ML20203D060

Forwards GE 1985 Annual Rept, Providing Updated Corporate & Financial Info

ML20203D060
Person / Time
Site:	07000754
Issue date:	03/21/1986
From:	Cunningham G GENERAL ELECTRIC CO.
To:	Cunningham R NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
References
26681, NUDOCS 8604210465
Download: ML20203D060 (2)

Text

{{#Wiki_filter:1 }tETURN TO 395-55 78~2I GENERAL $ ELECTRIC NUCLEAR ENERGY BUSINESS OPERATIONS GENERAL ELECTRIC COMPANY e VALLECITOS NUCLEAR CENTER e PLEASANTON, CAUFORNiA 94566 March 21, 1986 O A. P RECENED ,,) S Mr. R. E. Cunningham, Director .h mR 25 93b Division of Fuel Cycle and Mate, rial Safety d s utttARRl-f '~ Office of Nuclear Material Safety and Safeguards, (CVh /), U.S. Nuclear Regulatory Commission-g pe / \\t s Washington, D.C. 20555 ?/ ~

Reference:

Docket 70-754

Dear Mr. Cunningham:

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_1985 Annual Report are enclosed for the referenced docket. Sincerely, o G. E. Cunningitam Senior Licensing Engineer (415) 862-4330 /** Enclosures ~ rN a DOCKETED \\' USNRC 1 2-MAR 2 51986 > r -e \\ NL'SS MML SECHON DOCKET CLERK D 6 b N 3r is 3 5 v s, j ~,l ' + k & -i g!DC ( Q ; t, J

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As we look to the next five years, our combination of different business cul-tures and shared values gives GE the ability and flexibility to win in world markets. It provides the bond that stimulates our people, the most impor-j tant asset of any organization, to pursue a common goal achieving excellence in everything we do. Centents 1 Financial Highlights 2 Irtter to Share Owners 8 Strategic Businesses Core Manufacturing Technology Services Support Operations 25 FinancialSection 52 Board ofDirectors 55 Management 59 Share Owner and Other Inforrnation

a- --y w L. w m u.u w u. w G J n D u - ~ w i - a a w w a.a a i L u w i - a w a a w a a. i u Ibrcent (Dollar amounts in millions; per-share amounts in dollars) 1985 1984 increase For the year Sales $ 28,285 $ 27,947 1% Net earnings 2,336 2,280 2 Per shore Net earnings 5.13 5,03 2% Dividends declared 2.23 2.05 9 Market price range 73 %.55 % 59mjgn At year end Total capital invested S 16,082 $ 14,502 11% Share owners' equity 13,904 12,573 11 Measurements Operating margin as a percentage of sales 10.4 % 10.2 % Earnings as a percentage of: Sales 8.3 8.2 Average share owners' equity 17.6 19.1 Return on average total capital invested 16.5 17.9 Borrowings as a percentage of total capital 12.7 12.4 u, ' < - 0 1

In GE's large technology businesses - Outside these circles, as well, are other medical systems, aircraft engine, aerospace, businesses: Some have performed very well materials, factory automation - our strat-in small or low-growth markets; some have egy is to make certain these businesses con-performed marginally; others are simply a tinue to improve their competitiveness poor strategic fit with the Company. In through a combination of synergistic ac-general, the managerial performance in quisitions and substantial investments in these businesses was outstanding in 1985 research and development. R&D expense -and just as important to the Company's in these businesses was $7.8 billion in the short-term results as the performance of past five years; plant and equipment invest-our more strategic businesses. ment, $3.6 billion. During the 1981-85 In 1980, GE's earnings were about period, earnings in these businesses as a equally divided between core manufactur-group grew at an average annual rate of 197c. ing -on one hand - and technology and In our services businesses - financial services - on the other. Today, while core services, construction and engineering, nu-manufacturing has grown in absolute clear services, information services - busi-terms, about 70% of 1985 earnings came nesses where ideas overwhelm investment from technology and services. - our strategy is to grow by adding entre-preneurial people, individuals who by fq themselves can create new ventures, and by L A making related acquisitions. Employers /M i Reinsurance Corporation, for example, was 3

• As part of floo ongoing acquired in 1984 for S 1.1 billion and made Au~L 1 inspionnontationofour a positive contribution to earnings in its strategy, we signed in late 1985 a defini-very first year - even after allowing for all tive merger agreement whereby GE will acquisition costs. Our four services busi-pay approximately $6.3 billion in cash, nesses - led by financial services - have or $66.50 a share for common stock, to grown earnings during the past five years merge with RCA. After this merger, GE at an average annual rate of 167c.

willgenerate about 80% ofits earn-Outside the circles are three businesses ings from technology and services - and -semiconductor, Ladd Petroleum, the still have a very strong, competitive and General Electric Trading Company - that growing manufacturing segment. provide support to the businesses within RCA's services and technology busi-the circles. nesses - the NBC network, the broadcast Also outside the circles are GE's ven-stations, the aerospace and defense busi-tures - such as our ceramics business and nesses, communications and the RCA Calma, our interactive graphics affiliate. Service Company - will complement our These ventures represent businesses that own businesses and help improve our have a chance to play a big role in what we global competitiveness. estimate to be large markets in the 1990s. General Electric already competes suc-At GE today, they're run by entrepreneurs cessfully in world markets, and we con-with their own boards - but with all the sistently rank among the nation's largest technological and financial resources that come with being part of a larger company. 3

Ta Ccr Sharo Gwnces During the past five years, we've t shared with you our assessment of the in-I creasingly more competitive 1980s - and { our strategy for winning in this era of greatly intensified worldwide competition. l <r In an environment of accelerated techno- ~ logical and market change and slower worldwide growth, a company - and its businesses - must change faster than the '4 1 world around it. That's why General Electric embarked five years ago on a long-term strategy to become the most competi-i rive enterprise in the world - not only in the 1980s, but in the 1990s and beyond. Central to our strategy is being number one or two in market share in 15 critical businesses which we've grouped into three circles: core manufac-turing, technology and services. In core manufacturing, we have six large businesses - lighting, major appliance, motor, turbine, transportation, construc-s tion equipment - that have a command- , y ing or leading market position. In the past gj m g s je, ml ~ five years, we've invested more than $2 bil-p,g lion in these businesses to help ensure j w_.-wcasa. AN 7 A they'll tw as strong in the 1990s as they Chairrnon and Chief Executive Officer John E Welch, Jr. (seated) is flanked are in the 1980s. The payoff from this in-by Vice Chairman and Executive Officer Lawrence A. Bossidy (left) and Vice vestment is encouraging. Over the past five i j Chairman and Executive Officer Edward E. Hood, Jr. (right). years - despite the cost of the heavy in-vestment, one of the worst postwar reces-sions, and increased foreign competition (aided by a strong dollar) that battered much of America's manufacturing sector - the earnings of these businesses as a group have increased at an average annual rate of 79/. Equally important, they are well-positioned for the future.

l i l Pt y. 3 I? j exporters. Our 1985 total exports were [i 8eeking neere specifically at1985, $4.0 billion, and our net exports were EQ some ofour businesses had an ex- $2.6 billion positive in a U.S. economy cellent year, but a number ofour key mar-that had almost a $ 150 billion merchandise kets were flat or down, reflecting the gen-trade deficit. eral slu:;gishness in the U.S. economy. Because of the strong dollar, and our Overall, net earnings were $2.336 billion, commitment to maintain worldwide share, an increase of 2% from $2.280 billion in much of our export sales in recent years had 1984. Earnings per share were $5.13 for low or no profit margins. But we were able 1985 compared with $5.03 for 1984. Sales to compete because our strong domestic for 1985 were $28.29 billion, about 1% businesses could support our exports dur-more than 1984's $27.95 billion. Contrib-ing the period of dollar imbalance. The uting to the modest improvement in earn-merger with RCA - with its strong do-ings were better operating margins which, mestic businesses - will greatly improve at 10.4% ofsales, exceeded last 3rar's rec-our already significant global competitive-ord 10.2% rate. ness by increasing the staying power of an In 1985, we also made significant addi-American company, with American workers. tional progress toward our long-term goal The merger was approved by RCA's ofdisposing of businesses that don't fit share owners on February 13,1986. Dur-GE's future and of strengthening the pro-ing the next few months, it will be subject ductive capabilities of those that do. Total to review or approval by the Federal Com-value of transactions involving sales of as-munications Commission, theJustice De-sets during 1985 amounted to about $700 partment and other governmental authori-million, bringing the five-year total to ties. We anticipate the merger will be $5.6 billion. The money from these asset completed in the second halfof 1986. Our positioning for the future was ac-companied by significant growth during the past five years: o Earnings have grown 10% a year o8 compounded. h1 o Our stock, through appreciation and Q g - 1.c yield, has grown 25% a year compounded. o We've outperformed, from the stand- ~ point of both earnings growth and stock gg g; appreciation, any group of peers - includ-7 ing the S&P 400, the " Blue Chip" (triple f A-rated) companies, and the electrical equipment industry. . },, .f messerhand L. , - og: -_2haa record $2.6 bWen in 1985. The t --. -_,'s a&D Center in Schenectady, N.Y., sentinued key thrusts et.:. 2-# :--Eng SE ^: ' : :;, in moete-riels, evtonestion, ::--,_ _^x selease and neiere-electronies. Corrent week en the advanced very serve seese integrated enreens shown here, for exameple, is being done to give SE a s:- g:"::.e edge in aerospese end other businesses. 4

R sales has been essential to our restructuring efforts - enabling us to invest in our key businesses and to help make such acquisi-tions as Employers Reinsurance and RCA. Ak (('l Steep W l.9 i [ Also looking to flee future, kJ wi research and development O O. q expenditures from Company and customer I funds totaled $2.6 billion in 1985, up cose.m.,s eise es.o r.tved e w.d m-from 1984's $2.3 billion. R&D expendi-ph. sis the..,h e os deries.as s eh. c w tures equaled 9W of 1985 sales compared ,..yi.in a.,,,,,.ms. a.,,, h.s with 8.2W in 1984. Expenditures for plant desis d k siv..N sese.m es-fr.mladivid I h .w rsumiH H is ,i.s-. and e9u'Pment were about 52 billion. The h.n.rg lity.' servi <.- five-year investment in GE's future growth -in plant and equipment and in research and d lopment - totaled more than of special significance for us. We began ' "' ""'"'"

• I'"" "E ' ##".t thmugh Some key businesses did better than we ne f the worst postwar recessions; and, as anticipated in 1985, some did about what with most new ventures, made several mis-we expected, and some didn't quite meas-takes and invested more money than we ure up to our expectations. Aircraft engine, had planned. But our staying power, and aerospace, financial services, factory auto-confidence in the reindustrialization of mation, nuclear services, construction America, has been rewarded. Today, we equipment, transportation and the trading have a growing, profitable business in less company performed better than our expec-time than it took us to do so in either plas-rations. Major appliance, lighting, motor, tia or commial ainafmim %o medical systems, materials, information other GE technology ventures that are now services, I2dd Petroleum, semiconductor' billion-dollar-plus businesses.

and construction and engineering were GE business highlights for 1985 are dis-about on plan. Turbine, because of the se-cussd on pages 8-24. My indude te verely depressed worldwide market for nology and marketing achievements for our electrical generating equipment, suffered a plastics, medical systems, major appliance, significant erosion in earmngs. Outside the lighting, aircraft engine, aerospace and lo-circles, very strong performances from comotive businesses and the continued Canadian General Electric and power deh. v-strong growth of several businesses, led by ery were, unfortunately, overwhelmed by financial services. Another highlight - the disappointment in consumer electron-dm aossa wveral businesses-was o ics, which had a r.egative swing of more the selection of GE in a Gallup poll of U.S. than S50 mdhon m earnm, gs. c nsumes as the Enc company that comes Our fitcrory automation business became profitable during 1985 -an achievement 5 I

l to mind when they consider worldwide services subsidiary have invested $22 bil-companies associated with high quality. lion in our own plants and in the factories, Our biggest disappointment in 1985 utilities, airlines and railroads of America, was not operational. It was the indictment creating or preserving at least 250,000 and guilty plea in a case involving im-jobs. While we paid $5.6 billion in taxes proper timecard charges on a defense con-other than federal income taxes during the tract back in 1980. This incident was very past five years, the $22 billion investment difficult and painful for the men and deferred much of our federal income tax women of General Electric, but we learned liability -a fact that has been misunder-much from it. We implemented signifi-stood by some advocates of tax reform. cantly more stringent financial and man-Although that pro-investment 1981 tax agement controls in our defense-related plan helped GE and other companies to businesses - including a new corporate modernize and automate their factories and policy, a Compliance Review Board and an to become more competitive in world mar-ombudsman. We are firmly committed to kets, current tax reform proposals would reducing the possibility of future trans-reduce or eliminate the incentives that fa-gressions and to finding - and reporting cilitated such investment and would seri-to the government - transgressions that ously impair the ability of American com-may have occurred in the past. panies to compete with foreign firms that In lifting the government's suspension of are strongly supported by their countries' the Company as a government contractor, fiscal and trade policies. While we accept then-Air Ibrce Secretary Verne Orr ac-the reality that a system in which profita-knowledged the depth ofour commitment ble corporations do not appear to pay taxes by stating: " General Electric has been very is politically unacceptable, we will con-forthright in uncovering, investigating and tinue to speak out on the critical need reporting to appropriate governmental for incentives for productive capital agencies potential past violations ofgov-investment. ernment procurement regulations. This co-l operative self-policing effort provides a i means for effectively discovering and re-p solving problems promptly and constructively." Another disappointment during the past year was our inability to make the case for the crucial linkages among incentives for productive capital investment, worldwide competitiveness and America's standard of living. Since the 1981 federal tax plan went into effect, with its provisions for in-vestment tax credit and accelerated cost re-covery, General Electric and its financial o- _ ti. hasty 9.in.,i,..th.,. the sh vissen, r s. d e.winienn m-is = erits i tb.ingt,swv.os n m. tensling. rs.s et fle. " z; u,'s M.n. gene.nt D.v.l.,ne.nt Ise. tit.t. In Ossining, N.Y. 6

,,m-m } ., -h }: he economic outlook for 1986 is t e Change must be accepted as the rule d mixed. Although a few positives rather than the exception. have emerged, some negatives stubbornly e Open, candid, interactive, continuous persist. Interest rates are lower than a year communication up, down and across the ago, but inflation-adjusted "real rates" are Company is the key to gaining trust and still very high by most yardsticks. The commitment. trade-weighted dollar did start to fall in e Effective leadership involves the accep-1985, but still ended the year almost 507c tance and management of paradox. For ex-above its 1980 level. Even at today's ex-ample, we must function collectively as change rates, Japanese wage costs are only one Company and individually as many about 607c of the U.S. manufacturing av-businesses at the same time. Similarly, we erage, and Korean worker compensation is must meet our short-term commitments about 107c of the U.S. average. Other re-while investing for long-term success. straining forces are the still-unsettled state e Our resource allocation process must be of U.S. tax reform and the seemingly in-dynamic. Sometimes a business benefits as tractable federal deficit problem. a net imponer of dollars, ideas and talent Against this backdrop, our economists while at other times the same business will are looking for a modest rebound in the be called upon to be a net exporter for the U.S. economy, and operating plans of GE's benefit of the Company as a whole. businesses for 1986 reflect - prudently, As we look to the next five years, our we believe - a relatively low-growth sce-combination ofdifferent business cultures nario with modest earnings growth. Should and shared values gives GE the ability - the economy be more in line with the con-and flexibility - to win in world markets. sensus forecast of close to 47c real GNP It provides the bond that stimulates our growth, we are well-positioned for good people, the most imporrant asset of any or-earnings growth. ganization, to pursue a common goal-achieving excellence in everything we do. 7_3 E g s i { j he removal of an entire layerof C upper management structure in late 1985 gives significantly more responsibil-ity to the leaders of GE's various busi-John E Welch,Jr. Chairman and nesses, freeing them to compete more ef_ Chief Executive Officer fectively in world markets. We were able to make this major organizational change [ because of the growing recognition by GE / people that, while we profit from the cul-b r-tural diversity of our many businesses, we are governed by common policies and Lawrence A. Bossidy Edward E. Hood,Jr. united by shared values. Our shared values Vice Chairman and Vice Chairman and Mclude a recognition that: Executive Officer Executive Officer o Excellence can be measured only in terms of customer satisfaction. I%ruary 14, 1986 7

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1..,+. W '.,- 'JJ e k f.LsNink at the (.ompant s hghnny {-g z.I.lq rethn-i-es las m c tesciand. o hio ,. i. -- ~ }( j}. "7 ~ A leader m hehnne innos ation. 1h.~c.,(!. O$ J.7, '- GI n the larcest manutaaurer < >t hehnrle praluas m tht l ~nited I (r '.. - - = 5tates praf ut me more than one ' f a ' .' g ; f.3 bilhiin h.cht nulbs annually Its so e s I ~ 5 manut' aurine plants. as wcll . h. ~ C b, y a as taohnes m canada. Lon Anwr- .....m .....m. It a ark l t ither Internacit in.t} b sta-tii tth. sers t a multibil!hin-dt)llar world marka T1. uinnnue this I ll'hting leadership. the (;>rnpails has Ins ested mtire than R> 01 mil-lD)n < >s er the past tis e scars in plant i and equipment. including new high-s[xul manutaaunne equip-ment tur mtandescent and fluores-tent lamps The hghony busniess ip also inanutaaures ret hargeable bat-tenes hehnne tixtures and winne des ites. as wcii as quartz produas L tur the semiumduaor, ta>u opoo 3 and behnny markas. 1 4-s

