ML20012C843

GE 1989 Annual Rept

ML20012C843
Person / Time
Site:	07000754
Issue date:	12/31/1989
From:	Bossidy L, Hood E, Welch J GENERAL ELECTRIC CO.
To:	Cunningham R NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
References
NUDOCS 9003230327
Download: ML20012C843 (72)

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GE Nuclear Energy Generet Dectx Compaw

%!!eceas Nuckar Center PO Ba 460. n&cecs Rcan heasa@n. Q134566 f

-March'14, 1990 L

i Mr. R.!E.lCunningham,~ Director k

Division of Industrial & Medical Nuclear Safety

'. office of-Nuclear Material Safety & Safeguards U.S. Nuclear Regulatory-Commission t

' Washington, D.C.

'20555'

Reference:

- Docket 70-754 (f

Dear Mr. Cunningham:

'As:is customary, copies of the General Electric Annual Report

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are forwarded:to the, Commission in order'to provida-updated General Electric corporate and financial information..

Accordingly, copies of the 1989 Annual = Report are enclosed for the. referenced. docket.

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L LG.1E. Cunn ngham Senior Licensing Enginee,r

.(415)--862-4330

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Milestoneso the1980s b

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1980 1984 1988

- Act uired [ortions of1 horn-ENil

-Sold Utah International mining

- Expanded plastics business by uquir-Inec ical equipment sales and services opemtions toilliPof Australia.

ing inorg-Warner's chemicals husmesses.

operauon.

- Sold housewares business to lilac L &

- Opened new phenol plant in hit, Ver-Dn Ler.

- Expanded appliances business by non, f rut., to supply plastics business.

acqmring Roper Cor[xiration. '

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- Acqm. red Employers Reinsurance

- Revenues teached $26.8 billion; net Corpot ation.

- Acquirnt hiontgomery Ward Credit I

Corporation.

carnings were $1.51 billion.

- Sold F.amily hnancial Senices, a sec-1981 oixi mortgage subsidiary.

- Sold semicoinhntor businiess to Ilartis Corix> ration.

- Retcited 759 of U.S. Air Force con-

- Expanded llergen op Zoom plastics i,

m plant in the Netherlands.

tract for new fighter engines in so-

-In,tiated j,o, t venture m motors wuh called " Great Engine hat."

Robert liosch of West German).

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- Acquired air pollution control busi-t ness from Envirotech Corporation.

1985

- Resenues passed $50 billion; net earnmgs exceeded $3 billion for hrst

-Introduced CT 9800 scanner for

- Resised management structure to

time, medicaldiagnostic imaging.

chminate sector level, creating a leaner, flatter, more mar Let driven 1989 1982 business structure.

- Establishedp,.mt ventures m apph.-

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-Opened The GE Answer Center *, an

-Shipped Erst Dash 8 computer-antes, {x)wer generation and electri-t cal equikmient with GEC of the b.

award wirtning 21.hout toll-free cus-controlled kicomotives.

United ingdom.

tomer service answering center.

- C Eh! International, thejo.mt com.

- Dedicated $ 130 million expansion of pany of GE and SNECNI A of Frimte.

-liroadcasting revord set by NBC with R&D Center in Schenectady, N.Y.

deliscred its 1,000th aircraft engine.

68 consecutive weeks as top-rated 1Y network

-Invested $300 million into automat' 1988

(-

. ing locomotive business in Erie, I a.

- Agreed to acquire a majoritv interest

- Acquired RCA Corporation,indudi in Timgsram Company of flungary.

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- Sold central m,r condinonmg ing the National tiroadcasting Compann

-llegan $10 billion share repurchase business.

program.

1983-

- Acquired 809 of Kidder,lYaixxly Group Inc.

- Formed mobile communicationsjoint

-Opened new dishwasher plant in venture with Ericsson of Sweden.

' louisville, Ky., as first phase of $1 bil-

- Formed factory automationjoint ven-lion investment in mapr appliances.

ture with FAN UC 1.td. ofJapan.

-Opened la.,vmg Environments con.

cept house for showcasing the use of

- Introduced Signa

• magnetic reso-

- Statue of 1.iberty relighted by GE for plastics in the building atul construc-nance for diagnostic imaging.

100th annisersary, non markets.

- Expanded mortgage insurance busi-

-Opened $325 million plastics manu-

- Awarded contract by Tokyo Electric ness by acquiring AhilC Corporation.

facturing facility in llurkville, Ala.

Ibwer Company for wo Id's largest

.j combined cycle powcr plant.

-Common sunk split two-for.one.

1937

- Launched Work Out effort in all GE

- Net earnings reached $2 billion for

- Acquired CGR medical njuipment businesses to improve Companyk hrst tune.

busmew from Thomson $ A of competitiveness for the 1990s.

Frante in exchange fe r consumer electronics businc ss.

- Ex panded hnant ial services business Contents by aquiring Navistar Financial Cor.

porauon Canada, Gelco Corporation lxtier to Share Owners 2

and D&K FinancialCorp.

Worldwide liusiness Profile 8

- Selected by NASA to pr<xtuce inajor lloard of Directors 20 portions n'f its planned space station.

hianagement 22 Financial Section 25

--Conunon sowk split twcWoo<me.

Corporate information 69 l

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Results ofthe 1980s Getwral l'.lectric Company atul consolidated af filiates Earnings Per Share -

Operating Margin Market Value Awrnged 10.9% ununalgsowth imprm.ed to I1.3 % ofudes WentJrom iith to 2nd

$4.36 11.3%

$5B billion 9.0%

$1.66

$12 billion 1980 1989 1980 1989 1980 1989 Anwrican tumpanies Dividends Per Share TotalCost Productivity Average AnnualYield Awraged 9.5 % annualgrmeth blore than tripled Outperformedpeer groups

$1.70 5.0%

22.2%

18.1%

17.5 %

17.3 %

$0.74 1.6%

1980 1989 1980-81 1988 89 5 S&l*4no E GE E fgY,j,I

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l rates adjusted toexclude g

,, g,,,,,t,;,g gy,,,g, With divideiul reinvestnwns auunwd FinancialHighlights lYrcent (ibliar aniounts in tuillions; per-share amounts in dollars) 1989 1988 Increase Revenues

$54,574

$50,089 9%

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Net earnings 3,939 3,386 16 Dividends declared 1,537 1,314 17 n

l'er sharc Net earnings 4.30 3.75 16 Dividends declared 1.70 IA6 16 Earned on average sliare owners' equity 20.0 %

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7h Our Share Owners Nineteen eighty-nine uns another excellent year ior General Electric -

a ruord scar in a dn ade of auclerating per ionnaru e. We lx gin the 1990s with a prolouruth transfornied Goinpans, aint w hile we are(ul-turally op[xised io dwelling on the past, it is impoitant io outlif r the degree of (hange we hase expericiu ed in ame in inain ways it sug-gests the ditettion in whx h we are headed in the new da ade alul beyoiKl.

GE enteied the 1980s with a strong balaine sheet that gase us the Imancial strength aixt flexibilin to etlect dramati( ( hange decisnch set com}ussionatch. Much of that change was aimed at ueating a business mix aixt a systeini of inatiagiiig it tiiat would allow us to giow nnu h more rapidly than the world e onomics in w hi( h w e operate.

We begin the 1990s with a Gompain vasth dillerent Iro6a the one that existed in the caih 1980s:

e in 1980, two-thinis ol Gl"s ieveilues carne lioin slow-giowth (ore inanuf acttiiling arid noli-strategi( husinewes like natural tesoun e s. 'l< xlas, two-thirds of Otil reseaues (oines lioin high-giowth tet hiiologs aiul seivi< es.

j.M in 1980, of our strategic e

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f pjf husillewes, of)h two weie titih j

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h global-GE Plastics and GE Ail-

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]j cialt Engities. We begin the i

g 1990s with a signihcant global preselue in virtualh all of our husinesses. ()ui opet ating prohls Irom outside the t'nited States have grown 309 per scai siine 1987 aini, at h2.8 hillion in 1989, amounted to 409 of the ('.oin-pasiv total. ()tii ex}xitis helped us incr ease oui [x Ntis e contiihu-Chaerrruan of the Board and Char / I!Arodwr tion to the U.S. halance of trade to $4.8 hilhon in 1989, up (rom $11 O//urrjohn 1. Wrkh,]r t righo; Un e hillion in 1988 a:Kl $2. I hillion in l987.

Chaurman of the Board and f.Arcutwe O//ver lou rence A houuh t< rnier L We began the 1980s with a huicatu tars of as inain as lune inan-e Un r Chairman n/ the Board and 1,Arndit e ageinet)t laven's in soine hustnesses ~lod<n, all out businesses have signil-O//ver f. day 2rd (l. Huvxt, /r (le/D k antb redu ed laseN sonn to M ICW as loul, alxl iH)w we flinet' a 1(It taster-not vet with the speed of the best small(ompanies but with that goal alwass in oui sights and closer nen d.n.

()ur pnxtuttivits growth in the cark 1980s was icpresentathe of e

the United States-in the range of I-29 a sear. We enici the 1990s approaching the 69 lesel.

Earnings grew f oi lo uinsecutn e quaners in the 19xos. As du-m dnade progressed, this growth (limbed f rom high single digits to(on-sistent double digits, and we huished the dn ade w nh a so oog 1989 -

catnings of $19 hilhon, up Itil tsom 19xx, and 2.li tunes the 198n lesel. ()perating malgins aic at histori( highs. in enues, at $~> l.fi bil-lion. iu e double the 1980 lesel 2

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e 'Ihe st<x L man Let hx>Lui favorably on these inoves arxl changes aixt the per fonnance they pnxhurd. In 1980, we had a total mat Let i

value of $12 billion, which ranLui us 11th among American unnpa-i nies. We left the decade ranknl snxnxi, with a 3 eat erxl inarket value of

$58 billion, arxl that $46 billion increase during the 1980s was the largest of any compamy in the United States.

In sum,it uns a greof decadefor GE. We ar e pioud of what we did well anxi smarter for unne of the things we didn't do so well. Not every new auluisition wot Lnt, ahhough $16 billion out of the $ 17 billion we spent on anguisitions will add to 1990s earnings. Not every new pnxiuct was right - as the refrigerator comin essor failure demonstrated. And we dinovered in mid decade that we treded to upgrade substantially our systems for unnplying with govenunent pnwurement laws.

e In 1W, we luid a totalinar-Arut finally, as bold and inmsfonnational as we think we has e teen

- as we acquirut, soki, testructured aint trorganim!

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jgg.ffj,,gg imxIsight that we could have been faster, bolder atxl less incremental.

i We will tw all of these in the years ahead.

ranked us 11th arnong Arneri-Ihit lefore we take that huik ahead, we would like to shaic a few thoughts atout the type of enterprise your Company has twcome-can cornpanics. We left the lYople sonwtines gmpple with what to call GE. An ekctrical equip-nwnt inanufacturer ? Sure. Ilut that description ignoies two thints of decade ranArd senmd, with a our cannings.

Ate we a omglomerate? No, not that theie's anything wnmg with year end marAct colue of 55#

being a conglonwrate. We simr. y airn't one. We're not a colk ction of statul-alone enterprises, anxi this label misses the very essen<r of what billion, and that $46 billion makes this Gmnpany wo: L so well.

We know what we are: an integrated, diversified company. And we'd increase during the 1980s like to explain what that nwans auxi, mot e imlortant, why we think it positions us uniquely to tale on the challenges of the 1990s, was the largest of any com-We entered the 1980s with a widely diverse set of businesses arxl major pn xluct lines - as inany as 350 - that we sut jectal to a strategic pany in the United States.

test. Diversity, we felt, coukt only be a ital stirngth if each business was number one or numtwr two in its particular market. For those that were not, we had a very specific presciiption - they were to be fixal, soki or closed, in line with this simple strategy, we soki businesses that inade up 25%

of our 1980 sales, including natural resources, consunwr ek ctronics, housewares and scoirs of others that couki net become numler one or number two. During the same period, we investal $ 17 billion in aului-sitions - NilC as a free-starxling business; the Acnispace busitwss of RCA added to GE Aerospace; Borg Wanwr Chemicals added to GE c

Plastics; Employers Reinsunmce, Montgmnery Ward Ciedit anxl Kid-der, Pealxxty as well as many others added to GE Financial Services; the French nwdical niuipment company, CGR, added to GE Medical Sys-tems; aint,iiiost recently, Turigsratti of Iiungary sulded to GE 1.ighting

-just to name a few. We committed the research aixl development aini plant arul equipment investment necessary to keep our cuntnt busi-nesses iii leinlitig positions, aiul we (liulertook the initiatives to ensure that these businesses becanw ghibal in their scope aiul teach.

We emer the 1990s with 13 businesses, each number one or munber two in th global markets in which they compete, each with stiung

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i distributnin in twar Ls, e.u h in nulustries inluit ing ciunmous capital.

tu hiuilogs aixt hurinati sevniites foi riitit liut dnetwat nen w hen bauxi on strong itubvidualInisinesus, e.n h making sigintuant oinuibutuins,is run in itsell enough 'lo truh maxi-ini/c the strength oi out busiinsus, we hind to in hine what we call

" integrated diversity,"'I o get that, w e had to dismimtle the muinple laveis of management that so simmithh ran the Gomp.un in a more predictable cia but that had, orri titue, senal to gat ble cominunication atxt hobble action. We iemoved sectois, grouln, span-bicalcis airl inut h of ihe other superstructure that we had on(c usal to manage our dh enitt 'lhe sole of siaf f was runxxl I Nf, fiom (hn Lei, inquisitoi aixt authorin hgure to f acihtator, helpet anxi supporter of "the held"-

out 13 businesses. Todat all 13 rep <nt dnerth to the thice of ut Imlxotant c onununications are otal. The pawion of our busiinws leadens is not diluted in hiteis, briefen atul icwiness. We hase put in place a management system that mtegrates oui diversits moic sunph, allows us to alhicate resoun es more ethrinch than we nei beheved imissible alul lets us inove lastri.

Obvioush, the 1990s will be as f ull of unknownis aint niipiixw as die 1980s wer e, but in our new, u nie things are dead (eitain: The p.u c of (hange will be lastei. Globahration will be more pen asive. Gompetition will intensilt The twnl foi < ontinuous einphnte education at all leve!>

will be even gr eater. Piutetting the entm>ninent will bn ome a total onmnitinent of men ciuplour at Gl~

In the iVMh, uv built a management system idealk suital to deal with these 1990s ksues-a nsicm that brings the leaders of out 13 busi-nesses togethei quartet h ines a two-das petitxt. not t.n a patade of sterile, pohshed business icview s but t<, grapple top bei with ainunon piublems aixt shair inmghts aixi initiathes that aie valuable to all.

While out seemingh dnerse businesses range inon a televisioni net-woi L to huain ial servic es, t n m plastic s to ict engines, these is a unique a nnmon ihicad -- dami management practu n -- that himh t hem togethei and ricates what we rall integrated dhenitt All must deal snrntua at the ct nnran h an<llarvelop with the ut genn of globalization, the need f oi niltural < hange, the i

ment CrNtri fN M hrhre Ifult N I. Hfr m4k pg ggygj,qg gl glg, pyyjpyggppg gggl ghp ggldyg) pp gy gggjgggg jgg l?,3ggpg gg shg trahtm/cgualinra&throughs an matrnah I o arinlu ud untelingeru r, mrtin al tlungswstt< s.

bric, f oi eXaln le, the cK]WiielK e ol a busi K%s like (sl.

Ij laing, w hi( h nunni(luit kh into Ilungan, a shauxl. nut lewingni g

manu/udureng mttmi arut t/u sulmru rd rintronu mirms talmi nrrtled for nero in io% all the bust!K%sek s/n r urulother bl huantors When (nM leines llM M ds namit seMioils, il is litijk)%ible to !C (otil-plac ent, impowible to be onnlortable with the status quo The inul Ioi lastei, mor e aggicun e, inoie global au tion t oines alh e aixi is obvious to all.

The sinne chnamits ou ut nen das at oui Nianagement Deselop-inent Institute at Ciutonville, NL w heir 5,000 ciuphnees a wai, f rom even I,usiixss iri the (' iiiipitiit share die sen lust din ha$e obseivnt a

in areas like custotin i senic e. esiviioniin tital ;>t otn tion aixl(oiiijiten-ing the pnxtuct dnelopment ruIc. All these issues aixl oiuntless others are wrestled with la tin ri aiul wofiu ri ciiget to fitui a letlet was of doing things - tsom anvw here - arxl tiarislaie it iiito a tiioie pit xlin-the was tw L home.

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'lhe efkrt of this ninstant sharing of nunmon managenwnt issues is a trinfon enent in the minxts of all of the runt for 5, pent, continuous ex}writnentatioli atxI aClioil.

l We've seen, as we shed out bureaucracy arxl citatal this integrated diverse enterprise, the enonnous tenwlits of sharing test practices, of helping each other.of asking questions anxi, above all, of listening. In the 1980s,these pradices ternied to coiiceritrate in the upper-levels of the Onnpany. We me nw nunmitted to a decade-long campaign to

. drive them ihnmghtst the enterprise.

Our drromfor the 1990s is a boundary less Gmnpany, a Gunpany wlut we krux k down the walls that sepanite us fitun eat h other on the inside

- anxi innn our Ley constituencies on the outside.

• lhe lxiurulary-less Onnpany we envision will remove the banien E While oursceminglydivenc among engirwering, manufactuting, mar Leting, sales atxt customer sen ice; it will taugnize no distinctions Iwtween "donestic" anxi "for-hsinnses rangefrom a telcei-eign" olwrations - we'll be as comf ortable doing business in liudapest anxl Seoul as we air in louisville atul Sc heixttady. A luniixtary-less sion rectwork tofnancialserti-organization will igiunt or crase group labels such as "managenwnt,"

• s;datini" or

• hourly," whk h get in the way of cople wotLing together, ices,from plastics tojet i

A lxniixlary-less Quiipaniy will level its nicrnal walls as well, tragliirig out to Ley supplien to make them pan of a single pnxess in which they engines, there is a unigur arul wejoin harxis anxi intelkrts in a common puilxise-satisfying custonwn.

common thrrad-shared

'this is an admittnlly gnuxi vision, rniuiring unpurniental niltunil (hange, aixt we air nowheir trar ac hieving it, llut we have an idea of management practices-that i

how to get ther e-an idea that is rapidly beanning reality aciuss the Quupany. It's callnl Work-Out.

binds them together and crc.

l Work.Out is afuld and adaptable concept, not u "ptvgram." It genemliy atn what we callintegrated stans as a series of regularly s(haluled " town nurtings" that Ining together large cruss sections of a business-people inun manufactur, diecrsity.

ing, engineering, nistonwr senice, houn ty, salarial, high aint lower lev-cls - people who in their nonnal inutines wo L within the lxixes on their organiiation charts a xl have few dealings with one another.

'Ihe initial purixisc of these nwetings is simple-to irmove the moir egregious manifestations of buiraucracy: multiple appiuvals, unseress;uy papenvorL, excessive reixirts, inutines, rituals. Ideas aixt opinions are often, at first, voiced hesitantly by people who never before h;xt a fonnn - other than the water axiler - to expirss them.

We have fouixl that after a short time those ideas irgin to cone in a torrent-especially when pa>ple see action taken on the orws already advanced.

With the dest largely clearnt of bureaucratic impalinwnts a xt dis-tiactions, the Work-Out sessions then legin to focus on the more chal-lenging tasks: examining the myiiad processes that make up every busitwss, identifying the cnicial ones, discarding the rest, arnt then fitui-ing a faster, simpler, twtter way of doing things. Next, the teams raise the har of excellerxe by testing their impiuval processes against the very test fium aivurxl the G>mpany aixl fmm the best companies arourxl the wonld.

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We have progressal well into the first stage of Wor L-Out in most of our businesses, arxl some are beginning the transition into the sennxl

-or best pnxtices-phase; but we arr uixier rio illusioris diat diis is anything less than a decade-long cnisade. We have hantly scratcluxi the surface of the enormous mine of pnxluctivity aixiinixivation diat we kmne exists in the intelligence arxl imagination of our NK),(KKI employ.

ces, but we aie excital be>uix! nrasure by what we are discovering.

The natural cynicism that acannpanies the announceurnt of new cor.

potate cunpaigns anxl slogaris has largely lxrn dissipatal as prugirss l

aini rnonwntum have begun to gmw. Woi L-Out is wo: Ling.

• lhe hanlwarr of this Company -its businesses anxl its ritanagetient structuir -is now largely the way we want it, Wo:L Out is our daade.

long vehicle for the w/tume. Restructuring is a nuxi, not a destination.

A company can lxxist gnxxluctivity by irstnuturing, irmoving buirauc.

e Our dreamforihr 1990s is a racy aint downsizing, but it cannot smtain high pnxtuttivity gruwth without cultural < hange, without totally invoh ing the individual who is boundary less Company, a timen un de work atxt theirfotr knows it better than those who " man-age'it. The i xlividual is the fountainhcad of creativity aixt mnovanon, Company where we knoch atul we are struggling to get all our [ciple to accept the counterruttural down the walls that separate tmth that ohen dw len way us inanage Iw;yle isjust to get out of their way, Only by releas,mg the erwrgy arxl hre of our emplo>res can we usfrom each other on the achieve the decisive, contirmous pnxhictivity advantages that wih give us the freedmu to compete and win in any business anywhere on the R ohe-I inside andfrom our key con.

stiluencies on the outside.

We end this decade with enormous conjidence in the future o(GC. l.ast Novemler, we announcnl our intent to irpuit hase $ 10 billion worth of our st<x L over the next five years. This decision was made imible by our eatuings and our debt capacity and by the significant cash flows generated by our business t estructurings azul pngluctivity ginwth dur-i ing the 1980s.

The reputthase in no way impinges on investnwnt in t he Gnupany.

IED investnrnt is the highest in our history. as are capital ex[culi-tures. The busines ws, even during the icpuirhase perimi, will be given the s esouires to mate rmxlest site tumplenwntary acquisitions, and should a very large acquisition op1x>rtunity surface, we have the flexi-bility to susperxl the repurrhase program atxl move decisively.

Our Onnpany will be making exciting business mm es in the 1990s

- ver:tures, new pnxtuct lines, acquisitions, alliances-but the most important campaign will be the daily one we wage to inspire and enlist our employees in the cause of shaini excellence and winning.

In the 1980s, we changed the Onn;cny, We also challenged the bureaucracy arul gener;dly got the letter ofit. In the 1990s, our task will be to challenge each other arxt,in doing so, to get the very best out of ourselves. The cool efficiency that many have always associated with business leadership must give way to personal skills anxi traits like em[xiwering, listening, passion, energy anxt the capacity to transmit that ener gy to others, lleing "on top of things," cuntrolling them, must give way to sharing, trusting. Most of the bureaucracy that infects busi-ness institutions - the r eviews, layers, routines arxl i elx>rts - stems largely from a lack of trust. We have seen, with the demolition of the contful superstructuie we once imjxised on our busiress, anxi we are leginning to see even inore clearly as Work-Out starts to hiossom, that 6

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coninilling }xx>ple thesn't motivate them. It stifles them. We've fouixt that icople perform letter, even hen >ically, when they see that what they do eveiy day makes a difference.

When they see that - when they are allowed to make real contribu-tions to win - they quit Lly develop increased self-con /ulewr. That i, elf-confidence in turn pnimotes sim/&ity - of action, of design, of pruc-ess, of nunmtmication - because there is no longer a psyhic ix ed to wrap oreselfin the annplexity, trappings arxijargon that, in a bureauc-racy, signify sophistication arxl status. Arul that simplicity will radically increase the 3/rrd of our businesses anal their ability to react to a world whose pace olihange will luxume astonishing in the 1990s. Speed, simplicity arvi self<unfidence will be the openitive characteristics of the winning (umpanies of the 1990s arxl ic>urxt.

We went GE to hennne a nespany where Ixviple come to wor k every day in a rush to try umiething they woke up thinking alxiut the night

' before. We want them to go home fium wo:L wanting to talk about what they did that day, rather than trying to forget alxiut it. We want factories where the whistle blows aixl ever>une worxlers where the time went, aint visix orie stiddenly woixlers alotal why we rxed a whistle, We want a company where people fi:xt a better way, every day of doing things; arxl where by shaping their own war L experien< e, they make their lives iv tier arul >uur Cornpany lot, liit fet< hed? I'uny? Soft? Naive? Not a bit. This is the type ofliber-atn!,involvnt, excitn!,Ix>urxiaiy less ctiltuie diat is pw.serit iri sturess-ful start up entespiises. It is unheard ofin an institution out sire; but we want it,8 xl we aire deteisiiirxx! we will have it.

W

/

John E Welch,Jr.

Chairman of the lhiant and Chief Executive OfTicer lawrence A. Ilossidy Vice Chainnan of the Ikianianxi

' Executive Officer Edwanl E. li(xxi,jr.

Vice Chairman of the lhiani arxl I

Executive OfTicer i

February 16,1990 7

)

i 4*

FinancialSmiices i

a Thnmgh ourcapitalresources GE Financial Services had another <mtstanding year as carnings

)

s cachn! $927 inillion in 1989, an incicase of 18% over the [nevious i

andfinancialnpertise, we year. It also made significant thnists in iiew atul existirig sna Lets anxl focusal stiungly on custoner service, arr helping tofucIlmsiness GE Capital Corixwation, with 21 of the 23 GE Financial Senices luisitwsses anxi $59 billion in assets,(untinuni to exparxl atul ininivate

]

growth across inanylayers of siggressively in donestic markets. At the same time, a number of its components establislux! or exteixlal stnressful operations abnuxl.

the U.S. cronorny and, In Eunspe, GE Capital used the expertise gairxxl iii die ude aiul usapitalization of U.S. companies to participate in the Eunijwan nwrg-increasingly, of theglobal en anal anluisitkms marLet. Djuipnwnt leasing o[erations also movcxl ahead there with tranuctions inchuling trailen for a le;xting tmiler-sental annpatiy aini inachiir tools for a ritajor autoriiotive cornix> writs I

manufactuier. GE Capital's real estate financing business inade new investments totaling $2(K) million in the United Kingdom anxl finannvi I

its first office buildings in France.

The U.S. leader in thini party private-lalwl cnxlit cards, GE Capital serves irtailen and manufactuten in the depaitment store, consunwr dutable aixi slceialty attailing sectors. During the year, it anguis ed sig-Belowarrfor of the umrc than 3(m stificaint tww ntslit cani portfolios aix! itititxhnn! a inajoi letailes.

primir4dwirrrdd e nrd fevgranafmatu rd alliliatal Visa Cant plugrain for Ames De[xutment Stores.

i and servierdin C1:Capaal, GE Capital also is the 1eation s largest equipunent lessor, hlaior invest-l ments are in inn Ls aixl can. aittn:ft, railcars, < x can shipping ton-tainers, temporary buildings. computers aixl itxlustrial opiipurnt. In 1989, it ex[nuxini this leadenhip by incicasing the worhiwide fleet of cotumeirial aixl corlxirate ai: trait it leases to enore than 325 aircraft. Overall, tFe aluipment leasing opemtions made 4

healthy gains in 1989.

GE Capital also teamed up with sevend GE husinesses to bring cost effective financing to their customers anxi supplien. Aieas i

M'

>f syirrgy includal plastics, appliaix es, aircraft engines.

I xumotives aint medical systems.

In finaixial guarantec iesunmce, GE Capital com.

+

Ak h,

pleted its antuisition of FGIC Cor1xiration. In mort-JN Q' A

' leadenhip to expaixl innavative progiams for home gage insurance, it used its cxpatise anxi market

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.tu ownenhip among the disadvantaged. One program 8.

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' helps to provide afTonlable housing for low anxi nuxler-1k p $h i s%@']jA.

I dl t, i n

y ate-income finnilies aciuss the nation.

by@gVf, ;'

Employen Reinsurance Corporation improved earnings

'J N

J Despite a s ery dillicult year in the insurance inxlustry,

,4 over 1988's record level while experiencing a slight decline

~D m net wntten premiums. This GEFS subsidiary also retalixti its losi-y tion as the nation's second largest, anxl the world's fourth largest, prop-erty anxi casualty remsurer.

t Kidder, lYalm xly completed a strategic review of its four major activi-ties-mvestnwnt hanking, securities sales and tnuling, retail sales atxt g

m s

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s.,

hasset management-toletter position itself for the 1990s. As a sesult.

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_g, steps were taken to exit certain operations, to upgnute staffin others,

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jf_ such as investment hanking, arx1 to sticairilitie the oigariizatior I

W JhN s

ph 8

i

't Plastics a We are errating innovative GE Plasticsfmished c:st the decade with a series of deselopnwnts that make thh husurss. w hidi had in oni earnings in 1989. w ell positu nuxi and exenting ways to rephu t ha the 1990s.

The hist Iull teat attei the auquaition of thn g-Wainei Chemkals.

traditionalmatenals with GI 1989 saw tlw stucewf ulintegiation of the iwo businenes. As evide;ue of this stu< ess, Gl. Plastics announux! plans to moicase pnulu< tion of enginrenng plastics -- spr-Cruitu

• iesin, Boig-Wan n i ( ;hemi< ah' main pn educt, aiul initic ultu ed sescral new gnutes in the Cuolat iesin hne. Pnuluttion of Ovrolm

cial high-for[ormance poly.

irsin, w hi( h tiletuh Imn* pihradninme widi Cruila< iesin uimhin-ing the best polynris of luth businesses, also was expaiuled mm that ran be reevekd.

In othei inoses to moicase global seivk es, Gl. Plastk s opeinxl a plant aint uthnicaltente in South Koica,loninxl ajoint venture inJapm, aiul uintiinuxi expansion plans in Alah.una aiul Spain.

In addnion, Gli Supciahrasives 1oninxi ajoint s entuie with Asahi t hatnoiul liulusin Cu of Japan to deselop aiul mat Let industiial dia-inoiuls made bs a irw vapa de}usition te< huologt Thn in huologs was advanu d bs the Compam's R&l) Centes, the same lab w heie the world's first high-piessure diamoiuls were puuhu ed in the 1950s In traditionalmarActs, Gl' Plasti s had a suong stat. It enjouxi partk ulai suurwes in autoinotive, pa< Laging :aul building and uinstruction.

llespite sonw wcalening in the automothe 4

yr ina: Let. Gl Plastk s extetuled its inai ket penetia-y#

h j

tion in winning Les ordets lium C.uhlla< 10: liont 3

13 ienac,s ei se,y Gm,e hi, du. nis9 nion q$

IkVille atul l'leetwo al nu wicls, (n.m iIvutulai f oi the Sonata humpei lram aiul tasria, and le im g

_o n,

Horula ior ihe u,mposite humpet hearns on the Auord The sadiatos housmg m the GM Lot, ette aho n i,ade of Gl luhurts.

In the p,a Laging iiulu3in, Gl PLnth s intio-duux! a new tihn in hnol.igs th.u allow s a hpci mkinwase onking hn liown hurh. In t utope. it iniouhued the liutotuttle'* a teusable tuttle foi railunatal diinks. It is made of 1,cuan$ resin aiul Gelon'* high-han ici inlon, a new inateiial.

n, un imng t.nenunmen.s mn<rpi houw in the building aiut ronstruction maikets, Gl: enimed < onsideiahk-In l'aff t/wid, Ainst, shouvuses ihr uses of Gl.

g; des ggowtji 39 l989 - a seat highliglited In the debtit ol the I.iviily fdasho jor thr buddsng und wnsh m tson punArb applitalk Hn ol engiticei'itig polviin'is til the htilldiilg aint Consti urtloti iiulustries Sescial pnulutts aheach aic conuncirialiml. im luding the house skhng u sated with Gehn

• iesin aiul a uinricte aggiegate nin-taining Valox* tesin. Gl. Plastk s is woiking in partnciship with inoic than 50 uimpanies to des elop additional systems aiul u nnp ornts.

Yet anothei innovation rame hom GE Siliu mes, w hk h deseloped a new poh mei foi the han <aic maiket that allows shampoo aiulunuh-tionci to le unnbiird into oir poiduct.

Anotbei les dnelojuiu iit was die growth of Pohineilaiul a wliolk owned subsidian imohed in the uilin non. ienewal and distiihution of terulabic plastk s as well as the dntiihutuin of u nunu xhn aval engi-ircring }xih nu is. hilviiicil,itul autitiiied a view iiiariuhuitiiiiig tiuilits aiKI t wo (listilhut(lis diul(1} K'tuxi bitti erw datiikiLilhiii h M atH nis.

