<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM 10-Q
-------------
| X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 27, 1999
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
------------------------------
Commission file number 0-14804
------------------------------
GENERAL ELECTRIC CAPITAL SERVICES, INC.
-----------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 06-1109503
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
260 LONG RIDGE ROAD,
STAMFORD, CONNECTICUT 06927
(Address of principal executive offices) (Zip Code)
(203) 357-4000
(Registrant's telephone number, including area code)
------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No | |
At May 10, 1999, 101 shares of common stock with a par value of $10,000 were
outstanding.
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b)
OF FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED DISCLOSURE
FORMAT.
<PAGE>
TABLE OF CONTENTS
PAGE
--------
PART I - FINANCIAL INFORMATION.
Item 1. Financial Statements ........................ 1
Item 2. Management's Discussion and Analysis of
Results of Operations ....................... 6
Exhibit 12. Computation of Ratio of Earnings to Fixed
Charges and Computation of Ratio of Earnings
to Combined Fixed Charges and Preferred Stock
Dividends ................................... 9
PART II - OTHER INFORMATION.
Item 6. Exhibits and Reports on Form 8-K ............ 10
Signatures ................................................ 11
Index to Exhibits ......................................... 12
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
CONDENSED STATEMENT OF CURRENT AND RETAINED EARNINGS
(Unaudited)
THREE MONTHS ENDED
--------------------
MARCH 27, MARCH 28,
(In millions) 1999 1998
-------- --------
<S> <C> <C>
REVENUES
Revenues from services ................................. $ 10,743 $ 9,525
Sales of goods ......................................... 1,640 1,626
-------- --------
12,383 11,151
-------- --------
EXPENSES
Interest ............................................... 2,113 2,025
Operating and administrative ........................... 3,638 3,158
Cost of goods sold ..................................... 1,511 1,482
Insurance losses and policyholder and annuity benefits . 2,619 2,213
Provision for losses on financing receivables .......... 379 332
Depreciation and amortization of buildings and
equipment and equipment on operating leases ........... 685 656
Minority interest in net earnings of consolidated
affiliates ............................................ 38 33
-------- --------
10,983 9,899
-------- --------
EARNINGS
Earnings before income taxes ........................... 1,400 1,252
Provision for income taxes ............................. (368) (371)
-------- --------
NET EARNINGS ........................................... 1,032 881
Dividends .............................................. (386) (503)
Retained earnings at beginning of period ............... 15,075 12,951
-------- --------
RETAINED EARNINGS AT END OF PERIOD ..................... $ 15,721 $ 13,329
======== ========
</TABLE>
See Notes to Condensed, Consolidated Financial Statements.
1
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (Continued).
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
CONDENSED STATEMENT OF FINANCIAL POSITION
MARCH DECEMBER
27, 31,
(In millions) 1999 1998
-------- --------
<S> <C> <C>
(Unaudited)
ASSETS
Cash and equivalents ................................... $ 3,780 $ 3,342
Investment securities .................................. 78,124 78,458
Financing receivables:
Time sales and loans, net of deferred income ......... 76,357 77,283
Investment in financing leases, net of deferred income 46,829 47,571
-------- --------
123,186 124,854
Allowance for losses on financing receivables ........ (3,245) (3,288)
-------- --------
Financing receivables - net ........................ 119,941 121,566
Other receivables - net ................................ 30,056 25,973
Inventories ............................................ 613 744
Equipment on operating leases (at cost), less
accumulated amortization of $7,282 and $7,021 ......... 21,192 20,941
Intangible assets ...................................... 13,382 13,639
Other assets ........................................... 40,642 38,634
-------- --------
TOTAL ASSETS ..................................... $307,730 $303,297
======== ========
LIABILITIES AND SHARE OWNERS' EQUITY
Short-term borrowings .................................. $114,488 $113,162
Long-term borrowings:
Senior ............................................... 58,882 58,042
Subordinated ......................................... 996 996
Insurance liabilities, reserves and annuity benefits ... 80,271 77,259
Other liabilities ...................................... 20,021 21,062
Deferred income taxes .................................. 9,353 9,590
-------- --------
Total liabilities ................................ 284,011 280,111
-------- --------
Minority interest in equity of consolidated affiliates . 3,862 3,459
-------- --------
Accumulated unrealized gains on investment
securities - net ...................................... 1,932 2,376
Accumulated foreign currency translation adjustments ... (287) (215)
-------- --------
Accumulated non-owner changes in share owners' equity .. 1,645 2,161
Capital stock .......................................... 11 11
Additional paid-in capital ............................. 2,480 2,480
Retained earnings ...................................... 15,721 15,075
-------- --------
Total share owners' equity ....................... 19,857 19,727
-------- --------
TOTAL LIABILITIES AND SHARE OWNERS' EQUITY ....... $307,730 $303,297
======== ========
</TABLE>
See Notes to Condensed, Consolidated Financial Statements.
