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General Elec. (GEC)

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Friday 12 July, 2002

General Elec.

Second Quarter Results

General Electric Company
12 July 2002

                      GE Grows Second-Quarter Earnings 14%

           To a Record $4.4 Billion, With Industrial Revenues Up 10%;

              Reconfirms Full-Year Target of $1.65-$1.67 Per Share

Fairfield, Conn., July 12, 2002 - GE's second-quarter 2002 earnings grew 14%
over second quarter 2001 to $4.4 billion, or $.44 per share, the highest of any
quarter in the Company's history, GE Chairman and CEO Jeff Immelt announced
today.

'GE's diversified portfolio of leading businesses produced another quarter of
double-digit earnings growth and strong cash flow,' Immelt said. 'Our long-cycle
industrial businesses and GE Capital's consumer and mid-market businesses
continue to deliver. The improved performance we're seeing at our short-cycle
businesses - particularly NBC, Plastics and Appliances - position us well for
future quarters. The GE team continues to perform in a tough environment.'

Financial highlights include:

  • Earnings rose 14% to $4.426 billion from $3.897 billion in second quarter
    2001, and earnings per share (EPS) increased 13% to $.44. Power Systems,
    NBC, Medical Systems, Appliances and eight GE Capital businesses had
    double-digit earnings growth. As previously disclosed, earnings reflect $358
    million from a favorable settlement with the Internal Revenue Service of a
    dispute regarding exports from Aircraft Engines since 1979; a $70 million
    after-tax benefit from terminations of Power Systems gas turbine orders;
    approximately $350 million after taxes of adjustments for estimates of
    prior-year loss events at Employers Reinsurance Corporation (ERC), which
    resulted in a quarterly loss for ERC of $236 million; and a $110 million
    after-tax loss to recognize impairment of WorldCom bonds.


        As required by new accounting rules, as of Jan. 1, 2002, goodwill is no
        longer amortized. On a comparable basis, second quarter 2002 EPS would
        have increased 7%. Adjusting for goodwill and pension income, EPS would
        have been up 11%.

  • Revenues rose 4% over second quarter 2001 to $33.2 billion. Industrial
    revenues grew 10%, with double-digit growth at Power Systems as well as
    Medical Systems, Appliances and Specialty Materials. Revenues at GE Capital
    Services (GECS) declined 4% because of the revenue effects of the ERC and
    WorldCom items. GECS net revenues (revenues less interest costs) from
    financing and operating activities grew 12%.
  • Cash generated from GE's operating activities, excluding progress
    collections, was a record $6.1 billion in the first half of 2002, up 12%
    from $5.4 billion last year. Reported cash flow from operations was $3.5
    billion, which, reflecting the record progress collections in 2001, was 55%
    lower than last year's reported $7.8 billion. GE returned $4.7 billion to
    shareowners in the first half of 2002 through $3.6 billion in dividends and
    $1.1 billion in share repurchases.
  • Operating margin was 21.2%, up from last year's 20.6%, reflecting GE's
    continuing productivity gains.
  • GE Capital Services (GECS) second-quarter earnings were $1.327 billion,
    down 10% from last year's $1.477 billion as a result of losses at ERC and
    the WorldCom bond impairment. Excluding ERC and the WorldCom item, and
    putting goodwill on a comparable basis, GECS earnings grew 14%, with
    particularly strong results from its Mid-Market Financing businesses and
    Global Consumer Finance. GECS assets totaled $461 billion at the end of the
    quarter, up 22% from $376 billion at the end of second quarter 2001.

GE will provide more detail on second-quarter results on a conference call and
Webcast to be held at 9 a.m. EDT today. Call information and related charts are
available at www.ge.com/investor.

Among second-quarter business highlights:

