UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 1, 2000
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OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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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 July 26, 2000, 1,012 shares of common stock with a par value of $1,000 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.
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
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PART I - FINANCIAL INFORMATION
<S> <C> <C>
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
</TABLE>
<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 Six Months Ended
---------------------------------- --------------------------------
July 1, June 26, July 1, June 26,
(In millions) 2000 1999 2000 1999
---------------- -------------- -------------- --------------
Revenues
<S> <C> <C> <C> <C>
Revenues from services .................................. $ 14,065 $ 11,417 $ 27,513 $ 22,160
Sales of goods .......................................... 2,405 1,961 4,638 3,601
---------------- -------------- -------------- --------------
16,470 13,378 32,151 25,761
---------------- -------------- -------------- --------------
Expenses
Interest ................................................ 2,811 2,237 5,381 4,350
Operating and administrative ............................ 4,706 3,859 9,536 7,497
Cost of goods sold ...................................... 2,238 1,806 4,308 3,317
Insurance losses and policyholder and annuity benefits .. 3,852 2,705 6,782 5,324
Provision for losses on financing receivables ........... 421 442 942 821
Depreciation and amortization of buildings and equipment
and equipment on operating leases...................... 692 823 1,656 1,508
Minority interest in net earnings of consolidated affiliates . 53 45 103 83
---------------- -------------- -------------- --------------
14,773 11,917 28,708 22,900
---------------- -------------- -------------- --------------
Earnings
Earnings before income taxes ............................ 1,697 1,461 3,443 2,861
Provision for income taxes............................... (420) (369) (956) (737)
---------------- -------------- -------------- --------------
Net Earnings ............................................ 1,277 1,092 2,487 2,124
Dividends ............................................... (441) (409) (882) (795)
Retained earnings at beginning of period ................ 18,621 15,721 17,852 15,075
---------------- -------------- -------------- --------------
Retained earnings at end of period ...................... $ 19,457 $ 16,404 $ 19,457 $ 16,404
================ ============== ============== ==============
</TABLE>
See Notes to Condensed, Consolidated Financial Statements.
1
<PAGE>
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
Condensed Statement of Financial Position
July 1, December 31,
(In millions) 2000 1999
----------------- -----------------
(Unaudited)
Assets
<S> <C> <C>
Cash and equivalents ...................................................... $ 10,571 $ 6,931
Investment securities ..................................................... 83,209 80,485
Financing receivables:
Time sales and loans, net of deferred income............................ 98,823 93,625
Investment in financing leases, net of deferred income.................. 48,521 47,783
----------------- -----------------
147,344 141,408
Allowance for losses on financing receivables .......................... (3,930) (3,779)
----------------- -----------------
Financing receivables - net ......................................... 143,414 137,629
Other receivables - net ................................................... 29,335 30,681
Inventories ............................................................... 1,315 1,209
Equipment on operating leases (at cost), less accumulated amortization of
$7,712 and $7,392 ...................................................... 24,530 23,605
Intangible assets ......................................................... 15,457 14,748
Other assets .............................................................. 53,405 49,730
----------------- -----------------
Total assets ...................................................... $ 361,236 $ 345,018
================= =================
Liabilities and share owners' equity
Short-term borrowings ..................................................... $ 121,327 $ 129,259
Long-term borrowings:
Senior ................................................................. 75,899 69,770
Subordinated ........................................................... 996 996
Insurance liabilities, reserves and annuity benefits ...................... 106,667 86,776
Other liabilities ......................................................... 22,856 24,550
Deferred income taxes ..................................................... 8,603 8,955
----------------- -----------------
Total liabilities ................................................. 336,348 320,306
----------------- -----------------
Minority interest in equity of consolidated affiliates .................... 4,012 4,391
----------------- -----------------
Accumulated unrealized (losses) / gains on investment securities - net .... (670) 170
Accumulated foreign currency translation adjustments ...................... (594) (384)
----------------- -----------------
Accumulated non-owner changes in share owners' equity ..................... (1,264) (214)
Capital stock ............................................................. 11 11
Additional paid-in capital ................................................ 2,672 2,672
Retained earnings ......................................................... 19,457 17,852
----------------- -----------------
Total share owners' equity ........................................ 20,876 20,321
----------------- -----------------
Total liabilities and share owners' equity ........................ $ 361,236 $ 345,018
================= =================
</TABLE>
See Notes to Condensed, Consolidated Financial Statements.
