United
States Securities and Exchange Commission
WASHINGTON,
D.C. 20549
FORM
10-K
(Mark
One)
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þ Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the fiscal year ended December 31, 2007
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or
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¨ Transition
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the transition period from ___________to ___________
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Commission
file number 1-35
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General
Electric Company
(Exact
name of registrant as specified in
charter)
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New
York
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14-0689340
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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3135
Easton Turnpike, Fairfield, CT
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06828-0001
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203/373-2211
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(Address
of principal executive offices)
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(Zip
Code)
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(Telephone
No.)
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Securities
Registered Pursuant to Section 12(b) of the Act:
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Title
of each class
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Name
of each exchange on which registered
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Common
stock, par value $0.06 per share
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New
York Stock Exchange
Boston
Stock Exchange
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Securities
Registered Pursuant to Section 12(g) of the Act:
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(Title
of class)
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Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes þ No ¨
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes ¨ No þ
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 þ 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. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer þ
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Accelerated
filer ¨
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Non-accelerated
filer ¨
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Smaller
reporting company ¨
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes ¨ No þ
The
aggregate market value of the outstanding common equity of the registrant as of
the last business day of the registrant’s most recently completed second fiscal
quarter was $392.2 billion. Affiliates of the Company beneficially own, in the
aggregate, less than one-tenth of one percent of such shares. There were
9,985,669,000 shares of voting common stock with a par value of $0.06
outstanding at February 1, 2008.
DOCUMENTS
INCORPORATED BY REFERENCE
The
Annual Report to Shareowners for the fiscal year ended December 31, 2007 is
incorporated by reference in Parts I, II and III to the extent described
therein. The definitive proxy statement relating to the registrant’s Annual
Meeting of Shareowners, to be held April 23, 2008, is incorporated by reference
in Part III to the extent described therein.
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Page
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Part I
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Business
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3
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Risk
Factors
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16
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Unresolved
Staff Comments
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17
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Properties
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17
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Legal
Proceedings
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17
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Submission
of Matters to a Vote of Security Holders
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20
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Part II
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Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases
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of
Equity Securities
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20
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Selected
Financial Data
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21
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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21
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Quantitative
and Qualitative Disclosures About Market Risk
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21
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Financial
Statements and Supplementary Data
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21
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Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
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21
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Controls
and Procedures
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22
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Other
Information
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Part III
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Directors,
Executive Officers and Corporate Governance
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Executive
Compensation
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23
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Security
Ownership of Certain Beneficial Owners and Management and
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Related
Stockholder Matters
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23
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Certain
Relationships and Related Transactions, and Director
Independence
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Principal
Accounting Fees and Services
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Part IV
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Exhibits,
Financial Statement Schedules
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24
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31
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General
Unless
otherwise indicated by the context, we use the terms “GE,” “GECS” and “GE
Capital” on the basis of consolidation described in note 1 to the consolidated
financial statements on page 70 of the 2007 Annual Report to Shareowners of
General Electric Company (the Company). The financial section of such Annual
Report to Shareowners (pages 39 through 113 of that document) is described
in Part IV Item 15(a)(1) and set forth in Exhibit 13 of this 10-K Report
and is an integral part hereof. References in Parts I and II of this 10-K Report
are to the page numbers of the 2007 Annual Report to Shareowners. Also, unless
otherwise indicated by the context, “General Electric” means the parent company,
General Electric Company.
General
Electric’s address is 1 River Road, Schenectady, NY 12345-6999; we also maintain
executive offices at 3135 Easton Turnpike, Fairfield, CT
06828-0001.
We
are one of the largest and most diversified technology, media, and financial
services corporations in the world. With products and services ranging from
aircraft engines, power generation, water processing, and security technology to
medical imaging, business and consumer financing, media content and industrial
products, we serve customers in more than 100 countries and employ more than
300,000 people worldwide. Since our incorporation in 1892, we have
developed or acquired new technologies and services that have broadened
considerably the scope of our activities.
In
virtually all of our global business activities, we encounter aggressive and
able competition. In many instances, the competitive climate is characterized by
changing technology that requires continuing research and development, as well
as customer commitments. With respect to manufacturing operations, we believe
that, in general, we are one of the leading firms in most of the major
industries in which we participate. The NBC Television Network is one of four
major U.S. commercial broadcast television networks. We also compete in
syndicated broadcast television programming, cable/satellite television
programming activities and in the motion picture industry. The businesses in
which GECS engages are subject to competition from various types of financial
institutions, including commercial banks, thrifts, investment banks,
broker-dealers, credit unions, leasing companies, consumer loan companies,
independent finance companies and finance companies associated with
manufacturers.
This
document contains “forward-looking statements”- that is, statements
related to future, not past, events. In this context, forward-looking statements
often address our expected future business and financial performance, and often
contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,”
“seek,” or “will.” Forward-looking statements by their nature address matters
that are, to different degrees, uncertain. For us, particular uncertainties that
could adversely or positively affect our future results include: the behavior of
financial markets, including fluctuations in interest and exchange rates and
commodity and equity prices; the commercial and consumer credit environment; the
impact of regulation and regulatory, investigative and legal actions; strategic
actions, including acquisitions and dispositions; future integration of acquired
businesses; future financial performance of major industries which we serve,
including, without limitation, the air and rail transportation, energy
generation, media, real estate and healthcare industries; and numerous other
matters of national, regional and global scale, including those of a political,
economic, business and competitive nature. These uncertainties may cause our
actual future results to be materially different than those expressed in our
forward-looking statements. We do not undertake to update our forward-looking
statements.
Our
consolidated global revenues increased to $86.5 billion in 2007, compared with
$70.8 billion in 2006 and $60.9 billion in 2005. For additional information
about our geographic operations, see pages 51 and 52 of the 2007 Annual
Report to Shareowners.
Operating
Segments
Segment
revenue and profit information is presented on page 47 of the 2007 Annual Report
to Shareowners. Additional financial data and commentary on recent financial
results for operating segments are provided on pages 46-51 of that report
and in note 25 (pages 98 and 99) to the consolidated financial
statements.
Operating
businesses that are reported as segments include Infrastructure, Commercial
Finance, GE Money, Healthcare, NBC Universal and Industrial. There is
appropriate elimination of the net earnings of GECS and the effect of
transactions between segments to arrive at total consolidated data. A summary
description of each of our operating segments follows.
During
the fourth quarter of 2007, we transferred the Equipment Services business from
the Industrial segment to the Commercial Finance segment, where a portion of the
business is reported in Capital Solutions. Prior period information has been
reclassified to be consistent with the current organization.
We
also continue our longstanding practice of providing supplemental information
for certain businesses within the segments.
Infrastructure
Infrastructure
(33.5%, 30.9% and 30.5% of consolidated revenues in 2007, 2006 and 2005,
respectively) is one of the world’s leading providers of essential technologies
to developed, developing and emerging countries. Through products and
services in aviation, energy, oil and gas, transportation, and water and process
technologies, GE is helping to develop the infrastructure of countries all over
the world. Infrastructure also provides aviation financing as well as
energy and water investing, lending and leasing.
Our
operations are located in North America, Europe, Asia and South
America.
Aviation
and Aviation Financial Services
Aviation
produces, sells and services jet engines, turboprop and turbo shaft engines, and
related replacement parts for use in military and commercial aircraft. Our
military engines are used in a wide variety of aircraft including fighters,
bombers, tankers, helicopters and surveillance aircraft, as well as marine
applications, and our commercial engines power aircraft in all categories of
range: short/medium, intermediate and long-range, as well as executive and
regional aircraft. We also produce and market engines through CFM International,
a company jointly owned by GE and Snecma, a subsidiary of SAFRAN of France, and
the Engine Alliance, LLC, a company jointly owned by GE and the Pratt &
Whitney division of United Technologies Corporation. New engines are also being
designed and marketed in joint ventures with Rolls-Royce Group plc and Honda
Aero, Inc., a division of Honda Motor Co., Ltd.
Infrastructure
is party to collaboration agreements that share the financial results of certain
aircraft and marine engine lines and their related aero-derivatives.
Infrastructure collaboration agreements take the form of both joint ventures and
revenue sharing programs.
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Joint
ventures market and sell particular aircraft engine lines, but require
negligible direct investment because the venture parties conduct
essentially all of the development, production, assembly and aftermarket
support activities. Under these agreements, Aviation supplies certain
engine components and retains related intellectual property rights. The
CFM56 engine line is the product of CFM International and the GP7000
engine line is the product of Engine Alliance,
LLC.
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Revenue
sharing programs are a standard form of cooperation for specific product
programs in the aviation and aero-derivative industries. These businesses
are controlled by Infrastructure, but counterparties have an agreed share
of revenues as well as development and component production
responsibilities. At December 31, 2007, such counterparty interests ranged
from 3% to 49% of various programs; associated distributions are accounted
for as costs of production.
