1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
--------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 1-35
GENERAL ELECTRIC COMPANY
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 14-0689340
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3135 Easton Turnpike, Fairfield, CT 06431-0001
- ---------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (203) 373-2211
--------------
-------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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
--- ---
There were 3,271,879,000 shares with a par value of $0.16 per share
outstanding at March 31, 1999.
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED STATEMENT OF EARNINGS
GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES
(DOLLARS, EXCEPT PER-SHARE AMOUNTS, IN MILLIONS)
THREE MONTHS ENDED MARCH 31 (UNAUDITED)
--------------------------------------------------------------------
CONSOLIDATED GE GECS
-------------------- -------------------- ---------------------
1999 1998 1999 1998 1999 1998
-------- -------- -------- -------- -------- --------
Sales of goods $ 10,011 $ 9,616 $ 8,370 $ 7,991 $ 1,640 $ 1,626
Sales of services 3,352 3,359 3,426 3,417 -- --
Earnings of GECS -- -- 1,032 881 -- --
GECS revenues from services 10,699 9,484 -- -- 10,743 9,525
Other income 103 167 118 175 -- --
-------- -------- -------- -------- -------- --------
Total revenues 24,165 22,626 12,946 12,464 12,383 11,151
-------- -------- -------- -------- -------- --------
Cost of goods sold 7,237 7,063 5,725 5,582 1,511 1,482
Cost of services sold 2,330 2,402 2,404 2,460 -- --
Interest and other financial charges 2,263 2,212 184 207 2,113 2,025
Insurance losses and policyholder and annuity benefits 2,619 2,213 -- -- 2,619 2,213
Provision for losses on financing receivables 379 332 -- -- 379 332
Other costs and expenses 6,039 5,433 1,741 1,648 4,323 3,814
Minority interest in net earnings of consolidated
affiliates 54 56 16 23 38 33
-------- -------- -------- -------- -------- --------
Total costs and expenses 20,921 19,711 10,070 9,920 10,983 9,899
-------- -------- -------- -------- -------- --------
Earnings before income taxes 3,244 2,915 2,876 2,544 1,400 1,252
Provision for income taxes (1,089) (1,024) (721) (653) (368) (371)
-------- -------- -------- -------- -------- --------
Net earnings $ 2,155 $ 1,891 $ 2,155 $ 1,891 $ 1,032 $ 881
======== ======== ======== ======== ======== ========
Net earnings per share
Diluted $ 0.65 $ 0.57
Basic $ 0.66 $ 0.58
Dividends declared per share $ 0.35 $ 0.30
<FN>
See notes to condensed consolidated financial statements. Consolidating data are
shown for "GE" and "GECS." Transactions between GE and GECS have been eliminated
from the "consolidated" columns.
</FN>
3
CONDENSED STATEMENT OF FINANCIAL POSITION
GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES
(DOLLARS IN MILLIONS)
CONSOLIDATED GE GECS
-------------------- -------------------- --------------------
3/31/99 12/31/98 3/31/99 12/31/98 3/31/99 12/31/98
-------- -------- -------- -------- -------- --------
Cash and equivalents $ 4,596 $ 4,317 $ 1,191 $ 1,175 $ 3,780 $ 3,342
Investment securities 78,493 78,717 369 259 78,124 78,458
Current receivables 8,354 8,224 8,529 8,483 -- --
Inventories 6,398 6,049 5,785 5,305 613 744
Financing receivables - net 119,941 121,566 -- -- 119,941 121,566
Other GECS receivables 29,186 24,789 -- -- 30,056 25,973
Property, plant and equipment (including equipment
leased to others) - net 35,645 35,730 11,418 11,694 24,227 24,036
Investment in GECS -- -- 19,857 19,727 -- --
Intangible assets - net 24,330 23,635 10,948 9,996 13,382 13,639
All other assets 54,793 52,908 17,791 18,031 37,607 35,539
-------- -------- -------- -------- -------- --------
Total assets $361,736 $355,935 $ 75,888 $ 74,670 $307,730 $303,297
======== ======== ======== ======== ======== ========
Short-term borrowings $116,738 $115,378 $ 3,402 $ 3,466 $114,488 $113,162
Accounts payable, principally trade accounts 11,959 12,502 4,787 4,845 8,098 8,815
Other GE current liabilities 14,515 13,699 14,518 13,619 -- --
Long-term borrowings 60,502 59,663 670 681 59,878 59,038
Insurance liabilities, reserves and annuity benefits 80,271 77,259 -- -- 80,271 77,259
All other liabilities 25,049 24,939 13,024 12,613 11,923 12,247
Deferred income taxes 9,228 9,340 (125) (250) 9,353 9,590
-------- -------- -------- -------- -------- --------
Total liabilities 318,262 312,780 36,276 34,974 284,011 280,111
-------- -------- -------- -------- -------- --------
Minority interest in equity of consolidated