2
<PAGE>
<TABLE>
<CAPTION>
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
Condensed Statement of Cash Flows
(Unaudited)
Six Months Ended
-------------------------------------
July 1, June 26,
(In millions) 2000 1999
----------------- ------------------
Cash Flows From Operating Activities
<S> <C> <C>
Net earnings .............................................................. $ 2,487 $ 2,124
Adjustments to reconcile net earnings to cash provided from operating
activities:
Provision for losses on financing receivables ........................ 942 821
Depreciation and amortization of buildings and equipment and equipment
on operating leases ................................................ 1,656 1,508
Other - net .......................................................... (4,243) 2,400
----------------- ------------------
Cash from operating activities .................................... 842 6,853
----------------- ------------------
Cash Flows From Investing Activities
Increase in loans to customers ............................................ (49,503) (40,346)
Principal collections from customers - loans .............................. 46,849 35,456
Investment in equipment for financing leases .............................. (9,160) (7,949)
Principal collections from customers - financing leases ................... 7,218 6,426
Net change in credit card receivables ..................................... (623) 858
Buildings and equipment and equipment on operating leases:
- additions .......................................................... (5,693) (4,165)
- dispositions ....................................................... 3,231 3,788
Payments for principal businesses purchased, net of cash acquired ......... (315) (5,978)
Purchases of securities by insurance and annuity businesses ............... (17,083) (11,525)
Dispositions and maturities of securities by insurance and annuity businesses 13,264 11,236
Other - net ............................................................... 1,183 (2,860)
----------------- ------------------
Cash used for investing activities ................................ (10,632) (15,059)
----------------- ------------------
Cash Flows From Financing Activities
Net change in borrowings (maturities 90 days or less) ..................... 525 6,212
Newly issued debt - short-term (maturities 91-365 days) ................. 3,859 2,541
- long-term (longer than one year) ................... 15,455 11,855
Proceeds - non-recourse, leveraged lease debt ............................. 383 320
Repayments and other reductions:
- short-term (maturities 91-365 days) ................. (16,896) (10,249)
- long-term (longer than one year) .................... (1,555) (1,130)
Principal payments - non-recourse, leveraged lease debt ................... (118) (228)
Proceeds from sales of investment contracts ............................... 4,139 3,644
Cash received upon assumption of Toho Mutual Life Insurance Company
insurance liabilities ................................................... 13,177 -
Redemption of investment contracts ........................................ (4,657) (3,464)
Dividends paid ............................................................ (882) (795)
Issuance of variable cumulative preferred stock by consolidated affiliates - 300
----------------- ------------------
Cash from financing activities .................................... 13,430 9,006
----------------- ------------------
Increase in Cash and Equivalents .......................................... 3,640 800
Cash and Equivalents at Beginning of Period ............................... 6,931 3,342
----------------- ------------------
Cash and Equivalents at End of Period ..................................... $ 10,571 $ 4,142
================= ==================
See Notes to Condensed, Consolidated Financial Statements.
</TABLE>
3
<PAGE>
GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES
Notes to Condensed, Consolidated Financial Statements
(Unaudited)
1. The accompanying condensed quarterly financial statements represent the
consolidation 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. The Financial Accounting Standards Board ("FASB") has issued, then
subsequently amended, Statement of Financial Accounting Standards ("SFAS") No.
133, Accounting for Derivative Instruments and Hedging Activities, effective for
the Corporation on January 1, 2001. Upon adoption, all derivative instruments
(including certain derivative instruments embedded in other contracts) will be
recognized in balance sheets at fair value, and changes in such fair values must
be recognized immediately in earnings unless specific hedging criteria are met.
Changes in the values of derivatives meeting these hedging criteria will
ultimately offset related earnings effects of the hedged items; effects of
qualifying changes in fair value are to be recorded in equity pending
recognition in earnings. Management has not determined the total probable
effects on its financial statements of adopting SFAS No. 133, as amended, and
does not believe that an estimate of such effects would be meaningful at this
time.
4. A summary of changes in share owners' equity that do not result directly
from transactions with share owners is provided below.
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------
July 1, June 26,
(In millions) 2000 1999
----------------- -----------------
<S> <C> <C>
Net earnings .............................................................. $ 1,277 $ 1,092
Unrealized losses on investment securities - net .......................... (771) (1,445)
Foreign currency translation adjustments .................................. (100) (27)
----------------- -----------------
Total ................................................................... $ 406 $ (380)
================= =================
</TABLE>
<TABLE>
<CAPTION> Six Months Ended
-------------------------------------
July 1, June 26,
2000 1999
----------------- -----------------
<S> <C> <C>
Net earnings .............................................................. $ 2,487 $ 2,124
Unrealized losses on investment securities - net .......................... (840) (1,889)
Foreign currency translation adjustments .................................. (210) (99)
----------------- -----------------
Total ...................................................................... $ 1,437 $ 136
================= =================
</TABLE>
5. On March 1, 2000, the insurance policies and related assets of Toho Mutual
Life Insurance Company were transferred to GE Edison Life Insurance Company
("GE Edison"), a subsidiary of GE Financial Assurance Holdings, Inc., a
wholly-owned, indirect subsidiary of GECS. Total cash, investment
securities and time sales and loans acquired by GE Edison was $19.7
billion, and restructured insurance contracts and other liabilities assumed
were $21.5 billion.