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On
May 4, 2007, Aviation acquired Smiths Aerospace from Smiths Group plc for
approximately $5.2 billion in cash. Smiths Aerospace is a $2.4 billion (sales)
global aerospace systems and equipment company that provides airborne platform
computing systems, power generation and distribution products, mechanical
actuation products and landing gear, plus various engine components and a global
customer services organization.
We
provide maintenance, component repair and overhaul services (MRO), including
sales of replacement parts, for many models of engines, including repair and
overhaul of engines manufactured by competitors. These MRO services are often
provided under long-term maintenance contracts.
The
worldwide competition in aircraft jet engines and MRO (including parts sales) is
intense. Both U.S. and export markets are important. Product development cycles
are long and product quality and efficiency are critical to success. Research
and development expenditures are important in this business, as are focused
intellectual property strategies and protection of key aircraft engine design,
manufacture, repair and product upgrade technologies. Our products
and services are subject to a number of regulatory standards.
Potential
sales for any engine are limited by, among other things, its technological
lifetime, which may vary considerably depending upon the rate of advance in
technology, the small number of potential customers and the limited number of
relevant airframe applications. Aircraft engine orders tend to follow military
and airline procurement cycles, although these cycles differ from each
other.
Aviation
Financial Services is a global commercial aviation financial services business
that offers a broad range of financial products to airlines, aircraft operators,
owners, lenders, investors and airport developers. Financial products include
leases, aircraft purchasing and trading, loans, engine/spare parts financing,
fleet planning and financial advisory services. We operate in a highly
competitive environment. Our competitors include aircraft manufacturers, banks,
financial institutions, and other finance and leasing companies. Competition is
based on lease rates and terms, as well as aircraft delivery dates, condition
and availability.
Energy
and Energy Financial Services
Energy
serves power generation, industrial, government and other customers worldwide
with products and services related to energy production, distribution and
management. We offer wind turbines as part of our renewable energy portfolio,
which also includes solar technology. We also sell aircraft engine derivatives
for use as industrial power sources. Gas turbines and generators are used
principally in power plants for generation of electricity and for industrial
cogeneration and mechanical drive applications. We are a leading provider of
Integrated Gasification Combined Cycle (IGCC) technology design and development.
IGCC systems convert coal and other hydrocarbons into synthetic gas that, after
cleanup, is used as the primary fuel for gas turbines in combined-cycle systems.
IGCC systems produce fewer air pollutants compared with traditional pulverized
coal power plants. We sell steam turbines and generators to the electric utility
industry and to private industrial customers for cogeneration applications.
Nuclear reactors, fuel and support services for both new and installed boiling
water reactors are offered through a joint ventures with Hitachi and Toshiba. We
provide our customers with total solutions to meet their needs through a
complete portfolio of aftermarket services, including equipment upgrades,
long-term maintenance service agreements, repairs, equipment installation,
monitoring and diagnostics, asset management and performance optimization tools,
remote performance testing and Dry Low NOx (DLN) tuning. We continue to invest
in advanced technology development that will provide more value to our customers
and more efficient solutions that comply with today’s strict environmental
regulations.
Worldwide
competition for power generation products and services is intense. Demand for
power generation is global and, as a result, is sensitive to the economic and
political environment of each country in which we do business. The balance of
regional growth and demand side management are important factors to evaluate as
we plan for future development.
Energy
Financial Services offers structured equity, debt, leasing, partnership
financing, project finance and broad-based commercial finance to the global
energy and water industries and invests in operating assets in these industries.
During 2007, we acquired a controlling interest in Regency Energy Partners LP, a
midstream master limited partnership engaged in the gathering, processing,
transporting and marketing of natural gas and gas liquids. We operate in a
highly competitive environment. Our competitors include banks, financial
institutions, energy and water companies, and other finance and leasing
companies. Competition is primarily based on price, that is interest rates and
fees, as well as deal structure and terms. As we compete globally, our success
is sensitive to the economic and political environment of each country in which
we do business.
Oil
& Gas
Oil
& Gas supplies technology-based equipment and services for the entire oil
and gas industry - from drilling and
completion to production, transportation, refining, processing, petrochemicals
and plastics. We offer a wide range of surface and subsea drilling
and production systems, equipment for floating production platforms,
compressors, turbines, turboexpanders and industrial power generation equipment.
As a global business, Oil & Gas supports the world’s leading national and
international oil companies with latest technology products and services that
drive improvements in productivity, efficiency and environmental
performance.
On
February 23, 2007, Oil & Gas acquired Vetco Gray, one of the world’s leading
suppliers of drilling, completion and production equipment for onshore and
subsea applications in oil and gas fields. The business supplies flow control
valves (known as “Christmas trees”), control systems, wellheads, manifolds,
risers and associated after-market services.
The
global demand for oil and gas, coupled with a geographic imbalance between
supply and demand, is promoting investment in the exploration, production,
transportation and processing segments of the industry.
Transportation
Transportation
provides technology solutions for customers in a variety of industries including
railroad, transit, mining, oil and gas, power generation and marine. We serve
customers in more than 100 countries.
Transportation
manufactures high-horsepower diesel-electric locomotives, including the
Evolution Series™, the most technologically advanced and most fuel
efficient locomotive, which meets or exceeds the U.S. Environmental Protection
Agency’s Tier II requirements. We also offer leading drive technology solutions
to the mining, transit, marine and stationary, and drilling industries. Our
motors operate in thousands of applications, from electrical drives systems for
large haulage trucks used in the mining industry to transit cars and drilling
rigs, and our engines are used for marine power as well as stationary power
generation applications. We also provide gearing technology for critical
applications such as wind turbines.
Transportation
also provides a portfolio of services offerings, designed to improve fleet
efficiency and reduce operating expenses, including repair services, locomotive
enhancements, modernizations, and information-based services like remote
monitoring and diagnostics. We provide train control products, railway
management services, and signaling systems to increase service levels, optimize
asset utilization, and streamline operations for railroad owners and operators.
We deliver leading edge tools that improve asset availability and reliability,
optimize network planning, and control network execution to plan.
Water
Water
offers water treatment solutions for industrial and municipal water systems
including the supply and related services of specialty chemicals, water
purification systems, pumps, valves, filters and fluid handling equipment for
improving the performance of water, wastewater and process systems, including
mobile treatment systems and desalination processes. During 2006, we acquired
ZENON Environmental Inc., a global leader in advanced membranes for water
purification and wastewater treatment.
For
information about orders and backlog, see page 48 of the 2007 Annual Report to
Shareowners.
Commercial
Finance
Commercial
Finance (19.8%, 20.3% and 20.0% of consolidated revenues in 2007, 2006 and 2005,
respectively) offers a broad range of financial services worldwide. We have
particular mid-market expertise and offer loans, leases and other financial
services to customers, including manufacturers, distributors and end-users for a
variety of equipment and major capital assets. These assets include
industrial-related facilities and equipment; commercial and residential real
estate; vehicles; corporate aircraft; and equipment used in many industries,
including the construction, manufacturing, transportation, telecommunications
and healthcare industries.
During
2007, we made a number of acquisitions, the most significant of which were
Trustreet Properties, Inc.; Diskont und Kredit AG and Disko Leasing GmbH (DISKO)
and ASL Auto Service-Leasing GmbH (ASL), the leasing businesses of KG Allgemeine
Leasing GmbH & Co.; and Sanyo Electric Credit Co., Ltd.
We
operate in a highly competitive environment. Our competitors include commercial
banks, investment banks, leasing companies, financing companies associated with
manufacturers, and independent finance companies. Competition related to our
lending and leasing operations is based on price, that is interest rates and
fees, as well as deal structure and terms. Profitability is affected not only by
broad economic conditions that affect customer credit quality and the
availability and cost of capital, but also by successful management of credit
risk, operating risk and market risks such as interest rate and currency
exchange risks. Success requires high quality risk management systems, customer
and industry specific knowledge, diversification, service and distribution
channels, strong collateral and asset management knowledge, deal structuring
expertise and the ability to reduce costs through technology and
productivity.
Our
headquarters are in Norwalk, Connecticut with offices throughout North America,
South America, Europe, Australia and Asia.
Capital
Solutions
Capital
Solutions offers a broad range of financial services worldwide, and has
particular mid-market expertise, offering loans, leases, inventory finance,
transport solutions and other financial services to customers, including
manufacturers, dealers and end-users for a variety of equipment and major
capital assets. These assets include retail facilities; vehicles; corporate
aircraft; and equipment used in many industries, including the construction,
transportation, technology, and manufacturing industries.
