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Business 2
Properties 15
Legal Proceedings 15
Market for Stock 20
Selected Financial Data 21
Management's Discussion 21
Financial Statements 21
Disagreements 21
Directors and Officers 22
Executive Compensation 23
Security Ownership 23
Certain Relationships 23
Exhibits, Financial Statement Schedules 23
Signatures 27
Differences Letter F-47
FORM 10-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(x) Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1993 Commission file number 1-35
or
( ) Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
--------- --------
GENERAL ELECTRIC COMPANY
(Exact name of registrant as specified in charter)
New York 14-0689340
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3135 Easton Turnpike, Fairfield, CT 06431-0001 203/373-2459
(Address of principal executive offices) (Zip Code) (Telephone No.)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class Name of each exchange on
which registered
Common stock, par value $0.63 per share New York Stock Exchange
Boston Stock Exchange
There were 853,832,790 shares of common stock with a par value of
$0.63 outstanding at March 5, 1994. These shares, which constitute all of
the voting stock of the registrant, had an aggregate market value on
March 7, 1994, of $90.3 billion. Affiliates of the Company beneficially
own, in the aggregate, less than one-tenth of one percent of such shares.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes x No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. x
---
DOCUMENTS INCORPORATED BY REFERENCE
The definitive proxy statement relating to the registrant's Annual Meeting
of Share Owners, to be held April 27, 1994, is incorporated by reference in
Part III to the extent described therein.
(1)
PART I
Item 1. Business
General
Unless otherwise indicated by the context, the terms "GE," "GECS" and
"GE Capital Services" are used on the basis of consolidation described in note
1 to the consolidated financial statements on page 45 of the 1993 Annual
Report to Share Owners of General Electric Company. Where appropriate for
clarification or emphasis, GE is also referred to as "GE except GECS." The
financial section of such Annual Report to Share Owners (pages 25 through 64
of that document) is set forth in Part IV Item 14 (a) (1) of this 10-K Report
and is an integral part hereof. References in Parts I and II of this 10-K
Report are to the page numbers of the 1993 Annual Report to Share Owners
included in Part IV of this 10-K Report. Also, unless otherwise indicated by
the context, "General Electric" means the parent Company, General Electric
Company.
General Electric's address is 1 River Road, Schenectady, NY 12345-6999;
the Company also maintains executive offices at 3135 Easton Turnpike,
Fairfield, CT 06431-0001.
The "Company" (General Electric Company and consolidated affiliates) is
one of the largest and most diversified industrial corporations in the world.
From the time of General Electric's incorporation in 1892, the Company has
engaged in developing, manufacturing and marketing a wide variety of products
for the generation, transmission, distribution, control and utilization of
electricity. Over the years, development and application of related and new
technologies have broadened considerably the scope of activities of the
Company and its affiliates. The Company's products include, but are not
limited to, lamps; major appliances for the home; industrial automation
products and components; motors; electrical distribution and control
equipment; locomotives; power generation and delivery products; nuclear
reactors, nuclear power support services and fuel assemblies; commercial and
military aircraft jet engines; materials, including engineered plastics,
silicones and cutting materials; and a wide variety of high technology
products, including products used in defense and medical diagnostic
applications. GE's Aerospace business segment, its subsidiary GE Government
Services, Inc., and a component of GE that operated Knolls Atomic Power
Laboratory under contract with the U.S. Department of Energy were transferred
on April 2, 1993, to a new company controlled by the shareholders of Martin
Marietta Corporation. The businesses transferred provided high-technology
products and services such as automated test systems, electronics, avionic
systems, computer software, armament systems, military vehicle equipment,
missile system components, simulation systems, spacecraft, communication
systems, radar, sonar and systems integration, and a variety of specialized
services for government customers. Accordingly, the businesses that were
transferred have been classified as discontinued operations in the 1993 Annual
Report to Share Owners and throughout this report.
The Company also offers a broad variety of services including product
support services; electrical product supply houses; electrical apparatus
installation, engineering, repair and rebuilding services; and computer-
related information services. Through a wholly owned subsidiary, General
(2)
Electric Capital Services, Inc., (GECS) and its three principal subsidiaries,
the Company engages in a broad spectrum of financial services including
consumer financing, commercial and industrial financing, real estate
financing, asset management and leasing, specialty insurance, reinsurance, and
investment banking and brokerage services. Other services offered include
U.S. satellite communications furnished by GE Americom. Another wholly owned
subsidiary, National Broadcasting Company, Inc. ("NBC"), is engaged
principally in furnishing network television services, in operating television
stations, and in providing cable programming and distribution services in the
United States, Europe and Latin America. The Company also licenses patents
and provides technical know-how related to products it developed, but such
activities are not material to the Company.
Aggressive and able competition, often highly concentrated and global,
is encountered in virtually all of the Company's business activities. In many
instances, the competitive climate is characterized by changing technology
requiring continuing research and development commitments, and by capital-
intensive needs to meet customer requirements. With respect to manufacturing
operations, it is believed that, in general, GE has a leadership position
(i.e., number one or two) in most major markets served. The NBC Television
Network is one of four competing major national commercial broadcast
television networks. It also competes with certain cable and satellite
television programming activities. The businesses in which GE Capital
Services engages are subject to vigorous competition from various types of
financial institutions, including commercial banks and brokerage firms,
investment banks, credit unions, leasing companies, consumer loan companies,
independent finance companies, finance companies associated with
manufacturers, and insurance and reinsurance companies.
GE has substantial export sales from the United States. In addition,
the Company has majority and minority or other joint venture interests in a
number of non-U.S. companies engaged primarily in manufacturing and
distributing products and providing nonfinancial services similar to those
sold within the United States. GECS' financial services operations outside of
the United States have expanded considerably over the past several years.
Industry Segments
The Company's operations are highly decentralized. The basic
organization of GE's continuing operations consists of twelve key businesses
which contain management units of differing sizes. For industry segment
reporting purposes, the businesses are aggregated by the principal industries
in which the Company participates. This aggregation is on a worldwide basis,
which means that multi-industry non-U.S. affiliates' operations are classified
by appropriate industry segment.
Financial information on consolidated industry segments is presented on
page 35 of the 1993 Annual Report to Share Owners in two parts: one for GE
that includes GECS in the All Other segment on a one-line basis in accordance
with the equity method of accounting, and one for GECS as a separate entity.
For GE, four of the 12 key businesses (Aircraft Engines, Appliances,
Industrial and Power Systems and NBC) represent individual segments (namely,
Aircraft Engines, Appliances, Power Systems and Broadcasting, respectively).
Except for "All Other," the remaining
(3)
businesses are aggregated by the three industry segments in which they
participate (Industrial, Materials and Technical Products and Services). The
All Other segment consists primarily of GECS' earnings discussed above and
revenues derived from licensing use of GE know-how and patents to others. For
GECS, revenues and operating profit are presented separately by the three
industry segments in which it conducts its business (Financing, Specialty
Insurance and Securities Broker-Dealer). There is appropriate elimination of
the net earnings of GECS and the immaterial effect of transactions between GE
and GECS segments to arrive at total consolidated data.
Additional financial data and commentary on recent operating results for
industry segments are reported on pages 33-38 of the 1993 Annual Report to
Share Owners. Further details can be found in note 29 (pages 60 and 61 of
that Report) to the consolidated financial statements. These data and
comments are for General Electric Company's continuing operations, except as
otherwise indicated, and should be referred to in conjunction with the summary
description of each of the industry segments which follows.
Aircraft Engines
Aircraft Engines (10.9%, 12.9% and 14.2% of consolidated revenues in
1993, 1992 and 1991, respectively) produces and sells a single class of
products - aircraft engines and related replacement parts - for use in
military and commercial aircraft, in naval ships for propulsion, and as
industrial power sources. GE's military engines are used in a wide variety of
aircraft that includes fighters, bombers, tankers and helicopters. GE's CFM56
and CF6 engines power aircraft in all categories of commercial aircraft:
short, medium and long range. Applications for GE's CFM56 engine, produced
jointly by GE and SNECMA of France, include: Boeing's 737-300/-400/-500
series and the new 737-300X; Airbus Industrie's A319, A320, A321 and A340
series; and military aircraft such as the KC-135R/
C-135FR, E/KE-3 and E-6. GE's CF6 family of engines powers intermediate and
long-range aircraft such as Boeing's 747 and 767 series, Airbus Industrie's
A300, A310 and A330 series, and McDonnell Douglas' DC-10 and MD-11 series. GE
also produces jet engines for executive aircraft and regional commuter
aircraft, and aircraft engine derivatives used for marine propulsion,
mechanical drives and industrial power generation sources. GE also provides
maintenance and repair services for many models of jet engines, including
engines manufactured by competitors.
The worldwide competition in aircraft jet engines is intense and highly
concentrated. Both U.S. and export markets are important. Product
development cycles are long and product quality and efficiency are critical to
success. Research and development expenditures, both customer-financed and
internally funded, are also important in this segment. In cooperation with
partners SNECMA, IHI, and Fiat, Aircraft Engines is currently developing the
GE90 engine to power Boeing's new 777 twin-engine aircraft. The GE90 broke an
industry record on its initial ground testing in 1993, reaching thrust levels
in excess of 105,000 pounds. It also flew on a 747 testbed in the engine's
first flight and subsequently demonstrated the lowest fuel consumption ever
achieved by a large high-bypass turbofan engine. Plans are to certify the
engine in 1994 with introduction into active airline service in 1995.
Potential sales for any engine are limited by its technological lifetime,
which may vary considerably depending upon the rate of advance in the state of
the art, by the small number of potential customers and by the limited number
of airframes. Sales of
(4)
replacement parts and services are an important part of the business.
