ML20153B256

GE 1987 Annual Rept

ML20153B256
Person / Time
Site:	07000754
Issue date:	12/31/1987
From:	Bossidy L, Cunningham G, Welch J GENERAL ELECTRIC CO.
To:	Cunningham R NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
References
29123, NUDOCS 8803220011
Download: ML20153B256 (64)

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8803220011 871231 PDR ADOCK 07000754 C

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1 RnancialHighEphts General Electric Com[uny arxl consolidated affdiates o

(IMiar amounts in millions; per-share amounts in dollar s) 1987 1986 1985 Operating results Revenues

$ 40,515

$ 36,728

$ 29,240 Earnings before extraordinary loss and cuinulative effect of accounting changes 2,119 2,492 2,277 Net earnings '

2,915 2,492 2,277 i

P\\er share Earnings before extmordinary loss and cumulative effect of accounting changes S

2.33 2.73 2.50 Net earnings 3.20 2.73 2.50 Dividends declared 1.325 1.185 1.115 51arket price range 66 % 38 %

44 %-33 %

36 %-27 %

Atyearend.

Totalcapitalinvested

$ 22,271

$ 21,462

$ 15,847 Sharc owners' equity 16,480 15,109 13,671 llorrowings as a percentage of total capital 25.1 %

28.79'e 12.9 %

ReturnforIheyear

- On avemge share owners' equity 18.5 %

17.3 %

17.5 %

On average totalcapitalinvested 14.7 13.9 16.2 See notes I and 15 to the financial statements for information ainut accounting changes and extraordinary loss. All share data in this reinrt reflect the 2-for.1 stock split in April 1987. Financial information in this report indudes RCA Corpora-tion resuhs fromJune 1,1986 unless stated otherwise.

Contents 1 Operationalliighlights 2 letter to Share Owners 5 Technology liusinesses 1I Services ilusinesses 17 Core 51anufacturing Ilusinesses 22 Supixnt Operations 23 Financial Section 52 Iloard of Directors 55 Afanagement 59 Corporate Infonnation

OperatibnalHighlights Important developments around the globe in 1987, including those below, reinforced GE's continuing strategy to be a world leader in its technology, services and core manufacturing businesses.

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CGR acquired Plastic carbodyintrodaced l

To enhance its glolxd competitiveness in A cooperative effort hetween GE Plastics medical sy stems markets, the Com[xiny amt inlW of West Germany created a a(quired the CGR nxxiical equipment breakthrough in automotive technology business from Thomson, s.A. of France with a new roculster that features all ver-as part of GE's disposition ofits con-tical panels made of engineering thermo-sumer electronics business.

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GE Financial Services continued to ex-Ringing up the cuttain on the new tend its lxiumlaries, acquiring fleet leas-CF.\\f 5ti-5 engine in Europe was but one ing ami auto auction units in the United highlight for GE Airmdt Engines, whi(h States ami opening foreign man Lets for addedJa]xm Air 1.ines aml Notthwest l

its finaming. investment banking aix!

Aiilines to its substantial list of connner-I remsurance at tivines.

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TO OurShare Owners Thmuson,S.A.of Fmnce. In this tmnsacions acquired CGR, a European-based medical diag-nostic imaging business, and cash from Thomson; in return, Thomson ieceived GE's consumer electronics business.

The eeents ofl987 reafTirmed our beliefin the This move greatly strengthened our global strategy >uur Company has followed throughout hiedical Sy stems business and allowed us to divest the 1980s. GNP growth remained modest; global a business that was not strategically imponant to competition continued to intensify; large transna-us. Thomson, which views consumer elecounics as tional alliances became a key ingredient to success central to its strategy, strengthened its ability to throughout the world; and the inextricable rela-compete globally in this industry. In this win-win tionship of the world's economies and financial tmnsaction, both companies became stronger in markets was clearly demonstrated, businesses they feel are key to their futtne.

Against this backdrop, GE's 1 I key businesses all Adding CGR's strength in Europe and Latin performed well and, more im ponantly, demon.

America, particularly in x-my products, will com-strated that GE is well-positioned for strong earn-piement GE's already strong engineering, mar Let-ings growth in any reasonably good economic ing and manufacturing operations in the United scenario.

States and inJapan, where we hold a 75% stake in At the beginning of the decade, we said the Yokogawa hiedical Systems, world economy w ould be chamcterized by slow er in the exchange with Thomson, we built uixm growth with stronger global competitors going decades of globalization initiatis es by several other after a smaller pie. That analysis became the cor-GE businesses that have long realized that a strong nerstone of what we set out to do. It led to a strat-market presence in the major areas of world com-egy of being number one or number two in mar-merce will be a decisive advantage in the intensely Let share in large key businesses that we grouped competitis e and highly concentrated markets of into technology, services and core manufacturing, the 1990s.

Within that framework, we sold or exited busi-nesses and pnxluct lines that w ere not centml to our strategy, and became much more cost-efTectis e Many ofourfastest growing businesses have had in those that were by consolidating facilities and by their growth fueled by innovatis e, transnational investing $16.7 billion to develcp new products alliances where cach panner's unique assets are and improve productivity. Our financial strength shared in return for greater world maiket access.

allowed us to do this in ways that were fair and GE Aircmft Engines, for example, has used its compassionate to the employees involved. Long 16-year-old pannership with SNECh! A of France notification periods, equitable sevenmce packages, to help forge a pre-eminent position in world mar-retraining and placement centers were used when kets, winning the leading share of the world's large business realities caused us to close plants.

commercial engine orders in 1987. GE Plastics, As we sold or exited businesses not central to with neady halfits sales outside the United States, our strategy, we acquired othen that would either has grown 169 annually over the last five >can by improve the competitiveness of an existing key GE developing applications in one part of the world, business or would stand strongly alone in a prom-and then multiplying their value through global ising market in which we want to participate.

technology, manufacturing and mai keting organi-In our view, a key criterion of strength is being zations.Our Factory Automation business,which number one or number two in market position; struggled for years by itself to fulfill a dream of and number one or number two, for us, refers to world leadership, now sees that dream becoming a uor/d market position. In 1987, we continued to reality via GE Fanuc Automation Corporation, a establish strong global positions for our businesses 50-50 joint venture with FANUC Limited ofJapan through acquisitions, cross-sourcing pannerships, that includes subsidiaries in Europe, Japan and the asset exchanges and other arrangements with United States.

Asian and European companies whose strengths Actions like these are under way in virtually and assets complement our own.

every GE business. Each business understands cleady that an imponant road to grow th is amuuammum through glolxdization and through sharing indi-Of GE's strategic moces in 1987, t he one that vidual strengths suc h as market au ess, technology best demonstates our global business leadei ship and capital availability, in this "share-to-gain" ap-direction is the busi' ness exchange we made with proa h, our businesses are expanding produ(t 2

> We have shifted our camings mix to where we now obtain about 759 of our key business earn-ings from faster growing technology and senices g,.g m businesses compared with about 509 in 1980,

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By any measure,1987 was a very strongyear foryour Company, All of GE's key businesses met

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fj f-k[ 6 p g v... C '.}.1 their business plans. And, fiar the third year in a N2d 9. JU 31:" &~ E d '; V row, sinually all of our key businesses increased T+mg;h". i.g.*: f.WkOg gy;. Q W:P-Overall, net earnings were $2.915 billion, an in-

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crease of 179 from S2.492 billion in 1986. Earn-

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1 5 { 'iig ings per share were S3.20 for 1987 compared with

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$2.73 for 1986, reflecting the April 1987 stock

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' 4/.i split. In 1987, the Company had two aucunting

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changes which resulted in one-time net earnings

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gains of alxmt S720 million. These gains were l

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about $750 million af ter taxes. Thus, our 1987

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unusuld items, but the restructuring will enhance

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GE's competitiveness in 1988 and beyond.

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Sales for 1987, the first full yearin which the

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M RCA businesses are included,'were $39.31 billion,

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'g-up 129 from 1986's $35.21 billion.

We again ended the year in excellent fmancial s

condition. Cash, marketable securities and funds held for business development aggregated about

$2.8 billion at December 31,1987 compared with

$2.3 billion a year earlier. GE's shon-and long-tenn debt, which canies the highest credit ratings, i

U'"v'd '" * 'i" "f 25' l "f '"'"1 P ' ^i' 0"""

i Gairman and %ief becutive Bossidy(center), Vice Uair-from 28.7% at the end of 1986. Return on share Officer John E Welch, Jr.

man and hecutive Officer (right), Vice Gairman and h-Edward E Hood. ir. (left),

ow ners cquity improved significantly, to 18.59 ecutive Officer Lawrence A from 17.39 for 1986. Measurements of capital ef-ficiency such as return on investment and working lines, opening new markets, becoming more com-capital turnover also were improved.

petitive in existing markets, and axlucing the in-Our commitment to research and development vestment and time it takes to bring pnxlucts to cus-remained strong. R&D expendhures w cre $3 bil-tomers and potential customers.

lion. In February 1987, GE donated the RCA Dasid Sarnolf Research Center in Princeton, N.J.,

l summmmmmi to SRI international and made a five-year, S250 During the past secen years, musistent applica.

million commitment to fund researc h there. This tion of GE's strategy has pnxluuxl consistent move presened Samoff Labs as one of the na-grow th for our investors:

tion's foremost researc h centers, a position that

> Eamings hase risen 109 a year mmpounded might have beenjeopardized had we nied to com-l since 1980, about 409 faster than the GNPmer bine it with GE's existing researc h operations.

the ume period and uiple the rate of growth of Expenditmes for plant and equipment dunng the S&P 100 mmpanies.

1987 wcre S1.8 billion, with significant capacity

> Our stoc k, thiough appicciation and yield, has and pnxluaisityimestmentsin Aircraft Engines, grown 199 a year mmpomated.cs en with last fidi's Plastics, l.ighting and Applianc es.

l man Let mnution, sersus i IG for the S&l'-100.

The major mno ibutors to 1987's earnings 1

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growth were Aircraft Engines, Financial Senices, authority has been delegated downward. Thus, 51edical Systems, NilC mxl Plastics.

the bureaucratic paraphernalia that often slows Adding to our internally generated growth is aixi impedes communications aix! discourages the our reconi with acquisitions. Several large recent innovator and the risk-taker has been swept aside; acquisitions -[hr example, Employers Reinsur-in its place a faster-moving, more action-oriented ance, NllC aix! RCA - have provided net addi-anxi personally more s.itisfying environment has tions to our earnings :n their first year of GE own-taken shape. We have removed,in addition, the enhip aixi have added synificantly since then.

saddle of a cor}x> rate bureaucracy from the backs Kidder, Pealxxly,80% of which was acquired by of our businesse.ux! have encouraged them to GE in 1986, had some dilliculties in 1987, indud.

run in directions, and at speeds, they clmose -

ing admission by a lbrmer employee to securities aixi nm they have.

violations that occunbl prior to GE's acquisition; a With the reduction of"management" and the subsequent sctilement with the SEC; anxi the ef-dismantling of bureaucracy, leaders have moved fects of stock ami lxnxi market volatility. Kidder, quickly to the front, creating a vision for each busi-Pealxxty was a strong contributor to GE's 1986 ness and aniculating that vision so cleady and earnings, but the 1987 difficuhies put Kidder's compellingly and consistently that an entire organi-contribution to GE at alxmt breakeven Ihr the first zation um rally around it and turn it into reality.

18 months of ownership. Kidder is taking the deci-Iradenhip of that caliber is abundant in this sise steps needed to weather turbulent times, and Onnpany aixl we see it shining from deeper and it remains an im[xntant pan of our Financial Sen-deeper in the structure of each of our businesses.

ices business.

Communication, above all other factors, is driv-We bas e had a g<xxl trixk record with major ing this progress. We will never be satisfied with acquisitions; and, although we have the resources our perfonnance, but we are proud of the gains fbr another, we have no set timetable to do one.

we are achieving. Communicition, Ihr us, is more Our past acquisitions were successful because they than newsletters and speeches and videotapes. It were a fit with our long-tenu strategy. We will con-means sharing all the facts, with all the people, all tinue to be selective, knowing that when the right the time. It is, we find, a simple concept but one oppn1 unity presents itself, we have the financial requiring patience and persistence to imbed in strength and management depth to act quic kly.

the cuhure.

Our businesses are on the mos e -driven by people who talk, listen and share with one another, Our outlookfor GE businesses in 1988 is optimis-Ibrging conunitments that indude everyone. For tic. While the worldwide collapse in stock mai kets those businesses individually, and for the Gun-in the last quaner of 1987 was of concern, we be-pany as a w hole,1987 was a tenific year. We con-lieve that the directions our management team has tinue to believe your Onupany hr a future un-been emphasizing-agility, quicker respmse to matched anywhere in the world. And the people markets, globalization - will sen e G E well during of GE remain committed to seizing that future.

this period of change and uncenainty. Your Com-l pmy is positioned for strong earnings giuw th in l

any reasonably g<xxl economy. We made a 1986 l

prediction of two-year double-digit earnings I

giowth, given approximately 2-3% GN P growth.

l We have achieved that growth in 1987 and, given John E WelchJr.

l about the s;une economic scenario, we're confident Chainnan atxt Chief Executive Ollker I

we can do it again in 1988.

Your Company has a vitalhy, a sense of confi-I'"""'" A I5"*'".IF dence, a bias for anion ihat even the most. ptimis-Vice Chainnan and Executive OITicer tic of us could not envisionjust a iew yean ago.

The sharing, open, adaptive cultuie we have wm ked,o hard to grow is well-suited to ihe ever

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more complex woild we face.

None of this has been bmught alxmt by more manageinent, but rather by /cu management.1.ay.

Edward E. Ihxx1,Jr.

cis have been peeled away, and with them the Vice Chainnan and Executive Ollicer reviews ami the filteis have also gone. Appmval February 12,1988 4

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r studies of a new medium-si/ed aircraft to be intro-From ideas and technology come solutions.

duced in the 1990s. When put into commercial lly mixing ideas with technology, we base built sen ice, the UI)F is expected to save airlines up to a reputation for creating solutions for our cus-109 in fuel costs over current tm bofan models.

tomers-solutions that provide real benefits for SN EChl A, the French aircmft engine manufac-individuals, mmpanies and govenunents; solu-tm er,is a 359 partner in the UI)F program.

tions that meet axlay's needs and address tomor-While the Ul)F remains an imix rtant program row's expectations.

for the future, the Company's CF6 and CF5156 This approach -- providing solutions instead of f amilies of engines continued to gain widespread merely selling pnxtucts - has helped make GE a popularity in 1987 among commercial airlines.

world leaderin:

The CF6-80C2 engine, for example, captured

> Aircmft Engines almost 659 of available 1987 orders for the large

> Aerospace wideixxty aircraft it is designed to power. Japan

> Plastics Air 1.ines, which had not purchased a GE-1x>wered

> 5tedicalSystems aircraft in 30 yean, chose this engine during the

> Factory Automation ycar to power its new four-engine llocing 7-17s.

American Airlines,in the largest single aircmft en-ummmmmms gine order es er placed with GE, will use 80 of GE Aircraft Engines is now the world's leading these engines to power its new fleet of Ilocing 767s supplier ofjet engines.

and Aiibus A300s.

Unparalleled gnuth over the past live > cars has Other major onlers in 1987 from such caniers moved GE ahead ofits competition in commercial as Air Fr;mcc, Thai International, Alitalia, and military aircraft engine markets with total or-Canadian Airlines Intemational, Wardair and ders passing $8 hillion in 1987. That growth comes QANTAS helped boost the value of CF6-80C2 as a direct result of GE's commitment to customers orders since the engine was first introduced in rellected in advanced engine technology, pnxtuct 1983 to more than S t.5 billion. Expons account quality and customer supixot.

for almost $3.8 hillion of that total.

A prime example of GE's technology leader-CFA! International, ajoint company of GE and ship: the UI)F" engine. This res olutionary power SN EC.\\l A, received one of it s largt st orders ever 4

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Astro Space techmcran Crarg most of the urban areas m Wiey prepares the antenna Western Europe It is the first range for testing of the new communications satellite GE Astrad commumcations sat has budt for the European 5

cllite bemg budt for Societc market L

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l when Northwest Aiilines picked the recently intro-duced CFAI56-5 engine for its new fleet of 120 Aerospace combines the operations of GE Aen>-

Airbus hxlustrie A320s and A310s.The mder, space and RCA Aerospace and Defense, which to-with a potential sales value of about $1.25 billion, gether make GE one of the lan gest and most diven-marks the first time Northwest has selected a GE sified aerospace manufacturers it, the wodd.

or CFM engine. Other major CF.\\156 orders in GE Aerospace, Ihr example, hoHs a number 1987 came from Ansett Airlines of Australia, one or number two position in two-thirds ofits Lufthansa, Southwest and limathens.

35 dilferent pnxtuct lines - all of w hich depend Building on its success with CFM, the Company incicasingly on advanced electronics technology.

formed other alliances in 1987 with Garrett Tur-It is a leader in such areas as simulation visual sys-bine Engine,Textron 1.ycoming and Alfa Romeo tems, high-performance military aircraft controls to develop small mxl medium-sized engines. In and automated test systems.

another agreement, Ruston Gas Turbines of Eng-RCA Aerospace and Defense is a leader in ra-land will pnxiuce components for G E aircraft en-dar, satellites ami surface ship sonar. h also is the gines and will strengthen GE's position as a sup-developer of the Aegis fleet air defense system for plier of aircmft engine derivatives for ship the U.S. Navy, which commissioned four more propulsion and industrial applications.

Aegis-equipped cruiseis in 1987.

On the military side, GE delivered its first Fi 10 Key developments during the year for these fighter engines to the U.S. Navy for use on the aerospace businesses included the installation of F-14 and F-16N aircraft. In addition, the Fl10 solid-state mdar sptems in Saudi Ambia, Canada, continued to win a substantial share of U.S. Air South Korea and Taiwan and the launching of Force orders in competitive bidding ihr F-16 four new satellites. The C<nnpany has placed more fighter engines. Egy pt and Bahrain selected the than 150 satellites in orbit for communications, F110 to power their new F-16 fighters.

meteorology, s(ience or defense purposes and cur-GE also won 70% of U.S. Navy orders for F 101 t ently has 53 more in design, assembly or test.

engines in the first year of second-s<.urce competi-Other kcy achievements in 1987 were the devel-tion for this GE-developed engine. In addition, the opment of full-authority digital engine controls in Navy chose a derivative of the F10i forits new ajoint sentme with GE Aircraft Engines ami the AdvancedTactic;d Aircraft.

application oflan;e-screen liquid crystal displays During the year, GE ran the XF120 engine for Ihr aircraft ox Lpits. The displays were developed the first time. This engine is designed to power the in ajoint cf fint with the Company's Research and new U.S. Air Force Advanced Tactical Fighter.

Ik velopment Center.

l 4

Christened Princeton in 1987 ceremonies at I:rgalls Ship-buddingin Mississippi this CG59is the 13th U.S. Navy cruiser to be outfitted with the Company's Aegis fleet air defense system and the first toincorporate the improved AN/ SPY 10 radar array (be-hind the orange shielding). GE is the prime contractor on the

! - e Aegis systern for US cruisers and destroyers m

e L

8

The biggest developments ia 1987, however, sion than metal. Already a leading supplier of were contract awards to GE for more than S2 bil-high-perfonnance plastics f or automotive oump-lion in space and submarine prognuns. NASA ers, dashboards and other parts, GE Plastics is pic ked G E to develop a free-flying, unmanned pioneering new technology for molding an all-space platfonn; a satellite-senicing finility; ami plastic car exteiior.

space station conununications. The U.S. Navy in luckaging, GE helped several companies de-picked GE to design ami pnxtuce combat systems sign new lxittled water and beverage containers li>r Seawolf submarines.

that feature lxxan8 polyuu bonate resin. Ilottles Faced with slowing domestic defense markets made of Irxan resin are crystal dear and muc h and intensified competition, Imth branches of this stronger than previously used materials.

55 billion business are kmking fi>r new growth op-For the computer market, GE Plastics ofTers a lxntunities. For example, second-sourcing-the number of tailored materials designed to replace U.S. government's push for increased competition intemal ami external metal stnictures with plas-for defense dollars-is a two-edged sword. It pie-tics. The new lilNI Pers< mal System 28/N!ixtel 50, sents an op[xntunity for growth, as it did in 1987 for example, uses i.exan* resin fi>r the base, w ben GE was awarded a pnxluction contract for screen beici and inner supixnt sinict ure - com-the Phalanx anti-missile defense system, while it bining them into an easily assembkx1, lightweight challcnges GE's existing market insition.

and durable unit.

GE also began war k on a "concept house," a liv-ing laboratory that will demonstnue the multiple i

GE Plastics broke new ground during 1987 in applications of engince'ng thermoplastics in the helping customers lind innovatis e solutions to constniction imlustry.

market needs.

Another key thrust for this $2 billion business is The global leader in engineciing thennoplas-resource n covery. Unlike most other plastics, the tics, GE made imjxntant innuds in the automo-enginceiing thermoplastics mai keted by GE are tive, packaging, com puter and construction recyclable. The Company is currently des cloping mar kets.

prognuns that, for example, woukt recyde pack-Ajoint project with Il51W, fbr example, cruted aging materials into automotive parts ami eventu-the woikfs fint pnxtuction car with all vertica ally into building and construction materials.

lxxly panels made with thennoplastics.The G E During ihe year, GE Plastics strengthened its materials proside lighter weight, more desigr. Ilex-ability to serve customers throughout the woi kt by ibility and better resistance to impact and coau-establishing a sepanne business organization for The gmwing popularity of bot-t'ed waterhas opened an-othermarket opportunity for GE Plastics. which has de-I signed a new grade of crystal-w containers.

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clearlexan' polycarbonate resin specifically forbeverage r

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McCaffery IGEPlastics ex-amine an inner support chas-sis structure molded from

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lexan" resin for use in the

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new IBM computing sy'em in the foreground.

A..M.W ui 9

the Pacific Rim to paralici existing organizations in Japan, where GE holds a 759 stake in Yokogawa Europe atxl the United States.

Aledical Sy stems, this new acquisition improves It also brought on su cam a new S325 million the Company's leadership in the wm kiwide diag-l ix>lycarbonate plant in Alaixima to serve as an ad-nostic imaging mai ket.

ditional supply ix> int. Construction began on new That leadership was fmther reinforced by rec-facilities in South Korea atxl the NetheiLuxis.

ont sales, onters mul net income in 1987 lbr this G E is a leader in silicone technology, too, wit h

$ 1.5 billion business, reflecting the success ofits a wide range of silicone scalants, coatings ami continuing drive to impiute its competitive pos-clastomers. Superabmsives, such as 51an.\\ lade" ture woddwide in the face of sluggish domestic industrial diamonds used by the constniction in-demami caused by cost-mntainment piessures in dustry amt ot hers, are am>ther imlxntant material the health-care fickl.

pnxluced and marketed by GE Plastics.