Real
Estate
Real
Estate offers a comprehensive range of capital and investment solutions,
including equity capital for acquisition or development, as well as fixed and
floating rate mortgages for new acquisitions or re-capitalizations of commercial
real estate worldwide. Our business finances, with both equity and loan
structures, the acquisition, refinancing and renovation of office buildings,
apartment buildings, retail facilities, parking facilities and industrial
properties. Our typical real estate loans are intermediate term, may be either
senior or subordinated, fixed or floating-rate, and are secured by existing
income-producing commercial properties. Certain of our originations of low
loan-to-value loans are conducted for term securitization within one year;
certain of our equity investments, including properties we acquire for
investment, are sold under favorable market conditions. We invest in, and
provide restructuring financing for, portfolios of mortgage loans, limited
partnerships and tax-exempt bonds.
In
the normal course of our business operations, we sell certain real estate equity
investments when it is economically advantageous for us to do so. However, as
real estate values are affected by certain forces beyond our control (e.g.,
market fundamentals and demographic conditions), it is difficult to predict with
certainty the level of future sales or sales prices. Rental income generally
approximates operating expenses, which include depreciation and
amortization.
GE
Money
GE
Money (14.5%, 13.0% and 12.5% of consolidated revenues in 2007, 2006 and 2005,
respectively) is a leading provider of financial services to consumers and
retailers in over 50 countries around the world. We offer a full range of
innovative financial products to suit customers’ needs. These products include
private-label credit cards; personal loans; bank cards; auto loans and leases;
mortgages; debt consolidation; home equity loans; corporate travel and
purchasing cards; deposit and other savings products; small and medium
enterprise lending; and credit insurance on a global basis. In September 2007,
we committed to a plan to sell our Japanese personal loan business (Lake) and in
December 2007, we sold our U.S. mortgage business (WMC).
In
2007, as part of our continued global expansion, we made a number of
acquisitions, the most significant of which was a 33% stake in Bank of Ayudhya
and private label credit card portfolios of Chevron and Lowe’s.
Our
operations are subject to a variety of bank and consumer protection regulations.
Further, a number of countries have ceilings on rates chargeable to consumers in
financial service transactions. We are subject to competition from various types
of financial institutions including commercial banks, leasing companies,
consumer loan companies, independent finance companies, manufacturers’ captive
finance companies, and insurance companies. Industry participants compete on the
basis of price, servicing capability, promotional marketing, risk management,
and cross selling. The markets in which we operate are also subject to the risks
from fluctuations in retail sales, interest and currency exchange rates, and the
consumer’s capacity to repay debt.
Our
headquarters are currently in Stamford, Connecticut and our operations are
located in North America, South America, Europe, Australia and Asia. In February
2008, we announced that we will move our headquarters to London,
England.
Healthcare
Healthcare
(9.8%, 10.9% and 11.0% of consolidated revenues in 2007, 2006 and 2005,
respectively) has expertise in medical imaging and information technologies,
medical diagnostics, patient monitoring systems, disease research, drug
discovery and biopharmaceutical manufacturing technologies. We are dedicated to
predicting and detecting disease earlier, monitoring its progress and informing
physicians, helping them to tailor individual treatment for individual patients.
Healthcare manufactures, sells and services a wide range of medical equipment:
diagnostic imaging systems including equipment for magnetic resonance (MR),
computed tomography (CT), positron emission tomography (PET), nuclear and X-ray
imaging. Clinical systems including patient monitoring, diagnostic cardiology,
ultrasound, bone densitometry, anesthesiology and oxygen therapy, neonatal and
critical care devices. Medical diagnostics and life sciences products include
diagnostic imaging agents used in medical scanning procedures, protein
separation products including chromatography purification systems used in the
manufacturing of bio-pharmaceuticals, and high-throughput systems for
applications in genomics, proteomics and bioassays. During 2006, we acquired IDX
Systems Corporation, a leading healthcare information technology provider and
Biacore International AB, a leading provider of systems for protein interaction
analysis. We sell products and product services to hospitals, medical
facilities, pharmaceutical and biotechnology companies and to the life science
research market worldwide. Our product services include remote diagnostic and
repair services for medical equipment manufactured by GE and by others, as well
as computerized data management and customer productivity services.
We
compete with a variety of U.S. and non-U.S. manufacturers and services
operations. Technological competence and innovation, excellence in design, high
product performance, quality of services and competitive pricing are among the
key factors affecting competition for these products and services. Throughout
the world, we play a critical role in delivering new technology to improve
patient outcomes and productivity tools to help control healthcare
costs.
Our
products are subject to regulation by numerous government agencies, including
the FDA, and various laws apply to claims submitted under Medicare, Medicaid or
other federally-funded healthcare programs.
For
information about orders and backlog, see page 50 of the 2007 Annual Report to
Shareowners.
Our
headquarters are in Chalfont St. Giles, United Kingdom and our operations are
located in North America, Europe, Asia, Australia and South
America.
NBC
Universal
NBC
Universal (8.9%, 10.7% and 10.8% of consolidated revenues in 2007, 2006 and
2005, respectively) is one of the world’s leading media and entertainment
companies in the development, production and marketing of entertainment, news
and information to a global audience. Formed in 2004 through the combining of
NBC and Vivendi Universal Entertainment, NBC Universal owns and operates a
valuable portfolio of news and entertainment networks, a premier motion picture
company, significant television production operations, a leading television
stations group and world-renowned theme parks. NBC Universal is 80-percent owned
by General Electric and 20-percent owned by Vivendi S.A. NBC Universal is
principally engaged in the broadcast of network television services to
affiliated television stations within the United States; the production and
distribution of television programs and motion pictures; the operation, under
licenses from the U.S. Federal Communications Commission (FCC), of television
stations; the operation of several cable/satellite television networks around
the world; the operation of theme parks; and investment and programming
activities in digital media and the Internet. The NBC television network is one
of four major U.S. commercial broadcast television networks and serves 230
affiliated stations within the United States. Telemundo is our U.S.
Spanish-language broadcast television network. At December 31, 2007, we owned
and operated 26 television stations. Broadcasting operations of the NBC
television network, the Telemundo network and the company’s owned stations are
subject to FCC regulation. Our cable/satellite television network operations
principally include USA Network, Bravo, CNBC, the SciFi Channel, MSNBC, Oxygen,
the Sundance Channel, UniHD, Chiller, Sleuth, mun2 and news, information and
entertainment channels across Europe, Asia and Latin America. We have exclusive
U.S. television rights to the 2008, 2010 and 2012 Olympic Games, National
Football League Sunday Night Football and the Super Bowl in 2009 and
2012.
NBC
Universal is subject to a wide range of factors, which could adversely affect
our operations. Our broadcast networks, cable television networks and television
stations are subject to advertising patterns and changes in viewer taste and
preference that can be unpredictable or unforeseen. In addition, future revenues
in these properties are dependent upon our ability to obtain, renew or
renegotiate long-term programming contracts, including event-based sports
programming and contracts for the distribution of our programming to
cable/satellite operators. Our television and motion pictures production and
distribution businesses are affected by the timing and performance of releases
in the theatrical, home entertainment and television markets. Technological
advances like digital video recorders, Internet streaming and electronic
sell-through offer entertainment options through new media, introducing
uncertainty to our operations. Other technologies enable the unauthorized
copying and distribution of our motion pictures and television programming,
increasing the risk of piracy. We continue to devote substantial resources to
protect our intellectual property against unauthorized use.
NBC
Universal’s headquarters are in New York, New York, with operations throughout
North America, Europe, South America and Asia.
Industrial
Industrial
(10.3%, 11.7% and 12.5% of consolidated revenues in 2007, 2006 and 2005,
respectively) produces and sells products including consumer appliances,
industrial equipment and related services. GE Supply, a network of electrical
supply houses, was also in the Industrial segment until its sale in the third
quarter of 2006. Advanced Materials, a manufacturer of silicone- and
quartz-based materials, was also in the Industrial segment until its sale in the
fourth quarter of 2006. Prior to the sale of our Plastics business in August
2007, we also manufactured and sold plastics and structured products. Plastics
and Advanced Materials results are reported in discontinued operations for all
periods presented.
Our
operations are located in North America, Europe, Asia and South
America.
Consumer
& Industrial
Consumer
& Industrial sells products that share several characteristics - competitive
design, efficient manufacturing and effective distribution and service. Strong
global competition rarely permits premium pricing, so cost control, including
productivity, is key. Despite pricing pressures on many of our products, we also
invest in the development of differentiated, premium products that are more
profitable. While some Consumer & Industrial products are primarily directed
to consumer applications (major appliances, for example), and some primarily to
industrial applications (switchgear, for example), others are directed to both
markets (lighting, for example).
We
sell and service major home appliances including refrigerators, freezers,
electric and gas ranges, cooktops, dishwashers, clothes washers and dryers,
microwave ovens, room air conditioners, and residential water systems for
filtration, softening and heating. Brands are Monogram®, GE Profile™, GE® and
Hotpoint®.
