and directing that the amendment be considered by the
Common Stockholder is as follows:
RESOLVED, that the Board of Directors of General Electric Financial
Services, Inc. (hereinafter referred to as the "corporation") hereby
declares it advisable and recommends to the Common Stockholder of the
corporation that the Certificate of Incorporation of the corporation be
amended by amending the first paragraph of "Article 4" of the Certificate
of Incorporation to read in its entirety as follows:
"4. The aggregate amount of the capital stock which the
corporation is authorized to issue is Six Hundred One Million Ten
Thousand Dollars ($601,010,000) consisting of 60,101 shares, of which
One Hundred One shares, $10,000 par value, shall be Common Stock and
Sixty Thousand shares, $10,000 par value, shall be Preferred Stock."
<PAGE> 28
SECOND: That thereafter by written consent signed and delivered
pursuant to Section 228 of the General Corporation Law the holder of all of
the outstanding Common Stock of the corporation consented to and authorized
such amendment.
THIRD: That such amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said General Electric Financial Services, Inc.
has caused this certificate to be signed by Burton J. Kloster, Jr., its Senior
Vice President, and attested by John J. Leibell, its Assistant Secretary,
this 26th day of October, 1988.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
By ____________________________________
Burton J. Kloster, Jr.
Senior Vice President
[SEAL]
ATTEST:
/s/ JOHN J. LEIBELL
By _______________________
John J. Leibell
Assistant Secretary
<PAGE> 29
State of Delaware PAGE 1
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF GENERAL ELECTRIC
FINANCIAL SERVICES, INC. FILED IN THIS OFFICE ON THE TWENTIETH
DAY OF DECEMBER, A.D. 1989, AT 10 O'CLOCK A.M.
/s/ MICHAEL HARKINS
___________________________________________
Michael Harkins, Secretary of State
[STATE
OF AUTHENTICATION: 2461193
DELAWARE DATE: 12/21/1989
OFFICE OF THE
SECRETARY OF STATE
SEAL]
<PAGE> 30
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a corporation organized
and existing under and by virtue of the General Corporation Law of the State
of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of General
Electric Financial Services, Inc. held on December 19, 1989 a resolution was
duly adopted setting forth a proposed amendment to the Certificate of
Incorporation of said corporation, declaring said amendment to be advisable
and directing that the amendment proposed be considered by the stockholders
pursuant to written consents signed by all stockholders of the corporation.
The resolution setting forth the proposed amendment and directing that the
amendment be considered by the stockholders is as follows:
RESOLVED, that the Board of Directors of General Electric Financial
Services, Inc. (hereinafter referred to as the "corporation") hereby
declares it advisable and recommends to the stockholders of the
corporation that the Certificate of Incorporation of the corporation be
amended by amending the first paragraph of "Article 4" of the Certificate
of Incorporation to read in its entirety as follows:
"4. The aggregate amount of the capital stock which the
corporation is authorized to issue is Eight Hundred One Million Ten
Thousand Dollars ($801,010,000) consisting of 80,101 shares, of which
One Hundred One shares, $10,000 par value, shall be Common Stock and
Eighty Thousand shares, $10,000 par value, shall be Preferred Stock.
The number of authorized shares of Preferred Stock may be increased
or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of
the stock of the corporation entitled to vote irrespective of
subsection (b) (2) of Section 242 of the General Corporation Law of
the State of Delaware."
<PAGE> 31
SECOND: That thereafter by written consents signed and delivered
pursuant to Section 228 of the General Corporation Law of the State of
Delaware the holders of all of the outstanding stock of the corporation
consented to and authorized such amendment.
THIRD: That such amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said General Electric Financial Services, Inc.
has caused this certificate to be signed by Burton J. Kloster, Jr., its Senior
Vice President, and attested by John J. Leibell, its Assistant Secretary,
this 19th day of December, 1989.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
By _____________________________________
Burton J. Kloster, Jr.
[SEAL] Senior Vice President
ATTEST:
/s/ JOHN J. LEIBELL
By __________________________
John J. Leibell
Assistant Secretary
-2-
<PAGE> 32
State of Delaware PAGE 1
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF STOCK DESIGNATION OF GENERAL ELECTRIC
FINANCIAL SERVICES, INC. FILED IN THIS OFFICE ON THE TWENTIETH
DAY OF DECEMBER, A.D. 1989, AT 10:01 O'CLOCK A.M.
/s/ MICHAEL HARKINS
[STATE ____________________________________________
OF Michael Harkins, Secretary of State
DELAWARE
OFFICE OF THE AUTHENTICATION: 2461346
SECRETARY OF STATE DATE: 12/21/1989
SEAL]
<PAGE> 33
CERTIFICATE OF DESIGNATIONS
OF PREFERENCES
OF SERIES C CUMULATIVE PREFERRED STOCK
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a corporation organized
and existing under and by virtue of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of General
Electric Financial Services, Inc. held on December 19, 1989, at which a
quorum was present and acting throughout, resolutions, pursuant to
Section 151 of the General Corporation Law of the State of Delaware and
Article 4., as amended, of the Certificate of Incorporation, were duly
adopted fixing the designations, number of shares, and the voting powers,
preferences and relative, participating, optional or other special rights
of the Series C Cumulative Preferred Stock and the qualifications,
limitations or restrictions of such preferences and/or rights, such
resolutions reading as follows:
RESOLVED, that a series of the Preferred Stock of General
Electric Financial Services, Inc. (hereafter called the
"corporation") is hereby created and established out of the
authorized and unissued shares of the Preferred Stock, par value of
$10,000, of the corporation, such series to consist of 21,000 shares;
RESOLVED, that such series is hereby designated the Series C
Cumulative Preferred Stock (hereafter called the "Series C Preferred
Stock");
RESOLVED, that the powers, designations, preferences and
relative, participating, optional or other special rights of the
Series C Preferred Stock and the qualifications, limitations or
restrictions of such preferences and/or rights are hereby fixed as
follows:
The Series C Preferred Stock of the corporation shall accrue
preferential and cumulative dividends at a rate per annum which
in each dividend year (the dividend year being the period
commencing on December 20 and continuing through December 19 of
the following calendar year) is the average of the yield on high
grade industrial preferred stock and the yield on medium grade
industrial preferred stock as of the close of the week preceding
the December 31 (or, if not available, that of the close of the
week immediately preceding) that is within such dividend year,
<PAGE> 34
as published by Moody's Investors Service, and no more, from the
day following the date of issuance thereof. All dividends
accrued on the Series C Preferred Stock shall be paid to the
holders of record thereof annually when and as declared and on
the date fixed therefor by the Board of Directors out of funds
legally available therefor and shall be preferential and
cumulative in that all current year dividends and all arrearages
in the payment of any prior year(s) dividends accrued on the
Series C Preferred Stock shall be paid or set apart for payment
to the holders of record thereof before any dividends shall be
paid or set apart for payment to the holders of record of the
Common Stock of the corporation.
