ML20033G910

GE 1989 Annual Rept

ML20033G910
Person / Time
Site:	Vallecitos Nuclear Center, Vallecitos
Issue date:	12/31/1989
From:	Bossidy L, Hood E, Welch J GENERAL ELECTRIC CO.
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
NUDOCS 9004130028
Download: ML20033G910 (73)

Text

i GE NucIcar Energy cene w t m tw,;w y Veilentos buck s' (.ent"?

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hvase'itan CA 94bl6 March 14, 1990 U.S. Nuclear Regulatory Commission Washington, D.C.

20555 Attention:

Document Control Desk i

References:

1)

Docket 50-18 2)

Docket 50-70 3)

Docket 50-73 4)

Docket 50-183 Gentlement As is customary, copies of the General Electric Annual Report are forwarded to the Commission in order to provide updated General Electric corporate and financial information.

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

Sincerely, dV. [. f' G. E. Cunningham senior Licensing Engineer (415) 862-4330

/ca Enclosures

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Milestoneso the1980s 1990 1984 1b88

- Acquirni pirtions of Tlunn-l.hti

- Sold Utah International mining

- Exiunded plastics busincu by acquin nwdit al equipuwnt sales arnt sert k es ogerations io lillP of Australia.

ing 110:gMar ne6 chemicals businesses.

operation.

- fold housewares businen io Illac L &

- 0;wned new phenol slant in hit. Ver.

Det Ler.

- Ex;urutal appliances busirwss by non, f rut., to supply i astics business.

acquiring Roper Canluiration.

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- A< quired Emplovers Rem.

- Revenues e,u hed $26.8 billion; rwt Corpiration.

suraine

- A(quired hloutgonwry Ward Cardit Corporation.

earnings were $1.51 billion.

i

- Sold I.anu!v i.. manual Serra.es, a sn-1 1981

""I "'""Kd KC 'ubsidiary.

Mold seniicomiuctor business to llanis Coriuiration.

- Rneisal75% of U.S. Air Fone con-

- Exp,uuled ller gen o'i Zmun plastics

-Initiated,o, t senture m motors with lm plant in the Netherl,uuts.

nact for new fighter en ines in so.

called " Great Engine h it."

Robert llosch of West Gennany.

- A(quired air pollution control busi-neu from F.nvirotec h Corpiration.

1985

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

-Intnuluted CT 9800 scanner for

- Resisal managenwnt structure to tinw.

nw<hcaldiagtmstic imaging, climinate sntor level, creating a leaner, flatter, more marLet driven 1989 1982 busirwn structure.

- Establishedy..nnt ventures m upph..

-Opened The GE Answer Center *, an

-Shipped hrst Dash 8 computen ant es. (mwer gerwration arni electri-award winning 24 hour2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> toll-frec cus.

controlled locomotives.

caleqti nwrit with GECof the Unite ingdom.

tomer servic e answering center.

- Ci.hl International, the oint com.

- Dedic ated $ I30 million expansion of juny of GLarulSNECh A of Frame,

-llroadcasting record set by NllC with R&D Center in Schenectady, N.Y.

dehvered its 1,000th aircraft engine.

M consecutisc weeks as op rated TV rwtwork.

- Investal $300 million m.io automat.

1986 ing kuomotise business in Ene. Pa.

- A reed toacquire a majcurit interest

- Acquired RCA Corpiration,indud-it Tungsram Cmnpany ofI ungary.

-Sok,1centralair coruh..notung ing the Nationallinvadcasting buurwas-Conyuny.

- llegan $10 billion shar e repurthame program.

1943

- Acquhed H04 of Kidder.Pearxxty Gr oup Inc.

- Formed mobile commurdcationsy, u.rit

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

louisville,14, as fitst phase of $1 bil-

- Formed factory automationjoint sen.

lion investment in major appliances.

tm e with i ANUC 1.id. of Japan.

-Opened Living Environments con-c ept house for s!mwcasing the use of

-Intnuhuni Signa

• magnetic reso-

- Statue of 1.ilerty relighted by GE for plastics in the buikling and construc-nance for diagnostic imaging.

100th annisersary.

Lion marLets.

- Expuuled mortgage insuruine busi-

- 0;wird $325 million plastics manu.

- Awarded contract by ToL)o Electric wn by ac quiring AhllC Corporation.

facturing facility in llurLsille. Ala.

Ibwer Comp ny for world's largest combitwd-cyc e power plant.

4

- Cmnman sim L sph.t iwo for one.

qggy I

- Laundwd Work-Out eIfort in all GE

- Net earnings reached $2 billion for

- Aatuired CGR nwdical equipnwnt businesses to improve Company's first ume, buuncu innn Thomson S. A. of competitiveness for the 1990s.

Fran< e in cubange for omsunwr cla tronica husiness.

F

- Expatulnl financial u rvic es business by a<gmnng Navistar Imanaal Cor-pn ation Canada, Gelco Corlmration

1. citer to Share Ownen 2

and D&K Financial Corp.

Worldwide liusinen Profile 8

- Selected by NASA to puuhu e major floard of Dirniors 20 p>rtions o' its planned space station.

I htanagenwnt 22 Finamial Sa tion 25

~ C"""""" 5"" k 8P t t W"-I"b""c-li Corpn use inf ormation M

e GeneralElectric Company Results ofthe 1980s Geirral 1.in tric Cotupan) aiul consolidated ufbliates semines Pwshwe opwatine Masin Maket Value Atvraged Itl.9% annualpowth imp,uved to iIJ % ofsain n'entfrom )ith to 2nd

$4.36 11.3%

$58 billion 9.0%

$1.66 812 billion 1980 1989 lose Isos 1980 loss American coinpanies Dividends Por Shore TotalCost Productivity Average AnnualYield Awraged V.3 % annualgrowth blore than Inf ed Outperformedpeerpoups l

j 81.70 1.0%

22.2%

18.1%

I 17.5 %

17.3%

$0.74 1.6%

i 1980 1989 1980 81-1988 89

. E $&P 400 S Gt'.

h rates adjusted to exclude E

ses trulustrial Average ro with dividetui teinventnwnt assuned FinancialHighlights I

i Itrsent (Dollar announts in inillions; per share announta in dollars) 1989 1988 Increase Revenues

$54,574

$50,089 9%

Net earnings 3,939 3,386 16 Dividends declared 1,537 1,314 17 ltr share Net earnings 4.36 3.75 16 Dividends dedared 1.70 1.46 16 Earned on average share owners' equity 20.0 %

19.4 %

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lb Our Share Owners l

Nineteen eighty nine was another excellent year foi Genciul l'.Icctiic -

a inord > rat in a decade of ancieniting gwrlonnance We legin the

!!MKb with a profouixily transtornied Cannpany, atxt while we are cul.

tundly opixised to dwelling on the past, it is innix>nant to outlitw the degree of (hange we have ex[wiiencnl twcause in inan) ways it sug-gests the direction in w hich we are headnl in the iww decade aixt tryoixi.

GE entes(xl the 1980s with a strong balaix e sheet that gave us the financial stiength aixi flexibility to cilett drainatic change decisisely 3r coinjuissionately. Much of that change was ainxxl at cicating a business inix anxl a system of managing it that would allow us to grow inuch more rapidly than the world nunomies in which we openite.

We begin the 1990s with a Canupany vastly dillerent froin the one that existalin the early 1980s:

e in 1980,Iwo-thinis of GE's revenues came inun slow-gtuwth nin e manuf acturing aixl non-stnuegic businesses like natunil resources. Tcxlay, two-thirds of our revenues cones from high-giuwth technology and services.

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((p.4y in 1980,of our strategic e

y businesses, only Iwo were truly

,g li e,

y; global-GE PlasticsanxlGE Air-4h

.h craft Engines. We legin the t

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191Kh with a significant global presence in virtually all of our I

businesses. Our o}wrating Inulits Innn outside the United States l

hase gruwn 309 per year since 1987 azul, at $2,8 billion in 1989, amounted to 40% of the Cann-pany total. Our ex}xirts bel ed i

us increase our [xisitive contrihu-Chaerman of the lhard and Chuf f.xrrufsvr tion to the U.S. balance of trade to $4.8 billion in 1989, up fium $3.1 OgwerJohn / url<h.p rnght), n" billion in 1988 aix! $2. I billioni in 1987.

Chasrman of the ihmrdand f.xecutn r Offurr lou rrn<r A flourdi te rnsfr;;

We hegan the 1980s with a bureaucracy of as many as niine risan-E Fur Chairman of the lhed and inre utive agetiwnt laycis in some businesses. Tixtay, all out businesses have signil-O//urr I.duvard !! llood.) (le/n.

icandy reduced layeis, s(nne to as Iow as lour, aIKI riow we mmv' a lot lastei -inot yet with the speed of the best sinall coinpanies but with that goal always in our sights and doser es cry day.

Our pnxtuctivity growth in the early 1980s was representative of o

the United States-in the nuige of I-2'7e a year. We entes the 1990s appn> aching the 69 level.

Earnings grew f or 40 conse utive quarters in the 1980s. As the e

decade progr essed, this growth climled f rom high single digits to t on.

sistent double digits, and we Iinished the decade with a strong 1989-earnings of $3.9 billion, up 169 irom 1988, and 2.6 times the 1980 level. Operating margins are at historic highs; sevenues, at $54.6 bil-lion, at e double the 1980 level.

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I s The stoc L maiLet kx> Led favorably on these moves arxl changes l

anni the per formance they pnxtuc nl. In 1980, we had a total mar Let value of $12 billion, whic h ranLnt us 11th among Arnetican compa-nies. We lef t the decade ranked wroixi, widi a yeat-cix! inaiket value of

$58 billion, arni diat $40 billioit incicase durisig die 1980s was die largest of any annpany in the United States.

r In sum,it uns a great decadefor GE, We are pniud of what we did well HIKI sinaller foi solne oIdle dlitigs we didii t do so well. Not evet y riew anguisition workni, although $16 billion out of the $17 billion we sjwnt on acquisitions will add to 1990s earnings. Not every new pngluct was right - as the iefrigerator compressor failuie demonstratal. Aixt we discovered in mid dnade that we needed to upgrade substantially our systems for annplying with govenmwnt procurernent laws, e In 1980, ter had a totalanar.

And hnally, as txild aixt transfonnational as we think we have tren

-- as we acquiral, sold, restructurni atxt reorganimi-it is clear in Act solue of $12 billion, which huxisight that we coukt have been faster, bolder aixiless incr einevital.

We will be all of these in the yeans ahead.

ranked us lith among Amrri-llut befotr we take that kxik ahead, we would like to shar e a few thoughts about the type of enterprise your Company has become, can companics, We Ic[t the People sometimes grapple with what to call GE. An electrical equip-ment manufacturer? Sure. Ilut that description ignores two-thirds of decade ranked second, with a i

our camings.

Are we a conglomerate? No, not that there's anything wrong with year-end market t'alue ofS58 being a conglomerate. We simply aren't one. We're not a collection of statxt alone enterprises, and this label misses the very essence of what billion, and that $46 billion i

makes this Comp;my work so well.

We know what we are: un integrated, ditvrsyied company. And we'd increase during the 1980s like to explain what that means and, more imjx>rtant, why we think it lx>sitions us uniquely to take on the challenges of the 1990s.

uns the largest ofany com.

We entered the 1980s with a widely diverse set of businesses mxl major pnxluct lines-as many as 350- that we subjected to a strategic Pany in the United States.

test. Diversity, we felt, could only be a real strength if each business was number one or number two in its panicular market. For those that were not, we had a very specific prescription - they were to be fixed, I

sold or closed.

j in line with this simpic strategy, we soki businesse. that made up 25%

of our 1980 sales, including natural resources, consunwr electronics, i

housewares arxl scores of others that could not becone number one or number two. During the same pericxt, we investal $17 billion in acqui.

l sitions - NilC as a free-starxling business; the Aerospace business of L

ltCA added to GE Aerospace; llorg Warner Chemicals added to GE Plastics Employers Reinsurance, hlontgomery Ward Credit and Kid.

I der, Pealxxly as well as snarty others added to GE Financial Services; the l

French medical equipment company, CGlt, addal to GE hlniical Sys-tems; and, most recently, Tungsram of Ilungary added to GE Lighting

-just to name a few. We conunitted the research aixl development aix!

plant arid equipment investment necessary to keep our current busi-nesses in leading positions, and we undertook the initiatives to ensure that these businesses became global in their scope and reach.

We enter the 1990s with 13 businesses, each number one or number two in the global markets inntich they compete, each with strong 3

distributioni in twoi ks, ein h iii i xhistr ies inluit-irig criortiunis capital, in huology aint lititiiani iewnittrs for erit: y.

Ihat divenity, even when basal on strung irulividual busiirsses, eat h inaking significant nintiihutions,is suit in itsellenough 'li> inity inaxi-inire the stiength of our busiirsses, we had to achieve what we call

" integrated diversity."'lh get that, we h.ul io disinantle the inultiple layen of inanagenwnt that so snuxithl) ran the Qnnpany in a inore lunlictable era but that had, over tiriic, senni to gaible coniiinuriicatiori a xt hobble action. We irinovnt secton, gniups, span-biraken atxl inuch of the othei supentructure that we had once usal to nianage our diversit y. The role of stafT was turnni 1806, Inun < ha Ler, itajuisitor arxliitittiosity figtlic to lacilktiltor, !iellwI'iux! suplM) riel oI Nie Ike! -

our 13 businesses. 'lixlay, all 13 reixn1 directly to the three of us.

hulxirtant anninunications are oral. The passion of oui busiirss leaders is not dilutal by filters, brieless anni rewriters. We have put in place a inanagenwnt systern that integrates our diversity inoir siinply, allows us to alkicate irsounes niore elTectively than we ever believal lxissible aixi lets us inove f aster.

Obviously, the 1990s willle as f ull of unknowns arxl surprises as the 1980s were, but in our view, unir things are dead certain: The pace of change will be fastei. Globalization will be nunt pervasive. Onnpetition will intensif). The need f or continuous emplo)ve education at all levels will be even greater. Piotecting the envinnunent will luume a total commitment of even employee at GE.

In the 1980s, we built a management systern ideally suited to deal with these 1990s issues-a system that brings the leaders of our 13 busi-twsses together <piarterly over a two-day period, not ior a para le of sterile, jxilished busitwss reviews but to grapple together with conunon problems atxt share irisiglits arx1 iriitiarives that air valuable to all.

While our seemingly diverse businesses range inun a television net-work to huancial senices, inun plastics tojet engines, there is a unique coiintiori tiiivad -SlitJTrtl118ti!Klgf!!afHl}iYilclVf5 ~ that 1)5rKis Yieln together and creates what we callintegrated diversity. Allinust deal sornino at:Ar ct: nnrarrA and tulo/-

with the urgency of globalization, th real for cultural change, the ment Crnfer #n s<hentrid<h. K F., arr un*-

protection of the environtiient anxl the stulderi opportunities in Easterii sr c / to le I er i e I us r i I c.

mdhN/tKINFINg Strm, aNd ihr NdmH(rd 1.ightirig, which moved quickly into Ilungary, is sha al and leveraged clntrenne rintrun f ahm rJ nrrded for arro-iKToss all the businesses, ymr and usar, ct bu"ar""

When one leaves these dynainic sessions, it is im;x>ssible to le cotii-pla ent, impossible to be comfortable with the status quo. The rred lot laster, more aggressive, more global action comes alive aint is obvious to all.

the same dymunics occur every day at our Managenwnt Develop-ment Institute at Crotonville, N.Y., where 5,000 einployees a year, from every business in the unnpany, share the very best they have observed in areas like restonwr seni< e, environmental pr otectioti atxl coriipn ss-ing the pnxturt development cycle. All these issues angl coutitless otlier s are wrestled with by nwn and women eaget to hnd a better way of doing things - f nun anywher e - arul translate it into a more pn ghu-tive was back home.

l

'the cifnt of this ainstant sharing of coininon inanagenwnt issues is a seinfonenwnt in the inirxis of all of the :urd for sinrd, coritintious exlwrinentation anxl action.

We've seen, as we shal our bureaucracy aixl cicatul this integratnl diverse enterprise, the enonnous terwfits of sharing twst pnictin s, of helping cath other, of asking questions aux 1, alxive all, oflistening. In the 1980s, these practices terxini to concentnite in the upper levels of the CO:npaily, We air inow conutiitted to a dnade-long carnpaign to drive thein througlurus the cister prise, Our dreamfor the 1990s is a boundary-less Company, a Connpany wher e we knm L down the walls that sepanite us frorn och other on the inside af xI fi'oill our key constituencies on the outside.

The lxiuixtary-less Onnpany we envision will reinove the baniers a While our seemingly diarrse among engi xtring, manufacturing, marketing, sales arxl customer sen ice; it will recognir.e no distinctions hetween " domestic" arul "for-businesses rangefrom a tricial-eign" operations - we'll be as unnfortable doing busurss m Budapest anxi Seoul as we are in louisville atxt Scheirctady. A houixtary less sion network tofinancialserv-organization will ignore or erase group labels such as "managenwnt,"

" salaried" or " hourly," which get in the way of people working together, ices,from plastics rojet A lxiurxlaipless Gunpany will level its external walls as well, reaching i

out to Ley suppliers to male them part of a single pnicess in which they engines, there is a unique anxi wejoin hands aix! intellects in a conunon purix>se - satisfyirig customers.

common thread-shared

'this is an admittedly gnuxi vision, requiring unprecedented cultural change, arxl we are nowhere near achieving it. But we have an idea of management practices-that how to get there-an idea that is rapidly becoming r eality across the Qunixuiy, it's called Work Out, binds them together and crc-Work Out is afuld and adaptable concept, not a "pn>gnun." lt genendly ates what ur callintegrated starts as a series of regularly schedulal " town meetings" that bring together large cross sections of a business - people from manufactur.

diwrsity.

ing, engineering, customer senice, hourly, salaried, high anni lower lev.

els-people who in their nonnal routines war L within the lxixes on their organization charts and have few dealings with one another.

The initial purpose of these nwetings is simple-to remove the 1

more egiegious manifestations of bureaucracy: multiple approvals, tinin*cessary pa[x'nvoi k, excessive relx)rts, routines, rituals. Ideas atKl opinions are often, at first, voiced hesitantly by people who never before had a fonnn -other than the water cooler-to express thenti.

We have fousul that after a short time those ideas begin to come in a ton ent - especially when people see action taken on the ones already I

advanced.

With the desk largely cleared of bureaucratic impedimenits arxl dis-tnictions, the Work Out sessions then begin to focus on the more chal-lenging tasks: examining the inyriad puncesses that make up every business, identifying the crucial ones, discarding the rest, anxi then litul-ing a faster, simpler, better way of doing things Next, the teams raise the bar of excellence by testing their irnproved pnwesses against the very best fnnn aniurx1 the Q>rngxiiiy arx1 frotii the best coinparties arouixt the world.

5

We have plugressed well into the first stage of Work-Out in nxist of our businesses, arxl some ate leginning the transition into the secoixi

- or hest practices-phase; but we are uixier no illusions that this is.

anything less than a decade-long crustule. We have hantly scratclusi the surface of the enonnous mine of pnnluctivity atul inviovatiori that we know exists in the intelligence anxl imagination of our 300MX) employ.

ces, but we air excitnl be>uixt measure by what we air disa>vering.

'lle natural cynicism that acnnnpanies the annountenwnt of trw cor.

[x> rate campaigns atxl slogans has largely tren dissipatal as progicss and monwntum have begim to grow, Work out is woiking.

The haniwaie of this Company-its businesses mxl its managenent structure-is now largely the way we want it. Work Out is our decade-long vehicle foi the w/tuurr, Restnicturing is a nud, not a destination.

A company can lxxist pnxluctivity by restructuring, removing bureauc.

e our dreamfor the 1990s is a ng.y mxt downsizing, but it cannot smtain high pnxtuctivity ginwth boundary less Cornpany, a without cultural change, without totally involving the itxlividual who is closest to the work anxl therefore knows it better than those who " man-Cornpany where we knock age"it. The itxlividual is the fountainhead of creativity aixi inriovation, and we are struggling to get all our people to accept the countercultural down the walls that separate uuth that ohen the test way to manage [wople isjust to get out of their way. Only by releasing the energy anxl fire of our emplo>res can we usfrom each other on the achieve the decisive, continuous pnxluctivity advantages that will give us the frenlom to compete arxl win in any business anywhere on the R 0be-1 inside andfroun our key con-stituencies on the outside.

We end this decade with enormous confidence in the future of GE. last November, we annou:xed our intent to repurthase $ 10 billion worth -

of our stock over the next five yeant. This decision was made possible by our earnings atxt our debt capacity mxt by the significant cash flows generated by our business restructurings arxl pnxtuctivity growth dur-ing the 1980s.

The repurchase in no way impinges on investment in the Company.

R&D investment is the highest in our history, as are capital expeixli-tures. The businesses, even during the repurchase pericxt, will be given I

the resources to make nxxlest size complementary acquisitions, arxl should a very large anguisition op[x>rtunity surface, we have the flexi-bility to suspend the repurchase piugram anxi move decisively.

Our Company will tw inaking exciting business moves in the 1990s

- ventures, new pnxluct lines, acquisitions, alliances - but the most important campaign will be the daily one we wage to inspire arxl enlist our employees in the cause of shared excellence arxl winning.

In the 1980s, we changed the Company. We also challengal the bureaucracy and generally got the better ofit, in the 1990s, our task will be to challenge each other atx1, in doing so, to get the very best out of ourselves. The cool efficiency that inany have always associated with business leadership must give way to personal skills mxl traits like em[x)wering, listening, passion, energy arxl the capacity to transmit that energy to others.11eing "on top of things," controlling them, must give way to sharing, trusting. Most of the bureaucmcy that infects busi-j ness institutions - the reviews, layeti, routines and reports - stems

{

largely from a lack of trust. We have seen, with the demolition of the j

control superstructure we once imposed on our business, anxl we are beginning to see even more clearly as Work-Out starts to blossom, that 6

contiulling people doesn't nmtivate tlwm. It stifles them. We've fouixt that people t ri f oran heiter, even heroically, when they ur that what they do every day makes a difleience.

When they see that - when they ar e allowed to inale ital contrihu-tions to win - they quit Lly develop incicaxxlsel nmfulence. *lhat self.

f cunfidence in turn inomotes sim/4 city-of action.of design.of pnx-cu, of communication - t ecause there is no longer a psy( hic exul to wrap or wself iii tlic cotiiplexit y, tiiippings aixtjai gon that, iii a iniir;nic.

racy, signify sophistication anxl Status. Aixl that simplicity will nulically increase the sfred of our busiirsses anal their ability to react to a world whose pace of change will teroitw astornishing iii the iiltK)s. Spent, siinplicity anxl self-confideixe will be the o[wrative characteristics of the winning coinpanies of the lil!K)s aixt trynixl.

We unnt GE to become a company where people come to woik every day in a rush to try sonwthing they woke up thinking about the night lefoie. We want them to go home inun woil wanting to talk alxnit what they did that day, rather than trying to forget alxnit it. We want factories where the whistle blows aix! ever>uir woixiers where the time went, and sonw<ne suddenly woixlers aloud why we nent a whistle, We want a company wheie people fitxl a better way, every day, of doing things; aiul where by shaping their own woi k experience, they make their lives letter aiul your Gmnpany best.

Far fetched? Funy? Soft? Naive? Not a bit.This is the type oflibei.

ated,invohul, excited,lxnuxlary less culture that is piesent in success-ful start-up enterprises. It is unheard ofin an institution our size; but we want it, aixt we are deterinitxxl we will have it, h,

John E Welch,Jr.

Chairman of the lioard and Chief Executive Officer w

lawience A. Itossidy Vice Chairinan of the lloard atxt i

Exenative Of ficer i

Edward E. Ihxxt,Jr.

Vice Chairman of the lloard aiul Executive Officer t

i February 16, til!K)

I l

l 1

N*,I!ImlCid Scrvicc>s i

a 1hrough our capitalresouises GE FinancialServices had another outstanding year as earnings trac hnt $927 million in 1989, an incirase of I 8% over the parvious andjinancialrapertisr, we

>rar. It also inade significant thrusts in iww anxl existing inai kets aral hKitM41 sti'ongIy on nistolix*r se:Tice.

arr hcIping tofurt business GE Capital Gorix> ration, with 21 of the 23 GE Financial Se:Tites bminesses aixl $MI billion in assets, continuni to expaixl aixi innovate growth across inany lawrs of aggiessively in donestic markets. At the same tine, a number ol its comixnwnts establishni or exteixlnl sunessful olwrations abmad.

the U.S. reonoiny and.

In Eumpe, GE Capital usal the exlwrtise gaiixxl in the sale anxl recapitalization of U.S. companies to participate in the Euiupean merg-increasingly, ofthe global e rs mxl acquisitions ma Let. D uipnwnt leasing o[wrations also moved 1

ahead there with tnuisactions including tmilers for a leading trailer.

cronorny' rental company atxt machine tools for a major automotive comixnwnts manufactuier. GE Capital's real estate financing business inade irw investments totaling $200 million in the Unital Kingdom azul financed its first ollice buildings in Fnmcc.

The U.S. leader in thini-lxuty private-Ldwl ardit cartis, GE Capital se ves n tailers aixt manufactuiers in the de[xutment store, consunwr durable anxi siwcialty retailitig sectors. Duiiiig the >rar, it ticquiitti sig-lielowarrfer ofihr morr(Ann 300 iiilicant new ca ttlit cattl {xntfolios aixl intnxhKTTl a major attailera prhoft labrinedit rardprogvanifnaarrd alliliated Visa Cmtl pnigrain for Ariws Departnwnt Stores.

andstwierdby Gl.Tajntal.

GE Capitalalso is the nation > largest equipneent lessor Major invest-nwnts air in trucks aini cars, aiirraft, railcars, ocean shipping con-tairwis, temixirary buildings, annputers aixl iixlustrial equipurnt, in 1989, it ex1xuxled this leadership by inen asing the worldwide fleet of commercial anxi nit pomte alitraft it leases to inore thari 325 aircraft. Ovenill, the equipment leasing operations made healthy gainsin 1989, GE Capital also teanxxl up with seveml GE businesses to bring cost-effective financing to their customers atxt suppliers. Areas

,K.

f synergy indudal plastics, appliances, airemft engines, I kicomotives atxt medical systems.

in financial guarantee insurance, GE Capital com-

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',,w pleted its acquisition of FGIC Corporation. In mon-

$, W p,yw

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y E gW

- '[ h;,h f D W,

gage insurance, it usal its expertise tuxi market hk, Rg#hhDM%;,Mk F

.f leadership to expaixi innovative piugnuns for hone gQ ownership among the disadvantaged. One pmgram

,D Nd e1 helps to pmvide affordable housing fbr low m:d imxler-

^f h M /l h@$ %y q Y]'h$ki p ute-inconc linnilies across the nation.

p h

f" WU Despite a very difficult 3rar in the insuiance indussry,

, 4%"j$

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yQ h4 Emplo>ris Reinsumnce Cor]xnution improved earnings MM' ' '

,p

• ' over 1988's record level while experiencing a slight decline f

in net written premiums. This GEFS subsidiary also retained its ix>si-F tion as the nation's second largest, and the world's Iourth largest, prop-t :

erty aint casualty reinsure.

t Kidder, l'ealxxty completed a strategic review of its four major activi-

.i ties -investment banking, securities sales atxt (nuling, retail saks and gg / [p.- [

- fh asset manage nent - to better position itself for the 1990s. As a result,

[

j steps were taken to exit (vrtain opemtions, to upgnute staff in others, k.

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such as investment banking, aiul to streamline th( organization.

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1 NONlCS a We are creating innm atice GE Plasticsfinished out the decade with a series of developments that make ilus business, whit h inul ic(oid earnings in 1989, wcil p>sitiorux!

and neiting usey to replace ion tbc l990s.

I he f u si f ull vrai altri the su quisition of Iloig-\\Yai'in i (:heitin als, traditionalenaimah with GE 1989 saw the uutessiul integration of ihe tao inisinesses. As evideiu e of this sm < ess Gl. Plasta s aiuniuin(41 plans to im icase pnvluction of engineering plastics -- 3pr-Cu ol.u* iesm,110: g \\Vana : Chema als' main pnxtutt, aial inuodmed seseral ru w graules in the Cu ola( tesm hne. Pnxluction of Cuulos

• enalhigh performance poly-resin, w hu h bleixh 14 xan* piluadxinate with Cuol.u tesin, combin-mg the best pilvmen s of lxith businewes, aho was expaixled.

anm that con he recycled.

In otb i n>u s to inoew global i,enin s, GE Pimit > 9 in d a plaru

.u Ki 114 luik al (ciitei Iri S(nillt hov ed. f or'ilR41 a jok:11 verituit' In japini, aint (ontinu(xl expansion plans in Alab.una and Spain.

In a(khtion, Gli Superabrasnes fornux! ajoint vemure with Asahi l>iaiiioixl lixtust:3 Cei of Japan to develol> aixi sinai ket iixtustrial dia-motKls rii;Kle in a in'w valxu delxisitioit te(litiologs. Tliis te(hiiologs was iulvanuxiin the Compun's R&D Centes, the sarix lab wheie the workl's first high-piessm e diamoixh weie pnxlumiin the 1950s.

In traditionalmarActs, GE Plastics had a stiong yeai. It enjomi particular suu ewes in automotive, packaging, aiul building azul construction.

9 Despite some weakening in the autoinotive 47

'A4 titai kel, GE Plastics extelKled its indi ket penetra-tion by winning key onless Irom Cadillac for iront

+

e leixiers of Norvl GTX* resin for the 1989/1990 9.d[

g pg.

DeVille atxt Fleetw(xx1 models, f rom livmxlai ioi the Sonata buinper heain a xt f ascia, anxl f rosii f

7 Ilomia 10: the comp > site buiuper beams on the q

Au ord. The nuliator housing in the GM Con ette aho is made of GE pilvmers.

I In the pu Laging industry, GE Plastics intn>-

duced a new Iilm technology that allows crispet microwave uxsking 10: Iroten hxxb. In Euiope,it intneduced the Luiolxittle", a icusable lxittle for cadumated drinks. It is made of trxan* iesin arxl Gelon

• high-barrier nylon, a new inaterial.

The newI.mmglinemmments mn<rpt Amor in the building arxl cointiuctiori ritar kets GE enjoyed considerable in litta/seld, Alnu, showeenrs Ihr uvs n/ G' sides gunvth in 1989-. a veat highlighted by the debut of the 1.iving fits I s lnr the buddeng and t unstrut tann apphraiion u a engineering r v m ersin die buiiding and u,nsin xtion a

industries. Several pnKlucts ahcads are conunercialimi, including the house siding u>ated with Gelov* resin and a concrete aggiegate con-taining Valox" tesin. GE Plastics is working in partneiship with ruote than 50 ( ompaines to dnelop additional systems aiul < otiijx>inevits.

Yet another innovation came f rom GE Silicones, which deseloped a iK w lxdviiR i lot the hali care mar ket that allows shampx> aixt unuli-l tionci to be combined into one pngluct.

l Anodici kes dmelo:nnent was the growth of Polviinilaixi, a w holly I

ow ned subsidian invoh ed in the u nllection, t enew al and distribution of iccu lable plasta s as well as the distribution of unmnochts ami engi-neering poh ti ers. Polymedand aujuited a new manulacturing iacilin aiul two distributors and opciu d Iout tu w distribution kxationis.

l l

r T

AircmflEngines a Almost nury six seconds of GE Airrraft Engines had anonirnenues and earnings in l980, aix1 to sustain the ina Let leadenhip it has won in itsent )can,it continuni to nery day, a cornmercialair-invest twavily in irsearth aixl developiiriit pingi;usiii diit ctal at dw futuir. 'llese prognuns, running at $1.2 billion for 1989, pnx enini at craftpourred by GE rngines a rntati me to piuvide GE with the in huology advancenwnts that i

have nuitrilunni to its t erna: Lable sunrss in every inaiket it sen es, is taking ogor landing surnr*

'I1w comnwrcial engirw busiirss, for exainple, continuni to luvun in 1989. Firm oitlen for conuiririal engiiws wonh $7 billion were where in the ucrld, announn d during tlw year, including GE's share of onless placal with CFht International, ajoint company of GE aixl SNEChl A of Fnmcc.

Airlines such as Asiwncan aixi USAir, as well as the fas: growing leasing companies GPA Giuup 1.td. aixl International trase Finance Car}xwa-tion, annountnl large onien for GE CITw80C2 or CFhl56 engines in advance of specific aircraft selections.

