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 JUNE 30, 1996 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 1,651,254,916 shares with a par value of $0.32 per share outstanding at June 30, 1996.
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) <TABLE> <CAPTION> Second quarter ended June 30 (Unaudited) --------------------------------------------------------------------- Consolidated GE GECS ---------------------- ---------------------- --------------------- 1996 1995 1996 1995 1996 1995 ---------- ---------- ---------- ---------- ---------- ---------- <S> <C> <C> <C> <C> <C> <C> Sales of goods $8,551 $8,572 $8,557 $8,578 $ - $ - Sales of services 2,929 2,633 2,963 2,659 - - Earnings of GECS - - 683 572 - - GECS revenues from operations 7,421 6,425 - - 7,457 6,415 Other income 165 179 164 179 - - ---------- ---------- ---------- ---------- ---------- ---------- Total revenues 19,066 17,809 12,367 11,988 7,457 6,415 ---------- ---------- ---------- ---------- ---------- ---------- Cost of goods sold 6,034 6,192 6,040 6,199 - - Cost of services sold 1,970 1,793 2,005 1,819 - - Interest and other financial charges 1,920 1,830 137 158 1,789 1,677 Insurance losses and policyholder and annuity benefits 1,558 1,223 - - 1,558 1,223 Provision for losses on financing receivables 228 279 - - 228 279 Other costs and expenses 4,460 3,856 1,595 1,448 2,893 2,392 Minority interest in net earnings of consolidated affiliates 61 46 23 20 38 26 ---------- ---------- ---------- ---------- ---------- ---------- Total costs and expenses 16,231 15,219 9,800 9,644 6,506 5,597 ---------- ---------- ---------- ---------- ---------- ---------- Earnings before income taxes 2,835 2,590 2,567 2,344 951 818 Provision for income taxes (927) (864) (659) (618) (268) (246) ---------- ---------- ---------- ---------- ---------- ---------- Net earnings $1,908 $1,726 $1,908 $1,726 $683 $572 ========== ========== ========== ========== ========== ========== Net earnings per share $1.15 $1.02 Dividends declared per share $0.46 $0.41 <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. </TABLE>
Condensed Statement of Earnings General Electric Company and consolidated affiliates <TABLE> <CAPTION> (Dollars, except per-share amounts, in millions) Six months ended June 30 (Unaudited) --------------------------------------------------------------------- Consolidated GE GECS ---------------------- ---------------------- --------------------- 1996 1995 1996 1995 1996 1995 ---------- ---------- ---------- ---------- ---------- ---------- <S> <C> <C> <C> <C> <C> <C> Sales of goods $15,792 $15,668 $15,801 $15,676 $ - $ - Sales of services 5,402 4,792 5,461 4,839 - - Earnings of GECS - - 1,333 1,131 - - GECS revenues from operations 14,638 12,118 - - 14,702 12,169 Other income 332 357 330 359 - - ---------- ---------- ---------- ---------- ---------- ---------- Total revenues 36,164 32,935 22,925 22,005 14,702 12,169 ---------- ---------- ---------- ---------- ---------- ---------- Cost of goods sold 11,244 11,349 11,253 11,357 - - Cost of services sold 3,693 3,325 3,753 3,372 - - Interest and other financial charges 3,795 3,492 280 284 3,524 3,220 Insurance losses and policyholder and annuity benefits 3,160 2,314 - - 3,160 2,314 Provision for losses on financing receivables 441 358 - - 441 358 Other costs and expenses 8,557 7,340 3,038 2,801 5,571 4,580 Minority interest in net earnings of consolidated affiliates 121 85 39 32 82 53 ---------- ---------- ---------- ---------- ---------- ---------- Total costs and expenses 31,011 28,263 18,363 17,846 12,778 10,525 ---------- ---------- ---------- ---------- ---------- ---------- Earnings before income taxes 5,153 4,672 4,562 4,159 1,924 1,644 Provision for income taxes (1,728) (1,574) (1,137) (1,061) (591) (513) ---------- ---------- ---------- ---------- ---------- ---------- Net earnings $3,425 $3,098 $3,425 $3,098 $1,333 $1,131 ========== ========== ========== ========== ========== ========== Net earnings per share $2.06 $1.83 Dividends declared per share $0.92 $0.82 <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. </TABLE>
