ML20196J515

GE 1987 Annual Rept

ML20196J515
Person / Time
Site:	Vallecitos Nuclear Center, 05000000, Vallecitos
Issue date:	12/31/1987
From:	Bossidy L, Cunningham G, Hood E, Welch J GENERAL ELECTRIC CO.
To:
References
NUDOCS 8803140354
Download: ML20196J515 (65)

Text

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RnancialHighights General Eintric Gimgun) arul mnvulatal alTiliates (Ibilar anu amts in millions: per share anwamts in dollan)

!187 1986 1985 Operalheg results Resenues

$ 40,515

$ 36,728

$ 29,210 IOuuings before extruordinary loss arxl cuinulative ofTect of accounting changes 2,119 2A92 2,277 Net earnings 2,915 2A92 2,277 Plrrshare Earnings belbre extruoidinary loss atul cumulative efftx t of accounting changes 2.33 2.73 2.50 Net earnings 3.20 2.73 2.50 Disideixts declared 1.325 1.185 1.115 Alarket price range 66 %.38 %

41 %-33%

36 %.27 %

Atyear end

'thtal capitalinvested

$ 22,271 21,162

$ 15,817 Share ownen' equity 16,480 15,109 13,671 linnuwings as a percentage of total capital 25.1 Ce 28.7'i 12.9 %

Returnfor theyear On as erage share owners' equity 18.5cr 17.351 17.55i On average totalcapitalinsested 14.7 13.9 16.2 See tw ges I arul 15 to the financial statenwnts for information almiut acn>unting dianges ami extraorditury loss. All share data in this reimin reflect the "-for l sim L split in April 1987. Finandalinfornution in this regnin imludes RG O>r}mira.

tion results fromJune 1,1986 unless statal otherwiw.

Contents 1 Opciutional Ilighlights 2 Irtter to Share Owners 5 Technology llusinesses 11 Sen i(es Ilusinesses 17 Dire Alanufatturing Ilusinesses 22 Sup;xirt Opetutions

.23 huancial Section 52 lhiard of Dire (tors 55 Slanagernent 59 On }xunte infonnation t

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OperationalHighlights t

I important developments around the globe in 1987, including i

those below, reinforced GE's continuing strategy to be a world leader l

in its technology, services and core manufacturing businesses.

1 l

i ammmmmme CGR acquired Plastic carbodyintroduced l

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To enh.uu e its glolul k ompetitis enen in A oniperatise elfon hetw een GE Plastics nW(lita! Splems malkets, the Gimluny aiwi lntW of West Gennany u catell a aojuiteit the CGR nxxlic al ajuipment bicalihiough in automotis e let hnology busine s f roin I homson, s.A. of Fr.un e with a new ro. ulster that features all scr-l as guit of GEblisimsition of ituon-tic al juncts ma<le of engincesing theinur j

sumer ekx runit s businew.

plasin s from GF.,

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financialservices expanded Aircraft engine unveled pgpp.-

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Id n( d "Is (('k ((liik llild kI I (k "

OQ l} O ) l \\C (Uj{J l] ()l) k (( j)('W teiw i it s l= >utulat ics. auluiting Iktt leas-Cl N156-5 engine in Europe was but one ing aiwi auto auction units in the l'nitni highlight for GE Aircralt Engines,whi(h States aint opening foreign nut kets f or athint lalun Ait 1.ines aiul Nonhwest its f ouining,imestinent lunking aiwi Airlines to its substantiallist of oinmwr-t eiinut ani c at tis ities.

(ial airt raf t ontomers.

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TO OurShare Owners men, S.a. oi rram e. in ihis itanmiion. w e autuired CGR, a European 4used nedical diag-i

• nostic imaging business, an<l cash from Thomson; l

in acturn, Thomson useiux! GEi consumer mummmmme electronics business.

The eeents ofl987 reatin med our beliefin the This mose greatly stiengthened our glolul strategv your Com}uny has followed throughout hiedic al Sprems business aixl allowed us to dh est the 19 sos. GNP growth remained nuxlest; global a business that was not strategically impn tant to competition continued to intensify; large transna-ut Thomv>n, w hich siew u onsumer ekx tionio as tional alliances txtame a key ingmlient to suuew central to its strategy, strengthened its ability to throughout the world; and the inestricable rela-compete globally in this industry. In this win win tionship of the wodd's economies and financial trans.u tion, bot h c ompanies became st ronger in markets was clearly demonstrated.

businesses they feel ar e key to their fulm e.

Against this backdrop, GE's 11 Ley businesses all Adding CGR's strength in Euiope and latin perfor nwd well and, mot e imp >rtantly, demon.

Anwrica, pait cularly in x ray pnxlucts, will com-i strated that GE is well.pasitioned for strong earn-plement GE's ah eady su ong engineering, market-ings grow th in any reasonably gex xl economic ing aixl manufacturing operations in the United sc enario.

States and inJapan, w here we hokt a 759 stake in At the beginning of the decade, we said the Yokogawa Nfedical Sy stems.

world economy wouki he chana terim! by slower in the exchange with Thomson, we built upon growth with stronger global competiton going decades of globalization initiatis es by ses cral other after a smaller pie. That anah sis became the cor-GE businewes that has e long realized that a suong nerstone of w hat we set out to do. It led to a strat-ma:Let piesente in the major areas of wodd com-egs of being number one or number two in mar.

merce will be a decisis e advantage in the intensely Let share in large key businewes that we gmuped competitive and highly contenuated markets of into tec hnology, sen ices and core ruanuf a(turing.

the 1990s.

Within that f ramework, we mld or exited busi-nesses and product lines that were not (entral to ammmmmmme our st rategy, and became mut h m<a e cost-et feah e Many ofourfastest growing businesses hase had in those that were by conwlidating iacilities and by their growth f ueled by innovaihe, nunsnational imesting $16.7 billion to des elop new producis alliam es w here each partneri unique awets ar e and imprm e productivity. Our fmancial strength shared in return for greater wodd-mai ket au ess.

allowed us to do this in wap that weie iair and GE Aircraf t Engines, for example, has used its uimpawionate to the employ ces im oh ed. long 16-> car-old partnenhip with SNECM A of Fnuxe notihcation peri (xh, equitable ses eranc e pac kages, to help for ge a pie-eminent p>sition in wodd mat-retraining and placement centen weie used when Lets, winning the leading share of the wodd's laige bminess te alities caused us to close plants.

commen ial engine oiders in 1987. GE Plastin, As w e sold or exited businesses not c entral to with neady hall its sales outside the United States, cur strategy, we ac quired othen that would either has grown 169 annually over the last five yean by im nose the competithenew of an exi. ting key GE des eloping applications in one p ut of the world, btniness or woukl stand strongly alone in a prom-arxl then muhiphing their salue through glolut hmg mar ket in w hkh we want to participate.

te( huology, manufaauring and mar keting organi-In our siew, a Ley criterion of strength is being zations. Our Facton Automation business, w hk h number one or number two in market p>sition; struggkwl for 3 cars by itself to fulhil a dr eam of and number one or number two, for us, refers to world leadenhip, now sees that die,un becoming a mM maiket position. In 194 we conunued to scality sia GE Fanuc Automation Corporation, a establkh su ong global positions for our businewes 50-50 joint sentme with FANUC 1.imited of {apan through acquisitiom, a ow-souning partnerships, that indudes subsidiaries in Europe,jajun and the awet ac hanges and other anungenwnts with United States.

Asian and European comlunies w hose su em,ths Aaiom like these are under way in sistually and awets complement our ow n.

esen GE business. Fach butiness 'mylentands clearly that an imputant road to giowth is mmmmmmum through ghJuliiation atx1ihrough sharing indi-Of GUs strategic moers in 1987, t he one ihat s idual strengths su( h as mar Let au ew, tec hnology lot demonsn ates our gLlut businew leadenhip and capital availability. In this "shaie-to-gain" ap-dim tion is the bminew exc hange w e made w ith pnuch,om businesses are expanding pn=laa 2

> We hase~ shifted our earnings mix to w heie we now obtain alxmt 75!1 of our key business earn-

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ings fiom faster guming tec hnology aixl senices

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businesses compared w. h about 505..m 1980.

a es en though eainings in our wre manufacturing businesses hase grown at an aserage of 6!i a year

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By any unensure, !987 was a cery strongyear I

4 foryour Company, All of GE's key busincues met their business plans. Aixl, for the thinl ycar in a mw, sinually all of our key businesses inc reased

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their maiket share.

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(h erall, net earnings w cre S2.915 billion, an in-nease of 17'i fiom $2.492 billion in 19s6. Earn-g g 4p ings per shaic wer e $3.20 for 1987 compared with

$2.73 for 1986, refksting the April 1987 sto(L j

split. In 1987, the Company had two accounting 4

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(hanges w hich resulted in one-time net earnings a

gains of about $720 million.These gains were more than of fset by business restructuring of r

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about $750 million after taxes. Thus, our 1987 eainings growth of 17!i was independent of these

't unusual items, but the restnaturing will enhante

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GE's mmpetitiveness in 1988 and beyond.

Sales for 1987, the fint full seat in whic h the i

RCA busincues are induded,'were S39.31 billion, g

up 12'i froin 1986's $35."1 billion.

~

We again ended the year in excellent finan(ial f

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c onditio'i. Cash, maiLetable sec urities and funds i

held f or hmineu deselopment aggregated alxmt

$2.8 billion at 1)cteinher 31,1987 mmpaied with

$2.3 billion a year cailier. GE's shon-aixi long-teim debt, w hi(h carries the highest a edit mtings, l

impiou11 to a ratio of 25.l's of total capital,down I

Chairman and Chief Executive Bossidy (center). Vice Chair-(ium 28.7'.s at the crulof 19bG. Retuin on shate Officer John F Welch. Jr man and Executive Ofbcer l

(nght). Vice Chairman and E1-Edward E. Hood. Jr (left).

ownct s' equity improsed significantly, to 18.5!i ecutive Officer tawrence A liom 17.357 for 1986. Measureinents of capital ef-i Iniency such as return on imestment anxi working i

j lines opening new maikets. lu oming more mm-(apital tur nm er also weie impios ed.

j petitis e in existing mai kets, and ieducing the in-Our mnuninnent to iesean h aix! deselopment j

s estment and time it takes to biing pnxtut ts to ms-iemained su ong. R&l) expenditut es u cie S3 bil-tomers aiul x>tential mstoinen.

lion. In February 1987 GE donated the RCA l

i l)asid Sarnolf Rescan h Center in Princeton, N.J.,

l summmmmme to SR1 Inteinational and made a fise-> car, $250 During the past sceen years, mmistent appli( a-million (onunitment to f uix! rescan h ther e. This tion of GE\\ suategs has pnxlu(ed mmistent mme piesened Sainof f Labs as one of the na-giow th f oi our im estors:

tion's f oiemost r escan h (enten, a position that j

> f.u nings hase risen 10'i a scar (olujxmluled might has e been jeopardiml had w e tried to (om-l sim e 1930, ala mt lo'i lastei ihan the GN P os er hine it with GE\\ existing iescan h opeiations.

j the same peiiul and tiiple the s ate of grow th of Expcixlitutes for plant and equipment during l

the S&P 100 mmpanies.

1987 were $1.8 billion, with signilkant (apa(ity l

Our sto( L,ilu ough appie(iation ux! yield, has aixl pnxlut tisity imestments in Airauf t Engines, i

giow n 19'i a seat mm}= >utuled, eser w ith last f all's Plastic s,1 ighting aixl A[>]>liati(es.

maiket mnet tion, senus I l'i foi the S&P 100 The major mntributors to 198, s canungs J

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e gnmth weie Aircraft Enghies, FinaiwialSeivi es, autlunity lus been delegated dowmvanlJihus.

Medical Sy stems, NilC aial Plastics.

the bureaucnuic paraphernalia that often slows Adding to our intenially generated giuwth is

• and impedes communications anxl dismurages the our recont with autuisitions. Several large recent innovator atxi the risk-taker has been swept aside; acquisitions-Ihr example, Employers Reinsur-in its place a faster moving, nune action-oriented am e, NilC aiul RCA - has e pnn ided net addi-and personally more satisfying emironnwnt has tions to our cai nings in their fint ycar of GE own-taken shape. We have removed,in addition, the ership mxt have added signifiamtly siiwe then.

s;uldle of a cor porate bureaucracy from the b.u ks Kichler, Pealxxly,809 of whk h was acquired by of our businesses aixt have encouraged them to GE in 1986, had some dilliculties in 1987, im hal-nm in directions, arul at speeds, they dux>se-ing admission by a lbrmer employee to securities anxl nm they have.

violations that occun ed piior to GE's acquisition; a With the reduction of"management"aixt the subsequent seulement with the SEC; aint the ef-dismantling of bureaucmcy, leaden has e nunul fixts of stoc k arxllxnxl ma Let solatility. Kidder, quickly to the front, creating a vision for each busi-Pealm xly was a stmng contr ibutor to GE's 1986 ness and aniculating that vision so dearly and eat nings, but the 1987 dillicukies put Kidder's compellingly and mnsistently that an entire organi-conuibution to GE at alx mt breakeven (br the first ration can rally arouixl it and turn it into reality.

IS mont hs of ownership. Kidder is taking the deci.

Iradenhip of that caliber is abundant in this sh e steps muled to w cather im bulent times, and Company and we see it shining from deeper anxl it iemains an imixntant pan of our Finarn ial Senw deeper in the structure of each of our businesses.

k es business.

Cxnnmunication, above all other factors, is driv-We have had a gixxl track record with major ing this progress. We will never be satisfied with acquisitions; anxi, although we have the resources our performance, but we are proud of the gains

!br another, we bas e no set timetable to do one.

we are ac hieving. Cxnumunication, for us, is more Our past acquisitions were sua essful because they than newsletters and speec hes anxi 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 sele (tive, knowing that u hen the right the time. It is, we find, a simple mn(ept but one opponunny presents itself, we have the finamial requiring patience anxi peisisteme to imbed in stiength aml management depth to at t quickly, the cuhute.

Our bminesses aie on ihe move -driven by muuuuuuuum people w ho talk, listen aixi share w ith one another, Our outlookfor GE businesses in 19S8 is optimis-forging conunitments that indude es cryone. For tic. While the w orldwide collapse in sto(L mai kets those businewes indisidually,and for the Cann-in the last quaiter of 1987 was of mm em, w e be-pany as a whole,1987 was a terrific year. We mn-lies e that the directions our management team has tinue to believe your Caonpany has a futme un-been emphasizing - agilit y, qui ( Ler r es; x mse to matdux! any w here in the wodd. Ami the people mar kets, globalization - will sen e G E w ell dur ing of GE temain mnunitted to seizing that future.

this periix! ol ( hange aixt tuu enainty. Yotir Cann-pany is ]xisitioned for stnmg carnings growIh in any icasonably goo (1 economy. We made a 19S6 piediction of two-> car double-digit earnings gmwth, gisen approximately 2M GNP giowth.

We bas e ac hies ed that gmwth in 1987 ami, gisen John E Wek h,Jr.

aix mt t he s.une comoniic sc enario, w e'ie mulident Chainnan ami Chief Enx utise Officer we can do it again in 19XS.

ummuummum Your Company has a vitality, a sense 01 wnli-k"" ' ", U"" I"F deme, a bias for at tion ihat es en the mmt optimis-T n e C."hainnan anxi Ent uth e Ollk er tic of us muhl not emisionjust a Icw years ago.

'I he shaiing, open, adapth e ( ultute we has e w oi Led so har d io grow is wcil-suited to the esci

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moie ( omplex wm kl w e Ia( c.

None 01 this has been brought alx mt by moic managenwnt, but rather byIm management. Ia>-

Edwani E. I h x x1,J r.

en base been peckxl away, ami with them the Vk e Chainnan aml Executhe Ollk er iesicus aint the fiken bas e also gone. Approval Fehnuiy 12,1988 1

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IeCh00l0gy Businesses l a'"? " "" '" " a "-

me - u nnpleted a scr ies ol

• llight test with.\\1 lh>nnell th>uglas in 1987 aiul was scln ted by llocing as the inime engine f or studies of a new niediuin sized aitualt toleintio-from ideas and technology come solutions.

(hnniin the 119 h. When put into anunwu ial liy inixing ideas w ith in hnology, w e bas e built sen it e, the l'l)F is expa tal to sn e air lines up to a i eputation for u eating sohitions h>r our on-40') in f uel t osts osci (unent tuilm >f an nu wiels torinci s-M dutioin tilat j n oside ical lwiwlit s loi SN E('..\\I A, the IlclR h aiu t alt engine ina:HlliK.

iixlis hhials u nnpanies aixi gos ci n ments: solu-tmer,is a 3y7 paniwr in the UI)F piogram.

tions that uret t<xia)i nents aixt athh eu tomor-While the UI)F iemains an imlxntant pnigram inw's expc tations for the intur e, the Companyi CF6 aiul CF.\\l">6

'this appn w h - pr os iding solutions instead of lionilies of engines umtinued to gain widespicad meicly selling pnxha ts-has hel wd make GE a lx>pulaiity in 1987 among ununwnial aitlines.

l woi kileader in:

'I he C F6-s0C2 engine, f or exa mple, captu t ed

> Aiiouft Fugines ahnost 6Vi of available 1987 onleis for the I.u ge j

> Acrospat e w idelm xly ain ialt it is designed to pow er. Japan j

> Plastin Air 1.ines whk h had not puuhased a GE-lxm eint j

>.\\ledical Sy stenn ain ralt in 30 Scaiu hose this engitw during the

> Eu tory Automation Scar to lu mer in new four-engine liocing 747%

i Amelican Airlines in the lat gest single ain n it en-summimuma gine nider n er pl.aed with GE, will use 80 of GE Aircraft Engines is now Ihe w or kl's leading these engines to [xmer its new fleet of th >cing 767s j

supplier of jet engines and Aiihus A30(h.

)

Utipatulleled glowth user the past hse )e.n s has

()ther major onless in 1987 f tom sut h canien j

mos nl GE ahead of its unnlwtition in u nnmen ial as Air France,'I hai Inter national, Alitalia, j

aixl military aia rait engine in.n kets with totalin-C.madian Aiilines International, Wandait alxl

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den pawing SS hillion in 1987. ~1 hat gn mth annn QANTAS helped != unt the s alue of Cl 6-soc 2 j

as a dint t t esult of(;Ei unninitinent to t tistoiiwis oitlets situe the eligitic was hist inttiwhaecliti j

iella ted in advain ni engine in hnologs, pn aluu 1983 to moie ihan $ U> hillion. Exlx a ts an ount quality aiuluntomer supixist.

for abnost $3.8 hillion of that total.

l A piiine example of GE\\ In huology leaden-CF.\\1 Inteinational, a joint (ompany of GE aiul ship: the UI)f" engine. 'l his inolutionar) lw mer SN EC.\\l A, i n cis al one of in lai gest on clei s es er lI 4

i Aircraft engine technology i

i from GE helps to bnngpeople together. For example, the CfHOC2 engine on the pre-vrouspage is used topower one of the new Boeing 161s a#

that hedmont began flying on daly round tnps between y

North Carohna and Englandin IM1. The CfMOC2. the Com-pany's most advanced high-bypass turbofan engine, has been ordered by more than 30 i

customers around the world V

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A sign of the future in aircraft

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Douglas MDR The UDFis being read >ed for cornmercial service on a new generation of medrun sired aircraft 6

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Astro Space techmcoan Craog most of the urban areas w, Wdey prepares the antenna kWstern Europe it es the brat range for testag of the new s o nmunocatoons saletkte GE Astra 1 commurucatums not has budt for the iuropean elkte beong budt tur Soorte madet l

Europerne des Satelktes m lunemtmurg When launched the satelhte wel be able to in trobute TY programmong to d

I when Northwest Aiilines pic ked the axently intus umumumme dm ed CFM56-5 engine f or its new Ilect of 12(L Acrospace combines the operations of GE Aen9 Aiibus hxlustiie A32(h aixl A31th.The onler.

' sluce anxi RCA Aciosltu e aiul Defenw. w hk h to-with a intential sales value of aimiut $ l.25 billion, gether make GE one of the largest aixt most dis cr.

m.u ks the first time Nonhwest has seks ted a GE silied aciosjxue manufac turers in the w oikl.

or CFM engine. Other major CFM5ti oulet s in GE Aciospace, fi>r example, hohls a number l

1987 came fium An ett Aidines of Australia, one or numtwr tw o lxnition in two-thiids ofits l

1.ufthanu Southwest anxl thuathens.

35 dillerent pnxtuc t lines-all of w hith depcixi l

lluikling on its success u ith CFM, the Coinpany iinicasingly on advanc ed eks u onks tet knology, l

1ornel other alliances in 1987 with Ganett Tur-it is a leader in suth aicas as simulation sisual sp-i hine Engine, Textron I.yoming arul Alfa Rnnwo teins, high-per for main e military ain raft conools to deselop small aixl nwdium simi engines. In aral automated test sptems.

another agreenwnt, Ruston Gas Tuihines of Eng-RGA Aeros[xue and Defense is a leader in ra-laixi will pnxha e c om;xments li>r GE aircralt en-dar, utellites a xt sui face ship vmar, it aho is the guws and will strengthen GE's lxnition as a sulw descloper of the Aegis Iket air delen e sprem for j

plier of ain raft engine det is atis es Ior ship the U.S. N,n y, w hi( h u>mmiuioned four more j

propulsion aint iixtuso ial applications.

Aegis-equipjwd u uiwis in 1987.

i Un the military side,GE deliseuxlits first Filo Key desclopments duiing the year for these fighter engines to the U.S. Nas y for use on the acrospat e businewes itu luckxl the installation of j

F.I 1 anxl F.ltiN aircndt. In addition, the Fl10 vilid. state radar sptems in Saudi Aiubia, G;mada, (ontimaxi o win a substantial shaic of U.S. Air South Koica aiwi Taiwan anxl the lauru hing of t

Force orders in uimpetitis e bidding for F-16 ti>ur tww utellites The Company has pl.n ed mote fighter engiirs. Eg> pt aixi llahiain cleued the than 150 utellites in nibit for conununications, I

Filo to;xmer their new F 16 fighteit n wteoi ologt, v icin e or defenw pm in nes ain t cu r-GE also y on 709 of U.S. N,n y mdeis for F101 tentl) has 33 moie in design, awembly or test.

engines in the first Scar of xx ond-vinn e (om[wti-Other key a hiesenwnts in 1987 wcie the desci-l tion for this GE des eloped engine in addition, the opment of f ull-authoiity digital engine controls in Navy (hose a derisatise of the F 101 Ior its new a joint senture with GE Airoah Engines and Ihe Advalued Tactical Ain raf t.

applit ation of large-v u en liquid < rptal displap j

During the scar, GE tan the NF120 engine Ior for aiu t at t o x Lpits. The displap w cie des clolwd j

the fint tinw. This engine is designed to pow er ihe in a joint cFlon with the Company's Rew.u t h mxi l

new U.S. Air Fone Ads.uned T.u ti(al Fighter.

Des elopment Center.

4 l

Christened Pnnceton in 1987 ceremonies at Ingaus Ship-i buddmg in Mississippi this j

CG59is the 13th US Navy cruiser to be outfitted with the Company's Aegis fleet air defense system and the first l

to incorporate the unproved 1

AN/ SPY 18 radar array (be-hind the orange shieldmgl CE is the prune contractor on the Aegis system for U.S cruisers and destroyers i

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'lhe biggest desclopnwnts in 1987,lumeser, sion than nietal. Aheady a Ic uling supplier of wetc omtnu t awants to GE f or inoie than $2 bil-high per fin man (e plastin for autoinotise binnlr lion in spue aixi sulunatine piognuns.' NASA en, deblx xu ds aixi other paits, GE Pl,ntin is pic Led GE to desclop a hec-Il>ing, ut inanixxl pioiweritig irw tetlitiology for inokliiig att all-l spu e plat fou n; a satelliie-sen it ing i,u ilit y ;.u xi plastic (ar exteiior.

spa e sta. ion (onununications. 'l he U.S. Nas y in pu Laging, GE hel[wil and unnpanicute-i pi(knl GE to design aixl pnvlur c(ombat sptems sign new lxittini water anxi bcs crage ( ontainen j

f or Seawolf sulunat ines, that featute trxan* polycadamate icsin. Ilottles l

Eu nt with slowing donw> tic defense inai kets made of Irxan s esin aie ( rptal(lear and anu h aixi inicinilini o nnlwtition, both bnun hes of this stronger than picsionsly used inateilah.

