<PAGE>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                ----------------

                                    FORM 10-K

                            --------------------------


            |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999

                                       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 0-14804

                           ---------------------------

                     General Electric Capital Services, Inc.

             (Exact name of registrant as specified in its charter)

             Delaware                                       06-1109503
 (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                       Identification No.)

 260 Long Ridge Road,
 Stamford, Connecticut        06927                     (203) 357-4000
 (Address of principal     (Zip Code)          (Registrant's telephone number,
   executive offices)                               including area code)
                           --------------------------

                         SECURITIES REGISTERED PURSUANT

                          TO SECTION 12(b) OF THE ACT:

                                                          Name of each
     Title of each class                          exchange on which registered

 7 1/2% Guaranteed Subordinated                      New York Stock Exchange
  Notes Due August 21, 2035


                         SECURITIES REGISTERED PURSUANT

                          TO SECTION 12(g) OF THE ACT:

                               Title of each class

                    Common Stock, par value $1,000 per share

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 __

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

At March 17, 2000, 1,012 shares of voting common stock,  which constitute all of
the outstanding common equity, with a par value of $1,000 were outstanding.

Aggregate market value of the outstanding common equity held by nonaffiliates of
the registrant at March 17, 2000. None.

                       DOCUMENTS INCORPORATED BY REFERENCE

The consolidated  financial statements of General Electric Company, set forth in
the Annual  Report on Form 10-K of General  Electric  Company for the year ended
December 31, 1999 are incorporated by reference into Part IV hereof.

Item 1.  Business - Property and Casualty  Reserves for Unpaid  Claims and Claim
Expenses,  set forth in the  Annual  Report on Form 10-K of GE Global  Insurance
Holding  Corporation  for the year ended  December 31, 1999 is  incorporated  by
reference into Part I hereof.

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I(1)(a) AND (b)
OF FORM 10-K AND IS THEREFORE FILING THIS FORM 10-K WITH THE REDUCED  DISCLOSURE
FORMAT.


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                                TABLE OF CONTENTS

                                                                            Page

PART I

  Item 1.   Business .....................................................     1
  Item 2.   Properties ...................................................     9
  Item 3.   Legal Proceedings ............................................     9
  Item 4.   Submission of Matters to a Vote of Security Holders ..........     9

PART II

  Item 5.   Market for the Registrant's Common Equity and Related
               Stockholder Matters .......................................    10
  Item 6.   Selected Financial Data ......................................    10
  Item 7.   Management's Discussion and Analysis of Results of Operations .   10
  Item 7A.  Quantitative and Qualitative Disclosures About Market Risk ....   18
  Item 8.   Financial Statements and Supplementary Data ...................   19
  Item 9.   Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure .......................    41

PART III

  Item 10.  Directors and Executive Officers of the Registrant ...........    42
  Item 11.  Executive Compensation .......................................    42
  Item 12.  Security Ownership of Certain Beneficial Owners and Management    42
  Item 13.  Certain Relationships and Related Transactions ...............    42

PART IV

  Item 14.  Exhibits, Financial Statement Schedules, and Reports on
               Form 8-K ..................................................    43



<PAGE>


                                     PART I

Item 1.   Business.

GENERAL ELECTRIC CAPITAL SERVICES, INC.

General Electric Capital Services, Inc. (herein,  together with its consolidated
affiliates, called "GE Capital Services", "the Corporation" or "GECS" unless the
context  otherwise  requires) was incorporated in 1984 in the State of Delaware.
Until February 1993, the name of the Corporation was General Electric  Financial
Services,  Inc. All  outstanding  common  stock of GE Capital  Services is owned
directly or indirectly by General Electric Company,  a New York corporation ("GE
Company").  The  business of GE Capital  Services  consists of  ownership of two
principal  subsidiaries  which,  together with their  affiliates,  constitute GE
Company's  principal financial services  businesses.  GE Capital Services is the
sole owner of the common  stock of General  Electric  Capital  Corporation  ("GE
Capital"  or "GECC") and GE Global  Insurance  Holding  Corporation  ("GE Global
Insurance" or "GIH").

GE Capital Services'  principal  executive offices are located at 260 Long Ridge
Road, Stamford, Connecticut 06927 (Telephone number (203) 357-4000).

GENERAL ELECTRIC CAPITAL CORPORATION

GE  Capital  was  incorporated  in 1943  in the  State  of New  York  under  the
provisions  of the New York Banking Law  relating to  investment  companies,  as
successor to General Electric Contracts  Corporation,  which was formed in 1932.
The capital  stock of GE Capital was  contributed  to GE Capital  Services by GE
Company in June 1984.  Until  November  1987,  the name of the  corporation  was
General  Electric  Credit  Corporation.  The  business of GE Capital  originally
related principally to financing the distribution and sale of consumer and other
products of GE  Company.  Currently,  however,  the types and brands of products
financed and the services offered are significantly  more diversified.  Very few
of the products financed by GE Capital are manufactured by GE Company.

GE Capital  operates in five key operating  segments  that are described  below.
These  operations are subject to a variety of  regulations  in their  respective
jurisdictions. In addition, as discussed on page 12, GE Capital acquired control
of Montgomery Ward LLC ("Wards") on August 2, 1999.  Further  information  about
Wards is provided in the description of GE Capital's Other operating activities.

Services of GE Capital  are  offered  primarily  in the United  States,  Canada,
Europe and the Pacific  Basin.  GE  Capital's  principal  executive  offices are
located at 260 Long Ridge Road,  Stamford,  Connecticut  06927.  At December 31,
1999,  GE  Capital  and  affiliates  employed   approximately  125,600  persons,
including  approximately  30,000 employees  associated with the consolidation of
the retail operations of Montgomery Ward LLC.

GE GLOBAL INSURANCE HOLDING CORPORATION

GE Global  Insurance,  together with its affiliates,  writes  substantially  all
lines of reinsurance  and certain lines of property and casualty  insurance.  GE
Global  Insurance  has  three  principal  subsidiaries:   Employers  Reinsurance
Corporation,   GE   Reinsurance   Corporation   (formerly   Kemper   Reinsurance
Corporation) and Medical Protective Corporation. These affiliates, together with
their direct and indirect  subsidiaries,  reinsure  property and casualty  risks
written by more than 1,000  insurers  around the world.  They also write certain
specialty  lines of insurance on a direct  basis,  principally  excess  workers'
compensation for self-insurers,  medical malpractice coverage for physicians and
dentists, errors and omissions coverage for insurance agents and brokers, excess
indemnity for  self-insurers  of medical  benefits,  and libel and allied torts.
Other property and casualty  affiliates write excess and surplus lines insurance
and provide reinsurance brokerage services.  The life reinsurance affiliates are
engaged in the reinsurance of life insurance products, including term, whole and
universal life, annuities,  group long-term health products and the provision of
financial reinsurance to life insurers.

During  1999,  GE  Global  Insurance  acquired  a major  property  and  casualty
reinsurance business that strengthens its presence in the London broker-serviced
market.  Also in 1999,  Employers  Reinsurance  Corporation sold its reinsurance
brokerage subsidiary.

Insurance  and  reinsurance  operations  are  subject to  regulation  by various
insurance regulatory agencies.

GE Global  Insurance and its affiliates  conduct  business  throughout the world
using a network of local offices.  The world headquarters of GE Global Insurance
is located at 5200 Metcalf Avenue,  Overland Park, Kansas 66201. At December 31,
1999, GE Global Insurance and affiliates employed approximately 4,100 persons.

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Item 1.  Business - Property and Casualty  Reserves for Unpaid  Claims and Claim
Expenses,  set forth in the  Annual  Report on Form 10-K of GE Global  Insurance
Holding  Corporation  for the year ended December 31, 1999, is  incorporated  by
reference hereto.

OPERATING SEGMENTS

The  Corporation  provides a wide variety of financing,  asset  management,  and
insurance products and services which are organized into the following operating
segments:

  o          Consumer Services - private-label card loans,  personal loans, time
             sales and  revolving  credit  and  inventory  financing  for retail
             merchants,   auto  leasing  and   inventory   financing,   mortgage
             servicing,  retail  businesses  and consumer  savings and insurance
             services.

  o          Equipment  Management - leases,  loans,  sales and asset management
             services for portfolios of commercial and transportation equipment,
             including  aircraft,  trailers,  auto fleets,  modular space units,
             railroad rolling stock, data processing equipment,  containers used
             on ocean-going vessels, and satellites.

  o          Mid-Market  Financing - loans,  financing and operating leases, and
             other    services   for    middle-market    customers,    including
             manufacturers,   distributors  and  end-users,  for  a  variety  of
             equipment  that  includes  vehicles,   corporate   aircraft,   data
             processing  equipment,   medical  and  diagnostic  equipment,   and
             equipment used in construction, manufacturing, office applications,
             electronics and telecommunications activities.

  o          Specialized  Financing  - loans  and  financing  leases  for  major
             capital assets,  including industrial facilities and equipment, and
             energy-related  facilities;  commercial and residential real estate
             loans and  investments;  and loans to and investments in public and
             private entities in diverse industries.

  o          Specialty Insurance - U.S. and international multiple-line property
             and  casualty  reinsurance;   certain  directly  written  specialty
             insurance  and  life  reinsurance;  financial  guaranty  insurance,
             principally  on  municipal  bonds and  structured  finance  issues;
             private  mortgage   insurance;   and  creditor  insurance  covering
             international customer loan repayments.

Refer  to  Item  7,   "Management's   Discussion  and  Analysis  of  Results  of
Operations,"  in  this  Annual  Report  on  Form  10-K  for  discussion  of  the
Corporation's  Portfolio Quality.  A description of the Corporation's  principal
businesses by operating segment follows.

CONSUMER SERVICES

GE Financial Assurance

GE Financial  Assurance ("GEFA") provides consumers financial security solutions
by selling a wide variety of  insurance,  investment  and  retirement  products,
primarily  in the  United  States  and  Japan.  These  products  help  consumers
accumulate wealth,  transfer wealth, and protect their lifestyles and assets and
are sold through a family of regulated insurance and annuity companies.

GEFA's  principal  product lines are annuities  (deferred and immediate;  either
fixed or  variable),  life  insurance  (universal,  term,  ordinary  and group),
guaranteed  investment  contracts,   mutual  funds,  long-term  care  insurance,
supplemental  accident  and  health  insurance,  personal  lines  of  automobile
insurance  and  credit   insurance.   The  distribution  of  these  products  is
accomplished  through  four  distribution  methods:   intermediaries  (brokerage
general agents,  banks,  securities brokerage firms,  personal producing general
agents and specialized  brokers),  career or dedicated  sales forces,  marketing
through businesses and affinity groups and direct marketing.

GEFA's principal  operating companies include General Electric Capital Assurance
Company,  First Colony Life  Insurance  Company,  GE Life and Annuity  Assurance
Company  (formerly  The Life  Insurance  Company  of  Virginia),  Colonial  Penn
Insurance  Company,  Union  Fidelity  Life  Insurance  Company,  GE Edison  Life
Insurance Company and GE Capital Life Assurance of New York.

GEFA headquarters are in Richmond, Virginia.

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<PAGE>

Auto Financial Services

GE Capital  Auto  Financial  Services  ("AFS")  provides  financial  services to
automobile  dealers,   manufacturers,   financing  companies  and  the  consumer
customers of those entities in North America.

In the United States, AFS is a leading  independent  financier of leases for new
and used motor  vehicles  leased at retail  and  sub-prime  and prime  financing
products to consumers through a variety of distribution  channels.  In addition,
AFS  provides  private-label  programs  for  auto  manufacturers  and  inventory
financing programs and direct loans to auto dealers and finance companies.

AFS headquarters are in Barrington, Illinois.

Global Consumer Finance Auto Europe

GCF  Auto  Europe  ("GCF Auto  Europe") is  a  leading  independent  provider of
automobile  financing  products to  automobile  dealers and their  customers  in
Europe.  Products  include hire purchase  contracts,  finance leases,  operating
leases, loans, revolving credit facilities and insurance premium financing.

GCF Auto Europe has a significant  presence in the United Kingdom,  the Republic
of Ireland, Portugal, France, Spain, Italy, Sweden and Denmark.

The headquarters of GCF Auto Europe are in Dublin, Republic of Ireland.

GE Card Services

GE Card Services  ("CS")  provides  sales  financing  services to North American
retailers in a broad range of consumer  industries.  Details of financing  plans
differ, but include customized private-label credit card programs with retailers
and inventory financing programs with manufacturers, distributors and retailers.

CS provides  financing  directly to customers  of  retailers  or  purchases  the
retailers'  customer  receivables.  Most  of the  retailers  sell a  variety  of
products of various  manufacturers  on a time sales  basis.  The terms for these
financing plans differ  according to the size of contract and credit standing of
the  customer.  CS generally  maintains a security  interest in the  merchandise
financed.  Financing is provided to consumers  under  contractual  arrangements,
both  with and  without  recourse  to  retailers.  CS' wide  range of  financial
services  includes  application  processing,   sales  authorization,   statement
billings,  customer  services and  collection  services.  CS provides  inventory
financing  for retailers  primarily in the  appliance  and consumer  electronics
industries.  CS maintains a security interest in the inventory and retailers are
obliged to maintain insurance coverage for the merchandise financed.

CS also issues and services the GE Capital  Corporate  Card  product,  providing
payment and  information  systems  which help medium and  large-sized  companies
reduce  travel costs and the GE Capital  Purchasing  Card  product,  which helps
customers streamline their purchasing and accounts payable processes.

On June 30, 1999,  CS completed  its exit from the  consumer  bankcard  business
through the sale of  approximately  $3.4  billion in financing  receivables,  of
which  $2.2  billion  were  sold  in  December  1998.   These  were  principally
MasterCard(R)  and  Visa(R)  credit  loan  products  issued to retail  customers
throughout the United States.

On December 6, 1999, CS acquired J.C. Penney's ("JCP") private label credit card
accounts  receivable and their credit card services facilities for approximately
$3.2  billion.  In addition,  the  Corporation  entered into an initial  10-year
agreement with JCP to provide private label credit card services.

CS headquarters are in Stamford, Connecticut.

Global Consumer Finance

GE Capital  Global  Consumer  Finance  ("GCF") is a leading  provider  of credit
services to non-U.S.  retailers and consumers. GCF provides private-label credit
cards and proprietary  credit  services to retailers in Europe,  Asia, and, to a
lesser extent, South America as well as offering a variety of direct-to-consumer
credit programs such as consumer loans,  bankcards and credit  insurance.  GCF's
wide range of  proprietary  financial  services  includes  private-label  credit
cards,  credit  promotion and  accounting  services,  billing (in the retailer's
name) and customer credit and collection services.

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GCF provides  financing to consumers  through  operations in the United Kingdom,
Austria,  France, Republic of Ireland,  Germany, The Netherlands,  Italy, Spain,
Portugal, Poland,  Switzerland,  the Czech Republic, Japan, Thailand, Hong Kong,
China, Brazil and Australia and joint ventures in Indonesia, India and Brazil.

GCF headquarters are in Stamford, Connecticut.

Mortgage Services

GE Capital Mortgage Services,  Inc. ("GECMSI"),  a wholly-owned  affiliate of GE
Capital  Mortgage   Corporation,   is  engaged  primarily  in  the  business  of
originating,  purchasing,  selling  and  servicing  residential  mortgage  loans
collateralized by one-to-four-family homes located throughout the United States.
GECMSI obtains  servicing through the origination and purchase of mortgage loans
and  servicing  rights,  and  primarily  packages  the loans it  originates  and
purchases into  mortgage-backed  securities which it sells to investors.  GECMSI
also originates and services home equity loans.

GECMSI headquarters are in Cherry Hill, New Jersey.

EQUIPMENT MANAGEMENT

Aviation Services

GE Capital Aviation Services ("GECAS") is a global commercial aviation financial
services  business  that offers a broad range of financial  products to airlines
and  aircraft  operators,  owners,  lenders and  investors.  Financial  products
include  operating  leases,  sale/leasebacks,  aircraft  purchasing and trading,
financing leases,  engine/spare parts financing,  pilot training, fleet planning
and financial advisory services.

GECAS owns or manages a fleet of nearly 900 aircraft  world-wide  with more than
200  additional  planes on order or on option from Boeing and Airbus.  GECAS has
155 customers in 54 countries.

GECAS  headquarters  are in  Stamford,  Connecticut,  with  regional  offices in
Shannon,  Republic of Ireland; Miami, Florida; Vienna, Austria; Beijing and Hong
Kong, China and Singapore.

Fleet Services

GE Capital  Fleet  Services  ("GECFS")  is one of the  leading  corporate  fleet
management companies with operations in North America,  Europe,  Australia,  New
Zealand,  Brazil and Japan with  approximately  1 million  cars and trucks under
lease and service  management.  GECFS  offers  finance and  operating  leases to
several thousand  customers with an average lease term of 36 months. The primary
product in North  America is a Terminal  Rental  Adjustment  Clause (TRAC) lease
through  which the customer  assumes the residual  risk - that is, risk that the
book value will be greater  than market value at lease  termination.  In Europe,
the primary product is a closed-end  lease in which GECFS assumes residual risk.
In addition to the services  directly  associated  with the lease,  GECFS offers
value-added fleet management  services designed to reduce customers' total fleet
management costs. These services include,  among others,  maintenance management
programs, accident services, national account purchasing programs, fuel programs
and title and  licensing  services.  GECFS  customer  base is  diversified  with
respect to industry and geography and includes many Fortune 500 companies.

In 1999, GECFS completed several  acquisitions.  These included Japan Lease Auto
Corporation - a leading fleet  leasing  company in Japan,  a small fleet leasing
portfolio  from  Bank of  America  in the  United  States,  InTraffic  - a fleet
services provider in Sweden and McClean Leasing in Canada.

GECFS headquarters are in Eden Prairie, Minnesota.

Information Technology Solutions

GE  Capital  Information  Technology  Solutions  ("IT  Solutions")  is a leading
worldwide  provider  of a broad array of  information  technology  products  and
services,  including  full life  cycle  services  that  provide  customers  with
cost-effective  control and management of their  information  systems.  Products
offered include desktop personal computers, client server systems, UNIX systems,
local and wide area network  hardware,  and software.  Services  offered include
network design, network support, asset management, help desk, disaster recovery,
enterprise  management and financial  services.  IT Solutions serves commercial,
educational and governmental customers in over 20 countries.

IT Solutions headquarters are in Newport, Kentucky.

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Transport International Pool

Transport  International  Pool ("TIP") is one of the global  leaders in renting,
leasing,  selling and financing  transportation  equipment.  TIP's fleet of over
350,000 dry freight,  refrigerated and double vans, flatbeds, intermodal assets,
and  specialized  trailers is available for rent,  lease or purchase at over 250
locations in the United States,  Europe,  Canada,  and Mexico.  TIP's commercial
vehicle fleet of over 24,000 units is available for rent,  lease, or purchase in
the United  Kingdom.  TIP also  finances new and used  trailers and buys trailer
fleets.  TIP's customer base comprises trucking companies,  railroads,  shipping
lines, manufacturers and retailers.

TIP operates a European  service  center in  Amsterdam,  The  Netherlands  and a
commercial vehicle operations and administrative center in Manchester, England.

TIP headquarters are in Devon, Pennsylvania.

GE SeaCo/GE Capital Container Finance Corporation

In May  1998,  GE  Capital  and Sea  Containers  Ltd.  formed  GE SeaCo SRL ("GE
SeaCo"),  a joint venture which operates the combined marine container fleets of
Genstar Container Corporation ("Genstar") and Sea Containers. GE SeaCo is one of
the world's largest lessors of marine shipping  containers with a combined fleet
of  over  1,100,000  TEU  ("twenty  foot   equivalent   units")  of  dry  cargo,
refrigerated and specialized containers for global cargo transport.  Lessees are
primarily shipping lines that lease on a long term or master lease basis.

Concurrent with the formation of the joint venture, GE Capital Container Finance
Corporation  ("GECCF")  was  created  to  service  the  existing  finance  lease
portfolio formerly run by Genstar, and to provide traditional finance leases and
structured finance products to the global marine container industry.

GE SeaCo  headquarters are in Bridgetown,  Barbados.  GECCF  headquarters are in
Oakland, California.

Penske Truck Leasing

GE Capital is a limited partner in Penske Truck Leasing  ("Penske"),  which is a
leading provider of full-service truck leasing and commercial and consumer truck
rental in the United  States.  Penske  operates  through a  national  network of
full-service truck leasing and rental  facilities.  At December 31, 1999, Penske
had a fleet of about  98,000  tractors,  trucks and  trailers in its leasing and
rental  fleets and  provided  contract  maintenance  programs  or other  support
services for about 33,000 additional vehicles.

Penske also provides  dedicated  logistics  operations  support  which  combines
company-employed  drivers  with  its  full-service  lease  vehicles  to  provide
dedicated  contract carriage services.  In addition,  Penske offers supply chain
services such as distribution  consulting,  warehouse management and information
systems support.

Penske headquarters are in Reading, Pennsylvania.

GE American Communications

GE  American  Communications  ("GE  Americom")  is a leading  satellite  service
supplier to a diverse array of  customers,  including the broadcast and cable TV
industries,  broadcast radio, business information and integrated communications
services  for  government  and  commercial  customers.  GE Americom  operates 13
communications  satellites and maintains a supporting network of earth stations,
central terminal offices, and telemetry, tracking and control facilities.

