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 April 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 May 15, 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.
<PAGE>
<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
------------------------------------
April 1, March 27,
(In millions) 2000 1999
----------------- ----------------
Revenues
<S> <C> <C>
Revenues from services ......................................... $ 13,448 $ 10,743
Sales of goods ................................................. 2,233 1,640
----------------- ----------------
15,681 12,383
----------------- ----------------
Expenses
Interest ....................................................... 2,570 2,113
Operating and administrative ................................... 4,830 3,638
Cost of goods sold ............................................. 2,070 1,511
Insurance losses and policyholder and annuity benefits ......... 2,930 2,619
Provision for losses on financing receivables .................. 521 379
Depreciation and amortization of buildings and equipment and
equipment on operating leases .............................. 964 685
Minority interest in net earnings of consolidated affiliates ... 50 38
----------------- ----------------
13,935 10,983
----------------- ----------------
Earnings
Earnings before income taxes ................................... 1,746 1,400
Provision for income taxes...................................... (536) (368)
----------------- ----------------
Net Earnings ................................................... 1,210 1,032
Dividends ...................................................... (441) (386)
Retained earnings at beginning of period ....................... 17,852 15,075
----------------- ----------------
Retained earnings at end of period ............................. $ 18,621 $ 15,721
================= ================
</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
April 1, December 31,
(In millions) 2000 1999
----------------- -----------------
(Unaudited)
Assets
<S> <C> <C>
Cash and equivalents ...................................................... $ 16,297 $ 6,931
Investment securities ..................................................... 81,130 80,485
Financing receivables:
Time sales and loans, net of deferred income............................ 97,724 93,625
Investment in financing leases, net of deferred income.................. 46,644 47,783
----------------- -----------------
144,368 141,408
Allowance for losses on financing receivables .......................... (3,956) (3,779)
----------------- -----------------
Financing receivables - net ......................................... 140,412 137,629
Other receivables - net ................................................... 29,434 30,681
Inventories ............................................................... 1,248 1,209
Equipment on operating leases (at cost), less accumulated amortization of
$7,612 and $7,392 ...................................................... 23,626 23,605
Intangible assets ......................................................... 15,435 14,748
Other assets .............................................................. 51,888 49,730
----------------- -----------------
Total assets ...................................................... $ 359,470 $ 345,018
================= =================
Liabilities and share owners' equity
Short-term borrowings ..................................................... $ 122,216 $ 129,259
Long-term borrowings:
Senior ................................................................. 71,788 69,770
Subordinated ........................................................... 996 996
Insurance liabilities, reserves and annuity benefits ...................... 108,552 86,776
Other liabilities ......................................................... 22,209 24,550
Deferred income taxes ..................................................... 8,794 8,955
----------------- -----------------
Total liabilities ................................................. 334,555 320,306
----------------- -----------------
Minority interest in equity of consolidated affiliates .................... 4,004 4,391
----------------- -----------------
Accumulated unrealized gains on investment securities - net ............... 101 170
Accumulated foreign currency translation adjustments ...................... (494) (384)
----------------- -----------------
Accumulated non-owner changes in share owners' equity ..................... (393) (214)
Capital stock ............................................................. 11 11
Additional paid-in capital ................................................ 2,672 2,672
Retained earnings ......................................................... 18,621 17,852
----------------- -----------------
Total share owners' equity ........................................ 20,911 20,321
----------------- -----------------
Total liabilities and share owners' equity ........................ $ 359,470 $ 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)
Three Months Ended
-------------------------------------
April 1, March 27,
(In millions) 2000 1999
----------------- ------------------
Cash Flows From Operating Activities
<S> <C> <C>
Net earnings .............................................................. $ 1,210 $ 1,032
Adjustments to reconcile net earnings to cash provided from operating
activities:
Provision for losses on financing receivables ........................ 521 379
Depreciation and amortization of buildings and equipment and equipment
on operating leases ................................................ 964 685
Decrease in acquired insurance policyholder liabilities and reserves
(Note 5) ...........................................................