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I F A leadme suppht r tu the u.nstrut-gyp tion industrs. this Gl: busurss pio ( g i p k E "C s ' des t untra< ors. oriemal equip-rnent manutat turers and other users l { h-w ich a tull rance or pridut ts that k I <iistributt elet tra power and that /> s proret t t irt uits. equipment and p,iple Durine l'>X5. the u n-strlh tlun equipment husmess u nn-tinued to insest in improsed manu-tat turinC ttl hni >l. iyics. irn Itidine the new state-ot-t he-art c lean room .y W6f ('a$g'[(QQ}*{gggfg"yg%"gs958 at richt that opened in Burhneton. g'

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l f Motor bl. is the w orlJ s !cadmg suppher for appli.un es to scry large motors of elet tra motors. sut h.ts the 96 of sescral thousand horselw>wer for I IK'rC\\ $as er" flh)ttirs installed in uw if1 manlitat t uring alid prt k ess 1955 to run the air intake and ex-ind ust ries GI motors are asailable hause fans beli>w at the new l\\ in tw>th niirn:al etthiera y arid high opened hirt MtIlenry Iunnel in erta ient \\ 1 ncrgy $aser designs [Liltimore. MJ Durine the vear. The motor busmess also mmbunf GI shipped.'9 milhon motors of sales an(i sen n e tunt tions into a almost ever) dest ription. ranging new t ustomer st n he organization f rom subtr.R tional designs for use in 19S5.L, part of its drive to im-in tomputers to irat tional motors pros e t ustomer sitistat tion. l l 1 l E r't V 'Jr ( c?. ;. TPiiM; t O [j ' -'

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l l i s i j m -,,; p ,~ a i 4.. i.. l -iIluilding on its successful 1984 Lcd delivery of 220 locomotives to the Pmple's Republic of China, General Electric received a follow-on order in 1985 for 201 more ) locomotives. Manufactured in the Erie, Pa., plant at left, the kicomo-tives will be shipped to China I through early 1986. The transpor-l tation systems business also J'

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UN Dash 8 locomotive to the Norfolk .-i[yi Southern Corporation in 1985 and [ j l received a significant first order for wj its new 190-ton motorized wheel j '3 system, which will be used on mine j haulage vehicles in Australia. The I market leader in electric drive sys- ~- - ~ " tems for large otT-the-road mining vehicles and transit cars, GE also is a market leader in computer- ] controlkd h>comotives. 1 E d I a l I 12

/b- + i inurbine Surmg on the mannuth ;wmnsula uxnnxyawatt steam turbine-below in 'li>kyo Bay the worki's gtnerators GE also mmbitxxl its largest and most ret htutally ad-steam turbmc and gas turbnx orga-santed mmbuxd-qtle power sta-nizations in 19S5 to improve nun-t ion -- te..turing i i Li STA(; agement ettet titeness and help wmbmed-t p le systems -- is tak-mamtam the ( om;unt's position.ts ing shape. ( hr unit went into mm-the world's leading suppher of nx n ial operation in late 1985. power geix ration systenis. Abotit \\\\ hen the plant is tompleted in half of the workis 10-tnegawatt 19sS. it w ill generate.'.IH k) mega-and larger g.ts turbitxs are GE-w acts of elet f rait) for Tokyo Elet - desigrxxi. and more than half ot' the tra Power ( om;unv. Int. (hher elet c rit power in the l'nited States highlights for the year mtluded the is generated by GL steam turbur-Jehserv of the uorld's largest NL generators This busmess also is the herte generator to a power plant in leading supplier of slup propulsion Ar. zona and the signing of an and turbine-generator systems to agreement w ith the People's Re-t he (15. Navy. public of China to w-produce ti>ur .>a ii

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.w e .,._.+,c. Aerospace The new uimmunn ations satelhte vanced heikopters, new u>mputer-abose dwart's Theresa Skithngtor, generated imagery thr aircratt ~ and Llave Hart, two uillege gradu-simulators and installation of ad-ates retently hired by the acrospace vanced radar systems m Alaska. GE business. Already a leading sup-also began deselopment work on pher to the defense, spau and avia-the 1:pper Atmosphere Researt h non markets, this GE business is Satelhte (l:ARS). the Company's prepanng for turther grow th by biggest satclhte ever. Sheduled for steaddv retruiting new engmeering launth in 1989, l'ARS will m upy

c. dent and by investing heavily m more than half of a spate shuttle's developmg su(h important tech-cargo bay.

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i I ( p,_, ..m-y BestdryAutonestion 1 i j General Electric made cortinued with laser optics (based on develop-automation systems for the paper, I M progress in its factory automation ments at the Company's R&D mining, drilling, automotive test-business during 1985. A technol-Center) and software packages for ing, ship propulsion and metals in-ogy start-up in the early 1980s, shop ik>or management. A new dustries. GE drive systems, for ex-i l this business is now in the black-Genet" communications network ample, enabled the slab-casting becoming profitable faster than for tying factory automation equip-complex below at LTV Steel's j either commercial aircraft engine or ment together was derived from Indiana Harbor Works in Whiting, j plastics, two other technology the technology ofIndustrial Ind., to set monthly production start-ups that are now multibillion-Networking, Inc., a joint venture records in 1985. dollar GE businesses. During the (with Ungermann-Bass, Inc.) that 3rar, the factory automation busi-is emerging as a leader in the indus-4 ness unveiled a new automation trial communications market. GE's center in Frankfurt, West Ger-drive systems business strengthened many, to further penetrate the Eu-its position as the world's leading ropean market. Shown directly be-supplier ofcustomized drive al low, it is equipped with the latest in automated manufacturing and fIo-[......p((,. M{ , jO-f.l3fg.g _ - ~ ' j warehousing systems and serves as an application, training and dem- ) Q, 1.9 ' - e-1 ~,. g ~ 4 oustration facility for GE cus-v %- -b f.e# 2., ? j tomers. The Company also intro-

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Services Businesses Our services businesses range trom con-stru<. tion and engineering sen nes to finan-cial services, f rom information services to nuclear sermes. To continue developing these opportunities, we have expanded our capabilities through acquisitions and other investmems -- 510 billion worth over the List rive years ---- and mnovative solutions to t ustomer needs. W .? h g,4. Construction & Engineering (,I prm des a w ide unen or o,n-st rlit T l' 'i.lf ki ( flC f r M erlllC v rs 1(( s t hri.uchout t he w orld h.r e xam-pk. ( d sncons ene n crers Jesig ned and art msta!hng a t ustonived _. p p,x W O u ntrol surem for this new brass ^7T 7 ;4 m i!! at t h< ( h.tu brass ( umpan\\ ~ ' m Vrt h ( ar< >h na Durme rht year. the 4 nesn business als., n t en ed , W> igy % .g w m_r _t,at t~ _ m bh n c ama m %,,9 y n habihtanne transit < ars and be-gan < onstrut one a so, milhon 1 b ret u s - o-ax rm pou t r plant m i* g

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General Electric is the only non-GECC is a leader in leasing and in cent progress since it was acquired l

L - bank among the top 10 business-neveraged buyouts, such as the $83 in 1981. One tithe three largest ] to-business financing leaders in the million transaction in 1985 that al-property and casualty reinsurers in United States. Through its afliliate, lowed a management team to pur-the United States, ERC experi-i General Electric Financia1 Services, chase the Dr Itpper bottling com-enad a 56'T increase in net written Inc. (GEFS), the Com[uny pro-pany at right in Dallas, Texas. The premiums during 1985 and made a i sides reinsurance for companies to logos below represent a few of the $36 million net contribution to protect their property and funding other 18 leveraged buyuuts financed GEFS earnings after allowing for i for industries to exiund or auto-or refinanmi by GECC ove the all acquis; tion costs. Financial mate, manufacturers to finance past two years. GECC also ex-services also includes the General product sales through retail credit panded its financial services in 1985 Electric Venture Capital Corpora-agreements and entrepreneurs to by adding a computer leasing busi-tion, which held direct investments acquire businesses through lever-ness to its techno:ogy equipment in 51 companies at >rar end. aged buyuuts. Part of GEFS, the financing operation and two auto General Electric Credit Corporation auction companies to its asset man-(GECC)is the nation's largest di-agement activities. Another part of versified finance company with net GEFS, Employers Reinsurance Cor-earning assets of $20.2 billion. poration (ERC) has made signifi-5 f, MM TIFFm&Co. , I., n. u. Ebb 6 y. fQ c ween M COP,fAJNICAT10NS CORPORATK)N gW"ALDORF Baldwin DART @ DRUG " ~ " " m ~ n poDL T 1.C Y 1 i .. ~ ~, -. ~... ~....., y. v- ,\\ -a, 20 i

i ( ) \\ l l l M'.!' f;, nu l1 3 %%g,4y. i 1.t - o ' .v g; e r. s \\. I- .-+lt %. g JJha/la ks4 gC jedes- _.h an t1 s l. .. ' ? - ~Q ~ f y;. t -f fg f,- w e p p , Ja. p f :- J v. Information Services Customets worldwide turn to based services on systems that tie General Electric Infi>rmation Serv-together headquarters operations ices Company to help them pnxess with geographically dispersed of-and enhange information. Ihr ex-fxes and dealerships or that process amf e, autemotive distributors like documents and fmancial transac-l General Parts, Inc. above in North tions. GE's information services Carolina can order supplies qukkly business also otters a series of soft-and accurately over the Motor and ware packages, primarily for use by Equipnwnt Manufacturers Assria-corporate accounting and fmancial rion's TR ANSNET system, whk h departments, and a consulting electronically connects more than services operation that helps cus-3,500 distributors with 82 manu-tomers design and implement in-I facturers via GE's worldwide tele-fiirmation systems. pn(essing rwtwork. In addition to this type of ckctronic data inter-change, GE is fi>cusing its network-21

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0 UE [' ?- tems thsed in part on mnovations .. t 00,.. N, TY5 1. i,( s. - -a..,I E' I q.' q ' wg.,f, , q i,.., e at the Company's R&D Lenter, g m. ',,.; 2 -, '.. ' ~ [ T,.k..U.j.,',y. :. J < i.k.. l 3,.:> '+ '- r [.~_ n-GIMmart systems <omhme signal-2 ', 7.,. ~.... v../. : e m pD Kessing with pi>wer-sw irt hing .o ~.. ' -.,.,... .~- Itir mt)f t prs and alther devnes in ad-ilif tsin tan siipplying bl5 afR} eXter-nal tustomers w.th sophistnated mtegrated art uits and other clet - trona devnes. the semnonduuor husurss trams ( 4 en.emeers m the design and use ot electronns .M

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i :9.: q w. '.h ) 5 l~1 4h. ), s.:.- - * : \\ \\ t y*[._7....,. ..;.:.. 7. y ;.. J - r ' S ;ig. j T[ i.".;..~' "S.. ~ i I.edd Petroleum . j. : 4.- r P ..' j. 1 This GE afTiliate is one of the top During the year, ladd made addi-j..' 7.3, 3.? [y. V:33::]pj:,. j$ ....!.{ h. L.~ J 10 independent (non-major) oil and t.onal discoveries in Texas, Okla-g..'.- f f V. .3.if y. gas producers in the United States. homa and Canada and continued its It is also an industry leader in re-successful development program in g ..... 5. g.,33.- n:.? 7,g i.. serve growth and pro 6 table drill-the southwestern area of Colorado .; K .* sM ll.. if ing. Ladd's average 6nding and de-shown here. In addition,12dd ac- [ ' l'yF]JP.P..,, %W. p ~ velopment costs per barrel have quired a gathering system, pipeline 0 ."*o historically been below the indus-and other selected assets of Funk f.7M7 ;" 2.q-:..n,. ;[.M g;c.;{M:) d-dW try average, with 1985 marking its Exploration, Inc. in Oklahoma to ../. ; y lowest cost level in five 3 ears. complement its natural gas business. = ,= s y -:. L. t bding Operations m c'--- _ ; 7 T~ 3 3 i I Corporate trading operations com-d$: A ? d ~ { y Li bines the resources of the General ,y 4.k - ' k. L'. - $._.,f, -f -r'~ p, j Electric Trading Company - C f 1' a 2 y (GETC), the General Electric Sup-f ply Company (GESCO)and the . M ,9 corporate sourcing operation to

1. 7

_f [ help GE businesses win in today's M ' ' N_. _ s{'. ' ' M" W-A., A, s competitive marketplace. GETC ~ p undertakes and ful611s the counter-F' '1y.. trade, otTset and barter obligations -Ag ~ L that have increasingly become a g, " gg 4 -[ #" b 4 Ett g g condition for sales in world mar-J - i 4x. co 1, a ri d lef t 9 >.- N, Istanbul docks at right and other ~. - s h Turkish ports as countertrade re-(--*' -l ' i ? d'I ' ' E quired to support an $800 million j GE aircraft engine sale to Turkey. in addition to the Middle East, y other major trading areas for GETC -which supported $2.4 billion of g GE's export business over the last [ three >rars-are Europe and Asia. p GESCO has more than 150 outlets p throughout the United States to ful611 its tole as a leading distribu. tor of GE and non-GE products. r The corporate sourcing operation is responsible for consolidating the j buying power ofGE businesses and for developing, with GETC, a worldwide sourcing network to en-L hance the competitive leadership of i GE products. E 24 ? s

S e a Fmcncici Section Conggggg General Electric /S&P 400 enavel eersings per sleere Increase / decrease een.pered to tese 37 Statement of financial responsibility 37 Report ofindependent certified public 80'5 accountants Aanliteel financial stateneents 6 26 Earnings J d 4o 28 Financial position 30 Changes in financial position d 20 38-51 Notes to financial statements , cm.,,i am,,a Supplemeentel c:-- - :..^u y anel elate a semi.raa m s 4, (Unsediteel,inclenling steerts) fi78N'"),'h h kl ___ o 27 Earnings -2 29 Financial position 31 Changes in financial position 32-33 Selected financial data 34-36 Summary ofindustry segments 51 Effect of changing prices "Q,- =, 450 %0 M 270 .T 180 .? ' 90 0 19HI 1982 19H3 1984 1985 Emmployee p: f-- M.", (eemstead deller sales per eenployee) (eineesends) s100 M 90 l 80 m ,0 v 60 1981 1982 1983 1981 1981 25

st tcm:ntof Ecrnings $r,'I',pgj "llT"; Ibr the irars ended ikcember 3 I (In millions) 1985 1984 1983 Seles of prodsets and services to customers $28,285 $27,947 $26,797 Operating costs Cost ofg(xxis sold 19,775 19,460 18,701 Selling, general and administrative expense 4,349 4,542 4,463 Depreciation, depletion and amortization 1,226 1,100 1,084 Operating costs (notes 3 and 4) 25,350 25,102 24,248 Operating margin 2,935 2,845 2,549 Other income (note 5) 987 989 884 Interest and other financial charges (note 6) (360) (333) (370) Earnings before unuseet itenes, inconee taxes and meinorityinterest 3,562 3,501 3,063 Unusualiteams Gains from sales of assets 518 617 117 Provisions for business restructuring activities (447) (636) (147) Special payment to non-exempt and hourly employees (93) Revaluation ofg(xxiwill and intangibles (126) Unusual items (note 7) (22) (145) (30) Errnings before income taxes and meinority laterest 3,540 3,356 3,033 Provision for income taxes (note 8) (1,192) (1,065) (975) Minority interest in earnings ofconsolidated affiliates (12) (11) (34) Net earnings $ 2,336 $ 2,280 $ 2,024 Net earnings per share (in dollars) $ 5.13 $ 5.03 $ 4.45 Dividends declared per share (in dollars) $ 2.23 $ 2.05 $ 1.875 Operating margin as a percentage of sales 10.4 % 10.2 % 9.5% Net earnings as a percentage of sales 8.3% 8.2% 7.6% 'Ihe notes to financial statements on pages 38-5 I are an integral part of this statement. .......................i...... Itsu to's 9.0 8 u 6 l = - 9. 0 0 1981 19N2 1984 19M i 1985 1981 1982 198) 1984 1985 26

