-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bt8YFVEsHOq7aGcDbZCImPF92R8WEiflxJ6VKq7UapCygyEgarJ+TxTOWWeF0Mn8 Il2iRodkADOj/0cU4MwyLQ== 0000040554-98-000094.txt : 19980803 0000040554-98-000094.hdr.sgml : 19980803 ACCESSION NUMBER: 0000040554-98-000094 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980627 FILED AS OF DATE: 19980731 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL ELECTRIC CAPITAL CORP CENTRAL INDEX KEY: 0000040554 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 131500700 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-22265 FILM NUMBER: 98675575 BUSINESS ADDRESS: STREET 1: 260 LONG RIDGE RD CITY: STAMFORD STATE: CT ZIP: 06927 BUSINESS PHONE: 2033574000 MAIL ADDRESS: STREET 1: 260 LONG RIDGE ROAD CITY: STAMFORD STATE: CT ZIP: 06927 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL ELECTRIC CREDIT CORP DATE OF NAME CHANGE: 19871216 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------- FORM 10-Q ------------- | X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 27, 1998 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 1-6461 ----------------------------- GENERAL ELECTRIC CAPITAL CORPORATION ------------------------------------ (Exact name of registrant as specified in its charter) NEW YORK 13-1500700 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 260 LONG RIDGE ROAD, STAMFORD, CONNECTICUT 06927 (Address of principal executive offices) (Zip Code) (203) 357-4000 (Registrant's telephone number, including area code) ------------------------------------ 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 | | At July 30, 1998, 3,837,825 shares of common stock with a par value of $200 were outstanding. REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED DISCLOSURE FORMAT. TABLE OF CONTENTS PAGE -------- PART I - FINANCIAL INFORMATION. Item 1. Financial Statements .......................... 1 Item 2. Management's Discussion and Analysis of Results of Operations ......................... 6 Exhibit 12. Computation of Ratio of Earnings to Fixed Charges and Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends ..................................... 9 PART II - OTHER INFORMATION. Item 6. Exhibits and Reports on Form 8-K .............. 10 Signatures .................................................. 11 Index to Exhibits ........................................... 12 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS.
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES CONDENSED STATEMENT OF CURRENT AND RETAINED EARNINGS (Unaudited) THREE MONTHS ENDED SIX MONTHS ENDED -------------------- -------------------- JUNE 27, JUNE 28, JUNE 27, JUNE 28, (In millions) 1998 1997 1998 1997 -------- -------- -------- -------- REVENUES Revenues from services ......................................... $ 8,091 $ 6,597 $ 15,966 $ 13,454 Sales of goods ................................................. 1,893 1,061 3,519 1,977 -------- -------- -------- -------- 9,984 7,658 19,485 15,431 -------- -------- -------- -------- EXPENSES Interest ....................................................... 2,105 1,780 4,053 3,491 Operating and administrative ................................... 2,719 1,925 5,350 4,142 Cost of goods sold ............................................. 1,728 930 3,210 1,738 Insurance losses and policyholder and annuity benefits ......... 1,367 1,106 2,709 2,255 Provision for losses on financing receivables .................. 408 337 740 649 Depreciation and amortization of buildings and equipment and equipment on operating leases ............... 598 563 1,250 1,128 Minority interest in net earnings of consolidated affiliates ... 10 1 21 14 -------- -------- -------- -------- 8,935 6,642 17,333 13,417 -------- -------- -------- -------- EARNINGS Earnings before income taxes ................................... 1,049 1,016 2,152 2,014 Provision for income taxes ..................................... (236) (298) (559) (599) -------- -------- -------- -------- NET EARNINGS ................................................... 813 718 1,593 1,415 Dividends ...................................................... (153) (340) (526) (657) Retained earnings at beginning of period ....................... 12,268 11,058 11,861 10,678 -------- -------- -------- -------- RETAINED EARNINGS AT END OF PERIOD ............................. $ 12,928 $ 11,436 $ 12,928 $ 11,436 ======== ======== ======== ========
See Notes to Condensed, Consolidated Financial Statements. 1 ITEM 1. FINANCIAL STATEMENTS (Continued).