We
manufacture certain products, and also source finished product and component
parts from third-party global manufacturers. A large portion of our appliances
sales are through a variety of retail outlets for replacement of installed
units. Residential building contractors installing units in new construction are
our second major U.S. channel. We offer the largest OEM service organization in
the appliances industry, providing in-home repair, extended service plans and
warranty administration. We also manufacture and sell a variety of lamp products
for commercial, industrial and consumer markets, including full lines of
incandescent, halogen, fluorescent, high-intensity discharge, light-emitting
diode, automotive and miniature products.
Consumer
& Industrial also provides integrated electrical equipment and systems used
to distribute, protect and control energy and equipment. We manufacture and
distribute electrical distribution and control products including transformers,
meters, circuit breakers, panel boards and general purpose controls that are
used to distribute and manage power in a variety of residential, commercial,
consumer and industrial applications. In addition, we design and manufacture
motors and control systems used in industrial applications primarily for oil and
gas extraction and mining. We also provide customer-focused solutions centered
on the delivery and control of electric power, and market a wide variety of
commercial lighting systems.
The
aggregate level of economic activity in markets for such products and services
generally lags overall economic slowdowns as well as subsequent recoveries. In
the United States, industrial markets are undergoing significant structural
changes reflecting, among other factors, increased international competition and
continued commodity cost pressures.
Enterprise
Solutions
Enterprise
Solutions offers protection and productivity solutions to some of the most
pressing issues that industries face: safe facilities, plant automation, power
control and sensing applications in the operating environment. From home to
industry to national security, our technology covers the full spectrum of
security solutions, including card access systems, high-tech video monitoring,
intrusion and fire detection, real estate and property control, and explosives
and narcotics detection. We design and manufacture equipment and systems that
enable customers to monitor, protect, control and ensure the safety of their
critical applications. These products include precision sensors for temperature,
flow rate, pressure, humidity, gas, infrared and ultrasonic applications;
high-quality handheld and portable field calibrators; equipment for detection of
material defects; stand-alone measurement instrumentation; and systems that
provide the end-to-end solutions necessary to validate or certify vital
commercial and industrial processes. We deliver automation hardware and software
designed to help users reduce costs, increase efficiency and enhance
profitability through a diverse array of capabilities and products, including
controllers, embedded systems, advanced software, motion control, computer
numerical controls, operator interfaces, industrial computers, and lasers. We
also provide products and services to protect and optimize assets such as
generators, transmission lines and motors, to ensuring secure wireless data
transmission and uninterruptible power.
Our
products and services are sold to a diverse worldwide commercial and residential
customer base in the transportation, industrial, pharmaceutical and healthcare
markets. Our business environment is characterized by technological innovation
and market growth. Our competitors include technology-driven suppliers of the
same, as well as other functionally equivalent products and
services.
Discontinued
Operations
Discontinued
operations comprised Lake; WMC; Plastics; Advanced Materials; GE Life, our
U.K.-based life insurance operation; the property and casualty insurance and
reinsurance businesses and the European life and health operations of GE
Insurance Solutions Corporation (GE Insurance Solutions); and Genworth
Financial, Inc. (Genworth), our formerly wholly-owned subsidiary that conducted
most of our consumer insurance business, including life and mortgage insurance
operations.
Geographic
Data
Geographic
data are reported in note 25 to the consolidated financial statements on
page 98 and 99 of the 2007 Annual Report to Shareowners.
Additional
financial data about our geographic operations is provided on page 51 and
52 of the 2007 Annual Report to Shareowners.
Orders
Backlog
See
pages 48, 50 and 62 of the 2007 Annual Report to Shareowners for
information about our backlog of unfilled orders.
Research
and Development
Total
expenditures for research and development were $4,075 million, $3,480 million
and $3,235 million in 2007, 2006 and 2005, respectively. Of these amounts,
$3,009 million in 2007 was GE-funded ($2,790 million in 2006 and $2,551 million
in 2005); and $1,066 million in 2007 was funded by customers ($690 million in
2006 and $684 million in 2005), principally the U.S. government.
Infrastructure’s Aviation business accounts for the largest share of GE’s
research and development expenditures with funding from both GE and customer
funds. Healthcare and Infrastructure’s Energy business also made significant
expenditures funded primarily by GE.
Environmental
Matters
Our
operations, like operations of other companies engaged in similar businesses,
involve the use, disposal and cleanup of substances regulated under
environmental protection laws.
We
are involved in a sizable number of remediation actions to clean up hazardous
wastes as required by federal and state laws. Such statutes require that
responsible parties fund remediation actions regardless of fault, legality of
original disposal or ownership of a disposal site. Expenditures for site
remediation actions amounted to approximately $0.2 billion in both 2007 and
2006. We presently expect that such remediation actions will require average
annual expenditures in the range of $0.2 billion to $0.3 billion over the next
two years.
The
U.S. Environmental Protection Agency (EPA) ruled in February 2002 that
approximately 150,000 pounds of polychlorinated biphenyls (PCBs) must be dredged
from a 40-mile stretch of the upper Hudson River in New York state. On
November 2, 2006, the U.S. District Court for the Northern District of
New York approved a consent decree entered into between GE and the EPA that
represents a comprehensive framework for implementation of the EPA’s 2002
decision to dredge PCB-containing sediments in the upper Hudson River. The
dredging will be performed in two phases with an intervening peer review of
performance after phase 1. Under this consent decree, we have committed up
to $0.1 billion to reimburse the EPA for its past and future project oversight
costs and agreed to perform the first phase of dredging. We further committed
that, subject to future agreement with the EPA about completion of dredging
after completion of phase 1 and the peer review, we will be responsible for
further costs, including costs of phase 2 dredging. Our Statement of
Financial Position as of December 31, 2007 and 2006, included
liabilities for the estimated costs of this remediation.
Employee
Relations
At
year-end 2007, General Electric Company and consolidated affiliates employed
approximately 327,000 persons, of whom approximately 155,000 were employed in
the United States. For further information about employees, see page 63 of
the 2007 Annual Report to Shareowners.
Approximately
20,500 GE manufacturing and service employees in the United States are
represented for collective bargaining purposes by a total of approximately 125
different union locals. A majority of such employees are represented by union
locals that are affiliated with, and bargain in coordination with, the IUE-CWA,
The Industrial Division of the Communication Workers of America, AFL-CIO, CLC.
During 2007, General Electric Company negotiated four-year contracts with unions
representing a substantial majority of the unionized employees in the United
States. Most of these contracts will terminate in June 2011.
Approximately
3,500 staff employees (and a large number of freelance employees) in the United
States are covered by about 160 labor agreements to which NBC Universal is a
party. These agreements are with various labor unions, expire at various dates
and are generally for a term ranging from three to five years.
Executive
Officers
See
Part III, Item 10 of this 10-K Report for information about Executive Officers
of the Registrant.
Other
Because
of the diversity of our products and services, as well as the wide geographic
dispersion of our production facilities, we use numerous sources for the wide
variety of raw materials needed for our operations. We have not been adversely
affected by the inability to obtain raw materials.
We
own, or hold licenses to use, numerous patents. New patents are continuously
being obtained through our research and development activities as existing
patents expire. Patented inventions are used both within the Company and are
licensed to others, but no operating segment is substantially dependent on any
single patent or group of related patents.
Agencies
of the U.S. Government constitute our largest single customer. An analysis of
sales of goods and services as a percentage of revenues follows:
|
%
of Consolidated Revenues
|
|
%
of GE Revenues
|
|
2007
|
|
2006
|
|
2005
|
|
2007
|
|
2006
|
|
2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
sales to U.S. Government Agencies
|
2
|
%
|
|
2
|
%
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
4
|
%
|
Infrastructure
segment defense-related sales
|
2
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|
3
|
|
|
3
|
|
GE
is a trademark and service mark of General Electric Company.
The
Company’s Internet address is www.ge.com. Our annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments
to those reports are available, without charge, on our website,
www.ge.com/en/company/investor/secfilings.htm, as soon as reasonably practicable
after they are filed electronically with the SEC. Copies are also available,
without charge, from GE Corporate Investor Communications, 3135 Easton Turnpike,
Fairfield, CT 06828. Reports filed with the SEC may be viewed at www.sec.gov or
obtained at the SEC Public Reference Room in Washington, D.C. Information
regarding the operation of the Public Reference Room may be obtained by calling
the SEC at 1-800-SEC-0330. References to our website addressed in this report
are provided as a convenience and do not constitute, or should be viewed as, an
incorporation by reference of the information contained on, or available
through, the website. Therefore, such information should not be considered part
of this report.
The
following discussion of risk factors contains “forward-looking statements,” as
discussed in Item 1. These risk factors may be important to understanding any
statement in this Annual Report on Form 10-K or elsewhere. The following
information should be read in conjunction with Management’s Discussion and
Analysis (MD&A), and the consolidated financial statements and related notes
incorporated by reference in this report.
