ML20151B577

Forwards Revised Pages & Addl & Updated Financial Info Re License Amend.Sec Form 10-K for 1980 & GE 1980 Annual Rept Will Be Forwarded When Available

ML20151B577
Person / Time
Site:	07001308
Issue date:	02/04/1981
From:	Dawson D GENERAL ELECTRIC CO.
To:	Cunningham R NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
Shared Package
ML20151B575	List: ML20151B572 ML20151B577
References
DMD-519, NUDOCS 8102170546
Download: ML20151B577 (135)

Text

{{#Wiki_filter:, 6 v GENERAL ELECTRIC NUCLEAR ENERGY BUSINESS GROUP GENERAL ELECTRIC COMPANY,175 CURTNER AVE p FORNIA 95125 SPENT FUEL SERVICES OPERATI g / I. "Y G\\ DMD-519 N#ES.- C-k Docket No. 70-1308 cm. [.' ~ '957, Ml Materials License No. SNM-1265 7 .1 km y)'i h:: February 4, 1981 l :mug b h A;l Office of Nuclear Material Safety & Safeguards Attn: R.E. Cunningham, Director Division of Fuel Cycle & Material Safety U.S. Nuclear Regulatory Comission Washington, D.C. 20555

SUBJECT:

CHANGES AND CORRECTIONS, AMENDED APPLICATION FOR RENEWAL OF MATErlIALS LICENSE NO. SNM-1265

Reference:

Letter, B. Wolfe (GE) to R. Cunningham (NRC) dtd January 12, 1981 Gentlemen: We have enclosed certain revised pages for Attachments C, F, and G to the referenced letter. These pages may be sub-stituted for the corresponding pages in the original Attachments. Changed or corrected material is indicated by a vertical bar in the right margin of the replacement page. Additional and updated financial information is also enclosed to augment the General Electric 1979 Annual Report criginally furnished as Attachment E to the referenced letter. Securities Exchange Commission Form 10-K for 1980 and the General Electric Company 1980 Annual Report will be furnished when these become available. There is no preliminary prospectus available. These additions, changes and corrections are in response to comunications between your staff and our C.C. Herrington and H.A. Rogers. Please call H.A. Rogers (408*925-6496) if there are questions regarding the enclosed material. Respectfully, GEN RAL ELE TRIC COMPANY D.M. Dawson, Manager Licensing & Transportation DMD:HAR:bn Enclosure : 1,2,3,4 8102170 b6

e 4 NOTICE OF DISTRIBt1 TION to SERVICE LIST - DOCKET NO. 70-1308 In the matte ef General Electric's application for renewal of Materials License No. SNP-1265, copies of the documents discussed in the attached letter have been forwarded to the law firm of Mayer, Brown and Platt 231 Soutn LaSalle, Chicago, IL. 60604, counsel for General Electric Company, for transmittal to the service list as shown below: Andrew C. Goodhope, Esq., Chairman Atomic Safety and Licensing Atomic Safety and Licensing Board Board Panel 3320 Estelle Terrace U.S. Nuclear Regulatory Corrission Wheaton, Maryland 20906 Washington, D.C. 20555 Dr. Linda W. Little Docketing and Service Section Atomic Safety and Licensing Board Office of the Secretary 5000 Hermitage Drive U.S. Nuclear Regulatory Corrission Raleigh, North Carolina 27612 Washington, D.C. 20555 Dr. Forrest J. Remick Everett J. Quigley Atomic Safety and Licensing Board RR1, Box 378 305 East Hamilton Avenue Kankakee, IL 60901 State College, Pennsylvania 16801 Atomic Safety and Licensing Appeal Panel . U.S. Nuclear Regulatory Comission Washington, D.C. 20555 Brit'get Little Rorem Essex, IL 60935 Susaa N. Sekuler, Esq. George William Wolff, Esq. Offict of the Attorney General 188 West Randolph Street Suite 2315 Chicagc, IL 60601 Marjorie Ulman Rothschild, Esq. 1 United States Nuclear Regulatory Comission Washington, D.C. 20555 List 3/28/80 A l l i

4 e ENCLOSURE 1 REVISED PAGES FOR ATTACHMENT C Letter, B. Wolfe (GE) to R. Cunningham (NRC), dtd 1/12/81

C-2 (2) - 1.2; 1.2.2 through 1.2.2.3; 1.3 through 1.3.6 (3)(i) (ii) - Refer to SUbpart F (iii) (iv) - 4.6(*) (4) - 5.3 through 5.8, including 5.5.1(*),5.5.3.2(*), 5*.5. 5.4(*), and 5.7.1(*) (i) - see above (ii) - Chapter 8, and Appendix A.8, A.9, A.12 and A.13 (5) - Chapter 7; especially 7.2 and 7.6. Also, see Operating Experience Report (note 3), Sections 4.5 and 5.2. (6) - 1.3.5.1; 4.3.8.3 and 4.3.8.4; 5.4.2.3, 5.5.5.8. Also see Operating Experience Report Section 3.5 and 3.6. (7) - See Attachment H (8) - Chapter 9 (9) - NRR (10) - See response to Part 72.17 (11) - See response to Part 72.19 (12) - Chapter 6 (i) - Operating Experience Report, Sections 4 and 5 (ii) - 4.3.8.4; 5.4.2.3, 5.5.2 through 5.5.2.4, 5.5.4 through 5.5.4.2, 5.5.4.4, 5.5.5.7 and 5.5.5.8. Also, see Operating Experience Report, Sections 3.3 through 3.6. (iii) - 5.4.2.3 and Operating Experience Report Section 3.6 (13) - 8.7.1, 8.7.2.1, 8.8.3, 8.9.1, 8.10.3.1 and Appendix A.13 (14) - Chapter 11 and Appendix 8.8 (15) - See response to Subpart H (16) - NRR (17) - See response to 72.18 72.16 - See response to 72.33 72.17(a) - 1.1.1(*) (b) - Attachment F (c) - 9.2.3 (d) - 9.2.3.8

i i I C-4 72.66(a).(1 ) - NRR (2) - NRR (3) - NRR (4) - Appendix B.1 and B.2 (5) - NRR (6) - 4.2 through 4.2.5.2.3 (b) - NRR 72.67(a) NRR (b) f - See Attachment H (c) ) 72.68(a) - 1. 2.1. 5 (* ), 3. 2. 2. 4 (* ) (b) - 4.3.6.1(*) (c) - hR 72.69(a) - 3.2.2.4(*) (b) - NRR 72.70 - 3.8(*) Subpart F 72.71 - NRR 72.72(a) - 4.4(*) and Chapter 11(*) (b)(1) {-4.2(*)through4.2.6.2 (2) ) (3) - 4.4.1(*) (4) - 4.3.2.1(*) (c) - 4.3.7 through 4.3.7.2(*) (d) - NRR (e) - 4.3.1(*) (f) - 4.2(*), 4.3.4.1(*) through 4.3.4.3 (g) - 4.2.(*) (h)(1) - 4.1.2, 4.2(*), 4.3.2(*), 4.3.5, 4.3.7, 4.3.8 (includ-ing subsections of these principal sections). (2) - 4.3.2.1(*) (3) - 4.3.3.1(*) (i) - 4.3.4.1(*) (j) - 4.3.4.?'g*) (k) - 4. 3. 9.1 (* ), 5. 8. 2. 2

I 5 a l ENCLOSURE 2 ADDITIONAL INFORMATION FOR ATTACHMENT E Letter, B. Wolfe (GE) to R. Cunningham (NRC), dtd 1/22/81 f CONTENTS 1. Copy of Prospectus dated April 23, 1974, General Electric Company. 2. Stacemene at Annual Press Conference For Business and Financial Editors by Reginald H. Jones, Chairman and Chief Executive Officer, General Electric Company, January 22, 1981. 3. Form 10-K; Annual report pursuant to Section 13 of the Securities Exchange Act of 1934 for fiscal year ended December 31, 1979. Securities and Exchange Commission file number 1-35. e 4. Form 10-Q; Quarterly report pursuant to Section 13 of the Securities Exchange Act of 1934 for the quarter ended September 30, 1980. Securities and Exchange Commission file number 1-35. l l l l l

,6 n '~ '~ /.sv p 5 V: PROSPECTUS i9 Jm. q.h.D.0,, $300,000,000 2 n 7..:... x.ygjfy' General Electric Company w-3%% DEBENTU.RES DUE 2004 laterent pagebie Meg i and.Vecember i Redeemehle en 30 dage' nettee (e) et eng time et the option et the Compens, en a whole or la part, et 10840% to 20, 1978, and at deereening prices thernetter to and includise April 20, 1000 and thernetter and ineinding April et 100% and (b) coenmenet:,g Jter 1,1088 through operation et the sinking fund at 100%, together in eerk eene seith eeerned intereedt precsded. however, that the Compear meg not prior to Meg 1,1904 esereine its option to redeem eng Debentures directig or indirectig from or in enticipation of menere borrowed at en interent teet of teen then $J0% per enamen. The Company will provide an annual sinleing fund of $11,850,000 on each.11ay 1 from 1985 to 2003, Irhich is calculated to retire approximately 75?o of the issue prior to maturity; provided, however, that the Company may increase any annual sinking fund provision by not more has the right to surrender Debenture < av to credit optionally redeemed Debentures .than Sil,350,000, in llea of cash, and may credit any such annual payment or surrender in excess of $11,350,000 against any subsequent sinking fund obligation. Application teill be made te list the Debentures on the New York Steek Eschenge. THESE SECURITIES HAVE NOT BEEN APPROYED OR DISAPPROVED BY THE SECURITI' EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY 15 A CRIMINAL OFFENSE. PRICE 100%.LVD ACCRUED LVTEREST ilnderwriting Price to Discounts and Proceeds te Pubile(!) Comantenionec2) Comnearf1)(1) P e r Unit........ 1GO c*o % To 99%To To ea i........ A100,000,000 $2,623,000 S297,375,000 (1) Plus accrued interest finon May 1,1974. ] (f) Imeludes /se of J759, in respect of Debentures soki pursuant to Delayed DeHeery Costroots. (3) Before deduction of estimated exposses of !!$2,000. l I Debentures are offered by the several (*nderwriters named herein, subject to prior sale, when, as and if accepted by the Underwriters, anel mbject to approval of certain legal matters by Davis Polk & Wardicell, counsel for the Underwriters. It is expected that delivery of suca Debentures reill be made on or orbout.llay 7.1974 at the offler of.1[ organ Stanley f Co. Incorporated,140 Broadway, New 1*ork, N. l', against payment therefor in New 1* ark funds. 1,~ addition, Debentures are being offered to evrtain institutions through the several Under. writers for delivery on.iugust 22,1971 pursuant to Delayed Delivery Contracts teith the Company. See " Delayed Delivery.irrangements" herein. 3LORGAN ST.LVLEY & CO. GOLDMAN, SACHS & CO. l l Incorporated \\ .1pril 23,197s I

No person is authorized to give any information or to make any representation not contained in this Prospectus: nad any information or representation not contained herein must not be relied upon as having been authortzed by the Company or by any Underwriter. ADDITIONAL INFORMATION AVAILABLE The Company is subject to the informational requirements of the Securities Exchange Act of 1934 and in accordance therewith files reports and other information with the Securities and Exchange Commission. Current information concerning directors and orficers, their remuneration, options granted to them, the principal holders of securities, and any material interest of such persons in transactions with the Company, is disclosed in proxy statements distributed to stockholders of the Company and filed with the Commission. Such proxy statements can be inspected at Room 6101 of the office of the Commission,1100 L Street, N.W., Washington, D.C. where copies can be obtained from the Commission at prescribed rates. The Company's common stock is listed on the New York S:ock Exchange and the Boston Stock Exchange and reports, proxy statements, and other information concerning the Company can be inspected at such exchanges. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER. ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE DEBENTURES OFFERED HEREBY OR THE 7%% DEBENTURES DUE 1996 OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MICHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR IN THE OVER.THE-COUNTER MARKET. 3UCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. TABLE OF CONTENTS f.!*! Additional Info rmatio n Available 2 2 General Electric Ce mpany.............................................. 3 Purpose o f Issue...................................... 3 Ca pitaliza tio n....................................................... Statement of Curreat and Retained Earnings............................................ 4 5 Business.................................................................. Managemen of Oeneral Electric Company............... 10 1I Descri ptio n o f De bentures...................................................... I4 Underwriters.........~.............. .................. ~............................... I6 Dela yed Delivery Arran ge meats............................................................. !6 L e g al O pinio n s.......................................................................... I6 Ex perts......................... !7 Index to FinanciaI C atemenu... t Report of Inde. .ent Certified Public Accountants......... 17 !8 Financial Statements......................................................................... GENERAL ELECTRIC COMPANY General Electric Company was incorporated on April 15,1892 in the State of New York. Its principal place of business is at i River Road, Schenectady, New York 12345. Executive orfices are maintained at j 570 Lexington Avenue. New York. N. Y.10022 (Tel. No. 212 750 2000). As used herein. the terms c " Company" and " General Electric" refer to General Electric Company and its consolidated affiliates unless the context otherwise indicates. l 2

PURPOSE OF ISSUE The net proceeds from the sale of the Debentures offered hereby (estimated at $297.1 mdlion) will be added to the general funds of the Company and will be used to reduce dornestic short term borrowings which were approximately $644.1 mdhon at March 31,1974. Aggregate short term borrowings of General Electric at that date were about $876.4 mdhon. Such short. term borrowings have been incurred by the Company primarily to finance increased working capital requirements to support a steadily increasing sales volume. Any additional ihnds required for this or other purposes may be provided by the Company out of its cash resources, or from the proceeds of borrowings, or the sale of additional securities. CAPITALIZATION The capitalization of the Company at March 31,1974 and as adjusted to give effect to the issuance of i the Debentures is as follows: As t March As 31.1F14 Adimesed [ ( Amouses la sulliams) 1.ong term borrowings(a) 3 %% Debencures due 1976.. S 84.3 S 84.3 I General Electric Company 125.0 125.0 i f 6%% Debencures due 1979...... 106.2 106.2 i 5 %% Notes due 1991... I56.7 156.7 i 5.30% Debentures due 1992........ 200.0 200.0 j 7%% Debencures due 1996... 300.0 8 %% Debentures due 2004......... General Electric Oveneas Capital Corporation borrowings................. I82.9 182.9 59.9 59.9 Other long-term borrowings( b)............................................ 9 I5.0 1,215.0 Total long-term borrowings........................................... i 61.4 61.4 l Minority interest in equity of consolidated affiliates......... i Share owners' equity Preformd stock ($1 par value: 2,000,000 shares authorized: none issued).. l Common stock ($2.50 par value: 210,000,000 shares authonzed: 463.8 463.8 I85,542,946 issued )..... Amounts received for stock in excess of par value....................... 409.6 409.6 i 2,733.I 2,733.1 l Retained earnings 3,606.5 3.606.5 l Less: Common stock held in treasury ( c)......... I89.I I89.1 Total share owners' equity............................................ 3,417.4 3,417.4 Total capitalization........................ Sg S4.6g i (a) Excludes $42.4 million due within one year. (b) These borrowings primarily represent borrowings of foreign atllliates except S15.5 million which are direct obligations of General Electric Company. (c) Represents 3,462,064 shares including 1,323,380 shares contingently allotted under the Com-I pany's incentive compensation plans and 1,500,931 shares available for conversion of General Electric l Overseas Capital Corporation convertible indebtedness described in Note 8 to financial statements. j At March 31,1974, short term borrowings of General Electric Company amounted to $644.1 million 1 and on the same date short term borrowings of the Company's consolidated affiliates amounted to $232.3 million. Deposits restricted as to usage and withdrawal or used as partial compensation for short term borrowing arrangements are not material. Of the total borrowings of consolidated affiliates, both long-term and short. term, S240.1 million was guaranteed by General Electric Company as of March 31, 1974, including all borrowings of General Electric Overseas Capital Corporation. l General Electric Credit Corporation, a wholly-owned nonconsolidated finance affiliate of tSe l Company, had outstanding approximately SI,948.0 million of short. term borrowings and $1,024.6 million l i oflong-term borrowings at the end of March 1974. Separate financial statements for General Electric Credit Corporation and consolidated affiliates are included elsewhere in this Prospectus. 3

GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES STATEMENT OF C11RRENT AND RETAtNED EARNINGS The following statement of current and retained earnings of General Electric Com i consolidated affiliates has been examined by Peat, Matw conjunction with the other Saancial statements of General Electric Company and and notes to 6nancial statements included elsewhere herein. Year ended December 31, 1972 1973 _IN9 1 _979 1 _7 71 ( Amouem le milisens) 58.448.0 $8.726.7 $9.425.3 310.239.5 $1 f.575.3 Net sales bdied 6J46.1 6.423.6 6.962.1 7,509.6 8.515.2 Opersuas cosas: Cost or scods sold (3)(17)(18). Selling, general and ademimsave expenses 1.615.3 1.754.2 1.72 6.2 1.915.2 2.105.3 (l7)(l8) 7.961.4 8,177.C 8.688.3 9.424.8 10.620.5 486.6 348.9 737.0 814.7 954.8 98.7 106.8 152.0 189.2 183.7 j Opersuas margin j. Interest and other Anancial charges ( 16 ) - ( 78.1) (101.4) (%.9) (106.7) (126.9) Otherincome (14) _ 507.2 5543 792.1 897.2 1.011.6 Earmass before income taxes and manoruy interest Provuaos forincome taxes (15) (231.5) i220.6) (317.1) (364.1) ( 418.7) i l Minonty interest in earnana of consoudated affli. 2.3 ( 5.2) ( 3.2_) ( 3.t ) ( 7.8 ) iates 278.0 328.5 471.8 530.0 185.1 5 Net earmass applicable to common stock ( 235.2) (235.4) (249.7) ( 254.8) (272.9) Dividendsdeclared - 42.8 93.1 222.1 275.2 312.2 1 Amount added to retained earmags Retained earmass January I 1.738.2 1.781.0 1.874.1 2.0%.2 2J71.4 Retaaned earnings December 31. 31.781.0 $1.874.1 $2.0%.2 $ 2.371.4 3 2.683.6 j Deprecianan included in "opersuas coses' above $ 351.3 5 334.7 $ 273.6 5 314.3 5 J34.0 180.%5 181.1l4 181.684 182.112 182.051 Average number of shares outstanding (in thou-l $1.54 $1.8i $2.60 32.91 53J1 sands)(a) y Earmass per common share (in dollars ) ( a )( b ). $1.30 $l.30 $l.38 $1.40 $1.50 Dividends declared per common share (in dol-l lars H a) l l'.auo of earnangs to azed charges (c): 6.10 SJ9 7.52 7.73 7J3 Consolidaied Combined mth General Elecmc Credit Cor. 3.69 3.33 4.68 4.80 3.94 poruuon Numerical note references are to notes to Saancial statements. (1) Amounts representing number of shares and per share data have been adjusted f 1 one stak split in April 1971. t ( b's Any dilution of earnings per share which would result from the potential exercise or c I such items as stock options or convertible debt outstanding is insigni6 cant (less than 1%'5 in a T shown). Fully diluted earnings per share for 1973 would be computed based on assumed co f the convertibit, indebtedness of General Electric Overseas Capital Corporation, a wholly owned arT the Company, exercise of stock options and issue of shares held under deferred incentive compensa 0 plans. Net earnings for the computation would be adjusted to eliminate appropriate inte t, h expenses related to the deferred incentive compensation shares, net of taxes. On this basis 185.123.000, net esrnings applicable to common stock would have ] outstanding in 1973 would have been been S$88.0 million and fully diluted earnings per share would have been S3.18, i 4

4 (c) For the purpose of this ratio, earning consist of earnings before income taxes and Axed charges but exclude undistributed earnings of nonconsolidated amliates and associated compames. Fixed charges i consist of interest and other financial charges, one-third of rentals, and preferred stock dividend requirements of a consolidated amtiate. The pro forma ratio of earnings to fixed charges for 1973 for General Electric Company and consolidated amliates, after giving efect to issuance of the Debentures and the related reduction of short term borrowings,is 7.29. The pro forma ratio of earnings to fixed charges for 1973 for General Electric Company and consolidated amtiates combined with General Electric Credit Corporation is 3.93. The initial annual interest requirement on the Debentures will be S25,500,000. [ t i Operations of General Electric for 1969 and 1970 were severely afected by an extended strike which began in October 1%9 and ended in February 1970. l Earnings for 1969 were also adversely afected by the developing nuclear power equipment business, primarily as the result of commitments for eleven " turnkey" projects which were made in the 1963-66 period to win customer acceptance of this new technology. The Company transferred its information systems equipment business to Honeywell Information l Systems Inc., a subsidiary of Honeywe!! Inc., in October 1970. Losses associated with this business are included in 1969-70 operations. Recent Operating Results For the first quarter of 1974. net sales billed amounted to S2,909 million compared with $2,547 . million for the first quarter of 1973. Net earnings for the first quarter of 1974 amounted to $122.3 million (67 cents per share) compared with $114.4 million (63 cents per share) for the first quarter of 1973. Interim operating results are unaudited but, in the opinion of management, ine'lude all adjustments ? (consisting only of normal recurring accruals) considered necessary to present a fair statement of the results of operations. The results of operations for the 1974 period should not be regarded as necessarily i indicative of the results that may be expected for the entire year. ( l BUSINESS j l General I General Electric, from the time of its incorporation in 1892, has been primarily engaged in developing, manufacturing and marketing a wide vanety of products used in the generation, transmission, distribution, control and utilization of electncity and related technologies. The Company is generally regarded as the largest and one of the most diversined producers of electrical equipment, although its relative position as to individual products varies considerably. j The business of General Electric is highly competitive, with competition for certain products, such as large power equipment and atreraft engines, coming primarily from a relatively small number oflarge and well-established concerns, and in other bananas from numerous competituc, both large and small. I General Electric Company has a majority interest in, or manages, a number of foreign amtiates engaged primarily in electrical and electronic manufacturing and distributing operations in foreign countries. In addition, the Compuy has substantial export sales from the United States. The Company also has a minority interest in several foreign electncal and electronic manufacturing and distnbuting compardes. Based on National Science Foundation definitions, worldwide expenditures for research and development funded by General Electric were over $330 million dunng 1973. At the end of 1973, General ( i Electric employed approximately 6,200 scientists and engineers in this activity. In addition the Company performs research and development funded under contract primarily for the U. S. Government. During 1973 these expenditures aggregated about S515 million and the Company employed approximately 6,700 l scientists and engineers in this activity at year end. 5

.) f '\\ } The energy situation has had varying efects on diferent segm:nts of the Company's business, but the 1 overallimpact has not been signi6 cant in the opinion of management. While management cannot predict i how the energy situation may afect future results it has caused a wider recognition of the importance of nuclear energy for both United States and overseas power requirements. Opposition to nuclear plants on environmental grounds continues, but interest has been stimulated in reducing the regulatory delays which have been afecting nuclear plant construction in recent years. Since its commencement in August 1971 the Government's Economic Stabilization Program has tended to reduce the Company's ability to make timely increases in its prices during an indationary period. Competitive and other factors have also afected prices, however, and management does not believe that the program has had, or will have, a significant impact on its overall business. Sales and Products General Electric products md services are classi8ed in six categories. The approximate amount of sales and income or loss before ' axes and minority interest attributable to each of the five categories in the consolidated group, as well as the net income after taxes of General Electric Credit Corporation are shown below for the last five years: Year ended December 31. 1973 1969 1970 1771 _t972 ( Amouses le mittless) 4 SA!.ES Consolidated Operations Aerospace.................. St.688 S1.666 $1.623 S 1.514 5 1.611 Consumer..................... 2.155 1.969 2.383 2.782 3.097 Industrial Components and Sys-2.774 2.848 2.865 3.I58 3,728 tems. Industrial Power Equipment... 1.474 1.880 2.131 2.249 2.477 International....................... 1.201 1.393 1.584 1.830 2,318 Corporate Elimmations and Unallo-cated Items (844) ( ),029) (l.161) (l.294) (l.656) To tal ............... S8.448 58.727 $9.425 _S10.239 $11.575 INCOME Consolidated Operation (income before taxes) Aerospace... ............... S 29 S 44 S 63 S 47 S 69 Consumer..... 232 132 182 250 263 Industrial Components and Sys- !86 165 242 279 328 te ms...................... Industrial Power Equipment.. (20) 148 195 209 207 International........ 91 113 148 173 265 General Electric Credit Corporation (income after taxes). 15 20 31 41 42 Corporate Eliminations and Unallo-cated Items........ (25) (68) (69) ( 102) (l62) Provision for Income Taxes.............. (232) (221) (317) (364) (419) Minority interest in earnings of consol-idated adiliates...................... 2 (5) (3) (3) (8) To tal..................-..... S 278 $ 328 5 472 S 530 S 585 Comparisons of results by cr.tegory should take into account that various factors in any year afect the Company's operations unevenly. The factors discussed following the Statement of Current and Retained Earnings had varying impacts on sales and income by category. Profit in the Industrial Power Equipment category did not keep pace with sales in 1973 principally because costs of sett!ing certain outstanding customer claims were charged to this category during 1973. These were ofset, however, by corporate reserves, resulting in no efect on the total earnings of the Company. 6 -~-- ~.

e Sales and income f:r each maj:t category include inter-category transacuans. To the extent and income are recognued in more than one category, appropriate elimination is made under " Corporate Elimmations and Unallocated items". Income before taxes for each major ca allocation of corporate items, such as expenses of corporate headquaners personnel and the R Development Center, and interest and other ananctal charges and income. Approximately one sixth of net sales in 1973 were to agencies of the United States Governm which is the Company's largest single customer. In general, sales to the Government are subjecl j termination and renegotiation procedures by statute. l 31, 1973 aggregated S14.2 billion, General Electric's backlog of unfilled orden at DecemberApproximately one third of compared with 311.2 billion at December 31,1972. end of 1973 are scheduled for shipment in 1974, with the remainder scheduled for shipment in sub years. These orders relate primarily to the longer cycle products in the Industrial Powe categoty. Representative items included in each major category are shown below: Aeroepece aerospaceinstruments Aight controls radar systems aarcraftjet engines missile re entry systems sonar systems armament systems product service space Hight systems Consuener air conditioners dishwashers ranges appliance service heat pumps refrigerators stereo equipment broadcasting lamps clothes dryers personal appliances tape recorders television receivers clothes washers portable appliances radio receivers Industrial Components and Systems insulating materials adjustable-speed drives controls ballasu ' cutting tools medical systems batteries electric motors plastics electronic tubes silicones capacitors transportation systems communication systems equipment service computer time-sharing industrial heating wire and cable constant speed drives information systems wiring devices equipment *

• Through September 1970.

Industrial Power Equipment mechanical drive turbines relays gas turbines steam turbine-generators installation and meters service engineering nuclear fuel switchgear transformers marine turbines and gears nuclear power reactors power circuit breskers 7 i L

d Internatiosial j This category includes exports from the United Stat 4s to customers worldwide and the operations of diversided ASliates in such countries as Australia, Brazil, Canada, Italy, Mexico and Spain. As a percentage of sales in this category, exports have increased in importance since 1969 and in 1973 accounted for over 40% of the total. Operations of nondiversided foreign amliates are included under

l other appropriate categories.

i General Electric Credit Corporation i General Electric Credit Corporation, a wholly owned nonconsolidated Anance aMliate, has steadily expanded fmm its original base in General Electric consumer goods anancing and has become a broad-l based, widely diversided ananctal service business. The majority of products financed by the Credit i Corporation are manufactured by companies other than General Electric. 1 i t l General Electric has received, through 1973, nuclear fuel orders totaling St.9 billion essentially for j delivery through the mid 1980's. The Company's customers have required that fuel be sold with j warranties related to thellife span. Experience with fuel life is still not suscient to assure how the fuel will ] perform in comparison with warranties. 4 l General Elecric manufactures the CF6 aircraft je. ngine for the McDonall Douglas DC.10 and the European A300 wide. bodied transport. In line with.ndustry practice, this program involves substantial Snancing commitments to the airlines. Such Snancing commitments are generally on a long term unsecured basis. Expansion of Facilities During the Ave years ended December 31,1973, General Electric invested approximately S2.7 billion i in (and, buildings, machinery and equipment (including equipment leased to customers) as shown in the table below: Retirements Plant and not of equipenses accumulated expenditures depreciaties ( Amesets le miluons) !969................................... S530.6 S 28.8 1970............................... 581.4 371.5 1971.................. 553.! 7.9 1 9 72.......... 435.9 13.3 1 9 7 3.............................. 598.6 32.2 4 Retirements in 1970 included the transfer of plant and equipment of the information systems equipment business to a subsidiary of Honeywell Inc. Expenditures for plant and equipment in 1974 are expected to continue at about the 1973 level. The Company operates some 215 manufacturing plants located in 33 states in the United States and Puerto Rico, and approximately 80 manufacturing plants in 20 other countnes. Employee Relations During 1973 the Company employed an average of 388,000 people throughout the world, of whom 304,000 were in the United States. Approximately 50% of the United States employees are represented for collective bargaining purposes by a total of around 325 different local collective bargaining groups. 8

f However, a large majority of these employees is represented by local unions which are adiliated with, and which bargain in conjunction with, one or the other of two national unions, namely, the International Union of Electncal, Radio and Machine Workers ( AFL-CIO) and the United Electrical, Radio and Machine Workers of America. During May and June of 1973 the Company negotiated thirty seven month contracts with almost all the United States unions with which it deals. Most of these contracu will terminate in June 1976 and the rest will termmate later in the same year. The wage and benefit improver'ients granted under these contracts have gone and will go into efect over the period of the contracts an 1 are tied in part to cost of living escalator clauses. Substantially sundar improvements have been or will % made for the Company's non. represented employees. Legal Proceedings On December 29,1971 four substdiaries of American Electric Power Co., Inc. filed suit in the United States District Court for the Southern District of New York against Genetal Electric and M c.:inghouse Electric Corporation. The suit challenges General Electric's price policy for the sale of turbine anerators, alleges the existence of a combination in violation of the antitrust laws anci requests treble damages in an unspecided amount with respect to turbine generator purchases made by the American Electric subsidiaries and such other relief as the court may deem necessary. The suit is now in the pretrial phase and a Anal decision is unlikely until the late 1970's. Based on the exisung state of the law, General Electric is confident of its ability to prevail but the outcome is, of course, subject a the inevitable uncertainties of litigation. General Electric has granted an extension of the statute of limitations to other utilities with respect to their purchases of turbine generators. On February 22,1974 the United States District Court for the Soutnern District of New York entered a Anal judgment in a civil antitrust suit brought by the United States Department of Justice against the Company under the Sherman Act. This judgment provides, inter alia, that upon the expiration of 120 days after its effective date, the Company is enjoined from entering into or maintauung agreements with ) consignment agents with respect to large lamps, or seiling or supplying such agents with large lamps under conditiona.which, in either case, limit the prices or terms or conditions on which such lamps may be sold or l consigned. General Electric does not presently intend to appeal the judgment which becomes effective 60 days from date of entry. The Company does not believe that the changes required by the judgment in its l method of distributing large lamps will have a material adverse ese t on the Company. l On May 18,1972 the United States Department of Justice filed a civil antitrust suit. gainst the Company in the United States District Court for the Northern District of New York. This suit claims that the Company has used unlawfbl reciprocal purchasing arrangements since at least 1965 and seeks an injunction and related relief against continuation. The suit is in the pretrial phase and no disposition is expected in the near future. 9

i MANAGEMENT OF GENERAL ELECTRIC COMPANY The directors and principal executive omcers of General Electric Company are shown belo v: Directors J. Paul Austin Henry H. Henley, Jr. Edmund W. Littlefield Dean A. McGee James G. Boswell11 Henry L Hillman Silas S. Cathcart Frederick L Hovde Jack S. Parker Walter D. Dance Gilbert W.Humphrey Gilbert H. Scribner. Jr. Charles D. Dickey, Jr. Reginald H. Jones Herman L Weiss Walter B. Wriston Thomas S. Gates John E. Lawrence Ralph Lazarus Principal Executive Oficers Chairman of the Board and Chief Executive Omcer Reginald H. Jones...................... Vice Chairman of the Board and Executive Omcer Walter D. Dance............................ Vice Chairman of the Board and Executive Omcer Jack S. P arker. Vice Chairman of the Board and Executive Omcer Herman L Weiss..... H e rshner Cross.......................... 5enior Vice Presiden Senior Vice President Oscar L D unn................................. Senior Vice President. General Counsel and Secretary Ro bert M. Estes........................... Reuben Gutoff................................ Senior Vice President i Tho m as O. P aine............................ Senior Vice Presideat Charles E. Reed............................... Senior Vice President Vice President and Group Executive John F. Burlingame...... Robert R. Frede rick........................... Vice President and Group Executive Vice President and Group Executive l S tanley C. G a ult.......................... Edward E. Hood, Jr.................. Vice President and Group Encutive Vice President and Group Executive Ro bert B. K urtz............................ Vice President and Group Executive l M a r k M o rto n................................. Vice President and Group Executive Gerhard Neumann......................... l Arthur E. Peltosalo.. Vice President and Group Executive Thomas A. Vanderslice................ Vice President and Group Executive John F. Welch, Jr.. Vice President and Group Executive l Vice President-Finance Alv a O. W ay....................... Vice President and Comptroller M a urice H. M a yo........................ Walter A. Schlotterbeck................ Vice President and Corporate Counsel l Russell E. Whitmyer= Vice President and Treasurer { t 4 }' 10

DESCRIPTION OF DEBENTURES The Debentures are to be issued under an Indenture dated as of May 1,1974 between the Company and First National City Bank. Trustee (hereinafter referred to as the " Trustee"). The Debentures are limited to $300,000,000 principal amount but the Indenture does not limit the amount of other debt, either secured or unsecured, which may be issued by the Company. The Debentures will be issued in fully registered form only, in denominations of $1,000 and any multiple thereof. The following statements are subject to the detailed provisions of the Indenture, a copy of which is l died as an exhibit to the Registration Statement. References in italics are to the Indenture. Wherever particular provisions of the Indenture are referred to, such provisions are incorporated by reference as a part of the statements made and the statements are quali6ed in their entirety by such reference. Principal and any premium are to be payable, and the Debentures may be transferred or exchanged, without any service charge, at the office of the Company in the Borough of Manhattan, City of New York, i which initially will be at 570 f.exington Avenue, New York, N. Y.10022. Interest at the annual rate set forth on the cover page hereofis to be payable semi annually on May I and Noven ber i to the persons in whose names the Debentures are registered at the close of business on the 15th day of the calendar month preceding such May I or November I and will be paid by checks mailed to such persons. The Debentures will mature on May 1,2004. l Redemption j The Debentures may be redeemed on at least 30 and not more than 60 days' notice at the option of the Company, as a whole or in part, at any time, at the following redemption prices (expressed in { percentages of principal amount) together with accrued interest to the date fixed for redemption (Arriels Three): If redeemed during the twelve. month period beginning May 1, t Yest Peteentese Year Pereewom Year Peressesse t 19 74........ 108.50 % i 9 8 4....... 105.10 % ! 994......_............ 101.70 % l 1975.. 108.16 I985... 104.76 199 5............. 101.36 I 9 76........ 107.82 19 8 6.... 104.42 1996................... 101.02 19 77......... 107.48 1987.. 104.08 I997.......... 100.68 1978.. 107.14 19 8 8................... 103.74 199 8...... ....... 100.34 l 19 7 9.......... ~.. 106.80 19 8 9.................. 103.40 l 999............... 100.00 j i980......... 106.46 1990............. 103.06 2000................. 100.00 t i 9 8 i.............. 106,12 199 1................. 102.72 200 I................... 100.00 19 8 2...... 105.78 1992................ 102.38 2 002............... 100.00 19 8 3................... 105.44 1 9 9 3................. 102.04 200 3................. 100.00 Notwithstanding the foregoing provisions, the Company may not redeem any of the Debentures prior to i May 1,1984 directly or indirectly from or in anticipation of moneys borrowed by or for the account of the Company or any Subsidiary at an interest cost ofless than 8.50% per annum (Section 1.01). l i Sinking Fund i As a sinking fund, the Company will pay to the Trustee before May 1 in each of the years 1985 to 2003, inclusive, an amount sufficient to redeem at 100% of their principal amount (the sinking fund { redemption price), together with accrued interest to the date 6xed for redemption, SI1,850,000 principal amount of Debentures: provided, however, that the Company may increase any such annual sinking fund t payment by not more than S11,850.000, may surrender Debentures or credit optionally redeemed Debentures at the sinking fund redemption price in lieu of cash, and may credit any such annual payment or surrender in exuss of SI1.850.000 against any subsequent sinking fund obligation. Subject to the right to carry over amounts of tess than $50,000, the Trustee on at least 30 and not more than 60 days' notice will apply cash sinking fund payments to the redemption of Debentures on the succeeding May I at the i sinking fund redemption price (Section 1.04). f 11 i I 1 -.m

l Certain Covenants of the Company The Company covenants that, so long as any of the Debentur:s remain outstanding, it will not, nor i l wul it permit any Manufactunns Subsidiary (as dermed) to, issue, assume or guarantee any debt for money borrowed (herein referred to as " Debt") if such Debt is secured by a mortgage (as defined) upon any manufacturing plant or facility, located within the continental United States of America, of the Company or any Manufacturing Subsidiary which, in the opinion of the Board of Directors,is of material importance to the total business conducted by the Company and its Manufacturing Subsidiaries as an entity (any such plant or facility being herein referred to as a " Principal Property") or upon any shares of stock or indebtedness of any Manufacturing Subsidiary (whether such Principal Property, shares of stock or indebtedness are now owned or hereafter acquired) without in any such case effectively providing that i the Dei.entures shall be secured equally and ratably with such Debt, except that the foregoing restriction i shall not apply to (i) mortgages on property, shares of stock orindebtedness of any corporation existing at the time such corporation becomes a Manufacturing Subsidiary. (u) mortgages on property existing at the 1 time of acquisition thereof and certam purchase money mortgages: (iu) mortgages securing Debt owing i by any Manufactunng Subsidiary to the Company or another Manufacturing Subsidiary: (iv) mortgages on property of a corporation existing at the time such corporation is merged into or consolidated with the Company or a Manufacturing Subsidiary or at the time of a sale, lease or other disposition of the properties of a corporation as an entirety or substantially as an entirety to the Company or a 1 Manufacturing Subsidiary: (v) mortgages on property of the Company or a Manufacturing Subsidiary in favor of the United States of America or any State thereof, or in favor of any other country, or any political subdivision thereof to secure payments pursuant to any contract or statute or to secure any indebtedness i incurred for the purpose of financing all or any part of the purchase pnce or the cost of construction of the property subject to such mortgages; or (vi) any extension, renewal or rer.lacement (or successive extensions, renewals, or replacements), in whole or in part, of any mortgage referred to in the foregoing l clauses (i) to (v), inclusive. Notwithstanding the above, the Company and one or more Manufacturing Subsidiaries may, without securing the Debentures, issue, assume or guarantee secured Debt which would otherwise be subject to the foregoing restrictions, provided that after giving effect thereto the aggregate amount of such secured Debt then outstanding (not including secured Debt permitted under the foregoing exceptions (i) through (vi)) does not exceed 5% of the share owners' equity in the Company and its consolidated ar1111ates reported in the latest published annual report to the share owners of the Company. [ (Section 4.03), Transactions involving the sale and leaseback by the Company or any Manufacturing Subsidiary of I any Principal Property owned on May 1,1974 are prohibited unless (a) the Company or such Manufacturing Subsidiary would be entitled to issue, assume or guarantee Debt secured by the property involved equal in amount to the Attributable Debt in respect of such transaction without equally and ratably securing the Debentures, provided that such Attributable Debt shall thereupon be deemed to be Debt subject to the provisions of the preceding paragraph, or (b) an amount equal to such Attributable Debt is applied to the retirement of funded Debt of the Company or a Manufacturing Subsidiary. Attributable Debt is defined as the present value (discounted at a rate of % of 1% per annum over the interest rate on the Debentures) of the obligation of a lessee for rental payments during the remaining term of any lease. (Section 4.04). Modification of the Indenture y The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66% in principal amount of the Debentures at the time outstanding, to execute supplementalindentures addin any provisions to or changing in any manner or eliminating any of the s provisions of the Indenture or any supplemental indenture or modifying in ariy manner the rights of the holders of the Debentures: pernded that no such supplemental indenture shall (i) extend the fixed maturity of any Debentures, er reduce the principal amount thereof, or redemption premium thereon. or reduce the rate or extend the dme of payment ofinterest thereon, without the consent of the holder of each Debenture so arrected, or (u) reduce the aforesaid percentage of Debentures the consent of the holders of which is required for any such supplemental indenture, without the consent of the holders of all Debentures then outstanding. (Section 10.02). 12 e- - + - - -