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (Continued).
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED
--------------------
MARCH 27, MARCH 28,
(In millions) 1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings ........................................... $ 1,032 $ 881
Adjustments to reconcile net earnings to cash provided
from operating activities:
Provision for losses on financing receivables ........ 379 332
Depreciation and amortization of buildings and
equipment and equipment on operating leases ......... 685 656
Other - net .......................................... 459 810
-------- --------
Cash from operating activities ................... 2,555 2,679
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in loans to customers ......................... (19,236) (18,844)
Principal collections from customers - loans ........... 18,480 19,249
Investment in equipment for financing leases ........... (3,509) (3,596)
Principal collections from customers - financing leases 3,251 2,856
Net change in credit card receivables .................. 763 89
Buildings and equipment and equipment on
operating leases:
- additions ........................................ (1,368) (1,560)
- dispositions ..................................... 871 1,427
Payments for principal businesses purchased, net of
cash acquired ......................................... (4,125) (686)
Purchases of securities by insurance and
annuity businesses .................................... (5,594) (5,608)
Dispositions and maturities of securities by
insurance and annuity businesses ...................... 5,495 4,698
Other - net ............................................ (740) (1,229)
-------- --------
Cash used for investing activities ............... (5,712) (3,204)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in borrowings (maturities 90 days or less) .. 3,489 6,477
Newly issued debt - short-term (maturities 91-365 days) 1,354 1,556
- long-term (longer than one year) .. 6,206 3,853
Proceeds - non-recourse, leveraged lease debt .......... 165 156
Repayments and other reductions:
- short-term (maturities 91-365 days) (6,512) (8,221)
- long-term (longer than one year) .. (774) (2,630)
Principal payments - non-recourse, leveraged lease debt (206) (184)
Proceeds from sales of investment contracts ............ 1,548 1,067
Redemption of investment contracts ..................... (1,589) (1,280)
Dividends paid ......................................... (386) (503)
Issuance of variable cumulative preferred stock by
consolidated affiliate ................................ 300 --
-------- --------
Cash from financing activities ................... 3,595 291
-------- --------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS ............ 438 (234)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD ............ 3,342 4,904
-------- --------
CASH AND EQUIVALENTS AT END OF PERIOD .................. $ 3,780 $ 4,670
======== ========
</TABLE>
See Notes to Condensed, Consolidated Financial Statements.
3
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (Continued).
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
NOTES TO CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying condensed quarterly financial statements represent
the adding together of General Electric Capital Services, Inc. and all
majority-owned and controlled affiliates (collectively called "the
Corporation" or "GECS"). All significant transactions among the parent
and consolidated affiliates have been eliminated. Certain prior period
data have been reclassified to conform to the current period
presentation.
2. The condensed consolidated quarterly financial statements are
unaudited. These statements include all adjustments (consisting of
normal recurring accruals) considered necessary by management to
present a fair statement of the results of operations, financial
position and cash flows. The results reported in these condensed
consolidated financial statements should not be regarded as
necessarily indicative of results that may be expected for the entire
year.
3. In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities (the "Statement"). The
Statement requires that, upon adoption, all derivative instruments
(including certain derivative instruments embedded in other contracts)
be recognized in the balance sheet at fair value, and that changes in
such fair values be recognized in earnings unless specific hedging
criteria are met. Changes in the values of derivatives that meet these
hedging criteria will ultimately offset related earnings effects of
the hedged items; effects of certain changes in fair value are
recorded in equity pending recognition in earnings. The Corporation
expects to adopt the Statement on January 1, 2000. The impact of
adoption will be determined by several factors, including the specific
hedging instruments in place and their relationships to hedged items,
as well as market conditions. Management has not estimated the effects
of adoption as it believes that such determination will not be
meaningful until closer to the adoption date.