Aircraft engine orders tend to follow military and airline procurement cycles,
although patterns for military and commercial engine procurements are
different. U.S. procurements of military jet engines are affected by the
government's response to changes in the global political and economic outlook.
In line with industry practice, sales of commercial jet aircraft engines
often involve long-term financing commitments to customers. In making such
commitments, it is GE's general practice to require that it have, or be able
to establish, a secured position in the aircraft being financed. Under such
airline financing programs, GE had issued loans and guarantees (principally
guarantees) amounting to $1.2 billion at year-end 1993, and had entered into
commitments totaling $1.4 billion to provide financial assistance on future
aircraft engine sales. Estimated fair values of the aircraft securing these
receivables and guarantees exceeded the related account balances or guaranteed
amounts at December 31, 1993.
For current information about Aircraft Engines orders and backlogs, see
page 34 of the 1993 Annual Report to Share Owners.
Appliances
Appliances (9.2%, 9.3% and 9.6% of consolidated revenues in 1993, 1992
and 1991, respectively) manufactures and/or markets a single class of product
- - major appliances - including kitchen and laundry equipment such as
refrigerators, ranges, microwave ovens, freezers, dishwashers, clothes washers
and dryers, and room air conditioners. These are sold under GE, Hotpoint,
RCA, Monogram and Profile brands as well as under private brands for
retailers. GE microwave ovens and room air conditioners are mainly sourced
from Asian suppliers while investment in Company-owned U.S. facilities is
focused on refrigerators, dishwashers, ranges (primarily electric, but some
gas) and home laundry equipment. A large portion of appliance sales is for
the replacement market. Such sales are through a variety of retail outlets.
The other principal market consists of residential building contractors who
install appliances in new dwellings. GE has a U.S. service network that
supports GE's appliance business.
Appliances is increasing its operating presence in the global business
arena and participates in numerous manufacturing and distribution joint
ventures around the world. This increase included the start-up of Godrej-GE,
a joint venture with India's largest appliance manufacturer, Godrej & Boyce
Ltd., in 1993. GE and Toshiba established a joint venture in 1991 to
cooperate in marketing GE, Hotpoint and Creda products in Japan through
Toshiba's distribution network. A 1990 joint venture in Mexico, MABE,
produces high-quality gas ranges for the Mexican and U.S. markets. In 1993,
MABE completed a new top-mount refrigerator facility and opened a new
technology center. European market participation was expanded significantly
in 1989 with the formation of a joint venture with General Electric Company
plc (GEC), an unrelated corporation in the United Kingdom.
Markets for appliances are influenced by economic trends such as
increases or decreases in consumer disposable income, availability of credit,
and housing construction. Competition is very active in all products and
comes from a relatively small number of principal manufacturers and suppliers.
An important factor is cost, and considerable
(5)
competitive emphasis is placed on minimizing manufacturing and distribution
costs, and on reducing cycle time from order to product delivery. Other
significant factors include quality, features offered, innovation, customer
responsiveness and appliance service capability. A number of processes, such
as Quick Response, New Product Introduction and Quick Market Intelligence,
have been implemented to improve GE's competitiveness in these areas. Another
example of a significant initiative is "Save the Park," a joint initiative
between management and unions, which was implemented during 1993 at Appliance
Park in Louisville, KY. to streamline processes, improve quality, realize
significant savings and, ultimately, to prevent relocation to alternative
sites.
Broadcasting
Broadcasting (5.1%, 5.9% and 5.7% of consolidated revenues in 1993, 1992
and 1991, respectively) consists primarily of the National Broadcasting
Company (NBC). NBC's principal businesses are the furnishing within the
United States of network television services to affiliated television
stations, the production of live and recorded television programs, and the
operation, under licenses from the Federal Communications Commission (FCC), of
six VHF television broadcasting stations. The NBC Television Network is one
of the competing major U.S. commercial broadcast television networks and
serves more than 200 regularly affiliated stations within the United States.
The television stations NBC owns and operates are located in Chicago; Denver;
Los Angeles; Miami; New York; and Washington, D.C. Broadcasting operations,
including the NBC Television Network and owned stations, are subject to FCC
regulation. NBC's operations include investment and programming activities in
cable television, principally through its ownership of CNBC and equity
investments in Arts and Entertainment, Court TV, American Movie Classics,
Bravo, Prime Network and regional Sports Channels across the United States.
In 1993, NBC acquired control of Super Channel, the largest pan-European
satellite-delivered general program service. It also launched Canal de
Noticias NBC, a new 24-hour Spanish-language channel delivered by satellite in
Latin America. The cable television and network broadcast programming
environments are highly competitive.
Industrial
Industrial (12.2%, 12.1% and 12.4% of consolidated revenues in 1993,
1992 and 1991, respectively) encompasses lighting products, electrical
distribution and control equipment for industrial and commercial
construction, transportation systems, motors, industrial automation
products and GE Supply. No "similar" class of products or services within
the segment approached 10% of any year's consolidated revenues during the
three years ended December 31, 1993. Customers for many of these products
and services include electrical distributors, original equipment
manufacturers and industrial end users. Lighting products include a wide
variety of lamps - incandescent, fluorescent, high intensity discharge,
halogen and specialty - as well as wiring devices and quartz products.
Markets and customers are principally in the United States, although
international markets continue to increase in importance. In 1993, the
Lighting business agreed to form a joint venture in China, GE Jiabao
Lighting Company, Ltd. to manufacture, distribute and sell a full line of
lighting products. GE has also strengthened its position in Japan with the
start-up of Hitachi GE Lighting Ltd., a joint venture that was established
in 1992 to sell and
(6)
distribute lighting products in the significant Japanese lighting market.
Another GE Lighting venture, GE Apar Lighting Private Ltd., continued to
expand during 1993 with investments in new facilities and in the only
"ribbon" glassmaking equipment in India or Southeast Asia. In addition,
the 1993 acquisition of Lumalampan AB's well-regarded Luma brand
strengthened Lighting's position in Scandinavia. The 1990 acquisition of a
majority interest in Tungsram Company, Ltd. of Hungary (now wholly owned)
and the early 1991 acquisition of the light source business of Thorn EMI of
the United Kingdom are fully integrated into European operations. Markets
for lighting products are extremely varied, ranging from household
consumers to commercial and industrial end users and original equipment
manufacturers. Electrical distribution and control equipment is sold for
installation in commercial, industrial and residential facilities. GE
Electrical Distribution and Control (ED&C) and Honeywell's MICRO SWITCH
division formed a venture, GE/MICRO SWITCH Controls, Inc., during 1992
through which both businesses jointly sell and distribute complementary
factory control products in the United States. European operations were
expanded with the 1989 establishment of a joint venture, Power Controls
B.V. (formerly Eurolec). To bolster European market share and global
competitiveness, GE signed a letter of intent in 1993 under which Power
Controls will acquire a majority interest in the low-voltage business of
Germany's AEG. Power Controls had acquired both Lemag and Agut S.A. of
Spain during 1992, enhancing product offerings in residential distribution
and industrial control markets. Transportation systems include diesel-
electric and electric locomotives, transit propulsion equipment, motors for
drilling devices and motorized wheels for off-highway vehicles such as
those used in mining operations. Locomotives are sold worldwide,
principally to railroads, while markets for other products include state
and urban transit authorities and industrial users. Motors and motor-
related products serve the appliance, commercial, industrial, heating, air
conditioning and automotive markets. Motor products are used within GE and
also are sold externally. Industrial automation products cover a broad
range of electrical and electronic products with emphasis on manufacturing
and advanced engineering automation applications. (See the discussion of
GE Fanuc on the following page.) GE Supply operates a U.S. network of
electrical supply houses and through its subsidiary, GE Supply Mexico,
operates three supply houses in Mexico.
Markets for industrial products generally lag overall economic
slowdowns as well as subsequent recoveries. U.S. industrial markets are
undergoing significant structural changes reflecting, among other factors,
international competition and pressures to modernize productive capacity.
Additional information about certain of GE's industrial businesses follows.
Competition for lighting products comes from a relatively small number
of major firms and is based principally on price, distribution and product
innovation. The nature of lighting products and market diversity make the
lighting business somewhat less sensitive to economic cycles than other
businesses in this segment.
Electrical distribution and control equipment is sold to distributors,
electrical contractors, large industrial users, and original equipment
manufacturers. Markets are affected principally by levels of (and cycles in)
residential and non-residential construction as well as domestic industrial
plant and equipment expenditures. Competitors include
(7)
other large manufacturers, with international competition in U.S. markets
increasing. GE Supply offers products of General Electric and other
manufacturers to electrical contractors and industrial, commercial, and
utility customers.
In transportation systems, demand is historically cyclical. There is
strong worldwide competition from major firms for transportation equipment.
External sales of motors and related products are principally to
manufacturers of original equipment, distributors, and industrial users.
Competition includes other motor and component producers, integrated
manufacturers, and customers' own in-house capability. Markets for these
products are price competitive, putting emphasis on economies of scale and
manufacturing technology. Other market factors include energy-driven
technology changes and the cyclical nature of the consumer end-user market.
Through a 50-50 joint venture (GE Fanuc Automation Corporation) which
has two operating subsidiaries (one in North America and the other in Europe),
GE offers a wide range of high-technology industrial automation systems and
equipment, including computer numerical controls and programmable logic
controls. Competition in industrial automation is intense and comes from a
number of U.S. and international sources.