_= a Events of Default An Event of Default is denned in the Indenture as being: default for 30 days in payment ofinterest on the Debentures; default in payment of principal of and premium,if any, on the Debentures; default for 30 days in payment of any sinking fund installment: default for 60 days after notice in performance of any other covenant in the Indenture; and certain events in bankruptcy, insolvency or reorganization. (Sect /en 6.01). The Company is required to Ale with the Trustee annually an Omcen' Certiacate as to the absence of certain defaults under the terms of the Indenture. (Seerion 4.07). The Indenture propdes that the Trustee may withhold notice to the holders of the Debentures of any default (except in payment of ) l principal of or interest or premium on the Debentures or in the rnaking of any sinking fund payment) ifit considers it in the interest of the holders of the Debentures to do so. (Seerlon 6.08). The Indenture provides that if an Event of Default shall have occurred and be continuing, either the Trustee or the holders of 25% in principal amount of the Debentures then outstanding may declare the pnnapal of all the Debentures to be due and payable immediately, but upon certain conditions such declaration may be annulled and past defaults (except, unless theretofore cured, a default in payment of prmcipal of or interest or premium on the Debentures) may be waived by the holden of a majority in i principal amount of the Debentures then outstanding. (Sectiomr 6.01 and 6.07). Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default shall occur and be continuing, the Trustee shall be under no obdgation to exercise.any ofits rights or powers under the Indenture at the request, order or direcnon of any of the holders of the Debentures l utdess such holders of the Debentures shall have escred to the Trustee reasoa We indemnity. (Sections 7.01 and 7.02). Subject to such provisions for the indemniacation of the " rm the holders of a majority in principal amount of the Debentures at the time outstanding,hrJ %

• da right to direct the time, l

method and place of conducting any proceeding for any remedy availt e a m Trustee, or exercising any trust or power conferred on the Trustee, provided that the Trustee may occune to follow any such direction l if it determines that the proceedmss so directed would be illegal or involve it in any personal liability. (Section 6.07). Concerning the Trustee Ftrst National City Bank is the Trustee under the Indenture. First National City Bank is also Trustee under the Indentures under which the Company's 3B% Debentures Due 1976,6%% Debentures Due 1979 and 7%% Debentures Due 1996 are issued and under the Indentures under which General Electric Overseas Capital Corporation's (a wholly owned consolidated amliate of the Company) 4%% Guaranteed Bonds Due 1985 and 4%% Convertible Guaranteed Debentures Due 1987 are issued. Mr. Walter B. Wriston, Chairman of First Nationa'. City Bank, is a director of General Electric Company. General Electric Company and certain ofits astiates have been granted lines of credit by First National City Bank and have other relationships with First National City Bank in the ordinary course of business. l 13

UNDERWRITERS Under the terms of and subject to the conditions contained in an Underwriting Agreement dated April 23,1974, the Underwriters named below have severally agreed to purchase, and the Company has agreed to sell to them, severally, the respective principal amounts of Debentures set forth below, less such Underwriters' respective amounts of Contract Debentures determined as described under " Delayed Delivery Arrangements". I rincipal Prtneipal Nesse Amouse Name Amoest Morgan Stanley & Co. Incorporated, S 33,200.000 Shelby Cullom Davis & Co. 1 500,000 Goldman. Sachs & Co. 33, 00,000 Devia, Skasss & Co., Inc, 300,000 ABD Securities Crarporation t.100,000 De Haven & Townsend, Crouter & Bodine 100,000 Abraham & Co. Inc. 300,000 Dillon. Read & Co. Inc., 4,400,000 Adams & Peck. 300,000 Doft & Co. Inc.. 8M000 Advest Co.. 1,100,000 Dominick & Dommick, Incorporated L400,000 Alden & Co. Incorporated 200,000 Dominion Securities Harris & Partners Inc. 800,000 Allen & Compeny Incorporated. 1,100,000 Drazel Burnham & Co. Incorporated 4,400,000 Almstedt Brothers. Inc. 200,000 F. Eberstadt & Co., Inc.. 1.100.000 American Securities Corporation. 1.100,000 A. G. Edwards & Sons. Inc. 800,000 A. E. Ames & Co. Incorporated. 800,000 Edwards & Hanly 1.100.000 Anderson & Strudwick 300,000 Elkins, Morria, Stroud & Co. 800,000 Arnhold and S. Bleichroeder, Inc.. 1.100,000 Eppler, Guerin & Turner, Inc.. 300,000 Arthurs, I.estranse & Short 200,000 Equitable Securitise Corpon ion 300.000 Bacon, Whipple & Co. 1.100,000 Europartners Securities c. oration.. 1,100,000 Robert W. Baird & Co. Incorporated. 1.100,000 Fahnestock & Co. 800,000 Baker, Watts & Co, 300,000 Faulkner, Dawkins & Sullivan Basle Securities Corporation 2.400,000 Securities Corp. 1.100,000 Bateman Eichler, Hill Richards, Ferris & Company, Incorporated 3 % 000 Incorporated 1,100,000 First Albany Corporation 300,000 George K. Baum & Company, Incorporated 200,000 The First Boston Corporation 4,400,000 Bear. Stearns & Co. 3,000,000 First Equity Corporation of Florida 300,000 A. G. Becker & Co. Incorporated. 3,200,000 First Mr.rlem Securities Corporation. 200,000 Birr, Wilson & Co., Inc. 300,000 First of Michisan Corporation !,100,000 Black & Company, Inc.. 200,000 First Mid America Inc. 300,000 Blaine and Company, Inc.. 200,000 First Southwest Company 500,000 D. H. Blair & Company. 300,000 Folger Nolan Flemins Dousias i William Blair & Company. 1.100,000 Incorporated 1.100,000 Blunt Ellis & Simmons Incorporated. 1.100,000 Foster & Marshall Inc. 200,000 Blyth Eastman Dillon & Co. Incorporated 4,400.000 Freehlins & Co. 200,000 Boettcher & Company 800,000 Freeman Securities Company, Inc.. 200,000 Bosworth, Sullivan & Company, Inc.. 200,000 Fulton, Reid & Staples, Inc.. 500,000 J. C. Bradford & Co. 1.100,000 Robert Garrett & Sons, Inc. 300,000 Alex. Brown & Sons, L400,000 Glickenhaus & Co.. 200,000 Bruns, Nordeman, Ras & Co. 200,000 Gradison & Company Incorporated. 300,000 i Burgues & Leith. 200,000 Greenshields & Co Inc. 300,000 Butcher & Singer 800,000 Gruntal & Co. 200,000 The Cherokee Securities Company. 200,000 Halsey, Stuart & Co. Inc.. 4,400,000 The Chicago Corporation 800,000 Hardy & Co. 200,000 B. C. Christopher & Company. 200,000 Harna, Upham & Co. Incorporated L400,000 City Secunties Corporation 300,000 Hayden Stone Inc. L400,000 Clark, Dodge & Co. Incorporated. 3,000,000 Herzfeld & Stern 300,000 Richard W. Clarks Corporation 200,M J. I, B. Hilliard W. I., I.yons, Inc. 500,000 Colin, Hochstin Co, 200,000 Hoppin, Watson Inc. 500,000 C. C. Collings and Company, Inc. 200,000 Hornblower & Weeks.Hemphill, Noyes Julien Collins & Company 200,000 Incorporated. 4,400,000 Craisie, Mason.Hasan, Inc.. 500,000 Howard Weil. I.abouisse Friedrichs Crowell. Weedon a Co. 800,000 500,000 Incorporated Cunmnsham, Schmertz & Co., Inc. 200,000 Dain, Kalman & Quail, Incorporated. 1.100,000 Howe, Barnes & Johnson, Inc. 500,000 Daiwa Securities America Inc. 800,000 E. F. Mutton & Company Inc. 4.400,000 Danals & Bell, Incorporated 200,000 W. E. Mutton & Co. 2,400,000 Davenport & Co. of Virsima. Inc. 200,000 The I111 acts Company Incorporated 500,000 14 I i r

Prinstpel Prhasipal l Neeme Aasenet Nees Assamus 1 Interstaae Securides Corporaden S 300.000 Rauscher Pierce Securities Corporadon S 1.100,000 Investment Corporation of Virginia 500,000 Reinholdt & Gardner 1.100,000 ) Janney Montgomery Scott Inc.. 500,000 Reynolds Securides Inc. 4400,000 Johnson Laas, Specs, Smith & Co., Inc.. 200,000 Richardson Securities,Inc. 200,000 Johnston, Lemon & Co. Incorporated 800,000 The Robinson.Humphrey Company, Inc. 1.100,000 Edward D. Jones & Co.. 300,000 Rodman & Renshaw, Inc. 200,000 Roose, Wade & Company. 200,000 l Joseph, Meuen & MIUer. Inc.. 300,000 Rotan Mosle Inc. 500,000 i Josephthal & Ca 2M,M L F. Rothschild & Co. 3,000,000 Keefe, Bruyette & Woods sc.. 300,000 R. Rowland & Co. Incorporated 200,000 Kidder, Peabody & Co. Itwerporated A400,000 J. N. Russell Inc.. 200,000 l Kirkpatrick, Pettis, Smith, Polian Inc.. 300,000 Salomon Brothers 4,400.000 Kormendi, Byrd Brothers, Inc.. 300,000 Scharf & Jones, Inc.. 300,000 i Kuha. Loeb & Co.. 4,400.000 Scherck, Stein & Franc, Inc., 300,000 l Ladenburg, Dalmaan & Co. Inc.. 1,100,000 Schmidt, Roberts & Parke. Inc. 200,000 Lasard Freres & Co. - 4,400.000 Scott & Stringfellow, Inc.. 300,000 j Seasongood & Mayer 2MM Legg Mason / Wood Walker Div. of Firm Regional Secondes, Inc.. 800,000 Shields Securities Corporation. 3,200,000 Labanas Brothers Incorporesed 4,400,000 Shuman, Agnew & Co., Inc. 1,100,000 I. M. Simon & Co. 200,000 Lepercq, de Neuelas & Co. L r 500,000 Smith, Barney & Cs Inewporated A@,M Loeb, Rhoades & Ca 4,400,000 Smith, Moore & Co. 200,000 l Loewi & Co. Incorporated. 800,000 I"'*'**d***I ' " " " ~ Manley, Bennett, Mcdonald & Co.. 200,000 ,00 000 6 Steiner, Rouse & Co., Inc. A. E. Massen & Ce f--- c 200,000 Stephens Inc. 500,000 l McCormick & Co., Incorporated 300,000 Stern Brothers & Co. 500,000 Mcdonald & Company. 1,100,000 Stern, Frank, Meyer & Fox Incorporated.. 500,000 McLeod. Young, Weir, Incorporated. 300,000 Sterne, Asw & bach, Inc.. 200,000 I McMaster Hutchinson & Co. 500,000 Stifel, Nicolaus & Company, Incorporated.. 500,000 Merrill Lynch, Pierce, Fenner & Smith Stix & Co. Inc. 200,000 Incorporated 4 400,000 Stone & Webster Securides Corporation. 4,400,000 Mesirow & Company 200,000 Stone & Younsbers 500,000 r The Milwaukee Company 500,000 Stuart Brothers 800,000 Mitchell, Hutchins Inc. 500,000 Suplee.Mosley Inc. 200,000 Mitchum, Jones & Templeton Incorporated 300,000 Sutro & Co. I-ir &;ed 800,000 l w Model, Roland & Co., Inc. 800,000 Sweney Cartwright & Co. 200,000 i Danas & Company, fac.. 2%M Moore, Leonard & Lynch, Lam

t..

500,000 un& cManon Auchincias Moore & Schley, Cameron & Co. 300,000 Kohlmeyer Inc. , 400,000 Morgan, Keesan & Company, Inc,. 200,000 Spencer Trask & Co. Incorporated. 2,400,000 i Moseley, Halisarten & Estabrook Inc.. 2,400,000 Traub and Company, Inc.. 200,000 Mullaney, Wells & Company. 300,000 Tucker, Anthony & R. L. Day. 2,400,000 Murch & Co., Inc.. 200,000 UBS.DB Corporation 2,400.000 Nesbitt Thomson Securities, Inc.. 200,000 Ultraan International Corporation 500,000 i Newhard, Cook & Co. Incorporated. 500,000 Underwood, Neuhaus & Co., Incorporated.. 300,000 l New York Securities Co. Incorporated 200,000 C. E. Unterbers Towbin Co. - 800,000 Nomura Securines International, Inc.. 800,000 Vercoe & Company, Inc.. 200,000 Wa m & Dwst. Inc.. JEM The Ohio Company 1 100,000 2,@,M Paine, Webber, Jackson & Curtis Warburg.Partbas, Inc... 2,400.000 Incwpwated 4,@,M Wading, Lerchen & Co. Incorporated. 500,000 Parker /Hunear I-,r4.ied 300,000 Wooden & Co. Incorporated 2,400,000 t i l H. O. Poet & Co, lac.. 200,000 Wertheun & Co., Inc.. 4,400,000 The Pennsylvania Group, Incorporated. 200,000 Wheat. First Securities, Inc. 1,100,000 i Piper, Jafray & Hopwood Incorporated. 1,100,000 White, Weld & Co. Incorporated 4,400,000 { Wm. E. Pollock & Co., Inc.. 1.100,000 Dean Witter & Co. Incorporated. 4,400,000 l Prescott, Ball & Turbon. 1,100,000 William D. Witter, Inc.. 300,000 R. W. Pressprica & Co. Incorporated. 2,400,000 Wood Gundy Incorporated 500,000 Quina & Co., Inc. 200,000 Wood, Struthers & Winthrop Inc. 3,000,000 Rafensperger, Hushes & Co., Inc.. 200,000 Yarnall, Biddle & Co. 200,000 1 Raad & Co., Inc.. 300,000 Zuckerman, Smith & Co.. 200.000 ) Total $300,000,000 I 13 j i l 1 l A 1 l

The Underwriting Agreement provides that the cbligations cf the several Underwriters to pay for and accept delivery of Debentures to be purchased by them (herein called " Underwriters' Debentures") are subject to the approval of certain legal matters by counsel and to the conditions that no stop order l l suspending the efect. eness of the Registration Statement is in efect and no proceedings for such purpose are pending before or threatened by the Securities and Exchange Comnussion and that there has been no l material adverse change (not in the ordinary course of business) in the condition of the Company and its amliates, taken as an entity, from that set forth in the Registration Statement. The nature of the Underwriters' obligations is such that they are committed to take and pay for all the Underwriters' Debentures if any are taken. The Underwriters propose to oser part of the Debentures directly to the public at the public ofering price set forth on the cover page hereof and part to dealers at a price which represents a concession of 425% of the principal amount under the public ofering price, and any Underwriter may oser Debentures to certain dealers who are either a parent or a subsidiary of such Underwriter at not less than such price to dealers. Any Underwriter may allow and dealers may reallow a concession, not in excess of.25% of the principal amount, to certain other dealers. The Company has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of U33. DELAYED DELIVERY ARRANGEMENTS The Company has authorized the Underwriters to solicit ofers by certain institutions to purchase up to S75,000,000 principal amount of Debentures (herein called " Contract Debentures") from the Company, at the ofering price set forth on the cover page hereof, pursuant to Delayed Delivery Contracts providing. for payment and delivery on August 22,1974. Each such Contract is to be for at least S250,000 principal amount of Debentures and wi~ 3 institudon approved by the Company. Institutions with whom such Contracts may be made include commercial and savings banks, insurance companies, pension funds, educational and charitable institutions and such others as may be approved in each case by the Company. To the extent that such Contracts are entered into, the Company will compensate the Underwriters therefor as set forth on the cover page hereof at the time of delivery of Debentures to the Underwriters. Such Contracts will not be subject to any conditions except that ( 1) the purchase of the Debentures to be purchased by an institution shall not at the time of delivery be prohibited under the laws of the jud%n to which such institution is subject and (2) the sale of Debentures to the Underwriters shall have been completed. The Underwriters will not have any responsibility in respect of the validity or performance of such Contracts. The principal amount of Debentures to be purchased by each Underwriter shall be reduced by sales of Contract Debentures proportionately, except to the enent that any such sale has been directed and allocated to a particular Underwriter by an institution. The Underwriters may allow a commission of 425% to dealers in respect of Debentures for which Cottracts are arranged by such dealers through the representatives of the Underwriters. LEGAL OPINIGNS The legality of the Debentures w'll be passed upon for the Company by Mr. Walter A. Schlotterbeck, Vice President-Corporate Counsel of the Company, and for the Underwriters by Davis Polk & Wardwell, 1 Chase Manhattan Plaza, New kr, N. Y.1000*. Mr. Walter A. Schlotterbeck, together with members f his family, owns, has options to purchase and has other interests in an aggregate of approximately 578 shares of common stock in the Company. EXPERTS The financial statements included herein have been included in reliance upon the report of Peat. Marwick, Mitchell & Co., independent certilled public accountants, and upon the authority of said firm as experts. 16

l INDEX TO FINANCIAL STATEMENTS Py I7 Rzroat or INDEPENDLVT CERTIFIED PusuC ACCOUNTANTS....................................... GENHAL ELICTRIC COMPANY AND CONsOUDATED AFFIUATM 4 Statement of Current and Retained Earnings for the five years ended December 31.1973..... I8 Statement of Financial Position at December 31,1973................. 19 Details ofItems in Statement of Financial Position.......................... Statement of Changes in Financial Position for the five years ended December 31.1973. 2i Statement of Changes in Capital Stock for the five years ended December 31,1973............... 22 Statement of Amounts Received for Stock in Excess of Par Value for the five years ended 23 December 31,1973. l 24 j Notes to Financtal Statements. i GENERAL Etzenic CazDrr CoRPORATtON AND CONsOUDATED AFFIMATU 33 Statement of Financial Position at December 3 1, 19 7 3.. Statement of Current and Retained Earnings for the five years ended December 31.1973........ 34 35 Statement of Changes in Financial Position for the Ave years ended December 31,1973....... 36 Notes to Financial Statements. REPORT OF INDEPENDENT CERTIFIED PUBLIC A'CCOUNTANTS To the Board of Directors GENERAL ELECTRIC COMPANY: We have examined the financial statemenu of General Electric Company and consolidated artiliates and of General Electric Credit Corporation and consolidated arlitiates as of and for the five years ended December 31,1973 as listed in the accompanying "Index to Financial Statements". Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, such financial statements present fairly the financial position at December 31.1973 of General Electric Company and consolidated artillates and of General Electric Credit Corporation and consolidated arliliates, and the results of their operations and the changes in their financial posinon for the five years then ended,in conformity with generally accepted accounting principles applied on a consistent basis. PEAT. MAnw1Cx. MrTCHELL & CO. New York, New York February 15, 1974 17 +

GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES STATDfENT OF FINAtM.'lA1 POSITION (Amomens le amlems) ASSETS Deceaser 31. Im Ca sh ( No te 2 )..........._..._.~. . S T96.8 Marketable securities ( Note 2)... 25.3 Current receivables

• 2,177.1 inventories * ( Note 3).........

1,986.2 Total current assets 4,485.4 Investments * (Note 4). 869.7 ~. Plant and equipenent at cost less accumulated depreciation * (Note 5). 2,360.5 Other assets less allowance for losses of 315.1 millL..* (Note 6).................... 608.6 Total assets. S 8.324.2 1 1 LI ABILITIES AN D EQ UITY j 1 i Short. term borrowings" ( Note 7). S 665.2 Acco unts p a y a ble '.... 673.5 Progress collections and price adjustmenis accrued........................................... 7 I 8.4 D i vi den ds p a ya b le.......... 72.7 Taxes a ccrued................. 310.0 Other costs and expenses accrued *.. 1,052.6 Total current liabilities 3,492.4 Lo ng-term borro wings * ( Note 8 ).......... 9 I7.2 Other lia bilities............ 492.1 Total lia bilities 4,901.7 Minority interest in equity of consolidated afflliates... 50.1 Preferred stock (Si par value; 2,000,000 shares' authorized; noneissued) Common stock (52.50 par value: 210,000,000 shares authorized) ( Note 9)... 463.8 Amounts received for stock in excess of par value 409.5 Retained eatninas ( Note 10 ).. 2,683.6 3,556.9 Deduct common stock held in treasury ( Note 9)...... (l84.5) Total s hare owners' equity......... 3,372.4 l Total lia bilities and eq uity.............................-............................. S 8.324.2 Lease commitments and contingent liabilities ( Note !I).

• Details shown on the following pages.

See notes to financial statements. l 18 1 I 1 1

GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES DETAILS OF ITEMS IN STATTMENT OF FINANCIAL POSITION ( Amouses la sullees) December 31, 1973 Current receivables . Customers accounts and notes................................,.. S1,996.4 No neo asolida te d aifiliates.............................................................. 0.5 Other................................................. 238.7 2.235.6 Less allow ance fo r losses........................................................................... 58.5 S2,177.1 Inventories Raw materials and work in process..................... S1.276.1 Fi rushed goods.......... 604.6 U n billed ship ments..... 105.5 S1,986.2 Investments Nonconsolidated atliliates - Investmen ts.............................. S 326.7 l - Ad vances................................... 0.7 Honeywell Inc. and Honeywell Information Systems Inc.... ! $ 4.6 Associa ted co m p anies........................................................................... 68.I Miscellaneous investments. -.................................. 331.7 381.8 Less allo wance fo r losses........ I2.! S 869.7 Plant and equipment at cost less accumulated depreciation Land and im provements......................................... S 104.4 1.445.9 Buildings, structures and related equipment......................................... M achinery a nd equip ment................................................... 3,138.5 Leasehold costs and plant under construction.................................. 231.0 4,919.8 Less accumulated depreciation and amortization...... 2.559.3 l S2.360.5 l Other assets to n g. term receiva bles................................................ S I73.4 z... C usto me r ti nancin g................. I41.2 Dc ferred inco me taxes........................................ I31.0 Recoverabie engineering costs on Government contracts.............. 61.3 De fe rred charg es................................................................. 32.4 Licenses and other intangibles-net........................ 30.9 3S.4 Oth er............. 5 608.6 l See notes to financial statements. 19 .x

GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES DETAR.5 OF ITEMS IN STATEMENT OF FINANCIAL POSITION ( Ameests is millions) December 31. _1973 Short. term borrowings Banks Parent (average rate at 12/31/ 73 -9.68% )...... S 99.0 Consolidated affiliates (average rate at 12 / 31/ 73 - 1 1.8 7% ).............................. !$8.7 Notes with Trust Departments ( average rate at 12 / 31/ 7 3-7.93 % )....................... 215.8 124.3 Commercial paper (average rate at 12/3 I /73-9.71%).................................... 67.4 Other, including current portion oflong. term borrowings.......................................... S 665.2 Accounts payable S 583.4 Trade...................................................... 67.0 Collected for the account of others................................................................ 23.1 N o nco nsolid a ted affiliates................................................................................. S 673.5 Other costs and expenses accrued S 385.6 Employee compensation and benefit costs........... 316.3 Customers' allowances............................ 22.6 Interest expease...................................... 328.I Ot her co sts and expe ases................................................................................. SI.051.6 Long term borrowings General Electric Company S I25.0 6 % % D e ben tures....................................................................................... 200.0 7 % % De be n tu res................................................................................. I60.8

5. 30% De be ntures...

106.2 5%% Notes................................................................... 84.3 3 h % De be ntures..................................................................... 181.4 General Electric Overseas Capital Corporation borrowings.............................. 59.5 Other long. term betrowings...... = S 917.2 See notes to rinancial statements. 20

l I GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES j STATDEINT OF CHANGES IN FINANCIAL POSITION ( Am es le om ) l Year eeded December 31. 1969 _1970 1m 1972 1973 Source of funds: From operations: Net earnings.. 5278.0 $328.5 $471.8 5530.0 5585.1 351.3 334.7 273.6 314.3 334.0 Depreciation Income tax timing diferences. ( 60.1 ) (3.3 ) 17.3 ( 23.8) 1 Earninp retained by General Electric i Credit Corporation (3.2) ( 4.9) ( 6.9 ) ( 8.1 ) ( 10.7) 566.0 655.0 755.8 812.4 908.4 200.0 125.0 i Major domestic long-term borrowings... General Elecuic Overseas Capital Corpo-ration long term borrowings.... ! !.8 16.6 28.0 50.8 17.1 14.0 5.3 2.0 Inc. vase in other long term borrowings-net.. Newly. issued common stock............. 5.8 37.1 30.4 13.4 11.7 1 Total source of funds............. 583.6 708.7 1,028.2 1.006.9 939.2 Application of funds: Plant and equipment additions.......... 530.6 581.4 5.,3.1 435.9 598.6 1 Dividends declared. 235.2 235.4 249.7 254.8 272.9 47.8 73.0 83.4 40.6 114.8 Investments. Reduction in major domestic long term borrowin as 32.2 10.I 23.7 17.2 31.5 i Reductio'n in General Electric Overseas Capi-tal Corporation long term borrowings. 25.0 4.5 4.5 3.9 17.7 Reduction in other long term borrow. 30.4 101.9 in gs-net... O the r - n e t...................................... - ( 31.9) ( 61.0) (0.3 ) ( 56.5 ) 20.3 Total application of funds..... 869.3 945.3 914.1 695.9 1.055.8 Net increase ( decrease) in working capital . S(285.7) S(236.6) $ 114.1 S 311.0 S(.116.6) Analysis of changes in working capital: Cash and marketable securities..-... S (44.1) S(123.5) S 80.2 S 3.3 S 27.8 Current receivables...................... (87.8) 205.9 167.6 184.7 231.1 108.6 ( 35.4) 56.4 147.3 227.2 I nve n to nes.............................................. Sho rt term bo rrowin gs........................... ( 60.1 ) (317.3) 88.3 130.4 (225.8) l Ot h e r p ay a bles......................................... (202.3) 33.7 (278.4) (l59.7) (396.9) Net increase ( decrease ) in working capital..... $(285.7) S(236.6) S 114.I S 311.0 $( l16.6 ) See notes to Snancial statements. i 21 l I r

,l GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES I STATEMENT OF CHANCES IN CAMTAL STOCK For the Five Years Ended December 31,1973 (Share ameuses la themeasds; dollar amoests la millions) Conusos Stock Treasury Stock Shares (a) Amouet Shares (s) Amoest Balance January 1,1969.............. I83.330 S458.3 2,135 S 91.3 Shares issued for stock option plans and employee savings plan....................... I33 4 Treasury stock acquired......... 1,322 53.9 Treasury stock used for incentive compensation plans and employee savings plans... (794) ( 31.1) Treasury stock used for acquisitions............ (14) (.6) Balance December 31, 196 9............................ 183,463 458.7 2,649 113.5 Shares issued for ste x option plans and employee savin gs pi an.. 907 2.2 Treasury stock acquired......~............. 1.202 45,1 Treasury stock used for incentive compensation plans and employee savings plans. (l.108) ( 47.2 ) Balance December 31,1970.. 184.370 460.9 2.743 111.4 Shares issued for stock option plans and employee savin gs plan............................ 566 1.4 Treasury stock acquired... -. 759 42.9 Treasury stock used or incentive compensation plans and employee savings plans...................... (667) ( 27.9 ) Treasury stock used for acquisitions............... (21) (.9 ) Balance December 31, 19 71................ 184,936 462.3 2,814 1215 1 Shares issued for stock option plans and employee s avin gs pl an.......... 308 .8 Treasury stock acquired.......................... 1,053 69.4 Treasury stock used for incentive compensation plans and employee savings plans............... (971) ( 48.4) Balance December 31, 19 72....,............ 185.244 463.1 2,896 146.5 Shares issued for stock option plans and employee s a vin gs pl an........................ 274 .7 Treasury stock aequired................... 1,698 107.8 Treasury stock u. sed for incentive compensation plans and emplovec savings plans................. (1,118) ( 63.6) Treasury stock used for acquisitions..................... ( 105) ( 6.2 ) Balance December 31,1973.... t 85.5 l 8 S463.8 3.311 SI 84.5 (a) Adjusted for the two.for-one stock split in April 1971. See notes to rinancial statements. 22

GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFIUATES FTATEMENT OF AMOUNTS RECEIVED FOR STOCK IN EXCESS OF PAR YALUE (Amouses b aMusso) Yeat ended December 31. 1969 _1974 1971 1 _972 1973 Balance at January I.......... S296.9 S300.3 S330.0 S368.8 S396.6 Premium eceived on sharesissued 5.5 34.8 29.0 12.6 11.1 Net eange from disposition of treasury scock (2.1) ( 5.1 ) 9.8 15.2 1.8 i Balance st December 31 S300.3 5330.0 $36.8.3 S396.6 S409.5 j = -.. - --s

=== - L L See notes to Anancui statements. t I ) [ i h I t i i k l t. i t l i i I 23 i l t I r ,, e )

GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES l NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant Accounting and Reporting Principles and Policies As an aid to readers of these Financial Statements, the following paragraphs summarize significant In addition, they are accounting and reporting principles and policies followed by General Electric.

repeated where appropriate in the other Notes to Financial Statements to place them in context. Consolidatedfnancialstatements and accompanying schedules include a consolidation of the accounts of the Parent-General Electric Company-and those of all majority-owned affiliates (except fmance j amliates whose operations are not similar to those of the consolidated group). All significant items relatin to transactions between the Parent and amliated companies are eliminated from consolidated statements. Except for fixed assets and accumulated depreciation. assets and liabilities of foreign amliates are translated into U.S. dollars at year-end exchange rates, and income and expense items are translated at average rates prevailing during the year. Fixed assets and accumulated depreciation are translated at ra in efect at dates of acquisition of the assets. The net efect of translation gains and losses is included as other costs in current year operations. Net earningsinclude the net income of finance amliates and the consolidated group's share of earnings of associated companies which are not consolidated but in which the group owns 20c* ( approximately 5 o in 1971 and prior years) or more of the voting stock. Sales ofproducts and services to customers are reported in operating results only as title to products passes to the customer and as services are performed as contracted. Investments of the Pension Trust are carried at amortized cost plus a programmed portion of unrealized copreciation in the common stock portfolio The (unding program uses 6Fo as the estimated rate of future v.come which includes provision for the systematic recognition of the unrealized appreciation in the common sock portfolio. This program has the objective of recogmzing appreciation which, when added to cost. will result in a common stock book value approximating 80c' of market value (consistent o with Armed Services Procurement Regulations). Unfunded liabilities of the Trust are being amortized over a twenty year period. Obligations of the Supplementary Pension Plan are not funded. Current service costs and amorttzatio of past service costs over a period of twenty years are being charged to operations currently. An accelerated depreciation method, based principally on a sum-of the years digits formula, is used to Assets depreciate plant and equipment in the United States purchased in 1961 and subsequently. purchased prior to 1961, and most assets outside.ne U.S. are depreciated on a straight line basis depreciation is provided where equipment may be subject to abnormal economic conditions or obsolescence. Expendituresfor maintenance and repairs are charged to operations as incurred. Capital gains arising from sales of Honeywell stock are computed using average cost. Provision for income taxes generally is computed using the comprehensive interperiod tax allocation method and is based on the income and costs included in the earnings statement. Provision has been ma for Federal income taxes to be paid on that portion of the undistnbuted earnings of amliates expected to The Company follows the practice of amorttzing the investment credit to be remitted to the Parent. income over the life of the underlying facilities rather than in the year in which facilities are placed in service. Marketable securities are carried at the lower of amortized cost or market value. Inventories in the United States are substantially all valued on a last in. tirst out i LIFO) basis. Substantially all those outside the U.S. are valued ori a first in, first out ( FIFO) basts. Such valuations are not in e.tcess of market and are based on cost exclusive cf ortain indirect manufacturing expenses and profits or sales bet.veen the Parent and amliated companics. r 24

GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES NOTitS TO HNANCIAL STATDtINTS-(eessiemeo Investments in nonconsolidated finance atliliates are carried at equity plus advances. Investments in the common stock of Honeywell Inc. and Honeywell Information Systems Inc. (HIS), a subsidiary of Honeywell, are recorded at appraised fair value as of date of acquisition. Investments in associated companies which are not consolidated but in which the Company owns 20% (approximately 50% in 1971 and prior years) or more of the voting stock are valued by the equity method. Miscellaneous investments are valued at cost. Licenses and other intangibles acquired after October 1970 are being amortized over appropriate periods of time. Research and development expenditures, except those specified as recoverable engineering costs on Government contracts, are charged to operations as incurred. Common stock held in trea.nuy under the deferred compensation provisions ofincentive compensation plans is recorded at market value at the time of allotment. The liability is recorded under other liabilities. The retnaining common stock held in treasury is carried at cost.

2. Cash and Marketable Securities Time deposits and certiricates of deposit aggregated $134.4 million at December 31,1973. Deposits l

restacted as to usage and withdrawal or used as partial compensation for short. term borrowing arrangements were not material. Carrying value and market value of securities were approximately the i

same, I

3. Inventories i

Inventones in the United States ( about 84% of total) are substantially all valued on a last.in. tirst.out (1.II 0) basis. Substantially all those outside the U.S. are valued on a first.in, first out (FIFO) basis. l Such valuations are not in excess of market and are based on cost, exclusive of certain indirect j manufacturing expenses and profits on sales between the Parent and ar11'iated companies. The LIFO basis t values inventories conservatively during inflationary times, and cn a FIFO basis the year.end 1973 inventories would have been S429.7 million in excess of this valuation. l The inventories used in the computation of cost of goods sold were as follows: j ( Assomets le l an4U6oes) i I i J anu ary 1, 1969............................ S1,482.1 December 31,1969.... 1,590,7 l December 31,1970.... 1.555.3 l December 31,1971... 1,611.7 l December 3 1, 19 72............................... 1,759.0 December 3 1, 1 9 7 3.............................. 1,986.2 l 1 .t. Investments Investments in nonconsolidatedfinance agihates are carried at equity plus advances. t l Investments which aggregate 5154.6 million in the common stock of HoneywellInc. and HoneywcIl l ht/ormation Sy.wms Inc. t HIS), a subsidiary of Honeywell, are recorded at appraised fair value at date of l acquisition, October I,1970, when the informanon systems equipment business was transferred to HIS. f 25 1 i l l i

GENERAL ELACTRIC COMPANY AND CONSOLIDATED AFFILIATES i NOTES TO FINANCIAL STATDENTS-(eesdamed) j l The appraised fair value recognizes such factors as the size of the holdings, the various requirements and restrictions on the timing of the sale or other dispositions of the securities, as well as the uncertainty of future events. General Electric sold 168,000 shares of Honeywell common stock in 1973, bringing cumulative sales as of the end of that year to a total of 913,000 shares. As of December 31,1973, General Electric still held 1,612,432 shares of Honeywell common stock. Based on the closing market price on December 31,1973, of the Honeywell shares, and on the equiry value of the Company's 18M% interest in HIS, the investment in Honeywell and HIS securities would have been in excess of the carrytag value. During 1975 through 1980. Honeywell has the option to purchase from General Electric, and General Electric has the option to require Honeywell to purchase, General Electric's 18M% interest in HIS. Payment would be in Honeywell common stock. General Electric has agreed that if the U.S. Attorney General so requests, it shall, prior to the end of 1980, exercise its option to require Honeywell to purchase General Electric's interest in HIS. General Electric has committed to the United States Department of ) Justice to dispose of current holdings of Honeywell common stock in stages by June 30,1978, and all other shares of Honeywell common stock received for General Electric's interest in HIS by December 31,1980. A voting trust has been established in which General Electric must deposit all shares of Honeywell common stock received. Associated companies are those which are not consolidated but in which the Company owns 20% (approximately 50% in 1971 and prior years) or more of the voting stock. Investments in such companies are valued by the equiry method. Miscellaneous investnrents are valued at cost. On December 31,1973 the estimated realizable value of these investments was approximately 5405 million.

5. Plant and Equipment Less Accun'ulated Depreciation Depreciation is charged to costs and expenses, and credited to accumulated depreciation in amounts based,in general, upon percentages of cost. In the United States, the depreciable lives used for nearly all facilities are generally the same as those set forth in the uniform accounting manual for the electrical manufacturing industry, published by the National Electrical Manufacturers Association. An accelerated depreciation method, based principally on a sum.ofahe years digits formula, is used to depreciate plant and equipment in the United States purchased in 1961 and subsequently. Assets purchased prior to 1961, and most assets outside the United States, are depreciated on a straight line basis. Special deprectation is provided where equipment may be subject to abnormal economic conditions or obsolescence.

l The accounting for retirements and dispositions varies according to the types of facility involved. Cost and accumulated depreciation on facilities valuable enough to warrant maintenance of detailed records are removed from the asset and accumulated depreciation accounts when physically retired or otherwise disposed of. Pront or loss realized from the retirement or disposition of such facilities is included in operations. Costs and accumulated depreciation of facilities for which detailed records are not maintained are removed from the asset and accumulated depreciation accounts when these facilities become fully depreciated. Proceeds realized upon disposition of such facilities are treated as reductions of current year j depreciation expense.

6. Other Assets Other assets at December 31,1973 included deferred income taxes of S131.0 million of which S97.3 1

million were applicable to current assets and liabilities. I 26 i l -- =9:"""A J

GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES NOTES TO FINANCIAL STATEMENTS-(contimmed) i

7. Short term Borrowings The average balance of short term borrowings, excluding the current portion of long term debt, during 1973 was $594.7 million (calculated by averaging all month-end balances for the year). The maximum balance included in this calculation was $775.1 million at the end of November 1973. The average interest rate for the year 1973 was 9.9%, representing total shon term interest expense divided by the average balance outstanding.

Parent bank borrowings are principally from U.S. sources. Bank borrowings of astiated companies, most of which are foreign, are primarily from sources outside the U.S. Although the total unused credit available to the Company through banks and commercial credit markets is not readily quantifiable, informal credit lines in excess of 5750 million had been extended by approximately 135 U.S. banks at year-end 1973.