GE Americom headquarters are in Princeton, New Jersey.

Railcar Services

GE Capital  Railcar  Services  ("GERSCO") is one of the leading  railcar leasing
companies  in North  America,  with a fleet of  190,000  railcars  in its  total
portfolio.  Serving  Class  1  railroads,  short-line  railroads,  and  shippers
throughout  North  America,  GERSCO offers one of the most diverse fleets in the
industry, and a variety of lease options.

GERSCO  also owns and  operates  a network of  railcar  repair  and  maintenance
facilities  located  throughout  North America.  The repair  facilities  offer a
variety of services,  ranging from light  maintenance to heavy repair of damaged
railcars. The company also provides railcar management, administration and other
services.

In  addition,  GERSCO is a  pan-European  provider of rail  transport  services,
offering  a broad  range of  railcar  equipment  and  rail-related  services  to
railroads, shippers and other transport providers.

                                       5
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European sales offices are in England, France, Germany, Italy and Sweden. GERSCO
headquarters are in Chicago, Illinois.

Modular Space

GE Capital  Modular  Space  ("GECMS")  provides  commercial  mobile and  modular
structures  for rental,  lease and sale from over 100  facilities  in the United
States,   Europe,   Canada  and  Mexico.  The  primary  markets  served  include
construction,  education, healthcare,  financial, commercial,  institutional and
government. GECMS products are available as custom mobile and modular buildings,
designed to customer  specifications,  or are available  through the GECMS stock
fleet of approximately 125,000 mobile and modular units.

GECMS has offices in North America and Europe.  GECMS world  headquarters are in
Malvern, Pennsylvania; its European headquarters are in Antwerp, Belgium.

MID-MARKET FINANCING

Commercial Equipment Financing

GE  Capital  Commercial  Equipment  Financing  ("CEF")  offers  a broad  line of
financial  products  including  leases  and  loans to  middle-market  customers,
including  manufacturers,  distributors,  dealers  and  end-users,  as  well  as
municipal financing.  Products are either held for CEF's own account or brokered
to third parties.

Generally,  transactions  range in size from $50 thousand to $50  million,  with
financing  terms from 36 to 180 months.  CEF also maintains an asset  management
operation that redeploys off-lease  equipment.  The portfolio includes loans and
leases for vehicles,  manufacturing equipment, corporate aircraft,  construction
equipment,  medical diagnostic equipment,  office equipment,  telecommunications
equipment and electronics.

CEF operates from offices  throughout  the United States,  Puerto Rico,  Canada,
Mexico,  Europe and Asia and through joint ventures in Indonesia and China.  CEF
headquarters are in Danbury, Connecticut.

In 1999, CEF, along with Vendor  Financial  Services,  purchased the leasing and
installment sales divisions of Japan Leasing Corporation.

Vendor Financial Services

GE Capital Vendor Financial Services ("VFS") provides financing services to over
100 equipment manufacturers and more than 3,500 dealers in North America, Europe
and  Asia  (including   Japan).   Customers  include  major  U.S.  and  non-U.S.
manufacturers  in a variety  of  industries  including  information  technology,
office  equipment,   healthcare,   telecommunications,   energy  and  industrial
equipment.  VFS  establishes  sales  financing in two ways - by forming  captive
partnerships  with  manufacturers  that do not  have  them,  and by  outsourcing
captives from  manufacturers  that do. VFS offers  industry-specific  knowledge,
leading  edge   technology,   leasing  and  equipment   expertise,   and  global
capabilities.  In addition, VFS provides an expanding array of related financial
services to customers including trade payables financing.

VFS has sales  offices  throughout  the  United  States,  Canada,  Europe,  Asia
(including Japan), and Australia. VFS headquarters are in Danbury, Connecticut.

European Equipment Finance

GE  Capital  European  Equipment  Finance  ("EEF")  is one of  Europe's  leading
diversified  equipment leasing  businesses,  offering  financial  solutions on a
single-country or pan-European basis. Customers include  manufacturers,  vendors
and  end-users  in  industries  such  as  office  imaging,  materials  handling,
corporate  aircraft,  information  technology,   broadcasting,   machine  tools,
telecommunications  and  transportation.  Products and services  include  loans,
leases,  off-balance  sheet  financing,  master  lease  coordination  and  other
services,  such as helping end-users increase purchasing power through financing
options and helping manufacturers and vendors offer leasing programs.

EEF  operates  from  offices  in the United  Kingdom,  Italy,  France,  Germany,
Belgium,   Republic  of  Ireland,   Portugal,  and  the  Nordic  countries.  EEF
headquarters are in Hounslow, England.

                                       6
<PAGE>

SPECIALIZED FINANCING

Real Estate

GE Capital  Real Estate  ("Real  Estate")  provides  funds for the  acquisition,
refinancing  and  renovation  of a wide  range  of  commercial  and  residential
properties  located  throughout the United States,  and, to a lesser extent,  in
Canada,  Mexico,  Europe,  and the Far East.  Real  Estate also  provides  asset
management  services  to real estate  investors  and  selected  services to real
estate owners.

Lending  is  a  major  portion  of  Real  Estate's   business  in  the  form  of
intermediate-term  senior or subordinated fixed and floating-rate  loans secured
by existing  income-producing  commercial  properties such as office  buildings,
rental apartments,  shopping centers,  industrial buildings,  mobile home parks,
hotels and  warehouses.  Loans  range in amount from  single-property  mortgages
typically  not less than $5  million  to  multi-property  portfolios  of several
hundred million dollars. Approximately 90% of all loans are senior mortgages.

Real Estate  purchases and provides  restructuring  financing for  portfolios of
real estate,  mortgage loans, limited  partnerships,  and tax-exempt bonds. Real
Estate's  business  also  includes the  origination  and  securitization  of low
leverage  real estate  loans,  which are  intended to be held less than one year
before outplacement. To a lesser degree, Real Estate provides equity capital for
real estate partnerships  through the holding of limited  partnership  interests
and receives preferred returns; typically such investments range from $2 million
to $10 million.

Real Estate also offers a variety of real estate management  services to outside
investors, institutions,  corporations, investment banks, and others through its
real  estate  services   subsidiaries.   Asset   management   services   include
acquisitions and dispositions,  strategic asset management, asset restructuring,
and debt and equity management.  Real Estate also provides  investment  products
and advisory and asset  management  services to pension fund clients  through GE
Capital Investment Advisors,  its registered investment advisor, as well as loan
administration  and servicing through GE Capital Asset Management.  In addition,
Real Estate  offers  owners of  multi-family  housing  ways to reduce  costs and
enhance value in properties by offering buying  services (e.g.,  for appliances,
roofing).

Real  Estate has offices  throughout  the United  States,  as well as in Canada,
Mexico,  Australia,  Japan, Sweden,  France and the United Kingdom.  Real Estate
headquarters are in Stamford, Connecticut.

Structured Finance Group

GE Capital  Structured  Finance  Group  ("SFG")  makes  equity  investments  and
provides  specialized  financial products and services to its client partners in
the commercial and industrial,  energy,  telecommunications,  and transportation
sectors, worldwide.

SFG  combines  industry  and  technical  expertise  with  significant  financial
capabilities  to deliver a full range of  sophisticated  financial  services and
products.  Services include project finance  (construction and term),  corporate
finance,  acquisition finance and arrangement and placement  services.  Products
include  a  variety  of debt  and  equity  instruments,  as  well as  structured
transactions,  including  leasing and  partnerships.  SFG manages an  investment
portfolio of approximately $11 billion.

SFG  headquarters  are in Stamford,  Connecticut and it has regional  offices in
Atlanta, Georgia;  Chicago,  Illinois; Hong Kong, China; Houston, Texas; London,
United Kingdom; Mexico City, Mexico; Sao Paulo, Brazil; and Toronto, Canada.

Commercial Finance

GE Capital Commercial Finance ("CF") is a leading provider of revolving and term
debt and equity to finance acquisitions,  business expansion, bank refinancings,
recapitalizations  and other  special  situations.  Products  also include asset
securitization  facilities,  capital  expenditure  lines and  bankruptcy-related
facilities.  Transactions  typically range in size from under $2 million to over
$200 million.

CF's  clients  are  owners,  managers  and  buyers of both  public  and  private
companies,  principally manufacturers,  distributors,  retailers and diversified
service providers,  and has industry  specialists in the healthcare,  retail and
communications  industries.  Through its  Merchant  Banking  Group,  CF provides
senior debt, subordinated debt and bridge financing to buyout and private equity
firms, and co-invests  equity with buying groups or invests directly on a select
basis.

                                       7
<PAGE>

CF has  lending  operations  in 25 cities,  including  international  offices in
Canada, Mexico, Thailand,  Australia,  The Netherlands,  and the United Kingdom,
and also has significant  factoring  operations in France,  Germany,  the United
Kingdom and Italy serving European companies and U.S. exporters. CF headquarters
are in Stamford, Connecticut.

GE Equity

GE  Equity  (formerly  Equity  Capital  Group)  purchases  equity   investments,
primarily convertible preferred and common stock investments including,  in some
cases,  stock warrants  convertible into equity  ownership.  GE Equity's primary
objective is long-term  capital  appreciation.  Investments  include the retail,
financial services, telecommunications, healthcare, food and beverage, cable and
broadcasting industries.

The portfolio is geographically  diversified with investments located throughout
the United States, as well as in Latin America, Europe and Asia.

GE Equity headquarters are in Stamford, Connecticut.

SPECIALTY INSURANCE

In addition to GE Global Insurance Holding  Corporation  (discussed above), GECS
principal specialty insurance businesses are as follows.

Financial Guaranty Insurance

FGIC Holdings  ("FGIC"),  through its subsidiary,  Financial  Guaranty Insurance
Company ("Financial Guaranty"),  is an insurer of municipal bonds, including new
issues,  bonds traded in the secondary  market and bonds held in unit investment
trusts and mutual funds.  Financial  Guaranty also  guarantees  certain  taxable
structured  debt.  The  guaranteed  principal,  after  reinsurance,  amounted to
approximately  $137.4  billion at December  31, 1999.  Approximately  85% of the
business written to date by Financial Guaranty is municipal bond insurance.

FGIC  subsidiaries  provide a variety of services to state and local governments
and agencies,  liquidity  facilities in  variable-rate  transactions,  municipal
investment products and other services.

FGIC headquarters are in New York, New York.

Mortgage Insurance

GE Capital Mortgage  Insurance is engaged  principally in providing  residential
mortgage  guaranty  insurance.  Operating  in 25  field  locations,  GE  Capital
Mortgage  Insurance  is licensed in 50 states,  the District of Columbia and the
Virgin  Islands.  At December 31, 1999,  GE Capital  Mortgage  Insurance was the
mortgage  insurance  carrier for over 1,460,000  residential  homes,  with total
insurance  in force  aggregating  approximately  $152  billion and total risk in
force  aggregating  approximately  $52  billion.  When a claim is  received,  GE
Capital  Mortgage  Insurance  proceeds  by  either  paying  up  to a  guaranteed
percentage  based  on  the  specified  coverage,  or  paying  the  mortgage  and
delinquent interest, taking title to the property and arranging for its sale. GE
Capital  Mortgage  Insurance also provides  mortgage  guaranty  insurance in the
United Kingdom, Canada, and Australia.

GE Capital Mortgage Insurance headquarters are in Raleigh, North Carolina.

GE Insurance Holdings

GE Insurance Holdings (formerly  Consolidated  Financial Insurance) is a leading
specialty insurer with operations in 13 European  countries and the Philippines.
GE Insurance Holdings is one of the leading payment  protection  insurers in the
United Kingdom and Europe.  Payment protection  insurance is designed to protect
customers' loan repayment  obligations in the event of unemployment,  disability
or death.  The product is sold alongside  most forms of consumer  credit through
banks, building societies and finance houses.

GE Insurance  Holdings also provides an extensive  range of personal  investment
products,  including pension and purchased life annuities, home income plans and
investment bonds through a network of over 6,000 independent  financial advisors
and a direct sales force, in the United Kingdom.

In addition,  GE Insurance  Holdings  sells pet insurance,  provides  travel and
personal accident insurance,  and offers the management of uninsured loss claims
on behalf of victims of traffic accidents.

GE Insurance Holdings headquarters are in London, England.

                                       8
<PAGE>


OTHER

Wards

All other consists primarily of  Montgomery Ward LLC ("Wards").

Wards  is one of the  largest  retail  merchandising  operations  in the  United
States.  Wards  offers a wide range of  branded  and  private-label  merchandise
including  apparel,  fine  jewelry,  furniture,  home  furnishings,  appliances,
electronics, and automotive services.

Wards operates 252 stores in 32 states,  encompassing  approximately  20 million
square feet of selling space. Wards is currently rolling out an aggressive store
remodeling program designed to enhance the shopping  experience and offer better
presentation  of its  merchandise.  Through 1999, 43 stores have been remodeled,
with an additional 75 to 80 stores to be completed during 2000 and 2001.

Wards is headquartered in Chicago, Illinois.

REGULATIONS AND COMPETITION

The  Corporation's  activities  are  subject to a variety  of federal  and state
regulations including, at the federal level, the Consumer Credit Protection Act,
the Equal Credit  Opportunity Act and certain  regulations issued by the Federal
Trade  Commission.  A majority of states have  ceilings on rates  chargeable  to
customers in retail time sales  transactions,  installment  loans and  revolving
credit  financing.  Common  carrier  services  of GE  Americom  are  subject  to
regulation by the Federal Communications  Commission.  Insurance and reinsurance
operations are subject to regulation by various state  insurance  commissions or
foreign regulatory authorities,  as applicable. The Corporation's  international
operations are subject to regulation in their respective jurisdictions. To date,
compliance with such  regulations  has not had a material  adverse effect on the
Corporation's financial position or results of operations.

The  businesses in which the  Corporation  engages are highly  competitive.  The
Corporation  is  subject  to   competition   from  various  types  of  financial
institutions, including banks, thrifts, investment banks, broker-dealers, credit
unions,  leasing  companies,   consumer  loan  companies,   independent  finance
companies,  finance  companies  associated  with  manufacturers,  insurance  and
reinsurance companies.

Item 2.    Properties.

GE Capital Services and its  subsidiaries  conduct their businesses from various
facilities, most of which are leased.

Item 3.    Legal Proceedings.

The Corporation is not involved in any material pending legal proceedings.

Item 4.  Submission of Matters to a Vote of Security Holders.

                                     Omitted

                                       9
<PAGE>


                                     PART II

Item 5.   Market for the Registrant's Common Equity and Related Stockholder
          Matters.

See note 13 to the consolidated  financial  statements.  The common stock of the
Corporation  is owned  entirely by GE Company and an affiliate  and,  therefore,
there is no trading market in such stock.

Item 6.   Selected Financial Data.

The following  selected  financial data should be read in  conjunction  with the
financial statements of GE Capital Services and consolidated  affiliates and the
related Notes to Consolidated Financial Statements.
<TABLE>
<CAPTION>
                                                                    Year ended December 31
                                            ----------------------------------------------------------------------
 (Dollars in millions)                            1999          1998           1997         1996          1995
                                            ------------------------------------------ ------------- -------------
<S>                                         <C>           <C>           <C>            <C>           <C>
Revenues .................................. $   55,749    $   48,694    $   39,931     $   32,713    $   26,492

 Net earnings ..............................      4,443         3,796         3,256          2,817         2,415

 Return on common equity (a) (b) ...........     23.74%        23.46%        22.59%         22.24%        21.98%
 GECS ratio of earnings to fixed charges ...      1.62          1.55          1.56           1.55          1.53
 GECC ratio of earnings to fixed charges ...      1.60          1.50          1.48           1.53          1.51
 GECC ratio of debt to equity ..............      8.44          7.86          7.45           7.84          7.59

 Financing receivables - net ............... $  137,629    $  121,566    $  103,799     $   99,714    $   93,272

 Total assets...............................    345,018       303,297       255,408        227,419       185,729

 Short-term borrowings .....................    129,259       113,162        95,274         77,945        62,808
 Long-term senior notes ....................     69,770        58,042        44,993         46,680        47,794
 Long-term subordinated notes ..............        996           996           996            996           996
 Minority interest .........................      4,391         3,459         3,113          2,530         2,522
 Equity ....................................     20,321        19,727        17,239         14,276        12,774

 Insurance premiums written for the year ...     13,624        11,865         9,396          8,185         6,158
</TABLE>

(a)     Equity excludes  unrealized gains and  losses on investment  securities,
        net of tax.
(b)     Return on common equity is calculated  using  earnings that are adjusted
        for preferred stock dividends and equity excludes preferred stock.

Item 7.   Management's Discussion and Analysis of Results of Operations.

Overview

The  Corporation's  net earnings were $4,443 million in 1999, up 17% from $3,796
million in 1998, with strong  double-digit  earnings growth in three of the five
operating  segments.  Net earnings in 1998 increased 17% from 1997. The earnings
improvement  throughout  the  three-year  period  resulted  from  asset  growth,
principally  from  acquisitions  of businesses and  portfolios,  and origination
volume.

Operating Results

Total Revenues increased 14% to $55.7 billion in 1999,  following a 22% increase
to  $48.7  billion  in  1998.   The  increases  in  both  years   reflected  the
contributions of businesses acquired as well as growth in origination volume.

Interest expense on borrowings in 1999 was $9.4 billion, up from $9.0 billion in
1998 and $7.6 billion in 1997. In both 1999 and 1998,  while average  borrowings
increased in order to finance asset growth, the associated higher interest costs
were partially mitigated by lower average interest rates. The composite interest
rate was 5.14% in 1999,  compared with 5.92% in 1998 and 6.07% in 1997. See page
14 for a discussion of interest rate risk management.

Operating  and  administrative  expenses were $16.3 billion in 1999, an increase
from $13.8 billion in 1998 and $11.4 billion in 1997.  The increase in both 1999
and 1998  primarily  reflected  costs  associated  with acquired  businesses and
portfolios, higher investment levels and increases in insurance commissions.

                                     10
<PAGE>

Insurance  losses and  policyholder  and  annuity  benefits  increased  to $11.0
billion in 1999,  compared  with $9.6  billion in 1998 and $8.3 billion in 1997,
reflecting  effects  of  business  acquisitions  and  growth in  premium  volume
throughout  the period.  In addition,  the  increase in 1999 was  reflected by a
higher loss ratio on reinsurance business discussed on page 12.

Cost of goods sold amounted to $8.0 billion in 1999,  compared with $6.8 billion
in 1998 and $4.1  billion in 1997,  and related to IT Solutions  and  Montgomery
Ward LLC ("Wards"). The increase in 1999 primarily reflects the consolidation of
Wards as discussed on page 12; the increase in 1998 is principally the result of
acquisition-related growth at IT Solutions.

Provision for losses on financing receivables increased to $1.7 billion in 1999,
compared  with $1.6 billion in 1998 and $1.4 billion in 1997.  These  provisions
principally related to private-label credit cards, bank credit cards, auto loans
and auto leases in the consumer services segment,  all of which are discussed on
page 17 under Portfolio Quality.  The provision throughout the three-year period
reflected higher average receivable  balances,  a different mix of business,  as
well as the  effects  of  lower  delinquency  rates,  consistent  with  industry
experience.

Depreciation  and  amortization  of buildings  and  equipment  and  equipment on
operating  leases  increased  21% to $3.2  billion in 1999,  compared  with $2.6
billion  in 1998,  a 6%  increase  over  1997.  The  increase  in both years was
primarily  the result of additions to equipment on operating  leases,  primarily
reflecting acquisitions of vehicles and aircraft.

Provision  for income taxes was $1.7 billion in 1999 (an  effective  tax rate of
27.1%),  compared with $1.4 billion in 1998 (an effective tax rate of 26.4%) and
$1.2 billion in 1997 (an effective tax rate of 26.4%).  The higher provision for
income taxes primarily reflected increased pre-tax earnings subject to statutory
rates.

Financing  spreads (the excess of yields over interest rates on borrowings) were
essentially flat in 1999, 1998 and 1997, reflecting slightly lower yields offset
by decreases in borrowing rates.

Operating Segments

At year-end  1998, the  Corporation  adopted  Statement of Financial  Accounting
Standards  ("SFAS") No. 131,  Disclosures  about  Segments of an Enterprise  and
Related  Information,  which requires  operating segment data to be measured and
analyzed on a basis that is consistent with how business activities are reported
internally  to  management.  Previously  reported  data  have been  restated  as
required  by SFAS  No.  131.  For  additional  information,  see  note 16 to the
consolidated financial statements.

Revenues and net earnings of the Corporation, by operating segment, for the past
three years are summarized and discussed below.