Our
businesses routinely encounter and address risks, some of which will cause our
future results to be different - sometimes
materially different - than we presently
anticipate. Discussion about important operational risks that our businesses
encounter can be found in the MD&A section of our 2007 Annual Report to
Shareowners and in the business descriptions in Item 1. of this Form 10-K.
Below, we have described certain important strategic risks. Our reactions to
material future developments as well as our competitors’ reactions to those
developments will determine our future results.
Our
global growth is subject to a number of economic and political
risks
We
conduct our operations in virtually every part of the world. Global economic
developments affect businesses such as ours in many ways. Operations are subject
to the effects of global competition. Our global business is affected by local
economic environments, including inflation, recession and currency volatility.
Political changes, some of which may be disruptive, can interfere with our
supply chain, our customers and all of our activities in a particular location.
While some of these risks can be hedged using derivatives or other financial
instruments and some are insurable, such attempts to mitigate these risks are
costly and not always successful.
Our
credit ratings are important to our cost of capital
The
major debt agencies routinely evaluate our debt and have given their highest
debt ratings to us. This evaluation is based on a number of factors, which
include financial strength as well as transparency with rating agencies
and timeliness of financial reporting. One of our strategic
objectives is to maintain our “Triple A” ratings as they serve to lower our
borrowing costs and facilitate our access to a variety of lenders. Failure to
maintain our Triple A debt ratings could adversely affect our cost of funds and
related margins, liquidity, competitive position and access to capital
markets.
The
success of our business depends on achieving our objectives for strategic
acquisitions and dispositions
With
respect to acquisitions and mergers, we may not be able to identify suitable
candidates at terms acceptable to us, or may not achieve expected returns and
other benefits as a result of integration challenges, such as personnel and
technology. We will continue to evaluate the potential disposition of assets and
businesses that may no longer help us meet our objectives. When we decide to
sell assets or a business, we may encounter difficulty in finding buyers or
alternative exit strategies on acceptable terms in a timely manner, which could
delay the accomplishment of our strategic objectives, or we may dispose of a
business at a price or on terms, which are less than we had anticipated. In
addition, there is a risk that we sell a business whose subsequent performance
exceeds our expectations, in which case our decision would have potentially
sacrificed enterprise value. Correspondingly, we may be too optimistic about a
particular business’s prospects, in which case we may be unable to find a buyer
at a price acceptable to us and therefore may have potentially sacrificed
enterprise value.
We
are subject to a wide variety of laws and regulations
Our
businesses are subject to regulation by U.S. federal and state laws and foreign
laws, regulations and policies. Changes to laws or regulations may even require
us to modify our business objectives if existing practices become more
restricted, subject to escalating costs or prohibited outright. Particular risks
include regulatory risks arising from local laws, such as laws that reduce the
allowable lending rate or limit consumer borrowing, from local liquidity
regulations that may increase the risks of not being able to retrieve assets,
and changes to tax law that may affect our return on investments. For example,
GE’s effective tax rate is reduced because active business income earned and
indefinitely reinvested outside the United States is taxed at less than the U.S.
rate. A significant portion of this reduction depends upon a provision of U.S.
tax law that defers the imposition of U.S. tax on certain active financial
services income until that income is repatriated to the United States as a
dividend. This provision is consistent with international tax norms and permits
U.S. financial services companies to compete more effectively with foreign banks
and other foreign financial institutions in global markets. This provision,
which is scheduled to expire at the end of 2008, has been scheduled to expire on
four previous occasions, and each time it has been extended by Congress. If this
provision is not extended, the current U.S. tax imposed on active financial
services income earned outside the United States would increase, making it more
difficult for U.S. financial services companies to compete in global markets.
Our businesses and the industries in which we operate are also at times being
reviewed or investigated by regulators, which could lead to enforcement actions,
fines and penalties or the assertion of private litigation claims and
damages.
Changes
in the real estate markets are highly uncertain
We
provide financing for the acquisition, refinancing and renovation of various
types of properties. We also consider opportunities to buy and sell properties
which may result in significant outlays or proceeds of cash, either individually
or in the aggregate. The profitability of real estate investments is largely
dependent upon the specific geographic market in which they are located and the
perceived value of that market at the time of sale. We may have difficulty
optimizing that mix and such activity may vary significantly from one year to
the next.
|
Unresolved
Staff Comments.
|
Not
applicable.
Manufacturing
operations are carried out at approximately 300 manufacturing plants located in
40 states in the United States and Puerto Rico and at 261 manufacturing plants
located in 40 other countries.
Item
3.
|
Legal
Proceedings.
|
As
previously reported, in January 2005 the staff of the U.S. Securities and
Exchange Commission (SEC) informed us that it had commenced an investigation and
requested certain documents and information with respect to the use of hedge
accounting for derivatives by us and GE Capital. In August 2005 the SEC staff
advised us that the SEC had issued a formal order of investigation in the
matter. The SEC staff has taken testimony in this matter and has requested
information about other GE accounting policies and practices, including items
related to revenue recognition.
In
connection with the SEC’s investigation, we are conducting an internal review of
revenue recognition matters. Our review has been thorough and extensive,
continuing for more than a year, and has been conducted using substantial
internal and external resources. These resources have included extensive
redeployment of our 430 person audit staff to focus on this review; substantial
time and resources of our controllership and finance organizations and our
internal legal organization; accounting and expert support from our auditor,
KPMG; and extensive resources from outside legal counsel and accounting
expertise, who have advised us and our audit committee. We have regularly
reported results of the review to the SEC staff as conclusions have been reached
and in cases where errors have been identified, we have publicly disclosed them
in our filings with the SEC.
In
a Form 8-K filed January 18, 2008, we reported that we had determined that we
made an error in the manner in which we changed our accounting for profits on
certain aftermarket spare parts. As we reported, under long-term product
services agreements, we provide repair and maintenance for installed products,
including spare parts. We recognize revenue and profits over the contract period
in proportion to our contract costs. An element of our contract costs is the
cost of spare parts. Before January 1, 2002, our Aviation business accounted for
the profits on spare parts installed pursuant to long-term product service
agreements either in its spare parts unit or in its revenue recognition model
for commercial engines. Effective January 1, 2002, with the concurrence of KPMG,
we changed our accounting for spare parts in two ways that largely offset: to
exclude all spare parts from the model for engine sales and to include margin in
long-term services agreements to the extent spare parts are associated with such
agreements.
In
making this change, we changed our estimate of the unperformed portions of
long-term product services agreements to use our cost instead of catalogue list
price. We have determined that because we did not also re-compute our pre-2002
spare parts costs on the same basis, we overestimated the percentage of
completion of affected agreements and underestimated the related contract profit
rates, an error that resulted in accelerating revenues and profits attributable
to such agreements in 2002 and understating revenues and profits in some future
periods. Similar adjustments in the accounting method for estimating the cost of
spare parts installed pursuant to long-term services agreements were made by
Aviation in 2003 with respect to spare parts manufactured by a joint venture
partner and in our Energy business in 2006. We also reported that we had
determined that for periods prior to 2004, we made an error in our application
and description of appropriate revenue measurement principles in certain
Infrastructure businesses. Our associated routines and controls failed to
prevent or detect these errors.
We
and our audit committee, with the assistance of the committee’s independent
counsel, have evaluated the circumstances surrounding and the effect on our
previously reported financial statements of the items reported in our January
18, 2008 Form 8-K, and have determined that the adjustments relating to these
items, both individually and together with the adjustments for the errors
identified in our Form 10-Qs filed on July 27, 2007 and November 2, 2007, are
not material to our financial statements and have determined that restatement of
our prior period financial statements is not required. We have included the
adjustments for these items in prior period financial information reported in
this Form 10-K.
We
also have considered these matters in context of our review of our internal
control over financial reporting and have concluded that the internal control
deficiencies implicated by the items identified above constitute significant
deficiencies in our internal control over financial reporting, but do not
(individually or in the aggregate with other identified deficiencies) constitute
a material weakness in the Company’s internal control.