Condensed Statement of Financial Position General Electric Company and consolidated affiliates <TABLE> <CAPTION> (Dollars in millions) Consolidated GE GECS ---------------------- ---------------------- --------------------- 6/30/96 12/31/95 6/30/96 12/31/95 6/30/96 12/31/95 ---------- ---------- ---------- ---------- ---------- ---------- <S> <C> <C> <C> <C> <C> <C> Cash and equivalents $3,271 $2,823 $871 $874 $2,400 $1,949 Investment securities 46,687 41,067 33 4 46,654 41,063 Current receivables 8,312 8,735 8,386 8,891 - - Inventories 5,051 4,395 5,051 4,395 - - GECS financing receivables - net 93,514 93,272 - - 93,514 93,272 Other GECS receivables 12,174 12,417 - - 12,664 12,897 Property, plant and equipment (including equipment leased to others) - net 27,028 25,679 10,216 10,234 16,812 15,445 Investment in GECS - - 12,915 12,774 - - Intangible assets 13,192 11,654 6,948 6,643 6,244 5,011 Other assets 32,852 27,993 12,793 11,901 20,069 16,092 ---------- ---------- ---------- ---------- ---------- ---------- Total assets $242,081 $228,035 $57,213 $55,716 $198,357 $185,729 ========== ========== ========== ========== ========== ========== Short-term borrowings $71,425 $64,463 $2,926 $1,666 $68,511 $62,808 Accounts payable 8,453 9,061 3,649 3,968 5,627 5,952 Other GE current liabilities 9,516 8,477 9,339 8,326 - - Long-term borrowings 49,775 51,027 1,859 2,277 47,955 48,790 Insurance reserves and annuity benefits 48,228 39,699 - - 48,228 39,699 Other liabilities 15,151 15,363 9,092 8,928 5,936 6,312 Deferred income taxes 7,290 7,380 582 508 6,708 6,872 ---------- ---------- ---------- ---------- ---------- ---------- Total liabilities 209,838 195,470 27,447 25,673 182,965 170,433 ---------- ---------- ---------- ---------- ---------- ---------- Minority interest in equity of consolidated affiliates 2,947 2,956 470 434 2,477 2,522 ---------- ---------- ---------- ---------- ---------- ---------- Common stock (1,857,013,000 shares issued) 594 594 594 594 1 1 Unrealized gains on investment securities 293 1,000 293 1,000 288 989 Other capital 1,979 1,663 1,979 1,663 2,239 2,266 Retained earnings 36,429 34,528 36,429 34,528 10,387 9,518 Less common stock held in treasury (9,999) (8,176) (9,999) (8,176) - - ---------- ---------- ---------- ---------- ---------- ---------- Total share owners' equity 29,296 29,609 29,296 29,609 12,915 12,774 ---------- ---------- ---------- ---------- ---------- ---------- Total liabilities and equity $242,081 $228,035 $57,213 $55,716 $198,357 $185,729 ========== ========== ========== ========== ========== ========== <FN> See notes to Condensed Consolidated Financial Statements. Consolidating data are shown for "GE" and "GECS." June data are unaudited. Transactions between GE and GECS have been eliminated from the "consolidated" columns. </TABLE>
Condensed Statement of Cash Flows General Electric Company and consolidated affiliates <TABLE> <CAPTION> (Dollars in millions) Six months ended June 30 (Unaudited) --------------------------------------------------------------------- Consolidated GE GECS ---------------------- ---------------------- --------------------- 1996 1995 1996 1995 1996 1995 ---------- ---------- ---------- ---------- ---------- ---------- <S> <C> <C> <C> <C> <C> <C> Cash flows from operating activities - ------------------------------------ Net earnings $3,425 $3,098 $3,425 $3,098 $1,333 $1,131 Adjustments to reconcile net earnings to cash provided from operating activities Depreciation, depletion and amortization 1,824 1,757 804 814 1,020 943 Earnings retained by GECS - - (869) (733) - - Deferred income taxes 261 327 64 154 197 173 Decrease (increase) in GE current receivables 448 11 520 (27) - - Increase in GE inventories (724) (804) (724) (804) - - Increase (decrease) in accounts payable (637) (638) (320) 35 (452) (424) Increase in insurance reserves 1,714 1,116 - - 1,714 1,116 Provision for losses on financing receivables 441 358 - - 441 358 All other operating activities (935) (333) 553 (1,014) (1,366) 465 ---------- ---------- ---------- ---------- ---------- ---------- Cash from operating activities 5,817 4,892 3,453 1,523 2,887 3,762 ---------- ---------- ---------- ---------- ---------- ---------- Cash flows from investing activities - ------------------------------------ Property, plant and equipment (including equipment leased to others) - additions (3,599) (3,724) (941) (674) (2,658) (3,050) Net increase in GECS financing receivables (9) (4,835) - - (9) (4,835) Payments for principal businesses purchased (2,117) (2,010) (409) (130) (1,708) (1,880) All other investing activities (1,496) 224 118 105 (1,673) 87 ---------- ---------- ---------- ---------- ---------- ---------- Cash used for investing activities (7,221) (10,345) (1,232) (699) (6,048) (9,678) ---------- ---------- ---------- ---------- ---------- ---------- Cash flows from financing activities - ------------------------------------ Net change in borrowings (maturities 90 days or less) 4,937 (2,530) 1,556 2,270 3,381 (4,763) Newly issued debt (maturities more than 90 days) 13,457 20,382 75 437 13,382 19,945 Repayments and other reductions (maturities more than 90 days) (12,949) (9,351) (876) (705) (12,073) (8,646) Net purchase of GE shares for treasury (1,447) (1,422) (1,447) (1,422) - - Dividends paid to share owners (1,532) (1,395) (1,532) (1,395) (464) (398) All other financing activities (614) 293 - - (614) 293 ---------- ---------- ---------- ---------- ---------- ---------- Cash from (used for) financing activities 1,852 5,977 (2,224) (815) 3,612 6,431 ---------- ---------- ---------- ---------- ---------- ---------- Increase (decrease) in cash and equivalents 448 524 (3) 9 451 515 Cash and cash equivalents at beginning of year 2,823 2,591 874 1,373 1,949 1,218 ---------- ---------- ---------- ---------- ---------- ---------- Cash and equivalents at June 30 $3,271 $3,115 $871 $1,382 $2,400 $1,733 ========== ========== ========== ========== ========== ========== <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. </TABLE>
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, 1995. 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. Certain prior-year amounts have been reclassified to conform to the current year presentation. 2. Two newly issued accounting standards were adopted in the first quarter of 1996 and did not have a material effect on the financial position or results of operations of the Company. Statement of Financial Accounting Standards (SFAS) No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, requires that certain long-lived assets be reviewed for impairment when events or circumstances indicate that the carrying amounts of the assets may not be recoverable. If such review indicates that the carrying amount of an asset exceeds the sum of its expected future cash flows, the asset's carrying value is written down to fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. SFAS No. 122, Accounting for Mortgage Servicing Rights, requires that capitalized rights to service mortgage loans be assessed for impairment by individual risk stratum by comparing each stratum's carrying amount with its fair value. Strata are based on the predominant risk characteristics of the underlying loans, which include loan type and note rate. Fair values are estimated based on discounted anticipated future net cash flows considering market consensus for loan prepayment predictions and other economic factors. To the extent that the carrying value of mortgage servicing rights exceeds fair value by individual stratum, the resulting impairment is recognized in earnings through a valuation allowance. 3. 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. 4. GE's inventories consisted of the following: (Dollars in millions) At ----------------------------- 6/30/96 12/31/95 ------- ------- Raw materials and work in process $ 3,682 $ 3,205 Finished goods 2,438 2,277 Unbilled shipments 258 258 Revaluation to LIFO (1,327) (1,345) ------- ------- Total inventories $ 5,051 $ 4,395 ======= ======= 5. Property, plant and equipment, including equipment leased to others, consisted of the following: (Dollars in millions) At ----------------------------- 6/30/96 12/31/95 ------- ------- Original cost -- GE $25,249 $24,867 -- GECS 22,946 21,079 ------- ------- Total 48,195 45,946 ------- ------- Accumulated depreciation, depletion and amortization -- GE 15,033 14,633 -- GECS 6,134 5,634 ------ ------ Total 21,167 20,267 ------- ------ Property, plant and equipment -- net -- GE 10,216 10,234 -- GECS 16,812 15,445 ------- ------- Total $27,028 $25,679 ======= ======= 6. GE's authorized common stock consisted of 2,200,000,000 shares having a par value of $0.32 each. Average shares outstanding for the second quarter of 1996 and 1995 were 1,655,505,063 and 1,688,152,513, respectively. Average shares outstanding for the first six months of 1996 and 1995 were 1,659,174,019 and 1,694,090,647, respectively. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION A. RESULTS OF OPERATIONS -- SECOND QUARTER OF 1996 COMPARED WITH SECOND QUARTER OF 1995 General Electric Company's earnings for the second quarter of 1996 were $1.908 billion, the highest for any quarter in the Company's history, an increase of 11% over the same period in 1995. Earnings per share increased 13% to $1.15, up from last year's $1.02. Earnings per share grew faster than earnings, reflecting the impact of shares repurchased under a three-year, $9 billion share repurchase program initiated in December 1994. Revenues, including acquisitions, rose to a record $19.1 billion for the quarter, 7% over 1995, primarily because of increased global activities and higher sales of spare parts and services by GE's equipment businesses. International revenues were much higher during the quarter, reflecting excellent growth in operations located in Europe and the Far East as well as much higher U.S. exports. Eight of GE's 12 businesses increased revenues, led by GE Capital Services, NBC, Appliances and Aircraft Engines. Operating margin for the second quarter rose to a record 16.3% of sales, up from last year's 15.8%. Eight businesses reported improved operating profit, with four -- NBC, Medical Systems, Transportation and Motors -- achieving double-digit increases. GE Capital Services' earnings increased 19% to $683 million, benefiting from globalization and the diversity of its 26 businesses. The record results were led by strong double-digit increases in its Consumer Services, Specialty Insurance and Specialized Financing activities. Cash generated from GE's operating activities during the second quarter reached $3.5 billion, up sharply from last year's $1.5 billion, primarily from improvements in earnings and working capital and, to a lesser extent, timing. As part of the $9 billion share repurchase program, GE purchased $0.8 billion of its stock during the second quarter to reach $4.9 billion of shares purchased during the last 19 months. SEGMENT ANALYSIS: The comments that follow compare revenues and operating profit by industry segment for the second quarters of 1996 and 1995. o AIRCRAFT ENGINES revenues were somewhat higher than in last year's second quarter reflecting higher volume in services, including spare parts, and military engines. Operating profit increased somewhat as the higher volume and productivity improvements more than offset higher costs. o APPLIANCES reported a good increase in second quarter revenues compared with a year ago reflecting volume improvements in all core domestic product lines and strong international growth, partially offset by lower selling prices. Operating profit was slightly higher for the quarter, as higher volume and productivity more than offset the effects of lower selling prices. o BROADCASTING operating profit was sharply higher on revenues that were much improved over last year's second quarter. The increase in operating profit was attributable primarily to improved price performance at both network and owned-and-operated stations, reflecting a strong overall advertising market in combination with excellent performance in prime-time. o GECS' earnings were $683 million, a 19% improvement from $572 million in 1995. The increase was largely attributable to strong double-digit increases in Consumer Services, Specialty Insurance and Specialized Financing activities. o INDUSTRIAL PRODUCTS AND SYSTEMS reported slightly higher operating profit on a modest increase in revenues. The revenue increase resulted principally from higher volume at Lighting and Electrical Distribution and Control. The operating profit increase was primarily attributable to productivity improvements across the segment which more than offset continued cost inflation. o MATERIALS revenues and operating profit were somewhat lower than a year ago largely as a result of lower selling prices for petrochemicals and, to a lesser extent, ABS resins. o POWER GENERATION revenues were somewhat lower than in 1995's second quarter, primarily because of lower gas turbine volume. Operating profit was somewhat higher, reflecting favorable product mix, strong results in services, including spare parts, and the absence of modification costs related to the "F" turbine that adversely affected the prior year's second quarter results. o TECHNICAL PRODUCTS AND SERVICES operating profit was somewhat higher compared with a year ago on a modest increase in revenues. Medical Systems operating profit was much higher, reflecting productivity gains and volume growth, particularly in services, which more than offset price declines in all geographic regions. Information Services operating profit declined sharply on revenues that were about the same as a year ago, reflecting the combined effects of considerably higher costs related to network expansion and lower selling prices. o ALL OTHER operating profit was much higher on a good increase in revenues, reflecting higher levels of licensing income compared with the second quarter of 1995. B. RESULTS OF