<TABLE>
<CAPTION>
(In millions)                                                          1999             1998            1997
                                                                  ---------------  --------------   --------------
<S>                                                                <C>              <C>             <C>
Revenues
Consumer Services ..............................................   $    17,061      $    15,948      $    13,550
Equipment Management ...........................................        15,317           14,869           11,326
Mid-Market Financing ...........................................         4,685            3,751            3,009
Specialized Financing ..........................................         4,603            3,368            2,828
Specialty Insurance ............................................        12,399           10,594            8,836
All other ......................................................         1,684              164              382
                                                                  ---------------  --------------   --------------
   Total revenues ..............................................   $    55,749      $    48,694      $    39,931
                                                                  ===============  ==============   ==============
Net earnings
Consumer Services ..............................................   $     1,074      $       797      $       544
Equipment Management ...........................................           695              806              708
Mid-Market Financing ...........................................           604              478              391
Specialized Financing ..........................................         1,244              745              593
Specialty Insurance ............................................         1,223            1,166              973
All other ......................................................          (397)            (196)              47
                                                                  ---------------  --------------   --------------
   Total net earnings ..........................................   $     4,443      $     3,796      $     3,256
                                                                  ===============  ==============   ==============
</TABLE>

                                       11
<PAGE>

Consumer Services revenues increased 7% in 1999 and 18% in 1998 and net earnings
increased  35% in 1999 and 47% in 1998.  The growth in revenues and net earnings
was led by Global Consumer Finance,  with strong returns on investments in Japan
and other  international  growth.  Additionally,  revenues and net earnings were
increased by higher premium and investment income at GE Financial Assurance, the
consumer  savings and  insurance  business,  partially  offset by the effects of
asset  reductions  in Card  Services  and  Auto  Financial  Services.  A  higher
provision  for  losses  on  financing  receivables  because  of  higher  average
receivables balances also affected earnings in 1998.

Equipment Management revenues grew 3% in 1999, following a 31% increase in 1998.
Growth in 1999 revenues was primarily the result of Japanese acquisitions in the
corporate  auto  fleet  management  operation,  as well as higher  revenue  from
commercial aircraft management  businesses at GECAS, largely offset by decreases
in sales  volume at the  remaining  equipment  management  businesses.  The 1998
increase reflected  acquisitions by IT Solutions and, to a lesser extent,  asset
growth. Net earnings decreased 14% in 1999, following a 14% increase in 1998. In
1999, as market conditions became more competitive,  pricing at IT Solutions and
utilization at the European equipment management businesses declined,  more than
offsetting growth in GECAS and the satellite service business, GE Americom.  Net
earnings increased in 1998 reflecting higher volume in most businesses from both
increased  origination as well as  acquisitions  of businesses  and  portfolios.
These  factors  were  partially  offset  in 1998 by  lower  pricing  and  higher
operating costs at IT Solutions and Modular Space.

Mid-Market  Financing  revenues  increased 25% in both 1999 and 1998,  while net
earnings grew 26% and 22%, respectively. Asset growth from both acquisitions and
originations  was the  most  significant  contributing  factor  in  both  years.
Revenues  and  net  earnings  were  also  favorably  affected  in  1998  by  the
disposition of certain assets.

Specialized  Financing  revenues rose 37% and 19%, while net earnings  increased
67%  and  26% in 1999  and  1998,  respectively.  Revenues  principally  reflect
increases  in  asset  gains  as  well as  origination  growth,  with GE  Equity,
Commercial  Finance and Real Estate  accounting  for most of the 1999  increase.
Revenue and net earnings growth in both years is principally the result of gains
on equity investments. Net earnings in 1998 also included the effects of certain
tax-advantaged transactions and higher tax credits.

Specialty   Insurance   revenues  increased  17%  and  20%  in  1999  and  1998,
respectively,  as premiums and  investment  income grew  throughout  the period.
Premiums  earned   increased  in  line  with  higher   origination   volume  and
acquisitions.  Investment income also grew,  partially reflecting an increase in
realized  investment  gains  in GE  Global  Insurance,  which  amounted  to $699
million, $432 million and $308 million in 1999, 1998 and 1997, respectively.

Increases in property and  casualty-related  losses in GE Global  Insurance were
directly  related to the  frequency and severity of large loss events during the
last three years.  Large loss events are individual  events that, after specific
reinsurance  recoveries  and  related  premium  adjustments,  affect  GE  Global
Insurance operations by $2 million or more, and include losses from earthquakes,
aviation or railroad  accidents,  fire damage, and  weather-related  damage from
hurricanes,  tornadoes,  wind and ice. Large loss events for GE Global Insurance
amounted to  approximately  $720 million,  $230 million and $70 million in 1999,
1998  and  1997,  respectively.  1999  losses  were  partially  recovered  under
aggregate  risk  coverage  obtained in the  ordinary  course of the  reinsurance
business.  Overall  losses for Specialty  Insurance  were mitigated by favorable
experience in the Mortgage Insurance business, particularly in 1999.

All Other GECS operating  activities  include the results of Wards subsequent to
August 2, 1999, when GECS acquired  control of the formerly  bankrupt  retailer.
Wards had sales of $1,622  million  and a net loss of $26 million for the period
during which it was  consolidated.  Revenues  and net earnings in 1997  included
asset  gains,  the  largest  of  which  was  $284  million  (net of tax)  from a
transaction  that  included the  reduction of the GECS  investment in the common
stock of Paine Webber Group Inc.

                                       12
<PAGE>

International Operations

The  Corporation's  international  operations  include  its  operations  located
outside  the  United  States  and  certain  of its  operations  that  cannot  be
meaningfully associated with specific geographic areas (for example,  commercial
aircraft and shipping containers used on ocean-going vessels). The Corporation's
international revenues were $21.7 billion in 1999, an increase of 19% from $18.2
billion in 1998.  Revenues in the Pacific Basin more than doubled in 1999.  Much
of the  increase  was  attributable  to growth in Japan,  the  result of several
strategic  acquisitions,  the  largest of which were the  purchase of assets and
infrastructure  of Japan  Leasing and the  acquisition  of a consumer  financing
business in Japan.  Revenues in Europe increased 7% in 1999, reflecting a mix of
acquisition and core growth across all GECS operating activities. Overall, these
increases reflect the continued expansion of GECS as a global provider of a wide
range of financial services.  International assets grew 13%, from $107.8 billion
at  year-end  1998 to $121.6  billion at the end of 1999.  The  increase in 1999
reflected strong growth in the Pacific Basin, where current economic  conditions
continue to provide a  favorable  environment  for  strategic  investments.  The
Corporation  had a  particularly  large  increase in Japan,  reflecting a mix of
acquisitions,   discussed   previously,   and  strong  core  asset  growth.  The
Corporation also had significant  asset growth at GECAS,  its aviation  services
business, which is classified as "other international."

The  Corporation's  activities  span all global regions and primarily  encompass
leasing of aircraft  and  providing  certain  financial  services  within  these
regional  economies.  As such,  when  certain  countries  or regions such as the
Pacific Basin and Latin America experience  currency and/or economic stress, the
Corporation  may have increased  exposure to certain risks but also may have new
profit  opportunities.  Potential  increased risks include,  among other things,
higher receivable  delinquencies and bad debts,  delays or cancellation of sales
and orders  principally  related to  aircraft-related  equipment,  higher  local
currency  financing  costs and a  slowdown  in  established  financial  services
activities.   New  profit  opportunities   include,  among  other  things,  more
opportunities  for lower  cost  outsourcing,  expansion  of  financial  services
activities  through purchases of companies or assets at reduced prices and lower
U.S. debt financing costs.

Capital Resources and Liquidity

Statement of Financial Position

Investment   securities  for  each  of  the  past  two  years  comprised  mainly
investment-grade  debt  securities  held  by  GE  Financial  Assurance  and  the
Corporation's   specialty   insurance  segment  in  support  of  obligations  to
policyholders  and  annuitants.  The  increase of $2.0  billion  during 1999 was
principally  related  to  investment  of  premiums  received  and  acquisitions,
partially  offset by decreases in the fair value of debt  securities  associated
with rising interest rates. A breakdown of the investment  securities  portfolio
is provided in note 2 to the consolidated financial statements.

Inventories  were $1,209 million and $744 million at December 31, 1999 and 1998,
respectively.  The increase in 1999 primarily reflected the consolidation of the
retail operations of Wards.

Financing receivables were $137.6 billion at year-end 1999, net of allowance for
doubtful  accounts,  up $16.1 billion over 1998. These receivables are discussed
on page 17 and in notes 3 and 4 to the consolidated financial statements.

Other  receivables were $30.7 billion and $26.0 billion at December 31, 1999 and
1998,  respectively.  Of the 1999  increase,  $3.6 billion was  attributable  to
acquisitions.

Equipment on operating  leases was $23.6  billion at December 31, 1999,  up $2.7
billion from 1998.  Details by category of investment  can be found in note 6 to
the  consolidated  financial  statements.  Additions  to  equipment on operating
leases,  including business  acquisitions,  were $13.4 billion during 1999 ($7.2
billion  during  1998),  primarily  reflecting  acquisitions  of  transportation
equipment.

Intangible  assets were $14.7 billion at year-end 1999, up from $13.6 billion at
year-end 1998. The $1.1 billion increase in intangible  assets related primarily
to goodwill from acquisitions, the largest of which were Signature Group and the
Australian consumer financial services business of AVCO.

Other assets totaled $44.7 billion at year-end 1999, compared with $35.5 billion
at the end of 1998.  The $9.2 billion  increase was  principally  attributed  to
increases  in "separate  accounts,"  (see note 9 to the  consolidated  financial
statements) and additional investments in associated companies, partially offset
by  decreases  in  assets   acquired  for  resale,   which   reflect  sales  and
securitizations in excess of originations.

                                       13
<PAGE>

Insurance  liabilities,  reserves  and annuity  benefits  were $86.8  billion at
year-end  1999,  $9.5 billion  higher than in 1998.  The increase was  primarily
attributable to increases in separate accounts, the addition of liabilities from
acquired companies and growth in guaranteed investment contracts. For additional
information  on these  liabilities,  see note 11 to the  consolidated  financial
statements.

Borrowings  were $200.0 billion at December 31, 1999, of which $129.2 billion is
due in 2000 and $70.8 billion is due in subsequent years.  Comparable amounts at
the end of 1998 were $172.2 billion in total, $113.2 billion due within one year
and $59.0 billion due thereafter. The Corporation's composite interest rates are
discussed on page 10. A large  portion of the  Corporation's  borrowings  ($96.6
billion and $87.0 billion at the end of 1999 and 1998,  respectively) was issued
in active commercial paper markets that management  believes will continue to be
a reliable source of short-term  financing.  Most of this  commercial  paper was
issued by GE  Capital.  The average  remaining  terms and  interest  rates of GE
Capital  commercial  paper  were 53 days and 5.82% at the end of 1999,  compared
with 45 days  and  5.35%  at the end of 1998.  The GE  Capital  ratio of debt to
equity was 8.44 to 1 at the end of 1999 and 7.86 to 1 at the end of 1998.

GE Company has  committed  to  contribute  capital to GE Capital in the event of
either a decrease below a specified level in the ratio of GE Capital's  earnings
to fixed charges, or a failure to maintain a specified  debt-to-equity  ratio in
the event certain GE Capital  preferred  stock is redeemed.  GE Company also has
guaranteed  the  Corporation's  subordinated  debt  with a face  amount  of $1.0
billion at December 31, 1999 and 1998.  Management  believes the likelihood that
GE Company will be required to contribute  capital under either the  commitments
or the guarantees is remote.

Statement of Cash Flows

The Corporation's  cash and cash equivalents  aggregated $6.9 billion at the end
of 1999,  up from $3.3 billion at year-end 1998 as  management  held  short-term
investments as additional liquidity over year-end 1999. One of the Corporation's
primary sources of cash is financing activities involving the continued rollover
of  short-term   borrowings  and  appropriate  addition  of  borrowings  with  a
reasonable  balance of maturities.  Over the past three years, the Corporation's
borrowings  with  maturities of 90 days or less have increased by $37.2 billion.
New  borrowings of $109.9  billion  having  maturities  longer than 90 days were
added during those years,  while $80.7  billion of such  longer-term  borrowings
were  retired.  The  Corporation  also  generated  $32.0  billion  of cash  from
operating activities during the last three years.

The Corporation's principal use of cash has been investing in assets to grow its
businesses.  Of the $91.0  billion that the  Corporation  invested over the past
three years,  $21.3  billion was used for  additions  to financing  receivables;
$26.6  billion  was used to invest in new  equipment,  principally  for lease to
others;  and $31.0  billion was used for  acquisitions  of new  businesses,  the
largest of which were Japan Leasing and the credit card  operations of JC Penney
in 1999.

With the  financial  flexibility  that  comes  with  excellent  credit  ratings,
management believes the Corporation should be well positioned to meet the global
needs of its customers for capital and to continue growing its diversified asset
base.

Interest Rate and Currency Risk Management

In normal  operations,  the  Corporation  must deal with  effects  of changes in
interest rates and currency exchange rates. The following discussion presents an
overview of how such changes are managed and a view of their potential effects.

The Corporation uses various financial  instruments,  particularly interest rate
and currency swaps, but also futures,  options and currency forwards,  to manage
risks.  The Corporation is exclusively an end-user of these  instruments,  which
are commonly referred to as derivatives.  The Corporation does not engage in any
trading,  market-making  or  other  speculative  activities  in  the  derivative
markets.  More detailed information  regarding these financial  instruments,  as
well as the  strategies  and policies for their use, is contained in notes 1, 10
and 20 to the consolidated financial statements.

The  Corporation  manages its exposure to changes in interest rates, in part, by
funding its assets with an  appropriate  mix of fixed and variable rate debt and
its exposure to currency  fluctuations  principally  by funding  local  currency
denominated  assets  with debt  denominated  in those same  currencies.  It uses
interest  rate swaps,  currency  swaps  (including  non-U.S.  currency and cross
currency  interest rate swaps) and currency  forwards to achieve lower borrowing
costs.  Substantially all of these derivatives have been designated as modifying
interest rates and/or currencies associated with specific debt instruments.

                                       14
<PAGE>

These financial  instruments allow the Corporation to lower its cost of funds by
substituting  credit  risk for  interest  rate and  currency  risks.  Since  the
Corporation's  principal use of such swaps is to optimize funding costs, changes
in interest rates and exchange rates  underlying  swaps would not be expected to
have a material  impact on the  Corporation's  financial  position or results of
operations.   The   Corporation   conducts  almost  all  activities  with  these
instruments in the over-the-counter markets.

The  Corporation  is exposed  to  prepayment  risk in  certain  of its  business
activities, such as in its mortgage servicing and annuities activities. In order
to hedge those exposures,  the Corporation uses swaps, futures, and option-based
financial  instruments.  These  instruments  generally  behave  based on  limits
("caps",  "floors" or "collars") on interest rate movement. These swaps, futures
and option-based  instruments are governed by the credit risk policies described
below and are transacted in either exchange-traded or over-the-counter markets.

In addition,  as part of its ongoing  customer  activities,  the Corporation may
enter into swaps that are integrated with investments in, loans to or guarantees
of the  obligations  of particular  customers  and do not involve  assumption of
third-party  credit risk beyond the risk previously  approved by the Corporation
with respect to such investments, loans or guarantees. Such integrated swaps are
evaluated and monitored like their associated investments,  loans or guarantees,
and are not therefore  subject to the same credit criteria that would apply to a
stand-alone swap. All other swaps,  forward contracts and other derivatives have
been designated as hedges of non-U.S. net investments or other assets.

Established  practices require that derivative  financial  instruments relate to
specific  asset,  liability  or equity  transactions  or to currency  exposures.
Substantially  all treasury actions are centrally  executed by the Corporation's
Treasury  Department,  which  maintains  controls on all  exposures,  adheres to
stringent  counterparty  credit  standards  and  actively  monitors  marketplace
exposures.

Given  the ways in which the  Corporation  uses  swaps,  purchased  options  and
forwards,  the principal risk is credit risk - risk that  counterparties will be
financially   unable  to  make  payments  in  accordance  with  the  agreements.
Associated  market risk is  meaningful  only as it relates to how changes in the
market value affect  credit  exposure to  individual  counterparties.  Except as
noted  above for  positions  that are  integrated  into  financings,  all swaps,
purchased  options and  forwards  are carried  out within the  following  credit
policy constraints.

o        Once a counterparty  reaches a credit exposure limit (see table below),
         no additional  transactions  are permitted until the exposure with that
         counterparty  is  reduced to an amount  that is within the  established
         limit. Open contracts remain in force.
<TABLE>
<CAPTION>
         Counterparty credit criteria                                                  Credit rating
                                                                               -------------------------------
                                                                                                 Standard &
                                                                                  Moody's          Poor's

                                                                               --------------   --------------
         <S>                                                                   <C>              <C>
         Term of transaction

           Between one and five years ......................................        Aa3              AA-
           Greater than five years .........................................        Aaa              AAA
         Credit exposure limits

           Up to $50 million ...............................................        Aa3              AA-
           Up to $75 million ...............................................        Aaa              AAA
</TABLE>

o        All swaps are executed under master swap agreements  containing  mutual
         credit  downgrade  provisions  that  provide  the  ability  to  require
         assignment or termination in the event either party is downgraded below
         A3 or A-.

More credit latitude is permitted for  transactions  having original  maturities
shorter than one year because of their lower risk.

The  conversion of interest rate and currency risk into credit risk results in a
need to monitor  counterparty  credit risk  actively.  At December 31, 1999, the
notional amount of long-term  derivatives for which the  counterparty  was rated
below  Aa3/AA- was $5.0  billion.  These amounts are primarily the result of (1)
counterparty downgrades,  (2) transactions executed prior to the adoption of the
Corporation's  current  counterparty  credit  standards,  and  (3)  transactions
relating to acquired assets or businesses.

                                       15
<PAGE>

Following is an analysis of credit risk exposures for the last three years.
<TABLE>
<CAPTION>

                    Percentage of Notional Derivative Exposure by Counterparty Credit Rating

------------------------------------------------------------------------------------------------------------------
 Moody's/Standard & Poor's                                              1999            1998            1997
 -------------------------
                                                                 ---------------- ---------------  --------------
<S>                                                                        <C>             <C>             <C>
 Aaa/AAA ........................................................          59%             65%             75%
 Aa/AA ..........................................................          38%             33%             20%
 A/A and below ..................................................           3%              2%              5%
</TABLE>

The optimal funding strategy is sometimes achieved by using multiple swaps. For
example, to  obtain fixed  rate  U.S. dollar  funding,  several alternatives are
generally  available.  One alternative is a swap of non-U.S.  dollar denominated
fixed rate debt into U.S.  dollars.  The synthetic U.S. dollar  denominated debt
would be effectively  created by taking the following  steps:  (1) issuing fixed
rate, non-U.S.  currency  denominated debt, (2) entering into a swap under which
fixed rate non-U.S.  currency denominated interest will be received and floating
rate non-U.S.  currency denominated interest will be paid, and (3) entering into
a swap under which floating rate non-U.S.  currency  principal and interest will
be received and fixed rate U.S. dollar  denominated  principal and interest will
be paid. The end result is, in every important  respect,  fixed rate U.S. dollar
denominated financing with an element of controlled credit risk. The Corporation
uses multiple swaps only as part of such transactions.

The  interplay  of  the  Corporation's  credit  risk  policy  with  its  funding
activities is seen in the following example, in which the Corporation is assumed
to have been offered three  alternatives  for funding  five-year fixed rate U.S.
dollar assets with five-year fixed rate U.S. dollar debt.
<TABLE>
<CAPTION>
                                                                            Spread over U.S.
                                                                              Treasuries in
                                                                              basis points          Counterparty
                                                                            ------------------  ------------------
<S>                                                                           <C>                   <C>
1.       Fixed rate five-year medium-term note ...........................         +65                  -
2.       U.S. dollar commercial paper swapped into five-year U.S. dollar
           fixed rate funding ............................................         +40                  A
3.       Swiss franc fixed rate debt swapped into five-year U.S. dollar
           fixed rate funding ............................................         +35                  B
</TABLE>


Counterparty A is a major  brokerage house with an Aaa/AAA rated swap subsidiary
and a current  exposure to the Corporation of $39 million.  Counterparty B is an
Aa2/AA rated insurance company with a current exposure of $50 million.

In this  hypothetical  case, the  Corporation  would have chosen  alternative 2.
Alternative 1 is unacceptably costly.  Although alternative 3 would have yielded
a lower  immediate cost of funds,  the additional  credit risk of Counterparty B
would have exceeded the Corporation's risk management limits.

The U.S. Securities and Exchange  Commission requires that registrants  disclose
information  about  potential  effects of changes in interest rates and currency
exchange. Although the rules offer alternatives for presenting this information,
none of the  alternatives is without  limitations.  The following  discussion is
based on  so-called  "shock-tests,"  which model  effects of  interest  rate and
currency shifts on the reporting  company.  Shock tests, while probably the most
meaningful analysis permitted, are constrained by several factors, including the
necessity to conduct the  analysis  based on a single point in time and by their
inability to include the complex market reactions that normally would arise from
the market  shifts  modeled.  While the  following  results  of shock  tests for
interest  rates and  currencies  may have some limited use as  benchmarks,  they
should not be viewed as forecasts.

o    One  means  of   assessing   exposure  to  interest   rate   changes  is  a
     duration-based  analysis that  measures the potential  loss in net earnings
     resulting  from a  hypothetical  increase  in  interest  rates of 100 basis
     points across all maturities (sometimes referred to as a "parallel shift in
     the yield  curve").  Under  this  model,  it is  estimated  that,  all else
     constant,  such an increase,  including repricing effects in the securities
     portfolio,  would reduce the 2000 net earnings of the Corporation  based on
     year-end 1999 positions by approximately $105 million.  Based on conditions
     at year-end  1998,  the effect on 1999 net  earnings of such an increase in
     interest rates was estimated to be approximately $111 million.