8. I.ans-term Borrowings General Electric Company 6%% Debentures are due in 1979.

General Electric Company 7%% Debentures are due in 1996. Sinking fund payments are required begmams in 1977. . General Electric Company 5.30% Debentures are due in 1992. In accordance with sinking fund requirements, debentures having a face.value of $10.0 million, and reacquired at a cost of 58.1 million, were retired in 1973. Debentures outstanding at the end of 1973 amounted to S160.8 million after deductica of reacquired debentures with a face value of $29.2 million held in treasury for 1974 and future sinking fund requirements. General Electric Company 5M% Notes are due in 199I. At December 31,1973. S106.2 million was classified as long term and $6.3 million was classified as shon term. Notes having a value of S6.3 million were reured during 1973 in accordance with prepayment provisions. General Electric Company 3%% Debentures are due in 1976. Debentures having a face value of $16.1 million, and reacquired at a cost of 513.0 million, were retired during 1973 in accordance with sinking fund provisions. Debentures outstanding at the end of 1973 amounted to 584.3 million after deduction of reacquired debentures with a face value of $28.8 million held in treasury for future sinking fund requirements. Borrowings of General Electnc Overseas Capital Corporation ( a wholly-owned consolidated aMliate) are unconditionally guaranteed by General Electric as to payment of principal, premium, if any, and interest. This Corporation primarily assists in financing capital requirements of foreign companies in which General Electric has equity interest. The borrowings include the Corporation's 4%% Guaranteed Bonds due in 1985 in the aggregate principal amount of $50.0 million. The bonds are convertible through-November 1975 into General Electric common stock at $65.50 a share. Sinking fund payments on any 1985 bonds not convenet' are required beginning in 1976. Also included are the Corporation's 4%% Guaranteed Debentures due in 1987 in the amount of $50.0 million and convertible from June 15,1973 to June 15,1987 into Company common stock at $80.75 a share. During 1973, the Corporation issued 5%% Sterling / Dollar Guaranteed Loan Stock due in 1993 in the amount of E3.6 million (58.3 million), convertible from October 1976 into General Electric common stock at $73.50 a share. Other long term borrowings were largely borrowings by foreign affiliates with various interest rates ~~ and ' maturities.~ 1.ong term borrowing maturities during the next tive years, including the portion classified as current, are S42.0 million in 1974, S43.7 million in 1975, S132.3 million in 1976, S33.4 million in 1977 and 531.3 million in 1978. These amounts are after deducting reacquired debentures held in the treasury for sinking fund requirements. 27 i l t l

A GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES NOTES TO FINANCAL STATEMENTS (coedesee 1 4

9. Common Stock At December 31, 1973, there were 185,518,257 common shares issued and 182,147,498 shares outstanding. The number of shares reserved at that date for options aggregated 4,623.266 compared with 2,637,276 shares at the beginning of the year.

I Common stock held in treasury at the close of 1973 included the cost (S127.7 million) of 2,148.337 i shares held for future corporate requirements, including 1,500,931 shares for conversion of General Electric Overseas Capital Corporation convertible indebtedness, as weil as shares for the General Electric Savings and Security Program, the General Electric Savings and Stock Bonus Plan, and payments under incentive compensation plans. In addition, at December 31, 1973 the Company was holding under the deferred compensation ) provisions ofincentive compensation plans a total of 1,222,422 shares of General Electric common stock. These shares are carried at market value at the time of their allotment. The liability is recorded in other liabilities.

10. Retained Earnings Retained earnings included approximately S169.6 million representing the excess of earnings of General Electric Credit Corporation over dividends received from this affiliate since its formation. In addition, retained earnings have been reduced by 50.6 million which represents the change in equity in i

associated companies since acquisition. 11, Lease Commitments and Contingent IJabilities Lease commitments and contingent liabilities, consisting of guarantees, pending liugation, taxes and other claims, in the opinion of management, are not considered to be material in relation to the financial position of the Company.

12. Pensions Substantially all Company employees in the United States who have completed one year of service participate in the General Electric Pension Plan ("the Pension Plan"). Pensions are related to length of service and earnings, with guaranteed mmimums for retirees having 15 or more years of full time credited service. Participants contnbute 3 per cent on compensation in excess of $6,600 a year. The normal retirement age under the Plan is 65, with optional retirement permitted up to 6ve years earlier. Pensions payable to participants who retire optionally before age 62 are reduced by one half of one per cent for each month by which retirement precedes attainment of age 62. There is also provision for a pension in case of total and permanent disability after 15 years of credited service. The Plan also provides for vested rights after 10 years of service, survivorship options, and pre retirement death bene 6ts.

The Company cost of the General Electric Pension Plin, the obligations of which are funded through the General Electric Pension Trust ("the Trust"), totaled S52.9 million in 1969, S66.6 million in 1970, S91.0 million in 1971, S102.2 million in 1972, and $125.9 million in 1973. The funding program in effect since 1967 uses 6% as the estimated rate of future income which includes a provision for the systematic recognition of a portion of the unrealized appreciation in the common stock portfolio. This program has the objective of recognizing appreciation which, when added to cost, will result in a book value approximating 30% of market value (consistent with U. S. Armed Services Procurement Regulauons). The actual earnings of the Trust including the programmed recogrution of appreciation, as a percentage of book value of the portfolio were 6.4?o for 1969. 6.3"o for 1970,6.3fo for 1971,6.6c' for 1972. o and 6.5% for 1973. 28 A

i GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES NOTES TO FINANCIAL STATEMENTSHeemdemed) Unfbnded liabilities of the Pension Plan are being amortized over a 20-year period and are estimated to be $474 million at December 31,1973, based on the book value of Trust assets, of which unfunded vested liability amounted to $377 million. The estimated market value exceeded the book value of Trust assets by $309 million at December 31,1973. Efective July 1,1973, a Supplementary Pension Plan was approved by the Company's Board of Directors, the purpose of which is to ensure that the pension benents of long service professional and managerial employees, when combined with their social security benefits, bear a reasonable relationship to their anal average earnings. If a specified percentage of anal average earnings multiplied by years of credited service is greater than the sum of an employee's pensaan under the Pension Plan and his estimated Social Security Benefit, the Company will pay r. supplementary pension equal to 90% of the diference. The Supplementary Pension Plan contains the same retirement opcions as the General Electric Pension Plan, and also applies to persons who retired directly from the Company who would have been i eligible to receive benefits under the Plan if they had retired subsequent to its efective date of July 1,1973. 1 i Obligations of this pension supplement are not funded. Current service cosu and amortization of past service costs over a period of 20 years are being charged to operations currently, Costs for the partial year 1973 were $2.0 million. The total estimated past service cost at December 31,1973 was estimated to be i S36 million. 13 Stock Options and Incentive Compensation j Under the General Electric stock option plans, adopted in 1963,1968 and 1973 (each efective for a period of five years) stock options to purchase General Electric common stock have been granted to officers and other key employees. The options are granted on the following terms: (i) the option price is fixed at 100% of the fair market value of the stock on the date the option is granted, (ii) shares subject to each option become exercisable in approximately equalinstallments over a period of not le:s than one nor more than nine years from the grant thereof, such installments to mature annually except that the initial and/or terminal installment may mature in less than one year from the date of grant or of the last previous installment. (iii) each installment is earned out only if the optionee remains in the employ of the Company 1 or its at5Liates, (iv) the rights of the optionee to purchase shares of any matured installment may be exercised either in whole or in part at any time prior to the expiration of the option, which is ten years from the date of grant, (v) stock options are not transferable except in limited circumstances upon the death of the optionee, (vi) upon termination of employment options are exercisable for three months (longer in i case of death), (vii) the optionee has no rights of a share owner with respect to the shares subject to the options until the option price is fully paid and the shares are issued, and (viii) adjustments may be made in the number of shares authorized by the Plans subject to outstanding options and the price per share in the case of changes in the capital structure of the Company. The 1973 Plan, unlike the previous Plans, permits the granting of stock appreciation rights. Such ) rights may be granted in connection with those portions of options granted under the previous Plans which ) had not become exercisable on the date of the adoption of the 1973 Plan as well as in connection with 1 stock option gnats under the 1973 Plan. Such rights would permit an optionee,in lieu of exercising all or a portion of a matured option, to receive in cash or General Electric Common Stock ( as determined by the committee of the Boarri of Directors administering the Plan), an amount equal to the excess of the market price of the Common Stock on the date the right is exercised over the option price. The extent to which such rights wtll be granted in connecuon with the grant of stock options is solely at the discretion of the ] Company. Stock appreciation rights terminate and may no longer be exercised upon the termination of the related option right or upon the earlier death of the grantee of the stock appreciation right. To date no stock appreciation rights have been granted. 29 O ~~#

I i GENERAL ELECTRIC COMPANY AND CONSOUDATED AFFIUATES i . NOTES TO FINANCIAL STA1TMENTS-(cestissed) The status of shares subject to options granted under the aforementioned plans is shown in the following tabulation. There are no charges to income with respect to the stock options. All options are granted at the full market price of the stock on the date the option is granted. Market value below is based on the reported closing price of the stock on the New York Stock Exchange. (1) Shares under option at December 31,1973: Market value at sete of great and oeties price Number Per Aggregate o(shares Shere (la millisee) November 15,1963 grants........ 2,253 S39.94 S 0.1 December 18,1964 grants... 84,194 45.31 3.8 November 19,1965 grants.... 39.268 57.31 2.3 November 18,1966 grants....... 137,966 48.75 6.7 November 17,1967 grants....... 129,312 50.75 6.6 November 14,1%8 grants.... 233,708 47.88 11.2 November 21,1969 grants........ 264,111 40.44 10.7 November 20,1970 grants........... 550,735 43.13 23.7 November 19,1971 grants......... 231,620 56.50 13.1 November 16,1972 grants......... 450,099 67.63 30.4 November 16,1973 grants........... 554.965 64.75 35.9 Total........... 2.678.23i S144.5 1' (2) Shares for which options Srst became exercisable and option price and market value in total at dates options became exercisable during the last five yem: Opetan Price Market value Number Avers e Aggregate Average Aggregate e Year ended _ of shares per share (in milllees) per share (in millions) j December 31, 196 9......................... 19 5,610 S44.88 S 8.8 $41.25 S 8.I 19 70........................ 21 1,404 44.34 9.4 42.99 9.1 19 71........ 2 6 4,5 20 44.!7 11.7 56.94 15.I 19 72........................ 2 6 5,46 8 45.63 12.1 66.95 17.8 19 73...................... 2 72,9 8 5 50.82 13.9 63.77 17.4 (3) Shares for which options were exercised and option price and market value in total at dates options were exercised during the last five years: j Option Price Market veiee Number Average Aggregate Aversee Aggreeste Yearended of sharee pershare (la millions) per share (la millions) December 31, 1969..... 44,008 S39.70 $ 1.7 S44.69 S 2.0 1970.... 77,320 39.40 3.0 43.16 3.3 19 71.................... 2 3 8,5 92 40.29 9.6 58.26 13.9 19 72..................... 297.2 44 42.71 12.7 65.79 19.6 19 7 3......................... 2 7 3,5 69 42.34 11.7 63.69 17.4 j I The number of shares and per share amounts in the preceding tables have been adjusted to rerlect the I two.for-one stock split in April 1971. i l i 30

l GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES NOTIS TO FINANCIAL STATDIENTS-(eestioned) l \\ An incentive compensation plan applies to approximately 3,000 employees. Amounts allntted by year for services performed in the previous year were as follows: 1959,322.3 million: 1970 $16.4 n,illion: 1971. S20.0 million; 1972, S24.0 million: 1973, S27.8 million. The maximum amount that may be appropriated to the reserve from which allotments are made in any year is 10#6 of the excess of the net consolidated earnings, as detined in the Incentive Compensation Plan, over 56 of the average consolidated capital investment, as defined in the Plan.

14. Other income Other income in " Statement of Current and Retained Ea-nings' consisted of the following:

t Year seded December 31 1969 _1970 1971 _1972 _1973 ( Amouses le milHess) Net earnings of General Electnc Credit Corporanon........ $15.2 S 19.9 S 30.9 5 41.1 S 41.7 Income from: 26.5 25.3 29.8 26.3 32.4 Customer financing s. Royalty and techmcal agreements..... 18.5 24.4 31.9 30.2 36.9 Marketable secunties and bank de. posits........................................... I2.3 12.3 10.4 19.I 17,7 Otherinvestments. 10.7 14.8 24.9 31.3 31.6 11.0 29.5 7.8 Sale of Honeywell Inc. stock............ Other sundry income........... 15.5 9.1 13.1 10.7 15.6 598.7 S106.3 S152.0 5189.2 5183.7 Interest received from marketable securities and other investments was $6.7 million in 1969. $12.6 million in 1970, S17.7 million in 1971, S10.5 million in 1972, and $13.3 million in 1973. Dividends included in other investments were 59.4 million in 1969,59.9 million in 1970, S9.2 million in 1971. Sl0.3 million in i972, and S16.2 million in 1973.

15. Income Taxes Provisionfor income taxes, using the comprehensive interperiod tax allocation method, is based on the income and costs included in the earnings statement.

The amount of income taxes shown payable in the following tabulation is determined by applicable statutes and government regulations. The amounts shown as tinung diferences result from the fact that under these statutes and regulations some items ofincome and costs are not recognized in the same time period as good accounting practice requires them to be recorded. The cumulative net efect of such diferences has been that earnings on which tax payments have been required have been more than earnings reported in the " Statement of Current and Retained Earmngs". Accordingly, a deferred tax asset has been established to record the reduction of future tax payments. Year ended Deeember 31 1969 1970 1971 _1972 _1973 ( Amounts le millions) U.S. Federal income taxes Estimated amount payable............... 5256.3 S192.1 5256.4 S315.3 S321.2 Efect of timing diferences............. ( 69.2 ) ( 9.2 ) 19.9 ( 21.0 ) 0.4 Investment eredit deferred-net....... 1.3 ( 6.4 ) 4.1 12.1 13.0 188.4 176.5 280.4 306.4 334.6 Foreign income taxes Estimated amount payable.... 28.5 35.1 32.0 48,1 71.4 Efect of timing diferences......... 9.1 5.9 ( 2.6) ( 2.3 ) ( 0.4 ) 37.o 41.0 29.4 45.3 71.0 Other (pnncipally state and local income tax es )......................... 5.5 3.I 7.3 12.4 13,1 5231.5 S220.6 S317.1 5364.1 S4 l 8.7 31

GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES NOTES TO FINANCIAL STATEMENTS-(coecluded) ~' The principal types of timing diferences are illustrated by the following analysis of the increase (decrease) in th; provision for U. S. Federal income taxes in 1973 (in millions): Tax over book depreciation.................... S12.1 Undistributed earnings of atliliates.......... 6.7 i Stargin on installment sales..................... 1.1 i Provision for: Warranties.. ( 7.7 ) Other costs and expenses.............. ( 2.4) Othe r-ne t.... ( 9.4) S 0.4 4 Individual timing diferences retiected in foreign income taxes were not signincant. ] The Company follows the practice of adding the investment credit to income over the life of the underlying facilities rather than in the year in which facilities are placed in service. The investment credit amounted to $10.3 million in 1969, S3.0 million in 1970,512.2 million during 1971, S20.4 million in 1972. { and S23.6 million in 1973. The amounts added to net earnings were 59.0 million in 1969,59.4 million in 1970. 58.1 million in 1971, S8.3 million during 1972, and $10.6 million in 1973. At December 31,1973, the amount still deferred and to be included in net earnings in future periods was $72.8 million. i Provision has been made for U.S. Federalincome taxes to be paiti on that portion of the undistributed earnings of adiliates expected to be remitted to the Parent. Undistnbuted earnings of amliates intended to be reinvested indefinitely in the aMliates totaled $328.0 million. U.S. Federal income tax returns of the Parent have been settled through 1964 Provision for income taxes as a percentage ofincome before taxes was 45.6% in 1969. 39.8% in 1970, 40.0% in 1971, 40.6% in 1972, and 41.4% in 1973. Items accounting for the principal portion of the diference of 6.6 points between the 1973 rate and the 48.0% U.S. Federal ordinary income tax rate nr that j year were the efect of consolidated atfilices. 2.5 points: inclusion of the earnings of the Credit Corporation in before tax income on an "after tax" basis. 2M oints: investment credit.1.0 points: and lower taxes on l o capital gains,0.3 points.

16. Interest and Other Financial Charges Interest and other financial charges applicable to long term borrowings were $28.9 million in 1969 528.1 million in 1970, $40.8 million in 1971, $52.5 million in 1972 and $58.3 million in 1973. Other interest and financial charges aggregated $49.2 million in 1969. $73.3 million in 1970. 556.1 rmilion in 1971, $54.2 million in 1972, and 568.6 million in 1973.

j

17. Foreign Currency Adjustments j

Foreign currency translation adjustments resulted in a gain of 53.5 million in 1969 and losses of $2.9 1 million in 1970, S15.4 million in 1971, $4.2 million in 1972, and S3.5 million in 1973, i

18. Supplemental Cost Details

] Year ended December 31. 1 _1969 1970 _1971 _1972 1973 ( Amouses is nullions) j Company funded research and devel. I opment using National Science Foun. dation de riniuons......................... NA NA S250.0 $303.2 S330,7 j hiaintenance and repairs ......... S2 14.9 S234.6 234.1 270.4 319.6 i I Social security taxes. 148.4 141.3 140.5 167.5 225.3 Ad ve rtisin g costs................................... 117.4 115.9 129.1 149.0 170.5 i j Rent................................................ 62.0 66.2 68.5 71.5 86.6 N A: Not Available on a comparable basis. l 32

l 1 GENERAL ELECTRIC CREDIT CORPORATION AND CONSOLIDATED AFFILIATES STATEMENT Of TINANCIAL FOSITION ( Amouses la mWeas) l ASSETS Decem6er 3t. 1973 S 95.1 Cash ( N ote 4 )................. 46.3 l Marketable securines (at cost which approximates market)................................. Receivables (Note 2): Time sales, loans and leases: 2,222.6 Consumer financing... 1.320.4 Commercial and industrial financing.. 3.543.0 Total.. 238.5 Inventory financing.. 53.5 Sundry receivables. 3.835.0 Total receivables. (396.7) Deferred income... ( 76.7) Allowance for losses (Note 3).... 3.361.6 Net receivables.... Building and equipment at cost,less accumulated depreciation (58.6 million at December 9.5 31,1973)...... ~.. 17.5 0.her assets. ._.._................~...... 33.530.0 To tal assets. ~........ .... ~. LI ABILITIES, DEF E R RED CRE DITS AN D EQ UITY Notes payable within one year: S 1.5 Banks..................................... 1,417.3 Co mmercial p aper.... ....~ 316.4 Notes with trust departments of banks......... ..~....... 21.0 Current portion of term notes.. 1,756.2 Notes payable after one year: 760.8 Se nior inde btedness.._. 254.S S ubo rdinated inde b tedness.. 1.015.6 2,771.8 Total notes p ayable ( Note 4 )............ 84.6 Accounts and drafis payable 69.3 Deferred payments to sellers.~.... _..~.__.. ... ~. 30.2 Reserves of msurance subsidiaries ~.. 36.6 ~... . _. ~........... Other liabilities ...~.... 2,992.5 Total liabilities ~....... ....~.. I72.4 t Deferred income taxes...... 44.4 I Deferred inyestment tax credit.....~... 216.8 Total defetred credits................ _................. l l Cumulative preferred stock, 7%, S200 par value (authorized 500,000 shares and out-90.0 standing 450,000 shares).............~.............................................. Common stock, $200 par value ( authonzed and outstanding 350,000 shares ). 70.0 I60.7 R et ain e d e arnin gs................~.. ..........................~._........................... 320.7 Total equity ( Note 5 )....................................................................... 53.530.0 To al liabilities. deferred credits a ad equity...................................................... 1 1 1 Commitments and contingent liabilities (Note 9) See notes to financial statements. 33

s GENERAL ELECTRIC CREDIT CORPORATION AND CONSO STATEMENT OF CURRENT AND RETALNED EARNINGS (Amesets le raillions) Year ended Decean6er 31. 1969 1970 197_1 Earned income (Notes I and 6): 19 _'12 1973 Consumer financing: Time sales and loans.... i S136.0 5159.2 S t 80.2 S205.6 S253.0 Inventory.. I7.2 17.7 19.2 21.4 30.5 l Commercial and industrial financitts: Time sales, loans and leases. 45.0 68.0 74.9 81.9 96.5 Amortization of investment tax credit on leased equipment..... .9 2.6 3.1 5.7 10.1 Premium and other income ofin-surance subsidiaries l 2.6 5.2 16.3 199.1 247.5 280.0 319.8 406.4 Expenses: Operating and administrative (other than items shown below )................ 53.4 62.6 72.2 88.3 103.9 Provision for losses on receivables ( No te 3 )...................... 13.3 21.9 40.4 35.9 28.1 Interest and discount ( Notes 4 and 7). 94.0 116.7 99.S 108.5 190.2 Taxes other than income taxes..........3.4 3.8 5.5 7.5 5.7 Rent................................. 2.8 3.4 3.2 4.1 5.3 Depreciation of building and equip-m e n t........... 1.9 1.9 ] 2.I 2.2 168.8 210.3 223.3 246.4 335.4 Income before provision forincome taxes.. 30.3 37.2 $6.7 73.4 71.0 i . mvision for income taxes ( Note 8)......15.1 17.3 25.8 32.3 29.3 Nst earnings (Note 6)....... 15.2 19.9 30.9 41.1 41.7 Retained earnings at January I...... 126.9 130.1 135.0 141.9 I50.0 Total.............~.. I42.I 150.0 165.9 183.0 191.7 Cash dividends-preferred..... -..... 2.6 2.6 5.3 6.8 -.co m mo n.................... I2.0 12.4 21.4 27.7 24.2 Retained earnings at December 31........ S130.1 S135.0 $141.9 S150.0 5160.7 See notes to financial statements. 34 i

GENERAL ELECTRIC CREDIT CORPORATION AND CONSOLIDATED AFFILIATES EATDGNT OF CHANGES IN FIN ANCIAL POSITION (Amemase in mMess) Year endsA December 31. 19ee im im t_m im 3 i Source of funds: Net earnings 5 15.2 S 19.9 S 30.9 S 41.1 S 41.7 ( From operations: i Deferred taxes... I6.3 24.0 27.9 70.6 94.8 Provision forlosses on receivables 13.3 21.9 40.4 35.9 -28.1 l i .5 Amortization of goodwill l.9 1.9 2.2 2.1 2.1 l Depreciation. credst-leased equipment. (.9) (2.6) ( 3.0) ( 5.7) ( 10.1) l Amortization of investment tax 45.8 65.1 98.4 144.0 157,1 j Proceeds from issuance of long. term 37.5 150.7 205.9 377.9 126.1 Proceeds from preferred stock issue. 35.0 35.0 20.0 i de6t. 50.0 Proceeds from common stockissue.- l Increase in accounts and drafts pay-38.7 1.5 i i able.. Increase in short. term debt 268.2 130.6 484.6 l Decrease in cash and marketable secu-56.4 rities i Increase in reserves of insurance sub-l sidiaries (in 1973, S24.5 mi!! ion at-i tributable to acquisition of Puritan 1.0 27.0 1.ife Insurance Company).. Increase in other liabilities... 2.5 4.4 7.3 12.1 3.5 2.1 Other. net Total. S391.I S407.2 $346.6 S593.7 S.849.8 i

==

=-- s .m Application of funds: l Increase in receivables due within one S 70.9 5186.3 $127.5 S166.6 $413.8 year... l Increase in receivables due after one 239.0 211.7 93.I 292.2 389.I l year........... i Accounts written off..... 12.7 17.6 22.8 21.6 21.4 lucrease in deferred income (25.9) ( 44.2 ) ( l 3.2) ( 58.4) ( 82.9) i Funds applied to increase in re-ceivables 296.7 371.4 230.2 422.0 741.4 i Retirement oflong. term debt 16.0 5.1 30.3 44.2 54.1 38.4 52.5 Decrease in short. term debt... Decrease in accounts and drafts pay. 1.I 6.7 7.5 a b le.. Dividends paid......... 12.0 15.0 24.0 33.0 31.0 Increase in cash and marketable secu. rities (in 1973, S21.0 million attrib. utable to acquisition of Puritan Life 65.3 6.8 40.9 20.5 i Insurance Company)......... l 9.0 9.4 1.I 2.3 Other. net..... To tal....... ............... $391.1 S407.2 S346.6 5593.7 5849.8 = - -a

=

==- =mense. See notes to financial statements. 35

GENERAL ELECTRIC CREDIT CORPORATION AND CONSOLIDATED AFFILIATES NOTES TO FINANCIAL STATEMENTS j I

1. Summary of Signineant Accounting and Reporting Principles and Policies The following paragraphs summarize signi6 cant accounting and reporting principles and policies followed by General Electric Credit Corporation (the " Corporation").

Principles of Consolidation-The financial saments represent a consolidation of General Electric Credit Corporation and all its subsidiary companies. All signiacant intercompany transactions have been eliminated. Methods of Reevnling Earned Income-For those receivables on which Anance charges are pre. computed, a portion of the Anance charge approximately equal to account acquisition costs is recorded in earned income when accounts are purchased. The remainder of the bance charge is deferred at ume of purchase and recorded as earned over the life of the account. For large balance,long term contracts and certain other contracts income is recorded as earned in proportion to funds employed (using a formula similar to an actuarial formula) or when Anance charges are due from customers. For most small balance, i shon term contracts, income is recorded as earned on a straight line basis in relation to amounts collected. For those consumer receivables on which Snance charges are not precomputed but are billed to customers when due, income is recorded when the charges are billed. Lease income, which includes related 2 investment tax credits,is reported in accordance with the nnancing method of accounting which provides an approximate level rate of return on ihnds not yet recovered, plus a portion of the estimated residual value of certain leased equipment. Residual values recognized are recorded in income in each year over the remaining matunty of the lease under procedures wtuch recognize a greater proponion of the residual dunng the later periods of the lease. Prior to 1973, residual values were recognized only on certain leased In 1973, the Corporation began recognizing residuals on certain trans. computer central processors. portation equipment based on a 1973 consultant's report estimating signincant values remaining at the expirauon of the lease terms. The Corporation may recognize residuals on other equipment in future years,if appropriate. Building and Equipment-The Corporation follows the practice of recording the depreciation on equipment and the administrative office building located in Stamford, Connecticut on a sum-of the years-4 digits basis over the lives of the assets, Income Taxes-income taxes have been calculated in accordance with recommendations of th i .I American Insutute of Certided Public Accountants on the basis ofincome and expenses included in the income statement rather than income and expenses recorded in the tax return for the year. Under this practice, timing differences between statement income and taxable income arise primanly in connection with leasing transactions and provision for losses on receivables. Allowancefor Losses-The Corporation maintains an allowance for losses at an amount evaluated as ,I sufficient to provide adequate protection against future losses in the portfolio. All accounts deemed to be %.aii o stance uncollecuble or to require an excessive collection cost are written off to the loss allowance 4 ( $5,000 or less) consumer Anancing accounts are progressively written down from 10% when three months f delinquent to 100*o when twelve months delinquent to recognize estimated realizable value. r [ /nsuranct Subsidiaries-The accounts of the insurance subsidianes have been adjusted from the accounting practices presenbed by state insurance regulatory authorities to a generally accepted accounting f principles basis. The principal adjustment defers costs of acquinns new business, primarily commission and amortizes such costs over the premium paying period of the related policy, thus matching income and Liabilities for individual life and annuiues benefits are computed by the net level premium P expense. method. based upon estimated future investment yield, mortality and withdrawals. 9 36 I

GENERAL ELECTRIC CREDIT CORPORATION AND CONSOLIDATED AFFILIATES NOTES TO FINANCIAL STATEMENTS-(Coodeoed) Audit Gulds-During 1973, the American Institute of Certified Public Accountants published an industry audit guide for finance companies which becomes effective for fiscal years beginnmg after Although final computations have not been completed, management believes the December 31, 1973. changes in accoundag practices which may be required in 1974 by this guide will not be material.

2. Receivables-The Corporation's expenence indicates that as of December 31,1973 approximately 487o of the receivables outstanding would be collected within one year and approximately 68?o of the receivables outstanding would be co!!ected within two years. The rate of interest or finance charge on i

receivables outstanding, maturing after one year, ranges from 7?o to 35% Ir.cluded in commercial and industrial financing receivables are net lease receivables of $424.4 m at year end 1973. Net lease receivables include the remening unpaid rentals plus residuals date, less principal and interest on notes and other instruments representing third party participa Since the Corporation has no general obligation on notes and other instruments representing third participation, they have not been included in liabilities, but have been otTset against the rel The charge for participants' interest is deferred and amortized over the life of the lease against investm tax credits and other lease income. For statement purposes, unamortized participanu' interest is nett against deferred income. The Corporation's interest in lease receivables is shown below: 1973 l ~ (h=anaa+= le milliees) Total rentals receivable and rec-i S1,494.4 ognized residual values............. Less participants' share of rentals 1.070.0 424.4 Deferred income..................... (S410.0 ) Less participants' unamortized 440.7 interest..................... 30.7 Net...................... S 455.1 t

3. Allowance for Losses-The following table shows the activity in the allowance for losses o receivables from 1969 through 1973:

Deductices credited to Balsees et Belaseeet Addit 6ces begeasse of charged Accomets other end of Yestended period to earniess _ writtee of _ aceoests_ period ( Amevets le millions) December 31, S37.1 SI3.3 SI 12.7) S(0.6 ) 537.I t969..................................... 41.5 37.I 21.9 ( 17.5 ) 41.5 40.4 ( 22.8 ) ( 2.9) 56.2 j i970....................................... 56.2 35.9 ( 21.6 ) ( 0.5 ) 70.0 l 1971....................................... l972........................................ 76.7 70.0

28. !

( 21.4) 1973.........................................

4. Notes Payable at December 31 totaled $2.771.8 million, consisting of $2.516.0 mj i

debt and $255.8 million (51.0 million due within one year) of subordinated debt. The com rate during 1973 was 7.65#'o. i 37 - ~ - --e ,-g , + - _ - -,

1 f l GENERAL ELECTRIC CREDIT CORPORATION AND CONSOLIDATED AFFILIATES NOTES TO FINANCIAL STATEMENTS-(CanadeseO Short term notes payable totaled $1,756.2 milkn at the end of 1973. The average daily balance during 1973 wu $1,510.9 million. The December 31,1973 balance was the maximum balance for the year. The average short. term interest rate, excluding the current portion of term notes, for the year 1973 was 3.11%, representing total short. term interest expense, divided by the average daily balance. The December 31,1973 average interest rates were: banks,11.00%; commercial paper,9.77%; and notes with trust departments of banks,8.12%. Totallong term debt at December 31,1973 was as follows: 1973 ( Assesses le mullees) Senior: Notes-( a).. . S 198.0 8.50% notes, due 1976. 75.0 i 6.625% notes, due 1977..... 75.0 7.125% notes, due 1978................ 75.0 7.00% notes, due 1979.............. 75.0 7.00% notes, due 1980.... 75.0 4.625% notes, due 197 8 82............. 54.0 7.625% notes, due 19 8 3 92.............. 50.0 Other notes, due 197 5 90............ 83.8 Total senior..................... 760.8 Subordinated: 8.125% notes, due 1991 92................. 75.0 4.75% notes, due 19 87 8 8................. 65.0 Notes-( b ), due 1975....................... 30.0 Other notes, due 19 7 5 9 3.................... 84.8 Total subordinated...................... 254.8 Total lo ng. term notes............. S1,015.6 (a) These notes have a rolling 13 month maturity and bear interest based principally on the Corporation's 180. day open market notes. (b) Prime interest rate plus 1%. I.ong. term borrowing maturities during the next nye years, including the current portion of term notes are: 1974, $21.0 million: 1975, S264.8 million: 1976, $79.9 million: 1977, $85.0 mdhon: and 1978, S80.0 million. At December 31,1973, the Corporation and its subsidiaries had established credit lines aggregating $737.0 million with 83 banks. The Corporation maintains average compensating balances with banks generally equal to 10% of the credit line and generally increased by 10% of any loans outstanding under such arrangements. These balances are normally used also to compensate banks for other banking servtces.

5. Equity Capital-Capital stock totaled S160.0 million and was owned entirely by General Electne Company. There were no shares reserved for options, warrants, conversions or other rights. Changes in capital stock during the ave years ended Decembct 31,1973 were as follows:

(Deller amesets le anilliees) Class of Year Stock Shares Ameiset Shares sold to General Electric............................ 1969 Preferred 175.000 $35.0 Shares sold to General Electric......................... 1971 Preferred 175.000 35.0 Shares sold to General Electric........................... 1972 Preferred 100,000 20.0 Shares sold to General Electric.......................... 1973 Common 250.000 50.0 38

f GENERAL ELECTRIC CREDIT CORPORATION AND CONSOLIDATED AFFILIATES NOTT.S TO FINANCIA1. STATEMENTS-(Conelvded) 6. Earned Income-Residual value:s for leased equipment recorded in 1973 earned income aggregated S3.2 million, including $2.8 million (St.5 million net of Federal income taxes) applicable to residual values for transportation equipment nrst recognized in 1973 (see Note 1-Methods of Recording Earned Income). 7. Interest and Discount Expense included in the consolidated statement of current and retained earnings is net of small amounts ofinterest income on marketable securities. Interest and other Hnancial charges applicable to long term borrowings were S13.6 million in 1969, $15.6 million in 1970. 533.2 million in 1971, S48.5 million in 1972 and 568.2 million in 1973. Other interest and Anancial charges aggregated S80.4 million in 1969, $101.1 million in 1970,566.6 million in 1971, S60.0 million in 1972, and S122.0 million in 1973.

8. Provision for Income Taxes for 1969 through 1973 is summarized in the following table:

lavestment Estimated Efects of tax credit tues peratie tinies deferred-Yeerended (reeeverstie) diferences set Total ( Anoasts la millions) December 31, 196 9................. $( l.2) S 6.5 S 9.8 515.I 1970.............................. ( 6.7) 15.6 8.4 17.3 1 9 7 1............................ ( 2. ! ) 21.I 6.8 25.8 1972........... ( 38.3 ) 62.5 8.1 32.3 1 9 7 3........................ (65.5 ) 65.5 29.3 29.3 The principal types of timing dirTerences are illustrated by the following analysis of the increase (decrease) in the provision for U. S. Federal income taxes in 1973 (in millions): Lease income.................. S65.9 Receivable loss provision.............................. .2 Other ne t.................. ( 6) 1 $65.5 e Provision for income taxes as a percentage ofincome before taxes was 49.8% in 1969,46.5% in 1970 45.5% in 1971,44.0% in 1972 and 41.3% in 1973. Inclusion in earned income of amortized investment tax credits which are not taxable accounted for substantially all of the difference of 6.7 points between the 1973 rate and the 48.0% U.S. Federal ordinary income tax rate for that year. Diferences in other years were generally due to the same factor. General Electric Company Ales a consolidated Federal income tax return which includes the General Electric Credit Corporation. The provision for estimated taxes recoverable represents the effect of the Corporation and its subsidiaries on the consolidated tax. 9. Commitments and Contingent Liabilities-There were no known contingent liabilities of any material amount for which provision had not been made and no material commitments outside the normal course of the Corporation's business. 39

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ae GENER AL $ ELECTRIC l 1 l l

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~ $ Y,> r,'[*<~,.*.f5 b ,y ~ STATEMENT AT ANNUAL PRESS CONFERENCE h h FOR BUSINESS AND FINANCIAL EDITORS By Reginald H. Jones Chairman and Chief Executive Officer General Electric Company Waldorf-Astoria Hotel New York, New York January 22, 1981 I'll move immediately to the subject of primary interest, which is our financial results for 1980. The final, audited results will not be available until next month, but preliminary, unaudited results indicate that net earnings of General Electric for the year 1980 were approximately $1.514 billion, or$6.65 per share, an increase of fo from the $1.409 billion or $6.20 per share reported for 1979. Sales for the year were about $24.96 billion, an increase of 11% from $22.46 billion for 1979. Earnings for the fourth quarter of 1980 were about $411 million or $1. 80 per share. This was an increase of fo from the $383 million or $1.68 per share, for the last quarter of 1979. l Sales for the 1980 fourth quarter were about $6.92 billion, some 13*o higher than the $6.13 billion for the same quarter of 1979. j 1 1 l

~ l This good performance in 1980, despite a generally adverse F economic climate, is the result of two things: the great diversity l of GE's businesses which is a source of strength in good times and bad; and the ability of our managers to anticipate and prepare for the downturn. Each Sector of the Company had higher revenues and earnings in 1980 than in 1979. Preliminary data show that operating margin dollars for 1980 6 were up from 1979. Although the total year operating margin rate was lower than a year ago, the rate for the fourth quarter was the highest for any quarter during 1980 and was also better than the comparable quarter of a year ago. Good operating margins and rates reflect major continuing efforts throughout the Company to improve productivity and control inventories. Improved earnings for 1980 also reflect higher income from other sources, including General Electric Credit Corporation, as well as a somewhat lower effective tax rate. i COMMENTS ON OPERATIONS { As usual, revenues and net earnings on the basis of our Sector 4 organization will not be reported until our final audited results for 1980 l 1 e

.. l 1 l l are available. However, let me comment generally on the various l segments of the Company's operations. Consumer Products and Services earnings were slightly ahead of 1979, principally because of the continued strong growth of General Electric Credit Corporation. In the consumer products area, sales were modestly higher but earnings were down somewhat, i i principally because of lower unit shipments of most major appliance l and air conditioning products. Productivity-improvement programs l l partially offset the effect of these declines. Earnings from lighting l l operations were down slightly. Other product operations reported earnings at least as good or better than last year. ( In Industrial Products and Components, earnings wt.'e well ahead of a year ago on somewhat higher revenues. Busine erving transportation, construction, and industrial motor cu omers had particularly strong earnings. Industrial electronics and apparatus L service businesses had higher sales but lower earnings, reflecting in part the impact of new programs oriented toward development of products and services to better serve the nation's growing need for more productive manufacturing plants.

-4. Power Systems earnings were up substantially from a year ago on good increases in revenues. Higher earnings from sales of steam turbine-generators and the expanding installation and service engineering business made good contri-butions to the improved results. Gas turbine sales were higher than a year ago although earnings were down as stiff foreign competition restrained margins. The Power Delivery business continues to be depressed, with inadequate recovery of cost increases resulting in lower earnings. As planned, nuclear operations continued to incur a modest loss. Technical Systems and Materials earnings were somewhat higher than a year ago on good sales increases, while continued emphasis was placed on future-oriented programs. Strong sales and earnings performances in aircraft engines and information and comtnunications bur'nesses offset the effect of weakness in automotive and other consumer-related markets for engineered materials. Aerospace and medical systems had higher sales and somewhat better earnings. 4 Foreign Multi-industry earnings and sales were also improved from 1979. The Foreign Multi-industry segment is only one part of d e , _, ~ - ~ w

_~ l l, l l General Electric's international business. In total, GE's inter-national activities now account for approximately 40*o of the Company's earnings. Export sales from the United St.ates to external customers, one of the many important dimensions of our worldwide business, were about $3. 8 billion, up $1 billion from 1979. This represents an important positive contribution to our country's balance of trade. In Natural Resources earnings and revenues for 1980 were at record levels. Earnings improvements were paced by oil and gas, iron ore, copper and domestic coal operations. These more than offset lower earnings for Australian coking coal, shipments of which were slight.y below those of 1979, primarily because of a third quarter work stoppage involving an employee dispute over government tax policies. OTHER FINANCIAL COMMENTS The positive results which I have just summarized were not made at the expense of investments in the future. Our capital expenditures in 1980 were about $1.93 billion, some 53*o greater than our previous high of $1.26 billion only last year.