GE also intnxluced technology advances across its five basic imaging m(xlalities in 1987.

unuussusuu in magnetic resonance, the NIR.\\ lax" system, GEMedicalSystems has strengthened its woi ki-whith features electronics fromJap;m and GE's wide presence through the acquisition of CGR new self-shielded superconducting magnet made from Thomson, S. A. of France.

in South Camlina, addresses the woddwide mar-The inmsaction, which also involved the acqui-ket for a mid-field.\\lR system.

sition of GE's consumer electronics business by Elsewhei e, G E enhanced its woddwide leader-Thomson, was completed at the end of 1987.

ship in computed tomognq>hy by announcing a The leading pnxiu(cr of diagnostic imaging sys-new detector-based on a unique cenunic devel-tems in France, CGR holds significant market posi-oped at the Company's R&l) Center-lbr its CT tions throughout Europe a'ul1.atin America-9S00 Quic k system. GE also increaml its position strengthening GE's position in those maiket areas.

in x-my with theintnxluttion of the Advantx" CGR also brings with it some very strong technol-line ofimaging systems and impnwed its position ogy, especially in x-my pnxiucts, that enhances in ultmsomxt and cuclear imaging through a van-GE's global aqubility since one-fourth of the diag-ety of te(hnology develoinnents.

nostic imaging market is in x-ray outside the GE.\\ledicd Sy stems' offering also indades a va-United States.

riety of value-added sen ices 3ut h as equipment j ust as imjxatant, CGR gives GE.NIedical Sys-maintename, leasing amt financing. For example, tems a stronger three-continent base of opem-the 51axisenice" package-which pnnides tions. Joined with already strong engineering and licxible equipment leasing, maintenance and in-manufacturing bases in the United States an '

sunune -is unique in the diagnostic imaging industry and has become a ineferred methul of acquiring high-te( h diagnostic systems.

unuseummt N

y GE Factory Automation is a( hieving good growt h

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ned ofJapan that completed its first year of opem-tion in 1987.

Operating subsidiaries in N irth America, Europe and Asia give thisjoint sentme a su ng base in the p s wodd's three major mai kets Ihr fin tory automa-s non e< pupment, software, sy stems ami servic es.

A significant 1987 a(hicsement was GE Fanuc's N' F sele (tiim as a single-source supplier of piognu..

oN,.

mahle mntniller and numerical control pnxtu(ts Q'

for Genend Ntotors' Saturn manufac uiing(om-plex in Tennessee. GE also will provide genemi purpose (ont nils ami ekt t t ical distlibution equip-ment (see page 20)lbr the Satuin pndect.

A GEMedicalSystemsis helping ducedin 1987, MR Max pro-py l: mmc also buih on cac h pem compny's to make the wonde*s of medi-vides an economicalapproach caldiagnostics avalable to to magnetic resonance omag-more andmorepatients ing and can be usedin moble (omputer numetial contial enables m. hine tools throughinnovations such as MR units snaredby several to operute fitstet and moie m curatch. l.iLewise,its the MR Max' system. Intro-cinics othospitals new Set ics 90" progiammable t ont roller can do Ihe s une for a vaiicty of factm y Ih w >r pn x esses.

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Services Businesses i<e" <reativity ayd c"treere"e"rial svirit -io im-

}mrtant mternanonal mai kets.

The recent acquisition of Navistar Financial Corimration Canada, for example, has strength-ened GE Capitars presence in Canada. Navistar miam-'rs From creativity and service comes added value.

Financial is owned by GE Canada but is managed Ily combining individual creativity with out-by GE Capital, which had previously opened com-standing senice, we give our customers added mercial real estate, equipment financing and cor-value - that extra "something" that often deter-porate financing activities in Canada arxl Europe.

mines who wins and who loses in the services sec-With its $32.5 billion in net earning assets, GE tor of the economy.

Capital currently stands in the front mnks of sup-This goal-providing added value for cus-plien of capital to husiness. It is an innovator in tomers -has helped keep GE ahead of the com-commercial real estate financing and a leader in petition with:

such fiist-growing areas as levemged buyouts

> FinancialServices (LilOs), full-sen ice leasing, auto auctions aml re-

> h'ationalllroadcasting Company tailer financing.

> Communications and Sen-ices in conunercial real estate, GE Capital specializes in creating one-of-a-kind financial packages pri-marily for existing propenies rather than for new

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GE Financial Services is one of the largest, most constniction - a strategy that has set it apart from diversified wmpenton in the global mai ket fi>r fi-most lenders aml has led to phenomenal growth.

nancial senices.

During the year, its asset Imnfolio in commercial Through its three subsidiaries - GE Capital real estate grew by 37% to $6.1 billion.

Cor[mration (formerly Geneml Electric Credit GE Capital continued to be a major player in Corporation), Employers Reinsurance Corpora-levemged buyouts, too, helping to finance the ac-tion and Kidder, Peabocly Group-this business quisition of 21 companies in 1987. Special focus has expanded mpidly to where it now has more was placed on fundmg mergers and acquisitions in than 560 billion in assets and a leadership position four major industries - media and communica-in many U.S. financial niches.

tions, retailing, health care, insumnce - and in in addition, GE Financial Senices has made the United Kingdom, which is the world's second progress in iraplementing a selective strategy for largest LilO market after the United States. Con-international expansion based on bringing its key sidered to be a pioneer of the 1.110 concept, GE assets-financial innovation, value-added sen -

Capital has prosided financing for individual 4

Financialservices trom G give customers added value.

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entrepreneun or management gmups to acquit e this area during 1987, increasing its net earning

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mark, for example, entrenches it as the founh Dming the year, GE Capital strengthened its as-largest reinsmer in the wodd.

set management pntrolio by auluiring Get o G>r-Kidder, Peatxxly, which is 80r/c owned by GE, 0 '

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}mration, a leader in automotive Ileet ami con-remains an imputant part of GE Financial Serv-tainer leasing. It also acquired D&K Financial ices despite 1987's turmoil in the stock markets.

Corp.a Kmft, Inc. subsidiary sjxxializing in leas-Acquired by GE in 1986, Kidder announced plans ing automobiles and light trucks. These two acqui-in 1987 to restructure its operaiions to become sitions, together with the previously acquired Keir more cost-efTectis e while sharpening its focus on Leasing subsinny, give G E Capital ownenhip anxi (apital mar kets and individual sales.

management of a fleet of more than 250,000 vehi-cles. In addition, Genstar Container Corponuion, e uzamam another GE Capital asset-management business, NationalBroadcasting Company is the leader in beame the workrs largest container-leasing com-netwoi k television.

pany by assuming Gelco's container business.

Despite changes in the way TV viewership is GE Capital expaixled its. uto auction business, measured, this S3 billion business remained num-too, acquiring nine more outlets. It now has 17 ber one in prime-time nuings for the thini straight auctions handling more than 100,000 used cars year-winning.18 out of 52 weeks,its best per-ami trucks a month for thousands of dealen, all fonnance on reconi. Ratings detennine which net-major auto manulinturers, rental car companies, woik receives ihe biggest percentage of advertis-fleet operatoi3 ami financial instiauions.

ing revenue.

In retailer fmancing, GE Capital openues the it also was the thini consecutiw year that "The industry'a largest private-label a edit anl business Cosby Show" finished as TV's highest-rated series.

for some of the worErs best-known retail cot'upa-With suc h other popular prognuns as "Cheers,"

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tCICt asts liom the People's Rt publa. N BC ' New s qtming dnestitur e of h >ut inhet N B(. iadh > sta-hi and B1okah sWied an ohcl WUp hith the IH Nt lions h as ICmpol.M lh stasCd a 41C-( dl-t itle [ 3. (Ulcs IMI 41 lilici s Ich h Illi N u iCl A [)b Oltet til !)i(ladt asl tel hnf ib igics. N 1h I an-IcadCl \\Ilkhail ( sol h.R het I be neth ol k des otal nomRC l thal it is des ClopHig a blo Hh ast lian4nts-lb f > pillik -lHile lH)ul s It I all N !N s[M div d e(l (le-sh an u steill tat, il adt qnC(!. h(Hlkl Mullilk anth haic anh Hlu 12 plesKlelllkal t andid.ncv N B( abo impii n e pk tlH C quahh % IHlc t em.Uning t omlMn-c\\ tended as Inghk.u t laimed " liw Ln ( ont ept tii ble u nh (in tent I \\' stand.o ds ( alled Aduou ed g the u cCkend w n h t he nu n ido( t h in of annd.n ( ompatible IClcsiuon < A( l \\'t the u stem wiiubt E l od n ' dehs ei a w idei. (Ic.u ct pa im e toi home s icu mu. E N B( had ot bei norahlc pn igi.onnHng m lues e-In ( k tobei, f ollow me an 1 %-u cek su ike. the 5 ments dm me M67. Netwi n k teles ish ini h ingest-N anonal \\ssiit un< in of Bi oad, ast I mph n ees.u ul l ulHHilu pli tulain, DIcel the Pl c w. t clt hl aled u s i n huh ians lanlled a neh Muh Hlih ( 4,nn E t loth.uMHs ciso s on the.m N B( 's bi o.n h et < >l u nh NIM the HIh7 L icua IbiwI hetween Penn st.uc and Nh.oni of F h a nla a as the most-u.ut hed milege umme h w a hall g.une m luston Among N B( n ude-t oi - GE Communications and Sercices helps indn hl-teles bh tli lIlllls tilal h Iill ( lllh.il # ( laill) h el t' ll. tis, l HIMilcues al k! et )\\ ci llllleilt s (11111/(' tt H las 's = "1.h l : I he F af h icat s ailii "L sc i ai tlic sl)iiiiin ' iii.iw. it iiit ii iinit h oi ilit i >u eli i he lise i st sitellit es. k lhuing the tall. (1 a(qun ed W l \\1 in Niunn. < t,o,puten and ot bei.o h.u u rd tn hnologies L h }lk 11 ( aine till(ICI dle sllpel s bli 414 it N B( ah Hlg A lle,d h N hdhe H I cluci pllsc ( d ( J d n n n H H( a-h Illi alh ttilCl ( s h slalki dl. h\\( N( - 1 \\' ll1 [kils ci lh His.tlul sci s H (T 1% ( < lilll M iW(I ()l si\\ (Ils ci st a q )cl - 2 ( I and N B(. now hase ws en teles ish.n stanons - anne unns sale of a scs cnt h unn. R( A (,h,hal ( i d llillllllh alli d ls. II, \\!( ! ( i dlllllllllh alh Ils ( i I- ~ jh l a t h M I Is c\\ g )ct 1(*(1 ti l I nc t a illl[ >Icle( k li t l!I%% ( e k \\illel h all ( (Illlilllillh alli 41s i.\\llR I h t 411I h t dilllllied lis !cadel slHp in dt d nt sih (i pH unen ul (

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,Y Core Manufacturing Businesses wave ove"s a va'iciy ornew air-mxiiii mins y pnxlucts anxl fise new Potscrubber dishwashen. 8 ty$,J ~ Q. The new tojumount refiigerators are the pnxl-uct of GE's n ecent $238 million investment in its yR1 mmmmmmme refrigeration business. Assembled in highly auto-W From high quality and low cost comes customer mated factories in KentucLy and featwing rotary Q.\\ satisfaction. compressors manufiictured at a newly opened 4.ij. Ily driving for high quality and low manufactur-plant in Tennessee, the refrigerators have been @e t-i ing cost, we are marketing the puxlucts and seiv-completely redesigned to meet consumer ex-fM. ices that will satisfy our customers in global mar-pectatiom fiir high quality, large capacity and fy):... Lets that ar e getting tighter and tougher each year. convenience. 43 This drive - to be the high-quality, low-cost GE also filled out its new line of Slonognun Qg g = global competitor -is the heart of our leadership built-in appliances. Sening the high-end kitt hen M!4 strategy in: design market, this f ullline ofcustom-built appli-h.Q,/ > Appliances ances indudes cooktops, dishwashers, refrigem- .s p., > 1.ighting ton, wall ovens and microwave os ens. 4 WM > Indusuialand PowerSystems Another 1987 highlight was the Company's new nj a_ > Electrical Distribution aixt Control "Satisfaction Guanmteed" prognun. It lets con- ]h}d > Slotors sumers exc hange or retmn GE or t iot point appli-j%p s a > Tnmsixntation S> stems antes for up to 90 days after purchase if they are dissatisfied for any reason. $(W The Companyi commitment to consumer sen-D. ummmmmmum 9.2 ; GE Appliances continued to "bring g(xxl things to ice received further praise during the year. The lif e" h>r millions of people. GE Answer Center

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The U.S. mai ket leader in major appliam es fi>r named the nation's best telemar keting operation

MJ the home, this more than S 1 billion business added by the Dinst N!arketing Assodation.The Answer

'- ;j yi 1.,gg} to its reputation fi>r produ(t innovation aml(us-Center, available 2-1 houn a day by dialing (800) tonwr satisiintion during the year. 626-2000, has handled more than 12 million toll-A total of 190 new GE ami llotix> int models h ee calls from consumers sime it opened in 1982 [,J...yp were intnxluted in 1987. These included a new and, due to its success, has now expanded its scope p.<. generation of top-monat refrigerators,23 addi-to indude telemai keting consulting sen it es. 'f$-- tional nuxlels of gas nmges, GE's first einuic GE Appliances aho acquirni Gem Pnxlucts, VM '.- nmges with solid-disk cooktops, seven new micnw w hich enham es its position as the leading supplier '%~ ? V.:,e 4 GEmanufacturingis aimed at satisfying customers. On the precedingpage, for example, Rorence Jean Roseperforms a quaEty check on refrigera-tors being manufactured at GE m mm Appliances' modernized, auto-matedLouisvile refrigerator (W plant. The new "Satisfaction . 3l. v s 'l Guaranteed' program mtro-s { ducedin 1987now backs up .p j{ y s = the quality of all GE and Hot- -l 1-point apphances. 1 &g .s.w;;;;;;;; ~~ \\

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I$h ) y O k The styksh,integratedlook f 1 of GE's new fae of Monogram bultin appliances appealed j xJ WW-so much tointerior designer l ? ".s 1 Blutter Design Group that she ) Janet Schiliof Chicago's + selected them when remodel-ing her own apartment i W l8

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a of ICpl.u emCnt pu ts loi appli.ou rs..ind loiinUd.i .\\lu.n s a IC.ulci in livining in no\\ ation. (.1 01- -= t p > int \\ Unim U u it h N1.\\lW of \\lCxa o lo m.ikC ge IUi s moiC lb.ui b.non (hilUituu lighling pn x ha is a k =- lanqUs alul()lhrt appll.llu rs h il ( t >InlllCil 1.ll. IIH hist i lal.u M I ( t instilnCI H Lli kris. t lis new rina gan iiig f lalogUn l'Ci loi m.uu U Plus .t! H I Illg}l-( ( til H -l Cl H lCI Illu !! L H 11 CM C111 1.1111])% 111 N GE Lighting h = uv11 as inouit Us m 1%7 on pu t u ulu. w riC u Cll iUt Un Uti in 1%7 in t he gn

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,,,g E bghting pn slut ts. mg (:ut iCnik ihU Non h \\ mci n an inai kUI Ic.nlCi smaammame niih about two hillion huhl bulbs sold pri \\C.u. (,1 GE lndustrialand NCer Systems he nudU R I ighting is esiahhshing luo p uni \\ UlnuiCs a uh (h.unain i hangCs in ils dii\\C to iCnuin ihe pic-M ft M ilig Wi M n ll H bist i l.tl (.II.111 ht il Ca til C Nl Lil H l ll1C U11 ll110111 stlly)llCl ( >l lH )h CI gCllCl at h ill Utlllll)lllCut i I ( [t illll1. IIB \\ l)I CM'lh C in IllU lill l' ast. ( IIM' p 11111 .l1 H I nut \\ h Us it b.1 h Iil ld 111.11 kUI ( l8 nudCd k n dCL Ikn- \\ ChlulC blII pit M bh r autoulolR U and quall/ !.unps me gulhlh lidUs b d ClU(ll h pa th CL lol lht hiHld m dkCl;theolhCIbl!Im.Wul.Huur llus m dkridilknshllthM hCUn Hlom punUd lhD 11(N Cnl !.unps h d IhC kt 4 U.m m.u kUI. Ih d h h\\ a de inhhng ()l gh blul I ompClHD in, ( lCaling j p tillt \\ Uldll! Us al U \\ IUh(1l its liMCs b d llu I t'.lsllig M'\\ t I t' })1 h C lH UwlliCs b d l}lls Si !HI!h ill k HisillCw h olIdh HlO bonp salUs % ilh t hU h n us on.W \\ s t.n l l u U n pl o\\ C ( osia ompChlB UnCss. ( sl. bM I U-Illal kUl (bal ( u M Cul b I Cpl UNCol s '.'T e ollhClolal su m HH Ud H s im hmt, u m lU.u U nUI g\\. poh rt dC!h - = Ilrr-h olld Hlal kUI. Ul\\..uMlN(lUs.md sUl\\HC ulutsIaClthU p MIlB U ( el' l.lg}ll Hig.lls's ( t Olllllutt ! li t t i Olsi l!H l.ilU ( b F \\C.ll s lin Us!U(l llh 11 t' llLu l NIlli Il ul!h H I Ill l)lall! IllCsl h a >lM'l al H slls. Ill\\ Usl 111 110 % IUthIUl!(Ig\\.ll H I IIH M lt I nl/alla lils,.II Hl Uxilt15 sC\\ Ul al I)usillCwUs i L t'\\ll.tl HI ll s lH t H ltl 1 IlllCs -- a!! sll alUgh lilt a Us Ill l'.INI a b HIC. ( s b. t !I kM1! Ils !.1140 Il allsIs illllCl [E .tillR1l al Illallil.illllllp ll1C (.8 8111lLill\\ A llekilllly b ' lt I-i il)('l a t h 01. (lls j H hull ( }l.1 Illh l('.l! \\. asit' IMistl H'w. t'l slH j ) til lllO l.H U i }l lluensllH1l t t Hill}( ll! D 01. Usl H'- si ih ! M'\\ t I al sUl \\ k ( sllt q)s JIMI st ib l lls i III)( - 7 ( l.llh l11411 till} H H is lx ih t I llJitsullult di lH 4 Hillt i Illit. IllC.llb I' N, S I)ui n n t hU pei i n e \\ U.o s. h o Ux.u n plC. (.1-(,l. also sohl u s n urieu m NulClun ( iigrpi..m m. I aght mg has (losCd i I plu ns u hilU.o t hU sonU ici n.o n inal (iinsn in in in.uMI engmUri me lu m. 11111C !! } Lis Hi\\ rslUd ilH il U libill NM I n ullH in u l nCh In.H b blH in. Ilus husmUss ICnCh Cd Hs CWpbMis p UquipmCiu, pit slut In H s pu igt.uns aiHl nUw pu n l-t in.cl \\ n C..u h.u u Ui t IC( lu nih ig\\ antl HilCliulu oial M m t de\\ UlopinCnt. h lso iUsu ut t un d u s busmcw .ilh.n u Cs e bl nlgUs lo (.u i s a nuo t he nUxt dn.u!U S pi n t h iln i ni l'N w ilh t hU dn t q u th e 4 >l I he lin k( ! w hun in.u kct t i o n lu n >ns.u r Ux pn iud lii u n pu a c. t.U hnium h.dlUi s and ballet busmCwes ( il I ul hu n b o Ux.unplU. sliUngt hUnUd H s h a us K._ g GE Lightmg bnghtened the ~ n i ^ 50th anniversary of the e ~^ ' n E Golden Gate Endge m 1987 by &'..,'^ _-m 5 dlumor,at.ng the bndge s 700-n.:.u M m foot towers Other famous i ~ structures ht by GE mclude "M Londor' Bndge )revi fountam. i 5 g the Louvre Museum. the 'e b Ala:no. the Vatue of Liberty ?.kW &Q ~-

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s. des p acnii.d f oi (,lu li iin hules t url liom (;l w oi kiwide. (;l. upgiade pn giams help unhncs Nin Ir.n i nei ys, w hh h o oituiurd to h x us its ic-hn ome moic clin icin. sta h as a in enth i < on-soin us on iucl and sen a es ni PM

-a_ _ plcted pio,n i in I gs pi ih.a n u irased a } w m m Also u n hulo t w ulun this busmew.o c ( d l'owri y $13 $; @((f. pl.unioutput in in5 without am nu irase m f uel 1)cIn ci s. w hose ocw cln u onu ume-of-use meten o msumpin oi. ()ihn iuibine upgiade pn pgi.ons air ganung wide au eptam e ni ihe irsideiu ul .o e gc.o cd n m.o d mdusn ial usen. sla h as j upri m.o kei. and (.I 1): n c % sicms, a Ic.n hug suppha q.. mdh. to help mn i iheir ( hanguig nents b o lx mei of ( ustonn/nlionn ols and di n cs f oi nulusu ul R.yf L ' .m i pn x ess sic.u n. and unhn appla anons um khude j7 C., I hese upgrade pioni.uns.o e impa mentalin Q.p";il (.t 's woihiwide netwoi k of sen a e shops and hcid ammmmmmes w i.yn a / L-enumeen. t he I.o gesi sen n e i onimgent olin cd GE Electrical Distributien and Control i n en cd igg.- n r c .u In aln cln li R al eqlupment m.mula(Im o one a ll t he 1.0 gest onin s in hs InMol s dm m i MIX /. Annihn kes llH ml is W hinbbng mlnkes pt mm u hen t he hann n NUhshb H s al ( senclal blon sc-pl.nas. espo ulk toi t he t ogeno anon mai kci in ied (.i as a smgle-soin < c supphei toi os m.m u. _~ < vv I """ " =' 1 o maint.nn in huolog. leadenhip. (,l. plu ed I.u un mg i ompIn m I conewer. s --:M on teu m inghk.nh.nu ed i gas nn hmc h o on-Ts a sano n cppha. (.t u di po n nie ihe plou. 2 Q {h[l ( u le appht anons. uni ugnol an agiccment u u h coin c clo n h al u sicm - su m hge.o. pancilm un ds. c Asd,mm m ni.omeoio a m aopin ~ dd; m - namb,nn _ awu,w m hn. mmoo o mnm m m-1x nu i t ul gas un hine loi t he n.in national h u le in x subst.o.om and sncial n ules of hmw.n. I he