  • GE Power Systems (GEPS) shipped 109 heavy-duty gas turbines in the
    quarter, including 86 from its Greenville, South Carolina facility. GEPS
    Energy Services added 25 new contractual services agreements valued at $1.1
    billion. Commitments through the first half of the year reached $26.1
    billion, $6.5 billion or 33 percent more since second quarter of last year.
    During the quarter GEPS also completed the acquisition of the manufacturing
    and technology assets of Enron Wind Corp., establishing GE Wind Energy as a
    leading presence in the renewable energy industry, which is growing at
    nearly 20% a year.
  • GE Medical Systems (GEMS) total orders of $1.8 billion increased 18%, with
    double-digit growth in most modalities, and healthcare services orders grew
    17%. Strong customer demand for GEMS new EXCITE magnetic resonance (MR)
    technology resulted in more than $350 million in MR orders, a 21% increase.
    Ultrasound orders grew 19% to almost $200 million, driven in part by the
    success of the new VolusonTM 730 4D Ultrasound System. Orders for PET
    (positron emission tomography) systems increased 87% and totaled nearly $100
    million, driven by growing support for the clinical value of GE's
    DiscoveryTM LS system, a combined PET/CT (computed tomography) system
    focused on cancer diagnosis and treatment. Orders for healthcare information
    technology (IT) systems grew 36% to more than $340 million, including an
    increase of more than 100% for GE's image archiving systems and a 55%
    increase in patient monitoring and clinical information systems. During the
    quarter GEMS launched the Lightspeed16, its breakthrough 16-slice CT
    scanner, and generated more than 50 orders worldwide.



  • GE Aircraft Engines (GEAE) and CFMI, GEAE's joint venture with Snecma, won
    $1.4 billion in commercial engine orders during the second quarter,
    including orders from KLM Royal Dutch Airlines and China Eastern Airlines.
    GEAE achieved a significant milestone during the quarter with certification
    of its CF34 family of regional jet engines by the U.S. Federal Aviation
    Administration. Regional jets constitute the fastest-growing sector of
    commercial aviation, and to date GEAE has received more than $7 billion in
    firm and option orders for its CF34 engines. During the quarter, GE Engines
    Services completed the acquisition of Unison Industries Inc, a global leader
    in ignition systems for aerospace applications. GE Engine Services' backlog
    in multi-year service agreements now exceeds $26 billion. GEAE received more
    than $600 million in military contracts during the quarter, including the
    Air Force of the Republic of Korea's selection of GEAE's F110 engine to
    power 40 new Boeing F-15K aircraft. The order, valued at more than $340
    million, launches the F110 engine on the twin-engine F-15 aircraft. GEAE's
    widely-used F404 fighter engine was selected by The Boeing Company to power
    the Defense Advanced Research Agency/US Air Force X-45B Unmanned Combat Air
    Vehicle (UCAV) currently under development.
  • GE Capital Services (GECS) launched Healthcare Financial Services (HFS) in
    the quarter, building on assets acquired in the Heller Financial transaction
    to create one of the largest businesses providing capital, financial
    solutions and related services to the healthcare industry. HFS serves a
    growing global healthcare market that it estimates is more than $4 trillion.
    During the quarter, Real Estate completed its acquisition of Security
    Capital Group Inc., providing it with positions in self-storage,
    grocery-anchored retail and parking. GECS acquired AGC Limited from Westpac,
    expanding the platforms of Global Consumer Finance and Commercial Equipment
    Finance.
  • NBC continued its success in television's most sought-after demographic,
    adults 18-49, with seven of the quarter's 10 highest-rated prime-time
    programs. The network claimed its ninth consecutive sweeps victory in May
    with a 37% advantage over its nearest competitor. Overall, NBC led in key
    demographics for the quarter in morning news, daytime, evening news, late
    night and Sunday morning public affairs programming. With this ratings
    success, NBC garnered 52% of the growth in advertising industry dollars in
    May's upfront sales season, reaching $2.7 billion at prices 7% higher than
    last year. NBC also saw increases in scatter pricing, which at the end of
    the quarter was 7% higher than upfront pricing. During the quarter, NBC
    completed the Telemundo and KNTV acquisitions.
  • GE Appliances (GEA) grew quarterly revenues 14% and operating profit 28%
    as new products continued to drive share gains and increase profitability.
    The GE Profile AdvantiumTM 120 won a Gold Medal Award for design from the
    Industrial Designers Society of America and Business Week, and the GE
    ProfileTM and Triton XLTM dishwashers were recognized by Design Journal. The
    GE Profile ArcticaTM also won the 2002 Kitchen & Bath Award at the Kitchen &
    Bath Industry annual show. During the quarter, GEA introduced its exclusive
    Precise AirTM convection system, with reversing airflow that cooks more
    evenly, and a new line of GE Profile products with dramatically contoured
    styling.
  • GE Plastics (GEP) order volume for core products grew 25% over second
    quarter 2001, although global price pressures continued and held the
    increase in the monetary value of those orders to 15%. Order backlog
    quantities increased for the second consecutive quarter, and were 9% higher
    at the end of second quarter than at the end of first quarter. China remains
    a key growth region for GEP, and during the quarter the business announced
    plans to move its Pacific headquarters from Tokyo to Shanghai.