- l Thus, General Electric has invested almost $6 billion in the last 1 five years to upgrade and expand our productive capability. I Our research and development efforts also continued at high l levels in 1980. Total R & D expenditures were about $1.6 billion j i compared with $1.4 billion in 1979. Most importantly, we again ] increased the Company-funded portion of those expenditures, which C were approximately $760 million in 1980, a 19 6 increase over the previous year, which in turn had been 2$ more than the year before. Our financial position remains excellent. Total cash and marketable securities at December 31, 1980 aggregated $2.20 billion. That's down some $375 million from year-end 1979, after coming through a recessionary year, having made record capital expenditures, and paying the share owners higher dividends. We stated a year ago at this press conference that we believed ] l our financial strength placed us in a sound position to carry us through an economic slowdown without sacrificing future-oriented projects, and also would enable us to take advantage of unprecedented business l l development opportunities in the 1980's. The economic slowdown l occurred, and we came through well. i

, l OUTLOOK FOR 1981 f Now, what is the outlook for 19817 As most of you know, it is not our custom to predict sales or earnings. But a few comments on the economic situation might be in order. Our economists are forecasting real GNP growth in the vicinity of fo in 1981. This is very slow for the fint year of recovery from a recession. The first half will probably be uneven, as unemployment edges up and housing starts and auto sales remain in the cold-weather doldrums. But we expect the recovery to start gathering momentum sornetime in the second quarter, and accelerate as tax cuts boost the purchasing power of consumers and business firms. The economic outlook could be considerably worse if two of our basic assumptions are not met. First of all, we egect the Congress to enact a tax cut on the order of $35 to $40 billion during the second quarter of 1981, with the business tax reductions retroactive to January 1. While the individual tax cuts are necessary to offset purchasing power losses and prior tax increases, the business tax cuts are even more important. In our opinion,

. at least a third, and preferably a half of the tax cuts should be directed at building up the purchasing power of business, so that industry can modernize its auing plant and equipment and invest in new technology. Highest priority should be given to improved capital cost recovery somewhat along the lines of the "10-5-3" formula that has broad bi-partisan support in the Congress and in the new Administration. The tax bill should also include a corporate rate reduction of one or two points, and a reduction in capital gains taxes. Our second assumption is that 1981 will see some reduction in both the level and the volatility of interest rates, which were of course a major deterrent to both business and consumer spending in the past year. Inflation, unfortunately, appears to be locked into an 11-12"o rate, as measured by the Consumer Price Index, during the year ahead. Thereafter we would hope that inflation will start to cool off as productivity improves and the new Administration begins to exercise greater fiscal and regulatory restraint than we have had in recent years, l l 1

l -9 A YEAR OF TRANSITION 1981 is a year of transition for the United States, as a new Administration and a new Congress come into power. It is also a year of transition at General Electric. J As you know, I will retire on April 1, and Jack Welch will take on my duties as Chairman and Chief Executive Officer. Our Vice Chairmen, John Burlingame and Ed Hood, assume expanded responsibilities, and together these three seasoned executives will take over the leadership of the Company. They're well prepared for the job, all three of them having i established outstanding records as builders of new businesses on their l way up the ladder. Each of them has had management experience in many sectors of the Company, and they have the necessary financial and technical sophistication to realize the enormous potential inherent ) in our present situation. i 1 Earlier this month, we held our annual conference of officers and managers from all over the Company, and we talked about some of the things we've done together over the past eight years to position General Electric for the 1980's.

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Perhaps the point of greatest satisfaction for us as managers is a record of solid financial performance in a decade marked by econornic and political turmoil. We had the pleasure of achieving the billion-and-a-half-dollar mark in earnings, and we have a balance sheet that gives all of us confidence in our resources for the future. Since 1970, we've been growing our earnings, on the average, about 14*o a year. That's substantially faster than the Standard & Poor's list of 400 stocks and the U.S. gross national product. This disproves the tired charge that we are merely a cotnpany that cycles with the GNP. Over the same years, we've also turned our system of strategic planning and differentiated resource allocation from a paper exercise into a working -- and winning -- reality. The proof, of course, is in the changing profile of our sources of earnings. Whereas about 80?o of our earnings a decade ago came from our traditional electrical manufacturing businesses, now these businesses provide less than half of our earnings. New businesses in services, natural resources, an-made materials, and transportation now provide the majority of our earnings. We've also internationalized the Comparv so that about 40"c of our earnings come from sales to c-ners overseas.

i, We've had a technological renaissance, paced by big increases in our R & D spending. We're launched on a productivity drive that should totally transform our factories and offices. We've moved out of quite a few unpromising businesses, and developed many new ones. Thus, we've put together a new General Electric, a company of entrepreneurs that sees its primary mission as innovation--the creation of new products and new markets, to serve the needs of a changing world.. As we've said to our managers, the real business of General Electric is creating businesses. This is the Company that we're turning over to the new team this spring. I shouldn't say "new team," because they have been very important figures in our management in the past decade. John Burlingame has internationalized the Company and has a world perspective that is indispensable for the 1980's. Ed Hood has amply proven his ability to create and grow businesses, especially in the critical arenas of high technology. And Jack Welch, our next Chairman, is in my opinion and that of our Board of Directors the very prototype of the chief executive officer of the 1980's: intelligent, quick-minded, imaginative, and yet pragmatic and possessed of sound common sense. He's aggressively entrepreneurial, and perhaps impatient; yet orderly,

logical, and thoughtful. He's sensitive to the moods and expectations of society, yet focused on the future of the General Electric Company. I have every confidence in these men, and I'm going to ask them to join me now, along with our Chief Financial Officer, Tom Thorsen, to take your questions. a l l

&s s q G / SECURITIES AND EXCHANGE COMMISSION U ' ' .4 i WASHINGTON, 3.C. 20549

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g.c..NY"T?f l K 2n~; ~ q \\ FORM 10-K l i ;. ANNUAL REPORT PURSUANT TO SECTION 13 0F THE SECURITIES EXCHANGE ACT OF 1934 i l For the fiscal year ended December 31, 1979 Commaission file number 1-35 i GENERAL ELECTRIC COMPANY (Exact came of registrant as specified in charter) j New York 14-0689340 j (State of incorporation or organization) (I.R.S. Employer Identification No.) { 1 River Road, Schenectady, New York 12345 j 3135 Easton Turnpike, Fairfield, Conn. 06431 203/373-2431 (Addresses of principal executive offices) (Zip Code) (TelephoneTo. ) At December 31, 1979, 227,838,531 shares of comanon stock with a par value of i $2.50 were outstanding. i l l l SECURITIES REGISTERED PURSUANT ] TO SECTION 12(3) 0F IEE ACT: j Name of each exchange on i Iltle of each class which registered Common stock, par value $2.50 per share New York Stock Exchange Boston Stock Exchange 5.30% Sinking Fund Debentures Due 1992 New York Stock Exchange 7 1/2 : Debentures Due 1996 New York Stock Exchange 8 1/2 : Debentures Due 2004 New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No

i l .,e h PART I t l 9 Icm 1-Business Ganeral i 'hneral Electric (GE) 'is one of the largest and most diversified t industrial corporations in the world. From the time of its incorporation in .l 1892, GE has been engaged in developing, manuf acturing and marketing a wide variety of products for the generation, transmission, distribution, control, t and ut111:stion of electricity. Over the years, development and application I of related technologies has broadened considerably the scope of the Company's l activities. In addition, in December 1976 Utah International Inc. (Utah) was acquired in a transaction whereby Utah became a wholly owned affiliate of l General Electric. Utah's principal business is the extraction and sale of natural resources, mainly abroad. Its primary product is metallurgical l (coking) coal which is mined in Australia where Utah is a leading producer. l L With respect to manuf acturing operations, it is believed, in general, l that General Electric has a leadership position (i.e., number _one or two) in i most major markets served. Aggressive competition, of ten highly concentrated and worldwide, is encountered in all areas of its business activity. In many l instances, the competitive climate for these operations is character 1:ed by l patterns of changing technology requiring continuing research and development commitments and by capital intensive customer needs and producer requirements. ? With respect to natural resources, the marketing of minerals is influenced by che location, product mix, price, accessibility of competitors' mines, and general economic and political conditions. In general, development of mineral resources involves extensive exploration programs and commitments to capital expenditures prior to commencement of operations. General Electric has majority or minority interests in a number of foreign ' companies engaged primarily in manuf acturing electrical and related ( products and in distributing operations outside the United States. Through l Utah, GE also has majority or minority interests in several companies I primarily engaged in mining operations in foreign countries. In addition, l General Electric has substantial export sales from the United States l Unless otherwise indicated by the context, the terms "GE", " General 7 Electric" and " Company

• are used on the basis of consolidation described on l

page T-5. Unless otherwise indicated by the context, the terms " Utah International Inc.", " Utah" and " Utah International" mean Utah International Inc., as well as all of its " affiliates" and " associated companies" as those { terms are used on page F-5. i Industry Segments General Electric's operations are highly decentralized and are organized l into six Sectors, each of which is a sacro-business / industry. Each Sector is both a sanagement and planning level organization and consists of a number of l Strategic Business Units (SBUs), generally a mixture of SBUs of differing l f I 9-

si:ss (designated as groups, divisions, or departments), reporting to a Seccoe Ixecutive. " Indust:7 segments" for financial reporting purposes and as used in this report are based on the Sector organization vich certain nodifications to conform with Financial Accounting Standards Soard requirements. Se following tables include certain data c,y industry segment f or General Electric Company for the past five years. As used in this report, " r e venue s consists of sales of products and services to customers and other income from external sources. " Operating profic" by industry segment consists of revenues less directly traceable costs. General corporate income and expenses, interest and other financial charges, provision for income taxes, and minority interest in earnings of consolidated affiliates are not reflected in operating profit. " Net earnings" include the allocation of 3eneral corporate income and expenses, interest and other financial char 3es, provision for income taxes, and sinority interest in earnings of consolidated af filiates as described on page T-l3 of the financial statements. i ?rdnery Seymus; Than Tome eximd mr=d = 31 l 1975 1976 1977 1978 1979 (Amen in rim ) nz m us c:ns2nse ?:tducts sti Serricas S 3,a]9.3 $ 3,452.6 3 4,148.1 S 4,787.8 55,357.8 Nt esmiras of 2 Cnnitt Gew............. 49.9 57.1 67.2 77.3 39.9 3,059.2 3,KB.7 4,215.3 4,365.L 5,a7.7 l Drbst:dal eterix:cs ari C,- m.................... 3,026.6 3,:69.8 3,598.1 4,123.8 4,52.8 n ar Syste s......................................... 2,885.1 2,998.4 3,217.6 3,485.7 3,564.4 Technical Systs:s and MaH =1 a....................... 3,250.8 3,$88.6 4,144.6 4,744.6 6,050.8 S n n i 1eruress..................................... 682.6 1,032.9 965.l l,032.2 1,260.3 Tontign.4 del-Drbst:7 Q=r=H ~=..................... 2, 19 7.9 2,333.6 2,562.1 2,767.3 2,90 0.5 Canstal expxace itain ati elininscfas.............. (8Z3.0) ( 831.4) (893.9) (945.9) (1,0E5) 2 cal.......................................... $14,279.2 S15,971.6 S17,908.9 S33,072.8 522,9ED.0 l Lenoeget salas Cbnamur ?Ja m arx1 3ervices........................ S 129.7 S 157.8 S 181.9 S 188.6 S 199.1 N smi crerbets and C+ --.................... 333.1 395.3 431.5 W:8.5 507.3 PsarSysens......................................... 175.8 151.6 153.9 174.4 lC9.9 Tedufcal Systam ati : hr=Hm1 a....................... 145.3 12 8. 1 148.0 189.0 255.0 ?crufgn.3d::1-Lxbst:7 W~=..................... 42.0 41.0 49.4 55.3 63.5 Eli-drucions.......................................... (825.9) (264.3) (954.7) (1,075.3) (1.235.3) S S 3 S Tctal..........................................S 3

e Lxistry Sagner Thm (c:ct'd.) Tame eoded rwne.c 21 1975 1976 1977 1978 1979 (hm in dT1ha) TLTA BEEUS (coac'd.) eenmd. salas axi cx ne hrxna Cxsuner ?::xir:::s acri Serr1 css........................ $ 2,S79.6 $ 3,3 4.3 S 3,966.2 S 4,599.2 S 5,U8.7 lInc aarnfrgs of 2 Cnsitt Cem.............. 49.9 57.1 67.2 77.3 5.9 2,929.5 3,251.9 4,033 4 4,676.5 5,248.6 M =r-d =1 Pr zics ni Cmtenancs.................... 2,693.5 2,874.0 3,256.6 3,655.3 4,295.0 Ps.ar Sycecs......................................... 2,709.3 2,346.8 3,C63.7 3,311.3 3,3 % 5 Tadufesi Systans ani Swea19....................... 3,105.5 3,570.5 3,996.6 4,555 4 5,905.3 thcucal Fas:urces..................................... 682 4 1,CC2.9 965.1 1,032.2 1,260.3 Formian di:1ci-nxist:y Ct=re m1s..................... 1,155.9 2,32.6 2,512.7 2,712.0 2,337.0 Canural cer;crata itens............................... 2.9 22.9 ~0.8 1:9.9 1~8.3 Tbc11.......................................... s14,279.2 515,971 4 317,5C8.9 520,072.3 s22,920.0 SUEU' OEFE::C ~2Cfr 0xanne ?toics ari Serrices........................ S 245.6 S 397.1 82.3 5 573.3 s 567.7 ?'ac esmhas of G Cnsitt CW.m............. 49.9 57.1 67.2 77.3 89.9

95.5 454.2 550.0 650.6 657.6 krist::ial ?. ri r-n arri Cw.m....................

261.3 302A 266.7 426.3 4%.9 m Psame Syscams......................................... 12.5 154.4 162.7 196.3 173.7 Tectnical Systes ani Mw=rd =1 =....................... 322.3 399.3 4 73.7 545.3 672.1 21stural Fasm:ss..................................... 242.0 359.7 'B9.2 371.5 431.1 ?craign Sititi-brise:7 Q= =r%=..................... 167.3 3.0 210.8 244.9 2@.8 Total srspace eW g ; refit..................... 1,439.9 1,S71.0 2,153.1 2,434.9 2,660.2 General c:rprace icans ati altsfruciens.............. (79.1) (68.8) (%.8) (38.0) (10.9) Incarest ari ether Sinrr:fal <turges.................. (186.8) (174.7) (199.5) (224.4) (258.6) Tbcal.......................................... S 1,174.0 $ 1,627.5 s 1,888.3 S 2,152.5 s 2,390.7 E TRCC Ctrazar Pt-d r*= art Serr1ce........................ $ 113.6 S 323.5 $ 255.'9 $ 3r.2 S 310.8 21ec esmirgs of G Cnstit Gr;-wwdm-............. 49.9 57.1 67.2 77.3 99.9 163.5 250.6 323.1 377.5 .Q.7 Drist:1al ?:rd m arri C+ -m.................... 133.0 1604 191.1 222.5 271.8 Ps.arSysess......................................... 62A 61.4 75.5 23.2* 113.9 '"actuical Syscum arri >*=rd a1 =....................... 160.2 n.3 247.5 277.3 356.2 t hn al 2asams..................................... 107.7 'St.3 19 6.2 '&.1 2L5 ?craign:ti:".-in4=c:7 ;werdms..................... 57.7 74.7 70 4 75.5* %.6 0 4.0 (9.1) (15.3) 3.l* (5.9) Carecal urnaca itaas ati elinfnstfcrs.............. _ Total.......................................... S 689.3 3 93U.6 3 1,C88.2 s 1,2:9.7 5 1,Z8.3

• Tescacai - See page F-13 4

Y The following table sets forth assets by industry segment at year end 1976, 1977, 1978 and 1979. At h - h-r 31 1976 1977 1978 1979 I i (h in ad11h==) l ASS:::S Consumer P:oducts and Services............... $ 1,643.7 S 1,791.9 S 2,018.5 $ 2,156.8 7 hvast:nsce in CE Ctedic cv%........ f48.5 600.0 677.3 817.2 2,192.2 2,391.9 2,o95.8 2,974.0 t bdustrial Ptoducts and <* - -

a...........

1,726.9 1,925.1 2,125.1 2,328.9 l ? m r Systans................................ 2,153.8 2,152.8 2,104.6 2,135.0 Tech:21 cal Systes ani hearials.............. 1,896.0 2,128.3 2,682.7 3,a22.1 Matural % sources............................ 1,235.3 1,286.0 1,49.3 1,679.4 Foreign miti-Eduse y 0= = H mm............ 1,634.3 1,349.0 2,099.6 2,258.8 Caneral corporate itsas arzi a1 WHm=..... 1,191.0 1,363.7 1,338.9 1, 31 6.3_ f Toca1................................. S12,049.7 $13,696.8 $15,036.0 $16,644.5 j I A su= mary description of each of the above industry segments follows. For information concerning recent operating developments, reference is made to '* 0ene ral Electric Management's Discussion and Analysis of Statement of Earnings". l Constseer Products and Services General Electric manufactures, distributes and services one of the I largest and broadest lines of electrical consumer goods in the world. Consumer Products and Services consists of major appliances, air conditioning equipment, lighting products, housewares and audio products, television i receivers, and broadcasting and cablevision services. It also includes service operations for major appliances, air conditioners, GE celevision receivers, and housewares and audio products. There is substantial variation among the kinds of customers served, the technology and racketing methods employed and General Electric's relative market positions. General Electric Credic Corporation, which is organizational 17 responsible to this Sector, is commented on separately below. Markets for consumer products can be adversely affected by fluctuaticas in consumer disposable income, availability of consumer credit, and housing construction, whereas prefitability can be adversely influenced by the effects i of inflation on production costs and factors which may inhibit price increases. In addition, these products must increasingly be designed for optimal energy use and to conform vich a growing multiplicity of federal and state product regulations. [ Major Appliances include both General Electric and Hotpoint brands of kitchen and laundry equipment (such as refrigerators, electric range, i freezers, disposers, washers and dryers), as well as some appliances f or 5 i

I l resale under private brands. Sales to a variety of retail outlets constitute a. major portion of these sales. The majority of such sales, particularly laundry products and refrigerators, are for replacement. The other principal market for major appliances is accounced for by sales. to building contractors for insca11ation in new dwellings. Competition is very active in all products and comes from a wide vartecy of manuf acturers and suppliers. A major factor influencing competition is price, with the resuic that important emphasis is placed on ainimizing manufacturing costs. Other significant factors include quality, features offered, innovation and appliance service capability. Air Condicioning equipment consists of room and central types, including heat pumps. Room air condicioners are generally sold chrough retail channels and central air conditioners are more orienced toward new construction markets. (General Electric does not compete for lar38, specially designed applications which are highly cuscomized). Competition is strong in the major markets served by this business, which 1s influenced by demographic populacion shifts as well as seasonal 1 factors. Product quality and reliability are significant in maintaining courpetitive posicion, and energy efficiency is of increasing importance. incandescenc, Lighting products include a wide variety of lamps fluorescent, photo, miniature and high intensity - as well as luminaires ] for street lighting and residential use. Consequencly, markecs and cuscomers are extremely varied, ranging from household users served through retail outlets to original equipment manufacturers, such as :he automotive induscry. Ccmpetition arises from a relatively small number of major firms and is based principally on price, effective distribucion .and product innovation. The nature of the products and market diversity make the lighting business somewhat less s ensitive' to economic cycles chan other consumer businesses. Housewares and Audio Products and Services include small appliances for personal care, garment care and food preparacion; home security devices; and radio and related products. The makeup of the product six is closely linked to changes in consumer life styles. With many manufacturers in the field, price competition (and consequently cost control) and product innovation, as well as merchandising skills, are important factors. Television Receivers are sold principally in the domestic market. Industry profitability has been generally poor in recent years. General Electric experiences strong competition from several large producers, some of which have a stronger market position in these products than General Electric. Broadcasting and cablevision operations, which are subject to various government reguluions, include 3 AM and 5 FM radio scacions, 3 7EF T7 stacions and U cableviston systems. The Company, Cox 3roadcasting Corporacion, a Georgia corporttien ("Cox"), and a wholly-owned subsidiary of the Company have entered into an Agreement and Plan of Merger dated as of February 20, 1979, as amended providing for the merger of Cox and such 6 ~ e,,r-r,,.-~,- -n,-m-- ..v,vr- ,,m-r w w

0 t g subsidiary with Cox thereby becoming a wholly-owned subsidiary of the Company. Cox's principal businesses consist of television and radio broadcasting and cable television systems. It is also engaged in automobile auctions and, to a lesser extent, in business publishing and notion picture production. The proposed merger was approved by the shareholders of Cox on July 18, 1979. Completion of the transaction is subject to various conditions including receipt of the necessary governmental approvals particularly from the Federal Communications Commission ("yCC"). In this connection, because of the FCC's rules governing the number and location of broadcasting stations which may be owned by a single licenses. Cox and General Electric Company will be required. to - dispose of the assets and businesses of three television stations, two AM radio stations (although three are the subject of proposed dispositions) and five FM radio stations. Agreements conditioned upon the completion of Cox merger have been entered into with buyers for these stations. FCC approval will also be required for these related station dispositions. Processing of the applications for all of the FCC approvals antinues, and the Company believes that the FCC will render at least a preliminary determination thereon prior to May 31, 1980. However, the terms of the Agreement and Plan of Merger provide that unless the transaction is consummated on or prior to May 31, 1980 any party has the right in its discretion to choose to abandon the merger. Upon consummation of the merger, shareholders of Cox will receive common shares of the Company in exchange for all of the outstanding capital stock of Cox. The number of Company connon shares to be exchanged will be determined by a formula using derived values for Company common stock. f Therefore, the number of such shares c6 be used cannot be established at this time and, in any event may consist of newly issued shares, shares from the Company's creasury or a combination thereof. i General Electric Credit Corporation i General Electric Credit Corporation "GICC" a wholly-ow'ned nonconso11 dated finance affiliate, primarily engages in consumer, commercial,and industrial financing. It also engages, to a lesser degree, in the life insurance and fire and casualty insurance industries. t Consumer financing consists mainly of retail time sales and dealer inventory financing of home products (major appliances, television sets, furniture and other home furnishings) and special products (primarily sobile homes). Consumer financing also includes installment loan financing. Commercial and industrial financing consists of equipment sales financing provided through time sales, loans-and leases; industrial loans and leases and commercial loan financing (revolving credit and accounts receivable j financing). Products of companies other than General Electric constitute the i major portion of products financed by GECC. Substantially all of the products financed by C. C0 are new products. Commercial and industrial financing also includes real estate financing. l 7

During 1979, GECC acquired for cash substantially all of the assets and assumed certain liabilities of Amfac Financial Corp., a wholly owned i subsidiary of Amfac, Inc. Operating primarily in Hawaii, this operation of fers ' commercial and residential real estate loans, equipment leasing and J thrift investment programs. GECC's activities are subject to a variety of federal and state regulations including, at the federal level, the Consumer Credit Protection Act, the Equal Credit Opportunity Act and certain regulations issued by the Federal Trade Commission. A majority ' of states have ceilings on rates chargeable to customers in retail time sales transactions, installment loans and revolving credit financing. To date such regulations have not had a sacerial adverse effect on GECC's volume of financing operations or profitability, although the recent rapid increase in interest races and their effect on GECC's borrowing cost is causing,CECC to re-assess the viability of certain types of landing in a number of states. GECC's insurance subsidiaries are subject to regulation by state insurance commissions. The Federal Reserve Board recently announced a number of voluntary and mandatory credit controls as an element in the government's anti-inflation program. GECC is currently assessing the impact on its operations of these controls and is developing plans for compliance with the control regulations. GECC is not yet able to predict the effect, if any, which these credic controls may have on the profitability of its operation. Industrial Products and Components Industrial Products and Components include a wide vartecy of products made by a number of manuf acturing units for use within General Electric as well as for 4 ale to external customers. These products include those used by , as part of their own productive capacity as well as by manufacture manufacturers and contractors for incorporation into their own and products. In addition, certain services are offered and distribution capabilities are maintained by this Sector. Business prospects for this segment as a whole tend to respond to general trends in the nation's economy, although the relative impact of these trends on any particular group of related products and services may vary. Each such group tends to be affected by dif fering factors influencing the industrial sector. For example, components such as sull motors and controls can be affected by broad trends in demand for esusumer products which may be in an economic phase different from trends in espital expenditures by industrial customers, which substantially influence industrial capital equipment. In contrast, the positive business pattern of services over the past several years has not been appreciably affected by changes in the general economy. I i I 8

~.. Motors and socor-related products include small socors and appliance controls as well as larger sizes of DC and AC socors and 3enerators. These products are used internally and are sold extarnally, principally to manufacturers of original equipment, distributors, and industrial users. Competition. includes other motor and component producers, integrated manufacturers, and customers' in-house capability. The markets for these products are extremely price competitive, putting l emphasis. on economies of scale and manufacturing technology. Other i characteristics include rapidly changing technology, the cyclical nature [ of the consumer end-use market, and backward integration by major customers who represent a large portion of the sales of individual motor i products. Contractor Equipment Operations - focus on distribution and circuit protection equipment for construction narkets. In addition, these operations include general purpose controls, wiring devices, and wire and cable products. Products are sold to distributors, electrical contractors, large industrial

users, and original equipment manufacturers.

Markets are affected principally by levels and cycles in { noc-residential ' cons truction and national plant and equipment exp.enditures. Competitors include numerous other large manuf acturers. l l Transportation Products include diesel electric locomotives, transit j ,, _ propulsion equipment, and motorized wheels for off-highway vehicles such as chose used in sining operations. locomotivet are sold principally to domestic and foreign railroads while markets for other products include [ state and urban transit authorities and industrial users. yoreign l markets are increasing in significance, and competition worldwide j i _.. includes major U.S. and foreign firms. I Industrial Electronics Operations include electronic components such as capacitors and semi-conductors, industrial

controls, and drive i

systems. Customers include ' industrial distributors, original equipment j sanufacturers and industrial users. There is a wide vartecy of domestic l and foreign competitors. i Se rvices, which are provided from domestic and foreign locations, include the maintenance, inspection, repair and rebuilding of electrical l and mechanleal apparatus produced by General Electric and others. l Distribution includes a nationwide network of electrical supply houses off ering products of General Electric and other manuf acturers to electrical contractors and industrial and commercial customers. i f l a 9 k i

Power Systems 1 Power Systems is comprised principally of products for the 3eneration, transmission and distribution of electricity, and is substantially oriented towards electric utility customers. These products differ in contribution to sales and earnings, market position and production cycle. Although the market for these products is world-wide, the major portion of sales is domestic. The market is sensitive to electric load growth, which fluctuates with changes in the general economic environment; it is also sensitive to the financial i condition of the electric utility industry. 'ihile the order backlog for steam turbines and nuclear equipment remains very large, the continuation of high utility reserve margins and uncertainty about future load growth as well as uncertainties regarding U.S. energy policy is likely to continue to result in a low volume of new orders in the next few years and some further deferments and cancellations of existing orders. For further information, see " Orders Backlog" on page 13. The large variety of power generation and delivery products offered by the Power Systems Sector well positions General Electric to continue to serve j the electric utility industry, whatever the future directions of national J energy policy. ] Steam Turbine-Generators, the lar3est business in this category, convert ener3y produced by fossil boilers (fueled by coal, oil or 3as) or nuclear reactors (fueled by uranium) into electrical or mechanical power. In addition to the electric utility industry, the co amercial marine market, the US Navy and private industry (for plant power systems) are customers. tihile General Electric is an important factor in each of these markets, competition is intense. Because fixed cost levels are high, profitability is sensitive to changes in volume; profitability can also be adversely influenced by inflation. Gas Turbines are used principally as packaged power plants for j electric utility service and also for mechanical drive applications such as pipeline pumping. International sales are a significant portion of the business, with intense and world-wide competition. Because domestic utility purchases of gas turbines are primarily for peak-load service, utility demand is likely to remain de;,ressed until reserve margins are reduced. Nuclear products include power reactors (of the boiling water type), nuclear fuel assemblies, and nuclear plant services. General Electric is spending significant amounts on engineering and development in support of nuclear projects in the backlog. These expenditures, when coupled with the effects of deferments of shipments and cancella.tions of orders in recent years, have placed the nuclear business in a continuing loss position. 'Jhile GE management believes that increased reliance on nuclear power is an essential element of an effective U.S. ener3y policy, the use of nuclear power has become a subject of controversy, both political and social, and the nt. clear market remains depressed. For the U.S. utility industry, cancellations of nuclear plants have substantially outnumbered new orders during the last five years. It is the belief of 10

GI management that resumption of nuclear orders will require more than renewed demand for electrical generating equipment. There sust be 3overnmental action to reform the nuclear licensing process and to resolve existing uncertainties regarding such issues as radioactive wasce storage, as well as nuclear export policy. Customers have required that nuclear fuel be sold with warranties covering the useful life of :he fuel, even though the experience base for l' predicting 'the life of nuclear fuel under. power plant operating conditions is still relatively small. As of December 31, 1979, there vers open warranty commitments related' :o fuel in service wi:h an i original sales value of approximately $1 1 billion, and on fuel in the j backlog presently valued at $3.0 billion, covering deliveries through the i early 1990s. Also, some fuel orders include reprocessing, pluconium j fabrication and waste disposal services. In view of currenc U.S. j Government policies, i: is highly uncertain whecher such services can be provided. l ( Power Delivery products include transformers, power circuit breakers, switchgear, and meters, the principal market for which is :he electric utility industry. Margins are vulnerable :o intense competi:1on, both l from domescic and foreign competitors and to sharp swings in demand. j Installation and Service Engineering work carried on by GE in both domestic and internacional markets includes principally on-site engineering support for the Company's products sold to electric utility, industrial, and marine customers. I s Technical Systems and Materials Technical Systems and Materials consists of jec engines for aircraft, j industrial and marine applications; electronic and other high-technology produe:s primarily for space applicacions and nacional defense; materials r (engineering plascies, silicones, industrial cutting materials, laminated and insulating materials, and batteries); medical and communications equipment; j and time sharing, computing, and remote data processing. [ t Strength in cachnological competence, excellence of design and efficiency I of production are among the key factors affecting competi: ion in these i products. Research and development expendi:ures, both government financed and j internally funded, are high in this Sector. t t f Tec Engines are used in military and commercial aircraf t and, to a growing extent, in naval ships and as industrial power sources. General l Electric's mill:ary engines are used in a wide vartecy of planes from helicopters to fighters, bombers and ::ansports. The C76 engine family f is the principal commercial jet engine used in the McDonnell Douglas l DC-10 and in the European Airbus A-300 and has been selec:ed by a number of sajor domestic and foreign al:11nes to power :he new Boeing 767 and f the Airbus A-310; it is also used to some extent in the Boeing 747. I General Electric also produces jet engines for sany types of execu:1ve i aircraft. Sales of replacement parts and services are an important F L1 t L

e i segment of the engine buciness. The worldwide competition in jet engines is incente and highly concentraced. Product development cycles are long l and product quality and efficiency are critical to success. Potential sales for any engine are limited by its technological lif acime, which may vary considerably depending upon the rate of advance in the state of the art, and by the limited number of potential customers. Aircraft engine orders tend to follow military and airline procurement cycles, although patterns for military and commercial engine procurements vary. General Elecric is jointly developing with SNECMA, a French manuf acturer, a new l engine designed for the medium size and range commercial aircraf t which are expected, to be the next important commercial engine market in the, 1980s, and for reengining certain existing standard body aircraf t. In J line with industry practice, sales of commercial jet aircraft engines involve long-term financing commitments to customers. A najority of :he aggregate dollar amount of GI's commitments is secured, though in a secondary position. j Aerospace electronic and high technology products include missile 1 launch, guidance and re-entry systems, earth orbiting satellites, radar and sonar systems, armament systems, aerospace instruments and aircraf t instrumentation and controls. Most sales of these products are to Sovernment agencies. t Materials (engineering

plastics, s111 cones, industrial cutting materials and, to a lesser extent, laminated and insulating materials),

p derived from General Electric technology, serve a diversified customer base in the United States and abroad. Most customers are original equipment manufacturers or custom fabricators. Market opportunicles for a many of these products are created by functional replacement which provides customers with an improved material at lower cost. The business is characterized by technological innovacion and heavy capital investment. Competition involves important emphasis on efficienc manufacturing process implementation and strong market and application development. Competitors include large, technically oriented suppliers of the same, as well as functionally equivalent, materials. 1 Medical and communications equipment includes (1) diagnostic imaging and patient monitoring equipment, including X-ray machines, sold to hospitals and medical facilities, and (ii) mobile radio and data communication equipment sold to governmental agencies and to a variety of I commercial customers. Technical innovation, high product performance, service and competi:1ve pricing are especially important for both types of equipment. l Time sharing, computing and remote data processing services are t offered through a worldwide network which gives customers access to service center computers from remote terminals. Competition comes from numerous domestic and international sources. I Natural Resources i Natural Resources, primarily Utah Internacional Inc. (Utah), includes the mining of coking coal, uranium, steam coal, iron ore, and copper. Other 12 a 4

smaller scale activi:1es include oil and natural gas production, ocean shipping (primarily in support of sining operations) and land acquisi:1on and development. Approx 1:acely 32% of 1979 revenues and 77* of nec earnings of this segment orig /.nated from outside the United Scaces. The principal source by far of Utah's revenues and earnings is coking coal which is sined in Australia. Uranium and steam coal are sined domescically while iron ore and copper are sined domescically and abroad. Virtually all mines are presencly operated by open pit or scrip sining machods, although a small crial underground sining operacion has been started near existing surface coking coal operacions in Queensland, Australia. In addition, Utah has large areas under explora: ion for various metals and non-seca111cs, including iron, coal, copper, and precious metals. Both Utah and its wholly owned non-consolidaced affiliate, Pachfinder Mines Corporacion, are exploring for uranium. Depending on the resources being sought, areas being explored include che 7ai ed q S tates, Canada, South America, Africa, the Southwesc Pacific, Aus:ralia, che Middle East and Europe. The extent to which any deposi:s discovered will be sined, if at all, depends upon economic feasibility, poli:1 cal consideracion3 and the development of sarkets. Coking coal is produced under long-term Special Coal Mining !. eases obcalned from the state of Queensland at five sines (31ackvacer, Goonyella, Peak Downs, Saraji and No rwich Park) located in Cencral Queensland, Australia. At December 31, 1979, Utah owned through an affiliate approximacely an 89% interese in the Blackwater nine and a 68%. interest in each of the other four sines. The Norwich Park sine came into produccion in November 1979. The new mine has an annual capacity of 4.3 million metric tons, bringing cocal annual produccion capaci:y of the Utah-operated sines to over 22 million sacric tons. By February 1980 approximacely two-thirds of Norwich Park's annual produccion capacity was contracted for under long-term sales arrangements. The remainder is being reserved for sales on the " spot" market and for greater flexibility in supplying products to new customers. Coking coal is sold primarily to Japanese steel producers and, to a lesser extene, European customers. Most of these sales are under contraces of varying lengths with a majority contain1ng escalation clauses that offer substancial protec: ion against future cose increases. All such sales contracts are payable in U.S. dollars. Spot sales are also made. Shipments from chese sines l totaled about 17.0 million mecric cons in 1979 (16.1 sillion in 1978). I Assured coking coal reserves in :he Queensland lease areas are j estimated to be approximately 295 million sacric tons (including both Utah and sinority interescs) recoverable by surface sining nachods, which for this calculacion require that the coal be located under less :han 200 i feet of overburden. " Assured" reserves include merchancable reserves which lie within 2,000 feet of a known seam seasurement. "Merchancable* coal is coal believed :o be of sufficient grade and :hickness so located I that it can be sined at a profit in subs:ancial quantities by judicious J sechods under normal condi:1ons of the industry. In addi: ion :o :hese 13

4 e i i assured reserves, it is estimated that there are coal deposits of approximately-2 billion recoverable metric cons of which about 70% would require mining by underground mining methods. The degree to which chose I . coal deposits will be mined depends in part upon the results of j feasibility studies and the receipt of additional auchorizations from the Queensland government to nine and export the coal produced. ] Uranium mining and milling are conducted at three sines located in Wyoming. In 1976 the existing operacions - were cransferred to a new company wholly-owned by Utah. This affiliate was established in the course of obtaining a U.S. Department of Justice Business Advisory Clearance Procedure letter in connection with the General Electric-Ucah merger. All common stock of this affiliate (Pathfinder Mines Corporacion) is held by independent vocing trustees until che year 2000. 1: Subsequent to December 20, 1976, financial results of the affiliate have j not been consolidaced with General Electric's, but General Electric l receives from legally available funds cumulative quarterly dividends in amounts equal to 85% of the affiliate's nec af ter-tax income for the previous quarter (without taking account of any deduction for exploration j. expense). See note 12 to the financial statements for further information concerning this uranium mining affiliace. Steam coal operations serve U.S. electric utilities. Utah's most l substantial steam coal interest is the Navajo aine located on the Navajo Indian reservation in New Mexico and held under a long-term lease with j the Navajo Tribe. The lease continues as long as substances are produced in paying quantities. The Navajo tribe is seeking to renegociate the j .. royalties provided for under this lease. See also " Legal Proceedings" on 1 page 27 on water rights litigation. The sine furnishes the entire fuel requirements of the 2,085-megawatt Pour Corners Power Planc owned by six utility companies under long-cerm supply contracts containing provisions f affording some protection against cost escalation. Also, Utah operates the nearby San Juan aine under contract with the owners to supply coal j for the San Juan Power Plant. In addition, a Utah-owntd mine near Craig, Colorado started operations during 1977 and shipments on long-carm conersets began in the latter part of 1978. Ac year-end 1979, Utah l International purchased certain Kentucky coal properties for S7 31111on l from Nacional Steel Corporation and signed an agreement to purchase additional coal properties held by Nacional in Kentucky and West Virginia 1. for $158 31111on. i j Iron ore sining operations include ownership of 49% of the vocing stock in Samarco Mineracao S.A. (Samarco), a Brazilian company involved 2 in a substantial project in 3razil to axeract iron ore from a aine in the country's interior and to transport it in slurry form by pipeline to a pelletizing plant and shipping carminal on the coast. The other i stockholder in Samarco is a 3razilian company, S.A. Mineracao da Trindade l ("Samitri"). Shipments in 1979 (che second full year of operations) were i substantially higher chan in 1978, resulting in a smaller loss. Timing ~ and strength of improvements in iron ore demand will affect the profitability of this project. The total investment in the Sa= arco project was $387 million ac year-end 1979, of which approximately 3219 14 1 5 mm

vich the balance being provided million was financed by long-term deb: through a combination of equity and subordinated shareholders loans. This lac:er portion includes an equi:7 investment by Utah of approximately $178 million. Of the long-term debe, 5213 ninion is Sami:ri. Other iron era jointly and severany guaranteed by Utah and properties include a wholly-owned mine near Cedar City,

Utah, a

j partially-owned mining operation at Mouac Goldsworthy in Australia and an iron sands mining interest in Tew Zealand. include the who uy-owned Copper mines in which Utah has an interest Island Copper mine in British Columbia which sells its output under two customers and the 25%-owned Cyprus long-term agreements with Japanese Pima mine near Tucson, Arirona. conducted by wheny owned Ladd Oil and nacural gas operations are Petroleum Corporation, pr1=arily in the U.S. and Canada. Mining operations require chat various governmental

licenses, authorizations and permics be obcained.

Periodic renewals of routine permi:s to be continued, be solicited and obcained if the mining operations arethe continuznce and renewal =ust involve leases, Many of Utah's mining operations condicious. In of which are subject :o the satisfaction by Utah of various to renegotiation of rents or many cases the renewal of leases is also subject royalties payable thereunder and mining operations frequently involve taxes on Utah has experienced significantly increased labor, production or severance. purchased energy costs during recent years in an of 1:s supplies, andThe application of escalation cleases in Utah's long-term sales agreements has in most cases substantially off set these cost increases. The operations. copper concentrates does not fall into a fixed price long-term J sale of as the price fluctuates depending upc.n London Metal Exchange copper or upon copper =etal prices being received by domescic smel:ers.

pattern, quotations, Most of the iron ore agreements do not contain escalation clauses.

l Utah's foreign operations and investments may also be affec:ed by economic and political conditions in the countries where they are located, including budgetary considerations, anti-inflation

programs, exchange controls, currency fluctuations, export regulations and laws and policies designed to reflect the interests of such councries, as well as by laws and policies of the United States affecting foreign trade and investment.

