ML20003H151
| ML20003H151 | |
| Person / Time | |
|---|---|
| Site: | 07001007 |
| Issue date: | 02/20/1981 |
| From: | GENERAL ELECTRIC CO. |
| To: | |
| Shared Package | |
| ML20003H146 | List: |
| References | |
| 18847, NUDOCS 8105050229 | |
| Download: ML20003H151 (48) | |
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Fin:nci:1 highlight 3 Percent caer amounts in mulions: cer-snare amounts in conars:
1980 1979 increase For the year SJles of products and services to customers
$24.959
$22,461 l i .
Other income 564 519 9
Total revenues 25,523 22,980 11 Net earnings applicable to common stock 1,514 1,409 7
At year end Tctal capitalinvested
$10.447
$ 9.332 12*'.
Share owners' equity 8.200 7,362 11 Short-and long-term borrowings 2.093 1,818 15 Per share Net earnings
$ 6.65
$ 6.20 7%
Dividends declared 2.95 2.75 7
Share owners' equity-year end 36.00 32.31 11 Measurements Operating margin as a percentage of sa:es 9.0%
9.5%
Effective income tax rate 38.4 39.9 Earnings as a percentage of sales 6.1 6.3 Percent earned on average total capitalinvested 17.3 17.6 Percer.t earned on average share owners' equity 19.5 20.2 Borrowings as a percentage of total capita! invested 20.0 19.5 l
f The General E!ectnc investor 3
Comments from the Chairman
" Innovation and self-renewal:
cnd the Chairman elect these are themes that characterize General Electric as we enter a new era. '
The significance of these sales and earn-ings is not merely that they set new f evels in a year when profits for industry generally de-clined. More importantly. they were achieved
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in a year when your Company sharply :n-creased investments in new plant and equip-ment. new technology. new product develop-ment and new business ventures.
U.S businesstodayfindsitself challenged by aggressive overseas competitors. National productivity has been dechning and. in indus-try after:ndustry. product f eadership is meving to other nations. Companies that refuse to re-new themseives. that f aii to cast off the old an'1 emorac ; new technologies. Could weil find themseives in senous dechnein the 1980s.
We cre determined that this shali not napper to General E:ectnc.
Self-renewal. Your Company is engaged in a
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process of internal change that will transform the ways we design, manuf acture and distnb-Fr ute our products and services in the 1980s. We sN\\
are encouraging our people to probe con-
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stantly for new markets. new techniques and Thefoin t signing ot th ese comunen ts sig-new business opportunities
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nals the approaching change of executive This stress on innovation nas been gatner-
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leadership at GeneralElectric. On the re-ing momentum and is perhaps best ellustrated Aprif f,1981, John F. Welch,Jr..wllibecome tiremen t of Reginald H. Jones (righ t) on by the cnange in our sources of earnings. as
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M emphasizelinlastyear's Annual Report. As y,4
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Chairman and Chief Executive Officer of the 1970s began. 80 o of your Company's l
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your Company. He willbe the elgh th person earnings came from its traditional businesses pr.
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to hold that office since the founding of GE in the manuf acture of eiectncaland etectronic 1 ;,6 '
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In the nineteenth century.
equipment. These businesses remain healthy
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John F.Burlingame(middleleftland and growing. altncugn they now provede less
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Edward E. Hood, Jr., con tin ue as Vice Chair-than half of our earnings. The ma;onty ot our men and Executive Officers with expanded earnings are presently denved f rom growth responsibilities forrealignedstaff and businesses in man-made matenals. natural operation s.
resources. aerospace and transportation 3
equipment. services and other new !ines of Q
General Electnc's diversity and financial opportunity And42 oof ourearningsnow
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strengths enabled it to turn in a solid perform-come f rom international activities. compared ance in 1980 despite adverse economic condi-withonly16 oadecadeago tions in the U.S. and many foreign markets.
The status of our current businesses!s de-Sales of S24.96 billion represented an 11 *o tailedinthepagesof this AnnualReport.butto increaseover1979 Earningsof $15 cilhon.or give our snare owners a ' feel 'or the present
$6.65 pe. hare. were 7'o above 1979 tevels.
mood of self-renewal at General Electnc. et us P003 BRIBILL
comment on th s Ccmptny's rtsponse to sev-Energy. Frcm its beginnings, gin t ral Electric eral fundamentalchallenges of the 1980s.
has been a producer of energy-conversion equipment for electric utilt des. But thatis now just a modest proportion of our totalinvolve-Electronics.Thereiswide agreementthatthe new e!ectronics will be the dominant techno-ment in the rapidly growing energy field.
logical force of the 1980s. And so we have Through Utah Intemational's coal mines i
been engaged in a Companywide offort to ap-and Ladd Petroleum's oil and gas wells, as well ply the new microelectronics and the related as our nuclear fuel operations, we are sup-information-based technologies to every pos-pliers of basic fuel. Ou r equipment powers ma-sible product, service and process in G E.
chinery in the mines and drilling fields, our The corporate commitment is embodied in diesel-electric locomotives haul the coal, and hundred-million-dollarinvestments in the con-our gas turbines power the pipelines.
- struction and acquisition of new electronics And as th e world strives to reduce its exces-laboratories and manufacturing centers. We sive dependence on one energy source-pe-have established an Industrial Electronics troleum-GE's research activities seek com-
- Group and an information and Communica-
- mercial breakthroughs in significant new tions Systems Group. GE training programs energy technologies such as systems to con-3 are underway to bring the thinking of our man-vert coat into clean synthetic fuel gas.
agers and technical people up to the state of
_ Anotherprofitablefacetof theenergymar-the artin the new electronics, and we are vigor-ket is the redesign of our products to conserve ously recruiting mors electronic engineers, energy-from energy-efficient lamps, appil-TheproposedpurchaseofCalmaCom-ances and r90 tors to fuel-saving jet engines.
pany, a leading producer of interactive graph-ics equipment, and the acquisition of Intersil, a Innovation. Perhaps you r Company's com-makerof advancedmicroelectronicchips,are mitment to broad-based innovation is best ex-consistent with ourintention to be at the lead, pressed by its rising investmentin research ingedgeofnewtechnology, and developm ent. Since 1977,we have in-Yourmanagementisdeterminedtobe creased GE funded R & D expenditures 85%
t a leader in the electronics revolution.
to $760 million. Total R & D expenditures, with external funding, reached $1.6 billwn in 1980.
4 Productivity. Aher a decade of slow produc-General Electric is not morely in the electri-tivity growth, U.S. industry is poised for a major cal business, or any other particular business.
I surge of investment in new equipment-the This Company has moved forward to a new so-called"re-industrializationof America."
dimension of industrial capability that inves-j ForGEtneprocesshasalreadybegun.
tors are only beginning to recognize. W= are /n i
Your Company hasinvested almost $6 bil-the buvness o/ creating businesses to antici-j lion over the past five years, including nearly patec.dservetheneedsof achangingworld.
$2 billion in 1980, to upgrade its productive This is, at least in scale, something raro. And j
capabilities. Interactive graphics for com-it can make a constructive contribution to a 1
puter-assisted design, man uf actu re and test; world thatis striving desperately for acceler-i robotics; programm able electronic controls; ated economic and social development.
energy efficientdrives:theseareamongthe l
advanced technologies that are transforming ourfactoriesintosomeof themostproductive, l
quality-controlled operations in the world, t
And what we develop for ou r own factories we will then sell to ourindustrial customers-a John F. Welch,Jr.
productivity-improvement market that is grow-Chairman-elect ing well over 20% per annu m. With our own factories as a worldwide laboratory for the de-k,.,C M velopmentof advanced manufacturing sys-t tems, and a customer base that u rgently feels i
the need for productivity breakthroughs, G E Reginald H. Jones, Chairman expects to be a leaderin equipping the auto-andChief ExecutiveOfficer matedfactoriesofthefuture.
February 20,1981 b
The General Electnc Investor 5
Consumer Earnings are sustained during recessionary period Products and Services
~1 (tn meons) 1980 1979 1978 1977 1976
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Revenues *
$5.714
$5.448
$4.865 54.215
$3.510 No eamirw;s' 407 401 37-323 261 nee edit Corporacon 115 90 77 67 57 G
Consumer Products and Services Sector pany. It is the largest nonmanufacturing com-revenues and earnings were slightly ahead pany in equipment financing and leasing, of 1979, despite operating in an environment handling leasing activities ranging from com-characterized by a sharp decline in appliance puters to supertankers. Leasing is GECC's shipments and extremely volatile interest fastest-growing business. It pioneered PaulW. Van Orcen rates. Earnings were led by the s;rong per-leveraged leasing and is a world leader in
,"y,[ ice formance of General Electric Credit Corpora-that business, with over $5.1 billion of indus-e c ntand yg n,
ner Productsand SerwcesSector tion (GECC), the Company's wholly owned trial-and transportation-equipment lever-nonconsolidated finance affiliate. Sector re-aged leases in its portfolio.
suits reflect effective management actions to GECC also is a leading tenderin home control costs, strong consumer acceptance products retailing, home equity financing and l
of new products, and an improved balance a wide array of commercial and industrial l
between product and services businesses.
equipment industries.
While sustaining earnings, the Sector con-tinued to fund programs for the develocment Major appliance businesses, serving retail of new products and services to meet enn-and builder markets with a complete line of sumers' changing lifestyles and the evolving GE* and Hotpoint* kitchen and laundry needs of business customers. These pro-equipment, had lower earnings in 1980 on grams, designed for future growth, are main-about the same level of sales as in 1979. The taining a strong i mphasis on innovation, recession, credit restrictions and a weakness quality and productivity improvement.
in housing severely affected the U.S. mejor GECC earnings grew 28% in 1980. As for appliance industry, causing 11% tower unit the product businesses, sustained cost im-shipments, excluding microwave ovens.
provement acticas and continued emphasis General Electric moderated the eamings im-on new ano improved products enabled them pact with new productivity programs and to outperform the industry and limit their strong sales of innovative products. These earnings drop to 6%.
improvements position these businesses to in 1980, Sector operations accounted for remain a major contributor to Sector earn-22% of GE revenues and 27% of earnings.
ings as the Company continues to respond to consumers' changing wants and needs.
General Electric Credit Corporation Industry unit sales of the microwave oven earned $115 million in 1980, up from $90 mil-were up 32% for the year. In this growing lion in 1979, and provided 28% of Sector business, GE has captured a leadership po-earnings. Growth in earning assets of more sition with product improvements and cus-r l
than $1.0 billion as well as improved operat-tomer acceptance of tiie Spacemaker unit.
ing efficiencies contributed to the excellent The positive momentum of the dishwasher results (see page 40 for condensed GECC line was enhanced by strong customer ac-i financial statements).
ceptance of the top-of-the-line Model 1200.
p With total assets of $9.3 billion, GECC ranks To serve customers better, GE placed in-as the largest U.S. diversified financial ccm-
- c. eased emphasis on product service. In-6 AnnualReport t980
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.'M e-arc ere gy-saving nome service for more than 100 million GE two-speed-compressor Weatrertron
- neat amcucts sucr asmose srowr and Hotpoint major acouances :s crovided pump with a microprocessor controi'cr auto-acose are'eaturec rmeCcm.
carv scrgeirg We BrmgGocc
'hrougn a network cf 135 faccry service o-matic adjustments n esponse to ambient
'mrgs 'c de :orsu er acver-cations ard over 'O.000 franchised serv!cers temperature changes nsirg :ar ca.gr-ecr s ce-s,grec c "et ma<e GE ar ever Air conditioning croducts. affected av the Lighting operations nad sughtly cwer eam-ore os c e arc,a~ec erarc ecession, reccried :cwer earnirgs and
'ngs on somewr'at higner saies. Strcng : er-sa,es A,thoucn ate-season saies.mcrcsed
'crmance n most ines did nct como!eteiv off-snarpiy.r esponse to not weather. gains set substartial decures.n marxets cr oncto-were not sufficient to offset the.meact of flash ! amps arc amps for automotive uses.
recession-dnven decune 'n demand arc sus-The ccntinuing introduction of innovative tained nigh nflation. However the market 'cr and energy-efficient products fCund exce'-
air conditioning croducts 's expected to 'm-ent recept:cn r Octh consumer and :ndus-crove cunng tre 198Cs. 'ed bv eieca - em tnal markets pumos which are today s most effic:ent GE reinforced ts convert-te-conserve method of etectnc neating and cocung therne <n t 980 emchasiang the erergy sav-In i980 GE ntroduced a new Executive 1 ngs reauzed by asing Lucaicx' igrt:ng P00R ORl8iNM 7e 3erera E ecinc rsestcr j
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resMulti vccor illomps.illurai-o aleading supplier c l
natingthis recentlyopenedde-and crucibles for tr 4
partment storein Fairfax.Va.,de-W 1
livertignting at35%lowerenergy c ;' --
costsbecauseoftneirimproved i
etnciency.Thenewmetainalide
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tampscoronenignligntoutput 3..,,, - 7
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perwattwith warmincandescent-
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likecolor.
Cant Cost pressure:
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duced new product M
value, including th(
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5$s 1 in 1980 set new rec.
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television stations a Purchaseandrenovationof this systems. New products included Remote radio stations. In ca Energy Management @ER control for in-erates Q systems e,
i us k
asfina c y
GECC'sreat estatefinancialser.
dustrial Lucalox ' luminaires wnich uses ra-chised communities '
viceseperations.Theformerapart-dio signals to command the luminaires to at a 22% annual rate mentnousenas beenconverted into a204-unit condominium.
change wattage settings.
year with about 260 g
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i is targeted for introduction in 1981. It is the first of a family of long-life lamps that use The outlook: With a about one-third as much electricity to gener-forecast for 1981, a-ate the same amount of light as the incandes-les in the '80s, the S -
l cent bulbs they replace.
nesses look forwarc Additionally, several operations continue sustained growth ret to grow outside the lighting industry. General vation and emphasis,
l Electric is a major supplier of tungsten and The Sector also sc tungsten-carbide powder used in manufactur-expand its business ing cutting tools for metal fabrication, oil drill-the decade in the rar ing and mining And the Company has become services markets.
P00R ORIGINAL 8 AnnualRecort1980 i
Industrici Continued growth for most major businesses Products and Components Onrncons) 1980 1979 778 1977 1976
/
Reveaues
$5.157
$4.803 54.124
$3.698
$3.270
^
Net earnings 315 272 C3 191 160 4
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Industrial Products and Components Sector Trans portatio n systems businesses contin-p-
boosted its earnings 16% during 1980 on reve-ued to grow as quality suppliers of diesel-elec-i D
nues7%aheadof t979.Theimprovedearn-tric locomotives, motorized wheeis for off-
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ings were paced by operations serving trans-highway vehicles and transit propulsion equip-po rtation. contractor equipm e nt and industrial ment as well as drilling drives. Earnings im-motor markets, with most major Sector busi-proved considerably on slightly hig her sales.
nesses contributing to the growth. Sector op-Inte rnatio nallocomo tive orde rs incre as ed Jones A. Baker erations include motors, industrial electronics, in 1980, and the largest contract for f ocomo-fy,t ndu["j contractor equipmenf, transportation sys-tives in the Company's history was negotiated e
e ut v Productsand Cornporents tems, apparatus service, and supply services with National Railways of Mexico. The ten-year Secicr for electrical and related products.
agreementcallsfordeliveryof 60to100 loco-During the 1980s, industry's need for new motives or their component sets each year.
products and services to improve productivity The locomotive line was expanded to in-and increase energy supplies will provide f a-cf ude the new B36-7 model which features vorable opportunities in markets to which the f urther improvements in fuel efficiency and Sector expects to bring continued product pulling power. Tnis 3,600-hp unit uses G E's le adership and in novation. The industrial elec-highly reliable and advanced railroad-type die-tronics field should be a part;cularly important sel engine. Althoegh the U.S. locomotive mar-areaforSectorgrowth.
ket was relatively weak in 1980, over the next In 1980, Industrial Products and Compo-few years it is forecast to strengthen. Railroad nents Sector accounted for 19% of total G E Nulage is expected to increase as a result of revenues and 21 % of theyear'3 earnings.
Wth the f uel efficiency advantage of railroads over trucks and increased coal transport.
Co ntractor equipment operations experi-High leveis of mining produced brisk de-enced an excellent year, with increased sales mand for G eneral Electric motorizod wheel and earnings. Strength in commercial con-drives used on haulage trucks. Also, extensive stn.'ction markets off set the depressed ievels oil-well drilling in 1980 stimulated a sharp in-of residentialconstruc"on. Industrial plant and crease in demand for the Company's drilling equipment spending remained strong, and in-drive systems.
ternational operations showed improvement overthe praviousyear'slevel.
The mctor businesses of GE produce a large General E!ectric manuf actures a wide vari-assortment of motors for residential and in-ety of products associated with electrical con-dustrialapplications.In1980 theyhadsome-trol, distribution and circuit protection.These what higher earnings on slightly lower sales.
l G E p roduct lines include low-voltag e circuit The industrial motor market was strong, re-breakers, motor controls, wiring devices, pro-flecting industry's emphasis on productivity grammable lighting control, and wire and ca-and customers' needs for energy-saving mo-ble. New products introduced by the Company tors. The market for high-efficiency industrial in 1980 included a line of low-voltage switch-motors is growing at more than 60% peryea r.
gear that provides increa, sed operator safety The component motor market was weak as a andimproved reliability.
result of depressed appliance markets.