OPERATIONS -- FIRST HALF OF 1996 COMPARED WITH FIRST HALF OF 1995 Earnings for the six months ended June 30, 1996, were $3.425 billion, up 11% from $3.098 billion in 1995's first half. Earnings per share increased 13% to $2.06 from $1.83. Earnings per share grew faster than earnings, reflecting the impact of shares repurchased under a three-year, $9 billion share repurchase program initiated in December 1994. Consolidated revenues for the first six months of 1996 aggregated $36.2 billion, up 10% from the comparable $32.9 billion in 1995's first half. GE's sales of goods and services were 4% higher, with improvements led by NBC, Appliances and Aircraft Engines. Operating margin in the first half of 1996 was 15.1% of sales, with the improvement over last year's 14.5% led by NBC, Power Systems, Medical Systems and Transportation. SEGMENT ANALYSIS: The following comments compare revenues and operating profit by industry segment for the first half of 1996 with the same period of 1995. o AIRCRAFT ENGINES reported somewhat higher revenues and operating profit compared with the first half of 1995. The increase in revenues was primarily attributable to higher volume in services, including spare parts, and military engines. The improvement in operating profit reflected the effects of productivity and the higher volume. o APPLIANCES revenues were somewhat higher than a year ago, reflecting higher volume which was largely offset by lower selling prices. Operating profit was slightly lower primarily as a result of cost inflation and lower selling prices, which more than offset productivity and the higher volume. o BROADCASTING operating profit increased sharply over last year on much higher revenues, primarily because of strong performances in both prime-time entertainment and owned-and-operated stations. o GECS' earnings from continuing operations were up 18% to $1,333 million. The earnings increase was led by strong results in Consumer Services, Specialty Insurance and Specialized Financing. o INDUSTRIAL PRODUCTS AND SYSTEMS revenues and operating profit increased slightly over 1995's first half. The revenue increase was principally attributable to higher volume at Lighting, Electrical Distribution and Control, and Motors. The improvement in operating profit reflected primarily productivity improvements across the segment, which more than offset higher costs. o MATERIALS operating profit was about the same as last year on somewhat lower revenues as lower prices, principally in petrochemicals and ABS resins, and slightly lower volume offset reductions in certain material costs. o POWER GENERATION operating profit was somewhat higher on revenues that were about the same as a year ago. The improvement in operating profit reflected strong results in services, including spare parts, and the absence of modification costs related to the "F" turbine that adversely affected prior year results. o TECHNICAL PRODUCTS AND SERVICES reported higher operating profit on flat revenues. Medical Systems had a good increase in operating profit on flat revenues as productivity and higher volume more than offset continuing pricing pressures. Information Services operating profit declined substantially on revenues that were about the same as a year ago, reflecting considerably higher costs related to network expansion and continued price declines. o ALL OTHER operating profit was higher on modest increase in revenues. C. FINANCIAL CONDITION With respect to the Condensed Statement of Financial Position, consolidated assets of $242.1 billion at June 30, 1996, were $14.1 billion higher than the $228.0 billion at December 31, 1995. GE's assets were $57.2 billion at June 30, 1996, an increase of $1.5 billion from December 31, 1995. The increase was principally attributable to normal seasonal increases in inventories ($0.7 billion), and numerous changes in the other assets category, none of which exceeded $0.5 billion. GECS' assets increased by $12.6 billion from the end of 1995, principally as a result of higher levels of investment in investment securities as well as increases in all other assets, both of which are described below. GECS investment securities increased by $5.6 billion, reflecting the addition of securities held by insurance companies acquired and new investments by various GE Capital businesses, partially offset by decreases in fair value resulting from higher interest rates at June 30, 1996. Other assets increased $4.0 billion, principally as a result of two factors: the addition of