                                       16
<PAGE>

o    One means of assessing exposure to changes in currency exchange rates is to
     model effects on reported earnings using a sensitivity  analysis.  Year-end
     1999  consolidated  currency  exposures,  including  financial  instruments
     designated and effective as hedges,  were analyzed to identify  Corporation
     assets and liabilities  denominated in other than their relevant functional
     currency.  Net unhedged  exposures in each  currency  were then  remeasured
     assuming   a   10%   decrease    (substantially   greater   decreases   for
     hyperinflationary  currencies) in currency exchange rates compared with the
     U.S.  dollar.  Under this model,  it is estimated  that, all else constant,
     such a decrease would reduce the 2000 net earnings of the Corporation based
     on year-end 1999 positions by an insignificant amount.

Portfolio Quality

Financing  receivables are the largest GECS asset and one of its primary sources
of revenues.  The  portfolio  of financing  receivables,  before  allowance  for
losses,  increased to $141.4  billion at the end of 1999 from $124.9  billion at
the end of 1998,  principally  reflecting  acquisition  growth  and  origination
volume  that  were  partially  offset  by  securitizations  and  other  sales of
receivables.  The related  allowance  for losses at the end of 1999  amounted to
$3.8 billion ($3.3 billion at the end of 1998),  representing  management's best
estimate of probable losses inherent in the portfolio.

A discussion  of the quality of certain  elements of the  financing  receivables
portfolio 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.

Consumer  financing  receivables,  primarily  credit card and personal loans and
auto loans and leases,  were $52.3 billion at year-end 1999, an increase of $0.7
billion from year-end 1998. The credit card and personal  receivables  increased
$5.2  billion,   primarily  from  acquisition  growth  and  origination  volume,
partially offset by sales and securitizations.  Auto receivables  decreased $4.5
billion  primarily  as a result of reduced  volume.  Nonearning  receivables  at
year-end  1999  were  $0.9  billion,  about  1.8% of  total  consumer  financing
receivables compared with $1.3 billion, about 2.4% of total consumer receivables
at year-end 1998.  Write-offs of consumer  receivables  declined to $1.2 billion
from $1.4 billion at year-end 1998 reflecting improved delinquency trends.

Other  financing  receivables,  totaling  $89.1  billion at December  31,  1999,
consisted  of a diverse  commercial,  industrial  and  equipment  loan and lease
portfolio.  This portfolio  increased $15.8 billion during 1999,  reflecting the
combination  of acquisition  growth and increased  origination  volume.  Related
nonearning and  reduced-earning  receivables were $0.9 billion at year-end 1999,
compared with $0.4 billion at year-end 1998.

GECS loans and leases to  commercial  airlines  amounted to $11.8 billion at the
end of 1999, up from $10.2 billion at the end of 1998. GECS commercial  aircraft
positions also included financial  guarantees,  funding commitments and aircraft
orders as discussed in note 6 to the consolidated financial statements.

Statement of Changes in Share Owners' Equity

Share owners' equity increased $594 million to $20,321 million at year-end 1999.
The  increase  was largely  attributable  to net  earnings  during the period of
$4,443  million,  partially  offset by  dividends  and other  transactions  with
shareowners of $1,474 million.

Investment  securities  had  unrealized  losses of $2,206  million  during 1999,
principally as a result of decreases in fair value  attributable to increases in
interest rates during 1999. A significant  majority of the unrealized losses are
associated  with debt  securities  held by insurance  businesses and are matched
with insurance liabilities of similar duration.  Accordingly,  decreases in fair
values of such investment  securities are directionally  offset by corresponding
decreases in fair values of associated insurance liabilities.  However,  changes
in the fair values of  insurance  liabilities  are  difficult to measure and are
appropriately not recognized under generally accepted accounting principles.

Currency translation adjustments reduced equity by $169 million in 1999. Changes
in the  currency  translation  adjustment  reflect  the  effects  of  changes in
currency  exchange  rates  on  the  Corporation's  net  investment  in  non-U.S.
subsidiaries  that have functional  currencies other than the U.S.  dollar.  The
decrease during 1999 largely reflected the weakening in the European currencies,
partially offset by strengthening in Asian currencies.  Such adjustments  affect
earnings only when all or a portion of an affiliate is disposed.

                                       17
<PAGE>

New Accounting Standards

Two changes in accounting standards may affect future financial statements.  The
Financial  Accounting Standards Board ("FASB") has issued Statement of Financial
Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and
Hedging  Activities,  effective  for the  Corporation  on January 1, 2001.  Upon
adoption,  all derivative  instruments (including certain derivative instruments
embedded in other contracts) will be recognized in balance sheets at fair value,
and  changes in such fair  values  must be  recognized  immediately  in earnings
unless specific  hedging  criteria are met. Changes in the values of derivatives
meeting these hedging  criteria will ultimately  offset related earnings effects
of the  hedged  items;  effects  of  qualifying  changes in fair value are to be
recorded  in  equity  pending  recognition  in  earnings.   Certain  significant
refinements  and  interpretations  of SFAS No. 133 are being  deliberated by the
FASB, and the effects on accounting for the Corporation's  financial instruments
will depend to some degree on the results of such deliberations.  Management has
not  determined  the total  probable  effects  on its  financial  statements  of
adopting  SFAS No. 133,  and does not believe  that an estimate of such  effects
would be meaningful at this time.

The FASB has also proposed new accounting for business  combinations that, among
other things,  would change the accounting for and display of goodwill and other
intangibles recorded in business  acquisitions for transactions after January 1,
2001. An important aspect of the proposal is that goodwill amortization would be
displayed  as a  separate  element  in the  Statement  of  Earnings.  Management
believes  that this  proposal  represents  a useful  approach  to  understanding
financial  performance,  but believes that the utility of this information would
be materially enhanced if the proposed approach for goodwill were applied to all
intangible assets acquired with a business.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.

Information  about  potential  effects of changes in interest rates and currency
exchange on the Corporation is discussed on pages 14-17.

                                       18
<PAGE>


Item 8.   Financial Statements and Supplementary Data.

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
General Electric Capital Services, Inc.:

We have  audited  the  consolidated  financial  statements  of General  Electric
Capital  Services,  Inc. and  consolidated  affiliates  as listed in Item 14. In
connection with our audits of the  consolidated  financial  statements,  we also
have  audited the  financial  statement  schedules  as listed in Item 14.  These
consolidated  financial  statements  and financial  statement  schedules are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these consolidated  financial  statements and financial  statement
schedules based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of General Electric
Capital  Services,  Inc. and  consolidated  affiliates  at December 31, 1999 and
1998,  and the results of their  operations and their cash flows for each of the
years in the  three-year  period ended  December 31, 1999,  in  conformity  with
generally  accepted  accounting  principles.  Also in our  opinion,  the related
financial  statement  schedules,  when  considered  in  relation  to  the  basic
consolidated  financial  statements  taken as a whole,  present  fairly,  in all
material respects, the information set forth therein.

/s/ KPMG LLP



Stamford, Connecticut

February 4, 2000



                                       19
<PAGE>
<TABLE>
<CAPTION>
       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                              Statement of Earnings

 For the years ended December 31 (In millions)                             1999             1998             1997
                                                                       --------------   --------------   --------------
<S>                                                                     <C>              <C>              <C>
 REVENUES
 Time sales, loan and other income .................................    $    18,209      $    14,682      $    12,211
 Operating lease rentals ...........................................          6,022            5,402            4,819
 Financing leases ..................................................          3,587            4,267            3,499
 Investment income .................................................          6,243            5,617            5,512
 Premium and commission income of insurance affiliates (Note 11) ...         12,948           11,352            9,268
 Sales of goods ....................................................          8,740            7,374            4,622
                                                                       --------------   --------------   --------------
    Total revenues .................................................         55,749           48,694           39,931
                                                                       --------------   --------------   --------------
 EXPENSES
 Interest ..........................................................          9,359            8,966            7,649
 Operating and administrative (Note 14) ............................         16,253           13,810           11,433
 Insurance losses and policyholder and annuity benefits (Note 11) ..         11,028            9,608            8,278
 Cost of goods sold ................................................          7,976            6,777            4,147
 Provision for losses on financing receivables (Note 4) ............          1,678            1,609            1,421
 Depreciation and amortization of buildings and equipment and
   equipment on operating leases (Notes 6 & 7) .....................          3,173            2,616            2,460
 Minority interest in net earnings of consolidated affiliates ......            186              148              121
                                                                       --------------   --------------   --------------
    Total expenses .................................................         49,653           43,534           35,509
                                                                       --------------   --------------   --------------
 Earnings before income taxes ......................................          6,096            5,160            4,422
 Provision for income taxes (Note 15) ..............................         (1,653)          (1,364)          (1,166)
                                                                       --------------   --------------   --------------
 NET EARNINGS ......................................................    $     4,443      $     3,796      $     3,256
                                                                       ==============   ==============   ==============
</TABLE>
<TABLE>
<CAPTION>
                  Statement of Changes in Share Owners' Equity

 (In millions)                                                             1999             1998             1997
                                                                       --------------   --------------   --------------
 CHANGES IN SHARE OWNERS' EQUITY
<S>                                                                     <C>              <C>              <C>
 Balance at January 1 ..............................................    $    19,727      $    17,239      $    14,276
                                                                       --------------   --------------   --------------
 Dividends and other transactions with share owners (Note 13) ......         (1,474)          (1,519)          (1,648)
                                                                       --------------   --------------   --------------
 Changes other than transactions with share owners:
   Increases attributable to net earnings ..........................          4,443            3,796            3,256
   Unrealized (losses) gains on investment securities - net (Note 13)        (2,206)             241            1,467
   Currency translation adjustments (Note 13) ......................           (169)             (30)            (112)
                                                                       --------------   --------------   --------------
    Total changes other than transactions with share owners ........          2,068            4,007            4,611
                                                                       --------------   --------------   --------------
 Balance at December 31 ............................................    $    20,321      $    19,727      $    17,239
                                                                       ==============   ==============   ==============
</TABLE>





See Notes to Consolidated Financial Statements.

                                       20
<PAGE>

<TABLE>
<CAPTION>
       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                         Statement of Financial Position

 At December 31 (In millions)                                                              1999             1998
                                                                                       --------------   --------------
 ASSETS
<S>                                                                                    <C>               <C>
 Cash and equivalents ..............................................................   $      6,931      $     3,342
 Investment securities (Note 2) ....................................................         80,485           78,458
 Financing receivables (Note 3):
   Time sales and loans, net of deferred income ....................................         93,625           77,283
   Investment in financing leases, net of deferred income ..........................         47,783           47,571
                                                                                       --------------   --------------
                                                                                            141,408          124,854
   Allowance for losses on financing receivables (Note 4) ..........................         (3,779)          (3,288)
                                                                                       --------------   --------------
      Financing receivables - net ..................................................        137,629          121,566
 Other receivables (Note 5) ........................................................         30,681           25,973
 Inventories .......................................................................          1,209              744
 Equipment on operating leases (at cost), less accumulated amortization of $7,392 and
   $7,021 (Note 6) .................................................................         23,605           20,941
 Buildings and equipment (at cost), less accumulated depreciation of $2,127 and
   $1,733 (Note 7) .................................................................          5,036            3,095
 Intangible assets - net (Note 8) ..................................................         14,748           13,639
 Other assets (Note 9) .............................................................         44,694           35,539
                                                                                       --------------   --------------
    Total assets ...................................................................   $    345,018     $    303,297
                                                                                       ==============   ==============
 LIABILITIES AND SHARE OWNERS' EQUITY
 Short-term borrowings (Note 10) ...................................................   $    129,259     $    113,162
 Long-term borrowings (Note 10) ....................................................         70,766           59,038
                                                                                       --------------   --------------
    Total borrowings ...............................................................        200,025          172,200
 Accounts payable ..................................................................          9,749            8,815
 Insurance liabilities, reserves and annuity benefits (Note 11) ....................         86,776           77,259
 Other liabilities .................................................................         14,801           12,247
 Deferred income taxes (Note 15) ...................................................          8,955            9,590
                                                                                       --------------   --------------
    Total liabilities ..............................................................        320,306          280,111
                                                                                       --------------   --------------
 Minority interest in equity of consolidated affiliates (Note 12) ..................          4,391            3,459
                                                                                       --------------   --------------
 Cumulative preferred stock, $10,000 par value (80,000 shares authorized; 51,000
   shares issued and held primarily by  consolidated  affiliates at December 31,
   1999 and 1998) ..................................................................             10               10
 Common stock, $1,000  (1,260  and 1,010 shares  authorized at December 31, 1999
   and 1998,  respectively, 1,012  and 1,010 shares  outstanding at December 31,
   1999 amd 1998, respectively) ....................................................              1                1
 Additional paid-in capital ........................................................          2,672            2,480
 Retained earnings .................................................................         17,852           15,075
 Accumulated unrealized gains on investment securities - net (a) ...................            170            2,376
 Accumulated foreign currency translation adjustments (a) ..........................           (384)            (215)
                                                                                       --------------   --------------
    Total share owners' equity (Note 13) ...........................................         20,321           19,727
                                                                                       --------------   --------------
    Total liabilities and share owners' equity .....................................   $    345,018     $    303,297
                                                                                       ==============   ==============
</TABLE>

(a)  The sum of  accumulated  unrealized  gains  on  investment  securities  and
     accumulated   foreign   currency   translation    adjustments   constitutes
     "Accumulated  nonowner  changes other than  earnings," as shown in note 13,
     and was ($214)  million  and  $2,161  million  at  year-end  1999 and 1998,
     respectively.

See Notes to Consolidated Financial Statements.

                                       21
<PAGE>
<TABLE>
<CAPTION>

       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                             Statement of Cash Flows

 For the years ended December 31 (In millions)                            1999             1998             1997
                                                                      --------------   --------------   --------------
 CASH FLOWS FROM OPERATING ACTIVITIES

<S>                                                                   <C>              <C>               <C>
 Net earnings ....................................................    $      4,443     $      3,796      $     3,256
 Adjustments to reconcile net earnings to cash provided from operating
   activities:
 Depreciation and amortization of buildings and equipment and
    equipment on operating leases.................................           3,173            2,616            2,460
 Provision for losses on financing receivables ...................           1,678            1,609            1,421
 Amortization of goodwill and other intangibles ..................           1,199              952              780
 Increase in deferred income taxes ...............................             847              549              798
 Decrease (increase) in inventories ..............................             327               81             (244)
 Increase (decrease) in accounts payable .........................             699            1,673              (64)
 Increase in insurance liabilities and reserves ..................           4,584            3,670            1,669
 Other - net .....................................................          (2,131)          (3,991)          (3,851)
                                                                      --------------   --------------   --------------
 Cash from operating activities ..................................          14,819           10,955            6,225
                                                                      --------------   --------------   --------------
 CASH FLOWS FROM INVESTING ACTIVITIES
 Net increase in financing receivables (Note 19) .................         (13,088)          (6,301)          (1,898)
 Buildings and equipment and equipment on operating leases
    - additions ..................................................         (13,466)          (6,935)          (6,197)
    - dispositions ...............................................           6,262            4,037            2,212
 Payments for principal businesses purchased, net of cash acquired
    (Note 19) ....................................................         (10,060)         (17,155)          (3,820)
 All other investing activities (Note 19) ........................          (7,823)         (11,078)          (5,646)
                                                                      --------------   --------------   --------------
 Cash used for investing activities ..............................         (38,175)         (37,432)         (15,349)
                                                                      --------------   --------------   --------------
 CASH FLOWS FROM FINANCING ACTIVITIES
 Net change in borrowings (maturities of 90 days or less) ........           7,308           16,288           13,594
 Newly issued debt (maturities longer than 90 days) (Note 19) ....          47,605           41,440           20,825
 Repayments and other reductions (maturities longer than 90 days)
    (Note 19) ....................................................         (26,924)         (31,027)         (22,757)
 Dividends paid ..................................................          (1,666)          (1,672)          (1,653)
 All other financing activities (Note 19) ........................             622             (114)             785
                                                                      --------------   --------------   --------------
 Cash from financing activities ..................................          26,945           24,915           10,794
                                                                      --------------   --------------   --------------
 INCREASE (DECREASE) IN CASH AND EQUIVALENTS DURING THE YEAR .....           3,589           (1,562)           1,670
 CASH AND EQUIVALENTS AT BEGINNING OF YEAR .......................           3,342            4,904            3,234
                                                                      --------------   --------------   --------------
 CASH AND EQUIVALENTS AT END OF YEAR .............................    $       6,931    $      3,342     $      4,904
                                                                      ==============   ==============   ==============
</TABLE>



See Notes to Consolidated Financial Statements.

                                       22
<PAGE>


       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                   Notes to Consolidated Financial Statements

NOTE 1.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation - General Electric Capital Services,  Inc. ("the Parent") owns all
of the common stock of General Electric  Capital  Corporation ("GE Capital") and
GE Global Insurance Holding Corporation ("GE Global Insurance"). All outstanding
common stock of the Parent is owned by General  Electric  Company ("GE Company")
and an affiliate of GE Company. The consolidated  financial statements represent
the adding together of the Parent and all of its  majority-owned  and controlled
affiliates  ("consolidated  affiliates"),  including  GE  Capital  and GE Global
Insurance (collectively called "the Corporation").

All significant  transactions among the Corporation and consolidated  affiliates
have been eliminated.  Other associated companies,  generally companies that are
20% to 50% owned and over which the  Corporation,  directly or  indirectly,  has
significant  influence,   are  included  in  other  assets  and  valued  at  the
appropriate share of equity plus loans and advances.  Certain prior-year amounts
have been reclassified to conform to the current year presentation.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  reported  amounts and related  disclosures.  Actual results could differ
from those estimates.

Methods of Recording  Revenues  from  Services  (Earned  Income) - Income on all
loans is  recognized  on the  interest  method.  Accrual of  interest  income is
suspended at the earlier of the time at which  collection of an account  becomes
doubtful or the account becomes 90 days delinquent.  Interest income on impaired
loans is recognized  either as cash is collected or on a cost recovery  basis as
conditions warrant.

Financing  lease  income is recorded on the  interest  method so as to produce a
level yield on funds not yet recovered.  Estimated  unguaranteed residual values
of leased assets are based primarily on periodic  independent  appraisals of the
values of leased assets remaining at expiration of the lease terms.

Operating lease income is recognized on a straight-line  basis over the terms of
the underlying leases.

Origination,  commitment  and other  nonrefundable  fees related to fundings are
deferred and recorded in earned income on the interest  method.  Commitment fees
related to loans not expected to be funded and line-of-credit  fees are deferred
and recorded in earned income on a straight-line  basis over the period to which
the fees  relate.  Syndication  fees are  recorded in earned  income at the time
related services are performed unless significant contingencies exist.

Income from  investment and insurance  activities is discussed  under  insurance
accounting policies.

Sales of Goods - A sale is recorded when title passes to the customer.

Cash and Equivalents - Certificates  and other time deposits are treated as cash
equivalents.

Recognition of Losses on Financing  Receivables  and Investments - The allowance
for losses on small-balance  receivables reflects  management's best estimate of
probable losses inherent in the portfolio determined principally on the basis of
historical experiences. For other receivables,  principally the larger loans and
leases,  the  allowance  for  losses  is  determined  primarily  on the basis of
management's best estimate of probable losses, including specific allowances for
known troubled accounts.

All accounts or portions  thereof  deemed to be  uncollectible  or to require an
excessive  collection  cost  are  written  off  to  the  allowance  for  losses.
Small-balance accounts generally are written off when 6 to 12 months delinquent,
although  any such  balance  judged to be  uncollectible,  such as an account in
bankruptcy,   is  written  down  immediately  to  estimated   realizable  value.
Large-balance accounts are reviewed at least quarterly,  and those accounts with
amounts  that are  judged to be  uncollectible  are  written  down to  estimated
realizable value.

When  collateral is  repossessed  in  satisfaction  of a loan, the receivable is
written down  against the  allowance  for losses to estimated  fair value of the
asset less costs to sell,  transferred to other assets and subsequently  carried
at the lower of cost or estimated fair value less costs to sell. This accounting
method has been employed principally for specialized financing transactions.

                                       23
<PAGE>

Investment Securities - Investments in debt and marketable equity securities are
reported at fair value based  primarily  on quoted  market  prices or, if quoted
prices are not  available,  discounted  expected  cash flows using  market rates
commensurate  with credit quality and maturity of investment.  Substantially all
investment  securities  are  designated as available for sale,  with  unrealized
gains  and  losses  included  in  equity,  net of  applicable  taxes  and  other
adjustments.  Unrealized  losses that are other than temporary are recognized in
earnings.   Realized  gains  and  losses  are  accounted  for  on  the  specific
identification method.

Inventories  - The  Corporation's  inventories  consist  primarily  of  finished
products  held for  sale.  All  inventories  are  stated at the lower of cost or
realizable values. Cost is primarily determined on a first-in, first-out basis.

Equipment  on  Operating  Leases -  Equipment  is  amortized,  principally  on a
straight-line basis, to estimated residual value over the lease term or over the
estimated economic life of the equipment.

Buildings and Equipment - Depreciation is recorded on either a  sum-of-the-years
digits formula or a straight-line basis over the lives of the assets.