We
and our audit committee take these internal control matters very seriously and
are committed to continuing to improve our internal control processes and
procedures. In response to these matters, we and our audit committee have been
actively engaged in the planning and implementation of remediation efforts to
address the identified deficiencies in our internal controls with respect to our
revenue recognition policies and procedures, and to enhance our overall control
environment. We have already undertaken, and are continuing to
implement, a number of remedial actions and internal control
enhancements:
· |
Strengthening
our expertise and technical controllership resources in corporate
accounting and our internal audit staff devoted to complex accounting
matters;
|
· |
Implementing
improved procedures for our corporate accounting and internal audit staff
for review of accounting for unusual
transactions;
|
· |
Enhancing
our operational controllership resources, structure and processes to
oversee GE businesses to better ensure controllership policies are fully
executed;
|
· |
Enhancing
and clarifying our global accounting policies and procedures for revenue
recognition and our related training programs and
communication;
|
· |
Improving
the processes and procedures around documentation of critical accounting
areas and judgments and accounting changes, and enhancing communication of
these matters to senior management and our audit
committee;
|
· |
Continuing
to stress leadership communication about integrity, accuracy and
transparency; and
|
· |
Evaluating
responsibility, where errors have occurred, with respect to the employees
involved in the transactions related to such errors and making appropriate
personnel determinations based on such
evaluations.
|
We
continue to cooperate with the ongoing SEC investigation and to discuss the
investigation and issues arising in that investigation and our internal review
with the SEC staff with a goal of completing our review and resolving these
matters as soon as practicable. Our senior management and audit committee are
monitoring the review closely with the assistance of outside counsel and
accounting experts. We and our audit committee are committed to
addressing issues that arise and to providing transparent disclosure to our
investors concerning these matters.
The Antitrust
Division of the Department of Justice (DOJ) and the SEC are continuing to
conduct an industry-wide investigation of marketing and sales of guaranteed
investment contracts, and other financial instruments, to municipalities. In
connection with this investigation, two subsidiaries of GE Capital received
subpoenas in 2006: GE Funding CMS (Trinity Funding Co.) received a subpoena from
the DOJ requesting documents and GE Funding Capital Market Services, Inc.
received a subpoena from the SEC that requests similar information about Trinity
Funding Company, LLC. The Company is cooperating fully with the SEC and DOJ in
this matter.
As
previously reported, in April 2006 the U.S. Environmental Protection Agency
(EPA) informed the company that it was contemplating seeking $990,000 in
penalties for violations of the Clean Air Act at its recently sold Mt. Vernon,
Indiana Plastics facility. EPA has asserted that the company failed to
adequately control emissions from valves and inlet pipes in an underground
piping system. We disagree with those assertions and EPA has already modified
its position to reduce the number of potential violations based on conversations
with GE. The company has engaged in settlement discussions with the Agency over
both the nature and severity of the alleged violations.
Item
4.
|
Submission
of Matters to a Vote of Security
Holders.
|
Not
applicable.
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
|
With
respect to “Market Information,” in the United States, GE common stock is listed
on the New York Stock Exchange (its principal market) and on the Boston Stock
Exchange. GE common stock also is listed on the London Stock Exchange and on
Euronext Paris. Trading prices, as reported on the New York Stock Exchange,
Inc., Composite Transactions Tape, and dividend information follow:
|
Common
stock market price
|
|
Dividends
|
(In
dollars)
|
High
|
|
Low
|
|
declared
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
Fourth
quarter
|
$42.15
|
|
$36.07
|
|
$.31
|
Third
quarter
|
42.07
|
|
36.20
|
|
.28
|
Second
quarter
|
39.77
|
|
34.55
|
|
.28
|
First
quarter
|
38.28
|
|
33.90
|
|
.28
|
|
|
|
|
|
|
2006
|
|
|
|
|
|
Fourth
quarter
|
$38.49
|
|
$34.62
|
|
$.28
|
Third
quarter
|
35.65
|
|
32.06
|
|
.25
|
Second
quarter
|
35.24
|
|
32.78
|
|
.25
|
First
quarter
|
35.63
|
|
32.21
|
|
.25
|
As
of January 31, 2008, there were about 607,000 shareowner accounts of
record.
Period(a)
|
|
Total
number
of
shares
purchased(a)(b)
|
|
Average
price
paid
per
share
|
|
Total
number of
shares
purchased as
part
of our share
repurchase
programs(c)
|
|
Approximate
dollar
value
of shares that
may
yet be purchased
under
our share
repurchase
program
|
(Shares
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
|
|
|
55,498
|
|
|
|
$40.45
|
|
|
|
54,322
|
|
|
|
|
|
|
November
|
|
|
42,991
|
|
|
|
$38.49
|
|
|
|
42,934
|
|
|
|
|
|
|
December
|
|
|
43,843
|
|
|
|
$37.11
|
|
|
|
43,643
|
(d)
|
|
|
|
|
|
Total
|
|
|
142,332
|
|
|
|
$38.83
|
|
|
|
140,899
|
|
|
|
$
|
14.9
billion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Information
is presented on a fiscal calendar basis, consistent with our quarterly
financial reporting.
|
(b)
|
This
category includes 1,433 thousand shares repurchased from our various
benefit plans, primarily the GE Savings and Security Program (the
S&SP). Through the S&SP, a defined contribution plan with 401(k)
features, we repurchase shares resulting from changes in investment
options by plan participants.
|
(c)
|
This
balance represents the number of shares that were repurchased through the
2004 GE Share Repurchase Program as modified by the GE Board in November
2005 and July 2007 (the 2004 Program) under which we were authorized to
repurchase up to $27 billion of Company common stock through 2008. This
program was completed as of December 31, 2007. The GE Board approved a new
three-year, $15 billion program in December 2007 (the 2007 Program), of
which $14.9 billion remains. The 2004 Program and 2007 Program,
collectively referred to as the Programs are flexible and shares are
acquired with a combination of borrowings and free cash flow from the
public markets and other sources, including GE Stock Direct, a stock
purchase plan that is available to the public. As major acquisitions or
other circumstances warrant, we modify the frequency and amount of share
repurchases under the Programs.
|
(d)
|
This
amount includes 2,900 thousand shares from the new program.
|
Item
6.
|
Selected
Financial Data.
|
Incorporated
by reference to data for revenues; net earnings; net earnings per share (basic
and diluted); dividends declared; dividends declared per share; long-term
borrowings; and total assets appearing on page 63 of the Annual Report to
Shareowners for the fiscal year ended December 31, 2007.
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
Incorporated
by reference to pages 42-62 and 107-111 of the Annual Report to Shareowners
for the fiscal year ended December 31, 2007.
|
Quantitative
and Qualitative Disclosures About Market
Risk.
|
Incorporated
by reference to pages 55 and 56 of the Annual Report to Shareowners for the
fiscal year ended December 31, 2007.
Item
8.
|
Financial
Statements and Supplementary Data.
|
See
index under Item 15.
Item
9.
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure.
|
Not
applicable.
Item
9A.
|
Controls
and Procedures.
|
Under
the direction of our Chief Executive Officer and Chief Financial Officer, we
evaluated our disclosure controls and procedures and internal control over
financial reporting and concluded that (i) our disclosure controls and
procedures were effective as of December 31, 2007, and (ii) except as described
in “Part I, Item 3. Legal Proceedings,” no change in internal control over
financial reporting occurred during the quarter ended December 31, 2007, that
has materially affected, or is reasonably likely to materially affect, such
internal control over financial reporting.
Management’s
annual report on internal control over financial reporting and the report of our
independent registered public accounting firm are incorporated by reference to
pages 40 and 41 of the Annual Report to Shareowners for the fiscal year ended
December 31, 2007.
Item
9B.
|
Other
Information.
|
Not
applicable.
Item
10.
|
Directors,
Executive Officers and Corporate
Governance.
|
Executive
Officers of the Registrant (As of February 20, 2008)
Name
|
|
Position
|
|
Age
|
|
Date
assumed
Executive
Officer
Position
|
|
|
|
|
|
|
|
Jeffrey
R. Immelt
|
|
Chairman
of the Board and Chief Executive Officer
|
|
52
|
|
January
1997
|
Philip
D. Ameen
|
|
Vice
President and Comptroller
|
|
59
|
|
April
1994
|
Kathryn
A. Cassidy
|
|
Vice
President and GE Treasurer
|
|
53
|
|
March
2003
|
Pamela
Daley
|
|
Senior
Vice President, Corporate Business Development
|
|
55
|
|
July
2004
|
Brackett
B. Denniston III
|
|
Senior
Vice President and General Counsel
|
|
60
|
|
February
2004
|
Joseph
M. Hogan
|
|
Senior
Vice President, GE Healthcare
|
|
50
|
|
November
2000
|
John
F. Lynch
|
|
Senior
Vice President, Human Resources
|
|
55
|
|
January
2007
|
Michael
A. Neal
|
|
Vice
Chairman of General Electric Company; Chairman, GE Capital Services,
Inc.
|
|
54
|
|
September
2002
|
John
G. Rice
|
|
Vice
Chairman of General Electric Company; President & CEO, GE
Infrastructure
|
|
51
|
|
September
1997
|
Keith
S. Sherin
|
|
Vice
Chairman of General Electric Company and Chief Financial
Officer
|
|
49
|
|
January
1999
|
Lloyd
G. Trotter
|
|
Vice
Chairman of General Electric Company; President & CEO, GE
Industrial
|
|
62
|
|
November
1992
|
Robert
C. Wright
|
|
Vice
Chairman of General Electric Company
|
|
64
|
|
July
2000
|
All
Executive Officers are elected by the Board of Directors for an initial term
which continues until the Board meeting immediately preceding the next annual
statutory meeting of shareowners, and thereafter are elected for one-year terms
or until their successors have been elected. All Executive Officers have been
executives of GE for the last five years.