VS r Wee Statonneset of Eerselegs summarizes GE's oper-tablishes generally accepted accounting principles in the kd ating performance over the last three years. Related United States. GE has not yet decided whether it will information can be found in the Letter to Share Owners on implement the new rules in 1986 or 1987, nor has it pages 2-7, which provides commentary about the concluded its evaluation of the multiple c1Tects ofimple-Company's strategy and objectives, both long-term and mentation. However, preliminary indications are that in short-term, as well as certain developments in 1985. Ad-the near term a significant portion of pension expense will ditional information about trends in total Company oper-be met from Trust income, including increased recogni-l ating performance is in Selected Financial Data on pages tion of market appreciation. 32-33 and information about operations ofGE businesses e Other income was relatively unchanged in total in 1985 is presented m the Sumnury ofIndustry Segments on following a $ 105 million increase in 1984 from 1983 pages 34-36. Notes to Emancial Statements mclude fur ~ Alajor components of other income include the net earn-t ther details. While earmngs growth has been mamtamed ings of General Electric Financial Services, Inc. (GEFS) m each of the last three years, sigm6 cant progress has. and earnings on highly liquid investments. The 26?( in-contmued toward Company goals ofdisposmg of busi-crease in GEFS earnings in 1985 to $413 million was nesses that don t fit GE's future and ofstrengthenmg the offset principally by less income from investments (invest-productive capabihties of those that do. The following ments on average were lower during 1985 and also earned paragraphs comment on some important features of the lower interest rates). In 1984, earnings of both GEFS and items shown in the Statement of harmngs. short-term investments were substantially above 1983. ] o Sales increases were modest in 1985 (up 17 from 1981) e Interest and other financial charges were $360 million 4 and in 1984 (up 47 from 1983), re6ecting in part busi-in 1985, an increase of $27 million from the previous 3rar. ness disposition activity. Er example, adjustmg for the This increase was due mainly to a higher leul of average 1) dispositions in early 1984 of Utah International and the housewares business, sales would have been up 3G in b*"5" '**I"85 O#'.was only pa4, og. set by pu i interet r tes. h raluctmn E mEon) m, W intm 1985 and 109E in 1984. Several other factors have com-i bined to dampen price and volume growth, displayed in ".*"5"I"'.n 1983 was because oflower average bor-3 mwings, pnncipaHy by Greign afihate. the chart on page 26. These factors have included recent sluggishness in the U.S. and world economies and the con-e Unusual items consist of a number of transactions, most tinuing impact of the non-competitive U.S. dollar, which of which are related to major changes being made to posi-attracts a wide array ofimports while simultaneously mak-tion the Company for future growth by shifting the busi-1 ing it more dif6 cult to sell U.S. products overseas. ness mix to one compatible with long-term strategic bjectives and to reorganize and restructure ongoing oper-o Operating margin - sales less all operating costs - ations. Unusual gains from sales of assets dunng the last l was 10.49f of sales in 1985, following the strong 10.29F ti ree years ggreg ted $1.252 bilhon, mostly from dispo-rate of 1984 and 9.59; in 1983 sitions of Utah International, the housewares busmess and i l o Operating costs include expenditures for research and virtually all of GE's former broadcasting and cablevision development, an important aspect of future growth. Total operations. Provisions for business restructuring activities R&D expenditures in 1985 amounted to $2.553 billion, - principally devoted to rationalizing, reorganizing and of which S 1.069 billion was from Company funds and improving selected pr xiuction activities; reducing foreign $ 1.481 billion was from customer funds. Total R&D in-and domestic risk exposures; and phasing out or otherwise creased 1196 from 1984, with both types of ftmding being concluding other activities - amounted to S 1.230 billion j higher. Alore important, resources devoted to R&D have in 1983,85. Od.o unusual costs or charges have included increased sharply in recent years, as depicted in the chart a special, one-time cash payment to certain employres in on page 26 which shows that total R&D expense as a 1985 following union contract negotiations during the t percentage of sales has grown from 6.296 in 1981 to 9.0% year, and a 1984 downward revaluation ofgoalwill and in 1985 - while earnings growth has been maintained. intangibles because of rapid changes in certain technology Another important operating cost is employee pension businesses. Note 7 to the financial statements shows an-expense, which was $ 196 million in 1985 compared with nual details of these unusual items, the aggregate effect of $603 million in 1984 and $643 million in 1983. Pension which has had only a negligible impact on the Company's costs have been favorably affected by recent higher real net earnings in each of the last three years. returns on pension investments. A significant change in A discussion of the Company's 1985 total tax position is future pension accounting rules has recently been adopted on page 33 by the Financial Accounting Standards Board, which es-27

5tatsmant cf Fincncici Pcificn "" "a ' *" "3"'" r""' anil < onwlalatal athharn At IArember 31 (In millions) 1985 1984 Assets Cash (note 9) $ 1,606 $ 1,859 Marketable securities (note 9) 951 514 Current receivables (note 10) 6,040 5,509 Inventories (note 11) 3,949 3,670 Current assets 12,546 11,552 Property, plant and equipment - ner (note 12) 8,328 7,690 Funds held for business development (note 13) 726 814 Other investments (note 14) 3,150 2,903 Other assets (note 15) 1,682 1,771 Total assets $26,432 $24,730 Liabilities med equity Short-term borrowings(note 16) $ 1,297 $ 1,047 Accounts payable (note 17) 2,204 1,931 Progress collections and price adjustments accrued 2,257 2,403 Dividends payable 261 250 Taxes accrued 751 673 Other costs and expenses accrued (note 18) 2,146 2,303 Current liabilities 8,919 8,607 Iong-term borrowings (note 19) 753 753 Other liabilities 2,728 2,668 Total liabilities 12,400 12,028 Minority interest in equity ofconsolidated affiliates 128 129 Common stock (463,282,000 and 462,928,000 shares issued December 31,1985 and 1984, respectively) 579 579 Other capital 611 610 Retained earnings 12,991 11,667 less common stock held in treasury (310) (313) Total share owners' equity (notes 20 and 21) 13,904 12,573 Totalliabilities med equity $26,432 $24,730 Commitments and contingent liabilities (note 22) The notes cc, nnancial statements on pages 38-51 are an integral part of this statement. Bernings retained for growth and used for dividends Shere owners' opity per shore-(dellers per share) Decomeber 31(donors) l $6.0 $ l2.(x) m 4.8 M 25.60 ___ s M 3.6 19.20 f.-. E ) .4 2.4 a. a-12.H0 N W l.2 6.40 =~

qqqqqq, mg 1981 19M2 1983 19M4 19HS 1981 1982 1985 1984 19HS 28

my w a l The Statement of Financial Position shows the wares business dispisition includal 1.lFO reserves of a Company's tulance si eet at year-end 1985 compared $32 million. with the previous year end. e Kev elenwnts of working _ capital (rneivables and inven-o Cash and marketable securities classitini as current as-tories less trade payables and progress collections)"tunni sets amountal to $2.6 billion as of Iktemtwr 31,1985. over" 1.11 times in 1985. Turnover relates the level of in addition to tirse amounts, funds held for business de-working capital to sales realized during the year. In 1981, velopment ($726 million at the end of 1985) consist of average turnover at 4.41 tinrs had tren the Irst in 10 investments equally as liquid as current marketable securi-years. Most businesses exirriented lower turnover in ties but not classified as " current" trcause, although avail-1985, mainly trcause of higher average inventory levels able, their use during 1986 is not currently plamni. The and the working offof pmgress o>lktrions in imwer sys-aggregate of these combined, highly liquid assets was tems businesses. Managenrnt mntinues to stress vigorous $3.3 billion at the end of 1985, up slightly fmm $3.2 control of working capital to balance business growth billion the previous year. needs against the interest mst on capital lock-up. o Current receivables are mainly amounts due from cus-e 'Ibral debt (short-term and long-term) at 12.7% of total comers (S 1.6 billion at December 31,1985, mmpared capital at ikccmber 31,1985, remained quite low and with $4.3 billion at the end of 1981) from sales of pmd-results in a basis fi>r significant additional terrowing ca-utts and services. Customer receivables as measured by the paciry for such transactions as the pmposed acquisition of numtwr ofdays of billing outstanding generally were trt-RCA Corporation (see note 2 to the financial statements). ter through most of 1985 than in 1981. At IXtember 3 l, After reviewing the progused acquisition, the major 1985, the number of days billing (42) in customer receiv-debt-rating agencies have recently reaffirmed GE's " triple ables was three days less than at year-end 1984 and repre-A" debt rating, the highest classification. sented the lowest Daember in at least 15 years. Other measurements related to racivables include delinquency '#'"'"S' "'"",nl hurowth, (q. d. ads m siiam ownen sham ownen njun, y per share ( look value,,) have an ratios and amounts past due. Although GE's diverse busi-F**"'""' y over the past hve years. nesses had ditTering experiences in 1985 in response to varying business mnditions in markets senul, the overall in summary, General E!cctric's financial condition remains condition of customer rueivables remainni excellent at strong. The Company's financial resources and liquidity as Decemtwr 31,1985. Current racivables other than those of Decemtwr 31,1985, including highly liquid assets of owed by custonrrs include amounts due from several $3.3 billion, total assets of $26.4 billion, share owners' types of transactions, such as advances to suppliers in con-equity of $ 13.9 billion anti substantial capacity to add nection with major contracts. nuessary debt in addition to existing bank crnlit lir.cs, are 'V"I'" "d"If J"l"* o inventories were $3.9 billion at December 31,1985, compared with $3.7 billion a year earlier. "lbtal inventories e Provide fbr seas < mal working capital needs during 1986. were higher during most of 1985 than in 1981, but by

• Pay f.or plant and nju pnwnt expen tums that am m j

year end were equal to 163 days of output on hand. This imal n> be about $ 1.6 bilhon donng 1986.1,so, mated was seven days less than the year twfbre. Increases and P ""' '*P'"dI'"' I"d "PP'"*'d "FN8"d I Y I"'"'"pHhon at tir end of 1985, of which appro decmases in inventories varied considerably among GE $L3 businesses because ofdifferences in anticipated 19'86 cus-n plamrd m be spent m 1986, comer demand and actual sales during 1985. Major inven-tory reductions occurred in turbine, nuclear, consumer e Enable the Company to continue a high level of pro-elect ronics and major appliance o[rrations, while aircraft grammed expenses fbr researc h and development as well as engine had a significant increase. to support other business growth activities. There was a net favorable last-in first-out (1.110)inven- .""ipide e pmimsed acquisition of RC.A Corporation. tory adjustment to mst ofgoods sohl of $ 171 million in ',""E"."I Shortenn and longenn imowings to hnance 1985 compared with similar favorable adjustments of "* ""l"*""n am n; mal to be between $5.0 billion $ 125 million in 1981 and $ 114 million in 1983. These and $ 0 bilh.on. amounts include reductions in 1.1120 reserves ($ 128 mil-lion in 1985, $ 125 million in 1981 and $ 132 million in 1983) because of reduced inventory levels in certain busi-nesses, mainly power systems. Also in 1981, the house-29

5tst:m:nt cf Chcnges in Fin nci:1 Pcciti n ""*'"""""'"i""v '" " I ' ""*I " ""I " "" Ferds providsd (used) fi>r the 3rars ended December 31 (In millions) 1985 1984 1983 ends provided frone operations s Net earnings $2,336 $2.280 $2,024 Adjustments for items not representing current fund usage: Depreciation, depletion and amortization 1,226 1,100 1,084 Earnings retained by nonconsolidated financial services aHiliates (411) (330) (55) Income tax timing ditTerences 177 (171) 4 All other operating items 12 11 34 j Funds provi Jed from operations 3,340 2,890 3,091 i Funds provided frena (used for) clienges in working capitel Decrease (increase)in inventories (279) ($12) (129) Decrease (increase)in current receivables (53I) (260) (509) Increase (decrease) in current liabilities ether than short-term borrowings 62 (l12) 556 Net funds provided from (used ihr) working capital (748) (881) (82) Total funds provided frone operations and working capitel 2,592 2,006 3,009 Funds provided froni (used in) investaient and ottier long ternetransactions Additions to property, plant and equipment (2,038) (2,488) (1,72l) i Dispositions of property, plant and equipment 14 2 1,346 209 Use of(additions to) funds held for business development 88 (359) (455) Additional investments in nonconsolidated financial services affiliates (228) All other transactions - net 167 454 158 Net investment transactions (l,641) (1,0 17) (2,037) Fonds provided frone (used in) financial transactions Disposition ofGE shares from treasury 286 254 238 i Purchase ofGF shares for treasury (283) (284) (319) Increase in long-term borrowings 171 80 52 i Decrease in long-term borrowings (171) (242) (152) Net financial transactions 3 (192) (181) Funds used for dividends declared (1,020) (930) (852) Netincrease (decrease)in funds $ (66) $ (163) $ (61) i Analysis of not clienge in funds Increase (decrease) in cash and marketable securities $ 184 $ (132) $ (82) Decrease (increase) in short-term borrowings (250) (31) 21 Increase (decrease)in funds S (66) $ (163) $,(61) The notes to financial statenrnts on pagts 38-5 I are an integral part of this staternent. Consperisen of fonds flew frene operations witti fonds Borrowings es a percentage of tetet sepitelievested used for dividends and property, pient end eatelpanent ($ 13113eas) $ 3.5 20 7 punt 19M1 l'/M2 19Mi 19H 6 19MS 1981 1982 1983 1984 19N) 30

i i 63 j [See Seuleeneet of Cineages Tm Flamaelel Peel-There have been no additional investments in nonconso-lid.1 tien summarizes the main sonres of the Company's lidated financial services alliliates since 1983. Those aflili-funds and the uses to which they have been put. This ates retained their earnings for 1984 and 1985 to finance 1 Statement helps to show the relationship between opera-their own capital needs. i tions, which are presented in the Statement of Earnings, e Financial transactions have not iren a significant source and hquidity and financial resources, which are depicted of funds for GE in recent years, and the ratio ofdebt to m the Statement of Fmancial Position. total capital remains very low. However, in 1986 it is o " Funds" as used in this Statement, with changes sum-expected that significant amounts of new long-term bor-marized at the bottom, consist only of amounts classified rowings will be needed to complete the proposed acquisi-as current. At 3rar-end 1985, these were cash ($ 1.606 tion of RC A Corporation. billion) plus marketable securities expected to be used e Dividends declared totaled $ 1.020 billion in 1985. At dun,ng 1986($951 million) less short-term borrowings, $2.23 per share (up 18 cents),1985 marked the 10th i.e., those due to be paid during the next 3rar ($ 1.297 consecutive >rar ofincreased dividends for share owners.

j billion). Changes m other highly hquid funds that are GE's policy is to maintain dividend growth while at the j

expected to be used longer-term (funds held for business same time retaining suflicient earnings to enhance produc-deselopment -- $726 million at December 31,1985) are tive capability and to provide adequate financial resources treated as a provider or user of the more current funds. for growth opportunities. o Operations have been GE's principal source of funds, A recapitulation for the last five years shows that GE and ranging between $2.9 billion and $3.3 billion for the last its consolidated afliliates have generated funds of $ 14.9 three years. Details of the composition of funds provided billion from operations. This has covered cumulative from operaticns, starting with net earnings, are shown at of $ 112 billion devoted to recurring needs for new the top of the Statement. and improved property, plant and equipment and for divi-i o Working capital can be either a provider or user of dends to share owners. Net funds activity for all other funds. In GE's case, working capital assets - receivables purposes - future business development, additional and inventories - have been increased in each of the last working capital, debt reduction, corporate restructuring three years in order to maintain earnings growth while programs, business dispositions - resulted in an aggre-minimizing unnecessary lock-up of funds as discussed on gate use over the past five years of $578 million. As a i page 29. result, net funds at December 31,1985, were $ 152 mil-H n m re dun at the kginning of 1981. A discussion of i o Investment transactions involve inflows and outflows of c mbmed funds flow activity for GE and nonconsolidited - i funds with longer-term etkcts. Additions to property, tes foHows the discussion on, s total tax posMon a l plant and equipment have been GE's principal use oflong- "P*8'33' j term funds for many years. Although down from 198fs record $2.5 billion,1985 plant and equipment expendi-tures of $2.0 billion were still substantial and brought the five-year reinvestment in GE's productive capacity to al-4 most $ 10 billion. Of that total, 29% was to increase ca-pacity; 25% was to increase productivity; 16% was to 4 j support new business start-ups; 12% was to replace and j renew older equipment; and 18% was for projects involv-ing such other activities as improving R&D facilities and safety and environmental protection. l Dispositions of property, plant and equipment provided considerably more funds in 1984 than in other years, prin-cipally because they included the efTect ofdisposing of the fixed assets of Utah International. The impact of all dispo-sitions, including Utah, affects most of the lines in this Statement. i Funds held for business development are discussed t above. 31

5 Isct d F.m:ncesl Oc,ta (.u m ral I in u n ( ompam a a,a m,~,na.oa..n,n.um iib!!ar amounts in millions; irr-share amounts in th>llars) 1985 1981 1983 1982 198I Sales of pnxlucts and services to custonrrs $ 28,285 $ 27,917 $ 26,797 $ 26,500 $ 27,210 Operating margin 2,935 2,8 15 2,5 19 2,105 2,1 17 Earnings before unusual items, income taxes and minority interest 3,562 3,501 3,063 2,753 2,660 Unusual items - net (twfore taxes) (22) (1<15) (30) Earnings lwfore income taxes and minority interest 3,5 10 3,356 3,033 2,753 2,660 Net earnings 2,336 2,280 2,021 1,8 17 1,652 Net earnings Irr share 5.13 5.03 1.15 1.00 3.63 Dividends declared per share 2.23 2.05 $ 1.875 $ l.675 $ l.575 Operating margin as a [wrcentage of sales 10.1'J 10.2'X 9.57

9. I'J 9.07 Net earnings as a percentage of sales

8. 3';