The policies of Australian Federal and state governmental authorities are of yor example, during 1978 the Australian particular importance in this regard. Federal government imposed an additional 5% =ax on the taxable incomes ofA nonresiuia companies, including Utah's affiliates operating in Australia. in 1979 was the Australian yederal Government's decision negative development to recain the coal export duty, a levy 1: previously was commit:ed to che Australian authori:1es have also sought :o eliminate. In recent years, increase the equi:7 ownership of Australian investors in mining operacions. Under a program implemented by the Australian Federal Governmene in 1977, Utah's interest in the new lTorvich Pa::k mine is 68% and its interest in he reduced :o 68% from 76: vi:5 the Goonyella, Peak Downs and Saraji mines was remaining interests held by Australian and Japanese investors. 13

Foreign Multi-Industry Operations Foreign Mul:1-Industry Operacions consist principally of foreign af filiates which sanuf acture a variety of products primarily for sale in their respective home =arkets. The largest of these affiliates is Canadian General Elec:ric Company Limited which had sales of $1,339 million in Canadian dollars in 1979. Other principal mul:1-industry manuf acturing operations are located in Brazil, Veneruela, Italy, Spain, and Mexico, with a number of smaller aff111 aces operating in other countries. None of these other principal j aff111 aces accounted for more than 10% of segment revenues. Through 1:s International Construction operations, the Company also provides management and technical expertise for large construccion projects such as transmission lines. Competition and market conditions vary with the produe:s and countries involved. Local government policies and economic conditions particularly rates of inflation, monetary flue:uacions, and balance of payment problems - can have significant effects on operacions of these affiliates. In addition to :he Foreign Multi-Industry Cperations reported as an 'ndustry segment above, General Electric derives substantial revenues and net earnings from other sources outside che Uni:ed States. Results of these operacions are included in the appropriate industry segments. These other sources of income from outside che U.S. include: (1) operations of nondiversified foreign affiliates, including the foreign operacions of Utah Internacional, Inc.; (2) exports of GE products and services from the U.S. to unaffiliated foreign cuscomers and :o GE affiliaces; and (3) :echnology licensing revenues from unaffiliated and affiliated foreign sources. A summary of total international operations for all segments for the last five years follows. Year ended December 31 1975 1976 1977 1978 1979 (Amounts in millions) Revenues $4,766.1 S5,567.1 $6,137.9 S7,013.7 $7,339.9 Nec earnings 312.1 444.9 413.3 486.3 525.5 l i 16

1 1 L l Geographic Seignents The following tables include certain data b7 3eographic seg::ent based on the location of the operations furnishing goods or services for the years 1976, 1977, 1978 and 1979. 8 Year andad W hae 31 1976 1977 1978 1979 ( a=r==*= in millions) l TOTAL REVENUES United States $12,878 9 $14,560.4 $16,443.1 $18,859.2 Far East including Australia 1,040.0 1,056.2 1,108.8 1,182.3 Other areas of the world 2,564.6 2,916.7 3,270.4 3,813.3 Elimination of intra-company cransactions (511.9) (624.4) (749.5) (875.S' Total $13,971.6 $17,908.9 S20,072.8 522,980.0 Intersegment sales United States S 274.5 S 340.3 3 362.6 S 166 9 Far East including Australia 132.3 204.0 241.8 279.5 Other areas of the world 105.1 80.1 145 1 129.e Elimination of intra-company transactions (511.9) (624.4) (749.5) (875.3 Total 3 S S S + i External sales and other incoine United States $12,604.4 $14,220.1 $16,080.5 S18,392.3 i Far East including Australia 907.7 852.2 867.0 903.3 other areas of the world 2,459.5 2.836.6 3,125.3 3,684.4 Total $15,971.6 517,908.9 S20,072.8 522,980.C i NET EARNUG3 United States S 633.2 846.3 S 960.6 $ 1,119.3 Far East including Australia 194.5 161.6 170.1 173.9 Other areas of the world 103.5 83.5 103.6 119.5 l Eli:nisation of intra-company transactions (0.6) (3.2) (4.6) (4.4 Total S 930.6 9 1,088.2 $ 1,229.7 3 1,608.5 l ASSETS (At December 31) United Star.as S 9,262.6 S10,491.5 S11,410.4 S12,693.:. Far East including Australia 792.7 871.2 888.5 842. :, Other areas of the world 2,069.0 2,414.8 2,326.8 3,207.: ) I11mination of intra-company transactions (74.6) (80.7) (89.7) (97.9 Total 12,049.7 513,o96.3 313,036.0 516, 6u-.. ; 1 I l I

Included in United States revenues were export sales (principally of high technology products such as aircraft engines and gas turbines) to unaffiliated J customers shown in the table below: mrt Selas fme the United States For the w erzied nn-her 31 1976 1977 1978 1979 (hounts in ew) Europe, Africa and the Middle 7.ast...... $ 1,179.7 $ 1,216.9 $ 1,661.9 S 1,581.3 yar East and Austra11a.................. 371.9 574.2 498.1 741.2 Other areas of the.cr1d................ 362.9 310.1 410.7 449.6 Tota 1.'....................... 3 1,914. 5 3 2,101.2 S 2,370.7 5 2,772.1 U.S. revenues also include royal:7 and licensing income from unaffiliated foreign customers. Orders Backlog General Electric's backlog of unfilled orders for manuf actured products at December 31, 1979 aggregated s20.6 billion, compared with $19.1 billion at December 31, 1978. In addition to the foregoing, Natural Resources had a cineral sales backlog, including uranium, which aggregated SS.6 billion at December 31, 1979, compared with $5.8 billion at the end of 1978. Products and services sold by General Electric have a wide range of order-to-shipment cycles. The table below shows, for each of the last two years, the presently scheduled percentage conversion of year-end backlogs into sales during subsequent years. At December 31, 1979 At December 31, 1978 Manufactured Manufactured Products and Mineral Products and Mineral _ Services Sales Services , Sales 1980........... 41% 20% 1979........... 41% 20% 1981........... 18 15 1980........... 16 15 1982........... 8 13 1981........... 9 12 1983........... 6 13 1982........... 7 11 1984........... 4 12 1983........... 5 11 1985 +........ 23 27 1984 +........ 22 31 1002 100 LOO % 1002 Power systems orders accounted for 312.1 billion of the manufactured products anc services backlog at December 31, 1979, compared with $11.9 billion at the previous year end. Of these amounts, the orders backlog for steam l turbine-generators was $3.9 billion at year-end 1979, of which $2.0 billion is scheduled for shipment after 1984. The comparable backlog for 1978 was 34.1 l l 18

l billion, of which $1.9 billion was scheduled for shipment af ter 1983. Also included in the power systems backlog at year-end 1979 were nuclear reactor, fuel assembly and planc services orders of 55.3 billion, of which 32.5 billion is scheduled for. shipmene af ter 1984 The comparable backlog for 1978 m $5.1 billion, of which S2.4 billion was scheduled for shipment af ter 1983. i The total unfilled orders backlog from unaffiliated customers for exports i from the U.S. was $4.6 billion at the,end of 1979 compared with $3.5 billion at the end of 1978.' f Orders constituting the Company's backlog may be deferred or canceled by ~ customers (subject in certain cases to cancellation penalties). Research and Development t Expenditurra for research and development were $1,440 million in 1979 ) compared with $1,270 million in 1978. Of these amounts, 3640 million in 1979 was company funded ($521 million in 1978), and 5800 million (3749 million in 1978) was funded by others, principally che U.S. government. In recent years, l on the average, between 12,000 and 13,000 scientists and engineers have been engaged in research. and development activi:1es with slightly under half of l them engaged primarily in company funded activities. Employee Relations During 1979 General Electric employed an average of 404,681 people, of whom approximately 71% were in the Uni:ed States. i Approximac'ely '110,000 manufacturing employees in the United States are i represenced for collective bargaining purposes by a cocal of around 325 different local collective bargaining groups. A large majority of such employees is represented by local unions which are affiliated with, and ] bargain in conjunction with, one or the other of two national unions, namely, l the International Union of Electrical, Radio and Machine Workers (12L-CIO) and the United Electrical, Radio and Machine Workers of America. During June and July of 1979 General Electric negociated three year contracts with almost all i i che United aces unions representing employees with which it deals. Most of these coe' s will terminate in June 1982 and the rest'will :erminate later in the sa < ear. Utah's principal operations are in Australia. Seventy-five percent of its Australian empicyees are represenced by the Combined Mining Unions. Utah has experienced intermic:ent work stoppages by these union employees.. The longest stoppage is recent years was for seven weeks in 1978. Utah's unioni:ed North American employees are covered by collective bargaining l agreements expiring at various cimes :hrough the year 1983. l Price and Wage Standards l General Electric has notified the President of 1:s incention to co-operate wi:h the program of voluntary price standards announced in the l i l fourth quarter of 1973. Administrative procedures have been put in place to implement compliance with :he program. In general, because of competitive and i i other factors anagement does not.believe that the program is likely c: have a sigm ficant negative impact on :he Company's overal business. j 19 l t h

j l Item 2. Sunussry of Operations GMBAT. ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES STATZMENT OF EARNI2iGS The following is a statement of earnings of General Electric Company and consolidated affiliates for the last five years. The amounts shown for the year 1975 vare rescated in 1976 to include the operating results of. Utah j i International Inc., which was acquired by General Electric on December 20, 1976 in a transaction accounted for as a pooling of interests. At the effective ti:ne of the acquisition, each issued and outstanding share of Utah common stock was deemed exchanged by operation of law for 1.3 shares of the Company's common stock for an aggregate of 41,002,034 shares. Year azied n.-her 31 1975 1976 1977 1978 1979 (Amounts in W114-) r.et sales b111ed........................... S14,105.1 S15,697.3 S17,518.6 S19,653.8 $22,460.6 Operatirig costs: Cost of goods sold..................... 10,209.8 11,048.3 12,287.7 13,915.1 15,990.7 Selling, general mi adminiscrative ec-penses............................... 2,238.2 2,634.9 3,010.8 3,204.4 3,715 9 Depr-dard=, d=. aimed =. and anortiza-t1on................................. 470.5 486.2 522.1 576.4 624.1 12,918.5 14.169.4 15,820.6 17,695.9 20.230.7 Operatirs cargin........................... 1,186.6 1,527.9 1,698.0 1,957.9 2,129.9 Other 4rm =............................... 174.2 274.3 390.3 419.0 519.4 Interest and other f* d=1 charges....... (186.8) (174.7) (199.5) (224.4) (258.6) Earnings bafore irm= taxas and dnority interest.................................. 1,174.0 1,627.5 1,888.8 2,152.5 2,390.7 Provision for inccma cases................. (459.8) (668.6) (773.1) (893.9) (953.4) Warity interest in earnings of emanif-dated mM414= =.......................... (25.7) (28.3) (27.5) (28.9) (28.5) Net earnings =14 rah 1= to comma stock.... S 688.5 930.6 3 1,088.2 S i,229.7 $ 1,408.8 Average runbar of shares outstanding (in tb = =ada)(a)............................. 224,262 225,791 227,L54 227,985 227,173 7.mnings per cannon share (in chilars) (a)(b).................................... S3.07 $4.12 S4.79 $5.39 $6.20 Dividends declared ;mr comen share of General Elect:2 stock actually outstand-ing cbring the period..................... S1.60 S1.70 $2.10 S2.50 $2.75 (a) Includes General Electric average shares outstanding plus, in 1976 and 1975, outstanding average shares previously reported by Utah nultiplied by 1.3. 20

~ - (b) Any dilution of earnings per share which would resuir from the potential exercise or conversion of such ite=s as stock options or convertible debt outstanding is insignificant (less than-1" in all periods shown). Fully diluted earnings per share for 1979 would be computed based on assumed conversion of the convertible indebtedness of General Electric Overseas Capital Corporation, a wholly ownsd affiliate of General Electric, exercise of stock options and issue of shares held under def erred incentive compensation plans. Net earnings for the computation would be adjusted to eliminate appropriate interest expense and expenses related to the deferred incentive compensation shares, not of taxes. On this basis, average shares outstanding in 1979 would have been 229,777,246, net earnings applicable to common stock would have been $1,412.5 minion and fully diluted earnings per share would haves been $6.15. [ GrwrnAt gLECTRIC MANAGEMENT'S DISCUSSION AND ANALYSIS i 0F STATEMENT OF EARNINGS l Revenues consisting of sales of products and services to customers and { other income from external sources, were $23.0 binion in 1979, S20.1 binion t in 1978 and S17.9 billion in 1977. 3ecause of the diversity of the Company's business, comments about the [ relative impact of physical volume and sening prices on year-to-year changes in sales can only be generalized. However, it is estimated that greater volume accounced for somewhat more than one-half of the increase of $2.8 i billion, or 14%, in 1979 sales from 1978. Sales for 1978 increased $2.1 billion (12") from 1977, and it is estimated that about two-thirds of the increase resulted from higher volume. i Other income from a variety of operating and nonoperating sources was i S519.4 million, or 24: more in 1979 than 1978. Principal 1979 increases were interest from marketable securities and bank deposits, primarily reflecting l higher interest rates (S88.4 million increase), interest from customer i financing resulting from both higher interest races and increased financing l ($21.7 million increase) and net earnings of General Electric Credit j Corporation ($12.6 minion increase) partially offset by lower income from associated companies and nonconsolidated uranium mining affiliate ($22.5 = inion decrease). From 1977 to 1978, other income increased $28.7 minion or l 7%. Principal 1978 increases were interest on marketable securities and bank j deposits, primarily reflecting higher interest rates ($52.2 sinion increase) l and net earnings of General Electric Credit Corporation ($10.1 minion increase) partially offset by lower income from associated companies and a nonconso11 dated uranium nining affiliate ($29.5 sinion decrease). l Principal elements of operating costs are summarized on the following l page for the years 1977-1979. I I i t ( i i i 21 l 1 I

Year ended December.'l 1977 1978 1979 (. Amounts in millions) Employee compensation, including benefita S 6,555.5 S 7,401.3 $ S,285.4 Materials, supplies, services and other costs 8,753.9 9,866.7 11,320.0 Depreciation, depletion and mortization _522.1 576.4 624.1 Taxes, except Social Security and those on income 239.0 250.6 259.1 Decrease (increase) in inventories during the year (249.9) (399.1) (157.9) j S15,820.6 317,695.9 520,330.7 1 Operating margin (sales less operating costs) was $2,129.9 sillion in 1979, $1,957.9 million in 1978 and $1,698.0 million in 1977. Despite good productivity gains, increased.nacecial and labor costs had some adverse tapact on the operating margin race, which was 9.5% in 1979 compared with 10.0% in 1978 and 9.7% in 1977. However, operating nar31n dollars in 1979 were $172.0 'tillion higher than in 1973, which were $259.9 million higher than in 1977. l Intsrest and other financial charges were 15% more in 1979 than 1978 due to higher interest races. The 1973 interest expense sas up 12% fro'n 1977, petncipally because of ine: tsed offshore borrowings and higher do:nestic interest rates. ?rovision for income taxes was $59.5 sillion higher in 1979 than 1978, although the etPective tax rate was lower (39.9% for 1979 compared with 41.5% for 1973 and 40.9% for 1977) primarily because of the lower U.S. federal tax races. tesults by Industry Segment The impact of macro-economic factors such as inflation, the energy crisis, and dif fering stages of growth among countries of the sorld, togethee with vigorous' actions by unagement to anticipate and adjust to such latpacts, has af f ected the industry segments of General Mectric's business in varying degries. Revenues and net earnings for each segment for the years 1975-1979 are included under " Industry Segments" on page 3. These amounts, together with the accompanying descriptive material on General Electric's business, should be reviewed in conjunction with the following commentary for a better understanding of the differing impacts on total General Electric results foe any particular year. Constseer Products and Services Consumer 'roducts and 9ervices' revenues in 1979 vere 12% ahead of 1973 with all major businesses contributing to the inp rovement, although the race of increase slackened some toward the end of 1979. Earnings were up W despita the continuing cost peice squeaco rasalting f ro.a e < t r e >t t cost inflation experienced throughout the year. "ajor appliances earnings in 1979 were. somewhat lower due to competitive pressures shile sales Laces 49ed. Air 22

1 l l ) hi her sales in 1979 despite markets conditioning produe:s reported somewhat 3 weakened by cool weather while earnings were off somewhat because of escalating costs. GE lightin3 businesses achieved anothee strond year of earnings 3rowth on good sales increases. Housewares.and audio products increased sales somewhat, but earnings sere lower because of inflationary cost pressures in this highly competitive indus:ry. Television receiver operations f achieved. good sales and earnings gains in 1979. 3roadcasting and cablevision reported earnings well ahead of the prior year on good sales increases. General Electric Credit Corporation earnings were 17% ahead of 1978 as higher income on an increased portfolio of receivables more than offset higher interest expense. Consumer ?roducts and services 1973 revenues and earnings, including GE Credit Corporation, vere up 15" and 17 "., respectively, from 1977 wi:h all tajor businesses contributing to the Lap ro venents. Lighting products sales and earnings were veil ahead of 1977, continuing the strong 3rowth of recent hi her sales :han in the previous year and years. v.ajor appliances had d although sar3 n rates were slightly lower as a result 1 earnings were also up, of the cost-price squeeze. Air condicioning sales increased substantially in 1978 and a sharp earnings bpeovemen esfiected ef f ective cost controls and favorable volume in both room air conditioners and heat pumps. Housewares and audio produe:s had good earnings 1.rreenge on higher 1973 salss. Talavision receivee operations showed strong 3ains in sales and earnings in 1973. I __. Increased _ earnings for broadcasting and cablevision operations ee!1ected the j favorable Lapact of higher advertisins eevenues. A 15 sain in Ceneral l Electric Credit Corporation earnings resulted from higher earned incoine on l receivables ;isreially offset by higher interest expense. t Industrial Products and Components t Industrial Produe:s and Componen:s revenues for 1979 were up 16" and earnings were up 22" with all major businesses in tha segment shartn3 in the 3rowthF ' Motor busLnesses reported good incresses in 1979 earnings and l somewhat higher sales. Contractor equipment operations had strons earnings j increases on higher sales. Continued hi3h levels of industrial and commercial l construction offset the decline in rasidential housins starts tn 1979. l Transportation systems businesses continued to 3 row and recorded sharply I higher earnings with locomotive operations in the lead. Industrial l _ electro 31cs_ operations had good earnings increases on somewhat higher sales. ? Apparatus service shops continued their profit growth and General 91actric Supply Company achieved another year of hproved results. Industrial ?rodue:s and Components revenues for 1978 were up 12 *. and earnings were up 17%. Businesses serving construction, locomotive, and appliance components markets were particularly strons. GE indu:s trial i equipment businesses improved sales and earnings as a resul: of high races for . housing starts and increased volume in commercial and industria1 construction. l herms j products had si3nificantly higher 1973 earnings on sales '*ompo ne n t Nr reflected the year's hi3h levels of spending for consumer durable s. l ~ ""' chat tesnspor:stion equipment the year's strong increases in aarnings sera ind by l locomotives. Apparatus sarvice shops :ontinued to show excellent earnings l 3rowth, even wi:h higher programmed expensas for capaci:7 expanston, ud ( Ceneral E.lsetric 3dpply Company di3tribucion services achieved another year of improved resul:s in line with a high level of constructim ac:Lvlt/. 23 { 1 1 ~~-

Power Systems Power Systems businesses earnings in 1979 vere 23': higher on a 2* sain in revenues. The increase in earnings for 1979 was the resul: of i=portant gains in product.ivi:y and : ore effec:1ve uc111 cation of working capi:a1 partially offset by the fact that selling price increases were not adequace :o cover ccit inflation. Steam curbine-generator operacions reported somewhat higher sale, and a strong rise in earnings resulting from produe:1vi:7 improvements and working capital improvement partially offset by selling prices on contracts taken several years ago at fixed prices that were not adequate to cover cost inflacion. Gas turbine operacions showed further improvement in earnings primarily on the strength of international sales. Nuclear systems businesses' losses were lower than in prior years, as GE sade further substancial expenditures on engineering and development in support of nuclear projects in :he backlog (see ~3usiness-Power Systecs'* for further coc=ents on the Company's nuclear business). Insta11acion and service engineering businesses achieved record earnings on good sales increases. Power delivery businesses reported icwer earings on slightly higher sales. Power systems businesses earnings in 1978 were 23% higher on an 8" revenue increase. Higher 1978 earnings were accounced for principal *.y by large s:eam turbine-generator and power delivery produe:s. Sales and earnings of steam turbine generators were ahead of the prior year. Earnings of sechanical drive curbines were again strong on somewhat higer sales. Gas turbine earings continued strong in 1978, as internacional de=and of f set low domescic sales. The nuclear systems business continued to operate at a loss in 1978. General Electric's power delivery businesses reported sales and earnings well ahead of 1977. Installation and service engineering businesses had higher sales and earnings in 1978. Technical Systems and Materials Technical Systems and Materials revenues and earnings for 1979 both increased 28% above their 1978 levels with all of :he segmenc's =ajor businesses contributing to

he year's strong gains.

Aircraft engine businesses produced good 1979 earnings increases on sharply higher sales while continuing a high level of egenditures for commercial engine development. Aerospace operations had substantial earnings gains that out paced the year's sales increase. Engineered =acerials had sharply higher earnings and sales. Medical systens, infornation services and communications businesses all achieved substantial earnings increases on higher sales. Technical syste=s and materials revenues and earnings were up 14% and 12*, respectively, in 1978, w1:h engineered =acerials reporting substancial17 higher results and edical systems, information services, and co==unicacions businesses also having significant increases. 3etter aircraft engine earnings ( from higher 1973 sales were partially offset by :he stepped-up level of j coc=ercial aircraf: engine development expendi:ures. Aerospace earnings, reflec:ing develop =en: expendi:ures, were down somewhat on a modest sales increase. 24

I Natural Resources Natural Resources. (primarily *Jeah International Inc.) 1979 revenues and earnings were 22% and 16 ". higher, respectively. A sharp improvement in earnings from Canadian copper operations was the major factor contributing to the earnings gain. Australian coking coal ac:ivities in 1979 achieved a modest earnings improvement on record shipments. Iron ore activities in Australia and New Zealand reported earnings gains and, although a loss was recorded, improvement was made by the Samarco project in Brazil. Steam coal mining operations showed an earnings gain. Oil and natural gas operations reported record revenues and earnings. Uranium operations recorded a small loss which reflected relatively low shipment' levels, increased costs, and the need to deliver concentrate under low price contracts entered into in the early 1970s and scheduled to be fulfilled by 1981. Natural resources revenues were 7% higher in 1978 than in 1977, but earnings were down 8%. Revenues were higher primarily because of the inclusion of revenues of Marcona Corporation, which was formerly 46%-owned by Utah and became a wholly-owned GE affiliate during 1973. Australian coking coal shipments were about the same as for 1977, despite generally poor world steel markets. Ecwever, coking coal earnings were lower, principally because of a siners' strike of nearly seven weeks and higher Australian taxes. Earnings in the form of dividends from nonconso11 dated uranium operations were down from 1977 because the 1978 average realized price for uranium oxide was substantially lower than the previous year. This price decline was due to long-term contract commitments which reduced the proportion of production capacity available for spot sales (usually higher priced) compared to 1977. Iron ore operations resulted in a loss for 1978. This was primarily due to the first full year of operations at the Samarco project in Brazil, start-up of which coincided with reduced demand for iron ore products worldwide. Canadian copper activities showed a significant turn-around from the loss experienced in 1977. Higher average price realization for copper and principal by-products, combined with good mining and milling races, accounced for the improved copper results. Oil and natural gas operations resulted in higher revenues and earnings in 1978 than 1977. Foreign Multi-industry Operations Foreign Multi-industry Operations earnings for 1979 were down 14% on revenues that were up 5%. Lower earnings were due in part to 1978's nonrecurring gain from sale of GI's interest in the German lamp manuf acturer, Osram GmbH. Canadian General Electric had strong sales and earnings improvements in 1979. Latin Amarican operations experienced generally slower sales growth and had lower earnings. Affiliates in Italy and Spain operated at a loss. In Australia and the Philippines, improved performance resulted from transferring GI consumer goods affiliates to f orm larger operations in exchange for minority ownership positions. In:ernational construe: ion operations achieved improved profi:abill y on about the same sales level. Foreign mul:1-industry operations earnings for 1978 were up 7% on 8% Latin higher revenues, led by international construe:1on operations and most 25 1

i American operations. Construction operacions maintained their rapid growth in sales and earnings. Latin American =anufacturing affiliates, overall, showed a strong performance with affiliates in Venezuela and Mexico reporting inproved results that were par lally offset by an off year in Brazil due to a decline in heavy goods manufacture. Canadian General Electric Company Ltd. i= proved i:s earnings despite a year of no sales growth resulting from the sluggishness of the Canadian economy.

danufacturing operations in Italy reported an increased loss in 1978. General Electric nanufacturing affiliates in Australia again encountered depressed :narxet conditions, while those in the Philippines were able to take advantage of strong market growth.

Earnings in 1978 also included a nonrecurring gain from sale of investment in an associated company. Item 3. Properties Manufacturing operations are carried on at approximately 224 sanufacturing plancs located in 34 states in the Uni:ed States and Puerto Rico and some 133 sanufacturing plancs located in 24 other countries. Principal sining properties controlled by Utah Internacional Inc. and its aff111 aces are situated at 5 locations in Australia, 6 locations in the United States and 1 locacion in Canada. Oil and natural gas produccion is carried on ac numerous sites in the United Staces and Canada (See "3usiness-Natural Resources *). Item 4. Parents and Subsidiaries Parents of Registrant - none. l Registrant - General Electric Company. Affiliates of Registrant included in Registranc's Financial Statements. General Electric's principal affiliates are listed below. .ul other aff111 aces, if considered in the aggregate as a single affiliate, would not constitute a significant affiliate. Petw e=p d j voting

• Mas Staca or oumed by the cauaery d

+= +t me, %+ : % ce paranc (1) erwt Utah Internacional Inc......................... 100.C0 N1 = re N=A4= General Electric Canpany Limited....... (2) Canada ?'==tm4m Canarale di Electricita S. p. A....... 79.% Italy Ceceral Ilectric Overseas capital Corperation... 1CO.00 New York General Electric International Sales Gxcany.... 100.00 N1 = re Genaml Ilectric Plastics 3.7................... 1C0.C0

• etherlands Ce:mral Elec::1c do 3razil S. A..................

1CO.00 3razil Affiliates not consolidated for which separate consolidated financial statements are incorporated herein by reference: Cena:a1 Ilectric Credit Corporacion (3)......... ICO.C0

'ew York 26

Affiliates not consolidated for which statements are not filed: 1 Separate financial statements of a nonconsolidated finance affiliate and ) its affiliace owned 100% by Canadian General Electric Company 1imited as well as chose for Pathfinder Mines Corporation, a wholly-owned uranium mining affiliate, have been omitted because, if considered in the aggregate as a single subsidiary, they would not constitute a significant subsidiary. NOTES (1) With respect to certain companies, shares in names of nominees and qualifying shares in names of directors are included in above percentages. J (2) General Electric Company owns 57.20% and General Electric Overseas Capital Corporation owns 34.72%. (3) Consolidated statements of the General Electric Credit Corporation include twenty-one unnamed affiliates which, if considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary. Itu 5. I,esal Proceedings In May 1972 the United States Depar: ment of Justice filed a civil antitrust suit against General Electric in the United Saces District Court for the Northern District of New York. This suit claims that General Electric has used unlawful reciprocal purchasing arrangements since at least 1965, and seeks an injunction and related relief against continuation. Trial of the matter commenced on March ~23, 1977, and af ter the close of the Government's case on April 1, 1977 General Electric moved to dismiss for failure of proof. The court has not yet ruled on that motion. Regardless of the outcome of the suic, it does not appear that it will have any sacerially adverse consequences for General Electric. On October 15, 1976 a complaint was filed in the United Scaces District Court for the Northern District of Illinois by Westinghouse Electric Corporation against Utah International Inc. and numerous other producers of uranium, both foreign and domestic. The complaint alleges that, in violation of the Sherman Antitrust and Wilson Tariff Acts, the defendants, commencing in 1972, conspired to fix and increase the prices of uraniwa in foreign and domestic commerce, allocated the markets for and curtailed the supply of uranium and refused to sell uranium to certain purchasers, including Westinghouse. The complaint seeks injunctive relief agains t further J i violations of the antitrust laws, an injunction requiring producers to sell l uranium to Westinghouse at prices previously in effect and treble alleged. damages. This case continues in the discovery stage and management believes that it can be successfully defended. To11owing a fire on May 28, 1977 in the 3everly Hills Supper Club, i Southgate, Kentucky, a number of actions were commenced in the Circuit Court of Campbell County, Kentucky, and in the U.S. District Court in the Eastern District of Kentucky on behalf of individuals who were injured, or the legal representatives for the decadents who were killed in the fire, against the 27 1 l l l

1 owners of the club, the architects, the general contractor, nu=erous suppliers of components and furnishings, and many others. These multiple actions have been consolidated for pretrial purposes and are known in both Courts as "In re 3everly Hills Fire. Litigation." The damages sought to be recovered in the various actions range from S12 million to over $ 2 billion. General Electric appears as a defendant in some of the cases as a manuf acturer of insulation for electric wiring. In addition, in April 1978 the plaintiffs amended their complaints in order to add all manufacturers of aluminum building wire and wiring devices manuf actured for use with such wire. General Electric was named as a defendant in five of the consolidated cases because it manufactures wiring devices. Trial was commenced in late 1979 against these manufacturers of aluminum building wire and wiring devices on the issue whether the fire was caused by an outlet box to which -aluminum wire was connected. In February 1980 a jury returned a verdict for the defendent manufacturers on this issue. At this stage of the litigation the Company, believes it can successfully defend the remaining actions. In the Company's Form 10-Q for the quarter ended June 30, 1979 reference is made to a number of actions for damages commenced by the legal representatives of decedents killed in the crash of an American Airlines DC-10 near Chicago, Illinois on May 25, 1979. These actions have been filed against American Airlines, McDonnell Douglas, the builder of the airplane, against General Electric, the engine manufacturer, and against other suppliers of components. All but three of the cases in which General Electric was named as a defendant were removed to Federal Court and thereaf ter consolidated in the Federal District Court for the Northern District of Illinois. General Electric Company filed motions to dismiss in the consolidated proceeding and the pendency of these motions resulted in the voluntary discontinuance by the plaintiffs of all the Federal court actions against General Electric. Three cases in the State Court of California which are not subject to removal to the Tederal Court remain pending. As noted in the Company's Form 10-Q report, there has been no indication whatsoever from any of the investigations of the causes of this crash that General Electric wrs at fault. ) I In January 1980 the. Company was served with a complaint filed in the Supreme Court of the State of New York by Solargen Electronics, Ltd. and Solargen Electric Motor Car Corp. seeking judgment in the amount of approximately St.6 billion for claimed compensatory and punitive damages for alleged breach of warrancy, conspiracy, fraud and deceit in connection with the furnishing of electrical control systems and motors to convert conventional automobiles to electric cars. The Company believes it has no liability in this matter. On March 13,19/6 the Actorney General of New Mexico filed suit in state court in San Juan County naming the United States, on behalf of itself and certain Indian Wards, Utah International and others as def endants. The suit seeks a determination of the relative rights of federally established reserves such as national forests and Indian reservations and all other public and private interests in the stream system which furnishes water for use by Utah in connection with the operation of its Navajo steam coal mines and for the opration of the Four Corners power plant. Utah holds its water rights in the scream system for its own benefit and for the benefit of existing and 28

potential customers who would develop industrial facilicias adjacent to Utah's Navajo mine. De Company believes that, because of the complexicy of :his litigation, a substantial number of years vill elapse before :hore is a final determination on :he merics, and tha outcome cannot now be predicted. An accion was commenced on September 27, 1977 in :he Superior Cour: for the State of Connecticut by two individuals and the "Housaconic River" alleging General Electric Company has discharged PC3s into the Housatonic River in violation of the law of the State of Connecticuc. The plaintiffs, on behalf of themselves, and purportedly on behalf of a class of persons " comprised of all the people of the State of Connecticut" sought the following relief: (i) declaratory judgment decernining whether General Electric has i unreasonably polluted or impaired the waters and other natural resources in the State; (ii) an injunction restraining General Elec:ric from further violations of the scacutes; (iii) a mandacory injunction directing General Electric to restore the Eousatonic River to the condicion chat exisced before j General Electric's alleged actions; (iv) compensacory damages to che plaintiffs in an unspecified amount; and (v) civil penal:1es as provided under the statutes. The Company removed the action to che Federal District Court in Connecticut and thereafter moved to dismiss the complaint for failure to stace a cause of action. na Court dismissed all of the counts in the complaint except for two counts based on the Connecticue Environmental ?rocac:1on Act and the Connec:1 cut Inland Wetlands and *iacer Courses Act. The Court remanded those vo counts to che Staca Court since :he Connecticut Supreme Court had never ruled explicitly on the issue of standing on the part of any ci:izen to sue under the two statuces. A motion to dismiss by General Electric asserting

hat plaintiffs lack standing to sua has been argued is, but has not yet been decided by, the State Court.

On June 26, 1979 two other individuals filed suit in the Supreme Court for the State of Connecticut alleging that General Electric Company had discharged PC3s into che Housaconic River and had thereby caused pollution. The original plaintiffs in this action alleged that : hey were owners of real property abuccing on a lake which is an impoundment of the Housaconic River. The complaint, seeking injunctive relief and damages, sought to have che accion designaced as a class accion. The Company removed Gis action to the Federal District Court in Connecticut. Thereafter, in Cccober 1979 the plaintiffs amended their complaint to include four counts based on alleged nuisance, crespass, violations of so-called Federal common law, and violations of a Connecticut scacute relating to depositing materials in rivers of_:he state. In the same month a number of additional parties were granted leave c: intervene as plaintiffs in the proceeding. In November 1979 the plainci!!s requested the court to certify the case as a class action on behalf of all owners of real property adjacent to and abutting upon :he Housaconic Mver, including its impoundments, between Pittsfield, Massachusetts, where the Company has.a plant facility, and Long Island Sound. In February 1980 a hearing was held w1:h respect to class certification and the Court has the i matter under consideration. While 1: is not possible ac this :ine to express j as opinion as to che outcome of this case or the case reported in the prior paragraph, ic would not appear : hat either case involves a significant risk of a nacerial financial impact on the Company. 29 [ 1

On October 24, 1977 the Nuclear Regulacory Commission issued an order to show cause which directed Ceneral Electric to close down a test nuclear reactor licensed for many years for opera:1on at Company facili:1es near Pleasancon,. California. De order was based on alleged poten:tal risks ) associace'd with claimed seismic cond1:fons in the vicini:y of the ranc:or site. De Advisory Commi::ee on Reactor Safeguards _is evaluating geolo31c 'and seismic data and is expected to make a recommendation by mid-1980. I: is anticipated that, at the request of third party intervenors, there will be a hearing on this matter. On August 1, 1978 the Federal Environmental Protection Agency issued a notice of violation and an order to show cause relating to discharges of chromium and cyanide by a General Electric subsidiary in the Commonweal:h of Puerto Rico. Following receipt of that notice of violation and order there were several meetings with EPA officials and wi:h officials of the-Environmental Quality Board of Puerto Rico. De Company's subsidiary filed required data with respect to corrective - action taken and is awai:ing the issuance of appropriate amended discharge permi:3. As reported in the Company's Form 10-Q for che quarter ended September 30, 1979, the Company was served on August 6, 1979 w1:h a citacion by the Circuit Court, Cook County, Illinois relating to smoke emissions from a Company plant in Cook County. Following a probationary period established by

he court, a finding of not guilty was entered on February 13, 1980.

In a letter dated November 29, 1979 the California Department of Health informed the Company that analysis of soil samples collected at a Company facility in Oakland, California disclosed PC3 contamination and directed the Company to take correceive action. na Company submi:ced a problem definition plan to the State on February 14, 1980, which will be followed by an appropriate plan for corrective action. In November 1979 the Company was advised by the New York State Department of Environmental Conservacion that the Company had constructed an air contamination source at. one of its plants in the state without first obtaining a permit or provisional permic. On December 6,1979 che Company and :he. New York State De.partment entered i::o a consent order which imposed a $3,000 penalty on the Company for the violation alleged. On January 21, 1980 the Metropolitan Sanitary District of Greater Chicago issued a notice of violation to the Company claiming :hac the Company was in violation of applicable ordinances and state pollution statutes because of :he alleged discharge of effluents with excessive concentrations of sine, chrome, lead and mercury. no Company and the representatives of the Sani:ary District held a conciliation meeting on February 3, 1980 wherein it was agreed that the Company would determine the cause of these excessive concentrations and submit a plan for compliance by May 6, 1980. j General Electric's license for the storage of spent nuclear fuel at i:s Morris, Illinois f acility expired August 31, 1979. Applicacion foe renewal of j the license has been filed and public hearings will be held before an A:omic I 30

Safety and I.icensing Board sometime in 1980. A number of parties, including the Attort.4y General for the State of Illinois, have intervened to oppose renewal of the license. In November 1975 the United States Invironmental Protection Agency, Region IV, issued a notice of violation and order requiring General Electric to comply with the provisions of its permit regulating the ?C3 content of waste water discharge from the Company's Apparatus Service Shop in Chambles, Georgia. The order also required General Electric to show cause why the matter should not be forwarded to the U.S. Attorney for further action. General Electric Company met on a number of occasions with the staffs of the U.S. Environmental Protection Agency and the Georgia Environmental Protection Division to review the many corrective actions at the Service Shop. Compliance monitoring by the two government agencies to assess the effectiveness of these corrective actions continued for several years. The Company considers the natter resolved. With respect to any of those proceedings as to which no opinion is expressed above, it is the view of management that such proceeding vill not have a material effect on the financial position of the Company. l Itse 6. Increases and Decreases in outstanding Securities and Indebtedness (a) Increase and decreases in equity securities during 1979: Shares Shness bald Sbscus Issumi by r w per,y w5 Ccuson stock, ;mr alue $2.30 per share '4=1== at Decunbar 31,1978......... 231,463,949 (3,427,717) 22S,036,232 Changes at urious dates & ring 1979: Shares issued: Employee savings plans: 2,482,288 2,482,288 Savings and Security Progran... 9,338 9,358 Savings and Stock 3 cms Plan... 213,051 213,C51 Egloyee Stock Ownership Plan..... 152,048 152,048 fme=nr4ve plans...... 1C0,687 1CO,687 Stock option plans................ Purchases: Pancquired at current merket prices purment to pew isions of espicyee plans other than (855,933) (855,933) stock opcion p1sns.............. Pancquired through regular

ansactices in the securities (2.299,4CO)

(2,299,400)

arket..........................

Mai - = at narsmrer 31,1979............ 231,463,949 (3,e25,418) 227,838,331 Item 7. Changes in Securities and Changes in Security for Registered Securities None Item 8. Defaults upon Senior Securities None l 31

Item 9. Approximate Ntnaber of Equity Security Holders Number of record holders as of Title of Class December 6, 1979 Common stock, par value S2.50 per share......... 527,586 Item 10. Submission of Matters to a Voce of Security Holders None. Item 11. Indemnification of Directors and Officers ARTICLE XI of General Electric Company's 37-Laws provides as follows: " Directors and officers of the Company shall be indemnified to the fullest extent now or hereaf ter permitted by law in connection with any actual or threatened action or proceedings (including civil, criminal, administrative or investigative proceedings) arising out of their service to the Company or to another organization at the Company's request. Persons who are not directors or officers of the Company may be sisilarly indemnified in respect of such service to the excent authori:ed at any time by the Board of Directors. The provisions of this Article shall 5. applicable to actions or proceedings commenced af ter the adoption hereof, and to persons who have ceased to be directors, officers or employees and shall inure to the benefit of their heirs, executors and administrators". The subject of indemnification of directors and officers is governed by sections 721-727 of the New York Business Corporation Law. General Electric has directors' and officers' liability insurance. 1 Lloyd's London and International Insurance Company are the principal underwriters. General Electric also has fiduciary liability insurance, underwritten by National Union Fire Insurance Company and other underwriters, covering fiduciaries of General Electric's employee benefit plans. The directors' and officers' liability insurance covers directors, officers, division general managers of General Electric, the president of General Electric Credit Corporation, and several other General Electric managers. The fiduciary liability insurance covers, among others, directors, officers and employees of General Electric who say be fiduciaries of any of -- General Electric's employee benefit plans. 32

zme:ucive neen ars of the =-4-~=-- n Data ===d Mese ?rwiHnn g ; resent==iH = 1 i ?aginald L Joces......... @mi-=n d de 3 card and Q1ef Encutive Officar 62 Deceber 1972 John F. 'h1dr....... 71ca Omim=n of de Board and Executiw Officer 57 Cetober 1979 Edw rd E 9ood, Jr......... Vice Chai m=n of the acord and E mcutim Cfficer 49 Cetober 1979 John F. 'Jelch, Jr......... 71cm Omi-n=n of the Board and 7 -tedvs Officer 44 Cetober 1979 Ardur E 3ueche.......... Senior vice Pr==idene-Corporate Technology 59 Septancer 1978 Oecial J. Fits............ Senior 71ca Presidsmt-Corporate F1-4 :q and % = Ln = =ne 53 Cetober 1979 Robert 3. Er=........... Senior 71ca Presidane-Car';crata ?Wd=- and Ca=*=+E Ser rices 62 % = har 1977 I.aonard C. Maier, Jr...... Senior Vice Fr==idanr-Corporate ?=1'ed== 55

• a - a=" 1977 r

Witer A. Schlotterbecx... Senior 71ce Presidane, General Srnam1 ani Smhy 53 % = h=" 1977 2x: mas 0. ":hsrsen......... Senior ? ice Presidact-Firacca 48 Novaber 1979 Janes A. 3ekar............ Executive Viza President and Sector Escutive 52 Cetober 1979 ?cbert R. Fredarick....... Descutive 71ce President and Secter Dancutive 54 Cecobar 1979 ?.at:nen R. 24 "............ Tvamedve Vice President and Sector Incutive 61

• e enbar 1979 Christopher T. Tastner.... Locative vice Pramidane and Sector Emcutive 54 cctober 1979 Paal 'J. Van Orden.........