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lleyond pnxluct inm>vation ami plant im est-utt" strategy is imixntant as fbreign production of ment, this nearly $1 billion business is seeking to motor <ontaining pnxluc ts increases. imprm e its global mmpetitiseness through stra-g 4., tegic alliances in Eurojm ami the Far East. An ummmmmemu kg agiecment signal with Fuji Elettiic ofJapan in GE 7hrnsportation Systems intnxiuced a boki 3' 1987 was a major move in this direction. This new concept in the locomotis e iminstry in 1987. ~ " ' ~ agreement calls Ihr an exchange of manulactm ing Referred to as 1.51X, this new "ixiwer purchase l and engineering tec hnology ami couhl lead to the pn>gnun"is giving the limlington Nmthern Rail-joint development of new elecu ical distribution nxul substantial operating benefits by more dosely am! control pnxlucts ior the woddwide mai ket. integnaing its capital s]wnding ami long-term op-erational needs. sumummmmme Des eloped in conjunction with GE Capital, GE Motors took a significant step to retain its 1..\\1X encompasses 100 new Dash-8 hxumotives global competitiveness by staiting up ajoint s en-with a 10-year operating guanmtee for reliability ture with Ily uixlai of South Korea. aml availability. With maintenance perfbrmed un-The highly automated Kmcan facility mmple-der contra: t by GE,131X ibrms the foundation ments existing GE plants and pnxluces newly de-lbr a signihcant sen-ice thrust by GE Trangxnta-id8 signed motors to Ixmcr pumps, compresson, fans, tion Systems. blowers and other equipment.Thejoint venture This business also n eceived several significant 9 supplies North Americ;m customen and opens ac-onlen in 1987, dramatically improving its market %d... cess to the growing Pacific Rim mar kets. share. The l'nion Pacific Railroad, pleased with ga P GE Aloton took other actions to enhance its 1x>- the reliability and quality of an cailier GE delivery, sition as the wm ki's leading supplier of eledric ordered 75 new lommotises from the Company. M $s % motors it improved customer senice and pnxlutt They will be the most 1x>werful diesel-electric kr fifff quality. It designed new motors for the automo-comotives ever built by GE. Other key onlers - .?* tive, jx >ol and spa, and business equipment mar-totaling another 125 h>comotives -came from WQ Lets. And it annoumed a plant consolidation pn>- Southern Pacific, Conrail,and The Atchison, g~.:. Q gram to better utili/c domestic capacity and 'Ibpeka and Santa Fe. ' ~ " ' reduce wsts. GE Tnmspottation Systems also is a leader in Another key mme for this $1 billion business electiic propulsion systems for transit cars, suc h as was ajoint venture with Daewoo to pnxluce nur those it is providing to the New Yot k City Transit tors (br nxnn air conditioners made in Kor ea ihr Authority, amt in propulsion systems for giant off-exixnt to wor kt mai kets. This "follow the pnxt-highway s chides with capacities up to 210 tons. 4 The Dash 4in the centeris + one of 100 new LMXlocomo-tives from GE Transportation ~ Systems in service with Bur 6ngton Northern under an innovative arrangement with y GECapitalwhle the Dash 4 .p

#19 locomotives on theleft and R 'a g - }

Jght are part of recent deliv-eries to the Union Pacific and ,,s f'f ' ; bc. l.. - Southern Pacific ralroads .ttN ll., _. c--y ' ' respectively ^ h

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~u ^ s '~ ' :- 7 '- %, f y*; w-project to provide electricity 'T_,. ' '( more efficientty to the North Shore of Massachusetts, underwent a 1987 turbine up-grade performed by GEIndus-trialand Power Systems serv-ice technicians. 21

Support Operations = GE Trading Company strengthens the Com[xmy's international sak competitiveness by stnuturing amt fullilling the of fset, cmmtennule anxl baner ammmmmme intuirements that are increasingly an integral pan International strengthens G E's global com peti-of oveiseas sales agreements. tiveness through a regional and o>untry organiza. During 1987 GE Tuuling Company generated

W h.+

tion that promotes business development in key mor e than $250 million in of fset credits li>r the f$ markets amt helps establish stiung relationships Com[xmy.1-br example,it completed -live years qd with international customen aixi paitncis. ahead of schedule-a program in China liar GE h 7 increasingly, this international organi/ation is hulustrial aml Power Sy stems ami also structured p @'. fix using on finding amt facilitating major alliatu e a lxu ter deal that allowed GE Tnms[xatation Sys-y opponunities with leading European anxi Asian tems to sell hxumotives to Gaixm. 3 ".g companies. Recent examples of this emphasis 'e 4: j abomxt: the aoguisition of CGR from Thomson and ihe sale of Consumer Electronics; the stategic GE Semiconductors designs awl fabricates semi-1 alliance between Fuji Electric aixi GE Eleutical conductor chips liar other GE businesses as well as Q.d Distiibution ami Control; alliances f or GE halus-for the external market. ~ triil aixi Power Systems with Alithlle East pait. Combining the solid-state resources of GE, RCA ners; a new partnership in hxlia li>r G E Plastics; and Intenil, this business is one of the leading sup-P"" %[g 9.U andjoint ventures in Korea li>r GE 1.ighting aixl pliers of ChiOS integmted circuits and lx>wer de-GE Ntotors. vices in the United States.

.Jf GE is focusing its solid-state thrust on the auto-immmmmmme motive, military and industrial markets by levemg-

. p.gh GE Canada also provides the Company an ess ing a strong ASIC (application specific integrated Q into some important world markets. Aixmt circuit) capability w ith a broad line of C.\\lOS logic S210 million of GE Canada's sales are li>r ex]x nt, des ices in addition to standard and "Smart Pow er" t i iiuluding such pnxtucts as hydn> generation pn xlucts. It currently is a major supplier of C510S equipment amllarge motors. logic pnxtucts to the U.S. government. One of Canada's largest imiust rial com er ns. G E in addition, this business sigtul a long-term Canada continued to t oin entrate its i esources on agieement with IIB! during the > car to oxleselop three lxisic a cas: consumer pnxlucts, te(huology-new ASIC pnxtucts and technology that will hase lused piodu ts aial xmer systems. broad application for both internal and commer-1 (ial use. Ladd Petroleum prosides a lxu kap supply of / 4 M.xM y 4[# ' ^ t;3 4,6 '. petnw hemical feedsto(L for GE Plastics as well as TOL L -

n..

j., [' ~ inoie than 50G of the natural gas used by domes-4 - uc GE >lants. n I p a- ~ + / ~ ?.,, ~ ?. '. One of the 10 largest U.S. imlependent (non- " it P.5 pdD@f'..[ ff k l [' ' [e..- tems in Texas in 1987 and contimust to expaixl its L. .A major) oil aixi gas onnpanies,1;uhl has weather ed 2 .N -N ,,..e,.1 r ' '.y.;, :.. AO 5k the dedine in oil ami gas pric es cun ently af feuing 2 d m.s the iixlustry. It construded two gas-gathering sy s- .s e c-s 4 o.t - : - - +... 3g-s u. gas-marketing program. . ed.R,..

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~ . 5 -9, h s g. -E e n, 31 .i f. GESupply suplx>rts the a tisitles of several GE j .,,-j businesses by prosiding sales aixl dists ibution g. . " '.' W. 3f j(i-1... - ;.. / (hannels fin ekt tvinil equipment to U.S. ( us-r- n. toiners iii tlie ilulustt i;il aixl (oitsti tu tioit mai kets. ~. 0 U "5"" *I" P' GE Canada and GEfanuc have operate the paper. making teamed up to supply the mo-machinery at Domtarls new inent, lighting, motors atul fiu tory automation fors, drive systems and these fine papers m# tin Windsor, pu xhu ts, this 51 billion business sells aixl dist rib-programmable controllers that Quebec. utes < oinplementat y non-GE pu xhu ts. 22

K .k J 'T h%/, i a )p '-f'k ' i ~ )' f., ) y. / 4 i / 7 M, 'f. =p' 7-;';= u f(t, [As j.m @s;O f,,, s,.,.. g. y J w., 3n s 4 W .5 y .s ~ .%[Mhg,gdg[ D-9. s,s, COpf9#ts [def84 ' ' b-W ~'Y I;f%1 j'l ~ \\ g,, s ' ($3Wihbuntahis' trytt}, VM '. 'Reporf ofil _. blic i l'< A 4 27dllalameshect(imandaljsithnh w;: '[36i fIndepeixlentcettifiedhu. m '.. g".i U l ~ t,.- J . jl EE g *jp-t j;29 dFMuisEs(ciangesiihinaixialposition)f ' .:24; > li W I25i }Muinga statement' ^ lj ' 'f

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Managernent's Discussion of Earnings Unusualitems re[xn ted in 1987 by GE consisted en-l The Statement ofEarnings summarizes GE's operating per fi>rmaine for thc lust three years. Opemting resuhs tit ely of punisions fi>r business resnucturings. Business fi>r 1987 included a full year of RCA opemtions while resu uctur ing expenses involve significant drmges made 1986 results indtuled RCA for only seven months. or being made to position GF for future gn>wth by ra- > The 17% net earnings increase in 1987 resuhed tionalizing, reorganizing aixl improving pnxluction ac-from solid opemting perfi>rmance fium GE's businesses, tisities reducing fi> reign aixl domestic risk ex1x>sures; panicularly Aircraft Engines, Financial Senices, Niedical ami phasing out or otherwise tenomating business activi-Systems, N BC aixl Plastics. The earnings increase in-ties no longer compatible with managenwnt's long-term diales one-time gains from two accotmting changes stmtegy objectives. Alh> cation of unusualitems,inchul-I" made during the year aixt significant provisions for busi-ing business restructurings, by inxlustry segment li>r the ness restnicturings. Since these gains aml unusual ex-years 1983-19S7 can be fotuxl on page 31. l'or GE Finan-penses complicate analysis of the 1987 Earnings State. cial Senices, unusual items represented pmvisions ihr ment, they are summarized by quaner in the table below business restructurings and insider inuling (harges re-aix! are discussed umre fully in the following paragraphs, corded by Kidder, Pealxxly. > The extraordinary loss in 1987 is (br the premium Restated quarterly after-tax earnings increasel(decrease) incurred by GE Capital Con poration for eat 1y retirement 1 resulungfrom accountsng changes and unusualexpenses of.certam high interest-mte debt as part of financ. l re-1 ia Fust Snond Thiul Femnh (In millions) Quaner Quaner Quaner Quarter Year structuring. When replaced with lower-cost horrowmgs, there will be an m erall etunomic benefit to GE. Accounting changes Im entory 5 281 $ 281 > Totairceenues were up 10% in 1987 following a 26% Income tax: increase the year before. Indusion of a full year of RCA businesses id 1987 paniMiy accounts for the current-year U"""Id'i' c nIrI, t![uaner $1) (N) (N) (N) incmase. Indusuy wgnwnt infonnation beginning on ( ) page 32 presents information on c hanges in revenues as Total $ 831 $a1) $o2) $ (31) $ 720 well as other operating informanon. In total,Ihe ina case t'nusual items of 12% n sales was more than accounted for by a higher ll V"I""Je of shipments partially of fset by lower prices, a Fs suuation smular to that m 1986 compared wah 19S5. Extracrclinary item di2) (62) "MU U* **"#"" U" 'l $(20S) $(W) $(10) $( 13n) $(717) under uxlustry segments. > The inecntory accounting change was made in Other sources ofincome were down considerably-198Ts first quarter. The c hange indudes more manufac. 369 in 1987 lbilowing a sharp inc rease in 1986. Prind-turing overhead cons in ino ntory.This better matches pal reasons fbr the decrease in 1987 were lower income GE's pnxluction wsts with revenues and aligns GE prac-fmm shon-tenn investments, which had built up in 1986 tices more c hr,ely with the capitalization practices in the preparatory to the RCA aatuisition, and lower gains Tn Refonn Act of 1986. from fewer sales of Toshiba Corixmuion stoc k. > The deferred income tax accounting change rellects > Totalcost ofsales and selling,generaland adminis. rules that were ievised for all mmpanies during Decem. tratice expenses increased 119 in 1987, or one point ber 1987 w ith adoption allowed in either 1987,1988 or le s than the iclated in< rease in sales. This telleus man-1989. GE c hose 1987 to adopt the new rules despite the agement's c ontinuing dr ive to impros e cost stnu tures complications created by the restatement requirements and strengthen pnxtuctivity tinoughout GE. of the ruling.The accounting rule, Statement of Finan- > Interest and otherfnancialcharges were up $20 mil-cial Accounting Standaids No. 96,iequires that,if lion in 1987 lbliowing a $261 million ina case in 1986, adopted in 19S7, the cumulative impaa of the account-principally iciated to the RCA acquisition. The 1987 in-ing change up tojanuary 1,1987 b restated to the first crease came from a somewhat higher as erage les el of quaner even though the decision to adopt in 1987 couhl interest rates paitly oilset by somew hat lower as erage not be made befin e the Ibuith quarter w hen the Stan-lx >rrow ings. dard was issued. 'the 1987 quanesiy impact of the new > Details of theprovisionfor income taxes, eu luding accounting nwthodology also is shown in the alove table items penaining to the "cumulatis e can hups" disc ussed of quanctly t estatements. alwne,can be found in note 8 to the finaixial statements. 21

Statement of Eamings General Elutric O>mguny and consolidated athliates for the >can ended December 31 (In millions) 1987 19S6 1985 Revenues Sales of g(xxis $29,937 $28,139 $23,963 Sales of senices 9,378 7,072 1,323 Earnings of General Electric Fmancial Sen ices, Inc. (note 15) 552 501 113 Ottar income (note 5) 618 1,013 5 11 'lbtal res enues 10,515 36,728 29,210 Costs andexpenses Cost of goods sokt 22,359 20,757 17,672 Cost of senices soki 7,298 5,130 3,171 = Selling, general and administrative expense 5,979 5,963 1,591 Interest atxl other financial charges (note 6) 6-15 625 361 Unusualitems (note 7) (Gains) fnnu sales af assets (50) (518) g Provisions f or business restructuring activities 1,027 311 1-17 Special payment to nonexempt and hourly employees 93 Total costs anxi expenses 37,308 33,036 25.820 Earnings before incorne taxes, extraordinary itern and cumulatire efect ofchanges in accountingprinciples 3,207 3,G99 'lA20 Provision for income taxes (note 8) (1,088) (1.200) (1,113) Earnings before extraordinary item and cumulative efect ofchanges in accountingprinciples 2,119 2A02 2.277 Extraordinary item - GE Capital Corporation loss on carly extinguishmeat of certain long-term debt (note 15) (62) Cumulative elTect tojanuary 1,1987 ofinitial application of Statement of Financial Accounting Staixlants No. 96- "Accounting for Inrome Taxes"(note 1) GE arxlconsolidated afliliates 59 GE Financial Senices, Inc. 518 Cumulative elfect toJanuary 1,1987 of changing overhead reconled in imentory (note 1) 281 Net earnings S 2.915 S 2A92 S 2,277 Net earnings per share (in dollars) lleibre extraordinary item and cumulatis e efTect of changes in accounting principles S 2.33 $ 2.73 S 2.50 Extnwrdinary item - GE Capital Corporation loss on early extinguishment of cenain long-tenn debt (.07) Cumulative effect toJanuary 1,1987 ofinitial application of Statement of Financial Accounting Staixlands No. 96- "Accounting (br Inwme Taxes" GE aix! consolidated alliliates .06 GE Financial Services, Inc. .57 Cumulative effect toJanuary 1,1987 of changing over head recorded in imentory .31 Net earningspershare S 3.20 S 2.73 S 2.50 l)isidends de lared per share (in dollan,) $ 1.325 S 1.I85 S 1. I 15 'lhe notes to huamial statements on pages 37-51 are an integral pan of this statenwnt. l'er sh.uc.unounts base been adjusted for the 2 for-I sim L split in April lim 7. l'inamialinfornution im tudes RCA results homJune 1. l!M Ste t l

M:nagement's Discussion of Financial Positi:n mammmme CE's balance sheet - the Statement of Financial Posi-was more than accounted for by the effect of(hanging tion - showeti an increase in total assets to almost G E's inventory accounting to im hule (ei tain types of $39 billion at year-cini 1987, up $ l.3 billion fium 1986. manufacturing over head piesiously charged directly to g On December 31,1987 GE aial a Freixh electronics expense (see inte I to the financial statements) ami by company,'t homson, S. A., completed a tnmsaction in reclassification of RCA Aerospace anxl Defense balances w hich GE acquired most of'llmmson's medical equip-to the basis used in GE's Aerospace business. Aggiessive ment business (CGR) ami Thomson acquired most of inventory management is pait of GE's working capital GE's consumer electronics business. CG R's assets and lia-efliciency drive, ami at year eint the number of day s of bilities are inchuled in GE's year-eml 1987 balances based output on hami was 153,or i 1 days less than at Iksem-on pieliminary, estimated data. Consumer electronics' ber 31,1986 wa a comparable basis. amounts have been removed from year-cixl 1987 The last-in f out (1.lFO) revaluation incicasal balances. $32-1 million during the year, mostly related to the im en- > Cash and marketable securities classified as current tory accounting change discussed in note I to the finan-at ikx ember 31,1987 amounted to $2.7 billion, up $773 cial statements. In 1986 aml 1985, there had been net million. Funds held for business development, which are favorable 1.lFO adjustments to wst of sales of $101 mil-not classified as current assets, decreased by $316 million lion ux! S 171 million, res[xuively. These amounts in-to $81 million in 1987.The decrease represented princi-(luded reductions in 1.1FO reserves of $51 million (1986) pally GE's purchase of a television station in Miami, Fla. aml S 128 million (1985) because of reduced inventory > Current receicables are mainly amounts due from levels, mainly in power systems businesses. Such favor-customen ($5.5 billion at December 31,1987; $5.7 bil-able adjustments from lower inventory balances weic lion at Daember 31,1986). Most of the decrease was modest in 1987. accounted for by the sale of the consumer electronics > Other incestments increased $ 1.7 billion in 1987. business. At year end, customer receivables as measured Most of the increase was from growth in retained earn-by number of days billing outstanding were 36 day s, ings of General Electric Financial Senices, Inc. Other down from 39 days on a comparable basis at the end of increases induded additional investments in associated 1986.This was the lowest point for this measurement in (ompanies. many years. Other customer receivables measurements > Intangible assets, representing mostly RCA intangi-such as delinquency mtios ami amounts past due also ble assets suc h as licenses and gm xlwill arising from the impromi again, showing the results of major attention RCA acquisition, were S 1.1 billion at the end of 1987, to wo: Ling capitalir.anagement throughout the Com-I he increase of $819 million from 1986 icpiesented pri-pany. The m erall comlition of customer receivables re-marily an increase in RCA gmxlwill(net of amonization) mained excellent at year emi. Cunent receivables other iesulting from completion of appmisal and etaluation than those owed by customers indude amounts due from studies during 1987, vmious types of non-sales transactions, suc h as advaines > Other assets of $3.8 billion at December 31.1987 to suppliers in connection with large mntracts. were up from $2.6 billion at the comparable date a Scar > Incentories of $6.3 billion at December 31,1987 wcie ago. Piincipal items accounting for the ina case were a $ 1.1 billion more than at the emi of 1986. The increase higher defened tax asset resulting primarily fium ie-sinicturing iesenes, and more wcoverable engineering msts on gmernment contmas. > Totalborrowings at ikxember 31,1987 amounted to $3.6 billion, down $563 nullion from the end of 1986. or e p)alin e$ted The decicase was in shoit-tenn bon owings that weie Dece her31 down $703 million esen alter adding about $200 million 3"' of CGR debt. GE's totaldebt impioved to 25.19 of totalcapital at 2 the end of 1987, a substantial t edmtion funu 28.M a yeai cadier following die RCA autuisition. Tije major g ~ debt-rating agemies mutinue to evaluate Gb deln as l J being of the highest standing,"triple A? \\ 2 o 1983 1984 1985 19 % 1987 26

E StatementofRnancialP6sition General Elat ic Onnpany arxl(onsolklatal aITiliares At thember 31 (In millions) 1987 l986 Assets Cash (ix>te 9) $ 1,834 $ 1,698 Mat ketable securities (note 9) 858 221 Cunent receivables (note 10) 6,782 7,208 inventories (note 1!) 6,265 5,161 Current assets 15,739 11,288 Property, plant aix! equipment - net (note 12) 9,255 9311 Furxis hekt for business development (note 13) 81 397 Other investments (note 14) 5,621 3,914 Intangible assets (note 16) 4,430 3,581 Other assets (note 17) 3,794 2.570 Totalassets $38,920 S31.59i Liabilitles and equity Short-term bormwmgs (note 18) $ 1,110 $ 1,813 Accounts payable (note 19) 2,615 2,591 Progress collections aixl price adjustments accmed 3,760 2,273 Dividends payable 319 287 Taxes accrued 1,382 1,153 Other costs aixl expenses accruni (note 20) _3,485 3,311 Current liabilities 12,671 11,461 long-term lx>nuwings (note 21) 4,491 8,351 Other liabilities (note 20) 5,088 3,48i Total liabilities 22,250 19,293 Minority interest in equity of consolidated alliliates 190 189 Common stock (926,5G1,000 shares issued) 584 579 Other capital 878 733 Retained earnings 15,878 14,172 less common suick held in treasury (860) (375) Total share owners' equity (notes 22 aixt 23) 16,480 15.109 Totalliabilities and equity $38,920 S31.59l Onnmitments arxl contingent liabilities (note 21) %e notes to fman(ial statenems on pages 37-51 are an integral part of this statement. Share data have been adjusted for the Nor.I sud split in April 1987. Enable GE to continue a high les el of piognunnwd The Statement of Changes in Financial lbsition aixl related (omments on pages 28 aixl 29 present addi-expenses as well as to suppnt other internal aixl ex-tional infbnnation about changes in the balanc e sheet ter nal business growth artis ities amt opjxn tunities. during 1987 as well as comparatise data for prior > cars. > A major refsorting change will afect 'he 1988 in summary, the Onnpany's financial p>sition re-AnnualReport. At next year end, a new Statement of mains strong. G E's financial resourc es aix! liquidity aixi Financial Accounting Stamiants (No. 9 l) will require the highest possible credit rating supplemented by bank full c onsolidation of all majority-ownni subsidiar ies. credit lines aie believed entirely adequate to: 'this nwans that the accounts of Genend Electric Finan-

• Pn, vide for seasonal working capital neuls during (ial Senin s, Inc. will tw combined with those of the 1988.

presently musolidated com panies GE mun ots. This

• Pay for new plant aixi njuipment expenditures c onsolidation will not ( hange GE's net earnings or shaic that are expecial to be alxmt $1.7 billion during owners' equity, but it will drastically alter ihe apl war-1988. Estimaint future plant expcixlitures ahcady ame of the finamial statenwnts,in panicular the bal-approved also aggtrgatnl S t.7 billion at the eml of ance sheet, to w hic h mor e than S60 billion of aswts aixl 1987,of which approximately 509 is planned to be liabilities will be added.

