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Non-Tech : General Electric (GE) -- Ignore unavailable to you. Want to Upgrade?

To: Yogizuna who wrote (1545)	10/26/2000 4:17:54 PM
From: Captain Jack	Respond to of 3256

Management`s Discussions: 10-Q, GENERAL ELECTRIC CAPITAL CORP (Edgar Online via COMTEX) Company Name: GENERAL ELECTRIC CAPITAL CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS OVERVIEW Net earnings for the first nine months of 2000 were $3,729 million, a $631 million (20%) increase over the first nine months of 1999. The results reflected the globalization and diversity of the Corporation's businesses. The improvement in earnings was largely attributable to higher level of asset gains and the effects of continued asset growth, principally from acquisitions of businesses and portfolios. OPERATING RESULTS TOTAL REVENUES from all sources increased $7,679 million (23%) to $40,751 million for the first nine months of 2000, compared with $33,072 million for the first nine months of 1999. The increase included a pretax gain of $193 million on the Corporation's holdings of the common stock of PaineWebber Group, Inc. (PaineWebber), which are classified as trading securities. See discussion of Significant Pending Transaction below. The remaining increase primarily reflected a combination of acquisition and core growth in the Consumer Services segment, asset gains and core growth in the Specialized Financing segment, core growth in the Mid-Market Financing segment, and the consolidation of the retail operations. INTEREST EXPENSE for the first nine months of 2000 was $7,676 million, 21% higher than for the first nine months of 1999. The increase reflected higher interest rates and higher average borrowings used to finance asset growth.. The composite interest rate on the Corporation's borrowings for the first nine months of 2000 was 5.77% compared with 5.13% in the first nine months of 1999. OPERATING AND ADMINISTRATIVE EXPENSES were $11,627 million for the first nine months of 2000, a 21% increase over the first nine months of 1999. The increase included unusual pretax charges of $326 million for asset writedowns, employee severance and other facilities costs in connection with third quarter decisions to rationalize certain information technology and mortgage servicing operations. The remaining increase primarily reflected increases in insurance commissions and other costs associated with businesses and portfolios acquired over the past year. Excluding the effects of current year acquisitions and the unusual charges, operating and administrative expenses would have decreased approximately 2%. COST OF GOODS SOLD is associated with activities of the Corporation's computer equipment distribution business and retail operations. This cost amounted to $6,515 million for the first nine months of 2000, compared with $5,441 million for the first nine months of 1999. The increase primarily reflected the consolidation of the retail operations. INSURANCE LOSSES AND POLICYHOLDER AND ANNUITY BENEFITS increased $1, 661 million to $5,817 million for the first nine months of 2000, compared with the first nine months of 1999. The increase primarily reflected the effects of business acquisitions and growth in premium volume throughout the period, partially offset by improved market conditions in the mortgage insurance business. PROVISION FOR LOSSES ON FINANCING RECEIVABLES was $1,362 million for the first nine months of 2000 compared with $1,044 million for the first nine months of 1999. This provision principally related to credit cards, personal loans and auto loans and leases in the Consumer Services segment, which are discussed below under Portfolio Quality. DEPRECIATION AND AMORTIZATION OF BUILDINGS AND EQUIPMENT AND EQUIPMENT ON OPERATING LEASES increased to $2,455 million for the first nine months of 2000 compared with $2,279 million for the first nine months of 1999. The increase was principally the result of higher shorter-lived levels of equipment on operating leases, primarily reflecting acquisition growth. PROVISION FOR INCOME TAXES was $1,508 million for the first nine months of 2000 (an effective tax rate of 28.8%), compared with $1,090 million for the first nine months of 1999 (an effective tax rate of 26.0%). The higher effective tax rate primarily reflected increased earnings taxed at statutory rates.