4. A summary of changes in share owner's equity that do not result
directly from transactions with share owners is provided below.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------
MARCH 27, MARCH 28,
(In millions) 1999 1998
-------- --------
<S> <C> <C>
Net earnings ................................. $ 1,032 $ 881
Unrealized gains (losses) on investment
securities - net ............................ (444) 261
Foreign currency translation adjustments ..... (72) (42)
-------- --------
Total ........................................ $ 516 $ 1,100
======== ========
</TABLE>
4
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (Continued).
5. Revenues and net earnings of the Corporation, by operating segment,
for the first three months of 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------
MARCH 27, MARCH 28,
(In millions) 1999 1998
-------- --------
<S> <C> <C>
REVENUES
Consumer Services ............................ $ 4,015 $ 3,720
Equipment Management ......................... 3,543 3,303
Mid-Market Financing ......................... 1,014 808
Specialized Financing ........................ 800 751
Specialty Insurance .......................... 2,978 2,431
All other .................................... 33 138
-------- --------
Total revenues ............................... $ 12,383 $ 11,151
======== ========
NET EARNINGS
Consumer Services ............................ $ 211 $ 154
Equipment Management ......................... 210 170
Mid-Market Financing ......................... 116 103
Specialized Financing ........................ 195 178
Specialty Insurance .......................... 360 309
All other .................................... (60) (33)
-------- --------
Total net earnings ........................... $ 1,032 $ 881
======== ========
</TABLE>
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS.
OVERVIEW
Net earnings for the first three months of 1999 were $1,032 million, a $151
million (17%) increase over the first three months of 1998. The results
reflected the globalization and diversity of the Corporation's businesses and
were led by double-digit increases in each of its five segments. The improvement
in earnings was largely attributable to the effects of continued asset growth,
principally from acquisitions of businesses and portfolios and higher
origination volume.
OPERATING RESULTS
TOTAL REVENUES from all sources increased $1,232 million (11%) to $12,383
million for the first three months of 1999, compared with $11,151 million for
the first three months of 1998. This increase was led by acquisition-related
growth in the Consumer Services and Mid-Market Financing segments and a
combination of core and acquisition growth in the Specialty Insurance and
Equipment Management segments.
INTEREST EXPENSE for the first three months of 1999 was $2,113 million, 4%
higher than for the first three months of 1998. The increase reflected the
effects of higher average borrowings used to finance asset growth, partially
offset by the effects of lower average interest rates. The composite interest
rate on the Corporation's borrowings for the first three months of 1999 was
5.33% compared with 6.12% in the first three months of 1998.
OPERATING AND ADMINISTRATIVE EXPENSES were $3,638 million for the first three
months of 1999, a 15% increase over the first three months of 1998. The increase
primarily reflected costs associated with businesses and portfolios acquired
over the past year, higher investment levels and increases in insurance
commissions and other costs that vary directly with increased revenues.
INSURANCE LOSSES AND POLICYHOLDER AND ANNUITY BENEFITS increased $406 million to
$2,619 million for the first three months of 1999, compared with the first three
months of 1998. The increase primarily reflected the effects of business
acquisitions and growth in premium volume throughout the period, partially
offset by improved market conditions in the mortgage insurance business.
PROVISION FOR LOSSES ON FINANCING RECEIVABLES increased to $379 million for the
first three months of 1999 from $332 million for the first three months of 1998.
These provisions principally related to credit cards, personal loans and auto
loans and auto leases in the Consumer Services segment, which are discussed
below under Portfolio Quality.
DEPRECIATION AND AMORTIZATION OF BUILDINGS AND EQUIPMENT AND EQUIPMENT ON
OPERATING LEASES increased $29 million to $685 million for the first three
months of 1999 compared with $656 million for the first three months of 1998.
The increase was principally the result of higher levels of equipment on
operating leases, primarily reflecting acquisition growth.