spent in 1988. 27

Manag:m:nt's Discussion of Ch:ng:s in Financial Position The Statement ofChanges in FinancialPosition sinn-of funds usage. Additions to property, plant aiul equip-marites the main sources of GE's imals aixl the uses ment base been GE's priinipallong-term use of fmxis made of those fumis.This Statement helps to show the ihr many years. Aggregate expenditutes fi>r new plant ictationship between operations, which are presented in (exduding acquisition of RCA's) were $5.8 billion in the Statement of 10u nings, aixl liquidity amt financial ie-1985-1987. sources, whic h are depicted in the Statement of Financial Disix>sitions of property, piant ami equipment in 1987 Position. innludal the inmsfer of Omsnmer Ela tronics to Thom- > Funds procidedfrorn operations, after various ad-son, S.A. Plant ami equipment addal from Tlunnson justments <how n in the top ponion of the Statement, was not significant. were $3.1 oillion in 1987, alx>ut the same level as in eac h > Financialtransactions other than specific lx>nuw-of the previous two ) cars. These funds from opennions ings related to acquisition of RC A in 1986 have not been are net after leaving abnost S1.5 billion during those a significant GE nealin rnent years. It is lx>ssible that three years from nonnal net earnings of nonconsolidated GE might add to or retire long-term lxirrowings in 1988, financial sertices afliliates in those businesses to help depcixling on financial market coixlitions amUor possible them finance their own continued gruwth. stnuegic business acquisition opIxntunities. With its ex-Worhing capitalcan be either a prus ider or user of cellent credit rating, GE is in a }x>sition to take maximum funds. Intense attention to wo Ling capital assets so as to advantage of any suth developments. minimize unnecessary hick-up of funds while at the sane > Dicidendspaid totaled $1.177 billion in 1987. Disi-time ensuring adequate resources fi>r growth of GE's demis paid during 1987 totaled S t.29 per share. At the businesses is a major fi>cus. Comments on page 26 alx>ut same time, the Onnpany retained sufficient earnings to rn eivables anxl inventory measurements explain cur-supjxnt enhancal pnxlut tis e capability and to piuvide sent results of GE's wot king capital management pn>- adequate financial resources fbr intenial and external gnuns. Aggressive actions to better utilite working capital growth opjxn1 unities. The two inn cases in dividends de-added $1.2 billion of fmxis from woiLing capitalin 1987, clared - seaux! quaner aixt founh quaner of 1987 - bringing the totalof fuixis provided from cunent-year mar ked the twelfth consecutive year of dividend growth. opentrions atxl asset management to $ 1.3 billion for > In surnmary, the Onnpany during 1987 generatal the year, significant amounts of fumis from operations and wm L- > The 1986 RCA acquisition was the Onnpany's largest ing capital,ieducal shon-tenn lx>nuwings by 5700 mil-ever aint the relatect financingin that yearis sunimarized lion aix! added ahnost $S00 million to cash and equiva-on the Statement. 'lhete were no transxtions of similar lents. Onnbined with the financial flexibility that conws size in 1987, and it is no longer informatis e to accumu-from top cralit naings, GE is }xnitioned to finance a ma-late nunwrous relatis cly small cash amounts Ior tnmsac-jor acquisition on favorable economic terms, continue tions related to RCA, panicularly disjx>sition activity. Ad-other long-term investments for giowth and again in-ditional financing aixl debt pay ments related to RCA crease dividemis to shar e owners. weic nominalin 1987. > Another accounting rule change in 1988 will icpsat e > Incestinent cnd otherlong terrn trans utions in the the Statement of Changes in Financial Position with a aggregate were alxmt at the s,une lesel during the past Statement of Cash Flows. This nde (Statement of Finan-tbree years, ranging between S 1.3 billion aixi 51.6 billion cial Accouming Stamlants No. 95) wouhl not signili-cantly nuidify GE s existing format. Ilowes er, w hen onnbined with the prospectis e c hange in wnsolidations (see page 27), the 1988 presentation will be substantially Net earnings retained for growth and used for dif fcient as it willinnlude cash flows of Genend Eintric dividends (In doRarspershare) h..uanual Sen.aes,Inc. p so Efu no e RetAmt for -~I lo growth U I" Delermis O.00 19M3 1981 198 *> t930 1957 28

Statement of Changes b Rnancial Position . Fundsprovided(used General Ekxuic O>miuny aiul mnsolittatest afliliates For the >rais einleil lktember 31 (In millions) 1987 1986 1985 ' Fundsprovidedfrom operalions Net cainings S 2,915 $ 2,192 $ 2,277 Irss extr;umlinary item anni cumulative ef fect of changes in accounting principles (796) 2,119 2,192 2.277 Adjustments for items not representing ctulent fuixi usage: Depiuiation, der letion and amortuauon 1,544 1,460 1,219 linuings retained by nonconsolidated financial senices affiliates (561) (506) (li1) Income tax timing differences (160) (158) 128 All other opetuting items 161 77 12 Fuixis provided from operations 3,106 3,365 3,255 Funds providedfrom (usedfor) changes in unrking capital Decrease (increase)in inventories (1,104) (317) (279) Decrease (increase) in cun ent receivables 426 629 (531) Increase (decrease) in current liabilities (except shon-tenn bonuwings) 1,913 (400) 62 Net fmwls piuvided fnun (usal for) woiking apital 1,235 (88) (748) Totalfunds ferovidedfrom operations and unrking capital 4,341 3,277 2,507 Funds used at acquisition date { June 1986) topurchase RCA Purchase price (6,406) Irss RCA cash anxi marketable sectnities 296 New bonowings to acquiit RCA 5,106 Net inluttion of fuixis at acquisition date (701) RCAfinancing transactions during 1986 Pmceeds fium sales of assets 1,367 Repay ments anxl other reductions in RCA long-tenu lxumwings (190) Net addition to funds during 1986 877 Funds providedfrom (used in) investment and other long-term transactions Additions to property, plant and equipment (1,778) (2,012) (1,953) Dispositions of propeny, plant aix! equipment 636 275 142 Use of funds held for busmess development 316 329 88 Additional imestments in nonconsolidated financial senices afTiliates (106) (50) All other nunsactions-net (411) 152 153 Net imestment tiansactions (1,343) (1,336) (1,570) Funds providedfrom (used in) financial transactions Disposition of GE shaies from treasury 361 283 286 Puithase of GE shaies for treasury (846) (318) (283) New issues aixl ot her increases in long tenn bonuwings 396 21 171 Repayments atxt other decicases in long-tenn honowings (256) (67) (17!) Net financial tiansactions (345) (11l) 3 Funds usedfor dividendspaid (l,177) (l,058) (l.006) Net increase (decrease) infunds S I.476 S 915 S UiG) Analysis ofnet changeinfunds increase (decicaselin cash and ma:Letable sumities S 773 $ (638) $ 181 Deorase (incr ease) in shon-tcun f xin owings (enluding acquisition of RCA) 703 1,583 (250) Inocase (decicase) in funds S 1,476 S 9 15 S 016) The noies to finamial statenwnts on juges 37-51 are an integral gun of this statement. Finantialintornution imludes RCA resuhs fiomjunc 1, IWi. 29

Man:gement's Discussion of Selected Financial Data Selected FinancialData provides both a baixty refer. David Sarnoff Rescanh Center to SRI international. ence fi>r some data frequently requested about GE aixi a > GE's worldwide employment at the eix! of each of the record that may be usefulin reviewing treixis. Ilowever, last five > cars is shown in the graph below.The steady in relating 1987 opemting dat:, to prior years, care increase in pnxluctivity each > car from 1983 through shouhl be taken to icview the comnwnts on page 2-1 per. 1987 is ix>rtrayed in the seemxt gmph on page 21 Dur-taining to accounting changes and business restructor-ing these >ean, constant dollar sales rose fmm about ings in 1987. Also,it should be remembered that data fi>r $91,000 per em ployee to about $ 119,000 per employee 1986 indude RCA results Ior the last seven months and -a 30% incicase. hiuch of the current-year reduction in data for 1987 indude RCA for the full year, employees resulted from the year-cix] transaction in > GE's net earnings have increased at a finster rate over which there were considerably more consumer electron-the past five >can than have revenues. This rellects, ics employees transfen cd to Thomson, S. A. than were among other things, improved nuluctivity aixl cost nMer red from Thomson into GE's hiedical Systems I stmctui es as well as dispositions of sevend low-margin !Mym businesses. As shown in the first graph on page 23, GE's > The backlog ofunjilled orders at the eixi of 1987 was indusny segment operating profit, w hich is the principal $22.7 billion. Orders constituting this backlog may be source of earnings, has improved in each of the past five canceled or deferred by customers (subject in cenain years. cases to cancellation penahics). Inflation has not been a signifiamt factor in the Com-The significance of backlogs in mxlerstaixling the pany's earnings growth in recent > cars because of the Company's business has been changing. hiany of the key relatively slow nue of price increases in the United States businesses whic h are now providing GE's growth operate economy. in markets such as appliances, plastics and senices where > Property, plant and equipment additions were order-to-shipment cydes are short. In businesses where $1.8 billion in 1987, making the total for the last five long order-to-shipment cydes are typical, aircmft engines years (exduding additions by acquisition of RCA) S10 bil-have been growing rapidly in recent >can while power lion. Of that total,309 was to increase capacity: 269 was systems have been dedining aml continue to do so. Al-to increase pnxtuttivity; l-19 was to sup[xnt new busi-though GE remains a leader in most power systems prod-ness stan-ups; 129 was to replace anxi t enew okler ucts, domestic amt foreign maikets have been dedining equipnwnt; aml 189 was for such other projects as im-in recent years aml worktwide competition has intensi-paning R&D facilities ami safety and environmental fied. New power systems ut der rates are quite low by protection. long-tenn histmical standards and backlogs for virtually all x>wer systems pnxlucts are dedining. Cmupany man- > Totalresearch and decelopment expenditures in i 1987 w cre $3 billion, of w hich $ 1.2 billion was from agement continues vigorous eflints to impnn e power Company funds. These expenditures, whic h suppon fu-systems' cost-competitiveness and to adapt pnxtucts ami ture giowth, were somewhat less than in 1986 (S3.3 bil-marketing to the changing environment. lion total; $ 1.3 billion of GE fumk), principally because About 579 of the total backlog at December 31,1987 ofintegrating RCNs operations and donating RCNs is scheduled to be shipped in 1988, with most of the Consondated employment at year end Share owners'equityper share-(12 thousands) December 31(In dollars) 400 $20 335 316 292 359 302 320 d6 240 _12 160 M o Forrign 216 248 236 288 257 lbunt k X0 j o o 19X3 19X1 1955 1986 19X7 l9X3 1951 l985 19 % 19X7 Menn Gt h s 4 14 20 30

SelectedRnancialData General Electric Company and onsolidatal athliates (Ibilar amounts in millions; per-sluie amou nts in dollars) 1987 1986 1985 1981 1983 Revenues S 40,515 S 36,728 $ 29,210 $ 28,920 $ 27,613 Earnings lxfi>re extraonlinary loss i asul cumulative elTect of accounting changes 2,119 2,192 2,277 2,239 2,002 i Net earnings 2,915 2,492 2,277 2,239 2,002 j Eanxxi on as emge shate owneis' equit) 18.5 % 17.3 9 17.5 % 19.0 % 18.9 % j i Em nings per share llefore extraonlinary loss aixl cumulative effect of accounting changes S 2.33 2.73 2.50 S 2.47 S 2.20 Net earnings 3.20 2.7'4 ')50 2.17 2.20 Divideixts declared per share 1.325 1.185 1.115 1.025 0.9375 GE stock price range 66 % 38 % 44 %-33 % 36 %-27 % 29 %-21 % 29 %-22 % Divideixls declared S 1,209 $ 1,081 S 1,020 930 852 Shares outstarxling - avemge On thousamis) 911,639 912,591 910,76') 907,360 909,536 Shatt owner accounts -average 491,000 492.000 506.000 520,000 501.000 Shoit-term borrowings S 1,110 $ 1,813 $ 1,297 S 1,417 S 1,016 inng-tenu borrowings 4,491 4,351 753 753 915 Minority interest in equity of consolidated alliliates 190 189 126 128 167 Share ownen' equity 16,480 15,109 13,671 12,398 11,137 'D>tal capital invested S 22,271 S 21,162 S 15,817 $ 14.326 S 13,235 Return on average total capital invested 14.7 % 13.9 9 16.2 % 17.6% 17.4% Total assets S 38,920 S 31,591 S 26,162 S 21,555 $ 23,017 Propeny, plant and ep.,, ment additions other than additions by acquisition of RCA 1,778 2,012 1,953 2,i19 1,67I Year-cixi orders backlog 22,737 23,913 23,117 22,577 20,589 See notes I arvi 15 to the financial statements for infonnation ainui atrounting < hanges arxl extraordinary loss. l'er-share amounts base been adjusted for the 2-for-l stock splits in Aptil 1987 and April 1983. Financialinfor mation includes RCA results fromJune I, 1986 unless stated otherwise. iemalixler to be shipped in the two >can after that. l'or December 31,1987, up from S 1.2 billion the year belin e. comparison, about 60% of the 1986 backlog was ex-The lucklog of aircralt engine orders for exlxnt in-pectal to be shipped in 1987. creased by alx>ut 809 in 1987 aial airciaft engines made Unfilled onlers for ex1xut of all types of pnxlucts up more than aluee-quaners of the 1987 unlilled export aint senices funn the United States were $6.0 billion at onter lucklog. Net earnings and revenues percentage increase from 1982 7ny 42 0 Net carmnp - Resonnes 1983 1984 1985 19 91 1987 31

Management's Discussion ofIndustry Segmetas The Summary ofIndustry Segments gn>ups G E's var-amoitization of RCA pun hase cost alh> cations was in-ions businesses by the principal imiuttries in which they creased based on completion of appmisal ami evaluation participate. These ditTer funn the gcou pings presented work.This segment in 1987 included the consumer elec-e,n lier in this re}xnt, which fbcus on key businesses in tninics business that was sok! late in Da ember. Iligher tenns of strategy considerations involving resource alh>- consu mer electronics volume (RCA operations a ere in-ation anxl long-tenn goals. For a desaiption of the busi-chaled for 12 months of 1987, comparul with only seven nesses in each segment and Ihr additional details, see months of 1986) was more han of fset by low er selling inte 25 to the financial statements. piites arxl greater RCA purchase cost allocations.1.ight- > Totaloperatingprofit has grown at an avemge an-ing operating margins improval somewhat in 1987, re-nual nue of 7.2% over the last five >rars. This growth is flecting benefits ofimproved cost stnictmts. ! icensing alter abvn bing unusual expenses each year,1urticularly income, mostly fnnn consumer-ekctnmics-ielated pat-significant business restructuring pnivisions in 1987 ents, rose considembly in 19S7 due to inclusion of 12 Operating pn> lit for the year 19S7 was iunt alTected by months of RCA in the cun~ent year compared with seven the inventory and income tax accounting changes. months last year. Unusual items ente:ing into the detennination of op- > Financialservices operating prolit is virtually all ac-erating profit are shown by imlustry segment for each of counted for by General Electric Financial Senices, Inc.'s the last live years in the table at the top of page 31. (GEFS) earnings before cumulative effe t of the income > Aerospace irvenues were up 229 in 1987 from 1986, tax accounting change aixt extraordinary loss. Such earn-rellecting a full year of RCA operations plus ovemil vol. ings were 109 more in 19L7 than in 1986. Within GEFS, utne increases. Flat Scar-to-year operating profit reflected the 1987 earnings of GE Capital Corpomtion (fbuncily business rest ructuring costs amt increasal amonization GE Credit Corpomtion) increased 219 from 1986 main-costs from completion of RCA purchase cost alhotions. ly fn>m a higher level of"caniing assets," an increase > Aircraft engines revenues in 1987 were 139 more in gains fnnu s: des of warrants obtained in omnection than in 1986, and operating profit increased by 8% The with cenain loans, ami somew hat lower interest rates pr im ipal reason Ihr the continued improvement in re-lbr lorrowed fumis. Partially offsetting these improve-sults was again a higher volume of shipments, which have ments were somewhat lower financing yichts. Employers risen steadily for seven years, liigher openuing profit has Reinsurance Cor[xn ation's earnings also weie up 219 in also been a( hieved consistently despite substantial ex-1987 on higher volume, guxiinvestment innfolio per-pendituits fbr research ami development,im estment in fonnance and gtxxl undenvriting experieme. Kidder, plant impn>vements and capacity expansion necessary to I eaixxty's loss, compared with a profit the previous > car, upgrade pn xludion cf ficiency and provide the advanced reflectal the impict of business iestructmings amt in-in hnnQ re luired by di aircraft engine customers. sider trading charges. New onien of $8 billion receis al during 1987 were up > Industrialresenues for 1987 weie esen with 1986 but 299 fnnn 1%6 aml were a new high for GE's aircraft a small operating loss ($26 million) was inc un ed. The engine business. operating loss was the result of wides]nvad restructuiing > Consumer pnxtucts revenues imreased 89 in 1987 pros isions to cover business exits, suc h a Cad >oloy, ra-from the piior year but operating pn> fit dalinal 289 as tionalizing several production operations, and reorganie-significant restructuring placs were implemental and ing and integrating mar keting ami distribution auisities. > Majorappliances ievenucs increased 89 fnun 1986 l amt opending *,uolit was up 69 despite some restructur-ingosts associated with pnxtuction rationalization plans. Five-year average annualprowth rates - operating profit I hel e w cre strong s olu me increases in < ore appliance (Excluding NBC ladustrial and "an other") lines, suc h as refrigemtors, with sales thiough retail 37Ni channels up anxl contlactor sales about flat. Pnxluctivity again impnaed lamer prkes and cost inilation paitially C Aerospace O" oilset these favorable factors. O %lajor apptbrxes C Aircraf t engmes 12 5 Emam Ll sen u cs o hiaterbh C runsumer produsts oo a Technkal prelutu misenKrs o Power nitems - 12 5 - 25 0 32

SummeryofIndustrySegments Gervral Electric Com piny arxl wnsolidated alTiliates For the > cars erxled Decemlaer 31 (In millions) 1987 1986 1985 1984 1983 Revenues Aerospace . $ 5,262 $ 4,318 $ 3,085 $ 2,622 $ 2,084 Aircmft engines 6,773 5,977 4,712 3,835 3,495 Consumer products 5,042 4,654 3,220 3,466 3,422 Financial services 632 585 499' 448 397 Industrial 4,707 4,711 4,762 4,495 4,509 Sfajor appliances 4,721 4,352 3,617 3,650 3,078 h!aterials 2,751 2,331 2,119 2,280 1,885 National llroadcasting Company 3,165 1,817 Ibwer systems 4,995 5,262 5,824 6,289 5,981 Technical pnxlucts and senices 3,670 3,021 2,317 2,402 2,154 Allother 85 774-434 1,419 Corporateitems atxt climinations (1,288) jl,074) (915) (1,001) (781) T<, tai reven ues $40,515 $36,728 $29,240 $28,920 $27,643 Operatingpropt Aerospace 603 608 437 332 201 Aircraft engines 940 869 673 460 395 Consumer products 416 577 425 553 309 Financial senices 558 488 420 355 290 hxlustrial (26) 182 252 79 91 Alajor appliances 490 462 399 381 383 Afaterials 507 424 330 446 314 National Ilroadcasting Company 455 203 Power systems 199 354 740 519 695 Technical products aixi senices 275 119 99 (8) 166 Allother 23 31 370 632 452 Total industry segment operatingpropt 4,440 4,310 4,0G8 3,779 3,299 Interest and other financial charges (645) (625) (361) (335) (370) Cor}x> rate items not traceable to segments, and intersegment eliminations (588) 7 (287) _ (175) 30 Ecrnings before income taxes, extraordinary item and cumulative efect ofchanges in accountingprinciples $ 3,207 $ 3,692 $ 3A20 $ 3,"69 $ 2,959 'Ihe runes to financial statements on piges 37-51 are an integral put of this statement. Firrmcialinformation indades RCA results fromJune I,1986. > Materials revenues aixl operating profit were 18% principally in network operations that had suung gains anxl 20% higher, respectively,in 1987 than in 1986. in sixnts anxi prime-time entertainment. TV stations Robust volume in all plastics product lines was the princi-camings also improved, mainly because oflower oper-pal contributor to the improved operating profit. Plastics ating costs. continued to expawl in mar kets such as automotive com- > Powersystems revenues declined 5% in 1987-the [mnents and f<xxl packaging. third consecutive year oflower revenues - and operat- > NationalBroadcasting Company 1987 rettnues ing profit dropped 44%. The significant decline in oper-and operating profit ($3.2 billion anxi $455 million, ating profit was more than accounted for by the cost of a respenively) were substantially ahead of 1986 when NilC was induded with G E only for the last seven months. On a ful1 ear-comparison basis, NilC's oper-9 ating pn> fit was well ahead of 1986 on somewhat higher revennes. This irllec solid margin improvements, 33

1 Unusual items included in operatingprof t (In milhons) 1987 1986 1985 1981 1983 Aerospace S (31) (1) (1) S Aircraft engines (72) 4 (3) (50) (8) Consumer prixtucts (166) (35) 40 91 (11) Financial senices (a) (16) Industrial (282) (72) (80) (147) (89) h!ajor appliances (54) (20) (68) (81) Alaterials (14) (15) (28) (5) National limadcasting Company Ibwer systems (264) (175) (78) (261) (5) Technical pnxlucts aixi services (95) 2 (53) (129) (b) Allother 15 370 500 Cor}x> nite items (49) jj4 (131) (40) 109 Total unusua! items S (1,027) $ (261) S (22) $ (145) (30) (a) In athlition, GE Finan<ial Senices' carnings, w hich are pan of GE's operating profit, include $91 million (before taxes) of unusual expenws. Ilowes er, GE Financial Senices' extraonlinary km ($62 million after taxes)is not inclu&d in omsolidatett operating profit. See note 15 to the financial statenrnts. number of restructuring programs throughout this seg-both expenses, such as the Corlxinue R&D Center aiul ment, including costs associated with restn cturing the corix> rate stafTs, amt income from corponue treasury nudear business to focus iesources on refueling and serv-activities. In 1987,ihere was much lower income fnnn ing its installed boiling-water reactors. corporate-levd investments and sistually no courterpan > Technicalproducts 1987 revenues increased 21ri aixi to gains fnim sale of Toshiba stock in 1986. operating profit more than doubled from 198G.The in- > GE's exports to externalcustomers totaied S 1.0 bil-crease in openiting profit was led by Afedical Systems, lion in 1987, up from 1986's $3.7 billion.The gniph w hich had good s olume ginwth particubdy in computed shows the majorcontributors to CE's expon growth for tomography, sen-ice and magnetic resonance lines. Com-the past five years, dearly depicting the substantial in-munications and Senices also had higher results, panly crease in airemft engines over the period with a much from indusion of a full year of RCA openuions but also lower contribution from power sptems pnxlucts. Exixnt from imprm ed pnxluctivity. Cahna Company's operat-sales by major woild areas Ior the past three yenis ar e ing loss was again reducal consideinbly. shown below. > Corporate items, which are included in Company earnings but which are not traceable to industry;seg-h'#g'j '* "'""""'"""* gg7 g gg ments, aggregated a loss of$588 nulhon m 198, com-II 3 $l' 3i $l' l pared with a small gain in 1986. This caption indudes f;"';";l{; 6 i hikhile East aixl Alnca 762 190 533 Americas 625 -176 502 Other areas 238 126 131 Total $1,021 $3.709 $3.319 US exports to externateustorners (In birlions) In addition, exports fnun GE openuions in ihe United 8" States to GE alliliates of fshore were $801 million in 1987. $639 million in 1986 and $671 million in 1985. Imin nts My from GE's olkhore alliliates were $1,095 million, S563 27 million arxl S53S million in ca(h of the last thice Scais, respectively. lf GE's total international operations (all ex1x nts plus foi- ' sil'iri.a eign alliliates) had resenues of 59.2 billion and openning J13 profit of $1.7 billion in 1987 compaied with iesenues of a t u ersnienn 8 Alitralt engis es 1983 1988 19M 198ti 1987 34