'In a tough environment, GE's businesses continue to win in their markets by
bringing great technology and services to their customers,' Immelt said. 'We had
a record second quarter; our third quarter looks promising, and we remain
comfortable with the targets we've communicated for the full year. We have a
wonderful team of people who are committed to perform. I'm proud of them and
what they're delivering.'

GE (NYSE:GE) is a diversified technology, services and manufacturing company
with a commitment to achieving customer success. GE operates in more than 100
countries and employs approximately 310,000 people worldwide. For more
information, visit the company's Web site at http://www.ge.com.

Caution Concerning Forward-Looking Statements

This document includes certain 'forward-looking statements' within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements are
based on management's current expectations and are subject to uncertainty and
changes in circumstances. Actual results may differ materially from these
expectations due to changes in global political, economic, business,
competitive, market and regulatory factors. More detailed information about
those factors is contained in GE's filings with the Securities and Exchange
Commission.

Contact:      General Electric, Fairfield

              David Frail, 203/373-3387

              david.frail@corporate.ge.com



GENERAL ELECTRIC COMPANY

Condensed Statement of Earnings
                                                        Consolidated                      GE                    GECS
Second quarter ended June 30                    2002            2001            2002         2001       2002        2001
Revenues
Sales of goods and services                  $20,261         $18,480         $19,459      $17,588       $899        $960
Earnings of GECS before accounting changes         -               -           1,327        1,477          -           -
GECS revenues from services                   12,867          13,341               -            -     12,953      13,439
Other income                                      86             156             103          200          -           -
Total revenues                                33,214          31,977          20,889       19,265     13,852      14,399

Costs and expenses
Cost of sales, operating and                  20,600          19,465          15,341       13,973      5,398       5,623
administrative expenses
Interest and other financial charges           2,443           2,707              75          115      2,429       2,671
Insurance losses and policyholder and          3,689           3,712               -            -      3,689       3,712
annuity benefits
Provision for losses on financing                785             496               -            -        785         496
receivables
Minority interest in net earnings of              90             101              50           59         40          42
consolidated affiliates
Total costs and expenses                      27,607          26,481          15,466       14,147     12,341      12,544

Earnings before income taxes and               5,607           5,496           5,423        5,118      1,511       1,855
accounting changes
Provision for income taxes                   (1,181)         (1,599)           (997)      (1,221)      (184)       (378)

Earnings before accounting changes            $4,426          $3,897          $4,426       $3,897     $1,327      $1,477
Cumulative effect of accounting changes            -               -               -            -          -           -
Net earnings                                  $4,426          $3,897          $4,426       $3,897     $1,327      $1,477

Per-share amounts before accounting
changes (in dollars)
Diluted earnings per share                     $0.44           $0.39
Basic earnings per share                       $0.45           $0.39

Per-share amounts after accounting changes
(in dollars)
Diluted earnings per share                     $0.44           $0.39
Basic earnings per share                       $0.45           $0.39

Dividends declared per share (in dollars)      $0.18           $0.16

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 2001 Annual Report to
Share Owners for further information about consolidation matters.



GENERAL ELECTRIC COMPANY

Condensed Statement of Earnings
                                                        Consolidated                        GE                   GECS
Six months ended June 30                        2002             2001             2002         2001      2002       2001
Revenues
Sales of goods and services                  $37,749          $35,340          $36,207      $33,438    $1,715     $2,028
Earnings of GECS before accounting                 -                -            2,984        2,878         -          -
changes
GECS revenues from services                   25,845           26,915                -            -    26,036     27,094
Other income                                     141              215              189          309         -          -
Total revenues                                63,735           62,470           39,380       36,625    27,751     29,122

Costs and expenses
Cost of sales, operating and                  39,453           38,320           29,041       27,017    10,692     11,546
administrative expenses
Interest and other financial charges           4,817            5,783              232          370     4,717      5,569
Insurance losses and policyholder and          7,238            7,235                -            -     7,238      7,235
annuity benefits
Provision for losses on financing              1,447              979                -            -     1,447        979
receivables
Minority interest in net earnings of             166              203               92          104        74         99
consolidated affiliates
Total costs and expenses                      53,121           52,520           29,365       27,491    24,168     25,428