Also during the >rar, the CFG 80C2 engine went into senice on the sww Ikwing 747 400 for I.5/

aislines such as 1.ufthansa, KLhl aixt hlalaysia aixi was installnl on the new hicDonirli Douglas blD 11 trijet. Its most successful ]n nlarssor, the CF450, tuhal the umjor initestoir of 50 million boun of opemtion, lange orders by Continental cm wrpuuruMciug:2 rngines aixl Air litter launchni the higher thnist CF6-80El engine being devel-pelo=%ndern utenedp ahnmi wair.

o[xxl for the new Airbus lixtustric A330 anxi other widelxxly ainraft.

tNs r',

.l^r' "'I 't I Small comnwrcial engine sales also did well, led by an order for 100 byallaukA Airknn and others in 1939 GE CT7 poweral Saab 340 regional aistraft placal by Asiwtican faigle.

In addition, Canadair announcal plans fin a new 50-passenger legionaljet to be equippal with CF34 engiiws.

The dn6pnsen ofadttmced commercialpouerplants for the future is a top priority GE recently announced plans fin the GEIK), a new gener-ation oflarge commercial engines : hat will have thrust lewis up to 95,000 lxmnds for powering bigger, twin engined widelxxt) jets. Woil also is continuing on the GF36, better known as the UDF* engine, to have it ready when airlitws rnluire it. Cun ent estimates are that +e piugram will not go into pnxluction before the late 1990s.

GE s strength in military markets was greatly enhanced as a result of significant developn ents tinvughout 1989. The big news was the U.S.

Navy's return of all F40 i fighter engine business to GE after four years of split pnxtuction with a com;wtitor. GEh F404 also was selectal by South Korea to power its new F/A 18 fighters.The U.S. Air Iince's annual buy of fighter engines resultal in alxmt 859f of the single-engine F 16 fighters being [xiwered by the increasal-perfonnance ver-3 sion of GE's Fi 10 engine, which also fIcw for the first tinw in an F-15 I

aircraft. The Ib2 lxnnber, Ix>wered by GE F118 engines, began flight-testing.The giuuixt test piugram of the F120, GE's candidate for the Air Force's Advimced Tactical Fighter, attained several nuijor mile-stones. The T407 turix> prop engine, to be c<wpnxluced by GE and several other companies, was selected by the U.S. Navy for its new P-7A patrol airemft. Aixt another major contract was signed with the Air i

Force for 182 more F108 engines to imwer KC-135R tankers.

hlarine anxliixtustrial engine sales also were on the upswing. Avia-

ion sen ice had outstaixling sales, t<x>, reflecting gicater cHiciency in l

cugine overhaul and comixn ent repair as well as increased numbers of GE-lxiwerni aircraft, i

10 l

NBC a lhe top-rated telnvwn net-The NationalBroa(Itasting Company captured a historit stnng of piinne time victorin to inaintain its sn ong leadeiship despite incicased wo, A for Int 3tronght vrara.

(ompeution loi the netwu L telni. ion audien(c. NitC, w hi(h had seve-nues of $bi bilhon, also u xil boki initiathes in cable aint odici ar eas.

Nitr br eng$ world reenti and Wmning its htth straight stat in prinw-time satings. NitC-TV tw(ame the hist netwuik m television histon to tank Iust in nrn week enterranung programs mio of da 'i2-wt cl bio.ulcast tcat that runs Septemta to Septemix i.

( Auchen(e ratings driennine how much bio.ulcasters can charge ads ei-mulwro of humr3 on a dmh tisessa NitC's weckh winning stical reached an unpinedentnl 68 weeks telote twing inten uptalin AllC's covetage of the Worki Series.

"The Cosin Show"(ompleted the regular season with its fourth (on-secutive numtwi-one ranking, aiul NinC ciulnl 1989 with six of the top t o prinw-time series NitC won 25 l'.mun Awants foi prinw-titir piu-gnons, fne foi news,12 foi siunts and nine loi daytime shows.

NllC Puxluctions had its busiest veat srt as NilC movnt towant mote in house piugram pnxiuction to connul costs azul incicase reveniues.

"Mancuso, I'll1" aint "llanthall" were ainong the in house puxluctions on the 1989-90 schedule.

d NilC S[ orts gainnt exclusive four9 tar artwoil hniadcast rights to the National llasketball c

f 4.;

Ass (xiation starting with the 1990-9 i season.

(le a

^

Signyicant steps urre taken in 1989 to achie e NitC's long-M.'

'gk g*,

nmge goal of luxuming engagni in multiple networks and the ownership wxi pnxtuction ot o.

I

~

prognuns seen worldwide on sat-l6 1

ellite, cable aixt over-the-air TV.

^

i

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)

CNilC, the Consunwi News f

~

anxl ilusiness Chamel, was launchalin Aprilas a 24 hout 4

cable networ k. Ih vear's eixl, xisc sulnemu suri,Isn+1tenerman <leto CNllC was pnxtucing 17 hours1.967593e-4 days <br />0.00472 hours <br />2.810847e-5 weeks <br />6.4685e-6 months <br /> a das of original plugranuning hn tout joinon Larwn eontmur to he favoran l*} ggfllfon guhscyflpgg, among late rugid nru er s

,y Ststerns !wcoming a l)ailines'in 11 ilatioilal a:Kl regional cable chan-nels,iin luding CNitC. In a major innovation, the uansaction includes plans foi extenshe, unintenuptalcoverage of the 1992 Sununes

()lvinpi< s through a unique pas-]x -view [>;u kage that will suppleinent NitC's own ()lvmpics (overage.

NllC's priman business, the NitC Television Network, senes inore than 200 alhliated stations in the United States. To betten meet t<xlav's (om} wtia ve toixlitions, NitC intn xtured a " pas -lot-perf orinaru e" ss s-tem f oi onnpensating af hiiates that has been well in eived. It also owns and operates se en TV stations - one each in Chicago, Cleveland,

)

lieinci, l.os Angeles, Miami, New Yoil and Washington, I).C.

In a signilu ant advaine for high-dehnition TV, NitC's New Yo:L station made the f nst (onnneinalInoadcast of Advan(ed Goinpatible

'lelevision t ACTh The ACTV system. whic h is twing develojaxiin a c omortium imolving NilC is compatible with existing TV sets 11

(

l Medical Systenu l

9 At the leading edge of modern GE Afedical Systems posted record ear > sings in l989 on u nhd sales pei-lonnatu es iii inagnetic tesonaiu e (h1R), unnputed tonungiaphy (CT),

enedicaltechnologs ur ron-x ias, equipment scivite azul fmancing. The wurkt le.ulci in diagiur. tic imaging, it alwnu hinni nmtiinux! suuess liom its global strategi of tinue to deerlop nne tech-serving the wo kl ma Let tiuuugh three regional oigani/ations.

In the European region, General Ela tric CGR is wellalong the way niquesfor looking inside the to su engthening its position in this Le) mat Let. It stuule a numhet of key pnxtuct intnxtuctions,iinluding the Stenovup 11'" mobile suigical human body to diagn<w and system ami the cump,ut Saturne'" lI lincai auclerato: loi nuhation otuology. Because of Gerw al Electiit CGR's expertise in x-nn inimol-trent du.rnar.

it will x ne m GE's ha foi qiplying du digiul, angiogiaphic o

t emotc< ontrol i adiographi( aixi lluoroscopic, ami manunographic x-ray systems that seite twu-thiids of the woihl x-rav maiLet. GE also acquiini GEC's nxxlical equipnwnt sales anxl servic e activities in the Uniini Kingdom in 1989.

in the Fai East, GE hiedical 55 stems-Asia continunt to stiengthen its mat Let position thinughout ihe region. GE's 75%ownnijaparwse joint venture Yokogawa hinlical Systems opened a new headquarters aixt manuf acturing f acihty near Tokyu. New CT pnulutts inn hulnl the Sytn '" NKK) atxt CT Pace'" Plus systems; the RT 68(H) coloi-Ilow ultra-jf souixt scatirwr also was univeiled.

.. ? '

hicanwhile,in the United States, GE hiedical Systems-Americas p-

"'[

remains the overall market leader. li has particular str ength in l

Advantx'" x-ray systems,inobile x-rav tmits anxi premium CT mxl h1R puxlucts, all desiguni for world inarkets. Its h1R in.egiri plant in South Carolina - the imiustry's lar gest - pnxtuces supenuixtucting mag-twts f or both the Signa

• aint NIR hiax'" systeins. From this solid niuip-ment base, GE is suaessf ully pursuing other opportunities. The innovative Ataxi-2(HK)'" financial p.u Lage, for example, pmvides 1

upgrade options, protection against downtinw ami mai Leting sup}mrt.

hiaba pnuluct intnuluctions included the advanced Signa Advantage'"

hlR system and the innovative CT liiEight Advantage'" system.

Dunng the year, GE positional itself to become a world leader in the emen ging area of positnm emission tomography (PET). It fornwd asi alliance with Scanditionix AB of Sweden uixler which GE acquired a i mund, nnr i,ukpendna(.unwk <an that firin's PET uariner-business. It also esiteral inito ajoiiit develop-dop/m both ("I nru/ Af /( tmarri umullunr-gnegit aggpegggeggt wjgh l {amagnaggn photonics of japan involving light moh. mukursg a rauer fur phvu uno lo curan g

(wr dungnmlu udormalwn Driven by egorts to controlhealth care costs, the worldwi:lc marLet f or diagnostic imaging equipment is < x;wcted to giuw inore slowly in (om-ing tear s. 'I o win in this constrairwd environment, GE is incicasing its emphaus on mat Let resp msiveness atul customes satisf action.

Sneral moves were implemented in 1989 to suppon this thrust. An Advan(ed Tn hnologs Division was neated to explo.e iww ar eas of in knologs aigl qu,,ntum advances in existing pnxtuct lines. U.S. pn ut.

I u(t enginceting was mmbined with matLeting to assure the ideal mau h of puxlutis and servi < es to customei needs. Sales and setrice organizations were scahgimd to bring senion management (loser to cus-tomets. In addition, the erw Insite system deocases apiipment I

downtune, minimizing patient inmmenicia e, awl a new ssstem intro-du(cd in Gencial Electric CGR will assist in managing service opera-tions,i inoie ihan W HH h linic al sites in Europe.

l 12

I l

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Lighting a fluilding on our legaes of GE Lightingfurther enhanced its leadership in the U.S. inan ket while addressing its (onunitinent to huikt wuild inaiLet share in autuiring a bringing light into the uurld, nuqurity intriest in Tungsram Cannpany of flungar) in carh 19m GI puu hasnt 509 plus(.nc shaic of Tungsram, one of i1ungary's ue arr constantly improcing largest unnpanies with 12 manuf acturing plants aint apinoximately

$300 milhon in annual sales, of w hit h 859 comes liom exports. GE will the egicienn,, quality and use hine managenu nt u sixinsihikt) for the senture arxl an option m Inn-(hase an additional 20% of Iungsnun.

of our lighting products.

The $ 1 '>0 million transaction - one of the las gest [xist-wai invest.

ments in llungar) hy a U.S. comp;my - allows GE aint Turigsiqui to met ge their European distributioii aiul sales ope:2itions significalitly or engthening GE 1.ighting's [misition in Europe. Tungsram will inanu-

-actuir aint sell pnxtucts ranging lium household Luups aiul etwrgy-s; wing fluorcuent pnxtucts to high-tet hnologs discharge lainps in sup-lxirt of GE l.ighting's global strategy.

Also in supixnt of that strategt GE's rnently lonixxljoint venture with Toshiha of Japan will puxhuc fluorevent lamps in Ohio for the U.S.

anal Asia-Parilu mat Lets. The two unnpanies aho 4

will unilwrate in market developnwnt prognuns ainuxl at the giuwing Asia Pacihr region.

On the technologyfront, GE's irvolutionary f or-ward dix han ge lighting gives automotive design-ers more f reedom to create exciting, sleek f runt-cixl designs for tomonuw's cars. The new lighting also piuvides long lif e, durability anxl white light for inotorists. Cannmitments for the lighting pnxi-urts have alieady been received for systems to be i

includal on automobiles in the mid-1990s.

Another in huological breakthrough resulted w

cunen, ct u,n.nya,o,n n I,gia,ng incimir in the 3ntnxtuction of new Italogen-1R" Ikxxilights anxi spotlights. An derA art-du,su,rge automotwe Armitampi.

egjgsive (;E inf rared icilective U nating innide the lainps captus es dissi-1,',

4 u$til<

,,",Q patal energy aix converts it into visible, useful light. In effect, the new rr I lampo<usuam briou9 that turn unuies

("I""'loMY luovides the Ught of a 150-watt incaixiescent light b-uses

,n/rurrd entro IN(p (THp, H'h,lr l,gbl ollb bb Waits o! e!nIIicktv.

~

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Other i989 highlights included the reopening of GE's world renowned 1.ighting Institute in Gleveland, Ohio, af ter an extensive renovation that str engthened its 70-year icputation as the industry's premier train-l

' g,q ing (enter. Eau h year, more than 5,000 customers arul business associ-ates f roni arouixi the glote participate iii institute progntins that Q,,,

l demonstiate GE's expertise in lighting design and application.

G E 1.ighting, w hic h oflers mot e than 6,000 diff erent lighting pnxi.

g

~

J u( ts f or the consuiin i, it ulusti-ial aixi (orninercial markets, also posted

,.(1 ;L: -

signihcant pnxitictivitv iiiilitovetin rits again with the hel > of initiovii-l

. g' f

tise ideas Innu people thioughout the business. Its IMPACT prognun,

.J-Ion exainple, invobed 900 employees who submittal suggestions resulting m $12. l million in savings.

13

hiduMrialand Power SyMems 1

a A globalupsurge in the need GE Industrialand Ibwer Systems enjoyd a successfulyar while stiengthening itself to nwet the dual diallenges of expaixting global for electric power generation oplxirtunities anxl intensifaxl ghibal competition that lie ahead in the !!MK)s.

and rewwrd conterra about Incicasing demaixl foi power generation equijnnent aint systems is leadmg the was los this business, which acceived 19mlordens worth the cin irunment are iner ras-

$6 billion. These included a $750 million uitle f sum the Tokyu Electric lbwer Cannpany for the wo:Id's largest combiinxi-cycle lxiwei plant; a ing the demandfor our inno-

$1'>0 inillion ordei for 16 gas turbines from I) uke Ibwei C4>mpany alxl a $60 inillion onle f rom Viiginia Electric lbwei Cannpany for gas miive technologies turbine generaton. Revenues f oi GE lixlustrial aixl Ibwei Sy sterits sui-passed $5 billion during the year.

Robust ginwth in the worldwide demaixt for [x>wei generation sys-tems aix! equijnnent is forecast thiuughout the !!Mios. Moie than half ol tilat giuwth is ex[wcted to le iii gas itirbiries, wheie GE Power Gesi-eration is the nxugnized world leadei. Already w ell positioned with business associates woildwide and co-pnxtuction capability in Japan.

Taiwan aixl lixlia, this GE business stiengtheird its global position Gl inpphrda H'Nif PHNgr p/rgNJpmrNt/pr guygwt gn gg g rcag{gngagaggccggcgggjg{g{cigjpgyppgggp i

air the t i /= leu I of Clweeni GEC of the Ultited Kingdom anxi Alsthom of France to fonn igilemi that remoiv marr than VV 7 9% of thr the Eur olwari Gas Ttirbine Cannpany (EGT). The EGT alliance will

//g uih nNd parr 90% u/ thr inl/wr dunwir pluvide G[ with long-yggght-altei access to the European C4mununity fruen tumhutison greciisr/orr t'mnisent arr gg g, retraird through thu 7ilb-lnot ahimNr)

GEk technology leadership is gaining added importance as custonw requiieinents benune more diverse anxi competition increases. GE lbwer Delivery, Ior example, oilers new solid-state electrunic meters I

alKl ainorphous inetal distributioni trinnsfoi~iix*i)- inviovatiolls that impnne a utility's efficiency. New itulustrial drives arxl contiuls from GE Drive Systems utilire advanced diagnostics to impiute uptime in papei and steel mills. And GE Nudcat Energy's new high-energy fuel n xi design, GE l 1, has already gained orders from several utilities around the world.

Another area receieing specialemphasis is environmental systems. GE is well xisitioinxl to t es[x>rul to the mounting global conc ern over the i

envitutunent with adsanced te(hnology that deans power plant emis-sions. The Gompany is cun ently installing a wet flue gas desulfuriza-tion system in Taiwan that not only will reduce sulfut dioxide emissions by 90(X but will also, as a by-pnxtuct, pnxtuce high-purity gypsum for Taiwan's building industry, therebt nxtucing gypsum imports by 45(Ji.

With a huge global man Let for parts and serv ce existing in [xiwei generation, enhancing customer servic e across all pnxtuct lines is another inajor objective for the linN)s. GE is warking dosely with sev-eral utilities to help them define, implement and nwasure improved plant periorinaiue. Inng tenu maintenance contracts, where ices are tied to plant availability, also are icing offenxi by GE to help customers keep their systems operating etlicienth and econoinically.

l l

I4

1 Appliances a We are tradm in prvendine GE Appliances accelerated eforts during the year to lx>sition itself f oi

}

the 1990s as a strong cumpetitor in lxith doinestic aiul wurkt mar Lets, consurnm with the latr3t hnishing the veai with icvenues of $5.6 billion.

As part of a wide-anging agiecinent uith GLG ol the l'nited King-styles and/ratures in major doin. (;E Appliarues enicied into its first Eutupean alhan(e-the initial step in aggiessively seekingjoint sentuies arxl creative alliastres appliancesfor the homr.

on a glotal basis. Ahead) the US nuu Let leanici in in;0o apphain es, it hasjumlxxl to a nuinhei iwu ixisition wor ktwide thiougli dw (;E-Gid :

joint ienture fornuxl in mid-1989.

Alw with a locus on the f utuie, GE Appliaiu es contiinux! itu ost imprm enwnt ellorts. A major step was the announuxi plan to consoli-date electric range pinduction into two lar ge plants, closing tuu othen.

In a(khtion, progress was made towant iesolving problems dis (ovcial during 1988 in certain actrigerator compressois.

On the donwstic liunt, the 1989 intnxtuttion of RCA nuijoi appliances piuvided ictailen with a iww, distinctivel sn kxl f ull pn vluct line bearing 3

one of Ainerica's anost trusted bnuxi names.

lanuxlux!in ieslxmse to high deale inteiest, the bnux! also is hekt in high esteem by consunwrs i

g-i who see it as innovative aixt lonvard-thinking.

~

The RGA line includes 69 difleient nuxich covei-ing cat h imgor pnxiuct categot y. Its styling is con-ss temixirary, f eaturing a high-t(th, ekttronic hxik.

. !b? y a

ll To serve the appliance market more broadly, GE

%;Lehg'9t yd F

=i

g embar ked on a new brarxl distribution strategy.

1 M With consunwi buying patterns making the nation-g g M al chains anxi"sujwrstores" a growing segment, GE Oi Appliances has moved to increase its exposure in a

those channels. All of its authorimi retall dealers YE aie now given the opportunity to have two os ci i nrw "wAur,,n wAur"l,=< alupptwu r, nmre of GE's strong appliance brarxl names - GE, Hoticint, a Fruirs a w/t. wpAutuairalluvA R(3 a:Kl hIoilogGinn - ori theki floo: L The GE bnuxi saw a major intnKluction in 1989 - a new ' White on white" line of appliaiu es that piuvides honx owir s a "desigiu i' look

'i wahout mam of the costs associated with r,inore expensive buih-in l

e M

kitchen. All nuxlels in the line ar e w hite with white conuul panels and ggi subtle gras graphics. hiost haixties anxl other parts, which traditionally weie (hiome, woodgrain o a darker neutral color, ate white um.

--*i$d The Hottoint litw of appliances, known f or reliability aint durability.

g has been enhanux! with the intuxluction of its hist solid disk range and r

f ull-leatut ed electronic dishwasher.

The h1onogram brand, the first in the industn to ollet a complete hne of appliaiues designed ion the high-end segnwnt (ontinued its expansion with the addition of lout new ooktops. Three veats okt in 1989, the Ntonogram line enjoys a double-digit mar Let share in the high ciul seginein of the itulustn.

Innovation carries beyondproduct lines at GE Appliances, l\\enefits sut h as The GE Answei Genter* servi (e, a state ol-the-art toll lice customes assistain e numbei (800-626-2000), anxl GE Gonsumer Servi (e, a na-tionwide f acion seni(e tx'twork,(outinue to set the industn staixlaid.

15

/\\('lThlKKl' s We are drirloping the GE Acrapace took aggressite acti<m to inaintain leadership in its diver-sified pnxluct lines arxl cotitititaxi to wiri iww business iii dw inicreas-adeanced terhrmlogica ingh (uni [rtitive defeme inaiLet. Onlets for the yeai nose 89 to

$6 billion, including a signilnant incr ease liom inteniational custoiners.

tryuiredfor the nploration in n sixinse to expected d"cliirs in U.S. def ense pnicutenwnt levels anxi intensilying global coin lwtition, GE Aenislxu e initiaux! steps to and use ofspace as urliasfor ieduce costs, enharue ethciency aixi pnxtuttivitynxl xisitioni die busi-i ness loi coin [wtitive advantage in the 1990s. Chief among those actions the defreur of nations, was the ntabushiiriit of the Aenislxue Operations 1)ivision, w hi(h is resixuisibi toi allinanuf acturing, pun basing atxl sourcing.

e s

[g -.g" ' :

aral quality coiitial thioughout the busiriess. In tuhlition,

. 'e d i 3

nuijor elforts to incicase engineering pn xtuctivity weie initi-

..h

~l ~ g*$

5 ated during the trar.

GE Acioslxue also ex[xuxled its business base in 1989 by Q'

g winning severallinportant coin [wtitions. The new pn>-

y Q,.

. %g,p ; ; grams include the U.S. Anny's Tactical Coitisiiaint atxl Uniu

~L tiol System (ATCCS), the U.S. Air Force's twxt generation of

['#f g. ' 20 Navstar glolxd lxisitioning satellites and flight controls for W, p '

the C-17 transpon aircraf t.

Onlers from international custonwrs anxl te( hnology licensing to foreign panness announted to nearly $1 billion, more than double that of the veat before. Major contracts f rom overseas weie received foi conununications satellites, surveillance nulan and flight simulators.

f, g,7

[i ((.

[I [,

GE's divesse line of pnignuns ranges f rom satellites aux! radar air it to wie,a$< nnuumentgo, awfung u, def ense systems to undersea combat systems anxi sonars. Products also owne taver uns aimmpArru wndamen isn'hule inilitary data systems, visual simulationi systeins, aisnainent sys-I tems, transmissions anxi tu Tet stabilization systetus for tnnLed vehicles, fire control anxi guidance sys-tems, automated test systems, aircralt electronics atxt communications systems.

t Nighlightsfor the yeae included the conunissioning I

anxi entry into the fleet of four U.S. Navy cruisers equip [wd with the GE-develoiwd Aegis fleet air defense system. Three mor e weie christened. In addition, the first of the Navy's new Aegis destn>y-l ers, the ArIrigh 11urke, was christeixxl. More than 20 l

Aegis systems also were in various stages of pnxtu(-

tion during the year.

j@4 in space exploration, a GE-built heat shield is p

j traveling thiough the solar system on the Galileo

)

prole to prou ct that spacecraf t when it enters the atmospheie of the planetJupitet. Also in 1989, pni-gnun activity was ex[xtixled ovi NASA's slxu e sta-tion project in whk h GE has responsibility foi design aiul development of the polar plationn and attached pavkuul acconumulatiom and Ior engnwering of the servicing facility systein.

Pnxtuction continutxl on I)SCS 111, the third geiwration of delense (onununkation satellites foi the U.S. Air Fune. In-othit perfonnaine l

of !)SCS satellites lauen hed to date has been outstaixling.

GE Aerospace also was selected by AT&T to build thice satelhtes that will icplac e its current Telstars.1)ual-luunt Telstar l satellites will be built urulet a $250 million mntract and latuu hed in the niid-1990s.

l l

in

l Communications and Services a We help customers take admn.

GE Commamications and Services had incrwesed revenues in 1989. 'lhe six openiting components of this busitess use annputers, satellites anxl tage of the infi>rmation age.

other advanced technologies to help businesses, governnents aixi itxti-viduals take advantage of the infonnation age.

GE Infonnation Senices supplies trtwork based senices that inte-grate n>mputers, software atx1 cointnunications systeins to a variety of itxtustries, including worldwide financial, retail, erwrgy aixi trans}x>rta-tion busiirsses, its Global 1.imits System", for example, pmvides the financial community with tinwly data on cash exposure to optimire trading oplentmities.

GE American Communications, which provides satellite communica-tions senices, again led the donwstic satellite inxlustry with the highest satellite utilization rate. Construction began in 1989 on four new state-of the art satellites, two of which were presok! to the cable TV industry.

GE Mobile Communications forned ajoint venture with Ericsson of Sweden. Thejoint venture, owixxl 60% by Ericsson and 40% by GE, will pnxtuce mobile radio systems aixt cellular telephones for the inter.

national market arxl will sen e the U.S. arxl Canadian markets for cellu.

lar telephone systems.

In addition, GE Government Senices maintained its position as a A new eramaaion exchange syurm carried leading supplier of technical, scientific mxl management senices for er crinformation servim'wrldwid' federal, state atxt foreign govenmients. GE Consulting Senices pro-

'A' ' "" I' r$1,N" airs"capIa' J

A vides consulting arxl software senices to many Fonune 500 companies, t

pran snmtment Anmes to redure lAr r6A arxl GE Computer Semce ofTers senice, rental, leasmg atx1 repair of giradsug Eurobonds irrirlephant, computers arxl other equipinent.

Electrical Distrilmtion and Control n Our technoh>gy puts electric.

GE ElectricalDistribution and Controlcontinued to make significant advances in cost competitiveness arxl strategic alliances by intnxiucing ity to work mfely and rgiciently.

world leadership products and forging new global partnerships.

An inxlustry leader in pnxlucts that protect arxl control electrical power arxl equipment, this business introduced its rrw, integrated Spectra Series

• line of panelboards, switchboards, busway arxl Spectra RMS" circuit breakers in 1989. The nxxlular design of these new pnxlucts substantially improves lxith senice capability and pnxluctiv-ity. Senice improvements also were achieved thmugh the consolidation of customer senice, the opening of a centralized warehouse arxl the strategic placemem of equipment centers arouix! the United States.

Internationally, ajoint business interest was established with GEC of the United Kingdom. Urxler the 50/50 joint venture, GE's Italian-l based affiliate (COGEMEC) was combined with GEC's llelgian-based Vynckier NV arxl French based Unclec to create a Eumpean business that manufactures arxl markets distribution anxi control equipment for the European market.

GE Electrical Distribution arxl Control also has res[xmsibility for GE's interests in the GE Fanuc Automation Corporationjoint venture 7Aric Sprara lutS = induariatrircuit in North America anxl Europe. During 1989, this factory automation breakers are part of #At new Sprara Series "

venture with FANUC 1.td. ofJapan continued to achieve significant.

/ [na$((fa $s gnawth in pnxluctivity and market share. it also intrcxluced a totally l

new line of programmable controllers, the Senes 90" family, arxl J

improved its own pnxtuctivity by redesigning its factory aixi installing an automated, state-of-the art printed wiring board assembly syster ;,

i 17

i Motors 1

m our viertnc moton run nery.

GE Motors achiered record sales perfonnance in I 989 despite incurawd competition in the global inai ketpkx e.

thingfrom treadmith to steel mdh.

Rec ent strategic nun es to iminute GE's comiwtitiverwss ituluded the irstructuring of donwstic manulacturing plants a Ki the global (unsoli-dation of all irxtustrial motor busirwsses, hiotor inanuf acturing in Kotea contimwd to expaixl with pnxtuction incicases injoint ventuits with Ilyuixtai ar,d 1)aewoo. lii anidition, llG Autornotive hiotors, dw swwjoint venture with Robert Bosch of West Germany, twgan luucha-tion of electric motor 5 in the United States foi a variets of automotive applications. The venture is now shipping blower and engine cooling fan motors for Foni in the United States as well as exixirting ixm er witxiow inotors for-Ilh!W in Euivie.

The (umpetitiveness of this business is being further enhained by reductions in total cycle tinw arxl by resixmsiverrss to customers. Foi example, customen now have direct access to GE hioton' data on Autowouloperato, tina ceriluck of tar ci-inveinorv, ortlers and technicalinformation via the hiotortink" elec-Mutun plant en Ouendwo. Ai. s hirb th' tumi( innerface.

',',",,'""""'ll,""'"""*""**"'""'

Ineicased energnunservation en>grann anumg cusuinwn also cre ned a suung demamt for Energy $ aver

• motors in>m GE. These motors are leaders in the industry with their high eficiency.

Transportation Systems a We provide the horsepou er GE Transportation Systems continued its success in the U.S. man Let by

\\

winning about 60% of all new kicomotive orders placed during 1989.

[

to pullpassengers, /rricht One significant development is a new " partnership" with the Santa Fe Railway that giveo GE maintenance responsibility for the entire andorr.

Santa Fe fleet of GE hicomothes. GE also received an order for 60 k>comotives f rom Santa Fe.

GE t emained the leading competitor in electric drives for large mining truc ks. Orders were placed for 229 of f-highway truc ks,120 tons and over, that will enter service on six continents.

The Company also manufactured its first AC propulsion system tar santa tr itaduvn o tynnaingpom an for rapid transit, which will be placed into service with Niettu North.

)

muerne pany,.tn.she.mde",em,,

in transit propulsion systems, AC motors are expected to replace 1)C agrremrnt rath Gl.

In the years aheiKl. GE's leading share in the U.S. market has been based upon DC technology, so the hietro North demonstration is an important part of the plan to maintain market position.

F in another important 1989 move, GE acquired the locomotive business of Ilombardier in hiontical, Canada. The acquisition will allow GE Transportation Systems to bruaden its participation in the Canadian market by using the hiontreal plant to support produc-

'pk tion of Dash 8 locomotives Ior Canada and Super 7s. The lattei are rebuilt GE locomotives that provide reliable,lowei horse-b power for railroad applications not iequiring the perform.

ance of the Dash 8s. GE also received an order irom U -

Canada's llc Rail foi 22 of the Dash 8 locomotives.

i; 1

18

l l

l ltllmlull0!!Gl 8 Through erratuve alliarwes GE made sigrnficarst pnngress in its globatiration eff ons during a was guinctuated b) international events that are tearing down the barrict s undjoint ivnturrs, we or e to u tnw global tsunontv.

In I usogw, w here 1992 kunus on a luisiron stxidenh wide utiin buildsng uf, our worldwide iniliticalt hanges in the communist bkx,1989 was maiLest by a number of innovathe shate to-gain alliaixes berwliting lxith GL aixt its part-conyectativeness as the har-twn. The vrai twgan with the signing of a inuitibusiness relationship with GEC of the United Kingdotii aini closed widi die atituiuructiierit ncn to a trur globalcronorn) og og s acquisition of a maj<witv inter est in Tungsram Compain, a llungarian inanuf acturer of lighting pnnlucts.

contuna to crmnble.

The alliames with GEC in appliancer electrical equi nnent aml i

xiwei generation, which weie completed in 1989, stiengthen GEi position in Luto[w while vielding itthnological tenefits aixt ;xiditional maiLet opixirtunities to GEC. The Cennpam also acquirext GEC's ned-ical equijunent sales aint senice activities in the United Kingdom. The Tungsnim acquisition, whic h was finalind in earh 1990, t egnesents oir of the lat gest post war business investments in that country in a U.S. compariy aixt sigriificaritiv incicases iiia

Let opixntunities f or Tungsnun aixi GE Lighting.

In acklition, the Ericsson-GE hiobile Conununicationsjoint wntuie, created in 1989, combines U.S. tuxl Eurojwan stiength in pnxtuct developnwnt into a global technologs leader in the mobile conununica-tions aixi cellular telephone mar Lets.

GL also continued to make important inroads in Asia, where it has had long-staixting relationships with downs of key partiwn.

In hxtia, for example, GE further stiengthened its }xnition in the growing Indian economy by extending its alliaine with tilIEL to include the iull nmge of gas turbines and b) announcing ajoint ven-tut e in medical systems with Wipro.

The lightingjoint ventur e with Toshiba of Japan is anothei example.

7ungnam light bath, the lunuhr /tner us During 1989,it started construction on a pnxtuction Iacilitv in Ohio to j

fludaprit, flungar). u herr the rom /unahsm pt oyide G[ a:Ki Toshiba custo iiers with high qualitv fluorescent lamps.

l c/ (,13 f.uropron lighting busparu and that e tavnin \\ lungsram (.umfunn havr ireturd a b' M'ri as, a riew It'ee trade agieeillent telweeni die Cilited I

t< ant venture in 14ghting that u> llnpand 44, States aix! Callada is opening up business opportualities oii both s. les a

perirnu n/ both r omptpurs in Ihr / uropran of die bonlet. GE enjoyed continued growth in Canada, especialh in mat Art (giaticial segyj(eg, gigotors agg[ plastics. GE Cariada had s ecoid capital expeixtituses iii 1989 liicituted were the expatisioti of its aincnitt engine parts plant in Quebec; the launch of the new Perfonnance Plus clothes dryei by Camco. GE Canada's appliance subsidiary; and the start of construction on a new f acility m Ontario to com[xnukt silicotics.