$3 billion businew aie hwiking Ior new giowIh oir for the unnputer ma Let, GE Platin ollen a p n t u nities. For exa m ple, seu n u lwou n ing - t he numlerof taitoint mateiialulesigned to n plate U.S. gos ei nment's push for in( reased u nnpetition intei nal aixi external nwtal siruc t ui es w it h ple-for delense dollan-is a two-edgni swoid. It pic-tio. The new 1161 Per sonal Sptem 2 %h ulci 50, sents an opputunity tbr growth, as it did in 1987 for example, uses trxan* iesin for the base, w hen GE was awantetl a pn xhntion contnnt Ior soeen befel amt inner suppnt stun tin e-unn-t he Phalanx anti-miwile defense sprem, w hile it bining them into an easily awembled, lightw eight J

( hallenges GE's existing mai ket position.

aix! durable unit.

GE aho legan wor k on a "u na ept house," a liv-i asummmme ing laimmuory that will demonstnite the muSiple GE Plastics broke new giound during 1987 in applications of enginceting thermoplastin in the helping unto iris liiniiiiiiovatis e solutions to u nnt un tion iixlustry.

mar ket nents.

Another Ley tin ust for this $2 billion business is

'I he global leader in engineciing thennople-r esoun e in os e:). Unlike most other plastin, the j

i tin, GE made imp ntant inr oads in the autonn >-

engineering thennopletin mai ketal by GE aie i

tise, pn Laging, unnputes aint u nntiuc tion i erp lable. The Ginn pany iu un ently des eloping j

mai ket s.

piognuns that, f oi enunple, w ouhl iccu le pn L-j Ajoint pnde(t u ith IBlW, for esiinple,(ieated agitig matriiah into automotise parts atxl esentu-j the won kli fint pioihn tion rai with all \\citical ally into building aixl ountnu tion inateiiah.

j b xly powh in,ule w:th thennopletin. The GE lhu ing the year, GE Platin strengtheird its

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mater iah pr os ide lighter w ecight, ilu n e design llex-ability to seis c (intouris throughout the uoi hl h) ibility aixl better resistan(c to impu t alul(ono-establishing a sepitate htninew oigani/ation for i

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The growing popularity of bot.

l tied water has opened an-i other market opportunity for l

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GE Plastics. which has de-s signed a new grade of ctystal-i resm specificany for beverage i

clearlexan

• polycarbonate

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n contamers.

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l Bob Johnson (right) andJun 5' ' /

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McCaffery of GE Plastics ex-amme an inner support chas-l sis structure molded from

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Lezan' resin for use m the

';y new IBM computmg systern in h

the foreground a

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the P.u ilic Rim to tunillel

• xisting organi/atioin in Jalun, w here GE imhls a 159 stake in Yokogawa Euiope ami the l'nital States.

Statical Sptems, this new auluisition iinpunes

)

It aho brought on sticam a new SM5 inillion

' the Gom;un)\\ Ic.ulciship in the woihlwi<le <liag-1x>lycailmmate plant in Alaluma to wne as an acl-m ntic imaging m.n ket.

<litional supply point. Cointnution began on new That Ic.ulenhip was fuither icink m nt by icc.

lacilities in 5outh Korea anxi the Netheil.uuls.

ont sales, onten aixi net inn ome in 19S7 lbr this G E is a le.uler in silimne in imology, too, w it h

$ 1.5 billion businew, iclin ting ihe success of its a wi<le nmge of siliume scal.mts, outings aml c ontinuing (lih e to impios c its o nnpetith e tx n-elastomeis. Superabrash es, sta h as St.m Miule" tuie wot hlwi<le in the liu e of sluggish cloiiiestic hxlustr ial tli.munxts usal by the constna tion in-

<lemaixt uiusni by ont-< ontainment piewuies in l

< hnliy ami ot hers, ai e miot her imix n tant mater ial ihe health-< are licht.

pnxhuni aixt man ketett by GE Pl.ntic s.

G E aho into wha al in hnology ativasu es.u o ns l

its lh e f usic imaging nu xlalities in 1987.

l unummmme in magnetic s esonam e, the M R Max" sptem, GEMedicalSystems has suengtheixxlits uor hl-w hit h features eintioliin horn Jalun aixi GE's j

wi(le inesence tin ough the aajuisition of CGR new wil-shickin! supen oixhu ting nugnet ma<le 1

h om Thomson, S. A. olTnmce, in South Cnotina, mhh es es the woihlwide mar-

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'I he inms.n tion, w hi< h aho imolux! the aului.

Let li>r a mi<l.fiehl 51R sptem.

sition of GE's musumer ein tronic s bininess by Elww her e, G E enh.uu ni in wor klw ide Ic.u ter-i Thomson, was a nnpleic<l at the emi of 1987.

ship in (omputal iomogniphy by.mnom aing a i

The leading pn xhu er ut diagnostic imaging sp.

new dein toi -lusti on a unique < enunir des cl.

tems in l' ram e CGR hokh significant mai ket lxni-ojwd at the O >mlunis R&l) Center - f or in CT l

tions throughout Europe aixt latin America-9S00 Quic k sprem. G E aho ino casal it s lx nition l

sticligthening GEi xnition in those inarket areas.

in x niy with theintuxhuiion of the Advantx" l

CGR aho brings with it um e s cry strong in huol-line ol imaging systems and impioux! its lx nition l

ogy,es]xxially in x ray pnxhuts, that enhames in ultnisouixt and nialcar imaging tiuough a vati-GE\\ glolui cajubility sin (e one limnh of the diag-en ofin hnology desclopmenn.

j nostic imaging mat Let is in x-tu) ounide the GE Medical Sptems'of feiing also iin hules a va-l l'nital States.

iicty of value-achied wr'i< es sin h as niuipment just as imjxntant CGR gi es GE Medical Sp-nuintenaiu e, Ic.ning anxl lin.u u ing. Ibr example, tenn a su onger thice-mntinent law of olrra-the Maxisen i(c" p.u Lage - w hi< h pim ides tiom.Joiird w ith ah e.uly su ong engineer ing atx t IIcxible equipment leasing, nuintenain e am t in-manul.a t uring bases in the l'niin! States aix!

sunun e-is unique in the diagiuntic inuging j

iixtustry aixt has lu onw a pieletini riwilu ul of auluiring high tu h diagnostit sptenn.

mammuumme

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GE factory Automation is a< hiesing g< = x1 gion th l

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thiough the GE l'anur Autoination On poration, a

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50-50 joint sentuie between GE atxt l'ANUC 1.im-itnl of lalun that mmpletalin liist scai of opera-4 tion in 1987.

()lwntting sulnidiaries in Notth Amerini, Euio}w

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p aiul Asia ghe thisjoint sentuie a stiong luse in the woihl's th ec major nur kets for fat ton automa-tion n[uipment, sof twav e, spterm a;wl wn it es.

A signihcant 19S7 a< hicsemenit was GE l'anut \\

fx wln tion.n a single-soun e supplici of ln ognun-r N inable mno oller aml nu mer ical ( onn ol pn x hu ts 7

h>r Geiwial Moton' Saturn manul.a tuning (om-plex in Temwwee. GE aho will pn n ide gerwnil pm p ne mutioh alul cln tlical distr ibution niuip-A nwnt (we juge '.'n) f oi the Satuin piojn t.

GE Afedica/ Systems is helping ducedin 1937, AfR Afaz pro-gg g anm aho built on c.ul luient minIun)\\

to make the wonders of medi-vides an economicalapproach u

caldsagnostics avadable to to magnetic resonance imag-ieput.u on or m}own on. Ia new ku.n Un more and more patients ing and can be usedin moble

( oinputel ntuiK 1 u al < tuitiol ciul>les nt.u hilw tim th through innovations such as AfR units shared by several to olwrate laster aixl inot e at < uratch. l.ikewiw, in the AfR Afax' system intro-cinics or hospitalt new Snin!Hi" plogranunable(ontiulle < an do the same los a salictv of 1.u tor) thun pnx ewes.

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' es " ca'i' i' v ""a ""' n" a c"i 'vh " - '" '"'-

lx ntant inter' national mai kets.

l The inent autuisition of Nasistar Financial On ix o ation Canada, for example, has su ength-i enal GE Qipital's pr escia e in Cinada. Nasistar

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From creaticity and screice comes added calue.

Financialis ow not by GE Gmada but is nunagni i

lly c ombining iixlis idual cicativity wit h out-by GF. Capital. w hich had nesiously olwiel onn-i staixling sen ic e, w e gis e our customers added mei

,! ical estate, njuipnwnt finarning aiul o>r-value - that extra "sonwthing" that often deter-lxirate.ioain ing a( tis ities in Cmada aixi Europe.

I l

mines w ho wins arxl w ho loses in the sen ic es ser-With its S:12.5 billion in twt candng assets GE j

tor of the aonomy.

Capital run ently stands in the fmnt runks of sup-l This goal-prosiding added value for cus-plien of capital to business. It is an innovator in i

tonwn-has helped keep GE ahead of the onn-annnwnial r eal estate financing aixt a leader in

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petition with:

sin h fiist-growing ateas as lescraged buyouts

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> Finaixial Senkes (1.lu h), full-sen ice leasing, auto auc tions aixi i e-

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> Nationallitoadcasting Onnpany tailer financing.

> Gunmunications aixl Senics in u munen ial r eal estate, G E Capital specialues i

in a eating one-of-a-Liixl financial pac kages pri-mw e i maiily for existing prope ties rather than for new GE FinancialScreices is one of the largest, most constnution -a strategy that has set it alxut from 4

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dis enified unn[wtiton in the global mar ket for li-most leixlers anxt has led to phenomenal growth.

j naix ial sen ic es.

1)ur ing the year, its asset ix ntfolio in onnmercial Thr ough its thrce subsidiat ics - GE Qipital ical estate grew by 37'I to $6.1 billion.

On [ oration (Ior mer ly General Ela n ic Cialit GE Cipital(ontinual to be a major player in On1xnation), Employers Reinsurarue OnImra-leveragni bu> outs, too, helping to finance the ac-j tion arul Kidder, Pealx xty Gr oup - this business quisition of 2 I onnpanies in 1987. Spec ial focus has expaix!cd rapidly to w here it now has more was pl.u ni on Imuling nwrgers arxl aoluisitions in j

than $60 billion in aucts aix! a leadenhip position four major iinhistries - nwdia anxi omununica-l 1

in inany l' S. financial nic l'es.

tions, ictailing, heahh care, insuram e - anxi in l

In addition, GE Finaixial Senit es has made the l'nited Kingdom, w hit h is the world's suond pn rgt ew in implenwnting a sclenis e strategy Ior largest 1.150 m.u Let af ter the l'nited States. Con-i into national expansion based on bringing its key sider ed to tw a pioneer of the 1.110 onu ept, GE l

j awets - fin.ux ial innovation, value-added sen-Capital has prusidal financing for iixlis idual l

I l

4 l

financialservices from GE give customers added value.

4 For example. GE Capitals Grabeth Stevens and Kip frassa, center andleft on the previous page. helped devrse a specialisnancing packagein 1981for realestate developer Bob Starnes (pictured Mth

,, a theni !! allowed him to se-y cure additional (mancing r,

through a $60 mllton restruc.

turedparticipatron loan on his 4

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(nght) m Fort tauderdale. Ik

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Budding on its success in le-veraged buputs. GE Capital annunuma===

provided a management par.

ticipatron recapitahration loan

_q' that enabled a group of man-4 agers to acquire equityin Kemet Electronics, a umt of Union Carbide that manufaw tures capacitorn 12

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enticpiencun or nuiugeibent gioups to auluit e ihis aica during I!iS7,ino e,niog its net eat tiing 111 (om;unies sin (e !!)S2 -including un h nated awets 169 to S3.1 billion.

ones as Tillany ;ux! R.I1. Macy.

Einployen Reinsunuae, the secoixilargest U.S.

Fullaenic e leasing is another nujor glow th in ojwity atul rasually icinsuier, has itu t emed its i

j aiea for this businew. A inognized leadei in iwt w ritten inemiums aixi cainings cat h car S

l ujuipnwnt leasing, G E Gapital he moral liom sinc e it was auluiint by GE in 11181. Emplo)eis j

nwit y finaruing aucts to gaining extra iec in.

Reinsunun e also is ino ceing its glolul adivities t

1 (ome by adually managing those awets-tin ough sclntiw auluisitions, its caily l1188 pm-w hether thev be ununwn ial ain raft iailcan, chasc ol inaltica Nordisk Reawunune ofl)en-shipping onitairwis, car s or tna ks.

nui k, for example. cnn en(hes it as the f ourth 1)uting the year, G E Capital str engthened its as-lar gest seinsuier in the world, set nuiugenwnt }xatfolio hs aujuiting Gelu> Cor-Kidder, Pealm xly, w hit h is 80% owixxl by GE, ixnution, a leader in automotis e llect anal um-iemalin an iminntant just of GE Finataial Seiv-i uiner leasing. It also auluiini 1)&K Finain ial i(es despite !!!STs tunnoil in the sta k mai kets.

l Corp., a Kiut t, Inc. subsidiaippnializing in leav Aululini by GE in 11186, Kidder annoutant plans ing automobiles aixi light tr uc ks. These two aujui-in 11187 to t estunture its opciutions to become sitions, together with the picsiously aujuiint Kerr moie unt-cifettis e w hile sluipening its f oc us on I rasing subsidiary, gis e G E Capital on nenhip aial capital nui kets a xl itxlisidual sales.

t nunagenwnt of a licet of more ilun 230,(HHh ehi-(les. In addition, Geintar Contaiix r Cot lhiiulioii, oewma another GE Capital awet nun,genvent bininess, National Broadcasting Company is the leader in baume the woild's largest (ontailwr-leasing com-iwt wot k teles ision.

juny by awuming Geluis container business.

1)espite ( hanges in the way TV s iewenhip is

)

GE Capital exluixled its auto atu tion Lininess, nwasured, this $3 bil!!an business remained num-I too, auguiring nitw inoie outlets. It now has 17 ber one in prime-tinw ratings for the thiid straight l

audioin luixiling mote than 1(W),(HH) used ran s year-wiiming 18 out of 32 wceks,its best per-aial titR ks a month for thous.uxls of dealen, all h n nuiu e on Icon d. Ratings detennine w hi( h net-nujor auto manuf a(ttu en, tental car (om[unies, wor k in cis es the biggest penentage of advenis-flect olwraton aixi finain ial instit utioi:s.

ing icten ue.

In iciailer hnatuing Gt{ Capitalojwintes the It also was the thiid unna utis e s car that "The iiuhnt ry's lat gest pris ate-label ordit (ant busiirss Ca nh) Sliow" filiish:d as TV's higliest-r;itnl sciies.

j for soine of the 'voild's twst-know n ictail u nnpa-With sin h other popular piognuns as "Cheen,"

l nies. G E Capital exlrricia ed cu ellent giow th in "Night Cannt," *A !)illeient World"aixi"The I

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1 1987. broadcasting right days 1

of Eve news from China -in-clohng this segment of the "Today~ program with Jane Pauley and Bryant Gumbelat the Great WaK NBC wD re-turn to the far Eastin 1988 to tebcast the Summer Olympics h.

trom South Korea.

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SateRite dishes at this GE Amernom earth statson m Ca%unos recewe and transmit signals to octutmg commuruca trons satelbres GE satrHites c.ntrred more than 14 Ol10 hours l

of radio and TVprogrammmy e neek dunng 1981 l,

Gohlen Giik" leading ihe'[u( L, NilC ciuled the the othen being in New YoiL, Ins Angeles, Chi-

> car with lise of the top 10 series on TV.

cago, Cles claixt and Washington, D.C. - that to-llesides its top ranking in prinw time, NilC in gether reach 22.49 of l'.S. homeholds with TV 1987 continued its leadership on Saturday morn.

sets. NIore ti an 200 iixlependently ow nni stations ing anxiin late night viewing. In addition, NilC aim aie af filiated with NilC, gising the networL New s mntinued to impiove its ovenall perform-nationwide (os erage, aine while enhancing its reputation for outstaixl-In another move, NilC sohl its radio netw ot L5 to ing-esen newsmaking-mserage.

Westwixxl One, a pnxtuc er anxi distributor of na-The"T(xlay" prognun anxi"NilC Niyhily News tional radio programming. An agreement to sell with Tom lliolaw," for enmiple, went on the ro,ul NilC's A51 nulio station in Chicago was an-to Chiru for an unpinedented eight day s of th e nounced in 1987, but the goseinment onler re-telecasts from the People's Republic. NilC News quiring disestiture of four other NilC nulio sta-i anxi liiokaw scored another wup with the fint tions was tem;mnirily stayed.

one-on-one l'.S. telesision inteniew with Sosiet A piorwer in broadcast in hnologies, NilC an-leader Mikhail Gorbac hev. The networ k devotal nounced that it is deseloping a bm.ulcast transmis-l two prime-time hom s to an NilC-sponsorni de-sion sy stem that,if adopted, would signilitantly l

lute among 12 presidential caixlidates. NilC aho impros e picture quality w hile remaining mmpati-l exteixled its highly aulainwd "Today " conc ept to ble with cunent TV staixlaids. Called Advan ed the weekeix! with the ininxtuttion of"Sunday Compatible Telesision (ACTV), the s) stem wouki T(xlay."

delh er a wider, clearer pictm e for home view ing.

NilC had other notable prognunming achieve-In (ktober, following an 18-wcek strike, the ments during 1987. Netwoil telesision's longest-National Association of Ilicadcast Employecs arxl i

running program, "Meet the Press,"(clebrated its Technicians ratified a new 29-month mntnut loth annh ersar y on the air. NilC's broadcast of with NilC.

1 the 1987 Iiesta llowl between Penn State aixt Miami of 11orida was the most-watt hed college i===nma foottull game in history. Among NllC made-for-GE Communications and Services helps iixlisid-i telesision films that won critical aulaitu uere uak, bminewes aixi gm einments utilire u xlay's "l.lij: The Early Yean"aixl"Eye on the Spanow."

mass of information through the use of satellites, During the f all, GE acquit ed WTVJ in Miami, mmpuien anxi other advanc ed in knologies.

w hi(h came uixler the supenision of NilC along A nearly $2 billion enter prise, GE Ceunmunica-with another GE station, KCNC-TV in Demer.

tiom aix! Sen ic es is mm[nsed of six dh ene oper-GE and NilC now hase sesen telesision stations -

ating units. Sale of a sesenth unit. RCA Glolul l

Communications, to MCl Conununications Cor-

[nration is ex[utnl to be mmpleted in 198S.

l GE American Cxanmunications ( Anwrit om)

I mntinued its leadenhip in donestic mmmen ial I

satellite senices in 1987, operating sesen omimu-mcanons s.nellites aix! a networ k of canh stanons.

i GE Mobile Conununicatiom nwets the giowing l

need for mobile land-lusul sy stems with pnxlucts nmgmg from haixl-held two way nulim to luse statiom aixl entir e sy stems.

l A thint unit, GE Infonnation Senices,is a lead-l mg wor ldw ide supplier of i)ctwoi k-lusal sen it es l

that integrate ( om puten, sollw at e alul (oin mu ni-

)

(atiom s)strim.

j GE Cninputer Sen i( e is a leading iixtepcixlent j

sen ice bminou ihat pr os ides sin gle-soun e, ms-torni/etl ic[uir, nuinterunt e aiul leiitallcasing

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'C U u w of a o n.H iange of minputer aiul cIn-j A

tioine njulpnWut alul s)steim.

The Carfone

• cellular tele-GE Comulting Seni< es piosides mutnu t solt-phone kom Cf Moble Corninu-w,ue desclopnwnt wniws while GE Unn einnwn!

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9.isi es is a Ic.uling pi nider of engirwering, s<i-j I

through its innovative desigrt entiht,uxl of her in hun al wni(es f or satiom Inl-l easy mstallation nd sunple cial aixl state gos cr im ent agelu ies.

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l Core Manufacturing Businesses

~;" c "' c"'. a ""iet r "n'" ai'~ "'"n'i""inu pnuluca aixi fne new Potuubber* <lisinvashers.

'lhe new toirmount reliigeraton aie the pnul-utt of GEi accent $238 million iinestiiriit iiiits mumuusmus iefrigeration busiirw. Aucinb!ctlin highly auto-from high guality and low cost comes customer mateil fattotics in Kentut ky aint f eaturing rotary I

satisfaction.

tom lnewin aunulat tuic<l at a newly olwirti liy chhing for high quality amilow manulauur-plant in Tennewee, t he irliigenuton bas e been ing (ost, we aie ni.it keting the pu xlut a aix! wn-completely set!csignc<l to nwet t omumer ex-it es that will t(tist) nur (ustomets in glolul mat-pet tatioin for high qttality, latge(ajueity aixi Len that ar e getting tighter aixt tougher ca( h year.

(om enient c.

1

'lhis chise-to he the high quality. lowx ost GE also lille(l out in iww linc ol Monogram gh>lul(oinpetitor-is the heart of our lea <lenhip built in appli.unct Sening the high-etxl kin hen strategy in:

(lesign maiLet, this f ullline of untom-buik appli.

> Appli.unes an( es iia luttes u n >Ltops, ilishwashen, r eliiger a.

> l.ighting ton, wall os cin at xl iniu owas c os em.

> huhntrialan l Power Splenn Another 1987 highlight was the Cinnjunyi new

> Ein tii(al l)ist ribution aixl Conn ol "Satisf.u tion Guaranten t" piogram. It lets t on-

> Moton sumcis cu bange or ictur n GE or f lotix > int appli-

> Tran,lw ntation Spteim ant es tor up tn !Hhlap alter purt haw il they aie iliwatishal f or any reason.

Busimumms The C<nnpanyi(ominiinwnt to comniner wiv-GE Appliances c ontinuni to "In ing goi al things to ic e in eis al lunher piaiw <huing the year. The j

hlelos millions of lwople.

GE Ainuer Centei

• wnice, for exainple, was The U.S. mai Let lea <ler in majoi appliaia es for nanw<l the nationi best te!cin.u Leting olwration the honw, this moie than $ 1 billion busiiru ;uhint by the 1)iini Maiketing Awui.ition.The Amuer to in reputation foi pit uhn t innosation arxi t us.

Genter, available 2 i houn a <liy h) <lialing (N HI) i tinix i sitisl.a ti< ni cluiing ihe ycat.

ti2li-2(H H), b.is lia xIlect inore tli.in 12 inillion toll-A total of 190 new GE aixl Ilotl=iint inocleh fire (alls liom (omunwn sint e it opcixxl in 1982 weir inin = hn al in 1987. 'l hese int hulnl a irw aixl, chie to in suu ew, has now esp.uxlnl in st olc geix iatiini ol tolFliu ntlit telligetaton,23.ul<li-to itu ltule teleitus keting t a nnulting wn k et tional nx wicis of g.n tunges, GE\\ lint ek-( n ie GE Appliaiu es also autuiux! Gem Pn=ha n, ranges w iih solkt-disk u = >Liops, ws en tww mian-w hi( h enham es in l= nition as the Ic.uling supplici l

4 CE manufactunng is somed at satistymg customers. On the precedmg page, for esample.

Rotence Jean Rose performs a quaaty check on refngera-i tors bemg rnanufacturedat GE l w~~~~

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Apphances*moderni:ed. auto-l matediouisvDe refrigerator Q R.

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plant. The new Sat sfaction

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l Guaranteed

• program intro-j ducedin 190 now bachs up I

i the quakty of al GE and Hot-l poet apphances i

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g Jzny Scruff of Chicago's b

g Blutter Design Group that she

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selected them shen remodel-ing her own apartment i

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p enn u in un u nh \\1 \\lti ill \\h xn i, n, uuki an h n un oi ih ui n ionihlh n in hghung pn ha is

.1[il>llinis li 11 t i oilllM li ul. II H lil li 1.i!.tl H 1 i i ellsilllH I til.ll ki ! s 1.1114. s ti n I e o l n f l

ils ilt u e in I Q\\ Nt\\ ltiQ l l.t h iQi li l'i l li st ill.ll o i 11 t is M

lin i filyli i i dt.i ii i H b l it ly lIlli,l t

< lil 1.t llll Is lii Gt. Lighting n uu e t u s n u u n i s ni l'm! i,o u.u ni,hu ui n ai 11 n ii niil in l'87 In iln en a da n illid.1 g li,d i l sll.Ill e d iln u s o h l fii.ii kt t ld o nid s i niiiiH l' ul J1H I u H ilnii ul lihu ki is Il d lllli g l,11 Illi i s i

( ui n in k iln % o t h \\u n i n an u to ki I h.n h i musumeras u n h al,ul t uiilulln oi heln hulh, u,hl l = i u,o (.I GE industrinland Mnwr {ptons lus unnh I iahnne n i sohlniuna nsii p,un u noni u n h i h.u n.u n i lunei s ni ns ih ni n i n nuin on pn h ine W,huluuiul(i, nihiot i n. i s p.u n l i he inu u in su ppIn i i n j a.u t i ai ni i.u n in iijinj oiw ni i

o n p. u n s j oi u in i n i i hi 1.o I mi (hn p ont a nil u i s n i s n i a n i o 1.1 n ul Li i i h o n h il hs i k i h n

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i n un<l o ni un o uun g iln ( a n j i. u t,

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on sen icing-aixl impnn ing-the installed 1x)wer plants. This project represents a $ 1 billion "lleet" of nearly 12,000 GE steam aixl gas tuihines sales lx>tential for GE. It includes fuel fium GE worldwide. GE upgnule prognuns help utilities Nuclear Energy, which continued to focus its re-become more eflicient, such as a recently com-sources on fuel aixl senices in 1987.

pleted project in Egypt that increased a power Also included within this business are GE Power plant's output by 50g without any increase in fuel Delivery, whose new electnmic time-of-use meters consumption. Other turbine upgrade prognuns are gaining wide acceptance in ihe residential are geared toward industrial users, such as paper mai ket; aixi GE Drive Systems, a leading supplier mills, to help meet iheir(hanging needs fi>r power of customized controls aix! drives fi>r indust rial anxi process steam and utility applications worldwide.