The corporation may, as and when determined by the Board of
Directors, pay or set apart for payment dividends on the Common
Stock out of funds legally available therefor, provided that the
corporation has theretofore paid or set apart for payment to the
holders of record of the Series C Preferred Stock all dividends
accrued thereon, and, under such circumstances, the holders of
record of the Series C Preferred Stock shall not, as such, share
in any dividends so paid or set apart for payment to the holders
of record of the Common Stock.
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation: (i) the holders
of record of the Series C Preferred Stock shall be paid the par
value of the Series C Preferred Stock and all dividends accrued
thereon, whether or not declared, before any distribution of the
corporation's assets shall be made to the holders of record of
the Common Stock, and, upon the receipt thereof, the holders of
record of the Series C Preferred Stock shall not be entitled to
participate in any distribution of the corporation's assets to
the holders of record of the Common Stock; (ii) under
circumstances in which the assets of the corporation are
insufficient to pay the holders of record of the Series C
Preferred Stock the par value thereof and all dividends accrued
thereon, the assets of the corporation shall be distributed pro
rata among the holders of record of the Series C Preferred
Stock; and (iii) the assets of the corporation, if any,
remaining, after payment to the holders of record of the Series
C Preferred Stock of the par value thereof and all dividends
accrued thereon, shall be distributed pro rata among the holders
of record of the Common Stock.
The shares of Series A Preferred Stock and of Series B Preferred
Stock and of Series C Preferred Stock shall rank pari passu in
right of payment of dividends and payment of amounts
distributable upon any voluntary or involuntary liquidation,
dissolution or winding up of the corporation, and in case the
-2-
<PAGE> 35
stated dividends (including arrearages) or such distributable
amounts are not paid in full the shares of each series shall
share equally, share for share, in any partial payment.
The corporation may, as and when determined by the Board of
Directors, redeem the Series C Preferred Stock, in whole or in
part, upon 30 days' notice by mail and payment to the holders of
record thereof of 100% of the par value thereof plus all
dividends accrued thereon to the date of redemption.
The holders of record of the Series C Preferred Stock shall not
have any voting power whatsoever, except as required by law.
The holders of record of the Common Stock shall have the entire
voting power on all matters to the exclusion of all other
stockholders, except as required by law.
RESOLVED, that the corporation is hereby authorized to issue and
sell to General Electric Capital Corporation 21,000 shares of Series
C Preferred Stock in consideration of the payment to the corporation
of the par value thereof aggregating $210,000,000; and
FURTHER RESOLVED, that any of the President, the Senior Vice
President, Finance, the Vice President and Treasurer, the Vice
President and Comptroller, the Secretary, and the Assistant Secretary
of the corporation is hereby authorized and directed to do or cause
to be done all such acts and things and to make, execute and deliver,
or cause to be made, executed and delivered, in the name and on
behalf of the corporation, all such documents and instruments as such
officers, or any one or more of them, may deem necessary or advisable
in order fully to effectuate the purpose and intention of the
foregoing resolutions.
SECOND: The foregoing resolutions apply to 21,000 shares of Series C
Cumulative Preferred Stock of General Electric Financial Services, Inc.
IN WITNESS WHEREOF, said General Electric Financial Services, Inc.
has caused this certificate to be signed by Burton J. Kloster, Jr., its
Senior Vice President, and attested by John J. Leibell, its Assistant
Secretary, this 19th day of December, 1989.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
By _____________________________________
Burton J. Kloster, Jr.
Senior Vice President
[SEAL]
ATTEST:
/s/ JOHN J. LEIBELL
By: _______________________
John J. Leibell
Assistant Secretary
-3-
<PAGE> 36
State of Delaware PAGE 1
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF
DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF STOCK DESIGNATION OF "GENERAL ELECTRIC
FINANCIAL SERVICES, INC." FILED IN THIS OFFICE ON THE NINETEENTH
DAY OF DECEMBER, A.D. 1991, AT 10 O'CLOCK A.M.
