-----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, EvuPsOwyppEEBY/402NFZGFV8t8e1Pd3cYtfb2HRdD6wVYbijnbY5782q0AGu7L2 askyvzbhIofV9xJ2JLe+zg== 0000040554-98-000133.txt : 19981111 0000040554-98-000133.hdr.sgml : 19981111 ACCESSION NUMBER: 0000040554-98-000133 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980926 FILED AS OF DATE: 19981110 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: 98743329 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 September 26, 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 November 6, 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 NINE MONTHS ENDED -------------------- -------------------- SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER 26, 27, 26, 27, (In millions) 1998 1997 1998 1997 -------- -------- -------- -------- REVENUES Revenues from services ......................................... $ 8,529 $ 7,195 $ 24,495 $ 20,649 Sales of goods ................................................. 1,806 1,182 5,325 3,159 -------- -------- -------- -------- 10,335 8,377 29,820 23,808 -------- -------- -------- -------- EXPENSES Interest ....................................................... 2,076 1,832 6,129 5,323 Operating and administrative ................................... 2,817 2,504 8,167 6,646 Cost of goods sold ............................................. 1,681 1,063 4,891 2,801 Insurance losses and policyholder and annuity benefits ......... 1,418 1,227 4,127 3,482 Provision for losses on financing receivables .................. 304 371 1,044 1,020 Depreciation and amortization of buildings and equipment and equipment on operating leases ............................. 663 623 1,913 1,751 Minority interest in net earnings of consolidated affiliates ... 14 13 35 27 -------- -------- -------- -------- 8,973 7,633 26,306 21,050 -------- -------- -------- -------- EARNINGS Earnings before income taxes ................................... 1,362 744 3,514 2,758 Provision for income taxes ..................................... (432) (176) (991) (775) -------- -------- -------- -------- NET EARNINGS ................................................... 930 568 2,523 1,983 Dividends ...................................................... (341) (529) (867) (1,186) Retained earnings at beginning of period ....................... 12,928 11,436 11,861 10,678 -------- -------- -------- -------- RETAINED EARNINGS AT END OF PERIOD ............................. $ 13,517 $ 11,475 $ 13,517 $ 11,475 ======== ======== ======== ========
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 SEPTEMBER DECEMBER 26, 31, (In millions) 1998 1997 -------- -------- (Unaudited) ASSETS Cash and equivalents ................................................................... $ 4,708 $ 4,648 Investment securities .................................................................. 57,079 53,103 Financing receivables: Time sales and loans, net of deferred income ......................................... 71,145 64,832 Investment in financing leases, net of deferred income ............................... 45,411 41,769 -------- -------- 116,556 106,601 Allowance for losses on financing receivables ........................................ (3,065) (2,802) -------- -------- Financing receivables - net ........................................................ 113,491 103,799 Other receivables - net ................................................................ 14,877 11,925 Equipment on operating leases (at cost), less accumulated amortization of $6,716 and $6,126 .................................................................. 20,209 18,689 Intangible assets ...................................................................... 10,737 9,459 Inventories ............................................................................ 729 786 Other assets ........................................................................... 32,306 26,368 -------- -------- TOTAL ASSETS ..................................................................... $254,136 $228,777 ======== ======== LIABILITIES AND EQUITY Short-term borrowings .................................................................. $ 98,485 $ 91,680 Long-term borrowings: Senior ............................................................................... 55,249 44,437 Subordinated ......................................................................... 697 697 Insurance liabilities, reserves and annuity benefits ................................... 52,991 50,248 Other liabilities ...................................................................... 16,522 14,315 Deferred income taxes .................................................................. 8,734 8,167 -------- -------- Total liabilities ................................................................ 232,678 209,544 -------- -------- Minority interest in equity of consolidated affiliates ................................. 1,076 860 -------- -------- Unrealized gains on investment securities .............................................. 1,435 1,145 Foreign currency translation adjustments ............................................... (154) (147) -------- -------- Accumulated non-owner changes in equity ................................................ 1,281 998 Capital stock .......................................................................... 770 770 Additional paid-in capital ............................................................. 4,814 4,744 Retained earnings ...................................................................... 13,517 11,861 -------- -------- Total equity ..................................................................... 