PROVISION FOR INCOME TAXES was $368 million for the first three months of 1999
(an effective tax rate of 26.3%), compared with $371 million for the first three
months of 1998 (an effective tax rate of 29.6%). The lower provision for income
taxes and effective tax rate primarily reflected decreased taxes on non-U.S.
earnings.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS (Continued).
OPERATING SEGMENTS
Revenues and net earnings of the Corporation, by operating segment, for the
first three months of 1999 and 1998 are summarized and discussed below.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------
MARCH 27, MARCH 28,
(In millions) 1999 1998
-------- --------
<S> <C> <C>
REVENUES
Consumer Services ............................ $ 4,015 $ 3,720
Equipment Management ......................... 3,543 3,303
Mid-Market Financing ......................... 1,014 808
Specialized Financing ........................ 800 751
Specialty Insurance .......................... 2,978 2,431
All other .................................... 33 138
-------- --------
Total revenues ............................... $ 12,383 $ 11,151
======== ========
NET EARNINGS
Consumer Services ............................ $ 211 $ 154
Equipment Management ......................... 210 170
Mid-Market Financing ......................... 116 103
Specialized Financing ........................ 195 178
Specialty Insurance .......................... 360 309
All other .................................... (60) (33)
-------- --------
Total net earnings ........................... $ 1,032 $ 881
======== ========
</TABLE>
Consumer Services revenues increased 8% and net earnings increased 37% for the
first three months of 1999, compared to the first three months of 1998. The
increase in revenues was led by acquisition-related growth at Global Consumer
Finance and GE Financial Assurance, the Corporation's consumer savings and
insurance business, partially offset by the effects of planned asset reductions
in U.S. consumer credit card and automobile financing activities. The increase
in net earnings was led by a combination of core and acquisition growth at
Global Consumer Finance.
Equipment Management revenues grew 7% and net earnings grew 24% for the first
three months of 1999, compared to the corresponding period in 1998, reflecting
asset growth and gains recognized on sales of assets. Increased volume at
Information Technology Solutions also contributed to the revenue increase and
improved asset quality contributed to the increase in net earnings.
Mid-Market Financing revenues grew 25% and net earnings increased 13% for the
first three months of 1999, compared to the corresponding period in 1998,
primarily as a result of acquisition growth.
Specialized Financing revenues rose 7% and net earnings increased 10% in the
first three months of 1999, compared to the first three months of 1998. The
increases in revenues and net earnings principally reflected asset growth as
well as the effects of asset gains, including securitizations.
Specialty Insurance revenues grew 23% and net earnings grew 16% in the first
three months of 1999, compared to the corresponding period in 1998. These
increases resulted from increased premium and investment income associated with
acquisitions, origination volume and continued growth in the investment
portfolios, as well as a higher level of realized gains on investment
securities. Net earnings were also favorably affected by improved conditions in
the Mortgage Insurance business, the result of improvements in loss experience.
PORTFOLIO QUALITY
FINANCING RECEIVABLES are the financing segment's largest asset and its primary
source of revenues. The portfolio of financing receivables, before allowance for
losses, decreased to $123.2 billion at March 27, 1999, from $124.9 billion
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS (Continued).
at the end of 1998, primarily reflecting the effects of foreign currency
translation on European financing receivables, partially offset by higher
origination volume and acquisition growth. The related allowances for losses at
March 27, 1999 amounted to $3.2 billion ($3.3 billion at the end of 1998) and,
in management's judgment, are appropriate given the risk profile of the
portfolio. A discussion about the quality of certain elements of the portfolio
of financing receivables follows. "Nonearning" receivables are those that are 90
days or more delinquent (or for which collection has otherwise become doubtful)
and "reduced-earning" receivables are commercial receivables whose terms have
been restructured to a below-market yield. The following discussion of the
nonearning and reduced-earning receivable balances and write-off amounts
excludes amounts related to Montgomery Ward Holding Corp. and affiliates, which
are separately discussed below.
CONSUMER FINANCING RECEIVABLES, primarily credit card and personal loans and
auto loans and leases, were $51.1 billion at March 27, 1999, a decrease of $0.5
billion from the end of 1998. Nonearning receivables were $1.2 billion at March
27, 1999, 2.3% of total consumer financing receivables, compared with $1.3
billion, 2.4% of total consumer receivables, at December 31, 1998. Write-offs of
consumer receivables decreased to $286 million for the first three months of
1999, compared with $356 million for the first three months of 1998. This
decrease was primarily attributable to lower average receivable balances
resulting from securitization and other sales of portfolios as well as the
effects of lower delinquencies during the first three months of 1999.