Other - net .......................................................... (2,554) 459
----------------- ------------------
Cash from operating activities .................................... 141 2,555
----------------- ------------------
Cash Flows From Investing Activities
Increase in loans to customers ............................................ (23,565) (19,236)
Principal collections from customers - loans .............................. 22,766 18,480
Investment in equipment for financing leases .............................. (4,131) (3,509)
Principal collections from customers - financing leases ................... 4,477 3,251
Net change in credit card receivables ..................................... 394 763
Buildings and equipment and equipment on operating leases:
- additions .......................................................... (2,421) (1,368)
- dispositions ....................................................... 1,219 871
Payments for principal businesses purchased, net of cash acquired ......... (3) (4,125)
Purchases of securities by insurance and annuity businesses ............... (11,774) (5,594)
Dispositions and maturities of securities by insurance and annuity
businesses ........................................................... 10,032 5,495
Other - net ............................................................... 2,698 (740)
----------------- ------------------
Cash used for investing activities ................................ (308) (5,712)
----------------- ------------------
Cash Flows From Financing Activities
Net change in borrowings (maturities 90 days or less) ..................... (7,284) 3,489
Newly issued debt - short-term (maturities 91-365 days) ................. 1,287 1,354
- long-term (longer than one year) ................... 7,185 6,206
Proceeds - non-recourse, leveraged lease debt ............................. 161 165
Repayments and other reductions:
- short-term (maturities 91-365 days) ................. (3,681) (6,512)
- long-term (longer than one year) .................... (444) (774)
Principal payments - non-recourse, leveraged lease debt ................... (101) (206)
Proceeds from sales of investment contracts ............................... 1,960 1,548
Cash received upon assumption of Toho Mutual Life Insurance Company
insurance liabilities ................................................ 13,177 -
Redemption of investment contracts ........................................ (2,286) (1,589)
Dividends paid ............................................................ (441) (386)
Issuance of variable cumulative preferred stock by consolidated affiliates - 300
----------------- ------------------
Cash from financing activities .................................... 9,533 3,595
----------------- ------------------
Increase in Cash and Equivalents .......................................... 9,366 438
Cash and Equivalents at Beginning of Period ............................... 6,931 3,342
----------------- ------------------
Cash and Equivalents at End of Period ..................................... $ 16,297 $ 3,780
================= ==================
</TABLE>
See Notes to Condensed, Consolidated Financial Statements.
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 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. Certain significant refinements and
interpretations of SFAS No. 133 are being deliberated by the FASB, and the
effects on accounting for the Corporation's financial instruments will
depend to some degree on the results of such deliberations. Management has
not determined the total probable effects on its financial statements of
adopting SFAS No. 133, 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
------------------------------------
April 1, March 27, 1999
(In millions) 2000
----------------- -----------------
<S> <C> <C>
Net earnings .............................................................. $ 1,210 $ 1,032
Unrealized gains (losses) on investment securities - net .................. (69) (444)
Foreign currency translation adjustments .................................. (110) (72)
----------------- -----------------
Total ................................................................... $ 1,031 $ 516
================= =================
</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 months ended April 1, 2000 and March 27, 1999 were as follows:
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------
April 1, March 27,
(In millions) 2000 1999
---------------- -----------------
Revenues
<S> <C> <C>
Consumer Services ................................... $ 5,511 $ 4,381
Equipment Management ................................ 3,733 3,559
Mid-Market Financing ................................ 1,256 999
Specialized Financing ............................... 1,716 800
Specialty Insurance ................................. 2,602 2,586
All other ........................................... 863 58
---------------- -----------------
Total revenues .................................... $ 15,681 $ 12,383
================ =================
Net Earnings
Consumer Services ................................... $ 284 $ 221
Equipment Management ................................ 151 210
Mid-Market Financing ................................ 152 114
Specialized Financing ............................... 598 195
Specialty Insurance ................................. 198 350
All other ........................................... (173) (58)
---------------- -----------------
Total net earnings ................................ $ 1,210 $ 1,032
================ =================
</TABLE>
5
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations
Overview
Net earnings for the first three months of 2000 were $1,210 million, a $178
million (17%) increase over the first three months of 1999. The results
reflected the globalization and diversity of the Corporation's businesses. The
improvement in earnings was largely attributable to the effects of continued
asset growth, principally from acquisitions of businesses and portfolios.
Operating Results
Total Revenues from all sources increased $3,298 million (27%) to $15,681
million for the first three months of 2000, compared with $12,383 million for
the first three months of 1999. This increase primarily reflected core growth
and asset gains in the Specialized Financing segment, a combination of core and
acquisition growth in the Consumer Services segment, and core growth in the
Mid-Market Financing segment.
Interest expense for the first three months of 2000 was $2,570 million, 22%
higher than for the first three months of 1999. The increase primarily reflected
the effects of higher average borrowings used to finance asset growth. The
composite interest rate on the Corporation's borrowings for the first three
months of 2000 was 5.57% compared with 5.33% in the first three months of 1999.