Intangible  Assets - Goodwill is amortized over its estimated  period of benefit
on a straight-line  basis;  other intangible assets are amortized on appropriate
bases over their  estimated  lives.  No  amortization  period  exceeds 40 years.
Goodwill in excess of associated  expected operating cash flows is considered to
be impaired  and is written  down to fair value,  which is  determined  based on
either discounted future cash flows or appraised values, depending on the nature
of the assets.

Interest  Rate and  Currency  Risk  Management  - As a  matter  of  policy,  the
Corporation does not engage in derivatives trading, derivatives market-making or
other speculative  activities.  The Corporation uses swaps primarily to optimize
funding  costs.  To a lesser degree,  and in combination  with options and limit
contracts,   the   Corporation   uses  swaps  to   stabilize   cash  flows  from
mortgage-related assets.

Interest rate and currency  swaps that modify  borrowings or designated  assets,
including  swaps  associated  with forecasted  commercial  paper  renewals,  are
accounted for on an accrual basis. The Corporation  requires all other swaps, as
well as futures,  options and currency forwards,  to be designated and accounted
for as  hedges  of  specific  assets,  liabilities  or  committed  transactions;
resulting payments and receipts are recognized contemporaneously with effects of
hedged  transactions.  A payment or receipt arising from early termination of an
effective  hedge is accounted  for as an  adjustment  to the basis of the hedged
transaction.

Instruments  used as hedges must be effective  at reducing  the risk  associated
with  the  exposure  being  hedged  and  must be  designated  as a hedge  at the
inception  of the  contract.  Accordingly,  changes  in  market  values of hedge
instruments  must  be  highly  correlated  with  changes  in  market  values  of
underlying  hedged items both at inception of the hedge and over the life of the
hedge  contract.  As a matter of  policy,  any  derivative  that is  either  not
designated as a hedge,  or is so  designated  but is  ineffective,  is marked to
market and recognized in operations immediately.

Insurance Accounting Policies - Accounting policies for insurance businesses are
as follows.

Premium income. Insurance premiums are reported as earned income as follows:

o    For short-duration  insurance  contracts  (including property and casualty,
     accident  and health,  and  financial  guaranty  insurance),  premiums  are
     reported as earned income, generally on a pro rata basis, over the terms of
     the related agreements.  For retrospectively  rated reinsurance  contracts,
     premium  adjustments  are  recorded  based  on  estimated  losses  and loss
     expenses, taking into consideration both case and incurred-but-not-reported
     reserves.

o    For traditional long-duration insurance contracts (including term and whole
     life  contracts  and  annuities  payable  for the  life of the  annuitant),
     premiums are reported as earned income when due.

o    For investment  contracts and universal life contracts,  premiums  received
     are reported as liabilities,  not as revenues. Universal life contracts are
     long-duration  insurance  contracts  with  terms  that  are not  fixed  and
     guaranteed;  for these  contracts,  revenues are recognized for assessments
     against  the  policyholder's  account,   mostly  for  mortality,   contract
     initiation,   administration  and  surrender.   Investment   contracts  are
     contracts that have neither significant mortality nor significant morbidity
     risk,  including  annuities  payable  for a  determined  period;  for these
     contracts,  revenues  are  recognized  on the  associated  investments  and
     amounts credited to policyholder accounts are charged to expense.

                                       24
<PAGE>

Deferred  policy  acquisition  costs.  Costs  that vary  with and are  primarily
related to the acquisition of new and renewal insurance and investment contracts
are deferred and amortized over the respective policy terms. For  short-duration
contracts,  acquisition  costs  consist  primarily  of  commissions,   brokerage
expenses and premium taxes. For long-duration  insurance contracts,  these costs
consist  primarily of  first-year  commissions  in excess of  recurring  renewal
commissions,  certain  variable sales expenses and certain support costs such as
underwriting and policy issue expenses.

o    For  short-duration  insurance  contracts,  these  costs are  amortized pro
     rata over the contract periods in which the related premiums are earned.

o    For  traditional   long-duration  insurance  contracts,   these  costs  are
     amortized  over the  respective  contract  periods in  proportion to either
     anticipated  premium income or, in the case of  limited-payment  contracts,
     estimated benefit payments.

o    For investment  contracts  and universal life  contracts,  these  costs are
     amortized on the basis of anticipated gross profits.

Periodically, deferred policy acquisition costs are reviewed for recoverability;
anticipated investment income is considered in recoverability evaluations.

Present value of future  profits.  The actuarially  determined  present value of
anticipated net cash flows to be realized from insurance, annuity and investment
contracts in force at the date of acquisition  of life insurance  enterprises is
recorded  as the  present  value of future  profits  and is  amortized  over the
respective  policy  terms in a manner  similar to  deferred  policy  acquisition
costs.  Unamortized  balances are adjusted to reflect experience and impairment,
if any.

NOTE 2.        INVESTMENT SECURITIES

A summary of investment securities follows:
<TABLE>
<CAPTION>

                                                                        Gross           Gross
                                                     Amortized       unrealized      unrealized        Estimated
 (In millions)                                         cost             gains          losses         fair value
                                                   --------------   --------------  --------------   --------------
 December 31, 1999 Debt securities:
<S>                                                <C>              <C>             <C>              <C>
  U.S. corporate ...............................   $     31,512     $        175    $     (1,759)    $     29,928
  State and municipal ..........................         12,558              141            (452)          12,247
  Mortgage-backed ..............................         12,799              173            (376)          12,596
  Corporate - non-U.S. .........................          9,923              228            (248)           9,903
  Government - non-U.S. ........................          4,675              114             (77)           4,712
  U.S. government and federal agency ...........          2,481                5            (171)           2,315
 Equity securities .............................          6,420            2,641            (277)           8,784
                                                   --------------   --------------  --------------   --------------
                                                   $     80,368     $      3,477    $     (3,360)    $     80,485
                                                   ==============   ==============  ==============   ==============
 December 31, 1998 Debt securities:
  U.S. corporate ...............................   $     27,888     $      1,293    $       (325)    $     28,856
  State and municipal ..........................         12,483              727              (8)          13,202
  Mortgage-backed ..............................         11,641              413            (109)          11,945
  Corporate - non-U.S. .........................          8,692              409             (90)           9,011
  Government - non-U.S. ........................          5,415              258              (9)           5,664
  U.S. government and federal agency ...........          2,706              207              (7)           2,906
 Equity securities .............................          5,651            1,415            (192)           6,874
                                                   --------------   --------------  --------------   --------------
                                                   $     74,476     $      4,722    $       (740)    $     78,458
                                                   ==============   ==============  ==============   ==============
</TABLE>

The  majority  of  mortgage-backed  securities  shown  in the  table  above  are
collateralized by U.S. residential mortgages.

                                       25
<PAGE>

At December 31, 1999,  contractual  maturities  of debt  securities,  other than
mortgage-backed securities, were as follows:
<TABLE>
<CAPTION>
                                                                                     Amortized          Estimated
(In millions)                                                                           cost           fair value
                                                                                  ----------------   ----------------
 Due in:
<S>                                                                                    <C>                <C>
  2000 ........................................................................        $ 5,237            $ 5,309
  2001-2004 ...................................................................         13,348             13,310
  2005-2009 ...................................................................         14,478             13,953
  2010 and later ..............................................................         28,086             26,533
</TABLE>

It is expected that actual  maturities will differ from  contractual  maturities
because borrowers have the right to call or prepay certain obligations. Proceeds
from  sales of  investment  securities  in 1999 were  $18,500  million  ($16,659
million in 1998 and $14,728  million in 1997).  Gross realized gains were $1,406
million  in 1999  ($1,126  million in 1998 and  $1,018  million in 1997).  Gross
realized losses were $484 million in 1999 ($303 million in 1998 and $173 million
in 1997).

NOTE 3.        FINANCING RECEIVABLES

Financing receivables at December 31, 1999 and 1998 are shown below.

<TABLE>
<CAPTION>
 (In millions)                                                                         1999             1998
                                                                                  --------------   --------------
 Time sales and loans:
<S>                                                                               <C>             <C>
  Consumer Services ...........................................................   $     48,435    $      42,573
  Specialized Financing .......................................................         24,999           16,693
  Mid-Market Financing ........................................................         19,186           17,065
  Equipment Management ........................................................            977              849
  Specialty Insurance .........................................................             28              103
                                                                                  --------------   --------------
    Time sales and loans - net of deferred income .............................         93,625           77,283
                                                                                  --------------   --------------
 Investment in financing leases:
  Direct financing leases .....................................................         43,738           43,730
  Leveraged leases ............................................................          4,045            3,841
                                                                                  --------------   --------------
    Investment in financing leases ............................................         47,783           47,571
                                                                                  --------------   --------------
                                                                                       141,408          124,854
 Less allowance for losses (Note 4) ...........................................         (3,779)          (3,288)
                                                                                  --------------   --------------
                                                                                   $   137,629      $   121,566
                                                                                  ==============   ==============
</TABLE>

Time sales and loans  represents  transactions in a variety of forms,  including
time  sales,  revolving  charge  and  credit,   mortgages,   installment  loans,
intermediate-term  loans and  revolving  loans secured by business  assets.  The
portfolio includes time sales and loans carried at the principal amount on which
finance  charges are billed  periodically,  and time sales and loans  carried at
gross book value,  which includes  finance  charges.  At year-end 1999 and 1998,
financing   receivables   included   $15,782   million  and   $14,452   million,
respectively,  for  commercial  real estate  loans and  leases.  Note 6 contains
information on commercial airline loans and leases.

Investment in financing leases consists of direct financing and leveraged leases
of aircraft, railroad rolling stock, autos, other transportation equipment, data
processing  equipment  and medical  equipment,  as well as other  manufacturing,
power  generation,   commercial  real  estate,  and  commercial   equipment  and
facilities.

As the sole  owner of assets  under  direct  financing  leases and as the equity
participant  in  leveraged  leases,  the  Corporation  is taxed  on total  lease
payments  received and is entitled to tax deductions based on the cost of leased
assets and tax  deductions for interest paid to  third-party  participants.  The
Corporation generally is entitled to any residual value of leased assets.

                                       26
<PAGE>

Investment  in direct  financing  and  leveraged  leases  represents  net unpaid
rentals and estimated  unguaranteed  residual values of leased  equipment,  less
related deferred income. The Corporation has no general obligation for principal
and   interest  on  notes  and  other   instruments   representing   third-party
participation related to leveraged leases; such notes and other instruments have
not been  included  in  liabilities  but have been  offset  against  the related
rentals  receivable.  The Corporation's share of rentals receivable on leveraged
leases is subordinate to the share of other  participants who also have security
interests in the leased equipment.

The  Corporation's  net investment in financing  leases at December 31, 1999 and
1998 is shown below.
<TABLE>
<CAPTION>

                                        Total financing leases    Direct financing leases       Leveraged leases

                                       ---------------------------------------------------- -------------------------
 (In millions)                             1999         1998         1999         1998         1999         1998
                                        ------------ ------------ ------------  -----------  -----------  -----------
<S>                                     <C>          <C>          <C>           <C>          <C>          <C>
 Total minimum lease payments
   receivable .......................   $   68,158   $   66,528   $   47,069    $   47,451   $   21,089   $   19,077
 Less principal and interest on
   third-party nonrecourse debt .....      (17,184)     (15,176)           -             -      (17,184)     (15,176)
                                        ------------ ------------ ------------  -----------  -----------  -----------
   Net rentals receivable ...........       50,974       51,352       47,069        47,451        3,905        3,901
 Estimated unguaranteed residual value
   of leased assets .................        7,157        6,826        4,945         5,011        2,212        1,815
 Less deferred income ...............      (10,348)     (10,607)      (8,276)       (8,732)      (2,072)      (1,875)
                                        ------------ ------------ ------------  -----------  -----------  -----------
   Investment in financing leases ...       47,783       47,571       43,738        43,730        4,045        3,841
 Less: Allowance for losses .........         (581)        (619)        (509)         (519)         (72)        (100)
       Deferred taxes arising from
           financing leases .........       (8,593)      (8,593)      (5,087)       (5,147)      (3,506)      (3,446)
                                        ------------ ------------ ------------  -----------  -----------  -----------
 Net investment in financing leases .   $   38,609   $   38,359   $   38,142    $   38,064   $      467   $      295
                                        ============ ============ ============  ===========  ===========  ===========
</TABLE>

Contractual Maturities

At December 31, 1999 the Corporation's contractual maturities for time sales and
loans and net rentals receivable were:
<TABLE>
<CAPTION>

                                                                               Total time
(In millions)                                                                   sales and        Net rentals
                                                                                loans (a)       receivable (a)
                                                                             ----------------   ---------------
 Due in:
<S>                                                                                 <C>                <C>
  2000 ..................................................................           $25,878            $14,901
  2001...................................................................            18,489             11,625
  2002 ..................................................................            17,649              7,567
  2003 ..................................................................             7,466              4,613
  2004 ..................................................................             5,972              2,906
  Thereafter ............................................................            18,171              9,362
                                                                             ----------------   ---------------
                                                                                    $93,625            $50,974
                                                                             ================   ===============
</TABLE>

(a) Experience has shown that a substantial  portion of receivables will be paid
    prior to contractual  maturity,  and these amounts should not be regarded as
    forecasts of future cash flows.

Nonearning consumer receivables were $930 million and $1,250 million at December
31,  1999  and  1998,   respectively,   a  substantial   amount  of  which  were
private-label  credit card loans.  Nonearning  and  reduced-earning  receivables
other than consumer  receivables  were $932 million and $354 million at year-end
1999 and 1998, respectively.

"Impaired"  loans are defined by generally  accepted  accounting  principles  as
loans for which it is  probable  that the lender  will be unable to collect  all
amounts due according to original contractual terms of the loan agreement.  That
definition   excludes,   among  other   things,   leases  or  large   groups  of
smaller-balance  homogenous  loans,  and therefore  applies  principally  to the
Corporation's commercial loans.

                                       27
<PAGE>

An analysis of impaired loans at December 31, 1999 and 1998 is shown below.
<TABLE>
<CAPTION>
 (In millions)                                                                        1999              1998
                                                                                  --------------    --------------
<S>                                                                               <C>               <C>
 Loans requiring allowance for losses .........................................   $         631     $         346
 Loans expected to be fully recoverable .......................................             219               158
                                                                                  --------------    --------------
                                                                                  $         850     $         504
                                                                                  ==============    ==============
 Allowance for losses .........................................................   $         179     $         109
 Average investment during year ...............................................             610               512
 Interest income earned while impaired (a) ....................................              27                39
</TABLE>

 (a) Principally on the cash basis.

NOTE 4.        ALLOWANCE FOR LOSSES ON FINANCING RECEIVABLES

<TABLE>
<CAPTION>
 (In millions)                                                        1999             1998             1997
                                                                  ---------------  --------------   --------------
<S>                                                               <C>              <C>              <C>
 Balance at January 1 .........................................   $       3,288    $       2,802    $       2,693
 Provisions charged to operations .............................           1,678            1,609            1,421
 Net transfers primarily related to acquisitions and sales ....             270              388              127
 Amounts written off - net ....................................          (1,457)          (1,511)          (1,439)
                                                                  ---------------  --------------   --------------
 Balance at December 31 .......................................   $       3,779     $      3,288    $       2,802
                                                                  ===============  ==============   ==============
</TABLE>

NOTE 5.        OTHER RECEIVABLES

At year-end 1999 and 1998,  this account  included  reinsurance  recoverables of
$8,138  million and $6,124 million and  insurance-related  receivables of $7,417
million and $7,109 million, respectively.  Premium receivables, policy loans and
funds on deposit with reinsurers are included in insurance-related  receivables.
Also in other  receivables are trade  receivables,  accrued  investment  income,
operating lease receivables and a variety of sundry items.

NOTE 6.        EQUIPMENT ON OPERATING LEASES

Equipment on operating leases by type of equipment and accumulated  amortization
at December 31, 1999 and 1998 are shown below.

<TABLE>
<CAPTION>
 (In millions)                                                                         1999             1998
                                                                                   ---------------  ---------------
 Original cost
<S>                                                                                <C>              <C>
   Vehicles ...................................................................... $      10,942    $       9,825
   Aircraft ......................................................................        10,591            9,321
   Railroad rolling stock ........................................................         3,323            2,804
   Marine shipping containers ....................................................         2,309            2,565
   Other .........................................................................         3,832            3,447
                                                                                   ---------------  ---------------
                                                                                          30,997           27,962
 Accumulated amortization ........................................................        (7,392)          (7,021)
                                                                                   ---------------  ---------------
                                                                                   $      23,605    $      20,941
                                                                                   ===============  ===============
</TABLE>

Amortization of equipment on operating leases was $2,673 million, $2,185 million
and $2,102 million in 1999, 1998 and 1997,  respectively.  Noncancelable  future
rentals due from  customers for  equipment on operating  leases at year-end 1999
totaled $16,058 million and are due as follows:  $4,177 million in 2000;  $3,177
million in 2001;  $2,332 million in 2002; $1,624 million in 2003; $1,086 million
in 2004 and $3,662 million thereafter.

The Corporation acts as a lender and lessor to the commercial  airline industry.
At December 31, 1999 and 1998,  the balance of such loans,  leases and equipment
leased to others was  $11,772  million  and $10,170  million,  respectively.  In
addition,  at December 31, 1999, the Corporation had issued financial guarantees
and funding  commitments  of $59 million ($74 million at year-end  1998) and had
placed  multiyear orders for various Boeing and Airbus aircraft with list prices
of approximately $9.9 billion ($9.4 billion at year-end 1998).

                                       28
<PAGE>

NOTE 7.        BUILDINGS AND EQUIPMENT

Buildings and  equipment  include  office  buildings,  satellite  communications
equipment, data processing equipment,  vehicles, furniture and office equipment.
Depreciation  expense was $500  million in 1999,  $431  million in 1998 and $358
million in 1997.

NOTE 8.        INTANGIBLE ASSETS

Intangible assets at December 31, 1999 and 1998 are shown in the table below.

<TABLE>
<CAPTION>
(In millions)                                                                            1999             1998
                                                                                    --------------   --------------
<S>                                                                                 <C>              <C>
 Goodwill .......................................................................   $      12,301    $      11,469
 Present value of future profits ("PVFP") .......................................           1,812            1,618
 Other intangibles ..............................................................             635              552
                                                                                    --------------   --------------
                                                                                    $      14,748    $      13,639
                                                                                    ==============   ==============
</TABLE>

The Corporation's intangible assets are shown net of accumulated amortization of
$4,233 million at December 31, 1999, and $3,396 million at December 31, 1998.

PVFP  amortization,  which is on an  accelerated  basis and net of interest,  is
projected to range from 15% to 7% of the year-end 1999  unamortized  balance for
each of the next five years.

NOTE 9.        OTHER ASSETS

Other assets at December 31, 1999 and 1998 are shown in the table below.

<TABLE>
<CAPTION>
(In millions)                                                                            1999             1998
                                                                                    --------------   --------------
Investments:
<S>                                                                                 <C>              <C>
 Assets acquired for resale .....................................................   $       3,406    $       6,167
 Investments in and advances to associated companies ............................          11,298            7,670
 Real estate ventures ...........................................................           4,397            3,131
 Other ..........................................................................           4,424            3,473
                                                                                    --------------   --------------
                                                                                           23,525           20,441
 Separate accounts ..............................................................          10,335            6,563
 Servicing assets (a) ...........................................................           1,707            1,625
 Deferred insurance acquisition costs ...........................................           4,682            3,326
 Other ..........................................................................           4,445            3,584
                                                                                    --------------   --------------
                                                                                    $      44,694    $      35,539
                                                                                    ==============   ==============
</TABLE>

(a)  associated  primarily  with serviced  residential mortgage  loans amounting
     to $86 billion and $91 billion at December 31, 1999 and 1998, respectively.

Separate  accounts  represent  investments  controlled by policyholders  and are
associated with identical amounts reported as insurance liabilities in note 11.

                                       29
<PAGE>


NOTE 10.       BORROWINGS

Total  short-term  borrowings  at December  31, 1999 and 1998  consisted  of the
following:

<TABLE>
<CAPTION>
                                                               1999                             1998
                                                  -------------------------------- --------------------------------
                                                  ---------------  --------------- ---------------  ---------------
                                                                      Average                          Average
  (Dollars in millions)                               Amount          rate (a)         Amount          rate (a)
                                                  ---------------  --------------- ---------------  ---------------
<S>                                               <C>                   <C>        <C>                   <C>
 Commercial paper - U.S. ........................ $      84,702         6.07%      $      83,044         5.38%
 Commercial paper - non-U.S. ....................        11,909         4.19               3,953         4.80
 Current portion of long-term debt ..............        22,902         5.59              14,645         5.66
 Other ..........................................         9,746                           11,520
                                                  ---------------                  ---------------

                                                   $    129,259                     $    113,162
                                                  ===============                  ===============
</TABLE>


Total long-term borrowings at December 31, 1999 and 1998 were as follows:

<TABLE>
<CAPTION>
                                                       1999
                                                     average
 (Dollars in millions)                               rate (a)        Maturities         1999             1998
                                                  ---------------  --------------- ---------------  ---------------
<S>                                                    <C>           <C>           <C>              <C>
 Senior notes ...................................      5.50%         2001-2055     $      69,770    $      58,042
 Subordinated notes (b) .........................      7.88          2006-2035               996              996
                                                                                   ---------------  ---------------
                                                                                   $      70,766    $      59,038
                                                                                   ===============  ===============
</TABLE>

(a)  Based on year-end balances and local currency interest rates, including the
     effects of interest rate and currency  swaps, if any,  directly  associated
     with the original debt issuance.