Materials
Materials (8.3%, 8.5% and 8.7% of consolidated revenues in 1993, 1992
and 1991, respectively) includes high-performance engineered plastics used in
applications such as substitutes for metal and glass in automobiles, and as
housings for computers and other business equipment; silicones; superabrasives
such as man-made diamonds; and laminates. Materials also includes ABS resins,
a family of thermoplastic resins used by custom molders and major original
equipment manufacturers for use in a variety of applications, including
fabrication of automotive parts, computer enclosures, major appliance parts
and construction materials. Market opportunities for many of these products
are created by functional replacement which provides customers with an
improved material at lower cost. These materials are sold to a diverse
worldwide customer base (mainly manufacturers). Materials has a significant
operating presence around the world and participates in numerous manufacturing
and distribution joint ventures.
The business is characterized by technological innovation and heavy
capital investment. Being competitive requires a strong emphasis on efficient
manufacturing process implementation and strong market and application
development. Competitors include large, technically oriented suppliers of the
same, as well as functionally equivalent, materials. Adequate capacity to
satisfy demand and anticipation of new product or material performance
requirements are key factors affecting this competition. The business is
cyclical and, during periods of economic slowdown is subject to pricing
pressures from competitors because of, among other things, industry excess
capacity.
Materials also included Ladd Petroleum Corporation, an oil and natural
gas developer and supplier with operations mainly in the United States, until
December 21, 1990, when it was sold to Amax Oil and Gas, Inc., a subsidiary of
Amax, Inc.
(8)
Power Systems
Power Systems (11.0%, 11.2% and 11.3% of consolidated revenues in 1993,
1992 and 1991, respectively) serves utility, industrial and governmental
customers worldwide with products for the generation, transmission and
distribution of electricity, and with related installation, engineering and
repair services. Worldwide competition continues to be intense. For
information about current developments, and orders and backlogs, see pages 34
and 36 of the 1993 Annual Report to Share Owners. Steam turbine-generators
are sold to the electric utility industry, to the U.S. Navy and, for
cogeneration, to private industrial customers. Marine steam turbines and
propulsion gears also are sold to the U.S. Navy. Gas turbines, which for the
past several years has been the fastest growing part of this segment, are used
principally as packaged power plants for electric utilities, and for
industrial cogeneration and mechanical drive applications. Through a joint
venture with GEC Alsthom of France, GE has access to the European gas turbine
market. Centrifugal compressors are sold for application in gas reinjection,
pipeline services and such process applications as refineries and ammonia
plants. In 1993 an agreement was reached by a GE-led consortium including
Dresser Industries and Ingersoll Rand to acquire 69% of Nuovo Pignone, an
Italian electrical equipment maker. This move further strengthens the
Company's position in Europe, North Africa, the Middle East and Asia, and
particularly in Russia, where Nuovo Pignone recently received commitments for
$1.6 billion in pipeline equipment. There have been no nuclear plant orders
in the United States since the mid-1970s and international activity has been
very low. GE continues to invest in advanced technology development and to
focus its resources on refueling and servicing its installed boiling-water
reactors. Power delivery products include transformers, electricity meters,
relays, capacitors and arresters, principally for electric utilities, and
drive systems for industrial applications. Installation, engineering and
repair services include management and technical expertise for large projects,
such as power plants; maintenance, inspection, repair and rebuilding of
electrical apparatus produced by GE and others; on-site engineering and
upgrading of already installed products sold by GE and others; and
environmental systems for utilities.
Products and services differ in contribution to sales and earnings,
market position and production cycle. No "similar" class of products or
services within the segment approached 10% of any year's consolidated revenues
during the three years ended December 31, 1993. As discussed in the previous
paragraph, there is intense worldwide competition for power systems products
and services. The markets for most power systems products and services are
worldwide and as a result are sensitive to the economic and political
environment of each country in which the business participates. In the United
States many power systems markets are sensitive to the financial condition of
the electric utility industry as well as the electric power conservation
efforts by power users. Internationally, the influence of oil prices on a
country's economy has a large impact on its markets. GE's drive systems
business is a leading supplier of customized controls and drives for metal and
paper processing, for mining, for utilities and for marine applications.
Competition in drive systems comes from a variety of businesses throughout the
world.
(9)
Technical Products and Services
Technical products and services (6.9%, 8.2% and 8.6% of consolidated
revenues in 1993, 1992 and 1991, respectively) consists of technology
operations providing products, systems and services to a variety of customers.
Businesses in this segment include medical systems and services,
communications and information services and certain other specialized
services. Medical systems include magnetic resonance (MR) scanners, computed
tomography (CT) scanners, x-ray, nuclear imaging, ultrasound, and other
diagnostic equipment and supporting services sold to hospitals and medical
facilities worldwide. Medical Systems has a significant operating presence in
Europe and Asia, including the operations of its affiliates GE CGR (France),
Yokogawa Medical Systems (Japan) and WIPRO GE Medical Systems (India).
Acquisitions and joint ventures continue to expand GE's medical systems
activities in world markets. Continued globalization increased Medical
Systems' presence in Asia during 1993, where it purchased an x-ray
manufacturer in Japan, announced plans to enlarge manufacturing facilities in
China, and established new sales and service joint ventures in Taiwan and
Thailand. Additionally, its presence continued to expand in Latin America
with new facilities in Argentina, Brazil and Mexico. Information services are
provided both to internal and external customers by GE Information Services
(GEIS). These include enhanced computer-based communications services, such
as data network services, electronic messaging and electronic data
interchange, which are offered to commercial and industrial customers through
a worldwide network; application software packaging; and custom system design
and programming services. During 1993, the Company signed an agreement under
which Ameritech Corporation, a leading telecommunications company, will invest
$472 million in GEIS that will convert, when U.S. law permits, to a 30% equity
position in that business. GEIS also acquired International Network Services,
Ltd. in 1993, a leading European supplier of electronic data interchange
services and software. GE's mobile communications business (primarily mobile
radios) was placed into a joint venture with Ericsson of Sweden's digital
cellular technology in 1989. The venture was realigned in 1992 so that GE now
holds preferred stock. Principal competition is from well-established
manufacturers. This segment included GE Americom and GE Computer Services
until they were transferred to GE Capital Corporation at the end of 1989 and
mid-1992, respectively. See page 12 for further information. GE Consulting
Services (custom system design and programming services) was sold to Keane,
Inc. on January 1, 1993.
Serving a diversity of customers for special needs (which are rapidly
changing in certain areas such as medical and information systems), businesses
in this segment compete against a variety of both U.S. and non-U.S.
manufacturers or service operations including, in certain situations, customer
in-house capability. Technological competence and innovation, excellence of
design, high product performance, quality of service, and competitive pricing
are among the key factors affecting competition in the markets for these
products and services. Throughout the world, demands on health care providers
to control costs have become much more important. Medical Systems is
responding with cost-effective technologies that improve operating efficiency
and clinical productivity. See page 36 of the 1993 Annual Report to Share
Owners for information about orders and backlog of Medical Systems' products.
(10)
All Other GE
All Other GE consists mostly of earnings of and investment in General
Electric Capital Services, Inc. (GECS), a wholly owned consolidated affiliate,
which are accounted for on a one-line basis in accordance with the equity
method of accounting but are eliminated in consolidation. Other ongoing
operations (0.4%, 0.4% and 0.5% of consolidated revenues in 1993, 1992 and
1991, respectively) mainly involve licensing the use of GE's know-how and
patents to others. A separate discussion of segments within GECS appears
below.
GECS Segments
The business of GECS consists of the ownership of three principal
affiliates that, together with their affiliates and other investments,
constitute General Electric Company's principal financial services activities.
GECS owns all of the common stock of General Electric Capital Corporation (GE
Capital or GECC), Employers Reinsurance Corporation (ERC) and Kidder, Peabody
Group Inc. (Kidder, Peabody). Prior to August 10, 1990, twenty percent of
Kidder, Peabody had been owned by or on behalf of certain Kidder, Peabody
officers.
For industry segment purposes, Financing (20.5%, 18.5% and 18.4% of
consolidated revenues in 1993, 1992 and 1991, respectively) consists solely of
noninsurance activities of GE Capital; Specialty Insurance (8.0%, 6.8% and
5.5% of consolidated revenues in 1993, 1992 and 1991, respectively) consists
of the activities of ERC as well as the activities of insurance entities owned
by GE Capital; Securities Broker-Dealer (8.0%, 7.0% an 6.1% of consolidated
revenues in 1993, 1992 and 1991, respectively) consists entirely of Kidder,
Peabody's operations; and All Other is GECS corporate activities not
identifiable with specific industry segments.
Additional information follows.
Financing activities of GE Capital, none of which individually
constitutes as much as 10% of consolidated revenues, comprise the following:
* Consumer services - private-label and bank credit card loans, time
sales and revolving credit and inventory financing for retail
merchants, auto leasing and inventory financing and mortgage
servicing, and annuities;
* Specialized financing - loans and financing leases for major
capital assets, including aircraft, industrial facilities and
equipment and energy-related facilities; commercial and
residential real estate loans and investments; and loans to and
investments in highly leveraged management buyouts and corporate
recapitalizations;
* Equipment management - leases, loans and asset management services
for portfolios of commercial and transportation equipment,
including aircraft, trailers, auto fleets, modular space units,
railroad rolling stock, data processing equipment, satellites and
ocean-going containers; and
(11)
* Mid-market financing - loans and financing and operating leases
for middle-market customers, including manufacturers, distributors
and end users, for a variety of equipment, including data
processing equipment, medical and diagnostic equipment, and
equipment used in construction, manufacturing, office applications
and telecommunications activities.