I i
The General E!ectnc Investor 9
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k c reaong -e*,riegratea c:r:uits is Because of increased energy exploration microprocessor-cased digital control. The hog a soEntIs wordwide salescf motorsandgeneratorsfor system prolongs motor t fe. and can reduce cy i
cae accuirec a'4 rate ct Gererai Eec.
mini gandolidnihrg were high Also 9xccr's UO to Cne-nait the amCunt of cower 90rmady mc"'at s aisc a eactrg erocucer cf smanercomcorert motcrsgrewdramatt-consumedDytheappocation cf aconstant-
- f mc oe,ect cric eracucts canvaunng reyear speed erctor Among cther new G E croducts offered was Industrialelectronics operations nad the Seres Six f amuy of crograr-macie ccn-l nigrer saies althcugn earnings were dcwn.
trois designedicincrease croductivity and I
reflecting.,n part. the imcact of new ir-
.cwer costs l
ment programs onented toward produc.
As cart of GE's new thrusts :n nigh technol-f actory autcmation ogy twoeiectronics-related acouisitions e-General E:ectnc continued its rote as a :ead-cently were anrounced. tn February 198 '
l rng succherof e!ectncai and eiectronic ccmoc-Genera! E e etnc accuired intersil. Inc.. a :ead-l nents and systems to cower rdustry word-ng sucpuerof advancedintegrated circuits i
uide Newtechnoicgicaidevetcoments and data acquisition and memory products. 'cr included a nign-effic:ency static. adjustacie-5235 mnhon Inters.lwulcontinue as a ma!ar sceed dnve systemincorocrating the atest succueric the mercnant marxet as weri as a 10 Arroai Aeocq '980
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sou rce of integ rated circuits f or G E's diversi-General Electnc Supply Company. which fied product knes. Also. in December 1980. the reported improved sales for the year. This Company agreed to acquire Calma Company,
nationai network of supply centers provides a subsidiary of United Telecommunications products of General E'ectnc and other compa-Inc.. for up to S170 million. Caima is a supoher nies to customers in the contractor. industnal.
of interactive g r achic systems. w hich include commercialand utility markets.
technologies used for computer-aided design Apparatus service shops, saies of which and manuf actunng.
were up. although earnings were lower.
Ir addition. a 330 million investment in new With continued emphasis on expenditures l
electronics capability at Ch ar'ottesville. Va..
aimed at f onger-term growth as well as broad-j was approved in 1980. Construction will:n-ened service offenngs. the service snop Ciude manuf actunng space for industnal con-network was expanded to 197 :ocations trois and a new laceratory to nelp boister GE's worldwide Theshopsprovideinspection, o newGE er es x oro ar a otecontrois Ecuipoeawitr role in the industnat electronics revolutior maintenan~
_. and rebuilding services rnicroorocessors. me units guce for industnal equipment manuf actured oy sea e"r$bna$ and Service and distribution businesses con-Generai Electnc and other companies. Forty process contro ducted by the Sectorinclude-repair facihties in this internationa! network are concentrating on the f ast-growth eiectronics service market.
The outlook :n the 1980s f a r markets served by Industnal Products and Components Sec-Iha h_ _
tor ts favorable. based on the nation s need for j
production-and energy-re:ated products.
,T.
The Sector has strengthened its competitive h
3c 2 g position oy developing leading-edge products 1k and services. and continues to expand its mar-keting presence abroad. While some ocera-tions may be affected by lingenng economic r; '
uncertainties, most anticipate improved mar-ket conditions. Residential construction mar-kets are forecast to improve. although com-l mercial and industnal construction markets are expected to declinein 1981.
The U.S locomotive market is forecast to
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We Generai E ectrc :nvestor 11
Power Earnings growth continues despite slow markets Systems i
(In mdlions) 1980 1979 1978 1977 1976 2
^
Revenues 54.023 S3.564 S3.486 53.218
$2.998 Net eamings 141 114 93 75 61
- d General Electric's Power Systems Sector, a level of new orders for these larger units to world leaov li serving markets for electrical be lower than in 1979. Notable progress, F
generatic i ud power delivery apparatus, in-though, was made in winning domestic in-creased its 1980 earnings by 24% on a 13%
dustrial cogeneration orders for smaller-size rise in revenues. Good earnings in steam steam turbine-generators.
turbine-generator operations and the ex-The orders backlog for steam turtinc-gen-panding installation and service engineering erators was $2.7 billion at year-end 1980, of Hitman R. Hill business more than offset decline 3 in ga?
which $1.3 billion is scheduled for shipment o Q e [ j dentand turbine and power delivery oporations.
after 1985. Tha comparable backlog for 1979 PowrrSystems Sector The improved Sector results reflected con-was $3.9 billion, of which $2.0 billion was tinued emphasis on productivity gains,in-scheduled for shipment after 1984 creased penetration of international markets, Mechanical drive turbines showed higher and expansion of equipment maintenance earnings on higher sales compared to 1979.
services. Selling price increases only par-General Electric foresees major long-term tially offset inflation-driven cost increases.
growth for this business in international ap-The Sector's strategy for earnings growth plications such as petrochemical plants and is based on strengthening its leadership in emerging energy technologies involving coal a broad range of energy technologies, and liquefaction and synthetic fuels, diversifying into new energy technologies The Sector's marine propulsion business such as those related to synthetic fuels and consisted primarily of U.S. Navy projects.
advanced cogeneration.
Power Systems businesses contributed Gas turbine sales were higher but earnings 15% of total GE revenues in 1980 and 9%
were down, due princioally to tighter margins of net earnings. Presently, high reserve caused by stiff foreign competition. GE gas margins of utilities and uncertain national en-turbines continued to maintain their world ergy policies continue to slow demand for leadership, being used for electric utility power generation and delivery equipment.
peaking and mid-range power, and for indus-The backlog of unfilled orders was $11.0 trial applications such as natural-gas pipeline billion at the end of 1980, compared with pumping and powering offshore oil platforms.
$12.1 billion at the previous year end. The The Company's highly efficient STAG!
decrease from the 1979 year-end backlog (steam and gas) combined-cycle turbine was attributable primarily to elimination of or-plants continued to be attractive offerings.
ders for steam turbine-generators no longer particularly for foreign customers.
expected to go into production, and also to in 1980, the Sector delivered the first of a Sector sales that exceeded new orders.
line of large gas turbines to serve the interna-tional electric utility market. This advanced Steam turbine-generator earnings were 105-mw heavy-duty gas turbine, the largest well up from 1979 on approximately the such unit ever built by the Company,is now same level of sales.
part of a combined cycle power system oper-As expected, the sluggish demand for ating near Kirchiengern, West Germany.
large steam turbine-generators caused the General Electric announced in 1980 that it l
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's participating in a $300 millicn coal gasifi-continuing losses for this business.
r s ;rs'cal s cation combined-cycle demonstration clant.
Nevertheless. the nuclear fuet faDrication o50
- Castenen ocwer ciart. a ccaMrec P'anned for compietion in 1983. this 100-mw and services segments of the ousiness are instaqatior ocatec or me f ac:iity 's designed to convert coal to syn-profitable. and the nuctear fuel and services thetic gas. then clean and Durn it to orCvide needs cf U.S and foreign utiiities offer onyo-eastern Mediterrarear ccast econcmical efectncity GE aiso is succlying ing opportunities. Additicral arge orders for the gas and steam turbine-generators for this fuel were received !n 1980 and Power Sys-e!ectnc pcwer piant.
tems :nstallation and service engineenng business. in cooperation with the nuclear Nuclear operations continued to incur a business. has expanded GE's nuc: ear modest l css. As stated in previous Annual services offerings.
Repertc. GE is mahng substantial experdi.
The baCKICg of orders. ;nCluding nuC! ear tures on engineenng and development en reactors. fuei assemblies and plant services.
support of nuc' ear projects in the bacxtog totaled 55.5 Onhon at year-end 1980, of These expenditures. added to the ef'ects of wnich $1.9 billion !s scheduted for shipment deferments of shipments and cancenat!ons after 1985 The comcaracie tack log for 1979 of nuc: ear orders. are expected to result n was 35 3 oimon of unich 32.5 tol cn was J
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trol ( AMRAC') load management system.
s Tc orovice G E nuclear beid en9'-
scheduled for shipment after 1984. Some The outlook. Power Systems Sector earn-nIngInva$o$ s-fuel orders include reprocessing, plutonium ings are sensitive to eiectncal oad growth.
as or cectsoneactor etuenngana fabncation and waste disposai services In To offset the relatively low ' cad growth fore-rnairtenance 3E in ' 980 tuot a view of current U S. government poncies. t is cast and achieve satisf actory results. the eac.or serv strainingcerter n highty uncertain unether such services can Sector has embarked on major programs be provided.
to improve productivity and develop new in the U.S.. cancellations of nuclear olants businesses.
have substantially outnumbered new orders General E!ectric intends to play a major dunng the tast six years. General Electnc s role in whatever forms of energy-related management beheves that resumption of nu-equipment and services are required in the clear orders wi!I depend not only on renewed 1980s and '90s.
demand for electnc generating equipment.
Over the long term. s:gnificant growth op-but also on government action. Such action portunities are foreseen as the naticn comes is needed to reform the nuctear ficensing to gnps with its imported-oil problem GE is a process and resolve existing uncertamtres teader ;n many energy technologies. and :s regarding such issues as radioactive waste aggressively pursuing a wide range cf ad-storage as weti as nuciear expert poucy vanced energy deve!opment activities Il t
14 Arnuaiaeocrt ' 98L
j Technical Most businesses grow; investments for future continue Systems and M terials T
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7 (in millions) 1980 1979 1978 1977 1976 Revenues 57,129
$6.061
$4.745
$4.145
$3.688 Net earnings 373 356 278 248 202 4
The high-technology businesses constituting 340, and initial orders were received for CT7 the Technical Systems and Materials Sector turboshaft engines to power the Belllextron had an 18% increase in rcvenues dunng 1980.
214ST helicopter. P roduction go-ahead was 1
Earningswere5%aheadof the 19791evelas annou nced on the Canadair Ltd. Challenger E strong performances in aircrart engines and executive jet powered by C F34 turbof ans.
information and communications systems in military markets, production continued on off set weakness in markets for engineered the F404 turbof an engin e for the U.S. Navy's ChnstopherT.Kastner materials.
F/A-18, and Canada became the first non-U.S.
,[e[gyycent During 1980, the Sector continued to make custom er ta select this new fighter aircraft. The u
a Systems anc Matenals sec.or heavy investments in advanced technologies.
F404 and F101 DFE advanced fighter engmes including microelectronics and engineered completed unprecedented durability tests.
materials whichareexpectedtobeimportant Both the F101 DFE and a new modelof the J79 f actors in General Electric's f uture growth, turbojet flew for the firsttime in U.S. Air Force TheSectoraccountedfor27%of totalGE F-16s. Flight testing also began on the U.S. Air rever"les and 24% of earnings in 1980.
ForceKC-10tankerpoweredbytheCF6 50, and the C FM56 engine was selected f or a pro-Aircraft engine businesses serving the highly gramaimedatre enginingKC-135 tankers.
competitive commercial, military, marine and Salesof aircraftenginederivativescontin-industrial markets produced strong sales and ued on the upswing. The U.S. Navy received earningsincreases.
its 30th Spruance Class destroyer powered by High f uel costs and intensified competition fou r LM2500 engines, while initial LM2500 de-among airlines stimulated demar.d for new air-liveries were made forthe Aegis cruiser. In craft with engines of improved efficiencies.
ind ustrial markets,large orders were received G E commercial engines for this market in-from Mexicc and india for the LM2500 engine.
clude the C F6-80,which was selected by several airlines to power th eir Boeing 767 and Aero s pace operatio n s increased their sales Airbus industrie A310jettiners. Overall,75 and earningsin 1980.Technologiesof this customers have now selected the CF6 or business, which principally invcives U.S. gov-C FM56? for their high-bypass-engine-emment contracts, span the scace sciences, powered aircraft.
electronins and microelectronics, avionics, Seven airlines and the French Air Force computer software and control systems.
have placed orders to re-engine their DC-8 in 1980, G E inctalled its first solid-state, aircraft with C FM56 engines jointly developed three-dimensional radar system in Belgium as bytheCompanyandSNECMA,the French part of NATO's air defense network, and con-l engine manufacturer. A smaller f an version of tinued work on units for the U.S. Air Force, U.S.
this engine, the CFM56-3, has been offered to Marine Corps andthe United Kingdom, power new and derivative twin-engine airc* aft.
In space technology, G E is the pnme con-In 1980, significant milestones in small com-tractorfor developing Landsat D, a N AS A mercial engines aiso were reached.The CT7 earth-resources satellite. and DSCS ill, an ad-turbcprop engine was chosen to powerits first vanced defense communications satellite.
Commuter-sizedaircraft.theSAAB Fairchild In avionics, including aircraftinstruments a.-
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New C FHOA turecf ar engine and Controls, digital systems ar6 be,og tested succherof totaieataprocessingservices faZs E gr7c E C e't5e, f Mhe Boeing 767 and 757 aircraft and the through new moves into the sof tware and serv-af'? rust cr 48 200 ccurcs'or te Navy P A-18.et Sgrter ces segmentof theirdustry Continued n-see,rq y ire vous.rcus:ne ternai ceve'opments were ccmciementec by Aa atransoc"s Information and communications systems externai accuisitions wnicn prowde entry :nto oceraticrs cont:nuec their "trcng increase <n new areasof systemsdesign aduncedsoft-sales and earnings dunng the year ware and services.
Generai E.ectnc !nformetion Services The G E mooiie communication procucts Com pany ( G Ei S C O ) increasec its tu siness cusiness produced strong gains ;n oath sates apphcations in anticipation ct ongoing arcearnings Cemandforthisequirmentcon-changes in the ccmputer.ndustry and +n cus-tinuec in both domestic ard toreigr markets tomer needs it broadened its market by ex-candirginto manutacturing esource planning Engineered materials:ncreased sa esin andtv nt ccuc rgan e'ectroniccurchase or-1980 Aithcugn earrings were down due to denng system un<ing major etaders w:th arge r flation-criven ccs: ncreases and 'cwer voi-succuers Jme ndeoressecconsumer e<atec ar ets GE!SCO streng.henea ts cosition as a
- hese cusinesses cent butec a maicr sha e to 16 rnua. Reoce ' 180 l
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formance materials encompass engineered Emphasis on increased productivity in j
plastics siliconechemicals, tungsten-carbide metal-working industries continued to bring metals, Man-Madet diamonds, Borazon
- opportunitiesfortheCompany'slineof tung-i abrasives and electro-materials such as sten-carbide metals and Man-Made industrial laminates and rechargeable batteries.
diamond s for m etal-cutting tools. R eco rd oil-TheCompanycontinuedtobeaworld drilling activity stimulated strong demand for leader in supplying high-technology engi-Stratapax+ diamond drillblanks.
neered plastics. While slow auto sales af-fected plastics volume, this was partially off set Medical systems businesses, supplying di-by strong intematicaal demand and higher agnostic imaging and patient monitoring penetrationofnewmarkets.
equipment and servic ss, had higher sales and Among significant f acility additions was a eamings in 1980. International operations are new phenol plant at Mt. Vernon, Ind., that be-expected to be aided by the acquisition of sig-gan operation in late 1980. Production of nificant portions of the Thorn-EMI Medical phenol, a key raw material required for several sales and service operations outside the U.S.
G E plastics, will help assure supply while im-This acquisition reinforces the Company's ability to market and support its high-technol-ogy medical products in internatio nal markets.
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,4 short-term decline in U.S. markets during the y:
7 i
7.g year, some improvementis expected in 1981.
p.,
j%k*[J.J4!h 3y,;.
While the airline industry is unde rgoing fi-
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Og gg nancial difficulties, prospects for new engine sales remain good because of the need for 7c.
9.?.
a %d : y ;.
j, 7 il 9 improvingfueleconomy.
i e
e.
e G ove rnm e nt m arm. :s fo r d efe nse-related y
('-.[ T
. 4:
j-L,.
..g ' I technology, services,andresearchanddevel-py '.'Mj.* opmentshouldcontinuetoexpand.
+
Information services and communication
'?
O;ov
". py Ny ;., (..
equipment markets are expected to maintain 1
-~^t 1
f~. 4, fJ W
- . Y L.k,(
, y.; ;
_H3. T ' theirsteadygrowthcurves.
~ c '..
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.,. ;,- ~
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procedures should sustain demand for high-technologymedicalsystems.
.. i 1..
. :: V -A
- +
-r
+
P00ROR M The General E!ectnc tnvestor 17
Natural Record results from energy and mineral operations Resources (In millions) 1980 1979 1978 1977 1976
[
Revenues
$1.374
$1.260
$1.032
$965
$1,003 t
{
3.
Net eamings 224 208 180 196 181
[t General Electric's natural resources opera-quarter when employees protested a govern-h!
tions, chiefly Utah intemational inc.,in 1980 ment proposedtaxonsubsidizedhousing.
kN set tecords for both revenues and earnings.
Utah seeks expansion ofits coking coal ac-K Earnings were up 8% on 9% higher revenues.
tivities and is investigating the feasibility of k
Theseoperationsprovided5%of totalGE developing other mine sites near present op-
[
revenues and 15% of earnings for 1980.
erations. Utah-operated coking coal mines Earnings improvements were paced by oil now have a total annual production capacity, AtxanderM. Wilson and natural gas, iron ore. coppe r. demestic including partners' shares.cf about 23 million Ca a oar coal and ocean shipping operations-more metrictons.
. officer-Utaninternanonaline.
than of fsetting lower earnings for coking coal anduranium.
Oll and natu ral gas operations of ladd Petro-Continued growth is expected in the 1980s leum, Utah's oil and gas affiliate, produced due to Utah's established position as a leading record revenues and earnings for the year.