These upgnule prognuns are implemented by GE's worldwide network of sen-ice shops aixl field engineers, the largest sen-ice contingent olTered GE ElectricalDistribution and Control received by any electrical equipment manufacturer.

one of the largest ordens in its history during 1987 Another key thrust is in building turnkey power when the Saturn subsidiary of General 51otors se-plants, especially for the cogeneration market.

lected GE as a single-source supplier for its manu-

'li> maintain technology leadership, GE placed facturing complex in Tennessee.

on test its highly advanced 7F gas am bine fi>r 60-As a Saturn supplier, GE will provide the plant's cyle applications anxl signed an agreement with entire electrical system - switchgear, panelboants, Alsthom of France to codevelop the woild's most transformers, sa fety switches, motor control cen-powerful gas tmbine for the international 50-cycle ters, substations aixl several miles of busway. The market. It will be able to pnxtuce enough electiic-plant aho will include lighting aixi factory auto-ity to power a city of more than 150,000 people.

mation equipment from GE.

International alliances - GE Tu r bine alone has The Saturn contmct helps reaflirm GE's posi-21 foreign associates in 13 countries-continued t;on as a leading supplier of pnxiutts that distrib-to open offshore mar kets. The Taiwan Power ute, protect anxi control the flow of electricity.

Company, for example, ordered four large steam-

'li> maintain that position, GE has committed an turbine generators to be manufactured by GE aixi investment of more than $300 million over the its hxal paitner, United Asia Eleuric Company.

five-year peri <xi cixling in 1988 to upgmde its On another front, the Tokyo Electric Power plams anxi pnxlucts. As a resuh, GE Electrical Com[xmy seleued GE-in a consonium with To-Distribution anxi Control has intnxtuced more shiba anxi ilitachi-to provide major generation new puxlucts over the past three years than were 4

equipment fin two advanced hoiling-water nuclear brought out in any comparable period.

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heyuixi pnxtuct imiovation aix! plant invest.

uct': strateg'y is impmtant as Ioreign production of ment, this neady $ 1 billion business is seeking to m ator-containing pnxtucts increases.

improve its global competitiveness thningh stra-tegic alliances in Europe ami the Far East. An agreement signed with Fuji Electric ofJapan in GE Transportation Systems intnxluced a bold 1987 was a major move in this direction. This new concept in the hicomoth e industry in 1987.

agreement calls fbr an exchange of manufacturing Referred to as 1.MX, this new "power purchase and engineering technology and could lead to the program"is giving the Burlington Northern Rail-joint development of new electrical distribution road substantial openuing benefits by more closely and control pn xlucts fbr ihe woddwide man ket.

integrating its capital spending ami long-tenn op-erational needs.

ummmmmma 1)cveloped in conjunction with GE Capital, GEMotors took a significant step to retain its 1.MX encompasses 100 new 1) ash-8 kicomotives global competitiveness by starting up ajoint ven-with a 10-year operating guanmtee for reliability ture with II)nixlai of South Korea.

and availability. With maintenance perfonned un.

The highly automated Korean facility comple-der contract by GE, l.MX forms the foumlation l

ments existing GE plants and pnxluces newly de-for a significant senice ihnist by GE Trans;xnta-signed motms to lxm er pumps, compressms, fans, tion Sy stems.

blowers and other equipment. Thejoint venture This business also nceived several sNnificant supplies Nonh American customers and opens ac-orden in 1987, dnunatically improving its maiket cess to the growing Pacific Rim mar kets.

share. The Union Pacif c Raihoad, pleased with GE Motors took other ac tions to enhance its ixw the reliability aml quality of an earlier GE delivery, sition as the wodd's Icading supplier of electric ordered 75 new h>comotives from the Company, motors. It improved customer sen ice and pnxluct They will be the most [xiwerful diesel-electric kr quality. It designed new motors for the autonn,-

comotives ever built by GE. Other key orders -

tive, pool ami spa, and business equipment mar-totaling another 125 h>comotives-came from Lets. And it announced a plant consolidation pn*

Southern Pacific, Conrail, and The Atchison, gnun to better utilize domestic capacity and

'Ibpeka and Santa Fe.

reduce costs.

GE Tmnspntation Systems also is a leader in Another key nu,ve Ihr this S1 billion business elec tric pn> pulsion systems for transit cars, suc h as was ajoint venture with Daewoo to pnxtuce nus those it is providing to the New York City Transit tors for nxnn air conditioners made in Korea for Authority, and in propulsion systems Ihr giant off-export to woild markets. This "follow the pn xt-highway vehides with capacities up to 210 tons.

The Dash 4in the centeris

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more efficiently 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 Company's

' international sales competitiveness by structuring aixl fulfilling ihe offset, cou nteit nule aixi barter requirements that are increasingly an integral part International su engthens GE's global competi-of overseas sales agreements.

tis eness through a regional and cotmtry org;miza-During 1987, GE Trading Comixmy genenited tion that promotes business deselopment in key more than $250 million in ofIset credits fi>r ihe man kets and helps establish strong relationships Company. For example, it completed - five years with international customers and partners.

ahead of sc hedule-a prognun in China for GE hicicasingly, t his international organization is Industrial and Power Systems aixt also structured fi>cusing on finding anxi liicilitating major alliance a l>arter deal that allowed GE Tnmsportation Sys-op1x>rtunities with leadmg European and Asian tems to sell locomotives to Galxm.

companies. Recent examples of this emphasis abound: the auluisition of CGR from Thomson and the sale of Consumer Ela tronics; the stnuegic GE Semiconductors designs aixl fabricates semi-alliance between Fuji Electric and GE Electrical conductor chips fi>r other GE businesses as well as Distribution anxi Control; alliances fi>r GE Indus-for the external market.

trial and Power Systems with.\\ liddle East part-Combining the solid-state iesources of GE, RCA ners; a new partnership in hxlia fi>r GE Plastics; and Intersil, this business is one of the leading sup-andjoint sentures in Korea for GE l ighting aixi plicis of ChlOS integnited cir cuits and xiwer de-1 G E.\\lotors.

vices in the United States.

GE is li>cusing its solid. state thrust on the auto-m-

motive, military and indust rial mai kets by leverag-GE Canada also provides the Company access ing a strong ASIC (application specific integnited into some im[xntant world mar kets. About circuit) capability with a broad line of CNIOS logic S210 million of GE Canada's s; des are for ex[xn t, des k es in addition to standard and "Smart Power" induding such pnxlucts as hydrogenemtion pnxlut ts. It cun ently is a major supplier of CNIOS equipment amilarge motors.

logic pnxtucts to the U.S. government.

One of Omada's largest industrial concerns, GE in addition, this business signed a long-tenn Omada continued to concentnue its iesoun es on agreement with 11151 during the year io oxlevelop thice basic areas: consumer pnxlutts, te hnology-new ASIC puxlucts and technology that will have based pnxlucts aix! x>wersystems.

bruad application for both inteinal and commer-i cial use, umuumumme Ladd Petroleum provides a lxickup supply of petn> chemical feedstoc k for G E Plastics as well as more than 50% of the natund gas used by domes-y tic GE plants.

One of the 10 largest U.S. iixlependent (non-i major) oil aml gas comixmics, ladd has weathered the dedine in oil anxl gas prices cun ently af fecting the industry. It constnnted two gas-gathering sy s-tems in Texas in 1987 and continued to expaixl its eas-mar keting piognun.

musumumms

'=, -

GE Supply suplxats the a( tivities of ses eral GE lN businesses by providing sales and distribution y

(hannels fi>r clattical equipment to U.S. cus-toincis in the Hxhist nal aix] constniction inat kets.

"Y""?I"E" CE anadaandGEfanucl' ave operate thepaper. making Y

teamed up to supply the mo.

sachinery at Domfar's new inent, lighting, motors aix1 fix tor y auiomation fors, drive systems and these fine papers millin Windsor, pn xlutts, this $ 1 billion business sells a Kl distiib-programmable controllers that Quebec.

utes (ompleinentary non.GE pnxhu ts.

22

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l Management's Discussion bf E rnings mummmmaus Tb Statement ofEarnings summarizes GE's opemting

> Unusualitems ieported in 1987 by GE consistal en-perli>rmance for ihe past three years. Operating results tilely of prosisions li>r business restructurings. Ilusiness li>r 1987 irxindal a full year of RCA opemtions while restructuring expenses invoh e significant ( hanges made 1986 results iinluded RCA fi>r only seven months.

or being made to position GE fi>r future gnm th by ra-

> The 17% net earnings increase in 1987 resuhed tionalizing, reorg;mizing aial imin oving pnxluuion ac-from solid opemting perfi>rmance from GE's businesses, tivities; reducing foreign and domestic risk exposures; particularly Aircmft Engines FinancialSenices, Aledical aixi phasing out or otheiwise tenninating business artisi-Systems, NilC anxi Plastics. The carnings increase in-ties inilonger compatible with management's long-tenn cludes one-time gains from two accounting changes strategy objectives. Allocation ofimusualitems,iinlud-made during the year arxl significant pmvisions f or busi.

ing business restructurings, by iminstry segment foi the ness restructurings. Since these gains aint unusual ex-years 1983-1987 can be fourxl on page 31. For GE Finan-penses complicate analy sis ofIhe 1987 Eamings State-cial Services, unusual items iepresented provisions for ment, they are summarized by quaner in ihe table below business restnatu rings and insider tnuling ( harges ie-and are discussui more fully in the following paragraphs, corded by Kidder, Pealxxty.

> The extraordinary loss in 1987 is for thc lncmimn Restated quarterly after tax earnings increase!(decrease) resultmgfrom accountung changes and unusual expenses inwtral by GE Qital Corpontion for cuily retiiement First Scanal 'ihird Founh of(ertain high interest-mte debt as past of.h.nancial ic-(in millions)

Quaner Quaner Quaner Quaner Year structuring. When replaced with lower-cost borrowings.

Accounting changes there will be an ovendi economic benefit to GE.

Imentorv

$ 28i

$ 281

> Totalrecenues were up 10% in 1987 li>llowing a 269 Inuime tas:

increase the year beli>re. Inclusion of a full year of RCA Cumulaiise businesses in 1987 panially accounts fi>r the cun ent-year cdi i unct 5) b)

b) ina case. Industry segment inli>nnation beginning on

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Total

$ 831

$(11)

$(12) $ (31) $ 720 well as other operating infi)rmahon, in total, the innease Unusual hen" of 129 in sales was more than accounted fi>r by a higher l

\\"I"""'"f shi uneius 1xu tially offset by lower piices, a

. l Fs Extraordinary item (62)

(62) sHuauon sumlar to that m 1986 compared with 19Sa.

an ngm nan al cc arnonunental on hal

$(20X)

$2)

S(10) $(430) $G17) under mdustry segments.

> The ineenf ory accounting change was made in Other sources ofincome were down considerably -

198Ts first quaner. The change indodes more manufac.

369 in 1987 following a sharp increase in 1986. Princi-turing os er head msts in inventory. This better matches pal reasons for the decrease in 1987 w cre lower income GE's pnxhation costs with resenues and aligns GE pmc.

from shon-tenn investments, which had built up in 1986 tices more dosely with the capitalization practices in the preparatory to the RCA acquisition, and low er gains Tax Reform Ao of 1986.

from fewer sales of'linhiba Corpomtion sud.

> The deferred income tax accounting change rella ts Totalcost ofsales and selling, general and adminis-ndes that were revised fbr all comixmics during Decem.

tratice expenses increased i 19 in 19F7, or one point ber 1987 with adoption allowed in either 1987,1988 or less than the related increase in s. des. This relleos man-1989. GE chose 1987 to adopt the new rules despite the agement's continuing drive to im pi os e cost st r uct ures complications created by the restatement requirements and strengthen pnxtuttivity throughout GE.

of the nding.The accounting nde, Statement of Finan.

> Interest and otherfinancialcharges were up $20 mil-cial Accounting Stamlards No. 96, requires that,if lion in 1987 lbliowing a $261 million increase in 1986, adopted in 1987, the cumulatise impact of the account-Inincipally related to the RCA acquisition. The 1987 in-ing(hange up toJanuary 1,1987 he restated to the first crease came from a somew hat higher as emge level of quarter even though the decision to adopt in 1987 muld interest rates partly olTset by somew hat lower avemge not be made helbre the lburth quaner w hen the Stan.

lxin owings.

dar d was issued. The 1987 quanedy impact of the new

> Details of theproeisionfor income taxes, exduding accounting metiuxtology also is show n in ihe alwn e table items penaining to ihe 7 umulatis e c;m hups" discuwed of quarterly restatements.

alxne, can be found in note 8 to the finamial statements.

21

Statement ofEamings General Eleuric Comjuny ami consolidated alliliates For the >can crated December 31 (In millions) 1987 1986 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 Financial Sen ices, Inc.

(note 15) 552 501 113 Other income (note 5) 648 1.013 5 11

'li>tal revenues 40,515 36,728 29.210 Costs and expenses Cost of g<xxis sold 22,359 20,757 17,672 Cxist of services soki 7,298 5,130 3,171 Selling, general aixl administrative expense 5,979 5,963 4,59-1 Interest arul ot her financial charges (note 6) f>15 625 36i Unusualitems (note 7)

(Gains) from sales of assets (50)

(518)

Prosisions fi>r business restmcturing a(tisities 1,027 311 1-17 Special pay ment to nonexempt anxt hourly emplo)ees 93 Total costs arxl expenses 37,308 33.036 25,820 Earnings before income taxes, extraordinary item and cumulative efect ofchanges in accountingprinciples 3,207 3,69

8,120 Prosision fi>r income taxes (note 8)

(1,088)

(1,200)

(1,113)

Ezrnings before extraordinary item and cumulative efect ofchanges in accountingprinciples 2,119 2.192 2,277 Extraonlinary item - G E Capital Corporation loss on caily extinguishment of certain long-teim debt (note 15)

(62)

Cumulative effect toJanuary 1,1987 ofinitial application of Statement of Financial Accounting Starxlards No. 96-

"Accounting for Income Taxes"(note 1)

GE anxl consolidated affiliates 59 GE Financial Senices, Inc.

518 Cumulative effect toJanuary 1.1987 ofchanging overhead recorded in inventory (note 1) 281 Net earnings S 2,915 52,lg S 2.277 Net earnings per share (in dollars) liefore extraordinary item and cumulative elTet t of changes in accounting principles S 2.33

$ 2.73

$ 2.50 Extmordinary item - GE Capital Corpomtion loss on early extinguishment ofcenain long-term debt

(.07)

Cumulative clTect tojanuary 1,1987 ofinitial application of Statement of Financial Accounting Staixianis No. 96-

"Accounting for income Taxes" GE aix! consolidated aIIiliates

.06 GE Financial Services, Inc.

.57 Cumulative elrett toJanuary 1,1987 ofchanging overhead nrorded in inveniory

.31 Net earningspershare S 3.20 5 2.73 S 2.50 I)is idends dec lared per shat e (in dollars)

$ 1.325

$ l.185

$ 1.115 The notes to finan< ial siaiements on juges 3701 aic an integral pu t of ahis statement. Per-shar e amounts has e been adjusted f or the Mor 1 sim L split in April l!is7. Financialinfor mation imindes RCA results fromjnne 1, !!NL 25

Management's Discussion of Financial Position l

sumusmann GE's balance sheet-the Statement of Financial Posi-was nun e than acomnted for by the effect of( hanging tion - slumed an increase in total assets to almost GE's inventory an ounting to iin lude (cuain types of S39 billion at year-end 1987, up S 1.3 billion from 1986.

manulitctming oveihead nesiously charged diiectly to i

On December 31,1987. GE aix! a Fiench electronics expense (see tu>tc I to the finainial statements) auxil>y company, Thomson, S. A., completed a tmnsaction in redassificanon of RCA Aerosixne atxt Defense lulaines w hich GE acquir ed most of Timmum's medical equip-to the lusis used in GE's Aerosp;ne busiirss. Aggiessive ment business (CGR) aixiTimmson auluited most of im entmy management is jun of GE's wm king capital G E's consumer electronics business. CG R's assets aixl lia-elficiency dris c. anxl at > car end the numtwr of days of bilities are included in GE's year-cixi 1987 balaines based output on hand was 153, or i 1 days less than at ikcem-on pieliminary, estimated data. Consumer electronics' ber 31,1986 on a comiurable basis, anunmts have been removed from year-cix! 1987 The last-in first-out (1.lFO) icvaluation inricased balances.

$3S1 million during ihe year, mostly ielated to the im en-

> Cash and marketable securities dassified as run ent tory acomnting change disc ussed in note I to the finan-at December 31,1987 amounted to $2.7 billion, up $773 cial statements. In 1986 aixl 1985, these had been net million. Funds heht for business des eloinnent, whic h are favomble I.IFO adjustments to cost of sales of S lo I mil-not dassified as current assets, deneased by $316 million lion mxl $ 171 million, respectis ely. These amou nts in-to S81 million in 1987. The decrease represented princi-duded reductions in 1.IFO ieserves of S51 million (1986) pally GE's inn chase of a television station in.\\liami, Fla.

and $128 million (1985) because of reduced inventory

> Current receicables are mainly amounts due fmm levels, mainly in power systems businesses. Suc h favor-customers ($5.5 billion at December 31,1987: $5.7 bil-able adjustments from lower im entory lulanc es were lion at lktember 31,1986)..N!ost of the decicase was malest in 1987.

accounted for by the sale of the consumer electronics

> Other incestments increased 51.7 billion in 1987.

business. At year end, customer te civables as measured

.\\fost of the increase was from gumth in ietaiird earn-by numher of day s billing outstanding wer e 36 day s, ings of Genend Ele (tiic FinancialSenices. Inc. Other down from 39 days on a comparable basis at the emi of increases induded additional investments in associated 1986. This was the lowest point for this measm enwnt in a nnpanies.

many Scais. Other customer ic(eivables measurements

> Intangible assets,icpresenting mostly RCA intangi-sut h as delinquency ratios and amounts past due also ble assets such as licenses aml gombs ill at ising fiom the impi outl again, showing the results of nujor attention RGA acquisition, were $ 1. I billion at the end of 1987.

to woiLing capital management throughout the Com-The increase of SS 19 million fr om 1986 repr esented pri-pany. The m emil o nxlition of customer rec eivables ie-marily an increase in RCA goodwill (net of amoitiration) mained cv ellent at > ear end. Cunent ieceivables other iesuhing from completion of appmisal and evaluation than those owed by(ustomers indude amounts due from studies during 1987, various ty pes of non-sales inmsa( tions, sta h as advanc es

> Other assets of S3.8 billion at Iktember 31,1987 o suppliers in omne(tion with laige contnuis.

were up from S2.6 billion at the(omparable date a year

> Incentories of $6.3 billion at ikx ember 31,1987 were ago. Priinipal items accounting for the incicase w cie a

$ 1.1 billion more than at the end of 1986. The inn case higherdefened tax asset resulting primarily f om re-sinu turing resenes. ami more s ecm crable enginecting cmts on gos einment contracts.

• Totalborra ings at lktember 31,1987 amound W

$5.6 billion, down $563 million from the eml of 1986.

ot$c pYalNve$te$ $ece berR

"' ' " *^'I"

"" *" " " " "" I" M' 0 * ' "*'

down svo3 minion esen ancr ada"ing abom S200 muh.

on 3"1 of CGR debt.

GE's1otaldebt improusito25.14 of totalcapitalat

--2 the end of 1987,a substantial rechation [ tom 28Z a year cadier following the RCA autuisition. The maior s

debt-mting agendes omtinue to evaluate GE's debt as y

beingof the highest standing,"niple A."

-h

~n e

26

StatementofRnancialPosition General Elearic Com[xmy arxl consolidated affiliates At De(ember 31 (In millions) 1987 1986 Assets Cash (note 9)

$ 1,834 S 1,698 Af arketable securities (note 93 858 22i Current receivables (note 10;.

6,782 7,208 inventories (note 11) 6,265 5,161 Current assets 15,739 14,288 Property, plant anxi equipment - net (note 12) 9,255 9,811 Funds heht for business development (note 13) 81 397 Other investments (note 14) 5,621 3,911 1ntangible assets (note 16) 4,430 3,581 Other assets (note 17) 3,794 2,570 Totalassets

$38,920

$31,591 Liabilitles and equity Shon-tenn lxnTowings (note 18)

$ 1,110 S 1,813 Accounts payable (note 19) 2,615 2.5" 1 Piogress collections aixl price adjustments accnini 3,760 2.273 Dividends payable 319 287 Taxes accrunt 1,382 1,153 Other costs anxl expenses aconied (note 20) 3,485 3,311 Current liabilities 12,6"i1 11,161 long-tenn lx>nuwings (note 21) 4,491 4,351 Other liabilities (note 20) 5,088 3.181 Total liabilities 22,250 19,293 51inority interest in equity of conmlidated alliliates 190 189 Conunon stock (926,561,0(H) shar es issued) 584 579 Other capital 878 733 Retained cainings 15,878 11,172 Irss conunon stoc k held in treasurv (860)

(375)

Total share owners' equity (notes 22 aixi 23) 16,480 15,109 Totalliabilities and equity

$38,920 S31.591 CAnmnitments anxi contingent liabilities (note 21)

'lhe notes to finandal statements on juges 37-51 are an integral p,ut of this statement. Shar e data bas e been adjusted for the 2-for I stuL split in April 1987.

The Statement of Changes in Financial Position anxi

> Enable GE to continue a high lesel of pn>granuned related comnwnts on pages 28 aix129 present addi-expenses as well as to supixnt other internal and ex-tional infonnation about changes in ihe balance sheet ternal business growth activities aixi opix>rtunities.

during 1987 as well as comparative data for pr ior y ears.

> A major reporting change teillagect the 1988 In summary, the Company's financial xisition ic-AnnualReport. At next year cixi, a new Statement of 1

mains strong. GE's financial resources aixi liquidity and Financial Auounting St;uxiants (No.91)willinpiire the highest lx>ssible c redit rating supplemented by bank full consolidation of all majority-ownal subsidiaries.

crnlit lines are believed entirely adequate to:

This nwans that the accounts of Geneml Electiic Finan-

> Provide for scamnal won king capital needs during (ial Senices, Inc. will be combined with those of the 1988.

]n esently conmlidated wm panics G E watiols. This

> Pay h>r new plant aixl equipment expcixlitures conmli<htion will not change GE's net cantings or share that ar e exjwcred to be alxmt $1.7 billion during owncis' equity, but it will drastically alter the appear-1988. Estimated future plant expeixlitures already ance of the financial statements,in panicular the bal-approval also aggregatal $ l.7 billion at ihe eixl of an(c sheet, to which more ihan $60 billion of awets and 1987, of w hi(h ap[nuximately 50% is pl,umed to be liabilities willir added, spent in 1988.