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES CONDENSED STATEMENT OF FINANCIAL POSITION JUNE 27, DECEMBER 31, (In millions) 1998 1997 -------- -------- (Unaudited) ASSETS Cash and equivalents ................................................................... $ 2,750 $ 4,648 Investment securities .................................................................. 56,196 53,103 Financing receivables: Time sales and loans, net of deferred income ......................................... 65,615 64,832 Investment in financing leases, net of deferred income ............................... 43,641 41,769 -------- -------- 109,256 106,601 Allowance for losses on financing receivables ........................................ (2,871) (2,802) -------- -------- Financing receivables - net ........................................................ 106,385 103,799 Other receivables - net ................................................................ 14,367 11,925 Equipment on operating leases (at cost), less accumulated amortization of $6,368 and $6,126 .................................................................. 19,783 18,689 Intangible assets ...................................................................... 9,898 9,459 Inventories ............................................................................ 764 786 Other assets ........................................................................... 30,665 26,368 -------- -------- TOTAL ASSETS ..................................................................... $240,808 $228,777 ======== ======== LIABILITIES AND EQUITY Short-term borrowings .................................................................. $ 97,699 $ 91,680 Long-term borrowings: Senior ............................................................................... 46,573 44,437 Subordinated ......................................................................... 697 697 Insurance liabilities, reserves and annuity benefits ................................... 52,182 50,248 Other liabilities ...................................................................... 14,447 14,315 Deferred income taxes .................................................................. 8,524 8,167 -------- -------- Total liabilities ................................................................ 220,122 209,544 -------- -------- Minority interest in equity of consolidated affiliates ................................. 1,049 860 -------- -------- Unrealized gains on investment securities .............................................. 1,305 1,145 Foreign currency translation adjustments ............................................... (180) (147) -------- -------- Accumulated non-owner changes in equity ................................................ 1,125 998 Capital stock .......................................................................... 770 770 Additional paid-in capital ............................................................. 4,814 4,744 Retained earnings ...................................................................... 12,928 11,861 -------- -------- Total equity ..................................................................... 19,637 18,373 -------- -------- TOTAL LIABILITIES AND EQUITY ..................................................... $240,808 $228,777 ======== ========
See Notes to Condensed, Consolidated Financial Statements. 2 ITEM 1. FINANCIAL STATEMENTS (Continued).
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES CONDENSED STATEMENT OF CASH FLOWS (Unaudited) SIX MONTHS ENDED -------------------- JUNE 27, JUNE 28, (In millions) 1998 1997 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings ........................................................................... $ 1,593 $ 1,415 Adjustments to reconcile net earnings to cash provided from operating activities: Provision for losses on financing receivables ........................................ 740 649 Depreciation and amortization of buildings and equipment and equipment on operating leases ....................................................... 1,250 1,128 Other - net .......................................................................... 1,209 1,275 -------- -------- Cash provided from operating activities ............................................ 4,792 4,467 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Increase in loans to customers ......................................................... (30,358) (21,757) Principal collections from customers ................................................... 28,864 20,571 Investment in assets on financing leases ............................................... (8,867) (7,407) Principal collections on financing leases .............................................. 