affiliates 4,681 4,275 819 816 3,862 3,459
-------- -------- -------- -------- -------- --------
Accumulated unrealized gains on investment
securities - net <F1> 2,018 2,402 2,018 2,402 1,932 2,376
Accumulated currency translation adjustments <F1> (1,126) (738) (1,126) (738) (287) (215)
Common stock (3,271,879,000 and 3,271,296,000
shares outstanding at March 31, 1999 and
December 31, 1998, respectively) 594 594 594 594 1 1
Other capital 7,399 6,808 7,399 6,808 2,490 2,490
Retained earnings 49,563 48,553 49,563 48,553 15,721 15,075
Less common stock held in treasury (19,655) (18,739) (19,655) (18,739) -- --
-------- -------- -------- -------- -------- --------
Total share owners' equity 38,793 38,880 38,793 38,880 19,857 19,727
-------- -------- -------- -------- -------- --------
Total liabilities and equity $361,736 $355,935 $ 75,888 $ 74,670 $307,730 $303,297
======== ======== ======== ======== ======== ========
<FN>
See notes to condensed consolidated financial statements. Consolidating data are
shown for "GE" and "GECS." March data are unaudited. Transactions between GE and
GECS have been eliminated from the "consolidated" columns.
<F1> The sum of accumulated unrealized gains on investment securities and
accumulated currency translation adjustments constitutes "Accumulated
nonowner changes other than earnings," and was $892 million and $1,664
million at March 31, 1999 and December 31, 1998, respectively.
</FN>
4
CONDENSED STATEMENT OF CASH FLOWS
GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES
(DOLLARS IN MILLIONS)
THREE MONTHS ENDED MARCH 31 (UNAUDITED)
--------------------------------------------------------------------
CONSOLIDATED GE GECS
---------------------- -------------------- --------------------
1999 1998 1999 1998 1999 1998
-------- -------- -------- -------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 2,155 $ 1,891 $ 2,155 $ 1,891 $ 1,032 $ 881
Adjustments to reconcile net earnings to cash
provided from (used for) operating activities
Depreciation and amortization of property, plant
and equipment 1,125 1,077 440 421 685 656
Amortization of goodwill and other intangibles 388 346 124 128 264 218
Earnings retained by GECS -- -- (646) (378) -- --
Deferred income taxes 188 174 117 106 71 68
Decrease in GE current receivables 480 704 564 706 -- --
Decrease (increase) in inventories (219) (126) (350) (130) 131 4
Increase (decrease) in accounts payable (666) 295 (97) (35) (801) 316
Increase in insurance liabilities, reserves and 1,115 1,161 -- -- 1,115 1,161
annuity benefits
Provision for losses on financing receivables 379 332 -- -- 379 332
All other operating activities (675) (2,247) (238) (1,201) (321) (957)
-------- -------- -------- -------- -------- --------
Cash from operating activities 4,270 3,607 2,069 1,508 2,555 2,679
-------- -------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (including
equipment leased to others) (1,656) (1,921) (288) (361) (1,368) (1,560)
Net increase in GECS financing receivables (251) (246) -- -- (251) (246)
Payments for principal businesses purchased (4,302) (1,438) (177) (752) (4,125) (686)
All other investing activities (76) (769) 207 (134) 32 (712)
-------- -------- -------- -------- -------- --------
Cash used for investing activities (6,285) (4,374) (258) (1,247) (5,712) (3,204)
-------- -------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in borrowings (maturities 90 days or less) 3,537 8,445 (50) 1,768 3,489 6,477
Newly issued debt (maturities longer than 90 days) 7,830 5,651 95 86 7,725 5,565
Repayments and other reductions (maturities
longer than 90 days) (7,696) (11,625) (204) (590) (7,492) (11,035)
Net purchase of GE shares for treasury (490) (954) (490) (954) -- --
Dividends paid to share owners (1,146) (979) (1,146) (979) (386) (503)
All other financing activities 259 (213) -- -- 259 (213)
-------- -------- -------- -------- -------- --------
Cash from (used for) financing activities 2,294 325 (1,795) (669) 3,595 291
-------- -------- -------- -------- -------- --------
Increase (decrease) in cash and equivalents 279 (442) 16 (408) 438 (234)
Cash and equivalents at beginning of year 4,317 5,861 1,175 1,157 3,342 4,904
-------- -------- -------- -------- -------- --------
Cash and equivalents at March 31 $ 4,596 $ 5,419 $ 1,191 $ 749 $ 3,780 $ 4,670
======== ======== ======== ======== ======== ========
<FN>
See notes to condensed consolidated financial statements. Consolidating data are
shown for "GE" and "GECS." Transactions between GE and GECS have been eliminated
from the "consolidated" columns.