8.27 7.6'X 6.9'J 6.1% Net earnings on average share owners' equity 17.6'X

19. I'X 18.9'I 18.8 7 19.1 %

Dividends declared $ 1,020 930 852 760 7 15 Shares outstanding - average (in thousands) 155,381 153,680 <151,768 151,078 155,056 Share owtwr accounts - average 506,000 520,000 501,000 502,000 511,000 Market price range per share $ 73 %-55% $ 59%-18 % $ 58 %-15 % $ 50-27 % $ 35-25 % Short-term borrowings $ 1,297 1,0 17 $ 1,016 $ 1,037 $ 1,171 Inng-term lurrowings 753 753 915 1,015 1,059 Minority interest in equity of consolidated amliates 128 129 168 165 166 Share owners' equity I3,901 12,573 11,270 10,198 9,128 Total capital invested $ 16,082 $ l1,502 $ 13,369 $ 12,115 $ 11,521 Return on average rotal capital invested

16. 5'E 17.9'#

17. 5'X 17.1%

17 A'J Etal assets $ 26,132 $ 2-1,730 $ 23,288 $ 21,615 $ 20,912 1 Property, plant and ujuipment additions $ 2,038 $ 2,188 $ 1,721 $ 1,608 $ 2,025 Worldwide employment - average 301,0(X) 330,000 310,0(X) 367,(XX) <101,000 Year-end orders backlog $ 23,117 $ 22,577 $ 20,589 $ 19,723 $ 21,005 Share (lata have been Aljustal for the 2-for-1 stot k spht in April 198 4. 1 1 Operating mergin es e percentage of sales Net earnings es a percentage of sales 10 S'l 94 4' 10 0 M H

9. 5

[ 7 19MI 1982 19M4 19M 6 1981 1981 19M2 19M L 19H 6 19N) 32

] 6 K N r, %@# reference for some data frequently requested 8 elected Fleennelal Dele provides both a handy successful leasing business has grown in recent >vars pirtly as a result of U.S. tax policy aimed at making American about GE and also a record that may be useful in review-business more competitive by encouraging pnxluctive in-ing trends. vestments in plant and equipment. Leasing from GECC has offered a broad range of companies an attractive, cost-j o Operatmg margm as a percentage ofsales has m.creasal effective way to meet capital aluipment natis. llecause i four consecutive years. A major reason for this improve-GECC bears the risks ofownership associated with the j ment has been the marked increase m productivity per equipment it leases to customers, GECC realizes invest-employee (see charts on page 25). Tins improvement stems ment tax credits and the benefits of the Accelerated Cost from consistent, continuing emphasis on improving cost Recovery System which Congress has established as tax structure, includmg substannat investment in better plant incentives. It is important to remember that GECCs past and equipment and highly select ve resource alkicanon. and current leasing activities will result in significant tax-o Net earnings as a percentage of sales 1 as increasal con. able income in future >vars. The 1985 increase in the fu-siderably. Despite major economic and market variations ture obligation is included in the $772 million shown for in the last five yrars, GE's earnings have grown at a pace the effect of timing ditTerences. substantially greater than the earnings changes for the ag-e GE's discretionary ftmds available for acquisitions have gregate of the 4(X) companies making up Standard & been generated principally by asset sales from its restruc-Poor s Index of U.S. mdustrial firms. GE's net earnings in turing program, not from deferring faleral tax payments. 1985 were 54% more than they were in 1980, while the GE arxl GEFS together gerverated funds from operations of S&P 400 was virtually unchanged (only 2% more than for $25.5 billion over the last five years. GEFS financings ,1980). The chart on page 25 shows GE's consistent earn-aggregated $8.8 billion. These funds were used to pay mgs growth since 1980 compared with the erratic per-taxes ($5.6 billion), to invest in capital assets ($25.8 bil-formance, m, cluding lower earnmgs in 1982 and 1983, for lion, including working capital) and to pay dividends to the S&P industrial composite. share owners ($4.3 billion). Of the capital investments, o General Electric's total tax position for 1985, including $9.9 billion was usal in malernizing GE's own facilities. those alliliates which are consolidated for tax but not for Also, $ 14.3 billion was investal in financing assistance financial reporting purposes (General Electric Financial provided by GECC to numerous companies to finance Services, Inc. and its two affiliates, General Electric Cralit their capital tx111s. Much of this latter investment was in i Corporation and Employers Reinsurance Corporation), the form ofleasal equipment to companies that did not i follows. have the financial resources to acquire aluipment nealed to operate their businesses. These investments generatal Total GE taxes Ihr the par endal tax credits and depreciation deductions of $3.4 billion, j (In millions) December 11,1985 which effectively offset federal income taxes payable dur-ing the period ofinvestment. However, the payment of Provision for U.S. federal income taxes: Estimated amount payable (GE and consolidated federal taxes was nxrely postponed and income pnxlucal a N $ M2 from these investments will result in higher taxes in future E_st ted amount recoverable (nonconsolidated years. Thus, GE and GEFS together actually spent $ 1.4 billion more than was generateg from internal operations Nec U.S. federal income taxes payable 258 3 Elkct of timing ditTerences and deferred investment and tax deferrals. The increase m discretionary funds avail-l tax credit 772 able ofsome $2.4 billion over this five-year period is at- ) Total provision for U.S. federal income taxes 1,030 tributable to major asset sales. 1 ] All other taxes (Sorial Security; foreign, state and kral e inflation-adjusted results fbr GE are Iiresenred in note mcome; property an i franchise; sales and use) 1,079 5 to the financial statements. llecause the rate ofinflan.on 'Etal taxes payable currently or in the future $2.109 1 m the United States has remainal at relan,vely low levels or the past four years, adjustments for inflation have not In 1985, GE (including both consolidated and nonconsoli-been as sigmficant as those experiencal m the late 1970s dated alliliates) provided an aggregate of $2. I bilh.on for and early 1980s. Although inflation-adjusted earnings are taxes of all types payable currently or m the future. ainys lower than reported earnings, the generally positive The amount of U.S. faleral income taxes recoverable by "'"'j ;" E "I**'"'."85"I5 "' "'**'"'"8' nonconsolidated afliliates arises primarily from General " '"'*" "E ' "O """ '

i Electric Credit Corporation's leasing activities. GECCs i

l l .O lw-.

l Scmmcrv cf Indcstry Scamants d " "" <-"'n'"> ".u"w"i u insolidarni athlia Er the 3rars e<ided December 31 (In millions) 1985 1984 1983 1982 198I Cevesemos(sales plus other inconr) Consumer products $ 3,569 $ 3,858 $ 3,741 $ 3,943 $ 4,202 Major appliances 3,617 3,650 3,078 2,751 3,132 Industrial 4,571 4,274 4,228 4,705 5,361 Power systems 5,552 6,010 5,878 6,093 6,015 Aircraft engines 4,712 3,835 3,495 3,140 2,950 Materials 2,459 2,241 2,060 1,791 2,050 Technical products and services 5,197 4,803 3,823 3,516 3,005 Financial services 499 448 397 286 239 Natural resources 609 1,579 1,575 1,722 Corporate items and eliminations (904) (792) (598) (638) (825) Total $29,272 $28,936 $27,681 $27,192 $27,854 Net earnings Consumer products 217 228 163 146 225 Major appliances 224 223 156 79 82 Industrial 143 73 84 148 212 Power systems 449 486 439 384 242 Aircraft engines 381 251 196 161 149 Materials 266 262 182 148 189 Technical products and services 261 232 210 218 144 Financial services 406 336 285 203 145 Natura! resources 117 301 318 284 Unusual items 7 Corporate items and eliminations (18) 72 8 12 (20) Total $ 2,336 $ 2,280 $ 2,024 $ 1,817 $ 1,652 See pages 17-50 for additional segment information. Fiv> year not earnings growth rates (1981 85) by sogneemt Year-end orders beeklog and tetel Cesapeny ($ billions) \\tY:4 $2i 0 0 Total (empany (culuding natural 20 M 19 2 pr.xjutts sE 10 14.4 C( n M Materials i ]F ,.-'i. .N,.,,, O Rmer spums -( J-g i 3 a O 94 s Tes hnnal pnmlut es and servnes U p - {_ O Ain raft enguirs ] - 10 LH 3 All other f O Mayw as pliantes g 5 Rmer systems O Finandal servues u a Amraft engmes - 20 0 19HI 19M2 19H1 19M i 1945 34

C3 i De Summary of Industry Segments groups 1985 backlog. Included in power systems backlogs were: U General Electric's revenues and net earnings by the $2.0 billion for steam turbine-generators and $3.0 billion principal industries in which GE's various businesses par-for nuclear fuel, services and products. Approximately ticipate. These differ from the groupings by " circles" $0.8 billion and $ 1.9 billion of the December 31,1985, noted earlier in this Report. The circles focus on key busi-steam turbine and nuclear backlogs, respectively, were nesses in terms of strategy considerations involving re-scheduled for shipment five years or more in the future. source allocation and help to emphasize long-term goals. e Censumer prodwets earnings and revenues were 5% Additional financial details and information about mdus-and 77c lower, respectively, in 1985 than in 1984. The try segments are included on pages 47-49. principal reason for lower 1985 earnings was the loss sus-o The five year net earnings average annual growth rate tained by consumer electronics, which had a profit in for GE, excluding natural resources, was 13.79. The 1981. Losses re0ccred significantly lower prices, stemming che on page 34 shows how growth rates varied by seg-from an industrywide oversupply ofcolor television sets, ment. (Data exclude the former natural resources segment wEch were offset only partially by productivity improve-because most of that segment consisted of the mining op-ments. Lighting earnings were up slightly on flat revenues erations of Utah International that were disposed ofin as programs to improve factory etliciencies continued to 1984 and 1985.) Economic conditions have affected GE's have a beneficial impact. Reflecting cost takeouts and pro-businesses in ditTerent ways. Usually, those that are driven ductivity gains, mobile communications was modestly directly or indirectly by consumer purchases (such as con-profitable in 1985 following a loss in 1984. Revenues and sumer products, major appliances and materials) see a re-earnings of the battery business trailed 1984. cessionary impact almost immediately in slackening sales, e Meier appliance earnings and revenues in 1985 while those more oriented toward commercial and indus-were a ut ewn wah 1981 Donrso.c mlunw m. 1985 trial markets generally lag both an economic slowdown was slightly ahead of 1984's strong performance, but soft and subsequent recovery. There was an economic recession U.S. markets resulted in lower prices and offshore sales in the United States from the third quarter of 1981 to the declined. Prmcipal factors m much better profitabihty, last quarter of 1982. Also, U.S. economic performance since 1982 have been sharp improvements m productivity was sluggish during 1985, with generally soft consumer and excellent pr duct quality that reduces in-warranty markets and continued weakness in many industrial sece costs. markets. A number of GE's businesses are not affected directly by e Industrialearnings in 1985 virtually doubled 1984 short-term recession and recovery but are affected by dif-on 7% higher revenues. The major contribution to the ferent economic cycles. These include much of the power much improved earnings came from factory automation systems business (where long-term public utility order businesses, which became profitable in the latter part of trends are reflecting much lower growth in electrical load 1985 with an earnings improvement of $40 million for the demand than has been realized historically); businesses year. Reflecting several years of programmed actions to having a heavy national defense orientaCon, including improve efficiencies, transportation systems had much acrospace and military aircraft engines; and those operat-better earnings in 1985 on only slightly higher revenues. ing in unique markets, such as the rapidly changing and Construction equipmerit earnings also were much better in growing environments for financial services, medical sys-1985 on a go(xl sales increase. Motor earnings were up tems, information services and commercial aircraft en-somewhat on productivity gains partially offset by lower gines. Also, generally poor international markets, espe-volume. Iower volume and prices for semiconductors re-cially in Lttin America, have prevailed in recent years, and suited in an increased loss in 1985. markets for U.S. exports have been increasingly battered e Power systems earnings and revenues in 1985 were by the non-competitive U.S. dollar. lx>th 87 less than in 1984. With a long-term downward o Trends in orders backlogs are also charted on page 34. trend in domestic markets for heavy electrical generating Products and services sold by GE have a wide range of apparatus, turbine and nuclear earnings were considerably order-to-shipment cycles. Approximately 517 of the total below the presious year despite productivity improve-backlog of $23. I billion at December 31,1985, is sched-ments. Construction and engineering services sales were uled to be shipped in 1986. Aircraft engine orders ac-down but earnings improved sharply as base costs were counted for $7.5 billion of the orders backlog at December lowered, particularly in offshore operations. Also, base 31,1985. Virtually all of the 1985 aircraft engine backlog cost reductions, coupled with somewhat higher volume in is to be filled during the next five years. Power systems meters and transformers, resulted in a go(xl carnings im-orders accounted for $9.0 billion of the total year-end provement for power delivery in 1985. 35

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St~tomontcf Fin nci 1Docpcncibility To Shere Owners of General Electric Company highest standards of conduct and practices with respect to The financial information in this Report, including the transactions with the United States government was re-audited financial statements, has tren prepared by General aflirmed in a written [ulicy in 1985. This policy and re-Electric management. Preparation of these statements and lated vigorous actions emphasize to all employees that data involves estimates and the use of judgment. Account-even the appearance ofimpropriety can enxic public confi-ing principles underlying the financial statements are gen-dence in the Company and in the government procure-erally accepted in the United States and are consistent with ment process. Ongoing education, communication and re-standards issued by the International Accounting Stand-view programs are designed to create a strong compliance ards Committee. However, in a few important instances, environment and to make it clearly understood that devia-which are commented on in note 1 on page 38, there is no tion from Company pokes will not be tolerated. single specitled accounting principle or standard. Where Peat, Marwick, Mitchell & Co. provide an objective, management makes a choice from reasonable, accepted al-independent review of management's discharge ofits obli-ternatives, it uses methals which it believes are prudent gations relating to the faimess of reported operating results for GE. and financial condition. Their report for 1985 again took To safeguard share owner assets, it is important to have no exceptions to the Company's financial statements. a sound but dynamic system ofinternal financial controls The Audit Committee of the Board (consisting solely and pnxnfures which balances benefits and costs. One of of Directors from outside GE) maintains an ongoing ap-the key elements of GE's internal financial controls has praisal, on behalf of share owners, of the effectiveness of been the Company's success in recruiting, selecting, train-the independent public accountants, the Company's staff ing and developing professional financial managers. Their of corp > rate auditors and GE management, with respect to responsibilities include implementing and overseeing the preparation of financial statements, and of the adequacy of fmancial control system, rep >rting management's steward-internal financial controls. The committee also reviews the shir of the assets entrusted to it by share owners, and accu-Company's accounting policies, internal accounting con-rate and proper maintenance of the accounts. trols, and the Annual Report and proxy material. Management has long recognized its responsibility for conducting the Company's affairs in an ethical and socially responsible manner. The commitment to this resp nsi-bility is retlected in key written policy statements. These Dennis D. Dammerman John E Welch,Jr. cover, among other subjects, potentially conflicting out. Senior Vice President Chairman of the Board and side business interests of employees, compliance with anti, hnance Chief Executive Oflicer trust laws and proper domestic and international business practices. General Electric's intention to maintain the libruary 14, 1986 Ceport of Independent Certified Public Accountants To Share Owners and Board of Directors of in our opinion, the aforementioned financial statements General Electric Company appearing on pages 26,28,30 and 38-51 present fairly We have examined the statement of financial position of the financial position ofGeneral Electric Company and General Electric Company and consolidated afliliates as of consolidated affiliates at December 31,1985 and 1981, December 31,1985 and 1981, and the related statements and the results of their operations and the changes in their 1 ofearnings and changes in financial position for each of the financial p>sition for each of the years in the three-year i years in the three-year period ended December 31,1985. period ended December 31,1985, in confbrmity with Our examinations were made in accordance with generally generally accepted accounting principles applied on a con-1 accepted auditing standards and, accordingly, included sistent basis. such tests of the accounting records and such other audit-ing pnxedure; as we considered necessary in the M /[ k circumstances. P d&G 345 Park Avenue, New York, N.Y.10154 libruary 14, 1986 .U l