Iow-cost producer of energy and mineral re-Higher prices for petroleum products was the sources, and because of vigorous ongoing primary reason for improved results. Ladd's expioration and development programs.
activities are located in 16 states and three At year-end 1980, the sales backlog for min-Canadian provinces, and Ladd is a participant erals, including uranium, was $6.8 billion, of in four foreign expioration joint ventures. O nll-which $5.7 billion was scheduled for shipment ing and acquisition programs during 1980 ex-after 1981. All contracts making up this back-panded its property and reserve positions.
log are payablein U.S. dollars.
Approximately 80% of 1980 natural re-f ron ore activities made a small contribution to sources revenues and 73% of net earnings earnings in 1980. The largest operation is the originated f rom operations outside the U.S.
Brazil-based Samarco,in which Utah owns For additional information about certain of 49% of the voting stock and provides debt Utah's naturai resources, see page 31.
guarantees.lteperatedatabreak evenlevel in 1980comparedwithalossin1979.
A u stralian coking coal activities, although re-alizing somewhatlower earnings in 1980, con-Dome stic coal mining operations also con-tinued to be Utah's major earnings source.
tnbutedtothe1980earningsgain principally Utah owns 89% of Blackwater Mine and 68% of due to increased steam coal shipments f rom four other Utah-operated open-cut coking coal the Navajo and San Juan Mines located in the mines, including Norwich Park Mine which had FourCornersareaofNewMexico.
its firstfull year of production in 1980. In addi-In 1980, Utah acquired the coalleases at tion,thecompanyowns68%of thecompara-San Juan, where previously it had operated j
I tively small underground Harrow Creek Mine.
under a mining contract, and itcompleted its A two-year labor agreement reached in July purchase from National Steel Corporati" of 1980 between management and the minir.g coal reserves in Kentucky and West Virginia.
unions reflects an improved industrial climate
(
at Utah's operations. Production, though, was Copper mining operations at Island Copper l
interrupted for 10 weeks during the third Mine in British Columbia, Canada, reported rec-l 18 Annual Report 1980 l
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%nmemr Austrea 20 '
pnmanly to gcod pr:ce reanzaticrs for ccocer f utu re imorovemen t is uncertain.
1 0;ercec arc ecoverec"cm arge I
stoc=cnes av an mourtec stacx.
eany'ntheyear andhgherpncesforoneof the j
i
-s ec: ace s s'ec osmco'rg mine sby-crocucts goid.
In other activities. ccean transportatien cper.
ce sracersese ceus rme aticos carr edout:nsucocrtof Utan sprocuct au f or vence neada+eston i
was ec c:tre"ccavors.
Uranium mining ocerations are ccrcuctec.n marketing. eanzed.moroved results n 1980
)
euccum,s srecemq ue en Wycming by Patnfoder Mines Ccrocration a Landceveicomentactivit:eswere essorofita-l Lacco l
morance are ceve;cererr e'
- Cr's At 9razn 3 hr' o eu da.
ble inan the previcus year whenyownednonconsoudatedsucs:ciary au mame -cr ore ce"ets are 'caced of whose commcn stock is held by 'ndepen-acccc arge um ca-ers dent trustees 'see ncte 12 tc f nanciai state-The outlook for Utan International s ousi-i ments> Pathfinder sincreased toss cur:ng nesses is enhanced by expected long-term 1980 reffectec sharply mgher coerat:ng costs growth in woric cemand forits products Rec-combired eth tre ow cnces receivec as firai ogniz:ng this ccoortunity. Utah is :ntent upon oeuver es were mace under cortracts s:gnec excancing;tscur entoceraticns Substant:al in me eary ' 9Xs in ' 981 P athfince n s e x -
increases ;n ' 980 excioraticn and devetco-cectec to cegin maxing ceiiveries or mgrer.
ment expenditures reNect management's coti-onced sa escontracts Largerserr croscocis mism accut 'uture market prosoects P00R :Rl1NL 4e Mer3. E OCWC r'. eSIC r 19 l
6temational U.S. export sales show strong rise; intemational business increases Foreign multi-industry operations (in millions) 1980 1979 1978 1977 1976 Revenues
$3.234 52.901 52.767 52.562
$2.334
~ '
Net earnings 68 65 76 71 75 g
Total intemationa! operations - all Sectors
,,j Revenues outside the U.S.
$9.597
$7.840
$7.014 56.138 55.567 Net earnings 639 526 486 415 445 General Electric's total international busi-cult economic conditions in many of the r
'-?.
ness from its six Sector? in 1980, which is countries served. These operations are the
- k summarized above, reported a 21% earnings direct responsibility of the International Sec-rise on a 22% increase in revenues. Interna-tor and consist primarily of affiliates produc-E ti ce Presidentand tional operations accounted for 38% of GE ing varied lines of products for local and ex-Sector Executive-international revenues and 42% of earnings.
port markets. They also include internationsi I
Sector Demand for a wide range of sophisticated construction operations.
l products and services needed by the world's Canadian General E!ectric Company Ltd.,
j economies is expected to continue to make largest of the multi-industry affiliates, re-international business a major contributor to ported 1980 earnings significantly higher Generai Electric earnings.
than those of 1979 on modestly higher sales.
The Company's international business is improvements in electncal apparatus and composed of four broad categories of activi-construction products were partially offset ties: foreign multi-industry operations: U.S.
by declines in consumer operations.
exports of General Electric products and ser-Latin American affiliate earnings were i
vices; operations of nondiversified foreign af-ahead of 1979, primarily because of strong filiates including the foreign operations of consumer and industrial markets in Mexico Utah International; and technology licensing and Venezuela.
revenues.
Elsewhere, operating profit of restructured A summary of intemational revenues ap-Italian operations improved. The Spanish af-pears below. Revenues from U.S. exports, filiate continued in a loss position, largely as operations of nondiversified foreign affiliates a result of depressed local economic condi-and technology licensing also are included in tions. Operations in Africa, the Middle East the amounts reported by the appropriate and Far East generally improved and contin-product Sectors elsewhere in this Report.
ued to provide significant assistance in " pull-ing through" more orders for U.S. exports.
International revenues International construction operations had increased sales in 1980 with earnings about On millions) 1980 1979 the same as the prior year.
Foreign operations and licensing
$5.816 $5,068 affifate customers Export sales to external customers by Gen-
$3.781 $2.772 eral Electric's domestic business operations.
Affiliated companies 484 467 assisted by marketing and financial services
$4.265 $3.239 provided by the International Sector, were up
$1.0 billion in 1980,36% more than in the Foreign multi-industry operations had nrevious year. This sharp increase was led generally good results in 1980 despite diffi-by high-technology products including 20 Annual Pecort 1980
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C*ockwisetrom uocer eft Brazii's aircraft engines and gas tur0ines.
major foreign industrial countnes and of As one of the nation s feading exporters.
some of the newly 'ndustnalizing nations are Sart a o ce o t ct or o Generai Electnc nad total exports of $4.3 oil-expected to strengthen in the latter ha!f of the meiguacu Aiver rciucestur.
Dires cesigrec ana built ty C ara-lion in 1980. wnich exceeded its direct im-year This should provide an advantageous ber p s y awomaMy W DiWon. Weh economic emonmeN W &nsai Nnc rv s gn ua v he!P'ng offset the unfavorable U S trace operations in those countnes. and is ex-crocucts are manuf acturea using l
aacermanirgenves matcrs ana baiance pected to stimulate demand for GE's exports br[v uIMh=1coseIe The backlog of Company orders from unaf-from the U S.
a cn filiated customers for exports from the U S.
GE operations expect to continue their pian. GE ecently sotc six gas tur.
tires to the nanonat utihtv..nctuc-again increased. from $4.6 billion in 1979 to growth by expanding from their strong bases r es nc.ucacf z
'9"
$5.1 billion for 1980.
into countnes with high leveHs of GNP growth
- pnnc: pally the oil-rich nations and several The outlook. Prospects for continued industnalizing countnes. in addition. Interna-growth of General Electnc s :nternational tional Sector has made notable progress.n business in 1981 are partly attnbutable to the strengthening tts affiliates, by selectively al-Company's wide geograonic diversity. After iocating resources to emerging markets some slowdown in early 1981 economies of wnich offer maximum ootential.
II
- f..a 4
M Cenerai Eiectnc !rvestor 2*
.-= _ _ - _
Coard ef Directors l
GeneraliElectric's Board of Directors con-centrating on specific areas of interest:
ducted 11 meetings in 1980.The October The Audit Comr-ittee, made up entirely of meeting took place in Houston, Texas, where Directors f rom outside the Company, met four Board members also attended the 1980 share times.Itsreviewsincludedthoseof activitiesof owners'informationMeeting.
both the Independent Public Accountants and Specific Board attention was directed to pro-the Corporate Audit Staff. Atajointmeeting i
posed programs relating to the Company's with the Finance and Operations Committees, strategies for strengthening its electronics ca-the 1979 AnnualReportand the 1980 P oxy pability-an increasingly important f actor in Statementwereapproved.
today's competitive business enviror. ment.
The FinanceCommittee,meetingfour In May, the quarterly dividend was increased times, reviewed the Company's financial posi-by the Board, from 70 to 75 cents per share.
tion,itsinvestments,and theoperationsof the The seven Committees of the Board, listed General Electric Credit Corporation.
at lower right, are designed to help the full The ManagementDevelopmentandCom-Board keep pace with the growing scope and pensation Committee held ten meetings and complexity of its responsibilities by con-reviewed and approved changes in G E's a
Jonn E. Lawrence Walter B.Wnston Raion Lazarus Geibert H. senbner.Jr.
EdmundW Littlefieid 1
l J PaulAustin RegmaldH.Jor'es JamesG.Bosweilll Chanes O. Dickey.Jr.
Henry L. Hillman John E. Lawrence, President.
EdmundW.Littlefield. Chair-Jemee G.Bosweilli, Chairman HenryH.Henley,Jr Chairman Gertrude G. Michelson, senior Jameslawrence & Co.,inc.,
manof the Executive Committee of the Board.CNef Executive of the Board. Chief Executive Vice President. Extemal Aff airs.
cotton merchants. Boston, and Director.utaninternational officeracGirector.J.G t30s-Officer and Director,Cluett.
R. H Macy & CJ. inc.. retailers.
Mass.(1957)
Inc.. san Franc:sco. Calif.
wellCompany. farming and re.
Peabody & Co.,inc..manuf ac.
New Yorn. N.Y. l1976)
(1964) lated businesses.Los Angeles.
tunngandretailingof appares.
Lowle T.Preston,Chairmanof WeiterB.Wrleton Chairmanof i
Calif. (1971)
New York. N.Y (1972) theBoard and Director.C.ticorg J.Peul Austin,Chairmanof the the Board andDirector,J. P and C.tibanA, N. A.. New York, Board and 0 erector.TheCoca-CharleeD. Dickey,Jr Chair-Silas s.Cathcart,Chairmanof Morgan & Co. lncorporated and N.Y. (1962)
Cola Company. Atlanta.Ga.
manof tneBoard.CNef Execu-the Board and Director. itimois Morgan Guaranty TrustCom-(1964) tiveCfficerandOirector. scott ToolWorwsinc.diversif ed pany, New Yort. N.Y.(1976)
Boardan ir er.
ReginaldH. Jones. Chairman D',' C pany. PNiadelonia, products. CNcago. Ill. (1972)
George M. Low. President.
9 ated 0ecartment stores. Inc.,
of the Board. Chief Executive SamuelR. Pierce.Jr Partner, Rensselaer Polytechnicinsti-Cmcwrats. ohio (1962) officerano Director. General Henry L Hilfman.P*esident Battle. Fowler.Jaffin. Pierce and tute. Troy. N.Y. (1977) ctdomcanpadet a@nctsD manQm-WCawWowYmu Y Gilbert H. Scribner.Jr., Chair-RichardT. Baker.Consultantto "nn U
Dany ve ec ea n and 0974 mariotthe Board and Director.
Emst & Whinney.public ac-
.n p,
p scnbner&Co..reaiestate and countants.Cleveiand. ohio.
0 972) insurance.CNcago. Ill. (1962)
(1977) 22 AnnualReport1980 f
l l
i executive compensation and management.
status of the evolving national energy policy.
TheNomir.atingCommittee metthree The Technology and Science Committee times. it assessed candidates for Director-met twice, concentrating on those areas of ships and the memberships of other Board technological development promising the Committees.
most significant progress for the Company.
Tha Operations Committee met five times.
The Board is made up primarily of Directors At one session, ajoint meeting with the Tech-from outsid e G E. The 1980 Board members nology and Science Committee at the Com-are listed at lower left in order of their Board pany's Plastics Business Operations f acility in senionty, with the year in which they were Mt. Vernon, Ind., it conducted a business re-elected shown in parentheses. Besides Mr.
view of the Engineered Materials Group. in-Jones, three other directors are not candi-c!uding perspectives on the Group's antici-dates for re-election. Messrs. Lawrence and
-l pated financial performance through 1985.
Austin are retiring from the Board after 23 and
. The Public Responsibilities Committee 16 years of service, respectively. Mr. Pierce held two meetings and reviewed key public has tesigned to become U.S. Secretary of Issues affecting the Company and the current Housingand Urban Development.
7.u Henry H. Heniey.Jr.
sdass Cathcart samuei R. P erce.Jr.
GertrudeG.%cherson LewisT Preston V-h-m.,
]
George M. Low RicnardT. Baker Jonn F. Buningame Edward E. Hood.Jr.
JonnF Welcn. r l
l
(
FinanceCommittee Nominating Committee Public Responstballtlee j
John F.Surlingame.Vice Committees l
Edmundw Lttle'iend.Cher-Chartes D. Dickey.Jr.. Char-Committee Chairmanof the Board.Execu.
of the Board man.ReginaldH Jones.Wce man.J Paul Austin.HenryM.
Henry H.Henity.Jr.,Charmen.
tiveomcor anoDirector.
Osinnan. Ganes O. Dickey.
Wnwy.#. Racn Lazams, m F B#ingame, W@ain
- O l
GeneralE'ectncCompany.
AuditCoinmittee
- "'an.Raion Lazarus.
'Y#D Fairfield. Conn.(1980)
Richardt.Bauer.Charman*
H.scr:bner.Jr.,WalterB.
M Low.GertrudeG.%chelson Hil!m j
John E. Lawrence. George M.
Gertrude G. McNeison.
Edward E. Hood.Jr.,Vice Wnston Charmanof the Beard. Enocu.
Low. samuei R. Pterce.Jr.,
operationsCommittee samue; A. P erce.Jr-tiveofficer ancDiractor.
Lewis T.P'eston Management Development Henry L Hillman. Cherman.
andCompensation John F Weich.Jr..Wce Chair-Technology and science Generai E'ectncComoany, Committee man. James G. Boswell11. salas Committee Farfiend.Conna1980)
Ralen tazarus. Chairman. J.
s Catacart.GertrudeG %chel-George M. Low. Cherman.
JohnF. Welch,Jr Charman-Paul Austin.slass Cathcart, son.3amuetR P erce.Jr..
Ecward E. Hood.Jr.. Wee Char-esctand Director. General Jonn E. Lawrence. Wa'ter B.
Lew'sT.P es:on.GilbertH.
man JamesG.Boswedil.
E ectncComoany.Fa rfieid.
Wnston screner. Jr Char'esO Dickey.Jr.HenryL Conn. (1980)
Holman.Edmunaw Lttlefie'd l
P00R ORIGINAL The General E:ectnc Investor 23 l
I
CE people Com pany domestic em ployment, including increase of ' 0% was applied to the pensions of consolidated affiliates, averaged 285,000 dur-those who retired on or before May 1,1979, ing 1980,aboutthe samaas 1979.
and smaller increases were applicable to em-An analysis of domestic G E and G eneral ployees who retired after May 1,1979, and Electric Credit Corporation employment for before the February 1,1981, effective date.
the year ended September 30 demonstrates This marks the third pension inerease for G E the Company's active support of U.S. progress retired employees in the last four years.
toward improved career opportunities for Medical care for the Company's retirees was women and minorities.The numberof women alsoenhancedwiththeintroductionof anew l
managers increased f rom 1,288 to 1,478-up prescription drug plan and improved medical 15%. The number of minority managers in-insuranceprovisions, creased 8%, f rom 1,332 to 1,432. The total of women prof essionals went up from 4,690 to G E's occu patio nal safety and health record 5,349, an increase of 14%, while the number of and experience compare f avorably with those minority professionals climbed f rom 3,348 to for companies in similar businesses. In 1980, 3,663-up 9%. More than 19,000 women and General Electric continued to emphasize 9,000 minorities were promoted in 1960. Over-people-oriented safety programs and health-all, women account for 28% of General Electric hazardeducation.
employees,and minorities 12%.
Co ntribution s to philanthropic organizations Wages and benefits for G E employees con-by the Company and the General Electric tinue to provide a competitive total compensa-Foundation totaled $ 13 million. The G E Foun-tion package. In 1980, the new Dental Assist-dation's annual reportwillbe availablein April.
ance Plan was introduced as an additional ben-upon request. tncluded in the Foundation's efit for employees and their dependents.
contributions were $1,050,000 for minority en-Adjustments in the pensions of retired em-gineering programs, a major part of an effortto ployees were approved by the Board of Direc-improvecareereducation.
tors. Effective February 1,1981, a maximum A Companywide survey identified 80 p ro-grams in 48 G E plant communities where G E s
business operations are contributing to local
\\
,4 g minorityengineeringactivitiesandscholar-s ships. These efforts helped lead to steady l
progress in the national effort. which in 1980 3
resulted in B.S. degrees in engineering fer 2,383 minority students - a 90% increase sincetheprogram beganin1973.