/s/ MICHAEL HARKINS
___________________________________________
Michael Harkins, Secretary of State
AUTHENTICATION: 3279166
[STATE DATE: 12/19/1991
OF
DELAWARE
OFFICE OF THE
SECRETARY OF STATE
SEAL]
<PAGE> 37
CERTIFICATE OF DESIGNATIONS
OF PREFERENCES
OF SERIES D CUMULATIVE PREFERRED STOCK
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a corporation organized
and existing under and by virtue of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of General
Electric Financial Services, Inc. held on December 17, 1991, at which a
quorum was present and acting throughout, resolutions, pursuant to
Section 151 of the General Corporation Law of the State of Delaware and
Article 4., as amended, of the Certificate of Incorporation, were duly
adopted fixing the designations, number of shares, and the voting powers,
preferences and relative, participating, optional or other special rights
of the Series D Cumulative Preferred Stock and the qualifications,
limitations or restrictions of such preferences and/or rights, such
resolutions reading as follows:
RESOLVED, That a series of the Preferred Stock of General
Electric Financial Services, Inc. (hereafter called the
"corporation") is hereby created and established out of the
authorized and unissued shares of the Preferred Stock, par value of
$10,000, of the corporation, such series to consist of 5,000 shares,
RESOLVED, That such series is hereby designated the Series D
Cumulative Preferred Stock (hereafter called the "Series D Preferred
Stock");
RESOLVED, That the powers, designations, preferences and
relative, participating, optional or other special rights of the
Series D Preferred Stock and the qualifications, limitations or
restrictions of such preferences and/or rights are hereby fixed as
follows:
The Series D Preferred Stock of the corporation shall accrue
preferential and cumulative dividends at a rate per annum which
in each dividend year (the dividend year being the period
commencing on December 20 and continuing through December 19 of
the following calendar year) is the average of the yield on high
grade industrial preferred stock and the yield on medium grade
industrial preferred stock as of the close of the week preceding
the December 31 (or, if not available, that of the close of the
week immediately preceding) that is within such dividend year,
as published by Moody's Investors Service, and no more, from the
day following the date of issuance thereof. All dividends
accrued on the Series D Preferred Stock shall be paid to the
holders of record thereof annually when and as declared and on
the date fixed therefor by the Board of Directors out of funds
<PAGE> 38
legally available therefor and shall be preferential and
cumulative in that all current year dividends and all arrearages
in the payment of any prior year(s) dividends accrued on the
Series D Preferred Stock shall be paid or set apart for payment
to the holders of record thereof before any dividends shall be
paid or set apart for payment to the holders of record of the
Common Stock of the corporation.
The corporation may, as and when determined by the Board of
Directors, pay or set apart for payment dividends on the Common
Stock out of funds legally available therefor, provided that the
corporation has theretofore paid or set apart for payment to the
holders of record of the Series D Preferred Stock all dividends
accrued thereon, and, under such circumstances, the holders of
record of the Series D Preferred Stock shall not, as such, share
in any dividends so paid or set apart for payment to the holders
of record of the Common Stock.
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation: (i) the holders
of record of the Series D Preferred Stock shall be paid the par
value of the Series D Preferred Stock and all dividends accrued
thereon, whether or not declared, before any distribution of the
corporation's assets shall be made to the holders of record of
the Common Stock, and, upon the receipt thereof, the holders of
record of the Series D Preferred Stock shall not be entitled to
participate in any distribution of the corporation's assets to
the holders of record of the Common Stock; (ii) under
circumstances in which the assets of the corporation are
insufficient to pay the holders of record of the Series D
Preferred Stock the par value thereof and all dividends accrued
thereon, the assets of the corporation shall be distributed pro
rata among the holders of record of the Series D Preferred
Stock; and (iii) the assets of the corporation, if any,
remaining, after payment to the holders of record of the Series
D Preferred Stock of the par value thereof and all dividends
accrued thereon, shall be distributed pro rata among the holders
of record of the Common Stock.
The shares of Series A Preferred Stock and of Series B Preferred
Stock and of Series C Preferred Stock and of Series D Preferred
Stock shall rank pari passu in right of payment of dividends and
payment of amounts distributable upon any voluntary or
involuntary liquidation, dissolution or winding up of the
corporation, and in case the stated dividends (including
arrearages) or such distributable amounts are not paid in full
the shares of each series shall share equally, share for share,
in any partial payment.
The corporation may, as and when determined by the Board of
Directors, redeem the Series D Preferred Stock, in whole or in
part, upon 30 days' notice by mail and payment to the holders of
record thereof of 100% of the par value thereof plus all
dividends accrued thereon to the date of redemption.
-2-
<PAGE> 39
The holders of record of the Series D Preferred Stock shall not
have any voting power whatsoever, except as required by law.
The holders of record of the Common Stock shall have the entire
voting power on all matters to the exclusion of all other
stockholders, except as required by law.
RESOLVED, That the corporation is hereby authorized to issue
and sell to General Electric Capital Corporation 5,000 shares of
Series D Preferred Stock in consideration of the payment to the
corporation of the par value thereof aggregating $50,000,000; and
FURTHER RESOLVED, That any of the President, the Senior Vice
President, Finance, the Vice President and Treasurer, the Vice
President and Comptroller, the Secretary, and the Assistant Secretary
of the corporation is hereby authorized and directed to do or cause
to be done all such acts and things and to make, execute and deliver,
or cause to be made, executed and delivered, in the name and on
behalf of the corporation, all such documents and instruments as such
officers, or any one or more of them, may deem necessary or advisable
in order fully to effectuate the purpose and intention of the
foregoing resolutions.
SECOND: The foregoing resolutions apply to 5,000 shares of Series
D Cumulative Preferred Stock of General Electric Financial Services, Inc.
IN WITNESS WHEREOF, said General Electric Financial Services, Inc.
has caused this certificate to be signed by Burton J. Kloster, Jr., its
Senior Vice President, and attested by John J. Leibell, its Assistant
Secretary, this 17th day of December, 1991.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
By: ____________________________________
Burton J. Kloster, Jr.
