PRO FORMA COMBINED DEBT AND CAPITALIZATION OF GENERAL ELECTRIC AND UTAH (Unaudited) The following table sets forth the debt and capitalization of General Electric and Utah at September 30, 1976 and July 31, 1976, respectively. Pro forma combined amounts give effect to the proposed merger of General Electric and Utah. Pro Forma General Adjustments Pro Forma Electric Utah Add (Deduct)(a) Combined (Amounts in millions) Long-term borrowings (excluding current portion): 6 1/4% Debentures due 1979....................................... $ 125.0 $ $ $ 125.0 5 3/4% Notes due 1991................................................ 93.7 93.7 5.30% Debentures due 1992..................................... 125.3 125.3 7 1/2% Debentures due 1996....................................... 180.2 180.2 8 1/2% Debentures due 2004....................................... 300.0 300.0 4 1/4% Bonds due 1985................................................ 31.9 _ _ 31.9 4 1/4% Debentures due 1987....................................... 50.0 50.0 5 1/2% Sterling/Dollar Guaranteed Loan Stock due 1993....................................................................... 6.3 - - 6.3 Notes payable to banks, 7.3% (weighted average), due in varying installments to 1981............ 87.1 87.1 Notes payable to insurance company, 7.6%, due in varying installments to 1988................................. 43.0 43.0 8% Guaranteed Sinking Fund Debentures due 1987....................................................................... 19.6 - 19.6 7 1/2% Guaranteed Notes due 1979............................ 20.0 20.0 Other.......................................................................... 112.3 _5.6 117.9 Total long-term borrowings.............................. 1,024.7 175.3 1,200.0 Minority interest in equity of consolidated affiliates....... 77.7 29.1 106.8 Share owners' equity: General Electric preferred stock, par value $ 1.00 Authorized2,000,000 shares............................. Utah preferred stock, without par value Authorized1,000,000 shares............................. Common stock, par value $2.50............................... 471.2 102.5 573.7 Common stock, par value $2.00............................... 63.1 (63.1) Amounts received for stock in excess of par value .. 520.2 91.5 (39.4) 572.3 Retained earnings..................................................... 3,558.4 488.8 4,047.2( Treasury stock........................................................... (188.6) (188.6) Total share owners' equity................................ 4,361.2 643.4 5,004.6 Total long-term borrowings minority interest and share owners' equity............................... $5,463.6 $847.8 $ $6,311.4 Notes: (a) Reflects a pooling of interests by the issuance of 1.3 shares of GE Common Stock for each share of Utah Common Stock outstanding. (b) Utah's long-term agreements with lending institutions contain restrictive provisions on certain payments unless Utah has adequate consolidated retained earnings (as defined). Such provisions include limitations on the payment of cash dividends and on the purchase or redemption of outstanding capital stock. Retained earnings of Utah amounting to $261.6 million were free of such restrictions at July 31, 1976. General Electric's retained earnings are not subject to any restrictive provisions. (c) Guarantees by General Electric are not considered to be material in relation to General Electric's financial position. See Note 10 of General Electric's notes to financial statements. For commitments and guarantees of Utah with respect to Brazilian operations, see Note 12 of Utah's notes to consolidated financial statements. GENERAL ELECTRIC COMPANY AND CONSOLIDATED AFFILIATES 15 14 STATEMENT OF CURRENT AND RETAINED EARNINGS The following statement of current and retained earnings of General Electric Company and consolidated affiliates, insofar as it relates to the years 1971 through 1975, has been examined by Peat, Marwick, Mitchell & Co., independent certified public accountants, whose report thereon appears elsewhere in this document. Amounts for the six months ended June 30, 1975 and 1976 (not audited by independent certified public accountants) reflect all known adjustments, consisting only of normal recurring accruals, considered necessary to present a fair statement of the results of operations. This statement should be read in conjunction with the other financial statements of General Electric Company and consolidated affiliates and notes to financial statements included elsewhere herein. See "General Electric Management's Discussion and Analysis of Statement of Current and Retained EarningsThree Months and Nine Months Ended September 30, 1976" for unaudited results for the nine months ended September 30, 1976. Six months ended June 30 (Unaudited) Year ended December 31, 1971 1972 1973 1974 1975 1975 1976 (Amounts in millions) Net sales billed................................ $9,425.3 $10,239.5 $1 1,575.3 $13,413.1 $13,399.1 $6,349.1 $6,909.3 Operating costs (11)(16)(17): Cost of goods sold (3)............ 6,962.1 7,509.6 8,515.2 10,137.6 10,195.3 4,909.2 5,198.8 Selling, general and administrative expenses.................... 1,726.2 1,915.2 2,105.3 2,280.5 2,282.8 1,142.2 1,231.3 8,688.3 9,424.8 10,620.5 12,418.1 12,478.1 6,051.4 6,430.1 Operating margin............................ 737.0 814.7 954.8 995.0 921.0 297.7 479.2 Other income(13).......................... 152.0 189.2 183.7 185.8 197.5 93.3 128.7 Interest and other financial charges ( 15)............................................. (96.9) (106.7) ( 126.9) (180.1) ( 168.9) (81.9) (79.7) Earnings before income taxes and minority interest 792.1 897.2 1,011.6 1,000.7 949.6 309.1 528.2 Provision for income taxes (14)..... (317.1) (364.1) (418.7) (382.4) (358.0) (100.5) (207.2) Minority interest in earnings of consolidated affiliates.................. _(3.2) _(3.1) _(7.8) (10.2) (10.8) _(4.6) _(4.8) Net earnings applicable to common stock 471.8 530.0 585.1 608.1 580.8 204.0 316.2 Dividends declared................... (249.7) (254.8) (272.9) (291.2) (293.1) (146.2) (147.6) Amount added to retained earnings 222.1 275.2 312.2 316.9 287.7 57.8 168.6 Retained earnings January 1 .......... 1,874.1 2,096.2 2,371.4 2,683.6 3,000.5 3,000.5 3,288.2 Retained earnings at end of period $2,096.2 $ 2,371.4 $ 2,683.6 $ 3,000.5 $ 3,288.2 $3,058.3 $3,456.8 Depreciation included in "operating costs" above....................... $ 273.6 $ 314.3 $ 334.0 $ 376.2 $ 418.6 $ 195.6 $ 195.1 Average number of shares outstanding (in thousands)(a)........ 181,684 182,112 182,051 182,120 183,258 182,885 184,509 Earnings per common share (in dollars) (a)(b)........................... $2.60 $2.91 $3.21 $3.34 $3.17 $1.12 $1.71 Dividends declared per common share (in dollars)........................ $1.38 $1.40 $1.50 $1.60 $1.60 $0.80 $0.80 Book value per share at December 31, 1975 and June 30, 1976......... - - - - $22.07 - $23.03 Numerical note references are to notes to General Electric financial statements. (a) Amounts representing number of shares and per share data have been adjusted for the two-for-one stock split in April 1971. (b) Any dilution of earnings per share which would result from the potential exercise or conversion of such items as stock options or convertible debt outstanding is insignificant (less than 2% in all periods shown). Fully diluted earnings per share for 1975 would be computed based on assumed conversion of the convertible indebtedness of General Electric Overseas Capital Corporation, a wholly owned affiliate of General Electric, exercise of stock options and issue of shares held under deferred incentive compensation plans. Net earnings for the computation would be adjusted to eliminate appropriate interest expense and expenses related to the deferred incentive compensation shares, net of taxes. On this basis, average shares outstanding in 1975 would have been 186,974,000, net earnings applicable to common stock would have been $583.9 million and fully diluted earnings per share would have been $3.12.