</FN>
5
SUMMARY OF OPERATING SEGMENTS
GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES
THREE MONTHS ENDED
MARCH 31 (UNAUDITED)
----------------------
(DOLLARS IN MILLIONS) 1999 1998
-------- --------
REVENUES
GE
Aircraft Engines $ 2,390 $ 2,276
Appliances 1,201 1,222
Industrial Products and Systems 2,539 2,560
NBC 1,180 1,257
Plastics 1,615 1,602
Power Systems 1,695 1,596
Technical Products and Services 1,495 1,114
Eliminations (309) (230)
-------- --------
Total GE segment revenues 11,806 11,397
Corporate items 108 186
GECS net earnings 1,032 881
-------- --------
Total GE revenues 12,946 12,464
GECS segment revenues 12,383 11,151
Eliminations <F1> (1,164) (989)
-------- --------
CONSOLIDATED REVENUES $ 24,165 $ 22,626
======== ========
SEGMENT PROFIT
GE
Aircraft Engines $ 481 $ 419
Appliances 161 165
Industrial Products and Systems 393 393
NBC 334 299
Plastics 397 390
Power Systems 182 143
Technical Products and Services 268 234
-------- --------
Total GE operating profit 2,216 2,043
GECS net earnings 1,032 881
-------- --------
Total segment profit 3,248 2,924
GE interest and other financial charges (184) (207)
GE provision for income taxes (721) (653)
Corporate items and eliminations (188) (173)
-------- --------
CONSOLIDATED NET EARNINGS $ 2,155 $ 1,891
======== ========
<FN>
<F1> Principally the elimination of GECS net earnings.
</FN>
6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying condensed quarterly financial statements
represent the consolidation of General Electric Company and all companies which
it directly or indirectly controls, either through majority ownership or
otherwise. Reference is made to note 1 to the consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1998. That note discusses consolidation and financial statement
presentation. As used in this Report and in the Report on Form 10-K, "GE"
represents the adding together of all affiliated companies except General
Electric Capital Services, Inc. ("GECS"), which is presented on a one-line
basis; GECS consists of General Electric Capital Services, Inc. and all of its
affiliates; and "consolidated" represents the adding together of GE and GECS
with the effects of transactions between the two eliminated.
2. The condensed consolidated quarterly financial statements are
unaudited. These statements include all adjustments (consisting of normal
recurring accruals) considered necessary by management to present a fair
statement of the results of operations, financial position and cash flows. The
results reported in these condensed consolidated financial statements should not
be regarded as necessarily indicative of results that may be expected for the
entire year.
3. In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES (the "Statement"). The Statement requires
that, upon adoption, all derivative instruments (including certain derivative
instruments embedded in other contracts) be recognized in the balance sheet at
fair value, and that changes in such fair values be recognized in earnings
unless specific hedging criteria are met. Changes in the values of derivatives
that meet these hedging criteria will ultimately offset related earnings effects
of the hedged items; effects of certain changes in fair value are recorded in
equity pending recognition in earnings. GE will adopt the Statement on January
1, 2000. The impact of adoption will be determined by several factors, including
the specific hedging instruments in place and their relationships to hedged
items, as well as market conditions. Management has not estimated the effect of
adoption as it believes that such determination will not be meaningful until
closer to the adoption date.
4. A summary of changes in share owners' equity that do not result
directly from transactions with share owners is provided below.