20,382 18,373 -------- -------- TOTAL LIABILITIES AND EQUITY ..................................................... $254,136 $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) NINE MONTHS ENDED -------------------- SEPTEMBER SEPTEMBER 26, 27, (In millions) 1998 1997 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings ........................................................................... $ 2,523 $ 1,983 Adjustments to reconcile net earnings to cash provided from operating activities: Provision for losses on financing receivables ........................................ 1,044 1,020 Depreciation and amortization of buildings and equipment and equipment on operating leases .................................................................... 1,913 1,751 Other - net .......................................................................... 2,749 1,203 -------- -------- Cash provided from operating activities ............................................ 8,229 5,957 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Increase in loans to customers ......................................................... (48,057) (38,386) Principal collections from customers ................................................... 43,711 36,328 Investment in assets on financing leases ............................................... (13,886) (9,943) Principal collections on financing leases .............................................. 11,911 11,559 Net decrease in credit card receivables ................................................ 3,307 2,335 Buildings and equipment and equipment on operating leases: - additions ........................................................................ (4,010) (4,617) - dispositions ..................................................................... 2,021 1,867 Payments for principal businesses purchased, net of cash acquired ...................... (8,294) (1,532) Purchases of investment securities by insurance affiliates and annuity businesses ...... (11,845) (7,892) Dispositions and maturities of investment securities by insurance affiliates and annuity businesses .................................................................... 8,669 6,828 Other - net ............................................................................ (4,868) (4,456) -------- -------- Cash used for investing activities ................................................. (21,341) (7,909) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Net change in borrowings (maturities 90 days or less) .................................. 5,718 6,861 Newly issued debt - short-term (maturities 91-365 days) ............................... 4,126 3,240 - long-term senior .................................................. 26,158 12,099 Proceeds - non-recourse, leveraged lease debt .......................................... 971 129 Repayments and other reductions: - short-term (maturities 91-365 days) ............................... (17,992) (18,486) - long-term senior .................................................. (4,298) (861) Principal payments - non-recourse, leveraged lease debt ................................ (333) (262) Proceeds from sales of investment and annuity contracts ................................ 3,284 3,334 Redemption of investment and annuity contracts ......................................... (3,765) (3,251) Dividends paid ......................................................................... (867) (1,186) Issuance of preferred stock in excess of par value ..................................... 70 -- Issuance of variable cumulative preferred stock by consolidated affiliate .............. 100 100 -------- -------- Cash provided from financing activities ............................................ 13,172 1,717 -------- -------- INCREASE (DECREASE) IN CASH AND EQUIVALENTS ............................................ 60 (235) CASH AND EQUIVALENTS AT BEGINNING OF PERIOD ............................................ 4,648 3,074 -------- -------- CASH AND EQUIVALENTS AT END OF PERIOD .................................................. $ 4,708 $ 2,839 ======== ========
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 -------------------- SEPTEMBER SEPTEMBER 26, 27, (In millions) 1998 1997 -------- -------- Net earnings ........................................... $ 930 $ 568 Unrealized gains on investment securities - net ........ 130 503 Foreign currency translation adjustments ............... 26 5 -------- -------- Total .................................................. $ 1,086 $ 1,076 ======== ======== NINE MONTHS ENDED -------------------- SEPTEMBER SEPTEMBER 26, 27, 1998 1997 -------- -------- Net earnings ........................................... $ 2,523 $ 1,983 Unrealized gains on investment securities - net ........ 290 745 Foreign currency translation adjustments ............... (7) (38) -------- -------- Total .................................................. $ 2,806 $ 2,690 ======== ========
