2nd Quarter & Interim Results
General Electric Company
17 July 2000
GE reports second-quarter results
Earnings per share up 21% to $.34
Revenues up 20% over 1999
Operating margin 20.4% - highest ever
FAIRFIELD, CONN. - July 13, 2000 - GE's second-quarter earnings of $3.378
billion were the highest for any quarter in the Company's history, Chairman
John F. Welch reported today.
'GE's businesses continue to achieve record results and are operating
extremely well in their respective global markets,' Mr. Welch said.
Specific highlights include:
* Revenues for the second quarter increased to a record $32.9 billion, 20%
above last year's quarter, reflecting continued growth from
globalization and product services.
* Second-quarter earnings per share increased 21% to $.34, up from last
year's $.28, and earnings increased 20% to $3.378 billion. Both
earnings per share and earnings were records for the quarter.
* GE's second-quarter operating margin was 20.4% of sales, up from last
year's 19.3%, and a record for the quarter. The second-quarter margin
growth reflects the increasing benefits from GE's focus on product
services, Six Sigma quality and e-Business initiatives.
* GE's industrial businesses achieved revenue growth of 17% over second
quarter 1999 Operating profit for all seven operating segments
increased by double-digits - led by Power Systems, Medical Systems,
Aircraft Engines, and NBC.
* GE Capital Services' second-quarter earnings rose to $1.277 billion, 17%
over last year's $1.092 billion. These record results reflect the
globalization and diversity of GE Capital's businesses, with strong
double-digit increases in its Specialized Financing, Consumer Services
and Mid-Market Financing segments.
* Cash generated from GE's operating activities during the first half was
a record $5.9 billion, up 25% from last year's $4.7 billion. As part of
the $22 billion share repurchase program, GE purchased $523 million of
its stock during the second quarter to reach $16.5 billion - 934 million
shares - purchased since December 1994.
'In addition to delivering record second-quarter results, GE's businesses made
aggressive moves to position themselves for strong future growth,' Mr. Welch
said.
Highlights of recent activities include:
GE Power Systems continued its strong order rate for heavy-duty gas turbines
in the U.S., where strong demand for new power generation equipment drove
orders up 80% more than last year's quarter to $5.0 billion. Shipments of
heavy-duty gas turbines increased 122% in the quarter to 60 units. Demand for
fully packaged 25-60MW gas turbines at S&S Energy increased more than 200%
during the quarter. Power Systems completed a record 965 installations and
preventative maintenance orders during the quarter, helping customers generate
more power during peak summer demand periods. It also delivered five
first-of-
a-kind, 22-megawatt trailer-mounted gas turbines to Commonwealth Edison in
Chicago, where the units are helping meet peak demand for electricity. Power
Systems added $913 million in new long-term service agreements in the quarter,
bringing the total of multi-year contracts to $11 billion.
GE Aircraft Engines continued to win the majority of the world's orders for
airline jet engines. Significant wins were recorded at Southwest, with an
engine order valued at $1 billion, and at American Trans Air, with orders
valued at nearly $900 million for engines and a long-term service agreement.
Additionally, Taiwan's EVA Airways became the second customer to order the
recently launched Boeing 777X passenger jet powered exclusively by the higher-
thrust GE90 derivative engine. Italy selected the T700 turboshaft engine to
power its entire fleet of NH90 helicopters, an engine order valued at $300
million.
GE Medical's products and services continued to be well received in several
areas. X-ray orders were up 96% driven by GE's late 1999 acquisition of
vascular x-ray imaging provider OEC Medical and new technologies introduced in
the 1st quarter - including the Innova 2000 digital cardiac imaging system and
the Senographe 2000D full-field digital mammography system. Strong market
demand for the GE LightSpeed, the industry's leading multi-slice CT system,
drove overall CT orders up 35%. Ultrasound orders grew 40% including 65%
growth in the Americas. GE Medical announced a definitive agreement to
acquire Lunar Corporation, a leading provider of medical diagnostic systems
for the assessment of osteoporosis and metabolic bone diseases and orthopedic
applications.
GE Plastics announced a new co-polymer resin product for automotive and film
applications. The high impact, long-lasting plastic can replace steel and
requires no painting. It also announced the pending acquisitions of
Commercial Plastics and Cadillac Plastic, a subsidiary of MA Hanna. These
transactions, with combined annual revenues of more than $700 million, will
enhance GEP Polymerland distribution capabilities.
GE Capital continued to position itself for strong growth as its GE Financial
Assurance (GEFA) unit announced the signing of a definitive agreement to
underwrite and distribute long-term care insurance through a strategic
alliance with Citigroup. GEFA also acquired the group life and health
operations of Phoenix Home Life Mutual Insurance. GE Capital Aviation
Services expanded its global presence and capability with the acquisition of
Credit Lyonnais/PK Airfinance. GE Financial Network (www.gefm.com) continued
to expand its offerings by announcing a partnership with CompuBank to offer
full-service banking, added on-line billing services and launched sales of GE
mutual funds through the Charles Schwab Supermarket.