. Strengthening the technical work force of G eneral Electric is a key ongoing objective.
Efforts to recruit. retain and retrain the prof es-sional and managerial peopie needed for the changing GE of the 1980s are aggressively j'
under way. During the year, the Company's Atplantlocations such as theGE computercenterin Bnogeport.
.4 new two-year Edison Engineering Program-ftudeAtsmIopErtun$eIfo i designed to provide entry-level training oppor-careersin science arid engineent g.
/
tunities for engineers-saw its first graduates.
24 Annual Report 1980
Mcnagement Corporate Policy Board Corporate staff Officers i
Reginald H. Jones Thomas R. Casey, M.D.
R.Howard Annin,Jr.
Markin9acarefull plannedsuccession Chairman of the Board VP & Company VP - Northeastern Y
of executiveleadership,the Boardof Directors and Chief Executive Medical Director Regional Relations C#C
James J.Costello Kristian H.Christiansen in December named John F. Welch, Jr., as John F. Welch, Jr.
VP & Comptroller VP-Southeastern Chairman, effective April 1,1981. He will Chairman-e:ect Regional Relations succeed Reginald H. Jones as Chairman and John F. Burlingame P-or'p ra e nv on nental WHilam B. Frogue l
Chief ExecutiveOfficeronthatdate,when Mr.
Vice Chairman of the issues Project VP - Southwestern j
Board and Executive eg onal Reladons Jones retires after 41 years of outstandingly Frank P. Doyle effective service with General Electric.
fo),*,',, g, go,e, ar,
$,tfon's N-we'sNR$ional Relations John F. Burlingame and Edward E. Hood, viceChairmanof the Dale F. Frey Board and Executive VP & Treasurer WilHam C.Lester Jr., continue as Vice Chairmen of the Board E
(giona Reatio s I
Fred W. Garry and Executive Officers reporting to the u M.Bueche Chairman-elect, with realigned and increased senior Vice Presicent gg}neer g tver J. Pttersen Corporate Tecnnology
- enuaWgsnal responsibilities. Reporting to Mr. Burlingame Marlon s. Kellogg Reiations Daniel J. Fink are the International Sector, Power Systems VP - Corporate Secto r, U tah internation cl in c., Co rporate N"rE[raYP annin ConsWting Services na D nd i
$ymond F.Lettserat?nISe$v* ices Ra Refations Deveicoment Planning andDevelopmentStaff,and Corporate Relations Staff. Reporting to Mr.
$$y,2 cecti s. sempie
,jo,n, l
HoodaretheConsumerProducts and Coroorate Production Theodore P.LeVino sIom elations i
and Operating Services VP - Executive Services Sector. Industrial Products and d
d Malone
~
Components Sector, Technical Systems and g*,$,cg,ag deIit C
J Materials Sector, Corporate Production and Corporate Relations VP -Trust investments t
Operation Operating Services,andCorporate Walter A.schlotterbeck Senior Vice President Terence E. McClary Technolo9Y taff*
General Counsel and vP-Corporate Financial y
i S
Theseexecutivesheadtheteamol 141 secretary Administration managers on it'is and the following two pages.
Thomas O.Thorsen John B. McKitterick
- orporate
{
Integrationof theprogramsof thesesenior gen President n
f Leonard C. Ma er. Jr.
managersisaidedbytwo management PhHHps s. Peter groups:the Corporate Policy Beard made up VP -Corporate Government Relations Operation of theChairman, Chairman-elect,Vice
@*,no W. Schm Chairmen and the six Senior Vice Presidents Co o t A search and Deveicoment i1 pictured at right: and the Corporate Executive
( $.
l Council which includes these same ten 4
V'
)
cfficers plus the six Executive Vice Presidents and Sector Executives pictured earlierin this yg 7
fx f
Annual Reportwith their Sector reviews.
b waiter A. seniotteroecx s
The 120ther SeniorVice Presidents, g
l pictured on pages 26 and 27 along with the
" ~ ',
President of GECC, provide management for groups of General Electric businesses.
)
8-I, hg The continued availability of broadly i
noe.,, s go,1, experienced le adership f or G en eral Electric in 7-the future is being achieved through a diverse g
program of learning opportunities provided by Thomas o. Thctsen caniet J. Fink theCompanyworldwide.
P00R ORIGINE l
1
Management-operations James A. Baker Robert R. Frederick Herman R. Hill o Executive Vice President Executive Vice President Executive Vice resident and Sector Executive and Sector Executive and Sector Executive Industrial Products and Components Sector International Sector Power Systems Sector James P. Curley Ralph B.Glotzbach Willis E. Forsyth Roy H. Boston John A.Urquhart Senior VP & Group VP -Industnal Products VP & General Manager Senior VP & Group Senior VP & Group Executive -Contractor and Components Latin Amencan Operations Executive-Nuc! ear Executive-Power Energy Group Delivery Group Equipment Group Customer and Industry Rodger E. Farrell Relations Operation WilHam Longstrwt General Manager A. Philip Bray Nicholas Borsski VP & General Manager Kertis P. Kuhlman Andean Countnes VP & General Manager VP & General Manager Distnbution Equipment VP & General Manager Division Nuclear Power Systems Large Transformer t
Diwsion Dnnsion Division General E!ectnc Supply J. Richard Stonestfer James M. Mcdonald Company Diwsion Chairman of the Board and Warren H. Bruggeman Donald C. Berkey VP & General Manager Donald E. Perry Chief Executive Officer VP & General Manager VP & General Manager Apparatus Distnbution VP & General Manager General Electnc do Brasil Nuclear Products Energy Systems and Saies Division Industnal Sales Diws on S.A.. Latin Amencan Division Technology Diwston Donald K. Grierson Bruce O. Roberts Operations Henry E. Stone Robert T. Bruce Senior VP & Group VP & General Manager Paolo Fresco VP & General Manager VP & General Manager Executive -Industrial Accaratus Service VP & General Manager Nuclear Engineenng Installation and Electronics Group Diwsion Europe and Afnca Operations Division
, Service Engineenng Nsion Erwin M. Koertt2 Carl J. Schlemmer Edward C. Savarta Bertram Wolfe VP & General Manager VP & General Manager VP & General Manager VP & General Manager Edward W. Springer E!ectronic Components Transportation Systems Middle EastAfnca Nuclear Fuel and VP & General Manager Diwsion Division Business Deveiopment Services Divis!on Electnc Utility Sales Division Diwsion James R. OtIn George B. Cox VP & General Manager George J. Stathakle Senior VP & Group industnal E!ectronics VP & General Manager Executive-Turbine Group Systems Diwsion intemational Trading Robert H. Goldsmith and Construction Operations Van W. Williams VP & General Manager Senior VP & Group Arthur V. Puccint Gas Turbine Division Executive-Motor VP & General Manager Richard W. Kinnard Group Export Sales and VP & General Manager George B. Famsworth Trading Division Large Steam Turbine.
VP & General Mar'ager Edward F. Rosche Generator Division Component Motor VP & General Manager Geor[e H.Schofield Diwsion intemational yp g eneral Manager Construction Division Eugene J. Kovarik Industrial and Mar:ne VP & General Manager Vittorio Orst Steam Turbine Diwsion industnal Motor Managing Director Diwsion SADE SADELMI Construction Operations Intemational Construction Diwsion Frank D. Kittredge VP & General Manager
(
Far East Area Diwsion f
O f
Alton S.Cartwright i
Chairman of the Board &
Chief Executive Officer Canadian General Electnc T
Comoany Limited (CGE)
's ta General Electnc affiliate)
Jarnes R Cuney William R. C. Blundell President and Chief c'
<z
' ~
Executive Officer. Canadian Aoy H. Beaton y
Appliance Manufactunng 7;,
Comc any Ltd. (a CGE y
affiliate) g
- 1 Robert T. E. Gillespie
..b M
Vice President T
Consumer and Construction Products Division. CGE
/
Q Oonsid K. Gnerson D. Forrest Rankine (g
Vice President Kw rybvis on.kGE Ge me B4cx John Ahman g
ac i
l l
26 Annual Report 1980
Christopher T. Kastner Paul Y!. Van Orden Alexander M.Clison Executive Wee Presicent Executive Vice President Chairman of the Board and and Sector Execuuve and Sector Executwo Chief ExecutwoOfficer Technical Systems and Materials Sector Consumer Products and Services Sector Utah InternationalInc.
Dondo S. Bates Brian H. Rowe Richard O. Donegan James R. Birle James T. Curry Ssnior VP & Grouc Senior VP & Group Senior VP & Group VP & General Manager Financial VP Erecutwo-Informanon Executwe - Aircra:t Executwe-Maior Air Condinoning Dwision Stephen K. Brtmhall and Communicauons Engine Group Aconarco Group Fred AWellner VP & Treasurer Systtfns Group James N. Krebs Robert E. Fowler, Jr.
Generas Manager Melvin H. Kennedy Gregory J. Liemandt VP & General Manager VP & General Manager Television Dwtsion Vice Pres cent VP & General Manager Military Engine Operatons Maior Acoliance Manufactunng Dwisen William R,.Webber Ronald K.Lamson Information Services Orville R. Bonner p7,,,c,n Cetrouw Dwison VP & General Manager Richard T. Gratton Gereral E'ect ic Video. Inc. Ralph J. Long Donald J. Meyers Manne and incustnal VP & Gereral Manager Walter W Williares SencM & Manage VP & General Manager Engine Protects Dwision Major Acouance VP & General Vt.ager aE rt and Marxetirg Operations Housewares and Aucio e[i m o le Communications William J.Crawford Ill VP & General Manager Philip J. Driect Dwison Donn Uurguson Charles R. Carson Military Ergine VP & General John W. Stan9er VP & Manager Senior VP & Group Proiects Dwision Manager - Maior President &
Manne hansportaten Acouance Retaif Chief Executive Officer Executive - Engineered
,, g,,,b,an,a,g,y g
Sa;es Dwision General E!ectnc Crecit Robart O. Wheaton Mattnals Group General er Alastair C. Gowan Aircraft Engine Wilitam L Grim Corocration (GECC)
VF. Manager-Business VP - Engincred Matenais Manufactunng Division VP & General Manager f an affiliate of Generat Development Mact A00 nance EMctnc)
Charles K. McArthur Technical Operation Frank E. Pickertng Cenact Saies Lawrence A.Bossidy Senior VP & Mann" Glen H. Hiner VP & General Marager Dwison Executwo VP & Chief Mining Dwision ~
VP & General Manager Aircraft Engine Ptasucs Operations Engireenng Dwision James F. West Operaung Officer John T. Atkins V P & General Manager Gereral taectnc Credit VP & Manager-Westem Eugene F. Apple James E.Worsham Major Aconance Corporauen Coal Operanons General Manager VP & General Manager Mamoung Duison Norman P. Blake Robert N. Hickman Speciaity Piasucs Dwison Commercial Engine Operations John C.Truscott VP & Generaf VP & Manager - Mining D. Rex Blanchard VP & Generat Manager Manager - GEC*e Tennical Services Director Neil Burgess Managinhiectne tastics P & Ggnera Ma n$s$n F rancing Coyd C. Pautaon eneral o
r A
P search and Engineenng Owision Dwision Vice Presicent Ralph D. Ketchum Bernard P. Long Geor W. Tarteton e eralManager
& Ge'rera neger S*"'or VP & Group VP & General VP & ansger-Mineral Lexan Products Division Commercia1 Engine E <ecutwe - Lightirg Manager-GECC Products Marketing P'Olects Owison Group Consumer Financing John H. Moore Thomas H. Fitzgerald Dwissen VP & General Manage' Louis V.Tomasetti Silicone Products Dwision Senior VP & Group Executan $u ene al$anager e$rNeuIC rooration Os Aeroscace Goup Robert J.Gerardi Lamo Components (a subsidiary of Utah)
Gsneral Manager William A. Anders Dwision Metallurgical Dwision ert h' on David O. Gifford en or M ager aE VP & General Manager Australasia Dwision
~l Lee L Farnham International Lignting Timothy R. Winterer y
cv b4 VP - DSCS Program Dwision VP & General Manager
/
Thomas 1. Paganelli Henry J. Singer Utah Development VP & General Manager VP & Generai Manager Company (a subsidiary i
Electronic Systems Dwision Lamo Products of Utah)
Dwison Allan J. Rosenberg Bruce T. Mitchell VP & General Manage Secetary Scace Systems Dwiew n J. Gilbert Selway Ladislaus W.Warzect s General Counsel Donaid S. Bates VP & General Manage.
Re. entry Systems Dwision y'
Donald S. Beilman 3?i VP & General Manager Advanced Microelectronics
' s.,
Operat.ons James E. Dykes General Manager Microelectronics Center g
g R
Chcries R Carson Y
y & ne a Manager Mecical Systems Dwision 300R ORIGINAL The General E:ectnc Investor 27 l
i
Financial review Interest expense and other financiai charges were
$314 million in 1980, compared with $258 million in 1979 and $224 million in 1978. The 1980 increase from 1979 reflected higher worldwide interest rates as well as a somewhat greater level of borrowing by affiliates. Interest expense in 1979 was more than in 1978 pnncipally due to higher rates.
Provision for income taxes was $958 million in 1980 This financial review supplements the detailed informa-($953 million and $894 milfion in 1979 and 1978, respec-tion presented in the audited financial statements which tiv ely). Note 6 to the financial statements provides details begin on page 34. In addition, & Mce should be made about income tax provisions and GE's effective tax rate.
to the ten-year summary of historicalinformation on pages 46 and 47, whict provides a longer term perspective.
Dividends declared were $2.95 per share in 1980, the fif th consecutive year in which the rate increased, and 74%
Sales and not earnings were up 11% and 7%, respec-more than in 1976. Earnings per share of $6.65 in 1980 tiv;ly, in 1980 from 1979. This performance, despite a were 61% more than in 1976. During the years shown p;riod of adverse economic conditions in the United below, dividends have been equivalent to just under half of States as well as in a number of the world's industrialized the Company's earnings, with the remainder retained to cconomies, emphasizes the strength achieved through maintain the Company's productive capacity and support th3 diversity and changing mix of General Electric opera-future business growth, tions. Information about industry and geographic seg-m:nts is on pages 44 and 45.
Earnings per Share in some of the shorter-cycle businesses, particularly those related to consumer and residential construction
' D""aa**
markets, physical volume was lower in 1980 due to the domestic economic slowdown. In other businesses, par-
..,,,n 4 %,or j
ticularly where order to-shipment cye'os are longer, as well as where exports from the U.S. are important,1980 physi-cal voiume was higher. Overall, it is estimated that additional q
y,
.s volume of shipments acGunted 5 about oae fourth of the sw p,
increased s ales dollars in 1980. Curing 1979, higher volume
~-
hid accounted for somewhat mr.ce than one half of the 14%
d l
bd N
b,1 increase in sales dolfars from 1978.
d d
kl (d
O Operating margin dollars, as shown in the Statement im im tm im tm of Earnings on page 34, were higher in 1980 and 1979 than in each of the previous years. Details of operating Capital expenditures reached a record $1.9 billion in costs are shown in note 2 to the financial statements. Op-1980, up 54% from 1979 and more than two-ano a half erating margin as a percent to sales has declined some-times greater than in 1976. Identification of needs for capi-what since the high in 1978. Despite continued emphasis tal expenditures and selective allocation of funds to prom-on productivity improvements, which tend to have longer-ising growth businesses, as well as to productivity and t:rm impact, costs of compensation and benefits and pur-technological ;mprovements, are among the most impor-chased matenals, supplies and services have been esca-tant aspects of the Company's strategic planning system.
lating more rapidly than the Company has been able to Expenditures for property, plant and equipment for each of recover the increases through selling prices. Also, the the Company's Sectors for the past five years are depicted
(
Company has substantially increased expenditures in re-below.
l cint years to benefit future growth. Research and devel-opment expenditures from the Company's own funds were Capital Expenditures
$760 million in 1980. This was 19% more than in 1979, when expenditures were 23% more than in 1978.
" aa' 52 wo General Electric denves income from a variety of op-a g s;,-.
crating and nonoperating sources in addition to amounts realized from sales of products and services. These other
[
sources of Company income have been substantialin re-
.aa comoam.
c:nt years, including steady increases in earnings from a con.
, ** we.
our nonconsolidated finance affiliate, General Electnc co,.,aa
.nno.n Credit Corporation. GECC's earnings rose 28% in 1980 to a ao sn
$115 million from the 1979 amount of $90 million, which Eir-
_m m ~
m co po,.r.
cf.s 17% more than 1978 earnings. More detail of other, income for 1978 1980 is included in note 4 to the f,nancial i
,m
,m in im im st:tements.
28 Annual Report 198o
In addition 13 programs timed at improving productiv-pi; tion end (mortization. Th3 most subst;nti;l recurring ity, expenditures have been made for increased capacity applications of funds occur in the form of increasing divi-or 13 provide adequate sources uf key raw materials, such dends and expenditures for property, plant and equip-ts plastics feedstocks in the Technical Systems and Mate-ment. As illustrated in the chart, funds provided from oper-ri;js Sector. Still other expenditures are aimed at com-ations have been more than adequate during the five-year p::tely new resources for GE, such as the purchase by period shown to cuer those commitments. During 1980, Ut;h Intemational of coal propert:es in the Eastem United dividends and expenditures for new plant exceeded funds Ct:tes. Several Sectors and the corporate Research and generated from operations by $279 million. This difference 0;velopment Center are making substantialinvestments was met with amounts available from prior years, oriented to expanding and improving the Company's inte-grated capabilities in advanced electronics.