7,121 7,382 Net decrease (increase) in credit card receivables ..................................... (484) 1,700 Buildings and equipment and equipment on operating leases: - additions ......................................................... (3,921) (2,917) - dispositions ...................................................... 2,951 1,119 Payments for principal businesses purchased, net of cash acquired ...................... (849) (581) Purchases of investment securities by insurance affiliates and annuity businesses ...... (8,925) (5,160) Dispositions and maturities of investment securities by insurance affiliates and annuity businesses ................................................................ 6,242 4,359 Other - net ............................................................................ (3,287) (2,165) -------- -------- Cash used for investing activities ................................................. (11,513) (4,856) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Net change in borrowings (maturities 90 days or less) .................................. 4,821 5,579 Newly issued debt - short-term (maturities 91-365 days) ............................... 2,891 2,098 - long-term senior .................................................. 14,362 7,039 Proceeds - non-recourse, leveraged lease debt .......................................... 535 -- Repayments and other reductions: - short-term (maturities 91-365 days) ............................... (13,142) (13,456) - long-term senior .................................................. (3,610) (495) Principal payments - non-recourse, leveraged lease debt ................................ (247) (186) Proceeds from sales of investment and annuity contracts ................................ 2,066 1,886 Redemption of investment and annuity contracts ......................................... (2,397) (1,942) Dividends paid ......................................................................... (526) (657) Issuance of preferred stock in excess of par value ..................................... 70 -- Issuance of variable cumulative preferred stock by consolidated affiliate .............. -- 100 -------- -------- Cash provided from (used for) financing activities ................................. 4,823 (34) -------- -------- DECREASE IN CASH AND EQUIVALENTS ....................................................... (1,898) (423) CASH AND EQUIVALENTS AT BEGINNING OF PERIOD ............................................ 4,648 3,074 -------- -------- CASH AND EQUIVALENTS AT END OF PERIOD .................................................. $ 2,750 $ 2,651 ======== ========
See Notes to Condensed, Consolidated Financial Statements. 3 ITEM 1. FINANCIAL STATEMENTS (Continued). GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES NOTES TO CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. The accompanying condensed quarterly financial statements represent the adding together of General Electric Capital Corporation and all majority-owned and controlled affiliates (collectively called "the Corporation" or "GECC"). All significant transactions among the parent and consolidated affiliates have been eliminated. Certain prior period data have been reclassified to conform to the current period presentation. 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. Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting Comprehensive Income, was adopted as of January 1, 1998. This Statement requires reporting of changes in share owners' equity that do not result directly from transactions with share owners. An analysis of these changes follows:
THREE MONTHS ENDED -------------------- JUNE 27, JUNE 28, (Dollars in millions) 1998 1997 -------- -------- Net earnings ........................................... $ 813 $ 718 Unrealized gains on investment securities - net ........ 157 626 Foreign currency translation adjustments ............... (25) (9) -------- -------- Total .................................................. $ 945 $ 1,335 ======== ======== SIX MONTHS ENDED -------------------- JUNE 27, JUNE 28, 1998 1997 -------- -------- Net earnings ........................................... $ 1,593 $ 1,415 Unrealized gains on investment securities - net ........ 160 242 Foreign currency translation adjustments ............... (33) (43) -------- -------- Total .................................................. $ 1,720 $ 1,614 ======== ========