NBC continued its primetime success with a tie for first place during the May
Sweeps in the important adult 18-49 demographic category. CNBC Business Day
continued its strong ratings performance beating CNN for the third consecutive
quarter. NBC's Today, Nightly News and Tonight Show with Jay Leno finished
the quarter leading their time periods. Building on its success, Today
announced plans to extend programming an additional hour in October. NBC
concluded long-term cable extension deals with Time Warner Cable and Echostar
Communications and now has agreements for Olympic cable distribution covering
more than 80% of U.S. cable and satellite households.
GE Industrial Systems and Cisco Systems announced the formation of a new
company, GE Cisco Industrial Networks. This new company assesses, designs and
builds network infrastructures for manufacturing plant floor and industrial
environments that enable enterprise-wide communication, a potential $3 billion
market by the year 2003.
GE Appliances launched PRODIGY, the industry's first full line of electronic
washers, and the NAUTILUS dishwasher, featuring a new pre-heated water option
and quieter operation. In cooking products, a 3rd shift was added to meet
extraordinary demand for the successful new SPECTRA electric range. In
addition, GE Gas Ranges recently received the number 1, number 2 and number 3
ratings by a leading consumer magazine. As a result of continuing focus on
the customer and Six Sigma quality, GEA was recently recognized as Supplier of
the Year by several customers, including Wal-Mart, Sears, The Home Depot, and
Centex Homes.
Mr. Welch concluded: 'The record results for the second quarter once again
demonstrate the ability of GE's diverse mix of leading global businesses to
deliver top-line growth, increased margins and strong cash generation. The
combination of global growth, expansion of our product services activities,
rapid introduction of new products and our Six Sigma quality and e-Business
initiatives position GE to deliver another year of record performance in
2000.'
Press Release Data
GENERAL ELECTRIC COMPANY
All amounts except per-share earnings are in millions of U.S. dollars.
SECOND QUARTER
2000 1999 V%
Revenues $32,862 $27,410 20
Earnings $3,378 $2,820 20
Per-Share Earnings
- diluted $0.34 $0.28 21
- basic $0.34 $0.29 17
Segment Information
2000 1999 V%
Revenues
Aircraft Engines $2,749 $2,650 4
Appliances 1,575 1,476 7
NBC 1,956 1,782 10
Industrial Products and Systems 3,037 2,885 5
Plastics 2,014 1,741 16
Power Systems 3,738 2,334 60
Technical Products and Services 1,901 1,625 17
GE Capital Services 16,470 13,378 23
Segment profit
2000 1999 V%
Aircraft Engines 809 509 20
Appliances 194 177 10
NBC 635 544 17
Industrial Products and Systems 603 540 12
Plastics 519 468 11
Power Systems 752 516 46
Technical Products and Services 413 328 26
GE Capital Services net earnings 1,277 1,092 17
SIX MONTHS ENDED JUNE 30, 2000
2000 1999 V%
Revenues $62,858 $51,575 22
Earnings $5,970 $4,975 20
Per-Share Earnings
- diluted $0.59 $0.50 18
- basic $0.60 $0.51 18
Segment Information
2000 1999 V%
Revenues
Aircraft Engines $5,190 $5,068 2
Appliances 2,956 2,677 10
NBC 3,349 2,962 13
Industrial Products and Systems 5,822 5,424 7
Plastics 3,875 3,356 15
Power Systems 6,948 4,043 72
Technical Products and Services 3,654 3,120 17
GE Capital Services 32,151 25,761 25
Segment profit
2000 1999 V%
Aircraft Engines 1,167 991 18
Appliances 344 338 2
NBC 1,029 878 17
Industrial Products and Systems 1,117 933 20
Plastics 956 865 11
Power Systems 1,205 707 70
Technical Products and Services 753 596 26
GE Capital Services net earnings 2,487 2,124 17
GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
Consolidated
Second quarter ended June 30 2000 1999
Revenues
Sales of goods and services $18,746 $15,857
Earnings of GECS - -
GECS revenues from services 13,981 11,348
Other income 135 205
Total revenues 32,862 27,410
Costs and expenses
Cost of sales, operating and administrative expenses 20,579 17,651
Interest and other financial charges 3,014 2,404
Insurance losses and policyholder and annuity benefits 3,852 2,705
Provision for losses on financing receivables 421 442
Minority interest in net earnings of consolidated 97 108
affiliates
Total costs and expenses 27,963 23,310
Earnings before income taxes 4,899 4,100
Provision for income taxes (1,521) (1,280)
Net earnings $3,378 $2,820
GE
Second quarter ended June 30 2000 1999
Revenues