wwwwa ww.-.:.a aw.x-wua x.=~ -- -xx.- aa. a.-- g i Susaneary of significant accounting were capitalized and subsequently amortized over the pro- [policios ductive life of the property, commencing with the start-up I" "" " ' o Consolidation. The financial statements represent the adding together of General Electric Company and all com-e Pensions and other retiree benefits. Accounting policies panies, except financial services companies, which GE fbr pensions and other retirement benefits are discussed in controls through a majority interest or otherwise ("affili-note 4. ated companies"). The effect of transactions among related ~ companies is eliminated. g. The principal financial services afliliate is General proposoel acequisition Electric Financial Services, Inc. (GEFS), a wholly owned a company which in turn owns all of the stock of General On December 11,1985, the ikurds ofl Directors of I.lectric Crnfit Corporation and Employers Reinsurance Corporation. These financial services companies are so dif_ Gener 1 Electric Company and RCA Corporation (RCA) ferent from the other GE companies that their financial app ved a definitive agreement by w hich GE will acquire statements are more understandable if shown separately. RCA through a merger. RCA share owners subsequently Therefbre, separate condensed statements ot GEFS are pproved the agreement on Ftbruary 13, 1986. Under the shown in note 14 and the nonconsolidated financial serv. terms of the agreement, GE w di pay $66.50 a share m ices atliliates are included on the equity basis as "one line" c sh, totaling approximately $6.3 bilh,on, fbr outstandilng in other investments in the Statement of Financial Position shares of RCA common stock. GE will also pay approxi-and in other income in the Statement of Earnings. mately 5148 million in cash for outstanding shares of two Companies in wbich GE owns twtween 20"f and 509; classes of RCA preferred stock. G E also has received op-(" associated companies") are also includal on a "one line" tions to buy an aggregate of 28.3 milhon shares of pres-basis. ently unissued RCA common smck the $53.125 per share exercisable at GE's discretion upon the occurrence ofcer-o Sales. A sale is recorded only when title passes to cus-tain events. As part of a proposed settlement oflitigation comers or when services are pertbrmed m accordance with which includes a challenge to the validity of these options, contracts. upon obtaining judicial approval, the option price would o Investment tax cralit HTC). The ITC tbr each year is be increased to $59.75 per share. deferred and then amortized as a reduction of the provision Financing for consummation of the merger is planned for income taxes over the lives of the facilities to which the to conw from a combination ofinternal funds and external credit applies. borrowings. The terms on which external funds would be obtained and the sources involved have not yet been deter-o Inventories. The values of most inventories are deter-minni. Combined short-term and long-term borrowings mine I on a last-in first-out, or LIFO, basis and do not to finance the acquisition are expected to be between exceed realizable values. 35.0 billion and $6.0 billion. o Depreciation, depletion and amortization. The cost of Completion of the merger is subject to certain remain-most manufacturing plant and equipment is depreciated ing amditions, which include review or approval of the using an accelerated method based primarily on a sum-of-transaction by various governmental agencies and receipt the-years digits formula. If manufacturing plant and ".f approval fmni the Frderal Communications Commis-equipment is subject to abnormal economic conditions or 5'"" It 'S ""('cip ted that the transaction will be com-obsolescence, additional depreciation is provided. The pleted in the second halfof 1986. full-cost accounting methai is used for oil and gas proper-ties. The cost of mining properties of Utah International Inc. was depreciated, depleted or amortizal mainly by the unit-of-praluction method. Mining exploration costs were charged directly to expense until development of a specific mineral deposit was likely to be economically feasible. After such determination, all related development costs .m

b1perating costs tion, as a percentage of the average carrying value of the Qj portfolio was 11.5% in 1985,10.3% in 1981 and 10.8% 5 Total operating costs, summarized by the principal objec-rnparison of the present value of Pension Plan bene-tives for which the expenditures were made, are shown m 6u with carrying value of Trust assets is shown in the the table below. The table also shows selected supplemen-table below. tal details ofcertain ongoing expenses. seneret sleseric Penden Plan %,,,, m Ikccmtwr 31 Un millions) 1985 19 4 19H (In millions) 1985 1984 1983 Emplo>re com[wnsation, Present value of trnetits attritmted,to induding trnefits $10,468 $10,939 $10,500 emplo>re service to date, rcmgrunng Alaterials, supplies, services pr jectch mpensatim aalservice $11,598 $11,116 $10,6n1 and other costs 13,688 13,31I 12,476 Carrying value of Trust assets 10,924 9.706 8.590 Depreciation, depletion and Unfunded trnefit obligation $ 674 $ 1,412 $ 2.014 amortization 1,226 1,100 1,084 Itrsons rtseiving pensions Taxes, except Social Security at 3rar eixi 111.200 103.800 97,800 and those on income 247 2M 317 Irss increase in inventories The funding program and Company cost determination during the irar (279) (512) (129) for the Pension Plan use 8.0% (7.5% in 1984 and 1983) Total operating costs $25,350 $25.10? $24.248 as the estimated rate of future Trust income, except for the surriemental details: efTect of a dedicated portfolio. This fixed-income portfolio, company-funded research and consisting of securities backed by the U.S. Treasury, was development $1,069 $ 1,038 $919 dedicated in 1984 to the payment ofcertain future pension Staintenance and repairs 692 741 882 Irnefits. The carrying value of Trust assets at the end of sin $ I'$ h,$ 1985 inclu&xl $935 million for this portfolio. The 13 A% A 7 rate of return on the dedicated portfolio was a factor m determining the present value of plan benefits. The change in the estimated rate of future Trust in-A { Pensions ened etlier retiree leonefits come, the full->rar impact of the dedication, and amorti-L zation of continued favorable Trust income experience were General Electric and its consolidated affiliates sponsor a the principal causes of the 1985 reduction in grnsion number of pension plans. The costs of these plans were c sts. Pension cost as a percentage ofcompensation was 5.99 m 1985 (6.97 m 1984 and 8.19 m, 1983). $496 million in 1985,5603 million in 1981 and $613 million in 1983. e The General Electric Supplementary Pension Plan, an o General Electric Pension Plan (the " Pension Plan")is unfuqal plan pr viding supplement ry ret rement bene-empfgres m. Y ' I""8."d States, is another significant I'" P" *#"I the most significant pension plan and substantially all em-th: Umte ployees in the United States are participants. The pro-jected unit credit method, which recognizes the effect of plan. Changes in prior-service costs along with othcr gains future compensation and service of employees, is used to and lossa are amonizal ovu a [rnod of 20 years. Current determine trust funding and pension cost. Changes in pen-service c ses and am rtizari n re charged to costs cur-sion benefits alh> cable to previous service ofemployees give rently and are recorded as company liabihnes. rise to prior-service costs which are amortized over 20 . A calculation and disclosure of the present value of accu-years. Gains and losses which occur because actual experi-mulated plan benefits is required by Statement of Financial ence differs from amounts assumed are amortized over 15 Accounting Standards No. 36 (SFAS 36). The SFAS 36 years. benefit amounts shown on the following page differ from Pension Plan benefits are fun &xl through the General the data shown earlier in this note for the General Electric Electric Pension Trust (the " Trust"). The " carrying value" Pension Plan trcause the SEAS 36 amounts are based only ofinvestments is amortized cost plus recognition of appre-on compensation and service to date (i.e., they exclude the ciation in the common stock portfolio on a systematic basis which does not give undue weight to short-term market fluctuations. Investment income of the Trust, in-cluding systematic recognition ofcommon stock apprecia-39

expectal effect of future compensation and service) and o Retiree health care and life insurance benefits. General because benefits applicable to the Supplementary Plan are Electric and its aflitiates have a number of plans providing included. In addition, the table below shows the current retiree health care and life insurance benefits. The cost of value of Trust asse+s plus accruals. General Electric be-the principal U.S. plans was $71 million in 1985 atal lieves funding comparisons for the Pension Plan shown $ 138 million in 1981. A reduction in life insurance re-earlier in this note a e more realistic because the benefit serve requirements attributable to an updating of mortal-amounts include the expectal efTect of future compensa-ity assumptions was the principal cause of the decrease. tion and service, and because Trust assets are valued on a Generally, emplo>res who retire or terminate after qual-basis which reduces the impact ofshort-term market fluc-ifying fi>r optional early retirement under the General tuations. The interest rate assumptions used in determin-Electric Pension Plan are eligible to participate in retiree ing the present value of benefits are the same as discussal health care atxl life insurance benefit plans. Health care previously for the Pension Plan. benefits fi>r medical and dental expenses incurred by eligi-ble retirees under age 65 and eligible dependents are in-

• • "*'*!"**M*

"" d cluded in Company costs as covered expenses are actually ikieInher 51 lin' millions) incurred. Ibr eligible retirees and spouses over age 65, 1985 19s 1983 scheduled hospital benefits which supplement Medicare $ul"r"" nI It and scheduled prescription drug benefits are provided, atxl " "I vested benetits $ 8,761 $ 8,3;I $ 7,939 the present value of future benefits is funded or accrued by Nonmsted trrrtits 741 709 557 the Company and included in Company costs in the year Total aaumulated trnetits $ 9.508 $ 9 nto $ 8.196 the retiree becomes eligible fi>r benefits. The present value Current value of Tcust assus oflife insurance benefits for eligible retirees is funded and plus accruah $11,727 $11.695 $10,172 included in Company costs in the >rar of retirement. Most retirees outside the United States are covered by The change in the estimated tate of future Trust income in government programs. Accordingly, the Company's direct 1985 reduced the present value of total accumulated bene-cost fi>r non-U.S. retiree health care atul life insurance is fits by $.157 million. Partially ofTsetting this reduction not significant. was the impact of 1985 Plan amendments. The current value of Trust assets includes unrecognized appreciation of a $3,138 million, principally resulting from strong invest-COtller Inconee ment market perfi>rmance during the last four years. v%, o Condensed fmancial statements fbr the General Electric (In millions) 1985 1981 1985 Pension Trust, which are not consolidated with those of Net earnings of Gerrral Ela tric the Company, follow. 1:inantial servit es, Inc. $113 $329 $27I I"'"*' I'"* G m elMeeMeP M n M Marketable securities amilunk Net essets et serrent vetoe deposits 258 323 239 Daember 3 I (in mdlions) 1985 1986 198g Royalty ami enhniul agreenrnts 78 83 58 Cuuonn 6nandng 66 75 69 U.S. governnrnt obhgations ^""' Ed'"I '"*I"*'5 57 33 59 and guarantees $ 2,785 $ 2,238 $2,006 Wu insestnrna Interest 23 19 28 Coilurate lunds ami notes 1,770 1,076 1,0 47 Dividends 11 1I II Real estate and mortgages 1,660 1,976 1,31i Orher sundry itenn 101 I16 119 Gmmon stot ks and other etjuity saunties 7,5 11 5,782 5,180 $g $989 $881 13,756 11,072 9,562 Cash and short term investments 51i i 15 25(> Or her assets - not 92 1H 68 ?>^ Net assas $I1,362 $11,450 $9,886 [ "IEt#FGS9 WREl O9IBGF IIRSRCIsl CltergGS \\'"/ Change in met essets et serrent velo. lbr the >rar (in mdlions) 1985 1986 i985 Interest capitalized on major property, plant and equip-Net assets atJanuary 1 $11,350 $ 9,886 $8,410 ment and real estate development projects was $33 million Company contnbutions 431 Sog 5 t$ in 1985, $22 million in 1981 and $ 19 million in 1983. Emplopr (ontnbutions 107 101 87 investnrnt inconr I,176 931 857 Dettfits paid (197) (121) (376) Unretognized [urtion of thange in (urrent value 1,792 350 H4 Net assets at ( Atember 31 $l4,362 $l1,450 $9,886 40

gy Jueusualiteens retained properties at December 31,1984, is shown under g,/ natural resources in note 23. Natural resources operating results fbr 1984 as summarized on page 34 include reve-Unusual items include pretax gains from certain asset sales nues of $373 million and net earnings of $70 million, and pretax expense provisions for costs of several ditTerent representing total revenues and net earnings of Utah fbr types of transactions. Gains from sales of assets which the first quarter, while results for the remainder of 1984 management has determmed are not complementary to the only for 6e ppies owned subsequent to the sale. Company's future business focus were $518 milhon in The 1984 gain from the Utah transaction was $500 mil-1985, $617 million in 1984 and $ 117 milh,on m, 1983. lion befi>re taxes and after providing for future contractual Total unusual expenses aggregated $540 milhon m, 1985, obli ations' 8 $762 million in 1984 and $147 million in 1983. Details of these unusual gains and expenses follow. Pretax gains Sale of GE's small household appliance operations, both have been less than pretax charges for each of the last three domestically and abnud, to The Illack and Decker Manu-3rars. However, because ofdiffering income tax rates ap-facturing Company (Il&D) in April. Small appliance oper-plicable to the various transactions, the efTect on the Com-ations accounted fbr less than 29 of GE's consolidated pany's earnings after taxes was negligible in all three >rars. sales. This transaction did not include any of GE's other consumer products lines. GE received cash, three million o Unusua/ gains in 1985 amfefmme shares of11&D stock (one-halfof which were subsequently Sale of the 15.59 interest in Australian coal properties sold in January 1986) and approximately $50 million in a which had been retained at the time of the disposition in three-year note. GE has agreed not to sell the remaining 1984 of most of Utah International Inc. The 1985 sales B&D stock, except in certain circumstances, nor to pur-were to three buyers fbr cash amounting to $387 million chase additional B&D stock until 1987. The note was and occurred in the second and third quarters. The gain interest-free for the first year and bears interest of 97 from these three transactions vias $247 million before annually thereafter. The gain from this disposition was taxes. The contribution to GE's operating results from $28 million before taxes and after providing fbr future these interests during the p>rtion of 1985 prior to their contractual obligations. disposition was not significant. Merger of General Electric Cablevision Corporation in the Disposition of the remaining 379 ofGE's interest in the fburth quarter of 1984 into a subsidiary of Unital Artists cablevision company into which GE's fbrmer cablevision Cablesystems Corporation (Cablesystems). In this transac-operations had been merged in 1984. The 1985 transac-tion, GE received cash and 379 of the stock of Cablesys-tion was completal in December fbr a pretax gain of $ 132 tems. Cablevision operations have been minor in relation million. Payment included $43 million in cash and a non-to GE's total results. The gain on this transaction was interest-bearing note due one year from ch> sing, or earlier $89 million before taxes and after providing fbr future con-ifcertain events occur. Earnings from this investment tractual obligations. prior to disposition were an insignificant portion of GE's

• Unusua/gaint in 1983 came from the divestiture of all total 1985 results.

b one of the Company's radio and bnudcasting television Other transactions rcsulting from adjustments to previous stations ($81 million) as well as sale of the Company's unusual disposition provisions. These aggregated $ 139 minority position in Gearhart Industries ($36 million). million before taxes in 1985.

• UmuhsiwhWWW-o Unusualgains in 1984 inchalal:

Sale of most of Utah International Inc. to The Broken Hill $447 million in 1985, $636 million in 1984 and $ 147 Proprietary Company Limited (BHP) in a transaction val-million in 1983. These represent the provisions fbr ex-ued at $2.4 billion, representing the cash proceeds from penses of refocusing a wide variety of business and market-the sale as well as the value of the 15.59 interest in ing activities and reducing fbreign and domestic risk expo-several Australian coal properties which the Company re-sures. These provisions include costs of rationalizing and tained and subsequently sold in 1985. (GE also retaired improving a large number of pnxluction facilities, re-Lidd Petroleum Corp > ration, fbrmerly a wholly owned arranging production activities among a number ofexisting Utah affiliate.) GE's share of the total assets of new and plants, and reorganizing, phasing out or otherwise con-ciuding other activities no longer considered essential to the conduct of the Company's business. Special cash payment to certain emplowes in 1985 - $93 million. The payment was equal to 37 of normal straight-time annual earnings inJuly 1985 to hourly 41

union employees, in accordance with new union contracts, lease periods (as are investment tax credits usable cur-and also to certain other hourly and non-exempt salaried rently). Ibr tax purposes, they will be ofTset against taxes employees. The total payment aggregated $ 103 million payable in the future. and was reflected as an unusual expense for the quarter or e Some items are reported in Gnancial statements in dif-was capitalized in inveaory, dependmg on employees ferent years than they are included in tax returns. Deferred work assignments, with inventoried amounts recorded as expense when the m, ventories are sold. taxes are provided on these timing differences as summa-g Revaluations ofgoodwill and intangibles. In 1984, good-will and intangibles were revalued downward by $ 126 mil-N ef % en Es. W Basease taxes lion to recognize the rapid changes occurrm.g in certain Increase (decrease)in provision technology businesses. for income taxes (In millions) 1985 1981 1981 Tax over book depreciation $ 121 $ 168 $ 51 h+ Margin on installment sales 48 28 (8) V b VISIONIerItteeHBG9 Exes Provision for warranties 23 24 (5) j Provision for pensions (171) (47) 12 Other - net i15 0 02) (58) (In millions) 1985 19st 1985 3 y gg ggy9) g