9

c t

Airemft Engines l

l l

a Almost nery sh seconds of GE Aircraft Engines had record renrnues and earnings in l983, asx1 to sustain the nur Let leaulciship it has wxin in nxrnt yeais, it nintintuxi to nery day, a cominercial air-invest heavily in rescan h anxl developnwnt prograins diin ted at the f uture. These prograins, running at $1.2 billion for 1989, pnwednt at craft pourred by GE engines a lcand pur to panide GE with the t<x hnohegy ;nivaruenr w hat have nintributal to its teinarkable success in ever) inarlet it serves.

is taking o((or landing wme-The annnwirial engine business, kn exatuple, contintux! to looniin 1989. Finn onten, for aimnercial engines worth H hillion weer wane in the ucrld.

3,ng,uturd during the par,itu huling GE's share of orders plurd with CFM International, ajoint coinpany of GE anni SN ECM A of I nuur.

Airlines suc h as Atiieticati arul USAii, as well as the Iast-growing leasing c ornpanies GPA Group Ltd. and International trase Finance Corpora-tion, announux! large order s for GE Cl&80C2 or CFM56 engisws in advan(c of spaific airtraft sekrtions.

s Also during the >rar, the CIE80C2 engine went into se:Tice on the new Ikwing 747-400 for b""

airlines suc h as 1.uf thansa. KLM anxi Malaysia arul was installed on ihe iww M(!)otuiell I)ouglas MI)-1 I trijet. Its most suurssful pinin esvn, the CIT >-ho, trachnt the nuijor initestone of 50 inillion hours of o[wration.1;u ge onles s by Continental cla verpuurnfu!a 6.w:2 ruginn aint Air Inter lauru hnl the higher thrust CIW80El engine being devel-(Irlow) /une lern sr/crtrdfor altamt M0 mr.

pggd [or the sww Aithus Itxlustlie A330atKlodies wideluxly aistiaft.

na/l uveldwidr encludingihr nrwibring S dl ComM n'ial i

W lK sh ab,o did well, Inl by an osder R>r 100 e 47 4Wh that entend seuse a uh Kl.M flows t>us,A /clinn and,uhm en lwv.

G L. C'I.7-F*C8"I S.aab340:cgionalairnalt placed by Anwn.can I..agle.

~

In addition, Canadair annotunut plans for a new 50-pmenget

+

regionaljet to tw eqainrol with CF31 rngines.

The devtinpn.ent ojadvanced unr,mercialp:merplants for the hran e is a top gaiority, GE rarnth annouant plans 'br the G E96, a new geix r-ation oflarge unntactriah ngineuhat will nave thnist leu is up to r

95,0m) pouixh for p>wering bigger, twin-enginal wideix xtyjets. Woil also is continuit:g on the GF.ab, letter 1.nown as the UDF* cogine, on have it ready wh,n airlirees inluire it. Current estiinates air that the program will not gointo pnuluction hefure the ble 1990s.

GE's strength in military ina:Lets wn gtra:ly enhancal as a resuk of signdicant developnwnt4 tiuvuyhout 198tl. The big news was the U.S.

Navy's return of all F401 fighter engirc business to GE after four years of split pnKNetion with a uuniwtitor. GE's F404 aho was scleetal by South Korea to power its erw F/A-18 fighters. The U.S. Air Force's annual buy of figt.to engines resuhed in alxiut 85% of the single-l engine F lG hghters being p>wered by the inacased-perfonnaiue ver-sion of GE's Fl 10 engine, which also tiew for the first tin e in an F-15 aircraft. The B-2 h<nnber. lxiwered by GE F118 engines, began flight-testing.The groutui test prograin of the F120, GE's candidate foi the Air Four's Advanced Tactical Fighter, attained sevend nutjor tuile-stones. The T407 tutix> prop engine, to tw u>-pnulucal by G E atxl several other companies, was selected by the U.S. Navy for its new P-7A patrol airtraft. And another major aintract was signed with the Air Rnte for 182 more F108 engines to pmer KC-135R tanteis.

Marine and industrial engine sales also weie on the upswing. Avia-tion senice had outstaixling sides, too, rellecting greater efficiency in engine over haul and compnwn sepair as well as increased numiris of GE powerniaircndt.

10

9 i

NBC E The top rated teleenum net-The Nationallineadcasting Company captured a hnto u sts mg of pt une-tm u s a tot ies to inaiinain its stiong leadet singulespite in< t cavtl uwkfurfnv strnight sean.

iompeutuin lot the netwoil televiuon amhcine. NIK.. whu h h.uliese-tmes ol $Li hilhon, alv > iool inkt uutiatnes in rahle aiul utbei ateat N#C brings world nrnts und Wnming us hf th suinght u ai m pnnu -unu tatmgs. NIH AlY bn ame the f ust netwot L m televisuni histon 1o ianL inst m nv n week enter tammg programs '"'"

of du 'i2-weck bio.uk.nt u at that inta Sepicnibei to N ptemhet.

t Atuhetu e iatmgs detennine how inin h bio.uk auets um ( hat ge achei-mdimns of immes on a doth uwiu NIM 'i wedh wintung sucA inu hnt an unpinedenu d 6X weeks Irlote hemg nuen upted in AltC's oneiage of the WotId Neues ha n*

"The Costn Show" < ompleted the tegul.u wason w nh its lourth ton-sn utne numhei otu rankmg. atul NitC ciuini 19H9 with six of the top to pt une-unw wnes NIM : won 25 l.mnn Awanh f oi piime-unw pro-giann. Inc toi news.12 foi sports aiul nine f oi daviime shows NIM ; Punhu tions had its husiest vrai vet as NltC nunni towatd mote in-houw ptogram pu uluction to < ontrol o ests aiul ii. traw ies enues.

"Maneuvi. I til" aiul"llatdball" were among the m-house pnulucuoin oli the 1989-90 v hedule.

NIM : Sj un ts ganed ext lusive tout aeat netwoil bioadcast

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tights to the National liasketball

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nmong lair su,,hl v. ruer t glq g,

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z 'y Svsicins. bn oming a par t nei in 1 I national atul iegional t able t uan-nels,iiuludmg CNiu. In a mapa innosanon. the tratisacuon unludes pl.nn toi estensnc. uninien upied onciage of the 1992 Sununei

()h mpu s tinough a unuine p.n peiaicw p.u Lage that will supplement N IM ?s ow n ( th mpu s o n etage.

NIM "s piiman husmess. Ihe NIM. I cleusion Netwot L wnes moie ihan 200 athhaird statioin in the l'inted Ntates Io hetin meet tod.n's u nnpetitne < oiuhuons. NIM : nu n uhu ed a "paelot-pei lonnatu c" ss s-tem ha unnpensatmg alhhates that has been wellinened it alviowns and oper ates seven lY stanoin - one cat h ni Chit ago. Clescland.

1)c:nei, I us Angeles. W.nin. New % L and Washington, iH :

In a ugmla ant.uhatu e foi Ingh-delnnnon lY. NIH A New kk vanon made ihe tn si o umoco i.d ino.uh ast of A<h an(cd (:ompatible i eleuuon < AC i Vi lhe A(' lY m. tem, w ha h n hemg des cloped in a uinvirtium unolvmg NIH s n u nnpanhle with exisung i V wts iI

t l

t-j AledicalSystems i

a At theleading edge ofmodms CE AfedicalSystems posted record randngs in l989 on unlid sales pet-l j

fonnances in inagirtic s esonance (ht Rh corninital toniography (CT),

medient technology,i4e ron-x-ray, equipnwnt senice arxl financing. 'the wuikl leader in diagnostic irnaging, it also ac hieval nintinued stat ess inun its ghibal strategy of tinue to dmlop new trch-sening the wurId inar Let thinugh three irgional organizations.

In the European region, Gern ral Electt-ic CGR is well along the way niquesforlooking inside the to stiengthening its ixisition in this Ley inarlet. It inade a nuintwr of i

Ley pnulutt intnxluctions,i x tuding the Stenoscup 11" nobile suigical l

human Imdy to diagnose and systein aiul the cornliart Saturrx " 4 I lirwar intelerator ior radiation 1

oncology. Demuse of General Ekt tric CGR's expertise in x ray in hnol-treat du. rase.

ogy, it will serve as GE's base for supplying the digital, angiographic, atinote-contin! nuliographic aixi fluosuscopic, a xt inarninographic x ray systems that sene twu-thirds of the woiki x ray mar Let. GE also acquinxl GEC's n edical equipnwnt sales arul sen ice activities in the United Kingdorn in 1981),

i in the Far East, GE hiedical Systems-Asia contiinuxl to strengthen

'L its nuu Let 1xnition throughout the iegion. GE's 7MI-ownniJapaiwse l

~ >

joint ventuie, Yokogawa hiedical Systems, operxxl a new headquarten i

aint manufacturing flicility near Tokyu. New GT pnglucts included the l

Sytec" 3000 aint (Tr Pace" Plus systerns the RT 6800 coloi flow ultra-g-

unuixi scanner also was unveiled.

s

," .O hicanw hile, in the United States, GE Medical Systems-Americas remains the ovmull maiLet leader it has panicular strength in

~

'o '

• Advantx" x ray systeras, mobile x ray anit3 azul pa cin.uin CT atx1 hil; pnrhicts, all desiginst for world mar Lets, its h1K mag.wt pbnt in South Cn ulina-the irxlus:vyi hrge3t - pnxluces sulienoductiiig triag-ats for lunh :ha Signa

• and Aht Max'" systerna. funn tha silid equip.

nwon base, GE it. sunrssfully pum'ing other opportanities. The innovative ? tas' 900" Daa*4cial p.x kage, for example, pun ides upgrade options, prott ction against downtime aint mar Ledag supixnt.

Major pnxinn inttuluctions includnl the amained Sigt a At? vantage" MR system mxt the ;nnovative CT Hil.ight Advantage" system.

i During the year, GE [xisitional itv I"tu herome a wm Id leader in the emerging area of positron emission tomography (s'ET). It foriwxl an alliat.ce with Scandittunix AB of Swakn mxter v,hith GE acquired m m.vl,mc tua<pruan t c-wan that finn's PET scanner busitwss. It ahu cateint ir,to ajoint develop-d44cc1.cth d ei Atlhurronardian^

IM ut agirement e'.h Hamamatsu Photonics ofJapan involvitig light

=4 uuaing it <awpr pt.niacic sc :""-

cetection dt vi cs for use in PET scanners.

part thagrunsic onjernita Driven by eforts to controlhealth care costs, the wo:Idwide ina: Let for diagnostic imaging njuipment is expected to gruw more slowly in com-ing years. To win in this (unstrained environment, G E is increasing its emphasis on marLet resixmsiveness and customer satisfaction.

Several moves weie implenwnted in 1989 to support this thrust. An Advarxed Technology Division was created to explore new areas of technology arxl quantum advances in existing pngluct lines. U.S. pnxt-uct engitwering was combiinxl with mar Leting to assure the ideal match of pnxtucts arxl senices to customer needs. Sales and senice organizations were realigmxt to bring senior management closer to cns-tomers. In addition, the new insite" system dectcases equipment downtime, minimizing patient inconvenience, aixl a tww system intn>-

duced by General Ekctric CG R will assist in managing service opera-tions at moie than 6,000 clinical sites in Europe.

12

i Lighting a Building on our legacy of GE Lightingfurther enhanced its leadenhip in the l' A mar Let u hile addressmg its comnutment to build wotid maiLei shaic in.uquning a heinging light into the uveld, m.yonn interest in 'Iimpiain (.ompain of Ilungan in cash IWo.

G1 pun haux! r>0% plus one share of 'I ungsiam. om of Ihmgarn ur arr constantly innprocinR langeu unnpanies with 12 manuf acturing plants aial approximatch 5s00 mime,on an, mms.m hia, xr,2 m,n., he,n mim.m Gr a the efficienes qualit3 and u" hase inatugenu in responsibilin h>i du senture aiul an option to pur-I

( hase an additional 20% ot 'l unpram.

of our lighting products.

.g),. $1'>0 muluin omm non - oin W du lat p M piumi ime ments in llungan in a L A onnpain - allow s GI. atxt 'l tiiigsratti to mer ge theit 1.uiogran dntribution aixl sales operations. signif u anth strengthening Gl' l.ightingi misition in i utope. 'I ungsram will manu-i lauute aint sell puxlurts rangmg irom household lamps aiul crici gs -

sasing fluorescent pnulucts to high-tet hnologs chv haige lamps in sup-junt of Gl' l.ighting's global strategs.

Also in support of that strategs.GD recenth C

fornuljoint venture with loshiha of Japan will

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,;, 7 will omipciate in maiLei deselopment progiasm ein-ne,hegn, mgAe.P.m.,m,etem A

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cc..nu (,t nommiums,,, h ato c ochulv in the inuoduruun of new Ilalogen-ilP lha xiligl ts aixi simit:ights. Ari t

.tvrA,nosm an,g, a,a,mmin, An.4/ amen ndusise (;l inirauti r eflective (oatmg mside the lam]mapanes dissi-brsng trs!<rln.l ns l"s isl letI na uno ihm

. g yl, u

Clark f fwks. ar d H.d.ngen IR Pall %

'" bh0N Ino' ides the hglH o! a IrW watt 1 Kand'ev eiit light but uses lu,ng, i cuinum b.hm1 Ju t sure, unmed

,n/nn,a rn,re na,,,rv van hght ont, 60 w atts ol chru icin.

ghfj hts jnrjg fgg gIgr ypyggning pl { ;l'y wor ld.rrnew,wg i

[,

K - ^'

Qffgy j yhQ jgj

?

g

.,4 7 3.., <

gg;, iny;.we m (:in e'.nx!. ( uiio. af tei an exterisive i'e'iorationi 4

+=..1C Ihat sticinf the!6cd its 70-ve.'l ic lut;.tioni as die innlustn'S pie:Tilet ti'ain-

'g r

t 4y

.ng.cmn mu n s..u. moie than t,mu u.stomen aixt husiness associ-

' 2.

ates hom around the globe parth ipate in lustitute programs that M_[

demointraic GlCs upcitise in hghting design and application.

Gl' !.ighnng. w hk h oliers moie than 6.000 dif fevent lighting puni-e uo+, dm. m,nsmm.. inauso ianoxi o,mmnoai ma, tes. ahe pe,ied

,i f

signif n ant piixluctisit5 iiii}>iusesin iits agaiti widi die help of innova-C' - l ' l tise ideas f rom people ihtoughout the business. Its IM PACI program.

,y J -

...f...

foi nample. invoked 900 cinpknees w ho submitted suggestions j

tesulnnu in $12..I milhon m sas ings.

l 13

t Industnaland Power Spiems E A glob (d upsurge m th< med CE industrialand hut r Systems enjoyed a successfulyear u hile stiengthennig itself to riurt die dual (halleriges of exiuixlirig glolut for tiertru tu,wer generatmn opportumtWs aiulintensdust glotul uimpetition that he he.ul m the 1990s and rem wed com crn3 about Inoeasing denund hit pouci generation njuipnn ni inul systems is leiuhng the win hit this husmess, w hit h inchni 1989 orden worth the enerronenent are mcrrau

$6 liillion. I hese nu hvini a $P,0 million oides In un the 'lobu lila tric Powei Gompain hn the wodd's lat gest (ombiiWd mle im met plant; a ing the dennand s er our inno-gi,39,,ggin,n oidei 1oi 16 gas mdinx s hom 1) uke Power ( enn;uin ;

and a $60 inilhon ordet Itom Virginia Ein tiit Powc Onnpain Ior gas eative tnhuologirt unhm p uon Rm m hit GL hamiM mi hm % nn w-jussal $5 bilhon dui mg the vrai.

Robust growth in the worldwide demaixi for luiwei generation su-iciiis aiui nltiijnix i is hiin ast diituighotit die 199 tis. \\ lore diatiliall of that giowth is expected to lx in gas turbmes, w here G1 h>wc Gen-eranon is the inognized world leader. Aheads well misitiornd widi i

husilWss asMKiales wolldWKle aiut (tt-lntxbM'lHui tajubilits Illjal Mil,

'Iaiwan and huha, thk Gl business suengthenniits glotul misition i

<.0 suppl,ra a vul,,unc, ol,ymp,,,c,a tw Mdu i m 1989 hs n.a hmg an greenx m widi du joint seutute I}n, f rao o prwuntano 0 %wer l'r up t I un l In}n YOU' '

UWU IUW U OU W WO

'(

nolwinng dat,.nf flu art fnollutwn conotd norm., sun,rmor,mm,<>.un w n s of,sy the I utopean Gas I urbnW ( annium (I GT1 I he i G I alhasu e will fl) told utul orr, VO% n/ tlu sul/u' dantule ggtiyg{p ('[ gl(h l(ggg.yngght.af tei at ten to tbc ISLn(1} Wall ( Aniil Hu ilt s from u,mi,uawn ca.r, E.,p, o emo.w'" "'

man erirmed through ihn 7 to puol alumnry GE's technology l'adership is gaining added amportann an unomei requiremens heniux mor dheise aint ana;et tion m.ieases GL i

f hmet lkinen l'it exan'p.e. ofleis i.cw sohd-state clernoun incters atu! alm 'l {dH un tiWtak distill 4ttlo'i Irillish Wiiff s --- klH H n dtloits Ntal im}me a unhi.'s elf u lenc. % imhistiial dme. and omtn.h hom

( el' ()iis c hysteins utih,i ads ah(IV' dup c" 1 s ! IIInpi(DV" LiptatiW A pa;Wi at.:1 steel mills Aixi Gl. Nut trat 1.nergn new high-encip 1uel iTMI dJsigtl,( el l l, lias Plica [a Maktk d ( iYkcis lioill s0sei~41 utillbes at outui the woiht.

l Another arte receicing i.pecialemphasis n envu onmental sulems (,' k wel: positioird to : csjund to du mouating glotut toou n. i ver he e<nitonmen* w 9h ath an, e d in haologs ' hat +ans p' a.ei-plant enne

?

sions Ihe Comp un is cmit tub putrlh% a se flue gavlesa'bm./a-tion suu m in Ta wan that not on'a.os! wthu e suP t.: dic..Jde e missions i

bs 909 but will also, as a in-p,taluct, pit dut e high-purits gs psum 'ot Takain hmldit.g nulustn therein iedtning gvpsum imports in 459 With a huge glolut maiket ior parts and senit e existing in [xmei generation. enhancmg (ustomer seni(e acioss all pnxtutt hnes n anothei majoi ohytthe f oi the 1990s. GL is wo: Ling (losch with ses-et al utihties to help them dehne, implement and iin astiv e tiiipios ed plant per f ormalu e. I nng-tenn inaintenam e u nut aas, w heie Ices ar e tied to plant availahikts, also are benig ofieted in GI to help ctistoviicis keep theit u stenn operating elhcienth and euniomic alh.

14

.o

• )

i Appliances 8 We are leaders in prveiding GE Appliances accelerated eforts during theyear to }xisition itself for the 1990s as a stmng com}wtitor in luith donwstic arul worki inat Lets, p

consumers with the latest finishing the year with revenues of $$.6 billion.

I As part of a wide ranging agreenent with GEC of the Unit (xl King-l styles andfratures in major dom, GE Appliatu es entertxt into its first European alliance - the initial step in aggressively seekingjoint ventures anni creative alliarx es appliancesfor the home, on a global basis. Aheady tlw U.S. rnarket leader in inajor appliances, it l

hasjumpnl to a number two }xisition worktw ide tinough the GE-GEC j-ynnt venture h>rnux!in inid 1989.

I Also with a focus on the futute, GE Appliances contiinux! its cust

)

l improvencut elforts. A inajor step was the announcal plan to consoli-j date electric range jutxtuction into two lat ge plants. closing two othe:5.

j in addition, progress was made towant t esohing innblems discoveral during 1988 in c ertain ietrigerator (um}uessois.

L.....

On tht donwstic front, the 1989 intt<xluction of g..

RCA major appliances inuvided s etailers with a

?

i, '.*

J

.E

~

k new, distinctively stylnl full pmduct line Iwaring V.

one of America's most trustal braixi names.

i; ~ "

b,.

l.aum hnt in tes;xmse to high deale interest, the T i.4 L J

L bnuxl also is heki in high esteem by consumers

gg g;g ap s'.

The RCA line indudes 09 different nuxlels coves-

[ y. 'zum #

' his E J,'

ing cat h major pnxluct category. Its styling is con-i r

'g temgorary, featuring a high tn h, electinnic hot.

• g y

y l

', y%

gl <. *' e j* e.

To serve the appliance market mo e broadly, GV h

p 3

%j.

jg ygle%

emh;n Led on a new hnuxl distribution strategy.

yjQ g{y;Uf g

. f.4

(,g With conantwr buying patterns making the nation; 9

4 j

3h haias crxl"superst<,trs a g* ewing segmmt,0E 4 R g y( n g_ g 9x4 ef

f N Ji j',.j (pf Pg 4 i t p

Appliances has moved m increae ituxposm e in

$; y those(hannels. Allofits authorimi retaildealers 4

- ';* J Q pg y g4.

3. u s wy * -

are im given dw op}xntunity to have two or t

g c

cn nn,-ua mwim, ofaf,Anun ninir of Gl'?s r.trong appliance hnuxl nanws-GE, Hot l mint, orain a soft,3opssnascita RCA arul hionogram-on theit ikwts.

Tbc GE braixi saw a raajor intnxturtian in 1989 - a new "Whhe on Ll white ' line ol appliances that piuvides hon wcwner s a "desigiwr" k ol without many of 6e msts asso;iated with a nmre expensive buih in y.wg>.

M g.-

Litchen. AD nexkldn the lite are white with white cordml puris and l

MN subtle gny graphic 4. Alcat l'andles atxt other pans, which traditionally

%o were chione, wcx xigiain or a darker neutral color, are white t<xt

• E The !!etioint line of appliances, known for relialnlity arnt durability, f

has been enhanced with the intiuduction ofits first solid disk nmge and l

[

full-featured ekctronic dishwasher.

The hionogrmu brand, the first in the iixlustry to offer a completc line of appliances designed for the high-end segnwnt, continued its expansion with the addition of four iww cooktops. Three years oki in 1989, the hionogram line enjoys a double-digit marLet shaic in the high-cixi segnwnt of the i xtusuy.

Innovation carries beyondproduct lines at GE Appliances. Henclits sm h as The GE Answer Genter* senice,a state-of the-art toll-hee customer assistance number (800-626-2000), arxl GE Consunwr Service, a na-tionwide factory sen ice netwot L, mntinue to set the iixtustry staixtard.

15

~

j e

bt'llbyMKt' E We arr developing the GE Aerospace took aggressive action to mamt.nn le.nlenhip in its dn es-I uf uxi pua.hu t knes atul uentmtuxl io win new huurwu in the im icas-l adcanced techmdocin mgh unnientne delenw maiLet. ()f deis lot the w.o rose 8% to

$6 hilhon inn huling a ugnituant un icase ifum intet national (ustomets rryusrrdfor the nploration in f esgu,nse to ex[us ted dn hiws m 115 delenw plocurenwin leu h

{

aiul mtenulving glotul uimpetition. Gl Aenisp.ne inntiated steps to and mr 9/ span as urlimfor n dm e unsa. enham e t flu icina aint pliuluttivin aiul position the buu.

ness foi uimpentive iuhantage in ihe 199ns Chirl anu>ng those actions she defenar of nations.

wai, du evahhann in of du Aen>9.n e ()pn.uioin Diviiion, whic h s

is itsjunnible for all manutat tur mg. pun basing aiul sourcing.

arul({Udha unitiol dl! HigIn uit the hLisilu %.111.uiditHut.

miyor elloits to inn rease engitwenng puxhu tivin weic niin-atext during the wat.

n,.

Gl Actospur alue espuuled its huutrw luse in 1989 in winrung sescral imp >rtant aimpentu ens l'he Irw pn -

grams un hule Ihe L15 Ainn VIarti< al ninun.uuliaul Con-tiol Nutem ( A I CC5L the 115 Air ton ei next generation of

'.'n Navstai global p mtioning s.nellites.uul flight contiois for the C-17 transp>rt ain raf t.

Ordet s Ir om internanonal customer s arul in hnologs lu ensmg to loscign partnen ainounted to neath $1 bilhon inoie than double that of the veat hefore. Major unittacts f rom merv as were inened for (ornmunit anons satclhtes. sun cillain e radar s aint thght sitinilaton.

g i,7,Irn [.

uhsnu her of nogrann sanges honi s.uclhus.uul nulu an i

t

, Il i

10 u tn;fs/n sputr upu tali /m iludystg th, defense M Mems n > Lilule!%ca ((nlllMt M Me:IW atWI soilais. Er willLis alm.

uwrar layn urulufssusifdar'N onradstwras tiu hule illilitiet s data M stenh. % hual simu! anon sWtems, armanrnt su leith n anMll'Mhias drul tilnet stalHlf htti<nt MMnits S

- g 4( Qf4

./y j j k[

SQf ha mu knl vebu b s. im umtul a ti guid.uu e w

/+/ NM,[ g.p g$q%g jd;gh g JF/p[ h

.cna, m,gn,n.d n e M s'enn am idt 4 iccui.nu s a#

.su y' J g y# 9 3

p,

.NP I. g' M-

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diKil ollililu!HQt oiW s'3f Cnh.

' tS}J 4 f f W + p ~4y:,1g4.?

3 %g'.g, + (q4 s if, N

4-

4.,, y 44 y x%

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Highlightsfor theyear ilu tuded da u nnmissioning z {d f u

,L and entn into the fleet of four tih Nan rnnsen N,

a

• 7

'h g p,. 4.? ^s' p i/ g s '

!s g

. g equipp d with the GI -de wloped Avgis llect aii

., a f

.)

f' '.Q', ' Q,ydn (4

.,g a-a f

yyJJ $

p*/ I.M d'I C"" " * '" U " "' " '4 "' " " C d " '*""d I "

g[.#

A, s h 7 fj edditivi. the hnt on the Nan i new r\\cyis desnm.

p.g%.;M, cr r/%

(J/g 4 3 3

%'q ers, the Aringh / m A,. +.as, hrhtened M.n e th.n '.'O 414 $J M9 g o g Q ~

f.fg g % Q Aegim *m7,c>atA une m various u.es o' pnen-4 4 y

,7, tion during tue

.9

i..,..

In spu e exi>loration... (.l.-heilt het shicLiis E

kIsne !! I li(Hi i I se M >bli ss sinll t oi IIW ( ealdu >

probe to pioted that spu ccraf t w ben it enten the

+

e atmosphere of the planet Jupitet. Also in 1989. pne-

~

..,_m gram.u tivin was expanded on N ANAi spur sta, l

tion project in w hich Gl; has iesponsihihn f oi design aint dewlopment of the p>lat plationn and attiu hed pnload a(comnu ulations and hn engineering of the senicing f acihn Mstem.

Enwiurtion (ontinued <,n DNC5111. the tbird gener ation of defense uninnunication satelines foi the [15 Air tonc. In-oibn per formafu e ei DSC5 san.ihtes umu hed ni d.ee h.mem omu.uuhn.

Gl Aciospu e also was sein ted in A I A i to hmid thice satelhics that willicplue as runent Telstals Duahharul Iclstai i saicthics will he built uixier a $$in milhon uinnat t and lamu hed m the nud.199ns.

16

o 1

Commumrations and Senares a % help cuoromer s talt tulvan GL Communications and Sen icn had im'reased trvenun m 1989 Ihe us opeiaung unn}m nwnts of thn huuirw use uimputrit satclhtes atul tag, of th, en/vernatmn ac, otbei.ulvasu nl in hiuilogws to help hmmesv t gm enonenn.uul nuh-valuah take.uhantage of the mf or manon age.

(.l. Inf ormatuni scirnes utpptws swtwoil-havxt sen u rs that mte-giate unnjuurts. uitiwaic aiul unninunn atums mie m to a sat wn of nulmtties. nu huhng worktw ule hnaiwial, tetail. eneigs atul tramluina-tion busmesses its (.lolui 1.inuts Ss stein"'. Ior example, provides the

,m.v, PW 17: M ' 4.

eg hnain tal uinunuinn u ith urneh data on eash exp nuir to optiini/c

+

u.nhngorrinuninc<

(.1 Amet u an n onmmut anons. w hu h pim ules satelhte (ommunu a.

tium se Tu es. agam led the domestu sairlhte nulustn w nh the highest saienne unh u non i.nc o,nsa m non began m ius9 on iou,,u.w siaie.

of the-art satellites. two of w hu h weie picuild to ihe(able TV nulustn.

GI Nlotnic( annmunit atiom form d a iomt sentme with I.inwm ol Sweden The pimt s entuit. (m tux' 60% hs 1.t u su ni aiul 10% hs ( d..

M-will puulu(e inobile r adio ssstetti atul tellulat telephones foi the tutet-nat onal mat Let aiul will sene il e l LS aiul(.an.uhan in.u Lets tot (ellu-las telephotu n stetiis.

In achboon. (.I bmcinment sen u cs in.untanwd us pismon as a a neu tranuurmn n,4unc, mir,n um nt Ic.ulmg supphet of in inm al. u wnulu aiul management sen a es foi mo r.s in/on=uimn scowrc us,,tauwl, inimal. state aiul toingn gmeinmenn (.i (.onsulung $cn u es pn -

',f"",~ T,","Z"l,"l0,*",' ",',!",T"'."

' " le" ""'"i o " x " " I '"" " " "e n " e" " ' """ ' ' "' "" " 4"" " a " i " " m'

=

,_.,_,..,..,&._.......a a mi G i o im pu ri se n u oiin s < n u.i n na u cau ng.uuiice.m oi

.,,.n,,,......u,.,,,.....

m.m p m n,.ou n,th n uim p m n n il 3

i E!cctnrai Distributi<m and Gm!ml

-d 8 Our Irch wlves pub,In tru (d Electrral Distribution and Centrol camlirwed to makt ugmhr am mlva.n e in t ost-u unpetit.s cirs> arvi strategit alliatu n. hs intu uhu ing m to w,,,A mpts ent,/A wutis wo.lcllcadet slup pn whu t w vi loigmg oc4 gt shal p.n tncisbips An unimtn 1. ada m pouhuis that pioic

• an,I vian ol ein tnt al 5

p me..uul eqmpment tbn bmur.ss mu m hunt its m w. nuegiatni j

spern a Derm

• hnc o 1sowthnuch. swiu b'a unis b rw ;n.uul 5pecoa 1615

• utruit incains m 1(n il i tec m(uhn.n anegn of me e iww A

g e

in sen.1e impn n enie*ns aiso were at hwsed tlaough the o'noh<tati,n of ( mtoiaet sen a c. tne opemng oi a (ciitiahint waichouse a ut the

~

strategu pl.nemein of espupinen. (c.ncis atoutullla l'inted htates Inter nationalh. a jomt husmew iniciest was estabhshed with G' (.

t of the i tutnl Kmgdom. l'mlet the 50 50 punt sentme. G1 i Itahan-lused athhan t( A 01 N11(l w as o nnhmni wnh bl.( Js liclgun based Vuu Lici NV amt i ren( h basal l'neln to (irate a 1.uiopean hu uness that manul.u tures ami mar kets <hstiihunon aiut uinnol equipment f or the I;uiolwan mat Let.

(.l.1;leru n al t hstnhunon and (.onn ol alv i has r esponubilin loi bl i mtciests in the Gl lanu( Nutomation (.or por anon p unt sentuir

,nenArn ne, /w t o/ th, nra s/m ten scoe, '

til Ntiith Alliclu a alut I uitijte Ihiillig 1989. thn Iat t(n s alittiillatu n) lhm, \\/w fin /Or s pulu ttual t,U ldt s cinture willi l AN t'(. l.id ol lajuri((intinued t< >.u hiese ugiulu aiit tua or ein en,ut n tumtenennt av untnm, 9, g,,,y g

,a y

,, g

,9 1

a lwsjos rnatu, a.ul e ut < mh lu'w Ilin' (il }n(Igt ai!!iilallie ((nitl(illei \\ the het u s 9ti laillih, atul unpimed as own puuhu uun hs iedeugnmg as lauon awl mstalhng an automated, state-of the-an piinted win mg la uni assembh n stem.

l,,,

Motors l

a our electru unotors run everv GE Motors achieved renord sales performance in 1489 despite inwicasnt mmpetition m the global mar ketphu e.

thingfroin treadmith to sirel milh Rnent strategk moves to impluse Glis competitiseinss itu hulal the restructuring of domestu manuf acturing plants anxi the global mnsoli-dation of alliixtustiial riiotor busirusses. hiotoi inainifacttit-irig tii Koira continuni to expaixi with production increases injoint sentures with Hvmulai anxi llaewoo. In addition. IR; Automotise hiotois, the newjoint venture with Robert ikos(h of West Gerinain, began puu.lut-tion of electrk motorsin the i nital States for a variets of automotise apphcatioin. The sennae is now shipping blowei aint engine cooling f an motors for iord in the l'nital 5tates as well as exporting powei witxiow motors foi ilN1W in 1.uro[w.