investor-directed fund accounts associated with the Life Insurance Company of Virginia acquisition and increased investment in nonconsolidated affiliates. GE Capital's financing receivables, which aggregated $93.5 billion, net of reserves, at the end of the second quarter, were approximately the same as at year-end 1995. Management believes that GE Capital's reserves of $2.5 billion (2.63% of the receivables balance at June 30, 1996 -- the same as year-end 1995) are appropriate given the strength and diversity of the portfolio and current economic circumstances. Property, plant and equipment, principally equipment leased to others, increased by $1.4 billion primarily as a result of higher auto lease volume, including a shift in the nature of certain new auto lease volume from financing leases in 1995 to operating leases in 1996, and new aircraft volume. Consolidated liabilities of $209.8 billion at June 30, 1996, were $14.3 billion higher than the year-end 1995 balance of $195.5 billion. GE's liabilities were up $1.8 billion; GECS' liabilities increased $12.5 billion. GE's total borrowings were $4.8 billion ($2.9 billion short-term and $1.9 billion long-term) at June 30, 1996, an increase of $0.8 billion from December 31, 1995. GE's ratio of debt to total capital at the end of June 1996 was 13.8% compared with 11.6% at the end of last year and 16.3% at June 30, 1995. Other current liabilities increased $1.0 billion, principally as a result of higher federal taxes accrued and progress collections. GECS' liabilities increased to $183.0 billion, compared with $170.4 billion at the end of 1995, principally because of higher insurance reserves and annuity benefits, which increased by $8.5 billion, primarily as a result of the acquisitions of Life Insurance Company of Virginia and Union Fidelity Life Insurance Company. Short-term borrowings increased by $5.7 billion to $68.5 billion and long-term borrowings decreased by $0.8 billion to $48.0 billion. With respect to cash flows, consolidated cash and equivalents were $3.3 billion at June 30, 1996, an increase of $0.4 billion during the first half. Cash and equivalents were $3.1 billion at June 30, 1995, an increase of $0.5 billion during last year's first half. GE's cash and equivalents were $0.9 billion at June 30, 1996, and at December 31, 1995. During the first half of 1996, cash provided from operating activities increased to $3.5 billion, up from $1.5 billion during the first six months of last year. The increase resulted from improvements in earnings, working capital -- principally in trade receivables and progress collections related to large power generation orders -- and collection of sundry receivables. Cash used for investing activities ($1.2 billion) represented principally investments in new plant and equipment for a wide variety of projects to reduce costs and improve efficiencies. Cash used for financing activities ($2.2 billion) included $1.7 billion for repurchases of the Company's common stock under the share repurchase program and $1.5 billion for dividends paid to share owners, a 12% increase in the per-share dividend rate compared with the first half of last year. The dividends and share repurchases were partially offset by funds provided from a combination of higher borrowings ($0.8 billion) and disposition of GE shares from treasury ($0.4 billion). GE's cash and equivalents were $1.4 billion at June 30, 1995, and at December 31, 1994. During the first half of 1995, cash from operating activities totaled $1.5 billion, despite the use of (a) $1.0 billion for "all other activities," which consisted of the net result of numerous changes (none of which was significant) in all other assets and other current and noncurrent liabilities, and (b) $0.8 billion for normal seasonal increases in inventories. Cash used for investing activities ($0.7 billion) represented principally investments in new plant and equipment for a wide variety of projects to reduce costs and improve efficiencies. Cash used for financing activities ($0.8 billion) included $1.6 billion for repurchases of the Company's common stock under the share repurchase program and $1.4 billion for dividends paid to share owners, representing a 14% increase in the per-share dividend rate compared with the first half of 1994. The dividends and share repurchases were partially offset by funds provided from a combination of higher borrowings ($2.0 billion) and disposition of GE shares from treasury ($0.6 billion). GECS' cash and equivalents increased $0.5 