Senior Vice President
[SEAL]
ATTEST:
/s/ JOHN J. LEIBELL
By: ________________________
John J. Leibell
Assistant Secretary
-3-
<PAGE> 40
State of Delaware PAGE 1
Office of the Secretary of State
I, MICHAEL RATCHFORD, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF "GENERAL ELECTRIC
FINANCIAL SERVICES, INC." FILED IN THIS OFFICE ON THE SEVENTEENTH
DAY OF DECEMBER, A.D. 1992, AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ MICHAEL RATCHFORD
_______________________________________________
Michael Ratchford, Secretary of State
AUTHENTICATION: 3707218
DATE: 12/17/1992
[STATE
OF
DELAWARE
OFFICE OF THE
SECRETARY
OF
STATE
SEAL]
<PAGE> 41
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of General Electric
Financial Services, Inc., held December 15, 1992, resolutions were duly adopted
setting forth a proposed amendment to the Certificate of Incorporation of said
corporation, declaring said amendment to be advisable and directing that said
amendment be considered by the stockholders pursuant to written consents signed
by all stockholders of said corporation. The resolution setting forth said
amendment and directing that said amendment be considered by the stockholders
is as follows:
RESOLVED, That the Board of Directors of General Electric Financial
Services, Inc. (hereinafter referred to as the "corporation"), deems it
advisable, and recommends to the stockholders of the corporation, that
1. the Certificate of Amendment, filed December 29, 1987, of
the Certificate of Incorporation of the corporation be amended by
deleting the following provision in its entirety:
"The holders of record of the Series A Preferred Stock
shall not have any voting power whatsoever, except as
required by law. The holders of record of the Common Stock
shall have the entire voting power on all matters to the
exclusion of all other stockholders, except as required by
law."
2. the Certificate of Designations of Preferences of Series
B Cumulative Preferred Stock of the corporation, filed December 29,
1987, be amended by deleting the following provision in its
entirety:
1
<PAGE> 42
"The holders of record of the Series B Preferred Stock shall
not have any voting power whatsoever, except as required by law.
The holders of record of the Common Stock shall have the entire
voting power on all matters to the exclusion of all other
stockholders, except as required by law."
3. the Certificate of Designations of Preferences of Series C
Cumulative Preferred Stock of the corporation, filed December 20, 1989,
be amended by deleting the following provision in its entirety:
"The holders of record of the Series C Preferred Stock shall
not have any voting power whatsoever, except as required by law.
The holders of record of the Common Stock shall have the entire
voting power on all matters to the exclusion of all other
stockholders, except as required by law."
4. the Certificate of Designations of Preferences of Series D
Cumulative Preferred Stock of the corporation, filed December 19, 1991,
be amended by deleting the following provision in its entirety:
"The holders of record of the Series D Preferred Stock shall
not have any voting power whatsoever, except as required by law.
The holders of record of the Common Stock shall have the entire
voting power on all matters to the exclusion of all other
stockholders, except as required by law."
5. the Certificate of Amendment and each Certificate of
Designations of Preferences referred to, respectively, in paragraphs 1, 2, 3,
and 4 hereof, be further amended by adding the following provisions (as
additions to Article 4 of the Certificate of Incorporation) to the end of
Section "FIRST" of said Certificate of Amendment and to the end of the
third resolution of Section "FIRST" of each said Certificate of
Designations of Preferences:
"Except as otherwise required by law, on all matters
to be voted on by the corporation's stockholders (1) the
holders of record of the Common Stock will be entitled to
1 vote per share, (2) the holders of record of Series A
Preferred Stock will be entitled to .0001 vote per share, (3)
the holders of record of Series B Preferred Stock will be
entitled to .0001 vote per share, (4) the holders of record of
Series C Preferred Stock will be entitled to .0001 vote per
share and (5) the holders of record of Series D Preferred
Stock will be entitled to .0001 vote per share;
2
<PAGE> 43
"The Common Stock, the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock and
the Series D Preferred Stock shall vote as a single class on
all matters to be voted on by the corporation. None of the
Common Stock, the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock or the Series
D Preferred Stock will vote as a separate class, except as
required under the General Corporation Law of the State of
Delaware."
SECOND: That thereafter, by written consents signed and delivered
pursuant to Section 228 of the General Corporation Law of the State of
Delaware, the holders of all of the outstanding stock of General Electric
Financial Services, Inc., consented to and authorized said amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said General Electric Financial Services, Inc., has
caused this certificate to be signed by Burton J. Kloster, Jr., its Senior Vice
President, and attested by John J. Leibell, its Assistant Secretary, this 16th
day of December, 1992.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
By _____________________________________
Senior Vice President
[SEAL]
ATTEST:
/s/ JOHN J. LEIBELL
By _________________________
Assistant Secretary
3
<PAGE> 44
State of Delaware PAGE 1
Office of the Secretary of State
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF "GENERAL ELECTRIC
FINANCIAL SERVICES, INC." FILED IN THIS OFFICE ON THE TENTH DAY
OF FEBRUARY, A.D. 1993, AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ WILLIAM T. QUILLEN
______________________________________________
William T. Quillen, Secretary of State
AUTHENTICATION: 3781129
DATE: 02/10/1993
[STATE
OF
DELAWARE
OFFICE OF THE
SECRETARY
OF
STATE
SEAL]
<PAGE> 45
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GENERAL ELECTRIC FINANCIAL SERVICES, INC.
General Electric Financial Services, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
FIRST: That, by unanimous written consent dated January 19, 1993, in
lieu of a meeting, pursuant to Section 141(f) of the General Corporation Law of
the State of Delaware, the Board of Directors of General Electric Financial
Services, Inc., duly adopted a resolution setting forth a proposed amendment to
the Certificate of Incorporation of said corporation, declaring said amendment
to be advisable and directing that said amendment be considered by the
stockholders pursuant to written consents signed by all stockholders of said
corporation. The resolution setting forth said amendment and directing that
said amendment be considered by the stockholders is as follows:
RESOLVED, That the Board of Directors of General Electric
Financial Services, Inc. (hereinafter referred to as the "corporation"),
deems it advisable, and recommends to the stockholders of the
corporation, that
1. the name of the corporation be changed to "General
Electric Capital Services, Inc.," and
2. Article 1 of the Certificate of Incorporation be
amended to read in its entirety as follows:
"1. The name of the corporation is GENERAL ELECTRIC
CAPITAL SERVICES, INC."
