Interim Results - Part 1

General Electric Company PLC
25 November 1999


Part 1


                   GEC 1999/2000 INTERIM STATEMENT HIGHLIGHTS
                                        
           Global Business Platform in Place for Growth of Marconi plc
                     Continued Strong Financial Performance


GEC took significant steps in achieving its strategic objectives and reported
a strong financial performance, driven by the Communications division, in the
six months ended 30 September 1999. The Group's refocusing has been completed
with the demerger of the defence business, and a global Communications
business platform has been built with the successful acquisition and
integration of Reltec Corporation, Fore Systems and RDC.  From this platform,
the Group is entering a new phase of rapid organic growth as Marconi plc.

*  Reported turnover for the Group, excluding the defence business,
   ('Marconi') rose by 40 per cent to £2,521 million (1998/99: £1,797
   million) or 8 per cent on a like-for-like basis.

*  Reported operating profit before exceptional items and goodwill
   amortisation for Marconi rose by 51 per cent to £299 million (1998/99:
   £198 million) or 10 per cent on a like-for-like basis.

*  Like-for-like operating profit before exceptional items and goodwill
   amortisation for the Communications division increased by 27 per cent to
   £193 million.

*  Marconi Research & Development investment increased by 38 per cent, while
   Return on Sales (before exceptional items and goodwill amortisation)
   improved from 11.0 per cent to 11.9 per cent.

*  Pro forma Marconi earnings per share were 7.4p (1998/99: 6.4p), an
   increase of 16 per cent. GEC's FRS 14 earnings per share were 1.8p
   (1998/99: 37.6p).

*  Group operating cash flow increased by 41 per cent to £428 million
   (1998/99: £303 million).

*  New Marconi dividend guidelines gives an interim dividend of 1.8p per
   share.

*  Reconstruction of GEC and the merger of the defence business with British
   Aerospace - resulting in GEC shareholders receiving BAe shares and CALS -
   on schedule for completion on 29 November 1999.


Commenting on the Results, George Simpson, Chief Executive, said:

'The heavy rationalisation and refocusing stage is over; our global
communications platform is established; and communications growth is
accelerating. In a few days time, Marconi won't just hit the ground running,
it'll take off as Europe's brightest technology company.'

ENQUIRIES

Media enquiries: Martin Sixsmith
Telephone: [phone]
e-mail: [e-mail]

Analyst/investor enquiries: Alasdair Jeffrey
Telephone: [phone]
e-mail: [e-mail]

A presentation of GEC's 1999/2000 Interim Results to investors and analysts
will be held at 9:00 am on Thursday 25 November. The presentation can be
viewed live on our website at www.gec.com or you can listen to the
presentation by dialling + 44 181 781 0576 and quoting 'Lord Simpson'. A
webcast and copies of the slides and speeches from the presentation will also
be available on the website.

1999/2000 INTERIM STATEMENT

The General Electric Company, p.l.c., ('GEC') announces interim results for
the six months to 30 September 1999 - the Group's last set of results before
becoming  Marconi plc.

The GEC interim results will be sent to shareholders and will constitute
Supplementary Listing Particulars for Marconi plc.


GROUP OVERVIEW

In the six months to 30 September 1999, GEC continued its transformation into
a major international group concentrating on the high growth communications
and information technology markets. The strength of the Group's first half
performance reinforces this strategic direction.

Turnover for the Group ('Marconi'), excluding Electronic Systems ('the defence
business'), rose by 40 per cent to £2,521 million. The Group's reported
turnover, which includes the contribution of the defence business, increased
by 30 per cent to £4,370 million, from £3,352 million for the corresponding
period last year.

Operating profit before exceptional items and goodwill amortisation for
Marconi rose to £299 million from £198 million last year. On a like-for-like
basis this was an increase of 10 per cent. On the same basis, operating profit
before exceptional items and goodwill amortisation of the Communications
division increased by 27 per cent to £193 million.

Return on Sales, before exceptional items and goodwill amortisation, for
Marconi increased from 11.0 per cent to 11.9 per cent.

On a pro forma basis, earnings per share for Marconi were 7.4p (1998/99:
6.4p), an increase of 16 per cent. Reported earnings per share before
exceptional items and goodwill amortisation were 10.7p (1998/99: 11.4p or
10.5p adjusting for the treatment of Alstom as a trade investment). These
results were achieved despite interest costs being at a peak after the
acquisitions of Reltec and Fore Systems and before the defence business
demerger.

The Research & Development investment of the Marconi businesses rose to £207
million (1998/99: £150 million), an increase of 38 per cent or 13 per cent on
a like-for-like basis. This is in line with the Group's stated strategy to
increase R&D spending in line with the increase in sales.