OTHER FINANCING RECEIVABLES, totaling $72.1 billion at March 27, 1999 ($73.3
billion at December 31, 1998), consisted of a diverse commercial, industrial and
equipment loan and lease portfolio. Related nonearning and reduced-earning
receivables were less than 1% of total other financing receivables at March 27,
1999 and December 31, 1998.
As discussed in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998, Montgomery Ward Holding Corp. ("MWHC") filed a bankruptcy
petition for reorganization in 1997. The Corporation's recorded investment in
MWHC and affiliates at March 27, 1999 was $576 million ($622 million at the end
of 1998). Subsequent to the filing of the petition, the Corporation committed to
provide MWHC up to $1.0 billion in debtor-in-possession financing, a majority of
which has been syndicated: the Corporation's loans under this facility at March
27, 1999 were approximately $149 million. The Corporation also provides
revolving credit card financing directly to customers of MWHC and affiliates;
such receivables totaled $3.0 billion at March 27, 1999, including $1.8 billion
that have been sold with recourse. The obligations of customers with respect to
these receivables are not affected by the bankruptcy filing. On April 30, 1999,
MWHC filed a plan of reorganization that, if approved, would allow MWHC to
emerge from bankruptcy in August 1999. As part of the restructuring provided for
in the plan, the Corporation will acquire The Signature Group, which was not in
bankruptcy, as well as the equity of the reorganized retailer.
The Corporation held loans and leases to commercial airlines amounting to $10.4
billion at March 27, 1999, up from $10.2 billion at the end of 1998.
OTHER MATTERS
YEAR 2000
As discussed in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998, the Corporation is applying a Six Sigma quality approach to
identify and mitigate Year 2000 issues in its information systems, products
and services, facilities and suppliers, as well as to assess the extent to which
Year 2000 issues will affect its customers. That approach includes a fourth and
final phase - the control phase - for the completion, testing and continued
monitoring of Year 2000 readiness and the completion of necessary contingency
plans. The Corporation is developing, testing and implementing contingency plans
to ameliorate any potential internal or external disruption of critical business
processes. The specific actions identified in such contingency plans differ
depending on circumstances, but most often include manual work-arounds,
deployment of backup or secondary technologies, rearranging work schedules, and
substitution of suppliers, as appropriate. While the Corporation does not expect
significant disruptions of critical business processes caused by internal Year
2000 issues, the likelihood of externally-caused disruptions and the ability of
the contingency plans to ameliorate the effects of any such externally-caused
disruptions is not determinable. The total estimate of Year 2000 expenditures,
adjusted for increases related to acquired companies, is in line with previous
projections. The activities related to Year 2000 efforts necessarily involve
estimates and projections of activities and resources that will be required in
the future. These estimates and projections could change as work progresses.
8
<PAGE>
EXHIBIT 12
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
THREE MONTHS ENDED MARCH 27, 1999
(Unaudited)
RATIO OF
EARNINGS
TO
COMBINED
FIXED
RATIO OF CHARGES
EARNINGS AND
TO PREFERRED
FIXED STOCK
(Dollar amounts in millions) CHARGES DIVIDENDS
-------- --------
<S> <C> <C>
Net earnings ........................................... $ 1,032 $ 1,032
Provision for income taxes ............................. 368 368
Minority interest in net earnings of consolidated
affiliates ............................................ 38 38
-------- --------
Earnings before provision for income taxes and
minority interest ..................................... 1,438 1,438
-------- --------
Fixed charges:
Interest ............................................. 2,168 2,168
One-third of rentals ................................. 88 88
-------- --------
Total fixed charges .................................... 2,256 2,256
-------- --------
Less interest capitalized, net of amortization ......... 22 22
-------- --------
Earnings before provision for income taxes and
minority interest, plus fixed charges ................. $ 3,672 $ 3,672
======== ========
Ratio of earnings to fixed charges ..................... 1.63
========
Preferred stock dividend requirements .................. $ --
Ratio of earnings before provision for income taxes to
net earnings .......................................... 1.36
Preferred stock dividend factor on pre-tax basis ....... --
Fixed charges .......................................... 2,256
--------
Total fixed charges and preferred stock dividend
requirements .......................................... $ 2,256
========
Ratio of earnings to combined fixed charges and
preferred stock dividends ............................. 1.63
========
</TABLE>
For purposes of computing the ratios, fixed charges consist of interest on all
indebtedness and one-third of rentals, which management believes is a reasonable
approximation of the interest factor of such rentals.