1
<PAGE> 46
SECOND: That thereafter, by written consents, signed and delivered
pursuant to Section 228 of the General Corporation Law of the State of
Delaware, the holders of all of the outstanding stock of General Electric
Financial Services, Inc., consented to and authorized said amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said General Electric Financial Services, Inc., has
caused this certificate to be signed by Burton J. Kloster, Jr., its Senior Vice
President, and attested by John J. Leibell, its Assistant Secretary, this 9th
day of February, 1993.
General Electric Financial Services, Inc.
/s/ BURTON J. KLOSTER, JR.
By _____________________________________
Senior Vice President
[SEAL]
ATTEST:
/s/ JOHN J. LEIBELL
By _________________________
Assistant Secretary
2
<PAGE> 1
BY-LAWS
of
GENERAL ELECTRIC CAPITAL SERVICES, INC.
ARTICLE 1. Meetings of Stockholders.
Section 1.1. Annual Meetings. The annual meeting of stockholders for
the election of directors and the transaction of such other business as may
properly come before it shall be held at such place as shall be stated in the
notice of the meeting, such meeting to be held on the second Thursday in March
of each and every year if not a legal holiday, and if a legal holiday, then on
the next secular day following, or such other date as shall be designated from
time to time by the board of directors and stated in the notice of the meeting,
at such time as shall be stated in the notice of the meeting.
Section 1.2. Special Meetings. Except as otherwise prescribed by the
General Corporation Law of Delaware, special meetings of the stockholders for
any purpose or purposes may be called (and the location and time thereof
designated) by the President, and shall be called (and the location and time
thereof designated) by the Secretary at the request in writing of a majority of
the board of directors or of stockholders owning not less than a majority of
the outstanding shares of Common Stock of the Corporation.
Section 1.3. Quorum. The holders of record as of the pertinent record
date of a majority of the outstanding shares of Common Stock of the Corporation
shall be present or represented by proxy in order to constitute a quorum at any
meeting of the stockholders of the Corporation for the transaction of any
business.
Section 1.4. Voting. When a quorum is present at any meeting of the
stockholders, the vote of the holders of a majority of the shares of Common
Stock present or represented by proxy shall decide any question brought before
such meeting, unless the question is one upon which a different vote is
required by any provision of the General Corporation Law of Delaware, the
Certificate ofIncorporation or these by-laws, in which case such provision
shall govern and control the decision of such question.
ARTICLE 2. Directors.
Section 2.1. Number and Election. The board of directors shall
consist of that number of members as shall be fixed, from time to time, by the
stockholders or by the board of directors. Directors shall be elected (i) at
the annual meeting of stockholders as provided in Section 1.1 hereof by the
plurality of votes of shares represented in person or by proxy, or (ii) by a
majority of the board of directors as provided in Section 2.3 hereof.
<PAGE> 2
Section 2.2. Removal. Any one or more of the directors of the
Corporation may be removed at any time, either with or without cause, by a vote
at a special meeting of stockholders called pursuant to Section 1.2 hereof of
the holders of record of at least a majority of the outstanding shares of
Common Stock of the Corporation, and thereupon the term of the director or
directors who shall have been so removed shall forthwith terminate and there
shall be a vacancy or vacancies in the board of directors.
Section 2.3. Vacancies. Vacancies, and newly created directorships
resulting from any increase in the authorized number of directors, may be
filled by a majority of the directors then in office, although less than a
quorum, or by a sole remaining director, and each director so elected shall
hold office, unless sooner displaced, until the next annual election of
directors by the stockholders and until his successor shall be duly elected and
qualified.
Section 2.4. Regular Meetings. Regular meetings of the board of
directors shall be held periodically on such dates as the board of directors
may designate.
Section 2.5. Special Meetings. Special meetings of the board of
directors may be called by the President, and shall be called by the President
or the Secretary at the request of any two directors, to be held at such time
and place as shall be designated in the notice of such meeting.
Section 2.6. Notice of Special Meetings. Except as otherwise
prescribed by the General Corporation Law of Delaware, notice shall consist of
any communication reasonably calculated to inform each director of the place,
date, and hour of each special meeting of the board of directors at least two
days prior to the time of holding the meeting.
Section 2.7. Manner of Notice. In addition to any other manner of
giving notice permitted by the General Corporation Law of Delaware and these
by-laws, whenever notice is required to be given to any director, or any member
of any committee designated by the board of directors, such requirement for
notice shall not be construed to require personal delivery and such requirement
for notice shall be deemed satisfied when, as far in advance of the event with
respect to which notice is required as constitutes the minimum notice period
required by the General Corporation Law of Delaware or these by-laws, (i)
written notice is deposited in the United States mails, postage prepaid,
directed to (or delivered to a telegraph company, charges prepaid, for
transmission to) such director or committee member either at the address of
such director or committee member as it appears on the books of the Corporation
or at such person's business address, or (ii) actual notice is received orally
or in writing by the person entitled thereto.
-2-
<PAGE> 3
Section 2.8. Quorum. At each meeting of the board of directors, the
presence of that number of directors necessary to constitute a quorum, as
established from time to time by resolution of the board of directors, shall be
necessary and sufficient for the transaction of any business, and the act of a
majority of directors present at a meeting at which a quorum is present shall
be the act of the board of directors, except as otherwise specifically required
by statute, by these bylaws, or by the certificate of incorporation.