Very little of the financing by GE Capital involves products that are
manufactured by GE. Beginning in 1990, this segment includes GE Americom, a
leading U.S. satellite carrier. Beginning in the second half of 1992, the
segment also includes GE Computer Services, which provides independent
maintenance and rental/leasing services for minicomputers and microcomputers,
electronic test instruments and data communications equipment. These
components had been included in GE's Technical Products and Services segment
prior to their transfer to the Financing segment. GE Capital also is an equity
investor in a retail organization and certain other service and financial
services organizations. GE Capital continues to experience broad growth. In
1993 its Consumer services operations acquired GNA Corporation from
Weyerhauser Company and Weyerhauser Financial Services, Inc. and United
Pacific Life Insurance Company from Reliance Insurance Company and its parent,
Reliance Group Holdings, Inc. Together these two acquisitions constitute
GECS' annuity business, a business that writes and markets tax-deferred
annuities and sells proprietary and third-party mutual funds through
independent agents and financial institutions. Other 1993 acquisitions
expanded GECS' financial services activities in Europe, Scandinavia and
Canada. GE Capital had previously increased its presence in Europe with the
1992 acquisition of Avis Europe's vehicle leasing and fleet management
business, following 1991 and 1990 acquisitions of private-label credit card
operations of major U.K. retailers.
GE Capital's activities are subject to a variety of federal and state
regulations including, at the federal level, the Consumer Credit Protection
Act, the Equal Credit Opportunity Act and certain regulations issued by the
Federal Trade Commission. A majority of states have ceilings on rates
chargeable to customers in retail time sales transactions, installment loans
and revolving credit financing. GECS' international operations are also
subject to regulation in their respective jurisdictions. To date such
regulations have not had a material adverse effect on GE Capital's volume of
financing operations or profitability. Common carrier services of GE Americom
are subject to regulation by the Federal Communications Commission.
On March 28, 1991, GE entered into an agreement to make payments to GE
Capital, constituting additions to pre-tax income, to the extent necessary to
cause the ratio of earnings to fixed charges of GE Capital and consolidated
affiliates (determined on a consolidated basis) to be not less than 1.10 for
the period, as a single aggregation, of each GE Capital fiscal year commencing
with fiscal year 1991. The agreement can only be terminated by written notice
and termination is not effective until the third anniversary of the date of
such notice. GE Capital's ratios of earnings to fixed charges for the years
1993, 1992 and 1991, respectively, were 1.62, 1.44 and 1.34, substantially
above the level at which payments would be required.
Specialty Insurance includes ERC, a multiple line property and casualty
reinsurer that writes all lines of reinsurance other than title and annuities
and other insurance activities of GE Capital. ERC reinsures
(12)
property and casualty risks written by more than 1,000 U.S. and non-U.S.
insurers, and has subsidiaries located in the United Kingdom and Denmark. By
means of other subsidiaries ERC writes property and casualty reinsurance
through brokers and provides reinsurance brokerage services. ERC also writes
certain specialty lines of insurance on a direct basis, principally excess
workers' compensation for self-insurers, libel and allied torts and errors and
omissions coverage for insurance agents and brokers. It is licensed in all
states of the United States, the District of Columbia, certain provinces of
Canada and in other jurisdictions. The other insurance activities of GECS
consist of GE Capital affiliates that provide various forms of insurance.
Financial Guaranty Insurance Company provides financial guaranty insurance,
principally on municipal bonds and structured finance issues. GE Capital's
mortgage insurance operations are engaged primarily in providing private
mortgage insurance. Other affiliates provide life reinsurance, creditor
insurance for international retail borrowers and, for GE Capital customers,
credit life and certain types of property and casualty insurance. Businesses
in the Specialty Insurance segment are generally subject to regulation by
various insurance regulatory agencies.
Securities Broker-Dealer represents Kidder, Peabody, which is a full-
service investment bank and securities broker. Principal businesses include
securities underwriting; sales and trading of equity and fixed income
securities; financial futures activities; advisory services for mergers,
acquisitions and other corporate finance matters; merchant banking; research
services; and asset management. These services are provided in the United
States and internationally to business entities, governments, government
agencies, and individual and institutional investors. Kidder, Peabody is a
member of the principal securities and commodities exchanges and is a primary
dealer in U.S. government securities. Kidder, Peabody and its affiliates are
subject to the rules and regulations of various federal, state and industry
regulatory agencies that apply to securities broker-dealers, including the
U.S. Securities and Exchange Commission, U.S. Commodity Futures Trading
Commission, New York Stock Exchange, National Association of Securities
Dealers and the Chicago Board of Trade, as well as various international
regulatory agencies.
Geographic Segments, Exports from the U.S. and Total International Operations
Financial data for geographic segments (based on the location of the
Company operation supplying goods or services and including exports from the
U.S. to unaffiliated customers) are reported in note 30 to consolidated
financial statements on page 62 of the 1993 Annual Report to Share Owners.
Additional financial data about GE's exports from the U.S. and total
international operations are on page 38 of the 1993 Annual Report to Share
Owners.
Orders Backlog
See pages 34, 36 and 42 of the 1993 Annual Report to Share Owners for
information about GE's backlog of unfilled orders.
(13)
Research and Development
Total expenditures for research and development were $1,955 million in
1993. Total expenditures had been $1,896 million in 1992 and $1,866 million
in 1991. Of these amounts, $1,297 million in 1993 was GE-funded ($1,353
million in 1992 and $1,196 million in 1991) and $658 million in 1993 ($543
million in 1992 and $670 million in 1991) was funded by others, principally
the U.S. government. Aircraft Engines accounts for the largest share of GE's
R&D expenditures from both Company and customer funds. Other significant
expenditures of Company and customer research and development funds were for
Medical Systems, Plastics and Power Systems.
Approximately 9,100 person-years of scientist and engineering effort
were devoted to research and development activities in 1993 with about 73% of
the time involved primarily in GE-funded activities.
Environmental Matters
See page 42 of GE's 1993 Annual Report to Share Owners for a discussion
of environmental matters.
Employee Relations
At year-end 1993, General Electric Company and consolidated affiliates
employed 222,000 persons, of whom approximately 163,000 were in the United
States. For further information about employees, see page 43 of the 1993
Annual Report to Share Owners.
Approximately 44,250 GE manufacturing, engineering and service employees
in the United States are represented for collective bargaining purposes by a
total of approximately 150 different local collective bargaining groups. A
majority of such employees is represented by union locals which are affiliated
with, and bargain in conjunction with, the International Union of Electronic,
Electrical, Salaried, Machine and Furniture Workers (AFL-CIO). During 1991,
General Electric Company negotiated three-year contracts with unions
representing a substantial majority of those United States employees who are
represented by unions. Most of these contracts will terminate in June 1994.
NBC is party to approximately 100 labor agreements covering about 2,000 staff
employees (and a large number of freelance employees) in the United States.
These agreements are with various labor unions, expire at various dates, and
are generally for a term of three to four years. Contracts covering a
majority of NBC's staff employees will expire at different times during 1994.
Executive Officers
See Part III, Item 10 of this 10-K Report for information about
Executive Officers of the Registrant.
Other
Because of the diversity of the Company's products and services, as well
as the wide geographic dispersion of its productive facilities, the Company
uses numerous sources for the wide variety of raw materials needed for its
operations. The Company has not been adversely affected by inability to
obtain raw materials.
(14)
The Company owns, or holds licenses to use, numerous patents. New
patents are continually being obtained through the Company's research and
development activities as existing patents expire. Patented inventions are
used both within the Company and licensed to others, but no industry segment
is substantially dependent on any single patent or group of related patents.
About 5% of consolidated revenues in 1993 (7% of GE revenues) were from
sales of goods and services to agencies of the U.S. government, which is the
Company's largest single customer. About 4% of consolidated revenues in 1993
(6% of GE revenues) were defense-related sales of aircraft engine goods and
services.
About 6% of consolidated revenues in 1992 (8% of GE revenues) were from
sales of goods and services to agencies of the U.S. government. About 4% of
consolidated revenues in 1992 (6% of GE revenues) were defense-related sales
of aircraft engine goods and services.
In 1991, about 7% of consolidated revenues (10% of GE revenues) were
from sales of goods and services to agencies of the U.S. government.
Approximately 5% of consolidated revenues (7% of GE revenues) were defense-
related sales of aircraft engine goods and services.
Item 2. Properties
Manufacturing operations are carried on at approximately 146
manufacturing plants located in 30 states in the United States and Puerto Rico
and some 114 manufacturing plants located in 24 other countries.
Item 3. Legal Proceedings
General
- -------
As previously reported, on August 21, 1991, a suit was filed against the
Company in Federal District Court for the Northern District of Ohio by
Cleveland Electric Illuminating Company and four other utilities which own the
Perry nuclear power plant. The suit related to the contract under which the
Company furnished the nuclear steam supply system and related equipment and
services for the Perry plant. It sought to recover unspecified damages
related to the modification of the containment system and alleged breach of
contract, fraud, negligence, deceptive practices, and violations of the
federal Racketeer Influenced and Corrupt Organizations Act and similar state
statutes. On January 28, 1994, the Company reached a settlement with the
plaintiffs and the case was dismissed. Under the terms of the settlement,
over a period of years, the Company will provide discounts on certain future
purchases and make cash payments to the plaintiffs.