The com[etitiveness of thn business is being iurthen enhamnt bs inluctions in total cwle titix atxt in respotisiveinss to ctistoriiets. Ioi example, customers now hase dnect au ess to GE hiotois' data on Anaum,nd ofmaor ti,u cudu, A of th, (,i imenton, orders and in hnkal inior mation via the Niotonlink'* ein-hlolon fdterd on Owndsoro. k1, thet h thr tyn}h iggggl;g c_

o ti s set I r e t cicated a strong dematul f oi 1.nergs $aser* motors Irom G1 These motois are leaders in the iiniustn with their high efhcienn.

Tmmportation Systems a We provu ir the honepon GE Transpor ation Svstems contir aed its 'uccess in the f '.%

n u Let >,

wmnine about d,"s 08 ill in hg o-setis e or den, pl.(ed dm mg IW to f. Il/m.ornce n FrieC s )ne synibu nt de, c'.noent u a tw "partnendup ' web ihe 5,mta le u ilwa, ih ti gi' es GE eianuenatu e res;,anubilin foi ;he entue a

tmdon Santa 1e flect of G1 hxoraot:.c s. bt:. als(. inen t d an etdei for 60 kw omotn< s imm Saina 1 e.

bE f ernaiised the leadiDg competitoi in ein tin dri'.es loi lar ge nuni i < nu ks Ordeis were pl;unt f or 229 of f-highwas tim Ls.121 tons and os r, thr.ull ent et seivk e on six marinents.

'l'he l'on [ahs als'n 'natiulact died its lirst $f '. piol tilsloti systerii jol n'a[id liariskt. w hk h wili'n } lim ni thi3 sJn h e witin hIetio N(si 6 '

1r hante ir.U!..vn v Ivan p;un f.e an

.r.i mvan, 'fwr t+.t.r uk ".rr n In uansH pro [dsion satchm M. Lio; ors an expected 'o rephu c 1 a y m, a ot.. cf.

in the vears abea.i. GF ileading shaie vi the U,. Inat ke; has becii haAe3 trpoti 1R: te< hiiologs, so ihe hietco Noith detiionistratio i is aii important part of t'ie plan to maintain mar ket posioon.

In another imixatant 1989 mose GE acquired the kxomotise business of flombardici in N1ontical. Canada. The ac quisition will allow GE Transportation Ss stems to broaden its participation in the Canadian maiket in using the N1ontical plant to support produ(-

tion of I) ash 8 hxomotises for Canada and Super 7s. The latter fh are rebuilt GE knomotives that provide teliable,lowei hot se-A powei foi rainoaa apphrations not requiring the neiform-aiu e of the I) ash 8s GI also inened an ordet irom 1

4 l

Canada's llc RailIor 22 of the 1) ash 8 lommotives.

i '

18

's lllll'l'll(ll Ollflf E through creator allmntn GE made sigrupcant progreu nn its glohahranon etlot tu dunng a seas punctuatalin inteniational esents that air icat ing down the turiiets andpunt ornturn uw ar<

to a u ue global n ominn.

In liutope, w twie 1992 loonn on a hoivon stutdenh w uleiuxl in budding up our uwidu idt

x,htical(hamges m the uimmuniu hku.1989 was ina Led in a numbei of itunivatise shaie-to gain alharues herwhting luith (.I' aiul its par t-competsinenro ai the han

,x.n. i tw ge,n gg.gan w nh dw signing of a inuhibusnu ss iclinioinlup with G1 (: of the l'niini Kmgdoin aiut tlosed widi die ariiionint riu nt rien to a trur gh.hol reonum) of GIi m ginnion of a inajorin inu u M in 'I unguam Uinpun, a llunganan inanut.u tutei of hghtitig pit uhu ts.

nmtinur to ermnbir.

g.lw Aham es widi G11. in ghw w avial ynm in ad guiwci generation. w hit h were unnpleted in 1989, strengthen Gl?s lxnition in 1.uiope w hile vieldmg in hmilogiad benehts aiul achinional

_......... ~

inau Let oppomuuties u GI L m Gimpain Ao m pimi Gm's iiuxi-ical equipment sales aint seni< c acovitws in the l'nitni Kingdom I he

'l ungsnun mqmsnum. w hit h was tmaheed m eaih 19'.U. icptesents one of the largest post-wat business mvesoneno, m that iountn bs a l'.A compain and signitaatnh itu reases inaiket op}untunities foi

~1 ungst am aiul Gl.1.ighung

~

In.uhlition. the 1.t icsson-Gl. Mobile ( bnununn ations jomt s entm e.

cicated in 1989. < ombuu s l'.%. aiul 1.uiojwaii str ength iii jn<xitu t

.' /' [s

.t dnelopment into a globalin hnologs leadm m the mobile < omun ma a-u, 6,

+

. sw ag4*i tions aid c ellular telephone ina:Lets s

m,

,7 4

• x i og

~ :n. f

.n-4'

• Gl lvironinntuxl to make my uni nuomb in As'a whele n ha' p'.

p

.a 4

k h..,pgb k k..i:

nad long-stamtmg irlana.nh.ps wnh do.' ens of kn juittiu ts kf 4

p' N y 4 ve ! A 'iQ [/ v g/*Qh,[

pg j'h K i fg l. India, 20 %unple. GI hinhet suengthoux! ns om.ition in the

~g / M grown.g lu(tial: nonoun hs extewl ng as al'tmn wiC. Bill J. to q4 h U, Dy 'N Q ir.lude the tu.i r ange ol ps tuibmes.uviin.mnouining a loni, ven-f74# 43A

.- (.;, < o. = ;>

4 tme m en du al sssicius wali mpio

, v <x f e m,g.$, f, a+ w:

%~ s,7

.I.he I.giningjoint sentme with ~losinha 01 Japan n anothn nample.

yn r e

,2 7ung,,um hghn s.nh,14,Imuhr itne, n.

I)unng 1959,it staned nim.o uni.m on a pueduction iauhn m ()hio m hudupro llunge. u hm the n<mbinan.m pun jde (;l; mul Ioshiba < uMoaen with Ingh-quahn thun es ci.t Lim [n e ( n i u,.pu, aching 6.noa, uiut siua in the Americas. a new her trade agreement hetween the Unital

. <ou sa n Tungour v a' urn has ornh ola ono nnu, m Istox v ut,t/ nn.ut teu states aiul(.arimia is ojwnnig tip busitu 3s opi a sturutio on laidi sides p.e.,..,. g hn4 om.,un n. sur i u,op. un of th b<ndu GI enjovnt umtineed growto m(;anada espnialh m ad *'

hnenaal servit es moton and plasth s. GI (.ana ia had w ord (upaal expemhtmes m 1989. hu laden weie the np,umon or as ain i.ut engine parts plain m Quebn the iaunch of ihe new Pet u.nnan ? Plus (lothes dnet in Gann o, d ( madai appl.ame subsi<han. and the stan of umstruction on a new f at ihn m ()ntario to < omixmnd silu one3 Aho during the seas, Gl; aiquired all of the umimon su = A of Gl' Gan-ada that it did not ah rad, own, or almmt 89 of the issued shaies. loi appioximatch $120 milhon un Ganadian dollarst Gli also betwhted hom the revitabiation of Mexiuis nonoim as oida s in Mexico showed suong growth. In addition. iomt s entuir manulm tunng imestinents there in plastii s and appliaines, totaling almost $100 million. wne lat geh uimpleted foi 1990 stan-up As the 1990s unfold,inucasing globahration and the n onomu liberah-tation of new mat Lets pionuse to open new honocis to Gl"s mter na-oonal giowth And Gl;. with its suengthened busmess des clopment and u nuntn inanagement or gani/ation, n well pim ed to partiopate in the deselopment of these world inar Lets.

19

e 1

l t

Board of Directan asouann.n.,o n>9m Silas $ (.aths art. a 1)ne< to f som 19M to 19C. w as ekx ted l'he.\\lanaccment Deirlopment and Comperontwn ( omnat-to the lhiaid on I chruan 16.1990 af ter sen mg two sean to, w ha h nuludes onk Dne( too, f rom outsule 01 held as Ghairinan of the ikiard of Kuldn. l'eab ah Group, liu.

10 meetings in adchoon to approung (hanges in GI 's a Gl. I manual hen u es subsidian.

nianagement, it icview ed the Gompam's exempt salan j

thning IW9. the Doc (too, hekt ID segulai meenngi, stna tur e avul ese( utn e u >nyietnation pr ogr ams.

j aiul partiopated on the f ollowing uinmuttecs that aid ihe l'he Lmmating Comnuttu. w hu h bekt three meetings ikiard in as duties.

teuewed Itoani(aiuhdates and us onunended the ann-j The hht Conmutro. w ha h nu ludes onh Dinx too, f s om nunce su utture and member ship for the einuing seat.

outsale Gl_ hekt four meetmgs h reucued the atinines I he O/natmro Committer met sa times nu ludmgjoint and unlependern e of Gl"s mdeperulent auditon aiul the sewoin w ith the Audn. I manue, and 'lc( himlogs and 5(i-actinues of the (.ompam 's internal auda staf f.n w cil ai, the etu e U nnmittees. It r eview ed the (.ompain 's operanng Gompam 's f manual r eportmg pn n ess. mter nal f manual results and plans a*. well as the annities of Gl' Ainrafi

<onnois and uimphante with Les Gi poluies nuludmg 1.ngmes and Gl. I mancial Nen a es.

thme related to the defense puu unement po x ess. It also I he Publu RnpormNhtu, Comnattu. at its two meetmg%

reviewed the nn esunent por tfoho of ( I l'inam ial hen u cs neurwed the actinues of the General I lectric f oundations The / maru, Comvuttn met Iout umes It exanoned GD.

and esaluated em ironmental mues that could af' lect GI imanual posnion, pemion f undmg and innt operanont The 7uhrmlop arul Nu ru,- Comnotto held three meet-foicign one tments fmanung < onuniunenn with the an-ings all omt sewom w nh the Operatioin Gommittee. Its t

hne nulmin mul othei manen imohing lar ge-sc ale unh-at tn ines n.(luded icview s of bl. Pl.ntu s Gli Medical $s s-eation of Gompam f unds.

tenn and Gl. Gas l ut bmes.

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H.Brewster Atwater Jr. Richard T. Seker Lawrence A. Boseldy Silas S. Cathetort Charles D. Dickey, Jr.

thau man of ihr Ih. aid, consuba:n m I insi A W e ch.uonaioil ihr Duec< anu.rin ed Ren:nt thinonan t l tae thirl I sn uin e ()tta ri i oung pubbi au imn'-

th w d l'.n..n.

(lit ei

( hat mei of un Ibiant.

Itoani.n al f or mi i Du n -

and Dnn toi. (.cnrial amt ( Inclaint O' u.

3 i.d Dn n toi (.c.m al lihnon m.lsim h lui io; %. m Papri (.omp.ur SI'llt lIR, t on%u met (hin nis stin t' l[*

i Irt s i R ( il i p m \\

da t ! uhrd p'.idut t%

Ihltadelphia. Ia l)n n ti4 l

hoods aini recaur aniv i an ht hl (.onn ' n n toi

( ha ago IM P. n voi suat P.CJ l

Sfinnu pohs.%hnu un < 194 197 J l' C and.un e lu91, l

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p Rrbert E. Mercer 3ertrude G. Michelson Barbare Scott Preiskel Lewis. Preston Frank H.T. Rhodes nonu.d uan mam ons semo, m e,m,dn.

wo,nm w+a u n.m m.n-n w i __

r, m,dem m., ma e nm m.

Itoard and f oonri Dun -

E sternal Af fans and Dun n o snu r 19%'

(.unnunres and Dun ioi.

un Ithai a N i Dunion ior. I he t.oo<heai i nt A Du n tot R 11 \\lat s A ( o l P \\t o gan A ( < huoi-sna t h84 R nhhri (.ompain. A ki on.

Im. iciailt i s New Tio L.

p< o art d and \\1or gan

()hni Dan tor snu t 19 4 Ni Dn n tni uiu t 19'h

(.uar ann li uu (.om p.no Neu i<n t N i Imn no sirH e j uIf.

L'O

C*mmittees of the Board Audit Committeo Management Operations Committoe Technology and Ric hard 'I. Inaker. Chan man Development and lleurs I tbliman. Chanm n Science Committee l.awiente 1 lourakei Compensation 1.awrena A lbauch.

liantil I kluxirt th.utinan Gertrude f. Muhelum Committee vu t Ch.m man E dwaid i ilood le IWrbara 5.a utt henkel Wahr 15 Wrnion. Chaninan il liiewster ?.twaire.Ji Vu e Lhairman Ir w n~I Presion llenn il llenirs, li Nias % Cathe s r

(;Lailn D llu Let l I rank 11 'i. Rhodn llenn 1 thlknan Robert i Menet lawiria r I. loniakri li.nuit lonn llat har a Noit henke l llenn I thlhnan Finance Committee

(.crir ude ( Mu helu.n t ew n ~1 Pinn.n D.n id ( b.nn Robert 1. Men ei. Chan m""

Andrew (. %glet RoberiI W ner John i We h h.Ji..

Nominating Committee Wilhin I rent h sinnh YKO Chairniais CharIn D Un kn. l. (.lwirinan Ru hard 'I Itaket

%ilin % Laihc art Public Responalbilitiet Nias * (.attu asi Henn 11 Henin. l:

Committee Chaticill Du Ln. l:

(.ortrude (, Mu hrkon Henn H Henin ji.( haninan llenn 11 licuin ]

Irun I hcston Johni Wehh.lt.

I IlandCjonn Ander 4 L Nglei Vu e (.han man Irank H I Rtuutn H 15towsici Atw atri.Ji Walter it Wrnion Ru hard I hakei 1.a w iriu t I f ourakri Henni Ibilman

(.croudi(. Muhehon Itaibaru Non henkel Andrew C Ngle Wdham tiein h %nnth

't Lawrence E. l'euroiser Henry H. Henley, Jr.

Henry L Hillereen Edward E. Hoed, Jr.

David C. Jonee i

l Fellow, lohn I isemv <h Retoen Chan man of the Chairman of <he hoa:d Vu-Chann.ar of the Ren.ed U.S An Foit r I

k hon: of nos aument.

Ibund. ( b cf Ic.u v us e and Dn et w. The l'.hna-Ito ird. I sci uu r of f u rt (encral and funner (;han.

Harsa.d finsfiMis.

() '.K cf rild lo'nifi I'nc'-

( d il'.llNir s. d u ri s ' bed and Illirt toi. (.rnCr ol inan <$f ihr jouli(.hirts of Camhn.l-(r. Mm in Clurit halxuh 6 ( o epnanoen aid uni-1.lcr tr a Longiant Niafl. W nhmg.om D L

'hres tor u:ue ION I Im n:.inufie t.n mp.ind inenit h, sbar gin ".

la cheid innu linction t hi rt ion nnt e 19Ni irtailuy.of apparel.

Ihrr~toi smie 197:?

uu r i9*9 New Yom N Y t hiroot un: r ;97:

s-gm f~'

,w r~ p T

, m y ys.r 777 9,. o.,.

g{I e

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k s

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Anfrew C. Sigler William French Smith John F. Welch, Jr.

Walter B. Wriston Chairman of the floard.

Seinur pannet. (.ibson.

Chan man of the Itoard Retned thaninan of Chief I scrutnc Offuer Dunn & Liuic her. law thief f an utne Of fuer the finard and formei and Durrior. Champion hrin. l.os Angeln. <.ahl and thrr< ion. ( enci al Du ri tor. ( n u or p and ( m International Cor pm a.

Ihrector suu r 19%f.

I let ein ( ornpans bank. N A. New i or k.

l tion, papri and forni I an brid (.onn Duriiot Ni Dnix t'it unii 19n2 n oduc ts. htamf or d. Lonn snar19"U hin tor snu r 19M 21

e ManagemenI asiin.4.iu.n, n. h s.oi Corporate Enocutive Son 6er Corporate Officers Corporate Staff Officers Off6cers John F. Welch. Jr.

.,.a.-- -. g '.

3-James J. Costello

(.hairinari of ihr ino.irtl aiut

k 4'-

Vu e Pre sulern arui t a.iinpiiiiller L

(:hu f l ux uint ( Hlurr t

Lawrence A.Bosoldy I"

4 Dele F. Frey l

A

\\ u r Presulent aint liemurri i

Yu r ( h.airnuin 01 the llo.it(1

.irul l ux utne Olln er E

l h.uiinan aiul Pit sulent.

(

l.riu ral l.lr< tin linestnient

(.or g u.i ai n en Edward E. Hood, Jr.

y Vu a Chaninan of ihr Itoani Joseph Hendros arul I set utnr ( Hlu r

(.curi al (.ou nwl Vu e Pronutrini aiul ik putg James R. Bunt

................ ~.

Vu e Premli ne Joyce Hergenhen Dennis D. Demmermen Jack O. Pelffer Vu e hewirni Pubin Rolain..n senuit Vu r hemtent.

senu.t Vu c hewirni.

Finaine 1.sti utne Alanagrineni PhHip A.Lacovere Vu r Ptewirni aiul senuit

(.ounwl 1.ingainen aiut legal helu s

-+-m u

S' g

Teresa M. LeGrand

+

Vui hewirni. Anilu statt 4.

?.

1

,W M.;

Eugene P. Neobede

~

\\ ur hewtoni. Ituwiru y,

i k s t lopnioni.nul Plainnng 4

Phillipe S. Peter f

Vu e hewirni (.mrinnerni s

f 3

Relaium S.-

.3 Arthut V. Puccini

~ '

Vu i hrsnleni. I mplogre Paul W. Von 0 oen Frank P. Doyle Welteri Robb Relain nn i m uint Yu r hewteni

$rnun Var he.ulent son ir \\ e r.*irwt ni.

i Re lanons Rrwars b.uul D,,e lopmeni John M Samuele Vu e f irmitat 4:al siin..i

( oun#1 1ashihsami l'leliall'ing M['q '

" 7,4 c 1..

WiHism J. Sheerar-

.g.

?

Vu e hewk ni. I nenu enng.

!. g 7,. p

. b)1 Pnuluiinn aiul soun mg 8

p -

Edwara J. 3kiko

~' "a -

ps (.g'i ; j' s.

% fy.

Vu r hr.uteni into,n..au.n

,g, l ei bnologs

.4-

.,y.

.r.

.-h;

-j ' f

?

?." g L.

.r.

Ser je min W. Heinemen. Jr.

se:noi s'ai Pir wirn A e.u ra.

(.ennst 1.uut set I riat -

l l

l l

l 1

'\\

s Operating Management ~nwh, nan w uni Financial Serviceil, Mastics Medical Systems Alecraft Engines

-~-

1 s

3

/

jn' e

j Gary C. Wendt Glen H. Hinor John bl. Treni Drien H. Rowe hnutent aiulClurf opreannu senun Vur Prnutent Gl Plein s senun Vu e hnutent

'"'nua Yui h nutent

( Hf u rt. (.riertal I in tr u

('l hinlual h stenis

( *l AIH 'ait 1.ngitic s 5

i NigelD.T. Andrewo i9 e Nii a t( Iwf VM i h""ICh' bl '"I""nn Bobby J. Bowen Theodore R. Boehm sn uine oltu rt. briwi al l in t'"

\\ ui hnulent Adsan< nt

\\ueis wirni. hum wss Robert H. Brust in hnologs Planinng aiul ligai Lagntal(.a n lan, n""

Vu r Pinuk ut I m.nu e James G. Del Mouro Brlen Brimelow s'n.cne r al P.aul L Dowson Vo r hnutem % nu r Vu e hnutent (.osrinment i i i

\\ u a 1 inntent ( I I,letu s -

h alusn

( ounwl aini sti rrt.u '

A nw r u.n Thomas E. Duesham Charles E. 0 kooky Vu o hnutent. \\tanulaourmg Charles L Chadwell Edward R. Moscher

\\ n i hnuteni. linman

%.nu n \\ u s hnuteni ll.una" Via rinutent. sain Vincenzo Morelli Rnoun n Rnoun n innelogniu ni hesuli m out ( Juri i sn utn e William H. Wootondorf olinei<,etw,aiiin un<<.R Lee Mapor i

\\ r i ir ni Imami Joseph G. Wirth Charles P. Ploper

" ' " ' " ' " " I " " "" "'

h ""lC"' '""I ' ~ h"1 1 sn u n u wes d C. Beveria Micheet A.Corpenter

',[" "y,' '

.','n

""I'"'""'

j ha unu Vu r hnutent Li Herbert G. Rammretn e

t.apaal. her.ulom aml e. Ini I hnutent 61 PL iun s -

l l sn uutt ( Mfu e. huhlm h.. du 1.nl Gtsven C. HieeJ W Dennie R. Lit.46 i

h-dnb t.i uup 1."

Vu e f u.uk,u M, krung

\\ n e hnultn' Wu.c and EJvva.rd J. Ruwell innui.d I nvme.out so.n Dsansa J.storeV

\\ u o hnutoni Thbert L Stockhig N nun Ve r Pirsuliin

( l hulw'aluenn Vu. he wiriit. sale s W. hqi Kroll

( a u ta n air I isiain t.

g', e pii.wirs.t Prixto. ti. i Gl (.apus i hoeph M. Sehnsh. Jr.

i.h,

,n an. nut aaci bn utn r Fe enk E. Pickering Charles V. Sheehen

<gtun.ce plo.n s - I u"'P' NBC Vui hnuh nt i ngnwome senue \\ u r hnnirni.

Noin nal saln. Raide i L Donau Simpean W. Jamee $WicNetney, Jr.

Uwe f e Waecher

~rp' Robert G. Stibet Pratub Vu e hnul-nt Nianula nor mg

..,,/.-

I nciiu.s Vui hnulem nnall Anoah s

t M*

p M uini o c hnuk nt Vu e hnutrin ht.u komg 4',#

M*,.

Robi,rt C. Turnbu J

.,t c. pnai

."ul h wim i ban..gt nern'

'f fS $A

\\ u s he m'rnt \\linnan

. ' J #y-gn N tngnw.

W V DeviJ 0. E6 tilsnt V $ #*.*

i miliem.L VarescN

/ gv?

%-sun; Va r Pii wiriu

' Jcer '

Retailri I man 'al $i n u n Lighting

/ )< J P

• ,n Vu r Knuirni i manu

1. og,

p4

.g intonasiu:n wienn

e'# a[6: j; ~ ^ $,..

D<.,nlo J. Nayden iqs y-bn unu Var hnutem

.g l

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... a bl Lapnal

4. d j' g

N.3 Robert C. Wr6ght John C. Deterding V

hnuteni.uul duel bn unu-senno Vue Pinuirni.

K4 g'Yhd' i k

( HIh n NdH"nat hinaik asong Lommrn ial kral l uate

+

-r>3

1. y

'"'" Pd " ' l '"

I mam mg MA Albert F. Serber Michael G. Fitt

- 1 i I '" """~ \\ " C h ""lC"'

Ch.unnan. h emiriu aiul Murt e

w

\\: -

hn utne oltu ri. Unphnen Dick Ebersol Rennurain e (.orinnanon i

hnuh m Wu John D. Oplo Michael G. Gartner senun Vu e hnalent GI l.ighnnu hnutent Non William S. Frago Albert D. Jerome Viu hnutent. horidu nk h nulent I ricusion

\\lar kenng aiul Pnwhu i stat u un

\\tanagenwni Pierson G. Mopes Robert P. Morgele hnuleni iein mon Netu or L Vu e hnutent h od ui non Edward L Scanlon Stephen Robinowlta i sn unu Vu e hnulent Vu e hnutent. In hnol"Ks I mpimer Rolanons George F. Verge Brandon R. Tertikoff "rnuitni and unti i sn uin r h nutent I mm tanonem

( Hfu n GI - l ungssam laghtmW arul Pnwhn noin

'/3

v 4

Operating Management nuanunn Industrial and Aerospace Electrical Distribution Canada / Latin America Power Systems and Control j

1'

/

?

William R.C.Stundell Chan man arul Chief 12n uthe Offurt.Gl. Canada t

j Robert T.E. Gilleeple i

k trecuine Yke Presulent l

Y f,

y v

OE Supply

/

i; o -

k J. Richeral Stoneelfer

~

s l. _1 Vu e h esklent. Gl. Suppl)

John A.Uraluhart John D. Rittenhouse Gary L Rogere i

Semor Vu e Premient, henior Vue Premient, henuir Yke Preskicnt.

Gl. liulustrial urut hmer Gl. Acrospite Gl: 1.lecttkal Disitibutiori M Petroleum l

Systerns arul Control Renatal G. Spence Deviel C.Genever-Wetling Yu e Pr esklent. Iklense Sistems Robert P.Colline h esulent arul Chic ( laccuthc Vue Peculent.Gl. hmer Preskicni aiul Chrf laccutn e Of f u rt. laki Petroleum Generatuin James S. Folter Offurt.01. lanut Automanon Corporation Yke hemient. Actmp.uc North Amerkn. Inc.

Gerelei R. Cote

'In huolog) c Yke reculent. Customer serse David M. Engelman

[

Jack A.Frohbieter yu e p,c,kieni, sak.s Aerospace Technology William O. Gingrich Vu c hemtent. Government i

Vue hemient. klarLcting asul lIntronk Sptems Thomas E. Cooper l

Peruluct blanagement Vue hculent. Acrosp.uc Arthur L Glenn lWotors

'Ict huology i

Russell L Nell, Jr.

Vu e hrsklent. Conununk ations i

Vur hculent. hmen avul hirairgu Sisicms Stephen J. O'Brien Generation Operathns Vue henktent.GI Motors Lawrence R. Greenwooel Environmerstal Programs i

f ugene J. Koverik Vuc hemient. Astro $p.u e Roge D.Morey Ykr hemicat.GI lwct Ve c I r rmlent. ha*cs W. Hog *r Strolow Delh er) arki Control Reymond P. Kulak Vi.c hcs. den'. l.nvironnental i

i i

Vue heulent. Aerosp.uc hogrann Joelknser Operations i

l Yu e Premk nt.01 Drac Transportation Systems s.stenu John NI. Levin Ykc hertent.Ose m hgsie.v.

Michael C,Lodthert Licencing /Dadin; J

Delbert L Wilhemwn Vk e besklent.

1

@s ae hepuA. Smith

' chael s'ke hrskicut. Gl. t rutustry argj cg. Tun,p,rtatio.: $ptena Stuart A. Fisher lene. AirtrafI herulent inul Chhi 12cruthe Utihty hates Untronu s Berttem Welfo Ofhccr. Gl. asul kCA l.k ensing Management Operation. Inc..

Vice Presiecut.Gl. Nuclear piobe t ETinken International mal G'l/lruhng Compan3

)

1.rergy

\\ uc hemtent. i mante and Infor mation 'In huolop kb. ; j (g Marketing and Sases

'A.?'

Appbances s

',4 A

Communications and 4

Clyde A.Keeton Servicea

- 6(44 f [3.

Y.c hemiew Marketmg and f.alea.

jf

' 5,k

• g ' - (*W~ W W M

gr..

All, ort J. Fetho

<$q%Fy4i Vu e he,6&nt, Automotive 4,<<>,

f,

, pQ1

,. y

1. i l

4 g y 90

g c 5

irriuc.ry Marketing arut Sales

- s.

S., /..

y

• 3. 9 J.,

u

,8

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j 2 Henry J. Singer

f. A?Y, *.

. ' i.. k., e g @ )

',,/ ~

te 1

l 3.h 9P [

Yke Presklent. Area Alanagement

)

amt sales f '

j./

Paolo Fresco

• 1 Senior Yke President.

f. l G1. International Alberto F. Corrut!

RogerW. Schipke Yn e Presklent, f inaru c Scruor Ykc hesnient.

Eugene F. Murphy aruillusierss support Gl. Appharues knut Wc Premient, Gi Communicationn aiul Alistelt C. Stowert Richeral L Burke Sets kes Yk e Premient. Muktic I ast.

Yke Preaktent. 'Icc hnologs.

Africa. South Asia. LLhiR. Area hruhart Design and Hellene S. Runtagh Manufacturing hesulent.GI Information Thomas W. Tucker Scrs k es Yke heskicnt. Aua-P.uifu Bruce A. Enders Area Yk e besklent. Worldwkle Mar Leting arul Pnuluct Management Jeffrey R. Immelt i

Yk e Prcudent. Gl. Consuner l

Servkr Lawrence R.Johnston Vk e Presklent, Sales arul Distribution n4 j

2 FinancialSection

.t -

f Sunnnmy Data General l'.lectric Company arul c orisoli(latect aHiliates (Dollar amounts in snillions; pet. share amounts in clollars) 1989 1988 1987 Revenues

$54,574

$50,089

$48,158 Net earnings 3,939 3,386 2,915 Dividerxis declarni 1,537 1,314 1,209 1

lYrshaic Net earnings 4.36 3.75 3.20

'I Dividends declared 1.70 1,46 1.32 W Farned on average

~

share ownenf equity 20.0 %

19.4 %

18.5 %

Perrentincrease from prior year Revenues 9%

4%

15 %

Net earnings 16 16 17 Dividends decla.nl 17 9

12 Net earnings per share 16 17 17 Dividends declainl per shair 16 10 12 r

C0ntents inder*ndant Auditors' Report 45 Audhed financialstatements Earnings 2ti Financial lbsition 28 Cash Flows 30 Notes to Consolidatal Financial Statements 46 Management's discussion of Operations Overview 32 Industry Segruents 34 International 37 Financial Resources atxl 1.iquidity 38 Selected Financial Data 42 Financial Responsibility 44 25

e e

F l

Statement ofEarnings l

l General Electric Company i

arxlconsolidated affiliates I

For the years c xted Dnember 31 (In milhons) 1989 1988 1987 Revenues Sales of g(xxis

$31,314

$28,953

$29,937 Sales of senices 9,673 9,840 9,370 Otherincome(note 3) 690 675 655 l

Earnings of GEIS GEFS revenues frum o[rrations (note 4) 12,897 10,621 8,196 Total trvenues 54,574 50,089 48,158 Costs and expenses (note 5)

Cost of g(xxis sold 22,827 21,155 22,359 Cost of senices sold 6,873 7,676 7,290 Interest anxl other finarxial charges (note 7) 6,591 4,817 3,912 insurance Ix>licy holder losses atxi benefits 1,614 1,501 1,560 Pnnision for losses on financing receivables (note 8) 527 434 290 Other custs atxl expenses 10,355 9,724 8,406 Unusual expenses, including piuvisions for business testnicturings (notc 9) 1,118 Minority interest in ax t earnings (loss) ofcomolidate<bffiliates 84 61 (4)

'Ibtalcosts arxl expenses 48,871 45,368 44,431 Eemings before income taxes, extraordinary >mm and cumulative effect of accounting changes 5,703 4,721 3,227 Pruvision forincome taxes (note iO)

(1,764)

_Q,,335)

(1,108)

Earnings before extimordnery item and cumulative affect of atoounting changes 3,939 3,386 2,119 Extmordinaryitem (note 25)

(62)

Cumulative effect toJanuary 1,1987 of accounting changes t

initial application of Statement of Financial Accounting Standants No. 96

" Accounting for Income Taxes"(note 1) 577 Change in overhead recorded in inventory (note 1)

_ 1 81 Not earnings

$ 3,93fs

$ 3,886

$ 2,915.

Not eamings per share (in dollars)

Bef ore extraordinary item anxi cumulative effect of accounting changes

$ 4.36

$ 3,75

$ 2.33 Extraordinaryitem (note 25)

(.07)

Ctunulative effect toJanuary 1,1987 of accounting changes initial application of Statement of Financial Accounting Starxiants No. 96

" Accounting for income Taxes"(note 1)

.63 Change in overhead recorded in inventory (note 1)

.31

- Not oamings por share

$ 4.36

$ 3.75

$ 3.20 Dividends declared per share (in dollars)

$ 1.70

$ 1,46

$ 1,32 The notes to mnwlidated hnancial statements on pages 46-68 are an integral part of this statement.