Dancutive Vice President and Sector Executive 32 Cetober 1979 Janes J. Costello......... Vice Praaidane and Comptroller 50 lbvenbar 1979 Pussell E. Wit::ryer....... Vica Pr==idane and Treasurer 64 July 1973 All of ficers are elected by the Board of Directors for an inicial ters which continues until the first Board seecing fo110 wing the next annual scacutory neecing of share owners and thereafter are elected for one-year terms or until their successors have been elected. All officers have been executives of General Electric Company for the last five years. Item 12. Finane4=1 Statements and Exhibits Filed (a) Financial Statements (1) Applicable to General Electric Company and Consolidated Affiliates i ~ Page(s) Statement of Earnings for the years ended December 31, 1979 and 1978.......................................................... ?-1* Statement of Financial Position at Oecember 31, 1979 and 1978... F-2* Statement of Changes in Financial Position for the years ended December 31, 1979 and 1978.................................... ?-3* Statement of Changes in Share Cuners' Equity for the years ended Oecember 31, 1979 and 1978.................................... F-4* i 33 i e

1 I (a) Ph hi Stat==ence (cont'd.) l t (1) (cont'd.) Page(s) Other financial information: Summary of significant accouncing policies.................... F-5* No t es to fi na nc 4 s1 s tat ements................................. F-6 through F-11* Industry segment information.................................. F-12* F-13* Geographic segment information................................ l Additional Financial Information.............................. F F-16 Supplementary information-effect of changing prices (nnamHead). F F-19* j l l

• The financial statements for General Electric Company and consolidated l

-affiliates appear on pages 32 through 44 of the General Electric Investor - l 1979 Annual Report to share owners and are incorporated into this annual { report (Form 10-K) as pages F-1 through F-13 Supplementary inf ormation - l effect of changing prices (unaudiced) appears on pages 23-30 of the General i Electric Investor 1979 Annual Report to share owners and is incorporated into j this annual report (Form 10K) as pages F-17-F-L9. With the exception of the l aforementioned information no other data appearing in the 1979 Annual Report to share owners is deemed to be filed as part of this annual report (Form i ~" 10-K). Ihe additional financial information on pages F-li through F-16 and I the following schedules should be read in conjunction with the financial f statements in the 1979 Annual Report to share owners. l l The schedules listed in Reg. 210.5-04, except those shown below, have been omitted because they are not applicable or the required inf ormation is shown in the financial seacements or notes thereto. II Amounts Receivable from Underwriters, Promoters, Di-rectors, Officers, Employees, and Principal Holders (other than Affiliates) of Equity Securities of the Person and Its Aff111ates.......................... F-20 III Investments in, Equity in Earnings of, and Dividends received from Other Persons........................ F-21 V Property, Plant and Equipment........................ F-22 VI Accumulated Depreciation, Depletion and Amortization of Property, Plant and hulpment................... F-23 XII Valuation and Qualifying Accounts and Reserves....... F-24 (2) Applicable to General Electric Credit Corporation Consolidated Salance Sheet at December 31, ;979 and 1978 Consolidated Statement of Current and Retained Earnings for the years ended December 31, L979 and 1978 Consolidated Statement of Changes in Financial Position for the years ended December 31, L979 and 1978 Notes to Financial Statements Report of Independent Certified Public Accountants 34 l l_

• he financial sta:esents of General Electric Credi: Corporation are included in che annual report (Form 10-K) for 1979 filed with the Securities and Exchange Commission by General Elec:ric Credic Corporation and are hereby incorporated in and nada a part of this annual report (Form 10-K) by re!erence.

The' financial scacements of the registrant are omi::ed because the registrant is primarily an operating company and all affiliates included in the consolidated financial statements being filed, in the aggregate, do not have sinority equity interest and/or indebtedness to any person other than the registrant or its consolidated affiliates in amounts which cosecher exceed SE of the total assets as shown by the most recent year-end statement of financial position. (b) Exhibits Annual Report on Form 11-K, General Electric Savings and Security Program (Exhibic 1). Accountant's consent in connection with sacarial referenced in Exhibic 1 (Exhibi: 2). Amendments to General Electric Supplementary Pension Plan (Exhibt: 3) PART II Part II is omitted from this report since a defini:ive proxy stacament was filed vich :he Securicles and Exchange Commission pursuant to regulation 14A on March 6, 1980. SIGNATURE Pursuant to the requirements of Section 13 of the Securities and Exchange Act of 1934, the registrant has duly caused this annual report to be signed on its behal.f by the undersigned, thereunto duly authorized. General Electric Company (Registrant) B y.. /.s,/,,,J,am,e,s,,J,.,,C,o,s t e,1,1,o,,,,,,,,,,,,,,,,,,,,,,,,,,,,, James J. Costello-Vice President and Comptroller Date: March 26,1980 l l 35

l l REPORT OF DIDEPENDCIT CERTIFIED PUBLIC ACCOUNTANTS i 'The Board of Directors General Electric Company: We have examined the financial scacements, the other financial information, and the related schedules of General Electric Company and consolidated affiliates as listed in the index on pages 33 and 34. Our examinations were made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the aforementioned financial statements present fairly the financial position of General Electric Company and consolidated affiliates at December 31, 1979 and 1973, and the results of their operations and the changes in their financial position for the years then ended, in conformity ~ with Senerally accepted accounting principles applied on a consistent basis; and the other financial information and supporting schedules, in our opinion, present fairly the information set forth therein. ? EAT, MARWICK, MITC' DELL & CO. New York, N.Y. February 15, 1980 i I ou 36

a Statement of earnings Genera flec=c cemeany anc c:escucatec aretiates Nr me years onceo Cecemeer 31 On miitiens: 1979 1978 Sales Sales of precuc:s anc ser/ ices to customers (note 1) $22.460.6 $19.653.3 opersong Ccst of gocca sold 15,990.7 13.915.1' Seiling, general and acministrative excense 3.715.9 3,204.4 Cecrec:ation, cecletion and amertizacen $24.1 575.4 20.330.7 17.595.9 Coerating costs (notes 2 and 3) Ccerating margin 2.129.9 1.957.9 Ctnerincome (note 4) 519.4 419.0 j interest and etner financial enarges (ncte 5) (258.51 (224.4) j Earnings Earnings befcre inceme taxes and minenty interest 2.390.7 2.152.5 Prevision forincome taxes (ncte 6) (953.4) (893.9) Minenty interest in earnings of consciidated affiliates (22.51 (23.9) Net earntngs acclicacle to common stcex $ 1.4C8.3 5 1.229.7 i Earnings per common snare (in de lars) (note 7) 56.20 55.39 Olvidends deciated per common snare (in dellars) $2.75 $2.50 Ocorating margin as a percentage of sales 9.5% 10.0% Not earnings as a cercentage of sales 6.3% 6.3% l The information en pages F5-F13 is an integral pare of this s:stamanc. i i F ..+ r;.n~ %=, r. F-1 l l l

Statement of financial position General Esc:nc Corncany anc censow.ates arfiliatee at cocen cer 31 fin rmilens 197*9 1973 Assets Casn (ncte 5) 5 1,904.3 5 1.992.3 Marxetacle secunties (ncte 5) 572.3 470.3 Current receivactes (ncte 9) 3.546.5 3.258.5 Inventenes (ncts 10) 3.161.3 3.C03.4 Current assets 9.384.5 a.755.0 Pmeerty, plant and equicment (ncte 11) 9,365.2 8,328.2 Accumulated cocrocaten, ceclecen and amortizatten (ncte 11) (4.752.4) (4.305.5) 4,512.3 4,022.5 Inve:tments (ncts 121 1.591.5 1,410.5 Cther assets (ncts 13) 955.7 547.3 Total assets $10.544.5 515.036.3 Uamittias Shcrt term cctrewings (ncte 14) S 571.0 5 960.3 ano soustY Acccunts cayacte 1,476.7 1,21 7.2 Pmgress celleccons and enes aclustments accrued 1,9.8.,7.0 1.,567.3 Cividends cayacte 158.3 147.5 Taxes accrued 555.5 532.5 Cther cests and excenses accruec (ncte 15) 1.752.7 1.550.2 Current flactilt!es 5.371.s 5.175.2 Leng term correwings (ncts 16) 946.3 933.3 Ctherllacilities 1.311.9 i.129.5 Tctaillacilltfes 9.130.5 S.298.5 Minentyinterestin equity of ccnselicated affilistes 151.7 150.3 Preferred stocx ($1 par value: 2.CCO,000 snares authenzed; none issued) Ccmmen stecx ($2.50 car value: 251,500,000 shares autncnzed: 231,463,949 snares issued 1979 and 1973) 573.7 573.7 Amounts received for stcck in excess of par value 556.3 558.0 Retained earnings 5.307.5 5.522.4 7,542.5 5,759.1 Cocuct ecmmen stccx heldin treasury Neo.31 (172.4) Tctai snare cwners' equity (nctes 17 anc 18) 7 262.3 5.566.7 Tctaillacilities anc ecuity $16.544.5 515.036.0 Commitments anc centingent llacilities (ncte 19) The in:or=acion on pages F5-FU ts an tacegral part o: cais scacement. F.2

~. a Statement of changes in financial position 3eners Ese:ne cc.m=any anc e:nsciicatec arfuiares t i

er re years enese cecern=er at un muiicns:

1979 1973 j Source et Pmm ccerancns Not earnings 51,408.3 S1.229.7 funos ' ass earnings retainec ey ncnccnselicatec l finance affiliates (16.3) (15.7) l Cecreciation, cooletion anc amorczation $24.1 576.4 income tax'Jming differences (37.2) 31.9 Minenty interest in earnings cf ecnselicatec aff!!!ates 28.5 29.9 2.007.4 1.551.2 l Increases in long-term correwings 49.7 95.5 2.5 Newly issued ccmmen stecx Cisocsation of treasury snares 147.5 189.3 l Increase in current;:ayacles ciner nan snerMarm i correwings 735.3 570.0 22.3 l Cecrease in investments Ctner-not 147.3 17s.3 i 7ctaisource of funcs 3.137.3 2.908.2 l Assiimecon Adcitlens to precerty, :: tant anc ecutement 1.262.3

1. 35.1 e

of haies Civicends cactated on commen stecx 623.5 569.3 Increase in investments 281.0 l Recuction in long term correwings 96.7 386.0 t Purenase of treasury snares 155.4 195.7 Increase in current receivactes 358.1 305.3 increase in inventones i57.9 399.1 7ctal application of funcs 2.935.0 2.911.s i l Not onenge Not enange in caan, marxetacle secunties f and snort. term correwings S 202.8 (3.3) { r i Analysis of increase in casn anc marxatacio secunties S 113.5 5 184.9 l notonenge Cecrease (increase)in snort term corrowings 89.3 (188.2) j $ 202.8 5 (3.3) i The inicrmacion on pages F5-Fl3.1s, an integral parc of cnis scacemenc. i l i I l F-3 ~.. 1

Statement of changes in share owners' equity senwas iDecme comenny anc :=nsoncatec amnaces

t re wars encee ceewnew 31 1979 1973 1979 1973 an mnnensi neusanes et sneresi S 573.7 3 578.5 231,464 231.410 Carnmen Salanca January 1 stocx issued New snares issued:

54 0.2 Empicyee savings clans Salance Cecamcer31 578.7 578.7 231.484 231.A64 Amounts Salancs January 1 658.0 568.4

g,,

sxc.ss ev.c car aue cv ameunts rec.ived rer 2.4 exe e newiy issued snares =ar value Less en cisccarten cf treasury stecx (1.7) (1 2.51 Salanca Cecemcor31 556.3 558.3 r1 stained Salanca January 1 3.522.4 4,862.5 Net earnings 1,408.3 1.229.7 Cividencs coctared en ecmmen stecx (623.5) (569.3) Salanca Cecamcer 31 5.307.5 5.522. A common Salance January 1 (172.4) (166.5) (3.423) (3.249'; stoex gn Purenases (155.4) (195.71 (3.155) (3.338: C!socsstiens: Em:lcyee savings etans 124.1 116.1 2.432 2.223 213 Emcicyee Stecx Cwnersnte Plan 10.6 Incanttve ecmcensation clans 7.3 S.O 152 147 Stecx cctens and accrecracen ngnts 5.0 7.0 tot 134 1.155 58.7 Susiness acquistttens Estanes Cecemcor 31 (180.31 (1 72.4) '3.525) < 3.42 e ' 7ctal snare owners' eculty Cecamcer 31 $7.362.3 $8.588.7 227.339 229.036 The informacion on pages F5-F13 is an integral part of chts scacement, e F4

Summaryof si nificant

• • • Y" are ne funea Cunene sace ests ane am crtfzatien of :nct service costs over a pence of 20 years accounting pol ieS are beng enargee to ccerating ex enses currentry, investment tax credit The investment tax :redt is ree:r:ec :y tne ": ster al memce" anc is amernrec as a recucten of me revisten Basis of consolidation for taxes over tne !ives of tne facilities to wnien :ne crecit The financal statements 00nsclicate tne ac cunts cf de acclies, ratner man :eing "flowec mtcugn to ine:me :n parent General Eectnc Comcany and tncse of all major-the year me asset is accuirec.

ity cwned and centrclied ccmcanies ("aff!Ilated ccmca. nies"), excoct finance ccmcantes wncse acerations are Inventories not similarto mese of the censolicated greuc. All signifi-Sucstannally all manufactunng inventories Iccated in me cant items relating to transacnons among tne parem and U.S. are valued on a tast4n first-out. er L!PO. basis. Mest { afRilated cornpanies are eliminated from me consolicated manufac:unng inventories outside me U.S. are generally ) statemems. valued on a first4n first-out, or RFC, basis. Valuations are ] The nonconsolidated f! nance ecmeanies are included based en me ecst of material, drect f acer and manufac. in me statement of financal cosition uncer investments tunng evemead, anc ce net exceed not realizacie values. { anc are valued at equrty cius acvances. In acdtlen. =m-Certam inctrect manufac:unng excenses ari enargec d-panies in wnien GE anc/cr its conscticated aMillates own rectty to cceradng ecsts cunng me conce incurrec. ratner ; 20% to 50% of me votng steck ("associatec Ocmcanies") man comg inventened. l are incuced uncer investments, valued at me accrognate Mining inventenes, wnien ine:uce ennccally minec l snare of scuity clus acvances. Afteraax earnmgs cf non-cre and ccal. metal cencontrates and mining succlies, are l censollcated finance ccmcanies anc assoc:stec ccmca-stated at the icwor of average ccst er marxet. The cost cf nies are inciudad in the statement of earnings under etner mtning inventenes inc:uces Octn drect anc incirect 00sts { income. consisdng oflaccr :urcnasec succiles and services, anc ; A ncnconsoiicatec uranium mming ecmcany (see decrocatien. ecletten and amortzaden of:recerty, cian note 12) is also inc:ucac under investments anc is valued and ecutemertt, at lower of cost er equity, sius acvancas, j Property, plant and equipment Sales Manufac:urmg plant anc ecuicment inctuces the enginal The Ccmcany and its consolidated afMllates recerc a cost of land cullcings anc ecuicment less cecrecation. l transacdon as a sale only wnen title to crocuc:s ;: asses to wnien is me estimated ecst censumed my wear anc ccso- ) me customer er wnen services are cerformec in accord-lescence. An accelerated cecrocanon metacc. =asec I ance with contractterms, pnncically en a sum-of me years cigrts formula. is usec te l recore coorecation cf the engrnal ecst cf manufacturing { Vacation expense plant and ocuicment urenased and instatlec in tne U.S. Most emcicyees earn crecits curing me current year for sucsecuent to 1960. Accuisitions ;:nce to 1961. and most i vacanons to be taken in me followmg year. The excense manufactunng plant and ecuicment !ccatec outstco the .for this llacility is accrued dunng the year vacatons are U.S.. are cecreciated on a straigntaine casts. If manufac. { earned ramer than in the year vacations are taxen, tunng piartt and equicment is suciect to acncrmal ecc. nomic Ocncitions cr ocsciescence, accitional cecrecatic: I Pensions is crovided. Expencitures for maintenance Md recairs cf l Investments of me General Electne Pension Trust, whien manufacturing piant anc equipment are enargad to coera-l funds me coligations of the General Electric Pension tions as incurred, j Plan, are camed at amortized ecst plus cr:grammec ao-The cost of mining crecerties inc:uces initial excenc! precation in the commen stock :crtfolic. Pecognition of tures and 00st Of malcr recuilding ;r lects wnich sucstan-l programmed accrocation is camed cut en a systematic tf ally increase the usefullives of exisung assets. The ecst ) easts wnicn coes net give uncue weignt to snertaerm of mining crecerties is cecree atec. cecietec cr ameni:st j marxet flue:uacons. Programmed accrocation will not be ever me usefullives of me rei, ed assets :y use of unit c: l recegnizoc if average ccck value exceecs average mar- =reducten straigntaine er deuining catance metnces. I kat value, calculated en a mov:ng basis ever a murtlyear Minmg excleratien costs are ex:ensec until tt :s ce-

pened, terminec inat the coveicoment of a mineral cecesit is i

The funcing Oregram for the Pension ?'an uses 6% as !ikeiy t: :e scenemically feastete. After mis ceterminatier l tne estimatec rate of future Trust inceme. This rate in-is mace, all c:sts related to fur-Mer cavetcement. inctu:- c:uces systematic rec 0gnition of accreciatten in the ecm-ing financmg ::sts of icentiflacia new =crrowmgs asscc:. men stocx =crtfolic, atec witn me cavetcement of new mtning crejects, are Untuncoc cnor service llacilities of tne P'an are amcr-ca:italizec. Amert:stien cf sucn cesis Oegms u en 00m-tizac ever 20 years. Net actuanal gains and !csses are mencement Of Orccuction anc is ever ten years cr me amert:sc cver 15 years. Orecucuve !if e of tne crecerty, wnienever is less. Cests of a secarate. succlementary :ensien : tan. On-Cil anc gas recerties are acecuntec for:y use cf t.~ manly affectng !cng servtco crofessicnal anc managenal full cost metnca. F-5 ~

l Notes to financial statements "c" ** C****r 3' 1575 8"$ 5 SM '$c*c$v*Y "$* mated marxet value cf Trust assets at me end of 1979 wa: 34.968 meillen and 54.202 millien at me enc cf 1973. It is estmatec mat amencments to me Pensien F'an effeceve 'anuary 1,1980, will resuitin increases of 590 millicn in tne d'an's unfuncec liacilities. nanc:al statements of me densicn Trust accear

1. Sales cetow:

Accroximateiy ene-signtn of sales were to agene:es of tne 'J.S. government. vnien is me Ccmcany's largest singie Genersi Eectric pension Trust custcmer. Tne enne: cal scurce of mese sales was tne an w,m 1979 1973 Tecnnical Systems and Matenals segment of me Com-coarsang statement pany's business. Total assets at January 1 54 323.9 53.3187 Ccmcany contneudens 340.7 316.5

2. Operating costs Emesoyee centneucons 94 3 33.3 Coersang costs cy maict excertse categenes are snown ce owt 435.c 399 3 no,,,,,,,,,

3g79 1973 Civicenes. ;nterest ano suncry inecme 294 3 234 : Emcicyte ccmcens30cn. :ricucmg ,p",-

enefits S 3.235.4 3 7.401.3 Realized 21.t Matenata, succiles, servicas anc m ec C

c m er ccess 11.320.0 9.566;7 Totas cregrammec 38.2 793

1. 2ci l Cecrocanon. ecionen anc Pensions cata

'224.3) ameruzancn $24.1 576.4 Tctas assets at Cecamcer 31 3432t3 54 32s.- ~ Taxes. excoct Socal Secunty and mese on mcome 259.1 250.6 Mnancsal poestion-Cecemcor31 Incrosseinimentertes curm9 U.S. govemrnent cetiganons anc .ne year f157.9) (399.1) guarantees 3 133.0 $ 103.5 3g $17 395.3 Cercerate concs aric nctes $47.0 056.2 mes estate anc mortgages 319.0 7~0.0 Succiemental cetals are as feilowet Ccmmen stecxs and ccnver :cies 2.974 4 2.'91 I '4IU*' 01 ' ' - ig79 975 Casn and socMenn imestants 3y 2$ Mantenance and recars $774.6 5671.3 0**'****'**~"" 0 Ccmeany lundec researon and \\ coveecoment 540.0 $20.9 Tctal asses gjjbj he $ccalSecunty taxes 471.3 397.0 Funced llacilittest acvertistng 2S1.9 247.4 Uacility te consioners 31.374.5 31.338..~ Mont 221.3 198.0 Uacility for :ensicns to Mineralrcysties and execrt cunee $1.3 78.3

arte: cants not yet reuroc

• 3.c47 3 2.69c.3 Total funced ilacilltfee 54.921.5 54 329..

Persign currency transtaden gains, after reccgnizmg re-latec inecme tax effects and minenty interest snare. were Ccsts of tne sect. rate succtementary cension clan were $11.3 miillon in 1979 anc $12.1 million in 1978. 539.1 million in 1979 and 535.3 millien in 1978. Unamcr. tized ccats for this succlementary plan were 3267 miiller

3. Employee seriefits anc $243 million at Cecemcor 31. t 979 anc 1973.

General Electrte and its affiliates have a numcer of cen-rescocdvely, sien plans. me total Comcany cost of wnien was $412.9 Utan has secarate cension clans wnicn are sucstan-millien in 1979 and $381.4 million in 1978. The most sig-tially fuity funced and the ccats of wnien are inciucec in nificant of these etans is the Genertl Electnc Pension me total Comcany costs recorted acove. P!an,in wMich sudstantially all emCicyees in me U.S. are Incentive ccmpensation clans were car *!cicated in : particicating. Incividuals receiving senefits under the over 4.000 key emcicyees. Amcunts inciuced in ccsts ar l Pension P!an !ctalec 75,700 anc 72.100 at Cecemcer 31. excenses forincentive ecmcensation were $36.0 million 1979 and 1978, rescecuvety, and cellgatens of the P8an in 1979 and 547.3 millien in 1978, are funced througn me GE Pension Trust. Earnings cf the Trust. inciucing me cregrammec rec-egnition of accreciation, as a cercentage of tecx value cf me certfolic, were 3.4% fcr 1979 anc 7.3% for 1973. Unfuncoc llacilities of the Fensten P!an were esti-matec to ee 3815 millien at Cecamcor 31.1979. Ocmcarec wita 3639 millicn at tne end of 1973, me increase resuiting snmanly frem amendments to the dension P!an wnien were effectve in 1979. Unfundec vestec liaciilties in-c:uced in these amcunts wers $7C6 millicn anc $334 mil-7-6

s 3

4. Otherincome affect of timing citterences en U.S fecereiincome taxes nn misene 1g73 1g73 Not sammgs et GE C.*ecit Corcoranen 3 $9.3 3 77.3 08 md'ensi

' SU ,9 income frcm: Tax over cecx cocrocaticn S 22.7 3 25.3 Marxetaole secunties anc tank cecosts 223.3 140.4 Unciamemec earmngs of Wates Custcmerfinancmg 70.3 44.s anc assocatec cnmcames (2.1) 34 Royalty anc tecnmcal agreements 49.7 44.3 Margm en instadment sales t9.3) N.* Assocated ccmcames anc non. P'evison forwarrant es (36.1) f 31 ' conscticatec urutium mimng affiliate 11.2 33.7 _ !.T Ctner-not (5.9) Cinerinvestmema: ~ Irtterest 20.5 18.8 M$d M. Olvicenes 10.3 10.5 The cumulative not effect of timing cifferences nas re-Cmersunaryitems ' 38.2 48.6 suited in a deferred tax asset wnten is Snown uncer cther 3819.4 $419.o

'

=- assets. Cther sundry itema inctuce gains frem sales of marMet-Reconomadon from simutory to e#ective ' ' acte equity secunties of $8.5 million in 1978. income tax rues 3979 3 gg ~~5. lriterest aridother financial charges U.S. tecers statutcry nste 46.0 % aar Amourtts acoiicacle to enec: pal items of long-term cor-Recucconin taxes resumng frem: towings were 397.5 million in 1979 and 598.0 million in varying tax rates of conscticated

1978, affiliates (Incrucittg CISC)

(3.3) f3.4- ~- ' ' ~ ' " inctumen of sammgs cf tne S. Provieson forincome taxes C.ecit Cornoranen in coversaax on n e nsi ig79 1373-income on an atteraax cams (1.7) (1.T investment creert (1.3) (1.1 U.S. ! scars mcome taxes: (0.5: ~F. somat' ail amount cayacte $598.9 5590.4 !ncome tax at caertal gains rate ~ Cmer-nm 0.2 14

• Dec:of timing cifferences (31.31 (13.5)

Irivestmemmecit ceterroc -not 45.4 24.9 Hecuve tax rate g% d' 413.0 801.5 4regnirkome taxes:

7. Earnings per common share Esamstec amount cayante 323.2' 221.!

carnings per snare are based on me average numcer of Effect et timmg cifferences (5.9) 45.4 snares outstanding. Any dilution wnien woulo result frem 3173 266.5 the Cotenttal exere:se or conversion of suen items as stcc. EEpnrEcWiy state andIces ~ ~ ~ " " " - " ' cptions er convertible coot cutstancing is insignificant income ta*W E 25.6 (less than 1*e in 1979 and 1978). j $853.4 5893.9 ammune mummme All U.S. f ederal inecme tax returns nave coen c:osed

8. Cash and marketable securttles mrougn 1971.

Time ceocasts and cer*:ficates of ceccst aggregatec Provimon nas coen mace for federalinecme taxes to be St.575.1 million at Decemcor 31,1979, anc S1,746.3 mil-r paid on mat portion of the undistneuted earnings of afflil. lion at Cecemcor 31,1978. Decosits restncted as to atos and associated comcanies excocted to se remitted usage anc witherawal or used as cartial ecmcensaton fe to the parent comcany. Undistnbuted earnings intended to short term corrowing arrangemerts were not matenal. be reinvested indefinitely in affiliates and associated com. Marketacle secuntfes (none of wnich are equity secun. i panies totaled $944 million at me end of 1979 and $415 ties) are carried at the lower of amortized cost or market milflon at me end of 1978. value. Carrying value was sucstantially tne same as mar. Changes in asumated foreign inecme taxes payacte kat value at year-end 1979 anc 1973. Inctuced at year ere anc.n me effect of timing differences result enneically 1979 were U.S. treasury cotigations of $470.3 million i from increased foreign earnings and tax rates, and from ($393.7 mWien in 1973h [ recognizmg in 1979 for tax cayment curcosas the results of transaccens in Australla recerced for financ:al recorting

9. Current receivaoles purpcses in etner conocs.

on m,mensi :ee si 1979 tg;; Inver.tment credit amounted to $75,9 millien in 1979. Custcmers acccunts anc nctes 53.254 5 12.322.: I I coth.:aroc with $50.7 mtilien in me ener year. In 1979, Assoaatec ccmcames 35.5 27.1 $30.3 million was acced to not earnings. ccmcated witn Noncensclicatec affiliates 6.3 2.1 $25.3 millicn in 1978. At me end of 1979, me amount still Ctner 40s.7 4: 4 l ceferred and to ce inctuced in not earnings in future years 3.736.c 3.367 Less ancwance for tcsses IssA) tm i l was $2C6.7 million. M I.2dEd i F-7 l i L

10. InventSries Condensed consclidated financial statements for me namm no : m si 1979 1973 en cc C N a on @ eon M calncncn-Aaw matenals anc worxin recess 31.343.5 31.3C2.3 scHeated Snance affiliate) are snown tetow. Mere cetatiec Amsnee geoes 365.7 343.0 intermation is avallacia in General Elecmc Crecit Uncilled stucments 252.1 258.1 Cct:Oraticn's 1979 Annual Aecer1. ccetes et wmen may S3.1 sF3 53.0c3.2

.e c tainec :y wnting t:: General Elecme Crecit Ccr:cra-4 cut 30% cf t:talinventenes are in me Unitec States. t: n. P.C. Sex 3300. Stamicrc. Ccnnecticut 06504 If me.:iFC metnce cf inventory acecunung nac coen used t:y me Com any,inventenes would have coen 3enersi slectric Crecit Corocration 31.349.it millien nigner man recerted at Cecemcor 31, Ansnc:a4 postion 1979 (51,519.0 million htqner man rescrted at Cecameer on

m.,31 1979 1978 31.1978).

Casn anc marxetacie securmes 3 373.3 3 367.5 Receivacies:

11. Pecperty, plant and equipment ilme sales and Icans 7.480.3 5.052.7 nn m,e n.

ig79 t973 Ceferrec inecme I1.124.11 (843.9) 5.356.2 5.208.3 Mast classee at Cecerncer31: Investment in leases 1.207.1 1.231.4 1 Manufac:urmg :tartt anc ecuicmem Lanc and imcrevements 3 124.7 5 123.3 Suncry receivacies 140.5 73.1 Tctai recetvacies 7.703.3 5.313.5 Sulleings. struc ures anc reistec ecutcrnent 2.098.5 1,383.3 Aucwance ter tesses (231 2) '199.3) Macntnery and scuicment 3.214.2

4. 37.3 Net receivacies 7 472.7 6.119.3 Leasencic costs anc manufac.

Ctner assets 321.3 171.9 turing ; tam uncer construe::en 371.3 22.4 Tctat assets 58.167 3 g Mineral creceny, : tant and Netes cayacte. ecutement 1.456.0 1 251.3 Oue witmn ene year $3.321.0 S2.953.0 59 365.2 38.329.2 L ng. term -semer 1,743.3 1.571.1 Cast at Jartuary 1 58.328.2 57.514.5 1 uccidnatec 324.3 325.3 l'EI2'.U I'

• "8 Ctner Hactiities

$31.3 513.7 '225 3) I241 4) visccsttlens Tctaiilacilities 5.520.1 5.353.3 cat at Cecomed g;jgg;2, y,gjjAid Ceferrsc inceme taxes 71 8.0 $15.7 Accumulated cecreciation, decledon Ceferrec investment tax crecit 13.3 3.* and amortization Caertal stecx 566.4 443.7 Salance at January 1 54.305.6 $3.930.4 Accitional maidan cacrtal 11.5 11.5 Current. year revison $24.1 578.4 Aetamec eammgs 238.5 221.3 Ciscesrttens (188.2) (191.1) Ecutty 915.4 675.5 Ctner:nartges 10.9 I10.1) Tctalliacilities. :sterred tax Salance at Cecemcor 31 g 54 305.5 items anc ecuity 58.157 3 $8.!!8.7 N my, plant and equipment less depreciat}on, depletion and Currertt anc retained earttings amortization at Decemoer 31 S46123 .S4 022.6 .nn m.m.n. s,w 1979 1978 m-se -mim Eamec inceme 51 102.4 5 313.5 Excenses:

12. Investments interest and cisecurtt 523.2 336.7 on men.nei c m.ws1 1979 1978 Coersting and acmmistranve 395.6 315.1 Noncensoncatec finance affiliates

$ S24.0 5 483.g Prevision for losses -rece<vactes 39.4 56.4 Noncenseticated uramum mimng -ctner assets (1.3) 8.0 affiliate 157.5 96.7 P'evision ferincome taxes 21.1 20.1 Misco ianeous investments (at ecst): 1 012.5 ~3 6.3 Govemment and govemment. Not earnings 39.9 ""'. 3 guaran:eec secunttes 233.1 241.4 Less civicenes (72.7) (61.3) Ciner 147 3 '19.1 9etainec eamings at January 1 221.3 205.3 380.5 36c.5 Aetainec earmngs at Cecameer 31 3 238.5 5 221 3 Marxetacie ecuiry secunttes 44 0 37 4 Asscc:stec cemearues 301 3 3571 investment in tne acncensencatec uranium minmq Less ailowanes ter ' esses (15.9) " 4 3) afflitate consists cf :nvestment m a unctly :wnec affiliate $1 591.5 31 410.5 iestactisnec in tne course cf 00talning a U.S. Ce artment Of Justice Busmess Acviscry Clearancs :*0cecure Latter in connecnen wim tne 1376 Utan merger) to wnien all of me meri existing uranium Ousiness Of Utan nas been i transferrec. All c0mmen stecx Of mis affiliate nas :een taced in a voting trust 00ntretled ty ncecencent voting trustees. Pnce to me year 2000, General Elecmc anc its F-3

affiliates may nctwithcraw the c mmen stecx fr0m 20 Shobterm b rrowinga on m e,e., 3, 1979 1979 I vctirig trust excect for sale to unaffiliatec mirc cartes. ans. I Cirec:cra and efficers of me affiliate may net :s cirecters. q. cfficers. cr emcicyees cf Generai Eactnc. Utan er Of any %a# -%':'l i %n, of meir affiliates. Uranium may not :e scic Oy mis affiliate. =trent nctes witn :n.:st

ecartrrents

$239.7 2.!2% 3:02.4 ' O.24' in any state er ferm. :. or at me cirecten ef. General Eectn er:ts arfiliates. Ccnseticatec arttilate All cutstancing snaras cf Oreferrec stecx Of me ura-

4:x =cerewmss 289.4 27 10

~ 82. 4 20.5m. nium affiliate are retamed :y Utan as an affiliate cf Omer..ncscnq current General Eocmc. Payment cf cumulauve cuar eny civi-Q*hC"9d*'* 33

gg,3 Edo"3 concs cut cf legally availacte funcs en mis :ref errec stex sar o is mancatcry in amcurtts ecual tc SS% cf me arfiliate's c t Pstent terrcwings are frcm U.S. scurces. Scrt: wings cf attentax income for me crevicus cuarter (witncut tak1r0 senttint of any cecuc:!cn for excieration excense as co-

nscticated aff!!iated ccmcanies are nmaniy frcm fer-flee. Utart, as ncicer Of the preferred stecx, must maxe sign scurces. Current ;crtien of lengderm ccrrewings fer

! cans wim up to ten-year matunties wrten recuested by me 1973 inc:uces General Eectnc 5%% Cecentures (S125.0 arflitate, althcugn me aggregate amount cf sucn ! cans miillon) reured in July 1979 and Utan 7%% Guaranteec need nct at any tme excitec craferrec cfvicand :ayments Nctes (520.0 miition) retirec rn Maren 1979. Cmer :criew-fer me immeciately recscing twc calencar years. ings incuce amcurtts frem r encenseticarea arfiliates cf The esumatec reali:. acte value cf miscsilanecus $54.3 millien in 1979 t$55.4 mtillen in 1973). investments was 5050 millicn at Cecamcer 31,1979 and Althcugn me tctal unusec crecit avajiacre tc me Ccm-

any mrcugn canxs anc c mmerc

al crecit marxets !s nct 1973.

Marxetacie eculty securtties are valuec at me Icwer reacity cuanuff acte..ntermal crecit :Ines in excess er 51 cf c=st ermarxet. Aggregate marxatvalue cf marxetact* ttillen'nac teen extencac by accrex: mate;y 100 U.S. eculty secunties was 5181 miillen anc 5173 million at

anks atyear enc.

year enc 1979 anc 1978. rescoc vely. At Cecamcer31,

15. Ctner costs anc ex=enses accruec 1979. gress unrealizsc gams en marxetacte eculty secun-The catance at me enc of 1979 inctucac ccmcensacon (fes were $137mrillon.

Investments in ncncenscticated aff!!lates anc assoc:- anc :enefit c sts ac:rueo Of $640.3 millien anc :nterest ated ccmcanies incuced acvances cf 5122.5 mtilien at excense accruec cf $35.2 mtitlen. At me enc Of f $73. Cecem er 31,1979 (551.0 millicn at Cecemcer 31.1973). =cmcensation anc tenetit ::sts accruec were 5572.3 milllen anc interest excense accruec was $35.2 mtilien.

13. Cther assets 1979 1978 16 l.cng term borrowings onenemanse _._ u Sinmag funo 5:07.2 3246.S on,,,un,

t,.cng-term receivtcies Ou arocacwe 144.8 123.7 Cutstanorg Ceferrec enarges Peccveracle eq'neennq cests en 1 21.4 98.3 General 51ectnc Comcany: Custemw1tnanceg 106.7 10t.7 5%% Nctes 5 68.3 $ 75.3 1991 197240 Sevemment ceraracts Cetened inecme taxse 96.0 75.3 5.30% Cecentures 80.5 100.9 1992 1973 41 Real estate covetecreent =reiec:s 80.3 79.0 7%% Cecentures 149.3 156.5 1996 197*45 Lconses and emer tntangeles -not $2.2 40.9 8%% Cecentures 29 5.0 300.0 20c4 1985-03 44.6 35.3 Utan InternamenalInc.: Notes wim anxs 4.9 22.7 1981 197341 Ctner g g 8% Guaranteed Sinking Nnc Cecentures 16.S 17.3 1967 197747 Ucenses and otherirrtangibles accuired afterCctccer 7.5% Notes 22.0 36.0 1988 19744 8 1970 are being amorti:ed over appregnate penecs of time. 24.3 25.2 Cmer Genwal Eectnc Overseas

14. Short term bortcwings Cacitas Cor:cramen:

~he average catance of sncrt term Ocrrewings, exc:ucing v4% acncs 23.9 ,5.9 1985 isreda 5 me current creen cf Icng term :crtcwings. was S7C5.2 30 EO ' 8 8 ', "C" millien cunng 1979 (estcutatec by averag:ng all mentn-(h* sna :aianess f:r me year) ::mearea witn an average cal

• Ceilar Guaranteec Loan Stecx 7.3 74 1993 Nc: e ance of 5714.3 millien in 1973. The maximum :alance Otrer 37.4 37 3 ine:ucec in mese calculattens was 3725.3 millien and t55.7 137 4

$747.5 mitiicn at me enc cf Mar:n 1979 and August 1973. Al etner .534 a ss933 rescoc vety. Tne average effectve interest rate fer tne year 1979 was 17.5% anc for 1973 was 14.3%. ~hese The amcunts snewn accve are after :ecucten et me f acs average rates recresent total sncrt term interest excense value of secunties netcin treasury as snewn 1:cve ngnt. civiced cy me average calance cutstancing. A summary cf sncrt term :cerewings anc me ac::ticaele interest rates is snewn acove at ngnt. F-9

q i Pese vesue of long term borrowings in treasury srtares at Decemcer 31,1979 and 1978. respectively. ese snaMs am nW Mmm cmcrate mcuimmems. on meene c meer31 1979 1978 inc:ucing dismcuttens uncer emoloyee savings plans, in-3 gg,g ve cm enia e awatcs am cesse envmimy ' 5.3c% Cecentures $49.5 339.1 en c eas ac@ Mcraum cmem-i 7W% Cecentures 2g.0 29.0 cie incoctocness. Tne maximum numcer cf snaris re-4W% Cecentures 5.0 cuime for ecmerstens was 737.725 at Cecerncer 31. J General E!ectne Cverseas Cacital 1979 anc 1978. Corecrate requirements of snares for ) Corecration: cenefit clans anc ccnverstens may be met eitner frcm 4%y. 8cnes 7.1 5.0 unissued snares cr frcm snares in treasury. General Eocmc 5.30% Cecentures naving a face value of Retainec earnings at year enc 1979 inciuced accrcx- $10.0 million in 1979 anc 1978, and a reaccured cost of imately $248.2 millicn ($232.4 million at Cecemcer 31, $7.8 million in 1979 and $7.5 million in 1978, and General 1978) recrosenung me excess of earnings of noncensoli-l Esctnc 7%% Cecomures having a face value of $7.3 mil-cated aff!!!ates over cividenes received since theirforma-l lion in 1979 and 1978, and a reaccuired cost of $7.0 mil. tion. In accition, retained earnings have coen reduced by lion in 1979 and 58.8 milllen in 1978, were recred in ac. S4.6 million (54.0 miiiicn at Cecemcor 31,1978), wnica cordance with sinking fund provisions. General Eoctne recrosems tne enange in equity in asacciated ecmcanies. 5%% Notes naving a face value of 58.2 million (58.3 mil-since accuisitten. lien in 1978) were retired in accercance with precayment previsiona,

18. Stock cetion clans and performatice units Utan internattertal Inc. notes with canks are cayacle The clan accrevec cy me snare cwners in 1975, and cro-in varying installments to 1981 and were sucject to aver-vicus etarts uncer wnicn cetions remain cutstancing, pro-age interest rates at year-end 1979 and 1978 cf 7.9% anc vice certunuing incentfves for more inan 600 emcicyees.

