GE Estimates Third-Quarter Financial Effect of Terrorist Attack

Business Wire, Sept 14, 2001

Business Editors

FAIRFIELD, Conn.--(BUSINESS WIRE)--Sept. 14, 2001

General Electric will incur losses through its Employers Reinsurance Corporation (ERC) as a result of the terrorist attacks against the World Trade Center, and the losses will affect the Company's third-quarter results.

ERC's preliminary estimate of its net losses is approximately $600 million, or approximately $400 million after taxes. Before the attacks, GE was on track to meet the First Call consensus estimate for third quarter of 37 cents per share, up 16 percent from last year. However, ERC's losses could reduce third-quarter net income by 4 cents to 33 cents per share, up 3 percent from 2000.

"Our insurance losses are merely monetary, and they cannot compare with those suffered by the victims of this shameful attack against the World Trade Center," said GE Chairman and CEO Jeff Immelt. "GE and its employees are doing whatever they can to help, from providing emergency medical and power generation equipment to donating to blood drives and disaster relief funds. ERC has contacted all of its affected clients and is giving their claims first priority.

"We also want to give investors some measure of assurance. However, there is still uncertainty about the import of this extraordinary event. We are providing the best estimates we can make at this time."

ERC is among the numerous companies providing insurance and reinsurance coverage of the World Trade Center and the four aircraft used in Tuesday's terrorist acts. ERC's exposure reflects its share of industry coverage and is in line with overall industry expectations. ERC's viability is not affected, nor does it expect its industry ratings to be affected.

Immelt said, "GE's fundamental financial strengths are unchanged. Our concern right now is to help people get through this terrible tragedy."

GE (NYSE:GE), with 2000 revenues of $130 billion, is a diversified technology, services and manufacturing company with a commitment to achieving customer success. GE operates in more than 100 countries and employs 313,000 people worldwide. For more information, visit the company's Web site at http://www.ge.com.

Caution Concerning Forward-Looking Statements

This document includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global economic, business, competitive market and regulatory factors. More detailed information about those factors is contained in GE's filings with the Securities and Exchange Commission.