THREE MONTHS ENDED
------------------
(DOLLARS IN MILLIONS) 3/31/99 3/31/98
------- -------
Net earnings $ 2,155 $ 1,891
Unrealized gains (losses) on investment securities - net (384) 322
Foreign currency translation adjustments - net (388) (153)
------- -------
Total $ 1,383 $ 2,060
======= =======
7
5. Inventories consisted of the following:
AT
-------------------
(DOLLARS IN MILLIONS) 3/31/99 12/31/98
------- --------
GE
Raw materials and work in process $ 3,406 $ 3,154
Finished goods 3,143 2,967
Unbilled shipments 238 195
Revaluation to LIFO (1,002) (1,011)
------- -------
5,785 5,305
------- -------
GECS
Finished goods 613 744
------- -------
Total $ 6,398 $ 6,049
======= =======
6. Property, plant and equipment (including equipment leased to
others) -- net, consisted of the following:
AT
---------------------
(DOLLARS IN MILLIONS) 3/31/99 12/31/98
------- --------
ORIGINAL COST
- - GE $28,297 $28,310
- - GECS 33,257 32,790
------- -------
Total 61,554 61,100
------- -------
ACCUMULATED DEPRECIATION AND AMORTIZATION
- - GE 16,879 16,616
- - GECS 9,030 8,754
------- -------
Total 25,909 25,370
------- -------
PROPERTY, PLANT AND EQUIPMENT -- NET
- - GE 11,418 11,694
- - GECS 24,227 24,036
------- -------
Total $35,645 $35,730
======= =======
8
7. GE's authorized common stock consisted of 4,400,000,000 shares
having a par value of $0.16 each. Information related to the calculation of
earnings per share follows.
THREE MONTHS ENDED
---------------------------------
(DOLLAR AMOUNTS AND SHARES IN MILLIONS; 3/31/99 3/31/98
--------------- ---------------
PER-SHARE AMOUNTS IN DOLLARS) DILUTED BASIC DILUTED BASIC
------- ----- ------- -----
CONSOLIDATED OPERATIONS
Net earnings available to common
share owners $2,155 $2,155 $1,891 $1,891
Dividend equivalents -- net of tax 2 -- 3 --
------ ------ ------ ------
Net earnings available for per-share
calculation $2,157 $2,155 $1,894 $1,891
------ ------ ------ ------
AVERAGE EQUIVALENT SHARES
Shares of GE common stock 3,272 3,272 3,269 3,269
Employee compensation-related shares,
including stock options 55 -- 66 --
------ ------ ------ ------
Total average equivalent shares 3,327 3,272 3,335 3,269
------ ------ ------ ------
Net earnings per share $ 0.65 $ 0.66 $ 0.57 $ 0.58
====== ====== ====== ======
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
A. RESULTS OF OPERATIONS -- FIRST QUARTER OF 1999 COMPARED WITH FIRST
QUARTER OF 1998
General Electric Company's earnings per share increased 14% to $.65,
up from last year's $.57, and earnings increased 14% to $2.155 billion. Both
earnings per share and earnings were records for the quarter.
Revenues for the first quarter of 1999, including acquisitions, rose
to a record $24.2 billion, 7% higher than last year's quarter, reflecting
continued growth from globalization and product services.
GE's sales of goods and services were $11.8 billion for the first
three months of 1999, an increase of 3% from 1998. Volume increased by 4%,
reflecting growth across most businesses. The effects of selling prices varied
widely across businesses and overall were down slightly.
GE's first-quarter operating margin increased to 16.3% of sales, up
from last year's 15.1%, and was a record for the quarter. The first-quarter
increase demonstrates the increasing benefits from GE's product services and Six
Sigma quality initiatives.
GE Capital Services' first-quarter earnings rose to $1,032 million,
17% higher than last year's $881 million. The record results reflected the
globalization and diversity of GE Capital's 28 businesses, with double-digit
increases in all five of its operating activities.
Cash generated from GE's operating activities was $2.1 billion in
the first quarter, up 37% from last year's $1.5 billion. As part of the six-year
$17 billion share repurchase program, GE purchased $425 million of its stock
during the first quarter to reach $14.0 billion -- 292 million shares --
purchased since December 1994.
9
As discussed in the 1998 GE Annual Report on Form 10-K, GE and GECS
are applying a Six Sigma quality approach to identify and mitigate Year 2000
issues in their information systems, products, facilities and suppliers. That
approach includes a fourth and final phase -- the control phase -- for the
completion, testing and continued monitoring of Year 2000 readiness and the
completion of necessary contingency plans. GE and GECS are developing, testing
and implementing contingency plans to ameliorate any potential internal or
external disruption of critical business processes. The specific actions
identified in such contingency plans differ depending on circumstances, but most
often include manual work-arounds, deployment of backup or secondary
technologies, rearranging work schedules, and substitution of suppliers, as
appropriate. While the Company does not expect significant disruptions of
critical business processes caused by internal Year 2000 issues, the likelihood
of externally-caused disruptions and the ability of the contingency plans to
ameliorate the effects of any such externally-caused disruptions is not
determinable. The total estimate of Year 2000 expenditures, adjusted for
increases related to acquired companies, is in line with previous projections.