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 nine months of 1998 were $2,523 million, a $540 million (27%) increase over the first nine months of 1997. The results reflected the globalization and diversity of the Corporation's businesses and were led by double-digit increases in Specialized Financing, Consumer Services, 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 $2,454 million, a $528 million (27%) 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. The increase in net earnings for these businesses reflected a higher average level of invested assets. Financing spreads were essentially the same in both periods, reflecting slightly lower yields offset by lower borrowing rates. Earnings for these businesses were also significantly impacted by lower losses associated with the Corporation's equity investment in Montgomery Ward Holding Corp. ("MWHC"). This impact was partially offset by lower gains recognized on sales of assets. The increase in net earnings in the Specialty Insurance segment primarily reflected improved earnings in the mortgage insurance business, the result of improved market conditions, as well as increases in other insurance businesses. OPERATING RESULTS TOTAL REVENUES from all sources increased $6,012 million (25%) to $29,820 million for the first nine months of 1998, compared with $23,808 million for the first nine months of 1997. Revenues from the equipment management, consumer services, mid-market financing and specialized financing businesses increased $5,118 million (23%) 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 MWHC. This impact was partially offset by lower gains recognized on sales of assets. Revenues of the Specialty Insurance segment increased $679 million (36%) to $2,588 million for the first nine months of 1998 compared with the first nine months of 1997. The increase reflected higher 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 nine months of 1998 was $6,129 million, 15% higher than for the first nine months of 1997. The increase reflected the effects of higher average borrowings used to finance asset growth, slightly offset by the effects of lower average interest rates. The composite interest rate on the Corporation's borrowings for the first nine months of 1998 was 5.95% compared with 6.02% in the first nine months of 1997. OPERATING AND ADMINISTRATIVE EXPENSES were $8,167 million for the first nine months of 1998, a 23% increase over the first nine months 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 $645 million to $4,127 million for the first nine months of 1998, compared with the first nine months of 1997. The increase primarily reflected the acquisitions of the 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 $1,044 million for the first nine months of 1998 from $1,020 million for the first nine months 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 $162 million to $1,913 million for the first nine months of 1998 compared with $1,751 million for the first nine months of 1997. The increase was principally the result of higher levels of equipment on operating leases, primarily reflecting acquisition growth. PROVISION FOR INCOME TAXES was $991 million for the first nine months of 1998 (an effective tax rate of 28.2%), compared with $775 million for the first nine months of 1997 (an effective tax rate of 28.1%). The higher provision for income taxes primarily reflected increased pre-tax earnings subject to statutory rates. 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 $116.6 billion at September 26, 1998, from $106.6 billion at the end of 1997, primarily reflecting acquisition growth and higher origination volume, partially offset by securitizations of receivables and other decreases in the credit card portfolios. Related allowances for losses at September 26, 1998, aggregated $3.1 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 $48.4 billion at September 26, 1998, an increase of $0.3 billion from the end of 1997. Nonearning receivables were $1.1 billion at September 26, 1998, 2.3% 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 $1,052 million for the first nine months of 1998, compared with $912 million for the first nine months 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 $68.2 billion at September 26, 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 $282 million at September 26, 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 September 26, 1998, was $754 million, a decrease of $41 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 September 26, 1998 were approximately $119 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 $3.4 billion at September 26, 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 September 26, 1998, up from $9.0 billion at the end of 1997. OTHER MATTERS YEAR 2000 The inability of business processes to continue to function correctly after the beginning of the Year 2000 could have serious adverse effects on companies and entities throughout the world. The Corporation has undertaken a global effort to identify and mitigate Year 2000 issues in its information systems, products and services, facilities and suppliers as well as to assess the extent to which Year 2000 issues will impact its customers. Each business has a Year 2000 leader who oversees a multi-functional remediation project team responsible for applying a Six Sigma quality approach in four phases: (1) define/measure -- identify and inventory possible sources of Year 2000 issues; (2) analyze -- determine the nature and extent of Year 2000 issues and develop project plans to address those issues; (3) improve -- execute project plans and perform a majority of the testing; and (4) control -- complete testing, continue monitoring readiness and complete necessary contingency plans. The progress of this program is monitored at each business, and company-wide reviews with senior management are conducted monthly. Management plans to have completed the first three phases of the program for a substantial majority of mission-critical systems by the end of 1998 and to have nearly all significant information systems, products and services, facilities and suppliers in the control phase of the program by mid-1999. The scope of the global Year 2000 effort encompasses many thousands of applications and computer programs; products and services; facilities and facilities-related equipment; suppliers; and, customers. Business