26

• s

(

GE gel 3 1989 1988 1987 1989 1988 1987

$31,526

$28,958

$29,937 9,693 9,866 9,378 704 680 649 927 788 552 12,945 10,655 8,225 42,650 40,292 40,516

_ 12,945 10,655 8,225 22,839 21,160 22,359 6,893 7,702 7,298 726 669 645 5,912 4,177 3,277 1,614 1,501 1,560 527 434 2!K) 6,662 0,250 5,979 3,708 3,484 2,440 91 1,027 38 29 1

46 32 (5) 37,158 35,810 37,309 11,897 9,608 7,653 5,492 4,482 3,207 1,138 1.027 572

_1,096)

(1,088)

(211)

(239)

_ (20)

(1,553)

(

3,939 3,386 2.119 927 788 552 (62)

(62) 518 577 2f,1

$ 3939

$ '1,386

$ 2.915

$ 927

{ 788 s

$ 1,008

- In ihe supplemental tonuihdr. ting data on this page,"GE" means the pre 1988 lusis of coim>hdation as dex1ihed in nott I to Lle conw>hdated hnandal statements;

• gel'S" neans Geteral Electric Financial Senices, Inc. and aH of its afhhates acd esmciated comp Anics. Transactions hetween GE aint GEIS has e leen chminated Irom the General Elcaric Company and covaohdated afbliates"tolumm on the pieceding pap. Eliminations are shown on page 47.

27

v

[

Statement ofFinancialPosition p

General Electric Company arxlamsolidated afTiliates i-At Dercanter 31 (in millions) 1989 1988 Assets Cash atxl exjtiivalerits (note _11)

$ 2,258

$ 2,456 Marketable securities canied at cost (note 12) 6,799 5,510 Marketable securities carried at snarket (note 13) 8,488 5,089 Securities puithased under agirements to resell 16,020 13,811 Current arceivables(note 14) 6,976 6,780 inventories (note 15) 6,655 6,486 GEFS financing receivables (investment in time sak s, loans arxl financing leases)- net (note 16) 41,779 35,832 Other GEFS retrivables(note 17) 5,476 4,699 Pmpeny, plant arxl equipment (including equipnent leased to others)- set (note 18) 15,646 13,611 Investnwnt in GEFS Intangible assets (note 19) 8,822 8,552 All other as,ets (note 20) 9,425 8,039 Totalassets

$128,344

$110,865 Liabilities and equity Short-term bormwings (note 21)

$ 37,200

$ 30,422 Armutus payable (note 22) 6,666 0,001 Securities sold uivier agtrenents to iepurchase 16,555 13,864 Securities sold but not yet purthased, at market (note 23) 4,090 2,088 Ptogiess collections and price adjustnwnts accrued 3,315 3,504 Divideixls payable 426 369 All other GE current costs anxl expenses accrued (note 24) 5,650

!.549 long-tenn bormwings (note 25) 16,110 15,082 Resertes ofinsunuxe affiliates 5,032 4,l 7 All r;ther liabilities (notes 17 aiul 26) 7,866 6,986 Deferredinconw taxes (note 27) 3,543 3,573 Totalliabilitkn 106,453, 91,910 Minority inturst in equity of consolidated afliliates (note 28)

I 00l 981 l

1 n

. Common stock (926,564,000 shares issued) 584 584 Other capital 826 823 Retairxxlearnings 20,352 17,950 less common stock held in treasury

_ (872)

(891)

- Total share owners' equity (notes 29 and 30) 20,890 18,466 Totalliabilities and equity -

$128,344

$110,865 Commitnents arxl mntingent liabilities (note 31)

The notes to consolidated financial staienwnts on piges 46 68 are an integral part of this staienent, 28

.P 4

GE gel'S 1989 1988 1989 1988

$ 1,749

$ 1,823 509 633 49 80 6,750 5,430 8,488 5,089 16,020 13,811 7,218 7,110 6,655 6,486 41,779 35,939 5,856 4,806 9,666 9,360 5,980 4,251 6,069 4,819 7,048 6,984 1,774 1.568 5,653 4fi21 3,772 3,418

$ 44,107

$ 41,283

$ 90,928

$ 74,945 1,696

$ 1,861

$ 35.740

$ 28,731 2,901 2,136 4,144 4,132 16.555 13,864 1,090 2,088 3,P 13 3,501 426 369 5,650 5,549 3,947 4,330 12,165 10,862 5,032 4,177 5,635 5,481 2,236 1,545 (636)

(64I) 4,179 4 Jil,4 JQS4 22,589 M,141 69,373 283 228 718 753 584 584 1

1 826 823 1,702 1,379 20,352 17,950 4,366 3,439 (872)

(891) 20,890 18,466 G,069 4,819

$ 44,107

$ 41,283

$ 90,928

$ 74,945 in the supplenwntal consolidating data on ibis page,"GE " incans the pre-1988 lasis of consolulation as descrited in note I to the mnsolulated financial statenents;

• Gl.I h" means Gerwral 1:lectric hnancial Services, Inc aiul all of its af hliates aint e.swriated mmpanies. Transactions letween Gl'. aiul Gl.I $ hase leen climinated from the "Gerwral l lectric company arul consolidated alhliates" columni on the premling [mge,1;liminations are shown on page 47, 29

e e

Statement ofCash Flows General Electric C<nnpany and consolidated affiliates Fo-the years ended Deccanher 31 On millions) 1989 1988 1987 Cash flows from operating activities Net earnings

$ 3,939

$ 3,386

$ 2,915 Adjustinents to reconcile net earnings to cash provided from o[x rating activities Extraortlinary item anxl cumulative effect of changes in acct >unting principles (796)

Deptreiation, depletion arxl amortization 2,256 2,266 1,913 Earnings retair.ed by GEFS Deferred inctnne taxes 281 124 37 Decrease (increase) in GE cuitent receivables (100) 123 138 Decrease (increase) in GE inventories (167)

(209) 375 i

increase (decrease) in accounts payable 503 303 149 increasein insurance reserves 486 315 669 Provision for losses on financing trceivables 527 434 290 Net change in certain broker-dealer accounts (872)

(573)

(103)

Allother operating activities (230) 933 252 Cash provided from operating activities 6,623 7,102 5,839 Cash flows from investing activities Property, pla it arxl equipment including equipment leased to otherr Additions (5,474)

(3,681)

(2,277)

Dis [xisitions 1,294 470 890 Net increase in GEFS financing n eceivables (6,649) 4,057)

(4,5*. 5)

Paynents for principal businesses purrhased, n-;t of cash actiuired (1,660)

(3,504)

(555)

Wucents fitrn principal business dispositions 880 646 All ot'ner investing activities (400)

(1.620)

(1,097)

Cash used forinvesting activities (15,089)

Ji3.512)

(&9S8)

Cash flows from financing activities Net change in txirrowings (less than 9(klay naturities) 7,360 3,838 2,519 Debt having matnrities more than 90 days Newly issued 8,078 11,324 8,219 Repayments and other reductions (7,710)

(8,801)

(6,883)

Sale of preferred stock by GE Capi'al 600 Disposition of GE shares from treasury (mainly for employee plans) 509 356 361 Purthase of GE shares for treasury (490)

(387)

(846)

Dividerxis paid to GE share owners (1,479)

(1,263)

(1,177)

Cash provided from (used for) financing activities 6,268 5,697

_ 2,193 increase (decrease) in cash and equivalents during year (198)

(713) 1,064 Cash arxl equivalents at beginning of year 2,456 3,169 2,105 Cash atxlequivalents at end of year

$ 2,258

$ 2,456

$ 3,169 The notes townwlidated financial statements on pages 46-68 are an integral part of this statement.

30 a

m t---

p",

J.]

L 4, m

k. '

p GE' GEFS y

1989 1988 1987' 1989 1988 1987 L

V

- $ 3,939

$ 3,386

$ 2,915

$~ 927 788

$ 1,008 b

~ (796)

(456) -

1,524 1,522.

1,544.

732 744 369 (927)

(788).-

(552) 178-(015)

(158) 103 339 195 (12)

(170) '

111 (209) 375 (167) 693 (342).

21 (75) 693-48 486 315 669 l

527 434 290 (872)

(573)

(103)

(468) -

440 413 256 751 159

4,760 3,624 3,873 2,084 3,491 2,179 2(2,217)

~ (1,884)'.

(1,698)

(3,257)

(1,797)

(579) 205-118-410 1,089 352 480 i

(6,542)

(5,943)

- (4,627) i (759).

(2,963)

(1,101)

(541)

(555)

]

880 646 a-115-444 (6).

(801)

(2,007)

(1,282)

- (2,656)

(3,405)

(648)

~ (10,612)

(9,936)

(6,563) 850 (466)

-(961) 6,576 4,249 3,515' 204 934 396 7,874 10,291 7,818 l

(1,772) -

(30)

(238)

(6,046)

(8,771)

(6,615) 600

509' 356 361 (490).

(387) -

- (846)

]

1(1,479)

(1,263)

(1,177)

}

(2,178)-

(856)

(2,465) 8,404 6,369 4,688 s

- '(74)l (637) 760 (124)

(76) 304 i1,823-2,460 1,700 633 709 405

'$ 1,749-

$ 1,823

$ 2,460

$ ~ 509

$ 633

$ 709 In the supplemental consolidating data oa this page,"GE" means the pre-1988 basis of consolidation as described in note I to the consohdated financial statements; "GEFS" means General Electric Financial Services, Inc. and all of its affiliates and associated companies. Transactions hetween GE aiul GEFS have been eliminated from the " General Electric Company and consolidated afbliates"colunms on the preceding page. Eliminations are shown on page 47.

31 1

a

n c

Management's Discussion ofOperations Overview panly offset by nuxlestly higher prices, if sales for the General Ekrtric Company's consolidated financial state, three years 1987 1989 were adjusted for the effect of ments include the detailed effects of adding to the Com.

acquisitions aixl dispositions, the increase in 1989 fron.

pany's manufacturing aix1iixhistrial se vices businesses 1988 would have tx eri alx>ut 3% aixi 1988 wotild liave the accounts of General Electric Financial Senices, Inc.

leen up alx ut 4% from 1987.

(GEFS);

e GE's other income from a wide variety of sources has Note I to the consolidatal financial statemen:s explains totalal between alxmt $650 million aixl $700 million for the consolidation procedure. Among other things, that each of the last three >rars. See note 3.

note also explains how the tenns *GE" or "GE except a (;EFS irvenues, or carned income, from olwrations GEFS" aix! *GEFS" are used in this relmn to help readers for 1989 were $12.9 billion, up 21% from 1988's $10.7 uinierstaixl die various data. These tenns air used fie-billion, which was 30% more than 198Ts $8.2 billion. The quently in this hianagement Discussion for clarification or principal reason for the increases has been higher levels of emphas,s.

assets in GE Capital, including the effect of acquisitions.

i Consolidated net earnings for 1989 were $3.939 billion, or Yields (i.e., piites or interest rates paid to GE Capital by its 16% moir than for 1988.This was the thini consecutive customers for its financing of their needs) increased from year of strong double-digit eamings increases. Operating the prior period in lxith 1989 aixi 1988. Note 4 shows margin for GE of 11.3% of sales-an all time record -

GEFS revenues from operations by principal type of reflected continuing widespread pnxtuctivity improve-

activity, ments aixi revenue gains in both domestic and interna-Principalcosts and expenses for GE are those classified as l

tional markets. While virtually all Ley businesses costs of goods amt senices sold and selling, general and contributed to the higher caniings, particularly go(xl 1989 administrative expense, performances were reported in GE Financial Senices, e " Operating margin"is sales of goods and senices less Plastics mxl hiedical Systems. See Industry Segments the costs of sales and selling, general anxi administrative 1

beginning on page 34 for addaional detail about perfonn-expenses. Operating margin was 11.3% of sales in 1989, ance by various businesses of the Compan);.

up from 9.6% in 1988. Exchiding abnonnally high refrig-Net earnings for 1989 and 1988 did not include cor5x" erator compressor warranty expense provisions in 1988, rate provmons for business restructuring expenses, nor operating margin for that year would have been alxmt did either year include any impact from accounting 10.7%. These recent improvements follow several years i

changes. Net earnings in 1987 also reflected solid operat-during which the margin rate was in the 8-10% range and mg perfonnance, but analysis of results for that year was stem direcdy fmm dw ongoing focus throughout the comphcated by two types of transactions that essentially Company on impiming productivity. GE's total cost pro-equaled each other in net earnings. These were a reduc-ductivity, which excludes the effects of inflation, averaged j

uon m pre-tax and after tax eaniings cjmsed by unusual 5% for the last two years compared with results in the and extraordinary expenses ($747 million after taxes),

1-2% range in the early yean of the 1980s. There were l

mamly for business restructurings to improve future prof-no corporate-level business restructuring expense pro-nability; and an mcrease m after-tax carnings ($720 mil-visions in 1989 and 1988 to compare with the $1 billion lion) from two accounting changes, one involving mcome 1

taxes and the other involving overhead recorded in inven-tories, as explained in note 1.

GE/S8 P earnings per share increase / decrease compared with 1984

]

The following paragraphs discuss various aspects of the l

consolidated Statement of Earnings on page 26.

809 Consolidated revenues of $54.6 billion in 1989 were 9%

more than the $50.1 billion for 1988 following a 4%

- f$

increase from 1987. The principal components of consoli-dated revenues are " sales of goods and senices" by GE aml

)

" revenues from operations" or " earned income" from 3

GEFS.

aa o GE's sales of goods aix! senices for 1989 totaled $41.0 mww 0

billion, a 6% increase from the year before. Virtually all of the 1989 increase came from a higher volume of ship-

-m ments, with slightly higher overall prices having only a 198s 1986 1987 1988 1989 minor effect. Sales in 1988 were down almut 1% from 1987, with the effect of about 2% lower shipment ve' ie 32 4

V s-providal in 1987. Those innvisions in 1987, anxl for sev-Constant dollar sales per GE employee eral years prior to that, were largely targetal at improving fin thousands) 1 cost structures.

$100 1

- o GE's interest expense in 1989 was $726 million, up 9% fnun $669 million in 1988, which was 4% more than in 140 1987. Iligher interest expense in 1989 was due to a higher IM j

average level of horrowings stemming from 1988 anluisi-tion activity. The effect of this was partly offset by some-what lower avemge 1989 interest mtes/lhe inct ease in interest expense in 1988 fnmi 1987 was mainly from higher average interest rates partly offset by a somewhat lower average level oflorrowings.

Y GEFS'principalcost is interest crpense.

isss asse iss7 aves-ions o GEFS' interest expense totalal $5.9 billion in 1989, 42% more than in 1988, which had been 27% more than for differences between the statutory ami effective rates.

in 1987. The increased interest expense reflects the higher Together with other infonnation about income tax pnwi-L

. level oflorrowings that have been used mainly to invest in sions, an analysis of the differences trtween the U.S. fed-I carning assets involved in a wide variety of financings eral statutory rate ami the consolidatal rate can be found made available to third parties /lhe comimsite interest rate in note 10.

incurred for GEFS' finance activities was 9.60% in 1989 Dieldends declared totaled $ 1.537 bilh.on m 1989, or $1.70

(-

compared with 8.39%. 1988 and 8.11 % m. 1987.The m

I *

" ' '. ^ * * * *" I " #' '

""P""I "' "" 5"I.

" spread," or difTerence hetween interest rates GEFS pays to its leixlen and nues it charges to its custonwrs, nar.

aent eanungs un suplon enhaiycal pnxluctive capabihty an to pm e a equ te Gnanaal msources k nuenial i

~ rowed in 1989 after increasing smnewhat in the previous and external growth opportunities. The fourth-quaner I*" Y"""'

1989 increase of 15% in dividends declared marked the o - Among GEFS' other costs, the provision for losses 14th consecutive yrar of dividend giuwth, on financing receivables of $527 million in 1989 was up

$93 million from 1988, which had been $144 million more Return on eage shge owners'equky n achal 20.0%.in than 1987. At year-cixls 1989 and 1988, GEFS' reserve 89, up from 19.4% m 1988 atul one arx1 one-lialf points covemge was atual to 2.63% of financing receivables com-beun than for W87. Infonnaton about dw fne7 ear GE pared with 2.59% at the eml of 1987. Insurance policy conunon shan n purchase program announcal m

~ holder losses aid benefits expense increased by 8% to November 1989 can be found m this report in the section b

$1.6 billion in 1989 after having declined nxxtestly the diat Wscussa Fmanaal Raoun:es and Liquidity starting

"" P"M" 38~

_ previous year. The cunent-year increase was principally

_i due to increased losses on life reinsumnce, partially offset The globaleconomie andpoliticaloutlook has numerous by lower losses due to the reduced property and casualty uncertainties. For example, it is well known that the U.S.

insurance business.

government is seriously considering reductions in defense

? The interest ofminority share owners in the equity of con-spending. It is also well known that there is no consensus solidated affiliates is relatively small but has been growing on how much and what type of rnluctions there will be or in recent years. For GE, the increase represents mainly the Imw and wlu n such raly,ictions will be unplemented.

About one-eighdi of M s conmMatal n wnues inigMw impact of recent aggressive fonnation ofjoint ventures affectnH>y such raluctions. Ne Indusupegnwnts on and alliances aimal at increasing global competitiveness.

For GEFS, the increase resulted principally from GE Capi-d"' "'# P"M.e.) longer range, reduced defense spending irsuh in a lan fakmHmdget & hat, !wer intent am tal's sale of variable rate preferred stock to third parties in rates, aiul consequent stimulation of domestic investment l

1988 to augment its equity base. There were no further

- sales of such stock in 1989.

and canunnic grwth Funha, globakpInnunitia fm market growth such as that antiapated f rom the sched.

The consolidated efective income tax rate was 30.9W in uied European econona integration in 1992 appear plen-1989 compared with 28.3% in 1988 and 34.3% in 1987.

tiful. Despite these uncertainties, management believes (Ihe U.S. fedemi statutory rate was 34% for loth 1989 that the strength of GE's diversity ami worldwide leader-HIxl l988 comIMred with 40% in 1987.)The decrease in ship in key businesses position the Company to continue the U.S. federal statutory rate was the main reason for the gml performance into 1990 and beyond.

lower effective consolidated rates in 1989 and 1988 ann-pared with 1987. There are, however, numerous reasons 33

s' Industry Segments e Aircrafl Engines revenues were up 6% in 1989 follow-J Consolidatal i xtustry segment revenues ancl operating ing a small decrease in 1988 fmm 1987. Operating profit j

i profit fin the last five years appear on the op;x> site page, continued to increase through 1989. New engine or lers of The presentation of consolidatal industry segments is in

$8 billion in 1989, ibilowing the very strong 1988 perfbrm-two parts, one ihr GE except GEFS anxl one for GEFS.

ance of $9.7 billion, brought finn backlogs to $13.3 bil-Consistent with years before 1988, GE revenues arxl oper, lion at the eixl of 1989 compaint with $12.4 billion the

. ating pmfit continue to include camings of GEFS. Reve.

year belbre. Of the 1989 backlog, about 45% is schulutni l

nues and operating profit ior GEFS by the industry thr completion in 195K). In addition, customers have segments in which it coixtucts business are ptrsented sepa.

options that total $22 billion. Although military programs rately with appropriate climination of GEFS' earnings as are important to Aircraft Engines' business, the surge in well as the minor effect of transactions between GE and commercial engiirs and accelerating growth in parts and i

GEFS segnwnts. Additional financial data plus detailed services provide a sound base as the decade of the 1990s descriptions of each segment can be fouixt in note 33.

begm, s.

Consolidated operatingprofit is the principal source of GE's a Broadcastingoperatingpmfitincreased 12%in net earnings, and the relationship between the two is 1989 over 1988, continuing the impmvements since GE depicted in the chart on this page. Consolidated opemting acquired NilC in mid-1986.The 7% decline in 1989 reve-profit exceeded $7 billion in 1989 with three segments-nues reflected the lack of a counterpart to coverage of the Aircraft Engines, Materials and Financing-each surpass-1988 Olympic Games. A principal reason Ihr better oper-ing $1 billion for the first time. As shown in the chart, ating pmfit was higher pnxiuctivity, which was panly om operating pmfit had dipixxl some in 1986, although net set by stan-up costs associated with launching CNitC, the Consu mer News an-l ilusiness cabic channel anxl related carnings continued a steady increase. Operating profit in cable acuvmes.

1987 was after absorbing $ l.069 billion of unusual cargo-

' rate-level expenses as noted earlier in this Management's

• Industrialoperating pmfits increased 6% in 1989 to Discussion. There were no such unusual expenses in 1989

$847 million with improvements in most ongoing busi-or 1988. Comments on each segment follow, nesses. Flat revenues reflected a number of business dispo-e Aerospace revenues have been at alumt the $5,

sitions, principally the semiconductor business sold in late lion level (br the past three years, and operating p 1988. Improved opemting profits in 1989 were led by Electrical Distribution and Control, which included the have ranged between $600 million and $650 m;. lion,

t the same years. New onters received of $6 billion in 19w consolidation fbr part of the year of results for GE's Euro-were up 8% from 1988, bringing the backlog of firm pean controls ventures with GEC of the United Kingdom, unfilled orders at December 31,1989 to $8.0 billion, of Transportation Systems 1989 operating profits were sub-which approximately 40% is scheduled for completion in stantially higher on a strong increase in shipments 1.ight-

1990, ing operating profits were up somewhat from the prior Although there was a significant increase in orders fmm year on slightly higher sales. Factory Automation,includ-international customers in 1989, much of the Aerospace ing Drive Systems, had a go(xl increase in operating profit business is performed under contract for the U.S. govern-and sales. Motms operating profits for 1989 were about ment, mainly for the Department of Defense. Despite orders growth over the past two years leading to a record Consolidated operating profit and not earnings i

backlog consisting of hundreds of different contracts, (In billions) l.

management expects that some defense indusu y adjust-

$7.3 ments will take place in response to changing levels of I

defense spending. Management has developed long-range 6.0 contingency plans to anticipate such possible changes, including a contemplated reduction of approximately (5

l 10,000 positions (about 25%)in the work force over a thiee-year period. In 1989, approximately 4,000 of this

' L"$,"J" 30 reduction occurred - through attrition, a business dispo-sition and layuffs. The need Ibr similar actions, if neces-

' loc

=

i.5 l

sary, will be determined over the next two or more years on 0

I a business-by-business /h> cation-by h> cation basis as busi-l ness conditions evolve. No specific decisions have yet been

" 85

" 87 made regarding potential additional actions.

l 34

p L.q_

h-s Suinmmy ofhadushy Segments General Ek ctric Onuliany anxl consolidated alliliates

- nir the pars ended December 31 on millions) 1989 1988 1987 1986 1985 t

Revenues -

GE Aerospace

$ 5,282

$ 5,343

$ 5,262 '

$ 4,318

$ 3,085 Aliaaft Engines 6,863 6,481 0,773 5,977 4,712-11nxulcasting 3,392 3,638-3,241 1,888 51 Irxlustrial 7,059 7,061 6,662 6,770' 6,946 hiajor Appliances 5,620 5,289 4,721

_4,352 3,617 hiaterials 4,929 3,539 2,751 2,331 2,119

_ lbwerSystems 5,129 4,805 4,995 5,262 5,824-x Technical Pnxlucts ux!Senices 4,545 4,431 3,670 3,021 2,317 Earnings of GEFS 927 788 552 504 413 AllOther 319 394 3,176 3,379 1,071 Corlx> rate items aixi Elitninations (1.415)

(1,477)

(1,287)

(1,077)

(903)

TotalGE 42,650 40,292 40,516 36,725 29,252 GEFS Financing 7,333 5,827 3,507

'2,594 2,469 Insurance 2,710 2,478 2,21/

2,026 1,332 Securities llroker-Dealer 2,897 2,316 2,491 1,176 AllOther 5

34 10 18 4

TotalGEFS 12,945 10,655 8,225 5.814 3,805 El%inations (1,021)

(858)

-(583)

(526)

(433)

Consolidated revenues

$54,574

$50,089

$48,158

$42,013

$32,624 Operating profit GE Aciuspace

$ 646

$ 640 603 608

$ 437 Aircraft Engines 1,050 1,000 940 869 673 Ilroadcasting 603 540 500 240 20 lixlnstrial 847 798 302 575 658 hlajor Appliances 399 61 490 462 399 hlaterials 1,057 733 507 424 330 lbwer Systems 507 503 199 354 740 Technical Products and Services 589 484 275 112 22 Earnings of GEFS 927 788 552 5 41 413 AllOther 176 168 72 162 376 TotalGE 6,801 5,715 4.440 4,310 4,068 GEFS Financing 1,152 899 636 (99) 501.

Insurance 407 334 183 132 48 l

Securities llrokerd)ealer (53) 64 (23) 83 AllOther (368)

(270)

(224)

(177)

(125)

Total GEFS 1,138 1,027 572 (61) 424 Eliminations (903)

(802)

(562)

(513)

(420)

Consolidated operating profit 7,036 5,940 4,450 3,736 4,072 GE interest aix! financial charges (net of climinations)

(703)

(655)

(635)

(616)

(354)

GE items not traceable to seginents (630)

(564)

(588) 7 (287)

Earnings before income taxes, extraordinary item and cumulative effect of changes in accounting principles S 5,703 5 4,721

$ 3,227

$ 3,127

$ 3,431 The notes to consolidated financial statements on pages EfiM are an integral part of this statement. "GE" means the pre 1988 basis of

consolidation as described in note I to the conmlidated financial statements: "GEFS" means General Electric Financial Servi < es, Inc. and all ofits affiliates and associated companies. Operating profit of G E segments excludes interest and other financial charges; operating proht of G EFS includes the effect ofinterest and dinount, whn h is the largest element of GEFS' operatmg costs.

35

-t

/

I even with 1988 on nuxlestly higher sales.

were very strong in the secorxl half of 1989. The backlog o Major Appliances revenues were $5.6 billion in 1989, of unfilled orden was $1.5 billion at year-crxl 1989, about a 6% increase from 1988. The curient year included sales 75% of which is scheduled to be ship;wd b 1990. Conunu.

. fnnn the Euro[wan venture beginning in the secorxl nications arxlSe:Tices had a g(xxl inctease in o; crating quarter. This incr ease was partially offset by the absence of profit with panicularly g(xxl contributions by GE Ameri-l tevenues of businesses that have been sold, mainly Roper's com, infi>nnation Services anxi Mobile Communications.

outdoor [xnver pnglucts. Ostler rates weakeried during a Earnings of GEFS continued to increase in 1989.

the seco xl half of 1989 although core pnxtuct lines Comments on GEFS industry segments appear below. Of showed some market-share gains. The substantial increase GEFS' 1989 net earnings, GE Capital's contribution was in 1989 operating pnifit was primarily lecause prior-year

$816 millior. 36% more than 1988's $600 million, which resuhs were impacted severely by refrigerator compressor-was 28% more than 1987's $470 million. (The 1987 related warranty provisions, amount exdudes the cumulative effect of the income tax o Materials revenues were up $1.4 billion in 1989 from accounting change arxl extraordinary loss discussed in the year before, an increase of 39%. A large part of the note 1).

)

increase was due to having a full year of Borg-Warner's a Financing operating profits continuni to increase chemicals operations in 1989 compared with only the last very substantially as they have cach year since 1986. The quarter of 1988. Incoming onter rates for Plastics slack-level of carning assets and the impact of changes in inter-ened in the latter part of 1989 reflecting a slowing in auto-est rates on borrowing costs anxi financing yields are motive mxt appliance markets. The 44% increase for 1989 important factors in Financing operating profits. 'liital operating profit reflected higher physical volume of Plas-assets of GE Capitalincreased by 23% in 1989 from 1988, tics' shipments, including a solid contribution from the which had leen 30% more than 1987. Financing yields

)

Borg-Warner Chemicals acquisition. Superabrasives also increased again in 1989 following an increase in 1988. GE contributed to the higher operating profit for 1989. Sili-Capital's composite annual interest rate increased 119 basis cones aixi 1. add Ibtroleum profitability were alxmt the points in 1989 compared with a 43 hasis-[x> int increase in same in 1989 aixl 1988.

1988. These increases in composite interest rates refk cted o PbwerSystems revenues were up 7% in 1989-the principally the effect of higher short-term interest rates first upswing in live years. Operating profit improved on commercial pa per borrowings. GE Capitars lending slightly. Power Generation had improved operating profit

" spread"(difference between interest rates charged to cus-reflecting higher shipments of gas turbines aixt wide.

tomers arxl interest rates paid to leixlers) decreased some-spread pnxluctivity improvements. Other businesses in what during 1989. The spicad had increased somewhat the segment had somewhat lower results than last year.

during 1988.

Spurred by strengthening demand by domestic utilities e Insurance operating profit increased 22% in 1989 and a $750 million order for the world's largest combined-fnnn 1988. Principal reasons for the 1989 improvement cycle power plant to be built by Tok)u Ek ctric Power were the inclusion of all operations of FGIC Corporation Company, Ibwer Generation recorded new orders of as a result of completing its acquisition cady in 1989 s

almost $4 billion in 1989 - over 40% ahead of 1988. The and improvement in the mortgage insunmcc market.

- Ibwer Generation backlog was $5 billion at December 31, l

1989, alxmt 45% of which is scheduled for completion in Totalassets of GE Capital l

1990.

(in billions) o TechnicalProducts and Services operating profits un were up 22% in 1989, continuing the good increases of prior years. The revenue increase of only 3% in 1989

.m reflected the impact of s<nne miscellaneous business dis;x>-

sitions.1ligher operating profit was sparked by Medical s

Systems, where a sharp increase in operating profit reflected higher volume in x-ray, computed tomography 24 and magnetic resonance imaging, as well as g(xxl pnxluc-tivity improvements. Medical Systems equipment orders 12 o

1985 1986 1987 1988 1989 36

ds

. Employers Reinsurance Cor;x> ration, which is the largest Totalinternationalrevenues single business in the insurance segment, had imxtestly (in billions) l higher net earnings in 1989. ERC has increased revenues

$ 1r, each year since 1986.

32 o Securities Broher Dealer (Kidder, Pealxx!y) had an

- olerating loss for 1989 compared with a profit in 1988.

9

Most of the 1989 loss was incurt ed during the first quarter 8 od'a of the year, and, as revenues improved mxt costs wer e E ^"~ "

reduced, the last six months were alxmt break-even.

8 ""d" amo.

Kidder, Pealxxly took steps during 1989 to exit certain a i o.oi.

businesses, to upgrade staffin others amt to streamline the organization.

g o 'Allother GEFS consists principally of acquisition-198s 1986 1987 1988 1999 trlated interest expense not alh>cated to the segments.

o GE items not traceable to segments include expenses in addition, ex[x>rts from GE operations in the United such as the Corporate R&D Center ami cor;ximte staffs States to G E alIlliates offshote were $ 1.107 billion in 1989, and income from cor}mrate treasury activities.

$874 million in 1988 aixl $801 million in 1987.

n GE again sharply increased its positive contribution to 1

p; int:rnationaloperations the U.S. balance oftrade, in 1989, this contribution netted o 7btalinternationaloperations(consistingof all to alxiut $ 1.8 billion compared with $3.1 billion in 1988 -

exports from the United States plus the results of opem-and $2.1 billion in 1987.This improvement is attributable tions hicated outside the United States) had revenues to the higher level of export activity, as depicted below.

aggregating $ 13.9 billion and operating profit of $2.8 bil-GE contribution to U.S. balance of trade (estimated!

- lion in 1989. International revenues were $ 10.8 billion in on i,itiions) 1989 i938 1987 1988, up from $9.2 billion in 1987. International operat-ing profit in 1988 was $2.1 billion compared with $1.7 EQ,j[,Iy,ys',

g

$6.2

$13-

$4.0 bilhon in 1987.

To GE aHiliates 1.1 0.8 0.8 The chart (above right) shows the growth in GE's reve-Totaleximrts from the United

' nues for international operations by areas of the world States 7.3 5.7 4.8 i.

over the last five years. An especially significant increase in imimris into the United States

- European operations is evident, especially in the last two From GE affiliates 0.7 1.0 1.1 years. This is the result of significant increases in exports Directly from other suppliers 1.8 1.6 1.6 of Aircraft Engines; a much higher volume of shipments Totalimportsinto the United States 25 2.6 2.7 of Plastics prmlucts; the establishment of an increasing mtion to U.S.

presence in European hledical Systems markets related to

((iy y

acqumuons beginning in 1988; and, m 1989, the impact of venture activities, especially in Ma}or Appliances and

- Contmls.

GE's exports from the United States to external O GE's #2@8risIrom the United States to external cus-customers (in bilhons)

I tomers escalated to $6.2 billion in 1989, up from $4.9 bil-tion in 1988 aml $ 1.0 billion in 1987. The chart (on the l

right) shows the substantial growth in GE's exports for the p

last five years, led by the strong increases in Aircraft Engines. Exixnt sales by major world areas follow.