Under the new dividend guidelines, the dividend will be covered broadly 3.25
times by EPS before exceptional items and goodwill amortisation, and will be
paid on the basis of approximately one-third interim and two-thirds final. An
interim dividend of 1.8p per share has been declared, payable on 4 February
2000. Subject to completion of the defence demerger, GEC shareholders will
also receive for each GEC share approximately 0.42 of a British Aerospace new
ordinary share and CALS (Capital Amortising Loan Stock) valued at
approximately 13.4p.

STRATEGIC DEVELOPMENTS

The first half of the 1999/2000 financial year saw GEC make very significant
strides in achieving its stated strategic objectives. The rationalisation and
refocusing of the Group concludes with the completion of the defence demerger.
The Group has built a global business platform as a high technology, high
margin, high growth company through the acquisition and integration of Reltec
Corporation, Fore Systems and RDC. From this platform, the Group is entering a
new development phase of rapid growth.

Refocusing complete

On 3 November 1999, GEC shareholders voted in favour of the proposals to
reconstruct GEC and merge the Electronic Systems business with British
Aerospace. The transaction will be completed according to schedule on 29
November, allowing trading in the shares of Marconi plc on the London Stock
Exchange to commence on 30 November 1999.

Following a detailed review of the Capital division, a number of non-core
businesses are to be sold. The disposals of Avery Berkel, Woods Air Movement
and EASAMS are expected to be completed by the end of the current financial
year, realising significant value for the Group.

Global business platform in place

On 9 April 1999, the Group completed the acquisition of Reltec Corporation, a
leader in telecommunication network equipment, particularly in the high growth
market for Access products in the US. Access products offer broadband
solutions to telecommunication companies faced with network capacity
constraints (resulting from the dramatic growth in data, video and voice
traffic) over the 'local loop' - the last mile connection to residential and
business subscribers. The acquisition brought GEC an established blue-chip
North American customer base, technical expertise and enhanced North American
distribution, as well as strengthening its position as the leader in optical
networking.

On 17 June 1999, GEC added  broadband switching  to its communications product
portfolio with the acquisition of Fore Systems, a leading global supplier of
high performance Internet switching equipment. This equipment is used in the
backbone of some of the largest enterprise and Internet service provider
networks in the world and are recognised in the industry for their ability to
handle the stringent and dramatic capacity, scaling, and resiliency
requirements of today's rapidly growing Internet. In addition, Fore Systems'
products support the advanced 'Quality of Service' and traffic management
necessary to deliver a scalable multiservice switching and routing solution
for the emerging New Public Network. Fore Systems also provides GEC with
access to the high growth enterprise networking market.

The acquisition of Israeli-based RDC in August complemented Marconi
Communications' growing portfolio of Access and Internet Protocol solutions
with the addition of an innovative Wireless Internet Protocol Local Loop
system. This system enables telecom operators to provide residential and
commercial users with voice-over-IP, data, and Internet access at speeds in
excess of 3Mb/s - more than 25 times faster than ISDN.

OUTLOOK

With the Group's refocusing effectively completed and the global
communications business now established, Marconi plc is strongly positioned to
participate in the rapid growth of its markets to deliver like-for-like
performance improvement.


REVIEW OF OPERATIONS

COMMUNICATIONS

Marconi Communications has been integrated sequentially with Reltec
Corporation, RDC and then Fore Systems to create a customer-focused structure
to take advantage of the increasing worldwide demand for communications and
data networking solutions. The Communications division has been divided into
three businesses - Communications, Services and Mobile. This structure will
position the business to capture technology synergies and realise cross-
selling opportunities.

The Group's communications sales, including the contributions of Reltec
Corporation and Fore Systems for part of the reporting period, increased by 88
per cent or 17 per cent on a like-for-like basis. This growth is a reflection
of increasing demand for Marconi Communications' world leading optical
networks, access and broadband switching equipment portfolios and higher
value-
added network support services.

Operating profit before exceptional items and goodwill amortisation grew by 91
per cent, or 27 per cent like-for-like. Return on Sales, before exceptional
items and goodwill amortisation, increased from 13.2 per cent to 13.4 per
cent, a good performance in view of the initial lower  margins of the acquired
businesses.

SYSTEMS

The Systems businesses took a number of actions to improve their competitive
positions during the reporting period.

Systems sales increased by 11 per cent to £760 million (1998/99: £683
million), with a strong contribution from businesses acquired last financial
year by Picker and Gilbarco. Operating profit before exceptional items and
goodwill amortisation rose by 13 per cent to £77 million (1998/99: £68
million).