Comparison of Cash Flow fror.1 Operations with Can used Estimated property, plant and equipment expendi-for Dividends and Paperty. Plant and Equipment tur;s in future periods to complete projects already ap-proved aggregated $1.0 billion as of year-end 1981 s ca;ay Ca:h and marketable securities at year-end 1980 to-e M*o%
2*
tiled $2.2 billion, some $375 million less than a year ear-li;r. Short-term borrowings increased $222 million during 1980 to a total of $1.1 billion at year end. As a result of E
th;se changes, a total of $597 million of the Company's tooo n;t liquid assets were utilized during 1980, pnmarily to fund current period and long-term growth programs. Net ll ll l liquid assets stood at $1.1 billion at December 31,1980.
, en
.m s er,
,m m ao The decrease in cash and marketables was concen-5*7 irited in the U.S. and reflected significantly higher ex.
penditures for additions to domestic based property, plant and equipment. The borrowings increase related mainly to The Statement of Chariges in Financial Position on for;ign affiliate operations where GE's general practice is page 36 presents further information about sources and to utilize local financing for most funding needs, applications of funds.
Working capital, excluding net liquid assets men-tioned above, increased $376 million and consisted princi-Maintaining a sound capital structure is a key element pally of higher customer receivables (up $548 million) and in meeting the Company's financial objective of achieving inventories (up $182 million), partially offset by additions sustained earnings growth and a good return on invest-to accounts payr'"- kr materials and services, and simi-ment. GE's financial planning involves considerable atten-1;r short-term aiw owed to others. The Company's tion to anticipating needs and maintaining a sound rela-tot;l working capital was $2.3 billion at year-end 1980.
tionship between share owners' equity and funds bor.
With respect to receivables, double digit interest rates, rowed from others, both long-and short term. As shown in continuing high inflation, an uncertain economy, and tight-the chart b6low, the ratio of equity to total capital has been (ning in the availability of bank credit created an environ-increased from 73.5% at the end of 1976 to 80.0% at the m;nt which necessitated stronger than usual collection end of 1980.
efforts in 1980. However, the overall condition of receiva-bi;s remains good. Inventory levels in the various product Total Capitallnvested businesses were managed throughout the year in re-sponse to actual and anticipated customer demand, and
,oo q
m y;;r-end balances were at levels consistent with the A
SEpy needs of the business.
?
Over the last five years. the Company's total working l
capital has increased by $704 million, led by additions P.
i i
totaling $1.3 billion of cash ano marketables. Most of the p
so I;tter increase came from internally generated funds.
h 7
Since 1975, net liquid assea have increased by $910 mil-23 lion, after reducing tong-term borrowings by $239 mdlion.
{,
u i
~
This strengthening of the Company's liquidity position has
'on
,m
- is7, im been accomplished by strong emphasis on improving the turnover of those elements of working capital, such as During recent years the Company has been able to customer receivables, which are closely associated with maintain and grow its business from internally generated growth in sales volume. This emphasis will continue.
funds. As profitable opportunities are developed,it is likely Significant amounts of funds aro generated from that additional sources of funds will be needed. GE's strong Company operations, principally through net earr'ings and capital structure and credit ratings should ensure availability non-cash charges against eaminga for depreciation, de-of adequate financial resources for continued growth.
The General E'ectnc Investor 29
Inflation in the U.S. continued at a high level during Supplementary information ertr e *ar "d*
1980, and most economists currently forecast double-digit Effect of Changing Prices
^d" r;tes again in 1981. Your management has stressed r.$r't.o
,fn"a'le'n TEs*
repeatedly the distortion that inflation has on the tradi-an enui,ons...c.oi o.r..nar..rnounisi tional methods of financial reporting. This distortion af*
Sales of products and services fects individuals, companies, and aggregate financial data to customers
$24.959 $24.959 $24.959 on which national policy decisions are based.
The chart below highlights this distortion by compar-Cost of goods sold 17,751 17,904 17.892 ing reported after-tax earnings with real after-tax Selling, general and c rnings for all U.S. nonfinancial corporations for the administrative expense 4.258 4,258 4.258 years 1975 through 1980. Three inflation-related factors Deprectation, depletion and account for the difference between reported earnings and amortization 707 1.052 1.092 rd earnings: underdepreciation, reflecting the shortf all Operating costs 22.716 23.214 23.242 from writing off facilities using acquired rather than re-Ooerating margin 2.243 1,745 1,717 placement costs:" phantom" profits which occur when Other income 564 564 564 1:wer than current costs of inventory output are charged interest and other financial charges (314)
(314)
(314) against revenues; and the loss by more thr.n one-third in Eamings before income taxes 2.493 1.995 1,967 the general purchasing power of a dollar since 1975.
Provision for income taxes (958)
(958)
(958)
Minonty interest (21)
(8)
(8)
Reported and Real Profits of Net earmngs
$ 1514 $ 1.029 $ 1.001
. Nonfinancial Corporations
- amings per share
$ 6.65 $ 4.52 $ 4.40 Effective tax rate 38.4 %
48.0 %
4d.7%
st2s e unam.nc en Share owners' equity at Dec. 31
$ 8.200 $1.5. 377 $12.913 N
(a) In dollars of average 1980 curchasing power ico
, :.$$w -
a
_.. l.} _W.gl s c.n.rm acion This table shows two different ways of attempting to y
_ ~ g~, b%q",-
g remove inflationary impacts from financial results as tradi-
,o y
tionally reported. In both " adjusted for" columns, restate-ments are made to (?) cost of goods sold for the current I58".N cost of replacing inventories, and (2) depreciation for the as cea
- c. m current cost of plant and equipment. The column headed ms in ion im im imma "generalinflation" use only a broad index to calculate the restatement while the column headed " current costs" As reported, the aggregate after tax earnings of all uses data more specifically applicable to GE.
U.S. nonfinancial corporations grew each year except for The restatements to cost of goods sold are relatively c small decrease in 1980. The average annual growth rate sm:llt for GE because extensive use of last-in, first-out ts reported since 1975 was about 13%
inventory accounting already largely reflects current costs However, af ter adjustment for inflation, real earnings in in the traditional earnings statement. However, restate-f 980 were lower than any other year during the period, and ments to depreciation, which allocates plant and equip-actually have declined sInce f 975 at an average rate of about ment costs to expenses over time, are relatively large be-2% per year.
cause of the high rate of inflation, particularly in the last These data indicate that corporations, just like individ-three years. This is because traditional reporting of depre-urls, are suffering from the pernicious effects of inflation. It ciation based on original cost does not adequately reflect is of vitalimportance to all Americans that intelligent and higher prices for replacement of productive capacity of forceful action be taken to begin the long and arduous task fixed assets which were purchased a number of years of removing the main controllable causes of inflation -
ago. Both of these methods of adjusting for inflation result growth of the public sector at the expense of the private in lower earnings than traditionally reported.
sector accompanied by burgeoning federal deficits and Significantly, because inflation adjustments are not al-nonproductive regulation.
Iowable for tax purposes, the "real" tax rate was about 10 points higher than in traditional statements.
Your Company's financial results are not immune to Your management believes the " current cost" method th; distorting effects of inflation. Financial data elsewhere is more representative of GE's results, but emphasizes in this Annual Report, including the audited financial state-the considerable subjectivity involved in the calculations.
m;nts, are presented using the traditional basis of finan-These types of adjusted data are likely to be more ci;l teporting which does not fully identify the effects of usefulin reviewing trends over a period of time, rather inflation. The table at upper right presents information than in making comparisons of restatements for any one which supplements the traditional financial statemenis in period or in specific ana!yses of one period compared with order to gauge the effect of changing prices on results for another. GE's after-tax earnings on the traditional basis of 1980.
accounting have been higher each year from 1976 through 30 Annual Report 1980
1980. Since 1975, a recession year like 1980, the averag 3 Another Important hedge against inft:ti:n ov;r th3 annual growth rate for earnings as reported was about long term is represented by the mineral resource assets of 16%. Using the " current cost" method of removing the the Company. Neither traditional nor inflation-adjusted eff: cts of inflation, earnings were as depicted on the green methods of measuring financial results can adequately brrs in the chart below. This shows a pattern similar to portray the value of unique, non-reprodue:ble mineral re-C:mings as reported on the traditional basis, with an aver-source assets. Some measure of the significance of these age annual growth rate since 1975 of about 24%.
assets is conveyed by statistical data of General Electnc's wholly owned, consolidated affiliate, Utah International.
Coking coalis mined by a Utah affiliate, Utah Devel.
Atter Tax Earnings of General Electric opment Company (UDC). UDC mines and exports coking Adjusted for Current Costs coal from five mines under Icng-term renewable Special Coal Mining Leases granted by the state of Queensland, suw m e,,,uo, Australia. At December 31,1980, UDC's share of present export entitlements under these feases amounted to 414.7 g
s cercom um E
m M""
million metric tons of coking coal. Total proved reserve quantities of the leased areas exceed current export
]
7" entitlements. Certain conditions exist under which export E<
i i
entitlements may be increased. The degree to which additional reserves could be mined would depend on com-
=v
=
I mercial feasibility and obtaining additional export entitfe-2 ments. Fourteen percent of the amount presently available g
gg m
.m son i,7s
- is7,
.no However, the purchasing power of a dollar in 1980 had Utah has steam coal reserves at several locations in diminished by more than one-third since 1975. To reflect the United States. In the West. Utah has steam coal re-this deterioration of the dollar's purchasing power, the blue serves at three principallocations: the Navajo Mine, held birs in the chart express current cost earnings for the under long-term lease from the Navajo Indian Tribe in New years since 1975 in dollars of 1975 purchasing power.
Mexico; the Trapper Mine in Colorado; and the San Juan Even on this basis, the data indicate a real average annual Mine in New Mexico. For a number of years, Utah had growth rate in earnings since 1975 of about 14%.
mined coal at the San Juan Mine on a contract basis but General Electric's real annual growth rate of 14% in earn-acquired the coal feases in December 1980. Total proved Ings since 1976 contrasts with the trendin realearnings for and probable reserves at these locations aggregated the aggregate of allU.S.nonfinancialcorporations. As 1,464 million tons at year end 1980. Twenty-two percent st'own on page 30, aggregate earnings for all U.S. nonfinan-of these reserves are currently committed underlong-term cial corporations declined during the 1975 1980 period at an sales contracts.
average rate of about 2% per year.
In '980 Utah acqiered prcperties in Kentucky and Dea ling with inflation as it affects your Company re-West Virginia which contain 360 million tons of proved and quires identifying the distorting effects of inflation, under-probable reserves, primanly steam coal. These reserves standing them, recognizing them in business planning, are under development and commercial production is ex-and managing assets and operations so as to overcome pected to begin on a limited basis during 1981.
th3 effects of inflation.
The Company is conducting an internal program titled cos; Year ended Decernber 31 Effectively Coping with inflation. This program helps par.
(Quantitres in milhonsi 1980 1979 1978 ticipants to understand chronic high inflation, realize how it distorts financial data, and learn how to minimize the im-Coking coal (UDC share in me pact. More than 3,000 key managers and professionals 3h pd )
13.1 13.8 13.0 p;rticipated in this program through 1930.
Average once metric ton (b)
$51.09
$48.39
$47.78 Effective asset management through differentiated steam coal (tens)(c) capital resource allocation is especially important in Shipoed (a) 10.5 8.8 7.1 coping with inflation. Investment in modern plant and Average pnce. ton
$ 7.82
$ 7.09
$ 6.03 equipment provides a direct effect on operations by im-(a) Quantities shipped about the same as 1978 30 production, proving productivity in the face of escalating costs. The (b) Represents average onces publisned by an agency of the Australian govemment smce July 1978 for Queenstand Company's commitment to improving productivity is dem.
onstrated by substantial increases in expenditures for new (c) bxcud si[n ne Drfor tNtah acquinng the coal an plant and equipment during recent years in addition, stra-leases in December 1980.
tegic emphasis is plEced on those business opportunities having inflation protection characteristics. As one exam-GE's principal copper resource is the wholly owned pla, General Electric Credit Corporation owns over 55 bil.
Island Copper Mine in British Columbira, Canada. Esti-mated reserves at the end of 1980 contain approx-tion of assets leased to others. Many of these assets offer significant potential gains on residual values after expira-imately 183 million tons of ore with a grade of approx-imately 0.48% copper. This mine also produces gold.
tion of the leases.
The General Eectnc investor 31
)
r l
silver, molybdenum, and rhenium as by products. Fifteen 1980 dollar purchasing power equivalent of $2,468 to percent of the copper ore reserves are presently commit-value the asset and calculate depreciation charges. Simi-
)
ted under long term sales contracts. These contracts ca.,
larly, the 1979 purchases of non LIFO inventory sold in
- for sales based on London Metal Exchange prices.
1980 would be accounted for at their equivalent in terms of 1980 dollars, rather than in terms of the actual number of totend copper Mine year ended Decemser at dollars spent. Using this method, earnings for 1979 in (Ouantities in thousands) 1980 1979 1978 share owners equity at December 31,1979, was $11,845
.Or:) milled (tons) 15.192 14.705 15,653 million.
Average cercent recovery 85.2*e 87.5 %
86.6 %
" Adjusted for current costs" refers to information pre-pared using a third approach to inventory and property, s id a 110.305 110.309 111.672 plant and equipment transactions. In this case, rather than Average price per pound cf copper restating to dollars of the same general purchasing power,
-copper
$ 0.98
$ 0.93
$ 0.64 estimates of specific current costs of the assets me used.
-by-products 0.65 0.43 0.20 Principal types of information used tc adjust for changes in
(:) QuanGlies sold about the same as 1978 80 production.
specific prices (current costs) are: for inventory costs, G E-generated indices of price changes for specific poods and Technical notes. The offect of changing prices on General services; and for property, plant and equipment, externally Electric as set forth on page 30 has been prepared in accor-generated indices of price changes for major classes of dance with Financial Accounting Standards Board (FASB) assets. Data for mineral resource assets have been ad-requirements. Information in the following table presents justed by applying internally generated Indices to reflect tdditional data in accordance with FASB requirements.
current costs. Adjustments for oil and gas properties are based on industry indices.
Current cost Information in average At December 31,1980, the current cost of inventory dollars of 1980 purchasing power (s) was $5,701 million, and of property, plant and equipment on m. mons oncept per.eare amounts)
Pur.
was $8,797 million ($5,251 million and $7,004 million, re-spectively, at December 31,1979). In dollars of average Not c nors' met e
earn-equity Earn-om-once gain 1980 purchasing power, estimated current costs applica-seios mgs ebi cee atib> inns ibi denas tee. 31 ciossuel ble to such assets increased during 1980, or during the
- 980 $24.959 $1.001 $12.913 $4.40 $2.95 $59 $(198) part of the year the assets were held, by approximately 1979 25,493 1.119 12.659 4.93 3.12 54 (237)
$1,356 million, which was $196 million less than the 1978 24.819 1,092 12.508 4.79, 3.16 57 (145)
$1,552 million increase which could be expected because 1977 23.817 1,001 12.0S5 4.40 2.86 66 (69) of generat inflation. The comparable increase for 1979 in 1976 22,717 885 11,947 3.92 2.46 79 (23) dollars of average 1980 purchasing power was approxi-1975 21.590 479 11.414 2.13 2.45 68 22 mately $1,26* million, which was $373 million less than (a) Average 1980 dollars, using the U.S. Consumer Pnce Index the $1,634 million increase which could be expected b6-(1967 - 100):1975-161.2;1976-170.5;1977-181.5; cause of generalinflation.
1978-195.4; 1979-217.4; and 1980-246.8.
In presenting results of either of the supplementary (b) Current cost basis.
accounting methods for more than one year, real trends (c) On net monetary items.
are more evident when results for all years are expressed Proper use of supplementary information concerning in terms of the general purchasing power of the dollar for a ihm effect of changing orices requires an understand lng of designated period. Results of such restatements are gen-c;rtain basic concepts and definitions.
erally called " constant dollar" presentations. In the six-In the table on page 30, "as reportsd" refers to infor-year presentations shown at left, dollar results for earlier mrtion drawii directly frcm the financial statements and periods have been restated to their equivalent number of notes on pages 34 to 45. This information is prepared constant dollars of 1980 general purchasing power (CPI-U using generally accepted accounting principles which rern basis).
der an accounting based on the number of actual dollars Because none of these restatements is allowable for involved in transactions, with no recognition given to the tax purposes under existing laws, income tax amounts are fact that the value of the dollar changes over time, the same as in the traditional statements (but expressed in
" Adjusted for general inflation" refers to informa-constant dollars),
tion prepared using a different approach to trar'sactions All average annual growth rates in this Report use the Mvolving inventory and property, plant and equipment as.
"least squares" method of calculation.
sets. Under this procedure, the number of dollars involved There are a number of other terms and concepts l
In transactions at different dates are all restated to equiva-which may be of interest in assessing the significance of l
lent amounts in terms of the general purchasing power of the supplementary information shown. However,it is man-th3 dollar as it is measured by the Consumer Price Index agement's opinion that the basic concepts discussed for all Urban Consumers (OPI U). For example, $1,000 above are the most significant for the reader to have in inv:sted in a building in 1967 would be restated to its mind while reviewing this information.
32 Annual Report 1980
Report of management i
T;the Share Owners of General Electric Company is composed solely of Directors from outside the Com-Th2 financial statements of General Electric Company and pany, maintains an ongoing appraisal of the effectiveness consolidated affiliates are presented on pages 34 through of audits and the independence of the public accountants.