Sales of goods and services $16,414 $13,966
Earnings of GECS 1,277 1,092
GECS revenues from services - -
Other income 155 225
Total revenues 17,846 15,283
Costs and expenses
Cost of sales, operating and administrative expenses 13,064 11,269
Interest and other financial charges 259 220
Insurance losses and policyholder and annuity benefits - -
Provision for losses on financing receivables - -
Minority interest in net earnings of consolidated 44 63
affiliates
Total costs and expenses 13,367 11,552
Earnings before income taxes 4,479 3,731
Provision for income taxes (1,101) (911)
Net earnings $3,378 $2,820
GECS
Second quarter ended June 30 2000 1999
Revenues
Sales of goods and services $2,405 $1,961
Earnings of GECS - -
GECS revenues from services 14,065 11,417
Other income - -
Total revenues 16,470 13,378
Costs and expenses
Cost of sales, operating and administrative expenses 7,636 6,488
Interest and other financial charges 2,811 2,237
Insurance losses and policyholder and annuity benefits 3,852 2,705
Provision for losses on financing receivables 421 442
Minority interest in net earnings of consolidated 53 45
affiliates
Total costs and expenses 14,773 11,917
Earnings before income taxes 1,697 1,461
Provision for income taxes (420) (369)
Net earnings $1,277 $1,092
Per share amounts (in dollars)
Diluted earnings per share $0.34 $0.28
Basic earnings per share $0.34 $0.29
Dividends declared per share (in dollars) $0.13 2/3 $0.11 2/3
Dollar amounts in millions; per-share amounts in dollars; unaudited.
Supplemental consolidating data are shown for 'GE' and 'GECS'.
Transactions between GE and GECS have been eliminated from the 'consolidated'
columns. See note 1 to the consolidated financial statements in the 1999
Annual Report to Share Owners for further information about consolidation
matters.
GENERAL ELECTRIC COMPANY
Condensed Statement of Earnings
Consolidated
Six months ended June 20 2000 1999
Revenues
Sales of goods and services $35,288 $29,220
Earnings of GECS - -
GECS revenues from services 27,364 22,047
Other income 206 308
Total revenues 62,858 51,575
Costs and expenses
Cost of sales, operating and administrative expenses 40,235 33,257
Interest and other financial charges 5,796 4,667
Insurance losses and policyholder and annuity benefits 6,782 5,324
Provision for losses on financing receivables 942 821
Minority interest in net earnings of consolidated 195 162
affiliates
Total costs and expenses 53,950 44,231
Earnings before income taxes 8,908 7,344
Provision for income taxes (2,938) (2,369)
Net earnings $5,970 $4,975
GE
Six months ended June 20 2000 1999
Revenues
Sales of goods and services $30,784 $25,762
Earnings of GECS 2,487 2,124
GECS revenues from services - -
Other income 238 343
Total revenues 33,509 28,229
Costs and expenses
Cost of sales, operating and administrative expenses 24,953 21,139
Interest and other financial charges 512 404
Insurance losses and policyholder and annuity benefits - -
Provision for losses on financing receivables - -
Minority interest in net earnings of consolidated 92 79
affiliates
Total costs and expenses 25,557 21,622
Earnings before income taxes 7,952 6,607
Provision for income taxes (1,982) (1,632)
Net earnings $5,970 $4,975
GECS
Six months ended June 20 2000 1999
Revenues
Sales of goods and services $4,638 $3,601
Earnings of GECS - -
GECS revenues from services 27,513 22,160
Other income - -
32,151 25,761
Total revenues
Costs and expenses
Cost of sales, operating and administrative expenses 15,500 12,322
Interest and other financial charges 5,381 4,350
Insurance losses and policyholder and annuity benefits 6,782 5,324
Provision for losses on financing receivables 942 821
Minority interest in net earnings of consolidated 103 83
affiliates
Total costs and expenses 28,708 22,900
Earnings before income taxes 3,443 2,861
Provision for income taxes (956) (737)
Net earnings $2,487 $2,124
Per share amounts (in dollars)
Diluted earnings per share $0.59 $0.50
Basic earnings per share $0.60 $0.51
Dividends declared per share (in dollars) $0.27 1/3 $0.23 1/3
Dollar amounts in millions; per-share amounts in dollars; unaudited.
Supplemental consolidating data are shown for 'GE' and 'GECS'.
Transactions between GE and GECS have been eliminated from the 'consolidated'
columns. See note 1 to the consolidated financial statements in the 1999
Annual Report to Share Owners for further information about consolidation
matters.
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