8.4%. resoecovely. Octon pnce uncermese clans is me full marxet value of Sorrowmga of Generai Eocmc Cverseas Cacital Cer-GE ccmmen stecx en cate of grant. Emcicyees can enty scraton are unconditionally guaranteoc ey General Eoc. exerese cer: ens to me extent matinstallments nave ma-tne as to cayment of prine: cal, premium if any, anc inter-turec. normally annually, ever a genoc cf ' cur years uncer est. This Corcoration onmanly assists in financng capital

ne 1975 cian anc nine years uncer pner cians.

recuirements of foreign ecmcanies in wnien General The 1973 clan creviced, anc me 1973 clan crevices. l Eocmc nas an equty interest, as weil as financng certain fer granting stecx accrocaticn ngnts to ncicers of ecuens ~ custcmer purenases. um:er present anc cast clans, wnsen ::ermit mem to sur-Borrowings include 4%% Guarameec Cecentures rencee exeresacte cctions or a pcrtien cf an opuen in l cue in 1987, wnicn are convertible until June 15,1987, exchange for an amourtt equal to the excess of tne marxet i into General Eocmc common stock at $80.75 a snare. price of me commen stecx en me care the rignt is exer. and 5%% Stening/ Collar Guaranteoc Lean Stock cue in = sed ever me cetien ence. The Management Deveico-1993 in the amount of E3.6 million (57.9 million), convert 9 ment and Cemeensauen Ccmmmee (Ccmmmeet cf me { ble into GE common stock at $73.50 a snare. Cunng 1979 Scare of Cirmcrs cetermines wnether mis amcunt will te and 1978. General Eocmc Overseas Cacital Cerceranen cistnbuted in GE snares, caan or totn. } 4%% Guaranteed Scnds having a face value of $1.9 mil. The 1973 plan previces fcr granting performance l lion and a reaccuired ccst of S1.5 million were retired in units as a means of awarcing incentive remuneration to l accorcance with sinking 'und previsions. plan carticicants in lieu of options and stoex accrocation j All etner Icngderm corrowittgs were largely cy foreign ngnts. Performance units are granted for award penocs and real estate devoicpment aff!Ilates with vanous interest not exceectng five calendar years, with an achievatte j. rates anc matuntion. value fixed by me Committee at me cate of grant wnten Lortg term borrowing manarttles curing the next five coes not exceed 90% of the fair marxet value of GE ccm-l years, including me portion classified as current, are mon stock on mat date.The Committee aise sets enncical j $124.9 million in 1980,582.5 million in 1981,548.3 million and minimum targets to ce achieved anc cetermines tne j in 1982,331.2 million in 1983, and SA5.5 million in 1984. value actually assigned to performance units at me enc cf l These amounts are after deducting reaccuired cecen-me awarc conce in relaticn to the cegree to wnten the i ' tures neid in treasury for sinking fund requirements. Annapal target has been acnieved. Failure to acnieve me l mentmum target rencers the perferntance unit valusiess, i

17. Share owners' equity Even if the targets are acnievec. cerformance units will i

Commen stccx held in treasury at Cecemcer 31,1979, eniy to paic wnen, if, and to me extent me Ccmmmee i inctuced 1,735,656 snares for me ceterred ecmcensation cetermines to maxe cayment. No cerformance units nave I previsions of incentive ecmcensation plans (1.529,911 teen paid to cate. snares at Cecomeer 31,1973). 7hese snares are carnec At me end of 1979 more were 3,584.472 snares at marxet value at me time et allotr ent, wnten amcunted availacle for me 1973 clan and 2.905.912 snares coverec to 5G7.5 million anc $80.0 million at Cr aemcer 31,1979 cy outstancing ecuens grantec uncer ener clans for a l and 1978, resoectvety. The liacidty is recerced uncer total of 5,590.384 snares. Cf tnis total amcunt. 1,997,734 l ctner flacilities. Ctner ccmmon stoctt in treasury, wnten is snarss were suelect to exere:sacle ccuens. 2.751,194 carned at cest, aggregated 1,339,752 and 1,797.306 snares were uncer ecuens net yet exeresacle, anc l ? 10 .~ ~u

l 1 l t.331,456 snares were availacte fer granting cctiens 'n the future. Accreciation ngnts reiating tc unexcired . cet!cns for 1,957.303 anc 1,552.494 snares were cut-stancing at Cecamcer 31,1979 and 1973, rescectivety. Performanca units witn an average est-unit maximum acnievacle value of $29.01 relating en a ene-to-one basis to unexcired cctions for 1,339,304 snares werc cut-standing at Decemcor 31,1979. The numcor of snares available for granting options at the end of 1978 was 2.708,577. A summary of stock eptlen transactions dunng thelasttwo yearsis secwn ceicw: Awareas nersnere Stock opdons snares suose canon me ocanon wee wee Basance at.:an.1,1978 3.38a.333 551,25 549.75 Cottons grantec 1.123.107 50.50 50.50 Canons exerasec (132.921) 43.33 53.21 Cotons surrencorec on exer-casof accrocanonngms (71.325) 43.54 51.38 Canons terminstec (218.941) 52.37 Salance at Cec. 31,1973 4 C84.!S3 51.37 47.13 Canons grantec 1,023.122 46.25 46.25 Conens exercsec (98.145) 40.53 50.14 Concos surrencefoe en exer. Joe of accrocanon ngms (68.834) 40.52 49.17 .. Cocons termmarec I186.068) 50.77 Balance at Cec. 31,1979. 4 158.925 50.57 50.83

19. Commitments and contingent llamilities Lease commitments and centingent liabilities, ccnststing cf g'.arantees. pencing litigation, taxes anc ctner c: alms.

in the ccinion of menagement, are not considered to De matenalin rotation to the Comcany's financial position.

20. Operations by quarter for 1979 and 1978 (unaudited) rceser arnowumin annons-mesi seanne here sourm somnere announto m conersi cuarter worter worter wereur 1979:

Sales of crocue:s anc services to cus:cmers 55.C81.6 $5.542.3 35.508.3 58.127.9 Coeranng marpn 470.5 597.9 510.7 550.8 Not semings 3C3.4 382.1 340.8 382.5 Not saminga cor commen snare 1.33 1.59 1.50 1.58 1978: Sales of rocue:s anc services := customers 54.443.4 54.363.3 $4.342.9 55.4C3.7 Ccorating margin 413.4 520.3 464.1 560.1 i Not earmngs 247.3 319.4 298.3 383.5 Net eamings cor common snare 1.09 1.40 1.31 1.59 F-ll

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Power Systems inc!uces steam turcine g n:rators, gas tur-for intern:1 ccroor te purecses, and also for industry segment bines. nuc :ar oow:r re ctors anc nucie:r fuct ass:melics, recorung purecses. to a metnoc c: sed on enange in incivicual transformers. switer'; ear. meters, and mstallauen and mainte-commenent average ncnfixec investment. Net earnmgs amounts nance engineenng services. cy incustry segment for 1979 reflect tne revised metnoc. For ecmoaranve curcoses.1978 amounts nave coen restatec cown-Technical Systems and Materials ccesists of jet engmes for ware for Power Systeme anc Foreign Muttluncustry Ocerations aircraft, incustnal anc mance acciscatens; siectrome and otner ey 58.9 million anc $1.9 million. rescoctvery, with an offsettng high tecnnology crecucts anc services enmarliy for aercscace increase in general cerecrate items and elimmanens. The imcact acclications anc catense: matenats (engmeerec ctastes, sili-cf the enange woulc net ce matenalic the amount of. cr tronc in. cones. incustnal cuttng matenais. aminatec anc insulatmg ma, eammgs of etner ncustry segments for 1978 or to amounts and l tonals, anc cattenes): mecical anc ecmmumcations ecutement: troncs reocr ec for years ener to 1978 for any meustry segment. anc ume snanng. comeuung, anc remete cata crecessing. Therefore, no etner restatements nave coen mace. Ctner allocacon crococures fer comcutng not earnings are Neturei Mesources inc:uces tne mming of coiang coat (pnnci-unenangec. Interest anc etner financial enarges of affiliatec i pally m Australia), uramum. Steam coal. iron, and concer. In ecmoames recognize that sucrt comcarties generally service aceiton it inctuces oil and natural gas crocuccon ocean snio. meir own coot. General cercorate excenses are allocatec onnci-peg (pnmarily in succort of mining ooerations) and land accussi-pally on the casas of ecst of coerations. witn certairt excoctions tion and coveicoment. and reductions wnicn roccgnize tne varytng cogrees to wnien affiliated comoanies mamtam meir own corocrate structures. In Persign Mutti-industry Operations consists onnetcally of cr-acetton, crevision for mcome taxes ($953.4 million m 1979, e!qn affiliates wnicn manufacture crocucts pnmanly for sale in S893.9 million in 1978) is allecatec casec on the totas corocrate meer resocceve nome marxets. et*ecove tax rate, excoct for GECO and Natural Fesources. wnese necme taxes are calcutatec secarateiy. Minenty mterest i Not earnings for incustry segments m ener Annual Recorts ($28.5 million in 1979. $283 million in 1978) is allocatec to coor-l inctuced allocaten of corecrate interest income. excense and sting components navmg resocnsicility for investments in cen. etner fhancal cnarges to :arent ecmcany ccmoonents cased sclicated affiliates. enncically en casn flow. Ccmmeneng m 1979, me asiocation of in general, it is GE's oolicy to once intomal sales as neany l l mese items to carent ecmeany comocnents nas oeen changee as cracticaote to ocuivaient commercial seiling onces. j i Geograonic segment..information j t _ l Revenues I (in rmhions) Nr me veers eness oesemoer 31 _ j To:si revenues it'tersegment sees Eenernes sees one omerincome j 1979 1978 1977 1979 1978 1977 1979 1978 19 7 l Unrted States 318.859.2 S16.443.1 S14.560.4 5466.9 $362.5 S340.3 518.392.3 S18.080.5 S14.220.1 Far Eastinc:ucing Australia 1.182.8 1.108.8 1.056.2 279.5 241.8 204.0 9C3.3 867.0 852.2 Ctner areas of me wonc 3.813.8 3.270.4 2.916.7 129.4 145.1 30.1 3.684.4 3.125.3 2.336.5

!iminanon ofintracomeany transactens (875.8)

(749.3) (6244) (875.8) (749 5) (824 4) Total 522.980.0 $20.072.3 517 908.9 S S - $22.980.0 S20.072.8 S17.908.9 Geograonic segment intermanon is cased on me location of the 1978 and $1.216.9 million in 1977) were to customers m Euroce, ooeration fumesnmg goocs or services, incuced in Umted States Afnca and me Miccle East; anc $741.2 million m 1979 (S498.1 revenues were export sales to unaffiliated customers of 52.772.1 million m 1978 and $574.2 million m 1977) were to customers m million in 1979. 32.570.7 million in 1978 and $2.101.2 million in me Far East incudmg Australia. U.S. revenues also include rey. 1977. Of sucn sales. $1.581.3 million in 1979 ($1.661.9 million in alty and licensing income from unaffiliatec foreign sources, j ? l Not estnings Aaaets I %r me veers enose cecemoor 21 As cecemoor 31 1979 1973 1977 1979 1978 1977 Umted States $1.119.8 S 360.5 5 846.3 312.993.1 311.410.4 $10.491.5

c

. ar astine:ucmg Australia 173.9 170.1 161.6 842.1 888.5 871.2 'Ctner areas of tne wond 119.5 103.6 S3.5 3.207.2 2.326.3 2.41 4.3 E!immanen cfintracemeany transactens I4 4) I46) I3.2) (97 9) (89 *) IS0?) Total 31 4C8.3 51.229.7 51 088.2 S16.644.5 315.036.0 5:3 596.3 i Fevenues, net earmngs and assets assoc:atec with foreign co. amounts were $1.909.4 million. $150.3 miilien and $1.555.5 mil-l cratens are snown m me tacutanens acove. At Decemcor 31. Ilon. rescocavely, at Decemcor 31,1978, anc $1.798.7 million. j 1979, foreign coeranen liacilrties, mmenty interest m ocuity anc S131.3 millien anc S1.356.0 millien. resoecovety. at Decemcer i GE nterest in ecuity were $2.101.1 million. S139.0 million anc 31.1977. $1.309.1 milhon. rescoctveiy. On a ecmcaracle casis. me i F-13 t i

t GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIAT2S ADDITIONAL FINANCIAL INFORMATION

• HE GENERAL ELZCT1!C PENSION PLAN, a crusceed pension plan, became effec:1ve September 1, 1946.

The Plan was most recently amended eff ective July 1, 1979. Pensions are relaced to length of service and earnings, w1:h guaranaceed minimums for retirees having 10 or more years of pension qualificacion service. Participants contribuce 3 per cent on compensation in excess of $9,000 a year.

• he normal retirement age under the Plan is 65, with opcional retirement permitted up to five years earlier.

Accrued pension benefits payable to participants who recire opcional17 at or after age 60 are not reduced for early rectrement. A closed group of long-service employees may retire opcionally as early as age 55 on a reduced pension. ' There is also provision for a pension in case of cocal and permanent disabill:7 after 15 years of pension qualification service. The Plan also provides for vested rights af ter' 10 years of pension qualificacion service, survivorship opcions, and pre-retirement death beneft:s. Effective July 1,1973, a SITPPLEMENTARY PENSION PLAN was approved by :he Company's Board of Directors, che purpose of which is to ensure that the pension benefits of long-se rvice professional and nanagerial employees, when combined with their social security benefits, bear a reasonable relacionship co their final average earnings. The plan was nost recently amended effective January 1, L980. Ihe Plan as amended provides that if a specified percentage of final average earnings multiplied by years of pension benefit service is 3reater than che sum of an employee's pension under the Pension Plan and the estimaced age 65 Social Security Benefit, the Company will pay a supplementary { pension equal to 90% of that difference. The Supplementary Pension Plan contains the same opcions as to retirement (except the prior to age 60 opcion) { as the General Electric Pension Plan, and also applies to persons who recired directly from the Company who would have been eligible to receive benefits under the Supplementary ?lan if : hey had retired subsequent to its effective date of July 1,1973. Accounting for nanufacturing PLANT AND EQUIPMENT retirements and j dispositions varies according to che types of facility involved. Cost and ) accumulated depreciation on facilities valuable enough to warrant maintenance of detailed records are removed from the assac and accumulated depreciation accounts when physically retired or otherwise disposed of. Profit or loss i realized from :he retirement or disposition of such facilities is included in l operacions. Costs and accumulated depreciation of facilities for which ) detailed records are not maintained are removed from :he asset and accumulated depreciation accounts when chese facilities become fully depreciated. ?roceeds realiced upon disposition of such facilities are treated as reduccions of current year depreciation expense. i ?*lk

GENERAL ELECT 3.IC COMPANT AND CONSOLDAl"ZD AFFILTAM ADDITIONAL TINANCIAL INFORMATION-(Continued) ACCOUNTS PAIA3LI consisted of :he following: December 31 1979 1978 (in millions) Trade.................................. S1,258.9 S1,066.0 Collected for the account of others.... 172.0 136.7 Nonconso11 dated affiliates............. 45.8 14.5 31,476.7 31,217.2

• he STOCK OPTION-PERFOPS.NCE UNIT PLAN approved by General Electric share owners in 1978, and previous plans under which options remain outstanding, provide that the option price shall be the full market value of General 21actric common stock on date of grant. Market value is based on the reported closing price of the stock on the Consolidated Tape of New York Stock Exchange listed shares, in the case of the 1978 Plan, and, in the case of previous plans, on the reported closing price of the stock on the New York Stock Ixchange. *here were no charges to income wi:h respect to stock options.

The L973 plan provided, and the 1978 plan provides, for granting stock appreciation rights to holders of options under present and past plans which permit them to surrender exercisable options or a portion of an option in exchange for an amount equal to the excess of the market price of the common stock on the date the right is exercised over the option price. The Management Development and Compensation Committee (Committee) of the 3 card of Directors determines whether this amount will be distributed in GE shares, cash or both. The 1978 plan provides for granting performance units as a means of awarding incentive remuneration to plan participants in lieu of options and stock appreciation rights. Performance units are granted for award periods not exceeding five calendar years with an achievable value fixed by the Committee at the date of grant which does not exceed 90% of the fair market value of GE common stock on that date. The Committee also sets principal and minimum :argets to be achieved and determines :he value actually assigned :o performance units at the end of the award period in relation to the degree to which the principal target has been achieved. Failure :o achieve the minimum target nakes :he performance uni: valueless. Even if the targets are achieved, performance units will only be paid when, if, and to the extent the Committee determines to make payment. No performance uni:s have been paid to date. i F-15

• =r== umhr opcionnn=e=e 3 (1)

Sandr. W=r4m 1979

• 1978

=fsts mlacui Aggnqpaa to abates utrier Asurage /macupt 'alue ac cpcica ac !hdar cycfax 21mber cycfcn ches d n==har31 d

rica d

rice grme chdur d Sures) shans me shee sures

=r dura 1979 1978 1979

9 78 (In W114mm) l 30,9 3 S 4.8 S-118,982

$40.44 S 1969 grancs....... 1970 genres....... 253,725 43.13 294,378 43.13 10.9 12.7 85,503 103,896 ,1971 scancs....... 149,099 56.20 154,815 56.20 8.4 8J 34,7(:0 36,144 1972 grunts....... 34,225 6.63 T6,277 6.63 19.9

DJ 135,713 144,541 1973 cants.......

383,023 %.75 400,617 %.75 24.8 25.9 170,3 r19,5E6 3 1974 grancs....... 52D,C92 29.85 550,629 39.69

D.7 22.3 224,38 241,968 1975 grancs.......

126,617 47.79 150,369 47.80 6.5 7.2 51,5CB 62,52 1976 g:ancs....... 295,549 52.70 312,211 $2.64 15.6 16.4 102,588 5,231 1977 grancs....... 633,527 51.r:0 671,737 51.57 32.7 34.7 237,366 236,657 1978 g:ancs....... 1,C69,849 50.68 1,113,358 50.60 54.2 56.6 492,624 526,926 422.439 47.4 1979 grancs....... 1,023.122 46.25 4,758,928(a) e,CE,853(a) S241.1 5210.0 1,957,S03 1,652,494 (a) Performance units with an average per unic =ax1 mum achievable value of $29.01 per unit relating on a one to one basis to unexpired options for 1,839,304 shares were outstanding at December 31, 1979. Performance units with per unit maximum achievable value of S28.00 per unit relating on a one to l one basis to unexpired options for 854,449 shares were outstanding at December 31, 1978. (2) Shares for which options first became exercisabla and option price and market value at dates options became exercisable: Optdan refc= Hrrir=r value S=har of Aiurr=9m Aggregata Average Aggregate Perdad Shares per shura (in M114-) per sherv, (in d114-) 1979............... 573,332 $51.42 S29.5 S46J3 $26.8 1978............... 600,215 $51.21 $30.7 $49.32 S29.6 (3) Shares for which options were exercised and option price and =arket value at dates options were exercised: Optist re4r* W value M=h=r of Average Aggregate Average Aggregate Pertzi Shares our shura (in d114 - )

ur shara (in d114-)

1979............... 98,145 $40.63 S4.0 $50.14 S4.9 1978............... 132,921 S43.93 35.3 $53.21 $7.1 In 1979 there were 68,834 shares subject to options surrendered on exercise of appreciation rights. In 1978 there were 71,325 shares surrendered. F-16 __________j

Financialissues: succlematary informanen to mat Stat. ment of Sam-ings: use of tne LIFO metnec increasec 1979 and 1978 the impact of nflatton cce, ann, cest3 cy 3a30.3 m,nion anc S22a.1 minien (te 5 I S20.330.7 million anc S17.595.9 millicm. rescecuvely, with a certesconcing recucten cf recortec cre-tax prefits. Unfortunately. U.S. tax regulatons !aii to crovice an ecuivalent te LIFC for tne imcact Of infiatien On a ecm. Inflation is ecmmenty cefinec as a Icss in value of money cany's ecsts of crecer y. piant and ecuicment. Insteac. cue to an increase in tne volume of money and crecit cecuct: ens fer wear anc tear on :nese assets are casec relative to avaltacle geces and services, resulting in a nse en enginal curenase costs ratner tnan tecay's reciace-in tne tevel of ances. Intianen in the U.S. is generally rec-ment costs. In general tne resuiting sncrtfall must ce ognized to ce caused cy a ecmcination cf factors, inctuc-funcoc from after tax eamings. ing govemment deficts, snaro increases in energy ecsts, and low productivity gains inctucing tne effect of proliferat-The supplementary information snown in Tacie 1 re. ing govemment regulations. states operaung results to eliminate tne major effects cf Altnougn loss of purenssing cower of me cctlar im-inflation ciscussac accve. Tacle 1 cemeares GE ccerating cacts all areas of the economy, it is carticularty enerous in resuits as recortec en page 32 witn results aciustec in two its effect on savings -of totn incividuats in forms suen as ways. First. results are restatec to snew tne effects of savings accounts, securmes anc censions. and of cerco-general inflatten-the less cf me ccitar s curenasing ratens in tne form cf retainec eamings. power-en inventenes anc fixec assets. The secenc re-statement snows results restatec fcr enanges in scocfic For the individual, with infiation of 6% a year, tne cellar onces - tne current ecsts cf rectacmg mese assets. Ycur savec by a person at age 50 will have test tnree-fiftns of its management feets mat me Iast cetumn in Tacte 1 is tne value ey the time the person is age 65. With a 10% infia-more meaningtut anc nas merefere snown, in Tacte 2 on tien rate, almost four fifths of tne cellar's value is Icst in 15 cage 30. five years of results en mat casts. also acjusted years. This prcelem affects almost everyone,inciucing to ecuivalent 1979 collars to make tne years ccmcaracle. mese cresently wonang anc escocially mese wne are en While tne tecnnicues usec are not crec:se, tney ce pro-fixec incomes. cuce reasonacte acercximations. The situanen is rencored even more cifficuit ey me in these sammgs statements, scec:fic adjustments progressive income tax system. A Ccngressional staff are mace to (1) cost of geocs sold for tne current ecst of stucy recorts mat a family of four witn an income of 58.132 rectacing inventeries anc (2) cecreciatica for me current in 1964 would need a 1979 income of $18.918 to have ecsts of plant and equiement. The restatements for inven-kect pace with tne increase in me Censumer Fnce incex tones are relanvely small Decause GS's extensive use of over tne years. However, the 1979 mecme of S18.918 outs LIFO accounting alreacy largeiy reflects current costs in tne family into a higner tax tracket wnien, wnen ecuoted me tracitional statements. However, a sucstanttal restate-with increasec Social Secunty taxes, recuces real after-ment is mace for tne imcact of inflation en fixec assets, tax income $1.068 ceiow tne equivalent 1964 level, wnien nave relatively teng lives. The 5624 million of coere, cianon as tracitionally racertec wnen restated fer general Your Company and all U.S. businesses f ace a similar inflation, increases to a total of $880 million. But tne re-preciem. Business savmgs are in tne form of retained statement necessary to reflect reclacement of tnese as-i l eamings-me eamings a ecmeany keecs after paying sets at current costs grows to $980 million. The net effect emcioyees, succliers and vencers, and after payment of of tnese restatements lowers recorted inecme of 56.20 a taxes to govemment and civicencs to snare owners. If a snare to S4.68 on a generalinflatten adjusted casis anc i comoany is to continue in cusinesa, muen less grow it S4.34 on a spec:fic current ecst casts. must De acie to save or retain sufficient samings, after providing a retum to its snare owners, to fund the cost of it is significent to note that for the Ilve years 1975 1979, I rectactng - at tocay's inflated onces - tne crocucuve even atter ad}ustment for inflation, your company has snown assets used uc. Rotentien of cacitalin these mflationary rest growm in esmmgs and a smooy inemese in snem owners' sany over me enttm pomemr adlusting eemings ter cur-t:mes uncer exisung tax laws is a enatienge facing all l rent costs and restating all years to ocurvsbent 1979 00tlers. Cusmesses, your comoeny's average annual growrn rate in rots semings U.S. tax regulatens carmrt recognition of the imcact was 21% ames 1975 and 3% since 1976. This means that the of inflation on a ecmcany's inventory costs by use of the growm in Grs semings nos been real. net just me product et LIFO (last in, first-out) inventory metnod. In general, un-intration. car tne LIFO metnoc. a comcany enarges off to ccerations tne current cost of inventenes censumec dunng tne year. An important insignt from tnese cata is depicted in t.e witn intiation averagmg ever 11% tast year. tne negative cie enarts at ngnt. These snew inat. Over me five years imcact en coeraticns of usmg current costs witn rescect te 19751979. cecause of inflanen 10% more of GE's eam-a succly cf geces is sucstannai. Finane:al resuits are cor-ings were taxac away man accearec te nave ceen tne trayec more accurately wnen me LIFO metnoc is usec m case using tracitional financ:al statements. Whiie tne tra-conocs of nign inflatten. anc GE has usec LIFO for mcst cf citronal eamings statements incicatec an effecuve its U.S. manufactunng inventenes for a cuarter centu y. tax rate of 41% cver this cence. me "reat" tax rate aver-The Statement of Eamings en cage 32 is on mat casas. As agec 51% of crofits cetere taxes. Ocnsecuenny, eamings ?-17 L

Table 1: supplernentary information - effect of changing prices m l l The notes on cage 30 are an integral cart of tnis statement. l (In mtilions excect cer snare arnounts) As reoonec in M;ustec Miusted for enanges I tne tracitional for generaf <n soec:fic :nces statements intranen tcurrent eestsum For the year ended December 31,1979 $22,461 $22,461 S22,461 Sties of products and services to customers 15,991 16,093 16,074 Costof goods sold 3,716 3,716 3,716 S:lling, general and administrative expense 624 880 960 Depreciation, depletion and amorcization 258 258 258 Interest and other financial charges (519) (519) f519) Otherincome 2,391 2,033 1,952 E2mings before income taxes and minonty interest 953 953 953 Provision forincome taxes 29 16 13 Minenty interest in samings of consolidated affiliates S 1,409 g M Net eamings applicable to common stock S 6.20 $ 4.58 $ 4.34 Eamings per common share Share owners' equity at year end (net assets) (c) S 7.362 $10,436 $11,153 ) Use of each dollar of earnings Eased on total earnings esfore taxes 1975 t 979 i As reported .A Mjusted for enanges in specific prices ~ __-p.m

ra mi g (current costs) y Ohw

_ __ u MS 'Ci SIM 1hryowah.: Q&i!E .uru.FTYSN,0 -. 2R.W pu2 pg.h.W! .W . _ y 22e . ;,... ; N3riedy. r:- w x pw ~ %. '*! jf rea/ rates o/ return commensurate with the risks involved. retained for growth were cut in half to 16% of income Such supplemental measurements can assist in the entire l btfore tax, not 32% as reflected in the traditional financial resource allocation process, starting with initial project ao-statements. Over the period, share owners received a measure of protection against inflation's impact as about preval, implementation and subseouent review. two thirds of after tax eamings were distributed -equiva-lent to an average annual growth rate of aDout 3% in real improWng productivity to offset inflationary forces is a pnmary goal established by too management that is being dividends, stressed throughout General Electnc. As discussed on the back cover of this Annual Report, the Company has ccm-An area receiving special attention by management is mitted significantlevels of resources to research and de-experimentation with the use ofinflation adjusted meas-veicoment activities to accelerate innovation and increase urements at the individual business and project f evel for cacital budgeting, Since 1973, your Company has been productivity. In addition, General Electne's production base continues to be expanded and modernized thrcugn excenmenting with varicus techniques to measure the im-pact of inflation, to incorporate the perspectives provided increasing investments in plant and souipment. For exam-by such measurements into decision making, and to stim-Pte. $1,262 million and $1.055 mrilion were spent on utate awareness by all fevels of management of the need strengthening General Electnc's production base in 1979 and 1978, respectively. Imaginative and diligent coupling to develop constructive business strategies to deal with inflation. The objective is to ensure that investments of production tecnniques and equipment is ential to the maintenance and improvement of your Company's needed for new business growth, productivity imoreve-ments and cacacity expansions eam apprognate profitactlity. F-13

l Table 2: supplementary information - effect of changing prices (o J A on maens...sest o.r.sn.,e.,neumo Current cost information in dollars of 1979 purchasing power 1b) i An amounts ernrossed m average t 979 coitars) 1979 1978 1977 1976 1975 j Sales of procucts and services to customers $22,461 $21.367 S20,984 $20,015 $19.022 l Cost of goods sold 16.074 15.548 14,793 14,145 13.914 Selling, general and administrative expense 3,716 3,566 3,606 3.360 3.018 Cecreciation, depletion and amortization 980 1,000 986 979 1,006 ) Interest and other financial enarges 258 249 238 222 251 Ctherincome ($19) (466) (467) (350) (235) Eamings before income taxes and minenty interest 1.952 1,970 1.828 1.559 1.068 l Provtsion forincome taxes 953 995 925 $53 620 i Minenty interest in eamings of consolidated aff!Ilates 13 13 20 26 25 i J S SJ S j J Not samings applicacie to common stock S 962 J Eamings per common share S 4.34 5 4.22 3 3.38 $ 3.45 S 128 l Share owners' ecuity at voar end (not assetst (c) $11.153 $11.020 $10.656 S10.526 S10.056 _Other.Jnflat_ ion _information_ j Average Ccnsumer Pnce index (1967 = 100) 217.4 175.4 181.5 170.5 161.2 (Losspgain in general purenasing power of not l monetary items S(209) S(129) $ (61) $ (20) 3 10 Civicenes coc:ared eer ecmmon snare 2.75 - 2.78 2.52 2.17 2.16 ~~ "Mamet oneerpercommort sesre at year end 47% 50 % 58 % $58/s 60 % l t Notes'to EumHementsr71pformstlen = Tsedes 1 and 2 m cresentmg results of either of me sucolernentary ac-l ~ - (a) This information nas oeen orecared in accorcance witn re. countmg memocs for more man one year. "real" trenes are cuirements of tne Financal Accounting Stancarca Soare mere evicent wnen results for all years are exoressed in l (FASB). Proper use of tnis information recuires an uncer. terms of me general ourenamng power of tne cottar for a stanomg of certam easic conceots and cofinrttons. cosignatec comod. Results of suen restatemems are gener. l The heacing "As recorted in me traditional statements" ally callec " constant collar" cresentations. Irt tne five year _ _ refers to information crawn airectly from the financal state-presentations shown acove, coilar results for etnier :ences ~ monts cresentee on oages 32 to 44. This information is ore-nave eeen restated to meir ocuivalent numoer of constant i caroc usmg me setof generally accootec accountmg onne-collars of 1979 general curenasmg power (CPI U =as.H caos wmen rencers an accountmg cased on me numoer of Since none et mese restatemems is allowacio for tax actual collars involved in transacnons, witn no recognition curnoses under existmg regulations. income tax amoums are i grven to me fact met tne vaaue of me colin enanges over me same as in tne tracrt onal statemems (but expressed in i time. constant collars m me five year summary). i The needing " Adjusted for general inflation

• refers to There are a numoer of ctner terms anc conceots wntch l

informacon crecarec usmg a offferent accroacn to transac. may be of interest in assessing the significance of ine sucote-t tions invetvmg inventory and crocorty, stant and ocusemer.t mentary mformanon snown m Tacles 1 anc 2. However, it is i assets. Uncer mis croceeurs, me numoer of conars invotved management's comion mat me casic concocts ciscussed i m transacnons at cifferent cates are att restatec to ocuiva:em acove are me most significam for me rescer to nave m mind amounts m terms of the general ourenasmg power of me wnile reviewmg mes infomtauon. -ooner aedie measuree oy-me Consumer Pnce incex for ait (b) Pnneoal tyoes of information used to aciust for enanges m l - _ Uroan Consumers (CPt U). For examete 31.000 invested m spectic onces (current costs) are (1) for mventory costs. GG. i a outicmg asset in 1967 would be restated to its 1979 collar generatec maicos of once enanges for scoefic geocs and i curenasmg power ecurvaient of $2.174 to value tne asset anc services, anc (2) for Orcoerty, : tant anc ecuicment. sxtemaily i

aiculate coorecaten cnarges. Similarly,1978 curenases of generated meices of once enanges for maior c: asses of non UFO mventery solo in 1979 wouic ce accountee ter at assets.

meir ocuivaient m terms of 1979 collars. ratner

• nan m terms ici At Oecemoor 31 1979. me current : st of mventory was of the actual numcor cf cctlars scent.

55.25 t millien. anc cf =recerty. : ant anc ecuiement was The neacing "Aciustec for enanges in scoctic ences 37.004 medien. Estmatec current ::sts a licacie :: me sum teurtent costsi" refers to nformanon crocaroc usmg yet anctner of suen amounts neio cunng att or : art of 1979 mersasec Oy acercaen to transactons mvotymg mvemory and creo-accreximately $1.111 million. wnien was $329 million less i erty, stant ano ecutement assets. In mis case, ratner man man tne $1 A40 miilion increase wnien couic ce exoected i restatmg to conars of the same generai curenasing cower.

ecause of generalinflauen.

esumates of current : sts cf me assets are used. l F-19 l l i

e GENERAL ELECaIC COMPANT AND CONSOLIDATED AF7ILIATES SCHEDULE II - AMOUNTS RECEIVA3LE FROM UNDERWRITERS, PROMOTERS, DIRECTORS OFFICERS, EMPLOYEES, AND FRINCIPAL HOLDERS (OTHER THAN AFFILI.ATES) 0F EQUITY SECURITIES OF IHE FIRSON AND ITS AFFILIATES himnr. at Ecd Malarre at Nrk-Hr==- of Period n== w n= We of Pacia,d kiditicas ("a11W Currenc !W (he in t+rma) L79 J.3.Ladd(1)(2)(3)(4)................... $ 53 S-S 33 S-S- 6 I.a. Milting(l)(2)(4)................... 6 1 _1 O l L.E. Barrat:(1)(4)...................... 14 1978 2 2 51 J.B.Iadd(1)(2)(3)(4)................... 55 156 1 5 K.R. Mtiting(l)(2)(4)................... 162 27 J.H. } bore (1)(4)........................ 27 19 1 13 L.E. Barret:(1)(4)...................... 33 48 C.O. ':5:nas(1)(4)....................... 48 1 1 l (1) Officer of Ladd Petroleum Corporation a wholly-owned subsidiary of Utah International. (2) Director of Ladd Petroleum Corporation. (3) Director of Utah International Inc. (4) The, major portion of the current receivables due in 1980 is secured by pledge agreements covering shares of common stock of General Electric Company. Remaining balances are secured by first mortgages on real estate. j Prior to the acqaisition of Ladd by Utah the above-named employees purchased j lots in a real estate subdivision owned by one of Ladd's subsidiaries on the l same terms as those offered to the general public. F-20 l 1 L_______ __ --- _ ----- _ _

GENERAL ELECT 3.IC COMPANT AND CONSOLID CZD AFFILIATES SCHEDULZ III - INVESTMENTS IN, EQUITT IN EARNINGS OF, AND DIVIDENDS RECEIVED FROM OTHER PERSONS le===14A=r-i ?!zuzma Afff11stan Gunsal h e Cuant W = >=reime=1 mwwwm1tAmr=1 yen Pm6 mad Ozum Cum 2est Chess 2mus Samus Amaze >=ef1) Asrasm Mitd s M4=r= W (th12ar muzzsz inud11 fans) 3aLves,.:arusry 1,1978......... 450, @ 1,459,KD 5600.0 $5.2 5605.2 S 86.7 C22.3(3) hifL crs: 27.3(4) 309,@ E.3 0.9 62.7 Invascnmes.................. 2J Ahmixas..................... (3.8) 77.3 0.2 77J E; uter in estr&gs Csas).... M *m=: (6L8) - (5) (0.5) (61.3) 3viduzis.................... (36.7)(6) nf==f Mnna................. (4.5) ?quyants m atarras....... 3 alarum, n-=r+=r 31,1978....... 450,GD 1,768,5D 677.3 6.3 683.6 86.7 257.1(3) AiWins: 613,KD 122.7 0.9 123.6 (4.1) !.e.3(4) Inouscusacs.................. 74.9 7.6 kharx:ss..................... 89.9 (0.4) 89.5 1.0 Friuity in anrnigs Cas).... M e*'ms: (72.7) - (5) (4.9) G2.7) 2viduzis.................... (0.7)(6) j h - % s................. (7.6) Rspsymacs cn shras....... klars, Deacher 31,1979....... 450,000 2,382,@ 5817.2 S6.8 $824.0 $157.5 C01.3(3) (1) Represents investment in one company at December 31, 1979 and December 31, 1978. (2) Includes advances of $46.9 million, S50.2 million and $52.2 s1111on at December 31, 1979, December 31, 1978 and January 1, 1978, respectively. (3) Represents invostments in 59 companies at December 31, 1979 (55 at December 31, 1978) which are not consolidated but in which the Company owns 20% or more of the voting stock and are valued by the equity method. (i) It:cludes acquisition. of 8 new companies in 1979 and 7 in 1978. (3) Ihis wholly owned affiliate is valued at the lower of cost se aquity, plus advances. Dividends were 319.6 million in 1978 and $1.0 sillion in 1979. See Note 12 to financial statements for additional information. (6) Represents the disposition of 4 companies in 1979 and 5 in 1978; and includes in 1973 the effect of the change in status of Marcona Corpo rstion from an Associated Company to a wholly owned consolidated affiliate. ?-21

GENERAL ELECTR.IC COMPANY AND CONSOLIDATED AFFILIAT2S SCHEDULE 7 - PROPERTT, PLANT AND EQUIPMENT T=madn1A MM. cnses ami Mr=m1 /_ :... _, _ _ r_ :. _ :. - prputty ew, mum Iani ami ad t=1me=1 ami plac trde pImz mzi W e 9 emem e<m wm. - w (Ar==en in M14r==) 2alares, 'aruar/1,1978........ 5121.0 51,378.5 54,15.4 SL%.5 51,C43.1 $7,514.5 Aifit:fers(1)................ 4.2 134.1 C9.2 74.0 213.6 1,055.1 FacL e ce sales........ (1.5) (29.5) (150.4) (4.9) (5.2) (2315) (9.8) Othe chges(2)............ (0.2) 0.7 (7.2) (3.1) %me, B wi=r 31,1978...... 123.5 1,983.8 4,737.0 232.5 1,251.5 8,2:S.3 kHf M ewu(1)................ 44 14 2.3 754.7 145.6 215.2 1,262.3 FacLurnacs ce salas........ (4.1) (T.2) (197.8) (4.2) (10.7) (247.0) 21.6 Othe tarspes(2)............ 0.3 2.6 20.3 (2.1) S1,'56.0 59,265.2 5124.7 S2,C98.5 55,314 2 5371.3 4 'airen,r=c e =" 31,1979...... (1) Includes cransfers between planc and equipment classificacions. (2) Includes cransfers to and from other accounts. l F-22 i l \\

GENHAL ELECl3IC COMPANY AND CONSOLIDATID AFFILIATES SCHEDULZ VI - ACCQfULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, FLANT AND EQU M TI n<us==; emwnnma, - 1... _ j N1 Imiand am!Inimul and epip-T omasin1A pEptty pbEE h -de re

ure(4) a:sts ami -- : - --

"22:al (h in=rmer=) Erra, Jaruary 1,1978........ s12.6 s 917.0 s2,s04 s'.0.3 5394 53,930.4 W H e=(1)................ 0.4 945 '!96.4 7.3 77.3 5764(3) (:DA) (164.1) (4.9) (1.6) (191.0) FacLw ce salas........ (10.2) (0.6) (9.6) Other charges (2)............ ?almrm, ne===- 31,1978...... 13.0 990.5 2,3D.1 43.2 375.3 4,3C54 W % )................ OJ 101.6 429.1 9.2 9.5 624.1(3) (23.1) (7.3.2) (3.5) (6.3) ('38.2) FacLe ce salms........ 10.9 (0.4) 10.6 0.7 Cthe mW 2)............ 'alance, h 31, LCM...... $13.7 $1,0584 53,157 4 %9.5 % 53.0 %,752A (1) Includes transfers between plant and equipment classifications. (2) Includes transfers to and from other accounts. (3) All charged to current earnings (4) Includes elimination of intercompany profits as follows: January 1, 19 7 8........................................ $ 13. 8 Provision credited to operations................... 1.4 December 31, 1978...................................... 15.2 i Provision credited to operations................... 1.1 i December 31, 1979...................................... $16.3 e \\ 1 F-23

GENERAL ELECTRIC COMPANY AND CONSOLIDAIED AFFILIATES SCHEDULE III - VALUATION AND QUALIMING ACCOUNTS AND RESERVES 1 Allowance for losses deducted from assets Accounts and nor.as recalvable Investments (Amounts in sillions) 3alance, January 1, 1978....................... S 95 5 314.6 Charged (credited) to profit and loss...... 15.0 (0.9) 4.2 Charged to other accounts.................. Deductions (1).............................. (12.7) (3.1) 3alance, December 31, 1978..................... 97.8(2) 14.8 Charged to profit and loss................. 15.8 1.1 Charged (credited) to other accounts....... (0.1) Deductions (1).............................. (11.5) Balance, December 31, 1979..................... $102.0(2) $15.9 (1) Represents write-offs and related charges net of recoveries. (2) The year-end balance is segregated on the Statement of Financial Position as follows: 1979 1978 Current receivables.................. S 89.4 $78.5 Other assets (long-term receivables, customer financing, etc.)............. 12.6 19.3 S102.0 $97.8 F-24

1 t Form 11-K A mm= 1 Report For the Fiscal Year ended December 31, 1979 cy.wrm ELECTRIC SAVINGS AND SECURITT PROGRAM m. Item 1. Change in the Plan................. The changes which may be deemed material that were made in the provisions of the General Electric Savings & Security ?rogram (the "?rogram") during 1979 are as follows (and reference is made to the -Prospectus,-the Program booklet and the Rules of the Funds ref erred to in Notes (a), (b), and (c), respectively,

below, for additional information):

= =1. Parricipants may invest in the General Electric S&S Program = - - Interest Funds consiseing of the General Electric S&S i Eolding Period Interest Fund (the ~3P Fund") through units of--participation during the Holding Period, and the General ~ Electric S&S Long Term Interest Fund (the "LT Fund") through units of parricipation outside the Holding Period (in the Retirement Option Account or upon distribution from a Holding Period). See " Description of the Program" (a); "The Trust and the Fund Agreements" (Section XIII) (b); and " Rules of the Funds" (c).