(b)      Guaranteed by GE Company.

Borrowings  of the  Corporation  are  addressed  below from two  perspectives  -
liquidity and interest rate management.  Additional information about borrowings
and  associated  swaps  can be  found in note 20 to the  consolidated  financial
statements.

Liquidity requirements of the Corporation are principally met through the credit
markets.  Maturities  of  long-term  borrowings  during  the  next  five  years,
including  the current  portion of long-term  debt,  at December 31, 1999,  were
$22,902  million  in 2000;  $15,948  million in 2001;  $12,763  million in 2002;
$10,153 million in 2003 and $7,922 million in 2004.

At December 31, 1999, the Corporation held committed lines of credit aggregating
$32.5  billion  with 118 banks,  including  $12.0  billion of  revolving  credit
agreements  pursuant  to which it has the  right to  borrow  funds  for  periods
exceeding  one year.  A total of $7.7  billion of GE  Capital's  credit lines is
available for use by GE Company.  Also, at December 31, 1999,  substantially all
of the  approximately  $4.2 billion of GE Company's  credit lines were available
for use by the  Corporation.  During 1999,  amounts drawn under these lines were
not significant.  The Corporation compensates banks for credit facilities in the
form of fees, which were insignificant in each of the past three years.

Interest  rates  are  managed  by the  Corporation  in light of the  anticipated
behavior,  including prepayment  behavior,  of assets in which debt proceeds are
invested.  A variety of instruments,  including interest rate and currency swaps
and  currency  forwards,  are  employed to achieve  management's  interest  rate
objectives. Effective interest rates are lower under these "synthetic" positions
than could have been achieved by issuing debt directly.

                                       30
<PAGE>

The following table shows the Corporation's  borrowing positions at December 31,
1999 and 1998, considering the effects of swaps.
<TABLE>
<CAPTION>

(In millions)                                                                            1999             1998
                                                                                    --------------   --------------
Effective borrowings (including swaps)
<S>                                                                                 <C>             <C>
Short-term .....................................................................    $      74,347   $       72,143
                                                                                    ==============   ==============
Long-term (including current portion)
  Fixed rate (a) ...............................................................    $      90,361    $      74,226
  Floating rate ................................................................           35,317           25,831
                                                                                    --------------   --------------
Total long-term ................................................................    $     125,678    $     100,057
                                                                                    ==============   ==============
</TABLE>

(a) Includes  the  notional  amount  of  long-term   interest  rate  swaps  that
    effectively  convert the  floating-rate  nature of short-term  borrowings to
    fixed rates of interest.

At December 31, 1999,  interest rate swap  maturities  ranged from 2000 to 2048,
and average  interest rates for  fixed-rate  borrowings  (including  "synthetic"
fixed-rate borrowings) were 5.63% (6.03% at year-end 1998).

NOTE 11.       INSURANCE LIABILITIES, RESERVES AND ANNUITY BENEFITS

Insurance  liabilities,  reserves and annuity  benefits at December 31, 1999 and
1998, are shown below.
<TABLE>
<CAPTION>

  (In millions)                                                                          1999             1998
                                                                                    --------------   --------------
<S>                                                                                 <C>              <C>
  Investment contracts and universal life benefits ..............................   $      30,448    $      29,266
  Life insurance benefits and other (a) .........................................          18,460           16,104
  Unpaid claims and claims adjustment expenses (b)...............................          21,473           19,611
  Unearned premiums .............................................................           6,060            5,715
  Separate accounts (see note 9) ................................................          10,335            6,563
                                                                                    --------------   --------------
                                                                                    $      86,776    $      77,259
                                                                                    ==============   ==============
</TABLE>

(a)    Life insurance  benefits are accounted for mainly by a  net-level-premium
       method  using  estimated yields  generally  ranging from 5% to 9% in both
       1999 and 1998.
(b)    Principally  property and casualty  reserves;  includes  amounts for both
       reported and  incurred-but-not-reported  claims,  reduced by  anticipated
       salvage and subrogation recoveries. Estimates of liabilities are reviewed
       and updated  continually,  with changes in estimated  losses reflected in
       operations.

When the Corporation cedes insurance to third parties, it is not relieved of its
primary  obligation to policyholders.  Losses on ceded risks give rise to claims
for recovery; allowances are established for such receivables from reinsurers.

The insurance liability for unpaid claims and claims adjustment expenses related
to policies  that may cover  environmental  and  asbestos  exposures is based on
known  facts  and an  assessment  of  applicable  law and  coverage  litigation.
Liabilities are recognized for both known and unasserted  claims  (including the
cost of related  litigation)  when sufficient  information has been developed to
indicate that a claim has been  incurred and a range of potential  losses can be
reasonably estimated. Developed case law and adequate claim history do not exist
for certain claims  principally due to significant  uncertainties as to both the
level of  ultimate  losses  that will occur and what  portion,  if any,  will be
deemed to be insured amounts.

                                       31
<PAGE>


A summary of activity  affecting  unpaid claims and claims  adjustment  expenses
follows.

<TABLE>
<CAPTION>
(In millions)                                                         1999             1998             1997
                                                                  ---------------  --------------   --------------
<S>                                                               <C>              <C>              <C>
Balance at January 1 - gross ...................................  $      19,611    $      14,654    $      13,184
Less reinsurance recoverables ..................................         (3,483)          (2,246)          (1,822)
                                                                  ---------------  --------------   --------------
Balance at January 1 - net .....................................         16,128           12,408           11,362
Claims and expenses incurred:
   Current year ................................................          6,917            6,330            4,494
   Prior years .................................................            248             (162)             146
Claims and expenses paid:
   Current year ................................................         (2,508)          (2,400)          (1,780)
   Prior years .................................................         (5,162)          (3,692)          (2,816)
Claim reserves related to acquired companies ...................            929            3,476            1,360
Other ..........................................................             89              168             (358)
                                                                  ---------------  --------------   --------------
Balance at December 31 - net ...................................         16,641           16,128           12,408
Add reinsurance recoverables ...................................          4,832            3,483            2,246
                                                                  ---------------  --------------   --------------
Balance at December 31 - gross .................................  $       21,473   $      19,611    $      14,654
                                                                  ===============  ==============   ==============
</TABLE>

Prior-year  claims  and  expenses  incurred  in  the  preceding  table  resulted
principally  from settling  claims  established  in earlier  accident  years for
amounts that differed from expectations.

Financial  guarantees  and credit life risk of insurance  affiliates at December
31, 1999 and 1998 are summarized below.

<TABLE>
<CAPTION>
(In millions)                                                                            1999             1998
                                                                                    --------------   --------------
<S>                                                                                 <C>              <C>
Guarantees, principally on municipal bonds and structured finance issues ........   $     177,840    $     171,020
Mortgage insurance risk in force ................................................          59,798           43,941
Credit life insurance risk in force .............................................          26,427           31,018
Less reinsurance ................................................................         (37,992)         (37,205)
                                                                                    --------------   --------------
                                                                                    $     226,073    $     208,774
                                                                                    ==============   ==============
</TABLE>

The effects of  reinsurance  on premiums  written and premiums  and  commissions
earned were as follows for the past three years.

<TABLE>
<CAPTION>
                                 Premiums written                          Premiums and commissions earned
                   ----------------------------------------------   ----------------------------------------------
(In millions)          1999            1998            1997             1999            1998            1997
                   --------------  --------------  --------------   --------------  --------------  --------------
<S>                <C>             <C>             <C>              <C>             <C>             <C>
Direct .........   $       7,382   $       6,237   $       5,206    $       7,002   $       6,063   $       5,138
Assumed ........           8,520           7,470           5,501            8,460           7,151           5,386
Ceded ..........          (2,278)         (1,842)         (1,311)          (2,514)         (1,862)         (1,256)
                   --------------  --------------  --------------   --------------  --------------  --------------
Net ............   $      13,624   $      11,865   $       9,396    $      12,948   $      11,352   $       9,268
                   ==============  ==============  ==============   ==============  ==============  ==============
</TABLE>

Reinsurance  recoveries  recognized  as a  reduction  of  insurance  losses  and
policyholder and annuity benefits amounted to $2,648 million, $1,594 million and
$903 million for the years ended December 31, 1999, 1998 and 1997, respectively.

NOTE 12.       MINORITY INTEREST

Minority interest in equity of consolidated  affiliates includes preferred stock
issued by GE Capital and by affiliates of GE Capital.  The preferred  stock pays
cumulative  dividends at variable  rates.  The value of the preferred  shares at
December 31, 1999 and 1998 is summarized below.

<TABLE>
<CAPTION>
(In millions)                                                                            1999             1998
                                                                                    --------------   --------------
<S>                                                                                 <C>              <C>
GE Capital ......................................................................   $       2,600    $       2,300
GE Capital affiliates............................................................           1,421              860
</TABLE>

                                       32
<PAGE>

Dividend rates in local currency on the preferred stock ranged from 0.6% to 6.1%
during 1999 and from 3.9% to 5.2% during 1998.

NOTE 13.       SHARE OWNERS' EQUITY

Changes  in  share  owners'  equity  for each of the last  three  years  were as
follows:

<TABLE>
<CAPTION>
(In millions)                                                      1999            1998            1997
                                                               --------------  --------------  --------------
<S>                                                            <C>             <C>             <C>
Cumulative Preferred Stock Issued .........................    $          10   $          10   $          10
                                                               --------------  --------------  --------------
Common Stock Issued .......................................                1               1               1
                                                               --------------  --------------  --------------
Accumulated nonowner changes other than earnings
Balance at January 1 ......................................            2,161           1,950             595
Unrealized (losses) gains on investment securities - net of
   deferred taxes of ($868), $432, and $860 ...............           (1,578)            775           1,467
Currency translation adjustments - net of deferred taxes of
   ($91), ($13) and ($58) .................................             (169)            (30)           (112)
Reclassification adjustments - net of deferred taxes of
   ($341) and ($293) ......................................             (628)           (534)           -
                                                               --------------  --------------  --------------
Balance at December 31 ....................................             (214)          2,161           1,950
                                                               --------------  --------------  --------------
Other Capital
Balance at January 1 ......................................            2,480           2,327           2,316
Contributions .............................................              192             153              11
                                                               --------------  --------------  --------------
Balance at December 31 ....................................            2,672           2,480           2,327
                                                               --------------  --------------  --------------
Retained Earnings
Balance at January 1 ......................................           15,075          12,951          11,354
Net Earnings ..............................................            4,443           3,796           3,256
Dividends .................................................           (1,666)         (1,672)         (1,659)
                                                               --------------  --------------  --------------
Balance at December 31 ....................................           17,852          15,075          12,951
                                                               --------------  --------------  --------------
Total Share Owners' Equity ................................    $      20,321   $      19,727   $      17,239
                                                               ==============  ==============  ==============
</TABLE>

The  Corporation's  outstanding  preferred  stock  amounted  to $510  million at
December 31, 1999,  all of which was held by  consolidated  affiliates  with the
exception of $10 million of such shares,  which were dividended to GE Company in
1994. All other equity is owned entirely by GE Company and an affiliate.

The  Corporation's  common  stock was split on a ten for one basis  ($1,000  par
value) on July 22, 1999 and the Corporation  also authorized  additional  common
stock, accomplished through an amendment to its Certificate of Incorporation. As
a result  of the  common  stock  split,  GE  Company  owns  1,010  shares of the
Corporation's common stock. On July 26, 1999, the Corporation issued 2 shares of
its common  stock to MRA  Systems,  Inc. (a GE Company  affiliate)  in a private
placement,  pursuant to a Share Exchange  Agreement,  dated as of July 22, 1999,
between the Corporation and MRA Systems, Inc., a Delaware corporation.

Changes in fair value of available-for-sale investment securities are reflected,
net of applicable taxes and other adjustments,  in equity. The changes from year
to year were primarily attributable to the effects of changes in year-end market
interest rates on the fair value of the securities.

At December 31, 1999 and 1998,  the aggregate  statutory  capital and surplus of
the insurance businesses totaled $14.5 billion and $14.4 billion,  respectively.
Accounting practices  prescribed by statutory  authorities are used in preparing
statutory statements.

                                       33
<PAGE>

NOTE 14.       OPERATING AND ADMINISTRATIVE EXPENSES

Employees and retirees of the Corporation are covered under a number of pension,
health and life insurance  plans.  The principal  pension plan is the GE Company
Pension Plan, a defined benefit plan, while employees of certain  affiliates are
covered under separate plans. The Corporation provides health and life insurance
benefits to certain of its retired employees,  principally  through GE Company's
benefit  program,  as well as through plans sponsored by other  affiliates.  The
annual cost to the Corporation of providing these benefits is not material.

Rental expense relating to equipment the Corporation  leases from others for the
purpose of  subleasing  was $484 million in 1999,  $439 million in 1998 and $392
million in 1997.  Other rental expense was $583 million in 1999, $450 million in
1998 and $342  million in 1997,  principally  for the rental of office space and
data processing equipment. Minimum future rental commitments under noncancelable
leases at  December  31, 1999 are $5,041  million;  $834  million in 2000;  $663
million in 2001;  $603 million in 2002;  $540  million in 2003;  $413 million in
2004 and  $1,988  million  thereafter.  The  Corporation,  as a  lessee,  has no
material lease agreements classified as capital leases.

Amortization of deferred  insurance  acquisition  costs charged to operations in
1999,  1998 and 1997 was $2,545  million,  $1,940  million  and $1,554  million,
respectively.

NOTE 15.       INCOME TAXES

The provision for income taxes is summarized in the following table.

<TABLE>
<CAPTION>
   (In millions)                                                      1999            1998             1997
                                                                  --------------- ---------------  ---------------
<S>                                                               <C>             <C>              <C>
   Estimated amounts payable .....................................$         806   $         815    $         368
   Deferred tax expense from temporary differences ...............          847             549              798
                                                                  --------------- ---------------  ---------------
                                                                  $       1,653   $        1,364   $        1,166
                                                                  =============== ===============  ===============
</TABLE>

GE Company files a  consolidated  U.S.  federal income tax return which includes
the  Corporation.  The provision for estimated taxes payable includes the effect
of the Corporation on the consolidated return.

Estimated amounts payable includes amounts applicable to non-U.S.  jurisdictions
of $844  million,  $813  million  and  $636  million  in 1999,  1998  and  1997,
respectively.

Deferred income tax balances reflect the impact of temporary differences between
the  carrying  amounts  of assets  and  liabilities  and their tax bases and are
stated at enacted tax rates  expected  to be in effect  when taxes are  actually
paid or recovered.

Except  for  certain   earnings  that  the   Corporation   intends  to  reinvest
indefinitely,  provision has been made for the estimated U.S. federal income tax
liabilities  applicable to  undistributed  earnings of affiliates and associated
companies.  It is not  practicable  to  determine  the U.S.  federal  income tax
liability,  if any, that would be payable if such  earnings were not  reinvested
indefinitely.

U.S. income before taxes was $3.5 billion in 1999, $3.4 billion in 1998 and $2.8
billion in 1997. The  corresponding  amounts for non-U.S.  based operations were
$2.6 billion in 1999, $1.8 billion in 1998 and $1.6 billion in 1997.

A  reconciliation  of the U.S.  federal  statutory rate to the actual income tax
rate follows.

<TABLE>
<CAPTION>
                                                                       1999            1998             1997
                                                                 ---------------- ---------------  ---------------
<S>                                                                    <C>              <C>              <C>
  Statutory U.S. federal income tax rate ........................      35.0%            35.0%            35.0%
  Increase (reduction) in rate resulting from:
    Amortization of goodwill ....................................       1.0              1.0              1.1
    Tax-exempt income ...........................................      (4.4)            (4.7)            (4.9)
    Tax on International Activities including Foreign Sales
      Corporation benefits ......................................      (4.8)            (1.3)            (2.2)
  Fuels credits .................................................      (1.5)            (1.8)            (1.6)
  Other - net ...................................................       1.8             (1.8)            (1.0)
                                                                 ---------------- ---------------  ---------------
  Actual income tax rate ........................................      27.1%            26.4%            26.4%
                                                                 ================ ===============  ===============
</TABLE>


                                       34
<PAGE>


Principal  components of the net deferred tax liability balances at December 31,
1999 and 1998, were as follows:

<TABLE>
<CAPTION>
(In millions)                                                                            1999             1998
                                                                                     -------------    -------------
Assets:
<S>                                                                                  <C>             <C>
  Allowance for losses .........................................................     $     1,379     $      1,386
  Insurance reserves ...........................................................           1,052            1,022
  AMT credit carryforwards .....................................................           1,185              903
  Other ........................................................................           1,912            1,994
                                                                                     -------------    -------------
 Total deferred tax assets .....................................................           5,528            5,305
                                                                                     -------------    -------------
 Liabilities:
  Financing leases .............................................................           8,593            8,593
  Operating leases .............................................................           2,840            2,419
  Net unrealized gains on securities ...........................................              73            1,369
  Other ........................................................................           2,977            2,514
                                                                                     -------------    -------------
 Total deferred tax liabilities ................................................          14,483           14,895
                                                                                     -------------    -------------
 Net deferred tax liability ....................................................     $     8,955     $      9,590
                                                                                     =============    =============
</TABLE>

NOTE 16.       OPERATING SEGMENT DATA

At year-end  1998, the  Corporation  adopted  Statement of Financial  Accounting
Standards  ("SFAS") No. 131,  Disclosures  about  Segments of an Enterprise  and
Related Information,  which requires segment data to be measured and analyzed on
a basis that is consistent with how business  activities are reported internally
for  management.  Prior period amounts have been restated in accordance with the
requirements  of the new  standard.  The  Corporation's  operating  segments are
organized based on the nature of products and services  provided.  A description
of the operating  segments can be found in Item 1. Business.,  under the heading
Operating Segments,  on page 2 of this report. The accounting policies for these
segments are the same as those described for the consolidated entity.

The Corporation evaluates the performance of its operating segments primarily on
the  basis of net  earnings.  Details  of total  revenues  and net  earnings  by
operating segment are provided in Item 7.  Management's  Discussion and Analysis
of Results of Operations under the heading Operating Segments on page 11 of this
report.

Other specific information is provided below in accordance with the requirements
of SFAS No. 131 because they are included as a component of overall  segment net
earnings or total assets.

<TABLE>
<CAPTION>
(In millions)                        Depreciation and amortization (a)          Provision for income taxes
                                   --------------------------------------  -------------------------------------
For the years ended December 31       1999         1998          1997         1999         1998         1997
                                   -----------  -----------  ------------  ----------- ------------  -----------
<S>                                <C>          <C>          <C>           <C>         <C>           <C>
Consumer Services ..............   $   1,070    $     961    $     897     $     322   $     442     $     229
Equipment Management ...........       2,405        1,890        1,690           321         257           353
Mid-Market Financing ...........         549          405          398           241         239           198
Specialized Financing ..........          62           56           51           462          47           171
Specialty Insurance ............         179          165          140           366         359           251
All other ......................         107           91           64           (59)         20           (36)
                                   -----------  -----------  ------------  ----------- ------------  -----------
   Total .......................   $   4,372    $   3,568    $   3,240     $   1,653   $   1,364     $   1,166
                                   ===========  ===========  ============  =========== ============  ===========
</TABLE>

                                       35
<PAGE>



<TABLE>
<CAPTION>

                                     Time sales, loan, investment and
                                             other income (b)                        Interest expense
                                   --------------------------------------  -------------------------------------
For the years ended December 31       1999         1998          1997         1999         1998         1997
                                   -----------  -----------  ------------  ----------- ------------  -----------

<S>                                 <C>          <C>         <C>           <C>         <C>           <C>
Consumer Services ..............    $ 12,293     $ 10,668    $   9,586     $   3,253   $   3,601     $   3,226
Equipment Management ...........       2,364        2,288        2,032         1,588       1,486         1,296
Mid-Market Financing ...........       2,328        1,719        1,160         2,027       1,674         1,276
Specialized Financing ..........       4,028        2,712        2,250         1,836       1,552         1,437
Specialty Insurance ............       3,276        2,769        2,198           692         704           586
All other ......................         163          143          497           (37)        (51)         (172)
                                   -----------  -----------  ------------  ----------- ------------  -----------
   Total .......................    $ 24,452     $ 20,299     $ 17,723     $   9,359   $   8,966     $   7,649
                                   ===========  ===========  ============  =========== ============  ===========
</TABLE>
<TABLE>
<CAPTION>

                                                                              Property, plant and equipment
                                                                              additions (including equipment
                                                  Assets                          leased to others) (c)
                                              At December 31                 For the years ended December 31
                                   --------------------------------------  -------------------------------------
                                      1999         1998          1997         1999         1998         1997
                                   -----------  -----------  ------------  ----------- ------------  -----------
<S>                                  <C>          <C>          <C>         <C>         <C>           <C>
Consumer Services (d) (e).......     $140,924     $130,868     $117,410    $   2,441   $   2,218     $   1,863
Equipment Management (e) .......       43,368       38,301       33,771        7,956       4,408         4,314
Mid-Market Financing ...........       50,337       41,802       29,315        3,893       1,316           978
Specialized Financing (e).......       48,539       36,906       28,959          155          88            36
Specialty Insurance ............       56,819       54,649       45,359           37          53            65
All other ......................        5,031          771          594          950          27            64
                                   -----------  -----------  ------------  ----------- ------------  -----------
   Total .......................     $345,018     $303,297     $255,408    $  15,432   $    8,110    $    7,320
                                   ===========  ===========  ============  =========== ============  ===========
</TABLE>

(a)  Includes amortization of goodwill and other intangibles.
(b)  Principally interest income.
(c)  Additions to  property,  plant and equipment (including equipment leased to
     others) include amounts relating to principal businesses purchased.
(d)  In 1997, the Corporation  recorded its  share  of  Montgomery  Ward Holding
     Corp. ("MWHC") losses  of   $380  million  (after  tax),  by  reducing  its
     investments in MWHC,  resulting  in  the writing off of its  investment  in
     MWHC common and preferred stock.
(e)  Total assets of the Consumer Services, Equipment Management and Specialized
     Financing segments at December 31, 1999 include investments in and advances
     to non-consolidated affiliates of $3,643 million, $4,070 million and $3,043
     million,  respectively,  which contributed approximately $182 million, $328
     million and $73 million,  respectively,  to segment  pre-tax income for the
     year ended December 31, 1999.