Management's Discussion of Fin:nci:IResponsibility Thefinancialinfonnatiore in this repor t, includ-business practices, h!anagement insists on maintain-ing the audited financial statements, has been pie-ing the highest standards ofcmxluct and pmctices Inred by GE management. Prepamtion of financial with respect to tnmsactions with the United States statements aix).ttited data imoh es estimates and government. Theie is continuing emphasis to all the use ofjudgment. Accounting principles used in employees that even the appeamuce ofimpropriety preparing the financial statements are those which can enxle public confidence in the Company and in are genemlly a< cepted in the United States. These the gm emment procurement process. Ongoing ed- . principles are consistent in most im[xntant respects ucation, communication and review programs are with st:axlants issued by the Intentational Account-designed to create a sinmg compliance em iron-ing Standards Committee. In a few im1xntant in-ment and to make it clearly mxlerstood that devia-stances, which aie commemed on in note 1 on page tion fnnn Company policies will not be tolerated. 37, where there is no single sixtified accounting Peat N1andck Slain & Co. provide an objective, principle or standard, managenrnt makes a choice independent review of management's discharge of from reasonable, accepted alternatises, using meth-its obligations relating to ihe fairness ofieported ods which it belieses are piudent for GE. operating results amt financial condition. Their re-To safeguani Company assets, it is imixntant to }xat Ior 1987 appears on the next page-have a sound but dynamic system ofinternal finan. The Audit Committee of the Board (consisting cial controls ami pnmlures that lxdances benefits solely of I)it ectors innn outside G E) maintains an and costs. Ooc of the key elements of GE's internal ongoing appraisal-on behalf of share owners - financial centrols has been the Company's success of the effectiveness of the indepeixlent public ac-in recruiting, selecting, training and developing countants, the Company's stall of corporate audi-professional financial managers. Their responsibili-tors and GE management, with respect to prepam-ties indude implementing and overseeing the finan-tion of financial statements, aixl of the adequacy of cial contn>l system, reixnting on management's internal fmancial cont rols. The com mittee also re-stewardship of the assets entrusted to it by share siews the Company's accounting policies, intental owners, and perfonning accumte and proper main-accounting controls, ami the Annual Re[xnt and tenance of the accounts. proxy material. 51anagement has long recognized its res[mnsibil-ity for conducting the af fairs of Ihe Company and its afliliates in an ethical ami socially responsible manner. GE is dedicated to the highest standards of integrity. Integiit y is not an occasional require ment J,ohn L Wekh,Jr. but a continumg comnutment which is retlected.in Lev written policy statements. Thcse cover, among O imyan d the Boanhux! Chief Executive Of fiter otlIer subktts,1x5tentially conflicting outside busi-ness interests of emplayees, compliaoce w it h anti-trust laws, ami proper domestic and international 2 a um an--- l>ennis 1).1)ammennan Senior Vice President Finam e Febnq 19,1988 35

Report cfIndependent Certified Public Accountants To Share Owners and Board ofDirectors of ates at Decemher 31,1987 anni 1986, and the ie-GeneralElects ic Company suhs of their operations azul the t hanges in their We hase examined the stateinent of financial xni-financial position for each of the years in the l tion of General Elect s ic Onnpany anxl consoli-three9 ear periul coded Iktember 31,1987, in datal alliliates as of December 31,1987 ami 1986, confi>nnity with genemlly acceptal accounting and the ielatal statements of eamings ami principles consistently applied dcring the perial (hanges in financial position fi>r each ofihe > ears except fi>r the changes, with w hich we concur, in in the thne9 ear perio<l endal December 31, the methals of accounting fiir income taxes ami 1987. Our examinations were made in accordance overhead recorded in inventory as described in with genemlly accepted auditing stamlards anxi, note I to the financial statements. anordingly, included such tests of the accounting re urds and sut h other auditing piucedures as we ggg gQ4 considered necessaix in the a,rcumstances. in our opinion, th'e ali>rementioned financial Peat 51anvick Slain & Co. statements appearing on pages 25,27,29 aixt Stamfiird, Cosmecticut 37-51 present fairly the financial position of General Electric Onnpany ami conw>lidated allili-Fehmary 12,1988 36

NOf83 O f/08DCialSf8femenfS GE and omsolict uni amliates aml $518 million for GE Financial Sen ices, Inc.) of the c hange is slu>wn sepa-rately in the 1987 cohnnn of the Statement of Earnings on page 25. Also, as rajuin ed, quaneily earnings ie- }xmni for 1987 have been restated fi>r the ef fni of this Summary of signi# cant accounting po#cies diange on interim quatten in 1987 as ifit had occuned M atJanuary 1. Restatal quattedy amounts can be li>und Consolidntion.The financial statements represent the in note 27. adding together of General Elects ic Company aixl all Incestment tax credit (ITC). 'lhe ITC was r epea!cd, companies, cxcept financial servyces com pames, w hi( h with some transitional exceptions,efTutive January 1, GE controls through a majonty mterest or othenv,se 198& Ilowever, fi>r financial reixnting puijx>ses, GE lus i (affiliated companies).11ie eff ect of inmsactmns among defenul recognition of the ITC eadnear aixl continues ielated companies is eh,m,inatal. 5 to amo. tire ITC as a rnluction of the 1 mvision fi>r in-the pnncipal fmancial senices allih. ate is G.eneral a>nw taxes over the lives of the Iacilities to w hi(h the Electnc Emancial Services, Inc. (GEFS), a wholly owird cralit apphes. company that in turn owns all of the stock of Genem! Elect ric Cajital Corporation (GECC: fiinnerly General Pensjons and other retirement benefits. Accounting Elecnic Credit Corporation) anxl Employers Neinsunuu e pohc es for pensions anxi other ictirement benefits are diwuwalin note 1 Cor[x> ration aixt 8051 of the stock of Kidder, Pealxxly Grou p Inc. These financial sen ices companies are so dif-Incentories. The values of most inventories are deter-ferent from the other GE companies that, in the opinion mirrd on a last in first-out, or 1.l FO, basis and do not of GE management, GE's financial statements are more exceed icalizable values. EffntiveJanuary 1,1987 GE tuulerstamiable if financial senices alliliates' statements changni its accounting pn>cedm es to indude in im en-are shown separately. Iloweser, because of a new at-tory (citain manufix tuiing overhead costs previously counting nde, GE will be required to consolidate all charged dinstly to expense. Among the more significant majority-owned af filiates at year-end 1988. See page 27 types of manufacturing os erhead now induded in inven-of this rein nt fi>r additional details. Separate comlensed tory are: depiniation of plant ami equipment; pension statements of GEFS are shown in note 15 anxl the non. and other benefits of manufac tming employees; and cer-consolidated financial sen ices alliliates ai e indudal on tain pnxluct related engineering expenses.'lhe Com-the equity basis as "one line"in other investments in the pany believes this change is preferable because it pn>- Statement of Financial Position and in the Statement of vides a better mat (hing of puxluction costs with ictatal Earnings. iesenues in icixnting openuing results. In accoidam e Companies in whit h GE owns between 205i aixi 505; with genemlly accepted accounting principles, the cumu-(asso lated companies) are also induded on a "one line" Laive eflect of this(hange li>r peii<xis prior toJanuary 1, basis. 1987 (5N1 million after pimiding for taxes of 5215 mil-Sales. A sale is recorded w hen title pawes to custourrs lionHnhown sepanucly in the 1987 column in the State-nwnt Eaniings on [uge 25. Thes e wauittually no or w hen senices m e perlimne(1 in accordan(e w ith elfect Irom th,is change on 1987 results after recordmg contracts. the cumulathe clint,amt the pro fonna elInt on prior Income taxes. Statenwnt of Financial Accounting Stan-years results was immaterial. (Luds (SFAS) No. 90 "An ounting for income Taxes" was issued bv the Financial Accoun'ing Stai tants Ihnd Depreciation, depletion and amorti:ation. Tile cost t in Dec emheI 1987. A requirement of SFAS 96 is that of inost inanuf actunng platit aixl equipinent is acpre-( U"I "d"M "" "" k'"fid "*d"d b"@f actunng pLmt* defenul tax liabilities or assets at Ihe eixi of ea(h mini 1 sunu>f-the-> cai s digus nmula. If manu will be detennined ming the tax rate ex1rcted to be in ".nd aguipnwnt inub n1 to ahnonnal noimmic c omb-i cifn1 w hen taxes aie actually juid or ic(overed. An oni-nous or obsolmnceauhh,nonal depicuanon is ingly, umler the new ndes, income tax expense pnni-sions w ill increase or decicase in the ome period in in ovided. w hic h a change in tax rates is enacted. Pres ious ndes ret;uired pmviding defenul taxes using rates in effnt w hen the tax asset or liability w as liist iennded, without subsequent adjusunent solely tbr tax nue < hanges. In omfiinnity with SYAS 96 inunition ndes, GE has elet tnl to adopt the new income tax an ounting in 1987. The < umulathe ofint toJanuary 1,1987 (S39 million foi 37

Subsequent to the acquisition of RCA, GE has soki or 2 EA acquisiten andrelatedmatters otherwise divested a number of RCA and NllC opera-tions whose activities wew not compatible with GE's long-range strategic plans ami which were not material to GE's OnJune 9,1986, GE acquired RCA Corporation anxi its operating resuhs or financial position.These included subsidiaiies (RCA)in a inms,nnon for which the total activities im olving atulio tales aml reconis, carpets aixi consideration to fonner RCA sharehoklers was $6,406 an insunmce subsidiary sokiin 1986. Dispositions in million in nish. RCA businesses inchalat ihe manufac. 1987 included a "new pnxiuns" division, the David ture aixl sale of a wide range of electronic pnxtucts anxi Sarnoff Reseanch Center and NIlC's nulio networks. related research and services for consumer, commential, On December 31,1987, GE amt a F ench electronics military aixl space applications; the National llnxulcist-company, Thomson, S. A., completed a t nunaaion in ing Com[uny's (NilC) radio ami television stations and w hich GE acquired Thomson's medical equipment busi-netwot k bnxulcasting sen ices; aint domestic ami intenu-ness (CGR) ami Thomson acquired most of GE's con-tional message ami data communinuions sen ices. sumer electronics business. CGR's sales of about $800 The acquisition was accounted for as a purchase, aml million annually come mainly from digital x-ray, mam-the operating iesults of RCA have been consolidated mography, computed tomography, ultnisotu x! arul re-witly those of GE sinceJ une 1,1986. The puit hase price lated sales ami service in Europe ami latin America. GE's ($6,426 million, including $20 million of related costs) consumer electnmics business included mainly GE amt has been allocated to the assets amiliabilities of RCA RCA bnux! televidon sets, VCRs axi audio pnxlucts with based on apprais;d anxl evaluation studies com[,leted sales of alxmt $3 billion annually. GE will continue for during 1987. The excess of purchase price over the esti-some time to receive royalty income from [utents relatal mate of fair values of net assets acquired (guxlwill) was to consumer electronics pnxiucts. Other closings, princi- $3.7 billion, which is being amonized on a straight-line pally related to offshore consume electronics operations, basis over 40 > cars, will occur in 1988. CGR's assets and liabilities are in-Unaudited pro forma consolidated results of opera. cluded in GE's December 31,1987 Statement of Finan-tions for the years 1986 ami 1985, assuming RCA had cial Position lused on preliminary, estimated data whic h been acquired at the beginning ofeach perial, are are subject to more complete review ami evahution in shown below. 1988. Consumer cleuronics' assets ami liabilities have been removed from GE's 1987 ycar-emi balances. The Proforma comolidated operatio" net asset value of the offshore opemtions to be sold to EiIirIl$l$ Thomson in 1988 was cirried in "ot her im estments" at 1986 1983 1987 year emi. D D Also in 1987, GE reat hed a definitive agreement to sell an gs Net earnings per share 2.71 2.36 RCA Glolul Communications, Inc. (RCA Globcom) to MCI Communications Corporation for $160 million Dese pro fonna operating resuhs were prepared in in cash. Closing of the inmsauion, which is dependent 1986 based on estimates and assumptions induding pur-on approval by cenain U.S. govenmient agendes,is (hase pdce alkication. Final pun hase price alkicatio" expected in the first half of 1988. wouki not have c hanged the pn> fonna resuhs signifi-cantly.Such pro fonna resuhs are not necessarily itxiica-tive of the consolidated resuhs which wouki have been re[xmniif the RCA acquisition had actually occurral at Supplemental cost detais (excluding unusualitems) the beginning of eac h respectis e perimi presented or which may be ieported in the future. Supplemental (ost detaih are shown.m the table below. In acconlance with agn ements with agenties of the Supe,lemeet cost detail, United States government, GE was required to sell its (in rhillione 1987 1986 1985 milit.u y vidicon business (whk h sale was completed m nnpbwe mnmensaion,indmling 1986). Ilowes er, a U.S. Federal Conununications Cmn-N=ial&surin taes aix!orber mission outer requiring divestitut e of fis e radio statioin heirht$ 512,139 $11,775 $1n,168 ow twd by NilC by Da ember 1987 is temponuily stayed. UCP"@'ulepletion aix! amonwinn 1,544 1, tr.o 1,2 i9 Comp.m r.lmuled nvan h aiul devel,purnt 1,194 1,N x) 1,nn9 Ntainien.ux e uml repain 840 803 692 Nuial Nxurin tasm 727 725 626 Aih enising 495 181 367 Taxes. enept N a Li Nx urit y aval t hose on inwnr 289 23s 217 38

during the year is the [x>rtion of the pnjetted benefit obligation that is attributed to employee senice during P>gshns and otherretiree benefits ihe year.This cost metlux1 recogniecs the elfcct of future compensation and scivice in prointing the futuie bene-GE aixlits afTiliates sixmmr a number of pension aixl fits, aixlit had been used for the GE Plan aixl RCA Plan 'other retin e benefit plans.This note summarizes imix>r-before adoption of SFAS 87. tant financial aspects of G E's obligations li>r these plans. In addition, SFAS 87 establishes a "tmnsition gaia." Measurements of obligations atxt costs are based on actu-This is the excess atJanuary 1,1986 of the cunt nt fitir arial calculations intoh ing various assumptions as to fu. market udue of plan assets over the plan's projected ben-ture events. efit obligation.This tnmsition gain is being amortiied > Theprincipalpensionplans are the Geneml Electric over 15 years, except that such excess fi>rihe RCA Plan Pension Plan (GE Plan), the RCA Retirement Plan 'RCA has been remgnual as an asset in accounting for :he Plan) aix! Qe Gerwral Elatric Supplementary Pension RCA acquisition. Plan (GE Supplementary Plan). Disdosures in this note Gains arxl losses tlut acur because actual exper knce include the RCA Plan from June 1,1986. Other pension dilfers from that assumed are amortized m er the average plans are slx>nsor ed by doniestic anxi fi> reign affiliates, future-senice peiiod of employees. Prior-senice cost for but these aie not considered to be significant imlividually changes in pension benefits which are allomble to pre-orin the aggregate to GE's financial x>sition. vi<nis sen ice of em ploy ees are amoniini in the sanw l manner The GE Plan covers substantially all employees in the Actuarial assumptions fi>r the principal pension plans Lnued States except RCA empiovees. Genendly, benef.its indude 8.5% for lxith the assumed dismunt rate used to are basemm the greater of a f ormula recognumg career detennine the present value of future benefits anxl the earnings ora fonnula recogniiing length of service a xt expected long-tenn rate of return on plan assets in 1987 Imal as erage earnings. GE P!an benefys are iundal eux! 1986 (the GE Plan used 8.0G in 1985 exduding the through the Genend Electnc Pension Fmst (GE rnist). elTect of a dedicated xntfblio). The assumed rate of at-1 At the end of 198,, approxunately 203,300 employees erage future increases in pension benefit compensation were covered by the GE Pl m, approximately 72,100 for-was 6.59 in 1987 and 1986 (the GE Plan used 79 in me employees with vested n,ghts were entitled to f uture 1985)' benefits and approximately 126,800 retirees or benefici-aries were recching twnefits. Employer costs fbr the principal pens.on plans wer e $25 million in 1987, $ 143 million in 1986, aml S 179 mil-The RC4 Plan cosers substannally all RCA employees. m lim in 1985. GE Plwm for 1987 were lower than for the t'mted States. Genendly, benefits aie based on the 1986 maintv because of continuing recognition of fawr-greater of a funnula recognumg car eer canungs or a able imestment perfonnance. Costs fbr 1986 were lower lonnula recogniiing length of sen ice aixl hnal as erage dan k 198-) becausc ofihe 1986 adoption of SFAS 87 earnings. RCA Plan benefits aie fuixled through the and the changes in assumed dismunt and Irnelit mm-RCA Retirement Plan Master frust (RCA Trust). At the pensation increase rates. I he impact on 19%, cost of. cud of 198,, approumately 31,800 employees were mv-adopting SFAS 87 aixl the rate c hanges was equal to ern! by the RCA Plan, approximately 37,800 lbnner em- $81 million (9 cents [wr shat e) and $79 million (8.5 cents ployees with s ested nghts were entitled to Iuture benehts per shaic), iespectis ely, after remgnizing inwme tax ef. anxl rpproximately 15,100 retirees or benehaanes were f :ts and govenunent cost reimbursement. in eivmg benehts. Mihr 1987 cost (br the principal lwmion plans are The GE Ss.pplementary Plan is an unfumled plan pn" shown in the next table. viding supplementat y retit ement benefits primarily 'o higher-les el, 'onger-senice GE manage ment aixl profes. costforprincipalpension plans O n inEone 1987 IM sional employees in the United States. At the eix! of 1987, approxin.ately 3,100 employees w cre eligible for Itench' u^t Io' seni< e <iniing the tear S 385 $ 319 this plim anxl appmximately 3,800 setirees or benefici-I"'C"" " ^' "" P" d" '" U'" * "W d' i"" I'I87 l'U M M Rn ogniini murn on plan awds (b293) (1,n67) anes wcre en civmg benefits. Net amoitiration (258) (213) GE adopted Statement ofFinancial Accounting sa pension uni s 25 $ l13 Standards No. 87 (SFA S 87) for pemion au ou nting ef-Details of reiuin on plan awis: lecthejar.uary 1,1986 SFAS 87 injuites use of Ihe pro-u,ulinum on plan aw ts 51,237 $ 2,739 jetted ruit n edit cost inctlu xi to deter initw the pio-Kn ognient ieturn nii plan aweis 0,293) 0.n67) ja ted lwncfit ouligation aiwl plan mst. 'lhe ln ojntal Annunt def enni to lumre paimis 5 (56) $ 1.672 benefit obligation is 'he actuarial piesent value of the pmtion of pn!jnted future lwncfits that is attiibuted to Rewgniiniictm n on plan assets is detennined by apply-employee sen ice to date. The benefit mst for seni(e ing the expn ted long-term nue ofictui n te die maiLet-irlated value of assets. 39

ThefundingpoNcy fbr the GE Plan aixt RCA Plan is to net expciience gains resultal principally from favomble . contribute amounts sulTicient to meet minimum fuixting investment perfmmance. Umecognized prior service y requirements set Ibrth in U.S. employee benefit anxl tax cost iixludes the effect of aJanuary 1,1988 lx.nclit in. E laws plus such a(klitional amounts as GE may detennine crease to GE pensioirrs wlm retirnt befinejuly 1,1985. to be appropriate from time to time, Covered employees GE Trust and RCA 7Fust assets, w hich are not umsoli-also make contributions towani funding of the plans. dated with General Electric Company assets, consist A nwasure of the fumling status fbr an ongoing plan mainly of conunon su&ml limt incmne investments. comlxtres the maiket-related value of assets with the GE common sax k hekt by these Tnists totalnl $137 mil-projected benefit obligation.The market related value of lion at the eixi of 1987, A summary of changes in net assetus based on amoniini cost plus recognition oser assets of the GE Trust follows. five yeais of maiket appreciation aix! depreciation in the [xntfblio. GE belies es the market related value of assets is CE 7tust - change in net assets at currentfair nearket enlue umre realistic than current fair market value because the On millions) 1987 1986 1985 markekrelated value reduces the impact of short-teim Net awets at January I $16,671 $14,362 $11.350 E"'i o>cr centributions 102 91 13 1 d inarket lluctuations. A smumary (br the GE Plan fbliows. Emi oytecontributions 102 91 107 d GE Plan -funding stetus Im estment inconw induding December 31 On millions) 1987 1986 1933 market apprniation 1,053 2,700 2,968 E" Mar Let-related value of awns $15,180 $13.311 $10,921 Projeded Irnefit oldigation 12,966 11,965 11.598 Net awets at December 31 $17,273 $16.671 $14.362 For the RCA Plan, the projeded benefit obligation The cun ent fair market value of RCA Trust net assets was $2.218 million and the man ket-rel3:nl value of assets was $2,815 million at December 31,1987 (S2.876 million was $2A83 million at the eixi of 1987 ($2,586 million and at December 31,1986). $2,330 million, respectively, at the eixt of 1986). The de- > Prs.ncupal reh.ree heahh care and Hfe insurance: crease in the projected benefit obh.gation was pnnapally M.atxt.ts afliliates have a number of plans providing the resuh of business dispositions. A schedule reconciling the projected benefit obligation retiree health care and life insurance benehts. GE's ag- . Ihr principal pension plans with GE's ieconled pension gn g te cost Ihr the priinipal GE aixl RCA plans was $278 million in 1987, S8I illion in 1986 and $74 mil-liability is shown below. lion in 1985. The cost for 1987 is significantly higher & conciliation ofprojected bencjit obligation with beamse the 1986 cost inuluded the favorable nonrecur-pension liabilityforprincipalpension plans ring impact of raising ihe assumnl discount rate used Io Det emler 31 (In milliom) 1987 1956 determine the present value of future life aixl health Pndet ail heirfit otAigation $ 15,494 $11,816 benefits, aiul the 1985 cost iinludal ihe favorable non-less omvent fair m.u ket value of Tnnt awets (20,088) (19,517) t ecurring impact of(hanging the monality assumptions Unrcongnized SI AS M7 transition gain 2,00G 2,151 tised to d'etermme life insurance resen es. - RCA han valuation adiminent for future tax ef fet ts ami government ont reimbursement 249 162 Generally, GE and RCA employees who tetire or ter-Other unnmgnized net experiem e gains 2,416 2,538 minate after qualifying fbr optional cady retircincitt tin. L'unwgninxl prior-senite unt (265) der the GE Plan or RCA Plan are eligible to lxuticipate in Retorded prepaid pension awets 573 218 t he corres[xnuling ictirce health care aixi life insu nmce Retonfed pemion liability $ 379 $ 37I plans. Ilealth aire benefits Ior e igible ictirees under age l 65 aix! eligible depcixlents are induded in costs as cov-The poition of the proje ted benefit oblipuion repre-cred expenses are actually incun ed. For eligible ietirees senting the accumulatal benefit obligation was $ 13,176 and s[xmses m er age 65,' health care benefits are fmxini l million anxi $12,258 tuillion at the cixi of 1987 aixl 1986, or accnini and induded in costs in the year the retiree i respntively, aixt the s ested benefit obligation was becomes eligible for benefits. The prednt value oflife l $12,835 million aml $ 11,958 million at the eix! of 1987 insurance benefits f or cligible retirees is imxlal aixi in-anxi 1986, respeniseiy. These amounts are based only on dudal in costs in the year ofictirement. compensation ami sen i< e to date. Other unnrogniin! Siost retiices outside the United States are cmeied by gosernnwnt programs aml GE's cmt for stu h ietiice health care ami life insunux e is not significant. 40