Picker launched its next generation, multi-slice CT (Computed Tomography)
scanner, which combines technology from Picker and the recently acquired CT
business of Elscint.

Picker increased sales by 19 per cent or 8 per cent on a like-for-like basis
to £455 million (1998/99: £381 million).

Gilbarco announced the introduction of four new products, including a new
point-of-sale product featuring touch screen interfaces.

Gilbarco sales were flat at £195 million. This was largely a reflection of a
like-for-like decline of 12 percent following above-trend market growth over
the past two years caused by legislative changes in the US, offset by the
contribution of Logitron, acquired in February 1999.

Videojet introduced a number of product extensions and plans to launch next-
generation inkjet carton marking technology in the second half of this year.

Videojet sales rose 3 per cent to £110 million (1998/99: £107 million). New
products launched in the first half should contribute to a stronger second
half.

CAPITAL

Sales for the Capital division were £346 million (1998/99: £373 million), a
decline of 7 per cent.

GEC's share of the sales of the GDA joint venture fell by 3 per cent to £126
million, reflecting continued price deflation caused by the strength of
sterling and the removal of  recommended retail pricing.

Sales of the Telecoms Investment businesses decreased by 29 per cent to £35
million (1998/99: £49 million). This was largely a result of a contraction of
the Far East payphones market and lower sterling contribution from Comstar in
Russia.

Operating profit before exceptional items and goodwill amortisation for
Capital increased by 29 per cent to £40 million (1998/99: £31 million). The 18
per cent decline in the like-for-like operating profit was more than offset by
profits on the disposal of surplus properties and a stronger contribution from
EEV.

ELECTRONIC SYSTEMS

Electronic Systems sales increased by 19 per cent to £1,849 million (1998/99:
£1,555 million), with strong contributions from the Avionics and North America
businesses, particularly Tracor which was acquired in June 1998. Operating
profit before exceptional items and goodwill amortisation increased by 1 per
cent.


OTHER FINANCIAL ITEMS

INTEREST

Interest income in 1998 of £55 million became an expense of  £49 million in
1999. This was caused by borrowings made for the acquisition of Elscint,
Reltec Corporation and Fore Systems. The defence demerger will transfer debt
of around £1.5 billion to British Aerospace. Our expectation is that, after
the defence demerger is completed at the end of November, the Group interest
expense, based on the current Group structure, will be around £110 million for
the full year.

EXCEPTIONAL ITEMS

Exceptional items of £75 million included £29 million of Year 2000 expenditure
and £46 million of restructuring costs, of which Electronic Systems accounted
for £17 million and £28 million respectively.

TAXATION

The tax charge of £106 million represents an effective tax rate of 31 per
cent, after adjusting for goodwill amortisation.

EARNINGS PER SHARE

Proforma earnings per share of Marconi, adjusting 1998/99 figures to treat the
investment in Alstom and the results of Reltec and Fore on a consistent basis
with 1999/00, increased 16 per cent to 7.4p from 6.4p.

CASH FLOW

Operating cash flow over the reporting period was an inflow of £428 million,
compared with an inflow for the corresponding period last year of £303
million.

Non-operating cash flow was an outflow of £4,314 million compared with an
outflow of £399 million last year. The net cost of acquisitions and disposals,
principally the acquisitions of Fore Systems and Reltec Corporation, was
£4,011 million.

CAPITAL EXPENDITURE

Capital expenditure for the period was £131 million, an increase of £5 million
over last year. This figure represents 108 per cent of depreciation charged
against profit.

YEAR 2000

All GEC businesses expect to be adequately prepared for any computer or
systems problems arising from the Year 2000 date change.

Preparing for Year 2000 has been an integral part of the due diligence
performed during merger and acquisition activity and all of the acquired
businesses have been successfully integrated into GEC's programmes.

Mitigation of safety related and business critical risks is substantially
complete and the major Year 2000 related business systems are now operational.
The Group has maintained close contact with its customers, partners, suppliers
and service providers to understand their readiness, however no assurance can
be given that third parties will be able to meet their commitments. All
businesses have developed operating plans detailing steps to be taken during
the date change period and contingency plans for unexpected problems.

The total Year 2000 cost in the 12 months to 31 March 2000 is estimated to be
approximately £40 million. This increase on the previous estimate follows the
acquisitions of Reltec, Fore and RDC.

POST BALANCE SHEET EVENT

On 1 November, GEC announced an agreement for Marconi Communications to
purchase Nokia's SDH / DWDM (Synchronous Digital Hierarchy / Dense Wave
Division Multiplexing) transport equipment business for £46 million. An
additional payment of up to £21 million is payable dependent on the future
performance of the business.

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