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To Our Share Owners, Customers and Employees
The final year of the century was our finest, as 340,000 GE people around the globe posted the strongest results in the Company's 122-year history.
- Revenues rose 11% to $112 billion, a record.
- Earnings increased 15% to $10.7 billion, the first time GE has broken the $10 billion mark in earnings from operations.
- Earnings per share were up 15%.
- Free cash flow was a strong $11.8 billion, up 17%.
- Our ongoing operating margin rate grew to 17.8%, a gain of more than a full point from '98 and the third straight year of more than a full point improvement. Working capital turns hit an all-time high of 11.5 — an improvement of 2.3 turns. The 80% improvement in this key performance measure over the past three years has added $4 billion to our cash flow.
- GE made 134 acquisitions in 1999, worth almost $17 billion. This marks the Company's third year in a row with over 100 acquisitions, totaling over $51 billion.
- GE was named, for the second consecutive year, Fortune magazine's "Most Admired Company in America." Also for the second straight year, we were named "The World's Most Respected Company" by the Financial Times. A Business Week survey named the GE Board of Directors "Best Board," and Time magazine described GE as "The Company of the Century."
- We repurchased $1.9 billion in GE stock in 1999, raised the dividend 17% for the second consecutive year, and proposed a 3-for-1 stock split, the fifth split in 17 years, which will take effect after share owner approval in April 2000.
Our share owners — including our active and retired employees who have $24 billion of GE stock in their savings plans — were rewarded for this performance. The total return on a share of GE stock in 1999 was 54%. This followed returns of 41% in 1998, 51% in 1997, 40% in 1996 and 45% in 1995.
Understanding GE
In this report, for the first time, the CEOs of the top 20 GE businesses will describe the highlights and, in a few cases, the shortfalls of the year, and their plans for the future. Fourteen of these 20 businesses produced double-digit earnings increases in 1999: five grew more than 40%; four between 25-40%; five between 15-25%; three were about flat; three were down.
We never get it all "right" in any year, and probably never will, but it is the scale and leading market positions of these businesses, and the quality of the teams that run them, that allow us to have one great year after another. 1999 was an outstanding year — our best ever — but the past five have been great as well, as have the past 20. For that matter, it's been a great century. Edison would be pleased.
We believe annual reports are as much about where we can go as where we have been; and our message to you this year should enable you to look forward to the brightest of futures for GE in its third century of operation.
...it's actually easy to understand this Company, and to feel confident about its future growth, if you look at its array of world-class businesses and grasp the two fundamental forces that drive GE — its social architecture and its operating system.
Much has been said of the difficulty of "understanding" GE because of the enormous diversity of its products and services and the breadth of its global operations. But it's actually easy to understand this Company, and to feel confident about its future growth, if you look at its array of world-class businesses and grasp the two fundamental forces that drive GE — its social architecture and its operating system.
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(Click photo to enlarge)
Chairman and Chief Executive Officer John F. Welch, Jr. (center) and Vice Chairmen and Executive Officers John D. Opie (left) and Dennis D. Dammerman (right) form GE’s Corporate Executive Office.
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