4
<PAGE>
6. Revenues and net earnings of the Corporation, by operating segment, for the
three and six months ended July 1, 2000 and June 26, 1999 were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------------- ----------------------------------
July 1, June 26, July 1, June 26,
(In millions) 2000 1999 2000 1999
---------------- ----------------- -------------- ------------------
Revenues
<S> <C> <C> <C> <C>
Consumer Services ..................... $ 6,263 $ 4,462 $ 11,774 $ 8,843
Equipment Management .................. 3,664 4,088 7,397 7,647
Mid-Market Financing .................. 1,307 1,128 2,563 2,127
Specialized Financing ................. 1,406 1,012 3,122 1,812
Specialty Insurance ................... 3,025 2,633 5,627 5,219
All other ............................. 805 55 1,668 113
---------------- ----------------- -------------- ------------------
Total revenues ...................... $ 16,470 $ 13,378 $ 32,151 $ 25,761
================ ================= ============== ==================
Net Earnings
Consumer Services ..................... $ 352 $ 229 $ 636 $ 450
Equipment Management .................. 167 222 318 432
Mid-Market Financing .................. 147 128 299 242
Specialized Financing ................. 414 283 1,012 478
Specialty Insurance ................... 293 307 491 657
All other ............................. (96) (77) (269) (135)
---------------- ----------------- -------------- ------------------
Total net earnings .................. $ 1,277 $ 1,092 $ 2,487 $ 2,124
================ ================= ============== ==================
</TABLE>
5
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations
Overview
Net earnings for the first six months of 2000 were $2,487 million, a $363
million (17%) increase over the first six months of 1999. The results reflected
the globalization and diversity of the Corporation's businesses. The improvement
in earnings was largely attributable to higher levels of asset gains and the
effects of continued asset growth, principally from acquisitions of businesses
and portfolios.
Operating Results
Total Revenues from all sources increased $6,390 million (25%) to $32,151
million for the first six months of 2000, compared with $25,761 million for the
first six months of 1999. This increase primarily reflected a combination of
acquisition and core growth in the Consumer Services segment, asset gains and
core growth in the Specialized Financing segment, and core growth in the
Specialty Insurance and Mid-Market Financing segments.
Interest expense for the first six months of 2000 was $5,381 million, 24% higher
than for the first six months of 1999. The increase reflected higher interest
rates and higher average borrowings used to finance asset growth. The composite
interest rate on the Corporation's borrowings for the first six months of 2000
was 5.67% compared with 5.22% in the first six months of 1999.
Operating and administrative expenses were $9,536 million for the first six
months of 2000, a 27% increase over the first six months of 1999. The increase
primarily reflected increases in insurance commissions and other costs
associated with businesses and portfolios acquired over the past year. Excluding
the effects of other costs associated with businesses and portfolios acquired
over the past year, operating and administrative expenses would have increased
less than 10%.
Cost of goods sold is associated with activities of the Corporation's computer
equipment distribution business and retail operation. This cost amounted to
$4,308 million for the first six months of 2000, compared with $3,317 million
for the first six months of 1999. The increase primarily reflected the
consolidation of the retail operation.
Insurance losses and policyholder and annuity benefits increased $1,458 million
to $6,782 million for the first six months of 2000, compared with the first six
months of 1999. The increase primarily reflected the effects of growth in
premium volume, and a higher loss ratio within the reinsurance business
attributable to an increase in property-related incurred losses, partially
offset by improved market conditions in the mortgage insurance business.
Provision for losses on financing receivables was $942 million for the first six
months of 2000 compared with $821 million for the first six months of 1999.
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 $148 million to $1,656 million for the first six
months of 2000 compared with $1,508 million for the first six months of 1999.
The increase was principally the result of higher shorter-lived levels of
equipment on operating leases, primarily reflecting acquisition growth.
Provision for income taxes was $956 million for the first six months of 2000 (an
effective tax rate of 27.8%), compared with $737 million for the first six
months of 1999 (an effective tax rate of 25.8%). The higher effective tax rate
primarily reflected increased earnings taxed at statutory rates.