=

U.S. federalincome taxes: Estimated amount payable $ 842 $1,051 $657 Other - net reflects a number ofindividual timing differ-EtTect of riming ditTerences 139 029) (5) ences, including those related to various portions of trans-Investment credit deferred - net 5 41 5 s bvolving business dispositions, restructuring ex-pense provisions and reductions of mtangibles. Fureign income taxes: Estimated amount papble 135 113 263 e Investment tax credit amounted to $llI million in EtTect of timing ditTerences (4) (85) 10 1935, compared with $ 110 million in 1984 and $72 mil-til 58 273 ljon in 1983. In 1985, $76 million was included in net Other (principally state and local carnings, compared with $69 million in 1984 and $67 ncome taxes) 45 41 45 million in 1983. At the end of 1985, the amount deferred $1,192 $1,065 $975 which will be included in net earnings in future years was All General Electric consolidated U.S. federal income tax returns have been closed through 1972. RoseneNiedea fma seawery to eheelve lesense tem reees o Provision has been made for U.S. federal income taxes to 1985 1981 1985 be paid on that portion of the undistributed earnings of U.S. federal statutory rate 46.07 46.o'4 46.07 afEliates and associated companies expected to be remitted Reduction in taxes resulting from: to the parent Company. Undistributed earnings intended Wrying tax rates ofconsolidated to be reinvested indefinitely in affiliates and associated affiliates (including DISC and FSC) 0.6) 0.8) (5.9) companies totaled $961 million at the end of 1985, inclusi n of GEIS earnings in before-tax 00 milhon at the end of 1984 and $ 1,598 million at the n,7,]; $,[ Unusual items (varying tax rates) (0.5) (2.3) (0.6) o General Electric Financial Services, Inc. (GEFS) is a income tax at capital gains race (0.2) (0.3) (0.6) nonconsolidated afEliate for financial reporting but is in-Other - net (o4) OM (o.5) cluded in General Electric's consolidated U.S. federal in-Effettive tax rate MlW 3MW 32.p come tax return. Taxes payable by the consolidated compa-nies shown in the preceding table exclude the effect of e flased on the location of the component furnishing significant tax credits and deductions of GEFS, which exxis or services, domestic income before taxes was arise primarily from leasing activities. GE and GEFS to. 53,339 million in 1985 ($3,025 million in 1984 and gether had net taxes payable for 1985 and 1984 following $2,364 million in 1983). The corresponding amounts for a net recoverable amount in 1983. Existing leases of GEFS foreign-based operations were $201 million, $331 million will generate taxable income in future years which is pro, and $669 million in each of the last three years, respec-vided for in the deferred income taxes of GEFS (see note tively. Provision for income taxes is determined on the 14). At December 31,1985 and 1984, investment tax basis of the jurisdiction imposing the tax liability. There-credit carryforwards totaling $358 million and $92 mil. fore, U.S. and foreign taxes shown previously do not com-tion, respectively, were recorded by GEFS as a partial offset pare directly with these segregations. to deferred taxes. Ibr financial reporting purposes, these carryforward amounts are amortized to earned income over 42

e- % gash==d===rkeeable seserieles m} Q,j:v, ps. e a.guiraient m W L sJ Deposits restrictal as to usage and withdrawal or usal as (in millions) i985 1981 partial compensation for short-term borrowing arrange-Major dasses at IXsemtwr 31: ments were not material. Manufacturing plant ami n;uiparnt Carrying value of marketable securities was substan-Limi and improvenrnes 8 178 $ 181 tially the same as market value at year-end 1985 and fluildings, structures ami relatal 1981. Equity securities in the portfolio were carried at a "1"' P" *"' 3 419 3 178 Mhi""Y ^*I"luienent 10,218 9,353 cost of$206 million and $56 million at December 31, I'*"I*Id '" "d "'""I"'I"8 P *"' I 1985 and 198-1, resPCCtivel}1 umler construction 906 823 Oil and gas pmperties 1,351 1,2 14 ym,, $ 16,102 $ 14,769 'A4

• derrent resolvables Cost atJanuary 1

[14,769 $ 14,806 f: ; u. Additions 2,038 2,488 b 'N / Dispositions (678) (2,509) December 3I (in millions) 1985 1981 ther changes (27) (16) Receivable from: Cost at thrember 31 $ 16,102 $ 14,769 Custonrrs $ 1,57 g $1,259 Associated compmies 11 i15 Ascennelsted f 4_:!en, f:;Y:x and easeHisation Nonconsolidated atiiliares 15 50 Others 1,ng g,373 llalante ar january I $ 7,079 $ 7,109 Cunentvar provision 1,226 1,100 6,131 5,602 Dispisitions (536) (1,163) Irss allowance for losses (9 0 g9;) Other (hanges 5 33 $6.010 $5,509 Italance at thrember 31 $ 7,774 $ 7,079 L ;i:ti, plant and : m!;- M less V::'"':, f:;!r!: and [f bl "1 [ 7 eneertinellen et Decomeber 31 $ 8,328 $ 7,690 Itteries d 1J b b) Detember 31 (in millions) 1985 1981 f EUndB IleId Ier bWsIRess dew *I*Paneset Raw materials and work in pnsess $ 3,618 $ 3,51 i Finishal giuls 1,926 1,936 kl C/ Unbilled shipments 261 217 g unds held for longer-term future business development 5,s05 5,697 are investal in a variety of securities, principally crate, less revaluation to UlO (),856) (2,027) ,d mnicipt bds and cym pfd gg LIIU value of inventories $ 3,919 $ 3.670 stocks. Estimared realizable value of these investments was methal ofinventory accounting. About 859 of total inventories is valued using the Lil:0 o Lil:0 revaluations were $ 171 million lower at year-end ! 00berinvestneents 1985 than at year-end 1981, comiured with decreases of Lj' N $125 million arxl $111 million during 1981 and 1983, Detember 31 (In millions) 1985 1981 respectively. Of the decrease m. 1985, $ 128 million was Nonconsolidated financial services afTiliates $2,311 $ 1,898 because oflower inventory levels, principally in power systems. The remainder of the 1985 reduction was due to ^""iated compmies 293 427 Miscellanmus investnwnts ut coso: net current year price decreases. In 1981, decreases arose from lower inventory levels ($ 157 million, of which $32 Gvamyrnt ami govemment-guaranteed million was related to business dispositions), partly offset g$""""' I) [ 3 by higher prices ($32 milhon). In 1983, decreases arose 502 472 from $ 132 million lower inventory levels, partly ofTset by ""bI" *'iuity -Wes 81 130 higher prices ($18 million). less allowance for losses (37) (24) $ 3,150 $2,90 3 Investments in nonconsolidated affdiates and associated companies included advances of $ 15 million at Decem-ber 31,1985 ($33 million at December 31,1981). 43

o During 1981, General Electric formed a new wholly ee.e,id aleserie Ps-a.a servlees, Inc. owned, nonconsolidated affiliate, General Electric Finan-rimensiel r % cial Services, Inc. (GEFS). GEFS includes General Electric laember 31 on millions) 1985 198 i Credit Corporation (GECC), formerly a wholly owned, rinarxing rneivaNes: nonconsolidated finance subsidiary of G E, and Employers Tine sales and loans, net ofdefernd uxome $ 11,854 $ 10,087 Reiruurance Corporation (ERC), which was acquired by Investment in 6nancing leases 7,267 5,922 GEFS on July 2,1981. The transfer of GECC to GEFS 19,121 16,0w was accounted for ay combining the assets and liabilities Allow'3"'e for lossa M92) Mo6) ofGECC with GEFS at historical cost. The GEFS acquisi. Financing receivables - net 1H,629 15,603 tion of ERC was cccounted for as a purchase. During the CaA shoudenn irnnunents and nur e secuntin normal course of business, G EFS and its affiliates have 3,h 2, minor transactions with General Electric Company and Equienrnt on operating leases - ner 1,113 1,015 certain ofits consolidated afIiliates. Virtually all pnxlucts Other mts 1,539 1, M6 financed by GECC are manufactured by companies other Total assets $25,610 $2; 121 than General Electric. GEFS is included in GE's consoli-Notes luyable: dited U.S. federal income tax return. Condensed consoli-Due within orr > var $I1,563 $ 9,331 dated financial statements for GEFS follow. long. term 4,H30 4,071 Pro forma net earnings of GEFS for the years 1981 and Reserves ofinsurance amliares 2,n18 1,971 1983, assuming acquisition of ERC had been completed Other liabilities 1,265 1,041 at the beginning ofeach of those >rars, would have been Total liabilities 19,706 16,407 about the same as amounts actually reported. Ikfened inwnr taxes 1,581 3,088 More information about GECC is available in its an-Ikferred investment tax credas 51 52 nual report, which may be obtained from General Electric Capital stock i 1 Credit Corporation, P.O. Box 8300, Stamford, Conn. Additional guid.in capital 1,152 1,152 06904. Complete GEFS financial statements are in GE's Retainal carnings 1,139 726 Ibrm 10-K (see page 59 for availability). Unrealimi gain doss) on securities held by insurarxe a$liates 1o (5) Someral alestrie Finensiel servlees, Inc. Equity 2,302 1,874 Corrent and retained - Total haMeies, defuW cax items and njuity $25,Mo $_21,421 Ibr the >rar (In millions) 1985 1984 1985 Eanrd income $3,805 $2,9 H $ 1,919 o Miscellaneous investments had an estimated realizable Expenses: value about the same as cost at year-end 1985 and 1984. Interest and dmount 1,339 1,123 H56 Operating and administrative 978 763 571 e Marketable equity securities are carried at cost. Aggre-Losses and poligholder benefas of gate market value of marketable equity securities was insurance amliates 876 583 92 $209 million and $267 million at year-end 1985 and 17 1984, respectively. At December 31,1985, gross unreal-185 109 109 e - other assets 3 1 1 ized gams n marketable equity securities were $ 137 mil-1,581 2,579 1,629 Hon aW gmss unreaM hses were O mWion. Earnings before income taxes 421 351 320 Provision for income taxes (II) (25) (19) P TQ Net c.inings 413 329 27I I N essets ]' y "_ ;) Irss dividends (2:7) Retairusi carnings atJanuary 1 72(> 397 3H Tem 31 do mEons) 1985 [984 Retained earnings at thember 31 $1,139 $ 726 $ 197 long-term receivables $ 549 3 586 Recoverable engirnring costs on governnent contracts 422 349 Real estate developnrnt projnis 1HI 159 Ikferred durgn 124 131 G=x!will ll7 145 lacenses arul other intangibles 105 107 Customer 6nancing 94 [00 IAferred income taxes 128 Other 90 66 $ 1,682 $ 1,771 Deferred income tax credits of $35 million are included in ocher liabilities in 1985. 41

pp p (y f Short-terne borrowings [Other. costs and expenses escreed DW .X Decemtwr 31 (In millions) 1985 ivai The balances at year-end 1985 and 1984 included com-Avenge Awnge pensation and bene 6t costs accrued of $756 million and $769 million, respectively. are at are at Anmunt Ih. 31 Amount Dec. il Gerrra! Electric Company: F7 'N

• 'r Notes with trust
• W -##rneborr* win 9s departments

$ 301 7.59 $ 291 8.07 Comnrrcial paper 50 7.9 "J h Consolidated affiliare Outstanding Due p rm lunk turrowings 601 31.6 565 30.3 Decemtwr 31 (In millions) 1985 1936 date perion Other, includmg current Gerrral Electric Company; portion oflong-term 5%9 Notes $ 32 $ 38 1991 1972-90 borrowings M2 191 5.309 Delwntures 31 31 1992 1973-91 3 g y97 3 gg7 7%9 Iktrntures 95 1996 1977-95 8%7 Ikbentures 217 217 20n1 1985-03 o Other borrowings at December 31,1985, m.cluded Imlustrial Dmlopnrnt $ 170 million of repurchase agreements. Tiese agreements lionds 251 152 various represented a loan by GE of U.S. Treasury Notes (classified Gerrral Elettric Overseas as current marketable securities of $ 162 million) in connec. Capital Corporation: 4%9 Iktrntures Ii 29 1987 None tion with the borrowings. Other borrowings also included amounts from nonconsolidated affiliates of $89 million at 5 h 4 S'h"8/U"ll December 31,1985 ($78 million at December 31,1o84). ["janteed taun 2 2 1993 None o The average balance of short-term borrowings, exclud. All mher 205 186 $753 3754 ing the current portion oflong-term borrowings, was $ 1,391 million in 1985 (calculated by averaging month-end balances for the year), compared with an averagr bal. e The Company's obligation for the 7 %7 Debentures due ance of $883 million in 1984. The maximum balances in in 1996 was extinguished in 1985 by placing certain U.S. these calculations were $ 1,813 million and $ 1,046 mil-government obligations in an irrevocable trust dedicated lion at the end of September 1985 and March 1984, re. solely to payment of principal and intexst on the deben-spectively. The average worldwide effective interest rate tures. The gain from this transaction was immaterial. for the par 1985 was 157 and for 1984 was 207. These e Borrowings of General Electric Overseas Capital average rates represent total short-term interest incurred Corporation (GEOCC) are unconditionally guaranteed by divided by the average balance outstanding. General Electric as to payment of principal, premium (if o Although the total unused credit available to the Com. any) and interest. Bor rowings included 5 %% Sterling / pany through banks and commercial credit markets is not Dollar Guaranteed Inan Stock due in 1993 in the amount readily quantifiable, confirmed credit lines of approxi. of f I million ($2 million), convertible into GE common mately $ 1 billion had been extended by about 60 banks at stock at $36.75 a share. Requirements for the maximum year-end 1985. Substantially all of these lines are available number of shares for GEOCC convertible debt (422,000 for use by GECC and General Electric Financial Services, shares at December 31,1985) may be met either from Inc. in addition to their own credit lines. unissued shares or from shares in treasury.

• All other long-term borrowings include a variety of L 17 tmrrowings by affiliates and parent components with various t Aseeents payable interest rates and maturities. Amounts due to nonconsoli-a.4 dated affiliates were $6 million at the end of 1985 and 1984.

December 31 (In millions) 1985 1986 e long-term borrowing maturities during the next five Trade accounts $1,757 $ 1,611 years, including the portion classified as current, are $75 Collected for the account ofothers 180 179 million in 1986, $103 million in 1987, $32 million in Due to nonconsolidated affiliates 267 108 1988, $80 million in 1989 and $57 million in 1990. $2,2nt $1,951 These amounts are after deducting debentures which have been reacquired for sinking-fund needs. 45

7 3 gy c.:a m s , Niere surners' eegelty rial, of translating their 6nancial statements is included in tCa N ; x current-yeu earnings. Ilowever, for a few amliates the I"" ""*ncy is mhu 6an the U.S. dollar, and the Preferred stock up to 2,000,000 shares ($ 1.00 par value) 'ff'"S of nancial statement translation are included as a is authorized, but no such shares have been issued. Com-reduction m other capital. Amounts for 1985 mclude the mon stock (par value $ 1.25) shares authon. zed total hive effect (a reduction of $41 million) at January, 1 550,00(),00() 1985, for a change in the functional currency of a Neth-shores of seanneen speek erlands afEliate from the U.S. dollar to the Dutch guilder. Iktember 31 (in thousands) 1985 1986 1985 IssuedJanuary 1 462,928 462,928 462,928 [3Q Adjustment for lxoling ofinterests n1 gggggy gggglg.related infersnetlen issued December 31 463,282 462,928 462,928 Cjd in treasury (7,306) (8,052) (8,297) Outstanding 455,976 451,876 451.631 Stock option plans, appreciation rights and performance units are descrilxxl in the Company's current Proxy State-shore weers' egehY ment. Requirements for stock option shares may be met (in millions) 1985 1986 1981 within certain restrictions either from unissued or treasury commen seeck leseed shares. During 1985, options were granted to 902 em-BalanceJanuary I and tArember 31 $ 579 $ 579 $ 579 plo3res. As of Decemixr 31,1985, approximately 529 ether sephet individuals we e eligible to receive options and 1,258 per-BalanceJanuary I $ 610 $ 657 $ 676 sons held options exercisable then or in the future. Ibreign currency translation cljustments (18) (10) (16) stesk opflen lefe=nestion Unrealized gains (losses) on securities Average per sture held by insurance affiliares 15 (5) Stures subiett Option Market Gain doss)on treasury mx k (Shares in thousarxis) to opt on price prite dispositions 4 (2) (3) llalance at January 1,1985 9,131 $ 37.08 $56.63 Balance Dosember 31 $ 611 $ 640 $ 657 Options granted 1,805 65.70 65.70 Retelned s- ' ;;: Options exercised (1,176) 31.06 62.58 !!alancejanuary I $ 11,667 $ 10,317 $ 9,115 Options surrendered on exerase Net earnings 2,336 2,280 2,021 of appreciation rights (439) 31.25 61.27 Dividends dalared (1,020) (930) (852) Options terminated (112) 53.30 Adjustment for pooling ofinterests iI Balance at IAxemirr 31,1985 9,179 19.3 1 72.75 Balante IXtember 31 $ 12.99 i $ I 1,667 $10,317 comensen steek beld la treesery Outstanding options and rights expire, atxl the award pe-ItalanceJanuary I $ 313 $ 283 $ 202 riod for outstanding performance units ends, on various Purchases 283 281 319 dates fromJanuary 1,1986, to December 20,1995. The Disn>sitions: number of shares available for granting additional options Emplo)re savings plans (l13) (133) (101) at the etxl of 1985 was 12,111,642 (13,796,147 at the Scot k options and appreoarion end of 1984). Em )tr stock ownership plan 1 7 2 s dsud b inanth mmFn-I" "*" 8 s Dividend Reinvestment and 8df U" E'#US "5 '5".tixil in the Company s Proxy State-Slure Purchase Plan (29) (26) (15) ment may be met within certain restrictions either from Exdunge for GE long-term debt (20) (18) unissued shares or from shares in treasury. Conversion of GEOCC long-term As of December 31,1985, approximately 4,297 indi-debt (25) (11) (19) viduals were eligib!c to receive allotments under incentive Contribution to GE Itnsion compensation plan rules. Allotments were made for serv-Tmst (22) ices retxlered during 1985 to 3,621 employees. Ilusiness aquisitions (8) (2) Incentive wmpensation plans 10 20 H) ,x m ~ to $ 313 $ 283 6' I b 'zi Balance IAtember 31 3 Comumlineents and sentingent IIelellities in December 1985, GE issued 354 thousand new shares of C -]E U stock having a value of $24 million for an acquisition Commitments, other than those related to the proposed accounted for as a pooling ofinterests. Ilecause the acquisi-acquisition of RCA (see note 2), and contingent liabilities, tion was insigni6 cant to GE's operations arxl Snancial con-consisting ofguarantees, pending litigation, taxes and dicion, prior years have not been restated. other claims, in the opinion of the management, are not Ilusiness activities of most foreign af61iates are mainly considered to be material in relation to the Company's based on the U.S. dollar, and the effect, which is not mate-Gnancial nsition. i 46