Earnings before income taxes and              10,614            9,950           10,015        9,134     3,583      3,694
accounting changes
Provision for income taxes                   (2,670)          (3,036)          (2,071)      (2,220)     (599)      (816)

Earnings before accounting changes            $7,944           $6,914           $7,944       $6,914    $2,984     $2,878
Cumulative effect of accounting changes      (1,015)            (444)          (1,015)        (444)   (1,015)      (169)

Net earnings                                  $6,929           $6,470           $6,929       $6,470    $1,969     $2,709

Per-share amounts before accounting
changes (in dollars)
Diluted earnings per share                     $0.79            $0.69
Basic earnings per share                       $0.80            $0.70

Per-share amounts after accounting
changes (in dollars)
Diluted earnings per share                     $0.69            $0.64
Basic earnings per share                       $0.70            $0.65

Dividends declared per share (in               $0.36            $0.32
dollars)

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 2001 Annual Report to
Share Owners for further information about consolidation matters.

GENERAL ELECTRIC COMPANY

All amounts except per-share earnings are in millions of U.S. dollars.

                                                        SECOND QUARTER                   SIX MONTHS ENDED 
                                                                                               JUNE 30
                                                       2002        2001      V%          2002      2001     V%
Revenues                                           $ 33,214    $ 31,977       4       $63,735   $62,470      2
Earnings before accounting changes                  $ 4,426     $ 3,897      14       $ 7,944   $ 6,914     15
Cumulative effect of accounting changes                   -           -       -       (1,015)     (444)
Net earnings                                          4,426       3,897      14         6,929     6,470      7

Per-Share Earnings
Diluted
Before accounting changes                            $ 0.44      $ 0.39      13        $ 0.79    $ 0.69     14
Cumulative effect of accounting changes                   -           -       -        (0.10)    (0.05)
After accounting changes                               0.44        0.39      13          0.69      0.64      8
Basic
Before accounting changes                            $ 0.45      $ 0.39      15        $ 0.80    $ 0.70     14
Cumulative effect of accounting changes                   -           -       -        (0.10)    (0.05)
After accounting changes                               0.45        0.39      15          0.70      0.65      8

Segment Information - Industrial Businesses
                                                       2002        2001      V%          2002      2001     V%
Revenues
Aircraft Engines                                    $ 2,764     $ 3,055    (10)       $ 5,341   $ 5,793    (8)
Appliances                                            1,600       1,402      14         3,014     2,717     11
Industrial Products & Systems:
Industrial Systems                                    1,273       1,220       4         2,370     2,344      1
Lighting                                                532         604    (12)         1,072     1,213   (12)
Transportation Systems                                  594         572       4         1,076     1,120    (4)
GE Supply                                               626         586       7         1,158     1,152      1
Total Industrial Products & Systems                   3,025       2,982       1         5,676     5,829    (3)

Materials:
Plastics                                              1,420       1,363       4         2,599     2,811    (8)
Specialty Materials                                     608         493      23         1,009       979      3
Total Materials                                       2,028       1,856       9         3,608     3,790    (5)

NBC                                                   1,987       1,831       9         3,985     3,182     25
Power Systems                                         6,526       5,142      27        11,797     9,402     25
Technical Products and Services:
Medical Systems                                       2,212       1,960      13         4,075     3,788      8
Global eXchange Services                                104         188    (45)           209       358   (42)
Total Technical Products and Services                 2,316       2,148       8         4,284     4,146      3

Segment profit (1)
Aircraft Engines                                        566         552       3           987     1,032    (4)
Appliances                                              119          93      28           210       180     17
Industrial Products & Systems:
Industrial Systems                                      129         160    (19)           232       293   (21)
Lighting                                                 29          78    (63)            49       137   (64)
Transportation Systems                                  124         122       2           177       172      3
GE Supply                                                28          22      27            48        40     20
Total Industrial Products & Systems                     310         382    (19)           506       642   (21)

Materials:
Plastics                                                275         334    (18)           482       673   (28)
Specialty Materials                                      94          97     (3)           141       178   (21)
Total Materials                                         369         431    (14)           623       851   (27)

NBC                                                     545         491      11           858       789      9
Power Systems                                         1,910       1,153      66         3,462     2,010     72
Technical Products and Services:
Medical Systems                                         401         356      13           667       649      3
Global eXchange Services                                 10          67    (85)            15        98   (85)
Total Technical Products and Services                   411         423     (3)           682       747    (9)

(1) Segment profit 2001 data reclassified to conform to 2002 presentation.