The activities related to Year 2000 efforts necessarily involve estimates and
projections of activities and resources that will be required in the future.
These estimates and projections could change as work progresses.
SEGMENT ANALYSIS
The comments that follow compare revenues and operating profit by
industry segment for the first quarters of 1999 and 1998.
o AIRCRAFT ENGINES reported a 5% increase in revenues, reflecting
higher volume in commercial engines and continuing growth in product services as
well as higher selling prices. Operating profit rose 15% as growth in product
services and improved selling prices more than offset higher costs.
o APPLIANCES revenues and operating profit were 2% lower than the
first quarter of 1998. The decreases in both revenues and operating profit were
largely attributable to lower selling prices, with productivity mitigating the
effect on operating profit.
o GE CAPITAL SERVICES first-quarter earnings rose to $1,032 million,
a 17% increase over last year's $881 million, reflecting double-digit increases
in all five of its operating activities.
o INDUSTRIAL PRODUCTS AND SYSTEMS reported revenues and operating
profit that were about the same as a year ago. Segment revenues were affected by
lower selling prices across most businesses in the segment, which offset higher
volume at Transportation Systems. Segment operating profit reflected
productivity and higher volume which were offset by the effects of lower selling
prices and higher costs, including higher engineering costs for the introduction
of Transportation Systems' new AC6000 locomotive.
o NBC reported a 6% decrease in revenues, principally as a result of
the absence of a current year counterpart to NBC's broadcast of the Superbowl
and other NFL coverage. Operating profit was 12% higher than a year ago as
strong results in cable operations and continuing benefits from cost reductions
across the business more than offset higher license fees for certain sports and
prime-time programs that were renewed.
o PLASTICS operating profit increased 2% on revenues that were 1%
higher than a year ago. The revenue increase reflected higher volume, which was
largely offset by lower selling prices. The increase in operating profit was
primarily attributable to lower material costs and productivity, which more than
offset the effects of selling price decreases.
o POWER SYSTEMS revenues increased 6%, reflecting primarily the
contribution from the acquisition of S&S Energy Products and growth in product
services, the combination of which more than offset the absence of a current
year counterpart to certain large contracts at Nuovo Pignone. Operating profit
increased 27%, primarily as a result of productivity and improved results in
product services.
o TECHNICAL PRODUCTS & SERVICES revenues increased 34% from the
first quarter of 1998, principally as a result of improved volume at Medical
Systems, including the acquisition of Marquette Medical Systems. Operating
profit was 15% higher, reflecting strong growth at Medical Systems and
productivity across the segment.
10
B. FINANCIAL CONDITION
With respect to the Condensed Statement of Financial Position,
consolidated assets were $361.7 billion at March 31, 1999, compared with $355.9
billion at December 31, 1998.
GE assets were $75.9 billion at March 31, 1999, an increase of $1.2
billion from December 31, 1998. The increase was primarily attributable to
increases in inventories and intangible assets. Inventories increased $0.5
billion, reflecting consolidation of certain acquisitions as well as normal
seasonal increases. Intangible assets increased $1.0 billion, reflecting
goodwill associated with recent acquisitions, the largest of which was Marquette
Medical Systems.
GECS assets increased by $4.4 billion from the end of 1998. Other
receivables increased $4.1 billion, principally related to acquisitions of Japan
Leasing and Eagle Star. Other assets increased $2.1 billion, primarily
reflecting higher investments in and advances to non-consolidated affiliates and
increases in "separate accounts," which are investments controlled by
policyholders. GE Capital's financing receivables, which, net of the allowance
for losses, aggregated $119.9 billion at the end of the first quarter, decreased
$1.6 billion from year-end 1998. The decrease resulted principally from foreign
currency translation effects related to European financing receivables.
Management believes that GE Capital's allowance for losses of $3.2 billion at
March 31, 1999, is appropriate given the strength and diversity of the portfolio
and current economic circumstances.
Consolidated liabilities of $318.3 billion at March 31, 1999, were
$5.5 billion higher than the year-end 1998 balance of $312.8 billion. GE
liabilities increased by $1.3 billion; GECS liabilities increased by $3.9
billion.