~ L ._,, a ~ hadW segument deteMs Cl R.4 Revenua and net earnings by industry segment for each of Segments on page 34 of this Report, Additional detail is the last five pars are included in the Summary ofIndustry shown in the tables below. heermal sales and eelwe

1 x y sales opereeing preme incesne (In millions) li)r the years ended Ikrember 3 I liur the >rars ended IXxember 31 li>r the 3rars ended IXxember 31 1985 1984 1983 1985 1981 1981 1985 1984 198i Ginsumer pnducts

$ 3,452 $ 3,732 $ 3,650 $ 117 $ 126 $ 91 $ 392 $ 407 $ 310 htapr apphances 3,617 3,650 3,078 467 462 383 Industrial 4,001 3,9 0 3,880 567 339 318 327 201 190 Pbwer systems 5,373 5,797 5,686 179 213 192 792 789 709 Aircraft engines 4,625 3,731 3,4 % 87 101 60 676 510 403 hiaterials 2,347 2,I17 I,964 112 121 96 466 470 329 hhnical products ami servites 4,994 1.578 3,759 203 225 61 525 495 385 Enancial sermes 199 4 18 397 420 355 306 Natural resources 609 1,579 192 479 Total segment operating protir 4,065 3,881 3,491 Interest and tinarxial tharges (360) (333) (370) Unusual items (22) (145) (30) G>rp rare items and eliminations 461 H9 253 (1,265) (1,141) (851) (114) ( 47) (61) 'Ibral $29,272 $28,9 46 $27,681 $ 1,540 $ 3, M6 $ 4,0 H In general, it is GE policy to price internal tales as nearly to agencies of the U.S. government, the Company's largest as practical to equivalent commercial selling prices. single customer. Most of these sales were aerospace and Slightly more than one-fifth ofexternal sales in 1985 were aircraft engine products and services, Assees .,, piene and : m *, -- M (In millions) At IXsemixr 31 li>r the Stars ended IAtemler 3 I IApreciation,(kpletion Additions and amortization 1985 1981 1983 1985 1941 1981 1985 1981 1981 Gmumer produc ts $ 2,287 $ 2,4 40 $ 2,271 $ 179 $ 269 $ 222 $ 129 $ l11 $ 119 hlajor appliantes 1,401 1,37o 1,0 40 116 111 80 78 75 68 Industrial 2,652 2,670 2,569 201 261 228 1(33 151 158 Pbwer systems 3,151 3,689 4.2 42 116 211 252 166 179 173 Ain raft engines 1,950 3,317 2,523 333 356 218 161 136 129 hlaterials 3,876 1,096 2,605 619 772 412 211 207 203 khnnal products and services 2.777 2,778 2,052 289 310 216 236 166 121 Enarnial servw es 2.7 18 2,312 1,929 Naturai resources 256 2,007 11 61 11 67 Geprate items and ehmmaruins 4.287 2.908 3,058 92 119 99 49 il 45 Total $26,132 $21,7 50 $2 4,288 $ 2,018 $2.488 $ 1,721 $ 1,226 $1,100 $ 1,041 o Net earnings for industry segments on page 34 include Minority interest is allocatal to operating components allocation of corporate financing income and expense to responsible for investments in consolidated afliliates. parent Company components basal on change in individ-Minor adjustments were made to industry segment clas-ual comp >nent average non-fixal investment. AfTdiatal sifications in 1985. Ceramics operations, formerly in-companies servicing their own debt record interest and cluded as part of the consumer products segment, are now financial charges directly. classifial with materials. Ladd Petroleum Corp > ration, General corporate expenses are allocated principally on formerly part of natural resources, is also classified with the basis of cost of operations, with exceptions which rec-materials. Australian coal interests that remained after the ognize the varying degrees to which certain affiliated com-sale of most of Utah International in 1984 were disposed panies maintain thr.ir own corporate structures, ofin 1985 (see note 7) and their nominal operating results I rovision for income taxes is alkrated on the basis of for 1985 are inclu&xl in corporate items. Operating re-total corporate effective tax rate, except for financial serv-suits for prior years have not been restatal for these ice <, natural resources and unusual transactions, whose changes because of their immaterial efTect. Ilowever, in incame taxes are calculatal separately. order to presant more comparable data, total assets and 47

property, plant and equipment information for 1984 and controls but also include larger sizes of motors fi>r a broad 1983 have tren revised to include ceramics and Ladd range ofindustrial users. hiotor pnxlucts are usal within Petroleum Corporation in the materials segment rather GE and are also sold externally. Electrical construction than in the segments to which they fi>rmerly were equipment focuses on electrical distribution and circuit assigned. protection equipment needed fi>r installation in commer-A summary description ofeach of the industry seg-cial, industrial and residential buildings. General Electric ments fi>r 1985 fc.' lows. Supply Company Division operates a nationwide network o Consenser products consists oflighting products, of electrical supply houses. Transportation systems include video and audio products, batteries, mobile commumc - diesel-electric and electric h>comotives, transit propulsion equipment, motorized whec!s fi>r oft-highway vehicles, tions equipment and KCNC-TV (Denver). Lighting pnxi. such as those used in mining operations, and drilling ucts mclude a wide variety oflamps: mcandescent, fluores' drives. locomotives are sold principally ro domestic and cent, photo, miniature, high-intensity and specialty. Alarkets and customers are extremely varial, rangmg from fi> reign railroads, while markets fi>r other pnxlucts include state and urban transit authorities and industrial users. houseFold users sermi through retail outlets to ongmal equip nent manufacturers, such as the automotive indus-Power systones serves worldwide utility, industrial try. Video and audio pnxiucts include television receivers, and governmental customers with paducts fi>r the genera-videocassette recorders, radios, tape recorders, citizens tion, transm.ssion and distribution ofelectricity, indus-band radios and household telephone pnxiucts, all of trial drives, and related construction, installation, engi-which are distributal principally to tetail outlets. Batter-neering and repair services. Steam turbine-generators are ies are principally the nickel-cadmium and sealed-lead sold to the electric utility industry, to the U.S. Navy and, rechargeable type sold to manufacturers and tbrough con-fi>r cogeneration, to private industrial customers. hlarine sunwr retail channels. 51obile communications pnxiucts steam turbines and propulsion gears are also sold to the consist mainly ofland-basal F51 two-way and one-way U.S. Navy. Gas turbines are used principally as packaged radio equipment and cellular telephones fi>r a variety of power plants fi>r electric utilities and fi>r industrial cogen-customers. This segment also included bmadcasting, eration and mechanical drive applications. Centrifugal cablevision and household appliance operations through compressors are sold ti>r application in gas reinjection, the dates of their dispositions (see note 7). pipeline service and such process applications as refineries anunon a plants. udm pu t ns hm bme in-an o Meier appliances includes both General Electric ""'"F Y "I'"'"I "'" 'J I#"' 5"PP" 5*I5 ""J I"#I I P and Hotpoint brands of kitchen and laundry equipment, c nsi a % n dmted m boiling-assem es w e such as refrigerators, ranges, microwave ovens, freezers, dishwashers, clothes washers and dryers, and nx>m air con-watu-type imu mactors, inasmugh as there have been no dicioners. A major portion of niajor appliance sales is to a new nucim plant rders m the Umtal States since the variety of retail outlets. The other principal market con-mal-1970s and crivity in international m rkets remains sists of residential building contractors who install major rmxlest. Power dehvery pnxiucts mclude transformers, re-appliances in new dwellings. lays, elatnc h>ad management systems, power conversion systems and meters, principally fi>r electric utihties. Con-o Industrialincludes factory automation pnxlucts, struction and engineering services include management semiconductors, motors, electrical ajuipment for indus-and technical expertise for large projects, such as transmis-trial and commercial construction, General Electric Supply sion lines; maintenance, inspection, repair and rebuilding Company Division and transportation systems. Customers ofelectrical apparatus pnxiuced by GE and others; on-site for industrial systems generally include industrial distrib-enginaring and upgrading of already instalkxi products utors, original equipment manufacturers and industrial sold by GE and others; and environmental systems fi>r end users. Factory automation pnxiucts cover a broad utilities. range of electrical and electronic pnxiucts, including drive systems, with increasing emphasis on factory and ad-vancal engineering automation applications. Semiconduc-tor operations provide the latest in semiconductor technol-ogies to other GE operations as well as to external customers. An afliliate (Intersil) is a supplier of advanced integratal circuits and data acquisition pnxlucts to the merchant market as well as a source ofintegratal circuits for GE's diversified pnxiuct lines. hiotors and motor-relatal pnxtucts consist mainly of appliance metors and 1 M

o Aircraft engines and replacement parts are manu-o Financial servlees includes a nonconsolidated affil-factural and sold by GE for use in military and commer-iate, General Electric Financial Services, Inc. (GEFS), and cial aircraft, and also in naval ships and as industrial power its two wholly ownal affiliates, General Electric Credit sources. General Electric's military engines are used in a Corporation (GECC) and Employers Reinsurance Corpora-wide variety of aircraft that includes fighters, bombers, tion (ERC). See note 14 for more information about these transports and helicopters. CF6 engines are used in the entities. GECC primarily engages directly or through allil-McDonnell Douglas DC-10, the Airbus Industrie A300 iates in distribution sales financing, commercial and indus-and the Boeing 747. More advanced CF6 engine models trial financing and real estate financing. Strong emphasis have been selectal to power the Boeing 767 and the on leasing has been a major factor in GECC's growth in Airbus Industrie A310 and A300-600. Ofgrowing im-recent years. ERC is a major participant in the property / portance is the CFM56 engine family pnx!ucal by the casualty reinsurance business in the Unital States. Other joint company of General Electric and SNECM A of financial services activities include two consolidated aflili-France. Applications include the Boeing 737-300, the re-ates: General Electric Venture Capital Corporation pro-engined McDonnell Douglas IX'-8 Super 70s and the re-vides venture capital, primarily to new or existing high-engined Boeing KC-135 military tanker. An advanced en-technology companies; and General Electric Real Estate gine model is used for the Airbus Industrie A320. GE also Credit Corporation is an equity investor in selected real paxiuces jet engines for executive aircraft and regional estate development pmjects. commuter airlines. e Natural resources through the first quarter of 1984 o Meterials includes high-performance engineeral consisted of Utah International Inc. See note 7 for infor-plastics, silicones, industrial cutting materials, laminates marion pertaining to dispositions of this aflitiate and ear-and ceramics which are sold to a diverse customer tuse lier discussion in this note almut 1985 industry segnrnt (mainly manufacturers)in the Unital States and abroad. adjustments. Materials also includes ladd Petroleum Corporation, an od and natural gas developer and supplier with operations mainly in the United States. o Technical products and services consists of tech-nology operations providing products, systems and serv-ices to a variety of custonwrs. Aerospace pnxlucts span space sciences, electronics and microelectronics, oninance systems, avionics, computer software, and simulation and control systems. Most acn> space sales are to the U.S. gov-ernment. Medical systems include the new magnetic reso-nance (M R) scanner, computal tomography (CT) scanners, X-ray, nuclear malicine, ultrasound, and other diagnostic equipment and supporting sersices sold to domestic and fi> reign hospitals and medical facilities. Information serv-ices are provided both to internal and external customers by General Electric Information Services Company. These in-clude enhancal computer-based communications services, such as data network services, electronic mail, electronic data interchange and automated clearinghouse services, which are o:Teral to commercial and industrial customers through a worldwide network. Other infi>rmation services i include application software packages, and con ract sys-tems design and programming services. Calma Company j designs, manufactures and sells interactive graphics sys-J rems fi>r computeroided design and manufacturing. e

-e g eq "hi.ti g qn Revenues (in millions) li>r the >vars en&d IAremtwr 31 Total revenues Inters (gn ent sales External sales and other income 1985 1986 198i 1985 1984 1983 1985 1984 198i United Staces $26,831 $25,968 $23,513 $ 67I $ 680 $ 590 $26,160 $25,288 $22,923 Far East includmg Australia 1,0 17 1,603 410 430 577 1,173 Other areas of the world 3,650 3,330 3,826 538 259 241 3,112 3,071 3,585 Intracompany eliminations (I,209) (1,379) (1,261) (1,209) (1,379) (1,261) Total $29,272 $28,936 $27,681 $29,272 $28,93(> $27,681 Net :_ '_ _ g Assets li>r the >rars ended December 31 At December 31 1985 1981 198i 1985 1984 198i United States $2,229 $2,06I $I,667 $22.733 $20,880 $ 18,105 Far East including Australia 150 278 681 1,458 Otbr areas of the world 101 59 80 3,809 3,290 3,861 Intracomguny eliminations 6 10 (1) (110) (121) (139) Total $2, P 6 $2,280 $2,024 $26,412 $21,710 $21,288 Geographic segment information (including alhxatie of spectively. On a comparable basis, the amounts were income taxes and minority interest in earnings of consoli- $2,271 million, $ 118 million and $ 1,582 million, re-dated affiliates) is based on the h> cation of the operation spectively, at December 31, l')84; and $2,818 million, furnishing goods or services. U.S. revenues include ex,rmrts $ 168 million and $2,336 million, respectively, at Decem-to external customers, and royalty and licensing income ber 31,1983. from foreign sources. Commencing in 1985, data for Far East includin Ud***'******'*"*" areas of the w'g Australia have been combined with other II" " " " " ' ' orld. In prior years, operations of Utah International, GE's former affiliate, had been the most 9*5 1981 1981 significant contributor to Far Ea>t including Australia. I:uroir $ 1,215 $ 950 $ 1,191 Revenues, net earnings and assets associated with I'ao6c lusin 965 1,125 1,n15 foreign operations are shown in the tables above. At ^""i'as 502 603 618 WJie Eau and Africa $33 437 619 December 31,1985, foreign operation liabilities, minor-Other areas Iu 110 136 ity interest in equity atKl GE interest in equity were Total $ 4, H9 $1,2n $ 1,6 W $2,190 million, $ 116 million and $ 1,503 million, re-50

(M I"33 C} EHeat,ef clienging prices (oneedited) MJ In the " adjusted for" column in the table at right, restate-g,, 4 ments are made to cost ofgoods sold for the current cost of Iur the par ended December 31,1985 replacing inventories and depreciation for the current cost As AdWsted for of plant and equipment. GE's 1979 and 1980 Annual (In millions) reported current costs (a) Reports included technical information about methodol-g,, g goc,,,g s,,y;ces,, ogy used in preparing these data and may be obtamed customers $28,285 $28,285 from Corporate Investor Communications at the address on page 59. ,a dgoas sold 19,775 19,907 selling, gerrral and Restatements of cost ofgoods sold are relatively small administrative expense 4,349 4,349 because of GE's extensive use of LIFO inventory account-Depreciation, depletion and ing and the relatively low rate ofintiation in 1985. How-amortiur,on 1,226 1,476 ever, restatements of depreciation expense to current levels operating costs 25,350 25,732 are relatively large, reflecting the cumulative efTect of price Operating margin 2,935 2,553 increases over a number of years since the assets were Other income 987 987 acquirtd. Interest and other financial Trends in these adjusted data over time, excluding unu- 'harges 060) 060) sual items, may be at least as useful in understanding Earnings before unusual items 3,562 3,180 intlation's impact as are the data for a single war. The table Unusual items (22) (22) below presents selected data adjusted for inflation for the Eamings bdore income taxes 3,540 3,158 pt five years. Provision for income taxes (1,192) (1,192) Minority interest (12) (9) Net earnings $ 2,436 $ 1,957 Earnings per share (in dollars) $ 5.I3 $ 4.30 Share owners' equity at December 31 $ 13,901 $ 16,855 (a) In dollars of average 1985 purthasing power. Selected Heseseciel date edlested for flee effect of f ,*-, prises les donors of everage1985m ? " ; power (Dollar amounts in millions; per-share amounts in dollars) 1985 1984 1983 1982 1981 Sales of products and services to customers $28,283 $28,945 $28,947 $29,512 $32,221 Current cost information Net earnings before unusual items (a) 1,957 1,964 1,666 1,314 1,377 Net earnings per share before unusual items (a) 4.30 4.33 3.67 2.90 3.02 Share ow ners' equity at December 31 16,855 16,337 16,616 16,597 16,661 Excess of increase in general price level over increases in sps-ific GE price levels (b) 377 567 614 605 832 Other Purchasing power loss on net monetary items 101 116 87 54 99 Disidends per share 2.23 2.12 2.03 1.86 1.85 Market prite gr share at Detemter 31 72 58 62 53 32 Average Consurner Prue Index (cpl.U; 1967 = 100) 322.2 311.I 298.4 289.I 272.4 (a) Unusual items atftved t urrent mst aarnings in 198 i only. Net earnings and rre carnmgs per share includmg unusual items in 1941 were $ 1J25 milhon and $2.92, respettnely.15) At Dtsember 31,1985, in end44-p-ar dollars, th6 surrent cost of mventory was $5,812 million and of property, plant ark! equipment wa $9,702 milleon. In dollars of average 1985 purthaung power, the increase that might have been expcxred from gerrral inflation was more than the increase in sp2sific GE (um nt costs by the amount shtm n. A simdar pattern is shtmn in the other pars. 51

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Boardof Directors, m a _____~m_m~.m..._.._ _.... m .o. .--_w_..._.__. General Electric's Board of Directors, pictured alphabeti-cally on the preceding pages, conducted 1I meetings in Cossesseittees of flee Boeral 1983. a%

c dn At the November meeting, the lloard increased the Rkhard T Baker, llenryI lidinun, quarterly dividend from 55 cents to 58 cents per share.