Operating and administrative expenses were $4,830 million for the first three
months of 2000; a 33% increase over the first three months of 1999. The increase
primarily reflected costs associated with businesses and portfolios acquired
over the past year and increases in insurance commissions.
Cost of goods sold is associated with activities of the Corporation's computer
equipment distribution business and retail operations. This cost amounted to
$2,070 million for the first three months of 2000, compared with $1,511 million
for the first three months of 1999. The increase primarily reflected the
consolidation of the retail operation.
Insurance losses and policyholder and annuity benefits increased $311 million to
$2,930 million for the first three months of 2000, compared with the first three
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 $521 million for the first
three months of 2000 compared with $379 million for the first three 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 $279 million to $964 million for the first three
months of 2000 compared with $685 million for the first three 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 $536 million for the first three months of 2000
(an effective tax rate of 30.7%), compared with $368 million for the first three
months of 1999 (an effective tax rate of 26.3%). The higher provision for income
taxes primarily reflected increased non-U.S. earnings.
6
<PAGE>
Operating Segments
Revenues and net earnings of the Corporation, by operating segment, for the
three months ended April 1, 2000 and March 27, 1999 are summarized and discussed
below.
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------
April 1, March 27,
(In millions) 2000 1999
----------------- ------------------
Revenues
<S> <C> <C>
Consumer Services .................................................. $ 5,511 $ 4,381
Equipment Management ............................................... 3,733 3,559
Mid-Market Financing ............................................... 1,256 999
Specialized Financing .............................................. 1,716 800
Specialty Insurance ................................................ 2,602 2,586
All other .......................................................... 863 58
----------------- ------------------
Total revenues .................................................. $ 15,681 $ 12,383
================= ==================
Net Earnings
Consumer Services .................................................. $ 284 $ 221
Equipment Management ............................................... 151 210
Mid-Market Financing ............................................... 152 114
Specialized Financing .............................................. 598 195
Specialty Insurance ................................................ 198 350
All other .......................................................... (173) (58)
----------------- ------------------
Total net earnings .............................................. $ 1,210 $ 1,032
================= ==================
</TABLE>
Consumer Services revenues increased 26% and net earnings increased 29% for the
first three months of 2000, compared with the first three 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 acquisition-related growth in the consumer savings and insurance
business and acquisition-related growth and asset gains in the U.S. consumer
credit card business.
Equipment Management revenues grew 5% for the first three months of 2000,
compared with the corresponding period in 1999 primarily as a result of
acquisition-related and core growth in fleet services and core growth in
aviation services, partially offset by volume declines in the European
information technology products and services business. The net earnings
decreased 28% for the first three months of 2000, compared with the
corresponding period in 1999 primarily attributable to volume declines in the
European information technology products and services business, partially offset
by core growth in the commercial aircraft management business and the satellite
service business.
Mid-Market Financing revenues grew 26% and net earnings increased 33% for the
first three months of 2000, compared with the corresponding period in 1999,
primarily as a result of core growth from increased originations.
Specialized Financing revenues rose 115%, while net earnings increased 207% in
the first three months of 2000, compared with the first three months of 1999.
Revenues principally reflect increases in asset gains as well as origination
growth. Revenue and net earnings growth in both years is principally the result
of operating strength led by gains on sale of equity investments.
Specialty Insurance revenues grew 1% in the first three months of 2000, compared
with the corresponding period in 1999 as a result of increased premium income
associated with origination volume partially offset by reduced net realized
investment gains in the reinsurance business. Net earnings decreased 43% in the
first three months of 2000, compared with the corresponding period in 1999
principally reflecting lower net realized investment gains and 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. For the first three months of
2000, the retail business had revenues of $719 million and a net loss of $80
million.
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 $144.4 billion at April 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 April 1, 2000 amounted to $4.0 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 $50.8 billion at April 1, 2000, a decrease of $1.6
billion from the end of 1999. Nonearning receivables remained steady at $0.9
billion, 1.8% of total consumer financing receivables, at April 1, 2000 and
December 31, 1999. Write-offs of consumer receivables increased to $0.4 billion
for the first three months of 2000 compared with $0.3 billion for the first
three 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 $93.6 billion at April 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 April 1, 2000, compared with $0.9 billion at
year-end 1999.
The Corporation held loans and leases to commercial airlines amounting to $12.0
billion at April 1, 2000, up from $11.8 billion at the end of 1999.