Also as previously reported, on April 24, 1991, Philip M. Stern, a
Company shareholder, served an amended complaint naming the directors (other
than Messrs. Atwater, Calloway, Fresco, Gonzalez, Jones and Warner) as
defendants in a civil suit brought purportedly on behalf of the Company as a
shareholder derivative action (the Stern action) in the U.S. District Court in
New York City. The amended complaint relates to the Non-Partisan Political
Support Committee For General Electric Company Employees (PAC)
(15)
and alleges that it was a waste of corporate assets to provide Company funds
to establish and operate the PAC for GE employees because the PAC is allegedly
used to attempt to buy favor and influence with incumbent members of Congress
and because solicitation and administration costs were allegedly excessive. In
related proceedings, the Federal Elections Commission and two federal courts
held that the political contributions made by the PAC were lawful and proper
under federal election law. The complaint includes allegations of bad faith,
fraud, negligence and breach of fiduciary duty under state law and seeks to
require the defendants to pay to the Company all amounts spent by the Company
to establish, administer and maintain the PAC as well as punitive damages. On
March 12, 1992, the plaintiff filed a motion to amend the complaint to add a
claim that the defendants allegedly violated the Federal Regulation of
Lobbying Act, and thereby breached their fiduciary duty to shareholders by
failing to report lobbying expenses as required by that statute. On June 2,
1992, plaintiff's motion was denied. On September 4, 1992, Henry D. Sedgwick
Stern and Walter B. Slocombe, Personal Representatives of the Estate of Philip
M. Stern, were substituted as the plaintiffs in this case, following the death
of Philip Stern. On November 16, 1993, the court granted summary judgment for
all defendants on all claims. Plaintiffs have appealed, and that appeal is
pending. The defendants believe that the appeal is without merit.
As previously reported, the directors (other than Messrs. Calloway,
Gonzalez and Warner) and certain officers are defendants in a civil suit
purportedly brought on behalf of the Company as a shareholder derivative
action by Leslie McNeil, Harold Sachs, Arun Shingala and Paul and Harriet Luts
(the McNeil action) in New York State Supreme Court on November 19, 1991. The
suit alleges the Company was negligent and engaged in fraud in connection with
the design and construction of containment systems for nuclear power plants
and contends that, as a result, GE has incurred significant financial
liabilities and is potentially exposed to additional liabilities from claims
brought by the Company's customers. The suit alleges breach of fiduciary duty
by the defendants and seeks unspecified compensatory damages and other relief.
The defendants believe these claims are without merit. On March 31, 1992, the
defendants filed motions to dismiss the suit. On September 28, 1992, the
court denied the motions as premature but ruled that they may be renewed after
the completion of limited discovery. Defendants moved for reconsideration of
that order, and on April 3, 1993, the court granted defendants' motion for
reconsideration and directed that discovery be stayed pending the filing of an
amended complaint.
As previously reported, on September 15, 1992, Evelyn Benfield filed a
shareholder derivative action in U.S. District Court in Cincinnati, Ohio
purportedly on behalf of the Company, seeking compensatory damages and
equitable relief arising out of the alleged failure to implement effective
internal controls to prevent government contract fraud. The complaint names
as defendants all of the current directors (except Messrs. Gonzalez and
Warner), certain former directors, a former officer, and a former employee of
the Company. Plaintiff claims, in substance, that various defendants breached
their fiduciary duties to the Company under state law by either participating
in or failing to prevent government contract fraud. Plaintiff's claims are
based primarily upon the fact that, in July 1992, the Company pled guilty to
four federal felony counts and settled a related federal False Claims Act
civil suit, all of which were related to diversions of funds in connection
with the Company's sale of military
(16)
aircraft engines to Israel. The Company paid a fine of $9.5 million and
simultaneously agreed to pay $59.5 million to settle the False Claims Act
suit. On December 3, 1993, the court approved a settlement of the derivative
action. Under the terms of the settlement, the Company will receive a payment
of $19.5 million from an insurance policy it maintains to cover officers'
liability, less plaintiff's counsel fees and expenses awarded by the court.
The defendants have denied all allegations of wrongdoing, and all parties to
the action have agreed that the settlement is premised upon the litigation
risks associated with the claims that a single former officer non-willfully
failed to implement effectively the Company's compliance policies and
procedures. In agreeing to resolve this matter, plaintiff did not contest the
director-defendants' position that they had lawfully discharged their duties
to GE and that the Company, at all relevant times, has had in existence
detailed plans and procedures designed to promote and enforce compliance with
relevant laws. One share owner has appealed the District Court's order
approving the settlement. The defendants believe the appeal is without merit.
The directors and certain former directors are defendants in a civil
suit purportedly brought on behalf of the Company as a share owner derivative
action (the Bildstein action) which was commenced in New York State Supreme
Court in January 1994. The suit seeks compensatory damages arising out of the
purported failure of the defendants to prevent alleged government contract
fraud and alleged violations of the Foreign Corrupt Practices Act in
connection with U.S. government-funded sales of military equipment to Egypt by
a unit of the Company's former GE Aerospace component. GE Aerospace was
transferred to a new corporation controlled by the stockholders of Martin
Marietta Corporation in 1993. The suit claims that the risk of litigation
arising from the alleged wrongdoing caused the Company to receive less than it
would have otherwise received in connection with the transfer of GE Aerospace.
The suit is in an early stage and the Company plans to move to dismiss the
complaint based on the plaintiff's failure to make a pre-litigation demand,
among other reasons.
As previously reported, on March 12, 1993, a complaint was filed in
United States District Court for the District of Connecticut by ten
employees of the Company's Aerospace business, purportedly on behalf of all
GE Aerospace employees whose GE employment status is or was affected by the
then planned transfer of GE Aerospace to a new company controlled by the
stockholders of Martin Marietta. The complaint sought to clarify and
enforce the plaintiff's claimed rights to pension benefits in accordance
with, and rights to assets then held in, the GE Pension Plan (the "Plan").
The complaint names the Company, the trustees of the GE Pension Trust
("Trust"), and Martin Marietta Corporation and one of its former plan
administrators as defendants. The complaint alleged that the Company's
planned transfer of certain assets of the Trust to a Martin Marietta
pension trust, in connection with the transfer of the Aerospace business,
violated the rights of the plaintiffs under the Plan and applicable
provisions of the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code. The complaint sought equitable and declaratory
relief, including an injunction against transfer of the Plan assets except
under circumstances and protections, if any, approved by the court, an
order that the Company disgorge all profits allegedly received by it as a
result of any such transfer and the making of restitution to the Trust for
alleged investment losses resulting from the Company's treatment of Plan
assets in connection with the transaction or alternatively the transfer of
additional assets from the
(17)
Trust to a new Martin Marietta pension trust, and an order requiring Martin
Marietta to continue to offer transferred employees all accrued pension-
related benefits for which they were eligible under the Plan as of the
closing date of the transfer of the GE Aerospace business to Martin
Marietta.
On March 23, 1993, the Company and Martin Marietta Corporation filed
motions to dismiss the complaint on the basis that the complaint does not
state any claim upon which relief can be granted as a matter of law. This
motion remains pending. On April 2, 1993, the transfer of the Aerospace
business occurred, and on June 7, 1993, the court issued an order denying
plaintiffs' request for injunctive relief.
As previously reported, allegations of various federal law violations,
including alleged antitrust violations involving the Company and DeBeers
Consolidated Mines, Ltd. in the industrial diamonds industry, were made in a
wrongful termination action brought by a former vice president of the Company.
Various allegations of antitrust violations concerning industrial diamonds are
also the subject of two previously reported civil suits against the Company
purportedly brought on behalf of classes of industrial diamond purchasers and
an additional civil suit against the Company brought on behalf of two
corporations engaged in the manufacture and sale of industrial diamonds. On
February 16, 1994, the wrongful termination action was dismissed with
prejudice and the former officer filed a sworn statement conceding that he had
no personal knowledge of any wrongdoing by Company personnel and that he had
become aware that the Company had removed him based on its view of his
performance, not because he was a "whistleblower." On February 17, 1994, an
indictment was returned in the United States District Court in Columbus, Ohio,
following the previously reported grand jury investigation by the United
States Department of Justice, charging the Company and one European employee
of the Company's superabrasives business, and other unrelated parties, with
entering into an anti-competitive agreement in violation of federal antitrust
laws. The Company denies the charges and intends to vigorously contest them.
It believes that none of these cases will have a material adverse effect on
the Company or its business.
Environmental
- -------------
As previously reported, on May 12,1989, the U.S. Environmental
Protection Agency ("EPA") issued an administrative complaint against the
Company alleging violation of regulations issued by EPA under the Toxic
Substances Control Act ("TSCA") relating to disposal and processing of
polychlorinated biphenyls ("PCBs"). The complaint seeks civil penalties of
$225,000. The Company filed an answer denying the alleged violations. On
February 2, 1992, an administrative Law Judge issued a decision assessing a
$40,000 penalty. EPA's Appeals Board lowered the penalty to $25,000. The
Company has filed an appeal.
Also as previously reported, on February 12, 1990, EPA issued an
administrative complaint against the Company alleging violations of
regulations promulgated by EPA under TSCA relating to disposal and storage of
PCBs. The complaint sought a civil penalty of $205,500. EPA has subsequently
issued an amended complaint adding additional allegations of unlawful use of
PCBs, bringing the total civil penalty sought to $365,500.
(18)
The Company has filed answers denying all alleged violations and settlement
discussions are underway. This case presents the same issues as the case
discussed in the preceding paragraph.
As previously reported, EPA has filed five administrative complaints
against GE alleging that GE's use of a system developed by GE for cleaning
PCBs from electrical equipment violated a requirement of TSCA that such
systems be authorized by an EPA permit. Three of the complaints include
counts relating to other alleged violations of EPA regulations applicable to
handling and storage of PCBs. The GE facilities which received the
administrative complaints, the dates the complaints were filed, and the
amounts of civil penalties sought are as follows: Houston Apparatus Service
Center, September 15, 1990, $185,000; Philadelphia Apparatus Service Center,
September 20, 1990, $772,000; Cleveland Apparatus Service Center,
September 25, 1990, $968,000; Chicago Apparatus Service Center, September 25,
1990, $1,107,925; Cincinnati Apparatus Service Center, September 25, 1990,
$1,023,750. The Company has filed an answer denying the alleged violations
and settlement discussions are underway. These cases present the same issues
as the cases discussed in the preceding two paragraphs of this environmental
section.
As previously reported, in June of 1992, EPA issued an administrative
complaint against the Company alleging violations of regulations issued under
TSCA at its Anaheim facility, including improper storage and disposal of PCBs.