( l i marketing actisities awl reducing foreign ami domestic risk exixisures. These pnn isions indude costs of mtion-Otherincome alizing aixl imprming a large ntunber of pnxtuction fa-cilities, rearranging pnxtuci on actisities among a nmn. i (In millions) 1987 1986 1985 ber of existing plants, anal t eorganizing, phasing out or Royalty atxt technicalagreenrnts $283 $ 232 $ 78 ot henvise conduding other actisities no longer consid-Mar Letable securities anil bank cred essential to the coixluct of the Company's business, delmsits 133 316 258 in addition to restructuring activities, unusual expenses Associated companies 61 42 37 in 1985 in:luded a special one-time cash [uyment to Customer financing 52 78 66 houdy union employees,in acconlance with new union Other imestnrnts: Interest 15 62 23 contracts, as wdlas to certain other houtly and non-Disideixts 4 II II Other suixiry items 100 272 68 exempt dan.d em[hges. $648 $1.0l3 $54I proyj$icitlDrincome taxes (excludmg extraordinaryitem and cumulative effect income from n>yalty anxl technical agr ements increased of changes in accounting principles) substantially in 1986 because of the au[uisition of RCA. summmma GE will retain a majmity interest in RCA's royMty inceme > S.igmficant com[xments of the nonnal provision for m.- from patents related to consumer electronics pnxtucts for several years. Other sundry items mcluded gains of come taxes by taxmgjunsdiction are shown below. $8 million, $178 million and $38 million in 1987,1986 Proeisionferincome tnres arxl 1985, res[xctively, from sales of portions of the (In millions) 1987 1986 1985 Company's long-held passive im estment in equity securi-U.S. federalincome taxes: f thi2 5 812 ties of Toshiba Coqx> ration. Estimated anmunt iuyable $ 956 Deferred tax expense (benefit) (65). ' 00) 90 6 Interestandotherfinancialcharges Im estment credit deferred (amortized)- net (87 ,39 35 ~5) j, 9m Foreign income taxes: Interest capitalized, principally on major property, plant Estimated anmunt payable 197 198 '35 and equipment projects, was $23 million in 1987,$38 Defeired tax extense (henent) 8 <2 0 01) million in 1986 aml $32 million in 1985. 205 174 131 Other (principally state anxi hical 7 (hiusualitems imome taxes) 79 97 45 $1,088 $ 1.200 $ 1.143 Unusual items include: gains from disinsition of cenain > Deferred income taxes for 1987 iellect the impat t of assets w hic h management has detennined are not com. "temporary differences" between the amount of assets pienentary to the Company's future business fbcus and liabilities for financial re[mning purposes and such (other than s des of certain assets acquired Gom RCA); amounts as measured by tax laws and regulations. These arxl pretax costs or expense provisions for num(rous dif. "temporary difTerences" are detennined in acconlant e ferent types of transactions or activities which au gener. with Statement of Financial Accounting Starxlards ally unique or occur only infrequativ. No. 96 (see note 1) aixt are more inclusive in naun than There were no unusual gaim in 19'87. In 1986, unu. "timing differences" as detennineil urxler previhsly ap-sual gains ($50 million) arose from the sale of a small plicable generally accepted accounting principles. De-fbreign af tiline arxl adjustments to previous unusual dis. fenulincome taxes for 1986 and 1985 have nonwen losition prov.sions. In 1985, unusual gains were $51g restated. Principal items making up the defen ed U.S. million, of whic h $247 million was from disposition of federal income tax provisions fbliow. residual GE interests in cenain Australian coal pnyper-gg ties, $132 nulhon was from disposmon of GE s residual increase (deucase) in provision for inwmc taxes interest in a cablevision company, am! $ 139 million was (in millions) 1987 1986 1985 from adjustmer.ts to previous unusual dit[msition pnni-Tax m er hool depreciation $ 18 $ 87 $121 sions. During the year in whit h each of the dispmitions Margin on inst.dhnent sales (16) (33) as (:rcuned, there was no significant cfTect on GE's operat-Prmisbn for warranties 9 (27) 23 ing sesults from these disposed assets prior to dis [msition. Prmision for pemions 10 (52) t171) ' Principal unusual costs wer e expense provisions fbr Other e t (86) (70) iM corporate restructurings-$1,027 million in 1987,$311 $g $3 $2 million in 1986 aml $47 million in 1985. These weie for the expenses of iefocusing a wide variety of bminess aixl 41

9 (}[h f 7 4 ?My 7 L t q Other-net includes a number of temix>rary dilfeiences > liased on the lomtion (not taxingjurivliction) of the [ [ such as timse ietated to various portions ofimnsactiom G E business pr oviding goods or sen ices, domestic in-imuhing business dispositions anci iestructuring expense come before taxes, extmordinary item aixl cumulative ef- [ prosisions. fc( t of t hanges in accounting priiniples was 52,690 mil-lion in 1987(53,081 million in 1986 aid $'i,232 million = > The L,.S. investment tax credit (1.I C) was repealed. w m 1985)..The coirespomling amounts for, fineign b.ned with some transitional cueptions. cfi.nnve january 1, oI>emtions were S517 m.dlion, SGI I milh.on ami S 188 iml-d 1986. I.FC.m 1986amt 1985 had aggiegated S 19 m. lion h.on m each of the last three yeais, respatis ely. 4 and $ 11 I nu.llion, respe( tively, mx!'the amounts addal to net earning became of G E's ' deferral from prior y ears > Gencial Electric Financial Setvices, Inc. (GEFS) n a / weie SM mihn in 1986 aix! $76 million in 1985. As a imuconsolidated affiliate for financial repnting but is in- '4 i resuh of the accounting (hange in 198,, unamoitued chuled in GE's consolidated U.S. fedemlincome tax re-7 ITC is treated as a tenyxnary diffeie nce for defen cd tax turn. Taxes payable by the consolidated c ompmies i, accounting. Accordingly.S32 million was added ro 1987 shown in this note exdude the elfe(t of significant tax E earnings before extraonlinary item and cumulative effect credits ami deduc tions of GEFS, whic h arise piimarily of, Aanges in accounting principles. The iemaining un-from leasing activities. GE aixi GEFS togeeher had net I amortiied ITC hdance of S 191 million (net of defen cd taxes payable Ihr 1987,1986 and 1985. Existing leases of (- tax) m year-Al lG87 wiU by added to income in future GEFS will generate taxable income in future years, whic h is provided for in the deferred income taxes of GEFS E s eai s. i (see note 15). At December 31,1987,1986 and 1985, tax >.The U.S. federal statutoiy tax nupn coipmaions was crata. canpomanh totaling $168 milh. on, 275 million 3 4051 in 1987,down from 4d9 in each of the two pic-E and $358 mdlion, res;x ctis cly, were recoided by GEF5 as siom years. GE,s nonnal effectise tax rate (prm mon fo. r a partial oli. set to deferred taxes.1 or financial repnting income taxes as a percentage of earnings before income purposes, GEFS investment tax credit carry lbnvard tas es, extraordinary item and cumulative effn i of ( hanges in accounting principles) was 33.9% in 1987 ".mounu an amon int to earnnI incoine om ime ps v. 'n are investment tau red, s currently usable). (or a (ompaied with 32.551 in 1986 and 33.39 in 1985. A tax purp,ses, they wdl be of fset against taxes payable m I summary of reasons fbr dif ferences between the statu-the Iutun. ( / tory nue'aixi GE's cffective mte follows. Diferences betums U.S.federalstatsdory and GE efecHn tax rates I987 l986 I985 = Cash Bndmarketable StCurities U.S. federal eatutory rate -10.0 9 46.09 46.09 gesumispus Deposits restricted as to uMe m! withdmwal or toed as h f I ca i (beforc extraordinary item atwl parual compeination for shcrt-term honowmg at mnge- [ cumulathe eth ct of auounting ments were not material. // < hange)in conmlidated befor e-C.u rying value of mai ketable securities was substan-tu tor me on an afice ' vis (6.9) (c. 3) 15.5) tially the same as mar ket value at year-end 1987 mal [ Vanite"auvresof cons ..cd W86' aflih.ucs(poWipdly f( t ign) (3.7) (2.2) (3 6) r Imesturnt e x onht (2.7) g2.3) t2.2) t tru nur tavst (apital gains n.te (0.6) (1.1) (0.2) Varying swes on unu ualitems 0.8 (0.4) (0.6) J Cutrfint recelirables p Cunent-> car effni of income tax mg auountmp hange 4.1 i All other - net 2.9 (0.9) to.6) De ember 31 Gn milhom) 1987 19s6 GE efin the tax rate 33.9 9 32.59 33.3 9 Rn eivable t rom. Custornen $5.463 3 5 "< 18 "='" Asniated compmics 155 178 F > Prm.. mon has been made f or U.S. federal. income taxes wnmnaatal ahars 100 13 to be paid on that p ution ofIhe uixlist:ibuted earnings Othen 1,274

1. M of afliliates aixl assa iated companics expecial to Ir ie' 6,992 7.361 mitted to the pat ent (ompm). Undist ibuted earnings im allow ant e for imes (210)

(156) inteixlnl to bc s einvested indefinitely in alliliates atxl as- $6,782 $7.208 sm uted companies totalnt S 1,318 million, $1,063 mil-tion amI $961 inillion at ti e eml of 1987,1986 and 1985, ies[wiisely. It is estimatal that lin cign tax n edit s uould appioximately of het the U.S. taxes piyable il these earn-ings w cre to be diso ibutal. Z 42 r

)9 3'

gy y. m, i d sy [ h f) e sE Inventories Q' m' w feds heffhthusiness development m 1 m Daember 31 (In millions) } 19M bt Funds hekt li)r lootiev-tr In tuture busiiv:ss developnient ~ Raw materials and work in pnxess S 5,5S S 4.303 are invested in a Oliety of securities, piincipally state, finishal go(xis p 2,546 2,3 A county and municipal bonds and corporate prefen cd , Unbillal shipments ) 280 hii. stocks. Estimated realimble value of these investments

K(8,311-6,913 was alxw die same as cost at December 31,1987 and

.lcss revaluation to l.lFO 2,076) (1,752) gggg q .n 1.lFO valucofimentories ' $ 6,265 $ 5,ltil - > Sce note I forinfonnation albut thechangein inven-toindnunting in Ih'f 7, Otherinvestments m > 1.lFO tevaluations inc'reased $324 million in 1987, Ikx emtwr 31 (In milHons) 1987 1986 mostly redted to the accounting chtg c.dlJ FO revalua-tions'dcrglised by $104 million and $1il million during 'N""'""*hd"'#" "'i"I '*"I'#5 "IIIlid'"* I ) 8M 53'"54 1f B6 amY 1985, respectively. Included in the; klerrens a ^""'I 'Cd "'nipanies (a) 928 414 vx re 551 million and S 128'million (1986 and $85, re-hh cud"c""5 i"VeM"'ent5 ( ' C"" b Y 'vely) due to lower inventory lev.'t;, nuinly in power; N""*'"'"d**'""*"'*"'"**"I A xturnies 169 iei 1150,in 1986 aml 1985, there vere net cunent-er ( 457 238 'lecreases. About 737c of tot:Iinventories is 626 435 g the 1.lFO method ofinventory accounting. Starketa,e y uity securities (c) 90 74 I[ IrssalloEabe for losses _{75) (63) -/ i ~ $3.621 $3.9) i Cu ?t$erty plant andequipment N / (a) Inc' ufes advance at Det ember 31,1987 >f $ 130 million (tn mi%ns) 1987 ,gi (rx mnsolidated financial sen ices af filiates) anxi S-15 million i (asvxiated com[unies). Afa.tordassesat December 3h d S,, (b) Estdnted realiialle value ainut ihe same as cost at scar cixl. Af anufact uring plant anxl eqaipment (,j, Cdh cost. Ag regate market value was $86 miilion and land ar.d improvements $ 232 $ 271 i $65 indion at vear.cix11987 as,d l986, respa tisely. Gross I Building, structures and related .,/ 4.087 iw ere $18 million at tkrend>cr 31,1987. unrealized gains w cre $ 14 million anxi gross unrealized losses ap!praent , 4,127 , 9 hiachinery and a)uipment 12,616 12,061 lease:i61d costs aixi manufacturing f196 Ndsunent in nonconwi lated financiai scivices alliliates s plaat mxler constmcrion -1,140 predominately reprdenis GE's investment in General Oih xlgqproperties 801 r.15 Electric Financial UJices, Inc. (GEFS). See note 15 for / $18572 $ 18.371 financialinformatidn about this alliliate. Cost atJanary I ' $18,374 - $15,706 Addidons ajcquired with RCA 9 1,638 - ot).tr 1,"@ 2,012 Dis [wsitions (1,70!) (1,01 !) Other changes _ 121 (1) $18,572, $18.374 Cost at tktember 31 Accumulateddeprecialion, depletion andamordlation 4 / Italan(eatJanuary 1 $ 8,LS? 5 7,806 Current year provisay 1,:M

.160 Dispositio a 5

(1,065) (~36) Other thanges 305 3 Italance at Ikrer Ac-31 ) i< $ 9,317 $ N.533 i Property, plant ard equipwnt less depreciatson, depletim md amortizcation at Dn ember W $ 9,255. $ 9,8 Il ~ ._t L ~ - r, 8 f \\ s/ .i i 43 '{ \\ u

General Electric Rnancial Services, Inc. Genem! Electric Financial Sen ices, Inc. (GEFS) includes come tax return. Condensed consolidated fmancial state-wholly o"ined G E Capital Corpomtion (G ECC) and Em-ments for GEFS follow, which include opemtions of players Reinsumnce Cwporation (ERC) and an 80% in-Kidder fnnn date of acquisition (June 1986). terest in Kidder, Pealxxty Group Inc. (Kidder). During See note I for information about the 1987 change in the nonnal course of business, GEFS and its alliliates accounting for income taxes. have minor transactions with GE and cenain ofits con- .5 fore infonnation about GEFS is in its annual re[xnt, solidated af filiates. Vinually all pnxlucts fmanced by which may be obtained from General Electric Financial GECC are manufactured by companics other than GE. Senices, Inc., P.O. Box 8300, Stamford, Conn. 06901, GEFS is included in GE's consolidated U.S. federal in-General Electric Financial Services, Inc, and consolidated afiliates Current and retained earnings Financialposition Ii>r the year (In millions) 1987 1986 1985 Iksember 31 (In nullions) 1987 1986 Eanxxlincome: Financing receivables: Earned inu>nr from operations $8,225 $5,976 $3,805 Time sales anxi loans, net of deferrn! Effc(t on imestment in leveraged income $18,560 $14,930 leases of(hange in tax-rate Investnxot in financing leases 10,114 8.317 assumptions (172) Total f.nancing rec civables 28,674 23,277 Sale of stock by nonconsolidated Allowance for losses (743) (603) alliliate 10 Finandng receivables-net 27,931 22,674 Total eauxxiincome 8,225 5.814 3,805 Cash.axi shon-tenn imestments 709 105 Expenses: 5!atLetable securities at anst 4,495 3,680 Interest and discount expense 3,277 2,063 1,339 Af arketable securities at market 4,000 5,Gl6 Operating and admimstrative Securities purchased under agreements expense 2,024 1,112 771 m resell 12,889 12,961 losses and polics holder benefits of Other r eceivables-c.et 4,611 4,325 insurance altiliates 1,560 1,139 876 Equipment on operating leases-net 3,399 1,726 Prmision for k>sses on financing Other assets 3,342 2,406 receivables 290 558 185 Total assets $61,406 $53.823 Depreciation aixl amonization 411 403 210 Pr ovision fiar unusual expenses Notes parable: and restructuring a(tisities 91 Due within onc > car $22,848 $17,7II 'liwal expenses 7,653 5.875 3.381 lang-tenn 8,037 5,656 Secunues sold under agreements Earnings (loss) befon income taxes-to repurchase 13,187 13,070 extraonlinary item and (umulatn e Sc(urines sold but not yet pun based elfect of change m accountmg at market 1,407 3,525 principle 572 (61) 421 Reserves ofinsurance afhhates 3,549 2,880 Prmision for income taxes: Other liabilities 4,639 1.076 income tax provision ((nxlit) from 'lixalliabilities 53,667 46.918 operatmnt 20 (173) 11 Defennt income tans 3,720 3.838 ElTect on income taxes of(bange l in tax-rate assumptions for Defen ed investment tax (redits 39 43 j les craged leases (392) Capital sta l I i 'linal pnnision (credit) for Additional paid-in capital 1,347 1,347 inconw taxes 20 (565) 1I Retamed canungs 2,651 1313 Other (19) 3 Earnings beforc extraordinary item atxl cumulative elTect of change in Equity 3,980 2,101 l accounting principle 552 501 413 'listal liabilities, defen cd tax items Extraonlinary item - GECC loss on and equity $61,406 $53.823 early extinguishment of(ertain long-term debt (net of tax c edit - $39 million) (62) Cumulatise eIfe(t toJanuary 1,1987 of initial ap;>lication of Statement of Financir Aco>untingStatulants No. 96- %tounting for huome Taxes" 518 Net earnings 1,008 501 113 Retaineti carnings at beginnmg of peri <xt 1,6r13 1,139 726 Retais uvi carnings at eixl of peric al $2,651 $1.613 $1,139 44

Intangible assets Short-term borrowings mumumune ammmmme Detember 31 (In millions) 1987 1986 December 31 (In milliom) 1987 1986 Cmlwill $3,820 $2,793 Average Average Otherintangibles 610 788 rate at mte at - $4,430 $3.581 Amount Dec. 31 Amount Dec. 31 General Electric 03mpmy: Accumulated amortization of goodwill was $30I million N"'c5 "ith t $l mxl $147 million at December 31,1987 and 1986 re- " ' "[#" T$ g

i,y>er spectively. Accumulated amortization ofotherintangi-Q>nsolidated at hliaie bles was $365 million and $308 million at December 31, b.eit borrowings 364 35.2 331 29.6 1987 and 1986, respectively. G<xxlwill and other intangi-Other,induding cunent bles were mainly from the RCA acquisition, for which Ixation oflong-term g<xxlwill is being amortized on a straight-line basis over honowings 426 223 40 years. The increase in g(xxlwill since December 31, SI'I 30 83 8'3 1986 represented primarily ihe increase in RCA go<xlwill (net of amortization) resulting from completion of ap-Other borrowings at December 31,1987 induded pmtsal and evaluation studies in 1987. Other intangibles anmunts borrowed from nonconsolidated aBiliates of and gocxlwill are being amortized over shorter periods as

$41 million ($ 146 million at December 31,1986). appmpriate, mnging from five years to 20 years. > The avemge balance of shmt-term Imrrowings, ex-cluding the current ponion oflong-term bonuwings, s 7 Otherassets was $1,492 million in 1987 (calculated by averaging nmnth-end balances for the year) compared with an av-sumammum crage balance of $3,200 million in 1986.The maximum December 31 (N millions) 1987 1986 lxilances in these calculations were S2,018 million at the C'" ""C C " E' Recoverable engineering uists on government contracts S 791 $ 405 tember 1986. The avemge worldwide effective interest Deferred inconw taxes 620 180 mte for the year 1987 was 13'4 and for 1986 was 8'J. Prepaid pension assets 573 2l8 Tliese average mtes represent total shott-term interest long-tenn receivables 569 555 incurred divided by the average balance outstanding. Television p.ogram costs 480 461 Defened(barges 416 318 > Although the total unused credit available to GE Real estate development projc(ts 130 169 through banks and commercial credit markets is not omomer financing 71 79 readily quantifiable, confirmed credit lines of almut $ l. I billion had been extended by 49 banks at year-end 1987. 83'

• 3237" Substantially all of these lines also.re available for use by GECC and GEFS in addition to their own credit lines.