                                       36
<PAGE>


NOTE 17.       QUARTERLY FINANCIAL DATA (unaudited)

Summarized quarterly financial data were as follows:
<TABLE>
<CAPTION>

                                  First quarter       Second quarter        Third quarter       Fourth quarter
                                ------------------- -------------------- -------------------- -------------------
 (In millions)                    1999      1998       1999      1998       1999      1998      1999      1998
                                ---------  --------  --------- ---------  --------- --------- ---------  --------
<S>                             <C>        <C>       <C>       <C>        <C>       <C>       <C>        <C>
 Revenues ....................  $ 12,383   $ 11,151  $ 13,378  $ 11,801   $ 14,002  $ 12,016  $ 15,986   $ 13,726
                                ---------  --------  --------- ---------  --------- --------- ---------  --------
 Expenses:
  Interest ...................     2,113      2,025     2,237     2,187      2,291     2,188     2,718      2,566
  Operating and administrative
   and cost of goods sold ....     5,149      4,640     5,665     4,949      6,134     4,992     7,281      6,006
  Insurance losses and
   policyholder and annuity
   benefits ..................     2,619      2,213     2,705     2,400      2,764     2,239     2,940      2,756
  Provision for losses on
   financing receivables .....       379        332       442       409        227       306       630        562
  Depreciation and
   amortization of buildings
   and equipment and equipment
   on operating leases .......       685        656       823       604        792       669       873        687
  Minority interest in net
   earnings of consolidated
   affiliates ................        38         33        45        33         49        38        54         44
                                ---------  --------  --------- ---------  --------- --------- ---------  --------
 Earnings before income taxes      1,400      1,252     1,461     1,219      1,745     1,584     1,490      1,105
 Provision for income taxes ..      (368)      (371)     (369)     (286)      (483)     (502)     (433)      (205)
                                ---------  --------  --------- ---------  --------- --------- ---------  --------
 Net earnings ................  $  1,032   $    881  $  1,092  $    933   $  1,262  $  1,082  $  1,057   $    900
                                =========  ========  ========= =========  ========= ========= =========  ========
</TABLE>

NOTE 18.       RESTRICTED NET ASSETS OF AFFILIATES

Certain  of  the  Corporation's  consolidated  affiliates  are  restricted  from
remitting  funds to the Parent in the form of dividends or loans by a variety of
regulations,   the   purpose   of  which  is  to  protect   affected   insurance
policyholders,  depositors or  investors.  At year-end  1999,  net assets of the
Corporation's  regulated  affiliates  amounted to $31.0 billion,  of which $25.9
billion was restricted.

NOTE 19.       SUPPLEMENTAL CASH FLOWS INFORMATION

"Other - net  operating  activities"  in the  Statement  of Cash Flows  consists
principally of adjustments to other liabilities, current and noncurrent accruals
and deferrals of costs and expenses, adjustments for gains and losses on assets,
increases  and  decreases  in assets  held for sale,  and other  adjustments  to
assets.

The Statement of Cash Flows excludes  certain noncash  transactions  that had no
significant effect on the investing or financing activities of the Corporation.

Certain supplemental information related to the Corporation's cash flows were as
follows for the past three years.

<TABLE>
<CAPTION>
  (In millions)                                                       1999             1998             1997
                                                                  ---------------  --------------   --------------
  Financing receivables
<S>                                                               <C>              <C>              <C>
  Increase in loans to customers ..............................   $    (95,661)    $    (76,142)    $    (55,689)
  Principal collections from customers - loans ................         86,379           65,573           50,679
  Investment in equipment for financing leases ................        (18,173)         (20,299)         (16,420)
  Principal collections from customers - financing leases .....         13,634           15,467           13,796
  Net change in credit card receivables .......................        (10,740)          (4,705)          (4,186)
  Sales of financing receivables ..............................         11,473           13,805            9,922
                                                                  ---------------  --------------   --------------
                                                                  $    (13,088)    $     (6,301)    $     (1,898)
                                                                  ===============  ==============   ==============
  All other investing activities
  Purchases of securities by insurance and annuity businesses .   $    (26,271)    $    (23,897)    $    (19,274)
  Dispositions and maturities of securities by insurance and
   annuity businesses .........................................         23,979           20,639           17,280
  Proceeds from principal business dispositions ...............            279                -              241
  Other .......................................................         (5,810)          (7,820)          (3,893)
                                                                  ---------------  --------------   --------------
                                                                  $     (7,823)    $    (11,078)    $     (5,646)
                                                                  ===============  ==============   ==============
</TABLE>

                                       37
<PAGE>


<TABLE>
<CAPTION>

  Newly issued debt having maturities longer than 90 days
<S>                                                               <C>              <C>              <C>
  Short-term (91 to 365 days) .................................   $     15,799     $      5,881     $      3,502
  Long-term (longer than one year) ............................         30,082           33,453           15,566
  Proceeds - nonrecourse, leveraged lease debt ................          1,724            2,106            1,757
                                                                  ---------------  --------------   --------------
                                                                  $     47,605     $     41,440     $     20,825
                                                                  ===============  ==============   ==============
  Repayments and other reductions of debt having maturities
    longer than 90 days
  Short-term (91 to 365 days) .................................   $    (21,211)    $    (25,901)    $    (21,320)
  Long-term (longer than one year) ............................         (5,447)          (4,739)          (1,150)
  Principal payments - nonrecourse, leveraged lease debt ......           (266)            (387)            (287)
                                                                  ---------------  --------------   --------------
                                                                  $    (26,924)    $    (31,027)    $    (22,757)
                                                                  ===============  ==============   ==============
  All other financing activities
  Proceeds from sales of investment contracts .................   $      7,236     $      5,149     $      4,717
  Preferred stock issued by consolidated affiliates ...........            513              270              605
  Redemption of investment contracts ..........................         (7,127)          (5,533)          (4,537)
                                                                  ---------------  --------------   --------------
                                                                  $        622     $       (114)    $        785
                                                                  ===============  ==============   ==============
  Cash paid during the year for:
  Interest ....................................................   $     (9,596)    $     (8,677)    $     (7,797)
  Income taxes ................................................           (351)            (947)            (341)
</TABLE>

Changes  in  operating  assets  and  liabilities  are  net of  acquisitions  and
dispositions of businesses.

"Payments for principal businesses  purchased" in the Statement of Cash Flows is
net of cash  acquired  and  includes  debt  assumed  and  immediately  repaid in
acquisitions. In conjunction with the acquisitions,  liabilities were assumed as
follows:

<TABLE>
<CAPTION>
(In millions)                                                          1999            1998             1997
                                                                   --------------   -------------    -------------
<S>                                                                <C>              <C>              <C>
Fair value of assets acquired .................................    $     16,208     $     29,498     $     15,190
Cash paid .....................................................         (10,075)         (18,405)          (4,736)
                                                                   --------------   -------------    -------------
Liabilities assumed ...........................................    $      6,133     $     11,093     $     10,454
                                                                   ==============   =============    =============
</TABLE>

NOTE 20.       ADDITIONAL INFORMATION ABOUT FINANCIAL INSTRUMENTS

This note contains  estimated  fair values of certain  financial  instruments to
which the Corporation is a party.  Apart from the  Corporation's  own borrowings
and certain  marketable  securities,  relatively  few of these  instruments  are
actively traded. Thus, fair values must often be determined by using one or more
models that indicate value based on estimates of quantifiable characteristics as
of a particular date. Because this undertaking is, by its nature,  difficult and
highly judgmental,  for a limited number of instruments,  alternative  valuation
techniques may have produced  disclosed  values  different from those that could
have been realized at December 31, 1999 or 1998. Assets and liabilities that, as
a matter of  accounting  policy,  are  reflected in the  accompanying  financial
statements  at fair value are not included in the  following  disclosures;  such
items include cash and equivalents, investment securities and separate accounts.

A description of how values are estimated follows.

Borrowings. Based on quoted market prices or market comparables.  Fair values of
interest rate and currency swaps on borrowings are based on quoted market prices
and include the effects of counterparty creditworthiness.

Time sales and loans. Based on quoted market prices,  recent transactions and/or
discounted future cash flows, using rates at which similar loans would have been
made to similar borrowers.

Investment contract benefits. Based on expected future cash flows, discounted at
currently  offered  discount  rates  for  immediate  annuity  contracts  or cash
surrender values for single premium deferred annuities.

                                       38
<PAGE>

Financial  guarantees and credit life.  Based on future cash flows,  considering
expected renewal premiums,  claims, refunds and servicing costs, discounted at a
market rate.

All other instruments.  Based on comparable  transactions,  market  comparables,
discounted future cash flows, quoted market prices, and/or estimates of the cost
to terminate or otherwise settle obligations to counterparties.

Information  about financial  instruments that were not carried at fair value at
December 31, 1999 and 1998, is shown below.

<TABLE>
<CAPTION>
                                                1999                                           1998
                              -------------------------------------------  --------------------------------------------
                                               Assets (liabilities)                          Assets (liabilities)
                                         --------------------------------              --------------------------------
                                         Carrying                                      Carrying
                              Notional    amount    Estimated fair value   Notional     amount    Estimated fair value
                                                    ---------------------                         ---------------------
 (In millions)                 amount      (net)      High        Low       amount       (net)      High        Low
                              ---------  ---------- ----------  ---------  ----------  ---------  ---------- ----------
Assets
<S>                           <C>        <C>        <C>         <C>        <C>         <C>        <C>        <C>
 Time sales and loans ....... $     (a)  $  90,427  $  90,313   $  88,813  $     (a)   $  74,616  $  75,474  $  74,293
 Integrated interest rate
 swaps ......................    15,933         18         59          59     14,135          16       (102)      (102
 Purchased options ..........     8,949         60        174         174     11,195         146        158        158
 Mortgage-related positions
  Mortgage purchase                 669          -          -           -      1,983           -         15         15
    commitments .............
  Mortgage sale commitments .     1,452          -          4           4      3,276           -         (9)        (9)
  Mortgages held for sale ...       (a)      2,522      2,516       2,488        (a)       4,405      4,457      4,457
  Options, including             23,929         76         56          56     21,433          91        181        181
  "floors" ..................
  Interest rate swaps and         4,054          -        (67)        (67)     6,662           -         49         49
  futures ...................
 Other financial instruments        (a)      4,478      4,558       4,528        (a)       3,205      3,433      3,231
Liabilities
 Borrowings and related
   instruments
  Borrowings (b) (c) ........       (a)   (200,025)  (198,798)   (198,798)       (a)    (172,200)  (174,492)  (174,492)
  Interest rate swaps .......    56,339          -        (99)        (99)    46,325           -     (1,449)    (1,449)
  Currency swaps ............    22,744          -     (1,425)     (1,425)    29,645           -        252        252
  Currency forwards .........    26,806          -       (459)       (459)    23,409           -       (389)      (389)
 Investment contract
   benefits .................       (a)    (24,943)   (24,420)    (24,420)       (a)     (23,893)   (23,799)   (23,799)
 Insurance - financial
   guarantees and credit
   life .....................   226,073     (2,757)    (2,797)     (2,909)   208,774      (3,135)    (3,339)    (3,446)
 Credit and liquidity
   support -securitizations .    34,389       (144)      (144)       (144)    21,703         (29)       (29)       (29)
 Performance guarantees
   -principally letters of
   credit ...................     3,472        (56)       (56)        (56)     2,684           -          -          -
 Other financial instruments      2,545     (1,473)    (1,444)     (1,444)     2,888      (1,921)    (1,190)    (1,190)
Other firm commitments
  Currency forwards .........     3,778        (14)       (41)        (41)     5,072           -        (52)       (52)
  Currency swaps ............       767        238        200         200        915          72         72         72
  Ordinary course of
    business lending
    commitments .............     7,822          -          -           -      9,839           -        (12)       (12)
  Unused revolving credit
  lines
   Commercial ...............    11,440          -          -           -      6,401           -          -          -
   Consumer - principally
     credit cards ...........   151,651          -          -           -    132,475           -          -          -
</TABLE>

(a) Not applicable.
(b) Includes  effects of interest rate and currency swaps, which also are listed
     separately.
(c) See note 10.

Additional  information about certain  financial  instruments in the above table
follows.

Currency  forwards  and  options  are  employed  by the  Corporation  to  manage
exposures  to changes in currency  exchange  rates  associated  with  commercial
purchase and sale  transactions and to optimize  borrowing costs as discussed in
note  10.  These  financial  instruments  generally  are  used to fix the  local
currency cost of purchased  goods or services or selling  prices  denominated in
currencies other than the functional  currency.  Currency  exposures that result
from net  investments  in affiliates  are managed  principally by funding assets
denominated in local currency with debt denominated in those same currencies. In
certain  circumstances,  net  investment  exposures are managed  using  currency
forwards and currency swaps.

                                       39
<PAGE>

Options and instruments  containing  option features that behave based on limits
("caps",  "floors" or "collars") on interest rate movement are used primarily to
hedge prepayment risk in certain of the Corporation's business activities,  such
as mortgage servicing and annuities.

Swaps of interest rates and  currencies are used by the  Corporation to optimize
funding costs for a particular funding strategy (see note 10). Interest rate and
currency  swaps,  along with  purchased  options  and  futures,  are used by the
Corporation  to  establish  specific  hedges of  mortgage-related  assets and to
manage net investment exposures.  Credit risk of these positions is evaluated by
management  under the credit  criteria  discussed  below. As part of its ongoing
customer activities,  the Corporation also enters into swaps that are integrated
into  investments  in or  loans  to  particular  customers  and do  not  involve
assumption of third-party  credit risk. Such integrated  swaps are evaluated and
monitored  like  their  associated  investments  or loans and are not  therefore
subject to the same credit criteria that would apply to a stand-alone position.

Counterparty  credit risk - risk that  counterparties will be financially unable
to make  payments  according to the terms of the  agreements - is the  principal
risk associated with swaps,  purchased options and forwards.  Gross market value
of probable  future  receipts is one way to measure this risk, but is meaningful
only in the context of net credit  exposure  to  individual  counterparties.  At
December 31, 1999 and 1998,  this gross market risk amounted to $2.0 billion and
$2.3 billion,  respectively.  Aggregate  fair values that  represent  associated
probable future obligations,  normally associated with a right of offset against
probable  future  receipts,  amounted to $3.6 billion at both  year-end 1999 and
1998.

Except as noted above for positions that are  integrated  into  financings,  all
swaps,  purchased  options and  forwards  are  carried out within the  following
credit policy constraints.

o        Once a counterparty  exceeds a credit exposure limit (see table below),
         no additional  transactions  are permitted until the exposure with that
         counterparty  is  reduced to an amount  that is within the  established
         limit. Open contracts remain in force.

         Counterparty credit criteria
<TABLE>
<CAPTION>
                                                                                        Credit rating
                                                                               -------------------------------
                                                                                                 Standard &
                                                                                  Moody's          Poor's
                                                                               --------------   --------------
         <S>                                                                       <C>               <C>
         Term of transaction
           Between one and five years ......................................        Aa3              AA-
           Greater than five years .........................................        Aaa              AAA
         Credit exposure limits
           Up to $50 million ...............................................        Aa3              AA-
           Up to $75 million ...............................................        Aaa              AAA
</TABLE>

o        All swaps are executed under master swap agreements  containing  mutual
         credit  downgrade  provisions  that  provide  the  ability  to  require
         assignment or termination in the event either party is downgraded below
         A3 or A-.

More credit latitude is permitted for  transactions  having original  maturities
shorter than one year because of their lower risk.

                                       40
<PAGE>


NOTE 21.       GEOGRAPHIC SEGMENT INFORMATION

The table below  presents data by geographic  region.  Revenues  shown below are
classified according to their country of origin.
<TABLE>
<CAPTION>

                                              Revenues                             Long-lived assets
                                   For the years ended December 31                  At December 31
                               ----------------------------------------- ----------------------------------------
 (In millions)                     1999          1998          1997          1999          1998          1997
                               ------------- ------------- ------------- ------------  ------------  ------------
<S>                            <C>           <C>           <C>           <C>           <C>           <C>
 United States ..............  $   34,063    $   30,498    $   26,188    $   13,270    $   10,476    $    9,714
 Europe .....................      14,045        13,072         9,490         3,449         3,614         2,727
 Pacific Basin ..............       3,722         1,418           940         1,280           625           270
 Global (a) .................       1,788         1,682         1,669         8,960         8,160         7,543
 Other (b) ..................       2,131         2,024         1,644         1,682         1,161           944
                               ------------- ------------- ------------- ------------  ------------  ------------
   Total ....................  $   55,749    $   48,694    $   39,931    $   28,641    $   24,036    $   21,198
                               ============= ============= ============= ============  ============  ============
</TABLE>

(a)  Includes  operations  that cannot  meaningfully be associated with specific
     geographic areas (for example,  commercial aircraft and shipping containers
     used on ocean-going vessels).

(b)  Principally the Americas other than the United States.


Item 9.      Changes  in and  Disagreements with  Accountants on  Accounting and
             Financial Disclosure.

                                 Not applicable

                                       41
<PAGE>


                                    PART III

Item 10.     Directors and Executive Officers of the Registrant.

                                     Omitted

Item 11.     Executive Compensation.

                                     Omitted

Item 12.     Security Ownership of Certain Beneficial Owners and Management.

                                     Omitted

Item 13.     Certain Relationships and Related Transactions.

                                     Omitted

                                       42
<PAGE>


                                     PART IV

Item 14.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)  1.      Financial Statements

             Included in Part II of this report:

                Independent Auditors' Report

                Statement of Earnings for  each of  the years in  the three-year
                    period ended December 31, 1999

                Statement of Changes  in  Share Owners'  Equity for each of  the
                    years in the three-year period ended

                  December 31, 1999

                Statement of Financial Position at December 31, 1999 and 1998

                Statement of Cash Flows for each of the years in the  three-year
                    period ended December 31, 1999

                Notes to Consolidated Financial Statements

             Incorporated by reference:

                The  consolidated   financial  statements  of  General  Electric
                Company,  set forth in the Annual Report on Form 10-K of General
                Electric Company (S.E.C.  File No. 001-00035) for the year ended
                December 31, 1999 (pages F-1 through F-44) and Exhibit 12 (Ratio
                of Earnings to Fixed Charges) of General Electric Company.

(a)  2.      Financial Statement Schedules

             Schedule I.   Condensed financial information of registrant.

             Schedule  V.  Supplemental   information  concerning  property  and
                           casualty insurance operations.

             All  other   schedules  are  omitted  because  of  the  absence  of
             conditions  under which they are  required or because the  required
             information is shown in the financial statements or notes thereto.

(a)  3.      Exhibit Index

             The exhibits  listed below,  as part of Form 10-K,  are numbered in
             conformity with the numbering used in Item 601 of Regulation S-K of
             the Securities and Exchange Commission.


Exhibit                           Description
Number

3(i)   A complete copy of the Certificate of Incorporation of the Corporation as
       last amended on July 22, 1999 and currently in effect,  consisting of the
       following:  (a) the Certificate of Incorporation of the Corporation as in
       effect  immediately  prior to the filing of a Certificate of Amendment on
       July  22,  1999  (incorporated  by  reference  to  Exhibit  3(i)  of  the
       Corporation's Form 10-K Report for the year ended December 31, 1993); and
       (b) a Certificate of Amendment  filed with the Office of the Secretary of
       State,  State of Delaware on July 22, 1999  (incorporated by reference to
       Exhibit 3(i) of the Corporation's  Form 10-Q Report for the quarter ended
       June 26, 1999).

3(ii)  A complete copy of the By-Laws of the Corporation as last amended on June
       30, 1994, and currently in effect.  (Incorporated by reference to Exhibit
       3(ii) of the  Corporation's  Form 10-K Report for the year ended December
       31, 1994).

4(a)   Agreement  to furnish to the  Securities  and  Exchange  Commission  upon
       request a copy of  instruments  defining the rights of holders of certain
       long-term  debt  of  the  registrant  and  all   subsidiaries  for  which
       consolidated or  unconsolidated  financial  statements are required to be
       filed.

12(a)  Computation of ratio of earnings to fixed charges.