GE borrowings were $4.1 billion ($3.4 billion short-term and $0.7
billion long-term) at March 31, 1999, a decrease of $0.1 billion from December
31, 1998. GE's ratio of debt to total capital at the end of March 1999 was 9.3%
compared with 9.5% at the end of last year and 13.7% at March 31, 1998.
Restructuring expenditures continued during the first quarter; it is expected
that substantially all of the restructuring charge will be utilized by year-end
1999. Other changes in GE's liabilities comprised numerous, relatively small
items.
GECS liabilities increased by $3.9 billion, principally reflecting
increased financing needs resulting from the asset growth described previously.
Short-term borrowings increased $1.3 billion from year-end 1998, while long-term
borrowings increased by $0.8 billion. Insurance liabilities increased $3.0
billion from year-end 1998 reflecting primarily the addition of reserves of
acquired companies, increases in separate accounts and additions to reserves
related to core growth.
With respect to cash flows, consolidated cash and equivalents were
$4.6 billion at March 31, 1999, an increase of about $0.3 billion during the
quarter. Cash and equivalents were $5.4 billion at March 31, 1998, a decrease of
about $0.4 billion during last year's first quarter.
GE cash and equivalents were $1.2 billion at March 31, 1999, about
the same as at year-end 1998. During the first quarter of 1999, operating cash
flows increased to $2.1 billion, an increase of 37% over the first quarter of
1998, primarily as a result of improvements in earnings and higher progress
collections. Cash used for investing activities ($0.3 billion) principally
represented acquisitions and investments in new plant and equipment for a wide
variety of capital expenditure projects to reduce costs and improve
efficiencies. Cash used for financing activities ($1.8 billion) included $1.1
billion for dividends paid to share owners, representing a 17% increase in the
per-share dividend rate compared with first quarter of last year, and $0.4
billion for repurchases of the Company's common stock under the share repurchase
program. Funds used for dividends and the share repurchases were generated from
operating cash flow.
11
GE cash and equivalents decreased $0.4 billion from year-end 1997 to
$0.7 billion at March 31, 1998. During the first quarter of 1998, operating cash
flows increased to $1.5 billion, an increase of 15% over the first quarter of
1997. Cash used for investing activities ($1.2 billion) principally represented
acquisitions and investments in new plant and equipment for a wide variety of
capital expenditure projects to reduce costs and improve efficiencies. Cash used
for financing activities ($0.7 billion) included $1.0 billion for dividends paid
to share owners, representing a 15% increase in the per-share dividend rate
compared with first quarter of 1997, and $0.9 billion for repurchases of the
Company's common stock under the share repurchase program. The dividends and
share repurchases were partially offset by $1.3 billion provided from a higher
level of borrowings.
GECS cash and equivalents increased $0.4 billion during the first
quarter of 1999, when $2.6 billion of cash was provided from operating
activities. The principal use of GECS cash during the period was for investing
activities ($5.7 billion), a majority of which was attributable to payments for
principal businesses purchased ($4.1 billion), the largest of which were Japan
Leasing and Eagle Star, and additions to equipment that is provided to third
parties on operating leases ($1.4 billion).
GECS cash and equivalents decreased $0.2 billion during the first
quarter of 1998, when $2.7 billion of cash was provided from operating
activities. The principal use of GECS cash during the period was for investing
activities ($3.2 billion), a majority of which was attributable to additions to
equipment that is provided to third parties on operating leases ($1.6 billion),
payments for principal businesses purchased ($0.7 billion) and increases in "all
other investing activities" ($0.7 billion), principally related to investment
securities.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
On February 17, 1999, GE issued to former shareholders of RMS
Electronic Commerce Systems, Inc., a Michigan corporation, or their agent,
80,844 shares of GE common stock held in GE's treasury. The issuance was made in
connection with the acquisition of RMS Electronic Commerce Systems, Inc., a
private corporation. The transaction was a private transaction exempt from
registration under the Securities Act of 1933 (the "Act") pursuant to Section
4(2) of the Act.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit 11. Computation of Per Share Earnings*
Exhibit 12. Computation of Ratio of Earnings to Fixed Charges
Exhibit 27. Financial Data Schedule
* Data required by Statement of Financial Accounting
Standards No. 128, Earnings per Share, is provided in
note 7 to the condensed consolidated financial
statements in this report.
b. Reports on Form 8-K during the quarter ended March 31, 1999
No reports on Form 8-K were filed during the quarter ended
March 31, 1999.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
General Electric Company
(Registrant)
May 11, 1999 Philip D. Ameen
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Date Vice President and Comptroller
Duly Authorized Officer and Principal
Accounting Officer