The
remaining information called for by this item is incorporated by reference to
“Election of Directors,” “Corporate Governance,” “Board of Directors and
Committees” and “Additional Information - Section 16(a)
Beneficial Ownership Reporting Compliance” in our definitive proxy statement for
our 2008 Annual Meeting of Shareowners to be held April 23, 2008,
which will be filed within 120 days of the end of our fiscal year ended December
31, 2007 (the 2008 Proxy Statement).
Item
11.
|
Executive
Compensation.
|
Incorporated
by reference to “Compensation Discussion and Analysis,” “Compensation Committee
Report,” “Summary Compensation Table,” “Grants of Plan-Based Awards,”
“Outstanding Equity Awards at Fiscal Year-End,” “Option Exercises and Stock
Vested,” “Pension Benefits,” “Nonqualified Deferred Compensation,” “Potential
Payments Upon Termination” and “Non-management Directors’ Compensation” in the
2008 Proxy Statement.
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Shareholder Matters.
|
Incorporated
by reference to “Information on Stock Ownership” in the 2008 Proxy
Statement.
The
remaining information called for by this item relating to “Securities Authorized
for Issuance under Equity Compensation Plans” is incorporated by reference to
note 23 on pages 94-96 of the Annual Report to Shareowners for the fiscal
year ended December 31, 2007.
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence.
|
Incorporated
by reference to “Related Person Transactions” and “Corporate Governance” in the
2008 Proxy Statement.
Item
14.
|
Principal
Accounting Fees and Services.
|
Incorporated
by reference to “Independent Auditor” in the 2008 Proxy Statement.
Item
15.
|
Exhibits,
Financial Statement Schedules.
|
(a)1.
|
Financial
statements applicable to General Electric Company and consolidated
affiliates are contained on the page(s) indicated in the GE Annual Report
to Shareowners for the fiscal year ended December 31, 2007, a copy of
which is attached as Exhibit 13.
|
|
Annual
Report
Page(s)
|
|
|
Statement
of earnings for the years ended December 31, 2007, 2006 and
2005
|
64
|
Consolidated
statement of changes in shareowners’ equity for the years
|
|
ended
December 31, 2007, 2006 and 2005
|
64
|
Statement
of financial position at December 31, 2007 and 2006
|
66
|
Statement
of cash flows for the years ended December 31, 2007, 2006 and
2005
|
68
|
Management’s
annual report on internal control over financial reporting
|
40
|
Report
of independent registered public accounting firm
|
41
|
Other
financial information:
|
|
Summary
of operating segments
|
47
|
Notes
to consolidated financial statements
|
70-106
|
Operating
segment information
|
46-51
98
and 99
106
|
Geographic
segment information
|
51,
52, 98 and 99
|
Operations
by quarter (unaudited)
|
104
|
(a)2.
|
The
schedules listed in Reg. 210.5-04 have been omitted because they are not
applicable or the required information is shown in the consolidated
financial statements or notes thereto.
|
|
(a)3.
|
Exhibit
Index
|
|
|
3(a)
|
The
Certificate of Incorporation, as amended, of General Electric Company
(Incorporated by reference to Exhibit (3.1) of General Electric’s Current
Report on Form 8-K dated April 25, 2007 (Commission file number
001-00035)).
|
|
|
3(b)
|
The
By-Laws, as amended, of General Electric Company (Incorporated by
reference to Exhibit (3.2) of General Electric’s Current Report on Form
8-K dated April 25, 2007 (Commission file number
001-00035)).
|
|
|
4(a)
|
Amended
and Restated General Electric Capital Corporation (GECC) Standard Global
Multiple Series Indenture Provisions dated as of February 27, 1997
(Incorporated by reference to Exhibit 4(a) to GECC’s Registration
Statement on Form S-3, File No. 333-59707 (Commission file number
1-6461)).
|
|
|
4(b)
|
Third
Amended and Restated Indenture dated as of February 27, 1997, between GECC
and The Bank of New York, as successor trustee (Incorporated by reference
to Exhibit 4(c) to GECC’s Registration Statement on Form S-3, File No.
333-59707 (Commission file number 1-6461)).
|
|
|
4(c)
|
First
Supplemental Indenture dated as of May 3, 1999, supplemental to Third
Amended and Restated Indenture dated as of February 27, 1997 (Incorporated
by reference to Exhibit 4(dd) to GECC’s Post-Effective Amendment No. 1 to
Registration Statement on Form S-3, File No. 333-76479 (Commission file
number 1-6461)).
|
|
|
4(d)
|
Second
Supplemental Indenture dated as of July 2, 2001, supplemental to Third
Amended and Restated Indenture dated as of February 27, 1997 (Incorporated
by reference to Exhibit 4 (f) to GECC’s Post-Effective Amendment No.1 to
Registration Statement on Form S-3, File No. 333-40880 (Commission file
number 1-6461)).
|
|
|
4(e)
|
Third
Supplemental Indenture dated as of November 22, 2002, supplemental to
Third Amended and Restated Indenture dated as of February 27, 1997
(Incorporated by reference to Exhibit 4(cc) to GECC’s Post-Effective
Amendment No. 1 to the Registration Statement on Form S-3, File No.
333-100527 (Commission file number 1-6461)).
|
|
|
4(f)
|
Senior
Note Indenture dated as of January 1, 2003, between General Electric and
The Bank of New York, as trustee for the senior debt securities
(Incorporated by reference to Exhibit 4(a) to General Electric’s Current
Report on Form 8-K filed on January 29, 2003 (Commission file number
001-00035)).
|
|
|
4(g)
|
Form
of Global Medium-Term Note, Series A, Fixed Rate Registered Note
(Incorporated by reference to Exhibit 4(m) to GECC’s Registration
Statement on Form S-3, File No. 333-100527 (Commission file number
1-6461)).
|
|
|
4(h)
|
Form
of Global Medium-Term Note, Series A, Floating Rate Registered Note
(Incorporated by reference to Exhibit 4(n) to the GECC’s Registration
Statement on Form S-3, File No. 333-100527 (Commission file number
1-6461)).
|
|
|
4(i)
|
Form
of LIBOR Floating Rate Note (Incorporated by reference to Exhibit 4 of
General Electric’s Current Report on Form 8-K dated October 29, 2003
(Commission file number 001-00035)).
|
|
|
4(j)
|
Eighth
Amended and Restated Fiscal and Paying Agency Agreement among GECC, GE
Capital Australia Funding Pty Ltd., GE Capital European Funding, GE
Capital Canada Funding Company, GE Capital UK Funding and JPMorgan Chase
Bank, N.A., and J.P. Morgan Bank Luxembourg, S.A., dated as of May 12,
2006 (Incorporated by reference to Exhibit 4(f) to General Electric
Capital Services, Inc.’s Form 10-K Report for the fiscal year ended
December 31, 2006).
|
|
|
4(k)
|
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 consolidated subsidiaries.*
|
|
|
4(l)
|
Indenture
dated December 1, 2005, between General Electric and The Bank of New York
(as successor to JP Morgan Chase Bank, N.A.) (Incorporated by reference to
Exhibit 4(a) of General Electric’s Current Report on Form 8-K filed on
December 9, 2005 (Commission file number 001-00035)).
|
|
|
4(m)
|
Form
of LIBOR Floating Rate Note due 2008 (Incorporated by reference to Exhibit
4(b) of General Electric’s Current Report on Form 8-K filed on December 9,
2005 (Commission file number 001-00035)).
|
|
|
4(n)
|
Form
of 5.250% Note due 2017 (Incorporated by referenced to Exhibit 4(b) of
General Electric’s Current Report on Form 8-K filed on December 5, 2007
(Commission file number 001-00035)).
|
|
|
4(o)
|
Letter
from the Senior Vice President and Chief Financial Officer of General
Electric to GECC dated September 15, 2006, with respect to returning
dividends, distributions or other payments to GECC in certain
circumstances described in the Indenture for Subordinated Debentures dated
September 1, 2006, between GECC and the Bank of New York (as successor to
JP Morgan Chase Bank, N.A.) (Incorporated by reference to Exhibit 4(c) to
GECC’s Post-Effective Amendment No. 2 to Registration Statement on
Form S-3, File No. 333-132807).
|
|
|
(10)
|
All
of the following exhibits consist of Executive Compensation Plans or
Arrangements:
|
|
|
|
(a)
|
General
Electric Incentive Compensation Plan, as amended effective July 1, 1991
(Incorporated by reference to Exhibit 10(a) to General Electric Annual
Report on Form 10-K (Commission file number 001-00035) for the fiscal year
ended December 31, 1991).