19 GE's exports from the United States to external customers (in millions) 1989 1988 1987 2.6

-Europe

$2,915 $1,805 $ 1.253 IS

.1\\Kific Basin 1,926 1,357 1,146 Americas 596 531 625 Other 721 1.177 1,0no 0

$6,161 $ 1.870 $ 1.024 1985 1986 1987 1988 1989 87

4 Management's Discussion ofFinancial Resources and Liquidity Overview chase (" repurchase agreements"). These typically repre.

This discussion offinancialresources and liquidity focuses sent highly liquid, short-tenn investments of excess fmuls

- on the Statement of Financial Ibsition (page 28) and the or lorrowing of such fuixis from others. At )rar ends Statenwnt of Cash Flows (page 30). As with the Statement 1989 and 1988, the lxdances (both assets anxi liabilities) of Earnings, the content of these two statements is so dif, were solely those of Kidder, Pealxxty in connection with its L

ferent for GE arxl GEFS that most of the asset, liability arxl broker-dealer activities.

L cash flow categories do not lend themselves to simple com.

• Ga current receivables are mainly amounts due from bination. This, of course, rrflects the differences in the customers arxl were $5.3 billion at the end of each of the nature of the busiirsses.

last two years. Customer receivables "tumed over" 7.50 Although GE's manufacturing aixt nonfinancial senices tines in 1989 compared with 7.01 times in 1988. (" Turn-activities involve a variety of different businesses, their over" relates receivables to sales anxi is a measurement of ulxIerlying chaGICleristICs are ille developing, preparillg collection elliCiency. Higher turinover irvlicates faster col-for market aint selling of tangible pnxlucts arx! senices.

lections.) GE's trend in this area has been improving since Risk and reward are directly related to the ability to man-1985, primarily as a result of vigorous management atten-age those activities. Financial leverage comes fmm realir-tion to credit arxl colk ctions. Other receivables measure-

-ing an adequate return on share owners' equity with ments, such as delinquency ratios aint amounts past due, judicious use oflorrowed fuixis.

also have been improving, arxl the overall condition of cus-GEFS is not a " captive finance company" or a vehicle for tomer receivables remained excellent at the end of 1989.

"off-balance-sheet financing" for GE. In fact, very little of Cun ent receivables other than amounts owed by cus-its business is directly relatal to other GE opemtions. Its tomers are amounts that did not originate from sales of principal businesses pmvide financing, reinsumnce aixi GE pnxlucts or senices, such as advances to suppliers in broker-dealer senices to third pm ties. The uixlerlying connection with large contracts.

chanx teristics of these businesses involve the management a hn'entories of $6.7 billion at the end of 1989 were of financial risk. They do not develop, manufacture or sell slightly higher than the $6.5 billion at the end of 1988.

pnxtucts arxl senices such as, for example, an aircraft inventories turned over 4.44 times in 1989 compared with engine or the delivering of a message over a 'lY network.

4.38 times in 1988. As with receivables, this is a measure-Their risk atxt reward are related to the ability to provide ment of eflicient use of resources anxi has been showing fuixls at competitive mies coupled with creative value-steady improvement in recent years.There were no signifi-added services.

cant changes in inventory levels in the key businesses These fundamental differences are reflectalin the between the last two year crxis. Last-in first-out (1.lFO) measurements commonly usal by investors, rating agen-revaluations decreased $37 million in 1989 compared with cies and financial analysts. These differences will become an increase of $ 150 million in 1988.1.lFO revaluations -

clearer in the discussion that follows with respect to the increased $324 million in 1987, mostly related to the more significant items in the two financial statements.

accounting change described in note 1. Included in these changes were decreases of $68 million, $23 million anxi Statement of Financial Position

$22 million (1989,1988 mxt 1987, respectively) due to o Marketable securitics carried at cost for each of the lower inventory levels. In each of the last three years, there last two years were mainly debt. securities held by GEFS' was a net current-year price increase.

i I

insurance afliliates in sup[ ort of their obligations to policy holders. The increase to $6.8 billion in 1989 from GE/S&P dividends per share increase compared with 1984 -

$5.5 bilhon m 1988 reflects the acqumtion of FGIC.

70%

a Marketable securities carried at market tepresent primarily the investing and trading portfolio of Kidder, g

Pealxxty and, to a lesser degree, similar insurance affiliate activities. The increase to $8.5 billion in 1989 from 42

$5.1 billion in 1988 reflects a higher level of activity in these businesses as we!! as higher market prices at the end 23 of 1989 compared with 1988.

,y a Securities purchased under agreements to resell a sesw i4

- (" reverse repurchase agreements") are related to the liabil-ity account: Secutities sold under agreements to repur-b 0

1985 1986 1987 1988 1989 38

F m-g.

I'

\\

.o GEFS' financing receivaWes grew to $41.8 billion in Dividends per share i

1989, a $5.9 billion (10% ) increase. Note 16 includes addi-goo tional infonnation arxl details alx)ut these receivabk s, J which are GEFS' single most important earning asset, m

GEFS provides time sales and loans on various bases with varying levels of security and differing maturities, i.20 and it also makes prefenni stock investments and occa-sionally receives warrants convenible into conunon stock.

0.80

]

"I.'ime sales aixi loans grew $4. I billion to $30.9 billion.

j Increases were in retailer atxt auto financing ($2.1 billion);

OAo commercial real estate financing ($1.2 billion); and com-nx rcial aixt irxiustrial kxms ($ 1,1 billion). liome anxl rec-o l'85 l'88 8887 8888 8'88 reation financing decreased by $666 million.

included in time sales arxl loans and other assets were fmxlings anxi investments, principally by GE Capital, for ence as a percent of average financing receivables was leveraged corporate restructurings, management buyuuts 0.98% in 1989,0.819 in 1988 and 0.62% in 1987.The aixi recapitalizations - so-called leveraged buyouts or increases in 1989 aint 1988 reflect significant growth in 1.llos. G E Capital structures these transactions to afford credit ca:11 operations whose loss rates, as expected, are

. itself sufficient collatemi pmtection with appiuximately relatively high in comparison with other GE Capital busi-75% ofinvestment positioned at the senior debt level. The nesses. At the end oflxith 1989 anxl 1988, the reserve cov-GEFS [x>rtfolio at December 31,1989 was widely dis-erage on financing receivables was equal to 2.639 of the persed throughout the United States aixl, to a lesser receivables balances outstarxling. The relationship was degree, Canada aixl Europe; it included a number of dif-equal to 2.59% at the end of 1987, ferent industries; and it consisted of approximately 100 Although the nature of GE Capital's business is such that accounts aggregating approximately $8.3 billion. Receiva-an economic downturn or incr easing level ofinterest rates ble losses from these transactions have averaged about 1%

couki result in financial stress to customers, management i

ofinvestment over the past three years and have been helieves that the diversified nature of the portfolio affonts I

much more than offset by the equity gains that are an reasonable protection against any material negative impact 1-integral part of1.150 financings.

on GEFS' operating results or financial condition. In sum-Also included in GEFS' time sales and k>ans were $8.8 mary, GEFS' financing receivables are in gmxl condition

_ billion invested in appiuximately 800 real estate loans, vir-and reserve protection is appropriate.

tually all li>r commercial properties. Typically, such kxms a Property, plant and equipment (including equipment were structured so that existing cash flows more than cov-leased to others) aggregated $ 15.6 billion at December 31, emt debt service ami were secured by first mortgages 1989mp $2.0 billion fmm $13.6 billion a year earlier, GE's largely on multitenant office buiklings and apartment property, plant arxl equipment consists ofinvestments fi>r pmjects loans for land acquisition and development and its own productive use, whereas the largest element of pmject construct on were not an unportant part of the.

GEFS' investment is in equipment that is pmvided to third

[x>rtfiilio. At year-end 1989, the portfiilio was geographi-panies on operating leases. Details by categories ofinvest-cally balanced with investments throughout the Umted ment can be fimnd in note 18.

States and, to a much lesser extent, Canada and Europe.

GE's total expenditures for new plant and equipment i

' Receivable losses on commercial real estate kxms have during 1989 were $2.3 billion, bringing the total of the last averaged significantly less than 1% ofinvestment over the five years (excluding the unusually large addition by acqui-past three years.

sition of RCA in 1986) to $ 10.3 billion. Of that five-year investment in financing leases reached $ 12.8 billion at total,32% was to increase capacity; 25% was to increase the end of 1989, up from $ 11.1 billion at the pn,or year productivity; 12% was to support new business start ups; end. Details of these balances can be li und in note 16.

14% was to replace aml renew okler equipment; arxl 17%

l The allowance for losses deducted in arriving at the net was fi>r such other purposes as improving R&D facilities

(

balance of $41.8 billion increased from $972 million at the and safety and environmental protection.

end of 1988 to $ 1.127 billion at December 31,1989.

GEFS added $3. I billion to its equipment leased to oth-Included were additions by charging operations ($527 mil-ers in 1989. Current year amortization was $G17 million.

lion in 1989, $-134 million in 1988 and $290 million in 1987) and write-offs of $420 million in 1989, $294 million in 1988 and $171 million in 1987. Overall, net loss experi-l; 39

e 4

l l

H c Intangible assets aggregatal $8.8 billion at December GEFS' earning assets. GEFS' composite interest rates were l'

31,1989. The majority of this (unsolidated total is GE's discussed in connection with the Statement of Earnings. A L

intangibles, which were $7.0 billion at that date, about the large portion of GEFS'lx>rrowings is in the fann of com.

s;une as a yea'r earlier The largest portion of GE's balance inen cial paper ($30.5 billion and $24.6 billion at the ends of (in both goodwill aix! other intangibles) amse from the 1989 and 1988, respectively). Most of this coimnercial acquisition of RCA Cor[ oration in 1986. Other balances paper is issued by GE Capital. Its conunercial paper has l:

were mainly related to acquisitions of 11org-Wanwr's maturities of up to nine months. The average remaining '

chemicals businesses, Roper Cor[mmtion, a TV station in terms of GE Capitars commercial paper were 23 days at i

Miami, Fla., anxl CGR nuslical business assets. The the ends of 1989 anxi 1988. Average interest mies on GE -

increase in 1989 included completion of11org-Wanwr Capital's commercial paper were 8.81c4 and 9.32% at the valuations.

end of timse respective years.

• leverage," the relationship GEFS' intangible assets were $1.8 billion at the end of of debt to equity capital, is expected by investors to be 1989 compared with $ 1.6 billion a year earlier, principally much higher in a financial enterprise than in an inxiustrial reflecting the 1989 completion of the acquisition of FGIC enterprise. GE Capital's ratio of debt to equity was 7.80 to Corimmtion.

1.00 at the eixi of 1989 coinjured with 7.67 to 1.00 at the o Allother assets totaled $9.4 billion at December 31, end of 1988. This relationship of debt to equity capital is 1989 compared with $8.0 billion a year earlier. These believed to be souixt and is appropriate for a highly mied '

- include a wide variety ofitems as detailed in note 20. GE's fmancial services enterprise.

all other assets increased $1.1 billion during 1989, princi.

Notes 21 anxi 25 provide details of short-term mxt long-pally because of new investnwnts injoint ventures classi.

term borrowings, fied as " associated companies."

Statement of Cash Flows c Totalborrowings on a consolidated basis aggregated

$53.3 billion at December 31,1989 compared with $45.5 The Statement of Cash Flows (page 30) emphasizes the billion at the eix! of 1988. Ilowever, terrowings must be analysis of cash flows from three broad categories -oper-kmked at separately for GE and GEFS The major debt.

ating activities, investing activities aix! financing activities, rating agencies evaluate the financial coixlition of the enti.

Inasmuch as the cash management activities of GE arxl ties separately because of their distinctly different business GEFS are separate and distinct, it is more useful to review characteristics. Using criteria appropriate to each, those the separate cash flow statements than the consolidated major mting agencies continue to give top ratings to debt statement.

ofImth GE anxi GEFS.

GE's total borrowings were $5.6 billion at the eixi of GE 1989, a decrease of $548 million from the end of 1988.

GE's cash and equivalents aggregated $ 1.7 billion at the long term bortuwings of $3.9 billion were down from end of 1989, slightly lower ($74 million) than at the end of

$4.3 billion a year earlier, anxl short.terin borrowings 1988. During 1989, GE generated $4.8 billion in cash from declined to $ 1.7 billion from $ 1.9 billion. The current por-its opemting activities. This provided resources to invest tion oflong-term borrowings included in short-term bor-over $2 billion in new plant aix! equipment; to make acqui-rowings dropped atout $ 1.1 billion during 1989 reflecting sitions, the principal ones of which required cash outlays of mainly reductions related to debt involving the 1986 acqui-sition of RCA Corporation. lly the end of 1989, all debt of Consolidated totalassets RCA Corporation that had been assumed by GE had been (in billions) retired. GE's total debt at the end of 1989 equaled 21.0%

g of total capital, or a decrease of 3.9 points from 24.9% at the eixi of 1988. This relationship of debt and equity capi-gg

- tal is somxt aixl is well within the range of what would be expected of a strong industrially oriented firm.

go l,

GEFS' total lonuwings were $47.9 billion at Decem-L ber 31,1989, of which $35.7 billion is due in 1990 and 60

$ 12.2 billion is due in subsequent years. The comparable amounts at the end of 1988 were: $3R6 billion total:

30

$28.7 billion due within one year; aml $ 10.9 billion due L

- beyoix] that. The increases were to support the giowth in o

198s 1986 1987 1988 i989 l-

.40

=

.1

,V j

1 ddnx>st $800 million; to reduce total debt by $500 million; Return on share owners' equity arxl to pay $1.5 billion in divideixls to share owners.

gog Operating activities are the principal source of GE's cash i flows. Over the past three years, operating activities have J-provided more than $ 12 billion of cash. Principal on-going applications usually are to invest in new plant arxl J

equipnwnt ($5.8 billion total over the last thrce >rars) aint to pay dividerxis to share owners ($3.9 billion total over the

___li last tiirce years). Expenditures for new plant arxl equip-ment are again expected to be in the $2 billion-plus nmge 12 f

for 1990, arx1 divideixis are expected to increase with M

0 carnings.

11ased on past perfonnance aixl cuiTent expectations,in combination with the financial flexibility that cones with the highest credit ratings, GE is in a sound position to con-Five-year share repurchase program

- tinue makmg long term investments for future growth, in November 1989, GE's thiard of Directon authon. zed including selective acquisitions anxi investments injoint ventures. The five-year share repurchase program dis-the n pmthase of up to $10 billion of the Company's com -

cussed separately on this page is a direct result of GE's solid in n stock over the next five years. Flus authorization was financial condition and cash-generating capability, made after evaduating various alternatives to enhance long-tenn share owner value. Based on the financial arxl annpetitive positions of the Company, its debt capacity GEFS and the cash-generating characteristics now present in its L

L

- GEFS' pn.ncipal source of cash is h.nancmg acuvmes that key businesses, management believes GE has the flexibility l

mvolve continuityg rollover of short-tenn terrowings anxl to continue increasing dividends in line with earnings, to appiupriate addit on of knyg-tenn lonuwmgs with a rea-inaintain a high degree ofinternal reinvesunent, to make sonable balance of matunnes. Over the past three yean,.

selective acquisitions complementary to existing business GEFS' outstarxting terrowmgs with 90< lay or less matun'

- aixt also to repurchase a significant amount of stock.

L ties have increased a total of $ 14.3 billion. New lorrowings Such repurchases will result in higher carnings per share l

- of $26.0 bilhon having maturities longer than 90 days arxl returns on equity than would othenvise be the case.

j were added during those years while $21.5 billion of such The repurchase plan is designed to be flexible. Shares longer-term borrowings were paid off.

will be acquired with furxis fnnn a combination of free e

GEFS' principal application of cash has been in invest-cash flows and new lonuwings while keeping GE's debt to-mg acuvmes to grow the business. Of the $27.1 bilhon capital ratio in the 25ck range. Should world economic of net investments by GEFS over the past three >rars, coixlitions, a major acquisition or other citrumstances war-

$17.1 bilhan was devoted to additional financing receiv-rant, the Cmnpany would imxtify the pace and dimension l

' ables. Other pnncipal investments during these years were of the plan to maintain GE's solid financial [msition. This

$2.2 billion to acquire new businesses as GEFS expaixls its repurchase plan was reviewed with debt rating agencies, activines aml $5.6 billion for new equipment, which is who confinned GE's Triple-A debt rating.

mainly Ibr lease to others.

During the last six weeks of 1989, about 3.8 million Cash used for new investments in excess of cash pn" shares were reacquintd at a cost of $236 million.

vided from additional borrowings has been provided L

mainly by generation of $7.8 billion of cash from operat-ing activities for the years 1987-1989 and from issuance of l

$600 million cumulative variable preferred stock by GE Capital in 1988. GEFS' cash mxt equivalents balance has remained relatively stable throughout the periml-again in keeping with its business mission.

In summary, based on past perfonnance and current expectations,in combination with the financial flexibility that comes with excellent credit ratings, GEFS is well posi-tioned to continue growing its assets and to pnxluce a good rate of return on GE share owners' investment in GEFS.

41

- a

Managements Discussion ofSelected Financial Data Selectedjinancialdata summarizes on the opix> site page such as waste-water ticatment plants, grouixl water moni-sone data frniuently requested about Geneml Electric toring devices, air strippers or separators, anxl incinerators Gmnpany and provides a record that may be useful for at new and existing facilities constructed or altewd in the reviewing treixls. The data are divided into three sections

nonnal coui se of business. Consistent with G E's [xilicies L

. upper lx>rtion - consolidated information, middle ;x>r-stressing environmental res[xmsibility, average annual l

tion - GE data that reflect various conventional measure-capital expeixlittires for nonternedial proj(rts ar e pres-ments for iixtustrial enterprises, anxl lower 1x>rtion -

ently ex[wcted to nmge between $150 million anxi $200 l

GEFS data that reflect Ley information anxi ratios perti-million over the next two years. The principal reasons for i.ent to financial services, this eximcted increase from existing levels are new or GE's totairesearch and dnielopment expemlitures were a expamled programs to buikt or nuxlify manufacturing recostl $3.931 billion in 1989, up 9% from 1988's $3.601 processes so they can use alternative metixxis that will billion. Of the 1989 expenditures, $1.334 billion was from result in minimizing environmental waste amt reducing GE's own fuixis, an increase of 15% fmm 1988's $ 1.155 C""""5-billion. Expcixlitures fmm fuixts pmvidal fmm customeis The Company also is involved in a sizable number of i

- (mainly the U.S. government) were $2.597 billion in 1989, reinnlial actions to clean up hazardous wastes as required i

or 6% more than $2.446 billion the par before. Aircraft by federal and state laws. Such statutes require that Engines anxl Aerospace account for the largest share of responsible parties fund remedial actions regardless of j

GE's R&D ex}wixlituies fiom both Company anxl cus.

f ult, legality of original disposal or ownership of a dis-

]

tomer fuixis. Other significant expenditures of Company lx> sal site. In 1989, GE spent appmximately $75 million on fmwls were for Medical Systems, Plastics and Ibwer remnlial cleanups anxl related studies compared with Systems.

approximately $48 million spent for such pur[x>ses in i

1988. It is presently expectal that remedial cleanups and GE's totalbacklog of firm unfilled orders at the end of 1989 related studies will require average annual expeixlitures in 1

was $30.5 bilhon. Orders constituting this backlog may be the range of $80 million to $ 120 million over the next two canceled or deferral by customers (subject in certain cases to c:mcellau,on penalnes). Comments on unfilled orders it is dillicult to estimate reasonably the ultimate level of for husinesses with relauvely long manufiicturing cycles environmental expeixlitures due to a umnber of uncer-can be fouixi in the discussion of Industry Segments, tainties, including uncertainties about the status of law,.

which begins on page 34. Aixmt 46% of the 1989 total regulation, technology, insurance coverage of GE costs arx! -

l nnlilled orders is scheduled to be shy l ped in 1990 with infonnation relating to imlividual sites. Subject to the fore-most of the remalixler to be sluppal m the two years after going, Company management believes that capital that. For comparison, about 49% of the 1988 backlog was expenditures and remedial actions to comply with the expected to be shipped m 1989.

present laws governing envimnmental protection will not Unliikxl orders for export of all types of pnxlucts aml have a material effect upon its capital expenditures, earn-services f mm the United States were $9.9 billion at Decem-ings or competitive position.

. ber 31,1989, up from $8.2 billion the year before. The backlog of Aircraft Engine orders is a major portion of the ex[mrt backlog, but significant increases were recorded in Consolidated employment at year end 1989 by Aerospace amiIbwer Systems.

Un thousands)

Infation has not been a significant factor in consolidated 375 earnings gmwth in recent years because of the relatively 3W

- modest rate of price increases in the economics of the United States and of the principal foreign countries where 225' the Company has operations.

Regarding environmentalmatters, the operations of the

e,o Company, like those of other companies engaged m sum-lar businesses, involve the use, disposal and deanup of sub-stances regulated under environmental protection laws.

~

73 l

In 1989, GE had capital expenlitures of about $110 mil-o lion for projects related to the envimmnent.The compara-i985 1986 i987 i988 i989 ble amount for 1988 was about $70 million. These amounts exclude expenditures for remnlial actions, which are dis-

. cussed on this page. Capital expenditures for environmen-tal purposes have included pollution control devices 42

.6 4

s. g h

SelectedFinancidi Data t

t

- (Dollar amounts in millions: per-share amount's in dollan) 1989 1988 1987 1986 1985 General Electric Company and consolidated affiliates Revenues.__

$ 54,574 - $ 50,089 $ 48,158

$ 42,013

$ 32,624 L Earnings before extraordinary loss anxi cumulative elfect of accounting changes 3,939 3,386

-2,119 2,492 2,277 l

Net cantings.

3,939 3,386 2,915 2,492 2,277

. Divideixls declared 1,537 1,314 1,209 1,081 1,020 t

Earned on avenige shaie owncif equity 20.0 %

19.4 %

18.5 %

17.3% _

17.5 %

Per share-Net earnings; 4.36 $

3.75 3.20 $

2.73 $

2.50' Dividerxis declared 1,70 1A6 1,32 %

1,18W 1,11%

Stock price range Gl% 43% 47 %-38 % 66 %-38 % 44 %-33 % 36 %-27 %

a Total assets.

128,344 110,865 95,414 84,818 49,123

. limg tenu lxinuwings 16,110 15,082 12,517 10,001

' 5,577 1

Shares outstarxling-avemge (in thousarxis) 901,223 901,780 91J,639 912,591 910,762 Shate owner accounts-average 526,000 529,000 491,000 492,000 506.000.

Employees at >rar eixt

. Domestic -

243,000 255,000 277,000 302,000 243,000 Foreign 49.000 43.000 -

45,000 71,000 56,000

• 1btalemplo)tes 292,000 298,000 322,000 373,000 '

299,000 GE data Short term lx)rrowings

$ 1,696 $ 1,861

$ 1,110 $ 1,813 $ 1,297 long-tenu hortuwings 3,947 4,330 4,491 4,351 753 Minority interest 283 228 190 189 126 Sharc owners' equity 20.890 18A66 16,480 15,109 13,671 ITotalcapitalinvested

$ 26,816 5 24,885

$ 22.271

$ 21,462

$ 15,847 Return on avemge total capital invested

- 17.0%

16.4 %

14,7%

13.9 %

16.2 %

llorrowings as a peirentage of total capital invested 21.0 %

24.9%

25.1%

28.7 %

12.9 %

- Current assets

$ 15,671

$ 15,499. $ 15,739 ' $ ' 14,288 $ 12,546 Cunent liabilities 13.988 13,419 12,671 11,461 8,919 Working capital

$ 1,683 $ 2.080 $ 3.068 $ 2,827

$ 3,627 Property, plant arxl equipment additions (other than

. byacquisition of RCA)

$ 2,251

$ 2,288

$ 1,778 $ 2,042

$ 1,953 Year-cixi orders backlog 30,473 27,265 -

22,737' 23,943 23,i17 GEFS data -

Earnings belore extraordinary loss and cumulative effect of accounting change 927 $

788 $

552 $

504 $

413 Net earnings 927 788 1,008 504 413

~ Share owner's equity 6,069 4,819 3,980 2,994 2,302 Eanxxl on average share owner's equity 17.6 %

18.0 %

18.0%

19.7 %

19.9 %

Ilorrowings from others

$ 47,905

$ 39,593

$ 30,885

$ 23,397

$ 16,393 Ratio'ofdebi to equity (GE Capital) 7.80:1 7.67:1 7.98:1 7,83:1 7.89:1 Total assets of GE Capital

$ 58,696

$ 47,766 $ 36,644

$ 27,970 $ 22,469 Reserve covemge on financing receivables 2.63 %

2.63%

2.59%

2.59 %

2.57 %

- Insurance premiums written

$ 1,819 $ 1,809 $ 1,729 $ 1,701

$ 1,092 Securities broker-dealer earne I income 2,897 2,316 2,491 1,176 See notes I and 25 to the consolidated f.nancial statements for information about 1987 accounting changes ;uul extraordinary loss and note 2 for information about centain acquisitions and related matters. In addition, RCA Corporation and Kidder, Pealxxly & Co. were acquired inJ une 198Cn"GE" means the pre.1988 basis of consolidation as described in note I to the consolidated hnancial statements; "G EFS" means General i

Electric Financial Sernces. Inc. arut all of its alfiliates aiul associated coinpanies. Trans.ictiotis hetweesi G E arul GEFS hase been climinated from the "consohdated data " Share data reflect the 2-for-1 stock split in April 1987.

43

/

' Management's Discussion ofFinancial Responsibility The financialinfonnation in this retx>rt, including the KPhtG Peat hianvick provide an objective,indepeixlent audited financial statements, has been preparnt by man-review of managenent's discharge ofits obligations relat.

agement. Preparation of financial statements anxl related ing to the fairness of relxnted operating results aixi finan-data involves estimates anxi the use ofjudgment. Account.

cial condition. Their report for 1989 appears on the ing principles used in preparing the financial statements opposite page.

1 are those that are generally acceptni in the United States.

The Audit Committee of the lloard (consisting solely These principles are consistent in most important respects of Directors from outside GE) maintains an ongoing with staixlards issued to date by the international appraisal-on behalf of share owners - of the effective-Accounting Staixlastis Cominittee. Where there is no ness of the irxleperxlent auditors, the C(unpany's staff of single specified accounting principle or starxlant, man-corporate auditors and management, with respect to the agement makes a choice fmm reasonable, accepted alter-financial reporting pmcess, arxl of the adequacy ofinter.

natives, using methods that it believes are prudent for nal fmancial controls. The conunittee also reviews the General Ekrtric Onnpany anxl its consolidated affiliates.

Onnpany's accounting policies, compliance with key poli.

To safeguard Onnpany assets,it is important to have a cies, and the Annual Report arxl pmxy material, souixl but dynamic system ofinternal financial controls and pnxulures that balances benefits and costs. One of the key elements ofinternal financial controls has been the 3

Onnpany's success in recruiting, selecting, training and

- developing professional financial managers. Their responsibilities include implementing and overseeing the John E Welch,Jr.

. financial contnil system, re[xnting on management's stew-Chainnan of the ik>ard and ardship of the assets entrusted to it by share owners, and Chief Executive Officer perfonning accurate anxi proper maintenance of the accounts.

hlanagement has long recognized its responsibility for conducting the afTairs of the Company and its affiliates in Dennis D. Dammerman an ethical arxl socially responsible manner. General Elec-Senior Vice President tric Company is dedicated to the highest standards of Finance l

integrity. Integrity is not an occasional requirement but a continuing commitment that is reflected in key written February 16,1990 policy statements. These cover, among other subjects, envinnunental protection, potentially conflicting outside business interests of employees, compliance with antitrust laws, aixt proper domestic aix! international business prac-tices. hlanagement insists on maintaining the highest stan-dards of coixluCt atul praCliCes with respect to tmnsactions with the United States government. There is continuing emphasis to all employees that even the appearance of impropriety can enxic public confidence in the Onnpany and in the govenunent pmcurement pmcess. Ongoing education, communication and review programs are designed to create a strong compliance environment and to make it clearly understo<xl that deviation from Onn-pany policies will not be tolerated.

l l

l l

'N

,e IIndependent Auditors' Report

~ To Shore Owners and Board of Dihoctors of GeneralElectric Company We have audited the accominnying stateme6t of financial

. losition of General Electric Company a xt consolidated

alliliates as of December 31,1989 anxl 1988 anxl the -

related statements of carnings anxi cash flows for each of

- the years in the llure-year period cixled December 31, 1989. These consolidated financial statements are the

. trsponsibility of the Coeipany s management. Our resIxm-l sibility is to express an opinion on these consolidatal

' financial statements based on our audits.

We coixlucted our audits in accordance with generally accepted anditing staixlards. Those staixiants require that

- we plan and perform the audit to obtain reasonable assur.

ance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence sup[orting the amounts aixl dischw sures in the financial statements. An audit also includes assessing the accounting principles usal aixt significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our amlits provide a reasonable basis for our opinion, in our opinion, the aforementioned financial statements c appearing on pages 26-31 aixi 46-68 present fairly,in all

= material respects, the financial position of General Electric

- Company anxi consolidated affiliates at December 31,1989 anxi 1988, aixt the results of their operations aix! their cash flows for each of the years in the three-year peri <xt ended December 31,1989, in conformity with generally accepted

- accounting principles.

As discussed in note I to the consolidatal financial state-ments, in 1987 the Company changed its methcxis of accounting ihr income taxes and overhead recorded in inventory. We concur with these accounting changes.

Nh fd 9h4.u.nd

' KPMG Peat Marwick Stamford, Connecticut February 16,1990 45

r

~

t 4

(

Notes to Consolidated Financial Statements inclex Note ] Summaryof Significant Accounting Policies Subject Page Consolidation and financial statement presentation Accounting Policies (note 1) 46 Consolidation. The consolidated financial statements rep-Anuunts Payable (note 22) 60 resent the adding together of all companies in which Gen.

JAcquisitions (note 2) 49 eral Electric Company directly or itxlirectly has a majority -

Allowance for losses on Financing Receivables ownership or otherwise contivls (" affiliated companies").

(note 8) 53 Prior to 1988, results of financial senices afTiliates - the llorrowings-long-Tenn (note 25) 60 principal one being General Electric Financial Senices,

.I lionuwings-Short Tenn (note 21) 59 Inc. (GEFS or GE Financial Senices) aixi its alliliated com-f Cash anxi Equivalents (note 11) -

55 panies - were included on the equity basis as one line in Cash Flows - Supplemental Infonnation (note 32) 63 total earnings aix! net assets. This was pennissible under Conunitments anxi Contingent 1.iabilities (note 31) 63 accounting rules in effect before 1988. Ilecause financial.

Income Taxes-Deferred (note 27) 61 senices operations are so different in nature from and income Taxes - Provision for (note 10) 54 essentially unrelated to operations of other GE businesses,

~

Intangible Assets (note 19) 58 management believed that financial statements were more Interest and Other Financial Charges (note 7) 53 understaixlable if GEFS' statements were shown sepa-Inventories (note 15) 55 mtely. It should be emphasized that, tuuler both cun ent Marketable Securities Carried at Cost (note 12) 55 anxi prior piucedures, consolidated net earnings atxl share Marketable Securities Carried at Market - GEFS owners' equity are the same for all periods presented.

(note 13) 55 However, substantially more detail is required under the Minority Interest in Equity (note 28) 61 current standard than urxler rules previously in effect.

Other Assets (note 20) 58 Also as a result of this change, the Company adopted an Other Costs azul Expenses Acensed-GE (note 24) 60 unclassified consolidated statement of financial position.

Other Income (note 3) 50 Management believes it is important to preserve as other I.iabilities (note 26) _

61 much as [x>ssible the identity of the principal financial data j

Pensions and Other Retiree lienefits (note 6) 52 and related measurements to which share owners and 1

Piupeny, Plant anxi Equipment (note 18) 57 others have become accustomed over the years. Accord-

.[

Quarterly Information [unaudited](note 35) 68 ingly, consolidated fmancial statements and notes now are Receivables anxl Payables-Ilrokers and Dealers generally presented in a format that includes data grouped (note 17) 57 basically as follows.

Receivables-Current-GE(note 14) 55 e GE-this is essentially the pre 1988 basis ofconsoli.

l Receivables - Financing - G EFS (note 16) 56 dation except that it includes some very small financial Revenues fmm Operations-GEFS (note 4) 51 senices affiliates previously not consolidated. The effect of

. Securities Sold but Not Yet Purchased (note 23) 60 transactions among companies within this group has been I

Segments-Geographic (note 34) 68 elimiriated. Where appropriate for clarification or empha.