27

Managernent's Discussion of Changes in Financial Position t

M The Statement ofChanges in FinancialPosition sum-of ftunis usage. Additions to property, plant anxi equi u l

mar i/es the main sources of GE's fmwis and the uses ment have been GE's in incipal long-ter m use of fuinis m;ule of those fumis. This Statement helps to show the for many years. Aggregate expemlitures for new plant ielationship between operations, which are pr esented in (exchuling acquisition of RO\\'s) were $5.8 billion in j

the Statement of farnings, anxl liquidity aixl financial re-1985-1987.

sources, whi(h are depicted in the Stateinent of Financial Dispositions of nupcity, plant amiequipment in 1987 i

Position.

innhuled the inmsfer of Consumer Ela u onics to Timm-

> Funds procidedfrom operations, after various ad-son, S.A. PLmt anal equipment added hum Thomson justments simwn in the top lunion of the Statement, was m>t significant.

were $3.1 billion in 1987, alxmt the same level as in eac h

> Financialtransactions other than spailic bonow-of the presions two years. These fmuls from openuions ings related to auluisition of RCA in 1986 has e not been are net after leaving almost $1.5 billion during timse a significant GE nent in recent yeais. It is ]xissible that tinec years from not mal net earnings of nonconsolidate I GE might add to or retire long-tei m lxn1uwings in 1988, financial ser. ices affiliates in those businesses to help depending on financial market conditions and /or jossible them finance their own continued growth.

strategic business auluisition opjxntunities. With its ex-

> Working capitalcan be either a provider or user of cellent credit nuing, GE is in a position to take maximum fumis. Intense auention to woi Ling capital assets so as to advantage of any suc h des elopments.

minimi/c unnecess;n y b x k-up of funds while at the s.une

> Dieldendspaid totaled $1.177 billion in 1987. Divi-time ensuring adequate resources for growth of GE's dends paid during 1987 totaled $1.29 per shate. At the businesses is a major focus. Comments on page 26 about s.une time, the Onnpany retained sullicient cai nings to ra civables aml im entorv measui ements ex plain cu r-supixnt enhanced produc tis e capability and lo pios ide rent results of GE's woiLing capital management pne adequate financial iesources for inteinal and external gnuns. Aggressive actions to better utilize working capital growth opjxntunities. The two imicases in disidends de-added $1.2 billion of fumis from wor king capitalin 1987, lar ed - saum! quar ter ami founh quaner of 1987 -

bringing the total of fmwls piuvided from conent-> car mai Led the twelfth comecutis e year of dividend giowth.

opemtions and asset management to $ 1.3 billion for

> In summary, the Gunpany dming 1987 generated the year.

significant amounts of fmxts fnnu ojwrations ami wm k-

> The 1986 RC4 acquisition was the Onnpany's largest ing capital reduced shon ter m lxn towings by S700 mil-eser and the ielated financing in that > car is summarized lion and added abnost S800 million to cash ami equiva-on the Statement. There wer e no transac tions of similar lents. Onnbined with the financial flexibility that unnes si/c in 1987, and it is no longer informative to acc umu-from top credit nuings. GE is insitioned to Iinam e a ma-late numcious relatis ely small cash amounts for inmsac-joracquisition on favorable e onomic terms. continue tions iclared to RO\\, panicularly dislosition auivity. Ad-other long-term investments for gruw th and again in-ditional finaming ami debt payments related to RCA crease disideixls to share ow ners.

were nominalin 1987.

> Another accounting rule change in 1988 w ill repla(c

> Incestment and other lor <g term transauions in ihe the Statement of Changes in Finan(ial Position with a aggiegate weie about at the same level during the past Statement of Cash Flows. This iule (Statement of Finan-thice >cai s. ranging hetw een $ 1.3 billion aiul S t.6 billion cial Accounting Standards No. 95) would not signili-cantly nuxlify GE's existing fin mat. Ilow es er, w hen combined with Ihe prospe tise (hange in (onsolidations (sce page 27), the 1988 presentation will be substantially Net earnings retained for growth and used for dividends (In dollarsper share) dilfet cut as it will indude (ash flow s of General Elec tri(

I..mancial Sen.ues,Inc.

Siso S *9 z 10 e l(etainni for glow tli Dmicinis O 70 0 00

!!M l9Ml l9X*

t9%6 t94 28

Statement of Changes in Rnancial Position Funds provided(used)

General Ekx tric Com[un) azul umv>lidated al6liates for the > cars einlal Daember 31 (in millions) 1987 1986 1985 Fundsprovidedfrorn operalions Net earnings S 2,915

$ 2,492 S 2,277 1.ess ext raonlinary item at ul cumulative ellet t of changes in accounting }ninciples (796) 2,119 2,492 2.277 Adjustmenis foritems not relnesenting(uirent fusal usage:

I)c[n etiatio'i, depletion aial ainonization 1,544 1,160 1,2 19 Earnings iciained by nonconsolidated financial senices alliliates (561)

(506)

(411)

Inconw tax timing dilTerences (160)

(158) 128 All other opemting items 164 77 12 Fmxis prosided from operations 3,106 3,365 3,255 Funds providedfrorn (usedfor) changes in unrking capital 1)ccrease (innease) in inventories (1,104)

(317)

(279) 1)ccrease (increase) in cuirent incivables 426 629 (531) lucicase (dencase) in current liabilities (except shoit-term lxnTowings) 1,913 (100) 62 Net funds provided fnnu (use I for) working capital 1,235 (88)

(748)

Totalfunds providedfroun operations and unrking capital 4,341 3.277 2.507 Funds used at acquisition date (June 1986) to purchase RGt Purchase price (6,1(Hi)

Irss RCA cash aint ma:Letable securities 2tHi New borrowings to acquire RCA 5,106 Net ieduc tion of fmxis at acquisition date (701)

RGtfinancing iransactions during 19<

• l'nx ceds from s. des of assets 1,367 Repaynwnts aixi o'her ieductions in RCA long-term lxarowings (190)

Net addition to luixls during,1986 877 Funds providedfrorn (used in) investment and other long terrn Iransactions Additions to propenty, plant aixl equipment (1,778)

(2.012)

(1,953) 1)is1x>sitions of pioperty, pant aixl equipnwnt 636 275 112 Use of fmwls held lor busmess desclopment 316 329 88 Additional investments in notu onsolidated finamial se vices af filiates (106)

(50)

All ot her t rans.u tions - net (411) 152 153 Net imestment transactions (1.3 13)

(1.336i (1.570)

Funds providedfrom (used in) financial transactions 1)isjunition of GE shaies from treasury 361 283 286 Pun base of GE shares Ihr treasut y (846)

(3 18)

(283)

New issues aixl other increases in long-term lxnTowings 396 21 171

)

Repaynwnts aixl other decreases in long term ixn rowings (256)

(67)

(171)

Net financial trans.u ions (345)

(lII) 3 Funds usedfor dividends paid (l,177)

(l.058)

(l,(H Hi)

Net increase (decrease) infunds S l,476 S U15 S

(G6)

Analysis ofnet changeinfunds liu icase (dericase) in cash aixt mai ketable se(m ities S 773

$ (638) 181 I)ccrease (iru rease)in short-teiin lx niowings (culuding acquisition of RCA) 703 1,583 (250) linicase (demease)in f uixls S 1,476

$ 915 S

(66) ne notes to Iman< ial uaiements on pages 37-31.ne an intext al pan of this uatement. Finam ial infm mation imindes RCA r esnhs Innn,[une I, !!M 29

Management's Discussion of Selected Financial Data mammmme SelectedFinancialData provides lx>th a haixty refcr-

1) avid Saniof f Reseanh Center to SRI Internatiotul.

ence for some data ficquently re(piested alx>ut GE aiul a

> GE's worldwide employment at the end of each ofIhe reconi that may be usefulin icviewing treixis. Ilowever, last five years is slunvn in the graph below. The steady I

in relating 1987 operating data to prior years, care increase in pnxiucthity each > car from 1983 thiough should be taken to review the comments on page 21 per-1987 is ponmyed in the secoixl graph on juge 23. Dur-taining to accounting (hanges aial business restna tur-ing these > cars, constant dollar sales rose h om about ings in 1987. Also,it simuld be remembered that data fi>r

$91,000 per employee to alxmt $119,000 per employee 1986 indude RCA results for the last seven months and

-a 309 increase. Aluch of the cmrent-year reduction in data for 1987 indude RCA fi>r the full year.

employees resuhed from the year-cixt transaction in

> GE's net earnings hat e increased at a faster rate over whk h there were considerably more consumer eleuron-the past five years than have revenues. This reflects, ics emplo ces transferred to Thomum, S.A. than were among otherihings,impro ed pnxluctivity arxl cost transfermi from Thomson into GE's Medical Systems sti uctures as w cll as dispostions of ses cral low-margin business.

businesses. As show n in the first gmph on page 23, GE's

> The backlog ofunfilled orders at the end of 1987 was industry segment openning twofit, which is t he priinipal

$22.7 billion. Onlers constituting this lxa klog may be soune of eainings, has improved in cac h of the past fhe canceled or defen ed by customers (subjc(t in centain yean.

aises to cancellation penahies).

Inflation has not been a significant fauor in the Com-The significance oflxuklogs in mxterstaixling ihe pany's cainings growth in recent years because of the Company's business has been ( hanging. Many of the key relath cly slow rate of piit e increases in the t 'nited States businesses which are now pan iding GE's growth openne c( onom y.

in mai kets suc h as appliances, plastics and servic es a here

> Property, plant and equipment additions weie order-to-shipment c) des are slunt. In businesses w heie 51.8 billion in 1987, making the total for the last fhe long onler-to-shipment cydes are typical, aiicraft engines years (eu luding additions by acquisition of RCA) $ 10 bil-have been growing rapidly in i ecent years w hile ix>wer lion. Of that total,309 was to increase cap,wity; 269 was systems have been dedining and continue to do so. Al-to ino case pnxluunity; 149 was to suppon new busi-though GE remains a leaderin most p>wer systems pnxi-ness stait-u ps: 129 was to replace anxl renew ohler urts, domestic and foreign mai kets have been dedining equipment; aixi 189 was for suc h other pn>jeus as im-in iecent years aixi worldwide competition has intensi-prosing R&l) fa ilities anal safety aiul envinmmental fied. New power sy stems onier mtes ar e quite low by proteuion.

long-term historical standank aixi luuklogs liir vittually

> Total research and decelopment expenditures in all power systems pn> ducts are dedining. Company nun-1987 were $3 billion, of w hi( h S t.2 billion was fr om agement continues vigomus eflinis to improve p>wer Company fuixh. These expenditut es, w hi< h suppnt fu-sy stems' cost-mmpetith eness arxl to adapt pn> ducts anal tut e gr owth, w cre somew hat less than in 1986 (S3.3 bil-marketing to the changing einir onment.

lion totah 51.3 billion of GE fuixh), piiruipally because About 57Fc of the total backlog at December 31,1987 ofintegiating RCNs openuions aix! donating RCNs is schedukt! to be shipped in 1988, with most of the Consolidated employment at year end Share owners'equityper share-(In thousands)

December 31(In dollars) 400

$20 3:0 310 2ir2 r,9

to2 t ti tn 19 0 1958 19 0 l!Ni 1957 19M 1941 19 0 199; 1987 mmn M h 7

7 7

11 20

(

30

l l

5electedRnancialData General Electric Company aix! consolidated afliliates (Ibtlar amounts in inillions; per-sh.u e.unounts in dollard 1987 1986 1985 1981 1983 Revenues S 40,515

$ 36,728

$ 29,2-10

$ 28,920

$ 27,613 Earnings befi>re extnuinlinary loss aixl ctunulative elfect of accounting changes 2,119 2,192 2,277 2.239 2,002 Net earnings 2,915 2,492 2,277 2.239 2,002 IOuwd on average share owners' equity 18.5 9 17.3 %

17.5 %

19.0 %

18.9 %

Earnings per share liefi>re exnuonlinary loss and cumulative effect of accounting changes S

2,33 2.73 S

2.50 S

2.17

" 20 Net camings 3.20 2.73 2.50 2.47 2.20 I)ividends dedared per share 1,325 1.185 1.115 1.025 0.9375 GE stocL price innge 66 %-38 %

4 1 %-33 %

36 %-27 %

29 %-21 %

29 %-22 %

1)ividends dedared S 1,209

$ 1,081

$ 1,020 930 852 Shares outstanding - aveinge (in thous;uxis) 911,639 912,591 910,769

'K)7,360 909,536 Share ow ner anounts -average 491,000 192,000 506,000 520,(XX) 501,000 Short-tenu lx>nuwings S 1,110

$ 1,813

$ 1,297 S 1,017

$ 1,016 long-tenn bonuwings 4,491 4,351 753 753 915 Minority interest in equity of conv>lidated aHiliates 190 189 126 128 167 Sharc owners' equity 16,480 15,109 13.671 12,398 11,137

'li>tal capital invested S 22,271 S 21,162 S 15.817

$ 11,326 S 13.235 Return on average total capital invesaxl 14.7 %

13.9%

16.2%

17.67c 17.1%

Total assets S 38,920

$ 31,591

$ 26,162

$ 21,555

$ 23,017 Property, plant and equipment additions other than additions by auluisition of RCA 1,778 2,012 1,953 2,i19 1,671 Year-cixl or ders lxu klog 22,737 23,913 23,i17 22,577 20,589 See notes I aiul 15 to the finan(ial statenwnts for infonnation about ac counting (hanges and ext raordinary loss. Per-shar e amounts have been adjusted Ior the 'bfor I sud splits in April 1987 aint April 1983. Financialinfoimation in(ludes RCA iesuhs homJune I, 1986 unless stated otherwisc.

remaiixler to be shipped in the two years after that. For ikx ember 31,1987, up fnnn $ 1.2 billion the year befin e.

(omparison,alx>ut 60% ofIhe 1986 backlog was ex-The backh>g of aircnift engine orders fi>r ex1xwt in-perted to be shipjxxl in 1987.

creased by about 80% in 1987 anxl aircraft engines made Unfilled onters fi r exixnt of all types of pnxiucts up more than three-quarters of the 1987 unfilled exixn1 and services from the United States were $6.0 billion at order Imklog.

Net earnings and revenues percentage incraase from 1982 7ny 5ti

-12 2x 0 Net carriings Rn enues y

u 1983 lW4 19 0 19sti 1987 31

l Managemont's Discussion ofindustry Segments

==- --

The Summary ofIndustry Segments groups G E's var.

amorti/ation of RCA purchase cost allocations was in-ious businesses by the principal irulustries in whit h they cr eased lused on completion of appraisal and evaluation lxuticilute. These differ from the groupings presented wo: L This segment in 1987 iixluded the o msnmer cler-cailier in this reixnt, w hich fi>cus on key businesses in tronics business that was sold late in Ikt ember. I ligher terms of strategy considemtions imuh ing resoune allo-consumer electronic s s olume (RCA operations wer e in-cation aixl kmg-tenn goals. For a description of the busi-chuled for 12 numths of 1987, comluied with only ses en nesses in each segment aixl fi>r additional details, see months of 1986) was more than of fset by lower selling note 25 to the finar.cial statements, pric es and gr eater RCA punhase cost allocations.1.ight-

> Totaloperatingproft has grown at an average an-ing openning margins improved sonww hat in 1987, r e-nual rate of 7.25i over ihe last five years. This growth is Ilecting benefits ofimpios ed cost stnatuies. I.icensing afler absm bing tmusual expenses each year, lxuticulady income, mostly from consumer-electronics-related pat-signifiamt business restru(turing provisions in 19S7.

ents, inse omsidembly in 1987 due to iinlusion of 12 Operating profit fi>r the year 1987 was not af fccted by months of RCA in the cuitent year comjured with seven the im entory aixi income tax amamting changes.

months last > car.

Unusual items entering into the detennination of op-

> Financial eervices operating profit is s h1ually all ac-erating profit are show n by industry segment Ihr ca( h of counted fi>r by Genend Electric Financial Services, Ine.'s the last lise > cars in the table at the top of page 31.

(GEFS) earnings befin e cumulative elic< t of the income

> Aerospace resenues were up 229 in 1987 from 1986, tax accounting ( hange arxl ext raor dinary loss. Such eai n-relle(ting a full year of RCA opemtions plus overall s ol.

ings were 1057 more in 1987 than in 1986. Within GEFS.

ume increases. Flat year-to-> car opemting profit s ellected ihe 1987 cainings of GE Capital Corpomtion (Ibrmeily business restmcturing costs aix! increased amortization GE Cicdit Corporation)incicased 2157 from 1986 main-costs h om completion of RCA puu hase cost allocations.

ly from a higher les el of "earning assets?' an increase

> Aircraft engines iesenues in 1987 were 135i more in gains from sales of warrants obtained in (onnection than in 1986. and opemting profit increased by S57. The with catain hxms, and somew hat lower intciest mies piinc ipal reason for the continued improvement in ic-for borrow ed fmuls. Partially of fsetting these impiove-sults was again a higher volume of shipments, which have ments were somew hat lower financing yields. Employers risen steadily fbr sesen > eats. lligheropemting profit has Reinsunun e Cor]xniuion's earnings also were up 219 in also been at hics ed consistently despite substantial ex-1937 on higher solume, go<xt investment 1x ntlblio per-penditures for rescan h and des elopment, investment in fbrmance and gix xl mulens riting experiem e. Kidder, plant impmvements and cap uity expansion necessary to Pealxxty's loss, compared with a profit the presious year, upgnule pn xhn tion elliciency aixt provide the advanced relleacd the impact of business restnu turings aixl in-technology mjuired by all airemft engine c ustomers.

sider Inuling charges.

New oulen of $8.2 billion receised during 1987 were up

> Industrial evenues fbr 1987 were even with 1986 but 299 liom 1986 anxi were a new high Ior GE's aircnilt a small operating loss ($26 million) was incu n ed. The engine business.

opemting loss was the resuh of widespread iestna turing

> Consumer pnxiucts icvenues increased 89 in 198<

prousions to cover business exits, such as Cadx doy, m-from the prior year but operating profit dedined 2S9 as tionalizing sesend pnxluttion opemtic.s,and reorgani/-

significant restnaiming plans were implemented aixi ing and integrating mai keting and distr ibution actis ities.

> Major appliances revenucs increased 857 6 om 1986 and operating profit was up 69 despite unne restructur-j ing costs associated with pnxim tion nitiotuli/ation plans.

Five-year average annualgrowth rates - operating profit Thet e weie strung volume increases in core appliance (Excluding NBC Industrialand "allother")

lines, such as icfrigerators, with sdes through retail M (hannels up aixi contr;n tor sdes about flat. Pnxluctisily again improved. Inwer pii(es and cost inflation panially 25 "

e.sergiut e olfset these favorable factors.

o stapr appiaines E.Mrt idkl CnginCs jg

)

bruru e st wn u cs i

e starco,

0 Consumer pnulut a ~~ '~

~ -

uo e lethnkal pnulutts

~

arul wn n es a hmer miems

- 12 3 l

-25 u 32

Summary ofIndustrySegments General FAttric Comjuny and consolidated affiliates For the years eixled Dec ember 31 (In millions) 1987 1986 1985 1981 1983 Revenues Aerospace

$ 5,262

$ 4,318

$ 3,085

$ 2,622 S 2,081 Aircmft engines 6,773 5,977 4,71" 1,835 3,495 Consumer pnxlucts 5,042 4,654 3,220 3,166 3,122 Financial senices 632 585 499 4 18 397 Industrial 4,707 4,711 4,762 4,495 4,509 Sfajor appliances 4,721 4,352 3,617 3,650 3,078 Staterials 2,751 2.331 2,119 2,280 1,885 National llroadcasting Company 3,165 1,817 Power systems 4,995 5,262 5,821 6,289 5,981 Te(Imical pnx!ucts aixi senices 3,670 3,021 2,317 2,402 2,151 All other 85 774 431 1,419 Cor]x> rate items arxl climinations (1,288)

(1,074)

(915)

(1,(H)l)

(781)

Totai rerenues

$40,515 S36,728 S29,240

$28,920

$27,613 Operatingproft Aerospace 603 608 437 332 S

201 Aituaft engines 940 869 673 460 395 Consumer pnxlucts 416 577 425 553 309 Financial services 558 488 420 355 290 bxlustrial (26) 18')

052 79

!F1 Alajor appliances 490 462 399 381 383 Staterials 507 424 330 4 16 314 National llniadaisting Company 455 203 Power sy stems 199 354 740 519 695 Technical pi xlucts arxl senices 275 112 22 (8) 166 All other 23 31 370 632 452 Total indu stry segment operating propt 4,440 1,310 4,068 3,779 3,299 Interest aml other financial c harges (645)

(625)

(361)

(335)

(370)

Cor}x> rate ite us not traceable to segments, aix!

inersegmei t eliminations (588) 7 (287)

(175) 30 Earnings igfore t rucome taxes, extraordinary item and cuo.::.latire effect ofchanges in accountingprinciples

$ 3,20,7

$ 3,692 S 3A20

$ 3,269 S 2,959

'lhe noto to hnamial statements on [uges 37-51 are an integml urt of this statement. Finaixi.d infoimation iraludes RCA results l

fromJune 1,19E

> Materials nevenues atxl operating profit were 189 principally in network operations that had sinmg gains and 20% higher, respectively,in 1987 than in 1986.

in sixnts aral prime-time entertainment. TV stations Robust volume in all plastics pnxluct lines was the princi.

earnings also im proved, mainly ixxause of lower oper-pal contributor to the improved operating profit. Plastics ating costs.

continued to exixux!in markets such as automotive com-

> Powersystems revenues de lined 59 in 1987-the

[mnents aml forxl pac kaging.

t hini consecutive year oflower revenues - arxl opemt-

> NationalBroadcasting Company 1987 revenues ing profit dropgxxl 419, The signifiamt decline in oper-ami operating profit ($3.2 billion aml $ 155 million, ating profit was more than accounted for by Ihe cost of a respectively) w cre substantially ahead of 1986 when NilC was included with GE only for the last ses en months. On a full-year-comparison basis NilC's oper-ating profit was well ahead of 1986 on somew hat higher revenues. This s etkrted solid margin improvements, 33

1

\\

i l

Un usual items included in operatingprofit (In tnillkins) 1987 1986 1985 1981 1983 Aerospace (31)

S (1)

(1)

Aircraft engines (72) 1 (3)

(50)

(8)

Consumer pnxlucts (166)

(35) 10 91 (11)

Financial senices (a)

(16) hxlustrial (282)

(72)

(80)

(117)

(89)

Slajor appliantes (54)

(20)

(68)

(81)

Staterials (14)

(15)

(28)

(5)

National llroadcasting Company Power sy stems (2fyl)

(175) 08)

(26I)

(5)

Technical pnxtucts aix! services (95) 2 (53)

(129)

(5)

All other 15 370 500 Coilx> rate items (49) 21 (131)

(10) 109 Total unusualitems S (1,027)

$ (261)

(22)

$ (1-15)

(30)

(a) I n addition. GE Finam ial Senk es' carnings, w hk h are part of GEi operating profit,imlude $91 milhon (befor e taxes) of unusual expenses. Iloweur. GE Financial Sen k es' extraordinary has ($62 million after taxes) is not inc luded in (onsolklated operating Innin.

See note 15 to the financial statenwnts.

niunber of restructuiing prognuns throughout this seg-both expenses, such as the Corp < mite R&l) Center ami ment, including costs associated with restructuring the corporate staf fs, aixi income from corpomte ticasury nudcar business to focus resouires on iefueling aixi serv-activities. In 1987, there was mm h lower inc ome from ing its installed lx>iling-water reac tors.

corpomte-level investments and virtually no counterpart

> Technicalproducts 1987 iesenues increased 219 aixt to gains fn>m sale of Tmhiba sax k in 1986.

operating profit more than doubled from 1986. The in-

> GE's exports to externalcustomers totaled S 1.0 bil-crease in opemting profit was led by Mediail Sy stems, lion in 1987, up fiom 1986's $3.7 billion. The gmph whi< h had gomi s olume growth particularly in computed shows the major < ontributors to GE's expoit growth for tomogmphy, scivite and magnetic resonance lines. Com.

the past five years, deaily depitting the substantial in.

munications and Senices also had higher results,[xutly crease in aittraft engines m er the peiimi with a mm h from inclusion of a full year of RCA opemtions but also lower contribution fium ixiwer >> stems pn xhirts. Ex]w ut from impros ed pnxluctisity. Cahna Company's opemt-sales by major world areas Ibr the past tiu ce 3can m e ing Ims was again i edured considerably.

show n below.

> Corporate items, which are induded in Company 1

cainings but w hidi are not (nucable to indusin segl

" /*'d' '

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

i On nulhons) 1987 1986

198, inents, aggregated a loss of $588 m.lh.on m 1987 com-ixu ed with a small gaia in 1986. This caption indudes f"';"Ilin 1 6

-i Mkhile Fat and Afoca

,62 19n 3:1:1 Anrikas 625 176 au2 Other areas 238 121 1:1I US exports to externalcustomers Total

$1,024

$3.709

$3.319 (In bHlions) in addition, exixnts hom GE openuions in the United 8"

States to GE af filiates of fshore were SSol million in 1987,

$639 million in 1986 aml $671 million in 1985. Imixnts M3g from GE's olkhore af bliates were S I,095 million, S56'l 27 inillion aml $538 million in cac h of the last thice >cais.

i espe (tively.