operations are also dependent on the Year 2000 readiness of infrastructure suppliers in areas such as utility, communications, transportation and other services. In this environment, there will likely be instances of failure that could cause disruptions in business processes or that could affect customers' ability to repay amounts owed to the Corporation. The likelihood and effects of failures in infrastructure systems and in the supply chain cannot be estimated. However, with respect to operations under its direct control, management does not expect, in view of its Year 2000 program efforts and the diversity of its businesses, suppliers and customers, that occurrences of Year 2000 failures will have a material adverse effect on the financial position, results of operations or liquidity of the Corporation. Total Year 2000 remediation expenditures are expected to be approximately $237 million, of which two-thirds is expected to be spent by the end of 1998. Substantially all of the remainder is expected to be spent in 1999. Most of these costs are not likely to be incremental costs, but rather will represent the redeployment of existing resources. The activities involved in the Year 2000 effort necessarily involve estimates and projections of activities and resources that will be required in the future. These estimates and projections could change as work progresses. 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 NINE MONTHS ENDED SEPTEMBER 26, 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 ........................................................................... $ 2,523 $ 2,523 Provision for income taxes ............................................................. 991 991 Minority interest in net earnings of consolidated affiliates ........................... 35 35 -------- -------- Earnings before provision for income taxes and minority interest ....................... 3,549 3,549 -------- -------- Fixed charges: Interest ............................................................................. 6,266 6,266 One-third of rentals ................................................................. 204 204 -------- -------- Total fixed charges .................................................................... 6,470 6,470 -------- -------- Less interest capitalized, net of amortization ......................................... 65 65 -------- -------- Earnings before provision for income taxes and minority interest, plus fixed charges ... $ 9,954 $ 9,954 ======== ======== Ratio of earnings to fixed charges ..................................................... 1.54 ======== Preferred stock dividend requirements .................................................. $ 69 Ratio of earnings before provision for income taxes to net earnings .................... 1.39 Preferred stock dividend factor on pre-tax basis ....................................... 96 Fixed charges .......................................................................... 6,470 -------- Total fixed charges and preferred stock dividend requirements .......................... $ 6,566 ======== Ratio of earnings to combined fixed charges and preferred stock dividends .............. 1.52 ========
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: November 10, 1998 By: /s/ J.A. Parke -------------------------------- J.A. Parke, Senior Vice President, Finance (Principal Financial Officer) Date: November 10, 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 NINE MONTHS ENDED SEPTEMBER 26, 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 ........................................................................... $ 2,523 $ 2,523 Provision for income taxes ............................................................. 991 991 Minority interest in net earnings of consolidated affiliates ........................... 35 35 -------- -------- Earnings before provision for income taxes and minority interest ....................... 3,549 3,549 -------- -------- Fixed charges: Interest ............................................................................. 6,266 6,266 One-third of rentals ................................................................. 204 204 -------- -------- Total fixed charges .................................................................... 6,470 6,470 -------- -------- Less interest capitalized, net of amortization ......................................... 65 65 -------- -------- Earnings before provision for income taxes and minority interest, plus fixed charges ... $ 9,954 $ 9,954 ======== ======== Ratio of earnings to fixed charges ..................................................... 1.54 ======== Preferred stock dividend requirements .................................................. $ 69 Ratio of earnings before provision for income taxes to net earnings .................... 1.39 Preferred stock dividend factor on pre-tax basis ....................................... 96 Fixed charges .......................................................................... 6,470 -------- Total fixed charges and preferred stock dividend requirements .......................... $ 6,566 ======== Ratio of earnings to combined fixed charges and preferred stock dividends .............. 1.52 ========
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 SEPTEMBER 26, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000040554 GENERAL ELECTRIC CAPITAL CORPORATION 1,000,000 9-MOS DEC-31-1998 SEP-26-1998 4,708 57,079 116,556 3,065 729 0 31,115 8,397 254,136 0 55,946 0 2 768 19,612 254,136 5,325 29,820 4,891 0 8,167 1,044 6,129 3,514 991 2,523 0 0 0 2,523 0.00 0.00
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