Segments-Industry (note 33) 64 sis, particularly in the notes, this group of entities also is i

Share Owners' Equity (note 29) 62 referred to as "GE except GEFS "

Stock-Related Infonnation - Other (note 30) 62 m GEFS-this affiliate owns all of the common stock of Supplemental Cost Details (note 5) 5i General Electric Capital Corporation (GECC or GE Capi-Unusual Expenses (note 9) 53 tal) and of Employers Reinsurance Corporation (ERC),

aixt 80(7c of the stock of Kidder, Pealxxly Group inc.

(Kidder, Pealxxty). These affiliates arxl their respective affiliates are consolidated in the GEFS columns with the effect of transactions among them climinated before the consolidated presentation.

46

)

m N

o

's 1

p 4

4 Consolidated-these columns tepresent the adding mxl 305 days. GEFS' cash anxl equivalents, which includes.

together of GE atxl GEFS.1imvever, it is necessary to only cash ami very shon term (only a few days' maturities),

temove the effect of transactions between GE except is not affected by this nxxiification.

Gl(ES atul Gl{FS to arrive at a consolidated total. Thefg.nsions and other retirement benefts. Accounting policies clumnatu>ns used to arrive at these consolidated totals for pensions arKl other retirement benefits are discussed in are summarized below*

mae 6.

Eliminations Incomeiaxes. SFAS No. 96

" Accounting for income c

(in nullions) 1989 1988 1987 Taxes" was issuni by the Financial Accounting Standants Statement of Emmings ik)atd in December 1987. A requirenwnt of SFAS No. 96 Sales of g<xxis 5 (12) $

(5) $

is that deferred tax liabilities or assets at the eml of each i

tlNinNi f) paimi be determined using the tax rate expected to be in (l

Earnings of GEFS

-(927)

(788)

(552) effect when taxes are actually pa d or recoveral. Accord, GEFS revenues fmm ingly, umler SFAS No. 96 rules, income tax expense provi-operations

('18)

(3-1)

(29) sions will increase or decrease in the same perimi in which Total revenues (1.021)

(858)

(583) a change in tax rates is enactal. Previous rules required providing deferred taxes using nttes in effect when the tax Cost of g(x xis sold (12)

(5)

Cost of services soki (20)

(26)

(8) asset or liability was first recorded without subsequent

. In i atul other knanc,al i

a@n m solely tor tax-rate changes (except with reslwct Other o>sts ami expemes (15)

(10)

(13) to leveraged leases).

Totalcosts amiexpenses (9-l)

(70)

(31) in conformity with SFAS No. 96 transition rules, the Earnings belbreincome Cmupany elected to adopt the new income tax accounting.

taxes. extraordinary item during 1987. The cumulative efTect toJanuary 1,1987 anxl cumula*ive effect of

($577 million, including $518 million for GEFS) of the accounting changes (927)

(788)

(552) change is shown in the 1987 columns of the Statement of E,xtraonh, nary item 62 Income tax accounting E,arnings.

change (518)

Net earnings

$ (927) - $ - (788) $(i.008)

GE accounting policies Statement of FinancialPosition Sales. A s;de is recorded when title passes to the customer GE current neceivables

$ (212) $ (330) or when services are perfortned in accordance with

' GEFS fmancing receivables (107) contracts.

Other GEFS nceivables (380)

(107) investment in GEFS (6.069)

(-l.819) -

Investment tax credit (lTC). The ITC was repealed, with

'Ibtal assets

$(6.691) $(5.363) some tnmsitional exceptions, effectiveJanuary 1,1986.

Short term bormwings 5 (236) $ (170) llowever, for financial reporting pur}mses. G E has Accounts payable (379)

(261) deferred remgnition of the ITC cach year and continues Inngderm bormwings (2)

(I10) to amorti/c ITC as a reduction of the provision for income Allotherliabilities (5) taxes over the lives of the facilities to which the credit

'Ihtalliabilities (622)

(511) applies.

GEFS equity (6.069)

(l.819)

Inventories. The values of most inventories are determined Totalliabilities and equity

$(6.691) $(5.363)

Statement of Cash Flows "I' m plFO, basis and do not exceed realizable values. Eff.ectiveJanuary 1,1987, GE changed i

Net earnings (operating activities) -

$ (221) $ (13) $ (213) its accounting procedures to mclude in inventory certain Investing activities 179 (17I) 2 13 manufacturing overhead costs previously charged directly Financing activities 12 18l (30) to expense. The more significant types of manufacturing

'Ibtal

- S overhead included in inventory as a result of the change are: depreciation of plant and equipment, pension and Results of companies in which GE or GEFS owns other benefits of manufacturing employees; and certain between 20% and 50% (" associated companies") are pioduct-related engineering expenses. The Company included in the financial statements on a "one-line" basis.

believes this change was preferable because it provides a C shflows. During 1989, the definition of" cash arxl equiv.

better matching of pnxtuction costs with related revenues alents" for GE except GEFS was mulified to exclude mar-Letable securities having original maturities between 90 47

t in n [x>rting operating results. In accordance with gener-materially diffeient. Investnwnt banking revenues from 111y acrepted acrounting principles, the cumulative managenwnt fees, sales concessions anni titulerwriting fees

- effect of this change for perimis prior toJanuary 1,1987 are recordal on settlement date. Advisory fee sevenue is

($281 million after pmviding for taxes of $215 million) is recorded when sen ices are substantially completed anxi shown separately in 1987 in the Statenwnt of Earnings on the revenue is reasonably detenninable, page 26. There was viitually no effect from ihis change on See

• insurance af filiates" on page 49 for infonnation 1987 results after recording the cumulative elTect, with respect to cannti incone of these businesses.

Deprecialion, depletion and amortization. The cost of Allowancefor losses onfinancing receivables. G E Capital L

most manufarturing plant arx1 equipment is depreciated inainitaitis asi allowaix e fi>r losses on fisiancing t ercivables E

' using an acceleratal nwthal based primarily on a sum-of-at an amount that it believes is sufficient to provide ade-

- the-years digits finnnula. If manufacturing plant anxi quate pmtection against future losses in the [x>rtfolio. For equipnwnt is subject to abnormal economic coexlitions or small-balance and certain large balance receivables, the obsolescence, additional depreciation is provided.

allowance for losses is detennined principally on the basis of actual experience during the precaling three years.

GEFS accounting policles Funher allowances also are provided to reflect inanage.

Methods ofrecording revenues (" earned income"). Income ment'sjudgment of additional loss potential. For other on all k>ans is canxxl on the interest tuethod. For loan receivables, principally the larger loans arxl leases, the contracts on which finance charges are piccomputed, allowance for losses is detenninal primarily on the basis of finance charges are defened at the time of contract acqui, management'sjudgment of net loss lx>tential, including sition. For kian contracts on which finance charges are not specific allowances li>r known troubled accounts.

precomputed but are billed to customers, income is All accounts or ix>rtions thereof deemed to be uncollect-reconled when earned. Accrual ofinterest income is sus, ible or to require an excessive collection cost are written pemled when collection of an account becomes doubtful, off to the allowance for losselmah %ce accounts are generally after the account beconws 90 days delinquent.

progressively written down (from 10% when more than

. Financing lease income that includes related investment three months delinquent to 100% when more than 12 tax cralits and residual values is recorthst on the interest months delinquent) to reconi the balances at estimated method so as to pnxtuce a level yield on fumis not yet realizable value. Ilowever, if at any time during that perimi recovered. Unguaranteed residual values included in lease an account isjudged to be uncollectible, such as in the case income are based primarily on independent appraisals of of a bankmptcy, the remaining balance is written off.

the values ofleased assets remaining at expiration of the larger-balance accounts are reviewed at least quarterly, lease tenus.

and those accounts that are more than three months delin.

Origination, commitment and other nonrefundable fees quent are written down, if necessary, to record the bal-related to fumlings are defen ed and recorded in earned ances at estimated realizable value, income on the interest method. Commitment fees related Marketable securities. Marketable securities of Kidder, to k>ans not expected to be fumled mxlline-of credit fees Pealxxly are carried at market value with the difference are deferred and recorded in earned income on a straight-between cost and market value included in operations, line basis over the period to which the fees relate. Syndica-Marketable debt securities hekt by all other GEFS affiliates tion fees are recorded in earned income at the time the are carried at amortized cost. Marketable equity securities l

' related services are perfonned unless significant contin-ofinsurance affiliates are carried at market value, and gencies exist.

unrealized gains or losses, less applicable deferred income Kidder, Pealxxly's proprietary securities and conunodi-taxes, are recogninxlin equity.

- ties transactions are recorded on a trade < late basis. Trad-Securities purchased under agreements to resell (reverse mg and investment securities are valued at market or repurchase agreements) and securities sold under agree-l-

esumated fair value. Unreahzed gains and losses on open ments to repurchase (repurchase agreements). Repurchase contractual commitments, principally Imancial futures, aml reverse repurchase agreements are treated as financ-when-issued securities and fonvard contracts on U.S. gov-E ing transactions and are carried at the contract amount at emment and federal agency securities, are reflected in the which the securities subsequently will be resold or reac-Statement of Farnings on a trade < late basis. Customers' quired. Repurchase agreements relate either to market-i -

transactions and the related revenues ami expenses are able securities, which are carried at market value, or to reflected in the financial statements on a settlement-date basis. Revenues and expenses on a trade-date basis are not securities obtained pursuant to reverse repurchase agree-inents. It is GEFS' policy to take possession of securities subject to revene repurchase agreements. GEFS monitors the market value of the underlying securities in relation to the related receivable, including accrued interest, amt requests additional collateral if appropriate.

48

y.

4.:

' Depreciation and emortitation The cost of equipnwnt Note ] Acquisitions and Related Matters leasal to others on operating leases is amortized, princi-pally on a stniight line basis, to estimated net salvage value GE over the lease tenn or over the estimated economic life of Although there weic a number of acquisitions anni disix>si-the equipment. Dein etiation of property aixi njui >inent tions durig 198(1, the brger transactions involval com-l for gel'S' own use is n coitled on either a sunxif the-pletion of arrangements for several joint ventm es. These ycars digits or a straight line basis over the lives of the includal the coinbining ofinterests'in Eumpean appli-assets.

ances and electrical controls with General Electric plc, Intestment tax credit (170). ITC associatal with njui unent (GEC), an unrelated corix> ration in the United Kingdom.

l on operating leases anxl with buildings aix! equipment is (GE also acquired GEC's medical systems sales anxl senice deferral aixt ainortized over the lives of the uixlerlying in the United Kingdom.) llesides the businesses anxi

- t assets; resoun es contributed by the panies in these tnmsactions, l

Insurance apillates Premiums on short-duration insur-GE paid cash of $570 million to G EC in the seaux! quarter ance contniets are ie;x>rtal as earned income over the of 1989. Other newjoint ventures includal an arrange-

- tenns of the related icinsunmce treaties or insurance poli-inent with Ericsson of Sweden (mobile conununications cies, in general, caned premimus are calculated on a pro-businesses). Irgal Ibnn and percentage ownenhips in rata basis or are detennined based on reports received these afhances vary.

fnnn reinsureds. Premimu adjustments under retrospec-U"""E N, M annpeted a nunkt daatuisMons.

tively rated reinsurance contracts are recorded based on The largest of these were:

estimated losses and loss expenses, including lxnh case and R perCorporation,acquiralin AprilIbr$507 million incunul but not n-[x>rtal(fIINR) reserves. Revenues on cash. Roper's principal businesses were the manufacture loug<ioration mntraas are repor ted as camed when due.

and sale of gas and electric ranges and outdoor power gar.

Deferred insurance antuisition costs are amortized as den njuipment, in December, GE sold Roper's garden "l"I unent business for $295 million cash. Roper's kitchen l

the relatal premiums are earned Ior property and casualty business. Defenul insunmce acquisition costs for the life ppliance business prior to acquisition had annual sales of alx>ut $375 million.

insurance business are amortized over the premium-paying periods of the contracts in proixirtion either to 11 rg-Warner's chemicals businesses, acquired in Sep-

. anticipated premium income or to gross profit, as appnw tanter for $2.3 billion cash. These businesses (annual priate. Defenul insurance acquisition costs are review ed sales of hout $1.6 billion prior to acquisition) manufac-for recoverability, and Ihr short-duration contracts, antici.

ture and sell pnxtucts complementary to GE's plastics busmesses.

pated investment income is considered in making recover-ability evaluations.

Iloth of these acquisitions were accounted Ior as pur-The estimated liability fbr outstanding losses and loss chases with the excess of purchase price over.the estimate expenses consists ofcase reserves based on reports atxt of fainaluesbf net assets acquired recorded as goodwill.

See note 19.

estimates oflosses aix! an IllN R reserve based primarily on experience. Where experience is not sufficient, indus-11usiness dispositions during 1988 included most of the try averages Ihr the puticular insumute pnxtucts are GE Solid State (semicoixtuctor) business; seven of NilC's used. Estimated amounts of sedvage anxi submgation eight radio stations; RCA Global Communications, Inc.

recoverable on paid and unpaid losses are deducted from (a provider of international com munications sen ices); and outstanding losses. The liability thr future policy benefits S delmi-Cogepi, a foreign construction firm. Cash pro-of the life insurance afliliates has been compmed mainly ceeds from these transactions aggregated alxmt $700 mil-by a net-level-premium nwthod based on assuinptions fbr lion. Aggregateannu I s les of these businesses were about $900 million.

investment yields, mortality and terminations that were On December 31,1987, GE and a French electronics appn>priate at date of purchase or at the time the p>licies were developed, including provisions for adverse unupany, Thomson, S.A., completed a transaction in deviations.

which GE acquired Thomson's medical equipment busi-ness (CGR) and Thomson acquired most of GE's consumer electronics business. The total tnmsaction included cash received by GE of about $560 million. CGR's 1987 sales of 49

7 i

e'

lxiut $800 n.illion c une mainly fmm digital x-my, mam-If the pieceding 1988 transactions had occurred onJan-mography, computal tomography, ultrasourxi, an xl uary 1,1988 orJarinary 1,1987, management estimates relatal sales anxl service in Europe azul laitisi Annierica.

diat GEFS t esults of opemtions fier the years eiidal GE's consumer electronics business included mainly GE December 31,1988 anxi 1987 would have been as follows.

anxi RCA braint television sets, VCRs aixt audio pnKlucts

@mmsw m88 w87 with sales of about $3 billum annually. GL will continue for some time to receive myahy inmme fmm patents related Revenues

$10,889

$8,702 to consumer electmnics pnxtucts. Other related closings, Eamings before curaonlinary item principally for ofishore consumer electmnics operations, j,$",',';

',',7;',,{tp change in 784 579 took place in 1988.

Net earnings 784 1,035 Also during 1987, activities involving a "new pnxlucts" division and NilC's radio networks were sold for cash The alx>ve unaudited pro forma infonnation has been aggregating about $90 million anxl a note for $3 million.

prepared based on asstunptions that management deems

- In addition, GE donated RCA s David Samoff Research appropriate, but the results are not necessarily itxlicative of Center to a not-fi>r-profit organization in 1987, those that might have occurred had the acquisitions taken There was no material effect on GE's operating results place at the beginnings of the respective years.The results or financial position fmm the above transactions in the of hlW Credit Operations have been consolidated with year when they occurred.

GEFS since the date of acquisition. There would not have been any significant pm forma effect on consolidated net "EFS earnings per share from this transaction.

During 1989, GE Capital acquired fi>r $407 million cash inJuly aixi December 1987, GE Capital acquired the the remaining 62% of the common suick it had not previ-outstanding capital stock of D&K Financial Corporation ausly ownalin FGIC Corpomtion (FGIC), a mmpany (D&K) and Gelco Corporation (Gelco), respectively, for an principally engaged in pmviding financial guarantee ggregate purchase price of approximately $535 million.

insunmce on sek cted securities. FGIC, which had annual lloth entities are in the business ofleasmg vehicle fleets revenues prior to aajuisition of about $125 million,is now and other equipment, The acquisitions were accounted fi>r consolidated with GE Capital. The aggregate effect of this as purchases. Results of opemtions of the acquired corpo-acquisition axl a number of asset acquisitions fmm other rations have been included in GE Capital since their financial services businesses during 1989 was not material.

respective dates of acquisition and are not material.

= InJune 1988,as part of the management led acquisition of h!ontgomery Ward & Co., Incorporated (hlontgomery Ward) from hiobil Corpomtion, GE Capital acquired hiontgomery Ward's credit operations comprising hlont..

Other income of GE except GEFS is summarized in the gomery Ward Credit Cor[xmtuon (hth Credit) and certain table below' related assets (collectively with htW Credit, hlW Credit Operations) for a cash purchase price of $718 million.

On millions) 1989 1988 1987 GE Capital and Kidder, Italxxty acquired 40% anxl 10%,

Royalty aint technical respectively, of hiontgomery Ward's common stock fi>r a agreements

$359

'$359

$283 cash purchase price of $4 million atxl $1 million, respec.

Marketable securities and bank tively, in addition, GE Capital and Kidder, Pealxxty paid deposits 106 155 133 cash of $82 million and $8 million, respectively, fi>r pre-

$'Cj",'Cdr $"ic$

kj j

i ferred stock m 51ontgomery Ward. The management-led otherinvestments acquisition of h!ontgomery Ward was partially financed Interest ii 13 15 by GE Capitalin the fi>rm of a $275 million sulxntlinated Dividetkis 2

8 4

loaa Other suintry itenis 182 45 101 SW

$680 5649 The acquisition of the AlW Credit Operations was accounted for as a purchase, and, accordingly, the pur-chase price was alkicated to the assets and liabilities of h!W Credit Operations based on estimates of fair value. The excess purchase price over estimated fair value of net assets acquired (gmxiwill) is being amortized on a straight-line basis over 20 years.

50-

(

a 4

s Note' g GEFS Revenues from Operations Details of cenain items included in earned iixume fium financing leases are shown below.

GEFS revenues frum operations (earixtl income) are sum-U " "#""O 39"9 3988 3987 marimiin the table below, (in millions) 19M9 1988 1987

1. "C'.I nsntownt tax runt h; f amoruied t

Time sales loim,intestment arni 1)irect financing leases

$16-

$20

$31 other income

$ ' 8,113 $ 5,986 $ 4,475 Ineraged leases 21 3

16 Financing leases 1,078 870 738

'liital financing leases

$37

$23

$47 Operating lease rentals 1,426-1,372 536 Premium aiulconunission income

" "' "" '"I# "b'C' " I""I"#' "'

ofinsurance affiliates 1,810 1,802 1,748 I#"'# #"* P #""."

I ect hnanang leases

$38

$39

$44 Conunissions tux! fees of securities Incraged leases 12

.9 4

broker dealer 518 625 728

'l'"*"if """#i"E #"'#8 b

I I

d d

$12,tF15 $10.655 $ 8.225 Noncancelable futur e rentals due fmm customers for equipment on operating leases as of December 31,1989 totakxl $2,354 million aixl are due as follows: 1990-

$734 million; 1991 - $484 million; 1992 - $353 million; 1993-$254 million; 1994 - $164 million; aiul $365 mil-tion thereafter, Note -j Supplenal Co@em M&dng unumi upnm4 Supplemental cost details are shown in the table below.

Supplementalcost details 1989 1988 1987

-(In millions)

GE GEFS linal GE GEFS Total GE GEFS Total Employee compens;uion,induding Social Security taxes and other Irnefits

$11,fMio - $1,103 $13,063

$11,6!M) $1,052 $12,742

$12,139

$959 $13,098 Selling, general and administrative expense 6,662 6,662 6,250 6,250 5,979 5,979 Company-imuled research aix!

development 1,334 1.331 1,155 1,155 1,191 1,194 hfaintenance arxt repairs 821 821 839 839 810 840 Renta? cepense 709 176 885 700-160 860 657 123 780 Advert.dng 415 75 490 413 66 479 495 51 546 "Iaxes, except payroll and inmnw taxes 298 110 408 374 77 451 289 82 371 Total employee compensation data include Social Security taxes of $804 million in 1989, $819 million in 1988 aiul

$796 million in 1987, 51

W t

y.

h Note [ Pensions end Other Retiree Benefits future service perial of employees. Prior service cost liar changes in pension benef ts that are allocable to previous GE and its affiliates sixmsor a number of pension ami perials of service are amortized in the same manner.

other retiree benefit plans. This note summarizes imix>r-Actuarial assumptions for the principal pension plans tant financial asixtts of GE's obligations for these plans, include 8.5CI lbr lx>th the assunxti discount rate used to Measurenwnts of obligations and costs are based on actu-determine the present value of future benefits and the arial calculations involving various assumptions as to expected long tenn rate of retuni on plan assets. The future events, assuned mte of avemge future increases in pension bene-fit compensation is 6.5%.

Principalpension plans Employer costs (br the principal pension plans in 1989 aixl The principal pension plans are the GE Pension Plan 1988 recognizni the impact of continual finorable invest-(GE Plan) anxi the GE Supplementary Pension Plan (Sup-ment perfonnance. Benefit costs for service during the plenwntary Plan).The RGA Retirement Plan (RCA Plan) year recognize plan design changes in 1988. For example, was merged with the GE Pension Plan at the eixi of 1988.

beginning in 1989, employee contributions no longer Amounts arxl comments alxmt the GE Plan in this note reduce pension costs because such contributions are used include the RCA Plan Ihr all perimis shown. Other pen-to provide additional pension benefits. Details of cost Ibr sion plans are sponsorni by donwstic anxi foreign alliliates, the principal pension plans fbliow.

but these are not consideral to be significant iixlividually Cost for princ.ipal pension plans or m the aggregate to the consolidated financial lxisition.

On milliono 1989 1988 1987 The GE Plan covers substantially all employees in the i

United States, including approximately 50(7c of GEFS

" "N'[g"["

"d#

{

employees. Generally, benefits are based on the greater of ameributions

~

$ 413 $ 300 $ 385 i

a ibnnula recognizing career carnings or a formula recog-Inte est cost on pndected benefit 1

nizing length of service aixi final average earnings. Bene, obligation 1,259 1,232 1,187 l

Recogmied return on plan assets (1,574) (1,460) (1,293) 1 lits are funded through the GE Pens. ton Frust. At the end Net amortization (339)

(299)

(254) of 1989, approximately 208,900 employees were covered, Net pension cost

$ (24I) $ (227) $

25

. approximately 122,900 fonner employees with vested Deuu.ls of return on plan assets nghts were entitled to future benefits and approximately Actual return on plan assetr

$ 4,026 $ 2,261 $ 1,337 154,500 retirees or beneficiaries were receiving benefits.

Recognised return on plan assets (1.574) (1.460) (1.293)

The Supplementary Plan is an unfunded plan providing Unrecognimi return on plan assets $ 2.452 $ 801 $ (56) supplementary retirement benefits primarily to higher-q level, longer-service management and professional Recognized return on plan assets is determined by employees in the United States. At the end of 1989, about applying the expected long-tenn rate of return to the mar-4 3,100 employees were eligible (br this plan, and about Let-related value of assets.

j 4,100 retirees or beneficiaries were receiving benefits.

Fundingpolicy !br the GE Plan is to contribute amounts Statement ofFinancial Accounting Standards (SFAS) No. 87 sufficient to meet minimum funding requirements set requires use of the pnjected unit credit cost methmi to Ibrth in U.S. employee benefit and tax laws plus such addi-detennine the pmjected trnefit oblig;uion and plan cost.

tional amounts as GE may detennine to be appropriate l

The pmjected benefit obligation is the actuarial present from time to time. GE made no contribution for 1989 and value of the portion of projected future benefits that is 1988 because the funding status of the GE Plan precluded

-l attributed to employee service to date. The benefit cost Ibr current tax deduction and a contribution would have gen-service during the yearis the portion of the projected ben-eratal an excise tax.

j elit obligation that is attributed to employee service during The funding status of an ongoing plan may be meas-

[

the year.This cost methmi recognizes the effect of future ured by comparing the market-related value of assets with compensation ami senice in pn>jecting the future benefits.

the projected benefit obligation. The market-related value in addition, SFAS No. 87 establishes a " transition gain."

of assets is based on amortized cost plus recognition of 3

This is the excess atJanuary 1,1986 (when the Company market appreciation and depreciation in the portfblio over adoptnl SFAS No. 87) of the current fitir market value of five years. GE believes the market-related value of assets is l

plan assets over the plan's projected benefit obligation.

a more realistic measure than current liiir market value L

This transition gain is being amortized over 15 years except that such excess for the RCA Plan was recognized l

as an asset in accounting (br the RCA acquisition in 1986.

l Gains and losses that occur because actual experience 1

l differs from that assumed are amortized over the average 1

l

\\

l I

]

52

e -

because the nnrket-s elated value rnluces the impact of Note f interestandOtherFinancialCharges slunt tonn market fluctuations.The funding status for the

' principal lwnsion plans follows.

GE. Interest capitalized, principally on major propeny, plant aix! n[uipment pnijects, was $ 18 million in 1989,

$11 million in 1988 anxi $23 million in 1987.

t5 ill 1989 1988 GEFS. GEFS interest anxi discount expense s eponed in the Market related valuc of assets

$20,794 $19,308 Statement of L.armngs is twt of intes est income on temix>-

Projectalbenefit obligation 16,057 15,473 niry investments of excess fmxis ($160 million, $285 mil-A sduxlule raunciling the pmjectal benefit obligation lion arxl $165 million in 1989,1988 anxi 1987, respectively) for principal pension plans with GE's rnurded [wnsion anxi capitalimiinterest of $13 million, $16 million anxi liability is shown below.

$4 million, respectively, for 1989,1988 aix! 1987.

Reconciliation of projected benefit obligation with pension liability for principal pension plans Note 8 GEFS AllowanceforI.osses on Iwember sI on millium)

I989 1988 Financing Receivables Projectal benefit obligation

$16,057 $15,473

~ less runent fair ma Let value of(nnt assets (24,211) (21,502)

Unn cognimi SFAS No. 87 transition gain 1,693 1,847 GEFS allowance for kisses on financm.g nreivables tepre-Other unrecognimi net experiem e gains 5.333 3,303 sented 2.63% of total financing nceivables at lxxh year-Unrecognimi prior-service cost 90 114 eixls 1989 aixl 1988. The table below shows the activity in Reconled prepaid pension assets 1,469 1.177 g;;,

p g g;

g; Reconfed pension liability

$ 431 $ 412 each of the last three years.

The ixirtion of the projected benefit obligation repre.

On millions) 1989 1988 1987 senting the accumulated benefit obligation amounted to 11alance at lanuar 1

$ 972

$ 743 $ 603

$14,940 million aixt $ 14,073 million at the ends of 1989 Additionsibargedto openuions 527 434 290 and 1988, respectively.The vested benefit obligation was Net transfers related to companies

$ 14,72 I million aml $ 13,895 million at the eixls of 1989

""I"i"'I "'"I 5"Id 48 89 21 Amounts written of f (420)

(294)

(17I) aml 1988, respectively,Ihese amounts are based on com-Balance at December 31

$1.127

$ 972 $ 743 pensation aint service to date.

Trust assets consist mainly of common stock amt fixed income investments. Trust assets included GE conunon Ainounts written offin 1989 were approximately stock valued at $201 million at year-cixi 1989 ($139 mil-E98% "I""' rage financing receivables outstanding during lion at year-cixt 1988) mainly held in connection with an the > rat, compared with 0.81% aml 0.62% of average itxlexed portfiilio.

bnancmg rece,ivables outscarxhng during 1988 awl Other unrecognimi net experience gains resuhed prin-1987, respectively, cipally from favorable investment perfonnance.

N.9u_.i.

Principal retiree health care and life insurance plans GE and its alliliates sixmsor a number of plans providing GE. Unusual expenses in 1987 were provisions for corpo-retiree health care and life insurance benefits. GE's aggre-rate restnicturings. These were for the expenses of refn-gate cost for the principal plans, which cover substantially cusing a wide variety of business and marketing activities all employees in the United States, was $283 million in and reducing fi> reign ami domestic risk expsures. These 1989, $302 million in 1988 and $278 million in 1987.

provisions induded costs of rationalizing and improving a Generally, employees who retire after qualifying for large number of pnxluction fitcilities; reairanging pnxtuc-optional early retirement umler the GE Plan are eligible to tion activities among a number of existing plants; ami participate in retiree health care and life insurance plans.

reorganizing, phasing out or otherwise concluding other ilealth care benefits for eligible retirees under age 65 ami activities no longer considered essential to the comiuct of eligible depemients are included in costs as covered the Company's business.

expenses are actually incurred. Rir eligible retirees aml GEFS. GEFS unusual expenses in 1987 included amounts spouses over age 65, the present value oll future health related to insider inuling charges and business restructur-care benehts is f undal or accrued and is mchided in ing activities of Kidder, Pealxxty.

costs in the year the retiree becones eligible fi>r beneh,ts.

The present value of future life insurance benefits for eli-gible retin es is furided arul is iiicituted in costs iii the year ofretirement.

Most retirees outside the United States are covered by government heahh care prognuns, aml G E's cost is not significant.

53

w Note y Provision for income Taxes (:xcluding 1987 cxtraordinary item and cumulative effect of changes in accounting principles)

Provision for income taxes 1989 1988-1987 (in mi!! ions)

GE GLFS Total GE GEFS

'lotal G E.

GLl'S Total

- Estimated anuiunts payable (recoverable)

$ 1,375 $ 48 $1,423

$1,311 $ (32) $1,279

$1,246 $ (212) $ 1,034 Defened tax cxpeme (benefit) from " tem [x>rary dif fer ences" 242 144 386 (152) 274 122 (71) 231 160 investment cralit deferred (amortired)- net (64) 19 (45)

(63)

(3)

(66)

(87)

I (86)

$ 1.553 $ 211 $1.764

$1.096 $ 239 $1.335

$1.088 $ 20 $1,108 "Fstimated amounts payable" includes amounts applica-A reconciliation from the consolidated provision for ble to foreignjurisdictions of $272 million, $344 million income taxes that would have resulted using the U.S.

and $197 million in 1989,1988 and 1987, respectively.

federal statutory rate to the actual provision is shown General Electric Company files a consolidatal U.S. fed-below.

eral income iax return that includes GEFS. GEFS' provi-Differences hetween expected U.S. federal atstutory sion for estimated taxes recoverable (payable) mcludes its tax. rate provision and ectual tax provision effect on the consolidated tax return. The amount re[x>rted (In millions) 1989 1988 1987 by GEFS has been reduced to the extent of consolidated Expected consolidated tax investment tax credit carry fi>rwards of $ 168 nnhion at pmvision at statutory rates

$1.939 $1,605 $1.291 December 31,1987. Investment tax crnlit carryforwards increase (reductioniin taxes of $168 million aixl $107 million realized in 1988 and resulting from GE 1987, respectivelv, were reflected as reinstatements of inclusion of GEFS earnings defenul tax balances.

(before extraordinary item a,tul cumulatn e effect of accountmg Deferred income taxes reflect the impact of" temporary change in 1987)in before-tax differences" between the amount of assets aix! liabilities income on an after-tax basis (315)

(268)

(221) fi>r financial reporting purposes anxl such amounts as Varying tax rates of other i[i[yl1) foreign)

(60)

(76)

(117) measured by tax laws and regulations. See note 27 fiir

.;je )

a 7,

details of the balances m deferred income taxes at the ends credit (64)

(70)

(88) of 1989 and 1988.

Current-year effect ofincome tax The U.S. investment tax credit (lTC) was repealed, with accounting change 133 Au odin-net 125 04) 98 some transitional exceptions, effectiveJanuary 1,1986.

However, because ofits use of the deferral meth<xt of (314)

(428)

(195) accounting Ior the ITC, GE has an unamortiicd balance increase (reductionlin taxes resulting from GEFS remaining. As a result of the accounting change.m 1987, Amortization ofinvestment tax unamortized ITC is treated as a temporary difference for crnlit on financing aiul defenol tax accounting. GE's remaining unamortiied ITC operating leases (22)

(17)

(27) halance was $112 million, net of deferred tax at year-end DIV"leixis received which are not I

• 1989, atxl will be added to income in future years.

,,[rr gy ax-exempt The U.S. federal statutory tax rate on corporations was marketable securities (131)

(10I)

(112) 34% in 1989 and 1988, down from 40% in 1987. Data income taxes at capital gains rate (14) about " effective tax rates,"i.e., pnivision fiir income taxes Adjustment of tax-daluctible as a peicentage of earnings beli>re income taxes, extraordi.