Chairnun Chairnun In addition to regular meetings, Directors participated $'"*a,'[ [y'i i,,, law j j dy, on the following committees that aid the Board in its Barbara Smrt Preiskel Jamn G. Ibswell 11 duties. itwis T. Preston Sdas S. Cathcan $,"7 pn,,"o The Audit Committa, which met five times, reviewed n c dn the activities and independence of the Company's inde. James G. Ibswell !!, Andrew C. Sigler pendent public accountants and the activities of GE's in' Joh)Eh,Jr., PuMis st _ _i _ ternal audit staff. It also reviewed the Company's internal vie auimun c dn. fmancial controls and compliance with key Company poli. Charin D. Dkkey, Jr. llenry 11. llenley,Jr., cies, including those related to the defense procurement Ii'"'*'k't "' ' J Ch rm g b nl e M area. This committee includes only Directors from outside Frank II.T. Rhmics Vke Chairnun the Company. Walter B. Wriston Rkhard T. Baker eE suraku N'"*i The Finance Committu examined the Company's rinan-cial position, its pension funding and trust operations, its Dev M X^*ad Genrude G. Mkhelson C Barbara Smet Preiskel foreign investments, the operations of General Electric h --- Andrew C. Sigler Financial Services, Inc., and other matters involving large-waiter B. wriston, scale utilization of Company funds, it met four times. auirman mes i.sy d Saas S an c Tbe Alanagement Detdopment and Compensation Committa ttge e y ey,,,. met 10 times. It reviewed the Company's exempt salary itenry L 11ainun ouimun structure and executive compensation programs and ap-Genrude G. Mkl.-Ison Edward E. Ilixx1,Jr., proved changes in GE's management. n;- - a dn yj'o i,'"^i ii U"" c The Nominating Committa held three meetings at which aurles D. Dukey,Jr., aurles D. Dkkey,Jr. it reviewed candidates for the Board and recommended the U"i""^" lienry L liillman l committee structure and membership for the following NeNII'iicn cy,Jr. Robert E. Mercer l year. Gertrude G. Michelson The Operations Committa held five meetings, including y'j5IPrat l C joint meetings with the Audit, Finance and Technology { l } and Science committees. Among its activities were reviews i of the aerospace business and the factory automation business. The Public Responsibilities Committa, at its two meetings, l reviewed the activities of the General Electric Ibundations i and evaluated public issues that could have a major impact i on tl e Co n;,any. The 7ithaology andScience Committa held two meetings, both joint sessions with the Operations Committee. Its review of the major appliace business included an inspec-tion of new manufacturing technologies in operation in Kentucky and Tennessee. l l N

. wowns.- re a.ek 4% v&wakuiw . A, mm.a -m'w& m.em&LMmda in m rb mm + a.-rw r -.e..p m 'w ms %es w.%s y n t e.e n t. 'mv. n em.m a-.w--e Cseporate Executive Officers Jehe F. W.lch, Jr. Lawr.ne.A.s.s. lay sa ord s. u d, Jr. PeelW. von ordem Cluirman f the Ikurd and Vic Chairman of the Ikard and Vke Chairman of the ikurd and Gwpware Executive Othte Chef Executive OtTxer Executise Of fxer Executive Othter Exeturive Vxe President David C. Genever WetIIng Charles V.Sheehen Gwprare Executive OtTxe G>rprare Executive Otlice Vke President Yke Prnident 4 3i -J l Scnior Corporate Officers ~.,..- y 4 ..,. }W I ~.. 9 },l f ' ' q_l' t l . ~. i l kin l. ..J ^.? l; k 3) 9.,y'

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I y..;r "; y Dommis D. Demunerisse Freak P. Doyle Jack O.PelHer Senior Vice President-Finance Senkw Vice President Senior Vke President Grprare Finance Staff Grprate R(lations Staff Executive Management Staff .e x... ..,r_ ...,/-. 8 V. sL ny .y. ' .e 'M ~- - ~ .'i. b, g, y.. y @lM & '_ _ '.;. '- 0. n U .: Y m s.-, Walter A.Schletterbeek Relend W.Sekanitt Senior Vke President-Senior Vke President Gerrral G>unsel and Set retary Corp > rate Researth and Grpware Irgal Statr Development Ctrporate Staff Officers M2chael A. Carpenter Fred W. Gerry Arther V. Pecclei R. Howard Annie, Jr. VP-Grpware liusiness VP-Gwpware Engiratring VP-Gwnware Emplo>re VP-Western Regkmal Relations Ibefornent and Planning and Manufacturing P. clarions Merk J. D'Arsengelo Thenees R. Casey, M.D. Joseph Hendres udward J.Skike VP-Nortlxastern Regional VP & Gimpany Medica: Dirtstor VP & Deputy General G>unsel VP-Gwprate Information Relatiims Jameos J. Cow 6 ells Joyce "as ;- * --- N""" WIIIIeen C. Lester VP & Comptroller VP-Gwnware Public Relations W. Roger Strolew VP-East Central Regional Dele F. Frey Stendley M. Hoch VP-Gwprate Envininmental Relations Chairman of the Ikurd VP & Treasurer "8 '*"" and President Iver J. Petersen Gerrral Eintric Investment PhMIps S. Peter Leonard Vickers VP-Central Rephmal Relarions Gepeation \\,P-Grp> rare Governnrnt VP-Gwpware Marketing Relarmns 55 1 l ,d-

l _ (As c4 February 14,1986). m

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re. .ir.r t E ee. Ceentries I Rodger t. ForreN Jelin D. Ople VP & General Manager VP & General Manager Andeasi Countries Dnision Gmstrut tion Equipmi rit Operations 7' # %' N Devid M. Engelsnee { N#. Gmstruction Equipment Sales VP & General Manager [/ Dealel W. "" T - f "- Celete Centpeny Division f Lewis V.TeaseseMI Brien H. Rowe President Senior VP & Group Executive Senior VP & Group Exetutive Calma Company Aenspue Group Aircraft Engine Group Censunter Electronics Niclieles Bereski WIIRene J.Crawford all VP & General Manager VP-Government Relations Jocagues A.Reislesen Ordnance Sprems Dniskm and Special Business Projetts g g YP & General M.uuger Consumer Electronics Operati(ms Cossell L. Nell, Jr. Rolsert D. Desreeleers Latin Anterican GE VP & General Manager VP-Finante Asionic and Electrtmic Robert C. Hawkins WINiese R. C. BleM Sprems Dnisam Clairman of the Board and VP & General Manager ARen J. Roseeberg Lynn Aircraft Engine Pnduct Chief Executive Of6cer Corporatelheding VP & General Manager Operations Canadian General Electric Operations Company Limited Spac Systerns Division hk E. PickW Ladislows W. Worsed.e VP & General Manager Robert T. E. GINespie VP & General Manager Lynn Pnduttion Division Executive Vice President Defense Systems Division C. Stonedpine, Jorgen F. NIHke VP & General Manager Chairman of the Board and Evendale Aircraft Engine Chief Executive Of6cer Pndutt Operations General Electric do Brasil S. A. Edward C. Severle PeelH.Way VP & General Man.ger Chairman of the board and Airline Marketing Division Chief Executive Offner General Electric de Mexico, S A. Lee Koper de C.V. Jeunes R. Birle VP & General Manager Senior Vice President Commercial Engine Pn>icits Corporate Trading Operat:ans Dnision W. George KreN VP & General Manager VP & General Manager General Electric Supply Evendale Pndutrion Division Company Division Freacis J. Selvi1II"9 Bruce O. Roberts VP-Technical Support VP-Corporate Sourcing Robert J. Sasoland VP & Gerv ral Manager Marine and Industrial Eng.acs ) and Sers ke Division George H. Word VP & General Manager Military Engine Pniects Division 56

a.fp-y- .~ = I m c" 4 a ^ n .m l A Engineered GeneralElectric International k Meterials FinancialServices Operations Major Appliance 9 i ] w p

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s [ 7 ^ VP & Gerx ral Manager a' .N o = J International Operations . j ?./(fi s' ?.. E a-e,p { j \\ g g .w1 ~ aj +. [ U Qff _H_ Petreleven 6.~ +-4 'Vr 'W n" 'Y'- h!h.'"',) ~ M Jelen H. Meere Charles R. Corsen Robert C.Wrigist President Roger W.Seb3phe P Senior VP & Gniup Exautne President aral laid Petroleum Gspiration Senior VP & Group Exec utive Enguxrred Materials Gniup Chief Exetutive Offker hfajor ApphanceGroup Theeses H. Fitzgerelal Gennal get tric Finant W Kn k n. ,y,g,,,,, g,,,,g, ibsion i vu n ts hiaj r p Ian Pn tion Lee A. HeNeren B.Igleting Division Senior VP-l'inante Bruce A. Enslers I Gary C. Wendt Exet urne Yue Presid( nr VP & General Manager ./ - - Factory f utegetation GECC hnarxing operations hs/. Maior Appharxe Marketing f Division ? Mielseel S. Blene f j .. ;L ) Stephen J. O'Belen U Merlen S. Riclearelsen Senior VP & General Manager 1 _., I VP A Gerx-ral Manager GECC Real Estate hnancial

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/ j ( iJ VP & General Manager A y Major Appliarne Sales and C Fattory Automation Pndutts Sen n n Dnision ,.e.,, .m~ c, i Service Division Dn ision m haL. M 8.$.'.N '.. ? i- ; 'J ,e *) h CAM Robert p. CeNins Senior VP & General Manager ' ~." gy VP & General Manager VP& Gux-ral Manager GECC Commercial Fman(ing

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-.r.*- " I Major Appliance Technology Automation Controls Operations Division Ralph D. Meteisene Divi 5i"" JoelTenser Berneral p. Long Senior VP & Group Executive VP & General Manager Senior VP & Gern ral Manager Lighting Group -3 Drn e Systems Operations GECC Distnburyon Sales Q bnanung Division g,,,,,, y, g,,g, VP & Gerx ral Manager Jonees H. Osenne 12mp Comp >nents aral Tu hnical MedicalSystefus Senior VP & General Manager Pnducts Division _q GECC Transpirration and Industrial hnanung Dnisson GaryB Emes l VP & General Manager 1 Mielseel R. Debney lamp Pndu(ts Division VP & General Manager Thessies L. WHuanas l i Sr GU.C Corpjrate hnanual Senhes Division VP & General Manager Lighting Systems Pndutrs i e ~ Mielimel G. Fitt Division i l Prnident and i Chief Emutisc Of fner g Employers Reinsuran(e I 1 Gii Girpiration WalterI Robb Senior VP & Group Executive Medical Systems Group Robert L.Stocklog Generei Electric VP & General Manager M infernietion Services M"S' cal Systems Sales and q Sen n e Division Walter W. Williones President Geix ral Elet tric Information Sen n es Company 7 = w 57

1 Ei M8MI' Plastics Power Systems I Csmmunications /: Neil L. Felmas [ John M. Treni r yp g cym.ral Manager VP & General Manager g' Nudear Energy 0;rrations j Mobile Gimmurutanons Division g Y Henry E. Stone VP & Chief Engirrer [" \\ ~ \\ t C Bertrem WeNe g-< Meter VP & General Manager Nutlear Tn hnologies aml fuel f Dnision ~ '1 Clyele D. Keeton ( 3 Glen H. Miser Jelen A.Uregebert VP & General Manager fl Senior VP & Group Executive Senior Vice President Domestic Apparatus and ') Plastics Gnup R>wer Systems liusiness Fegineenng Sersices Division l Peel L. Dewson gegene J. Keyerik El Chairman of the lloard and VP & General Manager j Chief Exnutive Ottker Power Dtlisery Diusion y General Electric Plastics ll.V. 4 Philip M. Gross J. Riclieral Stonesifer VP & General Manager t w, VP & General Manager p 4 3 International G>nstrut tion and Van W. Williams Plastics Ventures Dnision Engincenng Serviu s Division Senior VP & Gn>up Executive Herbert G. Rammroth ~g Giorgio Orst M"t"t('"*P VP & General Manager Managing Dirntor Coger D. Merey Plastics Sales Division SADihSADELMI Construction VP & Gerrral Manager L. Denelal Simpson Senior N P & G,"roup Executive Operaions Motor Marketing Division \\,P & General Manager Turbine Group Freak D. Kittrealge Plastics Manufacturing Dinsion VP & General Manager Uwe S. Wascher R>wer Systems International Sales bi F VP & General Manager Ilusiness Support Henry J. Singer Plastics Marketing Dnision VP & General Manager

• • • I* *$*'**I Util'ty and Industrial Sales Dnision Joseph G.Wirth VI & General Manager VP & G,eneral Manager Turbine Marketing and Promts Plastics Tnhnology Dinsion Division Delbert L.Williamson VP & General Manager g,,gg,,gggg,,

North Amenta Marketing Operations James E. Dykes VP & General Manager Semiconductor Division Transportation Systems Cert J. Schlenimier VP A General Manager Transportation Systems Opersions John C. Dwyer VP & General Manager Transportation Marktting and Sales Division 58

Shara ownar and Othar Inferniatisn Quarterly information able, without charge, on or about April 15 from: Corpo-op.r.es. rate Investor Communications, General Electric Company, liurtield, Conn. OM31. < Dollar amounts m millnins. hrst su ond .t hird lu.urth Copies of the G,eneral Electric Pension Plan, the S,um-p r-share amounts m Johars, quarter quart er quarter qturter mary Annual Report for GE employee benttit plans sub-sales or pn >du< ts.uxi jett to the Emploire Retirement income Security Act of sennesto<uwonrn so.lon so.s o n.sco ssJ26 1974 and other GE employee beneht plan documents and operanne nurgm svu v io s29 intbrmation are available by writing to Cor[mrate Investor Net earnmes s11 suo s~5 Mio Communications and specifying the information desired. Net cammes per share I i2 I sn 1 20 l is The Annual Reports of the General Electric Founda-ws4: tions also are available on request. Sales of pnidut ts and sen nes to astonrrs so. ss, snuo

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General Electric Company Morgan Guaranty Trust n Net earnm.n iss sm sni n52 Securities Transfer Operation Company of New York Net earnmps per sture 1 o~ l 2s 12i i ii FDR Station Stock Transfer Department olvidends and stock merke, P.O. Box 5339 30 West Broadway Dn idends (.on unon soit k Jo lared nurket prne range Annual Meeting The 1986 Annual Meeting of the General Electric mss os, mss msi hrst quarter sse sue sns ss - ssu. is, Company will be held on Wednesday, April 23, at the sn ood quarter ss so n2..ss so so Vista International Hotel in Kansas City, Mo. Third quarter 55 so n4 s6 s9 - is ' ' Domestic employment h,urth quarter s6 is 5s 's n s While the total number of GE managers and professionals The New York Snx k Enhange is the prmupal market on showed a decline for the year ended September 30,1985, whah GE common stot k is traded. As of Duember 6, the percentage of minorities and women in these key job 1985. there were about Wo.000 share owners of record. categories stayed about the same or increased. This reflects a sound balance between GE's continuing commitment to Dividend Reinvestment Plan Equal Employment Opportunity and actions taken to Share owners who hau n< or more shares of GE snxk tighten stafting levels and organizations. registered m their ow n namets) are chgmle to participate The percentage of women among GE managers rose in the GE Divalend Rennestment and Sharc Purchase from 5.79 in 1984 to 6.39, as their number went from Plan. For an authoruation torm and prespectus, write 1,408 to 1,479. Women again accounted for 13.49 of to: Share Owner Serutes. General Eleuric Company-GE's professional work force, although the number of P.O. Box 206, St hencuady. N Y.12 ;01. women professionals went from 7,296 to 7,182. The per-Form 10-K and other information centage of minority managers edged up from 4.89 to The finanual mtormation m this Report, m the opinion or 199, although their number went from 1,183 to 1,165. management, subs <antially ontorms with or exceeds the During the same period, the percentage of minority information required in th'e " 104 Reprt" to be submit _ prdessienals slipped to 7.49 from 7.59, as their number ted to rhe Securities and Enhance Commission at the ena W"or ironi ),083 to 3,952. of Marth. Certain supplemental information is in that re_ More than 10, LO women and 4,300 minorities were port. however, and topies u ithout exhibits will be avail _ promoted. Overall, minorities account for 119 and women 25.69 of GE employees. IVsn beneral Ela tra ( ompan . rmted m l' 5 4 t = Note: l'nless otherm.c mdn ated In th< ontext. the terms GL "Gerrral Fln tra and ' ( i.mpatn ' art used on the basis or s .ohda-non dest ribed i>n page ss GINIR AL $ f LECT Alc. $ anJ (il are registered trademarks of General i la t ra (.omp.un *and nwin ate regntered and unngis- = tered trade and st n ne nurks or Gerer.d I lu t ra ( ompany and its athhates 59 3 _..

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