45 of this Annual Report. These statements have been The Committee meets periodically with the public account-pr; pared by management and are in conformity with gen-ants, management and internal auditors to review the errily accepted accounting principles appropriate in the work of each. The public accountrnts have free access to circumstances. The statements include amounts that are the Committee, without managert Int present, to discuss b: sed on our best estimates and judgments. Financial in-the results of their audit work and their opinions on the formation elsewhere in this Annual Report is consistent adequacy of internal financial controls and the quality of with that in the financial statements.
financial reporting. The Committee also reviews the Com-General Electric maintains a strong system of internal pany's accounting policies, intemal accounting controls, finrncial controls and procedures, supported by a staff of and the Annual Report and proxy material.
corporate auditors and supplemented by resident auditors The Company has long recognized its obliwation to loc:ted around the world. This system is designed to pro-conduct its aff airs in an ethical and socially responsible vida reasonable assurance, at appropriate cost, that as-manner. Its commitment to these objectives is reflected in s;ts are safeguarded and that transactions are executed key Company policy statements covering among other in accordance with management's auttiorization and re-things, potentially conflicting outside business interests of corded and reported properly. The system is time-tested, Company employees, compliance with antitrust laws and innovative and responsive to change. Perhaps the most proper conduct of domestic and international business important safeguard in this system is the f act that the practices. It is not always possible to ensure that all em-Company has long emphasized the selection, training and ployees fully understand the importance of complying with d ;velopment of professional financial managers to imple-the specific it. tent and spirit of these policies. When devia-m;nt and oversee the proper application of its internal tions are detected or otherwise reported, the Company will controls ano the reporting of management's stewardship continue to act in a respcnsible manner with respect to ci corporate assets and maintenance of accounts in con-appropriate disclosure aad reporting. Additionally, your formity with generally accepted accounting principles.
management will continue efforts to create a strong com-The independent public accountants provide an ob-pliance environment for the ethical conduct of domestic betive, independent review as to management's dis-and international business activities.
Chrrge of its rosponsibilities insof ar as they relate to the M
fiirness of reported operating results and financial condi-dD tion.They ctiain and maintain an understanding of GE's accounting and financial controls, and conduct such tests Seni r Vice President Chairman of the Board and related procedures as they deem necessary to arrive Finance and Chief Executive Ctficer at an opinion on the fairness of Jnancial statements.
The Audit Committee of the Board of Directors, which February 20,1981 Report of independent certified public accountants 1
TJ Share Owners and Board of Directors of in our opinion, the aforementioned financial state-General Electric Company ments present fairly the financial position of. General We have examined the statement of financial position of Electric Company and consolidated affi:iates at Dmmber G:neral Electric Company and consolidated affiliates as 31,1980 and 1979, and the results of their operations and of December 31,1980 and 1979, and the related state-the changes in their financial position for each of the three m:nts of earnings, retained earnings and changes in fi-years in the period ended December 31.1980,in conform-n:ncial position for each of the three years in the period ity with generally accepted accounting principles applied ended December 31,1980. Our examinations were made on a consistent basis.
in accordance with generally accepted auditing standards, gM M[4fM d ///I d d d and accordirigly included such tests of the accounting rec-erds and such other auditing procedures as we considered Peat. Marwick. Mitchell & Co.
n:cessary in the circumstances.
345 Park Avenue. New Ycrk, N.Y.10154 Feeruary 20.1981 The General E!ectric investor 33
Statement of earnings General Eiectnc Company and consolicated af'iliares For the years ended Decemoer 31 (In millions) 1980 1979 1978 Sales Sales of products and services to customers (note 1)
$24,959
$22,461
$19,654 Operating Cost of goods sold 17,751 15,991 13,915 costs Selling, general and administrative expense 4,258 3,716 3,205 Depreciation, depletion and amortization 707 624 576 Operating costs (notes 2 and 3) 22.716 20.331 17.696 0;,erating margin 2,243 2,130 1,958 Otherincome (note 4) 564 519 419 Interest and other financial charges (note 5)
(314)
(258)
(224)
Earnings Earnings before income taxes and minenty interest 2,493 2,391 2,153 Provision forincome taxes (note 6)
(958)
(953)
(894)
Minority interest in earnings of consolidated affiliates (21)
(29)
(29)
Net earnings applicable to common stock
$ 1.514
$ 1.409
$ 1.230 Earnings per common share (in dollars) (note 7)
$6.65
$6.20
$5.39 Dividends declared per sommon share (in dollars)
$2.95
$2.75
$2.50 Operating margin as a percentage of sales 9.0%
9.5%
10.0%
Net earnings as a percentage of sales 6.1 %
6.3%
6.3%
Statement of retained earnings General Electnc Company and consolidated affiliates For the years ended December 31 (in millions) 1980 1979 1978 Retained Balance January 1
$6,307
$5,522
$4,862 earnings Net earnings 1,514 1,409~
1,230 Dividends declared on common stock (670)
(624)
(570)
Balance December 31
$7,151
$6.307
$5.522 Th0 information on pages 33 and 37 45 is an integral part of these statements.
34 Annual Aeoort 1980
Ctatement of financial position General Electnc Company and consolidated affiliates 1980 1979 At Decemeer 31 on mdisons)
Assets Cash (note 8)
$ 1,601
$ 1,904 Marketable securities (note 8) 600 672 Current receivables (note 9) 4,339 3,647 inventories (note 10) 3.343 3,161 Current assets 9,883 9,384 Property, plant and equipment - net (note 11) 5,780 4,613 investments (note 12) 1,820 1,691 Other assets (note 13) 1.028 956 Total assets
$18.511
$16,644 Llabilities Short-term borrowings (note 14)
$ 1,093 871 and equity Accounts payable (note 15) 1,671 1,477 Progress collections and price adjustments accrued 2,084 1,957 Dividends payable 170 159 Taxes accrued 628 655 Other costs and expenses accrued (note 16) 1.946 1,753 Current liabilities 7,592 6,872 Loniterm borrowings (note 17) 1,000 947 Otherliabilities 1,565 1,311 Tetalliabilitios 10,157 9.130 Minority interest in equity of consolidated affiliates 154 152 Preferred stock ($1 par value,2,000,000 shares authorized; none issued)
Common stock ($2.50 par value; 251,500.000 shares authorized: 231,463,949 shares issued 1980 and 1979) 579 579 Amounts received for stock in excess of par value 659 656 Retained earnings 7.151 6.307 8,389 7,542 Deduct common stock held in treasury (189)
(180)
Total share owners' equity (notes 18,19, and 20) 8.200 7.362 Totalliabilities and equity
$18.511
$16.644 l
Commitments and contingent liabilities (note 21)
The information on pages 33 and 37-45 is an integral part of this statement.
The General E!ectnc Investor 35
Statement of changes in financial position General E!ec :c cempany and consolidated affiliates For the years ended Decemcor 31 On millions) 1980 1979 1978 Source of From operations funds Net earnings
$1,514
$1,409
$1,230 Depreciation, depletion and amortization 707 624 576 Investment tax credit deferred-net 56 45 25 Income tax timing differences 63 (37) 32 Earnings retained by nonconsolidated finance affiliates (22)
(17)
(16)
Minonty interest in earnings of consolidated affiliates 21 29 29 2.339 2,053 1.876 increase in long term borrowings 122 50 96 Newlyissued common stock 3
Disposition of treasury shares 136 148 190 Increase in current payables other than short-term borrowings 498 786 570 Decrease in investments 24 Other-nel 143 101 150 Total source of funds 3.238 3.138 2.909 Application Additions to property, plant and equipment 1,948 1,262 1,055 of funds Dividends declared on common stock 670 624 570 Increase in investments 129 281 Reduction in long-term borrowings 69 97 386 Purchase of treasury sharee 145 156 196 Increase in current receivables 692 358 306 increase in inventories 182 158 399 Total application of funds 3.835 2,936 2.912 Netchange Net change in cash, marketable securities and short-term borrowings
$j5g)
$ 202 (3)
Anal sisof Increase (decrease) in cash and marketable securities
$ (375)
$ 113
$ 185 not c ange Decrease (increase)in short term borrowings (222) 89 (188)
Increase (decrease) in not liquid assets
$ (597)
$ 202 (3)
The information on pages 33 and 37 45 is an integral part of this statement.
36 Annual Recort 1980
Summary of significant artization of prior s:rvic2 iiabiliti;s ov:r a p;riod of 20 years are being charged to operating expenses currently.
accounting POliCIOS Investment tax credit The investment tax credit is recorded by the "deferraf method" and is amortized as a reduction of the provision for taxes over the lives of the facilities to which the credit applies, rather than being " flowed through" to income in ea@ asset is acqM Basis of consolidation Inm es The financial statements consolidate the accounts of the staMah au maMachg Meto@sluaM in N par:nt General Electric Company and those of all major-am valud m a lasM WsW, m E, basis. Manw ity-owned and controlled companies (" affiliated compa-amg inm%s oMe N M am genmaMaW nies"), except finance companies whose operations are m a &sNn &sW, m E, basis. VaWadms am basd nct similar to those of the consolidated group. All signifi-on the cost of materia!, direct labor and manufacturing cant items relating to transactiuns among the parent and 9. head, and do not exceed net realizable values. Cer-rffiliated companies are eliminated from the consolidated ain inM mandaMg gnses am darged MW stat:ments' to operating cests during the period incurred, rather than The nonconsolidated finance companies are included 9 '"
in the statement of financial position under investments Mining inventories, which nclude principally mined i
and are valued at equity plus advases. In addition, com-re and coal, metal concentrates and mining supplies, are p:nies in which GE and/or its consolidated affiliates own statM aW hw of amage cost m mah he cosW 20% to 50% of the voting stock (" associated companies")
ne sMchsM N, ad M W cosM ars included under investments, valued at the appropriate msisung d lah pMasd sWes ad seWes, and sh;re of equity plus advances. After tax earnings of non-depreciation, depletion and amortization of property, plant consolidated finance companies and associated compa-a ni;s are included in the statement of earnings under other Po fant and equipment Manuf acturing plant and equipment includes the original nonconsolidated uranium mining company (see cost of land, buildings and equipment less depreciation, not212) is also included under investments and is valued which is the estimated cost consumed by wear and obso-r.~t lower of cost or equity, plus advances.
lescence. An accelerated depreciation method, based principally on a sum of-the-years digits formula,is used to ha ompany and its consolidated affiliates record a record depreciation of the original cost of manufacturing transaction as a sale only when title to products passes to plant and equipment purchased and installed in the U.S.
th] customer or when services are performed in accord-s@segeMo N,Wst mandacturir g plant and cnc? with contract terms.
equipment located outside the U.S. is cepreciated on a Vacation expense straight-line basis. If manufacturing plant and equipment Most employees earn credits during the current year for is s@cMo abnsmal emodc m@ns m @soMs-vacitions to be taken in the following year. The expense cence, addi6cnal depreciat,on is provided. Expenditures i
for this liability is accrued during the year vacations are for maintenance and repairs of manufacturing plant and camed rather than in the year vacations are taken.
equipment are charged to operations as incurred.
Pensions The cost of mining properties includes initial expendi-Invistments of the General Electric Pension Trust, which tures and cost of major rebuilding projects which substan-funds the obligations of the General E!ectric Pension Plan, tially increase the usefullives of existing assets. The cost are carried at amortized cost plus programmed apprecia-of mining properties is depreciated, depleted or amortized tion in the common stock portfolio. The funding program over the usefullives of the related assets by use of unit-of-and Company cost determination for the Pensien Plan use production, straight-line or declining-balance methods.
6% as the estimated rate of future Trust income. Trust Mining exploration costs are expensed until it is deter-income includes recognition of appreciation in the com-mined that the development of a mineral deposit is likely to i
mon stock portfolio on a systematic basis which does not be economically feas,ble. After this determination is made, i
l giva undue weight to short-term market fluctuations. Pro-all costs related to further development are cepitalized.
grammed appreciation will not be recognized if average Amadzah of sumosts begins upon commemd c;rrying value exceeds average market value, calculated of production and,s over ten years or the productive life of i
on a moving basis over a multiyear period, the property, whichever is less.
Changes in prior service liabilities of the Plan are am-Oil and gas properties are accounted for by use of the ortized over 20 years. Net actuarial gains and losses are ost m e o d l
cmortized over 15 years.
Costs of a separate, supplementary pension plan, pri-mirily affecting long-service professional and managerial cmployees, are not funded. Current service costs and am-l TI e General Eectnc investor 37
Notes to financial statements ciation of common stock was not exceeded in any year.
Condensed information for the General Electnc Pen-sion Trust appears below. Prior year as well as current-year data are presented in accordance with new standards issued in 1980 by the Financial Accounting Standards Board (FASB).
General E!ectric Pension Trust
- 1. Sales Change in net assets at current value Approximately one-eighth of sales were to agencies of the on maisonsi ro, tr e year 1980 1979 1978 U.S. government, which is the Company's largest single Net assets at January 1
, $4.968
$4.202
$3.734 customer. The principal source of 'hese sales was the pan contnb t o s 4
3 31 Technical Systems and Materials segment of the Com-3 p_ ny S hshss.
Investment income 435 383 312 ensions pad (254 (225)
(2 W
- 2. Operating costs Unrecognized,)ortion of Operating costs by maior expense categones are shown Delow:
change in current value 779 173 (43) on minions:
1980 1979 1978 Net assets at December 31
$6.418
$4.968
$4 202 Employee compensation.
including benefits S 9.196
$ 8.286
$ 7,401 Net assets at current value Matenals. supplies, ser-d,eninions: Decemeer a t 1980 1979 1978 vices and other costs 12.696 It320 9.867 ankguarantees Depreciation, depletion S 44
$ 118
$ 93 and amortization 707 624 576 Corporate conds and netss 727 496 340
- [e*c'u ity and t os on Real estate and mortgages 625 713 725 income 299 259
$51 Common stocks and other increase in inventones equity secunties 4.181 3.193 2.726 dunng the year (182)
(158)
(399)
- 5. r77 4.520 3.884
$22.716
$20.331
$17.696 Cash and short term investments 553 371 240 Supplemental details are as follows:
r ent value of net assets
$6.4
$4.968
$4.2 on minions 1980 1979 1978 Carrying va;ue of net M:intenance and repairs
$784
$775
$672 assets
$5.593
$4.922
$4.329 Company funded research and development 760 640 521 The actuarial present value of accumulated plan ben-Social Secunty taxes 484 471 397 efits for the General Electric Pension Plan and the supple-Advertising 315 282 247 mentary pension plan together represent over 90% of ac-Mineral royalties and cumulated pensicn plan benefits for General Electric and export duties 80 82 79 its consolidated affiliates. These present values have Foreign currency translation gains, after recognizing re-been calculated using a 6% interest rate assumption as of 11ted income tax effects and minanty interest share, were December 31 for each of the years in the table below. The
$40 million in 1980 and $12 million in 1979 and 1978.
table also sets forth the total of the current value of Pension Trust assets and the relevant accruals in the
- 3. Pensions Company's accounts.
Total pension costs of General Electric and consolidated affiliates were $478 million in 1980, $413 million in 1979, General Electric Pension Plan and Supplementary Pension cnd $381 million in 1978. General Electric and its affiliates Plan h1ve a number of pension plans. The most significant of on maonsi oecember U 1980 1979 1978 these plans is the General Electric Pension Plan (the Estimated actuanal present
" Plan"), in which substantially all employees in the U.S.
valueof accumulated cre participating. Approximately 80,800 persons were re.
plan benefits:
vested benefits
$6.027
$5.426
$4.732 civing benefits at year end 1580 (75,700 and 72,100 at Non vested benefits 415 382 331 y:ar end 1979 and 1978, respectively).
Total benefits
$6.442
$5.808
$5.063 Pension benefits under the Plan are funded through the General Electnc Pension Trust. Eamings of the Trust, Current value of trust assets p s accmais
$6.580
$5W5 R273 including the programmed recognition of common stock appreciation, as a percentage of the carrying value of the For pension plans not included above, there was no portfolio, were 8.4% for 1980 and 1979, and 7.8% for significant difference oetween a.: cumulated benef!ts and 1978. The limitation on recognition of programmed appre-the relevant fur d assets plus accruals.
38 Annual Report 1980
The f;regoing amounts cra b; sed on n:w FASB stand-in the effect of timing diff;rences result principally from fluc-ards which differ from those used by the Company for tuations in foreign eamings and tax rates, and from recog-funding and cost determination purposes. Based on the nizing in the current year for tax payment purposes the actuarial method used by the Company, and with assets at results of transactions in Australia recorded for financial c:nying value, unfunded and unamortized liabilities for reporting purposes in other years.
the two principal pension plans totaled $964 million, investment credit amounted to 592 million in 1980, com-
$ t,082 million and !882 million at year-end 1980,1979 pared with $76 million in 1979 and $51 million in 1978. In and 1978, respectively.
1980 $36 million were included in net eamings, compared An increase in pensions of retired employees effec-with $31 million in 1979 and $26 million in 1978. At the end tiva February 1,1981, will increase the actuarial present of 1980, the amount still deferred and to be included in net vdue of accumulated vested benefits by an estimated earnings in future years was $262 million.
$196 million.
Effect of timing differences on U.S.