The complaint sought penalties of $205,000. On March 9, 1993, EPA amended the
complaint to increase the amount of the penalties being sought to $353,000.
Settlement discussions are underway.
As previously reported, in June of 1992, the State of New York issued a
complaint alleging violations of the state Clean Air Act and Clean Water Act
(unpermitted emissions and discharges in excess of permit limits) at the
Company's Schenectady facility. The complaint seeks $1,039,435 in penalties.
Settlement discussions are underway.
As previously reported, in November of 1992, the New Jersey Department
of Environmental Protection and Energy initiated a proceeding against the
Company seeking $142,000 in penalties for violations of the Clean Water Act at
the Camden facility, including permit violations. The matter was settled in
December 1993 for $88,310.
As previously reported, in January of 1993, the State of Indiana
notified the Company that it would be seeking penalties for violations of the
state Clean Air Act for failing to install required control equipment at its
Ft. Wayne facility. In July of 1993 the state issued a penalty demand of
$150,000. Settlement discussions are underway.
As previously reported, in September of 1993, EPA notified the
Company that it was seeking at least $600,000 in penalties for alleged
violations of the Clean Air Act at its Lynn, Massachusetts Aircraft Engines
facility. The allegations include the failure to undergo required permit
reviews. The Company has supplied information to the Agency, and is
conducting ongoing settlement discussions.
In February of 1994, EPA issued a simultaneous administrative
complaint and consent agreement addressing violations at the Company's Mt.
Vernon, Indiana facility, which included violations of permitted
(19)
conditions for a boiler/industrial furnace burning hazardous waste. The
matter was resolved in February for a penalty of $450,000.
In March of 1994, EPA issued an administrative complaint against the
Company seeking $125,000 in penalties for violations of the Clean Water Act
at its Palmer, Puerto Rico facility, including permit violations.
- -------------------------------
It is the view of management that none of the above described
proceedings will have a material effect upon the Company's earnings, liquidity
or competitive position.
For further information regarding environmental matters, see page 14 of
this Report.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
With respect to "Stock Exchange Information", in the United States,
GE common stock is listed on the New York Stock Exchange (its principal
market) and on the Boston Stock Exchange. GE common stock also is listed
on certain foreign exchanges, including The Stock Exchange, London and the
Tokyo Stock Exchange. Trading, as reported on the New York Stock Exchange,
Inc., Composite Transactions Tape, and dividend information follows:
- ------------------------------------------------------------------------
Common stock market price
------------------------- Dividends
(In dollars) High Low declared
- ------------------------------------------------------------------------
1993
Fourth quarter $107 $92 3/4 $.72
Third quarter 100 7/8 94 1/2 .63
Second quarter 96 3/8 88 1/4 .63
First quarter 91 80 7/8 .63
1992
Fourth quarter 87 1/2 73 1/8 .63
Third quarter 79 3/4 73 .59
Second quarter 79 5/8 72 3/4 .55
First quarter 80 3/4 73 5/8 .55
- ------------------------------------------------------------------------
As of December 31, 1993, there were about 457,000 share owner
accounts of record.
(20)
Item 6. Selected Financial Data
Reported as data for revenues; earnings from continuing operations,
earnings from continuing operations per share; earnings from discontinued
operations, earnings before accounting changes; net earnings; net earnings
per share; dividends declared per share; long-term borrowings; and total
assets appearing on page 43 of the Annual Report to Share Owners for the
fiscal year ended December 31, 1993.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Reported on pages 32-43 (and graphs on pages 25, 32, 33, 37, 38, 39,
40, 41 and 42) of the Annual Report to Share Owners for the fiscal year
ended December 31, 1993.
Item 8. Financial Statements and Supplementary Data
See index under item 14.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
(21)
PART III
Item 10. Directors and Executive Officers of Registrant
Executive Officers of the Registrant (As of March 11, 1994)
Date assumed
Executive Officer
Name Position Age position
- ---- -------- --- ----------------
John F. Welch, Jr. Chairman of the Board and Chief
Executive Officer 58 April 1981
James R. Bunt Vice President and Treasurer 52 January 1993
William J. Conaty Senior Vice President, Human Resources 48 October 1993
Dennis D. Dammerman Senior Vice President, Finance 48 March 1984
Frank P. Doyle Executive Vice President 63 September 1981
Lewis S. Edelheit Senior Vice President, Research and
Development 51 November 1992
Paolo Fresco Vice Chairman and Executive Officer 60 October 1987
Dale F. Frey Vice President and President, GE Investment
Corporation 61 January 1993
David C. Genever-Watling Senior Vice President, GE Industrial
and Power Systems 48 September 1990
Benjamin W. Heineman, Jr. Senior Vice President, General Counsel
and Secretary 50 September 1987
W. James McNerney, Jr. Senior Vice President, GE Asia-Pacific 44 January 1992
Eugene F. Murphy Senior Vice President, GE Aircraft Engines 58 October 1986
Robert L. Nardelli Vice President, GE Transportation Systems 45 February 1992
Robert W. Nelson Vice President, Financial Planning
and Analysis 53 September 1991
John D. Opie Senior Vice President, GE Lighting 56 August 1986
Gary M. Reiner Vice President - Business Development 39 January 1991
Gary L. Rogers Senior Vice President, GE Plastics 49 December 1989
James W. Rogers Vice President, GE Motors 43 May 1991
Brian H. Rowe Chairman, GE Aircraft Engines 62 October 1979
Hellene S. Runtagh Vice President, GE Information Services 45 March 1992
J. Richard Stonesifer Senior Vice President, GE Appliances 57 January 1992
John M. Trani Senior Vice President, GE Medical Systems 48 September 1986
Lloyd G. Trotter Vice President, GE Electrical Distribution
and Control 48 November 1992
All Executive Officers are elected by the Board of Directors for an
initial term which continues until the first Board meeting following the
next annual statutory meeting of share owners and thereafter are elected
for one-year terms or until their successors have been elected.
All Executive Officers have been executives of GE for the last five
years except Robert L. Nardelli, Gary M. Reiner and Lewis S. Edelheit. Mr.
Nardelli, who was an employee of GE from June 1971 through June 1988, was
Executive Vice President and General Manager of J. I. Case, a manufacturer
of construction equipment and farm machinery, from July 1988 to May 1991,
and thereafter President of Camco, a Canadian subsidiary of GE that
manufactures, distributes, sells and services appliances, until February
1992. Mr. Reiner was a Vice President of Boston Consulting Group,
strategic planners and designers, prior to joining GE in 1991. Dr.
Edelheit, who was an employee of GE from 1969 through 1985, was President
and CEO of Quantum Medical Systems, Inc. (Quantum) from 1986 to August
1991, and thereafter Manager - Electronic Systems Research Center, GE
Corporate Research and Development Laboratory, until November 1992.
Quantum is a venture capital-backed medical ultrasound company which was
acquired by Siemens A.G. in July 1990.
(22)
The remaining information called for by this item is incorporated by
reference to "Election of Directors" in the definitive proxy statement
relating to the registrant's Annual Meeting of Share Owners to be held
April 27, 1994.
Item 11. Executive Compensation
Incorporated by reference to "Board of Directors and Committees,"
"Summary Compensation Table," "Stock Appreciation Rights and Stock
Options," and "Retirement Benefits" in the definitive proxy statement
relating to the registrant's Annual Meeting of Share Owners to be held
April 27, 1994.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Incorporated by reference to "Information relating to Directors,
Nominees and Executive Officers" in the registrant's definitive proxy
statement relating to its Annual Meeting of Share Owners to be held
April 27, 1994.
Item 13. Certain Relationships and Related Transactions
Incorporated by reference to "Certain Transactions" in the
registrant's definitive proxy statement relating to its Annual Meeting of
Share Owners to be held April 27, 1994.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)1. Financial statements applicable to General Electric Company and
consolidated affiliates and contained on the page(s) indicated in
the GE Annual Report to Share Owners for the fiscal year ended
December 31, 1993.
Annual 10-K
Report Report
Page(s) Page(s)
------- -------
Statement of earnings for the years
ended December 31, 1993, 1992 and 1991 26 F-2
Statement of financial position at
December 31, 1993 and 1992 28 F-4
Statement of cash flows for the years
ended December 31, 1993, 1992 and 1991 30 F-6
Independent Auditors' Report 44 F-20
Other financial information:
Notes to consolidated financial
statements 45-64 F-21 to F-40
Industry segment information 33-38, F-9 to F-14
60-61 F-36 to F-37
Geographic segment information 62 F-38
Operations by quarter (unaudited) 64 F-40
(a)2. Financial Statement Schedules for General Electric Company and
consolidated affiliates.