Section 2.9. Presumption of Assent. Unless otherwise provided by the
General Corporation Law of Delaware, a director of the Corporation who is
present at a meeting of the board of directors at which action is taken on any
corporate matter shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as secretary of
the meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
Section 2.10. Committees. The board of directors may, by resolution
passed by a majority of the whole board, designate one or more committees of
the board, each such committee to consist of one or more of the directors of
the Corporation. The board may designate one or more directors as alternate
members of any such committee, who may replace any absent or disqualified
member at any meeting of the committee.
The board of directors may, by resolution passed by a majority of the
whole board, also designate one or more committees to the board, each such
committee to consist of directors and/or officers of the Corporation. The board
may designate one or more directors and/or officers as alternate members of any
such committee, who may replace any absent or disqualified member at any
meeting of the committee.
Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting
an agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution, or amending the by-laws of the
Corporation. Any executive committee designated by the board of directors shall
have the power
-3-
<PAGE> 4
and authority to declare dividends and to authorize the issuance of stock.
Such committee or committees shall have such name or names as may be determined
from time to time by resolution adopted by the board of directors.
Section 2.11. Telecommunication Meetings. Unless otherwise
restricted by the certificate of incorporation or these by-laws, members of the
board of directors, or any committee designated by the board of directors, may
participate in a meeting of the board of directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
ARTICLE 3. Officers.
Section 3.1. Number. The officers of the Corporation, each of whom
shall be elected by the board of directors, may include a Chairman of the
Board, one or more Vice Chairmen of the Board, a President, an Executive Vice
President, one or more Vice Presidents, a Secretary, a Treasurer and such
Assistant Secretaries and Assistant Treasurers as the board of directors may
deem necessary. The board of directors may create such other office or offices
from time to time as shall in their judgment be necessary or convenient and
shall have the power to prescribe the duties and authority of the officers
elected thereto by the board of directors. Any two or more offices, except
those of President and Secretary, may be held by one person.
Section 3.2. Chairman of the Board of Directors. The Chairman of the
Board shall, when present, preside at the meetings of the stockholders and of
the board of directors. In addition, the Chairman of the Board shall be the
chief executive officer of the Corporation. He shall exercise the powers and
perform the duties usual to the chief executive officer and, subject to the
control and direction of the board of directors, shall have general charge of
the affairs of the Corporation. No non-U.S. citizen shall be qualified or
authorized to be Chairman of the Board or to exercise any powers or duties of
the Chairman of the Board in his absence or during his disability for so long
as the Corporation is required by the U.S. maritime laws to be a U.S. citizen
by reason of its ownership, direct or indirect, or other interest in any vessel
documented under the laws of the United States.
Section 3.3. Vice Chairman of the Board of Directors. In the absence
or disability of the Chairman of the Board, the Vice Chairman of the Board
shall, when present, preside at meetings of the stockholders and of the board
of directors. He shall have supervision of such matters as may be designated to
him by the board of directors.
-4-
<PAGE> 5
Section 3.4. President. The President shall be the chief operating
officer of the Corporation and shall have supervision of such matters as may be
designated to him by the board of directors. No non-U.S. citizen shall be
qualified or authorized to be President or to exercise any powers or duties of
the President in his absence or during his disability for so long as the
Corporation is required by the U.S. maritime laws to be a U.S. citizen by
reason of its ownership, direct or indirect, or other interest in, any vessel
documented under the laws of the United States.
Section 3.5. Vice President. Each Vice President, including the
Executive Vice President, shall perform such duties in such capacities as may
be assigned by the board of directors or the President. In the absence or
incapacity of the President the duties of the office of President shall be
performed by the Executive Vice President, unless and until the board of
directors shall otherwise direct.
Section 3.6. Vice President-Finance. The Vice President-Finance
shall be the chief financial officer of the Corporation and shall be
responsible for all financial matters pertaining to the Corporation and shall
perform such other duties as may be assigned by the President or the board of
directors.
Section 3.7. Secretary. The Secretary shall keep the minutes of all
meetings of the stockholders and of the board of directors, give all notices in
accordance with the provisions of these by-laws or as required by the General
Corporation Law of Delaware, be custodian of the corporate records and the seal
of the Corporation (with power to affix the seal to all documents and attest
the same), have general charge of the stock transfer books of the Corporation,
and perform such other duties as from time to time may be assigned to him by
the President or the board of directors.
Section 3.8. Treasurer. The Treasurer, subject to the direction and
supervision of the President and to such limitations on his authority as the
board of directors may from time to time prescribe, shall have the care and
custody of the funds and securities of the Corporation, sign checks, drafts,
notes and orders for the payment of money, pay out and dispose of the funds and
securities of the Corporation, keep accurate accounts of receipts and
disbursements of such funds and securities and in general perform the duties
customary to the office of treasurer.
Section 3.9. Comptroller. The Comptroller shall keep or cause to be
kept correct books of accounts of all of the Corporation's business, and he
shall perform such other duties incident to his office as the board of
directors may empower or direct him to perform, and in such manner as they may
direct from time to time.
-5-
<PAGE> 6
Section 3.10. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries and Assistant Treasurers shall perform such duties as
shall be assigned to them by the Secretary or the Treasurer, respectively, or
by the President or the board of directors.