_Il GE's total intei national openniom (all exj x nts plus for-cign affiliates) had resenues of 59.2 billion and openuing inauuri.a

"-2 I>rofit of $1.7 billion in 1987 comI>aied with ictenues of a cour ""c""

e. siro.ai engun S8.3 bilh.on aiul operating piof t ol $1.3 billion in 1986.

gg 19 0 19st 19x3 1986 1987 31

htnagement's Discussion of FinancialResponsibility Thefnancialinformation in this report,inchul-business practices. Management insists on maintain-ing ihe amlited Iinancial statements, has tren pre-ing the highest staixlants ofcorxhn t anxi pnutices pared by GE management. Preparation of finainial with respect to tnmsactions with the United States statements aixt ielated data involves estimates arul govennnent. There is continuing emphasis to all ihe use ofjudgment. Accounting principles uwd in employees that even the appeanmcc ofimpropriety prep,uing the financial statenwnts are those whic h am enxic public confidevue in the C4nnpany anxl in aie generally accepted in the United States. These the govenmwnt pn>curement process. Ongoing ed-priiniples are consistent in most imlxntant respec ts ucation, conununication anxi review pr ogniins aie with statulauls issual by the International Anount-designed to create a strong compliance ein iron-ing Standants Committee. In a few imlxntant in-ment aixt to make it clearly uixlersaxx1 that des ia-stant es, whic h are conunental on in note 1 on page tion from Company policies will not be toleratal.

37, where there is no single specified au ounting Peat Mantick Main & Co. provide an objective, principle ur standaul. management makes a choice itxlependent resiew of managementidisc harge of h om reasonable, anepini alternaiises, using meth-its obligations relating to the f ainwss of reixntal als which it belicses are pnident fiar GE.

operating resuhs anxi financial coixlition. Their re-

'li> safeguard Company assets, it is imimrtant to Imn fi>r 1987 apirars on the next page.

have a souixt but dy namic sy stem ofintenial finan-The Audit Committee of the linuti(omsisting (ial controls and pn x nluies that balances benefits solely of Dinstors from outside GE) maintains an anxi costs. Orr of the key elements of GE's intental ongoing appraisal-on behalf of share owners-financial contn>ls has Iren the (inupany's sua ess of the elfatiseness of the indepeixlent public ac-in rn niiting, scln ting, tmining and deseloping countants, the Company's stalf of corporate audi-prof essional financial managers. Their resjxnnihili-ton aixi GE management, with iespect to prepara-ties iiu lude im plementing aixl os ci seeing the finan-tion of financial statements, anxi of the adnjuacy of cial cont 101 9 stem, relxating on management's inte nal financial controls. The conunittee also r e-stewardship of the assets entnnted to it by share views the Cmnpany's au ou nting lmlic ies, intenial owners, and perfor ming au utate anxi proper main-auounting controls, aixt the Annual Reixut and tenain e of the au ounts.

proxy material.

Management has long icoignized its responsibil-ity h>r auxhu ting the af fairs of the Onnpany and its af filiates in an ethical aixi sm ially r esponsible inanner. GE is dalicatal to the highest staixlauls of integiity. Integrity is not an omnional iequitement but a o>ntinuing onnmit ment w hit h is iclla ted in Jolm E Wekh,Jr.

Lev w ritten Imlicy statements. These un er, among Chainnan of ihe lloant anxi

)

otiier subjn ts. lxnentially conflit ting outside busi-Chief Executive Olli(er ness interests of employees, compliance with anti-innt laws, aixl pt oper donwstic aixi international t

mmmer ---

Dennis D. Dammeiman Senior Vice President Finance February 12,1988 35 i

Report ofIndependent Certified Public Accountants To Sharc Owners and Board ofDirectors of ates at ikx ember 31,1987 anxl 19Sti, aiul ihe ic-GeneralElectric Company suhs of their operations aint the (hanges in iheir We has e examiixxl ihe statement of financial [xisi-finarxial x>sition for cath of the years in the 1

tion of Geneml Elet tiie (k unpany arx! consoli-tbree-) ear peri <x1 cixled Ikx emher 31,1987, in dated af filiates as of Iktember 31,1987 aixi 1986, c onliinnit y wit h generally an epted au ounting aixt the related statements of cai nings aixi in inc iples consistently applied during the peri <xt changes in financial position li>r eat h of the year s except for the changes, with w hic h w e concur, in in the three-year per iixi ended Dec ember 31, the methods of accounting fi>r inc ome taxes and 1987. Ou r examinations w ere made in ac corda nc e os ci head arorded in iin entory as desa ibed in with generally ac cepted auditing staixlaids and, note I to the financial statements.

anordingly,ituluded suc h tests of the a(counting records anxi sut h other auditing pnmlures as we ggg gQ4 (onsidemi necessor m the arcumstances.

In our opinion, tlie afi>rementioned financial Peat Marwic L Main & Co.

statements appearing on pages 23,27,29 aixi Stamiind Connecticut 37-51 present lainly the financial lx >sition of General Elec tric (k unjuny aixl conv>lidated af fili-February 12,1988 36

1 l

t Of8Sf0f/DfDClalStaf8MSDfS GE and mnsohdatal aHihates and $518 miHi<m for G E Financial Senices, Inc.) of the change is shown sepa-rately in the 1987 column of the Statement of Earnings on lxige 25. Also, as requiral, quaiterly cainings re-

[xnted fi>r 1987 have been restated fi>r the ef fec t of this Summary of signi6 cant accounting policies (hange on interim quaiten in 1987 as ifit had <xcurrni atJanuary 1. Restated quarterly amounts can be fouixl Consolidation.The financial statements iepresent the in note 27.

adding together of(}cneral Ekrtric Company aint all Irwestment tax credit (ITC). 'lhe ITC was repealed, companies, except f manaal sen ices com[xuues, which with some transitional exceptions, cireaive January 1, GE contiols through a majority interest or otherwise 1986. Ilowes er, for financial rejxating puiposes, GE has (affiliatal companies). The cf fcct of traimations anumM deferred recognition of the ITG ca(h scar aixi continues related companies is eliminatal.

to anmrtire ITC as a reduction of the lnovision for in-The principal financial sen ices af filiate is General come taxes over the lises of the fixilities to which the Elect ric Financial Sen-ices, I nc. (G EFS), a wholly mvned credit applies.

com[xmy Ihat in turn owns all ofihe stoc L of General Penss.ons and other rets.rement benefits. Anunuting Electnc L.a[ntal(.an poration (GECC: fi>rmerly General Elect nc (,a edit (,or]x > ration) anxl E.mployers Reinsunmce

[x >h..aes fi>r pensions aixl other retirement benefits are Corlx>rati<m aix] 80% of the st xk of Kidder, Pealxxlv Ginu p Inc. These finainial sen ices comixmies are so dif-Incentories. 'Ihe values of nmst inventories are deter-ferent fr om the other GE companies that, in the opinion mined on a last-in first-out, or 1.lFO, hasis aiul do int of GE managenwnt, GE's financial statements are more exceed realizable values. ElfcctheJanuary 1,1987, GE umlerstaixtable if financial wisices alliliates'statenwnts c hanged its accounting pnxedures to iin lude in inven-are shown eparatelv. Iloweser, twc;mse of a new ac-tory ceitain manufacturing merhead costs previomly ting nde, GE w'illIr required to omsolidate all charged diiutly to exjwnse. Among ihe more significant or majority-ownni alliliates at year-emi 19Sd. See page 27 ty pes of manufactming meihead now includniin imen-ofIhis icixnt lor additional details. Sepanae comlensed iory are: depreciation of plant ami equipment: pension statemems of GEFS are shown in note 15 ami the non-and other benefits of manufacturing employees; and c er-consolidated finaixial senices af filiates are iix luded on tain pnxiuct related engitwering exiwnses. The Gom-the equity basis as "one line"in other im estments in the pany belies es this change is preferable twcause it pro-Statement of hnanaal Position and in the Statement of vides a better matching of pnxlut tion msts with relatal Earnings.

les enues in re]xnting openning results. In accordaix e Cmnpanics in w hu h GE ou ns between 20% aml nog with genendly aucptal accounting prinxiples, the cumu.

(assa iated unu panies) are aho im ludal on a "one line" latise ef fect of this change for peri <xis prior toJanuary 1, basis.

1987 ($281 million after providing for taxes of $215 mil-Sales. A sale is in onled when title passes to customers hon)iubown separately in the 1987 column in the State-or w ben sen it es aie perfonned in a(conLux e with inent of Earnings on page 25.There was sistually iny cifect from th,s( hange on 1987 results aber remnhng i

ununna the annulatise clin t, and the pro finma elint on piior Income taxes.Sta;ement of Finaixial Auonnting Stan-years iesult was inunaterial.

dards (SFAS) No. !Ni "Auuunting for Inmme Taxes" was issuni by the Financial Acmunting Stamlaids lloard DepreciaHon, depledon and amortimtion. The mst "I '"" '""""I'"'"""M P "" '"*I "luipment is depre-l in De(ember 1987. A injuirement of SFAS !Niis ihat

'I"'"I "'I"M "" "" 'ICF"l"I *C'I" *I h"'"I

' I*"'II "" "

sum of dw->can Wgig fonnulx H inanoh.P defen ed tax liabilities or assets at the end of eat h period F

ntming pLmt willlw deter mined using the tax rate exjwctal to lw in clin t w hen taxes are actually paid or iconcral. Auuid-

".nd njuijnnent is subje t to abnonnal emnomic anuh-nons or obsobenu, ada,n,onaW n cuanon n i

ingly, umler ihe new ndes, inmme tax expeme pnni-sions will increase or decrease in the s.une per imi in pnividal.

w hit h a change in tax nues is ena( ted. Piesiom rules required providing defen ed taxes using rates in elin t w hen the tax asset or liability was first in onted, without subsoluent adjustnwnt solely for tax-rate ( hanges.

In omfor mity with SFAS 96 nunition ndes,GE has cleant to adopt the new im ome tax au ounting in 1987.

'lhe cumulathe elint oJanuair 1,1987 ($59 million for 37

Subsequent to the acquisition of RCA, GE h is soki or l

2 #CA acquisition andrelatedmatters othenvise divested a numler of RCA arxl NilC opera-tions wlmse activities were imt compatible with GE's long-nmge strategic plans aixl which were m>t material to GE's OnJune 9,1986, GE acquired RCA Corpomtion aiul its operating results or financial position. These inchuled subsidiaries (RCA)in a transaction for which the total activities im olving audio tapes anxi reconis, carpets aixl consideration to fonner RCA sharelmlders was $6.106 an insunuue subsidiary sold in 198(i. Dis [msitions in million in cash. RCA businesses inchaled the manufac-1987 inchuled a "new pnxlucts" division, the David tun e aini sale of a wide nmge of electronic pnxhirts anxi Sanu>ff Resean h Center aixi N llc's radio i etwoi ks.

ielated iescarc h aial services fi>r consumer, commercial, On December 31,1987, GE arxl a Frerx h electiunics military anxl space applications: the National llroadcast-company, l homs<m, S.A., completal a inmsaction in ing Company's (NilC) nulio anxl television stations anxl which GE acquired Thomson's medical equipment busi-networ h bmadcasting sen ices; aix! domestic aixi interna-ness (CGR) anxi Thomson acquired nmst of GE's con-tional message arxl data communinnions sen ices.

sunwr electninics business. CG R's sales of about $800 The acquisition was accountal li>r as a pun base, anxi million armually come mainly fium digital x-ray, mam-the operating results of RCA have been consolidated mogmphy,(umputed tomogmphy, ultrasouixi aixl ie-with those of GE sinceJune 1,1986. The pun base price lated sales arul se:Tice in Europe anxi latin Ameiica. GE's

($6,126 million, including $20 million of r elated costs) consumer electronics business included mainly GE aixi has leen allocatal to the assets aral liabilities of RCA RCA bnuxl television sets, VCRs atxl audio pn xlucts with lusal on appraisal anxl ev;duation studies completed sales of about $3 billion annually. GE will continue for dunng 1987.The cuess of purchase price over the esti-some time to ra cite royalty income from patents related mate of fair values of net assets acquit ed (gom hvill) was to consumer electronics pnxlucts. Other dosings, princi-S3.7 billion, whic h is twing amortiini on a straight-line pally related to offshore consumer clet tionics operations, basis m er 10 >cais, will occur in 1988. CG R's assets ami liabilities ar e in-Unaudital pn> fonna consolidated results ofopem.

(ludalin GE's Daember 31,1987 Statement of Finan-tions for the yea 31986 anxl 1985, assuming RCA had (ial Position basal on preliminary, estimated data whic h been a(quired at the beginning of ea< h period, aie aie subject to more complete review ami evaluation in show n below.

1988. C<msunwr ela tronics' assets and liabilities have Proforma consolidated operations been iemoval from GE's 1987 year-cixi b. dances. The Obilar amountun nullunm per4haic net asset value ofIhe of fshot e oI>crations to be sold to amounts in dollaro 19Ni 1983

.Munnson m. 19M was cu rial. "other im estments,, at in I

}#ar end sak s

$3x.!M $37.238 ANu.n 1987 GF,. rea(hed a definitive agr ement to sell Net camings 2.171 2.113 e

Nci carnings per share 2.71 2.36 RCA Global Cinnmunications. Inc. (RCA Glolxum) to MCI C<nnmunications Corporation for $160 million These pro fonna operating tesuhs were preparnlin in cash. Closing of the inms.u tion, whic h is depcixlent 1986 based on estimates and assumptiom imluding pur-( hase pr x e allocanon. F mal pu n base puce allocation on appmv;d by renain U.S. govenunent agem ies, is exixstalin the liist halfof 1988.

wouhl not have < hanged the pio for ma iesuhs signili-cantly. Sta h piu fonna resuhs are not naessarily iixlica-tis c ol the(onsolidatal r esuhs w hic h wouhl bas e been rclmned if(he RCA auluisieinn had attualIy acun cd at Supplemental cost detals (excluding unusualitems) t he beginning of eat h iespa tis e perimi pi esental or w hi(h may be icixnted in the funne.

S.upplemental unt details are shown m. the table below.

In actoidance wit h agt ecmems with agern les ofIhe Supplementalcost details Unital States gover nment, G E was i njult ed to sell its On millione 1987 19si 1983 military sidicon busincu (w hi(h sale was c ompletal in Empimee onnpenwinn. in< lmiing 1986). Ilowever, a U.S. Fnleral Umnmunicatiom Com-N= Q sn utii> tasn aint other iniwion oider injuiting divestiture of fis e nulio stations Irixhis

$12,139 $11,773 $1n.16s owixxl by N11C by Daember 1987 is tempomrily stasnl.

Ik '"i!'i"" dcP en"" d'"I P

l amouvauon 1,541 1,16n 1,2 19 O nnjunpf'usuksi incan h aiul dn elopnen:

1,191 1,3nn lui9 Nfaintenan< c arui repain 880 8n3 692 Nuial Seturii> tasn 727 723 626

.bh enising 495 181 367 l'asn.cuept N dd Nturity arul ihmc on im one 289 288 2 47 3M

during the ycar is the lxntion ofIhe projected beirfit obligation that is attributed to employee senice during Pensions andotherretiree bene #ts the year. This cost metixxi remgnizes he effect of future EI'lllMul'E compensation arxl service in projecting the future bene-GE anxl its alTiliates sponsor a number of pension anxl lits, anxi it had been usal fi>r the GE Plan arx1 RCA Plan other retiree benefit plans. This note summariics imlx>r.

befin e adoption of SFAS 87.

tant financial aslwcts of GE's obligations for ihese plans.

In addition, SFAS 87 establishes a "tnuisition gain."

Measurements of obligations arul costs are based on acto.

This is the excess atJanuaiy 1,1986 of the con ent liiir arial calculations imulving various assum ptions as to fu-mai Let value of plan assets m er the plan's projected len-ture events.

efit obligation. This inmsition gain is being amoitized

> Theprincipalpension plans are the General Electric over 15 years, except that such ex(ess fi>r the RCA Plan Pension Plan (GE Plan), the RCA Retirement Plan (RCA has been remgnized as an asset in auuunting for the Plan) arxl the Genem! Electric SupplementaiT Pension RCA "C4"I'Ili""-

Plan (GE Supplementa:T Plan). Disclosures in this note Gains aixi losses that occur beause actual expericin e inchule the RCA Plan from June 1,1986. Other pemion-differs from that assumed are amortiini over the average plans are six msored by doniestic anxi li> reign alliliates, future 4eisite period of employees. Prior-scivice cost fi>r but these are not consideral to be significant irxlividually changes in pension benefits w hi(h are allocabic to pie-vious service of employees ate amortiicd in the semw or in the aggregate to GE's financial lx>sition.

manner The GE Plan cmer s substantially all emphip es in the Actuarial assumptions for the principal pension plans Lnited States except RCA emplowes. Ge wmily,Iwneh.ts inchale 8.59 for both the assunwd dismtmt rate used to are basal on il e greater of a fonnula remgmn,ng career detennine the present value of futur e benefits arxl the cainings or a fi>rmula recognizing length of senice aixl hnal average carnings. GE Plan benefits are fmxlnl expeciallong-tenn rate of return on plan assets in 1987 tinough the General Elatnc Pensam Fnist (GE fnist).

mW 1986 @WE Plan used 8.09 in 1985 excluding the

,l At the cixi of l98 e, approxnnately 203,300 emplo effixt of a dedicated lxntfi>lio). 'lhe assumed late of av-es wer e cm cred by the GE Plan, approximately 72,100 fiir-erage future increases in pension benefit mmpensation wm 6.~6 in 1987 md 19Wh GE PM md 79 in nwr employees with vested n,ghts weie entitial to future g g3.g' benefits aixl approximatelv 126.800 ietirees or Iwnefici-

~

aries were in citing benefits.

Employer costs fbr the principal pension plans were

$25 million in 1987, $ 113 million in 1986, aixl $ 179 n.il-The RCA Plan covers substantially all RCA employees.

m h.on m 1985. GE I,lan costs for 198.,. were lower than for t he L,nited States. G,enerally, benefits are based on the 198b. mamly.because of mntinuing re ognition of famr-gicater of a fonnula remgnizing career earnings or a able im estment perfbnnanc e. L.osts Ihr 1986 w cie lower f.ormula remgnizin scrw e aixl h.nal ascrage earnings. RCA i,lan'g length of.

than for 1985 because of. he 1986. doption ofSFAS 8 t

a e

Iwncfits are luixled through the RCA lietinment Plan MasterTrust (RCA Tnist). At the inxldwc ango.m awun (Hsmunt and kiwn min.

eixi of 1987, apprownately 31,500 empimees weie mv-lwnsation increase mies. 'lhe impa(t on 1986, mst of.

cied bv the RCA Plan, approximately 37,800 lbrnwr em-a opt A

e inxi dw mtn hanyn wy ntual to

~

ployces with s estal rights were entitietl to futut e benefits

$81 nulhon (9 (ents iwr share) aix! $79 nulh,on (8.a.(ents and approximately 15,100 ictiiecs or beneficiaries were per share), iespe(tivdy, after rn ogni/ing inconw tax cl.

l t ec eiving benefits.

fats and goyninwnt (ou nenni3niynwnt.

{

Details of 198,, mst fbr the pu,napal pemion plans aic The GE Supplementary Plan is an unfurxint plan pn>-

shown in the next table, siding suppleinentary ictiteinent twnefits primarily to higher-level, longer-sen ic e G E managenwnt aix! profes-NW#dadp<ilperukw pl<nu sional employees ill the Unital States. At the crxl of d " ""

""'I I987 IUNI 198 e, apploximately 3.100 einploy ces wer e eligible Ihr ikneht ont for sen' e dming the 3 ear

$ 385 $ 319 a

this plan alul appioximately 3.800 ietit ces or benefici-Ininest u ni on ) nob tnHmeht oMgafan 1,187 1.n71 aties w ere ret eising benefits.

""""*""E"""

d '2 O'

Net amonization (2M)

(213)

GE adopted Statement ofFinancial Accounting Net pen %n ont s

25 $ lg3 St:ndards No. 87 (SFAS 87) tbr pemion au nu nting ef-Detaih of icturn on plan awet :

l.ectnejanuary 1,1986.SFAS 8e requnes usc of the pt"-

Aouai retorn on plan awen

$ 1,237 $ 2,739 jettal unit cinlit mst inctluxl 10 deter mine the pnb hogniini tetum on plan aucts (1,293) d.nfi7) jet ted benefit obligation aixl plati mst. The projc(ted Amouni deferrol to f uime peria h

$ iss) $ !.si72 henefit obligation is Ihe a(tuat ial pr esent vahw of the pntion of pnjatal future benefits that is attributed to Remgniini ietm n on plan assets is deternard by applv-employee wnic e to date. The Irnefit cost for sen it e ingihe exinted long-tenn rate ofieturn m the ma Leti iciatal value of awets.

39

Thefundingpolicy for the GE Plan aixi RCA Plan is to net experience gains resulted principally from finomble contribute amounts sullicient to meet minimum fuixling imutment perfi>nnance. Unrecognized prior-senice requirements set Ibnh in U.S. employee benefit aint tax cost inchules the elfect of aJanuary 1, l!)S8 benefit in-laws plus suc h additional amounts as GE may determine crease to GE pensioners who retiral beli>reJ uly 1,1985.

to be appropriate from time to time. Covered employees GE Trust and RCA Trust assets, w hich are not consoli-also make contributions toward fuixling of the plans.

dated with General Electric Company assets, consist A measure of the fuixling status for an ongoing plan mainly of common stoc k aixi fixed income imestments.

compares the market-related value of assets with the GE ununmn stock held by these Tnists totaled $ 137 mil-projected benefit obligation.The ma Let-related value of lion at the eixi of 1987. A summary of( hanges in net assets is based on amonized cost plus recognition os er assets of the GE Tnist li>llows.

fise years of mai ket appreciation aiul depreciation in the portfolio. GE belies es the mar Let-related value of assets is GE Trust - change in net assets at currentfair market calee inore realistic than cuirent fair inai ket value because the on niilhons) 1987 lim 6 1985 market-related value reduces the impact of shon-term Net assets atJanuary I

$16,671 $11.362 $11,350 market fluctuatioin. A summary for the GE Plan fbilows.

Ernployer contributions 102 91 131 Einployec contributions 102 91 107 CE Plan -funding status Imestnwnt i xonc inclucling ikxember 31 G n millions) 1987 1986 1983 market apprcxiation 1,053 2,700 2,1Ni8 enef ts paici 1655) 1579)

(197)

.\\latLet relatal valueof assets

$15,180 $13.311 $1nS21 Projn te i heirfit obligation 12,966 11,tHi3 11.59g Net assets at ikxember 31

$17,273 $16.67i $11.362 thr the RCA Plan, the projected benefit obligation

'lhe current f air maiket value of RGA Tnist net assets was $2,218 million anxl the mar ket-related value of assets was $2,815 million at December 31,1987 ($2,876 million was $2A83 million at the cixl of 1987 (S2,586 million atxl at December 31,1986).

$2,330 million, res[xx tively, at ihe eixi of 1986). The de-a case in the projected beneht obligation was principally

> Principal retiree health care and life insurance:

the iesult of business dispositions.

M. nd its aHiliates have a immber of. lans prosidm.g p

retiree heahh c.u c anxi life, surance benefits. GE's ag-A schedule accmxiling the projeoed benefit obligation m

Ior principal pension plans with GE's recorded pension gregate cost for the priiuipal GE;uxl RGA plans was liability is shown below.

52M million in 1987, $81 million,m 1986 aixt S71 mil-tion in 1985. The cost for 1987 is significantly higher Reconciliation ofprojected benefit obligation with because the 1986 cost includetlIhe favorable non ecui-pension liabilityforprincipalpension plans ring imput of raising tlic assume <l dis (ount rate usal to Iki cmher 31 (In millions) 1987 19xti (letennine the piesent value of future life arxl health Projet talirneht obhgation

$ 15,494 $11.816 benefits, aml the 1985 cost ituluded Ihe favonible non-lyunent fair m.n Let salue of Timt auen (20,088) (19.517) uni i

W gct of agig dw momlity mugiom L mnognital SI AS M7 tramition gain 2,000

.!,151 RCA Plan salnation a<!jmtment for fuiure tax tised to deter imne life isnunmce iesen es.

cifetis aiul gmeinment ont reimbut wnent 249 162 Generally, GE aixi RGA employees who t etire or ter-Oiher um n ogniini nei cyriicm e gaim 2,416 2.538 minate af ter qualify ing (br optional eat ly Ictit ement un-l'ntn ogniini piini-seni< c u nt (265) der the GE Plan or RCA Plan aie eligible to puticipite in Rnoolnl pr epsi pemion awets 573 218 the co Tesp nxling ictitee health case aixl life insunux e

{

Rnonin) penam habilin

$ 379 $ 371 plans. Ileahh cas e benefits for cligible ictis ces muler age 65 ami eligible depcixlents are induded in msts as mv-The pntion of the pntjeued benefit obligation repie-cred expenses are at tually inc u nul. Ihr eligible a ctirees senting the aconnulatal benefit obligation was $13,176 ami spouses over age 65, heahh care beix lits ai e Imxled million arxl $12,25S million at the emi of 1987 aixt 1986-or a(cnial amt induded in costs in the scar the a ctiree respa tively, and the s ested benefit obligation was

$ 12,835 mi'. lion aml $ 11,938 million at the eixi of 1987 lxx omes eligible for benefits.The pr esent vahie oflif e insunmce bencha for cligible i ctirees is fundeti ami in-aml 1986, respectis ely. These amou nt s are basal only on dudal in unsts in the sear of retir ement.

compensation aixi sen ice to date. Other unta ognized

.\\ lost retirees outside the Unital States are covered by government pungnum atxl GE's mst for sin h ictiice health care amilife imunune is not significmt.