Aho during the year, GE acquired all of the common stock of GE Can-ada that it did not aheads own, or alxiut 8% of the issued shares, foi appr oximatelv $ 120 million 6n Canadian dollars).

3 GE aho lwnelited inun the r evitalization of hiexico's economy as onnen in hiexico showed strong growth. In addition. joint venture manutacturing im estments these in plas ics and appliances, totaling ahnost $ 100 million, were lar gel) completed foi 1990 start-up.

As the 1990s unfold, incicasing globalization and the economic liberali-

/ation of new mar kets piomise to open new f rontiers to GlCs interna-tional growth. And GL with its suengthened business dewlopment atul < ountn managernent ot gani/ation,is well plac ed to participate in the developinent of these world mar kets.

19

l$0(lT(l(bf l]hT('(lOD Asof Deuruan u unm.

I hilas % Gathcart, a Ihrit tor f rom 1972 to 1957, was tittled Ihr Afa44gement Dtw/o/n=rnt and Compranalmn Comnnt.

to the Ikiard on Irbruan 11. IRRi af ter sening two stars tre. w hu h mc ludn onh thursors trorn outsult GI., held as Chainnan of the lhiard of Kidder, Pratuch Group, Irg.,

10 rnectmgs in mkhmen to approving c hango in Gl">

a GI I maruial heni(n tutnuhan management, n ieurwed th( Gornpanis esenipt salan

!!urmg 19MI, the thru tors brLi 10 tegulai rnectmg>

structore and esnuto e cornpensation progsams.

j and panuipaint on the followmg cornmitten that aid the The Nummarmg Cruunatter, w hu h held three meetmgs, thod m ns dutin curwn! Inoard < atuhdain and inomrrended the com.

d l

The Ander ( omuntr#,, w hu h on hadn onh Ihrecto $ hom rnittee structore and membership for the ensuing year.

outside (.I., held four rnecungs it coeued the acinion The O/carmm Comnutter met sis tirnes,incluchngpint and independesu e of (.I 1 mdepende ni auchtori and the-snsums with the Audit, Fmaru c, ar.d 'In hnologs and h(i-acuuun of the ( 4 mpun's micinal audit staff as well as the ence Gommitten it reviewed the Companis operating

( 4.mparni fmanual cporung pnKos. mternal hnannal rnuhr, and plans as well as the actintin of Gl Anuali mnuoh and winpham e wah l,n 61 pihon. unludmg 1 ngmn and GI l' manual hen un.

those relaicd to the defense px.,urement pnnus It also The Publa hp<nwhdetua Comuntin, at its two meetings, renruni th< un nunent portfobo of GI Fmancial henico rencu ni the actenun of the General l.in tric l oundations The / manne Comuurse, met four ornn It esanuned Gl?>

and n aluatal enuronmental issun that could affcct G1.

fmaruial pouuon, penuon f undmg and tnat oper.auons, The 7nhrmlogi and annur Comnntrer held three meet.

forngn unentinents, hnanong commitments with the an, mgs, alljoint snuons with the Operations Committet. Its kne mdm.tn and othei matters intohung lat gewalt utih.

acuutin included iniews of Gl. Plastics, GI Medical Su.

sanon of Gompun funds tems and Gl. Gas 'I urbinn.

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Comm6ttwee of the Somed i

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Ru hand 1 haLee.Chapinan Des 2:; -- : 2 and Hrsin 1. Hillinan. Chapman Selence Committee 14 weenie 1. f ourakes Compeneetlen Lawresue A hieudi.

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Publ6e Roepenelbil6tlee Mhn h Luituan Henn H Henin, Comm6ttee Gertrude 6 Mu he'b Charin D Duin. ):

lu.n Henn H Henin.jt. C.hairman Hentt H Henin.]

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Henry L. Hillman Edward E. Hood, Jr.

Devid C. Jones f ellow, John i Kennnh Retned Chairman of :he Chaarman of the hoard Yue Chairman of the Retned U.h Air lotte k hcud iif (un erninent.

Ikiard. Chief truutne and Dantor.The Hillman Ikerd. Irec uth e Offner General and former Chan.

Hanard Unnerun.

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Chairman of the boatd.

Rented Chair man of Chief IAen nt Offuer Dunn A truuhrt. lam Chief IAn utn1 Offu rt the Ik atd and intmer and Does tot. Lhampion fnm.14a Angeln Lahl and Duccion. beneral Dan tor. Luu orp and Cm-Inter nanonal Lorgun a-Dantor urue il*6 1.lutru ( ompans.

hank, N.A Nom Yor L, tion,papre and fornt f unheid Conn Dnectos N Y Intumt unct 1962 irmhuis. Statnford. Lonn snu e 1980

,,, uni, utic, nu il

b (lllugl'ill('lll As of Schruari len.11*n Corpotete E,eeewtive Soedet Corpotete ON ones Corporate Steff ON6eere j

ON6 core Jo.hn F. We,te.h, Jr.

Jomoe J. Cootone c su s, ear e... h..a,d a,so c

Yu e nr.e*,i, a,sa (..sePi, sine, Chwl i nn uine (lllurt y,

Lewtonee A.Seee6dy Chairenan asul hrsulent.

Vue broubrni n'ai t reamurn.

Vue Chairsuan of the Ito.etd sent I sci uuse of furi w

(.owrmli nn un inicainwn Lin p.nanon Edweed E. Mood, Je.

Vue channian of the n. od Joseph Nonetoe analI sn unie (iftu er j

Yu e Psetuleni und Ih piut

(.r.or,an aisi...e.i l

Jeme. n..we,i Vue brudeni Aree A ? r

(

Desienne D, Deenmermen Jeok O.Po6 Met vue beautent. Pubiu Rolanons Arnau Yue henutent.

honour Vue hrnedent.

I luiania i see unie hinnagenu ni Ph446p A.Leeevere Yue benedeni meat hrnuit (4nmart.1.nigatuen aval tz gal helu i 4.

Toteen llR. Lettend dl>

Vue beautent. Audu hiatt

' S ge,t g

.ty j

B y P.0$eetiede Vue brenntni. buium u

• ( -:

Drie Lipnwni arul hanrung I

g Phillipe S. Potet s u r ne..ede,it (.ose,u,u s.,

Relatum.

Arther V. Pueeini Vue brudent.1.mploire Poul W. Von Orden Frank P. Doyle tillettet L. Robb Rel.u on.

I su uini Vue bewirni senio, Vue Piriidrini.

sensui Vue henidesit.

Relanoni Romeasi h anal Drirlopnu nt John lit. Samuelo Vue henident and %rnini Counsel 'las hdug aiul Planrung yr

r W66heen J. Sheeren

~*

vue brudeni. I ngurenng.

hvuhuihm and sunivang 4'w [

Edward J. Skike Vue brudrui. Inloimanon 4

'i n huok.p

.A l

Son)emin W. Heinemen, Jt.

l Arneur Vue he udent (.erwral (4mumel aint %cc retari l

I l

1 l

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n 1

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l

1 1

Operating Management a.o,,.u,,u,,. u,n,<,,

nos, ew r*..

ri..

me i e,

um.u,

,b r

4 :.

.g

?,

4

,g t:

,y t

3 Sory C.Wondt Glen M. H6aet John M.Treni De6on M. Row, hnuteni iul t :hu t t ipo.,ung srnun vue hnuteni (.I t% uni so uie Vue hisunreit.

% simir Voir riennlian.

oltu re (.riu1al 4.In n u

(.i Mntu al hinie nn Lt Aintah inguas i mani ial % on i i t,,

N6pelD.T. Andrews hnultni aiut (.hirl i sn uine

\\u' h ""lC"I 08 '"l""'"*

Sebby J. Bowen Theodote R. Soohm

%" h"no"gg "t

\\ " C h "",h a',15",'""*'

lo 4ch d'" "I t Htu ri (.nua.it iin nu RekN H. Sw r n hno hannnip,utt y i l

(.agnial (.ui p n.n eon

\\ us hnuk ni luianu Durton J. Rlostee. Jr.

James G. Del Moure Beton Br6melow P'"Ik O'***".i ro.iu,.

V'",d uo, "le nt ( '"' " """ "'

h"

\\ '" h"klont %'n 6"

% n oi \\ so hnuteni i.nua.a um n..uk in (

n, ui,m,ri a,,a sn,n.u,

s,,,,,,,,

vu.hn, ann u md ou'ms Co arios L Co edwesi C uriesa Okooky sni..., u. i e,nnim n,n,.i.i ad*** R Ra*'

vu. nnui~ nuni n known n Itru h.>.nu1o V,,6ncense Mwom

\\ we hnulun sann gr.oin, n

, ann.,,d o,,a i m,u,u Wimem w. Weetendorf n,n,,. o (.n u..,i i in,,, u. x u,e Re,o,

,e,,,e, u" h " i"" M ""'- "" mu s

v o nn.d-unii.n.no.d sni,ev ua nn,a-Iuhun' Joseph G. W6rth Cher60e P. P e

V " ' I' "" k "' 3 " '"'"6"r i h nidon iut i m unu Edward C. Sever 6e M6chael A. Carpenter oni.o (.i uniu.i s,sini,-

w e n nah..i s.unu i m ui... s,e n n,a_ t.l

,.e,,,o,t.. Re,,,,,,,e,,,

l carnai nn, don.i.a o.,i i

,,, n,am n (. i n.,,m,

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• • • vea C Riodei Deaals R. ueo.

\\ "' P'""I".iigitu a avid s"e r, s.

Edward J. Russell

\\ " ' h ""I"" M *' 'C"" E

" Md'""

' "I I hist r ial 1 Dennie J. Carey

\\..a h nedoni Robrt L SWkl,tg

.iYoaUt u[,,

'W"'*'"d"'"

Vu e hnsinn *, ann W. George KreH

(

(.i bapii.il Joseph M. Sekoch, Jr.

\\ " ' h ""i"" h "d "' """

Curie.v she.h.o l,'l,"",','"".','R','"l1 ', ';l "'u'"

7,*3,Lyek*ias

,,e

,,E u,,F N nior \\ ia t iniann l

Nanonal sa6n kuld<v L Donald $6mpeen Robert G. Stiber l

h ab.<h

\\ io hnuinn M nulaauong Vut hnidon sin.dl Aiin.di W. James McNorney, Jr.

Uwe S. Waecher I"E""'

I m inni \\ w e rirsuliiii

\\ ne he sidein Maitrtiiig O

Rohrt C. Turribull

(.6 (.apnal and endua M.m.igone ni yy, pn.udon Manan

'"K""'

Devid D. Ekedahl senior \\ eu hnuteni William J. Vareschl kruolo i mano.d sn ui n Ughtirng y,a pn.udent iinano

""dI"'"""d"""*""'

Den 6e J. Neyden

/

I m unu \\ u a hnutent

' r,.

(.I Lapnal i f,*. < -

,'- g M

John C. Deterding d;,%,

e M,

Robert C. Wr6pht sonen \\ia h nwirm

' 'a in p.#

houdent aml(.hief I m utne

(.oinnu n ul Ikal l uan y ' t ',

- f;; Y 'i

( Hfu rt Neuoru.l ltn ado. sung iman mg fV.

,, !.g (aunpain leu a

M6eheel G. Fitt

' _j;, y Albert F. Bortset t h.nrin.in hnutem mul t lurl

(

I m unu vue h nutnn I m uint t Hlu e r Iinpimtes D6ck Ebereol kennut.ma (.or por anon bnutent s p..n.

John D. Ople

.,im.I h,,ie,,,

M6ch.ael G. Gertner sm., um r.ni r, n,

,n s,,

Will6em S. Frego Albert D. Jerome s in hnutem world uk p, n,3, n g, in n,,,,

Mar Leim, aint hml"

stanoin Managtnu,n Robert P. Mongene P6erson G,. Mepos p, nnin,,. gn n,,n sg m,,,

\\ u e hnutent h atu uon Edward L Scanlon Stephen Rabinowlta i m unu \\ ea Prn,dnit

\\ u t bru&ni. I n hnolog,

,,n g

,y, gg,g g,,,,

g George F. Verse Brendon R. Tertikoff h oudem.oul t Jurt I m unu pn.ugin i,n,., u,n,,,,

( Hlu rt (.I. I ungu em L.ighung aid riahu tunn d

o 2

I Opemting Management nannt,nn-u 6ndustr6el and A.;: :; ::-:-

Electr6eal D6stehrt6en Cenede/Leten Arner6ce Power Systems and Costeel i

WlH6em R.C. D6undou l

r Chansnan aint Charf i seg uine i

g u

Of tuet (.1 Lanada

. b

}

[

T#

I; Robert T.E. GN6eople

,jg N4 I sn uuse Vue henuk nt

..., jf E MY 4

(L J. R6eherd Steneo6for Yue breu!rnt.(I %upph Jo6en A. L6tgubert John D. R6ttenhouse Sery L Repers

%rnun Yue honuloni,

%rnun Yue hrsulent,

%rnan YuerWaulna.

(.1 laulusuial aunt hours

(.I Ae1ompa< r (el l in tru al Datrebutu.n Ladd Petrolourn j

M eirna asul busivol

%g g, DevW C. Genever.Wothng Yue hr.ulent. th*nu %uuni Robert P. C6Hene br*Kirni amt Clari i sn utne Vu e briulent. (.I h.urt hetulent atul Chirf l.sn utne Of ta rt. l. add h truiruth J**88 E E*00*'

Oilu e 1. l.1 lantu Auiornanon Gn p n atuen

(.orrranon

\\ ur honuloni. Artospa's North Anerna leu GoreW R. Cote In hnologi

\\ u s brudent Luunnu r %erus e DevW M. Engelmen Jack A. Frohb6* tor vu, hr.uinn. wir.

Aetoepece Techno6ogy WlH6em G. 06ner6th Vue honuttni (unsannu ni I

Vue hrsutent. %Ia Lrinig anit linnone %urnn Themes E. Cooper hinhu i Managtnu ni Yue he suloni Arrospaie Arthut L Glenn ll40 tors i n huologi Reesell L leell. Jr.

Vu e hosule ni hinonunn anon.

Vu e houdeni. home i aiul %nairgu %sionn Stesilien,1. O'Br6en

(.oru eanon ( hu eanons Vu c hvsulent. (.i Motori I

Lawrence R. Greenwood Envirorgmental Programs Eupone J. Neverik

\\ ue heucient Ausnspue Reger D. Merey Vu e brudrnt. t.1 h urr Vut henutent, %les W. Roper Strolow th Incri asul t.onnoi Reymond P. Kurlek Var hrsulent. l.n.nonnental Vue brudent. Acrosp.n e h ogiann JeolTensor tyrrauons

\\ u s brudrni (.I inne Trenoportation Systems

%urnn J9hn M. l.ev6n Vue hrsulent.a ran % urun M6eheel D. Lockhart Liconoing/Trad6ng Delbert L Williemeen vue hr wirnt.

Vue heudent (.I Indnu,. nut Mich**l A. Smtth

(,1 lian r.ri.uu.n Mitenn Stuart A. F6eher t ning s,ic.

Vu e brudent Anooit brudent aiul Chri I An unie lin uonh*

Oltu re. t.1 and R( A 4.urnung Bertram Wolfe Managen,ni < 9, nan,,n i,,

Vu e houdoni ( t N u. le,,

Robert W. bkon 6ntemational ainic.l traaing coing,,in g.,,, g,

\\ ne I trudoni. linaru s and Inforinatuni l n hnok.gi

~

h4erketing and Sales Appliances Communicat6ons and

- - - -3" 3

C6yde D.Keeton l

l Services Yue houdent. Ma,Lonny aiul win l

n ili Albert J. Febbo

(

• y b-3 Vur brudent. Autornoine l

lintuuri Markenng aimi %les

(

y 1 ~ f Henry J. Singer

m. i Y

f.

i Yue houdent. Area Managonrni i

and smir, I

' e/

Poole Fresco

= '

%cruor Vue houdent.

l

(.I Internatumal

. us Alberte F. Corrvtl Roper W. Schipke vu e heudeni i mano

%rtnot Vue hcudent.

E#98*8 F. MurphV arul inunness %upp eri

(.I Apphatu ri

%e nun \\ ur hrsuleni.

(.I 0 rnuiur a anoin arul Alistelt C. Stewart R6eherd L Surke se.r s u e o Vue Presulent Muldle l ast.

Vr t hrudrut. 'In hnohigi.

Af ru m. %outh Ana. t % % R Arew hiuhui t h ugn aint 64ellene S. Runtegh M anuhu iur nig brudent (.I infonnanon Themso W. Tucker

%rr va ri vu e brudeni Au.i Panh:

truce A.Endere Are a

\\ u e hrsuloni, wu ndu uk Mar Lenng arul hochu i klariagerin rii Jeffrey R. Immelt Vu e hcudoni (.I Unnunce i

%cri n e 1

Lawrence R. Johneten Vu c hrsuk ni %In aiul t hu nhunon y4

FinancialSection Sunnnary Data

< *,..i unui, c..n,i..,.,,a n.,~,iai. tai.n i.i...

(Doll.:.nuiuna in snillinia; p, ai.ie anu.una in doneo 1989 1988 1987 Revenues

$54,574

$50,089

$48,158 Net earnings 3,939 3,386 2,915 Dividerals d(xlatext 1,537 1.314 1,209 lir shair Net earnings 4.36 3.75 3.20 Divideixts declaird 1.70 1.46 1.32 %

Eanxxlon average shate owneraxjuity 20.0%

19.4 %

18.5%

liitent inescase f roin prior 3rar Revenues 9%

4%

15%

Net earnings 16 16 17 Divideixts dec tat <xl 17 9

12 Net earnings per share 16 17 17 Divideixls declarett per shair 16 10 12

}

l Contents i

in ';it Audhors' Report 45 l

i Audited financialstatements l'antings 26 financial Ibsition 28 Cash flows 30 Notes to Consolidated l'inancial Statements 46 Management's discussion of

{

Ojxrations Overview 32 Irulustry Seginents 34

(

international 37 l'inancial Resoun es anxi 1.iquidity 38 Selected l'inancial Data 42 l'inancial Res;xinsibility 44 I

1 Statement ofEandngs General 1;kttric Cornpany arxl convilictated affiliates h,t ihr w ars cruled notetia.cf si tin Inilin,ns) 1989 1988 1987 Revenues Sales of gtunts

$31,314

$28,953

$29,937 Sales of seniu a 9,673 9,840 9,370 Other incone (note 3) 690 675 655 I;arnings of GlTS GLi'S revenues f torn ogwrations (note 4)

It,897 10.621

, 8,196 i

Total evenues 54,574 50,0N9 48,158 Coots and empenses(note $)

Gat of gtxxh wiki 22,827 21,155 22,359 Gat of services wikt 6,873 7.676 7,290 Interest atut other finaruial t harges (note 7) 6,591 4,817 3,912 Insuntnce [xilicy hokler knsn arul terwhts 1,614 1.501 1,560 l

Provision ior kases on finaucing ineivables (note 8) 527 434 290 Other custs atut ex)enses 10,355 9,724 8,406 Unusual exienses, including provisions for husirwss restructurings (note 9) 1,118 Minority inter est in ret earnings (kas) of consolidatal affiliates 84, 61 (4)

Totalcusts and exlwnses 48,871 45.368 44,931 Eemings before income temos, outraordinary item and cumulative effoot of cocounting ohenges 5,703 4.721 3,227 Provision for incorne taxes (note 10)

(1,764)

(1,335)

(1,108)

Eemings before outreordinary item and sumulative effoot of sooounting chenpos 3,939 3.386 2,119 Extraordinaryitern (note 25)

(62)

Qunulative effect toJanuary 1.1987 of accounting < hanges Initial application of Statenent of financial Annunting Starxlartin No. 96

• Anounting for incurre Taxes"(note 1)

$77

[

Change in over head iecordnl in inventory (note 1) 281 Not osmings

$ 3,999

$ 3.386

$ 2,915 Not oamings por share (in dellers)

Itefore extraortlinary itern arxl curnulative effect of acniunting changes 8 4.36

$ 3.75

$ 2.33 Extnuirtlinary item (note 25)

(.07)

Curnulative ellect toJanuary 1,1987 of anuunting changes Initial application of Staternent of financial Annunting Starxlards No.96

• Acrouriting for incurre Taxes"(note 1)

.63 Change in over head r nurded in inventory (note 1)

.31 r

Not osmings por share

$J W

}_s;20 2

Dividends dociated per ehete (in dellers)

$ 1.70

$ 1.46

$ l.32 t

'I he notes to umulidated Imattial statentnts on pages 40,.f4 are an integral part of thin staternent.

l l

l 5

e l

l 26

G r.

GlTs 1989 1988 1987 1989 1988 1987 Cl,326

$28,958

$29,937 8

9,693 9,866 9,378 704 680 619 927 788 552

_l2,945 10,655 8,?25

_42,650 40,292 40,516

__l2,945 10,655 8,?25 22,839 21,160 22,359 0 93 7,702 7,298 726 669 645 5,912 4.177 3,277 1,614 1,501 1.560 527 434 290 6,662 6,250 5,979 3,708 3,484 2,440 1,027 91 38 29 I

46 32 (5) 37,158 35,H 10 37,309 11,807 9,628 7,653 5,492 4,482 3.207 1,138 1,027 572 (1,553)

(1,096)

(1,088)

(!!!)

(239)

(20) 3,939 3,386 2,119 927 788 552 (62)

(62) 577

$18 281

$ 3.939

$ 3,386

$ 2.915 927 Q

$ 1,008 In the supplemental connolutating data on this page *GL* neans the pre 1988 basis of conu,hdation an descritu d in ruite I to the c onmohdated fmaru ial uatenwnis; *Gi l h" nwant Gerwral l.lectric i mancial Scrvices. Inc, and all ol its alhliates arut aivx iated companica. itansactions letween GI arul GI I h h,n e teen climinated irom the *Gerwral Electric Compan) arxl eontolutated a0ihates"columni on the prece<hng page. l.hminationa are shown on page 47.

1 1

1 27

Statement ofFinancialPosition Geieral1:Intrit Conipany arv1 <onuilictatal afhiiates At Deverntes 51 (In : iilleura) 19S9 1988 Assets (hh arminguivalents(note 11)

$ 2,258

$ 2,456 Mar Letable wxur ities < anini at cost (note 12) 6,799 5.510 Ma Letable wxurities canini at snar Let (exite 13) 8,488 5,0dil

&xuritics putihawxt uixier agtn nents to resell 16,020 13,81i Gunent incivables(note 14) 6,976 6,780 inventories (note 15) 6,655 6,486 (ILIS finarxing in eivables (investnent in tine sales, loans arxl financing leases)- ret (note 16) 41,779 35,832 Other Gl.15 racivables(note 17) 5,476 4,699 Pro lr:1y, plant anxl c(tuiprirrit (iricltulitig njuipirrrit leaux!

to othen)- tri(tiote 18) 15,646 13,61I investnietit iti GElh t

intangible assets (note 19) 8,822 8,552 All other aswts (note 20) 9,425 8,039 l

Total aseets

$128,544

$ l10,865 Liabilities and equity i

Short-tenn honowings (note 21)

$ 37,200

$ 30,422 Aucunts payable (notc 22) 6,666 6,004 Snusities sok! urnier agen nents to repun base 16,555 13,864

&xviities unkl but not 3rt puit havs!, at ma Let (note 23) 4,090 2,088 P ogiess collections anxl price axljustiriesits axeiunt 3,315 3,504 l

Divicletals payable 426 369 All other GE eunent costs atxt expensea actrunt (note 24) 5,650 5,549 Iong tenn tonowings(note 25) 16,110 15,082 Reserves ofinsurance afbliates 5,032 4,177 All other liabilities (notes 17 arxl 26) 7,866 6,986 Defenalirnunie taxes (note 27) 3,543 3,373 Totalliabilities 106,453 91,418 Minority interest in njuity of <unsolidatal affiliates (note 28) 1,001 981 Corntnoti st<x L (926,561,000 shares issunl) 584 584 Other capital 826 823 i

Retairxtlcarnings 20,352 17,950 Irss (otninori st(x L held in treasury (872)

(891)

Total Share ownen' niuity (notes 29 arxl 30) 20,890 18,466 i

Totalliabilities and equity

$128,344

$110,865 Corntnitrisetits arn! c orttirigerit liabilities (riote 31)

'the riotes to <onwilidaicd financial statoriit rits osi gioges 96 68 ate ari isitegtal, art of tinis statetiictit.

l l

f I

l l

t 1

I i8

Gl'.

Gil%

1989 19X8 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 4,800 9,666 9,300 5,980 4,251 6,069 4,819 7,048 6,981 1,774 I.568 5,653 4,621 3,772 3,418

$_44107

$ 41,283

$ 90,928

$ 74,915 t

$ 1,696

$ 1,861

$ 35,740

$ 28,731 2,901 2,136 4,144 4,132 16,555 13,864 4,090 2,088 3,315 3,504 426 369 5,650 5,549 3,947 4,330 12,165 10,862 5,032 4,177 5,635 5,481 2,256 1,505 (636)

(641) 4,179 4,014 22,934 22,589 84,141 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 1M,466 6,069 4,819 Syl7

$ 41,283

$ 90,928

$ 74,915 in the supplenwntalconwilid.uing d,na on this page *(it'" nearn the pre Ilikli h nin of aonw lutatwin an skvrited in inac I to the cons,lidated financial statenwnts; "Cl l h" nwant (Lorral l.httric l'inaru ial Scrth em, Inc. atul all of ha af hhates atul Cau n iated c ortipanici. I t atinactioni l,rtween (it. aiul(illh have tren climinated f rorn she "(icawe nt i.kttru (annpany and <onwilulaicd af bliates" tolunini on the pmeding page, l.hininationi are shown on page 47.

2'.I l

1 Statement ofCash Flows l

Gerwral Ekstric Gompany atx1(unsolictat(xl affiliates liir the war cminiIwemier si on milluna>

1989 1988 1987 l

l Ceeh flows kom operating estivities i

Net earnings

$ 3,939

$ 3,386

$ 2,915 Adjustnents to nxoncile twt earnings to cash provickxl f torn olrrating ani ities Extraonlinary itern atx1 eurritilative ef fect of( harrges in I

auuunting, prirxipics (796)

Dept ceiation, depletion aix! amonization 2,256 2,266 1,913 l'arnings etainect by GITS Ik fentsiirunne taxes 281 124 37 Ikx1 caw (inctcase) in GE cunent itseivables (100) 123 138 Ikx1 caw (itx1eaw)in GEinventorics (167)

(209) 375 Inct case (ckx1 ease) in arc ounts payable 503 303 149 increaw in insurance resenes 486 315 669 Provision for losses on financing receivables 527 434 290 Net < hange in (enain bruker-dealer aucunts (872)

($73)

(103)

Allother ojerating activities (230) 933 252 Cash provided from operating estivities 6,623 7,102 5,839 Cash flows from investing activities Piugerty, plant atx! equipriwrit incitxtirig equipirerit leased to othen Acklitions (5,474)

(3,681)

(2,277)

Dispositions 1,294 470 890 Net increaw in GEFS hnancing rectivables (6,649)

(6,057)

(4,575)

Paynwnts for principal businesses purc hased, ret of cash anguinxi (I,860)

(3,504)

(555)

Pnaxxh frum principal busirras dispositions 880 646 Allother investing activities (400)

(1.620)

(1,097)

Conh used forinvesting activities (13,089)

(13,512)

(6.968)

Cash flows from financing actMties Net change in bonuwings (less than 9(hday maturities) 7,360 3,868 2,519 Debt having maturities more than 90 days Newlyissued 8,078 11,324 8,219 Repaynents arxlother recluctions (7,710)

(8,801)

(6,883)

Sale of prefened stoc L by GE Capital 600 I

Dis lxisition of GE shares f rom treasury (rnainly for employee plans) 509 356 361 Pun haw of GE shates for treasury (490)

(387)

(846)

Dividerxis paici to GE share ownen (1,479)

(1.263)

(1,177)

Cash provided from (used for) financing notivities 6,268 5,697 2,193 incrocee (decrosse) in cash and equivalents during year (198)

(713) 1,064 Gash arxl equivalents at beginning of year

_ t,456 3,169 2,105 Cash arxlequivalents et erxlof year

$ 2,258

$ 2A56

$ 3,169 l

The noin to wnwixtaird Imancial statemenn on pagn 4M.ft are an integral pan of thintatenent.

30 l

Gl:

GIis 1989 1988 1987 1989 1988 1987

$ 3,939

$ 3.386

$ 2,915 8

927 788

$ l.008 (456)

(796) 1,524 1,522 1,544 732 744 369 (927)

(788)

($52) 178 (215)

(158) 103 339 195 (12)

(170) til (167)

(209) 375 693 (342) 21 (75) 693 48 486 315 669 527 434 290 (8Y2)

(573)

(103)

(468)

_ 410 413 256 751 159 4,760 3,624 3,873

_ 2,084

_ 3,491 2,179 (2,217)

(1,884)

(1,698)

(3,257)

(1,797)

(579) 205 118 410 1,089 352 480 (6,542)

(5,943)

(4,627)

(759)

(2,963)

(1,10!)

($41)

(555) 880 646 115 444 (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 (1,772)

(30)

(238)

(6,046)

(8,771)

(6,645) 6(X) 509 350 361 (490)

(387)

(846)

(1,479)

(1,263)

(1,177)

(2,178)

(856)

(2,465) 8,404 6,369 4,688 (74)

(637) 760 (124)

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

$ 1,749

$ l,823 y.2.460 SM W}

{ 709 in the sup> lenwntal consohdatirig data on itiin giage,'ol? ricaris the sire 1988 tuisin of consolutatiori ai des;rited in note I to the consolu;>tatal finarn ial atutenents; '01 I h" nwani Gerwral 1.in tric l'inancial Services, I nc. atwl all of its aIhhaics aswl awk iated c ornlianies.1 rannactions tetw orn GI arul(,1 l h have tecri elitiiiriated f ronti the "Getieral l.intric (kiniinitiy arul consolutated anihates"colurnns on the giranhng giage.1:hminations ate shown on ;> age 47.

I

Management's Discussion ofOperations Oven 4ew guutly ofIset by nudestly higher pricts,if sales for the Gerwral Eintric Onnpany's consolklatal finarxial state, three years 1987 1989 wcie adjusted for the efhtt of nwnts itu tutte the detailed efInts of adding to the Onn-auluisitions 1 ixl dis;usitkuis, the increaw in 1989 Itorn

}unA inanufacturing arxl iruhu trial sen k($ busirxws 1988 would har been ainut 3% arx11988 w<nild harte the accounts of Gerwt al I.In nic l'inata ial Smic es, Inc.

been up atout 4% f nnn 1987, (GITS).

• GE's other iruome irtun a wide variety of wiunes has Note I to the cunwilklatal finarxial statements explains totaint letutt n atout $650 million arxl $700 million for the cum.olidation pnxedute. Among other things, that eac h of the last thice years. See rune 3.

note almsplains how the terms"GE"or *GE evept e GlTS ev~nmS,or carrwdiraume,Inim operations gel S" arul "GI l'S' ar e uvx! in this rqon to help icaden 6,r 1989 weie $12.9 billion, up 21% inirn 198N's $10.7 i

urulcistarut the var ious data. These tenm ar e usal Ire.

billion, w hich was 30% nune than 1987's $8.2 billion. The quently in this hianagenent Discuuion for clasification of principal reason f n the incn aus hu been highn leveh of emphasis-asv ts in GE Capital, including the ofhet of aa;uhitions.

Conudidated net comings Ior 1989 were $3.939 billion, or Yickh (ie, pric es or interest rates paki to GE Gipital by its 16% moie than for 1988. This was the thini conux utive eustonwrs for its finarwing of their rxxth)inntasni f rom year of strong double digit earnings inctcaus. Operating the prior pericxl in luth 1989 anxi 1988. Note 4 shows margin for GE of i1.3% of sales-an all-time inurd-gel S t evenues fium olwiations by princilal tylw of sellected continuing wide >Jnrad pn luctivity improve-activity.

nwnts aixl sevenue gains in luth domestic aixi intenu-Prineifioleosts and eqwnses for GE ate those c lanified as tional mar Lets. While vinually all Ley busirx5x4 c ous of go ds aint u niu a wiki aixl selling, getwral anxl contributed to the higher carnings, partindaily gud 1989 administrative ex[wme, per hinnanc es wcie s e[onal in GE l'inancial Senius,

,.. Operating margin

• is sak5 of gads and senices less Plastx s arul hinlical Systems. See lixtustry Segnwnts dw costs of sales arnt selling, gerwral ard achninistrative beginning on juge 34 foi additumal detail alout [wi fonn.

ex}enses. Opciating margin was 11.3% of sales in 1989, ance by various busitwsses of the unnpany.