9
<PAGE>
PART II--OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. EXHIBITS.
Exhibit 12. Computation of ratio of earnings to fixed charges and
computation of ratio of earnings to combined fixed
charges and preferred stock dividends.
Exhibit 27. Financial Data Schedule (filed electronically only).
b. REPORTS ON FORM 8-K.
None.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENERAL ELECTRIC CAPITAL SERVICES, INC.
---------------------------------------
(Registrant)
Date: May 11, 1999 By: /s/ J.A. Parke
----------------------------------
J.A. Parke,
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
Date: May 11, 1999 By: /s/ J.C. Amble
-----------------------------------
J.C. Amble,
Vice President and Controller
(Principal Accounting Officer)
11
<PAGE>
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
INDEX TO EXHIBITS
EXHIBIT NO. PAGE
- ----------- --------
12 Computation of ratio of earnings to fixed charges
and computation of ratio of earnings to combined
fixed charges and preferred stock dividends ....... 9
27 Financial Data Schedule (filed electronically only)
12
<PAGE>
EXHIBIT 12
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
THREE MONTHS ENDED MARCH 27, 1999
(Unaudited)
RATIO OF
EARNINGS
TO
COMBINED
FIXED
RATIO OF CHARGES
EARNINGS AND
TO PREFERRED
FIXED STOCK
(Dollar amounts in millions) CHARGES DIVIDENDS
-------- --------
<S> <C> <C>
Net earnings ........................................... $ 1,032 $ 1,032
Provision for income taxes ............................. 368 368
Minority interest in net earnings of consolidated
affiliates ............................................ 38 38
-------- --------
Earnings before provision for income taxes and
minority interest ..................................... 1,438 1,438
-------- --------
Fixed charges:
Interest ............................................. 2,168 2,168
One-third of rentals ................................. 88 88
-------- --------
Total fixed charges .................................... 2,256 2,256
-------- --------
Less interest capitalized, net of amortization ......... 22 22
-------- --------
Earnings before provision for income taxes and
minority interest, plus fixed charges ................. $ 3,672 $ 3,672
======== ========
Ratio of earnings to fixed charges ..................... 1.63
========
Preferred stock dividend requirements .................. $ --
Ratio of earnings before provision for income taxes to
net earnings .......................................... 1.36
Preferred stock dividend factor on pre-tax basis ....... --
Fixed charges .......................................... 2,256
--------
Total fixed charges and preferred stock dividend
requirements .......................................... $ 2,256
========
Ratio of earnings to combined fixed charges and
preferred stock dividends ............................. 1.63
========
</TABLE>
For purposes of computing the ratios, fixed charges consist of interest on all
indebtedness and one-third of rentals, which management believes is a reasonable
approximation of the interest factor of such rentals.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 27, 1999, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000797463
<NAME> GENERAL ELECTRIC CAPITAL SERVICES, INC.
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-27-1999
<CASH> 3,780
<SECURITIES> 78,124
<RECEIVABLES> 123,186
<ALLOWANCES> 3,245
<INVENTORY> 613
<CURRENT-ASSETS> 0
<PP&E> 33,257
<DEPRECIATION> 9,030
<TOTAL-ASSETS> 307,730
<CURRENT-LIABILITIES> 0
<BONDS> 59,878
0
10
<COMMON> 1
<OTHER-SE> 19,846
<TOTAL-LIABILITY-AND-EQUITY> 307,730
<SALES> 1,640
<TOTAL-REVENUES> 12,383
<CGS> 1,511
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,638
<LOSS-PROVISION> 379
<INTEREST-EXPENSE> 2,113
<INCOME-PRETAX> 1,400
<INCOME-TAX> 368
<INCOME-CONTINUING> 1,032
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,032
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