10

i mai keting actis ities arxl reducing foicign anxl domestic risk ex[x>su res. These provisions include costs of ration.

Otherincome alizing aix! improving a large number of pn>duc tion fa-cilities, rearranging pnxtuction actisities anunig a num-(In millions) 1987 1986 1985 ber of existing plants, arul reorganizing, phasing out or Royalty and tec hnical agreements

$283 $ 232

$ 78 otherwise concluding other activities no longer consid-Marketable securities and b.mL ered essential to the coixtuct of the Company's business.

deix> sits 133 316 238 in addition to restrtxturing activitics, unusual expenses Asuiated companies 61

-12 37 in 1985 iixlude(I a special one-time cash payment to Cmtonwr financing 52 78 66 lumrly union employees, in acconlaine witli new union other imestments: Int t

15 contr$ cts, as well as to (eitain other houdy and imn-emnpt salaned employees.

other smuiry items 100 272 68 5618 5 I.0l3 55'I Provision forincome taxes (excluding extraordinaryitem and cumulative effect income from royalty aixt technical agreements incicased of changes in accounting principles) substantially in 1986 because of the acquisition of RCA.

GE will retain a majority interest in RCA's royalty income

> S..igmlicant com]xments of the normal]novision f.

or m-from patents relatal to consumer ein tronics pnxtucts fi>r several years. Other suixiry items included gains of cone tam by taxingjurisdiction ar e shown below.

$8 million $178 million arul $38 million in 1987,1986 p,m.i,ionfor income rm,,

aix] 1985, respec tively, fium sales of[x>nions of the (In millions) 1987 I!Ni 1983 Cmnpmy's long-held passis e im estment in equity securi-U.S. federal inmme taxes:

ties of T whiba Corporation.

Estimated amount payable

$ 956 $ 1,n62 $ 812 I)clened tax expense (beix lit)

(65)

(93) 90 6 Interestandotherfinancialcharges Im estment oulit defened (anmniml)- net (87)

(38) 35 a-go, 929 ya, lincign inmme taxes:

Interest capitalized, pn.ncipally on major propesty, plant Euimated anmunt payable 197 198 135 aiul equijunent projects, was $23 million in 1987,$38 l>efenaliax expenw dienera) 8 (2 i)

< 13 million in 19S6 and $32 million in 1985.

205 17l 131 Other (principally staic aixiloc al 7 Unusualitems inmme taxes) 79 97 IS sima si.2nn $ 1,113 u-Unusualitems indude: gains fium dispnition of tenain Defened income taxes for 1987 relin t ihe impac t of awets whic h management has detennined ar e not com.

"tempirary dilferences"between the amount of assets piementary to the Company's future business focus arxiliabilities for financial repnting purposes and su(h (other than sales of tertain awets acquir ed from RCA);

amounts as measured by tax laws aix! regulathms. These aixi pretax costs or expense prmisions fi>r numerous dif.

"temporary differences" are detennined in an onlance ferent t) pes of transactions or ac tisities whic h ar e gener.

with Statement ofl'inantial Auounting Standards ally unique or ouur only infrequently, No. 96 (see note 1) aixl are more iixlusis e in natut e than

'I here were no unusual gains in 1987. In 1986, unu.

"timing differences" as determined umler piesioudy ap-sual gains ($50 million) anwe from the s;de of a small plicable generally au epted auonnting principles. De-fi> reign alTiliate ami adjustments to presions unusual dis.

ferred income taxes (br 1986 aixi 1985 have not been puition pnnisions. In 1985, unusual gains were $31S t estated. Priinipal items making up the deferred U.S.

million, of u hi(h $217 million was fnnu dispnition of federal income tax provisions Ibilow, residual GE interests in certain Australian u>al proper-Inucase (deu case)W"n# "# #"'i I'd#

ties, $132 million was from disIxnition of GE's residual m p amon for m<ome taxn inter est in a (ablesision c ompany, and $139 nulh,on was (In millions) 1987 1986 1985 Iloin iH{jtntinctif s to piesious Uniusual dis [xnitiori pn>vi-h mer M dGdion

$ 18

$M

$ 1') I sions. Dur mg the ) car m whi(h ca(h of the dispnitions Margin on imtallment s. des (16)

(33) 18 maured, there was no sigtiificant elfe(t on GE's operat-Pnnision for warranties 9

(27) 23 ing resuhs fium these disp > sed awets prior to dispnition.

P mision for pemioris 10 (52)

(171)

Principal urimual c osts were expcine provisions for other - net (86)

(7n) 66 l

(orporate t estnuturings $1,027 million in 1987,$311

$<65)

$<93) s 90 I

million in 1986 aixl $ 117 inillion in 1985. These wer e for I

ihe expemes ofiefm ining a wide variety of hmineu anxi 1

l1

Other-net includes a number of temix>rary dilferem es

> llac! on the location (not taxingjur isdiction) ofihe such as those relatal to various portions ofinmsactions GE luniness prmiding g(xxis or senices, domestic in-involving business dispositions and restructuring extense come before taxes, extraordinarv item and cumulative ef-prmisions.

fect of changes in accounting principles was S2,690 mil-lion in 1957 ($3.681 million in 1986 aixi S3,232 million

> 'l.he U.S. investment tax credit (I.I.(,) was repealed.

oI>cranons were $51_e million,561 I m,ilhon aixi Sl88 m q). I.he onmimngng amouna for Da@ndiam with some transitional exceptions, effective January 1, il-

,986. I.1.C, m. 1986and 1985 had aggregated $19 nu.lk.

on h.on m each of. he last three years, resixxthely.

t aixl S i 11 million, respectis ely, and the amounts added to net earnings because of GE's defernil from prior years

> General Electric Financial Senices, Inc. (GEFS)is a were S87 million in 1986 and $76 million in 1985. As a nonconsolidated af filiate for financial reix nting but is in-result of the accounting change in 1987, unamoitized cluded in GE's consolidated U.S. Iederalincone tax re-ITG is treated as a temimrary dif ference for delenul tax tum. Taxes payable by ihe umsolidc.tnl com panies anounting. Accordingly,$52 million was added to 1987 shown in this note exdude ihe efle t of significant tax earnings befi>re extmordinarv item and cumulative elfect credits and deductions nf G EFS, w hic h arise primar ily ofchanges in accounting principles. The remaining un-from leasing activities GE anxi GEFS together had net amottired ITG lxdance of S191 million (net ofdefenul taxes payable fbr 19S7,1986 and 1985. Existing leases of tax) at > car-end 1987 will be added to income in future GEFS will genenue taxable income in future years, whic h l

S ears.

is provided for in the defen ed income taxes of GEFS (see note 15). At December 31,1987,1986 aixl 1985, tax

> Fhe U.S. fedend statutory tax rate on corponaions was

""k.

""d 3308 ""."II ""' 'C'Ixs tis ely, wer;c ux oided by

'"I"N"M b

" ' b _' ". ""..""

l 109 in 1987, down f mm 159 in eat h of the two pre-sious vears. GE's nonnal effeuive tax rate (provision Ihr im om'e taxes as a pen entage of earnings before income ap ao o

n taws W Unand nyndng taxes, extraordinair item and cumulative effn t of purposes, GEFS investment tam ech,t can~) fhrwani (hanges in accounting principles) was 33.99 in 1987

".mouna am anun twanc) hone me&se jg no (as a nw nwnt tame.cunen% uu% 1 or (ompated with 32.59 in 1986 and 33.39 in 1985. A summary of s easons Ibr dif ferem es hetween the statu-

'"* I!urpnes, they will be off set agaimt taxes payable m, the f unne toi) mte aixi GE's elfeuise rate follows.

)

Diferences beturen U.S.federalstatutory czd GE efectite tax rates 1987 1986 l985 Cash andmarketaNe stCurities US fulcralstatuton rate 40.0 cc 46.0%

46.09 -

r in f F F ca ig Dc]xaits restr icted as to usage aixi withdiawal or med as (bef m e estraordinan item arvi pattial compemation for shott-teim lu n t ow ing arnmge-unnulatise ellat of auounting ments weie not matetial.

(hange)in consolidated before-Carrying value of mar ketable sn unities was substan-tas inu>me on an af ter-tas basis (6.9)

(6.3)

(5.5) tially the Snr as mat Let s ahie at Sear-cixi 1987 and

\\,aning tax rates of ommlidated alhhates (prin< ipall) foreign)

(3.7)

(2.2)

(3.6)

Im estnwnt tas o nlit (2.7)

(2.3)

(2.2)

In(ome tax at capital gaim rate (0.6)

(1.4)

(0.2)

Varying rates on unmual iiems 0.8 (n.1)

(0.6)

Current receivaWes Con ent-scar elfnt of ino>me tas an ouunng < hange 4.1 All other - net 2.9 (n.91 (0.6)

December 31 (in milhom) 1987 1986 GE cffa tis e las rate 33.9 "c 32.51 33.39 Rc(civable from:

Customen

$5,463 $ ~>,718 Amiated companies 155 178

> l,t ouston has been made for L,.S. federal. income taxes Nom onmlidated af filiates 100 13 to be paid on that pottion of the uixlistributed cainings Others 1,274 1.425 of alliliates aixl aswiated (ompanies expeded to be t e-6,992 7.361 mitted to the patent company. Undistiibuted eat nings Irss allowam e for losses 1210) 1156) inteixled to be t eim esied indefmitely in alliliates aixl as-

$6,782 $7.2nx sm iatal companies totalal S l.318 million, S 1,063 mil-lion aixl S961 million at the end of 1987,1986 mxl 1985, iespu tis cly. It is estimatalihat foreign tamedits wouhl appioximately oilset the U.S. taxes payable if these carn-ings w cie to be distt ibuted.

42

EE Inventories aM Funds heldforbusiness development ikxember 31 (In millions) 1987 1986 Fuixls held for longer-teiin futuie business developinent Raw materials aixi wor k in pnx ess

$ 5,515 $ 4.305 are invested in a variet y of securities, piincipally state, Finished g<= wis 2.54 6 2,379 county atxl inunicipal lxnxis and corporate prefeired Unbilled shipments 280 229 sgs'. Estiniated reali/able value of these investinents 8,341 6.913 was about the s,une as cost at 1)cccmber 31,1987 atul Irss revaluation to 1.]I O (2,076) (I,752) g ggg, I.!FO s alue of imentories

$ 6,265 $ 5.161

> See note I for information about the c hange in inven-

" m Otherinvestments tot 3 accountingin 1987.

> 1.1 FO revaluations increased $321 inillion in 1987, Ikxember 31 (in millions) 1987 19Ni mostly related to the au ounting change.1.lFO revalua-

's.on(onsolidated finan< ial sen it es a f hhates (a) $4,154 $3.n5 4 tions decreased by $101 nu.llion and S'171 nu.llion duting I986 aixi 1985, res1xx h ely, ba iuded in these decreases

^ *

• I"'"I '"'" P""ics (a )

826 41I w cre 531 million and $ 128 million (1986 atxl 1985, re-Al i"CH""C""' i""""*"'H"""" H hk spct tis ch ) due to lower inventory levels, Inainly in power Gmcinment anxl gosernment-guaranteed sec urities 169 177 s)<,tetus. Also,in 1986 and 1983, ther e wete net curtent-Other 457 258

) car pricedecreases. About 73G of totalinventotlesis 626 135 valued using the 1.lFO method ofinsentoiy au ounting.

Niai ketable equit s sn unities (()

90 71 I rss allowan(e Ior losws (75)

(63)

$5,621 $3.9 I I Property plant and equipment (a) Intludes achan< es at ikx ember 31.1987 of $130 milhon (in millions) 1987 19N)

( nom onsolidatal Iman(ial sen it es a t hliat es) an xl $ 15 million

.\\lator dawes at ikx ember 31:

(aw a iaini companies).

.\\lanulauuring plant anal njuipment 00 Eximmt nahr.d>le salmdnim dmam,4 at ua nd

> mar ka salue was $Ni milhon ad M Nid m

,q.

ic I;uwl aiul imprm ements

$ 232 $ 271 i

Iluildings. uruc tuies arul relaint

$6"> miUion m selt-emi 1987.uwt 1986, icy uiu h. Giou unicalized gains weie $ 14 milhon aiwi gr ow u m eaIiini lowes i

npupnrnt 4,127 1.087

%etc $18 n lhon m ik-(cWier t,1987.

i a

.\\la(hnrry and equipment 12,616 12.0til I rawhold o nts ami manufac turing Investment in nonconsolidated finan(ial set si(es alliliates plant umler t onstnu tion 796 1.110 lu edominately leplesents Gl"s ins estincut in Genetal Oil ami gas properties 801 815 Fhn FinniM him k EFS h u l*> b

$18,572 $ 18.37 I fin,nx ialinformation alwmt this alliliate.

Cat at Januat> I

$18,374 $ 15,7n6 Additions.uquired with RCA 1.638

- ot her 1,778 2.012 Disin nitiom (1,701)

(1.011)

Other ( hanges 121 (1)

Cmt at ikx emler 31

$18.572 $ t 8.37 i Accumulated deprecialion, depletion andamorIi:ation llalan(e at Januar> 1

$ 8,533 $ 7.8n6 Cunent-> car prmision 1,581 1.160 Disin nitions (1,065)

(736)

Other ( hanges 305 3

Italaru c at ikv ember 31

$ 9,317 $ 8.533 Property, plant andequipme <t less depreciation. depletion and emorti:ation at December 31

$ 9,255 $ U.8II 13

I l

1 General Bectric Rnancial Services, Inc.

General Electric Financial Sen ices, Inc. (GEFS) ituludes come tax return. Comlensed consolidated financial state-w holly owned GE Capital Cor}xmtlion (GECC) atxl Em-ments for GEFS follow, which indtale operations of plo)ets Reinsumnce Corporation (ERC) and an 80% in-Kidder from date of acquisition (June 1986).

terest in Kidder, Pealxxty Group inc. (Kidder). During See note i forinformation alx>ut the 1987 change in the nonnal course of business, GEFS and its alliliates accounting for income taxes.

have minor tmnsactions with GE and cenain ofits con-More information about GEFS is in its annual repon, solidated alTiliates. Virtually all pnxlucts financed by which may be obtained fnnn Genem! Electric Financial GECC are manufactured by companies other than GE.

Sen ices, Inc., P.O. Ilox 8300, Stamford, Conn. 06901.

GEFS is included in GE's consolidated U.S. federalin-General Electric Financial Services, ine, a nd consolidate d afiliates Carrent and retained earnings Financialposition l'or the year (In millions) 1987 1986 1985 Ikxemtrr 31 (In tnillions) 1987 19sti Fm mxt inc ome:

Financing nx civables:

E.oixxlincone from ojerations

$8,225 $5.976 $3.805 Time sales aixi hans, net of delentxl Elfa t on im estment in les craged iruonc

$18,560 $11.930 leases of(hange in tax-rate Im estnrnt in finan(ing leases 10,114 8.317 auumptions (172)

Totallinancing rn eivables 28,674 23.277 Sale of som L by nonconsolidated Ailowanc e for losses (743)

(603) athliate 10 Finandng rn eisables-irt 27,931 22.671

.I.otal caned itxone 8,225 a.814 3.50a.

('ah ami shomtenn im ntmems 709 4 0',

Expenws:

5tarLetable securitles at emt 4,495 3.6x0 Interest aixl disc ount expeme 3,277 2.063 1,339 5tarLetable securities at mar Let 4,000 5.fi16 Operating anxi administratis e

&surities puu haux! mxler agreements ex[eme 2,024 1,112 771 to n sell 12,889 12,1 Nil Imes aiul ; ming bohler ienefits of Other rn eivables-net 4,641 4.325 imuraix e alhhates 1,560 1,139 876 Equipnrnt on operating leases-ret 3,399 1,726 Prmision for hesses on Iman(ing Ot her aswts 3,342 2.106 in cisabln 290 558 185 Total assets

$61,406 $53.823 I A piniation arul amorti/ation 411 103

,!! O Prmision for unmual expenws Notes p.n able:

aiwl inina turing adisitin 91 1)ue w ithin oir ) ear

$22,848 $17,741

'ligal espemes 7,653 5.M75 3.381 ID'g-tenn 8,037 5.656 Nx unnes sohl utwier agreenwnts Fmnings (low)ltfor c iruume taxes-to repuniuse 13,187 13.070 extraonlinary in;m anxit urnulatne

&x urines sokl but not yet puuhased clin i ol( hange m au nuntmg at marLet 1,407 3.525 primipic 572 161) 121 Resen es ofinsur.u a c alhliatn 3,549 2.880 Pimision for im ome taxes:

Otherliabilities 4,639 1.076 Int ome t.n pimision (o niit) Itom Totalliabilitin 53,667 -16.988 oj eratw >m 20 (173) 11 Elin t on innome t.nn of thange ik fer rnlinu mw taxes 3,720 3.83M in tax rate awumlgiom for iklenntitne turnt t.nonlits 39 13 Incragni ! cases (392)

('a > ital su = L i

i Total pimision (onht) for Additional juid-in apital 1,347 1,317 im one taxes 20 (T 6'i) 11 Retairrd eamings 2,651 1,613 ion nings trforc estraordinary item Other (19) 3 aiul ounulatis c elln t of c hange in Equity 3,980 2.991 auuunting primipic 552 5nt 413 T<galliabilitin, defencd t.n items Extraonlinary item -GECC km on azul equity

$61,406 $53.823 cally extinguishnwnt of a citain long-ter m debt (trt of tax onht -

$39 million)

(62)

Ctun,ulatise clint tojanuary 1,19S7 of nutui applu ata m of Statenent of I'in.uxial Anounting Starulaids No.1Hi

• Aununting for hKone T.nec 518 Net carnings 1,008 5nt 113 Retained earnings at loginning of pet ic al I,613 1,139 726 Retained cainings at cixl of period

$2,651 $ 1.643 $ 1.139 44

EV IntangiMe assets EV Short-term borrowings Deteraher 31 (In millions) 1987 1986 Ikx ember 31 On millione 1987 19Ni G< n ulwill

$3,820 $2,793 As erage Ascrage Other intangibles 610 788 rate at rut e.it

$ 1,430 $3.581 Ann mt Dec. 31 Anunint Ikt. 31 General Elettric Com}unp Accumulated amonifation of gtxxlwill was $301 million N""' " it h '""t anxl $ l 17 million at December 31,1987 anxi 1986, ie-(. 'ICl""".wnn ommeinal uper 6.69 $ 35g g,y

$ 320 i

89, 6..

spectively. Accumulated amortization of other intangi-consolidual athliate bles was $365 million anxl $308 ritillion at De(cinber 31, lunk lu n rowings 361 35.2 331 29.6 1987 and 1986, respectively. G<xxiwill and other intimgi-Other,inclu< ling t un ent bles were mainly from the RCA aajuisition, for which 1">rti"" "I I""x-ten n goodwill is beinj; amonized on a stmight-line basis m er lx >n ow ings 426 223 10 years. The increase in gcxxlwill since Decemtwr 31,

$1,110

$1.813 1986 represented primarily the increase in RCA g<xxlwill (net of amonization) resulting from completion of ap.

Other borrowings at December 31,1987 induded anu>unts lxinowed fiom noruonsolidated athliates of praistd arul evaluation studies in 1987. Other intangibles and g(xxlwill are being amonized over shorter pericxh as

$91 million ($116 million at Dec ember 31,1986).

appropriate, ranging from fis e years to 20 years.

> 'lhe averagelulaine of short term lxnsowings,ex-duding the current lxntion oflong-tenn ix niow ings, 17 Otherassets was $1,192 million in 19S7 (cakulated by aseraging month-end lulaines for the >cai) unnp.n ed wi h an at-t erage balain e of $3,200 million in 1986. The maximum Iktember 31 (In million4 1987 1986 lulatues in these calculations wcre S2,0IS inillion at the i

Ret m erable engineering uists on Ot"I"I.j une 1987 ;uxl S 1,712 iniHion at the cixl of Sep-gm ernmenn ontr.u t s

$ 791 $ in3 teinber 1986. The as erage wor ldw ide effc( tis e intci est Defemx!inxome taxes 620 180 rate for the scar 1987 was 139 aixi for 19S6 was 89.

I reidt pensny assets 573 218

'lhei.e average rates represent total shoit-ter m inter est INisi 4f inanTnl(H n

y tlu awmgdulque outMaixhng.

i ra ists Ik4erml(harges 416 318

> Although the total unused cinlit available to GE ik tinough lunks aixhonmx n-ial anut unu kets is not

( i rl 7

tradily quantiliable (oni.n med medit lines of alxmt $1. l Other 144 183 billion had been exteixled by 19 lunks at Scar-end 19S7.

I

$3,m $2. >7n Substantially all of these Inx s also aie available for use in nul B in addition to their own a niit lines.

The National linudcasting C<nnpany capitalizes pn, gram (osts (induding rights to buiadcast) w hen paid or when a progr;un is ready for broadcast,if cailier. These costs are amonized ba ed upon pn>jeaed revenues or AccountspayaMe expensal when a piognun is determined to has e no value.

Ikt ember 31 (In mUlionu 1987 1956 Deferred income taxes at December 31,1987 indudal t ra<le au ou nts

$2,105 $1.972 net cun ent deferred tax assets of about $366 million.

Colleucci for the annunt ohnbers 279 312 Dne to ru nx onsoli<tatal at hliates 231 28n

$2,615 $2.591 20 OtherliabiGties Othercosts andexpenses accrued; a-liu luded in the$e an ounts aie (ornpensition anxl heneht au nuls dassified auun ent at 3 ear-cixl 1987 aiul 1986 of $777 inillion anxi 51,067 million, t espet tiscly aix!

dassifini as nonc unent at the smw ycar ciuls of Sl.119 inillion anxl $893 million, t espn tis el).

-l5

$81 million in 1988, $ 1,197 million in 1989, $21 Inillion in 1990, $822 million in 199I atx1 $3tH) million in 1992.

Long-term borrowings These amotmts are after deducting debent ut es whic h have been reaajuired for sinking-futui needs.

()uivaruling ! Ax ember 31 (In millioin) 1987 1984i 7%% Nines Due 1989

$ 500 $ 300 ti%% Notes Due 1989 500 3(N) 12%% Auuralian Dollar Notes Due 1989(a) 108 108 Share owners, equity Hi%% Notes Due 1987-1989(b) 35 83 iI%9 Notes Due ItPJoth) 75 l't efen cd suxk uj) to 50,0(X).OOO sharey$l.00 ptr value) 3%% Nines Due 1972-l!r31 19 23 is authot iml, but no sta h shares has e Ix en isstx41.

6%% Notes Duc lirJ1 500 31M)

Audwri/ed shares of(ominon sux k ([ur value $0.63) j 7%9 Eunslollar Notes Due !!r)1 300 300 a.30% sinking f uix] Dehentures Due total 1,100.(X)0,(X)O.

I 1973-!!rJ2 34 31 Shares ofcommon stoch 12%9 N<<es Due itPJ2 th) 100 100 Dn ember 31 (In tiu msuuh) 1987 198ti 198>

l e % Notes Due 11732 250 3%9 Euro-sen Notn Due !!PJ3 R) 198 191 I"uedJ.uiuar> l 926,564 926.3(il 923.836 1%% Eunslollar Divount Notes Due !!PJ3 th) 200 200 Situ n for [x = ding ofinter ests

~08 2%% Divount Niges Due !!r>l(dn th) 150 luunt Iks einher 31 926,564 92ti.3til itii.361 t

79 Eunxiollar Eucialible Notes Due in treasury (23,611,) (11.774) (14.612)

!!PJ8 (c)(i) 200 3 M)

()ntuaixling 902,953 9t l.7tMi 911.932 8%9 Ikirnturn Due 1983-2001 217 217 M9 Eunslollar Esterwlihle Noles Due Share owners' equity 2tN Ni(I)(i) 300 300 (in anilhons) 1987 19x6 1983 7%4 Eunslollar Esteaubble Notes Due Common stock issued 2t M Ni(g)(il 300 300 llalante lanuan I

$ 579 5 379 5 379 8%9 Sinking Fuixt Debenture Due 2016 300 300 Adjuument loritm L split 5

lixluu rial des clopment la nuls 225 218 une Dtu1nher 31

$ 584 5 379 5 379 All other 59 Iti3

$4,491 $1/B1 Other capital Italain e.januar) I

$ 733 $ Gil $ 610 (a) 't hc (innp.un bas enteinl into t estain (ont r.u ts w his h inult Adjusurent los um L spin (5) in a hux! l'.5. dollar intere t ont of 7Ji79.