Section 3.11. Term of Office; Removal; Delegation. Except as
hereinafter provided, each officer elected by the board of directors shall hold
office until the next annual meeting of the board of directors and until his
successor is elected. Any officer may be removed at any time with or without
cause by the board of directors. A vacancy in any office caused by the death,
resignation or removal of the person elected thereto or because of the creation
of a new office, or for any other reason, may be filled for the unexpired
portion of the term by election of the board of directors at any meeting. In
case of the absence, disability or refusal to act of any officer of the
Corporation, or for any other reason that the board of directors shall deem
sufficient, the board may delegate, for the time being, the powers and duties,
or any of them, of such officer to any other officer, or to any director. No
officer shall be prevented from receiving a salary by reason of the fact that
he is also a director of the Corporation.
ARTICLE 4. Certificates of Stock and Their Transfer.
Section 4.1. Certificates of Stock. The certificates of stock of the
Corporation shall be in such form as may be determined by the board of
directors, shall be numbered and shall be entered in the books of the
Corporation as they are issued. They shall exhibit the holder's name and number
of shares and shall be signed by the President or a Vice President and by the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer.
If any stock certificate is signed (a) by a transfer agent or an assistant
transfer agent or (b) by a transfer clerk acting on behalf of the Corporation
and a registrar, the signature of any officer of the Corporation may be
facsimile.
Section 4.2. Transfer of Stock. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, and upon payment of applicable taxes with respect to such transfer,
and in compliance with any restrictions on transfer applicable to the
certificate of shares represented thereby of which the Corporation shall have
notice and subject to such rules and regulations as the board of directors may
from time to time deem advisable concerning the transfer and registration of
certificates for shares of capital stock of the Corporation, the Corporation
shall issue a new certificate and record the transaction upon its books.
Transfers of shares on the books of the Corporation shall be made only by the
registered holder thereof or by his attorney or successor duly authorized as
evidenced by documents filed with the Secretary or transfer agent of the
Corporation.
-6-
<PAGE> 7
Section 4.3. No Fractional Share Certificates. Certificates shall
not be issued representing fractional shares of stock.
Section 4.4. Stockholders of Record. The Corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the General Corporation Law of Delaware.
ARTICLE 5. Indemnification.
Section 5.1. Indemnification of Directors and Officers. The
Corporation shall, to the fullest extent permitted by law as the same exists or
may hereafter be in effect, indemnify any person who (i) was or is or has
agreed to become a director or officer of the Corporation and (ii) was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether criminal, civil, administrative
or investigative, by reason of the fact that such person, at the request of the
Corporation, was or is or has agreed to become or has served as a director or
officer of the Corporation or, concurrent therewith, in any capacity with or on
behalf of any other enterprise. Expenses incurred by any such person in
defending any such action, suit or proceeding shall be paid or reimbursed by
the Corporation promptly upon (i) the authorization of such payment or
reimbursement by the President, Chairman of the Board of Directors,
disinterested directors or shareholders of the Corporation and (ii) receipt by
the Corporation of an undertaking by or on behalf of such person to repay such
expenses if it shall ultimately be determined that such person is not entitled
to be indemnified by the Corporation. The right of any such person to be
indemnified and to the payment or reimbursement of expenses incurred in
defending any such action, suit or proceeding in advance of its final
disposition provided in and authorized by this by-law shall (i) extend to the
heirs and legal representatives of such person, (ii) be enforceable against the
Corporation by such person who shall be presumed to have relied thereon in
serving, continuing to serve, or agreeing to serve as a director or officer of
the Corporation, (iii) not be exclusive of any other right which such person
may have or hereafter acquire under any statute, provision of the Certificate
of Incorporation, by-law, agreement, vote of shareholders or disinterested
directors or otherwise and (iv) be retroactive to events occurring prior to the
adoption of this by-law to the extent not prohibited by law. No amendment of
this by-law shall impair the rights of any such person arising at any time with
respect to events occurring prior to such amendment. For purposes of this
by-law: the term "Corporation" shall include any constituent corporation
(including any constituent of a constituent) absorbed by the Corporation in a
consolidation or merger; the term "other enterprise" shall include any
corporation of any type or kind, domestic or foreign, or any partnership, joint
venture, trust or employee
-7-
<PAGE> 8
benefit plan; service "at the request of the Corporation" shall include, but
not be limited to, service by any such person as a director or officer of the
Corporation or in any capacity with or on behalf of any such other enterprise
which imposes duties on, or involves services to the Corporation or such other
enterprise by, such person with respect to an employee benefit plan, its
participants or beneficiaries; any excise taxes assessed on any such person
with respect to an employee benefit plan shall be deemed to be indemnifiable
expenses; and action by any such person in good faith with respect to any
employee benefit plan which such person reasonably believes to be in the
interest of the participants and beneficiaries of such plan shall be deemed to
be action not opposed to the best interests of the Corporation.
ARTICLE 6. General Provisions.
Section 6.1. Fiscal Year. The fiscal year of the Corporation shall be
the calendar year.
Section 6.2. Seal. The corporate seal shall have inscribed thereon the
name of the Corporation, and the words "CORPORATE SEAL," "DELAWARE" and "1984."
Such seal may be used by causing it, or a facsimile thereof, to be impressed or
affixed or otherwise reproduced.
ARTICLE 7. Amendments.
Section 7.1. In General. Any provision of these by-laws may be altered,
amended or repealed from time to time by the affirmative vote of the holders of
a majority of the Common Stock present in person or by proxy at any annual
meeting or special meeting of stockholders at which a quorum is present, or by
the affirmative vote of a majority of the directors then qualified and acting
at any regular or special meeting of the board at which a quorum is present;
provided, however, that the stockholders may provide specifically for
limitations on the power of directors to amend particular by-laws and, in such
event, the directors' power of amendment shall be so limited.