G GE Capital Services
Summary of Operating Segments

                          Three Months Ended                                        Three Months Ended
                          6/30/02  6/30/01    $ V       %V                          6/30/02  6/30/01    $ V       %V
Consolidated
      Revenues                                                   Net Earnings
      Consumer Services     5,330     5,618    (288)      -5%    Consumer Services       559      586     (27)       -5%
      Equipment             1,733     1,768     (35)      -2%    Equipment               183      360    (177)      -49%
      Management                                                 Management
      Mid-Market            2,346     1,920      426      22%    Mid-Market              392      277      115       42%
      Financing                                                  Financing
      Specialized             784       727       57       8%    Specialized             171      161       10        6%
      Financing                                                  Financing
      Specialty Insurance   2,446     2,981    (535)     -18%    Specialty              (50)      279    (329)     -118%
                                                                 Insurance
      All Other             1,213     1,385    (172)     -12%    All Other                72     (52)      124      238%
      Total Revenues       13,852    14,399    (547)      -4%    Total Net Earnings    1,327    1,611    (284)      -18%

Consumer Services
      Revenues                                                   Net Earnings
      Global Consumer       1,501     1,370      131      10%    Global Consumer         323      242       81       33%
      Finance                                                    Finance
      GE Financial          2,817     3,198    (381)     -12%    GE Financial             53      149     (96)      -64%
      Assurance                                                  Assurance
      GE Card Services        962       956        6       1%    GE Card Services        176      187     (11)       -6%
      Other Consumer           50        94     (44)     -47%    Other Consumer            7        8      (1)      -13%
      Services                                                   Services
      Total Revenues        5,330     5,618    (288)      -5%    Total Net Earnings      559      586     (27)       -5%

Equipment Management
      Revenues                                                   Net Earnings
      Aviation Services       683       589       94      16%    Aviation Services       117      155     (38)      -25%
      Americom                  -       118    (118)    -100%    Americom                  -       34     (34)     -100%
      Other Equipment       1,050     1,061     (11)      -1%    Other Equipment          66      171    (105)      -61%
      Management                                                 Management
      Total Revenues        1,733     1,768     (35)      -2%    Total Net Earnings      183      360    (177)      -49%

Mid-Market Financing
      Revenues                                                   Net Earnings
      Commercial            1,170       997      173      17%    Commercial              165      119       46       39%
      Equipment                                                  Equipment
      Commercial Finance      554       436      118      27%    Commercial Finance      138       92       46       50%
      Vendor Financial        554       487       67      14%    Vendor Financial         74       62       12       19%
      Other Mid-Market         68         -       68    -        Other Mid-Market         15        4       11      275%
      Total Revenues        2,346     1,920      426      22%    Total Net Earnings      392      277      115       42%

Specialized Financing
      Revenues                                                   Net Earnings
      Real Estate             557       461       96      21%    Real Estate             133      123       10        8%
      SFG                     296       275       21       8%    SFG                     125      106       19       18%
      GE Equity              (87)      (21)     (66)    -314%    GE Equity              (85)     (64)     (21)      -33%
      Other Specialized        18        12        6      50%    Other Specialized       (2)      (4)        2       50%
      Financing                                                  Financing
      Total Revenues          784       727       57       8%    Total Net Earnings      171      161       10        6%

Specialty Insurance
      Revenues                                                   Net Earnings
      Mortgage Insurance      256       270     (14)      -5%    Mortgage Insurance      133       93       40       43%
      GE Global Insurance   2,076     2,565    (489)     -19%    GE Global             (236)      140    (376)     -269%
                                                                 Insurance
      Other Specialty         114       146     (32)     -22%    Other Specialty          53       46        7       15%
      Insurance                                                  Insurance
      Total Revenues        2,446     2,981    (535)     -18%    Total Net Earnings     (50)      279    (329)     -118%

All Other
      Revenues                                                   Net Earnings
      IT Solutions            994     1,090     (96)      -9%    IT Solutions              7      (4)       11      275%
      Other                   219       295     (76)     -26%    Other                    65     (48)      113      235%
      Total Revenues        1,213     1,385    (172)     -12%    Total Net Earnings       72     (52)      124      238%






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