Statement of Financial Condition
The Corporation's assets increased by $14.5 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 billion in cash, as well as
financing receivables and other assets, in exchange for assuming Toho's existing
insurance policyholder liabilities. The significant cash position of Toho at the
date of acquisition reflects the liquidity needs of the business, particularly
policyholder redemptions expected to occur over the succeeding six months.
Statement of Cash Flows
The Corporation's cash and equivalents increased by $9.4 billion during the
first quarter of 2000 to $16.3 billion, principally as a result of cash acquired
in connection with the Toho acquisition. Cash provided from operating activities
amounted to $141 million during the first three months of 2000. The decrease in
cash from operating activities compared with last year was largely attributable
to insurance policyholder redemptions associated with the Toho acquisition. Cash
from financing activities totaled $9.5 billion, primarily as a result of
insurance policyholder liabilities assumed in the Toho acquisition, the effect
of which was partially offset by net reductions in debt. The principal use of
cash during the period was for investing activities ($0.3 billion), a majority
of which was attributable to net purchases of securities by insurance and
annuity businesses.
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 April 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 .............................................................. $ 1,210 $ 1,210
Provision for income taxes ................................................ 536 536
Minority interest in net earnings of consolidated affiliates .............. 50 50
----------------- -----------------
Earnings before provision for income taxes and minority interest .......... 1,796 1,796
Fixed charges:
Interest ............................................................... 2,670 2,670
One-third of rentals ................................................... 107 107
----------------- -----------------
Total fixed charges ....................................................... 2,777 2,777
Less interest capitalized, net of amortization ............................ (25) (25)
----------------- -----------------
Earnings before provision for income taxes and minority interest, plus fixed
charges ................................................................ $ 4,548 $ 4,548
================= =================
Ratio of earnings to fixed charges ........................................ 1.64
=================
Preferred stock dividend requirements ..................................... $ -
Ratio of earnings before provision for income taxes to net earnings ....... 1.44
-----------------
Preferred stock dividend factor on pre-tax basis .......................... -
Fixed charges ............................................................. 2,777
-----------------
Total fixed charges and preferred stock dividend requirements ............. $ 2,777
=================
Ratio of earnings to combined fixed charges and preferred stock dividends . 1.64
=================
</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 15, 2000 By: /s/ J.A. Parke
-------------------------------------
J.A. Parke,
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: May 15, 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
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 April 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 .............................................................. $ 1,210 $ 1,210
Provision for income taxes ................................................ 536 536
Minority interest in net earnings of consolidated affiliates .............. 50 50
----------------- -----------------
Earnings before provision for income taxes and minority interest .......... 1,796 1,796
Fixed charges:
Interest ............................................................... 2,670 2,670
One-third of rentals ................................................... 107 107
----------------- -----------------
Total fixed charges ....................................................... 2,777 2,777
Less interest capitalized, net of amortization ............................ (25) (25)
----------------- -----------------
Earnings before provision for income taxes and minority interest, plus fixed
charges ................................................................ $ 4,548 $ 4,548
================= =================
Ratio of earnings to fixed charges ........................................ 1.64
=================
Preferred stock dividend requirements ..................................... $ -
Ratio of earnings before provision for income taxes to net earnings ....... 1.44
-----------------
Preferred stock dividend factor on pre-tax basis .......................... -
Fixed charges ............................................................. 2,777
-----------------
Total fixed charges and preferred stock dividend requirements ............. $ 2,777
=================
Ratio of earnings to combined fixed charges and preferred stock dividends . 1.64
=================
</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.
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED APRIL 1, 2000, 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-31-2000
<PERIOD-END> APR-1-2000
<CASH> 16,297
<SECURITIES> 81,130
<RECEIVABLES> 144,368
<ALLOWANCES> 3,956
<INVENTORY> 1,248
<CURRENT-ASSETS> 0
<PP&E> 31,238
<DEPRECIATION> 7,612
<TOTAL-ASSETS> 359,470
<CURRENT-LIABILITIES> 0
<BONDS> 72,784
0
10
<COMMON> 1
<OTHER-SE> 20,900
<TOTAL-LIABILITY-AND-EQUITY> 359,470
<SALES> 2,233
<TOTAL-REVENUES> 13,448
<CGS> 2,070
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,760
<LOSS-PROVISION> 521
<INTEREST-EXPENSE> 2,570
<INCOME-PRETAX> 1,746
<INCOME-TAX> 536
<INCOME-CONTINUING> 1,210
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,210
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