6
<PAGE>
Operating Segments
Revenues and net earnings of the Corporation, by operating segment, for the
three and six months ended July 1, 2000 and June 26, 1999 are summarized and
discussed below.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------------- ----------------------------------
July 1, June 26, July 1, June 26,
(In millions) 2000 1999 2000 1999
---------------- ----------------- -------------- ------------------
Revenues
<S> <C> <C> <C> <C>
Consumer Services ..................... $ 6,263 $ 4,462 $ 11,774 $ 8,843
Equipment Management .................. 3,664 4,088 7,397 7,647
Mid-Market Financing .................. 1,307 1,128 2,563 2,127
Specialized Financing ................. 1,406 1,012 3,122 1,812
Specialty Insurance ................... 3,025 2,633 5,627 5,219
All other ............................. 805 55 1,668 113
---------------- ----------------- -------------- ------------------
Total revenues ...................... $ 16,470 $ 13,378 $ 32,151 $ 25,761
================ ================= ============== ==================
Net Earnings
Consumer Services ..................... $ 352 $ 229 $ 636 $ 450
Equipment Management .................. 167 222 318 432
Mid-Market Financing .................. 147 128 299 242
Specialized Financing ................. 414 283 1,012 478
Specialty Insurance ................... 293 307 491 657
All other ............................. (96) (77) (269) (135)
---------------- ----------------- -------------- ------------------
Total net earnings .................. $ 1,277 $ 1,092 $ 2,487 $ 2,124
================ ================= ============== ==================
</TABLE>
Consumer Services revenues increased 33% and net earnings increased 41% for the
first six months of 2000 compared with the first six months of 1999. The
increase in revenues was led by acquisition-related and core growth in the
consumer savings and insurance, U.S. consumer credit card, and non-U.S. consumer
finance businesses, partially offset by the effects of asset reductions in
automobile financing activities. The increase in net earnings was led by a
combination of core growth in the U.S. consumer credit card business and
acquisition-related growth in the consumer savings and insurance business.
Equipment Management revenues decreased 3% for the first six months of 2000,
compared with the corresponding period in 1999, primarily as a result of volume
declines in the European information technology products and services business,
partially offset by acquisition-related growth in fleet services and core growth
in aviation services. Net earnings decreased 26% for the first six months of
2000, compared with the corresponding period in 1999, primarily attributable to
volume declines in the European information technology products and services
business and reduced asset gains in the railcar business, partially offset by
core growth in aviation services.
Mid-Market Financing revenues grew 21% and net earnings increased 24% for the
first six months of 2000, compared with the corresponding period in 1999,
primarily as a result of core growth from increased originations.
Specialized Financing revenues rose 72%, while net earnings increased 112%, in
the first six months of 2000 compared with the first six months of 1999.
Revenues principally reflect increases in asset gains as well as origination
growth. Net earnings growth is principally the result of operating strength led
by gains on sale of equity investments.
Specialty Insurance revenues grew 8% in the first six months of 2000, compared
with the corresponding period in 1999, as a result of increased premium income
associated with origination volume. Net earnings decreased 25% in the first six
months of 2000, compared with the corresponding period in 1999, principally
reflecting increased frequency and severity of property-related losses in the
reinsurance business.
All Other growth in revenues and increase in net loss were primarily the result
of the consolidation of the retail operation.
7
<PAGE>
Portfolio Quality
Financing receivables are the financing businesses' largest asset and their
primary source of revenues. The portfolio of financing receivables, before
allowance for losses, increased to $147.3 billion at July 1, 2000, from $141.4
billion at the end of 1999, primarily reflecting the effects of acquisition
growth and higher origination volume, partially offset by foreign currency
translation on European financing receivables. The related allowance for losses
at July 1, 2000 amounted to $3.9 billion ($3.8 billion at the end of 1999) and
represents management's best estimate of probable losses inherent in the
portfolio given its strength and diversity, and current economic circumstances.
A discussion about the quality of certain elements of the portfolio of financing
receivables follows. "Nonearning" receivables are those that are 90 days or more
delinquent (or for which collection has otherwise become doubtful) and
"reduced-earning" receivables are commercial receivables whose terms have been
restructured to a below-market yield.
Consumer financing receivables, primarily credit card and personal loans and
auto loans and leases, were $49.5 billion at July 1, 2000, a decrease of $2.9
billion from the end of 1999. Nonearning receivables remained steady at $0.9
billion, 1.9% of total consumer financing receivables, at July 1, 2000 and
December 31, 1999. Write-offs of consumer receivables increased to $0.8 billion
for the first six months of 2000 compared with $0.6 billion for the first six
months of 1999. This increase was primarily attributable to the effects of
higher average revolving product receivable balances resulting from
acquisitions.