(23)
Schedule Page
-------- ----
II Amounts Receivable from Related Parties and F-41
Underwriters, Promoters and Employees Other
than Related Parties
VIII Valuation and Qualifying Accounts F-42
IX Short-Term Borrowings F-43 to F-45
X Supplementary Income Statement Information F-46
The schedules listed in Reg. 210.5-04, except those listed above,
have been omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
(a)3. Exhibit Index
(3) Restated Certificate of Incorporation, as amended, and By-
laws, as amended, of General Electric Company. (i)
(4) Agreement to furnish to the Securities and Exchange
Commission upon request a copy of instruments defining the
rights of holders of certain long-term debt of the
registrant and consolidated subsidiaries.*
(10) All of the following exhibits consist of Executive
Compensation Plans or Arrangements:
(a) General Electric Incentive Compensation Plan as
amended effective July 1, 1991.(ii)
(b) General Electric 1983 Stock Option-Performance Unit
Plan. (iii)
(c) General Electric Supplementary Pension Plan as
amended effective July 1, 1991.(iv)
(d) Amendment to General Electric Supplementary Pension
Plan dated May 22, 1992.(v)
(e) Amendment to General Electric Supplementary Pension
Plan dated September 10, 1993.*
(f) General Electric Deferred Compensation Plan for
Directors as amended May 25, 1990.(vi)
(g) General Electric Insurance Plan for Directors.(vii)
(h) General Electric Financial Planning Program, as
amended through September 1993.*
(i) General Electric Supplemental Life Insurance
Program, as amended February 8, 1991.(viii)
(j) General Electric Directors' Retirement and Optional
Life Insurance Plan.(ix)
(24)
(k) General Electric 1987 Executive Deferred Salary
Plan.(x)
(l) General Electric 1989 Stock Option Plan for Non-
Employee Directors.(xi)
(m) General Electric 1990 Long-Term Incentive Plan.(xii)
(n) General Electric 1991 Executive Deferred Salary
Plan. (xiii)
(o) General Electric 1994 Executive Deferred Salary
Plan. *
(p) General Electric Directors' Charitable Gift Plan, as
amended through May 1993. *
(q) Restated Employment Agreement, dated January 2,
1992, and Restated U.K. Employment Agreement, dated
January 3, 1992, in each case between the registrant
and P. Fresco, an Executive Officer and Director of
the registrant.(xiv)
(r) General Electric Leadership Life Insurance Program,
effective January 1, 1994. *
(11) Statement re Compilation of Per Share Earnings.*
(12) Computation of Ratio of Earnings to Fixed Charges.*
(21) Subsidiaries of Registrant.*
(23) Consent of independent auditors incorporated by reference
in each Prospectus constituting part of the Registration
Statements on Form S-3 (Registration Nos. 33-29024,
33-3908, 2-82072, 33-37106, 33-35922, 33-44593, 33-39596,
33-39596-01, 33-47181, 33-47085 and 33-50639) and on Form
S-8 (Registration Nos. 33-4239, 33-23441,
33-24679, 2-84145, 33-47500 and 33-49053).*
(24) Power of attorney.*
(99)(a)Income Maintenance Agreement, dated March 28, 1991,
between the registrant and General Electric Capital
Corporation.(xv)
(b)Undertaking for Inclusion in Registration Statements on
Form S-8 of General Electric Company. (xvi)
Notes to Exhibits
- -----------------
(i) Incorporated by reference to Exhibit of the same number to
General Electric Quarterly Report on Form 10-Q (Commission file number
1-35) for the quarter ended June 30, 1993.
(25)
(ii) Incorporated by reference to Exhibit of the same number to
General Electric Annual Report on Form 10-K (Commission file number 1-35)
for the fiscal year ended December 31, 1991.
(iii) Incorporated by reference to Exhibit of the same number to
General Electric Annual Report on Form 10-K (Commission file number 1-35)
for the fiscal year ended December 31, 1988.
(iv) Incorporated by reference to Exhibit 10(e) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1991.
(v) Incorporated by reference to Exhibit 10(d) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1992.
(vi) Incorporated by reference to Exhibit 10(f) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1990.
(vii) Incorporated by reference to Exhibit 10(i) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1980.
(viii) Incorporated by reference to Exhibit 10(i) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1990.
(ix) Incorporated by reference to Exhibit 10(j) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1986.
(x) Incorporated by reference to Exhibit 10(k) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1987.
(xi) Incorporated by reference to Exhibit A to the General Electric
Proxy Statement for its Annual Meeting of Share Owners held on April 26,
1989.
(xii) Incorporated by reference to Exhibit A to the General Electric
Proxy Statement for its Annual Meeting of Share Owners held April 25, 1990.
(xiii) Incorporated by reference to Exhibit 10(n) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1990.
(xiv) Incorporated by reference to Exhibit 10(o) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1992.
(xv) Incorporated by reference to Exhibit 28(a) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1990.
(26)
(xvi) Incorporated by reference to Exhibit 99(b) to General Electric
Annual Report on Form 10-K (Commission file number 1-35) for the fiscal
year ended December 31, 1992.
* Filed electronically herewith.
(b) Reports on Form 8-K during the quarter ended December 31, 1993.
There were no reports on Form 8-K filed by the registrant during the
fourth quarter of 1993.
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities and
Exchange Act of 1934, the registrant has duly caused this annual report on
Form 10-K for the fiscal year ended December 31, 1993, to be signed on its
behalf by the undersigned, and in the capacities indicated, thereunto duly
authorized in the Town of Fairfield and State of Connecticut on the 11th
day of March 1994.
General Electric Company
(Registrant)
By Dennis D. Dammerman
-----------------------------
Senior Vice President-Finance
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signer Title Date
------ ----- ----
Dennis D. Dammerman
- ---------------------------
Senior Vice President-Finance Principal Financial March 11, 1994
Officer
Philip D. Ameen
- ---------------------------
Comptroller Principal Accounting March 11, 1994
Officer
John F. Welch, Jr.* Chairman of the Board of Directors
(Principal Executive Officer)
H. Brewster Atwater, Jr.* Director
D. Wayne Calloway* Director
Silas S. Cathcart* Director
Lawrence E. Fouraker* Director
Paolo Fresco* Director
Claudio X. Gonzalez* Director
Henry H. Henley, Jr.* Director
David C. Jones Director
Robert E. Mercer* Director
Gertrude G. Michelson* Director
Barbara Scott Preiskel* Director
Frank H. T. Rhodes* Director
Andrew C. Sigler* Director
Douglas A. Warner III* Director
A majority of the Board of Directors
*By Benjamin W. Heineman, Jr.
--------------------------------
Attorney-in-fact
March 11, 1994
(27)
Annual Report Page 25
--------------------------------------------------------------------------
|
| FINANCIAL SECTION
--------------------------------------------------------------------------
|
| CONTENTS
Independent Auditors' Report 44
Audited Financial Statements
Earnings 26
Financial Position 28
Cash Flows 30
Notes to Consolidated Financial Statements 45
Management's Discussion
Operations
Consolidated Operations 32
GE Operations 33
Industry Segments 33
GECS Operations 36
International Operations 38
Financial Resources and Liquidity 39
Selected Financial Data 42
Financial Responsibility 44
- ------------------------------------------------------------------------------------------------------------
CHART: REVENUES (In billions)
1989 1990 1991 1992 1993
$49.135 $52.619 $54.629 $57.073 $60.562
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
CHART: EARNINGS PER SHARE BEFORE ACCOUNTING CHANGES (In dollars)
1989 1990 1991 1992 1993
$4.36 $4.85 $5.10 $5.51 $6.06
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
CHART: DIVIDENDS PER SHARE (In dollars)
1989 1990 1991 1992 1993
$1.70 $1.92 $2.08 $2.32 $2.61
- ------------------------------------------------------------------------------------------------------------
F-1
Annual Report Page 26
--------------------------------------------------------------------------
|
|STATEMENT OF EARNINGS
General Electric Company
and consolidated affiliates
-----------------------------------
For the years ended December 31 (In millions) 1993 1992 1991
- -------------------------------------------------------------- -----------------------------------
REVENUES
Sales of goods $29,509 $29,575 $29,434
Sales of services 8,268 8,331 8,062
Other income (note 3) 735 799 792
Earnings of GECS before accounting change - - -
GECS revenues from operations (note 4) 22,050 18,368 16,341
------- ------- -------
Total revenues 60,562 57,073 54,629
------- ------- -------
COSTS AND EXPENSES (note 5)
Cost of goods sold 22,606 22,107 21,498
Cost of services sold 6,308 6,273 6,373
Interest and other financial charges (note 7) 6,989 6,860 7,401
Insurance losses and policyholder and annuity benefits 3,172 1,957 1,623
Provision for losses on financing receivables (note 8) 987 1,056 1,102
Other costs and expenses 13,774 12,494 10,834
Minority interest in net earnings of consolidated
affiliates 151 53 72
------- ------- -------
Total costs and expenses 53,987 50,800 48,903
------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
ACCOUNTING CHANGES 6,575 6,273 5,726
Provision for income taxes (note 9) (2,151) (1,968) (1,742)
------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS BEFORE ACCOUNTING CHANGES 4,424 4,305 3,984
------- ------- -------
Earnings from discontinued operations, net of income taxes
of $44, $248 and $259, respectively (note 2) 75 420 451
Gain on transfer of discontinued operations, net
of income taxes of $752 678 - -
------- ------- -------
EARNINGS FROM DISCONTINUED OPERATIONS 753 420 451
------- ------- -------
EARNINGS BEFORE ACCOUNTING CHANGES 5,177 4,725 4,435
Cumulative effects of accounting changes (notes 6 and 22) (862) - (1,799)
------- ------- -------
Net earnings $ 4,315 $ 4,725 $ 2,636
======= ======= =======
- -------------------------------------------------------------- -----------------------------------
NET EARNINGS PER SHARE (in dollars)
Continuing operations before accounting changes $ 5.18 $ 5.02 $ 4.58
Discontinued operations before accounting changes 0.88 0.49 0.52
------- ------- -------
Earnings before accounting changes 6.06 5.51 5.10
Cumulative effects of accounting changes (1.01) - (2.07)
------- ------- -------
Net earnings per share $5.05 $5.51 $3.03
======= ======= =======
- -------------------------------------------------------------- ------------------------------------
DIVIDENDS DECLARED PER SHARE (in dollars) $2.61 $2.32 $2.08
- --------------------------------------------------------------------------------------------------------
The notes to consolidated financial statements on pages 45-64 are an integral part of this statement.