Inun 9M in 1988. Eddiglinonnally high refrig.

Net earnings for 1989 arul 1988 did not mclude corpo-amos coquewn wmamy ww pm himin 1988, rate provmons for business t estmctut ing expemes, nor mti mqin foi that year woukt have teen about did enher year include any impact fiorn annunting 10.7%.'I'Nv m m ignm u ms hdkm n M gm c hanges. Net earnings in 1987 aho reflectal solid ojerat' during whk h the margin rate was in the 8-10% range arul ing let hinnance, but aiu!ym oficsults fcn that year was stem dinxtly funn the ongoing focus throughout the complicatnl by two types of tramacticms that essentially Gn ny on impmving pdunivim GE'aitam p njuaInl cac h other in twt canungs. I,hese were a inluc-ductivity, whic h excludes the effats of inflation, averaged non in gne-tax ard af ter tax camings cauuxi by unusual 5% he ddegeqidihdi*

arxl extraordinary expemes ($717 rmilion af ter taxesh 12% range in the early yean of the 1980s. There were mainly fin busiress iestnuturings to iminove f uture prof-no cqoma k vel business nestructuring expense pn>-

+

itability; arxl an increase in af ter tax carnings ($720 nul-visions in 1989 arxl 1988 to comp;ue with the $1 b liion lion) Innn two ac counting ( hanges, orw intohing incon e taxes arxl the other invohing over head reconled in im en.

tories, as explained in note 1.

GE/84 P enmings por share incrosse' decrease compared with 1984 The following paragraphs discuss various aspects of the comolidatal Statement of Earnings on page 26.

NW

]

l Conndidaicd rnosucs of $$4.6 billion in 1989 weic 9%

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

inctcase inun 1987. The principal c ornponents of cunsoli-dated revenues aic

• sales of gaxis and senic es* by GE arul j

" revenues inun operations

• or "canuxl iruunw" frorn

,,g GITS.

nu l

e GE's sales of gnds atul u t'victs for 1989 totaled $41.0 gm, o

I billion, a 6% ina case fiorn the year leiore. Virtually all of l

the 1989 increase came f om a higher volume of ship-

- ro l

nwnts, with slighdy higher overall prices having only a nn uns int tus ins inino elfat. Sales in 1988 were down atout 1% frurn 1987, with the ellect of atout 2% lower shipment volume 32 1

p<nidalin 1987. "Ilune p vvhions in 1987, arri for wv.

Consterd donet selos per GE nM cr:I years prior to that, w cre las gel) tan getal at irnpnning On thousands) nat sinutur(s.

$ ifio O GE's interest expenw in 19N9 was $726 rnillion, up 9% f rom $669 :nillion in 1988, w hkh was 4% nwne than in 1987, liigher interest exlense in 1989 was due to a higher cverage level of lonowings unnining f roin 1988 acquisi-

-E tica activit). 'the clint of this was panly ofIwt by winw-what lower average 1989 interest rates. 'lhe incicaw in

-.?

intesest expense in 1988 funn 1987 was rnainly inun g

higher intrage internt ratn llartly oliset by a winew hat kmer aserage kwlof lonowmgs.

o GUS' principal twf is inferrst tapense, im im int im im 0 GElY interest exlwnw totaln! $5.9 billion in 1989, 42% inore than in 1988, whk h had been 27% inore than hu ditictenus betwctn the statutory arxl clintive rates.

in 1987. 'llw inacauxl intnnt expenw refitrts the higher Together with other inkinnation alout inuonc tax pnni-level of lxin owings that have tren uxxl inainly to irnest in skins, an analysis of the dificien(n letween the U.S. fal-earning awets invuh at in a wide vaisety of financings eral statutory rate atxt the conwilidated nue can le fouixt made available to thint panies, i he nnnposite internt rate in note 10.

incunnt for GEIT finance activitin was 9.60% in 1989 annpaint wnh 8.39% in 1988 a xt 8.11% in 1987, the Widends andered totaled $ 1.537 billion in 1989, or $ l.70

spread," or ditTeren(c letween intciest ratn GEIS pays I

d.Anhe sane due, de unnpany tetait uti sulh.

to its inxlers a:Kl nun it < hargo to its custonwrs, nai-aent canungs to sup;rnt enharytal pnxtuan e capabihty townlin 1989 after increasing xinewhat in the jurvious arxl to pn une adnquate nnannaliesmun s for intenial arxlexte nalgn>wth opponunities. Ihe fourth cluarter g o p.,

1989 inocase of 15% in dividoxis declarni mat kul the

{ Among GEiW other nists, the piovision for loss" 14th conwcutive >rar of divideixt growth, on hnanang innvahks of $527 :nillion in 1989 was up

$93 million from 1988, whic h had teen $144 million more

1. 1. '"'" "" " " #'8b"

""9"I'J "'achnt 20M in than 1987. At 3rar crxts 1989 arvi 1988,GEiY reserve 1989, up ftom 19.4% in 1988 arx1 one arx1 orw-half point 5 coverage was njual to 2.63% of financing ureivabin com-letter than for 1987. Infonnation about the five year GE patul with 2.59% at the erxl of 1987. Insurance policy annumn share repunhase pn> grani announnd in holder losws arxl berrfits ex;rnse increasni by 8% to Novemler 1989 can be fouixiin this repon in the sation

$ 1.6 billion in 1989 af ter having declinal rnculestly the that discuses l'inancial Resouren arxl Liquidity starting previous >rar 'the cunent >rar increase was principally

"" P E" 38' due to increasect kissa on life icinsurance, partiadly ofIset 7hc globaleconomic andpoliticaloutloon has nunwrous by lower lossa due to the taluc al progeny arxl casualty uru ertainties. l'or example, it is well known that the U.S.

insurance business, govenurent is seriously considering reductions in defense The infernt of minority share ouwers in the equity of con-s[ending, it is aim weH known that ther e is no consensus wilidatal afhliates in telatively small but has teen growing on luiw unu h arxl what types of risluctions there willlie or in rarnt years. l'or GE, the increaw represents mainly the tw.ux! w ben suc h inluctions will be implenwnted.

impact of in ent aggressive fonnation of joint venturn Alouune-eighth of GE's (unmlidated tevenun inight le

(

"ib $ h "'d"

"$' @T i iU$III U8U# USA"U S

I arKl alliances ainMi at knctrasing glohal competith enns.

l'or GEI'S, the incicase resultat principally f rom GE Gapi-de neu jage.) longer ntnge,intured defense sperxting tal's sale of variable nue piciennt st<x k to third parties in coukl icsult in a lower iniend budget deficit, lower interest 1988 to augnent its utnity base. 'ther e wer e no f unher nun, atxl conw luent stimulati n of domestk investnwnt sales of such stmL in 1989.

amt utnunnic gnmth. I'unha, gkital op}xstunities for marLet gruwth such as that anticipated from the whed-The consolidated cgretive income tax raic was 30.9% in ula! Euro[wan nonomic integration in 1992 ap} car plen-1989 coinpaint with 28.3% m 1988 arul 34.3% m, 1987, tiful. Despite these uncenainties, inanagerient believes (lhe U.S. fnleral statutory n te was 34%. for loth 19851 that the stiength of GE's divnsity atxt wor kiwide leader-arxl 1988 annparul with 40% in 1987.)'lhe (krera e in ship in k y busirx sx s pition dmnnlany to cuntinue the U.S. fnleral statutory rate was the main season ior the g(xid pn fonrunu into 1990 and be>urgl.

lower ellative (onolidatal rates in 1989 arxl 1988 ann-pared with 1987. 'lhete ate, however, rumwtous ecasons 33

1 l

i i

l Industry N=.e e Aircraft Enginn tevenues were up 6% in 1989 folk >w.

i Convilklated irxtustr> wgnwnt revenues atx1 operating ing a trnall da reaw in 1988 f torn 1987. Openiting proht profit for the last hve > rats s[>;, car on tiie opjxisite page.

"'ntinuni to inacase ditough 19N9. New crigirie orders of The prtv ntation of n,nvihdatal irniustry wgna nu is in

$N billkin in 1989, following the ser) stiong 1988 ;wr for m-

)

two pans, orr for GE cxc ept Gl.i S arxl one fot GI l's.

aruc oi $9.7 billion, brought hnn h a llogs to $ 13.3 bil-I unsistent with vrars beforc 1988, GE vevenuesarxl oper, lion at the rivl of 1989 nunparul with $12 4 billion the

]

]

atir.g proht cuntinue to irxlude carriirigs of Gl;is. Itetc.

)nt beforc. Of dw 1989 bin klog, aluut 45% is oc haluted J

nues arxi operatirig profit foi Gl:IS l>y the irxtusts'y for corriplerkin iri 1990. In addition, custarrwrs have wgnents in v hk h it c orwha ts busirxss are presented sepa, options that total $22 billion. Although rnilitary prograrns rately with appropriate elirnination of GLI S'carnings a, are im}urtant to Airt raf t Engires' busirwss, the surge in well as the ininor efin t of transactkins hetween (;E arxl cornriwrc ial erigirus arx1 act eleratirig giowdi in pans nrvi GI I S wgnents. Acklitional hnancial data plus detaihti servkes provide a sourxl base as the dnale of the 192 l

dev riptions of eac h segnwnt can be fourniin nott 33.

begins, CcmuJidated operatingpnfit is the principal wiune of GE's e broadcasting olerating pnifit increauti 12% in i

ret cairiliigs, arxi die :elatioriship letweeri the two i, 1989 over 1988, coritiriuirig die iriipruverirnts sirice GE depictni in the c han on this page. Convilidatal operating anjuiral NitG in rnid 1986. The 7% (ktline in 1989 reve.

pioht excenktl $7 bilhon in 1989 with thne seginents -

nues irfkttal the lac L of a ununtegiart to nivenige of the Ain niit Engines, Mate ials arxl Iinancing-eac h surpass-1988 Olympic Ganes. A principal reavin for better oper-4

)

ing $ 1 billion for the hrst time. As shown in the c han, ating proht was highet pnulucthity, u bich was panly off-openiting proht had dipluxi vinie in 1986, ahhough net set by stan up nous asvuiated with launc hing GNitC, the Consunwr News arxl ilusiness cable chantwl arul related earnings continunt a steady increaw. Openiting proht in cable activites.

j 1987 was af ter absoihing $ 1.069 billion of unusual coqu>-

i I

rate level expenses as noted earlier in this Managenent's e industrioloperating prohts increavtl 6%. in 1989 to Discuuion. The:c wer e no suc h unusual expenses in 1989

$847 inillion with improvements in most ongoing busi-or 1988. Comnents on eac h wgnent iollow.

nesws. Flat revenues reikrtal a number of busirwss dis lxw e Acrospace irvenues have tren at aluut the $5.3 bil.

sitions, priruipally the semicoixtuctor business w>kt in late i

lion level for the past that years, atxl operating profits 1988. Improvnt operating profits in 1989 were led by have nmgniietween $6(o million and $650 million for Ek ctrical Distribution arx1 Control, whic h includal the t

the sane yeart New oniers ineival of $6 billion in 1989 convilidation for part of the ) tar of resilts for GE's Eun>-

=

were up 8% from 1988, bringing the luu Llog of finn pean controh ventmes with GEC of the United Kingdom.

unhllal ordets at Dncinber 31,1989 to $8.0 billion,of Transportation Systems 1989 olwrating profits were sub.

whk h approximately 40% is x halukt! for coinpletion in stantially higher on a strong increase in shipnwnts. Eight.

1990, ing operating profits were up somewhat from the prior Although there was a signincant increaw in orders from

>rar on slightly higher sales. Factory Automation,indud-l internationalcustonwasin 1989,much of the Aerosgune ing Drive Systems, had a gaxl increase in openiting profit business is per funneci urxler contnut for the U.S. govern-and sales. Motors operating prohts for 1989 were atout tient, rnainly hit the lh*[>antilerit of Delense. Ik%pite orders growth over the past two years leading to a rnord Consolidated operating pro 9t and not semings luu Llog consisting of huixirnh of diflerent contracts, (in billions) rnanagenwnt exiwets that some defense irxtustry adjust-m j

riierits will take place in responw to c hanging leveh of defenw sgwruling. Managenent has developed long nmge o

contingency plans to anticipate such ;xissible c hanges, ituluding a uinternplataliniuction of approximately u

10,000 positions (about 25% ) in the wot L lon e over a thne year perimi. In 1989,approximately 4,000 of this a jall,7,n

-'"-3o intnction occunal-through attrition, a business dispo.

sitiori arxl layol(5. The rient Ior siriiilar actions,if reces'.

" Umnn t.5 sary, will be detennited over the tiext two or riione years on i

0 a busirwss-by btisiress' location-by kxation basis as busi-85 N

'm i

ness unxlitions evolve. No sgxvific dec isioiis have yet beeri made regaiding lxitential additional auions.

i

r Summmy ofhidustiy Segments Gou ral 1:httric Gcirnpany arxl crinvilittat<<l afbliates in the yeati ewtailinemter s! O n enilli,,no 1989 1988 1987 1986 1985 Revenues GE Acnajuce

$ 5,282

$ 5,343

$ 5.262

$ 4,318

$ 3,085 Aircraft Engirx s 6,863 6,481 0,773 5,977 4,712 linwkasting 3,392 3,638 3,241 1,888 51 Itxhnttial 7,059 7,(Kil 6,fdi2 6,770 6,916 hlajor Applian<cs 5,620 5,289 4,7'l 4,352 3,617

/

hla'erials 4,929 3.539 2,751 2,331 2,119 lbwer $pterns 5,129 4,805 4,995 5,2'i2 5,824 Teshnical Pnxtucts arxl Senicrs 4,545 4,431 3,670 3,021 2,317 1;arnings of GEIS 927 788 552 504 413 AllOther 319 394 3,176 3,379 1,07I Cor)xerate items atx1 Eliminations (1 A15)

(1,477)

(1,287)

(1,077)

(903)

'Ibtal GE

__42,650 40,292 40,51(i 36,725

_ 29,252 GEIS l'inancing 7.333 5.827 3,507 2,591 2,469 Insurance 2,710 2,478 2,217 2,026 1,332 Scruritieslin>Ler Dealer 2,897 2,316 2,491 1,176 Allother 5

34 10 18 4

TotalGEis 12,945 10,655 8,225 5,814 3,8M Eliminations (1,021)

(858)

($83)

(526)

(433)

Consolidated revenues J54,5,74 g

$48dh8 J42fil3

$32,624 Operating pront GE Aerospace 646

$ 640

$ 603 608 437 Airtralt Engines 1,050 1,(KKI 940 809 673 liniacicasting 603 540 500 240 20 Irxiustrial 847 798 302 575 658 hlajor Appliances 399 61 490 462 399 hlaterials 1,057 733 507 424 330 lbwer Sptems 507 503 199 354 740 Tct hnical Pnxtucts arxi Senices

$89 484 275 112 22 Earningsof GEIS 927 788

$52 504 4IS Allother 176 168 72 162 376 TotalGE 6,801 5,7 lh 4,440 4,310 4/4i8 GE}3 l'inancing 1,152 899 636 (99)

Sul Insurance 407 334 183 132 48 Securitiesiholer Dealer

($3) 64 (23) 83 AllOther (368)

(270)

(224)

_ (177)

(125)

'Ibtal GEI S 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 inter est arxl financial c harges (net of eliminations)

(703)

(655)

(635)

(616)

(354)

GE items not traceable to segrrients (630) iSfi4)

(588) 7 (287)

Earnings before income temos, extraordinary item and cumulative effect of changes in accounting principles

$ 5,703

$ 4,721_

$ 3,227

$ 3,127

$ 3,431 The mnes io convolidaint hnamial staiturnis on nages 4M,k ve an integral pan or this statenwnt. Gir nwana the pic.19881 mis et t onsohdation as deu rited in note i to the c onuihdated hnatu ial statenwnis; Olj s" nwans Gerweal l.intric linarnial hertu es, t ru. arut all of its clhhates avul own iated c ompanics. Oper atin irof a of Gl. u gments culudes interest and other huan(bl(harges; oletating proht cl G1 IS ituludes the clint of interest arut diupunt, u h in the targest elenwnt of GEJS'ojeratmg conts.

g j

i i

1 i

1 esen wnh 19s8 on nulestly higher sales.

weic very strong in the usurxl half of 1989. 'Ihe lou thig s Major Apfdiences tevenues were $5.6 billion in 19MI, of unhlicxl onle:S was $ 1.5 billion at )rar-crvi 1989, alm iut i

a M4 irutcase Innu 1988. 'Ihr cunent svar iruhulnl sales 759 of whk h is vinstulnl to le shippnl in 1990. Onninu.

Iroin the I uro[wan venture beginning in the usurxl nications arxl Services had a goculincreae in o;wrating quanei. 't his iru ivaw was luniaHy ofIset by the absern e of PH'ht with gunkularly gcxxl coritributions try Gl Anwri-i icwnues of inisursws that have been vikt,inainly Rolwr's ann, Infonnation Sen kes atxt Mobile Quninunkations.

l outocrir im>wer pnxtucts Onler rates weaterxxlduring a remings(fGL13nuninualtoincreawin 1989.

j the uwxl half of 1989 ahhough one pnvluct lirws Gunnents on Gl:i'S irwhistry segnents appear behiw. Of i

j slum ni wune inar Let share gains. 'Ihe sulatantial increa e GlJS' 1989 et earnings, GE Gapitars contribution was i

in 1989 ojerating proht was prirnarily lurauw prior year

$816 rnillion,364 nune than 1988's $600 raillion, w hk b sesuhs were irnpacted seterelv by ref nigerator unnpersvn.

was 28% nune than 1987's $179 inillion. Ghe 1987 relatal wananty provisions.

anunint excludes the curnulathe effnt of the iru onne tax l

o Mainials sevenucs wne up $l.4 billion in 1989 fruin anounting c hange a xt extraonlinary kiss discusvxt in the > rat belore,an incicawof 399. A latge just of the note I)-

(

incicase was due to having a f ull rar of Ilorg Wanwr's e rimancing o;wrating prohts continued to increaw 3

c he inicals ogwrations in 1989 c oinpartxt with only the last very abstantially as they have cac h year situe 1986. 'the quaner of 1988. Incorning order rates for Plastics slac L.

level of caniing assets arul the innpart of c hanges in inter.

enni in the latter part of 1989 refinting a slowing in auto-est nites on honowing costs aiul firiarwirig yiekts are tuotiw ami api.liance ina:Lets. The 44% increaw for 1989 irnportant facton in l'inancing operating piufits. 'Ibtal oiriating proht reflatal higher ph)sical volunw of Plas.

aswts of GE Capitalinctcauxi by 239 in 1989 frorn 1988, i

tica'shipnwnts,irxiuding a solid cunuibution froin the w hich had lxrn 39% inore than 1987, Financing yiekts ilon g Wanwt Chernicab anpiisition. Supenibr ash es alw incicauxl again in 1989 folk > wing an inovase in 1988. GE i

)

contributal to the higher olwrating profit for 1989. Sili-Gapitars cumposite annualinteerst nue inneawd 119 hasis l

totws aint 1.ukt lYtrolnun piohtability were ainut the joints in 1989 unnpaint with a 43 hasis point ina eaw in sanw in 1989 arxl 1988.

1988. These inneaws in cornpcnite inteiest rates reflectal e Ibuer Systems sevenues were up 7% in 1989-the principally the effnt of higher shon tenn inteerst rates first upswing in five )ran. Olwn ting profit irupioval on uunnwarial juler tonowings. GE Capitars lerxting slightly. ibwer Gerwration had iinprovnl operating profit "Sinead"(diffnenc e between interest rates c haigni to cus-i 7

refinting higher shipnents of gas tusbines atul wide, t<ntwn atxt interest rates paid to lerxlers) decreased winc.

spirad pnnluctivity improvernents. Other busiresses in w hat during l'IS9. The spr ead had increasal uniewhat j

the segment had sonww hat lower resuhs than last year, during 1988.

Spunni by strengthening demarxl by domestic utilities e lasuroner operating proht inneasnt 22% in 1989 arxl a $750 million order for the wor krs largest combirm t-Irom 1988. Principal reasons for the 1989 improvenwnt cycIc lower plant to be buik by ToL>u I kxtric lbwer were the inclusion of all o;ciations of FGIC Corguration Onnpany, Ibwer Generation inorded sww onien of as a resuh of completing its acquisition carly in 1989 almost $4 billion in 1989-over 499 ahead of 19e ihe atxt improvenent in the mongage insurance marLet.

Ibwer Genenition hac Llog was $5 billion at Deu o aier 31, 1989, ainut 45% of w hk h is u haluted Ior unnpletion in Total assets of GE Capital l

l990-(in billions) e TechnicalProducts andSen ices operating profits y,o l

wne up 22% in 1989, continuing the ga xlincreaws of piior yean. 'Ihe :evenue increaw of only 39 in 1989 l

o l

tefin tal the irnpact of unne misellamuus business diyu.

l sitions, liigher operating proht was sparLed by Mnlical 3r, Sytterns, where a sharp inneaw in operating pioht reih ctal higher volune in x-ray, computal tomography arul magertic resonatu e imaging, as well as gaul puxluc.

_a tivity impnnenwnts. Mnlical Spiems apiipnwnt oulen

__g o

19ks 19k6 1967 19ks 1999 36

Ernpki>rrs Reinsurarx e Gir;xiration, w hk h is the Lirgest Totalintemet60nalrevenues singit inisiress in the insurance segnwnt, had nu xlently un tilmonal higher art caniings in 1989. l.RC has increaux! revenues l i 'i cac h year Sirxe 1986.

{

o Seewritin Aman lWier (Kickler, lYah xt)) had an

- !I i

operating kas Ior 1989 conyared with a profit in 1988.

l Mo:t of the 1989 kms was irwunni during the fir st quarter i

of the >rar, arut, as revenues innpun ni arxl ants were e nihn j

f inlue nt, the last six anonths were at out break-n en.

A, l

a r.,i. is-n 1

Kkhler, lYaixidy ur>L stein during 1989 to exit tenain l

l busirwsus, to upgi.nle stafi in others atvi io sticamline the 8 ' "'""

i organization.

l o

0 Allother GEf$<unsists principally of anlunition.

im im mt im im

[

relatal inteirst expense not alkxatal to the wgnwnts.

e GE sicas not tracce6lc so segments include ex[enws in acklition, exixats inan GE o[wrations in the Unital such as the Quixirate R&D Center arxl tur[xwate stalb States to GE athli;ues ofIshore were $ l.107 billion in 1989, arxl incune f torn curporate u casury activities.

$874 rnillion in 1988 and $801 inillion in 1987, e GE again skarpy innmed its positiene nutribution ts internationaloperations the U.S. halence <f trade, in 1989, thinuntribution rwtted j

o Todelinscrwationaloperations (cunsisting of all to atout $1.8 billion (urnparal with $3. I billion in 1988 ex} orts from the Unital States plus the results of opera.

arxl $2.1 billiori in 1987. This improvement is attr ibutable i

tions kicatal outside the Unital States) had sevenues to the higher level of expon activity, as depictal lelow, j

aggregating $13.9 billion atxt o;wrating proht of $2.8 bil.

OE contritivtlen to U.S. toelence of trade (est6 mated) hon m 1989. International evenues were $10.8 bilhon in sin i,iitu,no i989 3988 1987 1988, up froin $9.2 billion in 1987, International o}weat.

r 5"I" I""" th' U"Id ht"'"

ing picht in 1988 was $2.1 billion comparnt with $ 1.7 I*po'" external customers i

$ti2

$4.9

$4.0 bilh.on m 1987, To GE affdiates L1 0.H 0.8

~i The < har1 (above right) shows the growth in GE's irve.

Tinal expons hom the Uniin!

nues for international ojerations by areas of the world states 7.3 5.7 4.8

)

over the last five years. An es[xxially signifuant increase in Inyorts into the United States l

~

~

~

European operations is evident, es;xxially in the last two l' rum GL afhiiates 0.7 1.0 1.1 l

years. "Ihis is the result of significant increa es in expans Dirn$ fnnn whn sup; dins y

y y

{

of Aircraft Engines; a muc h higher volune of shipnents Taalim;niru innithe Unital stain 2.5

?fi 23 of Plastics pnxlucts; the establishnent of an incicasing ine508}ce in European Mntical Systems anat Lets :elatal to CI[Idil'g",'r"d'"'""'

$4.8

$31 g

f anpusitions beginning in 1988; arut, in 1989, the unpact

=

=

of ventuse activities, es;xsially in Major Appliances arxl l

Omtiols.

i o GD caportsfran the UnitedSisin io external cta.

$f[)U""'

"I'**I tonwrs escalitnl to $6.2 billion in 1989, up from $4.9 bil.

W hon in 1988 anxl $4.0 billion in 1987. 'the chart (on the sight) shows the substantial growth in GE's ex;xats for the 7,,

last five ) tars,lui by the strong inctcavs in Aircraf t l

Engines. Ex}x,rt sales by major war kl atcan follow.

i

_39 OE's emports from the United States to external customers On milluun) 1989 1988 19M7 26 i

-"~~""'

Europe

$2,915 $ 1,805 $ 1,253 E8 l'acihr liasin 1.926 1,357 1,146 Americas

$96 531 625 I

Other 724 1.177 IJKKI O

$6.161 $4.870 $4,024 is8s 88'i6 im im im I

k 37

+

Managements Discussifm ofFinancial Resatnres and Liquidity Overv6ew c base (*repun base agicements"). 'lhese t ypically reptc.

Ws dheunion offnencialresouren endliguidity figuw.,

sent highly liqukt, shon tenn investnu nts of cu ess Iutvis on the Statement cf l'inamial luition quge 2x) arul the or b nuiwinpf such Ituuls Innn odu rs. At 3rar cisis 4

Statement of Cash th.S (pe,c 30). As with the Statenu nt 1989 arul 1988, the hdarues (luth aw ts armi liabilities) of I'.ar nings, the tunteut of tbese twu statenx nts is we dif-wne solely duise of Kkkler,lYab ul) in unuuttion with its ferent Ior Gl; arul GI I S that nuist of ihe awi, liabilit) arul h"'l" dealer activities.

l rash Ilow categories do not in ul themw hts to simple o nn-e Gl3 cunrnt rweheWrs are mainly anuiunts due fnon i

tir.ailmJlhh, of niusse, eellats the difIercru es in the natomers arul weir $$.3 billion at the nut of eac h of the j

nature of the busirxwer,,

last two yrars. ('mtomer in rivahks "tunuxi over* 7.50 Altluiugh Gl:'s inanufacturing arul s uinfinarn ial u tyk es tinus in 1989 unnpaint with 7.01 tinus in 1988. ("Ttn n-a< tivities imulte a var ict) of dif f erent busirusses, their ovet" telates in eivables to sales avul is a nu asuiement of urulerI)ing < haractn istk $ at e the devehiping, prepu ing

< olin thin effuiency, liighet tuttuwer irulicates faster cul-foi inar Let arul selling of tangible pnal uts awl seni< cs.

kxtions.) Gl;'h tieralin this area has turn impiming situe j

Rhk arulicwant air dinxtly iclainl to the ability to man-1985, primarily as a irsuit of rigorous inanagement atten-J l

age those activities. l'inant ial leven age nines ietun scalii-tion to o alit arul cullntiom. Other in eivables nraune-j ing an adequate actuin on ahare ownris' ntuity w ith inents, un h as delinquency atka awl amounts past due, j

judkiom useof buiown!Iurwh.

also have turn im}noving, atut the overall(orulition of cus.

Gl i S is not a " captive hnaru e compan)"or a vehkle for tomer incivables semaiini eu ellent et the esul of 1989.

• ofI baluur sheet hnancing" for Gl' In Iat t, very little of Cunent ineivables other than amounts own! by cus-7 1

its busimss is ditutly relatal to other Gl: operations. Its toner 5 are amounts that did not originate f om sales of in incipal busitusus inovide hnancing icimurance aiul Gl: }ntulacts or senices, such as advanus to suppliers in innte deale: sen k en to thial panics. 'the uruin lying c omustion with 1,uge contracts.

(haracterktk s of these bmimsses invohr the inanagenent e inwntodrs of $6.7 billion at the ciul of 1989 weir

)

of financial r kL 'lhey do not develop, manuf actuie or u li S ightly higher than the $6.5 billion at the emi of 1988.

pu ulucts arnt seni(cuut h as, f oi example, an airtraf t Inventories tunuxi over 4.44 tines in 19N9 compaint with engine or the delnning of a nu% age over a 'lY retwo:L.

4.38 tinus in 1988. As with ascivables, this is a measuse.

'their risk atul reward are ictatal to the ability to peuvkle ment of clhcient use of resounts arul has been showing futub at (umpetitive sates coupini with neathe valuc*

siciuly impuwenent in inent yea 5Jihne wen no signifb achini sen n es.

cant c hanges in inventory leveh in the Ley hmitu ws

'these iurulamental dilIn ezu es are iefinint in the te wn.n the last two year ewh.1.ast in fiist out (LilU) measurements unnmonly usnt by investors, rating agen-revaluations dnicaux! $37 million in 1989 comparal with cies awl Imancial analysts. 'l hese dilIcieru es will lux ome an inncase of $ 150 :nillion in 1988.1.1 FO icvaluations l

cleater in the dhcussion that follows with seslutt to the inacaxtl $324 million in 1987, mmtly irlatal to the t

rnore signi6 cant itenn in the two hnancial statements-aucuunting < hange descrilux! in note 1. Included in these i

(hanges were deneaus of $68 inillion, $23 million ami Statement of Financial Podtion

$22 million (1989,1988 arul 1987, t espxtively) due to e AfarketaWe secuntirs carded at cost Ioi cac h of the lower inventory lesels. In eac h of the last thice > cars, there J

last two >rais were mainly debt urutities hekt by GI:I'S' was a net tunent >rar price inocase, insuratu e afhiiates in sup;xn1 of their obligatiom to policy hoklets. 'lhe inacase to $6.8 billion in 1989 inun

$5.5 kiillion in 1988 selhxts the auguisition of I GIG.

a AtarketaMr secuntin rankd at market wpresent primarily the investing aint trading pntiolio of Kidder, y,

Ivah uly arnt, to a lesser degice, similu imuram e af hiiate acthities. 'l he ina case to $8.5 billion in 1989 Inun y',

$5. I billion in 1988 rollects a higher level of activity in I

these bminews as well as highet mat Let prk es at the erul 3

of 1989 compaint with 1988.

m (.i o Securitin purchased under agreements to resell a su.w, l

(* everse r epun hase agnements") are related to the liabil-y ity anuunt: Securities sok! urules agarrients ta re[nn.

b o

im im int ins inv i

s

e Gij$'fman<ing reerheNes giew to $41.8 billion in DMdends per ehere 1989, a $5.9 billion (16% ) inncase. Note 16 itu hules addi-g oa tionalinfonnation aval dnails alm ut diese rneivables, whi( h are Gl5}T singIe trKnt itiiliottaril cam?!ttg anet.

l f,0 I

Glils Imniles time saks atxl loans on various tuvS with varying im 16 of usurity arri differing maturities, ElKI it alMi makes pf efenni sto( h investn wnit af ul (K ra*

iso simally in cives wanantuunvenible into comnuin st< x L o no J

l Tinw sak$ arul hans giew $4.1 billion to $30.9 billion.

l l

Increaus wcre in retailer atul auto financing ($7.1 billion);

o 40 oimarrvial real estate fmarxing ($ l.2 billion); a xl ann-l nwreial and itulustrial kuns ($ 1.1 billion). Ilonw arul in.

o

'"5 8"*

8"'

teation financing decreasni by $666 million.

truludalin tine sales arn! kum arxl other auets weie furxtings aixi investnents, prinuipaHy by GE Capital, for nue as a penent of average finaruing incivables was leverugni unrpnate testructurings, managenent buyuuts 0.98% in 1989,0.81% in 1988 arvlo.62% in 1987,'the l

E xt raapitalisations - ugallnl leveragni buyouts or inocases in 1989 aix! 1988 tefint significant gnmth in 1.lK h. GE Gapital structuren tlwse transutions to afhnd antit card openitions wluise loss rates, as expaint, aic itself sufficient nillateral protection with approximately irlatively high in annpatiwin with other GE Gapital busi-75% of investnwnt p>siticard at the senior debt level. 'the renes. At the axl of luith 1989 aixt 1988, the sesent n>v.