Foreigmunem nan %>n th) Ikin originath iruunni h> RCA but for w hi< h GE is iw nv the mlbunenn 135 73 (IN obligor-t'nic.di/cd gainul un)on vx unitin hc hl bs innuram e M Nign anc sen 33 billnm at a huxl euhange rate of en athliain (23) 16)

L*,

t I 80. I 1 = $l'.N. I J M i.

Gain on ncasun 9 = L dig = nitions (d) Auoin}unied hs sde of 3.*i70.000 w.nrantu spiting

():her 30 23 1

8 Ikx emirr l. lim 9 :o puulu e sharn ol GL(onmon um k at liAux e lkx ember 31

$ 878 5 733 5 611

$ 11.31 per share. GE has anangni for optkan on its um L in order to pinlude arn dilution hom esenisc of Ihe waisants.

Retained earnings (c) Internt rate subin t to annual.uliusinent at the (inn}um,

11alune}nmary I

$14,172 $12.7til $11.193 option beginning in Hb9.

Ad ugnu1os 11 i

(1 ) Inice nt iate subint to annual adjuunent at the (inniumi Net cannngs 2.915 2.192 2,277 option hednning in HPJ3.

Dis ideixtuin Lu nt (1,209) ROW ( LO201 Ig) Inteint rate subjni to annual ad ugnent at Ihe O nniuini 11aluwe Iksrinitt 31

$15.878 $1117.! $12.7til i

ojaion irginning in ltPJl.

th) haludmg am<ntuatam ol osiginaliwoe diw ount.the Common stoc A held in treasury clfa tis e inter nt t atn at e: l' W n< *n - 7.119. 2 59 note' Italame januai) 1

$ 375 $ 310 $ 313 Punh'asn 846 318 283

- 7.669-Dign nitions:

h) At annual rate adjuunw t I daln, intes aic Inleenuhle in Fmphnee snings plarn (l(8)

(It PJ)

(l13) w hole or in just at ihe opcion of the Gunjum or ic; usable at Sn = L oj wiom.ux! apprn iation the option of the boklen.

rights 496)

(71)

(6O l

> All other long-ter m in u towiligs itulude nrigitul o.

Fmtih nee uim L ow nenhip i

pLn (393 ggy (g33

{

sue ju ettlittm atul dix ounts, an athusttuent to ht ing IWA Dnidetulitime turnt aml honowings at auluisition date to fait maiket value atul a

• ha'r P"" hdx' plan (12)

(33)

(29) y,iciy or herrm.+,gs by amh.oes ana u em o,mi-ms c""';"l"*""""Eit"+"

n

,23, ms, m,

%ith varinus intet est lates atMI tuatitIities. Atuotmt, due to

()gnenion n((;)()( r inng.

notu onu >lidated.d hhates % et c $ 10 Inillion alul $6 million lenn debt (24)

(7) d3) at the etMi ol 19N7 alMI 198N. leslx4 ti)Cl[.

m en W om}rm.H on pDns 13 i

N lialm elkxe ml<r 31

$ 860 $ 373 $ alo

> Inng tetm luntowinginatutitiesdming theint hse Sc.u s. im luding the }= n tion dawilied au ntient, at e In Alm.l 198.,. sh.u c ow nci s a ut hon./al ta) an iin icaw in the number of authoti/al shates of umunon suu k f rom 46

550,000 000 shares each with a par value of $1.25 to number of shares available fi>r gnuning additional op-1,100,000J)00 shares ca(h with a par value of S.63:

tions at the eixl of 1987 was 15,118,111 (18,519,992 at (b) he split of cach presiously issued common share, the end of 1986).

iinluding shares held in treasury,into two shares of com-Requirement s for shares of su(L lier iiu entis e ann-num st(xk each with a par vv -of S.63: and (c)an in-pensation plans as described in the Company's Pioxy crease in ihe number of a hares of prefened Statenwnt may be met within (enain resuit tions either stoc k from 2,000,tW)0 sha with,

r value of $1.00 per fnnu unissuni shares or from shar es in treasury.

share to 50,0(HU)00 shaies 'th a lur vahie of $1.00 wr As of Ikx ember 31,1987, a total of 3,913 imih id uals t

share. All share data hase been adjusted to reflect this were eligible to receive allotments mxler intenth e c om-change.

pensation plan rules. Allotments weie made fi>r senic es in December 1985. GE issued 708,00() new shares of icodeied during 1987 to 3,138 employec,.

sax k hasing a valuc of S21 million for an acquisition aaounted for as a px> ling ofinterests. The twginning 1985 balance of retained earnings was increased by Commitments and contir,gentliabuties

$11 million for this tnmsaction.

Ilusiness actis ities of most fin eign affiliates are mainly At December 31,1987,Ihe Comluny had minimum based on the U.S. dollar, aixt the ef fe(t, which is not ma-rental commitnwnts mxler nonoun clible opemting terial, of translating their knancial statements is induded leases aggregating S2,296 million. Amounts payable mer in cun ent > car earnings. Ilowever, the functional cur-the next five veais aic: 1988-S 118 million: 1989-tency for a few af filiates is other ihan the U.S. dollar, aml

$112 million:' 1990 - $351 million: 1991 -5301 mil-the effects of inmslating the;r financial statenwnts are lion; aml 1992 - $238 million.

induded in other capital. Cumulative fi> reign currency Ako at war-emi 19S7, N!1C had approximatelv SI.2 I inanslation adjustments wese $166 million and $31 mil-billion ofionunionents to aajuit e bnudcast mate ial or lion of additions to other capital at lks ember 31,1987 the rights to broadcast telesision prognum that require and 1986, respec th ely. At the eml of 1985, thes e was a pay ments m er the next th e years.

$ 11 million cumulatis e re ha tion.

Ot her conu nitments aix] continger a liabilities. c onsist-I ing of guanmices, peixling litigation, taxes aixl ot her 23 Otherstock-rebtedinformation c laims, in ihe opinion of managenent, ar e not (on-sideied to be mateiial in ielation to the Company's finan-ammmmum cial p,sition.

Sto( L option plans, appin iation rights aixl performance units aie desuibalin the Company's(unent Proxy Statement. Requir enwna for sto( L option shares may be nwt within (eitain iestiittions either Inun uniuunt or ticasuit shaies. During 1987, options were gnunni to 1,090 cmployees. As of Iks ember 31,1987, a total of 167 imlh iduah wcre eligible to in cite daw-gnmt optiom aix! all exempt s.daried emplo ces acie eligible li>r 3pe.

{

(ial option gnmts. In total,1,738 peisons hehl options exeuisable at ihe emi of 1987 or in the f utuie.

Stock option information As enige per share Shaies subjat Opiion.\\l.u Let (Shares in thousaixis) to option pric e piite llalan(c atJanuary 1,1987 21.519 $29.62 $ 13.no Options granteil 2,!M N 87.83 17.83 O}Hions eseniscil (2.251) 21.11 31.77 Optionoun ctulenil on esen ise of appiniation tights (3,276) 26.32 5 *>.Ni O dions tenninatal (2st) 37.71 l

Italaix e at Dn eint er 31,1987 18.613 33.95 l 1.13 Ouhtatuling options anxl r ights explie, aml the awald pc-s imi for ountaaling per fonnaru e unin emh, on s aiiom dates homJanuaiy 1,1988 to Ikx ember 18,1997. The

-17

2 Industrysepnentdetails Revenues iin hule inn omc fium all sources,i.e.,inith sales practical to equivalent onnnwuial selling pric es Alumt of pn xlurts aixl senices to customers aixi other ituome, one-fourth of GE's exteinal saks are to agencies ofihe Details of res enues for iixhnt ry segnwnt ielx n ting aie U.S. govenunent, GE's largest single untomer, Alost of shown below, in general, it is GE lx >lk y to prk e sales these sales wex act osp n e aixi ait auft engine piodm ts fr om one C(ungmy comlx >nent to anoiher as neaily as atxt senices, Rewnues (in milliom) liir ilw 3 tars einleil ikx einher 31

'listal re enues intersegment inenues Euernal ies emus 1987 1986 1985 1987 1986 1985 _

1987 1986 1985 Aennpue

$ 5,262 $ 1,318 $ 3,085 78 $

73 $

33

$ 5,188 $ 1,215 $ 3,052 Aircraft engines 6,773 5,977 1,712 48 57 87 6,725 5,920 IJi25 (iinsumer pn nhu ts 5,012 1,651 3,220 101 180 131 4,941 1,17 1 3,059 Finainial senk es 632 585 499 632 585 199 frWmtrial 1,707 4,7 l l 4,762 607 596 561 4,100 1,115 1,20!

Alajor appli.un es 4,721 1,332 3,fil 7 4,721 4,352 3,617 Alaterials 2,751 2,331 2,119 32 35 37 2,719 2,2tMi 2,082 National linutkmung Compmy 3,165 1,817 2

3,165 1,815 Ibwer sptems 4,995 5,262 5,828 125 185 213 4,870 5,077 5,581

'lis hnical pn=lutts arxi senkes 3,670 3,021 2,317 337 160 113 3,333 2,861 2,291 All other 85 774 4

2 81 772 Cor]xirate items aiul eliminatium (1,288)

(1,071)

(915)

(1.332)

(1,290)

(1,205) 44 216 290

'li >t al

$40,515 $36,728 $29,210

$40,515 $36,728 $29,210

.tssets Property, plant and equipment iln milliom)

At Iksember 31 her the 3rari ervic<l ths ember 31 Ik pre (iation. depletion Additions aiwi anonintion 1987 1986 1985 1987 1956(a) 1985 1987 198ti 1985 Aennpue

$ 4,131 $ 2,175 $ 1,367

$ 178

$ 311

$ 157

$ 151

$ 111

$ 81 Alinalt engines 5,217 1,rdi5 4.031 242 332 333 242 191 Itil Comumer pn=lu(ts 2,308 3,530 2,199 166 429 171 175 155 107 l'inainial sen k es 4,393 3.155 2,731 lix!mirial 3,053 3,111 2,896 179 258 213 196 ItMi 179 Niajor applian(es 1,684 1,678 1,509 118 108 146 93 97 78 Alateriah 3,891 3,602

'i,276 389 608 551 til 262 211 National linutkasting b>mpmy 3,839 3,385 I13 385 61 28 Ibw er spiems 3,456 3,589 3,668 118 127 183 162 173 290

' tis hnkal pn xhuis aixi sen k es 3,999 3,021 1,706 235 856 107 170 183 60 All other 95 231 l

95 3

8 On jurate items arul eliminations 2,854 2,119 2,773 48 175 92 80 53 19

'listal

$38,920 $31,591 $26,162

$1,778

$3,650

$ 1,9'>3

$1,544

$ 1,460

$1,219 (a) includn $1,638 million auguiral with RCA, Detalk of oper ating inofit by iixtusu y segment aiul un-goserunwnt,lnincijully the Deputnwnt of Defense aml usual iteun itu luded in operating profit can be fouixl on the National AeronauticsamiSpu e Administration, pages 33 atxl 31, iespettively, of this iepnt. A sununary

> Aircraft engines aixt iept.nement iurts are manufa(-

desa1poon of cat h of the n, xlustry segments follows, nu ni ami sohl by GE for use in military ami onnnwnial

> Acrospace pnxtucts ami seniuulun ekx trunks ain raft, for use in naval ships aml for use as imhntiial aml mi( n >cin tionk s, as ionic sy stems, on!naix e sy stems, p >wer soun es, GE's militai y engines are usol in a w ide vehkle equipnwnt,automatol test s) stems (omputer variety of ain raft that in( huks fighteis, f x nnhen s,inun-softwar e, simulation aml contiol sy stems, sj uox raft, p uts ami heli ( opteis. chi engines ar e usal in the amuun nication sy stems, nular, sonar ami sy st( n n inte-NkDoinwll Dougla: DC-10, the Airbus lixhntric A300 gration RCA act oslut e aix! defense businesses onnple-aixt the thicing 717. Aloie adnuu ni Chiengine nuxleh nWnt dixl a(l(! to ('.E's sj ux1:Tiiii of acrospu e at tisitics, has e heeri sele (ted to ixiwer the lhicisig 747 aixi 7ti7, Most aciospu e sales ar e to agein ies of the l'nitol States the Alibus fixlustric A310, A3004iOOaixl A330aixt the AftDom cil Douglas M D 11. Of growing imputaine is 48

l the CI'5156 engine liimily pnxioced by thejoint com-

> Industrialencompasses fiutory automation pnxtuus, pany of GE aixi SNEChlA of Fnmcc. Applications in.

semicoix haton, motors, ekstrical equipnwnt for iixlus-chale the llocing 737-300,737 1(X) aixt 737-5(X),Ihe tiial anxl comnwaial const ruction, GE Supply unujuny re-enginal Mclkmiwil ik>uglas DC-8 Super 70s anxl the aixi transixntation systeim. Customen for these pnxl-te-engined llocing KC-135 military tanker. Advancett ucts ge wmily inn hule ekttrical distr ibutors, original CFM56 engine nuxlels aie usal for the Aiibus hxtustiie njuipment manufactuien aixt iixtustrial end men. Fac-A320 aixi will be offeied on the long-range Airbus in.

tory automation puxhn ts cover a bnud nmge of clntri-dustrie A310. GE also pnxhnesjet engines for executive cal aiul ektt ronic pnxha ts, iin huling th ive systems, w ith aiicnift anxi regional commuter aiilines, emphasis on manulixtuiing aixt advain ed engiireiing

> Consmenerproducts thinugh ihe cix! of 1987 con-

"!aoinadon applicitions. Senucoixha1or operations pio-sisted mainlyof cideo, audio aixilighting pnxhats. At mle the latest solid-state technologies to other GE opera-the eixt of 1987, s ideo anxi atulio pn xhat lines w cre sohl tions as well as to exter nal customers. Alotois aixt motor-as past of a inmsu tion with Thomuni, S.A. (see note 2).

irlateti pnxlucts consist mainly of appliaiu e motors aixt G E will continue ihr some time to receis e nuvaitv income conin>ls but also un hule larger sues of moton Ior a from patents relateti to these consumer ekttioiUts pnxi.

I""".d nuige of natustnal usen. Mouir pnxhats aie used tats.1.ighting pnxlucts inn hule a wide variety oflamps w nlun GE aixl ai e alv> sohl exter nally. Ekt t rical dist nbu.

-incaixlescent, fluorescent, high intensity, halogen anxl

""" '*I C""I"d "luipment is sg>kt fi>r installation in onn-nunial,. lusui 1 aixt resalentul f auhys. GE hupply ux speciahy - as well as wiiing desires aixl quartz p'nxhnts, h!arkets aixl customers are principally in the United operates a nationwide netwoiL ofclatrnq supply,

States, ahlmugh (eitain fi> reign marLets are aim sen ed.

I"'"'C5 I'""'lxntation sy stems inn hules diesel-eletinc These markets are extremelv varied, nmging from a xt epoc hxonotises, transit propulsion equijuient, homelu>hl consumers to coimeicial aixi iiximuial eixt

'""I""int wlwels Ihr oft-highway s chk les, sin h as timse mers aixl original equipnwnt manullutuiers. Through usal in niining operations, aix! drilhng dnves. laumo-1987, this segment alv> iinitules ceitain fonner GE inter-tives are sokl prux quity to domesuc aixl fbreigu rail-to,als, w hile market $,or other puxhnts inxlude state aixi f

ests in cablesision aixi broadasting as well as Gl"s (himer small househohl appliance openuions. Comnwncing in hui tnunit authonnes aint uxlustrial tiscis.

1988, a GE-owird TV station in Dem er aixl a i erently

> Majorappliancesinnludesloth GEaixillotinint acquired TV station in Stiami, Fla., will be iejnned to-bnuxis of Lia hen anxi Lunxiry equipment, sut h as i cfrig.

gether with GE's princigul bm.ulcasting inteiests owned craton, ranges, mia owas e m ens, free /ers, dishwashen, by National lim,ulasting Company.

(lothes washers aixl dryers, aixi nxnn aircuixlitionen. A

> Financialscresces' piincipal business is ihe wholly inajor portion af major appliance sales is to a nu icty of owned, noncomolidaint alliliate, Genem! Eintric Finan-itail outlets. The other priinipal ma:Let comists of tesi-(ial Seni es, Inc. (GEFS). GEFS owm all ofIhe stix L of dential buihling contracton w ho imtall major applLu a es General Elattic Gipital Corporation (GECC) aiul in erw dwellings. A nationwide sen ke netwo:L supixuts GI"$"PP "'ne businew II Employen Reimununc Onioration (ERC)aixl80% of the sax L of Kidder. Pealx xty Group ine. (Kkhler). GECC in oider to imprm e o >miurability. segnwnt icsuhs primaiily engages din ctly or ihiough afliliates in distri.

have been adjusted to indude RCA appliaiu e sen k e op-bution sides fiinuxing, comnwrcial aixi iiximtiial finant.

enuions funnJune I to Daember 31,198(i Resjonsibil-ing,ical estate linaix ing aixt leveraged bmouts. Al.

ity lbr thesc opemtions was assumed by GE Appli;un es th'ongh leasing has twesi a nujor fintor in GECC's giow th aixt the operations' results are ira ludal in this segnwnt in red ent sean, GECC has been auis elv ( hanging its in-for 1987. In 198(i, these opemtions weie iclx n tni as pan vestment }xntfolio to place gicater emphasis on asset of the in hnial pn whu ts aixl sen ices segment.

managenwnt aixi openuion. ERC is a major junk ijunt

> Materialsiixludes high-peifbnnanceengiiwering in the pro lwity/ casualty reinsurance business in ihe plastk s, siliomes, superabrasis es aixi Luninates t hat aie Unital States aixi is exiuixling into offshore auisities.

soki to a dis ene cmtomer tuse (mainly manulint uren) in Kidder is an im estnwnt lunking linn w hose capabilities the Unital States anxl abnud. hlaterials also iin hides o>mplemem GECC's. Other smaller financial seni es ac-Imid Petroleum On}ximtion, an oil aixi natund gas de-tis ities inn lude: Geocican 1.iiniini, a noinunsolidatal al-s eloper aix! supplier with opemtiom mainly in the filiate w hk h pmvides a variety of financial seni es in Unitnl States.

Cmada; Ge wral Einnic Real Estate Cinlit unpura.

> NationalBroadcasting Comepony (NilC)is the cur-tion, a o mv >lidatal alliliate w hk h is an a juit y im estor in rent leader in artwo:L telesision NilC's piin(ipal busi-scintal real estate deselopnwn: pioja ts; aint a few s e-irsses ar e the fm nishing w ithin the Unital States of net-sklual im estments of a c onv >li latal vent ure capital on.

wn,( iclcy;s;on se,1l(es in.dlili.unt teln ision statiom, inoution, umst of whme ixntlblio was sokiin 1987.

dw pnxludion oflive and in ordal teles ision pmgnum aixt the operation, uixler ikemes from ihe I ntend Onn-municatiom Onnmission (FCC), of seven VIIF telesision 49

bnxulanting stations aixiilnee staixLml Ah! anxi five FAI sohl by GE anxi others; aixi emit onmental spiems f or nulio bnxulcasting stations.The NilC Telesision Net-utilities.

woi L iume of abree competing nujor national commer-

> Technicalprodnets andservices mmists of tn hnol-(ial bruadcast televisi< m netwoi ks aixl sen es nuire than ogy opciuti<ms pnividing pnxhn a, spteins anxi sen k es

)

200 regulatly alliliated stations within the United States.

to a variety ofcmtomeis. Ilusines es in this segment in-l Tlie television statiom NiiG openues aic h x atalin Chi-(lude nxxlical systems aial wn i< cs, mmmtmicatiom aixl I

cigo, Cles claixl, Dem er, los Angeles, Siiami, New %n L inEn mation sethites, aixt the Calma Oimpany, Sledical aixi Washington,1).C.The eight nulio bnsukusting sta-systems iin hule magnetic resonaix e (51 R) vumici s, mm-tions NilC im ns aixl opetutes are hxuted in Chicago, g;uted tomography CT)scamwts,x-iuy,ninlearimag-Ikiston, New Yoik, San Francisco aixi Washington, D.C.

ing, uluusouixl, aix(i other diagiuntimtuipurnt ami linsulanting opeintior.s are subin t to l'CC regulation suppating settices sohl to donwstic anxi foicign lunpi-mxl station Ikeming. The FCC outer inguiiing divesti-tais aixi nwdical fin ilities. The piiin ipal t om muniauiom tune of the Ahl station in New York, the ANI station in l>miness is the furnishing of domestic satellite mmnumi-Chkugo anxi Fht stations in New York, Chicago aixi cuions se Tic es by GE Anwiicom, w hi( h opetutes seven Washington is temixirarily stapxt. These dis estitutes aie donwstic satellites piuviding distiibution sen ic es f or ca-tot expatal to bas e a mateiial ef fect on G E's bminess, ble teles ision, bnsulcast television aixl radio, aial mk e, opemtions or linamial mixlition-video aixi wideixuxl data setti(es to agencies ofIhe f etl.

In 1988, this segnwnt will be m<xlified to reflect tmns-eral gmernment. An alliliate (RCA Gloixum), which fur-ferof management respmsibility to N11Cof two'lY sta-nishes ceitain international comiminications sen ices, is tions u hk h are own ed by aimther GE sulnidiary anxi expected to be sohlin the fint half of 1988. Comnuin i

whk h hase presiously twen iin luded with the musumer cairier se Tices of Anwriann anxl Gloixum are subjet t to i

lmxlucts segment-regulation by the FCC. GE's nu> bile mmmunications

> Pbwer systems senes woildwide utility iixlustrial aint pnxtucts mmist mainly of nmbile atul haixl held two-gmeinmental(ustim ers with pnxhna fi>r the geneni-way nulios, cellular telephoirs aixi laixl-nu > bile (ethilar tion, trammioion anni dist ribution of ele ( ti kity; anxi ic-systems fi>r a variety of business aixi goverimwnt om-i lated imtallation, engineering anxi s epair sen k es. Al-toiners. A sc[ mate sen k es mmp ment pimides a variety

(

though GE remaim a leader in nunt pmer sptems of speciali/cd senic es to gm cinment mstomen. Infi>r-pn=lucts, donestic anal foreign mai Lea have been de-mation senices aie piuvided Inth to intemal aiul exter-dining in in ent >can aixl w oildwide mmlwtition has nal tmtonwrs by G E information Senic es, GE comuh-bn ome intenw. New order intes aie quite low by long-ing Sen-i es aint the GE OnnputerSeni e olwnition.

term historical stainlan ds aixilxu klogs Ihr siitually all Thew inn lude enhanced compuer-based muu nunica-pnxtucts aie detlining. GE management contim es sigor-tions sen k es, su( h as data net woi L sen ices, ein tronic ous eflints to impr ove mst-mmpetitis eness aixi to adapt mail anxi elainmic data inten hange, whk h aie olleint pnxtucts aixi marketing to the t hanging emisunnwnt.

to mmnwn ial aixl iixtust rial t mtonwn thiongh a w oi ht.

Steam tuibine-genciaton ar e sohl to the elet tric utility wide networ k; applicuion softwaie pu Lages: nntom i ximtry, to the U.S. Navy anxi, for mgenemtion, to pii-systems design aiul nugnunming senices; aixiinnle-i t

vate inwimo ial t mtonwn. Alaiine steam tm bines anxi pendent maintenance aixi rentalleasing wni es ibr propuhion gears are alw soki to the U.S. Nas y. Gas tur-minimmputers arul mirn x omputers, cle(n onic test in-bines aie uwd prindpally as pn Laged pmer p' ants Ihr sinunents aiul data mn ununiculom equipment. The eks u ic utilities aixi for iiximt rial mgenennion aix t me-Cahna O nnpany designs, manufatimes aixl sells interac-l

( hanical diis e applicatium. Cenn ifugal mmpiewin at e tive gmphics spleim for computer-aided design anxi sold for application in gas icinja tion, pipeline sen ke manufactuiing.

aiul sin h pn x ess applicatiom au cfincr ies anxl ammonia in on!ct to improve compunbility, segnwnt iesuhs plants. Theie has e been no nudear plant orden in the has e been adjmtal to exdude RCA appli.ux e seniu op-United States situ e the mid-1970s aixt artisity in intema-entions Innupme I to Iksember 31,19% Resp >mibil-tional mai ken is s cry low. Comequently, G E is t estiuc-ity thr these openniom was awunwd by GE Appli.unes iming its nudcar bminew to fix us irsoun es on t elueling aixt the opemtiom'icsuhs are induded in the major ap-and sen ing its installnl lx >iling-water s e.a tois. Ibwer de-pliantes segnwn for 1987, lis eiy pux huts itulude transfin meis, iclap. eks tric kxul

> Allother for 1987 aixi 1986 mmists mainly ofiesults l

managenwnt sptems, p>wermmenion sptcim anxi nw-ten, piincigully for ekx tiic utilities. Installation, engi-h>r smaller RCA opeiatiom, nunt of w hk h had lx en diw necting aiul iciuir enit es int lude manageriiciit aixi pned of situ e the aapiisition of RCA. Thew o[wiatium in hnical expcitiw thr La ge pn jc(ts, sut h as pmer ja4.d whib hwhN' nlio qn mul muls plants; maintenaix c, impstion,icluir atxI ichuihling of cam nan imunun e subsidiary aixi a "new puxlut b" disisiom ele (n ical apiumtus pn x ha al by G E aixI ot hen: on-site engirweiing aixt upgnuling of ah eady imtallnl pu xhu ts in pior yean,ihe all otbei segnwnt ilnougli da tiiini pner of 198 > iinimini du remaituler of n ining auisi-ties of Utah International lix,, t he Lnt of n hk h weie dispnc<lofin 198Msce note 7).