N[*3

'""I*'"'""'"

ggi) ggg) nary item and cumulative effect of accounting changes, Change in tax-rate assumptiom follow.

for leveraged leases (23)

(14)

(31)

All other-net 48 61 (12)

Effective tax rates (before extraordinary item and cumulative effect of accounting changes) 076)

(110)

(209) 1989 1988 1987 Eliminations 315 268 22l

" I"'"

GE 28.3% 24.5% 33.9%

GEFS 18.6 23.3 3.5 l

Consolidated 30s 28.3 34.3 Provision has been made for substantially all U.S. ful-L eral income tax liabilities applicable to undistributed earn-ings of affiliates and associated companies.

54

~

o x

L liased on the location (iiat taxjurisdiction) of the busi-Note ]g GECurrentReceivables ness providing g<xxis or services, consolidated domestic inmme befi>re taxes, extraordinary item anxi cumulative gx.,emtier 31 on minions) um9 1988 effect of changes in accounting principles was $4,930 mil-lion in 1989, $3,936 million in 1988 aint $2,710 :nillion in RC(eivable fnim:

$5' 1987. The corresjxnuling amounts fi>r fin eign-based oper-f,["',[*]comismiics ations were $773 million, $785 million aix! $517 million in othen i,gg7 i,g37 each of those > cars, respectively.

7,333 7,3tx; less allowaixe for losses (167)

(196)

Note )) ' Cash and Equivalents '

. Deposits restricted as to usage atxl withdrawal or used as

' partial compensation fi>r short-term lx>rmwing arrange.

Note ]j GEinventories j.

nwnts were not material for either GE except GEFS or GEFS. See note 21 for related information about credit

'j

,, g,g, g,

3g39

,ggg lines aixl compensating balatues.

Raw materials aixi work in process S 5,492

$ 5,603 Finished g(xxis 3,103 2,863 Note y MarketableSecuritiesCarriedat Unbilled shipments 249 246 8

87I2 (2'844 Cost

,189)

(2',226) 1.ess revaluation to 1.1FO l.lFO value ofinventories

$ 6,655

$ 6A86

)

Carrying value of marketable securities for GE, except GEFS was substantially the same as market value at year-1.lFO revaluations decreased $37 nu.lh,on m, 1989 com-eixls 1989 and 1988. Market value of GEFS' securities carried at amortized cost was $6,952 million and $5,537 Imred with an increase of $ 150 million in 1988.1.1FO 1million at December 31,1989 atxt 1988, respectively, revaluations increased $324 million in 1987, mostly relatal to the accounting change described in note 1. Included in these changes were decreases of $68 million, $23 million l

Note )) GEFSMarketableSecuritiesCarried and $22 million (1989,1988 aixl 1987, respectively) due to st Market' lower inventory levels. In each of the last three years, there j

was a current-year expense fi>r price increases, j

Ik t emtier 31 On millions) 1989 1988 U.S. government atul federal agency i

securities

$4,399 -

$2,433 State and municipal securities 191 215 Corpomte st(x ks,Ixnuls mxt foreign securities 3,898 2A41

. $8A88

$5,089 -

{

At December 31,1989, the carrying value of equity securities carried at market value included unrealized gains and unrealized losses of approximately $32 million aixt $37 million, respectively.

A significant portion of securities carried at market value at December 31,1989 was pledged as collatemi for

- bank hxms and repurchase agreements.

l 1

1 55

'V e

o~

y o - Note ](GEFS Financing Receivables (investment in time sales, loans and financing leases) ried at gn>ss lx x>k value, which includes finance charges.

~ December 31 (in millium) '

1989 198N "F,inancmg leases,, consists of direct financing and lever-Time sales and loans aged leases of alicraft, railroad n>lling stock, automobiles Onnmen s,xl auto firiancing Retailer ar 5 9,606 5 7,465 arx1 other transrx>rtation ajui nnent, data pnicessing ~-

i alical estate financing 8,890 7,725 equipinent, uxl dical gl}iipment, aixi other manufactur' ing, Onnmenial anxlindustrial kians 8,599 7,476 Equijnnent sales financing 2,562 2,171 power generation, numng and commercial equipment arxl llorne mul sect cation firiaticirig 1,222 1,888 facilities.

Other 45 As the sole owner of assets urxler direct financing leases 30,879 26,770 anxl as the equity panicipant in leveraged leases, GEFS is Deferred income (737)

(983) taxed on total lease payments trceived atKl is entitled to tax -

uc ns on e mst had aMs aM tax -

I rr x1 nri oli 30,142 25,787 deductions for intet est paid to third-party participants, investment in financing leases GF,.FS also,s entitled generally to any investment tax cnxh.t i

l' Direct financing leases -

9,827 8,433 Ieveraged leases 2,937 2,691 on leased equipinent atxl to atiy residtlal value ofleased -

12,761 11,124 assets.

t.!N.

42,906 36,911 Investments in direct financing atxl leveraged leases

11. css allowance for losses (1,127)

(972) iepresent unpaid rentals arxl estimated unguanmteed

$ I1,779

$35,939 residual values ofleased equipment, less related defenrd income arxl principal anxi interest on notes anxi other

[

" Time sales and loans" represents transactions in a vari, instruments representing third-party participation.

ety of forms, including time sales, revolving charge and Because G EFS has no general obligation on such notes credit, mortgages, installment kxms, intermediate-tenn arx1 other liistrtiments trpresciiting diisti-lxiity 1xirticipa..

1 m loans, anxi revolving loans secured by business assets anxi tion, such notes arxl other instruments have not been -

mandatorily redeemable preferred st<x k, The portfolio '

included in liabilities but have been offset against the includes time sales arxl loaris carried at the principal related rentals n ceivable GEFS' share of rentals receivable

' amount on which finance charges are billed peri <xlically, is sulxnxlinate to the share of the other participants who and time sales aix! k>ans acquired on a discount lxtsis car.

also have a security interest in the leased equipment.

- Additional detail alxmt investment in financing leases at December 31,1989 mxt 1988 is shown below.

Investmentin financing leases Direct Total financing leases leseraged leases imancing leases cDecember 31 (In nIilhons) 1989 1988 1989 1988 1989

'1988

,1 Total minimum lease payments receivable

$12,009

$10,109

$11,444

$10,745

$23.453

$20,854 less principal azul interest on thinl-party nonncourse debt-(8,207)

(7,893)

(8,207)

(7,893) i Rentals irceivable 12,009 10,109 3,237 2.852 15,246 12,961 i

Estimated unguaranteed residual value of k ased assets 1,250 1,102 883 817 2,133 1,919

. lzss deferr ed income (a)

(3,432)

(2,778)

(1,183)

(978)

(4,615)

(3,756) l i investment in financing leases (as shown alx>ve) 9,827 8,433 2,937 2,691 12,761 11,124 -

less amounts to arrive at net investment l

Allowance for losses (214)

(121)

(48)

(74)

(262)

(195)

Deferred taxes arising from financing leases (1,207)

(1,218)

(2,444)

(2,406)

(3,65 l }

(3,624)

Netinvestmentin financing leases

$ 8,406

$ 7,09i

$ 445

$ 211 5 8.851

$ 7,305

?

. a) Tiwal financing lease deferred income is net of deferred initial direct costs of $37 million and $33 milhon for 1989 and 1988, respectively.

I

(

l I-l 1

l 56

V o.

3' Contractual maturities of time sales inxl loans atxt retitals receival>le at Det einber 31,1989 are showTi below.

Contractual maturities j ggr, (in inilhons)

Total '

1990 1991 1992 1993 1994 and aher Time sales and loans Retailer aint auto financing

$ 9,606

$ 7,336

$ 1,980

$ 196 57 29 8

O>mmercial real estate financing 8,890 403 619 1,105 2,088 1,599 3,076

. Guinnx rcial arul ingiustrial loatis 8,599 1,326 1 026 1,006 803 758 3,680 y

Equipment sales financing 2,562 908 654 400 230 131 239 llomc atulinreation firiancing 1,222 686 77 69 64 60 266 30,879 10,659 4,35(i 2.776 3,242 2,577 7,269 investment in financing leases s

' Direct financing leases 12,009 2,788 2,651 1,879 1,371 783 2,537 lxteraged leases 3.237 141 156 162 166 181 2,431 15.246 2.929 2,807 2All 1,537 tki4 4,tki8

$46,125

$13,588

$ 7,163

$ 4,817

$ 4,779

$ 3,541

$12,237 1

?

Experience has shown that a substantial lxntion of I

receivables will be paid prior to contractual maturity.

Accordingly, the maturities of time sales and hians anxl Note ]8 Proporty, Plant and Equipment -

rentals receivable shown in the table above are not to be (including equipmentleased to -

.r regarded as forecasts of future cash collections, others) l Note ][ OtherGEFS Receivablesfromand

'**""'3'('""'""""'I

'9"9

'988 Payables to Brokers and Dealers original cost GE Included in other recexables and other liabilities of GEFS

1. tux! aixt i provenents

$ 266 $ 260 I di are amounts receivable from atid payable to brokers aixi

%c *'*"* ""d I"'"I g

g dealers in connection with Kidc'er, Pealxxty's normal trad.

hiack"inery ami equipment 13,756 12,957.

j

-ing, lending and lxirrowing of securities, At December 31, traschokt costs amt manufacturing 1989 and 1988, such amounts consisted of the following, pl,uu under construction 1,051 1,12c, Oilatul gas properues 749 764 thember 31 (in millions) 1989 1988 20,422 19,357 GEFS includedin other receivables

. Securities failed to deliver

$ 215 $ 132 Buildings amiequipment 1,206

,45 b *{> ment leawd unahm 4

De}xisits paid for securities horrownl I,030 1,226

{# '

9 Other. pnncipally clearing organizations 17 32 t roilinW i'

1

$1,262 $1,390 hlarine shipping containers 816 857 Included in otherliabilities Aircraft 1,324 618 i

Securities failed to receive

$ 484 $ 451 Data pmcessing equipment 461 355 1

De]xisits received for securities loaned 665 903 Other 816 634 Other, principally clearing organizations 24 48 FAl6 5.811

$1,173 $1,402

$28,468 $25,168 L

Accumulated depreciation, depletion and amortization GE

$10,756 $ 9,997 GEFS Equipment leased to others 1,745 1,32i Buiklings amiequipment 321 239

$12,822 $11,557 GEFS' increase in buildings and ajuipment includes the effect of the transfer of GE Americom from GE at year-end 1989. Current year amortization of GEFS' ajuipment on lease to others was $647 million, $665 million and $316 million in 1989,1988 and 1987, respectively.

At December 31,1989, GE except GEFS had minimum rental commitments under noncancelable operating leases 57

aggregating $3,069 million. Amounts payable over the -

Note % AllOther Assets j

' ncxt five years are: 1990-$537 million; 1991 - $480 million; 1992 - $394 million; 1993 - $338 million; arxl December 3I (in millions) 1989 1988 1994 - $308 million.

At December 31,1989, GEFS had minimum rental GE commitments under noncancelable operating leases aggre-I"{5"{'"5, d mquies gating $942 million. Amounts payable over the next five (including advances of $54 million years are: 1990 - $ 168 million; 1991 - $ 143 million; and $29 million)

$1,448 $ 617 1992-$106 million; 1993-$65 million;arxi1994 -

Miscellaneous investineiits

- $68 million.

Gmenintent atxl government-paaranteed secunnes 144 202 Other 167 175-Marketable equity securities 51 72 Note y intangible Assets less allowance forlosses (113)

(100) 1,700 996 1 repaid pension assets 1,469 1,177

- themier 31 On millions) 1989 1988 Recoverable engineering costs on GE gmenmient contracts 782 752 G<xxtwill

$6,517 $6,423 jongynneceivables 608 675 Other intangibles 531 561 cmon pmgram costs 410 352 Defened charges 372 318 7D18 6,981 Real estate development pmjects 31 73 GEFS Customer financing 62 73 G<xulwill 1,587 1,364 Other 219 205 Other intangibles 187 2nl 5.653 4.621 1,774 1,568 GEFS

$8,822 $8,552 Investment in associated companies (including advances of $277 million and $389 million) 1,045 1,145 Accumulated amortizat. ion of GE's g(xxhvill was Misceltmeous investments 1,539 1,034

$484 million aml $318 million at December 31,1989 and Broker-dealer cash and securities 1988, respectively. Accumulated amortization of other segregated by regutulon 134 383 intan@'bles for GE was $474 million arxl $455 million at Defened insurance auluisition mts 410 2g2 Deferred charges

.74-

.5 December 31,1989 amt 1988, respectively, The largest GE Real estate pmperties 151 122

_ g<xxiwill anxl other intangibles were from the RCA ac luisi-Other 219 247 tion, for which goodwill is being amortized on a straight.

3,772 3,418

~ line basis over 40 years. Other amounts of g(xxlwill being

$9,425 $8,039 amortized over 40 years arose from a number of acquisi-tions in 1987 and 1988. All other GE intangibles and For GE, aggregate market value of marketable equity g(xxiwill are being amortized over shorter peri <xis as securities, which are carried at cost, was $67 million and appropriate, mnging from one year to 20 years.

$72 million at year-emls 1989 amt 1988, respectively, Gross Accumulated amortization of GEFS' gomlwill was unrealized gains and losses were $ 19 million and $6 mil-

$ 181 million aml $133 million at December 31,1989 and lion, respectively, at December 31,1989.

1988, respectively. Accumulated amortization of GEFS' The National Broadcasting Company (N BC, an affiliate other intangibles was $90 million mxt $73 inillion at of GE) capitalizes program costs (including rights to December 31,1989 ami 1988, respectively. The principal bmadcast) when paid or when a program is ready for sources of GEFS gmxlwill include acquisitions of FGIC broadcast, if earlier. These costs are amortized based up<m Corporation: Gelco; MW Credit Operations; Kidder, Pea-projected revenues or expensed when a prognun is deter-lxxly; ERC; ami a number of auto auctions. Amortization mined to have no value, is being recorded over various perials, none more than 30 At year-emi 1989, NBC had approximately $ 1.70 billion

. years. GEFS' other intangibles represent principally the of conunitments to acquire broadcast material or the rights value ofinsurance-in-force related to ERC's property and to bmadcast television programs that require payments casualty reinsumnce business, which is being amortized on over the next six years, a stmight line basis over its estimated life of approximately For GEFS, miscellaneous investments included $ 1.149 16 years.

billion aml $641 million at December 31,1989 and 1988, respectively, ofitems at estimated realizable values previ-ously included in financing receivables.

58

o o

(

Nees Short Term Borroednes The average daily balance of gel'S' lxinuwings, exclud-ing the current }xinion of long-tenn lxiriuwings, was Amount and eversee rete et Deeember 31

$31,154 million in 1989 annpanxl with $27,889 million im 1tu for 1988.1he lktember 28,1989 balance of $34,769 inil-On inillinne Arnount Rate Anu,ut t Rate 1988 bataiar of $30.385 imllion was the maximum bal-GE ante in 1988. The average short-tenn intentst nite, exclud-Gunnwicial paper

$ 597 8.5%

ing the cunrnt }xution oflong terin debt, was 9.44% for eixIts 313 8.2 337 8.5%

1989,icptesenting short-tenn inte est expense divided by i

Afhiiate16mL horrowings the average daily balance, comp urd with 7.96% for 1988.

Quiswipall; loreign) 436 18.8 261 25.7 At ikxemier 31,1989, GE Capital had established lives Current porunn of.

of nedit mrgregating $13.445 million with I87 banks, syg-tenn tuinowmgs

,1.>0 1.2.

indudi@ 0370 ndtliouf n volving cnxlit agreements with 118 banks pursuant to which GE Capital has the nght 1.696 1.861 to lxinuw furxis for geriods exuxxiing ore >rar. In addi-gg,,

onnmenial paper 30.452 8.80 24.591 9.32 tion, at Ikremier 31,1989, appruximately $ 1,250 million Hanks 2,702 8.58 1,987 9.34 of GE's entlit lines was available li>r use by GE Capital. A Gunent portion of total of $4.430 million of these lines also was available for use by M Mnancial Servic es. During 1989, gel'S did not Nts it tr t departurnts 847 8.29 990 8.48 lxinuw mulet any of these credit lines.

P,mi m Lsuixt GEFS compensates hnks fint credit facilities in the fonn investnwnt tettincates 374 373 of fees or a unmbitiation of balances atxl fees as agired to 35,740 2H.731 with the bank, tuminations (236)

(170)

At Iks ember 31,1989, Kidder, Pealxxty had established

$37.2no

$30.422 lines of cnxlit aggregating $5,727 inillion, of whie $3,862 inillion was available on an unxtured basis. Iknowings lhe avenige indance of short-tenn lxinuwings ihr GE fmm banks were primarily unsecunxi demarxl obligations, euept GEI'S exduding thecurrent portion oflong tenn at interest rates appinxiinating biuter call kian rates, to bonuwings, was $2,284 million in 1989 companxl with an finance inventories of securities and to facilitate the securi-avenige balance of $1,416 million in 1988. (Except for ties settlenent pmcess.

comnwrcial paper, the average balance is calculated by averaging inonth cixi balances ibr the >rai t cointneicial paper average bonuwings are basal on daily balances for the year.) *lhe maximum balances in these calculations were $2,791 million at the eixl ofJ une 1989 aixl $2,444 million at the cixi of September 1988. The average woild-wide elkrtive interest rate for the year 1989 was I l'X t for 1988,it was 15'X.These average rates reinesent total short term interest incurnxl divided by the average bal-ante outstaixling. Although the total unused credit avail-able to GE thiuugh banks anxi commetrial credit markets is not readily <piantifiable, confirned enxlit lines of about

$1.3 billion had been exteixled by 47 banks at year end 1989. Substantially all of these lines also aic available for use by GE Capital atxt GEFS in addition to their own cnxlit lirws.

L s

O e

~

u.t. 2 2 u - t.e.,.u.

N.t.25 w e ~ s.

Iks emlr: 31 (In inillu,ns) lim 9 1988 Ikxemtwa 31 (in nulla ns) lim 9 1988 GE gg g 3,9.g7 $ 4,339 Tiade auuunts

$2,6(Ni $ 1,939 Gl.15 12,165 10,862 Gollestal for the auount of othe:S 195

?M2 1;liminations (2)

O10) 0.her (iinhuling aw wiatut tompmics) 1(K) le g

2,901 2.136 GEFS Auuunis anxl drafis pnable 4.141 4.132 Outstatuling balaines in king-tenn bonowings for GE at 1)u einbet 31,1989 atul 1988 are as Iollows, Ellminations (379)

("61)

$6.666 $6.(Wil Weighted Iksemtwt 31 anctage tln inilhons) inicient rate hiaturities 1989 1988 Notes 6.979 1991 l!F.12 $1,056 $1,163 Note [ GEFS Securities Sold but Not Yet 1.xtewhble noies (a) 7.69 1998."<wHi 600 800 Purchased, at Market Detenturessinking (muldetentures 8.43 1992 2016

$13

$6 l'otrign ruriency Iks emtwe 31 (in milhons) 19M9 1988 notes (b) 8.14 1992 l!FJ3

!KHI 900 Deep divount U.S. gmeinment atul federal ageticy notes (()

7.51 1993 199i 3$0 350 sec urities

$3,508 $1,$60 kglustrialdevelopment/

htate and inunicipal su ut ities 4

9 iuillution (onttol Quiunate sttu ks,lu nuh arxi loreign lunwh 6.17 1991 2019 236 "62 scrurities 578 519 Other (d) 292 310

{l.090 $2.0K8

$3,917 $1330 ta) GL will eset inteicat sates at ciulof initialaiuleath subwquent irnenest lwinut. At cas h rate tenet date, notes are iniccinable Note A GE All Other Current Costs and i" ' h"I" "' i" P"" "' #"'P""" "' '*P"Y". Cut i ent miet nth'# "' "I"'"" "' '

T holderi at im e s alue plus au t ued interest Expenses Accrued penoas sange gn,m hl.n I,1991 to Apt U H,1993. Notes nie in-s luded in ihe t utient pottion of long tenu debt w he:i the

"h',",*,'l,',",';"l[,"$ j"g' * '"[M"[,[','E Unit l'io mdhon At ) cat-etub 1989 alul 1988, this arrount itirluded taxes g,)

artrunt of $1,521 inillion aiul $ 1,568 inillion, r espectis ely, noic inue (7%9 uiupon iate> due in 1992, Gl.cmceed inin a aixi mmpensation mxt lenefit accruah of $918 million and

"'"C"m""l i"t"eu.rau. swap agiernwnt uiuln w hic h GL anunes a hsed japanese 3en habihiy (22,262 million) ha pay.

$982 nu.llion, respectively, Also, cluded air amounts for m

n,ning,in< ipa m i992 muip,n inin niinyen,ia,,ic.on,.

p imxluc t warnmties, estimated msts on shipments billal to whaiIwlow the sis inunth ten LillOR.

^

"I" ""

customers a Kl a wide variety oIothet sutxtry items.

nuthon at a hsed cu hange rate of yen 1H0.4 i = US 51.00.

In tomwetion with a US $500 million note inue (9%% < oupon rate) dur in IW3, GL enteinl into c urrent) and interest. rate swap agterments utules whit h Gl. auunws a hsed Dutt h guilder liatuht) (632 milhon) and a hsed Get man mat L liabilit y (373 inillionllor paynwtu of priinip,d in 1993.Gl pa3s internt in the enlwohe t urtenon at mmww hat twlow tlw ieslwi tive c uuent) thice month 1.1BOR.

(() huludmg amortiration of originalinue diununt.the ethsthe intrant satn air. 44% 1.uro dollar notn (US $200 milhon)-

7.41W,2%% U.S. dollar notn(5150 milhon)-7.669, (d) "Other" inu ludes original inue piemium and diu nunts atul a s arict) of horrowings by afhliates ami puent compments with raiious interni ratn and maturitin. Through 1988,"othei" also im luded an adjusturnt to bring RCA luirrowings at autuisition date to fait marLc salue. Su(h RCA twinowings base now all twen retired.

Inng-tenn lxiriuwing matunities during the next five years, including the Ix>rtion classified as cun eut, are

$ l 50 million in 1990, $861 inillion in 1991, $ 142 million in 1992, $982 inillion in 1993 anxl $179 million in 1991.

These amounts are af ter deductina debentures that have been icauluiied foi sinking-fus.J weds.

w Outstatuling halain es in long-tenu lxin owings fo Noto % GE AllOther Ueb6Ht6es gel'S at Iktemhe 31,1989 aiul 1988 air as follows, II" UL C".ept gel'S, this anouut ituhutes tunnunent weighin!

nimpeinatnin aiul twswfit atriuals at 3rai-cluls 1989 atul lksrmtwa 31 m enagr On millkino ininest rair hiaturities 1989 19kN 1988 of $ l.5 I I inillion atul $ l.516 inillion, icspstively, Othet tuincunent liabilities include astuiunts foi pnxh;ct g,nt,,,

klastri notes (a)

ItKil $

165 $ 181 mininities, def en inl ieu entive nimpe: nation. def en ni loicign < unesu y investinent tax cinlit, defenni iluunw aiul a wide vai sety mites (b) 9h1% 1991117.68 1,493 757 of othe sutulry items.

Zein t outu n6Irep cliv mmt tuiten 14.08 lir.ig.a(Kil 2,270 2,270 Exteiulible icwior Note y oe,e,,edi_.eveses

,n,ta, u,ni suites (r)

K25 1991 2018 2,456 2,998 Iloating s ate mitn

(<l) 2019 269 16i Tiu m ellects of prituipt u npnq dih ms Other suites KtXI 1991 2009 6.2(m 5,301 ween dic Can'ying anunnus of anets atulliabih.. ties aiul Ins unanun tiini their tax haws at e suininariml below.

clivount/piemium (981) (1,136)

Totalwnior noten I1.87H 10.538 Ikxemtwr 31 On millkmo 1989 198N Subordinated notes 9.32 1991 1107 287 324 GE exospt GEFS

$12.l(i} $10.862 piuvisinns to expenw,

$(1,785) $(1,723)

Accumulatni clepin-iation 929 852 (4) Noin have n sollmg 13 month on 15-month maturit> aiulIwas Aswtuuul liabilitin ictatni to peinions 409 331 floating intont iairalusnt piimipall) on Gl Gapital's 180414 Othet - net (IH9)

(101) olwn-maiLet noin.

Neulcienni tax aswt (636)

(6Il)

(b) l ni noin cienonunainlin panuts nivelmg (equat io us $ t hN inithon) l.uro iran Gunnu) Units (Oh $ 199 milhon) aiul Gana-GEFS dian dollain (L N $315 milhon), Gl I h has entried into c urinu y I

swap or inincit.iate sw up agirenwnin undri whit h Gl.I $

l'ina'"i"R ra**

3,651 3,62I auumn a hstd piim ipal habihty ami pap hsnt os floatmg is,te Tax transtet leaws 332 335 ininni to a nimnen sat b.mL inumn panv. l on the mnes Operating leawn 331 177 denominatnl in Swiu le aiu n (Oh b l 53 milhon), tbric is no statal piovision los lowes (392)

(377) matutsiy d.nc but insure < alls amt imotot puts air m ailable at othe _ net "57 255 10 ea imenals.Gl.luan limit the ultimate actierment to Oh 9

$153 milhon amt intrant is hsnt los the heat 10->rai triiml. In

'g,g g g gg) g.,9 4gy4 s omus tion with a US $ 125 inithon note lune duc in IWN. GI 1 $

Net delennl tax liabiliti 5 3.543 $ 3.373 omrint into a s uornt) swap agiornwm mulci w hic h Gl.I'h anunwn a hsni pousul nte:Img liabiht) (74 millkm) for p.o nwns of priminulin iW3, h) Ut rh w ill inct intnrni t atn at eml of initiat ami rac h subw-urnt imrini Irvimi. I:oi 1 siembble noin, ai c.u h satoand Note M MinorityInterestinEquityof

< air, hohlen mat intrem noin at huemlut plus nu runt imes.

nt. Guncm inicint iwrimti range liom i'chr uar) 20,1Wo to Consolidated Affiliates hiait h 4,1993. Notn air inn hulnl in ihe a uvient ponion of long-trim debt w ben the inerent.iate newi date in within mw trar.

(d) The mte of intnni luphie on r.u h note is a variable rate luwd 15ctombr8 31 On millions) 1989 1988 on theionmwitial upo tale c.u h month. Internt in luwble at l

the option of Gl I h other anonthl) on nemianimally.

G l'.

I 283 $ 228 gel %

718 753 l ong-tenn honuwmg matusitws dtuin.g the next fisc

$ 1,001 $ 981 yrars,ituluding the runent pntion of notes payable af ter

~

one year, are: 1990 - $ 1,365 million; 1991 - $ 1 A27 mil-Niinot itv iniciest in niuity of consolidatal gel'S aHili.

lion (inchuling $ 165 million of notes having a rolling IS-ates indudes the iuuatue hv GE Capital in 1988 of six month or 15-month maturit)); 1992- $1,678 million; thousanul shares of $ 100 pai value var iable cumulath e 1993 -i1,890 million: and 1991 - $1,073 million.

prefenni sta k Ior twt pnxents of approximately in l)armher 1987 GE Capitalinitiatal a debt extin-

$600 million. No mlditional picien ni shaies wn e issuni guishnwnt pnignun to use the pnwents Innu the issuaiu e in 1989. Dividesul rates on this picien ni sta L during of tww long-tenn debt to sepuu hase or inleem appmxi-1989 rangni fnnu 6.129 to 7.85%.

mately $ l.1 billion of existing debt at mat Let prices or intemption piemiums in ex< css of the twt carrying anmunts.This iesuhnt in an aftet-tax !oss of $62 million (net of $39 inillion tax a nlit) that was ieported as an extnandinary item in the consolidatnl Statenwnt of liun-ings for the year 1987. The extinguishnwnts weie unn-pletnl dus ing the liist quarter of 1988.

61

o s

Note p ShoreOwners' Equity fuixls f rom a comEnation of honowings end fire cash flow. Should worId ntummic anxlitions, a major acquisi-GE prefentti st<x L up to 50,000/XO shar es ($ 1.00 par tion or other ciirumstanc es warrant, the Compuiy would v:lue) is authoriini, but no such shares have been issunt.

nuxlif y the pac e aix! dimension of the repuit hase pio-Authoritetl shar es of nunmon stink (par value $0.63) total gram to maintain the solidity ofits 6nancial position. As of 1,100,00(),000, Daember 31,1989,3,765 thousaixl shat es having ati aggregate cost of $236 inillion had been re} nut hasal shares of GE common stock Dnemtier 3I on timuwuxto tw9 1988 tw7 urxler the prognun and planti in treasury.

In April 1987, G E shat e owrers authorized: (a) an

,[

innease in d e muntenif audioriral shairs of tummon

)

4 k) tre ury sux Unnu 550A0A0 shares each widi a panalue of outstatuling (3 1.781 9W,116 902.953

$ 1.25 to 1,100,000,00(1 shares eat h with a par value of.

$0.63; (b) the split of eac h pr eviously issual common GE shair owners,ajuity is as f. llows.

o share, m.clud.mg shares bekt in tirasury,into two shat es of.

GE share owners' equity common st<x k ca(h eM a par value of $0.63; atxl(t) an on milhone 1989 1988 1987 increase in the numtm m ahoriinishares of prefened Common stock issued st<x L fium 2,000,000 shaies with a par value of $1.00 per 11 alan < c at Januat y 1

$ 584 $ 584 $ 579 share to 50,000,000 shares with a par value of $1.00 per Adjustiiwnt for Stex L split 5

share. All share data have turn adjusted for this change.

Italaixe at ikxember 31 5 584 $ 584

$_ 584 The cfTects of translating to U.S. dollars the financial Other capital stateinents of forrign afbliates whose functional cunency nalance atJanuary I

$ 823 $ 878 $ 733 is the Imal run ency are irx tudal in other capital. Cumula-cigNS:

> tr n$$ iion

()

Y' tive foreign cunency translation adjustments were adjusturnts (4)

(39) 145

$133 inillion, $137 million aint $176 iriillioni of additioits to Umeali/ed gains Oowes)on other capital at December 31,1989,1988 atul 1987, usurities held by imurance respectively, afhliates 5

18 (33)

Gains Oowes)on neasury suu L diquisitions 2

(34) 30 Note % OtherStock4eletedinformation Other 8

Italancent Dnemle 31

$ 826 $ H23 $ 878 Stm L option plans, appreciation rights azul perfonnance llalan(e at lanuary 1

$17,950 $15.878 $14,172 units ate desenhed m, the Company's conent Pruxy State.

Net earnin'gs 3,939 3,386 2,915 ment. Requit enwnts for sux k option shaies may be met Divideixls dettated (1,537)

(1,314)

U.209) within certain restrictions either from unissual or treasury Italante at Decemler 31

$20.352 $ 17,950 $15.878 shaies. During 1989, options weie granted to 3,800 cm.

Common stock held in plo)res atul 15 nonemplo)tc Ditrctors. As of Daember treasury 31,1989, a total of 456 iixtividuals weir eligible to irceive avant o@ons, and all exetupt salaried employees I

s rt 8

WCFC CN ihIC I"r Slmaloption grants. A totalof 4,633 R

Dispositions 1.mployee savings plans (124)

(213)

(148) persons held options exercisable at the erxl of 1989 or in SunL options aixt the future.

appuriation rights (212)

(77)

(96)

Employee stmL owneiship Stock option Information Ascrage per shaie I lan (1I)

(39) 2 gym g,

gg

• "P"""

N' s

t u i (47)

(49)

(42)

Contribution to Gh.. i Pensio" llalaixe atJanuary 1,1989 19,936 $36.41 $44.75 l' rust (25)

Options gramed 5,038 57.19 57.19 Gonversion oflong term Options excic sed (3,954) 28.28 55.64

debt, (1)

(24)

Options surrendered on 1ncentne compensanon exercise of apputiation plans 2

(5) 13 rights (712) 30.77 56.37 nalance at December 31 5 872 $ 891 $ 860 Options terminated (217) 44.45 Italance at ikxember 31,1989 20.091 43.34 64.50 in November 1989, GE's Ihnuxl of Ditectms authorized the repun hase of up to $10 billion of Compmy common Outstaixling options arxl rights expire arxl the awani stock over a hve-year period. This repurchase program period for outstaixting performance units ends on various is designed to be flexible. Shares will be acquinxl with dates fromJanuary 1,1990 to December 15,1999. Shares available for granting additional options at the eixl of 1989 weie 6,473,950 (l 1,936,568 at the eixl of 1988).