.The National Broadcastmg Company capitah.ics pro-gram costs (including rights to broadcast) when paid or when a program is ready for broadcast, if earlier. These costs are amortized based upon projected revenues or Accountspayable exocnsed when a program is determined to have no value. December 31 (In millions) 1987 1986 Deferred income taxes at December 31,1987 included Trade accounts $2,105 $1.972 net current deferred tax assets of about $366 m] lion. Q>llectal for the au ount of others 279 312 Due to nonconsolidated albliates 231 28n $2,613 $2.591 Othercosts and expenses accrued; Otherliabilities mmmmmmm included in these accounts are wmpensation and benefit accruals lassified as cun'ent at year-etxl 1987 and 1986 of $777 million and S 1,067 million, respectively; and classified as noncun eut at the same year ends of $1, l 19 million and $895 million, respectively. 45

$84 million in 1988, $1,197 million in 1989,$24 million 2 .Long-termbotrowings in 1990,$822 million in 199I atx1 $390 million in 1992. These amounis are afler deducting debent ures which have been t eacquired for sinking-fund needs. Outstaniling thrember 31 (in millions) 1987 1986 7%% Notes Due 1989 $ 500 $ 500 674% Notes I)ue til89 500 500 Share owners, equity 12%% Australian th>llar Notes Due 1989(a) 108 108 16%% Notes Due 19871989(b) 35 85 II%% Notes Due 19')o(b) 75 Prefeired stoc k up to 50,000,000 shares ($1.00 par value) 5%% Notes Due 19721991 19 25 is autimrized, but no such shares have been issued. 6%% Notes Due 1991 500 500 Authorized shares of common stock (par value $0.63) 7%% Eum-dollar Notes Due 1991 300 300 total 1,100,000,000. a.30% Sinkmg Fmxt Debentures Due 1973 19'i2 31 31 Shares ofeommon stock 12%% Notes Due 1992 (b) 100 100 December 31 (In thousuxis) 1987 1986 1985 e% Notes Due 1992 250 5%W Euro->en Notes Due 1993 (c) 194 191 IssuedJanuary I 926,564 926,561 925.856 4%% EunxiolLir Discount Notes Due 1993 (h) 200 200 Shares for ixx> ling ofinterests 08 2%% Discount Notes Due 1991 (d)(h) 150 Issued December 31 926,564 926.561 926.561 7% Eunslollar Exteixlible Notes Due in treasury (23.611) (11.771) (14.612) 1998 (e)(i) 200 200 Outstaixling 902,953 911,790 911,952 8%% Debentures Due 1985-2001 217 217 8% Eunxiollar Exterxtible Notes Due Share owners' equity 2006 (f)(i) 300 300 (In millions) 1987 1986 1985 7%% Eum-dollar Extendible Notes Due Common stock issued 2006 (g)(i) 300 300 llalanceJanuary I $ 579 $ 579 $ 579 8%% Sinking l'und Ik4rntures Due 2016 300 300 Adjusmwnt for saxk split 5 fixtustrial desclopment borvis 225 2g flalance December 31 $ 581 $ 579 5 579 All other 59 tha $4,491 $ 1.351 Other et.pital llalanceJanuary I $ 733 $ Gil $ 610 ^ 5"stnx'nt fonuxL spht (5) (a) The unnpany has enternl into renain contracts w hi(h result . 3(","'"'I'"""""" in a fixed U.S. dollar inten st a>st of 7.67%. 135 75 (l8) tb) Debt originally incuned by RCA but for w hich GEis now the Unrealimi gains (losses) on obligor. securities bekt by imunux e (c) Notes are yen 35 billion at a fnni exchange nue of yen affiliates (23) (6) 15 180.41 => $U.S.1.00-Gam on treasury sux L dispositions (d)- Anomp;mied by sale of 3.570.000 warrar ts expiring Oil.cr ~ 30 23 I 8 December I,1989 to purt base shares of GE common stoc L at llalance December 31 $ 878 $ 733 $ 6II S 14.31 per share. GE has arranged for opnons on as sax L m order to predude any dilutioa fmm exenise of the wairants. Retained earnings llal uxeJanuary I $14,172 $12J61 $11,493 (c) Interest rate subject to annual mijmiment at the Company's f option beginningin 1989. Adjustments 1I (f) Interest rate subject to annual adjustnrnt at the Onnpam's Net canungs 2,915 2.192 2.277 option beginningin 1943. Divideixis declared (1,209) (1.081) (1.020) (g) Interest rate subject to annual adjustment at the unnpany's llalance Dec ember 31 $15,878 $11.172 $12J61 option beginning in 1991. Common stock held in treasury (h) hulud, gamortuauon ofon..gmat issue discount. the llalancejanuary 1 $ 375 $ 310 $ 313 m clfet tive interest rates are: 4 %% notes - s.119. 2 %% notes Purchases 846 318 283 - n6(6. Dispositions: (i) At annual mte adjustment dates, notes are redeemable in Employee nnings plans (118) (109) {l!3) w hole or in (un at ihe option of the Com]uny or repayable at Sax L options aint appreciation the option of thc hoklers-rights (96) (71) (b-1) Employ ee sox L ow nenhip > Allotherlong-term bomnvm.gs mclude on..gmat issue plan (39) (11) (13) [ premium atul discounts, an adjustment to bring I CA Disidend icimesonent and I 'Imrrowings at acquisition date to finir market value and a shaic puu hase plan (42) (33) (29) U "" d'"""" '" G E PC"'i"" variety of bonuwings by afTiliates and parent comIonents ? 'nnt l (25) (26) (22) with various interest mies and maturities. Amounts due to Onnenion of GEOCC hing-nonconsolidated affiliates were $ 10 million and S6 million tenn debt (24) (7) (25) at the end of 1987 and 1986, respectively. Incentise unopemation plans 13 1 10 Italaixe December 31 $ 860 $ 375 $ 310 > Long-tenu bonowing matmities during the next h.ve prm, including the portion classified as cun ent, are In Apn.l 198_/, share owners authori/ed (a) an increase in the number of authoriicd shares of conunon sux k from 46

550,000,000 shares each with a par value of $1.25 to number of shares availah!c li>r gmnting additional op-1,100,000,000 shares each with a par value of S.63; tions at the emt of 1987 was 15,118,111 (18,519,992 at (b)Ihe split of each presiously issued common share, the end of 1986). ' knluding shares beki in treasury, into two shares of com. Requirements for shares of saxk tbrincentive com-mon sux k each with a par value of S.63; and (c) an in. pensation plans as desa ibed in the Company's Pmxy crease in the number of authorized shares of prefened Statement may be met within cenain restriuions either stock from 2,000,000 shares with a par value of $1.00 per from unissued shares or fiom shares in treasury. share to 50,000,000 shares with a par value of $ 1.00 per As of December 31,1987, a total of 3,913 indisidaals share. All share data have been adjusted to rellett this were eligible to receis e allot ments under incentis e com-change. pensation plan rules. Allotments were made fi>r services in December 1985, GE issued 708,000 new shares of iendered dming 1987 to 3,138 employees. su>ck having a value of $2-1 million for an acquisition accounted fi>r as a 1xx> ling ofinterests. The beginning 1985 balance of retained earnings was increased by Commitments and contingent liabi# ties Sli nulhon fi>r this transaction. Ilusiness activities of most fintign alliliates are mainly At December 31,1987, the Company had mininunn based on the U.S. dollar, and the effect, which is not ma-rental wmmitments under noncancelable opeiating terial, of tmnslating their financial statements is included leases aggregating 52,296 million. Amounts payable over m current-year carmngs. Ilowever, the functional cur-the next five years are: 1988 -S I 18 million; 1989 - rency for a few afliliates is other than the U.S. dollar, and Sil2 million; 1990-ST>l million 1991 -S301 mil- ' the efkets of translating their financial statements are lion; and 1992- $238 million. included in other capital. Cumulative foreign currency Also at war-end 1987, NilC had approximately $1.21 translation adjustments were $166 million and $31 mil-billion of commitments to acquit e broadast material or lion of additions to other capital at December 31,1987 tht iights to broadcast television prognuns that icquire and 1986, respectively. At the end of 1985, there was a payments over the next five scars. S H million cumulative reduction. Other commitments and contingent liabilities, consist-ing of guarantees, pemling litigation, taxes and ather 23 Otherstock-relatedinformation daims,in the opinion of management, are not (on-sidned to be materialin relation to the Company's finan-cial position. Su>ck option plans, appreciation rights ami performance units are described in the Company's current Proxy Statement. Requhements (br sux k option shares may be met within ccitain restrictions either from unissued or treasury shares. During 1987, options were gmnted to 1,090 cmployees. As of December 31,1987, a total of 167 individuals were eligible to receive class-grant options and all exempt salaried employces weie eligible for spe-cial option gmnts. In total,1,738 penons held options exercisable at the end of 1987 or in the future. Stock opt *vn information Average per share Shares subject Option Starlet (Shares in thousaixis) to option price price llalanc e atjanuary 1,1987 21,519 $29.62 $ 13.00 Options grantc<l 2,908 47.83 17.83 Options exercise <l (2,251) 21.11 51.77 Optiom surretxlere<l on exertise of appretiation sights (3.276) 26.32 55.86 Options tenninate(1 (281) 37.71 ilaim(e at Decernber 31,1987 18.613 33.93 11.13 Outstamling options ami rights expire, and the awar d pe-riod for outstanding perihrmance units emis, on various dates fromjanuary 1,1988 to De(ember 18,1997. The 17 l

2 Industrysegmentdetails mummmusi Res enues itx hule innume f rom all soun es, i.e., Ixith sales practical to aguivalent commeicial selling pric es. Alx>ut of mulutts mxl senices to customers anxl other income. one-linnth of GE's external sales are to agencies of the i 1)etails of revenues for iixtustry segment iclx>rting are U.S. government, GE's largest single customer. Most of shown below, in genemi,it is GE x>licy to gnice sales these sales were aerospac e and aircmft engine pnxiucts i funn one Company comjxment to another as neatly as and sen ices. Revenues (In millions) For the > cars eixled Ikx center 31 Total r esenues Imersegment t es enues Externalies ennes 1987 1986 1985 1987 1986 1985 1987 1986 1985 Aerosp.nc $ 5,262 $ 1,318 $ 3.085 78 $ 73 $ 33 $ 5,181 $ 4,215 $ 3,052 Aircraf t engines 6,773 5,977 1,712 48 57 87 6,725 5,920 1,625 Consunwr pnxlutts 5,442 4,651 3,220 101 180 131 4,911 1,17 1 3,089 Financial servic es 631 585 199 632 385 199 Indust rial 4,707 1,711 1,762 607 596 a61 4,100 4,115 4,20I l 51ajor appliances 4,721 1,352 3,617 4,721 1,352 3,617 y Staterials 2,751 2,331 2,119 32 35 37 2,719 2.296 2,082 National linadcasting Com}uny 3,165 1,817 2 3,165 1,815 Ibwer 9 stems 4,995 5,262 5,82-1 125 185 213 4,870 5,0 s t a,a81 Tec hnical pr(xtutts aixl senic es 3,670 3,021 2,317 337 160 113 3,333 2,861 2,201 Allother 85 771 4 2 81 772 On[nate items aixi eliminations (1,288) (1,074) (915) (1,332) (1,290) (1,205) 44 216 2tK) Total $40,515 $36,'28 $29,2 80 $40,515 $36,728 $29.210 Assets Property, plant and equipment (in millions) At Ikxen.her 31 For the years eixled December 31 Depreciation, depletion Athlitions arxl amortization 1987 1986 1985 1987 1986(a) 1985 1987 1986 1985 Aentspace $ 4,131 $ 2,175 $ 1,367 $ 178 $ 311 $ 157 $ 151 $ 111 $ 81 Aircraf t engines 5,217 4,665 4,031 242 332 333 242 191 161 Consumer pnxturts 2,308 3,530 2,199 166 429 171 175 155 107 Financial senices 4,393 3,155 2,731 hutustrial 3,053 3,141 2,896 179 258 213 196 196 179 51ajor appliances 1,684 1,678 1,509 118 101 146 93 9/ t8 51aterials 3,891 3,t:92 3,276 380 608 551 211 969 911 National linudcasting Comjuny 3,839 3,385 113 385 61 28 Power >> stems 3,456 3,589 3,668 118 127 183 162 173 290 Technical puxtucts arxl senices 3,999 3,021 1,706 235 856 107 170 183 60 All other 95 231 1 95 3 8 O>rporate items anxl elnninatiom 2,854 2.119 2.773 48 175 92 80 53 19 Total $38,920 $31.591 $26,162 $1,778 $3.680 $1,953 $1,541 $ 1,160 $1,219 (a) Includes $1,638 million acquired with RCA. 1)etails of operating profit by industry segment and un-government, principally the 1)epaitment of !)clense and usualitems included in opemting profit can be fi>uixi on the National Aeronautics and Space Administration. pages 33 and 31, res1xx tively, of this re[xut. A summa:T > Aircraft engines and replacement p;nts are manutiic-description of eac h of the industry segments fiillows. tured and v>ld by GE li>r use in military mul c ommercial > Aerospace pnxlucts and senices sjxm eleuronics aircraft, fi>r use in naval ships and for use as industiial and mit n >eleu ronics, as ionic sy stems, ordnance systems, power sources. GE's military engines are used in a wide vehicle ajuipment, automated test systems, computer variety of aircraft that includes fighters, bombers, trans-sof: ware, simulation and control sy stems, sjxx ecmft, ixnts and helicopters. CF6 engines are used in the communication systems, radar, sonar and systems inte-Mct)onnell1)ougias 1)C-10,the Ainbus Industrie A300 gration. RCA aerospace and defense businesses comple-aixt the lh>cing 7 l More advanced CF6 engine nuxlels ment and add to GE's speanun of act ospace activities. has e been selec ted.o ixm cr the llocing 717 and 767, Most acrospace sales are to agencies of the United States the Airbus hxlustric A310, A300-600 and A330 aixl the Mci)onnell 1)ouglas MI)-11. Of growing imjx ntan(e is 18 L_ _.

the CF5156 engine fitmily preluced by thejoint com- > Industrialencompasses factory automation pnxtucts, . p.my of GE aix! SN EChi A of Fmnce. Applications in-semicoixluctors, motors, electrical equipment for iixlus-clude the lh>cing 737-300,737-100 aml 737-500, the trial anxi commercial const ruction, GE Supply Com1xmy re-engined Alclknmell Douglas DG-8 Super 70s aixi the aixt trans1xntation systems. Customers fiar these pnxi-re-engined llocing KC-135 military tanker. Advanced ucts generally inchule electrical distributon, original CFA!56 engine m(xlels are used fi>r the Airbus lixlustric equipment manufacturers aixi industrial crul usen.1 ac-A320 aint will he'ofTered on the long-mnge Air bus In-tory automation pnxtucts cover a broad range of electii-dustric A310. GE also pnxiucesjet engines fi>r executive cal aixl electronic prixtucts, including drive systems, with aiirraft aixl regional commuter airlines. emphasis on manufacturing aiul advanced engineering > Consumerproducts tbrough the emlof 1987 con. autoination applications. Semicoixtuctor opemtions pnr sisted mainly of sideo, audio aint lighting pnxluct. At Vide the latest solid-state technologies to other GE opem- ~ the eixi of 1987, video aixi audio product lines were soki t ons as well as to external customen. 51otors aixt motor-as part of a inmsaction with Timmson, S.A. (see note 2). related pnxiucts consist mainly of appliance moton aml G E will continue for some time to receive royalty income controls but also indude larger si/es of motors for a fmm patents related to these consumer electronics pnxl-bmad range ofiixtustrial users. Afotor pnxlucts are used ucts. Lighting products include a wide variety oflamps within GE arxl are also soki externally. Electiical distrilm- -incaiulescent, fluorescent, high-intensity, halogen aixt tion and control equipment is soki fi>r installation in com-specialty - as well as wiring devices aixi quartz pnxlucts. mercial, imlustrial ami residential facilities. G E Supply Alarkets ami customers are principally in the United ope tes a nationwide netwoi k of electrical su pply States, ahhough cenain foreign mai kets aie also served. houses. Trans[mnation systems inc hules diesel-electric These markets are extremely varied, ranging from d'xl electnc locomotives, tnmsit pmpulsion equipment, 'torized wheels fbr off-highway vehides, such as those househok! consumers to commercial anxi iminstrial eix! users amt original equipment manu facturers. Through med in mining opemtions, amhhilling drives. loconm-1987, this segment also inchales certain iormer GE inter-tives are soki piincipally to domestic and foreign rail-ests in cablevision ami bm.ulcasting as well as GE's Ibnner mads, while markets fbr other pnxlucts include state aix! small househoki appliance operations. Commencing in urban transit authorities and industrial users. 1988, a GE-owned TV station in Denver ami a recently > Major appliances includes both GE and Ilotix> int acquired TV station in afiami, Fla., will be relmned to-bmnds of kitchen and laumlry equipment, such as refrig-gether with GE's principal broadcasting interests owned crators, mnges, micmwave ovens, free /ers, dishwashers, by National llroadcasting Company. clothes washers and dryers,and room airconditioners. A > Financialservices' principal business is the wholly "18"Imnion of nujor appliance sales is to a variety of owned, nonconsolidated alTiliate, General Electric Finan, retail outlets. The other piincipal market consists of resi-cial Sen ices, Inc. (GEFS). GEFS owns all of the stock of dential buikling contmctors who install maior appliances Genend Electric Capital Corpomtion (GECC) and in new dwellings. A nationwide senice network supports Employen Reinturance Corpomtion (ERC) and 80% of GE's appliance business. the stock of Kidder, Pealxxly Group Inc. (Kidder). GECC in order to improve comparability, segment results primarily engages directiv or thmugh alTiliates in distri. have been ad, justed to include RCA appliance senice op-bution sales financing, commercial and industrial financ. emtions fromJune I to December 31,1986. Responsibil-ing, real estate financing and leveraged buyouts. Al. ity fbr these operations was assumed by GE Appliances though leasing has been a maior factor in GECC's gmwth and the opemtions' results are included in this segment in recent > cars, GECC has been actively changing its in-fhr 1987. In 1986, these operations were reixnted as pan vestment poniblio to place gremer emI asis on asset of the technical pnxtucts and senices segment. $h management and operation. ERC is a major [xuticipant > Materials includes high-perfbrmance enginecting in the propeny/casuab y reinsurance business in the plastics, silicones, superabrasives and laminates that are United States amt is expanding into offshore activities. sold to a diverse customer base (mainly manufacturen) in Kidder is an investment lxmking firm whose capabilities the United States and abroad. Niaterials also includes complement GECC's. Other smaller financial senices ac-Ladd Petroleum G rpomtion, an oil and natural gas de-tivities include: Genekan 1.imited, a nonconsolidated af-veloper and supplier with opemtions mainlyin the filiate which pmvides a variety of financial senices in United States. Canada; General Electric Real Fstate Credit Corpora-. > NationalBroadcasting Company (NilC) is the cur- - tion, a consolidated afliliate which is an eqmty mvestor '" rent leader in network television. NilC's principal busi-selected real estate development projects; and a few re-nesses ar e the furnishing within the United States of net-sidual investments of a consolidated venture capital cor-work television senices to afTiliated television stations, Inmtion, most of whose ponfolio was soki in 1987. the pnxluction oflive and reconied television prognuns and the opemtion, under Ikenses from the Fedeml Com-munications Commission (FCC), of seven VilF television 49

bnxulcasting stations anxi thire staixlard Ah! aixt five Fhl sold by GE aixi others; arul environmental systems li>r mdio broadcasting stations. The NilC Television Net-utilities. work is one of three competing major national commer- > Technicalproductsandservicesconsists of te(luml-cial broadcast television netwui ks aint seives more than ogy operations providing pnxtucts, systems aiul sen ices 900 segulady alliliated stations within the United States. gd a var iety ofcustomen. Ilusinesses in this segment in-The television stations NilC openites art located in Chi-(lude meciical systems mxt senices, communications ami cago, Clevelaixl, Denver, los Angeles, 'diami, New Yor k infonnation se[ vices, arul the Calma Company. Niedical aml Washington, D.C. The eight nulin broadcasting sta-systems inc hule magnetic i esonance (Ni R) scanneis, com-tions NilC owns aiul operates are located in Chicago, y;uted tomography (CT) scamiers, x-ray, nuclear imag-lloston, New York, San Francisco and Washington, D.C. ing, ultrasoumi, aixi other diagmistic equipment aint llroadcasting operations are subject to FCC regulation suppoiting sen ices sold to domestic ami li> reign hospi-aint station licensing.The FCC order requiring divesti-tais anxl medical facilities. The principal conununicuions tme of the ANI station in New York, the A.\\1 station in cations senices by GE A'g of domestic satellite business is the furnishin Chicago aixi F.\\1 stations in New Wi k, Chicago aiul mericom, whic h opemtes seven Washington is temix>mrily stayed. These divestitures are domestic satellites providing distribution sen ices li>r ca-not expected to have a material ef fect on GE's business, ble television, broadcast television aiul radio, ami voice, open tions or financial coixlition. video ami wideband data senices to agencies of the led-In 1988, this segment will be modified to reflect trans-eml govenunent. An af filiate (RCA Glolxum), w hic h fiir-fer of management resp msibility to NilC of two T\\'sta-nishes certain international communications sen ices, is tions which are owned by another GE subsidiary aixl expected to be sold in the first half of 1988. Common which have presiously been inchuled uith the consumer carrier senices of Americom aml Globcom are subject to pnxlucts segment. iegulation by the FCC. GE's mobile communications > Powersystems senes worldwide utility, industrial ami pn xlucts consist mainly of nmbile aixi hami-held Iwo-govenimental customers with pnxhnts fi>r the genera-way nulios, cellular telephones aml lainl-mobile cellular tion, tmnsmission azul distribution of electricity; mxt re-systems li>r a variety of business and government cus-lated installation, engitx a ing anxi repair sen ices. Al-tomeis. A sepamte senices component provides a variety ihough GE remains a leaderin most power systems of specialimi sen-ices to govenunent customen. Infi>r-prmlutts, domestic anxi li> reign mar kets have been de-mation services are provided lx>th to internal and exter-clining in recent years and woddwide competition has nal customers by GE Infi>rmation Sen ices, GE Consuh-12come intense. New order rates are quite low by long-ing Sen ices and the GE Computer Sen ice operation. term historical standards and backlogs f or vinually all These include enhanced computer-based communica-pnxhu ts are declining. GE management continues s igor-tions sen ices, such as data network senices, electronic ous elli>rts to improve cost 4 ompetitiveness ami to adapt mail and electronic data interchange, which are ollered pnxlucts and marketing to the changing environment. to commercial and industrial customers through a world-Steam turbine-genemtors are sold to the electric utility wide network; application software packages; custom indust ry, to the U.S. Navy and, fi>r cogeneration, to pri-systems design and progmmming sen ices; and inde-vme industrial customen. Starine steam tm bines and pendent maintenance and rental / leasing senices li>r propulsion gears are also sold to the U.S. Navy. Gas tur-minicomputers mxl microcomputers, electronic test in-bines are used principally as packaged power plants fi>r struments and data communimtions equipment. The electric utilities and liarindustrial cogeneration and me-Calma Company designs, manufactures and sells intemc-chanical drive applications. Cenuifugal compressors are tive graphic s systems for computer-aided design and sold for application in gas reinje(tion, pipeline sen ice manufactming. and suth pmcess applications as refineries and ammonia 1n onter to improve compambility, segment results plants.There have been no nuclear plant orders in the have been adjusted to exclude RCA appliance sen ice op-United States since the mid-l!r/Os and activity in interna-erations fromJune i to December 31,1986. Res}mnsibil-tional mai Lets is very low. Consequently, GE is restruc-ity for these openuions was assumed by GE Appliam es turing its nmlear business to focus resources on refueling ami the opemtions' results are im luded in ihe major ap-aixi serving its installed boiling-water reactors. Power de-pliances segment f or 1987. livery pnxlutts include transformeis, relay s, electric load > Allother for 1987 and 1986 consists mainly of resuhs management sy stems, pnver conversion systems aml me-li>r smaller RCA opemtions, most of w hich had been dis-ters, principally li>r ele (tr ic utilities. Installation, engi-pmed of since the acquisition of RCA. These operations necting ami repair sen ices include management and imluded a tivities involving audio tapes and rec onis, tec hnical expenise fi>r large projects, stu h as power arpen, an insunmce subsidiary and a "new puxhu ts" plants; maintename, inspection, repair and rebuilding of division. ele (n ical apparatus pnxtuced by G E ami othen; on-site in prior years, the all other segment through the thiid enginceiing and upgnuling of already installed pnxha ts quarter of 1985 iruluded ihe remainder of mining activi-ties of Utah International Inc., the last of w hic h were disp > sed ofin 1985 (see note 7). 50

i Geographic segmentinfonnation Revenues On millions) For the ) ears einled December 3I Total revenues Intersegment tevenues External revenues 1987 1986 1985 1987 1986 1985 1987 1986 1985 United States $37,517 $33,543 $26,811 $ S01 $ 639 $ 671 $36,716 $32,!N)1 $26,110 Other areas of the world 4,894 4,387 3,638 1,095 563 538 3,799 3,821 3,100 Intercompany eliminations (1,896) (1.202) (1,209) (1,896) (1,202) _ i.209) ( Total fr40,515 $36.728 $29.210 $r40,515 $36.728 $29.210 Operatingpnyit Assets For the years eixled December 31 At December 31 1987 1986 1985 1987 1986 1985 - United States $3,705 $3,563 $3,622 $32,986 $30,641 $22,195 Other areas of the world 725 740 435 6,027 4,090 3,777 Intercompany eliminations 10 7 11 (93) (103) (110) Total $rt,440 $1.310 $4.068 $38,920 $34.591 $26.162 U.S. revenues include ex1x>rts to external customers, aiul and GE intciest in equity were $3,196 million, $ 11 i mil-royalty and licensing income from foreign sources. lion aixl $2,720 million, respectively. The amounts were Revenues, operating profit and assets associated with $1.871 million, $112 million aixl $2,107 million, respec-fbreign opemtions are shown alx)ve. At year-end 1987, tively, at December 31,1986: and $2,158 million, SI16 mil-foreign opemtion liabilities, minority interest in equity lion aixl $1,503 million, respectively, at December 31,1985. 27 Quarterfyinfonnation(unaudited) (Dollar amounts in millions; First Quarter Scanxi Quarter Thint Quarter Founh Quarter per-share amounts in dollars) 1987 1986 1987 1986 1987 1986 1987 1986 Operations Sales of goods and services $8,315 $5.880 $9,560 $7,785 $9,404 $9,278 $12,036 $12,268 Gross profit from sales 2,048 1,605 2,359 2,086 2,022 2.285 3,229 3,nl8 Unusualitems (308) (22) (58) (41) (54) (37) (607) (158) As originally relmrted Earnings before extraordinary item and cumulative effect of changes in accounting principles 343 537 720 621 703 fot 730 Per share 0.37 0.59 0.79 0.68 0.77 0.fdi 0.80 Net earnings 624 537 720 621 703 Ont 730 Per share 0.68 0.59 0.79 0.68 0.77 0.fdi 0.80 Restatement (1987) for SFAS 96 Cumulathe effect iojanuary 1 577 Pershare 0.63 Current-quarter effect (24) (41) (42) (31) Pershare (0.02) (0.05) (0.04) (0.01) As restated Earnings before extraordinary item and cumulative effect of changes in accounting principles 319 679 661 460 Per share 0.35 0.74 0.73 0.51 Net earnings 1,177 537 679 6.!! 661 601 398 730 Pershare 1.29 0.59 0.74 0.68 0.73 0.66 0.44 0.80 Dicidends dedared 0.315 0.29 0.33 0.29 0.33 0.29 0.35 0.315 Common stock -market price range 55 % -13 % 39 %-33% 56 %-49% 41%-35% 66 4 53% 41%-35% 62 %-38 % 41%-35% Net camings arul related per-share amounts for the first three quarters of 1987 have been restatal as required by SFAS 96- "Accounting for Income Taxes." Ivr. share amounts have been adjusted for the 2-for-1 sax k split in April 1987. First-quatter 1987 as relx>rted induded the (umulative 1987 results included an extmonlinary loss ($62 million, effect ($281 million,31 cents per share) tojanuary 1, 7 cents per share) on early extinguishment of cenain 1987 of changing inventory accounting. Founh-quat ter long-term debt by GECC. 51