4 ITEM 1. FINANCIAL STATEMENTS (Continued). 4. In June 1998, the Financial Accounting Standards Board issued SFAS 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 other comprehensive income pending recognition in earnings. The Corporation will not adopt the Statement until required to do so on January 1, 2000. 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS. OVERVIEW Net earnings for the first half of 1998 were $1,593 million, a $178 million (13%) increase over the first half of 1997. The results reflected the globalization and diversity of the Corporation's businesses and were led by double-digit increases in Specialized Financing, Specialty Insurance and Mid-Market Financing activities. The Corporation's contribution to its parent, General Electric Capital Services, Inc. ("GECS"), after payment of dividends on its variable cumulative preferred stock, was $1,548 million, a $171 million (12%) increase over the comparable 1997 period. Earnings of the lending, leasing and equipment management businesses are significantly influenced by the level of invested assets, the related financing spreads (the excess of rates earned -- yields -- over rates on borrowings) and the quality of those assets. Net earnings for these businesses increased, primarily from a higher average level of invested assets and a lower effective tax rate. These increases were offset in part by decreased earnings from Consumer Services activities, attributable to the U.S. private-label credit card and automobile financing businesses. Financing spreads were essentially flat compared with the prior year, reflecting slightly higher yields offset by higher borrowing rates. The increase in net earnings in the Specialty Insurance segment reflected improved earnings in the mortgage insurance business, the result of improved market conditions, as well as increases in the other insurance businesses. OPERATING RESULTS TOTAL REVENUES from all sources increased $4,054 million (26%) to $19,485 million for the first half of 1998, compared with $15,431 million for the first half of 1997. Revenues from the equipment management, consumer services, mid-market financing and specialized financing businesses increased $3,145 million (22%) over the comparable prior-year period. A significant portion of the increase arose from sales of goods by the computer equipment distribution businesses, reflecting both acquisition and core growth. The increase also reflected a higher average level of invested assets, resulting principally from acquisitions of portfolios and businesses, as well as increased premiums related to the acquisition of consumer savings and insurance businesses in 1997 and 1998. Revenues were also impacted by lower losses associated with the Corporation's equity investment in Montgomery Ward Holding Corp. This impact was largely offset by no counterpart to a 1997 gain recognized on the sale of an investment in the stock of a publicly traded company. Revenues of the Specialty Insurance segment increased $579 million (50%) to $1,748 million for the first half of 1998 compared with the first half of 1997. The increase primarily reflected increased investment income resulting from continued growth in the investment portfolios and a higher level of gains on investment securities as well as growth in origination volume. The increase also reflected the 1997 contribution of assets of Consolidated Insurance Group, a component of Consolidated Financial Insurance, from GECS to the Corporation. INTEREST EXPENSE for the first half of 1998 was $4,053 million, 16% higher than for the first half of 1997. The increase reflected the effects of higher average borrowings used to finance asset growth combined with the effects of higher average interest rates. The composite interest rate on the Corporation's borrowings for the first half of 1998 was 6.11% compared with 5.99% in the first half of 1997. OPERATING AND ADMINISTRATIVE EXPENSES were $5,350 million for the first half of 1998, a 29% increase over the first half of 1997. The increase primarily reflected costs associated with businesses and portfolios acquired over the past year and higher investment levels. INSURANCE LOSSES AND POLICYHOLDER AND ANNUITY BENEFITS increased $454 million to $2,709 million for the first half of 1998, compared with the first half of 1997. The increase primarily reflected the acquisitions of consumer savings and insurance businesses and higher origination volume, partially offset by improved market conditions in the mortgage insurance business. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS (Continued). PROVISION FOR LOSSES ON FINANCING RECEIVABLES increased to $740 million for the first half of 1998 from $649 million for the first half of 1997. These provisions principally related to private-label and bank credit cards in the Consumer Services segment that are discussed below under Portfolio Quality. DEPRECIATION AND AMORTIZATION OF BUILDINGS AND EQUIPMENT AND EQUIPMENT ON OPERATING LEASES increased $122 million (11%) to $1,250 million for the first half of 1998 compared with $1,128 million for the first half of 1997. The increase was principally the result of higher levels of equipment on operating leases, primarily reflecting acquisition growth and higher aircraft volume. PROVISION FOR INCOME TAXES was $559 million for the first half of 1998 (an effective tax rate of 26.0%), compared with $599 million for the first half of 1997 (an effective tax rate of 29.7%). The lower