12(b)  Computation  of ratio of earnings to combined fixed charges and preferred
       stock dividends.

                                       43
<PAGE>

23(ii) Consent of KPMG LLP.

24     Power of Attorney.

27     Financial Data Schedule (filed electronically herewith).

99(a)  Income  Maintenance  Agreement  dated  March 28,  1991,  between  General
       Electric Company and General Electric Capital Corporation.  (Incorporated
       by reference to Exhibit 28 of the Corporation's  Form 10-K Report for the
       year ended December 31, 1992).

99(b)  The consolidated  financial  statements of General Electric Company,  set
       forth in the  Annual  Report on Form  10-K of  General  Electric  Company
       (S.E.C.  File No. 001-00035) for the year ended December 31, 1999, (pages
       F-1 through F-44) and Exhibit 12 (Ratio of Earnings to Fixed  Charges) of
       General Electric Company.

99(c)  Item 1.  Business - Property and Casualty  Reserves for Unpaid Claims and
       Claim Expenses,  set forth in the Annual Report on Form 10-K of GE Global
       Insurance  Holding  Corporation  (S.E.C.  File No.  0-27394) for the year
       ended December 31, 1999 (Pages 5 through 10).

99(d)  Letter,  dated  February  4, 1999,  from Dennis D.  Dammerman  of General
       Electric   Company  to  Denis  J.  Nayden  of  General  Electric  Capital
       Corporation  pursuant to which General Electric Company agrees to provide
       additional equity to General Electric Capital  Corporation in conjunction
       with certain  redemptions  by General  Electric  Capital  Corporation  of
       shares of its  Variable  Cumulative  Preferred  Stock.  (Incorporated  by
       reference  to Exhibit 99 (g) to General  Electric  Capital  Corporation's
       Post-Effective  Amendment  No. 1 to  Registration  Statement on Form S-3,
       File No. 333-59707).


  (b)  Reports on Form 8-K

                            None.



                                       44
<PAGE>

<TABLE>
<CAPTION>

       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                     GENERAL ELECTRIC CAPITAL SERVICES, INC.

              CONDENSED STATEMENT OF CURRENT AND RETAINED EARNINGS

For the years ended December 31 (In millions)                             1999             1998             1997
                                                                      -------------    -------------    -------------
<S>                                                                   <C>                <C>            <C>
REVENUES .........................................................    $        26        $       1      $       237
                                                                      -------------    -------------    -------------
EXPENSES:
  Interest .......................................................            378              306              289
  Operating and administrative ...................................            342              234              445
                                                                      -------------    -------------    -------------
 Loss before income taxes and equity in earnings of affiliates ...           (694)            (539)            (497)
 Income tax benefit ..............................................            194              143              175
 Equity in earnings of affiliates ................................          4,943            4,192            3,578
                                                                      -------------    -------------    -------------
 NET EARNINGS ....................................................          4,443            3,796            3,256
 Dividends paid ..................................................         (1,666)          (1,672)          (1,659)
 Retained earnings at January 1 ..................................         15,075           12,951           11,354
                                                                      -------------    -------------    -------------
 RETAINED EARNINGS AT DECEMBER 31 ................................    $    17,852      $    15,075      $    12,951
                                                                      =============    =============    =============
</TABLE>


See Notes to Condensed Financial Statements.



                                       45
<PAGE>

<TABLE>
<CAPTION>

       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

    SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - (Continued)

                     GENERAL ELECTRIC CAPITAL SERVICES, INC.

                    CONDENSED STATEMENT OF FINANCIAL POSITION

 At December 31 (In millions)                                                               1999             1998
                                                                                       --------------   --------------
 ASSETS
<S>                                                                                    <C>
 Cash and equivalents ..............................................................   $         -                -
 Investment in and advances to affiliates ..........................................        27,325           26,611
 Other assets.......................................................................           242              308
                                                                                       --------------   --------------
  Total assets .....................................................................   $    27,567      $    26,919
                                                                                       ==============   ==============
 LIABILITIES AND EQUITY
 Short-term borrowings .............................................................   $     6,137      $     6,018
 Long-term borrowings ..............................................................           299              299
 Accounts payable ..................................................................            12               72
 Other liabilities .................................................................           298              303
                                                                                       --------------   --------------
  Total liabilities ................................................................         6,746            6,692
                                                                                       --------------   --------------
 Cumulative preferred stock, $10,000 par value (80,000 shares authorized; 51,000
   shares issued and held primarily by affiliates at December 31, 1999 and 1998) ...           510              510
 Common stock, $1,000 par value (1,260  and 1,010 shares  authorized at December
   31, 1999  and  1998,  respectively,  1,012  and 1,010  shares  outstanding at
   December 31, 1999 and 1998, respectively) .......................................             1                1
 Additional paid-in capital ........................................................         2,672            2,480
 Retained earnings .................................................................        17,852           15,075
 Accumulated unrealized gains on investment securities held by affiliates - net (a)            170            2,376
 Accumulated foreign currency translation adjustments (a) ..........................          (384)            (215)
                                                                                       --------------   --------------
  Total equity .....................................................................        20,821           20,227
                                                                                       --------------   --------------
  Total liabilities and equity .....................................................   $    27,567      $    26,919
                                                                                       ==============   ==============
</TABLE>

(a)  The sum of accumulated  unrealized  gains on investment  securities held by
     affiliates  and  accumulated  foreign  currency   translation   adjustments
     constitutes  "Accumulated  nonowner  changes other than  earnings," and was
     ($214) million and $2,161 million at year-end 1999 and 1998, respectively.

See Notes to Condensed Financial Statements.



                                       46
<PAGE>

<TABLE>
<CAPTION>

       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

    SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - (Continued)

                     GENERAL ELECTRIC CAPITAL SERVICES, INC.

                        CONDENSED STATEMENT OF CASH FLOWS

 For the years ended December 31 (In millions)                            1999             1998             1997
                                                                      --------------   --------------   --------------
<S>                                                                   <C>              <C>              <C>
 CASH FROM OPERATING ACTIVITIES ...................................   $     1,387      $       669      $     1,414
                                                                      --------------   --------------   --------------
 CASH FLOWS FROM INVESTING ACTIVITIES
 Change in investment and advances to affiliates ..................            45           (1,339)              59
 Net change in other assets .......................................           115             (101)             (44)
                                                                      --------------   --------------   --------------
   Cash from (used for) investing activities ......................           160           (1,440)              15
                                                                      --------------   --------------   --------------
 CASH FLOWS FROM FINANCING ACTIVITIES
 Net change in borrowings (less than 90-day maturities) ...........           119            2,443              223
 Dividends paid ...................................................        (1,666)          (1,672)          (1,659)
                                                                      --------------   --------------   --------------
   Cash (used for) from financing activities ......................        (1,547)             771           (1,436)
                                                                      --------------   --------------   --------------
 DECREASE IN CASH AND EQUIVALENTS DURING THE YEAR .................             -                -               (7)
 CASH AND EQUIVALENTS AT BEGINNING OF YEAR ........................             -                -                7
                                                                      --------------   --------------   --------------
 CASH AND EQUIVALENTS AT END OF YEAR ..............................   $         -      $         -      $         -
                                                                      ==============   ==============   ==============
</TABLE>


See Notes to Condensed Financial Statements.


                                       47
<PAGE>


       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

    SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - (Concluded)

                     GENERAL ELECTRIC CAPITAL SERVICES, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

Income taxes

General  Electric  Company files a consolidated  U.S.  federal income tax return
which includes General Electric Capital Services,  Inc. ("GE Capital Services").
Income  tax  benefit   includes  the  effect  of  GE  Capital  Services  on  the
consolidated return.

Dividends from affiliates

In 1999 and 1998,  GE Capital  Services  received  dividends of $338 million and
$363 million,  respectively,  from GE Global Insurance  Holding  Corporation and
$1,423 million and $798 million,  respectively,  from General  Electric  Capital
Corporation ("GE Capital").

                                       48
<PAGE>

<TABLE>
<CAPTION>

       GENERAL ELECTRIC CAPITAL SERVICES, INC. AND CONSOLIDATED AFFILIATES

                SCHEDULE V - SUPPLEMENTAL INFORMATION CONCERNING

                   PROPERTY AND CASUALTY INSURANCE OPERATIONS

(in millions)
                    At December 31                                             Year ended December 31
         ------------------------------------------ -------------------------------------------------------------------------------
                                 Discount
                                 deducted
                                     from
                    Liabliity  liability                                     Claims and claims
                    for upaid for unpaid                                     adjustment expenses  Amortization
          Defered  claims and claims and                Earned               incurred related to:  of deferred Paid claims
           policy      claims     claims              premiums         Net   ------------------        policy  and claims
      acquisition   djustment adjustment  Unearned         and  investment   Current     Prior    acquisition adjustment   Premiums
            costs    expenses   expenses  premiums commissions      income      Year     Years          costs   expenses    written
         --------   ---------     ------   -------    --------   ---------   --------   -------      --------   --------   --------
<S>      <C>        <C>           <C>      <C>        <C>        <C>         <C>        <C>          <C>        <C>        <C>
1999     $  1,089   $  19,683     $  334   $ 4,505    $  8,185   $   1,464   $  5,211   $   185      $  2,088   $  5,854   $  8,424
         ========   =========     ======   =======    ========   =========   ========   =======      ========   ========   ========
1998     $  1,079   $  18,396    $   354   $ 4,293    $  7,183   $   1,327   $  4,508   $  (186)     $  1,635   $  4,641   $  7,490
         ========   =========    =======   =======    ========   =========   ========   =======      ========   ========   ========
1997     $    853   $  13,672    $   347   $ 3,653    $  5,702   $   1,185   $  3,355   $   124      $  1,365   $  3,505   $  5,645
         ========   =========    =======   =======    ========   =========   ========   =======      ========   ========   ========

</TABLE>


                                       49
<PAGE>


56

                                                                   Exhibit 4 (a)

                                                                  March 14, 2000

Securities and Exchange Commission
450 Fifth Street, N.W.

Washington, D.C. 20549

Subject:   General Electric Capital Services, Inc. Annual Report on Form 10-K
           for the fiscal year ended December 31, 1999 - File No. 0-14804

Dear Sirs:

Neither General Electric Capital Services,  Inc. (the  "Corporation") nor any of
its  subsidiaries  has  outstanding any instrument with respect to its long-term
debt that is not  registered  or filed with the  Commission  and under which the
total  amount of  securities  authorized  exceeds 10% of the total assets of the
registrant and its  subsidiaries  on a consolidated  basis.  In accordance  with
paragraph (b) (4) (iii) of Item 601 of Regulation S-K (17 CFR  ss.229.601),  the
Corporation hereby agrees to furnish to the Securities and Exchange  Commission,
upon request,  a copy of each instrument  which defines the rights of holders of
such long-term debt.

                                         Very truly yours,

                                         GENERAL ELECTRIC CAPITAL SERVICES, INC.


                                         By: /s/ J.A. Parke
                                             J.A. Parke,
                                             Executive Vice President and
                                             Chief Financial Officer

                                       50
<PAGE>


                                                                  Exhibit 12 (a)
<TABLE>
<CAPTION>

                     GENERAL ELECTRIC CAPITAL SERVICES, INC.

                           AND CONSOLIDATED AFFILIATES

                Computation of Ratio of Earnings to Fixed Charges

                                                                        Years ended December 31
                                                    -----------------------------------------------------------------
 (Dollars in millions)                                 1999          1998         1997         1996          1995
                                                    ------------  -----------  ------------ ------------  -----------
<S>                                                 <C>           <C>          <C>          <C>           <C>
 Net earnings ....................................  $   4,443     $   3,796    $   3,256    $   2,817     $   2,415
 Provision for income taxes ......................      1,653         1,364        1,166        1,231         1,105
 Minority interest ...............................        186           148          121          167           140
                                                    ------------  -----------  ------------ ------------  -----------
 Earnings before income taxes and minority
   interest ......................................      6,282         5,308        4,543        4,215         3,660
                                                    ------------  -----------  ------------ ------------  -----------
 Fixed charges:
   Interest ......................................      9,607         9,122        7,762        7,402         6,731
   One-third of rentals ..........................        356           296          245          182           175
                                                    ------------  -----------  ------------ ------------  -----------
 Total fixed charges .............................      9,963         9,418        8,007        7,584         6,906
 Less interest capitalized, net of amortization ..        (87)          (88)         (52)         (41)          (21)
                                                    ------------  -----------  ------------ ------------  -----------
 Earnings before income taxes and minority
   interest, plus fixed charges ..................   $ 16,158      $ 14,638     $ 12,498     $ 11,758      $ 10,545
                                                    ============  ===========  ============ ============  ===========
 Ratio of earnings to fixed charges ..............       1.62         1.55          1.56         1.55         1.53
                                                    ============  ===========  ============ ============  ===========

</TABLE>


                                       51
<PAGE>


                                                                  Exhibit 12 (b)
<TABLE>
<CAPTION>

                     GENERAL ELECTRIC CAPITAL SERVICES, INC.

                           AND CONSOLIDATED AFFILIATES

     Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends



                                                                        Years ended December 31
                                                    -----------------------------------------------------------------
 (Dollars in millions)                                 1999          1998         1997         1996          1995
                                                    ------------  -----------  ------------ ------------  -----------
<S>                                                  <C>           <C>          <C>          <C>           <C>
 Net earnings ....................................   $  4,443      $  3,796     $  3,256     $  2,817      $  2,415
 Provision for income taxes ......................      1,653         1,364        1,166        1,231         1,105
 Minority interest ...............................        186           148          121          167           140
                                                    ------------  -----------  ------------ ------------  -----------
 Earnings before income taxes and minority
   interest ......................................      6,282         5,308        4,543        4,215         3,660
                                                    ------------  -----------  ------------ ------------  -----------
 Fixed charges:
   Interest ......................................      9,607         9,122        7,762        7,402         6,731
   One-third of rentals ..........................        356           296          245          182           175
                                                    ------------  -----------  ------------ ------------  -----------
 Total fixed charges .............................      9,963         9,418        8,007        7,584         6,906
                                                    ------------  -----------  ------------ ------------  -----------
 Less interest capitalized, net of amortization ..        (87)          (88)         (52)         (41)          (21)
                                                    ------------  -----------  ------------ ------------  -----------
 Earnings before income taxes and minority
   interest, plus fixed charges ..................    $16,158       $14,638      $12,498      $11,758       $10,545
                                                    ============  ===========  ============ ============  ===========
 Preferred stock dividend requirements ...........  $       1     $       1    $       1    $       1     $       1
 Ratio of earnings before provisions for income
   taxes to net earnings .........................       1.37          1.36         1.36         1.44          1.46
                                                    ------------  -----------  ------------ ------------  -----------
 Preferred stock dividend factor on pre-tax basis           1             1            1            1             1
 Fixed charges ...................................      9,963         9,418        8,007        7,584         6,906
                                                    ------------  -----------  ------------ ------------  -----------
 Total fixed charges and preferred stock dividend
   requirements ..................................   $  9,964      $  9,419     $  8,008     $  7,585      $  6,907
                                                    ============  ===========  ============ ============  ===========
 Ratio of earnings to combined fixed charges and
   preferred stock dividends .....................       1.62         1.55          1.56         1.55         1.53
                                                    ============  ===========  ============ ============  ===========

</TABLE>

                                       52
<PAGE>


                                                                 Exhibit 23 (ii)

To the Board of Directors
General Electric Capital Services, Inc.:

We consent to  incorporation  by reference in the  Registration  Statement  (No.
33-7348) on Form S-3 of General Electric Capital  Services,  Inc., of our report
dated  February 4, 2000,  relating to the  statement  of  financial  position of
General  Electric  Capital  Services,  Inc. and  consolidated  affiliates  as of
December 31, 1999 and 1998, and the related  statements of earnings,  changes in
share  owners'  equity  and cash  flows for each of the years in the  three-year
period ended December 31, 1999, and related  schedules,  which report appears in
the December  31, 1999 annual  report on Form 10-K of General  Electric  Capital
Services, Inc.

/s/ KPMG LLP

Stamford, Connecticut
March 14, 2000

                                       53
<PAGE>


                                                                      Exhibit 24

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS,  that each of the  undersigned,  being directors
and/or  officers  of  General  Electric  Capital  Services,   Inc.,  a  Delaware
corporation  (the  "Corporation"),  hereby  constitutes  and appoints  Dennis D.
Dammerman,  James A. Parke,  Joan C. Amble and Nancy E. Barton and each of them,
his true and lawful  attorney-in-fact and agent, with full power of substitution
and  resubstitution,  for him and in his  name,  place  and stead in any and all
capacities, to sign one or more Annual Reports for the Corporation's fiscal year
ended December 31, 1999, on Form 10-K under the Securities Exchange Act of 1934,
as amended,  or such other form as such  attorney-in-fact  may deem necessary or
desirable, any amendments thereto, and all additional amendments thereto in such
form as they or any one of them  may  approve,  and to file  the  same  with all
exhibits thereto and other documents in connection therewith with the Securities
and Exchange Commission,  granting unto said  attorneys-in-fact  and agents, and
each of them,  full power and authority to do and perform each and every act and
thing  requisite  and necessary to be done to the end that such Annual Report or
Annual  Reports  shall  comply  with the  Securities  Exchange  Act of 1934,  as
amended, and the applicable Rules and Regulations of the Securities and Exchange
Commission  adopted or issued pursuant thereto,  as fully and to all intents and
purposes as he might or could do in person,  hereby ratifying and confirming all
that  said  attorneys-in-fact  and  agents,  or  any of  them  or  their  or his
substitute  or  resubstitute,  may  lawfully  do or cause  to be done by  virtue
hereof.

IN WITNESS WHEREOF,  each of the undersigned has hereunto set his hand this 14th
day of March, 2000.

/s/ Dennis D. Dammerman                       /s/ James A. Parke
------------------------------------          ------------------
Dennis D. Dammerman,                          James A. Parke,
Chairman of the Board                         Director, Executive Vice President
and Chief Executive Officer                   and Chief Financial Officer
(Principal Executive Officer)                 (Principal Financial Officer)


                                    /s/ Joan C. Amble
                                    -----------------
                                    Joan C. Amble,
                                    Vice President and Controller
                                    (Principal Accounting Officer)












                                                                   (Page 1 of 2)


                                       54
<PAGE>



                                               /s/ Denis J. Nayden
-------------------------------------          ---------------------------------
Nigel D.T. Andrews,                            Denis J. Nayden,
Director                                       Director

/s/ Nancy E. Barton
-------------------------------------          ---------------------------------
Nancy E. Barton,                               Michael A. Neal,
Director                                       Director

/s/ James R. Bunt                              /s/ Gary M. Reiner
-------------------------------------          ---------------------------------
James R. Bunt,                                 Gary M. Reiner,
Director                                       Director

/s/ David L. Calhoun                           /s/ John M. Samuels
-------------------------------------          ---------------------------------
David L. Calhoun,                              John M. Samuels,
Director                                       Director

                                               /s/ Keith S. Sherin
-------------------------------------          ---------------------------------
Benjamin W. Heineman, Jr.,                     Keith S. Sherin,
Director                                       Director

/s/ Jeffrey R. Immelt
-------------------------------------          ---------------------------------
Jeffrey R. Immelt,                             Edward D. Stewart,
Director                                       Director

/s/ W. James McNerney, Jr.                     /s/ John F. Welch, Jr.
-------------------------------------          ---------------------------------
W. James McNerney, Jr.,                        John F. Welch, Jr.,
Director                                       Director

/s/ John H. Myers
-------------------------------------          ---------------------------------
John H. Myers,                                 William A. Woodburn,
Director                                       Director

/s/ Robert L. Nardelli
-------------------------------------
Robert L. Nardelli,
Director





A MAJORITY OF THE BOARD OF DIRECTORS







                                                                   (Page 2 of 2)
                                       55
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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 SERVICES, INC.

March 14, 2000                           By: /s/ Dennis D. Dammerman
                                             ------------------------------
                                             (Dennis D. Dammerman)
                                              Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the date indicated.


    Signature                         Title                       Date

/s/ Dennis D. Dammerman      Chairman of the Board and            March 14, 2000
---------------------------  Chief Executive Officer
(Dennis D. Dammerman)       (Principal Executive Officer)


/s/ James A. Parke           Director, Executive Vice President   March 14, 2000
--------------------------   and Chief Financial Officer
(James A. Parke)            (Principal Financial Officer)


/s/ Joan C. Amble             Vice President and Controller       March 14, 2000
--------------------------   (Principal Accounting Officer)
(Joan C. Amble)


NANCY E. BARTON *                         Director
JAMES R. BUNT *                           Director
DAVID L. CALHOUN *                        Director
DENNIS D. DAMMERMAN *                     Director
JEFFREY R. IMMELT *                       Director
W. JAMES McNERNEY, JR. *                  Director
JOHN H. MYERS *                           Director
ROBERT L. NARDELLI *                      Director
DENIS J. NAYDEN *                         Director
JAMES A. PARKE *                          Director
GARY M. REINER *                          Director
JOHN M. SAMUELS *                         Director
KEITH S. SHERIN *                         Director
JOHN F. WELCH, JR. *                      Director

A MAJORITY OF THE BOARD OF DIRECTORS

*By:         /s/ Joan C. Amble                                    March 14, 2000
         ---------------------------
              (Joan C. Amble)
              Attorney-in-fact

                                       56