F-2
Annual Report Page 27
- ---------------------------------------------------------------------------
GE GECS
------------------------------- -----------------------------
For the years ended December 31 (In millions) 1993 1992 1991 1993 1992 1991
- ---------------------------------------------------------- ------------------------------ -----------------------------
REVENUES
Sales of goods $29,533 $29,595 $29,446 $ - $ - $ -
Sales of services 8,289 8,348 8,075 - - -
Other income (note 3) 730 812 798 - - -
Earnings of GECS before accounting change 1,807 1,499 1,275 - - -
GECS revenues from operations (note 4) - - - 22,137 18,440 16,399
------- ------- ------- ------- ------- -------
Total revenues 40,359 40,254 39,594 22,137 18,440 16,399
------- ------- ------- ------- ------- -------
COSTS AND EXPENSES (note 5)
Cost of goods sold 22,630 22,127 21,510 - - -
Cost of services sold 6,329 6,290 6,386 - - -
Interest and other financial charges (note 7) 525 768 893 6,473 6,122 6,536
Insurance losses and policyholder and annuity benefits - - - 3,172 1,957 1,623
Provision for losses on financing receivables (note 8) - - - 987 1,056 1,102
Other costs and expenses 5,124 5,319 5,422 8,723 7,230 5,448
Minority interest in net earnings of consolidated
affiliates 17 13 39 134 40 33
------- ------- ------- ------- ------- -------
Total costs and expenses 34,625 34,517 34,250 19,489 16,405 14,742
------- ------- ------- ------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
ACCOUNTING CHANGES 5,734 5,737 5,344 2,648 2,035 1,657
Provision for income taxes (note 9) (1,310) (1,432) (1,360) (841) (536) (382)
------- ------- ------- ------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS BEFORE ACCOUNTING CHANGES 4,424 4,305 3,984 1,807 1,499 1,275
------- ------- ------- ------- ------- -------
Earnings from discontinued operations, net of income taxes
of $44, $248 and $259, respectively (note 2) 75 420 451 - - -
Gain on transfer of discontinued operations, net
of income taxes of $752 678 - - - - -
------- ------- ------- ------- ------- -------
EARNINGS FROM DISCONTINUED OPERATIONS 753 420 451 - - -
------- ------- ------- ------- ------- -------
EARNINGS BEFORE ACCOUNTING CHANGES 5,177 4,725 4,435 1,807 1,499 1,275
Cumulative effects of accounting changes (notes 6 and 22) (862) - (1,799) - - (19)
------- ------- ------- ------- ------- -------
NET EARNINGS $ 4,315 $ 4,725 $ 2,636 $ 1,807 $ 1,499 $ 1,256
======= ======= ======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------------------
In the supplemental consolidating data on this page, "GE" means the basis of consolidation as described in note 1 to the
consolidated financial statements; "GECS" means General Electric Capital Services, Inc. and all of its affiliates and associated
companies. Transactions between GE and GECS have been eliminated from the "General Electric Company and consolidated affiliates"
columns on page 26.
F-3
Annual Report Page 28
--------------------------------------------------------------------------
|
|STATEMENT OF FINANCIAL POSITION
General Electric Company
and consolidated affiliates
-------------------------------
At December 31 (In millions) 1993 1992
- --------------------------------------------------------------------- -------------------------------
ASSETS
Cash and equivalents $ 3,218 $ 3,129
GECS trading securities (note 10) 30,165 24,154
Investment securities (note 11) 26,811 11,256
Securities purchased under agreements to resell 43,463 26,788
Current receivables (note 12) 8,195 7,150
Inventories (note 13) 3,824 4,574
GECS financing receivables (investment in time sales, loans and
financing leases) - net (note 14) 63,948 59,388
Other GECS receivables 15,616 8,025
Property, plant and equipment (including equipment leased
to others) - net (note 15) 21,228 20,387
Investment in GECS - -
Intangible assets (note 16) 10,364 9,510
All other assets (note 17) 24,674 16,625
Net assets of discontinued operations - 1,890
-------- --------
TOTAL ASSETS $251,506 $192,876
======== ========
- --------------------------------------------------------------------- -------------------------------
LIABILITIES AND EQUITY
Short-term borrowings (note 18) $ 62,135 $ 56,389
Accounts payable, principally trade accounts 11,956 8,245
Securities sold under agreements to repurchase 56,669 36,014
Securities sold but not yet purchased, at market (note 19) 15,332 11,413
Progress collections and price adjustments accrued 2,608 2,150
Dividends payable 615 539
All other GE current costs and expenses accrued (note 20) 6,414 5,725
Long-term borrowings (note 18) 28,270 25,376
Insurance reserves and annuity benefits (note 21) 22,909 7,948
All other liabilities (note 22) 12,009 9,734
Deferred income taxes (note 23) 5,109 4,540
-------- --------
Total liabilities 224,026 168,073
-------- --------
Minority interest in equity of consolidated affiliates (note 24) 1,656 1,344
-------- --------
Common stock (926,564,000 shares issued) 584 584
Other capital 1,398 755
Retained earnings 28,613 26,527
Less common stock held in treasury (4,771) (4,407)
-------- --------
Total share owners' equity (notes 25 and 26) 25,824 23,459
-------- --------
TOTAL LIABILITIES AND EQUITY $251,506 $192,876
======== ========
- -----------------------------------------------------------------------------------------------------------
The notes to consolidated financial statements on pages 45-64 are an integral part of this statement.
F-4
Annual Report Page 29
- ---------------------------------------------------------------------------
GE GECS
--------------------- -----------------------
At December 31 (In millions) 1993 1992 1993 1992
- ----------------------------------------------------------------------- --------------------- -----------------------
ASSETS
Cash and equivalents $ 1,536 $ 1,189 $ 1,682 $ 1,940
GECS trading securities (note 10) - - 30,165 24,154
Investment securities (note 11) 19 32 26,792 11,224
Securities purchased under agreements to resell - - 43,463 26,788
Current receivables (note 12) 8,561 7,462 - -
Inventories (note 13) 3,824 4,574 - -
GECS financing receivables (investment in time sales, loans and
financing leases) - net (note 14) - - 63,948 59,388
Other GECS receivables - - 15,799 8,476
Property, plant and equipment (including equipment leased
to others) - net (note 15) 9,542 9,932 11,686 10,455
Investment in GECS 10,809 8,884 - -
Intangible assets (note 16) 6,466 6,607 3,898 2,903
All other assets (note 17) 10,377 7,505 14,297 9,196
Net assets of discontinued operations - 1,890 - -
------- ------- -------- --------
TOTAL ASSETS $51,134 $48,075 $211,730 $154,524
======= ======= ======== ========
- ----------------------------------------------------------------------- --------------------- -----------------------
LIABILITIES AND EQUITY
Short-term borrowings (note 18) $ 2,391 $ 3,448 $ 60,003 $ 53,183
Accounts payable, principally trade accounts 2,331 2,217 9,885 6,624
Securities sold under agreements to repurchase - - 56,669 36,014
Securities sold but not yet purchased, at market (note 19) - - 15,332 11,413
Progress collections and price adjustments accrued 2,608 2,150 - -
Dividends payable 615 539 - -
All other GE current costs and expenses accrued (note 20) 6,414 5,725 - -
Long-term borrowings (note 18) 2,413 3,420 25,885 21,957
Insurance reserves and annuity benefits (note 21) - - 22,909 7,948
All other liabilities (note 22) 8,482 7,096 3,529 2,638
Deferred income taxes (note 23) (299) (329) 5,408 4,869
------- ------- -------- --------
Total liabilities 24,955 24,266 199,620 144,646
------- ------- -------- --------
Minority interest in equity of consolidated affiliates (note 24) 355 350 1,301 994
------- ------- -------- --------
Common stock (926,564,000 shares issued) 584 584 1 1
Other capital 1,398 755 2,596 1,868
Retained earnings 28,613 26,527 8,212 7,015
Less common stock held in treasury (4,771) (4,407) - -
------- ------- -------- --------
Total share owners' equity (notes 25 and 26) 25,824 23,459 10,809 8,884
------- ------- -------- --------
TOTAL LIABILITIES AND EQUITY $51,134 $48,075 $211,730 $154,524
======= ======= ======== ========
- --------------------------------------------------------------------------------------------------------------------------------
In the supplemental consolidating data on this page, "GE" means the basis of consolidation as described in note 1 to the
consolidated financial statements; "GECS" means General Electric Capital Services, Inc. and all of its affiliates and associated
companies. Transactions between GE and GECS have been eliminated from the "General Electric Company and consolidated affiliates"
columns on page 28.
F-5
Annual Report Page 30
--------------------------------------------------------------------------
|
| STATEMENT OF CASH FLOWS
General Electric Company
and consolidated affiliates
------------------------------------
For the years ended December 31 (In millions) 1993 1992 1991
- --------------------------------------------------------------- ------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 4,315 $ 4,725 $ 2,636
Less earnings from discontinued operations (753) (420) (451)
Adjustments to reconcile net earnings to cash provided
from operating activities
Cumulative effects of accounting changes 862 - 1,799
Depreciation, depletion and amortization 3,261 2,818 2,654
Earnings retained by GECS - - -
Deferred income taxes 461 707 826
Decrease (increase) in GE current receivables (571) 135 (215)
Decrease in GE inventories 750 820 378
Increase (decrease) in accounts payable 3,345 57 1,151
Increase in insurance reserves 1,479 703 725
Provision for losses on financing receivables 987 1,056 1,102
Net change in certain broker-dealer accounts 382 1,018 (1,548)
All other operating activities (4,407) (2,111) (1,952)
-------- -------- --------
Net cash from continuing operations 10,111 9,508 7,105
Net cash from discontinued operations 76 741 392
-------- -------- --------
CASH PROVIDED FROM OPERATING ACTIVITIES 10,187 10,249 7,497
-------- -------- --------
CASH FLOWS FROM I