- 4. Cther income federalincome taxes on nisons:
1980 1979 1978 y'{'ol:ecreasenn orows.en for,ncome taxes 1980 1979 1978 Net eamings of GE Credit Corporation
$115 5 90
$ 77 Tax over book decreciation 5 48 S 23
$ 26 income from:
Undistnbuted eamings of affiliates Marketaole secunties and bank and associated companies 29 (2) 8 deposits 229 229 140 Margm oninstallment sales 1
(10)
(10)
Customer financing 72 70 49 Prov sion for warranties (46)
(36)
(31)
Royalty and technical agreements 52 50 44 Other-net g)
(6)
(6 Associated companies and non-3 34-3]) $]))
consolidated uranium mining affiliate 22 11 34 Other investments:
The cumulative net effect of timing differences has re-suited in a deferred-tax asset which is shown under other y ends O
Cther sundryitems 40
__38 46 assets.
$564
$5 9 5419 Reconciliation from statutory to effective 1980 1979 1978
- 5. Interest and other financial charges U.S. federal statutory rate 4.0%
46.0 %
43.0 %
Int; rest capitalized on major property, plant and equip-Reduction in taxes resulting from:
ment projects in 1980 was $21 million.
varying tax rates of consolidated affiliates (including DISC)
(4.7)
(3.3)
(3.4)
- 6. Provision for income taxes inc!usion of earnings of the Credit Corporation in before-tax on milens) 1980 1979 1978 neome en an after-tax casis (2.1)
(1.7)
(1.7)
U.S. federalincome taxes:
Investment cred:t (1.5)
(1.3)
(1.2)
Estimated amount payable
$574
$599
$590 income tax at capital gains rate (0.1)
(0.6)
Effectof timingdifferences 14 (31)
(13)
Other-net
_0_8 OJ
_0_4 investment credit deferred-net 56 45 25 Effective tax rate 3_8_4%
3_1_9%
41 5 %
9 644 613 6n2 Foreign income taxes:
Based on the location of the component furnishing goods Estimated amount payable 238 323 221 or services, domestic income before taxes was $1,854 Effectof timingdifferences 39 (6) 45 million in 1980 ($1,706 million in 1979 and $1,592 million 277 317 266 in 1978). The corresponding amounts for foreign-based Other(pnnetcally state and local operations were $639 million, $685 million and $561 mil-income taxes) 37 23 26 lion in each of the last three years, respectively. Provision
$958
$953
$894 forincome taxes is determined on the basis of the jurisdic-tion imposing the tax liability. Therefore, U.S. and foreign All General Electric consolidated U.S. federal income tax taxes shown at the left do not compare directly with these
~
retums have been c!csed through 1972.
segregations.
Provision has been made for federal income taxes to be paid on that portion cf the undistributed eamings of affiliates
- 7. Earaings per common share and associated companies expected to be remitted to the Earnings per share are based on the average number of parent company. Undistnbuted eamings intended to be rein-shares outstanding. Any dilution which would result from vested indefinitely in affiliates and associated companies to-the potential exercise or conversion of such items as stock taled $1,111 million at the end of 1980, $944 miliion at the options or convertible debt outstanding is insignificant end of 1979, and $815 million at the end of 1978.
(less than 1o in 1980,1979 and 1978).
Changes in estimated foreign income taxes payable and 7Pe General Eectnc Investor 39 l
- 8. Cash and markt !able securities
- 12. Investments Deposits restricted as to usage and withdrawal or used as iws Decemeer 31 1980 1979 p;rtial compensation for short-term borrowing arrange-Nonconsolidated finance affiliates 5 938
$ 824 ke ble se u i i s (none of which are equity securi-aff$a"te 188 157 ti:s) are carried at the lower of amortized cost or market Miscellaneous investrnents (at cost):
v;lue. Carrying value was substantially the same as mar-Govemment and govemment-ket value at year end 1980 and 1979.
guaranteed secunties 187 233 Other 136 148
- 9. Curront receivables 323 381 onmm. cess oecomeer31 1980 1979 rketable equity secunties 44 44 Customers' accounts and notes
$ 3.816
$3.254 Associated companies 342 301 Assoctated companies 25 36 Less allowance for fosses (15)
(16)
Nonconsolidated affiliates 17 7
$1.820
$1.691 Other 584 439 Condensed consolidated financial statements for the 4,442 3,736 principal nonconsolidated finance affiliate, General Less allowance for losses (103)
(89)
Electric Credit Corporation (GECC), follow. During the
$ 4.339
$3.647 normal course of business, GECC has transactions with the parent General Electric Company and certain of its
, J. Inventeries consolidated affiliates, and GECC results are included in General Electric's consolidated U.S. federal income tax on m.iiionsi cecemeer 31 1980 1979 return. However, virtually all products financed by GECC Raw matenals and work in process
$ 2.082
$1,943 are manufactured by companies other than General Finished goods 961 966 Electric. More detailed information is available in GECC's tJnbilled shipments 300 252
$ 3.343
$3.161 1980 Annual Report, copies of which may be obtained by writing to: General E!ectric Credit Corporation, P.O. Rox About 84% of totalinventories are '/alued using the LIFO 8300, Stamford. Connecticut 06904.
m;thod ofinventory accounting.
If the FIFO method of inventory accounting had been General Electric Credit Corporation used to value all inventories, they would have been Financial position
$2.240 million higher than reporti::d at December 31 Un moonsi cecomeer 31 1980 1979 1980 ($1,950 million higher at year-end 1979).
Cash and marketable secunties 5 531
$ 374 Receivables:
- 11. Property, plant and equipment un minims:
1980 1979 Deferred income (1.380)
(1.124)
Major classes at December 31:
6,779 6.356 Manufacturing plant and equipment Investment in feases 1,643 1.207 Land and improvements
$ 139
$ 125 Sundry receivables 197 141 Buildings, structures and Total receivables 8,619 7,704 related equipment 2.329 2.098 Allowance forlosses (249)
(231)
Machinery and equipment 6.197 5.314 Net receivables 8.370 7.473 Leasehold costs and manufac-Other assets 443 321 tunng plant under conscuction 453 372 Total assets
$9.344
$8.168 Mineral property, piant and equipment 1.917 1.456 Notes payable:
$11.035
$9.365 Due within one year
$4.425
$3.921 Cost at January 1 5 9,365
$8.328 Long-term -senior 1,984 1,743 Additions 1.948 1.262
- subordinated 400 325 Dispositions (278)
(225)
Otherliabilities 707 631 Cost at December 31
$11.035
$9.365 Totalliabilities 7.516 6.620 Deferred income taxes 876 718 Accumulated depreciation, depletl an and amortization Deferred investment tax credit 21 13 Biltnce at January 1
$ 4,752
$4.305 Caoital stock 658 566 Current year provision 707 624 Additional paid-in capital 12 12 Dispositions (214)
(188)
Retained earnings 261 239 Oth:r changes 10 11 Equity 931 817 Bitnce at December 31
$ 5.255
$4.752 Totalliabilities, deferred tax Property, plant and equipment less depreciation, depletion and amortization at December 31
$ 5.780
$4.613 l
40 Annual Report 1980 I
I General Eleserto Credit Corporellen
- 13. Oth r a: sets.
Cunent and te ned W on mmonei Dec. mew n 1980 1979 j-on mmons: Forine year 1980 ifr79 ~
1978 Long. term receivables
$340
$307 i
Eamedincome
$1,389
$1,102
$ 813 Deformd charges 198 145 Expenses:
Realestate develorment projects 132 81
[
' interest and discount 719 528 337 Recoverable eng noenng costs on i
Operating and government contracts 113 121 1
administrative 451 396 315 Customer financing 103 107
[
Provision forlosses lconses and otherintangibles -not 75
'a2
-receifables 75 69 56 Deferred income taxes 21 98
-other assets 3
(2) 8 Other 46 45 Provision forincome taxes -
26 21 20
$1,028
$956 1.274 1.012 736 Not sammes 115 90 77 Licenses and other intangibles acquired after October j
I j
' t.ess div6dends (93)
(72)
(62) 1970 are being amortized over appropriate periods of Retained eamings at time.
i January 1 239 221 206 Ret mings at
- 14. Short term borrowings l
$ 261
$ 239
$ 221 The averagc balance of short term borrowings, excluding Investment in the nonconsolidated uranium mining af-the current portion of fong term borrowings, was $822 mil-
-[
fili;te consists of investment in a wholly owned affiliate lion during 1980 (calculated by averaging all month-end i
(cstablished in the course of obtaining a U.S. Department balances for the year) compared with an average balance l
cf Justice Business Advisory Clearance Procedure Letter of $705 million in 1979. The maximum balance included in i
in connection with the 1976 Utah merger) to which all of these calculations was $962 million and $727 million at the end of October 1980 and March 1979, respectively The t
i tha then existing uranium business of Utah has been transferred. All common stock of this affiliate has been average effective interest rate for the year 1980 was 18.9%
placed in a voting trust controlled by independent voting and for 1979 was 17.6% These average rates represent trustees. Prior to the year 2000, General Electric and its total short-term interest incurred divided by the average
[
Effiliates may not withdraw the common stock from the balance outstanding. A summary of short-term borrowings voting trust except for sale to unaffiliated third parties.
and the applicable interest rates is shown below.
Directors and officers of the affiliate may not be directors, officers, or employees of General Electric, Utah or of any short-term borrowings of their affiliates. Uranium may not be sold by this affiliate, on moone3 o.come,3i 1980 1979 in tny state or form, to, or at the direction of, General Avneo.
4.ege gy gy
[
Electric orits affiliates.
4 moon,
, moon, All outstanding shares of preferred stock of the ura-Parent notes with trust nium affiliate are retained by Utah as an affiliate of departments
$353 15.05 %
$290 12.62 %
l General Electric. Payment of cumulative quarterly divi-Consondated affiliate r
donds out of legally available funds on this preferred stock bar* borrowings
$39 30.83 389 27.10 t
is mandatory in amounts equal to 85% of the affiliate's net OtherJncluding current aftIr tax income for the previous quarter (without taking
(,**""
201 192 i
tccount of any deduction for exploration expense as de-
$1.093
-$871 fined). Utah, as holder of the preferred stock, must make
_ Parent borrowings are from U.S. sources. Borrowings of loins with up to ten-yehr maturities when requested by the iffiliate, although the aggregate amount of such loans consolidated affiliated companies are p,imarily from for-i need not at any time exceed preferred dividend payments eign sources. Other borrowings include amounts from for the immediately preceding two calendar years, nonconsolidated affiliates of $95 million in 1980 ($65 mil-The estimated realizable value of miscellaneous lion in 1979).
i inytstments was $287 million at December 31,1980 Although the total unused credit available to the Com-l
($350 million at December 31,1979).
pany through banks and commercial credit markets is not l
Marketaoic equity securities are valued at the lower readily quantifiable, informal credit lines in excess of $1.
j of cost or market. Aggregate market value of marketable billion had been extended by approximately 100 U.S.
equity securities was $242 million and $181 million at banks at year end.
l-yrr-end 1980 and 1979, respectively. At December 31, 1980, gross unrealized gains on marketable equity securi-ties were $198 million.
l Investments in nonconsolidated affiliates and associ-ated companies included advances of $180 million at De-I r
ctmber 31,1980 ($123 million at December 31,1979).
The General Electnc investor di
- 15. Accounts payaole Utah International Inc. notes with banks were subject to on mine., e.come.r si iseo is7s average interest rates at year-end 1980 and 1979 of 11.3% and 7.9%, respectively.
Trade accounts
$1.402
$1.259 Borrowings of General Electric Overseas Capital Collected for the account of others 203 172 Nonconso'idated affiliates 66 46 Corporation are unconditionally guaranteed by General
$1.671 51.477 Electric as to payment of principal, premium if any, and interest. This Corporation primarily assists in financing capital requirements of foreign companies in which
- 16. Other costs and expenses accrued General Electric has an equity interest, as well as financ-The balances at year-end 1980 and 1979 included com.
Ing certain customer purchases.
pensation and benefit costs accrued of $703 million and Borrowings include 4%% Guaranteed Debentures
$641 million, respectively.
due in 1987, which are convertible into General Electric common stock at $80.75 a share, and 5%% Sterling < Dollar Guaranteed Loan Stock due in 1993 in the amount of E3.6
- 17. Long-term borrowings million ($9 million), convertible into GE common stock at on mimono siniung tune
$73.50 a share. During 1980 and 1979, General Electric outstanone ove prepayment Overseas Capital Corporation 4%% Guaranteed Bonds Decemoersi isso is79 este oe having a face value and a reacquired cost of $2 million General Electric Cornpany:
were retired in accordance with sinking fund provisions.
~
5%% Notes S 62
$ 69 1991 1972-90 All other long-term borrowings were largely by foreign 5.30% Decentures 70 80 1992 1973 91 and real estate development affiliates with various interest 7%% Debentures 135 149 1996 1977 95 rates and maturities and included amounts due to noncon-I solidated affiliates of $7 million in 1980 and 1979.
Uta i terna ion Inc.:
Notes with banks 37 5 1993 1981 93 Long-term borrowing maturities during the next five 8% Guaranteed Sinking years, including the portion classified as current, are Fund Debentures 15 17 1987 1977-87
$91 million in 1981, $130 million in 1982, $62 million in I
7.6% Notes 28 32 1988 1974-88 1983, $42 million in 1984 and $68 million in 1985. These l
Other 32 25 amounts are after deducting reacquired debentures held General Electric Overseas in treasury for sinking fund requirements.
Capital Corporation:
4%*. Bonds 23 24 1985 1976-84 4%% Debentures 50 50 1987 None 5%% Sterling /
Dollar Guaranteed Loan Stock 9
8 1993 None Other 34 37 All other 217 158
$1,00o
$947 The amounts shown above are after deduction of the face vilue of securities held in treasury as shown below.
Face value of long term borrowings ln treasury on mmionsi December 31 1980 1979 General Electnc Cornpany:
5.30% Debentures
$50
$50 7%% Debentures 35 29 i
8%% Debentures 12 5
General Electnc Overseas Capital j
Corporation:
4%% Bonds 6
7 I
42 AnnualReport1980
- 18. C:mmon st:ck 1980 1979 1980 1979 addition, retained earnings have been in- ~" hy $10 million ($5 million reduction at December 31,1979), which on rninions) tThouunos of snares, common stock issued represents the change in equity in associated companies Balance January 1 and since acquisition.
December 31
$579
$ 579 231.464 231.464 Amounts received for 20, Stock option information st n excess of per Stock option plans, appreciation rights and performance units are desenbed in the Company's current Proxy State-Balance January 1
$656 5658 Gein.(loss) on ment. A summary of stock option transactions during the Csposition last two years is shown below:
of treasury stock 3
(2)
Balance December 31 5659 5656 Stock options n.,,,, e., e.,.
Common stock held in snares sueiect canon Mar =et
'o m en once once tressury Balance January 1
$180
$ 172 3.625 3.428 Balance at January 1, Purchases 145 156 2.684 3,155 1979 4,088.853
$51.37 $47.13 Dispositions:
Options granted 1.023.122 46.25 46.25 Options exercised (98,145) 40.63 50.14 pa s (99)
(124) (1.879) (2.492)
Options surrendered on exer-Employee stock cise of appreciation rights (68.834) 40.52 49.17 ownership plan (16)
(11)
(296)
(213)
Incentive compensa.
Options termmated ii86.068) 50.77 tion plans (7)
(8)
(158)
(152)
Balar.ce at Decemoer 31, Stock options and 1979 4,758.928 50.67 50.63 appreciation nghts (14)
(5)
(275)
(101)
Options granted 98,100 61.50 61.50 Options exercised (273,193) 44.13 56.16 Ip orpo at n loan stock (2)
Options surrendered on exer-cise of appreciation nghts (123,350) 41.93 54.92 Balance December 31 S189
$180 3.699 3.625 Options terminated (157.163) 51.02 At December 31,1980, and December 31,1979, respec.
Balance at December 31, 1980 4.303.322 51.56 61.25 tivIly. 027,765,000 and 227,839,000 common shares w:re outstar, ding. Common stock held in treasury at De-cember 31,1980, included 1,921,706 shares for the de.
The number of shares available for granting additional op-f rred compensation provisions of incentive compensation tions at the end of 1980 was 1,862,756 (1,831,456 at the plins (1,785,656 shares at December 31,1979), These end of 1979).
shires are carried at market value at the time of allotment, which amounted to $96 million and $88 million at Decem.
21, Commitments and contingent liabuities ber 31,1980 and 1979, respectively The liability is re.
Lease commitments and contingent.4 abilities, consisting corded under otherliabilities.
of guarantees, pending litigation, taxes and other claims, Other common stock in treasury, which is carried at in the opinion of management, are not considered to be cost, aggregated 1,777,382 and 1.839,762 shares at De.
material in relation to the Company's financial position.
c;mber 31,1980 and 1979, respectively. These shares tr0 held for future corporate requirements, including distri-butions under employee savings plans, incentive compen-sition awards and possible conversion of General Electric Ov;rseas Capital Corporation convertible indebtedness.
Th2 maximum number of shares required for conversions wIs 736,079 at December 31,1980 (737,725 at Decem-ber 31,1979). Corporate requirements of shares for bene-fit plans and conversions may be met either from unissued shires or from shares in treasury.
During 1978, the balance in common stock issued did n;t change, amounts received for common stock in ex-c ss of par value decreased by $10 million, and the bal-cnce of common stock held in treasury increased by $6 million.
- 19. Retained earnings R;tained eamings at year-end 1980 included approxi-mitely $251 million ($246 million at December 31,1979) representing the excess of earnings of nonconsolidated Effiliates over dividends received since their formation. In l
The Generai Eectnc investor 43
Industry segment information Revenues OnrNilaansi Forthe years endedoecember31 Tota l revenues intersegment sa'es Extemas sa'es andotnerencome 1980 1979 1978 1980 1979 1978 1980 1979 1978 Consumerproductsandservices S 5.599 $ 5.358 S 4.788
$ 201 $ 199 $ 168
$ 5.398 $ 5,159 $ 4,600 NeteamingsofGECreditCorp.