|
|
|
|
(b)
|
General
Electric Financial Planning Program, as amended through September 1993
(Incorporated by reference to Exhibit 10(h) to General Electric Annual
Report on Form 10-K (Commission file number 001-00035) for the fiscal year
ended December 31, 1993).
|
|
|
|
(c)
|
General
Electric Supplemental Life Insurance Program, as amended February 8, 1991
(Incorporated by reference to Exhibit 10(i) to General Electric Annual
Report on Form 10-K (Commission file number 001-00035) for the fiscal year
ended December 31, 1990).
|
|
|
|
(d)
|
General
Electric Directors’ Charitable Gift Plan, as amended through December 2002
(Incorporated by reference to Exhibit 10(i) to General Electric Annual
Report on Form 10-K (Commission file number 001-00035) for the fiscal year
ended December 31, 2002).
|
|
|
|
(e)
|
General
Electric Leadership Life Insurance Program, effective January 1, 1994
(Incorporated by reference to Exhibit 10(r) to General Electric Annual
Report on Form 10-K (Commission file number 001-00035) for the fiscal year
ended December 31, 1993).
|
|
|
|
(f)
|
General
Electric 1996 Stock Option Plan for Non-Employee Directors (Incorporated
by reference to Exhibit A to the General Electric Proxy Statement for its
Annual Meeting of Shareowners held on April 24, 1996 (Commission file
number 001-00035)).
|
|
|
|
(g)
|
General
Electric Supplementary Pension Plan, as amended effective January 1, 2005
(Incorporated by reference to Exhibit 10(q) to the General Electric Annual
Report on Form 10-K (Commission file number 001-00035) for the fiscal year
ended December 31, 2004).
|
|
|
|
(h)
|
General
Electric 2003 Non-Employee Director Compensation Plan (Incorporated by
reference to Exhibit 10(w) to General Electric Report on Form 10-K
(Commission file number 001-00035) for the fiscal year ended December 31,
2002).
|
|
|
|
(i)
|
Amendment
to Nonqualified Deferred Compensation Plans, dated as of December 14, 2004
(Incorporated by reference to Exhibit 10(w) to the General Electric Annual
Report on Form 10-K (Commission file number 001-00035) for the fiscal year
ended December 31, 2004).
|
|
|
|
(j)
|
GE
Retirement for the Good of the Company Program, as amended effective
January 1, 2005 (Incorporated by reference to Exhibit 10(x) to the General
Electric Annual Report on Form 10-K (Commission file number 001-00035) for
the fiscal year ended December 31, 2004).
|
|
|
|
(k)
|
GE
Excess Benefits Plan, effective July 1, 2003 (Incorporated by reference to
Exhibit 10(y) to the General Electric Annual Report on Form 10-K
(Commission file number 001-00035) for the fiscal year ended December 31,
2004).
|
|
|
|
(l)
|
General
Electric 2006 Executive Deferred Salary Plan (Incorporated by reference to
Exhibit 10 of General Electric’s Current Report on Form 8-K dated
September 16, 2005 (Commission file number 001-0035)).
|
|
|
|
(m)
|
General
Electric Company 2007 Long-Term Incentive Plan (Incorporated by reference
to Exhibit 10.1 of General Electric’s Current Report on Form 8-K dated
April 27, 2007 (Commission file number 001-0035)).
|
|
|
|
(n)
|
Form
of Agreement for Stock Option Grants to Executive Officers under the
General Electric Company 2007 Long-term Incentive Plan (Incorporated by
reference to Exhibit 10.2 of General Electric’s Current Report on Form 8-K
dated April 27, 2007 (Commission file number 001-0035)).
|
|
|
|
(o)
|
Form
of Agreement for Annual Restricted Stock Unit Grants to Executive Officers
under the General Electric Company 2007 Long-term Incentive Plan
(Incorporated by reference to Exhibit 10.3 of General Electric’s Current
Report on Form 8-K dated April 27, 2007 (Commission file number
001-0035)).
|
|
|
|
(p)
|
Form
of Agreement for Periodic Restricted Stock Unit Grants to Executive
Officers under the General Electric Company 2007 Long-term Incentive Plan
(Incorporated by reference to Exhibit 10.4 of General Electric’s Current
Report on Form 8-K dated April 27, 2007 (Commission file number
001-0035)).
|
|
|
|
(q)
|
Form
of Agreement for Long Term Performance Award Grants to Executive Officers
under the General Electric Company 2007 Long-term Incentive Plan
(Incorporated by reference to Exhibit 10.5 of General Electric’s Current
Report on Form 8-K dated April 27, 2007 (Commission file number
001-0035)).
|
|
|
|
(r)
|
Form
of Agreement for Performance Stock Unit Grants to Executive Officers under
the General Electric Company 2007 Long-term Incentive Plan (Incorporated
by reference to Exhibit 10.6 of General Electric’s Current Report on Form
8-K dated April 27, 2007 (Commission file
number 001-0035)).
|
|
|
(11)
|
Statement
re Computation of Per Share Earnings.**
|
|
|
(12)
|
Computation
of Ratio of Earnings to Fixed Charges.*
|
|
|
(13)
|
GE’s
2007 Annual Report to Shareowners, certain sections of which have been
incorporated herein by reference.*
|
|
|
(21)
|
Subsidiaries
of Registrant.*
|
|
|
(23)
|
Consent
of independent registered public accounting firm.*
|
|
|
(24)
|
Power
of Attorney.*
|
|
|
31(a)
|
Certification
Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange
Act of 1934, as amended. *
|
|
|
31(b)
|
Certification
Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange
Act of 1934, as amended.*
|
|
|
(32)
|
Certification
Pursuant to 18 U.S.C. Section 1350.*
|
|
|
99(a)
|
Income
Maintenance Agreement, dated March 28, 1991, between the Registrant and
General Electric Capital Corporation (Incorporated by reference to Exhibit
99(h) to General Electric Capital Corporation’s Registration Statement on
Form S-3 (File No. 333-100527)).
|
|
|
99(b)
|
Undertaking
for Inclusion in Registration Statements on Form S-8 of General Electric
Company (Incorporated by reference to Exhibit 99(b) to General Electric
Annual Report on Form 10-K (Commission file number 001-00035) for the
fiscal year ended December 31, 1992).
|
|
*
|
Filed
electronically herewith.
|
**
|
Information
required to be presented in Exhibit 11 is provided in note 8 to the 2007
Annual Report to Shareowners in accordance with the provisions of FASB
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per
Share.
|
Pursuant
to the requirements of Section 13 of the Securities Exchange Act of 1934, the
registrant has duly caused this annual report on Form 10-K for the fiscal year
ended December 31, 2007, to be signed on its behalf by the undersigned, and in
the capacities indicated, thereunto duly authorized in the Town of Fairfield and
State of Connecticut on the 20th day of February
2008.
|
|
General
Electric Company
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
By
|
/s/
Keith S. Sherin
|
|
|
|
Keith
S. Sherin
Vice
Chairman and Chief Financial Officer
(Principal
Financial Officer)
|
|
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 dates indicated.
|
Signer
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Keith S. Sherin
|
|
Principal
Financial Officer
|
|
February
20, 2008
|
|
Keith
S. Sherin
Vice
Chairman and
Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Philip D. Ameen
|
|
Principal
Accounting Officer
|
|
February
20, 2008
|
|
Philip
D. Ameen
Vice
President and Comptroller
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
R. Immelt*
|
|
Chairman
of the Board of Directors
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
|
|
James
I. Cash, Jr.*
|
|
Director
|
|
|
|
William
M. Castell*
|
|
Director
|
|
|
|
Ann
M. Fudge*
|
|
Director
|
|
|
|
Claudio
X. Gonzalez*
|
|
Director
|
|
|
|
Susan
Hockfield*
|
|
Director
|
|
|
|
Andrea
Jung*
|
|
Director
|
|
|
|
Alan
G. Lafley*
|
|
Director
|
|
|
|
Robert
W. Lane*
|
|
Director
|
|
|
|
Ralph
S. Larsen*
|
|
Director
|
|
|
|
Rochelle
B. Lazarus*
|
|
Director
|
|
|
|
Sam
Nunn*
|
|
Director
|
|
|
|
Roger
S. Penske*
|
|
Director
|
|
|
|
Robert
J. Swieringa*
|
|
Director
|
|
|
|
Douglas
A. Warner III*
|
|
Director
|
|
|
|
Robert
C. Wright*
|
|
Director
|
|
|
|
|
|
|
|
|
|
A
majority of the Board of Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*By
|
/s/
Michael R. McAlevey
|
|
|
|
|
|
Michael
R. McAlevey
Attorney-in-fact
February
20, 2008
|
|
|
|
|