billion during the first half of 1996. Cash was used primarily to fund additions to property, plant and equipment ($2.7 billion), principally equipment that is provided to third parties on operating leases, for acquisitions of businesses ($1.7 billion), the largest of which were Life Insurance Company of Virginia and Union Fidelity Life Insurance Company, and increased investments in nonconsolidated affiliates ($1.4 billion). Cash provided from operating activities totaled $2.9 billion. Cash provided from financing activities resulted primarily from increased borrowings ($4.7 billion) during the first six months of 1996. GECS' cash and equivalents increased $0.5 billion during the first half of 1995. Cash was used primarily to fund GE Capital's growth in financing receivables ($4.8 billion), for additions to property, plant and equipment ($3.1 billion), principally equipment that is provided to third parties on operating leases, and for acquisitions of businesses ($1.9 billion), the largest of which were certain businesses of ITT Financial, Credit De L'Est (France), Pallas Group (United Kingdom) and the remaining 50% interest in United Merchants Financing (Hong Kong). Cash provided from operating activities totaled $3.8 billion. Cash provided from financing activities resulted from increased borrowings during the first six months of 1995, which aggregated $6.5 billion. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS As previously reported, in April 1996, the Environmental Protection Agency filed an action and stated that it was seeking $300,000 in penalties for the Company's failure to adequately respond to an Agency information request in 1994. The Company has tentatively agreed to settle the matter for $95,000. As previously reported, in March 1995, the Environmental Protection Agency stated that it was seeking $300,000 in penalties for alleged violations of the Clean Air Act at the Company's Waterford, New York facility. The company has tentatively agreed to settle the matter for $60,684. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The annual meeting of Share Owners of General Electric Company was held on April 24, 1996. (b) All director nominees were elected. (c) Certain matters voted upon at the meeting and the votes cast with respect to such matters are as follows: <TABLE> <CAPTION> PROPOSALS AND VOTE TABULATIONS VOTES CAST ------------------------ FOR AGAINST ABSTAIN NON-VOTES --- ------- ------- --------- <S> <C> <C> <C> <C> MANAGEMENT PROPOSALS Approval of the appointment of independent auditors for 1996 1,376,566,149 5,678,526 5,281,801 0 Approval of the proposed 1996 Stock Option Plan for Non-Employee Directors 1,257,472,349 110,554,546 19,499,581 0 SHARE OWNER PROPOSALS (1) Relating to Prior Government service 33,373,429 1,138,687,716 31,930,765 183,534,567 (2) Relating to GE's nuclear power business 39,270,453 1,085,497,160 79,224,299 183,534,565 (3) Relating to radioactive waste and decommissioning 44,426,675 1,080,221,163 79,344,073 183,534,566 (4) Relating to Maquiladoras 79,754,886 1,007,665,765 116,571,261 183,534,565 (5) Relating to global corporate standards 66,125,653 1,031,724,356 106,141,901 183,534,567 (6) Relating to NBC Programming 88,966,411 1,022,142,227 92,883,273 183,534,566 (7) Relating to Retirement Plan for Non- Employee Directors 323,319,008 855,192,309 25,480,594 183,534,566 (8) Relating to Equal Credit Opportunity 72,129,433 1,031,450,110 100,412,368 183,534,566 </TABLE> ELECTION OF DIRECTORS DIRECTOR VOTES RECEIVED VOTES WITHHELD - -------- -------------- -------------- D. Wayne Calloway 1,373,712,215 7,784,629 Silas S. Cathcart 1,372,259,118 9,237,726 Dennis D. Dammerman 1,372,842,950 8,653,894 Paolo Fresco 1,372,505,736 8,991,108 Claudio X. Gonzalez 1,373,537,421 7,959,423 Robert E. Mercer 1,371,895,787 9,601,057 Gertrude G. Michelson 1,371,866,226 9,630,618 John D. Opie 1,372,902,184 8,594,660 Roger S. Penske 1,372,614,384 8,882,460 Barbara Scott Preiskel 1,371,591,876 9,904,968 Frank H. T. Rhodes 1,372,181,707 9,315,137 Andrew C. Sigler 1,373,515,102 7,981,742 Douglas A. Warner III 1,373,840,637 7,656,207 John F. Welch, Jr. 1,371,729,707 9,767,137 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 b. Reports on Form 8-K during the quarter ended June 30, 1996. No reports on Form 8-K were filed during the quarter ended June 30, 1996. 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) AUGUST 14, 1996 PHILIP D. AMEEN Date Vice President and Comptroller Duly Authorized Officer and Principal Accounting Officer