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Y. ;p.h I : ?' Y h R :..F n,.... l F:Q . i;:. %Q5N'f Ty 4 i:k ', 'Y&.%;-G :;..' &lp?:jhf.?h '* 'E.. 50: ^ Elenry L. flillman Edwa rd E. flood.jr. David C. jones ? Chairman of ahe lhiani anxi Yke Chaiiman of the lloard. Retireil U.S. Air Fone General Dirntor. 'lhe I hllman Com Exet utis c Ollk er arul Dir ec tor, arul former Chainnan of the L disersified operations and lun). General Electric Onnpany. Joint Chiefs of Staf f. Washington, E-ins estments, Putsburgh. Pa. Fairheld, Conn. Dir ettor sin (e D.C. Dirntor sin (c 198ti. Direttor sin (c 1972. 1980. b iy? - mm -men 3g y g M -.g g Sp. 'M ~ L5 if 5 2 ' 3 i: 1. h M:t -c k' L_ kb .b [ ../. - i,2 .t cL V Inis T. Preston frank II.T. Rhodes Andrew C. Sigler b-Chairman of the 11oard atul Pr esident. Connell l'nis enin. Chair man of the lhunl. Chief 4 E Dira tor.J.P. Sforgan & Co. Ithaca. N.Y. Dirn tot sim e 198 l. Exet utis e Of fh er aint Dira tor, j inu>rporated atul Sf or gan Ch.unpion Inteinational 1 =_ Guarants I rust Onnpany. New Corixnation, paper aini f orest q Yoi k. N.Y. Dis cuer sin (c 197f>. ponlucts. 5tamford Conn. Dantor sinc e 19x1. 52 i l

3 n { f 1 l e jr. Inwrence E. Fouraker llen ry ll. llenley,jr. Charles D. Dickey, Chairman of Ihret ior arxl retircel Fellow,Jolm E Kenneth Sih<xil Retired Chainnun of the thuid. the Boani, N ott Paper Conipany, of Goscinnrnt,liarsaid Chief Exec utisc Oliuer aixt Philadelphia. Pa. thic(tor sme e t nis ersit y, Camhiihe, Nf as<,. thiet tor, Cluett, Peata uh & Co..

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thie(tor sin < e 1972. F {l [* ~' -: ^ ^'*"*"' 'O Irf g. .e n l~ i . ? I {- l W -o R Robert E. Mercer Gertrude G. Michelson Barbara Scott Preiskel Chairman of the Board, Chief Senior Yue Picsiileni-External Anornev, New YoiL, N.Y. Exer utise Othe er aixl thret tor, Atl' airs aixt Ihrc(tor, R.ll. Siao threc tor sin < c 1982. 'I he Gen hear Tire & Ruhher & Co.. In<.. iciailer s, New Yo L. Compam, Akron Ohio. Ihretto: N.Y.1)irettor since 197ti. sinc e 1951. -m, q pym p-r.um~~v~ qvw we

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=+. ~_ g < 4,. -wr nr; s J l' n 5 \\Yilliam French Srnith John F.1Velch,jr. \\Valter B. \\\\'riston senior part ner, Gibson, l>unn & thair man of the Board. ( hief Reiired Chairman of the Board Crutt her, law f u m, Ins Angeles. Exet utis c Olbt er aixl l)n ction, anxi l hr et tor, Citic oi p aiul Cahl. thiet tor sinie 19Ni. Gerwral Elet tii< Compain. Cinhank, N A. New Yoi k, N.Y. Fair f n Id, Conn. Ihe cilor sini e l>u e t f or siin e Inh 2. limn. 53

i Board of Directors continued The operations Commitice met five times,includinujoint sessions with the Audit, Finance, aml Tecimology amt Science committees. It reviewed the Onnpany's opemt-ing results mal plans as well as the actisities of GE's Man-agement Development arul Q>rixnate Researth aix! De-GE's lloant comprises the 18 Directors pictured alpha-velopment opemtions. hetically on the preceding pages. The Public Rc3pmaibilities Committee, at its two meetings, Silas S. Cathcart, a Director since 1972, resigned fnnn reviewed the activities of the General Electric Foumla-the thxuxiin 1987 to become President aix! Chief Execu. tions and evaluated public issues that couhl have a major tive Ollicer of Kidder, Pealxxly Group Inc., a GE Finan-impact on GE. cial Services subsidiary. The Technolog and Science Committee held two meet-The lloani, which held 11 meetings in 1987, declared ings, bothjoint sessions with the Operations Committee, two increases in the quanerly divideixl on the Onnpany's its activities included a review of GE Aircraft Engines. common su>ck, which was split 2-for-1 on April 23,1987. In May, the divideixt was raised to $.33 per share on a post-split basis:in November,it was mised to S.35 per Committees of the Board share. In addition to regidar meetings, GE Directors panici-Audit Committee operations Committee pated on the fi>llowing committees that aid the lloani in Richant T. Baker, tienry 1 Ilillman, Chainnan Chainnan its duties. lawrence E.1,ouraker lawrence A. Boss, ly, u ,I.he Audit C,ommittee, which m.cludes only D.irectors Gennule G. Stic helson Vice Chainnan fnnu outside GE, behl four meetings. This connnittee Bailura Scou Preiskel Thornton E Bradshaw reviewed the activities and independence of GE's public lewis T. Preston Roben E. Alercer Frank 11lr. Rhcxles llaiham Scott Preiskel accountants and the activities of the Company's internal Irwis F. Preston aud.it staff. it also rev.iewed the C,ompany,s. internal finan-Finance Committee Arxtrew C. Sigler cial controls aixlcompliance with key GE x>licies,includ-Roben E. Alercer, William French Smith i ing those related to ihe def ense procurement pn> cess, Chairman as well as the investment Ixntli>lio of GE Financial 3"hn E Welch,Jr., Public Responsibilities

h. ice Chairman Committee h.e m ces.

Richard T. Baker lienry 11. lienley jr., The Finance Committee held fi>ur meetings. It examined Charles D. Dickey,Jr. Chairman GE's financial position, pension fuixling anxi trust opera-llenry 11.11enley,Jr. J ohn E Wek h,J r., tions, fin eign investments, financing commitments with David C. Jones Vice Chainnan Frank i1. r. Rh<xtes l'.ic hard T. Baker the a. l.ir ine nulustry and other inatters involv.mg large-Waher B. Wriston hornton E Hmdshaw scale utili/ation of Company funds. ! awrence E. Fouraker The Management Development and Compemation Commit-Management tlenry 1 Ilillmun tee, which includes only Directors from outside GE, met De"#"'"t and Gertnute G. Stic helson Compensation lladura Scott Prenkel 10 times. In addition to approving changes.m GE.,s man-Committee Andrew C. Sigler agement,it reviewed the Onnpany's exempt salary struc-Walter IL Wriston, Willi.un French Smith ttire atxl executive compensation progmms. Chairman The dominating Cmnmittee, which held three meetings, 11enry 11. IIenley.Jr. Technology and [";(~y,h""""" f'["g'iIfr "R I considered camtidates fbr the Boani and recommeixled l the committee stnicture aixt membership for the follow-GenrudeG. Alichelson Chairman ing year. Edward E.11 xxi,Jr., Nominaling Committee Vice Chainnan Charles D. Dickey,J r., Charles D. Dickey,Jr. Chainnan lawrence E. Fouraker ilenry I1.11enley,Jr. llenry I Ilillman Gennide G. 51ic helson David C. Jones Irwis T. Preston Robert E. 5f en er Aixirew C. Sigler 5-1

Management nsof rehnmo i2. i9sm Corporate Executive Officers Se.,ior Corporate Officers Corporate Statf Officers John F. Welch,Jr. i e 5 y. 1 ? NigelD.T. Andrews } Chairman of the lhurd aiul x Vke President, ilusiness Chief Emutise Ofiner j.i ' 'Y?i James). Costello j Desclo[unent arul Planning Lawrence A. Bossid Vice Chairman of ah Ikiard i aral Executis e Ofikcr 4.i' Vit e President anti Cinnptroller 1::: Dale r. Frey Edward E. flood Jr. , A f* Yke President arul'licasurer: Yke Chairman of the 1 oard ,3 Chairman of the lhurd aiul anxl Executis e Ofiker ..{~ President. Gencial l.let tric James R. Bunt ? I "' "*"' U " V' " ' "" Yk e President (.(',If* (( Engimerinprul Dennis D. Dammerman Jack O. Peiffer, ient. Senior \\ ice Presalent. 5cmor \\ ke Presn [ *._- Finance Exec utis e Managenwnt Shnufaturiq Joseph Ilandros

7.,

~""' (;.cneral Counsel \\ ne IS esident ain ,. 1 1 Joyce flergenhan Vic e President. Pubhc Relations g 'h James A. Parke Vk e Piesident. Audit Stalf Phillips S. Peter I Vic e President. Gosernment Relations Arthur V. Puccini Frank P. Doyle Walter L. Robb Vice President. Employec Senior Vke l' resident. Senior Vk e President. Relations Relations Researt h aixt lks elopnwat Edwardf.SkiAo Paul W. Van Orden Yke Prewlent, Information Exc(utisc Vk e Picsident Tec hnology l Benjamin W.lleineman,Jr. Semor Vke President, General Counsel aixi Seu etar) 55

Operating Management a,unch,u.u, a ws> Technology Businesses Services Businesses s Aircraft Engines Aerospace Plastics FinancialServices .I h.* l i 3 s yay hJO l +> +r ~ '~ Brian ll. Rowe Louis V. Tomasetti Glen il. Iliner Gary C. Wendt Senioi Vitc Pini leni. Senior Vu e Pinident, Nenner Vue Pinident. l'inident aixt (.hiel ()peratuig GF. Anuait F.ngnws GF. Ariospaic Gl. Pl.iqin ( ) flu ct. General F.let ti n I '" " " I '" n "

• I "' -

Brian Brimelow A rth ur L. Glen n Pa ul L. Dawson Pen nient.uut d u d Vite Pinident.Goscinnu nt Vitc Pinident. Defense Channian of the lioaniaixi I^" ""' C ( H I"" Po ulut h Sutenn Chic f E xn utisc Ollu cr. ('.ciu t al llet ti n (;.alutal "C"" 'g y ;" " " pg'"'" E y-Richa rd L. Bu rke Robert G. Stiber co, po, aijon ici cc) '.'u e Pinident, la nn Vit c Pinident, Airoalt Philip Af. Gross Le A. Italloran Po = h u 1 ion F.in tionn s Vu e Pinident. Gt. 5du onn Vnini \\ a c Pinident. Sam Dolfi Robert W. Tieken Edu ard R. Koscher V in.n u e Viie Pinident. Iluinan Vic c l's esl< nt. Iinant e aial Vu e Pinnleni. Saln Alichael A., Carpenter Remuu n Inforination In hnologs flerbert G. Rammrath Ian utne \\ u e Pinuicni Robert C. llau kins ladislaus W. Wanecha Pinuknt. Gk. Planin Vue Pinident. Adsatu ed Vu e Pinident. Acrosp.u e Paulu 1.id. Dennis]. Carey '*"r \\ a c Prnute nt. Pr ogr a ms Rnoun n L. Donald Simpson GF( C Con poiatt I ina nu-Lee Kapor Vu e Pinident, sen i< n Yu e Pinuitni.Cornnwn ial Aerospace andDelense M'"nL"n"ina ja,,,gg.o:,,,, t ngme ()perations b S. Wascher N & \\ h e pmih ,[ Vic e Pinident Mailciing Edwa rd C. Ba caria 3 Silas S. Cathcart VuePin.ident. Abinw d' Joseph G. Wirth Pi nident.uul (. hic! g y g '""M Vi(c Pinutent,'in hnologs tan ut n c ( Hlu n. Is uhici, RobertJ. Sm uland s Prahods Group liu. Viic Pinident. Mar nw & M ? s 1 MedicalSystems 3far C. Chapman.Jr. liwiusn ial E ngnws.nul i su utnc \\ u r Pinnicni.uwt p{l b. .f Chit i Ojwi ating ( Hlu ci sen i, e H' 4 i W. George Krall

lI 3

Dan L.1, late r. Vuc Prnalent, f acrulalc SC"i"r \\ ui Pini kni. Puidut tion (, liusincu lb clopn w n; AlichaelD. Lockhart John D. Rittenhouse f Charles V. Sheehan Vit c I inident. I nianic wnner \\ ac Pinutent. RCA 4 wnior Vi< c Pinnlent. .uxi llusnuws i be lopnu nt Acrospac c arul l kf ense g g g ggj Frank E. Pickering Jack A.Frohbieter 3gg,g,,g g, ygg, \\ n c I inielent. I ngnu cong \\ a c Pinident. (.< n oninent p,4gggg aiul in hnologs F let t r onii suten" I on c ( H hnr. F qilm n Robert C. Turnbull Charles A. Schmidt John St. Trani R'n*n' nu c C' n P' n "n Vi< c I icudent, \\hinan Vn e Prnukni. Auiu-spa (c wior Vi< e Pimdm I n ginc ( )pt s anon g 4, yc4, Vincen:o Alorelli Pinident.u x! Chit t I set utn e Olla cr. Ge no al F in liit -(.(.R 1 td. Charles P. Pieper Picudent aiul ( hirl fan utn e Ollu m. OF Meda al Sutenn - Asia 1.td. Robert L. Stocking Vn e Picelent. \\laitt ong FactoryAutomation Robert P. Collins Pinis h ni and ( lucf I sn niise ( Hlu o. GF lanuc Automanon Noith Ann r a a. Inc. 56

Core Manufacturing Businesses Industrialand BectricalDistribution and NBC AppHances Power Systems Control m77 7-vW99* F i ll Gary L. Rogers (I, Vi<e Prnktent.GE Elet trical l-Distribution and O >ntrol I 7-Dacid 31. Engelman c: ): 9 }j g Ykc President. Sales 'y y Motors Dacid C. Genecer.bs'alling l Vke President, GE Stoton j Roger D,3 forty Robert C. Wright Roger W. Schipke John A. Urquhart yke Presklent, \\laiLeting Presklent azul Chiel' Exet utise Scinor Vke Pinident. 5cnior Vhe President. l Of fn er, National lituack asting GE Appliantes G E limlustrial aixi lbw er O nn pa n y, Inc. Gerald R. Cole Sy uem, Transportation Systems Albert F. Barber Vis e President, GE Gomumer Clyde D. Keaton Carij. Schlemmer Eset utise Vic e President Sen k e Vk e President, GE limlusin Yk e Pinident, b'I 'I N'n i' " "'Y"'"" Lawrence K. Grossman Thomas E. Dunham Piesk!cnt, NilC New s Yke President Pnxtuttion EugencJ. Kocarih Edw*rrd L. Scanlon Bruce A. Enders Yk ' Y' *id'" G Y Y""" Exec uthe Vice Presiden: Vke President, Afarketing 1)eliser) Raymond). Timothy Stephen). 0'Brien R,ussell L_. Noll,Jr.,1_m bine Group Euxutise Vke Vk e h eudent, Sales aiul \\ ne President, GE President Distribution Delbert L. Williamson Y" ' Y'** I'"' ' kdi" A Robert S. Walsh John C. Truscott Group Euxutise Vke Vk e Pinident. Tec hnology d'"I Y"'I"'S Proident "~ J. Richard Stonesifer Vke Picsident. L%htm.g ut inte,na,;onai Communications and s ac,,na sen g n Services y,,,n o,g;,,,,g, g Yke President, inicinational s Salm aint Sen k n Desclopment S' Joel Tenter y Vke Presklent.GE Drisc Ss stems [- Bertram Wolfe / Yk e Prnident, GE Nudcar =# l Energs John D. Opie I Senior Yke President, 8 Eugene F. Slurphy G E l.ighting Senior Vice Prnident, Eugene E. Apple GE Onninunkatiom ux.! Yke President,Qualits arxl Sen-k es Emironmental Engineering Anthony L. Craig William S. Erago President. G E In f or mation Vice Pre ident Nfarketing Senit o avulSain Robert P. Sfo: gala Yk e President. Pvxtu< tion Stephen Rabinou itz Vu e Pr esident, 'l n hnology 57

Operating Management, continued Support Operations International Canada / latin America Aerospace Technology n'illiam R.C. Blundell Thomas E. Cooper ,..g Ch.un z in of he lloaid arxl Vke President. Aerospace TO j t .j,j Chief Ekt uus s f tre, Technology p' [+ i GE Canada Robert T.E. Gillesple Environ.vct.talPrograms

Y

~ [, - Executise \\ n e Presu_ lent s W. Roger Strelow jurgen F.Na.gna Yke President. Ensironnx ntal m (' Chairman of the floard arul Programs Chief Executise Offker. r General Elet tiic do litasil S. A. Marketing andSales Semiconductors A.I.arkJ. D%reangelo %u r\\ke r esulen t' \\ ne President. 51a:Leting arut intei national Operations CarlR. Turner

sage, Yke President.

G E Feinkoiuluttori Alber t]. Fe66o Co.porate Trading Yue P,esident. Autoinnine Industr> 5f arketing arul Sales Gdo' Petroleum rienryJ. Sing r Ronald C. Spence Yxc Piesident. Marketing arul Pr esident anu Sales - East 'c. Chief Esecutisc Ollker. 1;uld Petroleuin Corporation MedicalServices Su Ih****"''''"' Yke President aixi Medical John W.Perdiue Diretto Vice President. GE Supply James R. Birle Mnior Vice President, Ca/ma Corporaic Traciing DanielW. AfcGlaughlin Piesident, Cahna Com pany l l 58

Corporate Information Corporate Headquarters Fonn 10-Kand otherreports Genem! Electric Company The financial information in this Report,in the opinion 3135 Easton Turnpike of management, substantially confonus with or exceeds Fairfiehl, Conn. 06131 the infonnation required in the "10-K Re[mrt" to be gggj submitted to the Securities and Exchange Onnmissigin at the end of March. Certam sui >I>lemental infonnation .fhe 1988 Annual Meeting of the General Electnc is m that re1xnt, however, and coines waheut exhib. as O, )mpany w.ll be held on Wednesday, Apn.127, at the i will be ava.lable, w. hout charge, after Apn.l 15 from i it Waukesha C,ounty E,xpos..tuon Center Arena.in Wauke- , r}mr te Investod,,onununications, General Electnc sha Wis., a suburb of Milwaukee. Onnpany, F,a,irfield, Conn. 06131. DividendReinvestmentPian Copies of the General Electric Pension Plan, the Sum-Share owncis who have one or more shares of GE stock mary Annual Report for GE employee benefit plans registered in their names are eligible to invest cash up to subject to the Employee Retirement Income Security $ 10,000 per month and/or reinvest their dividends in Act of 1971 and other GE emplayee benefit plan docu-the GE Dividend Reinvestment and Share Purchase ments and information are available by writing to Cor-Plan. For an authorization fonn and prosixrtus, write pomte Investor Communications and specifying the in-to: GE Sharc Owner Services, P.O. Box 206, Schenec-fonnation desired. tady, N.Y. 12301-020ti. The Annual Reports of the General Electric Founda-U"" ' *" " "*" d'b "" 4 " ' Principal Transfer Agent and Registrar He llank of New York Attn: Receive & Deliver Depanment Church Street Station P.O. Ilox 11002 New York, N.Y. 10249-1002 Stock exchangeinformation In the Unitd States, GE common stock is listed on the New York Stock Exchange (its principal market) and on the lloston Stock Exchange. As of December 8,1987, there were about 506,000 share owners of record. 01988 General Electric Company Printalin U.S.A. Note: Unless otherwise irxlicated by the context. the terms "GE," "General Electric" arul "Company" are usal on the basis of con-solidation described on page 37. Unless otherwise iixlicated by the context, the terms "RCA" arxl"RCA Corporation" mean RCA Corporation and all of its "affiliates" arxl associated companies as those terms are used on page 37 as well as those companies whose ownenhip was transferred fmm RCA to GE subsoluent to GE's aujuisition of RCA. s t u a a AL $ t TIC 1 AIC, $. GE arxl RCA are registered trademar Ls of General Electric Company; A arxl NilG are registered tra femarks of National llroadcasting Company, Inc.; 3 and " irxticate rex stered anxl uneegistered trade arxl senice marLs. i 59 e

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. \\ 90 -yoy. M=h GENERAL $ ELECTRIC NUCLEAR ENERGY BUSINESS OPERATIONS GENERAL ELECTRIC COMPANY e VALLECTOS NUCLEAR CENTER

• PLEASANTON, CAUFORNIA 94566 March 8, 1988 to y

5 c $p 9 / 3 /g 8 O ? f Mr. R. E. Cunningham, Director gN M, p Division of Fuel Cycle and Material Safety sff Office of Nuclear Material Safety and Safeguards D e\\ U.S. Nuclear Regulatory Commi'ssion' ' Washington, D.C. 20555'

Reference:

Docket 70-754

Dear Mr. Cunningham:

Asiscustomary,copiesoftheGeneralbectricAnnualReportareforwarded to the Commission in order to provide-updated General Electric-corporate and financial information. Accordingly, copies qf_the 1987 Annual Report are ' ' ~ enclosed for the referenced docket. Sincerely, bn b am W \\ Senior Licensing Engineer Ay (415) 862-4330 g to p 4 /ca S ~ /99 g i, Enclosures 8 9 b 9 4 W C l )7 b i db'& g

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