2. A non-forfeitable withdrawal can be made from the Program co make a downpayment toward the purchase of a primary residence.

See '" Withdrawals and Payments" (Section VIII) (b); and " Retirement Option Account" (Section IX) (b).

3. The provision of the Program regarding withdrawals and payments were modified (1) to persic repayment of amounts withdrawn and reinstatement of amounts forfeited under the terms and conditions of the Program (see " Description of Duration" (Section the Program" (a); " Holding Period Other VII-A)(b);

and " Withdrawals and Payments ^ Withdrawals" (Section VIII-A-8)(b)); (ii) to provide that the forfeiture provisions for withdrawal prior to completion of the applicable Eolding Period under the Program shall not apply to a participant naking a withdrawal af ter attaining age 65 while in the employment of a Participating Company in the Program, but that the parricipant shall be subject to the penalty provisions of Other the Program (see " Withdrawals and Payments Withdrawals" (Section VIII-A-8)(b)); and (iii) to revise j the order in which withdrawals are nade from a participant's account in certain cases (see " Withdrawals and Payments - Method of Payment" (Section 7I!!-C-3)(b)). Exhibit-1 1

l

4. In the case of a participant dying af ter normal recirement age while remaining in the service of the Company, as defined in the Program, provision is made for the purchase of a joint and 50" surviving spouse annuity under the terms and conditions of the Program.

See " Retirement Option Account - Types of Distribution - Automatic Joint and 50" Surviving Spouse Annuicy Distribution for Cartain Participants" (Section II-G-4)(b). f

5. Participants with a Retirement Option Accounc under the Program may elect, under the terms and condicions of the Program, to switch their investments.

See " Retirement Option Account - Investment Sw1tching" (Section IX-D)(b). l

6. A participant who receives a

• qualifying rollover distribucion" described in Section 402(a)(3)(D) of the Internal Revenue Code from another employee plan, from an employee annuity, or from certain other

sources, in accordance with the terms and conditions of the Program, may transfer all or part of the distribution to his j

Retirement Option Account. See " Rec 1rement Option Account - Ro11 overs From Other Qualified Plans" (Section i IX-B)(b). Item 2. Changes in Investment Policy....... See Item 1 above with respect to the General Electric S&S Program Interesc Funds. Item 3. Participating Employees............. " Participation in Program" (a) Item 4. Administration of the Plan.......... " Administration of the Program" (a) I:em 5. Cuscodian of Investments A)............................. Bankers Trust

Company, 16 Wall

Street, New York, NY

10005, a

commercial bank, acts as custoutan for securities in the LT Fund. Morgan Guarancy Trust Company of New York, 9 Wesc $7th St., New York, N.Y. 10017 (" Morgan") and the Bank of New York, 90 Washington St., New

York, N.Y.

10015, commercial banks, act as custodian for securities in the General Electric S&S Program Mutual Fund and Morgan acts as custodian for all other securicles, other than U.S. ' Savings 3onds.

See also " Administration of the Program" (a). 3)............................. For the compensation paid to Morgan in all capacities during the last fiscal year, see " Administration of the Program" (a). The Bank of New York was paid $21,975 for services as custodian during the last fiscal year. Exhibit-1 (cont'd)

l 1 C)............................. General Electric emplo yees adminis t er the Trust and are covered by a corporate fidelity bo nd. The custodian banks referred to in Item 5(A) above provide the following blanket fidelity bonds covering chair respective employees who perform functions for the program: Morgan Guaranty Trust Company of New York, S50 million plus excess coverage of $25 million; The Bank of New York, 325 million; and-Bankers Trust Company, 340 million. Item 6. Reports to Participating Employees.. " Description of ths Program" (a); " General Provisions" (Section XVII) (b); " Accounting Records, Audits, Financial Reports" (Section IV) (c). Item 7. Financial Statements and Exhibits General A)............................. "?inancial' Stacaments Electric Savings and Security Trust, General Electric S&S Program Mutual Fund" (a). 3)............................. (d) (a) I.ocation in Prospectus titled " General Electric Savings and Security ?rogram". Such Prospectus is included as part of Post-Effective Amendment No. 1 to Registration Statement No. 2-65573 of General Electric Company with respect to the 7togram ~(Which Registration Statement also constitutes Post-Effective Amendment No. 3 to Registration Statement No. 2-63986, Post-Effective Amendment No. 4 to Registration Statement 2-61148, Post-Effective Amendment No. 11 to Registration Statement No. 2-53187, Post-Effective Amendment No. 12 to Registration Statement No. 2-50572, Post-Effective Amendment No. 15 to Registration Statement No. 2-43465 and Post-Effective Amendment No. 17 to Registration Statement No. 2-36793); such Prospectus is hereby incorporated in this Annual Report by reference and specifically made a part hereof. (b) Set forth in Program booklec ER3-799.3 as amended through January 1, 1980, included in the Prospectus referred to in note (a) above. (c) Set forth in the Appendix to Program booklet ERB-799.8 entitled " Rules I of the Funds." (d) Incorporated by referenes to the Exhibits to the Registration Statement of General Electric Company on Form S-3 filed with respect to the Program (See Note (a) above). Exhibit-1 (cont'd)

CONSENT OF INDEPENDENT CERTIFIED PUBLIC" ACCOCTNTANTS tie hereby consent to the incorporation by reference in this annual; report (?orm 10-X) of our reports dated January 25, 1980 and February 15, 1980 on.che financial sescenents of General Ilaceric S&S Program Mucual Fund and General Electric Savings and Securi:y Irust forming part of the registracion scacement. referred to in note (a) of Exhibit 1 of this annual repor: (Form 10-K). PEAT, MAR'4ICK, MITCHELL & CO. 'Jhite Plains, New York March 26, 1980 Ishibi:-2

AMENDMENTS TO GENERAL ELECTRIC SUPPLEMENTRY PENSION PLAN The General Electric Supplementary Pension Plan was amended effec:17e May 1, 1979, July 1,1979 and January 1,1980, as follows: A. Iff active May 1,1979, See:1on XIII was amended by adding new paragraph (d) as follows: "(d) Effective May 1,

1979, if the benefit payable to a pensioner or surviving spouse under the General Electric Pension Plan is increased by a percentage in accordance with paragraphs 26.(a), (b) or (c) of Section XIV of that Plan, or would have been increased by a percentage in accordance with such paragraphs except for the fact that such pensioner or surviving spouse received a lump-sum settlement under the General Electric Pension Plan, the Supplamentary Pension or death benefit, if any, payable under this Plan :o such pensioner or surviving spouse on and after May 1,

1979 shall be increased by the same percentage. Any such increase shall not be reduced by :he percentage limi:ations specified.in See:1on IX." 3. Effective July 1, 1979: (1) The heading of See:1on III was amended to read as follows: "SECTION III. Amount of Supplementary Pension at or after Normal Retirement" (2) SECTION III (a) was amended to read as follows: "(a) The annual Supplementary Pension payable to an eligible employee who retires on or after his normal retirement i date under the General Electric Pension Plan shall be equal to the excess, if any, of: (1) the employee's Total Annual Retirement Income, over (ii) the sum of the employee's Annual Pension Payable under the General Electric Pensica Plan plus his Annual Estima:ed Social Security Benefit." i Ixhibit-3 l l t

(3) SECTION !!I (c) was amended to read as follows: "(c) If an employee continues in the service of the Company after attainment of age 70, his Supplementary Pension and any death benefits related thereto shall be determined in accordance with paragraphs (a) and (b) above as though the employee had retired on the first day of the month following the second to occur of (1) his attainment of age 70 and (ii) his youngest mandatory retirement age permitted by law. In any event, commencement of the employee's Supplementary Pension shall be deferred until his actual retirement." (4) SEC"' ION I7 (a) Amount of Supplementary Pension at Optional Retirement was amended to read as follows: "(a) The annual Supplementary Pension payable to an eligible employee who following attainment of age 60 retires on an optional retirement date under the General Electric Pension Plan shall be computed in the manner provided by Section III (a) (for an employee retiring on his normal retirement date) but taking into account only Pension 3enefit Service and Average Annual Compensation to the actual date of optional retirement." (3) SECTION V (a) Amount of Supplementary Pension at Disability Retirement was amended to read as follows: "(a) The annual Supplementary Pension payable to an eligible employee who retires on or after July 1, 1979 on a Disability Pension under the General Electric Pension Plan shall first be computed in the manner provided by Section III (a) (for an employee retiring on his normal retirement date) taking into account only Pension Benefit Service and Average Annual Compensation to the actual date of disability retirement but in the case of an eligible employee whose date of retirement precedes the first day of the month following his attainment of age 60 such Supplementary Pension shall then be reduced by 12::. (6) SECTION IIII Adjustment in Supplementary Pension Following Retirement is amended to add the following paragraph (e): "(e) If the pension benefit oc service credits under the General Electric Pension Plan are increased for a retired employee in accordance with paragraph 27. or 28. of Section XIV of that Plan, or in accordance with the opportunity made available under that Plan effective January 1, 1980 to make up employee contributions plus interest for periods during which the employee was otherwise eligible but failed to participate because of late enrollment or voluntary suspension, the Supplementary l i Exhibit-3 (cont'd)

= Pension payable to the employee under this Plan shall be recalculated to.take any such increase into account. For this

purpose, Section III of this Plan as amended effective July 1, 1979 shall apply.

Any change in the employee's Supplementary Pension shall take eff ect on the same date as the corresponding change under the General Electric Pension Plan." C. Eft'ective January 1,1980 (1) Section II(b) was amended in its entirety to read as follows: " Annual Retirement Income - For employees who retire on or after Januar7 1, 1980, or who die in active service on or af ter such date, an employee's Annual Retirement Income for each year of Pensiot-Benefit. Service shall mean the sum of the amounts j determitted by :ultiplying the relevant portion of the employee's Average Annual Compensation by the percentage shown'below. Portion of Average Annual Compensation Percentage Up to and including $25,000 1.50% Above $250,000 up to and including S350,000 1.45 Above $350,000 up to and including S500,000 1.40 Portion over $500,000 1.30 The employee's Total Annual Ratirement Income shall be determined by multiplying the sum determined above by the number of years of Pension Benefic Service completed by the employee at the date of his retirement or death, whichever is earlier." (2) Section IX(a) was amended in its entirety to read as follows: "Notwithstanding any provision of this Plan to the contrary, if the sum of: (1) the Supplementary Pension (before application of any reduction factor for optional or disability retirement l or a Survivorship Option, but after the 10 reduction in lieu of employee contributions) otherwise payable to an employee hereunder; e (ii) the employee's Annual Pension payabit under the General Electric Pension Plan; and (iii) his Annual Istimated Social Security 3enefit exceeds $5% of his Annuci Average Compensation, such Supplementary Pension shall be reduced by the nmount of the excess." Exhibit-3 (cont'd)

0 h i l l i l l (

h~.' , ' j.k Q c: T.* Q .~ f% SECURITIES AND EXCHANGE COMMISSION T

1. ^

I y-3<r Washington, D. C. 20549 t p._ FORM 10-Q 6,- -w-QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 1980 Commission file number 1-35 GENERAL ELECTRIC COMPANY (Exact name of registrant as specified in charter) As used herein the terms " Company" and " General Electric" refer to General Electric Company and its consolidated affiliates unless otherwise indicated by the context. New York 14-0689340 (State of incorporation or organization) (I. R. S. Employer Identification No. ) 3135 Easton Turnpike Fairfield. Conn. 06431 203/373-2459 (Address of principal Executive Offices) (Zip Code) (Telephone No. ) At September 30, 1980 226,662,110 shares of common ste;k par value of $2.50 were outstanding. ] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. l Yes X No l l

i l PART I. FINANCIA L INFORMATION Condensed Statement of Current Earnings Gsneral Electric Company and consolidated affiliates (Dollars in millions; per share amounts in dollars) (Unaudited) Third quarter Nine months ended September 30 ended September 30 1980 1979 1980 1979 Salss of products and services to customers $5 962. 6 $5 608,8 $18 040. 7 $16 332. Operating costs: Cost of goods sold 4 307.3 4 144.9 13 148.7 11 908. Selling, general and administrative expenses 1 142,6 953.2 3 296.4 2 845. 5449.9 5 098.1 16 445.1 l'4 753. Oparating margin 512.7 510.7 1 595.6 1 579. Othar income 135.4 121.0 432.6 370. Interest and other financial charges (77. 9) (64.4) (225.4) (186. Earnings before income taxes and minority interest 570.2 567.3 1 802.8 1 762. Provision for income taxes (209.8) (222,6) (693.7) (719. Minority interest in earnings of consolidated affiliates (2. 0) (3. 9) (6. 6) (16. Nct earnings applicable to common stock $ 358.4 $ 340.8 $ 1 102.5 $ 1026. Earnings per common share 1.58 $ 1.50 4.85 4.5 Dividends declared per common share 0.75 $ 0.70 2.20

2. 0 Average number of shares outstanding (in millions) 227.5 227.

9 ise Notes to Condensed Financial Statements (1) I

l Condensed Statement of Financial Position i General Electric Company and consolidated aff!!!stes (Unaudited) At September 30 (Dollars in millions) 1980 1979 Aseets: Cash 81287.4 $ 1 791.4 Marketable securitles 610.4 584.4 Current recelyables 4 452.0 3 831.5 Inventories: Raw materials and work in process $ 2127.4 $ 1904.7 Finished goods 937.3 916.2 thbilled shipments 260.9 3 325.6 305.5 3 126.4 Current assets 9 675.4 9 333.7 Investments 1 774.9 1 524.5 Property, plant and equipment Cost 10 387.1 8 940.7 Accumulated depreciation (5 178.8) 5 208.3 (4 683.2) 4 257.5 Other assets 1 221.4 1 003.0 Total assets $17 880. 0 $16118. 7 Liabilities and equity: Short-term borrowings 81137.1 $ 909.3 Accounts payable 1 248.6 1 201.2 Other current !! abilities 5 011.6 4 637.1 Current liabilities 7 397.3 6 747.6 Zeng. term borrowings 1 024.9 955.1 Other liabilities 1415.5 1 203.0 Total liabilities 9 637.7 8 905.7 Einority interest in equity of co.nsolidated affiliates '144.7 149.6 Preferred stock ($1 par value; 2 000 000 shares authorized; none issued) Common stock ($2.50 per value; 251500 000 shares authorized; 231 463 949 shares issued in 1980 and 1979) 578.7 518.7 J Amounts received for stock in escess of per value 656.2 656.5 Retained earnings 6909.7 6 083.8 ~d"ITCT 7 319.O Deduct common stock held in Treasury (247.0) (255.6) Total share owners' equity 7 897.6 7 063.4 Tota 111 abilities and equity $17 880. 0 $16 118. 7 See Notes to Condensed Finanefal Statements (2)

t - Ccndensed Statement of Changes in Financial Position Gsneral Electric Company and consolidated affiliates (Unaudited) Nine months endea September 30 (Dollars in millions) 1980 1979 Source of funds: From operations $1561.1 $144 5. 7 Increase in current payables other than short-term borrowings 259.4 623.4 Increase in long-term borrowings 111.8 10.4 Total source of funds 1 932.3 2 079.5 Application of funds: Additions to property, plant and equipment i 147.8 737.1 Increase in current receivables 805.4 543.0 I Dividends declared 500.4 464.9 Increase in inventories 164.3 123.0 Increase in investments 83.4 114.0 Reduction-in long-term borrowings 33.7 49.1 Other - net 142.2 84.7 Total application of funds 2 877.2 2 115.8 Not increase /(decrease) in cash, marketable securities and short-term borrowings S (944.9) (3 6. 3) Analysis of net increase /(decrease) in cash, marketable securities, and short-term borrowings Increase /(decrease) in cash and marketable securities $ (678.8) $ (87.3) (Increase)/ decrease in short-term borrowings (266.1) 51.0 Mt:EEEE*1 S (3 6. 3) See Notes to Condensed Financial Statements (3) 't

= - -. Notes to Condensed Financial Statements I The accompanying consolidated financial statements are unaudited but include all adjustments (consisting of normal recurring accruals) considered necessary by the Company to present a fair statement of the results of operations, financial position and changes in financial position. The condensed statements have been prepared in accordance with the instructions for form 10-Q and therefore do not include some information and footnotes necessary to constitute a complete and deta!!ed presentation in conformity with annual reporting requirements. The results of operations reported in the Condensed Statement of Current Earnings should not be regarded as necessarily indicative of the results that may be expected for the entire year. Management's Analysis of Statement of Current Earnings Third quarter 198D compared with third quarter 1979 Third quarter performance, despite a period of adverse U.S. economic conditions and a ten-week strike in Australian coal production, emphasized the strength achieved through the great diversity of the Company's operations. Strong earnings in export-related and longer-cycle business _es -- particularly Power Systems and Industrial Products -- and in the General Electric Credit Corporation more than offset some softness in shorter-cycle operations. Overall, operating margin dollars were slightly ahead of last year's thiro quarter, although the ratio to sales was depressed largely because of lower Australian coking coal shipments. The effective tax rate continued to be somewhat lower than a year ago because of the diverse mix of sources of income, as well as the impact of higher General Electric Credit Corporation earnings which are reported on an after-tax basis. Consumer Products and Services warnings for the third quarter of 1980, including those of General Electric Credit Corporation, were up slightly from the third quarter of 1979 In the consumer products area, earnings were down somewhat from a year ago on reduced shipments, particularly in major appliances and lighting products. Air conditioning produus sales and earnings were well ahead of a year ago because of the extended heat wave in many parts of the nation. General Electric Credit Corporation, the Company's nonconsolidated finance affiliate, reported considerably higher earned income on receivables, with an increase of 40% in net earnings to $33.4 million, compared with $23.9 million for the third quarter of 1979. In&strial Products and Components earnings were substantially ahead of the third quarter a year ago on somewhat higher sales. The improved earnings were led by operations serving industrial motor, non-residential construction, mining, and transportation markets. l (4) l l

Power Systems earnings were up sharply ft 2 Lue 1979 third quarter on good cales increases. Strong earnings improvements in steam turbine and gas turbine cperations more than offset a decline in power delivery operations. Technical Systems and Materials earnings were down from the 1979 third period en higher sales. Aircraft engines and information and communication systems sales and earnings were well ahead of last year, but engineered materials earnings were substantially lower than a year ago primarily as the result of depressed automotive t.nd other consumer-related markets. Foreign Multi-Industry Operations earnings and sales were up from last year's third quarter. Although not clansified in this segment, export sales from the United States continued to be significantly higher than in 1979. Natural Resources third quarter earnings were $42.4 million, down 225 from $54.1 million in the third quarter of 1979 because of reduced Australian coking coal shipments. An industry-wide dispute by workers over Australian government tax policies caused a ten-week work stoppage in coking coal operations during the quarter. These results were partially offset by improved earnings from copper, oil and gas, i and Brazilian iron ore operations. First nine months 1980 compared with first nine months 1979 Strong earnings in export-related and longer-cycle businesses - particularly Power Systems and Inaustrial Products and Components -- and in the General Electric Credit Corporation more than offset some softness in shorter-cycle operations. Over-all, the operating margin rate was lower than a year ago, reflecting unsettled economic conditions and the cost-price squeeze. The effect of this lower margin rate was more than offset by somewhat higher operating margin dollars from higher sales, increased Other Income from both operating and non-operating sources, and by a lower effective tax rate. Consumer Products and Services sales were somewhat higher but earnings were down principally because of inflation-driven cost increases and lower volume in some product lines. However, housewares and audio products sales and earnings were higher. In addition, General Electric Credit Corporation reported earnings for the first nine months of 1980 of $86.0 million, 32% ahead of the $65.3 million for the first nine months of last year. l Industrial Products and Components earnings were well ahead of the first nine months 'a year ago on higher sale. The improved earnings were paced by operations serving transportation systems and contractor equipment markets. i i Power Systems earnings were up considerably from the first nine months of 1979 and sales were higher. Good earnings in steam turbine operations more than offset a decline in gas turbine and power delivery operations. l l l l (5) 4

j Technical Systems and Materials sales and earnings were ahead of the first i nine months of 1979. Aircraft engines and information and communications systems sales and earnings were well ahead of last year, but engineered materials earnings were lower than a year ago primarily as the result of depressed automotive and other consumer-related markets. Foreign Multi-Industry Operations earnings and sales were improved from last year's first nine months. Although not classified in this segment, export sales from the United States were significantly higher than in 1979. Natural Resources earnings for the first nine months of 1980 were $169.2 million, up 4% from the $162.1 million for the comparable 1979 period. i Third quarter 1980 compared with second quarter 1980 Third quarter 1980 sales and earnings were $235 million and $44 million lower, i rospectively, than sales and earnings in the second quarter. Consumer Products and Services sales were up slightly and sales in all other sectors were down Sales decreases were primarily due to plant vacation shutdowns, the ten-week Australikn coking coal i work stoppage and depressed engineered materials markets. Consumer Products and i Services earnings were up primarily because of somewhat higher major appliance and television sales and increased earnings of the General Electric Credit Corporation. The earnings of all other sectors were down due primarily to lower sales. i General Electric Credit Corporation Required financial information of General Electric Credit Corporation, a wholly-owned nonconsolidated finance affiliate, is included in the Quarterly Report (Form 10-Q) for the quarter ended September 30,1980 filed with the Securities and Exchange Commission by General Electric Credit Corporation and is hereby incorporated in and made a part of this report by reference. j i i f i F 1 l (6) i i N

.J. PART II. CTTHER INFORMATION Item 1. Legal proceedings On October 9,1980, the United States Environmental Protection Agency filed an administrative action against General Electric Company alleging that Company transformer repair operations in Denver, Colorado did not comply with regulations under the Toxic Substances Control Act relating to the storage or disposal of PCBs. The complaint seeks to impose a penalty of $10,000 for the alleged violations. The Company has filed an answer denying the substantive provisions of the complaint and has requested a hearing. l On October 17, 1980, General Electric received a letter from the United States Attorney for the Southern District of Indiana advising that the Federal Government had brought a law suit against the owners and operators of a chemical dump site at Seymour Indiana in order to compel a cleanup of the site, which it is claimed presents an imminent and subr,tantial endangerment to the health and environment in violation of Section 7003 of the Resource Conservation and Recovery Act. The setter asserts that under this statute generators of the waste material at this site, including General j - Electric, face legal liability for the cost of the site cleanup which is stated in the letter i to be approximately $12 million. The letter solicits General Electric's voluntary con-tribution to the cost of the cleanup. The Company is studying the matter. Generr.1 ElectritCompany and the Department of Environmental Conservation of the State of New York (DEC) executed an Agreement on September 23,1980,under which General Electric Company has agreed to fund certain remedial actions at seven landfills in the upper Hudson River valley which had received industrial wastes from General Electric plants. At four of the sites General Electric will perform engineering evaluations and propose a remedial plan to address environmental problems at the i site. If the plan is approved by the DEC, it will be implemented at the expense of General Electric, and General Electric will monitor the site for thirty years. General Electric will also have responsibilities for any necessary supplementuy remedial programs and for additional monitoring. With regard to three other sites which re-ceived industrial wastes from a number of companies, General Electric will perform an engineering evaluation and propose an appropriate remedial plan, with General Electric assuming a proportionate share of the cost of the remedial plan and of sub-sequent monitoring of the site. In connection with this matter General Electric has also agreed to reimburse the State of New York in the amount of $320,000 for costs incurred in the removal at another site of soil containing PCBs. (7)

} SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. General Electric Company (Registrant) 11-11-80 /s/ Thomas O. Thorsen Date Thomas O. Thorsen, Senior Vice President - Finance 11-11-80 /s/ James J. Costello Date James J. Costello, Vice President and Comptroller I (8) l __wy.. ,-,p-.-

1 1 l l i ) 1 4 ENCI.050RE 3 ' REVISED PAGES FOR ATTACHMENT F Letter, B. Wolfe (GE) to R. Cunningham (NRC), dtd 1/12/81 e 1 l f 1 l l l

ATTACHMENT F OPERATOR TRAINING AND CERTIFICATION PROGRAM MORRIS OPERATION INTRODUCTION In accordance with requirements of Part 72.92. Title 10. Code of Federal Regulations (10CFR72.92), this attachment contains a description of the program for the training and certification of Operations Technicians and Operations Supervisors at General Electric's Morris Operation, an independent spent fuel storage installation (ISFSI) near Morris, Illinois. The program description includes identification of the training methods employed, the topics covered, the personnel included, the means of implementation and the means of documentation. APPLICABILITY This program provides for the training and certification of all operation personnel who may be required to perform safety-related activities, including: o Operations Technicians o Operations Supervisors o Operations Supervisor relief personnel These personnel are referred to by use of the term, " operator" in the following text. PHYSICAL REQUIREMENTS As a prerequisite to acceptance in the training program and for recertification a candidate must successfully pass a medical examination designed to assure that the candidate is in generally good health and is otherwise physically qualified to safely perform assigned work. Minor correctable health deficiencies - - such as eyesight or hearing - - will not pe_r se prevent certification. The medical examination meets or exceeds requirements of standard ANSI N546-1976, "American National Standard - Medical Certification and Monitoring of Personnel Requiring Operator Licenses for Nuclear Power Plants."

F-4 training subjects to a degree of detail sufficient to provide reasonable assurance of competent operation. Where applicable, walk-through examination includes'fiot only detailed questions, but actual demonstration of operation of equipment and systems when practical. Both normal and off-normal operation knowledge is tested. Passing grades must ce attained on all written examinations and the walk-through examination must be passed for certification eligibility. When written testing or the walk-through examination indicates the need for further training, retraining in the indicated subject matter is conducted on an intensive basis. Retesting is then perfomed and must be passed prior to certification. The job performance statement tabulates job activities performed by an operator, experience in terms of operating time, and an indication of speciffe activity or skill areas where retraining is indicated. Job performance statements are maintained by supervisors. Facility Chances In the course of operation of an Independent Spent Fuel Storage Installation, equipment and operational changes may occur. In order to maintain knowledgeable operators, such changes will be introduced into training materials. The train-ing materials will be reviewed and revised when required to reflect such changes as part of the biennial training and recertification process. Also, when such changes in equipment operation or other operational aspects are implemented, the Standard Operating Procedures (50P's) are updated and certified personnel are alerted to such S0P changes. CERTIFICATION After successful completion of training and proficiency testing, Operator Certi-fication'is granted. Normally, a new employee will undergo the Operator Training and Certification Program and be certified within a year. Af ter initial certi-fication, personnel must be retrained, retested and recertified every two years. Completion of the Operator Trainiag and Certification Program means that a certified operator is fully authorized to carry out assigned responsibilities. Management personnel who supervise the certified operators also must be certified.

F-5 o f PROGRAM RESPONSIBILITIES The Manager, Plant Operations is delegated by the Manager, Morris Operation, authority for administration, implementation, and maintenance of the Operator Training and Certification Program. The Manager, Morris Operation may designate other individuals to assume a role in the implementation of the Program, particularly in the area of testing and determination of an individual's pre-parednes,s for certification. The classroom and on-the-job training is adminstered by supervisors, engineers or training staff members who are referred to as " training officers". Such training officers are certified personnel who have sufficient experience, education, and training to carry out these duties. Preparation for the Training Officers may include their training by other instructors or by non-certified plant personnel in their areas of expertise. The Manager, Morris Operation will designate the certifying officer (s). The qualifications of the certifying officer include a thorough knowledge of the facility, especially the equipment operation facets. A technical degree or equivalent technical experience is a requirement. Five years of industrial j experience with three years in the nuclear field is considered minimal for a certifying officer. PROGRNi DOCUMENTATION Records are to be maintained for certified (or recertified) operators for a minimum of five years. Such records include dates and hours of training and i l other documentation on training subjects, information on physical requirements, job performance statements, copies of written examinations, information pertaining i to walk-through exams, retesting particulars, and a listing of certified (or recertified) operators. l I i 4 l i i

ENCLOSURE 4 REVISED PAGES FOR ATTACHMENT G Letter, B. Wolfe (GE) to R. Cunningham (NRC), dtd 1/12/81

NEDO-21326C3 January 1981 7 3 2.1 History of Radioactive Material Concentration De history of r 41oactivity in the basin water is shown graphically in Figure 7-1.2 ne general trend is a gradual increase in concentration with increasing fuel loading and time, culminating in plateaus and abrupt decreases. De plateaus may be caused by a reduction in the source, or establishment of a steady-etate condition between radioactive material addition and removal. De decreases are i due to accelerated removal of radiocesium and radiocobalt by the use of filtration and special ion exchange material in the basin water filter. ) 7 3.2.2 Contami nants j l 2e principal dissolved radioactive contaminant in the basin water has been j fission product cesium with concentrations ranging up to 10-2 C1/ml. A means of l cesium removal has been found that makes reduction and control of this cen mm4 9mnt e relatively simple. For example, over a 10-week period in 1974, the radiocesium I concentration was reduced to ene-third of that at the beginning of the period. De basin water inventory was correspondingly reduced from about 29 to 11 Ci. In 1975, during a 4-week period, the radiocesium concentration was reduced by ) a factor of six and the basin water inventory reduced from 14 to 2 3 C1. At the end of the latter period, the radiocesium concentration was 0.0009 microcurie per m111111ter.2 The basin water contamination limit is 0.1 uCi/ml. ) 3e ability to dramatically reduce the amount of activity in the basin was the result of extensive studies and tests in which an incrganic molecular sieve medium, j Zoolo's,3 was used to selsetively remove cesium. Dese tests demonstrated that Zeolon-100 could successfully be added to the Powdex system and remove about two-thirds of the radiocesium per Powder charge. By routinely using Zeolon and adjustin3 Powdex replacement frequency, concentrations are effectively controlled.

• n addition to radiocesium, the radionuclide contributing most significantly to basin water contamination is cobalt-60.

Concentrations of this nuclide in the basin water (typically,1 x 10-4 C1/ml) are attributed to corrosion products on the surfaces of the fuel bundle which are released to the water, principally during fuel handling. Nor-nal filtratien and ion exchange reduces the cobalt concentrations without special effort. 7-6 w

NEDO-21326c3 January 1981 9.4.3 1 Safety Evaluation and Project Pl=aa4a! When a major modification or project is proposed, a study of the concept develops technical criteria and preliminary specifications, as well as ottier data necessary for a preliminary safety evaluation (1, Figure 9-3). " sis evaluation is performed by a function within SFSO (Licensing and Transportation) that is separated frem organizatiemal components directly involved in the proposed project activity. Engineering data and recommendaticas from other SFSO components are considered in this evaluation, including recommendations from the Plant Safety Committee. The evaluation determines the need for licensing action, as well as special studies or other evaluation of the proposed activity. The technical criteria, safety evaluation, and other data (such as incoming fuel scheduling, sanpower availability, etc.) form the basis of a project plan developed by Fuel Storage Projects and coordinated with the Horris Operation. In some cases, the project will be executed at Morris Operation without further participation by Fuel Storage Projects. The plan is presented to management for approval. When all administrative and technical requirements have been satisfied, a project authorization is issued by Manager - SFSO. 9-11a

NEDo-21326c3 January 1981 9.4 3 2 Project Design Activity Nuclear safety related and major design projects are conducted by Fuel Storage Projects, with support furnished by Morris Operation for those requirements that can best be sr.tisfied at that location. Design activity (2, Figure 9-3) j results in established functional classifications, specifications, dmwings, j and other documentation, all subject to an intensive review. Each document i is reviewed by all appropriate organizations within 3F30, including Morris Operation, with requirements that each organization approve the document prior to issue. The various fe4tures of the design are also subject to engineering reviews, including design verification reviews. Throughout the design activities, Quality Assurance, Programs personnel monitor and check compliance with the Quality Assurance Plan, especially the inspection and monitoring of vendor and centractor activities. 9433 Licensing Activity Depending upon the centent and nature of the project, Licensing and Trans-portation may provide an environmental report, final safety analysis report, and special safety studies (3, Figure 9-3). Special safety studies may be requested by Fuel Storage Projects, by Quality Assurance Programs or by other management including Manager - Morris Operation. Management and personnel at Morris Operation provide contributiens to licensing activities, especially in health physics and environmental fields. Licensing activities continue as necessary to obtain ngulatory approval of changes or modifications wnere required. 9 4.3 4 Project completion In the case of a major project, an engineer will be assigned project responsibility for construction, installation, testing, startup, and related activities (4, Figure 9-3). The Manager - Morris Operation retains full responsibility for the safety of all other activities involving receipt, transfer, or storage of nuclear fuel or other radioactive materials, including operation of the facility during modification. j 9-13

NEDO-21326C3 January 1981 11.3 STRUCTURES, SYSTEMS AND COMPONENTS IMPORTANT TO SAFETY Structures, systems, and components important to saf ety are defined in 10CFR72.3(w) as those features of the f acility whose function is to (1) maintain the conditions required to store spent fuel safely, (2) to prevent damage to spent fuel during handling and storage, and (3) to provide reasonable assurance that spent fuel can be received, handled, stored and retrieved without undue risk to the public. 11.3.1 Maintaining Conditions for Saf e Storage The conditions required to safely store spent fuel at the Morris Operation are those which maintain the normal fuel storage environment and the safe configuration of fuel elements in storage. Maintaining the conditions for saf e storage of spent fuel at Morris Operation is accomplished by the following structures, systems and components: a. Fuel storage basin including the concrete walls, floors, expansion gates, and the basin liner - These structures comprise the principal I element in maintaining conditions for safe storage of fuel and in isolating basin water from the environment. 1 b. Fuel storage system including supporting grids and associated components, and basket assemblies - This system is the principal element which maintains the fuel in its safe configuration. c. Unioading pit doorway guard - This device prevents the fuel baskets from overturning and discharging fuel elements into the unloading basin where a critical array might be formed. It is a secondary I element which would maintain fuel elements in a safe configuration. The storage basin structures were designed and fabricated under the quality control 1 measures established by General Electric for the MFRP, as described in Section 11.2 11-2

NEDO-21326C3 January 1981 The fuel storage system and the doorway guard were designed, fabricated, and in-stalled under the current quality assurance plan (Appendix B.8). e 'Even under the worst credible circumstances, the water level and characteristics of the basin water change slowly. Therefore, components and systems associated with maintaining water level, temperature and quality are not important to the safety of stored fuel or the health and safety of employees or the public. For example, such systems as the water cleanup system could be damaged or be inoperative for extended periods without affaccing the basic safety of operations. The non-crucial natures of these systems are reflected in proposed technical specifications and elsewhero in this report. 11.3.2 Preventing Damage to Fuel Damage to fuel is least improbable during fuel handling. Fuel is handled when bundles are removed from casks and placed in storage baskets and when the baskets are moved to storage locations and vice-versa. The components which prevent damage to fuel during these operations are a) The fuel bundle grapples b) The storage basket yokes 11.3.3 Providing Assurance of No Undue Risk to the Public Analyses of spent fuel storage operations, including credible accidents as well as normal and postulated of f-normal events have shown no credible event or combination of events posing undue risk to public health and safety. Only the basin structure can be considered as directly related to public health and saf ety and even a rupture of this structure would not involve undue public risk (see Appendix A.13). 11-3

~ o NEDO-21326C3 Jtnuary 1981 Radiological safety considerations for plant personnel are provided by shfelding, radiation detection and alarm systems and by administrative procedures to maintain exposures to radiation as low as reasonably achievable. As all subparts work to-gether to limit radiation exposure to ALARA, no individual part is deemed a principal component or >ystem important to saf ety. 11.3.4 Summary i 1 The structures, systems and components important to saf ety are 1. The fuel storage basin, including concrete walls, floors, expansion gates and the basin liners. 2. The fuel storage system, including supporting grids and associated components and basket assemblies. 3. The unloading pie doorway guard. 4 The fuel element grapples. 5. The storage basket yokes. 6 11-4 -}}