Other financing receivables, totaling $97.8 billion at July 1, 2000 ($89.1
billion at December 31, 1999), consisted of a diverse commercial, industrial and
equipment loan and lease portfolio. Related nonearning and reduced-earning
receivables were $1.0 billion at July 1, 2000, compared with $0.9 billion at
year-end 1999.
Statement of Financial Position
The Corporation's assets increased by $16.2 billion from the end of 1999,
largely a result of acquisition of certain assets and liabilities of Toho Mutual
Life Insurance Company ("Toho"), an entity that was insolvent when acquired.
That acquisition included approximately $13.2 billion in cash, as well as
financing receivables and other assets, in exchange for assuming Toho's existing
policyholder liabilities. The significant cash position of Toho at the date of
acquisition reflected the liquidity needs of the business including policyholder
redemptions that have occurred through July 1, 2000 and are expected to
continue over the remainder of the six month period following the acquisition.
Statement of Cash Flows
The Corporation's cash and equivalents increased by $3.6 billion during the
first half of 2000 to $10.6 billion, principally as a result of cash acquired in
connection with the Toho acquisition. Cash provided from operating activities
amounted to $0.8 billion during the first six months of 2000, compared with $6.9
billion during the first half of 1999. The decrease in cash from operating
activities compared with last year was largely attributable to policyholder
redemptions associated with the Toho acquisition and a smaller decrease in
mortgages held for resale. Cash from financing activities totaled $13.4 billion,
primarily as a result of policyholder liabilities assumed in the Toho
acquisition, the effect of which was partially offset by net reductions in debt.
The principal use of cash during the period was for investing activities ($10.6
billion), a majority of which was attributable to investments in securities,
financing receivables and equipment on operating leases.
Subsequent Event
On July 12, 2000, Union Bank of Switzerland (UBS) and Paine Webber Group, Inc.
(PaineWebber) announced that they had entered into a definitive merger agreement
(the UBS merger agreement). The Corporation holds 31,523,600 shares of
PaineWebber common stock and would realize a pretax gain of about $1.4 billion
if the merger is completed under the terms of the UBS merger agreement. The
Corporation has agreed with UBS to vote in favor of the merger. Fifty percent of
the Corporation's holdings of PaineWebber securities are classified as trading
securities; changes in the share price of those securities will be recognized in
earnings prior to consummation. Thus, for example, an increase in the share
price of PaineWebber from June 30, 2000, to the price in the UBS merger
agreement would result in recognition of approximately $0.4 billion of the total
pretax gain. The UBS merger agreement is subject to a number of conditions that
are not within the control of the Corporation, resolution of which will affect
the amount and timing of proceeds, if any, realized from the transaction. At
this time, management is unable to predict the outcome of these matters.
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
Six months Ended July 1, 2000
(Unaudited)
Ratio of
Earnings to
Combined Fixed
Ratio of Charges and
Earnings to Preferred Stock
(Dollar Amounts In millions) Fixed Charges Dividends
----------------- -----------------
<S> <C> <C>
Net earnings ................................................................ $ 2,487 $ 2,487
Provision for income taxes .................................................. 956 956
Minority interest in net earnings of consolidated affiliates ................ 103 103
----------------- -----------------
Earnings before provision for income taxes and minority interest ............ 3,546 3,546
Fixed charges:
Interest ................................................................. 5,546 5,546
One-third of rentals ..................................................... 206 206
----------------- -----------------
Total fixed charges ......................................................... 5,752 5,752
Less interest capitalized, net of amortization .............................. (54) (54)
----------------- -----------------
Earnings before provision for income taxes and minority interest, plus fixed
charges .................................................................. $ 9,244 $ 9,244
================= =================
Ratio of earnings to fixed charges .......................................... 1.61
=================
Preferred stock dividend requirements ....................................... $ -
Ratio of earnings before provision for income taxes to net earnings ......... 1.38
-----------------
Preferred stock dividend factor on pre-tax basis ............................ -
Fixed charges ............................................................... 5,752
-----------------
Total fixed charges and preferred stock dividend requirements ............... $ 5,752
=================
Ratio of earnings to combined fixed charges and preferred stock dividends ... 1.61
=================
</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: July 26, 2000 By: /s/ J.A. Parke
-------------------------------------
J.A. Parke,
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: July 26, 2000 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 ... 13
27 Financial Data Schedule (filed electronically only)
12