provision for income taxes and the decrease in the 1998 effective tax rate resulted primarily from certain tax-advantaged transactions, increased tax credits and decreases in taxes on non-U.S. income. PORTFOLIO QUALITY FINANCING RECEIVABLES are the financing segment's largest asset and its primary source of revenues. The portfolio of financing receivables, before allowance for losses, increased to $109.3 billion at June 27, 1998, from $106.6 billion at the end of 1997, primarily reflecting acquisition growth and higher origination volume, partially offset by seasonal decreases in the credit card portfolios. Related allowances for losses at June 27, 1998, aggregated $2.9 billion (2.63% of receivables - the same as at the end of 1997) and, in management's judgment, are appropriate given the risk profile of the portfolio. A discussion about the quality of certain elements of the portfolio of financing receivables follows. "Nonearning" receivables are those that are 90 days or more delinquent (or for which collection has otherwise become doubtful) and "reduced- earning" receivables are commercial receivables whose terms have been restructured to a below-market yield. The following discussion of the nonearning and reduced-earning receivable balances and write-off amounts excludes amounts related to Montgomery Ward Holding Corp. and affiliates, which are separately discussed below. CONSUMER FINANCING RECEIVABLES, primarily credit card and personal loans and auto loans and leases, were $48.6 billion at June 27, 1998, an increase of $0.5 billion from the end of 1997. Nonearning receivables were $1.1 billion at June 27, 1998, 2.2% of total consumer financing receivables, compared with $1.0 billion, 2.2% of total consumer receivables, at December 31, 1997. Write-offs of consumer receivables increased to $714 million for the first half of 1998, compared with $607 million for the first half of 1997. This increase was primarily attributable to higher average receivable balances resulting from a combination of origination volume and acquisitions of businesses and portfolios as well as the effects of higher delinquencies at the end of 1997, consistent with overall industry experience. OTHER FINANCING RECEIVABLES, totaling $60.7 billion at June 27, 1998 ($58.5 billion at December 31, 1997), consisted of a diverse commercial, industrial and equipment loan and lease portfolio. Related nonearning and reduced-earning receivables were $358 million at June 27, 1998, compared with $353 million at year-end 1997. As discussed in the Corporation's Annual Report on Form 10-K for the year ended December 31, 1997, Montgomery Ward Holding Corp. (MWHC) filed a bankruptcy petition for reorganization in 1997. The Corporation's recorded investment in MWHC and affiliates at June 27, 1998, was $777 million, a decrease of $18 million from the end of 1997, and consisted primarily of inventory financing. Income recognition had been suspended on these pre-bankruptcy petition investments. Subsequent to the petition, the Corporation committed to provide MWHC up to $1.0 billion in debtor-in-possession financing, subject to certain conditions, in order to fund working capital requirements and general corporate expenses. A majority of this facility has been syndicated; the Corporation's loans under this facility at June 27, 1998 were approximately $92 million. The Corporation also provides financing to customers of MWHC and affiliates through the Corporation's wholly-owned affiliates, Montgomery Ward Credit Corporation and Monogram Credit Card Bank of Georgia. These receivables, which represent revolving credit card transactions directly with customers of MWHC and affiliates, aggregated approximately $3.6 billion at June 27, 1998, including $1.7 billion that have been sold with recourse by the Corporation's affiliates. The obligations of customers with respect to these receivables are not affected by the bankruptcy filing. MWHC and its affiliates, under new management since 1997, are continuing their restructuring efforts as well as developing a plan of reorganization. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS (Continued). The Corporation held loans and leases to commercial airlines amounting to $9.6 billion at June 27, 1998, up from $9.0 billion at the end of 1997. 8 EXHIBIT 12