115 90 77 115 90 77 Totalconsumer products and services 5,714 5.448 4.865 201 199 188 5.513 5,249 4.677 Industrial products and com poner,ts 5,157 4,803 4,124 565 508 468 4,592 4,295 3,656 Powersystems 4,023 3,564 3.486 175 210 174 3,848 3.354 3,312 Technicalsystemsandmaterials 7,128 6,061 4,745 258 255 190 6.870 5,806 4.555 Naturalresources 1,374 1.260 1,032 1,374 1.260 1,032 Foreignmulti industryoperations 3,234 2.901 2,767 75 64 55 3,159 2,837 2,712 Corporateitemsandeliminations (1.107) (1.057)
(946) fy) (1.236) (1.075) 167 179 129 Total
$25.523 $22.980 $20.073
$25.523 $22.980 $20.073 Operating orofit Netearnings Forthe rearsended Decameer31 Fortheyears endeuoecember31 1980 1973 1978 1980 1979 1978 Consumerproductsedse vices S 558 5 568 5 574
$ 292 $ 311 $ 300 NeteamingsofGECreadCorp.
115 90 77 115 90 77 Tot:l consumer products and services 673 658 651 407 401 377 industnalproducts andcomponents 568 485 426 315 272 223 Powersystems 194 174 196 141 114 93 Technicalsystemsandmaterials 774 672 545 373 356 278 Naturalresourcos 404 431 372 224 208 180 Foreignmulti-industryoperations 285 241 245 68 65 76 Totalsegmentoperatingprofit 2,898 2.661 2,435 Interest and other financial charges (314)
(258)
(224)
Corporateitemsandeliminations (91)
(12)
(58)
(14)
(7) 3 Total
$ 2.493 $ 2.391 $ 2.153
$ 1.514 5 1.409 $ 1.230 Assets Property,plantandequipment AtCecember 31 Forthe yearsendedDecerrter31 DeDrecation,depletionand Additions amortization 1980 1979 1978 1980 1979 1978 1980 1979 1978 Consumerproductsandservices
$ 2,325 $ 2,157 $ 2.018
$ 238 $ 208 $ 169
$ 133 $ 115 $ 104 investmentinGECreditCorp.
931 817 677 Total consumer products and services 3,256 2,974 2.695 238 208 169 133 115 104 Industr$alproductsandcomponents 2.595 2.329 2.125 224 176 166 109 106 91 Powersystems 2.209 2.135 2.105 129 101 84 91 84 79 Technicalsystemsandmaterials 4.475 3.422 2.683 693 4 84 289 200 163 150 Naturairesouretts 2,109 1,679 1,489 446 201 212 94 83 77 Foreignmulti-industryoperations 2.564 2.259 2,100 161 109 119 66 61 64 Corporateitemsandstiminations 1.223 1.846 1.839 57 23 16 14 12 11 Total
$18.511 $16.644 $15.036
$ 1,948 $ 1.262 $ 1.055
$ 707 5 624 $ 576 Consumer Products and Services consists of major acpliances, General Electric Credit Corporation, a wholly owned noncon-cr conditioning equipment. lighting products, housewares and solidated finance affiliate, engages pnmanly in consumer, com-audio products, television receivers, and broadcasting and ca.
mercial and industrial financing, pnncipally in the U.S. It also blevision services. It also includes service operations for major participates, to a ! esser degree, in life insurance and fire and appliances, air conditioners, TV receivers, and housewares and casualty insurance activities. Products of companies other t!'dn audio products.
GE constitute virtually all procucts financed by GECC.
44 Annual Report 1980
Industrial Products and Components includes components Foreign Multi-industry Operations consists pnncipally of for.
(appliance controls, small motors and electronic components);
eign affiliates whicn manuf acture products pnmanly for sale in industrial capital equipment (construction, automatico and trans-their respective home markets.
portation); maintenance, inspection, repair and rebuilding of I
electric, electronic and mechanical apparatus; and a network of Net earnings for industry segments include allocation of corpo-supply houses offenng products of General Electnc and other rate interest income, expense and other financial charges to par-manufacturers.
ent company components based on change in individual compo-nent average confixed investment. Interest and other financial Power Systems includes steam turbine-generators, gas tur-charges of affiliated companies recognize that such companies bines, nuclear power reactors and nucisar fuel assemblies, generally service their own debt.
transformers, switchgear, meters, and installation and mainte-General corporate expenses are allocated principally on the nanco engineer!ng services.
basis of cost of operations, with certain exceptions and reduc-tions which recogn Ze the varying degrees to which affiliated Technical Systems and Materials consists of jet engines for air-companies maintain their own curporate structures.
cr: ft, industnal and marine applications; electronic and other in addition, provision for income taxes (5958 million in 1980, high-technology products and services pnmanly for aerospace
$953 million in 1979, and $894 mill;on in 1978)is aflocated based applications and defense; materials (engineered plastics, sili-on the total corporate effective tax rate, except for GSCC and cones, industrial cutting matenals, laminated and insulating ma-Natural Resources, whose income taxes are calculated tert :15, and batteries); medical and communications equipment; separately, and time shanng, computing, and remote data processing.
Minority interest ($21 million in 1980 and $29 miilion in bo'h 1979 and 1978)is allocated to operating components having Natural Resources includes the mining of coking coal (princi-responsibility for investments in consolidated affiliatos.
pally in Australia), uraniurt steam coal, iron and copper. In addi-In general, it is GE's policy to pnce internal sales as nearly tion, it includes oil and natural gas production, ocean shipping as practicable to equivalent commercial selling pnces.
(pnmanly in support of mining operations) and land acquisition and development.
Coographic segment information Revenues Onmellons:
Formevoarsended Decameer31 Total revenues intersegment saies Extwaisa:es andoeerincome 1980 1979 1978 1980 1979 1978 1980 1979 1978 United States
$20,750 $18,859 $1ft.443 S 484 $ 467 5 362
$20.266 $18,392 $16.081 Far Eastincluding Australia 1,277 1,183 1,109 355 280 242 922 903 867 Otherareasoftheworld 4,459 3.814 3,270 124 129 145 4.335 3.685 3,125 Eliminationofintracompany transactions (963)
(876)
(749)
(963)
(876)
(749)
Total
$25.523 $22.980 S20.073
- S
- S
$25.523 522.980 $20.073 NetEstnings Assets Foreeyearsenaeacecemeerst Atoecreer 31 1980 1979 1978 1980 1979 1978 UnitedStates S 1,175 S 1,120 $ 961
$13,732 $12,693 $11,410 FarEastincludingAustralia 169 174 170 1.090 842 889 Otherareasoftheworld 181 123 104 3.808 3.207 2.827 Eliminationofintracompany transactions (11)
(5) _
(5)
(119)
(98)
(90)
Total 5 1.514 S 1.409 $ 1.230
$18.511 $16.644 $15.036 Geog sphic segment Information (including allocation of in-U.S. revenues also include royalty and licensing income from come taxes and minonty interest in eamings of consolidated affil-unaffiliated foreign sources, i' tes)is based on the location of the operation fumishing goods Revenues, net earnings and assets associated with foreign or services. Included in United States revenues were export operations are shown in the tabulations above. At December 31, sales to unaffiliated customers of $3,781 million in 1980, $2.772 1980, foreign operation liabilities, minonty interest in ecuity and million in 1979, and $2,571 million in 1978. Of such sales, $2.089 GE interest in equity were S2.562 million, $141 million and million in 1980 ($1,581 million in 1979 and $1,662 million in
$2.195 million, respectively. On a comparable basis, the 1978) were to customers in Europe, Africa and the Middle East; amcunts were 52.101 million, S139 million anc S1.809 mil!!on, and $926 million in 1980 (S741 million in 1979 and $498 million in respectively, at December 31,1979: and $1.910 million $150 1978) were to customers in the Far East including Australia.
million and $1.656 million, respectively, at December 31,1978.
The General Electnc investor 45
Ten year summary (a)
- s..cted ficarciai data (Douar amounts in mmons; per. snare amcunts m dotiars) 1980 1979 1978 1977 1976 Summary of operations Sales of products and services to customers
$24,959
$22.461
$19,654
$17,519
$15.697 Cost of goods sold 17,751 15.991 13,915 12,288 11,048 Selling, general and administrative expense 4,258 3,716 3,205 3,011 2,635 Depreciation, depletion and amortizatiort 707 624 576 522 486 Operating costs 22.716 20.331 17.696 15.821 14.169 Operating margin 2.243 2,130 1,958 1,698 1,528 Other;ncome 564 519 419 390 274 Interest and other financial charges (314)
(258)
(224)
(199)
(175)
Eamings before income taxes and minority interest 2,493 2,391 2,153 1,889 1,627 Provision forincome taxes (958)
(953)
(894)
(773)
(668)
Minonty interest (21)
(29)
(29)
(28)
(28)
Net earnings 5 1.514
$ 1.409
$ 1.230
$ 1.088 931 Earnings per common share (b)
$ 6.65
$ 6.20
$ 5.39
$ 4.79
$ 4.12 Divider'ds declared per common share (c)
$ 2.95 3 2.75
$ 2.50
$ 2.10
$ 1.70 Earnings as a percentage of sales 6.1 %
6.3%
6.3%
6.2%
5.9%
Earned on average share owners' equity 19.5 %
20.2 %
19.6 %
19.4%
18.9 %
Dividends-General Electric 670 624 570 477 333 Dividends-Utah International Inc. (d) 28 Shares outstanding-average (in thousands) (e) 227,541 227,173 227,985 227,154 225,791 Share owner accounts-averago 524,000 540,000 552,000 553,000 566,000 Mrrket price range per share (c)(f) 63-44 551-45 571-431 571-471 591-46 Price / earnings ratio range (c) 97 9-7 11-8 12-10 14-11 Currerit assets S 9,883
$ 9,384
$ 8,755
$ 7,865
$ 6,685 Currentliabilities 7.592 6.872 6.175 5,417 4.605 Working capital
$ 2.291
$ 2.512
$ 2.580
$ 2.448
$ 2.080 Short term borrowings
$ 1,093 871 960 772 611 Long term borrowings 1,000 947 994 1,284 1,322 Minority interest in equity of consolidated affiliates 154 152 151 132 119 Share owners' equity 8.200 7.362 6.587 5.943 5.253 Total capitalinvested
$10.447
$ 9.332
$ 8.692
$ 8.131
$ 7.305 Earned on average total capital invested 17.3 %
17.6%
16.3 %
15.8%
15.1 %
Share owners' equity per common share-year end (b)
$ 36.00
$ 32.31
$ 28.88
$ 26.05
$ 23.18 Total assets
$18,511
$16,644
$15,036
$13,6.97
$12,050 Property, plant and equipment additions
$ 1,948
$ 1,262
$ 1,055 823 740 Employees-average worldwide 402,000 405,000 401,000 384,000 380,000 (a) Unless specifically noted, all years are adjusted to include Utah Inter-(e) includes General E!ectne outstanding average snares or year end national Inc., *nich became a wnolly owned affiliate of General Elec-snares as approonate plus, in 1976 and pnor years, outstanding tnc on Decamber 20.1976, through the exchange of 41.002.034 snares previously reported by Utah multiolied by 1.3. Adjustments snares of General Electnc common stock for all of the outstanding have been made for the two-for-one Utan stock soiit effected in the snares of Utah, form of stock dividends in 1973.
(b) Computed using outstar: ding snares as desenbod in note (e).
(f) Represents high and low market onces as reported on New York (c) For General Electnc common stoc< as reported in the years snown.
stocx Exenarge througn January 23.1976, and as reported on the (d) Renects transactions pnor to mergei date.
Consolidated Tape thereafter.
46 enual Report 1980
4 Cther information ouarterty dividend and stock market information 1975 1974 1973 1972 1971 civicenes common stoca actarea mars icnce range 1960 1979 1980 1979
$14,105
$13.918
$11,945
$10,474
$9,557 Est cuarter 70c ese 557 %-544 550 %-545 %
Second quarter 75 70 52 44%
51Sr 46's 10,210 10.092 8,445 7.381 6.809 ThirJ ouarter 75 70 58 %- 51 %
55tr 49's 2,238 2.240 2,058 1,872 1,686 Founn quaner 75 70 63 51%
52's 45 470 415 372 344 290 The New York Stock Exchange is the pnncipal market on which GE 12.918 12.747 10.875 9.597 8,785 common stock is traded and, as of December 8.1980. there were approx.
1,187 1,171 1,070 877 772 imately 512.282 share owners of record.
174 207 203 207 177 operations by quarter for 19e0 and 1979 (187)
(197)
(143)
(121)
(102) g 3,,,
g 1,174 1,181 1,13C 963 847 per nare amounts in oonarsi suaner cuaner auar er auaner (460)
(458)
(457)
(385)
(333) 1980:
(26)
(18)
(12)
(5)
(4) Sales of products and 688 705 661 573
$ 510 services to custorners
$5.881
$6.197
$5.963
$6.918 Operating margin
$27 556 513 647
$ 3.07
$ 3.16
$ 2.97
$ 2.57
$ 2.30 Net earnings 342 403 358 411
$ 1.60
$ 1.60
$ 1.50
$ 1.40
$ 1.38 Net eamings per 4.9 %
5.1%
5.5%
5.5%
5.3%
common snare 1.50 1.77 1.58 1.80 15.7 %
17.8 %
18.4%
17.5%
17.2%
1878 Sales of products and services to customers 55.082
$5.642
$5.609
$6.128 293 291 273 255
$ 250 Operating margin 470 598 511 551 33 24 14 13 11 Not eamings 303 382 341 383 224.262 222,921 222.631 222,503 221,591 Net eamings per e nwn n snare 1.33 1.69 1.50 1.68 582,000 566,000 543,000 542,000 529,000 521-321 65-30 751-55 73-581 66i-46i Dividend Reinvestment Plan 17 10 19-9 24-17 25-20 26-18 GE share ownee. wnese Company stock is registered in their own names and whose addresses of record are in the United States or its temtories or possessions are eiigiele to particroats in the GE Dividend Reinvest-
$ 5,750
$ 5,334
$ 4,597
$ 4,057
$3,700 ment P'an. For information on me plan wnte to: Share Owner Records.
4.163 4.032 3.588 2.921 2.894 Genera: Electnc Cornpany. P O. Box 206. Schenectady N.Y.12301.
$ 1.587
$ 1.302
$ 1.009
$ 1.136
$ 806 Form 10-K and other supplemental information S
667 S
656 676 453
$ 582 The snanciat infennanon in this Report. in the coinion of management.
1,239 1,403 1,166 1,191 1,016 suestanna!iy conforms with or exceeds the informanon recuired in the 105 86 63 54 50 "10-K Reportsucmitted to the Secunties and Exchange Commission.
4.617 4.172 3.774 3.420 3.106 Certain suppiementahnformation considered nonsuostantive. is in-d**'*"'D'***d*""'*h"*
$ 6.628
$ 6.317
$_ 5.679
$ 5.118
$4.754
"'"d'd '"'"** P '** h ****m*;"lnvestor Relations, General Electric charge, on or about May 1. fro 12.5 %
13.4 %
13.7 %
12.7%
12.3 %
Company, Fairfield Connecticut 06431.
$ 20.49
$ 18.65
$ 16.54
$ 15.35
$13.96 Copies of the General Electnc Pension Plan the Summary Annual Reports for G E employee eenefit plans subject to the Employee Retire-ment income Secunty Act oi 1974, and other GE employee benefit plan
$10,741
$10,220
$ 9,089
$ 8,051
$7,472 documents and information are available ey wnting to investor Relations S
588 813 735 501
$ 711 and specifying the information desired.
380,000 409,000 392,000 373.000 366,000 Transfer Agente General E!ectnc Comcany The First National Bank of Boston Secunties Transfer Operation Shareholder Services Division 570 Lexington Avenue P O. Box 644 l
New Yorx. New York 10022 Boston. Massachusetts 02102 The General E'ectnc tr vestor 47
GENER AL $ ELECTRIC INVESTOR l
Annual Report issue General Electnc Cornpany Fairfield, Connecticut 06431 1
Research G E R & D expanded in 1980: Continuing to "f actory of the future."The year saw the first b * * * "" * * " d * *'"'" 9 ' S ' "'h '" ' '9 ' P ^ ' " '
- P "'d * * '9 " *d '"I * " * ' d end on innovative technologies, General Electric for plastic parts, and a developmental G E ro-Development spent a record $1,598 million on research and bct showed its ability to assemble scores of development activities in 1980.This included diff erent types of electric motors. New tech-an increase of 19% f rom 1979 to $760 million in niques - some using lasers-werr tested for expendituresof theCompany'sownfunds.
machining tough materials at higher speeds i
The balance of S838 million was done under thaneverbefore.
contract, primarily for the U.S. government.
In energy, the Company's R&D efforts focus At the corporate Research and Develop-on c!ean methods for converting coalinto elec-ment Center, scientists are playing a key role tricity, and on ways to reduce energy con-in th e " electronics revolutio n," prod ucing sumption.Examplesof thelatterincludenew j
smalle r, faster microcircuits fo r everything fuel-conserving turbof an aircraft engines; en-from " intelligent" home appliances tojam-re-ergy-efficient! amps;acadjustable speed sistant military communications systems, drives; and energy-saving appliances.
I During 1980, they tested an advanced ultra-R& D ac3vitles pictured below include a sonic cardiac scanner that can provide moving unique research facility (left) to study gasified l
picturesof thehumanheartviasoundwaves.
coal-fueled power generation, and studies us-Higher manufacturing productivity will result ing interactive graphics to boost productivity
' rom computer and robot technologies in the bycomputer-aided design.
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