GEIS pinfolio at Iksemler 31,1989 was widely di*

crage on financing incivables was equal to 2.63% of the Iwnni theoughout the Unital States arx1, to a in.ses rn civables balancrs outstarxling. 'the iclationship was J

degiec, Canada aix! Europe; it indudal a number of dif.

niual to ?.59% at the eixl of 1987, ferent irulustrin; arxiit consistuiof approximately 100 Although the nature of GE Capital's busirwss is suc h that J

anuunts aggregating appioximately $8.3 billion. Rnriva-an nonomic dow nturn or inneasing level ofinterest rates l

ble lossn froin these transactions have averagal alwiut 1%

(vuld result in financial stiess to custoners, managenent of investnwnt over the pist three yean anxi have tren lelievn that the divenifini natuir of the pinfolio affords muc h nune than offset by the ajuity gains that ate an reauinable protation against any material regative im[uct l

integral jurt of 1.80 financings.

on GEIY op rating results or finamial cc Klition, in niin-l Also indudalin GElW tine sain and kians were $8.8 mary, GElW financing rativabin at e in gcxxl corxlition billion investal in appruximately 800 real estate hiansair-arxl resen e pruta tion is appropriate, tually all for c omnwnial pro;wrties. Typically, suc h k ans eP

@ WWHinduding niuipurnt were structural so that existing cash flows more than cov-lemi ni others) aggregated $ 15.6 billion at Ikt emler 31, l

ered debt sen ice aral weie secural by fint rnongagn 1989, up $2.0 billion from $ 13.6 billion a 3rar earlier. G E's j

largely on multitenant office buildings and apartnwnt py, ny, plam mxt npipnx nt unmists of investnwnts for projects. inans for larri anguisition anxl developnent ami ts own pnxluctive use, whereas the largest element of project comtruction were not an impirtant pan of the GElY investnwnt is in niuipment that is providal to thini pinfolio. At 3rar-c xt 1989, die [xirtfolio was gnigraptu.

k s on ymig k a s. W tails h m prio of inn st.

cally balaruni with investnwnts throughout the Unital nem can h fourxlin note 18.

Stato arx1, to a muc h lener extent, Canada atut Europe.

GE's uital eqerxiitures for rew plant atx1 otuipriwnt Rnuvable hases on (umnwicial cal estate kiam have during 1989 woe $2.3 billion, bringing du uital of the last averagni sigtuficantly leu than 19 of investnwnt over the five ycM xduding the unusually large addition by anlui.

past ihne yeats.

sition of RCA in 1986) to $10.3 billion. Of that five year Investnwnt m financing leaws reac hal $ 12.8 bill.u m at u>tal,32% was to increase capacity; 25% was to increase l

the erxl of 1989, up fium $ 11.1 billion at the prior year idmtivity 12% wm m supin in w bmiress start ups; end. Details of these balances can le fourxlin note 16.

14% wu m se@ue aixi n.m w oldequipnx m mrt 17%

lhe alhiwaru e for h run daluctal in aniving at the twt wm for un h odu r purpiws as impoving R&D facilities balance of $41.8 billion increasal Irum $972 million at the ggg gg mxt env ninmental piutection.

c xl of 1988 to $ l.127 billion at Iksemler 31,1989.

GEFS added $3.1 billion to its equipment leased to oth-Includal woe add,n,ons by c har ging olerations ($527 rm.l-en in 1989 Anna p m anninimion wm W7 minion.

i lion in 1989, $434 million in 1988 anxi $290 milh,on m 1987) and wiite-off s of $-120 million in 1989, $291 million in 1988 atxl $ 17 I million in 1987. Overall, net loss experi.

39

l 1

o /ntangiWe aurts aggregaint $8.8 billion at Ikseinber Gl l'S' earning awets. Gl l'S' < orn} nnite inter est rates w ere j

31,1989. 't he in.@is it) of this ainw.lidatal iotal in Gl:'s dmuswxt in n nrxxtion with the Statertwnt of 1:arriirigs. A intangibles, w hk h wese $7.0 billion at that date, ainut ihe targe pinion of Gl l'S%nowings is in the forrn of corn-sane as a 3rar earlier. 'the largest p ution of Gl:i tularuc nwiti d pajer ($30.5 billion arxl $24.6 billion at the nuls of j

(in inth gu alwill arvi other intangibles) arow ltoin the 1989 arri l988, tespnt vol)). hhnt of thinorninencial a(quisition of RG Gapvration in 19x6, Othn talarues pajer is intux! by Gl: Capital. Ituornnertial pa[wr has 1

were snainly relatal to anguisitions of ihn g. War rwri inaturities of up to nitw wuinths.1he average einaining l

< hernicah Inisincues, Roper Gorg nration, a 'IY station in tenns of Gl: Capitali annncitial pa;wr were 23 days a6 Miarni, lla., an ni CGR nxxiical lnisitwe, aswts.1he the erwh of 1989 atxl 1988. Average interest rates on Gl:

j iru reaw in 1989 iru hulni tornpletion of ihng Wanwr Gapital'nuinnwicial ju[wr weer 8.81% arx19.32% at die j

valuations.

erxi oi dumees;usthe >rais. *Incrage,* the relationship Gl:1 S' intangible auets were $ 1.8 billion at the erx1 of of debt to niuity capiu 1,is ex)xxtnl by investors to tie 198(l unniuint with $ 1.6 bilhon a 3rar railier, princi ully intu h higher in a finatuial enterpriw than in an irxlustrial

-l i

i l

relin ting the 1989(ornpletion of the auluisition of I GIC enter juise. Gl; Capital's ratio of debt to nguity was 7.80 to Cor guration.

1.00 at the erx1 of 1989 currijural with 7.67 to 1.00 at the i

j e Allottwr auris totalnl $9.4 billion at ikxcinber 31, ext of 1988. This elationship of debt to niuity capitalis i

j 1989 < oin;urnt with $8 0 billion a 3rai cailier. 'lhese l*lict"I to te sourxi arx1 is appropriate for a highly raini irulude a wide varicty of itena auletailalin note 20. Gl:1 finarnial services enterpiiw.

]

all other aswis incicawxt $ l.1 billion dusing 1989, princi.

Notes 21 arxl 25 piuvide details of short tenn arxllong-lully because of rww irnestinents injoint senturculaui.

tenn hnwwings.

j hnt as *am iatal c onipanies."

"d i

e Totalhormwings on a nonsolidated lusis aggiegatal

$53.3 billion at ikxnnter 31,1989(ompaint with $45.5

'the Statenwnt of Cash flows (page 30) einphasins the t

j billion at the nul of 1988. Ilowever,innowings inust be analysis of cash flows fioin three broad categories - opn, j

knLnt at segurately foi Gl: and Gti'S. The inajor debt.

ating tutivities, investing activities arxl hnaixing activities.

j rating agencies evaluate the financial anxtition of the enti-Inasrutu h as the cash inanagenent activities of Gl: aral I

ties wiuratel) becauw of their distinctly diffetent busirwss Gl:l'S atc wp, rate arvi distinct, it is inor e uwful to review

< haracteristics. Using criteria appropriate to cac h, those the w[ urate cash flow statenents than the(unsolidated I

inajor rating agencienontinue to give top ratings to debt statenent.

of luth GE: arxl Gl:l'S.

I Gl:i total honowings weir $5.6 billion at the eixi of GE t

1989, a dn : case of $518 :nillion frorn the crxl of 1988.

Gl:1 cash arxl niuivalents aggregated $ 1.7 billion at the

[

Inng tenn honowings of $3.9 billion were down itorn erxl of 1989, slightly lower ($74 million) than at the erxl of

)

$1.3 billion a year earlier, arxl shon tenn tunuwings 1988. During 1989, Gl: generated $4.8 billion in cash Irorn i

dnlived to $ 1.7 billion f torn $1.9 billion. 'Ihe cunent pcu-its operating activities. 'Ihis provided resounts to invest tion of long-terin innowings indudal in shon tenn int.

over $2 billion in rww plant arx1 njuipnent; to inale autui-rowinguiroppnl ainut $ l. I billion during 1989 reflecting sitions, the principal ores of whic h injuirnt cash outlays of inainly inluctions elatal to debt involving the 1986 angui-sition of RGA Corporation. Ily the ervi of 1989, all debt of RCA Cor puation that had twen auunxxl by GE: had tren

((f retir nl. Gl:1 total debt at ihe nvi of 1989 equalal 21.0%

W'"

of total capital, or a daicase of 3.9 points Iturn 24.9% at the end of 1988. This elationship of debt and njuity capi-i talis sourxl arviis well within the range of what would be es[ecinl of a strong irxlustrially oriental finn, l

Gl:1 S' totalInnowings wne $47.9 billion at Ikxcin-g ter 31,1989, of whic h $35.7 billion is due in 1990 arxl

$ 12.2 billion is due in subsoluent years. 'Ihe unnpar able g

arnounts at the nxl of 1988 were: $39.6 billion total;

$28.7 billion due within orie yeas; arxl $ l() 9 billion duc

~

~

y tw)urx1 that. 'ihe incr eaws were to supjurt the growth in o

19H5 19H6 i987 ipkk i989 40

1 i

i.

i I

l thn(St $800 rnillion; to inhwe total debt by $5(K) rnillion; Retum swi chere emners'opsity I

j trxl to guy $ l.5 billion in dniderxis to share owrwis.

m j

Operating attivities are the guitxipal usurte of GE's cash fkiws. Over the just thn e 3ran, o;wrating activiths have is j

pcnidnl nxer thr.n $12 billion of cash. Prirxijulon-j i

j going applications snuaHy are to irntSt in tww plant atxl

_,,_i,9 npiijnient ($5.8 hi!! ion total mer the last theec yean) arx1 i

to puy disiderxin to shair owrwts ($3.9 billion total over the

!d l

l last thice yean). Ex}wixlitures for aww plant arxi opiip.

nwnt are again exixx1nt to be in the $2 billion phn range

_11 f

for 19(.KI, arul divkleixh are ex;xttal to ince rase with W"

can ings.

i llauxi on past gri fonnaru c arwi cun ent expstations, in

<ombination with the financial flexibility that nurus with i

j dw higlest cinlit ratings, GE is in a wiutui paition to non-g,, g 7 f

tinue snaking hing-tenn irnestnwnts for future growth, 1

in Novernher 1989, GE's Ikard of Diiecton authon. int j

J ir cluding sekstive anguisitions arul investnents injoint uistures. 'Ihe five->rar share eguns haw prograin dis-die repun hase of up to $ 10 billion of the Cannpany's nun.

l i

f cussnt se[urately on this [uge is a direct sesult of GEbolid

""'" 5" " k "" N ' "" I' )*""

"5""d'"'I'*0""""'

I

• O M ""bO N* "U"O" * *E" K

i fmancial uvxlitkiri arxl cash gerict atirig capaldlitv.

long tenn i. hare ownwr value. !! aux! on the financial arxl l

OEFS nunpeddve lxsitkins of the Gompany, its debt capacity i

arxi die cash genwnitirig (hanitteristics now lnesent in its GI.JS, guincilul wiunt of cash, finarwing activities that Ley bmiix m s, umngenn m lx liens GE has the flexibility a

i j

involve continui: g rollover of short tenn tuinuwings arxl u> continue innrasing divideixls in line with cannings, to

)

appropriate ackhnon of long tenn tonowings whh a rea-inaintain a high degire of internal reinvestriierit, to rnate i

j mnable tulance of maturities. Over the inst three yean.

s, elative quisitionmimpk nwntary '.o existing busirwss i

1 GlJS outstarxting lxwrowings with 9(Lday or ksi matun-

- atxl also to repurt hase a significant amount of stoc L.

[

tus has e, creaseci a total of $ 14.3 billion. New lonowings m

Sm h n pun b s will irsuit in higher cantings Iwr sharr j

of $26.0 billion having inaturities longer than 90 da);s anxl retunn on ecluity than woukt otherwise tw the case.

I

]

were added during those yean while $21.5 billion of suc h

'the repma da is desiN to tdk dbk, Shu s l

longer ulnn tonowings were paid of f.

will be gie idd'mxh Inon combination of free

)

GlJS [yrincipal application of cash has tren m..invest-cash Ik>ws arxl new lonowings while keeping GE's debt to-I j

mg actmues to grow the busiruss. Of the $27.1 billion capital ratio in the 25% range. Shouki worki nonomic of rwt investments by G1,15 over the past three yean, corxlitions, a ritajor actjuisition or odier cirttirrntaiwes war.

l

$ 17.1 billion was devotal to additional financing nx civ-nmt, the C4nnpany woukt moclify the pace atxt dirrierniori l

ables. Other pnna, pal mvestnwnts during these yean were dde plan un mimain GE's udid fimhd pidon.~%

i

$2.2 billion to anjune tww btnirx sses as GlJS exparxis un activines arxl $5.6 billion fos rww equipnent, which n n punMQm w n viewed with debt niting agencies, do cunfinnni GEViriple. A debt rating.

mainly ha lease to othen.

During the last six weeks of 1989, atout 3.8 inillion

[

, Ginh uxxl for rww innt$tnwnts in exnSi of cash pro-sbu s were rean uival at a nat of $236 million.

[

vaktl f nnu ackhnonal tonowings has been pnwidal inainly by gerenition of $7.8 billion of cash from operat-ing activities for ihe >ran 1987 1989 arxl f non issuance of l

$600 million cumulative variabic prefenni sun L by GE Capital in 1988. G El'S' cash avul niuivalents balance has i

remained relatively stable throughout the pericxt - again in Leeping with its busirrss enission.

In summary, baux! on past ;wr fonnance anxi cunent cxpxtations, in combination with the financial flexibility that comen with exc ellent cintit ratings, gel'S is well pai-tiorux! to coritiriue giuwing its asx ts atxl to intxtuc e a gml nue of retuin on GE share owrwis'investnwnt in GElX I

41

l Alanagements Discussifm ofSelected Financial Data i

l

$clected/neencialdata surntnarires on the oppnite page un h at waste water treatnwnt phints, grourgl water snoni-wune data fenguently enguestnl ainut Gerweal1. Int it toting devices, air strip [wn or segiaiaitois,arx1iruirie ators Onupa,W atu! pravides a reand that rnay be uselut for at new arxl exiuing facihrienonstn ted or alterniin the l

icviewing trervis. The data are dividol into that sutions:

ruinnal niur w of in iren. Qinsistent with Gl?s polic ies l

up}wi potion-convihdatal inionnati<in, rniddle pn-strening erwisonnwntal tesp nnibility, average annual tion - Gl: data that tefint var ioin a nn entional nicasur e-c apital expeixtitures for ruintenuxlial projects are pres-i j

nrnts ior irxlunt rial enter pr hes, and lee e pertion -

ently expecial to range hetwirn $ 150 inillion arxl $200 Gl.lh (Lita that iefint Le> infunnation aral ratios pesti-rnillion m er the :wxt two yeais. The prinopal eawern for l

)

sent to hnatwial wn ices.

this expxted ina case f unn existing levels are new oi l

GD folairneanh and dewlopment esperxlituren were a exp oxini gnogiann to build ca nuutily nianuf aunting l

nxord $3.931 bilhon in 1989, up 9% ieom lim 8's $3.601 P""#S"5 "' they can use alteniathe metixuls that wil!

billion. Of the 1989 exlwixtinutes. $ l.334 billiori was frorii "E I" '"I"U"E WO*"*dI *** d dd"R Gl?s own furnis, an inneaw of 159 fnun 1988's $1.155 C"""I""'

bilhon. I Alwrxtit ures f nun iuinis providal f roin untomen s Tiw Qinipany also is inniln d in a sir.ahle numtwr of j

i unainly the U.S. gmenunent) wetc $2.597 billion in 1989, tenustial autions to elean up har.ardous wastes as inpdtnl l

or 6% nune than $2.446 billion the year before. Aiinalt by fednal arul uate lawt Suc h statutes rnjuire that i

I:ngirws arul Aerospxe anount for the 1,u geu shair of

"*ponsible panies fuixt tenedial actions regaullen of Gl?s 11&ll expeiulitutes f:om Imah Qimpun aixicus-Iault,legahty of o iginal dis; mal oi owmshijnif a dis-

[

I j

tonn't f utulA ()thei sigidficalit exlwlulituies ol Onnpany b uN U'

$1DI NEIN" EUI I f uixh weie foi Malical Spiems, Plauit 6 aial Ibwer

"'"'"lial c leanups aixt telated Sttulies stunjiaint with

Sygems, aEinuximately $18 million spent for suc h ntrynes in

)

i 1988. It is in esently expx int that t enwdial cleanuin arxl CD. fotalbac Al(g of finn unhlini oulen at the eixi of 1989 5

f telatal studies will inguiu average annual ex}wixlitures in j

was $30.5 billion. Oulen constituting this bac Llog ma) be g, ta of PO minim m 02hdHiom4 mu mo

[

1 canc eled or defennlin custonwn (suidect in cenain cases to cancellation genaltics). Gunnents on unfilled unten

}y;' difhcult to estimate seasonably the ultiinate le ei s

foi busirusses with ielatnely long inanuf actur iiig r><les

..g, g

gg g g, gg g can ir foutui,m the discunion of lixtustry Segnwnts, tainties, including uinenainties alout the status of law, whic h irgins on page 34. About 46% of the 1989 total

'"E"

"" E "9" "' # "*"* E' I

Infonnation relating to irxlnu."lual dies. Subytt to the f unhlied onien is sc hedulnl to tw shippect in 1990 with i

nunt of the remainder to tw shippxl m. the two years alter 4

E" "E'

""P#"I**""E*"*"I'*"""'

" '"h*"'

that. For nunparison, ainut 49% of the 1988 backlog was L

l expected to be shipped in 1989.

ex[wn nues and innahal adions m annph wnh tie inesent laws g(nendng ensinnunental pnnection wu not i

Unhlied oiden for exion of all types of pnxtucts arut senic es Irom the United States were $9.9 billion at Da em-have a rnatnial eHnt ujon in caphal ex;wnchtuns, evn-j "E"" """I#'

"I iw 31,1989, up from $8.2 billion the ) car twfore. The q

lac Llog of Airciaf t 1.ngine onien is a major jurtion of the exput bac klog, but significant increases were tenndal in Consolidated employment et year end

(

1989 by Aennpace aint Ibwer Systeins.

On thousands) i i

inflation has not tren a signincant factor in amolidatal SM j

caniings giowth in inent years because of the relatively I

nuulest rateof priceinneasoin thenonomicsof the M

Uniini Stain aixl of the principalioreign countain w hoe l

l the unnpany has oiwrations.

=

m i

i Regarding nwinmmental matters, the olwrations of nhe n,n j

Onnpany,like thme of other unnpmies engagalin simi-las busivu wn, invoh e the use, dispisal arxi c leanup oi sub-l[

n l

i ua,x n,egutoni unan emiminmemai pn<ntion ia.,.

j in 1989,Gl; had capital ex;wrulitures of alunit $110 riiil-13 lion ior pndects telatnl to the environnent. The compant-ms ms int im me i

ble annount foi 1988 was alnut $70 million. Thne amounts exclude experxliturn for ierruxlial su tiorn, w hic h are dis-cuunt on this page. Gapital experulitures fin environnwii-j tal put p nes has e includal pillution umtiol devic es

Selected FinancialData ui,,ua, s..ennt, ie nm..n,. l...,ha,, a,n..

it, i,, den.,,)

n.89 n.s8 n,87 n,8s n,s.,

General Destric Company and consolidated eNilletes Rnenues

$ $4.574

$ 50,089

$ 48,158

$ 42,013

$ 32,624 l'.arnings lefore extnuitdinary las and eurnutative offnt of anountingchanges 3,939 3,386 2,119 2,492 2,277 Net caniings 3,939 3,386 2,915 2,492 2,277 Divideruh ckstain!

1,537 1,314 1,209 1.681 1,020 l'.anuti on average share owners':quity 20.0%

19.4 %

18.5%

17.3%

17.5%

h shaic Net earnings 4.36 $

3.75 3.20 $

2,73 $

2.50 Divideixh chtlaint 1,70 1,46 1.32 %

1,18%

1.11 %

St(x L prke nmge 64 % 43 % 47438% 66438% 44W33% 36427%

'listal assets 128,344 110,865 95,414 b4,818 49,123 inng-tenn lxinowings 16,110 15,082 12,517 10,001 5,577 Shares outstarxting-avenige (in thousarwh) 904,223 901,780 911,639 912,594 910,762 Shaic owner anuunts-average 526,000

$29,0(K) 491,(KK) 492,(KKI 506,(K10 i

l'.rnploym at ) rat eixl Domestic 243,000 255,(KKI 277,0(K) 302,(KKI 243,(KKI l'oreign 49,0(Kl 43,(KKI 45,000 71,(HKl 56,(KKI listalernployees

_ 292,(KK) 298.0(Kl 322,(KKI 373,(KKI

_ 299,0'K)

OE data Short-tenn honowings

$ 1,696 $ 1,861

$ 1,110 $ 1,813

$ 1,297 tong-tenn lxinowings 3,947 4,330 4,491 4,351 753 Minority intnest 283 228 190 189 126 Sharr owners'aguity 20,890 18,466 16,480 15,109 13,671

'liital capitalimested L26,816 $ 24,885

$ 22,271

$ 21,462

$ 15,847 Return on average total capitalinvestal 17.0 %

16.4%

14.7 %

13.9 %

16.2 %

lionowings as a penentage of total tapitalinvested 21.0 %

24.9 %

25.1%

28.7%

12.9 %

Curtrnt assets

$ 15,671

$ 15,499 $ 15,739

$ 14.288 $ 12,546 Current tiabilities 13,988 13,419 12,671 11,461 8.919 Wo: Ling rapital

$ 1,683

$ 2,080 $ 3.068 $ 2,827

$ 3.627 Propeny, plant arxi nguipnwnt additions (othei than by acquisition ol RCA)

$ 2,251

$ 2,288

$ 1,778 $ 2,042

$ 1,953 Yeat erut orden bac Llog 30,473 27.205 22,737 23,943 23,117 t

GEFS date i

Earnings belcire extraonlinary loss and ruinulative efhrt of auuunting change 927 $

788 $

$52 $

504 413 l

Net eaniings 927 788 1,008 504 413 l

Shair ow wr's equity 6,069 4,819 3,980 2,994 2,302 l'anuti on avenige sharr owner's equity 17.6 %

18.0%

18.0 %

19.7 %

19.9%

l Ilonuwings Irom othen

$ 47,905

$ 39,593

$ 30,885

$ 23,397

$ 10,393 Ratio of debi to cquity(GE Capital) 7.80:1 7,67:1 7.98:1 7,83:1 7.89:1 l

'liital assets of GE Capital

$ 58,696 $ 47,766

$ 36,644

$ 27,970

$ 22,469 Rese:Te coverage on Imancing rnrivables 2.63%

2.63 %

2.59 %

2.59%

2.57 %

insuntnce premiums written

$ 1,819 $ 1,809

$ 1,729 $ 1,704

$ 1,092

[

Scrurities bruker dealer carnal income 2,897 2,316 2,491 1,176 i

i i er In,106 I alNI 2b to thf (HilMdidett0d lInafuiaI Statrinetitt Iu! inlot'inatioli mIKnut 1987 artounting ( haligC6 alKI 0%ttauf dinat) lohl and nutt 2 fut n

infor nation about criain acquisitions mixt related niatte ts. Iri additiori. ReA Gorlunation arul Kiddes,l'entnuly & Cai were atquired in, lune 19M6 *Gl'" numns the pre 19kN basin of conudulation an descritaxt in note I to the cunudidated fmatuial statements; *Gl.1 S" nu ani General i

1.lectsit l'inaru ial Servu es, law. afkl all of iin athliatea und unun iated iompanien. 'I tansactions lu tw con Gl: arul Gl.1 % has e been climinated Irom l

the "conudidated data." Shate data reflect the 2-lur.1 stan bplit in April 1987.

i 43

Management \\ Discussion ofFinancial hponsibility

'the financialinforination in this report,itu huling the KPh1G Prat hlarwk L provide an otsntive,itulepcixlent atulital financial statenwnts, has been prepaint by rnan-review of enanagementhliv har ge of its obligations ictat-agenwnt. Picluration of financial statenents an(I related ing to the iainass of reixined ope ating irsults arnt hnan-data invohes estiinates atxi the uw of jtuignent. Auount-cial(orulition. 'their relunt for 1989 ap; cars on the bg principics unnt in pre;using the hnancial statenwns op5xeite page, ate thow that are gerreally sut cl ital iri the Utiital Stat (5.

'the Atulit Cairranittee of die Ikuid (anisistirig solely

'lhew principles aie consistent in inost im;xinant tespnts of Dirntors isom outside Gl:) rnaintains an ongoing with statulards inuni to date by the Inte national appraisal-on behalf of shave owness-of the effnthe.

Anounting Staixtards Cannminn. Where there is no russ of the i xlepeintent auditois, the CennpanyhtafI of single $lxtihnt auounting piinciple or staixiani, man-corixitate mulitors arul management, with res[xrt to the agenwnt inales a ( hok e f rom t rawmable, au cptni alter.

financial repnting pin cu, aixt of the adnjuacy of inter.

nath es, using snethwh that it telievenue pnulent for nal financial nmtroh. 'the comrnittee aho reviews the Gerwral l'.latric Cennpany arul ituunsolidatal af hiiates.

Cannpany's aaounting policies. cornpliaiue with Ley poli.

To safeguard Cannjuny anet5, it is iminrtant to have a cies, atwl the Annual Report arut proxy inaterial.

souixi but dynamic system of inter nal financial umtioh real pux nluuS that tulances twswfits arul costs. One of the Ley elenwnts of intenul financial (untroh has tren the g[

C4nnpan)htu ceu in in1uiting, selecting, training aral

-7' developing proleuional finarn ial managen s. 'lheir iesiumsibilities itu lude implenwnting arat overwecing the John 1: Wek h,Jr, financial (untial sptem, reputing on managenwnthtew-Ghainnan of the thud arvi tidship of the aucts entrustal to it by shaic owiwis, atxl Chief F.secutive Ofh(cr perIorminganurateatxt projet maintenanceof the auounts.

hianagenwnt has long inognient its espmsibility Ior S

(orglucting the af f airs of the Cennpany anxiits afhliates in Dennis D. Damnwnnan cn ethical aint urially respmsible manrwi, General 1.ln.

Senior Vice President tric C4nnpany iulnlicatal to the highest starxlards of I'inan(c integrity. Integrity is not an occasional rajuirenwnt but a umtinuing coinmitment that is refintnl in Ley written l'chniary 16,1990 pilicy statenwnts. 'Ihese (over, ainong other sulsats, envitontrwntal protation, pitentially conflicting outside busirwu iriterests of criiployns, coriipliaru e with arititr ust laws, aixi proict dorinstic atx1irnertiatiorial busi wu pt n.

tkes. hianagenent imists on inaintaining the highest stan-daids of corxturt arx1 practices with respit to tiansactions with the UnitMl States governrirrit.'lhere h (ontirtuing einphasis to all ernployen that even the appearance of impiopriety can envie public (unfiderne in the C4nnpany CrKl krl dw gover tirrtent juoCttreliwilt pt(xtu. Origoirig nIncation, nunmunication arul review programs are desig:K41 lo cicate a strorig (orrlpIkaru e entitortirwnt a:MI io inalc it (learl> urule:Staul that deviation f rom Cenn-juny pilicies will not he toiciatnl.

l u

hidefmident Auditws' Report i

Te there Owners and Board of Dirooters of General 86estds Company We hase audital the acxurnpan)ing stateprent of hnarxial position of General I;Inuic Cannpany arxl ninwilidatal afbliates as of tkxrndwr 31,1989 arxi l98H arxi the irlatal statenents of earnings arx1 cash flows for eac h of the >rarsin the three year peri <xt cixlalikvernier 31, 1989. *Ihese convilidatni hnancial statenier ts are the respinsibility of the Oxonpanyt inanagnnent. Our respin.

Sibility is to expr en an opinion on thew consolidaint financial Statenwnts lusal on eut audits.

We curxiuctal our audits in anunlan(c with getwrally au eptnl auditing starxlands. "T how starklanh rniuire that we plan aixt per lonn the audit to obtain reasonable assue.

ante about whethen the financial statenwnts air free of snaterial inisstaterix nt. Ari audit inx-hules exarniriirig, ori a test basis, eviderar suppnting the arnounts argl diwk>-

stues in the financial staienents. An audit alviincludes awessing the aucunting priruiples useci aint significant estiinates inade by rnanagenent, as well as evaluating the on rail financial statenwnt presentation. We telin e that our audits provide a seawnable tusis for our opinion.

In our opinion, the afinenientiorxxi financial statenwnts cppearing on pages 26 31 arxl 46 68 persent fairly,in all mateiial tesysts, the financial position of General 1;latric Ccunpany arxl consolidatal afhliates at Ikreinher 31,1989 c nct 1988, arxl the r esults of their operations arx1 their cash flows for eac h of the yean in the thice->rar pericxl ergini Ikxcintwr 31,1989,in conforrnity with getwraHy aneptal acrounting piirniples.

As diwussniin ruite I to the consolidatal finarnial state-nents,in 1987 the Cennpany changed its nwthcch of anuunting for inconie taxes arxi oves head inurded in inventory. We concur with these aucunting (hanges, k b W f& Ph4sedsA KI'MG lYat Marwick Stainlind, Centarticut l'chniary 16,1990 45

c Notes to Comolidated Financial Statements one.

n.e. J son wy.e s6,nm noennN Pos.6 Subgest lege Connellection and Anwielal sistement presennetlen Annanting Ib!kies (ruite 1) 46 Cmolklethm. The <nnvilidated finarxial Statenwnts rep-Anuunts p.iyable (note 22) 60 tenent the ackling togethei of all companies in w hk h Gen.

Anjuisitiorn (suite 2) 49 eral 1;kstile Gimpany divertly or isntirnth has a m@wity Alkswatue for Insses on Iinaruing Rweivables ownwaship or inherwise unatols ("athliatal c ompanies").

(rune 8) 53 Prior to 1988, results of financial 6ervkes afhliates-the ikirniwings - !ang Tenn (inne 25) 60 principal ore being Gerwral Ekstric l'inancial Sen i< c6, Ikinowings - Sluin Tenn (note 2!)

$9 inc (GITS oi GE I inancial Senices) arxl its athliatal unn-Onh atni liguivalents (note 11) 55 panics - were included on the aguity hatis as orw tire iii Gash Elows - Supplenwntal Infonnation (note 32) 63 total earnings atKi rwt sissets. This was )ictistissible ungles-Guninitnwnts aint Gontingent 1.iabilities (note 31) 63 aucunting rules in eficci befor e 1988. Ikrauw financial Inconw Taxes - Delennt (note 27) 61 henic es o}crations aic 60 dificicut in natute f som atni Inconw Taus - Provision for (note 10) 54 essentially unselataltoopenitions of tahe Gl;busirwsus, Intangible Aswts (note 19) 58 managenwnt telierni that fmancial htatenwnts weit nunc Intriest aiul Othe Financial Gharges (note 7) 53 uixin staixtable if GlTS'statenwnts weie 6hown $cpa.

Inventories (note 15) 55 s ately, it shoukt be einphasinxl that, urxler twith current hla:Letable Securities Ganint at Ost (note 12) 55 arxl priot pnxuluies, consolidaint twt earnings arwl 6haic hlar Letable krutities Qinini at bla:Let - GlTS ow wes'nluity asc the $;uie for all wrkids luesental.

i (note 13) 55 llowever, substantially inose detail is intuired uixles the hiinority Interest in Ec[uity (note 28) 61 cunent 6tatulant than urxler ruks pieviously in elin t.

Other Assets (note 20) 58 Also as a result of this c hange, the Gunpany adoptal an Other up,ts arxl lijenses An: rued - GE (note 24) 60 unclassifini ninsolidatal statenwnt of Imancial position.

Other Inconw (note 3) 50 hianagenwnt believes it is important to guesen e as Other 1.iabilities (note 26) 61 much as [xasible the identity of the principal financial data lYnsions anxi Other Retirce ite wfits (note 6) 52 and relatal nwasurenents to whk h share ownwrs atxt Pio;wrty, Plant arxl Frpiipiirrit (note 18) 57 others have txxone a(rustoned over the years. Accord.

Quanerly Infonnation [unaudiini] (note 35) 68 ingly, consolidatal financial statenwnts aixl notes now are Ra civables arx1 P.iyabks - Ilroteis aixi Deale:S ge wrally prescritalin a fo:Tnat that inchules data groulxtl (note 17) 57 hasically as follows.

Rncivables - Gunent - GE (note 14) 55 e GE-this is essentially the pre 1988 hasis of convili-Rarivables - Financing - GITS (note 16) 56 dation except that it includes some very $rnall financial Revenues fnun Openitions - GITS (note 4) 51 senices afbliates pr eviously not cunsolidatal. The effect of

&rurities Sohl but Not Yet Pun hased (note 23) 60 transactions among companies within this group has been Segnwnts-Gnigraphic (note 34) 68 eliminatal. Where apprupriate for clarification or ernpha.