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS SIX MONTHS ENDED JUNE 27, 1998 (Unaudited) RATIO OF EARNINGS TO COMBINED FIXED RATIO OF CHARGES EARNINGS AND TO PREFERRED FIXED STOCK (Dollar amounts in millions) CHARGES DIVIDENDS -------- -------- Net earnings ........................................... $ 1,593 $ 1,593 Provision for income taxes ............................. 559 559 Minority interest in net earnings of consolidated affiliates ............................................ 21 21 -------- -------- Earnings before provision for income taxes and minority interest ..................................... 2,173 2,173 -------- -------- Fixed charges: Interest ............................................. 4,121 4,121 One-third of rentals ................................. 131 131 -------- -------- Total fixed charges .................................... 4,252 4,252 -------- -------- Less interest capitalized, net of amortization ......... 40 40 -------- -------- Earnings before provision for income taxes and minority interest, plus fixed charges .......................... $ 6,385 $ 6,385 ======== ======== Ratio of earnings to fixed charges ..................... 1.50 ======== Preferred stock dividend requirements .................. $ 45 Ratio of earnings before provision for income taxes to net earnings .......................................... 1.35 Preferred stock dividend factor on pre-tax basis ....... 61 Fixed charges .......................................... 4,252 -------- Total fixed charges and preferred stock dividend requirements .......................................... $ 4,313 ======== Ratio of earnings to combined fixed charges and preferred stock dividends ............................. 1.48 ========
For purposes of computing the ratios, fixed charges consist of interest on all indebtedness and one-third of rentals, which management believes is a reasonable approximation of the interest factor of such rentals. 9 PART II--OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a. EXHIBITS. Exhibit 12. Computation of ratio of earnings to fixed charges and computation of ratio of earnings to combined fixed charges and preferred stock dividends. Exhibit 27. Financial Data Schedule (filed electronically only). b. REPORTS ON FORM 8-K. None. 10 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 CAPITAL CORPORATION ------------------------------------ (Registrant) Date: July 31, 1998 By: /s/ J.A. Parke ------------------------------------ J.A. Parke, Senior Vice President, Finance (Principal Financial Officer) Date: July 31, 1998 By: /s/ J.C. Amble ------------------------------------ J.C. Amble, Vice President and Controller (Principal Accounting Officer) 11 GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES INDEX TO EXHIBITS EXHIBIT NO. PAGE - ----------- -------- 12 Computation of ratio of earnings to fixed charges and computation of ratio of earnings to combined fixed charges and preferred stock dividends ....... 9 27 Financial Data Schedule (filed electronically only) 12 EX-12 2 EXHIBIT 12 EXHIBIT 12
GENERAL ELECTRIC CAPITAL CORPORATION AND CONSOLIDATED AFFILIATES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS SIX MONTHS ENDED JUNE 27, 1998 (Unaudited) RATIO OF EARNINGS TO COMBINED FIXED RATIO OF CHARGES EARNINGS AND TO PREFERRED FIXED STOCK (Dollar amounts in millions) CHARGES DIVIDENDS -------- -------- Net earnings ........................................... $ 1,593 $ 1,593 Provision for income taxes ............................. 559 559 Minority interest in net earnings of consolidated affiliates ............................................ 21 21 -------- -------- Earnings before provision for income taxes and minority interest ..................................... 2,173 2,173 -------- -------- Fixed charges: Interest ............................................. 4,121 4,121 One-third of rentals ................................. 131 131 -------- -------- Total fixed charges .................................... 4,252 4,252 -------- -------- Less interest capitalized, net of amortization ......... 40 40 -------- -------- Earnings before provision for income taxes and minority interest, plus fixed charges .......................... $ 6,385 $ 6,385 ======== ======== Ratio of earnings to fixed charges ..................... 1.50 ======== Preferred stock dividend requirements .................. $ 45 Ratio of earnings before provision for income taxes to net earnings .......................................... 1.35 Preferred stock dividend factor on pre-tax basis ....... 61 Fixed charges .......................................... 4,252 -------- Total fixed charges and preferred stock dividend requirements .......................................... $ 4,313 ======== Ratio of earnings to combined fixed charges and preferred stock dividends ............................. 1.48 ========
For purposes of computing the ratios, fixed charges consist of interest on all indebtedness and one-third of rentals, which management believes is a reasonable approximation of the interest factor of such rentals. EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 27, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000040554 GENERAL ELECTRIC CAPITAL CORPORATION 1,000,000 6-MOS DEC-31-1998 JUN-27-1998 2,750 56,196 109,256 2,871 764 0 30,106 7,915 240,808 0 47,270 0 2 768 18,867 240,808 3,519 19,485 3,210 0 5,350 740 4,053 2,152 559 1,593 0 0 0 1,593 0.00 0.00
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