50

Geographic segmentinfonnation Revenues (in milhons)

For the years entk11 thremher 31

'linal res enues inteisegnwnt rnenun Exter nal in enues 1987 i986 1985 1987 1986 1985 1987 1986 1985 Unital States

$37,517 $33,513 $26.811

$ 801 $ 639 $ 671

$36,716 $32,901 $26,110 Other areas of the woihl 4,894 4,387 3,638 1,095 563 538 3,799 3,821 3,100 Inter (ompany eliminations (1,896)

(1.202)

(1,209)

(1,8%)

(1.202)

(1.209)

'liital

$40,515 $36.728 $29.2 40

$40,515 $36,728 $29,210 Operatingpropt Assets For the seats eixlett iksember 31 At December 31 1987 1986 1985 1987 1986 1985 United States

$3,705

$3,563

$3,622

$32,986 $30,601 $22,195 Other areas of the workt 725 740 435 6,027 4,090 3,777 Intenom)un) eliminations 10 7

11 (93)

(103)

(110)

'liital

$1,440

$ 1.310

$ 1.068

$38,920 $31.591 $26,162 U.S. revenues indude ex]x nts to extei nal customers, aiul atxl GE interest in ninity w ere $3,196 million, Si l i mil-i ioyalty atxt licensing income f rom lin eign soun es.

lion atxt $2,720 million, respet th ely. The amounts a cic l

Iles enues, operating in olit aixl assels associated wit h

$ 1,871 :nillion, $112 million aixl $2.107 million, iespe(-

l fi> reign operations are shown alx>ve. At yeai-cial 198 <,

in cly, at December 31,1986; atxt $2.158 inillion, $116 mil.

lincign opeiution liabilities, minority interest in equity lion ami 51,503 million, resluth cly, at 1)et ember 31,1985.

I 27 Quarterfyinformation(unaudited) unumminum (Dollar amounts in millions; First Quaner Seco xt Quaner

'lhini Quaner li>utth Quaster prr-sharc amounts in clollars) 1987 1986 1987 1936 1987 1986 1987 19Ni l

Operations l

Sales of gin xis arul wrvices

$8,315

$5,880

$9,560

$7,785

$9,444

$9.278

$12,036 $ 12.268 Gross profit from sales 2,018 I f>05 2,359 2,086 2,022 2,285 3,229 3,018 Unusual items (308) t22)

(58)

(11)

(5r4)

(37)

(607)

(158)

As originath te)mirtal Earnings lx fore extranulinary item anal umulath e cifnt of(hanges in ac counting prim iples 343 537 720 621 703 601 730 lirshare 0.37 0.59 0.79 OM 0.77 Ofdi 0.80 Net carnings 624 537 720 621 703 601 730 Per share 0.68 0.59 0.79 OM 0,77 0 ui 0.80 Re tatement (1987) for SFAS 96 Ctunulathe ef fect tojanuary I 577 Per share 0.63 Cunent quaner ef fect (24)

(41)

(42)

(31)

Per share (0.02)

(0.05)

(0.01)

(0.01)

Asrntatal Earnings before extrannlinary item ami cumulah e elInt of t hanges in accounting primiples 319 679 661 460 Per shaie 0.35 0,74 0.73 0.51 Net earnings 1,177 537 679 621 661 601 398 730 Per share 1,29 0.59 0.74 OM 0.73 Ofdi 0.44 0.80 Jieidends deelared 0.315 0.29 0.33 0.29 0.33 0.29 0.35 0.3 I 5 Common stoeh - market prier range 55 % -13 % 39 %-33% 56 %-49 % 11%-35% 66 % 53 % 11%-35 % 62% 38% 11%-3T.

Net earnings aint reLacti per.slure amounts for the hrst thice quartets of 1987 hase been restatal as intuirnt by $FAS 96 -

"Aununting h>r inoime Tasn." Per-share amounts hase been adjustnl for the 2.foi l snx L split in April 1987.

First-quaiter 1987 as ieguntalincludal the(umulati e 1987 iesults indudetl an extiuonlinas y low ($62 million, clln t ($281 million,31 cents per share) tojanuary 1, 7(ents pei shaic)on caily extinguislunent of reitain 1987 ol'(hanging innentoiy auonnting. l'omth-quaiter long-term dein by GECC.

51

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Charles D. Dickey,jr.

hwrence E. Fouraker llenry 11. llenley,Jr.

Ihiet tor arul retirett Chaii man of Fellow. John E Kenraxh N h< nil Retirnt Chairnun oT the thuiti, I

the lbunt.Nott Paper Compans, of Canerninent,1bnant Chief t ux utise Of fu er arm!

Philaddphu, Pa. Ihrn tor unt e Onis er sit s, C.unhiidge. Man.

thin tor.Cluett, Prabh & Cn.

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E set utisc ultu rr aint lhin tor, Allaits nul lhin tor. R.ll Mat s then tor unt e !!N2.

'I he C.ooihrar I ire & Rubbt t

& Ca. Inn rrarn. Nrw YoiL.

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1 n'illiam French Smith John F. Welch,jr.

Walter R. Wriston

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Crutc her, law him. im Angt les.

bn utis c Olb.cs.umi lbrnior,

.iivi l hi n tor. Cit h or p armi Cald. Ihrntoi usa r 19Ni C.ciwral F In ir u Compans, Cuilunk, N.A., New Yoil, N.Y.

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Fair ht id. ('a iin. l>irrt t. siru e thenisir siru r 19:i2 1991.

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?i3 i

Boardof Directors consm.es Tl e o/outi,nn o,mminu met five times, iin haling nt sessions u ith the Amlit, Finalu e, aixl Technology aixi S(icnce comminees. It reviewed the Comluny's operat-ing resuhs mxl plans as well as the actisitics of GE's Alan-agement 1)eselopment aixi Onpmue Resean h anxi 1)e-GE's lhuni cominises the 18 Diin tois pictured alpha-velopnwnt oiri;itioins hetically on thc Inrceding pages.

The l'ublic Rn/mibilitin Committu, at its Iwo meetings, Silas S. Cat haut, a 1)iin tor since l!)72, r esignal from ieviewed the actisities of the Genend Ele (tric Fouixla-the ikuniin 1987 to ha ome President aixi Chief Execu.

tions aix! evahiatal public issues that could have a major ti e Ollicer of Kithler, Pealxxly Group Inc., a GE Finan-impact on GE.

cial SciTices subsidiary.

The Ter/nm/ogy rmd Scicnce Committee hehl two nret.

The ikuni, w hith hehl iI nretings in 1987,declarnt ings,Ix>thjoint sessions with the Opennions Onnmittee.

two inacases in the quaiteily divideix! on the Company's its actisities included a review of GE Aircraft Engines.

common stock, w hi(h was split 2 li>r 1 on April 23,1987.

In Slay, the disideixl was niised to S.33 per share on a post split lusis; in Nmember,it was raised to S.35 per Cosmwttees of the Board shaie.

In addition to regular meetings, GE 1)irectors junici-Audit committee operations Committee paled on the fi>llowing committees that aid the ikunlin Rk hant T. Itaker, lleinyt. Ilillnun, Cluirnun Cluiruun H uues Iaw rein e E. Fouraler Iawretxe A. Itowidv, The Amlit Gimmitter, w hich.nuludes only th.rectots Gennale G. Nik helvin Yke Cluirnun '

from outside GF, hekt finir riwerings This coiiniiitIce 11ailui2 &ott 15 eistel

' thomson E lirathfuw reviewnl Ihe a(tivities aiul ilulepcixlence of G E's public t rw is T. l>r esion Rohen E. hiener Frant li.T. Riu mk s Ia na ou I',nnkel accountants aixt the artisitles ofIhe Onnpany's internal audit stale It also review ni the Onnjun>'s internal linan.

Finance Committe, Arxtrew C. Sigler (ial controh atul compliain e with key GE policies, indud-Robert E. Aferter, William French Smith ing those a clatal to the defense procuiement pnicess, Chairman as well as t he im estment Ix n11 olio of GE Finanti.d I"I'!.i E Weh h.J r, Pn6fic,AnponsMiles N u e Chairnun Commifice S.CITMCA I

Rkluid T. Italer llenry ll. llente),Jr..

The Finance G,mmittee hehl limr meetings. It examined Charles D. DkLey,Jr.

Chairnun GE's financial lx nition, pemion fuixling aixl innst openi-llenry 11. llenley,J r.

John E Wekh,Jr.,

tions, iin cign inn estment5, liiuncing (oininitriieiits with fj((]

['$-("[yl the asil, e, xlustiy anxlother matters mvoh mg large-mn Waher 11. Wrhuin Tlx>rnton E lira <hluw sade utili/ation of Comlun) finxit law reixe E. Fouraker The Management Ihrriofiment arul Com/mation G,mmit-hianagement 1Ienty I I1illnun ter, w hit h inx ludes only 1)ilet tors from outside GE, inct Development and Gennute G. Alk helum Compensahen liatlura Nott 1* enkel lO times in addition th apinoving changes m. G E..s man-Committee Atuirew C. Sigler agenent,it tesiewal the Company's exernpt s.dary stnic-Waher it Wrhion, Willi.un Fr em h Smith ttue aixl exn utis e compensation prognuns.

Chaimun The Nominating Committu, w hi< h hekt thice uretings, llenty 11. Ilenley,J r.

Technology and llenry1 Ilillnun Sesence Commettee toibideint auxlidates f.or the ikunl aixl Ic(ommeixin!

Dasid Cdones Fr.mL 11lE Rhvules, Ihe o munittee st nu ture aixl inwinbership for the follow-Gertnule G. Nik hehon Chairman ing year.

Falward E.11 nul,Jr.,

Nominating Committec Vke Chainnari Char k s D. Dk Lc),Jr.,

Charles D. Dk Ley,J r.

Chairman Iaw rerxe E. Fouraker llenry ll. llenle) Jr.

llenryl llillman Genrude G. hlk helw>n Das ki C. Jones I rwis T. I'reston Robert E. hiener Atulrew C. Sigh r i

51

e Management IAsur rebiuary 12.198s) l Corporate Executive Officers Senior Corporate Officers Corporate Staff Officers John F. Wekk.jr.

' ' 'iT149 NigelD.T. Andreu s Chairinan of tue thuitiarul 4j

<l Var hrsklont,ilusineu Chk l I.xct utis c Olln er I

,) ;

ikst h>[>nu nt armi l'lanning james). Costella Lawrence A. Bossidy Vu e l'reslent arxl Coml> nolle Yke Chainnan of the Ibartl arxl 1.secuthe Olixer gag,y,y,,y Edward E. flood.jr.

Vu c l'resi lent ain! 'l rt.nuire :

Vue Chairinan of the Ibarti e

Chairinan of the liturtl aint aixt betutise Olluct h nklent. Grou r al t ies ti k James R. Bunt I"'"'""'O "l'"'"'"

F,nd W. Cany Ykc hesident g,,,g,y,g,,,,,,,,

y,,g g, p,gg,, dent.

\\ " # I'*I'"' ' I "M ' """X d '"I i

Senior Vke l'rewitnt.

Senior Yk e l'rni "d""I*'"'I"M Finan< r Luxutne Managenrnt g..

^ ' ~ ~ '

Joseph flandros Yk e h rwicut.nul ikl>ui)

General O >unwl joyce liergenhan Vu c hewlent. I'ul>la Rt lations L-James A.Parke Var hnkirnt. Auth: Staff j

Phillips S. Peter i

Vk e hewirnt.Gincinnent 1

Relations A rth ur V. Puccini Frank P. Dogle Walter L. Ro66 Yk r hnkitnt. Lin)>hnee Senior Vke l'iew cnt.

Senker Vu e hnitioni.

Relatuans 8

Relations Rewait h aivi lks elopnwnt E,dward). 5&iho

\\ u e hewirnt. Infonnatu>n l us utn e Vke l'rnklent 1

.l et hnologs a

hk Benjamin W.lleineman,jr.

Senior Vu e hnkirnt, General G>unwl arul %3 ciars 55

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Operating Management osor La,um

u. m Technology Businesses Services Businesses Aircraft Engines Aerospace Plastics FmancialServices rm

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Bria n il. Rout Louis V. Tomasetti Glen il. lliner Gary C. H~endt

% nkir Yk r Pir4dc ni, senwir Vk e Pir4 dent.

Nenior Var Pusident, Pr ewicni arul Ghirl Og w r anng GL Ainraf t t ngun GL Arrosp.uc GF Plastk s Olin er. Gerw ral Llu t e n Brian Brimelow A rth ur L. Glenn Paul L. Dawson I,'"N "I I M]I

' " ' ' ' """ ' " ^

l Yk e PIrdt trilt. ('.* n riiniwril VW r PInhlrill.1)Cletnc

(:hairinan <>l the B<tird aixl Richa rd L. Burke Robert G, $ tiber bC""dIU""" Md"'

,[,",l, Produi t s Nutrins

( jhit l Lsn utis e Of fu rr.

g gg I

(),ip ration (GL( L)

Va r Pirwirnt. b nn Yk r Pir 1 nt. Aitt ralt Philip Al. Gross g,,4, ff,gg Pn =hu t u iti IS-( t r on k >

\\ a r Pinwirni. ('.E hiln orws gg, g gg Sam Delfi Robert n'. Tieken Edu ard R. Koscher hna nt C

\\

Vu e Prnklent. lluman Vk r Pirwirnt. hnanic aint Vk r Pirsklent. Nato Afichael A. Carpenter Rnourin Infonnathin In hnol"O fler6ert G. Rammrath t sn uine Va c h nktent Robert C. llau kins Iadislaus H*. H arsecha Pr ewlent, G L 1%sik s

('"",',. [*

,'7,g Va r hnkh-nt. Aihain ed Vk e Pic4 dent. Arrosp.u r P.u ilu l id h ogran n Remuri es L. Donald 5impson Gt ( mn p. r.uc hn. int e Lee Kapor Vn e Pinnterit.

s( i s a n Va r howirnt. O.innwinal Aerospace andDefense Nf anuf a< no ing j,,,,,,jg,g,n,t i neur og raininn te,,3, y ascher Mum Vu Pmidmi Edu ard C. Bateria Va r h nktent. 51ailrnng Silas S. Cathcart

\\ u o hewirnt. An hnr

?

Joseph G. H'irth Pmidm M N Mar kenng Yk r h nident. In hnoloo t sn utn e ( Hla rr. Kubin, Robert). Sm uland q

Prabo h Group 1:n.

ss$1 t ul' MedicalSystems Stan C. Chapman,jr.

I u,

I sn utn e \\ u r hewirni aial Chwl 0;wiasing Olin or W. George Krall

\\ a r I innlont. t s a intal" Dan L. llale I

hmb, Pn = hu t u.n i

Buurwm lieu lopnwnt i

Alichael D. lockha rt John D. Rittenhouse (g,,g,,y,$g,,g,,

\\ u r 1 innirni. I man < r semor \\ n e hewirnt. RG\\

syng,r Vu e heddent aint Buwww lit u lopnwnl Ariospat c. nut th tense Imaiw e and Adminiur.ukin Erank E. Pickering Jack A.Frohbieter Atichael G. Titt

\\ne1innlont.t'ignwrting

\\ u r howirnt.( nerntnent Pndmt aM Ni aiul in huol'o F in11ona sutenn g

gg.,

,g flobert C. Turnbull Charles A. Schmidt John AI. Trani Rnn'n'^ntc(A"PU'n

\\ u e houdent. \\1 Idan

\\ u r Prewirnt. Aunrspair senun Va r hnkkni.

En gu n ( >pri a"""

Gt Medi(al Wenn Vincenzo Atorelli i

hewirnt aiwi tha t i sn utnc olfu rr.

i Generalilutt u -('OR I td l

Charles P. Pieper h eddrni armi

(.hu f t sn utne Of f ai r.

l GL Alnla al soirnn-Aua 1.rd.

Robert L. Stocking

}

Vu e hr4de nt. Nia:La nng I

factory Automation I

Robert P. Collins Pi rwit 111.liMI

(,hM I k srt uln0 ( U f H er.

( ek tanut AuttimalH eli i

M silh Ainri R J. I nt.

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Core Manufacturing Businesses

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Industrialand DectricalDistribution and NBC AppGances Power Systems Control i

Gary L. Rogers n,,,.-

VN r PIr%4tlt ill. ('.E Lirt t r k JI Dktiibutnin arul Cnntrol David AI. Engelman

[

)l Yk e Presalent. Nales i

I Motors David C. Cenener.H a tling I

Yke tSestent.GL Moton

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Roger D. Atorey Roberi C. H right Roger W. Schipke John A. Urguhart Ya e IS eulent. Mar L eung Prr6 lent aint thiti Esn utise knior Vk e Prewlenit.

Senior Vke Preslent.

]

Ollu cr. Nat k nul lin u<h asong GL Appluntr$

GL liniusn ial ainl iber Corn lu ns. Inc.

Gerald R. Cott S"'C""

i Alberi T. Barber Va r Piculent. G E Consuiner Clyde D. Keaton Carl.Schlemmer Exet utis e Va c Pre 61rnt Nrnar Var Pitsulevit.Gt livliistis Vk e 'rrmierit.

8'I"' ' '

• I M * "

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Lau rence K. Grossman Thomas E. Dunham Piculent. N itG New s Vke Perstent. Pioihu thin Eugen t). Kota rik Eduard L. Scanlon Bruce A. Enders V" C E'CEIC" U E P""C' Esot uthe Vue Piculent Vk e Pirsk nt. Maiketing D'li'C')

Raymond). Timothy Stephen). O'Brien R_ussell L. Noll.jr.

Gioup tsn unse Va'e Vu e Prewlent, %I< s armi

\\ n e Prnalent.t.L iuib_ u-n Prnklent Dnt nbution Delbert L. Willia mson Vu e Pu l Mar Loung Robert 5. Halsh John C. Truscott d'"I P'"yu e nt.

Group hn utisc Yk e Vu e Pic61 nt.'In hnologs I" ' '

Perulent J. Richard $tonesifer j

Vu e Pir61rnt.

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Trank D. Kittredge

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Eugene f. Alurph, GLInhung Senuir Vk e Pir4Icnt.

Eugene F. Apple GE Cninn uni < ations arul Vu e Prestent.Qualit3 aint Sen k es I nsironincntal Engiintnng Anthony L. Craig William S. Trago Pr estent. GL Inhir nuin in Yu e Pir6 tent. Ma Le ting Nonko avul %h s Robert P. Alongala Ih e PinHierit. Pts niut tu ni)

Sirphen Rabinowitz Vu r Pirwirnt. let hn<. logs 57

Operating Management, continued Support Operations mummmmmmmmmmmmes l

International Canada / Latin America ferospace Technology

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William R.C. Blundell Thomas E. Cooper Chair rnan ol ibe llo.rtt aimi Vk c Pinkirnt..\\er osjut e

(:hn't i Act utis e ()!!st er.

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GE Canasta Robert T.E.Gillespie EnvironmentalPrograms tart utise Vke Pinutent t

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Progrann Chirl F set utis e ()t hirr.

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\\ n e h nutent. Mar keting asul in ki nat inint ( >pri aliom Carl R. Turner sain Yue h nklent.

GE N nikordu. tor, Albert). febbo Corporatti Trading Yk e n naieni..\\nioinoiise limlustn \\lat koting.uxl 5ain R1 laddPetroleum gg,,,j3;,,,,

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Corporate Information Corporate Headquarters Form 10-Kandotherreports General Ekttric O>mpany The finainialinformation in this Rc[xnt,in the opinion 3135 Easton Turnpike of management, sulntantially confonns with or exceeds Faii 6ckl. Omn. 06131 the information requiied in the "10-K Re[xnt" to be submitted to the Sc(urities aixl Ext hange Onnmission g,g at the cixt of 5f arch.Lenain supplementalinformation

.l'he 1988 Annual Stcetmg of the (,,eneml Electnc ics without exhib.its is m that re[xut, however, aixi mp.

C.ompany will be hekt on % hx sday, April 2,<, at the ec will be available, w. hout charge, after Apu.l 15 from it h.aukesha Quinty Exixmoon C, enter Arena.m M,auke-L.orporate im estor Onnmunications. General Ekst nc sha, %..is., a subm b of Stilwaukee.

Gimpany, F.. fiehl,(, nn. (Xil31, air o

DiwdendReinvestmentPlan Copies of the General Electric Pension Plan, the Sum-Share owners w ho has e one or mor e shares of GE stoc k mary Annual Re[xnt for GE employee benefit plans registered in their names are eligible to im est cash up to subject to the Employee Retirement income Secuiity S 10,(XX) per month aixt for reinvest their divideixls in Act of 1971 anxl other GE employee benefit plan doc u-the GE Divideixl Reimestment aixl Share Purchase ments arxl information are available by writing to O>r-Plan. For an authorization fonn ami prospectus, write porate Investor Onnmunications aixi specifying the in.

to: GE Share Owner Senices, P.O. Ilox 2(Hi, Schenec-fonnation desired.

tady, N.Y. 12301-02(Mi.

The Annual Re[xnts of the General Ekctric l'ouixia-Principal Transfer Agent and Registrar U" " ' "' '" " " "" 5 h "" " I " '

The llank of New York Attn: Receise & Deliver Ikpartment Chun h Stmet Station P.O. Ilox 11002 New York, N.Y. 10219-1002 Stock exchangeinformation in the L'nited States, GE common stis k is listed on the New York Sux k Exchange (its principal mar ket) aixt on the lloston Sta L Exc hange. As of December 8,1987, i

there w ere alxiut 506,(X)0 shar e owneis ofiecoid.

1 l

01988 General Ekstric Com;un) Printett in U.S.A.

Note: Unlen otherw isc irxticatal by the (ontext, the ternn "GE,"

T.cneral Eleurit' aix! Com;uny" are usal on the lusis of(on-soliiluion (kw tihni on tuge 37. Unkm otherwise iixlicatul by 1

the(untext,ihe tenns "RCN'aixl RCA Corjuiration" mean RCA

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Cor]= iration ain t all of its "at filiates' arx1 am iatal i om[urnes as those teuns ar e usal on guge 37 as well as those (ompanies whose ow neiship was transfennt from RCA to GE snbsnjuent to GE's auguisition of RCA.

sIa Ia A L $ ItItieit, $, GE aixi RCA ate registerni tra<lenur Ls of General Elatric Com1un); A aint NitC aiciegisterni tra<lcmat Ls of Natiosul lin wicasting Com;uny, Inc.: 3 aixl

irxix ate irgisicini aint unregisterni tra<le aint wn k e nur Ls.

59 i

pgppWAerorf Buk Rete U.S. Postsee PAIO Generel Electric Compan GeneralElecuic Company fedeW. Connece' ut0601 c

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GENER AL h ELECTRIC NUCLEAR ENERGY BUSINESS OPERATONS GENERAL ELECTidC COAPANY e VALLECTOS NUCLEAR CENTER e PLEASANTON, CAUFORNLA 94566 March 8, 1988 U.S. Nuclear Regulatory Commission Washington, D.C.

20555 Attention:

Document Control Desk

References:

1) Docket 50-18

2) Docket 50 70

3) Docket 50-73

4) Docket 50-183 Gentlemen:

As is customary, copies of the General Electric Annual Report are forwarded to the Commission in order to provide updated General Electric corporate and financial information. Accordingly, copies of the 1987. Annual Report are enclosed for the referenced dockets.

6 Sincerely,

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. E. Cunningham Senior Licensing Engineer (415) 862-4330

/ca Enclosures i

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.