-8-
<PAGE> 1
EXHIBIT 4(iii)
March 22, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Subject: General Electric Capital Services, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 1993 -- File No. 0-14804
Dear Sirs:
Neither General Electric Capital Services, Inc. (the "Corporation") nor any
of its subsidiaries has outstanding any instrument with respect to its long-term
debt under which the total amount of securities authorized exceeds 10% of the
total assets of the registrant and its subsidiaries on a consolidated basis. In
accordance with paragraph (b)(4)(iii) of Item 601 of Regulation S-K (17 CFR
sec. 229.601), the Corporation hereby agrees to furnish to the Securities and
Exchange Commission, upon request, a copy of each instrument which defines the
rights of holders of such long-term debt.
Very truly yours,
GENERAL ELECTRIC CAPITAL SERVICES, INC.
By: /s/ J. A. PARKE
---------------------------------------
J. A. Parke,
Senior Vice President, Finance
<PAGE> 1
EXHIBIT 12
GENERAL ELECTRIC CAPITAL SERVICES, INC.
AND CONSOLIDATED AFFILIATES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------
(Dollar amounts in millions) 1993 1992 1991 1990 1989
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net earnings........................................ $1,807 $1,499 $1,256 $1,094 $ 927
Provision for income taxes.......................... 841 536 382 301 211
Minority interest................................... 134 40 33 41 46
Cumulative effect to January 1, 1991 of change in
accounting principle for postretirement benefits
other
than pensions..................................... -- -- 19 -- --
------ ------ ------ ------ ------
Earnings before income taxes, minority interest and
cumulative effect of change in accounting
principle......................................... 2,782 2,075 1,690 1,436 1,184
------ ------ ------ ------ ------
Fixed charges:
Interest and discount............................. 6,519 6,176 6,598 6,598 6,085
One-third of rentals.............................. 166 110 56 53 45
------ ------ ------ ------ ------
Total fixed charges................................. 6,685 6,286 6,654 6,651 6,130
------ ------ ------ ------ ------
Less interest capitalized, net of amortization...... 4 6 7 19 11
------ ------ ------ ------ ------
Earnings before income taxes, minority interest and
cumulative effect of change in accounting
principle, plus fixed charges..................... $9,463 $8,355 $8,337 $8,068 $7,303
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of earnings to fixed charges.................. 1.42 1.33 1.25 1.21 1.19
------ ------ ------ ------ ------
------ ------ ------ ------ ------
</TABLE>
<PAGE> 1
EXHIBIT 23(ii)
To the Board of Directors
General Electric Capital Services, Inc.
We consent to incorporation by reference in the Registration Statement on
Form S-3 (No. 33-7348) of General Electric Capital Services, Inc. of our report
dated February 11, 1994, relating to the statement of financial position of
General Electric Capital Services, Inc. and consolidated affiliates as of
December 31, 1993 and 1992 and the related statements of current and retained
earnings and cash flows and related schedules for each of the years in the
three-year period ended December 31, 1993, which report appears in the December
31, 1993 annual report on Form 10-K of General Electric Capital Services, Inc.
Our report refers to a change in 1993 in the method of accounting for certain
investments in securities.
/s/ KPMG PEAT MARWICK
Stamford, Connecticut
March 23, 1994
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, being
directors and/or officers of General Electric Capital Services, Inc., a Delaware
corporation (the "Corporation"), hereby constitutes and appoints Gary C. Wendt,
James A. Parke, John P. Malfettone and Burton J. Kloster, Jr., and each of them,
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and in his name, place and stead in any and all
capacities, to sign one or more Annual Reports for the Corporation's fiscal year
ended December 31, 1993, on Form 10-K under the Securities Exchange Act of 1934,
as amended, or such other form as such attorney-in-fact may deem necessary or
desirable, any amendments thereto, and all additional amendments thereto 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 to the end that such Annual Report or
Annual Reports shall comply with the Securities Exchange Act of 1934, as
amended, and the applicable Rules and Regulations of the Securities and Exchange
Commission adopted or issued pursuant thereto, as fully and to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them or their or his
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 hand this
23rd day of March, 1994.
/s/ GARY C. WENDT /s/ JAMES A. PARKE
- ---------------------------------------- ---------------------------------
Gary C. Wendt, James A. Parke,
Chairman of the Board, Senior Vice President, Finance
President and Chief Executive Officer (Principal Financial Officer)
(Principal Executive Officer)
/s/ JOHN P. MALFETTONE
----------------------------------
John P. Malfettone
Vice President and Comptroller
(Principal Accounting Officer)
<TABLE>
<S> <C>
/s/ KAJ AHLMANN /s/ BENJAMIN W. HEINEMAN, JR.
- ---------------------------------------- --------------------------------------
Kaj Ahlmann, Director Benjamin W. Heineman, Jr., Director
/s/ NIGEL D. T. ANDREWS /s/ MICHAEL D. LOCKHART
- ---------------------------------------- --------------------------------------
Nigel D. T. Andrews, Director Michael D. Lockhart, Direcotr
/s/ JAMES R. BUNT /s/ HUGH J. MURPHY
- ---------------------------------------- --------------------------------------
James R. Bunt, Director Hugh J. Murphy, Director
/s/ DENIS J. NAYDEN
- ---------------------------------------- --------------------------------------
Michael A. Carpenter, Director Denis J. Nayden, Director
/s/ DENNIS D. DAMMERMAN /s/ JOHN M. SAMUELS
- ---------------------------------------- --------------------------------------
Dennis D. Dammerman, Director John M. Samuels, Director
/s/ PAOLO FRESCO /s/ EDWARD D. STEWART
- ---------------------------------------- --------------------------------------
Paolo Fresco, Director Edward D. Stewart, Director
/s/ DALE F. FREY /s/ JOHN F. WELCH, JR.
- ---------------------------------------- --------------------------------------
Dale F. Frey, Director John F. Welch, Jr., Director
</TABLE>
A MAJORITY OF THE BOARD OF DIRECTORS