Segnwnts - Irxiustry (note 33) 61 sin, puticularly in lla ruites, this group of crahies alo is Shaic Owswif lijuity(note 29) 62 n.fennl to as "GE except GlTS" St xk Relatal Infonnathin - Other (note 30) 62 e GEFS-this affiliate owns all of the unnmon st<x L of Supplenwntal Qat Details (note 5) 51 Unusual ligenes (note 9) 53 Gerx ral Electric Gapital Corponition (GEGG or GE Gapi-tal) a xt of Ernployers Reinsunmcc Girporation (ERC),

arx180% of the 6t<xk of Kkkler,lYatwidy G oup inc, (Kidder, lYaixxly). These affiliates arvl their t es;xxtive af filiates aic conmlidated in the GEFS columns with the of fu t of trans:utions among thern eliminated twline the (unsolidated pnwentation.

(

46

~

b o Commlidefed-thew (olumen teptewnt the adding atxt 365 days. GifS' rash atul npiivalents, whi( h itu huln together of Gl;atul GElh floweget,it is tutosary to onl) t ash utkl very short tenst (only a few day s'inaturitin),

tottune the ofIts t of tranoutions betwn n Gl; ext t pt is tiot afin tnl by diik Ituxhf K'atiori.

Gl'I3 atxl Gl i S to arrive at a c onwilulatal total. *lhe

/Wons and O'r Mimf bS, Ahountig plici(s

'cliininatiorn" uwd to anive at thew unmlidatal totals gn gg.tniorn arkt odwt utitenenitriefin ate disunintin i

are suinthatimllelow,

,g,u 6.

El6minations Innanc amos, SI AS No.tki

• Aucunting fot ituonw (in unlimnu 11* 9 19hk 1967 1 asn" wan innl by dw I'inmu ial Anuuntitig Statxlants Stelement of Ewnings

!kiartiin linettdet 1987. A npiiteinctit of SI AS No.(Ni hannof gotxh

$ (12) $

(h) $

is that delet1nt tax liabilities of aucts at the eixl of eac h sainof nenin 00)

(26)

(8) gg.ricxl te deteiminnt using the tax iate ex}ntial to le in 1: i6 if ( l.1 %

(

(7 )

($$ )

n1 w en taxes ate aduah pa or Inovend Amos LHE ), utglet SI'AS No. 96 ruln,ituottic tax expenw ptovi-I (il.lh inenun fioin operationn (4k)

(34)

(291 sions will itu1 ease et dectcase in the Minw }ct i(gl in u hic h lotal to entwa (1.n21)

(h5H) t$k3) a ( hatige iti tax :ates is enacted. Pievious ruin inpilt nl Gnt of gmh wikt 02)

(5) providing delet1nt taxn usitig ratn in ofin t wheti the tax Ont of nen u n noki (20)

(26)

(8) anet of liability was I twt teroided without hubutpictit in sulothet hnarwint in@Mnu nt Milely for taviate (hangn (evept with teslxTt odwi enn mi nie.nse O s>

00) 03, us in enignnea**

' Intal sosn aixl exlwnwn 064)

(in)

(31)

I""'nfortnity with SI'AS No. tgi trainition ndes, the l'atnings twfoie irnont Gunpany clntnho adopt the tww itKonic tax autounting duting 1987,The ruinulative efhrt tojanuaiy 1,1987 tasn, exu aoidinan item and nunulative clint of

($577 tuillion,ituluding $518 inillion for GITS)of the auountingihangn (927)

(788)

(552) thange ;, gg,wn in the 1987 cohunns of the Statenient of ist aordinat) 6tein 62 Intone tas uuuunting b'"'I"E"'

change (hik)

Not eatnings

$ (927) @) hl.(KIN)

GE tocountligpolicies Statement of F6nanolel PoWtion Sales, A kale is inordal when title pawes to the custoiner

(;l curtout incivahics

$ (242) $ (330) or when services are per fontux! in auvidatu e with Gl.) h huancing meivahin 0 07) contracts.

Othn GlTh incitables (380) 0 07) liivnttiwtilin (,1 i S (6,069) J4.819)

Intysfenent tas credit (170). The 11C was regealed, with

~Iotal awets

$(6.691) $(5,363)

Mutie trainitionalexceptions cfhttiveJanuary 1,1986.

shon icnn innowings

$ (236) $ 070)

H"*"n, hn hnancial n3xuting purposes, GE has Auonnts payable (379)

(264) defentxl taugnition of the 11C rin h year atri colitituies long tenn inntmings (2)

(110) to ainortire ITC as a taluction of the provision for itxonte All othn liabilitin (5) taxn over the livn of the Iacilities to whic h the ernlit Totalliabihtin (622)

(544) applin.

Gilh ntuit)

(6.n69)

(4.k19)

Totalliabilitin aint niuity g"691) $(5.363)

Innnkwies,11e values of nunt inventorin are detennitux!

on a last in fitwt out, of 1.110,lunis atxl do not cuntl g

Net t arnings (olriating n aliable valun. Elh cttre January 1,1987, Gl. ( hangnl auivitin)

$ (221) $ 03) $ (213) in anuunting pux edot a to include in inveniery (crtain invnting auivitin 179 07I) 243 Inanulacturing ovet head costs pt eviotnly (hat gni dit cetly l'inancing auivitin 42 184 (30) gqg.ng., lin nuut significant types of snanulacturing T"tal I.-

$Z l overhead iticludal in inventory as a inuit of t he c hange att: dept eciation of plant atx1 njuipnwnt: In mion atul Rnults of aunpanin in whic h GE or GlTS own$

other tenefits of nianutacturing employees; atxt (enain letween 204 atxt 509 ("associatni cultipatiies") ate pnglig3.t elatal engitu eritig ex[wnx s.11a Onnpativ includal in the financial statenwnts on a *one line" h.nis.

Irlievn this change was preferable because it ptovidb a Cashfows, During 1989, the dehnition of " cash atxl nltiiv.

tettet tintu hitig o? pnxhutiori costs widi tclated tevetuws alents" for GL cu ept GLl'S was nuxlifini to exclude mar.

Letable secuiities having original inaturitin hetween 90 47

r in telxr.ing olwicting resuhs. tr.accontaine with genci-materially diffe ent investnwnt banking revenues fium a:S act epted na>unting pri xiples, die niinuladve niariagestwrit fees, sales coricessioris arx1 utuler wr iting fees effect of this c hange for [wri<xis prior toJanuary 1,1987 are inurdal on settlement date. Advisory fee res enue is (1,28I million af ter puniding for taws of $215 million)is recorded when senices aie substantially completed anct shown sepanitely in 1987 'n the Statement of Earnings on the icvenue is s easonably detenninable, p;;c 20. Ther e was virtually mi elfect in om this ( hange on See "insurarn e af filiates" on [xige 49 for infonnation 1987 results after ieu rding the cumulative effert, with tes}wct to canxxl inconw of these businesses.

Depreciation, depletion and amortization. *lhe unst of Allowancefor losses onjinancing receineMes. GE Capital nxist manufactuting plant aini ajui))tiierit is depiniatal inairitaitis asi allowaiice for lowes oii fiiiaticitig i n eivables using an au clemtal riiedu x1 luised prititarily ori a suni-of-at asi annourit diat it telieves is sulfiderit to pr(wide tule-the->rars digits fannula. If manuf acturing plarit urxl quate piutection against future losses in the ixinfolio. For equipment is subject to abminnal nunomic unxlitions or small balance anxi tertain large balance rncivables, the obsolearnce, additional dqu eciation is punidal.

allowance for losses is detennined principally on the basis of actual eslwrie xe during the praeding thice years.

O_EFS accounting policies Funher allowances also are punidal to reflect manage-Methods ofrecording nvenues (" earned income"). Inconw nient'sjtuignwnt of additional loss lxitential. For other on all loans is canxxl on the interest six duxl. Foi l<niti irceivables, pritici}xilly dw larger loatis aixt leases, die omtracts on which finance charges are pinumputal, allow;mcc for losses is detenniswd primarily on the luisis of finance charges ar e defenrd at the time of contmet autui.

managenwnt'sjudgment of net loss lxnential, including sition. For loan contracts on which finance charges are not Simcific allowances for Limwn troublal accounts, prnumputed but are billnl to custonris, income is All anuunts or lortions thereof deened to be unu>llect-itcorded when carnal. Accrual ofinterest income is sus, ible or to iequire an excessive collection cost are written Irivial when collection of an account baumes doubtful, of f to the allowance for losses. Small-balaix e anuunts are generally after the account becon es 90 days delinquent, progressively written down (fium 10% when more than Financing lease inconw that indudes t elated investment three months delituguent to 100% when more than 12 tax credits aini r esidual values is arcorded on die iriterest inondis deliruluent) to irconti the balances at estimaint method so as to pnxtuce a level yield on fuixts not yet realizable value. Ilowever,if at any tine during that lwri<xt renweied. Unguaranteed residua! values induded in lease an account isjudged to be uncollectible, such as in the case income are based primarily on independent appraisals of of a bankruptcy, the remaining balance is written off, the values ofleased assets remaining at expimtion of the larger balance accounts are reviewal at least quanctly, lease tenus.

and those accounts that are more than three months delin.

Origination, commitment and other nontefurxlable fees quent ara written down, if necessary, to irconi the bal-ielatal to fuixlings are defenrd anxl suunted in canuxi ances at estimated realizable value, incoine on the interest method. Commiunent fees relatal MarActable securities. hlarketable securities of Kidder, to loans not expected to tw fuixled and line-of credit fees Italxxty are carried at market value with the difference are deferred and reconled in carnal income on a straight-between cost arxl marLet value included in operations.

line basis over the perimi to which the fees relate. Syndica-hlarketable debt securities held by all other G EFS affiliates tion fees air recoided in earnalincome at the time the are camed at amortiied cost. hlarketable equity securities related senices are perfonned unless significant contin-ofinsurance affiliates are carried at market value, and l

gencies exist.

unrealized gains or losses, less applicable deferred income Ridder, Pealxxly's piuprietary securities arx1 coinriuxii-taxes, are recognized iri equity.

ties transactions ar e recorded on a trade-date basis. Trad.

Securities purchased under agreements to resell (rnerse mg and investment securitles are valued at warLet or

,,p,,,g,,,,g,,,,,,,,,,,g,,,,,;,;,,,,gg,,g,,,g,,,,

estimatal f;ur value. Unrealizal gains and losses on open ments to repurchase (repurchase agreements). Repurchase contractual commitments, principally financial futures, and reverse tepurchase agiecments are treated as financ-l when issuni securities anxi forward contracts on U.S. gov-ing transactions and are carried at the contract amount at enunent ai d federal agency securities, arc iellectal m the which the securities subsequently will be resold or reat.

Staternent on larnings on a tnule date b;ms. Customer' quired. Repurchase agr eements relate either to market-transactions and the relatal revenues and expenses are able securities, which are canini at marLet value, or to reflectal m the financial statements on a se tiement date secudties obtained pursuant to reverse repurchase agree-basis. Revenues anxl expenses or; a trade-date basis are not enents. It is GEFS'lxilicy to take lx>ssession of securities subject to reverse repurchase agieements. G EFS inonitors the market value of the underlying securities in relation to the relatal receivable, induding accrued interest, atx!

requests additional collateml if appropriate.

48

i ikpreciati<m and amorthati<m. The cc:t of niuipment Note ] AcquisMons and Related Metters

{

leasnt to others on openning leases is anuntinx1, princi-pally on a straight line Imis, to estimattxt net kah age value GE s

over the lease tenn or over the estimatol economic life of Alglg, ugh their were a numlet of acquisitions aiul digxisi-4 the niuipnwnt. Ikpits iation of propert y atxt equipinent tions dming 1989, the larger transactions involuxl com-j for gel'S' own use is inuidal on either a num-of-the-pletion of arrangenents for sevenil joint ventuirs.Timse yeatuligits or a sintight-line tunis over tlw lives of the includal the cumbining ofiniciests in Lusupean appli-

]

aswis.

antes anxi cin ttical contiuls with General Electric plc, Invraiment tax credit (17Q. ITG asmciatal with equipnwn (GLC), an um elatal corporation in the Unital Kingdom.

on olwrating leases aixi with buiklings mul niuipinent is (GE also acquinxl G EC's nedical systems sales aiul service defen ni aint amonimi mrr the thrs of the uixlerlying in tlw Unital Kingdom.) liesides the businesses arvi assets.

lesoun es contributal by ilw parties in these ti ansactions, i

insurance afiliain, Pirmiunn on shon dunnion insus.

GE piid cash of $570 million to GEC in the secoext quaner atur umtracts are icpirtnl as canxxlincone over the of 1989. Otlulr newy> int ventuies inchulnl an arnmge-l I

tenns of the ictatal reinsunmcc tiraties or insunuue poli-bus? *)l"'""" "bdC" (""N# "'"""""I"h"5 l

unm !rgalfunnarul wnentageownndulain l

l cies. In general, canxxl piemiums air calculatal on a pni-nita basis or are detenni xxl b,ned on icports surival

• • ##" W' fnun irinsurnis. Picmimn adjustnwnts uixier ictnast-Ih ring 1988, GE completal a number of acqtusnums.

f tively rated reinsunmcc contmcts are nxonin!Imni on E'Ch"ECSI"Id'050*C'"

estimatal losses aixi lou expcines, incitulitig lu uh case aixt

%"O*1"d"'*NdE@dbb6@ d.

I incuned but-not trpirtal(IllNR) tesenes. Revenues on caA Ropci's principal tnisursses were the manufacture r

long-dunuion contracts air sepirtal as carixxl when due.

d O"@ d

• U "M"* d "W" P' Defermi insurance acquisition costs are amortimi as den njuipment, in ikxember, GE sold Roper's garden the irlatal premiums air carnal for pmpeny and casualty "luipurnt business for $295 million cash. Roper's Litchen business. Deferrnt insuraru e acquisition costs for the life appHance businen prior un anluisitum had annual sales of, alxmt $375 million, insunmcc business air amortinti over the pirmium-paying periocls of the amtmets in propirtion either to IkupWanwr's chemicals basiswsses, aaluliul in Sep-temix r fin $23 billion cash, These businesses (annual anticipatal piemium inconw or to gnas pmfit, as appm-priate. Ikfen ni insunmce acquisition costs are reviewed sales of atxmt $1.6 billion prior to acquisition) manufac-for n coverability, azul lbr short duration contracts, antici, ture aint sell pnxiucts compleinentas y to G E's plastics busincues.

pated investment incone is considemi in making tuuves.

ability evaluations.

Iloth of these acquisitions were accountal foras pur-The estimatal liability ibr outstanding losses and loss chases with the excess of purchase price over the estimate expenses consists of case reserves based on repons and of fair values of net assets acquimi recordal as gcxxlwill.

b HNC W' estimates of losses anxi an HIN R rsent basal prima:-ily on experience. Where experience is not sullicient, indus-llusiness disp >sitions during 1988 includal most of the try averages for the pirticular insumnce pnnlucts are GE Solid State (semiconductor) business; seven of NilC's usal. Estimated amounts of salvage and subrogation eight nutio stations; RCA Global Communications, Inc.

t erm erable on paid and unpaid losses at e deducted imm (a pmvider of international conununications sen ices); atxt outstaruhng losws. The liability for future policy benefits Sadelmi-Cogepi, a foreign construction finn. Cash pm-of the life insunmce alliliates has been computed mainly ceeds fnnu these transactions aggregated alout $700 mil-by a net level-piemium nwduxi based on assumptions for lion. Aggregate annual sales of these businesses were investment yiekts, mortality and tenninations that were atout $900 million.

(

appmpriate at date of puirhase or at the time the policies On Du,.nber 31,1987. GE and a French electmnics l

weie developed,inchiding provisions ibr adven,e C""'P""Y il"unson, S.A., completed a transanion in deviations.

which GE acquired Thomson's netlical equipment busi-ness (CGR) and Thomson acquiird inost of GE's omsumer electronie business. The total transaction included cash receivnt by GE of atout $560 million. CGR's 1987 sales of l

l l

49

clxnit $800 milliori ratic siiairily froisi cligital x niy, iiiasii-If the lnneclitig 1188 tratisactioris hacl <xt tire cci orij::w nu ngniphy, aim putnl tonu ngraphy, ultrasotuxl, aint uary 1,1988 orJaimar) 1,1987, managenwnt estimates irlatnl sales aint u : Tic e iri Eurojw aint lettin Atiierira, tliat gel'S testilts of ojie atioris foi tiie >rais crxlect GE's consunu t ehrtninics business irultuled mainly GE Dn center 31,1988 arxl 1987 wouki have twen as Iollows.

arul RCA braixi television sets, VCRs arxl audio pnxlucts g,,,ng g

with sales of alxiut $3 billion annually. Gl. will continue foi sotne tiine to uscive loyalty iluottw froin patents telatal Revemwn

$ 10.kH9

$N,702 toannumet electionic s pnKlucts.Othe selatnlclositigs, I.ai nings befoie extraonlinar) iten,i

'Ih

[ "I ",",,', d' Net earnings,,','"," y " '

""M' '"

principally for of f slune consumer electionics operations.

7g 7,79 t<xik place in 1988.

7M 1,0 %

Also during 1987, activities inailving a tww pnxiutts" divisiori arul NinC's nutio rieswoi Ls were sok! fiir cash The atxive unatulital pio liinna infonnation has been aggiegating alxiut $90 million aixi a mite fiir $3 inillion.

prepan d lui on assuinptions that managenwnt deems In addition, Gl' donated RCA's David Sanmff Rescait h appnipriate, but the tesults aie suit necessarily i Klicative of Centes to a not fin piolit organization in 1987, those that might have occunni had the autuisitions taken There was no material eflirt on Gl'?s ojrrating iesults place at the beginnings of the seslKrtive yeais. The t estilts or financial nsition hom the alxive transactions in the of htW Cinlit Operations have been consolidated with i

>rar when they occunnl.

gel'S since the date of anguisition. There wouki not have twen any significant piu fonna elrect on consolidated niet GEFS earnings per share fiom this transaction.

Duiing 1989, GE Capital anlulini for $ 107 inillion cash in J uly aint Dnember 1987, GE Capital aajuiini the the remaining 62% of the conunon st<x L it had not pievi.

outstainting capital st<x L of D&K Financial Corporation ously owinst in 1 GIC Corporation (FGIC), a company (D&K) atxt Gelco Cor;xiratioti (Gelco), trslxttively, fiir ati prin'cipally engaged in providing financial guanmtee aggn gate punbase price of approximately $535 million.

insunux e on selected securities. FGIC, whic h had annual lloth entities are in the bushwss of leasing vehicle fleets actenues prior to aajuisition of alxiut $125 million,is now and other niuipment. The autuisitions weic accounted for consolidated with GE Capital.'lhe aggregate effect of this as pun bases. Results of operations of the aajuin d corix>-

aa[uisition titxl a intiinixt of asset aaltiisitioin fiuin other Me kw kn bduM b M QM she eek financial services businesses during 1989 was not inaterial.

respective dates of aajuisition aint are not material, inJ une 1988, as part of the management led auluisition of hlontgomery Want & Co., Incor;xiratal(hlontgonnery I"*'"

Want) from hlobil Corponition, GE Capital anguin d hlontgomery Wani's ciedit olwrations annprising hlont.

er nonne of GE except GEFS is sununarized.m the gomery Wani Crulit Corlxiration ( AlW Crnlit) and certain Irlatul assets (onlkTtively with h!W Credit, hlW Cinlit Openitions) finr a cash putchase price of $718 million.

On millions) 1989 19 m 1987 GE Capital anni Kicklei, Pealuxly aajuirni 40% arx110E Royahy anxl technical irs [wctively,ol.hiontgomery Wani's annmon st<xL fin a agn.enx nu

$%9

$29

$2H3 cash pmchase price of $1 million atxt $1 inillion, respec-Marketable ururities aixt bank j

tively, in acklition GE Capital arx1 Kidder, Pealxxly paid deposits 106 ln 133 cash of $82 million mul $8 million, t espectively, for pie-f';*,Ij""$'ll",1l #5 fj

['y

['j fentd stm L m hlontgomery Want. the management led otiu.r imestments anluisition of hiontgoinery Wani was partially financed Intes est ii 13 15 by GE Capitalin the fiarm of a $275 million subonlinated Divideixls 2

8 4

lgg, Other suintry iteins 182 45 101

$Mi

$680

$649

• the aajuisition of the h!W Credit Operations was aauunted liar as a purchase, azul, accontingly, the pur-chase piic e was alkicated to the assets aint liabilities of htW Crnlit Operations based on estimates of fair value 'the excess purchase price over estimated fair value of net l

avets aatuired (g<x xlwill) is twisig ainoitized ori a stiaight-j line b,nis over 20 years.

l l

l 50

Note g Gus Revenues from Operations Iksails of t criain iteins inchuled in ecnxxl iinviix linin financing leases are shown helow.

GlTS ictenues Isom oiserations (canxxl incotiw) air suin-On niillion<>

19M9 Iim8 1987 inarized in the table twlow.

(In inilliono 19H9 1988 It*7

'"".l investnient tax onin anuinunt Tinw sales, loan,inncititu>in aiul NMh*Nh*

W D

U I.

oilwr ilKonw

$ 8,113 $ 5,986 $ 4,475 levenignileaws 21 3

16 l'inauing leaws 1,078 870 738

'liital finatuing leaws

$37

$23

$47 Openning leaw sentals 1,426 1,372 536 Gains on sale ofinidual values at Picnnuin aixi conuniwinn incone it.aw uinipk tion ofinsunuur athliates 1,810 1,802 1,748

!)ind financing least s

%8

$39

$44 Conuniuions aiul fees of wrutities Irs crage<lleaws 12 29 1

boles <lealer

$18 625 728

'liital hnaticing leaws

$50

$68

$48

$12.915 $10,655 $ 8,225

=

l Noncancelable futuir rentals due f rom customen s for njuipuwnt on operating leases as of Ikvemtwr 31,1989 totaled $2,354 million aixt are due as follows: 1990 -

$734 million; 1991 -5484 million; 1992- $353 million; 1993 - $254 inillion; 199 I - $ 164 million; ain! $365 mil-lion thereafter.

Note j Supplementel Cost Detells (excluding unusual expenses)

Supplenwntal cost details at e shown in the table below, Supplemental cost details 1989 1988 1987 (in inillions)

GE gel'S Total GE GEFS Total GE gel'S Tota!

Eniplo)ce comlwnution,itultuling Sirial Security taxes and other lwnehts

$11,960 $1,103 $13,063

$11,690 $1,052 $d,742

$12,139

$959 $13,098 Selling, general aiul adininistrative ex[rnw 6,662 6,662 0,250 6,250 5,979 5,979 Cinnpan) furuledievaitharut desclopinent 1,334 1,334 1,155 1,155 1,194 1,194 Maintenant e aiulirpaisi 821 821 839 839 840 840 itentalexlwnse 709 176 885 700 160 860 657 123 780 Advenising 415 75 490 413 66 479 495 51 546 Taxes, except payioll and inconic 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 and

$796 inillion in 1987, i

l 51

F Note f Pene6ensandotherRetireeBenettes futuir senice period of einployres. Prior s(rvice n t for changes in pennion terwfits that are alkicable to pievious j

GE arxl its athliates slxinsor a nuinter of pension aixl perials of senice air amonient in the sane inatuwr, other ictiire tenefit plans. This suite suininarizes imixn-Actuaiial assuinptions for the principal rnsion plans I

tant financial asints of GE's obligations for these plans.

include 8.5% for both the assunxxl discuunt rate usal to Measurenwnts of obligations airxi nists sit e hasnt osi swtu-deter siiite tiie litesesit valtic of futur e twin fits arxl tlic j

arial adculations involving vaiious assuinptions as to exiccinilong tenn rate of acturn on plan assets.The i

futuir events.

assunxxl rate of aveiage futuie increases in lension bene-fit corn lwnsation is 6.5%,

l MncIPal pension plans Employer costs for tlu principal pensi<ni pluis in 1989 iux!

{

The principal pension plans at e the GE 1 ension Plan 1988 s ecogniini the irupact of continunt favonible invest-(GE Plan) atxl the GE Suppleinentary lYnsion Plan (Sup-nn sit ger forruatice, lleriefit nists for se:Tice dtiring the pleinentaiy Plan).The RCM Retirenwnt Plan (RCM Plan) 3rar rougnire plan design changes in 1988. For exainple, was sin :gni with die GE Iviisioni Plari at the eix! of 1988.

leginning in 1989, einplo>re unitiibutions sui longer Arnounts aiut toinnwnts alunit the GE Plan in this amte reducc iension <usts luause such contributions air used include the RCA Plan for all wrimis showin Other pen-to piovide acklitional pension tenefits. Details of cost for I

sion plans are s[xinsomt by (kn wstic anxi fmeign aHiliates, the principal wnsion plans follow, I

but these air suit considerni to be significant iixlividually Cost for principal pension plans or in the aggregate to the (unsolidatal f.inanciallxisition.

On nWiions) 1989 1988 1987 t

tac CE Plan coven substantially all einplo>res in the Unital States, innluding appnixirnately 50% of gel'S

""'[f,"."$fl,'g',",""i,["8 'h" i

)

cinplo>res. Ge wrally, tenelits att based on the girater of contributions

$ 413 $ 300 $ 385 a fonnula rnugnizing career camings or a fonnula iccog-Interest aat on projecial benefit oblig; 1,259 1,232 1,187 nizing length of service and final a',rrage carnings. liene, Raognu,uionnhetunnin plan aus 0,5M 0,M 0,2W fits air fuixlal thiou8 the GE lYnsion Trust. At the crxl Net ainortiration (339)

(299)

(254) h of 1989, approxiinately 208,iHK) employees yeir n>vemi, Net pension cost

$ (24I) $ (227) $

25 approxiinately 122,1KK) fonner employees with vested I

'i' rights weer entillal to future benefits aixl all proximately "j'g "ti i"""li l1 iij'

$ 4,026 $ 2,261' $ 1,237 s

154,500 retisces or bencheianes were n eceiving benehts.

Recognized n1 urn on plan aswis (1,574) (1,460) (1.293)

The Supplementary Plan is an unfuixlal plan piovidirig Unrecognientieturiion plariassets 5 2,452 $ 801, $ (56)

~

.uppleinentary attirement benefits primarily to higher-level, longer senice management anni piufessional Recognited arturn on plan assets is detennited by employees in the Unital States. At the cix! of 1989, about applying the expected long-tenn nite of return to the mar.

3,400 emplop es were eligible for this plan, aint alx>ut Let-relatal value of assets.

4,100 a ctirees or teneficiaties were receiving benefits.

Fundingpolicy for the GE Plan is to contribute amoants Statement ofFinancial Accounting Standards (SFAS) No. 87 suflicient to nwet minimum fuixling requirenwnts set requites use of the pmjected unit cmlit cost inethmi to forth in U.S. employee benefit and tax laws plus such addi-determine the pmjectal Irnefit obligation and plan cost.

tional amounts as GE may detennine to be appmpriate The pmjectal tenefit obligation is the actuarial present fmm time to time. GE made no contribution for 1989 arul value of the [xinion of pmjected future benefits that is 1988 because the funding status of the GE Plan precluded attributal to employee senice to date. The benefit cost for cuntnt tax daluction and a contribution would have gen-senice during the >rar is the [x>rtiori of the pmjectal ben-erated an excise tax.

efit obligation that is attributed to employee senice during The fuixling status of an ongoing plan may be meas-the >rar, This cost inethml recognizes the effect of future ured by unnparing the market related value of assets with nunpensation ami senice in projecting the future benefits.

the pmjected benefit obligation.The market related value In addition, SFAS No. 87 establishes a " transition gain."

of assets is based on amonimi cost plus arcognition of This is the excess at January 1,1986 (when the Gmupany market appraiation and depreciation in the lxntfolio over adopted SFAS No. 87) of the cunent fair market value of five years. GE believes the market related value of assets is plan assets over the plan's pmjected benefit obligation.

a inore s ealistic measure than current fair market value This tmnsition gain is being amortimt over 15 rars 3

except that sinh excess for the RCA Plan was mugnized as an asset in accounting for the RCA acquisition in 1986.

Gains and losses that occur lwcause actual experience

+

differs fnnn that assumed are amortimt over the average l

52

i because the ina Let s elatal value taluces the irupart of Note [ interestarulOtherFinancialCharges j

short tenn inatLet fluctuations.The fuixting status for the l

principal lwnsion plans follows.

GE, Interest capitaliini, principally on suajor propeny, plant azul ttpiipnwnt pr ojects, was $ 18 inillion iti 1989, Funding status for principal penolon plans lks cinter 31 (in iniltuinn) 19M9 19MM

$ i i IIUl ".'II UI iUbK UIK $?3 IIUib.OII III iNb7' GEFS. gel'S interest aint dismunt exlwnse teixirted in ti e Ma Lei-relatalvalueof assets

$20,791 $19,308 l'roin ted benefa obligation 16,057 15,473 Stateinent of 1.arnings is net ofinteirst innvine on teinlx>-

mry investinents of excess futxis ($ 1(io inilliori, $285 : nil-A s( hedule nxunciling the projected benefit obligation lion arxl $165 million in 1989,1988 anxi 1987, reslxxtively) fi>r principal pension plans with GE's inunted pennioni atul ca;>italized iiiter est of $ 13 :nillion, $ 16 inillion aixi liability is sluiwn below.

$4 inillion, tes;xxtively, li>r 1989,1988 atx11987.

Reconciliation of projected benefit obligation with pension l

I liabil6ty for principal pension plans Note 8 GEFS Allowance for L.osses on ikx cinimi si tin niiilions) 1989 1988 Financing Receivables Projened hencht obligation

$lti,057 $15,473 lesuuncut fair ina:Let value of trust amets (24,21I) (21,502)

Unicuignimi SI'AS No. 87 transition gain 1,693 1,847 gel S allowaix e fint losses on financing irreivables repre-Other unnuignimi net expericine gains 5,333 3,303 sented 2.63% of total financing receivables at lxith ) tar-l l

Uninugnimiprio servicecost 90 1I4 c xis 1989 aint 1988.Un table telow sliown die activity iii Rnoided prepaid pension awets 1,4fMI 1.177 the allowance fi>r losses on finatning wccivables during Rnunted pension liability

$ 431 $ 412 cach of the last thice yeais, The [xntion of the piojected benefit obligation repre.

(l" '"illi""5) 19N9 19H8 1987 senting the accuinulatal benefit obligation announted to Balance at lanuary I

$ 972 5743

$ 603

$ 14,910 inillion anxl $ 14,073 million at the ends of 1989 Additiondharged to openitions

$27 434 290 anxl 1988, respectively, The vested benefit obligation was Net transicis related to companies

$ 14,721 inillion and $ 13,895 inillion at the eixis of 1989

""l"I'"I "'"l ""Id 48 89 23 Amounts written of f (420)

(291)

(171) and 1988, resjwctively..I'hese atuounts are based on coin.

Balan<c at N(ender 31

$1,127

$ 972 $m Iwnsation aixt service to date.

"Ihist assets consist inainly of co ntnon st<x L anxl fixnl

^""*nts written off..m 1989 weir apluoximately incoine investn ents. Tnist assets included GE conunon M8%. avenge hnannng iecewaNes outstanding during sux k valunt at $201 million at year end 1989 ($139 mil.

lion at year-end 1988) mainly held in connection with an the year, annpared with 0.810ux! 0.62% of average irxlexeil[x>rtliilio.

financing receiv bles outstaixting during 1988 atxl Other unrecogniini net experience gains tesulted prin.

IU87C51*CINCI '

T cipally fnun favonible investinent pet fonnance.

Principal retiree health care and life insurance plans N m p Un m % nm l

GE anxl its alliliates slxmsor a number of plans providing GE. Unusual expenses in 1987 were provisions for corixw I

wtit ee health care and life insurance benefits. GE's aggre-rate restructurings. These weie for the expenses of reliu l

gate cost for the principal plans, which cover substantially cusing a wide variety of business anxi maiLeting activities l

all employees in the United States, was $283 million in and reducing fin eign aixl domestic risk exixisuies. These 1989, $302 million in 1988 tux! $278 million in 1987.

provisions included costs of rationalizing and innproving a Generally, employees who retire after qualifying liir large numtwr of pnxtuction facilities; rearnmging pnxtuc-optional early a ctirement uixles' the GE Plati are eligible to tion activities ainorig a tuliiiter of existirig plants; anxi participate in retime health care and life insunux e plans.

scorganizing, phasing out or otherwise concluding other ilealth cas e tenefits li>r eligible retirees uixler age 65 and activities no longer considenti essential to the coixluct of eligible dependents are included in costs as coverwl the G<nupany's business.

expenses are actually incunut.1iir cligible retimes aint ggg.g,,g g g ggg g

spouses over age 65, the present value of f utuic health related to insider trading charges and business restructur-care benehts n f uruled or accrued and is included in ing activities of Kidder, Pealxxly, costs in the > car the retiree becoines eligible for benefits.