62

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' Note y Coitunktments and Contingent

" Net incirase in GlTS financing r eceivables" inchuksi:

untul6 ties j

(In enilliono 19N9 1988 1987 At 1)ntfuler 31,1989, there weic no known contingent incicaw in hians ui fiallities (inchuling guarantees, peixling litigation, taxes custornen

$(24Re) $(23,731) $(18,990) cixl other clairus) that, in the opinion of inanagen wnt, Piiinipal<ollections liom cusionen 21,350 19,802 15,370 woukt be inaterial in irlation to Ge wral Electric Ginnpany Investinent in equipnwnt ilxl(Onsolidated itIlltiateb Illlaticial pos.,illon,llor welt

{gy [tnalwing leases (4,766)

(5,031)

(3,117) thes e any rnaterial conninitnwnts outside tbc norinal Principal <ollections on (uurse of busitwss, liviancisig leases 3,214 3,974 2,291 Net change in nedit cant receivables (1,641)

(957)

(lkl)

Note b

lCa6 Fh

$ (6.542) $ (5913) $ (4.627)

Information GEI'S'"all other investing activities"inclucksh "All other openiting activities"in the Statenwnt of Gash I"*'

"I flows cotisists principally of adjustinents to cutsent atx1 notiturirut accruals of costs atul experises, arnortitation of PunhaxS of inar Letable pierniuni atul discount oli debt, atxl adjustinents to assets uttaities b) insurante MA DM M M) such as ainortization of gtxglwill anniintatigibles.

$ ( g g g, Info 1 nation about accpaisitions arxl dis}xisitions can be wrutities by insuianc e foutui in note '.', %e Statenrnt of Cash flows excludes affiliates 4,481 2,334 2,624 tertain noncash ttansactions that had no significant effects Other (403)

(1,153)

(137) on the investing on financing activities of GE or gel'S, The

$ (801)

$(2.007)

$(1,282) transfer of GE AniericoniI vin GE to G1TS at the eixt of 1989 incicaux! GEI'S' equity by $332 inillion, gel'S'" debt having inaturities inore than 90 days" Gash uwxl in eat h of the last thiec yean includnt:

included:

On niilhons) 1989 1988 1987 Un inilliono 1989 1988 1987 lntriest (paid)

Newl) inued debt GE

$ (793)

$ (610)

$ (577)

Shoit term (91365 days) $ 4,571

$ 5,916

$ 5,546 GLl'S

(%,876)

(4,030)

(3,301)

Icug-tenn senior 2.812 3,936 1,927

$(6,669)

$(4,670)

$(3,878) lxing tenu suluinhnawd 58 Pun ents-nonntourse, Inmur taxes (paid)utosetni leveraged lease debt 461 381 345 (federal, loteign, staw g 7,g74 gig,793

$ 7,g g g and kxal)

GE

$(1,163)

$(1,284)

$(l.096)

Repay nents and othet GLl'S (168) 251 403 reductions Shon tenn

$ (5,556) $ (6,220) $ (5,836)

$(1,331)

$(1,033)

$ (G93) long term semor (230)

(2,28l)

(526) long tenn sulundinated (7)

(6)

(20)

" Net change in certain broket-dealer accounts" Principal paynwnts -

ituludeth nontemutse, leveraged lease debt (253)

(261)

(263)

On enillione 19H9 1988 1987

$ (6.046)

$ (8,771)

$ (6,645)

MatLetable urutities of broker dealer

$(3,356)

$(1,009)

$1,826 Securities)nurhased under agreements to sesell (2,209)

(922) 72 Securities sold uivier agreenwnts to sepurchase 2,691 677 117 Securities sold but not 3rt pun hawd 2,002 681 (2,118)

$ (872)

$ (573)

$ (103) 63

O o

l 33 c=o Revenues On millions f or the yeati ciuksiIksender 31

'Iotal snenues Intersegnwnt revenues laternal revenues 1989 1988 1987 1989 1958 1987 1989 1968 1987 GE Acrosguue

$ 5,282 $ 5,343 $ 5.262 77 $ 166 $

78

$ 5,205 $ 5,177 $ 5,184 Airtraf t I:ngines 6,863 6,481 6,773 69 119 48 6,794 6,362 6,725 Bnnulcasting 3,392 3,638 3,241 1

3,391 3,638 3,241 lextustrial 7,059 7,001 6fi62 701 706 708 6,358 6,355 5,954 hiaior Appliarues 5,620 5,289 4,721 5,620 5,289 4,721 hlaterials 4,929 3,539 2,751 33 40 32 4,896 3,499 2,719 lbwer Systems 5,129 4,805 4,995 128 126 125 5,001 4,679 4,870 Tnhuical Pnxtucts a xt Services 4,545 4,431 3,670 191 161 337 4,351 4,270 3,333 Earnings of Gl:I S 927 788 552 927 788 552 AllOther 319 394 3,176 4

319 394 3,172 Gir}wirate ltems aint Eliminations (1,415)

(1,477)

(1,287)

(1,203) (1,318) (1,332)

(212)

(159) 45 TotalGE 42,650 40,292 40,516 42,650 40,292 40,516 GEFS l'inancing 7,333 5,827 3,507 7,333 5,827 3,507 Insurance 2,710 2,478 2,217 2,710 2,478 2,217 Snurities linolcr Dealer 2.897 2.316 2,491 2.897 2,316 2,491 Allother 5

34 10 5

34 10 Total gel'S 12,945 10,655 8.225 12,915 10,655 8,225 Eliminations (1,021)

(858)

(583)

(1,021)

(858)

(583)

Oinsolidated icvenues

$54,574

$50,089 $48,158

$54,574 $50,089 $48,158 Assets Proporty, plant and equipment (including equipment leased to others)

On millions)

At iktemler 31 f or the years etuted Decendier 31 Ik preciation,delyletion aiul Additions amortuauon 1989 1988 1987 1989 1988 1987 1989 1988 1987 GE Aenislune

$ 3,806 $ 3.838 $ 3,913

$ 173 $ 208 $ 178

$ 153 $ 170 $ 151 Airrrali Engines 5,341 5.164 5,066 341 234 242 273 251 242 Bnnulcasting 4,428 4,104 3.918 81 147 115 79 70 64 Industtial 4,016 3,729 4.411 354 301 274 248 249 315 hlajor Appliatues 2,825 2,284 1,529 149 215 118 112 105 93 hlaterials 8,023 7,130 3,901 722 757 378 319 252 202 lbwer Systems 2fot 2,531 3,266 138 127 118 136 138 162 Technical Pnulucts aiul Ser ices 2,772 3.183 3,873 219 203 235 154 168 170 investment in GEFS 6,069 4,819 3,980 All other 951 1,122 2,016 3

5 72 17 62 Coq > orate items atxt Eliminations 3.272 3,379 2,707 71 91 48 50 102 83 TotalGE 44,107 41,283 38,300 2,251 2,288 1,778 1,524 1,522 1,544 GEFS Financing 54,056 44,874 34,163 3,174 1,738 503 679 695 325 Insurance 9,663 8,025 6,577 17 26 3

8 6

4 Securities Broler Dealer 27.118 21,891 20,041 33 19 60 32 32 28 AllOther 91 155 625 33 14 13 13 11 12 TotalGEFS 90.928 74,945 61,406 3,257 1,797 579 732 744 369 Eliminations (6,691)

(5,363)

(4,292)

Consolidated lotals

$128,344 $ 1,10,865

$95.414

$5,508 $4,085 $2,357

$2,256 $2.266 $1,913 GI

o 4

Revemws iiulude iixume fium all souit es: i.e., for 0 Broadcasting consists primarily of the National GF,lxith kales of pnxhwts anxl serviu s to customers atxt linsulcasting Company (NilC), whic h is the cun ent leader "other iruume" ha GlTS, *canied iiuunw"as describalin in swtwo: L television. NilC's principal businesses air the ruite 1. In gerwnd, it is GE xilig to price sales inmi one funiishing within the United States of swtwuik television i

Grupany comixnwnt to armther as ricarly as practical to services to alliliatnl tclevision stations, the pnxluction of niuivalent namnwitial selling prices. Alu>ut one-sixth of live anal into dal televisioit prognitiis, aint tiie oleratioti, GEi consolidated revenues are fiurn agencies of the U.S.

uixlet Ikenses Isom the l'ederal Gimmunications Gim-

. goveriiiiriit, GEi Lirgest single custoiiies. hiost of these mission (1 CC), of seven VIII' television luuadcasting weie fin aciospace aint aintnitt engine pnuhirts si xt stationis. 'the NBC Television Netwoi L is otw of thtre servk es.

compe;ing major national comnwicial hnuulcast television Olwrating profit by iixhistry segnwnt is on page 35 retwo:Ls arxl senes nuar than 200 s egularly afliliatal sta-of this reixirt.

tions within the United States.'the television stations NitC A desciiption of each of Gerrnd Electiic Company aini owns aixi openues ar e locatul in Chicago, Clevelaixl, Den.

consolidatnl affiliates' iixtustry segments follows, ver, I ns Angeles, hliami, New % L arul Wasliisigtoti, D.C.

Bnxxicasting operations aic subject to FCC t egulation anxl GE station licensing. NilC is run ently expaixting its olwia-0 Amisfiarc pnxhwts arx1 servicts cruusiiluiss ekrtioto NA NY.4 b"*" d FTWENMMbb cable telemon.

ics, avionic systems, military vehicle ajui mwnt, automated l

test systems, computer sohwat e, armanwat systeins, inis, o Industrialencompasses Iactory automation puxtucts, site system (umlx nents, simulation systems, spacecraf t, nuitors, ekx trical ajuipnwnt foi irulustrial aint comnwrcial cominunication systems, nular, sonar aixl systems integra.

construction, GE Supply unnpany, transixirtation systems tion. hiost aerospace sales are to agencies of the U.S. gov.

arxlliglitiiig pixxiticts. Q:sto iiers ibi siiatiy of these pitxi-ernnwnt, piincipally the Departnwnt of Defense aint il e ucts ami services itu lude ekttr ical distributors, original National Actonauticsatx1 Space Administration.

"luipment manufactuicis atxt i xtustiial eixt users, annnwrcial, n."luunal, headng, ali onxhlnon.TIO* " N U"'

• • d " "9EdP a Aircraft Engines arul replacer'iciit parts ait niiaixifac-mg and auuw u

t ured atul sokt by GE (br use in comnwrcial azul inilitary aittraft,in naval ships aixl as i xtustrial lxiwer souires.

niotive ma Lets. hiotoi pnxtucts aie used jvitinn GE aixi GEi military engines are usal in a wide variety of aiirnd t "b".ait sokt externally. Electncal distnhuuon ami omtiul that inchuk s fighters,lxunbers, tankers arxl helicopteis.

njuilunent, for which Eurolwan operations were GEilarge CFhl56 aiul CF6 engines lxiwet all categories of expiuxled with a new joint venunr in 1989, is sohl f or conunercial aiirralt: shint/nuxlium, internustiate aiul

".iuaHation in cominertial, uxlustnal anxi : esulential fan,h,-

long-nmge. Applications lbr GE's CFh156 engine, pn, tws. Ipciory automathm pnxiucts(uve a hiuad range of ducal jointly by G E aint SNEChi A of Fnune, intlude:

cytncal towl cintnnnc pnxhirts, nu luding drive systems, Ikicinh 737 3(KV-400/ 50(heries: Airbus lixlustric's wah emphasis on inanufacuning tux! advatu al engincess A320, A321 anxi A340 series; ami military alirraft such as I".g auunnadon applications. GE Supply operates a nation-the KC-135, F/KE-3 aixi E-6.The CFh156-3-powered 737

• "I" '*I""' k "ICI"'"E"I 5".pply luiuws; Translxirtation has luxume the fastest selling aircraf t/engitr combination synents inuiude diesel-ekttnc aint ekttnc hxumotives, in nunmercial aviation history. GE's CF6 f amily of engines uansit inupuhion niuipnwnt, nuiuwized wlwels for olf.

Iowers intenixtliate amilong range aiirraft such as highway vehides, such as those used in mining operations, lhwingi 747 aixt 767 seties, Airbus itslustrici A300, tuxl drilling devices. Iaumotives aic sold pnncipally to A310 aml A330 se ies, amt hicikumell Douglas' DC-10 donunc tuxi foicign railroads, while mai Lets for other atul hlD-1 I series. GE aho pnxluces jet engines for execu.

P"' ducts indude u;ue aixt uitnin ujmsit authoiyues anxl tive aittraft and iegional commuter aiditws.

uxhistnal users, l.ighting pnxiucts mclude a wide variety of lamps - incandev ent, fluorescent. high intensity dis-charge, halogen anxl specialty - as well as wiring devices aixl quartz pnxtucts. hlar Lets ami custonwrs at e piinci-pally in the United States, although foreign mai kets are tranning increasingly imlxatant, hiaikets are extiennely varini, ranging from househohl consumers to comnwrcial and i xtustrial eml users aixl udgitial ajuipirient niiaritifac.

tureis. Umit the founh quarter of 1988, the lixhistdal seg.

nwnt also induded seminuxluctor opeintions that have sirx e Iwen sokl.

65 L

o'.,

1 a Afajor Appliances indudes Litchen arxllamxtry niuip-intense.1 hiring 1989, their weir tangible signs of ma Let L

nwnt such as refrigenitors, ranges, microwave ovens, imiumrment. GE managenwnt continues vigonius cf fons Iircicis, dishwashers,(kithes washers anxi drycis, atxt to irii[itute cost-coniilwtitiverwss aixt to adapt pnxtucts and nxun air anxtitiorwrs. These are sok! uixler GE, llot[xiint mar Leting to tlw changing envisunnwnt. Stearn tuibine-axl Monognun brarals arxt, incicasingly, uixler private generators air soki to the electric utility itxtustry, to the bnuxis for attailers. Distribution of appliaturs using the U.S. Navy atx1, for cogeiwiation, to private iixtustrial cus-RGA bnux!legan in 1989. GE microwave ovens atxt nxim tomers. Marine steam turbitws anxi propulsion geais also air coixlitioirrs are mainly wiurent inun foreign suppliers are soki to the U.S. Navy Gas turbirrs ate used principally as }xxLagni xiwer plants for electric utilities arxl foi-while investnwnt in Gunpan)-owixxl domestic facilities is 1

idusal on refrigenitors, dishwashers, ranges atul home industrial cogeneration aix! sicchaniati drive ap1>licatioris.

tamxtry nluipnwnt. Anjuisition of Ropet Gor [x> ration in Centrifugal compressors are sokl Ior application in gas 1988 achksi to GE's pnxtuctive capacity arxl bunnleixxl its reinjection, pipeline senices anxi pnxess applications such guuluct offeiings,inc huling gas nmges. A large portion of as refiix ties aixt arninorila plants. Although these have major appliaix e sales is to a variety of retail outlets with a been no nudear plant onters in the United States since the significant 1xation of sales of certain pnxlucts sudi as mid-1970s anxl liitenuitional activity has been s ci y low, GE laurxtry equipiiierit arxl ief rigenitors beitig for ieplace-contitiues to imrst nii tulvatical tediixilogy developriieiit nwnt of okler pnxtucts. The other principal marLet con-anxl to focus its resoun es on irfueling arul serving its sists of irsidential buikling contracion who install major installed boiling water reactors. Power delivery pnnlucts appliances in new dwellings. A nationwide senice irtwoil indude transfonners, irlays, ek ctric load management sys-supports GE's appliaix e business. Euiupean mai Let partic-tems, ixnver conversion systems aixt nwters, principally ipation was expaixint significantly in 1989 with the fonna-Ior electric utilities. Installation, engirwering anxi irpair tion of a newjoint venture.

senic es indtxte management aixt technical expertise for o Afaterials i xludes highqwrIbnnance engiircral large pnijects, such as power plants; maintenance,instec-plastics used in applications such as substitutes for metal tion, irpair aixi i ebuilding of electt ical ap;xt:2ittis piu-and glass in automobiles aint as hotisings Ior (umputea ducal by GE arx1 odier s; osi-site eiigineeritig aixl a xl other business njuipment: silianws; superabrasives upgnxling of already installed pnxlucts sokt by GE aiul suc h as inan-made diamonds; aixi lasiiinates. hla: Let otheis: and environinental systems for utilities.

opponunities for inany of these pnxlucts at e creatal by a TechnicalProducts and Screices consists of tnhuology functionalicplacenwnt that punides customers with an operations puniding pnxtucts, systems aint sen kes to a improved material at lower cost. These materials aic sold variety of customers. Ilusinesses in this segnwntindude to a diverse custoner base (mainly manufacturen)in the nwdical systems atxt senices, communications aint infor-Unitnl States aint abniad. Anguisition of the(hemicals mation senices, arxl certain other slwcialiint senices.

businesses of Horg-Warner Corporation at the end of hiedical systeins indude magnetic resonance (hlR) scars 1988's third quarter punidal GE with another pnxiuct -

ners, nunputed tomogmphy (CT) scanners, x my, nudear Alls resins, a fatnity of thennoplastic trsins usal by cus-imaging, ultrasourut, atxl other diagnostic equipment aixt tom molders atul nuijor original equipment manulacturers supporting senices soki to domestic atxt foreign hospitals fbr use in a variety of applications, induding fabrication of and medical facilities. Acquisitiom atwijoint ventures in automotive parts, telnummunications equipment, com-recent years have exparxled GE's medical systems activities puter endosuies, major appliance parts and pipe.The in world markets. GE Anwricom, a leading domestic satel-acquisition also added technical aiul manufacturing lite canier, operates seven domestic satellites providing dis-strength azul domestic and offshore mat Leting facilities tiihution senices for cable television, bnxulcast television arxl expenise that complement GE's other plastics busi.

arxl radio, atul voice, video arxl widetxiixl data se:Tices to nesses. hlaterials also includes 1. add Petroleum Corpom-agencies of the fedemt government. Cmumon canier serv-tion, an oil anxl natural gas developer and supplier with ices of Anwrkom are subject to regulation by the FCC. (As operations mainly in the Uniin! States.

of December 31,1989, GE Americom was transferred to e Ibwer Systems serves worklwide utility,industiial arul GE Capital. GE Americom's opemting results will be governnental custoners with pnxtucts for the generation, indudal in GEFS beginning in 1990.) Infonnation serv transmission arxl distribution of ek ctricity arxl with related ices are provided lxah to internal aixl extemal customers installation, engineering aixi repair seniles. GE has by GE Information Senices, GE Consulting Senices arxl irmained the leader in most power systems pnxtucts in the the GE Computer Senice opemtion. These indude face of a dedine in donestic anxl ihreign ma Lets for a number of rars. Wor ktwide competition continues to be 3

66

O

'6

(*nkialu ed O Hiil>litei diasn! ( ornInliIikcdti(ills serVu eA Mu Il NiiI'd liaIls kinesniIM aIx!((diiiiwIcka! siink tesukeliIka!Ica!

as data netwo:L seiyu es, ein tionu nx% aging aixi ein -

estate Imatuing. Auluisituin of Montgomen Wani wifs tioni( data inten( hamge, whit h ar e ofIcint to (onmwiual cinht oiwnitions in niul 1988 iundal io Gl. ( Jq>itali carn-anxiiixtustrial custoine $ thiough a woikiw ute twtwor L:

ing awets, panit ular h in cinlit und operatnins w hi( h apph(ation sof twaie p.u Lagev custom wstem design,tial (ontinue to esp.uul Gl Gapital also is an npun imestoi pn>gnenming seni(ex anxi nulepcixlent maintenatu e aixl in (crtain other sen n e aiul finatwial seni(es or ganiutuim tental' leasing services for miniuimputeis atxl nucitu oin-aint participates in les ciagni inm>uts. Although leasing puters, clern onic tesi mstnanents atul data uimmunica-has been a majoi f actor in Gl Capital's growth (nei the tions equipnwnt. A sepaiate servi (cs uimponent piovules seat s, Gl. Capital has actn ch (lumged its investment juirt-a vaiien of sir (iahnxi sen a es to gm enunent nistomeis.

toho to plau e gieatei emphasiuin asset ownership, man-In Dn embri 1989, Gl"s inobile uiminurin ationis busiirss agenient aigl opecatioti. Virtualh all puxltu'ts hnatunt was pleuniin ajoint sentuie with Irinvin of Sweden.

In Gi Capital air manuf actuint in uimp;mies other Thinenture aimhines GlCs nu.hile radio manutactunng ihan Giu anxldistribution strength in North Amerita with I iicwmi e Insuraner ainsists mainh of I R(. a inultiple-line Euiopean mat Let stiength anxi junition in digital (ellular pn,pern atxi caundn teinunct that wrnes alllines of sein-in hnology.

wirarue other than title aixi annuities. l.RC icinsures e Eamings of and Intestment in GUS aie sluiwn on a piopern aix!cauiala risks wrinen in note than E000 "oiw-hiw" hasis m (;l?s segment data but ar e elmiinated in donwsta aixI foicign iiistiiers anxl auginevits its f oicigii (onsoL atioit A separate dm uwuin of GI i 5 segments busiirss thniugh subsidiaries kx,ued in tlw United inng-appeat s below.

dorii a xt heiinia L. Ih was of other subsuliatics, ER(

e Allother foi peruxis priot to 1988(onsists nuisth of wiites pnipein aixl < auialn icimuraine through biolers loime c omumci ein nonin operatiom (piiiwipath vulco aiul piovides icinuirain e hiuket age setri(es. I RC also u

atul audui pn uhu ts. nu huhng utenaions eu qun ed liom wiiteu ertain siwt ialn lines ol insuram e on a divert bask, RCA in 1986) aixi iesults of miv ellaneouuithei au tivities pniu ipath euess woikers' uimirnsation foi self-insurers, ruilonger part of Gics hminess. ()ngoing operatuim ht ml aiul alknl tort s, ain t en ois aiul omissions uiverage Iot inainh imohe lu emmg me of GI kmmdum to otheix insurain e agents atul broker s it k li(emed in all states of the United States. the histnct of Columbia,(criain pnn-GEFS im es of G;mada aiul in othm jurisdic tions. ERC's bminess The businew of Gener al 1 lectri( l'inam ial 5cn it es. hu.

k genciath subject to icgulation in various insurance regulaton agnu ws ()ther insuram e activities of Gl i $

(gel'S)comists of the owneiship of thice athhates ihat, togethei with theit af hhates aiul other imesonents,(onsti-imlude GE Lapital afhhates that pr ovide hnancial guaran-tute Gencial Ein tri< ( nmpam's principal hnaix ial sen _

ice insuram e on win ted wrunties, pnvate inongage i(es activities. gel'S owns all of the oinunon sn a L of inun;uu e hic icinsunuw e and, Ior GILpital custonris, Gencial Ein n i( Lapital Coi;x u anon (GE(;C) ami of onlu hic and (ertain ivpes of propenwasualn insurain e.

Emplovets Reinsuiatu e (;or poration ti.RC) atul ow ns soq e Securitirs #roker Dralcr ieptesents Kiddei, Pealxxh, of Kiddn, Pealxxh Group Im. (the othet 209 is held in w hi< h is a majoi investment banking and su un ities hrm on on behall of (entain Kiddet, Pealu wh oda ers)

Pr incipal businesses in(lude securities undenvriting; sales l'on imimtn segnwnt luirlwnes, l'inatuing (oinists solch aixl trading of niuin aiul fixed ituome sn urities; hnancial of activities 01 GE Capital; Insuraiu e o msists pi un ipath of f utures activities adtnon scivi(es foi incigets, acquisi-artisities of ER(; but also inc ludeu enam insuram e enii-tions aixl othei ( oilx> rate f main e matters; men hant bank-ties owned in Gl. Capital; $n urines liiokei-Dealet u m-ing; iesean h seivi< es; aiul asset management. These sists entitch of Kiddet, Pealmwh's operations; amt All wn it es at e piovided in the l'nital States aiul abroad to

( nha k mainh gel S' uinioiate a(tisities not idennhable donwsti( awl 1oi cign business entities, gm ernments, gm -

with specifu imlustn segments.

ernnwnt agem ies, amt individual and inuimtional unes-Additional intonnation alwiut e.u h G1 l'S segmem tots. Kuldn is a memhei of the principi donwait f ollow(

sn m nics and uinunodines eu hanges and is a piiman e Financing activines of Gl. Capnal inc lude tinw sales, deale in lLS. govenunent scunities (:enain alhhates of Kulder, Pealuwh are sub n t to the ndes and regulations of i

irvoMug rinht and imenton huancing toi ictad nw,.

variom federal, state aixli xtustn iegulaton agen(ies that

( hants (majoi apphain es. televnion sets, lurninn e and otbei home f urnishings. and personal uimpuient aun,_

apph to sn un ities bioket-dealen, in(ludmg the lLS. sn u-ntws aixl I u hange (.onunissuin,1 LN. Conunuhn l'uun es mobile leasmg and automobile unenton lunun mg; home I t admg ( omnuwum. New Yoi L Snit k Ev hange, Nuional aint teucation hnaru ing iprinopath time sales and deale, Aw w ianon of Nn unnes healen and the (:hk ago Itoaid imenton f man. ing of mobde homest ninunen ial and of 'li ade.

iixlustnal loans aiul equipment s. des hnain mg punided thiough leases, time sales and loans, leasmg sen h es h n

=

67

W, g

h t

Note C 4 _; i I PR4 Inf0tTnetIOM (COneolidated)

I, Revenues tu mdikira) 1or ihr trars civicd Ikx cmlwi 31

}

l

'lotal e rvenuen Interseguwtn tosenues Esternalirvenues 1989 1988 1987 1989 1988 1987 1989 1988 1987 United States

$48,912 $46,364

$15,160

$ 1,107 $ 874 $ 801

$47,805 $45,490 $44,359

)

Other aicas of the workt 7,458 5.576 4,891 689 977 1,095 6,769 4.599 3,799 Intettumpany eliminatiom (1,796)

(1,851)

(1.896)

(1,796) (1,851) (1,896) l Total

$54.574

$50.n89 $48.158

$54,574 $50.089 $18.158 Operating profit Assets For the tears eiuktilkw emlet SI At thsemtwa 31 1989 1988 1987 1989 1988 1987 United States 5 6,070 $ 4.941 5 3,715

$117,109 $102,327 $89,480 Other ateasof the workt 974 1,009 725 11,346 8,611 6,027 Imciromp my eliminations (8)

(10) 10 (Ill)

(103)

(93)

Total

$ 7,n36 $ 5.910

$ 4,450

$128.344 $110,865 $95.414 U.S. n evenues inchule GE ex[xirts to external customers, Exlxnts to extenial customers by major ateas of the atul tuyalty aiul licesisisig inicoine froin foreigii souires.

woild air sliows: on Inige 37, Nove ]j htertyinforenetion(ueseusted)

I itat quanti

'wmiul quarier Third quartet I ourth qu,u tes I

(Ibilar amounts in milhons; ler shaic amounts in dollars) 1989 1988 1989 1988 1989 1988 1989 1988 l

l i

Consondated operations Net eatuings

$ 819 $ 725

$ 972 $ 835

$ 915 $ 815

$1,173 $1,011 Net catuings per share 0.91 0.80 1.08 0.93 1.04 0.90 1,30 1,19 I

I)ivide:uls derLued ier stiair 0.41 0.35 0.41 0.35 0.41 0.35 0.47 0.4 i I

t Gimmon stm L market pri(e f,

liigh 49 47 %

56 %

44%

59 %

44%

64 % 46%

Inw 43 %

40 44 %

38%

51 %

39 52 % 42%

Selected data g

GE i

Sales of pimiucts aml heixi< cs 8,868 7,975 10,188 9,245 9,616 9,306 12,347 12,298 Gmss piofit fium sales 2,392 1,978 2,989 2,365 2,499 2,349 3,407 3,270 l

gel'S

}

Revennes from operations 2,824 2.411 3,261 2,465 3,230 2,717 3,630 3,062

{

Operating profit 259 246 231 223 341 230 307 328 l'or GE, gross profit froin sales is sales of gotxis anxi Secoext, thiitl-arxl fourth-quarter 1988 net earnings senices less cost of go(xis anxi senices sokt. Thesc costs of included negative elTects ($23 million - 2 cents per shaie, sales accounted for a tclatively smaller proixntion of GE

$43 million - 5 cents per shair anxi $231 million - 26 operating costs in 1989 than in 1988, reik cting differences cents per share, respectively) of expenses aiul acciTials for between the perimis fium aajuisitions aixl dis;xisitions as abnormally high warranty costs for c ertain t efrigerator i

well as ongoing i efinements among broad cost classifica-compressors.

{

tions. For gel'S, operating profit is as presented on i

page 35 of this ic;x rt.

i ll r!

s 68

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L!

l'l; o m

d Corporate hafonnation Corporate Headquarters Form 10-K and Other Reports Gerwral Ekrtric Qimpany The financial infonnation in this trixnt, in the opinion of 3135 Easton Turnpike management, substantially confonns with or exceeds the Fairfiekt, Omn. 06431 infonnation requinxi in the "10-K Report" to be submitted (203)373-2211 to the Securities anxi Exchange Commission at the end of Marth. Cenain supplemental infonnation ic in that reixnt, X

1 Meeting of the General Ekrtric hgwever, anxi wpies without exhibits will be available.

wi umt charp, fnun@nimte Investor Conmuunca-

']

unnIiany will he hekt on Wechwsday, April 25, at the tions, Ge wral Electnc Company, Fairfield, Omn. 06431.

Warner.Fheatre m E..ne, Pa.

Copies of the General Ekrtric Pension Plan, the Sum-Shore Ownerinquiries mary Annual Repon for GE emplo)te lwnefit plans sub-When inquiring about share owner inatters, contact:

ject to the Employre Retitrment income Security Act of GE Securities Owrwiship Services, P.O. Ilox 12(XXi5, 1974, aixt other GE employee benefit plan documents arxl Stamfont, Omn. 0 mil 2, Telephone: (203) 326-4040.

infonnation are available by writing to On}mrate Investor Gunmunications and specifying the infonnation desistxt.

g pg Share owners who have one or inoir shares of GE stock FutanaaWnices has a wparate Annual Reimn, j

registerrd in their names air eligible to invest cash up to arxllxah a atxl GE Capital Qu]mration file Form 10-Is,

$10,0(X) per month andbr icinvest their dividends in the Rc[xins wah the Scrunnes atxt Exchange Gunnu,sson.

GE Dividervi Reinvestment arxl Sharc Putthase Plan.

Co[n,es of da n-[mns ruay tw obtauxxl fnnn: Gerwral Electnc F m, ana,al Services, Inc., P.O. Ilox 8300, Stamford, i

. For an authorization fonn aixt pmspectus, write to:

Omn. 00927.

Reinvestnwnt Plan Senices, P.O. Ilox 1200(i8, Stamf(nti, W Annual Relons of the General Electnc F,ourxlau,ons Qum.06912.

also may tw obtauwd by contacting their offices at 3135 Principal Trenefer Agent and Regletrar Easton Turnpike Fairfield, Onm. 06431.

To transfer securities, contact: 'the llank of New %n k, Productinformation Receive & Deliver Department, Church Street Stauon, I.. E""""II"" "b""!

,"**""*I P"*I""5 "'*I '#

ices, call The GE Answer Cetner* at (800) 626-200(1. 7 P.O. Ilox i1002, New YoiL N.Y.10249. Telephone:

For (800)524-4458, mfonnation almut GE teclun, cal, commercial arxl inulus-Stock Eschenge information trial pnxlucts atx1 sen ices, call the GE llusiness informa-in the United States. GE common stock is listed on the tion Center at (518) 438-6500. For infonnation almut the t

New Yoi k Sux k Exchange (its principal mai ket) a xt on varied financial pnxtucts atxt senices ofTertxt by GE Capi-the llosion Stoc k Exchange. GE nunmon stock also is tal Corporation, call (800) 243-2222.

listed on certain foirign exchanges, including The Stock Exchange, lanxion aixt the Tok>u Stock Exchange.

As of December 8,1989, there were about 515,0(K) share owness ofitsintl.

O 1990 Genetal Electric Onnpmy Printed in U.S.A.

Note: Unless otherwise irulicated by the cotitext, the terins *GE,"

" General Electric" arxl *Qnnpmy" are usext on the basis of con-solklatkm desciilux! on page 46. 6 I11II At $ t titiRIC, $, GE arxl RCA are registenti trademarks of General Electric Onnpany; A arxl NBC aie registered trademarks of National Broad-casting Company, Inc.; @ atxt " itulicate registenxl arxl unreg-istenst trade arxl senice marks.

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