The piesent value of future life insurance Irnefits for eli-gible retis ees is fundal aixl is included in costs in the year ofictirement.

Most retitres outside the United States are covered by government health carc in ognians, aixi GE's cost is not significant.

53 j

t i

Note y Proviolon for income Temos (excluding 1987 extraordinary item and cumulative effect of l

changes in account 6ng pHnciples) j Provision for income taxes 19M9 1988 1987 dn millio 4 Gl.

Gl.l S

'lkital Gl.

Gl.I'S Total Gl'.

Gl.I'S

'loial Ictimated atiusunts pa)able Onmenible)

$1,375 $ 48 $1,423

$1,3l l $ (3") $1,279

$1,246 $ (212) $1,031 Defened tax expense Owiwht)

F f rom "temixirary dif feiem es" 242 144 386 (152) 274 122 (71) 231 160 i

investment onlit delened (amortient)- net Hil) 19 (45)

(63)

(3)

(66)

(87)

I (86)

$ 1,553 $ 211 $ 1,764

$1.096 5 239 $1.335 11,088 5 20 $1.108

" Estimated anxiunts payable"inchules announts applica.

A inunciliation fium the omsolidatal provision for ble to foreignjurisdictions of $272 million, $344 inillion inconw taxes that woukt have resuhnt using the U.S.

arxl $ 197 million in 1989,1988 aixi 1987, s eslwctively, faleral statutory nite to the actual pmvision is shown General Electric Company files a consolidated U.S. Int-below.

end inanne tax return that includes GETS. GijFS' pluvi-Differences between expected U.S. federal statutory sion for estimatal taxes a ccovenible (payable) includes its tam-rate provision and actual teu provision elfect on the cotisolidatal tax irturn. The ainourit r eported on millions) 1989 1988 1987 by GEFS has been inluced to the extent of consolidated Exped consolidad ux investnwnt tax credit carryfoiwards of $168 million at pmvision at stannory raies

$1.939 $1.605 $1.291 Dnember 31,1987. Investment tax crnlit carryfonvards increase (reductionlin taxes of $168 million anxl $107 million s -W..M.i 1988 anxl resulting from GE 1987, respectively, were tellected as cinstatements of inclusion of GEFS earnings defer ed tax balances.

0*I".minuirdinary item azul cumulauve effect of accountmg Defenniincome taxes reflect the. impact of"temix>rary change in 1987)in lefore-tax differences"letween the amount of assets aixt liabilities inconw on an after tax hasis (315)

(268)

(221)

Va7 ng tax nues ofodier i

for financial relxining purlxaes aixi nucli ansiourits as measured by tax laws anxl argulations. See note 27 fi>r

"' Mates (principally foreign)

(60)

(76)

(!17)

Ainortisattori of tiivestinerit tax details of. he balances m. deferred income taxes at the c xis credit (64)

(70)

(88) t of 1989 arxl 1988.

Cunrnt.) ear ellect ofinmme tax The U.S. investment tax crnlit (lTC) was repeakx1, with accounting change 133 AH other-net I"5 (14) 98 soine transitional exceptions, effectivejailuary 1,1986.

Ilowever, because ofits use of the deferral inethiul of (314)

(428) 0 95) accounting fi>r the frC, GE has an unamortiint balance increase (reductionlin taxes remaining. As a result of the accounting change in 1987, A

i sunent tax unamortized ITC is t catal as a temporary difference for ordit on hnancing aixl defened tax accounting. GE's remaining unamortiied frC operating leases (22)

(17)

(27) balance was $ l 12 million, twt of deferrnt tax at year-cini Divxtenuts incivnt which are not 1989, aiul will be added to innune in future years, gnh,U(.'"*"ff'{'ax,yxymg (27)

U7)

U3)

"Ihe U.S. federal statutory tax rate on coriorations was marketable wcurities (131) 001)

(112) 3 IW in 1989 ain! 1988, dowii froin 10% iii 1987, Data Inunne taxes at capital gains rate (14) about " effective tax rates,"i.e., piovision for incoine taxes Ad.justment of tax-(leductible as a percentage of cartiings beli>re income taxes, extraordi-

[g$iesenes ohnmnince

{g )

{pg) nary iteiin and cuinulative ellect of accounting changes, change in tax-rate assumptions

follow, for leveraged leases (23)

(14)

(31)

All other-net 48 64 02)

Effective tax rates (before extraordinary item and cumulative 076)

O10)

WO9) effectof accountingchanges)

W89 1988 1987 Eliminations 315 268 221 Fosn M mig RW "n

d GE 28.3% 24.5W 33.9%

GEFS I 8.6 23.3 3.5 consolidated 30.9 28.3 34.3 Piuvision has been made for substantially all U.S. fal-eral incoine tax liabilities applicable to undistributed earn-t ings of affiliates and associated compmies.

5l

llaci on the laation (ixit taxjutisdiction) of the busi-Note ]g GECurrent Receivables l

irss juoviding goocis or servi < es, consolidaint domestic linome hefoic taxes, extnun dinary itetii liixi nistiutative Ikseinici si (in iniilions) 19H9 1988 ellect of changes in anuunting principles was $4,930 mil-lion in 1989, $3,936 million in 1988 arul $2,710 siiillion iii b ekaNeI""*

1987 The tun esixnxling anioutits for foreigri-luised oiri-

((;({[1 og U$

E$

ations wetc $773 million, $785 inillion anxl $517 million in othe,5 1,897 1.857 l

cat h of tlusse year s,leslxttively, 7,3g5 7,300 lcss allowaiu e lot losses (167)

(196) j

$7.21H

$7.110 Note yy C.s.i d E.

wts Deposits restlicial as to usage iuxl willulrawal or used as partial compensation for short tenn lxinuwing arrange.

M ]j GEinvetwin nwnts weie not material for either GE except gel'S or GEFS. See note 2 I for related infonnation atx>ut cinlit gg.cy,,,,3, gin,;ii;,n,3

,939 3933 lines atul coinpensating halances.

Itaw mainials and woilin pnness

$ 5,492

$ 5,603 I inished g<x uts 3,103 2,863 Note )) Marketable Securities Carried at UnbiHal shipurnts 249 246 8 8II 87I2 Cost 1 css sevaluaiion to 1.1FO (2'.189)

(2'.226) l.II'O valuc ofinventories

$ 6.655

$ 6Ak6 Qu rying value of ma Letable securities for GE, except GEFS was substantially the same as ma Let value at year-1.lFO revaluau.ons decreased $'17 nu.ll. ion m 1989 nnn-eixls 1989 anct 1988. MaiLet value of GEFS' securities carrint at amorti/cd cost was $6,952 million aml $5,537 parnt wnh an increase of $150 imlhon m 1988.1.!FO million at ihremier 31,1989 aixi 1988, respectively, revaluations increased $324 million in 1987, mostly relatal to the accounting change describal in note 1, includal in these changes were decicases of $68 million, $23 million Note )) GEFSMarketableSecuritiesCarried and $22 million (1989,1988 aixt 1987, resixrtively) due to at Market lower inventory levels. In each of the last thice >rars, there was a current year expense for price increases.

Ikxemier 31 (In millions) 1989 1988 U.S. governux sit arxl fnleral agenicy securities

$ 1.399

$2433 State arul municipal securities 191 215 Corporate sS KLs. lunuls aiul foreigri securities 3.898 2A41

$8A88

$5,089 At Deccinher 31,1989, the carrying value of equity securities carrint at mai Let value includal unrealized i

gains and unrealized losses of appmximately $32 million l

l and $37 million,irsixttively.

A significant jortion of securities carried at market j

value at Ikremher 31,1989 was pledged as collateml for i

hant loans anxl repurchase agicements.

l i

l l

i 1

i l

b i

5 i

55 l

1

i 4

l Note h GEFS Financing Receivables (investment in time sales, loans and financing leases) rint at gniss book value, whk h includes finance charges.

Dnemhe 31 on milliom) 1989 1988

,,I,m, anc.mg leases,, consists of direct financing aixi levet.

Time sales and loans agni leases of aistralt, niilnxul nulling stoc k, automobiles i

Retaitei uixl auto imancing

$ 9,606

$ 7,465 anxi other inms;xination njuijunent, data processing I

njuijunent, sixtlical equijunent, aixl olhet inanufacturing, q

x as I int tila I I

ryuipment sales financing 2,562 2,17I imes genemnon, muung mul tununcirial equi unent anxl l

Ilone aiulin: cation hnancing 1,222 1,888 facilities, Ollwr 4E As the sole owner of assets uixler distit financing leases 30,879 26.779 aint as the equity paiticipaiit in levenigal leases, gel'S is Delennlinconw (737)

(983) taxnl on totallease payinents ureivnt uixlis elititlal to tax Tinw sales azul kians-net of deductions baxxl oli the cost ofleasal assets anxl tax delennlincome 30,142

,15,787 duluctions foi interest pdd to th d party pu'icipants, ii i

Dintt financing leaws 9,827 8,433 GEI S also is entitlal genentlly to any investment tax crnh,t ineragnileases l!@

2,691 on leasetl equipment mxl to any trsidual value of leaxtl 12,7&l 11,124

assets, i

42,906 36,911 Investmerits in dis trt financisig aix! leveraged leases less allowance for losses (1,127)

(972) represent unpaid irntals aixl estimated unguantnten!

$ I1,779

$35,939 residual values ofleased equiptix sit, less related defen nl inanne mxt principal arxl interest on notes aiul other

" Time sales and hxms" s ept esents transactions in a vari-instrunwnts irpresenting thini party participation, ety of fonus, including time sales, revolving charge aral llecause gel S has no geiwral obligation on such notes crnlit, mortgages, installment kums, intennaliate-tenn aixi other instnaments irpresenting third-party puticipa-ki,ms, asul revolving kians securnt by business assets and tion, such noteaux! other instrunwnts have not been marxlatorily rnieemable picien al sin k, Thc [xirtfolio included in liabilities but have been of fset against the indudes time sales arxl kians carried at the principd relatal rentals receivable, gel'S' share of sentals receivable muount on which finance charges ar e billal periodically, is sulxntlinate to the share of the other participants who aixt time s: des anxi loans acquiird oii a discoutit basis au+

also have a ururity iiiter est in the leased eqtiipitiesit.

r Additional detail alxiut investment in financing leases at Ikreinher 31,1989 anxl 1988 is shown below, investment in financing leases Divert Total financing leases t.everaged leases financing leases -

Dnember 31 (in millions) 1989 1988 1989 1988 1989 1988 Total minimum lease paynents nx civabic

$12,009

$19,109

$11,444

$10,745

$23,453

$20,854 Icss principal arul liiterest ori thini-party iionres out se debt (8,207)

(7,893)

(8,207)

(7,893)

Rentals ictrivable 12,009 10,109 3,237 2,852 15,246 12,961 Estimated unguarantent s esidual value of leasal assets 1,250 1,102 883 817 2,133 1,919 less deferred inconw (a)

(3,432)

(2,778)

(1,183) '

(978)

(4,615)

(3,756)

(

investment in financing leases (as shown alx>ve) 9,827 8,433 2,937 2,691 12,761 11,124 less announts to arrive at net investnwn:

Allowarue for losses (214)

(121)

(48)

(74)

(262)

(195) l Deferred taxes arising from financing leases (1,207)

(1,218)

(2,444)

(2,406)

(3,651)

(3,624)

Net investment in financing leases S 8.406 5 7,091

$ 445

$ 211

$ 8.851

$ 7,305 (a) 'lintal finaming lease defen ed income is awe of defened initial discct cmts of $37 million and $33 million for 1989.md 1988,iespectively, 50

t Canittacttial matut ities of tirne saleb a!Kl loalls alKi It'lltats leceivable at Decembel 31,1989 ate shown below, Contractual msturities 1995 5

(In milhono Total 1990 1991 1992 1993 IW4 mul aher J

Time sales and loans Retailen arulauto financing

$ 9,606

$ 7,336

$ 1,980

$ IIRi 57 29 8

Canunwarial tral estite hnancing 8,890 403 619 1,105 2,088 1,599 3,076 Caimnwicial and iixlustrialloans 8,599 1,326 1,026 1,(KXi 803 758 3,680 Equipnwnt sales financing 2,562 908 654 400 230 131 239

!!onw mulicaeation fmancing 1,222 686 77 69 64 60 266 30,879 10,659 4,356 2,776 3.242 2,577 7,269 invoetment in financing leases Diiecilinancing icases 12,009 2,788 2,651 1,879 1,371 783 2,537 Irveragallcases 3,237 141 156 162 166 181 2,431 15,246 2.929 2,807 2,041 1,537 964 4,968

$46,125

$ 13.588

$ 7,163

$ 4,H17

$ 4,779

$ 3,541

$12,237 Experience has shown that a substantial portion of receivables will be paid prior to contmrtual maturity, Acantlingly, the maturities of time sales anxi loans anxl Note ]8 Property,PlantandEquipment rentals rn rivable shown in the tablobove are not to be (including equipment leased to regarded as foircasts of future cash collections.

others)

I * *""* 8 ' ( ' " "*"")

' 9"

'"*8 Note ][ OtherGEFSReceivablesfromand Peyeblos to Brokers and Dealers orie nelcost n

GE Includal in other itteivables anxi other liabilities of GEFS 1.and and improvements

$ 266 $ 260 lluildings, structures atx1 relatal are amounts nTeivable from arul payable to brokers atxl equipment 4,600 4,250 f

dealers in anmection with Kidder, Pealxxly's nonnal trad-Machmery and equipment 13,756 12.957 ing,leixling atxt borrowing of securities, At December 31, leasehold n>sts arxl manufacturing 1989 and 1988, such amounts consisted of the following, plant under construction 1.051 1,126 Oil arul gas propert es 749 764 th emtwr 31 (In millions) 1989 1988 20,422 19,357 GEFS included in other receivables Securities failed to deliver 5 215 $ 132 Iluildings amiequ,pment 1,206 745 Idhnnent leasal to others Deposits naid for wcurities tx>rrown!

I,030 1,226 Other, pn],ncipedly clearing organizations 8

17 32 R il 1 11 nW l

$1,262 $1,390 Marine shipping containers 816 857 I

included in otherliabilities Aircmft 1,324 618 r

Securities failal to teceive

$ -181 $ 451 Data pmcessing equipment 461 355 De[xisits in cived for securitics kianal 665 903 Other 816 034 Other, princip;dly dearing organizations 24 48 8,016 5,811

$1,173 $1,402

$28,468 $25,168 Accumulated deprocletion, depletion and amortization GE

$10,756 $ 9,997 gel'S Equipment leased to others 1,745 1,321 Inuildings aint equipment 321 239

$12,822 $11,557 GEFS' increase in buildings anxi equipment includes the effect of the tnmsfer of GE Arnericom from GE at year-eixl 1989. Current-year amortization of GEFS' equipment on lease to others was $647 million, $665 million and $316 million in 1989,1988 and 1987, respectively, At Decemler 31,1989, GE except GEFS had minimum rental conunitmerits uixier rioiicaricelable openiting leases 57

aggregating $3,069 million. Amounts payable ovcr the Note % AllOther Assets text hve ye:15 are: liMK)- $537 million: 1991 - $480 inillion; 1992 - $394 million; 1993 - $338 million: arxl Ik.cend er si On niinioni) 1989 1988 IW1- $308 :nillion.

At Ihremier 31,1989, GEI'S had ininimum sental GE commitnwnts uixier noncancelable olwrating leases aggir.

I"[*"'[*

,,.d nimpmies gating $912 million. Amounts payable over the next five (inchuling advances of $54 million years air: 1990- $ 168 millioni 1991 - $143 million; arxl $29 million)

$ 1,448 $ 647 1992-$106 inillion: 1993- $65 inillion; arx11WI-hIix Clld""'"5 I""'5'"r"t*

(knrrnnK sit atul govenutriesit-

$68 :nith.on, guarantent uvurities 144 202 Other 167 175 hia:Letable ntuity ururities 54 72 Note y intangible Assets less allowaixe loi tosses (113)

(100) i 1,700 996 Prepaid pension av,ets 1,469 1,177 Ik'< cmter 310 n millioni) 19N9 1988 Reuncrable engirwering nists on governnwnt contracts 782 752 GE, Iong-term inrivables 608 675

('auxlwill

$6,517 $6,423 Television pmgrain nists 410 352 Other mtangibles 531 561 Ik ferred charges 372 318 7,048 6.984 Real estate development pmjects

' 31 73 GEFS Custonwr financing 62 73 Goixiwill 1,587 1,361 Other 219 205 Other intangibles 187 241 5.653 4,621 1,774 1,568 GEFS

$8,H22 $8.552 Investnwnt in associatal companies (including advances of $277 million aixt $389 million) 1,045 1,145 i

Accumulatal amortitation of GE's g<xxlwill was Miscellannma investnwnts 1,539 - 1,034

$484 millioit a:Kl $318 triilliori at Ikreinte: 31,1989 aint Ilinker-dealer cash a xl securities 1988,leslwctively. Accumulatal amortization of other begregatal by regulatic,n3 134 383 i

intangibles fiir GE was $474 million arxl $455 million at

,'"$'i {ylC' ""l"*'I"" *"

lh

[d's, lkrember 31,1989 arxl 1988, respectively. The largest GE Real estate properties 151 122 g(xxlwill and other intangibles were from the RGA anguisi.

Other 219 247 tion, for which g<xxlwill is being amortim! on a stntight-3.772 3.418 line basis over 40 years. Other amounts of goodwill being

$9,425 $8.039 amortired over 40 years arose fium a number of acquisi-tions in 1987 arxl 1988. All other GE intangibles and Iror GE, aggirgate market value of marketable equity g(xxlwill ar e leirig arnortired over shor1er peri <xis as sectarities, which aie carriol at cost, was $67 million aixl appiupriate, ranging from one year to 20 years.

$72 rnillion at 3rar eruls 1989 anxi 1988,irspectively.Giuss Accumulated amortization ofGEl'S' g<xxlwill was unrealized gains anxi losses were $19 million and $6 mil-

$181 million aix! $133 inillion at December 31,1989 atx!

liori, respectively, at ihreinber 31,1989.-

l 1988, rrspectively. Accumulated amortization of GEI'S' The National liroadcasting Company (NilC, an affiliate l

other intangibles was $90 inilliori arxl $73 million at of GE) capitalires program costs (including rights to Ikrember 31,1989 anxl 1988, respectively. The principal bruadcast) when paid or when a prugnun is icady li>r mueres of GEFS g(xxlwill include acquisitions of FGIC bruadcast, if earlier. These custs are amortized based upon Corlx> ration: Gelco; hlW Credit Operations: Kidder, l'ea-projected revenues or expensed when a program is deter-lxxly; ERC: anxl a number of auto auctions. Ainortization mined to have no value.

is being urordal over various peri (xis, none more than 30 At year end 1989, NilC had approximately $1,70 billion years. GEFS'other intangibles represent principally the of conunitments to acquire broadcast material or the rights value ofinsurance-in-foire related to ERC's property aixt to bruadcast television programs that require payments casualty reinsurance business, which is being amortized on over the next six years.

a straight line basis over its estimated life of approximately For GEFS, miscellaneous investments included $ 1.149 16 years.

billion anxi $641 million at ihrember 31,1989 and 1988, respectively, ofitems at estimated realizable values previ-ously induded in financing receivables.

t 58

i 1

Note M Short Torm Borrowings The average daily balaixe of GEI'S'lx>nuwings, excitui-ing the cun ent luntion of long-tenu lonuwings, w:s

)

Amount and everage rete et December 31

$31,154 million in 1989 compuwl with $27,889 inillion

~

its lie foi 1988. The Ikx ember 28,1989 balance of $31,769 inil.

1988 balance of $30,385 nu."llion was the maximum bal.

"U """ U I""

On nihns)

Anu, uni Rate Ainount Rate 1

GE ance in 1988 'lhe average short-tenn interest nite, exclud-1 Onnnwicial paier

$ 597 8.5%

ing the cunrnt portion oflong tenn debt, was 9.44% for i NitiixSis 313 8.2 337 8.5%

1989, representing short tenn interest exlwnse dividal by I

Aliste bank honowings the average daily talance, compurd with 7.96% for 1988.

(inincipally foreign) 436 18.8 261 25.7 At Ikxrmtwr 31,1989 GE Capitalhad established lines-d Cunent immon of of a nlit aggregating $13,445 :nillion with I87 banks, 1,2 )

includig $19,370 million m remhing credit agicements ngaenn tonowings 0

with 118 lunks pursuant to which GE Capital has the right Iam 1,861 to lxnw funds fm perials exceecling one year, In addi-GEFS OHullwrcidllM}8er-30.452 8.80 24,591 9.32 tbn,at NrmW 31, M9 mndmaMy $1,2% Wh llants 2,702 8.58 1,987 9.34 of GE's cralit lines was available for use by GE Capital. A Cunent ponion of total of $4,430 million of these litws also was available for kmgt nowings 1,365 790 i

uw h GE Financial Senices.1)uring 1989, GEFS did not clepartnwnts 847 8.29 WO 8.4 g lxulow tuuler any of these credit lines, lushoolsiuxi GEFS compemates lunks for cralit facilities in the fonn investnwn certi6 cates 374

_ 373 of fees or a annbination of balances and fees as agreal to 35.740 28.731 with ~he bank.

Eliminat6ons (236)

(170)

At December 31,1989, Kidder, Peatxxly haul establishal

$g7.2no

$30.422 lines of credit aggiegating $5,727 million, of which $3,862 -

million was available on an unsecunxi basis. llorrowings The average lulance of shon tenn torrowings for GE fnnn banks were primarily unsecured demarxl obligations, I

except GEFS, excluding the current lxntion of long-tenn at interest rates appmximating broker call loan rates, to bonuwings, was $2,284 million in 1989 compared with an finance inventories of securities and to facilitate the securi-I average balance of $ 1,416 million in 1988. (Except for ties settlement process.

annmercial paper, the average balance is calctdated by averaging month-eixt balances for the year; annmercial I

paper average bonuwings are basal on daily lulances for I

the year.) The maximum lu)ances in these calculations were $2,791 inillion at the eix! ofJ une 1989 anxl $2,444 million at the end of September 1988. The average world-wide effective interest rate for the year 1989 was i 1 W : for 1988, it was 159. These average rates represent total shon tenn interest incuntd divided by the average lui-ance outstanding. Although the total unusal a edit avail-l able to GE through banks arxl comnwrcial credit mar Lets is not readily quantifiable, confirmed credit lines of about t

$1.3 billion had been exteixled by 47 lunks at year erxl 1989. Substantially all of these lines also are available for use by G E Capital and GEFS in addition to their own f

credit lines.

s 59

Note [ Account &ymble Note ]j Wrndoneings lice emler 31 (in milliono 19H9 19M8 Ik c emler 31 (in millions) 1989 1988 GE cn g 3,9g7 g 4,339 I

I Trade anounia

$2,606 $1,939 GLi'S 12,16'>

10,b62 (idlectal(or the acmunt of others 195 180 Eliminations (2)

(i10)

Oihet (induding associated companics) 100 17 g

2,1Nll 2,136 l

GEFS Atunmts atxt dialts payable 4,144 4,132 Outstatxlitig twilatices itilotig tersti tuirtuwings for Gli at December 31,1989 atul 1988 rue as follows.

~

Eliminat6ons (379)

(264)

$6.666 $6.(NH Weighted Ikwemler 31 usenige i

(In millions) interest rate hlaturities 1989 1988 Notes 6.97% 1991 1992. $1,056 $ 1,163 Note M GEFS Securities Sold but Not Yet 1.xiemlible notes (a) 7.69 1998 2(Nxi 600 800 Purchased, et Merket ikhentures/ sinking lturi delwntures 8.43 1992 2010 _

$13 545 l'oreign currency i

ik temlet 31 (In millinno 1989 1988 tmtes (b) 8.14 1992-1(M13 -

!NIO 900 lleep discount U.S. govertitiwtit amt inlenil agenicy tintes (c) 7,51 1993-1994 350 350-securities

$3,508 $1,560 Industrialdevelopment/

State anxl municipal securities 4

9 liollution contiol Cin]x> rate stocks,lunuls atxt foteigti ruiruls 6.17 1991 2019 236-262 secuti*ies 578 519 Other (d) 292 310

$ l.090 $2.088

$3.917 $4,330 (a) GEwillresetinte est ratesatrixiofinitialuixtcathsuhsaluent intenent perimi. At each rate teset date, notes are redeemable Note A GE AllOtherCurrentCostsand in whole orJn pan at GD oggion onepayable at oguion of the

'T holden at face value plus accrued interest. Cun ent interest Expenses Accrued petimis range Innu hlay 1,1991 to April 8, IW3. Notes are in-cluded in the cunent imrtion of long-term debt when the At year-crxis 1989 atul 1988, this at count included taxes p,3 i E",'7dl;'*7,'h $"Nhi"[$""r ""[i Unit 150 million i""

r accrued of $1,521 million and $1,568 million, respectively, noic issue (7%4 couimn rate) due in 1992, G E entered into a i

and compensation and benefit accruals of $948 million and

(""c"(F ""d i"te'est-raic wap agreement under which GE assumes a hxed,Jada 1992 ami pays interen in yen at a ianese yen hability (22,262 million) for pay-

$982 m.llion, respectively, Also, cluded are amounts f,or i

m nent of principa pnKluct wattanties, estimated costs oli shipinents billed to what Irlow the six. month )en I.IllOR.

customets aIxl a wide variety of odict sutKiry ileins.

nullion at a fixed exchange rate of p n 180.41 = US $1,00.

In connection with a US $500 mdlion note issue (9%W coupon rate) due in 1993, GE entered into currency and interest rate swap agreenwnts umler whit h GE anumes a fixed Dutch guilder liabdit y (632 million) and a hxed German marl liability (3,3 million) for payment of principalin 1993. GE pays interest in the l

respecthe currencies at somewhat below the respectise currency three-month 1.lilOR.

k) Induding amortleation of original issue diwount, the effective interest rates atc: 4 %9 Euro-dollar notes (US $200 million)-

7.419,2%W U.S. dollar notes ($150 million)- 7.66%.

(d) *0ther" includes originalissue premium and diwourus and a s ariet y of lorrowings by afhliates azul parent comixments with var ious intesest rates atul maturities. Thmugh lD88, *other" also induded an adjustment to bring RCA lorrowings at anluisition l

date to fair marLet value. Such RCA lorrowings have now all been retired.

7 long term bonuwing maturities during the next five years, including the portion classified as cun ent, are

$150 million in 1990, $861 million in 1991, $442 million in 1992, $982 million in 1993 and $ 179 million in 1994.

These amounts are after deducting debentures that have been reacquired for sinking-futui needs.

60 l

Outstaixling balances in long tenn lx>rniwings for Note % GE AllOtherUmbilities GEFS at December 31,1989 si xi 1988 ine as follows.

For GE except GEFS, this account includes noncun ent nimpenution atKllictiefit aconials ;tt yealWIKis 1989 a!xl Dnemtwr 3)

(In milhons) interen rate Mameities 1989 1988 1988 of $1,51I million aixt $1,516 million, respectively.

Other noncun ent liabilities include amounts for pnnluct i L tes (a)

!!Eli $

165 $ 181 warranties, deferr ed incentive nnnpenution, defermi Iineign cunency investment tax c (tht, defened incoine avul ti wide variety suites (h) 9.619 1991 l!08 1,493 757 of other sundry items.

Zeru mulunddeep divount notes 14.08 1992 2001 2,270 2.270

.',7 "'

Note ]f Deferredlocome Temos notes (c) 8.25

!!Hil 20lH 2,456 2,998 l'inating rate tuites (d) 2019 269 164 The tax effects of principal tem lxmoy diffeiences Other notes 8.99 199120W 6,209 5,306 hetween the carrying amounts of assets aixl liabilities atxl I

: ium (984) (1,136) theiMahes are smmnarimMow.

Total senior notes i I,878 10,538 Decemtwr 31 (in inithons) 1989 1988 Subordineted notes 9.32 1991 1997 287 324 GE except GEFS

$12.165 $10,862 Pmvisions for expenses

$(1,785) $(1,723)

Accumulated depn ciation 929 852 (a) Notes have a olling IS month or 15-tuonth maturit) aiulIwar Assets aixi liabilities relatnl to pensions 409 331 floating interest ratos lusal principally on GE Gapital s 180 day Other-net (189)

(101)

(b) r[tesI iNunl in pouixls sterling (equan to VS $ 158 Net defened tax anet

$36)

M) million). Euro wan Gurrency Units (US $499 million) atul Gana-dian dollars (t S $315 milhon), GEFS has emeted into current)

GEFS swap or interest rate swap agreements under which gel S Fmancing leases 3,651 3,624 anunws a hxed principalliabihty and payi hxnl or floating rate Tax transferleaacs 332 335 imerest to a nunnwrcial bank enunterpart y. For the notes Operating leases 331 177 denominated in Swiss iranca (US $153 milhon), there is no statal Provision for losses (392)

(377) maturity date but issuer calls arul investor puts are available at Other -- net 257 255 10-year intervals. GEFS can limit the ultimate reurenwnt to US

$153 milhon arulinterest is hxed for the first 10-year perimi. In Net defemst tax liabihty 4,179 4.014 t onnection with a US 5125 million note issue due in 1998, GEF S Net deferred tax liability

$ 3.543 $ 3,373 entered into a currency swap agreenwnt uruler which GEFS assunws a 6xed pouixt sterling hability (74 milhon) for paynwnt of principalin 1993.

(c) gel S will reset interest rates at crul of initial arul eac h subse-quent interest lwriod. For Exterulible notes, at each rate ics" Note M MinorityInterestin Equity of

< tate, holders may redeem notes at fa(e value plus accrued inter-der U est. Gurrent interest perimis range from February 20,1990 to Consolidated Affiliates j

Marc h 4,1993. Notes are included in the current luirtion of long-term debt w hen the interest rate reset date is within onc year.

q (d) The rate ofinteren payable on each note is a variable rate lused Dnemher 31 On milliom) 1989 1988 on the comnwrcial paper rate cach month. Interest is payable at the option of GLFS cither monthly or semiannually.

GE

$ 283 $ 228 GEFS 718 753 long tenn bormwing maturities during the next five

$1,001 $ 981 years,induding the current lmrtion of notes payable after one year, are: 1990- $1,365 million: 1991 - $ 1,427 mil-Minority interest in equity ofconsolidated GEFS affili-lion (including $165 million of notes having a rolling 13-ates includes the issuance by GE Capital in 1988 of six month or i5-month maturity); 1992-$1,678 million; thousaixt shares of $100 par value variable cumulative f

1993 - $1.890 million; and 191L1 - $ 1,073 million-preferred sud for net pmceeds of appmximately i

li. December 1987, GE Capital initiated a debt extin-

$600 million. No additional preferred shares were issued l

guishment prognun to use the pmceeds funn the issuance in 1989. Dividend rates on this preferred stock during of new long tenn debt to repurchase or redeem appmxi-1989 nmged from 6.42% to 7.85%

mately $1.1 billion of existing debt at market prices or redemption premiums in excess of the net carrying amounts. This resuhed in an after tax loss of $62 million (net of $39 million tax credit) that was reported as an i

extraonlinary item in the consolidated Statement of Earn-ings for the year 1987. The extinguishments were com-pleted during the first quarter of 1988, i

f, 61

Note M ShatsOwners' Equity furgis f rom a combination of lxintiwings trxl free ensh flow. Simuki wolk! cronomic coixlitions, a major acquisi-GE prefen ni st(x k up to 50,000,(K)0 shaies ($ 1.00 par tion or other circumstances warrant, the Company woukt value) is authorinst, but no sudi shares have leen issunt.

modify the pace aix! dinwnsion of the reporthase pto-Autimrinti shaies of comnum stoc k (par value $0.63) total gnim to maintain the solidity ofits financial position. As of 1,100,00(),00(L Decemler 31,1989,3,765 thousarxl sliares liavisig an Shares of GE common stock aggiegate cost op niMon hadeen repudiad Decembe: si on thouwixh>

1989 1988 19N7 utrier die ptograrii atul placal : tirasury, In April 1987, GE share owners authoriinh (a) an 11 )

increase in the numtwr of authorized shares of conunon tseinury 1 3) 1

)

stock from 550,(KK),000 shares each wnh a par value of Out$latulitig 901,781 902,116 902,953

$0.63; (b) the split of each pieviously issued common GE shaic owner s' equity is as follows.

Share, including shares hekt in treasury,into two shares of GE share owners' equity common stoc k each with a par value of $0.63; aixt (c) an (in milliom) 19N9 198N 1987 inctease in the number of authoriini shares of perfe:Ted Common stock issued stoc k fnnn 2,0(X),000 shairs with a par value of $ 1.00 per llalance atJanuar) I

$ 588 $ 584 5 579 share to 50,000,0(Ki shares with a par value of $1.00 per Adjustnwnt for st<x k split 5

share. All share data have teen adjusted for this change.

Italaine at Ikteinher 31 5 584 $ 584 $ 584 The effects of tmnslating to U.S. dollars the financial Other capital statements of foreign alliliates whose functional cunency llalatue atJanuary I

$ 823 $ 878 $ 733 is the local cunency are included in other capital. Cumula-Adjustment for stru L split, (5) tive foreign cunrncy translation adjustments were Ios gi ctmency translation nlli di d dli fddidae Umcaliicd gains (lowes) on other capital at December 31,1989,1988 aixt 1987, securities hekt by insuran(e irspectively.

affiliates 5

18 (33)

Gaim Gosses) on treasury sto( L disixisitions 2

(34) 30

=

Note j Other Stock-Related Information Oiher g

Italance at December 31

$ 826 $ 823 $ 878 Stock option plans, appreciation rights aixl perfonnance Retained oamings llalance at January I

$17,950 $15.878 $14,172 units are descriled m, the Ccunpany's curient Proxy State.

Net earnin'gs 3,939 3,386 2,915 ment. Requiirments for stock option shares may be nu t Dividends declared (1.537)

(1.314), 1.209) within certain irstrictions either from unissued or ticasury

(

llalance at ikvember 31

$20.352 $17.950 $ 15.878 shares. During 1989, optioris were granted to 3,800 cm-Common stock held in playees and i5 nonemployee Diiectors. As of December treasury 31,1989, a total of 456 individuals were eligible to receive r<liIf s c sspant options, atxl all exempt salaried employees t

7 8

Dispositions were eligible for special option grants. A total of 4,633 Einployee savings pians (124)

(213)

(148) persons held options exercisable at the eini of 1989 oi-iri Sux.L optiom arul the future, appreciation rights (212)

(77)

(96)

Em iloyee sta L ownership Stock option Information Average per share

(' d" (II)

(39)

Wres mNeu Opion M et E "

E "

Ii i

is (47)

(49)

(42)

Connibution to G Pemion llalarx e atJanuary 1,1989 19.936 $36A1 $ 14.75 l' rust (25)

Options granted 5,038 57.19 57.19 Conversion oflong term Options exercised (3,954) 28.28 55.6l

debt, (1)

(24)

Options suneixletal ori Incentne mmpemation exerc;sc orappreciation plans 2

@)

13 rights (712) 30.77 56.37 ItalalKe at December 31

$ 872 $ 891 $ 860 Optiom terminated (217) 44.45 Italance at Iktember 31,1989 20.091 43.34 61.50 in Noveinber 1989, GE's lloard of Directors authorized the repurchase of up to $ 10 billion of Company conunon Outstanding opdosis atul riglits expire arx1 tlie award stuk over a five-year pericxl. This iepuithase ping ani 1< ii(xl for outstargling performance units ends on various is designed to le Ilexible. Shares will be arquired with dates fromJanuary 1,1990 to December 15,1999. Shares available for gnmting additional options at the end of 1989 wet e 6,473,950 (11,936,568 at the end of 1988).

62

Note y CommitmentsandContingent

• Net increcse in GEFS httncing ieteivtbles" included:

Liabilities (in millium) 19H9 1988 19ti?

At Dec ember 31,1989, theic weic no known (untingent incicase in loans to liabilities (including guarantees,1w:xling litigation, taxes custonwts

$(24,6W) $(23,731) $(I8,990) arul other claims) that, in the ojiinion of managernent, Principaluillatima irom 21.350 19,802 15,370 wouki be inaterial in Irlation io Ge wral I'lectric Gomjiany

,]unlxl g

atxl consolidated affiliates financial jxa, tion, not weir for huancing leases (4,766)

(5,031)

(3.117) l thes e any inatetial cominitments outside the normal Principal collections on coutse of business, financing leaws 3,214 3,974 2,291 Net thange in cinlit cani incivables (1,641)

(957)

(1H1)

Note M SupplementalCash Flows

$ (6,542) $ (5,943) $ (4,627)

Information G EFS' "all other investing activities" inc luded:

"All other (>perating activities" in the Statement of Cash (In mimons) 1989 1988 1987 I lows consists pnncipally of adjusttuents to curient atKl noncurrent accruals of costs arul expenses, amortization of Punhaws of maiLetable piemium anxl discount on debt, atxl adjustinents to assets wcurities by insurance U"

such as ainortization of g(xxlwill atxlintangibles, g););,,;t a of marketable Information alxiut acquisitions arxl dis lxisitions can he securities by insurance foulut in note 2. The Stateinent of Cash Flows excludes afbliates 4,481 2,334 2,624 certain noncash transactions that had no significant effects Other (403) 0.153)

(137) on the investing or financing activities of GE or GEFS, The

$ (801)

$(2,007)

$(1,282) transfer of GE Anwricom from GE to GEFS at the crxl of 1989 incicased GEFS' equity by $332 million, GEFS'" debt having maturities more than 90 days" Gash used in each of the last thiec years included:

included:

(In inillions) 1989 1988 1987 (In millions) 1989 1988 1987 Interest (paid)

Newly issued debt GE

$ (793)

$ (640)

$ (577)

Short-term (91365 days) $ 4,571

$ 5,916

$ 5,546 gel'S (5.H7(i)

(4,030)

(3,301) lamg-tenn senior 2,842 3,936 1,927

$(6.669)

$(4,670)

$(3,87H)

Id'"R*H'nn sulxinlinatal 58 Pmceeds-nonrecourse, income taxes (paid) ermeint levemgallease debt 461 3HI 345 (lederal foreign, state

$ 7,H7

$10.291

$ 7,HIM atxl local)

GE

$(1,1fi3)

$(1,284)

$(1,096)

Repayments and other GEI S (1118) 251 403 ruluctions bI"'"4C""

$ (5,55(i) $ (6,220) $ (5,836)

$(1,331)

$(1,033:

$ (693) lemg term semor (230)

(2,284)

(526) lemg tenn subordinated (7)

(6)

(20)

" Net change in certain broker dealer accounts" Principal payments.-

included:

rionrecourse, leveragnilease debt (253)

(261)

(263)

(In tnillions) 1989 1988 1987

$ (6,046)

$ (H,771) $ (6,645)

MarLetable securities of I

brolet. dealer

$(3,356)

$(1,009)

$ 1,826 Securities purchawd under j

agaments to resell (2,209)

(922) 72 t

Securities sold uvule agu einents to repurchase 2,691 677 117 Securities sold but not >ct purchard 2,002 681 (2,11 H)

$ (H72)

$ (573)

$ (103)

I 1

1 63

Note )) Industry Segment Details I

Revenues (in milhons)

Ior the years eruled Ikt emter 31 Total tesenues imeisegment ievenues l',xternal tetenues l

19N9 1988 1987 1989 1988 1987 1989 1988 1987 GE i

Aer m p ue

$ 5,282 $ 5.343

$ 5,262 77 $ 166 $

78

$ 5,205 $ 5,177 $ 5,184 Airtraft 1:ngines 6,863 6,481 6,773 69 119 48 0,794-6,362 6,725 lituadcasting 3,392 3,638 3,241 1

3,391 3,638 3,241 trulusuial 7,059 7,061 6,662 701 706 708 6,358 6,355 5,954 hlajor Appli.uucs 5,620 5,289 4,721 5,620 5,289 4,721 hlaterials 4,929 3,539 2,751 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 Techuical Prwiucta mut Seni< cs 4,545 4,431 3,670 191 161 337 4,351 4.270 3,333 Earnings of GEFS 927 788 552 927 788 552 All Other 319 394 3,176 4

319 394 3,172 Corjumite Itenn aiul Eliminations (1,415)

(1,477)

(1,287)

(1,203) (1,318) (1,332)

(212)

(159) 45

• Ilital GF 42,650 40,292 40,516 42,650. 40,292 40,516-GEFS Financing 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 Securities thuler Dealer 2,897 2,316 2,491 2,897 2,316 2,491 All Other 5

34 10 5

34 10 Total GEFS 12,945 10,655 8.225 l2,945 10,655 8,225 -

Eliminations (1,021)

(858)

(583)

(1,021)

(858)

(583).

Consolidated ctenues

$54,574

$50,089 $48,158

$54,574 $50,089 [482 Assets Property, plant and equipment (including equipment loosed to others)

(In millions)

At ikxemier 31 f or the years etuled Ikvember 31 Depreciation, depletion arul Additions amoruzanon 19N9 19MM 1987 1989 1988 1987 1989 1988 1987 GE Aerospice

$ 3,806 $ 3,838

$ 3,913

$ 173 $ 208 $ 178

$ 153 $ 170 $ 151 Ain raft Engines 5,341 5,161 5,066 341 234 242 273 251 242 llroadcasting 4,428 4,104 3,918 81 147 115 79 70 GI Itulustrial 4,016 3,729 4,041 354 301 274 248 249 315 l

hlajor Appliances 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 l

lbwer Spiems 2,604 2,531 3,266 138 127 118 136 138 162 1

Technical Pnulucts atul Services 2.772 3,183 3,873 219 203 235 154 168 170 l

Investment in GEFS 6,(Ni9 4,819 3,980 i

AllOther 951 1,122 2,016 3

5 72 17 62 Corporate items and Ehminations 3,272 3,379 2,707 71 91 48 50 102 83

'liital GE 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 tiroler Dealer 27,118 21,891 20,011 33 19 60 32 32 28 AllOther 91 155 625 33 14 13 13 11 12 0

l TotalGEFS

, 90,928 74,915 61,406 3.257 1,797 579 732 744 369 Eliminations (6.691)

(5,363)

(4,292)

]

Consolidattti totals

$128,314 $110,865

$95,414

$5,508 $4,085 $2.357

$2.256 $2,266 $1,913 i

i n

Revenues include innmw from til wun es: i.e., liit o #niadcasting n>nsists primarily of the National GE,Ixith sales of pnxhuts arxl st ryi es to custoiners aix!

linuxlcastirig Coriijuitiy (N DC), which is the cut t erit leader

• other ituunw"; for GEFS, "canwd itu ome" as described in iti en twot L telesision. NitCi principal busitwsses are the l

note I, in gerwml, it is GE [xility to price sales innn one furnishing within the Unital States of twtwo:L telesision (kunpany nunjxnwnt to another as nearly as practical to services to af filiatal television stations, the pn Kluction of nluivalent tummercial wiling prices. About one-sixth of live aixi reconled television pnignuns, aiul ti e opemtion, GE's consolidatal sevenues are inun agencies of the U.S.

uixler lic enses from the i nieral C(unmunications Com-(

govenmient, GEh largest single custonws. hiost of these mission (FCC), of seven Vi1F television hnwulcasting wer e for actuspace atul airtralt engine pnxlucts aint stations. 'Ihc NilC Telesision Networt, is(nw of thice services.

corn lwting major national <umnwicial hnxxinist television Operating prufit by i xtustry segnwnt is on page 35 iwtwoi Ls anxl wives moir than 200 regularly affiliatal sta-of this reix>it.

tioris withiri die Uniited States. Ihe television stations NilC A description of each of Gerw al Electric Coiiiparty aint owris anxi openites are locatal in Chicago, Clevelaix1, Den-consolidatnl afTiliates'i Klust:T wgiiiesits follows.

ver,12is Arigeles, hiiaini, New Yoi L asul Wasliirigtori, D.C.

Ilroadcasting operations are subject to FCC iegulation a xt GE station lic ensing. NitC is currently ex} muling its opera-C Arnaspect pnxtucts and se vices encoinpass ek ctiun-tions, including investnient anxi pnigrainming activities in cane tdem, in.

x its, avionic systems, military vehicle niuipment, auunnatal test systems, unnputer softwaie, annanwnt systems, mis.

• Industrialencompasses factory automation products, sile system comixments, simulation systems, spacecraft, nuitors, electrical njuipment fi>r inxlustrial anxi commercial conununication systems, nular, sonar anxi systems integra, construction, GE Supply C(nnpany, tmns[xntation systems tion. hiost aerospace sales aie to agencies of the U.S. gov.

aixilighting pnxtucts. Customen fi>r many of these pnxt-enunent, principally the Department of Defense anxi the ucts and services include electrical distiihutors, original "lui unent manufacturers arxl i xlustiial erxl users.

National Actunautics anxlSpace Administration.

l commein 1?"'Y"l, heating, air coixlitioiung anxi

• "5 "%

d d*5 SC9 @C "PP d"CC' P

U O Aircraf Engines airxiieplacenx tit lxists are irianufac-nulustna tured anxl soki by GE fiir use in nunmetrial anni military airentft,in naval ships and as industrial xiwer sourtes, nuntive snarkets. hiotor pnglucts are usal within GE anxi -

1 G E's military engines are usal in a wide variety of aircraft "IS".are s ld cuernally. Electrical distribution atxt control that includes fighters, ho.nhers, tankers anxl helicopters.

niinpment, fi>r which European opemtions were G E's large CFh156 and CF6 engines ;xiwer all categuiies of "I* M M "** N " *CI" M9'i55* b commercial aircraft: short/nxxlium, internxxiiate and inuallation in commenial, inxtustrial anxi resideritial fiicili-long nmge. Applications fi>r GE's CFhtSG engine, pn>-

ties. Factory automation pnxlucts cover a broad range of duced jointly by GE atul SNEChl A of France, include:

electncal anxi electrutiic pitxtucts, including drive systerns, ik>einks 737 300/ 400/ 500 series, Airbus Irulusti-ie's a miks m madnMng aM akd enginect-A320, A321 arul A340 seriest aix! siiilitary aitcnift stich as iiig tiutointitiori applicationis. GE Supply operates a siatioti-the KC 135, E/KE-3 anni E-6. The CFh156-39>weral 737 wide ndwmk of electrical supply houses. Transportation has become the fastest selling aircraft / engine combination systems include diesel-electric mid electric kicomotives, in commercial aviation history. GE's CF6 family of engines tmnsit inupulsion equipinent, motorized wheels fi>r off-powen intennaliate anxl long-ninge air cmf t such as Nghay das, sua as hw ud in mining opemtions, Ikicing's 747 azul 767 series, Airbus lexitistrich A300, dMnghhs bresesamsoM pdndpaHyto A310 aix! A330 series, si xt htcDolitiell Douglas' DC-10 (knneuic anxl fin cign railnxxis, while markets fi>r other aiul hlD-l I series. GE also pnxtuces jet engines for execu-pnxiucts include state and urban tmnsit authorities atxt tive aiirnift anxl regional commuter airlines.

industrial user s.1.ighting pnxlucts include a wide variety of lamps - incandescent, fluorescent, high intensity dis-charge, halogen and specialty - as well as wiring devices and quartz pnxlucts. Af arkets and customers are princi-pally in the United States,although foreign markets are l

hec uning increasingly important, hlarkets are extremely varied, ranging from household consumers to commercial aint industrial end users and original equipment manufac-turers. Until the fourth quarter of 1988, the lixltistrial seg-inent also included semiconductor opemtions that have since been so!d.

65

0 Major Applianen itxhules Litt hen arxllauixiry njuip-intense.1)uring 1989, tlwie were tangible signs of rnaiLet nwnt suc h as ief rigenitor s, ranges, miciowas e overn, iminutenent. GE management continues vigoiuus elforts ficcieis, dishwashers, t lothes washer s ar ut drycis, at xl to inninute cust cinnpetitiveness arul to ;xlapt linxlucts a xt nunn air coixlitioneis. Tiwse ar e vikt uixier GE, Ilotpoint mar Leting to the < hanging envinmment. Steam turbine-atxt hlomignun bnuxis aiul,incre.ningly, mxles ptivate generatois are soki to the electric utility i xiustry, to tlw braixis for ietailers.1)istribution of appliaixes using the U.S. Navy atx1, for cogeneration, to private iixtustrial cus.

RCA bratullegan in 1989. GE inicrowave ovens ami nxnn torners. hlarine sicam turbitws aiul pn> pulsion geais also air conditiorn is ar e siiainly sourt ed liorii foicigii stil> plier a ate sold to the U.S. Navy. Gas tuibiin s aie usal priticil> ally while investinent in Gmnpan)-owraxl dorriestic fiicilities is as pac Laged lxiwer l>latits for electric utilities aixi for focusal on refrigeratois, dishwashen, nmges aixi lx>me irxlustiial toge wration aixi iixxliattical claive applicatioits.

lauixiry equipnwnt. Acquisition of Rolwr Corlxiration in Centrif ugal compr essors are sold for application in gas 1988 addnl to GE's pn uluttis c capacity aixi bituxleinst its

cirijection, pijwlitie scivices aint pixx ess applications such puuluct of ferings,irxhuling gas ranges. A large portion of as refineries atxl ammonia plants. Although there have majoi appliarxe sales is to a variet) of ictail outlets with a been no nudear plant onless in the Unital States situe the significant lx>rtion of sales of certain pruducts such as mid 1970s azul international activity has been very low, G E lau:xtry njuipnwnt arxl iefrigerators twing for replace-continues to im est in advanced tec knology developinent nwnt of okler imxtucts. The other principal mai Let con-anul to focus its resources on refueling atxt serving its sists of icsidential buikling contractois wluiinstall nuijor installed boiling water reactors. Power delivery pnxtucts appliam es in new dwellings. A nationwide senice netwur L include transfonners, relays, ek ctric load management sys.

suplx its GE's alipliatice business. Euiulwaiiina Let partic-tems. lxiwer wnvenion systems atxl meters, principally ipation was expainted significantly in 1989 with the fonna-for electric utilities, instalhtion, engirwering anxi repair tion of a newjoint venture, sen ices inchule management arxl technical expenise for o Materials inchules high-lwi formaixe engineered large pntjects, such as imer plants; maintenance,inspec.

plastics used in applications suc h as substitutes lbr metal tion, repair anxi t ehuilding of electrical apparatus pro-and glass in automobiles and as housings for computers duced by GE atxt others; on site engineering aux!

and other busiin ss equipinent: silicones: super abrasives upgniding of already installnl pnxtucts sold by GE atxt suc h as man made diamonds; and laminates, h1a:Let otheti: atul environinental systems for utilities, opponunities for many of these pnxtucts are created by a TechnicalProducts and Screices consists of technology functional replacement that provides customers with an operations pmviding pnxtucts, systeins aixl services to a impnited material at lower cost. These materials are sold variety of customers. !!usinesses in this segment include to a diverse customer hase (mainly manufactureis) in the medical systems and senices, communications arul inibi.

Unital States anxlabnuxl. Auluisition of the chemicals mation senices, and certain other sluialized senices, businesses of Ilorg Warner Corporation at the end of hiedical systems include magiwtic resonarice (hlR) scan-1988's thint quarter provided GE with another pnuluct-ners, computed tomogniphy (CT) scannen, x ray, nuclear Alls resins, a family of thermoplastic resins used by cus-imaging, ultrasound, and other diagnostic equipment and tom molden and major original equipment manufacturers supixating senices sold to domestic anxi foreign hospitals Ihr use in a variety of applications, including fabrication of and medical facilities. Acquisitions andjoint ventures in automotive parts, telecommunications equipment, com-recent years have expandal GE's innlical systems activities puter enclosures, majoi appliance parts and pipe. The in world markets. G E Americom, a leading domestic satel-acquisition also added in hnical and manufacturing lite carrier. operates seven domestic satellites providing dis-strength anal doinestic a xt offshote ma:Leting facilities tribution senices for cable television, broadcast television and exlwnise that complement GE's other plastics busi-and nulio, and voice, video a:xt wideband data senices to nessea. hlaterials also indodes I;xid Petroleum Corpora-agencies of the fedend government. Cmumon canier serv-tion, an oil arxl natural gas developer and supplier with ices of Americom ar e sul> ject to regulation by the FCC. (As operations mainly in the United States.

of December 31,1989, GE Americom was transferred to o hwer Systems senes worldwide utility, industrial and G E Capital. GE Americom's operating resuhs will be governmental customers with pnxtucts for the generation, induded in GEFS beginning in 1990.) Infonnation serv-transinission and distribution of ekctricity and with related ices are providal lx th to internal anxi external customers installation, engineering and repair seniles. GE has by GE Infbrmation Senices, GE Consulting Sen ices and remained the leader in most power systems pnxtucts in the the GE Computer Sen ice openition. These indude face of a dedine in domestic anxl foicign tiia Lets for a number of years. Worldwide competition continues to be r

1 m

1

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enten< ed computer basal communications servic es, suc h thini party investois; arx1 commercial atx1 residential real '

l as data twtwot L senices, elect runic siiessaging arul ein-estate financitig. Attluisitiori of Moiiigortwiy Waitt & Co.'s tsunic data interchange, whic h aie offerni to comineirial cinlit operations in mid lil88 added to GE Capital's earn-Cf xi irKlustlial custorsief s Liliougli 8 wo:Idwide iK twoikl ing assets, p?niculat ly in cNdit cani openHions, which application sof twaie piu Lages; custom system design anxl continue to expaixl. GE Capital also is an equity investor 1

l pr ogramming servic es; aix! itxtelwrxlenit inairiteriarx e anxi iri c citativi other se:Tice atxl finaricial servic es on gariiratioris l

rental' leasing senites for ininicomputers aint micnxum-arul participates in leveragni buyouts. Although leasing puters, electninic test instnitin sits aixl data (oininunica-has tren a vitajor factor in GE Capital's giuwth over the tions equiptin nt. A seliarate services corn [xnient provides yeati, G E Cr.pital has actively (lianged its irnestiniesit [xnt-a varicty of slxtializal senices to governuwnt customets.

folio to place gr eater emphasis on asset ownership, man-In Da emtwr 151851, GE's inobile communications business agement aixl o[wnition. Virtually all pnglucts financnl was placulin ajoint ventuie with Eiicsson of Swnlen, by GE Capital ar e manufactuini by companies other This venture combines GE's nxibile nxtio manufacturing than GE.

aral distribution strength in North America with Ericsson's e insurance consists mainly of ERC, a multiple-line Euio[wan market stiength anxl xnition in digital cellular pinperty aixt casuahy reinsurer that writes all lines of rein.

i technology-surance other than title anxl annuities. ERC t einsures o Earnings ofandInvestment in GEFS aie shown on a pro [wny azul casualty risks written by more than 1,000 "one-line" basis in GE's segment data but are eliminated in domestic aixi foicign irisuiers anxl augtiwnts its foicigii consolidation. A separate discussion of GEFS segments business through subsidiaries hicated in the United King-appears below.

dom and Denmai k. By way of other subsidiaries, ERC o Allother for periods prior to lil88 consists umstly of writes property aixt casualty reinsurance through brokers fonner consumer electinnics openitions (principally video anni provides reinsunmce bivlerage senices. ERC also mal amlio pn xtucts, induding opemtions acquiini fmm writes certain spe ialty lines ofinsumnce on a direct basis, RCA in lilS0) anxl results of miscellaneous other activities principally en ess workers' compensation for self insurers, no longer pait of GE's business. Ongoing operations libel aiul allied torts, azul ernns atxt otitissions covenige for mainly involve licensing use of GE know-how to others.

insurance agents and brokers. It is licensal in all states of the Unital States, the District of Columbia, certain prov.

GEFs inces of Canada anxi in otherjurisdictions. ERC's busitwss The business of General Electric Financial Senices, Inc.

is generally subject to regulation by various insunmcc (GEFS) consists of the ownership of three afliliates that, regulatory agencies. Other insunmce activities of GEFS together with their affiliates mul other investments, consti-include GE Capital alTiliates that provide financial guaran-tute General Electric Company's principal financial serv.

tee insurance on selected securities, private mortgage ices activities. G EFS owns all of the conunon stock of insurance, life reinsunmce and, for GE Capital custonwrs, General Electric Capital Cor[x> ration (GECC) aixl of unut hfe and certain types of property / casualty insunmcc.

Employers Reinsunmce Corporation (ERC) aiul owns 80g a Sceuritics Bro &cr Dealer represents Kidder, Pealxxly, of Kidder, Pealxxly Gruup Inc. (the other 20% is held by which is a major investment banking and securities firm, or on behalf of certain Kidder, Pealxxty o(Ticers).

Principal businesses include wcurities uixierwriting; sales For itulustry segment purix>ses, Financing consists solely and tnuling of equity atxt fixed income securities; financial of activities of GE Capital; Insurance consists principally or futures activities; advisory senices for mergers, acquisi.

activities of ERC but also includes c citain insunux e enti.

tions anxl other corporate finance matters; inerchant bant-(

ties owned by GE Capital: Securities Broker Dealer con-ing; research senices; aixl asset managen ent. These l

sists entirely of Kidder, Pealxxly's operations; aixl All senices are pnnided in the United States and abroad to Other is mainly G EFS' cor[xmue activities not identifiable donwstic anxl fmeign business entities, governments, gov-with specific itxtustry segments, ernment agencies, mxt individual and institutional inves-Additional information alxmt each G EFS segment tors. Kidder is a member of the principal domestic fonows.

securities aixl comnuxlities exchanges aixi is a priinary l

c Financing activities of GE Capital include time sales, dealer in U.S. governinent securities. Certain affiliates of l

revolving credit and inventory financing for ietail mer.

Kidder, Pealx xty are subject to the rules and regulations of chants (major appliances, television sets, furnitme arxl O* Ed'""d M*Y NMW "F*5 U other hom'e furnishings, and personal computers); auto-apply to securities broker dealers, including the U.S. Secu-mobile leasing and automobile inventory financing; home rities and Exchange Onnmission, U.S. Onnnuxlity Futures and recreation finaix ing (principally tin $e sales and dealer Trading Coinmission New Yo:L Snick Exchange, National inventory financing of mobile homes); conunercial and Association of Securities Dealers aint the Chicago Boant of.I rade.

iixtustrial loans and equipinent sales financing lnovided thiuugh leases, time sales and loans; leasing senices for 67

9 i

I 34 ti u

1 Revenues On milliono f or the >cara eixled ikxember 31 Total revenues Imersegment ivvenues I.xternal revenuen 1989 1988 1987 1989 1988 liid 1989 1988 1987 l'nited $tates

$48,912

$46,361

$45,160

$ 1,107 $ 874 $ Hot

$17,805 $45,490 $14,359 Other atcas of the would 7,45H 5.576 4,894 639 977 1,095 6,769 4,599 3,799 Inicicoinpany cliininations (1,71NI)

(1,H51)

(1,H96)

(1,796) (1,851) (1,H96)

Total

$54.574

$50.089 $48,158 5,

$54,574 $50.089 $48.158 Operating profit Assets l'or the years eixled Iksemter 31 At Deirmler 31

]

1989 1988 1987 1989 1988 1987 United States

$ 6,070 $ 4,941

$ 3,715

$117,109 $102,327 $H9,480 Other atcas of the world 974 1,009 725 11,346 8,641 6,027 Intenumpmy eliminations (8)

(10) 10 (111)

(103)

(93)

Total

$ 7,036 $ 5.94(1

$ 4,450

$128,344 $110,865 $95.414 U.S. revenues include GE exlxirts to external custourts, Exports to external custoiners by major areas of the

ux! iuyahy arxl licensing income from foreign sources.

worki are shown on page 37.

35 o_..,

-i Hnuluaner Secosuliluaner Third quarter l'ounh quarter (Dollar amounts in millions:

twi.sharc amountiin dollare 1989 1988 1989 1988 1989 1988 1989 1988 Consolidated operations Net earnings

$ 849 $ 725

$ 972 $ 835

$ trl5 $ HIS

$1,173 $1,011 Net earnings per shatc 0.94 0.80 1.08 0.93 1.01 0.90 1.30 1.12 Dividends declanxl per share 0.41 0.35 0.41 0.35 0.41 0.35 0.47 0.4 i Common stock market price liigh 49 47 %

56 %

44 %

59 %

44 %

Gl% 46%

low 43 %

40 44 %

38%

51 %

52 % 42%

Selected data GE Sales of pnxtucts aint services 8,H68 7,975 10,188 9,245 9.616 9,3(Ni 12,347 12,29H Grou profa from sales 2,392 1,978 2,9H9 2,365 2,499 2,349 3,407 3,270 GEf S Revenues itom operations 2,H21 2,411 3,261 2,465 3,230 2,717 3,630 3,062 i

Operating profa 259 246 231 223 341 230 307 328 For GE, gross profit from sales is sales of g(xxis aint Secmxi, third-aint fourtisluarter 1988 net earnings se Tices less cost of g<nxis itixl services sold *I'hese costs of incituled siegative t fTects ($23 inillioti-2 cesits per share, s; des accounted for a relatively smaller piolx>rtion of GE

$43 inillion - 5 cents per share ain! $231 inillion - 26 operating costs in 1989 than in 1988, tellecting differeixes cents per shaie, respectively) of expenses anxl accruals for hetween the peri (xis froin acquisitions aixl disix>sitions as abnormally high warranty costs for certain refrigerator well as ongoing refinements among broad cost classifica-compressors.

tions, l'or GEFS, operating piulit is as presented on page 35 of this ieixirt.

t 68

i J

CorporateInfonnation

%.;. Hoedepserters Perm 10-K ansi Other Reports General Eintric Onnpany

'Ihe financialinfonnation in this re[xut, in the opinion of

]

3135 Easton Ibrnpike managenent, substantially confonns with or excnxis the

)

~

Fairfield, Conn. 06431 infonnation icquired in the "10-K Reixirt" to tw submitted j

(203)373 22l1 to the Snurities a:Kl Exchange Gunmissioti at the eix! of March. Cenain supplenwntal infonnation is in that re[xnt, however, anxi copies without exhibits will he available, "Ihe 1990 Annual Meeting of the General Electnc idmu@y fnun Corixirate Investor Comnmnica-4 Ounpany will be held on Wednesday, A nil 25, at the tions, Ge:wn! Electric Qunpany, Fairfield, Conn,06431.

i Wanwr Theatre m t.n,e, Pa.

Qiples of the Gerrmt Eintric Pension Plan, the Sum-Shees Ownerinspeletes mary Annual Report fbr GE employee benefit plans sub-When inquiring about share owner matten, contact:

ject to the Emplo>te Retire uent income Security Act of GE Securities Ownership Senices, P.O. Ilox 120065, 1974, and other GE employee twnefit plan documents arxl Stamfont, Conn. 06912, Telephone: (203) 326-4040.

inibnnation are available by writing to Qirporate Investor Commtmications and specifying the infonnation desis ed.

GE Fmancial Senices has a separute Annual Report, Share owners who have one or more shares of GE stock anxl txith it anxl GE Capital Corporation file Form 10 h registeied m. their names are eligible to invest cash tip to ReIxirts with the Securities arxl Exchange Gunmission.

$10,000 per month arxilor reinvest their divideixls,ri die t

Qipies of these repons may be obtained from: General GE Divideixl Reinvestment atxl Share Putthase Plan.

Electnc F mancial Senices, Inc., P.O. Ilox 8300, Stamiintl, For an authorization ionn acxl pluspectus, write to:

Conn. M927, Reinvestnwnt Plan Senices, P.O. Ilox 120068, Stamiinti, I he Annual Reixuts of the General Electnc Fouixlat,ons i

Omn.0691o

~

also may be obtaitxxl by contacting their ofTices at 3135 prinolpelTrenefer Agent ensi Registrer Easton 'I1 rnpike, Fairfield, Conn OM31.

j

'Ib transfer securities, contact: The 11ank of New York, Pd"

Receive & Deliver Department, Churrh Street Station, P.O. Ilox 11002 New York, N.Y 10249. Telephone:

For mibnnan n about GE consumer pnxtucts arxl sert-

.ices, call The GF. Answa Center

• at (800) 626-2000. For (800)524-1458, mfonnation about GE techincal, commercial arxl indus-Stock EmohengeInformation trial pnxtucts arxi sen ices, call the GE ilusiiwss Informa-In the United States, GE common stock is listext on the tion Center at (518) 438-6500. For infonnation atxnit the New York Stock Exchange (its principal market) aix! on varial financial pnglucts arxl senices offered by GE Capi-l the lloston Stock Exchange. GE common stock also is tal Corporation, call (800) 243 2222.

I listed on certain ioreign exchanges, including The Stock Exchange, le) xion arxl the 'Ibkyu Stock Exchange.

As of December 8,1989, there were about 515,000 share ownen oficcottl.

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C !!MK) General Electric Company Printed in U.S.A.

Note: Unless otherwise itxlicated by the context, the tenns *GE,"

• General Electric" ainl

• Company" are used on the basis of con-i solidation described on page 46. sIa t n a L $ e Liet nic, S, GE aixt RCA are registered trademarks of General Electric Company; A aiul NilC are registered trademarks of National liniad-l,l casting Compimy, Inc.: @ ain! " iiulicate egisteerd atul urireg-l J

isteitti trade mx1 service snarks.

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